-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nq6772X5KqZ+Hg41u3ivXmtZ3k8HTqRTSzrrG/GQeWJKtSEfaONpPKtFdedb+WVi 9U9zpEF3pJFjmgjduQwn3w== 0000912057-96-006700.txt : 19960422 0000912057-96-006700.hdr.sgml : 19960422 ACCESSION NUMBER: 0000912057-96-006700 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960419 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HONEYWELL INC CENTRAL INDEX KEY: 0000048305 STANDARD INDUSTRIAL CLASSIFICATION: AUTO CONTROLS FOR REGULATING RESIDENTIAL & COMML ENVIRONMENT [3822] IRS NUMBER: 410415010 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-02589 FILM NUMBER: 96548643 BUSINESS ADDRESS: STREET 1: HONEYWELL PLZ CITY: MINNEAPOLIS STATE: MN ZIP: 55408 BUSINESS PHONE: 6129511000 MAIL ADDRESS: STREET 1: PO BOX 524 CITY: MINEAPOLIS STATE: MN ZIP: 55440-0524 FORMER COMPANY: FORMER CONFORMED NAME: MINNEAPOLIS HONEYWELL REGULATOR CO DATE OF NAME CHANGE: 19670213 424B2 1 424B2 The information contained herein is subject to completion or amendment. SUBJECT TO COMPLETION, DATED APRIL 18, 1996 PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 18, 1996 $300,000,000 HONEYWELL INC. $ % NOTES DUE , 2001 $ % NOTES DUE , 2008 ------------------ Interest on the % Notes due , 2001 (the "2001 Notes") and the % Notes due , 2008 (the "2008 Notes" and, together with the 2001 Notes, the "Notes") is payable on and of each year, commencing . The Notes are not redeemable prior to maturity and will not be subject to any sinking fund. The Notes will be represented by a global security registered in the name of a nominee of The Depository Trust Company (the "Depositary"). Beneficial interests in the Notes will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary (with respect to participants' interests) and its participants. The Notes will be issued only in denominations of $1,000 and integral multiples thereof. Except as described herein, Notes in definitive form will not be issued. See "Description of Notes--Book-Entry Procedures." ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO OFFERING PRICE (1) DISCOUNT (2) COMPANY (1)(3) ------------------- ------------ -------------- Per 2001 Note........................... % % % Total................................... $ $ $ Per 2008 Note........................... % % % Total................................... $ $ $
- ------------ (1) Plus accrued interest, if any, from , 1996. (2) The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. (3) Before deducting estimated expenses of $150,000 payable by the Company. ------------------------ The Notes offered hereby are offered severally by the Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that the Notes will be ready for delivery in book-entry form only through the facilities of The Depository Trust Company in New York, New York, on or about , 1996, against payment therefor in immediately available funds. GOLDMAN, SACHS & CO. CHASE SECURITIES INC. CITICORP SECURITIES, INC. J.P. MORGAN & CO. The date of this Prospectus Supplement is April , 1996. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE COMPANY Honeywell Inc. ("Honeywell" or the "Company") is a global controls company that supplies automation and control solutions to customers in the homes and buildings, industrial, and space and aviation markets. In 1995, the Company had sales in excess of $6.7 billion, approximately 39% of which were generated outside the United States. Honeywell is organized into three business segments: Home and Building Control, Industrial Control, and Space and Aviation Control. Home and Building Control, the largest of the three segments, accounted for approximately 45% of the Company's revenues in 1995. Honeywell's Home and Building Control products, which range from residential thermostats to sophisticated automation systems that control entire building complexes, have been sold to millions of homes and businesses worldwide. Approximately one half of this segment's sales in 1995 were derived outside the United States, and this segment has a strong installed customer base that provides significant ongoing business. Industrial Control offers automation and control solutions to customers in targeted market segments worldwide, including refining, petrochemical, pulp and paper, pharmaceuticals and consumer goods industries. Industrial Control products are designed to help customers improve productivity and meet increasingly stringent environmental and safety requirements. Industrial Control has an extensive customer base worldwide, including most of the leading oil refiners, pulp and paper manufacturers and chemical companies. This segment accounted for approximately 30% of Honeywell's sales in 1995, approximately half of which were generated internationally. Space and Aviation Control is a leading supplier of integrated avionics, products and systems to the commercial, military and space markets. This segment has a broad product line that includes flight management systems, cockpit displays, global positioning systems and traffic avoidance and collision systems. Honeywell avionics have been purchased by leading aircraft manufacturers for use in aircraft throughout the world, including the Boeing 777, the McDonnell Douglas MD-11 and MD-90, the GulfStream IV and V, the Cessna Citation X and the Bombardier Global Express jet. In the military and space markets, Honeywell solutions are found on key platforms, including the F-15 and the F-16 military jets and Space Station Alpha. In 1995, Space and Aviation Control accounted for approximately 23% of the Company's revenues. Space and Aviation Control sales to the U.S. Government and its agencies accounted for less than 5% of Honeywell's revenues in 1995. Honeywell believes that its businesses share a number of competitive advantages including superior technology, strong brand recognition, systems integration expertise, global reach, leading market position and an understanding of customer needs in the markets they serve. RECENT DEVELOPMENTS RESULTS OF OPERATIONS In the first quarter of 1996 the Company reported net income of $65.1 million, or $.51 per share, an increase of 19% compared with $54.7 million, or $.43 per share, in the first quarter of 1995. Sales in the first quarter of 1996 were $1.62 billion, an increase of approximately 10% compared with $1.48 billion in the corresponding period in 1995. Operating profit was $143.8 million, compared with $124.4 million in the first quarter of 1995. HOME AND BUILDING CONTROL. Operating profit for this business was $53.8 million, an increase of 8% from $49.9 million last year. Sales increased to $693.0 million from $643.1 million in the first quarter of 1995. Home and Building Control orders increased 9% from year-earlier levels. S-2 INDUSTRIAL CONTROL. Operating profit for this business was $50.0 million compared with $48.0 million in the preceding year. Sales in the first quarter were $501.9 million compared with $456.2 million last year. Industrial Control orders were up more than 6% from year-earlier levels. SPACE AND AVIATION CONTROL. Operating profit for this business was $39.1 million compared with $26.3 million in the first quarter of 1995. Sales were $398.3 million compared with $353.1 million a year earlier. Commercial aviation orders during the quarter were more than 10% higher than the comparative quarter in 1995. However, military and space orders declined, resulting in a 5% decline in total orders. ACQUISITIONS In March 1996, the Company completed the $283.0 million acquisition of Duracraft Corp., a manufacturer of home comfort products. In February, 1996, the Company completed the acquisition of the measurement and control sensor businesses of Leeds & Northrup. LITTON LITIGATION On March 13, 1990, Litton Systems, Inc. ("Litton") filed suit against the Company in U.S. District Court, Central District of California, alleging patent infringement relating to the process used by the Company to coat mirrors incorporated in its ring laser gyroscopes; attempted monopolization and predatory pricing by the Company of certain alleged markets for products containing ring laser gyroscopes; and intentional interference by the Company with Litton's prospective advantage in European markets and with its contractual relationships with Ojai Research, Inc., a California corporation. The Company generally denied Litton's allegations, contested both the validity and infringement of the patent, and alleged that the patent had been obtained by Litton's inequitable conduct before the United States Patent and Trademark Office. The Company also filed counterclaims against Litton alleging, among other things, that Litton's business and litigation conduct violated federal and state laws, causing the Company considerable damage and expense. On January 9, 1995, Judge Mariana Pfaelzer of the U.S. District Court set aside an August 1993 jury verdict and damage award of $1.2 billion against the Company in the patent and interference with contract case. She ruled, among other things, that the Litton patent was unenforceable because it was obtained by inequitable conduct and invalid because it was an invention that would have been obvious from combining existing processes. She further ruled that if her judgment were ever subsequently vacated or reversed on appeal, the Company would be granted a new trial on the issue of damages because the jury's 1993 award was inconsistent with the clear weight of the evidence and permitting it to stand would constitute a miscarriage of justice. Litton has appealed all of Judge Pfaelzer's