Honeywell Reports Full-Year Sales Up 13% To $36.5 Billion

MORRIS TOWNSHIP, N.J., January 27, 2012 -- Honeywell (NYSE: HON) today announced fourth quarter and full-year 2011 results as follows: • 4Q11 sales were up 8% to $9.5 billion versus $8.7 billion in 4Q10       - 7% organic growth reflects continued strength in most end markets and the contribution of           new product launches and geographic expansion • 4Q11 proforma earnings (excluding the impact of pension mark-to-market adjustments) of $1.05   per share, up 21% over $0.87 in 4Q10; Reported 4Q11 earnings reflected a loss of ($0.40) per   share versus earnings of $0.47 per share in the prior year       - Pension mark-to-market adjustment of $1.45 per share calculated using 784.3 million         weighted average shares outstanding assuming dilution • 4Q11 cash flow from operations of $1.5 billion, includes $250 million cash pension contribution   in the quarter       - 4Q11 free cash flow (cash flow from operations less capital expenditures) of $1.4 billion,          prior to $250 million cash pension contribution The company reported full-year 2011 results including: • 2011 sales of $36.5 billion, up approximately 13% over 2010       - 8% organic sales growth, again reflecting strong end markets, successful new product         launches, and continued expansion in high growth regions • 2011 proforma earnings (excluding the impact of pension mark-to-market adjustments)  of $4.05   per share, up 35% over $3.00 in 2010; Reported EPS of $2.61 in 2011 versus $2.59 in the prior   year       - Pension mark-to-market adjustment of $1.44 per share calculated using 791.6 million         weighted average shares outstanding assuming dilution • 2011 cash flow from operations of $2.8 billion, includes $1.7 billion cash pension contribution in    the year       - 2011 free cash flow of approximately $3.7 billion, prior to $1.7 billion cash pension         contribution “Honeywell had a terrific 2011,” said Honeywell Chairman and CEO Dave Cote. “We executed across the portfolio with record organic sales growth and segment margins. Our 2011 performance reflects the operational and financial disciplines that underpin the transformation that has taken place at the company over the last 10 years. We deployed the Honeywell 5 Initiatives – Growth, Productivity, Cash, People, and our Enablers, and created a common One Honeywell culture committed to continuous improvement. As a result, we built a better set of businesses with Great Positions in Good Industries, a terrific performance track record, a great leadership team with a truly global focus, a very full pipeline of new products and technologies, and our key process initiatives that are gaining momentum. We’ve come a long way, and we feel even better about our future.” “While we expect a more challenging macro environment ahead in 2012, primarily driven by softness in Europe impacting the short-cycle businesses, we’re confident that Honeywell is well positioned to continue to outperform,” continued Cote.  “Our long-cycle businesses are accelerating, with Commercial Aerospace OE, UOP, Building Solutions & Distribution, and Process Solutions all having substantial backlog, in total just under $16 billion. While we expect growth to moderate in the first half of 2012, we’re confident that we can drive strong sales conversion leading to higher segment margins over the course of the year.  The investments we’ve made, coupled with our execution track record and disciplined playbook, will be key to our continued out performance in 2012 and beyond.” Fourth Quarter Segment Highlights Aerospace • Sales were up 8% compared with the fourth quarter of 2010, primarily due to 20% growth in   Commercial original equipment and aftermarket volumes, partially offset by lower military sales   and government services. • Segment profit was up 10% and segment margin increased 40 bps to 18.8%, primarily due to   strong commercial aftermarket volume and productivity benefits net of inflation, partially offset   by higher research and development costs, and the dilution associated with the EMS   acquisition. • Honeywell secured more than $100 million in safety product wins including contracts with   Lufthansa Airlines to introduce Intuvue Radar and SmartLanding airport and runway awareness   technology on its full fleet of A320 aircraft. Air China will introduce Honeywell’s Intuvue Radar   on its B777-300ER in addition to Satellite Communication System, Traffic Collision Avoidance   System, and Voice and Data recorders. Additionally, Emirates Airlines will forward fit and   retrofit Honeywell Satellite Communication Systems on its fleet of 777, A380, and A340 aircraft. • Honeywell was awarded more than $150 million in Global Aftermarket support contracts in the   quarter.  These include a Maintenance Cost Agreement with Flydubai for the carrier’s auxiliary   power units (APUs) installed on its fleet of Boeing 737-800 passenger aircraft, aftermarket   support with Air France to provide multiple avionics components across several aircraft   platforms, and wheels and brakes support with Ethiopian Airlines and Air China. • Honeywell has delivered the latest version of its industry leading HTF7000 family of jet engines,   the HTF7500E, to Embraer for flight testing on Embraer’s family of Legacy 450 and 500 series   jets. The HTF7500E is Honeywell’s newest fuel efficient engine that encompasses SABER   (Single Annular Combustor for Emissions Reduction) combustor technology reducing jet engine   emissions by 25%. Automation and Control Solutions • Sales were up 4%, compared with the fourth quarter of 2010, driven by organic growth across   the portfolio.  The favorable impact of net acquisitions offset negative foreign currency   translation in the quarter.  