Honeywell International (HON) 10-Q 23 Oct 09 2009 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
In Billions, except Share data	9 Months Ended Sep. 30, 2009	Jun. 30, 2008
Document and Entity Information [Abstract]
Entity Registrant Name	HONEYWELL INTERNATIONAL INC.
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		37.5
Entity Common Stock, Shares Outstanding	763,044,336
Entity Central Index Key	0000773840

Consolidated Statement of Opera

Consolidated Statement of Operations (USD $)
In Millions, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Product sales	$5,947	$7,375	$17,569	$22,363
Service sales	1,753	1,900	5,267	5,481
Net sales	7,700	9,275	22,836	27,844
Costs, expenses and other
Cost of products sold	4,657	6,153	13,781	17,749
Cost of services sold	1,140	1,323	3,454	3,722
Cost of goods and services sold	5,797	7,476	17,235	21,471
Selling, general and administrative expenses	1,034	1,309	3,270	3,854
Other (income) expense	(39)	(660)	14	(730)
Interest and other financial charges	110	112	350	342
Cost and operating expenses	6,902	8,237	20,869	24,937
Income before taxes	798	1,038	1,967	2,907
Tax expense	179	315	489	808
Net income	619	723	1,478	2,099
Less: Net Income attributable to the noncontrolling interest	11	4	23	14
Net income attributable to Honeywell	$608	$719	$1,455	$2,085
Earnings per share of common stock- basic:	0.8	0.98	1.94	2.82
Earnings per share of common stock- assuming dilution:	0.8	0.97	1.94	2.79
Cash dividends per share of common stock	0.3025	0.275	0.9075	0.825

Consolidated Balance Sheet

Consolidated Balance Sheet (USD $)
In Millions	Sep. 30, 2009	Dec. 31, 2008
ASSETS
Cash and cash equivalents	$2,604	$2,065
Accounts, notes and other receivables	6,464	6,129
Inventories	3,576	3,848
Deferred income taxes	900	922
Other current assets	342	299
Total current assets	13,886	13,263
Investments and long-term receivables	471	670
Property, plant and equipment - net	4,828	4,934
Goodwill	10,520	10,185
Other intangible assets - net	2,265	2,267
Insurance recoveries for asbestos related liabilities	1,045	1,029
Deferred income taxes	1,698	2,135
Other assets	1,060	1,007
Total assets	35,773	35,490
LIABILITIES
Accounts payable	3,201	3,773
Short-term borrowings	253	56
Commercial Paper	696	1,431
Current maturities of long-term debt	1,019	1,023
Accrued liabilities	5,865	6,006
Total current liabilities	11,034	12,289
Long-term debt	6,256	5,865
Deferred income taxes	730	698
Postretirement benefit obligations other than pensions	1,554	1,799
Asbestos related liabilities	1,559	1,538
Other liabilities	5,045	6,032
SHAREOWNERS' EQUITY
Capital - common stock issued	958	958
- additional paid-in capital	3,802	3,994
Common stock held in treasury, at cost	(9,038)	(10,206)
Accumulated other comprehensive income (loss)	(3,251)	(3,809)
Retained earnings	17,021	16,250
Total Honeywell shareowners' equity	9,492	7,187
Noncontrolling interest	103	82
Total shareowners' equity	9,595	7,269
Total liabilities and shareowners' equity	$35,773	$35,490

