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HON Honeywell International Incorporated

159.07
0.00 (0.00%)
Last Updated: 00:00:00
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 Final Results

27/01/2017 11:35am

UK Regulatory


 
TIDMHON 
 
Honeywell Reports Strong Finish to 2016 
 
- Fourth-Quarter Growth Led By UOP, Solstice®, And Home And Building 
Technologies 
 
- Strong Fourth-Quarter Segment Margin Expansion Driven By Productivity And 
Repositioning Benefits 
 
- Fourth-Quarter Free Cash Flow Conversion Of 126%(1) 
 
- Full-Year Sales of $39.3 Billion, Up 2%, Driven By Acquisitions 
 
MORRIS PLAINS, N.J., Jan. 27, 2017 -- Honeywell (NYSE: HON) today announced 
results for the fourth quarter and full-year of 2016, and reaffirmed 2017 
earnings guidance. 
 
"We finished 2016 with a strong fourth quarter, achieving 14% earnings growth 
(excluding divestitures and charges for pension mark-to-market and debt 
refinancing), 90 basis points of segment margin expansion excluding M&A, and 
free cash flow conversion of 126%," said Honeywell Chairman and CEO Dave Cote. 
"For the full year, we delivered earnings growth of 8% (excluding charges for 
pension mark-to-market and debt refinancing) and drove strong operational 
segment margin expansion while making significant investments for the future, 
including over $250 million in incremental Aerospace OEM incentives (the 
equivalent of four percentage points of EPS). We funded high-return capital 
projects through more than $1 billion in capital expenditures, marking the 
third consecutive year of reinvesting at over 150% of depreciation, and we 
continued to upgrade our growth profile through acquisitions totaling more than 
$2.5 billion and divestitures with aggregate annual revenues in excess of $1 
billion. To better drive top-line growth and improve our overall 
decision-making speed, we realigned our business segments and funded more than 
$250 million in internal restructuring projects. In addition, our debt 
refinancing will reduce our expected 2017 interest expense by about 8% despite 
increasing total borrowings by $4 billion, and we returned nearly $4.5 billion 
to our shareowners through dividends and share repurchases." 
 
Cote concluded, "We delivered outstanding returns again in 2016 with a total 
shareowner return of 15%, which exceeded the S&P's total shareowner return by 
300 basis points. More importantly, we set the stage for a successful 2017. I 
am confident in our ability to continue to outperform under Darius Adamczyk. It 
has been an honor to lead Honeywell for the past 15 years, and I know that our 
best days are ahead of us." 
 
1 Cash Flow From Operations Less Capital Expenditures; Free Cash Flow 
Conversion = Free Cash Flow / Net Income, Excluding Pension Mark-To-Market 
Adjustment And Debt Refinancing Charges 
 
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 former Resins & Chemicals business 
previously part of Performance Materials and Technologies. 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. 
 
Darius Adamczyk, President and Chief Operating Officer said, "Our business will 
benefit in the future from the investments we made in 2016. All of these 
actions, combined with our focus on enhancing organic growth, and the power of 
our connected businesses, make us optimistic about 2017 and beyond. We are 
reaffirming our 2017 earnings guidance today. As I discussed on our December 
outlook call, Honeywell will continue our focus on driving organic growth and 
margin expansion through new software opportunities, breakthrough initiatives, 
and an improved customer experience. We look forward to discussing this more at 
our annual investor conference on March 1 in New York City." 
 
Honeywell will discuss the results during its investor conference call today 
starting at 9:30 a.m. EST. 
 
Fourth Quarter Performance 
 
Honeywell sales for the fourth quarter were flat on a reported basis and down 
1% on a core organic basis. The difference between reported and core organic 
sales is due to the impact of acquisitions, primarily Elster and Intelligrated, 
partially offset by the spin-off of Resins and Chemicals in Performance 
Materials and Technologies and the divestiture of the Aerospace government 
services business. The fourth-quarter and full-year 2016 financial results can 
be found in Tables 1 and 2 below. 
 
