0000930413-16-008408.txt : 20161006 0000930413-16-008408.hdr.sgml : 20161006 20161006172304 ACCESSION NUMBER: 0000930413-16-008408 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20161006 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20161006 DATE AS OF CHANGE: 20161006 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: 161925575 BUSINESS ADDRESS: STREET 1: 115 TABOR ROAD CITY: MORRIS PLAINS STATE: NJ ZIP: 07950 BUSINESS PHONE: 9734552000 MAIL ADDRESS: STREET 1: 115 TABOR ROAD CITY: MORRIS PLAINS STATE: NJ ZIP: 07950 FORMER COMPANY: FORMER CONFORMED NAME: ALLIEDSIGNAL INC DATE OF NAME CHANGE: 19940929 8-K 1 c86220_8k.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 – October 6, 2016

(Date of earliest event reported)

 

honeywell international inc.

(Exact name of Registrant as specified in its Charter)

 

DELAWARE

(State or other jurisdiction of
incorporation)

  

1-8974

(Commission File Number)

  

22-2640650

(I.R.S. Employer Identification
Number)

 

115 TABOR ROAD, MORRIS PLAINS, NEW JERSEY   07950-2546
(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.

 

As previously announced in July 2016, Honeywell International Inc. (the Company) realigned the business units comprising its Automation and Control Solutions (ACS) business segment by forming two new business segments: Home and Building Technologies (HBT) and Safety and Productivity Solutions (SPS). HBT will include Environmental & Energy Solutions, Security and Fire, and Building Solutions and Distribution. Additionally, the Industrial Combustion/Thermal business, previously part of Environmental & Energy Solutions in ACS, will become part of Performance Materials and Technologies. SPS will include Sensing & Productivity Solutions and Industrial Safety, as well as the recently acquired Intelligrated business. Under the realigned segment reporting structure, the Company will have four business segments:  Aerospace, HBT, Performance Materials and Technologies, and SPS. This realignment has no impact on the Company’s historical consolidated financial position, results of operations or cash flows. To provide historical information on a basis consistent with its new reporting structure, the Company has recast certain historical segment information to conform to the new reporting structure.

 

Attached as Exhibit 99.1 is a supplemental schedule containing unaudited segment information for the three months ended March 31, 2016 and 2015, three and six months ended June 30, 2016 and 2015, three and nine months ended September 30, 2015 and years ended December 31, 2015 and 2014. The recast financial information contained in Exhibit 99.1 does not represent a restatement or reissuance of previously issued financial statements.

 

On October 6, 2016, the Company issued a press release announcing updates to guidance for the quarters ending September 30, 2016 and December 31, 2016 and year ending December 31, 2016, which is furnished herewith as Exhibit 99.2.

 

The information in this item 2.02, including the exhibits in item 9.01, should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and the Company’s quarterly reports on Form 10-Q for the periods ended March 31, 2016, June 30, 2016 and September 30, 2015.

 

The information furnished pursuant to this Item 2.02, including Exhibit 99, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

 

(d)     Exhibit 99.1 Honeywell International Inc. – Supplemental unaudited historical business segment information based on realignment of business segments effective with the quarter ending September 30, 2016 (furnished pursuant to Item 2.02 hereof)

 

(d)     Exhibit 99.2 Honeywell International Inc. – Press Release dated October 6, 2016

2

SIGNATURE

 

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

 

Date:  October 6, 2016 HONEYWELL INTERNATIONAL INC.
   
