Honeywell International Inc. (NASDAQ:HON) Company Conference Call May 23, 2023 8:00 AM ET Company Participants Greg Lewis - Senior Vice President, Chief Financial Officer Conference Call Participants Moderator - Wolfe Research Moderator Okay, so with me I’ve got Greg Lewis, SVP and CFO of Honeywell. Thanks for being here. Greg Lewis Thank you. Moderator Greg, I know you’ve got some opening slides, so over to you. Greg Lewis Yes, just really quickly--oh, thank you very much, appreciate that. While that’ ...

Honeywell International, Inc. (NASDAQ:HON) Goldman Sachs Industrials & Materials Conference Call May 10, 2023 8:00 AM ET Company Participants Lucian Boldea - President and CEO Conference Call Participants Joe Ritchie - Goldman Sachs Group Joe Ritchie All right. Good morning, everybody. Welcome to Day 2 of the Goldman Sachs Industrials and Materials Conference. My name is Joe Ritchie, head of our Industrials and Materials team. I also cover the multi-industry sector. Before we get going with our first presen ...

MSD Specialty Chemicals • Reduced investment in warehouse automation capacity leads to demand trough in 2023 • Short-cycle softness impacting sensing and safety technologies and productivity solutions and services, particularly in the first half (HSD) e-Commerce • Mix shift and operational improvements driving another strong year of margin expansion Overall Favorable End Market Outlook in 2023 1Q 2023 Earnings - April 27, 2023 13 ADDITIONAL 2023 INPUTS | --- | --- | --- | --- | --- | |---------------------- ...

Honeywell International Inc. (NASDAQ:HON) Q1 2023 Earnings Conference Call April 27, 2023 8:30 AM ET Company Participants Sean Meakim - Vice President of Investor Relations Darius Adamczyk - Chairman & Chief Executive Officer Vimal Kapur - President & Chief Operating Officer Greg Lewis - Senior Vice President & Chief Financial Officer Conference Call Participants Steve Tusa - JPMorgan Julian Mitchell - Barclays Nigel Coe - Wolfe Research Scott Davis - Melius Research Sheila Kahyaoglu - Jefferies Jeff Spragu ...

