Results from a $538 million increase in recorded liability for asbestos claims to $755 million
Ingersoll-Rand Company announced on Friday that it has taken a non-cash charge of $449m ($277m after tax) relating to the company's liability for all pending and estimated future asbestos claims through 2053.
This charge results from an increase in the company's recorded liability for asbestos claims by $538m, from $217m to $755m, offset by a corresponding $89m increase in its assets for probable asbestos-related insurance recoveries, which now total $250m.
Prior to the fourth quarter of 2007, Ingersoll Rand recorded a liability for its actual and anticipated future asbestos settlement costs projected seven years into the future. The company did not record a liability for future asbestos settlement costs beyond the seven-year period covered by its reserve because, it said, such costs previously were not reasonably estimable.
In the fourth quarter of 2007, with the aid of an outside expert, the company estimated its total liability for pending and unasserted future asbestos-related claims through 2053 at $755m.