|
|
|
SECURITIES AND EXCHANGE COMMISSION |
|
WASHINGTON, D.C. 20549 |
|
|
|
|
|
|
|
FORM 8-K |
|
CURRENT
REPORT |
|
DATE OF REPORT –
October 19, 2012 |
|
|
|
HONEYWELL INTERNATIONAL INC. |
|
(Exact name of Registrant as specified in its Charter) |
|
|
|
|
|
DELAWARE |
1-8974 |
22-2640650 |
|
|
|
|
101 COLUMBIA ROAD, P.O. BOX 4000, MORRISTOWN, NEW JERSEY |
07962-2497 |
|
(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:
|
|
|
|
o |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
o |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
o |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
o |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
EARNINGS RELEASE.
Honeywell International Inc. will hold its conference call regarding third quarter earnings on Wednesday, October 19, 2012 at 9:30 a.m. Eastern Time. The earnings release was distributed on PR Newswire prior to the conference call. Interested investors may access the conference call by dialing (877) 303-4382 through a World Wide Web simulcast available at the “Investor Relations” section of the company’s website (http://www.honeywell.com/investor). Related presentation materials will also be posted to the Investor Relations section of the website prior to the conference call. Investors are advised to log on to the website at least 15 minutes prior to the conference call to allow sufficient time for downloading any necessary software.
Honeywell International Inc. issued a press release announcing its third quarter 2012 earnings on October 19, 2012, which is attached as an exhibit to this report.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
|
|
|
|
(d) |
Exhibit 99 |
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 19, 2012 |
HONEYWELL INTERNATIONAL INC. |
|
|
|
||
|
|
By: |
/s/ Thomas F. Larkins |
|
|
|
|
|
|
Thomas F. Larkins |
|
|
|
Vice President, Corporate Secretary and |
|
|
|
Deputy General Counsel |
|
Exhibit 99
News Release
| Contacts: | |
| Media | Investor Relations |
| Robert C. Ferris | Elena Doom |
| (973) 455-3388 | (973) 455-2222 |
| rob.ferris@honeywell.com | elena.doom@honeywell.com |
HONEYWELL REPORTS THIRD QUARTER 2012
SALES OF $9.3 BILLION; EPS UP 9% TO $1.20 PER SHARE
| · | 9% EPS Growth Driven By Strong Operational Performance And Sales Conversion |
| · | Continued Americas And High Growth Region Expansion, Europe As Expected |
| · | Segment Margin Increase Of 110 Bps To 15.8%, Operating Margin Up 360 Bps |
| · | Narrowing 2012 Proforma EPS Guidance To $4.45 - $4.50, From $4.40 - $4.55 |
MORRIS TOWNSHIP, N.J., October 19, 2012 -- Honeywell (NYSE: HON) today announced its results for the third quarter of 2012:
| Total Honeywell | |||
| ($ Millions, except Earnings Per Share) | 3Q 2011 | 3Q 2012 | Change |
| Sales | 9,298 | 9,342 | ~ flat |
| Segment Margin | 14.7% | 15.8% | 110 bps |
| Operating Income Margin | 10.3% | 13.9% | 360 bps |
| Earnings Per Share from Continuing Operations | $0.87 | $1.20 | 38% |
| Earnings Per Share | $1.10 | $1.20 | 9% |
| Cash Flow from Operations | 661 | 999 | 51% |
| Free Cash Flow * | 922 | 1,021 | 11% |
| * Free Cash Flow (cash flow from operations less capital expenditures) prior to cash pension contributions | |||
“Honeywell delivered 2% organic sales growth, strong sales conversion and higher earnings per share in the third quarter,” said Honeywell Chairman and CEO Dave Cote. “Our balanced mix of long- and short-cycle businesses, combined with growth in new products and continued expansion in high growth regions, offset European weakness, lower demand for products in some of our short-cycle businesses in China and the U.S., and foreign exchange headwinds in the quarter. Further, we maintained strong backlogs with new platform wins across a number of our businesses. We continue to be encouraged by the commercial aerospace outlook, increasing infrastructure spending, and oil and gas investments. These trends, combined with our
-MORE-
Q3’12 Results - 2
great positions in good industries, leverage to other macro-trends like safety and security, energy efficiency, and clean energy generation are expected to drive our continued outperformance. Looking ahead to 2013, we are planning for a continued challenging macro environment, but expect to deliver good growth driven by new products, geographic expansion, and traction on key initiatives. Further, we will remain flexible and adhere to our disciplined focus on cost and productivity.”
