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Income Taxes
9 Months Ended
Sep. 30, 2014
Income Taxes [Abstract]  
Income Tax Disclosure [Text Block]
Income Taxes
The effective income tax rate for the quarter and nine months ended September 30, 2014 was 44.4% and 36.6%, respectively. These effective income tax rates reflected an increase in tax reserves for 2003-2008 and the associated interest expense resulting from an unfavorable lower tax court ruling in a foreign tax jurisdiction, as well as the impact of changes in tax reserves and the associated interest expense related to audit progression in other foreign tax jurisdictions. In reconciling the effective income tax rate to the statutory US federal income tax rate for the nine months ended September 30, 2014, the net tax cost associated with these adjustments impacted the effective income tax rate by 4.5%.
As a result of these adjustments, the December 31, 2013 balance of unrecognized tax benefits has increased by $450 million for tax positions taken in prior years. After considering the deferred tax accounting impact, approximately $170 million of this increase would favorably affect the effective tax rate if resolved in the Company’s favor.
It is reasonably possible that the total amount of the unrecognized tax benefits could decrease within the next 12 months by $640 million due to the possible completion of the 2009 and 2010 IRS audit, various foreign and US state tax audits and the expiration of the statute of limitations in multiple tax jurisdictions. Additionally, it is reasonably possible that, as a result of audit progression within the next 12 months, there may be new information that causes the Company to reassess the total amount of unrecognized tax benefits recorded. While the Company cannot estimate the impact that new information may have on our unrecognized tax benefit balance, we believe that the liabilities recorded are appropriate and adequate as determined under Accounting Standards Codification (ASC) 740, "Income Taxes.