-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EoK1HYkjrXt+HUYj5ObsK5hYUsUmjAlE52kH/2ipUvzHvMZdVSUMaZRXoeWr9w3b K6t24DjJ/Wf4hfJqPCN3Sw== 0000950117-04-002629.txt : 20040721 0000950117-04-002629.hdr.sgml : 20040721 20040721061358 ACCESSION NUMBER: 0000950117-04-002629 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040721 ITEM INFORMATION: FILED AS OF DATE: 20040721 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: 04923021 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 a38064.txt HONEYWELL INTERNATIONAL INC. ================================================================================ 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 21, 2004 (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 (Commission File Number) (I.R.S. Employer of incorporation) 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 ================================================================================ ITEM 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. EARNINGS RELEASE. Honeywell International Inc. will hold its second quarter 2004 earnings release conference call on Wednesday, July 21, 2004 at 8:00 a.m. Eastern Time. The earnings release was distributed on BusinessWire approximately one hour prior to the conference call. Interested investors may access the conference call by dialing (706) 643-7681 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 its 2004 second quarter earnings release on July 21st which is attached as an exhibit to this report. 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 21, 2004 HONEYWELL INTERNATIONAL INC. By: /s/ Thomas F. Larkins --------------------------------------- Thomas F. Larkins Vice President, Corporate Secretary and Deputy General Counsel EX-99 2 ex-99.txt EXHIBIT 99 Exhibit 99 Contact: Media Investors Victoria Streitfeld Nicholas Noviello 973-455-5281 973-455-2222 victoria.streitfeld@honeywell.com nicholas.noviello@honeywell.com HONEYWELL'S SECOND-QUARTER EARNINGS PER SHARE 42 CENTS, UP 14% VERSUS PRIOR YEAR; SALES CLIMB 11% WITH INCREASES IN ALL FOUR OPERATING SEGMENTS o EPS increases despite $107 million pre-tax pension headwind o Second-quarter operating cash flow of $505 million and free cash flow of $357 million o Continued progress on portfolio, productivity and growth initiatives MORRIS TOWNSHIP, N.J., July 21, 2004 -- Honeywell (NYSE: HON) today announced second-quarter earnings per share of 42 cents, an increase of 5 cents or 14% over the prior year. Sales of $6.4 billion were up 11% compared to 2003, primarily due to strong volume growth in all four operating segments. Cash flow from operations was $505 million and free cash flow (cash flow from operations less capital expenditures) was $357 million. "In the second quarter, all four Honeywell businesses saw increases in sales and improving end markets," said Honeywell Chairman and Chief Executive Officer Dave Cote. "Double digit net income growth was driven by strong conversion on higher volume. We are benefiting from the depth and breadth of our technology, our strong customer relationships and the actions taken to prepare for the market turnaround we are now experiencing. We continue to fund growth initiatives that will translate into future opportunities across our businesses." Net income increased to $361 million for the quarter, with volume driven profitability partially offset by the impact of higher non-cash pension expense. Free cash flow of $357 million equals approximately 100% of net income. Net debt (total debt minus cash and cash equivalents) was $1.9 billion, or 15% of net capital (shareowners' equity plus net debt). -MORE- 2-results "Order rates continue to be strong in all of our businesses," Mr. Cote said. "The Aerospace business was awarded its third major contract on Boeing's 7E7 Dreamliner. With the addition of the Flight Control Electronics contract, the estimated total program value is now in excess of $2.5 billion. Automation and Control Solutions introduced a new touch screen programmable thermostat and won significant new contracts in its Building and Process Solutions businesses. Transportation System's Garrett'r' turbo technology was introduced on the new diesel Mercedes Benz E320 in the United States with very positive reviews. In Specialty Materials, our Spectra'r' bullet-resistant fiber and our broad fluorines product offerings continue to experience double digit orders growth." During the quarter the company continued