United StatesUNITED STATES
Securities and Exchange CommissionSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
__________________
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20222023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _____
Commission file number 1-8974
x2_c93457a01a02.jpg
Honeywell International Inc.
(Exact name of registrant as specified in its charter)
Delaware22-2640650
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
855 South Mint Street28202
Charlotte,NCNorth Carolina
(Address of principal executive offices)(Zip Code)
(704)627-6200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1 per share*shareHONThe Nasdaq Stock Market LLC
1.300% Senior Notes due 2023HON 23AThe Nasdaq Stock Market LLC
0.000% Senior Notes due 2024HON 24AThe Nasdaq Stock Market LLC
3.500% Senior Notes due 2027HON 27The Nasdaq Stock Market LLC
2.250% Senior Notes due 2028HON 28AThe Nasdaq Stock Market LLC
0.750% Senior Notes due 2032HON 32The Nasdaq Stock Market LLC
3.750% Senior Notes due 2032HON 32AThe Nasdaq Stock Market LLC
4.125% Senior Notes due 2034HON 34The Nasdaq Stock Market LLC
* The common stock is also listed on the London Stock Exchange
Indicate by check mark whether the registrantRegistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrantRegistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐
Indicate by check mark whether the registrantRegistrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantRegistrant was required to submit such files). Yes x No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Fileraccelerated filerxAccelerated filer☐
Non-AcceleratedNon-accelerated filer☐Smaller reporting company☐
  Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrantRegistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
There were 672,322,232663,961,433 shares of Common Stock outstanding at SeptemberJune 30, 2022.2023.


TABLE OF CONTENTS
1
2
PART I
ITEM 1
13
Consolidated Statement of Operations (unaudited) – Three and NineSix Months Ended SeptemberJune 30, 20222023, and 20212022
13
24
Consolidated Balance Sheet (unaudited) – SeptemberJune 30, 20222023, and December 31, 20212022
35
Consolidated Statement of Cash Flows (unaudited) – NineSix Months Ended SeptemberJune 30, 20222023, and 20212022
46
57
68
68
79
810
1113
1315
1316
1416
1517
1618
1921
2122
2223
2223
27
28
28
30
ITEM 2
3130
ITEM 3
5147
ITEM 4
5247
PartPART II
ITEM 1
5348
ITEM 1A
5348
ITEM 2
5448
ITEM 4
5549
ITEM 5
49
ITEM 6
5650
5751
 




TABLE OF CONTENTS
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
We describe many of the trends and other factors that drive our business and future results in the section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations and in other parts of this report (including Part II, Item 1A Risk Factors). Such discussions contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are those that address activities, events, or developments that management intends, expects, projects, believes, or anticipates will or may occur in the future. They are based on management’s assumptions and assessments in light of past experience and trends, current economic and industry conditions, expected future developments, and other relevant factors. They are not guarantees of future performance, and actual results, developments, and business decisions may differ significantly from those envisaged by our forward-looking statements. We do not undertake to update or revise any of our forward-looking statements.statements, except as required by applicable securities law. Our forward-looking statements are also subject to material risks and uncertainties including the impact of the coronavirus pandemic (COVID-19) and the Russia-Ukraine conflict, that can affect our performance in both the near- and long-term. In addition, no assurance can be given that any plan, initiative, projection, goal, commitment, expectation, or prospect set forth in this Form 10-Q can or will be achieved. These forward-looking statements should be considered in light of the information included in this report and our other filings with the Securities and Exchange Commission (SEC), including, without limitation, the Risk Factors, as well as the description of trends and other factors in Management’s Discussion and Analysis of Financial Condition and Results of Operations, set forth in this report and our 20212022 Annual Report on Form 10-K. Any forward-looking plans described herein are not final and may be modified or abandoned at any time.


1    Honeywell International Inc.
TABLE OF CONTENTS
ABOUT HONEYWELL
Honeywell International Inc. (Honeywell, we, us, our, or the Company) invents and commercializes technologies that address some of the world’s most critical challenges around energy, safety, security, air travel, productivity, and global urbanization. We are a leading software-industrial company committed to introducing state of the art technology solutions to improve efficiency, productivity, sustainability, and safety in high growth businesses in broad-based, attractive industrial end markets. As a diversified technology and manufacturing company, we are uniquely positioned to blend physical products with software to serve customers worldwide with aerospace products and services, energy efficient products and solutions for businesses, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals, and productivity, sensing, safety, and security technologies for buildings and industries. Our products and solutions enable a safer, more comfortable, and more productive world, enhancing the quality of life of people around the globe. The Honeywell brand dates back to 1906, and the Company was incorporated in Delaware in 1985.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, are available free of charge on our Investor Relations website (honeywell.com)(investor.honeywell.com) under the heading InvestorsFinancials (see SEC Filings) immediately after they are filed with, or furnished to, the SEC. Honeywell uses our Investor Relations website investor.honeywell.com, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media. Information contained on or accessible through, including any reports available on, our website is not a part of, and is not incorporated by reference into, this Quarterly Report on Form 10-Q or any other report or document we file with the SEC. Any reference to our website in this Form 10-Q is intended to be an inactive textual reference only.

2    

Honeywell International Inc.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
The financial statements and related notes as of SeptemberJune 30, 2022,2023, should be read in conjunction with the financial statements for the year ended December 31, 2021,2022, contained in the Company's 20212022 Annual Report on Form 10-K.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
HONEYWELL INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
 (Dollars in millions, except per share amounts)
Product sales$6,588 $6,233 $19,404 $19,281 
Service sales2,363 2,240 6,876 6,454 
Net sales8,951 8,473 26,280 25,735 
Costs, expenses and other
Cost of products sold4,630 4,463 13,676 13,748 
Cost of services sold1,351 1,283 4,025 3,710 
 5,981 5,746 17,701 17,458 
Selling, general and administrative expenses1,228 1,152 3,965 3,595 
Other (income) expense(337)(215)(846)(1,023)
Interest and other financial charges98 90 270 263 
 6,970 6,773 21,090 20,293 
Income before taxes1,981 1,700 5,190 5,442 
Tax expense432 427 1,244 1,274 
Net income1,549 1,273 3,946 4,168 
Less: Net income (loss) attributable to the noncontrolling interest(3)16 (1)54 
Net income attributable to Honeywell$1,552 $1,257 $3,947 $4,114 
Earnings per share of common stock - basic$2.30 $1.82 $5.81 $5.93 
Earnings per share of common stock - assuming dilution$2.28 $1.80 $5.76 $5.86 
 Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
 (Dollars in millions, except per share amounts)
Product sales$6,441 $6,684 $12,751 $12,816 
Service sales2,705 2,269 5,259 4,513 
Net sales9,146 8,953 18,010 17,329 
Costs, expenses and other
Cost of products sold4,133 4,329 8,201 8,388 
Cost of services sold1,493 1,331 2,923 2,596 
Total Cost of products and services sold5,626 5,660 11,124 10,984 
Research and development expenses375 386 732 736 
Selling, general and administrative expenses1,262 1,306 2,579 2,737 
Other (income) expense(208)(190)(468)(509)
Interest and other financial charges187 87 357 172 
Total costs, expenses and other7,242 7,249 14,324 14,120 
Income before taxes1,904 1,704 3,686 3,209 
Tax expense403 441 777 812 
Net income1,501 1,263 2,909 2,397 
Less: Net income attributable to noncontrolling interest14 2 28 2 
Net income attributable to Honeywell$1,487 $1,261 $2,881 $2,395 
Earnings per share of common stock—basic$2.24 $1.86 $4.32 $3.51 
Earnings per share of common stock—assuming dilution$2.22 $1.84 $4.29 $3.48 












The Notes to Consolidated Financial Statements are an integral part of this statement.

13    Honeywell International Inc.
TABLE OF CONTENTS
HONEYWELL INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
 (Dollars in millions)
Net income$1,549 $1,273 $3,946 $4,168 
Other comprehensive income (loss), net of tax
Foreign exchange translation adjustment(423)(93)(399)250 
Actuarial (gains) losses recognized during year— (1)— (1)
Prior service (credit) cost recognized(10)(21)(44)(64)
Pension and other postretirement benefit adjustments(10)(22)(44)(65)
Changes in fair value of available for sale investments2 — (7)(3)
Cash flow hedges recognized in other comprehensive income (loss)27 1 66 16 
Less: Reclassification adjustment for gains (losses) included in net income23 5 38 14 
Changes in fair value of cash flow hedges4 (4)28 2 
Other comprehensive income (loss), net of tax(427)(119)(422)184 
Comprehensive income1,122 1,154 3,524 4,352 
Less: Comprehensive income (loss) attributable to the noncontrolling interest(17)15 (22)54 
Comprehensive income attributable to Honeywell$1,139 $1,139 $3,546 $4,298 






















 Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
 (Dollars in millions)
Net income$1,501 $1,263 $2,909 $2,397 
Other comprehensive income (loss), net of tax
Foreign exchange translation adjustment(77)(102)(135)24 
Pension and other postretirement benefit adjustments(12)(17)(24)(34)
Changes in fair value of available for sale investments9 (3)3 (9)
Cash flow hedges recognized in other comprehensive income (loss)14 31 30 39 
Less: Reclassification adjustment for gains (losses) included in net income11 12 13 15 
Changes in fair value of cash flow hedges3 19 17 24 
Other comprehensive income (loss), net of tax(77)(103)(139)5 
Comprehensive income1,424 1,160 2,770 2,402 
Less: Comprehensive income (loss) attributable to the noncontrolling interest10 (5)25 (5)
Comprehensive income attributable to Honeywell$1,414 $1,165 $2,745 $2,407 

The Notes to Consolidated Financial Statements are an integral part of this statement.

24    Honeywell International Inc.
TABLE OF CONTENTS
HONEYWELL INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
 September 30, 2022December 31, 2021
 (Dollars in millions)
ASSETS 
Current assets:  
Cash and cash equivalents$7,449 $10,959 
Short-term investments516 564 
Accounts receivable, less allowances of $349 and $177, respectively7,363 6,830 
Inventories5,501 5,138 
Other current assets1,696 1,881 
Total current assets22,525 25,372 
Investments and long-term receivables807 1,222 
Property, plant and equipment - net5,339 5,562 
Goodwill16,974 17,756 
Other intangible assets - net3,220 3,613 
Insurance recoveries for asbestos related liabilities238 322 
Deferred income taxes437 489 
Other assets10,747 10,134 
Total assets$60,287 $64,470 
LIABILITIES
Current liabilities:
Accounts payable$6,118 $6,484 
Commercial paper and other short-term borrowings3,434 3,542 
Current maturities of long-term debt1,315 1,803 
Accrued liabilities7,242 7,679 
Total current liabilities18,109 19,508 
Long-term debt12,236 14,254 
Deferred income taxes2,406 2,364 
Postretirement benefit obligations other than pensions203 208 
Asbestos-related liabilities1,693 1,800 
Other liabilities7,303 7,087 
Redeemable noncontrolling interest7 7 
SHAREOWNERS’ EQUITY
Capital - common stock issued958 958 
 - additional paid-in capital8,460 8,141 
Common stock held in treasury, at cost(33,182)(30,462)
Accumulated other comprehensive loss(3,296)(2,895)
Retained earnings44,767 42,827 
Total Honeywell shareowners’ equity17,707 18,569 
Noncontrolling interest623 673 
Total shareowners’ equity18,330 19,242 
Total liabilities, redeemable noncontrolling interest and shareowners’ equity$60,287 $64,470 


 June 30, 2023December 31, 2022
 (Dollars in millions)
ASSETS 
Current assets  
Cash and cash equivalents$8,626 $9,627 
Short-term investments143 483 
Accounts receivable, less allowances of $350 and $326, respectively7,994 7,440 
Inventories5,890 5,538 
Other current assets1,530 1,894 
Total current assets24,183 24,982 
Investments and long-term receivables911 945 
Property, plant and equipment—net5,486 5,471 
Goodwill17,954 17,497 
Other intangible assets—net3,415 3,222 
Insurance recoveries for asbestos-related liabilities203 224 
Deferred income taxes383 421 
Other assets9,802 9,513 
Total assets$62,337 $62,275 
LIABILITIES
Current liabilities
Accounts payable$6,445 $6,329 
Commercial paper and other short-term borrowings2,828 2,717 
Current maturities of long-term debt945 1,730 
Accrued liabilities6,956 9,162 
Total current liabilities17,174 19,938 
Long-term debt17,600 15,123 
Deferred income taxes2,262 2,093 
Postretirement benefit obligations other than pensions133 146 
Asbestos-related liabilities1,128 1,180 
Other liabilities6,139 6,469 
Redeemable noncontrolling interest7 7 
SHAREOWNERS’ EQUITY
Capital—common stock issued958 958 
—additional paid-in capital8,866 8,564 
Common stock held in treasury, at cost(35,510)(34,443)
Accumulated other comprehensive loss(3,611)(3,475)
Retained earnings46,596 45,093 
Total Honeywell shareowners’ equity17,299 16,697 
Noncontrolling interest595 622 
Total shareowners’ equity17,894 17,319 
Total liabilities, redeemable noncontrolling interest and shareowners’ equity$62,337 $62,275 

The Notes to Consolidated Financial Statements are an integral part of this statement.

35    Honeywell International Inc.
TABLE OF CONTENTS
HONEYWELL INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 Nine Months Ended September 30,
 20222021
 (Dollars in millions)
Cash flows from operating activities:  
Net income$3,946 $4,168 
Less: Net income (loss) attributable to the noncontrolling interest(1)54 
Net income attributable to Honeywell3,947 4,114 
Adjustments to reconcile net income attributable to Honeywell to net cash provided by operating activities:
Depreciation494 506 
Amortization411 427 
Gain on sale of non-strategic businesses and assets(10)(95)
Repositioning and other charges714 338 
Net payments for repositioning and other charges(316)(505)
Pension and other postretirement income(778)(862)
Pension and other postretirement benefit payments(14)(29)
Stock compensation expense163 172 
Deferred income taxes208 189 
Other200 (106)
Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
Accounts receivable(660)(419)
Inventories(390)(516)
Other current assets125 (324)
Accounts payable(365)379 
Accrued liabilities(821)106 
Net cash provided by operating activities2,908 3,375 
Cash flows from investing activities:
Expenditures for property, plant and equipment(525)(614)
Proceeds from disposals of property, plant and equipment11 18 
Increase in investments(834)(1,989)
Decrease in investments884 1,906 
Receipts from Garrett Motion Inc.409 375 
Receipts from settlements of derivative contracts773 88 
Cash paid for acquisitions, net of cash acquired(178)(1,334)
Proceeds from sales of businesses, net of fees paid— 203 
Net cash provided by (used for) investing activities540 (1,347)
Cash flows from financing activities:
Proceeds from issuance of commercial paper and other short-term borrowings5,310 3,640 
Payments of commercial paper and other short-term borrowings(5,324)(3,637)
Proceeds from issuance of common stock121 171 
Proceeds from issuance of long-term debt2 2,509 
Payments of long-term debt(1,818)(3,355)
Repurchases of common stock(2,827)(2,499)
Cash dividends paid(2,028)(1,950)
Other(45)(74)
Net cash used for financing activities(6,609)(5,195)
Effect of foreign exchange rate changes on cash and cash equivalents(349)(21)
Net decrease in cash and cash equivalents(3,510)(3,188)
Cash and cash equivalents at beginning of period10,959 14,275 
Cash and cash equivalents at end of period$7,449 $11,087 

 Six Months Ended June 30,
 20232022
 (Dollars in millions)
Cash flows from operating activities  
Net income$2,909 $2,397 
Less: Net income attributable to noncontrolling interest28 2 
Net income attributable to Honeywell2,881 2,395 
Adjustments to reconcile net income attributable to Honeywell to net cash provided by (used for) operating activities
Depreciation327 328 
Amortization240 277 
Repositioning and other charges243 614 
Net payments for repositioning and other charges(195)(220)
NARCO Buyout payment(1,325)— 
Pension and other postretirement income(273)(521)
Pension and other postretirement benefit payments(23)(5)
Stock compensation expense109 113 
Deferred income taxes196 120 
Other(643)81 
Changes in assets and liabilities, net of the effects of acquisitions and divestitures
Accounts receivable(505)(904)
Inventories(338)(434)
Other current assets208 (38)
Accounts payable114 (240)
Accrued liabilities(440)(741)
Net cash provided by operating activities576 825 
Cash flows from investing activities
Capital expenditures(426)(341)
Proceeds from disposals of property, plant and equipment13 11 
Increase in investments(229)(470)
Decrease in investments632 646 
Receipts from Garrett Motion Inc.— 409 
Receipts (payments) from settlements of derivative contracts(38)337 
Cash paid for acquisitions, net of cash acquired(661)(178)
Net cash provided by (used for) investing activities(709)414 
Cash flows from financing activities
Proceeds from issuance of commercial paper and other short-term borrowings8,000 2,924 
Payments of commercial paper and other short-term borrowings(7,930)(2,926)
Proceeds from issuance of common stock115 75 
Proceeds from issuance of long-term debt2,966 1 
Payments of long-term debt(1,384)(89)
Repurchases of common stock(1,176)(2,437)
Cash dividends paid(1,416)(1,359)
Other(38)(21)
Net cash used for financing activities(863)(3,832)
Effect of foreign exchange rate changes on cash and cash equivalents(5)(118)
Net decrease in cash and cash equivalents(1,001)(2,711)
Cash and cash equivalents at beginning of period9,627 10,959 
Cash and cash equivalents at end of period$8,626 $8,248 

The Notes to Consolidated Financial Statements are an integral part of this statement.

