Honeywell Reports
Second Quarter 2015 Sales Of $9.8
Billion; EPS Of $1.51 Per
Share; Raising 2015 EPS Guidance
- EPS Up 9% Reported, Up 10% Normalized at 26.5% Tax Rate
- Core Organic Sales Growth 3%* Driven By Commercial Aero, ESS and
Advanced Materials
- Reported Sales Decline 5% Due to Foreign Currency and FM
Divestiture
- Segment Margin Improvement of 170 bps to 18.4%
- Raising 2015 EPS Guidance Range to $6.05 -
$6.15, Up 9%-11%
MORRIS TOWNSHIP, N.J.,
July 17, 2015 -- Honeywell
(NYSE: HON) today announced its results for the second quarter of
2015:
Total Honeywell |
|
|
|
($ Millions, except Earnings Per Share) |
2Q 2014 |
2Q 2015 |
Change |
Sales |
10,253 |
9,775 |
(5%) |
|
|
|
|
Segment Margin |
16.7% |
18.4% |
170 bps |
Operating Income Margin |
15.4% |
17.6% |
220 bps |
|
|
|
|
Earnings Per Share |
$1.38 |
$1.51 |
9% |
Earnings Per Share (At 26.5% Tax Rate) |
$1.37 |
$1.51 |
10% |
Cash Flow from Operations |
1,341 |
1,408 |
5% |
Free Cash Flow (1) |
1,112 |
1,165 |
5% |
|
|
|
|
(1) Cash Flow from Operations Less
Capital Expenditures |
|
"Honeywell had a terrific second quarter capping off a strong
first half of 2015," said Honeywell Chairman and CEO Dave Cote. "We delivered 3% core organic sales
growth and had another quarter of double-digit earnings growth when
normalized for tax. We saw growth acceleration in both the short-
and long-cycle businesses within Aerospace, continued growth in our
commercial and industrial businesses within ACS, and higher volume
across our Advanced Materials portfolio, particularly in Fluorine
Products. We saw margin expansion in each segment, with a
significant portion from gross margin, as our new products, process
focus, disciplined cost management, and restructuring continue to
distinguish Honeywell's performance. We remain committed to seed
planting and process improvements throughout our portfolio. Once
again we proactively funded repositioning actions that will improve
our cost position and drive the efficiencies necessary for winning
in a slow growth global economy. Our great first half performance
gives us confidence to again raise the low end of our full-year EPS
guidance range by $0.05 to
$6.05-$6.15, and we remain committed to our full-year
core organic sales growth and free cash flow estimates. We believe
that our balanced portfolio of short- and long-cycle businesses,
penetration in High Growth Regions, and the deployment of our key
process initiatives will continue to drive results this year and
over the long term."
The company is updating its full-year 2015 guidance and now
expects:
2015 Full-Year Guidance |
|
|
|
|
|
|
Change |
|
Prior Guidance |
Revised Guidance |
vs. 2014 |
Sales |
$39.0 -
$39.6B |
$39.0 -
$39.6B |
(2%) - (3%) |
Core Organic Growth |
~3% |
~3% |
|
Segment Margin |
18.3% - 18.6% |
18.4% - 18.6% |
180 - 200 bps
(2) |
Operating Income Margin (Ex-Pension MTM) |
17.4% - 17.7% |
17.5% - 17.7% |
240 - 260 bps
(3) |
|
|
|
|
Earnings Per Share (Ex-Pension MTM) |
$6.00 - $6.15 |
$6.05 - $6.15 |
9% - 11% |
|
|
|
|
Free Cash Flow (1) |
$4.2 - $4.3B |
$4.2 - $4.3B |
8% - 10% |
|
|
|
|
|
|
|
1. Cash Flow from Operations Less Capital
Expenditures |
2. Segment Margin ex-4Q14 $184M OEM Incentives Up
140 - 160 bps |
3. Operating Margin ex-4Q14 $184M OEM Incentives Up
200 - 220 bps |
Second Quarter Segment Performance
Aerospace |
|
|
|
($ Millions) |
2Q 2014 |
2Q 2015 |
% Change |
Sales |
4,010 |
3,827 |
(5%) |
Segment Profit |
759 |
777 |
2% |
Segment Margin |
18.9% |
20.3% |
140 bps |
- Sales for the second quarter were up 3% on a core organic
basis, and were down 5% reported driven by the Friction Materials
divestiture and the unfavorable impact of foreign currency in
Transportation Systems. Commercial OE sales were up 6% on a
reported and core organic basis driven by strong Business and
General Aviation (BGA) engine shipments. Commercial Aftermarket
sales were up 3% on a core organic basis (2% reported) driven by
continued growth in repair and overhaul activities and Air
Transport and Regional (ATR) spares growth, partially offset by a
decline in RMU (Retrofit, Modifications, and Upgrades) sales in
BGA. Defense & Space sales increased 1% on a core organic basis
(flat reported) driven by strong international growth, partially
offset by lower sales to the U.S. government. Transportation
Systems sales were up 5% on a core organic basis driven by new
platform launches and higher gas turbo penetration globally. TS
sales were down 25% reported due to the Friction Materials
divestiture and the unfavorable impact of foreign currency.
