HONEYWELL INTERNATIONAL INC

We globally manage our business operations through four reportable business segments: Aerospace Technologies, Industrial Automation, Building Automation, and Energy and Sustainability Solutions.

AEROSPACE TECHNOLOGIES

Sales increased $599 million due to higher organic sales of $327 million in Commercial Aviation Aftermarket and higher organic sales of $147 million in Defense and Space, both driven by higher sales volumes due to increased demand and shipments. Additionally, the acquisitions of CAES and Civitanavi Systems contributed $108 million of inorganic sales in the three months ended September 30, 2025. Beginning September 2025, the results of CAES and Civitanavi Systems are considered organic following the first 12 months after the transaction date.

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Segment profit increased $96 million and segment margin percentage decreased 160 basis points to 26.1% compared to 27.7% for the same period of 2024.

Sales increased $1,518 million due to higher organic sales of $688 million in Commercial Aviation Aftermarket and higher organic sales of $462 million in Defense and Space, both driven by higher sales volumes due to increased demand and shipments. Additionally, the acquisitions of CAES and Civitanavi Systems contributed $485 million of inorganic sales in the nine months ended September 30, 2025.

Segment profit increased $198 million and segment margin percentage decreased 170 basis points to 26.0% compared to 27.7% for the same period of 2024.

On February 6, 2025, the Company announced its intention to separate its Automation and Aerospace Technologies businesses into independent, U.S. publicly traded companies, which is expected to be completed in the second half of 2026.

INDUSTRIAL AUTOMATION

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Sales decreased $227 million due to a decline of $264 million resulting from the sale of our PPE business on May 21, 2025.

Segment profit decreased $80 million and segment margin percentage decreased 150 basis points to 18.8% compared to 20.3% for the same period in 2024.

Sales decreased $453 million due to a decline of $405 million resulting from the sale of our PPE business on May 21, 2025 and lower organic sales of $78 million in Productivity Solutions and Services driven by a decrease in license and settlement payments.

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 received $360 million, paid in equal quarterly installments over eight quarters, beginning with the second quarter of 2022 and ending with the first quarter of 2024. The Agreement provides each party a license to its existing patent portfolio for use by the other party's existing products and resolved the patent-related litigation between the parties.

Segment profit decreased $151 million and segment margin percentage decreased 90 basis points to 18.6% compared to 19.5% for the same period in 2024.

On July 8, 2025, the Company announced it is evaluating strategic alternatives for its Productivity Solutions and Services and Warehouse and Workflow Solutions businesses.

BUILDING AUTOMATION

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Sales increased $133 million due to higher organic sales of $68 million in Products and higher organic sales of $49 million in Building Solutions, both driven by higher demand.

Segment profit increased $50 million and segment margin percentage increased 80 basis points to 26.7% compared to 25.9% for the same period of 2024.

Sales increased $654 million due to higher organic sales of $203 million in Products and higher organic sales of $153 million in Building Solutions, both driven by higher demand. Additionally, the acquisition of Access Solutions contributed $302 million of inorganic sales in the nine months ended September 30, 2025. Beginning June 2025, the results of Access Solutions are considered organic following the first 12 months after the transaction date.

Segment profit increased $222 million and segment margin percentage increased 100 basis points to 26.3% compared to 25.3% for the same period of 2024.

ENERGY AND SUSTAINABILITY SOLUTIONS

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Sales increased $179 million due to higher organic sales of $47 million in Advanced Materials driven by increased pricing in fluorine products, offset by lower organic sales of $85 million in UOP driven by lower sales volumes in refining catalyst shipments. Additionally, the acquisitions of Sundyne and LNG contributed $202 million of inorganic sales in the three months ended September 30, 2025.

Segment profit increased $44 million and segment margin percentage was flat at 24.5% compared to the same period of 2024.

Sales increased $448 million driven by the acquisitions of LNG and Sundyne.

Segment profit increased $125 million and segment margin percentage increased 40 basis points to 23.7% compared to 23.3% for the same period of 2024.

On October 1, 2025, the Company announced the anticipated spin-off its Advanced Materials business into Solstice Advanced Materials, an independent, U.S. publicly traded company, is expected to be completed on October 30, 2025.

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 5 Repositioning and Other(Gains)Charges of Notes to Consolidated Financial Statements for a discussion of our repositioning actions and related charges incurred in the nine months ended September 30, 2025, and 2024. Cash spending related to our repositioning actions was $117 million in the nine months ended September 30, 2025, and was funded through operating cash flows.

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LIQUIDITY AND CAPITAL RESOURCES

(Dollars in tables in millions)

We leverage operating cash flows as the primary source of liquidity. Each of our businesses focuses on increasing operating cash flows through revenue growth, margin expansion, and improved working capital turnover. We also maintain other key sources of liquidity, including U.S. cash balances, and the ability to access non-U.S. cash balances, short-term debt from the commercial paper market, long-term borrowings, committed credit lines, and access to the public debt and equity markets.

