(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Exhibit # | Description | |||||||
99 | ||||||||
104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the iXBRL document) |
Date: | October 27, 2022 | HONEYWELL INTERNATIONAL INC. | |||||||||||||||
By: /s/ Victor J. Miller | |||||||||||||||||
Victor J. Miller | |||||||||||||||||
Vice President, Deputy General Counsel, Corporate Secretary and Chief Compliance Officer | |||||||||||||||||
Contacts: | |||||
Media | Investor Relations | ||||
Bevin Maguire | Sean Meakim | ||||
(704) 654-7023 | (704) 627-6200 | ||||
bevin.maguire@honeywell.com | sean.meakim@honeywell.com |
Previous Guidance | Current Guidance | |||||||||||||
Sales | $35.5B - $36.1B | $35.4B - $35.7B | ||||||||||||
Organic Growth | 5% - 7% | 6% - 7% | ||||||||||||
Organic Growth Excluding Impact of COVID-Driven Mask Sales Declines and Lost Russian Sales4 | 7% - 9% | 8% - 9% | ||||||||||||
Segment Margin | 21.3% - 21.7% | 21.6% - 21.8% | ||||||||||||
Expansion | Up 30 - 70 bps | Up 60 - 80 bps | ||||||||||||
Expansion Excluding the Impact of Quantinuum | Up 60 - 100 bps | Up 90 - 110 bps | ||||||||||||
Adjusted Earnings Per Share3 | $8.55 - $8.80 | $8.70 - $8.80 | ||||||||||||
Adjusted Earnings Growth3 | 6% - 9% | 8% - 9% | ||||||||||||
Operating Cash Flow | $5.5B - $5.9B | $5.2B - $5.6B | ||||||||||||
Free Cash Flow | $4.7B - $5.1B | $4.7B - $5.1B | ||||||||||||
Excluding Impact of Quantinuum | $4.9B - $5.3B | $4.9B - $5.3B |
3Q 2022 | 3Q 2021 | Change | ||||||||||||||||||
Sales | 8,951 | 8,473 | 6% | |||||||||||||||||
Organic Growth1 | 9% | |||||||||||||||||||
Operating Income Margin | 19.5% | 18.6% | 90 bps | |||||||||||||||||
Segment Margin1 | 21.8% | 21.2% | 60 bps | |||||||||||||||||
Earnings Per Share | $2.28 | $1.80 | 27% | |||||||||||||||||
Adjusted Earnings Per Share1 | $2.25 | $2.02 | 11% | |||||||||||||||||
Cash Flow from Operations | 2,083 | 1,119 | 86% | |||||||||||||||||
Operating Cash Flow Conversion | 134% | 89% | 45% | |||||||||||||||||
Free Cash Flow1 | 1,899 | 911 | 108% | |||||||||||||||||
Adjusted Free Cash Flow Conversion1 | 124% | 64% | 60% |
AEROSPACE | 3Q 2022 | 3Q 2021 | Change | |||||||||||||||||
Sales | 2,976 | 2,732 | 9% | |||||||||||||||||
Organic Growth1 | 10% | |||||||||||||||||||
Segment Profit | 818 | 740 | 11% | |||||||||||||||||
Segment Margin | 27.5% | 27.1% | 40 bps | |||||||||||||||||
HONEYWELL BUILDING TECHNOLOGIES | ||||||||||||||||||||
Sales | 1,526 | 1,370 | 11% | |||||||||||||||||
Organic Growth1 | 19% | |||||||||||||||||||
Segment Profit | 368 | 322 | 14% | |||||||||||||||||
Segment Margin | 24.1% | 23.5% | 60 bps | |||||||||||||||||
PERFORMANCE MATERIALS AND TECHNOLOGIES | ||||||||||||||||||||
Sales | 2,720 | 2,510 | 8% | |||||||||||||||||
Organic Growth1 | 14% | |||||||||||||||||||
Segment Profit | 615 | 558 | 10% | |||||||||||||||||
Segment Margin | 22.6% | 22.2% | 40 bps | |||||||||||||||||
SAFETY AND PRODUCTIVITY SOLUTIONS | ||||||||||||||||||||
Sales | 1,727 | 1,861 | (7%) | |||||||||||||||||
Organic Growth1 | (4%) | |||||||||||||||||||
Segment Profit | 271 | 245 | 11% | |||||||||||||||||
Segment Margin | 15.7% | 13.2% | 250 bps |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Product sales | $ | 6,588 | $ | 6,233 | $ | 19,404 | $ | 19,281 | |||||||||||||||
Service sales | 2,363 | 2,240 | 6,876 | 6,454 | |||||||||||||||||||
Net sales | 8,951 | 8,473 | 26,280 | 25,735 | |||||||||||||||||||
Costs, expenses and other | |||||||||||||||||||||||
Cost of products sold(1) | 4,630 | 4,463 | 13,676 | 13,748 | |||||||||||||||||||
Cost of services sold(1) | 1,351 | 1,283 | 4,025 | 3,710 | |||||||||||||||||||