rulings to the Court of Appeals for the Federal Circuit, Washington, D.C. Briefs for the appeal have been submitted by the parties and oral arguments were presented December 8, 1995. The Company believes that Judge Pfaelzer's rulings will be upheld on appeal. As a result, no provision has been made in the financial statements with respect to this contingent liability. The trial for the antitrust case began on November 20, 1995, before Judge Pfaelzer and a different jury. Prior to the jury's deliberations in the antitrust trial, the court dismissed, for failure of proof, Litton's contentions that the Company engaged in below-cost predatory pricing, illegal tying, bundling and illegally acquiring Sperry Avionics in 1986. The case was submitted to the jury on two claims, monopolization and attempt to monopolize, both based on Litton's allegations that the Company entered into certain exclusive dealings and penalty arrangements with aircraft manufacturers and airlines to exclude Litton from the commercial aircraft market. On February 29, 1996, the jury returned a $234 million verdict against the Company for the monopolization claim. On March 1, 1996, the jury indicated that it was unable to reach a verdict on damages for the attempted monopolization claim, and a mistrial was declared on that claim. The Company continues to maintain that it competed vigorously and lawfully in the inertial navigation business and will continue to defend itself against Litton's allegations. The Company believes that the jury's partial verdict should be overturned because Litton (i) failed to prove essential elements of liability and (ii) failed to submit competent evidence to support its claim for damages by offering only a S-3 speculative, all-or-nothing $298.5 million damage study. The Company filed post-verdict motions with the trial court asking that judgment be granted in favor of the Company as a matter of law or, in the alternative, for a new trial, and will argue important procedural and other matters that could dispose of this case. If the $234 million jury verdict withstands post-verdict motions, in whole or in part, any dollar judgment will be trebled under federal antitrust laws and will be appealed by the Company. The case will conclude only when the trial and appellate courts resolve all of the legal issues that could reduce or eliminate the jury verdict. As a result, no provision has been made in the financial statements with respect to this contingent liability. USE OF PROCEEDS The net proceeds to be received by the Company from the issuance of the Notes offered hereby, estimated to be approximately $297.9 million (after deducting the underwriting discount and estimated offering expenses), are expected to be used to reduce outstanding commercial paper. On April 15, 1996, the Company had approximately $304.5 million of commercial paper outstanding, with a weighted average maturity of 5 days and bearing a weighted average interest rate of approximately 5.4% per annum. Pending such application, all or a portion of the net proceeds will be invested in short-term money market instruments. S-4 SELECTED CONSOLIDATED FINANCIAL DATA The following table sets forth historical data for the periods indicated. The Selected Consolidated Financial Data of the Company for each of the five years during the period ended December 31, 1995, have been derived from the audited consolidated financial statements of the Company, which were audited by Deloitte & Touche LLP, independent auditors. The selected financial data is qualified in its entirety by and should be read in conjunction with the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1995 and the Company's Reports on Form 8-K, dated January 31, 1996, February 29, 1996 and April 16, 1996.
YEARS ENDED DECEMBER 31, ----------------------------------------------------- 1995 1994 1993 1992 1991 --------- --------- --------- --------- --------- (DOLLARS AND SHARES IN MILLIONS, EXCEPT PER SHARE AMOUNTS) RESULTS OF OPERATIONS: Sales..................................................... $ 6,731.3 $ 6,057.0 $ 5,963.0 $ 6,222.6 $ 6,192.9 --------- --------- --------- --------- --------- Cost of sales............................................. 4,584.2 4,082.1 4,019.6 4,195.3 4,185.1 Research and development.................................. 323.2 319.0 337.4 312.6 300.7 Selling, general and administrative....................... 1,263.1 1,173.8 1,075.7 1,196.8 1,150.9 Litigation settlements (1)................................ (32.6) (287.9) Special charges........................................... 62.7 51.2 128.4 Interest--net............................................. 68.9 60.2 51.0 58.5 61.4 Equity income............................................. (13.6) (10.5) (17.8) (15.8) (14.6) --------- --------- --------- --------- --------- 6,225.8 5,687.3 5,484.5 5,587.9 5,683.5 --------- --------- --------- --------- --------- Income before income taxes................................ 505.5 369.7 478.5 634.7 509.4 Provision for income taxes................................ 171.9 90.8 156.3 234.8 178.3 --------- --------- --------- --------- --------- Income before extraordinary item and cumulative effect of accounting changes....................................... 333.6 278.9 322.2 399.9 331.1 Extraordinary item (2).................................... (8.6) Cumulative effect of accounting changes (3)............... (144.5) --------- --------- --------- --------- --------- Net income................................................ $ 333.6 $ 278.9 $ 322.2 $ 246.8 $ 331.1 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- EARNINGS PER COMMON SHARE: Income before extraordinary item and cumulative effect of accounting changes....................................... $ 2.62 $ 2.15 $ 2.40 $ 2.88 $ 2.35 Extraordinary item (2).................................... (0.06 ) Cumulative effect of accounting changes (3)............... (1.04 ) --------- --------- --------- --------- --------- Net income................................................ $ 2.62 $ 2.15 $ 2.40 $ 1.78 $ 2.35 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- CASH DIVIDENDS PER COMMON SHARE............................. $ 1.01 $ 0.97 $ 0.91 $ 0.84 $ 0.77 FINANCIAL POSITION (AT PERIOD END): Current assets............................................ $ 2,766.9 $ 2,649.4 $ 2,550.2 $ 2,707.8 $ 2,698.9 Current liabilities....................................... 2,022.5 2,071.8 1,856.1 1,969.2 2,095.0 --------- --------- --------- --------- --------- Working capital........................................... $ 744.4 $ 577.6 $ 694.1 $ 738.6 $ 603.9 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Short-term debt........................................... $ 312.4 $ 360.6 $ 187.9 $ 188.4 $ 168.4 Long-term debt............................................ 481.0 501.5 504.0 512.1 639.8 --------- --------- --------- --------- --------- Total debt................................................ 793.4 862.1 691.9 700.5 808.2 Stockholders' equity...................................... 2,040.1 1,854.7 1,773.0 1,790.4 1,850.8 --------- --------- --------- --------- --------- Total capitalization...................................... $ 2,833.5 $ 2,716.8 $ 2,464.9 $ 2,490.9 $ 2,659.0 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ADDITIONAL INFORMATION: Average number of common shares outstanding............... 127.1 129.4 134.2 138.5 140.9 Return on average stockholders' equity.................... 17.1% 15.6% 18.4% 13.8% 19.2% Percent of total debt to total capitalization............. 28 % 32 % 28 % 28 % 30 % Net cash flows from operating activities.................. $ 572.5 $ 469.5 $ 474.8 $ 531.6 $ 488.9 Net cash flows before financing activities and acquisitions (4)......................................... 346.5 246.9 276.0 341.9 291.6
- -------------------------- (1) Litigation settlements in 1992 are one-time settlements, after associated expenses, reached with various camera manufacturers for their use of the Company's patented automatic focus camera technology and amounted to $171.4 ($1.24 per share) after income taxes. (2) Extraordinary item resulting from the loss on early redemption of debt. (3) The cumulative effect of accounting changes is the result of adopting Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions," which reduced net income by $151.3 ($1.09 per share); SFAS No. 109, "Accounting for Income Taxes," which increased net income by $31.4 ($0.23 per share); and SFAS No. 112, "Employers' Accounting for Postemployment Benefits," which reduced net income by $24.6 ($0.18 per share). (4) Net cash flows before financing activities and acquisitions means net cash flows from operating activities less net cash flows from investing activities plus cash used in investments in acquisitions. S-5 SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
