<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 2, 1995
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 2, 1995, the number of shares outstanding of the registrant's
common stock, $1.50 par value, was 127,202,217.
<PAGE>
Page 2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
INCOME STATEMENT
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
Second Quarter Ended
-----------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) July 2, 1995 July 3, 1994
.........................................................................................
<S> <C> <C>
SALES $ 1,655.6 $ 1,463.8
---------- ----------
COSTS AND EXPENSES
Cost of sales 1,137.8 1,001.8
Research and development 83.4 82.1
Selling, general and administrative 317.5 278.4
Interest - net 18.3 15.3
Equity income (5.7) (2.0)
---------- ----------
1,551.3 1,375.6
---------- ----------
INCOME BEFORE INCOME TAXES 104.3 88.2
PROVISION FOR INCOME TAXES 35.4 31.3
---------- ----------
NET INCOME $ 68.9 $ 56.9
---------- ----------
---------- ----------
EARNINGS PER COMMON SHARE $ 0.54 $ 0.44
---------- ----------
---------- ----------
</TABLE>
<PAGE>
Page 3
INCOME STATEMENT
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) July 2, 1995 July 3, 1994
.........................................................................................
<S> <C> <C>
SALES $ 3,134.3 $ 2,811.7
---------- ----------
COSTS AND EXPENSES
Cost of sales 2,151.0 1,919.1
Research and development 162.2 154.3
Selling, general and administrative 605.4 549.0
Interest - net 35.6 27.9
Equity income (7.1) (0.8)
---------- ----------
2,947.1 2,649.5
---------- ----------
INCOME BEFORE INCOME TAXES 187.2 162.2
PROVISION FOR INCOME TAXES 63.6 57.6
---------- ----------
NET INCOME $ 123.6 $ 104.6
---------- ----------
---------- ----------
EARNINGS PER COMMON SHARE $ 0.97 $ 0.80
---------- ----------
---------- ----------
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 127,196,122 130,172,681
</TABLE>
<PAGE>
Page 4
STATEMENT OF CASH FLOWS
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
---------------------------
(DOLLARS IN MILLIONS) July 2, 1995 July 3, 1994
.............................................................................................
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 123.6 $ 104.6
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation 118.8 116.4
Amortization of intangibles 28.2 24.8
Deferred income taxes 14.9 6.4
Equity (income) loss, net of dividends received (7.1) 0.3
Loss on sale of assets 1.7 1.2
Contributions to employee stock plans 15.9 15.2
(Increase) decrease in receivables 18.1 (17.0)
Increase in inventories (56.2) (50.3)
Decrease in accounts payable (31.1) (46.5)
Decrease in accrued income taxes and interest (32.3) (25.6)
Other changes in working capital, excluding short-term
investments and short-term debt (23.5) (6.7)
Other noncurrent items - net (20.1) (24.4)
------- -------
Net cash flows from operating activities 150.9 98.4
------- -------
Cash Flows from Investing Activities
Proceeds from sale of assets 11.1 7.0
Capital expenditures (115.6) (129.3)
Investment in acquisitions (31.4) (44.9)
Increase in short-term investments (2.4) (4.0)
Other - net 0.4 19.6
------- -------
Net cash flows from investing activities (137.9) (151.6)
------- -------
Cash Flows from Financing Activities
Net increase (decrease) in short-term debt (54.2) 161.7
Proceeds from issuance of long-term debt 123.0 26.4
Repayment of long-term debt (10.4) (0.2)
Purchase of treasury stock (58.7) (94.1)
Proceeds from exercise of stock options 31.4 4.1
Dividends paid (63.8) (62.3)
------- -------
Net cash flows from financing activities (32.7) 35.6
------- -------
Effect of Exchange Rate Changes on Cash 10.5 8.3
------- -------
Decrease in Cash and Cash Equivalents (9.2) (9.3)
Cash and Cash Equivalents at Beginning of Year 267.4 242.3
------- -------
Cash and Cash Equivalents at End of Six Months $ 258.2 $ 233.0
------- -------
------- -------
</TABLE>
<PAGE>
Page 5
STATEMENT OF FINANCIAL POSITION
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS) July 2, 1995 December 31, 1994
............................................................................................
