UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

__________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

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)

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1 per share	HON	The Nasdaq Stock Market LLC
3.500% Senior Notes due 2027	HON 27	The Nasdaq Stock Market LLC
2.250% Senior Notes due 2028	HON 28A	The Nasdaq Stock Market LLC
3.375% Senior Notes due 2030	HON 30	The Nasdaq Stock Market LLC
0.750% Senior Notes due 2032	HON 32	The Nasdaq Stock Market LLC
3.750% Senior Notes due 2032	HON 32A	The Nasdaq Stock Market LLC
4.125% Senior Notes due 2034	HON 34	The Nasdaq Stock Market LLC
3.750% Senior Notes due 2036	HON 36	The Nasdaq Stock Market LLC

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

There were 649,671,200 shares of Common Stock outstanding at June 30, 2024.

TABLE OF CONTENTS

	Cautionary Statement about Forward-Looking Statements	1
	About Honeywell	2
PART I	Financial Information
ITEM 1	Financial Statements and Supplementary Data (unaudited):	3
	Consolidated Statement of Operations (unaudited) – Three and Six Months Ended June 30, 2024, and 2023	3
	Consolidated Statement of Comprehensive Income (unaudited) – Three and Six Months Ended June 30, 2024, and 2023	4
	Consolidated Balance Sheet (unaudited) – June 30, 2024, and December 31, 2023	5
	Consolidated Statement of Cash Flows (unaudited) – Six Months Ended June 30, 2024, and 2023	6
	Consolidated Statement of Shareowners' Equity (unaudited) – Three and Six Months Ended June 30, 2024, and 2023	7
	Note 1 – Basis of Presentation	8
	Note 2 – Summary of Significant Accounting Policies	8
	Note 3 – Acquisitions and Divestitures	9
	Note 4 – Revenue Recognition and Contracts with Customers	11
	Note 5 – Repositioning and Other Charges	14
	Note 6 – Income Taxes	16
	Note 7 – Inventories	16
	Note 8 – Goodwill and Other Intangible Assets—Net	17
	Note 9 – Long-term Debt and Credit Agreements	18
	Note 10 – Leases	19
	Note 11 – Derivative Instruments and Hedging Transactions	20
	Note 12 – Fair Value Measurements	23
	Note 13 – Earnings Per Share	24
	Note 14 – Accumulated Other Comprehensive Income (Loss)	25
	Note 15 – Commitments and Contingencies	25
	Note 16 – Pension Benefits	30
	Note 17 – Other (Income) Expense	30
	Note 18 – Segment Financial Data	31
	Note 19 – Subsequent Events	33
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
ITEM 3	Quantitative and Qualitative Disclosures about Market Risks	53
ITEM 4	Controls and Procedures	53
PART II	Other Information
ITEM 1	Legal Proceedings	54
ITEM 1A	Risk Factors	54
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	54
ITEM 4	Mine Safety Disclosures	55
ITEM 5	Other Information	55
ITEM 6	Exhibits	56
	Signatures	57

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 Part II, Item 1A 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, 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 Form 10-Q can or will be achieved. These forward-looking statements should be considered in light of the information included in this report and our other filings with the Securities and Exchange Commission (SEC), including, without limitation, the Risk Factors, as well as the description of trends and other factors in Management’s Discussion and Analysis of Financial Condition and Results of Operations, set forth in this report and our 2023 Annual Report on Form 10-K. Any forward-looking plans described herein are not final and may be modified or abandoned at any time.

1    Honeywell International Inc.

ABOUT HONEYWELL

Honeywell International Inc. (Honeywell, we, us, our, or the Company) is an integrated operating company serving a broad range of industries and geographies around the world. Our portfolio of solutions is 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 SEC. Honeywell uses our Investor Relations website, along with press releases on our primary Honeywell website (honeywell.com) under the heading News & Media, 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 and Honeywell News feed, 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 Quarterly Report on Form 10-Q or any other report or document we file with the SEC. Any reference to our website in this Form 10-Q is intended to be an inactive textual reference only.

2    Honeywell International Inc.

PART I. FINANCIAL INFORMATION

The financial statements and related notes as of June 30, 2024, should be read in conjunction with the financial statements for the year ended December 31, 2023, contained in the Company's 2023 Annual Report on Form 10-K.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

HONEYWELL INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(Dollars in millions, except per share amounts)
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 sold	4,247		4,133		8,282		8,201
Cost of services sold	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 expenses	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 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

The Notes to Consolidated Financial Statements are an integral part of this statement.

