Honeywell 2006 Annual Report Download - page 26

regarding these incidents, for which we believe we have adequate insurance coverage to the extent that there is any liability. We are
also engaged in discussions with the Louisiana Department of Environmental Quality (LADEQ) to resolve alleged civil environmental
violations at our Baton Rouge and Geismar, Louisiana facilities that, in part, overlap with the subject of the federal investigation.
Although we cannot predict the outcome of the matters described below, we believe that sufficient provisions have been made in
our financial statements for these matters. We do not believe that the matters described below will have a material adverse effect on
our consolidated financial position, results of operations or operating cash flows.
Honeywell is a defendant in a lawsuit filed by the Arizona Attorney General's office on behalf of the Arizona Department of
Environmental Quality (ADEQ). The complaint alleges failure to make required disclosures, as well as unrelated environmental
violations. Honeywell believes that the allegations in this matter are without merit and intends to vigorously defend against this
lawsuit. ADEQ's most significant allegations have been dismissed over the course of the proceedings.
In February 2007, ADEQ has demanded penalties for alleged violations by Honeywell of the state's underground storage tank
regulations at the aircraft engines plant in Phoenix, Arizona. Negotiations regarding the penalty are ongoing.
In the third quarter of 2006, Honeywell was advised that the State of Arizona intended to seek penalties for alleged failures of a
facility located in Kingman, Arizona to comply with various provisions of the Resource Conservation and Recovery Act. We expect to
resolve this matter with the State.
Honeywell received Notices of Violation from the Maricopa County Air Quality Department in July 2006 with respect to various
air permitting compliance matters at one of its facilities located in Phoenix, Arizona. Honeywell believes it has taken appropriate
corrective and preventive actions to address the concerns raised by the County.
The State of Illinois has brought a claim against Honeywell for penalties and past costs relating to releases of chlorinated solvents
at a facility owned by a third party. The State claims that a predecessor company to Honeywell delivered solvents to the third party
from 1969 until 1992; that spills occurred during those deliveries; and that Honeywell should pay a share of the penalties and state
response costs connected with those spills. Honeywell believes it has strong defenses to the State's claims (including that the
contamination arose primarily from releases unrelated to the predecessor's deliveries). We are engaged in discussions with the State
regarding a negotiated resolution of this matter.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
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