Income Tax (Tables)

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure Table

Income before taxes which was subject to US and non-US income taxes was as follows:

	(Stated in millions)
	Third Quarter					Nine Months
	2013		2012			2013			2012
United States	$	494	$	455	$		1,425	$		1,578
Outside United States		1,737		1,343			5,096			3,626
	$	2,231	$	1,798	$		6,521	$		5,204

Components of Net Deferred Tax Assets

The components of net deferred tax assets (liabilities) were as follows:

	(Stated in millions)
	Sept. 30, 2013			Dec. 31, 2012
Postretirement benefits, net	$	486		$	543
Intangible assets		(1,464	)		(1,490	)
Investments in non-US subsidiaries		(317	)		(317	)
Other, net		94			114
	$	(1,201	)	$	(1,150	)

Components of Consolidated Income Taxes

The components of consolidated Taxes on income were as follows:

	(Stated in millions)
	Third Quarter							Nine Months
	2013			2012				2013				2012
Current:
United States — Federal	$	116		$	195		$		435		$		556
United States — State		16			16				51				51
Outside United States		313			283				859				749
	$	445		$	494		$		1,345		$		1,356
Deferred:
United States — Federal	$	36		$	(66	)	$		12		$		(91	)
United States — State		2			(2	)			(1	)			(4	)
Outside United States		26			10				28				3
Valuation allowance		(3	)		—				(23	)			4
	$	61		$	(58	)	$		16		$		(88	)
	$	506		$	436		$		1,361		$		1,268

Reconciliation of US Statutory Federal Tax Rate

A reconciliation of the US statutory federal tax rate of 35% to the consolidated effective income tax rate follows:

	ThirdQuarter								Nine Months
	2013				2012				2013				2012
US federal statutory rate		35		%		35		%		35		%		35		%
US state income taxes		—				—				—				1
Non-US income taxed at different rates		(12	)			(10	)			(12	)			(11	)
Charges and credits (See Note 2)		—				—				(2	)			—
Other		—				(1	)			—				(1	)
Effective income tax rate		23		%		24		%		21		%		24		%