Honeywell 2010 Annual Report Download - page 45

• Capital expenditures—we expect to spend approximately $800 million for capital expenditures in 2011 primarily for cost reduction, maintenance,
replacement, growth, and production and capacity expansion.
• Debt repayments—there are $523 million of scheduled long-term debt maturities in 2011.
• Share repurchases—The Board of Directors has authorized the repurchase of up to a total of $3 billion of Honeywell common stock, which
amount includes $1.3 billion that remained available under the Company's previously reported share repurchase program. Honeywell presently
expects to repurchase outstanding shares from time to time during 2011 to offset the dilutive impact of employee stock based compensation
plans, including future option exercises, restricted unit vesting and matching contributions under our savings plans. The amount and timing of
future repurchases may vary depending on market conditions and the level of operating, financing and other investing activities.
• Dividends—we expect to pay approximately $1,050 million in dividends on our common stock in 2011, reflecting a 1 percent increase in the
number of shares outstanding and a 10 percent increase in the 2011 dividend rate.
• Asbestos claims—we expect our cash spending for asbestos claims and our cash receipts for related insurance recoveries to be approximately
$162 and $50 million, respectively, in 2011. See Asbestos Matters in Note 21 to the financial statements for further discussion.
• Pension contributions—In 2011, we are not required to make any contributions to our U.S. pension plans to satisfy minimum statutory funding
requirements. However, in January 2011 we made a voluntary cash contribution of $1 billion to our U.S. plans to improve the funded status of the
plans. During 2010, we made voluntary contributions of $600 million in cash and $400 million of Honeywell common stock to our U.S. pension
plans, as well as $242 million of marketable securities to our non-U.S. pension plans, to improve the funded status of our plans. See Note 22 to
the financial statements for further discussion of pension contributions. In addition, the Company is evaluating additional voluntary contributions
in 2011 and currently expects to contribute a portion of the proceeds from the sale of its Consumer Products Group business (discussed below) to
our U.S. Pension plans. The timing and amount of contributions may be impacted by a number of factors, including the rate of return on plan
assets and discount rates.
• Repositioning actions—we expect that cash spending for severance and other exit costs necessary to execute the previously announced
repositioning actions will approximate $150 million in 2011.
• Environmental remediation costs—we expect to spend approximately $325 million in 2011 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 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 we realized $909 million in cash proceeds from sales of non-strategic businesses.
In January 2011, the Company entered into a definitive agreement to sell its Consumer Products Group business (CPG) to Rank Group Limited for
approximately $950 million. The sale, which is subject to customary closing conditions, including the receipt of regulatory approvals, is expected to close in
the third quarter of 2011. We currently estimate that the transaction will result in a pre-tax gain of approximately $350 million, approximately $200 million
net of tax. The sale of CPG, within the Transportation Systems segment, is consistent with the Company's strategic focus on its portfolio of differentiated
global technologies.
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 invest in our existing core businesses and fund acquisition activity, share repurchases and dividends.
42