to make progress divesting non-core businesses and improving its cost base. Divestitures (principally Security Monitoring) resulted in gains of $233 million. Additionally, the company recorded a $40 million impairment charge relating to the planned disposition of its Polyester business and a $170 million charge in connection with environmental and other litigation matters. Productivity projects resulted in a $32 million charge for repositioning and other actions. * * * * * Second-Quarter Segment Highlights Aerospace o Sales were up 14%, compared with the second quarter of 2003, led by 20% growth in Commercial sales. Defense & Space sales grew 7% in the quarter. o Segment margin was 15.0%, compared with 12.2% a year ago, due primarily to strong growth in high margin aftermarket sales. o Honeywell received its third award on Boeing's new 7E7 Dreamliner. The company now has content in Flight Control Electronics, the Crew Information System/Management System and the Navigation package on this next generation aircraft. o Primus Epic'r' Integrated Avionics System received its sixth certification with FAA approval on Dassault's Falcon 2000EX EASy Business Jet. o The company's Enhanced Ground Proximity Warning System (EGPWS) deliveries reached 30,000 units. -MORE- 3-results Automation and Control Solutions o Sales were up 7%, compared with the second quarter of 2003, primarily due to new product introductions, strong demand for sensing technologies and favorable foreign currency translation. o Segment margin was 10.5%, compared with 10.2% a year ago, primarily driven by volume growth. o VisionPRO touch screen programmable thermostat, an innovation in climate control, was launched with very positive consumer reaction. o Building Solutions was awarded over $30 million in contracts for design and construction of integrated systems, including a centralized closed circuit television monitoring and digital recording system for the urban railway network in Perth, Australia. o Process Solutions won a $20 million contract with Petrom to implement Experion PKS'TM' safety systems and advanced process solutions at its refinery in Romania. Transportation Systems o Sales increased 15%, compared with the second quarter of 2003, driven by continued strong growth in Turbochargers and favorable foreign currency translation. o Segment margin was 14.1%, compared with 13.8% a year ago, primarily driven by unit volume. o Acceptance of diesel continues to grow in the United States, with the recent introduction of the new Mercedes Benz E320, which is equipped with Honeywell's Garrett'r' turbo technology. This vehicle, which has garnered very positive reviews, joins several other newly introduced turbo diesel vehicles in the United States, including the Volkswagen Passat and Touareg. o Consumer Products Group continued to drive brand extensions and successfully launched new Autolite'r' and Prestone'r' branded products at select specialty retailers. Specialty Materials o Sales were up 9%, compared with the second quarter of 2003, driven by double-digit increases in Chemicals, Performance Products and Electronic Materials. o Segment margin was 5.7%, compared with 6.2% a year ago, reflecting higher raw material costs primarily in non-core businesses. o Performance Products announced a $20 million investment to expand Spectra'r' production in order to meet increasing demand for this light, incredibly strong bullet-resistant fiber. o Electronic Materials enhanced its capability to support the move to smaller computer chip technology by acquiring a thermal solutions product line and manufacturing operations in Thailand. -MORE- 4-results Honeywell will discuss its results during its investor webcast at 8:00 am on July 21st. The webcast and related presentation materials will be available at www.honeywell.com/investor. * * * * * Honeywell is a $23 billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; turbochargers; automotive products; and specialty chemicals. Based in Morris Township, N.J., Honeywell is one of 30 stocks that make up the Dow Jones Industrial Average and is a component of the Standard & Poor's 500 Index. Its shares are traded on the New York Stock Exchange under the symbol HON, as well as on the London, Chicago and Pacific Stock Exchanges. For more about Honeywell, visit www.honeywell.com. ----------------- - -------------------------------------------------------------------------------- This release contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, including statements about future business operations, financial performance and market conditions. Such forward-looking statements involve risks and uncertainties inherent in business forecasts as further described in our filings under the Securities Exchange Act. - -------------------------------------------------------------------------------- # # # 5-results Honeywell International Inc. Consolidated Statement of Operations (Unaudited) (In millions except per share amounts)
