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 previously globally managed our business operations through four reportable business segments: Aerospace Technologies, Building Automation, Process Automation and Technology, and Industrial Automation. Following completion of the Aerospace Spin-Off, we now manage our businesses through three reportable business segments: Building Automation, Process Automation and Technology, and Industrial Automation. The historical financial results of Honeywell Aerospace are reflected as discontinued operations under GAAP for all periods.

Building Automation

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Sales increased $142 million due to higher organic sales of $110 million in Products and higher organic sales of $38 million in Solutions, both driven by higher demand.

Segment profit increased $44 million and segment margin percentage increased 30 basis points to 27.0% compared to 26.7% for the same period of 2025.

Sales increased $508 million due to higher organic sales of $284 million in Products and higher organic sales of $158 million in Building Solutions, both driven by higher demand.

Segment profit increased $163 million and segment margin percentage increased 50 basis points to 26.8% compared to 26.3% for the same period of 2025.

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Process Automation and Technology

Sales increased $261 million due to higher organic sales of $98 million in Projects driven by increased volume and higher organic sales of $26 million in Aftermarket driven by refining demand. Additionally, the acquisition of Johnson Matthey's Catalyst Technologies business contributed $131 million of inorganic sales during the three months ended September 30, 2026.

Segment profit increased $23 million and segment margin percentage decreased 210 basis points to 22.2% compared to 24.3% for the same period of 2025.

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Sales increased $395 million as the acquisitions of Sundyne and Johnson Matthey's Catalyst Technologies business contributed $330 million of inorganic sales during the nine months ended September 30, 2026. In addition, organic sales increased $132 million in Projects driven by increased volume, partially offset by lower organic sales of $114 million in Aftermarket driven by a decline in catalyst shipments.

Segment profit increased $54 million and segment margin percentage decreased 80 basis points to 22.6% compared to 23.4% for the same period of 2025.

Industrial Automation

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Sales decreased $335 million driven by a decline in sales of $375 million due to the sale of our WWS and PSS businesses on July 27, 2026 and August 3, 2026, respectively, partially offset by higher organic sales of $40 million in Solutions driven by project timing.

Segment profit decreased $11 million and segment margin percentage increased 350 basis points to 18.4% compared to 14.9% for the same period in 2025.

Sales decreased $588 million driven by a decline in sales of $755 million due to the sale of our PPE, WWS, and PSS businesses on May 21, 2025, July 27, 2026 and August 3, 2026, respectively, partially offset by higher organic sales of $114 million in Solutions driven by increased demand.

Segment profit decreased $1 million and segment margin percentage increased 220 basis points to 17.4% compared to 15.2% for the same period of 2025.

Corporate and All Other

Corporate and All Other primarily includes unallocated corporate costs, interest expense on holding-company debt, and the former controlling majority-owned interest in Quantinuum prior to deconsolidation in the second quarter of 2026. Corporate expenses historically allocated to the Honeywell Aerospace and Advanced Materials businesses prior to being spun off 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 nine months ended September 30, 2026 and 2025. Cash spending related to our repositioning actions was $115 million in the nine months ended September 30, 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 September 30, 2026 and December 31, 2025, we held $6.2 billion and $12.7 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, 2026, we held $4.5 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 cash. 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, 2026

Net cash provided by operating activities was driven by Net Income, adjusted for the $6,629 million gain on deconsolidation of subsidiary, net of tax of $1,572 million, $698 million of depreciation and amortization, and $552 million of changes in working capital, partially offset by $351 million gain on sale of non-strategic businesses and assets and $268 million of pension income.

Net cash used for investing activities from continuing operations was driven by $1,763 million of cash paid for acquisitions, the deconsolidation of $623 million of Quantinuum cash and $369 million of capital expenditures, partially offset by $1,454 million of proceeds from sale of businesses.

Net cash used for financing activities was driven by $14,688 million of payments of long-term debt, $3,469 million of net payments of commercial paper, $1,816 million of cash dividends paid, $1,000 million of repurchases of common stock and $1,000 million of Spin-Off cash, partially offset by $15,835 million of pre-separation funding related to the Aerospace Spin-Off.

Nine months ended September 30, 2026 compared with nine months ended September 30, 2025

Net cash provided by operating activities decreased by $4,461 million, driven by the change in classification of Honeywell Aerospace cash used by operations of $189 million in 2026 and provided by operations of $2,594 million in 2025 to discontinued operations, and the receipt of the Resideo indemnification and reimbursement agreement termination payment of $1,590 million in 2025.

Net cash used for investing activities from continuing operations decreased by $618 million, driven by a $526 million net increase in cash receipts from settlement of derivative contracts, a $438 million decrease in cash paid for acquisitions, and a $297 million increase in proceeds from sale of businesses, partially offset by the deconsolidation of $623 million of Quantinuum cash in the nine months ended September 30, 2026.

Net cash used for financing activities increased by $5,377 million, driven by a $13,133 million increase of payments of long-term debt, a $5,929 million increase of net payments of commercial paper, a decrease in proceeds from issuance of long-term debt of $4,035 million, and a $1,000 million increase of Spin-Off cash partially offset by $15,835 million of pre-separation funding related to the Aerospace Spin-Off and a $2,704 million decrease in repurchases of common stock.

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, 2026, we repurchased common stock of $1.0 billion. Refer to the section titled Liquidity and Capital Resources of our 2025 Annual Report on 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. During the third quarter of 2026, we acquired Johnson Matthey’s Catalyst Technologies business for total consideration of $1,743 million, net of cash acquired. 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. During the third quarter, we completed the divestitures of our PSS and WWS businesses within the Industrial Automation reportable business segment for total consideration of $1,527 million, net of cash transferred. See Note 3 Acquisitions, Divestitures, 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 September 30, 2026, and December 31, 2025, our total borrowings were $16.6 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 September 30, 2026, there were $1.25 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 completion of the Aerospace Spin-Off, the aggregate revolving credit commitments under the 364-Day Credit Agreement were 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 September 30, 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 completion of the Aerospace Spin-Off, the aggregate revolving credit commitments under the Five-Year Credit Agreement were 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 $3.5 billion. 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 September 30, 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 September 30, 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:

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.