ACS continues to benefit from new product introductions, emerging   region expansion, and favorable macro trends such as safety, security, and energy efficiency. • Segment profit was up 14% and segment margins increased 130 bps to 14.4% driven by higher   volumes, commercial excellence, and productivity benefits net of inflation, and the absence of   prior year dilution from acquisitions. • Process Solutions was awarded an $88.6 million contract by the city of Los Angeles to   completely overhaul and modernize the technology controlling the city’s wastewater treatment   system. The project will allow the city's Bureau of Sanitation to replace the current control   systems, some of which have been in place for two decades and are outdated, with a city- and   network-wide integrated system, simplifying operations and reducing environmental risks from   the aging infrastructure. • Life Safety acquired King’s Safetywear, a leading international provider of branded safety   footwear and other personal protective equipment (PPE). Headquartered in Singapore, King’s   will be integrated into the global Safety Products business and further broadens Honeywell’s   head-to-toe PPE portfolio, offering a range of respected protective footwear brands to key   markets including Southeast Asia, Australia, and other regions.  Life Safety also acquired Fire   Sentry Corporation, a privately-held manufacturer of innovative fire detection and control   products for a broad range of industrial markets. Fire Sentry’s product portfolio consists of fast-   responding electro-optical flame detectors, portable test lamps, and dedicated control panels   that are used by customers in industrial settings such as petrochemical, semiconductor, and   other plants. • Building Solutions announced a smart grid project that will help Scottish and Southern Energy   Power Distribution connect up to 30 commercial and industrial buildings in the Thames Valley   area west of London, which will help alleviate the potential for future transmission and   distribution bottlenecks as the peak demand for energy grows. The project will help to create a   more robust, agile grid without the public disruption or expense of major infrastructure   upgrades. Honeywell will install automated demand response (Auto DR) technology in the   selected facilities. Performance Materials and Technologies• Sales were up 24% compared with the fourth quarter of 2010, resulting from strong UOP   project and catalyst sales, the phenol plant acquisition, and favorable pricing and new product   applications in Advanced Materials. • Segment profit was up 30% and segment margins increased 80 bps to 15.6% due to higher   project sales and catalyst growth, favorable price over raws spreads, and continued   productivity benefits, partially offset by inflation and the unfavorable margin impact from the   phenol plant acquisition. • UOP announced that its adsorbent ion exchange products are successfully being used by   Toshiba Corp. and Shaw Global Services for the cleanup of radiation-contaminated water at the   Fukushima Daiichi nuclear power plant in Japan. The Simplified Active Water Retrieve and   Recovery System (SARRY) is utilizing UOP IONSIV™ Ion Exchangers to remove and reduce   radioactive materials in the contaminated wastewater caused by the earthquake and tsunami in   Japan in 2011. • Resins and Chemicals signed an agreement with the J.R. Simplot Company, one of the world’s   largest privately-held food and agribusiness companies, to build a facility that will produce   Honeywell’s Sulf-N® 26, a highly-effective fertilizer with all the agronomic benefits of   traditional nitrate-based fertilizers but with significantly lower explosive potential. • UOP announced that its Uniflex™ process technology, designed to help refiners get more high-   value product from each barrel of crude oil, has been selected by National Refinery Limited to   maximize diesel and lubricant production in Pakistan. Uniflex™ technology was developed to   help refiners processing the bottom of the barrel (the heaviest portions of a barrel of crude also   known as vacuum residue) into higher-value transportation fuels. This technology can deliver   90% conversion of vacuum residue to transportation fuels. Transportation Systems• Sales were up 10% compared with the fourth quarter of 2010, due to higher light vehicle turbo   volumes overall, new launches,  and higher diesel penetration, partially offset by the   unfavorable impact of foreign exchange. • Segment profit was up 14% and segment margins increased 40 bps to 12.4%, primarily driven   by higher volumes and increased productivity benefits, partially offset by inflation. • Honeywell Turbo Technologies launched approximately 25 new turbo applications in the fourth   quarter on gasoline and diesel powertrains for both passenger and commercial vehicle   applications around the world bringing the 2011 total to nearly 100 applications and reflecting a   record number of deliveries in 2011 surpassing the previous record set in pre-recession 2007. • As global manufacturers continue to turn to engine downsizing and turbocharging to meet   increasing regulatory requirements and satisfy customers, Honeywell Turbo Technologies was   awarded more than $500 million in new platform wins in Q4 bringing its year-to-date total to   nearly $2.8 billion in revenue realized throughout the life of the future programs won. The wins   in Q4 reflect new business from global customers including Audi, Nissan, Fiat, Chrysler, and   Caterpillar. Honeywell will discuss its results during its investor conference call today starting at 9:30 a.m. EST.  To participate, please dial (631) 291-4830 a few minutes before the 9:30 a.m. EST start.  Please mention to the operator that you are dialing in for Honeywell’s investor conference call.  The live webcast of the investor call will be available through the “Investor Relations” section of the company’s Website (http://www.honeywell.com/investor).  Investors can access a replay of the conference call from 12:30 p.m. EST, January 27, until midnight, February 3, by dialing (404) 537-3406.  The access code is 34690390. Honeywell (www.honeywell.com) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes, and industry; automotive products; turbochargers; and performance materials. Based in Morris Township, N.J., Honeywell’s shares are traded on the New York, London, and Chicago Stock Exchanges.  For more news and information on Honeywell, please visit www.honeywellnow.com. This release contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements.