UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from   to  

Commission file number 1-8974

Honeywell International Inc.

(Exact name of registrant as specified in its charter)

Delaware		22-2640650
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
855 South Mint Street		28202
Charlotte,	North Carolina
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (704) 627-6200

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbols	Name of each exchange on which registered
Common Stock, par value $1 per share*	HON	The Nasdaq Stock Market LLC
1.300% Senior Notes due 2023	HON 23A	The Nasdaq Stock Market LLC
0.000% Senior Notes due 2024	HON 24A	The Nasdaq Stock Market LLC
2.250% Senior Notes due 2028	HON 28A	The Nasdaq Stock Market LLC
0.750% Senior Notes due 2032	HON 32	The Nasdaq Stock Market LLC
4.125% Senior Notes due 2034	HON 34	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the Registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the Registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

The aggregate market value of the voting stock held by nonaffiliates of the Registrant was approximately $118.0 billion at June 30, 2022.

There were 668,140,252 shares of Common Stock outstanding at January 27, 2023.

Documents Incorporated by Reference

Part III: Proxy Statement for Annual Meeting of Shareowners to be held May 19, 2023

TABLE OF CONTENTS

ORGANIZATION OF OUR ANNUAL REPORT ON FORM 10-K

The order and presentation of content in our Annual Report on Form 10-K (Form 10-K) differs from the traditional U.S. Securities and Exchange Commission (SEC) Form 10-K format. We believe that our format improves readability and better presents how we organize and manage our business. See Form 10-K Cross-Reference Index for a cross-reference to the traditional SEC Form 10-K format.

1	Cautionary Statement about Forward-Looking Statements
2	About Honeywell
16	Management’s Discussion and Analysis of Financial Condition and Results of Operations
24	Review of Business Segments
29	Risk Factors
37	Quantitative and Qualitative Disclosures about Market Risks
37	Liquidity and Capital Resources
43	Critical Accounting Estimates
46	Other Matters
47	Information about Our Executive Officers
48	Unresolved Staff Comments
48	Properties
48	Legal Proceedings
48	Mine Safety Disclosures
49	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
51	Financial Statements and Supplementary Data
111	Report of Independent Registered Public Accounting Firm
113	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
113	Controls and Procedures
113	Management's Report on Internal Control over Financial Reporting
113	Other Information
114	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
114	Directors, Executive Officers, and Corporate Governance
114	Executive Compensation
115	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
116	Certain Relationships and Related Transactions, and Director Independence
116	Principal Accounting Fees and Services
116	Exhibits and Financial Statement Schedules
116	Form 10-K Summary
121	Signatures
123	Form 10-K Cross-Reference Index

CAUTIONARY STATEMENT ABOUT
FORWARD-LOOKING STATEMENTS

We describe many of the trends and other factors that drive our business and future results in the section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations and in other parts of this report (including under the section titled Risk Factors). 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. 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 risks and uncertainties, including the impact of the coronavirus pandemic (COVID-19) and the Russia-Ukraine conflict, 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 Form 10-K can or will be achieved. These forward-looking statements should be considered in light of the information included in this Form 10-K, including, in particular, the factors discussed within the section titled Risk Factors. Such factors may be revised or supplemented in subsequent reports on Forms 10-Q and 8-K.

1          Honeywell International Inc.

ABOUT HONEYWELL

Honeywell International Inc. (Honeywell or the Company) invents and commercializes technologies that address some of the world’s most critical challenges around energy, safety, security, air travel, productivity, and global urbanization. We are a leading software-industrial company committed to introducing state of the art technology solutions to improve efficiency, productivity, sustainability, and safety in high growth businesses in broad-based, attractive industrial end markets. As a diversified technology and manufacturing company, we are uniquely positioned to blend physical products with software to serve customers worldwide with aerospace products and services, energy efficient products and solutions for businesses, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals, and productivity, sensing, safety and security technologies for buildings and industries. Our products and solutions enable a safer, more comfortable, and more productive world, enhancing the quality of life of people around the globe. The Honeywell brand dates back to 1906, and the Company was incorporated in Delaware in 1985.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports, are available free of charge on our Investor Relations website (investor.honeywell.com) under the heading Financials (see SEC Filings) immediately after they are filed with, or furnished to, the Securities and Exchange Commission (SEC). Honeywell uses our Investor Relations website 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. Information contained on or accessible through, including any reports available on, our website is not a part of, and is not incorporated by reference into, this Form 10-K or any other report or document we file with the SEC. Any reference to our website in this Form 10-K is intended to be an inactive textual reference only.

In addition, in this Form 10-K, the Company incorporates by reference certain information from its definitive Proxy Statement for the 2023 Annual Meeting of Stockholders (the Proxy Statement), which we expect to file with the SEC on or about April 6, 2023, and which will also be available free of charge on our website.

2          Honeywell International Inc.

TABLE OF CONTENTS ABOUT HONEYWELL

EXECUTIVE SUMMARY

Our rigorous operating principles allowed us to once again deliver a very strong performance in 2022. We grew our market share and positioned our businesses for continued success in the future. In 2022, we delivered sales growth of 3% (6% organically(1), 7% organically excluding lost Russian sales(2)), led by strong demand in our Commercial Aviation, Advanced Materials, and Building Products businesses, as we experienced sales growth in three of our four reportable business segments.

Empowered by our Honeywell Accelerator operating model, we adapted our approach to strained supply chains and mitigated profitability loss due to inflation. In 2022, we deepened commitments with critical suppliers, improved demand forecasting, enhanced communication across our businesses to coordinate larger orders with key suppliers, and reengineered products in an effort to significantly mitigate sales risk. We also embedded comprehensive near real-time inflation analysis into our operating system, enabling strategic pricing actions to help stay ahead of the inflation curve and protect profitability. We maintained our commitment to create long-term shareowner value by realizing the benefits of operational excellence and deploying $7.9 billion to capital expenditures, dividends, share repurchases, and mergers and acquisitions, which was approximately $2.6 billion in excess of our operating cash flow for the year.

