Honeywell Aerospace Inc.

TABLE OF CONTENTS

SEGMENT RESULTS

We manage and report our operating results through three reportable segments: Electronic Solutions, Engines & Power Systems, and Control Systems. The remainder of our operations are presented in Corporate and All Other, which is not a reportable business segment.

Electronic Solutions

The following table sets forth the operating results for our ES segment for the three and nine months ended September 26, 2026 and September 27, 2025:

(1)See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for the definition of Segment adjusted EBIT and Segment adjusted EBIT margin.

The following table sets forth the factors contributing to year-over-year changes in our ES segment’s Net sales for the three and nine months ended September 26, 2026:

ES Net sales increased $76 million due to higher organic sales of $54 million in Commercial Original Equipment and $42 million in Defense and Space, offset by lower organic sales of $20 million in Commercial Aftermarket.

Segment Profit and Segment adjusted EBIT increased by $54 million or 11% and Segment profit margin and Segment adjusted EBIT margin increased 2% for the three months ended September 26, 2026.

ES Net sales increased $396 million due to higher organic sales of $216 million in Defense and Space and $162 million in Commercial Original Equipment.

Segment Profit and Segment adjusted EBIT increased by $138 million or 10% and Segment profit margin and Segment adjusted EBIT margin increased 1% for the nine months ended September 26, 2026.

TABLE OF CONTENTS

Engines & Power Systems

The following table sets forth the operating results for our E&PS segment for the three and nine months ended September 26, 2026 and September 27, 2025:

(1)See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for the definition of Segment adjusted EBIT and Segment adjusted EBIT margin.

The following table sets forth the factors contributing to year-over-year changes in our E&PS segment’s Net sales for the three and nine months ended September 26, 2026:

E&PS Net sales increased $37 million primarily due to higher organic sales of $74 million in Commercial Aftermarket, partially offset by lower organic sales of $30 million in Defense and Space.

Segment profit and Segment adjusted EBIT decreased by $49 million or 16% and Segment profit margin and Segment adjusted EBIT margin decreased 3% for the three months ended September 26, 2026.

E&PS Net sales increased $199 million primarily due to higher organic sales of $231 million in Commercial Aftermarket, partially offset by lower organic sales of $43 million in Defense and Space.

Segment profit and Segment adjusted EBIT decreased by $43 million or 6% and Segment profit margin and Segment adjusted EBIT margin decreased 2% for the nine months ended September 26, 2026.

TABLE OF CONTENTS

Control Systems

The following table sets forth the operating results for our CS segment for the three and nine months ended September 26, 2026 and September 27, 2025:

(1)See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for the definition of Segment adjusted EBIT and Segment adjusted EBIT margin.

The following table sets forth the factors contributing to year-over-year changes in our CS segment’s Net sales for the three and nine months ended September 26, 2026:

CS Net sales remained flat due to lower organic sales of $15 million in Commercial Aftermarket, partially offset by higher organic sales of $9 million in Defense and Space.

Segment profit and Segment adjusted EBIT increased by $6 million or 2% and Segment profit margin and Segment adjusted EBIT margin remained flat for the three months ended September 26, 2026.

CS Net sales increased $27 million due to higher organic sales of $50 million in Commercial Aftermarket and $24 million in Defense and Space, partially offset by lower organic sales of $56 million in Commercial Original Equipment.

Segment profit and Segment adjusted EBIT decreased by $86 million or 7% and Segment profit margin and Segment adjusted EBIT margin decreased 3% for the nine months ended September 26, 2026.

Corporate and All Other

Corporate and All Other primarily includes unallocated corporate costs and is not a separate reportable business segment. We monitor the activities in Corporate and All Other to determine the need for further reportable business segment disaggregation.

TABLE OF CONTENTS

NON-GAAP FINANCIAL MEASURES

We use non-GAAP financial measures to supplement the financial measures prepared in accordance with GAAP. These include (1) Organic sales growth, (2) Total segment profit, (3) Adjusted EBIT, (4) Adjusted EBIT margin, (5) Segment adjusted EBIT, and (6) Segment adjusted EBIT margin.

