Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes

Income Before Income Taxes

Income Before Income Taxes
(Millions)		2012		2011		2010
United States		$	2,902	$	2,516	$	2,778
International			3,449		3,515		2,977
	Total	$	6,351	$	6,031	$	5,755

Provision for Income Taxes

Provision for Income Taxes
(Millions)			2012		2011		2010
Currently payable
	Federal		$	743	$	431	$	837
	State			75		51		73
	International			918		861		796
Deferred
	Federal			(3)		181		55
	State			10		12		43
	International			97		138		(212)
		Total	$	1,840	$	1,674	$	1,592

Components of Deferred Tax Assets and Liabilities

Components of Deferred Tax Assets and Liabilities
(Millions)			2012		2011
Deferred tax assets:
	Accruals not currently deductible
		Employee benefit costs	$	115	$	96
		Product and other claims		161		155
		Miscellaneous accruals		137		133
	Pension costs			969		1,183
	Stock-based compensation			415		483
	Net operating/capital loss carryforwards			304		392
	Foreign tax credits			285		286
	Inventory			189		174
	Other - net			18		―
Gross deferred tax assets				2,593		2,902
Valuation allowance				(29)		(82)
Total deferred tax assets			$	2,564	$	2,820
Deferred tax liabilities:
	Product and other insurance receivables		$	(60)	$	(63)
	Accelerated depreciation			(858)		(745)
	Intangible amortization			(808)		(799)
	Other			―		(84)
Total deferred tax liabilities			$	(1,726)	$	(1,691)
Net deferred tax assets			$	838	$	1,129

Reconciliation of Effective Income Tax Rate

Reconciliation of Effective Income Tax Rate
		2012		2011		2010
Statutory U.S. tax rate		35.0	%	35.0	%	35.0	%
State income taxes - net of federal benefit		0.9		0.7		1.2
International income taxes - net		(4.2)		(4.6)		(7.1)
U.S. research and development credit		-		(0.5)		(0.2)
Reserves for tax contingencies		(1.9)		(1.2)		(0.5)
Medicare Modernization Act, one-time charge		-		-		1.5
Domestic Manufacturer's deduction		(1.2)		(1.5)		(1.4)
All other - net		0.4		(0.1)		(0.8)
	Effective worldwide tax rate	29.0	%	27.8	%	27.7	%

Reconciliation of Federal, State and Foreign Tax Gross Unrecognized Tax Benefits

Federal, State and Foreign Tax
(Millions)	2012		2011		2010
Gross UTB Balance at January 1	$	594	$	622	$	618
Additions based on tax positions related to the current year		80		92		128
Additions for tax positions of prior years		114		69		142
Reductions for tax positions of prior years		(120)		(123)		(161)
Settlements		(50)		9		(51)
Reductions due to lapse of applicable statute of limitations		(90)		(75)		(54)
Gross UTB Balance at December 31	$	528	$	594	$	622
Net UTB impacting the effective tax rate at December 31	$	185	$	295	$	394