As we look forward, we intend to continue deploying capital to high-return opportunities, including software and services and sustainable technologies, which are intended to position our business for future growth. In 2023, we expect macroeconomic factors to remain turbulent. We continue to carry a robust backlog of $29.6 billion as of December 31, 2022, that provides a strong foundation for growth.

YEAR IN REVIEW
Sales up 3%, up 6% on an organic(1) basis, or up 7% on an organic basis excluding lost Russian sales(2)	Record backlog of	Operating cash flows of
$35.5 BILLION	$29.6 BILLION	$5.3 BILLION
as we remain focused on leveraging our robust operating model to deliver growth despite headwinds from inflation, supply chain constraints, and impacts of the Russia-Ukraine conflict	as of year-end, demonstrating strong demand in our end markets and positioning us well to convert for future growth	as we remain focused on increasing operating cash flows through revenue growth, margin expansion, and improved working capital turnover

(1)    Organic sales % change and Organic sales % change excluding lost Russian sales are non-GAAP measures. Refer to the section titled Consolidated Operating Results within Management's Discussion and Analysis of Financial Condition and Results of Operations for the definition and a reconciliation to the comparable GAAP measure.

(2)    Lost Russian sales is defined as the year-over-year decline in sales due to the decision to wind down our businesses and operations in Russia. This does not reflect management’s estimate of 2022 Russian sales absent the decision to wind down our businesses and operations in Russia.

3          Honeywell International Inc.

TABLE OF CONTENTS ABOUT HONEYWELL

BUSINESS OBJECTIVES

Our businesses are focused on the following objectives:

1	Driving profitable growth by delivering innovative products through research and development and technological excellence, and through continued enhancement of our footprint in high growth regions;
2	Continuing to execute on our strategy to be a premier software-industrial company, including the ongoing expansion of Honeywell Forge connected solutions for aircraft, buildings, cybersecurity, plants, and workers and driving a recurring revenue model across the Company. Honeywell Forge is a suite of industrial software offerings that solves complex performance, sustainability, and Operational Technology cybersecurity challenges by helping companies use operational data to drive insights that improve processes, enhance productivity, support sustainability initiatives, and empower workers;
3	Expanding margins by optimizing the Company’s performance through the integrated supply chain and Honeywell Digital transformation initiatives, commercial excellence, repositioning, and other manufacturing and operational process improvements;
4	Executing disciplined portfolio management through rigorous merger and acquisition, divestiture, and integration processes to deliver growth and shareholder value;
5	Controlling enterprise costs, including costs incurred for asbestos and environmental matters, and pension and other post-retirement benefits;
6	Increasing availability of capital through strong cash flow generation and conversion from effective working capital management and proactive management of debt to enable the Company to strategically deploy capital for acquisitions, dividends, share repurchases, and capital expenditures; and
7	Committing to uphold our environmental, social, and governance principles, as a leader in responsible corporate citizenship.

4          Honeywell International Inc.

TABLE OF CONTENTS ABOUT HONEYWELL

MAJOR BUSINESSES

We globally manage our business operations through four reportable business segments: Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions. The remainder of Honeywell's operations is presented in Corporate and All Other, which is not a reportable business segment. Financial information related to our reportable business segments is included in Note 22 Segment Financial Data of Notes to Consolidated Financial Statements.

AEROSPACE Aerospace is a leading global supplier of products, software, and services for aircrafts that it sells to original equipment manufacturers (OEM) and other customers in a variety of end markets including: air transport, regional, business and general aviation aircraft, airlines, aircraft operators, and defense and space contractors. Aerospace products and services include auxiliary power units, propulsion engines, environmental control systems, integrated avionics, wireless connectivity services, electric power systems, engine controls, flight safety, communications, navigation hardware, data and software applications, radar and surveillance systems, aircraft lighting, management and technical services, advanced systems and instruments, satellite and space components, aircraft wheels and brakes, repair and overhaul services, and thermal systems. Aerospace also provides spare parts, repair, overhaul, and maintenance services (principally to aircraft operators) for the aftermarket. Honeywell Forge solutions are leveraged by our customers as tools to turn data into predictive maintenance and predictive analytics to enable better fleet management and make flight operations more efficient.

2022 Full-year revenue of $11,827 million
2022 Full-year revenue by business unit
$2,089 million	$5,108 million	$4,630 million
Commercial Aviation Original Equipment	Commercial Aviation Aftermarket	Defense and Space

HONEYWELL BUILDING TECHNOLOGIES Honeywell Building Technologies is a leading global provider of products, software, solutions, and technologies that enable building owners and occupants to ensure their facilities are safe, energy efficient, sustainable, and productive. Honeywell Building Technologies products and services include advanced software applications for building control and optimization; sensors, switches, control systems, and instruments for energy management; access control; video surveillance; fire products; and installation, maintenance, and upgrades of systems. Honeywell Forge solutions enable our customers to digitally manage buildings, connecting data from different assets to enable smart maintenance, improve building performance, and even protect from incoming security threats.

2022 Full-year revenue of $6,000 million
2022 Full-year revenue by business unit
$3,638 million	$2,362 million
Products	Building Solutions

5          Honeywell International Inc.

TABLE OF CONTENTS ABOUT HONEYWELL

PERFORMANCE MATERIALS AND TECHNOLOGIES Performance Materials and Technologies is a global provider in developing and manufacturing high-quality performance chemicals and materials, process technologies, and automation solutions. The reportable business segment is comprised of Process Solutions, UOP, and Advanced Materials. Process Solutions provides automation control, instrumentation, advanced software, and related services for the oil and gas, refining, pulp and paper, industrial power generation, chemicals and petrochemicals, biofuels, life sciences, and metals, minerals, and mining industries. Through its smart energy products, Process Solutions enables utilities and distribution companies to deploy advanced capabilities to improve operations, reliability, and environmental sustainability. UOP provides process technology, products, including catalysts and adsorbents, equipment, and consulting services that enable customers to efficiently produce gasoline, diesel, jet fuel, petrochemicals, and renewable fuels for the petroleum refining, gas processing, petrochemical, and other industries. Advanced Materials manufactures a wide variety of high-performance products, including materials used to manufacture end products such as bullet-resistant armor, nylon, computer chips, and pharmaceutical packaging, and provides reduced and low global warming potential materials based on hydrofluoro-olefin technology. In the industrial environment, Honeywell Forge solutions enable integration and connectivity to provide a holistic view of operations and turn data into clear actions to maximize productivity and efficiency. Honeywell Forge's cybersecurity capabilities help identify risks and act on cyber-related incidents, together enabling improved operations and protecting processes, people, and assets.

