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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 $1.80 Earnings Per Share; Sales of $10.1 Billion Exceeds
Guidance
- Reported Sales Up 1%, Organic Sales Up Over 3% Driven By Performance In
Aerospace Aftermarket, Advanced Materials, And Home And Building Products
- Invested More Than $115 Million In Restructuring Projects To Drive Growth And
Productivity
- Year-To-Date Operating Cash Flow Up 25% And Free Cash Flow Up 39%
- Raising Full-Year Sales Guidance; Raising Low-End Of 2017 EPS Guidance By 10
Cents To $7.00 - $7.10
MORRIS PLAINS, N.J., July 21, 2017 -- Honeywell (NYSE: HON) today announced
financial results for the second quarter of 2017 and updated its full-year 2017
sales and earnings guidance.
"Honeywell's strong performance continued through the second quarter, with over
3% organic sales growth that exceeded the high end of our guidance range, and
50 basis points of segment margin expansion, resulting in second-quarter
earnings per share of $1.80," said Darius Adamczyk, President and Chief
Executive Officer of Honeywell. "Earnings came in at the high end of our
guidance range, up 10%? year-over-year. We continued our investments to enhance
future profitable growth through new product introductions, additions to the
sales organization, and more than $115 million of restructuring funding in the
quarter, made possible by a lower-than-planned tax rate. Quarterly free cash
flow of $1.2 billion was impacted by the timing of cash tax payments, and our
first-half performance remained strong with nearly 40% growth in free cash flow
year-over-year."
"Previous investments in production capacity are driving top-line growth. For
example, our newly completed facilities within Performance Materials and
Technologies are contributing to double-digit growth for our Solstice® line of
low-global-warming products and strong orders, sales, and backlog growth in
UOP," continued Adamczyk. "We are also pleased with the continued strength in
Aerospace Commercial Aftermarket and in Safety and Productivity Solutions,
where we continue to see strong demand for safety products and voice-enabled
workflow solutions."
"We expect continued momentum in organic sales growth throughout 2017,
supported by strong order rates and a growing backlog across many of our
businesses," said Adamczyk. "Our focus on delivering organic growth while
maintaining productivity rigor and aggressively deploying capital, combined
with our efforts to evolve as a world-class software-industrial company, is
delivering results for our shareowners."
"We are increasing our full-year reported and organic sales guidance and
raising the low end of our full-year earnings guidance by 10 cents. We now
anticipate 2017 earnings per share to be between $7.00 and $7.10, up 8%-10%,
excluding divestitures, any pension mark-to-market adjustments, and 2016 debt
refinancing charges. We also now expect full-year sales to be between $39.3
billion and $40.0 billion, up 2%-4% organic," Adamczyk concluded.
Honeywell will discuss the results during its investor conference call today
starting at 9:30 a.m. Eastern Daylight Time.
Second Quarter Performance
Honeywell sales for the second quarter were up over 3% on an organic basis and
up 1% on a reported basis. The difference between reported and organic sales is
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 the Intelligrated acquisition in Safety and Productivity Solutions.
The second-quarter financial results can be found in Tables 1 and 2, and
updated full-year guidance can be found in Table 3, below.
Aerospace sales for the second quarter were up 2% on an organic basis driven by
strength in Commercial Aftermarket, growth in U.S. defense, and a continuing
recovery in commercial vehicles in Transportation Systems. Segment margin
expanded 140 bps to 22.3%, primarily driven by higher volumes, productivity net
of inflation, and the favorable impact of the 2016 divestiture of the
government services business.
Home and Building Technologies sales for the second quarter were up 4% 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 was unchanged at 15.4%, driven by restructuring benefits and
productivity net of inflation, offset by the unfavorable impact of higher sales
from lower margin products and investments for growth.
Performance Materials and Technologies sales for the second quarter were up 6%
on an organic basis driven by continued strength in Solstice® sales in Advanced
Materials and double-digit growth in modular gas processing in UOP. Segment
margin expanded 200 bps to 23.4%, primarily driven by productivity net of
inflation, the favorable impact from the spin-off of the former Resins and
Chemicals business, and commercial excellence.
