Honeywell 2009 Annual Report Download - page 127
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HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
we do not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse
effect on our consolidated financial position. Because most contingencies are resolved over long periods of time,
potential liabilities are subject to change due to new developments, changes in settlement strategy or the impact
of evidentiary requirements, which could cause us to pay damage awards or settlements (or become subject to
equitable remedies) that could have a material adverse effect on our results of operations or operating cash flows
in the periods recognized or paid.
Warranties and Guarantees—We have issued or are a party to the following direct and indirect guarantees
at December 31, 2009:
Maximum
Potential
Future
Payments
Operating lease residual values $ 35
Other third parties' financing 4
Unconsolidated affiliates' financing 30
Customer financing 16
$ 85
We do not expect that these guarantees will have a material adverse effect on our consolidated results of
operations, financial position or liquidity.
In connection with the disposition of certain businesses and facilities we have indemnified the purchasers for
the expected cost of remediation of environmental contamination, if any, existing on the date of disposition. Such
expected costs are accrued when environmental assessments are made or remedial efforts are probable and the
costs can be reasonably estimated.
In the normal course of business we issue product warranties and product performance guarantees. We
accrue for the estimated cost of product warranties and performance guarantees based on contract terms and
historical experience at the time of sale. Adjustments to initial obligations for warranties and guarantees are
made as changes in the obligations become reasonably estimable. The following table summarizes information
concerning our recorded obligations for product warranties and product performance guarantees:
Years Ended December 31,
2009 2008 2007
Beginning of year $ 417 $ 396 $ 363
Accruals for warranties/guarantees issued during the year 188 242 233
Adjustment of pre-existing warranties/guarantees (7) (34) 3
Settlement of warranty/guarantee claims (191) (187) (203)
End of year $ 407 $ 417 $ 396
Product warranties and product performance guarantees are included in the following balance sheet
accounts:
2009 2008
Accrued liabilities $ 382 $ 385
Other liabilities 25 32
$ 407 $ 417
Note 22—Pension and Other Postretirement Benefits