<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 21, 1999
Honeywell Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-971 41-0415010
---------------- ---------------- --------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Honeywell Plaza
Minneapolis, Minnesota 55408
---------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 951-1000
Not Applicable
------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS.
On July 21, 1999, the Registrant issued a News Release reporting the
following results of its operations for the three-month and six-month periods
ended July 4, 1999:
HONEYWELL INC. AND SUBSIDIARIES
INCOME STATEMENT (UNAUDITED)
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SECOND QUARTER
-------------------------------------
JULY 4, July 5,
1999 1998
------------ ------------
<S> <C> <C>
SALES $ 2,139.6 $ 2,035.2
COSTS AND EXPENSES
Cost of sales 1,467.2 1,383.0
Research and development 112.9 118.4
Selling, general and administrative 327.3 325.8(1)
Interest - net 27.3 26.0
Equity income (4.6) (5.8)
------------ ------------
TOTAL COSTS AND EXPENSES 1,930.1 1,847.4
------------ ------------
INCOME BEFORE INCOME TAXES 209.5 187.8
PROVISION FOR INCOME TAXES 69.2 62.0
------------ ------------
NET INCOME $ 140.3 $ 125.8
BASIC EARNINGS PER COMMON SHARE $ 1.11 $ 1.00
AVERAGE COMMON SHARES OUTSTANDING 126,715,587 126,112,084
DILUTED EARNINGS PER COMMON SHARE $ 1.09 $ 0.98
AVERAGE COMMON AND DILUTIVE SHARES OUTSTANDING 128,986,872 128,093,164
</TABLE>
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
INCOME STATEMENT (UNAUDITED)
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------------------
JULY 4, July 5,
1999 1998
------------ ------------
<S> <C> <C>
SALES $ 4,125.7 $ 3,958.5
COSTS AND EXPENSES
Cost of sales 2,833.2 2,709.8
Research and development 229.8 231.8
Selling, general and administrative 645.4 640.6(1)
Interest - net 53.3 50.2
Equity income (3.0) (5.5)
------------ ------------
TOTAL COSTS AND EXPENSES 3,758.7 3,626.9
------------ ------------
INCOME BEFORE INCOME TAXES 367.0 331.6
PROVISION FOR INCOME TAXES 121.2 109.5
------------ ------------
NET INCOME $ 245.8 $ 222.1
BASIC EARNINGS PER COMMON SHARE $ 1.94 $ 1.76
AVERAGE COMMON SHARES OUTSTANDING 126,480,406 126,152,209
DILUTED EARNINGS PER COMMON SHARE $ 1.92 $ 1.73
AVERAGE COMMON AND DILUTIVE SHARES OUTSTANDING 128,342,264 128,065,830
</TABLE>
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
SALES AND OPERATING PROFIT BY SEGMENT
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SECOND QUARTER
-----------------------------
JULY 4, July 5,
1999 1998
---------- ----------
<S> <C> <C>
SALES
Home and Building Control $ 855.3 $ 788.0
Industrial Control 645.5 637.1
Space and Aviation Control 619.4 590.2
Other 19.4 19.9
---------- ----------
TOTAL SALES 2,139.6 2,035.2
- ----------------------------------------------------------------------
OPERATING PROFIT
Home and Building Control 88.3 69.1
Industrial Control 72.5 84.5(1)
Space and Aviation Control 88.9 78.7
Other 2.3 1.7
---------- ----------
TOTAL OPERATING PROFIT 252.0 234.0(1)
Interest expense (29.0) (29.8)
Equity income 4.7 5.8
General corporate expense (18.2) (22.2)
---------- ----------
INCOME BEFORE INCOME TAXES $ 209.5 $ 187.8(1)
</TABLE>
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
SALES AND OPERATING PROFIT BY SEGMENT
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------------
JULY 4, July 5,
1999 1998
---------- ----------
<S> <C> <C>
SALES
Home and Building Control $ 1,661.0 $ 1,566.7
Industrial Control 1,229.4 1,217.7
Space and Aviation Control 1,200.4 1,137.6
Other 34.9 36.5
---------- ----------
TOTAL SALES 4,125.7 3,958.5
- ----------------------------------------------------------------------
OPERATING PROFIT
Home and Building Control 148.5 125.9
Industrial Control 132.8 144.9(1)
Space and Aviation Control 172.2 149.0
Other 4.8 5.0
---------- ----------
TOTAL OPERATING PROFIT 458.3 424.8(1)
Interest expense (57.9) (56.2)
Equity income 3.0 5.5
General corporate expense (36.4) (42.5)