- Segment profit was up 2% and segment margins expanded 140 bps
to 20.3%, driven by commercial excellence, the favorable impact of
the Friction Materials divestiture, foreign currency hedges, and
productivity net of inflation, partially offset by the margin
impact of higher OE shipments.
Automation and Control Solutions
|
|
|
|
($ Millions) |
2Q 2014 |
2Q 2015 |
% Change |
Sales |
3,607 |
3,553 |
(1%) |
Segment Profit |
533 |
567 |
6% |
Segment Margin |
14.8% |
16.0% |
120 bps |
- Sales for the second quarter were up 4% on a core organic basis
and down 1% reported driven by the unfavorable impact of foreign
currency. Energy, Safety, and Security (ESS) sales increased 5% on
a core organic basis (flat reported) driven primarily by continued
growth in Scanning & Mobility, Security, and Fire Safety.
Building Solutions & Distribution (BSD) sales increased 3% on a
core organic basis (down 4% reported) driven by continued strength
in Americas Distribution.
- Segment profit was up 6% and segment margins expanded 120 bps
to 16.0% driven by productivity net of inflation and higher volume,
partially offset by continued investments for growth.
Performance Materials and Technologies
|
|
|
|
($ Millions) |
2Q 2014 |
2Q 2015 |
% Change |
Sales |
2,636 |
2,395 |
(9%) |
Segment Profit |
475 |
509 |
7% |
Segment Margin |
18.0% |
21.3% |
330 bps |
- Sales were down 1% on a core organic basis and down 9% reported
driven by the unfavorable impact of foreign currency and raw
materials pricing in Resins & Chemicals. The decrease in core
organic sales was primarily driven by lower volume in UOP and HPS
associated with delays in customer projects and lower UOP catalyst
shipments, partially offset by higher volume across Advanced
Materials, particularly in Fluorine Products.
- Segment profit was up 7% and segment margins increased 330 bps
to 21.3%, driven by productivity net of inflation, commercial
excellence, and the impact of raw materials pricing in Resins &
Chemicals.
Honeywell will discuss its results during its investor
conference call today starting at 9:30 a.m.
EDT. To participate, please dial (888) 298-3451 (domestic)
or (719) 457-2605 (international) approximately ten minutes before
the 9:30 a.m. EDT start. Please
mention to the operator that you are dialing in for Honeywell's
second quarter 2015 earnings call or provide the conference code
HON2Q15. 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,
July 17, until 12:30 p.m. EDT, July
24, by dialing (888) 203-1112 (domestic) or (719) 457-0820
(international). The access code is 8213026.
Honeywell (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; turbochargers; and performance
materials. For more news and information on Honeywell, please visit
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. 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.
*Throughout this press release, core
organic sales growth refers to reported sales growth less the
impacts from foreign currency movement, M&A and raw materials
pricing in the Resins & Chemicals business of PMT. The raw
materials pricing impact is excluded in instances where raw
materials costs are passed through to customers, which drives
fluctuations in selling prices not necessarily tied to volume
growth. A reconciliation of core organic sales growth to reported
sales growth is provided in the attached financial tables.
