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5. Honeywell International Inc. Business Report FY ended Dec. 2016

Honeywell International Inc. Business Report FY ended Dec. 2016

Factors
1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2016 increased by 1.9% over the previous year to USD 39,302 million. The increase in net sales was primarily due to positive effects from the Company’s acquisitions and divestitures and was partially offset by decreased sales volumes and negative effects from foreign currency translation.

2) Transportation Systems Division sales
-Sales in the Transportation Systems unit with the Aerospace segment in the fiscal year ended December 31, 2016 totaled USD 3,055 million, an increase of 3.2% over the previous year. The increase in sales was caused by new platform launches and increased global penetration of gasoline turbochargers.

Business Partnership

-The Company announced that it has entered into a supply agreement and technology license with Indian manufacturer Navin Flouine International Limited (NFIL) to produce Honeywell Solstice yf, an automobile refrigerant with a global warming potential of less than 1. The Company will license its proprietary process technologies to produce the refrigerant to NFIL, which will manufacture Solstice yf in India exclusively for the Company. Small-scale production is expected to begin by the end of 2016. (From a press release on March 22, 2016)

Contracts

-The Company’s Transportation System Division has over 200 local engineers and development staff working in China. Its turbocharger technologies are used on the Baojun 560 and the Baojun 730 1.5T from SAIC GM Wuling. The turbochargers are also used in models from Jiangling Motors, Anhui Jianghuai Automobile, Changan Automobile, and Honda. (From news releases issued by multiple sources on December 5, 2016)

-The Company has created a new two-stage electrical compressor used by Honda Motor Co., Ltd. for its hydrogen-powered Clarity Fuel Cell vehicle. (From a press release on June 14, 2016)

Outlook

-The Company announced that its Transportation Systems Forecast anticipates OEMs adopting turbocharging technology at a rate of 48% of annual global sales by 2021, up 9% from 2016. The projected increase in annual sales of vehicles with a turbocharger from 38 million in 2016 to 52 million in 2021 equates to a 35% increase, or 6% CAGR (compounded annual growth rate) compared with a 2% CAGR for all global industry sales. This annual sales estimate will add more than 232 million turbocharged vehicles globally between 2017 and 2021, an increase of 35% from 2016. As it anticipates the move from 12-volt battery systems to 48-volt systems, the Company forecasts a greater number of vehicles utilizing electric e-chargers and e-turbos to help improve the efficiency and performance of combustion engines in mild hybrid vehicles. Electrics and hybrids are expected to grow from 3 million vehicles in 2016 to a total of 16 million by 2021. Mild hybrids are expected to account for 46% of electrified vehicles, while full hybrids and pure electric vehicles are expected to account for 40% and 14%, respectively. (From a press release on December 8, 2016)

R&D Structure

-The Company has research and development activities in the U.S., Europe, India and China.

-As of December 31, 2016, the Company has 23,000 engineers working in research and development, including 11,000 software developers.

R&D Facilities

-As of December 31, 2016, the Company has approximately 150 global research and engineering facilities.

-The Company announced plans to invest USD 100 million to expand its Asia Pacific regional headquarters and research and development facilities in Shanghai by purchasing a new building in the Zhangjiang High-Tech Park. The new ten-story building will provide a more than 50% increase in area for its R&D facilities and office space. (From a press release on May 31, 2016)

Product Developments

IAA Hannover 2016
-The Company displayed a number of turbocharger technologies at IAA Hannover 2016:

• Serial TwoStage Turbocharger: The next-generation turbocharger shifts from matching two single-stage turbochargers to a two-stage design. The two-stage design enables a smaller diameter turbine wheel, as well as smaller diameter compressor wheels, all of which improve efficiency.
• Axial TwoStage System: The addition of an axial turbine wheel in the two-stage system provides improved performance and efficiency for heavy-duty long haul trucks.
• Air System for Turbo Compounding: The turbocharger features sector-divided turbine housing with fixed vane nozzles to improve exhaust flow distribution, and a vaned diffuser to improve compressor performance. The new design also supports powertrains which use a waste heat recovery system by including a secondary turbine to draw additional energy from exhaust gases and applying the energy to the driveline.

(From a press release on September 21, 2016)

Vienna Motor Symposium 2016
-The Company is showcasing its new boosting innovations and software solutions for gasoline, diesel and hydrogen fuel cells at the Vienna Motor Symposium 2016, including:

• TwoStage Electric Compressor for Fuel Cells: An electric motor-driven compressor with oil-less foil bearing to boost fuel cells and increase power output or reduce fuel cell stack volume, weight and cost.
• Variable Nozzle Turbine (VNT) Turbo for ECO Gasoline applications: An enabler for heavy Millerization which offers outstanding low end torque and fuel economy from a gasoline engine.

(From a press release on April 28, 2016)

Patents

-Through the fiscal year ended December 31, 2016, the Company has approximately 38,000 patents granted or pending.

-The Company expects to invest USD 1.1 billion in the fiscal year ending December 31, 2017 in capital expenditures. The investment will be primarily dedicated towards growth, production and capacity expansions, cost reduction, maintenance, and infrastructure replacement.

Investments in U.S.

-The Company and its key suppliers are investing approximately USD 300 million to increase global production capacity of Honeywell Solstice yf, an automotive refrigerant with a global warming potential of less than one. A percentage of the investment will be used in the construction of a new manufacturing plant using new process technology at the Company's location in Geismar, Louisiana, its existing refrigerant manufacturing site. (From a press release on March 22, 2016)