Aerospace sales for the fourth quarter were down 5% on a core organic basis. 
The decrease was primarily driven by lower volumes in Business and General 
Aviation, higher OEM incentives, program completions in U.S. Space and 
International Defense, and continued weakness in the commercial helicopter 
business, as expected. This was partially offset by global gas turbo 
penetration in passenger vehicles in Transportation Systems. Segment margin 
declined 130 bps to 20.2%, due to higher OEM incentives, product mix, and lower 
volumes, partially offset by productivity net of inflation and commercial 
excellence.  Excluding the impact of acquisitions and higher OEM incentives, 
segment margin contracted by 10 basis points. 
 
Home and Building Technologies sales for the fourth quarter were up 2% on a 
core organic basis driven by continued strength in our Building Solutions and 
Distribution businesses, double-digit growth in China and India, and new 
product introductions in Environmental and Energy Solutions. Segment margin 
declined 30 bps to 16.8%, primarily driven by acquisition amortization and 
integration costs. Excluding the impact of acquisitions, segment margin 
expanded 60 basis points driven by benefits from previously-funded 
restructuring and commercial excellence, partially offset by the unfavorable 
impact of higher Distribution sales and growth investments. 
 
Performance Materials and Technologies sales for the fourth quarter were up 5% 
on a core organic basis driven by strong catalyst, licensing, and equipment 
growth in UOP and a continued ramp in Solstice® sales in Advanced Materials. 
Segment margin expanded 520 bps to 25.4%, driven by productivity net of 
inflation, the favorable impact from the spin-off of AdvanSix, higher catalyst 
volumes, and commercial excellence. Excluding the impact of acquisitions, 
segment margin expanded by 560 bps. 
 
Safety and Productivity Solutions sales for the fourth quarter were down 6% on 
a core organic basis as a result of lower volumes in the Productivity and 
Safety businesses and supply chain delays. Segment margin contracted 100 bps to 
14.3%, primarily driven by acquisition amortization and integration costs. 
Excluding the impact of acquisitions, segment margin expanded by 100 bps driven 
by restructuring benefits and commercial excellence, partially offset by lower 
volumes across the portfolio. 
 
To participate in today's conference call, please dial (800) 263-0877 
(domestic) or (719) 457-1036 (international) approximately ten minutes before 
the 9:30 a.m. EST start. Please mention to the operator that you are dialing in 
for Honeywell's fourth quarter 2016 earnings call or provide the conference 
code HON4Q16. 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. EST, January 27, until 12: 
30 p.m. EST, February 3, by dialing (888) 203-1112 (domestic) or (719) 457-0820 
(international). The access code is 2675177. 
 
TABLE 1: SUMMARY OF FINANCIAL RESULTS - TOTAL HONEYWELL 
 
($ Millions, except Earnings Per Share)        FY 2015 FY 2016 Change 
 
Sales                                           38,581  39,302    2% 
 
   Core Organic                                                  (1%) 
 
Segment Margin                                   18.8%   18.3% (50) bps 
 
Ex-M&A                                                          10 bps 
 
Operating Income Margin                          17.7%   17.0% (70) bps 
 
Ex-Pension MTM And Debt Refinancing              17.9%   18.0%  10 bps 
 
Earnings Per Share 
 
Reported                                         $6.04   $6.20    3% 
 
Ex-Pension MTM And Debt Refinancing              $6.10   $6.60    8% 
 
Cash Flow From Operations                        5,519   5,498   Flat 
 
Free Cash Flow2                                  4,446   4,403   (1%) 
 
                                               4Q 2015 4Q 2016 
 
Sales                                            9,982   9,985   Flat 
 
Core Organic                                                     (1%) 
 
