Honeywell 2009 Annual Report Download - page 18

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, Aclar,
Ademco, Autolite, Bendix, Enovate, Fire-Lite, FRAM, Garrett, Hand Held, Holts, Jurid, Metrologic, MK, North,
Notifier, Novar, Prestone, Redex, RMG, Simoniz, Spectra, System Sensor and UOP.
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 $1,330, $1,543 and $1,459 million in 2009, 2008 and
2007, respectively. The decrease in R&D expense in 2009 compared to 2008 of 14 percent was consistent with
our 15 percent decrease in net sales. However, as a percentage of sales, R&D increased to 4.3 percent in 2009
compared to 4.2 percent in 2008. The increase as a percentage of sales was driven by lower sales, product,
design and development costs in Automation and Control Solutions and Specialty Materials as well as
expenditures on the development of turbocharging systems for new platforms, partially offset by lower R&D
expense in Aerospace primarily due to major program completions. The increase in R&D expense in 2008
compared to 2007 of 6 percent was mainly due to additional product, design and development costs in
Automation and Control Solutions, increased expenditures on the development of products for new aircraft
platforms and increased expenditures on the development of turbocharging systems for new platforms.
Customer-sponsored (principally the U.S. Government) R&D activities amounted to an additional $852, $903 and
$881 million in 2009, 2008 and 2007, 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 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.
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