Honeywell Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

hon-20200630

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

__________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _____

Commission file number 1-8974

Honeywell International Inc.

(Exact name of registrant as specified in its charter)

Delaware

22-2640650

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

300 South Tryon Street

28202

Charlotte,

(Address of principal executive offices)

(Zip Code)


			704			627-6200
			(Registrant’s telephone number, including area code)

			Not Applicable
			(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $1 per share*

HON

The New York Stock Exchange

1.300% Senior Notes due 2023

HON 23A

The New York Stock Exchange

0.000% Senior Notes due 2024

HON 24A

The New York Stock Exchange

2.250% Senior Notes due 2028

HON 28A

The New York Stock Exchange

0.750% Senior Notes due 2032

HON 32

The New York Stock Exchange

* The common stock is also listed on the London Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large Accelerated Filer	x	Accelerated filer	☐
Non-Accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

There were 701,783,165 shares of Common Stock outstanding at June 30, 2020.

Honeywell International Inc.

Index

Part I.

Financial Information

Page No.

Item 1.

Financial Statements:

Consolidated Statement of Operations (unaudited) – Three and Six Months Ended June 30 , 2020 and 2019

Consolidated Statement of Comprehensive Income (unaudited) – Three and Six Months Ended June 30 , 2020 and 2019

Consolidated Balance Sheet (unaudited) – June 30 , 2020 and December 31, 2019

Consolidated Statement of Cash Flows (unaudited) – Six Months Ended Jun e 30 , 2020 and 2019

Consolidated Statement of Shareowners' Equity (unaudited) – Three and Six Months Ended June 30 , 2020 and 2019

Notes to Consolidated Financial Statements (unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risks

Item 4.

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

Item 4.

Mine Safety Disclosures

Cautionary Statement about Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future. They are based on management’s assumptions and assessments in the light of past experience and trends, current economic and industry conditions, expected future developments and other relevant factors. They are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by our forward-looking statements. Our forward-looking statements are also subject to risks and uncertainties, including the impact of the coronavirus pandemic (COVID-19), which can affect our performance and financial results in both the near- and long-term. These forward-looking statements should be considered in the light of the information included in this report and our other filings with the Securities and Exchange Commission, including, without limitation, the Risk Factors, as well as the description of trends and other factors in Management’s Discussion and Analysis of Financial Condition and Results of Operations, set forth in this report and our 2019 Annual Report on Form 10-K.

PART I. FINANCIAL INFORMATION

The financial statements and related footnotes as of June 30, 2020 should be read in conjunction with the financial statements for the year ended December 31, 2019 contained in our 2019 Annual Report on Form 10-K.

ITEM 1. FINANCIAL STATEMENTS

Honeywell International Inc.

Consolidated Statement of Operations

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
	(Dollars in millions, except per share amounts)
Product sales	$	5,743	$	6,990	$	12,048	$	13,703
Service sales	1,734		2,253		3,892		4,424
Net sales	7,477		9,243		15,940		18,127
Costs, expenses and other
Cost of products sold	4,163		4,848		8,537		9,470
Cost of services sold	1,113		1,246		2,273		2,503
	5,276		6,094		10,810		11,973
Selling, general and administrative expenses	1,183		1,387		2,421		2,750
Other (income) expense	(291)		(305)		(608)		(590)
Interest and other financial charges	90		85		163		170
	6,258		7,261		12,786		14,303
Income before taxes	1,219		1,982		3,154		3,824
Tax expense (benefit)	120		426		449		832
Net income	1,099		1,556		2,705		2,992
Less: Net income attributable to the noncontrolling interest	18		15		43		35
Net income attributable to Honeywell	$	1,081	$	1,541	$	2,662	$	2,957
Earnings per share of common stock - basic	$	1.54	$	2.13	$	3.77	$	4.07
Earnings per share of common stock - assuming dilution	$	1.53	$	2.10	$	3.74	$	4.02

The Notes to Consolidated Financial Statements are an integral part of this statement.

Honeywell International Inc.

Consolidated Statement of Comprehensive Income

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
	(Dollars in millions)
Net income	$	1,099	$	1,556	$	2,705	$	2,992
Other comprehensive income (loss), net of tax
Foreign exchange translation adjustment	121		(191)		(155)		14


Prior service (credit) cost recognized	(20)		(20)		(40)		(39)
Pension and other postretirement benefits adjustments	(20)		(20)		(40)		(39)
Cash flow hedges recognized in other comprehensive income (loss)	(91)		10		104		48
Less: Reclassification adjustment for gains (losses) included in net income	(33)		7		22		39
Changes in fair value of effective cash flow hedges	(58)		3		82		9
Other comprehensive income (loss), net of tax	43		(208)		(113)		(16)
Comprehensive income	1,142		1,348		2,592		2,976
Less: Comprehensive income attributable to the noncontrolling interest	21		13		39		37
Comprehensive income attributable to Honeywell	$	1,121	$	1,335	$	2,553	$	2,939

The Notes to Consolidated Financial Statements are an integral part of this statement.

