Honeywell 2007 Annual Report Download - page 84

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HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
Note 3—Repositioning and Other Charges
A summary of repositioning and other charges follows:
Years Ended December 31,
2007 2006 2005
Severance $ 186 $ 102 $ 248
Asset impairments. 14 15 5
Exit costs 9 7 14
Reserve adjustments (18) (22) (25)
Total net repositioning charge. 191 102 242
Asbestos related litigation charges, net of insurance 100 126 10
Probable and reasonably estimable environmental liabilities. 225 210 186
Business impairment charges 9 12 23
Arbitration award related to phenol supply agreement — (18) (67)
Other 18 51 18
Total net repositioning and other charges. $ 543 $ 483 $ 412
The following table summarizes the pretax distribution of total net repositioning and other charges by income
statement classification.
Years Ended December 31,
2007 2006 2005
Cost of products and services sold $ 495 $ 472 $ 357
Selling, general and administrative expenses 48 11 43
Other (income) expense — — 12
$ 543 $ 483 $ 412
The following table summarizes the pretax impact of total net repositioning and other charges by segment.
Years Ended December 31,
2007 2006 2005
Aerospace $ 37 $ 10 $ 96
Automation and Control Solutions 127 39 85
Specialty Materials 14 5 (34)
Transportation Systems 119 293 82
Corporate 246 136 183
$ 543 $ 483 $ 412
In 2007, we recognized repositioning charges totaling $209 million primarily for severance costs related to
workforce reductions of 3,408 manufacturing and administrative positions mainly in our Automation and Control
Solutions and Aerospace segments. Also, $18 million of previously established accruals, primarily for severance
at our Transportation Systems and Aerospace segments, were returned to income in 2007 due mainly to
changes in the scope of previously announced severance programs and due to fewer employee separations than
originally planned associated with prior severance programs.
In 2006, we recognized repositioning charges totaling $124 million primarily for severance costs related to
workforce reductions of 2,253 manufacturing and administrative positions across all of our segments. Also, $22
million of previously established accruals, primarily for severance at our Aerospace, Transportation Systems and
Specialty Materials segments were returned to income in 2006 due mainly to changes in the scope of previously
announced severance programs and due to