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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 |
Hot Features
Premium
TIDMHON
Honeywell Reports Strong Finish to 2018; Expects 2019 Earnings Per Share of
$7.80 - $8.10
- Continued Strength in Fourth Quarter led by Commercial Aerospace, Defense,
and Warehouse Automation
- Fourth Quarter Reported Sales Down 10% Due to Impact of Spin-Offs, Organic
Sales up 6%
- Fourth Quarter Reported Earnings Per Share of $2.31; Adjusted EPS(1) of
$1.91, up 12% Ex-Spins(1)
- Full Year Operating Cash Flow up 8%, Conversion 95%; Adj. Free Cash Flow(2)
up 22%, Conversion 100%
- Expect Strong Sales, Margin and Cash Flow Growth in 2019 Following Portfolio
Transformation
MORRIS PLAINS, N.J., Feb. 1, 2019 /PRNewswire/ -- Honeywell (NYSE: HON) today
announced financial results for the fourth quarter and full year 2018 and also
announced its outlook for 2019.
"Honeywell delivered a strong fourth quarter to finish out what was an
incredible year for our customers, our employees, and our shareowners. Organic
sales were up 6 percent in the fourth quarter and full year, primarily driven
by continued strength in our long-cycle businesses in commercial aerospace,
U.S. defense, and warehouse automation. Our long-cycle orders and backlog were
up over 15 percent for the year, which positions us well for 2019 and beyond.
Our focus on generating profitable growth combined with productivity rigor
drove 80 basis points of segment margin expansion this quarter, and 60 basis
points for the full year, exceeding the long-term targets we set forth in 2017.
This momentum resulted in adjusted earnings per share1 of $1.91, up 12 percent1
year-over-year, excluding the impact of the spin-offs completed in 2018. For
the full year, we exceeded the high end of our original adjusted earnings per
share and adjusted free cash flow guidance even after dilution from the
spin-offs, while at the same time returning value to shareowners in the form of
the spin dividends." said Darius Adamczyk, Chairman and Chief Executive Officer
of Honeywell. "We generated over $6 billion of cash for the year and reached
100 percent conversion2, a milestone for the company and proof that our
initiatives are working. We expect to remain at similar levels for cash
conversion in 2019, principally driven by continued working capital
improvements."
Adamczyk continued, "We have good momentum exiting 2018 after an exciting year.
We continue to transform the portfolio, as we demonstrated with the successful
spin-offs of our Homes and Transportation Systems businesses. We now have a
simpler, more focused portfolio spread across six attractive end markets with
approximately 60 percent of the portfolio growing sales at or above 5 percent
organically for the full year. We effectively deployed capital to dividends,
capital expenditures, acquisitions, and repurchases of Honeywell shares. Our
dividend increase in September marked the ninth consecutive double-digit
increase since 2010."
The company also announced its outlook for 2019. Honeywell expects sales of
$36.0 billion to $36.9 billion, representing organic sales growth of 2 to 5
percent; segment margin expansion of 110 to 140 basis points, or 30 to 60 basis
points excluding the favorable impact of the 2018 spin-offs3; earnings per
share of $7.80 to $8.10; operating cash flow of $5.9 billion to $6.5 billion
and adjusted free cash flow4 of $5.4 billion to $6.0 billion, representing
conversion of approximately 100 percent. A summary of the company's 2019
guidance can be found in Table 1.
"We have an established software business and strategy in our connected
enterprises which continues to grow at double-digit rates as our shift to a
software-industrial company continues. We continue to make improvements in our
supply chain and working capital to drive better sales, margin and free cash
flow; and we have begun the digitization of Honeywell processes to improve
organizational efficiency and enable enhanced analytics to drive better
decision making. It's an exciting time to be part of Honeywell, and we look
forward to continuing our track record of matching our say with our do in
2019," Adamczyk concluded.
Fourth-Quarter Performance
Honeywell sales for the fourth quarter were down 10 percent on a reported basis
and up 6 percent on an organic basis. The difference between reported and
organic sales primarily relates to the spin-offs of the former Transportation
Systems business (formerly in Aerospace) and the former Homes and ADI Global
Distribution business (formerly in Honeywell Building Technologies), partially
offset by the favorable impact of foreign currency translation. Fourth-quarter
reported earnings per share was $2.31, which includes a $435 million favorable
adjustment to the fourth quarter 2017 charge related to U.S. tax legislation,
$104 million of separation costs (including net tax impacts) associated with
the spin-offs, and a $28 million pension mark-to-market expense. The
fourth-quarter financial results can be found in Tables 2 and 3.