Segment Margin                                   18.8%   19.0%  20 bps 
 
Ex-M&A                                                          90 bps 
 
Operating Income Margin                          17.4%   16.2% (120) bps 
 
Ex-Pension MTM And Debt Refinancing              18.0%   20.2%  220 bps 
 
Earnings Per Share 
 
Reported                                         $1.53   $1.34   (12%) 
 
Ex-Pension MTM And Debt Refinancing              $1.58   $1.74    10% 
 
Ex-Divestitures, Pension MTM, Debt Refinancing   $1.53   $1.74    14% 
 
Cash Flow From Operations                        1,963   2,042    4% 
 
Free Cash Flow2                                  1,575   1,696    8% 
 
 
 
 
2 Cash Flow From Operations Less Capital Expenditures 
 
TABLE 2: SUMMARY OF FINANCIAL RESULTS - SEGMENTS 
 
AEROSPACE                              FY 2015 FY 2016 Change 
 
Sales                                   15,237  14,751   (3%) 
 
Segment Profit                           3,218   2,991   (7%) 
 
Segment Margin                           21.1%   20.3% (80) bps 
 
Ex-M&A                                                 (60) bps 
 
                                       4Q 2015 4Q 2016 
 
Sales                                    3,983   3,666   (8%) 
 
Segment Profit                             856     739   (14%) 
 
Segment Margin                           21.5%   20.2% (130) bps 
 
Ex-M&A, Other3                                         (10) bps 
 
HOME AND BUILDING TECHNOLOGIES         FY 2015 FY 2016 Change 
 
Sales                                    9,161  10,654    16% 
 
Segment Profit                           1,512   1,683    11% 
 
Segment Margin                           16.5%   15.8% (70) bps 
 
Ex-M&A                                                  40 bps 
 
                                       4Q 2015 4Q 2016 
 
Sales                                    2,475   2,800    13% 
 
Segment Profit                             424     470    11% 
 
Segment Margin                           17.1%   16.8% (30) bps 
 
Ex-M&A                                                  60 bps 
 
PERFORMANCE MATERIALS AND TECHNOLOGIES FY 2015 FY 2016 Change 
 
Sales                                    9,475   9,272   (2%) 
 
Segment Profit                           1,990   2,050    3% 
 
Segment Margin                           21.0%   22.1%  110 bps 
 
Ex-M&A                                                  150 bps 
 
                                       4Q 2015 4Q 2016 
 
Sales                                    2,338   2,228   (5%) 
 
Segment Profit                             473     566    20% 
 
Segment Margin                           20.2%   25.4%  520 bps 
 
Ex-M&A                                                  560 bps 
 
SAFETY AND PRODUCTIVITY SOLUTIONS      FY 2015 FY 2016 Change 
 
Sales                                    4,708   4,625   (2%) 
 
Segment Profit                             746     680   (9%) 
 
Segment Margin                           15.8%   14.7% (110) bps 
 
Ex-M&A                                                 (40) bps 
 
                                       4Q 2015 4Q 2016 
 
Sales                                    1,186   1,291    9% 
 
Segment Profit                             181     185    2% 
 
Segment Margin                           15.3%   14.3% (100) bps 
 
Ex-M&A                                                  100 bps 
 
 
 
 
3 Excludes $48M Increase In Aero OEM Incentives YoY 
 
Honeywell (http://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. 
 
                                       Honeywell International Inc 
 
                             Consolidated Statement of Operations (Unaudited) 
 
                             (Dollars in millions, except per share amounts) 
 
                                                          Three Months Ended         Twelve Months Ended 
 
                                                             December 31,               December 31, 
 
                                                           2016          2015        2016         2015 
 
Product sales                                         $        7,964  $    7,960  $    31,362  $    30,695 
 
Service sales                                                  2,021       2,022        7,940        7,886 
 
Net sales                                                      9,985       9,982       39,302       38,581 
 
Costs, expenses and other 
 
    Cost of products sold  (A)                                 5,625       5,649       22,170       21,775 
 
    Cost of services sold  (A)                                 1,254       1,268        4,980        4,972 
 