Honeywell International
Inc. |
Consolidated Statement
of Operations (Unaudited) |
(Dollars in millions,
except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
Product sales |
$
7,798 |
|
$ 8,278 |
|
$ 15,162 |
|
$ 16,123 |
Service sales |
1,977 |
|
1,975 |
|
3,826 |
|
3,809 |
Net sales |
9,775 |
|
10,253 |
|
18,988 |
|
19,932 |
|
|
|
|
|
|
|
|
|
Costs, expenses and other |
|
|
|
|
|
|
|
Cost of products sold (A) |
5,541 |
|
6,047 |
|
10,754 |
|
11,826 |
Cost of services sold (A) |
1,273 |
|
1,249 |
|
2,422 |
|
2,437 |
|
|
6,814 |
|
7,296 |
|
13,176 |
|
14,263 |
Selling, general and administrative
expenses (A) |
1,242 |
|
1,375 |
|
2,472 |
|
2,714 |
Other (income) expense |
(20) |
|
(21) |
|
(40) |
|
(138) |
Interest and other financial
charges |
77 |
|
80 |
|
154 |
|
159 |
|
|
8,113 |
|
8,730 |
|
15,762 |
|
16,998 |
|
|
|
|
|
|
|
|
|
Income before taxes |
1,662 |
|
1,523 |
|
3,226 |
|
2,934 |
Tax expense |
440 |
|
397 |
|
858 |
|
772 |
|
|
|
|
|
|
|
|
|
Net income |
1,222 |
|
1,126 |
|
2,368 |
|
2,162 |
|
|
|
|
|
|
|
|
|
Less: Net income attributable to the noncontrolling
interest |
28 |
|
27 |
|
58 |
|
46 |
|
|
|
|
|
|
|
|
|
Net income attributable to Honeywell |
$
1,194 |
|
$ 1,099 |
|
$
2,310 |
|
$
2,116 |
|
|
|
|
|
|
|
|
|
Earnings per share of common stock - basic |
$
1.52 |
|
$
1.40 |
|
$
2.95 |
|
$
2.70 |
|
|
|
|
|
|
|
|
|
Earnings per share of common stock - assuming
dilution |
$
1.51 |
|
$
1.38 |
|
$
2.91 |
|
$
2.66 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding -
basic |
783.3 |
|
784.5 |
|
783.5 |
|
784.7 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding -
assuming dilution |
792.9 |
|
795.4 |
|
793.4 |
|
795.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Cost of products and services sold and selling,
general and administrative expenses include amounts for
repositioning and other charges, pension and other postretirement
(income) expense, and stock compensation expense. |
Honeywell International
Inc. |
Segment Data
(Unaudited) |
(Dollars in
millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
Net Sales |
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
Aerospace |
$
3,827 |
|
$
4,010 |
|
$
7,434 |
|
$
7,861 |
|
|
|
|
|
|
|
|
|
Automation and Control Solutions |
3,553 |
|
3,607 |
|
6,817 |
|
6,969 |
|
|
|
|
|
|
|
|
|
Performance Materials and Technologies |
2,395 |
|
2,636 |
|
4,737 |
|
5,102 |
|
|
|
|
|
|
|
|
Total |
$
9,775 |
|
$ 10,253 |
|
$ 18,988 |
|
$ 19,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Profit to Income Before Taxes |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
Segment Profit |
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
Aerospace |
$
777 |
|
$
759 |
|
$
1,529 |
|
$
1,462 |
|
|
|
|
|
|
|
|
|
Automation and Control Solutions |
567 |
|
533 |
|
1,083 |
|
1,004 |
|
|
|
|
|
|
|
|
|
Performance Materials and Technologies |
509 |
|
475 |
|
1,012 |
|
948 |
|
|
|
|
|
|
|
|
|
Corporate |
(50) |
|
(58) |
|
(100) |
|
(109) |
|
|
|
|
|
|
|
|
|
Total segment profit |
1,803 |
|
1,709 |
|
3,524 |
|
3,305 |
|
|
|
|
|
|
|
|
|
Other income (A) |
12 |
|
10 |
|
24 |
|
121 |
Interest and other financial charges |
(77) |
|
(80) |
|
(154) |
|
(159) |
Stock compensation expense (B) |
(39) |
|
(50) |
|
(91) |
|
(102) |
Pension ongoing income (B) |
103 |
|
64 |
|
203 |
|
125 |
Other postretirement expense (B) |
(11) |
|
(13) |
|
(20) |
|
(25) |
Repositioning and other charges (B) |
(129) |
|
(117) |
|
(260) |
|
(331) |
|
|
|
|
|
|
|
|
|
Income before taxes |
$
1,662 |
