UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 11-K
| x | ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the fiscal year ended December 31,
2014
OR
| o | TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period from _______________
to _______________
Commission file number 1-8974
Honeywell Savings and Ownership Plan
(Full Title of Plan)
Honeywell International Inc.
101 Columbia Road
Morris Township, NJ 07962
(Name of Issuer of Securities Held Pursuant
to the Plan and
the Address of its Principal Executive Office)
Honeywell Savings and Ownership Plan
Index
* Other schedules required by Section 2520.103-10 of the Department
of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been
omitted as the conditions under which they are required are not present.
Report of Independent Registered Public
Accounting Firm
To the Administrator of
Honeywell Savings and Ownership Plan
In our opinion, the accompanying statements of net assets available
for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects,
the net assets available for benefits of Honeywell Savings and Ownership Plan (the “Plan”)
at December 31, 2014 and December 31, 2013, and the changes in net assets available for benefits
for the year ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The supplemental schedule of assets
(held at end of year) at December 31, 2014 has been subjected to audit procedures performed in conjunction with the audit of the
Plan’s financial statements. The supplemental schedule is the responsibility of the Plan’s management. Our
audit procedures included determining whether the supplemental schedule reconciles to the
financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness
and accuracy of the information presented in the supplemental schedule. In forming our opinion on the supplemental schedule, we
evaluated whether the supplemental schedule, including its form and content, is presented in conformity with the Department of
Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.
In our opinion, the schedule of assets (held at end of year) is fairly stated, in all material respects, in relation
to the financial statements as a whole.
/s/ PricewaterhouseCoopers LLP
New York, New York
June 24, 2015
Honeywell Savings and Ownership Plan
Statements of Net Assets Available for Benefits
at December 31, 2014 and 2013
| |
2014 | |
2013 |
| |
(dollars in millions) | |
Plan interest in Honeywell Savings and Ownership Plan Master Trust, at fair value | |
| $12,881 | | |
| $12,351 | |
| |
| | | |
| | |
Notes receivable from participants | |
| 30 | | |
| 52 | |
| |
| | | |
| | |
Net assets available for benefits | |
| $12,911 | | |
| $12,403 | |
The accompanying notes are an integral part
of these financial statements.
Honeywell Savings and Ownership Plan
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2014
| |
2014 |
| |
(dollars in millions) | |
Additions to net assets attributable to: | |
| | |
Interest income from notes receivable from participants | |
$ | 3 | |
Investment gain from Plan interest in Honeywell Savings and Ownership
Plan Master Trust | |
| 929 | |
Contributions: | |
| | |
Participating employees | |
| 370 | |
The Company, net of forfeitures | |
| 169 | |
Roll-over contributions | |
| 14 | |
Total contributions | |
| 553 | |
| |
| | |
Total additions | |
| 1,485 | |
| |
| | |
Deductions from net assets attributable to: | |
| | |
Benefits paid to participants | |
| (960 | ) |
Plan expenses | |
| (17 | ) |
Total deductions | |
| (977 | ) |
| |
| | |
Net increase in net assets during the year | |
| 508 | |
| |
| | |
Net assets available for benefits: | |
| | |
Beginning of year | |
| 12,403 | |
End of year | |
$ | 12,911 | |
The accompanying notes are an integral part
of these financial statements.
Honeywell Savings and Ownership Plan
Notes to Financial Statements
1. | Description of the Plan |
General
The Honeywell Savings and Ownership
Plan (the “Plan”) is a defined contribution plan for certain employees of Honeywell International Inc. (the “Company”).
It is subject to the provisions of the Employee Retirement Income Security Act of 1974 as amended (“ERISA”) and the
Internal Revenue Code (“Code”). The following represents a summary of key provisions of the Plan but does not purport
to be complete and is qualified in its entirety by the terms of the Plan. Participants should refer to the Plan document for a
more complete description of the Plan’s provisions.
