Honeywell International HON · USD

SEGMENT FINANCIAL DATA Honeywell globally manages its business operations through four reportable business segments. Segment information is consistent with how the Chairman and Chief Executive Officer, who is the Company's chief operating decision maker, and management reviews the businesses, makes investing and resource allocation decisions, and assesses operating performance. Honeywell’s senior management evaluates segment performance based on segment profit. Each segment’s profit is measured as segment income (loss) before taxes excluding general corporate unallocated expense, interest and other financial charges, interest income, amortization of acquisition-related intangibles, certain acquisition- and divestiture-related costs, impairment of goodwill, impairment of assets held for sale, stock compensation expense, pension and other postretirement income (expense), repositioning and other (gains) charges, and other items within Other (income) expense.In October 2025, the Company announced a planned realignment, expected to be effective in the first quarter of 2026, of its business units comprising its Industrial Automation and Energy and Sustainability Solutions reportable business segments. This realignment will form a new reportable business segment, Process Automation and Technology, and result in a new composition of its Industrial Automation reportable business segment. Process Automation and Technology will be comprised of UOP, which is currently in Energy and Sustainability Solutions, and the core portion of the Process Solutions business, which is currently in Industrial Automation. The new composition of Industrial Automation will continue to include the smart energy, thermal solutions, and process measurement and control businesses, currently included in the Process Solutions business, as well as the Sensing and Safety Technologies, Warehouse and Workflow Solutions, and Productivity Solutions and Services businesses. Following the realignment, the Company’s reportable business segments will be Aerospace Technologies, Building Automation, Process Automation and Technology, and Industrial Automation. The realignment will not impact the Company’s historical consolidated financial position, results of operations, or cash flows. The Company expects to report its financial performance based on this realignment effective with the first quarter of 2026.

REVENUE RECOGNITION AND CONTRACTS WITH CUSTOMERSThe Company has a comprehensive offering of products and services, including software and technologies, that are sold to a variety of customers in multiple end markets. See the following disaggregated revenue table and related discussions by reportable business segment for details:Years Ended December 31, 202520242023Aerospace Technologies Commercial Aviation Original Equipment$2,513 $2,223 $2,397 Commercial Aviation Aftermarket7,777 7,144 6,241 Defense and Space7,220 6,091 4,986 Net Aerospace Technologies sales17,510 15,458 13,624 Industrial AutomationSensing and Safety Technologies1,171 1,824 1,983 Productivity Solutions and Services1,132 1,202 1,313 Process Solutions6,165 6,111 6,017 Warehouse and Workflow Solutions933 914 1,443 Net Industrial Automation sales9,401 10,051 10,756 Building AutomationProducts4,480 3,868 3,583 Building Solutions2,887 2,672 2,448 Net Building Automation sales7,367 6,540 6,031 Energy and Sustainability SolutionsUOP3,134 2,644 2,586 Net Energy and Sustainability Solutions sales3,134 2,644 2,586 Corporate and All Other30 24 12 Net sales$37,442 $34,717 $33,009 Aerospace Technologies – A global supplier of products, software, and services for aircrafts that it sells to original equipment manufacturers (OEM) and other customers in a variety of end markets including commercial air transport, business aviation, airlines, aircraft operators, and defense and space primes and U.S. government. Aerospace Technologies products and services include auxiliary power units, propulsion engines, environmental control systems, integrated avionics, connectivity services, electric power systems, engine controls, flight safety, communications, navigation hardware, data and software applications, radar and surveillance systems, aircraft lighting, management and technical services, advanced systems and instruments, satellite and space components, aircraft wheels and brakes, and thermal systems. Aerospace Technologies also provides spare parts, repair, overhaul, and maintenance services (principally to aircraft operators), and sells licenses or intellectual property to other parties. Honeywell Forge solutions enable customers to turn data into predictive maintenance and predictive analytics to enable better fleet management and make flight operations more efficient.

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. The Company believes that, as a general matter, the Company's policies, practices, and procedures are properly designed to prevent unreasonable risk of environmental damage and personal injury and that the handling, manufacture, use, and disposal of hazardous substances are in accordance with environmental and safety laws and regulations. However, mainly because of past operations and operations of predecessor companies, the Company, like other companies engaged in similar businesses, incurred remedial response and voluntary cleanup costs for site contamination and is a party to lawsuits and claims associated with environmental and safety matters, including past production of products containing hazardous substances. Additional lawsuits, claims, and costs involving environmental matters are likely to continue to arise in the future.With respect to environmental matters involving site contamination, the Company continually conducts studies, individually or jointly with other potentially responsible parties, to determine the feasibility of various remedial techniques. It is the Company's policy to record liabilities for environmental matters when remedial efforts or damage claim payments are probable and the costs can be reasonably estimated. Such liabilities are based on the Company's best estimate of the undiscounted future costs required to complete the remedial work. The recorded liabilities are adjusted periodically as remediation efforts progress or as additional technical, regulatory, or legal information becomes available. Given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of other potentially responsible parties, technology, and information related to individual sites, the Company does not believe it is possible to develop an estimate of the range of reasonably possible environmental loss in excess of the Company's recorded liabilities. The Company expects to fund expenditures for these matters from operating cash flows.

