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| 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 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMHON
Honeywell Delivers Earnings Per Share of $1.75 and Sales of $10.1 Billion
- Reported Sales Up 3%; Organic Sales Up 5% Driven by Strength in the Aerospace
Aftermarket, Performance Materials and Technologies, and Intelligrated
- Operating Income Margin Expansion of 220 bps, Segment Margin Expansion of 120
bps
- Funded Approximately $120 Million in Restructuring and Other Projects
- Year-To-Date Operating Cash Flow Up 10% and Free Cash Flow1 Up 18%;
Third-Quarter Free Cash Flow Conversion of 90%
MORRIS PLAINS, N.J., Oct. 20, 2017 -- Honeywell (NYSE: HON) today announced
financial results for the third quarter of 2017.
"Honeywell delivered another quarter of high-quality financial results, with
organic growth of five percent, segment margin expansion of 120 basis points,
and earnings per share of $1.75, up 16 percent2 year-over-year," said Darius
Adamczyk, President and Chief Executive Officer of Honeywell. "This was a
standout quarter for us when it comes to organic growth. Our Aerospace
aftermarket business grew more than seven percent, our warehouse automation
business continued to grow at a double-digit pace, and there was broad strength
across Performance Materials and Technologies, led by 25 percent organic sales
growth in UOP. We also saw good momentum in orders and backlog, with
double-digit backlog growth in UOP, Intelligrated, Defense, and Honeywell
Building Solutions, positioning us for future growth.
"The investments we have made in people, capital expenditures, research and
development, and M&A are delivering outstanding growth for our shareowners,"
Adamczyk said. "Also, we continue to improve the cost structure of our
businesses through ongoing restructuring actions, and in the third quarter, we
dedicated approximately $120 million to new projects.
"Last week, we announced our intention to spin our Homes and Global
Distribution business and our Transportation Systems business into two
independent public companies by the end of next year. The spun businesses will
benefit from being able to make independent investment decisions that will
better position them for growth and value creation for decades to come. After
completion of the spins, Honeywell will have a more focused and growth-oriented
portfolio that benefits from cross-Honeywell synergies. These actions will
position the company to deliver sustained financial outperformance," Adamczyk
continued. "Honeywell is well positioned in both the short and long term, and
we anticipate a strong finish to 2017."
Honeywell also reaffirmed its full-year earnings-per-share guidance of $7.05 to
$7.10, up nine to 10 percent year-over-year, excluding divestitures, any
pension mark-to-market adjustments, and 2016 debt refinancing charges. Earlier
this month, the company raised the low end of the range by five cents.
Honeywell will discuss the results during its investor conference call today
starting at 9:30 a.m. Eastern Daylight Time.
Third Quarter Performance
Honeywell sales for the third quarter were up five percent on an organic basis
and up three percent on a reported basis. The difference between reported and
organic sales relates to 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 the acquisition
of Intelligrated in Safety and Productivity Solutions and the impact of foreign
currency translation. The third-quarter financial results can be found in
Tables 1 and 2, below.
Aerospace sales for the third quarter were up four percent on an organic basis
driven by growth in Commercial Aftermarket and lower year-over-year customer
incentives, strength in U.S. defense, and continued recovery in commercial
vehicles in Transportation Systems. Segment margin expanded 290 bps to 21.3
percent, primarily driven by the lower customer incentives, productivity net of
inflation, and the favorable impact of the 2016 divestiture of the government
services.
Home and Building Technologies sales for the third quarter were up two percent
on an organic basis driven by Smart Energy program roll-outs, air and water
product sales in China, and continued growth in the Distribution business.
Segment margin expanded 10 bps to 16.4 percent, driven by restructuring
benefits, productivity net of inflation, and commercial excellence, partially
offset by the unfavorable impact of higher sales from lower margin products and
investments for growth, including research and development.
Performance Materials and Technologies sales for the third quarter were up 10
percent on an organic basis driven by strong growth in every business,
including 25 percent growth in UOP driven by robust catalyst, licensing,
equipment, and gas processing volumes; continued demand for Solstice®
low-global-warming products in Advanced Materials; and short-cycle demand
within Honeywell Process Solutions. Segment margin expanded 170 bps to 23.3
percent, primarily driven by commercial excellence, productivity net of
inflation, and the favorable impact from the spin-off of the former Resins and
Chemicals business.
