0000930413-11-004872.txt : 20110722 0000930413-11-004872.hdr.sgml : 20110722 20110722074526 ACCESSION NUMBER: 0000930413-11-004872 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20110722 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110722 DATE AS OF CHANGE: 20110722 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HONEYWELL INTERNATIONAL INC CENTRAL INDEX KEY: 0000773840 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 222640650 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08974 FILM NUMBER: 11981269 BUSINESS ADDRESS: STREET 1: 101 COLUMBIA RD STREET 2: PO BOX 4000 CITY: MORRISTOWN STATE: NJ ZIP: 07962 BUSINESS PHONE: 9734552000 MAIL ADDRESS: STREET 1: 101 COLUMBIA RD P O BOX 4000 STREET 2: 101 COLUMBIA RD P O BOX 4000 CITY: MORRISTOWN STATE: NJ ZIP: 07962 FORMER COMPANY: FORMER CONFORMED NAME: ALLIEDSIGNAL INC DATE OF NAME CHANGE: 19940929 8-K 1 c66340_8-k.htm

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

Form 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT – July 22, 2011

(Date of earliest event reported)

 

HONEYWELL INTERNATIONAL INC.

(Exact name of Registrant as specified in its Charter)

 

 

 

DELAWARE

1-8974

22-2640650

(State or other jurisdiction
of incorporation)

(Commission File Number)

(I.R.S. Employer
Identification Number)

 

 

101 COLUMBIA ROAD, P.O. BOX 4000, MORRISTOWN, NEW JERSEY

07962-2497

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (973) 455-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

EARNINGS RELEASE.

          Honeywell International Inc. will hold its conference call regarding second quarter earnings on Friday, July 22, 2011 at 9:30 a.m. Eastern Time. The earnings release was distributed on PR Newswire on Friday, July 22, 2011 at approximately 7:30 a.m. Eastern Time. Interested investors may access the conference call by dialing (631) 291-4830 or through a World Wide Web simulcast available at the “Investor Relations” section of the company’s website (http://www.honeywell.com/investor). Related presentation materials will also be posted to the Investor Relations section of the website prior to the conference call. Investors are advised to log on to the website at least 15 minutes prior to the conference call to allow sufficient time for downloading any necessary software.

          Honeywell International Inc. issued a press release announcing its second quarter earnings on July 22, 2011, which is attached as an exhibit to this report.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

 

 

(d)

Exhibit 99

SIGNATURE

          Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Date: July 22, 2011

HONEYWELL INTERNATIONAL INC.

 

 

 

 

By:

/s/ Thomas F. Larkins

 

 

 

 

Thomas F. Larkins

 

 

Vice President, Corporate Secretary and

 

 

Deputy General Counsel

EX-99.1 2 c66340_ex99.htm

Exhibit 99.1

logo

News Release

Contacts:

Media

Robert C. Ferris

(973) 455-3388

rob.ferris@honeywell.com

Investor Relations

Elena Doom

(973) 455-2222

elena.doom@honeywell.com
   

 

HONEYWELL REPORTS SECOND QUARTER SALES UP 15% TO

$9.1 BILLION AND EARNINGS PER SHARE UP 40% TO $1.02

 

  • Sales Including $234 Million of Discontinued Operations - $9.3 Billion, High End of Previous Range
  • CPG Moved to Discontinued Operations - Divestiture Expected to Close in Q3
  • 8% Organic Growth Driven by New Products, Emerging Region Growth, and Strong End Markets
  • Confident in 2011 Outlook - Raising EPS Guidance to $3.85-4.00, Up 28-33% vs. 2010 Proforma EPS

 

MORRIS TOWNSHIP, N.J., July 22, 2011 -- Honeywell (NYSE: HON) today announced second quarter 2011 sales of $9.1 billion, up 15% versus $7.9 billion in the second quarter of 2010, excluding $234 million from its discontinued Consumer Products Group (CPG) operations in 2011 and $235 million in 2010. Earnings per share were up 40% in the second quarter to $1.02 versus $0.73 in the second quarter last year, which reflects income from discontinued operations of $0.02 in both the second quarter of 2011 and 2010. Cash flow from operations was $1,138 million and free cash flow (cash flow from operations less capital expenditures) was $973 million, compared to $1,090 million and $975 million, respectively, in the second quarter last year. Honeywell has received all necessary regulatory approvals for the previously announced sale of CPG, which is expected to close in the third quarter. The table below shows a reconciliation of continuing and discontinued operations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Continuing
Operations