Third quarter 2012 Earnings Per Share (EPS) reflects a 22.7% effective tax rate compared to 23.2% last year. Adjusting for a normalized tax rate of 26.5% in 2011 and 2012, EPS growth would be 8%. The tax rate favorability in the third quarter of this year, representing $0.06 of EPS relative to guidance, is expected to be offset in the fourth quarter, with an estimated full year 2012 effective tax rate of 26.5%.
The company is updating its full-year 2012 sales and EPS guidance and now expects:
| Full Year Guidance | |||
| 2012 | 2012 | Change | |
| Prior Guidance | Revised Guidance | vs. 2011 | |
| Sales | $37.8 - $38.4B | $37.5 - $37.7B | ~ 3% |
| Segment Margin | 15.4 - 15.6% | 15.6 - 15.7% | 90 - 100 bps |
| Operating Income Margin1 | 13.4 - 13.6% | 13.5 - 13.7% | 150 - 170 bps |
| Earnings Per Share from Continuing Operations2 | $4.40 - $4.55 | $4.45 - $4.50 | 11% - 12% |
| Earnings Per Share1 | $4.40 - $4.55 | $4.45 - $4.50 | 10% - 11% |
| Free Cash Flow3 | ~$3.5B | ~$3.5 - $3.6B | ~100% Conversion |
| 1. | Proforma, V% / BPS Excludes Any Pension Mark to Market Adjustment | |
| 2. | Proforma (Cont. Operations); Excludes Any Pension Mark to Market Adjustment; V% Also Excludes 3Q11 Repo and Other Actions Funded by Gain on Sale of CPG Business (in Disc. Ops) | |
| 3. | Free Cash Flow (Cash Flow from Operations Less Capital Expenditures) Prior to Any NARCO Related Payments and Cash Pension Contributions |
Third Quarter Segment Performance
| Aerospace | |||
| ($ Millions) | 3Q 2011 | 3Q 2012 | % Change |
| Sales | 2,922 | 3,043 | 4% |
| Segment Profit | 532 | 582 | 9% |
| Segment Margin | 18.2% | 19.1% | 90 bps |
-MORE-
Q3’12 Results - 3
| · | Sales were up 4% compared with the third quarter of 2011 driven by a 9% increase in our Commercial end markets, partially offset by a (1%) decline in Defense and Space. Commercial original equipment (OE) sales were up 14% driven by increased production rates at our major OE customers. Commercial aftermarket sales were up 6% with growth in both business jet spares and repair and overhaul events. |
| · | Segment profit was up 9%, and segment margins expanded 90 bps to 19.1%, primarily due to higher commercial volumes and productivity net of inflation and increased investments to support future growth. |
| Automation and Control Solutions | |||
| ($ Millions) | 3Q 2011 | 3Q 2012 | % Change |
| Sales | 3,948 | 3,958 | ~ flat |
| Segment Profit | 544 | 571 | 5% |
| Segment Margin | 13.8% | 14.4% | 60 bps |
| · | Sales were approximately flat, up 2% on an organic basis, compared with the third quarter of 2011. Volume growth and the favorable impact of acquisitions were offset by foreign exchange headwinds. Process Solutions and Building Solutions and Distribution grew on an organic basis reflecting increased conversion of sales from backlog and increased sales volume in our Fire and Security Distribution business in the Americas. Energy, Safety, and Security was flat organically due to weak industrial end markets globally. |
| · | Segment profit was up 5% and segment margins were up 60 bps to 14.4% driven by commercial excellence and productivity benefits net of inflation. |
| Performance Materials and Technologies | |||
| ($ Millions) | 3Q 2011 | 3Q 2012 | % Change |
| Sales | 1,468 | 1,478 | 1% |
| Segment Profit | 254 | 275 | 8% |
| Segment Margin | 17.3% | 18.6% | 130 bps |
| · | Sales were up 1%, reported and organic, compared with the third quarter of 2011, resulting from higher licensing and equipment sales in UOP and new products and applications in Specialty Products and Electronic Materials, partially offset by challenging global end market conditions in Fluorine Products and Resins and Chemicals. |
| · | Segment profit was up 8% and segment margins increased 130 bps to 18.6%, primarily due to higher sales at UOP and productivity net of inflation and continued growth investments, partially offset by challenging global end market conditions in Fluorine Products and Resins and Chemicals. |
-MORE-
Q3’12 Results - 4
| Transportation Systems | |||
| ($ Millions) | 3Q 2011 | 3Q 2012 | % Change |
| Sales | 960 | 863 | (10%) |
| Segment Profit | 121 | 104 | (14%) |
| Segment Margin | 12.6% | 12.1% | (50) bps |
| · | Sales were down (10%), down (2%) organic, compared with the third quarter of 2011, as new platform launches and higher turbo gas penetration in the U.S. nearly offset the unfavorable impact of foreign exchange, and lower European light vehicle production volume and aftermarket sales. |
| · | Segment profit was down (14%) and segment margins decreased (50) bps to 12.1% primarily driven by unfavorable foreign exchange, lower sales, and ongoing projects to drive operational improvement in the Friction Materials business, partially offset by productivity benefits. |
