10-KPeriod: FY2009

HONEYWELL INTERNATIONAL INC Annual Report, Year Ended Dec 31, 2009

Filed February 12, 2010For Securities:HONHONIV

Summary

Honeywell International Inc. reported significant net sales of $30.9 billion for the year ended December 31, 2009. The company experienced a 15% year-over-year decline in sales, largely attributed to challenging global economic conditions affecting demand across its key segments, particularly Aerospace and Transportation Systems. Despite the sales contraction, Honeywell demonstrated resilience through focused cost-saving initiatives and operational efficiencies, which helped to improve gross margins in certain segments. The company's strategic areas of focus for 2010 include driving profitable growth through innovation, global expansion in emerging markets, and proactive cost management. The financial performance in 2009 was impacted by lower sales volumes across most segments, with Transportation Systems and Specialty Materials seeing the most pronounced decreases. However, the company's diversified business model, spanning Aerospace, Automation and Control Solutions, Specialty Materials, and Transportation Systems, provided a degree of stability. Honeywell continued to invest in research and development, albeit at a slightly lower absolute level than the previous year, while maintaining its commitment to returning value to shareholders through dividends and strategic share repurchases under its existing program. The company's liquidity remained strong, supported by operating cash flows and available credit facilities.

Financial Highlights

50 data points
Beta

Revenue

$29.95B

23.0% Gross Margin

Net Income

$1.55B

5.2% Net Margin

EPS (Diluted)

$2.05

Total Assets

$35.99B

Cash & Equivalents

$2.80B

Free Cash Flow

$3.34B

Financial Statements
Beta
Revenue$29.95B
Cost of Revenue$23.26B
Gross Profit$6.90B
R&D Expenses$1.32B
SG&A Expenses$4.32B
Operating Income$1.49B
Net Income$1.55B
EPS (Basic)$2.06
EPS (Diluted)$2.05
Shares Outstanding (Diluted)755.70M

Key Highlights

  • 1Net sales for the year ended December 31, 2009, were $30.9 billion, a decrease of 15% compared to 2008, primarily due to adverse global economic conditions.
  • 2The company successfully improved its gross margin percentage to 25.0% in 2009 from 23.4% in 2008, driven by cost savings initiatives and lower material costs.
  • 3Aerospace segment sales decreased by 15% in 2009, heavily influenced by reduced demand in commercial aerospace (OE and aftermarket) and business/general aviation, while defense and space sales remained stable.
  • 4Automation and Control Solutions (ACS) segment sales declined 10% in 2009, impacted by lower volumes in products and solutions, though acquisitions provided some offset.
  • 5Transportation Systems segment faced a significant 27% drop in sales due to challenging automotive industry conditions, though Turbo Technologies showed a sequential improvement in the fourth quarter of 2009.
  • 6Honeywell maintained a strong cash flow from operations of $3.9 billion in 2009, with an increase attributed to favorable working capital management and lower cash taxes.
  • 7The company had $1.3 billion remaining under its share repurchase program as of December 31, 2009, indicating continued focus on shareholder returns.
  • 8Total debt was $7.6 billion at the end of 2009, a decrease from $8.4 billion in 2008, with the company actively managing its debt levels.

Frequently Asked Questions

Honeywell reported net sales of $30.9 billion for the year ended December 31, 2009, a 15% decrease from the prior year. This decline was primarily driven by challenging global economic conditions that impacted demand across its major business segments. Despite lower sales, the company managed its costs effectively, leading to an improved gross margin percentage.

The Transportation Systems segment experienced the most significant sales decline (27%), directly reflecting the severe challenges in the global automotive industry. The Specialty Materials segment also saw a substantial sales decrease of 21%, attributed to reduced demand in key end-markets like refining and petrochemicals. The Aerospace segment's sales fell by 15%, impacted by lower production rates and reduced aftermarket activity in the commercial aviation sector.

Honeywell implemented various cost-saving initiatives and operational efficiencies across its segments. These efforts, including reduced labor costs, indirect cost savings, and lower repositioning charges, helped to offset the negative impact of lower sales volumes and improve gross margins, particularly in the Specialty Materials and Automation & Control Solutions segments.

For 2010, Honeywell's focus areas include driving profitable growth through innovation, expanding its presence in emerging markets, and continuing proactive cost management. The company expects to benefit from new platform launches in its Transportation Systems segment and aims to align investments with long-term growth opportunities while managing short-term demand volatility. The company anticipates profitable growth by building innovative products, achieving technological excellence, and enhancing manufacturing capabilities globally.