Honeywell Aerospace Inc.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

Note 1. Organization and Basis of Presentation

Organization

Honeywell Aerospace Inc. (“Aerospace” or the “Company”) was organized on February 6, 2026, for the purpose of receiving, pursuant to a reorganization, all of the assets of the aerospace business segment (the “Aerospace Business”), a former carve-out business of Honeywell International Inc., which is now known as Honeywell Technologies (“Honeywell” or “Parent”). On June 29, 2026 (the “Distribution Date”), Honeywell completed the spin-off of the Aerospace Business (the “Spin-off”) through a pro-rata distribution (the “Distribution”) of all of the Company's outstanding common shares to holders of record of Honeywell's common shares as of the close of business on June 15, 2026 (the “Record Date”), at which time each holder of Honeywell's common shares received one Aerospace common share for every two Honeywell common shares held as of the close of business on the Record Date, resulting in the Distribution of 316.9 million of the Company's common shares. As a result of the Distribution, the Company became an independent publicly traded company. The Company’s common stock is listed under the symbol “HONA” on The Nasdaq Stock Market LLC (“Nasdaq”).

Basis of Presentation

The Company’s unaudited financial statements are presented on a consolidated basis. For periods prior to the Spin-off, the Company's unaudited financial statements were prepared on a combined basis and derived from the consolidated financial statements and accounting records of Honeywell. These financial statements do not purport to reflect what the results of operations, comprehensive income, financial position, or cash flows would have been had the Company operated as an independent entity during the periods presented. The financial statements included herein are referred to as the “Condensed Consolidated Financial Statements” for all periods presented.

The unaudited financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments, unless otherwise disclosed) necessary for a fair statement of the results of operations, financial position, and cash flows for each period presented. The results for the interim periods are not necessarily indicative of results to be expected for the full year.

The balance sheet as of December 31, 2025 was derived from audited financial statements but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the financial statements and notes included in the Company’s audited Combined Financial Statements for the year ended December 31, 2025, included in the Company’s final information statement, dated as of June 15, 2026 (the “Information Statement”), which was furnished as Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the SEC on June 15, 2026.

For periods prior to the Spin-off, the unaudited financial statements include certain assets and liabilities that have historically been held at the Honeywell corporate level but were specifically identifiable or otherwise attributable to the Company. Honeywell used a centralized approach to cash management and financing of its operations. Accordingly, for periods prior to the Spin-off, a substantial portion of the Company’s cash accounts were regularly cleared to Honeywell at Honeywell’s discretion and Honeywell funded the Company’s operating and investing activities as needed. Transfers of cash between Honeywell and the Company were included within Net transfers to Parent in the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Equity. The Cash and cash equivalents held by Honeywell at the corporate level were not specifically identifiable to the Company and therefore were not attributed for any of the periods presented. Other than the notes issued by the Company, Honeywell third

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party debt and the related interest expense were not attributed to the Company for any of the periods presented as the Company was not the legal obligor of such borrowings and Honeywell’s borrowings were not directly attributable to the Company.

Prior to the Spin-off, Honeywell provided certain services, such as legal, accounting, technology, human resources, and other infrastructure support, on behalf of the Company. The unaudited financial statements include all revenues and costs directly attributable to the Company and an allocation of expenses related to certain Honeywell corporate functions (refer to Note 3. Related Party Transactions). These expenses were allocated to the Company based on a proportion of Net sales. The Company considers allocations of these costs to be a reasonable reflection of the benefits received by the Company. However, the financial information presented prior to the Spin-off may not reflect the financial position, operating results, and cash flows of the Company had the Company been a separate standalone entity during the periods presented. Actual costs that would have been incurred if the Company had been a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. The Company considers the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefits received by the Company during the periods presented.

All intracompany transactions and balances within the Company have been eliminated. For periods prior to the Spin-off, transactions between Honeywell and the Company that were not cash settled are included within Net Parent investment. The total net effect of the settlement of these intercompany transactions was reflected in the Condensed Consolidated Statements of Cash Flows as a financing activity and in the Condensed Consolidated Balance Sheets as Net Parent investment. Transactions prior to the Spin-off between the Company and other businesses of Honeywell are considered related party transactions. See Note 3. Related Party Transactions for more information.

The Company's fiscal year begins on January 1 and ends on December 31. The Company’s practice is to establish interim quarterly closing dates using a predetermined fiscal calendar, which requires the Company’s businesses to close its books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on the Company's business processes. The Company’s closing dates for the third quarter of 2026 and 2025 were September 26, 2026 and September 27, 2025, respectively.

Note 2. Summary of Significant Accounting Policies

The significant accounting policies of the Company are set forth in Note 2. Summary of Significant Accounting Policies within the Company’s Combined Financial Statements as of December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024, and 2023, which can be found in the Information Statement. The Company includes herein certain updates to those policies.

