Honeywell 2007 Annual Report Download - page 86

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
fewer employee separations than originally planned associated with prior Aerospace severance programs.
In 2005, we recognized repositioning charges totaling $267 million primarily for severance costs related to
workforce reductions of 5,269 manufacturing and administrative positions across all of our segments including
the implementation of a new organizational structure in our Aerospace segment (substantially implemented in the
third quarter of 2005) which reorganized our Aerospace businesses to better align with customer segments. Also,
$25 million of previously established accruals, primarily for severance at our Corporate, Specialty Materials and
Automation and Control Solutions segments were returned to income in 2005. The reversal of severance
liabilities related to changes in the scope of previously announced severance programs, excise taxes 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.
The following table summarizes the status of our total repositioning reserves.
Severance
Costs Asset
Impairments Exit
Costs Total
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
2007 charges 186 14 9 209
2007 usage (85) (14) (7) (106)
Adjustments (18) — — (18)
Balance at December 31, 2007 $ 201 $ — $ 11 $ 212
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. 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. 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. We recognized a credit of $67 million in
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