Honeywell Reports Full-Year 2015 Sales Of $38.6 Billion; Earnings Up 10% To $6.10
- 4Q15 EPS (Ex-Pension MTM) of $1.58,
Up 10%; Core Organic Sales ~Flat*
- 4Q15 Segment Margin Improvement of 290 bps to 18.8%, Up 140 bps
Ex-4Q14 $184M OEM Incentives
- Completed Acquisition of Elster on December 29, 2015, Integration Underway
- Reaffirming 2016 EPS Guidance (Ex-Pension MTM) of $6.45-$6.70, Up 6-10%
MORRIS PLAINS, N.J.,
Jan. 29, 2016 -- Honeywell
(NYSE: HON) today announced results for the fourth quarter
and full-year of 2015:
Total Honeywell |
|
|
|
|
|
|
|
($ Millions, except Earnings Per
Share) |
FY 2014 |
FY 2015 |
Change |
Sales |
40,306 |
38,581 |
(4%) |
Segment Margin |
16.6% |
18.8% |
220 bps |
Operating Income Margin (Ex-Pension MTM) |
15.1% |
17.9% |
280 bps |
Earnings Per Share (Reported) |
$5.33 |
$6.04 |
13% |
Earnings Per Share (Ex-Pension MTM) |
$5.56 |
$6.10 |
10% |
Cash Flow from Operations |
5,024 |
5,454 |
9% |
Free Cash Flow
(1) |
3,930 |
4,381 |
11% |
|
|
|
|
|
4Q 2014 |
4Q 2015 |
Change |
Sales |
10,266 |
9,982 |
(3%) |
Segment Margin |
15.9% |
18.8% |
290 bps |
Operating Income Margin (Ex-Pension MTM) |
14.5% |
18.0% |
350 bps |
Earnings Per Share (Reported) |
$1.20 |
$1.53 |
28% |
Earnings Per Share (Ex-Pension MTM) |
$1.43 |
$1.58 |
10% |
Cash Flow from Operations |
1,762 |
1,959 |
11% |
Free Cash Flow
(1) |
1,348 |
1,571 |
17% |
|
|
|
|
(1) Cash Flow from
Operations Less Capital Expenditures |
|
*Throughout this press release, core
organic sales growth refers to reported sales growth less the
impacts from foreign currency translation, M&A and raw
materials pass-through 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 tied to
volume growth. A reconciliation of core organic sales growth to
reported sales growth is provided in the attached financial
tables. |
"Honeywell delivered a strong fourth quarter, capping off
another year of robust margin expansion, earnings growth, and cash
flow," said Honeywell Chairman and CEO Dave
Cote. "We grew earnings 10% in a tough environment,
representing our sixth consecutive year of double-digit earnings
growth. Segment margins grew by 220 basis points driven by strong
execution across the portfolio and our key process initiatives,
including HOS Gold. Free Cash Flow for the full year increased 11%
to $4.4 billion, which exceeded the
high-end of our guidance range and included over 125% conversion in
the fourth quarter. We committed to more than $6 billion in acquisitions in 2015 to bolster our
Great Positions in Good Industries, reinvested $1.1 billion in our businesses through
high-return capital expenditure projects, and returned more than
$3.5 billion to our shareowners,
including a 15% increase in our dividend. We also funded more than
$160 million in new restructuring
projects, including $60 million in
the fourth quarter, which will put us in an even stronger position
for the future."
"We are planning conservatively in 2016 as we are expecting
another year of slow global economic growth," continued Cote. "But,
we remain confident in Honeywell's ability to outperform. We will
support growth where there are opportunities to drive
outperformance, be cautious in our sales planning, plan costs and
spending conservatively, and continue to support the seed planting
for new products, services, geographies, and process improvements
that allow us to perform well now and in the future. We expect
continued margin expansion and earnings outperformance in 2016 and
over the long term, supported by our balanced portfolio, HOS Gold
breakthrough goals, further penetration of High Growth Regions, and
funded restructuring projects."
The company also reaffirms its full-year 2016 guidance.
