Honeywell 2015 Annual Report Download - page 28

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 2016 to be as follows:
We continuously assess the relative strength of each business in our portfolio as to strategic fit, market position, profit
and cash flow contribution in order to upgrade our combined portfolio and identify business units that will most benefit from
increased investment. We identify acquisition candidates that will further our strategic plan and strengthen our existing core
businesses. We also identify businesses that do not fit into our long-term strategic plan based on their market position,
relative profitability or growth potential. These businesses are considered for potential divestiture, restructuring or other
repositioning actions subject to regulatory constraints. In 2015 and 2014, we realized $1 million and $160 million in cash
proceeds from sales of non-strategic businesses.
Based on past performance and current expectations, we believe that our operating cash flows will be sufficient to meet
our future operating cash needs. Our available cash, committed credit lines, access to the public debt and equity markets,
provide additional sources of short-term and long-term liquidity to fund current operations, debt maturities, and future
investment opportunities.
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Capital expenditures—we expect to spend approximately $1.1 billion for capital expenditures in 2016 primarily for
growth, production and capacity expansion, cost reduction, maintenance, and replacement.
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Share repurchases—under the Company ’ s share repurchase program, $2.2 billion is available as of December 31,
2015 for additional share repurchases. Honeywell presently expects to repurchase outstanding shares from time to
time to generally offset the dilutive impact of employee stock-based compensation plans, including option exercises,
restricted unit vesting and matching contributions under our savings plans. The amount and timing of future
repurchases may vary depending on market conditions and our level of operating, financing and other investing
activities.
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Dividends—we increased our dividend rate by 15% to $.5950 per share of common stock effective with the fourth
quarter 2015 dividend. The Company intends to continue to pay quarterly dividends in 2016.
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Asbestos claims—we expect our cash spending for asbestos claims and our cash receipts for related insurance
recoveries to be approximately $295 million and $25 million in 2016.
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Pension contributions—in 2016, we are not required to make contributions to our U.S. pension plans. We plan to
make contributions of cash and/or marketable securities of approximately $160 million ($106 million of marketable
securities were contributed in January 2016) to our non-U.S. plans to satisfy regulatory funding standards. The timing
and amount of contributions to both our U.S. and non-U.S. plans may be impacted by a number of factors, including
the funded status of the plans.
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Repositioning actions—we expect that cash spending for severance and other exit costs necessary to execute
repositioning actions will approximate $175 million in 2016.
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Environmental remediation costs—we expect to spend approximately $250 million in 2016 for remedial response and
voluntary clean-up costs.
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Acquisitions—we acquired the remaining 30 percent noncontrolling interest in UOP Russell LLC for approximately
$240 million in January 2016. In addition, in February 2016 we acquired COM DEV International for an aggregate
purchase price of approximately $330 million and entered into a definitive agreement to acquire Xtralis International
Holdings Limited for an aggregate purchase price of approximately $480 million.