Safety and Productivity Solutions sales for the second quarter were up 1% on an
organic basis as a result of higher volumes in industrial safety products,
sensing controls, and voice-enabled workflow solutions. Segment margin
contracted 70 bps to 15.0%, primarily driven by acquisition amortization and
integration costs, and investments for growth. Excluding the impact of
acquisitions, segment margin expanded 90 bps driven primarily by restructuring
benefits and productivity net of inflation.
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. EDT start. Please mention to the operator that you are dialing in
for Honeywell's second quarter 2017 earnings call or provide the conference
code HON2Q17. 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, July 21, until 1:30
p.m. EDT, July 28, by dialing (888) 203-1112 (domestic) or (719) 457-0820
(international). The access code is 8469822.
TABLE 1: SUMMARY OF FINANCIAL RESULTS - TOTAL HONEYWELL
2Q 2Q Change
2016 2017
Sales 9,991 10,078 1%
Organic 3%
Segment Margin 18.5% 19.0% 50 bps
Operating Income Margin 18.4% 18.3% (10)
bps
Earnings Per Share
Reported $1.70 $1.80 6%
Ex-Divestitures & Additional 2Q17 Restructuring, $1.64 $1.80 10%
Normalized for Tax
Cash Flow From Operations? 1,583 1,447 (9%)
Free Cash Flow?,? 1,302 1,214 (7%)
TABLE 2: SUMMARY OF FINANCIAL RESULTS - SEGMENTS
AEROSPACE 2Q 2016 2Q 2017 Change
Sales 3,779 3,674 (3%)
Organic 2%
Segment Profit 791 819 4%
Segment Margin 20.9% 22.3% 140 bps
HOME AND BUILDING TECHNOLOGIES
Sales 2,676 2,736 2%
Organic 4%
Segment Profit 412 420 2%
Segment Margin 15.4% 15.4% Flat
PERFORMANCE MATERIALS AND TECHNOLOGIES
Sales 2,434 2,239 (8%)
Organic 6%
Segment Profit 520 524 1%
Segment Margin 21.4% 23.4% 200 bps
SAFETY AND PRODUCTIVITY SOLUTIONS
Sales 1,102 1,429 30%
Organic 1%
Segment Profit 173 214 24%
Segment Margin 15.7% 15.0% (70) bps
Ex-M&A 90 bps
TABLE 3: 2017 FULL-YEAR GUIDANCE
Previous Current Change vs.
Guidance Guidance 2016
Sales $38.6 - $39.3 - Flat - 2%
$39.5 $40.0
Organic 2% - 4%
Segment Margin 19.0% - 19.0% - 70 - 110
19.4% 19.4% bps
Earnings Per Share $6.90 - $7.00 - 8% - 10%
(Ex-Divestitures, 2016 Debt Refinancing, $7.10 $7.10
And Pension MTM)
Free Cash Flow? $4.6B - $4.6B - 5% - 7%
$4.7B $4.7B
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. 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.
?Earnings per share variance excludes 2016 divestitures and $90 million
additional 2Q17 restructuring funding enabled by a lower than planned effective
tax rate, normalized for tax at 25%
?Includes $0.2B Impact Of Cash Tax Payment Timing
?Cash Flow From Operations Less Capital Expenditures
?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 Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Product sales $ 8,079 $ $ 15,619 $ 15,654
8,035
Service sales 1,999 1,956 3,951 3,859
Net sales 10,078 9,991 19,570 19,513
Costs, expenses and other
Cost of products 5,660 5,602 10,897 10,951
sold (A)
Cost of services 1,190 1,219 2,309 2,417
sold (A)
6,850 6,821 13,206 13,368
Selling, general and 1,381 1,329 2,730 2,609
administrative expenses
(A)
Other (income) (10) 1 (22) (17)
expense
Interest and other 79 85 154 170
financial charges
8,300 8,236 16,068 16,130
Income before taxes 1,778 1,755 3,502 3,383
Tax expense 378 428 770 830
Net income 1,400 1,327 2,732 2,553
Less: Net income 8 8 14 18
attributable to the
noncontrolling interest
Net income attributable $ 1,392 $ $ 2,718 $ 2,535
to Honeywell 1,319
Earnings per share of $ 1.82 $ $ 3.56 $ 3.31
common stock - basic 1.73
Earnings per share of $ 1.80 $ $ 3.51 $ 3.26
common stock - assuming 1.70
dilution
Weighted average number 764.2 763.3 763.6 765.5
of shares outstanding -
basic
