Honeywell We describe many of the trends and other factors that drive our business and future results in this presentation. Such discussions contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are those that address activities, events, or developments that management intends, expects, projects, believes or anticipates will or may occur in the future. They are based on management's assumptions a ...

| UNITED STATES | | --- | | SECURITIES AND EXCHANGE COMMISSION | | Washington, D.C. 20549 | | Form 10-Q | | __________________ | | ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) | | OF THE SECURITIES EXCHANGE ACT OF 1934 | | For the quarterly period ended September 30, 2023 | | OR | | ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) | | OF THE SECURITIES EXCHANGE ACT OF 1934 | | For the transition period from ______ to _____ | | Commission file number 1-8974 | Honeywell International Inc. (Exact name ...

Honeywell Non-GAAP Financial Measures | --- | --- | --- | --- | |-----------------------------|--------------------------------------------------------------------|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | 2Q 2023 Actual | 2Q 2023 Guidance | 2Q 2023 Highlights | | Adjusted Earnings Per Share | $2.23 $2.38 Excluding Pension Headwind | $2.15 - $2.25 ...

Financial Performance - Honeywell reported net sales of $9,146 million for the three months ended June 30, 2023, an increase of 2.2% compared to $8,953 million in the same period of 2022[12]. - Net income attributable to Honeywell for the six months ended June 30, 2023, was $2,881 million, representing a 20.3% increase from $2,395 million in the same period of 2022[12]. - Earnings per share (EPS) for Q2 2023 was $2.24, compared to $1.86 in Q2 2022, reflecting a 20.3% increase[12]. - The company reported a comprehensive income of $1,414 million for Q2 2023, compared to $1,165 million in Q2 2022[15]. - Net sales for the six months ended June 30, 2023, were $18,010 million, an increase from $17,329 million in the same period of 2022, representing a growth of approximately 3.9%[97]. - The company reported a net income attributable to Honeywell of $1,487 million for Q2 2023, compared to $1,261 million in Q2 2022, reflecting a 17.9% year-over-year growth[107]. Segment Performance - Aerospace segment net sales were $3,341 million for the three months ended June 30, 2023, up 15.3% from $2,898 million in the same period of 2022[43]. - Honeywell Building Technologies segment net sales were $1,510 million for the three months ended June 30, 2023, slightly down from $1,531 million in the same period of 2022[43]. - Performance Materials and Technologies segment net sales increased to $2,861 million for the three months ended June 30, 2023, compared to $2,694 million in the same period of 2022, reflecting a 6.2% growth[43]. - Safety and Productivity Solutions segment net sales decreased to $1,433 million for the three months ended June 30, 2023, down from $1,829 million in the same period of 2022, a decline of 21.7%[43]. - Total segment profit for the three months ended June 30, 2023, was $2,052 million, up from $1,867 million in 2022, indicating an increase of 9.9%[149]. Assets and Liabilities - Total assets as of June 30, 2023, were $62,337 million, slightly up from $62,275 million at the end of 2022[18]. - Honeywell's total current liabilities decreased to $17,174 million as of June 30, 2023, from $19,938 million at the end of 2022[18]. - Honeywell's long-term debt increased to $17,600 million as of June 30, 2023, from $15,123 million at the end of 2022[18]. - The total long-term debt and current related maturities increased to $18,545 million as of June 30, 2023, from $16,853 million as of December 31, 2022[80]. - Total environmental liabilities increased to $693 million as of June 30, 2023, up from $615 million at the end of 2022[112]. Cash Flow and Investments - Cash flows from operating activities decreased to $576 million in 2023 from $825 million in 2022, reflecting a decline of 30.1%[21]. - The company reported a net cash used for investing activities of $709 million in 2023, compared to a net cash provided of $414 million in 2022[21]. - Honeywell's net cash used for financing activities was $863 million in 2023, a significant decrease from $3,832 million in 2022[21]. - The company repurchased $1,176 million of common stock in the first half of 2023, compared to $2,437 million in the same period of 2022, indicating a decrease of 51.7%[24]. - Honeywell's cash dividends paid in the first half of 2023 totaled $1,378 million, compared to $1,339 million in 2022, marking an increase of 2.9%[24]. Research and Development - The company invested $375 million in research and development during Q2 2023, a decrease of 2.8% from $386 million in Q2 2022[12]. - Research and development expenses remained flat year-over-year for both Q2 and YTD 2023[181][182]. Tax and Regulatory Matters - The effective tax rate for the Company was higher than the U.S. federal statutory rate of 21%, primarily due to increased benefits from taxes on non-U.S. earnings[77]. - The effective tax rate decreased by 470 basis points due to benefits from taxes on non-U.S. earnings and lower repositioning related expenses[189]. - Honeywell reached a comprehensive resolution to investigations by the DOJ and SEC, agreeing to pay $202.7 million in penalties and disgorgement in January 2023[137]. Environmental and Asbestos Liabilities - Honeywell's total asbestos-related liabilities as of June 30, 2023, amounted to $1.249 billion, down from $2.616 billion as of December 31, 2022[117]. - The company reported insurance recoveries for asbestos-related liabilities totaling $244 million as of June 30, 2023, compared to $265 million at the end of 2022[120]. - Honeywell agreed to pay $1.325 billion to the NARCO Trust as part of a buyout agreement, which was completed on January 30, 2023[124]. - As of June 30, 2023, Honeywell recorded a receivable of $103 million from Resideo for environmental costs, with $140 million classified as other current assets and $507 million as other assets[116]. Market and Economic Conditions - The Russia-Ukraine conflict continues to impact global financial and energy markets, contributing to supply chain shortages and inflationary pressures[158]. - The company has implemented strategies to mitigate supply chain constraints and inflationary pressures, including pricing actions and direct engagement with suppliers[157].

