MORRIS PLAINS, N.J.,
July 22, 2016 /PRNewswire/
-- Honeywell (NYSE: HON) today announced its results
for the second quarter of 2016:
|
Total
Honeywell
|
|
|
($ Millions, Except
Earnings Per Share)
|
2Q 2015
|
2Q 2016
|
Change
|
|
Sales
|
9,775
|
9,991
|
2%
|
|
Segment
Margin
|
18.4%
|
18.5%
|
10 bps
|
|
Operating Income
Margin
|
17.6%
|
18.4%
|
80 bps
|
|
Earnings Per
Share
|
$1.51
|
$1.66
|
10%
|
|
Cash Flow from
Operations
|
1,408
|
1,544
|
10%
|
|
Free Cash Flow
(1)
|
1,165
|
1,263
|
8%
|
|
|
(1) Cash Flow from
Operations Less Capital Expenditures
|
*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.
"Honeywell grew earnings 10% in the second quarter, capping off
a strong first half of 2016," said Honeywell Chairman and CEO
Dave Cote. "Sales in the
quarter of $10.0B were in-line with
our expectations driven by contributions from each of our business
groups. In Aerospace, we saw continued momentum in Commercial
Aviation Aftermarket and Transportation Systems. ACS had
strong growth in Security and Fire, Buildings Solutions and
Distribution, and its China
business. And, PMT saw higher sales in Process Solutions and
Fluorine Products, where we continue to outperform."
"In the second quarter, we also continued to smartly deploy
capital to position our businesses for sustainable growth, to add
to our Great Positions in Good Industries, and to drive shareowner
value. Earlier this month, we announced the acquisition of
Intelligrated, a leader in supply chain and warehouse automation
technologies, for $1.5 billion.
This business complements our suite of transportation and logistics
technologies with warehouse execution software and other
technologies enabling superior efficiency in warehouse and
distribution operations. We also repurchased approximately
$500 million of shares during the
quarter, bringing our year-to-date total to $1.6 billion, and funded $97 million in new restructuring
projects."
"As a result of our first half performance, we are raising the
low-end of our full-year earnings guidance range to $6.60-$6.70, up 8%-10%. We will continue to
support growth, focusing on winning in High Growth Regions,
advancing our superior software capabilities, and effectively using
HOS Gold to drive breakthrough initiatives and deliver high-quality
products to our customers globally," continued Cote.
The company is updating its full-year 2016 guidance and now
expects:
|
2016 Full-Year
Guidance
|
|
|
Prior
Guidance
|
Revised
Guidance
|
Change vs.
2015
|
|
Sales
|
$40.3 -
$40.9B
|
$40.0 -
$40.6B
|
4% - 5%
|
|
Core Organic
Growth
|
1% -
2%
|
~1%
|
|
|
Segment
Margin
|
18.9% -
19.3%
|
18.9% -
19.3%
|
10 - 50 bps
(2)
|
|
Operating Income
Margin (Ex-Pension MTM)
|
18.0% -
18.4%
|
18.0% -
18.4%
|
10 - 50 bps
(3)
|
|
|
|
|
|
Earnings Per Share
(Ex-Pension MTM)
|
$6.55 -
$6.70
|
$6.60 -
$6.70
|
8% - 10%
|
|
|
|
|
|
Free Cash Flow
(1)
|
$4.6 -
$4.8B
|
$4.6 -
$4.8B
|
5% - 10%
|
|
|
1.
Cash Flow from Operations Less Capital
Expenditures
|
|
2.
Segment Margin ex-M&A Up 80 - 110 bps
|
|
3.
Operating Margin ex-M&A Up 80 - 110 bps
|
Automation and Control Solutions Realignment
Honeywell also announced today that it is realigning its ACS
business segment into two new segments: Home and Building
Technologies (HBT) and Safety and Productivity Solutions
(SPS). Financial performance for the third quarter of 2016
will be reported based on this realignment. For 2015, HBT and
SPS would have had estimated revenues of approximately $9.4 billion and $4.7
billion, respectively.