YEARS ENDED DECEMBER 31, ---------------------------------------------------------- 1995 1994 1993 1992 1991 ---------- ---------- ---------- ---------- ---------- (DOLLARS AND SHARES IN MILLIONS, EXCEPT PER SHARE AMOUNTS) SEGMENT DATA: SALES: Home and Building Control....................... $ 3,034.7 $ 2,664.5 $ 2,424.3 $ 2,393.6 $ 2,249.1 Industrial Control.............................. 2,035.9 1,835.3 1,691.5 1,743.9 1,626.8 Space and Aviation Control...................... 1,527.4 1,432.0 1,674.9 1,933.1 2,132.3 Other........................................... 133.3 125.2 172.3 152.0 184.7 ---------- ---------- ---------- ---------- ---------- $ 6,731.3 $ 6,057.0 $ 5,963.0 $ 6,222.6 $ 6,192.9 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- OPERATING PROFIT (1)(2): Home and Building Control....................... $ 308.6 $ 236.5 $ 232.7 $ 193.4 $ 229.1 Industrial Control.............................. 233.8 206.6 189.7 156.9 224.0 Space and Aviation Control...................... 127.6 80.9 148.1 175.8 226.1 Other........................................... 2.8 (1.8) (9.5) (3.1) ---------- ---------- ---------- ---------- ---------- Total operating profit.......................... 672.8 524.0 568.7 516.6 676.1 Interest expense................................ (83.3) (75.5) (68.0) (89.9) (89.4) Litigation settlements.......................... 32.6 287.9 Equity income................................... 13.6 10.5 17.8 15.8 14.6 General corporate expense....................... (97.6) (89.3) (72.6) (95.7) (91.9) ---------- ---------- ---------- ---------- ---------- Income before income taxes...................... $ 505.5 $ 369.7 $ 478.5 $ 634.7 $ 509.4 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ASSETS: Home and Building Control....................... $ 1,727.2 $ 1,529.8 $ 1,327.3 $ 1,302.4 $ 1,282.8 Industrial Control.............................. 1,307.2 1,273.3 1,059.8 1,057.5 1,001.7 Space and Aviation Control...................... 971.1 1,174.9 1,219.6 1,403.6 1,594.5 Corporate and Other............................. 1,054.7 907.9 991.4 1,106.6 927.7 ---------- ---------- ---------- ---------- ---------- $ 5,060.2 $ 4,885.9 $ 4,598.1 $ 4,870.1 $ 4,806.7 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ADDITIONAL INFORMATION: Research and development Honeywell-funded.............................. $ 323.2 $ 319.0 $ 337.4 $ 312.6 $ 300.7 Customer-funded............................... 336.6 340.5 404.8 390.5 373.5 Capital expenditures............................ 238.1 262.4 232.1 244.1 240.2 Depreciation.................................... 236.1 235.3 235.3 242.8 238.5 Employees at year end........................... 50,100 50,800 52,300 55,400 58,200
- -------------------------- (1) Operating profit is net of special charges amounting to $62.7, $51.2 and $128.4 in 1994, 1993 and 1992, respectively, as follows: Home and Building Control, $28.7, $9.9 and 42.7; Industrial Control, $14.4, $9.0 and $38.6; Space and Aviation Control, $19.6, $7.4 and $34.9; Other, $0, $16.4 and $2.6; and General Corporate Expense, $0, $8.5 and $9.6. (2) Operating profit is net of the additional operating expense impact of adopting SFAS 106 and SFAS 112 amounting to $16.4 and $3.8, respectively, in 1992 as follows: Home and Building Control, $4.3 and $1.0; Industrial Control, $4.0 and $0.9; Space and Aviation Control, $7.0 and $1.6; Other, $0.5 and $0.1; and General Corporate Expense, $0.6 and $0.2. S-6 CAPITALIZATION The following table sets forth the total capitalization of the Company at March 31, 1996, and as adjusted to give effect to the sale by the Company of the Notes offered hereby and the application of the net proceeds therefrom (as if such sale and application of proceeds occurred on such date). See "Use of Proceeds."
AS OF MARCH 31, 1996 ------------------------ ACTUAL AS ADJUSTED ---------- ----------- (DOLLARS IN MILLIONS) SHORT-TERM DEBT, INCLUDING CURRENT MATURITIES......................... $ 486.2 $ 188.3 ---------- ----------- LONG-TERM DEBT: Notes offered hereby................................................ -- 300.0 Long-term debt...................................................... 478.1 478.1 ---------- ----------- Total long-term debt.............................................. 478.1 778.1 ---------- ----------- STOCKHOLDERS' EQUITY: Common stock, $1.50 par value Authorized-250,000,000 shares; issued-188,035,247 shares........... 282.0 282.0 Additional paid-in capital.......................................... 489.8 489.8 Retained earnings................................................... 2,838.0 2,838.0 Treasury stock-61,367,743 shares.................................... (1,699.8) (1,699.8) Accumulated foreign currency translation............................ 120.0 120.0 Pension liability adjustment........................................ (19.5) (19.5) ---------- ----------- Total stockholders' equity........................................ 2,010.5 2,010.5 ---------- ----------- Total capitalization.............................................. $ 2,974.8 $ 2,976.9 ---------- ----------- ---------- ----------- Percent of total debt to total capitalization......................... 32% 32%
DESCRIPTION OF NOTES THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE NOTES OFFERED HEREBY (REFERRED TO IN THE ACCOMPANYING PROSPECTUS AS THE "DEBT SECURITIES") SUPPLEMENTS, AND TO THE EXTENT INCONSISTENT THEREWITH REPLACES, THE DESCRIPTION OF THE GENERAL TERMS AND PROVISIONS OF THE DEBT SECURITIES SET FORTH IN THE ACCOMPANYING PROSPECTUS, TO WHICH DESCRIPTION REFERENCE IS HEREBY MADE. CAPITALIZED TERMS NOT DEFINED HEREIN HAVE THE MEANINGS ASSIGNED TO SUCH TERMS IN THE PROSPECTUS. GENERAL The 2001 Notes offered hereby will be limited to $ aggregate principal amount and will mature on , 2001. The 2008 Notes offered hereby will be limited to $ aggregate principal amount and will mature on , 2008. The Notes are not entitled to a sinking fund. Interest at the applicable annual rate set forth on the cover page of this Prospectus Supplement will be payable semiannually on and , commencing , 1996, to the persons in whose names the Notes are registered at the close of business on or , as the case may be, preceding such interest payment date. Interest on the Notes will accrue from or from the most recent interest payment date to which interest has been paid or provided for. The Notes constitute a separate series of Debt Securities under the Indenture described in the Prospectus and will be issued in denominations of $1,000 and integral multiples thereof. The Notes will be unsecured and will rank on a parity with each other and with all other unsecured and unsubordinated indebtedness of the Company. The Notes may not be redeemed prior to maturity. The provisions described in the Prospectus under "Description of Debt Securities--Defeasance Provisions" will be applicable to the Notes. S-7 BOOK-ENTRY PROCEDURES The Notes will be issued in the form of one or more fully registered Global Securities (the "Global Securities"), which will be deposited with, or on behalf of, The Depository Trust Company, New York, New York (the "Depositary") and registered in the name of the Depositary's nominee. Except as set forth below, the Global Securities may be transferred, in whole or in part, only to another nominee of the Depositary or to a successor of the Depositary or its nominee. The Depositary has advised the Company and the Underwriters as follows: The Depositary is a limited-purpose trust company that was created to hold securities for its participating organizations (the "Participants") and to facilitate the clearance and settlement of securities transactions between Participants in such securities through electronic book-entry changes in accounts of its Participants. Participants include securities brokers and dealers (including certain of the Underwriters), banks (including the Trustee) and trust companies, clearing corporations and certain other organizations. Access to the Depositary's system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly ("indirect participants"). Persons who are not Participants may beneficially own securities held by the Depositary only through Participants or indirect participants. The Depositary advises that pursuant to procedures established by it (i) upon issuance of the Notes by the Company, the Depositary will credit the accounts of Participants designated by the Underwriters with the principal amounts of the Notes purchased by the Underwriters, and (ii) ownership of beneficial interests in the Global Securities will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depositary (with respect to the Participants' interests), the Participants and the indirect participants. The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in the Global Securities is limited to such extent. So long as a nominee of the Depositary is the registered owner of the Global Securities, such nominee for all purposes will be considered the sole owner or holder of such Notes under the Indenture. Except as provided below, owners of beneficial interests in the Global Securities will not be entitled to have Notes registered in their names, will not receive or be entitled to receive physical delivery of Notes in definitive form, and will not be considered the owners or holders thereof under the Indenture. The Trustee, any Paying Agent and the Security Registrar will not have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Securities, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Principal and interest payments on the Notes registered in the name of the Depositary's nominee will be made by the Trustee to the Depositary's nominee as the registered owner of the Global Securities. Under the terms of the Indenture, the Company and the Trustee will treat the persons in whose names the Notes are registered as the owners of such Notes for the purpose of receiving payment of principal and interest on the Notes and for all other purposes whatsoever. Therefore, neither the Company, the Trustee nor any Paying Agent has any direct responsibility or liability for the payment of principal or interest on the Notes to owners of beneficial interests in the Global Securities. The Depositary has