Honeywell 2012 Annual Report Download - page 108

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Friction Products—The following tables present information regarding Bendix related asbestos
claims activity:
Claims Activity 2012 2011
Years Ended
December 31,
Claims Unresolved at the beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,571 22,480
Claims Filed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,920 3,592
Claims Resolved (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,350) (3,501)
Claims Unresolved at the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,141 22,571
(a) The number of claims resolved in 2012 includes approximately 288 claims previously classified as
inactive (85% non-malignant and accrued liability of approximately $1.3 million) which were
activated during 2012. The number of claims resolved in 2011 includes approximately 351 claims
previously classified as inactive (82% non-malignant and accrued liability of approximately $1.7
million) which were activated during 2011.
Disease Distribution of Unresolved Claims 2012 2011
December 31,
Mesothelioma and Other Cancer Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,367 4,943
Nonmalignant Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,774 17,628
Total Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,141 22,571
Honeywell has experienced average resolution values per claim excluding legal costs as follows:
2012 2011 2010 2009 2008
Years Ended December 31,
(in whole dollars)
Malignant claims . . . . . . . . . . . . . . . . . . . . . $49,000 $48,000 $54,000 $50,000 $65,000
Nonmalignant claims. . . . . . . . . . . . . . . . . . $ 1,400 $ 1,000 $ 1,300 $ 200 $ 1,500
It is not possible to predict whether resolution values for Bendix related asbestos claims will
increase, decrease or stabilize in the future.
Our consolidated financial statements reflect an estimated liability for resolution of pending (claims
actually filed as of the financial statement date) and future Bendix related asbestos claims. We have
valued Bendix pending and future claims using average resolution values for the previous five years.
We update the resolution values used to estimate the cost of Bendix pending and future claims during
the fourth quarter each year.
The liability for future claims represents the estimated value of future asbestos related bodily injury
claims expected to be asserted against Bendix over the next five years. Such estimated cost of future
Bendix related asbestos claims is based on historic claims filing experience and dismissal rates,
disease classifications, and resolution values in the tort system for the previous five years. In light of
the uncertainties inherent in making long-term projections, as well as certain factors unique to friction
product asbestos claims, we do not believe that we have a reasonable basis for estimating asbestos
claims beyond the next five years. The methodology used to estimate the liability for future claims is
similar to that used to estimate the future NARCO related asbestos claims liability.
Our insurance receivable corresponding to the liability for settlement of pending and future Bendix
asbestos claims reflects coverage which is provided by a large number of insurance policies written by
dozens of insurance companies in both the domestic insurance market and the London excess market.
Based on our ongoing analysis of the probable insurance recovery, insurance receivables are recorded
in the financial statements simultaneous with the recording of the estimated liability for the underlying
asbestos claims. This determination is based on our analysis of the underlying insurance policies, our
99
HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)