SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT – October 13, 2016
(Date of earliest event reported)
honeywell international inc.
(Exact name of Registrant as specified in its Charter)
|
DELAWARE (State or other jurisdiction of incorporation) |
1-8974 (Commission File Number) |
22-2640650 (I.R.S. Employer Identification Number) |
| 115 TABOR ROAD, MORRIS PLAINS, NEW JERSEY | 07950 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (973) 455-2000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 7.01 REGULATION FD DISCLOSURE
Mr. David M. Cote, Honeywell International Inc.’s (the “Company’s”) Chairman and Chief Executive Officer, will be appearing on the CNBC television network on October 13, 2016 with Mr. Jim Cramer. During this broadcast, Mr. Cote and Mr. Cramer may refer to some of the materials included as Exhibit 99.1 to this Form 8-K.
The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Honeywell International Inc. slide deck dated October 13, 2016 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: October 13, 2016 | HONEYWELL INTERNATIONAL INC. |
| By: /s/ Jeffrey N. Neuman | |
| Jeffrey N. Neuman | |
| Vice President, Corporate Secretary and | |
| Deputy General Counsel |
Exhibit 99.1
MAD MONEY BRIEFING October 13, 2016
Mad Money Briefing October 13, 2016 1 Forward Looking Statements This report contains “forward - looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of fact, that address activities, events or developments that we or our management intend, exp ect, project, believe or anticipate will or may occur in the future are forward - looking statements. Forward - looking statements are ba sed on management’s assumptions and assessments in light of past experience and trends, current economic and industry conditions, ex pec ted future developments and other relevant factors. They are not guarantees of future performance, and actual results, developmen ts and business decisions may differ materially from those envisaged by our forward - looking statements. Our forward - looking statements are also subject to risks and uncertainties, which can affect our performance in both the near - and long - term. We identify the princ ipal risks and uncertainties that affect our performance in our Form 10 - K and other filings with the Securities and Exchange Commission. Information on our third quarter financial performance contained in this report is preliminary pending the issuance of our Fo rm 10 - Q for the period ending September 30, 2016. Definition Of Core Organic Throughout this presentation, core organic sales growth refers to reported sales growth less the impacts from foreign currenc y translation, M&A and raw materials pass - through pricing in the Resins & Chemicals business of PMT. The raw materials pricing imp act is excluded in instances where raw materials costs are passed through to customers, which drives fluctuations in selling prices not tied to volume growth. A reconciliation of core organic sales growth to reported sales growth is provided in the Appendix. Earnings Per Share As reported in our pre - earnings release issued on October 6, 2016, Honeywell’s third - quarter reported EPS is expected to be approximately $ 1.60. Excluding $0.07 of benefits related to the early adoption of the Financial Accounting Standards Board’s (FASB) Accounting Standards Update 2016 - 09 for stock compensation, third - quarter EPS is expected to be approximately $1.67. All refere nces to fourth - quarter EPS are for Honeywell’s current estimated EPS and exclude any mark - to - market pension adjustment or expense arising from a potential bond refinancing transaction which may occur in the fourth quarter.
Mad Money Briefing October 13, 2016 Great Performance In Tough Macro Environment In 2016 2 2% - 3% 8% - 9% Reported Sales EPS EPS , V% Exclude Any Pension Mark - to - Market Adjustment And Contemplated Debt Refinancing Charges • Continued Slow Growth Environment • HON Oil & Gas Businesses Bottomed 3Q • Leveraging The Honeywell Playbook • Investing Heavily For The Future
