Honeywell International (HON) 10-Q 23 Apr 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
In Billions, except Share data	3 Months Ended Mar. 31, 2010	Jun. 30, 2009
Entity Registrant Name	HONEYWELL INTERNATIONAL INC
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		23.2
Entity Common Stock, Shares Outstanding	766,182,091
Entity Central Index Key	0000773840

Consolidated Statement of Opera

Consolidated Statement of Operations (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Product sales	$6,047	$5,818
Service sales	1,729	1,752
Net sales	7,776	7,570
Costs, expenses and other
Cost of products sold	4,787	4,608
Cost of services sold	1,195	1,148
Cost of goods and services sold	5,982	5,756
Selling, general and administrative expenses	1,136	1,152
Other (income) expense	(2)	2
Interest and other financial charges	107	117
Cost and operating expenses	7,223	7,027
Income before taxes	553	543
Tax expense	160	144
Net income	393	399
Less: Net income attributable to the noncontrolling interest	7	2
Net income attributable to Honeywell	$386	$397
Earnings per share of common stock- basic	0.5	0.54
Earnings per share of common stock- assuming dilution	0.5	0.54
Cash dividends per share of common stock	0.3025	0.3025

Consolidated Balance Sheet

Consolidated Balance Sheet (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
ASSETS
Cash and cash equivalents	$2,851	$2,801
Accounts, notes and other receivables	6,184	6,274
Inventories	3,568	3,446
Deferred income taxes	1,024	1,034
Investments and other current assets	706	381
Total current assets	14,333	13,936
Investments and long-term receivables	586	579
Property, plant and equipment - net	4,697	4,847
Goodwill	10,362	10,494
Other intangible assets - net	2,114	2,174
Insurance recoveries for asbestos related liabilities	936	941
Deferred income taxes	1,973	2,017
Other assets	1,025	1,016
Total assets	36,026	36,004
LIABILITIES
Accounts payable	3,553	3,633
Short-term borrowings	44	45
Commercial Paper	1,248	298
Current maturities of long-term debt	23	1,018
Accrued liabilities	6,233	6,153
Total current liabilities	11,101	11,147
Long-term debt	6,246	6,246
Deferred income taxes	570	542
Postretirement benefit obligations other than pensions	1,547	1,594
Asbestos related liabilities	1,049	1,040
Other liabilities	6,409	6,481
SHAREOWNERS' EQUITY
Capital - common stock issued	958	958
Capital - additional paid-in capital	3,859	3,823
Common stock held in treasury, at cost	(8,922)	(8,995)
Accumulated other comprehensive income (loss)	(4,543)	(4,429)
Retained earnings	17,635	17,487
Total Honeywell shareowners' equity	8,987	8,844
Noncontrolling interest	117	110
Total shareowners' equity	9,104	8,954
Total liabilities and shareowners' equity	$36,026	$36,004

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash flows from operating activities:
Net income attributable to Honeywell	$386	$397
Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activities:
Depreciation and amortization	233	234
Repositioning and other charges	142	111
Net payments for repositioning and other charges	(119)	(148)
Pension and other postretirement expense	182	55
Pension and other postretirement payments	(36)	(47)
Stock compensation expense	50	42
Deferred income taxes	26	272
Excess tax benefits from share based payment arrangements	(2)	0
Other	(96)	(142)
Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
Accounts, notes and other receivables	90	461
Inventories	(122)	49
Other current assets	(28)	(31)
Accounts payable	(80)	(629)
Accrued liabilities	117	(283)
Net cash provided by operating activities	743	341
Cash flows from investing activities:
Expenditures for property, plant and equipment	(70)	(109)
Proceeds from disposals of property, plant and equipment	1	8
Increase in investments	(296)	0
Decrease in investments	0	1
Cash paid for acquisitions, net of cash acquired	0	(20)
Other	(16)	(6)
Net cash used for investing activities	(381)	(126)
Cash flows from financing activities:
Net increase/(decrease) in commercial paper	950	(931)
Net increase/(decrease) in short-term borrowings	(1)	6
Proceeds from issuance of common stock	32	4
Proceeds from issuance of long-term debt	0	1,488
Payments of long-term debt	(1,001)	(493)
Excess tax benefits from share based payment arrangements	2	0
Cash dividends paid	(231)	(224)
Net cash used for financing activities	(249)	(150)
Effect of foreign exchange rate changes on cash and cash equivalents	(63)	(78)
Net increase/(decrease) in cash and cash equivalents	50	(13)
Cash and cash equivalents at beginning of period	2,801	2,065
Cash and cash equivalents at end of period	$2,851	$2,052

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
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 March 31, 2010 and the results of operations for the three months ended March 31, 2010 and 2009 and cash flows for the three months ended March 31, 2010 and 2009. The results of operations for the three month period ended March 31, 2010 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year. We have evaluated subsequent events through the date of issuance of our consolidated financial statements. 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 month periods ended March 31, 2010 and 2009 were April 3, 2010 and April 4, 2009, respectively. The financial information as of March 31, 2010 should be read in conjunction with the financial statements for the year ended December 31, 2009 contained in our Form 10-K filed on February 12, 2010. Certain prior year amounts have been reclassified to conform to current year presentation.

