XML 77 R12.htm IDEA: XBRL DOCUMENT v3.22.4
REPOSITIONING AND OTHER CHARGES
 12 Months Ended
Dec. 31, 2022
Restructuring and Related Activities [Abstract]  
REPOSITIONING AND OTHER CHARGES REPOSITIONING AND OTHER CHARGES
A summary of net repositioning and other charges follows:
 Years Ended December 31,
202220212020
Severance$122 $80 $475 
Asset impairments176 117 21 
Exit costs122 134 69 
Reserve adjustments(56)(13)(47)
Total net repositioning charges364 318 518 
Asbestos-related charges, net of insurance and reimbursements532 129 50 
Probable and reasonably estimable environmental liabilities, net of reimbursements28 22 27 
Other charges342 100 (20)
Total net repositioning and other charges$1,266 $569 $575 
The following table summarizes the pre-tax distribution of total net repositioning and other charges by classification in the Consolidated Statement of Operations:
 Years Ended December 31,
202220212020
Cost of products and services sold$572 $457 $308 
Selling, general and administrative expenses309 112 267 
Other (income) expense385 — — 
 $1,266 $569 $575 
The following table summarizes the pre-tax amount of total net repositioning and other charges by reportable business segment. These amounts are excluded from segment profit as described in Note 22 Segment Financial Data:
 Years Ended December 31,
202220212020
Aerospace$41 $62 $157 
Honeywell Building Technologies63 13 100 
Performance Materials and Technologies332 24 167 
Safety and Productivity Solutions188 268 41 
Corporate and All Other642 202 110 
 $1,266 $569 $575 
In 2022, the Company recognized repositioning charges totaling $420 million, including severance costs of $122 million related to workforce reductions of 4,345 manufacturing and administrative positions mainly in the Company's Safety and Productivity Solutions reportable business segment. The workforce reductions related to our productivity and ongoing functional transformation initiatives. The repositioning charges included asset impairments of $176 million related to the write-down of certain manufacturing and other equipment, primarily related to closing and relocating the production of certain respiratory manufacturing from a U.S.-based facility to a non-U.S. facility in the Company's Safety and Productivity Solutions reportable business segment. The repositioning charges included exit costs of $122 million related to current period costs incurred for closure obligations associated with site transitions in the Company's Performance Materials and Technologies and Aerospace reportable business segments. Also, $56 million of previously established reserves, primarily for severance, were returned to income due to higher than expected voluntary exits and adjustments to the scope of previously announced repositioning actions.
In 2021, the Company recognized repositioning charges totaling $331 million, including severance costs of $80 million related to workforce reductions of 6,432 manufacturing and administrative positions mainly in the Company's Safety and Productivity Solutions and Aerospace reportable business segments. The workforce reductions were primarily related to the realignment of a product line in the Company's Safety and Productivity Solutions reportable business segment, site transitions, mainly in the Aerospace reportable business segment, to more cost-effective locations, and the Company's productivity and ongoing functional transformation initiatives. The repositioning charges included asset impairments of $117 million primarily related to the write-down of certain manufacturing and other equipment. The repositioning charges included exit costs of $134 million primarily for current period exit costs incurred for previously approved repositioning projects, closure obligations associated with site transitions, and lease obligations for equipment. Also, $13 million of previously established reserves, primarily for severance, were returned to income due to adjustments to the scope of previously announced repositioning actions.
In 2020, the Company recognized repositioning charges totaling $565 million, including severance costs of $475 million related to workforce reductions of 14,159 manufacturing and administrative positions across the Company's reportable business segments, with a majority of the workforce reductions in the Aerospace and Performance Materials and Technologies reportable business segments. The workforce reductions primarily related to the Company aligning its cost structure with the slowdown in demand for many of its products and services due to the global recession, the Company's productivity and ongoing functional transformation initiatives, and site consolidations and hub strategies. The repositioning charges included exit costs of $69 million primarily related to current period exit costs incurred for previously approved repositioning projects. Also, $47 million of previously established reserves, primarily for severance, were returned to income mainly as a result of higher attrition than anticipated in prior severance actions resulting in lower payments.