                                                               6,879       6,917       27,150       26,747 
 
    Selling, general and administrative expenses (A)           1,493       1,332        5,469        5,006 
 
    Other (income) expense                                        95         (4)        (102)         (68) 
 
    Interest and other financial charges                          86          84          338          310 
 
                                                               8,553       8,329       32,855       31,995 
 
Income before taxes                                            1,432       1,653        6,447        6,586 
 
Tax expense                                                      387         450        1,601        1,739 
 
Net income                                                     1,045       1,203        4,846        4,847 
 
Less: Net income attributable to the noncontrolling               11           9           37           79 
interest 
 
Net income attributable to Honeywell                  $        1,034  $    1,194        $            $ 
                                                                                        4,809        4,768 
 
Earnings per share of common stock - basic                 $               $          $            $ 
                                                                1.36        1.55         6.29         6.11 
 
Earnings per share of common stock - assuming              $               $          $            $ 
dilution                                                        1.34        1.53         6.20         6.04 
 
Weighted average number of shares outstanding - basic          762.4       771.8        764.3        779.8 
 
Weighted average number of shares outstanding -                772.3       780.8        775.3        789.3 
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. 
 
 
 
Below is a reconciliation of earnings per share to earnings per share, 
excluding pension mark-to-market expense, debt refinancing expense and earnings 
attributable to 2016 divestitures.  We believe this measure is useful to 
investors and management in understanding our ongoing operations and in 
analysis of ongoing operating trends. Earnings per share utilizes weighted 
average number of shares outstanding, assuming dilution, for the period. 
 
                                   Three Months Ended           Twelve Months Ended 
 
                                      December 31,                  December 31, 
 
                                   2016           2015          2016           2015 
 
 Earnings per share of common $          1.34  $      1.53  $        6.20  $        6.04 
 stock - assuming dilution 
 
 Pension mark-to-market                  0.28         0.05           0.28           0.06 
 expense (1) 
 
 Debt refinancing expense (2)            0.12            -           0.12              - 
 
 Earnings per share of common 
 stock - assuming dilution, 
 excluding pension 
 
 mark-to-market expense and   $          1.74  $      1.58  $        6.60  $        6.10 
 debt refinancing expense 
 
 Earnings attributable to                   -       (0.05)         (0.14)         (0.19) 
 2016 Divestitures (3) 
 
 Earnings per share of common 
 stock - assuming dilution, 
 excluding pension 
 
 mark-to-market expense, debt $          1.74  $      1.53  $        6.46  $        5.91 
 refinancing expense, and 
 2016 divestitures 
 
 (1) Pension mark-to-market expense uses a blended tax rate of 21.3% and 36.1% 
 for 2016 and 2015. 
 
 (2) Debt refinancing expense uses a tax rate of 26.5% for 2016. 
 
 (3) Earnings attributable to 2016 divestitures use a blended tax rate of 30.8% 
 for three months ended December 31, 2015, 33.9% for 2016 and 33.2% for 2015. 
 
 
 
                                        Honeywell International Inc 
 
                                          Segment Data (Unaudited) 
 
                                           (Dollars in millions) 
 
                                                  Three Months Ended               Twelve Months Ended 
 
                                                     December 31,                      December 31, 
 
Net Sales                                      2016              2015              2016            2015 
 
Aerospace                                  $        3,666     $        3,983    $     14,751    $     15,237 
 
Home and Building Technologies                      2,800              2,475          10,654           9,161 
 
Performance Materials and Technologies              2,228              2,338           9,272           9,475 
 
Safety and Productivity Solutions                   1,291              1,186           4,625           4,708 
 
Corporate                                               -                  -               -               - 
 
     Total                                 $        9,985     $        9,982    $     39,302    $     38,581 
 
                          Reconciliation of Segment Profit to Income Before Taxes 
 
                                                  Three Months Ended               Twelve Months Ended 
 
                                                     December 31,                      December 31, 
 
Segment Profit                                 2016              2015              2016            2015 
 