"ACS is coming off a strong quarter and has established momentum
in key software-driven markets where our products and services give
us a competitive advantage, especially given our recent
acquisitions such as Elster, Xtralis, Intelligrated, and
Movilizer," said Cote. "We have removed layers from our
organizational structure and are well-positioned to implement a
more focused segment reporting alignment that fits our HOS Gold
approach to drive breakthrough strategies and speed up new product
introduction. This new structure will also help us better
serve our customers. Our success through acquisition and NPI
has resulted in a much broader portfolio that has outgrown the
existing ACS construct. Having two more nimble segments will
promote greater customer intimacy and responsiveness. The
separation into two businesses will also enable increased
efficiency and speed of decision-making as well as a more
comprehensive integrated suite of technologies for the respective
end markets."
HBT benefits from Honeywell's advanced software and connectivity
capability combined with an installed base of products and
technologies in more than 150 million homes and 10 million
buildings worldwide that help homeowners stay connected and in
control of home comfort, security, fire systems, and air and water
purification, and that help building owners and occupants ensure
their facilities are safe, comfortable, and sustainable. It
will include Honeywell's Environmental & Energy Solutions
(E&ES), Security and Fire, and Building Solutions and
Distribution businesses. E&ES' Industrial Combustion and
Thermal business will be reclassified to Honeywell Performance
Materials and Technologies (PMT). HBT will be led by
Terrence Hahn, who previously ran
Honeywell's Transportation Systems unit for the past three years,
launching more than 100 new engine programs per annum and
overseeing the divestiture of Friction Materials. Prior to that,
Hahn led the Fluorine Products business within PMT, where he
established the Solstice® product line, and prior to his
employment with Honeywell, held several senior leadership positions
within Air Products and Chemicals Inc. He earned bachelor's and
master's degrees in materials science from Lehigh University and an M.B.A. from The Wharton
School of the University of Pennsylvania.
SPS technologies support the productivity and safety of more
than half a billion workers worldwide with offerings such as rugged
mobile computers, voice-enabled software and workflows, bar-code
scanners, printing solutions, gas sensing technologies, and
personal protective equipment. It will include Honeywell's
Sensing & Productivity Solutions and Industrial Safety business
units, as well as the Intelligrated acquisition after it closes.
SPS will be led by John
Waldron, who has served for the past year as president of
the Sensing and Productivity Solutions business unit that had been
formed by the combination of Honeywell's Scanning and Mobility
(HSM) and Sensing and Controls businesses. Previously, Waldron led
the HSM business and served as chief marketing officer while
leading the marketing integration of several acquired businesses
within the SPS portfolio, including Hand Held Products, Metrologic
Instruments, and EMS Technologies. Waldron earned a bachelor's
degree in electrical engineering from the University of Dayton and an M.B.A. from the
University of Notre Dame.
Succeeding Hahn as president and CEO of Transportation Systems
will be Olivier Rabiller, who has held positions of increasing
responsibility since joining Honeywell in 2002. For the past
two years, he has managed the Transportation Systems businesses in
China, India, and Brazil as part of his responsibilities for
generating growth in the fastest-growing geographies around the
world. His responsibilities have also included the global
aftermarket; business development; mergers, acquisitions and
divestitures; and licensing. He was previously vice president
and general manager of the Aftermarket business within
Transportation Systems. Prior to Honeywell, Rabiller served
seven years at Renault in Customer Service, Engine Project
Management, and Purchasing. He holds an engineering degree
from Ecole Centrale Nantes and an M.B.A. from INSEAD.
"Our new business group leaders demonstrate the depth and talent
of our leadership bench, and they will drive continued
outperformance in their respective businesses," said Cote.