advised the Company and the Trustee that its present practice is, upon receipt of any payment of principal or interest, to immediately credit the accounts of the Participants with such payment in amounts proportionate to their respective holdings in principal amount of beneficial interests in the Global Securities as shown on the records of the Depositary. The Depositary's current practice is to credit such accounts, as to interest, in next-day funds and, as to principal, in same-day funds. Payments by Participants and indirect participants to owners of beneficial interests in the Global Securities will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of the Participants or indirect participants. S-8 If the Depositary is at any time unwilling or unable to continue as depository and a successor depository is not appointed by the Company within 90 days, the Company will issue Notes in definitive form in exchange for the Global Securities. In addition, the Company may at any time determine not to have the Notes represented by Global Securities and, in such event, will issue Notes in definitive form in exchange for the Global Securities. In either instance, an owner of a beneficial interest in the Global Securities will be entitled to have Notes equal in principal amount to such beneficial interest registered in its name and will be entitled to physical delivery of such Notes in definitive form. Notes so issued in the definitive form will be issued in denominations of $1,000 and integral multiples thereof and will be issued in registered form only, without coupons. UNDERWRITING Subject to the terms and conditions set forth in the Underwriting Agreement and the applicable Pricing Agreement dated April , 1996, the Company has agreed to sell to each of the Underwriters named below, and each of the Underwriters has severally agreed to purchase, the principal amount of the 2001 Notes and the 2008 Notes set forth opposite its name below:
PRINCIPAL PRINCIPAL AMOUNT OF AMOUNT OF UNDERWRITER 2001 NOTES 2008 NOTES - -------------------------------------------------------------------- -------------- -------------- Goldman, Sachs & Co................................................. $ $ Chase Securities Inc................................................ Citicorp Securities, Inc............................................ J.P. Morgan Securities Inc.......................................... -------------- -------------- Total............................................................. $ $ -------------- -------------- -------------- --------------
Under the terms and conditions of the Underwriting Agreement and the applicable Pricing Agreement, the Underwriters are obligated to take and pay for all of the 2001 Notes or the 2008 Notes, as applicable, if any are taken. The Underwriters propose to offer the 2001 Notes in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement, and in part to certain securities dealers at such price less a concession of % of the principal amount of the 2001 Notes. The Underwriters may allow, and such dealers may reallow, a concession not in excess of % of the principal amount of the 2001 Notes to certain brokers and dealers. The Underwriters propose to offer the 2008 Notes in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement, and in part to certain securities dealers at such price less a concession of % of the principal amount of the 2008 Notes. The Underwriters may allow, and such dealers may reallow, a concession not in excess of % of principal amount of the 2008 Notes to certain brokers and dealers. After the Notes are released for sale to the public, the offering price and other selling terms may from time to time be varied by the Underwriters. The Notes are new issues of securities with no established trading market. The Company has been advised by the Underwriters that they currently intend to make a market in the Notes, although the Underwriters are not obligated to do so and may discontinue such market making at any time without notice. Accordingly, no assurance can be given as to the liquidity of, or the trading market for, the Notes. In the ordinary course of their respective businesses, certain of the Underwriters and their affiliates have engaged, and may in the future engage, in investment banking and commercial banking transactions with the Company and certain of its affiliates. The Chase Manhattan Bank (National Association) is the Trustee under the Indenture, and is an affiliate of Chase Securities Inc., one of the Underwriters. The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. S-9 PROSPECTUS $521,500,000 HONEYWELL INC. DEBT SECURITIES ----------- Honeywell Inc. (the "Company") may offer from time to time its debt securities (the "Debt Securities") in one or more series at an aggregate initial offering price not to exceed $521,500,000, or its equivalent in such foreign currency or composite currencies as may be designated by the Company at the time of the offering, on terms to be determined at the time of sale. The specific designation, aggregate principal amount, purchase price, maturity, denominations (which may be in United States dollars, in any other currency or in a composite currency), any interest rate or rates (which may be fixed or variable) and time of payment of any interest, any redemption or extension terms, any terms for sinking fund payments and other specific terms of the Debt Securities will be set forth in one or more supplements to this Prospectus (each a "Prospectus Supplement"). As used herein, the term "Debt Securities" shall include securities denominated in United States dollars or, if so specified in the applicable Prospectus Supplement, in any other currency or composite currency. The Debt Securities may be sold to or through underwriters, dealers or agents for public offering or directly to other purchasers pursuant to the terms of the offering fixed at the time of sale. See "Plan of Distribution." Any underwriters, dealers or agents participating in an offering of Securities will be named in the accompanying Prospectus Supplement or Prospectus Supplements. Such underwriters, dealers or agents may be deemed "underwriters" within the meaning of the Securities Act of 1933. -------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is April 18, 1996 AVAILABLE INFORMATION The Company is subject to the information requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company can be inspected and copied at the public reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices located at Seven World Trade Center, New York, New York 10048 and 500 West Madison Street, 14th Floor, Chicago, Illinois 60661. Copies of such materials can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Company's Common Stock and Preferred Stock Purchase Rights are listed on the New York Stock Exchange. Reports, proxy statements and other information concerning the Company can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. The Company has filed with the Commission a registration statement on Form S-3 (herein, together with the related registration statement pursuant to Rule 462(b) of the Commission and all amendments and exhibits, referred to as the "Registration Statement") under the Securities Act of 1933, as amended. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement, and exhibits thereto, which may be inspected without charge at the office of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies thereof may be obtained from the Commission at prescribed rates. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents of the Company which have been filed with the Commission are hereby incorporated by reference in this Prospectus: (a) Annual Report on Form 10-K for the year ended December 31, 1995; and (b) Current Reports on Form 8-K dated January 31, 1996, February 29, 1996 and April 16, 1996. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, subsequent to the date of this Prospectus and prior to the termination of the offering of the Debt Securities shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the respective dates of filing of such documents. Any statement contained herein or in a document all or any portion of which is incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to any person to whom this Prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the foregoing documents incorporated herein by reference (other than certain exhibits to such documents). Requests for such copies should be directed to Vice President of Investor Relations, Honeywell Inc., P.O. Box 524, Minneapolis, Minnesota 55440, telephone number (612) 951-2122. 