Aerospace                                 $           739    $           856  $        2,991  $        3,218 
 
Home and Building Technologies                        470                424           1,683           1,512 
 
Performance Materials and Technologies                566                473           2,050           1,990 
 
Safety and Productivity Solutions                     185                181             680             746 
 
Corporate                                            (61)               (54)           (218)           (210) 
 
     Total segment profit                           1,899              1,880           7,186           7,256 
 
Other income (expense) (A)                          (103)                (1)              71              38 
 
Interest and other financial charges                 (86)               (84)           (338)           (310) 
 
Stock compensation expense (B)                       (39)               (43)           (184)           (175) 
 
Pension ongoing income (B)                            154                131             601             430 
 
Pension mark-to-market expense (B)                  (273)               (67)           (273)            (67) 
 
Other postretirement income (expense) (B)               8               (10)              32            (40) 
 
Repositioning and other charges (B)                 (128)              (153)           (648)           (546) 
 
Income before taxes                        $        1,432     $        1,653  $        6,447  $        6,586 
 
(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) 
 
                                                                                   December 31,  December 31, 
 
                                                                                       2016          2015 
 
ASSETS 
 
Current assets: 
 
    Cash and cash equivalents                                                           $             $ 
                                                                                          7,843         5,455 
 
    Accounts, notes and other receivables                                                 8,818         8,075 
 
    Inventories                                                                           4,366         4,420 
 
    Investments and other current assets                                                  2,031         2,103 
 
    Total current assets                                                                 23,058        20,053 
 
Investments and long-term receivables                                                       587           517 
 
Property, plant and equipment - net                                                       5,793         5,789 
 
Goodwill                                                                                 17,707        15,895 
 
Other intangible assets - net                                                             4,634         4,577 
 
Insurance recoveries for asbestos related liabilities                                       417           426 
 
Deferred income taxes                                                                       347           283 
 
Other assets                                                                              1,603         1,776 
 
    Total assets                                                                   $     54,146  $     49,316 
 
LIABILITIES AND SHAREOWNERS' EQUITY 
 
Current liabilities: 
 
    Accounts payable                                                                    $             $ 
                                                                                          5,690         5,580 
 
    Commercial paper and other short-term borrowings                                      3,366         5,937 
 
    Current maturities of long-term debt                                                    227           577 
 
    Accrued liabilities                                                                   7,048         6,277 
 
    Total current liabilities                                                            16,331        18,371 
 
Long-term debt                                                                           12,182         5,554 
 
Deferred income taxes                                                                       486           558 
 
Postretirement benefit obligations other than pensions                                      473           526 
 
Asbestos related liabilities                                                              1,014         1,251 
 
Other liabilities                                                                         4,110         4,348 
 
Redeemable noncontrolling interest                                                            3           290 
 
Shareowners' equity                                                                      19,547        18,418 
 
    Total liabilities, redeemable noncontrolling interest and shareowners'         $     54,146  $     49,316 
 equity 
 
 
 
                                           Honeywell International Inc 
 
                                 Consolidated Statement of Cash Flows (Unaudited) 
 
                                              (Dollars in millions) 
 
                                                                          Three Months Ended  Twelve Months Ended 
 
                                                                             December 31,         December 31, 
 
                                                                           2016       2015      2016       2015 
 
Cash flows from operating activities: 
 
    Net income                                                            $ 1,045    $ 1,203  $   4,846  $   4,847 
 
    Less: Net income attributable to the noncontrolling interest               11          9         37         79 
 
    Net income attributable to Honeywell                                    1,034      1,194      4,809      4,768 
 
    Adjustments to reconcile net income attributable to Honeywell to net 
 
    cash provided by operating activities: 
 
        Depreciation                                                          180        169        726        672 
 
        Amortization                                                           77         53        304        211 
 
        (Gain) loss on sale of non-strategic businesses and assets            (2)          2      (178)          1 
 