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash flows from operating activities:
Net income attributable to Honeywell	$1,455	$2,085
Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activities:
Depreciation and amortization	711	693
Gain on sale of non-strategic businesses and assets	(15)	(635)
Repositioning and other charges	369	921
Net payments for repositioning and other charges	(447)	(237)
Pension and other postretirement expense	48	89
Pension and other postretirement payments	(144)	(153)
Stock compensation expense	95	107
Deferred income taxes	432	248
Excess tax benefits from share based payment arrangements	0	(21)
Other	274	28
Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
Accounts, notes and other receivables	202	(465)
Inventories	350	(393)
Other current assets	(49)	(4)
Accounts payable	(605)	210
Accrued liabilities	(61)	59
Net cash provided by operating activities	2,615	2,532
Cash flows from investing activities:
Expenditures for property, plant and equipment	(352)	(552)
Proceeds from disposals of property, plant and equipment	21	52
Decrease in investments	1	14
Increase in investments	0	(4)
Cash paid for acquisitions, net of cash acquired	(468)	(2,108)
Proceeds from sales of businesses, net of fees paid	1	921
Other	(53)	7
Net cash used for investing activities	(850)	(1,670)
Cash flows from financing activities:
Net (decrease)/increase in commercial paper	(735)	459
Net (decrease)/increase in short-term borrowings	(313)	22
Proceeds from issuance of common stock	20	142
Proceeds from issuance of long-term debt	1,488	1,487
Payments of long-term debt	(1,104)	(425)
Excess tax benefits from share based payment arrangements	0	21
Repurchases of common stock	0	(1,459)
Cash dividends on common stock	(684)	(610)
Net cash (used for)/provided by financing activities	(1,328)	(363)
Effect of foreign exchange rate changes on cash and cash equivalents	102	(36)
Net increase in cash and cash equivalents	539	463
Cash and cash equivalents at beginning of period	2,065	1,829
Cash and cash equivalents at end of period	$2,604	$2,292

Basis of Presentation

Basis of Presentation
	9 Months Ended Sep. 30, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation	NOTE 1. Basis of Presentation In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of Honeywell International Inc. and its consolidated subsidiaries at September 30, 2009 and the results of operations for the three and nine months ended September 30, 2009 and 2008 and cash flows for the nine months ended September 30, 2009 and 2008. The results of operations for the three and nine month periods ended September 30, 2009 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year. We report our quarterly financial information using a calendar convention; that is, the first, second and third quarters are consistently reported as ending on March 31, June 30 and September 30, respectively. It has been our practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires our businesses to close their books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on our business processes. The effects of this practice are generally not significant to reported results for any quarter and only exist within a reporting year. In the event that differences in actual closing dates are material to year-over-year comparisons of quarterly or year-to-date results, we provide appropriate disclosures. Our actual closing dates for the three and nine month periods ended September 30, 2009 and 2008 were October 3, 2009 and September 27, 2008, respectively. The financial information as of September 30, 2009 should be read in conjunction with the financial statements for the year ended December 31, 2008 contained in our Form 10-K filed on February 13, 2009. Certain prior year amounts have been reclassified to conform to current year presentation.

Recent Accounting Pronouncement

Recent Accounting Pronouncements
	9 Months Ended Sep. 30, 2009 USD / shares
Recent Accounting Pronouncements [Abstract]
Recent Accounting Pronouncements	NOTE 2. Recent Accounting Pronouncements In September 2006, the Financial Accounting Standards Board (FASB) issued new accounting guidance on fair value measurements. This guidance establishes a common definition for fair value to be applied to U.S. GAAP requiring use of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. It is effective for financial assets and financial liabilities for fiscal years beginning after November 15, 2007. Issued in February 2008, a FASB staff position removed leasing transactions from the scope of the new fair value guidance. Also in February 2008, the FASB issued authoritative guidance deferring the effective date of the fair value guidance for all nonfinancial assets and nonfinancial liabilities to fiscal years beginning after November 15, 2008. In October 2008, the FASB issued a staff position that clarified the application of the fair value guidance in an inactive market. It demonstrated how the fair value of a financial asset is determined when the market for that financial asset is inactive. The staff position was effective upon issuance, including prior periods for which financial statements had not been issued. The implementation of this standard did not have a material impact on our consolidated financial position and results of operations. In April 2009, the FASB issued a staff position providing additional guidance on factors to consider in estimating fair value when there has been a significant decrease in market activity for a financial asset. The guidance was effective for interim and annual periods ending after June 15, 2009. The implementation of this standard did not have a material impact on our consolidated financial position and results of operations. In September 2009, the FASB issued additional guidance on measuring the fair value of liabilities effective for the first reporting period (including interim periods) beginning after issuance. Implementation will not have a material impact on our consolidated financial position and results of operations. In September 2009, the FASB issued additional guidance on measuring fair value of certain alternative investments effective for the first reporting period (including interim periods) ending after December 15, 2009. Implementation will not have a material impact on our consolidated financial position and results of operations. The implementation of the fair value guidance for nonfinancial assets and nonfinancial liabilities, effective January 1, 2009, did not have a material impact on our consolidated financial position and results of operations. See Note 11 for additional fair value information and disclosure for financial and nonfinancial assets and liabilities. In December 2007, the FASB issued new guidance on business combinations. The new standard provides revised guidance on how acquirors recognize and measure the consideration transferred, identifiable assets acquired, liabilities assumed, noncontrolling interests, and goodwill acquired in a business combination. The new standard also expands required disclosures surrounding the nature and financial e