Administration
The Company’s Vice President of Compensation
and Benefits is the Plan Administrator and has full discretionary authority to manage and control the operation and administration
of Plan, including the power to interpret provisions of the Plan and to promulgate policies and procedures for the Plan’s
administration and to delegate administration of the Plan. The Savings Plan Investment Committee has the power and authority to
enter into agreements with trustees to provide for the investment of Plan assets and to appoint investment managers to direct such
trustees, as appropriate. The day to day administration of the Plan is handled by Voya Financial (formerly known as ING Institutional
Plan Services). The trustee and custodian of the Plan is State Street Bank and Trust Company (the “Trustee”). In 2014,
a decision was made to change custodians for the Master Trust, effective June 1, 2015, from State Street to Northern Trust Company.
Contributions and Vesting
Participants are permitted to
contribute from 1 percent to 30 percent of their “base pay” as defined in the Plan during each pay period, subject
to certain restrictions for “highly compensated employees”, as defined in the Plan. Participants may elect to make
contributions to the Plan in any combination of before-tax, after-tax and Roth 401(k) contributions and may direct those contributions
into any investment option available within the Plan. The combined before-tax and Roth 401(k) contributions may not exceed $17,500.
In addition to regular before-tax, after-tax or Roth 401(k) contributions, eligible participants may also contribute up to $5,500
per year in catch-up contributions if they are or will attain age 50 by December 31st and are contributing at least 8 percent before-tax
in contributions and/or Roth contributions to the Plan or have contributed the maximum regular before-tax contributions to the
Plan.
Generally, the Company matching
contribution does not begin until the first pay period following the employee’s completion of one year of service with the
Company. The Company matching contributions are made to the eligible participants’ accounts each pay period that employee
contributions are made to the Plan. Depending on the rate designated for the participant’s Participating Unit, as defined
below, the Company makes contributions with respect to a participant’s contributions up to a maximum of 8 percent of a participant’s
base pay. The Company does not match catch-up contributions. All of the Company’s matching contributions are initially invested
in the Honeywell Common Stock Fund.
A Participating Unit is a group
of employees which has been designated as participating in the Plan. The Company may contribute on behalf of each participant between
0 percent and 75 percent of such participant’s contribution to the Plan, depending upon the rate designated for the participant’s
Participating Unit.
There are two forms of Company
matching contributions as follows: (i) variable Company matching contributions and (ii) non-variable Company matching contributions.
Participating Units whose employees are covered by collective bargaining agreements or government contracts, the terms of which
may change the Company match from time to time, receive the variable company matching
Honeywell Savings and Ownership Plan
Notes to Financial Statements
contributions, unless the collective
bargaining agreement or government contract provides that the employees are eligible for the non-variable company matching contributions.
Participating Units whose employees are not covered by collective bargaining agreements or government contracts (unless the collective
bargaining agreement or government contract provides otherwise) are generally eligible for the non-variable company matching contributions.
Participating Units covered by
a non-variable match receive basic matching contributions whereby the Company matches 37.5 percent of the first 8 percent of base
pay that the participant contributes to the Plan (excluding rollover and catch-up contributions). Once the participant participates
in the Plan for 60 months after completing one year of vesting service, the Company makes matching contributions in the amount
of 75 percent of the first 8 percent of base pay that the participant contributes to the Plan (excluding rollover and catch-up
contributions).
Effective January 1, 2014, certain
individuals who became Honeywell employees via acquisitions prior to January 1, 2013, will receive basic Company matching contributions
whereby the Company matches 75 percent of the first 8 percent of base bay that the participant contributes to the Plan (excluding
rollover and catch-up contributions) once the participant has completed one year of vesting service.
Effective January 1, 2013, eligible
employees who are employed by a Participating Unit covered by a non-variable match and who are hired on or after January 1, 2013,
will receive basic matching contributions whereby the Company matches 75 percent of the first 8 percent of base pay that the participant
contributes to the Plan (excluding rollover and catch-up contributions) once the participant has completed one year of vesting
service.
Participants have a full and
immediate vested interest in the portion of their accounts contributed by them and the earnings on such contributions. A participant
will become 100 percent vested in any Company contributions upon completion of three years of vesting service or upon attainment
of age 65 while an employee of the Company or an affiliated company. In addition, a participant’s account will become 100
percent vested if the participant’s termination with the Company or an affiliated company was due to any one of the following
(i) retirement under the terms of a Honeywell pension plan in which the participant participates; (ii) disability (as defined under
the plan provisions); (iii) death; (iv) a reduction in force or layoff (as determined by the Company); or (v) a participant’s
business unit is sold or divested. A participant will also become 100 percent vested in any Company contributions in the event
the Company terminates or permanently discontinues contributions to the Plan.
