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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 Overdelivers On All Guided Metrics In The First Quarter; Raises
Full-Year Sales And Adjusted EPS Guidance
- Delivered Double-Digit Sales Growth in Safety and Productivity Solutions;
Returned to Sales Growth in Honeywell Building Technologies
- Expanded Segment Margin in Aerospace, Honeywell Building Technologies, and
Safety and Productivity Solutions
- Delivered Earnings Per Share of $2.03, Adjusted EPS¹ of $1.92, Exceeding
High End of Guidance Range by 9 Cents
- Deployed $3.0 Billion in Capital to Acquisitions, Share Repurchases,
Dividends, and Capital Expenditures
CHARLOTTE, N.C., April 23, 2021 /PRNewswire/ -- Honeywell (NYSE: HON) today
announced results for the first quarter that exceeded the company's guidance.
The company also raised its full-year sales guidance and raised the midpoint of
its adjusted earnings per share and cash flow guidance.
Logo - https://mma.prnewswire.com/media/1420781/Honeywell_Logo.jpg
"Honeywell delivered a strong start to 2021 with first-quarter results that
exceeded our expectations. We are seeing promising signs of a rapid recovery in
some of our markets, and we are poised to capitalize on new business
opportunities as they arise," said Darius Adamczyk, chairman and chief
executive officer of Honeywell. "We reported first-quarter sales of $8.5
billion, flat year over year, or a decline of 2% on an organic basis. Our
first-quarter sales exceeded the high end of our guidance range by
approximately $250 million driven by continued double-digit growth in our
Warehouse and Workflow Solutions and personal protective equipment businesses
as well as demand for our building products and services, advanced materials,
and connected software. Operating margin contracted 220 basis points for the
quarter to 17.8%, with segment margin contracting 80 basis points to 21.0%,
which exceeded the high end of our guidance by 10 basis points. We delivered
segment margin expansion in Aerospace, Honeywell Building Technologies, and
Safety and Productivity Solutions for the second consecutive quarter, supported
by our streamlined cost base following the cost actions we took in 2020. We
delivered earnings per share of $2.03, with adjusted earnings per share1 of
$1.92, down 13% year over year but 9 cents above the high end of the previously
provided guidance range. We continued to take advantage of our strong balance
sheet, and deployed capital to high-return opportunities in the quarter,
including closing our acquisition of quality management software leader Sparta
Systems and announcing the acquisition of a majority stake in Fiplex, a leading
provider of in-building communications systems. In addition, we repurchased
$0.8 billion in Honeywell shares and made five strategic investments through
Honeywell Ventures."
Adamczyk continued, "As we look to the rest of 2021 and beyond, we are well
positioned for the recovery to come. Our new offerings in growing markets like
life sciences are gaining traction and the industries that were hardest hit by
the pandemic are expected to improve throughout the year. We have a robust
portfolio of technologies that help our customers meet their environmental and
social goals. In fact, about half of Honeywell's new product introduction
research and development investment is directed toward products that improve
environmental and social outcomes for customers. Earlier this month, we pledged
to become carbon neutral in our operations and facilities by 2035, building on
our commitment to reduce our carbon footprint in 2024 by 10% from 2018 levels.
Our confidence in this commitment is underpinned by our history of setting
aggressive environmental targets and beating them, which has enabled us to
reduce our greenhouse gas intensity by more than 90% since 2004. We look
forward to continuing to deliver outstanding results for our shareowners,
customers, and employees."
As a result of the company's first-quarter performance and management's outlook
for the remainder of the year, Honeywell raised its full-year sales guidance
and raised the midpoint of its adjusted earnings per share and cash flow
guidance. Full-year organic sales growth is now expected to be in the range of
3% to 5%. Adjusted earnings per share2 is expected to be $7.75 to $8.00, up 15
cents from the low end of the prior guidance range. Operating cash flow is now
expected to be in the range of $5.8 billion to $6.1 billion and free cash flow
is now expected to be in the range of $5.2 billion to $5.5 billion. A summary
of the company's full-year guidance changes can be found in Table 1.
First-Quarter Performance
Honeywell sales for the first quarter were flat on a reported basis and down 2%
on an organic basis. The first-quarter financial results can be found in Tables
2 and 3.
Aerospace sales for the first quarter were down 22% on an organic basis driven
by lower commercial aftermarket demand due to the ongoing impact of reduced
flight hours, softness in commercial original equipment, and lower volumes in
international defense, partially offset by growth in U.S. defense and space.