Acquisitions

Acquisitions
	9 Months Ended Sep. 30, 2009 USD / shares
Acquisitions [Abstract]
Acquisitions	Note 3. Acquisitions In August 2009, the Company completed the acquisition of the RMG Group (RMG Regel + Messtechnik GmbH), a natural gas measuring and control products, services and integrated solutions company, for a purchase price of approximately $416 million, net of cash acquired. The purchase price for the acquisition was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The Company has assigned $174 million to identifiable intangible assets, predominantly customer relationships, existing technology and trademarks. These intangible assets are being amortized over their estimated lives using straight-line and accelerated amortization methods. The excess of the purchase price over the estimated fair values of net assets acquired (approximating $219 million), was recorded as goodwill. This goodwill is non-deductible for tax purposes. This acquisition was accounted for by the acquisition method, and, accordingly, results of operations are included in the consolidated financial statements from the date of acquisition. The results from the acquisition date through September 30, 2009 are included in the Automation and Control Solutions segment and were not material to the consolidated financial statements. As of September 30, 2009, the purchase accounting for the RMG Group is still subject to adjustment primarily for useful lives of intangible assets, amounts allocated to intangible assets and goodwill, for certain pre-acquisition contingencies, and for settlement of post closing purchase price adjustments.

Repositioning and Other Charges

Repositioning and Other Charges
	9 Months Ended Sep. 30, 2009 USD / shares
Repositioning and Other Charges [Abstract]
Repositioning and Other Charges	NOTE 4. Repositioning and Other Charges A summary of repositioning and other charges follows: Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Severance $ 35 $171 $177 $284 Asset impairments 2 46 6 78 Exit costs 4 8 7 28 Adjustments (6) (8) (45) (8) Total net repositioning charge 35 217 145 382 Asbestos related litigation charges, net of insurance 38 43 111 105 Probable and reasonably estimable environmental liabilities 40 309 107 426 Other 1 5 6 8 Total net repositioning and other charges $114 $574 $369 $921 The following table summarizes the pretax distribution of total net repositioning and other charges by income statement classification: Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Cost of products and services sold $100 $523 $308 $829 Selling, general and administrative expenses 14 51 61 92 $114 $574 $369 $921 The following table summarizes the pretax impact of total net repositioning and other charges by segment: Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Aerospace $ - $ 30 $ 32 $ 74 Automation and Control Solutions 22 114 49 152 Specialty Materials 5 37 10 39 Transportation Systems 48 71 161 196 Corporate 39 322 117 460 $114 $574 $369 $921 In the third quarter of 2009, we recognized repositioning charges totaling $41 million primarily for severance costs related to workforce reductions of 816 manufacturing and administrative positions in our Automation and Control Solutions, Transportation Systems and Specialty Materials segments. The workforce reductions primarily relate to the planned downsizing or shutdown of certain manufacturing facilities and adverse market conditions currently being experienced by many of our businesses. In the third quarter of 2008, we recognized repositioning charges totaling $225 million including severance costs of $171 million related to workforce reductions of 3,166 manufacturing and administrative positions principally in our Automation and Control Solutions, Aerospace and Transportation Systems segments. The workforce reductions primarily relate to the planned downsizing or shutdown of certain manufacturing facilities in our Automation and Control Solutions and Aerospace segments and the rationalization of non-manufacturing infrastructure. The repositioning charge also included asset impairments of $46 million principally related to manufacturing plant and equipment in facilities scheduled to close or be downsized and information technology equipment in our Corpora

Other

Other (income) expense
	9 Months Ended Sep. 30, 2009 USD / shares
Other (income) expense [Abstract]
Other (income) expense	NOTE 5. Other (income) expense Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Equity (income)/loss of affiliated companies $ (8) $ (27) $ (23) $ (49) Gain on sale of non-strategic Businesses and assets (15) (623) (15) (635) Interest income (7) (21) (25) (75) Foreign exchange 5 12 32 26 Other (net) (14) (1) 45 3 $ (39) $(660) $ 14 $(730) Other (net) for the nine months ended September 30, 2009 includes an other-than-temporary impairment charge of $62 million recognized in the second quarter of 2009. See Note 11, Financial Instruments and Fair Value Measures for further details. Gain on sale of non-strategic businesses and assets for the three months and nine months ended September 30, 2008 includes a $623 million pre-tax gain related to the sale of our Consumables Solutions business.

