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Income Taxes
 3 Months Ended
Mar. 31, 2012
Income Taxes [Abstract]  
INCOME TAXES NOTE 5 INCOME TAXES

NOTE 5

INCOME TAXES

For the quarter ended March 31, 2012, the Company recognized income tax expense of $25 representing an effective tax rate of 71.4% as compared to an income tax benefit of $13, an effective tax rate of 37.1%, for the three months ended March 31, 2011. The higher tax rate recorded in 2012 was mainly due to the recognition of a valuation allowance against U.S. deferred tax assets and the inability of the Company to record tax benefits on losses in certain foreign tax jurisdictions.

We recorded a valuation allowance related to current U.S. deferred tax assets in the first quarter of 2012 primarily because of a determination that current year temporary differences expected to reverse in future years will not be recognized as the Company will be unable to carry-back such amounts to prior years.

In the fourth quarter of 2011, the Company determined that a portion of its undistributed foreign earnings were no longer considered indefinitely reinvested. Accordingly, the Company recorded a tax liability for these undistributed foreign earnings. Such undistributed earnings have not been remitted to the U.S., and the timing of such remittance, if any, remains under evaluation.

Pursuant to the Tax Matters Agreement, certain income tax refunds are shared with Exelis and Xylem. At March 31, 2012, $85 of our $128 income tax receivable relates to contributions made by Exelis subsequent to the Distribution Date to ITT’s former U.S. Salaried Retirement Plan which transferred to Exelis at the Distribution Date. Receivables associated with the U.S. Salaried Retirement Plan that are payable to Exelis have been presented within accounts payable.