5,981 | 5,746 | 17,701 | 17,458 | ||||||||||||||||||||
Selling, general and administrative expenses(1) | 1,228 | 1,152 | 3,965 | 3,595 | |||||||||||||||||||
Other (income) expense | (337) | (215) | (846) | (1,023) | |||||||||||||||||||
Interest and other financial charges | 98 | 90 | 270 | 263 | |||||||||||||||||||
6,970 | 6,773 | 21,090 | 20,293 | ||||||||||||||||||||
Income before taxes | 1,981 | 1,700 | 5,190 | 5,442 | |||||||||||||||||||
Tax expense (benefit) | 432 | 427 | 1,244 | 1,274 | |||||||||||||||||||
Net income | 1,549 | 1,273 | 3,946 | 4,168 | |||||||||||||||||||
Less: Net income (loss) attributable to the noncontrolling interest | (3) | 16 | (1) | 54 | |||||||||||||||||||
Net income attributable to Honeywell | $ | 1,552 | $ | 1,257 | $ | 3,947 | $ | 4,114 | |||||||||||||||
Earnings per share of common stock - basic | $ | 2.30 | $ | 1.82 | $ | 5.81 | $ | 5.93 | |||||||||||||||
Earnings per share of common stock - assuming dilution | $ | 2.28 | $ | 1.80 | $ | 5.76 | $ | 5.86 | |||||||||||||||
Weighted average number of shares outstanding - basic | 674.1 | 690.6 | 679.3 | 693.6 | |||||||||||||||||||
Weighted average number of shares outstanding - assuming dilution | 679.6 | 698.9 | 685.3 | 702.0 |
(1) | Cost of products and services sold and Selling, general and administrative expenses include amounts for repositioning and other charges, the service cost component of pension and other postretirement (income) expense, and stock compensation expense. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
Net Sales | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Aerospace | $ | 2,976 | $ | 2,732 | $ | 8,623 | $ | 8,130 | |||||||||||||||
Honeywell Building Technologies | 1,526 | 1,370 | 4,486 | 4,135 | |||||||||||||||||||
Performance Materials and Technologies | 2,720 | 2,510 | 7,867 | 7,408 | |||||||||||||||||||
Safety and Productivity Solutions | 1,727 | 1,861 | 5,300 | 6,062 | |||||||||||||||||||
Corporate and All Other | 2 | — | 4 | — | |||||||||||||||||||
Total | $ | 8,951 | $ | 8,473 | $ | 26,280 | $ | 25,735 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
Segment Profit | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Aerospace | $ | 818 | $ | 740 | $ | 2,338 | $ | 2,212 | |||||||||||||||
Honeywell Building Technologies | 368 | 322 | 1,064 | 942 | |||||||||||||||||||
Performance Materials and Technologies | 615 | 558 | 1,726 | 1,522 | |||||||||||||||||||
Safety and Productivity Solutions | 271 | 245 | 755 | 840 | |||||||||||||||||||
Corporate and All Other | (120) | (72) | (298) | (155) | |||||||||||||||||||
Total segment profit | 1,952 | 1,793 | 5,585 | 5,361 | |||||||||||||||||||
Interest and other financial charges | (98) | (90) | (270) | (263) | |||||||||||||||||||
Stock compensation expense (1) | (50) | (56) | (163) | (172) | |||||||||||||||||||
Pension ongoing income (2) | 247 | 261 | 748 | 809 | |||||||||||||||||||
Other postretirement income (2) | 10 | 18 | 30 | 53 | |||||||||||||||||||
Repositioning and other charges (3,4) | (100) | (96) | (714) | (338) | |||||||||||||||||||
Other (5) | 20 | (130) | (26) | (8) | |||||||||||||||||||
Income before taxes | $ | 1,981 | $ | 1,700 | $ | 5,190 | $ | 5,442 |
(1) | Amounts included in Selling, general and administrative expenses. | ||||||||||
(2) | Amounts included in Cost of products and services sold, Selling, general and administrative expenses (service costs) and Other income (expense) (non-service cost components). | ||||||||||
(3) | Amounts included in Cost of products and services sold, Selling, general and administrative expenses, and Other (income) expense. | ||||||||||
