<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 3, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from: NOT APPLICABLE
Commission File No. 1-971
HONEYWELL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 41-0415010
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
Honeywell Plaza, Minneapolis, Minnesota 55408
(Address of principal executive offices) (Zip Code)
(612) 951-1000
(Registrant's telephone number, including area code)
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
----- -----
As of July 3, 1994, the number of shares outstanding of the registrant's common
stock, $1.50 par value, was 129,253,023.
<PAGE>
Page 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INCOME STATEMENT
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
Second Quarter
_____________________________
<S> <C> <C>
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) 1994 1993
..............................................................................
SALES $ 1,463.8 $ 1,452.0
---------- ----------
COSTS AND EXPENSES
Cost of sales 1,001.8 982.2
Research and development 82.1 86.2
Selling, general and administrative 278.4 266.4
Litigation settlements and special charges 0.8
Interest - net 15.3 13.7
Equity income (2.0) (6.3)
---------- ----------
1,375.6 1,343.0
---------- ----------
INCOME BEFORE INCOME TAXES 88.2 109.0
PROVISION FOR INCOME TAXES 31.3 37.6
---------- ----------
NET INCOME $56.9 $71.4
---------- ----------
---------- ----------
EARNINGS PER COMMON SHARE $0.44 $0.53
---------- ----------
---------- ----------
</TABLE>
<PAGE>
Page 3
INCOME STATEMENT
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months
__________________________
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) 1994 1993
..............................................................................
<S> <C> <C>
SALES $2,811.7 $2,890.6
-------- --------
COSTS AND EXPENSES
Cost of sales 1,919.1 1,972.0
Research and development 154.3 165.1
Selling, general and administrative 549.0 533.7
Litigation settlements and special charges 0.8
Interest - net 27.9 28.5
Equity income (0.8) (6.0)
-------- --------
2,649.5 2,694.1
-------- --------
INCOME BEFORE INCOME TAXES 162.2 196.5
PROVISION FOR INCOME TAXES 57.6 67.8
-------- --------
NET INCOME $ 104.6 $ 128.7
-------- --------
-------- --------
EARNINGS PER COMMON SHARE $ 0.80 $ 0.95
-------- --------
-------- --------
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 130,172,681 135,506,529
</TABLE>
<PAGE>
Page 4
STATEMENT OF CASH FLOWS
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months
-----------------------
(DOLLARS IN MILLIONS) 1994 1993
....................................................................................................................................
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 104.6 $ 128.7
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation 116.4 120.9
Amortization of intangibles 24.8 24.4
Deferred income taxes 6.4 1.5
Equity income, net of dividends received 0.3 (4.7)
Loss on sale of assets 1.2 2.8
Contributions to employee stock plans 15.2 15.3
(Increase) decrease in receivables (17.0) 3.5
Increase in inventories (50.3) (25.6)
Decrease in accounts payable (46.5) (40.3)
Increase (decrease) in accrued income taxes and interest (25.6) 4.9
Other changes in working capital, excluding short-term
investments and short-term debt (6.7) (47.6)
Other noncurrent items - net (24.4) (40.5)
-------- --------
Net cash flows from operating activities 98.4 143.3
-------- --------
Cash Flows from Investing Activities
Reduction of investment in Sperry Aerospace Group 20.0
Proceeds from sale of assets 7.0 6.0
Capital expenditures (129.3) (109.9)
Investment in acquisitions (44.9) (5.1)
Increase in short-term investments (4.0) (12.4)
Other - net 19.6 (3.9)
-------- --------
Net cash flows from investing activities (151.6) (105.3)
-------- --------
Cash Flows from Financing Activities
Net increase in short-term debt 161.7 73.2
Proceeds from issuance of long-term debt 26.4
Repayment of long-term debt (0.2) (6.8)
Purchase of treasury stock (94.1) (121.5)
Proceeds from employee stock plans 4.1 12.3
Dividends paid (62.3) (60.5)
-------- --------
Net cash flows from financing activities 35.6 (103.3)
-------- --------
Effect of Exchange Rate Changes on Cash 8.3 (8.7)
-------- --------
Decrease in Cash and Cash Equivalents (9.3) (74.0)
Cash and Cash Equivalents at Beginning of Year 242.3 342.4
-------- --------
Cash and Cash Equivalents at End of Six Months $ 233.0 $ 268.4
-------- --------
-------- --------
</TABLE>
<PAGE>
Page 5
STATEMENT OF FINANCIAL POSITION
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS) July 3, 1994 December 31, 1993
.........................................................................................................