3    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(Dollars in millions)
Net income	$	1,560	$	1,501	$	3,035	$	2,909
Other comprehensive income (loss), net of tax
Foreign exchange translation adjustment	5		(77)		59		(135)
Pension and other postretirement benefit adjustments	(5)		(12)		(10)		(24)
Changes in fair value of available for sale investments	(1)		9		(1)		3
Cash flow hedges recognized in other comprehensive income (loss)	(14)		14		4		30
Less: Reclassification adjustment for gains (losses) included in net income	12		11		16		13
Changes in fair value of cash flow hedges	(26)		3		(12)		17
Other comprehensive income (loss), net of tax	(27)		(77)		36		(139)
Comprehensive income	1,533		1,424		3,071		2,770
Less: Comprehensive income attributable to the noncontrolling interest	16		10		4		25
Comprehensive income attributable to Honeywell	$	1,517	$	1,414	$	3,067	$	2,745

The Notes to Consolidated Financial Statements are an integral part of this statement.

4    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

CONSOLIDATED BALANCE SHEET

(Unaudited)

	June 30, 2024		December 31, 2023
	(Dollars in millions)
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
Capital—common stock issued	958		958
—additional paid-in capital	9,495		9,062
Common stock held in treasury, at cost	(39,007)		(38,008)
Accumulated other comprehensive income (loss)	(4,075)		(4,135)
Retained earnings	49,576		47,979
Total Honeywell shareowners’ equity	16,947		15,856
Noncontrolling interest	563		578
Total shareowners’ equity	17,510		16,434
Total liabilities, redeemable noncontrolling interest and shareowners’ equity	$	69,329	$	61,525

The Notes to Consolidated Financial Statements are an integral part of this statement.

5    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2024		2023
	(Dollars in millions)
Cash flows from operating activities
Net income	$	3,035	$	2,909
Less: Net income attributable to noncontrolling interest	28		28
Net income attributable to Honeywell	3,007		2,881
Adjustments to reconcile net income attributable to Honeywell to net cash provided by (used for) operating activities
Depreciation	329		327
Amortization	271		240
Repositioning and other charges	137		243
Net payments for repositioning and other charges	(211)		(195)
NARCO Buyout payment	—		(1,325)
Pension and other postretirement income	(295)		(273)
Pension and other postretirement benefit payments	(15)		(23)
Stock compensation expense	108		109
Deferred income taxes	(36)		196
Other	(583)		(643)
Changes in assets and liabilities, net of the effects of acquisitions and divestitures
Accounts receivable	(149)		(505)
Inventories	(77)		(338)
Other current assets	227		208
Accounts payable	(423)		114
Accrued liabilities	(471)		(440)
Net cash provided by operating activities	1,819		576
Cash flows from investing activities
Capital expenditures	(492)		(426)
Proceeds from disposals of property, plant and equipment	—		13
Increase in investments	(468)		(229)
Decrease in investments	392		632
Receipts (payments) from settlements of derivative contracts	76		(38)
Cash paid for acquisitions, net of cash acquired	(4,913)		(661)
Net cash used for investing activities	(5,405)		(709)
Cash flows from financing activities
Proceeds from issuance of commercial paper and other short-term borrowings	6,993		8,000
Payments of commercial paper and other short-term borrowings	(4,489)		(7,930)
Proceeds from issuance of common stock	309		115
Proceeds from issuance of long-term debt	5,710		2,966
Payments of long-term debt	(605)		(1,384)
Repurchases of common stock	(1,200)		(1,176)
Cash dividends paid	(1,446)		(1,416)
Other	26		(38)
Net cash provided by (used for) financing activities	5,298		(863)
Effect of foreign exchange rate changes on cash and cash equivalents	(61)		(5)
Net increase (decrease) in cash and cash equivalents	1,651		(1,001)
Cash and cash equivalents at beginning of period	7,925		9,627
Cash and cash equivalents at end of period	$	9,576	$	8,626

The Notes to Consolidated Financial Statements are an integral part of this statement.

