Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income tax Expense (Benefit) Attributable to Operations

Income tax expense (benefit) attributable to operations —

	2011			2010			2009
Current
U.S. federal and state	$	2		$	(16	)	$	(15	)
Non-U.S		106			57			8
Total current		108			41			(7	)
Deferred
U.S. federal and state		2			(5	)		1
Non-U.S		(25	)		(5	)		(21	)
Total deferred		(23	)		(10	)		(20	)
Total expense (benefit)	$	85		$	31		$	(27	)

Income (Loss) Before Income Taxes

Income (loss) before income taxes —

	2011		2010			2009
U.S. operations	$	22	$	(90	)	$	(322	)
Non-U.S. operations		274		125			(132	)
Income (loss) before income taxes	$	296	$	35		$	(454	)

Effective Tax Rate Reconciliation

Effective tax rate reconciliation —

	2011			2010			2009
U.S. federal income tax rate		35	%		35	%		(35	)%
Adjustments resulting from:
State and local income taxes, net of
federal benefit					(12	)
Non-U.S. income		(2	)		(11	)		(2	)
Non-U.S. tax incentives		(4	)		(29	)		-
Non-U.S. withholding taxes on undistributed
earnings of non-U.S. operations		4			16			(4	)
Settlement and return adjustments		(5	)		(12	)		(2	)
Impact of divestitures					9
Miscellaneous items		2			13			1
Valuation allowance adjustments		(1	)		80			36
Effective income tax rate for operations		29	%		89	%		(6	)%

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities — Temporary differences and carryforwards give rise to deferred tax assets and liabilities.

	2011			2010
Net operating loss carryforwards	$	885		$	845
Postretirement benefits, including pension		217			207
Research and development costs		112			96
Expense accruals		100			206
Foreign tax credits recoverable		86			107
Other tax credits recoverable		47			41
Capital loss carryforwards		30			31
Inventory reserves		18			8
Postemployment and other benefits		8			15
Other		23			10
Total		1,526			1,566
Valuation allowance		(1,334	)		(1,345	)
Deferred tax assets		192			221
Unremitted earnings		(117	)		(106	)
Goodwill and other intangibles		(99	)		(123	)
Depreciation		(20	)		(63	)
Other		(19	)		(13	)
Deferred tax liabilities		(255	)		(305	)
Net deferred tax liabilities	$	(63	)	$	(84	)

Various Deferred Tax Asset Components and Related Allowances

Carryforwards — Our deferred tax assets include benefits expected from the utilization of net operating losses (NOLs), capital loss and credit carryforwards in the future. The following table identifies the net operating loss deferred tax asset components and the related allowances that existed at December 31, 2011. Due to time limitations on the ability to realize the benefit of the carryforwards, additional portions of these deferred tax assets may become unrealizable in the future.

	Deferred							Earliest
	Tax		Valuation			Carryforward		Year of
	Asset		Allowance			Period		Expiration
Net operating losses
U.S. federal	$	638	$	(638	)		20		2023
U.S. state		134		(134	)		Various		2012
Brazil		34		(19	)		Unlimited
France		16					Unlimited
Australia		34		(34	)		Unlimited
Venezuela		7		(6	)		Various		2012
U.K.		12		(12	)		Unlimited
Argentina		7		(7	)		5		2012
Mexico		2		(2	)		10		2017
South Africa		1					15		2024
Total	$	885	$	(852	)

Reconciliation of Gross Unrecognized Tax Benefits

Reconciliation of gross unrecognized tax benefits —

	2011			2010			2009
Balance at January 1	$	53		$	41		$	44
Decrease related to expiration of statute of limitations		(13	)		(8	)		(3	)
Increase (decrease) related to prior years tax positions		13			15			(7	)
Increases related to current year tax positions		6			5			7
Decreases related to settlements		(13	)		-			-
Balance at December 31	$	46		$	53		$	41