Saturday, May 26, 2012 Last update: Yesterday, 6:04 PM
U.S. Technology Company News from the Inside
Honeywell Reports Full-Year Sales Up 13% to $36.5 Billion; Proforma Earnings Up 35% to $4.05 Per Share; And Reported Earnings Per Share of $2.61
Submitted by admin on 1/27/2012 @ 4:30 AM
Companies mentioned in this article:
Honeywell
MORRIS TOWNSHIP, N.J., Jan. 27, 2012 /PRNewswire/ -- Honeywell (NYSE: HON) today announced fourth quarter and full-year 2011 results as follows:
-- 4Q11 sales were up 8% to $9.5 billion versus $8.7 billion in 4Q10
-- 7% organic growth reflects continued strength in most end markets
and the contribution of new product launches and geographic
expansion
-- 4Q11 proforma earnings (excluding the impact of pension mark-to-market
adjustments) of $1.05 per share, up 21% over $0.87 in 4Q10; Reported
4Q11 earnings reflected a loss of ($0.40) per share versus earnings of
$0.47 per share in the prior year
-- Pension mark-to-market adjustment of $1.45 per share calculated
using 784.3 million weighted average shares outstanding assuming
dilution
-- 4Q11 cash flow from operations of $1.5 billion, includes $250 million
cash pension contribution in the quarter
-- 4Q11 free cash flow (cash flow from operations less capital
expenditures) of $1.4 billion, prior to $250 million cash pension
contribution
The company reported full-year 2011 results including:
-- 2011 sales of $36.5 billion, up approximately 13% over 2010
-- 8% organic sales growth, again reflecting strong end markets,
successful new product launches, and continued expansion in high
growth regions
-- 2011 proforma earnings (excluding the impact of pension mark-to-market
adjustments) of $4.05 per share, up 35% over $3.00 in 2010; Reported EPS
of $2.61 in 2011 versus $2.59 in the prior year
-- Pension mark-to-market adjustment of $1.44 per share calculated
using 791.6 million weighted average shares outstanding assuming
dilution
-- 2011 cash flow from operations of $2.8 billion, includes $1.7 billion
cash pension contribution in the year
-- 2011 free cash flow of approximately $3.7 billion, prior to $1.7
billion cash pension contribution
"Honeywell had a terrific 2011," said Honeywell Chairman and CEO Dave Cote. "We executed across the portfolio with record organic sales growth and segment margins. Our 2011 performance reflects the operational and financial disciplines that underpin the transformation that has taken place at the company over the last 10 years. We deployed the Honeywell 5 Initiatives - Growth, Productivity, Cash, People, and our Enablers, and created a common One Honeywell culture committed to continuous improvement. As a result, we built a better set of businesses with Great Positions in Good Industries, a terrific performance track record, a great leadership team with a truly global focus, a very full pipeline of new products and technologies, and our key process initiatives that are gaining momentum. We've come a long way, and we feel even better about our future."
"While we expect a more challenging macro environment ahead in 2012, primarily driven by softness in Europe impacting the short-cycle businesses, we're confident that Honeywell is well positioned to continue to outperform," continued Cote. "Our long-cycle businesses are accelerating, with Commercial Aerospace OE, UOP, Building Solutions & Distribution, and Process Solutions all having substantial backlog, in total just under $16 billion. While we expect growth to moderate in the first half of 2012, we're confident that we can drive strong sales conversion leading to higher segment margins over the course of the year. The investments we've made, coupled with our execution track record and disciplined playbook, will be key to our continued outperformance in 2012 and beyond."
Fourth Quarter Segment Highlights
Aerospace
-- Sales were up 8% compared with the fourth quarter of 2010, primarily due
to 20% growth in Commercial original equipment and aftermarket volumes,
partially offset by lower military sales and government services.
-- Segment profit was up 10% and segment margin increased 40 bps to 18.8%,
primarily due to strong commercial aftermarket volume and productivity
benefits net of inflation, partially offset by higher research and
development costs, and the dilution associated with the EMS acquisition.
