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HON Honeywell International Incorporated

159.07
0.00 (0.00%)
18 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Honeywell International Incorporated LSE:HON London Ordinary Share COM STK USD1
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 159.07 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Honeywell Intl 1st Quarter Results

21/04/2017 11:32am

UK Regulatory


 
TIDMHON 
 
Honeywell Delivers $1.71 Earnings Per Share, Up 10 Percent 
 
- Normalized for Tax, Earnings Per Share of $1.66, Up 11 Percent Excluding 
Divestitures, 
Exceeds High End of Guidance Range 
 
- Reported Sales Flat, Organic Up Over 2 Percent 
 
- Operating Income Margin Expansion of 100 bps, Segment Margin Expansion of 70 
bps 
 
- Free Cash Flow 6X Greater Than First-Quarter 2016 
 
- Raising Low-End of 2017 EPS Guidance Range by 5 Cents to $6.90 - $7.10 
 
MORRIS PLAINS, N.J., April 21, 2017 -- Honeywell (NYSE: HON) today announced 
financial results for the first quarter of 2017 and updated its full-year 2017 
earnings guidance. 
 
"Honeywell reported a strong start to 2017, with over 2 percent organic sales 
growth, 70 basis points of segment margin expansion, and free cash flow of 
nearly $800 million that was more than six times greater than 2016. Our strong 
operational performance resulted in reported earnings per share of $1.71. 
Normalizing for tax, earnings per share was $1.66, or 2 cents above the 
high-end of our first-quarter guidance and up 11 percent versus last year, 
excluding divestitures," said Darius Adamczyk, President and Chief Executive 
Officer of Honeywell. 
 
"Each of our businesses contributed," Adamczyk said. "The commercial 
aftermarket within Aerospace and the global distribution business within Home 
and Building Technologies remained strong. In Performance Materials and 
Technologies, robust demand for Solstice® low-global-warming products drove 
double-digit organic growth in Advanced Materials, and improving conditions in 
the oil and gas industry bolstered ongoing strength in UOP. In Safety and 
Productivity Solutions, demand for warehouse solutions and industrial safety 
products enabled growth in the quarter." 
 
Adamczyk concluded, "Our diversified portfolio, coupled with the investments 
we've made over the past several years, drove our excellent performance in the 
first quarter. As a result of our performance, we are raising the low end of 
our full-year guidance by 5 cents. We now anticipate that 2017 earnings per 
share will be $6.90 to $7.10, up 7 percent to 10 percent, excluding 
divestitures, any pension mark-to-market adjustments, and 2016 debt refinancing 
charges. We look forward to continuing our track record of performance and we 
remain focused on accelerating our organic growth, continuing to expand margins 
by maintaining our productivity rigor, delivering best-in-class returns as the 
leading software-industrial company, and more aggressively deploying capital." 
 
Honeywell will discuss the results during its investor conference call today 
starting at 9:30 a.m. Eastern Daylight Time. 
 
First Quarter Performance 
Honeywell sales for the first quarter were flat on a reported basis and up over 
2 percent on an organic basis. The difference between reported and organic 
sales is due to the impact of foreign currency translation, the 2016 spin-off 
of the former Resins and Chemicals business in Performance Materials and 
Technologies, and the 2016 divestiture of the Aerospace government services 
business, partially offset by acquisitions, primarily Intelligrated in Safety 
and Productivity Solutions. The first-quarter financial results can be found in 
Tables 1 and 2 below. 
 
Aerospace sales for the first quarter were flat on an organic basis driven by 
growth in the Air Transport aftermarket and gas turbo penetration in Europe and 
China, offset by lower OE volumes in Business and General Aviation. Overall, 
Defense and Space sales were flat on an organic basis in the quarter. Segment 
margin expanded 90 bps to 22.4 percent, driven by restructuring benefits, 
productivity net of inflation, and commercial excellence, partially offset by 
lower Business and General Aviation volumes. 
 
Home and Building Technologies sales for the first quarter were up 3 percent on 
an organic basis driven by strong performance in Distribution, air and water 
products growth in China, and the impact of new product introductions. Segment 
margin expanded 70 bps to 15.2 percent, driven by restructuring benefits and 
productivity net of inflation, partially offset by growth investments. 
 
Performance Materials and Technologies sales for the first quarter were up 5 
percent on an organic basis driven by a continued increase in Solstice® sales 
in Advanced Materials and strong modular gas processing growth in UOP. Segment 
margin expanded 260 bps to 22.8 percent, driven by productivity net of 
inflation, commercial excellence, and higher sales volume. 
 
