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Income Taxes
 6 Months Ended
Jun. 30, 2011
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract]  
Income Taxes
(9)INCOME TAXES
The effective income tax rate for the three and six months ended June 30, 2011 was a benefit of 56% and 107%, respectively, compared to a benefit of 4% and 3% for the three and six months ended June 30, 2010, respectively. The increase in tax benefit from 2010 is primarily due to lower pre-tax earnings partially due to the tax deductible Brazilian collection dispute. The following table summarizes the difference between income tax expense at the United States statutory rate of 35% and the income tax benefit at effective worldwide tax rates for the respective periods:
 
 
Three months ended June 30,
 
Six months ended June 30,
Millions of dollars
 
2011
 
2010
 
2011
 
2010
Earnings (loss) before income taxes and other items
 
$
(370
)
 
 
 
$
207


 
 
 
$
(215
)
 
 
 
$
378


 
 
Income tax computed at United States statutory tax rate
 
$
(130
)
 
(35
)%
 
$
72


 
35
 %
 
$
(75
)
 
(35
)%
 
$
132


 
35
 %
U.S. government tax incentive - Energy Tax Credits
 
(79
)
 
(21
)%
 
(87
)
 
(42
)%
 
(133
)
 
(62
)%
 
(116
)
 
(31
)%
Foreign government tax incentive - BEFIEX
 
(28
)
 
(7
)%
 
(19
)
 
(9
)%
 
(39
)
 
(18
)%
 
(30
)
 
(8
)%
Other
 
31


 
7
 %
 
26


 
12
 %
 
17


 
8
 %
 
3


 
1
 %
Income tax computed at effective worldwide tax rates
 
$
(206
)
 
(56
)%
 
$
(8
)
 
(4
)%
 
$
(230
)
 
(107
)%
 
$
(11
)
 
(3
)%


Over the next twelve months it is reasonably possible that we will settle unrecognized tax benefits totaling approximately $36 million associated with certain tax examinations and other events.
At the end of each interim period, we make our best estimate of the effective tax rate expected to be applicable for the full fiscal year and the impact of discrete items, if any, and adjust the quarterly rate as necessary.