Weighted average number 774.0 774.9 774.0 777.2
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 Six Months Ended
June 30, June 30,
Net Sales 2017 2016 2017 2016
Aerospace $ $ $ $
3,674 3,779 7,220 7,484
Home and Building 2,736 2,676 5,289 5,153
Technologies
Performance Materials 2,239 2,434 4,308 4,715
and Technologies
Safety and Productivity 1,429 1,102 2,753 2,161
Solutions
Total $ 10,078 $ $ $
9,991 19,570 19,513
Reconciliation of Segment Profit to Income Before Taxes
Three Months Ended Six Months Ended
June 30, June 30,
Segment Profit 2017 2016 2017 2016
Aerospace $ $ $ $
819 791 1,615 1,589
Home and Building 420 412 809 772
Technologies
Performance Materials 524 520 995 981
and Technologies
Safety and Productivity 214 173 408 323
Solutions
Corporate (67) (49) (128) (98)
Total segment 1,910 1,847 3,699 3,567
profit
Other income (expense) (1) (7) 5 5
(A)
Interest and other (79) (85) (154) (170)
financial charges
Stock compensation (44) (43) (94) (96)
expense (B)
Pension ongoing income 184 151 363 301
(B)
Other postretirement 6 8 10 17
income (B)
Repositioning and other (198) (116) (327) (241)
charges (B)
Income before taxes $ $ $ $
1,778 1,755 3,502 3,383
(A) Equity income (loss) of affiliated companies is included in segment
profit.
(B) Amounts included in cost of products and services sold and selling,
general and administrative expenses.
Honeywell International Inc
Consolidated Balance Sheet (Unaudited)
(Dollars in millions)
June 30, December
31,
2017 2016
ASSETS
Current assets:
Cash and cash equivalents $ $
7,877 7,843
Short-term investments 1,944 1,520
Accounts receivable - net 8,442 8,177
Inventories 4,651 4,366
Other current assets 1,150 1,152
Total current assets 24,064 23,058
Investments and long-term receivables 570 587
Property, plant and equipment - net 5,718 5,793
Goodwill 18,038 17,707
Other intangible assets - net 4,566 4,634
Insurance recoveries for asbestos related liabilities 401 417
Deferred income taxes 357 347
Other assets 1,954 1,603
Total assets $ $
55,668 54,146
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Accounts payable $ $
5,971 5,690
Commercial paper and other short-term borrowings 3,803 3,366
Current maturities of long-term debt 1,378 227
Accrued liabilities 6,829 7,048
Total current liabilities 17,981 16,331
Long-term debt 11,329 12,182
Deferred income taxes 329 486
Postretirement benefit obligations other than pensions 537 473
Asbestos related liabilities 998 1,014
Other liabilities 3,941 4,110
Redeemable noncontrolling interest 3 3
Shareowners' equity 20,550 19,547
Total liabilities, redeemable noncontrolling $ $
interest and shareowners' equity 55,668 54,146
Honeywell International Inc
Consolidated Statement of Cash Flows (Unaudited)
(Dollars in millions)
Three Months Six Months Ended
Ended
June 30, June 30,
2017 2016 2017 2016
Cash flows from operating activities:
Net income $ 1,400 $ 1,327 $ $
2,732 2,553
Less: Net income attributable to the 8 8 14 18
noncontrolling interest
Net income attributable to Honeywell 1,392 1,319 2,718 2,535
Adjustments to reconcile net income
attributable to Honeywell to net
cash provided by operating activities:
Depreciation 184 185 354 364
Amortization 92 75 193 149
Repositioning and other charges 224 140 353 265
Net payments for repositioning and (127) (132) (264) (266)
other charges
Pension and other postretirement (190) (159) (373) (318)
income
Pension and other postretirement (23) (43) (47) (81)
benefit payments
Stock compensation expense 44 43 94 96
Deferred income taxes (50) 134 (92) 182
Other (22) (113) (8) (25)
Changes in assets and liabilities,
net of the effects of
acquisitions and divestitures:
Accounts receivable (299) (149) (276) (357)
Inventories (12) 29 (298) (212)