DEBT AND CREDIT AGREEMENTS December 31,202520241.35% notes due 2025— 1,250 2.50% notes due 20261,500 1,500 1.10% notes due 20271,000 1,000 3.50% euro notes due 2027763 675 4.65% notes due 20271,150 1,150 4.95% notes due 2028500 500 2.25% euro notes due 2028881 779 4.25% notes due 2029750 750 2.70% notes due 2029750 750 4.875% notes due 2029500 500 4.70% notes due 20301,000 1,000 3.375% euro notes due 2030881 779 1.95% notes due 2030949 1,000 4.95% notes due 2031500 500 1.75% notes due 20311,496 1,500 4.75% notes due 2032650 650 0.75% euro notes due 2032587 519 3.75% euro notes due 2032587 519 5.00% notes due 20331,100 1,100 4.50% notes due 20341,000 1,000 4.125% euro notes due 20341,174 1,039 5.00% notes due 20351,450 1,450 3.75% euro notes due 2036881 779 5.70% notes due 2036441 441 5.70% notes due 2037462 462 5.375% notes due 2041417 417 3.812% notes due 2047442 442 2.80% notes due 2050701 750 5.25% notes due 20541,750 1,750 5.35% notes due 2064650 650 4.37% term loan due 20271,000 1,000 One month term SOFR plus 0.875% term loan due 20272,750 — 6.625% debentures due 2028201 201 9.065% debentures due 203351 51 Industrial development bond obligations, floating rate maturing at various dates through 203722 22 Other (including finance leases), 2.5% weighted average interest rate maturing at various dates through 2040110 329 Fair value of hedging instruments(79)(136)Debt issuance costs(280)(303)Total Long-term debt and current related maturities28,687 26,765 Less: Current maturities of long-term debt1,546 1,325 Total Long-term debt$27,141 $25,440 The schedule of principal payments on long-term debt, excluding fair value of hedging instruments and debt issuance costs, is as follows: December 31, 20252026$1,546 20276,731 20281,588 20292,002 20302,830 Thereafter14,349 Total Long-term debt and current related maturities$29,046 Commercial Paper and Other Short-Term BorrowingsAs of December 31, 2025, and 2024, the Company had $5.9 billion and $4.3 billion of Commercial paper and other short-term borrowings outstanding at a weighted average interest rate of 3.68% and 4.22%, respectively.Issuances of Senior NotesOn August 1, 2024, the Company issued $1.15 billion 4.65% Senior Notes due 2027, $1.0 billion 4.70% Senior Notes due 2030, $650 million 4.75% Senior Notes due 2032, and $700 million 5.00% Senior Notes due 2035 (collectively, the August 2024 USD Notes).

INCOME TAXES INCOME BEFORE TAXES Years Ended December 31,202520242023U.S.$373 $1,442 $1,652 Non-U.S.5,103 4,802 4,539 Total Income before taxes$5,476 $6,244 $6,191 TAX EXPENSETax expense consists of: Years Ended December 31,202520242023Current U.S. Federal$49 $478 $13 U.S. State27 57 22 Non-U.S.914 943 1,038 Total current tax expense990 1,478 1,073 DeferredU.S. Federal10 (209)58 U.S. State(54)(23)17 Non-U.S.62 3 114 Total deferred tax expense (benefit)18 (229)189 Total Tax expense$1,008 $1,249 $1,262 The U.S. federal statutory income tax rate is reconciled to the effective income tax rate as follows:December 31, 2025AmountPercentU.S. federal statutory income tax rate1,150 21.0 State and local income taxes, net of federal income tax effect1(45)(0.8)Foreign tax effectsPuerto RicoStatutory tax rate difference between Puerto Rico and United States124 2.3 Preferential tax rate(252)(4.6)Other54 1.0 SwitzerlandStatutory tax rate difference between Switzerland and United States(278)(5.1)Subnational tax effects144 2.6 Other(23)(0.4)Other foreign jurisdictions265 4.9 Effect of cross-border tax lawsGlobal intangible low-taxed income153 2.8 Other(82)(1.5)Tax creditsResearch and development tax credits(214)(3.9)Other(3)(0.1)Changes in valuation allowance129 2.4 Nontaxable or nondeductible itemsImpairment losses164 3.0 Indemnification termination gain(168)(3.1)Other4 0.1 Changes in unrecognized tax benefits(24)(0.4)Other adjustmentsOutside basis differences(71)(1.3)Other(19)(0.5)Effective income tax rate$1,008 18.4 %1State taxes in Arizona and Illinois made up the majority (greater than 50 percent) of the tax effect in this category.The U.S. federal statutory income tax rate is reconciled to the effective income tax rate as follows: Years Ended December 31,20242023U.S. federal statutory income tax rate21.0 %21.0 %Taxes on non-U.S. earnings1,2,3(0.7)(2.4)U.S. state income taxes10.6 0.2 Reserves for tax contingencies1.6 3.9 Employee stock compensation(0.7)(0.3)Restructuring4(0.3)— U.S. federal tax credits(2.2)(1.7)U.S. valuation allowance41.0 (0.1)All other items—net(0.3)(0.2)Effective income tax rate20.0 %20.4 %1Net of changes in valuation allowance.2Includes U.S. taxes on non-U.S. earnings, net of foreign tax credits.32023 includes (4.2)% deferred tax benefit resulting from a non-U.S. legislative change, offset by 4.2% deferred tax expense resulting from a full valuation allowance.42024 includes (1.