  By: /s/ Jeffrey N. Neuman
  Jeffrey N. Neuman
  Vice President, Corporate Secretary and
  Deputy General Counsel
3
 EX-99.1 2 c86220_ex99-1.htm

Exhibit 99.1

 

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

 

Segment Information for three months ended March 31, 2016 and 2015

 

   Three Months Ended
   March 31,
   2016  2015
Net Sales          
Aerospace  $3,705   $3,607 
Home and Building Technologies   2,477    2,093 
Performance Materials and Technologies   2,281    2,403 
Safety and Productivity Solutions   1,059    1,110 
Total  $9,522   $9,213 
Segment Profit          
Aerospace  $798   $752 
Home and Building Technologies   360    324 
Performance Materials and Technologies   461    519 
Safety and Productivity Solutions   150    176 
Corporate   (49)   (50)
Total  $1,720   $1,721 
   
 

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

 

   Three Months Ended     
   March 31,  %
   2016  2015  Change
Aerospace Sales               
Commercial Aviation Original Equipment  $701   $683    3%
Commercial Aviation Aftermarket   1,148    1,082    6%
Defense and Space   1,069    1,075    (1)%
Transportation Systems   787    767    3%
Total Aerospace Sales   3,705    3,607      
Home and Building Technologies Sales               
Home and Building Products   1,398    1,089    28%
Home and Building Distribution   1,079    1,004    7%
Total Home and Building Technologies Sales   2,477    2,093      
Performance Materials and Technologies Sales               
UOP   568    914    (38)%
Process Solutions   837    693    21%
Advanced Materials   876    796    10%
Total Performance Materials and Technologies Sales   2,281    2,403      
Safety and Productivity Solutions Sales               
Safety   508    508    - 
Productivity Solutions   551    602    (8)%
Total Safety and Productivity Solutions Sales   1,059    1,110      
Net Sales  $9,522   $9,213      
2

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

 

Home and Building Technologies

 

   Three Months Ended
   March 31,
   2016  2015  % Change
Net sales  $2,477   $2,093    18%
Cost of products and services sold   1,657    1,347      
Selling, general and administrative expenses   404    370      
Other   56    52      
Segment profit  $360   $324    11%

 

   2016 vs. 2015        
   Three Months Ended        
   March 31,        
Factors Contributing to Year-Over-Year Change  Sales   Segment
Profit		        
Organic growth/ Operational segment profit   8%   17%        
Foreign exchange   (3)%   (2)%        
Acquisitions and divestitures, net   13 %   (4) %        
Total % Change   18 %   11 %        

 

Performance Materials and Technologies

 

   Three Months Ended 
   March 31,
   2016  2015  % Change
Net sales  $2,281   $2,403    (5)%
Cost of products and services sold   1,528    1,620      
Selling, general and administrative expenses   255    229      
Other   37    35      
Segment profit  $461   $519    (11)%
3

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

 

   2016 vs. 2015        
   Three Months Ended        
   March 31,        
Factors Contributing to Year-Over-Year Change  Sales   Segment
Profit		        
Organic growth/ Operational segment profit   (9)%   (14)%        
Foreign exchange   (2)%   (3)%        
Acquisitions and divestitures, net   6%   6%        
Total % Change   (5)%   (11)%        

 

Safety and Productivity Solutions

 

   Three Months Ended
   March 31,
   2016  2015  % Change
Net sales  $1,059   $1,110    (5)%
Cost of products and services sold   690    704      
Selling, general and administrative expenses   196    210      
Other   23    20      
Segment profit  $150   $176    (15)%

 

   2016 vs. 2015        
   Three Months Ended        
   March 31,        
Factors Contributing to Year-Over-Year Change  Sales   Segment
Profit		        
Organic growth/ Operational segment profit   (4)%   (13)%        
Foreign exchange   (3)%   (3)%        
Acquisitions and divestitures, net   2%   1%        
Total % Change   (5)%   (15)%        
4

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

 

Segment Information for the three and six months ended June 30, 2016 and 2015

 

   Three Months Ended  Six Months Ended
   June 30,  June 30,
   2016  2015  2016  2015
Net Sales                    
Aerospace  $3,779   $3,827   $7,484   $7,434 
Home and Building Technologies   2,676    2,280    5,153    4,373 
Performance Materials and Technologies   2,434    2,455    4,715    4,858 
Safety and Productivity Solutions   1,102    1,213    2,161    2,323 
Total  $9,991   $9,775   $19,513   $18,988 
Segment Profit                    
Aerospace  $791   $777   $1,589   $1,529 
Home and Building Technologies   412    356    772    680 
Performance Materials and Technologies   520    524    981    1,043 
Safety and Productivity Solutions   173    196    323    372 
Corporate   (49)   (50)   (98)   (100)
Total  $1,847   $1,803   $3,567   $3,524 
5

Honeywell International Inc.