Segment margin expanded 110 basis points to 29.0%. Margin performance was due
to a number of factors, including commercial excellence, cost management, and a
one-time benefit.
Honeywell Building Technologies sales for the first quarter were up 2% on an
organic basis driven by demand for Products and growth in Building Solutions
services. Orders were up mid-single digits year over year, driven by strong
bookings for services and security products. Segment margin expanded 200 basis
points to 22.5% driven by commercial excellence and productivity, net of
inflation.
Performance Materials and Technologies sales for the first quarter were down 6%
on an organic basis driven by continued delays in Process Solutions automation
projects, lower volumes in smart energy, and lower demand for licensing and
catalysts in UOP, partially offset by continued growth in Advanced Materials
driven by strong demand for fluorine products and specialty materials. Segment
margin contracted 290 basis points to 18.5% driven by the impact of sales mix,
partially offset by commercial excellence.
Safety and Productivity Solutions sales for the first quarter were up 47% on an
organic basis driven by double-digit Warehouse and Workflow Solutions, personal
protective equipment, and Productivity Solutions and Services growth. Orders
were up double digits year over year for the sixth straight quarter, led by
continued demand for personal protective equipment and Productivity Solutions
and Services, and backlog remained above $4 billion for the third quarter in a
row. Segment margin expanded 180 basis points to 14.3% driven by the impact of
higher sales volumes.
Conference Call Details
Honeywell will discuss its first-quarter results and updated full-year guidance
during an investor conference call starting at 8:30 a.m. Eastern Daylight Time
today. To participate on the conference call, please dial (800) 263-0877
(domestic) or (646) 828-8143 (international) approximately ten minutes before
the 8:30 a.m. EDT start. Please mention to the operator that you are dialing in
for Honeywell's first-quarter 2021 earnings call or provide the conference code
HON1Q21. The live webcast of the investor call as well as related presentation
materials will be available through the Investor Relations section of the
company's website (www.honeywell.com/investor). Investors can hear a replay of
the conference call from 12:30 p.m. EDT April 23 until 12:30 p.m. EDT April 30
by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international). The
access code is 8053208.
TABLE 1: FULL-YEAR 2021 GUIDANCE4
Previous Guidance Current Guidance
Sales $33.4B - $34.4B $34.0B - $34.8B
Organic Growth 1% - 4% 3% - 5%
Segment Margin 20.7% - 21.1% 20.7% - 21.1%
Expansion Up 30 - 70 bps Up 30 - 70 bps
Adjusted Earnings Per Share2 $7.60 - $8.00 $7.75 - $8.00
Adjusted Earnings Growth3 7% - 13% 9% - 13%
Operating Cash Flow $5.7B - $6.1B $5.8B - $6.1B
Free Cash Flow $5.1B - $5.5B $5.2B - $5.5B
TABLE 2: SUMMARY OF HONEYWELL FINANCIAL RESULTS
1Q 2021 1Q 2020 Change
Sales 8,454 8,463 -%
Organic Growth (2%)
Segment Margin 21.0% 21.8% -80 bps
Operating Income Margin 17.8% 20.0% -220 bps
Earnings Per Share $2.03 $2.21 (8%)
Adjusted Earnings Per Share1 $1.92 $2.21 (13%)
Cash Flow from Operations 978 939 4%
Operating Cash Flow Conversion 69% 59% 10%
Free Cash Flow 757 800 (5%)
Adjusted Free Cash Flow Conversion5 56% 51% 5%
TABLE 3: SUMMARY OF SEGMENT FINANCIAL RESULTS
AEROSPACE 1Q 2021 1Q 2020 Change
Sales 2,632 3,361 (22%)
Organic Growth (22%)
Segment Profit 762 937 (19%)
Segment Margin 29.0% 27.9% 110 bps
HONEYWELL BUILDING TECHNOLOGIES
Sales 1,358 1,281 6%
Organic Growth 2%
Segment Profit 305 262 16%
Segment Margin 22.5% 20.5% 200 bps
PERFORMANCE MATERIALS AND TECHNOLOGIES
Sales 2,346 2,397 (2%)
Organic Growth (6%)
Segment Profit 434 512 (15%)
Segment Margin 18.5% 21.4% -290 bps
SAFETY AND PRODUCTIVITY SOLUTIONS
Sales 2,118 1,424 49%
Organic Growth 47%
Segment Profit 303 178 70%
Segment Margin 14.3% 12.5% 180 bps
1Adjusted EPS and adjusted EPS V% exclude the $0.11 impact of the sale of the
retail footwear business
2Adjusted EPS guidance excludes the $0.11 impact of the sale of the retail
footwear business and any potential future one-time items that we cannot
reliably predict or estimate such as pension mark-to-market
3Adjusted EPS V% guidance excludes the $0.11 impact of the sale of the retail
footwear business, any potential future one-time items that we cannot reliably
predict or estimate such as pension mark-to-market, 4Q20 pension