Accounts Receivable Factoring

For the three months ended September 26, 2026, the Company hadno sales of trade accounts receivable. For the nine months ended September 26, 2026, the Company sold $344 million of trade accounts receivable, of which related fees were insignificant. For the three and nine months ended September 27, 2025, the Company hadno sales of trade accounts receivable.

Supply Chain Financing

Amounts outstanding related to supply chain financing programs are included in Accounts payable in the Condensed Consolidated Balance Sheets. Accounts payable related to supply chain financing programs were $455 million and $521 million as of September 26, 2026 and December 31, 2025, respectively.

Reclassifications

Effective September 26, 2026, the Company began separately presenting Pension assets and Deferred tax liabilities on the Condensed Consolidated Balance Sheets, which were previously included within Other

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assets and Other liabilities, respectively. The Company also reclassified interest income from Other (income) expense, net to Interest expense (income), net on the Condensed Consolidated Statements of Operations. Prior period amounts have been reclassified to conform to the current year’s financial statement presentation.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all Accounting Standards Updates (“ASU”) 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 a minimal impact on the Company’s Condensed Consolidated Statements of Operations, Condensed Consolidated Balance Sheets, and Condensed Consolidated Statements of Cash Flows.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires companies to disclose additional information about the types of expenses in commonly presented expense captions. The new standard requires tabular disclosure of specified natural expenses in certain expense captions, a qualitative description of amounts that are not separately disaggregated, and disclosure of the Company's definition and total amount of selling expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and may be applied prospectively or retrospectively, with early adoption permitted. The Company is currently evaluating the impacts of this guidance on the Company’s Condensed Consolidated Financial Statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software costs by removing all references to prescriptive and sequential software development stages. The new standard requires entities to consider whether significant development uncertainty has been resolved before starting to capitalize software costs and aligns disclosure requirements with ASC 360, Property, Plant, and Equipment. The ASU is effective for annual and interim reporting periods beginning after December 15, 2027, and can be applied prospectively, retrospectively, or using a modified prospective transition method, with early adoption permitted. The Company is currently evaluating the impacts of this guidance on the Company’s Condensed Consolidated Financial Statements.

Note 3. Related Party Transactions

Related Party Loans

Related party debt due from and due to Honeywell or its affiliates are recorded in Accounts receivable and Accrued liabilities in the Condensed Consolidated Balance Sheets, respectively. Related party loans receivable of $44 million and related party loans payable of $16 million are reflected in the Condensed Consolidated Balance Sheets as of December 31, 2025. No related party loans receivable or payable were outstanding as of September 26, 2026. The interest income and expense related to the loan activity is recorded in Interest expense (income), net in the Condensed Consolidated Statements of Operations.

Distribution to Honeywell

On March 16, 2026, the Company completed the private note offering of $16.0 billion of senior unsecured notes (collectively the “Initial Notes”). Net proceeds of $15.1 billion from the Initial Notes were distributed to Honeywell in connection with the Spin-off. The distribution was reflected in the Condensed Consolidated Statements of Cash Flows as a financing activity and in the Condensed Consolidated Balance Sheets as Net Parent investment. Refer to Note 9. Debt and Credit Agreements for further details.

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Corporate Allocations

For the periods prior to the Spin-off, the Company recorded expenses allocated from Honeywell including, but not limited to, legal, accounting, information technology, human resources, and other infrastructure support. Allocations for management costs and corporate support services provided to the Company totaled $294 million for the nine months ended September 26, 2026, and totaled $164 million and $475 million for the three and nine months ended September 27, 2025, respectively, and such amounts are included within Cost of products and services sold, Research and development expenses, and Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. For the three months ended September 26, 2026, there wereno expenses allocated from Honeywell.

Cash Management and Net Parent Investment

For the periods prior to the Spin-off, Honeywell used a centralized approach for the purpose of cash management and financing of its operations. The Company’s excess cash in participating bank accounts was transferred to Honeywell daily, and Honeywell funded the Company’s operating and investing activities as needed. Honeywell operated a centralized non-interest-bearing cash pool in the U.S. and regional interest-bearing cash pools outside of the U.S. The total net effect of the settlement of these intercompany transactions is reflected in the Condensed Consolidated Statements of Cash Flows as a financing activity and in the Condensed Consolidated Balance Sheets as Net Parent investment.

Separation and Distribution Agreements

In connection with the Spin-off, the Company and Honeywell entered into definitive agreements which set forth the terms and conditions of the Spin-off and provide a framework for the Company’s relationship with Honeywell following the Spin-off as follows:

•The Separation and Distribution Agreement sets forth, among other things, the Company’s agreements with Honeywell regarding the principal actions to be taken in connection with the Spin-off. It also sets forth other agreements that govern certain aspects of the Company’s ongoing relationship with Honeywell following the Distribution.

