Honeywell 2015 Annual Report Download - page 12

We are also subject to government investigations of business practices and compliance with government procurement
regulations. If, as a result of any such investigation or other government investigations (including violations of certain
environmental, employment or export laws), Honeywell or one of its businesses were found to have violated applicable law, it
could be suspended from bidding on or receiving awards of new government contracts, suspended from contract
performance pending the completion of legal proceedings and/or have its export privileges suspended.
Our operations and the prior operations of predecessor companies expose us to the risk of material environmental
liabilities.
Mainly because of past operations and operations of predecessor companies, we are subject to potentially material
liabilities related to the remediation of environmental hazards and to claims of personal injuries or property damages that
may be caused by hazardous substance releases and exposures. We continue to incur remedial response and voluntary
clean-up 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. Various federal, state, local and foreign
governments regulate the discharge of materials into the environment and can impose substantial fines and criminal
sanctions for violations, and require installation of costly equipment or operational changes to limit emissions and/or
decrease the likelihood of accidental hazardous substance releases. In addition, changes in laws, regulations and
enforcement of policies, the discovery of previously unknown contamination or new technology or information related to
individual sites, the establishment of stricter state or federal toxicity standards with respect to certain contaminants, or the
imposition of new clean-up requirements or remedial techniques could require us to incur additional costs in the future that
would have a negative effect on our financial condition or results of operations.
Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information,
and adversely impact our reputation and results of operations.
Global cybersecurity threats and incidents can range from uncoordinated individual attempts to gain unauthorized
access to information technology (IT) systems to sophisticated and targeted measures known as advanced persistent
threats, directed at the Company, its products, its customers and/or its third party service providers including cloud
providers. Our customers, including the U.S. government, are increasingly requiring cybersecurity protections and
mandating cybersecurity standards in our products and we may incur additional costs to comply with such demands. While
we have experienced, and expect to continue to experience, these types of threats and incidents, none of them to date have
been material to the Company. We seek to deploy comprehensive measures to deter, prevent, detect, respond and mitigate
these threats (including access controls, data encryption, vulnerability assessments, product software designs which we
believe are less susceptible to cyber attacks, continuous monitoring of our IT networks and systems and maintenance of
backup and protective systems. Despite these efforts, cybersecurity incidents, depending on their nature and scope, could
potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or
proprietary information (our own or that of third parties) and the disruption of business operations. Cybersecurity incidents
aimed at the software imbedded in our products could lead to third party claims that our product failures have caused a
similar range of damages to our customers, and this risk is enhanced by the increasingly connected nature of our products.
The potential consequences of a material cybersecurity incident include reputational damage, litigation with third parties,
fines levied by the Federal Trade Commission, diminution in the value of our investment in research, development and
engineering, and increased cybersecurity protection and remediation costs, which in turn could adversely affect our
competitiveness and results of operations.
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