Honeywell 2011 Annual Report Download - page 50

insurance claims. Where probable insurance recoveries are not subject to definitive settlement agreements with specified payment dates, but instead are
covered by insurance policies, we have assumed collection will occur beyond 2016. Projecting the timing of insurance recoveries is subject to many
uncertainties that could cause the amounts collected to be higher or lower than those projected and recorded or could cause the timing of collections to
be earlier or later than that projected. We reevaluate our projections concerning insurance recoveries in light of any changes or developments that would
impact recoveries or the timing thereof. See Asbestos Matters in Note 21 to the financial statements for additional information.
(6) The table excludes $815 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 2012, we plan to make cash contributions of $800 million
to $1 billion ($250 million was made in January 2012) to our plans to improve the funded status of the plans. These contributions principally consist of
voluntary contributions to our U.S. plans. The timing and amount of contributions may be impacted by a number of factors, including the funded status of the
plans. Beyond 2012, 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 $167 million in 2012 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, 2011:
Maximum
Potential
Future
Payments
Operating lease residual values $ 43
Other third parties' financing 5
Unconsolidated affiliates' financing 12
Customer financing 13
$ 73
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.
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