---------- ----------
INCOME BEFORE INCOME TAXES $ 367.0 $ 331.6(1)
</TABLE>
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION (UNAUDITED)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
JULY 4, December 31,
1999 1998
---------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 147.9 $ 306.0
Short-term investments 7.6 7.2
Receivables (less allowance for doubtful accounts:
1999, $40.3; 1998, $41.1) 1,809.8 1,906.7
Inventories (less progress billing on uncomplete contracts:
1999, $31.5; 1998, $43.5) 1,162.2 1,116.0
Deferred income taxes 283.1 285.9
---------- ------------
TOTAL CURRENT ASSETS 3,410.6 3,621.8
INVESTMENTS AND ADVANCES 279.3 269.9
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 3,383.9 3,355.8
Less accumulated depreciation 2,084.5 2,097.4
---------- ------------
1,299.4 1,258.4
OTHER ASSETS
Long-term receivables (less allowance for doubtful accounts:
1999, $0.5; 1998, $1.8) 27.0 34.0
Goodwill 981.1 952.2
Intangible assets 329.0 343.0
Deferred income taxes 19.2 18.9
Other 725.8 672.2
---------- ------------
TOTAL ASSETS $ 7,071.4 $ 7,170.4
---------- ------------
---------- ------------
LIABILITIES AND SHAREOWNERS' EQUITY
CURRENT LIABILITIES
Short-term debt $ 209.0 $ 178.9
Accounts payable 622.0 676.6
Customer advances 361.3 340.2
Accrued income taxes 236.6 334.4
Deferred income taxes 13.9 18.0
Other accrued liabilities 799.6 904.6
---------- ------------
TOTAL CURRENT LIABILITIES 2,242.4 2,452.7
LONG-TERM DEBT 1,223.8 1,299.3
DEFERRED INCOME TAXES 51.4 66.2
OTHER LIABILITIES 597.2 566.7
---------- ------------
<PAGE>
TOTAL LIABILITIES 4,114.8 4,384.9
---------- ------------
SHAREOWNERS' EQUITY
Common stock - $1.50 par value
Authorized - 1999 375,000,000 shares
- 1998 250,000,000 shares 281.1
Issued - 1999 - 187,407,152 shares 281.3
- 1998 - 187,536,597 shares
Additional paid-in-capital 775.8 697.6
Retained earnings 4,008.0 3,835.9
Treasury stock - 1999 - 59,933,883 shares (2,023.6)
- 1998 - 61,206,715 shares (2,005.5)
Other comprehensive income (84.7) (23.8)
---------- ------------
TOTAL SHAREOWNERS' EQUITY 2,956.6 2,785.5
---------- ------------
TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $ 7,071.4 $ 7,170.4
---------- ------------
---------- ------------
</TABLE>
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS (UNAUDITED)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-------------------------
JULY 4, July 5,
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 245.8 $ 222.1
Adjustments to reconcile net income to net cash flows from
operating activities:
Depreciation 126.0 122.8
Amortization of intangibles 43.5 37.7
Deferred income taxes (4.0) (0.1)
Equity income, net of dividends received (2.0) (4.7)
Gain on sale of assets (1.7) (6.5)
Contributions to employee stock plans 32.9 32.6
Decrease in receivables 95.2 114.8
Increase in inventories (45.8) (134.6)
Decrease in accounts payable (46.8) (72.6)
Increase in customer advances 25.2 51.2
Decrease in accrued income taxes and interest (98.7) (50.7)
Decrease in accrued liabilities (106.6) (91.9)
Other noncurrent items - net (8.4) (70.4)
-------- --------
NET CASH FLOWS FROM OPERATING ACTIVITIES 254.6 149.7
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of assets 11.6 56.3
Proceeds from sale of discontinued business - 29.0
Capital expenditures (182.4) (162.9)
Investment in acquisitions, net of cash acquired (107.8) (131.8)
Decrease (increase) in short-term investments 4.6 (0.8)
Other - net (12.5) (5.3)
-------- --------
NET CASH FLOWS FROM INVESTING ACTIVITIES (286.5) (215.5)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term debt (38.2) (36.3)
Proceeds from issuance of long-term debt 4.4 252.0
Repayment of long-term debt (43.6) (67.2)
Purchase of treasury stock (51.8) (118.6)
Proceeds from exercise of stock options 80.0 38.0
<PAGE>
Dividends paid (73.8) (70.9)
-------- --------
NET CASH FLOWS FROM FINANCING ACTIVITIES (123.0) (3.0)
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (3.2) (2.4)
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (158.1) (71.2)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 306.0 134.3
