Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes

Schedule of earnings before income taxes

years ended December 31 (in millions)	2012		2011		2010
Domestic	$	625	$	626	$	(191	)
Foreign		5,100		3,042		5,027
Total earnings before income taxes	$	5,725	$	3,668	$	4,836

Schedule of components of income taxes

years ended December 31 (in millions)	2012		2011			2010
Current
Domestic	$	94	$	177		$	987
Foreign		252		390			408
Total current taxes	$	346	$	567		$	1,395
Deferred
Domestic	$	89	$	(198	)	$	(624	)
Foreign		15		(134	)		(113	)
Total deferred taxes		104		(332	)		(737	)
Total income taxes	$	450	$	235		$	658

Schedule of effective tax rate reconciliation

years ended December 31 (in millions)	2012			2011			2010
Statutory tax rate		35.0	%		35.0	%		35.0	%
Benefit of lower tax rates and tax exemptions, primarily in Puerto Rico		(23.5	)		(25.4	)		(22.5	)
Resolution of certain tax positions pertaining to prior years		(3.4	)		(11.2	)		—
Effect of non-deductible litigation loss accrual		0.6			12.9			—
Puerto Rico excise tax credit		(1.2	)		(3.2	)		—
State taxes, net of federal benefit		0.1			0.3			0.2
All other, net		0.3			(2.0	)		0.9
Effective tax rate		7.9	%		6.4	%		13.6	%

Schedule of deferred tax assets and liabilities

as of December 31 (in millions)	2012			2011
Deferred tax assets
Compensation and employee benefits	$	295		$	290
Trade receivable reserves		412			371
Inventory reserves		42			49
Deferred intercompany profit		777			592
State income taxes		106			125
Other		1,039			1,196
Total deferred tax assets	$	2,671		$	2,623
Deferred tax liabilities
Depreciation		—			(20	)
Other, primarily the excess of book basis over tax basis of intangible assets		(857	)		(983	)
Total deferred tax liabilities		(857	)		(1,003	)
Net deferred tax asset	$	1,814		$	1,620

Schedule of unrecognized tax benefits

years ended December 31 (in millions)	2012			2011			2010
January 1	$	1,039		$	1,645		$	1,319
Increase due to current year tax positions		370			294			346
Increase due to prior year tax positions		1			149			110
Decrease due to current year tax positions		—			(15	)		—
Decrease due to prior year tax positions		(220	)		(604	)		(48	)
Settlements		(50	)		(430	)		(82	)
December 31	$	1,140		$	1,039		$	1,645