Honeywell 2005 Annual Report Download - page 83

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
Years Ended December 31,
2005 2004 2003
Tax expense consist of:
Current:
United States $395 $ 26 $(251)
State 19 16 (1)
Foreign 276 134 204
690 176 (48)
Deferred:
United States 27 109 347
State (4) 19 3
Foreign 29 95 (6)
52 223 344
$742 $399 $ 296
Years Ended December 31,
2005 2004 2003
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) (1.4) (7.1) (5.0)
Asset basis differences (3.5) (.6) (2.2)
Nondeductible amortization .6 1.1 1.9
State income taxes (1) .7 1.4 .4
Tax benefits on export sales (3.3) (4.5) (3.6)
ESOP dividend tax benefit (.9) (1.2) (1.2)
Tax credits (.5) (.6) (1.0)
Equity income (.5) (.5) (.8)
Repatriation expense related to American Jobs Creation Act of 2004 6.7 — —
Redesignation of Friction Materials business from held for sale to held and used — — (6.6)
All other items—net (1.0) .8 1.1
31.9% 23.8% 18.0%
(1) Net of changes in valuation allowance. 61