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 147.9 $ 63.1
-------- --------
-------- --------
</TABLE>
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
UNAUDITED FINANCIAL COMPARISONS
BY LINE OF BUSINESS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Q2 1999 VS. Q2 1998 YTD 1999 VS. YTD 1998
- ------------------------------------------------------------------------------------------------------------
ORDERS SALES EARNINGS ORDERS SALES EARNINGS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HOME AND BUILDING CONTROL 14% 9% 28% 11% 6% 18%
- ------------------------------------------------------------------------------------------------------------
Products 15-20% 10-15% over 20% 10-15% 5-10% 15-20%
Solutions & Services 10-15% 5-10% over 20% 10-15% 0-5% 15-20%
- ------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONTROL 6% 1% (8%)* 5% 1% (5%)*
- ------------------------------------------------------------------------------------------------------------
IAC 5-10% (0-5%) (15-20%)* 0-5% (0-5%) (10-15%)*
Sensing & Control 5-10% 10-15% over 20% 5-10% 5-10% 15-20%
- ------------------------------------------------------------------------------------------------------------
SPACE AND AVIATION CONTROL (9%) 5% 13% (10%) 6% 16%
- ------------------------------------------------------------------------------------------------------------
Commercial Avionics 5-10% 10-15% over 20% (0-5%) 10-15% over 20%
Military Avionics (over 20%) (0-5%) over 20% (10-15%) 0-5% over 20%
Space Systems (over 20%) (10-15%) (0-5%) (over 20%) (10-15%) Flat
- ------------------------------------------------------------------------------------------------------------
TOTAL HONEYWELL 5% 5% 11%* 3% 4% 9%*
- ------------------------------------------------------------------------------------------------------------
</TABLE>
* - Excludes a one-time gain of $5.6 million, or $0.03 per diluted share,
related to the sale of assets in Q2 `98
<PAGE>
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
99(i) Honeywell Inc. News Release dated July 21, 1999.
SIGNATURES
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 hereunto duly authorized.
HONEYWELL INC.
By: /s/ Edward D. Grayson
-----------------------
Edward D. Grayson
Vice President and
General Counsel
Date: July 22, 1999
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No.
- -----------
<S> <C>
99(i) Honeywell Inc. News Release dated July 21, 1999.
</TABLE>
<PAGE>
Exhibit 99(i)
For Immediate Release CONTACT: Pearse O'Loughlin
612-951-0070
PEARSE.O'[email protected]
HONEYWELL REPORTS SECOND QUARTER
COMPARABLE EPS GROWTH OF 15 PERCENT
WITH STRONG CASH FLOW
MINNEAPOLIS, JULY 21, 1999 -- Honeywell Inc. (NYSE: HON) today reported
earnings per share of $1.09 in the second quarter of 1999, an increase of 15
percent over comparable earnings per share of $0.95 in the second quarter of
1998. Reported earnings per share of $0.98 in the second quarter of 1998
included a one-time gain of $0.03 on the sale of assets.*
"Honeywell has delivered strong cash flow and its 18th consecutive quarter
of double-digit earnings per share growth," said Michael R. Bonsignore,
Honeywell's chairman and chief executive officer. "Our approach for transforming
the Home and Building Control business into a strong value creator is bearing
fruit, as demonstrated by the broad top and bottom-line growth in the second
quarter. The company is strategically positioned for success that should be
further enhanced by the financial strength resulting from our combination with
AlliedSignal."
Honeywell generated free cash flow of $214 million in the quarter, an 89
percent increase over the second quarter of 1998. Orders rose 5 percent driven
by Home and Building Control, Industrial Control and Commercial Avionics. Sales
rose 5 percent in the quarter to $2.14 billion. On a comparable basis, operating
margins increased 60 basis points to 11.8 percent, and controlled working
capital rates improved 40 basis points in the quarter.
