--- ticker: HON company: Honeywell International Inc. filing_type: 10-K year_current: 2024 year_prior: 2023 risks_added: 29 risks_removed: 10 risks_modified: 87 risks_unchanged: 60 source: SEC EDGAR url: https://riskdiff.com/hon/2024-vs-2023/ markdown_url: https://riskdiff.com/hon/2024-vs-2023/index.md generated: 2026-06-01 --- # Honeywell International Inc.: 10-K Risk Factor Changes 2024 vs 2023 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 29 | | Risks removed | 10 | | Risks modified | 87 | | Unchanged | 60 | --- ## New in Current Filing: Year ended December 31, 2023 Net cash provided by operating activities was $5,340 million, driven by $5,658 million of Net income attributable to Honeywell, adjusted for $1,176 million of depreciation and amortization, and a $518 million increase from Accounts payable, due to increased material receipts and lower disbursements, partially offset by the $1,325 million payment pursuant to the NARCO Amended Buyout Agreement and a $626 million increase in Inventories, due to increased purchases. Net cash used for investing activities was $1,293 million, driven by $1,039 million of capital expenditures and $718 million cash paid for acquisitions, partially offset by a $411 million net decrease in investments. Net cash used for financing activities was $5,763 million, driven by $3,715 million of repurchases of common stock, $2,855 million of cash dividends paid, and $1,731 million of payments of long-term debt, partially offset by $2,986 million of proceeds from issuance of long-term debt. --- ## New in Current Filing: Billal M. Hammoud, 51 2023 President and Chief Executive Officer, Building Automation since January 2024. President and Chief Executive Officer, Honeywell Building Technologies from April 2023 to December 2023. President of Smart Energy and Thermal Solutions in Performance Materials and Technologies from November 2021 to March 2023. From April 2017 to November 2021, Mr. Hammoud served as President of ESAB Americas and Global Fabrication Solutions at Colfax where he led strategy, business operations, and financial performance. --- ## New in Current Filing: CYBERSECURITY Honeywell has a cybersecurity risk management program that is designed to assess, identify, manage, and govern material risks from cybersecurity threats. Our cybersecurity risk management program is a key component of our overall risk management program. Honeywell maintains cybersecurity policies and procedures in accordance with industry standard control frameworks and applicable regulations, laws, and standards. Honeywell maintains oversight of its cybersecurity risk management program via a corporate structure that includes a Cybersecurity Disclosure Committee, a Security Governance Council, the Audit Committee, and the Board. Honeywell's Board is responsible for cybersecurity risk oversight and has delegated such oversight to the Audit Committee. The Audit Committee, a committee comprised of independent Board members, four of whom have notable experience related to the oversight of cybersecurity issues, is responsible for oversight of Honeywell's information technology and cybersecurity risks and regularly reports to the Board on information technology and cybersecurity matters. The Audit Committee oversees risk related to the protection of customer and employee data, trade secrets, and other proprietary information, the security of data on the cloud, persistent threats, and cybersecurity risks associated with the Company's own products and facilities. As part of its cybersecurity oversight responsibilities, the Audit Committee receives regular updates from our Security Governance Council, which meets quarterly or as needed and is led by our Chief Security Officer and includes members of senior executive leadership. In addition, our Chief Security Officer provides updates directly to the Audit Committee at least twice a year or as needed. These updates cover topics related to information security, privacy, cyber risks and risk management processes, including the status of significant cybersecurity incidents, the emerging threat landscape, and the status of projects to strengthen the Company's information security posture. In addition, the Security Governance Council maintains a security program designed to monitor and track key security performance indicators, which is periodically presented to senior leadership and the Audit Committee for review and oversight. As noted above, assessing, identifying, and managing cybersecurity risks are integrated into our overall enterprise risk management program. Cybersecurity-related risks are assessed and evaluated on a quarterly basis or as needed; the identified cybersecurity-related risks are assessed and evaluated to determine whether any such risks have the potential to materially impact our business operations, revenue, and expenditures and to understand the degree of such risks relative to other risks faced by Honeywell. Our Chief Security Officer has served in various roles in information technology and information security for over 30 years, including security-related roles in technology deployments, product development, product security, supply chain, and operations. He holds a Bachelor of Science in computer science from the Georgia Institute of Technology. In addition, Honeywell's Cybersecurity Disclosure Committee receives updates at least quarterly or as needed from Honeywell's global security organization regarding cybersecurity incidents. The Cybersecurity Disclosure Committee includes Honeywell's Chief Information Security Officer, Chief Security Officer, and senior representatives from finance, controllership, internal audit, investor relations, tax, and legal. Our governance, risk and compliance team, which is part of Honeywell's enterprise security team, works in partnership with the Company's internal audit team to review cybersecurity and information technology-related internal controls as part of our overall internal controls process. The Cybersecurity Disclosure Committee informs the Security Governance Council and the Audit Committee of any cybersecurity incidents (if any) that have the potential to materially adversely impact the Company or our information systems. Our Chief Information Security Officer, who reports to our Chief Security Officer, oversees the global enterprise security team responsible for leading enterprise-wide information security strategy, architecture, and processes. The enterprise information security team reporting to our Chief Information Security Officer is responsible for infrastructure defense and security controls, performing vulnerability assessments, security incident management, and defining the parameters and standards of our information security risk management program. Honeywell has a comprehensive cybersecurity and information security risk management program that includes risk assessment and mitigation through a threat intelligence-driven approach, application controls, and security monitoring. The risk management program leverages International Organization for Standardizations (ISO) 22301 standards for business continuity and the National Institute of Standards and Technology (NIST) Cyber Security Framework (NIST 800-171) for measuring overall readiness to respond to cyber threats. Our Chief Information Security Officer has more than 20 years of experience in information technology and information security, particularly in the engineering and technology industries. Our information security organization has more than 300 members, with expertise in: (i) application security, (ii) governance and compliance, (iii) program and vulnerability management, (iv) security engineering, (v) identity and access management, (vi) security operations security assurance, (vii) threat intelligence and security architecture, and (viii) incident response. From time to time, in addition to performing periodic, internal security reviews/audits, Honeywell engages a third-party to assess the adequacy of our risk management program, with the last such engagement occurring during the first quarter of 2022. 49 Honeywell International Inc. 49 Honeywell International Inc. 49 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS Honeywell relies on third-party service providers for certain critical or key infrastructure, solutions, and services across our operations. Honeywell has a third-party risk management program that assesses risks from vendors and suppliers that provide, amongst other things, key information and supply chain services to Honeywell. In addition, the Company maintains business continuity and disaster recovery plans as well as a cybersecurity insurance policy. Honeywell has established cybersecurity and information security awareness training programs for employees. Formal training on topics relating to the Company's cybersecurity, data privacy and information security policies and procedures is mandatory for all employees with access to the Company's network. Training is administered and tracked through online learning modules. Additionally, Honeywell periodically engages in cyber crisis response table-top simulations to assess Honeywell's ability to adapt to security-related threats. Improper or illegitimate use of the Company's information system resources or violation of the Company's information security policies and procedures may result in disciplinary action. To date, no risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect our business, our business strategy, our results of operations or financial condition. For further information, see "Our business, reputation, and financial performance may be materially impacted by cybersecurity attacks on our information technology infrastructure and products" in Item 1A, Risk Factors of this Annual Report. In the event an attack or other intrusion were to be successful, we have a response team of internal and external resources engaged and prepared to respond. PROPERTIES We have approximately 715 locations, of which 194 are manufacturing sites. Our properties and equipment are in good operating condition and are adequate for our present needs. We do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities. --- ## New in Current Filing: RECLASSIFICATIONS Certain prior year amounts are reclassified to conform to the current year presentation. Historically, the Company included Company-sponsored costs and costs that relate to contracts with customers for research and development projects as a component of Cost of products and services sold on the Consolidated Statement of Operations. Effective January 1, 2023, the Company began classifying Company-sponsored costs for research and development projects as a separate financial statement line item, titled Research and development expenses, on the Consolidated Statement of Operations and recast prior period results for this reclassification. This reclassification had no impact on the Company's net income, earnings per share, cash flows, segment reporting, or financial position. The Company revised historical periods to reflect this change in presentation. --- ## New in Current Filing: RECENT ACCOUNTING PRONOUNCEMENTS The Company considers the applicability and impact of all Accounting Standards Updates (ASUs) 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 minimal impact on the Company's Consolidated Statement of Operations, Balance Sheet, and Cash Flows (Consolidated Financial Statements). In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures, which requires greater disaggregation of income tax disclosures. The new standard requires additional information to be disclosed with respect to the income tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU should be applied prospectively for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating the impacts of this guidance on the Company's Consolidated Financial Statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires companies to enhance the disclosures about segment expenses. The new standard requires the disclosure of the Company's Chief Operating Decision Maker (CODM), expanded incremental line-item disclosures of significant segment expenses used by the CODM for decision-making, and the inclusion of previous annual only segment disclosure requirements on a quarterly basis. This ASU should be applied retrospectively for fiscal years beginning after December 15, 2023, and early adoption is permitted. The Company is currently evaluating the impacts of this guidance on the Company's Consolidated Financial Statements. In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Topic 405): Disclosure of Supplier Finance Program Obligations, to enhance the transparency of supplier finance programs. The new standard requires annual disclosure of the key terms of the program, a description of where in the financial statements amounts outstanding under the program are presented, a rollforward of such amounts, and interim disclosure of amounts outstanding as of the end of each period. The guidance does not affect recognition, measurement, or financial statement presentation of supplier finance programs. The ASU is effective on January 1, 2023, except for the rollforward, which is effective on January 1, 2024. The Company adopted this guidance on January 1, 2023, with the exception of the rollforward that is effective on January 1, 2024. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. 59 Honeywell International Inc. 59 Honeywell International Inc. 59 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## New in Current Filing: GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSETS Goodwill and indefinite-lived intangible assets are subject to impairment testing annually as of the first day of the fourth quarter, or if a triggering event occurs or changes in circumstances indicate that the carrying amount may not be fully recoverable. This testing compares carrying values to fair values and, when appropriate, the carrying value of these assets is reduced to fair value, not to exceed the carrying value of goodwill. The Company completed its annual goodwill impairment test as of the first day of the fourth quarter and determined there was no impairment as of that date. The Company is not aware of any additional triggering events. 60 Honeywell International Inc. 60 Honeywell International Inc. 60 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## New in Current Filing: SUPPLY CHAIN FINANCING The Company maintains agreements with third-party financial institutions that offer voluntary supply chain financing (SCF) programs to suppliers. The SCF programs enable suppliers, at their sole discretion, to sell their receivables to third-party financial institutions in order to receive payment on receivables earlier than the negotiated commercial terms between suppliers and the Company. Supplier sale of receivables to third-party financial institutions is on terms negotiated between the supplier and the respective third-party financial institution. The Company agrees on commercial terms for the goods and services procured from suppliers, including prices, quantities, and payment terms, which normally range between 60 and 120 days, regardless of whether the supplier elects to participate in the SCF programs. A suppliers' voluntary participation in the SCF programs has no bearing on the Company's payment terms and the Company has no economic interest in a supplier's decision to participate in the SCF programs. The Company agrees to pay participating third-party financial institutions the stated amounts of confirmed invoices from suppliers on the original maturity dates of the invoices. Amounts outstanding related to SCF programs are included in Accounts payable in the Consolidated Balance Sheet. Accounts payable included approximately $1,112 million and $992 million as of December 31, 2023, and 2022, respectively. The impact of these programs is not material to the Company's overall liquidity. 62 Honeywell International Inc. 62 Honeywell International Inc. 62 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## New in Current Filing: ACQUISITIONS On December 8, 2023, the Company agreed to acquire Carrier Global Corporation's Global Access Solutions business in an all-cash transaction for $5.0 billion. The transaction is subject to regulatory review and approval and customary closing conditions. The transaction is expected to close by the end of the third quarter of 2024 and the business will be reported within the Honeywell Building Technologies reportable business segment. On August 25, 2023, the Company acquired 100% of the outstanding equity interests of SCADAfence, a provider of operational technology and Internet of Things cybersecurity solutions for monitoring large scale networks, for total consideration of $52 million, net of cash acquired. The business is included in the Performance Materials and Technologies reportable business segment. The assets and liabilities acquired with SCADAfence are included in the Consolidated Balance Sheet as of December 31, 2023, including $17 million of intangible assets and $42 million of goodwill, which is not deductible for tax purposes. The purchase accounting is subject to final adjustment, primarily for the value of intangible assets, amounts allocated to goodwill, and tax balances. On June 30, 2023, the Company acquired 100% of the outstanding equity interests of Compressor Controls Corporation, a turbomachinery services and controls company based in the United States, for total cash consideration of $673 million, net of cash acquired. The business is included in the Performance Materials and Technologies reportable business segment. The assets and liabilities acquired with Compressor Controls Corporation are included in the Consolidated Balance Sheet as of December 31, 2023, including $282 million of intangible assets and $350 million allocated to goodwill, which is deductible for tax purposes. The identifiable intangible assets primarily include customer relationships amortized over an estimated life of 15 years using an excess earnings amortization method. The purchase accounting is subject to final adjustment, primarily for the valuation of intangible assets, amounts allocated to goodwill, and tax balances. On January 18, 2022, the Company acquired 100% of the issued and outstanding shares of US Digital Designs, Inc., a leading provider of technologies for first responders, for total consideration of $186 million. The business is included within the Honeywell Building Technologies reportable business segment. The Company finalized the evaluation for the fair value of all the assets and liabilities acquired with US Digital Designs, Inc. during the first quarter of 2023. Management recorded intangible assets of $53 million and allocated $129 million to goodwill, which is deductible for tax purposes. 64 Honeywell International Inc. 64 Honeywell International Inc. 64 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: Total Tax expense 72 Honeywell International Inc. 72 Honeywell International Inc. 72 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: Operating Leases 81 Honeywell International Inc. 81 Honeywell International Inc. 81 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: (Income) Expense Year Ended December 31, 2022Net SalesCost ofProducts SoldCost ofServices SoldSelling, General andAdministrative ExpensesOther(Income) ExpenseInterest and OtherFinancial Charges$35,466 $16,955 $5,392 $5,214 $(366)$414 Gain or (loss) on cash flow hedgesForeign currency exchange contractsAmount reclassified from accumulated other comprehensive income (loss) into income13 50 14 (3) - - Commodity ContractsAmount reclassified from accumulated other comprehensive income (loss) into income - (2) - - - - Gain or (loss) on fair value hedgesInterest rate swap agreementsHedged items - - - - - 347 Derivatives designated as hedges - - - - - (347)Gain or (loss) on net investment hedgesForeign currency exchange contractsAmount excluded from effectiveness testing recognized in earnings using an amortization approach - - - - - 13 Gain or (loss) on derivatives not designated as hedging instrumentsForeign currency exchange contracts - - - - 351 - Cost of --- ## New in Current Filing: (Income) Expense Year Ended December 31, 2022Net SalesCost ofProducts SoldCost ofServices SoldSelling, General andAdministrative ExpensesOther(Income) ExpenseInterest and OtherFinancial Charges$35,466 $16,955 $5,392 $5,214 $(366)$414 Gain or (loss) on cash flow hedgesForeign currency exchange contractsAmount reclassified from accumulated other comprehensive income (loss) into income13 50 14 (3) - - Commodity ContractsAmount reclassified from accumulated other comprehensive income (loss) into income - (2) - - - - Gain or (loss) on fair value hedgesInterest rate swap agreementsHedged items - - - - - 347 Derivatives designated as hedges - - - - - (347)Gain or (loss) on net investment hedgesForeign currency exchange contractsAmount excluded from effectiveness testing recognized in earnings using an amortization approach - - - - - 13 Gain or (loss) on derivatives not designated as hedging instrumentsForeign currency exchange contracts - - - - 351 - Cost of --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Year Ended December 31, 2023Affected Line in the Consolidated Statement of OperationsNet SalesCost ofProducts SoldCost ofServices SoldSelling, General andAdministrative ExpensesOther(Income) ExpenseInterest and OtherFinancial ChargesTotalAmortization of pension and other postretirement benefit items Actuarial losses recognized$ - $ - $ - $ - $141 $ - $141 Prior service (credit) recognized - - - - (63) - (63)Losses (gains) on cash flow hedges(15)(28)(10)(10) - - (63)Losses (gains) on excluded component of net investment hedges - - - - - - - Total before tax$(15)$(28)$(10)$(10)$78 $ - $15 Tax (expense) benefit6 Total reclassifications for the period, net of tax$21 Cost of --- ## New in Current Filing: Tax (expense) benefit 93 Honeywell International Inc. 93 Honeywell International Inc. 93 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: Tax (expense) benefit 93 Honeywell International Inc. 93 Honeywell International Inc. 93 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: GARRETT LITIGATION AND BANKRUPTCY PROCEEDINGS In conjunction with the Garrett spin-off, the Company entered into a binding indemnification and reimbursement agreement (Garrett Indemnity) and a binding tax matters agreement (Tax Matters Agreement) with Garrett and a Garrett subsidiary. On December 2, 2019, Garrett and Garrett ASASCO Inc. filed a Summons with Notice and commenced a lawsuit in the Commercial Division of the Supreme Court of the State of New York, County of New York (the State Court), seeking to invalidate the Garrett Indemnity. Garrett sought damages and a declaratory judgment based on various claims set forth in the Summons with Notice. On July 17, 2020, the Company received a notice from Garrett asserting that the Company had caused material breaches of the Tax Matters Agreement and that the Tax Matters Agreement was unenforceable. On September 20, 2020, Garrett and 36 of its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court). On September 24, 2020, Garrett moved the existing State Court litigation against Honeywell to the Bankruptcy Court. For the year ended December 31, 2020, the Company reviewed the aggregate carrying value of the receivable amounts due in connection with the Garrett Indemnity and Tax Matters Agreement and reduced the aggregate carrying value of the receivable by $509 million to reflect the present value of the amounts owed to the Company over the full term of these agreements. On April 26, 2021, the Bankruptcy Court confirmed Garrett's amended Chapter 11 plan of reorganization (the Confirmed Plan), and on April 30, 2021 (the Effective Date), Garrett emerged from bankruptcy. On the Effective Date, and in accordance with the Confirmed Plan, (i) the Company received from Garrett an initial payment of $375 million and 834.8 million shares of Garrett's Series B Preferred Stock in full and final satisfaction of the Garrett Indemnity and Tax Matters Agreement, (ii) the Garrett Indemnity and Tax Matters Agreement were terminated, (iii) the Company and Garrett mutually released each other from the claims asserted in all pending legal actions related to the Garrett Indemnity and Tax Matters Agreement, and (iv) all pending litigation between the Company and Garrett in connection with those agreements was resolved. 99 Honeywell International Inc. 99 Honeywell International Inc. 99 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## New in Current Filing: WARRANTIES AND GUARANTEES In the normal course of business, the Company issues product warranties and product performance guarantees. The Company accrues for the estimated cost of product warranties and performance guarantees based on contract terms and historical experience at the time of sale. Adjustments to initial obligations for warranties and guarantees are made as changes to the obligations become reasonably estimable. The following table summarizes information concerning the Company's recorded obligations for product warranties and product performance guarantees: Years Ended December 31,202320222021Beginning of year$213 $223 $243 Accruals for warranties/guarantees issued during the year139 117 146 Adjustment of pre-existing warranties/guarantees(27)(12)(7)Settlement of warranty/guarantee claims(106)(115)(159)End of year$219 $213 $223 Product warranties and product performance guarantees are included in the following balance sheet accounts: --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: (Dollars in tables in millions, except per share amounts) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## New in Current Filing: OTHER INFORMATION EQUITY TRADING PLAN ELECTIONS Certain executive officers and directors of the Company may execute purchases and sales of the Company's common stock through Rule 10b5-1 and non-Rule 10b5-1 equity trading plans. During the three months ended December 31, 2023, none of our executive officers or directors adopted, terminated, or modified a Rule 10b5-1 equity trading plan, or adopted, terminated, or modified any "non-Rule 10b5-1 trading arrangement" (as defined in Item 408(c) of Regulation S-K). --- ## No Match in Current: George Koutsaftes, 53 *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* 2022 President and Chief Executive Officer, Safety and Productivity Solutions since April 2022. Chief Operating Officer, Safety and Productivity Solutions from January 2022 to March 2022. President of the Advanced Materials business in Honeywell's Performance Materials and Technologies reportable business segment from November 2017 to January 2022 and interim global leader of Business Development and Mergers and Acquisitions from May 2019 to December 2019. --- ## No Match in Current: Doug Wright, 52 *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* 2021 President and Chief Executive Officer, Honeywell Building Technologies since July 2021. President of the global Fire & Security business from July 2020 to June 2021. From 2013 to 2020, Mr. Wright served as President and Chief Executive Officer of Source Photonics, a global provider of optical communication products used in telecommunication systems and data communication networks. (a)Also a Director. 47 Honeywell International Inc. 47 Honeywell International Inc. 47 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## No Match in Current: UNRESOLVED STAFF COMMENTS *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* None. PROPERTIES We have approximately 717 locations, of which 204 are manufacturing sites. Our properties and equipment are in good operating condition and are adequate for our present needs. We do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities. --- ## No Match in Current: RECLASSIFICATIONS *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Certain prior year amounts have been reclassified to conform to the current year presentation. --- ## No Match in Current: (Dollars in tables in millions, except per share amounts) *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. --- ## No Match in Current: (Dollars in tables in millions, except per share amounts) *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. --- ## No Match in Current: Years Ended December 31, *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* 88 Honeywell International Inc. 88 Honeywell International Inc. 88 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## No Match in Current: (Dollars in tables in millions, except per share amounts) *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. --- ## No Match in Current: (Dollars in tables in millions, except per share amounts) *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. --- ## No Match in Current: OTHER INFORMATION *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Not applicable. 113 Honeywell International Inc. 113 Honeywell International Inc. 113 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## Modified: DIVESTITURES **Key changes:** - Reworded sentence: "During 2023, there were no significant divestitures individually or in the aggregate." - Reworded sentence: "65 Honeywell International Inc." **Prior (2023):** In conjunction with the wind down of our businesses and operations in Russia (the Wind down), during 2022 the Company completed the sale of three entities domiciled in Russia in exchange for gross cash consideration of less than $1 million. The Company recognized a pre-tax gain of $22 million, which was recorded in Other (income) expense in the Consolidated Statement of Operations, driven by favorable foreign currency cumulative translation adjustment positions in the entities at the time of sale. The financial results of the entities were previously included in the Performance Materials and Technologies, Honeywell Building Technologies, and Safety and Productivity Solutions reportable business segments. On March 15, 2021, the Company completed the sale of its retail footwear business in exchange for gross cash consideration of $230 million. The Company recognized a pre-tax gain of $95 million for the twelve months ended December 31, 2021, which was recorded in Other (income) expense. The retail footwear business was previously included in the Safety and Productivity Solutions reportable business segment. During 2020, there were no significant divestitures that closed individually or in the aggregate. 62 Honeywell International Inc. 62 Honeywell International Inc. 62 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** During 2023, there were no significant divestitures individually or in the aggregate. In conjunction with the wind down of the Company's businesses and operations in Russia (the Wind down), during 2022 the Company completed the sale of three entities domiciled in Russia in exchange for gross cash consideration of less than $1 million. The Company recognized a pre-tax gain of $22 million, which was recorded in Other (income) expense in the Consolidated Statement of Operations, driven by favorable foreign currency cumulative translation adjustment positions in the entities at the time of sale. The financial results of the entities were previously included in the Performance Materials and Technologies, Honeywell Building Technologies, and Safety and Productivity Solutions reportable business segments. On March 15, 2021, the Company completed the sale of its retail footwear business in exchange for gross cash consideration of $230 million. The Company recognized a pre-tax gain of $95 million for the twelve months ended December 31, 2021, which was recorded in Other (income) expense. The retail footwear business was previously included in the Safety and Productivity Solutions reportable business segment. 65 Honeywell International Inc. 65 Honeywell International Inc. 65 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "The schedule of principal payments on long-term debt is as follows: December 31, 20232024$1,796 20251,314 20261,528 20271,718 20281,527 Thereafter10,475 Total Long-term debt and current related maturities18,358 Less: Current maturities of long-term debt1,796 Total Long-term debt$16,562 On December 1, 2023, the Company repaid its 3.35% notes due 2023." - Reworded sentence: "79 Honeywell International Inc." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: Failure to increase productivity through sustainable operational improvements, as well as an inability to successfully execute repositioning projects or to effectively manage our workforce, may reduce our profitability or adversely impact our businesses. **Key changes:** - Added sentence: "Additionally, certain personnel may be required to receive various clearances and substantial training in order to work on certain programs or perform certain tasks." - Added sentence: "Necessary security clearances may be delayed, which may impact our ability to perform on our U.S." - Added sentence: "government contracts." - Added sentence: "We also may not be successful in training or developing qualified personnel with the requisite relevant skills or security clearances." - Added sentence: "32 Honeywell International Inc." **Prior (2023):** Our profitability and margin growth are dependent upon our ability to drive sustainable improvements. We seek productivity and cost savings benefits through repositioning actions and projects, such as consolidation of manufacturing facilities, transitions to cost-competitive regions, and product line rationalizations. Risks associated with these actions include delays in execution, additional unexpected costs, realization of fewer than estimated productivity improvements, and adverse effects on employee morale. We may not realize the full operational or financial benefits we expect, the recognition of these benefits may be delayed, and these actions may potentially disrupt our operations. In addition, organizational changes, increased attrition, failure to create and implement a succession plan for key Company positions, not retaining key talent, inability to attract new employees with unique skills, trends in rising labor costs and labor availability, labor relations difficulties, or workforce stoppage could have a material adverse effect on our business, reputation, financial position, and results of operations. **Current (2024):** Our profitability and margin growth are dependent upon our ability to drive sustainable improvements. We seek productivity and cost savings benefits through repositioning actions and projects, such as consolidation of manufacturing facilities, transitions to cost-competitive regions, and product line rationalizations. Risks associated with these actions include delays in execution, additional unexpected costs, realization of fewer than estimated productivity improvements, and adverse effects on employee morale. We may not realize the full operational or financial benefits we expect, the recognition of these benefits may be delayed, and these actions may potentially disrupt our operations. In addition, organizational changes, increased attrition, failure to create and implement a succession plan for key Company positions, not retaining key talent, inability to attract new employees with unique skills, trends in rising labor costs and labor availability, labor relations difficulties, or workforce stoppage could have a material adverse effect on our business, reputation, financial position, and results of operations. Additionally, certain personnel may be required to receive various clearances and substantial training in order to work on certain programs or perform certain tasks. Necessary security clearances may be delayed, which may impact our ability to perform on our U.S. government contracts. We also may not be successful in training or developing qualified personnel with the requisite relevant skills or security clearances. 32 Honeywell International Inc. 32 Honeywell International Inc. 32 Honeywell International Inc. TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTS --- ## Modified: INCOME TAXES **Key changes:** - Reworded sentence: "The Company establishes reserves for income taxes when, despite the belief that tax positions are fully supportable, certain positions remain that do not meet the minimum recognition threshold." - Reworded sentence: "The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, the current tax liability, and deferred taxes in the period in which the facts that give rise to a change in estimate become known." **Prior (2023):** Significant judgment is required in evaluating tax positions. The Company establishes reserves for income taxes when, despite the belief that tax positions are fully supportable, there remain certain positions that do not meet the minimum recognition threshold. The approach for evaluating certain and uncertain tax positions is defined by the authoritative guidance which determines when a tax position is more likely than not to be sustained upon examination by the applicable taxing authority. In the normal course of business, the Company and its subsidiaries are examined by various federal, state, and foreign tax authorities. The Company regularly assesses the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of the Company's provision for income taxes. The Company continually assesses the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability, and deferred taxes in the period in which the facts that give rise to a change in estimate become known. For additional information, see Note 5 Income Taxes. **Current (2024):** Significant judgment is required in evaluating tax positions. The Company establishes reserves for income taxes when, despite the belief that tax positions are fully supportable, certain positions remain that do not meet the minimum recognition threshold. The approach for evaluating certain and uncertain tax positions is defined by the authoritative guidance which determines when a tax position is more likely than not to be sustained upon examination by the applicable taxing authority. In the normal course of business, the Company and its subsidiaries are examined by various federal, state, and foreign tax authorities. The Company regularly assesses the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of the Company's provision for income taxes. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, the current tax liability, and deferred taxes in the period in which the facts that give rise to a change in estimate become known. See Note 5 Income Taxes for additional information. 63 Honeywell International Inc. 63 Honeywell International Inc. 63 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: RESTRICTED STOCK UNITS **Key changes:** - Reworded sentence: "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." **Prior (2023):** Restricted stock unit (RSU) awards entitle the holder to receive one 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 to six years and are payable in Honeywell 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 remains employed through the vesting period. three 87 Honeywell International Inc. 87 Honeywell International Inc. 87 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Restricted stock unit (RSU) awards entitle the holder to receive one 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 to six years and are payable in Honeywell 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. three 90 Honeywell International Inc. 90 Honeywell International Inc. 90 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: RESEARCH AND DEVELOPMENT **Key changes:** - Reworded sentence: "Amounts expensed as incurred for Company-sponsored research and development projects are included in Research and development expenses and were $1,456 million, $1,478 million, and $1,333 million for the years ended December 31, 2023, 2022, and 2021, respectively." - Reworded sentence: "This revenue was $1,303 million, $1,336 million, and $1,284 million for the years ended December 31, 2023, 2022, and 2021, respectively." **Prior (2023):** Research and development costs for projects are expensed as incurred, unless these costs relate to contracts with customers where the Company receives reimbursements. Amounts expensed as incurred for Company-sponsored research and development projects are included in Cost of products and services sold and were $1,478 million, $1,333 million, and $1,334 million for the years ended December 31, 2022, 2021, and 2020, respectively. Costs related to contracts with customers for customer-sponsored research and development projects are included as a contract cost and included in Cost of products and services sold when revenue from such contracts is recognized, consistent with the Company's sales recognition policies. This revenue was $1,336 million, $1,284 million, and $1,200 million for the years ended December 31, 2022, 2021, and 2020, respectively. **Current (2024):** Research and development costs for projects are expensed as incurred, unless these costs relate to contracts with customers where the Company receives reimbursements. Amounts expensed as incurred for Company-sponsored research and development projects are included in Research and development expenses and were $1,456 million, $1,478 million, and $1,333 million for the years ended December 31, 2023, 2022, and 2021, respectively. Costs related to contracts with customers for customer-sponsored research and development projects are included as a contract cost and included in Cost of products and services sold when revenue from such contracts is recognized, consistent with the Company's sales recognition policies. This revenue was $1,303 million, $1,336 million, and $1,284 million for the years ended December 31, 2023, 2022, and 2021, respectively. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "A portion of the Company's real estate leases are generally subject to annual changes in the Consumer Price Index (CPI)." - Reworded sentence: "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 was incurred." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: MINE SAFETY DISCLOSURES **Key changes:** - Reworded sentence: "50 Honeywell International Inc." **Prior (2023):** One of our wholly-owned subsidiaries has a placer claim for and operates a chabazite ore surface mine in Arizona. Information concerning mine safety and other regulatory matters associated with this mine is required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K and is included in Exhibit 95 to this Form 10-K. 48 Honeywell International Inc. 48 Honeywell International Inc. 48 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS **Current (2024):** One of our wholly-owned subsidiaries has a placer claim for and operates a chabazite ore surface mine in Arizona. Information concerning mine safety and other regulatory matters associated with this mine is required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K and is included in Exhibit 95 to this Form 10-K. 50 Honeywell International Inc. 50 Honeywell International Inc. 50 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## Modified: We cannot predict with certainty the outcome of litigation matters, government proceedings and other contingencies and uncertainties. **Key changes:** - Reworded sentence: "We are currently, and may in the future become, subject to lawsuits, fines, investigations, and disputes (some of which involve substantial amounts claimed) arising out of the conduct of our business, including matters relating to commercial transactions, government contracts, product liability (including asbestos), the integration of emerging technologies (such as, but not limited to, artificial intelligence and machine learning), prior acquisitions and divestitures, employment, employee benefits plans, intellectual property, antitrust, anti-corruption, accounting, import and export, and environmental, health, and safety matters." - Reworded sentence: "See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for further discussion regarding the uncertainty associated with asbestos-related liabilities." **Prior (2023):** We are subject to a number of lawsuits, investigations, and disputes (some of which involve substantial amounts claimed) arising out of the conduct of our business, including matters relating to commercial transactions, government contracts, product liability (including asbestos), prior acquisitions and divestitures, employment, employee benefits plans, intellectual property, antitrust, anti-corruption, accounting, import and export, and environmental, health, and safety matters. Our potential liabilities are subject to change over time due to new developments, changes in settlement strategy or the impact of evidentiary requirements, and we may become subject to or be required to pay damage awards or settlements that could have a material adverse effect on our results of operations, cash flows and financial condition. While we maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover the total amount of all insured claims and liabilities. The incurrence of significant liabilities for which there is no or insufficient insurance coverage could adversely affect our results of operations, cash flows, liquidity, and financial condition. 36 Honeywell International Inc. 36 Honeywell International Inc. 36 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS **Current (2024):** We are currently, and may in the future become, subject to lawsuits, fines, investigations, and disputes (some of which involve substantial amounts claimed) arising out of the conduct of our business, including matters relating to commercial transactions, government contracts, product liability (including asbestos), the integration of emerging technologies (such as, but not limited to, artificial intelligence and machine learning), prior acquisitions and divestitures, employment, employee benefits plans, intellectual property, antitrust, anti-corruption, accounting, import and export, and environmental, health, and safety matters. Our potential liabilities are subject to change over time due to new developments, changes in settlement strategy or the impact of evidentiary requirements, and we may become subject to or be required to pay damage awards or settlements that could have a material adverse effect on our results of operations, reputation, cash flows, and financial condition. While we maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover the total amount of all insured claims and liabilities. The incurrence of significant liabilities for which there is no or insufficient insurance coverage could adversely affect our results of operations, cash flows, liquidity, and financial condition. See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for further discussion regarding the uncertainty associated with asbestos-related liabilities. 37 Honeywell International Inc. 37 Honeywell International Inc. 37 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "PlansDirect Private InvestmentsReal Estate PropertiesPrivate FundsReal Estate FundsInsurance Buy-in ContractsBalance at December 31, 2021$1,336 $843 $33 $163 $691 Actual return on plan assetsRelating to assets still held at year-end(66)88 11 (33)(477)Relating to assets sold during the year98 (24) - 1 - Purchases75 148 - - 736 Sales and settlements(159)(50)(8)(1) - Balance at December 31, 20221,284 1,005 36 130 950 Actual return on plan assetsRelating to assets still held at year-end(34)(115)3 - 68 Relating to assets sold during the year159 - 1 (3) - Purchases131 88 39 - 587 Sales and settlements(247)(1)(5)(111) - Balance at December 31, 2023$1,293 $977 $74 $16 $1,605 The Company enters into futures contracts to gain exposure to certain markets." - Reworded sentence: "At December 31, 2023, and 2022, the Company's U.S." - Reworded sentence: "In 2023, 2022, and 2021, the Company was not required to make contributions to the U.S." - Reworded sentence: "pension plans in 2024." - Reworded sentence: "In 2024, the Company expects to make contributions of cash and/or marketable securities of approximately $12 million to the non-U.S." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: SALES RECOGNITION **Key changes:** - Reworded sentence: "Significant factors that influence these estimates include inflationary trends, technical and schedule risks, internal and subcontractor performance trends, business volume assumptions, asset utilization, and anticipated labor agreements." - Reworded sentence: "Deferred contract fulfillment costs were approximately $1.2 billion and $1.3 billion as of December 31, 2023, and 2022, respectively." - Reworded sentence: "The terms of a contract or the historical business practice can give rise to variable consideration due to, but not limited to, cash-based incentives, rebates, performance awards, or credits." **Prior (2023):** Product and service sales are recognized when or as the Company transfers control of the promised products or services to its customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Service sales, principally representing repair, maintenance, and engineering activities, are recognized over the contractual period or as services are rendered. Sales under long-term contracts with performance obligations satisfied over time are recognized using either an input or output method. The Company recognizes revenue over time as the Company performs on these contracts because of the continuous transfer of control to the customer. With control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The Company generally uses the cost-to-cost input method of progress for contracts because it best depicts the transfer of control to the customer that occurs as the Company incurs costs. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the proportion of costs incurred to date to the total estimated costs at completion of the performance obligation. The Company reviews its cost estimates on significant contracts on a periodic basis, or when circumstances change and warrant a modification to a previous estimate. Cost estimates are largely based on negotiated or estimated purchase contract terms, historical performance trends, and other economic projections. Significant factors that influence these estimates include inflationary trends, technical and schedule risk, internal and subcontractor performance trends, business volume assumptions, asset utilization, and anticipated labor agreements. Provisions for anticipated losses on long-term contracts are recorded in full when such losses become evident, to the extent required. The customer funding for costs incurred for nonrecurring engineering and development activities of the Company's products under agreements with commercial customers is deferred and subsequently recognized as revenue as products are delivered to the customers. Additionally, expenses incurred, up to the customer agreed funded amount, are deferred as an asset and recognized as cost of sales when products are delivered to the customer. The deferred customer funding and costs result in recognition of deferred costs (asset) and deferred revenue (liability) within Other assets and Accrued liabilities, respectively, in the Consolidated Balance Sheet. Deferred contract fulfillment costs were approximately $1.3 billion as of December 31, 2022, and 2021. The amounts recognized as Cost of products and services sold were approximately $0.2 billion for the year ended December 31, 2022, and $0.1 billion for 2021 and 2020. Revenues for the Company's mechanical service programs are recognized as performance obligations that are satisfied over time, with recognition reflecting a series of distinct services using the output method. 60 Honeywell International Inc. 60 Honeywell International Inc. 60 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Product and service sales are recognized when or as the Company transfers control of the promised products or services to its customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Service sales, principally representing repair, maintenance, and engineering activities, are recognized over the contractual period or as services are rendered. Sales under long-term contracts with performance obligations satisfied over time are recognized using either an input or output method. The Company recognizes revenue over time as the Company performs on these contracts because of the continuous transfer of control to the customer. With control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The Company generally uses the cost-to-cost input method of progress for contracts because it best depicts the transfer of control to the customer that occurs as the Company incurs costs. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the proportion of costs incurred to date to the total estimated costs at completion of the performance obligation. The Company reviews its cost estimates on significant contracts on a periodic basis, or when circumstances change and warrant a modification to a previous estimate. Cost estimates are largely based on negotiated or estimated purchase contract terms, historical performance trends, and other economic projections. Significant factors that influence these estimates include inflationary trends, technical and schedule risks, internal and subcontractor performance trends, business volume assumptions, asset utilization, and anticipated labor agreements. Provisions for anticipated losses on long-term contracts are recorded in full when such losses become evident, to the extent required. The customer funding for costs incurred for nonrecurring engineering and development activities of the Company's products under agreements with commercial customers is deferred and subsequently recognized as revenue as products are delivered to the customers. Additionally, expenses incurred, up to the customer agreed funded amount, are deferred as an asset and recognized as cost of sales when products are delivered to the customer. The deferred customer funding and costs result in recognition of deferred costs (asset) and deferred revenue (liability) within Other assets and Accrued liabilities, respectively, in the Consolidated Balance Sheet. Deferred contract fulfillment costs were approximately $1.2 billion and $1.3 billion as of December 31, 2023, and 2022, respectively. The amounts recognized as Cost of products and services sold were approximately $0.1 billion for the year ended December 31, 2023, and $0.2 billion and $0.1 billion for 2022 and 2021, respectively. Revenues for the Company's mechanical service programs are recognized as performance obligations that are satisfied over time, with recognition reflecting a series of distinct services using the output method. The terms of a contract or the historical business practice can give rise to variable consideration due to, but not limited to, cash-based incentives, rebates, performance awards, or credits. The Company estimates variable consideration at the most likely amount the Company will receive from customers. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved. The Company's estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company's anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company. --- ## Modified: MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES **Key changes:** - Reworded sentence: "Our common stock is listed on The Nasdaq Stock Market LLC (Nasdaq) under the ticker symbol "HON." We increased our quarterly dividend rate by 5% to $1.08 per share of common stock effective with the fourth quarter 2023 dividend." - Reworded sentence: "During the quarter ended December 31, 2023, Honeywell purchased 7,929,193 shares of its common stock, par value $1 per share." - Reworded sentence: "The annual changes for the five-year period shown in the graph are based on the assumption that $100 was invested in Honeywell stock and each index on December 31, 2018, and that all dividends were reinvested." **Prior (2023):** Our common stock is listed on The Nasdaq Stock Market LLC (Nasdaq) under the ticker symbol "HON." We increased our quarterly dividend rate by 5% to $1.03 per share of common stock effective with the fourth quarter 2022 dividend. We intend to continue to pay quarterly dividends in 2023. The number of record holders of our common stock at December 31, 2022, was 37,527. Information regarding securities authorized for issuance under equity compensation plans is included in the section titled Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters under the caption "Equity Compensation Plans." On February 12, 2021, the Board of Directors authorized the repurchase of up to a total of $10 billion of Honeywell common stock, which included amounts remaining under, and replaced, the previously approved share repurchase program. Repurchases may be made through a variety of methods, which could include open market purchases, accelerated share repurchase transactions, negotiated block transactions, 10b5-1 plans, other transactions that may be structured through investment banking institutions or privately negotiated, or a combination of the foregoing. Honeywell presently expects to repurchase outstanding shares from time to time (i) to offset the dilutive impact of employee stock-based compensation plans, including option exercises, restricted unit vesting, and matching contributions under our savings plans, and (ii) to reduce share count via share repurchases as and when attractive opportunities arise. The amount and timing of future repurchases may vary depending on market conditions and the level of operating, financing, and other investing activities. During the quarter ended December 31, 2022, Honeywell purchased 6,783,496 shares of its common stock, par value $1 per share. As of December 31, 2022, $2.9 billion remained available for additional share repurchases. The following table summarizes our purchases of Honeywell's common stock for the three months ended December 31, 2022: Issuer Purchases of Equity SecuritiesPeriodTotalNumber ofSharesPurchasedAveragePrice Paidper ShareTotal Numberof SharesPurchased asPart of PubliclyAnnouncedPlansor ProgramsApproximate DollarValue of Shares thatMay Yet be PurchasedUnder the Plans orPrograms(Dollars in millions)October 1 - 31, 20221,977,285 $176.99 1,977,285 $3,929 November 1 - 30, 20221,587,616 $209.41 1,587,616 $3,597 December 1 - 31, 20223,218,595 $214.45 3,218,595 $2,906 49 Honeywell International Inc. 49 Honeywell International Inc. 49 Honeywell International Inc. TABLE OF CONTENTSMARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES TABLE OF CONTENTSMARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES TABLE OF CONTENTS PERFORMANCE GRAPH The following graph compares the five-year cumulative total return on our common stock to the total returns on the S&P 500 Stock Index, composite of S&P's Industrial Conglomerates and Aerospace and Defense indices, on a 55%/45% weighted basis (the Composite Index) and Nasdaq Industrial Select Sector (XLI Index). The weighting of the components of the Composite Index are based on our segments' relative contribution to total segment profit. The selection of the Industrial Conglomerates component of the Composite Index reflects the diverse and distinct range of non-aerospace businesses conducted by Honeywell. The annual changes for the five-year period shown in the graph are based on the assumption that $100 was invested in Honeywell stock and each index on December 31, 2017, and that all dividends were reinvested. **Current (2024):** Our common stock is listed on The Nasdaq Stock Market LLC (Nasdaq) under the ticker symbol "HON." We increased our quarterly dividend rate by 5% to $1.08 per share of common stock effective with the fourth quarter 2023 dividend. We intend to continue to pay quarterly dividends in 2024. The number of record holders of our common stock at December 31, 2023, was 35,911. Information regarding securities authorized for issuance under equity compensation plans is included in the section titled Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters under the caption "Equity Compensation Plans." On April 24, 2023, the Board of Directors authorized the repurchase of up to $10 billion of Honeywell common stock, including approximately $2.1 billion of remaining availability under the previously announced $10 billion share repurchase authorization. The repurchase authorization does not have an expiration date and may be amended or terminated by the Board of Directors at any time without prior notice. Repurchases may be made through a variety of methods, which could include open market purchases, accelerated share repurchase transactions, negotiated block transactions, 10b5-1 plans, other transactions that may be structured through investment banking institutions or privately negotiated, or a combination of the foregoing. Honeywell presently expects to repurchase outstanding shares from time to time (i) to offset the dilutive impact of employee stock-based compensation plans, including option exercises, restricted unit vesting, and matching contributions under our savings plans, and (ii) to reduce share count via share repurchases as and when attractive opportunities arise. The amount and timing of future repurchases may vary depending on market conditions and the level of operating, financing, and other investing activities. During the quarter ended December 31, 2023, Honeywell purchased 7,929,193 shares of its common stock, par value $1 per share. As of December 31, 2023, $7.1 billion remained available under the share repurchase authorization for additional share repurchases. The following table summarizes our purchases of Honeywell's common stock for the quarter ended December 31, 2023: Issuer Purchases of Equity SecuritiesPeriodTotalNumber ofSharesPurchasedAveragePrice Paidper ShareTotal Numberof SharesPurchased asPart of PubliclyAnnouncedPlansor ProgramsApproximate DollarValue of Shares thatMay Yet be PurchasedUnder the Plans orPrograms(Dollars in millions)October 1 - 31, 20231,088,242 $183.76 1,088,242 $8,432 November 1 - 30, 20232,996,513 $186.83 2,996,513 $7,872 December 1 - 31, 20233,844,438 $199.75 3,844,438 $7,104 51 Honeywell International Inc. 51 Honeywell International Inc. 51 Honeywell International Inc. TABLE OF CONTENTSMARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES TABLE OF CONTENTSMARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES TABLE OF CONTENTS PERFORMANCE GRAPH The following graph compares the five-year cumulative total return on our common stock to the total returns on the Standard & Poor's (S&P) 500 Stock Index, composite of S&P's Industrial Conglomerates and Aerospace and Defense indices, on a 55%/45% weighted basis (the Composite Index) and Nasdaq Industrial Select Sector (XLI Index). The weighting of the components of the Composite Index are based on our segments' relative contribution to total segment profit. The selection of the Industrial Conglomerates component of the Composite Index reflects the diverse and distinct range of non-aerospace businesses conducted by Honeywell. The annual changes for the five-year period shown in the graph are based on the assumption that $100 was invested in Honeywell stock and each index on December 31, 2018, and that all dividends were reinvested. --- ## Modified: REIMBURSEMENT RECEIVABLES **Key changes:** - Removed sentence: "61 Honeywell International Inc." - Removed sentence: "61 Honeywell International Inc." - Removed sentence: "61 Honeywell International Inc." - Removed sentence: "TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS" **Prior (2023):** In conjunction with the Resideo Technologies, Inc. (Resideo) spin-off, the Company entered into a reimbursement agreement under which Honeywell receives cash payments as reimbursement primarily related to net spending for environmental matters at certain sites as defined in the reimbursement agreement. Accordingly, the Company recorded receivables based on estimates of the underlying reimbursable Honeywell environmental spend, and the Company monitors the recoverability of such receivables, which are subject to the terms of applicable credit agreements and general ability to pay. 61 Honeywell International Inc. 61 Honeywell International Inc. 61 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** In conjunction with the Resideo Technologies, Inc. (Resideo) spin-off, the Company entered into a reimbursement agreement under which Honeywell receives cash payments as reimbursement primarily related to net spending for environmental matters at certain sites as defined in the reimbursement agreement. Accordingly, the Company recorded receivables based on estimates of the underlying reimbursable Honeywell environmental spend, and the Company monitors the recoverability of such receivables, which are subject to the terms of applicable credit agreements and general ability to pay. --- ## Modified: Opinions on the Financial Statements and Internal Control over Financial Reporting **Key changes:** - Reworded sentence: "and subsidiaries (the "Company" or "Honeywell") as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income, shareowners' equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements")." **Prior (2023):** We have audited the accompanying consolidated balance sheets of Honeywell International Inc. and subsidiaries (the "Company" or "Honeywell") as of December 31, 2022 and 2021, and the related consolidated statements of operations, comprehensive income, shareowners' equity, and cash flows, for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America ("generally accepted accounting principles"). Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. **Current (2024):** We have audited the accompanying consolidated balance sheets of Honeywell International Inc. and subsidiaries (the "Company" or "Honeywell") as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income, shareowners' equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As described in Management's Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Compressor Controls Corporation, which was acquired on June 30, 2023, and whose financial statements constitute less than 1% of net and total assets, revenues, and net income, respectively, of the consolidated financial statement amounts as of and for the year ended December 31, 2023. Accordingly, our audit did not include the internal control over financial reporting at Compressor Controls Corporation. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America ("generally accepted accounting principles"). Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Removed sentence: "In conjunction with the Garrett spin-off, the Company entered into a binding indemnification and reimbursement agreement (Garrett Indemnity) and a binding tax matters agreement (Tax Matters Agreement) with Garrett and a Garrett subsidiary." - Removed sentence: "On December 2, 2019, Garrett and Garrett ASASCO Inc." - Removed sentence: "filed a Summons with Notice and commenced a lawsuit in the Commercial Division of the Supreme Court of the State of New York, County of New York (the State Court), seeking to invalidate the Garrett Indemnity." - Removed sentence: "Garrett sought damages and a declaratory judgment based on various claims set forth in the Summons with Notice." - Removed sentence: "On July 17, 2020, the Company received a notice from Garrett asserting that the Company had caused material breaches of the Tax Matters Agreement and that the Tax Matters Agreement was unenforceable." **Prior (2023):** In conjunction with the Garrett spin-off, the Company entered into a binding indemnification and reimbursement agreement (Garrett Indemnity) and a binding tax matters agreement (Tax Matters Agreement) with Garrett and a Garrett subsidiary. On December 2, 2019, Garrett and Garrett ASASCO Inc. filed a Summons with Notice and commenced a lawsuit in the Commercial Division of the Supreme Court of the State of New York, County of New York (the State Court), seeking to invalidate the Garrett Indemnity. Garrett sought damages and a declaratory judgment based on various claims set forth in the Summons with Notice. On July 17, 2020, the Company received a notice from Garrett asserting that the Company had caused material breaches of the Tax Matters Agreement and that the Tax Matters Agreement was unenforceable. On September 20, 2020, Garrett and 36 of its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court). On September 24, 2020, Garrett moved the existing State Court litigation against Honeywell to the Bankruptcy Court. For the year ended December 31, 2020, the Company reviewed the aggregate carrying value of the receivable amounts due in connection with the Garrett Indemnity and Tax Matters Agreement and reduced the aggregate carrying value of the receivable by $509 million to reflect the present value of the amounts owed to the Company over the full term of these agreements. On April 26, 2021, the Bankruptcy Court confirmed Garrett's amended Chapter 11 plan of reorganization (the Confirmed Plan), and on April 30, 2021 (the Effective Date), Garrett emerged from bankruptcy. On the Effective Date, and in accordance with the Confirmed Plan, (i) the Company received from Garrett an initial payment of $375 million and 834.8 million shares of Garrett's Series B Preferred Stock in full and final satisfaction of the Garrett Indemnity and Tax Matters Agreement, (ii) the Garrett Indemnity and Tax Matters Agreement were terminated, (iii) the Company and Garrett mutually released each other from the claims asserted in all pending legal actions related to the Garrett Indemnity and Tax Matters Agreement, and (iv) all pending litigation between the Company and Garrett in connection with those agreements was resolved. The original Series B Preferred Stock Certificate of Designation provided for mandatory redemptions by Garrett of $35 million in 2022 and $100 million per year from 2023 to 2030 (inclusive) at the anniversary of the Effective Date, unless (i) Garrett's consolidated EBITDA as of the end of the most recently completed fiscal year was less than $425 million, or (ii) Garrett did not have sufficient funds available to pay the redemption, at which point the redemption amounts past due would accrue interest. The Series B Preferred Stock Certificate of Designation also included rights which allowed (a) the Company to put the Series B Preferred Stock to Garrett if certain EBITDA conditions were met, and (b) Garrett to call the Series B Preferred Stock in whole or in part if certain EBITDA conditions were met. On September 30, 2021, Garrett filed an Amended and Restated Series B Preferred Stock Certificate of Designation (Amendment) with the Secretary of State of Delaware. The Amendment required Garrett to partially redeem a portion of the Series B Preferred Stock on or before March 31, 2022, such that the present value of remaining outstanding shares of the Series B Preferred Stock would be $400 million (First Partial Redemption), subject to applicable law, including that Garrett had funds legally available for the partial redemption. The First Partial Redemption would be applied to the latest scheduled redemption dates, beginning with the shares to be redeemed in 2030. The Amendment also provided that the Company could not exercise its right to put the Series B Preferred Stock to Garrett until after December 31, 2022, subject to the EBITDA conditions described in the above section, unless the partial redemption did not occur on or before March 31, 2022. All other material terms and conditions in the Amendment were unchanged from the original Series B Preferred Stock Certificate of Designation. On December 16, 2021, Garrett filed a Second Amended and Restated Series B Preferred Stock Certificate of Designation (Second Amendment) with the Secretary of State of Delaware. The Second Amendment accelerated the First Partial Redemption from March 31, 2022, to December 30, 2021, and allowed Garrett to partially redeem an additional portion of the Series B Preferred Stock on or before March 31, 2022, such that the present value of remaining outstanding shares of the Series B Preferred Stock would be $207 million (Second Partial Redemption). The Second Partial Redemption is subject to similar terms as the First Partial Redemption, including that Garrett had funds legally available for the partial redemption. However, the Second Partial Redemption was also contingent upon Garrett completing the First Partial Redemption and either (i) increasing their revolving credit facility, or (ii) the Garrett Board of Directors determining that Garrett otherwise had sufficient liquidity to effect the Second Partial Redemption. The Second Partial Redemption would be applied to the earliest scheduled redemptions beginning with the shares to be redeemed on April 30, 2022. On December 17, 2021, Garrett announced their intention to effect the First Partial Redemption on December 28, 2021, in the amount of $211 million. On December 28, 2021, Garrett paid $211 million for the amount due as the First Partial Redemption. On February 18, 2022, Garrett early redeemed $197 million of the Series B Preferred Stock, pursuant to the terms and conditions of the Second Amended and Restated Series B Preferred Stock Certificate of Designation. Immediately following the early redemption, the fair value of the Series B Preferred Stock was $207 million. On June 28, 2022, Garrett early redeemed all remaining shares of the Series B Preferred Stock in the amount of $212 million, pursuant to the terms and conditions of the Second Amended and Restated Series B Preferred Stock Certificate of Designation. Following the redemption, the Series B Preferred Stock were no longer outstanding. 