Honeywell 2003 Annual Report Download - page 341

% change compared with prior year ...................... (3)% (15)% (16)%
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Interest and other financial charges decreased by 3 percent in 2003 compared
with 2002 due mainly to lower average interest rates. Interest and other
financial charges decreased by 15 percent in 2002 compared with 2001 due mainly
to lower average interest rates and lower average debt outstanding.
Tax Expense (Benefit)
(Dollars in Millions) 2003 2002 2001
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Tax expense (benefit) ............................... $ 296 $ (725) $ (323)
Effective tax (benefit) rate ........................ 18.0% (76.7)% (76.6)%
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The effective tax rate (benefit) in 2003, 2002 and 2001 was different than the
statutory rate of 35 percent due in part to tax benefits from export sales,
favorable tax audit settlements and foreign tax planning strategies. The
effective tax rate in 2003 also includes tax benefits expected to be realized as
a result of the redesignation of our Friction Materials business from held for
sale to held and used resulting from the termination of discussions with
Federal-Mogul Corp. The effective (benefit) rate in 2002 included the tax
benefit resulting from a higher deductible tax basis than book basis related to
sales of our
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