STOCK-BASED COMPENSATION PLANSThe 2016 Stock Incentive Plan of Honeywell International Inc. and its Affiliates (2016 Plan) and 2016 Stock Plan for Non-Employee Directors of Honeywell International Inc. (2016 Directors Plan) were both approved by the shareowners at the Annual Meeting of Shareowners effective on April 25, 2016. As of December 31, 2025, there were 25.3 million and 0.8 million shares of Honeywell common stock available for future grants under terms of the 2016 Plan and 2016 Directors Plan, respectively.In connection with the spin-off of the Advanced Materials business as described in Note 2 Acquisitions, Divestitures, and Discontinued Operations, all outstanding equity awards were equitably converted to preserve the pre-spin-off value, as required by the 2016 Plan and the 2016 Directors Plan. For vested and unexercised stock options, as well as unvested stock options and restricted stock unit (RSU) awards associated with Honeywell employees, the exercise price and number of shares were adjusted as applicable. The terms of the outstanding awards, including remaining vesting periods of unvested awards, remain the same after conversion. For all unvested stock options and RSU awards associated with Solstice employees, the awards were equitably converted into Solstice awards and are no longer outstanding under the Company’s plans. The adjustments did not result in additional compensation expense.The information disclosed in this note includes the results of both continuing and discontinued operations in the aggregate.STOCK OPTIONSThe exercise price, term, and other conditions applicable to each option granted under the Company's stock plans are generally determined by the Management Development and Compensation Committee of the Board. 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 generally vest over a four-year period and expire after 10 years.The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from traded options on our common stock and historical volatility of the Company's common stock.

The following table summarizes information about stock option activity for the three years ended December 31, 2025:Number ofOptions (in millions)Weighted AverageExercise PriceOutstanding at December 31, 202214.1 $147.14 Granted1.6 195.27 Exercised(1.7)123.12 Lapsed or canceled(0.6)192.22 Outstanding at December 31, 202313.4 153.86 Granted1.6 198.20 Exercised(4.2)125.30 Lapsed or canceled(0.4)195.71 Outstanding at December 31, 202410.4 170.29 Awards transferred to Solstice at spin-off(0.2)147.23 Adjustment to awards related to spin-off of Solstice0.6 N/AGranted1.6 212.23 Exercised(1.8)130.42 Lapsed or canceled(0.4)178.87 Outstanding at December 31, 202510.2 $172.62 Vested and expected to vest at December 31, 202519.4 $172.06 Exercisable at December 31, 20256.9 $163.04 1Represents the sum of vested options of 6.9 million and expected to vest options of 2.5 million. Expected to vest options are derived by applying the pre-vesting forfeiture rate assumption to total outstanding unvested options of 3.3 million.

LEASESA significant portion of the Company's operating and finance lease portfolio includes corporate offices, research and development facilities, manufacturing sites, IT equipment, and automobiles. The majority of the Company's leases have remaining lease terms of one year to 20 years, some of which include options to extend the leases for five years or more. Operating lease ROU assets are included in Other assets. The current portion of operating lease liabilities are included in Accrued liabilities, and the non-current portion of operating lease liabilities are included in Other liabilities in the Consolidated Balance Sheet. Finance lease ROU assets are included in Property, plant and equipment—net. The current portion of finance lease liabilities are included in Current maturities of long-term debt, and the non-current portion of finance lease liabilities are included in Long-term debt in the Consolidated Balance Sheet.A portion of the Company's real estate leases are generally subject to annual changes in the Consumer Price Index (CPI). The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In addition, a subset of the Company's automobile leases are considered variable. The variable lease payments for such automobile leases are based on actual mileage incurred at the stated contractual rate and recognized in the period in which the obligation for those payments are incurred.