Below are definitions and reconciliations of certain non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. Management believes that, when considered together with reported amounts, these measures are useful to investors and management in understanding our ongoing operations and in the analysis of ongoing operating trends. Management believes these non-GAAP financial measures provide investors with a more meaningful measure of its performance period to period, align with how management evaluates performance internally, and make it easier for investors to compare our performance to peers. These measures should be considered in addition to, and not as replacements for, the most directly comparable GAAP measure. The non-GAAP financial measures we use are as follows:

•Organic sales growth: We define organic sales growth as the change in reported Net sales relative to the comparable period, excluding the impact on sales from foreign currency translation and acquisitions, net of divestitures, for the first 12 months following the transaction date, and other items that are unusual and non-recurring in nature (e.g. impact of comprehensive settlement related to Flexjet litigation). We believe this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

•Total segment profit: We define Total segment profit as Net income excluding 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. We believe this measure is useful to investors as it provides greater transparency with respect to supplemental information used by management in its financial and operational decision making, as well as for understanding ongoing operating trends.

•Adjusted EBIT and Adjusted EBIT margin: We define Adjusted EBIT as Net income excluding 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, other items within Other (income) expense, net, and other items that are unusual or non-recurring in nature, including but not limited to impairment charges and litigation charges (e.g., comprehensive settlement related to Flexjet litigation). We define Adjusted EBIT margin as Adjusted EBIT divided by Net sales adjusted for the impact of the Flexjet-related litigation settlement. We believe these measures are useful to investors as they provide greater transparency with respect to supplemental information used by management in its financial and operational decision making, as well as for understanding ongoing operating trends.

•Segment adjusted EBIT and Segment adjusted EBIT margin: We define Segment adjusted EBIT as Income before taxes excluding 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, other items within Other (income) expense, net, and other items that are otherwise of an unusual or non-recurring in nature, including but not limited to impairment charges and litigation charges (e.g., comprehensive settlement related to Flexjet litigation). We define Segment adjusted EBIT margin as Segment adjusted EBIT divided by Net sales adjusted for the impact of the Flexjet-related litigation settlement. We believe these measures are useful to investors as they provide greater transparency with respect to supplemental information used by management in its financial and operational decision making, as well as for understanding ongoing operating trends.

TABLE OF CONTENTS

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

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

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

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

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

(6)Amounts include repositioning and other charges.

TABLE OF CONTENTS

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

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

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

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

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

(6)Amounts include repositioning and other charges.

LIQUIDITY AND CAPITAL RESOURCES

Historically, as part of Honeywell, we were dependent upon Honeywell for its working capital and financing requirements. Honeywell used a centralized approach to cash management and financing of its operations. Our excess cash in participating bank accounts was transferred to Honeywell daily, and Honeywell funded our operating and investing activities as needed. This arrangement was not reflective of the manner in which we would have financed our operations had we been a standalone business separate from Honeywell during the periods presented prior to the Spin-off. Transfers of cash between Honeywell and us have been included within Net transfers to Parent in the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Equity.

Following our Spin-off, we no longer participate in Honeywell’s centralized treasury management and funding programs. Our ability to fund our operating needs depends on our ability to continue to generate positive cash flows from operations, and on our ability to obtain debt or equity financing on acceptable terms. We believe that our cash balances and funds provided by operating activities, along with expected borrowing capacity and access to capital markets, taken as a whole, will provide (i) adequate liquidity to meet all of our

TABLE OF CONTENTS

current and long-term obligations when due, including for at least the next 12 months, and fund capital expenditures and (ii) flexibility to make investment opportunities, including acquisitions, that may arise. However, there can be no assurance that we will be able to obtain additional debt or equity financing on acceptable terms in the future.

We expect to utilize our cash flows to continue to invest in our business, growth strategies, people, and the communities in which we operate; service and repay our indebtedness over time; and create shareholder value through dividends and share repurchases.

