Honeywell International Inc. (HON, Financial) has announced its intention to spin off its Advanced Materials business into a stand-alone, publicly-traded company. This strategic move, disclosed in a Form 8-K filing with the Securities and Exchange Commission on October 8, 2024, is designed to be a tax-free transaction for U.S. federal income tax purposes. The company anticipates completing the separation by the end of 2025 or early 2026.
The planned spin-off is part of Honeywell's ongoing efforts to streamline its operations and focus on core business areas. The separation will allow the Advanced Materials business to operate independently, potentially unlocking additional value for shareholders.
In conjunction with this announcement, Honeywell will host an investor call to discuss the details of the transaction. During this call, the company may present certain non-GAAP financial measures, including organic sales growth, free cash flow, EBITDA, and adjusted earnings per share. These metrics are intended to provide investors with a clearer understanding of Honeywell's ongoing operations and financial performance.
Organic sales growth will be calculated by excluding the impact of foreign currency translation and acquisitions, net of divestitures, for the first 12 months following the transaction date. Free cash flow will be defined as cash provided by operating activities minus capital expenditures. EBITDA will represent earnings before interest, tax, depreciation, and amortization. Adjusted earnings per share for the third quarter of 2024 will exclude costs related to acquisitions, divestitures, and impairments.
Honeywell's management believes these non-GAAP measures, when considered alongside reported amounts, offer valuable insights into the company's operational trends and financial health. However, these measures should be viewed as supplementary to, and not replacements for, the most comparable GAAP measures.
For more detailed information on Honeywell's strategic plans and financial outlook, visit GuruFocus.com.
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