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Income Taxes
3 Months Ended
Mar. 31, 2012
Income Taxes [Abstract]  
Income Tax Disclosure [Text Block]
Income Taxes.
For the three months ended March 31, 2012, we recorded an income tax benefit of $30 million on pre-tax income of $71 million compared to an income tax provision of $18 million on pre-tax income of $614 million for the three months ended March 31, 2011. Our effective income tax rate was (42.3)% and 2.9% for the three months ended March 31, 2012 and 2011, respectively.
The difference between the effective tax rate and statutory federal rate of 35% is principally due to changes in valuation allowances and partnership income not subject to taxation, as such taxes are the responsibility of the partners. In February, 2012, WPH merged into a newly formed single member limited liability company owned by American Entertainment Properties Corp, a wholly owned subsidiary of ours. The merger constituted a tax-free reorganization and resulted in the release of approximately $48 million of WPH's valuation allowance.
Federal-Mogul believes that it is reasonably possible that its unrecognized tax benefits, which primarily relate to audit settlements or statue expirations, may decrease by approximately $328 million within the next 12 months due to audit settlements or statute expirations, of which approximately $43 million, if recognized, could impact the effective tax rate.