Participant Accounts
Each participant’s account
is credited with the participant’s contribution and allocations of (1) the Company’s matching contribution, if applicable,
and (2) investment earnings, and charged with an allocation of investment losses and administrative expenses. The allocation is
based on participants’ account balances as defined in the Plan document. The benefit to which a participant is entitled is
the benefit that can be provided from the participant’s vested account.
Notes Receivable from Participants
Since July 1, 2011, no new loans
were permitted from the Plan. Interest rates for loans outstanding at December 31, 2014 and 2013 were between 4.25% and 10.5%.
Honeywell Savings and Ownership Plan
Notes to Financial Statements
Termination
Although it has not expressed
intent to do so, the Company has the right under the Plan document to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of a partial or full Plan termination, all Plan funds must be used in
accordance with the terms of the Plan.
Distribution of Benefits
Upon termination of service with
the Company, if a participant’s vested account balance is $1,000 or less (including any rollover contributions), the entire
vested amount in the participant’s account can be distributed to the participant in a single payment, without his or her
consent, unless the participant affirmatively elects to have the benefit rolled over to an eligible retirement plan.
If the vested amount in a participant’s
account is greater than $1,000 but less than $5,000 (excluding any rollover contributions), the participant’s account will
be automatically rolled over to a traditional IRA with the Voya Life Insurance and Annuity Company, unless the participant affirmatively
elects to receive the amount in a single payment or have it rolled over to an eligible retirement plan.
If the participant’s vested
account balance exceeds $5,000 (excluding any rollover contributions), the balance in the account will remain in the Plan and shall
be distributed (1) at the participant’s request, (2) when the participant attains age seventy and one-half (70-1/2), through
the payment of minimum required distributions, as defined by the Plan, or (3) upon the participant’s death, whichever is
earliest. When a participant dies, if his or her spouse is the beneficiary, the spouse may remain in the Plan under the same conditions
as previously described for the participant. Otherwise, the entire amount in the participant’s account is distributed in
a single payment to the participant’s beneficiary (ies).
Forfeitures
Forfeitures of the Company’s
contributions and earnings thereon due to terminations and withdrawals reduce contributions otherwise due from the Company. Company
contributions made to the Plan were reduced by $1 million due to forfeited nonvested accounts for each of the years ended December
31, 2014 and 2013.
2. | Significant Accounting Policies |
Basis of
Accounting
The financial
statements of the Plan are prepared in accordance with accounting principles generally accepted in the United States of America
(“U.S. GAAP”) using the accrual basis of accounting.
Use of Estimates
The preparation of financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ
from those estimates.
Investment Valuation
For investment
and administrative purposes, the Plan’s assets are held in the Honeywell Savings and Ownership Plan Master Trust (“Master
Trust”) along with the assets of the Honeywell Puerto Rico Savings and Ownership Plan and the Honeywell Secured Benefit Plan.
The Plan’s investment in the Master Trust represents the Plan’s interest in the net assets of the Master Trust. The
Plan’s investment is stated at fair value and is based on the beginning of year value of the Plan’s interest in the
Master Trust plus actual Plan contributions and allocated investment income less actual Plan distributions, and allocated investment
losses.
Honeywell Savings and Ownership Plan
Notes to Financial Statements
Notes Receivable
from Participants
Notes receivable
from participants are valued at cost plus accrued unpaid interest.
Payment
of Benefits
Withdrawals
and distributions to participants are recorded when paid.
Expenses
All external
third party expenses and internal expenses relating to the administration of the Master Trust and managing the funds established
thereunder are borne by the participating plans.
Recent Accounting Pronouncements
In May 2015, the Financial Accounting
Standards Board (“FASB”) issued ASU 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset
Value per Share (or Its Equivalent). ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments
for which fair value is measured using the net asset value per share practical expedient. It also removes the requirement to make
certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical
expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using
that practical expedient. ASU 2015-07 will be effective for the Plan beginning in the first quarter of 2016, with early adoption
permitted, and will be applied retrospectively. The Plan Administrator is currently evaluating the standard and does not believe
it will have a material impact on the Plan’s financial statements.