Earnings Per Share

Earnings Per Share
	9 Months Ended Sep. 30, 2009 USD / shares
Earnings Per Share [Abstract]
Earnings Per Share	NOTE 6. Earnings Per Share The details of the earnings per share calculations for the three months and nine months ended September 30, 2009 and 2008 are as follows: Three Months Ended September 30, 2009 2008 Assuming Assuming Basic Dilution Basic Dilution Income Net income attributable to Honeywell $ 608 $ 608 $ 719 $ 719 Average shares Average shares outstanding 760.8 760.8 730.9 730.9 Dilutive securities issuable in connection with stock plans - 3.2 - 6.7 Total average shares outstanding 760.8 764.0 730.9 737.6 Earnings per share of common stock Net income attributable to Honeywell $ 0.80 $ 0.80 $ 0.98 $ 0.97 Nine Months Ended September 30, 2009 2008 Assuming Assuming Basic Dilution Basic Dilution Income Net income attributable to Honeywell $1,455 $1,455 $2,085 $2,085 Average shares Average shares outstanding 748.7 748.7 739.4 739.4 Dilutive securities issuable in connection with stock plans - 2.4 - 8.6 Total average shares outstanding 748.7 751.1 739.4 748.0 Earnings per share of common stock Net income attributable to Honeywell $ 1.94 $ 1.94 $ 2.82 $ 2.79 The diluted earnings per share calculations exclude the effect of stock options when the options assumed proceeds exceed the average market price of the common shares during the period. For the three months ended September 30, 2009 and 2008, the number of stock options excluded from the computations were 29.8 and 15.1 million, respectively. For the nine months ended September 30, 2009 and 2008, the number of stock options excluded from the computations were 38.8 and 11.0 million, respectively. These stock options were outstanding at the end of each of the respective periods.

Accounts, Notes and Other Recei

Accounts, Notes and Other Receivables
	9 Months Ended Sep. 30, 2009 USD / shares
Accounts, Notes and Other Receivables [Abstract]
Accounts, Notes and Other Receivables	NOTE 7. Accounts, Notes and Other Receivables September 30, 2009 December 31, 2008 Trade $6,243 $5,893 Other 455 422 6,698 6,315 Less - Allowance for doubtful accounts (234) (186) $6,464 $6,129

Inventories

Inventories
	9 Months Ended Sep. 30, 2009 USD / shares
Inventories [Abstract]
Inventories	NOTE 8. Inventories September 30, 2009 December 31, 2008 Raw materials $1,333 $1,644 Work in process 854 952 Finished products 1,554 1,415 3,741 4,011 Less Progress payments - (3) - Reduction to LIFO cost basis (165) (160) $3,576 $3,848 During the three and nine months ended September 30, 2009, the quantity of inventory valued using the last-in, first-out (LIFO) method in our Specialty Materials segment declined. This reduction resulted in a liquidation of LIFO inventory quantities carried at lower of costs prevailing in prior years as compared with the cost of 2009 purchases, the effect of which decreased cost of products sold by $2 million and $7 million during the three and nine months ended September 30, 2009, respectively.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets, Net
	9 Months Ended Sep. 30, 2009 USD / shares
Goodwill and Other Intangible Assets - Net [Abstract]
Goodwill and Other Intangible Assets - Net	NOTE 9. Goodwill and Other Intangible Assets - Net The change in the carrying amount of goodwill for the nine months ended September 30, 2009 by segment is as follows: Dec. 31, 2008 Acquisitions Divestitures Currency Translation Adjustment September 30, 2009 Aerospace $ 1,882 $ - $ - $ 9 $ 1,891 Automation and Control Solutions 6,638 248 - 55 6,941 Specialty Materials 1,151 10 - 6 1,167 Transportation Systems 514 - - 7 521 $10,185 $ 258 $ - $ 77 $ 10,520 Other intangible assets are comprised of: September 30, 2009 December 31, 2008 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets with determinable lives: Patents and technology $1,061 $ (576) $ 485 $1,030 $ (494) $ 536 Customer relationships 1,363 (262) 1,101 1,250 (175) 1,075 Trademarks 167 (58) 109 164 (50) 114 Other 530 (389) 141 501 (362) 139 3,121 (1,285) 1,836 2,945 (1,081) 1,864 Trademarks with indefinite lives 429 - 429 403 - 403 $3,550 $(1,285) $ 2,265 $3,348 $(1,081) $2,267 Amortization expense related to intangible assets for the nine months ended September 30, 2009 and 2008 was $191 and $166 million, respectively. We completed our annual impairment testing of goodwill and indefinite-lived intangibles as of March 31, 2009 and determined that there was no impairment as of that date.