        Repositioning and other charges                                       128        153        695        546 
 
        Net payments for repositioning and other charges                    (205)      (208)      (625)      (537) 
 
        Pension and other postretirement expense (income)                     111       (54)      (360)      (323) 
 
        Pension and other postretirement benefit payments                    (33)       (38)      (143)      (122) 
 
        Stock compensation expense                                             39         43        184        175 
 
        Deferred income taxes                                                (70)         31         76        315 
 
        Excess tax benefits from share based payment arrangements               -       (12)          -       (81) 
 
        Other                                                                 227       (94)        194         57 
 
        Changes in assets and liabilities, net of the effects of 
 
        acquisitions and divestitures: 
 
           Accounts, notes and other receivables                            (200)        159      (770)        211 
 
           Inventories                                                        215        250       (18)        230 
 
           Other current assets                                                39        191        117         80 
 
           Accounts payable                                                   272        (4)        254       (17) 
 
           Accrued liabilities                                                230        128        233      (667) 
 
Net cash provided by operating activities                                   2,042      1,963      5,498      5,519 
 
Cash flows from investing activities: 
 
    Expenditures for property, plant and equipment                          (346)      (388)    (1,095)    (1,073) 
 
    Proceeds from disposals of property, plant and equipment                   17         12         21         15 
 
    Increase in investments                                                 (871)    (1,013)    (3,954)    (6,714) 
 
    Decrease in investments                                                 1,023      2,537      3,681      6,587 
 
    Cash paid for acquisitions, net of cash acquired                          (5)    (5,043)    (2,573)    (5,228) 
 
    Proceeds from sales of businesses, net of fees paid                       (8)        (2)        296          1 
 
    Other                                                                     124       (33)        282      (102) 
 
Net cash used for investing activities                                       (66)    (3,930)    (3,342)    (6,514) 
 
Cash flows from financing activities: 
 
    Net increase (decrease) in commercial paper and other short-term      (2,039)      2,254    (2,464)      4,265 
borrowings 
 
    Proceeds from issuance of common stock                                     23         36        409        186 
 
    Proceeds from issuance of long-term debt                                4,735         12      9,245         60 
 
    Payments of long-term debt                                            (2,361)      (732)    (2,839)      (880) 
 
    Excess tax benefits from share based payment arrangements                   -         12          -         81 
 
    Repurchases of common stock                                             (213)      (163)    (2,079)    (1,884) 
 
    Cash dividends paid                                                     (505)      (465)    (1,915)    (1,726) 
 
    Payments to purchase the noncontrolling interest                            -          -      (238)          - 
 
    AdvanSix pre-separation funding                                             -          -        269          - 
 
    AdvanSix pre-spin borrowing                                                 -          -         38          - 
 
    AdvanSix cash at spin-off                                                   -          -       (38)          - 
 
    Other                                                                     (2)        (4)       (42)       (65) 
 
Net cash provided by (used for) financing activities                        (362)        950        346         37 
 
Effect of foreign exchange rate changes on cash and cash equivalents        (202)       (91)      (114)      (546) 
 
Net increase (decrease) in cash and cash equivalents                        1,412    (1,108)      2,388    (1,504) 
 
Cash and cash equivalents at beginning of period                            6,431      6,563      5,455      6,959 
 
Cash and cash equivalents at end of period                                $ 7,843    $ 5,455  $   7,843  $   5,455 
 
 
 
                                                                  Honeywell International Inc 
 
                                         Reconciliation of Cash Provided by Operating Activities to Free Cash Flow and 
                                                     Calculation of Free Cash Flow Conversion (Unaudited) 
 
                                                                     (Dollars in millions) 
 
                                                                                          Three Months Ended                      Twelve Months Ended 
 
                                                                                             December 31,                            December 31, 
 
                                                                                       2016                2015                2016                2015 
 
Cash provided by operating activities                                           $            2,042  $            1,963  $            5,498  $            5,519 
 
