HONEYWELL INTERNATIONAL INC

TABLE OF CONTENTS

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

Sales increased $1,797 million due to higher organic sales of $1,148 million in Commercial Aviation Aftermarket driven by higher sales volumes in air transport due to an increase in flight hours, higher organic sales of $361 million in Defense and Space driven by higher sales volumes due to increased shipments, and higher organic sales of $315 million for Commercial Aviation Original Equipment driven by higher sales volumes due to increased shipments.

Segment profit increased $513 million and segment margin percentage increased 20 basis points to 27.5% compared to 27.3% for the same period of 2022.

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HONEYWELL BUILDING TECHNOLOGIES

Sales increased $31 million due to higher organic sales growth of $145 million in Building Solutions driven by increased pricing in building projects and services, partially offset by the unfavorable impact of foreign currency translation of $88 million and lower organic sales of $27 million in Products driven by lower sales volumes.

Segment profit increased $66 million and segment margin percentage increased 100 basis points to 25.0% compared to 24.0% for the same period of 2022.

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PERFORMANCE MATERIALS AND TECHNOLOGIES

Sales increased $779 million due to organic sales growth of $491 million in Process Solutions driven by increased demand in projects and lifecycle solutions and services and higher organic sales of $193 million in UOP driven by growth in gas processing and refining catalyst shipments.

Segment profit increased $195 million and segment margin percentage increased 30 basis points to 22.2% compared to 21.9% for the same period of 2022.

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SAFETY AND PRODUCTIVITY SOLUTIONS

Sales decreased $1,418 million due to lower organic sales of $866 million in Warehouse and Workflow Solutions driven by lower demand for projects and lower organic sales of $426 million in Productivity Solutions and Services driven by lower demand for products.

Segment profit decreased $179 million and segment margin percentage increased 80 basis points to 16.4% compared to 15.6% for the same period in 2022.

During the second quarter of 2022, our Productivity Solutions and Services business entered into a license and settlement agreement (the Agreement). Under the Agreement, we will receive up to $360 million, paid in equal quarterly installments over eight quarters, beginning with the second quarter of 2022. The Agreement provides each party a license to its existing patent portfolio for use by the other party’s existing products and resolves all patent-related litigation between the parties.

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CORPORATE AND ALL OTHER

Corporate and All Other primarily includes unallocated corporate costs, interest expense on holding-company debt, and the controlling majority-owned interest in Quantinuum. Corporate and All Other is not a separate reportable business segment as segment reporting criteria is not met. The Company continues to monitor the activities in Corporate and All Other to determine the need for further reportable business segment disaggregation.

REPOSITIONING CHARGES

See Note 4 Repositioning and Other Charges of Notes to Consolidated Financial Statements for a discussion of our repositioning actions and related charges incurred in 2023, 2022, and 2021. Cash spending related to our repositioning actions was $294 million, $275 million, and $382 million in 2023, 2022, and 2021, respectively, and was funded through operating cash flows.

BUSINESS REALIGNMENT

In October 2023, the Company announced a realignment, effective in the first quarter of 2024, of its business units comprising its Performance Materials and Technologies, and Safety and Productivity Solutions reportable business segments by forming two new reportable business segments: Industrial Automation, and Energy and Sustainability Solutions. Industrial Automation will include Sensing and Safety Technologies, Productivity Solutions and Services, and Warehouse and Workflow Solutions, which are currently included in Safety and Productivity Solutions, in addition to Process Solutions, which is currently included in Performance Materials and Technologies. Energy and Sustainability Solutions will include UOP and Advanced Materials, which are currently included in Performance Materials and Technologies. Further, as part of the realignment, the Company will rename its Aerospace and Honeywell Building Technologies reportable business segments to Aerospace Technologies and Building Automation, respectively. Following the realignment, the Company’s reportable business segments will be Aerospace Technologies, Industrial Automation, Building Automation, and Energy and Sustainability Solutions. The realignment will not impact the Company’s historical consolidated financial position, results of operations, or cash flows. The Company expects to report its financial performance based on this realignment effective with the first quarter of 2024.

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