96 Honeywell International Inc. 96 Honeywell International Inc. 96 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: INFORMATION ABOUT OUR EXECUTIVE OFFICERS **Key changes:** - Reworded sentence: "Name, Age, Year FirstElected an Executive OfficerBusiness ExperienceLucian Boldea, 522022President and Chief Executive Officer, Industrial Automation since January 2024." - Reworded sentence: "Dehoff served as Senior Partner and Practice Leader in McKinsey & Company where he supported strategic business transformations and led a wide range of performance and operating excellence initiatives.Billal M." - Reworded sentence: "President of Honeywell Process Solutions from 2014 to May 2018.Gregory P." - Reworded sentence: "Madden, 592017Senior Vice President and General Counsel since October 2017." - Reworded sentence: "Vice President of Corporate Development and Global Head of M&A from January 2002 to October 2017.Karen Mattimore, 572020Senior Vice President and Chief Human Resources Officer since June 2020." **Prior (2023):** The executive officers of Honeywell, listed as follows, are elected annually by the Board of Directors. There are no family relationships among them. Name, Age, Year FirstElected an Executive OfficerBusiness ExperienceDarius Adamczyk, 572017(a)Chairman of the Board and Chief Executive Officer since April 2018. President and Chief Executive Officer from April 2017 to April 2018. Chief Operating Officer from April 2016 to March 2017. President and Chief Executive Officer, Performance Materials and Technologies from April 2014 to April 2016. President of Honeywell Process Solutions from April 2012 to April 2014.Lucian Boldea, 512022President and Chief Executive Officer, Performance Materials and Technologies since October 2022. Mr. Boldea was previously employed at Eastman Chemical Company, from 1997 to 2022, where he held a variety of leadership roles during his tenure, including Executive Vice President from January 2019 to September 2022, where he led global strategy, business operations, and financial performance.Kevin Dehoff, 602022President and Chief Executive Officer, Connected Enterprise since May 2022. President, Productivity Solutions and Services from November 2019 to April 2022. From 2012 to October 2019, Mr. Dehoff served as Senior Partner and Practice Leader in McKinsey & Company where he supported strategic business transformations and led a wide range of performance and operating excellence initiatives.Vimal Kapur, 572018President and Chief Operating Officer since July 2022. President and Chief Executive Officer, Performance Materials and Technologies from July 2021 to October 2022. President and Chief Executive Officer, Honeywell Building Technologies from June 2018 to June 2021. President of Honeywell Process Solutions from 2014 to May 2018.George Koutsaftes, 532022President and Chief Executive Officer, Safety and Productivity Solutions since April 2022. Chief Operating Officer, Safety and Productivity Solutions from January 2022 to March 2022. President of the Advanced Materials business in Honeywell's Performance Materials and Technologies reportable business segment from November 2017 to January 2022 and interim global leader of Business Development and Mergers and Acquisitions from May 2019 to December 2019. Gregory P. Lewis, 552018Senior Vice President and Chief Financial Officer since August 2018. Vice President of Enterprise Information Management from October 2016 to April 2018, prior to being named Vice President, Corporate Finance in May 2018. Chief Financial Officer of Automation and Control Solutions from April 2013 to September 2016.Anne T. Madden, 582017Senior Vice President and General Counsel since October 2017. Corporate Secretary from February 2018 to September 2019. Vice President of Corporate Development and Global Head of M&A from January 2002 to October 2017.Michael R. Madsen, 592019President and Chief Executive Officer, Aerospace since October 2019. Vice President, Integrated Supply Chain of Aerospace from May 2015 to October 2019. President, Aerospace Defense and Space from October 2010 to May 2015.Karen Mattimore, 562020Senior Vice President and Chief Human Resources Officer since June 2020. Vice President, Human Resources and Communications, Aerospace from February 2018 to June 2020. Vice President, Human Resources Services from April 2015 to February 2018. Doug Wright, 522021President and Chief Executive Officer, Honeywell Building Technologies since July 2021. President of the global Fire & Security business from July 2020 to June 2021. From 2013 to 2020, Mr. Wright served as President and Chief Executive Officer of Source Photonics, a global provider of optical communication products used in telecommunication systems and data communication networks. **Current (2024):** The executive officers of Honeywell, listed as follows, are elected annually by the Board of Directors. There are no family relationships among them. Name, Age, Year FirstElected an Executive OfficerBusiness ExperienceLucian Boldea, 522022President and Chief Executive Officer, Industrial Automation since January 2024. President and Chief Executive Officer, Performance Materials and Technologies from October 2022 to December 2023. Mr. Boldea was previously employed at Eastman Chemical Company, from 1997 to 2022, where he held a variety of leadership roles during his tenure, including Executive Vice President from January 2019 to September 2022, where he led global strategy, business operations, and financial performance.Jim Currier, 572023President and Chief Executive Officer, Aerospace Technologies since January 2024. President and Chief Executive Officer, Aerospace from August 2023 to December 2023. President, Electronic Solutions from June 2021 to August 2023. President, EMAI Aftermarket organization from October 2019 to June 2021. Vice President of Airlines, North America from October 2018 to October 2019.Kevin Dehoff, 612022President and Chief Executive Officer, Connected Enterprise since May 2022. President, Productivity Solutions and Services from November 2019 to April 2022. From 2012 to October 2019, Mr. Dehoff served as Senior Partner and Practice Leader in McKinsey & Company where he supported strategic business transformations and led a wide range of performance and operating excellence initiatives.Billal M. Hammoud, 512023President and Chief Executive Officer, Building Automation since January 2024. President and Chief Executive Officer, Honeywell Building Technologies from April 2023 to December 2023. President of Smart Energy and Thermal Solutions in Performance Materials and Technologies from November 2021 to March 2023. From April 2017 to November 2021, Mr. Hammoud served as President of ESAB Americas and Global Fabrication Solutions at Colfax where he led strategy, business operations, and financial performance. Vimal Kapur, 582018(a)Chief Executive Officer since June 2023. President and Chief Operating Officer from July 2022 to May 2023. President and Chief Executive Officer, Performance Materials and Technologies from July 2021 to October 2022. President and Chief Executive Officer, Honeywell Building Technologies from June 2018 to June 2021. President of Honeywell Process Solutions from 2014 to May 2018.Gregory P. Lewis, 562018Senior Vice President and Chief Financial Officer since August 2018. Vice President of Enterprise Information Management from October 2016 to April 2018, prior to being named Vice President, Corporate Finance in May 2018. Chief Financial Officer of Automation and Control Solutions from April 2013 to September 2016.Anne T. Madden, 592017Senior Vice President and General Counsel since October 2017. Corporate Secretary from February 2018 to September 2019. Vice President of Corporate Development and Global Head of M&A from January 2002 to October 2017.Karen Mattimore, 572020Senior Vice President and Chief Human Resources Officer since June 2020. Vice President, Human Resources and Communications, Aerospace from February 2018 to June 2020. Vice President, Human Resources Services from April 2015 to February 2018. Ken West, 492024President and Chief Executive Officer, Energy and Sustainability Solutions since January 2024. Mr. West previously held roles within Performance Materials and Technologies, including President and Chief Executive Officer, Honeywell UOP from July 2023 to December 2023, President and Chief Executive Officer, Advanced Materials from January 2022 to July 2023, Vice President and General Manager of the Fluorine Products business from April 2021 to January 2022, Vice President and General Manager of the Life Sciences, Protective, and Industrial Products business from June 2020 to April 2021, and Vice President and General Manager of the Packaging and Composites business from October 2018 to June 2020. --- ## Modified: COMMODITY PRICE RISK MANAGEMENT **Key changes:** - Reworded sentence: "The Company's operations subject the Company to risk related to the price volatility of certain commodities." - Reworded sentence: "In both 2023 and 2022, the Company entered into various contracts to mitigate commodity price volatility." - Reworded sentence: "82 Honeywell International Inc." **Prior (2023):** The Company's operations subject us to risk related to the price volatility of certain commodities. To mitigate the commodity price risk associated with the Company's operations, the Company may enter into commodity derivative instruments. In March 2022, the Company entered into various contracts to mitigate commodity price volatility. The Company elected to apply hedge accounting to these contracts. 79 Honeywell International Inc. 79 Honeywell International Inc. 79 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** The Company's operations subject the Company to risk related to the price volatility of certain commodities. To mitigate the commodity price risk associated with the Company's operations, the Company may enter into commodity derivative instruments. In both 2023 and 2022, the Company entered into various contracts to mitigate commodity price volatility. The Company elected to apply hedge accounting to these contracts. 82 Honeywell International Inc. 82 Honeywell International Inc. 82 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "Plans202320222021202320222021Actuarial assumptions used to determine benefit obligations as of December 31Discount rate4.97 %5.17 %2.87 %4.15 %4.50 %1.79 %Expected annual rate of compensation increase3.25 %3.25 %3.25 %2.68 %2.69 %2.56 %Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31Discount rate - benefit obligation5.17 %2.87 %2.50 %4.49 %1.77 %1.24 %Discount rate - service cost5.26 %2.98 %2.68 %3.81 %1.48 %1.00 %Discount rate - interest cost5.07 %2.26 %1.76 %4.56 %1.59 %1.00 %Expected rate of return on plan assets6.75 %6.40 %6.15 %5.15 %3.61 %4.03 %Expected annual rate of compensation increase3.25 %3.25 %3.25 %2.68 %2.56 %2.43 % Other Postretirement Benefits202320222021Actuarial assumptions used to determine benefit obligations as of December 31Discount rate5.00 %5.32 %2.66 %Actuarial assumptions used to determine net periodic benefit cost for years ended December 31Discount rate5.32 %2.66 %2.20 % The discount rate for the Company's U.S." - Reworded sentence: "pension plans, the single weighted average spot rates used to determine service and interest costs for 2024 are 5.06% and 4.89%, respectively." - Reworded sentence: "plan assets of 7.00% for 2024, which represents an increase from the 6.75% assumption used for 2023." - Reworded sentence: "The Company reviews the expected rate of return on an annual basis and revises it as appropriate." - Reworded sentence: "105 Honeywell International Inc." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "The following table summarizes the Company's contract assets and liabilities balances: 20232022Contract assets - January 1$2,294 $2,060 Contract assets - December 312,013 2,294 Change in contract assets - increase (decrease)(281)234 Contract liabilities - January 1(4,583)(4,290)Contract liabilities - December 31(4,326)(4,583)Change in contract liabilities - decrease (increase)257 (293)Net change$(24)$(59) For the years ended December 31, 2023, and 2022, the Company recognized revenue of $2,070 million and $1,838 million, respectively, that was previously included in the beginning balance of contract liabilities." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Added sentence: "LEASES At the inception of a contract, the Company assesses whether the contract is, or contains, a lease." - Added sentence: "The assessment is based on (i) whether the contract involves the use of a distinct identified asset, (ii) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (iii) whether the Company has the right to direct the use of the asset." - Added sentence: "All significant lease arrangements are generally recognized at lease commencement." - Added sentence: "Operating lease right-of-use (ROU) assets and lease liabilities are recognized at commencement." - Added sentence: "A ROU asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less (short-term leases); however, lease expense for these leases is recognized as incurred over the lease term." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: 2027 - 2028 **Key changes:** - Reworded sentence: "Long-term debt, including finance leases1 Purchase obligations2 Estimated environmental liability payments3 Asbestos-related liability payments4 Asbestos insurance recoveries5 The payment amounts in the table only reflect the environmental liabilities which are probable and reasonably estimable as of December 31, 2023." - Reworded sentence: "These amounts represent our insurance recoveries that are deemed probable for asbestos-related liabilities as of December 31, 2023." - Reworded sentence: "The table excludes tax liability payments, including those for unrecognized tax benefits." - Reworded sentence: "The table excludes expected proceeds from the indemnification and reimbursement agreements entered into with Resideo Technologies, Inc." - Reworded sentence: "ASBESTOS MATTERS Payments, net of insurance recoveries, related to known asbestos matters were $109 million, $166 million, and $240 million for the years ended December 31, 2023, 2022, and 2021, respectively, and are estimated to be approximately $177 million in 2024." **Prior (2023):** Long-term debt, including finance leases(1) Purchase obligations(2) Estimated environmental liability payments(3) Asbestos-related liability payments(4) Asbestos insurance recoveries(5) (1)Assumes all long-term debt is outstanding until scheduled maturity. (2)Purchase obligations are entered into with various vendors in the normal course of business and are consistent with our expected requirements. (3)The payment amounts in the table only reflect the environmental liabilities which are probable and reasonably estimable as of December 31, 2022. (4)These amounts are estimates of asbestos-related cash payments for Bendix based on our asbestos-related liabilities which are probable and reasonably estimable as of December 31, 2022. Amounts exclude payments made in January 2023 in connection with the NARCO Buyout. See Asbestos Matters in Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information. (5)These amounts represent our insurance recoveries that are deemed probable for asbestos-related liabilities as of December 31, 2022. See Asbestos Matters in Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information. (6)The table excludes tax liability payments, including those for unrecognized tax benefits. See Note 5 Income Taxes of Notes to Consolidated Financial Statements for additional information. (7)The table excludes expected proceeds from the indemnification and reimbursement agreements entered into with Resideo. See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information. ASBESTOS MATTERS Payments, net of insurance recoveries, related to known asbestos matters were $166 million, $240 million, and $229 million for the years ended December 31, 2022, 2021, and 2020, respectively, and are estimated to be approximately $133 million in 2023. We expect to make payments associated with these asbestos matters from operating cash flows. The timing of these payments depends on several factors, including the timing of litigation and settlements of liability claims. In early 2023, we made payments of approximately $1.3 billion in connection with the NARCO Buyout. For additional information regarding the NARCO Buyout, see Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements. 40 Honeywell International Inc. 40 Honeywell International Inc. 40 Honeywell International Inc. TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTS ENVIRONMENTAL MATTERS Accruals during the year for environmental matters deemed probable and reasonably estimable were $186 million, $168 million, and $173 million for the years ended December 31, 2022, 2021, and 2020, respectively. In addition, for the years ended December 31, 2022, 2021, and 2020, we incurred operating costs for ongoing businesses of approximately $71 million, $88 million, and $88 million, respectively, relating to compliance with environmental regulations. Payments related to known environmental matters were $211 million, $210 million, and $216 million for the years ended December 31, 2022, 2021, and 2020, respectively, and are estimated to be approximately $222 million in 2023. We expect to make payments associated with these environmental matters from operating cash flows. The timing of these payments depends on several factors, including the timing of litigation and settlements of remediation liability, personal injury and property damage claims, regulatory approval of cleanup projects, execution timeframe of projects, remedial techniques to be utilized, and agreement with other parties. Reimbursements from Resideo for payments related to environmental matters at certain sites, as defined in the indemnification and reimbursement agreement, were $140 million in 2022 and are expected to be $140 million in 2023. See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for further discussion of our environmental matters and the indemnification and reimbursement agreement entered into with Resideo. 41 Honeywell International Inc. 41 Honeywell International Inc. 41 Honeywell International Inc. TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTS FINANCIAL INSTRUMENTS The Company uses derivative financial instruments to reduce our risks from interest and foreign currency exchange rate fluctuations. Derivative financial instruments are not used for trading or other speculative purposes and we do not use leveraged derivative financial instruments. The following table illustrates the potential change in fair value for interest rate sensitive instruments based on a hypothetical immediate one percentage point increase in interest rates across all maturities and the potential change in fair value for foreign exchange rate sensitive instruments based on a 10% weakening of the U.S. Dollar versus local currency exchange rates across all maturities at December 31, 2022, and 2021: Face orNotionalAmountCarryingValue(1)FairValue(1)EstimatedIncrease(Decrease)in FairValue(2)December 31, 2022 Interest rate sensitive instruments Long-term debt (including current maturities)$16,853 $(16,853)$(15,856)$(980)Interest rate swap agreements4,984 (287)(287)(189)Total$21,837 $(17,140)$(16,143)$(1,169)Foreign exchange rate sensitive instrumentsForeign currency exchange contracts(3)$10,545 $85 $85 $(305)Cross currency swap agreements3,189 90 90 (311)Total$13,734 $175 $175 $(616)December 31, 2021Interest rate sensitive instrumentsLong-term debt (including current maturities)$16,057 $(16,057)$(17,022)$(1,148)Interest rate swap agreements3,150 60 60 (112)Total$19,207 $(15,997)$(16,962)$(1,260)Foreign exchange rate sensitive instrumentsForeign currency exchange contracts(3)$12,671 $92 $92 $(628)Cross currency swap agreements1,200 39 39 (116)Total$13,871 $131 $131 $(744) Carrying Value(1) Fair Value(1) Estimated Increase (Decrease) in Fair Value(2) Foreign currency exchange contracts(3) Foreign currency exchange contracts(3) (1)Asset or (liability). (2)A hypothetical immediate one percentage point decrease in interest rates across all maturities and a potential change in fair value of foreign exchange rate sensitive instruments based on a 10% strengthening of the U.S. dollar versus local currency exchange rates across all maturities will result in a change in fair value approximately equal to the inverse of the amount disclosed in the table. (3)Changes in the fair value of foreign currency exchange contracts are offset by changes in the fair value, cash flows, or net investments of underlying hedged foreign currency transactions or foreign operations. See Note 11 Derivative Instruments and Hedging Transactions of Notes to Consolidated Financial Statements for further discussion. 42 Honeywell International Inc. 42 Honeywell International Inc. 42 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS **Current (2024):** Long-term debt, including finance leases1 Purchase obligations2 Estimated environmental liability payments3 Asbestos-related liability payments4 Asbestos insurance recoveries5 The payment amounts in the table only reflect the environmental liabilities which are probable and reasonably estimable as of December 31, 2023. These amounts are estimates of asbestos-related cash payments for Bendix Friction Materials (Bendix) based on our asbestos-related liabilities which are probable and reasonably estimable as of December 31, 2023. See Asbestos Matters in Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information. These amounts represent our insurance recoveries that are deemed probable for asbestos-related liabilities as of December 31, 2023. See Asbestos Matters in Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information. The table excludes tax liability payments, including those for unrecognized tax benefits. See Note 5 Income Taxes of Notes to Consolidated Financial Statements for additional information. The table excludes expected proceeds from the indemnification and reimbursement agreements entered into with Resideo Technologies, Inc. (Resideo). See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information. ASBESTOS MATTERS Payments, net of insurance recoveries, related to known asbestos matters were $109 million, $166 million, and $240 million for the years ended December 31, 2023, 2022, and 2021, respectively, and are estimated to be approximately $177 million in 2024. We expect to make payments associated with these asbestos matters from operating cash flows. The timing of these payments depends on several factors, including the timing of litigation and settlements of liability claims. In early 2023, we made payments of approximately $1.3 billion in connection with the NARCO Buyout. For additional information regarding the NARCO Buyout, see Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements. ENVIRONMENTAL MATTERS Accruals for environmental matters deemed probable and reasonably estimable were $222 million, $186 million, and $168 million for the years ended December 31, 2023, 2022, and 2021, respectively. In addition, for the years ended December 31, 2023, 2022, and 2021, we incurred operating costs for ongoing businesses of approximately $110 million, $71 million, and $88 million, respectively, relating to compliance with environmental regulations. Payments related to known environmental matters were $196 million, $211 million, and $210 million for the years ended December 31, 2023, 2022, and 2021, respectively, and are estimated to be approximately $227 million in 2024. We expect to make payments associated with these environmental matters from operating cash flows. The timing of these payments depends on several factors, including the timing of litigation and settlements of remediation liability, personal injury and property damage claims, regulatory approval of cleanup projects, execution timeframe of projects, remedial techniques to be utilized, and agreement with other parties. Reimbursements from Resideo for payments related to environmental matters at certain sites, as defined in the indemnification and reimbursement agreement, were $140 million in 2023 and are expected to be $140 million in 2024. See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for further discussion of our environmental matters and the indemnification and reimbursement agreement entered into with Resideo. 42 Honeywell International Inc. 42 Honeywell International Inc. 42 Honeywell International Inc. TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTS FINANCIAL INSTRUMENTS The Company uses derivative financial instruments to reduce risks from interest and foreign currency exchange rate fluctuations. Derivative financial instruments are not used for trading or other speculative purposes and we do not use leveraged derivative financial instruments. The following table illustrates the potential change in fair value for interest rate sensitive instruments based on a hypothetical immediate one percentage point increase in interest rates across all maturities and the potential change in fair value for foreign exchange rate sensitive instruments based on a 10% weakening of the U.S. Dollar versus local currency exchange rates across all maturities at December 31, 2023, and 2022: Face orNotionalAmountCarryingValue1FairValue1EstimatedIncrease(Decrease)in FairValue2December 31, 2023 Interest rate sensitive instruments Long-term debt (including current maturities)$18,358 $(18,358)$(17,706)$(1,530)Interest rate swap agreements4,717 (166)(166)(160)Total$23,075 $(18,524)$(17,872)$(1,690)Foreign exchange rate sensitive instrumentsForeign currency exchange contracts3$8,910 $26 $26 $(319)Cross currency swap agreements4,264 (145)(145)(234)Total$13,174 $(119)$(119)$(553)December 31, 2022Interest rate sensitive instrumentsLong-term debt (including current maturities)$16,853 $(16,853)$(15,856)$(980)Interest rate swap agreements4,984 (287)(287)(189)Total$21,837 $(17,140)$(16,143)$(1,169)Foreign exchange rate sensitive instrumentsForeign currency exchange contracts3$10,545 $85 $85 $(305)Cross currency swap agreements3,189 90 90 (311)Total$13,734 $175 $175 $(616)1Asset or (liability).2A potential change in fair value of interest rate sensitive instruments based on a hypothetical immediate one percentage point decrease in interest rates across all maturities and a potential change in fair value of foreign exchange rate sensitive instruments based on a 10% strengthening of the U.S. dollar versus local currency exchange rates across all maturities will result in a change in fair value approximately equal to the inverse of the amount disclosed in the table.3Changes in the fair value of foreign currency exchange contracts are offset by changes in the fair value, cash flows, or net investments of underlying hedged foreign currency transactions or foreign operations. Carrying Value1 Fair Value1 Estimated Increase (Decrease) in Fair Value2 Foreign currency exchange contracts3 Foreign currency exchange contracts3 Asset or (liability). A potential change in fair value of interest rate sensitive instruments based on a hypothetical immediate one percentage point decrease in interest rates across all maturities and a potential change in fair value of foreign exchange rate sensitive instruments based on a 10% strengthening of the U.S. dollar versus local currency exchange rates across all maturities will result in a change in fair value approximately equal to the inverse of the amount disclosed in the table. Changes in the fair value of foreign currency exchange contracts are offset by changes in the fair value, cash flows, or net investments of underlying hedged foreign currency transactions or foreign operations. See Note 11 Derivative Instruments and Hedging Transactions of Notes to Consolidated Financial Statements for further discussion. 43 Honeywell International Inc. 43 Honeywell International Inc. 43 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## Modified: DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE **Key changes:** - Reworded sentence: "Information relating to the Directors of Honeywell, as well as information relating to compliance with Section 16(a) of the Securities Exchange Act of 1934, will be contained in the Proxy Statement, which will be filed with the SEC pursuant to Regulation 14A not later than 120 days after December 31, 2023, and such information is incorporated herein by reference." - Reworded sentence: "Scott Davis (Chair), Kevin Burke, Michael W." - Reworded sentence: "Washington are Audit Committee financial experts as defined by applicable SEC rules and that Mr." - Added sentence: "On December 8, 2023, the Board of Directors amended and restated the By-laws of the Company (as amended and restated, the "By-laws"), effective as of such date, to (i) update the procedures and information requirements for the nomination of directors and the proposal of business for consideration at meetings of shareowners, including with respect to Rule 14a-19 promulgated under the Exchange Act; (ii) provide the chair of the meeting of shareowners with the power and duty to determine whether, in certain specified circumstances, a nomination shall be disregarded or business proposal shall not be transacted; (iii) clarify that the chair of the meeting may prescribe rules and determinations as to the conduct of the shareowners' meeting; and (iv) clarify and conform various provisions of the By-laws to the General Corporation Law of the State of Delaware and to other provisions of the By-laws and make certain non-substantive changes and updates." **Prior (2023):** Information relating to the Directors of Honeywell, as well as information relating to compliance with Section 16(a) of the Securities Exchange Act of 1934, will be contained in the Proxy Statement, which will be filed with the SEC pursuant to Regulation 14A not later than 120 days after December 31, 2022, and such information is incorporated herein by reference. Certain information relating to the Executive Officers of Honeywell appears in this Form 10-K under the heading titled Information about Our Executive Officers. The members of the Audit Committee of our Board of Directors are: D. Scott Davis (Chair), Kevin Burke, Robin L. Washington, and Robin Watson. The Board has determined that Mr. Davis and Ms. Washington are audit committee financial experts as defined by applicable SEC rules and that Mr. Davis, Mr. Burke, Ms. Washington, and Mr. Watson satisfy the financial sophistication criteria established by the Nasdaq. All members of the Audit Committee are independent as that term is defined in applicable SEC rules and Nasdaq listing standards. Honeywell's corporate governance policies and procedures, including the Code of Business Conduct, Corporate Governance Guidelines, and Charters of the Committees of the Board of Directors are available, free of charge, on our Investor Relations website (investor.honeywell.com) under the heading Governance (see Governance Overview), or by writing to Honeywell, 855 South Mint Street, Charlotte, North Carolina 28202, c/o Vice President and Corporate Secretary. Honeywell's Code of Business Conduct applies to all Honeywell directors, officers (including the Chief Executive Officer, Chief Financial Officer, and Controller), and employees. Amendments to or waivers of the Code of Business Conduct granted to any of Honeywell's directors or executive officers will be published on our website within four business days of such amendment or waiver. **Current (2024):** Information relating to the Directors of Honeywell, as well as information relating to compliance with Section 16(a) of the Securities Exchange Act of 1934, will be contained in the Proxy Statement, which will be filed with the SEC pursuant to Regulation 14A not later than 120 days after December 31, 2023, and such information is incorporated herein by reference. Certain information relating to the Executive Officers of Honeywell appears in this Form 10-K under the heading titled Information about Our Executive Officers. The members of the Audit Committee of our Board of Directors are: D. Scott Davis (Chair), Kevin Burke, Michael W. Lamach, Robin L. Washington, and Robin Watson. The Board has determined that Mr. Davis and Ms. Washington are Audit Committee financial experts as defined by applicable SEC rules and that Mr. Davis, Mr. Burke, Mr. Lamach, Ms. Washington, and Mr. Watson satisfy the financial sophistication criteria established by the Nasdaq. All members of the Audit Committee are independent as that term is defined in applicable SEC rules and Nasdaq listing standards. Honeywell's corporate governance policies and procedures, including the Code of Business Conduct, Corporate Governance Guidelines, and Charters of the Committees of the Board of Directors are available, free of charge, on our Investor Relations website (investor.honeywell.com) under the heading Governance (see Governance Overview), or by writing to Honeywell, 855 South Mint Street, Charlotte, North Carolina 28202, c/o Vice President and Corporate Secretary. Honeywell's Code of Business Conduct applies to all Honeywell directors, officers (including the Chief Executive Officer, Chief Financial Officer, and Controller), and employees. Amendments to or waivers of the Code of Business Conduct granted to any of Honeywell's directors or executive officers will be published on our website within four business days of such amendment or waiver. On December 8, 2023, the Board of Directors amended and restated the By-laws of the Company (as amended and restated, the "By-laws"), effective as of such date, to (i) update the procedures and information requirements for the nomination of directors and the proposal of business for consideration at meetings of shareowners, including with respect to Rule 14a-19 promulgated under the Exchange Act; (ii) provide the chair of the meeting of shareowners with the power and duty to determine whether, in certain specified circumstances, a nomination shall be disregarded or business proposal shall not be transacted; (iii) clarify that the chair of the meeting may prescribe rules and determinations as to the conduct of the shareowners' meeting; and (iv) clarify and conform various provisions of the By-laws to the General Corporation Law of the State of Delaware and to other provisions of the By-laws and make certain non-substantive changes and updates. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "See the following disaggregated revenue table and related discussions by reportable business segment for details: Years Ended December 31, 202320222021Aerospace Commercial Aviation Original Equipment$2,397 $2,089 $1,720 Commercial Aviation Aftermarket6,241 5,108 4,155 Defense and Space4,986 4,630 5,151 Net Aerospace sales13,624 11,827 11,026 Honeywell Building TechnologiesProducts3,583 3,638 3,173 Building Solutions2,448 2,362 2,366 Net Honeywell Building Technologies sales6,031 6,000 5,539 Performance Materials and TechnologiesUOP2,586 2,404 2,348 Process Solutions5,267 4,731 4,611 Advanced Materials3,653 3,592 3,054 Net Performance Materials and Technologies sales11,506 10,727 10,013 Safety and Productivity SolutionsSensing and Safety Technologies2,733 2,860 3,123 Productivity Solutions and Services1,313 1,739 1,778 Warehouse and Workflow Solutions1,443 2,308 2,913 Net Safety and Productivity Solutions sales5,489 6,907 7,814 Corporate and All Other12 5 - Net sales$36,662 $35,466 $34,392 In July 2022, the Company realigned certain business units within the Safety and Productivity Solutions reportable business segment." - Reworded sentence: "Aerospace products and services include auxiliary power units, propulsion engines, environmental control systems, integrated avionics, wireless 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." - Reworded sentence: "Our Honeywell Forge solutions enable our customers to digitally manage buildings, connecting data from different assets to enable smart maintenance, improve building performance, and even protect from incoming security threats." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Removed sentence: "The Company considers the applicability and impact of all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB)." - Removed sentence: "ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's Consolidated Statement of Operations, Balance Sheet and Cash Flows (Consolidated Financial Statements)." - Removed sentence: "In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Topic 405): Disclosure of Supplier Finance Program Obligations, to enhance the transparency of supplier finance programs." - Removed sentence: "The new standard requires annual disclosure of the key terms of the program, a description of where in the financial statements amounts outstanding under the program are presented, a rollforward of such amounts, and interim disclosure of amounts outstanding as of the end of each period." - Removed sentence: "The guidance does not affect recognition, measurement, or financial statement presentation of supplier finance programs." **Prior (2023):** The Company considers the applicability and impact of all Accounting Standards Updates (ASUs) 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 minimal impact on the Company's Consolidated Statement of Operations, Balance Sheet and Cash Flows (Consolidated Financial Statements). In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Topic 405): Disclosure of Supplier Finance Program Obligations, to enhance the transparency of supplier finance programs. The new standard requires annual disclosure of the key terms of the program, a description of where in the financial statements amounts outstanding under the program are presented, a rollforward of such amounts, and interim disclosure of amounts outstanding as of the end of each period. The guidance does not affect recognition, measurement, or financial statement presentation of supplier finance programs. The ASU is effective on January 1, 2023, except for the rollforward, which is effective on January 1, 2024. The Company is currently evaluating the impacts of this guidance on the Company's Consolidated Financial Statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption is permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. 