Alex Ismail, who served as
president and CEO of Automation and Control Solutions for the past
two years, will leave the company. "I would like to thank
Alex for a long and successful career at Honeywell, during which he
led several different significant business units over many years,"
concluded Cote. "Alex was instrumental in building our Turbo
business into a global technology powerhouse, with rapid growth in
all regions and world-leading technologies that have greatly
benefited from their proximity to our Aerospace business. He
then moved to Automation and Control Solutions, where he delivered
strong operating margin expansion and improved operational
excellence; completed several acquisitions in new strategic
adjacencies such as smart meters; accelerated growth in High Growth
Regions, and built a strong pipeline of new products, Internet of
Things (IoT) solutions, and software for home, building, and worker
applications. Alex is a well-liked and respected leader, and we
wish him the best in his next endeavor."
This realignment has no impact on Honeywell's historical
consolidated financial position, results of operations or cash
flows.
Additional commentary on the second quarter 2016 results by
business segment are provided below.
|
Segment
Performance
|
|
|
Aerospace
|
|
|
($
Millions)
|
2Q 2015
|
2Q 2016
|
% Change
|
|
Sales
|
3,827
|
3,779
|
(1%)
|
|
Segment
Profit
|
777
|
791
|
2%
|
|
Segment
Margin
|
20.3%
|
20.9%
|
60 bps
|
- Sales for the second quarter were down (1%) reported and down
(2%) on a core organic basis. The decrease in core organic sales
was primarily driven by program delays and completions in the
international, U.S., and services businesses within Defense &
Space (D&S), lower shipments to Business and General Aviation
(BGA) OEMs, and higher OEM incentives. This was partially offset by
higher spares sales, higher repair and overhaul activities, and new
turbo platform launches on passenger vehicles in Transportation
Systems. The difference between reported and core organic sales was
due to the favorable impact from acquisitions.
- Segment profit was up 2% and segment margin expanded 60 bps to
20.9%, driven by productivity net of inflation, and commercial
excellence, partially offset by continued investments for growth
including higher OEM incentives, and acquisition amortization and
integration costs. Excluding the impact of acquisitions, segment
margin expanded 80 bps.
|
Automation and
Control Solutions
|
|
|
($
Millions)
|
2Q 2015
|
2Q 2016
|
% Change
|
|
Sales
|
3,553
|
3,886
|
9%
|
|
Segment
Profit
|
567
|
615
|
8%
|
|
Segment
Margin
|
16.0%
|
15.8%
|
(20) bps
|
- Sales for the second quarter were up 9% reported. Core organic
sales were down 1% in the quarter as a result of lower volume in
Sensing & Productivity Solutions (S&PS) due to the USPS
roll-out in the second quarter of 2015 partially offset by
continued global growth in Security and Fire, strength in our
Americas Distribution business, and further penetration of High
Growth Regions. The difference between reported and core organic
sales was due to the favorable impact from acquisitions, primarily
Elster.
- Segment profit was up 8% and segment margin contracted (20) bps
to 15.8%, primarily driven by acquisition amortization and
integration costs. Excluding the impact of acquisitions, segment
margin expanded 50 bps driven by productivity, net of inflation,
the benefits of previous restructuring actions, and commercial
excellence, partially offset by continued investments for
growth.
|
Performance
Materials and Technologies
|
|
|
($
Millions)
|
2Q 2015
|
2Q 2016
|
% Change
|
|
Sales
|
2,395
|
2,326
|
(3%)
|
|
Segment
Profit
|
509
|
490
|
(4%)
|
|
Segment
Margin
|
21.3%
|
21.1%
|
(20) bps
|
- Sales for the second quarter were down (3%) reported. Core
organic sales were down (4%) primarily driven by lower UOP gas
processing, licensing, and equipment sales and lower market pricing
in Resins & Chemicals, partially offset by higher projects,
software, and services sales in Process Solutions (HPS) and
stronger volume in Fluorine Products. The difference between
reported and core organic sales was due to the favorable impact
from acquisitions, partially offset by the unfavorable impact of
foreign currency and lower raw materials pass-through pricing in
Resins & Chemicals.