3. | Interest in Honeywell Savings and Ownership Plan Master Trust |
The Plan’s investment is
held in the Master Trust, which is commingled with the assets of the Honeywell Puerto Rico Savings and Ownership Plan and the Honeywell
Secured Benefit Plan. Each participating plan has an undivided interest in the Master Trust. The assets of the Master Trust are
held by the Trustee. At December 31, 2014 and 2013, the Plan’s, Honeywell Puerto Rico Savings and Ownership Plan’s
and the Honeywell Secured Benefit Plan’s interest in the net assets of the Master Trust were 99.289%, 0.571%, and 0.140%
and 99.166%, 0.115%, and 0.719%, respectively. Investment income or loss is allocated based on participant balances, and administrative
expenses relating to the Master Trust are allocated to certain plans based upon the net asset value balances invested by each plan.
The Master Trust is comprised
of the following types of investments, at fair value, as of December 31, 2014 and 2013:
| |
2014 | |
2013 |
| |
(dollars in millions) |
| |
|
Common and Collective Trusts and Commingled Funds | |
$ | 5,641 | | |
$ | 4,974 | |
Honeywell Common Stock | |
| 3,853 | | |
| 3,693 | |
Short Term Investments | |
| 800 | | |
| 1,022 | |
Common/Preferred Stocks (Separately Managed Portfolios) | |
| 1,073 | | |
| 1,421 | |
Fixed Income Investments | |
| 1,606 | | |
| 1,341 | |
Total Investments, at fair value | |
$ | 12,973 | | |
$ | 12,451 | |
Honeywell Savings and Ownership Plan
Notes to Financial Statements
The Master Trust’s investment income for the
year ended December 31, 2014 is presented in the following table. The net appreciation/(depreciation) consists of both realized
gains/(losses) on investments bought, sold and matured, as well as the change in unrealized gains/(losses) on investments held
during the year by the Master Trust.
| |
2014 |
| |
(dollars in millions) |
| |
| | |
Net appreciation(depreciation) in fair value of investments: | |
| | |
Honeywell Common Stock | |
| $348 | |
Common/Preferred Stocks (Separately Managed Portfolios) | |
| 102 | |
Fixed Income Investments | |
| (1 | ) |
Common and Collective Trusts and Commingled Funds | |
| 388 | |
Net appreciation | |
| 837 | |
| |
| | |
Dividend Income | |
| 76 | |
Interest Income | |
| 17 | |
Total investment income | |
| $930 | |
Investment Valuation and Income
Recognition – Master Trust
Master Trust
investments are stated at fair value. Investments in common and collective trusts and commingled funds are valued at the net asset
value of units held at year-end. Common stocks, including Honeywell Common Stock, traded on a national securities exchange, are
valued at the last reported sales price or close price at the end of the year. Fixed income securities traded in the over-the-counter
market are valued at the evaluated bid. Short term securities are valued at amortized cost, which includes cost plus accrued interest,
which approximates fair value.
Interest income
is recorded on the accrual basis, and dividend income is recorded on the ex-dividend date. Purchases and sales of securities are
recorded on a trade-date basis.
From time to time, investment
managers may use derivative financial instruments including foreign exchange forward and futures contracts. Derivative instruments
are used primarily to mitigate exposure to foreign exchange rate and interest rate fluctuations as well as manage the investment
composition in the portfolio. The Master Trust held no derivative instruments as of December 31, 2014 and 2013.
The Plan’s interest in
the Master Trust represents more than 5 percent of the Plan’s net assets at December 31, 2014 and 2013.
Determination of Fair Value
The accounting guidance defines
fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, and establishes a framework for measuring fair value.
The Plan or Master Trust valuation
methodologies for assets and liabilities measured at fair value are described above within – “Investment Valuation
and Income Recognition – Master Trust”. The methods described as follows may produce a fair value calculation that
may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation
methods are appropriate and consistent with other market participants, the use of different
Honeywell Savings and Ownership Plan
Notes to Financial Statements
methodologies or assumptions
to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting
date.
Valuation Hierarchy
The accounting guidance establishes
a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency
of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
· Level
1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
· Level
2 — inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, and inputs
that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial
instrument.