|
$
1,523 |
|
$
3,226 |
|
$
2,934 |
|
|
|
|
|
|
|
|
|
(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) |
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ 5,954 |
|
$ 6,959 |
Accounts, notes and other
receivables |
|
8,237 |
|
7,960 |
Inventories |
|
4,447 |
|
4,405 |
Deferred income taxes |
|
659 |
|
722 |
Investments and other current
assets |
|
3,883 |
|
2,145 |
|
Total current assets |
|
23,180 |
|
22,191 |
|
|
|
|
|
|
Investments and long-term receivables |
|
491 |
|
465 |
Property, plant and equipment - net |
|
5,381 |
|
5,383 |
Goodwill |
|
12,763 |
|
12,788 |
Other intangible assets - net |
|
2,141 |
|
2,208 |
Insurance recoveries for asbestos related
liabilities |
|
433 |
|
454 |
Deferred income taxes |
|
365 |
|
404 |
Other assets |
|
1,658 |
|
1,558 |
|
|
|
|
|
|
|
Total assets |
|
$ 46,412 |
|
$ 45,451 |
|
|
|
|
|
|
LIABILITIES AND SHAREOWNERS' EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ 5,352 |
|
$ 5,365 |
Short-term borrowings |
|
25 |
|
51 |
Commercial paper |
|
2,795 |
|
1,647 |
Current maturities of long-term
debt |
|
1,337 |
|
939 |
Accrued liabilities |
|
6,065 |
|
6,771 |
|
Total current liabilities |
|
15,574 |
|
14,773 |
|
|
|
|
|
|
Long-term debt |
|
5,562 |
|
6,046 |
Deferred income taxes |
|
300 |
|
236 |
Postretirement benefit obligations other than
pensions |
|
921 |
|
911 |
Asbestos related liabilities |
|
1,198 |
|
1,200 |
Other liabilities |
|
4,001 |
|
4,282 |
Redeemable noncontrolling interest |
|
259 |
|
219 |
Shareowners' equity |
|
18,597 |
|
17,784 |
|
Total liabilities, redeemable noncontrolling interest and
shareowners' equity |
|
$ 46,412 |
|
$ 45,451 |
|
|
|
|
|
|
Honeywell International
Inc. |
Consolidated
Statement of Cash Flows (Unaudited) |
(Dollars in
millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ 1,222 |
|
$ 1,126 |
|
$ 2,368 |
|
$ 2,162 |
Less: Net income attributable to the
noncontrolling interest |
|
28 |
|
27 |
|
58 |
|
46 |
Net income attributable to Honeywell |
|
1,194 |
|
1,099 |
|
2,310 |
|
2,116 |
Adjustments to reconcile net income attributable
to Honeywell to net |
|
|
|
|
|
|
|
|
cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
172 |
|
165 |
|
335 |
|
333 |
Amortization |
|
54 |
|
68 |
|
107 |
|
138 |
Loss on sale of
non-strategic businesses and assets |
|
- |
|
10 |
|
- |
|
10 |
Gain on sale of
available for sale investments |
|
- |
|
- |
|
- |
|
(105) |
Repositioning and other
charges |
|
129 |
|
117 |
|
260 |
|
331 |
Net payments for
repositioning and other charges |
|
(115) |
|
(9) |
|
(215) |
|
(134) |
Pension and other
postretirement income |
|
(92) |
|
(51) |
|
(183) |
|
(100) |
Pension and other
postretirement benefit payments |
|
(39) |
|
(49) |
|
(48) |
|
(85) |
Stock compensation
expense |
|
39 |
|
50 |
|
91 |
|
102 |
Deferred income
taxes |
|
33 |
|
66 |
|
126 |
|
68 |
Excess tax benefits from
share based payment arrangements |
|
(9) |
|
(19) |
|
(56) |
|
(49) |
Other |
|
205 |
|
91 |
|
103 |
|
67 |
Changes in assets and
liabilities, net of the effects of |
|
|
|
|
|
|
|
|
acquisitions and
divestitures: |
|
|
|
|
|
|
|
|
Accounts, notes and other receivables |
|
(80) |
|
(271) |
|
(250) |
|
(425) |
Inventories |
|
61 |
|
(107) |
|
(25) |
|
(222) |
Other
current assets |
|
(96) |
|
(104) |
|
(38) |
|
132 |
Accounts payable |
|
88 |
|
141 |
|
(24) |
|
100 |
Accrued liabilities |
|
(136) |
|
144 |
|
(664) |
|
(248) |
Net cash provided by operating activities |
|
1,408 |
|
1,341 |
|
1,829 |
|
