Honeywell 2014 Annual Report Download - page 85

Download and view the complete annual report

Please find page 85 of the 2014 Honeywell annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 101

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101

equity, debt, real estate and hedge funds and direct private investments are valued at estimated fair
value based on quarterly financial information received from the investment advisor and/or general
partner. Investments in real estate properties are valued on a quarterly basis using the income
approach. Valuation estimates are periodically supplemented by third party appraisals.
Our general funding policy for qualified defined benefit pension plans is to contribute amounts at
least sufficient to satisfy regulatory funding standards. In 2014, 2013 and 2012, we were not required
to make contributions to our U.S. pension plans and no contributions were made in 2014 and 2013. In
2012 we made voluntary contributions of $792 million to our U.S. pension plans primarily to improve
the funded status. We are not required to make any contributions to our U.S. pension plans in 2015. In
2014, contributions of $160 million were made to our non-U.S. pension plans to satisfy regulatory
funding requirements. In 2015, we expect to make contributions of cash and/or marketable securities of
approximately $140 million to our non-U.S. pension plans to satisfy regulatory funding standards.
Contributions for both our U.S. and non-U.S. pension plans do not reflect benefits paid directly from
Company assets.
Benefit payments, including amounts to be paid from Company assets, and reflecting expected
future service, as appropriate, are expected to be paid as follows:
U.S. Plans Non-U.S. Plans
2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,133 $ 196
2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,104 200
2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,103 205
2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,117 211
2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,132 217
2020-2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,799 1,187
Other Postretirement Benefits
2014 2013
December 31,
Assumed health care cost trend rate:
Health care cost trend rate assumed for next year . . . . . . . . . . . . . . . . . . . . . 7.00% 7.00%
Rate that the cost trend rate gradually declines to. . . . . . . . . . . . . . . . . . . . . . 5.00% 5.00%
Year that the rate reaches the rate it is assumed to remain at. . . . . . . . . . 2023 2019
The assumed health care cost trend rate has a significant effect on the amounts reported. A one-
percentage-point change in the assumed health care cost trend rate would have the following effects:
Increase Decrease
1 percentage point
Effect on total of service and interest cost components . . . . . . . . . . . . . . . . $ 2 $ (2)
Effect on postretirement benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $73 $(49)
Benefit payments reflecting expected future service, as appropriate, are expected to be paid as
follows:
Without Impact of
Medicare Subsidy
Net of
Medicare Subsidy
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $119 $111
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 99
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 94
2018................................................. 97 90
2019................................................. 92 85
2020-2024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363 329
76
HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)