Honeywell 2004 Annual Report Download - page 99

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
concerning insurance coverage that we believe are reasonable and consistent with our historical dealings with our insurers, our
knowledge of any pertinent solvency issues surrounding insurers and various judicial determinations relevant to our insurance
programs.
Projecting future events is subject to many uncertainties that could cause the NARCO related asbestos liabilities to be higher or
lower than those projected and recorded. There is no assurance that a plan of reorganization will be proposed or confirmed, that
insurance recoveries will be timely or whether there will be any NARCO related asbestos claims beyond 2018. Given the inherent
uncertainty in predicting future events, we review our estimates periodically, and update them based on our experience and other
relevant factors. Similarly we will reevaluate our projections concerning our probable insurance recoveries in light of any changes to
the projected liability or other developments that may impact insurance recoveries.
Friction Products—Honeywell's Bendix Friction Materials (Bendix) business manufactured automotive brake pads that contained
chrysotile asbestos in an encapsulated form. There is a group of existing and potential claimants consisting largely of individuals that
allege to have performed brake replacements.
From 1981 through December 31, 2004, we have resolved approximately 71,000 Bendix related asbestos claims including trials
covering 120 plaintiffs, which resulted in 115 favorable verdicts. Trials covering five individuals resulted in adverse verdicts;
however, two of these verdicts were reversed on appeal and the remaining three claims were settled.
Through the second quarter of 2002, Honeywell had no out-of-pocket costs for Bendix related asbestos claims since its insurance
deductible was satisfied many years ago. Beginning with claim payments made in the third quarter of 2002, Honeywell began
advancing indemnity and defense claim costs. Those indemnity and defense costs were approximately $165, $112 and $70 million in
2004, 2003 and 2002, respectively. In 2004 and 2003 Honeywell collected approximately $8 and $90 million, respectively, in
insurance reimbursements and settlements for Bendix related asbestos claims. See further discussion of insurance coverage below.
The following tables present information regarding Bendix related asbestos claims activity during the past two years:
Years Ended
December 31,
Claims Activity 2004 2003
Claims Unresolved at beginning of year 72,976 50,821
Claims Filed 10,504 25,765
Claims Resolved (7,132) (3,610)
Claims Unresolved at end of year 76,348 72,976
December 31,
Disease Distribution of Unresolved Claims 2004 2003
Mesothelioma and Other Cancer Claims 3,534 3,277
Other Claims 72,814 69,699
Total Claims 76,348 72,976
Approximately 30 percent of the approximately 76,000 pending claims at December 31, 2004 are on the inactive, deferred, or
similar dockets established in some jurisdictions for claimants who allege minimal or no impairment. The approximately 76,000
pending claims also include claims filed in jurisdictions such as Texas, Virginia and Mississippi that allow for consolidated filings. In
these
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