Aerospace sales for the fourth quarter were up 10 percent on an organic basis
driven by continued double-digit organic growth in the U.S. and international
defense business and business aviation OE, and demand in the air transport and
business aviation aftermarket. Segment margin expanded 50 basis points to 23.4
percent, primarily driven by commercial excellence, lower customer incentives,
and the favorable impact from the spin-off of the former Transportation Systems
business, partially offset by higher volumes of lower-margin OE shipments.
Honeywell Building Technologies sales for the fourth quarter were up 1 percent
on an organic basis driven by continued demand for commercial fire products,
strength in the former Homes and ADI Global Distribution business (now Resideo)
prior to its spin-off effective October 29, offset by declines in the China air
and water products business and Building Management Systems. Sales in Building
Solutions were flat on an organic basis, with growth in projects offset by
declines in the energy vertical. Segment margin expanded 100 basis points to
18.6 percent, primarily driven by commercial excellence, the favorable impact
following the spin-off of the former Homes and ADI Global Distribution
business, and benefits from repositioning.
Performance Materials and Technologies sales for the fourth quarter were flat
on an organic basis. The result was driven by strong licensing, engineering and
catalyst demand in UOP, short-cycle maintenance and migration services demand
in Process Solutions, and growth in Solstice® low global warming products,
largely offset by volume declines for specialty products in Advanced Materials.
Segment margin expanded 200 basis points to 23.3 percent, primarily driven by
the favorable impact of higher catalyst shipments in UOP, commercial
excellence, and benefits from repositioning.
Safety and Productivity Solutions sales for the fourth quarter were up 15
percent on an organic basis driven by continued double-digit sales growth in
the Intelligrated warehouse automation business, robust volumes across sensing
and IoT, and demand for new mobility launches in productivity products. Segment
margin expanded 30 basis points to 16.0 percent, primarily driven by commercial
excellence, productivity and higher sales volumes.
Conference Call Details
Honeywell will discuss the 2018 results and 2019 outlook during an investor
conference call today starting at 8:30 a.m. Eastern Standard Time. To
participate on the conference call, please dial (800) 289-0438 (domestic) or
(323) 794-2423 (international) approximately ten minutes before the 8:30 a.m.
EST start. Please mention to the operator that you are dialing in for
Honeywell's fourth quarter 2018 earnings and 2019 outlook call or provide the
conference code HON2019. 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, February 1, until 12:
30 p.m. EST, February 8, by dialing (888) 203-1112 (domestic) or (719) 457-0820
(international). The access code is 4116151.
TABLE 1: FULL-YEAR 2019 GUIDANCE
Sales $36.0B - $36.9B
Organic Growth 2% - 5%
Segment Margin 20.7% - 21.0%
Expansion Up 110 - 140 bps
Expansion Ex-Spins5 Up 30 - 60 bps
Earnings Per Share $7.80 - $8.10
Earnings Growth Ex-Spins6 6% - 10%
Operating Cash Flow $5.9B - $6.5B
Adjusted Free Cash Flow7 $5.4B - $6.0B
Conversion 95% - 100%
TABLE 2: SUMMARY OF HONEYWELL FINANCIAL RESULTS
FY 2017 FY 2018 Change
Sales 40,534 41,802 3%
Organic Growth 6%
Segment Margin 19.0% 19.6% 60 bps
Operating Income Margin 15.6% 16.0% 40 bps
Reported Earnings Per Share $2.00 $8.98 349%
Adjusted Earnings Per Share8 $7.15 $8.01 12%
Cash Flow from Operations 5,966 6,434 8%
Adjusted Free Cash Flow9 4,935 6,030 22%
4Q 2017 4Q 2018 Change
Sales 10,843 9,729 (10%)
Organic Growth 6%
Segment Margin 19.3% 20.1% 80 bps
Operating Income Margin 14.9% 15.6% 70 bps
Reported Earnings Per Share ($3.32) $2.31 170%