46    Honeywell International Inc.
TABLE OF CONTENTS
HONEYWELL INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Shares$Shares$Shares$Shares$
 (In millions, except per share amounts)
Common stock, par value957.6 958 957.6 958 957.6 958 957.6 958 
Additional paid-in capital
Beginning balance8,397 7,566 8,141 7,292 
Issued for employee savings and option plans12 (10)146 148 
Stock-based compensation expense51 56 173 172 
Ending balance8,460 7,612 8,460 7,612 
Treasury stock
Beginning balance(283.9)(32,814)(267.2)(28,978)(272.8)(30,462)(260.8)(27,229)
Reacquired stock or repurchases of common stock(2.1)(390)(2.9)(650)(15.1)(2,827)(11.5)(2,499)
Issued for employee savings and option plans0.7 22 0.9 14 2.6 107 3.1 114 
Ending balance(285.3)(33,182)(269.2)(29,614)(285.3)(33,182)(269.2)(29,614)
Retained earnings
Beginning balance43,883 41,467 42,827 39,905 
Net income attributable to Honeywell1,552 1,257 3,947 4,114 
Dividends on common stock(668)(645)(2,007)(1,940)
Ending balance44,767 42,079 44,767 42,079 
Accumulated other comprehensive income (loss)
Beginning balance(2,883)(3,075)(2,895)(3,377)
Foreign exchange translation adjustment(409)(92)(378)250 
Pension and other postretirement benefit adjustments(10)(22)(44)(65)
Changes in fair value of available for sale investments2 — (7)(3)
Changes in fair value of cash flow hedges4 (4)28 2 
Ending balance(3,296)(3,193)(3,296)(3,193)
Noncontrolling interest
Beginning balance649 264 673 241 
Acquisitions, divestitures, and other— — — 5 
Net income (loss) attributable to noncontrolling interest(3)16 (1)54 
Foreign exchange translation adjustment(14)(1)(21)— 
Dividends paid(9)(7)(42)(32)
Contributions from noncontrolling interest holders— — 14 4 
Ending balance623 272 623 272 
Total shareowners' equity672.3 18,330 688.4 18,114 672.3 18,330 688.4 18,114 
Cash dividends per share of common stock$0.980 $0.930 $2.940 $2.790 




 Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Shares$Shares$Shares$Shares$
 (In millions, except per share amounts)
Common stock, par value957.6 958 957.6 958 957.6 958 957.6 958 
Additional paid-in capital
Beginning balance8,774 8,326 8,564 8,141 
Issued for employee savings and option plans42 18 193 134 
Stock-based compensation expense50 53 109 122 
Ending balance8,866 8,397 8,866 8,397 
Treasury stock
Beginning balance(291.9)(35,072)(276.9)(31,420)(290.0)(34,443)(272.8)(30,462)
Reacquired stock or repurchases of common stock(2.5)(477)(7.5)(1,419)(6.0)(1,176)(13.0)(2,437)
Issued for employee savings and option plans0.8 39 0.5 25 2.4 109 1.9 85 
Ending balance(293.6)(35,510)(283.9)(32,814)(293.6)(35,510)(283.9)(32,814)
Retained earnings
Beginning balance45,797 43,288 45,093 42,827 
Net income attributable to Honeywell1,487 1,261 2,881 2,395 
Dividends on common stock(688)(666)(1,378)(1,339)
Ending balance46,596 43,883 46,596 43,883 
Accumulated other comprehensive income (loss)
Beginning balance(3,538)(2,787)(3,475)(2,895)
Foreign exchange translation adjustment(73)(95)(132)31 
Pension and other postretirement benefit adjustments(12)(17)(24)(34)
Changes in fair value of available for sale investments9 (3)3 (9)
Changes in fair value of cash flow hedges3 19 17 24 
Ending balance(3,611)(2,883)(3,611)(2,883)
Noncontrolling interest
Beginning balance596 686 622 673 
Net income (loss) attributable to noncontrolling interest14 2 28 2 
Foreign exchange translation adjustment(4)(7)(3)(7)
Dividends paid(11)(32)(52)(33)
Contributions from noncontrolling interest holders— — — 14 
Ending balance595 649 595 649 
Total shareowners' equity664.0 17,894 673.7 18,190 664.0 17,894 673.7 18,190 
Cash dividends per share of common stock$1.030 $0.980 $2.060 $1.960 

The Notes to Consolidated Financial Statements are an integral part of this statement.