Mad Money Briefing October 13, 2016 Sticking To 2016 Earnings Guidance 3 2014 2015 LTM July Current ~ 1% Core Organic ~$39.5B Current Sales Guidance Represents Midpoint Of Reported Sales Growth Guidance ~$40.3B (1%) - (2%) Core Organic Sales Guidance $ 6.60 - $ 6.70 $ 6.60 - $ 6.64 July Current EPS Guidance 8% - 10 % 8% - 9 % EPS , V% Excludes Any Pension Mark - to - Market Adjustment And Contemplated Debt Refinancing Charges ~$ 40.4B Original 1% - 2% Core Organic $ 6.45 - $ 6.70 Original 6 % - 10 %
Mad Money Briefing October 13, 2016 3Q Oil & Gas Bottom … 2017 Inflections Intact 4 • New Product Introduction, Connected Offerings, Installed Base Expansion • Slowing Business Jets Production Rates, OEM Incentives Headwind • Lap Market Headwinds, UOP Backlog Improving (+15%) • Domestic Space Slowing; Reduced Funding And Program Ramp Downs • Channel Headwinds, USPS Comp • Global Turbo Penetration Increasing • Solstice Product Growth; Exiting Resins & Chemicals Business End Market Commentary On End Market Performance Homes And Buildings Defense & Space Oil And Gas Advanced Materials Industrial And Workers Vehicles Commercial Aviation 2016 HON Exposure + - - +/ - - - + 3Q 2016 FY 2017 + + - + - + +
Mad Money Briefing October 13, 2016 Delivering On A Long - Term Basis 5 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E EPS Growth (Indexed To 2007) HON Peer Average 197 134 100 Peer Average Consists Of GE, UTX, MMM, ITW, EMR, COL; EPS Growth Based On Each Company’s Presentation Of Adjusted EPS EPS, V% Exclude Any Pension Mark - to - Market Adjustment
Mad Money Briefing October 13, 2016 3Q16E EPS UOP Catalysts; Process Solutions Short-Cycle Productivity Solutions Growth Restructuring Benefits Net M&A Below-The-Line, Other, Tax 4Q16E ~$1.67 $0.08 - $0.09 $0.02 - $0.03 $0.03 - $0.04 ~($0.02) ($0.03) - ($0.04) $1.74 - $1.78 Strong Visibility To 4Q16 6 3Q16E EPS Excludes Restructuring In 3Q Associated With First Half Benefit From Stock Comp. 4Q16E EPS, V% Exclude Any Pension Mark - to - Market Adjustment And Contemplated Debt Refinancing Charges 10% - 13% YoY Growth
Mad Money Briefing October 13, 2016 Long Cycle Improving For 2017 7 ~$15.5B ~$ [VAL UE] B Long Cycle Backlog Growth 3Q15 3Q16 Short/Long Cycle Mix Long Cycle 40% Short Cycle 60% • 2 % Backlog Growth Driven Primarily By UOP, D&S • Diversity Of Opportunity Matters • Massive Installed Base In Aerospace, D&S, HPS, HBS, UOP • Includes High - Margin Services Tail
Mad Money Briefing October 13, 2016 Favorable Set Up In 2017 8 2016 EPS Guidance Midpoint Targeting Double - Digit EPS Growth 2016 Divestitures Sales Inflections Other Sales Growth Operational Performance Restructuring Benefits F/X Hedges 2017 2016 EPS Guidance Midpoint Targeting Double - Digit EPS Growth • Resins & Chemicals • Government Services • Restructuring Benefits From 3Q16 Funding • Euro Hedged At $1.15 In 2017 vs . $ 1.10 In 2016 • Anticipating Low - Single Digit Sales Growth EPS Excludes Any Pension Mark - to - Market Adjustment And Contemplated Debt Refinancing Charges • Expect 45 - 75 bps Margin Expansion • Solstice Ramp • Connected Offerings • UOP Growth • M&A Contributes
Mad Money Briefing October 13, 2016 Substantial Capital Put To Work For Shareowners 9 $1.5B $0.9B $4M $1.7B $1.9B $5.2B ~ [VALUE] ~$1.9B ~$2.6B Dividends Share Repurchases M&A 2014 2015 2016E 2014 2015 3Q16E YTD 2015 3Q16E YTD 2014 • Attractive Returns From Nine Acquisitions Over Past 18 Months • Continuing To Improve Growth Profile Through Acquisitions And Divestitures ~$0.5B AdvanSix Share Dividend
Mad Money Briefing October 13, 2016 ~$11B, ~5% CAGR ~$20B, 8% - 10% CAGR 8% CAGR New $7B+ Connectivity Market $4B, 10% CAGR Improving Growth Profile Through Portfolio Management 10 • Advanced Gas Heating, Controls And Metering • Space - Based Communications Components and Related Subsystems • On - Board Communications Routing Software , In - Flight Airtime and Consulting • Software As A Service That Reduces Airline Fuel Consumption • Smoke Detection, Advanced Perimeter Security and Video Analytics Software • Created One Of The World’s First Cloud Platforms For Field Service Applications • Resins And Chemicals: Cyclical Commodity Chemicals Business • Honeywell Technology Solutions: Less Technology Differentiation Elster Intelligrated Xtralis Movilizer Com Dev SatCom1 Aviaso Divestitures • Warehouse Automation And Software , Addressing e - Commerce Trend Market Size, Growth Portfolio Offering Low Growth • Growing Faster Than High - Purity Research Chemicals Market Sigma Aldrich (Research Chemicals) ~2.5% CAGR
