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HONEYWELL DELIVERS STRONG SECOND QUARTER RESULTS AND BEATS EARNINGS GUIDANCE; UPDATES 2024 OUTLOOK

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Sales of $9.6 Billion, Reported Sales Up 5%, Organic1 Sales Up 4%, Achieving the High End of Previous GuidanceEarnings Per Share of $2.36 and Adjusted Earnings Per Share1 of $2.49, Above High End of Previous GuidanceOrders Up 4%, Led by Strength in Our Building Automation and Energy and Sustainability Solutions BusinessesDeployed $6.4 Billion of Capital to M&A, Dividends, Share Repurchases, and Capital Expenditures, Including Closing the $5 Billion Acquisition of Access Solutions, and Announcing the $1.9 Billion Acquisition of CAES Systems Holdings and the $1.8 Billion Acquisition of Air Products’ LNG Business

CHARLOTTE, N.C., July 25, 2024 /PRNewswire/ — Honeywell (NASDAQ: HON) today announced results for the second quarter that met or exceeded the company’s guidance. The company also updated its full-year sales, segment margin2, adjusted earnings per share2,3, and cash flow guidance ranges.

The company reported second-quarter year-over-year sales growth of 5% and organic1 sales growth of 4%, led by double digit organic1 sales growth in defense and space, commercial aviation, and building solutions. Operating income grew 5% and operating margin expanded 10 basis points to 20.7%, while segment profit1 grew 4% led by Aerospace Technologies. Segment margin1 contraction of 10 basis points was above the midpoint of our guidance range. Earnings per share for the second quarter was $2.36, up 6% year over year, and adjusted earnings per share1 was $2.49, up 8% year over year, above the high end of our guidance range. Operating cash flow was $1.4 billion and free cash flow1 was $1.1 billion, approximately flat year over year.

“Honeywell delivered a strong second quarter, once again meeting or exceeding guidance across all metrics while maneuvering through a dynamic operating environment,” said Vimal Kapur, chairman and chief executive officer of Honeywell. “While Aerospace continues to lead our growth, we are seeing broader participation across our portfolio, with three of our four segments contributing positive growth for the quarter. All four segments grew sequentially in the quarter as well, giving us further confidence in our expectation of a second half organic growth acceleration.”

Kapur continued, “We also made significant progress in our capital deployment strategy, deploying $6.4 billion to M&A, dividends, share repurchases, and capex, highlighted by the closing of our $5 billion acquisition of Access Solutions. We also recently announced two additional deals – the $1.9 billion acquisition of CAES Systems and the $1.8 billion acquisition of Air Products’ LNG process technology and equipment business. We continue to make significant progress on my key priorities for Honeywell as we accelerate our alignment to three powerful megatrends – automation, the future of aviation, and energy transition, all underpinned by digitalization. Together, our technologically differentiated portfolio and world-class Honeywell Accelerator operating system are poised to further unlock incremental value and enable us to achieve our long-term financial framework.”

As a result of the company’s second-quarter performance and management’s outlook for the remainder of the year, including the impact of recently announced acquisitions, Honeywell updated its full-year sales, segment margin2, adjusted earnings per share2,3, and cash flow1 guidance. Full-year sales are now expected to be $39.1 billion to $39.7 billion with organic1 sales growth in the range of 5% to 6%. Segment margin2 is now expected to be in the range of 23.3% to 23.5% with segment margin contraction2 of 20 basis points to flat year over year. Adjusted earnings per share2,3 is now expected to be in the range of $10.05 to $10.25, up 6% to 8% year over year. Operating cash flow is now expected to be in the range of $6.6 billion to $7.0 billion, with free cash flow1 of $5.5 billion to $5.9 billion. A summary of the company’s full-year guidance can be found in Table 1.

Second-Quarter Performance

Honeywell sales for the second quarter were up 5% year over year on a reported basis and 4% on an organic1 basis year over year. The second-quarter financial results can be found in Tables 2 and 3.

Aerospace Technologies sales for the second quarter increased 16% on an organic1 basis year over year, the eighth consecutive quarter of double-digit organic growth, on sustained strength in both commercial aviation and defense and space. Commercial aviation was led by 17% growth in aftermarket sales as global flight activity continued to rise. Commercial original equipment sales once again grew double digits on increased shipset deliveries, particularly in air transport. Defense and space grew 19% year over year as sustained demand from the current geopolitical climate and further supply chain improvements enabled us to convert on our robust backlog. Segment margin contracted 60 basis points year over year to 27.2%, driven by mix pressure in original equipment, partially offset by commercial excellence net of inflation.

Industrial Automation sales for the second quarter decreased 8% on an organic1 basis year over year. Sales declines were primarily driven by volume softness in warehouse and workflow solutions. While sales declined in productivity solutions and services overall, they were up year over year and sequentially excluding the impact of payments under the license and settlement agreement that ended in the first quarter. Process solutions sales grew 1% in the second quarter as continued double-digit growth in aftermarket services was partially offset by softness in thermal solutions and smart energy. Sales in our sensing and safety technologies business declined year over year, but both orders and sales improved sequentially. Segment margin contracted 90 basis points to 19.0% due to lower volume leverage and the end of payments under the license and settlement agreement.

Building Automation sales for the second quarter increased 1% on an organic1 basis year over year and increased 10% sequentially including one month of benefit from the acquisition of our access solutions business. Building solutions delivered another solid quarter, growing 14% organically, as both projects and services grew double digits. The ongoing strength in building solutions was mostly offset by declines in building products, primarily driven by lower year over year volumes in fire and building management systems; however, both businesses saw improved sales quarter over quarter. Segment margin improved sequentially for the second consecutive quarter but contracted 60 basis points year over year to 25.3%, due to product mix headwinds and cost inflation, partially offset by productivity actions and commercial excellence.

Energy and Sustainability Solutions sales for the second quarter grew 3% on an organic1 basis year over year. Advanced materials once again led ESS with 8% sales growth, led by continued strength in fluorine products. UOP sales declined 4% in the quarter as a result of previously communicated difficult year-over-year comps from large gas processing equipment projects, partially offset by growth in refining catalysts and aftermarket services. Segment margin expanded 200 basis points to 25.2%, primarily driven by productivity actions.

Conference Call Details

Honeywell will discuss its second-quarter results and full-year 2024 guidance during an investor conference call starting at 8:30 a.m. Eastern Time today. A live webcast of the investor call as well as related presentation materials will be available through the Investor Relations section of the company’s website (www.honeywell.com/investor). A replay of the webcast will be available for 30 days following the presentation.