2016 Full-Year Guidance |
|
|
|
|
|
|
2016
Current Guidance |
Change
vs. 2015 |
Sales |
$39.9B - $40.9B |
3% - 6% |
Core Organic Growth |
|
1% - 2% |
Segment Margin |
18.9% - 19.3% |
10 - 50 bps (2) |
Operating Income Margin (Ex-Pension MTM) |
18.0% - 18.4% |
10 - 50 bps (3) |
Earnings Per Share (Ex-Pension MTM) |
$6.45 - $6.70 |
6% - 10% |
Free Cash Flow (1) |
$4.6 - $4.8B |
5% - 10% |
|
|
|
1.
Cash Flow from Operations Less Capital Expenditures |
2.
Segment Margin Ex-M&A Up 80 - 110 bps |
3.
Operating Margin Ex-M&A Up 80 - 110 bps |
Full-year and fourth quarter 2015 results by business segment
are provided below.
Segment Performance |
|
|
|
|
|
|
Aerospace |
|
|
|
|
|
|
|
($ Millions) |
FY 2014 |
FY 2015 |
% Change |
Sales |
15,598 |
15,237 |
(2%) |
Segment Profit |
2,915 |
3,218 |
10% |
Segment Margin |
18.7% |
21.1% |
240 bps |
|
|
|
|
($ Millions) |
4Q 2014 |
4Q 2015 |
% Change |
Sales |
3,842 |
3,983 |
4% |
Segment Profit |
663 |
856 |
29% |
Segment Margin |
17.3% |
21.5% |
420 bps |
- Sales for the fourth quarter were up 2% on a core organic
basis, and were up 4% reported driven by the $184 million OEM incentives incurred in the
fourth quarter of 2014 partially offset by the unfavorable impact
of foreign currency. Commercial OE sales were up 9% on a core
organic basis (45% reported) driven by strong Business and General
Aviation (BGA) engine shipments and higher shipments to large Air
Transport and Regional (ATR) OEMs. Commercial Aftermarket
sales were up 3% on a core organic basis (2% reported) driven by
continued growth in repair and overhaul activities. Defense
& Space sales decreased (1%) on a core organic basis (down 3%
reported) driven by lower sales to the U.S. government and a
difficult prior year comparison in the international
business. Transportation Systems sales were up 1% on a core
organic basis driven by new platform launches and higher diesel and
gas turbo penetration on passenger vehicles, partially offset by
lower commercial vehicle production. TS sales were down (10%)
reported due to the unfavorable impact of foreign currency.
- Segment profit for the fourth quarter was up 29% and segment
margins expanded 420 bps to 21.5%, driven by the fourth quarter
2014 OEM incentives, productivity net of inflation, and commercial
excellence, partially offset by the margin impact of higher OE
shipments and continued investments for growth. Excluding the
fourth quarter 2014 OEM incentives, segment profit was up 1%, and
segment margins expanded 50 basis points.
Automation and Control
Solutions |
|
|
|
|
($ Millions) |
FY 2014 |
FY 2015 |
% Change |
Sales |
14,487 |
14,109 |
(3%) |
Segment Profit |
2,200 |
2,313 |
5% |
Segment Margin |
15.2% |
16.4% |
120 bps |
|
|
|
|
($ Millions) |
4Q 2014 |
4Q 2015 |
% Change |
Sales |
3,847 |
3,721 |
(3%) |
Segment Profit |
613 |
616 |
Flat |
Segment Margin |
15.9% |
16.6% |
70 bps |
- Sales for the fourth quarter were flat on a core organic basis
and down (3%) reported driven by the unfavorable impact of foreign
currency. Energy, Safety & Security (ESS) sales decreased
(1%) on a core organic basis (down 3% reported) driven primarily by
a difficult prior year comparison in Sensing & Productivity
Solutions (S&PS), partially offset by continued growth in
Security and Fire (HSF) on a global basis. Building Solutions
& Distribution (BSD) sales increased 3% on a core organic basis
(down 3% reported) driven by continued strength in Americas
Distribution partially offset by slowing Building Solutions backlog
conversion.
- Segment profit for the fourth quarter was flat and segment
margins expanded 70 bps to 16.6% driven by productivity net of
inflation, benefits of previously funded restructuring projects,
and commercial excellence, partially offset by continued
investments for growth.