Adjusted Earnings Per Share8 $1.89 $1.91 1%
Cash Flow from Operations 2,172 1,559 (28%)
Adjusted Free Cash Flow9 1,754 1,486 (15%)
TABLE 3: SUMMARY OF SEGMENT FINANCIAL RESULTS
AEROSPACE FY 2017 FY 2018 Change
Sales 14,779 15,493 5%
Organic Growth 9%
Segment Profit 3,288 3,503 7%
Segment Margin 22.2% 22.6% 40 bps
4Q 2017 4Q 2018
Sales 3,902 3,428 (12%)
Organic Growth 10%
Segment Profit 893 801 (10%)
Segment Margin 22.9% 23.4% 50 bps
HONEYWELL BUILDING TECHNOLOGIES FY 2017 FY 2018 Change
Sales 9,777 9,298 (5%)
Organic Growth 3%
Segment Profit 1,650 1,608 (3%)
Segment Margin 16.9% 17.3% 40 bps
4Q 2017 4Q 2018
Sales 2,615 1,802 (31%)
Organic Growth 1%
Segment Profit 461 335 (27%)
Segment Margin 17.6% 18.6% 100 bps
PERFORMANCE MATERIALS AND TECHNOLOGIES FY 2017 FY 2018 Change
Sales 10,339 10,674 3%
Organic Growth 2%
Segment Profit 2,206 2,328 6%
Segment Margin 21.3% 21.8% 50 bps
4Q 2017 4Q 2018
Sales 2,854 2,802 (2%)
Organic Growth Flat
Segment Profit 607 652 7%
Segment Margin 21.3% 23.3% 200 bps
SAFETY AND PRODUCTIVITY SOLUTIONS FY 2017 FY 2018 Change
Sales 5,639 6,337 12%
Organic Growth 11%
Segment Profit 852 1,032 21%
Segment Margin 15.1% 16.3% 120 bps
4Q 2017 4Q 2018
Sales 1,472 1,697 15%
Organic Growth 15%
Segment Profit 231 272 18%
Segment Margin 15.7% 16.0% 30 bps
Honeywell (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, 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.
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 and which we adjust
to exclude sales and segment profit contribution from Resideo and Garrett in
2018, if and as noted in the release; organic sales growth, which we define as
sales growth less the impacts from foreign currency translation, acquisitions
and divestitures for the first 12 months following transaction date, and
impacts from adoption of the new accounting guidance on revenue from contracts
with customers that arise solely due to non-comparable accounting treatment of
contracts existing in the prior period; adjusted free cash flow, which we
define as cash flow from operations less capital expenditures and which we
adjust to exclude the impact of separation costs related to the spin-offs of
Resideo and Garrett, if and as noted in the release; adjusted free cash flow
conversion, which we define as adjusted free cash flow divided by net income
attributable to Honeywell, excluding pension mark-to-market expenses,
separation costs related to the spin-offs, and adjustments to the 4Q17 U.S. tax
legislation charge, if and as noted in the release; and adjusted earnings per
share, which we adjust to exclude pension mark-to-market expenses, as well as
for other components, such as separation costs related to the spin-offs, the
4Q17 U.S. tax legislation charge, adjustments to such charge, and after-tax
segment profit contribution from Resideo and Garrett in the periods noted in
the release, net of spin indemnification impacts assuming both indemnification
agreements were effective in such periods, if and as noted in the release. The
respective tax rates applied when adjusting earnings per share for these items
are identified in the release or in the reconciliations presented in the
Appendix. 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.
Contacts:
Media Investor Relations
Scott Sayres Mark Macaluso
(480) 257-8921 (973) 455-2222
scott.sayres@honeywell.com mark.macaluso@honeywell.com
1 Adjusted EPS and Adjusted EPS V% exclude pension mark-to-market, after-tax
separation costs related to the spin-offs of Resideo and Garrett, the 4Q17 U.S.
tax legislation charge and 2018 adjustments to such charge; adjusted EPS V%
ex-spins also excludes after-tax segment profit from Garrett in 4Q17 and
after-tax segment profit from Resideo in the months of November and December
2017, net of the spin indemnification impacts assuming both indemnification
agreements were effective during these periods.