Three Months Ended June 30, ------------------------------ 2004 2003 -------- -------- Net sales $ 6,388 $ 5,749 ------- ------- Costs, expenses and other Cost of goods sold 5,228 (A) 4,514 (C) Selling, general and administrative expenses 823 (A) 762 (C) (Gain) loss on sale of non-strategic businesses (233)(B) (31)(D) Equity in (income) loss of affiliated companies (17)(A) (6) Other (income) expense (18) (24)(E) Interest and other financial charges 82 87 ------- ------- 5,865 5,302 ------- ------- Income before taxes 523 447 Tax expense 162 128 ------- ------- Net income $ 361 $ 319 ======= ======= Earnings per share of common stock - basic $ 0.42 $ 0.37 ======= ======= Earnings per share of common stock - assuming dilution $ 0.42 $ 0.37 ======= ======= Weighted average number of shares outstanding-basic 860 860 ======= ======= Weighted average number of shares outstanding - assuming dilution 863 861 ======= =======
(A) Cost of goods sold, selling, general and administrative expenses and equity in (income) loss of affiliated companies include provisions of $232, $6 and $4 million, respectively, for environmental, litigation, business impairment and net repositioning charges. Total net pretax charges were $242 million (after-tax $158 million, or $0.18 per share). (B) Represents the pretax gain on the sale of our Security Monitoring business, and adjustments related to businesses sold in prior periods (after-tax $130 million, or $0.15 per share). (C) Cost of goods sold and selling, general and administrative expenses include provisions of $29 and $5 million, respectively, for environmental, net repositioning and other charges. Total net pretax charges were $34 million (after-tax $21 million, or $0.03 per share). (D) Represents the pretax gain on the sale of our Engineering Plastics business, including the tax benefits associated with prior capital losses (after-tax $9 million, or $0.01 per share). (E) Includes a gain of $20 million (after-tax $15 million, or $0.02 per share) related to the settlement of a patent infringement lawsuit. -MORE- 6-results Honeywell International Inc. Consolidated Statement of Operations (Unaudited) (In millions except per share amounts)
Six Months Ended June 30, -------------------------------- 2004 2003 -------- -------- Net sales $ 12,566 $ 11,148 -------- -------- Costs, expenses and other Cost of goods sold 10,158 (A) 8,754 (C) Selling, general and administrative expenses 1,631 (A) 1,465 (C) (Gain) loss on sale of non-strategic businesses (265)(B) (31)(D) Equity in (income) loss of affiliated companies (24)(A) (4) Other (income) expense (28) (27)(E) Interest and other financial charges 166 171 -------- -------- 11,638 10,328 -------- -------- Income before taxes and cumulative effect of accounting change 928 820 Tax expense 272 227 -------- -------- Income before cumulative effect of accounting change 656 593 Cumulative effect of accounting change - (20)(F) -------- -------- Net income $ 656 $ 573 ======== ======== Earnings per share of common stock - basic: Income before cumulative effect of accounting change $ 0.76 $ 0.69 Cumulative effect of accounting change - (0.02)(F) -------- -------- Net income $ 0.76 $ 0.67 ======== ======== Earnings per share of common stock - assuming dilution: Income before cumulative effect of accounting change $ 0.76 $ 0.69 Cumulative effect of accounting change - (0.02)(F) -------- -------- Net income $ 0.76 $ 0.67 ======== ======== Weighted average number of shares outstanding-basic 860 858 ======== ======== Weighted average number of shares outstanding - assuming dilution 864 859 ======== ========
