Form 8-K HONEYWELL INTERNATIONAL For: Jan 23

January 23, 2015 7:08 AM

�

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

�

Form 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT January 23, 2015

(Date of earliest event reported)

�

honeywell international inc.

(Exact name of Registrant as specified in its Charter)

�

DELAWARE	�	1-8974	�	22-2640650
(State or other jurisdiction of incorporation)	�	(Commission File Number)	�	(I.R.S. Employer Identification Number)

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101 COLUMBIA ROAD, P.O. BOX 4000, MORRISTOWN, NEW JERSEY	�	07962-2497
(Address of principal executive offices)	�	(Zip Code)

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Registrant’s telephone number, including area code: (973) 455-2000

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

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On January 23, 2015, Honeywell International Inc. (the “Company”) issued a press release announcing its fourth quarter and full year 2014 earnings, which is furnished herewith as Exhibit 99. The information furnished pursuant to this Item 2.02, including Exhibit 99, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.

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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

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(d)	Exhibit 99 Honeywell International Inc. Earnings Press Release dated January 23, 2015

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SIGNATURE

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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Date:��January 23, 2015	HONEYWELL INTERNATIONAL INC.		�
�	�	�	�
�	By:�	/s/ Jeffrey N. Neuman	�
�	Jeffrey N. Neuman		�
�	Vice President, Corporate Secretary and		�
�	Deputy General Counsel		�

�

Exhibit 99

�

News Release

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Contacts:	�	�
Media	�	Investor Relations
Robert C. Ferris	�	Mark Macaluso
(973) 455-3388	�	(973) 455-2222
[email protected]	�	[email protected]

�

HONEYWELL REPORTS FULL-YEAR SALES UP 3% TO $40.3 BILLION;
EPS (EX-PENSION MARK-TO-MARKET) UP 12% TO $5.56;
REPORTED EPS OF $5.33

�

�	4Q14 Organic Sales Growth Of 4%; EPS (Ex-Pension MTM) Of $1.43, Up 15%

�

�	Aerospace OEM Incentives ($0.14 Expense) Position Aerospace Well For Growth And Margin Expansion Over Five-Year Plan

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�	Completed Sale Of Remaining BEAV Shares In 4Q14, $0.14 Gain

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�	Reaffirming 2015 EPS Guidance (Ex-Pension MTM) Of $5.95 - $6.15, Up 7-11%

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MORRIS TOWNSHIP, N.J., January 23, 2015 -- Honeywell (NYSE: HON) today announced its results for the fourth quarter and full-year 2014:

�

Total Honeywell	�	�	�	�	�	�
�	�	�	�	�	�	�
($ Millions, except Earnings Per Share)	�	FY 2013	�	FY 2014	�	Change
�	�	�	�	�	�	�
Sales ⁽¹⁾	�	39,055	�	40,306	�	3%
Organic Growth	�	�	�	�	�	3%
Segment Margin ⁽²⁾	�	16.3%	�	16.6%	�	30 bps
Operating Income Margin (Ex-Pension MTM)	�	14.2%	�	15.1%	�	90 bps
�	�	�	�	�	�	�
Earnings Per Share (Reported)	�	$4.92	�	$5.33	�	8%
Earnings Per Share (Ex-Pension MTM)	�	$4.97	�	$5.56	�	12%
�	�	�	�	�	�	�
Cash Flow from Operations	�	4,335	�	5,024	�	16%
Free Cash Flow ⁽³⁾	�	3,388	�	3,930	�	16%
�	�	�	�	�	�	�
�	�	4Q 2013	�	4Q 2014	�	Change
�	�	�	�	�	�	�
Sales ⁽¹⁾	�	10,387	�	�10,266	�	(1%)
Organic Growth	�	�	�	�	�	4%
Segment Margin ⁽²⁾	�	16.1%	�	15.9%	�	(20) bps
Operating Income Margin (Ex-Pension MTM)	�	13.4%	�	14.5%	�	110 bps
�	�	�	�	�	�	�
Earnings Per Share (Reported)	�	$1.19	�	$1.20	�	1%
Earnings Per Share (Ex-Pension MTM)	�	$1.24	�	$1.43	�	15%
�	�	�	�	�	�	�
Cash Flow from Operations	�	1,668	�	1,762	�	6%
Free Cash Flow ⁽³⁾	�	1,268	�	1,348	�	�6%
�	�	�	�	�	�	�

