Honeywell Forecasts 2012 Sales of $37.8-38.9 Billion, Up 4-7%; Proforma Earnings per Share of $4.25-4.50, Up 6-12%

Company Reaffirms 2011 Financial Guidance

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Dec 15, 2011, 08:00 ET

MORRIS TOWNSHIP, N.J., Dec. 15, 2011 /PRNewswire/ -- Honeywell (NYSE: HON) today announced its 2012 financial outlook including:

Sales of $37.8-38.9 billion, up 4-7% over 2011 estimated sales
- 4-6% organic growth expected
Earnings per share (EPS) of $4.25-4.50, an increase of 6-12% over prior year
- Strong sales conversion drives 40-70 basis points margin expansion
- Proforma EPS from continuing operations up 13-19%
- Mark-to-market pension adjustments in both periods excluded
Free cash flow (cash flow from operations less capital expenditures) of approximately $3.5 billion
- Free cash flow conversion of approximately 100%
- 2012 free cash flow guidance excludes any cash pension contributions

The company also reaffirmed its 2011 full-year guidance, expecting:

Sales of approximately $36.5 billion, up 13% over 2010
- Excludes the divested CPG business, treated as discontinued operations
Proforma earnings per share of approximately $4.03, up 34% over 2010
- Mark-to-market pension adjustments in both periods excluded
Free cash flow guidance of approximately $3.5 billion, excluding cash pension contributions

"Honeywell's 2011 performance significantly adds to our performance track record and highlights the strength of our portfolio, robust new product pipeline, and expansion in high-growth regions," said Honeywell Chairman and Chief Executive Officer Dave Cote. "Our long-cycle backlog continues at record levels, with sustained strong orders growth particularly at UOP, Process and Building Solutions, and Commercial Aerospace. Further, our short-cycle businesses, such as Turbo Technologies, Advanced Materials, and ACS products performed well throughout 2011."

"We're planning for a more challenging macro environment in 2012," continued Cote. "While key economic indicators show slower year-over-year growth in GDP and industrial production globally, we expect to grow faster than the end markets we serve, mainly driven by our robust long-cycle backlog of almost $16 billion, strong commercial aerospace aftermarket growth, and continued contributions from our short-cycle businesses. We feel confident that our portfolio mix and continued margin expansion will deliver strong earnings growth and free cash flow conversion in 2012."

Honeywell will discuss its 2012 Outlook during its investor conference call and Webcast starting at 9:00 a.m. EST today. To participate on the conference call, please dial (631) 291-4830 a few minutes before the 9:00 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 call will be available through the "Investor Relations" section of the company's Website www.honeywell.com/investor. Investors can access a replay of the conference call from 12:00 p.m. EST, December 15, until midnight, December 29, by dialing (404) 537-3406. The access code is 23247389.

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 specialty 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.

Honeywell International Inc
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
(Unaudited, dollars in millions)


	2011 Guidance

Cash provided by operating activities	$2,650

Expenditures for property, plant and equipment	~ (800)

Free cash flow	$1,850

U.S. Pension Cash Contributions (1)	~1,650

Free cash flow, excluding U.S. pension cash contributions	~$3,500

(1) Represents expected cash contributions for 2011

We define free cash flow as cash provided by operating activities, less cash expenditures for property, plant and equipment

We believe that this metric is useful to investors and management as a measure of cash generated by business operations
that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business
development activities or acquisitions, and to pay dividends, repurchase stock, or repay debt obligations prior to their
maturities. This metric can also be used to evaluate our ability to generate cash flow from business operations and
the impact that this cash flow has on our liquidity.

Reconciliation of Earnings per share to Earnings per share, excluding mark-to-market pension expense

	2010	2011E	V%

EPS - Total Honeywell - assuming dilution	$2.59	~$4.03
Mark-to-Market Pension Adjustment	0.41	TBD
EPS - Total Honeywell - assuming dilution,
excluding mark-to-market pension expense	$3.00	~$4.03	34%


We believe EPS, excluding mark-to-market pension expense, is a metric that is useful to investors and management in understanding
our ongoing operations and in analysis of ongoing operating trends

EPS utilizes weighted average shares outstanding and the effective tax rate for the period. Mark-to-market uses a blended tax rate of 32.3% for the fourth quarter of 2010