· Level
3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement.
A financial instrument’s
categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements)
and the lowest priority to unobservable inputs (level 3 measurements).
The following is a description
of the valuation methodologies used for financial instruments measured at fair value. There have been no changes in the methodologies
used at December 31, 2014 and 2013.
Honeywell International
Inc. common stock and other common stocks
Honeywell International Inc.
common stock is valued at the closing price reported on the New York Stock Exchange Composite Transaction Tape. Other common stocks
are valued at the closing price reported on the principal market on which the respective securities are traded. Honeywell International
Inc. common stock and other common stocks are all classified within level 1 of the valuation hierarchy.
Common and Collective Trusts
and Commingled and Short Term Investment Funds
Common and Collective Trusts
and Commingled and Short Term Investment funds are investment vehicles utilized within the target date funds, equity index funds,
investment grade bond fund, global REIT fund and short term investment fund. These funds permit daily subscriptions and redemption
of units. These investments are valued using the NAV provided by the administrator of the underlying fund. The NAV is based on
the value of the underlying assets owned by the fund, less its liabilities, divided by the number of units outstanding. The NAV
is a quoted price in a market that is not active and classified within level 2 of the valuation hierarchy.
Fixed Income Investments
Fixed income securities (other
than certain short term investments and commercial mortgage backed securities) are valued at the regular close of trading on each
valuation date at the evaluated bid prices supplied by a pricing agent or brokers, if any, whose prices reflect broker/dealer supplied
valuations and electronic data processing techniques. Commercial mortgage backed securities are valued using pool-specific pricing.
The pool-specific pricing is provided by the pricing vendors and typically they use IDC for these investments. Fixed income securities,
including corporate bonds,
Honeywell Savings and Ownership Plan
Notes to Financial Statements
U.S. government and federal agencies,
municipal bonds, asset-backed securities and commercial mortgage backed securities are classified within Level 2 of the valuation
hierarchy.
Short term investments
Short term investments are valued
at quoted prices when available in an active market or are valued at amortized cost; such investments are classified within level
1 of the valuation hierarchy. If quoted market prices are not available for the specific security, then fair values are estimated
by using pricing models, bids provided by brokers or dealers, or quoted prices of securities with similar characteristics. When
quoted market prices for the specific security are not available in an active market, they are classified within level 2 of the
valuation hierarchy.
The following tables present
the Master Trust’s assets measured at fair value as of December 31, 2014 and 2013, by the fair value hierarchy.
| |
| |
2014 | |
|
| |
Level 1 | |
Level 2 | |
Total |
Common/Preferred Stocks: | |
(dollars in millions) |
Honeywell Common Stock | |
| $3,853 | | |
| $- | | |
| $3,853 | |
Large Cap Value | |
| 379 | | |
| - | | |
| 379 | |
Large Cap Growth | |
| 489 | | |
| - | | |
| 489 | |
Small-to-Mid Cap Value | |
| 205 | | |
| - | | |
| 205 | |
Total Common/Preferred Stocks | |
| 4,926 | | |
| - | | |
| 4,926 | |
Fixed Income Investments: | |
| | | |
| | | |
| | |
Asset Backed Securities | |
| - | | |
| 274 | | |
| 274 | |
Commercial Mortgage Backed Securities | |
| - | | |
| 44 | | |
| 44 | |
Corporate Bonds | |
| - | | |
| 781 | | |
| 781 | |
U.S. Government and Federal Agencies | |
| - | | |
| 393 | | |