Sales Ex-4Q14 $184M OEM Incentives Up 4% in FY14 and 1% in 4Q14

Segment Margin Ex-4Q14 $184M OEM Incentives Up 70 bps in FY14 and 130 bps in 4Q14

Cash Flow from Operations Less Capital Expenditures

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- MORE -

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Q4’14 Results - 2

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“In the fourth quarter, Honeywell delivered 4% organic sales growth and achieved 15% earnings per share growth (excluding the pension mark-to-market adjustment), exceeding the high end of our guidance range and capping off another year of terrific performance in 2014,” said Honeywell Chairman and CEO Dave Cote. “Strong execution in our businesses and continued momentum across the portfolio throughout the year helped us to deliver on our aggressive 2014 sales, margin, and EPS targets. We achieved significant margin expansion in 2014 with benefits from our key process and productivity initiatives, and increased organic growth by continuing to ‘seed plant’ with investments in new products and technologies, high ROI capex, and expansion of our global footprint. Consistent with what we guided in December, we sold the remaining BEAV shares in the fourth quarter and proactively funded Aerospace OEM incentives related to new platform wins. We remain cautious in our planning with regard to the global economy, but are confident that our balanced portfolio mix of short- and long-cycle businesses is well-positioned to deliver on our 2015 commitments that include higher organic sales, continued margin expansion, and double-digit earnings growth. Honeywell’s five year plan is on target and we expect that improving end markets, new product introductions, penetration in high-growth regions, and benefits from our HOS Gold initiative will drive both growth and productivity throughout the company.”

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The company also reaffirms its full-year 2015 guidance:

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Full-Year Guidance

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�	�	2015	�	Change
�	�	Current Guidance	�	vs. 2014
Sales	�	�$40.5 - $41.1B	�	1% - 2%
Organic Growth	�	�	�	~4%
�	�	�	�	�
Segment Margin	�	17.6% - 17.9%	�	100 - 130 bps⁽²⁾
Operating Income Margin (Ex-Pension MTM)	�	16.7% - 17.0%	�	160 - 190 bps⁽²⁾
Earnings Per Share (Ex-Pension MTM)	�	$5.95 - $6.15	�	7% - 11%
Free Cash Flow ⁽¹⁾	�	�$4.2 - $4.3B	�	8% - 10%
�	�	�	�	�

	1.	Cash Flow from Operations Less Capital Expenditures
	2.	Segment Margin ex-4Q14 $184M OEM Incentives Up 60 - 90 bps; Operating Margin ex-4Q14 OEM Incentives Up 120 - 150 bps

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Segment Performance

�

Aerospace	�	�	�	�	�	�
�	�	�	�	�	�	�
($ Millions)	�	FY 2013	�	FY 2014	�	% Change
�	�	�	�	�	�	�
Sales	�	15,735	�	15,598	�	(1%)
Segment Profit	�	2,870	�	2,915	�	2%
Segment Margin	�	18.2%	�	18.7%	�	50 bps
�	�	�	�	�	�	�
($ Millions)	�	4Q 2013	�	4Q 2014	�	% Change
Sales	�	4,077	�	3,842	�	(6%)
Segment Profit	�	769	�	663	�	(14%)
Segment Margin	�	18.9%	�	17.3%	�	(160) bps

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- MORE -

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Q4’14 Results - 3

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Sales for the fourth quarter were down (6%) on a reported basis driven by the unfavorable impact of OEM incentives, the Friction Materials divestiture, and the unfavorable impact of foreign exchange. Excluding these items, sales in the fourth quarter were up 4% on an organic basis. Commercial OE sales were up 7% on an organic basis, reflecting an increase in Business and General Aviation (BGA) engine shipments. Commercial Aftermarket sales were up 4% on an organic basis, driven by continued Air Transport and Regional (ATR) spares growth, and higher Repair & Overhaul activities. Defense & Space sales were up 2% on an organic basis as a result of strong international growth. Transportation Systems sales were up 4% on an organic basis, primarily driven by new platform launches and higher turbo gas penetration globally.