(4) | Includes repositioning, asbestos, and environmental expenses. | ||||||||||
(5) | Amounts include the other components of Other (income) expense not included within other categories in this reconciliation. Equity income of affiliated companies is included in segment profit. |
September 30, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 7,449 | $ | 10,959 | |||||||
Short-term investments | 516 | 564 | |||||||||
Accounts receivable, less allowances of $349 and $177, respectively | 7,363 | 6,830 | |||||||||
Inventories | 5,501 | 5,138 | |||||||||
Other current assets | 1,696 | 1,881 | |||||||||
Total current assets | 22,525 | 25,372 | |||||||||
Investments and long-term receivables | 807 | 1,222 | |||||||||
Property, plant and equipment - net | 5,339 | 5,562 | |||||||||
Goodwill | 16,974 | 17,756 | |||||||||
Other intangible assets - net | 3,220 | 3,613 | |||||||||
Insurance recoveries for asbestos related liabilities | 238 | 322 | |||||||||
Deferred income taxes | 437 | 489 | |||||||||
Other assets | 10,747 | 10,134 | |||||||||
Total assets | $ | 60,287 | $ | 64,470 | |||||||
LIABILITIES | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 6,118 | $ | 6,484 | |||||||
Commercial paper and other short-term borrowings | 3,434 | 3,542 | |||||||||
Current maturities of long-term debt | 1,315 | 1,803 | |||||||||
Accrued liabilities | 7,242 | 7,679 | |||||||||
Total current liabilities | 18,109 | 19,508 | |||||||||
Long-term debt | 12,236 | 14,254 | |||||||||
Deferred income taxes | 2,406 | 2,364 | |||||||||
Postretirement benefit obligations other than pensions | 203 | 208 | |||||||||
Asbestos-related liabilities | 1,693 | 1,800 | |||||||||
Other liabilities | 7,303 | 7,087 | |||||||||
Redeemable noncontrolling interest | 7 | 7 | |||||||||
Shareowners’ equity | 18,330 | 19,242 | |||||||||
Total liabilities, redeemable noncontrolling interest and shareowners’ equity | $ | 60,287 | $ | 64,470 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||
Net income | $ | 1,549 | $ | 1,273 | $ | 3,946 | $ | 4,168 | |||||||||||||||
Less: Net income (loss) attributable to the noncontrolling interest | (3) | 16 | (1) | 54 | |||||||||||||||||||
Net income attributable to Honeywell | 1,552 | 1,257 | 3,947 | 4,114 | |||||||||||||||||||
Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activities: | |||||||||||||||||||||||
Depreciation | 166 | 171 | 494 | 506 | |||||||||||||||||||
Amortization | 134 | 137 | 411 | 427 | |||||||||||||||||||
Gain on sale of non-strategic businesses and assets | (10) | (5) | (10) | (95) | |||||||||||||||||||
Repositioning and other charges | 100 | 96 | 714 | 338 | |||||||||||||||||||
Net payments for repositioning and other charges | (96) | (147) | (316) | (505) | |||||||||||||||||||
Pension and other postretirement income | (257) | (279) | (778) | (862) | |||||||||||||||||||
Pension and other postretirement benefit receipts (payments) | (9) | (2) | (14) | (29) | |||||||||||||||||||
Stock compensation expense | 50 | 56 | 163 | 172 | |||||||||||||||||||
Deferred income taxes | 88 | 88 | 208 | 189 | |||||||||||||||||||
Other | 119 | 171 | 200 | (106) | |||||||||||||||||||
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: | |||||||||||||||||||||||
Accounts receivable | 244 | (292) | (660) | (419) | |||||||||||||||||||
Inventories | 44 | (245) | (390) | (516) | |||||||||||||||||||
Other current assets | 163 | (226) | 125 | (324) | |||||||||||||||||||
Accounts payable | (125) | (23) | (365) | 379 | |||||||||||||||||||
Accrued liabilities | (80) | 362 | (821) | 106 | |||||||||||||||||||