6    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	Shares	$		Shares	$		Shares	$		Shares	$
	(In millions, except per share amounts)
Common stock, par value	957.6	958		957.6	958		957.6	958		957.6	958
Additional paid-in capital
Beginning balance		9,353			8,774			9,062			8,564
Issued for employee savings and option plans		87			42			289			193
Stock compensation expense		55			50			108			109
Impact of Quantinuum contribution		—			—			36			—
Ending balance		9,495			8,866			9,495			8,866
Treasury stock
Beginning balance	(306.4)	(38,544)		(291.9)	(35,072)		(305.8)	(38,008)		(290.0)	(34,443)
Reacquired stock or repurchases of common stock	(2.7)	(529)		(2.5)	(477)		(6.1)	(1,200)		(6.0)	(1,176)
Issued for employee savings and option plans	1.2	66		0.8	39		4.0	201		2.4	109
Ending balance	(307.9)	(39,007)		(293.6)	(35,510)		(307.9)	(39,007)		(293.6)	(35,510)
Retained earnings
Beginning balance		48,735			45,797			47,979			45,093
Net income attributable to Honeywell		1,544			1,487			3,007			2,881
Dividends on common stock		(703)			(688)			(1,410)			(1,378)
Ending balance		49,576			46,596			49,576			46,596
Accumulated other comprehensive income (loss)
Beginning balance		(4,048)			(3,538)			(4,135)			(3,475)
Foreign exchange translation adjustment		5			(73)			83			(132)
Pension and other postretirement benefit adjustments		(5)			(12)			(10)			(24)
Changes in fair value of available for sale investments		(1)			9			(1)			3
Changes in fair value of cash flow hedges		(26)			3			(12)			17
Ending balance		(4,075)			(3,611)			(4,075)			(3,611)
Noncontrolling interest
Beginning balance		591			596			578			622
Net income attributable to noncontrolling interest		16			14			28			28
Foreign exchange translation adjustment		—			(4)			(24)			(3)
Dividends paid		(44)			(11)			(48)			(52)
Contributions from noncontrolling interest holders		—			—			29			—
Ending balance		563			595			563			595
Total shareowners' equity	649.7	17,510		664.0	17,894		649.7	17,510		664.0	17,894
Cash dividends per share of common stock		$	1.08		$	1.03		$	2.16		$	2.06

The Notes to Consolidated Financial Statements are an integral part of this statement.

7    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in tables in millions, except per share amounts)

NOTE 1. BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited Consolidated Financial Statements reflect all adjustments necessary to present fairly the financial position, results of operations, cash flows, and shareowners' equity of Honeywell International Inc. and its consolidated subsidiaries (Honeywell or the Company) for the periods presented. The interim results of operations and cash flows should not necessarily be taken as indicative of the entire year.

Honeywell reports its quarterly financial information using a calendar convention; the first, second, and third quarters are consistently reported as ending on March 31, June 30, and September 30, respectively. It is Honeywell's practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires Honeywell's businesses to close their books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on the Company's business processes. The effects of this practice are generally not significant to reported results for any quarter and only exist within a reporting year. In the event differences in actual closing dates are material to year-over-year comparisons of quarterly or year-to-date results, Honeywell will provide appropriate disclosures. Honeywell's actual closing dates for the three and six months ended June 30, 2024, and 2023, were June 29, 2024, and July 1, 2023, respectively.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the Company are set forth in Note 1 Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements in the Company’s 2023 Annual Report on Form 10-K. The Company includes herein certain updates to those policies.

RECLASSIFICATIONS

Certain prior year amounts are reclassified to conform to the current year presentation.

During the first quarter of 2024, the Company realigned certain of its business units as reflected in Note 18 Segment Financial Data, which impacted the composition of its reportable segments. The Company recast historical periods to reflect this change in segment presentation.

SUPPLY CHAIN FINANCING

Amounts outstanding related to supply chain financing programs are included in Accounts payable in the Consolidated Balance Sheet. Accounts payable included approximately $1,017 million and $1,112 million as of June 30, 2024, and December 31, 2023, respectively. The impact of these programs is not material to the Company's overall liquidity.

RECENT ACCOUNTING PRONOUNCEMENTS

The Company considers the applicability and impact of all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures, which requires greater disaggregation of income tax disclosures. The new standard requires additional information to be disclosed with respect to the income tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU should be applied prospectively for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating the impacts of this guidance on the Company’s Consolidated Financial Statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires companies to enhance the disclosures about segment expenses. The new standard requires the disclosure of the Company’s Chief Operating Decision Maker (CODM), expanded incremental line-item disclosures of significant segment expenses used by the CODM for decision-making, and the inclusion of previous annual only segment disclosure requirements on a quarterly basis. This ASU should be applied retrospectively for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impacts of this guidance on the Company’s Consolidated Financial Statements.

