Honeywell International Inc. (HON) | Property, Plant and Equipment

Property, Plant and Equipment Accounting Policy

Property, plant and equipment are recorded at cost, including any asset retirement obligations, less accumulated depreciation. For financial reporting, the straight-line method of depreciation is used over the estimated useful lives of 10 to 50 years for buildings and improvements and 2 to 16 years for machinery and equipment. Recognition of the fair value of obligations associated with the retirement of tangible long-lived assets is required when there is a legal obligation to incur such costs. Upon initial recognition of a liability, the cost is capitalized as part of the related long-lived asset and depreciated over the corresponding asset's useful life.

Source: Honeywell International Inc., Annual Report

Property, Plant and Equipment Disclosure

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Honeywell International Inc., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

		Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
	Land and improvements
	Machinery and equipment
	Buildings and improvements
	Construction in progress
	Property, plant and equipment, gross
	Accumulated depreciation
	Property, plant and equipment, net

Source: Based on data from Honeywell International Inc. Annual Reports

Item	Description	The company
Land and improvements	Real estate assets held for productive use and depreciable assets that are an addition or improvement to real estate held for productive use.	Honeywell International Inc.'s land and improvements declined from 2010 to 2011 and from 2011 to 2012.
Machinery and equipment	Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services.	Honeywell International Inc.'s machinery and equipment declined from 2010 to 2011 but then increased from 2011 to 2012 not reaching 2010 level.
Buildings and improvements	Carrying amount as of the balance sheet date of long-lived, depreciable assets that include building structures held for productive use including any addition, improvement, or renovation to the structure, such as interior masonry, interior flooring, electrical, and plumbing.	Honeywell International Inc.'s buildings and improvements increased from 2010 to 2011 and from 2011 to 2012.
Construction in progress	Carrying amount at the balance sheet date of long-lived asset under construction that include construction costs to date on capital projects that have not been completed and assets being constructed that are not ready to be placed into service.	Honeywell International Inc.'s construction in progress increased from 2010 to 2011 and from 2011 to 2012.
Property, plant and equipment, gross	Carrying amount at the balance sheet date for long-lived physical assets used in the normal conduct of business and not intended for resale. This can include land, physical structures, machinery, vehicles, furniture, computer equipment, construction in progress, and similar items. Amount does not include depreciation.	Honeywell International Inc.'s property, plant and equipment, gross declined from 2010 to 2011 but then increased from 2011 to 2012 exceeding 2010 level.
Property, plant and equipment, net	Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment.	Honeywell International Inc.'s property, plant and equipment, net declined from 2010 to 2011 but then increased from 2011 to 2012 exceeding 2010 level.

Property, Plant and Equipment Ratios (Summary)

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Honeywell International Inc., Property, Plant and Equipment Ratios

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Average age	%	%	%	%	%
Estimated total useful life (years)
Estimated age, time elapsed since purchase (years)
Estimated remaining life (years)

Ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient.	Honeywell International Inc.'s average age of depreciable property, plant and equipment improved from 2010 to 2011 and from 2011 to 2012.
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors.	Honeywell International Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2010 to 2011 and from 2011 to 2012.
Estimated time elapsed since purchase	The approximate age in years of a company's fixed assets. Useful for comparison purposes.	Honeywell International Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2010 to 2011 and from 2011 to 2012.
Estimated remaining life		Honeywell International Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2010 to 2011 and from 2011 to 2012.

Average Age

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	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Accumulated depreciation
Property, plant and equipment, gross
Land and improvements
Ratio
Average age¹	%	%	%	%	%

2012 Calculations

¹ Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, gross – Land and improvements)
= 100 × ÷ ( – ) = %

Ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient.	Honeywell International Inc.'s average age of depreciable property, plant and equipment improved from 2010 to 2011 and from 2011 to 2012.

Estimated Total Useful Life

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		Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
	Selected Financial Data (USD $ in millions)
	Property, plant and equipment, gross
	Land and improvements
	Depreciation expense
	Ratio
	Estimated total useful life (years)¹

2012 Calculations

¹ Estimated total useful life (years) = (Property, plant and equipment, gross – Land and improvements) ÷ Depreciation expense
= ( – ) ÷ =

Ratio	Description	The company
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors.	Honeywell International Inc.'s estimated total useful life of depreciable property, plant and equipment increased from 2010 to 2011 and from 2011 to 2012.

Estimated Age, Time Elapsed Since Purchase

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		Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
	Selected Financial Data (USD $ in millions)
	Accumulated depreciation
	Depreciation expense
	Ratio
	Time elapsed since purchase (years)¹

2012 Calculations

¹ Time elapsed since purchase (years) = Accumulated depreciation ÷ Depreciation expense
= ÷ =

Ratio	Description	The company
Estimated time elapsed since purchase	The approximate age in years of a company's fixed assets. Useful for comparison purposes.	Honeywell International Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2010 to 2011 and from 2011 to 2012.

Estimated Remaining Life

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		Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
	Selected Financial Data (USD $ in millions)
	Property, plant and equipment, net
	Land and improvements
	Depreciation expense
	Ratio
	Estimated remaining life (years)¹

2012 Calculations

¹ Estimated remaining life (years) = (Property, plant and equipment, net – Land and improvements) ÷ Depreciation expense
= ( – ) ÷ =

Ratio	Description	The company
Estimated remaining life		Honeywell International Inc.'s estimated remaining life of depreciable property, plant and equipment increased from 2010 to 2011 and from 2011 to 2012.