�

Segment profit for the fourth quarter was down (14%), and segment margins contracted (160) bps to 17.3%, driven by the unfavorable impact of fourth quarter OEM incentives, partially offset by productivity net of inflation, commercial excellence, and the favorable impact of the Friction Materials divestiture. Excluding the impact of the $184 million fourth quarter 2014 OEM incentives, segment profit was up 10%, and segment margins expanded 210 basis points.

�

Automation and Control Solutions �	�	�	�	�	�	�
($ Millions)	�	FY 2013	�	FY 2014	�	% Change
�	�	�	�	�	�	�
Sales	�	13,465	�	14,487	�	8%
Segment Profit	�	1,983	�	2,200	�	11%
Segment Margin	�	14.7%	�	15.2%	�	50 bps
�	�	�	�	�	�	�
($ Millions)	�	4Q 2013	�	4Q 2014	�	% Change
�	�	�	�	�	�	�
Sales	�	3,741	�	��3,847	�	3%
Segment Profit	�	570	�	613	�	8%
Segment Margin	�	15.2%	�	15.9%	�	70 bps

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Sales for the fourth quarter were up 3% reported, or 6% on an organic basis, primarily driven by strong organic growth across the portfolio, partially offset by the unfavorable impact of foreign exchange. Energy, Safety, and Security (ESS) sales increased, particularly in Scanning & Mobility, Fire and Industrial Safety, and Security; and Building Solutions & Distribution (BSD) saw continued strength in the Americas Distribution business as well as acceleration in Building Solutions, most notably in the Americas region.

�

�	Segment profit for the fourth quarter was up 8% and segment margins expanded 70 bps to 15.9% driven primarily by higher volumes, M&A integration execution, and productivity net of inflation, partially offset by continued investments for growth.

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On December 18, 2014, we signed a definitive agreement to acquire Datamax-O’Neil, a global manufacturer of fixed and mobile printers used in a variety of retail, warehouse and distribution, and health care applications, for an aggregate purchase price of approximately $185 million. The transaction is expected to close in the first quarter of 2015 subject to customary closing conditions, including regulatory review.

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- MORE -

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Q4’14 Results - 4

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Performance Materials and Technologies	�	�	�	�	�	�
�	�	�	�	�	�	�
($ Millions)	�	FY 2013	�	FY 2014	�	% Change
�	�	�	�	�	�	�
Sales	�	9,855	�	10,221	�	4%
Segment Profit	�	1,725	�	1,817	�	5%
Segment Margin	�	17.5%	�	17.8%	�	30 bps
�	�	�	�	�	�	�
($ Millions)	�	4Q 2013	�	4Q 2014	�	% Change
�	�	�	�	�	�	�
Sales	�	��2,569	�	��2,577	�	~Flat
Segment Profit	�	400	�	425	�	6%
Segment Margin	�	15.6%	�	16.5%	�	90 bps

�	�
�	Sales for the fourth quarter were approximately flat reported, or up 3% on an organic basis, driven by higher UOP licensing sales, software and services growth in Process Solutions, and higher sales in Advanced Materials, particularly in Fluorine Products, offset by the unfavorable impact of foreign exchange and lower UOP catalyst sales.

�

�	Segment profit for the fourth quarter was up 6% and segment margins expanded 90 bps to 16.5% in the fourth quarter, driven by higher volume, the favorable impact of higher UOP licensing sales, and productivity net of inflation, partially offset by continued investments for growth.

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Honeywell will discuss its results during its investor conference call today starting at 9:30 a.m. EST. To participate, please dial (888) 487-0361 (domestic) or (719) 457-2710 (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 2014 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 (http://www.honeywell.com/investor). Investors can access a replay of the conference call from 2:00 p.m. EST, January 23, until 11:59 p.m. EST, January 30, by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international). The access code is 1280015.

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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.

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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.