Recent Accounting Pronouncement

Recent Accounting Pronouncements
	3 Months Ended Mar. 31, 2010
Recent Accounting Pronouncements	NOTE 2. Recent Accounting Pronouncements Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASUs) to the FASBs Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations. In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for transfers of financial assets. The guidance requires additional disclosures for transfers of financial assets and changes the requirements for derecognizing financial assets. The guidance was effective for fiscal years beginning after November 15, 2009. The implementation of this standard did not have a material impact on our consolidated financial position and results of operations. In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for the consolidation of variable interest entities. The guidance affects the overall consolidation analysis and requires enhanced disclosures on involvement with variable interest entities. The guidance was effective for fiscal years beginning after November 15, 2009. The implementation of this standard did not have a material impact on our consolidated financial position and results of operations. In October 2009, the FASB issued amendments to the accounting and disclosure for revenue recognition. These amendments, effective for fiscal years beginning on or after June 15, 2010 (early adoption is permitted), modify the criteria for recognizing revenue in multiple element arrangements and the scope of what constitutes a non-software deliverable. The Company has elected to early adopt this guidance, on a prospective basis for applicable transactions originating or materially modified after January 1, 2010. The implementation of this amended accounting guidance did not have a material impact on our consolidated financial position and results of operations in the period of adoption. Adoption impacts in future periods will vary based upon the nature and volume of new or materially modified transactions but are not expected to have a significant impact on sales.

Repositioning and Other Charges

Repositioning and Other Charges
	3 Months Ended Mar. 31, 2010
Repositioning and Other Charges	NOTE 3. Repositioning and Other Charges A summary of repositioning and other charges follows: Three Months Ended March 31, 2010 2009 Severance $ 33 $ 62 Asset impairments 8 2 Exit costs 4 1 Adjustments (5) (21) Total net repositioning charge 40 44 Asbestos related litigation charges, net of insurance 38 36 Probable and reasonably estimable environmental liabilities 46 31 Other 18 - Total net repositioning and other charges $ 142 $ 111 The following table summarizes the pretax distribution of total net repositioning and other charges by income statement classification: Three Months Ended March 31, 2010 2009 Cost of products and services sold $ 139 $ 94 Selling, general and administrative expenses 3 17 $ 142 $ 111 The following table summarizes the pretax impact of total net repositioning and other charges by segment: Three Months Ended March 31, 2010 2009 Aerospace $ - $ (2) Automation and Control Solutions 24 23 Specialty Materials 11 4 Transportation Systems 59 51 Corporate 48 35 $ 142 $ 111 In the first quarter of 2010 we recognized a net repositioning charge of $40 million including severance costs of $33 million related to workforce reductions of 617 manufacturing and administrative positions primarily in our Automation and Control Solutions and Transportation Systems segments. The workforce reductions were primarily related to the planned shutdown of certain manufacturing facilities in our Automation and Control Solutions and Transportation Systems segments. The repositioning charge also included asset impairments of $8 million principally related to manufacturing plant and equipment in facilities scheduled to close. In the first quarter of 2009, we recognized repositioning charges totaling $65 million primarily for severance costs related to workforce reductions of 1,309 manufacturing and administrative positions across all of our segments. The workforce reductions were primarily related to the adverse market conditions experienced by many of our businesses as well as cost savings actions taken in connection with our ongoing functional transformation initiative. Also, $21 million of previously established accruals for severance, mainly at our Aerospace, Automation and Control Solutions and Transportation Systems segments, were returned to income in the first quarter of 2009 due to fewer employee separations than originally planned associated with prior severance programs and changes in the scope of previously announced repositioning actions. The following table summarizes the status of our total repositioning reserves: Severance Costs Asset Impairments Exit Costs Total Balance at December 31, 2009 $303 $ - $37 $340 2010 charges 33 8 4 45 2010 usage (54) (8) (2)

Other

Other (Income) Expense
	3 Months Ended Mar. 31, 2010
Other (Income) Expense	NOTE 4. Other (income) expense. Three Months Ended March 31, 2010 2009 Equity (income)/loss of affiliated companies $ (4) $ (6) Interest income (9) (12) Foreign exchange 11 22 Other, net - (2) $ (2) $ 2