2 Unless otherwise indicated, currency amounts in this Prospectus and any Prospectus Supplement are stated in United States dollars ("$" or "dollars"). HONEYWELL INC. Honeywell Inc. is an international controls corporation that supplies automation and control systems, components, software, products and services for homes and buildings, industry and space and aviation. The Company's strategy is to develop and supply advanced-technology products, systems and services that conserve energy and protect the environment, improve productivity, enhance comfort and increase safety. The Company's products and services are classified into three primary industry segments: (i) Home and Building Control, (ii) Industrial Control and (iii) Space and Aviation Control. The Home and Building Control segment provides building automation, energy management and fire and security systems, as well as thermostats, air cleaners and other environmental control products and services for homes and other buildings. The Company manufactures, markets and installs mechanical, pneumatic, electrical and electronic control products and systems for heating, ventilating and air conditioning homes and commercial, industrial and public buildings. The Company also produces building management systems for commercial buildings, burner and boiler controls, lighting controls, thermostatic radiator valves, pressure regulators for water systems, thermostats, actuators, humidistats, relays, contactors, transformers, air-quality products and gas valves and ignition controls for homes and commercial buildings. Sales of these products are made directly to original equipment manufacturers, including manufacturers of heating and air conditioning equipment, through wholesalers, distributors, dealers, contractors, hardware stores and home care centers, and also through the Company's nationwide sales and service organization. Services provided include the following: indoor air-quality services and central-station burglary and fire protection services for homes and commercial buildings; video surveillance, access control and entry management services for commercial buildings; contract maintenance services for mechanical and control systems of commercial buildings; automated operations management for building complexes; and energy management and retrofit services. The Company's Industrial Control segment serves the automation and control needs of its worldwide industrial customers by providing a wide variety of products, systems and services. The Industrial Control segment supplies process control systems and associated application software and services to customers in a broad range of markets, which include process industries such as the refining, petrochemical, bulk and fine chemical, pulp-and-paper, electric utility, food and consumer goods, pharmaceutical, metals and transportation industries. The Company also designs and manufactures process instruments, process controllers, recorders, programmers, programmable controllers, transmitters and other field instruments that may be sold as stand-alone products or integrated into control systems. These products are generally used in indicating, recording and automatically controlling variables in manufacturing processes. Under its MICRO SWITCH trademark, the Company manufactures solid-state sensors (including position, pressure, airflow, temperature and current sensors), sensor interface devices, manual controls, explosion-proof switches and precision snap-acting switches, as well as proximity, photoelectric and mercury switches and lighted/unlighted push buttons. These products are used in industrial, commercial, business equipment, consumer, medical, automotive, aerospace and computer applications. Other products include solenoid valves, optoelectronic devices, fiber-optic systems and components, as well as microcircuits, sensors, transducers and high-accuracy, noncontract measurement and detection products for factory automation, quality inspection and robotics applications. The Company also furnishes industrial customers with various services, including the following: product and component testing services; instrument maintenance, repair and calibration services; various contract services for industrial control equipment, including third party maintenance for CAD/CAM and other industrial control equipment; and training, customized products for customer applications and a range of other customer support services. 3 The Company's Space and Aviation Control segment supplies avionics for the commercial, military and space markets. The Company designs, manufactures, markets and services a variety of sophisticated electronic control systems and components for commercial and business aircraft, military aircraft and spacecraft. Products manufactured for aircraft use include the following: ring laser gyro-based inertial reference systems; navigation and guidance systems; flight control systems; flight management systems; inertial sensors; air data computers; radar altimeters; automatic test equipment; cockpit display systems; and other communication and flight instrumentation. Products and services supplied by the Company have been used in every major U.S. space mission since the mid-1960s. These products and services include guidance systems for launch and re-entry vehicles, flight and engine control systems for manned spacecraft, precision components for strategic missiles and on-board data processing equipment. Other products include spacecraft attitude and positioning systems and precision pointing and isolation systems. Products and services provided by the Company that are not included in the Company's primary business segments include systems analysis and applied research and development on systems and products, including application software, sensors and advanced electronics. The Company also designs and manufactures integrated circuits and sensors for internal use, government customers and selected external customers. Through its operations in Germany, the Company develops, markets and sells military avionics and electro-optic devices for flight control and nautical systems, including sonar transducers and echo sounders. The Company was incorporated under the laws of the State of Delaware in 1927. The Company's principal executive offices are located at Honeywell Plaza, Minneapolis, Minnesota 55408 (telephone (612) 951-1000). Unless the context otherwise requires, the term the "Company" refers to Honeywell Inc. and its subsidiaries. USE OF PROCEEDS Unless otherwise specified in the applicable Prospectus Supplement, the net proceeds from the sale of the Debt Securities will be used for general corporate purposes, including working capital, repayment or repurchase of outstanding indebtedness and other securities of the Company, possible acquisitions and capital expenditures. Specific allocations of the proceeds to such purposes may not have been made at the date of the applicable Prospectus Supplement, although management of the Company will have determined that funds should be borrowed at that time in anticipation of future funding requirements. The precise amount and timing of the application of such proceeds will depend upon the funding requirements of the Company and the availability and cost of other funds. Pending such application, such net proceeds may be temporarily invested in short-term interest-bearing securities. RATIOS OF EARNINGS TO FIXED CHARGES
YEARS ENDED DECEMBER 31, ---------------------------- 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges................ 4.77 3.96 5.11 5.69 4.84
For the purpose of computing the ratios of earnings to fixed charges, earnings consist of income before income taxes, plus fixed charges, plus a proportional share of income or loss before income taxes of 50 percent owned companies, less equity in undistributed earnings of companies owned less than 50 percent. Fixed charges consist of interest on all indebtedness, amortization of debt expense and that portion of rental expense deemed to be representative of interest. 4 DESCRIPTION OF DEBT SECURITIES The Debt Securities will be issued under an Indenture (the "Indenture") between the Company and The Chase Manhattan Bank (National Association), as Trustee (the "Trustee"). A copy of the form of Indenture has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. The following brief summary of certain provisions of the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the Indenture, and is further qualified by any description contained in the applicable Prospectus Supplement or Prospectus Supplements. Certain terms capitalized and not otherwise defined herein are defined in the Indenture. Wherever particular sections or defined terms of the Indenture are referred to, such sections or defined terms are incorporated herein by reference. The Debt Securities may be issued from time to time in one or more series. The terms of each series of Debt Securities will be established by or pursuant to a resolution of the Board of Directors of the Company and set forth or determined in the manner provided in an Officers' Certificate or by a supplemental indenture. The particular terms of the Debt Securities offered pursuant to any Prospectus Supplement or Prospectus Supplements will be described in such Prospectus Supplement or Prospectus Supplements. As used under this caption, the term "Company" means Honeywell Inc. GENERAL The Indenture will not limit the aggregate principal amount of Debt Securities which may be issued thereunder nor the amount of other debt which may be issued by the Company. The Debt Securities will be unsecured obligations of the Company and will rank on a parity with all other unsecured and unsubordinated indebtedness of the Company. Unless otherwise indicated in the applicable Prospectus Supplement or Prospectus Supplements, the Debt Securities of any series will be issued only in fully registered form in denominations of $1,000 or any amount in excess thereof which is an integral multiple of $1,000. (Section 302) Debt Securities may be issuable in the form of one or more Global Securities, as described below under "--Global Securities." The Debt Securities (other than those issued in the form of a Global Security) are exchangeable or transferable without charge therefor, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith and require the holders to furnish appropriate endorsements and