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#��#��#

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Q4’14 Results - 5

�

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,

�

2014

�

2013

�

2014

�

2013

�

Product sales

�

8,185

�

8,303

�

32,398

�

31,214

�

Service sales

�

2,081

�

2,084

�

7,908

�

7,841

�

Net sales

�

10,266

�

10,387

�

40,306

�

39,055

�

Costs, expenses and other

�

Cost of products sold (A)

�

6,203

�

6,278

�

23,889

�

23,317

�

Cost of services sold (A)

�

1,363

�

1,334

�

5,068

�

5,047

�

7,566

�

7,612

�

28,957

�

28,364

�

Selling, general and administrative expenses (A)

�

1,460

�

1,438

�

5,518

�

5,190

�

Other (income) expense

�

(146

)

�

(185

)

�

(305

)

�

(238

)

Interest and other financial charges

�

318

�

327

�

8,962

�

8,948

�

34,488

�

33,643

�

Income before taxes

�

1,304

�

1,439

�

5,818

�

5,412

�

Tax expense

�

329

�

475

�

1,489

�

1,450

�

Net income

�

975

�

964

�

4,329

�

3,962

�

Less: Net income attributable to the noncontrolling interest

�

Net income attributable to Honeywell

�

956

�

947

�

4,239

�

3,924

�

Earnings per share of common stock - basic

�

1.22

�

1.20

�

5.40

�

4.99

�

Earnings per share of common stock - assuming dilution

�

1.20

�

1.19

�

5.33

�

4.92

�

Weighted average number of shares outstanding - basic

�

783.8

�

785.9

�

784.4

�

786.4

�

Weighted average number of shares outstanding - assuming dilution

�

794.1

�

797.0

�

795.2

�

797.3

�

(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,

�

2014 ¹

�

2013 ¹

�

2014 ¹

�

2013 ¹

�

Earnings per share of common stock - assuming dilution

�

1.20

�

1.19

�

5.33

�

4.92

�

Mark-to-market pension expense

�

0.23

�

0.05

�

0.23

�

0.05

�

Earnings per share of common stock - assuming dilution, excluding mark-to-market pension expense

�

1.43

�

1.24

�

5.56

�

4.97

�

1- EPS utilizes weighted average shares outstanding and the effective tax rate for the period. Mark-to-market uses a blended tax rate of 28.1% and 25.5% for 2014 and 2013, respectively.

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Q4’14 Results - 6

�

Honeywell International Inc.

Segment Data (Unaudited)

(Dollars in millions)

�

Three Months Ended

�

Twelve Months Ended

�

December 31,

�

December 31,

�

Net Sales

�

2014

�

2013

�

2014

�

2013

�

Aerospace

�

3,842

�

4,077

�

15,598

�

15,735

�

Automation and Control Solutions

�

3,847

�

3,741

�

14,487

�

13,465

�

Performance Materials and Technologies

�

2,577

�

2,569

�

10,221

�

9,855

�

Total

�

10,266

�

10,387

�

40,306

�

39,055

�

Reconciliation of Segment Profit to Income Before Taxes

�

Three Months Ended

�

Twelve Months Ended

�

December 31,

�

December 31,

�

Segment Profit

�

2014

�

2013

�

2014

�

2013

�

Aerospace

�

663

�

769

�

2,915

�

2,870

�

Automation and Control Solutions

�

613

�

570

�

2,200

�

1,983

�

Performance Materials and Technologies

�

425

�

400

�

1,817

�

1,725

�

Corporate

�

(69

)

�

(70

)

�

(236

)

�

(227

)

Total segment profit

�

1,632

�

1,669

�

6,696

�

6,351

�

Other income (expense) (A)

�

137

�

180

�

269

�

202

�

Interest and other financial charges

�

(82

)

�

(83

)

�

(318

)

�

(327

)

Stock compensation expense (B)

�

(44

)

�

(41

)

�

(187

)

�

(170

)

Pension ongoing income (B)

�

254

�

Pension mark-to-market expense (B)

�

(249

)

�

(51

)

�

(249

)

�

(51

)

Other postretirement expense (B)

�

(12

)

�

(13

)

�

(49

)

�

(20

)

Repositioning and other charges (B)

�

(145

)

�

(244

)

�

(598

)

�

(663

)

Income before taxes

�

1,304

�

1,439

�

5,818

�

5,412

�

(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.

