October 2016 TODAY S HONEYWELL

Transcription

1 October 2016 TODAY S HONEYWELL

2 1 Honeywell s innovative technologies are making our world cleaner and more sustainable, more secure, connected, energy efficient, and productive. This document contains certain statements that may be deemed forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 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 by Honeywell International Inc. All rights reserved.

3 2 Honeywell $38.6B in sales for % of sales outside U.S. ~1,300 sites, ~70 countries More than 129,000 employees Morris Plains, N.J. headquarters Fortune 100 NYSE: HON Aerospace Home and Building Technologies Performance Materials and Technologies Safety and Productivity Solutions

4 3 Honeywell Overview $38.6B Global Industrial Company, Segment Margin of 18.8% ~53% of Sales Outside U.S. Aerospace $15.2B Sales Performance Materials and Technologies $9.5B Sales Home and Building Technologies $9.2B Sales Safety and Productivity Solutions $4.7B Sales IntuVue 3D Weather Radar Experion Orion Console evohome Vocollect Unmatched Scope of Offerings Winning Technology Connecting Homes and Buildings Connecting Workers Mechanical, Cockpit, and Software Offerings From Nose to Tail Apps, Services, Maintenance, Subscriptions End-to-End Connectivity Solutions From Hardware to Airtime Turbochargers for Fuel Efficiency Refining and Petrochemical Catalysts Gas Processing Modular Offerings Solstice LGWP Materials SmartLine Transmitters Asset Optimization Software Security and Fire Connecting Homes With Lyric Open Software Connecting Internet Of Things in Buildings Wireless, Voice, Mobility, Data Analytic Solutions for Workers Warehouse Automation Keeping Workers Safe Reflects 2015 Full Year Results Aligned to Key Global Macro Trends

5 Honeywell at a Glance 4

6 5 Energy Efficiency and Clean Energy Generation With nearly 50% of our revenue linked to energy efficient products, Honeywell can help the world face its energy challenges. Air Traffic Modernization Biofuels By immediately and comprehensively adopting existing Honeywell products and solutions, the U.S. could reduce energy consumption 20 to 25%. Green Buildings Fuel-Efficient Turbochargers Low-Global- Warming Refrigerants Industrial Process Efficiency Demand Response & Smart Grid Energy Performance Contracts

7 6 Safety and Security Honeywell equipment and technologies can help keep an emergency from becoming a tragedy, and our security solutions protect us from emerging threats. Honeywell s Enhanced Ground Proximity Warning System has reduced Controlled Flight Into Terrain (CFIT) accidents from ~1 in every 3 million flights to less than 1 in every 20 million. Spectra fiber is 15 times stronger than steel but light enough to float. Home Security Gas Monitoring & Detection Cybersecurity SmartView Synthetic Vision System Industrial Process & Safety Honeywell Instant Alert Personal Protective Equipment Spectra Fiber

8 7 Expanding Global Wealth Per Capita Honeywell is developing solutions that support growing infrastructure and improve the quality of life for people around the world. Air Traffic Management Airport Solutions Refining Technologies Indoor Air Quality The growing middle class is expected to increase from 1.8 billion to almost 5 billion people by Smart Grid Turbochargers Health and Safety Petrochemical Technologies

9 8 Worker Productivity Honeywell solutions help our customers be better, faster, and more efficient. In-flight Productivity Industrial Scanning & Mobile Computers Honeywell is an industry leader in wireless and scanning technologies used in home, building, and industrial applications. Voice Controls OneWireless Mobile Control Room Retail Scanning Cockpit Systems Connected Warehouse Wireless Sensors

10 9 Five-Year Plan Status ($B) Sales Segment Margin Rate $46 - $51 $39.1 $ $ E 2018T Headwinds Currency, FM Divestiture, World GDP Tailwinds Acquisitions, Inflections Headwinds Acquisitions Amortization, Deal Costs Tailwinds Initiatives Working Very Well Growth Inflection Begins End of 2016 High End of Range Trajectory

