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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2011

Income from continuing operations by region

Income from continuing operations before taxes

			Years Ended December 31,
			2011		2010		2009
	United States	$	318	$	1,157	$	1,068
	Foreign		1,964		1,565		896
		$	2,282	$	2,722	$	1,964

Tax Expense Continuing Operations Current and Deferred

Tax expense (benefit)
			Years Ended December 31,
			2011		2010		2009

	United States	$	3	$	358	$	272
	Foreign		414		407		164
		$	417	$	765	$	436

			Years Ended December 31,
			2011		2010		2009
	Tax Expense consists of
	Current:
	United States	$	171	$	(501)	$	(47)
	State		13		3		19
	Foreign		564		385		417
		$	748	$	(113)	$	389

	Deferred:
	United States	$	(185)	$	784	$	283
	State		4		72		17
	Foreign		(150)		22		(253)
			(331)		878		47
		$	417	$	765	$	436

Effective income tax rate reconciliation


	Years Ended December 31,
	2011		2010		2009
The U.S. statutory federal income tax rate is reconciled to our effective income tax rate as follows:
Statutory U.S. federal income tax rate	35.0	%	35.0	%	35.0	%
Taxes on foreign earnings below U.S. tax rate⁽¹⁾	(10.4)		(7.3)		(8.3)
State income taxes⁽¹⁾	0.7		1.5		1.5
Manufacturing incentives	(1.7)		-		(1.6)
ESOP dividend tax benefit	(1.1)		(0.8)		(1.1)
Tax credits	(2.3)		(1.2)		(1.9)
Audit settlements	(2.0)		0.1		(0.7)
All other items—net	0.1		0.8		(0.7)
	18.3	%	28.1	%	22.2	%

(1) Net of changes in valuation allowance and tax reserves

Deferred Tax Assets, Liabilities

	December 31,
	2011		2010
Property, plant and equipment basis differences……………………………..	$	(1,097)	$	(1,107)
Postretirement benefits other than pensions and post employment benefits		571		674
Investment and other asset basis differences…………………………………		(970)		(993)
Other accrued items………………………………………………………………		2,852		2,348
Net operating and capital losses………………………………………………..		810		873
Tax credits…………………………………………………………………………		379		249
Undistributed earnings of subsidiaries………………………………………….		(57)		(40)
All other items—net……………………………………………………………….		(67)		15
		2,421		2,019
Valuation allowance………………………………………………………………		(591)		(636)
	$	1,830	$	1,383

Change in unrecognized tax benefits

	2011		2010		2009
Change in unrecognized tax benefits:
Balance at beginning of year	$	757	$	720	$	671
Gross increases related to current period tax positions		46		37		86
Gross increases related to prior periods tax positions		327		84		86
Gross decreases related to prior periods tax positions		(56)		(41)		(77)
Decrease related to settlements with tax authorities		(237)		(23)		(44)
Expiration of the statute of limitations for the assessment of
taxes		(12)		(8)		(8)
Foreign currency translation		(10)		(12)		6
Balance at end of year	$	815	$	757	$	720

Summary of Income Tax Examinations

	Open Tax Year
Jurisdiction	Examination in	Examination not yet
Jurisdiction	progress	initiated
United States ⁽¹⁾	2001–2009	2005–2011
United Kingdom	N/A	2010-2011
Canada⁽¹⁾	2006-2010	2011
Germany⁽¹⁾	2004-2009	2010-2011
France	2009-2010	2000–2008, 2011
Netherlands	2007-2009	2010-2011
Australia	N/A	2009-2011
China	2009-2010	2006-2008, 2011
India	2000–2009	2010-2011

(1) includes federal as well as state, provincial or similar local jurisdictions, as applicable.

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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- Definition

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

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