(Unaudited)

(Dollars in millions)

 

   Three Months Ended      Six Months Ended    
   June 30,  %  June 30,  %
   2016  2015  Change  2016  2015  Change
Aerospace Sales                              
Commercial Aviation Original Equipment  $676   $741    (9)%  $1,377   $1,424    (3)%
Commercial Aviation Aftermarket   1,207    1,143    6%   2,355    2,225    6%
Defense and Space   1,096    1,178    (7)%   2,165    2,253    (4)%
Transportation Systems   800    765    5%   1,587    1,532    4%
Total Aerospace Sales   3,779    3,827         7,484    7,434      
Home and Building Technologies Sales                              
Home and Building Products   1,499    1,144    31%   2,897    2,233    30%
Home and Building Distribution   1,177    1,136    4%   2,256    2,140    5%
Total Home and Building Technologies Sales   2,676    2,280         5,153    4,373      
Performance Materials and Technologies Sales                              
UOP   614    745    (18)%   1,182    1,659    (29)%
Process Solutions   886    747    19%   1,723    1,440    20%
Advanced Materials   934    963    (3)%   1,810    1,759    3%
Total Performance Materials and Technologies Sales   2,434    2,455         4,715    4,858      
Safety and Productivity Solutions Sales                              
Safety   524    534    (2)%   1,032    1,042    (1)%
Productivity Solutions   578    679    (15)%   1,129    1,281    (12)%
Total Safety and Productivity Solutions Sales   1,102    1,213         2,161    2,323      
Net Sales  $9,991   $9,775        $19,513   $18,988      

6

Honeywell International Inc.

(Unaudited)

(Dollars in millions)

 

Home and Building Technologies

 

   Three Months Ended  Six Months Ended
   June 30,  June 30,
   2016  2015  % Change  2016  2015  % Change
Net sales  $2,676   $2,280    17%  $5,153   $4,373    18%
Cost of products and services sold   1,785    1,498         3,442    2,845      
Selling, general and administrative expenses   423    378         827    748      
Other   56    48         112    100      
Segment profit  $412   $356    16%  $772   $680    14%

 

   2016 vs. 2015
   Three Months Ended  Six Months Ended
   June 30,  June 30,
Factors Contributing to Year-Over-Year Change  Sales  Segment
Profit		  Sales  Segment
Profit
Organic growth/ Operational segment profit   4%   11%   6%   14%
Foreign exchange   (2)%   (2)%   (2)%   (2)%
Acquisitions and divestitures, net   15%   7%   14%   2%
Total % Change   17%   16%   18%   14%

 

Performance Materials and Technologies

 

   Three Months Ended  Six Months Ended
   June 30,  June 30,
   2016  2015  % Change  2016  2015  % Change
Net sales  $2,434   $2,455    (1)%  $4,715   $4,858    (3)%
Cost of products and services sold   1,613    1,672         3,141    3,292      
Selling, general and administrative expenses   264    227         519    456      
Other   37    32         74    67      
Segment profit  $520   $524    (1)%  $981   $1,043    (6)%
7

Honeywell International Inc.

