Honeywell 2006 Annual Report Download - page 105

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
Decision with respect to remediation of industrial contamination in the Lake. In October 2006, Honeywell entered into a Consent
Decree with the State of New York to implement the remedy set forth in the Record of Decision. In January 2007, the Consent Decree
was approved by the United States District Court for the Northern District of New York.
The Record of Decision calls for a combined dredging/capping remedy generally in line with the approach recommended in the
Feasibility Study submitted by Honeywell in May 2004. Based on currently available information and analysis performed by our
engineering consultants, we have accrued for our estimated cost of implementing the remedy set forth in the Record of Decision. Our
estimating process considered a range of possible outcomes and the amounts recorded reflect our best estimate at this time. Given the
scope and complexity of this project, it is possible that actual costs could exceed estimated costs by an amount that could have a
material adverse impact on our consolidated results of operations and operating cash flows in the periods recognized or paid. At this
time, however, we cannot identify any legal, regulatory or technical reason to conclude that a specific alternative outcome is more
probable than the outcome for which we have made provisions in our financial statements. The DEC's aggregate cost estimate, which
is higher than the amount reserved, is based on the high end of the range of potential costs for major elements of the Record of
Decision and includes a contingency. The actual cost of the Record of Decision will depend upon, among other things, the resolution
of certain technical issues during the design phase of the remediation. We do not believe that this matter will have a material adverse
impact on our consolidated financial position. In December 2006, the United States Fish and Wildlife Service published notice of its
intent to pursue natural resource damages related to the site. It is not possible to predict the outcome or timing of its assessments,
which are typically lengthy processes lasting several years, or the amounts of or responsibility for these damages.
Dundalk Marine Terminal, Baltimore–Chrome residue from legacy chrome plant operations in Baltimore was deposited as fill at
the Dundalk Marine Terminal (“DMT”), which is owned and operated by the Maryland Port Administration (“MPA”). Honeywell and
the MPA have been sharing costs to investigate and mitigate related environmental issues, and have entered into a cost sharing
agreement under which Honeywell will bear a 77 percent share of the costs of developing and implementing permanent remedies for
the DMT facility. The investigative phase (which began in April 2006) is expected to take approximately 18 to 36 months, after which
the appropriate remedies will be identified and chosen. We have negotiated a Consent Decree with the MPA and Maryland
Department of the Environment (“MDE”) with respect to the investigation and remediation of the DMT facility, and that Consent
Decree was filed with the Maryland state court for Baltimore County, Maryland. BUILD, a Baltimore community group, together with
a local church and two individuals, have intervened and are challenging the Consent Decree. We do not believe that this matter will
have a material adverse impact on our consolidated financial position or operating cash flows. Given the scope and complexity of this
project, it is possible that the cost of remediation, when determinable, could have a material adverse impact on our results of
operations in the periods recognized.
Asbestos Matters
Like many other industrial companies, Honeywell is a defendant in personal injury actions related to asbestos. We did not mine or
produce asbestos, nor did we make or sell insulation products or other construction materials that have been identified as the primary
cause of asbestos related disease in the vast majority of claimants. Products containing asbestos previously manufactured by
Honeywell or by previously owned subsidiaries primarily fall into two general categories: refractory products and friction products.
Refractory Products—Honeywell owned North American Refractories Company (NARCO) from 1979 to 1986. NARCO
produced refractory products (high temperature bricks and cement) that were
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