CASH

As of September 30, 2025, and December 31, 2024, we held $13.4 billion and $11.0 billion, respectively, of cash and cash equivalents, including our short-term investments. We monitor third-party depository institutions that hold our cash and cash equivalents on a daily basis. Our emphasis is primarily safety of principal and secondarily maximizing yield of those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one counterparty.

As of September 30, 2025, we held $9.9 billion of the Company’s cash, cash equivalents, and short-term investments in non-U.S. subsidiaries. We do not have material amounts related to any jurisdiction subject to currency control restrictions that impact our ability to access and repatriate such amounts. Under current laws, we do not expect taxes on repatriation or restrictions on amounts held outside of the U.S. to have a material effect on our overall liquidity.

CASH FLOW SUMMARY

Our cash flows from operating, investing, and financing activities, as reflected in the Consolidated Statement of Cash Flows, are summarized as follows:

Nine months ended September 30, 2025

Net cash provided by operating activities was driven by the receipt of the Resideo indemnification and reimbursement agreement termination payment of $1,590 million, partially offset by changes in working capital driven by an increase in accounts receivable of $1,035 million due to timing of customer cash collections.

Net cash used for investing activities was driven by $2,200 million of cash paid for acquisitions, $928 million of capital expenditures, and $403 million of net payments from settlements of derivative contracts, partially offset by $1,157 million of proceeds from the sale of the PPE business.

Net cash used for financing activities was driven by $3,704 million of repurchases of common stock, $2,214 million of cash dividends paid, and $1,555 million of payments of long-term debt, partially offset by $4,035 million of long-term debt proceeds and $2,460 million of net proceeds from commercial paper.

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Nine months ended September 30, 2025 compared with nine months ended September 30, 2024

Net cash provided by operating activities increased by $1,388 million, driven by the receipt of the Resideo indemnification and reimbursement agreement termination payment of $1,590 million and increase in Net income of $424 million, partially offset by an unfavorable impact of working capital driven by an increase in accounts receivable of $817 million due to timing of customer cash collections.

Net cash used for investing activities decreased by $5,834 million, driven by a $4,847 million decrease in cash paid for acquisitions and $1,157 million of proceeds from the sale of the PPE business.

Net cash used for financing activities increased by $7,698 million, driven by a $6,372 million decrease in long-term debt proceeds and $2,504 million increase in repurchases common stock, partially offset by a $1,421 million increase in net proceeds from commercial paper.

See Note 15 Commitments and Contingencies for further discussion of the Resideo indemnification and reimbursement agreement termination.

ASSESSMENT OF CURRENT LIQUIDITY AND CASH REQUIREMENTS

Based on past performance and current expectations, we believe our operating cash flows will be sufficient to meet our future operating cash needs for at least the next twelve months. If necessary, our available cash, committed credit lines, and access to the public debt and equity markets provide additional sources of short-term and long-term liquidity to fund current operations, debt maturities, and future investment opportunities.

See Note 9 Debt and Credit Agreements of Notes to Consolidated Financial Statements for additional discussion of items impacting our liquidity.

In addition to normal operating cash requirements, our principal future cash requirements include funding capital expenditures, share repurchases, dividends, strategic acquisitions, and debt repayments. During the nine months ended September 30, 2025, we repurchased common stock of $3.7 billion. Refer to the section titled Liquidity and Capital Resources of our 2024 Form 10-K for a discussion of our expected capital expenditures, share repurchases, mergers and acquisitions activity, and dividends for 2025.

We continually assess the relative strength of each business in our portfolio as to strategic fit, market position, profit, and cash flow contribution in order to identify target investment and acquisition opportunities in order to upgrade our combined portfolio. We seek to identify acquisition candidates that will further our strategic plan and strengthen our existing core businesses. In the second quarter of 2025, we acquired Sundyne for total consideration of $2.2 billion, net of cash acquired, as well as announced our agreement to acquire Johnson Matthey's Catalyst Technologies business segment for £1.8 billion. We also identify businesses that do not fit into our long-term strategic plan based on their market position, relative profitability, or growth potential. These businesses are considered for potential divestiture, restructuring, or other repositioning actions, subject to regulatory constraints. On February 6, 2025, we announced our intention to separate the Automation and Aerospace Technologies businesses into independent, U.S. publicly traded companies, which is expected to be completed in the second half of 2026. On May 21, 2025, we completed the sale of our PPE business for $1.2 billion, net of cash transferred. On July 8, 2025, we announced we are evaluating strategic alternatives for our Productivity Solutions and Services and Warehouse and Workflow Solutions businesses within the Industrial Automation reportable business segment. On October 16, 2025, we announced the Board approved the spin-off of the Advanced Materials business into Solstice Advanced Materials, an independent, U.S. publicly traded company, which will be effective on October 30, 2025. See Note 3 Acquisitions and Divestitures, Note 15 Commitments and Contingencies, and Note 19 Subsequent Events of Notes to Consolidated Financial Statements for additional discussion.

