HONEYWELL INTERNATIONAL INC
For the period ended Jun 30, 2024. Filed Jul 25, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 25, 2024
HON$220.05+2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-25.
0000773840-24-000051
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-25.
0000773840-24-000082
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 154 current paragraphs.
69 unchanged; 30 reworded; 44 added; 13 removed; 0 previous and 11 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (44)
Current report
In the second quarter of 2024, market concerns over supply constraints due to sanctions and tariffs, along with previously low commodity prices, led to a temporary surge in the price of metals. This bullish trend on commodity pricing is easing, but we anticipate a general inflationary trend for commodities above the levels seen in the first quarter of 2024 for the foreseeable future. Slowing global growth relieved pressure on logistics freight and service capacity.
Current report
•Higher sales volumes,
Current report
•Incremental sales from recent acquisitions.
Current report
•Incremental sales from recent acquisitions.
Current report
Gross margin increased by approximately $0.4 billion and gross margin percentage increased 60 basis points to 38.8% compared to 38.2% for the same period of 2023.
Current report
Selling, general and administrative expenses increased due to higher labor costs.
Current report
Selling, general and administrative expenses increased due to the following:
Current report
Other income increased due primarily to higher interest income.
Current report
Other income increased due primarily to higher interest income.
Current report
The effective tax rate decreased 20 basis-points primarily driven by increased benefits from taxes on non-U.S. earnings.
Current report
The effective tax rate remained unchanged primarily driven by increased benefits from taxes on non-U.S. earnings, offset by incremental tax expense from tax reserve activity.
Current report
•Higher segment profit ($0.10 after tax),
Current report
•Lower repositioning and other charges ($0.07 after tax), and
Current report
•Lower share count ($0.06 after tax),
Current report
•Higher segment profit ($0.19 after tax),
Current report
•Lower repositioning and other charges ($0.12 after tax), and
Current report
•Lower share count ($0.11 after tax),
Current report
Segment profit increased $130 million and segment margin percentage decreased 60 basis points to 27.2% compared to 27.8% for the same period of 2023.
Current report
Segment profit increased $334 million and segment margin percentage increased 40 basis points to 27.7% compared to 27.3% for the same period of 2023.
Current report
Segment profit decreased $179 million and segment margin percentage decreased 130 basis points to 19.1% compared to 20.4% for the same period in 2023.
Current report
During the second quarter of 2022, our Productivity Solutions and Services business entered into a license and settlement agreement (the Agreement). Under the Agreement, we received $360 million, paid in equal quarterly installments over eight quarters, beginning with the second quarter of 2022 and ending with the first quarter of 2024. The Agreement provides each party a license to its existing patent portfolio for use by the other party’s existing products and resolved the patent-related litigation between the parties.
Current report
Segment profit increased $6 million and segment margin percentage decreased 60 basis points to 25.3% compared to 25.9% for the same period of 2023.
Current report
Sales were flat due to higher organic sales of $120 million in Building Solutions driven by higher demand for building projects and services, partially offset by lower organic sales of $152 million in Products driven by lower demand. Additionally, the acquisition of Access Solutions contributed $62 million to sales in the six months ended June 30, 2024.
Current report
Segment profit decreased $25 million and segment margin percentage decreased 90 basis points to 24.9% compared to 25.8% for the same period of 2023.
Current report
Sales increased $37 million due to higher organic sales of $72 million in Advanced Materials driven by higher demand for fluorine products, partially offset by lower organic sales of $22 million in UOP driven by lower gas processing project demand and by the unfavorable impact of foreign currency translation of $13 million.
Current report
Segment profit increased $42 million and segment margin percentage increased 200 basis points to 25.2% compared to 23.2% for the same period of 2023.
Current report
Segment profit increased $43 million and segment margin percentage increased 60 basis points to 22.6% compared to 22.0% for the same period of 2023.