mark-to-market, 2Q20 favorable resolution of a foreign tax matter related to
the spin-off transactions, and non-cash charges associated with the reduction
in value of reimbursement receivables due from Garrett Motion Inc. (Garrett),
net of proceeds from the settlement of related hedging transactions
4As discussed in the notes to the attached reconciliations, we do not provide
guidance for margin or EPS on a GAAP basis
5Adjusted free cash flow conversion excludes the gain on sale of the retail
footwear business
Honeywell (http://www.honeywell.com/) is a Fortune 100 technology company that
delivers industry specific solutions that include aerospace products and
services; control technologies for buildings and industry; and performance
materials globally. Our technologies help everything from aircraft, 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, technological, and COVID-19 public health
factors affecting our operations, markets, products, services and prices. Such
forward-looking statements are not guarantees of future performance, and actual
results, and other developments, including the potential impact of the COVID-19
pandemic, and business decisions may differ from those envisaged by such
forward-looking statements. Any forward-looking plans described herein are not
final and may be modified or abandoned at any time. 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.
This release contains financial measures presented on a non-GAAP basis.
Honeywell's non-GAAP financial measures used in this release are as follows:
segment profit, on an overall Honeywell basis, a measure by which we assess
operating performance, which we define as operating income adjusted for certain
items as presented in the Appendix; segment margin, on an overall Honeywell
basis, which we define as segment profit divided by sales; organic sales
growth, which we define as sales growth less the impacts from foreign currency
translation, and acquisitions and divestitures for the first 12 months
following transaction date; free cash flow, which we define as cash flow from
operations less capital expenditures plus anticipated cash receipts from
Garrett, if and as noted in the release; adjusted free cash flow conversion,
which we define as free cash flow divided by net income attributable to
Honeywell, excluding the gain on sale of the Retail footwear business, if and
as noted in the release; and adjusted earnings per share, which we adjust to
exclude pension mark-to-market, the favorable resolution of a foreign tax
matter related to the spin-off transactions, non-cash charges associated with
the reduction in value of reimbursement receivables due from Garrett, net of
proceeds from settlement of related hedging transactions, and the gain on sale
of the Retail footwear business, if and as noted in the release. Management
believes that, when considered together with reported amounts, these measures
are useful to investors and management in understanding our ongoing operations
and in the analysis of ongoing operating trends. These metrics should be
considered in addition to, and not as replacements for, the most comparable
GAAP measure. Refer to the Appendix attached to this release for
reconciliations of non-GAAP financial measures to the most directly comparable
GAAP measures.
Honeywell International Inc.
Consolidated Statement of Operations (Unaudited)
(Dollars in millions, except per share amounts)
Three Months Ended March 31,
2021 2020
Product sales $ 6,409 $ 6,305
Service sales 2,045 2,158
Net sales 8,454 8,463
Costs, expenses and
other
Cost of products 4,551 4,374
sold(1)
Cost of services 1,158 1,160
sold(1)
5,709 5,534
Selling, general and 1,236 1,238
administrative
expenses(1)
Other (income) (442) (317)
expense
Interest and other 90 73
financial charges
6,593 6,528
Income before taxes 1,861 1,935
Tax expense 413 329
(benefit)
Net income 1,448 1,606
Less: Net income 21 25
attributable to the
noncontrolling
interest
Net income $ 1,427 $ 1,581
attributable to
Honeywell
Earnings per share $ 2.05 $ 2.23
of common stock -
basic
Earnings per share $ 2.03 $ 2.21
of common stock -
assuming dilution
Weighted average 696.2 709.6
number of shares
outstanding - basic
Weighted average 704.5 717.0
number of shares
outstanding -
assuming dilution
(1) Cost of products and services sold and Selling, general
and administrative expenses include amounts for
repositioning and other charges, the service cost
component of pension and other postretirement (income)
expense, and stock compensation expense.