Mad Money Briefing October 13, 2016 [VALUE ] B [VALUE ] B [VALUE ] B 164% 159% 158% 2014 2015 2016E CapEx Reinvestment Ratio High ROI Capital Expenditures R&D >7% Of Sales Investing Significantly To Grow The Business R&D Includes Customer - Funded R&D [VALUE ] B [VALUE ] B [VALUE ] B 7.3% 7.4% 7.5% 2014 2015 2016E R&D ($B) % of Sales ~10,000 ~10,300 ~11,500 2014 2015 3Q16E Census Growth In Sales Employees [VALUE ] M [VALUE ] M ~$260M + 2014 2015 3Q16E YTD . Restructuring Investments, Included In EPS 11 Reinvestment Ratio = CapEx / Depreciation
Mad Money Briefing October 13, 2016 Building An Industry - Leading Aerospace Installed Base 12 OEM Incentive Investments (All Expensed) • Large Wins On The Right Platforms Accelerate Growth • 17 New Aircraft Launching; 200 + New Products • Massive Installed Base • Conservative Accounting For Incentives - All Expensed Through P&L 2015 2016E 2017E 2018E 2019E ~($0.25) Impact YoY
Mad Money Briefing October 13, 2016 Flight Hours Growing, Demand For Connectivity Half Our 23,000 Engineers Developing Software Today Differentiated HGR Presence And Strategies Nearly 50% Of HON Portfolio Dedicated To Energy Solutions Investing For Growth Through Smart Capital Investments Aerospace Leading The Connected Aircraft Era With JetWave Solution Industry Leading Turbo Technology And Global Scale A Strong Portfolio Aligned To Favorable Macro Trends 13 Why We Win Market Drivers Turbo Penetration Increasing HGR Growth In Urbanization And Infrastructure 3Q Bottom For HON Oil & Gas Increasing Energy Efficiency Standards Internet Of Things (IoT) Growing Environmentally Friendly Refrigerants In Advanced Materials Demand For Low - Global - Warming - Potential
Mad Money Briefing October 13, 2016 Leading The Connected Aircraft Evolution 14 Fast Network Hardware | Equipment Software Expertise Content Delivery Services | App Store Exclusive Inmarsat Network | Airtime Offering JetWave Cockpit, Mechanical Leadership Easier, Faster Digital Delivery Of Upgrades (RMUs) Via Software GoDirect Services And Apps Inside 95% Commercial Satellites Airtime SERVICES & APPS PASSENGER AIRPORT & OPERATIONS PILOT BUSINESS TRAVELER
Mad Money Briefing October 13, 2016 Golden Age Of Turbos 15 Regulations Becoming More Stringent 2000 2010 2020 2030 2040 2050 33% 2015 ~70% 47% 2020 Recent Upgrades Real Driving Emissions From 2017 Small Engines Incentives Euro 5 † From 2017 Commercial Vehicles CO 2 Target Redefinition Euro 6 † From 2020 MPG MPG MPG Improvement By 2021 Improvement By 2025 Improvement By 2020 MPG Improvement By 2022 Turbo No - Compromise Solution ~Half Of All Vehicles Turbocharged By 2020 Improvement By 2017 MPG * Source ICCT Fuel Economy Standards – August 2015 Light Vehicles Only. MPG Improvement vs 2014 Levels. † Equivalent Standards to Euro 5 (5mg/km PM, 60 - 180mg/km NOx) and Euro 6 (5mg/km PM, 60 - 80mg/km NOx) Turbo Penetration Enacted Targets* 20% CO 2 +30% Torque +25% Fuel Efficiency ~$20B Industry At Maturity 3L 6 Cylinders Naturally Aspirated 2L 4 Cylinders Turbocharged = 240 Horsepower 240 Horsepower Source: Honeywell Forecast
Mad Money Briefing October 13, 2016 Growth In Today’s Connected World (IoT) 16 ∂ BUILDINGS + CONNECTED 10M GLOBAL INSTALLED BASE VEHICLES + CONNECTED 100M GLOBAL INSTALLED BASE WORKERS + CONNECTED 550M GLOBAL PPE USERS HOMES + CONNECTED 150M GLOBAL INSTALLED BASE PLANTS + CONNECTED 10K+ GLOBAL INSTALLED BASE AIRCRAFT + CONNECTED 130K TOTAL AIRCRAFT ~10 control points 100,000+ control points 10,000 control points Decades of Lifespan Untethered Global Mobility Hyper - Scale Data Collection And Analysis Connected , Inter - Twined Systems, Applications And Networks K EY TRENDS ARE RAPIDLY SHAPING THE LANDSCAPE C ONNECTED O FFERINGS /I O T O PPORTUNITY >$6T IMPACT * 1985 1995 2005 2015 Bringing Our ADVANTAGE * Source: McKinsey Global Institute - est. global economy impact by 2025 HON Installed Base Market Trends
