Honeywell 2008 Annual Report Download - page 55

candidates that will further our strategic plan and strengthen our existing core businesses. We also identify
businesses that do not fit into our long-term strategic plan based on their market position, relative profitability or
growth potential. These businesses are considered for potential divestiture, restructuring or other repositioning
actions subject to regulatory constraints. In 2008 and 2007, we realized $909 million and $51 million,
respectively, in cash proceeds from sales of non-strategic businesses.
In July 2008, the Company completed the sale of its Consumables Solutions business to B/E Aerospace ("B/
E") for $1.05 billion, consisting of approximately $901 million in cash and six million shares of B/E common stock.
As discussed in Note 3 to the financial statements, this transaction resulted in a pre- tax gain of $623 million,
$417 million net of tax. These proceeds, along with our other sources and uses of liquidity, as discussed above,
were utilized to investment in our existing core businesses and fund acquisition activity, share repurchases and
dividends.
Based on past performance and current expectations, we believe that our operating cash flows will be
sufficient to meet our future cash needs. Our available cash, committed credit lines, access to the public debt and
equity markets as well as our ability to sell trade accounts receivables, provide additional sources of short-term
and long-term liquidity to fund current operations, debt maturities, and future investment opportunities. Based on
our current financial position and expected economic performance, we do not believe that our liquidity will be
adversely impacted by an inability to access our sources of financing.
Contractual Obligations and Probable Liability Payments
Following is a summary of our significant contractual obligations and probable liability payments at December
31, 2008:
Total(6)
Payments by Period
Thereafter 2009 2010-
2011 2012-
2013
(Dollars in millions)
Long-term debt, including capitalized
leases(1) $ 6,888 $ 1,023 $ 1,642 $ 1,006 $ 3,217
Interest payments on long-term debt,
including capitalized leases 3,536 383 560 423 2,170
Minimum operating lease payments 1,292 323 427 228 314
Purchase obligations(2) 1,698 798 459 317 124
Estimated environmental liability
payments(3) 946 330 300 200 116
Asbestos related liability payments(4) 1,709 171 919 384 235
Asbestos insurance recoveries(5) (1,033) (4) (107) (118) (804)
$ 15,036 $ 3,024 $ 4,200 $ 2,440 $ 5,372
(1) Assumes all long-term debt is outstanding until scheduled maturity.
(2) Purchase obligations are entered into with various vendors in the normal course of business and are
consistent with our expected requirements.
(3) The payment amounts in the table only reflect the environmental liabilities which are probable and reasonably
estimable as of December 31, 2008. See Environmental Matters in Note 21 to the financial statements for
additional information.
(4) These amounts are estimates of asbestos related cash payments for NARCO and Bendix based on our
asbestos related liabilities which are probable and reasonably estimable as of December 31, 2008. NARCO
estimated payments are based on the terms and conditions, including evidentiary requirements, specified in
the definitive agreements or agreements in principle and pursuant to Trust Distribution Procedures. Bendix