Safety and Productivity Solutions sales for the first quarter were up 3 percent 
on an organic basis as a result of higher volumes in safety products and 
workflow solutions. Segment margin improved 50 bps to 14.7 percent, primarily 
driven by restructuring benefits and productivity, net of inflation, partially 
offset by acquisition amortization and integration costs. Excluding the impact 
of acquisitions, segment margin expanded by more than 300 bps. 
 
To participate in today's conference call, please dial (888) 349-9618 
(domestic) or (719) 325-2385 (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 first quarter 2017 earnings call or provide the conference code 
HON1Q17. 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 1:30 p.m. EDT, April 21, until 1:30 p.m. EDT, April 
28, by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international). The 
access code is 7717044. 
 
TABLE 1: SUMMARY OF FINANCIAL RESULTS - TOTAL HONEYWELL 
 
                                                                   1Q 2016 1Q 2017 Change 
 
Sales                                                               9,522   9,492   Flat 
 
Organic                                                                              2% 
 
Segment Margin                                                      18.1%   18.8%  70 bps 
 
Operating Income Margin                                             17.8%   18.8%  100 bps 
 
Earnings Per Share 
 
Reported                                                            $1.56   $1.71    10% 
 
Ex-Divestitures, Normalized for Expected Full-Year Tax Rate of 25%  $1.50   $1.66    11% 
 
Cash Flow From Operations                                            319     940    195% 
 
Free Cash Flow1                                                      125     772    518% 
 
 
TABLE 2: SUMMARY OF FINANCIAL RESULTS - SEGMENTS 
 
AEROSPACE                              1Q 2016 1Q 2017 Change 
 
Sales                                   3,705   3,546   (4%) 
 
Segment Profit                           798     796    Flat 
 
Segment Margin                          21.5%   22.4%  90 bps 
 
HOME AND BUILDING TECHNOLOGIES 
 
Sales                                   2,477   2,553    3% 
 
Segment Profit                           360     389     8% 
 
Segment Margin                          14.5%   15.2%  70 bps 
 
PERFORMANCE MATERIALS AND TECHNOLOGIES 
 
Sales                                   2,281   2,069   (9%) 
 
Segment Profit                           461     471     2% 
 
Segment Margin                          20.2%   22.8%  260 bps 
 
SAFETY AND PRODUCTIVITY SOLUTIONS 
 
Sales                                   1,059   1,324    25% 
 
Segment Profit                           150     194     29% 
 
Segment Margin                          14.2%   14.7%  50 bps 
 
Ex-M&A                                                 330 bps 
 
 
Honeywell (http://www.honeywell.com/) is a Fortune 100 software-industrial 
company that delivers industry specific solutions that include aerospace and 
automotive products and services; control technologies for buildings, homes, 
and industry; and performance materials globally. Our technologies help 
everything from aircraft, cars, homes and buildings, manufacturing plants, 
supply chains, and workers become more connected to make our world smarter, 
safer, and more sustainable.  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. 
 
______________________________ 
1 Cash Flow From Operations Less Capital Expenditures 
 
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 
 
                                                                           March 31, 
 
                                                                       2017           2016 
 
Product sales                                                      $        7,540   $    7,619 
 
Service sales                                                               1,952        1,903 
 
Net sales                                                                   9,492        9,522 
 
Costs, expenses and other 
 
    Cost of products sold  (A)                                              5,237        5,349 
 
    Cost of services sold  (A)                                              1,119        1,198 
 
                                                                            6,356        6,547 
 
    Selling, general and administrative expenses (A)                        1,349        1,280 
 
    Other (income) expense                                                   (12)         (18) 
 
    Interest and other financial charges                                       75           85 
 
                                                                            7,768        7,894 
 
Income before taxes                                                         1,724        1,628 
 
Tax expense                                                                   392          402 
 
Net income                                                                  1,332        1,226 
 
Less: Net income attributable to the noncontrolling interest                    6           10 
 
Net income attributable to Honeywell                               $        1,326   $    1,216 
 
Earnings per share of common stock - basic                        $          1.74  $      1.58 
 
Earnings per share of common stock - assuming dilution            $          1.71  $      1.56 
 
Weighted average number of shares outstanding - basic                       763.1        767.9 
 
Weighted average number of shares outstanding - assuming dilution           773.9        779.6 
 
(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 
 
                                                                              March 31, 
 
Net Sales                                                            2017                            2016 
 
Aerospace                                                                 $        3,546         $        3,705 
 
