- Fourth Quarter Sales of $8.1 Billion and EPS of $0.91 - Record
Cash Flow from Operations of $3.9 Billion and Free Cash Flow of
$3.3 Billion in 2009 - Company Reaffirms 2010 Full-Year Financial
Guidance MORRIS TOWNSHIP, N.J., Jan. 29 /PRNewswire-FirstCall/ --
Honeywell (NYSE: HON) today announced full-year 2009 sales of $30.9
billion vs. $36.6 billion in 2008. Earnings per share were $2.85
vs. $3.76 in the prior year. Free cash flow was $3.3 billion (cash
flow from operations of $3.9 billion less capital expenditures).
Free cash flow conversion (free cash flow divided by net income)
was 155% of net income for the full-year. Fourth quarter sales were
$8.1 billion versus $8.7 billion in 2008. Earnings per share were
$0.91 versus $0.97 in the prior year fourth quarter. Free cash flow
was $1.1 billion and cash flow from operations was $1.3 billion.
Fourth quarter free cash flow conversion was 154% of net income.
"Honeywell continues to execute well, as evidenced by our strong
fourth quarter finish and record free cash flow generation in
2009," said Honeywell Chairman and Chief Executive Officer Dave
Cote. "Despite a challenging year, we delivered on our financial
commitments, while continuing to invest in new products, geographic
expansion, and key process initiatives. The benefits from these
investments give us strong momentum entering 2010. We introduced
more than 600 new products last year and expanded our footprint in
key emerging regions. While we continue to plan conservatively for
2010, we are encouraged by the improving order trends and
stabilization in many of our end markets. Our focus on having great
positions in good industries combined with our leading technologies
linked to key mega-trends such as energy efficiency, safety, and
security will drive growth at Honeywell as the economy recovers."
Honeywell also reaffirmed its previously stated 2010 sales guidance
of $31.3-32.2 billion, earnings per share of $2.20-2.40, and free
cash flow of $2.4-2.7 billion (cash flow from operations of
$3.1-3.4 billion). Fourth Quarter Segment Highlights Aerospace --
Sales were down 18% compared with the fourth quarter of 2008,
primarily due to lower volumes in the commercial aerospace
aftermarket, original equipment sales to Business and General
Aviation and Defense sales, partially offset by higher original
equipment sales to large air transports and logistics services. --
Segment profit was down 20% and segment margin decreased 60 bps to
18.6%, primarily due to volume declines, partially offset by cost
savings initiatives and benefits from prior repositioning actions.
-- Honeywell Technology Solutions Inc. (HTSI) won a $257 million
contract from the Army Sustainment Command to provide logistics
services for U.S. Army personnel in Iraq. For the next five years,
Honeywell will provide logistics planning, supply services,
maintenance management, and management of housing, facilities,
property, and construction activities at 11 locations in Iraq for
the 402nd Army Field Support Brigade. -- Honeywell's Enhanced
Ground Proximity Warning System (EGPWS) for helicopters received
technical design and production approval from the Federal Aviation
Administration (FAA). -- Honeywell will provide the fuel-efficient
131-9A Auxiliary Power Unit (APU) to Air Arabia, the first and
leading low-cost carrier in the Middle East and North Africa, in a
deal worth $36 million. The Honeywell 131-9A APUs will be included
on new A320 purchases through 2016. -- The U.S. Army will purchase
additional Honeywell T55 engines and fielding kits for Chinook
helicopters. More than 5,300 T55 engines have been built and the
fleet has accumulated more than seven million hours of global
operation. Automation and Control Solutions -- Sales were down 4%,
compared with the fourth quarter of 2008, resulting from slower
economic growth in the U.S. and Europe, partially offset by the
favorable impact of foreign exchange, continued growth in emerging
regions, and the net favorable impact from acquisitions and
divestitures. -- Segment profit was up 5% and segment margins
increased 130 bps to 14.7% driven by cost savings initiatives and
benefits from prior repositioning actions, more than offsetting the
unfavorable impact of lower volumes and inflation. -- Building
Solutions secured a $79 million renewable energy and building
retrofit program with Eastern Illinois University. It combines
energy-efficient facility upgrades with one of the largest
biomass-fueled heating plants on a university campus and will help
to reduce maintenance, improve infrastructure, and save
approximately $140 million in energy and operating costs over the
next two decades. -- Honeywell was awarded an $11.4 million grant
from the Department of Energy (DOE) as part of the largest single
energy grid modernization investment in U.S. history. The grant was
awarded under the American Recovery and Reinvestment Act (ARRA) and
Honeywell was one of only four non-utility companies to receive
funding. Honeywell will use the grant to support a critical peak
pricing response program to help commercial and industrial
customers of Southern California Edison (SCE) automatically
implement energy management strategies to reduce costs and improve
efficiency. Honeywell has won an additional $82 million as a result
of DOE grants over the past 18 months to fund efforts across its
businesses in renewable energy, electric batteries, and biofuels.
