01—Abstract
Summary
Summary of the 10-K filed February 15, 2013. Cited figures are marked; the original filing is the authoritative source.
Honeywell International Inc. reported robust performance in 2012, marked by a 3% increase in revenue to $37.7 billiona, despite a challenging global economic environment.
The company demonstrated strong operational excellence, with segment profit growing by 10%b, significantly outpacing revenue growth. This was attributed to the effective implementation of "Honeywell Enablers" such as the Honeywell Operating System (HOS) and Velocity Product Development (VPD). Key strategic initiatives for 2013 include driving profitable growth through innovation and R&D, expanding margins via process improvements, proactive cost management, and increasing market penetration in high-growth regions.
Honeywell's financial health remains solid, evidenced by a 24% increase in operating cash flow to $3.5 billionc, enabling investments in capital expenditures, acquisitions, dividends, and share repurchases. The company's diversified business segments—Aerospace, Automation and Control Solutions, Performance Materials and Technologies, and Transportation Systems—each contributed to the overall growth, with particular strength noted in commercial aerospace aftermarket and process solutions within Automation and Control Solutions.
02—Key points
Key Highlights
- Total revenues for 2012 increased by 3% to $37.7 billion, driven by organic growth, acquisitions, and favorable pricing, despite a negative impact from foreign exchange.
- Segment profit grew by 10% to $5.9 billion, outpacing revenue growth and demonstrating strong operational execution and margin expansion.
- Operating cash flow increased by 24% to $3.5 billion, supporting investments in growth initiatives, acquisitions, dividends, and share repurchases.
- The Aerospace segment saw a 5% increase in sales, driven by commercial OE and aftermarket growth, while Defense and Space sales saw a slight decrease.
- Automation and Control Solutions (ACS) achieved a 2% sales increase, with notable growth in Process Solutions and Building Solutions & Distribution segments.
- Performance Materials and Technologies (PMT) reported a 9% sales increase, with UOP performing strongly, though Advanced Materials faced challenging end-market conditions.
- Transportation Systems experienced an 8% decline in sales, primarily due to unfavorable foreign exchange impacts and decreased light vehicle production in Europe.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Honeywell International kept $0.08.
- Revenue$37.66B100.0%
- Cost of revenue−$28.29B75.1%
- Gross profit$9.37B24.9%
- Operating costs−$6.45B17.1%
- Operating income$2.93B7.8%
- Interest, other & tax$-00.0%
- Net income$2.93B7.8%
04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 15, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $37.66B$36.53B | +3.1% |
| Cost of Revenue | $28.29B$28.56B | −0.9% |
| Gross Profit | $9.37B$7.97B | +17.6% |
| R&D Expenses | $1.85B$1.80B | +2.7% |
| SG&A Expenses | $5.22B$5.40B | −3.4% |
| Operating Income | $2.93B$1.86B | +57.5% |
| Net Income | $2.93B$2.07B | +41.6% |
| EPS (Basic) | $3.74$2.65 | +41.1% |
| EPS (Diluted) | $3.69$2.61 | +41.4% |
| Shares Outstanding (Basic) | 782.40M780.80M | +0.2% |
| Shares Outstanding (Diluted) | 791.90M791.60M | 0.0% |
05—Questions
Frequently Asked Questions
What were Honeywell's key financial results for 2012?
In 2012, Honeywell reported total revenues of $37.7 billion, a 3% increase from 2011. Segment profit rose by 10% to $5.9 billion, and operating cash flow increased by 24% to $3.5 billion. Net income attributable to Honeywell was $2.9 billion, or $3.69 per diluted share.
How did Honeywell's different business segments perform in 2012?
The Aerospace segment grew sales by 5%, driven by commercial OE and aftermarket. Automation and Control Solutions sales increased by 2%, with strong performance in Process Solutions and Building Solutions & Distribution. Performance Materials and Technologies saw a 9% sales increase, led by UOP, while Transportation Systems experienced an 8% sales decrease due to market conditions and currency impacts.
What are Honeywell's strategic priorities for 2013?
Honeywell's strategic priorities for 2013 include driving profitable growth through R&D and technological excellence, expanding margins through cost structure improvements and process enhancements, proactively managing raw material costs, optimizing cash flow, increasing penetration in high-growth regions, and aligning investments for long-term growth while monitoring short-term demand volatility.
How is Honeywell managing its capital and liquidity?
Honeywell maintained strong liquidity in 2012, with operating cash flow of $3.5 billion. The company invested $438 million in acquisitions, returned $1.2 billion in dividends to shareholders, and repurchased $317 million of its common stock. Honeywell also has a $3 billion share repurchase program with $1.6 billion remaining available at year-end 2012 and maintains a $3 billion credit agreement.
06—Continue