Performance Materials and
Technologies |
|
|
|
|
($ Millions) |
FY 2014 |
FY 2015 |
% Change |
Sales |
10,221 |
9,235 |
(10%) |
Segment Profit |
1,817 |
1,935 |
6% |
Segment Margin |
17.8% |
21.0% |
320 bps |
|
|
|
|
($ Millions) |
4Q 2014 |
4Q 2015 |
% Change |
Sales |
2,577 |
2,278 |
(12%) |
Segment Profit |
425 |
462 |
9% |
Segment Margin |
16.5% |
20.3% |
380 bps |
- Sales for the fourth quarter were down (4%) on a core organic
basis and down (12%) reported driven by the unfavorable impact of
foreign currency and lower raw materials pass-through pricing in
Resins & Chemicals. The decrease in core organic sales
was primarily driven by lower UOP gas processing, equipment and
licensing sales, HPS field products weakness, and lower volume in
Resins & Chemicals, partially offset by higher UOP catalyst
shipments and higher volume in Fluorine Products.
- Segment profit for the fourth quarter was up 9% and segment
margins increased 380 bps to 20.3%, driven by productivity net of
inflation, commercial excellence, and the favorable impact of raw
materials pass-through pricing in Resins & Chemicals (pricing
model protects profit dollars).
Honeywell will discuss its results during its investor
conference call today starting at 9:30 a.m.
EST. To participate on the conference call, please dial
(877) 780-3381 (domestic) or (719) 325-2336 (international)
approximately ten minutes before the 9:30
a.m. EST start. Please mention to the operator that you are
dialing in for Honeywell's fourth quarter 2015 earnings call. 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, January 29, until 12:30
p.m. EST, February 5, by
dialing (888) 203-1112 (domestic) or (719) 457-0820
(international). The access code is 4078904.
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; turbochargers; and
performance materials. 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. 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.
Honeywell International Inc |
|
Consolidated Statement of Operations (Unaudited) |
|
(Dollars in millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended |
|
Twelve Months Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
Product sales |
$
7,960 |
|
$
8,185 |
|
$
30,695 |
|
$
32,398 |
|
Service sales |
2,022 |
|
2,081 |
|
7,886 |
|
7,908 |
|
Net sales |
9,982 |
|
10,266 |
|
38,581 |
|
40,306 |
|
|
|
|
|
|
|
|
|
|
|
Costs, expenses and
other |
|
|
|
|
|
|
|
|
Cost of
products sold (A) |
5,649 |
|
6,203 |
|
21,775 |
|
23,889 |
|
Cost of
services sold (A) |
1,268 |
|
1,363 |
|
4,972 |
|
5,068 |
|
|
|
6,917 |
|
7,566 |
|
26,747 |
|
28,957 |
|
Selling, general and administrative expenses (A) |
1,332 |
|
1,460 |
|
5,006 |
|
5,518 |
|
Other
(income) expense |
(4) |
|
(146) |
|
(68) |
|
(305) |
|
Interest and other financial charges |
84 |
|
82 |
|
310 |
|
318 |
|
|
|
8,329 |
|
8,962 |
|
31,995 |
|
34,488 |
|
|
|
|
|
|
|
|
|
|
|
Income before taxes |
1,653 |
|
1,304 |
|
6,586 |
|
5,818 |
|
Tax expense |
450 |
|
329 |
|
1,739 |
|
1,489 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
1,203 |
|
975 |
|
4,847 |
|
4,329 |
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to the noncontrolling interest |
9 |
|
19 |
|
79 |
|
90 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
Honeywell |
$
1,194 |
|
$
956 |
|
$
4,768 |
|
$
4,239 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of
common stock - basic |
$
1.55 |
|
$
1.22 |
|
$
6.11 |
|
$
5.40 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of
common stock - assuming dilution |
$
1.53 |
|
$
1.20 |
|
$
6.04 |
|
$
5.33 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding - basic |
771.8 |
|
783.8 |
|
779.8 |
|
784.4 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding - assuming dilution |
780.8 |
|
794.1 |
|
789.3 |
|
795.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
|
|
|
|
|
|
|
|
|
|
Below is a reconciliation of Earnings per
share to Earnings per share, excluding mark-to-market pension
expense. We believe this measure is useful to investors and
management in understanding our ongoing operations and in analysis
of ongoing operating trends. |
|
|
|
|
|
Three
Months Ended |
|
Twelve
Months Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2015
1 |
|
2014
1 |
|
2015
1 |
|
2014
1 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of common stock -
assuming dilution |
$
1.53 |
|
$
1.20 |
|
$
6.04 |
|
$
5.33 |
|
|
Mark-to-market pension expense |
0.05 |
|
0.23 |
|
0.06 |
|
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share of common stock -
assuming dilution, |
|
|
|
|
|
|
|
|
|
excluding mark-to-market pension
expense |
$
1.58 |
|
$
1.43 |
|
$
6.10 |
|
$
5.56 |
|
|
|
|
|
|
|
|
|
|
|
|
1- EPS utilizes weighted average shares
outstanding and the effective tax rate for the period.