Honeywell will discuss its results during its investor conference call today starting at 9:30 a.m. EDT. To participate, please dial (877) 303-4382 (domestic) or (631) 291-4830 (international) a few minutes before the 9:30 a.m. EDT start. Please mention to the operator that you are dialing in for Honeywell’s investor conference call. The live webcast of the investor call will be available through the “Investor Relations” section of the company’s Website (http://www.honeywell.com/investor). Investors can access a replay of the conference call from 12:30 p.m. EDT, October 19, until midnight, October 26, dialing (855) 859-2056 (domestic) or (404) 537-3406 (international). The access code is 18261327.
Honeywell (www.honeywell.com) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes, and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywell’s shares are traded on the New York, London, and Chicago Stock Exchanges. For more news and information on Honeywell, please visit www.honeywellnow.com.
This release contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements.
# # #
Q3’12 Results - 5
Honeywell International Inc.
Consolidated Statement of Operations (Unaudited)
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
$ |
7,332 |
|
$ |
7,308 |
|
$ |
22,184 |
|
$ |
21,267 |
|
|
Service sales |
|
|
2,010 |
|
|
1,990 |
|
|
5,900 |
|
|
5,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
9,342 |
|
|
9,298 |
|
|
28,084 |
|
|
27,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs, expenses and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold (A) |
|
|
5,474 |
|
|
5,739 |
|
|
16,627 |
|
|
16,358 |
|
|
Cost of services sold (A) |
|
|
1,334 |
|
|
1,294 |
|
|
3,983 |
|
|
3,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,808 |
|
|
7,033 |
|
|
20,610 |
|
|
20,121 |
|
|
Selling, general and administrative expenses (A) |
|
|
1,238 |
|
|
1,303 |
|
|
3,695 |
|
|
3,783 |
|
|
Other (income) expense |
|
|
(16 |
) |
|
(21 |
) |
|
(54 |
) |
|
(72 |
) |
|
Interest and other financial charges |
|
|
88 |
|
|
90 |
|
|
264 |
|
|
285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,118 |
|
|
8,405 |
|
|
24,515 |
|
|
24,117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before taxes |
|
|
1,224 |
|
|
893 |
|
|
3,569 |
|
|
2,939 |
|
|
Tax expense |
|
|
278 |
|
|
207 |
|
|
893 |
|
|
767 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations after taxes |
|
|
946 |
|
|
686 |
|
|
2,676 |
|
|
2,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations after taxes |
|
|
— |
|
|
177 |
|
|
— |
|
|
209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
946 |
|
|
863 |
|
|
2,676 |
|
|
2,381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net (loss) income attributable to the noncontrolling interest |
|
|
(4 |
) |
|
1 |
|
|
1 |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Honeywell |
|
$ |
950 |
|
$ |
862 |
|
$ |
2,675 |
|
$ |
2,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Honeywell: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations less net income attributable to the noncontrolling interest |
|
|
950 |
|
|
685 |
|
|
2,675 |
|
|
2,168 |
|
|
Income from discontinued operations |
|
|
— |
|
|
177 |
|
|
— |
|
|
209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Honeywell |
|
$ |
950 |
|
$ |
862 |
|
$ |
2,675 |
|
$ |
2,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of common stock - basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
1.21 |
|
|
0.88 |
|
|
3.43 |
|
|
2.77 |
|
|
Income from discontinued operations |
|
|
— |
|
|
0.23 |
|
|
— |
|
|
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Honeywell |
|
$ |
1.21 |
|
$ |
1.11 |
|
$ |
3.43 |
|
$ |
3.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of common stock - assuming dilution: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
1.20 |
|
|
0.87 |
|
|
3.38 |
|
|
2.73 |
|
|
Income from discontinued operations |
|
|
— |
|
|
0.23 |
|
|
— |
|
|
0.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Honeywell |
|
$ |
1.20 |
|
$ |
1.10 |
|
$ |
3.38 |
|
$ |
2.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding-basic |
|
|
783.6 |
|
|
778.2 |
|
|
780.7 |
|
|
782.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding - assuming dilution |
|
|
792.5 |
|
|
786.9 |
|
|
790.4 |
|
|
794.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Cost of products and services sold and selling, general and administrative expenses include amounts for repositioning and other charges, pension and other postretirement expense, and stock compensation expense.
