Honeywell 2013 Annual Report Download - page 59

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program permit the repurchase of receivables from the third parties at our discretion, providing us with
an additional source of revolving credit. As a result, program receivables remain on the Company’s
balance sheet with a corresponding amount recorded as Short-term borrowings.
In March 2013, the Company repaid $600 million of its 4.25 percent notes.
In November 2013, the Company issued $300 million 3.35 percent Senior Notes due 2023 and
$700 million Floating Rate Senior Notes due 2015 (collectively, the “Notes”). The Notes are senior
unsecured and unsubordinated obligations of Honeywell and rank equally with all of Honeywell’s
existing and future senior unsecured debt and senior to all of Honeywell’s subordinated debt. The
offering resulted in gross proceeds of $1 billion, offset by $7 million in discount and closing costs
related to the offering.
On December 10, 2013, the Company entered into a $4 billion Amended and Restated Five Year
Credit Agreement (“Credit Agreement”) with a syndicate of banks. Commitments under the Credit
Agreement can be increased pursuant to the terms of the Credit Agreement to an aggregate amount
not to exceed $4.5 billion. The Credit Agreement contains a $700 million sublimit for the issuance of
letters of credit. The Credit Agreement is maintained for general corporate purposes and amends and
restates the previous $3 billion five year credit agreement dated April 2, 2012 (“Prior Agreement”).
There have been no borrowings under the Credit Agreement or the Prior Agreement.
During 2013, the Company repurchased $1,073 million of outstanding shares to offset the dilutive
impact of employee stock based compensation plans, including option exercises, restricted unit vesting
and matching contributions under our savings plans (see Part II, Item 5 for share repurchases in the
fourth quarter of 2013). In December 2013, the Board of Directors authorized the repurchase of up to a
total of $5 billion of Honeywell common stock.
On June 3, 2013, the Company acquired RAE, a global manufacturer of fixed and portable gas
and radiation detection systems, and software. The aggregate value, net of cash acquired, was $338
million. The acquisition was funded with available cash. See Acquisitions in Note 2 to the financial
statements for further discussion.
On September 17, 2013, the Company acquired 100 percent of the issued and outstanding shares
of Intermec, a leading provider of mobile computing, radio frequency identification solutions and bar
code, label and receipt printers for use in warehousing, supply chain, field service and manufacturing
environments. Intermec was a U.S. public company that operated globally and had reported 2012
revenues of $790 million. The aggregate value, net of cash acquired, was $607 million. The acquisition
was funded with the issuance of commercial paper. See Acquisitions in Note 2 to the financial
statements for further discussion.
In January 2014, the Company entered into a definitive agreement to sell its Friction Materials
business to Federal Mogul Corporation for approximately $155 million. The transaction, subject to
required regulatory approvals and applicable information and consultation requirements, is expected to
close in the second half of 2014. See Divestitures in Note 2 to the financial statements for further
discussion.
In 2013, we were not required to make contributions to our U.S. pension plans. During 2013, cash
contributions of $156 million were made to our non-U.S. plans to satisfy regulatory funding standards.
The NARCO Plan of Reorganization went into effect on April 30, 2013. In 2013, the Company
made NARCO Trust establishment payments of $164 million. See Asbestos Matters in Note 22 to the
financial statements for further discussion of possible funding obligations in 2014 related to the
NARCO Trust.
In addition to our normal operating cash requirements, our principal future cash requirements will
be to fund capital expenditures, dividends, strategic acquisitions, share repurchases, employee benefit
obligations, environmental remediation costs, asbestos claims, severance and exit costs related to
repositioning actions and debt repayments.
Specifically, we expect our primary cash requirements in 2014 to be as follows:
47