2 Adjusted free cash flow, associated conversion and adjusted free cash flow V%
exclude impacts from separation costs related to the spin-offs. Associated
conversion also excludes pension mark-to-market and 2018 adjustments to the
4Q17 U.S. tax legislation charge.
3 Segment margin expansion ex-spins guidance excludes sales and segment profit
contribution from Resideo and Garrett in 2018.
4 Adjusted free cash flow guidance and associated conversion excludes estimated
payments of $0.3B for separation costs incurred in 2018 related to the
spin-offs of Resideo and Garrett.
5 Segment margin expansion ex-spins guidance excludes sales and segment profit
contribution from Resideo and Garrett in 2018.
6 EPS growth ex-spins guidance excludes pension mark-to-market in 2018,
after-tax separation costs related to the spin-offs of Resideo and Garrett.
Also excludes the after-tax segment profit contribution from the spin-offs in
2018, net of spin indemnification impacts assuming both indemnification
agreements were effective for all of 2018, of $0.62.
7 Adjusted free cash flow guidance and associated conversion excludes estimated
payments of $0.3B for separation costs incurred in 2018 related to the
spin-offs of Resideo and Garrett.
8 Adjusted EPS and adjusted EPS V% exclude pension mark-to-market, the 4Q17
U.S. tax legislation charge, the favorable adjustment to such charge of $1.5B
in FY18 and $435M in 4Q18, and after-tax separation costs related to the
spin-offs of Resideo and Garrett of $732M in FY18 and $104M in 4Q18.
9 Adjusted free cash flow and adjusted free cash flow V% exclude impacts from
separation costs related to the spin-offs of $424M in FY18 and $233M in 4Q18.
Honeywell International Inc
Consolidated Statement of Operations (Unaudited)
(Dollars in millions, except per share amounts)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2018 2017 2018 2017
Product sales $ $ $ $
7,434 8,646 32,848 32,317
Service sales 2,295 2,197 8,954 8,217
Net sales 9,729 10,843 41,802 40,534
Costs, expenses and other
Cost of products sold (A) 5,400 6,194 23,634 23,176
Cost of services sold (A) 1,285 1,346 5,412 4,968
6,685 7,540 29,046 28,144
Selling, general and administrative 1,524 1,684 6,051 6,087
expenses (A)
Other (income) expense (290) (129) (1,149) (963)
Interest and other financial charges 90 81 367 316
8,009 9,176 34,315 33,584
Income before taxes 1,720 1,667 7,487 6,950
Tax expense (benefit) (20) 4,174 659 5,362
Net income (loss) 1,740 (2,507) 6,828 1,588
Less: Net income attributable to the 19 12 63 43
noncontrolling interest
Net income (loss) attributable to $ $ $ $
Honeywell 1,721 (2,519) 6,765 1,545
Earnings (loss) per share of common $ $ $ $
stock - basic 2.34 (3.32) 9.10 2.03
Earnings (loss) per share of common $ $ $ $
stock - assuming dilution 2.31 (3.32) 8.98 2.00
Weighted average number of shares 734.0 758.8 743.0 762.1
outstanding - basic
Weighted average number of shares 743.9 758.8 (B) 753.0 772.1
outstanding - assuming dilution
(A) 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.
(B) Due to a loss for the period, no incremental shares are included because
the effect would be antidilutive.
Below is a reconciliation of earnings per share to earnings per share,
excluding pension mark-to-market expense, separation costs, and impact from the
Tax Cuts and Jobs Act of 2017 ("U.S. Tax Reform"). We believe this measure is
useful to investors and management in understanding our ongoing operations and
in analysis of ongoing operating trends. For the three months ended December
31, 2017, earnings per share utilizes weighted average number of shares
outstanding, assuming dilution of 769.0 million.
Three Months Twelve Months
Ended Ended
December 31, December 31,
2018 2017 2018 2017
Earnings (loss) per share of common $ $ $ $
stock - assuming dilution 2.31 (3.32) 8.98 2.00
Pension mark-to-market expense (1) 0.04 0.09 0.04 0.09
Separation costs 0.14 0.02 0.97 0.02
Impacts from U.S. Tax Reform (0.58) 5.06 (1.98) 5.04
Impact of dilution of weighted average 0.04
number of shares outstanding
Earnings per share of common stock -
assuming dilution, excluding pension
mark-to-market expense, separation $ $ $ $
costs, and impacts from Tax Reform 1.91 1.89 8.01 7.15
(1) Pension mark-to-market expense uses a blended tax rate of 24% for 2018 and
23% for 2017.
