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INCOME TAX (Tables) | 12 Months Ended
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Dec. 31, 2012
Income (Loss) before Income Tax | Income (loss) before income tax is comprised of the following:
|  | Year ended December 31, 2012 |  |  | Year ended December 31, 2011 |  |  | Year ended December 31, 2010 |
Income (loss) recorded in The Netherlands |  |  | (33 | ) |  |  | 54 |  |  |  | 264 |
Income (loss) from foreign operations |  |  | (2,104 | ) |  |  | 282 |  |  |  | 427 |
Income (loss) before income tax benefit (expense) |  |  | (2,137 | ) |  |  | 336 |  |  |  | 691 |
Income Tax Benefit (Expense) | Income tax benefit (expense) is comprised of the following:
|  | Year ended December 31, 2012 |  |  | Year ended December 31, 2011 |  |  | Year ended December 31, 2010 |
The Netherlands taxes – current |  |  | (1 | ) |  |  | (11 | ) |  |  | (3 | )
Foreign taxes – current |  |  | (130 | ) |  |  | (104 | ) |  |  | (53 | )
Current taxes |  |  | (131 | ) |  |  | (115 | ) |  |  | (56 | )
The Netherlands taxes – deferred |  |  | — |  |  |  | (2 | ) |  |  | (4 | )
Foreign taxes – deferred |  |  | 80 |  |  |  | (64 | ) |  |  | (89 | )
Income tax benefit (expense) |  |  | (51 | ) |  |  | (181 | ) |  |  | (149 | )
Differences in Income Taxes Computed at Netherlands Statutory Rate and Effective Income Tax Rate | The principal items comprising the differences in income taxes computed at the Netherlands statutory rate of 25.0% in 2012 and 2011, and 25.5% in 2010, and the effective income tax rate are the following:
|  | Year ended December 31, 2012 |  |  | Year ended December 31, 2011 |  |  | Year ended December 31, 2010 |
Income tax benefit (expense) computed at statutory rate |  |  | 534 |  |  |  | (84 | ) |  |  | (176 | )
Non-deductible, non-taxable and other permanent differences, net |  |  | (110 | ) |  |  | (38 | ) |  |  | (50 | )
Income (loss) on equity-method investments |  |  | (6 | ) |  |  | (7 | ) |  |  | 62 |
Valuation allowance adjustments |  |  | (197 | ) |  |  | (130 | ) |  |  | (54 | )
Impact of prior year adjustments |  |  | 10 |  |  |  | — |  |  |  | (29 | )
Effects on deferred taxes of changes in enacted tax rates |  |  | — |  |  |  | 1 |  |  |  | 3 |
Current year credits |  |  | 77 |  |  |  | 94 |  |  |  | 76 |
Other tax and credits |  |  | 2 |  |  |  | 3 |  |  |  | (12 | )
Benefits from tax holidays |  |  | 38 |  |  |  | 113 |  |  |  | 77 |
Impact of uncertain tax positions |  |  | (83 | ) |  |  | (2 | ) |  |  | 32 |
Earnings of subsidiaries taxed at different rates |  |  | (316 | ) |  |  | (131 | ) |  |  | (78 | )
Income tax benefit (expense) |  |  | (51 | ) |  |  | (181 | ) |  |  | (149 | )
Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consisted of the following:
|  | December 31, 2012 |  |  | December 31, 2011 |
Tax loss carryforwards and investment credits |  |  | 820 |  |  |  | 643 |
Inventory valuation |  |  | 24 |  |  |  | 23 |
Impairment and restructuring charges |  |  | 61 |  |  |  | 56 |
Fixed asset depreciation in arrears |  |  | 75 |  |  |  | 56 |
Receivables for government funding |  |  | 15 |  |  |  | 13 |
Tax credits granted on past capital investments |  |  | 1,114 |  |  |  | 1,111 |
Pension service costs |  |  | 97 |  |  |  | 71 |
Stock awards |  |  | — |  |  |  | 7 |
Commercial accruals |  |  | 10 |  |  |  | 13 |
Other temporary differences |  |  | 98 |  |  |  | 131 |
Total deferred tax assets |  |  | 2,314 |  |  |  | 2,124 |
Valuation allowances |  |  | (1,634 | ) |  |  | (1,514 | )
Deferred tax assets, net |  |  | 680 |  |  |  | 610 |
Accelerated fixed asset depreciation |  |  | (64 | ) |  |  | (69 | )
Acquired intangible assets |  |  | (30 | ) |  |  | (49 | )
Advances of government funding |  |  | (26 | ) |  |  | (16 | )
Other temporary differences |  |  | (34 | ) |  |  | (38 | )
Deferred tax liabilities |  |  | (154 | ) |  |  | (172 | )
Net deferred income tax asset |  |  | 526 |  |  |  | 438 |
Gross Deferred Tax Assets on Tax Loss Carryforwards and Investment Credits Expiration | As of December 31, 2012, the Company and its subsidiaries have gross deferred tax assets on tax loss carryforwards and investment credits that expire starting 2013, as follows:
Year |  |  |
2013 |  |  | 7 |
2014 |  |  | 7 |
2015 |  |  | 14 |
2016 |  |  | 35 |
2017 |  |  | 13 |
Thereafter |  |  | 744 |
Total |  |  | 820 |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the 2012 beginning and ending amounts of unrecognized tax benefits is as follows:
Balance at December 31, 2011 |  |  | 148 |
Additions based on tax positions related to the current year |  |  | 44 |
Additions for tax positions of prior years |  |  | 39 |
Settlements |  |  | (1 | )
Prepayment |  |  | (6 | )
Foreign currency translation |  |  | 3 |
Balance at December 31, 2012 |  |  | 227 |
The reconciliation of unrecognized tax benefits in 2011 was as follows:
Balance at December 31, 2010 |  | $ | 149 |
Additions based on tax positions related to the current year |  |  | 36 |
Additions for tax positions of prior years |  |  | 19 |
Reductions for tax positions of prior years |  |  | (3 | )
Settlements |  |  | — |
Reductions for lapse of statute of limitations |  |  | (50 | )
Foreign currency translation |  |  | (3 | )
Balance at December 31, 2011 |  |  | 148 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: 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 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: 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 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + References Reference 1: 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 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 48 -Paragraph 21 -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. + Details
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