Expenditures for property, plant and equipment                                               (346)               (388)             (1,095)             (1,073) 
 
Free cash flow                                                                  $            1,696  $            1,575  $            4,403  $            4,446 
 
Net income, attributable to Honeywell                                           $            1,034  $            1,194  $            4,809  $            4,768 
 
Pension mark-to-market expense, net of tax (A)                                                 215                  43                 215                  43 
 
Debt refinancing expense (B)                                                                    93                   -                  93                   - 
 
Net income, attributable to Honeywell, excluding pension mark-to-market expense 
 
    and debt refinancing expense                                                $            1,342  $            1,237  $            5,117  $            4,811 
 
Cash provided by operating activities                                           $            2,042  $            1,963  $            5,498  $            5,519 
 
÷ Net income attributable to Honeywell                                          $            1,034  $            1,194  $            4,809  $            4,768 
 
Operating cash flow conversion                                                                197%                164%                114%                116% 
 
Free cash flow                                                                  $            1,696  $            1,575  $            4,403  $            4,446 
 
Net income, attributable to Honeywell, excluding pension mark-to-market expense 
 
    and debt refinancing expense                                                $            1,342  $            1,237  $            5,117  $            4,811 
 
Free cash flow conversion                                                                     126%                127%                 86%                 92% 
 
(A) Pension mark-to-market expense uses a blended tax rate of 21.3% and 36.1% 
for 2016 and 2015. 
 
(B) Debt refinancing expense uses a tax rate of 26.5% for 2016. 
 
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             Twelve Months Ended 
 
                                                                     December 31,                   December 31, 
 
                                                                  2016           2015           2016            2015 
 
Segment Profit                                                $       1,899  $      1,880  $        7,186  $        7,256 
 
Stock compensation expense (A)                                         (39)          (43)           (184)           (175) 
 
Repositioning and other (A, B)                                        (136)         (158)           (679)           (576) 
 
Pension ongoing income (A)                                              154           131             601             430 
 
Pension mark-to-market expense (A)                                    (273)          (67)           (273)            (67) 
 
Other postretirement income (expense) (A)                                 8          (10)              32            (40) 
 
Operating Income                                              $       1,613  $      1,733  $        6,683  $        6,828 
 
Pension mark-to-market adjustment (A)                                 (273)          (67)           (273)            (67) 
 
Debt refinancing expense                                              (126)             -           (126)               - 
 
Operating Income excluding pension mark-to-market adjustment 
 
   and debt refinancing expense                               $       2,012  $      1,800  $        7,082  $        6,895 
 
Segment Profit                                                $       1,899  $      1,880  $        7,186  $        7,256 
 
÷ Sales                                                               9,985         9,982          39,302          38,581 
 
Segment Profit Margin %                                               19.0%         18.8%           18.3%           18.8% 
 
Operating Income                                              $       1,613  $      1,733  $        6,683  $        6,828 
 
÷ Sales                                                               9,985         9,982          39,302          38,581 
 
Operating Income Margin %                                             16.2%         17.4%           17.0%           17.7% 
 
Operating Income excluding pension mark-to-market adjustment 
 
   and debt refinancing expense                               $       2,012  $      1,800  $        7,082  $        6,895 
 
÷ Sales                                                               9,985         9,982          39,302          38,581 
 
Operating Income excluding pension mark-to-market adjustment 
 
   and debt refinancing expense %                                     20.2%         18.0%           18.0%           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 
 
    Calculation of Segment Profit Margin Excluding Mergers and Acqusitions 
                                  (Unaudited) 
 
                             (Dollars in millions) 
 
                                                             Three Months Ended 
 
                                                                December 31 
 
                                                                   2016 
 
Honeywell 
 
Segment Profit excluding mergers and acquisitions                  $ 
                                                                         1,833 
 
÷ Sales excluding mergers and acquisitions                         $ 
                                                                         9,284 
 