We continually seek opportunities to improve our liquidity and working capital efficiency, which includes the extension of payment terms with our suppliers and transfer of our trade receivables to unaffiliated financial institutions on a true sale basis. The impact of these programs is not material to our overall liquidity.

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BORROWINGS

We leverage a variety of debt instruments to manage our overall borrowing costs. As of September 30, 2025, and December 31, 2024, our total borrowings were $37.0 billion and $31.1 billion, respectively.

A key source of liquidity is our ability to access the corporate bond markets. Through these markets, we issue a variety of long-term fixed rate notes to manage our overall funding costs.

Another key source of liquidity is our ability to access the commercial paper market. Commercial paper notes are sold at a discount or premium and have a maturity of not more than 365 days from date of issuance. Borrowings under the commercial paper program are available for general corporate purposes as well as for financing acquisitions.

In addition, we have the following loan and revolving credit agreements:

•A $6.0 billion Delayed Draw Term Loan Agreement (the Term Loan Agreement), dated as of May 7, 2025. The Term Loan Agreement is comprised of two tranches: (i) commitments to provide loans in an aggregate principal amount of up to $4.0 billion, which was fully drawn effective May 30, 2025, and (ii) commitments to provide loans in an aggregate amount of up to $2.0 billion, expiring on December 19, 2025. Amounts borrowed under the Term Loan Agreement are required to be paid no later than May 7, 2027, unless the Term Loan Agreement is terminated earlier pursuant to its terms. As of September 30, 2025, there were $4.0 billion of borrowings outstanding on the Term Loan Agreement.

•A $3.0 billion 364-day credit agreement (the 364-Day Credit Agreement) with a syndicate of banks, dated as of March 17, 2025. Amounts borrowed under the 364-Day Credit Agreement are required to be repaid no later than March 16, 2026, unless (i) we elect to convert all then outstanding amounts into a term loan, upon which such amounts shall be repaid in full on March 16, 2027, or (ii) the 364-Day Credit Agreement is terminated earlier pursuant to its terms. The 364-Day Credit Agreement replaced the previously reported $1.5 billion 364-day credit agreement dated as of March 18, 2024, which was terminated in accordance with its terms effective March 17, 2025. As of September 30, 2025, there were no outstanding borrowings under our 364-Day Credit Agreement.

•A $1.0 billion Fixed Rate Term Loan Credit Agreement (the Fixed Rate Term Loan Credit Agreement), dated as of August 12, 2024. Amounts borrowed under the Fixed Rate Term Loan Credit Agreement are required to be repaid no later than August 12, 2027, unless the Fixed Rate Term Loan Credit Agreement is terminated earlier pursuant to its terms. As of September 30, 2025, there were $1.0 billion of borrowings outstanding under the Fixed Rate Term Loan Credit Agreement.

•A $4.0 billion five-year credit agreement (the Five-Year Credit Agreement) with a syndicate of banks, dated as of March 18, 2024. Commitments under the Five-Year Credit Agreement can be increased pursuant to the terms of the Five-Year Credit Agreement to an aggregate amount not to exceed $4.5 billion. As of September 30, 2025, there were no outstanding borrowings under our Five-Year Credit Agreement.

See Note 9 Debt and Credit Agreements of Notes to Consolidated Financial Statements for additional information regarding our debt instruments.

We also maintain a current shelf registration statement filed with the SEC under which we may issue additional debt securities, common stock, and preferred stock that may be offered in one or more offerings on terms to be determined at the time of the offering. We anticipate that net proceeds of any offering would be used for general corporate purposes, including repayment of existing indebtedness, share repurchases, capital expenditures, and acquisitions.

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CREDIT RATINGS

Our ability to access the global debt capital markets and the related cost of these borrowings is affected by the strength of our credit rating and market conditions. Our credit ratings are periodically reviewed by the major independent debt-rating agencies. As of September 30, 2025, S&P Global Inc. (S&P), Fitch Ratings Inc. (Fitch), and Moody’s Investor Service (Moody's) have ratings on our debt set forth in the table below:

OTHER MATTERS

LITIGATION

See Note 15 Commitments and Contingencies of Notes to Consolidated Financial Statements for further discussion of environmental, asbestos, and other litigation matters.

CRITICAL ACCOUNTING ESTIMATES

There have been no material changes to our Critical Accounting Estimates presented in our 2024 Annual Report on Form 10-K. For a discussion of the Company’s Critical Accounting Estimates, see the section titled Critical Accounting Estimates in our 2024 Annual Report on Form 10-K.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 2 Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements for a discussion of recent accounting pronouncements.