In connection with the Spin-off, we issued senior unsecured notes in an aggregate principal amount of $16.0 billion. We distributed $6.0 billion of notes due 2046, 2056, and 2066 and $9.1 billion of net cash proceeds from the remaining series of senior unsecured notes to Honeywell as partial consideration for the contribution of assets by Honeywell to us in connection with the distribution. The balance was retained to pay fees and expenses related to the separation, the distribution, the debt transactions, and for general corporate purposes.

In addition, we entered into a 364-day senior unsecured revolving credit facility and a five-year senior unsecured revolving credit facility, together in an aggregate committed amount as of the date of distribution of $4.0 billion, and a $4.0 billion senior unsecured commercial paper program. The undrawn portion of the credit facilities serves as a backup facility for the issuance of the commercial paper program. We expect to use proceeds from the senior unsecured revolving credit facilities and senior unsecured commercial paper program for general corporate purposes.

Cash and Cash Requirements

Summary

As of September 26, 2026 and December 31, 2025, our cash and cash equivalents totaled $1.6 billion and $213 million, respectively. Our ability to generate positive cash flows from operations is dependent on general economic conditions and the competitive environment in our industry and is subject to the business and other risk factors described in the section of the Information Statement titled “Risk Factors.” If we are unable to generate sufficient cash flows from operations or otherwise comply with the terms of any external borrowings, we may be required to seek additional financing alternatives.

We continually assess the relative strength of each business in our portfolio as to strategic fit, industry position, profit, and cash flow contribution to identify target investment and acquisition opportunities that would strengthen our portfolio. We identify acquisition candidates that will further our strategic plan and strengthen our existing core businesses.

Share Repurchase Program

On July 23, 2026, our Board of Directors authorized a share repurchase program under which we may repurchase up to $3.5 billion of our outstanding common stock. The program has no expiration date and may be modified, suspended, or discontinued at any time without prior notice, and it does not obligate us to repurchase any shares. We expect to fund repurchases from operating cash flows and available liquidity. The program is intended to return capital to shareholders and offset dilution from our equity compensation programs, as well as manage our capital structure. To date, we have not repurchased any shares under the program.

Dividends

On October 28, 2026, we announced that our Board of Directors declared a dividend of $0.40 per share of common stock outstanding, payable on December 4, 2026, to shareholders on record as of November 13, 2026. Future dividends, if any, will remain subject to approval and declaration by our Board of Directors.

TABLE OF CONTENTS

Cash and Cash Equivalents Held by Foreign Subsidiaries

Cash and cash equivalents held by our foreign subsidiaries were $1.0 billion and $209 million as of September 26, 2026 and December 31, 2025.

Cash Flow Summary

Summarized cash flow information for the nine months ended September 26, 2026 and 2025 are as follows:

Operating

Net cash provided by operating activities decreased $850 million for the nine months ended September 26, 2026 compared to the same period in 2025. The decrease in net cash provided by operating activities is primarily attributable to increases of $391 million in interest payments on debt, $380 million in transaction costs paid related to the Spin-off, and $377 million driven by the Flexjet litigation settlement payments, partially offset by $159 million due to timing of customer cash collections.

Investing

Net cash used for investing activities remained flat for the nine months ended September 26, 2026 compared to the same period in 2025.

Financing

Net cash provided by financing activities increased $2.0 billion for the nine months ended September 26, 2026 compared to the same period in 2025, primarily due to net proceeds from the issuance of senior unsecured notes in connection with the Spin-off of $15.8 billion, partially offset by higher net transfers to Honeywell of $13.9 billion.

Borrowings

We leverage a variety of debt instruments to manage our overall borrowing costs. As of September 26, 2026, our total borrowings were $15.9 billion. We had immaterial borrowings outstanding as of December 31, 2025.

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 and variable 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 par less a discount representing an interest factor, or if interest bearing, at par, and have a maturity of not more than 397 days from date of issuance. Borrowings under the commercial paper program are available for general corporate purposes.

