XML 84 R31.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2012
INCOE TAXES | 22. INCOME TAXES I ncome T ax Provision The following table summarizes the expense for income taxes on continuing operations, for the years ended December 31, 2012, 2011 and 2010:
|  |  | December 31,
|  |  | 2012 |  | 2011 |  | 2010
|  |  | (in millions)
| Federal: |  |  |  |  |  |  |  |  |
| Current |  | $ | - |  | $ | - |  | $ | (8)
| Deferred |  |  | 24 |  |  | (150) |  |  | (125)
| State: |  |  |  |  |  |  |  |  |
| Current |  |  | (2) |  |  | 1 |  |  | 1
| Deferred |  |  | (11) |  |  | 1 |  |  | (19)
| Foreign: |  |  |  |  |  |  |  |  |
| Current |  |  | 562 |  |  | 852 |  |  | 678
| Deferred |  |  | 135 |  |  | (70) |  |  | 66
| Total |  | $ | 708 |  | $ | 634 |  | $ | 593
E ffective and S tatutory R ate R econciliation The following table summarizes a reconciliation of the U.S. statutory federal income tax rate to the Company's effective tax rate, as a percentage of income from continuing operations before taxes for the years ended December 31, 2012, 2011 and 2010:
|  |  | December 31,
|  |  | 2012 |  | 2011 |  | 2010
| Statutory Federal tax rate |  | 35% |  | 35% |  | 35%
| State taxes, net of Federal tax benefit |  | -15% |  | 0% |  | -3%
| Taxes on foreign earnings |  | -21% |  | -3% |  | -2%
| Valuation allowance |  | 13% |  | -3% |  | 0%
| Gain (loss) on sale of businesses |  | 0% |  | 0% |  | 4%
| Chilean withholding tax reversals |  | 0% |  | 0% |  | -3%
| Change in tax law |  | 13% |  | 0% |  | 0%
| DPL goodwill impairment |  | 203% |  | 0% |  | 0%
| Other - net |  | -3% |  | 0% |  | 0%
| Effective tax rate |  | 225% |  | 29% |  | 31%
The current income taxes receivable and payable are included in Other Current Assets and Accrued and Other Liabilities, respectively, on the accompanying Consolidated Balance Sheets. The noncurrent income taxes receivable and payable are included in Other Noncurrent A ssets and Other Noncurrent Liabilities, respectively, on the accompanying Consolidated Balance Sheets. The following table summarizes the income taxes receivable and payable as of December 31, 2012 and 2011:
|  |  | December 31,
|  |  | 2012 |  | 2011
|  |  | (in millions)
| Income taxes receivable - current |  | $ | 296 |  | $ | 563
| Income taxes receivable - noncurrent |  |  | 15 |  |  | 21
| Total income taxes receivable |  | $ | 311 |  | $ | 584
| Income taxes payable - current |  | $ | 405 |  | $ | 759
| Income taxes payable - noncurrent |  |  | 2 |  |  | 3
| Total income taxes payable |  | $ | 407 |  | $ | 762
D eferred I ncome T axes—Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amoun ts used for income tax purposes and (b) operating los s and tax credit carry forwards. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered. As of December 31, 2012, the Company had f ederal net operating loss carry forwards for tax purposes of approximately $2.2 billion expiring in years 202 3 to 20 32. Approximately $76 million of the net operating loss carry forward related to stock option deductions will be recognized in additional paid-in capital when realized. The Company also had federal ge neral business tax credit carry forwards of approximately $18 million expiring primarily from 202 0 to 203 2, and federal alternative minimum tax credits of approximately $5 million that carry forward without expiration. The Company had state net operating loss carryforwards as of December 31, 2012 of approximately $5.8 billion expiring in years 201 6 to 2032. As of December 31, 2012, the Company had f oreign net operating loss carry forwards of approximately $3.3 billion that expire at various times beginning in 201 3 and some of which carry forward without expiration, and tax credits available in foreign jurisdictions of approximately $23 million, $1 million of which expire in 2013 to 201 5, $3 million of which expire in 2016 to 202 3 and $19 million of which carry forward without expiration. Valuation allowances increase d $5 million during 2012 to $0.9 billion at December 31, 2012. This net increase was primarily the result of valuation allowance activity at certain U.S. state jurisdictions. Valuation allowances decrease d $376 million during 2011 to $0.9 billion at December 31, 2011. This net decrease was primarily the result of the release of a valuation allowance against certain foreign operating loss carryforwards which were written off in 2011 and a release of a valuation allowance at one of our Brazilian subsidiaries. The Company believes that it is more li kely than not that the net deferred tax assets as shown below will be realized when future taxable income is generated through the reversal of existing taxable temporary differences and income that is expected to be generated by businesses that have long-term contracts or a history of generating taxable income. The Company continues to monitor the utilization of its deferred tax asset for its U.S. consolidated net operating loss carryforward. Although management believes it is more likely than not that this deferred tax asset will be realized through generation of sufficient taxable income prior to expiration of the loss carryforwards, such realization is not assured. The following table summarizes the deferred tax assets and liabilities, as of December 31, 2012 and 2011:
|  |  | December 31,
|  |  | 2012 |  | 2011
|  |  | (in millions)
| Differences between book and tax basis of property |  | $ | (2,067) |  | $ | (1,909)
| Cumulative translation adjustment |  |  | (43) |  |  | (39)
| Other taxable temporary differences |  |  | (419) |  |  | (321)
| Total deferred tax liability |  |  | (2,529) |  |  | (2,269)
| Operating loss carryforwards |  |  | 1,604 |  |  | 1,481
| Capital loss carryforwards |  |  | 108 |  |  | 112
| Bad debt and other book provisions |  |  | 358 |  |  | 463
| Retirement costs |  |  | 619 |  |  | 360
| Tax credit carryforwards |  |  | 46 |  |  | 46
