March 20, 2013 Student Investment Committee - Industrials Group

Company Description Leading Manufacturing and Technology Company with Main Business Segments: Aerospace (36% of operating profit) Automation and Controls (37%) Performance Materials and Technology (18%) It has about $42 billion in revenue, $8 billion in EBITDA, and trades around $74 per share, at a P/E of 14.9x, vs. 15.6x on average for its competitors The price could rise to $90 per share in the next 12 months

Three Main Growth Catalysts: 1) Operational Efficiency Upgrade Management continues its operational excellence program (Honeywell Operating System), targeting to move 100% of its facilities to HOS Gold, while the bulk of plants have only been certified as HOS Bronze or Silver HOS system is measured in safety, quality, delivery, cost, and inventory management

2) Balance Sheet Flexibility $5 billion in pension contributions since 2009, but management sees no contributions to its plan through 2015, so $5 billion in cash provides opportunity for M&A

3) Best-in-class Operating Performance, Yet Trades at a Discount to its Peers Above average earnings growth and below average volatility over the past five years, but trades at ~5% discount to peers

Key Customers 122 Key Customers Including:

Balance Sheet Highlights

Ratios and Multiples

Ratios and Multiples Earnings: 2012 $2.9 B 2011 $2.1 B 2010 $2.0 B EPS: 2012 $3.74 2011 $2.61 2010 $2.59 Analyst Coverage: Buy/Sell/Hold 21 / 6 / 0

HON 5 Year Chart

HON YTD Chart + Bollinger Bands

HON Valuation - DCF

SIC Holding: Praxair (PX) Purchased September 28, 2007 at $83.73 Closing Price March 20, 2013 $113.66 35.75% ROI

Recommendation SELL PX and Realize a 35.75% ROI BUY a full position of HON With a Limit Buy order of $73.50 to be revised after Spring Break if not executed.

Resources Bloomberg Finance, L.P. Morgan Stanley Equity Research Reuters Investor's Intelligence Yahoo! Finance

March 20, 2013 Student Investment Committee - Industrials Group