TABLE 1: FULL-YEAR 2024 GUIDANCE2

Previous Guidance

Current Guidance

Sales

$38.5B – $39.3B

$39.1B – $39.7B

Organic1 Growth

4% – 6%

5% – 6%

Segment Margin

23.8% – 24.1%

23.3% – 23.5%

Expansion

Up 30 – 60 bps

Down 20 – Flat bps

Adjusted Earnings Per Share3

$10.15 – $10.45

$10.05 – $10.25

Adjusted Earnings Growth3

7% – 10%

6% – 8%

Operating Cash Flow

$6.7B – $7.1B

$6.6B – $7.0B

Free Cash Flow1

$5.6B – $6.0B

$5.5B – $5.9B

 

TABLE 2: SUMMARY OF HONEYWELL FINANCIAL RESULTS

2Q 2024

2Q 2023

Change

Sales

$9,577

$9,146

5 %

Organic1 Growth

4 %

Operating Income Margin

20.7 %

20.6 %

10 bps

Segment Profit1

$2,199

$2,113

4 %

Segment Margin1

23.0 %

23.1 %

-10 bps

Earnings Per Share

$2.36

$2.22

6 %

Adjusted Earnings Per Share1

$2.49

$2.30

8 %

Operating Cash Flow

$1,371

$1,360

1 %

Free Cash Flow1

$1,112

$1,127

(1 %)

 

TABLE 3: SUMMARY OF SEGMENT FINANCIAL RESULTS

AEROSPACE TECHNOLOGIES

2Q 2024

2Q 2023

Change

Sales

$3,891

$3,341

16 %

Organic1 Growth

16 %

Segment Profit

$1,060

$930

14 %

Segment Margin

27.2 %

27.8 %

-60 bps

INDUSTRIAL AUTOMATION

Sales

$2,506

$2,727

(8 %)

Organic1 Growth

(8 %)

Segment Profit

$477

$544

(12 %)

Segment Margin

19.0 %

19.9 %

-90 bps

BUILDING AUTOMATION

Sales

$1,571

$1,510

4 %

Organic1 Growth

1 %

Segment Profit

$397

$391

2 %

Segment Margin

25.3 %

25.9 %

-60 bps

ENERGY AND SUSTAINABILITY SOLUTIONS

Sales

$1,604

$1,567

2 %

Organic1 Growth

3 %

Segment Profit

$405

$363

12 %

Segment Margin

25.2 %

23.2 %

200 bps

1

See additional information at the end of this release regarding non-GAAP financial measures.

2

Segment margin and adjusted EPS are non-GAAP financial measures. Management cannot reliably predict or estimate, without unreasonable effort, the impact and timing on future operating results arising from items excluded from segment margin or adjusted EPS. We therefore, do not present a guidance range, or a reconciliation to, the nearest GAAP financial measures of operating margin or EPS.

3

Adjusted EPS and adjusted EPS V% guidance excludes items identified in the non-GAAP reconciliation of adjusted EPS at the end of this release, and any potential future one-time items that we cannot reliably predict or estimate such as pension mark-to-market.

Honeywell is an integrated operating company serving a broad range of industries and geographies around the world. Our business is aligned with three powerful megatrends – automation, the future of aviation, and energy transition – underpinned by our Honeywell Accelerator operating system and Honeywell Connected Enterprise integrated software platform. As a trusted partner, we help organizations solve the world’s toughest, most complex challenges, providing actionable solutions and innovations that help make the world smarter, safer, and more sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom

Honeywell uses our Investor Relations website, www.honeywell.com/investor, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media.

We describe many of the trends and other factors that drive our business and future results in this release. Such discussions contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are those that address activities, events, or developments that management intends, expects, projects, believes or anticipates will or may occur in the future. They are based on management’s assumptions and assessments in light of past experience and trends, current economic and industry conditions, expected future developments and other relevant factors, many of which are difficult to predict and outside of our control. They are not guarantees of future performance, and actual results, developments and business decisions may differ significantly from those envisaged by our forward-looking statements. We do not undertake to update or revise any of our forward-looking statements, except as required by applicable securities law. Our forward-looking statements are also subject to material risks and uncertainties, including ongoing macroeconomic and geopolitical risks, such as lower GDP growth or recession, capital markets volatility, inflation, and certain regional conflicts, that can affect our performance in both the near- and long-term. In addition, no assurance can be given that any plan, initiative, projection, goal, commitment, expectation, or prospect set forth in this release can or will be achieved. These forward-looking statements should be considered in light of the information included in this release, our Form 10-K and other filings with the Securities and Exchange Commission. Any forward-looking plans described herein are not final and may be modified or abandoned at any time.

This release contains financial measures presented on a non-GAAP basis. Honeywell’s non-GAAP financial measures used in this release are as follows:

Segment profit, on an overall Honeywell basis;Segment profit margin, on an overall Honeywell basis;Organic sales growth;Free cash flow; andAdjusted earnings per share.

Management believes that, when considered together with reported amounts, these measures are useful to investors and management in understanding our ongoing operations and in the analysis of ongoing operating trends. These measures should be considered in addition to, and not as replacements for, the most comparable GAAP measure. Certain measures presented on a non-GAAP basis represent the impact of adjusting items net of tax. The tax-effect for adjusting items is determined individually and on a case-by-case basis. Refer to the Appendix attached to this release for reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures.

Honeywell International Inc.

Consolidated Statement of Operations (Unaudited)

(Dollars in millions, except per share amounts)

Three Months Ended
June 30,

Six Months Ended
June 30,

2024

2023

2024

2023

Product sales

$    6,477

$    6,441

$  12,740

$  12,751

Service sales

3,100

2,705

5,942

5,259

Net sales

9,577

9,146

18,682

18,010

Costs, expenses and other

Cost of products sold1

4,247

4,133

8,282

8,201

Cost of services sold1

1,609

1,493

3,157

2,923

Total Cost of products and services sold

5,856

5,626

11,439

11,124

Research and development expenses

382

375

742

732

Selling, general and administrative expenses1

1,361

1,262

2,663

2,579

Other (income) expense

(246)

(208)

(477)

(468)

Interest and other financial charges

250

187

470

357

Total costs, expenses and other

7,603

7,242

14,837

14,324

Income before taxes

1,974

1,904

3,845

3,686

Tax expense

414

403

810

777

Net income

1,560

1,501

3,035

2,909

Less: Net income attributable to the noncontrolling interest

16

14

28

28

Net income attributable to Honeywell

$    1,544

$    1,487

$    3,007

$    2,881

Earnings per share of common stock – basic

$      2.37

$      2.24

$      4.62

$      4.32

Earnings per share of common stock – assuming dilution

$      2.36

$      2.22

$      4.59

$      4.29

Weighted average number of shares outstanding – basic

650.2

665.3

651.3

666.5

Weighted average number of shares outstanding – assuming dilution

654.2

670.2

655.5

671.9

1

Cost of products and services sold and Selling, general and administrative expenses include amounts for repositioning and other charges, the service cost component of pension and other postretirement (income) expense, and stock compensation expense.