  

Discontinued
Operations - CPG

  

Total
Honeywell
 

2Q11

  

V%

  

2Q11

  

V%

  

2Q11

  

V%

Sales

 

 

$

 

9.086

  

 

 

  

15

%

 

 

 

$

 

234

  

 

 

  

-1

%

 

 

 

$

 

9,320

  

 

 

  

14

%

 

EPS

 

 

$

 

1.00

  

 

 

  

41

%

 

 

 

$

 

0.02

  

 

 

  

0

%

 

 

 

$

 

1.02

  

 

 

  

40

%

 

Note: Dollars in millions, except per share amounts; Discontinued operations presentation has no effect on cash flow

“Honeywell’s strong second quarter performance reflects terrific execution and continued momentum in our key end markets, contributing to our upside performance in the first half of 2011,” said Honeywell Chairman and CEO Dave Cote. “The sales growth we’re seeing reflects our extensive innovation pipeline and increasing presence in high growth regions. We had particularly robust growth in the Aerospace commercial aftermarket, and our short-cycle businesses such as Advanced Materials, ACS Products, and Turbo Technologies continued to perform well.”

 

“We expect good organic growth to continue in the second half of 2011,” continued Cote. “Favorable global macro trends like safety, security, energy, and globalization combined with our continued investments in new technologies, high growth regions, and our process initiatives will enable the company to continue to grow and outperform now and over the long-term.”

 



Q2’11 Results - 2


Honeywell now expects 2011 sales of $36.1-36.7 billion, an increase of 12-14% over 2010, which excludes CPG sales now reported in discontinued operations in both periods; and earnings in the range of $3.85-4.00 per share (including discontinued operations) versus a previous estimate of $3.80-3.95 per share, an increase of 28-33% over 2010 proforma EPS of $3.00 (in each case, this excludes any mark-to-market pension adjustments). 2010 reported earnings were $2.59 per share. The company also reaffirmed that it expects free cash flow of $3.5-3.7 billion, excluding any U.S. pension contributions in 2011 (cash flow from operations of $3.3-3.5 billion including $1 billion of pension contributions made to date).

 

Recent Highlights

 

Aerospace

·        Sales were up 6% compared with the second quarter of 2010, primarily due to strong increases in the Commercial Aftermarket and marginally higher Defense and Space sales, slightly offset by amounts recognized for payments to Business and General Aviation (BGA) OE customers for pre-production costs.

·        Segment profit was up 2% and segment margins were down 70 bps to 16.0%, primarily due to the BGA OE payments discussed above, which unfavorably impacted margins by 110 basis points year-over-year, and higher R&D investments, partially offset by volume, favorable mix, and productivity net of inflation.

·        Honeywell won a contract valued at more than $70 million to provide Auxiliary Power Units (APUs) for Hainan Airlines’ fleet of A320 aircraft. The APUs will be delivered over three years, beginning in 2012. As part of the agreement, Honeywell will also provide repair and overhaul services of APUs on other existing aircraft.

·        Honeywell and Safran announced the development of green electric taxi capabilities for new and existing commercial jets. Honeywell’s APUs and Safran’s electric motors will be used in the development of this new hybrid system. Honeywell’s APU generator will power electrical motors in the aircraft’s wheels without using main engines during aircraft ground operations, saving the airlines millions in fuel costs and slashing carbon and other emissions created during runway taxi operations.

·        Honeywell Technology Solutions, Inc. (HTSI) won a five-year, $38 million contract with the Federal Aviation Administration (FAA) to maintain security systems at more than 1,000 locations in the agency’s Air Traffic Organization (ATO) Air Traffic Systems Branch. HTSI will provide corrective maintenance for security systems at FAA locations across the country, including air traffic control facilities and national airspace navigation, surveillance, and communication sites. The corrective maintenance contract includes security equipment such as video surveillance, physical access control equipment, intrusion detection, and barrier arms.