TABLE OF CONTENTS

We also have the following revolving credit agreements:

•A $1.0 billion 364-day credit agreement (the 364-Day Credit Agreement) with a syndicate of banks, dated as of March 6, 2026. 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 26, 2026, there were no outstanding borrowings under our 364-Day Credit Agreement.

•A $3.0 billion five-year credit agreement (the Five-Year Credit Agreement) with a syndicate of banks, dated as of March 6, 2026. As of September 26, 2026, there were no outstanding borrowings under our Five-Year Credit Agreement.

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

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 26, 2026, S&P Global Ratings (“S&P”), Fitch Ratings Inc. (“Fitch”), and Moody’s Investors Service (“Moody’s”) had ratings on our debt set forth in the table below:

OTHER MATTERS

Critical Accounting Estimates

Other than the item disclosed below, there were no material changes during the three and nine months ended September 26, 2026, to the items disclosed as critical accounting estimates in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Information Statement.

Defined Benefit Pension Plans

For periods prior to the Spin-off, certain employees of Honeywell Aerospace participated in U.S. pension plans sponsored by Honeywell. Following the Spin-off, we sponsor both funded and unfunded U.S. and non-U.S. defined benefit pension plans. For financial reporting purposes, net periodic pension (income) expense is calculated annually based upon various actuarial assumptions, including a discount rate for plan obligations and an expected long-term rate of return on plan assets. Changes in the discount rate and expected long-term rate of return on plan assets could materially affect the pension (income) expense amount. Pension (income) expense is comprised of service and interest cost, assumed return on plan assets, prior service amortization (Pension ongoing (income) expense), and potential mark-to-market adjustment (MTM Adjustment).

TABLE OF CONTENTS

The key assumptions used in developing our net periodic pension (income) expense for our U.S. plans included the following:

The MTM Adjustment represents the recognition of net actuarial gains or losses in excess of 10% of the greater of the fair value of plan assets or the plans’ projected benefit obligation (the corridor). Net actuarial gains or losses occur when the actual experience differs from any of the various assumptions used to value our pension plans or when assumptions change. The primary factors contributing to actuarial gains or losses are changes in the discount rate used to value pension obligations as of the measurement date each year and the difference between expected and actual returns on plan assets. The mark-to-market accounting method results in the potential for volatile and difficult to forecast MTM Adjustments. There was no MTM adjustment in the three months ended September 26, 2026.

We determine the expected long-term rate of return on plan assets utilizing historical plan asset returns over varying long-term periods combined with our expectations of future market conditions and asset mix considerations (see Note 15. Pension Plans of the Notes to the Condensed Consolidated Financial Statements for details on the actual various asset classes and targeted asset allocation percentages for our pension plans). We are using an expected rate of return on plan assets of 7.25% for 2026.

The discount rate reflects the market rate on the measurement date for high-quality fixed income investments with maturities corresponding to our benefit obligations and is subject to change each year. The discount rate can be volatile from year to year as it is determined based upon prevailing interest rates as of the measurement date. We used a 5.50% discount rate to determine benefit obligations as of September 26, 2026.

Changes in our expected rate of return on plan assets and discount rate resulting from economic events also affect future Pension ongoing (income) expense. The following table highlights the sensitivity of our U.S. pension obligations and ongoing (income) expense to changes in these assumptions, with all other assumptions remaining constant:

Pension ongoing income for our world-wide pension plans is expected to be approximately $150 million in 2026. Also, if required, a MTM Adjustment will be recorded in the fourth quarter of 2026 in accordance with our pension accounting method. It is difficult to reliably forecast or predict whether there will be a MTM Adjustment in 2026, and if one is required, what the magnitude of such adjustment will be. MTM Adjustments are primarily driven by events and circumstances beyond our control such as changes in interest rates and the performance of the financial markets.

TABLE OF CONTENTS

Recent Accounting Pronouncements

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