(Unaudited)

(Dollars in millions)

 

   2016 vs. 2015
   Three Months Ended  Six Months Ended
   June 30,  June 30,
Factors Contributing to Year-Over-Year Change  Sales  Segment
Profit		  Sales  Segment
Profit
Organic growth/ Operational segment profit   (5)%   (6)%   (7)%   (10)%
Foreign exchange   (1)%   (1)%   (2)%   (2)%
Acquisitions and divestitures, net   5%   6%   6%   6%
Total % Change   (1)%   (1)%   (3)%   (6)%

 

Safety and Productivity Solutions

 

   Three Months Ended  Six Months Ended
   June 30,  June 30,
   2016  2015  % Change  2016  2015  % Change
Net sales  $1,102   $1,213    (9%)  $2,161   $2,323    (7%)
Cost of products and services sold   707    780         1,397    1,484      
Selling, general and administrative expenses   197    212         393    422      
Other   25    25         48    45      
Segment profit  $173   $196    (12%)  $323   $372    (13%)

 

   2016 vs. 2015
   Three Months Ended  Six Months Ended
   June 30,  June 30,
Factors Contributing to Year-Over-Year Change  Sales  Segment
Profit		  Sales  Segment
Profit
Organic growth/ Operational segment profit   (8)%   (9)%   (6)%   (11)%
Foreign exchange   (1)%   (2)%   (2)%   (2)%
Acquisitions and divestitures, net   -    (1)%   1%   - 
Total % Change   (9)%   (12)%   (7)%   (13)%
8

Honeywell International Inc.

(Unaudited)

(Dollars in millions)

 

Segment Information for the three and nine months ended September 30, 2015

 

   Three Months Ended  Nine Months Ended
   September 30,  September 30,
   2015  2015
Net Sales          
Aerospace  $3,820   $11,254 
Home and Building Technologies   2,313    6,686 
Performance Materials and Technologies   2,279    7,137 
Safety and Productivity Solutions   1,199    3,522 
Total  $9,611   $28,599 
Segment Profit          
Aerospace  $833   $2,362 
Home and Building Technologies   408    1,088 
Performance Materials and Technologies   474    1,517 
Safety and Productivity Solutions   193    565 
Corporate   (56)   (156)
Total  $1,852   $5,376 
9

Honeywell International Inc.

(Unaudited)

(Dollars in millions)

 

   Three Months Ended  Nine Months Ended
   September 30,  September 30,
   2015  2015
Aerospace Sales          
Commercial Aviation Original Equipment  $725   $2,149 
Commercial Aviation Aftermarket   1,200    3,425 
Defense and Space   1,200    3,453 
Transportation Systems   695    2,227 
Total Aerospace Sales   3,820    11,254 
Home and Building Technologies Sales          
Home and Building Products   1,189    3,422 
Home and Building Distribution   1,124    3,264 
Total Home and Building Technologies Sales   2,313    6,686 
Performance Materials and Technologies Sales          
UOP   638    2,297 
Process Solutions   725    2,165 
Advanced Materials   916    2,675 
Total Performance Materials and Technologies Sales   2,279    7,137 
Safety and Productivity Solutions Sales          
Safety   546    1,588 
Productivity Solutions   653    1,934 
Total Safety and Productivity Solutions Sales   1,199    3,522 
Net Sales  $9,611   $28,599 
10

Honeywell International Inc.

(Unaudited)

(Dollars in millions)

 

Home and Building Technologies   
       
   Three Months Ended  Nine Months Ended
   September 30,  September 30,
   2015  2015
Net sales  $2,313   $6,686 
Cost of products and services sold   1,502    4,347 
Selling, general and administrative expenses   351    1,099 
Other   52    152 
Segment profit  $408   $1,088 
           
Performance Materials and Technologies   
       
   Three Months Ended  Nine Months Ended
   September 30,  September 30,
   2015  2015
Net sales  $2,279   $7,137 
Cost of products and services sold   1,547    4,839 
Selling, general and administrative expenses   226    682 
Other   32    99 
Segment profit  $474   $1,517 
           
Safety and Productivity Solutions      
       
   Three Months Ended  Nine Months Ended
   September 30,  September 30,
   2015  2015
Net sales  $1,199   $3,522 
Cost of products and services sold   774    2,258 
Selling, general and administrative expenses   210    632 
Other   22    67 
Segment profit  $193   $565 
11

Honeywell International Inc.

