Related Party Transactions

6 Months Ended

Jun. 27, 2026

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Related Party Sales and Purchases

For all periods presented, the Company had no material related party sales and purchase transactions that required disclosure.

Related Party Loans and Related Party Payables

Related party debt due from and due to Honeywell or its affiliates are recorded in Accounts receivable and Accrued liabilities in the Condensed Combined Balance Sheets, respectively. Related party loans receivable of $44 million and related party loans payable of $16 million are reflected in the Condensed Combined Balance Sheets as of December 31, 2025. No related party loans receivable or payable were outstanding as of June 27, 2026. The interest income and expense related to the loan activity is recorded in Other expense, net, in the Condensed Combined Statements of Operations.

Related party payables are recorded in Accounts payable in the Condensed Combined Balance Sheets. Related party payables of $52 million and $2 million is reflected in the Condensed Combined Balance Sheets as of June 27, 2026 and December 31, 2025, respectively.

Distribution to Honeywell

On March 16, 2026, the Company completed the private note offering of $16.0 billion of senior unsecured notes (collectively the “Initial Notes”). Net proceeds of $15.1 billion from the Initial Notes were distributed to Honeywell in connection with the Spin-off. The distribution was reflected in the Condensed Combined Statements of Cash Flows as a financing activity and in the Condensed Combined Balance Sheets as Net Parent investment. Refer to Note 9. Debt and Credit Agreements and Note 17. Subsequent Events for further details.

Corporate Allocations

The Condensed Combined Financial Statements reflect allocations of certain expenses from Honeywell including, but not limited to, legal, accounting, information technology, human resources, and other infrastructure support. The cost of these services has been allocated to the Company on the basis of the proportion of Net sales. The Company and Honeywell consider the allocations to be a reasonable reflection of the benefits received by the Company. Allocations for management costs and corporate support services provided to the Company totaled $146 million and $294 million for the three and six months ended June 27, 2026, respectively, and totaled $160 million and $311 million for the three and six months ended June 28, 2025, respectively, and such amounts are included within Cost of products and services sold, Research and development expenses, and Selling, general and administrative expenses in the Condensed Combined Statements of Operations.

Cash Management and Net Parent Investment

For the periods prior to the Spin-off, including those presented in these Condensed Combined Financial Statements, Honeywell used a centralized approach for the purpose of cash management and financing of its operations. The Company’s excess cash in participating bank accounts was transferred to Honeywell daily, and Honeywell funded the Company’s operating and investing activities as needed. Honeywell operates a centralized non-interest-bearing cash pool in the U.S. and regional interest-bearing cash pools outside of the U.S. The total net effect of the settlement of these intercompany transactions is reflected in the Condensed Combined Statements of Cash Flows as a financing activity and in the Condensed Combined Balance Sheets as Net Parent investment.

Derivatives and Hedging

Honeywell centrally hedged its exposure to changes in foreign exchange rates principally with forward contracts. The Company monitors its collective foreign currency exposure and enters into foreign currency exchange contracts, when necessary, to minimize the impact of changes in foreign currency exchange rates. For the periods prior to the Spin-off, certain contracts were specifically designated to and entered into on behalf of the Company with Honeywell as a counterparty. As of June 27, 2026 and December 31, 2025, the net derivative liability position for the Company was not material.

Parent Company Credit Support

Prior to the Spin-off, Honeywell provided the Company with Parent credit support in certain jurisdictions. To support the Company in selling products and services globally, Honeywell often entered into contracts on behalf of the Company or issued Parent guarantees. Honeywell provided similar credit support for some non-customer related activities of the Company, including Parent guarantees for environmental remediation of certain sites (refer to Note 15. Commitments and Contingencies for further details). There are no instances under the Company’s existing customer contracts requiring payments or performance under Parent company guarantees.