8    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in tables in millions, except per share amounts)

In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Topic 405): Disclosure of Supplier Finance Program Obligations, to enhance the transparency of supplier finance programs. The new standard requires annual disclosure of the key terms of the program, a description of where in the financial statements amounts outstanding under the program are presented, a rollforward of such amounts, and interim disclosure of amounts outstanding as of the end of each period. The guidance does not affect recognition, measurement, or financial statement presentation of supplier finance programs. The ASU was effective on January 1, 2023, except for the rollforward, which became effective on January 1, 2024, for annual disclosures. The Company adopted this guidance on January 1, 2023, with the exception of the rollforward adopted on January 1, 2024. The adoption of this standard does not have a material impact on the Company’s Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company’s Consolidated Financial Statements.

NOTE 3. ACQUISITIONS AND DIVESTITURES

ACQUISITIONS

On July 10, 2024, the Company announced its intention to acquire Air Products' liquefied natural gas process technology and equipment business in an all-cash transaction of approximately $1.8 billion. The transaction is not subject to any financing condition but is subject to regulatory review and approval and customary closing conditions. The transaction is expected to close in the second half of 2024 and the business will be reported within the Energy and Sustainability Solutions reportable business segment.

On June 20, 2024, the Company announced its intention to acquire CAES Systems Holdings LLC from private equity firm Advent International in an all-cash transaction of approximately $1.9 billion. The transaction is not subject to any financing condition but is subject to regulatory review and approval and customary closing conditions. The transaction is expected to close in the second half of 2024 and the business will be reported within the Aerospace Technologies reportable business segment.

On June 3, 2024, the Company acquired 100% of the outstanding equity interests of Carrier Global Corporation's Global Access Solutions business (Access Solutions), an innovative global leader in advanced access and security solutions, electronic locking systems, and contactless mobile key solutions, for total consideration of $4,913 million, net of cash acquired. The business is included in the Building Automation reportable business segment. The following table summarizes the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed that are included in the Consolidated Balance Sheet as of June 30, 2024:

Current assets	$	244
Intangible assets	2,050
Other noncurrent assets	20
Current liabilities	(133)
Noncurrent liabilities	(65)
Net assets acquired	2,116
Goodwill	2,878
Purchase price	$	4,994

The Access Solutions identifiable intangible assets primarily include customer relationships, technology, and trademarks that are being amortized over their estimated useful lives ranging from 10 to 20 years using straight line and accelerated amortization methods. The majority of the goodwill is deductible for tax purposes. As of June 30, 2024, the purchase accounting for Access Solutions is subject to final adjustment, primarily for the valuation of intangible assets, amounts allocated to goodwill, working capital adjustments, and tax balances.

9    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in tables in millions, except per share amounts)

On March 27, 2024, the Company announced its intention to acquire Civitanavi Systems S.p.A. in an all-cash transaction for approximately €200 million. The transaction is not subject to any financing condition but is subject to regulatory review and approval, the tender into the offer of at least 95% of Civitanavi Systems S.p.A.’s outstanding shares, and customary closing conditions. The transaction is expected to close by the end of the third quarter of 2024 and the business will be reported within the Aerospace Technologies reportable business segment.

On August 25, 2023, the Company acquired 100% of the outstanding equity interests of SCADAfence, a provider of operational technology and Internet of Things cybersecurity solutions for monitoring large scale networks, for total consideration of $52 million, net of cash acquired. The business is included in the Industrial Automation reportable business segment. The assets and liabilities acquired with SCADAfence are included in the Consolidated Balance Sheet as of June 30, 2024, including $17 million of intangible assets and $42 million of goodwill, which is not deductible for tax purposes. The purchase accounting is subject to final adjustment, primarily for the value of intangible assets, amounts allocated to goodwill, and tax balances.