- Segment profit was down (4%) and segment margins contracted
(20) bps to 21.1%, driven by lower volume and continued investments
for growth, partially offset by the benefits of previous
restructuring actions and commercial excellence.
Honeywell will discuss its results during its investor
conference call today starting at 9:30 a.m.
EDT. To participate on the conference call, please
dial (877) 879-6207 (domestic) or (719) 325-4942 (international)
approximately ten minutes before the 9:30
a.m. EDT start. Please mention to the operator that you
are dialing in for Honeywell's second quarter 2016 earnings call or
provide the conference code HON2Q16. 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 12:30
p.m. EDT, July 22, until
12:30 p.m. EDT, July 29, by dialing (888) 203-1112 (domestic) or
(719) 457-0820 (international). The access code is 6704637.
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 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.
|
Contacts:
|
|
|
|
|
Media
|
Investor
Relations
|
|
Robert C.
Ferris
|
Mark
Macaluso
|
|
(973)
455-3388
|
(973)
455-2222
|
|
rob.ferris@honeywell.com
|
mark.macaluso@honeywell.com
|
|
|
Honeywell
International Inc
|
|
Consolidated
Statement of Operations (Unaudited)
|
|
(Dollars in millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Product
sales
|
$
8,035
|
|
$
7,798
|
|
$
15,654
|
|
$
15,162
|
|
Service
sales
|
1,956
|
|
1,977
|
|
3,859
|
|
3,826
|
|
Net sales
|
9,991
|
|
9,775
|
|
19,513
|
|
18,988
|
|
|
|
|
|
|
|
|
|
|
Costs, expenses and
other
|
|
|
|
|
|
|
|
|
Cost of products sold (A)
|
5,602
|
|
5,541
|
|
10,951
|
|
10,754
|
|
Cost of services sold (A)
|
1,219
|
|
1,273
|
|
2,417
|
|
2,422
|
|
|
6,821
|
|
6,814
|
|
13,368
|
|
13,176
|
|
Selling, general and administrative expenses (A)
|
1,329
|
|
1,242
|
|
2,609
|
|
2,472
|
|
Other (income) expense
|
1
|
|
(20)
|
|
(17)
|
|
(40)
|
|
Interest and other financial charges
|
85
|
|
77
|
|
170
|
|
154
|
|
|
8,236
|
|
8,113
|
|
16,130
|
|
15,762
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
1,755
|
|
1,662
|
|
3,383
|
|
3,226
|
|
Tax
expense
|
465
|
|
440
|
|
897
|
|
858
|
|
|
|
|
|
|
|
|
|
|
Net income
|
1,290
|
|
1,222
|
|
2,486
|
|
2,368
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to the noncontrolling interest
|
8
|
|
28
|
|
18
|
|
58
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Honeywell
|
$
1,282
|
|
$
1,194
|
|
$
2,468
|
|
$
2,310
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of
common stock - basic
|
$
1.68
|
|
$
1.52
|
|
$
3.22
|
|
$
2.95
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of
common stock - assuming dilution
|
$
1.66
|
|
$
1.51
|
|
$
3.19
|
|
$
2.91
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding - basic
|
763.3
|
|
783.3
|
|
765.5
|
|
783.5
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding - assuming dilution
|
772.4
|
|
792.9
|
|
774.6
|
|
793.4
|
|
|
|
|
|
|
|
|
|
|
(A) Cost of products
and services sold and selling, general and administrative expenses
include amounts for repositioning and other charges, pension and
other postretirement (income) expense, and stock compensation
expense.