2022 Full-year revenue of $10,727 million
2022 Full-year revenue by business unit
$2,404 million	$4,731 million	$3,592 million
UOP	Process Solutions	Advanced Materials

SAFETY AND PRODUCTIVITY SOLUTIONS Safety and Productivity Solutions is a leading global provider of products and software that improve productivity, workplace safety, and asset performance to customers around the globe. Sensing and Safety Technologies products include personal protection equipment (PPE), apparel, gear, and footwear; gas detection technology; custom-engineered sensors, switches, and controls for sensing and productivity solutions; and cloud-based notification and emergency messaging. Productivity Solutions and Services products and services include mobile devices and software for computing, data collection, and thermal printing; and software-based data and asset management productivity solutions. Warehouse and Workflow Solutions products and services include system design and simulation, automation solutions, performance optimization software, and lifecycle services to enable accuracy, productivity, and predictability of warehouse operations. Honeywell Forge solutions digitally automate processes to improve efficiency while reducing downtime and safety costs.

2022 Full-year revenue of $6,907 million
2022 Full-year revenue by business unit
$2,952 million	$1,619 million	$2,336 million
Sensing and Safety Technologies	Productivity Solutions and Services	Warehouse and Workflow Solutions

6          Honeywell International Inc.

TABLE OF CONTENTS ABOUT HONEYWELL

COMPETITION

We are subject to competition in substantially all product and service areas. Some of our key competitors include but are not limited to:

AEROSPACE		HONEYWELL BUILDING TECHNOLOGIES
•Garmin •L3 Harris •Northrop Grumman	•Raytheon Technologies •Safran •Thales	•Carrier Global •Johnson Controls	•Schneider Electric •Siemens

PERFORMANCE MATERIALS AND TECHNOLOGIES		SAFETY AND PRODUCTIVITY SOLUTIONS
•ABB •Arkema •Axens •Chemours	•Emerson Electric •Haldor Topsoe •Lummus Technology •Rockwell Automation	•3M •Kion Group •MSA Safety Incorporated	•TE Connectivity •Zebra Technologies

Our businesses compete on a variety of factors such as performance, applied technology, product innovation, product recognition, quality, reliability, customer service, delivery, and price. Brand identity, service to customers, and quality are important competitive factors for our products and services. Our products face considerable price competition. While our competitive position varies among our products and services, we are a significant competitor in each of our major product and service classes.

BACKLOG

Our backlog represents the estimated remaining value of work to be performed under firm contracts. Backlog is equal to our remaining performance obligations under the contracts that meet the guidance on revenue from contracts with customers as discussed in Note 3 Revenue Recognition and Contracts with Customers of Notes to Consolidated Financial Statements. Backlog was $29,558 million and $27,682 million at December 31, 2022, and 2021, respectively. We expect to recognize approximately 62% of our remaining performance obligations as revenue in 2023, and the remaining balance thereafter.

U.S. GOVERNMENT SALES

The Company, principally through our Aerospace reportable business segment, sells to the U.S. government acting through its various departments and agencies and through prime contractors, including the U.S. Department of Defense (as both a prime contractor and subcontractor). We do not expect our overall operating results to be significantly affected by any proposed changes in 2023 federal defense spending due to the varied mix of the government programs which impact us (OEM production, engineering development programs, aftermarket spares and repairs, and overhaul programs), as well as our diversified customer base.

U.S. government sales ($ in millions)	Years Ended December 31,
	2022		2021		2020
Sales to the U.S. Department of Defense	$	2,886	$	3,219	$	3,661
Sales to other U.S. government departments and agencies	546		703		557
Total sales to the U.S. government	$	3,432	$	3,922	$	4,218

7          Honeywell International Inc.

TABLE OF CONTENTS ABOUT HONEYWELL

INTERNATIONAL OPERATIONS

We engage in manufacturing, sales, service, and research and development globally. U.S. exports and non-U.S. manufactured products are significant to our operations. U.S. exports represented 12% of our total sales in 2022, 2021, and 2020. Non-U.S. manufactured products and services, mainly in Europe and Asia, were 40% of our total sales in 2022, 2021, and 2020.

Manufactured products and systems and performance of services	Year Ended December 31, 2022
	Aerospace		Honeywell Building Technologies		Performance Materials and Technologies		Safety and Productivity Solutions
	(% of Segment Sales)
U.S. exports	24	%	2	%	11	%	2	%
Non-U.S. manufactured products/services	19	%	62	%	53	%	37	%

Information related to risks related to our foreign operations is included in the section titled Risk Factors under the caption “Macroeconomic and Industry Risks.”

RAW MATERIALS

The vast majority of principal raw materials used in our operations are readily available; however, during 2022, we experienced supply chain constraints for certain raw materials. We implemented short-term and long-term mitigation strategies to reduce the impact of disruptions, including digital solutions to assist in identifying and managing shortages. Mitigation strategies include material supply tracking tools, accelerated processes to communicate supply shortages, and direct engagement with key suppliers to meet customer demand. Where we cannot procure certain raw materials, we redesigned existing products or developed new products to satisfy current and changing demand where feasible. Redesigned products, or the development of new products, undergo product quality controls and engineering qualification prior to releasing to our customers. Further, our relationships with primary and secondary suppliers allow us to reliably source raw materials. We continue to leverage existing supplier relationships and are not dependent on any one supplier for a material amount of our raw materials. We believe these mitigation strategies enable us to reduce supply risk, accelerate new product innovation, and expand our penetration in the markets we serve.

