Honeywell 2005 Annual Report Download - page 101

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
Although we do not currently possess sufficient information to reasonably estimate the amounts of liabilities to be recorded upon
future completion of studies, litigation or settlements, and neither the timing nor the amount of the ultimate costs associated with
environmental matters can be determined, they could be material to our consolidated results of operations or operating cash flows in
the periods recognized or paid. However, considering our past experience and existing reserves, we do not expect that these
environmental matters will have a material adverse effect on our consolidated financial position.
Jersey City, NJ—In February 2005, the Third Circuit Court of Appeals upheld the decision of the United States District Court for
the District of New Jersey (the “District Court”) in the matter entitled Interfaith Community Organization (ICO), et al. v. Honeywell
International Inc., et al., that a predecessor Honeywell site located in Jersey City, New Jersey constituted an imminent and substantial
endangerment and ordered Honeywell to conduct the excavation and transport for offsite disposal of approximately one million tons of
chromium residue present at the site, as well as the remediation of site-impacted ground water and river sediments. The District Court
has dismissed without prejudice Honeywell's motion for relief in this matter seeking approval of an alternative remedy in which
Honeywell would excavate approximately half of the chromium residue present at the site and encase the remaining material with a
multi-media containment system. Provisions have been made in our financial statements for the estimated cost of implementation of
the excavation and offsite removal remedy, which is expected to be incurred evenly over a five-year period starting in April 2006. We
do not expect implementation of this remedy to have a material adverse effect on our future consolidated results of operations,
operating cash flows or financial position. We are developing a proposed plan for remediation of ground water and river sediments for
submission later this year and cannot reasonably estimate the costs of that remediation, both because the remediation planned has not
been finalized and because numerous third parties could be responsible for an as yet undetermined portion of the ultimate costs of
remediating the river sediment.
The site at issue in the ICO matter is one of twenty-one sites located in Jersey City, New Jersey which are the subject of an
Administrative Consent Order (ACO) entered into with the New Jersey Department of Environmental Protection (NJDEP) in 1993.
Remedial investigations and activities consistent with the ACO are underway at the other sites (the “Honeywell ACO Sites”).
On May 3, 2005, NJDEP filed a lawsuit in New Jersey Superior Court against Honeywell and two other companies seeking
declaratory and injunctive relief, unspecified damages, and the reimbursement of unspecified total costs relating to sites in New Jersey
allegedly contaminated with chrome ore processing residue. The claims against Honeywell relate to the activities of a predecessor
company which ceased its New Jersey manufacturing operations in the mid-1950s. While the complaint is not entirely clear, it appears
that approximately 100 sites are at issue, including 17 of the Honeywell ACO Sites, approximately 32 sites at which the other two
companies have agreed to remediate under separate administrative consent orders, as well as approximately 53 other sites (identified
in the complaint as the “Publicly Funded Sites”) for which none of the three companies have signed an administrative consent order.
In addition to claims specific to each company, NJDEP claims that all three companies should be collectively liable for all the chrome
sites based on a “market share” theory. In addition, NJDEP is seeking treble damages for all costs it has incurred or will incur at the
Publicly Funded Sites. Honeywell has previously denied responsibility for the Publicly Funded Sites. Honeywell believes that it has
no connection with either the sites covered by the other companies' administrative consent orders or the Publicly Funded Sites and,
therefore, we have no responsibility for those sites. At the Honeywell ACO Sites, we are conducting remedial investigations and
activities consistent with the ACO; thus, we do not believe the lawsuit will significantly change our obligations with respect to the
Honeywell ACO Sites. Lawsuits have also been filed against Honeywell in the District Court under the Resource Conservation and
Recovery Act (RCRA) by two New Jersey municipal utilities seeking the
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