Current report
47 Honeywell International Inc.
Current report
48 Honeywell International Inc.
Current report
Six months ended June 30, 2024
Current report
49 Honeywell International Inc.
Current report
50 Honeywell International Inc.
Current report
51 Honeywell International Inc.
Current report
Goodwill and Indefinite-Lived Intangible Assets Impairment Testing—The Company’s business combinations typically result in the recognition of goodwill and intangible assets. The Company generally engages an independent third-party valuation specialist for assistance in the allocation of the purchase price and determination of the fair value of goodwill and intangible assets, which involves the use of accounting estimates and assumptions based on information available at or near the acquisition date. The Company believes the accounting estimates and assumptions are reasonable based on information available at the date of acquisition through historical experience and information obtained from management of the acquired entity; however, there is inherent uncertainty in the accounting estimates as assumptions are forward looking and could be affected by future economic and market conditions.
Current report
Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to annual, or more frequent if necessary, impairment testing. In testing goodwill and indefinite-lived intangible assets, the fair value is estimated utilizing a discounted cash flow approach, including strategic and annual operating plans, adjusted for terminal value assumptions. These impairment tests involve the use of accounting estimates and assumptions, and changes to those assumptions could materially impact our financial condition or operating performance if actual results differ from such accounting estimates and assumptions. To address this uncertainty, we perform sensitivity analyses on key accounting estimates and assumptions. Once the fair value is determined, if the carrying amount exceeds the fair value, it is impaired. Any impairment is measured as the difference between the carrying amount and its fair value.
Current report
Definite-Lived Intangible Assets—The Company’s business combinations typically result in the recognition of customer relationships, patents, and trademarks, in addition to other definite-lived intangible assets. The determination of fair value for definite-lived intangible assets, useful lives (for depreciation / amortization purposes) and whether or not intangible assets are impaired involves the use of accounting estimates and assumptions. The assumptions used in developing the accounting estimates may include business growth rates, sales volume, selling prices and costs, cash flows, and the discount rate selected and changes to those assumptions could materially impact our financial condition or operating performance if actual results differ from such estimates and assumptions.
Current report
We evaluate the recoverability of the carrying amount of our definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount of a definite-lived intangible asset group may not be fully recoverable. The principal factors in considering when to perform an impairment review are as follows:
Current report
•Significant under-performance (i.e., declines in sales, earnings, or cash flows) of a business or product line in relation to expectations;
Current report
•Annual operating plans or strategic plan outlook that indicates an unfavorable trend in operating performance of a business or product line;
Current report
•Significant negative industry or economic trends; or
Showing the first 40 of 44 passages. Open the source sections for the rest.
Removed paragraphs (13)
Previous report
We continue to monitor the impacts of ongoing macroeconomic conditions and geopolitical events. In the first quarter of 2024, material inflation continued to moderate with some preliminary signs of stabilization across most industrial sectors. Slowing global growth relieved pressure on logistics freight and service capacity and provided supply chain redundancy. We continue to leverage short-term and long-term mitigation strategies to reduce the impact of supply chain disruptions, including digital solutions to assist in identifying and managing shortages.
Previous report
32 Honeywell International Inc.
Previous report
33 Honeywell International Inc.
Previous report
Other income declined slightly.
Previous report
The effective tax rate increased as a result of incremental tax expense from reduced tax reserve activity, partially offset by increased tax benefits from employee-share based compensation and other accrued taxes, representing a 20 basis-point increase.
Previous report
•Higher segment profit ($0.09 after tax),
Previous report
•Lower repositioning and other charges ($0.06 after tax),
Previous report
•Higher interest income ($0.03 after tax), and
Previous report
•Lower share count ($0.05 after tax),
Previous report
Segment profit increased $204 million and segment margin percentage increased 150 basis points to 28.1% compared to 26.6% for the same period of 2023.
Previous report
Segment profit decreased $33 million and segment margin percentage decreased 120 basis points to 24.0% compared to 25.2% for the same period of 2023.