transfer documents. (Section 305) Debt Securities may be issued as Original Issue Discount Debt Securities to be sold at a substantial discount below their principal amount. Special federal income tax and other considerations applicable thereto and special federal tax and other considerations applicable to any Debt Securities which are denominated in a currency or currency unit other than United States dollars will be described in the Prospectus Supplement or Prospectus Supplements relating thereto. Unless otherwise indicated in the applicable Prospectus Supplement or Prospectus Supplements, principal of and any premium and interest on the Debt Securities will be payable, and the transfer of the Debt Securities will be registrable, at the principal corporate trust office of the Trustee. In addition, unless otherwise provided in the applicable Prospectus Supplement or Prospectus Supplements and in the case of Global Securities, payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as it appears on the Security Register. (Sections 301, 305, 1001 and 1002) The applicable Prospectus Supplement or Prospectus Supplements will describe the terms of the Debt Securities offered thereby, including the following: (1) the title of the offered Debt Securities; (2) any limit on the aggregate principal amount of the offered Debt Securities; (3) the Person to whom any interest on the offered Debt Securities will be payable, if other than the Person in whose name it is registered on the regular record date for such interest; (4) the date or dates on which the offered Debt Securities will mature and any rights of extension; (5) the rate or rates at which the offered Debt Securities will bear interest, if any, or the formula pursuant to which such rate or rates shall be determined, the date from which any such interest will accrue and the dates on which any such interest on the 5 offered Debt Securities will be payable and the regular record dates therefor; (6) the place or places where the principal of and any premium and interest on the offered Debt Securities will be payable; (7) the period or periods within which, the price or prices at which and the terms and conditions upon which the offered Debt Securities may be redeemed, if applicable, at the option of the Company; (8) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (9) the denominations in which any offered Debt Securities will be issuable, if other than denominations of $1,000 or any amount in excess thereof which is an integral multiple of $1,000; (10) the currency, currencies or currency units for the payment of principal of and any premium and interest payable on the offered Debt Securities, if other than United States dollars; (11) any other event or events of default applicable with respect to the offered Debt Securities in addition to or in lieu of those described below under "--Events of Default"; (12) if less than the principal amount thereof, the portion of the principal payable upon acceleration of such Debt Securities following an Event of Default; (13) whether such Debt Securities are to be issued in whole or in part in the form of one or more Global Securities and, if so, the identity of the Depositary for such Global Security or Securities and the circumstances under which any such Global Security may be exchanged for Securities registered in the name of, and any transfer of such Global Security may be registered to, a Person other than such Depositary or its nominee; (14) if principal of or interest on the offered Debt Securities is denominated or payable in a currency or currencies other than United States dollars, whether and under what terms and conditions the Company may defease the offered Debt Securities; and (15) any other terms of the offered Debt Securities not inconsistent with the provisions of the Indenture. (Section 301) GLOBAL SECURITIES The Debt Securities of a series may be issued in whole or in part in the form of one or more Global Securities that will be deposited with, or on behalf of, a Depositary identified in the applicable Prospectus Supplement or Prospectus Supplements. A Global Security will be issued in a denomination equal to the aggregate principal amount of outstanding Debt Securities of the series represented by such Global Security. The specific terms of the depositary arrangement with respect to a series of Debt Securities will be described in the applicable Prospectus Supplement or Prospectus Supplements. RESTRICTIVE COVENANTS LIMITATIONS ON SECURED DEBT. The Indenture provides that the Company will not itself, and will not permit any Restricted Subsidiary (defined below) to, incur, issue, assume or guarantee any notes, bonds, debentures or other similar evidences of indebtedness for money borrowed (herein called "debt"), secured by pledge of, or mortgage or other lien on, any Principal Property (defined below), now owned or hereafter owned by the Company or any Restricted Subsidiary, or any shares of stock or debt of any Restricted Subsidiary (herein called "liens"), without effectively providing that the Debt Securities of each series then Outstanding (together with, if the Company shall so determine, any other debt of the Company or such Restricted Subsidiary then existing or thereafter created which is not subordinate to the Debt Securities of each series then Outstanding) shall be secured equally and ratably with such secured debt. The foregoing restrictions do not apply, however, to (a) liens on any Principal Property acquired, constructed or improved by the Company or any Restricted Subsidiary after the date of the Indenture which are created or assumed contemporaneously with, or within 120 days of, such acquisition, construction or improvement, to secure or provide for the payment of all or any part of the cost of such acquisition, construction or improvement; (b) liens on property, shares of capital stock or debt existing at the time of acquisition thereof, whether by merger, consolidation, purchase, lease or otherwise (including liens on property, shares of capital stock or debt of a corporation existing at the time such corporation becomes a Restricted Subsidiary); (c) liens in favor of the Company or any Restricted Subsidiary; (d) liens in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision thereof, or political entity affiliated therewith, or in favor of any other country, or any political subdivision thereof, to secure partial, progress, advance or other 6 payments; (e) certain liens imposed by law, such as mechanics', workmen's, repairmen's, materialmen's, carriers', warehousemen's, vendors' or other similar liens arising in the ordinary course of business; (f) certain pledges or deposits under workmens compensation or similar legislation or in certain other circumstances; (g) certain liens in connection with legal proceedings, including certain liens arising out of judgments or awards; (h) liens for certain taxes or assessments; (i) certain liens consisting of restrictions on the use of real property which do not interfere materially with the property's use; or (j) any extension, renewal or replacement, as a whole or in part, of any lien referred to in the foregoing clauses (a) to (i), inclusive. (Section 1007) Notwithstanding the restrictions described above, the Company or any Restricted Subsidiary may incur, issue, assume or guarantee debt secured by liens without equally and ratably securing the Debt Securities of each series then Outstanding, provided, that at the time of such incurrence, issuance, assumption or guarantee, after giving effect thereto and to the retirement of any debt which is concurrently being retired, the aggregate amount of all outstanding debt secured by liens so incurred (other than liens permitted as described in clauses (a) through (j) above) does not at such time exceed 10% of Consolidated Net Tangible Assets (defined below) of the Company. (Section 1007) LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS. Sale and leaseback transactions by the Company or any Restricted Subsidiary involving a Principal Property are prohibited unless either (a) the Company or such Restricted Subsidiary would be entitled, without equally and ratably securing the Debt Securities of each series then Outstanding, to incur debt secured by a lien on such property, pursuant to the provisions described in clauses (a) through (j) above under "Limitations on Secured Debt,"; or (b) the Company, within 120 days, applies to the retirement of its Funded Debt (defined below) (subject to credits for certain voluntary retirements of Funded Debt) an amount not less than the greater of (i) the net proceeds of the sale of the Principal Property leased pursuant to such arrangement or (ii) the fair market value of the Principal Property so leased. This restriction will not apply to a sale and leaseback transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries or involving the taking back of a lease for a period of less than three years. Notwithstanding the restrictions described above, the Company or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction, provided, that at the time of such transaction, after giving effect thereto, the aggregate amount of all Attributable Debt (defined below) in respect of sale and leaseback transactions existing at such time (other than sale and leaseback transactions permitted as described above) does not at such time exceed 10% of Consolidated Net Tangible Assets of the Company. (Section 1008) CERTAIN DEFINITIONS. The term "Attributable Debt" means