(Unaudited)

(Dollars in millions)

 

Segment Information for the years ended December 31, 2015 and 2014

 

   Years Ended December 31,
   2015  2014
Net Sales          
Aerospace  $15,237   $15,598 
Home and Building Technologies   9,161    9,485 
Performance Materials and Technologies   9,475    10,477 
Safety and Productivity Solutions   4,708    4,746 
Total  $38,581   $40,306 
Segment Profit          
Aerospace  $3,218   $2,915 
Home and Building Technologies   1,512    1,455 
Performance Materials and Technologies   1,990    1,876 
Safety and Productivity Solutions   746    686 
Corporate   (210)   (236)
Total  $7,256   $6,696 
12

Honeywell International Inc.

(Unaudited)

(Dollars in millions)

 

   Years Ended December 31,   
   2015  2014  % Change
Aerospace Sales               
Commercial Aviation Original Equipment  $2,905   $2,607    11%
Commercial Aviation Aftermarket   4,656    4,578    2%
Defense and Space   4,715    4,754    (1)%
Transportation Systems   2,961    3,659    (19)%
Total Aerospace Sales   15,237    15,598      
Home and Building Technologies Sales               
Home and Building Products   4,711    4,868    (3)%
Home and Building Distribution   4,450    4,617    (4)%
Total Home and Building Technologies Sales   9,161    9,485      
Performance Materials and Technologies Sales               
UOP   2,976    3,195    (7)%
Process Solutions   2,989    3,378    (12)%
Advanced Materials   3,510    3,904    (10)%
Total Performance Materials and Technologies Sales   9,475    10,477      
Safety and Productivity Solutions Sales               
Safety   2,135    2,339    (9)%
Productivity Solutions   2,573    2,407    7%
Total Safety and Productivity Solutions Sales   4,708    4,746      
Net Sales  $38,581   $40,306      
13

Honeywell International Inc.

(Unaudited)

(Dollars in millions)

 

Home and Building Technologies         
          
   2015  2014  % Change
Net sales  $9,161   $9,485    (3)%
Cost of products and services sold   5,961    6,231      
Selling, general and administrative expenses   1,488    1,618      
Other   200    181      
Segment profit  $1,512   $1,455    4%
       
   2015 vs. 2014
Factors Contributing to Year-Over-Year Change  Sales  Segment
Profit
Organic growth/ Operational segment profit   3%   10%
Foreign exchange   (6)%   (6)%
Acquisitions and divestitures, net   -    - 
Total % Change   (3)%   4%
          
Performance Materials and Technologies         
          
   2015  2014  % Change
Net sales  $9,475   $10,477    (10)%
Cost of products and services sold   6,414    7,385      
Selling, general and administrative expenses   936    1,082      
Other   135    134      
Segment profit  $1,990   $1,876    6%
       
   2015 vs. 2014
Factors Contributing to Year-Over-Year Change  Sales  Segment
Profit
Organic growth/ Operational segment profit   (6)%   10%
Foreign exchange   (4)%   (4)%
Acquisitions and divestitures, net   -    - 
Total % Change   (10)%   6%
14

Honeywell International Inc.

(Unaudited)

(Dollars in millions)

 

Safety and Productivity Solutions         
          
   2015  2014  % Change
Net sales  $4,708   $4,746    (1)%
Cost of products and services sold   3,020    3,052      
Selling, general and administrative expenses   851    933      
Other   91    75      
Segment profit  $746   $686    9%
       
   2015 vs. 2014
Factors Contributing to Year-Over-Year Change  Sales  Segment
Profit
Organic growth/ Operational segment profit   2%   11%
Foreign exchange   (5)%   (4)%
Acquisitions and divestitures, net   2%   2%
Total % Change   (1)%   9%
15
 EX-99.2 3 c86220_ex99-2.htm