Mark-to-market uses a blended tax rate of 36.1% and 28.1% for 2015
and 2014. |
|
|
|
|
|
|
|
|
|
|
|
Honeywell
International Inc |
Segment Data
(Unaudited) |
(Dollars in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months
Ended |
|
|
|
December 31, |
|
December 31, |
Net Sales |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$
3,983 |
|
$
3,842 |
|
$ 15,237 |
|
$ 15,598 |
|
|
|
|
|
|
|
|
|
|
Automation and Control
Solutions |
|
3,721 |
|
3,847 |
|
14,109 |
|
14,487 |
|
|
|
|
|
|
|
|
|
|
Performance Materials and
Technologies |
|
2,278 |
|
2,577 |
|
9,235 |
|
10,221 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$
9,982 |
|
$ 10,266 |
|
$ 38,581 |
|
$ 40,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Profit to Income Before Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months
Ended |
|
|
|
December 31, |
|
December 31, |
Segment Profit |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$
856 |
|
$
663 |
|
$
3,218 |
|
$
2,915 |
|
|
|
|
|
|
|
|
|
|
Automation and Control
Solutions |
|
616 |
|
613 |
|
2,313 |
|
2,200 |
|
|
|
|
|
|
|
|
|
|
Performance Materials and
Technologies |
|
462 |
|
425 |
|
1,935 |
|
1,817 |
|
|
|
|
|
|
|
|
|
|
Corporate |
|
(54) |
|
(69) |
|
(210) |
|
(236) |
|
|
|
|
|
|
|
|
|
|
|
Total segment profit |
|
1,880 |
|
1,632 |
|
7,256 |
|
6,696 |
|
|
|
|
|
|
|
|
|
|
Other (expense) income
(A) |
|
(1) |
|
137 |
|
38 |
|
269 |
Interest and other
financial charges |
|
(84) |
|
(82) |
|
(310) |
|
(318) |
Stock compensation
expense (B) |
|
(43) |
|
(44) |
|
(175) |
|
(187) |
Pension ongoing income
(B) |
|
131 |
|
67 |
|
430 |
|
254 |
Pension mark-to-market
expense (B) |
|
(67) |
|
(249) |
|
(67) |
|
(249) |
Other postretirement
expense (B) |
|
(10) |
|
(12) |
|
(40) |
|
(49) |
Repositioning and other
charges (B) |
|
(153) |
|
(145) |
|
(546) |
|
(598) |
|
|
|
|
|
|
|
|
|
|
Income before taxes |
|
$
1,653 |
|
$
1,304 |
|
$
6,586 |
|
$
5,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, |
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
Cash
and cash equivalents |
|
$
5,455 |
|
$
6,959 |
Accounts, notes and other receivables |
|
8,075 |
|
7,960 |
Inventories |
|
4,420 |
|
4,405 |
Deferred income taxes |
|
- |
|
722 |
Investments and other current assets |
|
2,103 |
|
2,145 |
|
Total current assets |
|
20,053 |
|
22,191 |
|
|
|
|
|
|
Investments and long-term
receivables |
|
517 |
|
465 |
Property, plant and
equipment - net |
|
5,789 |
|
5,383 |
Goodwill |
|
15,895 |
|
12,788 |
Other intangible assets -
net |
|
4,577 |
|
2,208 |
Insurance recoveries for
asbestos related liabilities |
|
426 |
|
454 |
Deferred income
taxes |
|
283 |
|
404 |
Other assets |
|
1,776 |
|
1,558 |
|
|
|
|
|
|
|
Total assets |
|
$ 49,316 |
|
$ 45,451 |
|
|
|
|
|
|
LIABILITIES AND SHAREOWNERS' EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$
5,580 |
|
$
5,365 |
Commercial paper and other short-term borrowings |
|
5,937 |
|
1,698 |
