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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Income from continuing operations by region

Income from continuing operations before taxes

			Years Ended December 31,
			2013		2012		2011
	United States	$	3,002	$	1,761	$	318
	Foreign		2,410		2,114		1,964
		$	5,412	$	3,875	$	2,282

Tax Expense Continuing Operations Current and Deferred

Tax expense (benefit)
			Years Ended December 31,
			2013		2012		2011

	United States	$	993	$	584	$	3
	Foreign		457		360		414
		$	1,450	$	944	$	417

			Years Ended December 31,
			2013		2012		2011
	Tax expense consists of
	Current:
	United States	$	663	$	470	$	171
	State		97		10		13
	Foreign		428		380		564
		$	1,188	$	860	$	748

	Deferred:
	United States	$	160	$	85	$	(185)
	State		72		19		4
	Foreign		30		(20)		(150)
			262		84		(331)
		$	1,450	$	944	$	417

Effective income tax rate reconciliation


	Years Ended December 31,
	2013		2012		2011
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⁾	(7.2)		(7.1)		(18.9)
State income taxes⁽¹⁾	1.8		0.8		0.4
Manufacturing incentives	(0.9)		(1.7)		(1.8)
ESOP dividend tax benefit	(0.5)		(0.6)		(1.1)
Tax credits	(1.8)		(0.4)		(2.3)
Reserves for tax contingencies	0.6		(0.4)		5.2
All other items—net	(0.2)		(1.2)		1.8
	26.8	%	24.4	%	18.3	%

(1) Net of changes in valuation allowance

Deferred Tax Assets, Liabilities

	December 31,
Deferred tax assets:	2013		2012
Pension	$	32	$	1,362
Postretirement benefits other than pensions		499		657
Asbestos and environmental		437		535
Employee compensation and benefits		382		402
Other accruals and reserves		702		504
Net operating and capital losses		838		820
Tax credit carryforwards		266		333
Gross deferred tax assets		3,156		4,613
Valuation allowance		(614)		(598)
Total deferred tax assets	$	2,542	$	4,015

Deferred tax liabilities:
Property, plant and equipment	$	(654)	$	(668)
Intangibles		(1,126)		(1,106)
Other asset basis differences		(350)		(327)
Other		(22)		(39)
Total deferred tax liabilities		(2,152)		(2,140)
Net deferred taxes	$	390	$	1,875

Change in unrecognized tax benefits

	2013		2012		2011
Change in unrecognized tax benefits:
Balance at beginning of year	$	722	$	815	$	757
Gross increases related to current period tax positions		41		25		46
Gross increases related to prior periods tax positions		118		44		327
Gross decreases related to prior periods tax positions		(21)		(62)		(56)
Decrease related to resolutions of audits with tax authorities		(92)		(40)		(237)
Expiration of the statute of limitations for the assessment of taxes		(30)		(64)		(12)
Foreign currency translation		(9)		4		(10)
Balance at end of year	$	729	$	722	$	815

Summary of Income Tax Examinations

	Open Tax Year
Jurisdiction	Examination in	Examination not yet
Jurisdiction	progress	initiated
United States ⁽¹⁾	2001–2012	2007–2013
United Kingdom	N/A	2011-2013
Canada⁽¹⁾	2007-2012	2013
Germany⁽¹⁾	2004-2011	2010-2013
France	2000-2003, 2008-2013	2004-2007
Netherlands	2009	2010-2013
Australia	N/A	2009-2013
China	2003-2012	2013
India	2000–2011	2012-2013
Italy	2008-2012	2013

(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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