Exhibit 99.2 ![](https://capedge.com/proxy/8-K/0000898822-16-000322/exhibitslide1.jpg)
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UTC Assessment of Honeywell Proposal February 26, 2016
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This presentation includes statements that constitute “forward-looking statements” under the securities laws. Forward-looking statements often contain words such as “believe,” “expect,” “plans,” “project,” “target,” “will,” “should,” “see,” “confident”, “ensure” and similar terms. Forward-looking statements may include, among other things, statements regarding transactions involving Honeywell; the plans, strategies, and objectives of UTC for future operations; future and estimated sales, earnings, cash flow, charges, expenditures and share repurchases; anticipated growth in sales; new products and their entry into service; anticipated benefits of organizational changes; and other measures of financial or operational performance. There can be no assurance that any future events will occur as anticipated, if at all, or that actual results will be as expected. All forward-looking statements involve risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. The forward-looking statements speak only as of the date of this presentation and we undertake no obligation to update or revise any forward-looking statements as of a later date.
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Executive summary 2 UTC opposes a combination with Honeywell which would encounter significant regulatory opposition and customer concerns, and create insurmountable conditions to complete a transactionSignificant regulatory challenges in U.S., EU, China, Brazil, Canada and elsewhereNegative impact on customers (Airbus, Boeing, DoD) – recent public statements regarding concerns over supplier consolidation Possibility of failed deal scenario with negative financial, operational, customer, and talent impacts, regardless of whether or not the deal is completedNotwithstanding significant regulatory and customer concerns regarding consolidation, the proposal fails to consider the following Proposed synergies do not consider the impact from significant divestitures and customer concessionsProposed value is wholly insufficient, not taking into account the significant earnings and cash flow prospects of UTC
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Customer & regulatory 3 Significant overlap across the portfolio Overlap with UTC UTC: $56.3B (2015) Aerospace Engines APUsAvionics Space productsECSElectric power Engine systems/accessoriesAircraft lightingSensors Landing systems (W&B) Actuation/flight controlsManagement & technical servicesAutomation & ControlSecurity & life safety Environment & combustion controlsBuilding solutions/services Scanning & mobility Process automation HON: $38.6B (2015) Significant overlap would either block deal outright or result in substantial divestitures that would erode value of combination
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Snapshot of aircraft content overlap Auxiliary Power Systems Cargo Systems Secondary Flight Controls Ice Detection & Removal Ice Protection Primary and Secondary Actuation Fuel Measurement SystemsFuel Tank SafetyWiring Harness Fuel Metering Units Landing GearWheels & BrakesBrake ControlProximity Sensing Pneumatic Starters Humidification Ventilation Controls Heat Exchangers Valves FADECNacelle, Fan & Inlet CowlsThrust ReverserExhaust NozzlePylons Engine Fuel Pumps Engines Interior Lighting Pilot Controls Vehicle Health Management Composite Radomes Air Data, Sensors & Systems Pilot / Crew Seats Cabin Pressure Control Ram Air Turbines Electric Power Distribution Systems Security Systems Smoke Detection Fire Detection Air Conditioning Packs Pressure Transducers Fuel Boost Pumps Engine Bleed Engine Components Fans Electric Power Generating Systems Fuel Injection SystemsFuel Control SystemsEngine Actuation Engine Gearboxes Lube & Scavenge Pumps Flight Control Surfaces Flight Control Fire Suppression Primary Flight Controls Passenger Service Units Potable Water Systems Inerting Systems Air Turbine Starters Exterior Lighting Airframe Accessory Transmissions Vapor Cycle Cooling Temperature Control Heating Systems & Composites OBIGGS Compressor AvionicsDisplaysCommunications Inertial Sensors Thermostats Overlap areas 4 Combination would provide internal systems from nose to tail, creating anti-competitive concerns