Other current assets 22 (84) (3) (138)
Accounts payable 199 113 314 -
Accrued liabilities 13 225 (278) (292)
Net cash provided by operating activities 1,447 1,583 2,387 1,902
Cash flows from investing activities:
Expenditures for property, plant and (233) (281) (401) (475)
equipment
Proceeds from disposals of property, 1 - 25 1
plant and equipment
Increase in investments (1,073) (985) (2,329) (1,821)
Decrease in investments 1,016 905 1,841 1,785
Cash paid for acquisitions, net of (15) (28) (15) (1,084)
cash acquired
Other (84) 43 (113) 52
Net cash used for investing activities (388) (346) (992) (1,542)
Cash flows from financing activities:
Proceeds from issuance of commercial 2,568 4,394 5,036 10,694
paper and other short-term borrowings
Payments of commercial paper and other (2,368) (4,168) (4,835) (12,918)
short-term borrowings
Proceeds from issuance of common stock 155 138 376 243
Proceeds from issuance of long-term 5 25 16 4,473
debt
Payments of long-term debt (25) (51) (30) (470)
Repurchases of common stock (682) (477) (992) (1,633)
Cash dividends paid (546) (458) (1,049) (957)
Payments to purchase the - - - (238)
noncontrolling interest
Other (72) (1) (105) (15)
Net cash used for financing activities (965) (598) (1,583) (821)
Effect of foreign exchange rate changes on 73 (67) 222 51
cash and cash equivalents
Net decrease in cash and cash equivalents 167 572 34 (410)
Cash and cash equivalents at beginning of 7,710 4,473 7,843 5,455
period
Cash and cash equivalents at end of period $ 7,877 $ 5,045 $ $
7,877 5,045
Honeywell International Inc
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
(Unaudited)
(Dollars in millions)
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Cash provided by operating $ $ $ $
activities 1,447 1,583 2,387 1,902
Expenditures for property, (233) (281) (401) (475)
plant and equipment
Free cash flow $ $ $ $
1,214 1,302 1,986 1,427
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 Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Segment Profit $ $ $ $
1,910 1,847 3,699 3,567
Stock compensation expense (44) (43) (94) (96)
(A)
Repositioning and other (209) (122) (344) (253)
(A, B)
Pension ongoing income (A) 184 151 363 301
Other postretirement 6 8 10 17
income (A)
Operating Income $ $ $ $
1,847 1,841 3,634 3,536
Segment Profit $ $ $ $
1,910 1,847 3,699 3,567
÷ Sales 10,078 9,991 19,570 19,513
Segment Profit Margin % 19.0% 18.5% 18.9% 18.3%
Operating Income $ $ $ $
1,847 1,841 3,634 3,536
÷ Sales 10,078 9,991 19,570 19,513
Operating Income Margin % 18.3% 18.4% 18.6% 18.1%
(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
June 30,
2017
Safety and Productivity Solutions
Segment Profit excluding mergers and acquisitions $ 182
÷ Sales excluding mergers and acquisitions $ 1,096
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
June 30,
2017
Honeywell
Reported sales % change 1%
Less: Foreign currency translation (1)%
Less: Acquisitions and divestitures, net (1)%
Organic sales % change 3%
Aerospace
Reported sales % change (3)%
Less: Foreign currency translation (1)%
Less: Acquisitions and divestitures, net (4)%
Organic sales % change 2%
Home and Building Technologies
Reported sales % change 2%
Less: Foreign currency translation (2)%
Less: Acquisitions and divestitures, net -
Organic sales % change 4%
Performance Materials and Technologies
Reported sales % change (8)%
Less: Foreign currency translation (1)%
Less: Acquisitions and divestitures, net (13)%
Organic sales % change 6%
Safety and Productivity Solutions
Reported sales % change 30%
Less: Foreign currency translation (1)%
Less: Acquisitions and divestitures, net 30%
Organic sales % change 1%
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.