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 233.0 $ 242.3
Short-term investments 18.2 13.8
Receivables (less allowance for doubtful accounts:
1994, $28.0; 1993, $24.3) 1,310.8 1,275.9
Inventories (less progress billing on uncompleted
contracts: 1994, $40.7; 1993, $36.8) 812.3 760.1
Deferred income taxes 260.7 258.1
--------- ---------
2,635.0 2,550.2
Investments and Advances 215.7 227.7
Property, Plant and Equipment
Property, plant and equipment 2,688.0 2,549.4
Less accumulated depreciation 1,602.6 1,487.4
--------- ---------
1,085.4 1,062.0
Other Assets
Long-term receivables (less allowance for doubtful
accounts: 1994, $0.4; 1993, $0.5) 60.4 51.3
Intangible assets 508.4 489.1
Deferred income taxes 63.6 63.8
Other 194.3 154.0
--------- ---------
Total Assets $ 4,762.8 $4,598.1
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 357.9 $187.9
Accounts payable 342.5 381.9
Customer advances 100.0 61.4
Accrued income taxes 292.2 320.8
Deferred income taxes 13.2 10.2
Other accrued liabilities 861.2 893.9
--------- ---------
1,967.0 1,856.1
Long-Term Debt 524.1 504.0
Deferred Income Taxes 32.3 27.6
Other Liabilities 447.9 437.4
Stockholders' Equity
Common stock - $1.50 par value
Authorized - 250,000,000 shares
Issued - 1994 - 188,301,569 shares 282.5
1993 - 188,328,570 shares 282.5
Additional paid-in capital 442.7 431.5
Retained earnings 2,489.4 2,447.3
Treasury stock - 1994 - 59,048,546 shares (1,509.5)
1993 - 56,769,007 shares (1,428.4)
Accumulated foreign currency translation 99.2 52.9
Pension liability adjustment (12.8) (12.8)
--------- ---------
1,791.5 1,773.0
--------- ---------
Total Liabilities and Stockholders' Equity $ 4,762.8 $ 4,598.1
--------- ---------
--------- ---------
</TABLE>
<PAGE>
Page 6
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
(1) The financial information and statements of companies owned 20 percent to
50 percent accounted for using the equity method are omitted pursuant to
Rule 10-01 of Regulation S-X.
(2) Interest consists of the following:
<TABLE>
<CAPTION>
Second Quarter Six Months
--------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest expense $19.2 $18.1 $35.6 $36.7
Interest income ( 3.9) ( 4.4) ( 7.7) ( 8.2)
----- ----- ----- ------
Total $15.3 $13.7 $27.9 $28.5
----- ----- ----- ------
----- ----- ----- ------
</TABLE>
Interest paid amounted to $22.6 and $33.5 for the second quarter and six
months of 1994 and $26.0 and $35.8 for the second quarter and six months of
1993, respectively.
(3) Income tax provisions for interim periods are based on estimated effective
annual income tax rates. Income tax expense varies from the normal U.S.
statutory tax rate primarily because of state taxes and variations in the
tax rates on foreign source income. While a portion of the annual tax
provisions will be deferred income taxes, it is not practicable to
determine the amount or composition of deferred income taxes for interim
periods. Income taxes paid, net of refunds received, amounted to $72.1 and
$75.9 for the second quarter and six months of 1994 and $39.8 and $58.8 for
the second quarter and six months of 1993, respectively.
(4) Dividends per share of common stock were $.24 and $.48 for the second
quarter and six months of 1994 and $.2225 and $.445 for the second quarter
and six months of 1993, respectively.