Honeywell International Inc.

Consolidated Balance Sheet

(Unaudited)


	June 30, 2020		December 31, 2019
	(Dollars in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	13,778	$	9,067
Short-term investments	1,349		1,349
Accounts receivable - net	6,717		7,493
Inventories	4,753		4,421
Other current assets	1,724		1,973
Total current assets	28,321		24,303
Investments and long-term receivables	626		588
Property, plant and equipment - net	5,327		5,325
Goodwill	15,518		15,563
Other intangible assets - net	3,551		3,734
Insurance recoveries for asbestos related liabilities	379		392
Deferred income taxes	106		86
Other assets	9,776		8,688
Total assets	$	63,604	$	58,679
LIABILITIES
Current liabilities:
Accounts payable	$	5,366	$	5,730
Commercial paper and other short-term borrowings	3,531		3,516
Current maturities of long-term debt	967		1,376
Accrued liabilities	7,477		7,476
Total current liabilities	17,341		18,098
Long-term debt	17,591		11,110
Deferred income taxes	1,461		1,670
Postretirement benefit obligations other than pensions	317		326
Asbestos related liabilities	1,894		1,996
Other liabilities	6,627		6,766
Redeemable noncontrolling interest	7		7
SHAREOWNERS’ EQUITY
Capital - common stock issued	958		958
- additional paid-in capital	7,104		6,876
Common stock held in treasury, at cost	(25,685)		(23,836)
Accumulated other comprehensive loss	(3,310)		(3,197)
Retained earnings	39,080		37,693
Total Honeywell shareowners’ equity	18,147		18,494
Noncontrolling interest	219		212
Total shareowners’ equity	18,366		18,706
Total liabilities, redeemable noncontrolling interest and shareowners’ equity	$	63,604	$	58,679

The Notes to Consolidated Financial Statements are an integral part of this statement.

Honeywell International Inc.

Consolidated Statement of Cash Flows

(Unaudited)


	Six Months Ended June 30,
	2020		2019
	(Dollars in millions)
Cash flows from operating activities:
Net income	$	2,705	$	2,992
Less: Net income attributable to the noncontrolling interest	43		35
Net income attributable to Honeywell	2,662		2,957
Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activities:
Depreciation	314		335
Amortization	179		221

Repositioning and other charges	342		210
Net payments for repositioning and other charges	(309)		(85)
Pension and other postretirement income	(423)		(322)
Pension and other postretirement benefit payments	(23)		(45)
Stock compensation expense	78		75
Deferred income taxes	(277)		44
Other	(285)		5
Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
Accounts receivable	776		98
Inventories	(331)		(273)
Other current assets	106		(239)
Accounts payable	(364)		(8)
Accrued liabilities	(26)		(161)
Net cash provided by (used for) operating activities	2,419		2,812
Cash flows from investing activities:
Expenditures for property, plant and equipment	(366)		(312)
Proceeds from disposals of property, plant and equipment	7		10
Increase in investments	(1,671)		(2,274)
Decrease in investments	1,589		2,163

Receipts (payments) from settlements of derivative contracts	83		70
Net cash provided by (used for) investing activities	(358)		(343)
Cash flows from financing activities:
Proceeds from issuance of commercial paper and other short-term borrowings	7,165		7,114
Payments of commercial paper and other short-term borrowings	(7,094)		(7,115)
Proceeds from issuance of common stock	97		378
Proceeds from issuance of long-term debt	7,101		29
Payments of long-term debt	(1,218)		(84)
Repurchases of common stock	(1,985)		(2,650)
Cash dividends paid	(1,285)		(1,203)
Other	(40)		(32)
Net cash provided by (used for) financing activities	2,741		(3,563)
Effect of foreign exchange rate changes on cash and cash equivalents	(91)		32
Net increase (decrease) in cash and cash equivalents	4,711		(1,062)
Cash and cash equivalents at beginning of period	9,067		9,287
Cash and cash equivalents at end of period	$	13,778	$	8,225

The Notes to Consolidated Financial Statements are an integral part of this statement.

Honeywell International Inc.

Consolidated Statement of Shareowners' Equity

(Unaudited)


	Three Months Ended June 30,														Six Months Ended June 30,
		2020						2019						2020			2019
		Shares		$		Shares		$		Shares		$		Shares		$
	(Dollars in millions, except per share amounts)
Common stock, par value	957.6		958		957.6		958		957.6		958		957.6		958
Additional paid-in capital
Beginning balance			7,047				6,652				6,876				6,452
Issued for employee savings and option plans			23				94				150				253
Stock-based compensation expense			34				34				78				75

Ending balance			7,104				6,780				7,104				6,780
Treasury stock
Beginning balance	(255.8)		(25,643)		(229.9)		(20,392)		(246.5)		(23,836)		(228.0)		(19,771)
Reacquired stock or repurchases of common stock	(0.4)		(62)		(11.1)		(1,900)		(12.1)		(1,985)		(16.2)		(2,650)
Issued for employee savings and option plans	0.4		20		2.9		136		2.8		136		6.1		265
Ending balance	(255.8)		(25,685)		(238.1)		(22,156)		(255.8)		(25,685)		(238.1)		(22,156)
Retained earnings
Beginning balance			38,635				34,794				37,693				33,978

