Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Taxes on income

For financial reporting purposes, income before income taxes includes the following components: 

For the Years Ended December 31,
(In millions of dollars)	2012			2011		2010
Income before income taxes:
U.S.	$	398		$	121	$	(296	)
Other	1,298			1,283		1,065
	$	1,696		$	1,404	$	769
The expense (benefit) for income taxes is comprised of:
Income taxes:
Current–
U.S. Federal	$	42		$	7	$	(90	)
Other national governments	336			289		249
U.S. state and local	24			24		21
	402			320		180
Deferred–
U.S. Federal	(18		)	5		(28		)
Other national governments	89			90		50
U.S. state and local	19			7		2
	90			102		24
Total income taxes	$	492		$	422	$	204

Deferred income tax assets and liabilities

The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows:  

December 31,
(In millions of dollars)	2012		2011
Deferred tax assets:
Accrued expenses not currently deductible	$	589	$	559
Differences related to non-U.S. operations (a)	159		188
Accrued retirement & postretirement benefits—non-U.S. operations	107		164
Accrued retirement benefits U.S.	604		507
Net operating losses (b)	104		129
Income currently recognized for tax	75		62
Foreign tax credit carryforwards	224		169
Other	77		114
	$	1,939	$	1,892

Deferred tax liabilities:
Unrealized investment holding gains	$	2	$	3
Differences related to non-U.S. operations	107		99
Depreciation and amortization	245		233
Other	4		9
	$	358	$	344

(a) Net of valuation allowances of $7 million in 2012 and $3 millionin 2011.

(b) Net of valuation allowances of $65 million in 2012 and $46 million in 2011.

Deferred Income Tax Assets And Liabilities Classification By Balance Sheet

December 31,
(In millions of dollars)	2012			2011
Balance sheet classifications:
Current assets	$	410		$	376
Other assets	$	1,223		$	1,205
Current liabilities	$	(18	)	$	(12	)
Other liabilities	$	(34	)	$	(21	)

U.S. Federal statutory income tax rate

A reconciliation from the U.S. Federal statutory income tax rate to the Company’s effective income tax rate is shown below.

For the Years Ended December 31,	2012		2011		2010
U.S. Federal statutory rate	35.0	%	35.0	%	35.0	%
U.S. state and local income taxes—net of U.S. Federal income tax benefit	1.9		1.6		1.9
Differences related to non-U.S. operations	(6.1	)	(6.5	)	(9.5	)
Other	(1.8	)	—		(0.9	)
Effective tax rate	29.0	%	30.1	%	26.5	%

Unrecognized tax benefits

Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2012, 2011 and 2010:

(In millions of dollars)	2012			2011			2010
Balance at January 1,	$	143		$	199		$	206
Additions, based on tax positions related to current year	26			7			7
Additions for tax positions of prior years	35			39			10
Reductions for tax positions of prior years	(41		)	(91		)	(6		)
Reductions due to reclassification of tax indemnifications on sale of Kroll	—			—			(3		)
Settlements	(6		)	(6		)	(4		)
Lapses in statutes of limitation	(40		)	(5		)	(11		)
Balance at December 31,	$	117		$	143		$	199