(5) Inventories consist of the following:
<TABLE>
<CAPTION>
July 3, December 31,
1994 1993
-------- ------------
<S> <C> <C>
Finished goods $ 321.8 $ 265.3
Inventories related to long-term contracts 92.1 97.7
Work in process 166.5 168.1
Raw materials and supplies 231.9 229.0
------- --------
Total $ 812.3 $ 760.1
------- --------
------- --------
</TABLE>
(6) Litton Litigation.
On March 13, 1990, Litton Systems Inc. filed suit against Honeywell in U.S.
District Court, Central District of California, alleging Honeywell patent
infringement relating to the process used by Honeywell to coat mirrors
incorporated in its ring laser gyroscopes; attempted monopolization by
Honeywell of certain alleged markets for products containing ring laser
gyroscopes; and intentional interference by Honeywell with Litton's
prospective advantage in European markets and with its contractual
relationships with Ojai Research, Inc., a California corporation.
Honeywell has filed counterclaims against Litton alleging, among other
things, violations by Litton of various antitrust laws including attempted
monopolization of markets for inertial systems and interference with
Honeywell's relationships with suppliers.
<PAGE>
Page 7
The trial of the patent infringement and intentional interference claims
commenced June 4, 1993, and on August 31, 1993, a federal court jury in
U.S. District Court in Los Angeles returned a verdict against Honeywell on
each of these claims and awarded damages in the amount of $1,200.0 and
concluded that the patent infringement was willful. Honeywell believes the
verdict is unsupported by the facts; that the Litton patent is invalid; and
that Honeywell's process differs from Litton's. The judge in the case held
a hearing November 22, 1993, on various issues including, among others,
Honeywell's claims that the patent was improperly obtained due to alleged
"inequitable conduct" on the part of Litton and Honeywell's other legal and
equitable defenses, as well as on Litton's motion to enhance the damage
award. The court has not yet entered a judgment. The trial will conclude
when the court has resolved legal issues that could alter or eliminate the
jury verdict. Honeywell will evaluate the outcome of the trial, including
appealing any significant judgment against the company. The trial for the
antitrust claims of Litton and Honeywell is scheduled to commence in
November 1995.
The court has yet to rule on significant, complex and interrelated issues
that could alter or eliminate the jury verdict; therefore, Honeywell and
its counsel have determined that it is not possible to estimate the amount
of damages, if any, that ultimately may be incurred. As a result, no
provision has been made in the financial statements with respect to this
contingent liability.
(7) As of July 3, 1994, Honeywell had reserved 19,255,788 shares of common
stock for the issuance of shares in connection with employee stock option
and stock bonus plans.
(8) The figures set forth in this quarterly report are unaudited but, in the
opinion of the registrant, include all adjustments necessary for a fair
presentation of the results of operations for the three-month and six-month
periods ended July 3, 1994, and July 4, 1993. Honeywell's accounting
policies are described in the notes to financial statements in its 1993
Annual Report on Form 10-K.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Net income was $56.9 million ($0.44 per share) and $104.6 million ($0.80 per
share) for the second quarter and six months of 1994 compared with $71.4 million
($0.53 per share) and $128.7 million ($0.95 per share) for the second quarter
and six months of 1993. Research and development expenditures declined slightly
for the second quarter and six months of 1994 primarily because of lower R&D
spending in Space and Aviation Control. R&D expenditures in the second quarter
and six-months of 1993 had increased sharply for spending associated with next-
generation technologies. Selling, general and administrative expenses increased
for the second quarter and six months of 1994 due to lower autofocus royalty
payments and Honeywell's continued expansion in key geographic regions. Equity
income, which includes Honeywell's portion of the earnings of companies owned 20
percent to 50 percent, declined for the second quarter and six months of 1994
primarily because of the write-down of assets in one of Honeywell's equity
investments. The second quarter and six months of 1993 included an after-tax
gain of $13.9 million ($0.10 per share) from the settlement of a lawsuit with
Unisys Corporation and other parties in connection with Honeywell's 1986
purchase of the Sperry Aerospace Group. The second quarter and six months of
1993 also included special charges of $13.3 million ($0.10 per share) after
income taxes for productivity improvements.