•The Transition Services Agreement governs certain transitional services to be provided by Honeywell to the Company on an interim, transitional basis. The services, including, but not limited to global real estate support, information technology support, finance administration support, and human resources support, will be provided for a limited time, generally for no longer thantwo years following the Distribution Date, and will be provided for specified fees, which are generally based on the cost of services provided.

•The Tax Matters Agreement governs the Company’s and Honeywell’s respective rights, responsibilities, and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and tax proceedings, and other matters regarding taxes. The Tax Matters Agreement provides special rules that allocate tax liabilities in the event the share distribution or certain related transactions fail to qualify for their intended tax consequences.

•The Employee Matters Agreement addresses employment and employee compensation and benefits matters. The Employee Matters Agreement addresses the allocation and treatment of assets and liabilities relating to employees and compensation and benefit plans and programs in which the Company’s employees participated prior to the Spin-off.

•The Intellectual Property License Agreement governs the terms by which each of the Company and Honeywell, and their respective affiliates, grant and receive perpetual non-exclusive licenses to and from each other in respect of certain patents and other intellectual property rights owned by the licensing party or its group, excluding rights in trademarks and certain other intellectual property

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rights that may be addressed in separate agreements between the parties or their respective affiliates.

•The Trademark License Agreement provides the Company a license to use “Honeywell Aerospace” and certain other trademarks in its operation of the Aerospace business, including in the names of Honeywell Aerospace and certain of its subsidiaries, subject to certain restrictions. The agreement includes exclusivity terms with respect to the use of “Honeywell Aerospace” and certain other uses, subject to certain exceptions, including exceptions permitting the Company to continue to market and sell products and services under the “Honeywell” mark. The Trademark License Agreement includes customary quality control provisions to protect and preserve the goodwill associated with “Honeywell” and the other licensed marks. In exchange, the Company will pay Honeywell an aggregate amount of $1,125 million over a period offive years, with an initial payment of $18.75 million that was paid within five days of the Distribution Date followed by 59 equal monthly payments of $18.75 million. Costs associated with the Honeywell trademark license are expensed as incurred.

Note 4. Revenue Recognition from Contracts with Customers

The following table presents a disaggregation of revenue by end market:

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 on timing of recognition is as follows:

Contract Assets and Liabilities

Contract assets reflect the recognition of revenue from the satisfaction of performance obligations in advance of customer billings. Contract liabilities are recorded when customers are billed in accordance with the contract prior to the recognition of revenue. Contract balances are classified as assets or liabilities on a contract-by-contract basis and are recorded in the Condensed Consolidated Balance Sheets within Current contract assets, Other assets, Current contract liabilities, and Contract liabilities.

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

For the three and nine months ended September 26, 2026, the Company recognized revenue of $158 million and $827 million, respectively, that was previously included in the beginning balance of Contract liabilities. For the three and nine months ended September 27, 2025, the Company recognized revenue of $167 million and $778 million, respectively, that was previously included in the beginning balance of Contract liabilities.

Remaining Performance Obligations

As of September 26, 2026, the Company’s remaining performance obligations, which is the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied, was approximately $19.3 billion. Remaining performance obligations exclude transaction price associated with revenue which is recognized on a right to invoice basis for certain long-term contracts. Performance obligations expected to be satisfied withinone year and greater than one year are 59% and 41%, respectively.

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Note 5. Other (Income) Expense, Net

Other (income) expense, net consists of the following:

1. Transaction costs consist of professional advisory services fees related to the Spin-off. For the nine months ended September 26, 2026, the Company recognized $540 million of transaction costs, of which, $413 million is recognized within Selling, general and administrative expenses. For the three months ended September 26, 2026, there wereno transaction costs recognized in Selling, general and administrative expenses. For the three and nine months ended September 27, 2025, the Company recognized $143 million and $160 million of transaction costs, of which, $69 million and $71 million is recognized within Selling, general and administrative expenses.

Note 6. Income Taxes

The effective tax rate was 18.2% and 21.4% for the three and nine months ended September 26, 2026, respectively, compared to 11.7% and 14.3% for the three and nine months ended September 27, 2025, respectively. The effective tax rate for the three months ended September 26, 2026 increased as compared to 2025 primarily due to $44 million of tax benefits recorded in 2025 related to changes in estimate on prior tax positions. The effective tax rate for the nine months ended September 26, 2026 increased as compared to 2025 primarily due to incremental $70 million of nondeductible transaction costs and frictional tax costs incurred in advance of the Spin-off.

Note 7. Inventories

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Note 8. Other Intangible Assets, Net

Other intangible assets, net is comprised of the following:

Amortization expense related to intangible assets was $53 million and $141 million for the three and nine months ended September 26, 2026, respectively, and $21 million and $99 million for the three and nine months ended September 27, 2025, respectively.

Note 9. Debt and Credit Agreements

Senior Unsecured Notes

On March 16, 2026, and in connection with the Spin-off, the Company issued an aggregate of $16.0 billion principal amount of the Initial Notes innine series with maturity dates ranging from 2028 through 2066. Upon issuance, the Initial Notes became guaranteed on a senior unsecured basis by Honeywell. Following the completion of the Spin-off, Honeywell was automatically and unconditionally released and discharged from all obligations under these guarantees.