Long-term Debt and Credit Agree

Long-term Debt and Credit Agreements
	9 Months Ended Sep. 30, 2009 USD / shares
Long-term Debt and Credit Agreements [Abstract]
Long-term Debt and Credit Agreements	NOTE 10. Long-term Debt and Credit Agreements September 30, 2009 December 31, 2008 Floating rate notes due 2009 $ - $ 300 Floating rate notes due 2009 - 500 Zero coupon bonds and money multiplier notes 13.0%-14.26%, due 2009 - 100 Floating rate notes due 2009-2011 - 193 7.50% notes due 2010 1,000 1,000 6-1/8% notes due 2011 500 500 5.625% notes due 2012 400 400 4.25% notes due 2013 3.875% notes due 2014 600 600 600 - 5.40% notes due 2016 400 400 5.30% notes due 2017 400 400 5.30% notes due 2018 5.00% notes due 2019 900 900 900 - Industrial development bond obligations, floating rate maturing at various dates through 2037 48 60 6-5/8% debentures due 2028 216 216 9.065% debentures due 2033 51 51 5.70% notes due 2036 550 550 5.70% notes due 2037 600 600 Other (including capitalized leases), 1.54%-11.00% maturing at various dates through 2017 110 118 7,275 6,888 Less current portion (1,019) (1,023) $ 6,256 $ 5,865 The schedule of principal payments on long term debt is as follows: At September 30, 2009 2009 $ 10 2010 1,018 2011 519 2012 401 2013 605 Thereafter 4,722 7,275 Less-current portion (1,019) $ 6,256 In February 2009, the Company issued $600 million 3.875% Senior Notes due 2014 and $900 million 5.00% Senior Notes due 2019 (collectively, the 2009 Senior Notes). The 2009 Senior Notes are senior unsecured and unsubordinated obligations of Honeywell and rank equally with all of Honeywells existing and future senior unsecured debt and senior to all of Honeywells subordinated debt. The offering resulted in gross proceeds of $1.5 billion, offset by $12 million in discount and issuance costs. We sell interests in designated pools of trade accounts receivables to third parties. In April 2009, we modified the terms of the trade accounts receivable program to permit the repurchase of receivables from the third parties at our discretion. This modification will provide additional flexibility in the management of the receivable portfolio and will also require the receivables in the program to remain on the Company balance sheet. As a result, $500 million of program receivables were reflected as Accounts, notes and other receivables with a corresponding amount recorded as Short-term borrowings in the Consolidated Balance Sheet. As of September 30, 2009, these short-term borrowings were $200 million. This modification also results in the program costs being recognized as Interest and other financial charges in the Consolidated Statement of Operations on a prospective basis.