57    Honeywell International Inc.
TABLE OF CONTENTS
HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NOTE 1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited Consolidated Financial Statements reflect all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position, results of operations, cash flows, and shareowners' equity of Honeywell International Inc. and its consolidated subsidiaries (Honeywell or the Company) for the periods presented. The interim results of operations and cash flows should not necessarily be taken as indicative of the entire year.
Honeywell reports its quarterly financial information using a calendar convention; the first, second, and third quarters are consistently reported as ending on March 31, June 30, and September 30, respectively. It is Honeywell's practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires Honeywell's businesses to close their books on a Saturday in order to minimize the potentially disruptive effects of quarterly closing on the Company's business processes. The effects of this practice are generally not significant to reported results for any quarter and only exist within a reporting year. In the event differences in actual closing dates are material to year-over-year comparisons of quarterly or year-to-date results, Honeywell will provide appropriate disclosures. Honeywell's actual closing dates for the three and ninesix months ended SeptemberJune 30, 2023, and 2022, were July 1, 2023, and 2021, were October 1,July 2, 2022, and October 2, 2021, respectively.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Company are set forth in Note 1 Summary of Significant Accounting Policies of Notes to the Company's Consolidated Financial Statements contained in the Company’s 20212022 Annual Report on Form 10-K. The Company includes herein certain updates to those policies.
RECLASSIFICATIONS
Certain prior year amounts have beenare 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.
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 amount 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 $985 million and $992 million as of June 30, 2023, and December 31, 2022, respectively. The impact of these programs is not material to the Company's overall liquidity.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
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 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 ofadopted this guidance on January 1, 2023, with the Company’s Consolidated Financial Statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitationexception 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 torollforward that will be discontinued to alternative reference rates. Ineffective beginning 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. The Company will apply the guidance to impacted transactions during the transition period. 1, 2024. The adoption of this standard does not have a material impact 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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NOTE 3. ACQUISITIONS AND DIVESTITURES
ACQUISITIONS
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 $661 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 June 30, 2023, including $314 million of intangible assets and $298 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 Design,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. are included induring the Consolidated Balance Sheet asfirst quarter of September 30, 2022, including2023. Management recorded intangible assets of $53 million of intangible assets and allocated $129 million allocated to goodwill, which is deductible for tax purposes. The purchase accounting is subject to final adjustment, primarily for the valuation of intangible assets, amounts allocated to goodwill, and tax balances.
DIVESTITURES
In conjunction withFor the wind down of our businesses and operations in Russia (the Wind down), on September 2, 2022,six months ended June 30, 2023, the Company completed the sale of an entity domiciled in Russia in exchange for gross cash consideration of less than $1 million. The Company recognized a pre-tax gain of $10 million, which was recorded in Other (income) expense in the Consolidated Statement of Operations, driven by a favorable foreign currency cumulative translation adjustment at the time of sale. The financial results of the entity were previously included in the Performance Materials and Technologies reportable business segment.
In October 2022, the Company completed the sale of two additional entities domiciled in Russia for an immaterial amount. The financial results of the two additional entities are included in the Performance Materials and Technologies, Honeywell Building Technologies, and Safety and Productivity Solutions reportable business segments. The impact of the two additional sales will be reported in fourth quarter 2022 results.
no divestitures. As of SeptemberJune 30, 2022,2023, the Company had no material adjustments for acquisitions or divestitures completed during 2021. See Note 2 Acquisitions and Divestitures of Notes to Consolidated Financial Statements in the Company's 2021 Annual Report on Form 10-K for discussion of acquisitions and divestitures during 2021.2022.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NOTE 4. REVENUE RECOGNITION AND CONTRACTS WITH CUSTOMERS
Honeywell generates revenue fromThe Company has a comprehensive offering of products and services, including software and technologies, that are sold to a variety of customers in multiple end markets. See the following disaggregated revenue table and related discussions by reportable business segment for details.details:
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
AerospaceAerospaceAerospace
Commercial Aviation Original EquipmentCommercial Aviation Original Equipment$538 $415 $1,543 $1,282 Commercial Aviation Original Equipment$607 $527 $1,148 $1,005 
Commercial Aviation AftermarketCommercial Aviation Aftermarket1,339 1,083 3,715 3,008 Commercial Aviation Aftermarket1,533 1,208 2,956 2,376 
Defense and SpaceDefense and Space1,099 1,234 3,365 3,840 Defense and Space1,201 1,163 2,348 2,266 
2,976 2,732 8,623 8,130 
Net Aerospace salesNet Aerospace sales3,341 2,898 6,452 5,647 
Honeywell Building TechnologiesHoneywell Building TechnologiesHoneywell Building Technologies
ProductsProducts915 787 2,730 2,383 Products918 936 1,826 1,815 
Building SolutionsBuilding Solutions611 583 1,756 1,752 Building Solutions592 595 1,171 1,145 
1,526 1,370 4,486 4,135 
Net Honeywell Building Technologies salesNet Honeywell Building Technologies sales1,510 1,531 2,997 2,960 
Performance Materials and TechnologiesPerformance Materials and TechnologiesPerformance Materials and Technologies
UOPUOP633 600 1,677 1,698 UOP623 565 1,188 1,045 
Process SolutionsProcess Solutions1,141 1,160 3,472 3,422 Process Solutions1,294 1,179 2,582 2,331 
Advanced MaterialsAdvanced Materials946 750 2,718 2,288 Advanced Materials944 950 1,840 1,771 
2,720 2,510 7,867 7,408 
Net Performance Materials and Technologies salesNet Performance Materials and Technologies sales2,861 2,694 5,610 5,147 
Safety and Productivity SolutionsSafety and Productivity SolutionsSafety and Productivity Solutions
Sensing and Safety TechnologiesSensing and Safety Technologies736 748 2,237 2,520 Sensing and Safety Technologies723 748 1,427 1,501 
Productivity Solutions and ServicesProductivity Solutions and Services401 411 1,234 1,144 Productivity Solutions and Services312 449 659 848 
Warehouse and Workflow SolutionsWarehouse and Workflow Solutions590 702 1,829 2,398 Warehouse and Workflow Solutions398 632 862 1,224 
1,727 1,861 5,300 6,062 
Net Safety and Productivity Solutions salesNet Safety and Productivity Solutions sales1,433 1,829 2,948 3,573 
Corporate and All OtherCorporate and All Other2 — 4 — Corporate and All Other1 1 3 2 
Net salesNet sales$8,951 $8,473 $26,280 $25,735 Net sales$9,146 $8,953 $18,010 $17,329 
In July 2022, the Company realigned certain business units within the Safety and Productivity Solutions reportable business segment. The Safety and Retail business unit, which included ourthe gas detection and safety business, combined with the Advanced Sensing and Technologies business unit to form the Sensing and Safety Technologies business unit. The Company recast historical periods to reflect this realignment.
Aerospace – A global supplier of products, software, and services for aircrafts that it sells to OEMoriginal equipment manufacturers (OEM) and other customers in a variety of end markets including: air transport, regional, business and general aviation aircraft, airlines, aircraft operators, and defense and space contractors. 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, repair and overhaul services, and thermal systems. Aerospace also provides spare parts, repair, overhaul, and maintenance services (principally to aircraft operators) for the aftermarket. Honeywell Forge solutions are leveraged by the Company's customers as tools to turn data into predictive maintenance and predictive analytics to enable better fleet management and make flight operations more efficient.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
Honeywell Building Technologies – A global provider of products, software, solutions, and technologies that enable building owners and occupants to ensure their facilities are safe, energy efficient, sustainable, and productive. Honeywell Building Technologies products and services include advanced software applications for building control and optimization; sensors, switches, control systems, and instruments for energy management; access control; video surveillance; fire products; and installation, maintenance, and upgrades of systems. Honeywell Forge solutions enable the Company's customers to digitally manage buildings, connecting data from different assets to enable smart maintenance, improve building performance, and even protect from incoming security threats.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
Performance Materials and Technologies – A global provider in developing and manufacturing high-quality performance chemicals and materials, process technologies, and automation solutions. The reportable business segment is comprised of Process Solutions, UOP, and Advanced Materials. Process Solutions provides automation control, instrumentation, advanced software, and related services for the oil and gas, refining, pulp and paper, industrial power generation, chemicals and petrochemicals, biofuels, life sciences, and metals, minerals, and mining industries. Through its smart energy products, Process Solutions enables utilities and distribution companies to deploy advanced capabilities to improve operations, reliability, and environmental sustainability. UOP provides process technology, products, including catalysts and adsorbents, equipment, and consulting services that enable customers to efficiently produce gasoline, diesel, jet fuel, petrochemicals, and renewable fuels for the petroleum refining, gas processing, petrochemical, and other industries. Advanced Materials manufactures a wide variety of high-performance products, including materials used to manufacture end products such as bullet-resistant armor, nylon, computer chips, and pharmaceutical packaging, and provides reduced and low global-warming-potentialglobal warming potential materials based on hydrofluoro-olefin technology. In the industrial environment, Honeywell Forge solutions enable integration and connectivity to provide a holistic view of operations and turn data into clear actions to maximize productivity and efficiency. Honeywell Forge's cybersecurity capabilities help identify risks and act on cyber-related incidents, together enabling improved operations and protecting processes, people, and assets.
Safety and Productivity Solutions – A global provider of products and software that improve productivity, workplace safety, and asset performance to customers around the globe. Sensing and Safety Technologies products include PPE,personal protective equipment (PPE), apparel, gear, and footwear; gas detection technology; custom-engineered sensors, switches, and controls for sensing and productivity solutions; and cloud-based notification and emergency messaging. Productivity Solutions and Services products and services include mobile devices and software for computing, data collection, and thermal printing; supply chain and warehouse automation equipment, software and solutions; and software-based data and asset management productivity solutions. Warehouse and Workflow Solutions products and services include system design and simulation, automation solutions, performance optimization software, and lifecycle services to enable accuracy, productivity, and predictability of warehouse operations. Honeywell Forge solutions digitally automate processes to improve efficiency while reducing downtime and safety costs.
Corporate and All Other – Corporate and All Other includes revenue from Honeywell's majority-owned investment in Quantinuum. Through Quantinuum, Honeywell provides a wide range of service offerings of fully integrated quantum computing hardware and software solutions.
For a summary by disaggregated product and services sales for each reportable business segment, refer to Note 17 Segment Financial Data.
The Company recognizes revenue arising from performance obligations tooutlined in contracts with its customers that are satisfied at a point in time and over time. The disaggregation of the Company's revenue based off timing of recognition is as follows:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
Products, transferred point in timeProducts, transferred point in time61 %58 %60 %58 %Products, transferred point in time58 %61 %58 %60 %
Products, transferred over timeProducts, transferred over time13 16 14 17 Products, transferred over time12 14 13 14 
Net product salesNet product sales74 74 74 75 Net product sales70 75 71 74 
Services, transferred point in timeServices, transferred point in time7 9 8 8 Services, transferred point in time11 7 9 8 
Services, transferred over timeServices, transferred over time19 17 18 17 Services, transferred over time19 18 20 18 
Net service salesNet service sales26 26 26 25 Net service sales30 25 29 26 
Net salesNet sales100 %100 %100 %100 %Net sales100 %100 %100 %100 %
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
CONTRACT BALANCES
The Company records progress on satisfying performance obligations tounder contracts with customers and the related billings and cash collections onare recorded in the Consolidated Balance Sheet in Accounts receivable - receivable—net and Other assets (unbilled receivables (contract assets) and billed receivables) and Accrued liabilities and Other liabilities (customer advances and deposits (contract liabilities)). Unbilled receivables (contract assets) arise when the timing of cash collected from customers differs from the timing of revenue recognition, such as when contract provisions require specific milestones to be met before a customer can be billed. Unbilled receivable balance increasesContract assets are recognized when the revenue associated with the contract is recognized prior to billing and decreasesderecognized when billed in accordance with the terms of the contract. Contract liabilities increaseare recorded when customers remit contractual cash payments in advance of the Company satisfying performance obligations under contractual arrangements, including those with performance obligations to be satisfied over a period of time. Contract liabilities decreaseare derecognized when revenue is recorded, either when a milestone is met triggering the contractual right to bill or when the performance obligation is satisfied.
Contract balances are classified as assets or liabilities on a contract-by-contract basis at the end of each reporting period.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
The following table summarizes the Company's contract assets and liabilities balances:
 20222021
Contract assets - January 1$2,060 $1,618 
Contract assets - September 302,239 2,087 
Change in contract assets - increase (decrease)$179 $469 
Contract liabilities - January 1$(4,290)$(4,033)
Contract liabilities - September 30(4,177)(3,840)
Change in contract liabilities - decrease (increase)$113 $193 
Net change$292 $662 
 20232022
Contract assets—January 1$2,294 $2,060 
Contract assets—June 302,438 2,243 
Change in contract assets - increase (decrease)$144 $183 
Contract liabilities—January 1$(4,583)$(4,290)
Contract liabilities—June 30(4,179)(4,329)
Change in contract liabilities - decrease (increase)$404 $(39)
Net change$548 $144 
For the three and ninesix months ended SeptemberJune 30, 2022,2023, the Company recognized revenue of $362$528 million and $1,633$1,481 million, respectively, that was previously included in the beginning balance of contract liabilities. For the three and ninesix months ended SeptemberJune 30, 2021,2022, the Company recognized revenue of $225$344 million and $1,786$1,271 million, respectively, that was previously included in the beginning balance of contract liabilities.
Contract assets include $2,208included $2,404 million and $2,035$2,265 million of unbilled balances under long-term contracts as of SeptemberJune 30, 20222023, and December 31, 2021,2022, respectively. These amounts are billed in accordance with the terms of customer contracts to which they relate.
When contracts are modified to account for changes in contract specifications and requirements, the Company considers whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that are for goods or services that areand not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the Company's measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct and at relative stand-alone selling price, they are accounted for as a new contract and performance obligation, which are recognized prospectively.
PERFORMANCE OBLIGATIONS
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When the Company's contracts with customers require highly complex integration or manufacturing services that are not separately identifiable from other promises in the contracts and, therefore, not distinct, then the entire contract is accounted for as a single performance obligation. In situations when the Company's contract includescontracts include distinct goods or services that are substantially the same and have the same pattern of transfer to the customer over time, they are recognized as a series of distinct goods or services. For any contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the estimated relative standalonestand-alone selling price of each distinct good or service in the contract. For product sales, each product sold to a customer typically represents a distinct performance obligation. In such cases, the observable standalonestand-alone sales are used to determine the standalonestand-alone selling price.
Performance obligations are satisfied as of a point in time or over time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract.
The following table outlines the Company's remaining performance obligations disaggregated by segment: 
September 30, 2022
Aerospace$10,974 
Honeywell Building Technologies7,082 
Performance Materials and Technologies7,811 
Safety and Productivity Solutions3,270 
Corporate and All Other(1)
4 
Total Performance Obligations(2)
$29,141
(1) The remaining performance obligations within Corporate and All Other relate to the Quantinuum business.
(2) Effective March 31, 2022, performance obligations exclude contracts with customers related to Russia as collectability is not reasonably assured.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
The following table outlines the Company's remaining performance obligations disaggregated by reportable business segment:
June 30, 2023
Aerospace$12,794 
Honeywell Building Technologies7,006 
Performance Materials and Technologies8,495 
Safety and Productivity Solutions2,243 
Corporate and All Other(1)
4 
Total performance obligations$30,542
(1) The remaining performance obligations within Corporate and All Other relate to the Quantinuum business.
Performance obligations recognized as of SeptemberJune 30, 2022,2023, will be satisfied over the course of future periods. The Company's disclosure of the timing for satisfying the performance obligation is based on the requirements of contracts with customers. However, from time to time, these contracts may be subject to modifications, impacting the timing of satisfying the performance obligations. Performance obligations expected to be satisfied within one year and greater than one year are 62%59% and 38%41%, respectively.
The timing of satisfaction of the Company's performance obligations does not significantly vary from the typical timing of payment. Typical payment terms of the Company's fixed-pricefixed price over time contracts include progress payments based on specified events or milestones or based on project progress. For some contracts, the Company may be entitled to receive an advance payment.
The Company applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which the Company recognizes revenue in proportion to the amount the Company has the right to invoice for services performed.
NOTE 5. REPOSITIONING AND OTHER CHARGES
A summary of net repositioning and other charges follows:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
2022202120222021 2023202220232022
SeveranceSeverance$43 $3 $75 $63 Severance$19 $25 $86 $32 
Asset impairmentsAsset impairments5 20 153 107 Asset impairments9 25 21 148 
Exit costsExit costs20 46 78 110 Exit costs38 41 62 58 
Reserve adjustmentsReserve adjustments(2)3 (54)(18)Reserve adjustments(12)(37)(17)(52)
Total net repositioning charge66 72 252 262 
Asbestos related litigation charges, net of insurance and reimbursements29 24 115 68 
Total net repositioning chargesTotal net repositioning charges54 54 152 186 
Asbestos-related charges, net of insurance and reimbursementsAsbestos-related charges, net of insurance and reimbursements34 40 55 86 
Probable and reasonably estimable environmental liabilities, net of reimbursementsProbable and reasonably estimable environmental liabilities, net of reimbursements3 3 19 14 Probable and reasonably estimable environmental liabilities, net of reimbursements12 2 34 16 
Other2 (3)328 (6)
Other chargesOther charges2 131 2 326 
Total net repositioning and other chargesTotal net repositioning and other charges$100 $96 $714 $338 Total net repositioning and other charges$102 $227 $243 $614 
The following table summarizes the pretaxpre-tax distribution of total net repositioning and other charges by classification:classification in the Consolidated Statement of Operations:
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Cost of products and services sold$85 $63 $429 $248 
Selling, general and administrative expenses24 33 237 90 
Other (income) expense(9)— 48 — 
 $100 $96 $714 $338 
The following table summarizes the pretax impact of total net repositioning and other charges by segment. These amounts are excluded from segment profit as described in Note 17 Segment Financial Data:
Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Aerospace$(2)$(2)$34 $55 
Honeywell Building Technologies10 5 47 9 
Performance Materials and Technologies15 5 262 12 
Safety and Productivity Solutions55 40 197 136 
Corporate and All Other22 48 174 126 
 $100 $96 $714 $338 
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Cost of products and services sold$63 $145 $143 $344 
Selling, general and administrative expenses26 25 91 213 
Other (income) expense13 57 9 57 
Total net repositioning and other charges$102 $227 $243 $614 
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(Unaudited)
(Dollars in tables in millions, except per share amounts)
The following table summarizes the pre-tax amount of total net repositioning and other charges by reportable business segment. These amounts are excluded from segment profit as described in Note 17 Segment Financial Data:
Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Aerospace$8 $15 $11 $36 
Honeywell Building Technologies4 23 31 37 
Performance Materials and Technologies4 88 23 247 
Safety and Productivity Solutions31 15 71 142 
Corporate and All Other55 86 107 152 
Total net repositioning and other charges$102 $227 $243 $614 
In the three months ended SeptemberJune 30, 2022,2023, the Company recognized gross repositioning charges totaling $68$66 million, including severance costs of $43$19 million related to workforce reductions of 1,276764 manufacturing and administrative positions primarily in the Company's Safety and Productivity Solutions reportable business segment. The workforce reductions were related to our productivity and ongoing functional transformation initiatives. The repositioning chargecharges included asset impairments of $5$9 million primarily related to the write-down of certain manufacturing equipment.assets within the Company's Safety and Productivity Solutions reportable business segment. The repositioning chargecharges also included exit costs of $20$38 million related to current period costs incurred for closure obligations associated with site transitions inacross all of the Company's Safety and Productivity Solutions and Aerospace reportable business segments.segments and corporate function. Also, $12 million of previously established reserves, primarily for severance, were returned to income due to adjustments to the scope of previously announced repositioning actions.
In the three months ended SeptemberJune 30, 2021,2022, the Company recognized gross repositioning charges totaling $69$91 million, including severance costs of $3$25 million related to workforce reductions of 603468 manufacturing and administrative positions mainlyprimarily in the Company's Safety and Productivity Solutions reportable business segment. The workforce reductions were primarily related to the re-alignment of a product line in the Company's Safety and Productivity Solutions reportable business segment and to our productivity and ongoing functional transformation initiatives. The repositioning chargecharges included asset impairments of $20$25 million related to the write-down of certain manufacturing equipment. The repositioning chargecharges also included exit costs of $46$41 million primarily related to current period exit costs incurred for new and previously approved repositioning projects and closure obligations associated with site transitions in the Company's Performance Materials and Technologies and Aerospace reportable business segments. Also, $37 million of previously established reserves, primarily for severance, were returned to income due to adjustments to the scope of previously announced repositioning actions.
In the six months ended June 30, 2023, the Company recognized gross repositioning charges totaling $169 million, including severance costs of $86 million related to workforce reductions of 2,561 manufacturing and administrative positions primarily in the Company's Safety and Productivity Solutions and Honeywell Building Technologies reportable business segments. The workforce reductions were primarily related to productivity and ongoing functional transformation initiatives. The repositioning charges included asset impairments of $21 million related to the write-down of certain assets within the Company's Safety and Productivity Solutions reportable business segment. The repositioning charges also included exit costs of $62 million related to current period costs incurred for closure obligations associated with site transitions across all of the Company's reportable business segments and lease obligationscorporate function. Also, $17 million of previously established reserves, primarily for equipment.severance, were returned to income due to adjustments to the scope of previously announced repositioning actions.
In the ninesix months ended SeptemberJune 30, 2022, the Company recognized gross repositioning charges totaling $306$238 million, including asset impairments of $153 million for the write-down of certain manufacturing equipment, primarily related to closing and relocating the production of certain respiratory manufacturing from a U.S.-based facility to a non-U.S. facility in the Company's Safety and Productivity and Solutions reportable business segment.segment, productivity and ongoing functional transformation initiatives, and other site transactions. The repositioning chargecharges included asset impairments of $148 million related to the write-down of certain manufacturing equipment. The repositioning charges included exit costs of $78$58 million primarily related to current period exit costs incurred for new and previously approved repositioning projects and closure obligations associated with site transitions in the Company's Performance Materials and Technologies and Aerospace reportable business segments. The repositioning charge alsocharges included severance costs of $75$32 million related to workforce reductions of 2,9401,664 manufacturing and administrative positions across ourthe Company's reportable business segments. The workforce reductions were primarily related to cost savings actions taken in connection with our productivity and ongoing functional transformation initiatives and to site transitions to more cost-effective locations. Also, $54 million of previously established reserves, primarily for severance, were returned to income due to higher than expected voluntary exits and adjustments to the scope of previously announced repositioning actions.
In the nine months ended September 30, 2021, the Company recognized gross repositioning charges totaling $280 million including severance costs of $63 million related to workforce reductions of 5,252 manufacturing and administrative positions mainly in the Company's Safety and Productivity Solutions and Aerospace reportable business segments. The workforce reductions were primarily related to the re-alignment of a product line in the Company's Safety and Productivity Solutions reportable business segment, site transitions, mainly in the Company's Aerospace reportable business segment, to more cost-effective locations, and our productivity and ongoing functional transformation initiatives. The repositioning charge included asset impairments of $107 million related to the write-down of certain manufacturing and other equipment. The repositioning charge included exit costs of $110 million for current period costs incurred for closure obligations associated with site transitions, and lease obligations for equipment. Also, $18$52 million of previously established reserves, primarily for severance, were returned to income due to adjustments to the scope of previously announced repositioning actions.
The following table summarizes the status of the Company's total repositioning reserves:
Severance
Costs		Asset
Impairments		Exit
Costs		Total
Balance at December 31, 2021$289 $— $122 $411 
Charges75 153 78 306 
Usage - cash(120)— (86)(206)
Usage - noncash— (145)(14)(159)
Foreign currency translation(18)— (2)(20)
Adjustments(40)(8)(6)(54)
Balance at September 30, 2022$186 $— $92 $278 
Certain repositioning projects will recognize exit costs in future periods when the actual liability is incurred. Such exit costs incurred in the nine months ended September 30, 2022 and 2021, were $46 million and $30 million, respectively.