The following table summarizes the status of the Company's total repositioning reserves:
Severance
Costs		Asset
Impairments		Exit
Costs		Total
Balance at December 31, 2019$555 $— $96 $651 
Charges475 21 69 565 
Usage—cash(474)— (90)(564)
Usage—noncash— (21)— (21)
Divestitures— — — — 
Adjustments(44)— (3)(47)
Foreign currency translation15 — 2 17 
Balance at December 31, 2020527 — 74 601 
Charges80 117 134 331 
Usage—cash(299)— (83)(382)
Usage—noncash— (119)— (119)
Divestitures— — — — 
Adjustments(14)2 (1)(13)
Foreign currency translation(5)— (2)(7)
Balance at December 31, 2021289 — 122 411 
Charges122 176 122 420 
Usage—cash(135)— (140)(275)
Usage—noncash— (168)(15)(183)
Divestitures— — — — 
Adjustments(42)(8)(6)(56)
Foreign currency translation1 — (9)(8)
Balance at December 31, 2022$235 $— $74 $309 
Certain repositioning projects will recognize exit costs in future periods when the actual liability is incurred. Such exit costs incurred in 2022, 2021, and 2020 were not significant.
During 2022, the Company recognized $342 million of Asbestos-related charges, net of insurance and reimbursements related to the North American Refractories Company (NARCO) Buyout and HarbisonWalker International Holdings, Inc. (HWI) Sale. See Note 19 Commitments and Contingencies for further discussion NARCO asbestos-related liabilities.
The Company recognized $295 million of Other charges related to the initial suspension (the Suspension) and the Wind down of our business and operations in Russia. These costs impacted all reportable business segments, with the most significant impact within the Performance Materials and Technologies reportable business segment. The Other charges include costs recorded in Cost of products sold, Selling, general and administrative expenses, or Other (income) expense in the Consolidated Statement of Operations. Cost of products and services sold includes $65 million primarily related to inventory reserves and the write-down of other assets, Selling, general and administrative includes $185 million primarily related to reserves against outstanding accounts receivable and contract assets, impairment of intangible assets, the write-down of other assets, and employee severance, and Other (income) expense includes $45 million related to foreign exchange revaluation on an intercompany loan with a Russian affiliate, impairment of property, plant and equipment, and expenses for called guarantees. Directly attributable to our Wind down of businesses and operations in Russia, but excluded from Other charges, is a $2 million tax valuation allowance recorded to Tax expense in the Consolidated Statement of Operations.
Given the uncertainty inherent in the Company's remaining obligations related to contracts with Russian counterparties, the Company does not believe it is possible to develop estimates of reasonably possible loss in excess of current accruals for these matters (other than as specifically set forth above). Based on available information to date, the Company’s estimate of potential future losses or other contingencies related to Suspension and Wind down activities, including any guarantee payments or any litigation costs or as otherwise related to the Company's Wind down in Russia, could adversely affect the Company's consolidated results of operations in the periods recognized but would not be material with respect to the Company's consolidated financial position. See Note 19 Commitments and Contingencies for a discussion of the recognition and measurement of estimate for contingencies.
Additionally, for the years ended December 31, 2022, and 2021, Other charges include $41 million and $105 million, respectively, of incremental long-term contract labor cost inefficiencies due to severe supply chain disruptions (attributable to the COVID-19 pandemic) relating to the warehouse automation business within the Safety and Productivity Solutions reportable business segment. Certain of these costs incurred include amounts and provisions for anticipated losses recognized during 2022 and 2021 when total estimated costs at completion for certain of the business’ long-term contracts exceeded total estimated revenue. These costs represent unproductive labor costs due to unexpected supply delays and the resulting downstream installation issues, demobilization and remobilization of contract workers, and resolution of contractor disputes. These costs do not include normal operational inefficiencies experienced during a challenging operating environment in 2022 and 2021.