Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income Taxes

(13) Income Taxes

Effective Income Tax Rate and Income Tax Provision

Our loss before income taxes for the three months ended June 30, 2012 was increased by an income tax provision of $7 million. Our loss before income taxes for the six months ended June 30, 2012 was reduced by an income tax benefit of $1 million (an effective income tax benefit rate of 6.7%). The tax provision (benefit) for the three and six month periods resulted from restructuring efforts, including both taxes incurred with respect to restructuring and expenses with a zero or low tax benefit. Our tax provision for both the three month and six month periods benefitted from earnings in jurisdictions with low tax rates and losses in jurisdictions, such as the U.S., with high tax rates, as well as favorable settlements of certain tax disputes totaling $5 million in the three months ended June 30, 2012 and $10 million in the six months ended June 30, 2012.

Our annual effective income tax rate was 27.9% for the three months ended June 30, 2011 and 27.8% for the six months ended June 30, 2011. For both the three and six months ended June 30, 2011, our annual effective income tax rate was lower than the statutory U.S. federal income tax rate of 35% primarily due to our lower net effective income tax rate on foreign earnings, our domestic manufacturing deduction and certain U.S. tax credits partially offset by state income taxes and non-deductible acquisition costs related to our acquisition of Diversey incurred during the three months ended June 30, 2011.

Unrecognized Tax Benefits

There have been no material changes to the Company’s unrecognized tax benefits as reported at June 30, 2012, nor have we changed our policy with regard to the reporting of penalties and interest related to unrecognized tax benefits.