Information regarding the impact of Tax Legislation consists of preliminary estimates which are forward-looking statements and are subject to change, possibly materially. Information regarding the impact of
Tax Legislation is based on our current calculations, as well our current interpretations, assumptions and expectations relating to Tax Legislation, which are subject to further change.
NYSE: HON | ~970 sites | ~110,000 employees | Morris Plains, N.J. headquarters | Fortune 100
Our products are used on virtually Our products, software, and We develop advanced materials, We improve enterprise performance
every commercial and defense aircraft technologies are in more than 10 process technologies, automation and worker safety and productivity
platform worldwide and include aircraft million buildings worldwide, helping solutions, and industrial software with our scanning and mobile
propulsion, cockpit systems, satellite customers ensure their facilities are that are revolutionizing industries computers, software, warehouse
communications, and auxiliary power safe, energy efficient, sustainable, around the world. automation solutions, and personal
systems. and productive. protective equipment.
$39.1B $39.3B
$38.6B
16.6% 18.3%
16.3%
2013 2014 2015 2016 2017 2018E 2013 2014 2015 2016 2017 2018E
Adjusted FCF excludes impacts from separation costs related to the spin-offs.
Our reconciliations of non-GAAP measures to GAAP measures accompany this document and are also available at http://investor.honeywell.com.
© 2018 by Honeywell International Inc. All rights reserved.
Energy Efficiency and Clean Energy Generation
SyntheticHazard
Weather Vision&
System
Avoidance System Spectra® Fiber
Honeywell is developing
solutions that support Air Traffic Refining
Management Technologies
growing infrastructure and
improve the quality of life for
people around the world.
Airport Solutions Indoor Air Quality
Connected Space
Warehouse Optimization
Leverage Productivity
• One-Honeywell Leverage: We Use What We Sell • OEF Management Drove ~80 bps Fixed-Cost
Improvement Over the Last 5 Years*
*Data as of April 2018 © 2018 by Honeywell International Inc. All rights reserved.
• Cross-Honeywell Warehouse Strategy Optimization
Businesses: Technologies:
• Electronic Solutions • Air and Thermal Management
• Engines and Power Systems • Cockpit and Flight Management Systems
• Mechanical Systems and Components • Connectivity Systems and Connected Aircraft Services
• Services and Connectivity • Federal Solutions Management and Operation
• Mechanical Components
• Navigation Systems and Sensors
Headquarters:
Phoenix, Arizona • Propulsion and Power Systems
• Runway and Flight Safety Technology
• Wheels and Braking Systems
$11.6B • Satellite Applications
2017 Sales
Businesses: Technologies:
• Building Management Systems • Building Comfort and Control Systems
• Building Products • Fire Alarm Systems and Detection
• Building Solutions • Smart City Command and Control Solutions
• Greater China / APAC (Regional operation) • Video Management and Security
• Latin America (Regional operation) • Air and Water Purification
• Access and Intrusion Control
Headquarters:
Atlanta, Georgia
$5.3B
2017 Sales
Businesses: Technologies:
• Advanced Materials • Advanced Fibers and Composites
• Honeywell Process Solutions • Chemicals and Electronic Materials
• Honeywell UOP • Connected Plant and Software
• Industrial Automation Controls
• Low-Global-Warming Potential Refrigerants
Headquarters: • Oil and Gas Process Technology, Equipment, Catalysts, and Services
Morris Plains, New Jersey
• Smart Energy
• Specialty Films and Additives
$10.3B
2017 Sales
© 2018 by Honeywell International Inc. All rights reserved.
Safety and Productivity Solutions
Safety and Productivity Solutions (SPS) provides products,
software, and connected solutions that improve productivity,
workplace safety, and asset performance for customers across
the globe. We deliver on this promise through industry-leading
mobile devices, software, cloud technology, and automation
solutions; the broadest range of personal protective equipment
and gas detection technology; and custom-engineered sensors,
switches, and controls. We also manufacture and sell a broad
portfolio of footwear for work, play, and outdoor activities,
including XtraTuf™ and Muck Boot™ brand footwear.
Businesses: Technologies:
• Honeywell Industrial Safety • Automation and Material Handling Solutions
• Honeywell Intelligrated • Footwear for Work, Play, and Outdoor Activities
• Productivity Products • Gas Detection Technology and Custom-Engineered Sensors, Switches,
and Controls
• Retail
• Personal Protective Equipment for Industrial / Firefighting Applications
• Sensing and Internet of Things
• Printing, Scanning, and Mobile Devices for Data Collection
Headquarters: • Workflow Software and Mobile Cloud Technology
Fort Mill, South Carolina
$5.6B
2017 Sales
© 2018 by Honeywell International Inc. All rights reserved.
Honeywell Connected Enterprise is a centralized,
internal organization that serves as the software-
innovation engine for all of Honeywell
~9,000
Software
Developers
24% Mechanical
138
Research and 22% Electrical
Engineering
Facilities
35,500+ 5% Chemical
Patents Granted
or Pending
~60%
Increase in our
energy efficiency
2004-2017
120M
Gallons of water
conserved in By 2019, Honeywell will reduce our global
“water-stressed areas” greenhouse gas emissions by an additional 10%
per dollar of revenue from our 2013 levels.
Honeywell Tops Electronics Industry on Fortune’s Darius Adamczyk Became CEO on March 31, 2017: Honeywell Donates $2 Million in Safety
2017 “World’s Most Admired Companies” “The way we're going to continue to differentiate ourselves Equipment After Hurricane Harvey
versus other industry players … is by technology.”