the total net amount of rent (discounted at the rate of interest implicit in the terms of the lease) required to be paid during the remaining term of any lease. (Section 101) The term "Consolidated Net Tangible Assets" means the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (a) all current liabilities (excluding any indebtedness for money borrowed having a maturity of less than 12 months from the date of the most recent consolidated balance sheet of the Company but which by its terms is renewable or extendable beyond 12 months from such date at the option of the borrower) and (b) all goodwill, trade names, patents, unamortized debt discount and expense and any other like intangibles, all as set forth on the most recent consolidated balance sheet of the Company and computed in accordance with generally accepted accounting principles. (Section 101) The term "Funded Debt" means debt which by its terms matures at or is extendible or renewable at the option of the obligor to a date more than 12 months after the date of the creation of such debt. (Section 101) The term "Principal Property" means any manufacturing plant located within the United States of America (other than its territories or possessions) and owned by the Company or any Subsidiary, the gross book value (without deduction of any depreciation reserves) of which on the date as of which the 7 determination is being made exceeds 1% of Consolidated Net Tangible Assets of the Company, except any such plant (i) which is financed by obligations issued by a State or local governmental unit pursuant to Section 142(a)(5), 142(a)(6), 142(a)(8) or 144(a) of the Internal Revenue Code of 1986, or any successor provision thereof, or (ii) which is not of material importance to the business conducted by the Company and its subsidiaries, taken as a whole. (Section 101) The term "Restricted Subsidiary" means any subsidiary of the Company which owns or leases a Principal Property. (Section 101) Other than as described above and except as may be otherwise specified in the applicable Prospectus Supplement, the Indenture does not contain covenants specifically designed to protect Holders in the event of a highly leveraged transaction involving the Company. EVENTS OF DEFAULT The following events are defined in the Indenture as "Events of Default" with respect to the Debt Securities of any series issued pursuant to such Indenture, unless otherwise provided with respect to such series: (1) failure to pay any interest on any Debt Security of that series when due and payable, continued for 30 days; (2) failure to pay principal of or any premium on any Debt Security of that series when due and payable; (3) failure to deposit any sinking fund payment, when and as due, in respect of any Debt Security of that series; (4) failure to perform any other covenant of the Company in the Indenture (other than a covenant included in the Indenture solely for the benefit of a series of Debt Securities other than that series), continued for 60 days after written notice as provided in the Indenture; (5) the occurrence of an event of default under any indenture or instrument under which the Company or any Restricted Subsidiary shall have outstanding at least $10,000,000 aggregate principal amount of indebtedness for money borrowed whose maturity has been accelerated and such acceleration has not been annulled within 10 days after written notice as provided in the Indenture; (6) certain events in bankruptcy, insolvency or reorganization involving the Company; and (7) any other Event of Default provided with respect to Debt Securities of that series. (Section 501) If an Event of Default with respect to any series of Debt Securities Outstanding under the Indenture occurs and is continuing, then either the Trustee or the Holders of at least 25% in aggregate principal amount of the Outstanding Debt Securities of that series by notice as provided in the Indenture may declare the principal amount (or, if any of the Debt Securities of that series are Original Issue Discount Debt Securities, such lesser portion of the principal amount of such Debt Securities as may be specified in the terms thereof) of all of the Debt Securities of that series to be due and payable immediately. At any time after a declaration of acceleration with respect to Debt Securities of any series has been made, but before a judgment or decree for payment of money has been obtained by the Trustee, the Holders of a majority in aggregate principal amount of the Outstanding Debt Securities of that series may, under certain circumstances, rescind and annul such acceleration. (Section 502) The Indenture provides that, subject to the duty of the Trustee during default to act with the required standard of care, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable indemnity. (Sections 601, 603) Subject to such provisions for the indemnification of the Trustee, the Holders of a majority in aggregate principal amount of the Outstanding Debt Securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Debt Securities of that series. (Section 512) The Company is required to furnish to each Trustee annually a statement as to the performance by the Company of certain of its obligations under the Indenture and as to any default in such performance. (Section 704) MODIFICATION AND WAIVER Modifications and amendments of the Indenture may be made by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the 8 Outstanding Debt Securities of each series affected by such modification or amendment; PROVIDED, HOWEVER, that no such modification or amendment may, without the consent of the Holder of each Outstanding Debt Security affected thereby, change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Debt Security, reduce the principal amount of, or premium or interest on, any Debt Security, reduce the amount of principal of an Original Issue Discount Debt Security due and payable upon acceleration of the Maturity thereof, change the place of payment where or coin or currency in which the principal of, or any premium or interest on, any Debt Security is payable, impair the right to institute suit for the enforcement of any payment on or with respect to any Debt Security, reduce the percentage in principal amount of Outstanding Debt Securities of any series, the consent of the Holders of which is required for modification or amendment of the Indenture or for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults or modify any of the above provisions. (Section 902) The Holders of not less than a majority in aggregate principal amount of the Outstanding Debt Securities of each series may, on behalf of the Holders of all Debt Securities of that series, waive, insofar as that series is concerned, compliance by the Company with certain restrictive provisions of the Indenture. (Section 1010) The Holders of not less than a majority in aggregate principal amount of the Outstanding Debt Securities of each series may, on behalf of the Holders of all Debt Securities of that series, waive any past default under the Indenture with respect to Debt Securities of that series, except a default (1) in the payment of principal of, or any premium or interest on, any Debt Security of such series, or (2) in respect of a covenant or provision of the Indenture which cannot be modified or amended without the consent of the Holder of each Outstanding Debt Security of such series affected. (Section 513) The Indenture provides that, in determining whether the Holders of the requisite principal amount of the Outstanding Debt Securities have given any request, demand, authorization, direction, notice, consent or waiver thereunder or whether a quorum is present at a meeting of Holders of Debt Securities, (1) the principal amount of an Original Issue Discount Debt Security that will be deemed to be Outstanding will be the amount of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof to such date, and (2) the principal amount of a Debt Security denominated in a foreign currency or currency unit that will be deemed to be Outstanding will be the United States dollar equivalent, determined as of the date of original issuance of such Debt Security, of the principal amount of such Debt Security (or, in the case of an Original Issue Discount Debt Security, the United States dollar equivalent, determined as of the date of original issuance of such Debt Security, of the amount determined as provided in (1) above). (Section 101) CONSOLIDATION, MERGER AND SALE OF ASSETS The Company, without the consent of the Holders of any of the Outstanding Debt Securities under the Indenture, may consolidate or merge with or into, or convey, transfer or lease its properties and assets substantially as an entirety to, any Person which is a corporation, partnership or trust organized and validly existing under the laws of any domestic jurisdiction, provided that (1) any successor Person assumes by supplemental indenture the Company's obligations on the Debt Securities and under the Indenture and (2) after giving effect to the transaction no Event of Default, and no event which, after notice or lapse of time, would become an Event of Default, shall have occurred and be continuing under the Indenture. (Section 801) DEFEASANCE PROVISIONS DEFEASANCE AND DISCHARGE. The Indenture provides that, if principal of and any interest on the Debt Securities are denominated and payable in United States dollars, the Company will be discharged from any and all obligations in respect of the Debt Securities (except for