Prices of certain key raw materials are expected to fluctuate, including copper, fluorspar, tungsten salts, ethylene, aluminum, and molybdenum in our Performance Materials and Technologies reportable business segment and nickel, steel, titanium, and other metals in our Aerospace reportable business segment. We offset raw material cost increases with formula-driven or long-term supply agreements, price increases, and hedging activities where feasible. We anticipate that supply chain constraints for certain raw materials will continue into 2023; however, we believe our short-term and long-term mitigation strategies position us well to mitigate and reduce the impact these factors may have on our businesses. As such, we do not presently anticipate that a shortage of raw materials will cause any material adverse impacts during 2023.

See the section titled Risk Factors for additional information on supply chain constraints.

PATENTS, TRADEMARKS, LICENSES, AND DISTRIBUTION RIGHTS

Our reportable business segments are not dependent upon any single patent or related group of patents, trademarks, or any licenses or distribution rights. In our judgment, our intellectual property rights are adequate for the conduct of our business. We believe that, in the aggregate, the rights under our patents, trademarks, licenses, and distribution rights are generally important to our operations, but we do not consider any individual patent, trademark, or any licensing or distribution rights related to a specific process or product to be of material importance in relation to our total business.

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TABLE OF CONTENTS ABOUT HONEYWELL

REGULATIONS

Our operations are subject to various federal, state, local, and foreign government regulations, including requirements regarding the protection of human health and the environment. We design our policies, practices, and procedures to prevent unreasonable risk of environmental damage, and of resulting financial liability, in connection with our business. Some risk of environmental damage is, however, inherent in some of our operations and products, as it is with other companies engaged in similar businesses.

We engage in the handling, manufacturing, use, and disposal of many substances classified as hazardous by one or more regulatory agencies. We design policies, practices, and procedures to prevent unreasonable risk of environmental damage and personal injury, and to ensure that our handling, manufacture, use, and disposal of these substances meet or exceed environmental and safety laws and regulations. It is possible that future knowledge or other developments, such as improved capability to detect substances in the environment or increasingly strict environmental laws and standards and enforcement policies, could bring into question our current or past handling, manufacture, use, or disposal of these substances.

Among other environmental requirements, we are subject to the Federal Superfund and similar state and foreign laws and regulations, under which we have been designated as a potentially responsible party that may be liable for cleanup costs associated with current and former operating sites and various hazardous waste sites, some of which are on the U.S. Environmental Protection Agency’s National Priority List. While there is a possibility that a responsible party might be unable to obtain appropriate contribution from other responsible parties, we do not anticipate having to bear significantly more than our proportional share in multi-party situations taken as a whole.

We do not believe that Federal, State, and local provisions regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, or any existing or pending climate change legislation, regulation, or international treaties or accords are reasonably likely to have a material adverse effect in the foreseeable future on the Company’s business and we will continue to monitor emerging developments in this area.

Beyond our compliance requirements with environmental regulations, compliance with other government regulations has not had, and based on laws and regulations currently in effect, is not expected to have a material effect on our capital expenditures, earnings, or competitive position. See the section titled Risk Factors for additional information on government regulation that could impact our business.

SUSTAINABLE COMMITMENTS AND SOLUTIONS

Our commitment to being environmentally responsible is reflected in the extensive work we do to reduce greenhouse gas (GHG) emissions, increase energy efficiency, conserve water, minimize waste, and drive efficiency throughout our operations. Honeywell also champions responsible remediation projects and efforts to make our products safer and more sustainable.

CARBON NEUTRAL PLEDGE BY 2035

In 2021, we announced our commitment to be carbon neutral by 2035 in our facilities and operations. Our GHG reduction program initially began in 2004, in our view setting us well on our way to achieving this commitment. We are allocating resources each year to projects that support this target:

•Energy Efficiency Improvements. Since project tracking began in 2010, more than 6,300 sustainability projects, including building automation and controls, lighting, compressed air and gas systems, and mechanical upgrades have been implemented at our facilities. Our largest sites are required to identify their significant energy use in line with ISO 50001, obtain an energy audit on an established cycle, train personnel on energy management, and track identified projects via our standard database. This ensures a robust pipeline of both low-cost and capital projects that can be considered for execution. As of December 31, 2022, 26 Honeywell locations have achieved ISO 50001, the global energy management systems standard for establishing, implementing, maintaining, and improving energy management.

•Fleet Electrification. We developed a strategy to further improve our fleet’s fuel economy through a plan to electrify our global fleet of over 7,500 vehicles where conditions and markets allow by 2035 or earlier. In 2022, we took delivery of our first fully electric light duty vehicles (LDVs) in North America as part of an initial pilot. This pilot will inform and shape our future policies and strategy, adoption rate by business group, and vehicle class selection.

•Renewable Energy Transition. We are investing in renewable energy resources. For example, we are implementing multiple solar projects, which include solar rooftop and carport solar systems to reduce our power grid consumption.

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ESG OFFERINGS AND SOLUTIONS

We strive to lead the marketplace in sustainable technology development and help our customers meet their sustainability goals. We are innovating to solve the world’s toughest environmental, social, and governance (ESG) challenges. The graphic below demonstrates our multitude of ESG-oriented offerings and solutions.

Building on the Company’s existing technologies and demonstrating our continued commitment to and investment in sustainability-focused offerings, we launched Honeywell Forge Sustainability+. The technology provides a foundation for organizations to measure, monitor, reduce, and report their emissions performance against their carbon reduction goals. Additionally, we have established two businesses focused on sustainability offerings: Sustainable Technology Solutions and Sustainable Building Technologies.

Sustainable Technology Solutions, a business within our Performance Materials and Technologies reportable business segment, develops innovative offerings that help support a lower carbon economy. The business focuses on a broad set of solutions that are designed to help lessen the environmental impact of our customers’ end markets both now and in the future. These solutions include renewable fuels, energy storage, blue and green hydrogen, carbon capture, and plastics recycling.

