Honeywell 2009 Annual Report Download - page 95

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HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
2009 2008 2007
Change in unrecognized tax benefits:
Balance at beginning of year $
671 $
666 $ 744
Gross increases related to current period tax positions 86 81 68
Gross increases related to prior periods tax positions 86 106 100
Gross decreases related to prior periods tax positions (77) (54) (167)
Decrease related to settlements with tax authorities (44) (42) (101)
Expiration of the statute of limitations for the assessment of taxes (8) (64) —
Foreign currency translation 6 (22) 22
Balance at end of year $ 720 $ 671 $ 666
In many cases our uncertain tax positions are related to tax years that remain subject to examination by the
relevant tax authorities. The following table summarizes these open tax years by major jurisdiction as of
December 31, 2009:
Jurisdiction
Open Tax Year
Examination in
progress Examination not yet
initiated
United States(1) 1998 – 2007 2005 – 2008
United Kingdom 2002 – 2007 2008 – 2009
Canada(1) 2004 – 2008 2009
Germany(1) 2004 – 2008 2009
France N/A 2000 – 2009
Netherlands N/A 2007 – 2009
Australia 2005 – 2007 2008 – 2009
China 2007–2008 2009
India 1999 – 2007 2008 – 2009
(1) includes federal as well as state, provincial or similar local jurisdictions, as applicable
Based on the outcome of these examinations, or as a result of the expiration of statute of limitations for
specific jurisdictions, it is reasonably possible that the related unrecognized tax benefits for tax positions taken
regarding previously filed tax returns will materially change from those recorded as liabilities for uncertain tax
positions in our financial statements. In addition, the outcome of these examinations may impact the valuation of
certain deferred tax assets (such as net operating losses) in future periods. Based on the number of tax years
currently under audit by the relevant U.S federal, state and foreign tax authorities, the Company anticipates that
several of these audits may be finalized in the foreseeable future. However, based on the status of these
examinations, the protocol of finalizing audits by the relevant taxing authorities, and the possibility that the
Company might challenge certain audit findings (which could include formal legal proceedings) at this time it is
not possible to estimate the impact of any amount of such changes, if any, to previously recorded uncertain tax
positions.
Unrecognized tax benefits for the above listed examinations in progress were $261 million, $249 million and
$199 million, as of December 31, 2009, 2008, and 2007, respectively. These increases are primarily due to an
increase in tax examinations and fewer settlements during the year. Estimated interest and penalties related to
the underpayment of income taxes are classified as a component of Tax Expense in the Consolidated Statement
of Operations and totaled $13 million, $19 million and $20 million for the years ended December 31, 2009, 2008,