2,029 |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Expenditures for property, plant and
equipment |
|
(243) |
|
(229) |
|
(408) |
|
(421) |
Proceeds from disposals of property, plant and
equipment |
|
2 |
|
4 |
|
3 |
|
11 |
Increase in investments |
|
(2,365) |
|
(1,093) |
|
(3,866) |
|
(1,724) |
Decrease in investments |
|
953 |
|
533 |
|
2,059 |
|
943 |
Cash paid for acquisitions, net of cash
acquired |
|
- |
|
(2) |
|
(185) |
|
(2) |
Proceeds from sales of businesses, net of fees
paid |
|
- |
|
1 |
|
2 |
|
1 |
Other |
|
28 |
|
(74) |
|
(150) |
|
(13) |
Net cash used for investing activities |
|
(1,625) |
|
(860) |
|
(2,545) |
|
(1,205) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Net increase (decrease) in commercial paper |
|
100 |
|
(150) |
|
1,148 |
|
950 |
Net (decrease) increase in short-term
borrowings |
|
(23) |
|
4 |
|
(19) |
|
(6) |
Proceeds from issuance of common stock |
|
47 |
|
69 |
|
125 |
|
161 |
Proceeds from issuance of long-term debt |
|
11 |
|
20 |
|
14 |
|
45 |
Payments of long-term debt |
|
(22) |
|
(4) |
|
(57) |
|
(606) |
Excess tax benefits from share based payment
arrangements |
|
9 |
|
19 |
|
56 |
|
49 |
Repurchases of common stock |
|
(123) |
|
(231) |
|
(486) |
|
(551) |
Cash dividends paid |
|
(436) |
|
(373) |
|
(851) |
|
(736) |
Net cash used for financing activities |
|
(437) |
|
(646) |
|
(70) |
|
(694) |
|
|
|
|
|
|
|
|
|
Effect of foreign exchange rate changes on cash and cash
equivalents |
|
33 |
|
75 |
|
(219) |
|
30 |
Net (decrease) increase in cash and cash equivalents |
|
(621) |
|
(90) |
|
(1,005) |
|
160 |
Cash and cash equivalents at beginning of period |
|
6,575 |
|
6,672 |
|
6,959 |
|
6,422 |
Cash and cash equivalents at end of period |
|
$ 5,954 |
|
$ 6,582 |
|
$ 5,954 |
|
$ 6,582 |
|
|
|
|
|
|
|
|
|
Honeywell International
Inc. |
Reconciliation of Cash
Provided by Operating Activities to Free Cash Flow (Unaudited) |
(Dollars in
millions) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
June 30, |
|
2015 |
|
2014 |
|
|
|
|
Cash provided by operating activities |
$
1,408 |
|
$
1,341 |
Expenditures for property, plant and equipment |
(243) |
|
(229) |
|
|
|
|
Free cash flow |
$
1,165 |
|
$
1,112 |
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 |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
Segment Profit |
|
$
1,803 |
|
$
1,709 |
|
$ 3,524 |
|
$ 3,305 |
|
|
|
|
|
|
|
|
|
Stock compensation expense (A) |
|
(39) |
|
(50) |
|
(91) |
|
(102) |
Repositioning and other (A, B) |
|
(137) |
|
(128) |
|
(276) |
|
(348) |
Pension ongoing income (A) |
|
103 |
|
64 |
|
203 |
|
125 |
Other postretirement expense (A) |
|
(11) |
|
(13) |
|
(20) |
|
(25) |
|
|
|
|
|
|
|
|
|
Operating Income |
|
$
1,719 |
|
$
1,582 |
|
$ 3,340 |
|
$ 2,955 |
|
|
|
|
|
|
|
|
|
Segment Profit |
|
$
1,803 |
|
$
1,709 |
|
$ 3,524 |
|
$ 3,305 |
÷ Sales |
|
$
9,775 |
|
$ 10,253 |
|
$ 18,988 |
|
$ 19,932 |
Segment Profit Margin % |
|
18.4% |
|
16.7% |
|
18.6% |
|
16.6% |
|
|
|
|
|
|
|
|
|
Operating Income |
|
$
1,719 |
|
$
1,582 |
|
$ 3,340 |
|
$ 2,955 |
÷ Sales |
|
$
9,775 |
|
$ 10,253 |
|
$ 18,988 |
|
$ 19,932 |
Operating Income Margin % |
|
17.6% |
|
15.4% |
|
17.6% |
|
14.8% |
|
|
|
|
|
|
|
|
|
(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, |
|
|
2014 |
|
|
|
|
Segment Profit |
|
|
$
6,696 |
|
|
|
|
Stock compensation expense (A) |
|
|
(187) |
Repositioning and other (A, B) |
|
|
(634) |
Pension ongoing income (A) |
|
|
254 |
Pension mark-to-market adjustment (A) |
|
|
(249) |
Other postretirement expense (A) |
|
|
(49) |
|
|