57 Honeywell International Inc. 57 Honeywell International Inc. 57 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: Our U.S. and non-U.S. tax liabilities are dependent, in part, upon the distribution of income among various jurisdictions in which we operate, as well as changes in tax law or regulation. **Key changes:** - Added sentence: "The Organisation for Economic Co-operation and Development (OECD)/G20 and other invited countries, developed a global tax framework inclusive of a 15% global minimum tax under the Pillar Two Global Anti-Base Erosion Rules (Pillar Two)." - Added sentence: "On December 15, 2022, the Council of the European Union (EU) formally adopted the OECD's framework to achieve a coordinated implementation amongst EU Member States consistent with EU law." - Added sentence: "The EU's Pillar Two Directive effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive." - Added sentence: "Other major jurisdictions are actively considering and implementing changes to their tax laws to adopt certain parts of the OECD's proposals." - Added sentence: "We have assessed this framework and determined, based upon available guidance, that these changes will not have a material impact to our results of operations." **Prior (2023):** Our future results of operations could be adversely affected by changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, changes in tax laws, regulations and judicial rulings (or changes in the interpretation thereof), potential taxation of digital services, changes in generally accepted accounting principles, changes in the valuation of deferred tax assets and liabilities, changes in the amount of earnings permanently reinvested offshore, the results of audits and examinations of previously filed tax returns and continuing assessments of our tax exposures, and various other governmental enforcement initiatives. Our tax expense includes estimates of tax reserves and reflects other estimates and assumptions, including assessments of future earnings of the Company, which could impact the valuation of our deferred tax assets. In addition, our future effective tax rates could be subject to volatility or adversely affected by changes in tax laws, regulations, accounting principles, or interpretations thereof. **Current (2024):** Our future results of operations could be adversely affected by changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, changes in tax laws, regulations and judicial rulings (or changes in the interpretation thereof), potential taxation of digital services, changes in generally accepted accounting principles, changes in the valuation of deferred tax assets and liabilities, changes in the amount of earnings permanently reinvested offshore, the results of audits and examinations of previously filed tax returns and continuing assessments of our tax exposures, and various other governmental enforcement initiatives. Our tax expense includes estimates of tax reserves and reflects other estimates and assumptions, including assessments of future earnings of the Company, which could impact the valuation of our deferred tax assets. In addition, our future effective tax rates could be subject to volatility or adversely affected by changes in tax laws, regulations, accounting principles, or interpretations thereof. The Organisation for Economic Co-operation and Development (OECD)/G20 and other invited countries, developed a global tax framework inclusive of a 15% global minimum tax under the Pillar Two Global Anti-Base Erosion Rules (Pillar Two). On December 15, 2022, the Council of the European Union (EU) formally adopted the OECD's framework to achieve a coordinated implementation amongst EU Member States consistent with EU law. The EU's Pillar Two Directive effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive. Other major jurisdictions are actively considering and implementing changes to their tax laws to adopt certain parts of the OECD's proposals. We have assessed this framework and determined, based upon available guidance, that these changes will not have a material impact to our results of operations. Any future changes in OECD guidance or interpretations, including local country tax legislative changes thereof, could impact our initial assessment; therefore, we will continue to monitor and refine our assessment as further guidance is made available. --- ## Modified: A material disruption of our operations, particularly at our manufacturing facilities or within our IT infrastructure, could adversely affect our business. **Key changes:** - Reworded sentence: "Our facilities, supply chains, distribution systems, and IT systems are subject to catastrophic loss due to natural disasters or other weather-related disruptions, including hurricanes and floods, which may be exacerbated by the effects of climate change, power outages, fires, explosions, terrorism, equipment failures, sabotage, cyber incidents, any potential effects of climate change and adverse weather conditions, including water scarcity and rising sea levels, labor disputes, critical supply failure, inaccurate downtime forecast, political disruption and regional conflicts, public health crises, like a regional or global pandemic, and other reasons, which can result in undesirable consequences, including financial losses and damaged relationships with customers." - Added sentence: "34 Honeywell International Inc." - Added sentence: "34 Honeywell International Inc." - Added sentence: "34 Honeywell International Inc." - Added sentence: "TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTS" **Prior (2023):** Our facilities, supply chains, distribution systems, and information technology systems are subject to catastrophic loss due to natural disasters or other disruptions, including hurricanes and floods, which may be exacerbated by the effects of climate change, power outages, fires, explosions, terrorism, equipment failures, sabotage, cyber incidents, any potential effects of climate change and adverse weather conditions, including water scarcity, labor disputes, critical supply failure, inaccurate downtime forecast, political disruption, public health crises, like a regional or global pandemic, and other reasons, which can result in undesirable consequences, including financial losses and damaged relationships with customers. The COVID-19 pandemic has disrupted and may continue to disrupt our supply chain, distribution channels, production facilities, operations and customer demand, which has negatively impacted our operations and adversely affected our business and could continue to do so. We employ information technology systems and networks to support the business and rely on them to process, transmit and store electronic information, and to manage or support a variety of business processes and activities. Disruptions to our information technology infrastructure from system failures, shutdowns, power outages and energy shortages, telecommunication or utility failures, cybersecurity incidents, and other events, including disruptions at our cloud computing, server, systems and other third party IT service providers, could interfere with our operations, interrupt production and shipments, damage customer and business partner relationships, and negatively impact our reputation. In addition, the insurance we maintain may not be adequate to cover our losses resulting from any business interruption, including those resulting from a natural disaster or other severe weather event, and recurring extreme weather events or other adverse events could reduce the availability or increase the cost of insurance. **Current (2024):** Our facilities, supply chains, distribution systems, and IT systems are subject to catastrophic loss due to natural disasters or other weather-related disruptions, including hurricanes and floods, which may be exacerbated by the effects of climate change, power outages, fires, explosions, terrorism, equipment failures, sabotage, cyber incidents, any potential effects of climate change and adverse weather conditions, including water scarcity and rising sea levels, labor disputes, critical supply failure, inaccurate downtime forecast, political disruption and regional conflicts, public health crises, like a regional or global pandemic, and other reasons, which can result in undesirable consequences, including financial losses and damaged relationships with customers. We employ IT systems and networks to support the business and rely on them to process, transmit and store electronic information, and to manage or support a variety of business processes and activities. Although preventative measures may help to mitigate damage, such measures could be costly, and disruptions to our manufacturing facilities or IT infrastructure from system failures, shutdowns, power outages and energy shortages, telecommunication or utility failures, cybersecurity incidents, and other events, including disruptions at our cloud computing, server, systems, and other third party IT service providers, could interfere with our operations, interrupt production and shipments, damage customer and business partner relationships, and negatively impact our reputation. In addition, the insurance we maintain may not be adequate to cover our losses resulting from any business interruption, including those resulting from a natural disaster or other severe weather event, and recurring extreme weather events or other adverse events could reduce the availability or increase the cost of insurance. 34 Honeywell International Inc. 34 Honeywell International Inc. 34 Honeywell International Inc. TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTS --- ## Modified: DERIVATIVE AND HEDGING INSTRUMENTS **Key changes:** - Reworded sentence: "The following table summarizes the notional amounts and fair values of the Company's outstanding derivatives by risk category and instrument type within the Consolidated Balance Sheet: NotionalFair Value AssetFair Value (Liability)December 31, 2023December 31, 2022December 31, 2023December 31, 2022December 31, 2023December 31, 2022Derivatives in fair value hedging relationships Interest rate swap agreements$4,717 $4,984 $18 $16 $(184)$(303)Derivatives in cash flow hedging relationshipsForeign currency exchange contracts712 866 28 19 (4)(5)Commodity contracts6 9 - - (1)(1)Derivatives in net investment hedging relationshipsCross currency swap agreements4,264 3,189 - 90 (145) - Total derivatives designated as hedging instruments9,699 9,048 46 125 (334)(309)Derivatives not designated as hedging instrumentsForeign currency exchange contracts8,198 9,679 7 74 (5)(3)Total derivatives at fair value$17,897 $18,727 $53 $199 $(339)$(312) All Derivative assets are presented in Other current assets or Other assets." - Reworded sentence: "The carrying value of those debt instruments designated as net investment hedges, which includes the adjustment for the foreign currency transaction gain or loss on those instruments, was $6,099 million and $3,836 million as of December 31, 2023, and 2022, respectively." - Reworded sentence: "Gains and losses on interest rate swap agreements recognized in earnings were $121 million of income, $347 million of expense, and $135 million of expense for the years ended December 31, 2023, 2022, and 2021, respectively." **Prior (2023):** The following table summarizes the notional amounts and fair values of the Company's outstanding derivatives by risk category and instrument type within the Consolidated Balance Sheet: NotionalFair Value AssetFair Value (Liability)December 31, 2022December 31, 2021December 31, 2022December 31, 2021December 31, 2022December 31, 2021Derivatives in fair value hedging relationships: Interest rate swap agreements$4,984 $3,150 $16 $60 $(303)$ - Derivatives in cash flow hedging relationships:Foreign currency exchange contracts866 647 19 4 (5) - Commodity contracts9 - - - (1) - Derivatives in net investment hedging relationships:Foreign currency exchange contracts - 746 - 92 - - Cross currency swap agreements3,189 1,200 90 39 - - Total derivatives designated as hedging instruments9,048 5,743 125 195 (309) - Derivatives not designated as hedging instruments:Foreign currency exchange contracts9,679 11,278 74 278 (3)(282)Total derivatives at fair value$18,727 $17,021 $199 $473 $(312)$(282) All derivative assets are presented in Other current assets or Other assets. All derivative liabilities are presented in Accrued liabilities or Other liabilities. In addition to the foreign currency derivative contracts designated as net investment hedges, certain of the Company's foreign currency denominated debt instruments are designated as net investment hedges. The carrying value of those debt instruments designated as net investment hedges, which includes the adjustment for the foreign currency transaction gain or loss on those instruments, was $3,836 million and $4,074 million as of December 31, 2022, and 2021, respectively. Interest rate swap agreements are designated as hedge relationships with gains or losses on the derivative recognized in Interest and other financial charges offsetting the gains and losses on the underlying debt being hedged. Gains and losses on interest rate swap agreements recognized in earnings were $347 million of expense, $135 million of expense, and $169 million of income for the years ended December 31, 2022, 2021, and 2020, respectively. Gains and losses are fully offset by losses and gains on the underlying debt being hedged. The following table sets forth the amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: **Current (2024):** The following table summarizes the notional amounts and fair values of the Company's outstanding derivatives by risk category and instrument type within the Consolidated Balance Sheet: NotionalFair Value AssetFair Value (Liability)December 31, 2023December 31, 2022December 31, 2023December 31, 2022December 31, 2023December 31, 2022Derivatives in fair value hedging relationships Interest rate swap agreements$4,717 $4,984 $18 $16 $(184)$(303)Derivatives in cash flow hedging relationshipsForeign currency exchange contracts712 866 28 19 (4)(5)Commodity contracts6 9 - - (1)(1)Derivatives in net investment hedging relationshipsCross currency swap agreements4,264 3,189 - 90 (145) - Total derivatives designated as hedging instruments9,699 9,048 46 125 (334)(309)Derivatives not designated as hedging instrumentsForeign currency exchange contracts8,198 9,679 7 74 (5)(3)Total derivatives at fair value$17,897 $18,727 $53 $199 $(339)$(312) All Derivative assets are presented in Other current assets or Other assets. All Derivative liabilities are presented in Accrued liabilities or Other liabilities. In addition to the foreign currency derivative contracts designated as net investment hedges, certain of the Company's foreign currency denominated debt instruments are designated as net investment hedges. The carrying value of those debt instruments designated as net investment hedges, which includes the adjustment for the foreign currency transaction gain or loss on those instruments, was $6,099 million and $3,836 million as of December 31, 2023, and 2022, respectively. Interest rate swap agreements are designated as hedge relationships with gains or losses on the derivative recognized in Interest and other financial charges offsetting the gains and losses on the underlying debt being hedged. Gains and losses on interest rate swap agreements recognized in earnings were $121 million of income, $347 million of expense, and $135 million of expense for the years ended December 31, 2023, 2022, and 2021, respectively. Gains and losses are fully offset by losses and gains on the underlying debt being hedged. The following table sets forth the amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Removed sentence: "On January 18, 2022, the Company acquired 100% of the issued and outstanding shares of US Digital Designs, Inc., a leading provider of technologies for first responders, for total consideration of $186 million." - Removed sentence: "The business is included within the Honeywell Building Technologies reportable business segment." - Removed sentence: "The Company completed a preliminary evaluation of the fair value of all the assets and liabilities acquired with US Digital Designs, Inc., which will be finalized during the first quarter of 2023." - Removed sentence: "Management recorded intangible assets of $53 million and allocated $130 million to goodwill, which is deductible for tax purposes." - Reworded sentence: "As part of the business combination, Honeywell contributed an additional $270 million of cash and is the controlling majority-owner of Quantinuum, with an overall 54% ownership in the business." **Prior (2023):** On January 18, 2022, the Company acquired 100% of the issued and outstanding shares of US Digital Designs, Inc., a leading provider of technologies for first responders, for total consideration of $186 million. The business is included within the Honeywell Building Technologies reportable business segment. The Company completed a preliminary evaluation of the fair value of all the assets and liabilities acquired with US Digital Designs, Inc., which will be finalized during the first quarter of 2023. Management recorded intangible assets of $53 million and allocated $130 million to goodwill, which is deductible for tax purposes. On November 29, 2021, Honeywell Quantum Solutions, a wholly-owned subsidiary of Honeywell, and Cambridge Quantum Computing, a leading developer of quantum computing and quantum software, combined to form Quantinuum. Prior to closing the transaction, Honeywell held a 4.2% ownership interest in Cambridge Quantum Computing. At closing of the business combination, Honeywell contributed an additional $270 million of cash and is the controlling majority-owner of Quantinuum, with an overall 54% ownership in the business. Quantinuum is well positioned to lead the quantum computing industry by offering advanced, fully integrated hardware and software solutions at an unprecedented pace, scale, and level of performance to large high-growth markets worldwide. Quantinuum supports customer needs for improved computation in cyber security, drug discovery and delivery, material science, finance, and optimization across all major industrial markets. The business is included within Corporate and All Other, which is not a reportable business segment. The combination was accounted for under the acquisition method of accounting; as such, assets and liabilities of Quantinuum are consolidated by Honeywell and included in the Consolidated Balance Sheet. Upon close of the transaction, Honeywell recorded a non-cash adjustment of $460 million in Additional paid-in capital in the Consolidated Balance Sheet as the contribution of ownership interest in Honeywell Quantum Solutions and Cambridge Quantum Computing for the formation of Quantinuum. In addition, Honeywell recognized a gain of $22 million related to the fair value remeasurement of Honeywell's existing 4.2% ownership interest in Cambridge Quantum Computing, which was recorded in Other (income) expense in the Consolidated Statement of Operations. At close of the transaction, the fair value of Cambridge Quantum Computing's noncontrolling interest in Quantinuum was $419 million. In December 2021, Cambridge Quantum Computing contributed cash of $12 million to Quantinuum, increasing their noncontrolling interest and decreasing Honeywell's additional paid-in capital. In the fourth quarter of 2022, the Company completed its evaluation of the fair value of all the assets and liabilities acquired. Management recorded intangible assets of $90 million and allocated $945 million to goodwill, which is non-deductible for tax purposes. On February 12, 2021, the Company acquired 100% of the shares outstanding of Sparta Systems, a leading provider of enterprise quality management software for the life sciences industry, for $1,303 million. Sparta Systems is expected to further strengthen the Company's leadership in industrial automation, digital transformation solutions, and enterprise performance management software. The business is included within the Performance Materials and Technologies reportable business segment. The assets and liabilities acquired with Sparta Systems are included in the Consolidated Balance Sheet as of December 31, 2021, including $383 million of intangible assets and $1,011 million allocated to goodwill, which is non-deductible for tax purposes. During 2020, the Company acquired businesses for an aggregate cost (net of cash and debt assumed) of $261 million, which included the October 2020 acquisition of Rocky Research and the December 2020 acquisition of Sine Group. Rocky Research is a technology leader specializing in thermal, energy, and power management solutions and is included within the Aerospace reportable business segment. Sine Group offers a Software-as-a-Service (SaaS) that handles visitor management, workplace, and supply chain solutions and is included in the Honeywell Building Technologies reportable business segment. The acquisitions of Rocky Research and Sine Group included approximately $167 million allocated to goodwill, which is non-deductible for tax purposes. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Removed sentence: "Goodwill and indefinite-lived intangible assets are subject to impairment testing annually as of the first day of the fourth quarter, or if a triggering event occurs or changes in circumstances indicate that the carrying amount may not be fully recoverable." - Removed sentence: "This testing compares carrying values to fair values and, when appropriate, the carrying value of these assets is reduced to fair value, not to exceed the carrying value of goodwill." - Removed sentence: "The Company completed its annual goodwill impairment test as of the first day of the fourth quarter, and determined that there was no impairment as of that date." - Removed sentence: "The Company is not aware of any additional triggering events." - Reworded sentence: "In 2022, due to this change, the Company performed annual goodwill and intangible asset impairment tests as of the last day of the first quarter and the first day of the fourth quarter." **Prior (2023):** Goodwill and indefinite-lived intangible assets are subject to impairment testing annually as of the first day of the fourth quarter, or if a triggering event occurs or changes in circumstances indicate that the carrying amount may not be fully recoverable. This testing compares carrying values to fair values and, when appropriate, the carrying value of these assets is reduced to fair value, not to exceed the carrying value of goodwill. The Company completed its annual goodwill impairment test as of the first day of the fourth quarter, and determined that there was no impairment as of that date. The Company is not aware of any additional triggering events. Prior to 2022, the Company performed its annual goodwill and intangible asset impairment test as of the last day of the first quarter. In 2022, the Company changed the date of its annual goodwill and intangible asset impairment assessment to the first day of the fourth quarter. The Company believes this change does not represent a material change in method of applying an accounting principle. This change has been applied prospectively as of the date of the change, as retrospective application is deemed impracticable due to the inability to objectively determine the assumptions used in earlier periods without the benefit of hindsight. This voluntary change is preferable under the circumstances as it results in better alignment with the timing of the Company's forecasting process and reduces the time period between the assessment date and annual financial statements. This change in accounting principle does not delay, accelerate, or avoid an impairment of goodwill. In 2022, due to this change the Company performed annual goodwill and intangible asset impairment tests as of the last day of the first quarter and the first day of the fourth quarter. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: Increased focus and evolving views of lawmakers on climate change and other ESG issues could have a long-term impact on our business and result of operations. **Key changes:** - Reworded sentence: "Increased public awareness and concern regarding global climate change and other ESG matters may result in more international, regional, and/or federal regulatory or other stakeholder requirements or expectations that could mandate more restrictive or expansive standards, such as stricter limits on GHG emissions or more prescriptive reporting of ESG metrics, practices, and targets, than the voluntary commitments that the Company has adopted or require such changes on a more accelerated time frame." - Added sentence: "In addition, there is also an increasing number of state-level anti-ESG initiatives in the U.S." - Added sentence: "that may conflict with other regulatory requirements, resulting in regulatory uncertainty." - Reworded sentence: "36 Honeywell International Inc." **Prior (2023):** Increased public awareness and concern regarding global climate change and other ESG matters may result in more international, regional and/or federal regulatory or other stakeholder requirements or expectations that could mandate more restrictive or expansive standards, such as stricter limits on greenhouse gas emissions, more prescriptive reporting of ESG metrics, practices and targets, than the voluntary commitments that the Company has adopted or require such changes on a more accelerated time frame. There continues to be a lack of consistent climate and other ESG legislation, which creates economic and regulatory uncertainty; however, there has been an increasing amount of legislative and regulatory activity, particularly in the European Union, United Kingdom, and U.S. New or revised legal and regulatory requirements could impose significant operational restrictions and compliance requirements upon the Company or its products, and could negatively impact the Company's business, capital expenditures, results of operations, financial condition, and competitive position. 35 Honeywell International Inc. 35 Honeywell International Inc. 35 Honeywell International Inc. TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTS **Current (2024):** Increased public awareness and concern regarding global climate change and other ESG matters may result in more international, regional, and/or federal regulatory or other stakeholder requirements or expectations that could mandate more restrictive or expansive standards, such as stricter limits on GHG emissions or more prescriptive reporting of ESG metrics, practices, and targets, than the voluntary commitments that the Company has adopted or require such changes on a more accelerated time frame. There continues to be a lack of consistent climate and other ESG legislation, which creates economic and regulatory uncertainty; however, there has been an increasing amount of legislative and regulatory activity, particularly in the European Union, United Kingdom, and U.S. In addition, there is also an increasing number of state-level anti-ESG initiatives in the U.S. that may conflict with other regulatory requirements, resulting in regulatory uncertainty. New or revised legal and regulatory requirements could impose significant operational restrictions and compliance requirements upon the Company or its products, and could negatively impact the Company's business, capital expenditures, results of operations, financial condition, and competitive position. 36 Honeywell International Inc. 36 Honeywell International Inc. 36 Honeywell International Inc. TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTS --- ## Modified: Vested and expected to vest at December 31, 20231 **Key changes:** - Reworded sentence: "Represents the sum of vested options of 9.6 million and expected to vest options of 2.8 million." **Prior (2023):** (1)Represents the sum of vested options of 9.5 million and expected to vest options of 3.5 million. Expected to vest options are derived by applying the pre-vesting forfeiture rate assumption to total outstanding unvested options of 4.5 million. 86 Honeywell International Inc. 86 Honeywell International Inc. 86 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Represents the sum of vested options of 9.6 million and expected to vest options of 2.8 million. Expected to vest options are derived by applying the pre-vesting forfeiture rate assumption to total outstanding unvested options of 3.8 million. 89 Honeywell International Inc. 89 Honeywell International Inc. 89 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT **Key changes:** - Reworded sentence: "ForeignExchangeTranslationAdjustmentPensionand OtherPostretirement BenefitAdjustmentsChanges in Fair Valueof Available for Sale InvestmentsChanges inFair Value ofCash FlowHedgesTotalBalance at December 31, 2020$(2,780)$(601)$4 $ - $(3,377)Other comprehensive income (loss) before reclassifications314 268 (3)17 596 Amounts reclassified from accumulated other comprehensive income (loss)(12)(82) - (20)(114)Net current period other comprehensive income (loss)302 186 (3)(3)482 Balance at December 31, 2021(2,478)(415)1 (3)(2,895)Other comprehensive income (loss) before reclassifications(344)(623)(8)71 (904)Amounts reclassified from accumulated other comprehensive income (loss)(10)390 - (56)324 Net current period other comprehensive income (loss)(354)(233)(8)15 (580)Balance at December 31, 2022(2,832)(648)(7)12 (3,475)Other comprehensive income (loss) before reclassifications(269)(477)5 60 (681)Amounts reclassified from accumulated other comprehensive income (loss) - 70 - (49)21 Net current period other comprehensive income (loss)(269)(407)5 11 (660)Balance at December 31, 2023$(3,101)$(1,055)$(2)$23 $(4,135)" **Prior (2023):** ForeignExchangeTranslationAdjustmentPensionand OtherPostretirement BenefitAdjustmentsChanges in Fair Valueof Available for Sale InvestmentsChanges inFair Value of DesignatedCash FlowHedgesTotalBalance at December 31, 2019$(2,566)$(675)$ - $44 $(3,197)Other comprehensive income (loss) before reclassifications(201)115 4 10 (72)Amounts reclassified from accumulated other comprehensive income(13)(41) - (54)(108)Net current period other comprehensive income (loss)(214)74 4 (44)(180)Balance at December 31, 2020$(2,780)$(601)$4 $ - $(3,377)Other comprehensive income (loss) before reclassifications314 268 (3)17 596 Amounts reclassified from accumulated other comprehensive income(12)(82) - (20)(114)Net current period other comprehensive income (loss)302 186 (3)(3)482 Balance at December 31, 2021$(2,478)$(415)$1 $(3)$(2,895)Other comprehensive income (loss) before reclassifications(344)(623)(8)71 (904)Amounts reclassified from accumulated other comprehensive income(10)390 - (56)324 Net current period other comprehensive income (loss)(354)(233)(8)15 (580)Balance at December 31, 2022$(2,832)$(648)$(7)$12 $(3,475) RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Year Ended December 31, 2022Affected Line in the Consolidated Statement of OperationsNet SalesCost ofProductsSoldCost ofServicesSoldSelling,General andAdministrativeExpensesOther(Income)ExpenseInterest andOther Financial ChargesTotalAmortization of pension and other postretirement benefit items: Actuarial losses recognized$ - $ - $ - $ - $516 $ - $516 Prior service (credit) recognized - - - - (84) - (84)Losses (gains) on cash flow hedges(13)(48)(14)3 - - (72)Losses (gains) on excluded component of net investment hedges - - - - - (13)(13)Total before tax$(13)$(48)$(14)$3 $432 $(13)$347 Tax expense (benefit)(23)Total reclassifications for the period, net of tax$324 RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) 90 Honeywell International Inc. 90 Honeywell International Inc. 90 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** ForeignExchangeTranslationAdjustmentPensionand OtherPostretirement BenefitAdjustmentsChanges in Fair Valueof Available for Sale InvestmentsChanges inFair Value ofCash FlowHedgesTotalBalance at December 31, 2020$(2,780)$(601)$4 $ - $(3,377)Other comprehensive income (loss) before reclassifications314 268 (3)17 596 Amounts reclassified from accumulated other comprehensive income (loss)(12)(82) - (20)(114)Net current period other comprehensive income (loss)302 186 (3)(3)482 Balance at December 31, 2021(2,478)(415)1 (3)(2,895)Other comprehensive income (loss) before reclassifications(344)(623)(8)71 (904)Amounts reclassified from accumulated other comprehensive income (loss)(10)390 - (56)324 Net current period other comprehensive income (loss)(354)(233)(8)15 (580)Balance at December 31, 2022(2,832)(648)(7)12 (3,475)Other comprehensive income (loss) before reclassifications(269)(477)5 60 (681)Amounts reclassified from accumulated other comprehensive income (loss) - 70 - (49)21 Net current period other comprehensive income (loss)(269)(407)5 11 (660)Balance at December 31, 2023$(3,101)$(1,055)$(2)$23 $(4,135) --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "In 2023, 2022, and 2021, the weighted average number of stock options excluded from the computations was 4.5 million, 3.5 million, and 1.7 million, respectively." - Reworded sentence: "As of December 31, 2023, and 2022, the total shares outstanding were 651.8 million and 667.6 million, respectively, and as of December 31, 2023, and 2022, total shares issued were 957.6 million." - Reworded sentence: "Pre-taxTaxAfter-TaxYear Ended December 31, 2023 Foreign exchange translation adjustment$(269)$ - $(269)Pension and other postretirement benefit adjustments(538)131 (407)Changes in fair value of available for sale investments5 - 5 Changes in fair value of cash flow hedges17 (6)11 Total net current period other comprehensive income (loss)$(785)$125 $(660)Year Ended December 31, 2022Foreign exchange translation adjustment$(354)$ - $(354)Pension and other postretirement benefit adjustments(280)47 (233)Changes in fair value of available for sale investments(8) - (8)Changes in fair value of cash flow hedges9 6 15 Total net current period other comprehensive income (loss)$(633)$53 $(580)Year Ended December 31, 2021Foreign exchange translation adjustment$302 $ - $302 Pension and other postretirement benefit adjustments245 (59)186 Changes in fair value of available for sale investments(3) - (3)Changes in fair value of cash flow hedges(4)1 (3)Total net current period other comprehensive income (loss)$540 $(58)$482" **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: EXECUTIVE COMPENSATION **Key changes:** - Reworded sentence: "118 Honeywell International Inc." **Prior (2023):** Information relating to executive compensation, including the Management Development and Compensation Committee Report and disclosures regarding compensation committee interlocks and insider participation will be contained in the Proxy Statement, and such information is incorporated herein by reference. 114 Honeywell International Inc. 114 Honeywell International Inc. 114 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS **Current (2024):** Information relating to executive compensation, including the Management Development and Compensation Committee Report and disclosures regarding compensation committee interlocks and insider participation will be contained in the Proxy Statement, and such information is incorporated herein by reference. 118 Honeywell International Inc. 118 Honeywell International Inc. 118 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## Modified: OTHER MATTERS **Key changes:** - Reworded sentence: "47 Honeywell International Inc." **Prior (2023):** LITIGATION See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for a discussion of environmental, asbestos, and other litigation matters. RECENT ACCOUNTING PRONOUNCEMENTS See Note 1 Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements for a discussion of recent accounting pronouncements. 46 Honeywell International Inc. 46 Honeywell International Inc. 46 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS **Current (2024):** LITIGATION See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for a discussion of environmental, asbestos, and other litigation matters. RECENT ACCOUNTING PRONOUNCEMENTS See Note 1 Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements for a discussion of recent accounting pronouncements. 47 Honeywell International Inc. 47 Honeywell International Inc. 47 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "Performance obligations recognized as of December 31, 2023 will be satisfied over the course of future periods." - Reworded sentence: "Performance obligations expected to be satisfied within one year and greater than one year are 60% and 40%, respectively." - Reworded sentence: "Typical payment terms of the Company's fixed price over time contracts include progress payments based on specified events or milestones or based on project progress." - Reworded sentence: "REPOSITIONING AND OTHER CHARGES A summary of net repositioning and other charges follows: Years Ended December 31,202320222021Severance$162 $122 $80 Asset impairments41 176 117 Exit costs139 122 134 Reserve adjustments(56)(56)(13)Total net repositioning charges286 364 318 Asbestos-related charges, net of insurance and reimbursements534 532 129 Probable and reasonably estimable environmental liabilities, net of reimbursements44 28 22 Other charges(4)342 100 Total net repositioning and other charges$860 $1,266 $569 The following table summarizes the pre-tax distribution of total net repositioning and other charges by classification in the Consolidated Statement of Operations: Years Ended December 31,202320222021Cost of products and services sold$680 $572 $457 Selling, general and administrative expenses172 309 112 Other (income) expense8 385 - Total net repositioning and other charges$860 $1,266 $569 The following table summarizes the pre-tax amount of total net repositioning and other charges by reportable business segment." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "Net periodic benefit (income) cost and other amounts recognized in Other comprehensive (income) loss for the Company's significant pension and other postretirement benefit plans include the following components: Pension BenefitsU.S." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: Long-lived Assets2 **Key changes:** - Reworded sentence: "Sales between geographic areas approximate market value and are not significant." - Reworded sentence: "Included in United States Net sales are export sales of $4,708 million, $4,187 million, and $4,037 million for the years ended December 31, 2023, 2022, and 2021, respectively." - Reworded sentence: "Impact of Quantinuum contribution1 Noncontrolling interest non-cash contribution1 Receipt of Garrett Series B Preferred Stock2 See Note 2 Acquisitions and Divestitures for additional information of non-cash amounts recognized related to the combination of Honeywell Quantum Solutions and Cambridge Quantum Computing to form Quantinuum, a newly formed entity, which Honeywell consolidates as the controlling majority-owner." **Prior (2023):** (1)Sales between geographic areas approximate market value and are not significant. Net sales are classified according to their country of origin. Included in United States Net sales are export sales of $4,187 million, $4,037 million, and $4,000 million for the years ended December 31, 2022, 2021, and 2020, respectively. (2)Long-lived assets are comprised of Property, plant and equipment - net. NOTE 24. SUPPLEMENTAL CASH FLOW INFORMATION Years Ended December 31,202220212020Net payments for repositioning and other charges:Severance and exit cost payments$(275)$(382)$(564)Environmental payments(211)(210)(216)Reimbursement receipts140 140 176 Insurance receipts for asbestos-related liabilities37 46 58 Insurance receivables settlements and write-offs68 - - Asbestos-related liability payments(271)(286)(287)$(512)$(692)$(833)Interest paid, net of amounts capitalized$375 $339 $329 Income taxes paid, net of refunds1,324 1,202 1,173 Non-cash investing and financing activities:Common stock contributed to savings plans196 191 211 Marketable securities contributed to non-U.S. pension plans - 81 93 Impact of Quantinuum contribution(1) - 460 - Noncontrolling interest non-cash contribution(1) - 419 - Loan in exchange for prepaid assets - 25 - Receipt of Garrett Series B Preferred Stock(2) - 577 - Impact of Quantinuum contribution(1) Noncontrolling interest non-cash contribution(1) Receipt of Garrett Series B Preferred Stock(2) (1)See Note 2 Acquisitions and Divestitures for additional information for non-cash amounts recognized related to the combination of Honeywell Quantum Solutions and Cambridge Quantum Computing to form Quantinuum, a newly formed entity, Honeywell consolidates as the controlling majority-owner. (2)See Notes 12 Fair Value Measurements and 19 Commitments and Contingencies for additional information for non-cash amounts recognized related to the receipt of 834.8 million shares of Garrett Series B Preferred Stock in exchange for the full and final satisfaction of the Garrett Indemnity, Tax Matters Agreement and pending litigation between the Company and Garrett. The non-cash amount reflects the fair value of the Garrett Series B Preferred Stock as of April 30, 2021, the date Garrett issued the Series B Preferred Stock to the Company. 110 Honeywell International Inc. 110 Honeywell International Inc. 110 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS **Current (2024):** Sales between geographic areas approximate market value and are not significant. Net sales are classified according to their country of origin. Included in United States Net sales are export sales of $4,708 million, $4,187 million, and $4,037 million for the years ended December 31, 2023, 2022, and 2021, respectively. Long-lived assets consists of Property, plant and equipment - net. NOTE 24. SUPPLEMENTAL CASH FLOW INFORMATION Years Ended December 31,202320222021Net payments for repositioning and other chargesSeverance and exit cost payments$(294)$(275)$(382)Environmental payments(196)(211)(210)Reimbursement receipts140 140 140 Insurance receipts for asbestos-related liabilities39 37 46 Insurance receivables settlements and write-offs26 68 - Asbestos-related liability payments(174)(271)(286)Total net payments for repositioning and other charges$(459)$(512)$(692)Interest paid, net of amounts capitalized$649 $375 $339 Income taxes paid, net of refunds1,581 1,324 1,202 Non-cash investing and financing activitiesCommon stock contributed to savings plans216 196 191 Marketable securities contributed to non-U.S. pension plans - - 81 Impact of Quantinuum contribution1 - - 460 Noncontrolling interest non-cash contribution1 - - 419 Loan in exchange for prepaid assets - - 25 Receipt of Garrett Series B Preferred Stock2 - - 577 1See Note 2 Acquisitions and Divestitures for additional information of non-cash amounts recognized related to the combination of Honeywell Quantum Solutions and Cambridge Quantum Computing to form Quantinuum, a newly formed entity, which Honeywell consolidates as the controlling majority-owner.2See Note 19 Commitments and Contingencies for additional information of non-cash amounts recognized related to the receipt of 834.8 million shares of Garrett Series B Preferred Stock in exchange for the full and final satisfaction of the Garrett Indemnity, Tax Matters Agreement, and pending litigation between the Company and Garrett. The non-cash amount reflects the fair value of the Garrett Series B Preferred Stock as of April 30, 2021, the date Garrett issued the Series B Preferred Stock to the Company. Impact of Quantinuum contribution1 Noncontrolling interest non-cash contribution1 Receipt of Garrett Series B Preferred Stock2 See Note 2 Acquisitions and Divestitures for additional information of non-cash amounts recognized related to the combination of Honeywell Quantum Solutions and Cambridge Quantum Computing to form Quantinuum, a newly formed entity, which Honeywell consolidates as the controlling majority-owner. See Note 19 Commitments and Contingencies for additional information of non-cash amounts recognized related to the receipt of 834.8 million shares of Garrett Series B Preferred Stock in exchange for the full and final satisfaction of the Garrett Indemnity, Tax Matters Agreement, and pending litigation between the Company and Garrett. The non-cash amount reflects the fair value of the Garrett Series B Preferred Stock as of April 30, 2021, the date Garrett issued the Series B Preferred Stock to the Company. 114 Honeywell International Inc. 114 Honeywell International Inc. 114 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## Modified: Change 2023 **Key changes:** - Reworded sentence: "2021 38 Honeywell International Inc." **Prior (2023):** vs. 2021 Change 2021 vs. 2020 38 Honeywell International Inc. 38 Honeywell International Inc. 38 Honeywell International Inc. TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTS **Current (2024):** vs. 2022 Change 2022 vs. 2021 38 Honeywell International Inc. 38 Honeywell International Inc. 38 Honeywell International Inc. TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "Plans2023202220232022Change in benefit obligation Benefit obligation at beginning of year$13,290 $17,391 $4,400 $6,999 Service cost29 86 11 19 Interest cost645 380 200 103 Plan amendments - - - - Actuarial (gains) losses1337 (3,135)191 (1,929)Benefits paid(1,509)(1,421)(250)(261)Settlements and curtailments - (13) - - Foreign currency translation - - 165 (533)Other - 2 1 2 Benefit obligation at end of year12,792 13,290 4,718 4,400 Change in plan assetsFair value of plan assets at beginning of year17,005 20,560 5,304 8,396 Actual return on plan assets1,070 (2,161)267 (2,187)Company contributions28 37 22 17 Benefits paid(1,509)(1,421)(250)(261)Settlements and curtailments - (13) - - Foreign currency translation - - 205 (664)Other - 3 1 3 Fair value of plan assets at end of year16,594 17,005 5,549 5,304 Funded status of plans$3,802 $3,715 $831 $904 Amounts recognized in the Consolidated Balance Sheet consist ofPrepaid pension benefit cost2$4,052 $3,970 $1,335 $1,356 Accrued pension liabilities - current3(26)(28)(15)(14)Accrued pension liabilities - noncurrent4(224)(227)(489)(438)Net amount recognized$3,802 $3,715 $831 $904 1The actuarial losses incurred in 2023 related to the Company's U.S." - Reworded sentence: "Included in Other assets in the Consolidated Balance Sheet." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "federal statutory income tax rate is reconciled to the effective income tax rate as follows: Years Ended December 31,202320222021U.S." - Reworded sentence: "earnings1,2,3(2.0)(0.4)(1.4)U.S." - Reworded sentence: "Additionally, in 2022, there was lower tax expense reported for contingencies as a result of the release of certain state income tax reserves." - Reworded sentence: "73 Honeywell International Inc." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: OTHER CHARGES **Key changes:** - Reworded sentence: "In 2022, the Company recognized $295 million of Other charges related to the initial suspension and the wind down of our business and operations in Russia." - Reworded sentence: "Directly attributable to our wind down of businesses and operations in Russia, but excluded from Other charges, is a $2 million tax valuation allowance recorded to Tax expense in the Consolidated Statement of Operations." - Reworded sentence: "Based on available information to date, the Company's estimate of potential future losses or other contingencies related to suspension and wind down activities, including any guarantee payments or any litigation costs or as otherwise related to the Company's wind down in Russia, could adversely affect the Company's consolidated results of operations in the periods recognized but would not be material with respect to the Company's consolidated financial position." - Reworded sentence: "71 Honeywell International Inc." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In 2022, the Company recognized $295 million of Other charges related to the initial suspension and the wind down of our business and operations in Russia. These costs impacted all reportable business segments, with the most significant impact within the Performance Materials and Technologies reportable business segment. The Other charges include costs recorded in Cost of products sold, Selling, general and administrative expenses, or Other (income) expense in the Consolidated Statement of Operations. Cost of products and services sold includes $65 million primarily related to inventory reserves and the write-down of other assets, Selling, general and administrative includes $185 million primarily related to reserves against outstanding accounts receivable and contract assets, impairment of intangible assets, the write-down of other assets, and employee severance, and Other (income) expense includes $45 million related to foreign exchange revaluation on an intercompany loan with a Russian affiliate, impairment of property, plant and equipment, and expenses for called guarantees. Directly attributable to our wind down of businesses and operations in Russia, but excluded from Other charges, is a $2 million tax valuation allowance recorded to Tax expense in the Consolidated Statement of Operations. Given the uncertainty inherent in the Company's remaining obligations related to contracts with Russian counterparties, the Company does not believe it is possible to develop estimates of reasonably possible loss in excess of current accruals for these matters (other than as specifically set forth above). Based on available information to date, the Company's estimate of potential future losses or other contingencies related to suspension and wind down activities, including any guarantee payments or any litigation costs or as otherwise related to the Company's wind down in Russia, could adversely affect the Company's consolidated results of operations in the periods recognized but would not be material with respect to the Company's consolidated financial position. See Note 19 Commitments and Contingencies for a discussion of the recognition and measurement of estimate for contingencies. 71 Honeywell International Inc. 71 Honeywell International Inc. 71 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: DERIVATIVE FINANCIAL INSTRUMENTS **Key changes:** - Reworded sentence: "The Company elected to exclude the time value of the derivatives (i.e., the forward points) from the assessment of hedge effectiveness and to recognize the initial value of the excluded component in earnings using the amortization approach." - Reworded sentence: "The gain or loss will be subsequently reclassified into earnings when the hedged net investment is either sold or substantially liquidated." **Prior (2023):** All derivative financial instruments are recorded on the balance sheet as assets or liabilities and measured at fair value. For derivatives designated as hedges of the fair value of assets or liabilities, the changes in fair values of both the derivatives and the hedged items are recorded in current earnings. For derivatives designated as cash flow hedges, the changes in fair value of the derivatives are recorded in Accumulated other comprehensive income (loss) and subsequently recognized in earnings when the hedged items impact earnings. Derivative financial instruments designated as hedges must be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Changes in fair value of the derivative contract must be highly correlated with changes in fair value of the underlying hedged item at inception and over the life of the hedge contract. Cash flows of such derivative financial instruments are classified consistent with the underlying hedged item. The Company elected to exclude the time value of the derivatives (i.e., the forward points) from the assessment of hedge effectiveness and recognize the initial value of the excluded component in earnings using the amortization approach. For derivative instruments that are designated and qualify as a net investment hedge, the gain or loss is reported as a component of Other comprehensive income (loss) and recorded in Accumulated other comprehensive income (loss). The gain or loss will be subsequently reclassified into net earnings when the hedged net investment is either sold or substantially liquidated. LEASES At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The assessment is based on (i) whether the contract involves the use of a distinct identified asset, (ii) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (iii) whether the Company has the right to direct the use of the asset. All significant lease arrangements are generally recognized at lease commencement. Operating lease right-of-use (ROU) assets and lease liabilities are recognized at commencement. An ROU asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less (short-term leases), and we recognize lease expense for these leases as incurred over the lease term. ROU assets represent the Company's right to use an underlying asset during the reasonably certain lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. 59 Honeywell International Inc. 59 Honeywell International Inc. 59 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** All derivative financial instruments are recorded on the balance sheet as assets or liabilities and measured at fair value. For derivatives designated as hedges of the fair value of assets or liabilities, the changes in fair values of both the derivatives and the hedged items are recorded in current earnings. For derivatives designated as cash flow hedges, the changes in fair value of the derivatives are recorded in Accumulated other comprehensive income (loss) and subsequently recognized in earnings when the hedged items impact earnings. Derivative financial instruments designated as hedges must be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Changes in fair value of the derivative contract must be highly correlated with changes in fair value of the underlying hedged item at inception and over the life of the hedge contract. Cash flows of such derivative financial instruments are classified consistent with the underlying hedged item. The Company elected to exclude the time value of the derivatives (i.e., the forward points) from the assessment of hedge effectiveness and to recognize the initial value of the excluded component in earnings using the amortization approach. For derivative instruments that are designated and qualify as a net investment hedge, the gain or loss is reported as a component of Other comprehensive income (loss) and recorded in Accumulated other comprehensive income (loss). The gain or loss will be subsequently reclassified into earnings when the hedged net investment is either sold or substantially liquidated. 61 Honeywell International Inc. 61 Honeywell International Inc. 61 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: Data privacy, data protection, and information security may require significant resources and present certain risks. **Key changes:** - Reworded sentence: "We collect, store, have access to, and otherwise process certain confidential or sensitive data, including proprietary business information, personal data, or other information that is subject to data privacy and security laws, regulations, and/or contractual obligations with third parties." **Prior (2023):** We collect, store, have access to and otherwise process certain confidential or sensitive data, including proprietary business information, personal data or other information that is subject to privacy and security laws, regulations and/or customer-imposed controls. Despite our efforts to protect such data, we may be vulnerable to material security breaches, theft, misplaced or lost data, programming errors, or employee errors that could potentially lead to the compromising of such data, improper use of our systems, software solutions or networks, unauthorized access, use, disclosure, modification or destruction of information, defective products, production downtimes and operational disruptions. In addition, we operate in an environment in which there are different and potentially conflicting data privacy laws in effect in the various U.S. states and foreign jurisdictions in which we operate and we must understand and comply with each law and standard in each of these jurisdictions while ensuring the data is secure. For example, European laws require us to have an approved legal mechanism to transfer personal data out of Europe; the European Union General Data Protection Regulation imposes stringent requirements in how we collect and process personal data and provides for significantly greater penalties for noncompliance; and several other states and countries have passed or are considering laws that require personal data relating to their residents or citizens to be maintained on local servers and impose additional data transfer restrictions. Government enforcement actions can be costly and interrupt the regular operation of our business, and violations of data privacy laws can result in fines, reputational damage, and civil lawsuits, any of which may adversely affect our business, reputation, and financial statements. 33 Honeywell International Inc. 33 Honeywell International Inc. 33 Honeywell International Inc. TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTS **Current (2024):** We collect, store, have access to, and otherwise process certain confidential or sensitive data, including proprietary business information, personal data, or other information that is subject to data privacy and security laws, regulations, and/or contractual obligations with third parties. Despite our efforts to protect such data, we may be vulnerable to material security breaches, theft, misplaced or lost data, programming errors, or human errors that could potentially lead to the compromise of such data, improper use of our products, systems, software solutions, or networks, unauthorized access, use, disclosure, modification, or destruction of data, defective products, production downtimes, and operational disruptions. A significant actual or perceived risk of theft, loss, fraudulent use or misuse of customer, employee, or other data, whether by us, our suppliers, channel partners, customers, or other third parties, as a result of employee error or malfeasance, or as a result of the imaging, software, security, and other products we incorporate into our products, as well as non-compliance with applicable industry standards or our contractual or other legal obligations or privacy and information security policies regarding such data, could result in costs, fines, litigation, or regulatory actions, or could lead customers to select the products and services of our competitors. In addition, we operate in an environment in which there are different and potentially conflicting laws in effect in the U.S. and foreign jurisdictions in which we operate, and we must understand and comply with each law and standard in these jurisdictions while also ensuring the data is secure. Many of these laws impose stringent requirements as to how we collect, store, maintain, transfer, and otherwise process personal data and provide significant or material penalties for noncompliance. Many jurisdictions have passed or are considering laws that require personal data relating to their residents or citizens to be maintained or replicated on local servers or impose specific obligations related to extraterritorial data transfers. Government enforcement actions can be costly and interrupt the regular operation of our business, and actual or alleged violations of such laws, including in relation to the Company's processing of personal data or adoption of emerging technologies such as artificial intelligence and machine learning, can result in fines, reputational damage, and civil lawsuits, any of which may adversely affect our business, reputation, and financial statements. --- ## Modified: INCOME BEFORE TAXES **Key changes:** - Reworded sentence: "Years Ended December 31,202320222021U.S.$2,368 $3,305 $3,955 Non-U.S.4,791 3,074 3,280 Total Income before taxes$7,159 $6,379 $7,235" **Prior (2023):** Years Ended December 31,202220212020U.S.$3,305 $3,955 $3,318 Non-U.S.3,074 3,280 2,694 $6,379 $7,235 $6,012 **Current (2024):** Years Ended December 31,202320222021U.S.$2,368 $3,305 $3,955 Non-U.S.4,791 3,074 3,280 Total Income before taxes$7,159 $6,379 $7,235 --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "The following table summarizes information about RSU activity for the three years ended December 31, 2023: Number ofRestrictedStock UnitsWeightedAverageGrant DateFair ValuePer ShareNon-vested at December 31, 20203,396,523 $148.23 Granted992,854 214.61 Vested(1,123,547)144.34 Forfeited(308,293)156.74 Non-vested at December 31, 20212,957,536 171.73 Granted1,056,869 186.48 Vested(864,944)157.21 Forfeited(441,453)177.38 Non-vested at December 31, 20222,708,008 181.10 Granted1,109,307 194.81 Vested(919,496)171.92 Forfeited(290,982)187.13 Non-vested at December 31, 20232,606,837 $189.18 As of December 31, 2023, there was approximately $250 million of total unrecognized compensation cost related to non-vested RSUs granted under the Company's stock plans which is expected to be recognized over a weighted average period of 1.91 years." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: DEFERRED TAX ASSETS (LIABILITIES) **Key changes:** - Reworded sentence: "The tax effects of temporary differences and tax carryforwards which give rise to future income tax benefits and payables are as follows: Deferred tax assetsDecember 31,20232022Postretirement benefits other than pensions$55 $59 Asbestos and environmental405 545 Capitalized research and development582 - Employee compensation and benefits148 142 Lease liabilities258 233 Other accruals and reserves196 363 Net operating losses687 695 Capital loss limitation and carryover385 126 Tax credit carryforwards and other attributes420 163 Gross deferred tax assets3,136 2,326 Valuation allowance(1,292)(812)Total deferred tax assets1,844 1,514 Deferred tax liabilitiesPension(1,132)(1,088)Property, plant and equipment(441)(233)Right-of-use asset(240)(212)Intangibles(817)(818)Unremitted earnings of foreign subsidiaries(542)(517)Other asset basis differences(369)(317)Other(5)(1)Total deferred tax liabilities(3,546)(3,186)Net deferred tax liability$(1,702)$(1,672) Property, plant and equipment The Company's gross deferred tax assets include $1,378 million related to non-U.S." **Prior (2023):** The tax effects of temporary differences and tax carryforwards which give rise to future income tax benefits and payables are as follows: Deferred tax assets:December 31,20222021Postretirement benefits other than pensions$59 $77 Asbestos and environmental545 468 Employee compensation and benefits142 174 Lease liabilities233 242 Other accruals and reserves363 260 Net operating losses695 734 Capital loss limitation and carryover126 151 Tax credit carryforwards163 164 Gross deferred tax assets2,326 2,270 Valuation allowance(812)(857)Total deferred tax assets$1,514 $1,413 Deferred tax liabilities:Pension$(1,088)$(948)Property, plant and equipment(233)(464)Right-of-use asset(212)(230)Intangibles(818)(883)Unremitted earnings of foreign subsidiaries(517)(426)Other asset basis differences(317)(334)Other(1)(2)Total deferred tax liabilities(3,186)(3,287)Net deferred tax liability$(1,672)$(1,874) The Company's gross deferred tax assets include $869 million related to non-U.S. operations comprised principally of net operating losses, capital loss and tax credit carryforwards, primarily in Canada, France, Germany, Luxembourg, and the United Kingdom, and deductible temporary differences. The Company maintains a valuation allowance of $683 million against a portion of the non-U.S. gross deferred tax assets. Additionally, a valuation allowance of $129 million is maintained against the U.S. gross deferred tax asset primarily related to capital loss carryovers. The change in the valuation allowance resulted in a decrease of $8 million, an increase of $124 million, and an increase of $105 million to income tax expense in 2022, 2021, and 2020, respectively. In the event the Company determines that it will not be able to realize its net deferred tax assets in the future, the Company will reduce such amounts through an increase to income tax expense in the period such determination is made. Conversely, if the Company determines that it will be able to realize net deferred tax assets in excess of the carrying amounts, the Company will decrease the recorded valuation allowance through a reduction to income tax expense in the period that such determination is made. As of December 31, 2022, the Company recorded a $517 million deferred tax liability on all unremitted foreign earnings based on estimated earnings and profits of approximately $17 billion as of the balance sheet date. As of December 31, 2022, the Company's net operating loss, capital loss and tax credit carryforwards were as follows: JurisdictionExpirationPeriodNet Operatingand Capital LossCarryforwardsTax CreditCarryforwardsU.S. Federal2042$584 $94 U.S. State2042449 21 Non-U.S.2042450 53 Non-U.S.Indefinite2,062 - $3,545 $168 71 Honeywell International Inc. 71 Honeywell International Inc. 71 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** The tax effects of temporary differences and tax carryforwards which give rise to future income tax benefits and payables are as follows: Deferred tax assetsDecember 31,20232022Postretirement benefits other than pensions$55 $59 Asbestos and environmental405 545 Capitalized research and development582 - Employee compensation and benefits148 142 Lease liabilities258 233 Other accruals and reserves196 363 Net operating losses687 695 Capital loss limitation and carryover385 126 Tax credit carryforwards and other attributes420 163 Gross deferred tax assets3,136 2,326 Valuation allowance(1,292)(812)Total deferred tax assets1,844 1,514 Deferred tax liabilitiesPension(1,132)(1,088)Property, plant and equipment(441)(233)Right-of-use asset(240)(212)Intangibles(817)(818)Unremitted earnings of foreign subsidiaries(542)(517)Other asset basis differences(369)(317)Other(5)(1)Total deferred tax liabilities(3,546)(3,186)Net deferred tax liability$(1,702)$(1,672) Property, plant and equipment The Company's gross deferred tax assets include $1,378 million related to non-U.S. operations comprised primarily of net operating losses and other tax attribute carryforwards in Canada, France, Germany, Luxembourg, Switzerland, and the United Kingdom. The Company maintains a valuation allowance of $1,176 million against a portion of the non-U.S. gross deferred tax assets and a valuation allowance of $116 million against the U.S. gross deferred tax asset, primarily related to capital loss carryovers. The change in the valuation allowance resulted in an increase of $458 million, a decrease of $8 million, and an increase of $124 million to income tax expense in 2023, 2022, and 2021, respectively. The majority of the $458 million increase in 2023 tax expense relates to a $257 million valuation allowance resulting from uncertainty regarding the realizability of a $257 million deferred tax asset established as a result of a non-U.S. tax legislative change. The remaining $201 million relates to other tax attribute carryforwards. If the Company determines that the likelihood of realization of existing deferred tax assets changes, a corresponding increase or decrease to valuation allowances will be recognized as an increase or reduction to income tax expense in the period that determination is made. As of December 31, 2023, the Company recorded a $542 million deferred tax liability on all unremitted foreign earnings based on estimated earnings and profits of approximately $15 billion as of the balance sheet date. 74 Honeywell International Inc. 74 Honeywell International Inc. 74 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "OTHER LIABILITIES December 31,20232022Income taxes$1,742 $1,939 Pension and other employee related1,342 1,306 Deferred income1,171 1,334 Operating lease liabilities897 775 Environmental costs414 393 Insurance248 289 Product warranties and performance guarantees37 38 Asset retirement obligations17 24 Other397 371 Total Other liabilities$6,265 $6,469 NOTE 15." - Reworded sentence: "At December 31, 2023, there were 28,946,133 and 781,768 shares of Honeywell common stock available for future grants under terms of the 2016 Plan and 2016 Directors Plan, respectively." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: Karen Mattimore, 57 **Key changes:** - Added sentence: "Ken West, 49 2024 (a)Also a Director." - Added sentence: "48 Honeywell International Inc." - Added sentence: "48 Honeywell International Inc." - Added sentence: "48 Honeywell International Inc." - Added sentence: "TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS" **Prior (2023):** 2020 Senior Vice President and Chief Human Resources Officer since June 2020. Vice President, Human Resources and Communications, Aerospace from February 2018 to June 2020. Vice President, Human Resources Services from April 2015 to February 2018. **Current (2024):** 2020 Senior Vice President and Chief Human Resources Officer since June 2020. Vice President, Human Resources and Communications, Aerospace from February 2018 to June 2020. Vice President, Human Resources Services from April 2015 to February 2018. Ken West, 49 2024 (a)Also a Director. 48 Honeywell International Inc. 48 Honeywell International Inc. 48 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## Modified: Tax (expense) benefit **Key changes:** - Removed sentence: "Year Ended December 31, 2021Affected Line in the Consolidated Statement of OperationsNet SalesCost ofProductsSoldCost ofServicesSoldSelling,General andAdministrativeExpensesOther(Income)ExpenseInterest and Other Financial ChargesTotalAmortization of pension and other postretirement benefit items: Actuarial losses recognized$ - $ - $ - $ - $7 $ - $7 Prior service (credit) recognized - - - - (116) - (116)Losses (gains) on cash flow hedges(5)(8)(2)(9) - - (24)Losses (gains) on excluded component of net investment hedges - - - - - (16)(16)Total before tax$(5)$(8)$(2)$(9)$(109)$(16)$(149)Tax expense (benefit)35 Total reclassifications for the period, net of tax$(114) Year Ended December 31, 2020Affected Line in the Consolidated Statement of OperationsNet SalesCost ofProductsSoldCost ofServicesSoldSelling,General andAdministrativeExpensesOther(Income)ExpenseInterest and Other Financial ChargesTotalAmortization of pension and other postretirement benefit items: Actuarial losses recognized$ - $ - $ - $ - $57 $ - $57 Prior service (credit) recognized - - - - (108) - (108)Losses (gains) on cash flow hedges3 (43)(11)4 (28) - (75)Losses (gains) on excluded component of net investment hedges - - - - - (18)(18)Total before tax$3 $(43)$(11)$4 $(79)$(18)$(144)Tax expense (benefit)36 Total reclassifications for the period, net of tax$(108) NOTE 18." - Reworded sentence: "Shares of common stock issued and outstanding or held in treasury are not liable to further calls or assessments." - Reworded sentence: "On April 24, 2023, the Board of Directors authorized the repurchase of up to a total of $10 billion of Honeywell common stock, including approximately $2.1 billion of remaining availability under the previously announced $10 billion share repurchase authorization." - Reworded sentence: "At December 31, 2023, there was no preferred stock outstanding." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** 93 Honeywell International Inc. 93 Honeywell International Inc. 93 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS **Key changes:** - Reworded sentence: "54Consolidated Statement of Operations55Consolidated Statement of Comprehensive Income56Consolidated Balance Sheet57Consolidated Statement of Cash Flows58Consolidated Statement of Shareowners' Equity59Note 1." **Prior (2023):** 52Consolidated Statement of Operations53Consolidated Statement of Comprehensive Income54Consolidated Balance Sheet55Consolidated Statement of Cash Flows56Consolidated Statement of Shareowners' Equity57Note 1. Summary of Significant Accounting Policies62Note 2. Acquisitions and Divestitures63Note 3. Revenue Recognition and Contracts with Customers66Note 4. Repositioning and Other Charges69Note 5. Income Taxes73Note 6. Inventories73Note 7. Property, Plant and Equipment - Net73Note 8. Goodwill and Other Intangible Assets - Net75Note 9. Long-term Debt and Credit Agreements77Note 10. Leases79Note 11. Derivative Instruments and Hedging Transactions82Note 12. Fair Value Measurements84Note 13. Accrued Liabilities85Note 14. Other Liabilities85Note 15. Stock-Based Compensation Plans88Note 16. Earnings Per Share89Note 17. Accumulated Other Comprehensive Income (Loss)91Note 18. Capital Stock92Note 19. Commitments and Contingencies98Note 20. Pension and Other Postretirement Benefits107Note 21. Other (Income) Expense108Note 22. Segment Financial Data110Note 23. Geographic Areas - Financial Data110Note 24. Supplemental Cash Flow Information111Report of Independent Registered Public Accounting Firm 52 Consolidated Statement of Operations 53 Consolidated Statement of Comprehensive Income 54 Consolidated Balance Sheet 55 Consolidated Statement of Cash Flows 56 Consolidated Statement of Shareowners' Equity 57 Note 1. Summary of Significant Accounting Policies 62 Note 2. Acquisitions and Divestitures 63 Note 3. Revenue Recognition and Contracts with Customers 66 Note 4. Repositioning and Other Charges 69 Note 5. Income Taxes 73 Note 6. Inventories 73 Note 7. Property, Plant and Equipment - Net 73 Note 8. Goodwill and Other Intangible Assets - Net 75 Note 9. Long-term Debt and Credit Agreements 77 Note 10. Leases 79 Note 11. Derivative Instruments and Hedging Transactions 82 Note 12. Fair Value Measurements 84 Note 13. Accrued Liabilities 85 Note 14. Other Liabilities 85 Note 15. Stock-Based Compensation Plans 88 Note 16. Earnings Per Share 89 Note 17. Accumulated Other Comprehensive Income (Loss) 91 Note 18. Capital Stock 92 Note 19. Commitments and Contingencies 98 Note 20. Pension and Other Postretirement Benefits 107 Note 21. Other (Income) Expense 108 Note 22. Segment Financial Data 110 Note 23. Geographic Areas - Financial Data 110 Note 24. Supplemental Cash Flow Information 111 Report of Independent Registered Public Accounting Firm 51 Honeywell International Inc. 51 Honeywell International Inc. 51 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** 54Consolidated Statement of Operations55Consolidated Statement of Comprehensive Income56Consolidated Balance Sheet57Consolidated Statement of Cash Flows58Consolidated Statement of Shareowners' Equity59Note 1. Summary of Significant Accounting Policies64Note 2. Acquisitions and Divestitures66Note 3. Revenue Recognition and Contracts with Customers69Note 4. Repositioning and Other Charges72Note 5. Income Taxes76Note 6. Inventories76Note 7. Property, Plant and Equipment - Net76Note 8. Goodwill and Other Intangible Assets - Net78Note 9. Long-term Debt and Credit Agreements80Note 10. Leases82Note 11. Derivative Instruments and Hedging Transactions85Note 12. Fair Value Measurements87Note 13. Accrued Liabilities88Note 14. Other Liabilities88Note 15. Stock-Based Compensation Plans91Note 16. Earnings Per Share92Note 17. Accumulated Other Comprehensive Income (Loss)94Note 18. Capital Stock95Note 19. Commitments and Contingencies101Note 20. Pension and Other Postretirement Benefits111Note 21. Other (Income) Expense111Note 22. Segment Financial Data114Note 23. Geographic Areas - Financial Data114Note 24. Supplemental Cash Flow Information115Report of Independent Registered Public Accounting Firm 54 Consolidated Statement of Operations 55 Consolidated Statement of Comprehensive Income 56 Consolidated Balance Sheet 57 Consolidated Statement of Cash Flows 58 Consolidated Statement of Shareowners' Equity 59 Note 1. Summary of Significant Accounting Policies 64 Note 2. Acquisitions and Divestitures 66 Note 3. Revenue Recognition and Contracts with Customers 69 Note 4. Repositioning and Other Charges 72 Note 5. Income Taxes 76 Note 6. Inventories 76 Note 7. Property, Plant and Equipment - Net 76 Note 8. Goodwill and Other Intangible Assets - Net 78 Note 9. Long-term Debt and Credit Agreements 80 Note 10. Leases 82 Note 11. Derivative Instruments and Hedging Transactions 85 Note 12. Fair Value Measurements 87 Note 13. Accrued Liabilities 88 Note 14. Other Liabilities 88 Note 15. Stock-Based Compensation Plans 91 Note 16. Earnings Per Share 92 Note 17. Accumulated Other Comprehensive Income (Loss) 94 Note 18. Capital Stock 95 Note 19. Commitments and Contingencies 101 Note 20. Pension and Other Postretirement Benefits 111 Note 21. Other (Income) Expense 111 Note 22. Segment Financial Data 114 Note 23. Geographic Areas - Financial Data 114 Note 24. Supplemental Cash Flow Information 115 Report of Independent Registered Public Accounting Firm 53 Honeywell International Inc. 53 Honeywell International Inc. 53 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: /S/ DELOITTE & TOUCHE LLP **Key changes:** - Reworded sentence: "Charlotte, North Carolina February 16, 2024 We have served as the Company's auditor since 2014." **Prior (2023):** Charlotte, North Carolina February 10, 2023 We have served as the Company's auditor since 2014. 