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Customer & regulatory UTC Honeywell Intrusion panels AdvisorOne, Concord, Monitor,NetworX, Simon, ZeroWire ADEMCO VISTA, OMNI, LYNX Wired glass break sensors Aritech FlexGuard Wireless sensors Garage door, door/window,image, motion, shock, glassbreak, panic, smoke/heat, CO Door/window, motion, CO, smoke/heat, glass break, asset Fire panels Chubb, Edwards, GST Notifier, Silent Knight,Gamewell-FCI, Fire-Lite Aspirating smoke detectors Atmosfire, AIRSense, AIR-Intelligence, ORION FAAST, HI-SPEC, ALL-SPEC, TITANUS, Compact ASD, Xtralis1 VESDA/ICAM Comm’l fire detection Chubb, Edwards,Kidde, GST Notifier, Gamewell-FCI,Fire-Lite, System Sensor Comm’l fire alarm Chubb, Edwards, GST Gamewell-FCI, System Sensor 5 Commercial product overlap 1. Xtralis acquisition announced 2/4/2016, expected closing 2Q16Source: Company websites Security Fire
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Customer & regulatory 6 Recent environment has become more stringent Pentagon officials warned on Wednesday against further consolidation in the U.S. weapons industry because fewer defense contractors could lead to higher costs, decreased innovation and less competition."What I said then and still believe is that it was important to avoid excessive consolidation in the defense industry to the point where we did not have multiple vendors who could compete with one another on many programs," Carter told reporters. U.S. antitrust enforcers are responding forcefully to the flurry of mergers in highly concentrated industries and may be emboldened by recent victories. Mega deals pending in industries including health insurance, drug stores, pharmaceuticals and chemicals are facing scrutiny from the FTC and the Justice Department, which share antitrust enforcement authority. The European Commission launched an investigation into the alleged anticompetitive behavior by aerospace OEMs in the provision of aftermarket services in September 2015 focusing on Honeywell in APUs Airlines are seeking legal advice to examine whether they are being gouged on the cost of the equipment they buy, including jetliners and the engines that power them, according to Willie Walsh, chief executive of British Airways parent International Consolidated Airlines Group SA.“We have asked the team at IATA to engage external legal counsel to start looking into this issue,” Mr. Walsh said. The group will explore whether manufacturers and aftermarket parts suppliers are complying with competition rules. June 8, 2015 September 30, 2015 February 4, 2016 Boeing is the biggest customer of most aerospace suppliers, and is slowing some acquisitions by using its power to approve the transfer of its supply contracts from one owner to another.Boeing can act like as an unofficial regulator on aerospace mergers and acquisitions because of the "assignability clause" inserted in most of its contracts with suppliers. The clause allows Boeing to refuse to transfer the contracts to the new owners, giving it a de facto veto over deals. August 30, 2015 Combination would encounter significant regulatory challenges both domestically and abroad
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Customer & regulatory 7 Recent customer reactions Healthy competition in our supply chain is vitally important to Boeing and our commercial and military customers . . . we would anticipate taking a very close look at the potential impact on us and our customers of a Honeywell-UTC merger or acquisition. February 24, 2016 I do not see that such a combination would be in the interests of Airbus…I am under the impression that the UTC leadership shares my assessment. Tom EndersFebruary 24, 2016 Proposed combination will face significant objection from customers Canadian aircraft maker Bombardier told the FT that it would also object to any merger, reflecting widespread industry unease over the dominance such an enlarged supplier would have and the erosion of competition. February 24, 2016 I don’t think that would be good, at least for Embraer. On the E2 they are major suppliers and if they become one supplier they will have an enormous stake. So that’s something we are looking carefully at. Frederico CuradoFebruary 26, 2016