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 258.2 $ 267.4
Short-term investments 10.2 7.4
Receivables (less allowance for doubtful accounts:
1995, $31.3; 1994, $31.1) 1,435.2 1,406.9
Inventories (less progress billing on uncompleted
contracts: 1995, $59.2; 1994, $32.5) 828.7 760.2
Deferred income taxes 193.6 207.5
--------- ---------
2,725.9 2,649.4
Investments and Advances 267.9 242.8
Property, Plant and Equipment
Property, plant and equipment 2,866.3 2,716.8
Less accumulated depreciation 1,755.6 1,617.3
--------- ---------
1,110.7 1,099.5
Other Assets
Long-term receivables (less allowance for doubtful
accounts: 1995, $0.7; 1994, $0.7) 58.3 40.1
Intangible assets 573.2 566.2
Deferred income taxes 102.0 98.5
Other 211.3 189.4
--------- ---------
Total Assets $ 5,049.3 $ 4,885.9
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 394.7 $ 360.6
Accounts payable 411.5 429.6
Customer advances 93.2 72.6
Accrued income taxes 282.3 309.6
Deferred income taxes 6.7
Other accrued liabilities 870.5 899.4
--------- ---------
2,058.9 2,071.8
Long-Term Debt 543.9 501.5
Deferred Income Taxes 39.6 39.8
Other Liabilities 417.7 418.1
Stockholders' Equity
Common stock - $1.50 par value
Authorized - 250,000,000 shares
Issued - 1995 - 188,248,492 shares 282.4
1994 - 188,286,000 shares 282.4
Additional paid-in capital 463.4 446.9
Retained earnings 2,660.4 2,600.4
Treasury stock - 1995 - 61,046,275 shares (1,604.1)
1994 - 61,030,565 shares (1,576.5)
Accumulated foreign currency translation 193.0 107.4
Pension liability adjustment (5.9) (5.9)
--------- ---------
1,989.2 1,854.7
--------- ---------
Total Liabilities and Stockholders' Equity $ 5,049.3 $ 4,885.9
--------- ---------
--------- ---------
</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 Ended Six Months Ended
---------------------------- ----------------------------
July 2, 1995 July 3, 1994 July 2, 1995 July 3, 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest expense $22.4 $19.2 $43.2 $35.6
Interest income (4.1) (3.9) (7.6) (7.7)
----- ----- ----- -----
Total $18.3 $15.3 $35.6 $27.9
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
Interest paid amounted to $30.2 and $43.7 for the second quarter and six
months of 1995 and $22.6 and $33.5 for the second quarter and six months of
1994, 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 $75.7 and $72.2 for the second quarter and six months of 1995
and $72.1 and $75.9 for the second quarter and six months of 1994,
respectively.
(4) Dividends per share of common stock were $0.25 and $0.50 for the second
quarter and six months of 1995 and $0.24 and $0.48 for the second quarter
and six months of 1994, respectively.
(5) Inventories consist of the following:
<TABLE>
<CAPTION>
July 2, December 31,
1995 1994
------- ------------
<S> <C> <C>
Finished goods $ 369.4 $ 297.4
Inventories related to long-term contracts 77.7 89.1
Work in process 171.5 156.9
Raw materials and supplies 210.1 216.8
------- -------
Total $ 828.7 $ 760.2
------- -------
------- -------
</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 and predatory pricing by Honeywell in 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
generally denied Litton's allegations, contested both the validity and
infringement of the patent; and alleged that the patent had been
obtained by Litton's inequitable conduct before the United States
Patent and Trademark Office. Honeywell
<PAGE>
Page 7
also filed counterclaims against Litton alleging, among other things,
that Litton's business and litigation conduct violated federal and state
laws, causing Honeywell considerable damage and expense.
On January 9, 1995, Judge Mariana Pfaelzer of the U.S. District Court set
aside an August, 1993 jury verdict and damage award of $1.2 billion
against Honeywell in the patent and interference with contract case. She
ruled, among other things, that the Litton patent was unenforceable
because it was obtained by inequitable conduct and invalid because it was
an invention that would have been obvious from combining existing
processes. She further ruled that if her judgment were ever subsequently
vacated or reversed on appeal, Honeywell would be granted a new trial on
the issue of damages because the jury's award in 1993 was inconsistent
with the clear weight of the evidence and permitting it to stand would
constitute a miscarriage of justice. Litton has appealed to the Court of
Appeals for the Federal Circuit, Washington, D.C. Briefing and arguments
by the parties on the patent appeal are expected to be concluded in the
fall of 1995 with a decision expected to follow shortly thereafter. In
the companion antitrust case, Honeywell has filed a motion for summary
judgment to dismiss all of Litton's claims. For any of Litton's various
antitrust claims that survive that motion, a trial is scheduled to
commence in November 1995 before Judge Pfaelzer and a different jury.