112 Honeywell International Inc. 112 Honeywell International Inc. 112 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS **Current (2024):** Charlotte, North Carolina February 16, 2024 We have served as the Company's auditor since 2014. 116 Honeywell International Inc. 116 Honeywell International Inc. 116 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## Modified: ASBESTOS-RELATED LIABILITIES **Key changes:** - Reworded sentence: "Year Ended December 31, 2023Year Ended December 31, 2022Year Ended December 31, 2021BendixNARCOTotalBendixNARCOTotalBendixNARCOTotalBeginning of year$1,291 $1,325 $2,616 $1,372 $689 $2,061 $1,441 $779 $2,220 Accrual for update to estimated liability43 5 48 93 (634)(541)64 31 95 Change in estimated cost of future claims423 - 423 41 - 41 29 - 29 Update of expected resolution values for pending claims56 - 56 1 - 1 3 - 3 Asbestos-related liability payments(169)(5)(174)(216)(55)(271)(165)(121)(286)NARCO Buyout - (1,325)(1,325) - 1,325 1,325 - - - End of year$1,644 $ - $1,644 $1,291 $1,325 $2,616 $1,372 $689 $2,061" **Prior (2023):** Year Ended December 31, 2022Year Ended December 31, 2021Year Ended December 31, 2020BendixNARCOTotalBendixNARCOTotalBendixNARCOTotalBeginning of year$1,372 $689 $2,061 $1,441 $779 $2,220 $1,499 $858 $2,357 Accrual for update to estimated liability93 (634)(541)64 31 95 80 18 98 Change in estimated cost of future claims41 - 41 29 - 29 42 - 42 Update of expected resolution values for pending claims1 - 1 3 - 3 10 - 10 Asbestos-related liability payments(216)(55)(271)(165)(121)(286)(190)(97)(287)NARCO Buyout - 1,325 1,325 - - - - - - End of year$1,291 $1,325 $2,616 $1,372 $689 $2,061 $1,441 $779 $2,220 **Current (2024):** Year Ended December 31, 2023Year Ended December 31, 2022Year Ended December 31, 2021BendixNARCOTotalBendixNARCOTotalBendixNARCOTotalBeginning of year$1,291 $1,325 $2,616 $1,372 $689 $2,061 $1,441 $779 $2,220 Accrual for update to estimated liability43 5 48 93 (634)(541)64 31 95 Change in estimated cost of future claims423 - 423 41 - 41 29 - 29 Update of expected resolution values for pending claims56 - 56 1 - 1 3 - 3 Asbestos-related liability payments(169)(5)(174)(216)(55)(271)(165)(121)(286)NARCO Buyout - (1,325)(1,325) - 1,325 1,325 - - - End of year$1,644 $ - $1,644 $1,291 $1,325 $2,616 $1,372 $689 $2,061 --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "The following table sets forth fair value per share information, including related weighted average assumptions, used to determine compensation cost: Years Ended December 31,202320222021Weighted average fair value per share of options granted during the year1$38.84 $31.22 $32.42 AssumptionsExpected annual dividend yield2.50 %2.58 %2.31 %Expected volatility22.42 %23.05 %24.69 %Risk-free rate of return3.94 %1.97 %0.48 %Expected option term (years)4.864.744.541Estimated on date of grant using Black-Scholes option-pricing model." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: Carryforwards and Other Attributes **Key changes:** - Reworded sentence: "Total Many jurisdictions impose limitations on the timing and utilization of net operating loss and tax credit carryforwards." - Reworded sentence: "Unrecognized tax benefits for examinations in progress were $803 million, $640 million, and $592 million as of December 31, 2023, 2022, and 2021, respectively." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** Total Many jurisdictions impose limitations on the timing and utilization of net operating loss and tax credit carryforwards. Approximately $3,140 million of the non-U.S. net operating loss has no expiration period. The U.S. federal capital loss carryforward of $502 million expires in 2026. The remaining net operating loss, capital loss and credit carryforwards, and other tax attributes have expiration periods through 2043. Years Ended December 31,202320222021Change in unrecognized tax benefits Balance at beginning of year$1,086 $1,061 $991 Gross increases related to current period tax positions89 64 93 Gross increases related to prior periods tax positions181 31 39 Gross decreases related to prior periods tax positions - (19)(27)Decrease related to resolutions of audits with tax authorities(132)(3)(1)Expiration of the statute of limitations for the assessment of taxes(3)(8)(12)Foreign currency translation4 (40)(22)Balance at end of year$1,225 $1,086 $1,061 As of December 31, 2023, 2022, and 2021, there were $1,225 million, $1,086 million, and $1,061 million, respectively, of unrecognized tax benefits that if recognized would be recorded as a component of Tax expense. The following table summarizes tax years that remain subject to examination by major tax jurisdictions as of December 31, 2023: JurisdictionOpen Tax YearsExamination in progressExamination not yet initiatedU.S. Federal2017-20212022-2023U.S. State2013-20212022-2023China2013-20222023Germany2013-20202021-2023India2013-20202021-2023Puerto RicoN/A2020-2023Switzerland2019-20202021-2023United Kingdom2013-20212022-2023 Germany Based on the outcome of these examinations, or as a result of the expiration of statute of limitations for specific jurisdictions, it is reasonably possible that certain unrecognized tax benefits for tax positions taken on previously filed tax returns will materially change from those recorded as liabilities in the Company's financial statements. In addition, the outcome of these examinations may impact the valuation of certain deferred tax assets (such as net operating losses) in future periods. Unrecognized tax benefits for examinations in progress were $803 million, $640 million, and $592 million as of December 31, 2023, 2022, and 2021, respectively. Estimated interest and penalties related to the underpayment of income taxes are classified as a component of Tax expense in the Consolidated Statement of Operations and totaled $74 million, $5 million, and $79 million for the years ended December 31, 2023, 2022, and 2021, respectively. Accrued interest and penalties were $612 million, $557 million, and $580 million as of December 31, 2023, 2022, and 2021, respectively. 75 Honeywell International Inc. 75 Honeywell International Inc. 75 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: CONSOLIDATED STATEMENT OF CASH FLOWS **Key changes:** - Reworded sentence: "Years Ended December 31,202320222021 (Dollars in millions)Cash flows from operating activities Net income$5,672 $4,967 $5,610 Less: Net income attributable to noncontrolling interest14 1 68 Net income attributable to Honeywell5,658 4,966 5,542 Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activitiesDepreciation659 657 674 Amortization517 547 549 Gain on sale of non-strategic businesses and assets(5)(22)(102)Repositioning and other charges860 1,266 569 Net payments for repositioning and other charges(459)(512)(692)NARCO Buyout payment(1,325) - - Pension and other postretirement income(406)(510)(1,114)Pension and other postretirement benefit payments(38)(23)(43)Stock compensation expense202 188 217 Deferred income taxes153 (180)178 Other(837)(358)(28)Changes in assets and liabilities, net of the effects of acquisitions and divestituresAccounts receivable(42)(739)(8)Inventories(626)(440)(685)Other current assets17 232 (276)Accounts payable518 (155)744 Accrued liabilities494 357 513 Net cash provided by operating activities5,340 5,274 6,038 Cash flows from investing activitiesCapital expenditures(1,039)(766)(895)Proceeds from disposals of property, plant and equipment43 29 27 Increase in investments(560)(1,211)(2,373)Decrease in investments971 1,255 2,525 Receipts from Garrett Motion Inc. - 409 586 Receipts (payments) from settlements of derivative contracts6 369 192 Cash paid for acquisitions, net of cash acquired(718)(178)(1,326)Proceeds from sales of businesses, net of fees paid4 - 203 Net cash used for investing activities(1,293)(93)(1,061)Cash flows from financing activitiesProceeds from issuance of commercial paper and other short-term borrowings12,991 7,661 5,194 Payments of commercial paper and other short-term borrowings(13,663)(8,447)(5,190)Proceeds from issuance of common stock196 320 229 Proceeds from issuance of long-term debt2,986 2,953 2,517 Payments of long-term debt(1,731)(1,850)(4,917)Repurchases of common stock(3,715)(4,200)(3,380)Cash dividends paid(2,855)(2,719)(2,626)Other28 (48)(81)Net cash used for financing activities(5,763)(6,330)(8,254)Effect of foreign exchange rate changes on cash and cash equivalents14 (183)(39)Net decrease in cash and cash equivalents(1,702)(1,332)(3,316)Cash and cash equivalents at beginning of period9,627 10,959 14,275 Cash and cash equivalents at end of period$7,925 $9,627 $10,959 The Notes to Consolidated Financial Statements are an integral part of this statement.57 Honeywell International Inc." **Prior (2023):** Years Ended December 31,202220212020 (Dollars in millions)Cash flows from operating activities: Net income$4,967 $5,610 $4,865 Less: Net income attributable to the noncontrolling interest1 68 86 Net income attributable to Honeywell4,966 5,542 4,779 Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activities:Depreciation657 674 644 Amortization547 549 358 (Gain) loss on sale of non-strategic businesses and assets(22)(102)3 Repositioning and other charges1,266 569 575 Net payments for repositioning and other charges(512)(692)(833)Pension and other postretirement income(510)(1,114)(798)Pension and other postretirement benefit payments(23)(43)(47)Stock compensation expense188 217 168 Deferred income taxes(180)178 (175)Reimbursement receivables charge - - 509 Other(358)(28)(338)Changes in assets and liabilities, net of the effects of acquisitions and divestitures:Accounts receivable(739)(8)669 Inventories(440)(685)(67)Other current assets232 (276)191 Accounts payable(155)744 15 Accrued liabilities357 513 555 Net cash provided by operating activities5,274 6,038 6,208 Cash flows from investing activities:Expenditures for property, plant and equipment(766)(895)(906)Proceeds from disposals of property, plant and equipment29 27 57 Increase in investments(1,211)(2,373)(3,236)Decrease in investments1,255 2,525 3,508 Receipts from Garrett Motion Inc.409 586 - Receipts (payments) from settlements of derivative contracts369 192 (149)Cash paid for acquisitions, net of cash acquired(178)(1,326)(261)Proceeds from sales of businesses, net of fees paid - 203 - Net cash used for investing activities(93)(1,061)(987)Cash flows from financing activities:Proceeds from issuance of commercial paper and other short-term borrowings7,661 5,194 10,474 Payments of commercial paper and other short-term borrowings(8,447)(5,190)(10,400)Proceeds from issuance of common stock320 229 393 Proceeds from issuance of long-term debt2,953 2,517 10,125 Payments of long-term debt(1,850)(4,917)(4,308)Repurchases of common stock(4,200)(3,380)(3,714)Cash dividends paid(2,719)(2,626)(2,592)Other(48)(81)(59)Net cash used for financing activities(6,330)(8,254)(81)Effect of foreign exchange rate changes on cash and cash equivalents(183)(39)68 Net increase (decrease) in cash and cash equivalents(1,332)(3,316)5,208 Cash and cash equivalents at beginning of period10,959 14,275 9,067 Cash and cash equivalents at end of period$9,627 $10,959 $14,275 The Notes to Consolidated Financial Statements are an integral part of this statement. 55 Honeywell International Inc. 55 Honeywell International Inc. 55 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Years Ended December 31,202320222021 (Dollars in millions)Cash flows from operating activities Net income$5,672 $4,967 $5,610 Less: Net income attributable to noncontrolling interest14 1 68 Net income attributable to Honeywell5,658 4,966 5,542 Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activitiesDepreciation659 657 674 Amortization517 547 549 Gain on sale of non-strategic businesses and assets(5)(22)(102)Repositioning and other charges860 1,266 569 Net payments for repositioning and other charges(459)(512)(692)NARCO Buyout payment(1,325) - - Pension and other postretirement income(406)(510)(1,114)Pension and other postretirement benefit payments(38)(23)(43)Stock compensation expense202 188 217 Deferred income taxes153 (180)178 Other(837)(358)(28)Changes in assets and liabilities, net of the effects of acquisitions and divestituresAccounts receivable(42)(739)(8)Inventories(626)(440)(685)Other current assets17 232 (276)Accounts payable518 (155)744 Accrued liabilities494 357 513 Net cash provided by operating activities5,340 5,274 6,038 Cash flows from investing activitiesCapital expenditures(1,039)(766)(895)Proceeds from disposals of property, plant and equipment43 29 27 Increase in investments(560)(1,211)(2,373)Decrease in investments971 1,255 2,525 Receipts from Garrett Motion Inc. - 409 586 Receipts (payments) from settlements of derivative contracts6 369 192 Cash paid for acquisitions, net of cash acquired(718)(178)(1,326)Proceeds from sales of businesses, net of fees paid4 - 203 Net cash used for investing activities(1,293)(93)(1,061)Cash flows from financing activitiesProceeds from issuance of commercial paper and other short-term borrowings12,991 7,661 5,194 Payments of commercial paper and other short-term borrowings(13,663)(8,447)(5,190)Proceeds from issuance of common stock196 320 229 Proceeds from issuance of long-term debt2,986 2,953 2,517 Payments of long-term debt(1,731)(1,850)(4,917)Repurchases of common stock(3,715)(4,200)(3,380)Cash dividends paid(2,855)(2,719)(2,626)Other28 (48)(81)Net cash used for financing activities(5,763)(6,330)(8,254)Effect of foreign exchange rate changes on cash and cash equivalents14 (183)(39)Net decrease in cash and cash equivalents(1,702)(1,332)(3,316)Cash and cash equivalents at beginning of period9,627 10,959 14,275 Cash and cash equivalents at end of period$7,925 $9,627 $10,959 The Notes to Consolidated Financial Statements are an integral part of this statement.57 Honeywell International Inc. The Notes to Consolidated Financial Statements are an integral part of this statement.57 Honeywell International Inc. The Notes to Consolidated Financial Statements are an integral part of this statement. 57 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "The following table sets forth the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis: December 31, 2023December 31, 2022Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalAssets Foreign currency exchange contracts$ - $35 $ - $35 $ - $93 $ - $93 Available for sale investments63 217 - 280 87 559 - 646 Interest rate swap agreements - 18 - 18 - 16 - 16 Cross currency swap agreements - - - - - 90 - 90 Investments in equity securities22 - - 22 22 32 - 54 Right to HWI Net Sale Proceeds - - 9 9 - - 295 295 Total assets$85 $270 $9 $364 $109 $790 $295 $1,194 LiabilitiesForeign currency exchange contracts$ - $9 - $9 $ - $8 - $8 Interest rate swap agreements - 184 - 184 - 303 - 303 Commodity contracts - 1 - 1 - 1 - 1 Cross currency swap agreements - 145 - 145 - - - - Total liabilities$ - $339 $ - $339 $ - $312 $ - $312 The Company values foreign currency exchange contracts, interest rate swap agreements, cross currency swap agreements, and commodity contracts using broker quotations, or market transactions in either the listed or over-the-counter markets." - Reworded sentence: "The Company also holds investments in commercial paper, certificates of deposits, time deposits, and corporate debt securities that are designated as available for sale." - Reworded sentence: "government securities and investments in equity securities." - Reworded sentence: "The HWI Sale closed on February 16, 2023." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: INSURANCE RECOVERIES FOR ASBESTOS-RELATED LIABILITIES **Key changes:** - Reworded sentence: "Year Ended December 31, 2023Year Ended December 31, 2022Year Ended December 31, 2021BendixNARCOTotalBendixNARCOTotalBendixNARCOTotalBeginning of year$130 $135 $265 $142 $221 $363 $148 $254 $402 Probable insurance recoveries related to estimated liability11 - 11 5 2 7 7 - 7 Insurance receipts for asbestos-related liabilities(18)(21)(39)(17)(20)(37)(13)(33)(46)Insurance receivables settlements and write-offs - (26)(26) - (68)(68) - - - End of year$123 $88 $211 $130 $135 $265 $142 $221 $363 96 Honeywell International Inc." **Prior (2023):** Year Ended December 31, 2022Year Ended December 31, 2021Year Ended December 31, 2020BendixNARCOTotalBendixNARCOTotalBendixNARCOTotalBeginning of year$142 $221 $363 $148 $254 $402 $153 $281 $434 Probable insurance recoveries related to estimated liability5 2 7 7 - 7 10 - 10 Insurance receipts for asbestos-related liabilities(17)(20)(37)(13)(33)(46)(33)(25)(58)Insurance receivables settlements and write-offs - (68)(68) - - - 18 (2)16 End of year$130 $135 $265 $142 $221 $363 $148 $254 $402 NARCO and Bendix asbestos-related balances are included in the following balance sheet accounts: December 31,20222021Other current assets$41 $41 Insurance recoveries for asbestos-related liabilities224 322 $265 $363 Accrued liabilities$1,436 $261 Asbestos-related liabilities1,180 1,800 $2,616 $2,061 93 Honeywell International Inc. 93 Honeywell International Inc. 93 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Year Ended December 31, 2023Year Ended December 31, 2022Year Ended December 31, 2021BendixNARCOTotalBendixNARCOTotalBendixNARCOTotalBeginning of year$130 $135 $265 $142 $221 $363 $148 $254 $402 Probable insurance recoveries related to estimated liability11 - 11 5 2 7 7 - 7 Insurance receipts for asbestos-related liabilities(18)(21)(39)(17)(20)(37)(13)(33)(46)Insurance receivables settlements and write-offs - (26)(26) - (68)(68) - - - End of year$123 $88 $211 $130 $135 $265 $142 $221 $363 96 Honeywell International Inc. 96 Honeywell International Inc. 96 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: 2023 compared with 2022 **Key changes:** - Reworded sentence: "Net cash provided by operating activities increased by $66 million due to cash generated from operations, which included a favorable impact of working capital and the HWI Net Sale Proceeds of $275 million." - Reworded sentence: "•Mergers and acquisitions - we expect to spend $5.0 billion to complete the acquisition of Carrier Global Corporation's Global Access Solutions business, as announced on December 8, 2023, subject to customary closing conditions, including receipt of certain regulatory approvals." - Reworded sentence: "The impact of these programs is not material to our overall liquidity." - Reworded sentence: "In early 2023, we made payments of approximately $1.5 billion in connection with the NARCO Buyout and UOP Matters." - Reworded sentence: "BORROWINGS We leverage a variety of debt instruments to manage our overall borrowing costs." **Prior (2023):** Cash related to operating activities decreased by $764 million primarily due to an unfavorable impact to working capital. Working capital declined by $1,385 million, led by decreases in Accounts payable of $899 million, primarily due to a decrease in purchases of materials driven by lower sales volumes and a decrease in days payables outstanding, and increases in Accounts receivable of $731 million, primarily due to revenue growth mainly as a result of pricing actions. Operating cash flow was further reduced by the decrease in Net income attributable to Honeywell, partially offset by higher noncash adjustments for repositioning and other net charges for the NARCO Buyout and HWI Sale and charges related to the initial Suspension and Wind down of our business and operations in Russia, and a decrease in pension and other postretirement income. Cash related to investing activities increased by $968 million primarily due to a $1,148 million decrease in cash paid for acquisitions, net of cash acquired. Cash related to financing activities increased by $1,924 million primarily due to a $3,067 million decrease in the payments of long-term debt and $436 million increase in proceeds from the issuance of long-term debt, partially offset by a $820 million increase in repurchases of common stock and $790 million decrease in the net proceeds from the issuance of commercial paper and other short-term borrowings. CASH REQUIREMENTS AND ASSESSMENT OF CURRENT LIQUIDITY In addition to our normal operating cash requirements, we expect our primary cash requirements in 2023 to be as follows: •Capital expenditures - we expect to spend approximately $1.0 billion for capital expenditures in 2023 primarily for growth, production and capacity expansion, implementation of cost reduction measures, maintenance, and replacement. •Share repurchases - under our share repurchase program, $2.9 billion was available as of December 31, 2022, for additional share repurchases. We expect to repurchase outstanding shares from time to time to offset the dilutive impact of employee stock-based compensation plans, including option exercises, restricted unit vesting and matching contributions under our savings plans. Additionally, we will seek to reduce share count via share repurchases as and when attractive opportunities arise. The amount and timing of future repurchases may vary depending on market conditions and our level of operating, financing, and other investing activities. •Dividends - we increased our quarterly dividend rate by 5% to $1.03 per share of common stock effective with the fourth quarter 2022 dividend. We intend to continue to pay quarterly dividends in 2023. We continue to identify opportunities to improve our liquidity and working capital efficiency, which includes the extension of payment terms with our suppliers. In addition, multiple third-party financial institutions offer a voluntary supply chain financing (SCF) program which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on terms that are negotiated between the supplier and the respective financial institution. We agree on commercial terms for the goods and services we procure from our suppliers, including prices, quantities, and payment terms, regardless of whether the supplier elects to participate in the SCF program. Our suppliers' voluntary participation in the SCF program has no bearing on our payment terms and we have no economic interest in a supplier's decision to participate in the SCF program. Amounts due to our suppliers that elected to participate in the SCF programs are included in Accounts payable in the Consolidated Balance Sheet. At December 31, 2022, Accounts payable included approximately $700 million payable to suppliers who have elected to participate in the SCF program. Amounts settled with third-party financial institutions through the SCF program increased approximately $200 million for the year ended December 31, 2022. The increase for the year ended December 31, 2022, reflects a combination of an extension of payment terms with suppliers and increased utilization of our SCF program. All activity related to amounts due to suppliers that elected to participate in the SCF program is reflected in Cash flows from operating activities in our Consolidated Statement of Cash Flows. While access to SCF could decrease if our credit ratings are downgraded, we do not believe that changes in the availability of SCF will have a significant impact on our liquidity. The impact of this program is not material to our overall liquidity. We sell trade receivables to unaffiliated financial institutions without recourse. Transfers of the receivables are accounted for as sales and, accordingly, receivables sold are excluded from Accounts receivable - net in the Consolidated Balance Sheet and are reflected in Cash flows from operating activities in the Consolidated Statement of Cash Flows. The difference between the carrying amount of the trade receivables sold and the cash received is recorded in Cost of products and services sold in the Consolidated Statement of Operations. The impact of this program is not material to our overall liquidity. Finally, we continue to assess the relative strength of each business in our portfolio as to strategic fit, market position, profit, and cash flow contribution in order to identify target investment and acquisition opportunities in order to upgrade our combined portfolio. We identify acquisition candidates that will further our strategic plan and strengthen our existing core businesses. We also identify businesses that do not fit into our long-term strategic plan based on their market position, relative profitability, or growth potential. These businesses are considered for potential divestiture, restructuring, or other repositioning actions, subject to regulatory constraints. 39 Honeywell International Inc. 39 Honeywell International Inc. 39 Honeywell International Inc. TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTS In early 2023, we made payments of approximately $1.5 billion in connection with the NARCO Buyout and UOP Matters. During 2023, and pursuant to the NARCO Amended Buyout Agreement, we expect to receive approximately $295 million related to the HWI Sale. We believe these payments and receipts will not materially impact our liquidity position. See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information on the NARCO Buyout and UOP Matters. Based on past performance and current expectations, we believe that our operating cash flows will be sufficient to meet our future operating cash needs. Our available cash, committed credit lines, and access to the public debt and equity markets provide additional sources of short-term and long-term liquidity to fund current operations, debt maturities, and future investment opportunities. See Note 9 Long-term Debt and Credit Agreements of Notes to Consolidated Financial Statements for additional discussion of items impacting our liquidity. CONTRACTUAL OBLIGATIONS Following is a summary of our significant contractual obligations and probable liability payments at December 31, 2022: Total(6)(7)Payments by PeriodThereafter20232024 - 20252026 - 2027Long-term debt, including finance leases(1)$16,853 $1,730 $3,059 $2,523 $9,541 Interest payments on long-term debt, including finance leases4,523 472 844 738 2,469 Operating lease liabilities1,080 208 315 203 354 Purchase obligations(2)2,844 1,453 962 283 146 Estimated environmental liability payments(3)615 222 201 171 21 Asbestos-related liability payments(4)1,291 111 204 178 798 Asbestos insurance recoveries(5)(130)(18)(29)(21)(62) $27,076 $4,178 $5,556 $4,075 $13,267 **Current (2024):** Net cash provided by operating activities increased by $66 million due to cash generated from operations, which included a favorable impact of working capital and the HWI Net Sale Proceeds of $275 million. The favorable impact of working capital was driven by a $697 million decrease in Accounts receivable, due to higher cash receipts, and a $673 million increase in Accounts payable, due to increased material receipts and lower disbursements. This was partially offset by the $1,325 million payment pursuant to the NARCO Amended Buyout Agreement and $203 million payment for the settlement of UOP Matters. Net cash used for investing activities increased by $1,200 million due to a $540 million increase in cash paid for acquisitions, $409 million of cash receipts from Garrett Motion Inc. (Garrett) in 2022, and a $363 million decrease in cash receipts from settlements of derivative contracts, partially offset by a $367 million net decrease in investments. Net cash used for financing activities decreased by $567 million due to a $485 million decrease in repurchases of common stock and $119 million decrease in payments of long-term debt, partially offset by a $136 million increase in cash dividends paid. See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information on the NARCO Amended Buyout Agreement, HWI Net Sale Proceeds, and UOP Matters. CASH REQUIREMENTS AND ASSESSMENT OF CURRENT LIQUIDITY In addition to our normal operating cash requirements, we expect our primary cash requirements in 2024 to be as follows: •Capital expenditures - we expect to spend approximately $1.1 billion for capital expenditures in 2024 primarily for growth, production and capacity expansion, implementation of cost reduction measures, maintenance, and replacement. •Share repurchases - under our share repurchase program, $7.1 billion was available as of December 31, 2023, for additional share repurchases as authorized by the Board of Directors on April 24, 2023. We expect to repurchase outstanding shares from time to time to offset the dilutive impact of employee stock-based compensation plans, including option exercises, restricted unit vesting and matching contributions under our savings plans. Additionally, we will seek to reduce share count via share repurchases as and when attractive opportunities arise. The amount and timing of future repurchases may vary depending on market conditions and our level of operating, financing, and other investing activities. •Mergers and acquisitions - we expect to spend $5.0 billion to complete the acquisition of Carrier Global Corporation's Global Access Solutions business, as announced on December 8, 2023, subject to customary closing conditions, including receipt of certain regulatory approvals. We expect to evaluate and undertake other actions to optimize our portfolio, including executing on strategic bolt-on acquisitions over the course of 2024. •Dividends - we increased our quarterly dividend rate by 5% to $1.08 per share of common stock effective with the fourth quarter 2023 dividend. We intend to continue to pay quarterly dividends in 2024. We continually seek opportunities to improve our liquidity and working capital efficiency, which includes the extension of payment terms with our suppliers. In addition, we maintain agreements with third-party financial institutions that offer voluntary supply chain financing (SCF) programs to suppliers. The SCF programs enable suppliers, at their sole discretion, to sell their receivables to third-party financial institutions in order to receive payment on receivables earlier than the negotiated commercial terms between us and our suppliers. Supplier sale of receivables to third-party financial institutions is on terms negotiated between the supplier and the respective third-party financial institution. We agree on commercial terms for the goods and services we procure from our suppliers, including prices, quantities, and payment terms, which normally range between 60 and 120 days, regardless of whether the supplier elects to participate in the SCF programs. A suppliers' voluntary participation in the SCF programs has no bearing on our payment terms and we have no economic interest in a supplier's decision to participate in the SCF programs. We agree to pay participating third-party financial institutions the stated amounts of confirmed invoices from suppliers on the original maturity dates of the invoices. 39 Honeywell International Inc. 39 Honeywell International Inc. 39 Honeywell International Inc. TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTS Amounts outstanding related to SCF programs are included in Accounts payable in the Consolidated Balance Sheet. At December 31, 2023, Accounts payable included approximately $1,112 million payable to suppliers who have elected to participate in the SCF programs. Amounts settled with third-party financial institutions through the SCF programs increased approximately $700 million for the year ended December 31, 2023. The increase for the year ended December 31, 2023, reflects a combination of increased enrollment and utilization of our SCF programs. All activity related to amounts due to suppliers that elected to participate in the SCF programs is reflected in Cash flows from operating activities in our Consolidated Statement of Cash Flows. While access to SCF could decrease if our credit ratings are downgraded, we do not believe that changes in the availability of SCF will have a significant impact on our liquidity. The impact of these programs is not material to our overall liquidity. We sell trade receivables to unaffiliated financial institutions with limited or no recourse. Transfers of the receivables are accounted for as sales and, accordingly, receivables sold are excluded from Accounts receivable - net in the Consolidated Balance Sheet and are reflected in Cash flows from operating activities in the Consolidated Statement of Cash Flows. The difference between the carrying amount of the trade receivables sold and the cash received is recorded in Cost of products and services sold in the Consolidated Statement of Operations. The impact of this program is not material to our overall liquidity. Finally, we continue to assess the relative strength of each business in our portfolio as to strategic fit, market position, profit, and cash flow contribution in order to identify target investment and acquisition opportunities in order to upgrade our combined portfolio. We identify acquisition candidates that will further our strategic plan and strengthen our existing core businesses. We also identify businesses that do not fit into our long-term strategic plan based on their market position, relative profitability, or growth potential. These businesses are considered for potential divestiture, restructuring, or other repositioning actions, subject to regulatory constraints. In early 2023, we made payments of approximately $1.5 billion in connection with the NARCO Buyout and UOP Matters. Pursuant to the NARCO Amended Buyout Agreement, in 2023 we received proceeds from the HWI Sale in the amount of $275 million. See Note 12 Fair Value Measurements of Notes to Consolidated Financial Statements for additional discussion related to the fair value of future proceeds from the HWI Sale. Based on past performance and current expectations, we believe that our operating cash flows will be sufficient to meet our future operating cash needs. Our available cash, committed credit lines, and access to the public debt and equity markets provide additional sources of short-term and long-term liquidity to fund current operations, debt maturities, and future investment opportunities. See Note 9 Long-term Debt and Credit Agreements of Notes to Consolidated Financial Statements for additional discussion of items impacting our liquidity. BORROWINGS We leverage a variety of debt instruments to manage our overall borrowing costs. As of December 31, 2023, and 2022, our total borrowings were $20.4 billion and $19.6 billion, respectively. December 31,20232022Commercial paper$2,083 $2,715 Variable rate notes22 22 Fixed rate notes18,530 17,086 Other219 267 Fair value of hedging instruments(166)(287)Debt issuance costs(245)(233)Total borrowings$20,443 $19,570 A primary source of liquidity is our ability to access the corporate bond markets. Through these markets, we issue a variety of long-term fixed rate notes, in a variety of currencies, to manage our overall funding costs. Another primary source of liquidity is our ability to access the commercial paper market. Commercial paper notes are sold at a discount or premium and have a maturity of not more than 365 days from date of issuance. Borrowings under the commercial paper program are available for general corporate purposes as well as for financing acquisitions. The weighted average interest rate on commercial paper and other short-term borrowings outstanding was 4.29% and 3.29% as of December 31, 2023, and 2022, respectively. 