Honeywell 2005 Annual Report Download - page 106

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
reasonably estimate losses which could arise from future Bendix related asbestos claims, we do not believe that such claims would
have a material adverse effect on our consolidated financial position in light of our insurance coverage and our prior experience in
resolving such claims. If the rate and types of claims filed, the average indemnity cost of such claims and the period of time over
which claim settlements are paid (collectively, the “Variable Claims Factors”) do not substantially change, Honeywell would not
expect future Bendix related asbestos claims to have a material adverse effect on our results of operations or operating cash flows in
any fiscal year. No assurances can be given, however, that the Variable Claims Factors will not change.
Refractory and Friction Products—The following tables summarize information concerning NARCO and Bendix asbestos related
balances:
Asbestos Related Liabilities
Year Ended December 31, 2005 Year Ended December 31, 2004 Year Ended December 31, 2003
Bendix NARCO Total Bendix NARCO Total Bendix NARCO Total
Beginning of year $ 355 $ 2,395 $ 2,750 $ 249 $ 2,760 $ 3,009 $ 241 $ 3,200 $ 3,441
Accrual for claims filed and defense costs incurred 170 — 170 186 — 186 — — —
Asbestos related liability payments (153) (597) (750) (153) (365) (518) (117) (440) (557)
Settlement with plaintiff firms of certain pending
asbestos claims(1) — (21) (21) — — — — — —
Update of expected resolution values for pending
claims (85) — (85) 73 — 73 — — —
Other(2) — 5 5 — — — 125 — 125
End of year $ 287 $ 1,782 $ 2,069 $ 355 $ 2,395 $ 2,750 $ 249 $ 2,760 $ 3,009
(1) In 2005, consists of a charge of $52 million to reflect a settlement of certain current asbestos claims during the year and a credit of
$73 million related to a re-estimation of asbestos reserves in connection with an additional settlement.
(2) In 2003, relates to accrual for asbestos liabilities recognized upon the termination of the transaction to sell our Friction Materials
business.
Insurance Recoveries for Asbestos Related Liabilities
Year Ended December 31, 2005 Year Ended December 31, 2004 Year Ended December 31, 2003
Bendix NARCO Total Bendix NARCO Total Bendix NARCO Total
Beginning of year $ 336 $ 1,226 $ 1,562 $ 209 $ 1,238 $ 1,447 $ 145 $ 1,811 $ 1,956
Probable insurance recoveries related to claims
filed 34 — 34 96 — 96 — — —
Probable insurance recoveries related to annual
update of expected resolution values for pending
claims (15) — (15) 39 — 39 — — —
Insurance receipts for asbestos related liabilities (33) (127) (160) (8) (59) (67) (91) (573) (664)
Insurance receivables settlements and write-offs(1) 41 — 41 — — — — — —
Other(2) 14 (3) 11 — 47 47 155 — 155
End of year $ 377 $ 1,096 $ 1,473 $ 336 $ 1,226 $ 1,562 $ 209 $ 1,238 $ 1,447
(1) In 2005, consists of gains from insurance settlements of $172 million principally related to a structured insurance settlement with a
carrier which converted a policy into a future, fixed, non-contingent payment stream, and charges of $131 million for write-offs of
certain amounts due from insurance carriers.