-- Scanning and Mobility signed a multi-year agreement with UPS to
deploy nearly 100,000 mobile computers - making it one of the
largest wins in the AIDC industry. UPS will replace its entire
worldwide fleet of mobile computers with Honeywell products. --
Process Solutions introduced a set of solutions, including a
facility-wide greenhouse gas (GHG) emissions reporting dashboard,
that can help U.S. process manufacturers comply with a new
Environmental Protection Agency (EPA) regulation requiring specific
facilities to track and report GHG emissions. The dashboard can
meet this requirement in a simple, cost-effective, low-risk manner,
and provide flexibility as environmental, regulatory, and operating
conditions change in the future. Transportation Systems -- Sales
were up 13% compared with the fourth quarter of 2008, due to higher
volumes of turbochargers globally and the favorable impact of
foreign exchange. -- Segment profit was up from $6 million to $72
million and segment margins increased 670 bps to 7.4% driven by
cost savings initiatives, benefits from prior period restructuring
actions, and higher volumes. -- Turbo Technologies was awarded new
platform wins with customers including Ford, Peugeot, Volkswagen,
BMW, and Perkins, estimated at approximately $1 billion in revenue
over the life of the programs. The platforms span the European,
Asian, and U.S. markets for both gasoline and diesel passenger and
commercial vehicle applications and are expected to launch
beginning in 2011. -- Honeywell continues to benefit from a high
win-rate on attractive new turbo gas and turbo diesel platforms in
2010. The company unveiled its groundbreaking 3.5L EcoBoost on the
Lincoln MKS, MKT, and Ford Taurus SHO, as well as the VNT(TM)
DualBoost turbocharger on Ford's F350 all-new 6.7-Liter V-8 Power
Stroke diesel engine. Specialty Materials -- Sales were down 5%
compared with the fourth quarter of 2008, resulting from lower
volumes and the unfavorable impact of pass-through raw material
price declines at our Resins and Chemicals business, partially
offset by higher petrochemical catalyst sales and modest market
recovery and inventory restocking within our Electronic Materials
business. -- Segment profit was up 56% and segment margins
increased 670 bps to 17.0% due to lower material costs, pricing
initiatives, and cost savings initiatives. -- Specialty Materials
announced it will establish a new 400,000 square-foot Technology
Center in Gurgaon, India, to expand its global research
capabilities in refining, petrochemical, and other technologies to
better serve customers in the region. The center will open later
this year and will house pilot plants for developing and
demonstrating refining and petrochemical process technology
developed by Honeywell's UOP business, and process and applications
development for fluorine products and nylon materials. --
Honeywell's UOP signed an agreement with China National Petroleum
Corp. to collaborate on a range of biofuel technologies and
projects in China. The two companies will collaborate to
demonstrate existing biofuel technology to produce green
transportation fuels using feedstocks available within China.
Honeywell will discuss its results during its investor conference
call today starting at 8:00 a.m. EST. To participate, please dial
(719) 325-4921 a few minutes before the 8:00 a.m. start. Please
mention to the operator that you are dialing in for Honeywell's
investor conference call. The live webcast of the investor call
will be available through the "Investor Relations" section of the
company's Website (http://www.honeywell.com/investor). Investors
can access a replay of the conference call from 11:00 a.m. EST,
January 29, until midnight, February 5, by dialing (719) 457-0820.