During the three months ended September 30, 2022, the Company recognized a net reduction of Other charges previously recognized of $16 million. The Other charges include costs incurred related to the Wind down of our operations in Russia. The reduction of Other charges primarily relates to a favorable foreign exchange revaluation on an intercompany loan with a Russian affiliate, in addition to the recovery of outstanding accounts receivable previously reserved against, recorded to Other (income) expense and Selling, general and administrative expense on the Consolidated Statement of Operations, respectively. This was partially offset by the recognition of an additional expense for called guarantees recorded to Other (income) expense on the Consolidated Statement of Operations.
1214    Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
The following table summarizes the status of the Company's total repositioning reserves:
Severance
Costs		Asset
Impairments		Exit
Costs		Total
Balance at December 31, 2022$235 $— $74 $309 
Charges86 21 62 169 
Usage—cash(104)— (46)(150)
Usage—noncash— (19)— (19)
Foreign currency translation6 — 16 22 
Adjustments(12)(2)(5)(19)
Balance at June 30, 2023$211 $— $101 $312 
Certain repositioning projects will recognize exit costs in future periods when the actual liability is incurred. Such exit costs incurred in the six months ended June 30, 2023, and 2022, were $25 million and $31 million, respectively.
During the ninethree and six months ended SeptemberJune 30, 2023, the Company recorded a fair value adjustment, within Asbestos-related charges, net of insurance and reimbursements in the table above and Other (income) expense on the Consolidated Statement of Operations, related to HWI Net Sale Proceeds (as defined in Note 11 Fair Value Measurements) and reduced the estimate by $11 million. See Note 11 Fair Value Measurements and Note 14 Commitments and Contingencies for further discussion.
During the three and six months ended June 30, 2022, the Company recognized $291Other charges of $124 million of Other charges.and $307 million, respectively. The Other charges includeincluded costs incurred related to the initial suspension of substantially all of the Company's sales, distribution, and service activities in Russian and Belarus (the Suspension) and Windthe Company’s plan to wind down of ourexisting businesses and operations in Russia. TheseRussia due to the ongoing Russia-Ukraine conflict (the Wind down). Through the Wind down of businesses and operations, the Company will seek to collect outstanding accounts receivables, liquidate our inventory and fixed assets, negotiate and settle existing contractual obligations, trade payables and guarantees, and terminate and payout severance to impacted employees.
Other charges included costs impactedrecorded by all reportable business segments, with the most significant impact within the Performance Materials and Technologies reportable business segment. The Other charges includeincluded costs recorded in Cost of products sold, Selling, general and administrative expenses, or Other (income) expense on the Consolidated Statement of Operations.Operations, based on the nature of each specific charge or accrual of reserve. For the ninethree months ended SeptemberJune 30, 2022, Cost of products and services sold includesincluded $60 million primarily related to inventory reserves and the write-down of other assets, Selling, general and administrative includes $183included $7 million primarily related to employee severance, and Other (income) expense included $57 million related to foreign exchange revaluation on an intercompany loan with a Russian affiliate and impairment of property, plant and equipment. For the six months ended June 30, 2022, Cost of products and services sold included $60 million primarily related to inventory reserves and the write-down of other assets, Selling, general and administrative included $190 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 $48included $57 million related to foreign exchange revaluation on an intercompany loan with a Russian affiliate and impairment of property, plant and equipment, and expenses for called guarantees.equipment. For the ninethree and six months ended SeptemberJune 30, 2022, the Other charges doesdid not include a $2 million tax valuation allowance recorded to Tax expense on the Consolidated Statement of Operations, directly attributable to ourthe Wind down of businesses and operations in Russia.
Given the uncertainty inherent in the Company's remaining obligations related to our 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 Windthe wind down of activities, including any guarantee payments or any litigation costs or as otherwise related to the Company's Windwind 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 14 Commitments and Contingencies for a discussion of the recognition and measurement of estimate for contingencies.
NOTE 6. INCOME TAXES
The effective tax rate was higher than the U.S. federal statutory rate of 21% and increaseddecreased during 20222023 compared to 20212022 primarily due to chargescaused by increased benefits from taxes on non-U.S. earnings and accrual of reserves directly attributable to the initial Suspension and Wind down of our businesses and operations in Russia without corresponding tax benefit, an expenselower repositioning related to UOP matters without corresponding tax benefit, lower tax benefits for employee share-based compensation, and incremental tax reserves and state taxes,expenses, partially offset by the favorable resolution of certaintax expense from accrued withholding tax related to unremitted foreign tax matters.
NOTE 7. INVENTORIES
 September 30, 2022December 31, 2021
Raw materials$1,394 $1,352 
Work in process1,041 861 
Finished products3,066 2,925 
 $5,501 $5,138 
earnings.
1315    Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NOTE 7. INVENTORIES
 June 30, 2023December 31, 2022
Raw materials$1,504 $1,407 
Work in process1,205 1,049 
Finished products3,181 3,082 
Total Inventories$5,890 $5,538 
NOTE 8. LONG-TERM DEBT AND CREDIT AGREEMENTS
September 30, 2022December 31, 2021 June 30, 2023December 31, 2022
0.483% notes due 2022$— $500 
2.15% notes due 2022— 600 
Floating rate notes due 2022— 600 
1.30% Euro notes due 20231.30% Euro notes due 20231,218 1,416 1.30% Euro notes due 2023$— $1,334 
3.35% notes due 20233.35% notes due 2023300 300 3.35% notes due 2023300 300 
0.00% Euro notes due 20240.00% Euro notes due 2024487 566 0.00% Euro notes due 2024547 534 
2.30% notes due 20242.30% notes due 2024750 750 2.30% notes due 2024750 750 
4.85% notes due 20244.85% notes due 2024400 400 
1.35% notes due 20251.35% notes due 20251,250 1,250 1.35% notes due 20251,250 1,250 
2.50% notes due 20262.50% notes due 20261,500 1,500 2.50% notes due 20261,500 1,500 
1.10% notes due 20271.10% notes due 20271,000 1,000 1.10% notes due 20271,000 1,000 
3.50% Euro notes due 20273.50% Euro notes due 2027711 — 
4.95% notes due 20284.95% notes due 2028500 500 
2.25% Euro notes due 20282.25% Euro notes due 2028731 849 2.25% Euro notes due 2028821 800 
4.25% notes due 20294.25% notes due 2029750 — 
2.70% notes due 20292.70% notes due 2029750 750 2.70% notes due 2029750 750 
1.95% notes due 20301.95% notes due 20301,000 1,000 1.95% notes due 20301,000 1,000 
1.75% notes due 20311.75% notes due 20311,500 1,500 1.75% notes due 20311,500 1,500 
0.75% Euro notes due 20320.75% Euro notes due 2032487 566 0.75% Euro notes due 2032547 534 
3.75% Euro notes due 20323.75% Euro notes due 2032547 — 
5.00% notes due 20335.00% notes due 20331,100 1,100 
4.50% notes due 20344.50% notes due 20341,000 — 
4.125% Euro notes due 20344.125% Euro notes due 20341,094 1,067 
5.70% notes due 20365.70% notes due 2036441 441 5.70% notes due 2036441 441 
5.70% notes due 20375.70% notes due 2037462 462 5.70% notes due 2037462 462 
5.375% notes due 20415.375% notes due 2041417 417 5.375% notes due 2041417 417 
3.812% notes due 20473.812% notes due 2047445 445 3.812% notes due 2047445 445 
2.80% notes due 20502.80% notes due 2050750 750 2.80% notes due 2050750 750 
Industrial development bond obligations, floating rate maturing at various dates through 2037Industrial development bond obligations, floating rate maturing at various dates through 203722 22 Industrial development bond obligations, floating rate maturing at various dates through 203722 22 
6.625% debentures due 20286.625% debentures due 2028201 201 6.625% debentures due 2028201 201 
9.065% debentures due 20339.065% debentures due 203351 51 9.065% debentures due 203351 51 
Other (including capitalized leases), 7.9% weighted average interest rate maturing at various dates through 2029282 272 
Other (including capitalized leases), 8.0% weighted average interest rate maturing at various dates through 2029Other (including capitalized leases), 8.0% weighted average interest rate maturing at various dates through 2029230 265 
Fair value of hedging instrumentsFair value of hedging instruments(294)60 Fair value of hedging instruments(285)(287)
Debt issuance costsDebt issuance costs(199)(211)Debt issuance costs(256)(233)
13,551 16,057 
Less-current portion(1,315)(1,803)
$12,236 $14,254 
Total Long-term debt and current related maturitiesTotal Long-term debt and current related maturities18,545 16,853 
Less: Current maturities of long-term debtLess: Current maturities of long-term debt945 1,730 
Total Long-term debtTotal Long-term debt$17,600 $15,123 
16    Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
On August 8, 2022,May 17, 2023, the Company issued $750 million 4.25% Senior Notes due 2029 and $1.0 billion 4.50% Senior Notes due 2034 (collectively, the 2023 USD Notes). The Company may redeem the 2023 USD Notes at any time, and from time to time, in whole or in part, at the Company's option at the applicable redemption price. The offering provided gross proceeds of $1.8 billion, offset by $20 million in discount and closing costs related to the offering.
On May 17, 2023, the Company issued €650 million 3.50% Senior Notes due 2027 and €500 million 3.75% Senior Notes due 2032 (collectively, the 2023 Euro Notes). The Company may redeem the 2023 Euro Notes at any time, and from time to time, in whole or in part, at the Company's option at the applicable redemption price. The offering provided gross proceeds of $1.2 billion, offset by $12 million in discount and closing costs related to the offering.
The 2023 USD Notes and 2023 Euro Notes are senior unsecured and unsubordinated obligations of the Company and rank equally with each other and with all of the Company's existing and future senior unsecured debt and senior to all of the Company's subordinated debt. The Company intends to use the proceeds from the issuances for the repayment of commercial paper and general corporate purposes.
On February 22, 2023, the Company repaid its 2.15% and its Floating rate1.30% Euro notes due 2022. On August 19, 2022, the Company repaid its 0.483% notes due 2022.2023.
On March 24, 2022,20, 2023, the Company entered into a $1.5 billion 364-day credit agreement (the 364-Day Credit Agreement) and a $4.0 billion Amendedamended and Restated Five Year Credit Agreementrestated five-year credit agreement (the 5-Year Credit Agreement) and a $1.5 billion. The 364-Day Credit Agreement (thereplaced the $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. Amounts borrowed under the 364-Day Credit Agreement).Agreement are required to be repaid no later than March 18, 2024, unless (i) Honeywell elects 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 5-Year Credit Agreement amended and restated the previously reported $4.0 billion amended and restated five-yearfive-year credit agreement dated as of March 31, 2021.24, 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 364-Day Credit Agreement replaced the $1.5 billion 364-day credit agreement dated as of March 31, 2021, which was terminated in accordance with its terms effective March 24, 2022. Amounts borrowed under the 364-Day Credit Agreement are required to be repaid no later than March 23, 2023, unless (i) Honeywell elects 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. Theand 5-Year Credit Agreement and the 364-Day Credit Agreement are maintained for general corporate purposes.
As of SeptemberJune 30, 2022,2023, there were no outstanding borrowings under the 5-Year364-Day Credit Agreement or the 364-Day5-Year Credit Agreement.
NOTE 9. LEASES
The Company's operating and finance lease portfolio is described in Note 10 Leases of Notes to Consolidated Financial Statements in the Company's 2022 Annual Report on Form 10-K.
Supplemental cash flow information related to leases was as follows:
Six Months Ended June 30,
20232022
Right-of-use assets obtained in exchange for lease obligations
Operating leases$91 $64 
Finance leases25 28 
1417    Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NOTE 9. LEASES
The Company's operating and finance lease portfolio is described in Note 10 Leases of Notes to Consolidated Financial Statements in the 2021 Annual Report on Form 10-K.
Supplemental cash flow information related to leases was as follows:
Nine Months Ended September 30,
20222021
Net right-of-use assets obtained in exchange for lease obligations:
Operating leases$86 $290 
Finance leases43 24 
Supplemental balance sheet information related to leases was as follows:
September 30, 2022December 31, 2021
Operating leases
Other assets$874 $947 
Accrued liabilities191 185 
Other liabilities771 847 
Total operating lease liabilities$962 $1,032 
Financing leases
Property, plant and equipment$382 $325 
Accumulated depreciation(160)(177)
Property, plant and equipment - net$222 $148 
Current maturities of long-term debt73 57 
Long-term debt152 99 
Total financing lease liabilities$225 $156 
15Honeywell International Inc.
June 30, 2023December 31, 2022
Operating leases
Other assets$901 $881 
Accrued liabilities192 192 
Other liabilities799 775 
Total operating lease liabilities991 967 
Financing leases
Property, plant and equipment398 383 
Accumulated depreciation(179)(161)
Property, plant and equipment—net219 222 
Current maturities of long-term debt85 77 
Long-term debt129 145 
Total financing lease liabilities$214 $222 
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NOTE 10. DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS
Honeywell's credit, market, foreign currency, and interest rate, credit, and commodity price risk management policies are described in Note 11 Derivative Instruments and Hedging Transactions of Notes to Consolidated Financial Statements in the Company's 20212022 Annual Report on Form 10-K. All derivative assets are presented in Other current assets or Other assets. All derivative liabilities are presented in Accrued liabilities or Other liabilities.
In March 2022, the Company entered into various contracts to mitigate commodity price volatility. 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 enters into commodity derivative instruments. The Company elected to apply hedge accounting to these contracts.
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 as of SeptemberJune 30, 2022,2023, and December 31, 2021:2022:
NotionalFair Value AssetFair Value (Liability)
September 30, 2022December 31, 2021September 30, 2022December 31, 2021September 30, 2022December 31, 2021
Derivatives in Fair Value Hedging Relationships:   
Interest rate swap agreements$3,768 $3,150 $— $60 $(294)$— 
Derivatives in Cash Flow Hedging Relationships:
Foreign currency exchange contracts785 647 46 4 (5)— 
Commodity contracts5 — — — (1)— 
Derivatives in Net Investment Hedging Relationships:
Foreign currency exchange contracts700 746 156 92 — — 
Cross currency swap agreements1,200 1,200 203 39 — — 
Total Derivatives Designated as Hedging Instruments6,458 5,743 405 195 (300)— 
Derivatives Not Designated as Hedging Instruments:
Foreign currency exchange contracts10,627 11,278 485 278 (493)(282)
Total Derivatives at Fair Value$17,085 $17,021 $890 $473 $(793)$(282)
NotionalFair Value AssetFair Value (Liability)
June 30, 2023December 31, 2022June 30, 2023December 31, 2022June 30, 2023December 31, 2022
Derivatives in fair value hedging relationships   
Interest rate swap agreements$5,018 $4,984 $3 $16 $(288)$(303)
Derivatives in cash flow hedging relationships
Foreign currency exchange contracts502 866 40 19 — (5)
Commodity contracts8 9 — — (2)(1)
Derivatives in net investment hedging relationships
Cross currency swap agreements4,189 3,189 38 90 (22)— 
Total derivatives designated as hedging instruments9,717 9,048 81 125 (312)(309)
Derivatives not designated as hedging instruments
Foreign currency exchange contracts8,582 9,679 4 74 (16)(3)
Total derivatives at fair value$18,299 $18,727 $85 $199 $(328)$(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 instruments listed above,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 $3,505$6,109 million and $4,074$3,836 million as of SeptemberJune 30, 2022,2023, and December 31, 2021,2022, respectively.
The following table sets forth the amounts recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges:
Line in the Consolidated Balance Sheet of Hedged ItemCarrying Amount of the Hedged ItemCumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Item
September 30, 2022December 31, 2021September 30, 2022December 31, 2021
Long-term debt$3,474 $3,210 $(294)$60 
16Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
The following tables summarize the location and impact to the Consolidated Statement of Operations related to derivative instruments:
Three Months Ended September 30, 2022
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling, general and administrative expensesOther
(Income)
Expense		Interest and Other
Financial Charges
$8,951 4,630 $1,351 $1,228 $(337)$98 
Gain or (loss) on cash flow hedges:
Foreign currency exchange contracts:
Amount reclassified from accumulated other comprehensive income into income4 20 6 (2)— — 
Gain or (loss) on fair value hedges:
Interest rate swap agreements:
Hedged items— — — — — 186 
Derivatives designated as hedges— — — — — (186)
Gain or (loss) on net investment hedges:
Foreign Currency Exchange Contracts:
Amount excluded from effectiveness testing recognized in earnings using an amortization approach— — — — — 4
Gain or (loss) on derivatives not designated as hedging instruments:
Foreign currency exchange contracts— — — — 402 — 
Three Months Ended September 30, 2021
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling, general and administrative expensesOther
(Income)
Expense		Interest and Other
Financial Charges
$8,473 $4,463 $1,283 $1,152 $(215)$90 
Gain or (loss) on cash flow hedges:
Foreign currency exchange contracts:
Amount reclassified from accumulated other comprehensive income into income2 2 1 3 — — 
Gain or (loss) on fair value hedges:
Interest rate swap agreements:
Hedged items— — — — — 14 
Derivatives designated as hedges— — — — — (14)
Gain or (loss) on net investment hedges:
Foreign Currency Exchange Contracts:
Amount excluded from effectiveness testing recognized in earnings using an amortization approach— — — — — 4 
Gain or (loss) on derivatives not designated as hedging instruments:
Foreign currency exchange contracts— — — — 103 — 
17Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
Nine Months Ended September 30, 2022
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling, general and administrative expensesOther
(Income)
Expense		Interest and Other
Financial Charges
$26,280 $13,676 $4,025 $3,965 $(846)$270 
Gain or (loss) on cash flow hedges:
Foreign currency exchange contracts:
Amount reclassified from accumulated other comprehensive income into income7 32 9 (2)— — 
Gain or (loss) on fair value hedges:
Interest rate swap agreements:
Hedged items— — — — — 354 
Derivatives designated as hedges— — — — — (354)
Gain or (loss) on net investment hedges:
Foreign Currency Exchange Contracts:
Amount excluded from effectiveness testing recognized in earnings using an amortization approach— — — — — 11
Gain or (loss) on derivatives not designated as hedging instruments:
Foreign currency exchange contracts— — — — 749 — 
Nine Months Ended September 30, 2021
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling, general and administrative expensesOther
(Income)
Expense		Interest and Other
Financial Charges
$25,735 $13,748 $3,710 $3,595 $(1,023)$263 
Gain or (loss) on cash flow hedges:
Foreign currency exchange contracts:
Amount reclassified from accumulated other comprehensive income into income4 6 1 7 — — 
Gain or (loss) on fair value hedges:
Interest rate swap agreements:
Hedged items— — — — — 94 
Derivatives designated as hedges— — — — — (94)
Gain or (loss) on net investment hedges:
Foreign Currency Exchange Contracts:
Amount excluded from effectiveness testing recognized in earnings using an amortization approach— — — — — 12 
Gain or (loss) on derivatives not designated as hedging instruments:
Foreign currency exchange contracts— — — — 92 — 
18    Honeywell International Inc.
TABLE OF CONTENTS
HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
The following table sets forth the amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges:
Carrying Amount of Hedged ItemCumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Item
June 30, 2023December 31, 2022June 30, 2023December 31, 2022
Long-term debt$4,733 $4,696 $(285)$(287)
The following tables summarize the location and impact to the Consolidated Statement of Operations related to derivative instruments:
Three Months Ended June 30, 2023
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling,
General and
Administrative
Expenses		Other
(Income)
Expense		Interest and Other
Financial Charges
$9,146 $4,133 $1,493 $1,262 $(208)$187 
Gain or (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive income (loss) into income2 6 2 3 — — 
Gain or (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — 65 
Derivatives designated as hedges— — — — — (65)
Gain or (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — (69)— 
Three Months Ended June 30, 2022
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling,
General and
Administrative
Expenses		Other
(Income)
Expense		Interest and Other
Financial Charges
$8,953 $4,329 $1,331 $1,306 $(190)$87 
Gain or (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive income (loss) into income2 11 3 (1)— — 
Gain or (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — 31 
Derivatives designated as hedges— — — — — (31)
Gain or (loss) on net investment hedges
Foreign currency exchange contracts
Amount excluded from effectiveness testing recognized in earnings using an amortization approach— — — — — 3 
Gain or (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — 281 — 
19    Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
Six Months Ended June 30, 2023
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling,
General and
Administrative
Expenses		Other
(Income)
Expense		Interest and Other
Financial Charges
$18,010 $8,201 $2,923 $2,579 $(468)$357 
Gain or (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive income (loss) into income3 9 3 4 — — 
Gain or (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — (2)
Derivatives designated as hedges— — — — — 2 
Gain or (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — (149)— 
Six Months Ended June 30, 2022
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling,
General and
Administrative
Expenses		Other
(Income)
Expense		Interest and Other
Financial Charges
$17,329 $8,388 $2,596 $2,737 $(509)$172 
Gain or (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive income (loss) into income3 12 3 — — — 
Gain or (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — 168 
Derivatives designated as hedges— — — — — (168)
Gain or (loss) on net investment hedges
Foreign currency exchange contracts
Amount excluded from effectiveness testing recognized in earnings using an amortization approach— — — — — 7 
Gain or (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — 347 — 
The following table summarizes the amounts of gain or (loss) on net investment hedges recognized in Accumulated other comprehensive income (loss):
Derivatives Net Investment Hedging RelationshipsThree Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Euro-denominated long-term debtEuro-denominated long-term debt$207 $67 $474 $202 Euro-denominated long-term debt$(37)$184 $(86)$267 
Euro-denominated commercial paperEuro-denominated commercial paper41 13 94 40 Euro-denominated commercial paper(15)36 (43)53 
Cross currency swap97 25 177 53 
Cross currency swap agreementsCross currency swap agreements(18)63 (75)80 
Foreign currency exchange contractsForeign currency exchange contracts31 6 62 18 Foreign currency exchange contracts— 31 — 31 
20    Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NOTE 11. FAIR VALUE MEASUREMENTS
The accounting guidance for fair value measurements and disclosures establishes a three-level fair value hierarchy:
•Level 1 - Inputs are based on quoted prices in active markets for identical assets and liabilities.
•Level 2 - Inputs are based on observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
•Level 3 - One or more inputs are unobservable and significant.
Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis:
September 30, 2022December 31, 2021 June 30, 2023December 31, 2022
Level 1Level 2TotalLevel 1Level 2TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:  
AssetsAssets  
Foreign currency exchange contractsForeign currency exchange contracts$— $687 $687 $— $374 $374 Foreign currency exchange contracts$— $44 $— $44 $— $93 $— $93 
Available for sale investmentsAvailable for sale investments83 581 664 176 566 742 Available for sale investments61 197 — 258 87 559 — 646 
Interest rate swap agreementsInterest rate swap agreements— — — — 60 60 Interest rate swap agreements— 3 — 3 — 16 — 16 
Cross currency swap agreementsCross currency swap agreements— 203 203 — 39 39 Cross currency swap agreements— 38 — 38 — 90 — 90 
Investments in equity securitiesInvestments in equity securities16 24 40 34 23 57 Investments in equity securities54 — — 54 22 32 — 54 
Right to HWI Net Sale ProceedsRight to HWI Net Sale Proceeds— — 9 9 — — 295 295 
Total assetsTotal assets$99 $1,495 $1,594 $210 $1,062 $1,272 Total assets$115 $282 $9 $406 $109 $790 $295 $1,194 
Liabilities:
LiabilitiesLiabilities
Foreign currency exchange contractsForeign currency exchange contracts$— $498 $498 $— $282 $282 Foreign currency exchange contracts$— $16 $— $16 $— $8 $— $8 
Interest rate swap agreementsInterest rate swap agreements— 294 294 — — — Interest rate swap agreements— 288 — 288 — 303 — 303 
Commodity contractsCommodity contracts— 1 1 — — — Commodity contracts— 2 — 2 — 1 — 1 
Cross currency swap agreementsCross currency swap agreements— 22 — 22 — — — — 
Total liabilitiesTotal liabilities$— $793 $793 $— $282 $282 Total liabilities$— $328 $— $328 $— $312 $— $312 
The foreign currency exchange contracts, interest rate swap agreements, cross currency swap agreements, and commodity contracts are valued using broker quotations, or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within level 2. The Company also holds investments in commercial paper, certificates of deposits, time deposits, and corporate debt securities that are designated as available for sale, as well as investments in equity securities, which includes holdings of Garrett Motion Inc. (Garrett) Series A Preferred Stock.sale. These investments are valued using published prices based offon observable market data. As such, these investments are classified within level 2.
The Company holds certain available for sale investments in U.S. government securities and investments in equity securities, which includes holdings of Garrett common stock.securities. These investments are valued utilizing published prices based on quoted market pricing, which are classified within level 1.
The carrying value of cash and cash equivalents, trade accounts and notes receivables, payables, commercial paper, and other short-term borrowings approximates fair value.
As part of Septemberthe NARCO Buyout (see Note 14 Commitments and Contingencies for definition), Honeywell holds a right to proceeds from the definitive sale agreement pursuant to which HarbisonWalker International Holdings, Inc. (HWI), the reorganized and renamed entity that emerged from the NARCO Bankruptcy, was acquired by an affiliate of Platinum Equity, LLC (HWI Sale). The right to these proceeds is considered a financial instrument. The significant input for the valuation of this right is unobservable, and as such, is classified within level 3.
The HWI Sale closed on February 16, 2023. During the six months ended June 30, 2022,2023, Honeywell received $275 million of proceeds from the HWI Sale (HWI Net Sale Proceeds), of which $256 million was received during the first quarter of 2023 and $19 million during the second quarter of 2023. Additionally, during the three months ended June 30, 2023, the Company does not consider any assets or liabilities measured atrecorded a fair value adjustment for the HWI Net Sale Proceeds and reduced the estimate by $11 million. The fair value of the remaining HWI Net Sale Proceeds as level 3.of June 30, 2023, represents contingent consideration to be paid in future periods if certain conditions under the definitive sale agreement for the HWI Sale are met.
1921    Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
The following table sets forth a reconciliation of beginning and ending balances of assets and liabilities that were accounted for at fair value using level 3 measurements:
Three Months Ended June 30, 2023Six Months Ended June 30, 2023
Balance at beginning of period$39 $295 
Receipt of HWI Net Sale Proceeds(19)(275)
Fair value adjustment of HWI Net Sale Proceeds(11)(11)
Balance at end of period$9 $9 
The following table sets forth the Company’s financial assets and liabilities that were not carried at fair value:
September 30, 2022December 31, 2021 June 30, 2023December 31, 2022
Carrying
Value		Fair
Value		Carrying
Value		Fair
Value		 Carrying
Value		Fair
Value		Carrying
Value		Fair
Value
AssetsAssets    Assets    
Short-term investment$— $— $34 $34 
Long-term receivablesLong-term receivables159 129 170 152 Long-term receivables$229 $168 $229 $183 
Long-term investment— — 366 366 
LiabilitiesLiabilitiesLiabilities
Long-term debt and related current maturitiesLong-term debt and related current maturities$13,551 $15,572 $16,057 $17,022 Long-term debt and related current maturities$18,545 $17,157 $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. As such, the fair valuesvalue of these receivables areis considered level 2.
On April 30, 2021, the Company received shares of Garrett Series B Preferred Stock in full and final satisfaction of the Garrett Indemnity and Tax Matters Agreement. 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. 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. The discount accreted to interest income over the mandatory redemption period. The investment was designated as held to maturity and was initially recognized at fair value. The fair value of Garrett's Series B Preferred Stock was determined using observable market data and was considered level 2. Fair Value of the Series B Preferred Stock was not impacted by early redemptions until receipt of payment.
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.
The Company determined the fair value of the long-term debt and related current maturities utilizing transactions in the listed markets for identical or similar liabilities. As such, the fair value of the long-term debt and related current maturities is considered level 2. 

20Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NOTE 12. EARNINGS PER SHARE
Three Months Ended September 30,Nine Months Ended September 30,
Basic2022202120222021
Net income attributable to Honeywell$1,552 $1,257 $3,947 $4,114 
Weighted average shares outstanding674.1 690.6 679.3 693.6 
Earnings per share of common stock - basic$2.30 $1.82 $5.81 $5.93 
The details of the earnings per share calculations for the three and six months ended June 30, 2023, and 2022, are as follows (shares in millions):
 Three Months Ended September 30,Nine Months Ended September 30,
Assuming Dilution2022202120222021
Net income attributable to Honeywell$1,552 $1,257 $3,947 $4,114 
Average Shares
Weighted average shares outstanding674.1 690.6 679.3 693.6 
Dilutive securities issuable - stock plans5.5 8.3 6.0 8.4 
Total weighted average diluted shares outstanding679.6 698.9 685.3 702.0 
Earnings per share of common stock - assuming dilution$2.28 $1.80 $5.76 $5.86 
Three Months Ended June 30,Six Months Ended June 30,
Basic2023202220232022
Net income attributable to Honeywell$1,487 $1,261 $2,881 $2,395 
Weighted average shares outstanding665.3 679.0 666.5 681.8 
Earnings per share of common stock—basic$2.24 $1.86 $4.32 $3.51 
 Three Months Ended June 30,Six Months Ended June 30,
Assuming Dilution2023202220232022
Net income attributable to Honeywell$1,487 $1,261 $2,881 $2,395 
Average shares
Weighted average shares outstanding665.3 679.0 666.5 681.8 
Dilutive securities issuable—stock plans4.9 6.0 5.4 6.3 
Total weighted average diluted shares outstanding670.2 685.0 671.9 688.1 
Earnings per share of common stock—assuming dilution$2.22 $1.84 $4.29 $3.48 
The diluted earnings per share calculations exclude the effect of stock options when the options’cost to exercise price exceedan option exceeds the average market price of the common shares during the period. For the three and ninesix months ended SeptemberJune 30, 2023, the weighted average number of stock options excluded from the computations were 4.7 million and 4.3 million, respectively. For the three and six months ended June 30, 2022, the weighted average number of stock options excluded from the computations were 5.55.6 million and 3.6 million, respectively. For the three and nine months ended September 30, 2021, the weighted average number of stock options excluded from the computations were 1.9 million and 1.63.4 million, respectively.
As of SeptemberJune 30, 20222023, and 2021,2022, the total shares outstanding were 672.3664.0 million and 688.4673.7 million, respectively, and as of SeptemberJune 30, 20222023, and 2021,2022, total shares issued were 957.6 million.
2122    Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NOTE 13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT
 Foreign
Exchange
Translation
Adjustment		Pension
and Other
Postretirement
Benefits
Adjustments		Changes in Fair
Value of
 Available for Sale
 Investments		Changes in
Fair Value
of Cash Flow
Hedges  		Total
Balance at December 31, 2021$(2,478)$(415)$1 $(3)$(2,895)
Other comprehensive income (loss) before reclassifications(375)— (7)66 (316)
Amounts reclassified from accumulated other comprehensive income(3)(44)— (38)(85)
Net current period other comprehensive income (loss)(378)(44)(7)28 (401)
Balance at September 30, 2022$(2,856)$(459)$(6)$25 $(3,296)
 Foreign
Exchange
Translation
Adjustment		Pension
and Other
Postretirement
Benefit
Adjustments		Changes in Fair
Value of
 Available for Sale
 Investments		Changes in
Fair Value
of Cash Flow
Hedges		Total
Balance at December 31, 2022$(2,832)$(648)$(7)$12 $(3,475)
Other comprehensive income (loss) before reclassifications(132)— 3 30 (99)
Amounts reclassified from accumulated other comprehensive income (loss)— (24)— (13)(37)
Net current period other comprehensive income (loss)(132)(24)3 17 (136)
Balance at June 30, 2023$(2,964)$(672)$(4)$29 $(3,611)
 Foreign
Exchange
Translation
Adjustment		Pension
and Other
Postretirement
Benefits
Adjustments 		Changes in Fair
Value of
 Available for Sale
 Investments		Changes in
Fair Value
of Cash Flow
Hedges		Total
Balance at December 31, 2020$(2,780)$(601)$4 $— $(3,377)
Other comprehensive income (loss) before reclassifications250 — (3)16 263 
Amounts reclassified from accumulated other comprehensive income— (65)— (14)(79)
Net current period other comprehensive income (loss)250 (65)(3)2 184 
Balance at September 30, 2021$(2,530)$(666)$1 $2 $(3,193)
 Foreign
Exchange
Translation
Adjustment		Pension
and Other
Postretirement
Benefit
Adjustments 		Changes in Fair
Value of
 Available for Sale
 Investments		Changes in
Fair Value
of Cash Flow
Hedges		Total
Balance at December 31, 2021$(2,478)$(415)$1 $(3)$(2,895)
Other comprehensive income (loss) before reclassifications34 — (9)39 64 
Amounts reclassified from accumulated other comprehensive income (loss)(3)(34)— (15)(52)
Net current period other comprehensive income (loss)31 (34)(9)24 12 
Balance at June 30, 2022$(2,447)$(449)$(8)$21 $(2,883)
NOTE 14. COMMITMENTS AND CONTINGENCIES
ENVIRONMENTAL MATTERS
Honeywell's environmental matters are described in Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements in the Company's 20212022 Annual Report on Form 10-K.
The following table summarizes information concerning the Company's recorded liabilities for environmental costs:
Balance at December 31, 20212022$618615 
Accruals for environmental matters deemed probable and reasonably estimable156137 
Environmental liability payments(111)(59)
Balance at SeptemberJune 30, 20222023$663693 
Environmental liabilities are included in the following balance sheet accounts:
September 30, 2022December 31, 2021June 30, 2023December 31, 2022
Accrued liabilitiesAccrued liabilities$217 $225 Accrued liabilities$222 $222 
Other liabilitiesOther liabilities446 393 Other liabilities471 393 
$663 $618 
Total environmental liabilitiesTotal environmental liabilities$693 $615 
2223    Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
The Company does not currently possess sufficient information to reasonably estimate the amounts of environmental liabilities to be recorded upon future completion of studies, litigation, or settlements, and neither the timing nor the amount of the ultimate costs associated with environmental matters can be determined, although they could be material to the Company's consolidated results of operations and operating cash flows in the periods recognized or paid. However, considering the Company's past experience and existing reserves, the Company does not expect that environmental matters will have a material adverse effect on its consolidated financial position.
In conjunction with the Resideo Technologies, Inc. (Resideo) spin-off, the Company entered into an indemnification and reimbursement agreement with a Resideo subsidiary, pursuant to which Resideo’s subsidiary has an ongoing obligation to make cash payments to Honeywell in amounts equal to 90% of Honeywell’s annual net spending for environmental matters at certain sites as defined in the agreement. The amount payable to Honeywell in any given year is subject to a cap of $140 million, and the obligation will continue until the earlier of December 31, 2043, or December 31 of the third consecutive year during which the annual payment obligation is less than $25 million.
Reimbursements associated with this agreement are collected from Resideo quarterly and were $35 million and $105was $70 million in the three and ninesix months ended SeptemberJune 30, 2022, respectively,2023, and offset operating cash outflows incurred by the Company. As the Company incurs costs for environmental matters deemed probable and reasonably estimable related to the sites covered by the indemnification and reimbursement agreement, a corresponding receivable from Resideo for 90% of such costs is also recorded. This receivable amount recorded in the ninesix months ended SeptemberJune 30, 2022,2023, was $116$103 million. As of SeptemberJune 30, 2022,2023, Other current assets and Other assets included $140 million and $468$507 million, respectively, for the short-term and long-term portion of the receivable amount due from Resideo under the indemnification and reimbursement agreement.
ASBESTOS MATTERS
Honeywell is named in asbestos-related personal injury claims related to North American Refractories Company (NARCO), which was sold in 1986, and the Bendix Friction Materials (Bendix) business, which was sold in 2014.
The following tables summarize information concerning NARCO and Bendix asbestos-related balances:
ASBESTOS-RELATED LIABILITIES
BendixNARCOTotal BendixNARCOTotal
December 31, 2021$1,372 $689 $2,061 
December 31, 2022December 31, 2022$1,291 $1,325 $2,616 
Accrual for update to estimated liabilityAccrual for update to estimated liability39 48 87 Accrual for update to estimated liability22 3 25 
Change in estimated cost of future claimsChange in estimated cost of future claims23 — 23 Change in estimated cost of future claims17 — 17 
Asbestos-related liability paymentsAsbestos-related liability payments(147)(42)(189)Asbestos-related liability payments(81)(3)(84)
September 30, 2022$1,287 $695 $1,982 
NARCO BuyoutNARCO Buyout— (1,325)(1,325)
June 30, 2023June 30, 2023$1,249 $— $1,249 
INSURANCE RECOVERIES FOR ASBESTOS-RELATED LIABILITIES
 BendixNARCOTotal
December 31, 2021$142 $221 $363 
Insurance receipts for asbestos-related liabilities(4)(12)(16)
Insurance receivables settlements— (68)(68)
September 30, 2022$138 $141 $279 
 BendixNARCOTotal
December 31, 2022$130 $135 $265 
Probable insurance recoveries related to estimated liability7 — 7 
Insurance receipts for asbestos-related liabilities(8)(20)(28)
June 30, 2023$129 $115 $244 
2324    Honeywell International Inc.
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HONEYWELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NARCO and Bendix asbestos-related balances are included in the following balance sheet accounts:
September 30, 2022December 31, 2021June 30, 2023December 31, 2022
Other current assetsOther current assets$41 $41 Other current assets$41 $41 
Insurance recoveries for asbestos-related liabilitiesInsurance recoveries for asbestos-related liabilities238 322 Insurance recoveries for asbestos-related liabilities203 224 
$279 $363 
Total insurance recoveries for asbestos-related liabilitiesTotal insurance recoveries for asbestos-related liabilities$244 $265 
Accrued liabilitiesAccrued liabilities$289 $261 Accrued liabilities$121 $1,436 
Asbestos-related liabilitiesAsbestos-related liabilities1,693 1,800 Asbestos-related liabilities1,128 1,180 
$1,982 $2,061 
Total asbestos-related liabilities(a)
Total asbestos-related liabilities(a)
$1,249 $2,616 
(a)As of December 31, 2022, Accrued liabilities included the Buyout Amount, as described and defined below, agreed upon between Honeywell and the Trust. The Buyout Amount does not represent an asbestos-related liability.
NARCO Products – NARCO manufactured high-grade, heat-resistant, refractory products for various industries. Honeywell’s predecessor, Allied Corporation, owned NARCO from 1979 to 1986. Allied Corporation sold the NARCO business in 1986 and entered into a cross-indemnity agreement which included an obligation to indemnify the purchaser for asbestos claims, arising primarily from alleged occupational exposure to asbestos-containing refractory brick and mortar for high-temperature applications.claims. NARCO ceased manufacturing theseasbestos containing products in 1980 and filed for bankruptcy in January 2002, at which point in time all then current and future NARCO asbestos claims were stayed against both NARCO and Honeywell pending the reorganization of NARCO. The Company established its initial liability for NARCO asbestos claims in 2002.
NARCO emerged from bankruptcy in April 2013, at which time a federally authorized 524(g) trust was established to evaluate and resolve all existing NARCO asbestos claims (the Trust). Both Honeywell and NARCO are protected by a permanent channeling injunction barring all present and future individual actions in state or federal courts and requiring all asbestos-related claims based on exposure to NARCO asbestos-containing products to be made against the Trust (Channeling Injunction). The NARCO Trust Agreement (TA) and the NARCO Trust Distribution Procedures (TDP) set forth the structure and operating rules of the Trust, and established Honeywell’s evergreen funding obligations.
On November 18, 2022, Honeywell entered into a definitive agreement with the Trust and certain other parties, which was subsequently amended on November 20, 2022 (Amended Buyout Agreement).
Pursuant to the terms of the Amended Buyout Agreement, Honeywell agreed to make a one-time, lump sum payment in the amount of $1.325 billion to the Trust (Buyout Amount), subject to certain deductions as described in the Amended Buyout Agreement and in exchange for the release by the Trust of Honeywell from all further and future obligations of any kind related to the Trust and/or any claimants who were exposed to asbestos-containing products manufactured, sold, or distributed by NARCO or its predecessors (the Honeywell Obligations) (the NARCO Buyout). In accordance with the TA,Amended Buyout Agreement, the economic rights of the Trust is eligible to receive cash dividends from Harbison-Walker International Inc. (HWI),in respect of the reorganized and renamed entity that emergednet proceeds from the NARCO bankruptcy. HWI cash dividends are requiredSale (as defined in Note 11 Fair Value Measurements) inure to be usedthe benefit of Honeywell.
On December 8, 2022, the Bankruptcy Court issued an order that (A) approved the Amended Buyout Agreement, and (B) declared that the Channeling Injunction will remain in full force and effect without modification, dissolution, or termination.
On December 14, 2022, HWI (as defined in Note 11 Fair Value Measurements) entered into a definitive sale agreement for the sale of HWI to pay asbestos-related claims which qualify for payment under the TDP (Annual Contribution Claims) until those funds are exhausted, at which point the Company’s funding obligation,an affiliate of Platinum Equity, LLC subject to an annual cap of $145 million, is triggered. Thethe terms set forth in the agreement.
On January 30, 2023, the Company paid the Buyout Amount to the Trust, received dividend paymentsthe parties closed the transactions contemplated in the Amended Buyout Agreement, and Honeywell was released from HWI in 2021 and 2022. The Company is also requiredthe Honeywell Obligations. Honeywell continues to fund amounts owed pursuant to settlement agreements reached during the pendency of the NARCO bankruptcy proceedings that provide forhave the right to submit claimscollect proceeds in connection with its NARCO asbestos-related insurance policies.
On February 16, 2023, the HWI Sale closed. Pursuant to the Trust subject to qualificationAmended Buyout Agreement, during the six months ended June 30, 2023, Honeywell received $275 million of proceeds from the HWI sale. See Note 11 Fair Value Measurements for further information on the related proceeds and remaining amount under the terms ofAmended Buyout Agreement.
For additional information, see the settlement agreements and TDP (Pre-Established Unliquidated Claims), as well as fund the annual operating costs of the Trust. There is no annual funding cap relative to Pre-Established Unliquidated Claims.
The operating rules per the TDP define criteria claimants must meet for a claim to be considered valid and paid, which include adequate medical evidence of the claimant’s asbestos-related condition and credible evidence of exposure to a specific NARCO asbestos-containing product. The TDP allows Honeywell to audit claim support documents against these criteria. Once operational in 2014, the Trust began to receive, process and pay claims. The Company identified several issuesCompany's Annual Report on Form 10-K, filed with the way the Trust was adhering to the TDP in audits subsequent to the Trust becoming operational. The Company consistently raised with the Trust concern that the Trust adopted an improper practice of paying claimants who have not demonstrated the requisite exposure. The Trust refused to alter its practices for payment of claims,SEC on February 10, 2023, under Note 19 Commitments and in September 2021, Honeywell filed suit against the Trust in the United States Bankruptcy Court for the Western District of Pennsylvania (Bankruptcy Court) alleging that the Trust has breached its duties in managing the Trust, including breaches of certain provisions of the TA and TDP. Honeywell's lawsuit seeks appropriate relief preventing the Trust from continuing these practices. The Trust also filed suit against Honeywell, alleging Honeywell has breached its obligations under the Trust's governing documents. Honeywell moved to dismiss the Trust’s suit, and on December 15, 2021, the Bankruptcy Court granted Honeywell’s motion to dismiss subject to granting the Trust leave to file an amended complaint. On December 28, 2021, the Trust filed an answer with counterclaims in response to Honeywell’s complaint and in lieu of filing an amended complaint. The Bankruptcy Court conducted a trial on these matters during May 2022; the Bankruptcy Court's ruling is pending. At this time, the Company cannot predict the outcome of these matters, or the potential impact on the asbestos-related liabilities.Contingencies.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
The Company and the Trust are discussing a potential settlement of Honeywell’s remaining obligations to the Trust. The potential settlement contemplates, among other things, a lump sum cash payment to the Trust in return for elimination of and Honeywell’s full release from any future obligations to fund (i) claims against the Trust, which comprise Honeywell's NARCO asbestos-related liability, and (ii) the Trust’s annual operating expenses. Material terms and conditions of the potential settlement remain unresolved, and no assurance can be given that a settlement will be reached. Any such settlement would be contingent on (i) approval of the Bankruptcy Court, and (ii) a final Bankruptcy Court order that (A) the Channeling Injunction will remain in effect, and (B) Honeywell shall be released from any and all liabilities for any current or future claims based on exposure to NARCO asbestos-containing products without regard to ongoing solvency of the Trust. In the event a final settlement approved by the Bankruptcy Court is reached, the Company would remove the NARCO asbestos-related liability from the Company’s consolidated balance sheet. In the event a final settlement is not reached, the Company will continue to preserve all its available rights. The Company anticipates the amount of the potential lump-sum payment would exceed the currently reserved NARCO asbestos-related liability. Based on available information to date, the Company does not expect the impact of any settlement would be material with respect to the Company’s consolidated financial position.
Due to the bankruptcy filing in 2002, claimants were not permitted to file additional claims until the Trust became operative in 2014. As a consequence, there was a large backlog of claims filed with the Trust upon it becoming operative in 2014 through December 31, 2017, the date by which these claims had to be filed or else be barred by the expiration of the statute of limitations. Therefore, the claims filing rate did not start to normalize until 2018 and thereafter. As a result, between 2002 and 2018, the Company lacked a history of sufficiently reliable claims data to derive a reasonable estimate of its NARCO asbestos-related liability, and the Company continued to update its original estimate, as appropriate, using all available information.
Beginning in 2020, with three years of sufficiently reliable claims data, the Company updated its estimate of the NARCO asbestos-related liability. The estimate for the resolution of asserted Annual Contribution Claims and Pre-Established Unliquidated Claims uses average payment values for the relevant historical period. The estimate for unasserted claims is based on historic and anticipated claims filing experience and payment rates, disease classifications and type of claim, and average payment values by the Trust for the relevant historical period. The Company utilizes an asbestos liability valuation specialist to support the preparation of the NARCO asbestos-related liability estimates during the fourth quarter each year. The Company's estimates, which involve significant management judgment, and consider multiple scenarios, include all years of epidemiological disease projection through 2059.
The NARCO asbestos-related liability reflects an estimate for the resolution of Annual Contribution Claims and Pre-Established Unliquidated Claims filed with the Trust, as well as for unasserted Annual Contribution Claims and Pre-Established Unliquidated Claims. The NARCO asbestos-related liability excludes the annual operating expenses of the Trust which are expensed as they are incurred (approximately $21 million in 2021).
The Company's NARCO-related insurance receivable reflects coverage which reimburses Honeywell for portions of NARCO-related claims and defense costs. This coverage 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. Honeywell's NARCO-related insurance receivable is an estimate of the probable amount of insurance that is recoverable for asbestos claims. The Company's judgments related to the Company's insurance carriers and insurance coverages are reasonable and consistent with Honeywell's historical dealings and Honeywell's knowledge of any pertinent solvency issues surrounding insurers.
Bendix Products – Bendix manufactured automotive brake linings that contained chrysotile asbestos in an encapsulated form. Claimants consist largely of individuals who allege exposure to asbestos from brakes from either performing or being in the vicinity of individuals who performed brake replacements. The following tables present information regarding Bendix-related asbestos claims activity:
Nine Months Ended
September 30,		Years Ended
December 31,		Six Months Ended
June 30,		Years Ended
December 31,
Claims Activity202220212020
202320222021
Claims unresolved at the beginning of periodClaims unresolved at the beginning of period6,401 6,242 6,480 Claims unresolved at the beginning of period5,608 6,401 6,242 
Claims filedClaims filed1,486 2,611 2,233 Claims filed892 2,014 2,611 
Claims resolvedClaims resolved(2,154)(2,452)(2,471)Claims resolved(681)(2,807)(2,452)
Claims unresolved at the end of periodClaims unresolved at the end of period5,733 6,401 6,242 Claims unresolved at the end of period5,819 5,608 6,401 
September 30,December 31,
Disease Distribution of Unresolved Claims202220212020
Mesothelioma and other cancer claims3,395 3,760 3,422 
Nonmalignant claims2,338 2,641 2,820 
Total claims5,733 6,401 6,242 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
June 30,December 31,
Disease Distribution of Unresolved Claims202320222021
Mesothelioma and other cancer claims3,552 3,283 3,760 
Nonmalignant claims2,267 2,325 2,641 
Total claims5,819 5,608 6,401 
Honeywell has experienced average resolution values per claim excluding legal costs as follows:
Years Ended December 31, Years Ended December 31,
20212020201920182017 20222021202020192018
(in whole dollars) (in whole dollars)
Malignant claims$56,000 $61,500 $50,200 $55,300 $56,000 
Mesothelioma and other cancer claimsMesothelioma and other cancer claims$59,200 $56,000 $61,500 $50,200 $55,300 
Nonmalignant claimsNonmalignant claims$400 $550 $3,900 $4,700 $2,800 Nonmalignant claims$520 $400 $550 $3,900 $4,700 
While resolution values moved higher and lower over the years for Bendix-related asbestos claims, such resolution values may continue to increase over the near term in light of recent asbestos litigation trends. 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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
PETROBRAS AND UNAOIL MATTERS
On October 31, 2018, David Kanefsky (Plaintiff),December 19, 2022, the Company reached a Honeywell shareholder, filed a putative class action complaint incomprehensive resolution to the investigations by the U.S. District CourtDepartment of Justice (DOJ), the Securities and Exchange Commission (SEC), and certain Brazilian authorities (Brazilian Authorities) relating to the Company's use of third parties who previously worked for the DistrictCompany's UOP business in Brazil in relation to a project awarded in 2010 for Petróleo Brasileiro S.A. (Petrobras). The investigations focused on the Company’s compliance with the U.S. Foreign Corrupt Practices Act and similar Brazilian laws (UOP Matters). The comprehensive resolution also resolves DOJ and SEC investigations relating to a matter involving a foreign subsidiary’s prior contract with Unaoil S.A.M. in Algeria executed in 2011 (the Unaoil Matter).
In connection with the comprehensive resolution, (i) the Company agreed to pay a total equivalent of New Jersey (the Court) alleging violations of$202.7 million, which payment occurred in January 2023, to the Securities Exchange Act of 1934DOJ, the SEC, and Rule 10b-5the Brazilian Authorities, collectively, in penalties, disgorgement, and prejudgment interest, (ii) the Company’s subsidiary, UOP, LLC (UOP), entered into a three-year Deferred Prosecution Agreement with the DOJ for charges related to the prior accounting for Bendix asbestos claims. An Amended Complaint was filed on December 30, 2019,UOP Matters, (iii) UOP entered into leniency agreements with the Brazilian authorities related to the UOP Matter in Brazil, and on February 7, 2020,(iv) the Company filed a Motionentered into an agreement with the SEC that resolves allegations relating to Dismiss. On May 18, 2020, the Court deniedUOP Matters and the MotionUnaoil Matter. Pursuant to Dismiss. On December 7, 2021,these agreements, the parties filed a Stipulation of Settlement (Settlement Agreement)Company agreed to undertake certain compliance measures and Plaintiff filed a motion for preliminary approval ofcompliance reporting obligations. These agreements entirely resolve 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 judgmentPetrobras 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.Unaoil investigations.
OTHER MATTERS
The Company is subject to a number of other lawsuits, investigations, and disputes (some of which involve substantial amounts claimed) arising out of the conduct of the Company's business, including matters relating to commercial transactions, government contracts, product liability, prior acquisitions and divestitures, employee benefit plans, intellectual property, and environmental, health, and safety matters (including the matter described below).matters. The Company recognizes liabilities for any contingency that is probable of occurrence and reasonably estimable. The Company continually assesses the likelihood of adverse judgments or outcomes in such matters, as well as potential ranges of possibleprobable losses (taking into consideration any insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts.
Such matters include:
•Petrobras and Unaoil – The Company continues to cooperate with investigations by the U.S. Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and the Brazilian authorities relating to the Company's use of third parties who previously worked for the Company's UOP business in Brazil in relation to Petróleo Brasileiro S.A. (Petrobras) in connection with a project awarded in 2010. The investigations focus on compliance with the U.S. Foreign Corrupt Practices Act and similar Brazilian laws (UOP Matters), and involve, among other things, document production and interviews with former and current management and employees. The DOJ and the SEC are also examining a matter involving a foreign subsidiary’s prior contract with Unaoil S.A.M. in Algeria executed in 2011. The Company continues to be engaged in discussions with the authorities with respect to a potential comprehensive resolution of these matters.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
As the discussions are both ongoing and at different stages with regards to each respective authority, there can be no assurance as to whether the Company will reach a resolution with such authorities or as to the potential timing, terms, or collateral consequences of any such resolution. As a result, the Company cannot predict the ultimate outcome of these UOP Matters or the potential impact on the Company. Based on available information to date, the Company estimates that a potential comprehensive resolution of these UOP Matters would result in a probable loss of approximately $210 million. During the third quarter of 2021, the Company recorded a charge of $160 million related to these UOP Matters in the Company's Consolidated Statement of Operations, and accrued a corresponding liability on the Consolidated Balance Sheet. Based on ongoing discussions with the authorities, during the second quarter of 2022, the Company recorded an additional $50 million related to these UOP Matters in the Company's Consolidated Statement of Operations, and accrued a corresponding liability on the Consolidated Balance Sheet. Amounts payable to authorities pursuant to any potential final comprehensive resolution could differ from the amount recorded in the Company's consolidated financial statements. Based on available information to date, the Company does not expect that any such difference would be material with respect to the Company's consolidated financial position.
Given the uncertainty inherent in litigation and investigations, the Company does not believe it is possible to develop estimates of reasonably possible lossesloss (or a range of possible losses)loss) in excess of current accruals for commitment and contingency matters, including those discussed in this Note 14. Considering the Company's past experience and existing accruals, the Company does not expect the outcome of such matters, either individually or in the aggregate, to have a material adverse effect on the Company's consolidated financial position. Because most contingencies are resolved over long periods of time, potential liabilities are subject to change due to new developments, changes in settlement strategy or the impact of evidentiary requirements, which could cause the Company to pay damage awards or settlements (or become subject to equitable remedies) that could have a material adverse effect on the Company's consolidated results of operations or operating cash flows in the periods recognized or paid.
NOTE 15. PENSION BENEFITS
Net periodic pension benefit costs(income) cost for the Company's significant defined benefitpension plans includeincluded the following components:
Net Periodic Benefit CostU.S. Plans
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Service cost$21 $26 $64 $79 
Interest cost95 77 285 230 
Expected return on plan assets(320)(305)(961)(915)
Amortization of prior service (credit)(11)(11)(32)(33)
 $(215)$(213)$(644)$(639)
Net Periodic Benefit CostNon-U.S. Plans
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
U.S. Plans
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Service costService cost$5 $7 $15 $20 Service cost$7 $22 $14 $43 
Interest costInterest cost25 18 79 58 Interest cost161 95 322 190 
Expected return on plan assetsExpected return on plan assets(67)(87)(213)(263)Expected return on plan assets(278)(321)(556)(641)
$(37)$(62)$(119)$(185)
Amortization of prior service (credit) costAmortization of prior service (credit) cost(10)(11)(20)(21)
Net periodic benefit incomeNet periodic benefit income$(120)$(215)$(240)$(429)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
Non-U.S. Plans
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Service cost$3 $5 $6 $10 
Interest cost49 26 99 54 
Expected return on plan assets(68)(71)(136)(146)
Net periodic benefit income$(16)$(40)$(31)$(82)
NOTE 16. OTHER (INCOME) EXPENSE
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Interest income$(37)$(28)$(77)$(70)
Pension ongoing income – non-service(279)(306)(847)(925)
Other postretirement income – non-service(10)(18)(30)(53)
Equity income of affiliated companies(19)(21)(43)(53)
(Gain) loss on sale of non-strategic businesses and assets(10)(5)(10)(94)
Foreign exchange12 4 32 22 
Expense related to UOP Matters— 160 50 160 
Expense related to Russia-Ukraine Conflict(9)— 48 — 
Other (net)15 (1)31 (10)
 $(337)$(215)$(846)$(1,023)
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Interest income$(76)$(20)$(152)$(40)
Pension ongoing income—non-service(146)(283)(292)(568)
Other postretirement income—non-service(7)(10)(13)(20)
Equity income of affiliated companies(14)(10)(49)(24)
Foreign exchange18 22 20 20 
Expense related to UOP Matters— 50 — 50 
Expense (benefit) related to Russia-Ukraine Conflict2 57 (2)57 
Net expense related to the NARCO Buyout and HWI11 — 11 — 
Other, net4 4 9 16 
Total Other (income) expense$(208)$(190)$(468)$(509)
See Note 14 CommitmentsFor more information on the Net expense related to the NARCO Buyout and Contingencies for further discussion of the UOP Matters. See NoteHWI Sale, see Notes 5 Repositioning and Other Charges, for further discussion of the expense related to the Russia-Ukraine Conflict. See Note 3 for further discussion on the gain on sale of non-strategic business.11 Fair Value Measurements, and 14 Commitments and Contingencies.
NOTE 17. SEGMENT FINANCIAL DATA
Honeywell globally manages its business operations through four reportable business segments. Segment information is consistent with how management reviews the businesses, makes investing and resource allocation decisions, and assesses operating performance.
Honeywell’s senior management evaluates segment performance based on segment profit. Each segment’s profit is measured as segment income (loss) before taxes excluding general corporate unallocated expense, interest and other financial charges, stock compensation expense, pension and other postretirement income (expense), repositioning and other charges, and other items within Other (income) expense.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2022202120222021 2023202220232022
Net salesNet sales    Net sales    
AerospaceAerospace    Aerospace    
ProductsProducts$1,586 $1,461 $4,621 $4,547 Products$1,799 $1,574 $3,471 $3,035 
ServicesServices1,390 1,271 4,002 3,583 Services1,542 1,324 2,981 2,612 
Total2,976 2,732 8,623 8,130 
Net Aerospace salesNet Aerospace sales3,341 2,898 6,452 5,647 
Honeywell Building TechnologiesHoneywell Building TechnologiesHoneywell Building Technologies
ProductsProducts1,169 1,014 3,430 3,065 Products1,159 1,179 2,291 2,261 
ServicesServices357 356 1,056 1,070 Services351 352 706 699 
Total1,526��1,370 4,486 4,135 
Net Honeywell Building Technologies salesNet Honeywell Building Technologies sales1,510 1,531 2,997 2,960 
Performance Materials and TechnologiesPerformance Materials and TechnologiesPerformance Materials and Technologies
ProductsProducts2,228 2,007 6,394 5,931 Products2,244 2,210 4,426 4,166 
ServicesServices492 503 1,473 1,477 Services617 484 1,184 981 
Total2,720 2,510 7,867 7,408 
Net Performance Materials and Technologies salesNet Performance Materials and Technologies sales2,861 2,694 5,610 5,147 
Safety and Productivity SolutionsSafety and Productivity SolutionsSafety and Productivity Solutions
ProductsProducts1,605 1,751 4,959 5,738 Products1,239 1,721 2,563 3,354 
ServicesServices122 110 341 324 Services194 108 385 219 
Total1,727 1,861 5,300 6,062 
Net Safety and Productivity Solutions salesNet Safety and Productivity Solutions sales1,433 1,829 2,948 3,573 
Corporate and All OtherCorporate and All OtherCorporate and All Other
ServicesServices2 — 4 — Services1 1 3 2 
Total2 — 4 — 
$8,951 $8,473 $26,280 $25,735 
Net Corporate and All Other salesNet Corporate and All Other sales1 1 3 2 
Net salesNet sales$9,146 $8,953 $18,010 $17,329 
Segment profitSegment profitSegment profit
AerospaceAerospace$818 $740 $2,338 $2,212 Aerospace$924 $767 $1,751 $1,520 
Honeywell Building TechnologiesHoneywell Building Technologies368 322 1,064 942 Honeywell Building Technologies385 360 760 696 
Performance Materials and TechnologiesPerformance Materials and Technologies615 558 1,726 1,522 Performance Materials and Technologies622 601 1,188 1,111 
Safety and Productivity SolutionsSafety and Productivity Solutions271 245 755 840 Safety and Productivity Solutions239 231 499 484 
Corporate and All OtherCorporate and All Other(120)(72)(298)(155)Corporate and All Other(118)(92)(199)(178)
Total segment profitTotal segment profit1,952 1,793 5,585 5,361 Total segment profit2,052 1,867 3,999 3,633 
Interest and other financial chargesInterest and other financial charges(98)(90)(270)(263)Interest and other financial charges(187)(87)(357)(172)
Stock compensation expense(a)
Stock compensation expense(a)
(50)(56)(163)(172)
Stock compensation expense(a)
(50)(53)(109)(113)
Pension ongoing income(b)
Pension ongoing income(b)
247 261 748 809 
Pension ongoing income(b)
130 250 260 501 
Other postretirement income(b)
Other postretirement income(b)
10 18 30 53 
Other postretirement income(b)
7 10 13 20 
Repositioning and other charges(c)
Repositioning and other charges(c)
(100)(96)(714)(338)
Repositioning and other charges(c)
(102)(227)(243)(614)
Other(d)
Other(d)
20 (130)(26)(8)
Other(d)
54 (56)123 (46)
Income before taxesIncome before taxes$1,981 $1,700 $5,190 $5,442 Income before taxes$1,904 $1,704 $3,686 $3,209 
(a)Amounts included in Selling, general and administrative expenses.
(b)Amounts included in Cost of products and services sold, Selling, general and administrative expenses (service cost component) and Other (income) expense (non-service cost component).
(c)Amounts included in Cost of products and services sold, Selling, general and administrative expenses, and Other (income) expense.
(d)Amounts include the other components of Other (income) expense not included within other categories in this reconciliation. Equity income of affiliated companies is included in segment profit. 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in tables in millions, except per share amounts)
NOTE 18. SUBSEQUENT EVENTS
See Note 3 Acquisitions and Divestitures for information on the sale of two entities, domiciled in Russia, completed during October 2022.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in tables and graphs in millions)
The following ManagementManagement's Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of Honeywell International Inc. and its consolidated subsidiaries (Honeywell, we, us, our, or the Company) for the three and ninesix months ended SeptemberJune 30, 2022.2023. The financial information as of SeptemberJune 30, 2022,2023, should be read in conjunction with the Consolidated Financial Statements for the year ended December 31, 2021,2022, contained in our 20212022 Annual Report on Form 10-K. See Note 3 Acquisitions and Divestitures of Notes to Consolidated Financial Statements for a discussion of acquisition and divestiture activity during the ninesix months ended SeptemberJune 30, 2022.2023. Certain prior year amounts are reclassified to conform to the current year presentation.
BUSINESS UPDATE
Historically, we 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, we 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 net income, earnings per share, cash flows, segment reporting, or financial position. We revised historical periods to reflect this change in presentation.
In July 2022, we realigned certain business units within the Safety and Productivity Solutions reportable business segment. The Safety and Retail business unit, which included our gas detection and safety business, combined with the Advanced Sensing and Technologies business unit to form the Sensing and Safety Technologies business unit. This realignment provides opportunities to capitalize on shared synergies and core technologies resulting in greater value for our customers and the markets we serve. We recast historical periods to reflect this realignment.
On August 16, 2022,MACROECONOMIC CONDITIONS
Through the U.S. federal government enacted the Inflation Reduction Actfirst half of 2022 into law. The bill includes numerous tax provisions, including a 15% corporate minimum tax as well as a 1% excise tax on share repurchases. We2023, material inflation continued to moderate. While we see signs of relief in supply chains for semiconductors and logistics, we continue to evaluate the impact of this law on our operations; at this point, the legislation is not expected to have a material impact on our consolidated financial statements.
MACROECONOMIC CONDITIONS
We continue to monitor the ongoing impacts of current macroeconomic and geopolitical events, including changing conditions from the COVID-19 pandemic, the on-going Russia-Ukraine conflict, inflationary cost pressures,experience supply chain disruptions, andconstraints, including labor shortages.
The COVID-19 pandemic impacted our business operations, and our customers' and suppliers' ability to operate at normal levels. Disruptionsshortages in normal operating levels continue to createthe Aerospace supply chain disruptionsbase, and inflationary cost pressures within our end-markets.in manufacturing labor. We anticipate supply chain constraints, and the inflationary environment will continue for the remainder of 2022 and into 2023. As such, weto leverage previously implemented short-term and long-term strategies to reduce the impact of current and future effects.mitigation strategies.
Our mitigation strategies include pricing actions, longer term planning for constrained materials, material supply tracking tools, refinement of escalation processes to communicate supply shortages, and direct engagement with key suppliers to meet customer demand. Our relationships with primary and secondary suppliers allow us to reliably source key components and raw materials. Where we cannot supplyprocure key components or raw materials, we alterconsider altering existing products orand develop new products to satisfy current and changing demand.customer needs. Alterations to existing products orand the development of new products undergo product quality controls and engineering qualification, prior to releasing to our customers. Further,In addition, we assist our relationships with primarysuppliers facing manufacturing challenges by committing our own resources to their sites and secondary suppliers allow us to reliably source key components and raw materials.facilities. We believe these mitigation strategies enable us to reduce supply risk, accelerate new product innovation, and expand our penetration in the markets we serve. Additionally, due to the strenuous quality controls and product qualification we perform on a new or altered product, we do not expect these mitigation strategies to impact product quality or reliability.
The Russia-Ukraine conflict also continues to create volatility in global financial and energy markets creating energy and contribute to supply chain shortages adding to the inflationary pressures in the global economy. We continue to actively workcollaborate with our suppliers to minimize impacts of supply shortages on our manufacturing capabilities and we implementedimplement strategies to reduce our reliance on natural gas at critical sites in Europe.
IfTo date, our strategies successfully mitigated our exposure to these conditions. However, if we are not successful in sustaining or executing these strategies, these macroeconomic conditions could have a material adverse effect on our consolidated results of operations or operating cash flows.
See the section titled Review of Business Segments for additional information on the impacts of inflationary cost pressures, supply chain disruptions, and labor shortages to our businesses.
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COVID-19 UPDATE
During 2022, governments around the world removed many restrictions on businesses and the general public. Our manufacturing sites continue to operate at normal production levels. As of September 30 2022, we returned nearly all of our non-manufacturing employees to the workplace.
We continue to actively monitor regional COVID-19 outbreaks, and the related government restrictions and lockdown activities in the areas we operate, particularly within areas of Asia. To date, the impacts of these actions have not been material.
See the section titled Review of Business Segments for additional information on the impacts of COVID-19 to our businesses.
RUSSIA-UKRAINE CONFLICT
The Russia-Ukraine conflict continues to negatively impact our businesses and operations, and drive global economic and political uncertainty. In response to the Russian invasion of Ukraine, in March 2022, we suspended substantially all of our sales, distribution, and service activities in Russia and Belarus (the Suspension). In June 2022, we approved a plan to wind down our existing businesses and operations in Russia (the Wind down). During the third quarter of 2022, we completed the sale of one of our entities domiciled in Russia. In October 2022, we completed the sale of two additional entities. For our two remaining entities, we are pursuing a voluntary liquidation strategy to completely exit our businesses and operations in Russia. The Suspension and Wind down impacts all reportable business segments, with the most significant impact to our Performance Materials and Technologies reportable business segment.
The impacts to revenue, net income, net assets, cash flow from operations, or our global workforce for the periods recognized are not material to our consolidated results of operations and consolidated financial position. For the year ended December 31, 2021, revenue from sales in Russia represented approximately 1% of our global revenues, and assets in Russia represented less than 1% of our total assets. Our estimate of potential future losses or other contingencies related to the Suspension and Wind down activities, including any guarantee payments or any litigation costs or as otherwise related to our Wind down in Russia, could adversely affect our consolidated results of operations in the periods recognized but would not be material with respect to our consolidated financial position. As the conflict evolves, existing conditions may worsen or other impacts that are unknown at this time may arise that could have a material adverse effect on our consolidated financial position.
See the section titled Review of Business Segments for additional information on the impacts of the Russia-Ukraine conflict to our businesses.
See Note 3 Acquisition and Divestitures and Note 5 Repositioning of Notes to Consolidated Financial Statements for additional information on the Sale and Other charges recognized related to the Suspension and Wind down, respectively.
See Item 1A. Risk Factors for additional information on potential risks to our business.
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RESULTS OF OPERATIONS
Consolidated Financial Results

549755814007
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Net Sales by Segment

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Segment Profit by Segment
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CONSOLIDATED OPERATING RESULTS
Net Sales
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The change in netNet sales was attributable to the following:
Q3 2022 vs. Q3 2021Year to Date 2022 vs. 2021Q2 2023 vs. Q2 2022Year to Date 2023 vs. 2022
VolumeVolume(2)%(4)%Volume(1)%—%
PricePrice11 %9 %Price4%5%
Foreign Currency Translation(3)%(3)%
Foreign currency translationForeign currency translation(1)%(1)%
6 %2 %
Total % change in Net sales Total % change in Net sales2%4%

A discussion of Net sales by reportable business segment can be found in the Review of Business Segments section of this Management's Discussion and Analysis.
Q3 2022Q2 2023 compared with Q3 2021Q2 2022
Net sales increased due to the following:
•FavorableIncreased pricing, to offset higher direct and indirect material costs and higher labor costs,
•Partially offset by lower sales volumes in our Safety and Productivity Solutions reportable business segment, and
•Thethe unfavorable impact of foreign currency translation, driven by the strengthening of the U.S. Dollar against the currencies of the majorityin certain of our international markets, primarily the Euro, British Pound, Turkish Lira,Chinese Renminbi, Canadian Dollar, and Chinese Renminbi.