|
|
Honeywell
International Inc
|
|
Segment Data
(Unaudited)
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
Net Sales
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Aerospace
|
$
3,779
|
|
$
3,827
|
|
$
7,484
|
|
$
7,434
|
|
|
|
|
|
|
|
|
|
|
Automation and
Control Solutions
|
3,886
|
|
3,553
|
|
7,563
|
|
6,817
|
|
|
|
|
|
|
|
|
|
|
Performance Materials
and Technologies
|
2,326
|
|
2,395
|
|
4,466
|
|
4,737
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
9,991
|
|
$
9,775
|
|
$
19,513
|
|
$
18,988
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Profit to Income Before Taxes
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
Segment
Profit
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Aerospace
|
$
791
|
|
$
777
|
|
$
1,589
|
|
$
1,529
|
|
|
|
|
|
|
|
|
|
|
Automation and
Control Solutions
|
615
|
|
567
|
|
1,145
|
|
1,083
|
|
|
|
|
|
|
|
|
|
|
Performance Materials
and Technologies
|
490
|
|
509
|
|
931
|
|
1,012
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
(49)
|
|
(50)
|
|
(98)
|
|
(100)
|
|
|
|
|
|
|
|
|
|
|
Total segment
profit
|
1,847
|
|
1,803
|
|
3,567
|
|
3,524
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense) (A)
|
(7)
|
|
12
|
|
5
|
|
24
|
|
Interest and other
financial charges
|
(85)
|
|
(77)
|
|
(170)
|
|
(154)
|
|
Stock compensation
expense (B)
|
(43)
|
|
(39)
|
|
(96)
|
|
(91)
|
|
Pension ongoing
income (B)
|
151
|
|
103
|
|
301
|
|
203
|
|
Other postretirement
income (expense) (B)
|
8
|
|
(11)
|
|
17
|
|
(20)
|
|
Repositioning and
other charges (B)
|
(116)
|
|
(129)
|
|
(241)
|
|
(260)
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
$
1,755
|
|
$
1,662
|
|
$
3,383
|
|
$
3,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
Equity income (loss) of affiliated
companies is included in segment profit.
|
|
|
|
|
|
|
|
|
|
|
(B)
Amounts included in cost of products and
services sold and selling, general and administrative
expenses.
|
|
Honeywell
International Inc
|
|
Consolidated Balance
Sheet (Unaudited)
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
|
|
2016
|
|
2015
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
5,045
|
|
$
5,455
|
|
Accounts, notes and other receivables
|
|
8,730
|
|
8,075
|
|
Inventories
|
|
4,678
|
|
4,420
|
|
Investments and other current assets
|
|
1,927
|
|
2,103
|
|
Total current
assets
|
|
20,380
|
|
20,053
|
|
|
|
|
|
|
|
Investments and
long-term receivables
|
|
561
|
|
517
|
|
Property, plant and
equipment - net
|
|
6,086
|
|
5,789
|
|
Goodwill
|
|
16,688
|
|
15,895
|
|
Other intangible
assets - net
|
|
4,557
|
|
4,577
|
|
Insurance recoveries
for asbestos related liabilities
|
|
428
|
|
426
|
|
Deferred income
taxes
|
|
328
|
|
283
|
|
Other
assets
|
|
2,153
|
|
1,776
|
|
|
|
|
|
|
|
Total
assets
|
|
$
51,181
|
|
$
49,316
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREOWNERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
5,598
|
|
$
5,580
|
|
Commercial paper and other short-term borrowings
|
|
3,788
|
|
5,937
|
|
Current maturities of long-term debt
|
|
618
|
|
577
|
|
Accrued liabilities
|
|
5,907
|
|
6,277
|
|
Total current
liabilities
|
|
15,911
|
|
18,371