Worldwide sales increased 1 percent for the second quarter and declined 3
percent for the six months when compared with last year. Compared with 1993,
international sales were increased by the effect of currency translations
because of the weakness of the U.S. dollar against local currencies in many
countries where Honeywell does business. Excluding the impact of a weaker
dollar on international sales and the year-earlier results of the Keyboard
business, which was sold in July 1993, Honeywell sales were up slightly for the
second quarter compared to 1993. Home and Building Control sales increased 9
percent for the second quarter and 8 percent for the six months as U.S. sales
continued to benefit from an improving economy and growing consumer confidence.
Home Control continued to gain greater penetration among OEM customers worldwide
and experienced growth from a number of new product introductions, such as a new
line of smart gas valves. Building Control experienced continued success in the
energy retrofit market. Excluding year-earlier results of the Keyboard
business, Industrial
<PAGE>
Page 8
Control sales increased 14 percent for the second quarter and 7 percent for the
six months when compared with 1993. Control Components benefitted from
continued improvements in the U.S. durable goods market, particularly in the
automotive and appliance industries. Industrial Automation and Control
experienced improving sales for TotalPlant-TM- Open Solutions as industry
continues to focus on improving productivity and meeting stringent environmental
and safety regulations worldwide. Sales to the hydrocarbon processing market
were strong as companies invested to comply with the U.S. Environmental
Protection Agency regulations for reformulated fuels. As expected, Space and
Aviation Control sales, which declined 17 percent for the second quarter and 19
percent for the six months, continued to reflect lower aircraft production rates
and reduced government spending. Other sales, which include various operations
that do not correspond to Honeywell's primary business segments, such as the
Solid State Electronics Center and the Honeywell Technology Center, declined in
the second quarter and six months of 1994.
Excluding special charges associated with productivity initiatives recorded in
the second quarter of 1993, worldwide operating profit declined 7 percent for
the second quarter and 9 percent for the six months of 1994. The combined
effect of the U.S. dollar and intra-European currency movements reduced 1994
profits by about $5 million in the second quarter. Home and Building Control
operating profit increased 24 percent for the second quarter and 16 percent for
the six months compared with 1993 benefiting from an improving U.S. economy,
growing consumer confidence and favorable developments in certain employee-
related liabilities. Industrial Control operating profit increased 12 percent
for the second quarter and 2 percent for the six months compared with 1993
primarily as a result of increased second quarter volume in Industrial
Automation and Control where environmental and safety regulations remain key
drivers of spending around the world. Lower aircraft production rates, reduced
government spending and continued investment in next-generation technology
slightly offset by favorable contract performance and favorable warranty and
employee-related liability experience in Space and Aviation Control resulted in
a 50 percent decline in operating profit for the second quarter and 44 percent
for the six months. Space and Aviation Control operating profit included
special charges for productivity improvements of $3.7 million in the second
quarter and six months of 1993. Other operations had an operating profit of
$4.1 million for the six months of 1994 compared with an operating loss of $10.5
million for the six months of 1993, which included a second quarter special
charge of $11.0 million for productivity initiatives.
Total worldwide orders increased 12 percent for the quarter and 15 percent for
the six months, compared with the same periods last year. Second quarter orders
for Home and Building Control increased 6 percent, primarily in the United
States. Order activity in the targeted customer segments of schools, health-
care facilities and industrial plants was up more than 20 percent in the
quarter. On a comparable basis, second quarter Industrial Control orders were
up 1 percent. Orders in Space and Aviation Control increased more than 20
percent in the second quarter as a result of a contract in Space Systems to
provide cockpit displays for the space shuttle.
FINANCIAL CONDITION
Cash flow used for investing activities net of operating activities for the
first six months of 1994 was $53 million.
Debt as a percentage of total capital at the end of the second quarter was 33.0
percent compared with 28.1 percent at the end of 1993. Long-term debt
increased $20 million and short-term debt increased $170 million from 1993 year-
end to finance general corporate requirements and $45 million of acquisitions.
