Income Taxes

The following table presents details of the provision for (benefit of) income taxes and our effective tax rates:



	Three Months Ended
	March 31,
	2014			2013
	(In millions, except percentages)
Provision for income taxes	$	3		$	2
Effective tax rates	1.8		%	1.0		%

The differences between our effective tax rates and the 35% federal statutory rate resulted primarily from foreign earnings taxed at substantially lower rates than the federal statutory rate, and domestic tax losses recorded without tax benefits. In determining our annualized effective tax rates, the tax effects of a $48 million gain on sale of assets for the three months ended March 31, 2014, and the impairments of purchased intangible assets of $25 million and $10 million for the three months ended March 31, 2014 and 2013, respectively, were treated as discrete items. As a result, we recorded discrete tax benefits for the impairments of purchased intangible assets of $5 million and $2 million for the three months ended March 31, 2014 and 2013, respectively. We also recorded discrete tax benefits of $4 million and $2 million for the three months ended March 31, 2014 and 2013, respectively, resulting primarily from the expiration of statutes of limitations for the assessment of taxes in various foreign jurisdictions.

As a result of our cumulative tax losses in the U.S. and certain foreign jurisdictions, and the full utilization of our loss carryback opportunities, we have concluded that a full valuation allowance should be recorded in such jurisdictions. In certain other foreign jurisdictions where we do not have cumulative losses, we had net deferred tax liabilities of $18 million and $24 million at March 31, 2014 and December 31, 2013, respectively.

Our income tax returns for the 2007, 2008 and 2009 tax years are currently under examination by the Internal Revenue Service. We do not believe the audit will have a material impact on our financial position, operating results, or cash flows. However, our deferred tax assets could be reduced, with a corresponding reduction in the valuation allowance related to such deferred tax assets.