|
|
Operating Income |
|
|
$
5,831 |
Pension mark-to-market adjustment (A) |
|
|
(249) |
Operating Income excluding pension mark-to-market adjustment |
|
|
$
6,080 |
|
|
|
|
Segment Profit |
|
|
$
6,696 |
÷ Sales |
|
|
$ 40,306 |
Segment Profit Margin % |
|
|
16.6% |
|
|
|
|
Operating Income |
|
|
$
5,831 |
÷ Sales |
|
|
$ 40,306 |
Operating Income Margin % |
|
|
14.5% |
|
|
|
|
Operating Income excluding pension mark-to-market adjustment |
|
|
$
6,080 |
÷ Sales |
|
|
$ 40,306 |
Operating Income Margin excluding pension mark-to-market adjustment
% |
|
|
15.1% |
|
|
|
|
(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. |
Calculation of EPS at
26.5% Tax Rate (Unaudited) |
(Dollars in millions,
except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
June 30, |
|
|
2015 |
|
2014 |
|
|
|
|
|
Income before taxes |
|
$ 1,662 |
|
$ 1,523 |
|
|
|
|
|
Taxes at 26.5% |
|
440 |
|
404 |
|
|
|
|
|
Net income at 26.5% tax rate |
|
1,222 |
|
1,119 |
|
|
|
|
|
Less: Net income attributable to the noncontrolling interest |
|
28 |
|
27 |
|
|
|
|
|
Net income attributable to Honeywell at 26.5% tax rate |
|
$ 1,194 |
|
$ 1,092 |
|
|
|
|
|
Weighted average number of shares outstanding - assuming
dilution |
|
792.9 |
|
795.4 |
|
|
|
|
|
EPS at 26.5% tax rate |
|
$
1.51 |
|
$
1.37 |
|
|
|
|
|
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 Core
Organic Sales Growth (Unaudited) |
|
|
|
|
|
|
Three Months Ended |
|
June 30, |
|
2015 |
Honeywell |
|
Reported sales growth |
(5%) |
Foreign currency, acquisitions, divestitures and other |
7% |
Raw Materials Pricing in R&C |
1% |
|
|
Core organic sales growth |
3% |
|
|
PMT |
|
Reported sales growth |
(9%) |
Foreign currency, acquisitions, divestitures and other |
4% |
Raw Materials Pricing in R&C |
4% |
|
|
Core organic sales growth |
(1%) |
|
|
Throughout this press release, core organic sales growth refers to
reported sales growth less the impacts from foreign currency
movement, M&A and raw materials pricing in the Resins &
Chemicals business of PMT. The raw materials pricing impact is
excluded in instances where raw materials costs are passed through
to customers, which drives fluctuations in selling prices not
necessarily tied to volume growth. |
|
We believe core organic sales growth 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 Free Cash Flow (Unaudited) |
(Dollars in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended |
|
|
December 31, |
|
|
2014 |
|
|
|
|
Cash provided by operating activities |
|
|
$ 5,024 |
|
|
|
|
Expenditures for property, plant and equipment |
|
|
(1,094) |
|
|
|
|
Free cash flow |
|
|
$ 3,930 |
|
|
|
|
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
Earnings Per Share to Earnings Per Share, Excluding Pension
Mark-to-Market Adjustment (Unaudited) |
|
|
Twelve Months Ended |
|
December 31, |
|
2014 |
|
|
EPS |
$
5.33 |
|
|
Pension mark-to-market adjustment |
0.23 |
|
|
EPS, excluding pension mark-to-market
adjustment |
$
5.56 |
|
|
We believe EPS, excluding pension mark-to-market adjustment is a
measure that is useful to investors and management in
understanding our ongoing operations and in analysis of ongoing
operating trends. |
|
EPS utilizes weighted average shares outstanding - assuming
dilution of 795.2 million. Pension mark-to-market adjustment uses a
blended tax rate of 28.1%. |
Contacts: |
|
Media |
Investor Relations |
Robert C. Ferris |
Mark Macaluso |
(973) 455-3388 |
(973) 455-2222 |
rob.ferris@honeywell.com |
mark.macaluso@honeywell.com |