Financial Performance - Net sales for Q1 2023 increased to $8,864 million, up 5.8% from $8,376 million in Q1 2022[13] - Net income attributable to Honeywell rose to $1,394 million in Q1 2023, compared to $1,134 million in Q1 2022[13] - Earnings per share (diluted) increased to $2.07 in Q1 2023 from $1.64 in Q1 2022[13] - Comprehensive income attributable to Honeywell was $1,331 million in Q1 2023, compared to $1,242 million in Q1 2022[16] - Net income attributable to Honeywell for Q1 2023 was $1.394 billion, compared to $1.134 billion in Q1 2022, reflecting a 22.9% year-over-year increase[22] - Net sales for Q1 2023 reached $8,864 million, up from $8,376 million in Q1 2022[44] - Net sales for Q1 2023 were $8,864 million, with cost of products sold at $4,068 million and cost of services sold at $1,430 million[89] - Net income attributable to Honeywell increased to $1.394 billion in Q1 2023 from $1.134 billion in Q1 2022, with basic earnings per share rising to $2.09 from $1.66[99] - Net sales increased by 6% in Q1 2023 compared to Q1 2022, driven by a 6% increase in pricing and a 2% increase in volume, partially offset by a 2% unfavorable foreign currency translation impact[158] - Gross margin increased by $0.3 billion, with gross margin percentage rising 160 basis points to 38.0% compared to 36.4% in Q1 2022[163] - Net sales for Q1 2023 were $8,864 million, up from $8,376 million in Q1 2022, with product sales at $6,310 million and service sales at $2,554 million[13] - Net income attributable to Honeywell for Q1 2023 was $1,394 million, compared to $1,134 million in Q1 2022[13] - Earnings per share (basic) for Q1 2023 were $2.09, up from $1.66 in Q1 2022[13] - Total costs, expenses, and other for Q1 2023 were $7,082 million, compared to $6,871 million in Q1 2022[13] Cash Flow and Liquidity - Cash and cash equivalents declined to $6,869 million as of March 31, 2023, from $9,627 million as of December 31, 2022[19] - Net cash used for operating activities in Q1 2023 was $784 million, a significant decline from $36 million provided by operating activities in Q1 2022[22] - Cash and cash equivalents decreased by $2.758 billion in Q1 2023, ending the quarter at $6.869 billion compared to $9.281 billion in Q1 2022[22] - The company repurchased $699 million worth of common stock in Q1 2023, a decrease from $1.018 billion in Q1 2022[22] - Cash dividends per share increased to $1.030 in Q1 2023 from $0.980 in Q1 2022[25] - Cash and cash equivalents decreased to $7.2 billion as of March 31, 2023, from $10.1 billion as of December 31, 2022[197] - Net cash provided by operating activities decreased by $820 million in Q1 2023, primarily due to a $1.38 billion decrease in other operating activities[204] - Cash related to investing activities decreased by $19 million in Q1 2023, driven by a $176 million decrease in cash paid for acquisitions and a $79 million net decrease in investments[205] - Cash related to financing activities decreased by $254 million in Q1 2023, primarily due to a $1.32 billion increase in payments of long-term debt[206] - The company repurchased $699 million of common stock in Q1 2023 and has a remaining authorization of $2.1 billion under its $10 billion share repurchase program[208] - The company made payments of approximately $1.5 billion in early 2023 related to the NARCO Buyout and UOP Matters, with an expected receipt of $295 million related to the HWI Sale[211] Balance Sheet and Debt - Total assets decreased to $59,883 million as of March 31, 2023, from $62,275 million as of December 31, 2022[19] - Total current liabilities decreased to $17,896 million as of March 31, 2023, from $19,938 million as of December 31, 2022[19] - Long-term debt decreased to $14,670 million as of March 31, 2023, from $15,123 million as of December 31, 2022[19] - Total Honeywell shareowners' equity increased to $16,919 million as of March 31, 2023, from $16,697 million as of December 31, 2022[19] - Total shareowners' equity decreased to $17.515 billion in Q1 2023 from $19.051 billion in Q1 2022[25] - The company entered into a $1.5 billion 364-day credit agreement and a $4.0 billion five-year credit agreement in March 2023[77] - As of March 31, 2023, there were no outstanding borrowings under the new credit agreements[78] - The company's total long-term debt decreased to $14.670 billion in Q1 2023 from $15.123 billion in Q4 2022[76] - Total borrowings were $19.2 billion as of March 31, 2023, compared to $19.6 billion as of December 31, 2022[199] Segment Performance - Aerospace segment net sales increased to $3,111 million in Q1 2023, up from $2,749 million in Q1 2022, driven by growth in Commercial Aviation Aftermarket ($1,423 million vs. $1,168 million) and Defense and Space ($1,147 million vs. $1,103 million)[44] - Honeywell Building Technologies net sales rose to $1,487 million in Q1 2023, compared to $1,429 million in Q1 2022, with Products contributing $908 million (up from $879 million) and Building Solutions at $579 million (up from $550 million)[44] - Performance Materials and Technologies net sales grew to $2,749 million in Q1 2023, up from $2,453 million in Q1 2022, led by Process Solutions ($1,288 million vs. $1,152 million) and Advanced Materials ($896 million vs. $821 million)[44] - Safety and Productivity Solutions net sales declined to $1,515 million in Q1 2023 from $1,744 million in Q1 2022, with Warehouse and Workflow Solutions dropping to $464 million from $592 million[44] - Aerospace segment net sales increased by 13% to $3.111 billion, with segment profit rising 10% to $827 million[177] - Honeywell Building Technologies segment net sales increased by 4% to $1.487 billion, with segment profit rising 12% to $375 million[182] - Performance Materials and Technologies segment net sales increased by 12% to $2.749 billion, with segment profit rising 11% to $566 million[187] - Safety and Productivity Solutions segment net sales decreased by 13% to $1.515 billion, but segment profit increased by 3% to $260 million[191] Research and Development - Research and development expenses increased to $357 million in Q1 2023, up 2% from $350 million in Q1 2022[13] - Research and development expenses were reclassified as a separate line item starting January 1, 2023, with no impact on net income or cash flows[32] - Research and development expenses remained flat in Q1 2023 compared to Q1 2022[166] Acquisitions and Divestitures - The company acquired US Digital Designs, Inc. for $186 million in January 2022, allocating $53 million to intangible assets and $129 million to goodwill[41] - Honeywell entered into an agreement to acquire Compressor Controls Corporation for $670 million in April 2023, expected to close in the second half of 2023[40] - Honeywell received initial cash proceeds of $256 million from the HWI Sale, with the fair value of remaining proceeds classified as Level 3[94] - Honeywell received $256 million in initial proceeds from the HWI Sale on March 17, 2023[118] Contract Assets and Liabilities - Contract assets increased by $159 million to $2,453 million as of March 31, 2023, compared to $2,294 million at the beginning of the year[55] - Contract liabilities decreased by $292 million to $4,291 million as of March 31, 2023, from $4,583 million at the start of the year[55] - The company recognized $953 million in revenue in Q1 2023 that was previously included in contract liabilities[55] - Total remaining performance obligations stood at $30,260 million as of March 31, 2023, with Aerospace accounting for $12,592 million and Performance Materials and Technologies at $8,381 million[61] - 61% of performance obligations are expected to be satisfied within one year, while 39% will be satisfied beyond one year[62] Repositioning and Restructuring - Total net repositioning and other charges for Q1 2023 were $141 million, compared to $387 million in Q1 2022[67] - The company recognized repositioning charges of $103 million in Q1 2023, including $67 million in severance costs related to workforce reductions of 1,797 positions[67] - Repositioning charges in Q1 2023 included $12 million in asset impairments and $24 million in exit costs[67] Inventory and Supply Chain - Total inventories increased to $5.776 billion in Q1 2023 from $5.538 billion in Q4 2022[74] - Accounts payable related to supply chain financing programs totaled $1.004 billion as of March 31, 2023, up from $992 million at the end of 2022[34] Tax and Environmental Liabilities - The effective tax rate decreased in 2023 compared to 2022, primarily due to increased benefits from taxes on non-U.S. earnings[73] - Environmental liabilities increased to $673 million in Q1 2023 from $615 million in Q1 2022, with $82 million in new accruals and $24 million in payments[104] - Reimbursements from Resideo for environmental matters totaled $35 million in Q1 2023, with a corresponding receivable of $59 million recorded[108] - Asbestos-related liabilities decreased to $1.276 billion in Q1 2023 from $2.616 billion in Q1 2022, primarily due to the NARCO buyout of $1.325 billion[109] - Insurance recoveries for asbestos-related liabilities decreased to $260 million in Q1 2023 from $265 million in Q1 2022[110] - Honeywell agreed to a one-time payment of $1.325 billion to the Trust as part of the NARCO Buyout agreement[115] Derivatives and Hedging - The company's total derivatives at fair value were $18.340 billion in Q1 2023, compared to $18.727 billion in Q4 2022[84] - The carrying value of debt instruments designated as net investment hedges was $4,816 million as of March 31, 2023, compared to $3,836 million as of December 31, 2022[85] - Long-term debt carrying amount with fair value hedging adjustments was $4,787 million as of March 31, 2023, compared to $4,696 million as of December 31, 2022[86] - Interest rate swap agreements resulted in a $67 million loss on hedged items and a $67 million gain on derivatives designated as hedges for Q1 2023[89] Fair Value Measurements - Total assets accounted for at fair value were $698 million as of March 31, 2023, with Level 1 assets at $86 million, Level 2 at $573 million, and Level 3 at $39 million[91] - Total liabilities accounted for at fair value were $271 million as of March 31, 2023, primarily consisting of Level 2 liabilities[91] - The right to HWI Net Sale Proceeds, classified as Level 3, had a fair value of $39 million as of March 31, 2023, down from $295 million as of December 31, 2022[91][93] Legal and Regulatory Matters - The company is subject to various lawsuits and investigations, some involving substantial amounts, as discussed in Note 14 of the financial statements[214] - Unresolved Bendix-related asbestos claims increased to 5,706 as of March 31, 2023, from 5,608 as of December 31, 2022[121] Credit Ratings and Market Access - The company's credit ratings remain stable with S&P, Fitch, and Moody's maintaining long-term ratings of A, A, and A2, respectively[203] - Operating cash flows are expected to meet future operating cash needs, supported by available cash, committed credit lines, and access to public debt and equity markets[212] Other Financial Metrics - Total shares outstanding decreased to 665.7 million in Q1 2023 from 680.7 million in Q1 2022[100] - Accumulated other comprehensive income (loss) decreased to $(3.538) billion in Q1 2023 from $(3.475) billion in Q1 2022, primarily due to foreign exchange translation adjustments[103] - Selling, general and administrative expenses decreased in Q1 2023 due to prior year charges related to suspending operations in Russia[168] - Long-term receivables had a carrying value of $221 million and a fair value of $177 million as of March 31, 2023[98] - Sales decreased by $229 million in Q1 2023 compared to Q1 2022, driven by lower organic sales in Warehouse and Workflow Solutions ($127 million), Productivity Solutions and Services ($44 million), and Sensing and Safety Technologies ($29 million), along with a $29 million unfavorable foreign currency impact[192]

