Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income before Provision for Income Taxes, Classified by Source of Income

Income before provision for income taxes, classified by source of income, was as follows:


In millions	*2011*		2010		2009
U.S.	$	3,202.8	$	2,763.0	$	2,700.4
Outside the U.S.		4,809.4		4,237.3		3,786.6
Income before provision for income taxes	$	8,012.2	$	7,000.3	$	6,487.0

Provision for Income Taxes, Classified by Timing and Location of Payment

The provision for income taxes, classified by the timing and location of payment, was as follows:


In millions	*2011*			2010			2009
U.S. federal	$	1,173.4		$	1,127.1		$	792.0
U.S. state		165.2			161.1			152.1
Outside the U.S.		982.1			841.5			788.9
Current tax provision		2,320.7			2,129.7			1,733.0
U.S. federal		189.0			(66.8	)		186.9
U.S. state		8.6			13.8			8.6
Outside the U.S.		(9.2	)		(22.7	)		7.5
Deferred tax provision (benefit)		188.4			(75.7	)		203.0
Provision for income taxes	$	2,509.1		$	2,054.0		$	1,936.0

Net Deferred Tax Liabilities

Net deferred tax liabilities consisted of:


In millions	December 31, *2011*			2010
Property and equipment		$ 1,651.3		$	1,655.2
Other		541.7			489.8
Total deferred tax liabilities		2,193.0			2,145.0
Property and equipment		(355.4	)		(352.4	)
Employee benefit plans		(406.3	)		(356.4	)
Intangible assets		(256.2	)		(268.6	)
Deferred foreign tax credits		(173.9	)		(310.7	)
Capital loss carryforwards		(26.0	)		(37.5	)
Operating loss carryforwards		(71.1	)		(56.8	)
Indemnification liabilities		(33.4	)		(36.5	)
Other		(312.6	)		(284.0	)
Total deferred tax assets before valuation allowance		(1,634.9	)		(1,702.9	)
Valuation Allowance		102.0			104.7
Net deferred tax liabilities		660.1			546.8
Balance sheet presentation:
Deferred income taxes		1,344.1			1,332.4
Other assets-miscellaneous		(606.3	)		(590.4	)
Current assets-prepaid expenses and other current assets		(77.7	)		(195.2	)
Net deferred tax liabilities		$ 660.1		$	546.8

Statutory U.S. Federal Income Tax Rate Reconcilation to Effective Income Tax Rates

The statutory U.S. federal income tax rate reconciles to the effective income tax rates as follows:


	*2011*			2010			2009
Statutory U.S. federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of related federal income tax benefit		1.4			1.6			1.6
Benefits and taxes related to foreign operations		(4.7	)		(6.9	)		(6.3	)
Other, net		(0.4	)		(0.4	)		(0.5	)
Effective income tax rates		31.3	%		29.3	%		29.8	%

Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits

The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:


In millions	*2011*			2010
Balance at January 1	$	572.6		$	492.0
Decreases for positions taken in prior years		(50.6	)		(27.1	)
Increases for positions taken in prior years		24.3			53.3
Increases for positions related to the current year		54.8			102.0
Settlements with taxing authorities		(14.4	)		(17.4	)
Lapsing of statutes of limitations		(21.7	)		(30.2	)
Balance at December 31⁽¹⁾	$	565.0		$	572.6

(1)

Of this amount, $564.3 and $535.9 are included in long-term liabilities on the Consolidated balance sheet for 2011 and 2010, respectively. The remainder is included in deferred income taxes and income taxes payable on the Consolidated balance sheet.