Financial Instruments and Fair

Financial Instruments and Fair Value Measures
	9 Months Ended Sep. 30, 2009 USD / shares
Financial Instruments and Fair Value Measures [Abstract]
Financial Instruments and Fair Value Measures	NOTE 11. Financial Instruments and Fair Value Measures Credit and Market RiskFinancial instruments, including derivatives, expose us to counterparty credit risk for nonperformance and to market risk related to changes in interest and currency exchange rates and commodity prices. We manage our exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties, and procedures to monitor concentrations of credit risk. Our counterparties in derivative transactions are substantial investment and commercial banks with significant experience using such derivative instruments. We monitor the impact of market risk on the fair value and cash flows of our derivative and other financial instruments considering reasonably possible changes in interest rates, currency exchange rates and commodity prices and restrict the use of derivative financial instruments to hedging activities. We continually monitor the creditworthiness of our customers to which we grant credit terms in the normal course of business. The terms and conditions of our credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer. Our sales are not materially dependent on a single customer or a small group of customers. Foreign Currency Risk ManagementWe conduct our business on a multinational basis in a wide variety of foreign currencies. Our exposure to market risk for changes in foreign currency exchange rates arises from international financing activities between subsidiaries, foreign currency denominated monetary assets and liabilities and transactions arising from international trade. Our objective is to preserve the economic value of non-functional currency denominated cash flows. We attempt to hedge transaction exposures with natural offsets to the fullest extent possible and, once these opportunities have been exhausted, through foreign currency exchange forward and option contracts with third parties. We hedge monetary assets and liabilities denominated in non-functional currencies. Prior to conversion into U.S. dollars, these assets and liabilities are remeasured at spot exchange rates in effect on the balance sheet date. The effects of changes in spot rates are recognized in earnings and included in Other (Income) Expense. We partially hedge forecasted sales and purchases, which predominantly occur in the next twelve months and are denominated in non-functional currencies, with currency forward contracts. Changes in the forecasted non-functional currency cash flows due to movements in exchange rates are substantially offset by changes in the fair value of the currency forward contracts designated as hedges. Market value gains and losses on these contracts are recognized in earnings when the hedged transaction is recognized. Open foreign currency exchange forward contracts mature predominantly in the next twelve months. At September 30, 2009, we had contracts with notional amounts of $2,843 million to exchange foreign currencies, principally the US dollar, Euro, British pound, Canadian dollar, Hong Kong dollar, Mexican peso, Swiss franc, Czech koruna, Chinese renminbi,

Comprehensive Income

Comprehensive Income(Loss)
	9 Months Ended Sep. 30, 2009 USD / shares
Comprehensive Income/(Loss) [abstract]
Comprehensive Income/(Loss)	NOTE 12. Comprehensive Income/(Loss) Comprehensive income/(loss) consists of the following: Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008 Net income $619 $723 $ 1,478 $2,099 Foreign exchange translation adjustments 198 (314) 337 (137) Pension and postretirement benefit adjustments 26 36 109 61 Change in fair value of effective cash flow hedges (3) (18) 21 (20) Change in unrealized losses on available for sale investments (1) 40 (24) 91 (24) 880 403 2,036 1,979 Comprehensive Income attributable to noncontrolling interest(2) (11) (4) (23) (14) Comprehensive Income/(Loss) attributable to Honeywell $869 $399 $2,013 $1,965 (1) Includes reclassification adjustment for losses included in net income. (2) Comprehensive Income/(Loss) attributable to noncontrolling interest consisted predominately of net income. Changes in Noncontrolling interest consist of the following: December 31, 2008 $82 Comprehensive Income/(Loss)attributable to noncontrolling interest 23 Capital contribution to noncontrolling shareholders 4 Dividends paid (4) Cumulative translation adjustments (1) Other (1) September 30, 2009 $103 In the first nine months of 2009 there were no increases or decreases to Honeywell additional paid in capital for purchases or sales of existing noncontrolling interests.

