Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Expense (Benefit) Attributable to Operations

Income tax expense (benefit) attributable to continuing operations —

	2012			2011			2010
Current
U.S. federal and state	$	18		$	2		$	(16	)
Non-U.S.		113			108			58
Total current		131			110			42
Deferred
U.S. federal and state					2			(5	)
Non-U.S.		(80	)		(25	)		(7	)
Total deferred		(80	)		(23	)		(12	)
Total expense	$	51		$	87		$	30

Income (Loss) from Continuing Operations Before Income Taxes

Income (loss) from continuing operations before income taxes —

	2012		2011		2010
U.S. operations	$	77	$	23	$	(71	)
Non-U.S. operations		287		283		126
Income (loss) before income taxes	$	364	$	306	$	55

Effective Tax Rate Reconciliation

Effective tax rate reconciliation —

	2012			2011			2010
U.S. federal income tax rate		35	%		35	%		35	%
Adjustments resulting from:
State and local income taxes, net of federal benefit								(7	)
Non-U.S. income		(4	)		(2	)		(7	)
Non-U.S. tax incentives		(5	)		(4	)		(18	)
Non-U.S. withholding taxes on undistributed earnings of non-U.S. operations		4			4			10
Settlement and return adjustments		2			(5	)		(8	)
Miscellaneous items		(1	)		1			14
Valuation allowance adjustments		(17	)		(1	)		36
Effective income tax rate for operations		14	%		28	%		55	%

Deferred Tax Assets and Liabilities

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

	2012			2011
Net operating loss carryforwards	$	933		$	885
Postretirement benefits, including pensions		189			217
Research and development costs		104			112
Expense accruals		114			100
Foreign tax credits recoverable		31			86
Other tax credits recoverable		52			47
Capital loss carryforwards		66			30
Inventory reserves		17			18
Postemployment and other benefits		5			8
Other		24			23
Total		1,535			1,526
Valuation allowance		(1,184	)		(1,334	)
Deferred tax assets		351			192
Unremitted earnings		(151	)		(117	)
Goodwill and other intangibles		(75	)		(99	)
Depreciation		(25	)		(20	)
Other		(72	)		(19	)
Deferred tax liabilities		(323	)		(255	)
Net deferred tax assets (liabilities)	$	28		$	(63	)

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, 2012. 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	$	677	$	(677	)	20	2023
U.S. state		137		(137	)	Various	2013
Brazil		32		(17	)	Unlimited
France		15				Unlimited
Australia		41		(41	)	Unlimited
Venezuela		1				Various	2013
U.K.		10		(5	)	Unlimited
Argentina		16		(16	)	5	2013
South Africa		4		(4	)	15	2024
Total	$	933	$	(897	)

Reconciliation of Gross Unrecognized Tax Benefits

Reconciliation of gross unrecognized tax benefits —

	2012			2011			2010
Balance at January 1	$	46		$	53		$	41
Decrease related to expiration of statute of limitations		(9	)		(13	)		(8	)
Increase related to prior years tax positions		63			13			15
Increases related to current year tax positions		8			6			5
Decrease related to settlements					(13	)
Balance at December 31	$	108		$	46		$	53