<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 -- DECEMBER 1, 1999
(DATE OF EARLIEST EVENT REPORTED)
-------------------
HONEYWELL INTERNATIONAL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-------------------
<TABLE>
<S> <C> <C>
DELAWARE 1-8974 22-2640650
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (973) 455-2000
________________________________________________________________________________
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Included in the Current Report on Form 8-K of Honeywell International Inc.
filed on December 3, 1999.
(b) Pro Forma Financial Information.
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
On December 1, 1999 after the close of trading on the New York Stock
Exchange, AlliedSignal Inc. and Honeywell Inc. consummated a merger pursuant to
an Agreement and Plan of Merger dated as of June 4, 1999. Under the merger
agreement, a wholly owned subsidiary of AlliedSignal merged with and into
Honeywell. As a result of the merger, Honeywell has become a wholly owned
subsidiary of AlliedSignal. AlliedSignal changed its name to Honeywell
International Inc. at the effective time of the merger pursuant to the merger
agreement.
Under the merger agreement, each issued and outstanding share of Honeywell
common stock was converted into the right to receive 1.875 shares of Honeywell
International common stock, with fractional shares paid in cash. Former
Honeywell shareowners were entitled to receive approximately 241 million shares
of Honeywell International common stock in exchange for their shares of
Honeywell common stock they held at the effective time of the merger. In
addition, outstanding former Honeywell employee stock options were converted at
the same exchange factor into options to purchase approximately 10 million
shares of Honeywell International common stock.
The following unaudited pro forma combined condensed financial statements
combine the historical consolidated balance sheets and statements of income of
AlliedSignal and Honeywell giving effect to the merger using the pooling of
interests method of accounting for a business combination. Under this method of
accounting, AlliedSignal and Honeywell are treated as if they had always been
combined for accounting and financial reporting purposes.
We derived this information from the audited consolidated financial
statements of AlliedSignal for the years ended December 31, 1998, 1997 and 1996
and the unaudited consolidated financial statements of AlliedSignal for the nine
months ended September 30, 1999 and 1998, and from the audited consolidated
financial statements of Honeywell for the years ended December 31, 1998, 1997
and 1996 and the unaudited consolidated financial statements of Honeywell for
the nine months ended October 3, 1999 and October 4, 1998. The information is
only a summary and you should read it in conjunction with our historical
financial statements and related notes contained in the annual reports,
quarterly reports and other information that we have filed with the SEC.
The unaudited pro forma combined condensed statements of income for the
years ended December 31, 1998, 1997 and 1996 and the first nine months of 1999
and 1998 assume the merger was effected on January 1, 1996. The unaudited pro
forma combined condensed balance sheet gives effect to the merger as if it had
occurred at the end of the combined company's third quarter of 1999. The
accounting policies of Honeywell and AlliedSignal are substantially comparable.
Consequently, we did not make adjustments to the unaudited pro forma combined
condensed financial statements to conform the accounting policies of the two
companies.
The unaudited pro forma combined condensed financial information is for
illustrative purposes only. The companies may have performed differently had
they always been combined. You should not rely on the pro forma combined
condensed financial information as being indicative of the historical results
that would have been achieved had the companies always been combined or the
future results that Honeywell International will experience after the merger.
