Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

The reconciliation of income taxes at the federal statutory rate to the actual benefit for income taxes is as follows:



	Year Ended December 31,
	2017		2016		2015
U.S. federal statutory income tax rate	35.0	%	35.0	%	(35.0	)%
State income taxes, net of federal benefit	(0.9	)%	(1.7	)%	(4.8	)%
Effect of foreign taxes	(29.2	)%	(99.1	)%	(34.4	)%
Acquisition-related	(2.1	)%	9.4	%	6.0	%
Research credit	(2.5	)%	(15.0	)%	(4.4	)%
Valuation allowance	(4.1	)%	(42.2	)%	2.3	%
Compensation-related	(2.5	)%	6.4	%	1.6	%
Non-deductible expenses	2.7	%	9.3	%	2.4	%
Uncertain domestic tax positions	1.1	%	5.5	%	2.7	%
TCJA net impact	91.4	%	—	%	—	%
Other, net	(0.2	)%	(3.5	)%	0.4	%
	88.8	%	(95.9	)%	(63.2	)%

Summary of Income Tax Contingencies [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	Year Ended December 31,
(in millions)	2017			2016			2015
Beginning Balance	$	1,095		$	1,056		$	1,047
Additions based on positions related to the current year	134			47			32
Additions based on positions related to prior years	16			14			38
Reductions for tax positions of prior years	(3		)	(17		)	(36		)
Settlements with taxing authorities	(2		)	(3		)	(18		)
Statute of limitation expirations	(2		)	(2		)	(7		)
Ending Balance	$	1,238		$	1,095		$	1,056

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

Our income (loss) before income taxes consisted of the following:



	Year Ended December 31,
(in millions)	2017			2016			2015
Domestic	$	(408	)	$	(1,019	)	$	(1,623	)
Foreign	1,341			1,196			973
	$	933		$	177		$	(650	)

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Significant components of our deferred tax assets and liabilities are as follows:



	As of December 31,
(in millions)	2017			2016
Deferred Tax Assets:
Inventory costs and related reserves	$	29		$	37
Tax benefit of net operating loss and credits	478			798
Reserves and accruals	179			228
Restructuring-related charges	12			14
Litigation and product liability reserves	383			752
Investment write-down	32			17
Compensation related	104			142
Federal benefit of uncertain tax positions	163			238
Other	48			42
	1,428			2,268
Less: valuation allowance	(465		)	(446		)
	963			1,822
Deferred Tax Liabilities:
Property, plant and equipment	33			42
Unrealized gains and losses on derivative financial instruments	5			67
Intangible assets	1,028			1,651
	1,066			1,760
Net Deferred Tax Assets / (Liabilities)	(103		)	62
Prepaid on intercompany profit	66			75
Net Deferred Tax Assets / (Liabilities) and Prepaid on Intercompany Profit	$	(37	)	$	137

Our deferred tax assets, deferred tax liabilities and prepaid on intercompany profit, are included in the following locations within our accompanying consolidated balance sheets:



(in millions)	Location in Consolidated Balance Sheets	As of December 31,
Component	Location in Consolidated Balance Sheets	2017			2016
Prepaid on intercompany profit	Prepaid income taxes	$	66		$	75
Non-current deferred tax asset	Other long-term assets	88			80
Deferred Tax Assets and Prepaid on Intercompany Profit		154			155

Non-current deferred tax liability	Deferred income taxes	191			18
Deferred Tax Liabilities		191			18

Net Deferred Tax Assets / (Liabilities) and Prepaid on Intercompany Profit		$	(37	)	$	137

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The related benefit for income taxes consisted of the following:



	Year Ended December 31,
(in millions)	2017			2016			2015
Current
Federal	$	320		$	31		$	59
State	9			6			3
Foreign	255			136			132
	584			173			194

Deferred
Federal	272			(337		)	(545		)
State	1			(14		)	(41		)
Foreign	(28		)	8			(19		)
	244			(343		)	(605		)
	$	828		$	(170	)	$	(411	)