Exhibit 99.2

 

 

Contacts:

Media Investor Relations
Robert C. Ferris Mark Macaluso  
(973) 455-3388 (973) 455-2222
rob.ferris@honeywell.com mark.macaluso@honeywell.com

 

HONEYWELL UPDATES FINANCIAL GUIDANCE FOR NEW REPORTING SEGMENTS, PORTFOLIO ENHANCEMENTS, AND SEGMENT OUTLOOKS

·Updated Guidance Reflects Two New Reporting Segments, Completion Of Several Portfolio Enhancements, And Adoption Of Stock Compensation Accounting Standard

·3Q16 EPS Guidance Now ~$1.60, Or ~$1.67 Excluding $0.07 Deployed To Restructuring;
Sales Up ~2% Due To Acquisitions, Core Organic Sales Down ~(3)%*

·Announces Possible Fourth-Quarter Debt Refinancing

·Initiates Fourth-Quarter EPS Guidance Up 10%-13% (Ex-Pension MTM)(1)

·Updates Full-Year EPS Guidance (Ex-Pension MTM)(1) To $6.60-$6.64, Up 8%-9%

MORRIS PLAINS, N.J., October 6, 2016 -- Honeywell (NYSE: HON) today announced it has updated its previous guidance for the third quarter of 2016 to reflect the separation of the former Automation and Control Solutions reporting segment into two new reporting segments; the acquisition of Intelligrated, which closed on August 29, 2016; the sale of the Honeywell Technology Solutions (HTSI) government services business, which closed on September 16, 2016; the spin-off of Resins and Chemicals as AdvanSix Inc., which became effective on October 1, 2016; and lower outlooks in certain business segments.

The company also announced it has elected to adopt the Financial Accounting Standards Board’s (FASB) Accounting Standards Update 2016-09 for stock compensation in the third quarter, which is in advance of the mandatory 2017 effective date. As a result of the early adoption, the company is required to report the impacts as though the accounting standard update had been adopted on January 1, 2016. Accordingly, the first- and second-quarter results have been recast to reflect a $0.03 and $0.04 tax benefit, respectively. Benefits from the accounting change and sale of HTSI will be deployed to fund restructuring and other charges in the third quarter.

Third-quarter EPS is now expected to be approximately $1.60. Excluding restructuring associated with the $0.07 of first-half benefits related to stock compensation adoption, third-quarter EPS is expected to be approximately $1.67, in-line with the prior guidance range. This guidance also reflects the impact of lower shipments to Business and General Aviation OEMs, continued program delays and completions in the

 

(1) Excludes Impact From Contemplated Q4 Debt Refinancing

 

* Throughout this press release, core organic sales growth refers to reported sales growth less the impacts from foreign currency translation, M&A and raw materials pass-through pricing in the Resins & Chemicals business of PMT. The raw materials pricing impact is excluded in instances where raw materials costs are passed through to customers, which drives fluctuations in selling prices not tied to volume growth. A reconciliation of core organic sales growth to reported sales growth is provided in the attached financial tables.

 

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Q3’16 Update - 2

 

domestic and international businesses within Defense & Space, and lower volumes in Productivity Solutions (part of Safety and Productivity Solutions).

In addition, the company initiated fourth-quarter EPS guidance of $1.74-$1.78, up 10-13 percent year-over year, which excludes any pension mark-to-market (MTM) adjustment and the impact of a potential fourth-quarter debt refinancing that would lower interest expense in 2017 and beyond, but result in a fourth-quarter pre-tax charge of approximately $140 million. The refinancing transaction is dependent on continued favorable interest rate and credit market conditions. Full-year EPS guidance, excluding those same items, is updated to $6.60-6.64, up 8-9 percent year-over-year. Core organic sales* are now expected to be down 1-2 percent for the full year.

