Enterprise Risk Management at Honeywell Intl
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Case Details:
Case Code : ERMT-020
Case Length : 13 Pages
Period : 2003
Pub Date : 2003
Teaching Note :Not Available
Organization : Honeywell International
Industry : Aerospace
Countries : Global
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Excerpts Contd...
The Integrated Risk Management Program Contd...
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Regulatory Risks
Honeywell benefited from tax incentives, known as the Foreign Sales Corporation
program (FSC) and its successor legislation called the Extraterritorial Income
Exclusion Act (ETI Act) . The WTO had ruled these incentives as illegal.
President Bush had stated that the U.S. would bring its tax laws into compliance
with the WTO ruling, but the administration and Congress had not decided on a
solution to this issue. In July 2002, Representative Bill Thomas, Chairman of
the House Ways and Means Committee, introduced the American Competitiveness and
Corporate Accountability Act of 2002...
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Intellectual Property Risks
Honeywell owned a large number of patents, patent applications and trademarks
acquired over a period of many years. From time to time, new patents and
trademarks were obtained, and patent and trademark licenses and rights were
acquired from others...
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Litigation Risks
Honeywell was subject to a number of lawsuits, investigations and claims. These
contingencies related to product liabilities, including asbestos, commercial
transactions, government contracts and environment, health and safety matters.
Honeywell recognized a liability for any contingency that might occur and could
be reasonably estimated. Honeywell regularly assessed the likelihood of any
adverse judgments or outcomes as well as potential ranges of probable losses,
and recognized a liability, if any, for these contingencies based on a careful
analysis of each individual issue with the assistance of outside legal counsel
and other experts... |
Financial Risks
Market Risks
Honeywell was exposed to changes in interest and foreign currency exchange rates
and commodity prices. Honeywell minimized its risks due to interest and foreign
currency exchange rate and commodity price fluctuations through a combination of
operating and financing activities and derivatives. Honeywell did not use
derivative financial instruments for trading or other speculative purposes. It
also did not use leveraged derivatives...
Exhibits
Exhibit I: Honeywell Inc Business Segment Information
Exhibit II: Honeywell Inc Geographic Areas - Financial Information
Exhibit III: Honeywell Inc Repositioning, Business Impairment and Litigation
Charges
Exhibit IV: Honeywell Inc Insurance Recoveries
Exhibit V: Honeywell Inc Legal and Impairment Charges
Exhibit VI: Honeywell Inc Sensitivity Analysis
Exhibit VII: Honeywell Inc Financial Highlights
Exhibit VIII: Honeywell Inc Results of Operations
Exhibit IX: Honeywell Inc Consolidated Balance Sheet
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