Net cash provided by operating activities | 2,083 | 1,119 | 2,908 | 3,375 | |||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Expenditures for property, plant and equipment | (184) | (208) | (525) | (614) | |||||||||||||||||||
Proceeds from disposals of property, plant and equipment | — | 4 | 11 | 18 | |||||||||||||||||||
Increase in investments | (364) | (592) | (834) | (1,989) | |||||||||||||||||||
Decrease in investments | 238 | 575 | 884 | 1,906 | |||||||||||||||||||
Receipts from Garrett Motion Inc. | — | — | 409 | 375 | |||||||||||||||||||
Receipts from settlements of derivative contracts | 436 | 111 | 773 | 88 | |||||||||||||||||||
Cash paid for acquisitions, net of cash acquired | — | (7) | (178) | (1,334) | |||||||||||||||||||
Proceeds from sales of businesses, net of fees paid | — | 13 | — | 203 | |||||||||||||||||||
Net cash provided by (used for) investing activities | 126 | (104) | 540 | (1,347) | |||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Proceeds from issuance of commercial paper and other short-term borrowings | 2,386 | 1,282 | 5,310 | 3,640 | |||||||||||||||||||
Payments of commercial paper and other short-term borrowings | (2,398) | (1,282) | (5,324) | (3,637) | |||||||||||||||||||
Proceeds from issuance of common stock | 46 | 57 | 121 | 171 | |||||||||||||||||||
Proceeds from issuance of long-term debt | 1 | 2,482 | 2 | 2,509 | |||||||||||||||||||
Payments of long-term debt | (1,729) | (2,520) | (1,818) | (3,355) | |||||||||||||||||||
Repurchases of common stock | (390) | (650) | (2,827) | (2,499) | |||||||||||||||||||
Cash dividends paid | (669) | (646) | (2,028) | (1,950) | |||||||||||||||||||
Other | (24) | (41) | (45) | (74) | |||||||||||||||||||
Net cash used for financing activities | (2,777) | (1,318) | (6,609) | (5,195) | |||||||||||||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | (231) | (37) | (349) | (21) | |||||||||||||||||||
Net decrease in cash and cash equivalents | (799) | (340) | (3,510) | (3,188) | |||||||||||||||||||
Cash and cash equivalents at beginning of period | 8,248 | 11,427 | 10,959 | 14,275 | |||||||||||||||||||
Cash and cash equivalents at end of period | $ | 7,449 | $ | 11,087 | $ | 7,449 | $ | 11,087 |
Three Months Ended September 30, 2022 | |||||
Honeywell | |||||
Reported sales % change | 6% | ||||
Less: Foreign currency translation | (3)% | ||||
Less: Acquisitions, divestitures and other, net | —% | ||||
Organic sales % change | 9% | ||||
Sales decline attributable to lost Russian sales | 1% | ||||
Organic sales % change excluding lost Russian sales | 10% | ||||
Aerospace | |||||
Reported sales % change | 9% | ||||
Less: Foreign currency translation | (1)% | ||||
Less: Acquisitions, divestitures and other, net | —% | ||||
Organic sales % change | 10% | ||||
Honeywell Building Technologies | |||||
Reported sales % change | 11% | ||||
Less: Foreign currency translation | (8)% | ||||
Less: Acquisitions, divestitures and other, net | —% | ||||
Organic sales % change | 19% | ||||
Performance Materials and Technologies | |||||
Reported sales % change | 8% | ||||
Less: Foreign currency translation | (6)% | ||||
Less: Acquisitions, divestitures and other, net | —% | ||||
Organic sales % change | 14% | ||||
Safety and Productivity Solutions | |||||
Reported sales % change | (7)% | ||||
Less: Foreign currency translation | (3)% | ||||
Less: Acquisitions, divestitures and other, net | —% | ||||
Organic sales % change | (4)% | ||||
Three Months Ended September 30, | Twelve Months Ended December 31, | ||||||||||||||||
2022 | 2021 | 2021 | |||||||||||||||
Operating income | $ | 1,742 | $ | 1,575 | $ | 6,200 | |||||||||||
Stock compensation expense (1) | 50 | 56 | 217 | ||||||||||||||