Honeywell International Inc. Conference Call Summary Company Overview - **Company**: Honeywell International Inc. (NASDAQ: HON) - **Event**: Bank of America Securities 2023 Financial Services Conference - **Date**: June 14, 2023 - **Participants**: Greg Lewis (CFO), Joe O'Dea (Wells Fargo) Key Points Financial Outlook - Honeywell reaffirmed a growth algorithm of **4% to 7%** and margin expansion of **40 to 60 basis points** [2] - Gross margin target set at **40% or more**, currently at **37%** [2] - Recurring revenue base is about **one-third** of the portfolio, with a target to grow it over **35%** [3] - Capital deployment expected to exceed **$25 billion** over the next three years [3] - Upgraded margin expectations for HPT to **27%** and SPS to **20%** [3] Demand and Market Trends - Strong demand in aerospace and defense, with an upgraded outlook to low-double-digits growth [4] - China’s market is improving, with low-single-digit growth in Q1 accelerating in Q2 [7] - Aerospace demand remains solid despite supply chain challenges, with normalization expected in short-cycle businesses [8] - Past due backlogs in aerospace continue to grow due to strong demand [12] Supply Chain and Pricing - Supply chain issues are bifurcated: semiconductor shortages are more concentrated, while aerospace faces skilled labor shortages [14][15] - Improvement in supplier commitments and reduced decommit rates, leading to better output [16] - Honeywell achieved **10% price increase** in 2022, with a more nuanced pricing strategy for 2023 [18][19] - Confidence in maintaining positive price-cost dynamics across the portfolio [20][24] M&A Strategy - Honeywell is focusing on M&A with a target of **two to four deals annually** [45] - The current capital markets environment is favorable for Honeywell due to a strong balance sheet [44] - Increased bandwidth for M&A activities as integration efforts from previous transformations are winding down [42] Segment Insights - **Aerospace**: Expected mid-single-digit organic revenue growth, with strong demand for commercial aerospace and defense [46][48] - **HBT (Honeywell Building Technologies)**: New construction represents about **10%** of total demand, with a focus on institutional customers [50] - **PMT (Performance Materials and Technologies)**: Targeting sustainable technologies, aiming to grow this segment to a **$1 billion** business [56] - **SPS (Safety and Productivity Solutions)**: E-commerce trends remain strong, with expectations of a bottoming out in revenue trends by the end of 2023 [61][62] Digital Transformation - Honeywell is reducing ERP systems from **150 to 10**, enhancing operational efficiency and data integration [36][39] - Focus on creating a digital infrastructure that supports various business models, improving customer experience and operational metrics [29][33] Conclusion - Honeywell is positioned for growth with a robust financial outlook, strong demand across key segments, and a strategic focus on M&A and digital transformation initiatives. The company is navigating supply chain challenges while maintaining pricing power and exploring sustainable technology opportunities.