-- Honeywell secured more than $100 million in safety product wins
including contracts with Lufthansa Airlines to introduce Intuvue Radar
and SmartLanding airport and runway awareness technology on its full
fleet of A320 aircraft. Air China will introduce Honeywell's Intuvue
Radar on its B777-300ER in addition to Satellite Communication System,
Traffic Collision Avoidance System, and Voice and Data recorders.
Additionally, Emirates Airlines will forward fit and retrofit Honeywell
Satellite Communication Systems on its fleet of 777, A380, and A340
aircraft.
-- Honeywell was awarded more than $150 million in Global Aftermarket
support contracts in the quarter. These include a Maintenance Cost
Agreement with Flydubai for the carrier's auxiliary power units (APUs)
installed on its fleet of Boeing 737-800 passenger aircraft, aftermarket
support with Air France to provide multiple avionics components across
several aircraft platforms, and wheels and brakes support with Ethiopian
Airlines and Air China.
-- Honeywell has delivered the latest version of its industry leading
HTF7000 family of jet engines, the HTF7500E, to Embraer for flight
testing on Embraer's family of Legacy 450 and 500 series jets. The
HTF7500E is Honeywell's newest fuel efficient engine that encompasses
SABER (Single Annular Combustor for Emissions Reduction) combustor
technology reducing jet engine emissions by 25%.
Automation and Control Solutions
-- Sales were up 4%, compared with the fourth quarter of 2010, driven by
organic growth across the portfolio. The favorable impact of net
acquisitions offset negative foreign currency translation in the
quarter. ACS continues to benefit from new product introductions,
emerging region expansion, and favorable macro trends such as safety,
security, and energy efficiency.
-- Segment profit was up 14% and segment margins increased 130 bps to 14.4%
driven by higher volumes, commercial excellence, and productivity
benefits net of inflation, and the absence of prior year dilution from
acquisitions.
-- Process Solutions was awarded an $88.6 million contract by the city of
Los Angeles to completely overhaul and modernize the technology
controlling the city's wastewater treatment system. The project will
allow the city's Bureau of Sanitation to replace the current control
systems, some of which have been in place for two decades and are
outdated, with a city- and network-wide integrated system, simplifying
operations and reducing environmental risks from the aging
infrastructure.
-- Life Safety acquired King's Safetywear, a leading international provider
of branded safety footwear and other personal protective equipment
(PPE). Headquartered in Singapore, King's will be integrated into the
global Safety Products business and further broadens Honeywell's
head-to-toe PPE portfolio, offering a range of respected protective
footwear brands to key markets including Southeast Asia, Australia, and
other regions. Life Safety also acquired Fire Sentry Corporation, a
privately-held manufacturer of innovative fire detection and control
products for a broad range of industrial markets. Fire Sentry's product
portfolio consists of fast-responding electro-optical flame detectors,
portable test lamps, and dedicated control panels that are used by
customers in industrial settings such as petrochemical, semiconductor,
and other plants.
-- Building Solutions announced a smart grid project that will help
Scottish and Southern Energy Power Distribution connect up to 30
commercial and industrial buildings in the Thames Valley area west of
London, which will help alleviate the potential for future transmission
and distribution bottlenecks as the peak demand for energy grows. The
project will help to create a more robust, agile grid without the public
disruption or expense of major infrastructure upgrades. Honeywell will
install automated demand response (Auto DR) technology in the selected
facilities.
Performance Materials and Technologies
-- Sales were up 24% compared with the fourth quarter of 2010, resulting
from strong UOP project and catalyst sales, the phenol plant
acquisition, and favorable pricing and new product applications in
Advanced Materials.
-- Segment profit was up 30% and segment margins increased 80 bps to 15.6%
due to higher project sales and catalyst growth, favorable price over
raws spreads, and continued productivity benefits, partially offset by
inflation and the unfavorable margin impact from the phenol plant
acquisition.
-- UOP announced that its adsorbent ion exchange products are successfully
being used by Toshiba Corp. and Shaw Global Services for the cleanup of
radiation-contaminated water at the Fukushima Daiichi nuclear power
plant in Japan. The Simplified Active Water Retrieve and Recovery System
(SARRY) is utilizing UOP IONSIV(TM) Ion Exchangers to remove and reduce
radioactive materials in the contaminated wastewater caused by the
earthquake and tsunami in Japan in 2011.