certain obligations to register the transfer or exchange of Debt Securities, to replace stolen, lost or mutilated Debt Securities, to maintain paying agencies and to hold moneys for payment in trust) upon the deposit with the Trustee, in trust, of money, U.S. Government Obligations (as defined) or a combination thereof, which through the payment of interest and principal thereof in accordance with their terms will provide money in an amount sufficient 9 to pay any installment of principal of (and premium, if any) and interest on and any mandatory sinking fund payments in respect of the Debt Securities on the Stated Maturity of such payments in accordance with the terms of the Indenture and such Debt Securities. Such discharge may only occur if there has been a change in applicable Federal law or the Company has received from, or there has been published by, the United States Internal Revenue Service a ruling to the effect that such a discharge will not be deemed, or result in, a taxable event with respect to holders of the Debt Securities; and such discharge will not be applicable to any Debt Securities then listed on the New York Stock Exchange if the provision would cause said Debt Securities to be de-listed as a result thereof. (Section 403) The term "U.S. Government Obligations" is defined to mean direct obligations of the United States of America, backed by its full faith and credit. (Section 101) DEFEASANCE OF CERTAIN COVENANTS. The Company may omit to comply with certain restrictive covenants described in Sections 1005 (Maintenance of Properties), 1006 (Payment of Taxes and Other Claims), 1007 (Restriction on Secured Debt) and 1008 (Restriction on Sale and Leaseback Transactions) of the Indenture. To exercise such option, the Company must deposit with the Trustee money, U.S. Government Obligations or a combination thereof, which through the payment of interest and principal thereof in accordance with their terms will provide money in an amount sufficient to pay any installment of principal of (and premium, if any) and interest on and any mandatory sinking fund payments in respect of the Debt Securities on the Stated Maturity of such payments in accordance with the terms of the Indenture and such Debt Securities. The Company will also be required to deliver to the Trustee an opinion of counsel to the effect that the deposit and related covenant defeasance will not cause the holders of the Debt Securities to recognize income, gain or loss for Federal income tax purposes. (Section 1009) DEFEASANCE AND EVENTS OF DEFAULT. In the event the Company exercises its option to omit compliance with certain covenants of the Indenture and the Debt Securities are declared due and payable because of the occurrence of any Event of Default, the amount of money and U.S. Government Obligations on deposit with the Trustee will be sufficient to pay amounts due on the Debt Securities at the time of their Stated Maturity but may not be sufficient to pay amounts due on the Debt Securities at the time of the acceleration resulting from such Event of Default. However, the Company shall remain liable for such payments. REGARDING THE TRUSTEE The Trustee participates in a revolving line of credit and term loan agreement with the Company and provides other banking and advisory services for the Company in the ordinary course of business. GOVERNING LAW The Indenture and the Debt Securities will be governed by, and construed in accordance with, the laws of the State of New York. PLAN OF DISTRIBUTION The Company may sell the Debt Securities being offered hereby in any of four ways: (i) directly to purchasers, (ii) through agents, (iii) through underwriters and (iv) through dealers. The applicable Prospectus Supplement or Prospectus Supplements will set forth the terms of the offering of the Debt Securities, including the name or names of any agents, underwriters or dealers, the purchase price of the Debt Securities and the proceeds to be received by the Company from such sale, any underwriting discounts and other items constituting underwriters' compensation and any discounts and commissions allowed or reallowed or paid to dealers or agents. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers or agents may be changed from time to time. In connection with the sale of Debt Securities, underwriters or agents may be deemed to have received compensation from the Company in the form of underwriting discounts or commissions. Underwriters may sell Debt Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters. Underwriters, dealers 10 and agents participating in the distribution of Debt Securities may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of the Debt Securities may be deemed to be underwriting discounts and commissions, under the Securities Act of 1933, as amended. Such underwriters, dealers and agents may be entitled under agreements which may be entered into by the Company to indemnification by the Company against and contribution toward certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Debt Securities may be distributed in one or more transactions from time to time at a fixed price or prices, which may be changed, or from time to time at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Company also may offer and sell the Debt Securities in exchange for one or more of its outstanding issues of debt or convertible debt securities. If so indicated in the applicable Prospectus Supplement or Prospectus Supplements, the Company will authorize dealers or other persons acting as the Company's agents to solicit offers by certain institutions to purchase Debt Securities from the Company at the public offering price set forth in the applicable Prospectus Supplement or Prospectus Supplements pursuant to delayed delivery contracts ("Contracts") providing for payment and delivery on the date or dates stated in the applicable Prospectus Supplement or Prospectus Supplements. Each Contract will be for an amount not less than, and the aggregate amount of Debt Securities sold pursuant to Contracts shall be not less nor more than, the respective amounts stated in the applicable Prospectus Supplement or Prospectus Supplements. Institutions with whom Contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions, and other institutions, but will in all cases be subject to the approval of the Company. The obligations of any purchaser under any Contract will not be subject to any conditions except (1) the purchase by an institution of the Debt Securities covered by its Contract shall not at the time of delivery be prohibited under the laws of any jurisdiction in the United States to which such institution is subject and (2) if Debt Securities are being sold to underwriters, the Company shall have sold to such underwriters the total principal amount of such Debt Securities less the principal amount thereof covered by Contracts. The Debt Securities will be a new issue of securities with no established trading market. Any underwriters or agents to or through whom Debt Securities are sold by the Company for public offering and sale may make a market in such Debt Securities, but such underwriters and agents will not be obligated to do so and may discontinue any market-making at any time without notice. No assurance can be given as to the liquidity of the trading market for any Debt Securities. Certain of the underwriters, dealers and/or agents and their associates may be customers of, engage in transactions with and perform services for the Company, including its subsidiaries, in the ordinary course of business. EXPERTS The consolidated financial statements and the related financial statement schedule incorporated in this prospectus by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1995 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. VALIDITY OF DEBT SECURITIES The validity of the Debt Securities will be passed upon for the Company by Edward D. Grayson, Esq., Vice President and General Counsel of the Company, and, unless otherwise indicated in the applicable Prospectus Supplement or Prospectus Supplements, certain matters with respect to the Debt Securities offered by such Prospectus Supplement or Prospectus Supplements will be passed upon for any underwriters or agents by Davis Polk & Wardwell, New York, New York. 11 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION. -------------- TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- The Company...................................... S-2 Use of Proceeds.................................. S-4 Selected Consolidated Financial Data............. S-5 Capitalization................................... S-7 Description of Notes............................. S-7 Underwriting..................................... S-9 PROSPECTUS Available Information............................ 2 Incorporation of Certain Documents by Reference....................................... 2 Honeywell Inc. .................................. 3 Use of Proceeds.................................. 4 Ratio of Earnings to Fixed Charges............... 4 Description of Debt Securities................... 5 Plan of Distribution............................. 10 Experts.......................................... 11 Validity of Debt Securities...................... 11
$300,000,000 HONEYWELL INC. $ % NOTES DUE , 2001 $ % NOTES DUE , 2008 --------------------- [LOGO] --------------------- GOLDMAN, SACHS & CO. CHASE SECURITIES INC. CITICORP SECURITIES, INC. J.P. MORGAN & CO. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----