Previous report
Segment profit increased $2 million and segment margin percentage decreased 70 basis points to 19.8% compared to 20.5% for the same period of 2023.
Previous report
Three months ended March 31, 2024
Reworded paragraphs (30)
Previous wording
The following Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of Honeywell International Inc. and its consolidated subsidiaries (Honeywell, we, us, our, or the Company) for the three months ended March 31, 2024. The financial information as of March 31, 2024, should be read in conjunction with the Consolidated Financial Statements for the year ended December 31, 2023, contained in our 2023 Annual Report on Form 10-K. See Note 3 Acquisitions and Divestitures of Notes to Consolidated Financial Statements for a discussion of acquisition and divestiture activity during the three months ended March 31, 2024. Certain prior year amounts are reclassified to conform to the current year presentation.
Current wording
The following Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of Honeywell International Inc. and its consolidated subsidiaries (Honeywell, we, us, our, or the Company) for the three and six months ended June 30, 2024. The financial information as of June 30, 2024, should be read in conjunction with the Consolidated Financial Statements for the year ended December 31, 2023, contained in our 2023 Annual Report on Form 10-K. See Note 3 Acquisitions and Divestitures of Notes to Consolidated Financial Statements for a discussion of acquisition and divestiture activity during the six months ended June 30, 2024. Certain prior year amounts are reclassified to conform to the current year presentation.
Previous wording
Global conflicts continue to create volatility in global financial and energy markets and contribute to supply chain shortages adding to the inflationary pressures in the global economy. We actively collaborate with our suppliers to minimize impacts of supply shortages on our manufacturing capabilities.
Current wording
We continue to monitor the impacts of ongoing macroeconomic conditions and geopolitical events. Global conflicts continue to create volatility in global financial and energy markets and contribute to supply chain shortages adding to the inflationary pressures in the global economy. We continue to actively collaborate with our suppliers to minimize impacts of supply shortages on our manufacturing capabilities.
Previous wording
Our mitigation strategies include pricing actions, longer term planning for constrained materials, new supplier development, material supply tracking tools, and direct engagement with key suppliers to meet customer demand. Our relationships with primary and secondary suppliers allow us to reliably source key components and raw materials. In areas where we cannot procure key components or raw materials, we consider altering existing products and developing new products to satisfy customer needs. Alterations to existing products and the development of new products undergo product quality controls and engineering qualification prior to releasing to our customers. In addition, we assist certain suppliers facing manufacturing challenges by committing our own resources to their sites and facilities. We believe these mitigation strategies enable us to reduce supply risk, accelerate new product innovation, and expand our penetration in the markets we serve. Additionally, due to the strenuous quality controls and product qualification we perform on a new or altered product, we do not expect these mitigation strategies to impact product quality or reliability.
Current wording
Our mitigation strategies include pricing actions and hedging strategies, longer term planning for constrained materials, new supplier development, material supply tracking tools, and direct engagement with key suppliers to meet customer demand. Our relationships with primary and secondary suppliers allow us to reliably source key components and raw materials, which include considering altering existing products, developing new products, and committing our own resources to assist certain suppliers. We believe these mitigation strategies enable us to reduce supply risk, accelerate new product innovation, and expand our penetration in the markets we serve. Additionally, due to the strenuous quality controls and product qualification we perform on a new or altered product, we do not expect these mitigation strategies to impact product quality or reliability.
Previous wording
Net sales increased due to increased pricing and price adjustments to offset inflation.
Current wording
•Increased pricing and price adjustments to offset inflation, and
Previous wording
•Higher direct and indirect material costs and higher labor costs of approximately $0.2 billion or 4%,
Current wording
•Higher direct and indirect material costs and higher labor costs of approximately $0.3 billion or 3%,
Previous wording
•Partially offset by higher productivity of approximately $0.1 billion or 2%.
Current wording
•Partially offset by higher productivity of approximately $0.1 billion or 1%.
