Honeywell committed to A2 rating, financial policy unchanged: CFO

By Jennifer Lanning Drey

Portland, Ore., June 8 - Honeywell International, Inc. is committed to its A2 long-term debt rating, Dave Anderson, its chief financial officer, said Tuesday during a presentation at the JPMorgan Diversified Industries Conference in New York.

Honeywell's plans to purchase Sperian Protection for about $1.4 billion should not be viewed as an indicator that Honeywell has changed its financial policy with respect to leverage or ratings, Anderson added in response to a question posed following his formal remarks.

As previously reported, Moody's Investors Service affirmed Honeywell's A2 long-term and P-1 short-term ratings and revised the outlook to negative from stable based on the company's plans to acquire Sperian.

"We're in constant communication with [Moody's], and I think they very much understand our point of view in terms of the strategic significance, as well as the financial returns that are possible from this transaction," Anderson said.

"It's the liquidity event that's the concern, but I think it's all very manageable in still maintaining our rating."

Anderson noted during his formal presentation that Honeywell expects to generate cumulative free cash flow from 2010 to 2014 in a range of $18 billion to $20 billion.

The amount will provide the company ample opportunity to create shareholder value through dividends, share buybacks, continued acquisitions and selective debt reduction during the period, he said.

Honeywell expects to generate roughly $3 billion of free cash flow for full-year 2010.

Additionally, the company is projecting top-line growth of roughly 7% over the next five years, driven by new products, favorable macro trends, energy efficiency, successful penetration of emerging markets and select acquisitions, Anderson said.

Honeywell is a diversified technology and manufacturing company based in Morristown, N.J.

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