Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements [Abstract]

Components of income before income taxes

The components of income before income taxes are as follows for the three years ended December 31:

	2012		2011		2010
United States	$	1,155	$	1,098	$	1,252
International	2,719		2,691		2,178
Total Income before income taxes	$	3,874	$	3,789	$	3,430

Provision for Income Taxes

The provision for income taxes consists of the following for the three years ended December 31:

	2012		2011		2010
United States	$	395	$	360	$	427
International	848		875		690
Total Provision for income taxes	$	1,243	$	1,235	$	1,117

Schedule of Components of Income Tax Expense (Benefit)

Temporary differences between accounting for financial statement purposes and accounting for tax purposes result in the current provision for taxes being higher (lower) than the total provision for income taxes as follows:

	2012			2011			2010
Goodwill and intangible assets	$	(7	)	$	(1	)	$	(11	)
Property, plant and equipment	(13		)	(19		)	(29		)
Pension and other retiree benefits	(14		)	(47		)	4
Stock-based compensation	5			11			12
Tax loss and tax credit carryforwards	(39		)	(14		)	(28		)
Other, net	32			32			123
Total deferred tax provision	$	(36	)	$	(38	)	$	71

Effective tax rate reconciliation

The difference between the statutory U.S. federal income tax rate and the Company’s global effective tax rate as reflected in the Consolidated Statements of Income is as follows:

Percentage of Income before income taxes	2012		2011		2010
Tax at United States statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	0.7		0.4		1.1
Earnings taxed at other than United States statutory rate	(2.6	)	(1.7	)	(4.6	)
Venezuela hyperinflationary transition charge	—		—		2.8
Other, net	(1.0	)	(1.1	)	(1.7	)
Effective tax rate	32.1	%	32.6	%	32.6	%

Components of deferred tax assets (liabilities)

The components of deferred tax assets (liabilities) are as follows at December 31:

	2012			2011
Deferred tax liabilities:
Goodwill and intangible assets	$	(476	)	$	(471	)
Property, plant and equipment	(365		)	(345		)
Other	(162		)	(104		)
	(1,003		)	(920		)
Deferred tax assets:
Pension and other retiree benefits	544			480
Tax loss and tax credit carryforwards	61			105
Accrued liabilities	208			176
Stock-based compensation	113			115
Other	151			111
	1,077			987
Net deferred income taxes	$	74		$	67

	2012			2011
Deferred taxes included within:
Assets:
Other current assets	$	275		$	204
Deferred income taxes	92			115
Liabilities:
Deferred income taxes	(293		)	(252		)
Net deferred income taxes	$	74		$	67

Unrecognized tax benefits activity

Unrecognized tax benefits activity for the years ended December 31, 2012, 2011 and 2010 is summarized below:

	2012			2011			2010
Unrecognized tax benefits:
Balance, January 1	$	176		$	171		$	187
Increases as a result of tax positions taken during the current year	34			76			38
Decreases of tax positions taken during prior years	(6		)	(46		)	(63		)
Increases of tax positions taken during prior years	10			10			16
Decreases as a result of settlements with taxing authorities and the expiration of statutes of limitations	(3		)	(30		)	(3		)
Effect of foreign currency rate movements	1			(5		)	(4		)
Balance, December 31	$	212		$	176		$	171