Sustainable Building Technologies, a business within our Honeywell Building Technologies reportable business segment, develops innovative offerings to reduce the carbon impact of buildings and enable more energy independent communities, creating healthier spaces for occupants. Leveraging the Honeywell Forge enterprise performance management software solution’s artificial intelligence and machine learning algorithms, the business’ Carbon & Energy Management application autonomously identifies and implements energy conservation measures to help drive efficiency, resiliency, and accountability throughout a real estate portfolio. It continuously investigates, analyzes, and optimizes building performance, down to an asset-specific level, measuring critical sustainability-related key performance indicators, including carbon emissions.

Additional information regarding our sustainability initiatives and strategy is included in our 2022 Environmental, Social, and Governance Report, which can be found on our website (honeywell.com); this report is not incorporated into this Form 10-K by reference and should not be considered part of this Form 10-K.

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HUMAN CAPITAL MANAGEMENT

We believe a commitment to and investment in human capital management enables better decision-making, helps us build competitive advantage, and furthers our long-term success. As of December 31, 2022, we employed approximately 97,000(1) employees across 79 countries, 34,000(1) of whom are in the United States. Human capital management is the key driver of our performance culture, which enables our workforce to respond to the fast-changing needs of our customers.

As of December 31, 2022, we employed approximately 97,000 EMPLOYEES(1) Across 79 COUNTRIES 34,000(1) of whom are in the United States.

(1) Excludes Sandia National Laboratories (Sandia) and Kansas City National Security Campus (KCNSC) work forces of approximately 22,000 employees. Sandia and KCNSC are U.S. Department of Energy facilities. Honeywell manages these facilities as a contract operator and does not establish or control their human resource policies.

OUR CULTURE

Honeywell has built a reputation of “doing what we say.” At the center of that commitment to excellence is a high-performance culture that is rooted in our Foundational Principles and driven by the 8 Honeywell Behaviors. The 8 Behaviors reflect the bold, entrepreneurial spirit we seek to foster while emphasizing our goal to operate with speed and precision. At their foundation is a commitment to Integrity and Ethics, Inclusion and Diversity, and Workplace Respect, fundamental values that underlie everything we do.

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TABLE OF CONTENTS ABOUT HONEYWELL

Our Code of Business Conduct establishes the baseline requirements of our integrity and compliance program and promotes an environment where everyone is treated ethically and with respect. It outlines our pledge to recognize the dignity of each individual, respect each employee, provide compensation and benefits that are competitive, promote self-development through training, and value diversity of perspectives and ideas. All employees must complete Code of Business Conduct training and, where permitted by law, must also certify each year that they will comply with the Code.

Overall, we believe our culture, along with our internal tools and initiatives, enable us to effectively execute our human capital strategy. For discussion on the risks relating the ability to attract and retain top-performing talent, please see the section titled Risk Factors.

TALENT ACQUISITION AND MANAGEMENT

Our internal talent acquisition and management platform is a key component to recruiting, hiring, and developing top-performing talent. Our hiring practices consider a diverse slate of candidates and our hiring managers are provided training and toolkits to reinforce their role in bringing diverse talent into the Company. We apply a “diversity of slate” requirement, a requirement to interview at least one diverse candidate, unless an exception is approved by human resources leadership, when hiring for any exempt role in the U.S. or for any management, professional, or senior administrative role globally. Further, we partner with top academic institutions and external professional organizations to enhance the diversity of our workforce to attract and retain top talent. Our talent review process requires our people managers to have semi-annual career discussions with each member of their teams to discuss the best opportunity for growth and development, which enhances our identification of candidates for internal promotion and succession planning.

VOICE OF THE EMPLOYEE

In 2021, we introduced a Voice of the Employee feedback survey to all employees globally with the commitment to listening, learning, and taking action to make Honeywell an even better place to work. The survey provides data and tools to leaders at all levels to best drive actionable plans around employee engagement and build our desired culture that attracts and retains top talent, improves performance, and distinguishes the Company as a great place to work. The survey is conducted annually in April with a pulse survey in October.

EMPLOYEE WELL-BEING

Our well-being focus addresses physical, mental, financial, and individual needs, providing benefits and resources to help employees and their families be their best, both personally and professionally. We implemented several campaigns to promote well-being and help provide visibility to resources and available benefits. Across the world, mental health is an increasingly important issue, so we created a focused campaign – Mental Health Awareness Month – to promote a variety of resources available to support our employees and their families. We offer Employee Assistance Programs or therapy sessions to all employees and family members globally, comprehensive mental health benefits to those enrolled in the U.S. medical plan, virtual mental health options and navigation tools to improve access and speed of care, and preventive/mental health resilience programs.

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TABLE OF CONTENTS ABOUT HONEYWELL

TRAINING AND LEADERSHIP DEVELOPMENT

Investing in continuous learning and leadership development is at the core of our culture and long-term business growth strategy. Learning and training underscores our culture of development, continuous improvement, and integrity and compliance. We offer and encourage career and leadership development programs and learning available on Honeywell Accelerator.

HONEYWELL ACCELERATOR

Honeywell Accelerator is our operating system for governing and managing our business. In 2021, we revitalized our best-in-class operating system to further enhance the way we manage, govern, and operate the business day-to-day. Honeywell Accelerator's expanded tools and capabilities were designed to provide a centralized source of best practices and training materials, taking us to the next level of performance and accelerating our transformation into a software-industrial company. With over 150 learning modules and 42 role- specific learning journeys, this digital learning center creates common knowledge across the enterprise, helping new-joiner and long-time employees leverage the Honeywell operating system to make immediate, positive impacts.

In addition, our people managers are expected to model behaviors that promote a culture that is open and inclusive for all employees. We help managers develop this skill as they do any other leadership skill through training programs, interactive learning, and real-time events, including the hiring and talent review processes. Our Leadership Edge program provides training in core management skills to leaders across the organization. We deploy unconscious bias and inclusive leadership training to our global workforce to educate and influence behavior.