�

Q4’14 Results - 7

�

Honeywell International Inc.

Consolidated Balance Sheet (Unaudited)

(Dollars in millions)

�

�	�	December 31,		�	�	December 31,		�
�	�	2014		�	�	2013		�
�	�	�	�	�	�	�	�	�
ASSETS	�	�	�	�	�	�	�	�
Current assets:	�	�	�	�	�	�	�	�
Cash and cash equivalents	�	$	6,959	�	�	$	6,422	�
Accounts, notes and other receivables	�	�	7,960	�	�	�	7,929	�
Inventories	�	�	4,405	�	�	�	4,293	�
Deferred income taxes	�	�	722	�	�	�	849	�
Investments and other current assets	�	�	2,145	�	�	�	1,671	�
Total current assets	�	�	22,191	�	�	�	21,164	�
�	�	�	�	�	�	�	�	�
Investments and long-term receivables	�	�	465	�	�	�	393	�
Property, plant and equipment - net	�	�	5,383	�	�	�	5,278	�
Goodwill	�	�	12,788	�	�	�	13,046	�
Other intangible assets - net	�	�	2,208	�	�	�	2,514	�
Insurance recoveries for asbestos related liabilities	�	�	454	�	�	�	595	�
Deferred income taxes	�	�	404	�	�	�	368	�
Other assets	�	�	1,558	�	�	�	2,077	�
Total assets	�	$	45,451	�	�	$	45,435	�
�	�	�	�	�	�	�	�	�
LIABILITIES AND SHAREOWNERS’ EQUITY	�	�	�	�	�	�	�	�
Current liabilities:	�	�	�	�	�	�	�	�
Accounts payable	�	$	5,365	�	�	$	5,174	�
Short-term borrowings	�	�	51	�	�	�	97	�
Commercial paper	�	�	1,647	�	�	�	1,299	�
Current maturities of long-term debt	�	�	939	�	�	�	632	�
Accrued liabilities	�	�	6,771	�	�	�	6,979	�
Total current liabilities	�	�	14,773	�	�	�	14,181	�
�	�	�	�	�	�	�	�	�
Long-term debt	�	�	6,046	�	�	�	6,801	�
Deferred income taxes	�	�	236	�	�	�	804	�
Postretirement benefit obligations other than pensions	�	�	911	�	�	�	1,019	�
Asbestos related liabilities	�	�	1,200	�	�	�	1,150	�
Other liabilities	�	�	4,282	�	�	�	3,734	�
Redeemable noncontrolling interest	�	�	219	�	�	�	167	�
Shareowners’ equity	�	�	17,784	�	�	�	17,579	�
Total liabilities, redeemable noncontrolling interest and shareowners’ equity	�	$	45,451	�	�	$	45,435	�

�

Q4’14 Results - 8

�

Honeywell International Inc.

Consolidated Statement of Cash Flows (Unaudited)

(Dollars in millions)

�

Three Months Ended

�

Twelve Months Ended

�

December 31,

�

December 31,

�

2014

�

2013

�

2014

�

2013

�

Cash flows from operating activities:

�

Net income

�

975

�

964

�

4,329

�

3,962

�

Less: Net income attributable to the noncontrolling interest

�

Net income attributable to Honeywell

�

956

�

947

�

4,239

�

3,924

�

Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activities:

�

Depreciation and amortization

�

226

�

249

�

924

�

989

�

Loss on sale of non-strategic businesses and assets

�

—

�

Gain on sale of available for sale investments

�

(116

)

�

(195

)

�

(221

)

�

(195

)

Repositioning and other charges

�

145

�

244

�

598

�

663

�

Net payments for repositioning and other charges

�

(229

)

�

(246

)

�

(530

)

�

(763

)

Pension and other postretirement income

�

194

�

(19

)

Pension and other postretirement benefit payments

�

(44

)

�

(45

)

�

(167

)

�

(298

)

Stock compensation expense

�

187

�

170

�

Deferred income taxes

�

(123

)