Repositioning, Other (2,3) | 128 | 117 | 636 | ||||||||||||||
Pension and other postretirement service costs (3) | 32 | 45 | 159 | ||||||||||||||
Segment profit | $ | 1,952 | $ | 1,793 | $ | 7,212 | |||||||||||
Operating income | $ | 1,742 | $ | 1,575 | $ | 6,200 | |||||||||||
÷ Net sales | $ | 8,951 | $ | 8,473 | $ | 34,392 | |||||||||||
Operating income margin % | 19.5 | % | 18.6 | % | 18.0 | % | |||||||||||
Segment profit | $ | 1,952 | $ | 1,793 | $ | 7,212 | |||||||||||
÷ Net sales | $ | 8,951 | $ | 8,473 | $ | 34,392 | |||||||||||
Segment profit margin % | 21.8 | % | 21.2 | % | 21.0 | % | |||||||||||
Operating income | $ | 1,742 | $ | 1,575 | $ | 6,200 | |||||||||||
Add: Quantinuum operating loss (4) | 39 | 15 | 62 | ||||||||||||||
Operating income excluding Quantinuum | $ | 1,781 | $ | 1,590 | $ | 6,262 | |||||||||||
Segment profit | $ | 1,952 | $ | 1,793 | $ | 7,212 | |||||||||||
Add: Quantinuum segment loss (4) | 39 | 15 | 62 | ||||||||||||||
Segment profit excluding Quantinuum | $ | 1,991 | $ | 1,808 | $ | 7,274 | |||||||||||
Net sales | $ | 8,951 | $ | 8,473 | $ | 34,392 | |||||||||||
Less: Quantinuum net sales | 2 | 1 | 5 | ||||||||||||||
Net sales excluding Quantinuum | $ | 8,949 | $ | 8,472 | $ | 34,387 | |||||||||||
Operating income margin % excluding Quantinuum | 19.9 | % | 18.8 | % | 18.2 | % | |||||||||||
Segment profit margin % excluding Quantinuum | 22.2 | % | 21.3 | % | 21.2 | % | |||||||||||
Expansion in operating income margin % excluding Quantinuum | 110 bps | Not Reported | Not Reported | ||||||||||||||
Expansion in segment profit margin % excluding Quantinuum | 90 bps | Not Reported | Not Reported | ||||||||||||||
Expansion in operating income margin % | 90 bps | Not Reported | Not Reported | ||||||||||||||
Expansion in segment profit margin % | 60 bps | Not Reported | Not Reported | ||||||||||||||
(1) | Included in Selling, general and administrative expenses. | |||||||
(2) | Includes repositioning, asbestos, environmental expenses, equity income adjustment, and other charges. For the three months ended September 30, 2022, other charges include a benefit of $16 million primarily related to a favorable foreign exchange revaluation on an intercompany loan with a Russian affiliate, in addition to the recovery of outstanding accounts receivable previously reserved against, partially offset by additional charges for called guarantees, related to the initial suspension and wind down of our businesses and operations in Russia. For the three months ended September 30, 2022, and twelve months ended December 31, 2021, other charges include $17 million and $105 million, respectively, of incremental long-term contract labor cost inefficiencies due to severe supply chain disruptions (attributable to the COVID-19 pandemic) relating to the warehouse automation business within the Safety and Productivity Solutions segment. These costs include incurred amounts and provisions for anticipated losses recognized when total estimated costs at completion for certain of the business’ long-term contracts exceeded total estimated revenue. These certain costs represent unproductive labor costs due to unexpected supplier delays and the resulting downstream installation issues, demobilization and remobilization of contract workers, and resolution of contractor disputes. | |||||||
(3) | Included in Cost of products and services sold and Selling, general and administrative expenses. | |||||||
