Honeywell 2014 Annual Report Download - page 33

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LIQUIDITY AND CAPITAL RESOURCES
The Company continues to manage its businesses to maximize operating cash flows as the
primary source of liquidity. In addition to our available cash and operating cash flows, additional
sources of liquidity include committed credit lines, short-term debt from the commercial paper market,
long-term borrowings, and access to the public debt and equity markets. We continue to balance our
cash and financing uses through investment in our existing core businesses, acquisition activity, share
repurchases and dividends.
Cash Flow Summary
Our cash flows from operating, investing and financing activities, as reflected in the Consolidated
Statement of Cash Flows, are summarized as follows:
2014 2013 2012
Years Ended December 31,
Cash provided by (used for):
Operating activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,024 $ 4,335 $ 3,517
Investing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,876) (1,959) (1,428)
Financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,272) (433) (1,206)
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . (339) (155) 53
Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . $ 537 $ 1,788 $ 936
2014 compared with 2013
Cash provided by operating activities increased by $689 million primarily due to (i) a $508 million
increase of net income before the non-cash pension mark-to-market adjustment, (ii) reduced net
payments for repositioning and other charges of $233 million (primarily due to the collection of a
$130 million asbestos receivable due from one of our insurance carriers and lower asbestos related
payments of $98 million), (iii) reduced cash contributions to our pension and other postretirement plans
of $131 million and (iv) lower cash tax payments of approximately $129 million, partially offset by a
$93 million unfavorable impact from working capital (primarily driven by higher inventory to support
sales growth).
Cash used for investing activities decreased by $83 million primarily due to a decrease in cash
paid for acquisitions of $1,129 million (most significantly Intermec and RAE Systems, Inc. in 2013) and
an increase in proceeds from the sales of businesses of $157 million (most significantly Friction
Materials), partially offset by (i) a net $688 million increase in investments (primarily short-term
marketable securities), (ii) an increase of approximately $371 million in settlement payments of foreign
currency exchange contracts used as economic hedges on certain non-functional currency
denominated monetary assets and liabilities and (iii) a $147 million increase in expenditures for
property, plant and equipment.
Cash used for financing activities increased by $1,839 million primarily due to a decrease in the
net proceeds from debt issuances of $1,589 million, an increase in cash dividends paid of $157 million
and lower net proceeds from the issuance of common stock of $33 million.
2013 compared with 2012
Cash provided by operating activities increased by $818 million primarily due to (i) reduced cash
contributions to our pension plans of $883 million, (ii) a $447 million increase of net income before the
non-cash pension mark-to-market adjustment, (iii) a $135 million favorable impact from working capital
(driven by improved accounts payable performance and inventory, partially offset by higher receivables
primarily due to sales growth and timing of sales), partially offset by higher cash tax payments of
approximately $352 million and a $260 million increase in net payments for repositioning and other
charges (most significantly the NARCO Trust establishment payments of $164 million).
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