Honeywell International Inc
Segment Data (Unaudited)
(Dollars in millions)
Three Months Ended Twelve Months Ended
December 31, December 31,
Net Sales 2018 2017 2018 2017
Aerospace $ $ $ $
3,428 3,902 15,493 14,779
Honeywell Building 1,802 2,615 9,298 9,777
Technologies
Performance Materials and 2,802 2,854 10,674 10,339
Technologies
Safety and Productivity 1,697 1,472 6,337 5,639
Solutions
Total $ $ 10,843 $ $
9,729 41,802 40,534
Reconciliation of Segment Profit to Income Before Taxes
Three Months Ended Twelve Months Ended
December 31, December 31,
Segment Profit 2018 2017 2018 2017
Aerospace $ $ $ $
801 893 3,503 3,288
Honeywell Building 335 461 1,608 1,650
Technologies
Performance Materials and 652 607 2,328 2,206
Technologies
Safety and Productivity 272 231 1,032 852
Solutions
Corporate (100) (96) (281) (306)
Total segment profit 1,960 2,096 8,190 7,690
Interest and other (90) (81) (367) (316)
financial charges
Stock compensation (44) (43) (175) (176)
expense (A)
Pension ongoing income 247 167 992 713
(B)
Pension mark-to-market (37) (87) (37) (87)
expense (B)
Other postretirement 8 5 32 21
income (B)
Repositioning and other (335) (387) (1,091) (973)
charges (C,D)
Other (E) 11 (3) (57) 78
Income before taxes $ $ $ $
1,720 1,667 7,487 6,950
(A) Amounts included in Selling, general and administrative expenses.
(B) 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).
(C) Amounts included in Cost of products and services sold, Selling, general
and administrative expenses, and Other income/expense.
(D) Includes repositioning, asbestos, and environmental expenses.
(E) Amounts include the other components of Other income/expense not included
within other categories in this reconciliation. Equity income (loss) of
affiliated companies is included in segment profit.
Honeywell International Inc
Consolidated Balance Sheet (Unaudited)
(Dollars in millions)
December 31, December
31,
2018 2017
ASSETS
Current assets:
Cash and cash equivalents $ $
9,287 7,059
Short-term investments 1,623 3,758
Accounts receivable - net 7,508 8,866
Inventories 4,326 4,613
Other current assets 1,618 1,706
Total current assets 24,362 26,002
Investments and long-term receivables 742 667
Property, plant and equipment - net 5,296 5,926
Goodwill 15,546 18,277
Other intangible assets - net 4,139 4,496
Insurance recoveries for asbestos related 437 479
liabilities
Deferred income taxes 382 251
Other assets 6,869 3,372
Total assets $ $
57,773 59,470
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Accounts payable $ $
5,607 6,584
Commercial paper and other short-term borrowings 3,586 3,958
Current maturities of long-term debt 2,872 1,351
Accrued liabilities 6,859 6,968
Total current liabilities 18,924 18,861
Long-term debt 9,756 12,573
Deferred income taxes 1,713 2,664
Postretirement benefit obligations other than 344 512
pensions
Asbestos related liabilities 2,269 2,260
Other liabilities 6,402 5,930
Redeemable noncontrolling interest 7 5
Shareowners' equity 18,358 16,665
Total liabilities, redeemable noncontrolling $ $
interest and shareowners' equity 57,773 59,470
Honeywell International Inc
Consolidated Statement of Cash Flows (Unaudited)
(Dollars in millions)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2018 2017 2018 2017
Cash flows from operating activities:
Net income (loss) $ $ $ $
1,740 (2,507) 6,828 1,588
Less: Net income attributable to the 19 12 63 43
