Honeywell 2006 Annual Report Download - page 82

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HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
Tax expense
Years Ended December 31,
2006 2005 2004
United States $412 $427 $148
Foreign 308 305 229
$720 $732 $377
Years Ended December 31,
2006 2005 2004
Tax expense consist of:
Current:
United States $ (39) $395 $ 26
State 26 19 16
Foreign 283 276 134
270 690 176
Deferred:
United States 376 19 90
State 49 (6) 16
Foreign 25 29 95
450 42 201
$720 $732 $377
Years Ended December 31,
2006 2005 2004
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) (4.0) (1.4) (7.4)
Asset basis differences — (3.6) (.6)
Nondeductible amortization — .6 1.1
State income taxes (1) 1.7 .7 1.3
Tax benefits on export sales (1.9) (3.3) (4.6)
ESOP dividend tax benefit (.7) (.9) (1.2)
Tax credits (.7) (.5) (.6)
Equity income — (.5) (.6)
Repatriation expense related to American Jobs Creation Act of 2004 — 6.8 —
Audit Settlements (2.9) (.6) —
All other items—net (.8) (.4) .8
25.7% 31.9% 23.2%
(1) Net of changes in valuation allowance.
60