Summary of Honeywell International Inc. (NASDAQ:HON) Jefferies eVTOL Summit Conference Transcript Company Overview - **Company**: Honeywell International Inc. - **Division**: Honeywell Aerospace - **CEO**: Mike Madsen - **Sales Contribution**: Aerospace accounts for 40% of Honeywell's sales [2][3] Industry Focus - **Market**: Urban Air Mobility (UAM) - **Market Size**: $7 billion in content wins and a market pipeline exceeding $10 billion [9] - **Growth Projection**: Expected to be a significant market by the end of the decade, with a revenue target of $2 billion [15] Key Points and Arguments 1. **Role in UAM**: Honeywell acts as both a component supplier and a systems integrator, providing certification support and regulatory guidance [4][5] 2. **Technological Offerings**: Honeywell's technologies include cockpit systems (Anthem), actuation systems, cooling systems, electric motors, and fly-by-wire computers [5][10] 3. **Regulatory Engagement**: Honeywell engages with regulatory authorities and participates in industry groups to shape standards for UAM certification [8][39] 4. **Investment Strategy**: Honeywell employs a bifurcated investment approach, focusing on core products while also tailoring applications for specific customers [12][13] 5. **Partnerships**: Collaborations with companies like DENSO for e-motor development and a focus on high-volume manufacturing capabilities [13][18] 6. **Market Entry Timeline**: Anticipated entry into service for UAM vehicles around 2025, with a gradual ramp-up in revenue expected to follow an S-curve pattern [15][16] 7. **Growth Rate Expectations**: Initial slow growth expected, transitioning to strong double-digit growth in the latter half of the decade [20][21] 8. **Geographic Focus**: Adoption is expected to occur simultaneously across developed regions, including the U.S., Europe, and Asia-Pacific [23][24] Additional Insights - **Anthem System**: A new cockpit system that is modular, lightweight, and connected, allowing for enhanced functionality and potential recurring revenue streams from software enhancements [26][31] - **Operational Challenges**: The need for operational regulations to catch up with certification standards, particularly concerning autonomous operations and navigation technologies [41][42] - **Pilot Training Evolution**: The industry is moving towards single-pilot operations, necessitating advanced avionics capable of managing most flight operations autonomously [44][45] - **Infrastructure Development**: Honeywell is exploring its role in UAM infrastructure, focusing on logistics management systems for rapid recharging or battery exchange [50][51] - **Market Drivers**: Growth in e-commerce and the need for efficient urban transport are key factors driving the UAM market [53][54] Conclusion Honeywell is strategically positioned in the emerging UAM market, leveraging its technological expertise and regulatory engagement to capitalize on significant growth opportunities. The company is focused on innovation, partnerships, and addressing operational challenges to ensure successful market entry and expansion.