Safety and Productivity Solutions sales for the third quarter were up 3 percent
on an organic basis driven by increased demand for industrial safety products,
voice-enabled workflow solutions and Movilizer software, and double-digit
organic sales growth at Intelligrated, a leading provider of warehouse
automation solutions, which Honeywell acquired in 2016. Segment margin expanded
40 bps to 15.1 percent, primarily driven by productivity net of inflation,
partially offset by acquisition amortization and integration costs. Excluding
the impact of acquisitions, segment margin expanded 190 bps.
To participate on the conference call, please dial (866) 548-4713 (domestic) or
(719) 457-1036 (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 third quarter 2017 earnings call or provide the conference code
HON3Q17. 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, October 20, until 1:30 p.m. EDT,
October 27, by dialing (888) 203-1112 (domestic) or (719) 457-0820
(international). The access code is 1952662.
TABLE 1: SUMMARY OF FINANCIAL RESULTS - TOTAL HONEYWELL
3Q 3Q Change
2016 2017
Sales 9,804 10,121 3%
Organic 5%
Segment Margin 17.5% 18.7% 120
bps
Operating Income Margin 15.6% 17.8% 220
bps
Earnings Per Share
Reported $1.60 $1.75 9%
Ex-Divestitures & Additional 3Q17 Restructuring, $1.51 $1.75 16%
Normalized for Tax
Cash Flow From Operations 1,554 1,407 (9%)
Free Cash Flow3 1,280 1,195 (7%)
TABLE 2: SUMMARY OF FINANCIAL RESULTS - SEGMENTS
AEROSPACE 3Q 2016 3Q 2017 Change
Sales 3,601 3,657 2%
Organic 4%
Segment Profit 663 780 18%
Segment Margin 18.4% 21.3% 290 bps
HOME AND BUILDING TECHNOLOGIES
Sales 2,701 2,790 3%
Organic 2%
Segment Profit 441 458 4%
Segment Margin 16.3% 16.4% 10 bps
PERFORMANCE MATERIALS AND TECHNOLOGIES
Sales 2,329 2,260 (3%)
Organic 10%
Segment Profit 503 526 5%
Segment Margin 21.6% 23.3% 170 bps
SAFETY AND PRODUCTIVITY SOLUTIONS
Sales 1,173 1,414 21%
Organic 3%
Segment Profit 172 213 24%
Segment Margin 14.7% 15.1% 40 bps
Ex-M&A 190 bps
Honeywell (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, as well as the ability to
effect the separations. 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, including with
respect to any changes in or abandonment of the proposed separations. 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
2 Earnings per share variance excludes 2016 divestitures and additional 3Q17
restructuring funding enabled by a lower than planned effective tax rate,
normalized for tax at 26 percent
3 Cash Flow From Operations Less Capital Expenditures
Contacts:
Media Investor Relations
Scott Sayres Mark Macaluso
(480) 257-5921 (973) 455-2222
scott.sayres@honeywell.com mark.macaluso@honeywell.com
Honeywell International Inc.
Consolidated Statement of Operations (Unaudited)
(Dollars in millions, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Product sales $ 8,052 $ $ 23,671 $ 23,398
7,744
Service sales 2,069 2,060 6,020 5,919
Net sales 10,121 9,804 29,691 29,317
Costs, expenses and other
Cost of products 5,648 5,594 16,545 16,545
sold (A)
Cost of services 1,225 1,309 3,534 3,726
sold (A)
6,873 6,903 20,079 20,271
Selling, general and 1,447 1,367 4,177 3,976
administrative expenses
(A)
Other (income) (63) (180) (85) (197)
expense
Interest and other 81 82 235 252
financial charges
8,338 8,172 24,406 24,302
Income before taxes 1,783 1,632 5,285 5,015
Tax expense 418 384 1,188 1,214
Net income 1,365 1,248 4,097 3,801
Less: Net income 17 8 31 26
attributable to the
noncontrolling interest
Net income attributable $ 1,348 $ $ 4,066 $ 3,775
to Honeywell 1,240
Earnings per share of $ 1.77 $ $ 5.33 $ 4.93
common stock - basic 1.62
Earnings per share of $ 1.75 $ $ 5.26 $ 4.86
common stock - assuming 1.60
dilution
Weighted average number 762.2 763.7 763.1 765.0
of shares outstanding -
basic
Weighted average number 771.4 774.4 773.1 776.3
of shares outstanding -
assuming dilution
(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 Nine Months Ended
September 30, September 30,
Net Sales 2017 2016 2017 2016
Aerospace $ $ $ $
3,657 3,601 10,877 11,085
Home and Building 2,790 2,701 8,079 7,854
Technologies
Performance Materials and 2,260 2,329 6,568 7,044
Technologies
Safety and Productivity 1,414 1,173 4,167 3,334
Solutions
Total $ 10,121 $ $ $
9,804 29,691 29,317
Reconciliation of Segment Profit to Income Before Taxes
Three Months Ended Nine Months Ended
September 30, September 30,
Segment Profit 2017 2016 2017 2016
Aerospace $ $ $ $
780 663 2,395 2,252
Home and Building 458 441 1,267 1,213
Technologies
Performance Materials and 526 503 1,521 1,484
Technologies
Safety and Productivity 213 172 621 495
Solutions
Corporate (82) (59) (210) (157)
Total segment profit 1,895 1,720 5,594 5,287
Other income (expense) 49 169 54 174
(A)
Interest and other (81) (82) (235) (252)
financial charges
Stock compensation (39) (49) (133) (145)
expense (B)
Pension ongoing income 183 146 546 447
(expense) (B)
Other postretirement 6 7 16 24
income (expense) (B)
Repositioning and other (230) (279) (557) (520)
charges (B)
Income before taxes $ $ $ $
1,783 1,632 5,285 5,015
(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)
September December
30, 31,
2017 2016
ASSETS
Current assets:
Cash and cash equivalents $ $
7,389 7,843
Short-term investments 2,781 1,520
Accounts receivable - net 8,587 8,177
Inventories 4,751 4,366
Other current assets 1,136 1,152
Total current assets 24,644 23,058
Investments and long-term receivables 643 587
Property, plant and equipment - net 5,757 5,793
Goodwill 18,268 17,707
Other intangible assets - net 4,587 4,634
Insurance recoveries for asbestos related liabilities 411 417
Deferred income taxes 264 347
Other assets 2,194 1,603
Total assets $ $
56,768 54,146
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Accounts payable $ $
6,061 5,690
Commercial paper and other short-term borrowings 3,932 3,366
Current maturities of long-term debt 1,398 227
Accrued liabilities 6,834 7,048
Total current liabilities 18,225 16,331
Long-term debt 11,453 12,182
Deferred income taxes 300 486
Postretirement benefit obligations other than pensions 530 473
Asbestos related liabilities 1,004 1,014
Other liabilities 4,025 4,110
Redeemable noncontrolling interest 3 3
Shareowners' equity 21,228 19,547
Total liabilities, redeemable noncontrolling interest $ $
and shareowners' equity 56,768 54,146
Honeywell International Inc.