Second quarter results were led by an across-the-board strong performance
from Home and Building Control with sales up 9 percent, while earnings grew 28
percent. Increased market penetration, new product success, and acquisitions
spurred growth in the Products business, while the services and the security
sectors continued to show solid growth. Space and Aviation Control earnings grew
on higher margin rates and 5 percent revenue growth. Industrial Control revenues
<PAGE>
grew modestly at 1 percent, while earnings decreased due to sluggish end market
conditions in refining and pulp and paper and an unfavorable mix of project
revenues.
SECOND QUARTER STRATEGIC HIGHLIGHTS
During the quarter, Honeywell and AlliedSignal announced their intention to
merge, creating a leading global supplier of products and services. Shareholders
from both companies are scheduled to vote on the merger at separate meetings on
September 1. The merger is also subject to regulatory approvals.
Home and Building Control has improved its financial performance by exiting
low margin market segments, reducing operating cost, introducing new products
and differentiated solutions, and making strategic acquisitions such as the
second quarter agreement to purchase C&K Systems. C&K is a global supplier of
residential and commercial security products with revenues of $100 million. The
acquisition is expected to close in September. Control Products continued to
expand its residential controls market share through the PerfectClimate building
contractor program, while Consumer Products revenues grew strongly in the
quarter. In early April, Solutions and Services signed a two-year agreement for
continuous, remote performance and condition monitoring of AlliedSignal's
Turbogenerator beta production units. This agreement gives Honeywell first-mover
advantage for remote condition monitoring in the growing distributed power
generation market.
Industrial Control's PlantScape-TM-, the industry's only true hybrid
control system, continued to expand its market leadership during the quarter
with a $36 million contract for the Honeywell/Giasa consortium at the Petroleos
Mexicanos Cantarell oil and gas extraction facility in Mexico, and with an order
to automate Alliance Pipeline's $3.3 billion pipeline project in Calgary,
Canada. Since its introduction in 1997, PlantScape systems have enjoyed brisk
sales with more than 2,000 systems sold at more than 1,000 customer sites around
the world.
During the quarter, Honeywell's technical leadership and commitment to
e-business was recognized by PCWEEK magazine, which ranked the company among the
top five innovators in employing internet technology. This was further
demonstrated as Honeywell Hi-Spec Solutions launched MyPlant.com-Registered
Trademark- (www.myplant.com), its new web-based community of interest for
process industry customers and suppliers. MyPlant.com provides customers easy
access to a
<PAGE>
broad range of Honeywell and third-party process industry solutions,
including Hi-Spec's web-based software delivery site SolutionsNow!.
The recent Paris Air Show included several positive announcements for
Honeywell's Space and Aviation Control business. Embraer announced more than $7
billion in firm and option orders for its ERJ-170 and 190 regional jets, which
are both fitted with Honeywell's Primus Epic-TM- integrated avionics. Raytheon
also announced firm and option orders for approximately 100 Honeywell-equipped
Hawker Horizon business jets. Honeywell was also awarded an engineering,
manufacturing, and development contract to retrofit commercial off-the-shelf
display technology into the U.S. Air Force C-17 Globemaster III aircraft.
The quarter saw the successful first flight of the Federal Express MD-10
freighter airplane, utilizing the advanced Honeywell flight deck complete with
CAT IIIb automatic landing capability. The Federal Express flight test program
is the largest commercial flight deck upgrade program ever undertaken. Federal
Express will upgrade 79 aircraft with the new flight deck and has options for 40
more aircraft. This MD-10 retrofit program will generate revenues likely to
exceed $100 million.
*The one time gain in the second quarter of 1998 was related to the sale of the
Honeywell-Measurex headquarters building in Cupertino, CA, for a pretax gain of
$5.6 million, or $0.03 per share.
This release may contain forward-looking statements about future business
operations, financial performance, and market conditions. Such statements are
subject to certain risks, uncertainties and other factors -- including changing
economic conditions, international trade and monetary factors -- which can
affect the company's businesses and cause actual results to differ materially
from those contained in any forward-looking statements. These factors are
described in the company's annual and quarterly reports on Forms 10-K and 10-Q.
Copies of such reports may be obtained from the company or reviewed on the SEC's
EDGAR system at www.sec.gov.
Honeywell is the world's leading provider of control technologies for
buildings, homes, industry, space and aviation. The company employs 57,000
people in 95 countries, and had 1998 sales of $8.4 billion.