 

Automation and Control Solutions

·        Sales were up 20%, compared with the second quarter of 2010, with 8% growth from acquisitions, net of divestitures, 6% organic growth due to the general industrial recovery, new product introductions, emerging region strength, and favorable macro trends such as energy demand and energy efficiency, and the 6% impact from favorable foreign exchange.

·         Segment profit was up 24% and segment margins increased 40 bps to 12.8% driven by higher volumes and project sales, partially offset by material inflation and investment for growth across the portfolio.

·        Building Solutions completed the first phase of energy-efficient building upgrades at the University of Wisconsin-Milwaukee (UWM), which will save the school an estimated $620,000 in annual energy costs. The work is part of a three-phase, $21.7 million energy conservation and



Q2’ 11 Results - 3


           infrastructure renewal program that will improve comfort and efficiency in university facilities while cutting utility costs and greenhouse gas emissions.

·        Process Solutions was selected as the engineering, procurement, and construction contractor by North Refineries Company (NRC) of Iraq to upgrade the automation systems at its refinery in Baiji, Iraq. The $9.6 million project will upgrade NRC’s existing control system with Honeywell’s Experion® Process Knowledge System® and Safety Manager to improve operational efficiency, reliability, and safety at the refinery.

·        Security launched Total Connect™ 2.0, a new technology platform for its popular Total Connect service that allows home and business owners to remotely manage their security systems and view live video via personal computers, smart phones, tablets, and other web-enabled devices. Later this year, Honeywell will introduce Tuxedo Touch™, a new line of color graphic touchscreen keypads that will further strengthen the company’s Connected Home offering.  These new touchscreens will extend the capabilities of Honeywell’s industry-leading VISTA® security systems through new home automation and energy management capabilities, enabling the control of devices such as thermostats, electronic locks, lighting modules, and window shades.

 

Transportation Systems

·       Sales were up 26% compared with the second quarter of 2010, due to foreign exchange, higher passenger and commercial vehicle Turbo volumes globally, new platform launches, and higher European diesel penetration.

·        Segment profit was up 45% and segment margins increased 160 bps to 13.0%, primarily driven by higher volumes and increased productivity, offset by material inflation.

·       Honeywell Turbo Technologies was awarded new platform wins with customers including Caterpillar, Ford, General Motors, Honda, Mazda, Tata, Toyota, and Volkswagen, estimated at approximately $600 million in revenue throughout the life of the programs. The platforms span the European, Asian, and U.S. markets for both gasoline and diesel passenger and commercial vehicle applications and are expected to launch beginning in 2012. Year-to-date platform wins are estimated at approximately $1 billion in revenue throughout the life of the programs. 

·       Honeywell Turbo Technologies announced the launch of several turbocharger technologies at the 2011 Shanghai Auto Show that were developed in China specifically for the Chinese market. The new Honeywell turbo innovations supported both gasoline and diesel applications and were featured on the Chinese-made Chery 2.0L G5 and JAC’s 2.0L Refine and 1.9L Rein models. China is the world’s fastest growing market for turbochargers with anticipated growth of more than 20% in 2011 versus 2010.

 

Specialty Materials

·        Sales were up 12% compared with the second quarter of 2010, resulting from improved global end markets, commercial excellence, and new product applications in the Advanced Materials business, coupled with strong UOP growth.

·        Segment profit was up 31% and segment margins increased 300 bps to 20.0% due to higher sales and licensing revenues, commercial excellence, and cost productivity, partially offset by raw material inflation.

·        Honeywell embarked on a new “world first” in alternative energy use as its Honeywell Green Jet FuelTM powered a Gulfstream jet across the Atlantic using a 50/50 blend of petroleum-based jet fuel and camelina-derived green jet fuel and landing in Paris, France.   The fuel meets all specifications for flight without any modifications to the aircraft or engine.   Honeywell’s historic transatlantic green jet fuel flight closely followed the route taken by Charles Lindbergh in his famous first flight across the Atlantic to Le Bourget Field in Paris.  Honeywell Green Jet Fuel was also used in a Boeing 747-8 freighter flight across the Atlantic.   ASTM International, a key global standards body, has recently given provisional approval for the use of green jet fuel in commercial flights, and full approval is expected this month.



