You now ask for a SEC investigation into HON.....?
Did HON terminate you in the past. Sounds like it to me.
Look at the FCF generation for HON over the past years.....
Those data are not hiding
I think its an unfair comparison to say Detriot/Wayne Cty
is a pension template for the Elster pension liability issue.
Decades of govt corruption and graft....outright illegal
destruction of the Detroit pension system was carried
out for decades by mostly Democratic political hacks.
Many are/were in jail for their acts.
Cote had his due diligence to look over the Elster books.
He knows his pension risk/exposure. IMO $ 204 million
is not a terrible pension liability. You make it sound like
it will destroy HON shareholders. Not true.
BTW, 401(k) plans give employees portability and control
over their retirement future. Better for the employers and
the workers. If an employee does not get involved in HIS
retirement savings and learn to deal with his 401(k) on
a long term basis, then the employee has only himself
to blame. Not HON...!!
As an shareholder of HON its a good deal for HON
to enter the ''smart metering'' global market......$ 204
million of pension liabilities will not make a difference.
Jackmaster-- According to the Financial Times article, what was worth remarking about these pension liabilities is that they relate to companies even Elster no longer owned and were therefore not related to the assets purchased by HON. Doesn't seem any way around picking up these liabilities in the purchase, but HON seemed to want to gloss over them in their press releases.
Look at what happened in Detroit Michigan and Wayne County Michigan with their pension liabilities. They have to funded for the long term. And if they're not, well you know what happened in Detroit and Wayne County. And you know what happened to pensions at Honeywell. They're now 401-k's. Pension liabilities can derail the purchase of a company by another company. Maybe Honeywell will convert those pensions into 401-k accounts. Big money saver for Honeywell and other big corporations, not so good for those who depended on the pension when they retire.
what is the annual % of this $ 204 million pension liability that is
booked as current payable........clearly you are not saying that the
full $ 204 million pension liability is due in 2015...?
Pension liabilities are usually long term liabilities in nature that have
a projected payout schedule that indicates, but not guarantees, the
amount of pension liability that becomes a current liability each year.
I would think every acquisition brings with it some sort of pension
liability. Also, isn't the EBITDA of Elster the payment source for
pension outlays...? If 10 % of the pension is payable each year.
Then Elster ''core earnings'' of $ 400 million annually covers the
$ 21 million annual pension liability, one way or another.
I don't understand your statement that shareholders
are on the hook for the pensions........shareholders are on the hook
Honeywell clainm that the pension liability is 4% of the purchase price. But they didn't state this until AFTER the purchase was completed. In otherwords, the stockholders are on the hook for thee pensions.
why not provide us with some number of ''the large pension liability that goes with
The fact that you make such a harsh statement about a pending transaction without
offering any numbers seems sorta disingenuous..... if you have the data sets, please
share them with us, and your source of your info.
Cote and company forgot to mention the large pension liability that goes along with this purchase. They'll probably give some excuse for not reporting this to cover their butts. Typical Honeywell.
HON bought Germany based Elster, Inc recently for $ 5.1 billion
Elster is in the ''smart metering'' business, mostly for natural gas & water/fluids.
Elster revenues last year were $ 1.8 billion
HON said it paid ''12.6 times core earnings'' for Elster, so this firm generates approx
$ 400 million of ''core earnings'' annually.
This Elster acquisition is the largest purchase by Dave Cote and its also the largest
since HON bought Allied Signal in 1999. HON released a plan in 2014 saying it plans
to dedicate $ 10 billion in capital for acquisitions, so this transaction uses about half
of HON's buying war-chest.
I have read that ''smart metering'' is a growth industry as water and energy monitoring
get more important. But is a $ 10 billion global metering business large enough to
impact HON's financials in a meaningful way....? Maybe HON needs to dedicate more
capital to this potential metering emerging frontier, if its truly a future grower...?
If HON really thinks metering is a viable business, the WSJ said they need to buy a US
and maybe a Latin America metering firm(s) as well. To me that seems like HON
will need to spend more than $ 10 billion total to build out this global metering platform.
I approve of Cote using capital to enter new growing businesses. IMO its much better
than ill timed buybacks, when stock price are high and costs of capital are so low.
I hope Cote and his team have extensively and accurately done their due diligence
that the global ''smart metering'' industry is for real when it comes to future revenue
and profit growth, worldwide. Time will tell.
If Cote bought one ''smart metering'' firm in Europe then he needs to buy other
metering firms to round out the strategy. HON needs to move the needle.
Agreed. This is not the sign of a growing company. Cutting costs to get higher EPS will have a point of deminishing returns. Where are new products, etc.?
Hon continues to do a good job taking cost out and driving value for the investors, but can they deliver any revenue growth? We have heard about new products from this management team for the past several quarters, but it doesn't seem to be doing anything for organic growth. This has been a nice stock for awhile now, but I'm not sure how much longer they can cut their way to profitability.
On a down day, the day before earnings, after hours trading has lifted HON up over 2.5%?
Yahoo won't let me post my conclusions to that.
Let's try again without them.