Honeywell 2008 Annual Report Download - page 89

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
In 2008, we recognized repositioning charges totaling $444 million including severance costs of $333 million
related to workforce reductions of 7,480 manufacturing and administrative positions across all of our segments.
The workforce reductions primarily relate to the planned downsizing or shutdown of certain manufacturing
facilities in our Aerospace, Automation and Control Solutions and Transportation Systems segments, the
rationalization of non-manufacturing infrastructure, outsourcing of non-core components, managing capacity
utilization to address product demand volatility and our functional transformation initiative. The repositioning
charge also included asset impairments of $78 million principally related to manufacturing plant and equipment in
facilities scheduled to close or be downsized and certain administrative facilities, and information technology
equipment in our Corporate segment. Also, $20 million of previously established accruals, primarily for severance
at our Automation and Control Solutions segment were returned to income in 2008 due mainly to fewer employee
separations than originally planned associated with prior severance programs.
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 fewer employee separations than originally planned associated with
prior Aerospace severance programs.
The following table summarizes the status of our total repositioning reserves.
Severance
Costs Asset
Impairments Exit
Costs Total
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
2008 charges 333 78 33 444
2008 usage (149) (78) (8) (235)
Adjustments (20) — — (20)
Balance at December 31, 2008 $ 365 $ — $ 36 $ 401
In 2008, certain of our repositioning projects in our Aerospace, Automation and Control Solutions and
Transportation Systems segments included exit or disposal activities, the costs related to which, will be
recognized in future periods when the actual liability is incurred. The nature of these exit or disposal costs
principally includes product recertification and requalification and employee training and travel. The following
table summarizes by segment, expected, incurred and remaining exit and disposal
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