40 Honeywell International Inc. 40 Honeywell International Inc. 40 Honeywell International Inc. TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTS We also have the following revolving credit agreements: •A $1.5 billion 364-day credit agreement (the 364-Day Credit Agreement) with a syndicate of banks, dated as of March 20, 2023. Amounts borrowed under the 364-Day Credit Agreement are required to be repaid no later than March 18, 2024, 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 18, 2025, or (ii) the 364-Day Credit Agreement is terminated earlier pursuant to its terms. The 364-Day Credit Agreement replaced the previously reported $1.5 billion 364-day credit agreement dated as of March 24, 2022, which was terminated in accordance with its terms effective March 20, 2023. As of December 31, 2023, there were no outstanding borrowings under our 364-Day Credit Agreement. •A $4.0 billion five-year credit agreement (the 5-Year Credit Agreement) with a syndicate of banks, dated as of March 20, 2023. Commitments under the 5-Year Credit Agreement can be increased pursuant to the terms of the 5-Year Credit Agreement to an aggregate amount not to exceed $4.5 billion. The 5-Year Credit Agreement amended and restated the previously reported $4.0 billion amended and restated five-year credit agreement dated as of March 24, 2022. As of December 31, 2023, there were no outstanding borrowings under our 5-Year Credit Agreement. We also have a current shelf registration statement filed with the SEC under which we may issue additional debt securities, common stock, and preferred stock that may be offered in one or more offerings on terms to be determined at the time of the offering. We anticipate that net proceeds of any offering would be used for general corporate purposes, including repayment of existing indebtedness, share repurchases, capital expenditures, and acquisitions. 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 December 31, 2023, S&P Global Inc. (S&P), Fitch Ratings Inc. (Fitch), and Moody's Investor Service (Moody's) have ratings on our debt set forth in the table below: S&PFitchMoody'sOutlookStableStablePositiveShort-termA-1F1P1Long-termAAA2 On September 20, 2023, Moody's affirmed all credit ratings of the Company and revised their credit rating outlook from stable to positive. 41 Honeywell International Inc. 41 Honeywell International Inc. 41 Honeywell International Inc. TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTS CONTRACTUAL OBLIGATIONS Following is a summary of our significant contractual obligations and probable liability payments at December 31, 2023: Payments by PeriodTotal6,720242025 - 20262027 - 2028ThereafterLong-term debt, including finance leases1$18,358 $1,796 $2,842 $3,245 $10,475 Interest payments on long-term debt, including finance leases4,995 568 1,037 893 2,497 Operating lease liabilities1,241 222 340 236 443 Purchase obligations23,004 1,543 1,144 265 52 Estimated environmental liability payments3641 227 211 153 50 Asbestos-related liability payments41,644 154 278 225 987 Asbestos insurance recoveries5(123)(16)(24)(19)(64) Total contractual obligations$29,760 $4,494 $5,828 $4,998 $14,440 1Assumes all long-term debt is outstanding until scheduled maturity.2Purchase obligations are entered into with various vendors in the normal course of business and are consistent with our expected requirements.3The payment amounts in the table only reflect the environmental liabilities which are probable and reasonably estimable as of December 31, 2023.4These amounts are estimates of asbestos-related cash payments for Bendix Friction Materials (Bendix) based on our asbestos-related liabilities which are probable and reasonably estimable as of December 31, 2023. See Asbestos Matters in Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information.5These amounts represent our insurance recoveries that are deemed probable for asbestos-related liabilities as of December 31, 2023. See Asbestos Matters in Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information.6The table excludes tax liability payments, including those for unrecognized tax benefits. See Note 5 Income Taxes of Notes to Consolidated Financial Statements for additional information.7The table excludes expected proceeds from the indemnification and reimbursement agreements entered into with Resideo Technologies, Inc. (Resideo). See Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for additional information. Total6,7 --- ## Modified: CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY **Key changes:** - Reworded sentence: "Years Ended December 31,202320222021Shares$Shares$Shares$ (In millions, except per share amounts)Common stock, par value957.6 958 957.6 958 957.6 958 Additional paid-in capitalBeginning balance8,564 8,141 7,292 Issued for employee savings and option plans214 235 184 Stock compensation expense202 188 217 Impact of Quantinuum contribution82 - 448 Ending balance9,062 8,564 8,141 Treasury stockBeginning balance(290.0)(34,443)(272.8)(30,462)(260.8)(27,229)Reacquired stock or repurchases of common stock(19.2)(3,715)(21.9)(4,200)(15.8)(3,380)Issued for employee savings and option plans3.4 150 4.7 219 3.8 147 Ending balance(305.8)(38,008)(290.0)(34,443)(272.8)(30,462)Retained earningsBeginning balance45,093 42,827 39,905 Net income attributable to Honeywell5,658 4,966 5,542 Dividends on common stock(2,772)(2,700)(2,620)Ending balance47,979 45,093 42,827 Accumulated other comprehensive income (loss)Beginning balance(3,475)(2,895)(3,377)Foreign exchange translation adjustment(269)(354)302 Pension and other postretirement benefit adjustments(407)(233)186 Changes in fair value of available for sale investments5 (8)(3)Changes in fair value of cash flow hedges11 15 (3)Ending balance(4,135)(3,475)(2,895)Noncontrolling interestBeginning balance622 673 241 Acquisitions, divestitures, and other(5) - 397 Net income attributable to noncontrolling interest14 1 68 Foreign exchange translation adjustment(5)(18)(4)Dividends paid(107)(48)(33)Contributions from noncontrolling interest holders59 14 4 Ending balance578 622 673 Total shareowners' equity651.8 16,434 667.6 17,319 684.8 19,242 Cash dividends per share of common stock$4.17 $3.97 $3.77 Impact of Quantinuum contribution The Notes to Consolidated Financial Statements are an integral part of this statement.58 Honeywell International Inc." **Prior (2023):** Years Ended December 31,202220212020Shares$Shares$Shares$ (in millions, except per share amounts)Common stock, par value957.6 958 957.6 958 957.6 958 Additional paid-in capitalBeginning balance8,141 7,292 6,876 Issued for employee savings and option plans235 184 248 Stock-based compensation expense188 217 168 Impact of Quantinuum contribution - 448 - Ending balance8,564 8,141 7,292 Treasury stockBeginning balance(272.8)(30,462)(260.8)(27,229)(246.5)(23,836)Reacquired stock or repurchases of common stock(21.9)(4,200)(15.8)(3,380)(20.7)(3,714)Issued for employee savings and option plans4.7 219 3.8 147 6.4 321 Ending balance(290.0)(34,443)(272.8)(30,462)(260.8)(27,229)Retained earningsBeginning balance42,827 39,905 37,693 Net income attributable to Honeywell4,966 5,542 4,779 Dividends on common stock(2,700)(2,620)(2,567)Ending balance45,093 42,827 39,905 Accumulated other comprehensive income (loss)Beginning balance(2,895)(3,377)(3,197)Foreign exchange translation adjustment(354)302 (214)Pension and other postretirement benefit adjustments(233)186 74 Changes in fair value of available for sale investments(8)(3)4 Changes in fair value of cash flow hedges15 (3)(44)Ending balance(3,475)(2,895)(3,377)Noncontrolling interestBeginning balance673 241 212 Acquisitions, divestitures, and other - 397 (6)Net income attributable to noncontrolling interest1 68 86 Foreign exchange translation adjustment(18)(4)3 Dividends paid(48)(33)(54)Contributions from noncontrolling interest holders14 4 - Ending balance622 673 241 Total shareowners' equity667.6 17,319 684.8 19,242 696.8 17,790 Cash dividends per share of common stock$3.970 $3.770 $3.630 Impact of Quantinuum contribution The Notes to Consolidated Financial Statements are an integral part of this statement. 56 Honeywell International Inc. 56 Honeywell International Inc. 56 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Years Ended December 31,202320222021Shares$Shares$Shares$ (In millions, except per share amounts)Common stock, par value957.6 958 957.6 958 957.6 958 Additional paid-in capitalBeginning balance8,564 8,141 7,292 Issued for employee savings and option plans214 235 184 Stock compensation expense202 188 217 Impact of Quantinuum contribution82 - 448 Ending balance9,062 8,564 8,141 Treasury stockBeginning balance(290.0)(34,443)(272.8)(30,462)(260.8)(27,229)Reacquired stock or repurchases of common stock(19.2)(3,715)(21.9)(4,200)(15.8)(3,380)Issued for employee savings and option plans3.4 150 4.7 219 3.8 147 Ending balance(305.8)(38,008)(290.0)(34,443)(272.8)(30,462)Retained earningsBeginning balance45,093 42,827 39,905 Net income attributable to Honeywell5,658 4,966 5,542 Dividends on common stock(2,772)(2,700)(2,620)Ending balance47,979 45,093 42,827 Accumulated other comprehensive income (loss)Beginning balance(3,475)(2,895)(3,377)Foreign exchange translation adjustment(269)(354)302 Pension and other postretirement benefit adjustments(407)(233)186 Changes in fair value of available for sale investments5 (8)(3)Changes in fair value of cash flow hedges11 15 (3)Ending balance(4,135)(3,475)(2,895)Noncontrolling interestBeginning balance622 673 241 Acquisitions, divestitures, and other(5) - 397 Net income attributable to noncontrolling interest14 1 68 Foreign exchange translation adjustment(5)(18)(4)Dividends paid(107)(48)(33)Contributions from noncontrolling interest holders59 14 4 Ending balance578 622 673 Total shareowners' equity651.8 16,434 667.6 17,319 684.8 19,242 Cash dividends per share of common stock$4.17 $3.97 $3.77 Impact of Quantinuum contribution The Notes to Consolidated Financial Statements are an integral part of this statement.58 Honeywell International Inc. The Notes to Consolidated Financial Statements are an integral part of this statement.58 Honeywell International Inc. The Notes to Consolidated Financial Statements are an integral part of this statement. 58 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) **Key changes:** - Reworded sentence: "December 31,20232022Cumulative foreign exchange translation adjustment$(3,101)$(2,832)Pension and other postretirement benefit adjustments(1,055)(648)Fair value adjustments of available for sale investments(2)(7)Fair value adjustments of cash flow hedges23 12 Total Accumulated other comprehensive income (loss)$(4,135)$(3,475) 92 Honeywell International Inc." **Prior (2023):** December 31,20222021Cumulative foreign exchange translation adjustment$(2,832)$(2,478)Pension and other postretirement benefit adjustments(648)(415)Fair value adjustments of available for sale investments(7)1 Fair value adjustments of designated cash flow hedges12 (3) $(3,475)$(2,895) 89 Honeywell International Inc. 89 Honeywell International Inc. 89 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** December 31,20232022Cumulative foreign exchange translation adjustment$(3,101)$(2,832)Pension and other postretirement benefit adjustments(1,055)(648)Fair value adjustments of available for sale investments(2)(7)Fair value adjustments of cash flow hedges23 12 Total Accumulated other comprehensive income (loss)$(4,135)$(3,475) 92 Honeywell International Inc. 92 Honeywell International Inc. 92 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: December 31,20232022Accrued liabilities$182 $175 Other liabilities37 38 Total obligations for product warranties and product performance guarantees$219 $213 **Key changes:** - Removed sentence: "In the normal course of business, the Company issues product warranties and product performance guarantees." - Removed sentence: "The Company accrues for the estimated cost of product warranties and performance guarantees based on contract terms and historical experience at the time of sale." - Removed sentence: "Adjustments to initial obligations for warranties and guarantees are made as changes to the obligations become reasonably estimable." - Removed sentence: "The following table summarizes information concerning the Company's recorded obligations for product warranties and product performance guarantees: Years Ended December 31,202220212020Beginning of year$223 $243 $269 Accruals for warranties/guarantees issued during the year117 146 164 Adjustment of pre-existing warranties/guarantees(12)(7)(18)Settlement of warranty/guarantee claims(115)(159)(172)End of year$213 $223 $243 Product warranties and product performance guarantees are included in the following balance sheet accounts: December 31,20222021Accrued liabilities$175 $180 Other liabilities38 43 $213 $223 NOTE 20." - Reworded sentence: "The Company sponsors postretirement benefit plans that provide health care benefits and life insurance coverage mainly to U.S." **Prior (2023):** In the normal course of business, the Company issues product warranties and product performance guarantees. The Company accrues for the estimated cost of product warranties and performance guarantees based on contract terms and historical experience at the time of sale. Adjustments to initial obligations for warranties and guarantees are made as changes to the obligations become reasonably estimable. The following table summarizes information concerning the Company's recorded obligations for product warranties and product performance guarantees: Years Ended December 31,202220212020Beginning of year$223 $243 $269 Accruals for warranties/guarantees issued during the year117 146 164 Adjustment of pre-existing warranties/guarantees(12)(7)(18)Settlement of warranty/guarantee claims(115)(159)(172)End of year$213 $223 $243 Product warranties and product performance guarantees are included in the following balance sheet accounts: December 31,20222021Accrued liabilities$175 $180 Other liabilities38 43 $213 $223 NOTE 20. PENSION AND OTHER POSTRETIREMENT BENEFITS The Company sponsors a number of both funded and unfunded U.S. and non-U.S. defined benefit pension plans. Pension benefits for many of the Company's U.S. employees are provided through non-contributory, qualified, and non-qualified defined benefit plans. All non-union hourly and salaried employees joining Honeywell for the first time after December 31, 2012, are not eligible to participate in Honeywell's U.S. defined benefit pension plans. The Company also sponsors defined benefit pension plans which cover non-U.S. employees who are not U.S. citizens, in certain jurisdictions, principally the UK, Netherlands, Germany, and Canada. Other pension plans outside of the U.S. are not material to the Company either individually or in the aggregate. The Company also sponsors postretirement benefit plans that provide health care benefits and life insurance coverage mainly to U.S. eligible retirees. None of Honeywell's U.S. employees are eligible for a retiree medical subsidy from the Company. In addition, the vast majority of Honeywell's U.S. retirees either have no Company subsidy or have a fixed-dollar subsidy amount. This significantly limits the Company's exposure to the impact of future health care cost increases. The retiree medical and life insurance plans are not funded. Claims and expenses are paid from the Company's cash flows from operations. 98 Honeywell International Inc. 98 Honeywell International Inc. 98 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** NOTE 20. PENSION AND OTHER POSTRETIREMENT BENEFITS The Company sponsors a number of both funded and unfunded U.S. and non-U.S. defined benefit pension plans. Pension benefits for many of the Company's U.S. employees are provided through non-contributory, qualified, and non-qualified defined benefit plans. All non-union hourly and salaried employees joining Honeywell for the first time after December 31, 2012, are not eligible to participate in Honeywell's U.S. defined benefit pension plans. The Company also sponsors defined benefit pension plans which cover non-U.S. employees who are not U.S. citizens, in certain jurisdictions, principally the UK, Netherlands, Germany, and Canada. Other pension plans outside of the U.S. are not material to the Company either individually or in the aggregate. The Company sponsors postretirement benefit plans that provide health care benefits and life insurance coverage mainly to U.S. eligible retirees. None of Honeywell's U.S. employees are eligible for a retiree medical subsidy from the Company. In addition, the vast majority of Honeywell's U.S. retirees either have no Company subsidy or have a fixed-dollar subsidy amount. This significantly limits the Company's exposure to the impact of future health care cost increases. The retiree medical and life insurance plans are not funded. Claims and expenses are paid from the Company's cash flows from operations. 101 Honeywell International Inc. 101 Honeywell International Inc. 101 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: Our business, reputation, and financial performance may be materially impacted by cybersecurity attacks on our information technology infrastructure and products. **Key changes:** - Reworded sentence: "Global cybersecurity threats and incidents can range from uncoordinated individual attempts to gain unauthorized access to IT systems to sophisticated and targeted measures known as advanced persistent threats, directed at the Company, its products, its customers, and/or its third party software and service providers, including cloud providers." - Reworded sentence: "We seek to deploy comprehensive measures to deter, prevent, detect, respond to, and mitigate these threats, including identity and access controls, data protection, vulnerability assessments, continuous monitoring of our IT networks and systems, and maintenance of backup and protective systems." - Reworded sentence: "We cannot be certain that our cybersecurity insurance coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim." **Prior (2023):** Cybersecurity is a critical component of the Company's enterprise risk management program. Global cybersecurity threats and incidents can range from uncoordinated individual attempts to gain unauthorized access to information technology (IT) systems to sophisticated and targeted measures known as advanced persistent threats, directed at the Company, its products, its customers, and/or its third party service providers, including cloud providers. Our customers, including the U.S. government, are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands. While we have experienced, and expect to continue to experience, these types of threats and incidents, none of them to date have been material to the Company. We seek to deploy comprehensive measures to deter, prevent, detect, respond to and mitigate these threats, including identity and access controls, data protection, vulnerability assessments, continuous monitoring of our IT networks and systems and maintenance of backup and protective systems. Despite these efforts, cybersecurity incidents (against us or parties with whom we contract), depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties), theft of funds, and the disruption of business operations. The potential consequences of a material cybersecurity incident and its effects include financial loss, reputational damage, litigation with third parties, theft of intellectual property, fines levied by the Federal Trade Commission or other government agencies, diminution in the value of our investment in research, development and engineering, and increased cybersecurity protection and remediation costs due to the increasing sophistication and proliferation of threats, which in turn could adversely affect our competitiveness and results of operations. In addition, cybersecurity laws and regulations continue to evolve, and are increasingly demanding, both in the U.S. and globally, which adds compliance complexity and may increase our costs of compliance and expose us to reputational damage or litigation, monetary damages, regulatory enforcement actions, or fines in one or more jurisdictions. While we carry cyber insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. **Current (2024):** Cybersecurity is a critical component of the Company's enterprise risk management program. Global cybersecurity threats and incidents can range from uncoordinated individual attempts to gain unauthorized access to IT systems to sophisticated and targeted measures known as advanced persistent threats, directed at the Company, its products, its customers, and/or its third party software and service providers, including cloud providers. Our customers, including the U.S. government, are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands. While we have experienced, and expect to continue to experience, these types of threats and incidents, none of them to date have been material to the Company. We seek to deploy comprehensive measures to deter, prevent, detect, respond to, and mitigate these threats, including identity and access controls, data protection, vulnerability assessments, continuous monitoring of our IT networks and systems, and maintenance of backup and protective systems. Despite these efforts, cybersecurity incidents (against us, parties with whom we contract, or software used in our business), including incidents due to human error, third-party action, including actions of foreign actors, which risk may be exacerbated by the current Russia-Ukraine and Israel-Hamas conflicts and U.S. and international response, insider attacks, phishing or denial-of-service attacks, ransomware or other malware, social engineering, malfeasance, other unauthorized physical or electronic access, or other vulnerabilities, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties), theft of funds, and the disruption of business operations. In addition, the techniques used to obtain unauthorized access to sensitive data continue to evolve and become more sophisticated and may not be recognized until launched against a target; accordingly, we may be unable to anticipate these techniques or implement adequate preventative measures, and future cybersecurity incidents could go undetected and persist for an extended period of time. Furthermore, to the extent artificial intelligence capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and craft increasingly sophisticated cybersecurity attacks, and vulnerabilities may be introduced from the use of artificial intelligence by us, our financial services providers and other vendors and third-party providers. Our customers, partners (including our suppliers), subcontractors, and other third parties to whom we entrust confidential data, and on whom we rely to provide products and services, face similar threats and growing requirements. We depend on such parties to implement adequate controls and safeguards to protect against and report cyber incidents. If such parties fail to deter, detect, or report cybersecurity incidents in a timely manner, we may suffer from financial and other harm, including to our information, operations, performance, employees, and reputation. 33 Honeywell International Inc. 33 Honeywell International Inc. 33 Honeywell International Inc. TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTSRISK FACTORS TABLE OF CONTENTS The potential consequences of a material cybersecurity incident and its effects include financial loss, reputational damage, litigation with third parties, theft of intellectual property, fines levied by the Federal Trade Commission or other government agencies, diminution in the value of our investment in research, development, and engineering, and increased cybersecurity protection and remediation costs due to the increasing sophistication and proliferation of threats, which in turn could have a material impact on our competitiveness, business, financial condition, and results of operations. In addition, cybersecurity laws and regulations continue to evolve, and are increasingly demanding, both in the U.S. and globally, which adds compliance complexity and may increase our costs of compliance and expose us to reputational damage or litigation, monetary damages, regulatory enforcement actions, or fines in one or more jurisdictions. We cannot be certain that our cybersecurity insurance coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. --- ## Modified: CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME **Key changes:** - Reworded sentence: "Years Ended December 31,202320222021 (Dollars in millions)Net income$5,672 $4,967 $5,610 Other comprehensive income (loss), net of taxForeign exchange translation adjustment(274)(372)302 Actuarial gains (losses) recognized(468)(452)256 Prior service credit recognized - - 7 Prior service credit recognized during year(48)(64)(87)Actuarial losses recognized during year118 454 5 Foreign exchange translation and other(9)(171)5 Pension and other postretirement benefit adjustments(407)(233)186 Changes in fair value of available for sale investments5 (8)(3)Cash flow hedges recognized in other comprehensive income (loss)60 71 17 Less: Reclassification adjustment for gains included in net income49 56 20 Changes in fair value of cash flow hedges11 15 (3)Other comprehensive income (loss), net of tax(665)(598)482 Comprehensive income5,007 4,369 6,092 Less: Comprehensive income (loss) attributable to the noncontrolling interest9 (17)64 Comprehensive income attributable to Honeywell$4,998 $4,386 $6,028 The Notes to Consolidated Financial Statements are an integral part of this statement.55 Honeywell International Inc." **Prior (2023):** Years Ended December 31,202220212020 (Dollars in millions)Net income$4,967 $5,610 $4,865 Other comprehensive income (loss), net of taxForeign exchange translation adjustment(372)302 (211)Actuarial gains (losses) recognized(452)256 91 Prior service credit recognized - 7 47 Prior service credit recognized during year(64)(87)(82)Actuarial losses recognized during year454 5 41 Foreign exchange translation and other(171)5 (23)Pension and other postretirement benefit adjustments(233)186 74 Changes in fair value of available for sale investments(8)(3)4 Cash flow hedges recognized in other comprehensive income71 17 10 Less: Reclassification adjustment for gains included in net income56 20 54 Changes in fair value of cash flow hedges15 (3)(44)Other comprehensive income (loss), net of tax(598)482 (177)Comprehensive income4,369 6,092 4,688 Less: Comprehensive income (loss) attributable to the noncontrolling interest(17)64 89 Comprehensive income attributable to Honeywell$4,386 $6,028 $4,599 The Notes to Consolidated Financial Statements are an integral part of this statement. 53 Honeywell International Inc. 53 Honeywell International Inc. 53 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Years Ended December 31,202320222021 (Dollars in millions)Net income$5,672 $4,967 $5,610 Other comprehensive income (loss), net of taxForeign exchange translation adjustment(274)(372)302 Actuarial gains (losses) recognized(468)(452)256 Prior service credit recognized - - 7 Prior service credit recognized during year(48)(64)(87)Actuarial losses recognized during year118 454 5 Foreign exchange translation and other(9)(171)5 Pension and other postretirement benefit adjustments(407)(233)186 Changes in fair value of available for sale investments5 (8)(3)Cash flow hedges recognized in other comprehensive income (loss)60 71 17 Less: Reclassification adjustment for gains included in net income49 56 20 Changes in fair value of cash flow hedges11 15 (3)Other comprehensive income (loss), net of tax(665)(598)482 Comprehensive income5,007 4,369 6,092 Less: Comprehensive income (loss) attributable to the noncontrolling interest9 (17)64 Comprehensive income attributable to Honeywell$4,998 $4,386 $6,028 The Notes to Consolidated Financial Statements are an integral part of this statement.55 Honeywell International Inc. The Notes to Consolidated Financial Statements are an integral part of this statement.55 Honeywell International Inc. The Notes to Consolidated Financial Statements are an integral part of this statement. 55 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "Year Ended December 31, 2021Net SalesCost ofProducts SoldCost ofServices SoldSelling, General andAdministrative ExpensesOther(Income) ExpenseInterest and OtherFinancial Charges$34,392 $17,082 $4,979 $4,798 $(1,378)$343 Gain or (loss) on cash flow hedgesForeign currency exchange contractsAmount reclassified from accumulated other comprehensive income (loss) into income5 8 2 9 - - Gain or (loss) on fair value hedgesInterest rate swap agreementsHedged items - - - - - 135 Derivatives designated as hedges - - - - - (135)Gain or (loss) on net investment hedgesForeign currency exchange contractsAmount excluded from effectiveness testing recognized in earnings using an amortization approach - - - - - 16 Gain or (loss) on derivatives not designated as hedging instrumentsForeign currency exchange contracts - - - - 195 - Cost of" **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Income) Expense **Key changes:** - Reworded sentence: "As of December 31, 2023, the Company estimates that approximately $24 million of net derivative gains related to its cash flow hedges included in Accumulated other comprehensive income (loss) will be reclassified into earnings within the next 12 months." - Reworded sentence: "85 Honeywell International Inc." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** Year Ended December 31, 2022Net SalesCost ofProducts SoldCost ofServices SoldSelling, General andAdministrative ExpensesOther(Income) ExpenseInterest and OtherFinancial Charges$35,466 $16,955 $5,392 $5,214 $(366)$414 Gain or (loss) on cash flow hedgesForeign currency exchange contractsAmount reclassified from accumulated other comprehensive income (loss) into income13 50 14 (3) - - Commodity ContractsAmount reclassified from accumulated other comprehensive income (loss) into income - (2) - - - - Gain or (loss) on fair value hedgesInterest rate swap agreementsHedged items - - - - - 347 Derivatives designated as hedges - - - - - (347)Gain or (loss) on net investment hedgesForeign currency exchange contractsAmount excluded from effectiveness testing recognized in earnings using an amortization approach - - - - - 13 Gain or (loss) on derivatives not designated as hedging instrumentsForeign currency exchange contracts - - - - 351 - Cost of --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "Years Ended December 31,202320222021Capital expendituresAerospace$310 $246 $284 Honeywell Building Technologies79 74 62 Performance Materials and Technologies462 318 265 Safety and Productivity Solutions106 50 190 Corporate and All Other82 78 94 Total capital expenditures$1,039 $766 $895 Years Ended December 31,20232022Total assetsAerospace$12,976 $12,189 Honeywell Building Technologies6,723 6,599 Performance Materials and Technologies19,732 17,887 Safety and Productivity Solutions10,342 10,892 Corporate and All Other11,752 14,708 Total assets$61,525 $62,275 A reconciliation of segment profit to consolidated income before taxes are as follows: Years Ended December 31,202320222021Segment profit$8,304 $7,689 $7,212 Interest and other financial charges(765)(414)(343)Interest income321 138 102 Stock compensation expense1(202)(188)(217)Pension ongoing income2528 993 1,083 Pension mark-to-market expense(153)(523)(40)Other postretirement income229 41 71 Repositioning and other charges3(860)(1,266)(569)Other expense4(43)(91)(64)Income before taxes$7,159 $6,379 $7,235 1Amounts included in Selling, general and administrative expenses.2Amounts included in Cost of products and services sold (service cost component), Selling, general and administrative expenses (service cost component), Research and development expenses (service cost component), and Other (income) expense (non-service cost component).3Amounts included in Cost of products and services sold, Selling, general and administrative expenses, and Other (income) expense.4Amounts include the other components of Other (income) expense not included within other categories in this reconciliation." - Reworded sentence: "Stock compensation expense1 Pension ongoing income2 Other postretirement income2 Repositioning and other charges3 Other expense4 Amounts included in Selling, general and administrative expenses." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "OtherPostretirementBenefits20232022Change in benefit obligationBenefit obligation at beginning of year$133 $196 Service cost - - Interest cost6 5 Plan amendments - - Actuarial (gains) losses3 (54)Benefits paid(26)(14)Benefit obligation at end of year116 133 Change in plan assetsFair value of plan assets at beginning of year - - Actual return on plan assets - - Company contributions - - Benefits paid - - Fair value of plan assets at end of year - - Funded status of plans$(116)$(133)Amounts recognized in the Consolidated Balance Sheet consist ofAccrued liabilities$(12)$(21)Postretirement benefit obligations other than pensions1(104)(112)Net amount recognized$(116)$(133)1Excludes non-U.S." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "Supplemental balance sheet information related to leases was as follows: December 31,20232022Operating leasesOther assets$1,004 $881 Accrued liabilities196 192 Other liabilities897 775 Total operating lease liabilities$1,093 $967 Finance leasesProperty, plant and equipment$402 $383 Accumulated depreciation(204)(161)Property, plant and equipment - net$198 $222 Current maturities of long-term debt$86 $77 Long-term debt99 145 Total finance lease liabilities$185 $222 Weighted average remaining lease termOperating leases9 years8 yearsFinance leases3 years4 yearsWeighted average discount rateOperating leases3.0 %2.1 %Finance leases8.5 %7.8 % Other assets Other assets Accrued liabilities Accrued liabilities Other liabilities Other liabilities Property, plant and equipment - net Property, plant and equipment - net Current maturities of long-term debt Current maturities of long-term debt Long-term debt Long-term debt As of December 31, 2023, maturities of lease liabilities were as follows: Operating LeasesFinance Leases2024$222 $98 2025185 53 2026155 24 2027131 12 2028105 11 Thereafter443 7 Total lease payments1,241 205 Less: Interest148 20 Total maturities of lease liabilities$1,093 $185" **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "PlansDecember 31, 2023TotalLevel 1Level 2Level 3EquitiesHoneywell common stock$3,049 $3,049 $ - $ - U.S." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: Years Ended December 31,20232022Claims unresolved at the beginning of year5,608 6,401 Claims filed1,803 2,014 Claims resolved(1,894)(2,807)Claims unresolved at the end of year5,517 5,608 **Key changes:** - Reworded sentence: "Disease Distribution of Unresolved ClaimsYears Ended December 31,20232022Mesothelioma and other cancer claims3,244 3,283 Nonmalignant claims2,273 2,325 Total claims5,517 5,608 Honeywell has experienced average resolution values per claim excluding legal costs as follows: Years Ended December 31,20232022202120202019 (in whole dollars)Mesothelioma and other cancer claims$66,200 $59,200 $56,000 $61,500 $50,200 Nonmalignant claims1,730 520 400 550 3,900 The Consolidated Financial Statements reflect an estimated liability for resolution of asserted (claims filed as of the financial statement date) and unasserted Bendix-related asbestos claims, which exclude the Company's ongoing legal fees to defend such asbestos claims which will continue to be expensed as they are incurred." - Reworded sentence: "Such liability for unasserted Bendix-related asbestos claims is based on historic and anticipated claims filing experience and dismissal rates, disease classifications, and average resolution values in the tort system over a defined look-back period." **Prior (2023):** Disease distribution of unresolved claimsYears Ended December 31,20222021Mesothelioma and other cancer claims3,283 3,760 Nonmalignant claims2,325 2,641 Total claims5,608 6,401 Honeywell has experienced average resolution values per claim excluding legal costs as follows: Years Ended December 31,20222021202020192018 (in whole dollars)Malignant claims$59,200 $56,000 $61,500 $50,200 $55,300 Nonmalignant claims$520 $400 $550 $3,900 $4,700 It is not possible to predict whether resolution values for Bendix-related asbestos claims will increase, decrease, or stabilize in the future. The Consolidated Financial Statements reflect an estimated liability for resolution of asserted (claims filed as of the financial statement date) and unasserted Bendix-related asbestos claims, which exclude the Company's ongoing legal fees to defend such asbestos claims which will continue to be expensed as they are incurred. The Company reflects the inclusion of all years of epidemiological disease projection through 2059 when estimating the liability for unasserted Bendix-related asbestos claims. Such liability for unasserted Bendix-related asbestos claims is based on historic and anticipated claims filing experience and dismissal rates, disease classifications, and resolution values in the tort system for the previous five years. The Company valued Bendix asserted and unasserted claims using average resolution values for the previous five years. The Company updates the resolution values used to estimate the cost of Bendix asserted and unasserted claims during the fourth quarter each year. The Company's insurance receivable corresponding to the liability for settlement of asserted and unasserted Bendix asbestos claims reflects coverage which is provided by a large number of insurance policies written by dozens of insurance companies in both the domestic insurance market and the London excess market. Based on the Company's ongoing analysis of the probable insurance recovery, insurance receivables are recorded in the financial statements simultaneous with the recording of the estimated liability for the underlying asbestos claims. This determination is based on the Company's analysis of the underlying insurance policies, historical experience with insurers, ongoing review of the solvency of insurers, judicial determinations relevant to insurance programs, and consideration of the impacts of any settlements reached with the Company's insurers. On October 31, 2018, David Kanefsky (Plaintiff), a Honeywell shareholder, filed a putative class action complaint in the U.S. District Court for the District of New Jersey (the Court) alleging violations of the Securities Exchange Act of 1934 and Rule 10b-5 related to the prior accounting for Bendix asbestos claims. An Amended Complaint was filed on December 30, 2019, and on February 7, 2020, the Company filed a Motion to Dismiss. On May 18, 2020, the Court denied the Motion to Dismiss. On December 7, 2021, the parties filed a Stipulation of Settlement (Settlement Agreement) and Plaintiff filed a motion for preliminary approval of the Settlement Agreement, which included payment by Honeywell of $10 million to settle the claims in dispute. On January 18, 2022, the Court approved the motion for preliminary approval of the Settlement Agreement. On May 3, 2022, the Court entered a final judgment and order approving the Settlement Agreement and dismissed the action. Honeywell continues to believe the claims lacked merit and has denied wrongdoing as well as any liability for the claims made against Honeywell in the action. 