Q2’11 Results - 4


·        UOP announced that China’s Wison (Nanjing) Clean Energy Company Ltd. has selected its technology to convert methanol into building blocks for chemical products at a coal chemical complex in China. The project will be the first commercial-scale installation of UOP’s advanced methanol-to-olefins (MTO) solution, which allows petrochemical producers to use methanol from natural gas or coal, instead of petroleum, to produce high yields of high-value plastics and petrochemicals. This solution, allows producers in countries with limited supplies of crude oil, but plentiful quantities of coal or natural gas, to produce high-value petrochemicals.

·        Fluorine Products announced that it has tripled production capacity at its Buffalo Research Lab in Buffalo, N.Y. for its low-global-warming-potential product HFO-1234ze to meet the growing global need for the material. The product is used in multiple foam and aerosol applications. It was achieved through equipment upgrades and overall productivity improvements during the

last 18 months. 

 

Acquisitions

·        Honeywell signed a definitive agreement to acquire EMS Technologies, Inc., a leading provider of connectivity solutions for mobile networking, rugged mobile computers, and satellite communications. The acquisition will enhance Honeywell’s existing capabilities in rugged mobile computing technologies within its Automation and Control Solutions (ACS) business and satellite communications within its Aerospace business. EMS’s $181 million Global Resource Management (GRM) division provides highly ruggedized mobile computing products and services for use in transportation, logistics, and workforce management settings as well as secure satellite-based asset tracking and messaging technology for search and rescue, warehousing, and field force automation environments. Through its $174 million Aviation division, EMS provides terminals, antennas, in-cabin network devices, rugged data storage, and surveillance applications predominantly for use on aircraft. Honeywell expects the tender offer for EMS’s outstanding shares to be completed in the third quarter.

 

Honeywell will discuss its results during its investor conference call today starting at 9:30 a.m. EDT. To participate, please dial (631) 291-4830 a few minutes before the 9:30 a.m. EDT start. Please mention to the operator that you are dialing in for Honeywell’s investor conference call. The live webcast of the investor call will be available through the “Investor Relations” section of the company’s Website (http://www.honeywell.com/investor). Investors can access a replay of the conference call from 12:30 p.m. EDT, July 22, until midnight, July 29, by dialing (706) 645-9291. The access code is 68707283.

 

Honeywell International (www.honeywell.com) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes, and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywell’s shares are traded on the New York, London, and Chicago Stock Exchanges. For more news and information on Honeywell, please visit www.honeywellnow.com.

 

This release contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements.

 # # # 



Q2’11 Results - 5

Honeywell International Inc.
Consolidated Statement of Operations (Unaudited)
(In millions except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

7,146

 

$

6,184

 

$

13,959

 

$

11,991

 

Service sales

 

 

1,940

 

 

1,742

 

 

3,799

 

 

3,471

 

 

 

 

 

 

 

Net sales

 

 

9,086

 

 

7,926

 

 

17,758

 

 

15,462

 

 

 

 

 

 

 

Costs, expenses and other

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold (A)

 

 

5,425

 

 

4,783

 

 

10,619

 

 

9,279

 

Cost of services sold (A)

 

 

1,239

 

 

1,184

 

 

2,469

 

 

2,355

 

 

 

 

 

 

 

 

 

 

6,664

 

 

5,967

 

 

13,088

 

 

11,634

 

Selling, general and administrative expenses (A)

 

 

1,248

 

 

1,110

 

 

2,480

 

 

2,200

 

Other (income) expense

 

 

(22

)

 

(9

)

 

(51

)

 

(11

)

Interest and other financial charges

 

 

96

 

 

91

 

 

195

 

 

198

 

 

 

 

 

 

 

 

 

 

7,986

 

 

7,159

 

 

15,712

 

 

14,021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before taxes

 

 

1,100

 

 

767

 

 

2,046

 

 

1,441

 

Tax expense

 

 

304

 

 