Previous wording
Gross margin increased by approximately $0.2 billion and gross margin percentage increased 70 basis points to 38.7% compared to 38.0% for the same period of 2023.
Current wording
Gross margin increased by approximately $0.2 billion and gross margin percentage increased 40 basis points to 38.9% compared to 38.5% for the same period of 2023.
Previous wording
Selling, general and administrative expenses were largely unchanged.
Current wording
Research and development expenses were largely unchanged.
Previous wording
•Partially offset by higher interest expense (loss of $0.06 after tax).
Current wording
•Partially offset by higher interest expense (loss of $0.07 after tax).
Previous wording
Sales increased $558 million due to higher organic sales of $237 million in Commercial Aviation Aftermarket driven by higher sales volumes in air transport due to an increase in flight hours, higher organic sales of $187 million in Defense and Space driven by higher sales volumes due to increased shipments, and higher organic sales of $132 million in Commercial Aviation Original Equipment driven by higher sales volumes due to increased shipments.
Current wording
Sales increased $550 million due to higher organic sales of $267 million in Commercial Aviation Aftermarket driven by higher sales volumes in air transport due to an increase in flight hours and higher organic sales of $225 million in Defense and Space driven by higher sales volumes due to increased shipments.
Previous wording
Segment profit decreased $109 million and segment margin percentage decreased 200 basis points to 16.8% compared to 18.8% for the same period in 2023.
Current wording
Segment profit decreased $67 million and segment margin percentage decreased 90 basis points to 19.0% compared to 19.9% for the same period in 2023.
Previous wording
Sales decreased $325 million due to lower organic sales of $254 million in Warehouse and Workflow Solutions driven by lower demand for projects and lower organic sales of $55 million in Sensing and Safety Technologies driven by lower demand for sensing products.
Current wording
Sales decreased $546 million due to lower organic sales of $419 million in Warehouse and Workflow Solutions driven by lower demand for projects and lower organic sales of $89 million in Sensing and Safety Technologies driven by lower demand for sensing products.
Previous wording
Sales decreased $61 million due to lower organic sales of $89 million in Products driven by lower demand partially offset by higher organic sales of $38 million in Building Solutions driven by higher demand in building projects.
Current wording
Sales increased $61 million due to higher organic sales of $82 million in Building Solutions driven by higher demand for building projects and services, partially offset by lower organic sales of $63 million in Products driven by lower demand. Additionally, the acquisition of Access Solutions contributed $62 million to sales in the three months ended June 30, 2024.
Previous wording
Sales increased $64 million due to higher organic sales of $55 million in Advanced Materials driven by higher demand for fluorine products.
Current wording
Sales increased $101 million due to higher organic sales of $127 million in Advanced Materials driven by higher demand for fluorine products, partially offset by the unfavorable impact of foreign currency translation of $18 million.
Previous wording
See Note 5 Repositioning and Other Charges of Notes to Consolidated Financial Statements for a discussion of our repositioning actions and related charges incurred in the three months ended March 31, 2024, and 2023. Cash spending related to our repositioning actions was $50 million in the three months ended March 31, 2024, and was funded through operating cash flows.
Current wording
See Note 5 Repositioning and Other Charges of Notes to Consolidated Financial Statements for a discussion of our repositioning actions and related charges incurred in the six months ended June 30, 2024, and 2023. Cash spending related to our repositioning actions was $109 million in the six months ended June 30, 2024, and was funded through operating cash flows.
Previous wording
As of March 31, 2024, and December 31, 2023, we held $12.0 billion and $8.1 billion, respectively, of cash and cash equivalents, including our short-term investments. We monitor the third-party depository institutions that hold our cash and cash equivalents on a daily basis. Our emphasis is primarily safety of principal and secondarily maximizing yield of those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one counterparty.