Honeywell International Inc.
Segment Data (Unaudited)
(Dollars in millions)
Three Months Ended March 31,
Net Sales 2021 2020
Aerospace $ 2,632 $ 3,361
Honeywell Building Technologies 1,358 1,281
Performance Materials and Technologies 2,346 2,397
Safety and Productivity Solutions 2,118 1,424
Total $ 8,454 $ 8,463
Reconciliation of Segment Profit to Income Before Taxes
Three Months Ended March 31,
Segment Profit 2021 2020
Aerospace $ 762 $ 937
Honeywell 305 262
Building
Technologies
Performance 434 512
Materials and
Technologies
Safety and 303 178
Productivity
Solutions
Corporate (29) (41)
Total segment 1,775 1,848
profit
Interest and (90) (73)
other financial
charges
Stock (77) (44)
compensation
expense (1)
Pension ongoing 276 198
income (2)
Other 17 13
postretirement
income (2)
Repositioning (141) (62)
and other
charges (3,4)
Other (5) 101 55
Income before $ 1,861 $ 1,935
taxes
(1) Amounts included in Selling, general and administrative
expenses.
(2) Amounts included in Cost of products and services sold and
Selling, general and administrative expenses (service costs)
and Other income/expense (non-service cost components).
(3) Amounts included in Cost of products and services sold,
Selling, general and administrative expenses, and Other
(income) expense.
(4) Includes repositioning, asbestos, and environmental expenses.
(5) Amounts include the other components of Other (income) expense
not included within other categories in this reconciliation.
Equity income of affiliated companies is included in segment
profit.
Honeywell International Inc.
Consolidated Balance Sheet (Unaudited)
(Dollars in millions)
March 31, December 31,
2021 2020
ASSETS
Current assets:
Cash and cash equivalents $ 11,718 $ 14,275
Short-term investments 942 945
Accounts receivable - net 6,675 6,827
Inventories 4,607 4,489
Other current assets 1,645 1,639
Total current assets 25,587 28,175
Investments and long-term receivables 746 685
Property, plant and equipment - net 5,547 5,570
Goodwill 16,981 16,058
Other intangible assets - net 3,799 3,560
Insurance recoveries for asbestos related 347 366
liabilities
Deferred income taxes 762 760
Other assets 9,792 9,412
Total assets $ 63,561 $ 64,586
LIABILITIES
Current liabilities:
Accounts payable $ 5,792 $ 5,750
Commercial paper and other short-term borrowings 3,568 3,597
Current maturities of long-term debt 1,635 2,445
Accrued liabilities 6,955 7,405
Total current liabilities 17,950 19,197
Long-term debt 16,124 16,342
Deferred income taxes 2,309 2,113
Postretirement benefit obligations other than 234 242
pensions
Asbestos-related liabilities 1,873 1,920
Other liabilities 6,812 6,975
Redeemable noncontrolling interest 7 7
Shareowners' equity 18,252 17,790
Total liabilities, redeemable noncontrolling $ 63,561 $ 64,586
interest and shareowners'
equity
Honeywell International Inc.
Consolidated Statement of Cash Flows (Unaudited)
(Dollars in millions)
Three Months Ended
March 31,
2021 2020
Cash flows from operating activities:
Net income $ 1,448 $ 1,606
Less: Net income attributable to the noncontrolling 21 25
interest
Net income attributable to Honeywell 1,427 1,581
Adjustments to reconcile net income attributable to
Honeywell to net cash provided by operating
activities:
Depreciation 171 153
Amortization 170 90
Gain on sale of non-strategic businesses and assets (90) -
Repositioning and other charges 141 62
Net payments for repositioning and other charges (195) (111)
Pension and other postretirement income (293) (212)
Pension and other postretirement benefit payments (14) (14)
Stock compensation expense 77 44
Deferred income taxes 63 (58)
Other (96) (179)
Changes in assets and liabilities, net of the effects of
acquisitions and divestitures:
Accounts receivable 143 41
Inventories (158) (163)
Other current assets (66) 166
Accounts payable 57 (54)
Accrued liabilities (359) (407)
Net cash provided by (used for) operating activities 978 939
Cash flows from investing activities:
Expenditures for property, plant and equipment (221) (139)
Proceeds from disposals of property, plant and equipment 14 7
Increase in investments (736) (648)
Decrease in investments 612 843
Receipts (payments) from settlements of derivative 140 287
contracts
Cash paid for acquisitions, net of cash acquired (1,303) -
Proceeds from sales of businesses, net of fees paid 190 -
Net cash provided by (used for) investing activities (1,304) 350
Cash flows from financing activities:
Proceeds from issuance of commercial paper and other 1,268 3,455
short-term borrowings
Payments of commercial paper and other short-term (1,266) (3,373)
borrowings
Proceeds from issuance of common stock 67 66
Proceeds from issuance of long-term debt 23 1,127
Payments of long-term debt (817) (1,125)
Repurchases of common stock (822) (1,923)
Cash dividends paid (640) (635)
Other (30) (38)
Net cash provided by (used for) financing activities (2,217) (2,446)
Effect of foreign exchange rate changes on cash and cash (14) (189)
equivalents
Net increase (decrease) in cash and cash equivalents (2,557) (1,346)
Cash and cash equivalents at beginning of period 14,275 9,067
Cash and cash equivalents at end of period $ 11,718 $ 7,721
Honeywell International Inc.