On June 30, 2023, the Company acquired 100% of the outstanding equity interests of Compressor Controls Corporation, a turbomachinery services and controls company based in the United States, for total cash consideration of $673 million, net of cash acquired. The business is included in the Industrial Automation reportable business segment. The assets and liabilities acquired with Compressor Controls Corporation are included in the Consolidated Balance Sheet as of June 30, 2024, including $282 million of intangible assets and $351 million allocated to goodwill, which is deductible for tax purposes. The identifiable intangible assets primarily include customer relationships amortized over an estimated life of 15 years using an excess earnings amortization method. The Company finalized the evaluation for the fair value of all the assets and liabilities acquired with Compressor Controls Corporation during the second quarter of 2024.

DIVESTITURES

For the six months ended June 30, 2024, and 2023, there were no significant divestitures that closed individually or in the aggregate.

10    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in tables in millions, except per share amounts)

NOTE 4. REVENUE RECOGNITION AND CONTRACTS WITH CUSTOMERS

The Company has a comprehensive offering of products and services, including software and technologies, that are sold to a variety of customers in multiple end markets. See the following disaggregated revenue table and related discussions by reportable business segment for details:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Aerospace Technologies
Commercial Aviation Original Equipment	$	668	$	607	$	1,342	$	1,148
Commercial Aviation Aftermarket	1,798		1,533		3,457		2,956
Defense and Space	1,425		1,201		2,761		2,348
Net Aerospace Technologies sales	3,891		3,341		7,560		6,452
Industrial Automation
Sensing and Safety Technologies	466		518		916		1,011
Productivity Solutions and Services	298		329		620		690
Process Solutions	1,509		1,482		3,005		2,967
Warehouse and Workflow Solutions	233		398		443		862
Net Industrial Automation sales	2,506		2,727		4,984		5,530
Building Automation
Products	908		918		1,721		1,826
Building Solutions	663		592		1,276		1,171
Net Building Automation sales	1,571		1,510		2,997		2,997
Energy and Sustainability Solutions
UOP	599		623		1,176		1,188
Advanced Materials	1,005		944		1,953		1,840
Net Energy and Sustainability Solutions sales	1,604		1,567		3,129		3,028
Corporate and All Other	5		1		12		3
Net sales	$	9,577	$	9,146	$	18,682	$	18,010

In April 2024, the Company realigned certain business units within the Industrial Automation reportable business segment. The gas detection business moved from the Sensing and Safety Technologies business unit to the Process Solutions business unit to align with the process measurement controls business. The Company recast historical periods to reflect this realignment.

Aerospace Technologies – A 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 Technologies 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, and thermal systems. Aerospace Technologies also provides spare parts, repair, overhaul, and maintenance services (principally to aircraft operators), and sells licenses or intellectual property to other parties. Honeywell Forge solutions enable customers to turn data into predictive maintenance and predictive analytics to enable better fleet management and make flight operations more efficient.

11    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in tables in millions, except per share amounts)

Industrial Automation – A global provider of industrial automation solutions that deliver intelligent, sustainable, and secure operations for customers in oil and gas, petrochemicals, life sciences, metals and mining, and warehouse and logistics segments. With millions of installed assets, Industrial Automation deploys outcome-based solutions to increase asset utilization; improve operational efficiency and labor productivity; reduce carbon emissions with less energy consumption; and enhance cyber security for critical infrastructure and operational assets. Industrial Automation offerings include automation control and instrumentation products and services; smart energy products; sensing technologies with an array of custom-engineered sensors and services; gas detection technologies and personal protective equipment; and system design, advanced automation equipment, software and analytics for manufacturing, distribution and fulfillment operations. These products and services are combined with proprietary machine learning and artificial intelligence algorithms in products and projects which are digitally enabled through the Company's industry leading industrial Internet of Things (IoT) platform, Honeywell Forge.

Building Automation – A 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. Building Automation 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 customers to digitally manage buildings, connecting data from different assets to enable smart maintenance, improve building performance, and even protect from incoming security threats.

Energy and Sustainability Solutions – A global provider of industry leading technology, processing, and licensing capabilities combined with material science capabilities and innovative chemistry to offer focused solutions that are integral to facilitating the world's energy transition. The reportable business segment is comprised of UOP and Advanced Materials business units. The UOP business provides sustainable aviation fuels, petrochemical and refining technologies, and carbon management solutions across multiple sectors through process technology solutions, products, including catalysts and adsorbents, equipment and aftermarket services. The Advanced Materials business provides customers with its Solstice lower global warming potential refrigeration and heating solutions, Spectra fibers for high end protective armor and medical applications, and leading-edge semiconductor materials. Honeywell Forge solutions serve customer asset productivity and efficiency needs by providing connectivity, data integration, and software solutions to generate a holistic view of their operations.