11 10 Portfolio Great Positions in Good Industries Sensing & Control Safety Equipment Commercial Passenger Vehicles 7% Institutional & Infrastructure Industrial Commercial Scanning & Mobility Refrigerants, Foams Resins, Plastics, Fibers Chemicals Industrial & Workers 11% Chemicals & Specialty Products 11% HON Homes & Buildings 25% Residential U.S. New (Res Non-Res) Intl. Retrofit U.S. Retrofit Intl. New Comm l Helo Other D&S 6% Commercial Aero 19% Spares OE Space, Other Int l Defense U.S. DoD 7% Oil & Gas 14% Midstream Upstream R&O Downstream Sales Reflect 2016E as of March 2016 Positioned in Good End Markets With Diversity of Opportunity

12 Processes Portfolio 11 HON Business Model 5 Initiatives / 12 Behaviors Management Resource Review - CEO Interviews Top 200 Roles Customer Focused Trick is in the Doing - The Machinery Needs to Work - Go Slow to go Fast - Achieve Two Seemingly Conflicting Things Constantly Evolving One Honeywell One Honeywell Culture Innovation Mindset Applied To Great Positions in Good Industries Diversity of Opportunity M&A Upgrades Growth Portfolio Balanced Portfolio - Long / Short Cycle - Early / Mid / Late Cycle Globalization Continues HOS Gold - Initiatives Integrated - Breakthrough Goals Functional Transformation Software Development Consistent Business Model That Generates Results

13 12 HOS Gold Our Enabler: HOS Gold Why It Is Different Consolidates All Operational Best Practices (i.e. HOS, VPD, HUE, FT) Drives Initiatives at Enterprise Level - Previously at Segment Level Only Takes Broader Multi-Functional Approach - From Plant to Back Office Deeper Focus on Breakthrough Goals - Deliver Strong Core Organic Growth and Profitability - Grow Faster Than Markets - Software a Primary Driver Blends Small Cap Speed and Agility With Large Cap Scale and Expertise Supporting Growth and Productivity

14 13 Aerospace Honeywell Aerospace innovates and integrates thousands of products, software, and services to advance and more easily deliver safe, efficient, productive, and comfortable transportation experiences worldwide. Our offerings are found on virtually every commercial, defense, and space aircraft, and our turbochargers are used by nearly every automaker and truck manufacturer around the world. Businesses: Commercial OE (Original Equipment) Commercial Aftermarket Defense & Space Transportation Systems Headquarters: Phoenix, Arizona Technologies: Cockpit systems Runway and flight safety technology Air traffic management SATCOM and connectivity Propulsion Precision guidance Wheels and brakes Logistics services Gasoline, diesel, hybrid, and fuel cell turbochargers with variable nozzle technology

15 14 Home and Building Technologies Honeywell Home and Building Technologies creates products, Software, and technologies found in more than 150 million homes and 10 million buildings worldwide. We help homeowners stay in control of their comfort, security, and energy use; building owners keep their facilities safe, energy efficient, and productive; and utilities supply customers and communities more efficiently. Businesses: Environmental and Energy Solutions Honeywell Security and Fire Smart Energy Honeywell Building Solutions Headquarters: Atlanta, Georgia Technologies: Home comfort and security Building control systems Smart grid / demand response technology Fire alarm systems and gas detection Remote health monitoring

16 15 Performance Materials and Technologies Honeywell is a global leader in designing and creating highpurity, high-quality performance chemicals and materials and software-based systems to safely and efficiently operate complex industrial facilities. Honeywell manufactures environmentally friendly refrigerants, specialty plastics, and high purity chemicals used to make products as varied as bullet-resistant armor, computer chips and pharmaceutical packaging. Honeywell UOP provides refining, petrochemical, and gas processing technologies and software services that are the foundation for the world s oil and gas industry, and Honeywell Process Solutions is a pioneer in software-based automation controls, instrumentation, and services. Businesses: Honeywell UOP Honeywell Process Solutions Advanced Materials Headquarters: Morris Plains, New Jersey Technologies: Oil and gas process technology, equipment, catalysts, and services Industrial automation controls Low-global-warming potential refrigerants Specialty films and additives Advanced fibers and composites Electronic materials and chemicals

