Honeywell 2013 Annual Report Download - page 112

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Asbestos Matters
Like many other industrial companies, Honeywell is a defendant in personal injury actions related
to asbestos. We did not mine or produce asbestos, nor did we make or sell insulation products or other
construction materials that have been identified as the primary cause of asbestos related disease in
the vast majority of claimants.
Honeywell’s predecessors owned North American Refractories Company (NARCO) from 1979 to
1986. NARCO produced refractory products (bricks and cement used in high temperature
applications). We sold the NARCO business in 1986 and agreed to indemnify NARCO with respect
to personal injury claims for products that had been discontinued prior to the sale (as defined in the
sale agreement). NARCO retained all liability for all other claims. NARCO and/or Honeywell are
defendants in asbestos personal injury cases asserting claims based upon alleged exposure to
NARCO asbestos-containing products. Claimants consist largely of individuals who allege exposure to
NARCO asbestos-containing refractory products in an occupational setting. These claims, and the
filing of subsequent claims, were stayed continuously since January 4, 2002, the date on which
NARCO sought bankruptcy protection (see discussion below).
Honeywell’s Bendix friction materials (Bendix) business manufactured automotive brake parts that
contained chrysotile asbestos in an encapsulated form. Claimants consist largely of individuals who
allege exposure to asbestos from brakes from either performing or being in the vicinity of individuals
who performed brake replacements.
The following tables summarize information concerning NARCO and Bendix asbestos related
balances:
Asbestos Related Liabilities
Bendix NARCO Total Bendix NARCO Total Bendix NARCO Total
2013 2012 2011
Year Ended December 31, Year Ended December 31, Year Ended December 31,
Beginning of year . . . . . . . . . $ 653 $1,119 $1,772 $ 613 $1,123 $1,736 $ 594 $1,125 $1,719
Accrual for update to
estimated liability . . . . . . . 180 5 185 168 (1) 167 167 3 170
Change in estimated cost
of future claims . . . . . . . . . 16 — 16 30 — 30 16 — 16
Update of expected
resolution values for
pending claims . . . . . . . . . (5) — (5) 8 — 8 2 — 2
Asbestos related liability
payments. . . . . . . . . . . . . . . (188) (169) (357) (166) (3) (169) (166) (5) (171)
End of year. . . . . . . . . . . . . . . $ 656 $ 955 $1,611 $ 653 $1,119 $1,772 $ 613 $1,123 $1,736
100
HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)