Consolidated Statement of Cash Flows (Unaudited)
(Dollars in millions)
Three Months Nine Months Ended
Ended
September 30, September 30,
2017 2016 2017 2016
Cash flows from operating activities:
Net income $ $ $ $
1,365 1,248 4,097 3,801
Less: Net income attributable to the 17 8 31 26
noncontrolling interest
Net income attributable to Honeywell 1,348 1,240 4,066 3,775
Adjustments to reconcile net income
attributable to Honeywell to net
cash provided by operating activities:
Depreciation 180 182 534 546
Amortization 105 78 298 227
(Gain) loss on sale of - (176) - (176)
non-strategic businesses and assets
Repositioning and other charges 230 302 583 567
Net payments for repositioning and (130) (154) (394) (420)
other charges
Pension and other postretirement (189) (153) (562) (471)
income
Pension and other postretirement (24) (29) (71) (110)
benefit payments
Stock compensation expense 39 49 133 145
Deferred income taxes 16 (36) (76) 146
Other (30) (8) (38) (33)
Changes in assets and liabilities,
net of the effects of
acquisitions and divestitures:
Accounts receivable (132) (135) (408) (492)
Inventories (102) (21) (400) (233)
Other current assets 16 138 13 -
Accounts payable 90 (18) 404 (18)
Accrued liabilities (10) 295 (288) 3
Net cash provided by operating activities 1,407 1,554 3,794 3,456
Cash flows from investing activities:
Expenditures for property, plant and (212) (274) (613) (749)
equipment
Proceeds from disposals of property, 21 3 46 4
plant and equipment
Increase in investments (1,820) (1,262) (4,149) (3,083)
Decrease in investments 952 873 2,793 2,658
Cash paid for acquisitions, net of cash (57) (1,484) (72) (2,568)
acquired
Proceeds from sales of businesses, net - 304 - 304
of fees paid
Other (83) 106 (196) 158
Net cash used for investing activities (1,199) (1,734) (2,191) (3,276)
Cash flows from financing activities:
Proceeds from issuance of commercial 3,772 5,455 8,808 16,149
paper and other short-term borrowings
Payments of commercial paper and other (3,773) (3,656) (8,608) (16,574)
short-term borrowings
Proceeds from issuance of common stock 87 143 463 386
Proceeds from issuance of long-term 23 37 39 4,510
debt
Payments of long-term debt (39) (8) (69) (478)
Repurchases of common stock (343) (233) (1,335) (1,866)
Cash dividends paid (505) (453) (1,554) (1,410)
Payments to purchase the noncontrolling - - - (238)
interest
AdvanSix pre-separation funding - 269 - 269
AdvanSix pre-spin borrowing - 38 - 38
AdvanSix cash at spin-off - (38) - (38)
Other (26) (25) (131) (40)
Net cash (used for) provided by financing (804) 1,529 (2,387) 708
activities
Effect of foreign exchange rate changes on 108 37 330 88
cash and cash equivalents
Net (decrease) increase in cash and cash (488) 1,386 (454) 976
equivalents
Cash and cash equivalents at beginning of 7,877 5,045 7,843 5,455
period
Cash and cash equivalents at end of period $ $ $ $
7,389 6,431 7,389 6,431
Honeywell International Inc.
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
(Unaudited)
(Dollars in millions)
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Cash provided by operating $ $ $ $
activities 1,407 1,554 3,794 3,456
Expenditures for property, (212) (274) (613) (749)
plant and equipment
Free cash flow $ $ $ $
1,195 1,280 3,181 2,707
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 Cash Provided by Operating Activities to Free Cash Flow and
Calculation of Free Cash Flow Conversion
(Dollars in millions)
Three Months Ended
September 30,
2017
Cash provided by operating activities $ 1,407
Expenditures for property, plant and equipment (212)
Free cash flow $ 1,195
Cash provided by operating activities $ 1,407
÷ Net income attributable to Honeywell $ 1,348
Operating cash flow conversion 104%
Free cash flow $ 1,195
÷ Net income attributable to Honeywell $ 1,348
Free cash flow conversion % 89%
We define free cash flow as cash provided by operating activities less cash
expenditures for property, plant and equipment.
We define free cash flow conversion as free cash flow divided by net income
attributable to Honeywell.
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
September 30,
2017 2016
Segment Profit $ 1,895 $ 1,720
Stock compensation expense (A) (39) (49)
Repositioning and other (B, C) (244) (290)
Pension ongoing income (A) 183 146
Other postretirement income (A) 6 7
Operating Income $ 1,801 $ 1,534
Segment Profit $ 1,895 $ 1,720
÷ Sales 10,121 9,804
Segment Profit Margin % 18.7% 17.5%
Operating Income $ 1,801 $ 1,534
÷ Sales 10,121 9,804
Operating Income Margin % 17.8% 15.6%
(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.