|
|
|
|
|
|
|
|
Long-term
debt
|
|
9,607
|
|
5,554
|
|
Deferred income
taxes
|
|
767
|
|
558
|
|
Postretirement
benefit obligations other than pensions
|
|
489
|
|
526
|
|
Asbestos related
liabilities
|
|
1,259
|
|
1,251
|
|
Other
liabilities
|
|
4,203
|
|
4,348
|
|
Redeemable
noncontrolling interest
|
|
3
|
|
290
|
|
Shareowners'
equity
|
|
18,942
|
|
18,418
|
|
|
|
|
|
|
|
Total liabilities,
redeemable noncontrolling interest and shareowners'
equity
|
|
$
51,181
|
|
$
49,316
|
|
Honeywell
International Inc
|
|
Consolidated
Statement of Cash Flows (Unaudited)
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
1,290
|
|
$
1,222
|
|
$
2,486
|
|
$
2,368
|
|
Less: Net income attributable to the noncontrolling
interest
|
|
8
|
|
28
|
|
18
|
|
58
|
|
Net income attributable to Honeywell
|
|
1,282
|
|
1,194
|
|
2,468
|
|
2,310
|
|
Adjustments to reconcile net income attributable to Honeywell to
net
|
|
|
|
|
|
|
|
|
|
cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
185
|
|
172
|
|
364
|
|
335
|
|
Amortization
|
|
75
|
|
54
|
|
149
|
|
107
|
|
Repositioning and other charges
|
|
140
|
|
129
|
|
265
|
|
260
|
|
Net
payments for repositioning and other charges
|
|
(132)
|
|
(115)
|
|
(266)
|
|
(215)
|
|
Pension
and other postretirement income
|
|
(159)
|
|
(92)
|
|
(318)
|
|
(183)
|
|
Pension
and other postretirement benefit payments
|
|
(43)
|
|
(39)
|
|
(81)
|
|
(48)
|
|
Stock
compensation expense
|
|
43
|
|
39
|
|
96
|
|
91
|
|
Deferred
income taxes
|
|
134
|
|
33
|
|
182
|
|
126
|
|
Excess tax
benefits from share based payment arrangements
|
|
(38)
|
|
(9)
|
|
(68)
|
|
(56)
|
|
Other
|
|
(77)
|
|
205
|
|
9
|
|
103
|
|
Changes in
assets and liabilities, net of the effects of
|
|
|
|
|
|
|
|
|
|
acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
Accounts, notes and other receivables
|
|
(310)
|
|
(80)
|
|
(513)
|
|
(250)
|
|
Inventories
|
|
29
|
|
61
|
|
(212)
|
|
(25)
|
|
Other current assets
|
|
77
|
|
(96)
|
|
18
|
|
(38)
|
|
Accounts payable
|
|
113
|
|
88
|
|
-
|
|
(24)
|
|
Accrued liabilities
|
|
225
|
|
(136)
|
|
(292)
|
|
(664)
|
|
Net cash provided by
operating activities
|
|
1,544
|
|
1,408
|
|
1,801
|
|
1,829
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Expenditures for property, plant and equipment
|
|
(281)
|
|
(243)
|
|
(475)
|
|
(408)
|
|
Proceeds from disposals of property, plant and equipment
|
|
-
|
|
2
|
|
1
|
|
3
|
|
Increase in investments
|
|
(985)
|
|
(2,365)
|
|
(1,821)
|
|
(3,866)
|
|
Decrease in investments
|
|
905
|
|
953
|
|
1,785
|
|
2,059
|
|
Cash paid for acquisitions, net of cash acquired
|
|
(28)
|
|
-
|
|
(1,084)
|
|
(185)
|
|
Proceeds from sales of businesses, net of fees paid
|
|
-
|
|
-
|
|
-
|
|
2
|
|
Other
|
|
43
|
|
28
|
|
52
|
|
(150)
|
|
Net cash used for
investing activities
|
|
(346)
|
|
(1,625)
|
|
(1,542)
|
|
(2,545)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in commercial paper and other short-term
borrowings
|
|
226
|
|
77
|
|
(2,224)
|
|
1,129
|
|
Proceeds from issuance of common stock
|
|
138
|
|
47
|
|
243
|
|
125
|
|
Proceeds from issuance of long-term debt
|
|
25
|
|
11
|
|
4,473
|
|
14
|
|
Payments of long-term debt
