Honeywell 2007 Annual Report Download - page 116

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
With respect to environmental matters involving site contamination, we continually conduct studies,
individually or jointly with other potentially responsible parties, to determine the feasibility of various remedial
techniques to address environmental matters. It is our policy to record appropriate liabilities for environmental
matters when remedial efforts or damage claim payments are probable and the costs can be reasonably
estimated. Such liabilities are based on our best estimate of the undiscounted future costs required to complete
the remedial work. The recorded liabilities are adjusted periodically as remediation efforts progress or as
additional technical, regulatory or legal information becomes available. Given the uncertainties regarding the
status of laws, regulations, enforcement policies, the impact of other potentially responsible parties, technology
and information related to individual sites, we do not believe it is possible to develop an estimate of the range of
reasonably possible environmental loss in excess of our recorded liabilities. We expect to fund expenditures for
these matters from operating cash flow. The timing of cash expenditures depends on a number of factors,
including the timing of remedial investigations and feasibility studies, the timing of litigation and settlements of
remediation liability, personal injury and property damage claims, regulatory approval of cleanup projects,
remedial techniques to be utilized and agreements with other parties. The following table summarizes information
concerning our recorded liabilities for environmental costs:
Years Ended
December 31,
2007 2006 2005
Beginning of year $ 831 $ 879 $ 895
Accruals for environmental matters deemed probable and reasonably estimable 230 218 186
Environmental liability payments (267) (264) (247)
Other adjustments (1) 5 (2) 45
End of year $ 799 $ 831 $ 879
(1) In 2005, $45 million principally relates to reclassification of the carrying value of land to property, plant and
equipment with a corresponding increase to environmental liabilities.
Environmental liabilities are included in the following balance sheet accounts:
December 31,
2007 2006
Accrued liabilities $ 311 $ 251
Other liabilities 488 580
$ 799 $ 831
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.
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