Honeywell 2006 Annual Report Download - page 104

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
New Jersey Chrome Sites—Provisions have been made in our financial statements for the estimated costs of the court-ordered
excavation and transport for offsite disposal of approximately one million tons of chromium residue present at a predecessor
Honeywell site located in Jersey City, New Jersey, which are expected to be incurred evenly over a five-year period that started 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. Provision also has been made in our financial statements for the estimated costs
of implementing groundwater and sediment remedial plans, which have been proposed for the site and are presently under review by
the court in which litigation concerning the site is pending. The ultimate cost of remediating the river sediments may be reduced as
numerous third parties could be responsible for an as yet undetermined portion of these costs.
The above-referenced site is the most significant of the twenty-one sites located in Hudson County, 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 have been conducted and are underway at the other
sites (the “Honeywell ACO Sites”). We have recorded reserves for the Honeywell ACO Sites where appropriate under the accounting
policy described above.
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-1950's. While the complaint is not entirely clear, it
appears that approximately 100 sites are at issue, including 17 of the Honeywell ACO Sites, sites that 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 has 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 believes that it has no connection with the sites covered by the other companies' administrative consent orders and,
therefore, has 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 cleanup of chromium residue at two Honeywell ACO sites and by a
citizens' group against Honeywell and thirteen other defendants with respect to contamination on about a dozen of the Honeywell
ACO Sites. Discovery is underway in these cases. For the reasons stated above, we do not believe these lawsuits 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 the litigation and administrative proceedings discussed above, we
believe that the allegations are without merit and we intend to vigorously defend against these lawsuits. We do not expect these
matters 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 on our consolidated results of operations and operating cash flows in the periods
recognized or paid.
Onondaga Lake, Syracuse, NY—A predecessor company to Honeywell operated a chemical plant which is alleged to have
contributed mercury and other contaminants to the Lake. In July 2005, the New York State Department of Environmental
Conservation (the DEC) issued its Record of
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