2
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
HISTORICAL
--------------------------------------
ALLIEDSIGNAL HONEYWELL PRO FORMA PRO FORMA
SEPTEMBER 30, 1999 OCTOBER 3, 1999 ADJUSTMENTS(1) COMBINED
------------------ --------------- -------------- --------
(IN MILLIONS)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents..... $ 981 $ 144 $ $ 1,125
Accounts and notes
receivable.................. 1,984 1,860 3,844
Inventories................... 2,326 1,155 3,481
Other current assets.......... 576 292 868
------- ------ ------- -------
Total current assets...... 5,867 3,451 9,318
Investments and long-term
receivables..................... 436 323 759
Property, plant and equipment..... 9,317 3,488 12,805
Accumulated depreciation and
amortization.................... (4,965) (2,155) (7,120)
Goodwill -- net................... 3,094 1,028 4,122
Other assets...................... 1,204 1,124 2,328
------- ------ ------- -------
Total assets.................. $14,953 $7,259 $-- $22,212
------- ------ ------- -------
------- ------ ------- -------
LIABILITIES
Current liabilities:
Accounts payable.............. $ 1,273 $ 640 $ $ 1,913
Short-term borrowings......... 58 26 84
Commercial paper.............. 1,513 -- 1,513
Current maturities of
long-term debt.............. 195 109 304
Accrued liabilities........... 1,745 1,458 135 (5) 3,338
------- ------ ------- -------
Total current
liabilities............. 4,784 2,233 135 7,152
Long-term debt.................... 1,287 1,193 2,480
Deferred income taxes............. 802 56 858
Postretirement benefit obligations
other than pensions............. 1,664 319 1,983
Other liabilities................. 993 294 1,287
SHAREOWNERS' EQUITY
Capital -- common stock issued.... 716 281 (41)(6) 956
-- additional paid-in
capital.................... 3,323 816 (1,986)(6) 2,153
Common stock held in treasury, at
cost............................ (4,265) (2,027) 2,027 (6) (4,265)
Accumulated other nonowner
changes......................... (270) (43) (313)
Retained earnings................. 5,919 4,137 (135)(5) 9,921
------- ------ ------- -------
Total shareowners'
equity.................. 5,423 3,164 (135) 8,452
------- ------ ------- -------
Total liabilities and
shareowners' equity......... $14,953 $7,259 $-- $22,212
------- ------ ------- -------
------- ------ ------- -------
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
3
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE FIRST NINE MONTHS OF 1999
<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------
ALLIEDSIGNAL HONEYWELL
NINE MONTHS ENDED NINE MONTHS ENDED PRO
SEPTEMBER 30, OCTOBER 3, PRO FORMA FORMA
1999 1999 ADJUSTMENTS(1) COMBINED
---- ---- -------------- --------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net sales....................... $11,252 $6,324 $ $17,576
------- ------ -------
Costs, expenses and other:
Cost of goods sold.......... 8,730 4,661 13,391
Selling, general and
administrative expenses... 1,171 972 2,143
Gain on sale of
non-strategic
businesses................ (106) -- (106)
Equity in income of
affiliated companies...... (12) (2) (14)
Other (income) expense...... (287) (8) (295)
Interest and other financial
charges................... 107 85 192
------- ------ -------- -------
9,603 5,708 15,311
------- ------ -------- -------
Income before taxes on income... 1,649 616 2,265
Taxes on income................. 528 203 731
------- ------ -------- -------
Net income...................... $ 1,121 $ 413 $-- $ 1,534
------- ------ -------- -------
------- ------ -------- -------
Earnings per share of common
stock -- basic................ $ 2.03 $ 3.25 $ 1.94(3)
Earnings per share of common
stock -- assuming dilution.... 1.98 3.20 1.90(3)
Weighted average number of
shares outstanding -- basic... 553 127 791(3)
Weighted average number of
shares outstanding -- assuming
dilution...................... 566 129 808(3)
Cash dividends per share of
common stock.................. 0.51 0.87 0.51(3)
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
4
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE FIRST NINE MONTHS OF 1998
<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------
ALLIEDSIGNAL HONEYWELL
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, OCTOBER 4, PRO FORMA PRO FORMA
1998 1998 ADJUSTMENTS(1) COMBINED
---- ---- -------------- --------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net sales....................... $11,256 $6,078 $ $17,334
------- ------ -------
Cost, expenses and other:
Cost of goods sold.......... 8,596 4,474 13,070
Selling, general and
administrative expenses... 1,200 985 2,185
Equity in income of
affiliated companies...... (82) (5) (87)
Other (income) expense...... 9 (8) 1
Interest and other financial
charges................... 104 83 187
------- ------ ------ -------
9,827 5,529 15,356
------- ------ ------ -------
Income before taxes on income... 1,429 549 1,978
Taxes on income................. 450 181 631
------- ------ ------ -------
Net income...................... $ 979 $ 368 $-- $ 1,347
------- ------ ------ -------
------- ------ ------ -------
Earnings per share of common
stock -- basic................ $ 1.74 $ 2.91 $ 1.69(3)
Earnings per share of common
stock -- assuming dilution.... 1.70 2.87 1.65(3)
Weighted average number of
shares outstanding -- basic... 562 126 798(3)
Weighted average number of
shares outstanding -- assuming
dilution...................... 576 128 816(3)
Cash dividends per share of
common stock.................. 0.45 0.84 0.45(3)
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
5
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
HISTORICAL PRO
------------------------ PRO FORMA FORMA
ALLIEDSIGNAL HONEYWELL ADJUSTMENTS(1) COMBINED