209

 

 

560

 

 

405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations after taxes

 

 

796

 

 

558

 

 

1,486

 

 

1,036

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations after taxes

 

 

14

 

 

16

 

 

32

 

 

34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

810

 

 

574

 

 

1,518

 

 

1,070

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net income attributable to the noncontrolling interest

 

 

—

 

 

8

 

 

3

 

 

15

 

 

 

 

 

 

 

 

Net income attributable to Honeywell

 

$

810

 

$

566

 

$

1,515

 

$

1,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to Honeywell:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations less net income attributable to the noncontrolling interest

 

 

796

 

 

550

 

 

1,483

 

 

1,021

 

Income from discontinued operations

 

 

14

 

 

16

 

 

32

 

 

34

 

 

 

 

 

 

 

Net income attributable to Honeywell

 

$

810

 

$

566

 

$

1,515

 

$

1,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of common stock - basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

1.01

 

 

0.72

 

 

1.89

 

 

1.33

 

Income from discontinued operations

 

 

0.02

 

 

0.02

 

 

0.04

 

 

0.04

 

 

 

 

 

 

 

Net Income

 

$

1.03

 

$

0.74

 

$

1.93

 

$

1.37

 

 

 

 

 

 

 

Earnings per share of common stock - assuming dilution:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

1.00

 

 

0.71

 

 

1.86

 

 

1.32

 

Income from discontinued operations

 

 

0.02

 

 

0.02

 

 

0.04

 

 

0.04

 

 

 

 

 

 

 

Net Income

 

$

1.02

 

$

0.73

 

$

1.90

 

$

1.36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding-basic

 

 

785.0

 

 

769.6

 

 

785.2

 

 

767.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding - assuming dilution

 

 

797.3

 

 

777.3

 

 

797.5

 

 

774.5

 

 

 

 

 

 

 

(A) Cost of products and services sold and selling, general and administrative expenses include amounts for repositioning and other charges, pension and other post-retirement expense, and stock compensation expense.

Q2’11 Results - 6

Honeywell International Inc.
Discontinued Operations Reconciliation (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2Q11(1)

 

V%

 

2Q YTD(1)

 

V%

 

2011E(2)

 

V%

 

 

 

 

 

 

 

 

 

 

Sales - Continuing Operations

 

$
9,086

 

 

 

$
17,758

 

 

 

$
36.1 - 36.7

 

 

 

Sales - CPG

 

234

 

 

 

470

 

 

 

~0.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales - Total Honeywell

 

$
9,320

 

14

%

$
18,228

 

14

%

$
36.7-37.3

 

10%-12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS - Continuing Operations - assuming dilution

 

1.00

 

 

 

1.86

 

 

 

3.62-3.77

 

 

 

EPS - CPG - assuming dilution

 

0.02

 

 

 

0.04

 

 

 

~0.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS - Total Honeywell

 

$
1.02

 

40

%

$
1.90

 

40

%

$
3.85-4.00

 

28%-33

%

(1) Dollars in millions, except per share amount
(2) Dollars in billions, except per share amount

Q2’11 Results - 7

Honeywell International Inc.
Segment Data (Unaudited)
(Dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

Net Sales

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace

 

$

2,810

 

$

2,647

 

$

5,506

 

$

5,153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automation and Control Solutions

 

 

3,880

 

 

3,237

 

 

7,536

 

 

6,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Materials

 

 

1,406

 

 

1,259

 

 

2,761

 

 

2,398

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Systems

 

 

990

 

 

783

 

 

1,955

 

 

1,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

9,086

 

$

7,926

 

$

17,758

 

$

15,462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Segment Profit to Income From Continuing Operations Before Taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

 

 

Segment Profit

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace

 

$

451

 

$

443

 

$

918

 

$

856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automation and Control Solutions

 

 

496

 

 

401

 

 

955

 

 

787

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Materials

 

 

281

 

 

214

 

 

565

 

 

384

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Systems

 

 

129

 

 

89

 

 

247

 

 

158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

(56

)

 

(68

)

 

(124

)

 

(100

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Segment Profit

 

 

1,301

 

 

1,079

 