| 393 | |
Municipal Bonds | |
| - | | |
| 114 | | |
| 114 | |
Total Fixed Income Investments | |
| - | | |
| 1,606 | | |
| 1,606 | |
Common and Collective Trusts and Commingled Funds: | |
| | | |
| | | |
| | |
Target Date Funds | |
| - | | |
| 1,730 | | |
| 1,730 | |
Equity Index Funds | |
| - | | |
| 3,911 | | |
| 3,911 | |
Total Common and Collective Trusts and Commingled Funds | |
| - | | |
| 5,641 | | |
| 5,641 | |
Short Term Investments: | |
| | | |
| | | |
| | |
Short Term Investment Fund | |
| - | | |
| 392 | | |
| 392 | |
Short Term Investments | |
| 4 | | |
| 404 | | |
| 408 | |
Total Short Term Investments | |
| 4 | | |
| 796 | | |
| 800 | |
Total Investments, at fair value | |
| $4,930 | | |
| $8,043 | | |
| $12,973 | |
Honeywell Savings and Ownership Plan
Notes to Financial Statements
| |
| |
2013 | |
|
| |
Level 1 | |
Level 2 | |
Total |
| |
| | | (dollars in millions) |
| | |
Common/Preferred Stocks: | |
| | | |
| | | |
| | |
Honeywell Common Stock | |
| $3,693 | | |
| $- | | |
| $3,693 | |
Large Cap Value | |
| 466 | | |
| - | | |
| 466 | |
Large Cap Growth | |
| 621 | | |
| - | | |
| 621 | |
Small-to-Mid Cap Value | |
| 334 | | |
| - | | |
| 334 | |
Total Common/Preferred Stocks | |
| 5,114 | | |
| - | | |
| 5,114 | |
Fixed Income Investments: | |
| | | |
| | | |
| | |
Asset Backed Securities | |
| - | | |
| 283 | | |
| 283 | |
Commercial Mortgage Backed Securities | |
| - | | |
| 6 | | |
| 6 | |
Corporate Bonds | |
| - | | |
| 692 | | |
| 692 | |
U.S. Government and Federal Agencies | |
| - | | |
| 313 | | |
| 313 | |
Municipal Bonds | |
| - | | |
| 47 | | |
| 47 | |
Total Fixed Income Investments | |
| - | | |
| 1,341 | | |
| 1,341 | |
Common and Collective Trusts and Commingled Funds: | |
| | | |
| | | |
| | |
Target Date Funds | |
| - | | |
| 1,562 | | |
| 1,562 | |
Equity Index Funds | |
| - | | |
| 3,412 | | |
| 3,412 | |
Total Common and Collective Trusts and Commingled Funds | |
| - | | |
| 4,974 | | |
| 4,974 | |
Short Term Investments: | |
| | | |
| | | |
| | |
Short Term Investment Fund | |
| - | | |
| 562 | | |
| 562 | |
Short Term Investments* | |
| - | | |
| 460 | | |
| 460 | |
Total Short Term Investments | |
| - | | |
| 1,022 | | |
| 1,022 | |
Total Investments, at fair value | |
| $5,114 | | |
| $7,337 | | |
| $12,451 | |
* Includes approximately $6 million of cash
overdrafts.
4. |
Nonparticipant-Directed Investments |
| Information about the net assets at December 31, 2014 and 2013 and the significant components of
the changes in net assets for the year ended December 31, 2014 relating to the nonparticipant-directed investments is as follows: |
Honeywell Savings and Ownership Plan
Notes to Financial Statements
| |
2014 | |
2013 |
| |
(dollars in millions) |
| |
| | | |
| | |
Honeywell common stock | |
| $3,848 | | |
| $3,689 | |
Short-term investments | |
| 89 | | |
| 90 | |
| |
| $3,937 | | |
| $3,779 | |
| |
| | | |
| 2014 | |
| |
| | | |
(dollars in millions) |
Changes in net assets: | |
| | | |
| | |
Contributions | |
| | | |
| $229 | |
Net income | |
| | | |
| 56 | |
Net appreciation | |
| | | |
| 347 | |
Benefits paid to participants | |
| | | |
| (274 | ) |
Transfers (to)/from participant directed investments | | |
| (200 | ) |
| |
| | | |
| $158 | |
5. |
Related Party Transactions |
The Plan’s investment in the
Master Trust constitutes a related-party transaction because the Company is both the plan sponsor and a party to the Master Trust.
The Master Trust is invested in the Company’s common stock and the Plan holds notes receivable from participants, both of
which qualify as related-party transactions. During the year ended December 31, 2014, the Master Trust’s investment in the
Company’s common stock included purchases of approximately $336 million, sales of approximately $524 million, realized gains
of approximately $274 million, unrealized gains of approximately $72 million and dividend income of approximately $74 million.