 

Honeywell International Inc.

Segment Data (Unaudited)

(Dollars in millions)

Three Months Ended June 30,

Six Months Ended June 30,

Net Sales

2024

2023

2024

2023

Aerospace Technologies

$           3,891

$           3,341

$           7,560

$           6,452

Industrial Automation

2,506

2,727

4,984

5,530

Building Automation

1,571

1,510

2,997

2,997

Energy and Sustainability Solutions

1,604

1,567

3,129

3,028

Corporate and All Other

5

1

12

3

Total

$           9,577

$           9,146

$         18,682

$         18,010

Reconciliation of Segment Profit to Income Before Taxes

Three Months Ended June 30,

Six Months Ended June 30,

Segment Profit

2024

2023

2024

2023

Aerospace Technologies

$           1,060

$              930

$           2,095

$           1,761

Industrial Automation

477

544

951

1,130

Building Automation

397

391

747

772

Energy and Sustainability Solutions

405

363

708

665

Corporate and All Other

(140)

(115)

(208)

(200)

Total segment profit

2,199

2,113

4,293

4,128

Interest and other financial charges

(250)

(187)

(470)

(357)

Interest income

110

76

215

152

Amortization of acquisition-related intangibles

(85)

(61)

(155)

(129)

Stock compensation expense1

(55)

(50)

(108)

(109)

Pension ongoing income2

140

130

285

260

Other postretirement income2

4

7

10

13

Repositioning and other charges3,4

(44)

(102)

(137)

(243)

Other5

(45)

(22)

(88)

(29)

   Income before taxes

$           1,974

$           1,904

$           3,845

$           3,686

1

Amounts included in Selling, general and administrative expenses.

2

Amounts included in Cost of products and services sold (service cost component), Selling, general and administrative expenses (service cost component), Research and development expenses (service cost component), and Other (income) expense (non-service cost component).

3

Amounts included in Cost of products and services sold, Selling, general and administrative expenses, and Other (income) expense.

4

Includes repositioning, asbestos, and environmental expenses.

5

Amounts include the other components of Other (income) expense not included within other categories in this reconciliation. Equity income of affiliated companies is included in segment profit. 

 

Honeywell International Inc.

Consolidated Balance Sheet (Unaudited)

(Dollars in millions)

June 30, 2024

December 31, 2023

ASSETS

Current assets

Cash and cash equivalents

$                     9,576

$                     7,925

Short-term investments

231

170

Accounts receivable, less allowances of $312 and $323, respectively

7,759

7,530

Inventories

6,324

6,178

Other current assets

1,479

1,699

   Total current assets

25,369

23,502

Investments and long-term receivables

1,472

939

Property, plant and equipment—net

5,752

5,660

Goodwill

20,824

18,049

Other intangible assets—net

5,208

3,231

Insurance recoveries for asbestos-related liabilities

163

170

Deferred income taxes

374

392

Other assets

10,167

9,582

Total assets

$                   69,329

$                   61,525

LIABILITIES

Current liabilities

Accounts payable

$                     6,470

$                     6,849

Commercial paper and other short-term borrowings

4,548

2,085

Current maturities of long-term debt

2,519

1,796

Accrued liabilities

7,507

7,809

   Total current liabilities

21,044

18,539

Long-term debt

20,865

16,562

Deferred income taxes

2,137

2,094

Postretirement benefit obligations other than pensions

126

134

Asbestos-related liabilities

1,444

1,490

Other liabilities

6,196

6,265

Redeemable noncontrolling interest

7

7

Shareowners’ equity

17,510

16,434

Total liabilities, redeemable noncontrolling interest and shareowners’ equity

$                   69,329

$                   61,525

 

Honeywell International Inc.

Consolidated Statement of Cash Flows (Unaudited)

(Dollars in millions)

Three Months Ended
June 30,

Six Months Ended
June 30,

2024

2023

2024

2023

Cash flows from operating activities

Net income

$    1,560

$    1,501

$    3,035

$    2,909

Less: Net income attributable to noncontrolling interest

16

14

28

28

   Net income attributable to Honeywell

1,544

1,487

3,007

2,881

Adjustments to reconcile net income attributable to Honeywell to net cash provided by
(used for) operating activities

Depreciation

163

166

329

327

Amortization

146

118

271

240

Repositioning and other charges

44

102

137

243

Net payments for repositioning and other charges

(87)

(154)

(211)

(195)

NARCO Buyout payment

(1,325)

Pension and other postretirement income

(144)

(137)

(295)

(273)

Pension and other postretirement benefit payments

(7)

(8)

(15)

(23)

Stock compensation expense

55

50

108

109

Deferred income taxes

(39)

(29)

(36)

196

Other

(420)

(293)

(583)

(643)

Changes in assets and liabilities, net of the effects of acquisitions and divestitures

Accounts receivable

(202)

(83)

(149)

(505)

Inventories

63

(100)

(77)

(338)

Other current assets

163

98

227

208

Accounts payable

(42)

(423)

114

Accrued liabilities

134

143

(471)

(440)

Net cash provided by operating activities

1,371

1,360

1,819

576

Cash flows from investing activities

Capital expenditures

(259)

(233)

(492)

(426)

Proceeds from disposals of property, plant and equipment

2

13

Increase in investments

(230)

(3)

(468)

(229)

Decrease in investments

237

246

392

632

Receipts (payments) from settlements of derivative contracts

33

(31)

76

(38)

Cash paid for acquisitions, net of cash acquired

(4,913)

(661)

(4,913)

(661)

Net cash used for investing activities

(5,132)

(680)

(5,405)

(709)

Cash flows from financing activities

Proceeds from issuance of commercial paper and other short-term borrowings

4,770

3,895

6,993

8,000

Payments of commercial paper and other short-term borrowings

(2,019)

(4,636)

(4,489)

(7,930)

Proceeds from issuance of common stock

165

78

309

115

Proceeds from issuance of long-term debt

2,966

5,710

2,966

Payments of long-term debt

(32)

(21)

(605)

(1,384)

Repurchases of common stock

(529)

(477)

(1,200)

(1,176)

Cash dividends paid

(743)

(691)

(1,446)

(1,416)

Other

(10)

(4)

26

(38)

Net cash provided by (used for) financing activities

1,602

1,110

5,298

(863)

Effect of foreign exchange rate changes on cash and cash equivalents

(21)

(33)

(61)

(5)

Net increase (decrease) in cash and cash equivalents

(2,180)

1,757

1,651

(1,001)

Cash and cash equivalents at beginning of period

11,756

6,869

7,925

9,627

Cash and cash equivalents at end of period

$    9,576

$    8,626

$    9,576

$    8,626

Appendix

Non-GAAP Financial Measures

The following information provides definitions and reconciliations of certain non-GAAP financial measures presented in this press release to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP).

