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Honeywell posts record free cash flow of $3.6 billion in 2010
By Jennifer Lanning Drey
Savannah, Ga., Jan. 28 - Honeywell International Inc. generated a record $3.6 billion of free cash flow in 2010, reflecting higher cash earnings and record working capital turns, David Anderson, its chief financial officer, said Friday during the company's fourth-quarter earnings conference call.
The company also reported fourth-quarter sales of $9.0 billion, up from $8.1 billion in the fourth quarter of 2009. Full-year sales increased to $33.4 billion, versus $30.9 billion in 2009.
"We had a strong finish to 2010, capping just a great year for Honeywell. Our results this year reinforced that our strategy is working," Dave Cote, the company's chief executive officer, said during the call.
In addition to its fourth-quarter earnings, Honeywell also reported Friday that it has entered into an agreement to sell its automotive Consumer Products Group business to privately held Rank Group in a cash transaction valued at $950 million.
Honeywell plans to redeploy the proceeds, first to fund its U.S. pension plan with about $400 million or to the extent that it offsets the cash taxes on the sale, Anderson said.
That would bring assumed 2011 cash pension contributions to $1.4 billion and the funded status globally of Honeywell's plans to about 90%, he said.
"It's overall very good news in terms of cash opportunity and the cash deployment," Anderson said.
The remainder of the proceeds is expected to be reinvested to offset further share count growth relative to where it ended the year in 2010, he said.
Honeywell is a diversified technology and manufacturing company based in Morristown, N.J.
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