95 Honeywell International Inc. 95 Honeywell International Inc. 95 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Disease Distribution of Unresolved ClaimsYears Ended December 31,20232022Mesothelioma and other cancer claims3,244 3,283 Nonmalignant claims2,273 2,325 Total claims5,517 5,608 Honeywell has experienced average resolution values per claim excluding legal costs as follows: Years Ended December 31,20232022202120202019 (in whole dollars)Mesothelioma and other cancer claims$66,200 $59,200 $56,000 $61,500 $50,200 Nonmalignant claims1,730 520 400 550 3,900 The Consolidated Financial Statements reflect an estimated liability for resolution of asserted (claims filed as of the financial statement date) and unasserted Bendix-related asbestos claims, which exclude the Company's ongoing legal fees to defend such asbestos claims which will continue to be expensed as they are incurred. The Company reflects the inclusion of all years of epidemiological disease projection through 2059 when estimating the liability for unasserted Bendix-related asbestos claims. Such liability for unasserted Bendix-related asbestos claims is based on historic and anticipated claims filing experience and dismissal rates, disease classifications, and average resolution values in the tort system over a defined look-back period. The Company historically valued Bendix asserted and unasserted claims using a five-year look-back period. The Company reviews the valuation assumptions and average resolution values used to estimate the cost of Bendix asserted and unasserted claims during the fourth quarter each year. 98 Honeywell International Inc. 98 Honeywell International Inc. 98 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: Total performance obligations2 **Key changes:** - Reworded sentence: "The remaining performance obligations within Corporate and All Other relate to the Quantinuum business." **Prior (2023):** (1) The remaining performance obligations within Corporate and All Other relate to the Quantinuum business. (2) Effective March 31, 2022, performance obligations excludes contracts with customers related to Russia as collectability is not reasonably assured. 65 Honeywell International Inc. 65 Honeywell International Inc. 65 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** The remaining performance obligations within Corporate and All Other relate to the Quantinuum business. Effective March 31, 2022, performance obligations exclude contracts with customers related to Russia as collectability is not reasonably assured. 68 Honeywell International Inc. 68 Honeywell International Inc. 68 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "PlansDecember 31, 2023TotalLevel 1Level 2Level 3EquitiesU.S." - Reworded sentence: "equities374 - 374 - Fixed incomeShort-term investments341 341 - - Government securities2,045 - 2,045 - Corporate bonds1,031 - 1,031 - Mortgage/Asset-backed securities31 - 31 - Insurance contracts115 - 115 - Insurance buy-in contracts950 - - 950 Investments in private fundsPrivate funds90 - 54 36 Real estate funds130 - - 130 Total$5,251 $343 $3,792 $1,116 Investments measured at NAVPrivate funds10 Real estate funds43 Total assets at fair value$5,304 108 Honeywell International Inc." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: Carrying Amountof Hedged ItemCumulative Amount ofFair Value Hedging AdjustmentIncluded in the CarryingAmount of Hedged ItemDecember 31, 2023December 31, 2022December 31, 2023December 31, 2022Long-term debt$4,551 $4,696 $(166)$(287) **Key changes:** - Reworded sentence: "Long-term debt Long-term debt 83 Honeywell International Inc." **Prior (2023):** 80 Honeywell International Inc. 80 Honeywell International Inc. 80 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Long-term debt Long-term debt 83 Honeywell International Inc. 83 Honeywell International Inc. 83 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions) **Key changes:** - Reworded sentence: "We manage our businesses to maximize operating cash flows as the primary source of liquidity." - Reworded sentence: "cash balances, short-term debt from the commercial paper market, long-term borrowings, committed credit lines, and access to the public debt and equity markets." - Reworded sentence: "As of December 31, 2023, $5.9 billion of the Company's cash, cash equivalents, and short-term investments were held by non-U.S." - Reworded sentence: "CASH FLOW SUMMARY Our cash flows from operating, investing, and financing activities, as reflected in the Consolidated Statement of Cash Flows, are summarized as follows: Years Ended December 31,20232022Change 2023vs.20222021Change2022vs.2021Cash and cash equivalents at beginning of period$9,627 $10,959 $(1,332)$14,275 $(3,316)Operating activitiesNet income attributable to Honeywell5,658 4,966 692 5,542 (576)Noncash adjustments1,980 1,946 34 971 975 Changes in working capital(150)(1,334)1,184 51 (1,385)NARCO Buyout payment(1,325) - (1,325) - - Other operating activities(823)(304)(519)(526)222 Net cash provided by operating activities5,340 5,274 66 6,038 (764)Net cash used for investing activities(1,293)(93)(1,200)(1,061)968 Net cash used for financing activities(5,763)(6,330)567 (8,254)1,924 Effect of foreign exchange rate changes on cash and cash equivalents14 (183)197 (39)(144)Net increase (decrease) in cash and cash equivalents(1,702)(1,332)(370)(3,316)1,984 Cash and cash equivalents at end of period$7,925 $9,627 $(1,702)$10,959 $(1,332)" **Prior (2023):** We continue to manage our businesses to maximize operating cash flows as the primary source of liquidity. Each of our businesses is focused on increasing operating cash flows through revenue growth, margin expansion, and improved working capital turnover. Additional sources of liquidity include committed credit lines, short-term debt from the commercial paper market, long-term borrowings, access to the public debt and equity markets, U.S. cash balances, and the ability to access non-U.S. cash balances. CASH We monitor the third-party depository institutions that hold our cash and cash equivalents on a daily basis. Our emphasis is primarily safety of principal and secondarily maximizing yield of those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one counterparty. As of December 31, 2022, and 2021, we held $10.1 billion and $11.5 billion, respectively, of cash and cash equivalents, including our short-term investments. As of December 31, 2022, $5.0 billion of the Company's cash, cash equivalents, and short-term investments were held by non-US subsidiaries. We do not have material amounts related to any jurisdiction subject to currency control restrictions that impact our ability to access and repatriate such amounts. Under current laws, we do not expect taxes on repatriation or restrictions on amounts held outside of the U.S. to have a material effect on our overall liquidity. BORROWINGS We leverage a variety of debt instruments to manage our overall borrowing costs. As of December 31, 2022, and 2021, our total borrowings were $19.6 billion. December 31,20222021Commercial paper and other short-term borrowings$2,717 $3,542 Variable rate notes22 622 Fixed rate notes17,086 15,314 Other265 272 Fair value of hedging instruments(287)60 Debt issuance costs(233)(211)Total borrowings$19,570 $19,599 A primary source of liquidity is our ability to access the corporate bond markets. Through these markets, we issue a variety of long-term fixed rate notes, in a variety of currencies, to manage our overall funding costs. Another primary source of liquidity is our ability to access the commercial paper market. Commercial paper notes are sold at a discount or premium and have a maturity of not more than 365 days from date of issuance. Borrowings under the commercial paper program are available for general corporate purposes as well as for financing acquisitions. The weighted average interest rate on commercial paper and other short-term borrowings outstanding was 3.29% and 0.07% as of December 31, 2022, and 2021, respectively. 37 Honeywell International Inc. 37 Honeywell International Inc. 37 Honeywell International Inc. TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTSLIQUIDITY AND CAPITAL RESOURCES TABLE OF CONTENTS We also have the following revolving credit agreements: •A $1.5 billion 364-Day Credit Agreement (the 364-Day Credit Agreement) with a syndicate of banks, dated March 24, 2022. Amounts borrowed under the 364-Day Credit Agreement are required to be repaid no later than March 23, 2023, 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 23, 2024, or (ii) the 364-Day Credit Agreement is terminated earlier pursuant to its terms. The 364-Day Credit Agreement replaced the previously reported $1.5 billion 364-day credit agreement dated March 31, 2021, which was terminated in accordance with its terms effective March 24, 2022. As of December 31, 2022, there were no outstanding borrowings under our 364-Day Credit Agreement. •A $4.0 billion Five-Year Credit Agreement (the 5-Year Credit Agreement) with a syndicate of banks, dated March 24, 2022. Commitments under the 5-Year Credit Agreement can be increased pursuant to the terms of the 5-Year Credit Agreement to an aggregate amount not to exceed $4.5 billion. The 5-Year Credit Agreement amended and restated the previously reported $4.0 billion amended and restated five-year credit agreement dated March 31, 2021. As of December 31, 2022, there were no outstanding borrowings under our 5-Year Credit Agreement. We also have a current shelf registration statement filed with the SEC under which we may issue additional debt securities, common stock, and preferred stock that may be offered in one or more offerings on terms to be determined at the time of the offering. We anticipate that net proceeds of any offering would be used for general corporate purposes, including repayment of existing indebtedness, share repurchases, capital expenditures, and acquisitions. 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 December 31, 2022, S&P Global Inc. (S&P), Fitch Ratings Inc. (Fitch), and Moody's Investor Service (Moody's) have ratings on our debt set forth in the table below: S&PFitchMoody'sOutlookStableStableStableShort-termA-1F1P1Long-termAAA2 CASH FLOW SUMMARY Our cash flows from operating, investing, and financing activities, as reflected in the Consolidated Statement of Cash Flows, are summarized as follows: Years Ended December 31,20222021Change 2022vs.20212020Change2021vs.2020Cash and cash equivalents at beginning of period$10,959 $14,275 $(3,316)$9,067 $5,208 Operating activitiesNet income attributable to Honeywell4,966 5,542 (576)4,779 763 Noncash adjustments1,946 971 975 1,284 (313)Changes in working capital(1,334)51 (1,385)617 (566)Other operating activities(304)(526)222 (472)(54)Net cash provided by operating activities5,274 6,038 (764)6,208 (170)Net cash used for investing activities(93)(1,061)968 (987)(74)Net cash used for financing activities(6,330)(8,254)1,924 (81)(8,173)Effect of foreign exchange rate changes on cash and cash equivalents(183)(39)(144)68 (107)Net increase (decrease) in cash and cash equivalents(1,332)(3,316)1,984 5,208 (8,524)Cash and cash equivalents at end of period$9,627 $10,959 $(1,332)$14,275 $(3,316) **Current (2024):** We manage our businesses to maximize operating cash flows as the primary source of liquidity. Each of our businesses focus on increasing operating cash flows through revenue growth, margin expansion, and improved working capital turnover. Additional sources of liquidity include U.S. cash balances, and the ability to access non-U.S. cash balances, short-term debt from the commercial paper market, long-term borrowings, committed credit lines, and access to the public debt and equity markets. CASH As of December 31, 2023, and 2022, we held $8.1 billion and $10.1 billion, respectively, of cash and cash equivalents, including our short-term investments. We monitor the third-party depository institutions that hold our cash and cash equivalents on a daily basis. Our emphasis is primarily safety of principal and secondarily maximizing yield of those funds. We diversify our cash and cash equivalents among counterparties to minimize exposure to any one counterparty. As of December 31, 2023, $5.9 billion of the Company's cash, cash equivalents, and short-term investments were held by non-U.S. subsidiaries. We do not have material amounts related to any jurisdiction subject to currency control restrictions that impact our ability to access and repatriate such amounts. Under current laws, we do not expect taxes on repatriation or restrictions on amounts held outside of the U.S. to have a material effect on our overall liquidity. CASH FLOW SUMMARY Our cash flows from operating, investing, and financing activities, as reflected in the Consolidated Statement of Cash Flows, are summarized as follows: Years Ended December 31,20232022Change 2023vs.20222021Change2022vs.2021Cash and cash equivalents at beginning of period$9,627 $10,959 $(1,332)$14,275 $(3,316)Operating activitiesNet income attributable to Honeywell5,658 4,966 692 5,542 (576)Noncash adjustments1,980 1,946 34 971 975 Changes in working capital(150)(1,334)1,184 51 (1,385)NARCO Buyout payment(1,325) - (1,325) - - Other operating activities(823)(304)(519)(526)222 Net cash provided by operating activities5,340 5,274 66 6,038 (764)Net cash used for investing activities(1,293)(93)(1,200)(1,061)968 Net cash used for financing activities(5,763)(6,330)567 (8,254)1,924 Effect of foreign exchange rate changes on cash and cash equivalents14 (183)197 (39)(144)Net increase (decrease) in cash and cash equivalents(1,702)(1,332)(370)(3,316)1,984 Cash and cash equivalents at end of period$7,925 $9,627 $(1,702)$10,959 $(1,332) --- ## Modified: DEFINITE-LIVED INTANGIBLE ASSETS **Key changes:** - Reworded sentence: "Other intangible assets with definite lives consist of customer relationships, patents and technology, trademarks, and other intangibles and are amortized over their estimated useful lives, ranging from 2 to 20 years." **Prior (2023):** Other intangible assets with determinable lives consist of customer lists, technology, patents and trademarks, and other intangibles and are amortized over their estimated useful lives, ranging from 2 to 20 years. 58 Honeywell International Inc. 58 Honeywell International Inc. 58 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Other intangible assets with definite lives consist of customer relationships, patents and technology, trademarks, and other intangibles and are amortized over their estimated useful lives, ranging from 2 to 20 years. --- ## Modified: Price Per Share **Key changes:** - Reworded sentence: "$65.00-$89.99 $90.00-$99.99 $100.00-$134.99 $135.00-$189.99 $190.00-$232.60 There were 9,509,606 and 10,664,625 options exercisable at weighted average exercise prices of $127.99 and $113.30 at December 31, 2022, and 2021, respectively." **Prior (2023):** (1)Average remaining contractual life in years. There were 10,664,625 and 10,120,793 options exercisable at weighted average exercise prices of $113.30 and $103.89 at December 31, 2021, and 2020, respectively. The following table summarizes the financial statement impact from stock options exercised:Options ExercisedYears Ended December 31,202220212020Intrinsic value(1)$310 $219 $379 Tax benefit realized71 48 84 Intrinsic value(1) (1)Represents the amount by which the stock price exceeded the exercise price of the options on the date of exercise. At December 31, 2022, there was $99 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 2.46 years. The total fair value of options vested for the years ended December 31, 2022, 2021, and 2020 was $49 million, $52 million, and $55 million, respectively. **Current (2024):** $65.00-$89.99 $90.00-$99.99 $100.00-$134.99 $135.00-$189.99 $190.00-$232.60 There were 9,509,606 and 10,664,625 options exercisable at weighted average exercise prices of $127.99 and $113.30 at December 31, 2022, and 2021, respectively. The following table summarizes the financial statement impact from stock options exercised: Years Ended December 31,202320222021Intrinsic value1$122 $310 $219 Tax benefit realized27 71 48 1Represents the amount by which the stock price exceeded the exercise price of the options on the date of exercise. Intrinsic value1 At December 31, 2023, there was $96 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 2.49 years. The total fair value of options vested for the years ended December 31, 2023, 2022, and 2021 was $48 million, $49 million, and $52 million, respectively. --- ## Modified: Comparison of Cumulative Five-Year Total Return **Key changes:** - Reworded sentence: "2023Honeywell100 136.70 168.10 167.60 175.82 175.85 S&P 500 Index100 131.49 155.68 200.37 164.08 207.21 Composite Index100 127.46 125.45 136.51 140.88 163.96 XLI Index100 129.08 143.16 173.34 163.69 193.36 52 Honeywell International Inc." **Prior (2023):** Dec. 2017Dec. 2018Dec. 2019Dec. 2020Dec. 2021Dec. 2022Honeywell100 91.83 125.53 154.36 153.91 161.45 S&P 500 Index100 95.62 125.72 148.85 191.58 156.88 Composite Index100 81.58 103.99 102.35 111.37 114.93 XLI Index100 86.75 111.98 124.20 150.38 142.00 50 Honeywell International Inc. 50 Honeywell International Inc. 50 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS **Current (2024):** Dec. 2018Dec. 2019Dec. 2020Dec. 2021Dec. 2022Dec. 2023Honeywell100 136.70 168.10 167.60 175.82 175.85 S&P 500 Index100 131.49 155.68 200.37 164.08 207.21 Composite Index100 127.46 125.45 136.51 140.88 163.96 XLI Index100 129.08 143.16 173.34 163.69 193.36 52 Honeywell International Inc. 52 Honeywell International Inc. 52 Honeywell International Inc. TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "INVENTORIES December 31,20232022Raw materials$1,704 $1,407 Work in process1,217 1,049 Finished products3,257 3,082 Total Inventories$6,178 $5,538 NOTE 7." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "The following table sets forth the Company's financial assets and liabilities that were not carried at fair value: December 31, 2023December 31, 2022CarryingValueFairValueCarryingValueFairValueAssets Long-term receivables$232 $173 $229 $183 LiabilitiesLong-term debt and related current maturities18,358 17,706 16,853 15,856 The Company determined the fair value of the long-term receivables by utilizing transactions in the listed markets for identical or similar assets." - Removed sentence: "On April 30, 2021, the Company received shares of Garrett Motion Inc." - Removed sentence: "(Garrett) Series B Preferred Stock in full and final satisfaction of the Garrett Indemnity and Tax Matters Agreement." - Removed sentence: "As of December 31, 2021, the fair value of the short-term and long-term investments were based on the present value of the mandatory redemptions as reflected within Garrett's Second and Amended and Restated Series B Preferred Stock (Series B Preferred Stock) Certificate of Designation." - Removed sentence: "The present value reflected amortized cost determined by the present value of the mandatory redemptions discounted at 7.25%, which was the rate reflected in the Second Amended and Restated Series B Preferred Stock Certificate of Designation." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: CONSOLIDATED STATEMENT OF OPERATIONS **Key changes:** - Reworded sentence: "Years Ended December 31,202320222021(Dollars in millions,except per share amounts)Product sales$25,773 $25,960 $25,643 Service sales10,889 9,506 8,749 Net sales36,662 35,466 34,392 Costs, expenses and otherCost of products sold16,977 16,955 17,082 Cost of services sold6,018 5,392 4,979 Total Cost of products and services sold22,995 22,347 22,061 Research and development expenses1,456 1,478 1,333 Selling, general and administrative expenses5,127 5,214 4,798 Other (income) expense(840)(366)(1,378)Interest and other financial charges765 414 343 Total costs, expenses and other29,503 29,087 27,157 Income before taxes7,159 6,379 7,235 Tax expense1,487 1,412 1,625 Net income5,672 4,967 5,610 Less: Net income attributable to noncontrolling interest14 1 68 Net income attributable to Honeywell$5,658 $4,966 $5,542 Earnings per share of common stock - basic$8.53 $7.33 $8.01 Earnings per share of common stock - assuming dilution$8.47 $7.27 $7.91 The Notes to Consolidated Financial Statements are an integral part of this statement.54 Honeywell International Inc." **Prior (2023):** Years Ended December 31,202220212020(Dollars in millions,except per share amounts)Product sales$25,960 $25,643 $24,737 Service sales9,506 8,749 7,900 Net sales35,466 34,392 32,637 Costs, expenses and otherCost of products sold18,263 18,344 17,638 Cost of services sold5,562 5,050 4,531 23,825 23,394 22,169 Selling, general and administrative expenses5,214 4,798 4,772 Other (income) expense(366)(1,378)(675)Interest and other financial charges414 343 359 29,087 27,157 26,625 Income before taxes6,379 7,235 6,012 Tax expense1,412 1,625 1,147 Net income4,967 5,610 4,865 Less: Net income attributable to the noncontrolling interest1 68 86 Net income attributable to Honeywell$4,966 $5,542 $4,779 Earnings per share of common stock - basic$7.33 $8.01 $6.79 Earnings per share of common stock - assuming dilution$7.27 $7.91 $6.72 The Notes to Consolidated Financial Statements are an integral part of this statement. 52 Honeywell International Inc. 52 Honeywell International Inc. 52 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Years Ended December 31,202320222021(Dollars in millions,except per share amounts)Product sales$25,773 $25,960 $25,643 Service sales10,889 9,506 8,749 Net sales36,662 35,466 34,392 Costs, expenses and otherCost of products sold16,977 16,955 17,082 Cost of services sold6,018 5,392 4,979 Total Cost of products and services sold22,995 22,347 22,061 Research and development expenses1,456 1,478 1,333 Selling, general and administrative expenses5,127 5,214 4,798 Other (income) expense(840)(366)(1,378)Interest and other financial charges765 414 343 Total costs, expenses and other29,503 29,087 27,157 Income before taxes7,159 6,379 7,235 Tax expense1,487 1,412 1,625 Net income5,672 4,967 5,610 Less: Net income attributable to noncontrolling interest14 1 68 Net income attributable to Honeywell$5,658 $4,966 $5,542 Earnings per share of common stock - basic$8.53 $7.33 $8.01 Earnings per share of common stock - assuming dilution$8.47 $7.27 $7.91 The Notes to Consolidated Financial Statements are an integral part of this statement.54 Honeywell International Inc. The Notes to Consolidated Financial Statements are an integral part of this statement.54 Honeywell International Inc. The Notes to Consolidated Financial Statements are an integral part of this statement. 54 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: CONSOLIDATED BALANCE SHEET **Key changes:** - Reworded sentence: "December 31,20232022 (Dollars in millions)ASSETS Current assets Cash and cash equivalents$7,925 $9,627 Short-term investments170 483 Accounts receivable, less allowances of $323 and $326, respectively7,530 7,440 Inventories6,178 5,538 Other current assets1,699 1,894 Total current assets23,502 24,982 Investments and long-term receivables939 945 Property, plant and equipment - net5,660 5,471 Goodwill18,049 17,497 Other intangible assets - net3,231 3,222 Insurance recoveries for asbestos-related liabilities170 224 Deferred income taxes392 421 Other assets9,582 9,513 Total assets$61,525 $62,275 LIABILITIESCurrent liabilitiesAccounts payable$6,849 $6,329 Commercial paper and other short-term borrowings2,085 2,717 Current maturities of long-term debt1,796 1,730 Accrued liabilities7,809 9,162 Total current liabilities18,539 19,938 Long-term debt16,562 15,123 Deferred income taxes2,094 2,093 Postretirement benefit obligations other than pensions134 146 Asbestos-related liabilities1,490 1,180 Other liabilities6,265 6,469 Redeemable noncontrolling interest7 7 SHAREOWNERS' EQUITYCapital - common stock issued958 958 - additional paid-in capital9,062 8,564 Common stock held in treasury, at cost(38,008)(34,443)Accumulated other comprehensive income (loss)(4,135)(3,475)Retained earnings47,979 45,093 Total Honeywell shareowners' equity15,856 16,697 Noncontrolling interest578 622 Total shareowners' equity16,434 17,319 Total liabilities, redeemable noncontrolling interest and shareowners' equity$61,525 $62,275 Accounts receivable, less allowances of $323 and $326, respectively The Notes to Consolidated Financial Statements are an integral part of this statement.56 Honeywell International Inc." **Prior (2023):** December 31,20222021 (Dollars in millions)ASSETS Current assets: Cash and cash equivalents$9,627 $10,959 Short-term investments483 564 Accounts receivable, less allowances of $326 and $177, respectively7,440 6,830 Inventories5,538 5,138 Other current assets1,894 1,881 Total current assets24,982 25,372 Investments and long-term receivables945 1,222 Property, plant and equipment - net5,471 5,562 Goodwill17,497 17,756 Other intangible assets - net3,222 3,613 Insurance recoveries for asbestos-related liabilities224 322 Deferred income taxes421 489 Other assets9,513 10,134 Total assets$62,275 $64,470 LIABILITIESCurrent liabilities:Accounts payable$6,329 $6,484 Commercial paper and other short-term borrowings2,717 3,542 Current maturities of long-term debt1,730 1,803 Accrued liabilities9,162 7,679 Total current liabilities19,938 19,508 Long-term debt15,123 14,254 Deferred income taxes2,093 2,364 Postretirement benefit obligations other than pensions146 208 Asbestos-related liabilities1,180 1,800 Other liabilities6,469 7,087 Redeemable noncontrolling interest7 7 SHAREOWNERS' EQUITYCapital - common stock issued958 958 - additional paid-in capital8,564 8,141 Common stock held in treasury, at cost(34,443)(30,462)Accumulated other comprehensive income (loss)(3,475)(2,895)Retained earnings45,093 42,827 Total Honeywell shareowners' equity16,697 18,569 Noncontrolling interest622 673 Total shareowners' equity17,319 19,242 Total liabilities, redeemable noncontrolling interest and shareowners' equity$62,275 $64,470 Accounts receivable, less allowances of $326 and $177, respectively The Notes to Consolidated Financial Statements are an integral part of this statement. 54 Honeywell International Inc. 54 Honeywell International Inc. 54 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** December 31,20232022 (Dollars in millions)ASSETS Current assets Cash and cash equivalents$7,925 $9,627 Short-term investments170 483 Accounts receivable, less allowances of $323 and $326, respectively7,530 7,440 Inventories6,178 5,538 Other current assets1,699 1,894 Total current assets23,502 24,982 Investments and long-term receivables939 945 Property, plant and equipment - net5,660 5,471 Goodwill18,049 17,497 Other intangible assets - net3,231 3,222 Insurance recoveries for asbestos-related liabilities170 224 Deferred income taxes392 421 Other assets9,582 9,513 Total assets$61,525 $62,275 LIABILITIESCurrent liabilitiesAccounts payable$6,849 $6,329 Commercial paper and other short-term borrowings2,085 2,717 Current maturities of long-term debt1,796 1,730 Accrued liabilities7,809 9,162 Total current liabilities18,539 19,938 Long-term debt16,562 15,123 Deferred income taxes2,094 2,093 Postretirement benefit obligations other than pensions134 146 Asbestos-related liabilities1,490 1,180 Other liabilities6,265 6,469 Redeemable noncontrolling interest7 7 SHAREOWNERS' EQUITYCapital - common stock issued958 958 - additional paid-in capital9,062 8,564 Common stock held in treasury, at cost(38,008)(34,443)Accumulated other comprehensive income (loss)(4,135)(3,475)Retained earnings47,979 45,093 Total Honeywell shareowners' equity15,856 16,697 Noncontrolling interest578 622 Total shareowners' equity16,434 17,319 Total liabilities, redeemable noncontrolling interest and shareowners' equity$61,525 $62,275 Accounts receivable, less allowances of $323 and $326, respectively The Notes to Consolidated Financial Statements are an integral part of this statement.56 Honeywell International Inc. The Notes to Consolidated Financial Statements are an integral part of this statement.56 Honeywell International Inc. The Notes to Consolidated Financial Statements are an integral part of this statement. 56 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: OTHER POSTRETIREMENT BENEFITS **Key changes:** - Reworded sentence: "December 31,20232022Assumed health care cost trend rateHealth care cost trend rate assumed for next year7.00 %7.50 %Rate that the cost trend rate gradually declines to5.00 %5.00 %Year that the rate reaches the rate it is assumed to remain at2031 2031 Benefit payments reflecting expected future service, as appropriate, are expected to be paid as follows: Without Impact ofMedicare SubsidyNet ofMedicare Subsidy2024$13 $12 202512 12 202612 11 202711 11 202811 10 2029-203346 44 110 Honeywell International Inc." **Prior (2023):** December 31,20222021Assumed health care cost trend rate:Health care cost trend rate assumed for next year7.50 %6.50 %Rate that the cost trend rate gradually declines to5.00 %5.00 %Year that the rate reaches the rate it is assumed to remain at2031 2029 Benefit payments reflecting expected future service, as appropriate, are expected to be paid as follows: Without Impact ofMedicare SubsidyNet ofMedicare Subsidy2023$24 $22 202413 13 202513 12 202612 12 202712 11 2028-203251 48 NOTE 21. OTHER (INCOME) EXPENSE Years Ended December 31,202220212020Interest income$(138)$(102)$(107)Pension ongoing income - non-service(602)(1,202)(901)Other postretirement income - non-service(41)(71)(57)Equity income of affiliated companies(61)(67)(66)Loss (gain) on sale of non-strategic businesses and assets(22)(102)3 Foreign exchange48 25 (68)Expense related to UOP Matters45 160 - Expense related to Russia-Ukraine conflict45 - - Reimbursement receivables charge - - 509 Net expense related to the NARCO Buyout and HWI Sale342 - - Other (net)18 (19)12 $(366)$(1,378)$(675) For more information on the UOP Matters, NARCO Buyout, and HWI Sale, see Note 19 Commitments and Contingencies. See Note 4 Repositioning and Other Charges for further discussion of the expense related to the Russia-Ukraine conflict. See Note 2 for further discussion on the gain on sale of non-strategic businesses and assets. 107 Honeywell International Inc. 107 Honeywell International Inc. 107 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** December 31,20232022Assumed health care cost trend rateHealth care cost trend rate assumed for next year7.00 %7.50 %Rate that the cost trend rate gradually declines to5.00 %5.00 %Year that the rate reaches the rate it is assumed to remain at2031 2031 Benefit payments reflecting expected future service, as appropriate, are expected to be paid as follows: Without Impact ofMedicare SubsidyNet ofMedicare Subsidy2024$13 $12 202512 12 202612 11 202711 11 202811 10 2029-203346 44 110 Honeywell International Inc. 110 Honeywell International Inc. 110 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: TAX EXPENSE (BENEFIT) **Key changes:** - Reworded sentence: "Tax expense (benefit) consists of: Years Ended December 31,202320222021Current U.S." **Prior (2023):** Years Ended December 31,202220212020Tax expense (benefit) consists of Current: U.S. Federal$653 $415 $475 U.S. State124 146 79 Non-U.S.815 886 768 $1,592 $1,447 $1,322 Deferred:U.S. Federal$(175)$173 $234 U.S. State(36)37 39 Non-U.S.32 (32)(448)(180)178 (175) $1,412 $1,625 $1,147 69 Honeywell International Inc. 69 Honeywell International Inc. 69 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS **Current (2024):** Tax expense (benefit) consists of: Years Ended December 31,202320222021Current U.S. Federal$176 $653 $415 U.S. State60 124 146 Non-U.S.1,098 815 886 Total current tax expense (benefit)1,334 1,592 1,447 DeferredU.S. Federal27 (175)173 U.S. State11 (36)37 Non-U.S.115 32 (32)Total deferred tax expense (benefit)153 (180)178 Total Tax expense$1,487 $1,412 $1,625 --- ## Modified: Indefinite-life intangibles **Key changes:** - Reworded sentence: "Intangible assets amortization expense was $292 million, $333 million, and $465 million for the years ended December 31, 2023, 2022, and 2021, respectively." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** Intangible assets amortization expense was $292 million, $333 million, and $465 million for the years ended December 31, 2023, 2022, and 2021, respectively. Estimated intangible asset amortization expense for each of the next five years approximates $287 million in 2024, $262 million in 2025, $257 million in 2026, $247 million in 2027, and $249 million in 2028. 77 Honeywell International Inc. 77 Honeywell International Inc. 77 Honeywell International Inc. TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHONEYWELL INTERNATIONAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in tables in millions, except per share amounts) TABLE OF CONTENTSFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "GEOGRAPHIC AREAS - FINANCIAL DATA Net Sales1Long-lived Assets2Years Ended December 31,Years Ended December 31, 202320222021202320222021United States$20,907 $21,262 $20,662 $4,107 $3,949 $3,964 Europe8,052 6,840 6,800 555 537 566 Other international7,703 7,364 6,930 998 985 1,032 Net sales$36,662 $35,466 $34,392 $5,660 $5,471 $5,562 1Sales between geographic areas approximate market value and are not significant." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- ## Modified: (Dollars in tables in millions, except per share amounts) **Key changes:** - Reworded sentence: "Years Ended December 31,202320222021Net salesAerospaceProducts$7,316 $6,330 $6,158 Services6,308 5,497 4,868 Net Aerospace sales13,624 11,827 11,026 Honeywell Building TechnologiesProducts4,599 4,591 4,098 Services1,432 1,409 1,441 Net Honeywell Building Technologies sales6,031 6,000 5,539 Performance Materials and TechnologiesProducts8,916 8,593 8,008 Services2,590 2,134 2,005 Net Performance Materials and Technologies sales11,506 10,727 10,013 Safety and Productivity SolutionsProducts4,942 6,446 7,379 Services547 461 435 Net Safety and Productivity Solutions sales5,489 6,907 7,814 Corporate and All OtherServices12 5 - Net Corporate and All Other sales12 5 - Net sales$36,662 $35,466 $34,392 Depreciation and amortizationAerospace$267 $285 $278 Honeywell Building Technologies107 92 67 Performance Materials and Technologies468 478 454 Safety and Productivity Solutions171 191 237 Corporate and All Other163 158 102 Total depreciation and amortization$1,176 $1,204 $1,138 Segment profitAerospace$3,741 $3,228 $3,051 Honeywell Building Technologies1,505 1,439 1,238 Performance Materials and Technologies2,549 2,354 2,120 Safety and Productivity Solutions901 1,080 1,029 Corporate and All Other(392)(412)(226)Total segment profit$8,304 $7,689 $7,212 112 Honeywell International Inc." **Prior (2023):** Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in determining the lease liability. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. The Company primarily uses its incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the lease term, secured incremental borrowing rate, and for leases denominated in a currency different than U.S. dollar, the collateralized borrowing rate in the foreign currency using the U.S. dollar and foreign currency swap spread, when available. **Current (2024):** In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This ASU should be applied prospectively to acquisitions occurring on or after the effective date of December 15, 2022, and early adoption was permitted. The Company adopted this guidance on January 1, 2022. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the transition away from reference rates expected to be discontinued to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to expand the scope of this guidance to include derivatives. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024. The Company will apply the guidance to impacted transactions during the transition period. The adoption of this standard does not have a material impact on the Company's Consolidated Financial Statements. --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*