| Other deductible temporary differences |  |  | 555 |  |  | 516
| Total gross deferred tax asset |  |  | 3,290 |  |  | 2,978
| Less: valuation allowance |  |  | (906) |  |  | (901)
| Total net deferred tax asset |  |  | 2,384 |  |  | 2,077
| Net deferred tax asset/(liability) |  | $ | (145) |  | $ | (192)
The Company considers undistributed earnings of certain foreign subsidiaries to be indefinitely reinvested outside of the United States and, accordingly, no U.S. deferred taxes have been recorded with respect to such earnings in accordance with the relevant accounting guidance for income taxes. Should the earnings be remitted as dividends, the Company may be subject to additional U.S. taxes, net of allowable foreign tax credits. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings. Income from operations in certain countries is subject to reduced tax rates as a result of satisfying specific commitments regarding employment and capital investment. The Company's income tax benefits related to the tax status of these operations are estimated to be $81 million, $60 million and $60 million for the years ended December 31, 2012, 2011 and 2010, respectively. The per share effect of these benefits after noncontrolling interests was $0.10, $0.07 and $0.07 for the year ended December 31, 2012, 2011 and 2010, respectively. The following table summarizes the income (loss) from continuing operations, before income taxes, net equity in earnings of affiliates and noncontrolling interests, for the years ended December 31, 2012, 2011 and 2010:
|  |  | December 31,
|  |  | 2012 |  | 2011 |  | 2010
|  |  | (in millions)
| U.S. |  | $ | (1,915) |  | $ | (526) |  | $ | (539)
| Non-U.S. |  |  | 2,229 |  |  | 2,737 |  |  | 2,429
| Total |  | $ | 314 |  | $ | 2,211 |  | $ | 1,890
U ncertain T ax P osition s Uncertain tax positions have been classified as noncurrent income tax liabilities unless expected to be paid in one year. The Company's policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the provision for income taxes in the Consolidated Statements of Operations. As of December 31, 2012 and 2011, the total amount of gross accrued income tax related interest included in the Consolidated Balance Sheets was $18 million and $15 million, respectively. The total amount of gross accrued income tax related penalties included in the Consolidated Balance Sheets as of December 31, 2012 and 2011 was $4 million and $4 million, respectively. The total expense (benefit) for interest related to unrecognized tax benefits for the years ended December 31, 2012, 2011 and 2010 amounted to $3 million, $3 million and $(10) million, respectively. For the years ended December 31, 2012, 2011 and 2010, the total expense (benefit) for penalties related to unrecognized tax benefits amounted to $1 million, $0 million and $(1) million, respectively. We are potentially subject to income tax audits in numerous jurisdictions in the U.S. and internationally until the applicable statute of limitation s expires. Tax audits by their nature are often complex and can require several years to complete. The following is a summary of tax years potentially subject to examination in the significant tax and business jurisdictions in which we operate:
| Jurisdiction |  | Tax Years Subject to Examination
| Argentina |  | 2006-2012
| Brazil |  | 2007-2012
| Cameroon |  | 2008-2012
| Chile |  | 2009-2012
| Colombia |  | 2010-2012
| El Salvador |  | 2009-2012
| United Kingdom |  | 2009-2012
| United States (Federal) |  | 1994-2012
As of December 31, 2012, 2011 and 2010, the total amount of unrecognized tax be nefits was $481 million, $471 million and $437 million, respectively. The total amount of unrecognized tax benefits that would benefit the effective tax rate as of December 31, 2012, 2011 and 2010 is $450 million, $424 million and $412 million, respectively, of which $45 million, $47 million and $51 million, respectively, would be in the form of tax attributes that would warrant a full valuation allowance. The total amount of unrecognized tax benefits anticipated to result in a net decrease to unrecognized tax benefits within 12 months of December 31, 2012 is estimated to be between $90 million and $110 million. The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended December 31, 2012, 2011 and 2010:
|  |  | 2012 |  | 2011 |  | 2010
|  |  | (in millions)
| Balance at January 1 |  | $ | 471 |  | $ | 437 |  | $ | 510
| Additions for current year tax positions |  |  | 12 |  |  | 7 |  |  | 14
| Additions for tax positions of prior years |  |  | 34 |  |  | 49 |  |  | 51
| Reductions for tax positions of prior years |  |  | (29) |  |  | (18) |  |  | (46)
| Effects of foreign currency translation |  |  | - |  |  | (1) |  |  | (2)
| Settlements |  |  | (6) |  |  | - |  |  | (67)
| Lapse of statute of limitations |  |  | (1) |  |  | (3) |  |  | (23)
| Balance at December 31 |  | $ | 481 |  | $ | 471 |  | $ | 437
The Company and certain of its subsidiaries are currently under examination by the relevant taxing authorities for various tax years. The Company regularly assesses the potential outcome of these examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe we have appropriately accrued for our uncertain tax benefits. However, audit outcomes and the timing of audit settlements and future events that would impact our previously recorded unrecognized tax benefits and the range of anticipated increases or decreases in unrecognized tax benefits are subject to significant uncertainty. It is possible that the ultimate outcome of current or future examinations may exceed our provision for current unrecognized tax benefits in amounts that could be material, but cannot be estimated as of December 31, 2012. Our effective tax rate and net income in any given future period could therefore be materially impacted.

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration