Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Schedule of Earnings (Loss) from Continuing Operations Before Tax by Jurisdiction

Earnings (loss) from continuing operations before tax by jurisdiction are as follows:



	Year Ended December 31,
	2011	2010	2009
	(In $ millions)
US	310	214	294
International	445	324	(43	)
Total	755	538	251

Schedule of Income Tax Provision (Benefit)

The income tax provision (benefit) consists of the following:



	Year Ended December 31,
	2011	2010		2009
	(In $ millions)
Current
US	24	62		11
International	32	35		148
Total	56	97		159
Deferred
US	89	16		(404	)
International	4	(1	)	2
Total	93	15		(402	)
Total	149	112		(243	)

Schedule of Effective Tax Rate Reconciliation

A reconciliation of the significant differences between the US federal statutory tax rate of 35% and the effective income tax rate on income from continuing operations is as follows:



	Year Ended December 31,
	2011		2010		2009
	(In $ millions, except percentages)
Income tax provision computed at US federal statutory tax rate	264		188		88
Change in valuation allowance	7		39		(314	)
Equity income and dividends	(25	)	(41	)	(20	)
(Income) expense not resulting in tax impact	(16	)	8		4
US tax effect of foreign earnings and dividends	48		28		10
Foreign tax credits	(66	)	(33	)	—
Other foreign tax rate differentials	(61	)	(11	)	(2	)
Legislative changes	—		(71	)	71
Tax-deductible interest on foreign equity investments and other related items	(3	)	(3	)	(76	)
State income taxes, net of federal benefit	10		5		6
Other, net	(9	)	3		(10	)
Income tax provision (benefit)	149		112		(243	)

Effective income tax rate	20	%	21	%	(97	)%

Schedule of Consolidated Deferred Tax Assets and Liabilities

Significant components of the consolidated deferred tax assets and liabilities are as follows:



	As of December 31,
	2011		2010
	(In $ millions)
Deferred tax assets
Pension and postretirement obligations	529		356
Accrued expenses	57		233
Inventory	1		10
Net operating loss	359		341
Tax credit carryforwards	94		81
Other	159		193
Subtotal	1,199		1,214
Valuation allowance ⁽¹⁾	(363	)	(385	)
Total	836		829
Deferred tax liabilities
Depreciation and amortization	319		323
Investments in affiliates	50		47
Other	51		68
Total	420		438
Net deferred tax assets (liabilities)	416		391

_____________________

⁽¹⁾Includes deferred tax asset valuation allowances primarily for the Company's deferred tax assets in the US, Luxembourg, France, Spain, China, the United Kingdom and Germany, as well as other foreign jurisdictions. These valuation allowances relate primarily to net operating loss carryforward benefits and other net deferred tax assets, all of which may not be realizable

Schedule of Reconciliation of Unrecognized Tax Benefits Included in Uncertain Tax Positions

A reconciliation of the amount of uncertain tax positions is as follows:



	Year Ended December 31,
	2011		2010		2009
	(In $ millions)
As of the beginning of the year	244		208		195
Increases in tax positions for the current year	—		—		19
Increases in tax positions for prior years	37		85		39
Decreases in tax positions for prior years	(54	)	(48	)	(38	)
Decreases due to settlements	(16	)	(1	)	(7	)
As of the end of the year	211		244		208

Total uncertain tax positions that, if recognized, would impact the effective tax rate	230		264		208
Total amount of interest and penalties recognized in the consolidated statements of operations	(1	)	12		7
Total amount of interest and penalties recognized in the consolidated balance sheets	55		56		45

- 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.

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