The Company distributed the Initial Notes due 2046, 2056, and 2066 (with an aggregate principal amount of $6.0 billion) and $9.1 billion of cash proceeds from the remaining series of Initial Notes to Honeywell as

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partial consideration for the contribution of assets by Honeywell to the Company in connection with the distribution and retained the balance of the cash proceeds from the remaining Initial Notes issued.

On August 10, 2026, the Company completed an offer to exchange (the “Exchange Offer”) each series of the Initial Notes for registered notes of like principal (“New Notes”). The Initial Notes were originally issued on March 16, 2026, in a private offering in connection with the Spin-off. The terms of the New Notes are identical in all material respects to the terms of the Initial Notes of corresponding series, except that the New Notes are registered under the Securities Act of 1933, do not contain restrictions on transfer or provisions relating to additional interest, and do not entitle their holders to registration rights. Substantially all of the Initial Notes were tendered and exchanged for New Notes in the Exchange Offer.

Interest on the fixed rate notes is payable on March 16 and September 16 of each year until maturity, with the first interest payment made on September 16, 2026. Interest on the floating rate notes is payable on March 16, June 16, September 16, and December 16 of each year, with the first interest payment made on June 16, 2026.

The schedule of principal payments on long-term debt, excluding debt issuance costs, is as follows:

The estimated fair value of the Company’s long-term debt, excluding debt issuance costs, was approximately $15.0 billion as of September 26, 2026, compared to a carrying value of $16.0 billion. The Company determined the fair value of the long-term debt by utilizing transactions in listed markets for identical or similar liabilities. As such, the fair value of the long-term debt is classified as Level 2.

Revolving Credit Facilities

On March 6, 2026, the Company entered into a $1.0 billion 364-day credit agreement (the “364-Day Credit Agreement”). Amounts borrowed under the 364-Day Credit Agreement are due no later than March 5, 2027, unless (i) the Company elects 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.

On March 6, 2026, the Company entered into a $3.0 billion five-year credit agreement (the “Five-Year Credit Agreement”). Any 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.

The 364-Day Credit Agreement and Five-Year Credit Agreement (together, the “Revolving Credit Facilities”) are maintained for general corporate purposes. U.S. dollar advances under the Revolving Credit Facilities bear interest at a rate of either (i) term SOFR plus an applicable margin that varies from 0.75% to 1.25% per annum based on the Company’s public debt rating for its long-term senior unsecured debt or, in the event SOFR is unavailable, (ii) a base rate, plus an applicable margin 100 basis points less than the applicable margin for term SOFR advances (but not less than zero). Advances in alternative currencies will bear interest at rates based on the applicable benchmark rate for such currency, plus the margin applicable to term SOFR advances. The Company is also required to pay a commitment fee on unused commitments at a rate per annum based on the Company’s public debt rating.

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The Company may voluntarily prepay borrowings under the Revolving Credit Facilities without premium or penalty, subject to customary “breakage” costs. The Company may also reduce the commitments under either of the Revolving Credit Facilities, in whole or in part, in each case, subject to certain minimum amounts.

The Revolving Credit Facilities do not restrict the Company’s ability to pay dividends, nor do they contain financial covenants. They also contain customary representations and warranties, affirmative and negative covenants and events of default for investment grade borrowers and financings of this type. Except for certain affirmative covenants, the affirmative and negative covenants contained in the Revolving Credit Facilities are applicable only after revolving credit commitments are available to be drawn thereunder.

The revolving credit commitments under the Revolving Credit Facilities became available upon consummation of the Spin-off, subject to certain conditions customary for facilities of this type. As of September 26, 2026, there wasno outstanding balance on the Revolving Credit Facilities.

Commercial Paper Program

On June 29, 2026, the Company entered into a commercial paper program to issue unsecured commercial paper notes up to $4.0 billion, with maturities up to 397 days. Commercial paper notes are sold at par less a discount representing an interest factor, or if interest bearing, at par. As of September 26, 2026, there wasno outstanding balance of commercial paper notes.

Note 10. Leases

Supplemental cash flow information related to leases was as follows:

Supplemental balance sheet information related to leases was as follows:

Note 11. Accrued Liabilities

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Note 12. Stock-Based Compensation Plans

Prior to the Spin-off, Honeywell maintained stock-based compensation plans under which it granted stock options and restricted stock units (“RSUs”) to certain management level employees, including certain employees of the Company. For all periods prior to the Spin-off, the Condensed Consolidated Statements of Operations reflect an allocation of these expenses on a specific identification basis for employees who exclusively supported the Company or, when specific identification is not practicable, a proportional cost allocation method primarily based on revenue, depending on the nature of the services. The amounts presented are not necessarily indicative of future awards and do not necessarily reflect the costs that the Company would have incurred as an independent company for the periods presented prior to the Spin-off.

