Income Taxes

6 Months Ended

Jun. 30, 2012

Disclosure Text Block [Abstract]

Income Taxes

11.  Income Taxes

The following is a summary of income tax expense (benefit) and effective tax rates.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
millions except percentages	2012			2011			2012			2011
Income tax expense (benefit)	$	164		$	440		$	516		$	706
Effective tax rate		174	%		44	%		20	%		47	%

The increase from the 35% U.S. federal statutory rate for thethree months ended June 30, 2012, was primarily attributable to the foreign tax rate differential and valuation allowances, recurring accrual of the Algerian exceptional profits tax, and U.S. tax impact from losses and restructuring of foreign operations. The decrease from the 35% U.S. federal statutory rate for the six months ended June 30, 2012, was primarily attributable to the resolution of the Algeria exceptional profits tax dispute. This amount was partially offset by the foreign tax rate differential and valuation allowances, recurringaccrual of the Algerian exceptional profits tax, andU.S. tax impact from losses and restructuring of foreign operations.

The increase from the 35% U.S. federal statutory rate for thethree and six months ended June 30, 2011, was primarily attributable to the recurring accrual of the Algerian exceptional profits tax, foreign tax rate differential and valuation allowances, U.S. tax on foreign income inclusions and distributions, state income taxes, and items resulting from business acquisitions. These items were partially offset by the U.S. income tax benefits associated with foreign losses and restructuring of foreign operations.