 

2,561

 

 

2,085

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income/(expense) (A)

 

 

8

 

 

—

 

 

28

 

 

(2

)

Interest and other financial charges

 

 

(96

)

 

(91

)

 

(195

)

 

(198

)

Stock compensation expense (B)

 

 

(42

)

 

(36

)

 

(91

)

 

(86

)

Pension expense ongoing (B)

 

 

(22

)

 

(46

)

 

(57

)

 

(96

)

Other postretirement income/(expense) (B)

 

 

45

 

 

(12

)

 

27

 

 

6

 

Repositioning and other charges (B)

 

 

(94

)

 

(127

)

 

(227

)

 

(268

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before taxes

 

$

1,100

 

$

767

 

$

2,046

 

$

1,441

 

 

 

 

 

 

 

(A) Equity income/(loss) of affiliated companies is included in Segment Profit

(B) Amounts included in cost of products and services sold and selling, general and administrative expenses.

Q2’11 Results - 8

Honeywell International Inc.
Consolidated Balance Sheet (Unaudited)
(Dollars in millions)

 

 

 

 

 

 

 

 

 

 

June 30,
2011

 

December 31,
2010

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

3,548

 

$

2,650

 

Accounts, notes and other receivables

 

 

7,344

 

 

6,841

 

Inventories

 

 

4,197

 

 

3,822

 

Deferred income taxes

 

 

926

 

 

877

 

Investments and other current assets

 

 

545

 

 

455

 

Assets held for sale

 

 

826

 

 

841

 

 

 

 

 

Total current assets

 

 

17,386

 

 

15,486

 

 

 

 

 

 

 

 

 

Investments and long-term receivables

 

 

516

 

 

616

 

Property, plant and equipment - net

 

 

4,718

 

 

4,724

 

Goodwill

 

 

11,492

 

 

11,275

 

Other intangible assets - net

 

 

2,347

 

 

2,537

 

Insurance recoveries for asbestos related liabilities

 

 

802

 

 

825

 

Deferred income taxes

 

 

1,115

 

 

1,221

 

Other assets

 

 

1,274

 

 

1,150

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

39,650

 

$

37,834

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREOWNERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

4,442

 

$

4,199

 

Short-term borrowings

 

 

68

 

 

67

 

Commercial paper

 

 

350

 

 

299

 

Current maturities of long-term debt

 

 

514

 

 

523

 

Accrued liabilities

 

 

6,555

 

 

6,446

 

Liabilities related to assets held for sale

 

 

182

 

 

190

 

 

 

 

 

Total current liabilities

 

 

12,111

 

 

11,724

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

6,790

 

 

5,755

 

Deferred income taxes

 

 

661

 

 

636

 

Postretirement benefit obligations other than pensions

 

 

1,411

 

 

1,477

 

Asbestos related liabilities

 

 

1,565

 

 

1,557

 

Other liabilities

 

 

4,928

 

 

5,898

 

Shareowners’ equity

 

 

12,184

 

 

10,787

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareowners’ equity

 

$

39,650

 

$

37,834

 

 

 

 

 

Q2’11 Results - 9

Honeywell International Inc.
Consolidated Statement of Cash Flows (Unaudited)
(Dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Honeywell

 

$

810

 

$

566

 

$

1,515

 

$

1,055

 

Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

236

 

 

241

 

 

478

 

 

474

 

Gain on sale of non-strategic businesses and assets

 

 

(2

)

 

—

 

 

(46

)

 

—

 

Repositioning and other charges

 

 

94

 

 

128

 

 

227

 

 

270

 

Net payments for repositioning and other charges

 

 

(98

)

 

(102

)

 

(207

)

 

(221

)

Pension and other postretirement expense

 

 

(22

)

 

59

 

 

32

 

 

92

 

Pension and other postretirement benefit payments

 

 

(10

)

 

(53

)

 

(1,047

)

 

(89

)

Stock compensation expense

 

 

42

 

 

36

 

 

91

 

 

86

 

Deferred income taxes

 

 

90

 

 

415

 

 

158

 

 

487

 

Excess tax benefits from share based payment arrangements

 

 

(17

)

 