Management believes that, when considered together with reported amounts, these measures are useful to investors and management in understanding our ongoing operations and in the analysis of ongoing operating trends. These measures should be considered in addition to, and not as replacements for, the most comparable GAAP measure. Certain measures presented on a non-GAAP basis represent the impact of adjusting items net of tax. The tax-effect for adjusting items is determined individually and on a case-by-case basis. Other companies may calculate these non-GAAP measures differently, limiting the usefulness of these measures for comparative purposes.

Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitations of these non-GAAP financial measures are that they exclude significant expenses and income that are required by GAAP to be recognized in the consolidated financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Investors are urged to review the reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures and not to rely on any single financial measure to evaluate Honeywell’s business.

Honeywell International Inc.

Reconciliation of Organic Sales % Change

(Unaudited)

Three Months Ended
June 30, 2024

Honeywell

Reported sales % change

5 %

Less: Foreign currency translation

— %

Less: Acquisitions, divestitures and other, net

1 %

Organic sales % change

4 %

Aerospace Technologies

Reported sales % change

16 %

Less: Foreign currency translation

— %

Less: Acquisitions, divestitures and other, net

— %

Organic sales % change

16 %

Industrial Automation

Reported sales % change

(8) %

Less: Foreign currency translation

(1) %

Less: Acquisitions, divestitures and other, net

1 %

Organic sales % change

(8) %

Building Automation

Reported sales % change

4 %

Less: Foreign currency translation

(1) %

Less: Acquisitions, divestitures and other, net

4 %

Organic sales % change

1 %

Energy and Sustainability Solutions

Reported sales % change

2 %

Less: Foreign currency translation

(1) %

Less: Acquisitions, divestitures and other, net

— %

Organic sales % change

3 %

We define organic sales percentage as the year-over-year change in reported sales relative to the comparable period, excluding the impact on sales from foreign currency translation and acquisitions, net of divestitures, for the first 12 months following the transaction date. We believe this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

A quantitative reconciliation of reported sales percent change to organic sales percent change has not been provided for forward-looking measures of organic sales percent change because management cannot reliably predict or estimate, without unreasonable effort, the fluctuations in global currency markets that impact foreign currency translation, nor is it reasonable for management to predict the timing, occurrence and impact of acquisition and divestiture transactions, all of which could significantly impact our reported sales percent change.

Honeywell International Inc.

Reconciliation of Operating Income to Segment Profit, Calculation of Operating Income and Segment Profit Margins

(Unaudited)

(Dollars in millions)

Three Months Ended June 30,

Twelve Months
Ended 
December 31,

2024

2023

2023

Operating income

$            1,978

$            1,883

$            7,084

Stock compensation expense1

55

50

202

Repositioning, Other2,3

58

103

952

Pension and other postretirement service costs3

16

16

66

Amortization of acquisition-related intangibles

85

61

292

Acquisition-related costs4

7

2

Segment profit

$            2,199

$            2,113

$            8,598

Operating income

$            1,978

$            1,883

$            7,084

÷ Net sales

$            9,577

$            9,146

$          36,662

Operating income margin %

20.7 %

20.6 %

19.3 %

Segment profit

$            2,199

$            2,113

$            8,598

÷ Net sales

$            9,577

$            9,146

$          36,662

Segment profit margin %

23.0 %

23.1 %

23.5 %

1

Included in Selling, general and administrative expenses.

2

Includes repositioning, asbestos, environmental expenses, equity income adjustment, and other charges. For the three months ended June 30, 2023, other charges include $2 million of benefit due to the Russia-Ukraine conflict.

3

Included in Cost of products and services sold and Selling, general and administrative expenses.

4

Includes acquisition-related fair value adjustments to inventory.

We define operating income as net sales less total cost of products and services sold, research and development expenses, and selling, general and administrative expenses. We define segment profit, on an overall Honeywell basis, as operating income, excluding stock compensation expense, pension and other postretirement service costs, amortization of acquisition-related intangibles, certain acquisition-related costs, and repositioning and other charges. We define segment profit margin, on an overall Honeywell basis, as segment profit divided by net sales. We believe these measures are useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

A quantitative reconciliation of operating income to segment profit, on an overall Honeywell basis, has not been provided for all forward-looking measures of segment profit and segment profit margin included herein. Management cannot reliably predict or estimate, without unreasonable effort, the impact and timing on future operating results arising from items excluded from segment profit, particularly pension mark-to-market expense as it is dependent on macroeconomic factors, such as interest rates and the return generated on invested pension plan assets. The information that is unavailable to provide a quantitative reconciliation could have a significant impact on our reported financial results. To the extent quantitative information becomes available without unreasonable effort in the future, and closer to the period to which the forward-looking measures pertain, a reconciliation of operating income to segment profit will be included within future filings.

Acquisition amortization and acquisition-related costs are significantly impacted by the timing, size, and number of acquisitions we complete and are not on a predictable cycle, and we make no comment as to when or whether any future acquisitions may occur. We believe excluding these costs provides investors with a more meaningful comparison of operating performance over time and with both acquisitive and other peer companies.

Honeywell International Inc.

Reconciliation of Earnings per Share to Adjusted Earnings per Share

(Unaudited)

Three Months Ended June 30,

Twelve Months Ended December 31,

2024

2023

2023

2024(E)

Earnings per share of common stock – diluted1

$                  2.36

$                  2.22

$                   8.47

$9.48 – $9.68

Pension mark-to-market expense2

0.19

No Forecast

Amortization of acquisition-related intangibles3

0.10

0.07

0.35

0.48

Acquisition-related costs4

0.03

0.01

0.07

Russian-related charges5

0.02

Net expense related to the NARCO Buyout and HWI Sale6

0.01

0.01

Adjustment to estimated future Bendix liability7

0.49

Adjusted earnings per share of common stock – diluted

$                  2.49

$                  2.30

$                   9.52

$10.05 – $10.25

1

For the three months ended June 30, 2024, and 2023, adjusted earnings per share utilizes weighted average shares of approximately 654.2 million and 670.2 million, respectively. For the twelve months ended December 31, 2023, adjusted earnings per share utilizes weighted average shares of approximately 668.2 million. For the twelve months ended December 31, 2024, expected earnings per share utilizes weighted average shares of approximately 655 million.

2

Pension mark-to-market expense uses a blended tax rate of 18%, net of tax benefit of $27 million, for 2023.

3

For the three months ended June 30, 2024, acquisition-related intangibles amortization includes approximately $66 million, net of tax benefit of approximately $19 million. For the three months ended June 30, 2023, and twelve months ended December 31, 2023, acquisition-related intangibles amortization includes $48 million and $231 million, net of tax benefit of approximately $13 million and $61 million, respectively. For the twelve months ended December 31, 2024, expected acquisition-related intangibles amortization includes approximately $315 million, net of tax benefit of approximately $85 million.

4

For the three months ended June 30, 2024, the adjustment for acquisition-related costs, which is principally comprised of third-party transaction and integration costs and acquisition-related fair value adjustments to inventory, is approximately $22 million, net of tax benefit of approximately $7 million. For the three months ended June 30, 2023, and twelve months ended December 31, 2023, the adjustment for acquisition-related costs, which is principally comprised of third-party transaction and integration costs and acquisition-related fair value adjustments to inventory, is approximately $1 million and $7 million, net of tax benefit of approximately $0 million and $2 million, respectively. For the twelve months ended December 31, 2024, the expected adjustment for acquisition-related costs, which is principally comprised of third-party transaction and integration costs and acquisition-related fair value adjustments to inventory, is approximately $45 million, net of tax benefit of approximately $15 million.

5

For the three months ended June 30, 2023, the adjustment was $1 million, without tax benefit. For the twelve months ended December 31, 2023, the adjustment was a benefit $3 million, without tax expense. For the twelve months ended December 31, 2024, the expected adjustment is a $17 million expense, without tax benefit, due to the settlement of a contractual dispute with a Russian entity associated with the Company’s suspension and wind down activities in Russia.

6

For the three months ended June 30, 2023 and the twelve months ended December 31, 2023, the adjustment was $8 million, net of tax benefit of $3 million, due to the net expense related to the NARCO Buyout and HWI Sale.

7

Bendix Friction Materials (“Bendix”) is a business no longer owned by the Company. In 2023, the Company changed its valuation methodology for calculating legacy Bendix liabilities. For the twelve months ended December 31, 2023, the adjustment was $330 million, net of tax benefit of $104 million (or $434 million pre-tax) due to a change in the estimated liability for resolution of asserted (claims filed as of the financial statement date) and unasserted Bendix-related asbestos claims. The Company experienced fluctuations in average resolution values year-over-year in each of the past five years with no well-established trends in either direction. In 2023, the Company observed two consecutive years of increasing average resolution values (2023 and 2022), with more volatility in the earlier years of the five-year period (2019 through 2021). Based on these observations, the Company, during its annual review in the fourth quarter of 2023, reevaluated its valuation methodology and elected to give more weight to the two most recent years by shortening the look-back period from five years to two years (2023 and 2022). The Company believes that the average resolution values in the last two consecutive years are likely more representative of expected resolution values in future periods. The $434 million pre-tax amount was attributable primarily to shortening the look-back period to the two most recent years, and to a lesser extent to increasing expected resolution values for a subset of asserted claims to adjust for higher claim values in that subset than in the modelled two-year data set.  It is not possible to predict whether such resolution values will increase, decrease, or stabilize in the future, given recent litigation trends within the tort system and the inherent uncertainty in predicting the outcome of such trends. The Company will continue to monitor Bendix claim resolution values and other trends within the tort system to assess the appropriate look-back period for determining average resolution values going forward.

We define adjusted earnings per share as diluted earnings per share adjusted to exclude various charges as listed above. We believe adjusted earnings per share is a measure that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends. For forward-looking information, management cannot reliably predict or estimate, without unreasonable effort, the pension mark-to-market expense as it is dependent on macroeconomic factors, such as interest rates and the return generated on invested pension plan assets. We therefore do not include an estimate for the pension mark-to-market expense. Based on economic and industry conditions, future developments, and other relevant factors, these assumptions are subject to change.

Acquisition amortization and acquisition-related costs are significantly impacted by the timing, size, and number of acquisitions we complete and are not on a predictable cycle and we make no comment as to when or whether any future acquisitions may occur. We believe excluding these costs provides investors with a more meaningful comparison of operating performance over time and with both acquisitive and other peer companies.

Honeywell International Inc.

Reconciliation of Cash Provided by Operating Activities to Free Cash Flow

(Unaudited)

(Dollars in millions)

Three Months Ended

June 30, 2024

Three Months Ended

June 30, 2023

Cash provided by operating activities

$                     1,371

$                     1,360

Capital expenditures

(259)

(233)

Free cash flow

$                     1,112

$                     1,127

We define free cash flow as cash provided by operating activities less cash for capital expenditures.

We believe that free cash flow is a non-GAAP measure that is useful to investors and management as a measure of cash generated by operations that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business development activities or acquisitions, pay dividends, repurchase stock, or repay debt obligations prior to their maturities. This measure can also be used to evaluate our ability to generate cash flow from operations and the impact that this cash flow has on our liquidity.

Honeywell International Inc.

Reconciliation of Expected Cash Provided by Operating Activities to Expected Free Cash Flow

(Unaudited)

Twelve Months Ended
December 31, 2024(E) ($B)

Cash provided by operating activities

~$6.6 – $7.0

Capital expenditures

~(1.1)

Free cash flow

~$5.5 – $5.9

We define free cash flow as cash provided by operating activities less cash for capital expenditures.

We believe that free cash flow is a non-GAAP measure that is useful to investors and management as a measure of cash generated by operations that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business development activities or acquisitions, pay dividends, repurchase stock, or repay debt obligations prior to their maturities. This measure can also be used to evaluate our ability to generate cash flow from operations and the impact that this cash flow has on our liquidity.

Contacts:

Media

Investor Relations

Stacey Jones

Sean Meakim

(980) 378-6258

(704) 627-6200

stacey.jones@honeywell.com

sean.meakim@honeywell.com

 

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SOURCE Honeywell

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Global Times: China’s GDI, GSI, and GCI foster global cooperation, address urgent challenges

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BEIJING, Sept. 28, 2024 /PRNewswire/ — In an era marked by unprecedented global transformations, the world stands at a critical crossroads, grappling with deepening deficits in peace, development, security, and governance. As humanity faces unparalleled challenges during this tumultuous period, Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee and Chinese president, has put forth a solemn call to action through the Global Development Initiative (GDI), the Global Security Initiative (GSI), and the Global Civilization Initiative (GCI). 

The three pivotal initiatives address the pressing issues of our time, offering viable pathways and robust support for the building of a global community of shared future. Rooted in the rich historical experiences of the CPC’s century-long struggle and infused with the wisdom of China’s traditional culture, these initiatives are expected to unite the world in the pursuit of common progress and stability.

To offer a deep understanding of the GDI, the GSI, and the GCI, and elaborate on their significance on a global scale, the Global Times is launching series of articles featuring engaging stories and in-depth interviews to provide our readers with a comprehensive insight into the three initiatives. 

From ‘Convention of Peking’ to ‘Beijing Declaration’

In April 2022, President Xi proposed the GSI to promote universal security while delivering a keynote speech via video link at the opening ceremony of the Boao Forum for Asia Annual Conference 2022. The initiative is a global public good offered by China, as well as a vivid illustration of the vision of a community with a shared future for mankind in the security field.

On July 23, 2024, 14 Palestinian factions gathered in Beijing and signed the Beijing Declaration on Ending Division and Strengthening Palestinian National Unity after participating in reconciliation talks mediated by China, a lively demonstration of the GSI’s function in practice, which many international observers hailed China for having “made something impossible possible,” and regarded it as a milestone in the Middle East reconciliation process. 

“Palestinian unity is key to the realization of Palestinian statehood and China is committed to facilitating it,” read an article on news outlet Al Jazeera.

“The Palestinian question is at the core of the Middle East issue. Over the past years, China has put forward proposals and taken action to address the Palestinian question with Chinese wisdom and solutions,” stated the article. 

China’s Foreign Ministry Spokesperson Mao Ning said at a regular media briefing on July 24, that “China firmly supports the Palestinian people in restoring their legitimate national rights, and supports the people of Middle East countries in holding their future in their own hands. China will continue to advance the GSI and make more contribution to peace and stability in the Middle East.” 

On the day that the “Beijing Declaration” was signed, many Chinese people hailed the important step in peace in the Middle East and shared the sentiment “Because we have been caught in the rain, we want to hold an umbrella for others” on social media platforms. 

They recalled the history that 164 years ago, the Qing government was forced to sign the humiliating “Convention of Peking” in 1860, which included ceding territories and paying indemnities. That dark era saw China reduced to a semi-feudal and semi-colonial society, when bullying by foreign powers and frequent wars tore the country apart and plunged the Chinese people into an abyss of great suffering. After a strenuous fight, the CPC has closely united and led the Chinese people of all ethnic groups to work hard for a century to put an end to China’s national humiliation, guiding the country to progress and prosperity. 

The past suffering is not merely a reminder of a dark history; it has also made the Chinese people more sympathetic to the suffering of others and has deepened their understanding of the value of peace. 

Turkish Ambassador to China İsmail Hakkı Musa hailed the significance of the GSI in an exclusive interview with the Global Times. “The GSI has its own rations. It focuses on sovereignty, equality, territorial integrity, and [the] peaceful settlement of the disputes. You may have noticed that too many people – too many analysts – defended the idea that, for example, the role assumed by China between the approach of Saudi Arabia and Iran was a kind of application or practice of this initiative,” Musa said.

“We all know that this approach is a good thing. Lesser tension in that region is an important contribution to the world peace,” he stressed. 

In practice, China is not only playing an unselfish, active role in the brokering of peace in the Middle East while some other countries ignore human lives for selfish interests, but has also become an important force in maintaining world peace. 

Since the restoration of its legitimate seat in the United Nations, China has faithfully fulfilled its international legal obligations as a permanent member of the UN Security Council. 

Currently, China is the second-largest contributor to the UN’s regular budget, the second-largest contributor to UN peacekeeping operations, and the largest troop-contributing nation among the permanent members of the Security Council. China actively participates in negotiations and the formulation of rules on global security issues in various fields, including international arms control and preventing nuclear proliferation. 

It also collaborates with various parties in non-traditional security areas such as counter-terrorism, biosecurity, and food security. In the face of ongoing hotspot issues, China is committed to playing the role of a responsible major power.

Right to development

In the heart of Africa, where the sun shines brightly and the needs of the people are as vast as the savannah, a new story of development is unfolding. It’s a tale of “small but beautiful” projects born from ChinaAfrica cooperation, ranging from crop cultivation and maize growth and combating the region’s hunger issue, to clean energy projects that provide affordable new energy, and to the Luban Workshop, which offers training to many in Africa. 

The implementation of these “small and beautiful” projects echoes the GDI’s call for sustainable and people-centric growth.

Three years ago, Xi proposed the GDI at the general debate of the 76th session of the United Nations (UN) General Assembly, calling for the building of a consensus in pursuing development, promoting shared growth, and helping accelerate the implementation of the UN 2030 Agenda for Sustainable Development.

China achieved the goal of eradicating absolute poverty 10 years ahead of the United Nations’ 2030 Sustainable Development Agenda, making significant contributions to global poverty alleviation efforts. Internationally, China is fully committed to development, actively sharing its development opportunities and experiences with other countries, especially with those in the Global South. 

Since the initiative was proposed, the content has been consistently substantialized, with its implementation mechanisms becoming more refined over time. This has led to the gradual establishment of practical cooperation within its framework, providing China’s approach to addressing the development gap in Global South countries.

At the just concluded 2024 Summit of the Forum on China-Africa Cooperation (FOCAC), the China-Africa Joint Statement on Deepening Cooperation within the Framework of the Global Development Initiative was released. 

“Since the launch of the GDI, China and Africa have joined forces and mutually supported each other in exploring paths toward modernization, further implementing the China-Africa Cooperation Vision 2035, advancing the nine programs to a high standard, as well as completing 175 ‘small and beautiful’ livelihood cooperation projects,” read the statement. 

More than 30 African members of the FOCAC have joined the Group of Friends of the GDI and the Global Development Promotion Center Network to put in place an efficient working mechanism and platform for alignment in development policies, coordination of development resources, and facilitation of joint actions.

Shakeel Ahmad Ramay, CEO of the Asian Institute of Eco-civilization Research and Development in Pakistan, told the Global Times that he believes that the GDI, which advocates that development “holds the master key” to solving problems and ensuring sustainable peace, is what the world is desperately seeking now. He noted that apart from Africa, other Global South countries are benefiting from the GDI and China’s development dividends.