Earnings Per Share

Earnings Per Share
	3 Months Ended Mar. 31, 2010
Earnings Per Share	NOTE 5. Earnings Per Share The details of the earnings per share calculations for the three months ended March 31, 2010 and 2009 are as follows: Basic 2010 2009 Net income attributable to Honeywell $ 386 $ 397 Weighted average number of common shares outstanding 765.7 737.7 Earnings per share of common stock $ 0.50 $ 0.54 Assuming Dilution 2010 2009 Net income attributable to Honeywell $ 386 $ 397 Average Shares Weighted average number of common shares outstanding 765.7 737.7 Dilutive securities issuable in connection with stock plans 6.0 1.6 Total weighted average number of common shares outstanding 771.7 739.3 Earnings per share of common stock $ 0.50 $ 0.54 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 March 31, 2010 and 2009, the number of stock options excluded from the computations were 18.4 and 41.2 million, respectively. These stock options were outstanding at the end of each of the respective periods.

Accounts Notes and Other Receiv

Accounts Notes and Other Receivables
	3 Months Ended Mar. 31, 2010
Accounts, Notes and Other Receivables	NOTE 6. Accounts, Notes and Other Receivables March 31, 2010 December 31, 2009 Trade $6,060 $6,183 Other 356 326 6,416 6,509 Less - Allowance for doubtful accounts (232) (235) $6,184 $6,274

Inventories

Inventories
	3 Months Ended Mar. 31, 2010
Inventories	NOTE 7. Inventories March 31, 2010 December 31, 2009 Raw materials $1,030 $ 988 Work in process 820 796 Finished products 1,874 1,823 3,724 3,607 Less Progress payments 1 - - Reduction to LIFO cost basis (157) (161) $3,568 $3,446

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets - Net
	3 Months Ended Mar. 31, 2010
Goodwill and Other Intangible Assets - Net	NOTE 8. Goodwill and Other Intangible Assets - Net The change in the carrying amount of goodwill for the three months ended March 31, 2010 by segment is as follows: Dec. 31, 2009 Acquisitions Divestitures Currency Translation Adjustment Mar, 31, 2010 Aerospace $ 1,891 $ - $ - $(11) $ 1,880 Automation and Control Solutions 6,918 8 - (115) 6,811 Specialty Materials 1,164 - - (6) 1,158 Transportation Systems 521 - - (8) 513 $10,494 $ 8 $ - $(140) $10,362 Other intangible assets are comprised of: March 31, 2010 December 31, 2009 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets with determinable lives: Patents and technology $1,055 $ (619) $ 436 $1,053 $ (595) $ 458 Customer relationships 1,356 (311) 1,045 1,359 (282) 1,077 Trademarks 173 (67) 106 164 (62) 102 Other 482 (384) 98 514 (406) 108 3,066 (1,381) 1,685 3,090 (1,345) 1,745 Trademarks with indefinite lives 429 - 429 429 - 429 $3,495 $(1,381) $2,114 $3,519 $(1,345) $2,174 Amortization expense related to intangible assets for the three months ended March 31, 2010 and 2009 was $60 and $61 million, respectively. We completed our annual impairment testing of goodwill and indefinite-lived intangibles as of March 31, 2010 and determined that there was no impairment as of that date.

Long-term Debt and Credit Agree

Long-term Debt and Credit Agreements
	3 Months Ended Mar. 31, 2010
Long-term Debt and Credit Agreements	NOTE 9. Long-term Debt and Credit Agreements March 31, 2010 December 31, 2009 7.50% notes due 2010 - 1,000 6.125% notes due 2011 500 500 5.625% notes due 2012 400 400 4.25% notes due 2013 3.875% notes due 2014 600 600 600 600 5.40% notes due 2016 400 400 5.30% notes due 2017 400 400 5.30% notes due 2018 5.00% notes due 2019 900 900 900 900 Industrial development bond obligations, floating rate maturing at various dates through 2037 47 47 6.625% 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), 0.61%-15.5% maturing at various dates through 2017 105 100 6,269 7,264 Less-current portion (23) (1,018) $ 6,246 $ 6,246 The schedule of principal payments on long term debt is as follows: At March 31, 2010 2010 $17 2011 520 2012 406 2013 605 2014 606 Thereafter 4,115 6,269 Less-current portion (23) $ 6,246 In the first quarter of 2010, the Company repaid $1,000 million of its 7.50% notes. The repayment was funded with the issuance of commercial paper and cash provided by operating activities. We sell interests in designated pools of trade accounts receivables to third parties. As of March 31, 2010 and December 31, 2009 none of the receivables in the designated pools had been sold to third parties. The terms of the trade accounts receivable program permit the repurchase of receivables from the third parties at our discretion. As a result, program receivables remain on the Companys balance sheet, reflected as Accounts, notes and other receivables with a corresponding amount recorded as either Short-term borrowings or Long-term debt. Program costs are recognized as Interest and other financial charges in the Consolidated Statement of Operations.

