Honeywell 2003 Annual Report Download - page 384

Tax credits ........................................ (1.0) (1.5) (7.7)
Equity income ...................................... (.8) (1.7) (3.6)
Redesignation of Friction Materials business
from held for sale to held and used ............. (6.6) -- --
All other items--net ............................... 1.1 (4.8) (1.5)
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18.0% (76.7)% (76.6)%
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(1) Net of changes in valuation allowance.
Deferred tax assets (liabilities)
December 31,
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(Dollars in Millions) 2003 2002
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Deferred income taxes represent the future tax effects of
transactions which are reported in different periods for
tax and financial reporting purposes. The tax effects of
temporary differences and tax carryforwards which give
rise to future income tax benefits and payables are as
follows:
Property, plant and equipment basis differences .......... $ (570) $ (572)
Postretirement benefits other than pensions and
postemployment benefits ................................ 707 781
Investment and other asset basis differences ............. (215) (69)
Other accrued items ...................................... 535 796
Net operating losses ..................................... 967 863
U.S. net capital loss .................................... -- 196
Tax credits .............................................. 373 253
Undistributed earnings of subsidiaries ................... (33) (33)
All other items--net ..................................... 52 59
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1,816 2,274
Valuation allowance ...................................... (299) (191)
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$1,517 $2,083
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The amount of federal tax net operating losses available for carryback or
carryforward at December 31, 2003 was $1.2 billion, including $311 million
generated in 2003. Also, included are $82 million of loss carryforwards that
were generated by certain subsidiaries prior to their acquisition and have
expiration dates through 2019. The use of pre-acquisition operating losses is
subject to limitations imposed by the Internal Revenue Code. We do not
anticipate that these limitations will
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