The company now expects the following for the third quarter and fourth quarter 2016:

 

3Q 2016 Guidance

  Prior Guidance Revised Guidance Change vs. 2015  
Sales  $10.0 - $10.2B  ~$9.8B 2%
Core Organic Growth Flat - 1% ~(3%)  
Segment Margin 18.7% - 18.9% 17.3% - 17.5% (180) - (200) bps(1)
       
Earnings Per Share $1.67 - $1.72 ~$1.60 Flat
EPS Ex-$0.07 From 1H Accounting Change Deployed To 3Q Restructuring   ~$1.67  
       

4Q 2016 Guidance

Complete 4Q 2016 guidance will be provided with Honeywell’s third-quarter earnings release on October 21, 2016

    Guidance Change vs. 2015  
Sales    $10.1 - $10.3B 1% - 3%
       
Earnings Per Share (Ex-Pension MTM)(2)   $1.74 - $1.78 10% - 13%

 

(1) Segment Margin Down (80) - (100) bps ex-M&A And Recognition of Aerospace OEM Incentives Associated With 3Q Deployment

(2) Excludes Impact From Contemplated Q4 Debt Refinancing

 

Honeywell will discuss its new reporting segments, portfolio enhancements, adoption of stock compensation accounting standard, contemplated fourth-quarter debt refinancing, and updated outlook during an investor conference call on October 7, 2016, starting at 8 a.m. EDT. To participate, please dial (866) 564-7439 (domestic) or (719) 325-4756 (international) approximately ten minutes before the 8 a.m. EDT start. Please mention to the operator that you are dialing in for Honeywell’s update call or provide the conference code HON3QUPDATE. The live webcast of the investor call, as well as related presentation materials, will be available through the Investor Relations section of the company’s Website (www.honeywell.com/investor). Investors can hear a replay of the conference call from 11 a.m. EDT, October 7, until 11 a.m. EDT, October 14, by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international). The access code is 1859067.

 

– MORE –

   
 

Q3’16 Update - 3

 

Honeywell (www.honeywell.com) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes, and industry; turbochargers; and performance materials. For more news and information on Honeywell, please visit www.honeywell.com/newsroom.

 

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 materially from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission. Information on our third-quarter financial performance contained in this report is preliminary pending the issuance of our Form 10-Q for the period ending September 30, 2016.

 

 

 

 

 

 

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Honeywell International Inc.

Reconciliation of Segment Profit to Operating Income and

Calculation of Segment Profit and Operating Income Margins (Unaudited)

(Dollars in millions)

 

   Three Months Ended
September 30,
   2015
Segment Profit  $1,852 
Stock compensation expense (A)  (41)
Repositioning and other (A, B)  (142)
Pension ongoing income (A)  96 
Other postretirement expense (A)  (10)
Operating Income  $1,755 
Segment Profit  $1,852 
÷ Sales  $9,611 
Segment Profit Margin %  19.3 %
Operating Income  $1,755 
÷ Sales  $9,611 
Operating Income Margin %  18.3 %

(A) Included in cost of products and services sold and selling, general and administrative expenses.

(B) Includes repositioning, asbestos, environmental expenses and equity income adjustment.

 

We believe these measures are useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

Honeywell International Inc.

Reconciliation of Earnings Per Share to Earnings Per Share, Excluding Pension Mark-to-Market and Debt Refinancing Expenses (Unaudited)

 

    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
    2015 (1)   2015 (2)
Earnings per share of common stock - assuming dilution   $1.53     $6.04  
Pension mark-to-market expense   0.05     0.06  
Debt refinancing expense   -     - 8
Earnings per share of common stock - assuming dilution,excluding pension mark-to-market and debt refinancing expenses   $1.58     $6.10  

 

(1) Utilizes weighted average shares of 780.8 million. Mark-to-market uses a blended tax rate of 36.1%.

(2) Utilizes weighted average shares of 789.3 million. Mark-to-market uses a blended tax rate of 36.1%.

 

We believe EPS, excluding pension mark-to-market and debt refinancing expenses, is a measure that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

 

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