Honeywell Announces Planned Portfolio Changes: Honeywell’s Que Dallara Named One of Honeywell Ranked As 2017 “Best for Vets”
“Honeywell's move to create two new stand-alone Diversity Journal’s “Women Worth Watching” Employer by Military Times
publicly traded companies is a very smart move.”
— Jim Cramer, CNBC, “Mad Money”
© 2018 by Honeywell International Inc. All rights reserved.
More
Smarter Safer
Sustainable
• Science and math education focus • 3 million students fire-safety • Modern urban sustainability
trained in China, India, and education in New Jersey and
• 20 teachers annually learn coding Malaysia Mexico City Humanitarian Relief
and earn Georgia STEM School
Certification at Georgia Tech • 6,000 students in Malaysia • 135 Safe drinking water stations • $13.2 million in donations
received safety training built in rural India serving 300,000 distributed to-date
• More than 3,000 teachers
worldwide received thermal • 1 million U.S. students learn • Water filtration systems serve • Beneficiaries: 2,278 employees
design, coding training at USSRC personal safety and abduction- 3,000 students and 60 teachers in (multiple communities)
prevention with KidSmartz China • Repaired or rebuilt since 2001*
• 5,000 students in UAE attended
Think Science and other education • 25,000 students, 1,000 teachers, • Wildlife habitat restoration projects - 900 homes
programs in partnership with and 40,000 parents expect by employees in Syracuse - 4 schools
Emirates Foundation and INJAZ disaster management training by - 9 medical clinics
2020 in India • Urban pollution stewardship in
- 1 elder community center
• 10,000+ students focused on IoT Baltimore neighborhoods,
technologies utilize Honeywell schoolyards
- 200 wells
Control Labs in five universities in
Turkey, Romania, and Indonesia
© 2018 by Honeywell International Inc. All rights reserved. *as of November 2018
(1)
Stock compensation expense (175) (184) (176)
(2,3)
Repositioning and other (569) (674) (962)
Pension and other postretirement service costs (4) (311) (277) (249)
Operating income $6,201 $6,051 $6,303
Certain amounts in the prior year reconciliation have been reclassified to conform with current year presentation, including changes made due to the adoption of the accounting standard related to classification of pension and other
postretirement benefit costs.
We define segment profit as operating income, excluding stock compensation expense, pension and other postretirement service costs, and repositioning and other charges. We believe these measures are useful to investors and
management in understanding our ongoing operations and in analysis of ongoing operating trends.
A quantitative reconciliation of segment profit, on an overall Honeywell basis, to operating income has not been provided for all forward-looking measures of segment profit and segment margin included herewithin. Management cannot
reliably predict or estimate, without unreasonable effort, the impact and timing on future operating results arising from items excluded from segment profit, particularly pension mark-to-market expense as it is dependent on macroeconomic
factors, such as interest rates and the return generated on invested pension plan assets. The information that is unavailable to provide a quantitative reconciliation could have a significant impact on our reported financial results. To the extent
quantitative information becomes available without unreasonable effort in the future, and closer to the period to which the forward-looking measures pertain, a reconciliation of segment profit to operating income will be included within future
filings.
(1)
Stock compensation expense (170) (187)
(2,3)
Repositioning and other (702) (590)
(4)
Pension ongoing income 90 254
(4)
Pension mark-to-market adjustment (51) (249)
(4)
OPEB expense (20) (49)
Operating income $5,498 $5,875
Amounts have not been reclassified to conform with current year presentation and do not include changes made due to the adoption of the accounting standard related to classification of pension and other postretirement benefit costs.
We define segment profit as operating income, excluding stock compensation expense, pension and other postretirement service costs, and repositioning and other charges. We believe these measures are useful to investors and
management in understanding our ongoing operations and in analysis of ongoing operating trends.
(1) Utilizes weighted average shares of 797.3 million. Pension mark-to-market expense uses a blended tax rate of 25.5%.
(2) Utilizes weighted average shares of 795.2 million. Pension mark-to-market expense uses a blended tax rate of 28.1%.
(3) Utilizes weighted average shares of 789.3 million. Pension mark-to-market expense uses a blended tax rate of 36.1%.
(4) Utilizes weighted average shares of 775.3 million. Pension mark-to-market expense uses a blended tax rate of 21.3% and debt refinancing expense uses a tax rate of 26.5%.
(5) Utilizes weighted average shares of 772.1 million. Pension mark-to-market expense uses a blended tax rate of 23%.
We believe Adjusted EPS is a measure that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends. For forward looking information, management cannot reliably predict or
estimate, without unreasonable effort, the pension mark-to-market expense as it is dependent on macroeconomic factors, such as interest rates and the return generated on invested pension plan assets, the separation costs given the
inherent uncertainty of the estimates, and any adjustments to the charge from 4Q17 U.S. tax legislation as the charge is provisional. We therefore do not include an estimate for the pension mark-to-market expense, separation costs, or
adjustments to 4Q17 U.S. tax legislation charge in this reconciliation. Based on economic and industry conditions, future developments and other relevant factors, these assumptions are subject to change.
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, 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.
($M ) 2016
Segment profit excluding mergers and acquisitons $6,980
÷ Net sales excluding mergers and acquisitions $37,023
Segment profit margin excluding mergers and acquisitons % 18.9%