Application for Renewal of Honeywell Metropolis Works
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Honeywell Specialty Materials Honeywell P.O. Box 430 Highway 45 North Metropolis, IL 62960 618 524-2111 618 524-6239 Fax May 27, 2005 U.S. Nuclear Regulatory Commission (UPS: 301-415-6334) Attention: Michael Raddatz Fuel Cycle Licensing Branch, Mail Stop T-8A33 Two White Flint North, 11545 Rockville Pike Rockville, MD 20852-2738 Subject: Renewal of USNRC Source Materials License Re: Docket No. 40-3392 License No. SUB-526 Dear Sirs, Please find enclosed the Honeywell International Inc. application for renewal of USNRC Source Materials License SUB-526 for Honeywell's Metropolis, Illinois Uranium Conversion Facility (Docket No. 40-3392). This application has been prepared in accordance with the requirements of 10 CFR 40. The content and format of the application and supporting materials are generally consistent with the guidance provided in USNRC Regulatory Guide 3.55, "Standard Format and Content for the Health and Safety Section of License Renewal Applications for Uranium Hexafluoride Production." We have incorporated certain variations from this guidance consistent with our April 26, 2005 discussions with the NRC staff. Enclosed are the following: * One original and 7 copies of the Metropolis Works USNRC Source Materials License Application (Regulatory Guide 3.55 Chapters 1 through 7), including USNRC Form 313 * One original and 7 copies of the revised Metropolis Works Emergency Response Plan * One original and 7 copies of the Metropolis Works Safety Demonstration Report (Regulatory Guide 3.55 Chapters 8 through 14), including related drawings and appendices * One original and 7 copies of the Metropolis Works Environmental Report * One compact disc containing the text files for each of the above in pdf format Attached to this letter, please find a summary of the significant changes to the License Application and Safety Demonstration Report. We hope that you will find these materials complete and in order. Should you have any questions, please contact Mr. Darren Mays, Metropolis Works Health, Safety, and Environmental Manager, at (618) 524-6396. Sincerely, David B. Edwards Plant Manager Enclosures cc: Region II, US Nuclear Regulatory Commission (UPS: 404-562-4731) Attention: Mr. Jay L. Henson Sam Nunn Atlanta Federal Center 23 T85, 61 Forsyth Street, S.W. Atlanta, GA 30303-3415 Honeywell Metropolis Works USNRC Source Materials License SUB-526 Summary of Significant Changes to License Application and Safety Demonstration Report General: 1. Split former license Parts 1 and 2 into two separate documents - the License Application and the Safety Demonstration Report (SDR). a. The License Application contains the conditions to which Honeywell is committed to ensure safe operation of the facility. b. The Safety Demonstration Report contains more detailed and explanatory information that supports the License Application. A significant amount of detailed information has been transferred from the License Application to the SDR, with basic commitments remaining in the License Application. 2. Provided drawings as an Appendix to the SDR to allow for updates as part of the SDR update process. 3. Provided updated radiological, effluent, and demographic data. 4. Deleted references to the deconversion system. 5. Provided references to applicable Regulatory Guides, consensus standards, and other documents. Detailed Chanqe Summarv Section Summary of Change (New) Front Provided table of contents and list of abbreviations matter 1.4 Provided updated licensed material possession information 1.5 Added product shipping and vehicle decontamination as authorized activities 1.6 Reduced level of detail provided for safety controls associated with cylinder filling, weight measurement, hydrocarbon controls, and glycol contamination controls. Transferred supporting technical details to SDR. 1.7 Reduced scope of radiological posting and labeling exemption to address labeling of source material containers only. Provided basis information in SDR. Deleted exemption related to use of the site Dispensary. Deleted details associated with leak testing of sealed sources, on-site disposal of radioactive waste (addressed by regulations) and material release (addressed in Section 3). 2.1 - 2.2 Provided updated organizational details, position descriptions, and information addressing authorization to change organizational structure and fill positions based on management prerogative, while maintaining separate lines of authority. 