Corporate and All Other – Corporate and All Other includes revenue from Honeywell's majority-owned investment in Quantinuum. Through Quantinuum, Honeywell provides a wide range of service offerings of fully integrated quantum computing hardware and software solutions.

For a summary by disaggregated product and services sales for each reportable business segment, refer to Note 18 Segment Financial Data.

The Company recognizes revenue arising from performance obligations outlined in contracts with its customers that are satisfied at a point in time and over time. The disaggregation of the Company's revenue based off timing of recognition is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Products, transferred point in time	57	%	58	%	57	%	58	%
Products, transferred over time	11		12		11		13
Net product sales	68		70		68		71
Services, transferred point in time	5		11		5		9
Services, transferred over time	27		19		27		20
Net service sales	32		30		32		29
Net sales	100	%	100	%	100	%	100	%

CONTRACT BALANCES

The Company tracks progress on satisfying performance obligations under contracts with customers. The related billings and cash collections are recorded in the Consolidated Balance Sheet in Accounts receivable—net and Other assets (unbilled receivables (contract assets) and billed receivables), and Accrued liabilities and Other liabilities (customer advances and deposits (contract liabilities)). Unbilled receivables arise when the timing of cash collected from customers differs from the timing of revenue recognition, such as when contract provisions require specific milestones to be met before a customer can be billed. Contract assets are recognized when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. Contract liabilities are recorded when customers remit contractual cash payments in advance of the Company satisfying performance obligations under contractual arrangements, including those with performance obligations to be satisfied over a period of time. Contract liabilities are derecognized when revenue is recorded, either when a milestone is met triggering the contractual right to bill or when the performance obligation is satisfied.

12    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in tables in millions, except per share amounts)

Contract balances are classified as assets or liabilities on a contract-by-contract basis at the end of each reporting period.

The following table summarizes the Company's contract assets and liabilities balances:

	2024		2023
Contract assets—January 1	$	2,013	$	2,294
Contract assets—June 30	2,072		2,438
Change in contract assets—increase (decrease)	$	59	$	144
Contract liabilities—January 1	$	(4,326)	$	(4,583)
Contract liabilities—June 30	(4,096)		(4,179)
Change in contract liabilities—decrease (increase)	$	230	$	404
Net change	$	289	$	548

For the three and six months ended June 30, 2024, the Company recognized revenue of $494 million and $1,487 million, respectively, that was previously included in the beginning balance of contract liabilities. For the three and six months ended June 30, 2023, the Company recognized revenue of $528 million and $1,481 million, respectively, that was previously included in the beginning balance of contract liabilities.

Contract assets included $1,968 million and $1,949 million of unbilled balances under long-term contracts as of June 30, 2024, and December 31, 2023, respectively. These amounts are billed in accordance with the terms of customer contracts to which they relate.

When contracts are modified to account for changes in contract specifications and requirements, the Company considers whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications for goods or services and not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the Company's measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct and at relative stand-alone selling price, they are accounted for as a new contract and performance obligation, which are recognized prospectively.

PERFORMANCE OBLIGATIONS

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When contracts with customers require highly complex integration or manufacturing services not separately identifiable from other promises in the contracts and, therefore, are not distinct, the entire contract is accounted for as a single performance obligation. In situations when the Company's contracts include distinct goods or services that are substantially the same and have the same pattern of transfer to the customer over time, they are recognized as a series of distinct goods or services. For any contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the estimated relative stand-alone selling price of each distinct good or service in the contract. For product sales, each product sold to a customer typically represents a distinct performance obligation. In such cases, the observable stand-alone sales are used to determine the stand-alone selling price.

Performance obligations are satisfied as of a point in time or over time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services, or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract.

13    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in tables in millions, except per share amounts)

The following table outlines the Company's remaining performance obligations disaggregated by reportable business segment:

	June 30, 2024
Aerospace Technologies	$	13,724
Industrial Automation	5,880
Building Automation	7,707
Energy and Sustainability Solutions	4,667
Corporate and All Other1	32
Total performance obligations	$	32,010

1 The remaining performance obligations within Corporate and All Other relate to the Quantinuum business.

Performance obligations recognized as of June 30, 2024, will be satisfied over the course of future periods. The Company's disclosure of the timing for satisfying the performance obligation is based on the requirements of contracts with customers. However, from time to time, these contracts may be subject to modifications, impacting the timing of satisfying the performance obligations. Performance obligations expected to be satisfied within one year and greater than one year are 57% and 43%, respectively.