(4) | For the three months ended September 30, 2021, and the twelve months ended December 31, 2021, Quantinuum operating loss and segment loss includes the operating loss and segment loss of Honeywell Quantum Solutions, a wholly-owned subsidiary of Honeywell, prior to the November 29, 2021, combination of Honeywell Quantum Solutions and Cambridge Quantum Computing, resulting in the formation of Quantinuum. |
Three Months Ended September 30, | Twelve Months Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2021 | 2022(E) | ||||||||||||||||||||
Earnings per share of common stock - diluted (1) | $ | 2.28 | $ | 1.80 | $ | 7.91 | $8.21 - $8.31 | ||||||||||||||||
Pension mark-to-market expense (2) | — | — | 0.05 | No Forecast | |||||||||||||||||||
Changes in fair value for Garrett equity securities (3) | — | — | (0.03) | — | |||||||||||||||||||
Garrett related adjustments (4) | — | — | 0.01 | — | |||||||||||||||||||
Gain on sale of retail footwear business (5) | — | (0.01) | (0.11) | — | |||||||||||||||||||
Expense related to UOP Matters (6) | — | 0.23 | 0.23 | 0.07 | |||||||||||||||||||
Russian-related charges (7) | (0.02) | — | — | 0.43 | |||||||||||||||||||
Gain on sale of Russian entity (8) | (0.01) | — | — | (0.01) | |||||||||||||||||||
Adjusted earnings per share of common stock - diluted | $ | 2.25 | $ | 2.02 | $ | 8.06 | $8.70 - $8.80 | ||||||||||||||||
(1) | For the three months ended September 30, 2022, and 2021, adjusted earnings per share utilizes weighted average shares of approximately 679.6 million and 698.9 million, respectively. For the twelve months ended December 31, 2021, adjusted earnings per share utilizes weighted average shares of approximately 700.4 million. For the twelve months ended December 31, 2022, expected earnings per share utilizes weighted average shares of 683 million. | |||||||
(2) | Pension mark-to-market expense uses a blended tax rate of 25%, net of tax expense of $10 million for 2021. | |||||||
(3) | For the twelve months ended December 31, 2021, the adjustment was $19 million, net of tax expense of $5 million, due to changes in fair value for Garrett equity securities. | |||||||
(4) | For the twelve months ended December 31, 2021, the adjustment was $7 million, without tax benefit, due to a non-cash charge associated with the reduction in value of reimbursement receivables following Garrett's emergence from bankruptcy on April 30, 2021. | |||||||
(5) | For the three months ended September 30, 2021, and twelve months ended December 31, 2021, the adjustments were $4 million and $76 million, respectively, net of tax expense of $1 million and $19 million, respectively, due to the gain on sale of the retail footwear business. | |||||||
(6) | For the twelve months ended December 31, 2022, the adjustment was $50 million, without tax benefit, due to an expense related to UOP matters. For the three months ended September 30, 2021, and twelve months ended December 31, 2021, the adjustment was $160 million, without tax benefit, due to an expense related to UOP matters. | |||||||
(7) | For the three months ended September 30, 2022, the adjustment was $16 million, without tax benefit, primarily related to favorable foreign exchange revaluation on an intercompany loan with a Russian affiliate, in addition to the recovery of outstanding accounts receivable previously reserved against, partially offset by additional charges for called guarantees, related to the initial suspension and wind down of our businesses and operations in Russia. For the twelve months ended December 31, 2022, the adjustment was $293 million, including a tax valuation allowance benefit of $2 million, to exclude charges and the accrual of reserves related to outstanding accounts receivable and contract assets, impairment of intangible assets, foreign exchange revaluation, inventory reserves, the write-down of other assets, impairment of property, plant and equipment, employee severance, called guarantees, and a tax valuation allowance related to the initial suspension and wind down of our businesses and operations in Russia. | |||||||