------------ --------- -------------- --------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net sales..................................... $15,128 $8,427 $ $23,555
------- ------ -------
Costs, expenses and other:
Cost of goods sold........................ 11,476 6,213 17,689
Selling, general and administrative
expenses................................ 1,690 1,318 3,008
Equity in income of affiliated
companies............................... (150) (12) (162)
Other (income) expense.................... 7 (34) (27)
Interest and other financial charges...... 162 113 275
------- ------ ------ -------
13,185 7,598 20,783
------- ------ ------ -------
Income before taxes on income................. 1,943 829 2,772
Taxes on income............................... 612 257 869
------- ------ ------ -------
Net income.................................... $ 1,331 $ 572 $-- $ 1,903
------- ------ ------ -------
------- ------ ------ -------
Earnings per share of common stock -- basic... $ 2.37 $ 4.54 $ 2.38(3)
Earnings per share of common stock -- assuming
dilution.................................... 2.32 4.48 2.34(3)
Weighted average number of shares
outstanding -- basic........................ 562 126 798(3)
Weighted average number of shares
outstanding -- assuming dilution............ 574 128 814(3)
Cash dividends per share of common stock...... 0.60 1.13 0.60(3)
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
6
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
HISTORICAL PRO
------------------------ PRO FORMA FORMA
ALLIEDSIGNAL HONEYWELL ADJUSTMENTS(1) COMBINED
------------ --------- -------------- --------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net sales..................................... $14,472 $8,027 $ $22,499
------- ------ -------
Costs, expenses and other:
Cost of goods sold........................ 11,481 5,963 17,444
Selling, general and administrative
expenses................................ 1,581 1,359 2,940
Gain on sale of non-strategic
businesses.............................. (226) (77) (303)
Equity in income of affiliated
companies............................... (178) (13) (191)
Other (income) expense.................... (77) (10) (87)
Interest and other financial charges...... 175 102 277
------- ------ ------ -------
12,756 7,324 20,080
------- ------ ------ -------
Income before taxes on income................. 1,716 703 2,419
Taxes on income............................... 546 232 778
------- ------ ------ -------
Net income.................................... $ 1,170 $ 471 $-- $ 1,641
------- ------ ------ -------
------- ------ ------ -------
Earnings per share of common stock -- basic... $ 2.07 $ 3.71 $ 2.04(3)
Earnings per share of common stock -- assuming
dilution.................................... 2.02 3.65 2.00(3)
Weighted average number of shares
outstanding -- basic........................ 565 127 803(3)
Weighted average number of shares
outstanding -- assuming dilution............ 580 129 822(3)
Cash dividends per share of common stock...... 0.52 1.09 0.52(3)
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
7
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
HISTORICAL PRO
------------------------ PRO FORMA FORMA
ALLIEDSIGNAL HONEYWELL ADJUSTMENTS(1) COMBINED
------------ --------- -------------- --------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net sales..................................... $13,971 $7,312 $ $21,283
------- ------ -------
Costs, expenses and other:
Cost of goods sold........................ 11,606 5,329 16,935
Selling, general and administrative
expenses................................ 1,511 1,313 2,824
Gain on sale of non-strategic
businesses.............................. (655) -- (655)
Equity in income of affiliated
companies............................... (143) (13) (156)
Other (income) expense.................... (87) (8) (95)
Interest and other financial charges...... 186 81 267
------- ------ ------ -------
12,418 6,702 19,120
------- ------ ------ -------
Income before taxes on income................. 1,553 610 2,163
Taxes on income............................... 533 207 740
------- ------ ------ -------
Net income.................................... $ 1,020 $ 403 $-- $ 1,423
------- ------ ------ -------
------- ------ ------ -------
Earnings per share of common stock -- basic... $ 1.80 $ 3.18 $ 1.77(3)
Earnings per share of common stock -- assuming
dilution.................................... 1.76 3.11 1.73(3)
Weighted average number of shares
outstanding -- basic........................ 566 127 804(3)
Weighted average number of shares
outstanding -- assuming dilution............ 580 130 824(3)
Cash dividends per share of common stock...... 0.45 1.06 0.45(3)
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
8
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The unaudited pro forma combined condensed statements of income are based on
the audited consolidated statements of income of AlliedSignal for the years
ended December 31, 1998, 1997 and 1996 and the unaudited consolidated statements
of income of AlliedSignal for the nine months ended September 30, 1999 and 1998,
and the audited consolidated income statements of Honeywell for the years ended
December 31, 1998, 1997 and 1996, and the unaudited consolidated income
statements of Honeywell for the nine months ended October 3, 1999 and
October 4, 1998. No pro forma adjustments were necessary in preparing the
unaudited pro forma combined condensed statements of income. The unaudited pro
forma combined condensed balance sheet is based on the unaudited consolidated
balance sheet of AlliedSignal as of September 30, 1999 and on the unaudited
consolidated statement of financial position of Honeywell as of October 3, 1999.