Financial Instruments and Fair

Financial Instruments and Fair Value Measures
	3 Months Ended Mar. 31, 2010
Financial Instruments and Fair Value Measures	NOTE 10. 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 March 31, 2010 and December 31, 2009 we had contracts with notional amounts of $3,817 and $2,959 million, respectively, to exchange foreign currencies, principally the U.S. dollar, Euro, British pound, Canadian dollar, Hong Kong dollar, Mexican peso,

Comprehensive Income/

Comprehensive Income/(Loss)
	3 Months Ended Mar. 31, 2010
Comprehensive Income/(Loss)	NOTE 11. Comprehensive Income/(Loss) Comprehensive income/(loss) consists of the following: Three Months Ended March 31, 2010 2009 Net income $ 393 $ 397 Foreign exchange translation adjustment (284) (250) Pensions and other post retirement benefit adjustments 114 26 Changes in fair value of available for sale investments 49 (22) Changes in fair value of effective cash flow hedges 7 6 Total comprehensive income 279 157 Comprehensive income attributable to noncontrolling interest (1) (7) (2) Comprehensive income (loss) attributable to Honeywell $ 272 $ 155 (1) Comprehensive Income/(Loss) attributable to noncontrolling interest consisted predominately of net income. In the first quarter of 2010 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
	3 Months Ended Mar. 31, 2010
Segment Financial Data	NOTE 12. 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 March 31, 2010 2009 Net Sales Aerospace $ 2,506 $2,759 Automation and Control Solutions 3,124 3,001 Specialty Materials 1,139 1,054 Transportation Systems 1,007 756 Corporate - - $ 7,776 $7,570 Segment Profit Aerospace $ 413 $ 488 Automation and Control Solutions 386 311 Specialty Materials 170 125 Transportation Systems 96 (3) Corporate (29) (45) Total Segment Profit 1,036 876 Other income/(expense) (A) (2) (8) Interest and other financial charges (107) (117) Stock compensation expense (B) (50) (42) Pension (expense) (B) (200) (26) Other postretirement income/(expense) (B) 18 (29) Repositioning and other charges (B) (142) (111) Income from continuing operations before taxes $ 553 $ 543 (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
	3 Months Ended Mar. 31, 2010
Pension and Other Postretirement Benefits	NOTE 13. 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 March 31, 2010 2009 Pension Benefits Service cost $ 73 $ 57 Interest cost 247 242 Expected return on plan assets (311) (321) Amortization of prior service cost 5 7 Recognition of actuarial losses 176 36 Settlements and curtailments 4 - $ 194 $ 21 Three Months Ended March 31, 2010 2009 Other Postretirement Benefits Service cost $ 1 $ 3 Interest cost 24 29 Amortization of prior service (credit) (10) (10) Recognition of actuarial losses 4 7 Settlements and curtailments (37) - $ (18) $ 29 On February 1, 2010, in connection with a new collective bargaining agreement reached with one of its union groups, Honeywell amended its U.S. retiree medical plan eliminating the subsidy for those union employees who retire after February 1, 2013. This plan amendment reduced the accumulated postretirement benefit obligation by $39 million which 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 $37 million in the first quarter of 2010 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 union group for which future accrual of benefits has been eliminated. We recorded a one-time, non-cash charge of $13 million related to income taxes in the first quarter of 2010, resulting from the March 2010 enactment of the Patient Protection and Affordable Care Act, including modifications made in the Health Care and Education Reconciliation Act of 2010. The charge results from a change in the tax treatment of the Medicare Part D program. In April 2010, Honeywell contributed marketable securities valued at $100 million to one of its non-U.S. pension plans.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Commitments and Contingencies (Disclosure)	NOTE 14. 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: Three Months Ended March 31, 2010 Beginning of period $ 779 Accruals for environmental matters deemed probable and reasonably estimable 50 Environmental liability payments (39) Other 11 End of period $ 801 Environmental liabilities are included in the following balance sheet accounts: March 31, 2010 December 31, 2009 Accrued liabilities $318 $314 Other liabilities 483 465 $801 $779 Although we do not currently possess sufficient information to reasonably estimate the amount