Home and Building Technologies                                                     2,553                  2,477 
 
Performance Materials and Technologies                                             2,069                  2,281 
 
Safety and Productivity Solutions                                                  1,324                  1,059 
 
     Total                                                                $        9,492         $        9,522 
 
                            Reconciliation of Segment Profit to Income Before Taxes 
 
                                                                          Three Months Ended 
 
                                                                              March 31, 
 
Segment Profit                                                       2017                            2016 
 
Aerospace                                                                $           796        $           798 
 
Home and Building Technologies                                                       389                    360 
 
Performance Materials and Technologies                                               471                    461 
 
Safety and Productivity Solutions                                                    194                    150 
 
Corporate                                                                           (61)                   (49) 
 
     Total segment profit                                                          1,789                  1,720 
 
Other income (expense) (A)                                                             6                     12 
 
Interest and other financial charges                                                (75)                   (85) 
 
Stock compensation expense (B)                                                      (50)                   (53) 
 
Pension ongoing income (B)                                                           179                    150 
 
Other postretirement income (B)                                                        4                      9 
 
Repositioning and other charges (B)                                                (129)                  (125) 
 
Income before taxes                                                       $        1,724         $        1,628 
 
            (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) 
 
                                                                                        March 31,      December 31, 
 
                                                                                           2017            2016 
 
ASSETS 
 
Current assets: 
 
    Cash and cash equivalents                                                         $        7,710  $        7,843 
 
    Short-term investments                                                                     1,885           1,520 
 
    Accounts receivable - net                                                                  8,155           8,177 
 
    Inventories                                                                                4,652           4,366 
 
    Other current assets                                                                       1,178           1,152 
 
       Total current assets                                                                   23,580          23,058 
 
Investments and long-term receivables                                                            533             587 
 
Property, plant and equipment - net                                                            5,816           5,793 
 
Goodwill                                                                                      17,827          17,707 
 
Other intangible assets - net                                                                  4,592           4,634 
 
Insurance recoveries for asbestos related liabilities                                            407             417 
 
Deferred income taxes                                                                            337             347 
 
Other assets                                                                                   1,687           1,603 
 
       Total assets                                                                     $     54,779    $     54,146 
 
LIABILITIES AND SHAREOWNERS' EQUITY 
 
Current liabilities: 
 
    Accounts payable                                                                  $        5,805  $        5,690 
 
    Commercial paper and other short-term borrowings                                           3,415           3,366 
 
    Current maturities of long-term debt                                                       1,271             227 
 
    Accrued liabilities                                                                        6,790           7,048 
 
       Total current liabilities                                                              17,281          16,331 
 
Long-term debt                                                                                11,181          12,182 
 
Deferred income taxes                                                                            414             486 
 
Postretirement benefit obligations other than pensions                                           546             473 
 
Asbestos related liabilities                                                                   1,002           1,014 
 
Other liabilities                                                                              3,877           4,110 
 
Redeemable noncontrolling interest                                                                 3               3 
 
Shareowners' equity                                                                           20,475          19,547 
 
       Total liabilities, redeemable noncontrolling interest and shareowners'           $     54,779    $     54,146 
 equity 
 
 
 
                                    Honeywell International Inc 
 
                          Consolidated Statement of Cash Flows (Unaudited) 
 
                                       (Dollars in millions) 
 
                                                                                 Three Months Ended 
 
                                                                                     March 31, 
 
                                                                                  2017       2016 
 
Cash flows from operating activities: 
 
    Net income                                                                  $   1,332  $   1,226 
 
    Less: Net income attributable to the noncontrolling interest                        6         10 
 
    Net income attributable to Honeywell                                            1,326      1,216 
 
    Adjustments to reconcile net income attributable to Honeywell to net 
 
    cash provided by operating activities: 
 
        Depreciation                                                                  170        179 
 
        Amortization                                                                  101         74 
 
        Repositioning and other charges                                               129        125 
 
        Net payments for repositioning and other charges                            (137)      (134) 
 
        Pension and other postretirement income                                     (183)      (159) 
 
        Pension and other postretirement benefit payments                            (24)       (38) 
 
        Stock compensation expense                                                     50         53 
 
        Deferred income taxes                                                        (42)         48 
 
        Other                                                                          14         88 
 
        Changes in assets and liabilities, net of the effects of 
 
        acquisitions and divestitures: 
 
           Accounts receivable                                                         23      (208) 
 
           Inventories                                                              (286)      (241) 
 