-- Resins and Chemicals signed an agreement with the J.R. Simplot Company,
one of the world's largest privately-held food and agribusiness
companies, to build a facility that will produce Honeywell's Sulf-N®
26, a highly-effective fertilizer with all the agronomic benefits of
traditional nitrate-based fertilizers but with significantly lower
explosive potential.
-- UOP announced that its Uniflex(TM) process technology, designed to help
refiners get more high-value product from each barrel of crude oil, has
been selected by National Refinery Limited to maximize diesel and
lubricant production in Pakistan. Uniflex(TM) technology was developed
to help refiners processing the bottom of the barrel (the heaviest
portions of a barrel of crude also known as vacuum residue) into
higher-value transportation fuels. This technology can deliver 90%
conversion of vacuum residue to transportation fuels.
Transportation Systems
-- Sales were up 10% compared with the fourth quarter of 2010, due to
higher light vehicle turbo volumes overall, new launches, and higher
diesel penetration, partially offset by the unfavorable impact of
foreign exchange.
-- Segment profit was up 14% and segment margins increased 40 bps to 12.4%,
primarily driven by higher volumes and increased productivity benefits,
partially offset by inflation.
-- Honeywell Turbo Technologies launched approximately 25 new turbo
applications in the fourth quarter on gasoline and diesel powertrains
for both passenger and commercial vehicle applications around the world
bringing the 2011 total to nearly 100 applications and reflecting a
record number of deliveries in 2011 surpassing the previous record set
in pre-recession 2007.
-- As global manufacturers continue to turn to engine downsizing and
turbocharging to meet increasing regulatory requirements and satisfy
customers, Honeywell Turbo Technologies was awarded more than $500
million in new platform wins in Q4 bringing its year-to-date total to
nearly $2.8 billion in revenue realized throughout the life of the
future programs won. The wins in Q4 reflect new business from global
customers including Audi, Nissan, Fiat, Chrysler, and Caterpillar.
Honeywell will discuss its results during its investor conference call today starting at 9:30 a.m. EST. To participate, please dial (631) 291-4830 a few minutes before the 9:30 a.m. EST start. Please mention to the operator that you are dialing in for Honeywell's investor conference call. The live webcast of the investor call 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 12:30 p.m. EST, January 27, until midnight, February 3, by dialing (404) 537-3406. The access code is 34690390.
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; automotive products; turbochargers; and performance materials. Based in Morris Township, N.J., Honeywell's shares are traded on the New York, London, and Chicago Stock Exchanges. 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.
Honeywell International Inc.
Consolidated Statement of Operations (Unaudited)
------------------------------------------------
(In millions except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
Product sales $7,478 $6,922 $28,745 $25,242
Service sales 1,995 1,827 7,784 7,108
----- ----- ----- -----
Net sales 9,473 8,749 36,529 32,350
----- ----- ------ ------
Costs, expenses and other
Cost of products sold (A) 6,862 5,665 23,220 19,903
Cost of services sold (A) 1,573 1,252 5,336 4,818
----- ----- ----- -----
8,435 6,917 28,556 24,721
Selling, general and
administrative expenses (A) 1,616 1,289 5,399 4,618
Other (income) expense (12) (8) (84) (97)
Interest and other financial
charges 91 92 376 386
--- --- --- ---
10,130 8,290 34,247 29,628
------ ----- ------ ------
Income (loss) from continuing
operations before taxes (657) 459 2,282 2,722
Tax expense (benefit) (350) 115 417 765
---- --- --- ---
Income (loss) from continuing
operations after taxes (307) 344 1,865 1,957
Income from discontinued
operations after taxes - 25 209 78
--- --- --- ---
Net income (loss) (307) 369 2,074 2,035
Less: Net income attributable
to the noncontrolling
interest 3 - 7 13
--- --- --- ---
Net income (loss) attributable
to Honeywell $(310) $369 $2,067 $2,022
===== ==== ====== ======
Amounts attributable to Honeywell:
Income (loss) from continuing operations less
net income
attributable to the
noncontrolling interest (310) 344 1,858 1,944
Income from discontinued
operations - 25 209 78
Net income (loss) attributable
to Honeywell $(310) $369 $2,067 $2,022
===== ==== ====== ======
Earnings per share of common stock - basic:
Income (loss) from continuing
operations (0.40) 0.44 2.38 2.51
Income from discontinued
operations - 0.03 0.27 0.10
Net income (loss) $(0.40) $0.47 $2.65 $2.61
====== ===== ===== =====
Earnings per share of common stock -assuming
dilution:
Income (loss) from continuing
operations (0.40) 0.44 2.35 2.49
Income from discontinued
operations - 0.03 0.26 0.10
Net income (loss) $(0.40) $0.47 $2.61 $2.59
====== ===== ===== =====
Weighted average number of
shares outstanding-basic 774.7 782.3 780.8 773.5
===== ===== ===== =====
Weighted average number of shares outstanding
-
assuming dilution 784.3 792.0 791.6 780.9
===== ===== ===== =====
(A) Cost of products and services sold and selling, general and administrative expenses include
amounts for repositioning and other charges, pension and other post-retirement expense, and
stock compensation expense.
(B) 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,
------------ ------------
2011 (1) 2010 (1) 2011 (1) 2010 (1)
------- ------- ------- -------
Earnings per share of common
stock -assuming dilution $(0.40) $0.47 $2.61 $2.59
Mark-to-market pension
expense 1.45 0.40 1.44 0.41
---- ---- ---- ----
Earnings per share of common stock -assuming
dilution,
excluding mark-to-market
pension expense $1.05 $0.87 $4.05 $3.00
===== ===== ===== =====
(1) EPS utilizes weighted average shares outstanding and the effective tax rate for the period.
Mark-to-market uses a tax rate of 36.9% and 32.3% for 2011 and 2010 respectively.
Honeywell International Inc.
Segment Data (Unaudited)
------------------------
(Dollars in millions)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
Net Sales 2011 2010 2011 2010
--------- ---- ---- ---- ----
Aerospace $3,047 $2,826 $11,475 $10,683
Automation and Control Solutions 4,051 3,914 15,535 13,749
Performance Materials and Technologies 1,430 1,153 5,659 4,726
Transportation Systems 944 856 3,859 3,192
Corporate 1 - 1 -
--- --- --- ---
Total $9,473 $8,749 $36,529 $32,350
====== ====== ======= =======
Reconciliation of Segment Profit to Income From Continuing Operations Before Taxes
----------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
Segment Profit 2011 2010 2011 2010
-------------- ---- ---- ---- ----
Aerospace $573 $521 $2,023 $1,835
Automation and Control Solutions 584 512 2,083 1,770
Performance Materials and Technologies 223 171 1,042 749
Transportation Systems 117 103 485 353
Corporate (68) (66) (276) (222)
--- --- ---- ----
Total Segment Profit 1,429 1,241 5,357 4,485
Other income/(expense) (A) (3) (4) 33 69
Interest and other financial charges (91) (92) (376) (386)
Stock compensation expense (B) (39) (41) (168) (163)
Pension expense ongoing (B) (22) (39) (105) (185)
Pension expense mark-to-market (B) (1,802) (471) (1,802) (471)
Other postretirement income/(expense) (B) (23) (17) 86 (29)
Repositioning and other charges (B) (106) (118) (743) (598)
---- ---- ---- ----
Income (loss) from continuing operations
before taxes $(657) $459 $2,282 $2,722
===== ==== ====== ======
(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 December
31, 31,
2011 2010
---- ----
ASSETS
Current assets:
Cash and cash equivalents $3,698 $2,650
Accounts, notes and other receivables 7,228 6,841
Inventories 4,264 3,822
Deferred income taxes 460 877
Investments and other current assets 484 455
Assets held for sale - 841
--- ---
Total current assets 16,134 15,486
Investments and long-term receivables 494 616
Property, plant and equipment - net 4,804 4,724
Goodwill 11,858 11,275
Other intangible assets - net 2,477 2,537
Insurance recoveries for asbestos related
liabilities 709 825
Deferred income taxes 2,132 1,221
Other assets 1,200 1,150
----- -----
Total assets $39,808 $37,834
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Accounts payable $4,738 $4,199
Short-term borrowings 60 67
Commercial paper 599 299
Current maturities of long-term debt 15 523
Accrued liabilities 6,863 6,446
Liabilities related to assets held for sale - 190
--- ---
Total current liabilities 12,275 11,724
Long-term debt 6,881 5,755
Deferred income taxes 676 636
Postretirement benefit obligations other than
pensions 1,417 1,477
Asbestos related liabilities 1,499 1,557
Other liabilities 6,158 5,898
Shareowners' equity 10,902 10,787
------ ------
Total liabilities and shareowners' equity $39,808 $37,834
Honeywell International Inc.