A quantitative reconciliation of reported sales percent change to organic
sales percent change has not been provided for forward-looking measures of
organic sales percent
change because management cannot reliably predict or estimate, without
unreasonable effort, the fluctuations in global currency markets that impact
foreign currency translation,
nor is it reasonable for management to predict the timing, occurrence and
impact of acquisition and divestiture transactions, all of which could
significantly impact our reported sales percent change.
Honeywell International Inc
Calculation of Earnings Per Share at 25% Tax Rate Excluding Additional
Restructuring and 2016 Divestitures (Unaudited)
(Dollars in millions, except per share amounts)
Three Months Ended
June 30,
2017 2016
Income before taxes $ $
1,778 1,755
Taxes at 25% 445 439
Net income at 25% tax rate $ $
1,333 1,316
Less: Net income attributable to the noncontrolling 8 8
interest
Net income attributable to Honeywell at 25% tax rate $ $
1,325 1,308
Weighted average number of shares outstanding - assuming 774.0 774.9
dilution
Earnings per share at 25% tax rate $ $
1.71 1.69
Less: Earnings per share attributable to 2016 - 0.05
divestitures (1)
Less: Earnings per share attributable to additional (0.09) -
restructuring (2)
Earnings per share of common stock - assuming dilution,
at 25% tax rate,
excluding additional restructuring and 2016 divestitures $ $
1.80 1.64
Earnings per share of common stock - assuming dilution $ $
1.80 1.70
Less: Earnings per share impact of normalizing to 25% 0.09 0.01
tax rate
Less: Earnings per share attributable to 2016 - 0.05
divestitures (1)
Less: Earnings per share attributable to additional (0.09) -
restructuring (2)
Earnings per share of common stock - assuming dilution,
at 25% tax rate,
excluding additional restructuring and 2016 divestitures $ $
1.80 1.64
(1) Earnings per share attributable to 2016 divestitures uses a blended tax
rate of 32.3% for three months ended June 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.
Additional restructuring represents only amounts that are incremental to those
planned restructuring amounts. For the three months ended June 30, 2017, the
Company funded $117 million of restructuring, $90 million of which was
incremental to the planned amount. This additional restructuring was 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 25% for three months ended June 30, 2017.
We believe earnings per share adjusted to normalize for the expected effective
tax rate of 25% 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 Segment Profit to Operating Income and Calculation of Segment
Profit
and Operating Income Margins (Unaudited)
(Dollars in millions)
Twelve Months Ended
December 31,
2016
Segment Profit $ 7,186
Stock compensation expense (A) (184)
Repositioning and other (A, B) (679)
Pension ongoing income (A) 601
Pension mark-to-market expense (A) (273)
Other postretirement expense (A) 32
Operating Income $ 6,683
Segment Profit $ 7,186
÷ Sales $ 39,302
Segment Profit Margin % 18.3%
Operating Income $ 6,683
÷ Sales $ 39,302
Operating Income Margin % 17.0%
(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.
A quantitative reconciliation of segment profit, on an overall Honeywell basis,
to operating income has not been provided for forward-looking measures of
segment profit and segment margin included herewithin. Management cannot
reliably predict or estimate, without unreasonable effort, the impact and
timing
on future operating results arising from items excluded from segment profit,
particularly 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. The information that is unavailable to provide a quantitative
reconciliation could have a
significant impact on our reported financial results. To the extent
quantitative information becomes available without unreasonable effort in the
future, and closer to the
period to which the forward-looking measures pertain, a reconciliation of
segment profit to operating income will be included within future filings.
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 $7.00 - 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 $7.00 - $
$7.10 6.46
(1) Utilizes weighted average shares of approximately 774 million and an
expected effective tax rate of 24%.
(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.
Honeywell International Inc
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
(Unaudited)
(Dollars in billions)
Twelve Months Ended
December 31,
2017E 2016
Cash provided by operating activities $5.7 - $5.8 $5.5
Expenditures for property, plant and equipment (1.1) (1.1)
Free cash flow $4.6 - $4.7 $4.4
We define free cash flow as cash provided by operating activities less cash
expenditures for property, plant and equipment.
We believe 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.
END
(END) Dow Jones Newswires
July 21, 2017 06:36 ET (10:36 GMT)
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