(C) Included in cost of products and services sold, selling, general and
administrative expenses, and other income/expense.
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 Acqusitions
(Unaudited)
(Dollars in millions)
Three Months Ended
September 30,
2017
Safety and Productivity Solutions
Segment Profit excluding mergers and acquisitions $ 202
÷ Sales excluding mergers and acquisitions $ 1,219
Segment Profit Margin excluding mergers and acquisitions 16.6%
%
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
September 30,
2017
Honeywell
Reported sales % change 3%
Less: Foreign currency translation 1%
Less: Acquisitions and divestitures, net (3)%
Organic sales % change 5%
Aerospace
Reported sales % change 2%
Less: Foreign currency translation 1%
Less: Acquisitions and divestitures, net (3)%
Organic sales % change 4%
Home and Building Technologies
Reported sales % change 3%
Less: Foreign currency translation 1%
Less: Acquisitions and divestitures, net -
Organic sales % change 2%
Performance Materials and Technologies
Reported sales % change (3)%
Less: Foreign currency translation 1%
Less: Acquisitions and divestitures, net (14)%
Organic sales % change 10%
Safety and Productivity Solutions
Reported sales % change 21%
Less: Foreign currency translation 1%
Less: Acquisitions and divestitures, net 17%
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 26% Tax Rate Excluding 3Q17 Additional
Restructuring and 2016 Divestitures (Unaudited)
(Dollars in millions, except per share amounts)
Three Months Ended
September 30,
2017 2016
Income before taxes $ $
1,783 1,632
Taxes at 26% 464 424
Net income at 26% tax rate $ $
1,319 1,208
Less: Net income attributable to the noncontrolling 17 8
interest
Net income attributable to Honeywell at 26% tax rate $ $
1,302 1,200
Weighted average number of shares outstanding - assuming 771.4 774.4
dilution
Earnings per share at 26% tax rate $ $
1.69 1.55
Less: Earnings per share impact attributable to 2016 - 0.04
divestitures (1)
Less: Earnings per share attributable to additional (0.06) -
restructuring (2)
Earnings per share of common stock - assuming dilution,
at 26% tax rate,
excluding additional restructuring and 2016 divestitures $ $
1.75 1.51
Earnings per share of common stock - assuming dilution $ $
1.75 1.60
Less: Earnings per share impact of normalizing to 26% 0.06 0.05
tax rate
Less: Earnings per share impact attributable to 2016 - 0.04
divestitures (1)
Less: Earnings per share attributable to additional (0.06)
restructuring (2)
Earnings per share of common stock - assuming dilution,
at 26% tax rate,
excluding additional restructuring and 2016 divestitures $ $
1.75 1.51
(1) Earnings per share attributable to 2016 divestitures utilizes weighted
average shares of 774.4 million and a
blended tax rate of 32.9% for the three months ended September 30, 2016.
(2) The Company has and continues to have an ongoing level of restructuring
activities, for which there is a
planned amount of restructuring-related charges. For the three months ended
September 30, 2017, the Company
funded approximately $60 million of additional restructuring enabled by a
lower than expected effective tax rate for
the period. We believe that the exclusion of this additional restructuring
provides a more comparable measure of
year-on-year results. Earnings per share attributable to additional
restructuring uses a tax rate of 26% for three
months ended September 30, 2017.
We believe earnings per share adjusted to normalize for the expected effective
tax rate of 26% for the most
recently completed fiscal quarter (as presented in prior guidance for such
quarter) and to exclude the 2016
divestitures 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 TBD $
dilution (EPS) 6.20
Pension mark-to-market expense TBD 0.28
Debt refinancing expense - 0.12
EPS, excluding pension mark-to-market expense and $7.05 - 6.60
debt refinancing expense $7.10
Earnings attributable to 2016 divestitures - (0.14)
EPS, excluding pension mark-to-market expense,
debt refinancing expense and
earnings attributable to 2016 divestitures $7.05 - $
$7.10 6.46
(1) Utilizes weighted average shares of approximately 772 million and an
expected effective tax rate of approximately 22%.
(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
hare 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
October 20, 2017 06:33 ET (10:33 GMT)
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