Common shares outstanding decreased by 2,306,540 from the end of 1993 to 129.3
million. Shares repurchased during the first six months of 1994 totaled
2,794,900 at a cost of $91.6 million. Shares issued through employee stock
plans totaled 488,360. Stockholders' equity increased to $1,792 million from
$1,773 million at the end of 1993. The increase in stockholders' equity
includes a $42 million addition to retained earnings resulting from current year
earnings less dividends and a $46 million increase in the accumulated foreign
currency translation balance, partially offset by $70 million in net treasury
stock transactions.
On August 31, 1993, a federal court jury in U.S. District Court in Los Angeles
returned a verdict against Honeywell on patent infringement and intentional
interference claims in the amount of $1.2 billion. These claims
<PAGE>
Page 9
were part of a lawsuit brought by Litton Systems Inc. alleging, among other
things, Honeywell patent infringement relating to the process used by Honeywell
to coat mirrors incorporated in its ring laser gyroscopes. Honeywell believes
the verdict is unsupported by the facts; that the Litton patent is invalid; and
that Honeywell's process differs from Litton's. The judge in the case held a
hearing November 22, 1993, on various issues including, among others,
Honeywell's claims that the patent was improperly obtained due to alleged
"inequitable conduct" on the part of Litton and Honeywell's other legal and
equitable defenses, as well as on Litton's motion to enhance the damage award.
The court has yet to enter a judgment. The trial will conclude when the court
has resolved legal issues that could alter or eliminate the jury verdict.
Honeywell will evaluate the outcome of the trial, including appealing any
significant judgment against the company. The trial for the antitrust claims
of Litton and Honeywell is scheduled to commence in November 1995.
The court has yet to rule on significant, complex and interrelated issues that
could alter or eliminate the jury verdict; therefore, Honeywell and its counsel
have determined that it is not possible to estimate the amount of damages, if
any, that may ultimately be incurred. As a result, no provision has been made
in the financial statements with respect to this contingent liability.
Honeywell continues to believe the lawsuit is without merit, and its financial
position, liquidity and business strategies have not been adversely affected by
the jury verdict.
On July 3, 1994, Honeywell had $1,905 million of committed credit lines with
twenty-two banks. During the second quarter, $1,200 million of the committed
credit lines was syndicated to twenty banks. There were no borrowings under
these lines. In addition, certain foreign units had $356 million in credit
lines available at the end of the second quarter. The company intends to
initiate a medium-term note program in August 1994 to provide funds for general
corporate purposes. The company believes its liquidity is adequate to meet its
financing requirements, including support of commercial paper and bank note
borrowings and an appeal bond that could be required in the Litton litigation.
Honeywell's credit ratings remained unchanged during the quarter. Ratings for
long-term and short-term debt are, respectively, A/A-1 by Standard and Poor's
Corporation, A/Duff1 by Duff and Phelps Corporation, and A3/P-2 by Moody's
Investor Service, Inc. On August 31, 1993, Moody's Investor Service, Inc.
placed Honeywell on credit watch status as a result of the jury verdict in the
Litton litigation. Any lowering of Honeywell's present credit ratings could
lead to higher interest costs by potentially reducing Honeywell's ability to
access the commercial paper market and other unsecured borrowing sources on
terms as favorable as those currently available.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported in Item 3. "Legal Proceedings" of Part I of
Honeywell's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, Honeywell is a defendant in a lawsuit filed by
Litton Systems Inc. alleging patent infringement relating to the
process used by Honeywell to coat mirrors incorporated in its ring
laser gyroscopes; attempted monopolization by Honeywell of certain
alleged markets for products containing ring laser gyroscopes; and
intentional interference by Honeywell with Litton's prospective
advantage in European markets and with its contractual relationships
with Ojai Research, Inc., a California corporation.
The information reported in Note (6) to the Financial Statements set
forth in Item 1 of Part I of this report and the information reported
in Item 2 of Part I of this report regarding the financial condition
of the company, both with respect to recent developments in this
litigation, are incorporated by reference into this Item 1.