17 16 Safety and Productivity Solutions We provide comprehensive solutions that enhance workplace safety and incident response, improve enterprise and workflow performance, and enable greater product design innovation. Customers rely on our connected solutions to provide real-time safety intelligence to respond to safety threats, increase worker productivity, and enrich operational intelligence with data-driven insights that enable smarter business decisions. Businesses: Sensing and Productivity Solutions Safety Solutions Headquarters: Fort Mill, South Carolina Technologies: Automatic identification and data collection Warehouse automation Personal protective equipment Printing and media Scanning and mobile computers

18 17 Technology and Innovation ~22,800 engineers worldwide ~50% engineers focused on software 118 research and engineering facilities 37,000 patents granted or pending Developing solutions for the world s toughest challenges 100% Compatible with CMMI Maturity Level 5

19 18 Sustainable Opportunity >65% Reduction in our GHG emissions Making our businesses more environmentally friendly, safer, and more sustainable ~40% Increase in our energy efficiency By 2019, Honeywell will reduce our global greenhouse gas emissions by an additional 10% per dollar of revenue from our 2013 levels.

20 International and Domestic Influential Cover Stories 19 Media Highlights Wall Street Journal Highlights Honeywell s Successful Growth Strategy for Mergers & Acquisitions Dave Cote Appears on Mad Money From Honeywell s 2016 Annual Investor Conference Honeywell Chairman and CEO Dave Cote Discusses Sustainable Urbanization During CEO Council in Beijing Honeywell Growth & Performance Highlighted by Barron s Magazine Honeywell Chairman and CEO Dave Cote Featured on Yahoo! Finance to Discuss Acquisition Strategy Honeywell Chairman and CEO Talks Commitment to Integrity & Compliance in the October 2015 Issue of Ethisphere

21 20 Honeywell Hometown Solutions Housing & Shelter Family Safety & Security Science & Math Humanitarian Relief Habitat & Conservation Community rehabilitation projects Safety & abduction prevention Quality programs in STEM for students and teachers $9 million in aid around the globe Best practices in environmental teaching skills Since 2003, more than 17,500 Honeywell volunteers have repaired 546 homes, schools, and non-profit centers in 46 Honeywell communities across the U.S., Canada, Mexico, and Puerto Rico with Rebuilding Together. Launched in October 2014, KidSmartz, an abduction prevention program for children in grades K-5, received national media attention reaching more than 2 million viewers. Since 2005, Safe Home China has reached 2.3 million children and 2,800 schools. FMA Live! Forces in Motion has reached 455,000 students in more than 1,150 middle schools across the U.S., Mexico, Canada, and Puerto Rico. Honeywell Space Academy has hosted more than 2,300 teachers from 55 countries and 50 U.S. states since Honeywell Leadership Challenge Academy has hosted 1,770 students from 47 countries and 37 U.S. states. Employee donations to the Honeywell Humanitarian Relief Fund have repaired or rebuilt 750 homes, 4 schools, 9 medical clinics, 1 elder community center, and 200 wells since Typhoon Haiyan, Philippines Hurricane Sandy, U.S. Colorado Springs wildfires, U.S. Japan earthquake and tsunami Haiti and China earthquakes Honeywell Institute for Ecosystems Education inspired 309 students and 89 teachers to become environmental stewards in New York, New Jersey, and Maryland. Honeywell Green Boot Camp has been delivered to 282 teachers since 2008.