           Other current assets                                                      (25)       (54) 
 
           Accounts payable                                                           115      (113) 
 
           Accrued liabilities                                                      (291)      (517) 
 
Net cash provided by operating activities                                             940        319 
 
Cash flows from investing activities: 
 
    Expenditures for property, plant and equipment                                  (168)      (194) 
 
    Proceeds from disposals of property, plant and equipment                           24          1 
 
    Increase in investments                                                       (1,256)      (836) 
 
    Decrease in investments                                                           825        880 
 
    Cash paid for acquisitions, net of cash acquired                                    -    (1,056) 
 
    Other                                                                            (29)          9 
 
Net cash used for investing activities                                              (604)    (1,196) 
 
Cash flows from financing activities: 
 
    Proceeds from issuance of commercial paper and other short-term borrowings      2,468      6,300 
 
    Payments of commercial paper and other short-term borrowings                  (2,467)    (8,750) 
 
    Proceeds from issuance of common stock                                            221        105 
 
    Proceeds from issuance of long-term debt                                           11      4,448 
 
    Payments of long-term debt                                                        (5)      (419) 
 
    Repurchases of common stock                                                     (310)    (1,156) 
 
    Cash dividends paid                                                             (503)      (499) 
 
    Payments to purchase the noncontrolling interest                                    -      (238) 
 
    Other                                                                            (33)       (14) 
 
Net cash used for financing activities                                              (618)      (223) 
 
Effect of foreign exchange rate changes on cash and cash equivalents                  149        118 
 
Net decrease in cash and cash equivalents                                           (133)      (982) 
 
Cash and cash equivalents at beginning of period                                    7,843      5,455 
 
Cash and cash equivalents at end of period                                      $   7,710  $   4,473 
 
 
 
                                           Honeywell International Inc 
                    Reconciliation of Cash Provided by Operating Activities to Free Cash Flow 
                                                   (Unaudited) 
                                              (Dollars in millions) 
 
                                                                                                    Three Months 
                                                                                                       Ended 
 
                                                                                                     March 31, 
 
                                                                                                   2017     2016 
 
Cash provided by operating activities                                                             $   940  $   319 
 
Expenditures for property, plant and                                                                (168)    (194) 
equipment 
 
Free cash flow                                                                                    $   772  $   125 
 
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, 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 
 
                                                                                                March 31, 
 
                                                                                           2017           2016 
 
Segment Profit                                                                         $       1,789  $      1,720 
 
Stock compensation expense (A)                                                                  (50)          (53) 
 
 
Repositioning and other (A, B)                                                                 (135)         (131) 
 
Pension ongoing income (A)                                                                       179           150 
 
Other postretirement income (A)                                                                    4             9 
 
Operating Income                                                                       $       1,787  $      1,695 
 
Segment Profit                                                                         $       1,789  $      1,720 
 
÷ Sales                                                                                        9,492         9,522 
 
Segment Profit Margin %                                                                    18.8%         18.1% 
 
Operating Income                                                                       $       1,787  $      1,695 
 
÷ Sales                                                                                        9,492         9,522 
 
Operating Income Margin %                                                                  18.8%         17.8% 
 
(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 Segment Profit Margin Excluding Mergers and Acquisitions 
                                        (Unaudited) 
 
                                   (Dollars in millions) 
 
                                                                  Three Months Ended 
 
                                                                      March 31, 
 
                                                                 2017            2016 
 
Safety and Productivity Solutions 
 
Segment Profit excluding mergers and acquisitions           $          190  $          149 
 
÷ Sales excluding mergers and acquisitions                   $       1,080   $       1,041 
 
Segment Profit Margin excluding mergers and acquisitions %      17.6%           14.3% 
 
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 Organic Sales % Change (Unaudited) 
 
                                                             Three Months Ended 
 
                                                                 March 31, 
 
                                                                     2017 
 
Honeywell 
 
Reported sales % change                                                - 
 
Less: Foreign currency translation                                   (1)% 
 
Less: Acquisitions and divestitures, net                             (1)% 
 
Organic sales % change                                                2% 
 
Aerospace 
 
Reported sales % change                                              (4)% 
 
Less: Foreign currency translation                                   (1)% 
 
Less: Acquisitions and divestitures, net                             (3)% 
 
Organic sales % change                                                 - 
 
Home and Building Technologies 
 
Reported sales % change                                               3% 
 
Less: Foreign currency translation                                   (2)% 
 
Less: Acquisitions and divestitures, net                              2% 
 
Organic sales % change                                                3% 
 
Performance Materials and Technologies 
 
Reported sales % change                                              (9)% 
 
Less: Foreign currency translation                                   (1)% 
 
Less: Acquisitions and divestitures, net                             (13)% 
 
Organic sales % change                                                5% 
 
Safety and Productivity Solutions 
 
Reported sales % change                                               25% 
 
Less: Foreign currency translation                                   (1)% 
 
Less: Acquisitions and divestitures, net                              23% 
 
Organic sales % change                                                3% 
 
We believe 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. 
 