Honeywell believes that the patent judgment against Litton will be upheld
on appeal, and that Litton's antitrust claims are without merit. As a
result, no provision has been made in the financial statements with
respect to this contingent liability.
(7) As of July 2, 1995, Honeywell had reserved 12,673,742 shares of
common stock for the issuance of shares in connection with 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 2, 1995, and July 3, 1994. Honeywell's
accounting policies are described in the notes to financial statements in
its 1994 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 $68.9 million ($0.54 per share) and $123.6 million ($0.97 per
share) for the second quarter and first six months of 1995 compared with
$56.9 million ($0.44 per share) and $104.6 million ($0.80 per share) for the
second quarter and first six months of 1994.
Worldwide sales increased 13 percent to $1,656 million for the second quarter
and 11 percent to $3,134 million for the first six months of 1995. Operating
profit increased 19 percent to $146.9 million for the second quarter and 17
percent to $271.3 million for the first six months of 1995. Orders increased
11 percent for the second quarter and 10 percent for the six months when
compared with last year. The weakness of the U.S. dollar had a positive
translation effect of approximately 3 percent on Honeywell's results for the
first six months of 1995. Net interest expense increased for the second
quarter and first six months of 1995 primarily because of higher interest
rates on Honeywell's floating debt portfolio and higher debt levels.
Earnings of companies owned 20 percent to 50 percent, which are accounted for
using the equity method, increased for the second quarter and six months
compared with 1994 which included the writedown of assets.
Home and Building Control sales and operating profit increased 18 percent and
24 percent, respectively, for the second quarter and 15 percent and 16
percent, respectively, for the first six months of 1995 primarily benefiting
from improving international performance. Orders were up 12 percent for the
second quarter and 13 percent for the first six months of 1995. Home Control
sales and operating profit benefited from strong international performance
for the second quarter and first six months of 1995. Home Control introduced
The Perfect Climate Comfort Center-TM-, a low-cost automated, integrated home
temperature and indoor air quality control system, in the second quarter. In
addition, Home Control implemented cost-reduction initiatives including the
transfer of an electric heat thermostat line from Canada to Mexico and
headcount reductions in the protection services business.
<PAGE>
Page 8
Orders were up in the second quarter of 1995 as a result of strong
international performance, especially in combustion controls and water
controls in Europe. Building Control continued to see strong growth in the
healthcare energy retrofit market in the United States and benefited from
improved project margins on international business, as well as continued
improvement on Installed Systems in the United States in the second quarter.
Building Control experienced solid order activity in international markets,
with particular strength in Asia. Honeywell continued to expand its global
presence through acquisitions of building control service companies in Spain,
Finland and Norway.
Industrial Control sales and operating profit increased 7 percent and 9
percent, respectively, for the second quarter and 11 percent and 14 percent,
respectively, for the six months of 1995. Orders were up 19 percent for the
second quarter and 15 percent for the first six months of 1995. Sensing and
Control experienced strong international sales and earnings performance in
the second quarter as a result of volume increases and lower costs in Europe.
Solid state switch margins showed improvement in the United States. There
was solid order growth in the commercial sensors market in Europe as well as
increased activity in the U.S. avionics market. A new solenoid valve series
was introduced that will help customers meet stringent environmental and
safety regulations worldwide. Industrial Automation and Control had a modest
sales increase for the second quarter, but operating profit declined
reflecting the timing of TotalPlant-TM- project implementation and the current
mix of lower margin services. Strong order activity was experienced,
particularly in Asia and Europe. During the quarter, Honeywell introduced a
major new release of software and enhanced hardware components for its TDC
3000X-Registered Trademark- industrial automation system that will significantly
increase productivity, safety and regulatory compliance for the customer.
