Honeywell 2013 Annual Report Download - page 115

Download and view the complete annual report

Please find page 115 of the 2013 Honeywell annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 146

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146

Projecting future events is subject to many uncertainties that could cause the NARCO-related
asbestos liabilities or assets to be higher or lower than those projected and recorded. There is no
assurance that insurance recoveries will be timely or whether there will be any NARCO-related
asbestos claims beyond 2018. Given the inherent uncertainty in predicting future events, we review our
estimates periodically, and update them based on our experience and other relevant factors. Similarly,
we will reevaluate our projections concerning our probable insurance recoveries in light of any changes
to the projected liability or other developments that may impact insurance recoveries.
Friction Products—The following tables present information regarding Bendix related asbestos
claims activity:
Claims Activity 2013 2012
Years Ended
December 31,
Claims Unresolved at the beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,141 22,571
Claims Filed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,527 3,920
Claims Resolved(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,366) (3,350)
Claims Unresolved at the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,302 23,141
(a) Claims resolved in 2013 includes significantly aged (i.e., pending for more than six years) claims
totaling 12,250 of which 92% were non-malignant.
Disease Distribution of Unresolved Claims 2013 2012
December 31,
Mesothelioma and Other Cancer Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,810 5,367
Nonmalignant Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,492 17,774
Total Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,302 23,141
Honeywell has experienced average resolution values per claim excluding legal costs as follows:
2013 2012 2011 2010 2009
Years Ended December 31,
(in whole dollars)
Malignant claims . . . . . . . . . . . . . . . . . . . . . $51,000 $49,000 $48,000 $54,000 $50,000
Nonmalignant claims. . . . . . . . . . . . . . . . . . $ 850 $ 1,400 $ 1,000 $ 1,300 $ 200
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.
103
HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)