Honeywell 2009 Annual Report Download - page 105

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
In the first quarter of 2009, the Company repaid $493 million of its floating rate notes. In the third quarter of
2009, the Company repaid $500 million of its floating rate notes and $100 million of its zero coupon bonds and
money multiplier notes.
Note 15—Lease Commitments
Future minimum lease payments under operating leases having initial or remaining noncancellable lease
terms in excess of one year are as follows:
At December 31,
2009
2010 $ 313
2011 245
2012 174
2013 125
2014 100
Thereafter 256
$ 1,213
We have entered into agreements to lease land, equipment and buildings. Principally all our operating leases
have initial terms of up to 25 years, and some contain renewal options subject to customary conditions. At any
time during the terms of some of our leases, we may at our option purchase the leased assets for amounts that
approximate fair value. We do not expect that any of our commitments under the lease agreements will have a
material adverse effect on our consolidated results of operations, financial position or liquidity.
Rent expense was $371, $383 and $365 million in 2009, 2008 and 2007, respectively.
Note 16—Financial Instruments and Fair Value Measures
Credit and Market Risk—Financial instruments, including derivatives, expose us to counterparty credit risk
for nonperformance and to market risk related to changes in interest and currency exchange rates and
commodity prices. We manage our exposure to counterparty credit risk through specific minimum credit
standards, diversification of counterparties, and procedures to monitor concentrations of credit risk. Our
counterparties in derivative transactions are substantial investment and commercial banks with significant
experience using such derivative instruments. We monitor the impact of market risk on the fair value and cash
flows of our derivative and other financial instruments considering reasonably possible changes in interest rates,
currency exchange rates and commodity prices and restrict the use of derivative financial instruments to hedging
activities.
We continually monitor the creditworthiness of our customers to which we grant credit terms in the normal
course of business. The terms and conditions of our credit sales are designed to mitigate or eliminate
concentrations of credit risk with any single customer. Our sales are not materially dependent on a single
customer or a small group of customers.
Foreign Currency Risk Management—We conduct our business on a multinational basis in a wide variety
of foreign currencies. Our exposure to market risk for changes in foreign currency exchange rates arises from
international financing activities between subsidiaries, foreign currency denominated monetary assets and
liabilities and transactions arising from international trade. Our objective is to preserve the economic value of
non-functional currency denominated cash flows. We attempt to hedge transaction exposures with natural offsets
to the fullest extent possible and, once these opportunities have been exhausted, through foreign currency
exchange forward and option contracts with third parties.
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