|
|
(51)
|
|
(22)
|
|
(470)
|
|
(57)
|
|
Excess tax benefits from share based payment
arrangements
|
|
38
|
|
9
|
|
68
|
|
56
|
|
Repurchases of common stock
|
|
(477)
|
|
(123)
|
|
(1,633)
|
|
(486)
|
|
Cash dividends paid
|
|
(458)
|
|
(436)
|
|
(957)
|
|
(851)
|
|
Payments to purchase the noncontrolling interest
|
|
-
|
|
-
|
|
(238)
|
|
-
|
|
Other
|
|
-
|
|
-
|
|
18
|
|
-
|
|
Net cash used for
financing activities
|
|
(559)
|
|
(437)
|
|
(720)
|
|
(70)
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
|
(67)
|
|
33
|
|
51
|
|
(219)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
572
|
|
(621)
|
|
(410)
|
|
(1,005)
|
|
Cash and cash
equivalents at beginning of period
|
|
4,473
|
|
6,575
|
|
5,455
|
|
6,959
|
|
Cash and cash
equivalents at end of period
|
|
$
5,045
|
|
$
5,954
|
|
$
5,045
|
|
$
5,954
|
|
Honeywell
International Inc
|
|
|
Reconciliation of
Cash Provided by Operating Activities to Free Cash Flow
(Unaudited)
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
June 30,
|
|
|
December
31,
|
|
|
2016
|
|
2015
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
$
1,544
|
|
$
1,408
|
|
|
$
5,454
|
|
|
Expenditures for
property, plant and equipment
|
(281)
|
|
(243)
|
|
|
(1,073)
|
|
|
Free cash
flow
|
$
1,263
|
|
$
1,165
|
|
|
$
4,381
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
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
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
$
1,847
|
|
$
1,803
|
|
$
3,567
|
|
$
3,524
|
|
|
|
|
|
|
|
|
|
|
Stock compensation
expense (A)
|
|
(43)
|
|
(39)
|
|
(96)
|
|
(91)
|
|
Repositioning and
other (A, B)
|
|
(122)
|
|
(137)
|
|
(253)
|
|
(276)
|
|
Pension ongoing
income (A)
|
|
151
|
|
103
|
|
301
|
|
203
|
|
Other postretirement
income (expense) (A)
|
|
8
|
|
(11)
|
|
17
|
|
(20)
|
|
Operating
Income
|
|
$
1,841
|
|
$
1,719
|
|
$
3,536
|
|
$
3,340
|
|
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
$
1,847
|
|
$
1,803
|
|
$
3,567
|
|
$
3,524
|
|
÷ Sales
|
|
$
9,991
|
|
$
9,775
|
|
$
19,513
|
|
$
18,988
|
|
Segment Profit Margin
%
|
|
18.5%
|
|
18.4%
|
|
18.3%
|
|
18.6%
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
$
1,841
|
|
$
1,719
|
|
$
3,536
|
|
$
3,340
|
|
÷ Sales
|
|
$
9,991
|
|
$
9,775
|
|
$
19,513
|
|
$
18,988
|
|
Operating Income
Margin %
|
|
18.4%
|
|
17.6%
|
|
18.1%
|
|
17.6%
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
Calculation of SBG
Segment Profit Margin Excluding Mergers and Acquisitions
(Unaudited)
|
|
(Dollars in
millions)
|
|
|
|
|
|
Three Months
Ended
|
|
June 30,
|
|
|
2016
|
|
|
Aerospace
|
|
|
|
|
Segment Profit
excluding mergers and acquisitions
|
|
$
786
|
|
|
÷ Sales excluding
mergers and acquisitions
|
|
$
3,733
|
|
|
Segment Profit Margin
excluding mergers and acquisitions %
|
|
21.1%
|
|
|
|
|
|
|
Automation and
Control Solutions
|
|
|
|
|
Segment Profit
excluding mergers and acquisitions
|
|
$
577
|
|
|
÷ Sales excluding
mergers and acquisitions
|
|
$
3,493
|
|
|
Segment Profit Margin
excluding mergers and acquisitions %
|
|
16.5%
|
|
|
|
|
|
|
Performance
Materials and Technologies
|
|
|
|
|
Segment Profit
excluding mergers and acquisitions
|
|
$
476
