Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

Note 5 — Income Taxes

Income taxes during interim periods are based on the estimated annual effective income tax rate plus any significant, unusual or infrequently occurring items that are recorded in the period the specific item occurs. We compute income taxes using an asset and liability approach, which results in the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the financial basis and the tax basis of those assets and liabilities. As of September 30, 2011 and December 31, 2010, for U.S. and Netherlands tax provision purposes, we have provided valuation allowances for the entirety of our net deferred tax assets based on our cumulative net losses coupled with the uncertainties surrounding our future earnings forecasts. We recognized deferred tax assets only to the extent we expect to be able to offset deferred tax liabilities. The U.K. supplementary charge of corporation tax was increased from 20% to 32%, effective March 24, 2011, and Royal Assent was received on July 19, 2011. The U.K. rate increase has been reflected in the income tax provision for the nine months ended September 30, 2011, and all U.K. deferred tax assets and liabilities subject to the supplementary charge of corporation tax have been updated to reflect the 32% rate as of September 30, 2011. We recognized income tax expense of $44.1 million and benefit of $19.9 million, respectively, for the three months ended September 30, 2011 and 2010. We recognized income tax expense of $38.8 million and benefit of $76.3 million, respectively, for the nine months ended September 30, 2011 and 2010. The worldwide effective income tax rates for the three months ended September 30, 2011 and 2010 were 80% and 28%, respectively. The worldwide effective income tax rates for the nine months ended September 30, 2011 and 2010 were (34)% and 39%, respectively.