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REPOSITIONING AND OTHER CHARGES | 9 Months Ended
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Sep. 30, 2023
Restructuring and Related Activities [Abstract] |
REPOSITIONING AND OTHER CHARGES | REPOSITIONING AND OTHER CHARGES A summary of net repositioning and other charges follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Severance | $ | 35 |  |  | $ | 43 |  |  | $ | 121 |  |  | $ | 75 |
Asset impairments | 16 |  |  | 5 |  |  | 37 |  |  | 153 |
Exit costs | 36 |  |  | 20 |  |  | 98 |  |  | 78 |
Reserve adjustments | (23) |  |  | (2) |  |  | (40) |  |  | (54) |
Total net repositioning charges | 64 |  |  | 66 |  |  | 216 |  |  | 252 |
Asbestos-related charges, net of insurance and reimbursements | 24 |  |  | 29 |  |  | 79 |  |  | 115 |
Probable and reasonably estimable environmental liabilities, net of reimbursements | 6 |  |  | 3 |  |  | 40 |  |  | 19 |
Other charges | (6) |  |  | 2 |  |  | (4) |  |  | 328 |
Total net repositioning and other charges | $ | 88 |  |  | $ | 100 |  |  | $ | 331 |  |  | $ | 714 |
The following table summarizes the pre-tax distribution of total net repositioning and other charges by classification in the Consolidated Statement of Operations:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Cost of products and services sold | $ | 57 |  |  | $ | 85 |  |  | $ | 200 |  |  | $ | 429 |
Selling, general and administrative expenses | 31 |  |  | 24 |  |  | 122 |  |  | 237 |
Other (income) expense | — |  |  | (9) |  |  | 9 |  |  | 48 |
Total net repositioning and other charges | $ | 88 |  |  | $ | 100 |  |  | $ | 331 |  |  | $ | 714 |
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 17 Segment Financial Data:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Aerospace | $ | 10 |  |  | $ | (2) |  |  | $ | 21 |  |  | $ | 34 |
Honeywell Building Technologies | 9 |  |  | 10 |  |  | 40 |  |  | 47 |
Performance Materials and Technologies | 22 |  |  | 15 |  |  | 45 |  |  | 262 |
Safety and Productivity Solutions | 23 |  |  | 55 |  |  | 94 |  |  | 197 |
Corporate and All Other | 24 |  |  | 22 |  |  | 131 |  |  | 174 |
Total net repositioning and other charges | $ | 88 |  |  | $ | 100 |  |  | $ | 331 |  |  | $ | 714 |
NET REPOSITIONING CHARGES In the three months ended September 30, 2023, the Company recognized gross repositioning charges totaling $87 million, including severance costs of $35 million related to workforce reductions of 1,567 manufacturing and administrative positions primarily in the Company's Honeywell Building Technologies and Safety and Productivity Solutions reportable business segments. The workforce reductions were related to productivity and ongoing functional transformation initiatives. The repositioning charges included asset impairments of $16 million primarily related to the write-down of certain assets within the Company's Safety and Productivity Solutions reportable business segment and corporate function. The repositioning charges also included exit costs of $36 million related to current period costs incurred for closure obligations associated with site transitions primarily in the Company's Performance Materials and Technologies and Safety and Productivity Solutions reportable business segments. Also, $23 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 the three months ended September 30, 2022, the Company recognized gross repositioning charges totaling $68 million, including severance costs of $43 million related to workforce reductions of 1,276 manufacturing and administrative positions primarily in the Company's Safety and Productivity Solutions reportable business segment. The workforce reductions were related to the Company's productivity and ongoing functional transformation initiatives. The repositioning charges included asset impairments of $5 million related to the write-down of certain manufacturing equipment. The repositioning charges also included exit costs of $20 million related to current period costs incurred for closure obligations associated with site transitions in the Company's Safety and Productivity Solutions and Aerospace reportable business segments. In the nine months ended September 30, 2023, the Company recognized gross repositioning charges totaling $256 million, including severance costs of $121 million related to workforce reductions of 4,128 manufacturing and administrative positions primarily in the Company's Safety and Productivity Solutions and Honeywell Building Technologies reportable business segments. The workforce reductions were primarily related to productivity and ongoing functional transformation initiatives. The repositioning charges included asset impairments of $37 million related to the write-down of certain assets within the Company's Safety and Productivity Solutions reportable business segment. The repositioning charges also included exit costs of $98 million