Honeywell 2006 Annual Report Download - page 108

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
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
allegedly performed brake replacements.
From 1981 through December 31, 2006, we have resolved approximately 105,000 Bendix related asbestos claims including trials
covering 124 plaintiffs, which resulted in 116 favorable verdicts. Trials covering eight individuals resulted in adverse verdicts;
however, two of these verdicts were reversed on appeal, three are or shortly will be on appeal, and the remaining three claims were
settled. The following tables present information regarding Bendix related asbestos claims activity:
Years Ended
December 31,
Claims Activity 2006 2005
Claims Unresolved at the beginning of year 79,502 76,348
Claims Filed 4,391 7,520
Claims Resolved (26,785) (4,366)(a)
Claims Unresolved at the end of year 57,108 79,502
December 31,
Disease Distribution of Unresolved Claims 2006 2005
Mesothelioma and Other Cancer Claims 4,843 4,810
Other Claims 52,265 74,692
Total Claims 57,108 79,502
(a) Excludes 2,524 claims which were inadvertently included in resolved claims as of December 31, 2005 which had no impact on
the recorded values for such claims and has been corrected for purposes of this presentation.
Approximately 45 percent of the approximately 57,000 pending claims at December 31, 2006 are on the inactive, deferred, or
similar dockets established in some jurisdictions for claimants who allege minimal or no impairment. The approximately 57,000
pending claims also include claims filed in jurisdictions such as Texas, Virginia, and Mississippi that historically allowed for
consolidated filings. In these jurisdictions, plaintiffs were permitted to file complaints against a pre-determined master list of
defendants, regardless of whether they have claims against each individual defendant. Many of these plaintiffs may not actually have
claims against Honeywell. Based on state rules and prior experience in these jurisdictions, we anticipate that many of these claims will
ultimately be dismissed. During 2006 approximately 16,000 cases were dismissed. More than 85 percent of these dismissals occurred
in Mississippi as a result of judicial rulings relating to non-resident filings and venue. We anticipate additional dismissals in this
jurisdiction.
Honeywell has experienced average resolution values per claim excluding legal costs as follows:
Years Ended December 31,
2006 2005 2004
(in whole dollars)
Malignant claims $33,000 $58,000 $90,000
Nonmalignant claims $ 250 $ 600 $ 1,600
It is not possible to predict whether resolution values for Bendix related asbestos claims will increase, decrease or stabilize in the
future.