Q3’12 Results - 6
Honeywell International Inc.
Segment Data (Unaudited)
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended |
|
Nine
Months Ended |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
Net Sales |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
3,043 |
|
$ |
2,922 |
|
$ |
9,020 |
|
$ |
8,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automation and Control Solutions |
|
|
3,958 |
|
|
3,948 |
|
|
11,708 |
|
|
11,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Materials and Technologies |
|
|
1,478 |
|
|
1,468 |
|
|
4,639 |
|
|
4,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Systems |
|
|
863 |
|
|
960 |
|
|
2,717 |
|
|
2,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
9,342 |
|
$ |
9,298 |
|
$ |
28,084 |
|
$ |
27,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Segment Profit to Income From Continuing Operations Before Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended |
|
Nine
Months Ended |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
Segment Profit |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
582 |
|
$ |
532 |
|
$ |
1,678 |
|
$ |
1,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automation and Control Solutions |
|
|
571 |
|
|
544 |
|
|
1,587 |
|
|
1,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Materials and Technologies |
|
|
275 |
|
|
254 |
|
|
944 |
|
|
819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Systems |
|
|
104 |
|
|
121 |
|
|
338 |
|
|
368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
(57 |
) |
|
(84 |
) |
|
(164 |
) |
|
(208 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Profit |
|
|
1,475 |
|
|
1,367 |
|
|
4,383 |
|
|
3,928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (A) |
|
|
4 |
|
|
8 |
|
|
18 |
|
|
36 |
|
|
Interest and other financial charges |
|
|
(88 |
) |
|
(90 |
) |
|
(264 |
) |
|
(285 |
) |
|
Stock compensation expense (B) |
|
|
(40 |
) |
|
(38 |
) |
|
(131 |
) |
|
(129 |
) |
|
Pension ongoing expense (B) |
|
|
(7 |
) |
|
(26 |
) |
|
(29 |
) |
|
(83 |
) |
|
Other postretirement income/(expense) (B) |
|
|
(20 |
) |
|
82 |
|
|
(52 |
) |
|
109 |
|
|
Repositioning and other charges (B) |
|
|
(100 |
) |
|
(410 |
) |
|
(356 |
) |
|
(637 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before taxes |
|
$ |
1,224 |
|
$ |
893 |
|
$ |
3,569 |
|
$ |
2,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) |
Equity income/(loss) of affiliated companies is included in Segment Profit. |
|
|
|
|
(B) |
Amounts included in cost of products and services sold and selling, general and administrative expenses. |
Q3’12 Results - 7
Honeywell International Inc.