Current maturities of long-term debt |
|
577 |
|
939 |
Accrued liabilities |
|
6,277 |
|
6,771 |
|
Total current liabilities |
|
18,371 |
|
14,773 |
|
|
|
|
|
|
Long-term debt |
|
5,554 |
|
6,046 |
Deferred income
taxes |
|
558 |
|
236 |
Postretirement benefit
obligations other than pensions |
|
526 |
|
911 |
Asbestos related
liabilities |
|
1,251 |
|
1,200 |
Other liabilities |
|
4,348 |
|
4,282 |
Redeemable noncontrolling
interest |
|
290 |
|
219 |
Shareowners' equity |
|
18,418 |
|
17,784 |
|
|
|
|
|
|
|
Total liabilities, redeemable noncontrolling interest
and shareowners' equity |
|
$ 49,316 |
|
$ 45,451 |
|
|
|
|
|
|
Honeywell International
Inc |
Consolidated
Statement of Cash Flows (Unaudited) |
(Dollars in
millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months
Ended |
|
|
December 31, |
|
December 31, |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ 1,203 |
|
$
975 |
|
$ 4,847 |
|
$ 4,329 |
Less: Net income attributable to
the noncontrolling interest |
|
9 |
|
19 |
|
79 |
|
90 |
Net income attributable to
Honeywell |
|
1,194 |
|
956 |
|
4,768 |
|
4,239 |
Adjustments to reconcile net income
attributable to Honeywell to net |
|
|
|
|
|
|
|
|
cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
169 |
|
168 |
|
672 |
|
667 |
Amortization |
|
53 |
|
58 |
|
211 |
|
257 |
Loss on
sale of non-strategic businesses and assets |
|
2 |
|
- |
|
1 |
|
11 |
Gain on
sale of available for sale investments |
|
- |
|
(116) |
|
- |
|
(221) |
Repositioning and other charges |
|
153 |
|
145 |
|
546 |
|
598 |
Net
payments for repositioning and other charges |
|
(208) |
|
(229) |
|
(537) |
|
(530) |
Pension and
other postretirement (income) expense |
|
(54) |
|
194 |
|
(323) |
|
44 |
Pension and
other postretirement benefit payments |
|
(38) |
|
(44) |
|
(122) |
|
(167) |
Stock
compensation expense |
|
43 |
|
44 |
|
175 |
|
187 |
Deferred
income taxes |
|
31 |
|
(123) |
|
315 |
|
132 |
Excess tax
benefits from share based payment arrangements |
|
(12) |
|
(31) |
|
(81) |
|
(102) |
Other |
|
(98) |
|
(120) |
|
(8) |
|
(327) |
Changes in
assets and liabilities, net of the effects of |
|
|
|
|
|
|
|
|
acquisitions and divestitures: |
|
|
|
|
|
|
|
|
Accounts, notes and other receivables |
|
159 |
|
357 |
|
211 |
|
(172) |
Inventories |
|
250 |
|
79 |
|
230 |
|
(200) |
Other
current assets |
|
191 |
|
(61) |
|
80 |
|
120 |
Accounts payable |
|
(4) |
|
153 |
|
(17) |
|
307 |
Accrued liabilities |
|
128 |
|
332 |
|
(667) |
|
181 |
Net cash provided by operating activities |
|
1,959 |
|
1,762 |
|
5,454 |
|
5,024 |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Expenditures for property, plant
and equipment |
|
(388) |
|
(414) |
|
(1,073) |
|
(1,094) |
Proceeds from disposals of
property, plant and equipment |
|
12 |
|
6 |
|
15 |
|
18 |
Increase in investments |
|
(1,013) |
|
(935) |
|
(6,714) |
|
(4,074) |
Decrease in investments |
|
2,537 |
|
1,164 |
|
6,587 |
|
3,288 |
