Honeywell 2007 Annual Report Download - page 18

are generally important to our operations, but we do not consider any patent, trademark or related group of
patents, or any licensing or distribution rights related to a specific process or product, to be of material
importance in relation to our total business. See "Item 1A. Risk Factors" for further discussion.
We have registered trademarks for a number of our products and services, including Honeywell, UOP,
Prestone, FRAM, Autolite, Bendix, Jurid, Holts, Garrett, Ademco, Fire-Lite, Notifier, System Sensor, MK, Novar,
Genetron, Enovate, Spectra, Aclar, Simoniz and Redex.
Research and Development
Our research activities are directed toward the discovery and development of new products, technologies
and processes and the development of new uses for existing products. The Company has research and
development activities in the U.S., Europe, India and China.
Research and development (R&D) expense totaled $1,459, $1,411 and $1,072 million in 2007, 2006 and
2005, respectively. The increase in R&D expense in 2007 compared to 2006 of 3 percent was mainly due to
additional product, design and development costs in Automation and Control Solutions and increased
expenditures on the development of turbocharging systems for new platforms. The increase in R&D expense in
2006 compared to 2005 of 32 percent was primarily due to the impact of additional R&D expense for UOP in
Specialty Materials as well as product, design and development costs in Aerospace and Automation and Control
Solutions. Customer-sponsored (principally the U.S. Government) R&D activities amounted to an additional $881,
$777 and $694 million in 2007, 2006 and 2005, respectively.
Environment
We are subject to various federal, state, local and foreign government requirements regulating the discharge
of materials into the environment or otherwise relating to the protection of the environment. It is our policy to
comply with these requirements, and we believe that, as a general matter, our policies, practices and procedures
are properly designed to prevent unreasonable risk of environmental damage, and of resulting financial liability, in
connection with our business. Some risk of environmental damage is, however, inherent in some of our
operations and products, as it is with other companies engaged in similar businesses.
We are and have been engaged in the handling, manufacture, use and disposal of many substances
classified as hazardous or toxic by one or more regulatory agencies. We believe that, as a general matter, our
policies, practices and procedures are properly designed to prevent unreasonable risk of environmental damage
and personal injury, and that our handling, manufacture, use and disposal of these substances are in accord with
environmental and safety laws and regulations. It is possible, however, that future knowledge or other
developments, such as improved capability to detect substances in the environment or increasingly strict
environmental laws and standards and enforcement policies, could bring into question our current or past
handling, manufacture, use or disposal of these substances.
Among other environmental requirements, we are subject to the federal superfund and similar state and
foreign laws and regulations, under which we have been designated as a potentially responsible party that may
be liable for cleanup costs associated with current and former operating sites and various hazardous waste sites,
some of which are on the U.S. Environmental Protection Agency's superfund priority list. Although, under some
court interpretations of these laws, there is a possibility that a responsible party might have to bear more than its
proportional share of the cleanup costs if it is unable to obtain appropriate contribution from other responsible
parties, we have not had to bear significantly more than our proportional share in multi-party situations taken as a
whole.
Further information, including the current status of significant environmental matters and the financial impact
incurred for remediation of such environmental matters, if any, is included in "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations," in Note 21 of Notes to Financial Statements in
"Item 8. Financial Statements and Supplementary Data," and in "Item 1A. Risk Factors."
Employees
We have approximately 122,000 employees at December 31, 2007, of which approximately 57,000 were
located in the United States.
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