(A) Cost of goods sold, selling, general and administrative expenses and equity in (income) loss of affiliated companies include provisions of $284, $8 and $6 million, respectively, for environmental, litigation, business impairment and net repositioning charges. Total net pretax charges were $298 million (after-tax $193 million, or $0.22 per share). (B) Represents the pretax gains on the sales of our VCSEL Optical Products and Security Monitoring businesses, and adjustments related to businesses sold in prior periods (after-tax $144 million, or $0.17 per share). (C) Cost of goods sold and selling, general and administrative expenses include provisions of $29 and $5 million, respectively, for environmental, net repositioning and other charges. Total net pretax charges were $34 million (after-tax $21 million, or $0.03 per share). (D) Represents the pretax gain on the sale of our Engineering Plastics business, including the tax benefits associated with prior capital losses (after-tax $9 million, or $0.01 per share). (E) Includes a gain of $20 million (after-tax $15 million, or $0.02 per share) related to the settlement of a patent infringement lawsuit. (F) Effective January 1, 2003, we adopted Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" (SFAS No. 143). SFAS No. 143 requires recognition of the fair value of obligations associated with the retirement of tangible long-lived assets when there is a legal obligation to incur such costs. This adoption resulted in an after-tax cumulative effect expense adjustment of $20 million, or $0.02 per share. We report our quarterly financial information using a calendar convention; that is, the first, second and third quarters are consistently reported as ending on March 31, June 30 and September 30, respectively. It has been our practice to establish actual quarterly closing dates using a predetermined "fiscal" calendar, which requires our businesses to close their books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on business processes. The effects of this practice are generally not significant to reported results for any quarter and only exist within a reporting year. In the event that differences in actual closing dates are material to year-over-year comparisons of quarterly or year-to-date results, we will provide appropriate disclosures. Our actual closing dates for the six months ended June 30, 2004 and 2003 were July 3, 2004 and June 28, 2003, respectively. Our fiscal closing calendar for the years 2000 through 2012 is available on our website at www.honeywell.com under the heading "Investor Relations". -MORE- 7-results Honeywell International Inc. Segment Data (Unaudited) (Dollars in millions)
Net Sales Periods Ended June 30, - --------- ---------------------- Three Months Six Months ------------ ---------- 2004 2003 2004 2003 ------- ------- -------- -------- Aerospace $ 2,453 $ 2,161 $ 4,757 $ 4,223 Automation and Control Solutions 1,968 1,837 3,915 3,554 Specialty Materials 901 823 1,757 1,600 Transportation Systems 1,065 925 2,136 1,765 Corporate 1 3 1 6 ------- ------- -------- -------- Total $ 6,388 $ 5,749 $ 12,566 $ 11,148 ======= ======= ======== ======== Segment Profit Periods Ended June 30, - -------------- ---------------------- Three Months Six Months ------------ ---------- 2004 2003 2004 2003 ------- ------- -------- -------- Aerospace $ 367 $ 264 $ 674 $ 521 Automation and Control Solutions 207 187 402 384 Specialty Materials 51 51 99 82 Transportation Systems 150 128 293 220 Corporate (38) (34) (77) (66) ------- ------- -------- -------- Total Segment Profit 737 596 1,391 1,141 Gain on sale of non-strategic businesses 233 31 265 31 Equity in income of affiliated companies 17 6 24 4 Other income 18 24 28 27 Interest and other financial charges (82) (87) (166) (171) Pension and other postretirement benefits (expense) (A) (162) (89) (322) (178) Repositioning, environmental, litigation and business impairment charges (A) (238) (34) (292) (34) ------- ------- -------- -------- Income before taxes and cumulative effect of accounting change $ 523 $ 447 $ 928 $ 820 ======= ======= ======== ========
(A) Amounts included in cost of goods sold and selling, general and administrative expenses. -MORE- 8-results Honeywell International Inc. Consolidated Balance Sheet (Unaudited) (Dollars in millions)