Cash paid for acquisitions, net of
cash acquired |
|
(5,043) |
|
- |
|
(5,228) |
|
(4) |
Proceeds from sales of businesses,
net of fees paid |
|
(2) |
|
3 |
|
1 |
|
160 |
Other |
|
(33) |
|
(61) |
|
(102) |
|
(170) |
Net cash used for investing activities |
|
(3,930) |
|
(237) |
|
(6,514) |
|
(1,876) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Net increase (decrease) in
commercial paper and other short-term borrowings |
|
2,254 |
|
(236) |
|
4,265 |
|
309 |
Proceeds from issuance of common
stock |
|
36 |
|
59 |
|
186 |
|
265 |
Proceeds from issuance of long-term
debt |
|
12 |
|
18 |
|
60 |
|
97 |
Payments of long-term debt |
|
(732) |
|
(2) |
|
(880) |
|
(609) |
Excess tax benefits from share
based payment arrangements |
|
12 |
|
31 |
|
81 |
|
102 |
Repurchases of common stock |
|
(163) |
|
(235) |
|
(1,884) |
|
(924) |
Cash dividends paid |
|
(465) |
|
(409) |
|
(1,726) |
|
(1,510) |
Other |
|
- |
|
5 |
|
- |
|
(2) |
Net cash provided by (used for) financing
activities |
|
954 |
|
(769) |
|
102 |
|
(2,272) |
|
|
|
|
|
|
|
|
|
Effect of foreign exchange rate changes on cash and
cash equivalents |
|
(91) |
|
(225) |
|
(546) |
|
(339) |
Net (decrease) increase in cash and cash
equivalents |
|
(1,108) |
|
531 |
|
(1,504) |
|
537 |
Cash and cash equivalents at beginning of period |
|
6,563 |
|
6,428 |
|
6,959 |
|
6,422 |
Cash and cash equivalents at end of period |
|
$ 5,455 |
|
$ 6,959 |
|
$ 5,455 |
|
$ 6,959 |
|
|
|
|
|
|
|
|
|
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 Ended |
|
Twelve Months
Ended |
|
December 31, |
|
December 31, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
Cash provided by operating activities |
$
1,959 |
|
$
1,762 |
|
$
5,454 |
|
$
5,024 |
Expenditures for property, plant and equipment |
(388) |
|
(414) |
|
(1,073) |
|
(1,094) |
Free cash flow |
$
1,571 |
|
$
1,348 |
|
$ 4,381 |
|
$
3,930 |
|
|
|
|
|
|
|
|
Net income, attributable to Honeywell |
$
1,194 |
|
$
956 |
|
$ 4,768 |
|
$
4,239 |
Pension mark-to-market adjustment, net of tax (A) |
43 |
|
179 |
|
43 |
|
179 |
Net income, attributable to Honeywell, excluding
pension mark-to-market adjustment |
$
1,237 |
|
$
1,135 |
|
$ 4,811 |
|
$
4,418 |
|
|
|
|
|
|
|
|
Cash provided by operating activities |
$
1,959 |
|
$
1,762 |
|
$ 5,454 |
|
$
5,024 |
÷ Net income, attributable to Honeywell |
$
1,194 |
|
$
956 |
|
$ 4,768 |
|
$
4,239 |
Operating cash flow conversion |
164% |
|
184% |
|
114% |
|
119% |
|
|
|
|
|
|
|
|
Free cash flow |
$
1,571 |
|
$
1,348 |
|
$ 4,381 |
|
$
3,930 |
÷ Net income, attributable to Honeywell, excluding
pension mark-to-market adjustment |
$
1,237 |
|
$
1,135 |
|
$ 4,811 |
|
$
4,418 |
Free cash flow conversion |
127% |
|
119% |
|
91% |
|
89% |
|
|
|
|
|
|
|
|
(A) Mark-to-market uses a
blended tax rate of 36.1% and 28.1% for 2015 and 2014. |
|
|
|
|
|
|
|
|
We define free cash flow
as cash provided by operating activities less cash expenditures for