(8) | For the three months ended September 30, 2022, the adjustment was $10 million, without tax benefit, due to the gain on sale of a Russian entity. |
Three Months Ended September 30, 2022 | Three Months Ended September 30, 2021 | ||||||||||
Cash provided by operating activities | $ | 2,083 | $ | 1,119 | |||||||
Expenditures for property, plant and equipment | (184) | (208) | |||||||||
Garrett cash receipts | — | — | |||||||||
Free cash flow | $ | 1,899 | $ | 911 | |||||||
Net income attributable to Honeywell | $ | 1,552 | $ | 1,257 | |||||||
Changes in fair value for Garrett equity securities (1) | — | 2 | |||||||||
Gain on sale of retail footwear business (2) | — | (4) | |||||||||
Expense related to UOP Matters (3) | — | 160 | |||||||||
Russian-related charges (4) | (16) | — | |||||||||
Gain on sale of Russian entity (5) | (10) | — | |||||||||
Adjusted net income attributable to Honeywell | $ | 1,526 | $ | 1,415 | |||||||
Cash provided by operating activities | $ | 2,083 | $ | 1,119 | |||||||
÷ Net income attributable to Honeywell | $ | 1,552 | $ | 1,257 | |||||||
Operating cash flow conversion % | 134 | % | 89 | % | |||||||
Free cash flow | $ | 1,899 | $ | 911 | |||||||
÷ Adjusted net income attributable to Honeywell | $ | 1,526 | $ | 1,415 | |||||||
Adjusted free cash flow conversion % | 124 | % | 64 | % |
(1) | For the three months ended September 30, 2021, the adjustment was $2 million, without tax benefit, changes in fair value for Garrett equity securities. | |||||||
(2) | For the three months ended September 30, 2021, the adjustment was $4 million, net of tax expense of $1 million, due to a gain on sale of the retail footwear business. | |||||||
(3) | For the three months ended September 30, 2021, the adjustment was $160 million, without tax benefit, due to an expense related to UOP matters. | |||||||
(4) | For the three months ended September 30, 2022, the adjustment was $16 million, without tax benefit, primarily related to a favorable foreign exchange revaluation on an intercompany loan with a Russian affiliate, in addition to the recovery of outstanding accounts receivable previously reserved against, partially offset by additional charges for called guarantees related to the initial suspension and wind down of our businesses and operations in Russia. | |||||||
(5) | For the three months ended September 30, 2022, the adjustment was $10 million, without tax benefit, due to the gain on sale of a Russian entity. |
Three Months Ended September 30, 2022 | |||||
Cash provided by operating activities | $ | 2,083 | |||
Expenditures for property, plant and equipment | (184) | ||||
Garrett cash receipts | — | ||||
Free cash flow | 1,899 | ||||
Cash provided by operating activities | $ | 2,083 | |||
÷ Net sales | $ | 8,951 | |||
Operating cash flow margin % | 23.3 | % | |||
Free cash flow | $ | 1,899 | |||
÷ Net sales | $ | 8,951 | |||
Free cash flow margin % | 21.2 | % |
Twelve Months Ended December 31, 2022(E) ($B) | |||||
Cash provided by operating activities | ~$5.2 - $5.6 | ||||
Expenditures for property, plant and equipment | ~(0.9) | ||||
Garrett cash receipts | 0.4 | ||||
Free cash flow | ~$4.7 - $5.1 | ||||
Free Cash flow attributable to Quantinuum | 0.2 | ||||
Free cash flow excluding Quantinuum | ~$4.9 - $5.3 |
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