Net income attributable to Honeywell			1,081				1,541				2,662				2,957
Dividends on common stock			(636)				(594)				(1,275)				(1,194)

Price	167.14	EPS	9
Shares	733	P/E	19
MCap	122,480	P/FCF	29
Net Debt	4,281	EBIT	7,512
TEV	126,761	TEV/EBIT	17
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-07-24
10-Q	2020-03-31	Filed 2020-05-01
10-K	2019-12-31	Filed 2020-02-14
10-Q	2019-09-30	Filed 2019-10-17
10-Q	2019-06-30	Filed 2019-07-18
10-Q	2019-03-31	Filed 2019-04-18
10-K	2018-12-31	Filed 2019-02-08
10-Q	2018-09-30	Filed 2018-10-19
10-Q	2018-06-30	Filed 2018-07-20
10-Q	2018-03-31	Filed 2018-04-20
10-K	2017-12-31	Filed 2018-02-09
10-Q	2017-09-30	Filed 2017-10-20
10-Q	2017-06-30	Filed 2017-07-21
10-Q	2017-03-31	Filed 2017-04-21
10-K	2016-12-31	Filed 2017-02-10
10-Q	2016-09-30	Filed 2016-10-21
10-Q	2016-06-30	Filed 2016-07-22
10-Q	2016-03-31	Filed 2016-04-22
10-K	2015-12-31	Filed 2016-02-12
10-Q	2015-09-30	Filed 2015-10-16
10-Q	2015-06-30	Filed 2015-07-17
10-Q	2015-03-31	Filed 2015-04-17
10-K	2014-12-31	Filed 2015-02-13
10-Q	2014-09-30	Filed 2014-10-17
10-Q	2014-06-30	Filed 2014-07-18
10-Q	2014-03-31	Filed 2014-04-17
10-K	2013-12-31	Filed 2014-02-14
10-Q	2013-09-30	Filed 2013-10-18
10-Q	2013-06-30	Filed 2013-07-19
10-Q	2013-03-31	Filed 2013-04-19
10-K	2012-12-31	Filed 2013-02-15
10-Q	2012-09-30	Filed 2012-10-19
10-Q	2012-06-30	Filed 2012-07-18
10-Q	2012-03-31	Filed 2012-04-20
10-K	2011-12-31	Filed 2012-02-17
10-Q	2011-09-30	Filed 2011-10-21
10-Q	2011-06-30	Filed 2011-07-22
10-Q	2011-03-31	Filed 2011-04-21
10-K	2010-12-31	Filed 2011-02-11
10-Q	2010-09-30	Filed 2010-10-22
10-Q	2010-06-30	Filed 2010-07-23
10-Q	2010-03-31	Filed 2010-04-23
10-K	2009-12-31	Filed 2010-02-12

8-K	2020-08-19	Off-BS Arrangement, Other Events, Exhibits
8-K	2020-07-24	Earnings, Exhibits
8-K	2020-06-05
8-K	2020-05-18
8-K	2020-05-14
8-K	2020-05-01
8-K	2020-04-29
8-K	2020-04-10
8-K	2020-03-31
8-K	2020-03-10
8-K	2020-02-28
8-K	2020-01-31
8-K	2019-12-04
8-K	2019-10-17
8-K	2019-10-15
8-K	2019-10-07
8-K	2019-08-28
8-K	2019-08-08
8-K	2019-08-01
8-K	2019-07-26
8-K	2019-07-18
8-K	2019-07-08
8-K	2019-04-29
8-K	2019-04-29
8-K	2019-04-26
8-K	2019-04-18
8-K	2019-02-01
8-K	2018-10-29
8-K	2018-10-19
8-K	2018-10-19
8-K	2018-10-14
8-K	2018-10-02
8-K	2018-10-01
8-K	2018-09-12
8-K	2018-09-05
8-K	2018-08-23
8-K	2018-07-27
8-K	2018-07-20
8-K	2018-06-14
8-K	2018-05-30
8-K	2018-04-30
8-K	2018-04-27
8-K	2018-04-23
8-K	2018-04-23
8-K	2018-04-20
8-K	2018-02-16
8-K	2018-02-09
8-K	2018-01-30
8-K	2018-01-26

EX-10.1	exhibit10106302020.htm
EX-10.2	exhibit10206302020.htm
EX-10.3	exhibit10306302020.htm
EX-10.4	exhibit10406302020.htm
EX-10.6	exhibit10606302020.htm
EX-10.7	exhibit10706302020.htm
EX-31.1	exhibit31-106302020.htm
EX-31.2	exhibit31-206302020.htm
EX-32.1	exhibit32-106302020.htm
EX-32.2	exhibit32-206302020.htm
EX-95	exhibit9506302020.htm

HON 10Q Quarterly Report

Honeywell Earnings 2020-06-30