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TABLE OF CONTENTS ABOUT HONEYWELL

INCLUSION AND DIVERSITY

Inclusion and Diversity is at the core of all we do and drives us to build and reinforce an inclusive culture. With our global programs, we recruit, develop, retain, and promote diverse talent. We continue to build partnerships with diverse organizations and develop resources to support diverse employees. Our leaders are held accountable to actively support Inclusion and Diversity in words and actions. We further our foundational principle of Inclusion and Diversity by focusing on three key priorities:

REPRESENTATION	RETENTION	RECOGNITION
Cultivate a workforce that reflects our communities and the world	Create employee development and advancement opportunities	Be a global employer of choice for Inclusion and Diversity
Sustain a pipeline of diverse talent from campus to the C-Suite	Foster community engagement and belonging	Leverage our culture as a competitive advantage
Promote a culture of inclusion, accessibility, and respect	Offer competitive compensation, rewards, and recognition	Lead on Inclusion and Diversity practices

Our commitment to Inclusion and Diversity starts at the top with a diverse Board of Directors and executive management team, who represent a broad spectrum of backgrounds and perspectives. We believe that the diversity of our current Board of Directors (four women, including two African American, one Hispanic, and one Asian American director) and the diversity of Honeywell’s executive leadership (five of the Company’s ten executive officers are diverse by ethnic background, non-U.S. place of birth, or gender) supports our evolving business strategy and is a testament to Honeywell’s ongoing commitment to hiring, developing, and retaining diverse talent. The Company’s commitment to Inclusion and Diversity enables better decision-making, helps build competitive advantages, and furthers long-term success.

In 2020, we established a Global Inclusion and Diversity Steering Committee co-sponsored by our Chairman and CEO, Senior Vice President and General Counsel, and Senior Vice President and Chief Human Resources Officer and fortified our inclusion and diversity governance structure by embedding Inclusion and Diversity Councils in each of our business groups. The governance structure provides a scalable model that supports our nine affinity group employee networks and facilitates the introduction of new networks to reflect the diverse characteristics of our workforce. These networks are designed to provide training and development opportunities and expand internal networks for promotional opportunities.

EMPLOYEE NETWORKS

Honeywell All Abilities Employee Network	Honeywell Hispanic Employee Network
Honeywell Asian Employee Network	Honeywell LGBTQ+ Employee Network
Honeywell Black Employee Network	Honeywell Veteran's Employee Network
Honeywell Early Career Employee Network	Honeywell Women’s Employee Network
Honeywell Experienced Career Employee Network

In 2022, we dedicated the month of April to shaping an inclusive future with the first-ever Global Inclusion and Diversity month. Employees all around the world recognized and supported inclusive diversity efforts by learning from and connecting with one another. The month offered employees the opportunity to make an impact by shaping an inclusive and diverse future.

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COMMITMENT TO INCLUSION AND DIVERSITY

BOARD GENDER DIVERSITY	BOARD ETHNIC OR RACIAL DIVERSITY	EXECUTIVE OFFICER DIVERSITY

GLOBAL WORKFORCE(1)	U.S. WORKFORCE(1)
(1) As of December 31, 2022. Excludes work forces at Sandia and KCNSC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in tables and graphs in millions)

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 or the Company) for the three years ended December 31, 2022. All references to Notes relate to Notes to Consolidated Financial Statements in the section titled Financial Statements and Supplementary Data.    

A detailed discussion of the prior year 2021 to 2020 year-over-year changes is not included herein and can be found in the Management's Discussion and Analysis of Financial Condition and Results of Operations section in the 2021 Annual Report on Form 10-K filed February 11, 2022.

BUSINESS UPDATE

In July 2022, we realigned certain business units within the Safety and Productivity Solutions reportable business segment. The Safety and Retail business unit, which included our gas detection and safety business, combined with the Advanced Sensing Technologies business unit to form the Sensing and Safety Technologies business unit. This realignment provides opportunities to capitalize on shared synergies and core technologies resulting in greater value for our customers and the markets we serve. We recast historical periods to reflect this realignment.

On August 16, 2022, the U.S. federal government enacted the Inflation Reduction Act of 2022 into law. The bill includes numerous tax provisions, including a 15% corporate minimum tax as well as a 1% excise tax on share repurchases. We continue to evaluate the impact of this law on our operations; at this point, the legislation is not expected to have a material impact on our consolidated financial statements.

MACROECONOMIC CONDITIONS

Throughout 2022 and continuing into 2023, the global economy experienced and continues to experience significant supply chain disruptions, geopolitical tensions, and inflationary cost pressures.

Labor shortages continue to place a strain on our operations and the operations of our suppliers, creating challenges in procurement of materials and delivering products and services to our customers. In addition, in certain regions of Asia, the COVID-19 pandemic impacted our business operations and our customers' and suppliers' ability to operate at normal levels. We anticipate supply chain constraints and the inflationary environment to continue into 2023, and in response have implemented short-term and long-term strategies to mitigate the impact.

Mitigation strategies include pricing actions, material supply tracking tools, refinement of escalation processes to communicate supply shortages, and direct engagement with key suppliers to meet customer demand. Where we cannot procure key components or raw materials, we redesigned existing products or developed new products to satisfy current and changing demand where feasible. Redesigned products, or the development of new products, undergo product quality controls and engineering qualification prior to releasing to our customers. Further, our relationships with primary and secondary suppliers allow us to reliably source key components and raw materials. 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 new or redesigned products, we do not expect these mitigation strategies to impact product quality or reliability.

During 2022, the Russia-Ukraine conflict introduced volatility in global financial and energy markets, increasing energy costs and exacerbating existing supply chain constraints, which added to the inflationary pressures in the global economy. We continue to actively work with our suppliers to minimize impacts of supply shortages on our manufacturing capabilities, and we implemented strategies to reduce our reliance on natural gas at critical sites in Europe.

If we are not successful in sustaining or executing these strategies, these macroeconomic conditions could have a material adverse effect on our consolidated results of operations or operating cash flows.

See the section titled Review of Business Segments for additional information on the impacts of inflationary cost pressures, supply chain constraints, and labor shortages to our businesses.

