Honeywell Intl 1st Quarter Results -3-
April 17 2014 - 8:34AM
UK Regulatory
Accounts payable (41) (295)
Accrued liabilities (392) (287)
Net cash provided by operating activities 688 341
Cash flows from investing activities:
Expenditures for property, plant and equipment (192) (148)
Proceeds from disposals of property, plant and equipment 7 -
Increase in investments (631) (174)
Decrease in investments 410 166
Cash paid for acquisitions, net of cash acquired - (122)
Other 61 (33)
Net cash used for investing activities (345) (311)
Cash flows from financing activities:
Net increase in commercial paper 1,100 800
Net (decrease) increase in short-term borrowings (10) 8
Proceeds from issuance of common stock 92 164
Proceeds from issuance of long-term debt 25 7
Payments of long-term debt (602) (600)
Excess tax benefits from share based payment arrangements 30 24
Repurchases of common stock (320) (139)
Cash dividends paid (363) (322)
Net cash used for financing activities (48) (58)
Effect of foreign exchange rate changes on cash and cash
equivalents (45) (67)
Net increase (decrease) in cash and cash equivalents 250 (95)
Cash and cash equivalents at beginning of period 6,422 4,634
Cash and cash equivalents at end of period $ 6,672 $ 4,539
Honeywell International Inc.
Reconciliation of Cash Provided by Operating Activities
to Free Cash Flow (Unaudited)
(Dollars in millions)
Three Months Ended
March 31,
2014 2013
Cash provided by operating activities $ 688 $ 341
Expenditures for property, plant and equipment (192) (148)
Free cash flow $ 496 $ 193
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, and to 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.
Previously, we defined free cash flow as cash provided by operating activities,
less cash expenditures for property, plant and equipment, cash pension
contributions, NARCO Trust establishment payments and cash taxes relating to
the sale of available for sale investments
Reconciliation of Cash Provided by Operating
Activities to Free Cash Flow (Unaudited)
(Dollars in millions)
Three Months Ended
March 31,
2013
Cash provided by operating activities $ 341
Expenditures for property, plant and equipment (148)
$ 193
Cash pension contributions 134
Free cash flow $ 327
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 31,
2014 2013
Segment Profit $ 1,596 $ 1,508
Stock compensation expense (A) (52) (54)
Repositioning and other (A, B) (220) (137)
Pension ongoing income (A) 61 21
Other postretirement expense (A) (12) (22)
Operating Income $ 1,373 $ 1,316
Segment Profit $ 1,596 $ 1,508
÷ Sales $ 9,679 $ 9,328
Segment Profit Margin % 16.5% 16.2%
Operating Income $ 1,373 $ 1,316
÷ Sales $ 9,679 $ 9,328
Operating Income Margin % 14.2% 14.1%
(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.
Reconciliation of Segment Profit to Operating Income Excluding Pension
Mark-to-Market Adjustment and
Calculation of Segment Profit and Operating Income Margins Excluding Pension
Mark-to-Market Adjustment (Unaudited)
(Dollars in millions)
Twelve Months Ended
December 31,
2013
Segment Profit $ 6,351
Stock compensation expense (A) (170)
Repositioning and other (A, B) (699)
Pension ongoing expense (A) 90
Pension mark-to-market adjustment (A) (51)
Other postretirement expense (A) (20)
Operating Income $ 5,501
Pension mark-to-market adjustment (A) $ (51)
Operating Income excluding pension mark-to-market
adjustment $ 5,552
Segment Profit $ 6,351
÷ Sales $ 39,055
Segment Profit Margin % 16.3%
Operating Income $ 5,501
÷ Sales $ 39,055
Operating Income Margin % 14.1%
Operating Income excluding pension mark-to-market
adjustment $ 5,552
÷ Sales $ 39,055
Operating Income Margin excluding pension mark-to-market
adjustment % 14.2%
(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 EPS at 26.5% Tax Rate (Unaudited)
(Dollars in millions, except per share amounts)
Three Months Ended
March 31,
2014 2013
Income before taxes $ 1,411 $ 1,260
Taxes at 26.5% 374 334
Net income at 26.5% tax rate $ 1,037 $ 926
Less: Net income attributable to the noncontrolling
interest 19 3
Net income attributable to Honeywell at 26.5% tax
rate $ 1,018 $ 923
Weighted average number of shares outstanding -
assuming dilution 796.4 797.1
EPS at 26.5% tax rate $ 1.28 $ 1.16
We believe EPS adjusted to expected full-year tax rate at 26.5% 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.
EPS Impact of Gain on Sale of Available for Sale Investments (Unaudited)
(Dollars in millions, except per share amounts)
Three Months Ended
March 31,
2014
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