INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2011

INCOME TAXES [Abstract]

Components of Earnings (Losses) from Continuing Operations and Tax Provisions (Benefit)

The components of earnings (loss) from continuing operations before income taxes and the related provision (benefit) for U.S. and other income taxes were as follows:

	For the Year Ended December 31,
(in millions)	2010			2009			2008
(Loss) earnings from continuing  operations before income taxes:
U.S.	$	(487	)	$	(410	)	$	(382	)
Outside the U.S.		(74	)		293			(492	)
Total	$	(561	)	$	(117	)	$	(874	)
U.S. income taxes:
Current (benefit) provision	$	(2	)	$	8		$	(278	)
Deferred provision (benefit)		2			(7	)		15
Income taxes outside the U.S.:
Current provision		192			113			72
Deferred (benefit) provision		(76	)		-			38
State and other income taxes:
Current (benefit) provision		(2	)		(1	)		7
Deferred provision (benefit)		-			2			(1	)
Total provision (benefit)	$	114		$	115		$	(147	)

Income Tax Provision (Benefit) Reconciliation

The differences between income taxes computed using the U.S. federal income tax rate and the provision (benefit) for income taxes for continuing operations were as follows:

	For the Year Ended December 31,
(in millions)	2010			2009			2008
Amount computed using the statutory rate	$	(196	)	$	(41	)	$	(306	)
Increase (reduction) in taxes resulting from:
State and other income taxes, net of federal		1			1			4
Impact of goodwill impairment		217			-			229
Operations outside the U.S.		140			45			31
Valuation allowance		(46	)		117			146
Tax settlements and adjustments, including interest		3			(4	)		(248	)
Other, net		(5	)		(3	)		(3	)
Provision (benefit) for income taxes	$	114		$	115		$	(147	)

Deferred Tax Assets and Liabilities Significant Components

The significant components of deferred tax assets and liabilities were as follows:

	As of December 31,
(in millions)	2010		2009
Deferred tax assets
Pension and postretirement obligations	$	809	$	803
Restructuring programs		7		16
Foreign tax credit		477		350
Inventories		23		15
Investment tax credit		160		159
Employee deferred compensation		80		91
Depreciation		28		-
Research and development costs		184		146
Tax loss carryforwards		1,181		931
Other deferred revenue		-		32
Other		423		486
Total deferred tax assets	$	3,372	$	3,029
Deferred tax liabilities
Depreciation		-		26
Leasing		47		51
Other deferred debt		15		-
Other		175		143
Total deferred tax liabilities		237		220
Net deferred tax assets before valuation allowance		3,135		2,809
Valuation allowance		2,335		2,092
Net deferred tax assets	$	800	$	717

Components of Deferred Tax Assets Reporting

Deferred tax assets (liabilities) are reported in the following components within the Consolidated Statement of Financial Position:

	As of December 31,
(in millions)	2010			2009
Deferred income taxes (current)	$	120		$	121
Other long-term assets		695			607
Accrued income taxes		(7	)		-
Other long-term liabilities		(8	)		(11	)
Net deferred tax assets	$	800		$	717

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of the Company's liability for income taxes associated with unrecognized tax benefits is as follows:

(in millions)

	2010			2009			2008
Balance as of January 1	$	256		$	296		$	303
Tax positions related to the current year:
Additions		1			10			54
Tax positions related to prior years:
Additions		-			8			16
Reductions		(11	)		(58	)		(74	)
Settlements with taxing authorities		-			-			(3	)
Lapses in statutes of limitations		(1	)		-			-
Balance as of December 31	$	245		$	256		$	296