Summary of Honeywell International Inc. Conference Call Company Overview - **Company**: Honeywell International Inc. (NASDAQ: HON) - **Sector**: Aerospace - **Participants**: - Mike Madsen - President and CEO, Honeywell Aerospace - Sean Meakim - IR - Andrew Obin - Bank of America Key Points Industry Outlook - The aerospace industry is experiencing strong growth, particularly in Original Equipment Manufacturer (OEM) and aftermarket segments for both Air Transport and Business Aviation [4][6] - Defense sector is stabilizing with clear priorities, showing low to mid-single-digit growth [4][6] - Honeywell has seen a significant increase in business wins in advanced air mobility, growing from $3.5 billion to $7 billion in one year [5] Financial Performance - Honeywell's backlog has grown significantly, with $18 billion in business wins over the last two years [11] - Output is up 15% to 20% year-over-year, indicating positive trends in supply chain and production [11] - The company anticipates a growth in retrofit, modification, and upgrade revenue to $1.1 billion for the current year, with a projected 10% CAGR [37] Market Segments - Air transport is seeing double-digit growth, while business aviation is expected to grow at a mid-single-digit rate [6][16] - Wide-body flight hours are recovering faster than narrow-body, with expectations to return to 2019 levels by late 2024 [14] - Business aviation aftermarket is stabilizing at a low single-digit growth rate, particularly strong in fractional and corporate flight departments [17] Supply Chain and Labor - The supply chain remains constrained, primarily due to labor shortages rather than capital capacity [22] - Honeywell is focusing on dual sourcing and selective automation to mitigate supply chain challenges [22] Research and Development - Honeywell is investing in electrification and advanced technologies, including hybrid electric power systems and sustainable aviation fuel [7][52] - The company plans to maintain R&D spending at 5% to 8% of revenue, focusing on efficiency and innovation [47] Defense and Space - The latest President's budget reflects a shift in defense priorities towards the Asia Pacific region and modernization of military capabilities [29][30] - Honeywell is well-positioned to benefit from increased demand for navigation products and systems related to defense [31] Urban Air Mobility - Honeywell is actively involved in urban air mobility, focusing on reducing crew requirements and enhancing operational efficiency [55][56] - The timeline for commercialization of urban air mobility products has shifted to 2025-2026, with regulatory developments progressing positively [62] Conclusion - Honeywell is optimistic about its growth prospects in 2023, with strong demand across various segments and a solid supply chain recovery [69] - The company is well-positioned to capitalize on emerging trends in aerospace, including sustainability and advanced air mobility technologies [69]