In June 2026, the Board of Directors approved the 2026 Stock Incentive Plan of Honeywell Aerospace Inc. and its Affiliates (“Aerospace 2026 Plan”), pursuant to which up to 35 million shares may be issued.

In connection with the Spin-off, in accordance with the Employee Matters Agreement, stock options and RSUs granted under Honeywell's equity compensation plans to employees of the Company and Honeywell were adjusted to reflect the impact of the Spin-off on these awards. To preserve the aggregate intrinsic value of Honeywell awards held prior to the Spin-off, the awards held by Aerospace employees were converted into equivalent awards under the Aerospace 2026 Plan.

Certain executives and employees of Honeywell that held Honeywell stock options and RSUs received an adjusted award consisting of both an award denominated in Honeywell equity and an award denominated in Aerospace equity. These awards were adjusted in accordance with the basket method, resulting in participants retaining units of the existing Honeywell award while receiving additional units of an Aerospace award. Upon vesting, the Company is obligated to settle all of the outstanding awards denominated in Aerospace equity.

Share counts for stock-based compensation discussed herein represent outstanding shares to be remitted by the Company to (i) its employees in connection with the Aerospace 2026 Plan adopted by the Company and (ii) employees of Honeywell that received awards denominated in the Company’s equity. The Company recognizes stock-based compensation expense related to unvested awards held by its employees.

Stock-Based Compensation Expense

Stock-based compensation cost, which is recognized in Selling, general, and administrative expenses in the Condensed Consolidated Statements of Operations, is provided in the following table:

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Stock Options

The exercise price, term, and other conditions applicable to each option granted under the Aerospace 2026 Plan are determined by the Compensation Committee of the Board of Directors. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of the Company's stock on that date. The fair value is recognized as an expense over the employee’s requisite service period (generally the vesting period of the award). Options under the Aerospace 2026 Plan generally vest over either athree orfour-year period and expire after 10 years. Forfeitures are estimated at the time of grant to recognize expense for those awards expected to vest and are based on historical forfeiture rates.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The Company does not have sufficient historical information on which to base expected volatility. As such, our volatility assumption is based on the historical and implied volatility of similar public companies, which were identified considering factors such as industry, stage of life cycle, size, and financial leverage. Because the Company does not have sufficient historical option exercise experience upon which we can estimate the expected term we estimate the expected term using the average of the vesting period and the contractual period of the award. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant.

The following table sets forth the weighted average assumptions used in determining the fair value of stock options:

1. Estimated on date of grant using Black-Scholes option-pricing model.

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The following table summarizes information about stock option activity for the three months ended September 26, 2026:

1. On June 29, 2026, the Company began trading as an independent, publicly traded company under the stock symbol “HONA” on the Nasdaq. The options outstanding as of June 29, 2026 pertain to Honeywell equity-based awards issued by Honeywell in prior periods that were converted to Aerospace equity-based awards as part of the Spin-off. The conversion to Aerospace awards was considered a modification of the original award. Incremental fair value recognized was immaterial.

As of September 26, 2026, there was $41 million of total unrecognized compensation cost related to non-vested stock option awards which is expected to be recognized over a weighted average period of 2.6 years.

Restricted Stock Units

RSU awards entitle the holder to receiveone share of common stock for each unit when the units vest. RSUs are issued to certain key employees and directors as compensation at fair market value at the date of grant. RSUs generally become fully vested over periods ranging from three tosix years and are payable in Aerospace common stock upon vesting. Certain RSU awards are performance-based and awarded to eligible employees which entitle the grantee to receive shares of common stock if specified Company performance goals are achieved during the performance period and if the grantee remains employed through the vesting period.

The following table summarizes information about RSU activity for the three months ended September 26, 2026:

1. On June 29, 2026, the Company began trading as an independent, publicly traded company under the stock symbol “HONA” on the Nasdaq. The RSUs outstanding as of June 29, 2026 pertain to Honeywell equity-based awards issued by Honeywell in prior periods that were converted to Aerospace equity-based awards as part of the Spin-off. The conversion to Aerospace awards was considered a modification of the original award. Incremental fair value recognized was immaterial.

As of September 26, 2026, there was approximately $109 million of total unrecognized compensation cost related to non-vested RSUs granted under the Company's stock plan which is expected to be recognized over a weighted average period of 2.4 years.

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Note 13. Earnings Per Share

On the Distribution Date,316.9 million shares of the Company’s common stock were distributed to Honeywell shareholders as of the Record Date. This amount is utilized for the calculation of both basic and diluted earnings per share for all periods presented prior to the Distribution as there was no dilutive effect from equity securities as the Company had no stock-based compensation awards outstanding prior to the Distribution.