Segment Financial Data

Segment Financial Data
	9 Months Ended Sep. 30, 2009 USD / shares
Segment Financial Data [Abstract]
Segment Financial Data	NOTE 13. Segment Financial Data Honeywells senior management evaluates segment performance based on segment profit. Segment profit is measured as business unit income (loss) before taxes excluding general corporate unallocated expense, other income (expense), interest and other financial charges, pension and other postretirement benefits (expense), stock compensation expense, repositioning and other charges and accounting changes. Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Net Sales Aerospace $2,622 $3,110 $ 8,100 $ 9,421 Automation and Control Solutions 3,188 3,688 9,202 10,484 Specialty Materials 1,015 1,321 3,117 4,180 Transportation Systems 875 1,156 2,417 3,759 Corporate - - - - $7,700 $9,275 $22,836 $27,844 Segment Profit Aerospace $ 455 $ 516 $ 1,397 $ 1,681 Automation and Control Solutions 431 430 1,088 1,148 Specialty Materials 155 158 430 609 Transportation Systems 62 102 84 400 Corporate (43) (48) (133) (153) Total Segment Profit 1,060 1,158 2,866 3,685 Other income (expense) (A) 31 633 (37) 681 Interest and other financial charges (110) (112) (350) (342) Stock compensation expense (B) (18) (31) (95) (107) Pension and other postretirement expense (B) (51) (36) (48) (89) Repositioning and other charges (B) (114) (574) (369) (921) Income before taxes $ 798 $1,038 $ 1,967 $ 2,907 (A) Equity income/(loss) of affiliated companies is included in Segment Profit. (B) Amounts included in cost of products and services sold and selling, general and administrative expenses.

Pension and Other Postretiremen

Pension and Other Postretirement Benefits
	9 Months Ended Sep. 30, 2009 USD / shares
Pension and Other Postretirement Benefits [Abstract]
Pension and Other Postretirement Benefits	NOTE 14. Pension and Other Postretirement Benefits Net periodic pension and other postretirement benefits costs for our significant defined benefit plans include the following components: Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008 Pension Benefits Service cost $ 56 $ 59 $ 167 $ 193 Interest cost 251 239 743 763 Expected return on plan assets (334) (336) (988) (1,063) Amortization of prior service cost 7 8 19 22 Recognition of actuarial losses 40 12 121 36 Settlements and curtailments 1 11 1 13 $ 21 $ (7) $ 63 $ (36) Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008 Other Postretirement Benefits Service cost $ 2 $ 4 $ 5 $ 11 Interest cost 26 32 78 98 Amortization of prior service (credit) (11) (10) (33) (30) Recognition of actuarial losses 3 9 10 26 Settlements and curtailments - - (98) - $ 20 $ 35 $(38) $ 105 In March 2009, June 2009 and July 2009 we made $200, $200 and $340 million, respectively, of voluntary contributions of Honeywell common stock to our U.S. pension plans to improve the funded status of our plans. On May 1, 2009, Honeywell amended the U.S. retiree medical plan eliminating the subsidy for non-union employees who retire after September 1, 2009. Employees already retired or who retired on or before September 1, 2009 will not be affected by this change. This plan amendment reduced the accumulated postretirement benefit obligation by $180 million representing the elimination of benefits attributable to years of service already rendered by active non-union employees who are not eligible to retire and those eligible non-union employees who are assumed not to retire prior to September 1, 2009. This reduction in the accumulated postretirement benefit obligation will be recognized as part of net periodic postretirement benefit cost over the average future service period to full eligibility of the remaining active union employees still eligible for a retiree medical subsidy. This plan amendment also resulted in a curtailment gain of $98 million in the second quarter of 2009 which was included as part of net periodic postretirement benefit cost. The curtailment gain represents the recognition of previously unrecognized negative prior service costs attributable to the future years of service of the employee group for which future accrual of benefits has been eliminated.

Commitments and Contingencies

Commitments and Contingencies
	9 Months Ended Sep. 30, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	NOTE 15. Commitments and Contingencies 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. It is our policy 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, regulatory 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 range of reasonably possible environmental loss in excess of our recorded liabilities. We expect to fund expenditures for these matters from operating cash flow. The timing of cash expenditures depends on a number of factors, including the timing of remedial investigations and feasibility studies, the timing of litigation and settlements of remediation liability, personal injury and property damage claims, regulatory approval of cleanup projects, remedial techniques to be utilized and agreements with other parties. The following table summarizes information concerning our recorded liabilities for environmental costs: Nine Months Ended September 30, 2009 Beginning of period $ 946 Accruals for environmental matters deemed probable and reasonably estimable 112 Environmental liability payments (201) End of period $ 857 Environmental liabilities are included in the following balance sheet accounts: September 30, 2009 December 31, 2008 Accrued liabilities $315 $343 Other liabilities 542 603 $857 $946 Although we do not currently possess sufficient information to reasonably estimate the amounts of liabi