Summary of Honeywell International, Inc. Conference Call Company Overview - **Company**: Honeywell International, Inc. (NASDAQ: HON) - **Date**: March 14, 2023 - **Participants**: Darius Adamczyk (Chairman & CEO), Vimal Kapur (COO & President), Charles Tusa (JPMorgan Chase & Co. Analyst) Key Points Leadership Transition - Darius Adamczyk announced his transition from CEO after 7 years, citing the readiness of his successor, Vimal Kapur, and the company's strong position as key factors for the timing of his departure [4][5][6] - Adamczyk emphasized that he is leaving the company in a strong financial position and is not being pushed out by the Board [5][6] Company Performance and Strategy - Honeywell has undergone significant transformation under Adamczyk, focusing on digitization, innovation, and operational optimization [7][8] - The company aims to enhance its growth algorithm, targeting 4% to 7% top-line growth and 40 to 60 basis points margin expansion [20][42] - Honeywell has a strong balance sheet with approximately $25 billion available for deployment, with $15 billion earmarked for future investments [11][12] Market Outlook - The company is optimistic about its performance in 2023, with guidance for Q1 and the full year remaining on track [32][35] - Honeywell's backlog coverage is over 80%, indicating strong demand and order growth [36] - The company anticipates a recovery in the aerospace sector, with double-digit growth expected in the first two months of the year [37] Focus Areas - Vimal Kapur highlighted two macro trends for future growth: sustainability and digitization, with a focus on automation [14][15] - Honeywell is committed to enhancing margin expansion through its operating system, Honeywell Accelerator, which has been in place for 15 years [15][16] - The company is actively pursuing bolt-on acquisitions that align with its strategic goals [9][65] Challenges and Risks - There is some softness in the PSS segment, which is the shortest cycle in Honeywell's portfolio, but the company expects a recovery [48][49] - Geopolitical factors and supply chain challenges remain concerns, particularly regarding the Chinese market [34][37] Innovation and Sustainability - Honeywell is well-positioned in the sustainability sector, with ongoing projects in carbon capture and sustainable aviation fuel (SAF) [60][63] - The company has seen increased licensing activity in petrochemicals and is optimistic about future growth in this area [60][61] Pricing Strategy - Honeywell is focused on maintaining pricing discipline and offsetting inflation through productivity improvements [51][52] - The company has a robust pricing model that allows for adjustments based on market conditions [51][52] M&A Activity - The company is actively exploring acquisition opportunities, particularly in technology and sustainability sectors, while maintaining a disciplined approach to valuation [65][69] Conclusion Honeywell International, Inc. is positioned for continued growth under new leadership, with a strong focus on sustainability, digitization, and operational efficiency. The company is optimistic about its market outlook for 2023, despite some challenges in specific segments. The leadership transition appears to be well-planned, with a clear strategy for future growth and innovation.

Honeywell International Inc. (NASDAQ:HON) Barclays Industrial Select Conference February 22, 2023 8:00 AM ET Company Participants Greg Lewis - CFO Conference Call Participants Julian Mitchell - Barclays Julian Mitchell Well, I think, we’ll get underway. Thanks very much, everyone, for attending. My name is Julian Mitchell, and thank you for coming to the 40th Barclays Select Industrial Conference here in Miami. It's my pleasure to open the event formally with Greg Lewis, Chief Financial Officer of Honeywell ...

Honeywell International Inc. (NASDAQ:HON) Citi’s 2023 Global Industrial Tech and Mobility Conference February 21, 2023 8:00 AM ET Company Participants Greg Lewis - SVP and CFO Conference Call Participants Andy Kaplowitz - Citigroup Andy Kaplowitz All right. I think we're going to get started. Very happy for you all to be here. Again, most of you know me. I'm Andy Kaplowitz from Citigroup. Very excited to welcome you to the Citigroup Industrial Tech & Mobility Conference. We've got a great lineup for you guy ...