The details of the earnings per share calculations for the three and nine months ended September 26, 2026 and September 27, 2025 are as follows (shares in millions):

1. Outstanding stock awards not included in the computation of diluted earnings per share because their effect was antidilutive. Prior to the Spin-off, there was no dilutive effect from equity securities as the Company had no stock-based compensation awards outstanding prior to the Distribution.

Note 14. Accumulated Other Comprehensive Loss

Changes in Accumulated Other Comprehensive Loss by Component

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Note 15. Pension Plans

For the periods prior to the Spin-off, certain employees of the Company participated in U.S. pension plans sponsored by Honeywell. For the purposes of the Condensed Consolidated Financial Statements, the Company accounted for these plans as multiemployer plans as they are not sponsored by the Company. Therefore, the related assets and liabilities are not reflected in the Condensed Consolidated Balance Sheets prior to the Spin-off.

Following the Spin-off, the Company sponsors qualified and non-qualified defined benefit pension plans for these U.S. employees (“U.S. Plans”), with benefit obligations and corresponding assets transferred from the Honeywell plans in which these employees participated. The U.S. Plans are closed to new participants. Subsequent to the Spin-off, the Company accounts for the U.S. Plans as single employer plans as they are sponsored by the Company. Therefore, the related assets and liabilities are reflected in the Condensed Consolidated Balance Sheets.

The Company also sponsors defined benefit pension plans which cover non-U.S. employees, in certain jurisdictions, principally Germany and Switzerland. The largest plans are closed to new participants. The non-U.S. pension plans are not material to the Company either individually or in the aggregate.

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The following tables summarize the balance sheet impact, including the benefit obligations, assets, and funded status associated with the Company's U.S. Plans:

1. Included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

2. Included in Other liabilities in the Condensed Consolidated Balance Sheets.

Amount recognized in Accumulated other comprehensive loss including the transfer from Honeywell, on a pre-tax basis, associated with the Company’s U.S. Plans as of September 26, 2026 are as follows:

Net periodic benefit income for the Company's U.S. Plans includes the following components:

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Major actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for the Company's U.S. Plans are presented in the following table as weighted averages:

The discount rate for the Company's U.S. Plans reflects the current rate at which the associated liabilities could be settled at the measurement date, which was the date of Spin-off. To determine discount rates for the Company's U.S. Plans, the Company uses a modeling process that involves matching the expected cash outflows of the Company's benefit plans to a yield curve constructed from a portfolio of high-quality, fixed income debt instruments. The Company uses the single weighted average yield of this hypothetical portfolio as a discount rate benchmark. The Company utilizes a full yield curve approach in the estimation of the service and interest cost components of net periodic pension benefit (income) cost for the Company's U.S. Plans. This approach applies the specific spot rates along the yield curve used in the determination of the pension benefit obligation to their underlying projected cash flows and provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates.

The Company's asset return assumption is based on historical plan asset returns over varying long-term periods combined with current market conditions and broad asset mix considerations with a focus on long-term trends rather than short-term market conditions. The Company will review the expected rate of return on an annual basis and revise it as appropriate.

The following amounts relate to the Company's U.S. Plans with accumulated benefit obligations exceeding the fair value of plan assets:

The accumulated benefit obligation for the Company's U.S. defined benefit pension plans was $6.2 billion as of September 26, 2026.

The Company's asset investment strategy for its U.S. Plans focuses on maintaining a diversified portfolio using various asset classes in order to achieve the Company's long-term investment objectives on a risk adjusted basis. The Company's long-term target allocations are as follows:60%-80% fixed income securities and cash,10%-20% public equity securities, and 0%-10% real estate and private markets investments. Fixed income securities include corporate bonds of companies from diversified industries, mortgage-backed securities, and U.S. Treasuries. Equity securities include publicly traded stock of companies located inside the United States. Real estate investments include direct investments in commercial properties and investments in real estate funds. Private market investments include investments in private equity that follow several different strategies. The Company reviews its assets on a regular basis to ensure that the Company is

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within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back within target allocations.

In accordance with ASC Topic 820, Fair Value Measurement, certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the following tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets.

As of the Spin-off, the fair values of the Company's U.S. Plans’ assets transferred from Honeywell by asset category are as follows:

1. Other items to reconcile to fair value of plan assets represents a receivable from the Honeywell sponsored pension plan that is expected to transfer to the Honeywell Aerospace sponsored pension plan in 2027.

The Company enters into futures contracts to gain exposure to certain markets. Sufficient cash or cash equivalents are held by the Company's pension plans to cover the notional value of the futures contracts. As of the Spin-off, the Company's U.S. plans had fixed income futures contracts with a total notional amount of $1.5 billion.

