Honeywell 2007 Annual Report Download - page 51

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paid to an outside service provider as part of an outsourcing arrangement which were refunded to Honeywell.
These repositioning actions are expected to generate incremental pretax savings of approximately $100
million in 2008 compared with 2007 principally from planned workforce reductions. Cash expenditures for
severance and other exit costs necessary to execute our repositioning actions were $92, $142 and $171 million
in 2007, 2006 and 2005, respectively. Such expenditures for severance and other exit costs have been funded
principally through operating cash flows. Cash expenditures for severance and other exit costs necessary to
execute the remaining actions will approximate $150 million in 2008 and will be funded through operating cash
flows.
In 2007, we recognized a charge of $225 million for environmental liabilities deemed probable and
reasonably estimable during the year. We recognized asbestos related litigation charges, net of insurance, of
$100 million which are discussed in Note 21 to the financial statements. We recognized other charges of $18
million for a business sales tax related to a prior divestiture ($8 million) and for contemplated settlements of
certain legal matters ($10 million). We also recognized impairment charges of $9 million related to the write-down
of property, plant and equipment held for sale in our Specialty Materials segment.
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 to the financial statements. 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. We recognized impairment charges of $12 million related to the write-down of property, plant
and equipment held for sale in our Specialty Materials 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 to the financial statements. 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 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).
33