Current wording
As of June 30, 2024, and December 31, 2023, we held $9.8 billion and $8.1 billion, respectively, of cash and cash equivalents, including our short-term investments. We monitor the third-party depository institutions that hold our cash and cash equivalents on a daily basis. Our emphasis is primarily safety of principal and secondarily maximizing yield of those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one counterparty.
Previous wording
As of March 31, 2024, $5.7 billion of the Company’s cash, cash equivalents, and short-term investments were held by non-U.S. subsidiaries. We do not have material amounts related to any jurisdiction subject to currency control restrictions that impact our ability to access and repatriate such amounts. Under current laws, we do not expect taxes on repatriation or restrictions on amounts held outside of the U.S. to have a material effect on our overall liquidity.
Current wording
As of June 30, 2024, $6.1 billion of the Company’s cash, cash equivalents, and short-term investments were held by non-U.S. subsidiaries. We do not have material amounts related to any jurisdiction subject to currency control restrictions that impact our ability to access and repatriate such amounts. Under current laws, we do not expect taxes on repatriation or restrictions on amounts held outside of the U.S. to have a material effect on our overall liquidity.
Previous wording
Net cash provided by operating activities was $448 million, driven by $1,463 million of Net income attributable to Honeywell, adjusted for $291 million of depreciation and amortization, partially offset by a $603 million decrease in Accrued liabilities, driven by a decrease in accrued employee compensation and benefits costs, and a $381 million decrease in Accounts payable, due to decreased material receipts.
Current wording
Net cash provided by operating activities was $1,819 million, driven by $3,007 million of Net income attributable to Honeywell, adjusted for $600 million of depreciation and amortization, partially offset by $583 million of other operating activities, driven by higher tax payments, $471 million decrease in Accrued liabilities, driven by a decrease in accrued employee compensation and benefits costs, $423 million decrease in Accounts payable, due to increased disbursements, and $295 million of pension and other postretirement income.
Previous wording
Net cash used for investing activities was $273 million, driven by $233 million of capital expenditures.
Current wording
Net cash used for investing activities was $5,405 million, driven by $4,913 million of cash paid for acquisitions and $492 million of capital expenditures.
Previous wording
Net cash provided by financing activities was $3,696 million, driven by $5,710 million of proceeds from issuance of long-term debt primarily to fund the Carrier acquisition, partially offset by $703 million of cash dividends paid, $671 million of repurchases of common stock, and $573 million of payments of long-term debt.
Current wording
Net cash provided by financing activities was $5,298 million, driven by $5,710 million of proceeds from issuance of long-term debt primarily to fund the Access Solutions acquisition and $2,504 million of net proceeds from issuance of commercial paper, partially offset by $1,446 million of cash dividends paid and $1,200 million of repurchases of common stock.
Previous wording
Three months ended March 31, 2024 compared with three months ended March 31, 2023
Current wording
Six months ended June 30, 2024 compared with six months ended June 30, 2023
Previous wording
Net cash provided by operating activities increased by $1,232 million due to the $1,325 million payment made by the Company pursuant to the NARCO Amended Buyout Agreement in 2023, partially offset by $283 million decrease of noncash adjustments, driven by a $222 million decline in deferred income taxes.
Current wording
Net cash provided by operating activities increased by $1,243 million due to the $1,325 million payment made by the Company pursuant to the NARCO Amended Buyout Agreement in 2023, partially offset by $328 million decrease of noncash adjustments, driven by $232 million decline in deferred income taxes and $106 million decline in repositioning and other charges.
Previous wording
Net cash used for investing activities increased by $244 million due to a $243 million net increase in investments.
Current wording
Net cash used for investing activities increased by $4,696 million due to a $4,252 million increase in cash paid for acquisitions and $479 million net increase in investments.
Previous wording
Net cash provided by financing activities increased by $5,669 million due to a $5,710 million increase of proceeds from issuance of long-term debt, $790 million decrease in payments of long-term debt, and $107 million increase in proceeds from the issuance of common stock, partially offset by $1,058 million decrease in net proceeds of commercial paper.