Common stocks, real estate investment trusts, and short-term investments are valued at the closing price reported in the active market in which the individual securities are traded. Corporate bonds, mortgage/asset-backed securities, and government securities are valued either by using pricing models, bids provided by brokers or dealers, quoted prices of securities with similar characteristics, or discounted cash flows, and as such, include adjustments for certain risks that may not be observable such as credit and liquidity risks. Certain securities are held in collective trust funds which are valued using net asset values provided by the administrators of the funds. Investments in private equity, debt, real estate and hedge funds, and direct private investments are valued at estimated fair value based on quarterly financial information received from the investment advisor and/or general partner. Investments in real estate properties are valued on a quarterly basis using the income approach. Valuation estimates are periodically supplemented by third party appraisals.

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The Company's funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards. The Company expects to make an immaterial amount of contributions for the Company’s U.S. plans in 2026.

Benefit payments for the U.S. pension plans, including amounts to be paid from Company assets, and reflecting expected future service, as appropriate, are expected to be paid as follows:

Note 16. Commitments and Contingencies

Environmental Matters

The Company is subject to various federal, state, local, and foreign government requirements relating to the protection of the environment. Liabilities for environmental matters are recorded when remedial efforts or damage claim payments are probable and the costs can be reasonably estimated. Such liabilities are based on the Company’s estimate of the undiscounted future costs required to complete the remedial work or resolve matters. There can sometimes be a range of reasonable estimates, and in these cases, the Company uses the amount within the range that is its best estimate. If no amount within the range appears to be a better estimate than any other, it uses the amount that is the low end of such range. We regularly assess the amount of our accruals as remediation efforts progress, or as additional technical, regulatory, or legal information becomes available (including as a result of emerging abilities to analyze relevant data), or to align with industry norms (including as a result of our separation). This ongoing review may result in periodic adjustments to our accruals for environmental liabilities (including as a result of known or unknown liabilities becoming both probable and estimable).

The following table summarizes information concerning the Company’s recorded liabilities:

Environmental liabilities are included in the following balance sheet accounts:

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In addition to the amounts accrued above, the Company has estimated that additional losses from environmental matters are reasonably possible. These reasonably possible losses, if they were to be incurred, could result in the Company's aggregate environmental liability being approximately two to three times higher than the currently recorded accruals, with potential payments extending beyond two decades. The Company's ultimate exposure may differ materially from current estimates, and it is possible that environmental liabilities could be material to the Company’s consolidated results of operations and operating cash flows in the periods recognized or paid. Further, the Company’s ongoing review of its environmental liabilities could result in changes to its accruals that could be material in the near term.

Litigation Matters

Paradigm Powerboats, Inc. and Turbine Marine Inc. v. Honeywell International Inc.

In January 2023, Paradigm Powerboats, Inc. and Turbine Marine Inc. filed an action against Honeywell in the U.S. District Court for the District of Arizona. The Company assumed liability for this matter in connection with the Spin-off. The complaint alleges misappropriation of confidential information and trade secrets concerning proposed T-55 engine applications in the oil and gas industry, breach of a confidentiality agreement, and related claims. Plaintiffs seek compensatory, exemplary, and punitive damages; attorneys’ fees; and other relief. A jury trial was scheduled for November 3, 2026, though a short continuance may be granted. The Company disputes the claims and intends to defend them vigorously. The Company cannot presently reasonably estimate a possible loss or range of loss, if any.

Flexjet v. Honeywell International Inc.

Flexjet, LLC (“Flexjet”) provides private jet services to customers. The Company maintains aircraft engine maintenance service contracts with Flexjet. During the COVID-19 pandemic, a customer dispute arose over delayed engine deliveries and specified engine enrollments under these maintenance service contracts. In 2021, Honeywell notified Flexjet that it was invoking force majeure provisions in response to the pandemic. On March 1, 2023, Flexjet brought suit against Honeywell, alleging breach of the parties’ aircraft engine maintenance service agreement (the “MSA”), seeking liquidated damages for delayed engine repairs, and claiming that its liquidated damages continue to accrue monthly related to engines awaiting repair. Additionally, two third-party aircraft repair and services companies, Duncan Aviation, Inc. (“Duncan”) and StandardAero Business Aviation Services, LLC (“StandardAero”) each sued Flexjet for amounts allegedly owed for services provided, and Flexjet filed third-party complaints in those cases on January 10, 2025 and June 10, 2025, respectively, purporting to join the Company as a third-party defendant.

The Company recorded accruals in accordance with ASC 450, Contingencies, with respect to the Flexjet-related matters. In December 2025, Honeywell announced it was in ongoing settlement negotiations with Flexjet and the other parties to the litigation matters.

On January 16, 2026, Honeywell completed a comprehensive settlement relating to its lawsuit with Flexjet. As part of this comprehensive settlement, Honeywell entered into settlement agreements with Duncan, StandardAero, and Flexjet. As of January 21, 2026, each of these cases has been dismissed. These settlements resolve all legal disputes among the parties arising out of the alleged breach of the MSA.

In connection with these settlements, the Company paid $59 million in December 2025 associated with the Duncan and StandardAero settlements. The Company paid $375 million in the first quarter of 2026 associated with a settlement payment to Flexjet.