Space and Aviation Control sales and operating profit increased 11 percent
and 38 percent, respectively, for the second quarter, and 6 percent and 23
percent, respectively, for the first six months of 1995. Orders were flat
for the quarter and declined 2 percent for the six months. Adjusting orders
for the large Space Station orders received in the first half of 1994, orders
increased over 10 percent. Space and Aviation Control continues to broaden
its product portfolio and global reach through strategic alliances allowing
product development outsourcing and lower product cost. Sales and profits in
Commercial Aviation Systems for the second quarter and first six months of
1995 showed a strong increase as a result of the delivery of collision
avoidance systems ordered in the fourth quarter of 1994 to a variety of
airlines and delivery of initial spare parts for the Boeing 777. Results
should moderate back to normalized levels for the second half of 1995. Sales
and profits in Military Avionics declined for the second quarter and first
six months of 1995 as a result of the sales and margin mix. Sales increased
but operating profit declined in Space Systems for the second quarter and
first six months of 1995 as a result of the lower margin mix of programs.
Sales from other operations which do not correspond with Honeywell's primary
business segments, including the activities of various units such as the
Solid State Electronics and the Honeywell Technology research and development
centers, increased for the second quarter and first six months of 1995.
These units had operating profits of $4.5 million and $4.1 million for the
first six months of 1995 and 1994, respectively.
FINANCIAL CONDITION
Stockholders' equity increased to $1,989 million from $1,855 million at the
end of 1994. The increase in stockholders' equity includes a $60 million
addition to retained earnings resulting from current year earnings less
dividends and a $86 million increase in the accumulated foreign currency
translation balance, partially offset by $12 million in net treasury stock
transactions.
Common shares outstanding decreased by 53,218 from the end of 1994 to 127.2
million. Shares repurchased during the first six months of 1995 totaled
1,519,500 at a cost of $59.5 million. Shares issued during the first six
months of 1995 through stock option and stock bonus plans totaled 1,466,282.
Debt as a percentage of total capital at the end of the second quarter was
32.1 percent compared with 31.7 percent at the end of 1994. Total debt
increased $76.5 million from 1994 year end. The increase was used to finance
capital expenditures, $31.4 million of acquisitions and working capital.
<PAGE>
Page 9
Cash flow generated from operating activities, net of investing activities,
for the first six months of 1995 was $13 million.
During 1994, 1993 and 1992 Honeywell established total reserves of $242.3
million for productivity initiatives to strengthen the company's
competitiveness. Expenditures of $38.2 million in the first six months of
1995 included $30.7 million and $7.5 million related to work force reduction
costs and facilities consolidation costs, respectively. Accrued costs
remaining to be funded include $25.7 million related to work force reduction
costs and $9.0 million related to facilities consolidation costs. Future
cash flows from operating activities are expected to be sufficient to fund
these accrued costs.
On July 2, 1995, Honeywell had $737 million of committed credit lines with
twenty-one banks. There were no borrowings under these lines. In addition,
certain foreign units had $384 million in credit lines available at the end
of the second quarter. Honeywell believes its available cash, committed
credit lines and access to the public debt markets through its $500 million
medium-term note program provide adequate short-term and long-term liquidity.
During the second quarter, Honeywell issued $121 million of medium-term notes
with maturities ranging from 3 to 7 years. Following this issuance, $222
million was outstanding under the $500 million medium-term note program.
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 Investors Service, Inc.
Honeywell utilizes various foreign currency exchange contracts and interest
rate swaps to manage its exposure to exchange rate and interest rate
fluctuations and its mix of fixed and floating interest rates. At July 2,
1995, the notional amount of outstanding foreign exchange contracts was
approximately $1.229 billion. The amount of hedging gains and losses
deferred was not material at July 2, 1995. The notional amount of
outstanding interest rate swaps was $234 million at July 2, 1995.
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, 1994, 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.
<PAGE>
Page 10
ITEM 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders of Honeywell Inc. in Minneapolis,
Minnesota, on April 18, 1995, a proposal, to elect directors for the
year commencing April 19, 1995, was submitted to a vote of
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:
<TABLE>
<CAPTION>
For Withheld
----- ---------
<S> <C> <C>
Albert J. Baciocco, Jr. 107,681,380 1,292,121
Elizabeth E. Bailey 107,710,386 1,263,115
Michael R. Bonsignore 107,535,599 1,437,902
Earnest Hubert Clark, Jr. 107,705,482 1,268,019
William H. Donaldson 107,675,749 1,297,752
R. Donald Fullerton 107,733,512 1,239,989
James J. Howard 107,781,702 1,191,799
Bruce E. Karatz 107,775,976 1,197,525
D. Larry Moore 107,597,655 1,375,846
A. Barry Rand 107,745,836 1,227,665
Steven G. Rothmeier 107,668,666 1,304,835
Michael W. Wright 107,692,811 1,280,690
</TABLE>
A proposal to ratify the selection of Deloitte & Touche LLP as the
auditors of the company was also submitted to a vote of shareholders.
