v2.4.0.8
Taxes on Income (Tables)
 12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Reconciliation Between Effective Tax Rate and U.S. Statutory Rate
A reconciliation between the effective tax rate and the U.S. statutory rate is as follows:
 
2013
 
2012
 
2011
  
Amount
 
Tax Rate
 
Amount
 
Tax Rate
 
Amount
 
Tax Rate
U.S. statutory rate applied to income before taxes
$
1,941

 
35.0
 %
 
$
3,059

 
35.0
 %
 
$
2,567

 
35.0
 %
Differential arising from:
 
 
 
 
 
 
 
 
 
 
 
Foreign earnings
(1,316
)
 
(23.7
)
 
(1,955
)
 
(22.4
)
 
(2,220
)
 
(30.3
)
Tax settlements
(497
)
 
(9.0
)
 
(113
)
 
(1.3
)
 
(721
)
 
(9.8
)
The American Taxpayer Relief Act of 2012
(269
)
 
(4.8
)
 
—

 
—

 
—

 
—

Unremitted foreign earnings
(81
)
 
(1.5
)
 
(11
)
 
(0.1
)
 
(86
)
 
(1.2
)
Tax rate changes
(10
)
 
(0.2
)
 
57

 
0.6

 
(295
)
 
(4.0
)
Amortization of purchase accounting adjustments
934

 
16.8

 
905

 
10.3

 
875

 
11.9

Restructuring
224

 
4.0

 
62

 
0.7

 
163

 
2.2

U.S. health care reform legislation
65

 
1.2

 
60

 
0.7

 
50

 
0.7

Intangible asset impairment charges
56

 
1.0

 
40

 
0.5

 
(5
)
 
(0.1
)
Vioxx and ENHANCE litigation settlements
—

 
—

 
98

 
1.2

 
—

 
—

Arbitration settlement charge
—

 
—

 
—

 
—

 
177

 
2.4

State taxes
44

 
0.8

 
31

 
0.3

 
72

 
1.0

Other (1)
(63
)
 
(1.1
)
 
207

 
2.4

 
365

 
5.0

 
$
1,028

 
18.5
 %
 
$
2,440

 
27.9
 %
 
$
942

 
12.8
 %
(1) 
Other includes the tax effect of contingency reserves, research credits and miscellaneous items.
Income Before Taxes
Income before taxes consisted of:
Years Ended December 31
2013
 
2012
 
2011
Domestic
$
3,513

 
$
4,500

 
$
2,626

Foreign
2,032

 
4,239

 
4,708

 
$
5,545

 
$
8,739

 
$
7,334
Taxes on Income
Taxes on income consisted of:
Years Ended December 31
2013
 
2012
 
2011
Current provision
 
 
 
 
 
Federal
$
568

 
$
1,346

 
$
859

Foreign
923

 
651

 
1,568

State
(133
)
 
(226
)
 
52

 
1,358

 
1,771

 
2,479

Deferred provision
 
 
 
 
 
Federal
30

 
749

 
(584
)
Foreign
(398
)
 
(323
)
 
(683
)
State
38

 
243

 
(270
)
 
(330
)
 
669

 
(1,537
)
 
$
1,028

 
$
2,440

 
$
942
Deferred Income Taxes
Deferred income taxes at December 31 consisted of:
 
2013
 
2012
  
Assets
 
Liabilities
 
Assets
 
Liabilities
Intangibles
$
—

 
$
3,772

 
$
—

 
$
4,584

Inventory related
49

 
604

 
79

 
488

Accelerated depreciation
125

 
1,215

 
129

 
1,348

Unremitted foreign earnings
—

 
2,361

 
—

 
2,435

Equity investments
—

 
539

 
—

 
451

Pensions and other postretirement benefits
162

 
543

 
1,098

 
109

Compensation related
600

 
—

 
748

 
—

Unrecognized tax benefits
497

 
—

 
706

 
—

Net operating losses and other tax credit carryforwards
225

 
—

 
425

 
—

Other
1,605

 
71

 
1,798

 
91

Subtotal
3,263

 
9,105

 
4,983

 
9,506

Valuation allowance
(205
)
 
 
 
(107
)
 
 
Total deferred taxes
$
3,058

 
$
9,105

 
$
4,876

 
$
9,506

Net deferred income taxes
 
 
$
6,047

 
 
 
$
4,630

Recognized as:
 
 
 
 
 
 
 
Deferred income taxes and other current assets
$
572

 
 
 
$
624

 
 
Other assets
381

 
 
 
527

 
 
Income taxes payable
 
 
$
224

 
 
 
$
41

Deferred income taxes
 
 
6,776

 
 
 
5,740
Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 
2013
 
2012
 
2011
Balance January 1
$
4,425

 
$
4,277

 
$
4,919

Additions related to current year positions
320

 
496

 
695

Additions related to prior year positions
177

 
58

 
145

Reductions for tax positions of prior years (1) 
(747
)
 
(320
)
 
(1,223
)
Settlements
(603
)
 
(67
)
 
(259
)
Lapse of statute of limitations
(69
)
 
(19
)
 
—

Balance December 31
$
3,503

 
$
4,425

 
$
4,277

(1) 
Amounts reflect the settlements with the IRS and CRA as discussed below.