Contemporaneous with Honeywell’s entry into the settlement agreement with Flexjet, Flexjet and Honeywell amended the MSA to extend the term through 2035.

Green v. Honeywell Aerospace Inc.

On September 22, 2026, a putative securities class action captioned Green v. Honeywell Aerospace Inc., et al. was filed in the United States District Court for the District of Arizona against the Company and its Chief

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Executive Officer and Chief Financial Officer. The complaint purports to be brought on behalf of purchasers of the Company’s common stock between June 29, 2026 and September 1, 2026 and alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 relating to certain public statements concerning the Company’s supply chain, financial outlook, and a cybersecurity-related government matter. The complaint seeks unspecified damages, attorneys’ fees, and other relief. No lead plaintiff has been appointed, and no class has been certified. The action is at an early stage, and the Company cannot presently reasonably estimate a possible loss or range of loss, if any.

Other Matters

The Company is subject to a number of other lawsuits, investigations, and claims (some of which involve large dollar amounts) arising out of the conduct of its business operations, including matters relating to commercial transactions, the integration of emerging technologies (such as, but not limited to, artificial intelligence and machine learning), employment, intellectual property, legal, and environmental, health, and safety matters. The Company recognizes liabilities for any contingency that is probable of occurrence and reasonably estimable. The Company routinely assesses the likelihood of adverse judgments or outcomes in such matters, as well as potential ranges of probable losses (taking into consideration the likelihood of any insurance recoveries), based on a careful analysis of each matter, and if appropriate, with the assistance of outside legal counsel and other experts.

Given the uncertainty inherent in litigation and investigations, the Company cannot predict when or how these matters will be resolved. For certain matters described above, the Company is unable to estimate a reasonably possible loss or range of loss in excess of current accruals, if any. For other commitment and contingency matters, and considering the Company's past experience and existing accruals as of the date of these financial statements, the Company does not expect the outcome of such matters, either individually or in the aggregate, to have a material adverse effect on the Company's consolidated financial position. Because most contingencies are resolved over long periods of time, potential liabilities are subject to change due to new developments (including new discovery of facts, changes in legislation, and outcomes of similar cases through the judicial system), changes in assumptions, changes in settlement strategy, or the impact of evidentiary requirements, any of which could cause or require the Company to pay damage awards or settlements (or become subject to equitable remedies) that could have a material adverse effect on the Company’s consolidated results of operations or operating cash flows in the periods recognized or paid.

Note 17. Segment Financial Data

The Company manages its global business operations through three operating segments, each of which also qualifies as a reportable segment. Segment information is consistent with how the President and Chief Executive Officer of the Company, who is the Chief Operating Decision Maker (“CODM”), reviews the Company’s business, makes investing and resource allocation decisions, and assesses operating performance.

Segment profit and Segment adjusted EBIT are measures of segment profitability used by the CODM, and Segment profit is the measure most consistent with amounts included in the Condensed Consolidated Financial Statements. The CODM evaluates segment performance based on Segment profit, by comparing budget-to-actual and period-over-period results. Each Segment’s profit excludes taxes, interest, amortization of acquisition-related intangibles, stock compensation expense, environmental expense, pension (income) expense, repositioning and other charges, transaction costs, expenses associated with the Honeywell trademark license, and other items within Other (income) expense, net. Transaction costs consist of professional advisory services fees related to the Spin-off.

The Company does not report asset information by segment for internal or external reporting purposes as the Company’s CODM does not assess performance, make strategic decisions, or allocate resources based on assets.

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The below table summarizes information about significant segment net sales and expenses and other segment items, for each historical period:

2. For each reportable segment, the other segment items category includes corporate allocations, equity income of affiliated companies, Selling, general and administrative, and Research and development expenses.

2. For each reportable segment, the other segment items category includes corporate allocations, equity income of affiliated companies, Selling, general and administrative, and Research and development expenses.

2. For each reportable segment, the other segment items category includes corporate allocations, equity income of affiliated companies, Selling, general and administrative, and Research and development expenses.

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2. For each reportable segment, the other segment items category includes corporate allocations, equity income of affiliated companies, Selling, general and administrative, and Research and development expenses.

A reconciliation of Segment profit to Income before taxes is as follows:

1. Amounts included in Cost of products and services sold and Selling, general and administrative expenses.

2. Amounts included in Selling, general and administrative expenses.

3. Amounts included in Selling, general and administrative expenses and Other (income) expense, net.

4. Amounts included in Cost of products and services sold and Other (income) expense, net.

5. Amounts included in Cost of product and services sold, Selling, general and administrative, Research and development, and Other (income) expense, net.

6. Amounts include repositioning charges and other expenses.

Note 18. Subsequent Event

On October 28, 2026, the Company announced that the Board of Directors declared a dividend of $0.40 per share of common stock outstanding, payable on December 4, 2026 to shareholders of record as of November 13, 2026.