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TABLE OF CONTENTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

See the section titled Risk Factors for a discussion of risks associated with the potential adverse effects of inflationary cost pressures, supply chain disruptions, and labor shortages to our businesses.

RUSSIA-UKRAINE CONFLICT

The Russia-Ukraine conflict, which began in February 2022, continues to negatively impact our businesses and operations and drive global economic and political uncertainty. In response to the Russian invasion of Ukraine, in March 2022, we suspended substantially all of our sales, distribution, and service activities in Russia and Belarus (the Suspension). In June 2022, we approved a plan to wind down our existing businesses and operations in Russia (the Wind down). During September and October 2022, we completed the sale of three entities domiciled in Russia. For our two remaining entities, we are pursuing a voluntary liquidation strategy to completely exit our businesses and operations in Russia. The Suspension and Wind down impacts all reportable business segments, with the most significant impact to our Performance Materials and Technologies reportable business segment.

In light of the humanitarian crisis created by the Russia-Ukraine conflict, we remain focused on efforts to assist and support our employees and their families impacted by the conflict. In March 2022, we created a Ukraine Relief Fund, allowing employees to make donations to support organizations providing direct assistance to Ukrainians and those that are assisting them in the midst of this humanitarian crisis. Additionally, as the conflict began, we accelerated payroll payments to those affected by the conflict and our initial Suspension of our operations.

The impacts of the initial Suspension and Wind down to revenue, net income, net assets, or cash flow from operations for the periods recognized are not material to our consolidated results of operations and consolidated financial position. For the year ended December 31, 2021, revenue from sales in Russia represented approximately 1% of our global revenues, and assets in Russia represented less than 1% of our total assets. Our estimate of potential future losses or other contingencies related to the Suspension and Wind down activities, including any guarantee payments or any litigation costs or as otherwise related to our Wind down in Russia, could adversely affect our consolidated results of operations in the periods recognized but would not be material with respect to our consolidated financial position. As the conflict evolves, existing conditions may worsen or other impacts that are unknown at this time may arise that could have a material adverse effect on our consolidated financial position.

See the section titled Review of Business Segments for additional information on the impacts of the Russia-Ukraine conflict to our businesses.

See Note 2 Acquisitions and Divestitures and Note 4 Repositioning and Other Charges of Notes to Consolidated Financial Statements for additional information on the sale of our Russian entities and charges recognized related to the Suspension and Wind down, respectively.

See the section titled Risk Factors for additional information on potential risks to our business related to the Russia-Ukraine conflict.

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TABLE OF CONTENTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Consolidated Financial Results

Net Sales by Segment

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TABLE OF CONTENTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Segment Profit by Segment

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TABLE OF CONTENTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

CONSOLIDATED OPERATING RESULTS

Net Sales

The change in net sales was attributable to the following:

	2022 Versus 2021		2021 Versus 2020
Volume	(4)	%	1	%
Price	10	%	3	%
Foreign currency translation	(3)	%	1	%
Acquisitions, divestitures, and other, net	—	%	—	%
Total % change in Net sales	3	%	5	%

2022 compared with 2021

A discussion of net sales by reportable business segment can be found in the Review of Business Segments section of this Management Discussion and Analysis.

Net sales increased due to the following:

•Increased pricing,

•Partially offset by lower sales volumes, and

•The unfavorable impact of foreign currency translation, driven by the strengthening of the U.S. Dollar against the currencies of the majority of our international markets, primarily the Euro, British Pound, Turkish Lira, Chinese Renminbi, and Australian Dollar.

Reconciliation of Reported Sales % Change to Organic Sales % Change and Organic Sales % Change Excluding Lost Russian Sales

	2022 Versus 2021		2021 Versus 2020
Total Reported % change in Net sales	3	%	5	%
Less: Foreign currency translation	(3)	%	1	%
Less: Acquisitions, divestitures, and other, net	—	%	—	%
Total Organic(1) % change in Net sales	6	%	4	%
Less: Sales decline attributable to lost Russian sales(2)	(1)	%	—	%
Total Organic % change excluding lost Russian sales	7	%	4	%

(1)    Organic sales % change, presented for all of our reportable business segments, is defined as the change in net sales, 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 non-GAAP measure is useful to investors and management in understanding the ongoing operations and analysis of ongoing operating trends.

(2)     Lost Russian sales is defined as the year-over-year decline in sales due to the decision to wind down our businesses and operations in Russia. This does not reflect management’s estimate of 2022 Russian sales absent the decision to wind down our businesses and operations in Russia.

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TABLE OF CONTENTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Cost of Products and Services Sold

2022 compared with 2021

Cost of products and services sold increased in 2022 primarily due to the following:

•Higher direct and indirect material costs and higher labor costs of approximately $1.4 billion or 6%,

•Partially offset by lower sales volumes of approximately $1 billion or 4%.

Gross Margin

2022 compared with 2021

Gross margin increased by approximately $0.6 billion and gross margin percentage increased 80 basis points to 32.8% compared to 32.0% for the same period of 2021.

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TABLE OF CONTENTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Selling, General and Administrative Expenses

2022 compared with 2021

Selling, general and administrative expenses increased primarily due to the following:

•Higher repositioning and other costs of approximately $0.2 billion or 4%, including charges and accrual of reserves directly attributable to the initial Suspension and Wind down of businesses and operations in Russia, and

•Higher labor costs of $0.1 billion or 2%.

Other (Income) Expense

	2022		2021		2020
Other (income) expense	$	(366)	$	(1,378)	$	(675)

2022 compared with 2021

Other income decreased primarily due to the following:

•Lower pension and other postretirement income of approximately $0.6 billion, and

•Net expenses related to the NARCO Buyout and HWI Sale of approximately $0.3 billion.

For additional information regarding the NARCO Buyout and HWI Sale, see Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements.

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CONDITION AND RESULTS OF OPERATIONS

Tax Expense

2022 compared with U.S. Statutory Rate

The effective tax rate for 2022 was higher than the U.S. federal statutory rate of 21% primarily due to the following:

•Tax expense from restructuring, incremental tax reserves, and state taxes, representing a 320 basis-point increase,

•Offset by benefits received from employee share-based payments and tax credits, representing a 210 basis-point decrease.

