Honeywell Intl Half-yearly Report -3-
July 18 2014 - 8:34AM
UK Regulatory
2014 2013 2014 2013
Cash flows from operating activities:
Net income $ 1,126 $ 1,022 $ 2,162 $ 1,991
Less: Net income attributable to the noncontrolling interest 27 1 46 4
Net income attributable to Honeywell 1,099 1,021 2,116 1,987
Adjustments to reconcile net income attributable to Honeywell to net
cash provided by operating activities:
Depreciation and amortization 233 247 471 495
Loss on sale of non-strategic businesses and assets 10 - 10 -
Gain on sale of available for sale investments - - (105) -
Repositioning and other charges 117 171 331 299
Net payments for repositioning and other charges (9) (199) (134) (297)
Pension and other postretirement income (51) (45) (100) (44)
Pension and other postretirement benefit payments (49) (42) (85) (213)
Stock compensation expense 50 37 102 91
Deferred income taxes 66 158 68 185
Excess tax benefits from share based payment arrangements (19) (57) (49) (81)
Other 91 (101) 67 (134)
Changes in assets and liabilities, net of the effects of
acquisitions and divestitures:
Accounts, notes and other receivables (271) (53) (425) (195)
Inventories (107) 15 (222) (36)
Other current assets (104) (14) 132 4
Accounts payable 141 265 100 (30)
Accrued liabilities 144 (147) (248) (434)
Net cash provided by operating activities 1,341 1,256 2,029 1,597
Cash flows from investing activities:
Expenditures for property, plant and equipment (229) (196) (421) (344)
Proceeds from disposals of property, plant and equipment 4 6 11 6
Increase in investments (1,093) (286) (1,724) (460)
Decrease in investments 533 210 943 376
Cash paid for acquisitions, net of cash acquired (2) (338) (2) (460)
Proceeds from sales of businesses, net of fees paid 1 - 1 -
Other (74) 52 (13) 19
Net cash used for investing activities (860) (552) (1,205) (863)
Cash flows from financing activities:
Net (decrease) increase in commercial paper (150) - 950 800
Net increase (decrease) in short-term borrowings 4 13 (6) 21
Proceeds from issuance of common stock 69 139 161 303
Proceeds from issuance of long-term debt 20 6 45 13
Payments of long-term debt (4) (1) (606) (601)
Excess tax benefits from share based payment arrangements 19 57 49 81
Repurchases of common stock (231) (463) (551) (602)
Cash dividends paid (373) (343) (736) (665)
Net cash used for financing activities (646) (592) (694) (650)
Effect of foreign exchange rate changes on cash and cash equivalents 75 (102) 30 (169)
Net (decrease) increase in cash and cash equivalents (90) 10 160 (85)
Cash and cash equivalents at beginning of period 6,672 4,539 6,422 4,634
Cash and cash equivalents at end of period $ 6,582 $ 4,549 $ 6,582 $ 4,549
Honeywell International Inc
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
(Unaudited)
(Dollars in millions)
Three Months Ended
June 30,
2014 2013
Cash provided by operating activities $ 1,341 $ 1,256
Expenditures for property, plant and equipment (229) (196)
Free cash flow $ 1,112 $ 1,060
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.
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
June 30,
2014 2013
Segment Profit $ 1,709 $ 1,559
Stock compensation expense (A) (50) (37)
Repositioning and other (A, B) (128) (182)
Pension ongoing income (A) 64 25
Other postretirement income (expense) (A) (13) 20
Operating Income $ 1,582 $ 1,385
Segment Profit $ 1,709 $ 1,559
÷ Sales $ 10,253 $ 9,693
Segment Profit Margin % 16.7% 16.1%
Operating Income $ 1,582 $ 1,385
÷ Sales $ 10,253 $ 9,693
Operating Income Margin % 15.4% 14.3%
(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
June 30,
2014 2013
Income before taxes $ 1,523 $ 1,329
Taxes at 26.5% 404 352
Net income at 26.5% tax rate $ 1,119 $ 977
Less: Net income attributable to the
noncontrolling interest 27 1
Net income attributable to Honeywell at
26.5% tax rate $ 1,092 $ 976
Weighted average number of shares
outstanding - assuming dilution 795.4 798.1
EPS at 26.5% tax rate $ 1.37 $ 1.22
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
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,
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