Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income Taxes

Note 12 – Income taxes:

	Six months ended June 30,
	2011			2012
	(In millions)
Expected tax expense, at U.S. federal statutory income tax rate of 35%	$	69.5		$	96.3
Incremental tax on earnings of non- U.S. companies		7.4			6.5
Non-U.S. tax rates		(8.3	)		(12.1	)
U.S. state income taxes and other, net		3.7			3.5
Income tax expense	$	72.3		$	94.2

Tax authorities are examining certain of our non-U.S. tax returns and have or may propose tax deficiencies, including penalties and interest. Because of the inherent uncertainties involved in settlement initiatives and court and tax proceedings, we cannot guarantee that these tax matters will be resolved in our favor, and therefore our potential exposure, if any, is also uncertain.

In 2011 and 2012, our Chemicals Segment received notices of re-assessment from the Canadian federal and provincial tax authorities related to the years 2002 through 2004. We object to the re-assessments and believe the position is without merit. Accordingly, we are appealing the re-assessments and in connection with such appeal we were required to post letters of credit aggregating Cdn. $7.3 million (see Note 9). If the full amount of the proposed adjustment were ultimately to be assessed against us, the cash tax liability would be approximately $15.2 million.

We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations. We believe the ultimate disposition of tax examinations should not have a material adverse effect on our consolidated financial position, results of operations or liquidity. We currently estimate we will reverse $1.6 million of unrecognized tax benefits during the next twelve months.

In the first quarter of 2011, our Component Products Segment recognized a $2.1 million provision for deferred income taxes related to the undistributed earnings of its Canadian subsidiary attributable to the 2011 $7.5 million patent litigation settlement gain.