Honeywell 2008 Annual Report Download - page 54

proceeds of any offering would be used for general corporate purposes, including repayment of existing
indebtedness, capital expenditures and acquisitions.
We also sell interests in designated pools of trade accounts receivables to third parties. The sold receivables
were over-collateralized by $93 million at December 31, 2008 and we retain a subordinated interest in the pool of
receivables representing that over-collateralization as well as an undivided interest in the balance of the
receivables pools. New receivables are sold under the agreement as previously sold receivables are collected.
The retained interests in the receivables are reflected at the amounts expected to be collected by us, and such
carrying value approximates the fair value of our retained interests. The sold receivables were $500 million at
both December 31, 2008 and 2007.
We monitor the third-party depository institutions that hold our cash and cash equivalents on a daily basis.
Our emphasis is primarily on safety of principal and secondarily on maximizing yield on those funds. We diversify
our cash and cash equivalents among counterparties to minimize exposure to any one of these entities.
We are also monitoring the ability of our customers to obtain financing in order to mitigate any adverse
impact on our revenues, primarily in our long cycle businesses.
In addition to our normal operating cash requirements, our principal future cash requirements will be to fund
capital expenditures, debt repayments, dividends, employee benefit obligations, environmental remediation
costs, asbestos claims, severance and exit costs related to repositioning actions, share repurchases and any
strategic acquisitions.
Specifically, we expect our primary cash requirements in 2009 to be as follows:
• Capital expenditures—we expect to spend approximately $800 million for capital expenditures in 2009
primarily for cost reduction, maintenance, replacement, growth, and production and capacity expansion.
•
Debt repayments—there are $1,023 million of scheduled long-term debt maturities in 2009. We expect to
refinance some of these maturities in the debt capital markets during 2009 and reduce overall debt
balances.
•
Share repurchases—Under the Company's previously announced $3.0 billion share repurchase program,
$1.3 billion remained available as of December 31, 2008 for additional share repurchases. The amount and
timing of repurchases may vary depending on market conditions and the level of operating and other
investing activities.
•
Dividends—we expect to pay approximately $900 million in dividends on our common stock in 2009,
reflecting a 10 percent increase in the 2009 dividend rate.
•
Asbestos claims—we expect our cash spending for asbestos claims and our cash receipts for related
insurance recoveries to be approximately $171 and $4 million, respectively, in 2009. See Asbestos Matters
in Note 21 to the financial statements for further discussion.
•
Pension contributions—In 2009, we are not required to make any contributions to our U.S. pension plans to
satisfy minimum statutory funding requirements. However, we do plan to make voluntary contributions of
Honeywell common stock to the U.S. plan in 2009 totaling approximately $800 million to improve the funded
status of our plans. We also expect to make cash contributions to our non-U.S. plans of approximately $140
million in 2009. See Note 22 to the financial statements for further discussion of pension contributions.
•
Repositioning actions—we expect that cash spending for severance and other exit costs necessary to
execute the previously announced repositioning actions will approximate $250 million in 2009.
•
Environmental remediation costs—we expect to spend approximately $330 million in 2009 for remedial
response and voluntary clean-up costs. See Environmental Matters in Note 21 to the financial statements
for additional information.
We continuously assess the relative strength of each business in our portfolio as to strategic fit, market
position, profit and cash flow contribution in order to upgrade our combined portfolio and identify business units
that will most benefit from increased investment. We identify acquisition
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