 
 
                                     Honeywell International Inc 
 
            Calculation of Earnings Per Share at 25% Tax Rate Excluding 2016 Divestitures 
                                             (Unaudited) 
 
                           (Dollars in millions, except per share amounts) 
 
                                                                              Three Months Ended 
 
                                                                                  March 31, 
 
                                                                              2017          2016 
 
Income before taxes                                                        $     1,724   $     1,628 
 
Taxes at 25%                                                                       431           407 
 
Net income at 25% tax rate                                                 $     1,293   $     1,221 
 
Less: Net income attributable to the noncontrolling interest                         6            10 
 
Net income attributable to Honeywell at 25% tax rate                       $     1,287   $     1,211 
 
Weighted average number of shares outstanding - assuming dilution                773.9         779.6 
 
Earnings per share at 25% tax rate                                        $       1.66  $       1.55 
 
Earnings per share impact attributable to 2016 divestitures (1)                      -          0.05 
 
Earnings per share of common stock - assuming dilution, at 25% tax rate, 
 
excluding 2016 divestitures                                               $       1.66  $       1.50 
 
Earnings per share of common stock - assuming dilution                    $       1.71  $       1.56 
 
Earnings per share impact of normalizing to 25% tax rate                          0.05          0.01 
 
Earnings per share impact attributable to 2016 divestitures (1)                      -          0.05 
 
Earnings per share of common stock - assuming dilution, at 25% tax rate, 
 
excluding 2016 divestitures                                               $       1.66  $       1.50 
 
(1) Earnings per share attributable to 2016 divestitures uses weighted average 
shares of 779.6 million and a blended tax rate of 36.0% for three months ended 
March 31, 2016. 
 
We believe earnings per share adjusted to expected 2017 full-year tax rate of 
approximately 25% 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 Earnings Per Share to Earnings Per Share, Excluding Pension 
                          Mark-to-Market Expense, Debt Refinancing Expense and Earnings Attributable to 
                                                  2016 Divestitures (Unaudited) 
 
                                                                                                  Twelve Months Ended 
 
                                                                                                      December 31, 
 
                                                                                           2017E (1)              2016 (2) 
 
Earnings per share of common stock - assuming dilution (EPS)                                   TBD            $             6.20 
 
Pension mark-to-market expense                                                                 TBD                          0.28 
 
Debt refinancing expense                                                                               -                    0.12 
 
EPS, excluding pension mark-to-market expense and debt refinancing expense                $6.90 - $7.10                     6.60 
 
Earnings attributable to 2016 divestitures                                                             -                  (0.14) 
 
EPS, excluding pension mark-to-market expense, debt refinancing expense and 
 
earnings attributable to 2016 divestitures                                                $6.90 - $7.10       $             6.46 
 
(1) Utilizes weighted average shares of approximately 774 million and an 
expected effective tax rate of approximately 25% 
 
(2) Utilizes weighted average shares of 775.3 million.  Pension mark-to-market 
expense uses a blended tax rate of 21.3%.  Debt 
      refinancing expense uses a tax rate of 26.5%.  Earnings attributable to 
2016 divestitures use a blended tax rate of 33.9%. 
 
 
We believe EPS, excluding pension mark-to-market expense, debt refinancing 
expense and earnings attributable to 2016 divestitures is a measure that is 
useful to investors and management in understanding our ongoing operations and 
in analysis of ongoing operating trends.  Management cannot reliably predict or 
estimate, without unreasonable effort, the pension mark-to-market expense as it 
is dependent on macroeconomic factors, such as interest rates and the return 
generated on invested pension plan assets.  We therefore do not include an 
estimate for the pension mark-to-market expense in this reconciliation. 
Management is not currently forecasting an impact to earnings per share arising 
from a debt refinancing or divestiture transaction.  Based on economic and 
industry conditions, future developments and other relevant factors, these 
assumptions are subject to change. 
 
 
 
END 
 

(END) Dow Jones Newswires

April 21, 2017 06:32 ET (10:32 GMT)

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