(2

)

 

(30

)

 

(4

)

Other

 

 

10

 

 

(98

)

 

105

 

 

(194

)

Changes in assets and liabilities, net of the effects of acquisitions and divestitures:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts, notes and other receivables

 

 

(365

)

 

(271

)

 

(537

)

 

(188

)

Inventories

 

 

(59

)

 

(6

)

 

(389

)

 

(131

)

Other current assets

 

 

(9

)

 

15

 

 

(23

)

 

(3

)

Accounts payable

 

 

264

 

 

180

 

 

260

 

 

97

 

Accrued liabilities

 

 

174

 

 

(18

)

 

108

 

 

102

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

1,138

 

 

1,090

 

 

695

 

 

1,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenditures for property, plant and equipment

 

 

(165

)

 

(115

)

 

(289

)

 

(185

)

Proceeds from disposals of property, plant and equipment

 

 

2

 

 

1

 

 

3

 

 

2

 

Increase in investments

 

 

(65

)

 

(15

)

 

(229

)

 

(311

)

Decrease in investments

 

 

114

 

 

10

 

 

176

 

 

10

 

Cash paid for acquisitions, net of cash acquired

 

 

(1

)

 

(996

)

 

(8

)

 

(996

)

Proceeds from sales of businesses, net of fees paid

 

 

(2

)

 

—

 

 

215

 

 

—

 

Other

 

 

27

 

 

4

 

 

58

 

 

(12

)

 

 

 

 

 

 

Net cash used for investing activities

 

 

(90

)

 

(1,111

)

 

(74

)

 

(1,492

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in commercial paper

 

 

50

 

 

(100

)

 

51

 

 

850

 

Net increase/(decrease) in short-term borrowings

 

 

7

 

 

13

 

 

(2

)

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

99

 

 

23

 

 

200

 

 

55

 

Proceeds from issuance of long-term debt

 

 

3

 

 

—

 

 

1,384

 

 

—

 

Payments of long-term debt

 

 

(2

)

 

—

 

 

(439

)

 

(1,001

)

Excess tax benefits from share based payment arrangements

 

 

17

 

 

2

 

 

30

 

 

4

 

Repurchases of common stock

 

 

(504

)

 

—

 

 

(504

)

 

—

 

Cash dividends paid

 

 

(266

)

 

(233

)

 

(530

)

 

(464

)

 

 

 

 

 

 

Net cash (used for)/provided by financing activities

 

 

(596

)

 

(295

)

 

190

 

 

(544

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign exchange rate changes on cash and cash equivalents

 

 

20

 

 

(84

)

 

87

 

 

(147

)

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

472

 

 

(400

)

 

898

 

 

(350

)

Cash and cash equivalents at beginning of period

 

 

3,076

 

 

2,851

 

 

2,650

 

 

2,801

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

 

3,548

 

 

2,451

 

 

3,548

 

 

2,451

 

 

 

 

 

 

 

Q2’11 Results - 10

Honeywell International Inc.
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
(Dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2010

 

2011

 

2010

 

2011 Guidance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash provided by operating activities

 

$

1,138

 

$

1,090

 

$

695

 

$

1,833

 

$

3,300-3,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenditures for property, plant and equipment

 

 

(165

)

 

(115

)

 

(289

)

 

(185

)

 

~(800

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow

 

$

973

 

$

975

 

$

406

 

$

1,648

 

$

2,500-2,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Pension Cash Contributions (1)

 

 

—

 

 

—

 

 

1,000

 

 

—

 

 

~1,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow, excluding U.S. pension cash contributions

 

$

973

 

$

975

 

$

1,406

 

$

1,648

 

$

3,500-3,700

 

 

 

 

 

 

 

 

(1) Represents cash contributions to date.

We define free cash flow as cash provided by operating activities, less cash expenditures for property, plant and equipment.

We believe that this metric is useful to investors and management as a measure of cash generated by business operations that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business development activities or acquisitions, and to pay dividends, repurchase stock, or repay debt obligations prior to their maturities. This metric can also be used to evaluate our ability to generate cash flow from business operations and the impact that this cash flow has on our liquidity.

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