Reconciliation of Organic Sales % Change (Unaudited)
Three Months Ended
March 31, 2021
Honeywell
Reported sales % change -%
Less: Foreign currency translation 2%
Less: Acquisitions, divestitures and other, net -%
Organic sales % change (2)%
Aerospace
Reported sales % change (22)%
Less: Foreign currency translation -%
Less: Acquisitions, divestitures and other, net -%
Organic sales % change (22)%
Honeywell Building Technologies
Reported sales % change 6%
Less: Foreign currency translation 4%
Less: Acquisitions, divestitures and other, net -%
Organic sales % change 2%
Performance Materials and Technologies
Reported sales % change (2)%
Less: Foreign currency translation 3%
Less: Acquisitions, divestitures and other, net 1%
Organic sales % change (6)%
Safety and Productivity Solutions
Reported sales % change 49%
Less: Foreign currency translation 3%
Less: Acquisitions, divestitures and other, net (1)%
Organic sales % change 47%
We define organic sales percent as the year over year change in reported sales
relative to the comparable period, excluding the impact on sales from foreign
currency translation and acquisitions, net of divestitures. We believe this
measure 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.
Reconciliation of Segment Profit to Operating Income and Calculation of
Segment Profit and Operating Income
Margins (Unaudited)
(Dollars in millions)
Three Months Ended March Twelve
31, Months
Ended
December 31,
2021 2020 2020
Segment profit $ 1,775 $ 1,848 $ 6,665
Stock compensation expense (1) (77) (44) (168)
Repositioning, Other (2,3) (155) (74) (641)
Pension and other postretirement (34) (39) (160)
service costs (4)
Operating income $ 1,509 $ 1,691 $ 5,696
Segment profit $ 1,775 $ 1,848 $ 6,665
÷ Net sales $ 8,454 $ 8,463 $ 32,637
Segment profit margin % 21.0 % 21.8 % 20.4 %
Operating income $ 1,509 $ 1,691 $ 5,696
÷ Net sales $ 8,454 $ 8,463 $ 32,637
Operating income margin % 17.8 % 20.0 % 17.5 %
(1) Included in Selling, general and
administrative expenses.
(2) Includes repositioning, asbestos,
environmental expenses and equity income
adjustment.
(3) Included in Cost of products and services
sold, Selling, general and administrative
expenses and Other (income) expense.
(4) Included in Cost of products and services
sold and Selling, general and administrative
expenses.
We define segment profit as operating income, excluding stock compensation
expense, pension and other postretirement service costs, and repositioning and
other charges. 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 all 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. 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 Adjusted Earnings per Share (Unaudited)
Three Months Ended March Twelve Months
31, Ended
December 31,
2021 2020 2020
Earnings per share of $ 2.03 $ 2.21 $ 6.72
common stock - assuming
dilution (1)
Pension mark-to-market - - 0.04
expense (2)
Separation related tax - - (0.26)
adjustment (3)
Gain on sale of retail (0.11) - -
footwear business (4)
Garrett related adjustment - - 0.60
(5)
Adjusted earnings per $ 1.92 $ 2.21 $ 7.10
share of common stock -
assuming dilution
(1) For the three months ended March 31, 2021 and 2020,
adjusted earnings per share utilizes weighted
average shares of approximately 704.5 million and
717.0 million. For the twelve months ended December
31, 2020, adjusted earnings per share utilizes
weighted average shares of 711.2 million.