22 Reconciliation of Non-GAAP Measures to GAAP Measures 21

23 22 Reconciliation of Segment Profit to Operating Income and Calculation of Segment Profit and Operating Income Margins ($M ) Segment Profit $5,357 $5,879 $6,351 $6,696 $7,256 Stock Based Compensation (1) (168) (170) (170) (187) (175) Repositioning and Other (1, 2) (794) (488) (699) (634) (576) Pension Ongoing (Expense)/Income (1) (105) (36) Pension Mark-to-Market Adjustment (1) (1,802) (957) (51) (249) (67) Other Postretirement Income/(Expense) (1) 86 (72) (20) (49) (40) Operating Income $2,574 $4,156 $5,501 $5,831 $6,828 Segment Profit $5,357 $5,879 $6,351 $6,696 $7,256 Sales 36,529 37,665 39,055 40,306 38,581 Segment Profit Margin % 14.7% 15.6% 16.3% 16.6% 18.8% Operating Income $2,574 $4,156 $5,501 $5,831 $6,828 Sales 36,529 37,665 39,055 40,306 38,581 Operating Income Margin % 7.0% 11.0% 14.1% 14.5% 17.7% (1) Included in cost of products and services sold and selling, general and administrative expenses. (2) Includes repositioning, asbestos, environmental expenses and equity income adjustment. Appendix March 2, 2016

24 23 Reconciliation of EPS to EPS, Excluding Pension Mark-to-Market Adjustment 2011 (1) 2012 (2) 2013 (3) 2014 (4) 2015 (5) EPS $2.61 $3.69 $4.92 $5.33 $6.04 Pension Mark-to-Market Adjustment EPS, Excluding Pension Mark-to-Market Adjustment $4.05 $4.48 $4.97 $5.56 $6.10 (1) Utilizes weighted average shares of million. M ark-to-market uses a blended tax rate of 36.9%. (2) Utilizes weighted average shares of million. M ark-to-market uses a blended tax rate of 35.0%. (3) Utilizes weighted average shares of million. M ark-to-market uses a blended tax rate of 25.5%. (4) Utilizes weighted average shares of million. M ark-to-market uses a blended tax rate of 28.1%. (5) Utilizes weighted average shares of million. M ark-to-market uses a blended tax rate of 36.1%. Appendix March 2, 2016

25 24 Reconciliation of Cash Provided by Operating Activities to Free Cash Flow ($M ) Cash Provided by Operating Activities $2,833 $3,517 $4,335 $5,024 $5,454 Expenditures for Property, Plant and Equipment (798) (884) (947) (1,094) (1,073) Free Cash Flow $2,035 $2,633 $3,388 $3,930 $4,381 Appendix March 2, 2016

26 25 Glossary Aero: Aerospace Comm l OE: Commercial Original Equipment Comm l AM: Commercial Aftermarket ATR: Air Transport & Regional BGA: Business & General Aviation D&S: Defense & Space TS: Transportation Systems APU: Auxiliary Power Unit RMU: Retrofit, Modifications, & Upgrades HTF: Honeywell Turbofan (Engine) HBT: Home and Building Technologies ESS: Energy, Safety & Security E&ES: Environmental & Energy Solutions HSF: Honeywell Security & Fire BSD: Building Solutions & Distribution HBS: Honeywell Building Solutions ADI: Americas Distribution SPS: Safety and Productivity Solutions HIS: Honeywell Industrial Safety SPS: Sensing & Productivity Solutions PMT: Performance Materials and Technologies CA&S: Catalyst, Adsorbents & Specialties PT&E: Process Technology & Equipment GP&H: Gas Processing & Hydrogen CPS: Connected Performance Service MTO: Methanol-To-Olefins HPS: Honeywell Process Solutions LSS: Lifecycle Solutions & Services PAS: Projects And Automation Solutions PMC: Process Measurement And Control AS: Advanced Solutions Adv Mat (AM): Advanced Materials SP: Specialty Products FP: Fluorine Products Industry Peers 3M Danaher Emerson General Electric Illinois Tool Works Rockwell Collins Tyco United Technologies Tools / Initiatives GPGI: Great Positions in Good Industries HOS: Honeywell Operating System FT: Functional Transformation OEF: Organizational Effectiveness VPD: Velocity Product Development HUE: Honeywell User Experience CMMI: Capability Maturity Model Integration HSBS TM : Honeywell Smart Building Score HGR: High Growth Regions FTG: Follow-The-Growth BCC: Becoming The Chinese Competitor E4E: East-For-East E2R: East-To-Rest Other Acronyms LGWP: Low-Global-Warming-Potential COE: Center of Excellence IIoT: Industrial Internet of Things EPC: Engineering, Procurement, Construction