Current wording
Net cash provided by financing activities increased by $6,161 million due to a $2,744 million increase in proceeds from issuance of long-term debt, $2,434 million increase in net proceeds of commercial paper, and $779 million decrease in payments of long-term debt.
Previous wording
In addition to our normal operating cash requirements, we expect our principal future cash requirements will be to fund capital expenditures, share repurchases, dividends, strategic acquisitions, and debt repayments. On April 24, 2023, the Board of Directors authorized the repurchase of up to $10 billion of Honeywell common stock, including approximately $2.1 billion of remaining availability under the previously announced $10 billion share repurchase authorization. During the three months ended March 31, 2024, we repurchased common stock of $671 million. Refer to the section titled Liquidity and Capital Resources of our 2023 Form 10-K for a discussion of our expected capital expenditures, share repurchases, mergers and acquisitions activity, and dividends for 2024.
Current wording
In addition to our normal operating cash requirements, we expect our principal future cash requirements will be to fund capital expenditures, share repurchases, dividends, strategic acquisitions, and debt repayments. On April 24, 2023, the Board of Directors authorized the repurchase of up to $10 billion of Honeywell common stock, including approximately $2.1 billion of remaining availability under the previously announced $10 billion share repurchase authorization. During the six months ended June 30, 2024, we repurchased common stock of $1.2 billion. Refer to the section titled Liquidity and Capital Resources of our 2023 Form 10-K for a discussion of our expected capital expenditures, share repurchases, mergers and acquisitions activity, and dividends for 2024.
Previous wording
We continue to assess the relative strength of each business in our portfolio as to strategic fit, market position, profit, and cash flow contribution in order to identify target investment and acquisition opportunities in order to upgrade our combined portfolio. We identify acquisition candidates that will further our strategic plan and strengthen our existing core businesses. We also identify businesses that do not fit into our long-term strategic plan based on their market position, relative profitability, or growth potential. These businesses are considered for potential divestiture, restructuring, or other repositioning actions, subject to regulatory constraints.
Current wording
We continue to assess the relative strength of each business in our portfolio as to strategic fit, market position, profit, and cash flow contribution in order to identify target investment and acquisition opportunities in order to upgrade our combined portfolio. We identify acquisition candidates that will further our strategic plan and strengthen our existing core businesses. In the second quarter of 2024, we acquired Access Solutions for total consideration of $4.9 billion, net of cash acquired, as well as announced our intention to acquire CAES Systems Holdings LLC for approximately $1.9 billion and Air Products' liquefied natural gas process technology and equipment business for approximately $1.8 billion. We also identify businesses that do not fit into our long-term strategic plan based on their market position, relative profitability, or growth potential. These businesses are considered for potential divestiture, restructuring, or other repositioning actions, subject to regulatory constraints. See Note 3 Acquisitions and Divestitures of Notes to Consolidated Financial Statements for additional discussion
Previous wording
In early 2023, we made payments of approximately $1.5 billion in connection with the NARCO Buyout and UOP Matters. Pursuant to the NARCO Amended Buyout Agreement, we received proceeds of $275 million from the HWI Sale during the year ended December 31, 2023, and may receive additional consideration in future periods if certain conditions under the definitive sale agreement for the HWI Sale are met. These payments and receipts have not materially impacted our liquidity position. See Note 12 Fair Value Measurements of Notes to Consolidated Financial Statements for additional discussion related to the fair value of future proceeds from the HWI Sale.
Current wording
In early 2023, we made payments of approximately $1.5 billion in connection with the NARCO Buyout and UOP Matters. Pursuant to the NARCO Amended Buyout Agreement, we received proceeds of $275 million from the HWI Sale during the year ended December 31, 2023. During the three and six months ended June 30, 2024, we received $3 million of proceeds from the HWI Sale and may receive additional consideration in future periods if certain conditions under the definitive sale agreement for the HWI Sale are met. These payments and receipts have not materially impacted our liquidity position. See Note 12 Fair Value Measurements of Notes to Consolidated Financial Statements for additional discussion related to the fair value of future proceeds from the HWI Sale.