The timing of satisfaction of the Company's performance obligations does not significantly vary from the typical timing of payment. Typical payment terms of the Company's fixed price over time contracts include progress payments based on specified events or milestones or based on project progress. For some contracts, the Company may be entitled to receive an advance payment.

The Company applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which the Company recognizes revenue in proportion to the amount the Company has the right to invoice for services performed.

NOTE 5. REPOSITIONING AND OTHER CHARGES

A summary of net repositioning and other charges follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Severance	$	20	$	19	$	53	$	86
Asset impairments	1		9		2		21
Exit costs	18		38		33		62
Reserve adjustments	(12)		(12)		(27)		(17)
Total net repositioning charges	27		54		61		152
Asbestos-related charges, net of insurance and reimbursements	18		34		36		55
Probable and reasonably estimable environmental liabilities, net of reimbursements	(1)		12		23		34
Other charges	—		2		17		2
Total net repositioning and other charges	$	44	$	102	$	137	$	243

The following table summarizes the pre-tax distribution of total net repositioning and other charges by classification in the Consolidated Statement of Operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of products and services sold	$	28	$	63	$	86	$	143
Selling, general and administrative expenses	16		26		34		91
Other (income) expense	—		13		17		9
Total net repositioning and other charges	$	44	$	102	$	137	$	243

14    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in tables in millions, except per share amounts)

The following table summarizes the pre-tax amount of total net repositioning and other charges by reportable business segment. These amounts are excluded from segment profit as described in Note 18 Segment Financial Data:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Aerospace Technologies	$	3	$	8	$	8	$	11
Industrial Automation	11		41		28		89
Building Automation	(4)		4		—		31
Energy and Sustainability Solutions	1		(6)		19		5
Corporate and All Other	33		55		82		107
Total net repositioning and other charges	$	44	$	102	$	137	$	243

NET REPOSITIONING CHARGES

In the three months ended June 30, 2024, the Company recognized gross repositioning charges totaling $39 million, including severance costs of $20 million related to workforce reductions of 645 manufacturing and administrative positions primarily in the Company's Industrial Automation reportable business segment and corporate function. The workforce reductions related to productivity and ongoing functional transformation initiatives. The repositioning charges included asset impairments of $1 million related to the write-down of certain assets within the Company's corporate function. The repositioning charges also included exit costs of $18 million related to current period costs incurred for closure obligations associated with site transitions primarily in the Company's Industrial Automation reportable business segment and corporate function. Also, $12 million of previously established reserves, primarily for severance, were returned to income due to higher-than-expected voluntary exits and adjustments to the scope of previously announced repositioning actions.

In the three months ended June 30, 2023, the Company recognized gross repositioning charges totaling $66 million, including severance costs of $19 million related to workforce reductions of 764 manufacturing and administrative positions primarily in the Company's Industrial Automation reportable business segment. The workforce reductions related to productivity and ongoing functional transformation initiatives. The repositioning charges included asset impairments of $9 million primarily related to the write-down of certain assets within the Company's Industrial Automation reportable business segment. The repositioning charges also included exit costs of $38 million related to current period costs incurred for closure obligations associated with site transitions across all of the Company's reportable business segments and corporate function. Also, $12 million of previously established reserves, primarily for severance, were returned to income due to adjustments to the scope of previously announced repositioning actions.

In the six months ended June 30, 2024, the Company recognized gross repositioning charges totaling $88 million, including severance costs of $53 million related to workforce reductions of 2,007 manufacturing and administrative positions primarily in the Company's Industrial Automation reportable business segment and corporate function. The workforce reductions related to productivity and ongoing functional transformation initiatives. The repositioning charges included asset impairments of $2 million related to the write-down of certain assets within the Company's Industrial Automation reportable business segment. The repositioning charges also included exit costs of $33 million related to current period costs incurred for closure obligations associated with site transitions primarily in the Company's Industrial Automation reportable business segment and corporate function. Also, $27 million of previously established reserves, primarily for severance, were returned to income due to adjustments to the scope of previously announced repositioning actions.