AlliedSignal's and Honeywell's respective consolidated financial statements
were prepared in conformity with generally accepted accounting principles and
required management of AlliedSignal and Honeywell, as applicable, to make
estimates and assumptions that affected the reported amounts in the financial
statements and related disclosures in the accompanying notes. In our opinion,
the unaudited pro forma combined condensed financial statements include all
adjustments necessary to present fairly the results of the periods presented.
Actual results could differ materially from these estimates.
Note 2. Accounting Principles and Financial Statement Classifications
The accounting policies of AlliedSignal and Honeywell were substantially
comparable. Consequently, we did not make adjustments to the unaudited pro forma
combined condensed financial statements to conform the accounting policies of
the combining companies.
We have reclassified certain items in the historical financial statements of
AlliedSignal and Honeywell to conform to the presentation expected to be used by
Honeywell International.
Note 3. Pro Forma Earnings Per Share and Dividends Per Share
The 'pro forma combined earnings per share of common stock -- basic' is
based on net income and the weighted average number of outstanding common
shares. 'Earnings per share of common stock -- assuming dilution' is based on
net income and the weighted average number of outstanding common shares and the
dilutive effect of stock options and restricted stock units. The weighted
average number of outstanding common shares has been adjusted to reflect the
exchange ratio of 1.875 shares of Honeywell International common stock for each
share of Honeywell common stock.
The pro forma combined dividends per share reflect the dividends paid by
AlliedSignal.
Note 4. Intercompany Transactions
There were no significant transactions between AlliedSignal and Honeywell
during any of the periods presented.
Note 5. Merger-Related and Integration-Related Expenses
We estimate that merger-related transaction and period expenses, consisting
of investment banking and legal fees, former Honeywell deferred compensation
vested upon change of control and other direct merger-related expenses incurred
in the fourth quarter of 1999 are approximately $135 million. We have reflected
these fees and expenses as an increase to accrued liabilities and a reduction in
retained earnings in the unaudited pro forma combined condensed balance sheet
9
<PAGE>
as of the end of the third quarter of 1999. We have not reflected this charge in
the unaudited pro forma combined condensed statements of income or in the pro
forma combined per share data.
Upon completion of the merger between AlliedSignal and Honeywell on December
1, 1999, we recognized a pretax charge of $642 million for the cost of actions
designed to improve our combined competitiveness and productivity and improve
future profitability. The merger-related actions included the elimination of
redundant corporate offices and functional administrative overhead; elimination
of redundant and excess facilities and workforce in our combined aerospace
businesses; adoption of six sigma productivity initiatives at the former
Honeywell businesses; and the transition to a global shared services model. The
components of the charge included severance costs of $342 million, asset
impairments of $108 million, other exit costs of $57 million, as well as the
merger-related transaction and period expenses of $135 million described in the
preceeding paragraph. Except for the $135 million of merger-related transaction
and period expenses, the unaudited pro forma combined condensed financial
statements reflect neither the impact of these charges nor the benefits from the
expected cost savings or revenue enhancements.
Note 6. Other Pro Forma Adjustments
We have made pro forma adjustments to the unaudited pro forma combined
condensed balance sheet to reflect the cancellation of Honeywell common stock
accounted for as treasury stock and the assumed issuance of approximately 240
million shares of Honeywell International common stock in exchange for all of
the shares of Honeywell common stock outstanding as of the balance sheet date.
(c) Exhibits.
Included in the Current Report on Form 8-K of Honeywell International Inc.
filed on December 3, 1999.
10
<PAGE>
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 hereunto duly authorized.
HONEYWELL INTERNATIONAL INC.
By: /s/ RICHARD J. DIEMER, JR.
..................................
RICHARD J. DIEMER, JR.
VICE PRESIDENT AND CONTROLLER
Date: February 14, 2000
11
