Printer Friendly

HONEYWELL ANNOUNCES INITIATIVES TO INCREASE SHAREHOLDER VALUE, DEPLOY SOME AUTOFOCUS PROCEEDS TO STREAMLINE BUSINESSES AND CAPTURE EMERGING GROWTH OPPORTUNITIES

 HONEYWELL ANNOUNCES INITIATIVES TO INCREASE SHAREHOLDER VALUE,
 DEPLOY SOME AUTOFOCUS PROCEEDS TO STREAMLINE BUSINESSES AND
 CAPTURE EMERGING GROWTH OPPORTUNITIES
 Company also to adopt two mandatory accounting standards;
 Quarterly dividend declared at higher rate
 MINNEAPOLIS, Nov. 9 /PRNewswire/ -- Honeywell Inc. today said it will increase its annual dividend 8 percent to $1.78, accelerate its $600 million share repurchase program and split its stock two-for-one -- actions designed to continue improving shareholder value.
 In addition, Honeywell -- with additional financial flexibility provided by $273 million of pre-tax proceeds this year from autofocus patent settlements -- said it will partly offset the autofocus gain with actions that allow its businesses to meet changing market requirements. Specifically, the company will take a fourth-quarter pre-tax charge of about $100 million to appropriately size its Space and Aviation segment and to reposition its Home and Building Control and Industrial segments to take advantage of emerging growth opportunities.
 The moves, along with adoption of new accounting standards FAS 106 and FAS 109, were approved today by Honeywell's board of directors. The adoption of the accounting standards does not affect cash flow.
 "Since we restructured the company in the late 1980s, Honeywell has delivered improved shareholder value through stock price appreciation, dividend increases and a strategic focus on our core technologies," said James J. Renier, Honeywell chairman and CEO. "Today, we are expanding that commitment with a view to the future. We have chosen to use our financial strength to make changes that will streamline our organization in anticipation of new market requirements. Taking these steps now will help ensure our ability to significantly improve shareholder value as we move through the 1990s.
 "Excluding the autofocus gains and the actions announced today, earnings per share on a comparable basis will improve over 1991," he said.
 A summary of today's actions follows. Dividend Increase of 8 Percent.
 Honeywell will increase its annual per-share dividend 8 percent, to $1.78 from $1.65. The company also declared a regular quarterly dividend at the new rate of 44.5 cents per share, payable Dec. 14 to shareholders of record at the close of business Nov. 27. The cash dividend is payable on existing shares before the stock split.
 Since 1989, Honeywell has increased its dividend 70 percent. Two-for-One Stock Split.
 The stock split, in the form of a stock dividend, applies to shareholders of record at the close of business Nov. 27, with the additional shares to be issued on or about Dec. 18. "By splitting our stock we will make it more affordable for individuals to invest in Honeywell," Renier said.
 The company had 68.7 million shares outstanding at the end of the third quarter. Honeywell stock closed Friday at $62.38. Accelerated Share Repurchase.
 Since announcing a five-year, $600 million share repurchase plan a year ago, Honeywell has bought back 2.1 million shares worth $148 million. "We continue to believe our stock remains a solid investment alternative for our cash. Accordingly, we will step up our repurchase activities and plan to complete the program ahead of schedule," Renier said.
 Once the $600 million repurchase program is completed, he said, Honeywell will consider buying back, on an ongoing basis, shares to offset those issued to employee stock plans. Capitalize on Market Trends.
 In connection with ongoing efforts to size its businesses to anticipate and capitalize on market trends, the company will take a pre- tax provision of about $100 million, or about 90 cents per share after tax, partially offsetting the gain from autofocus patent settlements. The charge will be reflected in fourth-quarter financial statements, with cash outflow occurring over the next 18 months.
 In Space and Aviation, which is affected by declining deliveries of new aircraft and continuing reductions in defense spending, the provision includes ongoing efforts to appropriately size the business to changing market conditions.
 In Home and Building Control and in Industrial, the company is investing to reposition the businesses. The provision includes costs for worldwide facilities consolidation, organizational changes and growth initiatives.
 "In the current environment, our structure works well, but customer requirements will change. We are anticipating those changes to fully capitalize on market opportunities and strengthen our competitive position," Renier said. FAS 106.
 This new accounting standard, which must be adopted by 1993, deals with accruals for post-retirement benefits other than pensions. Under FAS 106, Honeywell will accrue anticipated post-retirement medical costs before employees reach the earliest eligibility date for retirement. Although the shift to FAS 106 will not change the company's cash flow, it will result in a 1992 after-tax charge against earnings of about $2.15 per share. In addition, there is an ongoing annual charge of about 15 cents per share to shift the accounting basis for these benefits. The company's earnings will be restated to reflect adoption of FAS 106 as of Jan. 1, 1992. FAS 109.
 As of Jan. 1, 1992, the company will adopt FAS 109, which covers accounting for income tax. Adoption of FAS 109 will result in a one- time benefit of about $32 million, or about 46 cents per share. There is no ongoing impact on earnings.
 Honeywell is a global controls company that provides products, systems and services for homes and buildings, industry, and aviation and space. The company employs 58,000 people worldwide and had 1991 sales of $6.2 billion.
 -0- 11/9/92
 /CONTACT: Kevin Whalen of Honeywell, 212-838-8000 or 612-870-2701/
 (HON) CO: Honeywell, Inc. ST: Minnesota IN: CPR SU:


KH -- MN007 -- 8834 11/09/92 15:28 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 9, 1992
Words:918
Previous Article:FIFTH DIMENSION REPORTS RESULTS
Next Article:CHRYSLER WINS THIRD ENVIRONMENTAL AWARD FOR 1992
Topics:


Related Articles
HONEYWELL, SEVEN CAMERA MAKERS SETTLE AUTOFOCUS PATENT DISPUTES
HONEYWELL OUTLINES CHANGES IN ANTICIPATION OF MARKET TRENDS; EXECUTIVES MEET WITH SECURITIES ANALYSTS
HONEYWELL OUTLINES CHANGES IN ANTICIPATION OF MARKET TRENDS; EXECUTIVES MEET WITH SECURITIES ANALYSTS
HONEYWELL REPORTS 4TH QUARTER AND '98 EARNINGS.
HONEYWELL REPORTS DOUBLE-DIGIT GROWTH IN 1ST QUARTER.
Lawrence A. Bossidy Joins Aatlas Commerce Board of Directors.
Saba to Provide Learning Management System to Honeywell for Over 100,000 Employees Worldwide; Saba Helps Leading Manufacturer Increase Competitive...
Hillenbrand, Inc. Appoints Hinesh Patel Vice President of Business Development and Strategy.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters