Stock-Based Compensation Plans

6 Months Ended

Jun. 27, 2026

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Plans

Stock-Based Compensation Plans

Honeywell maintains stock-based compensation plans under which it grants stock options and restricted stock units to certain management level employees, including certain employees of the Company. The Condensed Combined Statements of Operations reflect an allocation of these expenses on a specific identification basis for employees who exclusively supported the Company or, when specific identification is not practicable, a proportional cost allocation method primarily based on revenue, depending on the nature of the services. The amounts presented are not necessarily indicative of future awards and do not necessarily reflect the costs that the Company would have incurred as an independent company for the periods presented.

For the three months ended June 27, 2026 and June 28, 2025, the Company recognized $36 million and $22 million of stock-based compensation costs within Selling, general and administrative expenses in the Condensed Combined Statements of Operations, respectively, of which $15 million and $10 million related to compensation costs for direct employees of the Company, respectively, and $21 million and $12 million related to compensation costs allocated from Honeywell, respectively. For the six months ended June 27, 2026 and June 28, 2025, the Company recognized $61 million and $46 million of stock-based compensation costs within Selling, general and administrative expenses in the Condensed Combined Statements of Operations, respectively, of which $29 million and $21 million related to compensation costs for direct employees of the Company, respectively, and $32 million and $25 million related to compensation costs allocated from Honeywell, respectively. Refer to Note 3. Related Party Transactions for further details.