Honeywell 2010 Annual Report Download - page 47

(6) The table excludes $757 million of uncertain tax positions. See Note 6 to the financial statements.
The table also excludes our pension and other postretirement benefits (OPEB) obligations. In January 2011, we made a voluntary cash contribution of
$1 billion to our U.S. plans to improve the funded status of our plans. In addition, the company is evaluating additional voluntary contributions in 2011. We
also expect to make contributions to our non-U.S. plans of approximately $55 million in 2011. Beyond 2011, the actual amounts required to be contributed are
dependent upon, among other things, interest rates, underlying asset returns and the impact of legislative or regulatory actions related to pension funding
obligations. Payments due under our OPEB plans are not required to be funded in advance, but are paid as medical costs are incurred by covered retiree
populations, and are principally dependent upon the future cost of retiree medical benefits under our plans. We expect our OPEB payments to approximate
$188 million in 2011 net of the benefit of approximately $13 million from the Medicare prescription subsidy. See Note 22 to the financial statements for
further discussion of our pension and OPEB plans.
Off-Balance Sheet Arrangements
Following is a summary of our off-balance sheet arrangements:
Guarantees—We have issued or are a party to the following direct and indirect guarantees at December 31, 2010:
Maximum
Potential
Future
Payments
Operating lease residual values $ 43
Other third parties' financing 5
Unconsolidated affiliates' financing 11
Customer financing 17
$ 76
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.
Environmental Matters
We are subject to various federal, state, local and foreign government requirements relating to the protection of the environment. 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 hazardous substances are in accordance with environmental and safety laws and regulations. However,
mainly because of past operations and operations of predecessor companies, we, like other companies engaged in similar businesses, have incurred remedial
response and voluntary cleanup costs for site contamination and are a party to lawsuits and claims associated with environmental and safety matters, including
past production of products containing hazardous substances. Additional lawsuits, claims and costs involving environmental matters are likely to continue to
arise in the future.
With respect to environmental matters involving site contamination, we continually conduct studies, individually or jointly, with other potentially
responsible parties, to determine the feasibility of various remedial techniques to address environmental matters. It is our policy (see Note 1 to the financial
statements) to record appropriate liabilities for environmental matters when remedial efforts or damage claim payments are probable and the costs can be
reasonably estimated. Such liabilities are based on our best estimate of the undiscounted future costs required to complete the remedial work. The recorded
liabilities are adjusted periodically as remediation efforts progress or as additional technical or legal information becomes available. Given the
44