June 30, December 31, 2004 2003 ------- ------- ASSETS Current assets: Cash and cash equivalents $ 3,232 $ 2,950 Accounts, notes and other receivables 3,905 3,643 Inventories 3,003 3,040 Deferred income taxes 1,311 1,526 Other current assets 566 465 ------- ------- Total current assets 12,017 11,624 Investments and long-term receivables 414 569 Property, plant and equipment - net 4,185 4,295 Goodwill 5,837 5,789 Other intangible assets - net 1,110 1,098 Insurance recoveries for asbestos related liabilities 1,401 1,317 Deferred income taxes 447 342 Prepaid pension benefit cost 3,063 3,173 Other assets 1,077 1,107 ------- ------- Total assets $29,551 $29,314 ======= ======= LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities: Accounts payable $ 2,273 $ 2,240 Short-term borrowings 44 152 Commercial paper 95 -- Current maturities of long-term debt 146 47 Accrued liabilities 4,495 4,314 ------- ------- Total current liabilities 7,053 6,753 Long-term debt 4,825 4,961 Deferred income taxes 313 316 Postretirement benefit obligations other than pensions 1,695 1,683 Asbestos related liabilities 2,096 2,279 Other liabilities 2,683 2,593 Shareowners' equity 10,886 10,729 ------- ------- Total liabilities and shareowners' equity $29,551 $29,314 ======= =======
Certain prior year amounts have been reclassified to conform with the current year presentation. -MORE- 9-results Honeywell International Inc. Consolidated Statement of Cash Flows (Unaudited) (Dollars in millions)
Three Months Ended Six Months Ended June 30, June 30, ------------------- ------------------- 2004 2003 2004 2003 ------- ------- ------- ------- Cash flows from operating activities: Net income $ 361 $ 319 $ 656 $ 573 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of accounting change -- -- -- 20 (Gain) loss on sale of non-strategic businesses (233) (31) (265) (31) Repositioning, environmental, litigation and business impairment charges 242 34 298 34 Severance and exit cost payments (32) (43) (82) (93) Environmental and non-asbestos litigation payments (55) (15) (92) (36) Asbestos related liability payments (222) (357) (323) (388) Insurance receipts for asbestos related liabilities 30 475 48 477 Depreciation 142 148 288 290 Undistributed earnings of equity affiliates (21) (6) (29) (4) Deferred income taxes 53 85 82 134 Pension and other postretirement benefits expense 162 89 322 178 Pension contributions - U.S. Plans (5) (170) (5) (170) Other postretirement benefit payments (51) (51) (99) (99) Other (41) 52 (40) (3) Changes in assets and liabilities, net of the effects of acquisitions and divestitures: Accounts, notes and other receivables (75) (51) (243) (80) Inventories 58 (5) 12 (95) Other current assets 7 (24) (7) 18 Accounts payable 42 65 117 175 Accrued liabilities 143 39 204 126 ------- ------- ------- ------- Net cash provided by operating activities 505 553 842 1,026 ------- ------- ------- ------- Cash flows from investing activities: Expenditures for property, plant and equipment (148) (171) (283) (276) Proceeds from disposals of property, plant and equipment 2 -- 2 -- Decrease in investments -- -- 80 -- Cash paid for acquisitions (13) (32) (109) (122) Proceeds from sales of businesses 323 90 394 90 ------- ------- ------- ------- Net cash provided by (used for) investing activities 164 (113) 84 (308) ------- ------- ------- ------- Cash flows from financing activities: Net increase (decrease) in commercial paper (270) (190) 95 (13) Net increase (decrease) in short-term borrowings (127) 82 (124) 78 Proceeds from issuance of common stock 19 7 45 31 Payments of long-term debt (3) -- (23) (70) Repurchases of common stock (63) -- (292) -- Cash dividends on common stock (161) (161) (322) (322) ------- ------- ------- ------- Net cash (used for) financing activities (605) (262) (621) (296) ------- ------- ------- ------- Effect of foreign exchange rate changes on cash and cash equivalents (32) 158 (23) 183 ------- ------- ------- ------- Net increase in cash and cash equivalents 32 336 282 605 Cash and cash equivalents at beginning of period 3,200 2,290 2,950 2,021 ------- ------- ------- ------- Cash and cash equivalents at end of period $ 3,232 $ 2,626 $ 3,232 $ 2,626 ======= ======= ======= =======
-MORE- 10-results Honeywell International Inc. Reconciliation of Cash Provided by Operating Activities to Free Cash Flow (Unaudited) (Dollars in millions)
Three Months Ended Six Months Ended June 30, June 30, ------------------- ------------------- 2004 2003 2004 2003 ------- ------- ------- ------- Cash provided by operating activities $ 505 $ 553 $ 842 $1,026 Expenditures for property, plant and equipment (148) (171) (283) (276) ----- ----- ----- ------ Free cash flow $ 357 $ 382 $ 559 $ 750 ===== ===== ===== ======
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. -----END PRIVACY-ENHANCED MESSAGE-----