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Income Taxes
3 Months Ended
Mar. 31, 2013
Income Tax Disclosure [Abstract]  
Income Taxes

(13) Income Taxes

Effective Income Tax Rate and Income Tax Provision

Our loss before income taxes from continuing operations for the three months ended March 31, 2013 was more than offset by an income tax benefit of $9 million (an effective income tax benefit rate of 147%), resulting in net earnings of $3 million. Our tax benefit for the three months ended March 31, 2013 benefitted from earnings in jurisdictions with low tax rates and losses in jurisdictions, such as the U.S., with high tax rates, as well as the retroactive reinstatement of certain tax provisions that were recorded as discrete items during the three months ended March 31, 2013. On January 2, 2013, the President signed the American Taxpayer Relief Act of 2012, retroactively reinstating and extending the research and development tax credit and certain foreign tax provisions from January 1, 2012 through December 31, 2013. The favorable factors were partially offset by an increase in certain foreign tax rates, which increased our deferred tax liabilities and, by losses in jurisdictions where we did not have any tax benefit due to the applicable tax rate or valuation allowances.

We also had a loss before income taxes from continuing operations for the three months ended March 31, 2012, when our effective income tax benefit rate was 54%. For the three months ended March 31, 2012, our income tax benefits exceeded the statutory U.S. federal income tax rate of 35% because of losses in jurisdictions, such as the U.S., with high tax rates, while we had earnings in other jurisdictions with low tax rates.

 

Unrecognized Tax Benefits

During the three months ended March 31, 2013, we made payments of approximately $10 million (including $2 million of interest) to a foreign jurisdiction, which reduced our unrecognized tax benefits. We have not changed our policy with regard to the reporting of penalties and interest related to unrecognized tax benefits.