The access code is 6436779. Honeywell (http://www.honeywell.com/)
is a Fortune 100 diversified technology and manufacturing leader,
serving customers worldwide with aerospace products and services;
control technologies for buildings, homes, and industry; automotive
products; turbochargers; and specialty materials. Based in Morris
Township, N.J., Honeywell's shares are traded on the New York,
London, and Chicago Stock Exchanges. For more news and information
on Honeywell, please visit http://www.honeywellnow.com/. 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. Contacts: Media Investor Relations Robert C. Ferris
Elena Doom (973) 455-3388 (973) 455-2222 Consolidated Statement of
Operations (Unaudited)
------------------------------------------------ (In millions
except per share amounts) Three Months Ended Twelve Months Ended
December 31, December 31, 2009 2008 2009 2008 ---- ---- ---- ----
Product sales $6,345 $6,849 $23,914 $29,212 Service sales 1,727
1,863 6,994 7,344 ----- ----- ----- ----- Net sales 8,072 8,712
30,908 36,556 ----- ----- ------ ------ Costs, expenses and other
Cost of products sold (A) 4,856 5,294 18,637 23,043 Cost of
services sold (A) 1,094 1,229 4,548 4,951 ----- ----- ----- -----
5,950 6,523 23,185 27,994 Selling, general and administrative
expenses (A) 1,071 1,179 4,341 5,033 Other (income) expense (69)
(19) (55) (748) Interest and other financial charges 109 114 459
456 --- --- --- --- 7,061 7,797 27,930 32,735 ----- ----- ------
------ Income before taxes 1,011 915 2,978 3,821 Tax expense 300
201 789 1,009 --- --- --- ----- Net income 711 714 2,189 2,812
Less: Net income attributable to the noncontrolling interest 13 7
36 20 -- - -- -- Net income attributable to Honeywell $698 $707
$2,153 $2,792 ==== ==== ====== ====== Earnings per share of common
stock - basic $0.91 $0.97 $2.86 $3.79 ===== ===== ===== =====
Earnings per share of common stock - assuming dilution $0.91 $0.97
$2.85 $3.76 ===== ===== ===== ===== Weighted average number of
shares outstanding-basic 764 729 753 737 === === === === Weighted
average number of shares outstanding - assuming dilution 769 730
756 744 === === === === (A) Cost of products and services sold and
selling, general and administrative expenses include amounts for
repositioning and other charges, pension and other post-retirement
expense, and stock compensation expense. Segment Data (Unaudited)
------------------------- (Dollars in millions) Three Months Ended
Twelve Months Ended December 31, December 31, Net Sales 2009 2008
2009 2008 --------- ---- ---- ---- ---- Aerospace $2,663 $3,229
$10,763 $12,650 Automation and Control Solutions 3,409 3,534 12,611
14,018 Specialty Materials 1,027 1,086 4,144 5,266 Transportation
Systems 972 863 3,389 4,622 Corporate 1 - 1 - - - - - Total $8,072
$8,712 $30,908 $36,556 ====== ====== ======= ======= Reconciliation
of Segment Profit to Income Before Taxes
------------------------------------------------------- Three
Months Ended Twelve Months Ended December 31, December 31,
------------ ------------ Segment Profit 2009 2008 2009 2008
-------------- ---- ---- ---- ---- Aerospace $496 $619 $1,893
$2,300 Automation and Control Solutions 500 474 1,588 1,622
Specialty Materials 175 112 605 721 Transportation Systems 72 6 156
406 Corporate (12) (51) (145) (204) --- --- ---- ---- Total Segment
Profit 1,231 1,160 4,097 4,845 Other income/ (expense) (A) 66 5 29
685 Interest and other financial charges (109) (114) (459) (456)
Stock compensation expense (B) (23) (21) (118) (128) Pension and
other postretirement expense (B) (45) (24) (93) (113) Repositioning
and other charges (B) (109) (91) (478) (1,012) ---- --- ---- ------
Income before taxes $1,011 $915 $2,978 $3,821 ====== ==== ======
====== (A) Equity income/(loss) of affiliated companies is included
in Segment Profit (B) Amounts included in cost of products and
services sold and selling, general and administrative expenses.
Honeywell International Inc. Consolidated Balance Sheet (Unaudited)
-------------------------------------- (Dollars in millions)
December 31, December 31, 2009 2008 ---- ---- ASSETS Current
assets: Cash and cash equivalents $2,801 $2,065 Accounts, notes and
other receivables 6,274 6,129 Inventories 3,446 3,848 Deferred
income taxes 1,034 922 Other current assets 381 299 --- --- Total
current assets 13,936 13,263 Investments and long-term receivables
579 670 Property, plant and equipment - net 4,847 4,934 Goodwill
10,494 10,185 Other intangible assets - net 2,174 2,267 Insurance
recoveries for asbestos related liabilities 941 1,029 Deferred
income taxes 2,017 2,135 Other assets 1,016 1,007 ----- ----- Total
assets $36,004 $35,490 ======= ======= LIABILITIES AND SHAREOWNERS'
EQUITY Current liabilities: Accounts payable $3,633 $3,773
Short-term borrowings 45 56 Commercial paper 298 1,431 Current
maturities of long-term debt 1,018 1,023 Accrued liabilities 6,153
6,006 ----- ----- Total current liabilities 11,147 12,289 Long-term
debt 6,246 5,865 Deferred income taxes 542 698 Postretirement