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
INCOME STATEMENT (UNAUDITED)
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SECOND QUARTER
-----------------------------------
JULY 4, July 5,
1999 1998
------------ ------------
<S> <C> <C> <C>
SALES $ 2,139.6 $ 2,035.2 5.1%
COSTS AND EXPENSES
Cost of sales 1,467.2 1,383.0
Research and development 112.9 118.4
Selling, general and administrative 327.3 325.8(1)
Interest - net 27.3 26.0
Equity income (4.6) (5.8)
------------ ------------
TOTAL COSTS AND EXPENSES 1,930.1 1,847.4
------------ ------------
INCOME BEFORE INCOME TAXES 209.5 187.8
PROVISION FOR INCOME TAXES 69.2 62.0
------------ ------------
NET INCOME $ 140.3 $ 125.8 11.5%
BASIC EARNINGS PER COMMON SHARE $ 1.11 $ 1.00 11.0%
AVERAGE COMMON SHARES OUTSTANDING 126,715,587 126,112,084
DILUTED EARNINGS PER COMMON SHARE $ 1.09 $ 0.98 11.2%
AVERAGE COMMON AND DILUTIVE SHARES OUTSTANDING 128,986,872 128,093,164
</TABLE>
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
INCOME STATEMENT (UNAUDITED)
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------------------
JULY 4, July 5,
1999 1998
------------ ------------
<S> <C> <C> <C>
SALES $ 4,125.7 $ 3,958.5 4.2%
COSTS AND EXPENSES
Cost of sales 2,833.2 2,709.8
Research and development 229.8 231.8
Selling, general and administrative 645.4 640.6(1)
Interest - net 53.3 50.2
Equity income (3.0) (5.5)
------------ ------------
TOTAL COSTS AND EXPENSES 3,758.7 3,626.9
------------ ------------
INCOME BEFORE INCOME TAXES 367.0 331.6
PROVISION FOR INCOME TAXES 121.2 109.5
------------ ------------
NET INCOME $ 245.8 $ 222.1 10.7%
BASIC EARNINGS PER COMMON SHARE $ 1.94 $ 1.76 10.2%
AVERAGE COMMON SHARES OUTSTANDING 126,480,406 126,152,209
DILUTED EARNINGS PER COMMON SHARE $ 1.92 $ 1.73 11.0%
AVERAGE COMMON AND DILUTIVE SHARES OUTSTANDING 128,342,264 128,065,830
</TABLE>
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
SALES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SECOND QUARTER
-----------------------------
JULY 4, July 5,
1999 1998
---------- ----------
<S> <C> <C>
SALES
Home and Building Control $ 855.3 $ 788.0
Industrial Control 645.5 637.1
Space and Aviation Control 619.4 590.2
Other 19.4 19.9
---------- ----------
TOTAL SALES 2,139.6 2,035.2
- --------------------------------------------------------------------------
OPERATING PROFIT
Home and Building Control 88.3 69.1
Industrial Control 72.5 84.5(1)
Space and Aviation Control 88.9 78.7
Other 2.3 1.7
---------- ----------
TOTAL OPERATING PROFIT 252.0 234.0(1)
Interest expense (29.0) (29.8)
Equity income 4.6 5.8
General corporate expense (18.1) (22.2)
---------- ----------
INCOME BEFORE INCOME TAXES $ 209.5 $ 187.8(1)
</TABLE>
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
SALES AND OPERATING PROFIT BY SEGMENT (UNAUDITED)
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------------
JULY 4, July 5,
1999 1998
---------- ----------
<S> <C> <C>
SALES
Home and Building Control $ 1,661.0 $ 1,566.7
Industrial Control 1,229.4 1,217.7
Space and Aviation Control 1,200.4 1,137.6
Other 34.9 36.5
---------- ----------
TOTAL SALES 4,125.7 3,958.5
- ---------------------------------------------------------------------------
OPERATING PROFIT
Home and Building Control 148.5 125.9
Industrial Control 132.8 144.9(1)
Space and Aviation Control 172.2 149.0
Other 4.8 5.0
---------- ----------
TOTAL OPERATING PROFIT 458.3 424.8(1)
Interest expense (57.9) (56.2)
Equity income 2.9 5.5
General corporate expense (36.3) (42.5)
---------- ----------
INCOME BEFORE INCOME TAXES $ 367.0 $ 331.6(1)
</TABLE>
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION (UNAUDITED)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
JULY 4, December 31,
1999 1998
---------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 147.9 $ 306.0
Short-term investments 7.6 7.2
Receivables (less allowance for doubtful accounts:
1999, $40.3; 1998, $41.1) 1,809.8 1,906.7
Inventories (less progress billing on uncomplete contracts:
1999, $31.5; 1998, $43.5) 1,162.2 1,116.0
Deferred income taxes 283.1 285.9
