Honeywell 2006 Annual Report Download - page 78

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
related to an executive severance amount previously paid which were determined to no longer be payable, and severance amounts
previously paid to an outside service provider as part of an outsourcing arrangement which were refunded to Honeywell.
In 2004, we recognized repositioning charges totaling $116 million primarily for severance costs related to workforce reductions
of 2,272 manufacturing and administrative positions across all of our reportable segments. Also, $28 million of previously established
accruals, primarily for severance, were returned to income in 2004, due to fewer employee separations than originally planned
associated with certain prior repositioning actions, resulting in reduced severance liabilities principally in our Automation and Control
Solutions reportable segment.
The following table summarizes the status of our total repositioning reserves.
Severance
Costs Asset Impairments Exit Costs Total
Balance at December 31, 2003 $ 171 $ — $ 42 213
2004 charges 85 21 10 116
2004 usage (138) (21) (26) (185)
Adjustments (21) — (7) (28)
Balance at December 31, 2004 97 — 19 116
2005 charges 248 5 14 267
2005 usage (156) (5) (15) (176)
Adjustments (21) — (4) (25)
Balance at December 31, 2005 168 — 14 182
2006 charges 102 15 7 124
2006 usage (134) (15) (8) (157)
Adjustments (18) — (4) (22)
Balance at December 31, 2006 $ 118 $ — $ 9 $ 127
In 2006, we recognized a charge of $210 million for environmental liabilities deemed probable and reasonably estimable during
the year. We recognized asbestos related litigation charges, net of insurance, of $126 million which are discussed in Note 21. We
recognized other charges of $51 million related to our Corporate segment primarily for the settlement of a property damage claim
litigation matter in Brunswick, GA and our entrance into a plea agreement related to an environmental matter at our Baton Rouge, LA
facility. See Note 21 for discussion of these matters. We recognized impairment charges of $12 million related to the write-down of
property, plant and equipment held for sale in our Specialty Materials reportable segment. We also recognized a credit of $18 million
in connection with an arbitration award for overcharges by a supplier of phenol to our Specialty Materials business for 2005
transactions.
In 2005, we recognized a charge of $186 million for environmental liabilities deemed probable and reasonably estimable during
the year. We recognized asbestos related litigation charges, net of insurance, of $10 million which are discussed in Note 21. We
recognized a credit of $67 million in connection with an arbitration award for overcharges by a supplier of phenol to our Specialty
Materials business from June 2003 through the end of 2004. We recognized impairment charges of $23 million related to the write-
down of property, plant and equipment held and used in our Specialty Materials reportable segment. We also recognized other charges
of $18 million principally related to the modification of a lease agreement for the Corporate headquarters facility ($10 million) and for
various legal settlements ($7 million).
In 2004, we recognized a charge of $536 million for probable and reasonably estimable environmental liabilities primarily related
to the estimated costs of the court-ordered excavation and transport for offsite disposal of approximately one million tons of chromium
residue present at a predecessor Honeywell site located in Jersey City, New Jersey, and environmental conditions in and around
Onondaga Lake in Syracuse, New York. Both of these environmental matters are discussed in
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