Honeywell International Inc.

Good day, ladies and gentlemen, and welcome to Honeywell's first quarter 2019 earnings release conference call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your touch-tone phone. If at any point your question has been answered, you may need to remove yourself from the queue by pressing star 2. Lastly, if you should require any operator assistance, please press star 0. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mark Macaluso, Vice President of Investor Relations. Please go ahead, sir.

Thank you, April. Good morning, and welcome to Honeywell's first quarter 2019 earnings conference call. With me here today are Chairman and CEO Darius Adamczyk and Senior Vice President and Chief Financial Officer Greg Lewis. This call and webcast, including any non-GAAP reconciliations, are available on our website at www.honeywell.com. forward slash investor. Note that elements of this presentation contain forward-looking statements that are based on our best view of the world and of our businesses as we see them today. Those elements can change, and we ask that you interpret them in that light. We identify the principal risks and uncertainties that may affect our performance in our annual report on Form 10-K and other SEC filings. For this call, references to adjusted earnings per share, adjusted free cash flow and free cash flow conversion, and effective tax rate exclude the impacts from separation costs related to the two spinoffs of our homes and transportation systems businesses in 2018, as well as pension mark-to-market adjustment and U.S. tax legislation, except for otherwise noted. References to 2019 adjusted free cash flow guidance and associated conversion exclude impact from separation costs related to the 2018 spinoffs. This morning, we'll review our financial results for the first quarter of 2019, share our guidance for the second quarter, and provide an update to our full-year 2019 outlook. And as always, we'll leave time for your questions at the end. With that, I'd like to turn the call over to Chairman and CEO, Darius Adamczyk.

Thank you, Mark, and good morning, everyone. Let's begin on slide two. Honeywell had a tremendous first quarter, delivering earnings per share of $1.92, or seven cents above the high end of our guidance range, and up 13%, excluding the impact of the spins in 2018. The strong earnings performance was driven by organic sales growth of 8%, and 120 basis points of segment margin expansion. Our outstanding top line results were driven by continued strength in our long cycle commercial aerospace, defense, and warehouse and process automation businesses. In addition, we achieved a significant improvement in honeywell building technologies, which delivered 9% organic sales growth in this quarter. The first full quarter following our 2018 spinoffs, after 1% in the fourth quarter of 2018, For all of Honeywell, our long cycle backlog increased more than 10% year over year and continues to position us well for the remainder of 2019. The investments we made in our sales organization, new product development, and M&A in the warehouse automation business, a couple of our winning positions under Wright Platforms and Aerospace, continue to drive outstanding top line results. Segment margin exceeded 20% in the first quarter driven by a smart portfolio enhancements made in 2018, continued investments in sales excellence, increased sales volumes, and the benefits of previously funded repositioning projects. I'm also encouraged by the improvement in gross margin, which increased 300 basis points in the first quarter. Our concerted efforts to improve working capital generated adjusted free cash flow of growth of 55%, excluding separation costs and the impact of the spins in 2018. Conversion in the first quarter was 82%, the highest start to the year since 2010. We represented a 14-point year-over-year improvement. I'm extremely pleased with the progress we've made in this area while continuing to invest in our business. As a result of our first quarter results and continued confidence in our ability to deliver, today we're raising our full-year organic sales guidance to a new range of 3% to 6%, and earnings per share guidance to a new range of $7.90 to $8.15. We continue to expect to generate nearly $6 billion in free cash flow with conversion in the range of 95% to 100%. As I said in January, Honeywell is a simpler, more focused company that continues to over-deliver on its commitments. We are encouraged by our results, particularly organic sales growth and free cash flow, which were two of my top priorities when I took over as CEO. Notwithstanding the strong start to the year, we continue to take steps to ensure we can deliver on our commitments in a potentially uncertain macro environment should things slow down the second half of 2019. We took significant actions in 2018 to transform the business. The results of which you see in our performance today, a combination of strong sales growth, favorable end market exposure, and significant balance sheet positions as well for the remainder of 2019. I'll stop there and turn the call over to Greg, who will discuss our first quarter results and updated 2019 guidance in more detail. Thank you, Darius, and good morning, everyone.