(2) Pension mark-to-market expense uses a blended tax
rate of 25% for 2020.
(3) For the twelve months ended December 31, 2020,
separation related tax adjustment of $186 million
($186 million net of tax) includes the favorable
resolution of a foreign tax matter related to the
spin-off transactions.
(4) For the three months ended March 31, 2021, the
adjustment was $72 million net of tax due to the
gain on sale of the retail footwear business.
(5) For the twelve months ended December 31, 2020,
adjustment was $427 million net of tax due to the
non-cash charges associated with the reduction in
value of reimbursement receivables due from Garrett,
net of proceeds from settlement of related hedging
transactions.
We believe adjusted earnings per share, excluding spin-off impact, is a measure
that is useful to investors and management in understanding our ongoing
operations and in analysis of ongoing operating trends. For forward looking
information, 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. 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 Adjusted Free Cash
Flow and Calculation of Adjusted
Free Cash Flow Conversion (Unaudited)
(Dollars in millions)
Three Months Three Months
Ended Ended
March 31, 2021 March 31,
2020
Cash provided by operating activities $ 978 $ 939
Expenditures for property, plant and equipment (221) (139)
Free cash flow 757 800
Separation cost payments - -
Adjusted free cash flow $ 757 $ 800
Net income attributable to Honeywell 1,427 1,581
Separation related tax adjustment - -
Pension mark-to-market - -
Gain on sale of retail footwear business (1) (72) -
Adjusted net income attributable to Honeywell $ 1,355 $ 1,581
Cash provided by operating activities $ 978 $ 939
÷ Net income (loss) attributable to Honeywell $ 1,427 $ 1,581
Operating cash flow conversion 69 % 59 %
Adjusted free cash flow $ 757 $ 800
÷ Adjusted net income attributable to Honeywell $ 1,355 $ 1,581
Adjusted free cash flow conversion % 56 % 51 %
(1) The
adjustment
due to a
gain on
sale of
the retail
footwear
business.
We define free cash flow as cash provided by operating activities less cash
expenditures for property, plant and equipment plus anticipated cash receipts
from Garrett.
We believe that free cash flow is a non-GAAP metric that is useful to investors
and management as a measure of cash generated by 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
operations and the impact that this cash flow has on our liquidity. For forward
looking information, we do not provide cash flow conversion guidance on a GAAP
basis as 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.
Honeywell International Inc.
Reconciliation of Cash Provided by Operating Activities to Adjusted Free Cash
Flow (Unaudited)
Twelve Months
Ended
December 31,
2021(E) ($B)
Cash provided by operating activities $5.8 - $6.1
Expenditures for property, plant and equipment (1)
Garrett cash receipts 0.4
Free cash flow $5.2 - $5.5
We define free cash flow as cash provided by operating activities less cash
expenditures for property, plant and equipment plus anticipated cash receipts
from Garrett.
We believe that free cash flow is a non-GAAP metric that is useful to investors
and management as a measure of cash generated by 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
operations and the impact that this cash flow has on our liquidity. For forward
looking information, we do not provide cash flow conversion guidance on a GAAP
basis as 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.
Honeywell International Inc.
Reconciliation of Expected Earnings per Share to Adjusted Earnings per Share
(Unaudited)
Twelve Months
Ended
December 31,
2021(E)
Earnings per share of common stock - $7.86 - $8.11
assuming dilution (1)
Gain on sale of retail footwear business (0.11)
(2)
Adjusted earnings per share of common $7.75 - $8.00
stock - assuming dilution
(1) For the twelve months ended December
31, 2021, expected earnings per
share utilizes weighted average
shares of approximately 705 million.
(2) For the twelve months ended December
31, 2021, the adjustment was $72
million net of tax due to the gain
on sale of the retail footwear
business.
We believe adjusted earnings per share is a measure that is useful to investors
and management in understanding our ongoing operations and in analysis of
ongoing operating trends. For forward looking information, management cannot
reliably predict or estimate any potential future one-time items, such as
pension mark-to-market, without unreasonable effort. Pension mark-to-market
expense 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. Based on economic and
industry conditions, future developments and other relevant factors, these
assumptions are subject to change.
Contacts:
Media Investor Relations
Nina Krauss Mark Bendza
(704) 627-6035 (704) 627-6200
nina.krauss@honeywell.com mark.bendza@honeywell.com
END
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April 23, 2021 06:50 ET (10:50 GMT)
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