1. March 20, 2013 Student Investment Committee - Industrials Group

2. 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

3. 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

4. 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

5. 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

6. Key Customers
122 Key Customers Including:

7. Balance Sheet Highlights

8. Ratios and Multiples

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

10. HON 5 Year Chart

11. HON YTD Chart + Bollinger Bands

12. HON Valuation - DCF

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

14. 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.

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

16. March 20, 2013 Student Investment Committee - Industrials Group