---------- ----------
TOTAL CURRENT ASSETS 3,410.6 3,621.8
INVESTMENTS AND ADVANCES 279.3 269.9
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 3,383.9 3,355.8
Less accumulated depreciation 2,084.5 2,097.4
---------- ----------
1,299.4 1,258.4
OTHER ASSETS
Long-term receivables (less allowance for doubtful accounts:
1999, $0.5; 1998, $1.8) 27.0 34.0
Goodwill 981.1 952.2
Intangible assets 329.0 343.0
Deferred income taxes 19.2 18.9
Other 725.8 672.2
---------- ----------
TOTAL ASSETS $ 7,071.4 $ 7,170.4
---------- ----------
---------- ----------
LIABILITIES AND SHAREOWNERS' EQUITY
CURRENT LIABILITIES
Short-term debt $ 209.0 $ 178.9
Accounts payable 622.0 676.6
Customer advances 361.3 340.2
Accrued income taxes 236.6 334.4
Deferred income taxes 13.9 18.0
Other accrued liabilities 799.6 904.6
---------- ----------
TOTAL CURRENT LIABILITIES 2,242.4 2,452.7
LONG-TERM DEBT 1,223.8 1,299.3
DEFERRED INCOME TAXES 51.4 66.2
OTHER LIABILITIES 597.2 566.7
---------- ----------
TOTAL LIABILITIES 4,114.8 4,384.9
---------- ----------
SHAREOWNERS' EQUITY
Common stock - $1.50 par value
Authorized - 1999 375,000,000 shares
- 1998 250,000,000 shares 281.1
Issued - 1999 - 187,407,152 shares 281.3
- 1998 - 187,536,597 shares
Additional paid-in-capital 775.8 697.6
Retained earnings 4,008.0 3,835.9
Treasury stock - 1999 - 59,933,883 shares (2,023.6)
<PAGE>
- 1998 - 61,206,715 shares (2,005.5)
Other comprehensive income (84.7) (23.8)
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TOTAL SHAREOWNERS' EQUITY 2,956.6 2,785.5
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TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $ 7,071.4 $ 7,170.4
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</TABLE>
<PAGE>
HONEYWELL INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS (UNAUDITED)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
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JULY 4, July 5,
1999 1998
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 245.8 $ 222.1
Adjustments to reconcile net income to net cash flows from
operating activities:
Depreciation 126.0 122.8
Amortization of intangibles 43.5 37.7
Deferred income taxes (4.0) (0.1)
Equity income, net of dividends received (2.0) (4.7)
Gain on sale of assets (1.7) (6.5)
Contributions to employee stock plans 32.9 32.6
Decrease in receivables 95.2 114.8
Increase in inventories (45.8) (134.6)
Decrease in accounts payable (46.8) (72.6)
Increase in customer advances 25.2 51.2
Decrease in accrued income taxes and interest (98.7) (50.7)
Decrease in accrued liabilities (106.6) (91.9)
Other noncurrent items - net (8.4) (70.4)
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NET CASH FLOWS FROM OPERATING ACTIVITIES 254.6 149.7
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CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of assets 11.6 56.3
Proceeds from sale of discontinued business - 29.0
Capital expenditures (182.4) (162.9)
Investment in acquisitions, net of cash acquired (107.8) (131.8)
Decrease (increase) in short-term investments 4.6 (0.8)
Other - net (12.5) (5.3)
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NET CASH FLOWS FROM INVESTING ACTIVITIES (286.5) (215.5)
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CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term debt (38.2) (36.3)
Proceeds from issuance of long-term debt 4.4 252.0
Repayment of long-term debt (43.6) (67.2)
Purchase of treasury stock (51.8) (118.6)
Proceeds from exercise of stock options 80.0 38.0
Dividends paid (73.8) (70.9)
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NET CASH FLOWS FROM FINANCING ACTIVITIES (123.0) (3.0)
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EFFECT OF EXCHANGE RATE CHANGES ON CASH (3.2) (2.4)
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DECREASE IN CASH AND CASH EQUIVALENTS (158.1) (71.2)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 306.0 134.3
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 147.9 $ 63.1
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</TABLE>