Consolidated Balance Sheet (Unaudited)
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
|
December
31, |
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,760 |
|
$ |
3,698 |
|
|
Accounts, notes and other receivables |
|
|
7,388 |
|
|
7,228 |
|
|
Inventories |
|
|
4,314 |
|
|
4,264 |
|
|
Deferred income taxes |
|
|
573 |
|
|
460 |
|
|
Investments and other current assets |
|
|
711 |
|
|
484 |
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
17,746 |
|
|
16,134 |
|
|
|
|
|
|
|
|
|
|
|
Investments and long-term receivables |
|
|
600 |
|
|
494 |
|
|
Property, plant and equipment - net |
|
|
4,830 |
|
|
4,804 |
|
|
Goodwill |
|
|
11,916 |
|
|
11,858 |
|
|
Other intangible assets - net |
|
|
2,281 |
|
|
2,477 |
|
|
Insurance recoveries for asbestos related liabilities |
|
|
654 |
|
|
709 |
|
|
Deferred income taxes |
|
|
1,766 |
|
|
2,132 |
|
|
Other assets |
|
|
1,281 |
|
|
1,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
41,074 |
|
$ |
39,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREOWNERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
4,518 |
|
$ |
4,738 |
|
|
Short-term borrowings |
|
|
75 |
|
|
60 |
|
|
Commercial paper |
|
|
899 |
|
|
599 |
|
|
Current maturities of long-term debt |
|
|
624 |
|
|
15 |
|
|
Accrued liabilities |
|
|
6,597 |
|
|
6,863 |
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
12,713 |
|
|
12,275 |
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
6,391 |
|
|
6,881 |
|
|
Deferred income taxes |
|
|
679 |
|
|
676 |
|
|
Postretirement benefit obligations other than pensions |
|
|
1,346 |
|
|
1,417 |
|
|
Asbestos related liabilities |
|
|
1,531 |
|
|
1,499 |
|
|
Other liabilities |
|
|
5,195 |
|
|
6,158 |
|
|
Shareowners’ equity |
|
|
13,219 |
|
|
10,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareowners’ equity |
|
$ |
41,074 |
|
$ |
39,808 |
|
|
|
|
|
|
|
|
|
|
Q3’12 Results - 8
Honeywell International Inc.
Consolidated Statement of Cash Flows (Unaudited)
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended |
|
Nine
Months Ended |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Honeywell |
|
$ |
950 |
|
$ |
862 |
|
$ |
2,675 |
|
$ |
2,377 |
|
|
Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
226 |
|
|
226 |
|
|
681 |
|
|
704 |
|
|
Gain on sale of non-strategic businesses and assets |
|
|
(4 |
) |
|
(307 |
) |
|
(3 |
) |
|
(353 |
) |
|
Repositioning and other charges |
|
|
100 |
|
|
410 |
|
|
356 |
|
|
637 |
|
|
Net payments for repositioning and other charges |
|
|
(126 |
) |
|
(128 |
) |
|
(352 |
) |
|
(335 |
) |
|
Pension and other postretirement expense |
|
|
27 |
|
|
(56 |
) |
|
81 |
|
|
(24 |
) |
|
Pension and other postretirement benefit payments |
|
|
(291 |
) |
|
(486 |
) |
|
(888 |
) |
|
(1,568 |
) |
|
Stock compensation expense |
|
|
40 |
|
|
38 |
|
|
131 |
|
|
129 |
|
|
Deferred income taxes |
|
|
130 |
|
|
39 |
|
|
319 |
|
|
197 |
|
|
Excess tax benefits from share based payment arrangements |
|
|
(12 |
) |
|
(1 |
) |
|
(28 |
) |
|
(31 |
) |
|
Other |
|
|
143 |
|
|
(84 |
) |
|
39 |
|
|
56 |
|
|
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts, notes and other receivables |
|
|
(140 |
) |
|
104 |
|
|
(160 |
) |
|
(433 |
) |
|
Inventories |
|
|
25 |
|
|
(51 |
) |
|
(53 |
) |
|
(440 |
) |
|
Other current assets |
|
|
(62 |
) |
|
(30 |
) |
|
(77 |
) |
|
(53 |
) |
|
Accounts payable |
|
|
(29 |
) |
|
105 |
|
|
(220 |
) |
|
365 |
|
|
Accrued liabilities |
|
|
22 |
|
|
20 |
|
|
(333 |
) |
|
128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
999 |
|
|
661 |
|
|
2,168 |
|
|
1,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for property, plant and equipment |
|
|
(234 |
) |
|
(177 |
) |
|
(586 |
) |
|
(466 |
) |
|