benefit obligations other than pensions 1,594 1,799 Asbestos
related liabilities 1,040 1,538 Other liabilities 6,481 6,032
Shareowners' equity 8,954 7,269 ----- ----- Total liabilities and
shareowners' equity $36,004 $35,490 ======= ======= Honeywell
International Inc. Consolidated Statement of Cash Flows (Unaudited)
------------------------------------------------ (Dollars in
millions) Three Months Ended Twelve Months Ended December 31,
December 31, ------------ ------------ 2009 2008 2009 2008 ----
---- ---- ---- Cash flows from operating activities: Net income
attributable to Honeywell $698 $707 $2,153 $2,792 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 246 210 957 903 Gain on sale of non-
strategic businesses and assets (72) - (87) (635) Repositioning and
other charges 108 91 477 1,012 Net payments for repositioning and
other charges (211) (209) (658) (446) Pension and other
postretirement expense 45 24 93 113 Pension and other
postretirement benefit payments (45) (61) (189) (214) Stock
compensation expense 23 21 118 128 Deferred income taxes (61) (133)
371 115 Excess tax benefits from share based payment arrangements
(1) - (1) (21) Other (13) 53 261 81 Changes in assets and
liabilities, net of the effects of acquisitions and divestitures:
Accounts, notes and other receivables 142 857 344 392 Inventories
129 232 479 (161) Other current assets 18 29 (31) 25 Accounts
payable 438 (362) (167) (152) Accrued liabilities (113) (200) (174)
(141) ---- ---- ---- ---- Net cash provided by operating activities
1,331 1,259 3,946 3,791 ----- ----- ----- ----- Cash flows from
investing activities: Expenditures for property, plant and
equipment (257) (332) (609) (884) Proceeds from disposals of
property, plant and equipment 10 1 31 53 Increase in investments
(24) (2) (24) (6) Decrease in investments - 4 1 18 Cash paid for
acquisitions, net of cash acquired - (73) (468) (2,181) Proceeds
from sales of businesses, net of fees paid - (12) 1 909 Other (12)
61 (65) 68 --- -- --- -- Net cash used for investing activities
(283) (353) (1,133) (2,023) ---- ---- ------ ------ Cash flows from
financing activities: Net decrease in commercial paper (398) (784)
(1,133) (325) Net decrease in short- term borrowings (208) (23)
(521) (1) Proceeds from issuance of common stock 17 4 37 146
Proceeds from issuance of long-term debt - - 1,488 1,487 Payments
of long-term debt (2) (3) (1,106) (428) Excess tax benefits from
share based payment arrangements 1 - 1 21 Repurchases of common
stock - - - (1,459) Cash dividends paid (234) (201) (918) (811)
---- ---- ---- ---- Net cash used for financing activities (824)
(1,007) (2,152) (1,370) ---- ------ ------ ------ Effect of foreign
exchange rate changes on cash and cash equivalents (27) (126) 75
(162) --- ---- -- ---- Net increase in cash and cash equivalents
197 (227) 736 236 Cash and cash equivalents at beginning of period
2,604 2,292 2,065 1,829 ----- ----- ----- ----- Cash and cash
equivalents at end of period $2,801 $2,065 $2,801 $2,065 ======
====== ====== ====== Honeywell International Inc. Reconciliation of
Cash Provided by Operating Activities to Free Cash Flow and
Calculation of Free Cash Flow Conversion (Unaudited)
-------------------------------------------------------------------------
(Dollars in millions) Three Months Twelve Months Ended Ended
December 31, December 31, ------------ ------------ 2009 2008 2009
2008 ---- ---- ---- ---- Cash provided by operating activities
$1,331 $1,259 $3,946 $3,791 Expenditures for property, plant and
equipment (257) (332) (609) (884) ---- ---- ---- ---- Free cash
flow 1,074 927 3,337 2,907 ----- --- ----- ----- Cash taxes
relating to the sale of the Consumables Solutions business - 166 -
166 --- --- --- --- Free cash flow excluding cash taxes relating to
the sale of the Consumables Solutions business $1,074 $1,093 $3,337
$3,073 ====== ====== ====== ====== We define free cash flow as cash
provided by operating activities, less cash expenditures for
property, plant and equipment. Three Months Twelve Months Ended
Ended December 31, December 31, ------------ ------------ 2009 2009
---- ---- Free cash flow $1,074 $3,337 Divided by net income,
attributable to Honeywell 698 2,153 --- ----- Free cash flow
conversion 154% 155% === === We define free cash flow conversion as
free cash flow divided by net income, attributable to Honeywell. We
believe that free cash flow, free cash flow less cash taxes related
to the sale of the Consumables Solutions business, and free cash
flow conversion are useful to investors and management as measures
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,
and to pay dividends, repurchase stock, or repay debt obligations
prior to their maturities. These metrics 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.
DATASOURCE: Honeywell CONTACT: Media, Robert C. Ferris, (973)
455-3388, , Investor Relations, Elena Doom, (973) 455-2222, Web
Site: http://www.honeywell.com/
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