Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The income tax provision relating to continuing operations consists of the following: 

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
(millions)
Current	$	53		$	37		$	161		$	138
Deferred	63			74			169			174
Total Income Tax Provision	$	116		$	111		$	330		$	312
Effective Tax Rate	37.2		%	40.4		%	29.6		%	31.2		%

Our effective tax rate (ETR) for the first nine months of 2013 decreased as compared with the first nine months of 2012. Concurrent with the filing of our 2012 fiscal year tax return during the third quarter of 2013, we released $25 million of valuation allowance with respect to the utilization of foreign tax credits. The decrease in ETR resulting from the valuation allowance release was partially offset by an increase in ETR resulting from an increase in the Israeli corporate income tax rate, from 25.0% to 26.5%, enacted in July 2013.

During 2012, we established a valuation allowance of $32 million with respect to foreign tax credits available, resulting in a corresponding increase in income tax expense during that year. Additionally, during the third quarter of 2012, we increased our reserve for uncertain tax positions related to prior years by $10 million.

In our major tax jurisdictions, the earliest years remaining open to examination are as follows: US – 2010, Equatorial Guinea – 2008, Israel – 2008 and China –2010.

See Note 3. Divestitures for income taxes associated with discontinued operations.