HONEYWELL INTERNATIONAL INC

During the first quarter of 2026, the Company realigned certain of its business units as reflected in Note 18 Segment Financial Data, which impacts the composition of its reportable segments. The Company recast historical periods to reflect this change in segment presentation. See Note 18 Segment Financial Data to Notes to Consolidated Financial Statements for further discussion.

We globally manage our business operations through four reportable business segments: Aerospace Technologies, Building Automation, Process Automation and Technology, and Industrial Automation,

AEROSPACE TECHNOLOGIES

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Sales increased $150 million due to higher organic sales of $58 million in Defense and Space and higher organic sales of $54 million in Commercial Aviation Aftermarket, both driven by increased pricing.

Segment profit increased $45 million and segment margin percentage increased 20 basis points to 26.5% compared to 26.3% for the same period of 2025.

BUILDING AUTOMATION

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Sales increased $190 million due to higher organic sales of $71 million in Products and higher organic sales of $61 million in Solutions, both driven by higher demand.

Segment profit increased $56 million and segment margin percentage increased 40 basis points to 26.4% compared to 26.0% for the same period of 2025.

PROCESS AUTOMATION AND TECHNOLOGY

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Sales increased $68 million due to inorganic sales of $121 million in Sundyne during the three months ended March 31, 2026, partially offset by lower organic sales of $82 million in Aftermarket driven by a decline in refining catalyst shipments.

Segment profit increased $46 million and segment margin percentage increased 200 basis points to 23.7% compared to 21.7% for the same period of 2025.

INDUSTRIAL AUTOMATION

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Sales decreased $176 million due to the sale of our PPE business on May 21, 2025.

Segment profit increased $11 million and segment margin percentage increased 260 basis points to 17.0% compared to 14.4% for the same period in 2025.

On July 8, 2025, the Company announced it is evaluating strategic alternatives for its Productivity Solutions and Services and Warehouse and Workflow Solutions businesses. Following the Company's strategic review, the assets and liabilities of these businesses were classified as held for sale beginning December 31, 2025. In April 2026, the Company announced it has reached agreements to sell the businesses in two transactions, both of which are expected to close in the second half of 2026 and are subject to customary closing conditions, including receipt of certain regulatory approvals.

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 expenses historically allocated to Advanced Materials and not eligible to be part of discontinued operations are now included in Corporate and All Other. 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 Charges of Notes to Consolidated Financial Statements for a discussion of our repositioning actions and related charges incurred in the three months ended March 31, 2026 and 2025. Cash spending related to our repositioning actions was $37 million in the three months ended March 31, 2026, 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 March 31, 2026 and December 31, 2025, we held $12.4 billion and $12.9 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 March 31, 2026, we held $6.7 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:

Three months ended March 31, 2026

Net cash used for operating activities from continuing operations was driven by an $825 million decline in accrued liabilities driven by the Flexjet litigation settlement payment of $375 million and a decline in accrued interest due to cash interest payments of $463 million.

Net cash used for investing activities from continuing operations was driven by capital expenditures.

Net cash provided by financing activities was driven by $15,835 million of pre-separation funding related to the anticipated spin-off of the Aerospace business, partially offset by $12,605 million of payments of long-term debt, $1,260 million of net payments of commercial paper, $1,000 million of repurchases of common stock, and $781 million of cash dividends paid.

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Three months ended March 31, 2026 compared with three months ended March 31, 2025

Net cash used for operating activities from continuing operations increased by $1,028 million, driven by an increase in accrued liabilities of $683 million due to the Flexjet litigation settlement payment of $375 million, higher cash interest payments of $136 million, and a $236 million unfavorable impact of working capital driven by timing of payments of accounts payable.

Net cash used for investing activities from continuing operations decreased by $214 million, driven by a $210 million net increase in cash receipts from settlements of derivative contracts.

Net cash provided by financing activities increased by $1,447 million, driven by $15,835 million of pre-separation funding related to the anticipated spin-off of the Aerospace business and a $902 million decrease in repurchases of common stock, partially offset by a $12,561 million increase of payments of long-term debt, and a $2,702 million increase of net payments of commercial paper.

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 three months ended March 31, 2026, we repurchased common stock of $1.0 billion. Refer to the section titled Liquidity and Capital Resources of our 2025 Form 10-K for a discussion of our expected capital expenditures, share repurchases, mergers and acquisitions activity, and dividends for 2026.

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. On May 22, 2025, the Company announced its agreement to acquire Johnson Matthey's Catalyst Technologies business segment in an all cash transaction. In February 2026, the agreement was amended to adjust the total consideration to £1.325 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 Honeywell from Honeywell Aerospace into independent, U.S. publicly traded companies, which is expected to be completed in the third quarter on June 29, 2026. 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 and classified the assets and liabilities of the businesses as held for sale beginning December 31, 2025. In April 2026, the Company announced it has reached agreements to sell the businesses in two transactions, both of which are expected to close in the second half of 2026 and are subject to customary closing conditions, including receipt of certain regulatory approvals. See Note 3 Acquisitions, Divestit ures, and Discontinued Operations 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 March 31, 2026, and December 31, 2025, our total borrowings were $36.7 billion and $34.6 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 2025 Term Loan Agreement), dated as of May 7, 2025. The 2025 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, which expired on December 19, 2025. Amounts borrowed under the 2025 Term Loan Agreement are required to be paid no later than May 7, 2027, unless the 2025 Term Loan Agreement is terminated earlier pursuant to its terms. As of March 31, 2026, there were $2.75 billion of borrowings outstanding on the 2025 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 6, 2026. Upon consummation of the spin-off of the Aerospace business, the aggregate revolving credit commitments under the 364-Day Credit Agreement will be reduced to $2.0 billion. Amounts borrowed under the 364-Day Credit Agreement are required to be repaid no later than March 5, 2027, 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 5, 2028, or (ii) the 364-Day Credit Agreement is terminated earlier pursuant to its terms. As of March 31, 2026, there were no outstanding borrowings under the 364-Day Credit Agreement.

•A $4.0 billion five-year credit agreement (the Five-Year Credit Agreement) with a syndicate of banks, dated as of March 6, 2026. Upon consummation of the spin-off of the Aerospace business, the aggregate revolving credit commitments under the Five-Year Credit Agreement will be reduced to $3.0 billion. 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 (i) $4.5 billion prior to the spin-off of the Aerospace business and (ii) $3.5 billion following the spin-off of the Aerospace business. Amounts borrowed under the Five-Year Credit Agreement are required to be repaid no later than March 6, 2031, unless such date is extended pursuant to the terms of the Five-Year Credit Agreement. Amounts borrowed under the Five-Year Credit Agreement are required to be repaid no later than March 6, 2031, unless such date is extended pursuant to the terms of the Five-Year Credit Agreement. As of March 31, 2026, there were no outstanding borrowings under the 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 March 31, 2026, 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:

On February 2, 2026, Moody's revised their credit rating outlook from stable to review for downgrade. On March 6, 2026, S&P revised their credit rating outlook from watch negative to negative. On March 6, 2026, Fitch revised their credit rating outlook from watch negative to stable.

OTHER MATTERS

LITIGATION

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

CRITICAL ACCOUNTING ESTIMATES

There have been no material changes to our Critical Accounting Estimates presented in our 2025 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 2025 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.