Honeywell 2012 Annual Report Download - page 87

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statute of limitations and settlements with tax authorities, partially offset by adjustments related to our
ongoing assessment of the likelihood and amount of potential outcomes of current and future
examinations. For the year ended December 31, 2011, the Company increased its unrecognized tax
benefits by $58 million due to additional reserves for various international and U.S. tax audit matters,
partially offset by adjustments related to our ongoing assessment of the likelihood and amount of
potential outcomes of current and future examinations, the expiration of various statute of limitations,
and settlements with tax authorities. The following table summarizes the activity related to our
unrecognized tax benefits:
2012 2011 2010
Change in unrecognized tax benefits:
Balance at beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $815 $ 757 $720
Gross increases related to current period tax positions . . . . . . . . . . 25 46 37
Gross increases related to prior periods tax positions . . . . . . . . . . . 44 327 84
Gross decreases related to prior periods tax positions. . . . . . . . . . . (62) (56) (41)
Decrease related to settlements with tax authorities . . . . . . . . . . . . . (40) (237) (23)
Expiration of the statute of limitations for the assessment of
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (64) (12) (8)
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 (10) (12)
Balance at end of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $722 $ 815 $757
Generally, 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, 2012:
Jurisdiction
Examination in
progress
Examination not yet
initiated
Open Tax Year
United States(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2001 – 2011 2005 – 2012
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A 2011 – 2012
Canada(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006 – 2010 2011 – 2012
Germany(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2004 – 2009 2010 – 2012
France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 – 2011 2000 – 2008, 2012
Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 2010 – 2012
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A 2009 – 2012
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 – 2010 2006 – 2008, 2011 – 2012
India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2000—2010 2011 – 2012
Italy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2005 – 2011 2012
(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 certain unrecognized tax benefits for
tax positions taken on 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 such changes, if any, to previously recorded uncertain tax positions.
78
HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)