Honeywell 2005 Annual Report Download - page 236

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.
In February 2005, the Third Circuit Court of Appeals upheld the decision of the United States District Court for the District of New Jersey in the matter
entitled Interfaith Community Organization, 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. Provisions have been made in our financial statements for the cost of implementation of the
excavation and offsite removal remedy, which is expected to take place over a five-year period. The cost of implementation is expected to be incurred evenly
over that period. We do not expect implementation of the remedy to have a material adverse effect on our future consolidated results of operations, operating
cash flows or financial position. The site at issue 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.
Although it is not possible at this time to predict the outcome of this matter, we believe that the allegations are without merit and we intend to
vigorously defend against this lawsuit. We do not expect this matter to have a material adverse effect on our consolidated financial position. While we expect
to prevail, an adverse litigation outcome could have a material adverse impact
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