Proceeds from disposals of property, plant and equipment |
|
|
1 |
|
|
— |
|
|
2 |
|
|
3 |
|
|
Increase in investments |
|
|
(237 |
) |
|
(93 |
) |
|
(482 |
) |
|
(322 |
) |
|
Decrease in investments |
|
|
129 |
|
|
112 |
|
|
287 |
|
|
288 |
|
|
Cash paid for acquisitions, net of cash acquired |
|
|
2 |
|
|
(619 |
) |
|
(62 |
) |
|
(627 |
) |
|
Proceeds from sales of businesses, net of fees paid |
|
|
— |
|
|
955 |
|
|
18 |
|
|
1,170 |
|
|
Other |
|
|
17 |
|
|
9 |
|
|
(42 |
) |
|
67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used for)/provided by investing activities |
|
|
(322 |
) |
|
187 |
|
|
(865 |
) |
|
113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net(decrease)/increase in commercial paper |
|
|
(49 |
) |
|
350 |
|
|
300 |
|
|
401 |
|
|
Net increase/(decrease) in short-term borrowings |
|
|
8 |
|
|
(2 |
) |
|
19 |
|
|
(4 |
) |
|
Proceeds from issuance of common stock |
|
|
63 |
|
|
32 |
|
|
179 |
|
|
232 |
|
|
Proceeds from issuance of long-term debt |
|
|
44 |
|
|
5 |
|
|
86 |
|
|
1,389 |
|
|
Payments of long-term debt |
|
|
— |
|
|
— |
|
|
— |
|
|
(439 |
) |
|
Excess tax benefits from share based payment arrangements |
|
|
12 |
|
|
1 |
|
|
28 |
|
|
31 |
|
|
Repurchases of common stock |
|
|
— |
|
|
(505 |
) |
|
— |
|
|
(1,009 |
) |
|
Cash dividends paid |
|
|
(298 |
) |
|
(266 |
) |
|
(880 |
) |
|
(796 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for financing activities |
|
|
(220 |
) |
|
(385 |
) |
|
(268 |
) |
|
(195 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign exchange rate changes on cash and cash equivalents |
|
|
82 |
|
|
(126 |
) |
|
27 |
|
|
(39 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
539 |
|
|
337 |
|
|
1,062 |
|
|
1,235 |
|
|
Cash and cash equivalents at beginning of period |
|
|
4,221 |
|
|
3,548 |
|
|
3,698 |
|
|
2,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
4,760 |
|
$ |
3,885 |
|
$ |
4,760 |
|
$ |
3,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3’12 Results - 9
Honeywell International Inc.
Reconciliation of Cash Provided by Operating Activities to Free Cash
Flow, Prior to Cash Pension Contributions (Unaudited)
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
|
|
|
2012 |
|
2011 |
|
2012E |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities |
|
$ |
999 |
|
$ |
661 |
|
|
~$3,500 - 3,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for property, plant and equipment |
|
|
(234 |
) |
|
(177 |
) |
|
~(1,000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow |
|
$ |
765 |
|
$ |
484 |
|
|
~$2,500 - 2,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash pension contributions |
|
|
256 |
|
|
438 |
|
|
~1,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow, prior to cash pension contributions |
|
$ |
1,021 |
|
$ |
922 |
|
|
~$3,500 - 3,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
We define free cash flow as cash provided by operating activities, less cash expenditures for property, plant and equipment.
We believe that this metric is useful to investors and management as a measure of cash generated by business operations that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business development activities or acquisitions, and to pay dividends, repurchase stock, repay debt obligations prior to their maturities, or make cash pension contributions. This metric can also be used to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on our liquidity.
In reference to free cash flow conversion on page 2, we define free cash flow conversion as free cash flow prior to any NARCO related payments and cash pension contributions divided by net income attributable to Honeywell excluding pension mark to market adjustment.
Q3’12 Results - 10
Honeywell International Inc.
