Honeywell 2013 Annual Report Download - page 62

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
$130 million in 2014 net of the benefit of approximately $11 million from the Medicare prescription
subsidy. See Note 23 to the financial statements for further discussion of our pension and OPEB plans.
The noncontrolling interest shareholder of UOP Russell LLC (formerly Thomas Russell Co.), one
of our subsidiaries, has put rights that may be exercised causing us to purchase their equity interests
beginning January 1, 2016 through December 31, 2016. The same interest is subject to certain call
rights by the Company. As the amount paid is based on operating income performance from 2013 to
2015, the actual settlement amount may be different and has therefore been excluded from this table.
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, 2013:
Maximum
Potential
Future
Payments
Operating lease residual values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40
Other third parties’ financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Customer financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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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 uncertainties regarding the status of laws,
regulations, enforcement policies, the impact of other potentially responsible parties, technology and
information related to individual sites, we do not believe it is possible to develop an estimate of the
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