related to current period costs incurred for closure obligations associated with site transitions across all of the Company's reportable business segments and corporate function. Also, $40 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 the nine months ended September 30, 2022, the Company recognized gross repositioning charges totaling $306 million, including asset impairments of $153 million for the write-down of certain manufacturing 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 $78 million primarily related to current period exit costs incurred for new and previously approved repositioning projects and closure obligations associated with site transitions in the Company's Performance Materials and Technologies and Aerospace reportable business segments. The repositioning charges also included severance costs of $75 million related to workforce reductions of 2,940 manufacturing and administrative positions across the Company's reportable business segments. The workforce reductions related to cost savings actions taken in connection with the Company's productivity and ongoing functional transformation initiatives and to site transitions to more cost-effective locations. Also, $54 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. The following table summarizes the status of the Company's total repositioning reserves:
| Severance Costs |  | Asset Impairments |  | Exit Costs |  | Total
Balance at December 31, 2022 | $ | 235 |  |  | $ | — |  |  | $ | 74 |  |  | $ | 309 |
Charges | 121 |  |  | 37 |  |  | 98 |  |  | 256 |
Usage—cash | (138) |  |  | — |  |  | (80) |  |  | (218) |
Usage—noncash | — |  |  | (35) |  |  | — |  |  | (35) |
Foreign currency translation | 5 |  |  | — |  |  | 16 |  |  | 21 |
Adjustments | (31) |  |  | (2) |  |  | (7) |  |  | (40) |
Balance at September 30, 2023 | $ | 192 |  |  | $ | — |  |  | $ | 101 |  |  | $ | 293 |
Certain repositioning projects will recognize exit costs in future periods when the actual liability is incurred. Such exit costs incurred in the nine months ended September 30, 2023, and 2022, were $40 million and $46 million, respectively. OTHER CHARGES During the nine months ended September 30, 2023, the Company recorded a fair value adjustment, within Asbestos-related charges, net of insurance and reimbursements in the table above and Other (income) expense on the Consolidated Statement of Operations, related to HWI Net Sale Proceeds (as defined in Note 11 Fair Value Measurements) and reduced the estimate by $11 million. See Note 11 Fair Value Measurements and Note 14 Commitments and Contingencies for further discussion. During the three months ended September 30, 2022, the Company recognized a net reduction of Other charges previously recognized of $16 million. The Other charges included costs incurred related to the Wind down of operations in Russia. The reduction of Other charges primarily related to a favorable foreign exchange revaluation on an intercompany loan with a Russian affiliate, in addition to the recovery of outstanding accounts receivable previously reserved against, recorded to Other (income) expense and Selling, general and administrative expense on the Consolidated Statement of Operations, respectively. This was partially offset by the recognition of an additional expense for called guarantees recorded to Other (income) expense on the Consolidated Statement of Operations. During the nine months ended September 30, 2022, the Company recognized $291 million of Other charges. The Other charges included costs incurred related to the initial suspension (the Suspension) and Wind down of businesses 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 included costs recorded in Cost of products sold, Selling, general and administrative expenses, or Other (income) expense on the Consolidated Statement of Operations. For the nine months ended September 30, 2022, Cost of products and services sold included $60 million primarily related to inventory reserves and the write-down of other assets, Selling, general and administrative included $183 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 included $48 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. For the nine months ended September 30, 2022, the Other charges did not include a $2 million tax valuation allowance recorded to Tax expense on the Consolidated Statement of Operations, directly attributable to the Company's Wind down of businesses and operations in Russia. 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 the wind down of 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 14 Commitments and Contingencies for a discussion of the recognition and measurement of estimate for contingencies.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//420/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479823/420-10-S99-2 + Details
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