The Master Trust invests in short
term investment funds managed by the Trustee. As described in Note 2 – “Expenses”, the Plan paid certain expenses
related to Plan operation and investment activity to the Trustee. These investments qualify as party-in-interest transactions.
6. |
Risks and Uncertainties |
The Plan provides for various investment
options which may invest in any combination of stocks, fixed income securities, mutual funds and other investment securities. Investment
securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that changes in the value of investment securities will occur
in the near term and that such changes could materially affect participants’ account balances and the amounts reported in
the statements of net assets available for benefits and the statement of changes in net assets available for benefits.
On May 11, 2015, the Plan received
a favorable determination letter from the Internal Revenue Service indicating that the Plan satisfies the requirements of Section
401 (a) of the Code and that the Plan qualifies as an Employee Stock Ownership Plan as defined in Section 4975 (e)(7) of the Code.
The Plan previously received a favorable determination letter on April 14, 2003. The Plan’s administrator and counsel believe
that the Plan has been designed and is currently being operated in compliance with the applicable requirements of the Code. The
Master Trust under the Plan is intended to be exempt under Section 501 (a) of the Code. Accordingly, no provision for income
taxes has been made.
Honeywell Savings and Ownership Plan
Notes to Financial Statements
U.S. GAAP requires plan management
to evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain position that more
likely than not would not be sustained upon examination by the Internal Revenue Service. As of December 31, 2014 and 2013 the Plan
Administrator has analyzed the tax positions by the Plan, and has concluded that there are no uncertain positions taken or expected
to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is no
longer subject to tax examinations for years prior to 2011.
8. |
Reconciliation of Financial Statements to Form 5500 |
The following is a reconciliation
of net assets available for benefits per the financial statements to Form 5500 at December 31, 2014 and 2013:
| |
2014 | |
2013 |
| |
(dollars in millions) |
| |
| | | |
| | |
Net assets available for benefits per the financial statements | |
$ | 12,911 | | |
$ | 12,403 | |
Amounts allocated to withdrawing participants | |
| (2 | ) | |
| (3 | ) |
Deemed distributions | |
| - | | |
| (1 | ) |
Net assets available for benefits per the Form 5500 | |
$ | 12,909 | | |
$ | 12,399 | |
The following is a reconciliation
of benefits paid to participants per the financial statements to Form 5500 for the year ended December 31, 2014:
| |
2014 |
| |
(dollars in millions) |
Benefits paid to participants per the financial statements | |
| $960 | |
Add: Amounts allocated to withdrawing participants at December 31, 2014 | |
| 2 | |
Less: Amounts allocated to withdrawing participants at December 31, 2013 | |
| (3 | ) |
Benefits paid to participants per the Form 5500 | |
| $959 | |
The Company has evaluated subsequent events through the
date of issuance of the financial statements. Based on this evaluation, the Company has determined there are no events that require
disclosure in or adjustment to the financial statements.
Honeywell Savings and Ownership Plan
Schedule H, Line 4(i) –
Schedule of Assets (held at end of year)
December 31, 2014
Identity of Issue |
|
Description |
|
Cost |
|
Current Value |
|
|
|
|
|
|
|
*Interest in Honeywell Savings
and Ownership Plan Master Trust |
|
Various investments |
|
** |
|
$12,880,994,960 |
|
|
|
|
|
|
|
*Notes receivable from participants |
|
(Interest rates range from
4.25% - 10.5%, maturing
through May 30, 2036) |
|
** |
|
30,031,125 |
|
|
|
|
|
|
|
Total |
|
|
|
|
|
$12,911,026,085 |
* Party-in-interest.
** Interest in Honeywell Savings and Ownership Plan Master Trust
includes non-participant directed investments with a market value of $3,937,258,702 and a cost of $1,907,729,421.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan administrator has duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized.
|
Honeywell Savings and Ownership Plan |
|
|
|
By: |
/s/
Christopher Gregg |
|
|
|
Christopher Gregg |
|
|
Vice President, Compensation and Benefits |
Date: June 24, 2015
Exhibit
I
Consent
of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 (No. 333-148995) of Honeywell International Inc. of our report dated June 24, 2015 relating
to the financial statements and supplemental schedule of the Honeywell Savings and Ownership Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP | |
PricewaterhouseCoopers LLP
New York, New York
June 24, 2015
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