In the six months ended June 30, 2023, the Company recognized gross repositioning charges totaling $169 million, including severance costs of $86 million related to workforce reductions of 2,561 manufacturing and administrative positions primarily in the Company's Industrial Automation and Building Automation reportable business segments. The workforce reductions primarily related to productivity and ongoing functional transformation initiatives. The repositioning charges included asset impairments of $21 million related to the write-down of certain assets within the Company's Industrial Automation reportable business segment. The repositioning charges also included exit costs of $62 million related to current period costs incurred for closure obligations associated with site transitions across all of the Company's reportable business segments and corporate function. Also, $17 million of previously established reserves, primarily for severance, were returned to income due to adjustments to the scope of previously announced repositioning actions.

15    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in tables in millions, except per share amounts)

The following table summarizes the status of the Company's total repositioning reserves:

	Severance Costs		Asset Impairments		Exit Costs		Total
Balance at December 31, 2023	$	188	$	—	$	91	$	279
Charges	53		2		33		88
Usage—cash	(56)		—		(53)		(109)
Usage—noncash	—		—		—		—
Foreign currency translation	—		—		—		—
Adjustments	(18)		(2)		(7)		(27)
Balance at June 30, 2024	$	167	$	—	$	64	$	231

Certain repositioning projects will recognize exit costs in future periods when the actual liability is incurred. Such exit costs incurred in the six months ended June 30, 2024, and 2023, were $26 million and $25 million, respectively.

OTHER CHARGES

In 2022, the Company recognized $295 million of Other charges related to the initial suspension and the wind down of the Company's business and operations in Russia. These costs impacted all reportable business segments, with the most significant impact within the historical Performance Materials and Technologies reportable business segment. The Other charges include costs recorded in Cost of products sold, Selling, general and administrative expenses, or Other (income) expense in the Consolidated Statement of Operations. During the six months ended June 30, 2024, the Company recognized Other charges of $17 million related to the settlement of a contractual dispute with a Russian entity associated with the Company's suspension and wind down activities in Russia. The charges were recorded in Other (income) expense in the Consolidated Statement of Operations.

Given the uncertainty inherent in the Company's remaining obligations related to contracts with Russian counterparties, the Company does not believe it is possible to develop estimates of reasonably possible loss in excess of current accruals for these matters (other than as specifically set forth above). Based on available information to date, the Company’s estimate of potential future losses or other contingencies related to the wind down of activities, including any guarantee payments or any litigation costs or as otherwise related to the Company's wind down in Russia, could adversely affect the Company's consolidated results of operations in the periods recognized but would not be material with respect to the Company's consolidated financial position. See Note 15 Commitments and Contingencies for a discussion of the recognition and measurement of estimate for contingencies.

During the three and six months ended June 30, 2023, the Company recorded a fair value adjustment, within Asbestos-related charges, net of insurance and reimbursements in the table above and Other (income) expense on the Consolidated Statement of Operations, related to HWI Net Sale Proceeds (as defined in Note 15 Commitments and Contingencies) and reduced the estimate by $11 million. See Note 12 Fair Value Measurements and Note 15 Commitments and Contingencies for further discussion.

NOTE 6. INCOME TAXES

The effective tax rate was higher than the U.S. federal statutory rate of 21% and remained unchanged in 2024 compared to 2023 due to increased benefit from taxes on non-U.S. earnings and employee share-based compensation deductions, offset by incremental expense from tax reserve activity and foreign tax matters.

NOTE 7. INVENTORIES

	June 30, 2024		December 31, 2023
Raw materials	$	1,534	$	1,704
Work in process	1,268		1,217
Finished products	3,522		3,257
Total Inventories	$	6,324	$	6,178

16    Honeywell International Inc.

HONEYWELL INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in tables in millions, except per share amounts)

NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS—NET

The following table summarizes the change in the carrying amount of goodwill for the six months ended June 30, 2024, by reportable business segment:

	December 31, 2023		Acquisitions/ Divestitures		Currency Translation Adjustment		June 30, 2024
Aerospace Technologies	$	2,386	$	—	$	(3)	$	2,383
Industrial Automation	9,650		—		(66)		9,584
Building Automation	3,380		2,878		(32)		6,226
Energy and Sustainability Solutions	1,727		—		(3)		1,724
Corporate and All Other	906		—		1		907
Total Goodwill	$	18,049	$	2,878	$	(103)	$