|
|
|
÷ Sales excluding
mergers and acquisitions
|
|
$
2,250
|
|
|
Segment Profit Margin
excluding mergers and acquisitions %
|
|
21.2%
|
|
|
|
|
|
|
|
|
|
|
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
Segment Profit to Operating Income Excluding Pension Mark-to-Market
Adjustment and
|
|
Calculation of
Segment Profit and Operating Income Margins Excluding Pension
Mark-to-Market Adjustment (Unaudited)
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
December
31,
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
$
7,256
|
|
|
|
|
|
|
|
|
|
Stock compensation
expense (A)
|
|
|
(175)
|
|
|
|
Repositioning and
other (A, B)
|
|
|
(576)
|
|
|
|
Pension ongoing
income (A)
|
|
|
430
|
|
|
|
Pension
mark-to-market adjustment (A)
|
|
|
(67)
|
|
|
|
Other postretirement
expense (A)
|
|
|
(40)
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
$
6,828
|
|
|
|
Pension
mark-to-market adjustment (A)
|
|
|
(67)
|
|
|
|
Operating Income
excluding pension mark-to-market adjustment
|
|
|
$
6,895
|
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
$
7,256
|
|
|
|
÷ Sales
|
|
|
$
38,581
|
|
|
|
Segment Profit Margin
%
|
|
|
18.8%
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
$
6,828
|
|
|
|
÷ Sales
|
|
|
$
38,581
|
|
|
|
Operating Income
Margin %
|
|
|
17.7%
|
|
|
|
|
|
|
|
|
|
Operating Income
excluding pension mark-to-market adjustment
|
|
|
$
6,895
|
|
|
|
÷ Sales
|
|
|
$
38,581
|
|
|
|
Operating Income
Margin excluding pension mark-to-market adjustment %
|
|
|
17.9%
|
|
|
|
|
|
|
|
|
|
(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 Adjustment
|
|
Unaudited
|
|
|
|
|
|
Twelve Months
Ended
|
|
December
31,
|
|
|
2015
|
|
|
|
|
|
|
EPS
|
|
$
6.04
|
|
|
|
|
|
|
Pension
mark-to-market adjustment (A)
|
|
0.06
|
|
|
|
|
|
|
EPS, excluding
pension mark-to-market adjustment
|
|
$
6.10
|
|
|
|
|
|
|
|
|
|
|
(A) - 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 adjustment is a measure that is
useful to investors and
|
|
|
management in
understanding our ongoing operations and in analysis of ongoing
operating trends.
|
|
|
|
Honeywell
International Inc
|
|
Reconciliation of
Core Organic Sales Growth (Unaudited)
|
|
|
|
Three Months
Ended
|
|
June 30,
|
|
2016
|
|
Honeywell
|
|
|
Reported sales
growth
|
2%
|
|
Less: Foreign
currency translation, acquisitions, divestitures and
other
|
4%
|
|
Less: Raw materials
pricing in R&C
|
-
|
|
|
|
Core organic sales
growth
|
(2%)
|
|
|
|
PMT
|
|
|
Reported sales
growth
|
(3%)
|
|
Less: Foreign
currency translation, acquisitions, divestitures and
other
|
2%
|
|
Less: Raw materials
pricing in R&C
|
(1%)
|
|
|
|
Core organic sales
growth
|
(4%)
|
|
|
|
|
|
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.
|
|
|
We believe core
organic sales growth is a measure that is useful to investors and
management in understanding our ongoing operations and in analysis
of ongoing operating trends.
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/honeywell-reports-second-quarter-2016-sales-of-100-billion-up-2-earnings-up-10-to-166-per-share-announces-split-of-automation-and-control-solutions-business-group-300302647.html
SOURCE Honeywell