noncontrolling interest
Net income (loss) attributable to 1,721 (2,519) 6,765 1,545
Honeywell
Adjustments to reconcile net income
attributable to Honeywell to net
cash provided by operating activities:
Depreciation 163 183 721 717
Amortization 91 100 395 398
(Gain) loss on sale of - 7 - 7
non-strategic businesses and assets
Repositioning and other charges 335 387 1,091 973
Net payments for repositioning and (133) (234) (652) (628)
other charges
Pension and other postretirement (218) (85) (987) (647)
income
Pension and other postretirement (13) (35) (80) (106)
benefit payments
Stock compensation expense 44 43 175 176
Deferred income taxes (104) 2,529 (586) 2,452
Other (531) 1,680 (694) 1,642
Changes in assets and liabilities,
net of the effects of
acquisitions and divestitures:
Accounts receivable (367) (274) (236) (682)
Inventories (44) 141 (503) (259)
Other current assets (138) (581) 218 (568)
Accounts payable 267 520 733 924
Accrued liabilities 486 310 74 22
Net cash provided by operating activities 1,559 2,172 6,434 5,966
Cash flows from investing activities:
Expenditures for property, plant and (306) (418) (828) (1,031)
equipment
Proceeds from disposals of property, 11 40 15 86
plant and equipment
Increase in investments (1,177) (2,594) (4,059) (6,743)
Decrease in investments 1,398 1,621 6,032 4,414
Cash paid for acquisitions, net of (484) (10) (535) (82)
cash acquired
Other 152 (22) 402 (218)
Net cash provided by (used for) investing (406) (1,383) 1,027 (3,574)
activities
Cash flows from financing activities:
Proceeds from issuance of commercial 4,591 4,893 23,891 13,701
paper and other short-term borrowings
Payments of commercial paper and other (4,942) (4,924) (24,095) (13,532)
short-term borrowings
Proceeds from issuance of common stock 25 57 267 520
Proceeds from issuance of long-term 1 1,199 27 1,238
debt
Payments of long-term debt (27) (223) (1,330) (292)
Repurchases of common stock (1,692) (1,554) (4,000) (2,889)
Cash dividends paid (603) (565) (2,272) (2,119)
Pre-separation funding 1,197 - 2,801 -
Spin-off cash (179) - (179) -
Other (1) (12) (142) (143)
Net cash provided by (used for) by (1,630) (1,129) (5,032) (3,516)
financing activities
Effect of foreign exchange rate changes on (39) 10 (201) 340
cash and cash equivalents
Net increase (decrease) in cash and cash (516) (330) 2,228 (784)
equivalents
Cash and cash equivalents at beginning of 9,803 7,389 7,059 7,843
period
Cash and cash equivalents at end of period $ $ $ $
9,287 7,059 9,287 7,059
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,
2018 2017 2018 2017
Segment profit $ $ $ $
1,960 2,096 8,190 7,690
Stock compensation expense (A) (44) (43) (175) (176)
Repositioning, Other (B,C) (347) (371) (1,100) (962)
Pension and other postretirement (49) (63) (210) (249)
service costs (D)
Operating income $ $ $ $
1,520 1,619 6,705 6,303
Segment profit $ $ $ $
1,960 2,096 8,190 7,690
÷ Net sales $ $ $ $
9,729 10,843 41,802 40,534
Segment profit margin % 20.1% 19.3% 19.6% 19.0%
Operating income $ $ $ $
1,520 1,619 6,705 6,303
÷ Net sales $ $ $ $
9,729 10,843 41,802 40,534
Operating income margin % 15.6% 14.9% 16.0% 15.6%
(A) Included in Selling, general and administrative expenses.
(B) Includes repositioning, asbestos, environmental expenses and equity income
adjustment.
(C) Included in Cost of products and services sold, Selling, general and
administrative expenses and Other income/expense.