2.3 Provided description of revised Safety Committee structure, membership, and responsibilities 2.5 Provided updated description of employee training program I a m OS SO Q V Q F 2 F 2 Q V I TO OUR SHAREOWNERS Wee have turned the corner! And it feels great. In 2002 and 2003, we worked hard to resolve our big issues, get strong leadership teams in place, strengthen our balance sheet, and establish strong growth paths in every business even while our end markets suffered. It began to pay off in 2004 and looks even more exciting for 2005. FINANCIALS We had a very good year. Sales of $25.6 billion were up 11%, segment profit Xwas up in each of our businesses with increases of more than 20% in three of them, and cash flow from operations was robust at $2.3 billion. EPS was down 3% at $1.49 reflecting the surprise verdict in February 2005 regarding the New Jersey chrome case, an unusual item that reduced earnings by 19 cents per share. It is painful to adjust previously announced earnings for this unanticipated, legacy item. That said, this verdict has little impact on future operations and does not reflect on the value of the company. Excluding this charge, EPS was up 9% with the difference between EPS growth and segment profit growth primarily attributable to increased non-cash pension expense. The strength of our operations is encouraging. Our cash position and capital structure continued to improve, ending the year with net debt (total debt minus cash) to net capital (shareowners' equity plus net debt) of 13%. Having that cash gives us the flexibility to invest in our businesses and to increase returns for our shareowners. Reflecting our confidence in the future, wve raised the dividend 10% ... the first increase in five years. Taking advantage of a temporary stock price decline in the fourth quarter, we bought back an incremental 10 million shares in addition to the 10 million shares planned in 2004. These actions returned $1.3 billion to shareowners in 2004. We are also studying the provisions of the American Jobs Creation Act, which was signed by the President on October 22, 2004, giving us the opportu- nity in 2005 to bring back to the U.S. up to $2.6 billion of cash from our foreign operations at a significantly reduced rate of U.S. income tax. Congress or the Department of Treasury still must act on the Technical Corrections Bill, introduced in Congress on November 19, 2004, to provide clarity and confi- dence on the cash repatriation provision of the American Jobs Creation Act. Honeyvell 2004 1 | Cash flexibility also allowed us to continue improving the businesses. We completed 3 dispositions ($567 million sales, $426 million cash proceeds) and 11 acquisitions ($277 million sales, $384 million cash purchase). With our new, more rigorous acquisition process now in its third year, we feel confident about generating the necessary returns. We adhere strictly to the new process and it works. The year culminated with the announcement of our offer to acquire the shares of Novar plc. Subject to the completion of regulatory review, we expect to complete the transaction in the first quarter. The Intelligent Building Systems (IBS) division is a great addition to our Automation and Control Solutions (ACS) business. It adds a needed strengthening of our European fire detection, environmental controls, security, and services businesses. Roger Fradin and his team are already working hard to ensure we integrate quickly, efficiently, and effectively to realize the inherent synergies. The Security Printing Services (SPS - check printing) and Indalex Aluminum Solutions (IAS - aluminum extrusion) divisions of Novar are very strong businesses in their respective industries. They just don't fit with the Honey vell portfolio. There is already strong interest from the strategic and financial communities for these businesses ... to buy separately or together. We anticipate the sale of both within a year. This acquisition requires the work of integration in addition to that of selling two of three divisions but we expect when all is said and done this will be a great investment for us. PENSION AND ASBESTOS Our improvement in pension financial impact is encouraging. We have no cash funding issues and returns have been great. We expect the negative impact of pension expense (29C per share in 2004), driven principally by our conservative recognition of book losses, to begin declining in 2005. Asbestos exposure continues to run as predicted and is consistent with our The outlook for Honeywell is reserves. Claims settlement values in fact continue to run better than our original expectations. After 2005, bright. In the global economy, our expenditures associated with our NARCO exposure capital investment is expanding, should begin declining significantly. Even with asbestos expenditures, our 2005 free cash flow (cash from job growth continues, and cash operations minus CAPEX) should be $1.6 - $1.7 billion flows from most companies (estimated cash flow from operations of $2.4 - $2.5 billion, minus capital expenditures). We continue to believe our continue to improve. All good exposure is well understood and contained. It is not news for our businesses. dependent on legislative reform. Reform as contemplated by the U.S. Senate in the Fairness in Asbestos Injury Resolution (FAIR) Act establishing a national trust find would be helpfil to us of course and, more importantly, critical for the country. We all hope they act on it. 2 Honecy-'ll 2004 I Introduced in 2002, Marketing the FOUR PILLARS OF GROWTH are the foundation of Honeywell's strategy to drive organic Dopng abTHE FOUR Developing grwhtruhsuperb job PLRSrobust growth through for our PILLARS technology processes and service customers roadmaps every day OF GROWTH excellence, innovative .