“Without sharing the dividends of development, we cannot preach ethics, and the dream of peace will remain a dream. Without cooperation, concrete programs, and the allocation of financial resources, we cannot achieve these goals. China is cognizant of this reality and has launched numerous programs and provided financial support such as $4 billion to the Global Development and South-South Cooperation Fund,” he said. 

Musa noted to the Global Times that “China initiated the concept of the ‘right to development.’ The GDI also offers action-based policies and result-based projects.” 

According to China’s Foreign Ministry, over the last three years, the GDI has made remarkable achievements. Over 100 countries and some international organizations have given support to or taken part in the initiative. More than 80 countries have joined the Group of Friends of the GDI. China has set up a Global Development and South-South Cooperation Fund, which has financed over 150 programs. The Global Development Promotion Center Network is bringing more members on board. 

“The GDI was put forward by China, but its opportunities and benefits are shared by the world. On the path toward development and prosperity, no country or individual should be left behind. This is the vision of the GDI, as well as the goal advocated by the UN,” Mao Ning said at a regular media briefing on September 20, 2024.

Respect for diverse civilizations

In March 2023, Xi proposed the GCI for the first time at the CPC in Dialogue with World Political Parties High-Level Meeting, advocating for the respect of the diversity of world civilizations, the promotion of common values for all humanity, the emphasis on the inheritance and innovation of civilizations, and the strengthening of international cultural exchange and cooperation. 

The initiative is another major public product offered to the world by China after the GDI and the GSI. It sends a sincere call to the world to deepen the dialogue of civilization exchanges and promote the progress of human civilization through inclusiveness and mutual learning, contributing Chinese wisdom and solutions to promote a higher level of international cooperation, experts said. 

Shahbaz Khan, director of the UNESCO Regional Office, told the Global Times that the GCI aligns with UNESCO’s mission to foster respect for cultures worldwide, particularly those that possess outstanding universal value.

China now boasts 59 World Heritage sites, including the Beijing Central Axis, a “remarkable example” of urban heritage that showcases advancements from the Yuan Dynasty (1279-1368) to the present day, Khan said.

In recent years, China has enhanced communication and coordination with UNESCO, working with all parties to promote the implementation of the United Nations’ Global Agenda for Dialogue among Civilizations, strengthening dialogue and exchange among civilizations, and increasing the sharing of values, concepts, and experiences behind the policies of various countries, jointly exploring solutions to global challenges and issues. 

Ramay noted that the GCI, together with GDI and GSI, “negates the idea of superiority and present the vision of equality and equity built on respect for diversity and cultures. The vision categorically highlighted the need for a fair and just system where everyone (country or human) can pursue the dream of development and peace.” 

“These initiatives promote the idea of resolving conflicts or disputes through dialogue and development to strengthen peaceful and cooperative co-existence. Thus, the world welcomed the initiative, especially the Global South,” he said. 

https://www.globaltimes.cn/page/202409/1320506.shtml

 

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SOURCE Global Times

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The pioneered intelligent airborne detection technology by State Grid Zaozhuang Power Supply Company

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ZAOZHUANG, China, Sept. 29, 2024 /PRNewswire/ — The traditional manual detection is likely to be made towards the phase A in the lower layer; while the intelligent airborne detection is actually made towards the phase A in the upper layer. This represents the comparison result for the discharge hidden danger of the No. 23 tower insulator of the 10 kV cement plant line in the 110 kV Tendong Substation outgoing line by different detection methods, yet the accurate judgment brought by the innovative application of unmanned aerial vehicle airborne ultrasonic partial discharge detection technology.

By the end of August 12, the application of the self-developed UAV airborne ultrasonic partial discharge detection technology by State Grid Zaozhuang Power Supply Company has reached a year, during which, a total of 450 unmanned aerial vehicles were detected, 63 hidden hazards of partial discharge were identified, leading to a reduction of 37 equipment failures, the reduction of the power distribution network fault outage rate by 68%, and improving the power supply reliability rate to 99.982%.

According to Zhang Jianhua, Director of the Operation and Maintenance Department of Zaozhuang Power Supply Company, this technology is initiated in China, rewriting the tradition and passivity of power distribution network partial discharge fault investigation by hearing voice manually over a long time, and leaping into the era of intelligent imaging diagnosis. As the capillaries of the large power grid connecting thousands of households, the current average height of the distribution network tower is 15 to 18 meters, and both the insulators and cable heads on the top of these towers are important detection parts, the improvement in traditional manual detection methods is badly needed. To this end, they, by boldly integrating UAV with local imaging inspection technology, used the advantages of UAV multi-angle close-range inspection to carry out partial discharge inspection, innovated and broadened the technical dimension of aerial patrol, took the lead in enabling accurate collection of voiceprint local release data, and completed demonstration of putting the technology into practical application.

Innovation is not as simple as one plus one, the technology research took a year. Since June 2022, by means of hardware structure transformation and multi-algorithm fusion optimization, they have successively overcome a range of problems such as the inability of traditionally partial discharge inspection to lock the discharge part, the partial discharge detection of UAV propeller noise interference, and the geographical conditions of inspection, and enabled the high-quality and efficient partial discharge imaging detection of the power distribution network. In July 2023, the technology was put into trial use, and later in December of the same year, it was inspected and accepted by the State Grid Shandong Electric Power Company.

During the trial use, the Zao Zhuang Power Supply Company, by giving full play to its advantages as being directly managed and operated by State Grid Corporation of China, coordinated 162 power distribution network lines, and allocated 35 UAVs for the seven power supply centers affiliated to it in a unified manner, and trained 26 drone pilots. Beyond that, it repeatedly carried out technical verification and optimization in the trial use, reducing the time to inspect the base tower 1 from 25 minutes to 15 minutes, indicating an efficiency improvement by 1.8 times compared to the traditional manual inspection, making the accuracy reach 100%.

Instead of revolving around the tower, staring at the equipment for a long time, and being anxious but unable to do anything, Li Yanlin, the specialist staff from Operation and Maintenance Department of Zaozhuang Power Supply Company expressed the pleasure that thanks to the intelligent airborne detection technology, the partial discharge failures found in the power distribution network could be eliminated as soon as they are identified, leading to the great transformation of the operation and maintenance of distribution network from “eliminating present problems” to “preventing them before they are present”, and the formation of a sound situation of intelligent operation and maintenance.