Honeywell International Inc. (NASDAQ:HON) Company Conference Call May 23, 2023 8:00 AM ET Company Participants Greg Lewis - Senior Vice President, Chief Financial Officer Conference Call Participants Moderator - Wolfe Research Moderator Okay, so with me I’ve got Greg Lewis, SVP and CFO of Honeywell. Thanks for being here. Greg Lewis Thank you. Moderator Greg, I know you’ve got some opening slides, so over to you. Greg Lewis Yes, just really quickly--oh, thank you very much, appreciate that. While that’ ...

Honeywell International, Inc. (NASDAQ:HON) Goldman Sachs Industrials & Materials Conference Call May 10, 2023 8:00 AM ET Company Participants Lucian Boldea - President and CEO Conference Call Participants Joe Ritchie - Goldman Sachs Group Joe Ritchie All right. Good morning, everybody. Welcome to Day 2 of the Goldman Sachs Industrials and Materials Conference. My name is Joe Ritchie, head of our Industrials and Materials team. I also cover the multi-industry sector. Before we get going with our first presen ...

MSD Specialty Chemicals • Reduced investment in warehouse automation capacity leads to demand trough in 2023 • Short-cycle softness impacting sensing and safety technologies and productivity solutions and services, particularly in the first half (HSD) e-Commerce • Mix shift and operational improvements driving another strong year of margin expansion Overall Favorable End Market Outlook in 2023 1Q 2023 Earnings - April 27, 2023 13 ADDITIONAL 2023 INPUTS | --- | --- | --- | --- | --- | |---------------------- ...

Honeywell International Inc. (NASDAQ:HON) Q1 2023 Earnings Conference Call April 27, 2023 8:30 AM ET Company Participants Sean Meakim - Vice President of Investor Relations Darius Adamczyk - Chairman & Chief Executive Officer Vimal Kapur - President & Chief Operating Officer Greg Lewis - Senior Vice President & Chief Financial Officer Conference Call Participants Steve Tusa - JPMorgan Julian Mitchell - Barclays Nigel Coe - Wolfe Research Scott Davis - Melius Research Sheila Kahyaoglu - Jefferies Jeff Spragu ...