Previous wording
Based on past performance and current expectations, we believe that our operating cash flows will be sufficient to meet our future operating cash needs. Our available cash, committed credit lines, and access to the public debt and equity markets provide additional sources of short-term and long-term liquidity to fund current operations, debt maturities, and future investment opportunities.
Current wording
Based on past performance and current expectations, we believe that our operating cash flows will be sufficient to meet our future operating cash needs. Our available cash, committed credit lines, and access to the public debt and equity markets provide additional sources of short-term and long-term liquidity to fund current operations, debt maturities, and future investment opportunities. During the first quarter of 2024, our net cash provided by financing activities included proceeds of $5.7 billion from the issuance of long-term debt primarily to fund the Access Solutions acquisition.
Previous wording
We leverage a variety of debt instruments to manage our overall borrowing costs. As of March 31, 2024, and December 31, 2023, our total borrowings were $25.3 billion and $20.4 billion, respectively.
Current wording
We leverage a variety of debt instruments to manage our overall borrowing costs. As of June 30, 2024, and December 31, 2023, our total borrowings were $27.9 billion and $20.4 billion, respectively.
Previous wording
There have been no material changes to our Critical Accounting Estimates presented in our 2023 Annual Report on Form 10-K. For a discussion of the Company’s Critical Accounting Estimates, see the section titled Critical Accounting Estimates in our 2023 Annual Report on Form 10-K.
Current wording
Other than as noted below, there have been no material changes to our Critical Accounting Estimates presented in our 2023 Annual Report on Form 10-K. For a discussion of the Company’s Critical Accounting Estimates, see the section titled Critical Accounting Estimates in our 2023 Annual Report on Form 10-K.
Rearranged current paragraphs (11)
Current report — wording carried from elsewhere
Net sales increased due to the following:
Current report — wording carried from elsewhere
Net sales increased due to the following:
Current report — wording carried from elsewhere
•Increased pricing and price adjustments to offset inflation, and
Current report — wording carried from elsewhere
Cost of products and services sold increased due to higher direct and indirect material costs and higher labor costs.
Current report — wording carried from elsewhere
•Higher labor costs of approximately $0.2 billion or 8%,
Current report — wording carried from elsewhere
•Partially offset by higher productivity of approximately $0.1 billion or 4%.
Current report — wording carried from elsewhere
Earnings per share of common stock–assuming dilution increased due to the following:
Current report — wording carried from elsewhere
•Partially offset by higher interest expense (loss of $0.13 after tax).
Current report — wording carried from elsewhere
Sales increased $1,108 million due to higher organic sales of $504 million in Commercial Aviation Aftermarket driven by higher sales volumes in air transport due to an increase in flight hours and higher organic sales of $412 million in Defense and Space driven by higher sales volumes due to increased shipments.
Current report — wording carried from elsewhere
Sales decreased $221 million due to lower organic sales of $165 million in Warehouse and Workflow Solutions driven by lower demand for projects and lower organic sales of $49 million in Sensing and Safety Technologies driven by lower demand for personal protective equipment.
Current report — wording carried from elsewhere
•A $1.5 billion second 364-day credit agreement (the Second 364-Day Credit Agreement) with a syndicate of banks, dated as of July 2, 2024. Amounts borrowed under the Second 364-Day Credit Agreement are required to be repaid no later than July 1, 2025, unless (i) we elect to convert all then outstanding amounts into a term loan, upon which such amounts shall be repaid in full on July 1, 2026, or (ii) the Second 364-Day Credit Agreement is terminated earlier pursuant to its terms. As of July 25, 2024, there were no outstanding borrowings under our Second 364-Day Credit Agreement.