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SOURCE State Grid Zaozhuang Power Supply Company

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KT Corporation and Microsoft Take ‘Giant Step’ to Accelerate AI Innovation in Korea

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Five-year, multi-billion-dollar strategic partnership to drive AI transformation for more than 650 thousand businesses and 17 million consumers across Korea 

Korea-customized AI model collaboration, including OpenAI’s GPT-4o through Azure OpenAI Service, to enable emerging AI use cases for different industry verticals   

KT and Microsoft collaborate on Korean sovereign cloud solution development and market launch to drive cloud and AI innovation for the public sector and regulated industries 

KT will launch a new AX-specialized service company delivering Microsoft-powered AI transformation service to enterprise customers  

KT and Microsoft to further partner for AI ecosystem development and joint R&D, through initiatives including an AX co-innovation center and a Microsoft Research collaboration  

SEOUL, South Korea and REDMOND, Wash., Sept. 29, 2024 /PRNewswire/ — KT Corporation and Microsoft today unveiled a five-year multibillion-dollar partnership, which includes an investment from KT in the areas of Artificial Intelligence (AI), cloud technologies, and IT business, and a resource commitment from Microsoft in the areas of infrastructure and people. Through this partnership, the companies will propel KT’s AI and ICT (AICT) transformation, and accelerate the advancement of AI services and innovation in Korea. 

Following the agreement in June, KT and Microsoft have engaged in ongoing discussions to strengthen ties and outline key areas of collaboration and support. This strategic partnership is expected to drive progress in five pivotal areas: Development of customized AI solutions for Korea, delivering Korean sovereign cloud solutions, the establishment of an AI transformation (AX)-specialized service company, AI R&D capabilities advancement across Korea and KT’s AICT transformation. 

Developing Customized AI Solutions for Korea
KT and Microsoft will engage in engineering collaboration to develop a customized version of GPT-4o and explore developing a customized version of Microsoft’s Phi family of small language models, with KT’s extensive set of high-quality data around Korean culture and industries. These models will be used for both KT’s internal and consumer-facing applications such as customer service chatbots, and also for building industry-specific AI solutions for B2B customers across industry verticals to best serve the needs of Korean consumers and businesses. KT will leverage Microsoft Copilot Studio and Azure AI Studio to develop custom AI agents aimed at differentiating customer experiences. KT plans to expand the development and utilization of KT-custom AI agents not only for consumer use cases in education, healthcare, and in-vehicle infotainment, but also for business applications. Importantly, Microsoft and KT will collaborate closely on further evolving KT’s Responsible AI framework to help ensure the delivery of safe AI services for the Korea market. 

“We are delighted with the partnership between KT and Microsoft, which presents a valuable opportunity to enhance our digital competitiveness,” said Shinhan Bank, a leading financial group in Korea. “By utilizing the KT GPT model, specialized in Korean language and financial services, we aim to deliver innovative AI-driven services to the domestic financial consumers.” 

Delivering Korean sovereign cloud solutions
KT and Microsoft are partnering to develop and launch Secure Public Cloud services, which is KT’s sovereign cloud solution built on Microsoft Cloud for Sovereignty for Korean-regulated industries. KT will drive its Secure Public Cloud business with support from Microsoft, enabling public sector and regulated industry customers to use new platform capabilities for securing data and workloads, providing access to the latest cloud and AI features available on Azure and helping them comply with local privacy and regulatory requirements. 

Accelerating AI transformation through AX-Specialized service company 
KT will establish a new AX-specialized service company to help businesses in Korea transform with the latest AI innovation. The forthcoming KT’s AX-specialized service company will provide advanced Microsoft Cloud and AI expertise and solutions to the Korean market, with plans to expand to broader markets, including ASEAN. Microsoft will support this initiative over the next three years with professional consulting resources to build core practices and capabilities for the new entity. 

Advancing AI R&D capabilities across Korea
Microsoft will support KT in establishing a co-innovation center aimed at accelerating Microsoft technology-driven AI transformation in the Korean market. This center will help businesses build, develop and prototype new AI solutions with Microsoft technology and KT’s AI specialists. Furthermore, KT will invest in fostering new AI startups and developing a partner ecosystem to support nationwide AI transformation. Microsoft will support this initiative by providing Azure credits and technical expertise. For the future of technology collaboration, KT and Microsoft Research (MSR)’s research leaders and business visionaries will explore high-impact research initiatives in network modernization, AI for healthcare, and industry AI adoption and further collaborate with leading academic institutions partnering with KT. 

Accelerating KT’s AICT Transformation with organization-wide upskilling
KT will migrate and modernize existing IT workloads including mission-critical applications, to Microsoft Azure while developing a new data platform and AI services powered by Microsoft Fabric and Azure OpenAI Service. This collaboration will enhance KT’s overall IT infrastructure, making it more agile, resilient, and secure, driving innovation and elevating the customer experience through intelligent automation. KT also intends to deploy Microsoft 365 Copilot and GitHub Copilot, for all KT employees and developers to supercharge productivity of the entire business. Microsoft will assist KT in equipping more than 19,000 employees with cloud and AI skills and enabling more than 5,800 AX specialists to lead a successful transformation through KT group-wide skilling and co-engineering support. 

“The partnership with Microsoft presents a pivotal opportunity, not only for technological collaboration but also for expanding Korea’s AI foundation and driving transformative innovation across industries and daily life,” said KT CEO Young-Shub Kim. “Leveraging this strategic partnership, we aim to rapidly evolve into an AICT company with unparalleled competitiveness in domestic and global markets.”  

“Our strategic partnership brings together KT’s industry expertise with the power of our entire tech stack, from Azure AI to Microsoft 365 Copilot,” said Satya Nadella, Chairman and CEO of Microsoft. “Together, we will help accelerate the AI transformation of Korean organizations across the private and public sector and build new AI-powered experiences for millions of consumers.”

About KT Corporation
KT Corporation is a leading company in Korea’s telecommunications and ICT industries. By building an AX innovation platform based on differentiated AI, Big Data and Cloud competitiveness, and offering it with outstanding network infrastructure, KT is driving evolution into an AICT (AI and ICT) company.

About Microsoft 
Microsoft (Nasdaq “MSFT” @microsoft) creates platforms and tools powered by AI to deliver innovative solutions that meet the evolving needs of our customers. The technology company is committed to making AI available broadly and doing so responsibly, with a mission to empower every person and every organization on the planet to achieve more. 

For more information, press only:
Microsoft Media Relations, WE Communications for Microsoft, (425) 638-7777, rapidresponse@we-worldwide.com

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SOURCE Microsoft Asia

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