Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Taxes

Income Before Income Taxes

Income Before Income Taxes
(Millions)		2013		2012		2011
United States		$	3,194	$	2,902	$	2,516
International			3,368		3,449		3,515
	Total	$	6,562	$	6,351	$	6,031

Provision for Income Taxes

Provision for Income Taxes
(Millions)			2013		2012		2011
Currently payable
	Federal		$	948	$	743	$	431
	State			91		75		51
	International			901		918		861
Deferred
	Federal			(123)		(3)		181
	State			(2)		10		12
	International			26		97		138
		Total	$	1,841	$	1,840	$	1,674

Components of Deferred Tax Assets and Liabilities

Components of Deferred Tax Assets and Liabilities
(Millions)			2013		2012
Deferred tax assets:
	Accruals not currently deductible
		Employee benefit costs	$	140	$	115
		Product and other claims		155		161
		Miscellaneous accruals		130		137
	Pension costs			447		969
	Stock-based compensation			322		415
	Net operating/capital loss carryforwards			225		304
	Foreign tax credits			316		285
	Inventory			221		189
	Other - net			―		18
Gross deferred tax assets				1,956		2,593
Valuation allowance				(23)		(29)
Total deferred tax assets			$	1,933	$	2,564
Deferred tax liabilities:
	Product and other insurance receivables		$	(46)	$	(60)
	Accelerated depreciation			(813)		(858)
	Intangible amortization			(780)		(808)
	Other			(7)		―
Total deferred tax liabilities			$	(1,646)	$	(1,726)
Net deferred tax assets			$	287	$	838

Reconciliation of Effective Income Tax Rate

Reconciliation of Effective Income Tax Rate
		2013		2012		2011
Statutory U.S. tax rate		35.0	%	35.0	%	35.0	%
State income taxes - net of federal benefit		0.9		0.9		0.7
International income taxes - net		(6.3)		(4.2)		(4.6)
U.S. research and development credit		(0.7)		―		(0.5)
Reserves for tax contingencies		1.2		(1.9)		(1.2)
Domestic Manufacturer's deduction		(1.6)		(1.2)		(1.5)
All other - net		(0.4)		0.4		(0.1)
	Effective worldwide tax rate	28.1	%	29.0	%	27.8	%

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

Federal, State and Foreign Tax
(Millions)	2013		2012		2011
Gross UTB Balance at January 1	$	528	$	594	$	622
Additions based on tax positions related to the current year		97		80		92
Additions for tax positions of prior years		158		114		69
Reductions for tax positions of prior years		(29)		(120)		(123)
Settlements		(17)		(50)		9
Reductions due to lapse of applicable statute of limitations		(78)		(90)		(75)
Gross UTB Balance at December 31	$	659	$	528	$	594
Net UTB impacting the effective tax rate at December 31	$	262	$	185	$	295