Consolidated Statement of Cash Flows (Unaudited)
------------------------------------------------
(Dollars in millions)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
Cash flows from operating activities:
Net income (loss) attributable to Honeywell $(310) $369 $2,067 $2,022
Adjustments to reconcile net income (loss) attributable to Honeywell
to net
cash provided by operating activities:
Depreciation and amortization 253 271 957 987
Gain on sale of non-strategic businesses and assets (9) - (362) -
Repositioning and other charges 106 118 743 600
Net payments for repositioning and other charges (133) (210) (468) (439)
Pension and other postretirement expense 1,847 528 1,823 689
Pension and other postretirement benefit payments (293) (651) (1,788) (787)
Stock compensation expense 39 41 168 164
Deferred income taxes (528) 190 (331) 878
Excess tax benefits from share based payment arrangements (11) (8) (42) (13)
Other 211 73 194 (24)
Changes in assets and liabilities, net of the effects of
acquisitions and divestitures:
Accounts, notes and other receivables 117 (119) (316) (688)
Inventories 130 56 (310) (300)
Other current assets 78 20 25 (26)
Accounts payable 162 263 527 592
Accrued liabilities (182) 104 (54) 548
Net cash provided by operating activities 1,477 1,045 2,833 4,203
----- ----- ----- -----
Cash flows from investing activities:
Expenditures for property, plant and equipment (332) (300) (798) (651)
Proceeds from disposals of property, plant and equipment 3 6 6 14
Increase in investments (58) (18) (380) (453)
Decrease in investments 66 18 354 112
Cash paid for acquisitions, net of cash acquired (346) 15 (973) (1,303)
Proceeds from sales of businesses, net of fees paid (14) 7 1,156 7
Other (43) (17) 24 5
Net cash used for investing activities (724) (289) (611) (2,269)
---- ---- ---- ------
Cash flows from financing activities:
Net (decrease)/increase in commercial paper (101) (598) 300 1
Net increase/(decrease) in short-term borrowings 2 2 (2) 20
Payment of debt assumed with acquisitions (33) - (33) (326)
Proceeds from issuance of common stock 72 84 304 195
Proceeds from issuance of long-term debt 1 - 1,390 -
Payments of long-term debt (500) (2) (939) (1,006)
Excess tax benefits from share based payment arrangements 11 8 42 13
Repurchases of common stock (76) - (1,085) -
Cash dividends paid (295) (240) (1,091) (944)
Net cash used for financing activities (919) (746) (1,114) (2,047)
---- ---- ------ ------
Effect of foreign exchange rate changes on cash and cash equivalents (21) - (60) (38)
--- --- --- ---
Net (decrease)/increase in cash and cash equivalents (187) 10 1,048 (151)
Cash and cash equivalents at beginning of period 3,885 2,640 2,650 2,801
Cash and cash equivalents at end of period $3,698 $2,650 $3,698 $2,650
====== ====== ====== ======
Honeywell International Inc.
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow, Prior to U.S. Pension Cash Contributions
(Unaudited)
-------------------------------------------------------------------------------------------------------------------
(Dollars in millions)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
Cash provided by operating activities $1,477 $1,045 $2,833 $4,203
Expenditures for property, plant and equipment (332) (300) (798) (651)
---- ---- ---- ----
Free cash flow $1,145 $745 $2,035 $3,552
U.S. pension cash contributions 250 600 1,650 600
--- --- ----- ---
Free cash flow, prior to U.S. pension cash contributions $1,395 $1,345 $3,685 $4,152
====== ====== ====== ======
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.
Contacts:
Media Investor Relations
Robert C. Ferris Elena Doom
(973) 455-3388 (973) 455-2222
rob.ferris@honeywell.com elena.doom@honeywell.com
SOURCE Honeywell