105,461,497 shares voted in favor of the proposal, 2,350,364 shares
voted against the proposal and 1,161,640 shares abstained from voting.
A proposal to adopt the Honeywell Senior Management Performance
Incentive Plan was also submitted to a vote of shareholders.
100,135,915 shares voted in favor of the proposal, 6,959,920 shares
voted against the proposal and 1,877,666 shares abstained from voting.
ITEM 5. Other Information
On July 18, 1995 the company initiated a program to repurchase up to
$250 million in shares of its Common Stock, in addition to the 2
million shares authorized for repurchase in 1995 under the company's
current program. The company's Board of Directors authorized management
to determine the price and timing of such share repurchases.
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.
(27) Financial Data Schedule
<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 15, 1995 By: /s/ E. D. Grayson
---------------------
E. D. Grayson
Vice President and General Counsel
Date: August 15, 1995 By: /s/ P.M. Palazzari
---------------------
P. M. Palazzari
Vice President and Controller
(Chief Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Page No.
----------- --------
11 Computation of Earnings Per Share i
12 Computation of Ratio of Earnings to Fixed Charges ii
27 Financial Data Schedule iii
<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 2, July 3, July 2, July 3,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY:
Income:
Net income.............................................. $ 68.9 $ 56.9 $ 123.6 $ 104.6
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Shares:
Weighted average of shares outstanding during the year.. 127,201,311 129,484,942 127,196,122 130,172,681
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Earnings per share:
Net income.............................................. $ 0.54 $ 0.44 $ 0.97 $ 0.80
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
ASSUMING FULL DILUTION:
Income:
Net income.............................................. $ 68.9 $ 56.9 $ 123.6 $ 104.6
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Shares:
Weighted average of shares outstanding during the year.. 127,201,311 129,484,942 127,196,122 130,172,681
Shares issuable in connection with stock plans
less shares purchaseable from proceeds................ 1,865,301 501,979 1,941,974 568,464
----------- ----------- ----------- -----------
Total Shares........................................ 129,066,612 129,986,921 129,138,096 130,741,145
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Earnings per share:
Net income.............................................. $ 0.53 $ 0.44 $ 0.96 $ 0.80
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
i
<PAGE>
EXHIBIT (12)
HONEYWELL INC. AND SUBSIDIARIES
COMBINED WITH PROPORTIONAL SHARES OF 50% OWNED COMPANIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in Millions)
Six Months Ended
July 2, 1995
----------------
<S> <C>
Income before Income Taxes......................... $ 187.20
Deduct:
Equity income.................................. 7.10
--------
Subtotal....................................... 180.10
Add (deduct):
Dividends from less than 50% owned companies... -
Proportional share of income (loss) before
income taxes of 50% owned companies......... 0.23
--------
Adjusted income................................... 180.33
--------
Fixed Charges
Interest on indebtedness....................... 41.70
Amortization of debt expense................... 1.48
Interest portion of rent expense............... 24.33
--------
Total Fixed Charges............................... 67.51
--------
Total Available Income............................ $247.84
--------
--------
Ratio of Earnings to Fixed Charges................ 3.67
--------
--------
</TABLE>
ii
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUL-02-1995
<CASH> 258
<SECURITIES> 10
<RECEIVABLES> 1,467
<ALLOWANCES> 31
<INVENTORY> 829
<CURRENT-ASSETS> 2,726
<PP&E> 2,866
<DEPRECIATION> 1,756
<TOTAL-ASSETS> 5,049
<CURRENT-LIABILITIES> 2,059
<BONDS> 544
<COMMON> 282
0
0
<OTHER-SE> 1,707
<TOTAL-LIABILITY-AND-EQUITY> 5,049
<SALES> 3,134
<TOTAL-REVENUES> 3,134
<CGS> 2,151
<TOTAL-COSTS> 2,151
<OTHER-EXPENSES> 162
<LOSS-PROVISION> 4
<INTEREST-EXPENSE> 43
<INCOME-PRETAX> 187
<INCOME-TAX> 64
<INCOME-CONTINUING> 124
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 124
<EPS-PRIMARY> 0.97
<EPS-DILUTED> 0.96
</TABLE>