(D) 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 Organic Sales % Change (Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31, 2018
2018
Honeywell
Reported sales % change (10)% 3%
Less: Foreign currency translation (1)% 1%
Less: Acquisitions, divestitures and (15)% (4)%
other, net
Organic sales % change 6% 6%
Aerospace
Reported sales % change (12)% 5%
Less: Foreign currency translation (1)% 1%
Less: Acquisitions, divestitures and (21)% (5)%
other, net
Organic sales % change 10% 9%
Honeywell Building Technologies
Reported sales % change (31)% (5)%
Less: Foreign currency translation (2)% 1%
Less: Acquisitions, divestitures and (30)% (9)%
other, net
Organic sales % change 1% 3%
Performance Materials and Technologies
Reported sales % change (2)% 3%
Less: Foreign currency translation (2)% 1%
Less: Acquisitions, divestitures and - -
other, net
Organic sales % change - 2%
Safety and Productivity Solutions
Reported sales % change 15% 12%
Less: Foreign currency translation (1)% 1%
Less: Acquisitions, divestitures and 1% -
other, net
Organic sales % change 15% 11%
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, acquisitions, net of divestitures, and non-comparable
impacts from adoption of the new revenue recognition standard. 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 Cash Provided by Operating Activities to Adjusted Free Cash
Flow and Calculation of Adjusted Free Cash Flow
Conversion (Unaudited)
(Dollars in millions)
Twelve Months Ended Twelve Months Ended
December 31, 2018 December 31, 2017
Cash provided by operating $ $
activities 6,434 5,966
Expenditures for property, (828) (1,031)
plant and equipment
Free cash flow 5,606 4,935
Separation cost payments 424 -
Adjusted free cash flow $ $
6,030 4,935
Net income attributable to $ $
Honeywell 6,765 1,545
Separation costs, includes net 732 14
tax impacts
U.S. Tax Reform (1,494) 3,891
Pension mark-to-market 28 67
Adjusted net income $ $
attributable to Honeywell 6,031 5,517
Cash provided by operating $ $
activities 6,434 5,966
÷ Net income (loss) $ $
attributable to Honeywell 6,765 1,545
Operating cash flow conversion 95% 386%
Adjusted free cash flow $ $
6,030 4,935
÷ Adjusted net income $ $
attributable to Honeywell 6,031 5,517
Adjusted free cash flow 100% 89%
conversion %
We define free cash flow as cash provided by operating activities less cash
expenditures for property, plant and equipment.
We believe that this metric is useful to investors and management as a measure
of cash generated by business operations that will be used to repay scheduled
debt maturities and can be used to invest in future growth through new business
development activities or acquisitions, pay dividends, repurchase stock or
repay debt obligations prior to their maturities. This metric can also be used
to evaluate our ability to generate cash flow from business operations and the
impact that this cash flow has on our liquidity.
Honeywell International Inc
Reconciliation of Cash Provided by Operating Activities to Adjusted Free Cash
Flow (Unaudited)
(Dollars in millions)
Three Months Ended Three Months Ended
December 31, 2018 December 31, 2017
Cash provided by operating $ $
activities 1,559 2,172
Expenditures for property, (306) (418)
plant and equipment
Free cash flow 1,253 1,754
Separation cost payments 233 -
Adjusted free cash flow $ $
1,486 1,754
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 Earnings (loss) per Share to Adjusted Earnings per Share,
Excluding Spin-off Impact (Unaudited)
Three Months Ended
December 31,
2018 2017
Earnings (loss) per share of common stock - $ $
assuming dilution (1) 2.31 (3.32)
Pension mark-to-market expense 0.04 0.09
Separation costs (2) 0.14 0.02
Impacts from U.S. Tax Reform (0.58) 5.06
Impacts of dilution of weighted average number of 0.04
shares outstanding
Adjusted earnings per share of common stock - $ $
assuming dilution 1.91 1.89
Less: EPS, attributable to spin-offs $
0.19
Adjusted earnings per share of common stock - 1.70
assuming dilution, excluding spin-off impact
(1) For the three months ended December 31, 2018 and 2017, adjusted earnings
per share utilizes weighted average shares of approximately 743.9 million and
769 million.
(2) For the three months ended December 31, 2018 and 2017, separation costs of
$104 million and $14 million including net tax impacts.
We believe adjusted earnings per share, excluding spin-off impact, is a
measure that is useful to investors and management in understanding our
ongoing operations and in analysis of ongoing operating trends.
Honeywell International Inc
Reconciliation of Cash Provided by Operating Activities to Adjusted Free Cash
Flow (Unaudited)
Twelve Months Ended Twelve Months
Ended
December 31, 2018 ($M) December 31, 2019
($B)
Cash provided by operating $ $5.9 - $6.5
activities 6,434
Expenditures for property, plant (828) (0.8)
and equipment
Free cash flow 5,606 5.1 - 5.7
Separation cost payments 424 0.3
Adjusted free cash flow $ $5.4 - $6.0
6,030
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.
END
(END) Dow Jones Newswires
February 01, 2019 06:30 ET (11:30 GMT)
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