Income Taxes (Tables)

12 Months Ended

Dec. 31, 2010

Income Taxes

Income Before Income Taxes

(Millions)	2010		2009		2008
United States	$	2,778	$	2,338	$	2,251
International	2,977		2,294		2,857
Total	$	5,755	$	4,632	$	5,108

Provision for Income Taxes

(Millions)	2010			2009		2008
Currently payable
Federal	$	837		$	88	$	882
State	73			13		14
International	796			586		820
Deferred
Federal	55			489		(168		)
State	43			56		34
International	(212		)	156		6
Total	$	1,592		$	1,388	$	1,588

Components of Deferred Tax Assets and Liabilities

(Millions)	2010			2009
Deferred tax assets:
Accruals not currently deductible
Employee benefit costs	$	99		$	168
Product and other claims	148			160
Miscellaneous accruals	175			180
Pension costs	724			852
Stock-based compensation	501			473
Net operating/capital loss carryforwards	437			59
Foreign tax credits	281			286
Other - net	46			—
Gross deferred tax assets	2,411			2,178
Valuation allowance	(128		)	(23		)
Total deferred tax assets	$	2,283		$	2,155
Deferred tax liabilities:
Product and other insurance receivables	$	(59	)	$	(80	)
Accelerated depreciation	(695		)	(571		)
Intangible amortization	(823		)	(662		)
Other - net	—			(5		)
Total deferred tax liabilities	(1,577		)	(1,318		)
Net deferred tax assets	$	706		$	837

Reconciliation of Effective Income Tax Rate

	2010		2009		2008
Statutory U.S. tax rate	35.0	%	35.0	%	35.0	%
State income taxes — net of federal benefit	1.2		1.0		0.8
International income taxes — net	(7.1	)	(5.3	)	(4.1	)
U.S. research and development credit	(0.2	)	(0.3	)	(0.5	)
Reserves for tax contingencies	(0.5	)	0.8		0.8
Restructuring actions	—		—		0.4
Medicare Modernization Act	1.0		(0.2	)	(0.2	)
Domestic Manufacturer’s deduction	(1.4	)	(0.5	)	(0.8	)
All other — net	(0.3	)	(0.5	)	(0.3	)
Effective worldwide tax rate	27.7	%	30.0	%	31.1	%

Federal, State and Foreign Tax

(Millions)	2010			2009			2008
Gross UTB Balance at January 1	$	618		$	557		$	680
Additions based on tax positions related to the current year	128			121			126
Additions for tax positions of prior years	142			164			98
Reductions for tax positions of prior years	(161		)	(177		)	(180		)
Settlements	(51		)	—			(101		)
Reductions due to lapse of applicable statute of limitations	(54		)	(47		)	(66		)
Gross UTB Balance at December 31	$	622		$	618		$	557
Net UTB impacting the effective tax rate at December 31	$	394		$	425		$	334