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Income Tax (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income (Loss) before Income Tax

Income (loss) before income tax is comprised of the following:

		Year ended December 31, 2014				Year ended December 31, 2013				Year ended December 31, 2012
Income (loss) recorded in The Netherlands			(9	)			(30	)			(33	)
Income (loss) from foreign operations			115				(562	)			(2,104	)
Income (loss) before income tax benefit (expense)			106				(592	)			(2,137	)

Income Tax Benefit (Expense)

Income tax benefit (expense) is comprised of the following:

		Year ended December 31, 2014				Year ended December 31, 2013				Year ended December 31, 2012
The Netherlands Taxes – current			—				5				(1	)
Foreign taxes – current			(120	)			(90	)			(130	)
Total current taxes			(120	)			(85	)			(131	)
The Netherlands Taxes – deferred			—				—				—
Foreign taxes – deferred			143				48				80
Total deferred taxes			143				48				80
Income tax benefit (expense)			23				(37	)			(51	)
Effective tax rate			-21	%			-6	%			-2	%

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 2014, 2013 and 2012, and the effective income tax rate are the following:

		Year ended December 31, 2014				Year ended December 31, 2013				Year ended December 31, 2012
Income tax benefit (expense) computed at statutory rate			(26	)			148				534
Non-deductible and non-taxable permanent differences, net			8				(2	)			(81	)
Income (loss) on equity-method investments			(11	)			(31	)			(6	)
Valuation allowance adjustments			26				(83	)			(197	)
Current year credits			53				60				77
Other tax and credits			8				(42	)			(17	)
Benefits from tax holidays			65				18				38
Net impact of changes to uncertain tax positions			(92	)			(33	)			(83	)
Earnings of subsidiaries taxed at different rates			(8	)			(72	)			(316	)
Income tax benefit (expense)			23				(37	)			(51	)

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities consisted of the following:

		December 31, 2014				December 31, 2013
Tax loss carryforwards and investment credits			908				658
Less unrecognized tax benefit			(238	)			(229	)
Tax loss carryforward net of unrecognized tax benefit			670				429
Inventory valuation			15				14
Impairment and restructuring charges			16				63
Fixed asset depreciation in arrears			39				58
Capitalized development costs			63				45
Receivables for government funding			13				22
Tax credits granted on past capital investments			1,147				1,131
Pension service costs			82				66
Stock awards			5				2
Commercial accruals			15				10
Other temporary differences			78				70
Total deferred tax assets			2,143				1,910
Valuation allowances			(1,607	)			(1,454	)
Deferred tax assets, net			536				456
Accelerated fixed asset depreciation			(26	)			(58	)
Acquired intangible assets			(11	)			(11	)
Advances of government funding			(23	)			(35	)
Other temporary differences			(3	)			(13	)
Deferred tax liabilities			(63	)			(117	)
Net deferred income tax asset			473				339

Gross Deferred Tax Assets on Tax Loss Carryforwards and Investment Credits Expiration

As of December 31, 2014, the Company and its subsidiaries have gross deferred tax assets on tax loss carryforwards and investment credits that expire starting 2015, as follows:

Year
2015			1
2016			46
2017			12
2018			89
2019			77
Thereafter			683
Total			908

Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits

A reconciliation of 2014, 2013 and 2012 beginning and ending amounts of unrecognized tax benefits is as follows:

		December 31, 2014				December 31, 2013				December 31, 2012
Balance at beginning of year			255				227				148
Additions based on tax positions related to the current year			51				52				44
Additions for tax positions of prior years			43				27				39
Reduction for tax positions of prior years			(2	)			(48	)			—
Reduction due to ST-Ericsson deconsolidation							(8	)			—
Settlements							—				(1	)
Prepayment			(5	)			(1	)			(6	)
Foreign currency translation			(29	)			6				3
Balance at end of year			313				255				227

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Gross deferred tax assets on tax loss carryforwards and investment credits expiration.

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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.

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-Publisher FASB

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-Topic 740

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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.

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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.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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-Name Accounting Standards Codification

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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.

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