Income Taxes



	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
			As Adjusted (Note 1)				As Adjusted (Note 1)
Effective income tax rate	25	%	31	%	32	%	7	%

During the three months ended March 31, 2012, the Company amended certain prior year income tax returns to recognize the benefit of available foreign tax credit carryforwards. As a result, the Company recognized a tax benefit of $142 million. The available foreign tax credits are subject to a ten year carryforward period and begin to expire in 2014. The Company expects to fully utilize the credits within the prescribed carryforward period.

On February 15, 2012, the Company amended its existing joint venture and other related agreements with its venture partner in Polyplastics Co., Ltd. ("Polyplastics"). The amended agreements ("Agreements"), among other items, modified certain dividend rights, resulting in a cash dividend payment to the Company of $72 million during the three months ended March 31, 2012. In addition, as a result of the Agreements, Polyplastics is required to pay certain annual dividends to the venture partners. Consequently, Polyplastics' undistributed earnings will no longer be invested indefinitely. Accordingly, the Company recognized a deferred tax liability of $38 million that was recorded to Income tax provision (benefit) in the unaudited interim consolidated statement of operations during the three months ended March 31, 2012, related to the taxable outside basis difference of its investment in Polyplastics.

The effective income tax rate for the nine months ended September 30, 2012 would have been 25% excluding the recognition of the above items. As compared to the nine months ended September 30, 2012, absent the effect of these events, the increase in the effective income tax rate for the nine months ended September 30, 2013 was primarily due to increased earnings in high income tax jurisdictions, losses in jurisdictions without income tax benefit and reassessment of the recoverability of deferred tax assets in certain jurisdictions. The rate for three months ended September 30, 2013 was favorably impacted by Mexico income tax refunds.

Liabilities for uncertain tax positions and related interest and penalties are recorded in Uncertain tax positions and current Other liabilities in the unaudited consolidated balance sheets. For the nine months ended September 30, 2013, the Company's uncertain tax positions increased $15 million due to interest and changes in uncertain tax positions in certain jurisdictions, and increased $6 million due to exchange rate changes.

The Company's US tax returns for the years 2009 through 2011 are currently under audit by the US Internal Revenue Service and certain of the Company's subsidiaries are under audit in jurisdictions outside of the US. In addition, certain statutes of limitations are scheduled to expire in the near future. It is reasonably possible that a further change in the unrecognized tax benefits may occur within the next twelve months related to the settlement of one or more of these audits or the lapse of applicable statutes of limitations. Such amounts have been reflected in the current portion of uncertain tax positions (Note 7).