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders of Honeywell Inc. in Phoenix,
Arizona, on April 19, 1994, a proposal to elect directors for the year
commencing April 20, 1994, was submitted to a vote of
<PAGE>
Page 10
shareholders. A majority of the shares represented by proxy or in
person at the meeting were voted in favor of electing management's
nominees for directors as follows:
For Withheld
--- --------
Albert J. Baciocco, Jr. 106,517,727 403,440
Elizabeth E. Bailey 106,497,197 423,970
Michael R. Bonsignore 106,506,467 414,700
Earnest Hubert Clark, Jr. 106,507,355 413,812
R. Donald Fullerton 106,501,729 419,438
Gerald Greenwald 106,523,112 398,055
James J. Howard 106,511,056 410,111
Bruce E. Karatz 106,494,089 427,078
D. Larry Moore 106,503,293 417,874
A. Barry Rand 106,507,305 413,862
Steven G. Rothmeier 106,445,535 475,632
Michael W. Wright 106,520,971 400,196
A proposal to ratify the selection of Deloitte & Touche as the
auditors of the Company was also submitted to a vote of shareholders.
106,110,705 shares voted in favor of the proposal, 446,174 shares
voted against the proposal and 364,288 shares abstained from voting.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(11) Computation of Earnings Per Share.
(12) Computation of Ratio of Earnings to Fixed Charges.
(b) On June 30, 1994, the registrant filed a report on Form 8-K
regarding the syndication of a $1.2 billion credit facility for
the benefit of the registrant, together with a copy of a Credit
and Reimbursement Agreement evidencing same, entered into between
the registrant and the banks parties thereto on June 14, 1994.
<PAGE>
Page 11
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HONEYWELL INC.
Date: August 3, 1994 By: /s/ E. D. Grayson
-------------------------------
E. D. Grayson
Vice President and General Counsel
Date: August 3, 1994 By: /s/ W. M. Hjerpe
-------------------------------
W. M. Hjerpe
Vice President and Controller
(Chief Accounting Officer)
<PAGE>
EXHIBIT (11)
HONEYWELL INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
-------------------------- --------------------------
July 3, July 4, July 3, July 4,
1994 1993 1994 1993
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
PRIMARY:
Income:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 56.9 $ 71.4 $ 104.6 $ 128.7
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Shares:
Weighted average of shares outstanding during the year . . . . 129,484,942 134,854,738 130,172,681 135,506,529
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Earnings per share:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.44 $ 0.53 $ 0.80 $ 0.95
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
ASSUMING FULL DILUTION:
Income:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 56.9 $ 71.4 $ 104.6 $ 128.7
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Shares:
Weighted average of shares outstanding during the year . . . . 129,484,942 134,854,738 130,172,681 135,506,529
Shares issuable in connection with stock plans
less shares purchasable from proceeds . . . . . . . . . . . . 501,979 1,552,687 568,464 1,476,095
----------- ----------- ----------- -----------
Total Shares . . . . . . . . . . . . . . . . . . . . . . . . 129,986,921 136,407,425 130,741,145 136,982,624
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Earnings per share:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.44 $ 0.52 $ 0.80 $ 0.94
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
<PAGE>
EXHIBIT (12)
HONEYWELL AND SUBSIDIARIES
COMBINED WITH PROPORTIONAL SHARES OF 50% OWNED COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
(Unaudited)
Six
Months
Ended
July 3,
1994
-------
<S> <C>
INCOME BEFORE INCOME TAXES $162.20
DEDUCT:
EQUITY INCOME 0.80
-------
161.40
SUBTOTAL
ADD (DEDUCT):
DIVIDENDS FROM LESS THAN 50%
OWNED COMPANIES 1.11
PROPORTIONAL SHARE OF
LOSS BEFORE INCOME TAXES OF
50% OWNED COMPANIES (3.04)
-------
ADJUSTED INCOME 159.47
-------
FIXED CHARGES
INTEREST ON INDEBTEDNESS 34.36
AMORTIZATION OF DEBT EXPENSE 1.24
INTEREST PORTION OF RENT EXPENSE 23.83
-------
TOTAL FIXED CHARGES 59.43
-------
TOTAL AVAILABLE INCOME $218.90
-------
-------
RATIO OF EARNINGS TO FIXED CHARGES 3.68
-------
-------
</TABLE>