Reconciliation of Segment Profit to Operating Income Excluding Pension
Mark to Market Adjustment and Calculation of Segment
Profit and Operating
Income Margin Excluding Pension Mark to Market Adjustment (Unaudited)
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
||||
|
|
|
|
|
||||
|
|
|
2012 |
|
2011 |
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Segment Profit |
|
$ |
1,475 |
|
$ |
1,367 |
|
|
|
|
|
|
|
|
|
|
|
Stock compensation expense (A) |
|
|
(40 |
) |
|
(38 |
) |
|
Repositioning and other (A, B) |
|
|
(112 |
) |
|
(423 |
) |
|
Pension ongoing expense (A) |
|
|
(7 |
) |
|
(26 |
) |
|
Other postretirement income/(expense) (A) |
|
|
(20 |
) |
|
82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
1,296 |
|
$ |
962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit |
|
$ |
1,475 |
|
$ |
1,367 |
|
|
÷ Sales |
|
$ |
9,342 |
|
$ |
9,298 |
|
|
|
|
|
|
|
|
|
|
|
Segment Profit Margin % |
|
|
15.8% |
|
|
14.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
1,296 |
|
$ |
962 |
|
|
÷ Sales |
|
$ |
9,342 |
|
$ |
9,298 |
|
|
|
|
|
|
|
|
|
|
|
Operating Income Margin % |
|
|
13.9% |
|
|
10.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
|
2012 Guidance |
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Segment Profit |
|
$ |
5,357 |
|
|
~$5,800 - $5,900 |
|
|
|
|
|
|
|
|
|
|
|
Stock compensation expense (A) |
|
|
(168 |
) |
|
~(175) |
|
|
Repositioning and other (A, B) |
|
|
(794 |
) |
|
~(425) - (450) |
|
|
Pension ongoing expense (A) |
|
|
(105 |
) |
|
~(50) |
|
|
Pension mark to market adjustment (A) |
|
|
(1,802 |
) |
|
TBD |
|
|
Other postretirement income/(expense) (A) |
|
|
86 |
|
|
~(75) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
2,574 |
|
|
~$5,075 - $5,150 |
|
|
Pension mark to market adjustment (A) |
|
$ |
(1,802 |
) |
|
TBD |
|
|
|
|
|
|
|
|
|
|
|
Operating Income excluding pension mark to market adjustment |
|
$ |
4,376 |
|
|
~$5,075 - $5,150 |
|
|
|
|
|
|
|
|
|
|
|
Segment Profit |
|
$ |
5,357 |
|
|
~$5,800 - $5,900 |
|
|
÷ Sales |
|
$ |
36,529 |
|
|
$37,500 - $37,700 |
|
|
|
|
|
|
|
|
|
|
|
Segment Profit Margin % |
|
|
14.7% |
|
|
15.6 - 15.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
2,574 |
|
|
~$5,075 - $5,150 |
|
|
÷ Sales |
|
$ |
36,529 |
|
|
$37,500 - $37,700 |
|
|
|
|
|
|
|
|
|
|
|
Operating Income Margin % |
|
|
7.0% |
|
|
13.5 - 13.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income excluding pension mark to market adjustment |
|
$ |
4,376 |
|
|
~$5,075 - $5,150 |
|
|
÷ Sales |
|
$ |
36,529 |
|
|
$37,500 - $37,700 |
|
|
|
|
|
|
|
|
|
|
|
Operating Income Margin excluding pension mark to market adjustment % |
|
|
12.0% |
|
|
13.5 - 13.7% |
|
|
|
|
|
|
|
|
|
|
(A) Included
in cost of products and services sold and selling, general and administrative
expenses.
(B) Includes repositioning, asbestos, environmental expenses and equity income
adjustment
Q3’12 Results - 11
Honeywell International Inc.
Reconciliation of Earnings Per Share to
Earnings Per Share, Excluding Pension Mark to Market Adjustment
and Third Quarter 2011 Repositioning and Other Actions Funded by Gain on Sale
of CPG Business (CPG Gain)
|
|
|
|
|
|
|
|
|
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS - continuing operations assuming dilution |
|
$ |
2.35 |
|
|
|
|
|
|
|
|
Pension mark to market adjustment |
|
$ |
1.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS - continuing operations assuming dilution, excluding pension mark to market adjustment |
|
$ |
3.79 |
|
|
|
|
|
|
|
|
Third quarter 2011 repositioning and other actions funded by CPG Gain |
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS - continuing operations assuming dilution, excluding pension mark to market adjustment and third quarter 2011 repositioning and other actions funded by CPG Gain |
|
$ |
4.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS - Total Honeywell assuming dilution |
|
$ |
2.61 |
|
|
|
|
|
|
|
|
Pension mark to market adjustment |
|
$ |
1.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS - Total Honeywell assuming dilution, excluding pension mark to market adjustment |
|
$ |
4.05 |
|
|
|
|
|
|
|
We believe EPS, excluding pension mark to market adjustment and third quarter 2011 repositioning and other actions funded by CPG Gain, is a metric that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.
EPS utilizes weighted average shares outstanding of 791.6 million and the effective tax rate for the period. Mark to market uses a blended tax rate of 36.9%.