�

132

�

262

�

Excess tax benefits from share based payment arrangements

�

(31

)

�

(31

)

�

(102

)

�

(132

)

Other

�

(120

)

�

273

�

(327

)

�

308

�

Changes in assets and liabilities, net of the effects of acquisitions and divestitures:

�

Accounts, notes and other receivables

�

357

�

(172

)

�

(365

)

Inventories

�

135

�

(200

)

�

Other current assets

�

(61

)

�

(393

)

�

120

�

(421

)

Accounts payable

�

153

�

384

�

307

�

352

�

Accrued liabilities

�

332

�

221

�

181

�

(201

)

Net cash provided by operating activities

�

1,762

�

1,668

�

5,024

�

4,335

�

Cash flows from investing activities:

�

Expenditures for property, plant and equipment

�

(414

)

�

(400

)

�

(1,094

)

�

(947

)

Proceeds from disposals of property, plant and equipment

�

Increase in investments

�

(935

)

�

(517

)

�

(4,074

)

�

(1,220

)

Decrease in investments

�

1,164

�

474

�

3,288

�

1,122

�

Cash paid for acquisitions, net of cash acquired

�

—

�

(70

)

�

)

�

(1,133

)

Proceeds from sales of businesses, net of fees paid

�

160

�

Other

�

(61

)

�

(170

)

�

201

�

Net cash used for investing activities

�

(237

)

�

(405

)

�

(1,876

)

�

(1,959

)

�

Cash flows from financing activities:

�

Net (decrease) increase in commercial paper

�

(202

)

�

(800

)

�

348

�

899

�

Net (decrease) increase in short-term borrowings

�

(34

)

�

(39

)

�

Proceeds from issuance of common stock

�

265

�

447

�

Proceeds from issuance of long-term debt

�

1,036

�

1,063

�

Payments of long-term debt

�

)

�

)

�

(609

)

�

(607

)

Excess tax benefits from share based payment arrangements

�

102

�

132

�

Repurchases of common stock

�

(235

)

�

(304

)

�

(924

)

�

(1,073

)

Cash dividends paid

�

(409

)

�

(358

)

�

(1,510

)

�

(1,353

)

Other

�

—

�

)

�

Net cash used for financing activities

�

(769

)

�

(300

)

�

(2,272

)

�

(433

)

�

Effect of foreign exchange rate changes on cash and cash equivalents

�

(225

)

�

(40

)

�

(339

)

�

(155

)

Net increase in cash and cash equivalents

�

531

�

923

�

537

�

1,788

�

Cash and cash equivalents at beginning of period

�

6,428

�

5,499

�

6,422

�

4,634

�

Cash and cash equivalents at end of period

�

6,959

�

6,422

�

6,959

�

6,422

�

Q4’14 Results - 9

�

Honeywell International Inc.

Reconciliation of Cash Provided by Operating Activities to Free Cash Flow (Unaudited)

(Dollars in millions)

�

Three Months Ended

�

Twelve Months Ended

�

December 31,

�

December 31,

�

2014

�

2013

�

2014

�

2013

�

Cash provided by operating activities

�

1,762

�

1,668

�

5,024

�

4,335

�

Expenditures for property, plant and equipment

�

(414

)

�

(400

)

�

(1,094

)

�

(947

)

Free cash flow

�

1,348

�

1,268

�

3,930

�

3,388

�

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.

�

Q4’14 Results - 10

�

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)

�

Three Months Ended

�

Twelve Months Ended

�

December 31,

�

December 31,

�

2014

�

2013

�

2014

�

2013

�

Segment Profit

�

1,632

�

1,669

�

6,696

�

6,351

�

Stock compensation expense (A)

�

(44

)

�

(41

)

�

(187

)

�

(170

)

Repositioning and other (A, B)

�

(154

)

�

(249

)

�

(634

)

�

(699

)

Pension ongoing income (A)

�

254

�

Pension mark-to-market adjustment (A)

�

(249

)

�

(51

)

�

(249

)

�

(51

)

StreetInsider

Log in to your account:

Form 8-K HONEYWELL INTERNATIONAL For: Jan 23

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(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.