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Learning from history 8 Failed mega-merger between HON and GE 2000 2001 2002 2003 2004 2005 9/11 "The merger between GE and Honeywell, as it was notified, would have severely reduced competition in the aerospace industry and resulted ultimately in higher prices for customers, particularly airlines." – Mario Monti (European Commissioner), July 3, 2001 2000–2005change UTC +65% HON (38%) Oct 200019th: HON confirms merger discussions with UTC 20th: HON/UTC announce termination June 2001News of the European Commission’s intent to block the merger July 3, 2001European Commission officially rejects the merger Bonsignore resigns effective immediately, replaced by Bossidy May 3, 2001DoJ approves merger with limited divestitures required Oct 22, 2000GE announces acquisition of HON Feb/July 2002Cote named CEO in Feb and Chairman in July “A decade and a half ago, Honeywell botched a merger with AlliedSignal, leaving rifts in the management of the company that hampered cooperation and hurt morale. It left a mess that employees nicknamed “Honey Hell.” The wounded company was then almost taken over by GE, but when European regulators shot down the acquisition, it was left with bleak prospects.” – Wall Street Journal (Sept. 1, 2015)
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Contribution analysis 9 (2016E consensus financials) Net income EBIT EBITDA Sales Free cash flow UTC represents a majority of the financial contributions of the combined company
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Financial assessment Proposal grossly undervalues UTC 10 Premium / (discount) to: 52-week high of $124.45 6-mo VWAP of $92.95 2/18/16 close of $88.36 (19%)9%15% HON proposal 101 stock cash < 108HON stated value HON equity value $83B UTC equity value $74B New debt issued ($36B) Combined equity value $121B x UTC 40% ownership $48B ÷ UTC 833m shares $58 / share ($, per share) Equity value as of 2/18/2016
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synergy benefits overstated 11 HON’s assumed $3.5B synergy figure is highly aggressive (~8.5% of HON sales)Both companies already operating at best in class marginsDoes not include impact of required divestitures ~6% TYC/JCI(2016) ~6% ~5% UTC/GR(2012) ~4% IR/Trane(2008) ALD/HON(1999) Relevant synergy benchmarks (% of smaller company sales, pre-divestitures) Projected synergies are unrealistic and have no precedent $3.5B(~8.5%)HON est. $2.5B(~6.0%)UTC est.
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value destruction Regulatory divestitures and customer concessions 12 Significant value destruction likely from regulatory divestitures and aerospace customer concessions (Present value, $ billions) Value Comments Theoretical value of synergies 23 $2.5B annualized @ 9.3x blended EBITDA Restructuring cost (3) $3B cash restructuring Synergies lost from divestitures (5 – 9) $0.5-1B synergy loss from divestitures @ 9.3x blended EBITDA Valuation leakage from divestitures (2 – 3) 1.5-2x discount to blended EBITDA multiple Tax leakage from divestitures (4 – 5) Low tax basis on divested assets Aero customer concessions (5 – 10) 5-10% price reduction on OE portion of retained aerospace business Net value creation (7) – 4
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Utc Long-term value creation Meaningful actions to drive long-term growth 13 Today, UTC is…Flatter – Leaner – Agile – Closer to customers – Regionally scaled - Collaborative Streamlined portfolio – divested SikorskyFocused, simplified organizational structureContinued restructuringInvestment in new aerospace programsIncreased return of capital to shareholders - $22B from 2015-17
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Utc long-term value creation Positioned for long-term growth 14 10%+ 5 - 7% 4 - 5% ~7,000 engine orders* with industry leading GTF technology… reducing fuel burn, emissions, noise 30+ systems nose to tail… technology enabling advanced system integration, content per platform up >50% 4 - 5% Leveraging 1,800 branches, 3M unit installed base, 1.9M units under service to meet unique customer needs World-class brands serve growing middle class… innovating in efficiency, sustainability and intelligent systems * announced and unannounced firm & option orders (2016E-20E organic sales CAGR)
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conclusion 15 UTC opposes a combination with Honeywell which would encounter significant regulatory opposition and customer concerns, and create insurmountable conditions to complete a transactionSignificant regulatory challenges in U.S., EU, China, Brazil, Canada and elsewhereNegative impact on customers (Airbus, Boeing, DoD) – recent public statements regarding concerns over supplier consolidation Possibility of failed deal scenario with negative financial, operational, customer, and talent impacts, regardless of whether or not the deal is completedNotwithstanding significant regulatory and customer concerns regarding consolidation, the proposal fails to consider the following Proposed synergies do not consider the impact from significant divestitures and customer concessionsProposed value is wholly insufficient, not taking into account the significant earnings and cash flow prospects of UTC