Mad Money Briefing October 13, 2016 Half Our Engineers Developing Software Today 17 Engineers Software Engineers Total Engineers Why Successful? • CMMI Level 5 Across Company • 77% Of HOS Gold Breakthrough Goals • Simulation, Product Enablement, Business Levels 22,800 Chemical Electrical Mechanical Software 49% 11,100 51% 11,700 11,100 PMT ACS AERO 46% Of Engineers 54% Of Engineers 50% Of Engineers CMMI = Capability Maturity Model Integration
Mad Money Briefing October 13, 2016 1.7% Growth 4.2% Growth HGR Developed Market ~18,000 ~58,000 2003 2016 World GDP Honeywell Census High Growth Regions Penetration 18 59% Of 2016 World GDP 41% Of 2016 World GDP Source: IHS Global Insight Growth Rate Is 20 Year CAGR From 2015 To 2035 ~220% Growth In HGR Census
Mad Money Briefing October 13, 2016 PMT Sales Growth From Smart Capital Investments 19 New Capacity Additions Deliver High ROI Revenue From Growth Capital Projects • Capital Investments Delivering 30% - 40% Returns • UOP Catalyst Capacity Expansion Supported By Large Installed Base Driving Robust Demand 2014 2015 2016 2020 2017 2018 2019 $0 $1,600 $0.2B $0.5B $1.2B $1.4B $1.5B $0.7B $1.1B • Low - Global - Warming - Potential HFO Demand Converts To $1B+ Solstice Sales Per Year By 2020 Information As Of Honeywell’s March 2016 Annual Investor Conference
Mad Money Briefing October 13, 2016 Energy Efficiency And Clean Energy Generation By immediately and comprehensively adopting existing Honeywell products and solutions, the U.S. could reduce energy consumption 20 to 25% . Biofuels Air Traffic Modernization Low - Global - Warming Refrigerants Fuel - Efficient Turbochargers Industrial Process Efficiency Demand Response & Smart Grid Energy Performance Contracts With nearly 50% of our portfolio dedicated to energy solutions, Honeywell is leading the charge in energy efficiency and clean energy generation. Green Buildings 20
Mad Money Briefing October 13, 2016 HON Business Model 21 • 5 Initiatives / 12 Behaviors • Management Resource Review - CEO Interviews Top 200 Roles • Customer Focused • Trick Is In The Doing - The Machinery Needs To Work - Go Slow To Go Fast - Achieve Two Seemingly Conflicting Things • Constantly Evolving • One Honeywell • Innovation Mindset One Honeywell Culture • Great Positions In Good Industries • Diversity Of Opportunity • M&A Upgrades Growth Portfolio • Balanced Portfolio - Long / Short Cycle - Early / Mid / Late Cycle • Globalization Continues • HOS Gold - Initiatives Integrated - Breakthrough Goals • Functional Transformation • Software Development Portfolio Processes Applied To
Mad Money Briefing October 13, 2016 22 Honeywell Is A Bargain! 0 5 10 15 20 25 MMM ITW GE EMR XLI HON COL UTX 2016 P/E Ratio 118% 67% 81% 69% 2011 - 2015 TSR HON Peer Average S&P XLI Peer Average Consists Of GE, UTX, MMM, ITW, EMR, COL EPS Excludes Any Pension Mark - to - Market Adjustment And Contemplated Debt Refinancing Charges
Mad Money Briefing October 13, 2016 23 Appendix
Mad Money Briefing October 13, 2016 24 Reconciliation Of EPS To EPS, Excluding Pension Mark - To - Market Adjustment 2007 (1) 2008 (2) 2009 (3) 2010 (4) 2011 (5) 2012 (6) 2013 (7) 2014 (8) 2015 (9) EPS $3.35 $1.08 $2.05 $2.59 $2.61 $3.69 $4.92 $5.33 $6.04 Pension Mark-to-Market Adjustment 0.01 2.74 0.64 0.41 1.44 0.79 0.05 0.23 0.06 EPS, Excluding Pension Mark-to-Market Adjustment $3.36 $3.82 $2.69 $3.00 $4.05 $4.48 $4.97 $5.56 $6.10 (1) Utilizes weighted average shares of 774.2 million. Mark-to-market uses a blended tax rate of 30.8%. (2) Utilizes weighted average shares of 743.5 million. Mark-to-market uses a blended tax rate of 38.2%. (3) Utilizes weighted average shares of 755.7 million. Mark-to-market uses a blended tax rate of 34.4%. (4) Utilizes weighted average shares of 780.9 million. Mark-to-market uses a blended tax rate of 32.3%. (5) Utilizes weighted average shares of 791.6 million. Mark-to-market uses a blended tax rate of 36.9%. (6) Utilizes weighted average shares of 791.9 million. Mark-to-market uses a blended tax rate of 35.0%. (7) Utilizes weighted average shares of 797.3 million. Mark-to-market uses a blended tax rate of 25.5%. (8) Utilizes weighted average shares of 795.2 million. Mark-to-market uses a blended tax rate of 28.1%. (9) Utilizes weighted average shares of 789.3 million. Mark-to-market uses a blended tax rate of 36.1%.