Segment Profit Margin excluding mergers and acquisitions %         19.7% 
 
Aerospace (1) 
 
Segment Profit excluding mergers and acquisitions and other    $ 
                                                                           786 
 
÷ Sales excluding mergers and acquisitions and other             $ 
                                                                         3,677 
 
Segment Profit Margin excluding mergers and acquisitions           21.4% 
and other % 
 
Home and Building Technologies 
 
Segment Profit excluding mergers and acquisitions              $ 
                                                                           436 
 
÷ Sales excluding mergers and acquisitions                       $ 
                                                                         2,463 
 
Segment Profit Margin excluding mergers and acquisitions %         17.7% 
 
Performance Materials and Technologies 
 
Segment Profit excluding mergers and acquisitions              $ 
                                                                           540 
 
÷ Sales excluding mergers and acquisitions                       $ 
                                                                         2,093 
 
Segment Profit Margin excluding mergers and acquisitions %         25.8% 
 
Safety and Productivity Solutions 
 
Segment Profit excluding mergers and acquisitions              $ 
                                                                           180 
 
÷ Sales excluding mergers and acquisitions                       $ 
                                                                         1,105 
 
Segment Profit Margin excluding mergers and acquisitions %         16.3% 
 
(1) Other includes year-over-year incremental OEM 
incentives 
 
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) 
 
                                                           Twelve Months Ended 
 
                                                              December 31 
 
                                                                  2016 
 
Honeywell 
 
Segment Profit excluding mergers and acquisitions         $              6,980 
 
÷ Sales excluding mergers and acquisitions                 $            37,023 
 
Segment Profit Margin excluding mergers and acquisitions         18.9% 
% 
 
Aerospace 
 
Segment Profit excluding mergers and acquisitions         $              2,992 
 
÷ Sales excluding mergers and acquisitions                 $            14,590 
 
Segment Profit Margin excluding mergers and acquisitions         20.5% 
% 
 
Home and Building Technologies 
 
Segment Profit excluding mergers and acquisitions         $              1,588 
 
÷ Sales excluding mergers and acquisitions                $              9,374 
 
Segment Profit Margin excluding mergers and acquisitions         16.9% 
% 
 
Performance Materials and Technologies 
 
Segment Profit excluding mergers and acquisitions         $              1,959 
 
÷ Sales excluding mergers and acquisitions                $              8,721 
 
Segment Profit Margin excluding mergers and acquisitions         22.5% 
% 
 
Safety and Productivity Solutions 
 
Segment Profit excluding mergers and acquisitions            $ 
                                                                           670 
 
÷ Sales excluding mergers and acquisitions                $              4,338 
 
Segment Profit Margin excluding mergers and acquisitions         15.4% 
% 
 
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 Core Organic Sales Growth (Unaudited) 
 
                                                   Three Months   Twelve Months 
                                                      Ended          Ended 
 
                                                   December 31,   December 31, 
 
                                                       2016           2016 
 
Honeywell 
 
Reported sales growth                                   -              2% 
 
Less: Foreign currency translation, acquisitions,       1%             3% 
divestitures and other 
 
Less: Raw materials pricing in R&C                      -              - 
 
Core organic sales growth                              (1%)           (1%) 
 
Performance Materials and Technologies 
 
Reported sales growth                                  (5%)           (2%) 
 
Less: Foreign currency translation, acquisitions,     (10%)            1% 
divestitures and other 
 
Less: Raw materials pricing in R&C                      -             (1%) 
 
Core organic sales growth                               5%            (2%) 
 
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 former Resins & Chemicals business 
previously part of Performance Materials and Technologies. 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. 
 
 
 
Contacts: 
 
Media                      Investor Relations 
 
Robert C. Ferris           Mark Macaluso 
 
(973) 455-3388             (973) 455-2222 
 
rob.ferris@honeywell.com   mark.macaluso@honeywell.com 
 
 
 
END 
 

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January 27, 2017 06:35 ET (11:35 GMT)

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