For further discussion of changes in the effective tax rate, see Note 5 Income Taxes of Notes to Consolidated Financial Statements.

Net Income Attributable to Honeywell

2022 compared with 2021

Earnings per share of common stock–assuming dilution decreased primarily due to the following:

•Higher repositioning and other charges, including charges and accrual of reserves directly attributable to the initial Suspension and Wind down of businesses and operations in Russia and net charges for the NARCO Buyout and HWI Sale, impacted earnings per share by $0.86 after tax, and

•Higher pension mark-to-market expense and lower pension income impacted earnings per share by $0.69 after tax,

•Partially offset by higher segment profit from our reportable business segments impacted earnings per share by $0.53 after tax.

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REVIEW OF BUSINESS SEGMENTS

We globally manage our business operations through four reportable business segments: Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions.

AEROSPACE

Net Sales

	2022			2021			Change 2022 vs. 2021			2020			Change 2021 vs. 2020
Net sales		$	11,827		$	11,026		7	%		$	11,544		(4)	%
Cost of products and services sold		7,747			7,191						7,813
Selling, general and administrative and other expenses		852			784						827
Segment profit		$	3,228		$	3,051		6	%		$	2,904		5	%

Factors Contributing to Year-Over-Year Change	2022 vs. 2021						2021 vs. 2020
	Net Sales			Segment Profit			Net Sales			Segment Profit
Organic		8	%		6	%		(5)	%		4	%
Foreign currency translation		(1)	%		—	%		1	%		—	%
Acquisitions, divestitures, and other, net		—	%		—	%		—	%		1	%
Total % Change		7	%		6	%		(4)	%		5	%

2022 compared with 2021

Sales increased $801 million led by organic sales growth of $967 million in Commercial Aviation Aftermarket and $379 million in Commercial Aviation Original Equipment driven by higher sales volumes in air transport and business aviation, partially offset by a decline in organic sales of $491 million in Defense and Space primarily due to supply chain constraints and the overall unfavorable impact of foreign currency translation of $54 million.

Segment profit increased $177 million and segment margin percentage decreased 40 basis points to 27.3% compared to 27.7% for the same period of 2021.

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TABLE OF CONTENTS REVIEW OF BUSINESS SEGMENTS

HONEYWELL BUILDING TECHNOLOGIES

Net Sales

	2022			2021			Change 2022 vs. 2021			2020			Change 2021 vs. 2020
Net sales		$	6,000		$	5,539		8	%		$	5,189		7	%
Cost of products and services sold		3,505			3,242						3,067
Selling, general and administrative and other expenses		1,056			1,059						1,023
Segment profit		$	1,439		$	1,238		16	%		$	1,099		13	%

Factors Contributing to Year-Over-Year Change	2022 vs. 2021						2021 vs. 2020
	Net Sales			Segment Profit			Net Sales			Segment Profit
Organic		14	%		23	%		4	%		11	%
Foreign currency translation		(6)	%		(7)	%		3	%		3	%
Acquisitions, divestitures, and other, net		—	%		—	%		—	%		(1)	%
Total % Change		8	%		16	%		7	%		13	%

2022 compared with 2021

Sales increased $461 million led by organic sales growth of $627 million in Products and $152 million in Building Solutions primarily due to increased pricing, partially offset by the unfavorable impact of foreign currency translation of $346 million.

Segment profit increased $201 million and segment margin percentage increased 160 basis points to 24.0% compared to 22.4% for the same period of 2021.

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TABLE OF CONTENTS REVIEW OF BUSINESS SEGMENTS

PERFORMANCE MATERIALS AND TECHNOLOGIES

Net Sales

	2022			2021			Change 2022 vs. 2021			2020			Change 2021 vs. 2020
Net sales		$	10,727		$	10,013		7	%		$	9,423		6	%
Cost of products and services sold		7,003			6,637						6,331
Selling, general and administrative and other expenses		1,370			1,256						1,241
Segment profit		$	2,354		$	2,120		11	%		$	1,851		15	%

Factors Contributing to Year-Over-Year Change	2022 vs. 2021						2021 vs. 2020
	Net Sales			Segment Profit			Net Sales			Segment Profit
Organic		11	%		15	%		3	%		14	%
Foreign currency translation		(4)	%		(4)	%		2	%		2	%
Acquisitions, divestitures, and other, net		—	%		—	%		1	%		(1)	%
Total % Change		7	%		11	%		6	%		15	%

2022 compared with 2021

Sales increased $714 million led by organic sales growth of $684 million in Advanced Materials and $366 million in Process Solutions primarily due to increased pricing, partially offset by the unfavorable impact of foreign currency translation of $420 million. Compared to the same period of 2021, in 2022, sales volumes decreased in Process Solutions by $171 million and in UOP by $164 million due to the Russia-Ukraine conflict.

Segment profit increased $234 million and segment margin percentage increased 70 basis points to 21.9% compared to 21.2% for the same period of 2021.

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TABLE OF CONTENTS REVIEW OF BUSINESS SEGMENTS

SAFETY AND PRODUCTIVITY SOLUTIONS

Net Sales

	2022			2021			Change 2022 vs. 2021			2020			Change 2021 vs. 2020
Net sales		$	6,907		$	7,814		(12)	%		$	6,481		21	%
Cost of products and services sold		4,779			5,738						4,532
Selling, general and administrative and other expenses		1,048			1,047						1,042
Segment profit		$	1,080		$	1,029		5	%		$	907		13	%

Factors Contributing to Year-Over-Year Change	2022 vs. 2021						2021 vs. 2020
	Net Sales			Segment Profit			Net Sales			Segment Profit
Organic		(9)	%		9	%		22	%		14	%
Foreign currency translation		(3)	%		(3)	%		2	%		2	%
Acquisitions, divestitures, and other, net		—	%		(1)	%		(3)	%		(3)	%
Total % Change		(12)	%		5	%		21