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.
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(Exact name of registrant as specified in its charter)
Delaware 1-971 41-0415010
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Honeywell Plaza
Minneapolis, Minnesota 55408
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 951-1000
Not Applicable
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(Former name or former address, if changed since last report)
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)
SECOND QUARTER
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JULY 4, July 5,
1999 1998
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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)
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TOTAL COSTS AND EXPENSES 1,930.1 1,847.4
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INCOME BEFORE INCOME TAXES 209.5 187.8
PROVISION FOR INCOME TAXES 69.2 62.0
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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
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
HONEYWELL INC. AND SUBSIDIARIES
INCOME STATEMENT (UNAUDITED)
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
SIX MONTHS ENDED
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JULY 4, July 5,
1999 1998
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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)
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TOTAL COSTS AND EXPENSES 3,758.7 3,626.9
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INCOME BEFORE INCOME TAXES 367.0 331.6
PROVISION FOR INCOME TAXES 121.2 109.5
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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
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
HONEYWELL INC. AND SUBSIDIARIES
SALES AND OPERATING PROFIT BY SEGMENT
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
SECOND QUARTER
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JULY 4, July 5,
1999 1998
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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
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TOTAL SALES 2,139.6 2,035.2
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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
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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)
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INCOME BEFORE INCOME TAXES $ 209.5 $ 187.8(1)
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
HONEYWELL INC. AND SUBSIDIARIES
SALES AND OPERATING PROFIT BY SEGMENT
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
SIX MONTHS ENDED
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JULY 4, July 5,
1999 1998
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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
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TOTAL SALES 4,125.7 3,958.5
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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
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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)
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INCOME BEFORE INCOME TAXES $ 367.0 $ 331.6(1)
(1) 1998 includes a one-time gain of $5.6, or $0.03 per diluted share, related
to the sale of assets.
HONEYWELL INC. AND SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION (UNAUDITED)
(DOLLARS IN MILLIONS)
JULY 4, December 31,
1999 1998
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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
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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
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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
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TOTAL ASSETS $ 7,071.4 $ 7,170.4
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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
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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
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TOTAL LIABILITIES 4,114.8 4,384.9
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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)
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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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HONEYWELL INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS (UNAUDITED)
(DOLLARS IN MILLIONS)
SIX MONTHS ENDED
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JULY 4, July 5,
1999 1998
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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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HONEYWELL INC. AND SUBSIDIARIES
UNAUDITED FINANCIAL COMPARISONS
BY LINE OF BUSINESS
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Q2 1999 VS. Q2 1998 YTD 1999 VS. YTD 1998
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ORDERS SALES EARNINGS ORDERS SALES EARNINGS
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HOME AND BUILDING CONTROL 14% 9% 28% 11% 6% 18%
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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%
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INDUSTRIAL CONTROL 6% 1% (8%)* 5% 1% (5%)*
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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%
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SPACE AND AVIATION CONTROL (9%) 5% 13% (10%) 6% 16%
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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
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TOTAL HONEYWELL 5% 5% 11%* 3% 4% 9%*
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* - Excludes a one-time gain of $5.6 million, or $0.03 per diluted share,
related to the sale of assets in Q2 `98
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
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Edward D. Grayson
Vice President and
General Counsel
Date: July 22, 1999
INDEX TO EXHIBITS
Exhibit No.
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99(i) Honeywell Inc. News Release dated July 21, 1999.