Financial Performance - Net sales for Q1 2023 increased to $8,864 million, up 5.8% from $8,376 million in Q1 2022[13] - Net income attributable to Honeywell rose to $1,394 million in Q1 2023, compared to $1,134 million in Q1 2022[13] - Earnings per share (diluted) increased to $2.07 in Q1 2023 from $1.64 in Q1 2022[13] - Comprehensive income attributable to Honeywell was $1,331 million in Q1 2023, compared to $1,242 million in Q1 2022[16] - Net income attributable to Honeywell for Q1 2023 was $1.394 billion, compared to $1.134 billion in Q1 2022, reflecting a 22.9% year-over-year increase[22] - Net sales for Q1 2023 reached $8,864 million, up from $8,376 million in Q1 2022[44] - Net sales for Q1 2023 were $8,864 million, with cost of products sold at $4,068 million and cost of services sold at $1,430 million[89] - Net income attributable to Honeywell increased to $1.394 billion in Q1 2023 from $1.134 billion in Q1 2022, with basic earnings per share rising to $2.09 from $1.66[99] - Net sales increased by 6% in Q1 2023 compared to Q1 2022, driven by a 6% increase in pricing and a 2% increase in volume, partially offset by a 2% unfavorable foreign currency translation impact[158] - Gross margin increased by $0.3 billion, with gross margin percentage rising 160 basis points to 38.0% compared to 36.4% in Q1 2022[163] - Net sales for Q1 2023 were $8,864 million, up from $8,376 million in Q1 2022, with product sales at $6,310 million and service sales at $2,554 million[13] - Net income attributable to Honeywell for Q1 2023 was $1,394 million, compared to $1,134 million in Q1 2022[13] - Earnings per share (basic) for Q1 2023 were $2.09, up from $1.66 in Q1 2022[13] - Total costs, expenses, and other for Q1 2023 were $7,082 million, compared to $6,871 million in Q1 2022[13] Cash Flow and Liquidity - Cash and cash equivalents declined to $6,869 million as of March 31, 2023, from $9,627 million as of December 31, 2022[19] - Net cash used for operating activities in Q1 2023 was $784 million, a significant decline from $36 million provided by operating activities in Q1 2022[22] - Cash and cash equivalents decreased by $2.758 billion in Q1 2023, ending the quarter at $6.869 billion compared to $9.281 billion in Q1 2022[22] - The company repurchased $699 million worth of common stock in Q1 2023, a decrease from $1.018 billion in Q1 2022[22] - Cash dividends per share increased to $1.030 in Q1 2023 from $0.980 in Q1 2022[25] - Cash and cash equivalents decreased to $7.2 billion as of March 31, 2023, from $10.1 billion as of December 31, 2022[197] - Net cash provided by operating activities decreased by $820 million in Q1 2023, primarily due to a $1.38 billion decrease in other operating activities[204] - Cash related to investing activities decreased by $19 million in Q1 2023, driven by a $176 million decrease in cash paid for acquisitions and a $79 million net decrease in investments[205] - Cash related to financing activities decreased by $254 million in Q1 2023, primarily due to a $1.32 billion increase in payments of long-term debt[206] - The company repurchased $699 million of common stock in Q1 2023 and has a remaining authorization of $2.1 billion under its $10 billion share repurchase program[208] - The company made payments of approximately $1.5 billion in early 2023 related to the NARCO Buyout and UOP Matters, with an expected receipt of $295 million related to the HWI Sale[211] Balance Sheet and Debt - Total assets decreased to $59,883 million as of March 31, 2023, from $62,275 million as of December 31, 2022[19] - Total current liabilities decreased to $17,896 million as of March 31, 2023, from $19,938 million as of December 31, 2022[19] - Long-term debt decreased to $14,670 million as of March 31, 2023, from $15,123 million as of December 31, 2022[19] - Total Honeywell shareowners' equity increased to $16,919 million as of March 31, 2023, from $16,697 million as of December 31, 2022[19] - Total shareowners' equity decreased to $17.515 billion in Q1 2023 from $19.051 billion in Q1 2022[25] - The company entered into a $1.5 billion 364-day credit agreement and a $4.0 billion five-year credit agreement in March 2023[77] - As of March 31, 2023, there were no outstanding borrowings under the new credit agreements[78] - The company's total long-term debt decreased to $14.670 billion in Q1 2023 from $15.123 billion in Q4 2022[76] - Total borrowings were $19.2 billion as of March 31, 2023, compared to $19.6 billion as of December 31, 2022[199] Segment Performance - Aerospace segment net sales increased to $3,111 million in Q1 2023, up from $2,749 million in Q1 2022, driven by growth in Commercial Aviation Aftermarket ($1,423 million vs. $1,168 million) and Defense and Space ($1,147 million vs. $1,103 million)[44] - Honeywell Building Technologies net sales rose to $1,487 million in Q1 2023, compared to $1,429 million in Q1 2022, with Products contributing $908 million (up from $879 million) and Building Solutions at $579 million (up from $550 million)[44] - Performance Materials and Technologies net sales grew to $2,749 million in Q1 2023, up from $2,453 million in Q1 2022, led by Process Solutions ($1,288 million vs. $1,152 million) and Advanced Materials ($896 million vs. $821 million)[44] - Safety and Productivity Solutions net sales declined to $1,515 million in Q1 2023 from $1,744 million in Q1 2022, with Warehouse and Workflow Solutions dropping to $464 million from $592 million[44] - Aerospace segment net sales increased by 13% to $3.111 billion, with segment profit rising 10% to $827 million[177] - Honeywell Building Technologies segment net sales increased by 4% to $1.487 billion, with segment profit rising 12% to $375 million[182] - Performance Materials and Technologies segment net sales increased by 12% to $2.749 billion, with segment profit rising 11% to $566 million[187] - Safety and Productivity Solutions segment net sales decreased by 13% to $1.515 billion, but segment profit increased by 3% to $260 million[191] Research and Development - Research and development expenses increased to $357 million in Q1 2023, up 2% from $350 million in Q1 2022[13] - Research and development expenses were reclassified as a separate line item starting January 1, 2023, with no impact on net income or cash flows[32] - Research and development expenses remained flat in Q1 2023 compared to Q1 2022[166] Acquisitions and Divestitures - The company acquired US Digital Designs, Inc. for $186 million in January 2022, allocating $53 million to intangible assets and $129 million to goodwill[41] - Honeywell entered into an agreement to acquire Compressor Controls Corporation for $670 million in April 2023, expected to close in the second half of 2023[40] - Honeywell received initial cash proceeds of $256 million from the HWI Sale, with the fair value of remaining proceeds classified as Level 3[94] - Honeywell received $256 million in initial proceeds from the HWI Sale on March 17, 2023[118] Contract Assets and Liabilities - Contract assets increased by $159 million to $2,453 million as of March 31, 2023, compared to $2,294 million at the beginning of the year[55] - Contract liabilities decreased by $292 million to $4,291 million as of March 31, 2023, from $4,583 million at the start of the year[55] - The company recognized $953 million in revenue in Q1 2023 that was previously included in contract liabilities[55] - Total remaining performance obligations stood at $30,260 million as of March 31, 2023, with Aerospace accounting for $12,592 million and Performance Materials and Technologies at $8,381 million[61] - 61% of performance obligations are expected to be satisfied within one year, while 39% will be satisfied beyond one year[62] Repositioning and Restructuring - Total net repositioning and other charges for Q1 2023 were $141 million, compared to $387 million in Q1 2022[67] - The company recognized repositioning charges of $103 million in Q1 2023, including $67 million in severance costs related to workforce reductions of 1,797 positions[67] - Repositioning charges in Q1 2023 included $12 million in asset impairments and $24 million in exit costs[67] Inventory and Supply Chain - Total inventories increased to $5.776 billion in Q1 2023 from $5.538 billion in Q4 2022[74] - Accounts payable related to supply chain financing programs totaled $1.004 billion as of March 31, 2023, up from $992 million at the end of 2022[34] Tax and Environmental Liabilities - The effective tax rate decreased in 2023 compared to 2022, primarily due to increased benefits from taxes on non-U.S. earnings[73] - Environmental liabilities increased to $673 million in Q1 2023 from $615 million in Q1 2022, with $82 million in new accruals and $24 million in payments[104] - Reimbursements from Resideo for environmental matters totaled $35 million in Q1 2023, with a corresponding receivable of $59 million recorded[108] - Asbestos-related liabilities decreased to $1.276 billion in Q1 2023 from $2.616 billion in Q1 2022, primarily due to the NARCO buyout of $1.325 billion[109] - Insurance recoveries for asbestos-related liabilities decreased to $260 million in Q1 2023 from $265 million in Q1 2022[110] - Honeywell agreed to a one-time payment of $1.325 billion to the Trust as part of the NARCO Buyout agreement[115] Derivatives and Hedging - The company's total derivatives at fair value were $18.340 billion in Q1 2023, compared to $18.727 billion in Q4 2022[84] - The carrying value of debt instruments designated as net investment hedges was $4,816 million as of March 31, 2023, compared to $3,836 million as of December 31, 2022[85] - Long-term debt carrying amount with fair value hedging adjustments was $4,787 million as of March 31, 2023, compared to $4,696 million as of December 31, 2022[86] - Interest rate swap agreements resulted in a $67 million loss on hedged items and a $67 million gain on derivatives designated as hedges for Q1 2023[89] Fair Value Measurements - Total assets accounted for at fair value were $698 million as of March 31, 2023, with Level 1 assets at $86 million, Level 2 at $573 million, and Level 3 at $39 million[91] - Total liabilities accounted for at fair value were $271 million as of March 31, 2023, primarily consisting of Level 2 liabilities[91] - The right to HWI Net Sale Proceeds, classified as Level 3, had a fair value of $39 million as of March 31, 2023, down from $295 million as of December 31, 2022[91][93] Legal and Regulatory Matters - The company is subject to various lawsuits and investigations, some involving substantial amounts, as discussed in Note 14 of the financial statements[214] - Unresolved Bendix-related asbestos claims increased to 5,706 as of March 31, 2023, from 5,608 as of December 31, 2022[121] Credit Ratings and Market Access - The company's credit ratings remain stable with S&P, Fitch, and Moody's maintaining long-term ratings of A, A, and A2, respectively[203] - Operating cash flows are expected to meet future operating cash needs, supported by available cash, committed credit lines, and access to public debt and equity markets[212] Other Financial Metrics - Total shares outstanding decreased to 665.7 million in Q1 2023 from 680.7 million in Q1 2022[100] - Accumulated other comprehensive income (loss) decreased to $(3.538) billion in Q1 2023 from $(3.475) billion in Q1 2022, primarily due to foreign exchange translation adjustments[103] - Selling, general and administrative expenses decreased in Q1 2023 due to prior year charges related to suspending operations in Russia[168] - Long-term receivables had a carrying value of $221 million and a fair value of $177 million as of March 31, 2023[98] - Sales decreased by $229 million in Q1 2023 compared to Q1 2022, driven by lower organic sales in Warehouse and Workflow Solutions ($127 million), Productivity Solutions and Services ($44 million), and Sensing and Safety Technologies ($29 million), along with a $29 million unfavorable foreign currency impact[192]