property, plant and equipment. |
|
|
|
|
|
|
|
|
We define free cash flow
conversion as free cash flow divided by net income, attributable to
Honeywell, excluding pension mark-to-market adjustment. |
|
|
|
|
|
|
|
|
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 |
|
Twelve Months
Ended |
|
December 31, |
|
December 31, |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
Segment Profit |
|
$
1,880 |
|
$
1,632 |
|
$
7,256 |
|
$
6,696 |
|
|
|
|
|
|
|
|
|
Stock compensation expense (A) |
|
(43) |
|
(44) |
|
(175) |
|
(187) |
Repositioning and other (A, B) |
|
(158) |
|
(154) |
|
(576) |
|
(634) |
Pension ongoing income (A) |
|
131 |
|
67 |
|
430 |
|
254 |
Pension mark-to-market adjustment (A) |
|
(67) |
|
(249) |
|
(67) |
|
(249) |
Other postretirement expense (A) |
|
(10) |
|
(12) |
|
(40) |
|
(49) |
|
|
|
|
|
|
|
|
|
Operating Income |
|
$
1,733 |
|
$
1,240 |
|
$ 6,828 |
|
$ 5,831 |
Pension mark-to-market adjustment (A) |
|
(67) |
|
(249) |
|
(67) |
|
(249) |
Operating Income excluding pension mark-to-market
adjustment |
|
$
1,800 |
|
$
1,489 |
|
$ 6,895 |
|
$ 6,080 |
|
|
|
|
|
|
|
|
|
Segment Profit |
|
$
1,880 |
|
$
1,632 |
|
$ 7,256 |
|
$ 6,696 |
÷ Sales |
|
$
9,982 |
|
$ 10,266 |
|
$ 38,581 |
|
$ 40,306 |
Segment Profit Margin % |
|
18.8% |
|
15.9% |
|
18.8% |
|
16.6% |
|
|
|
|
|
|
|
|
|
Operating Income |
|
$
1,733 |
|
$
1,240 |
|
$ 6,828 |
|
$ 5,831 |
÷ Sales |
|
$
9,982 |
|
$ 10,266 |
|
$ 38,581 |
|
$ 40,306 |
Operating Income Margin % |
|
17.4% |
|
12.1% |
|
17.7% |
|
14.5% |
|
|
|
|
|
|
|
|
|
Operating Income excluding pension mark-to-market
adjustment |
|
$
1,800 |
|
$
1,489 |
|
$ 6,895 |
|
$ 6,080 |
÷ Sales |
|
$
9,982 |
|
$ 10,266 |
|
$ 38,581 |
|
$ 40,306 |
Operating Income Margin excluding pension
mark-to-market adjustment % |
|
18.0% |
|
14.5% |
|
17.9% |
|
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 |
Reconciliation of Core
Organic Sales Growth (Unaudited) |
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
2015 |
|
2015 |
Honeywell |
|
|
|
Reported sales growth |
(3%) |
|
(4%) |
Foreign currency translation, acquisitions,
divestitures and other |
2% |
|
4% |
Raw materials pricing in R&C |
1% |
|
1% |
|
|
|
|
Core organic sales growth |
0% |
|
1% |
|
|
|
|
PMT |
|
|
|
Reported sales growth |
(12%) |
|
(10%) |
Foreign currency translation, acquisitions,
divestitures and other |
4% |
|
4% |
Raw materials pricing in R&C |
4% |
|
5% |
|
|
|
|
Core organic sales growth |
(4%) |
|
(1%) |
|
|
|
|
Throughout this press release, core
organic sales growth refers to reported sales growth less the
impacts from foreign currency translation, M&A and raw
materials pass-through 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 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. |
Contacts: |
|
|
|
Media |
Investor Relations |
Robert C. Ferris |
Mark Macaluso |
(973) 455-3388 |
(973) 455-2222 |
rob.ferris@honeywell.com |
mark.macaluso@honeywell.com |