Australian Dollar.
YTD 20222023 compared with YTD 20212022
Net sales increased due to the following:
•FavorableIncreased pricing, to offset higher direct and indirect material costs and higher labor costs,
•Partially offset by lower sales volumes in our Safety and Productivity Solutions reportable business segment, and
•Thethe unfavorable impact of foreign currency translation, driven by the strengthening of the U.S. Dollar against the currencies of the majorityin certain of our international markets, primarily the Euro,Chinese Renminbi, Canadian Dollar, British Pound, Turkish Lira, and Australian Dollar.
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Cost of Products and Services Sold
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Q3 2022Q2 2023 compared with Q3 2021Q2 2022
Cost of products and services sold was flat due to the following:
•Lower repositioning and other charges due to prior year charges attributable to suspending and winding down our businesses and operations in Russia of approximately $0.1 billion or 2%, and
•Lower sales volumes of approximately $0.1 billion or 2%,
•Offset by higher direct and indirect material costs and higher labor costs of approximately $0.2 billion or 4%.
YTD 2023 compared with YTD 2022
Cost of products and services sold increased due to the following:
•Higher direct and indirect material costs and higher labor costs and
•Higher repositioning and other charges,of approximately $0.4 billion or 4%,
•Partially offset by lower sales volumesrepositioning and other charges of approximately $0.2 billion or 2%, which include prior year charges attributable to suspending and winding down our businesses and operations in our SafetyRussia.
Gross Margin
549755816280549755816281549755816282
Q2 2023 compared with Q2 2022
Gross margin increased by approximately $0.2 billion and Productivity Solutions reportable business segment, and favorable impactgross margin percentage increased 170 basis points to 38.5% compared to 36.8% for the same period of foreign currency translation.

2022.
YTD 20222023 compared with YTD 20212022
CostGross margin increased by approximately $0.5 billion and gross margin percentage increased 160 basis points to 38.2% compared to 36.6% for the same period of products and services sold increased due to the following:
•Higher direct and indirect material costs and higher labor costs, and
•Higher repositioning and other charges,
•Partially offset by lower sales volumes in our Safety and Productivity Solutions reportable business segment, and favorable impact of foreign currency translation.2022.
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Gross MarginResearch and Development Expenses
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Q3 2022Q2 2023 compared with Q3 2021Q2 2022
Gross marginResearch and Gross margin as a percentage of net sales increased due to the following:
•Favorable pricing,
•Partially offset by lower gross margins due to higher direct and indirect material costs and higher labor costs, higher repositioning and other charges, and lower sales volumes in our Safety and Productivity Solutions reportable business segment.

development expenses were flat.
YTD 20222023 compared with YTD 20212022
Gross marginResearch and Gross margin as a percentage of net sales increaseddevelopment expenses were flat.
Selling, General and Administrative Expenses
549755817265549755817266549755817267
Q2 2023 compared with Q2 2022
Selling, general and administrative expenses decreased due to the following:higher productivity.
•Favorable pricing,YTD 2023 compared to YTD 2022
•Partially offset by lower gross marginsSelling, general and administrative expenses decreased due to higher directprior year charges attributable to suspending and indirect material costswinding down our businesses and higher labor costs, higher repositioning and other charges and lower sales volumesoperations in our Safety and Productivity Solutions reportable business segment.Russia.
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Selling, General and Administrative Expenses
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Q3 2022 compared with Q3 2021
Selling, general and administrative expenses increased primarily due to higher labor costs.

YTD 2022 compared to YTD 2021
Selling, general and administrative expenses increased due to the following:
•Higher labor costs, and
•Higher repositioning and other costs, including charges and accrual of reserves directly attributable to the initial Suspension and Wind down of businesses and operations in Russia.
Other (Income) Expense
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Other (Income) Expense$(337)$(215)$(846)$(1,023)
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Other (income) expense$(208)$(190)$(468)$(509)
Q3 2022Q2 2023 compared with Q3 2021Q2 2022
Other income increased due to the following:
•Prior year recognitioncharges and accruals of an expense relatedreserves attributable to suspending and winding down our businesses and operations in Russia and UOP matters of approximately $0.1 billion, and
•Higher interest income of approximately $0.1 billion,
•Partially offset by lower pension income.

and other postretirement income of approximately $0.1 billion.
YTD 20222023 compared with YTD 20212022
Other income decreased due to the following:
•Lower pension and other postretirement income
•Prior year gain on sale of the retail footwear business, and
•Charges and accrual of reserves directly attributable to the initial Suspension and Wind down of businesses and operations in Russia,approximately $0.3 billion,
•Partially offset by higher interest income of approximately $0.1 billion and prior year recognitioncharges attributable to suspending and winding down our businesses and operations in Russia and UOP matters of an expense related to UOP matters.approximately $0.1 billion.

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Tax Expense
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Q3 2022Q2 2023 compared with Q3 2021Q2 2022
The effective tax rate decreased but was higher than the U.S. federal statutorydue to benefits from taxes on non-U.S. earnings, lower accrued withholding tax related to unremitted foreign earnings, favorable resolution of tax matters, employee share-based compensation deductions, and lower repositioning related expenses, representing a 470 basis-point decrease.
YTD 2023 compared with YTD 2022
The effective tax rate of 21%,decreased due to the following:
•Benefits from taxes on non-U.S. earnings, favorable resolution of tax matters, and changes in reserves attributable to the initial Suspension and Wind down of our businesses and operations in Russia,
•Absence of expenselower repositioning related to UOP matters without corresponding tax benefit, and
•Increased benefit related to reversal of valuation allowance and tax reserve accruals,expenses, representing a 450 basis-point decrease,
•Partially offset by the favorable resolution of certain foreign tax matters, lower benefits for employee share-based compensation and state taxes.

YTD 2022 compared with YTD 2021
The effectiveexpense from accrued withholding tax rate increased, and was higher than the U.S. federal statutory rate of 21%, due to the following:
•Charges and accrual of reserves directly attributable to the initial Suspension and Wind down of our businesses and operations in Russia without corresponding tax benefit,
•Expense related to UOP matters without corresponding tax benefit,
•Lower tax benefits for employee share-based compensation, and
•Incremental tax reserves and state taxes,
•Partially offset by the favorable resolution of certainunremitted foreign tax matters.

earnings representing a 30 basis-point increase.
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Net Income Attributable to Honeywell
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Q3 2022Q2 2023 compared to Q3 2021Q2 2022
Earnings per share of common stock–assuming dilution increased due to the following:
•Higher segment profit from all of our reportable business segments impacted earnings per share by $0.21 after tax,
•Lower repositioning and other charges, due to prior year charges attributable to suspending and winding down our businesses and operations in Russia, impacted earnings per share by $0.18 after tax, and
•Prior year recognition of an expense related to UOP matters, andMatters impacted earnings per share by $0.07, with no tax impact,
•The favorable impact ofPartially offset by lower pension income which impacted earnings per share count.

by $0.14 after tax.
YTD 20222023 compared to YTD 20212022
Earnings per share of common stock–assuming dilution decreased,increased due to the following:
•HigherLower repositioning and other charges, including charges and accrual of reserves directly attributable to the initial Suspensionsuspending and Windwinding down ofour businesses and operations in Russia, impacted earnings per share by $0.52 after tax,
•Prior year gain on saleHigher segment profit from all of the retail footwearour reportable business segments impacted earnings per share by $0.41 after tax, and
•Lower pensionHigher interest income impacted earnings per share by $0.13 after tax,
•Partially offset by higher segment profit drivenlower pension income which impacted earnings per share by our Performance Materials and Technologies, Aerospace, and Honeywell Building Technologies reportable business segments, prior year recognition of an expense related to UOP matters, and the favorable impact of lower share count.$0.27 after tax.

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REVIEW OF BUSINESS SEGMENTS
We globally manage our business operations through four reportable business segments: Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions.
AEROSPACE
Net Sales
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Three Months Ended
June 30,		Six Months Ended
June 30,
20232022%
Change		20232022%
Change
Net sales$3,341 $2,898 15 %$6,452 $5,647 14 %
Cost of products and services sold2,041 1,778 3,977 3,412 
Selling, general and administrative and other expenses376 353 724 715 
Segment profit$924 $767 20 %$1,751 $1,520 15 %
Three Months Ended
September 30,		Nine Months Ended
September 30,
20222021%
Change		20222021%
Change
Net sales$2,976 $2,732 9 %$8,623 $8,130 6 %
Cost of products and services sold1,967 1,828 5,648 5,330 
Selling, general and administrative and other expenses191 164 637 588 
Segment profit$818 $740 11 %$2,338 $2,212 6 %
2023 vs. 2022
Three Months Ended
June 30,		Six Months Ended
June 30,
Factors Contributing to Year-Over-Year ChangeNet
Sales		Segment
Profit		Net
Sales		Segment
Profit
Organic(1)
16 %21 %15 %16 %
Foreign currency translation(1)%(1)%(1)%(1)%
Acquisitions, divestitures, and other, net— %— %— %— %
Total % change15 %20 %14 %15 %
2022 vs. 2021
Three Months Ended
September 30,		Nine Months Ended
September 30,
Factors Contributing to Year-Over-Year ChangeNet
Sales		Segment
Profit		Net
Sales		Segment
Profit
Organic(1)
10 %11 %6 %6 %
Foreign currency translation(1)%— %— %— %
Acquisitions, divestitures and other, net— %— %— %— %
Total % Change9 %11 %6 %6 %
(1) Organic sales % change, presented for all of our reportable business segments, is defined as the change in netNet sales, excluding the impact on sales from foreign currency translation and acquisitions, net of divestitures, for the first 12 months following the transaction date. We believe this non-GAAP measure is useful to investors and management in understanding the ongoing operations and analysis of ongoing operating trends.
Q3 2022Q2 2023 compared to Q3 2021Q2 2022
Sales increased $443 million due to favorable pricing, higher demand for our aftermarket products and services, asorganic sales of $330 million in Commercial Aviation Aftermarket primarily driven by higher sales volumes in air transport due to an increase in flight hours continued to increase, and commercial OEMs, partially offset by lower volumeshigher organic sales of $83 million in domestic and international defense.
•Commercial Aviation Original Equipment primarily driven by higher sales increased 30% (increased 30% organic)volumes due to higher demand and favorable pricing in air transport, and regional and business aviation.
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•Commercial Aviation Aftermarket sales increased 24% (increased 24% organic) due to higher demand and favorable pricing in air transport, and regional and business aviation.
•Defense and Space sales decreased 11% (decreased 10% organic) due to lower sales volumes in domestic and international defense.
Cost of products and services sold increased due to higher direct and indirect material costs and higher labor costs, and higher sales volumes.shipments.
Segment profit increased due$157 million and segment margin percentage increased 120 basis points to favorable pricing and higher sales volumes, partially offset by higher direct and indirect material costs and higher labor costs.

YTD 202227.7% compared to YTD 2021
Sales increased due to favorable pricing, and higher demand26.5% for our aftermarket products and services, as flight hours increase from pandemic lows, and commercial OEMs, partially offset by lower volumes in domestic and international defense.
•Commercial Aviation Original Equipment sales increased 20% (increased 21% organic) due to higher demand in air transport.
•Commercial Aviation Aftermarket sales increased 24% (increased 24% organic) due to higher demand and favorable pricing in air transport, and regional and business aviation.
•Defense and Space sales decreased 12% (decreased 12% organic) due to lower sales volumes in domestic and international defense.
Costthe same period of products and services sold increased due to higher direct and indirect material costs and higher labor costs, and higher sales volumes.
Segment profit increased due to favorable pricing and higher sales volumes, partially offset by higher direct and indirect material costs and higher labor costs.
HONEYWELL BUILDING TECHNOLOGIES
Net Sales
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Three Months Ended
September 30,		Nine Months Ended
September 30,
20222021%
Change		20222021%
Change
Net sales$1,526 $1,370 11 %$4,486 $4,135 8 %
Cost of products and services sold898 798 2,621 2,409 
Selling, general and administrative and other expenses260 250 801 784 
Segment profit$368 $322 14 %$1,064 $942 13 %
2022.
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 2022 vs. 2021
 Three Months Ended
September 30,		Nine Months Ended
September 30,
Factors Contributing to Year-Over-Year ChangeNet
Sales		Segment
Profit		Net
Sales		Segment
Profit
Organic19 %23 %14 %19 %
Foreign currency translation(8)%(9)%(6)%(7)%
Acquisitions, divestitures and other, net— %— %— %1 %
Total % Change11 %14 %8 %13 %
Q3 2022 compared to Q3 2021
Sales increased due to favorable pricing and higher sales volumes, partially offset by the unfavorable impact of foreign currency translation.
•Sales in Products increased 16% (increased 23% organic) due to favorable pricing and higher sales volumes, partially offset by the unfavorable impact of foreign currency translation.
•Sales in Building Solutions increased 5% (increased 13% organic) due to favorable pricing and higher sales volumes, partially offset by the unfavorable impact of foreign currency translation.
Cost of products and services sold increased due to higher direct and indirect material costs and higher labor costs, and higher volumes of lower margin products, partially offset by the favorable impact of foreign currency translation.
Segment profit increased due to favorable pricing and higher sales volumes, partially offset by higher direct and indirect material costs and higher labor costs, and the unfavorable impact of foreign currency translation.

YTD 2022 compared to YTD 2021
Sales increased due to favorable pricing and higher sales volumes, partially offset by the unfavorable impact of foreign currency translation.
•Sales in Products increased 15% (increased 20% organic) due to favorable pricing and higher sales volumes, partially offset by the unfavorable impact of foreign currency translation.
•Sales in Building Solutions were flat (increased 6% organic) due to favorable pricing, offset by the unfavorable impact of foreign currency translation.
Cost of products and services sold increased due to higher direct and indirect material costs and higher labor costs, and higher volumes of lower margin products, partially offset by the favorable impact of foreign currency translation.
Segment profit increased due to favorable pricing and higher sales volumes, partially offset by higher direct and indirect material costs and higher labor costs, and the unfavorable impact of foreign currency translation.
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PERFORMANCE MATERIALS AND TECHNOLOGIES
Net Sales
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Three Months Ended
September 30,		Nine Months Ended
September 30,
20222021%
Change		20222021%
Change
Net sales$2,720 $2,510 8 %$7,867 $7,408 6 %
Cost of products and services sold1,774 1,653 5,109 4,940  
Selling, general and administrative and other expenses331 299 1,032 946  
Segment profit$615 $558 10 %$1,726 $1,522 13 %
2022 vs. 2021
Three Months Ended
September 30,		Nine Months Ended
September 30,
Factors Contributing to Year-Over-Year ChangeNet
Sales		Segment
Profit		Net
Sales		Segment
Profit
Organic14 %15 %10 %17 %
Foreign currency translation(6)%(5)%(4)%(4)%
Acquisitions, divestitures and other, net— %— %— %— %
Total % Change8 %10 %6 %13 %
Q3 2022 compared to Q3 2021
Sales increased due to favorable pricing, partially offset by the unfavorable impact of foreign currency translation.
•UOP sales increased 6% (increased 6% organic) due to favorable pricing, partially offset by lower demand for new oil and gas projects and the impact of the Russia-Ukraine conflict.
•Process Solutions sales decreased 2% (increased 6% organic) due to the unfavorable impact of foreign currency translationand the impact of the Russia-Ukraine conflict, partially offset by favorable pricing and higher demand for certain products and services.
•Advanced Materials sales increased 26% (increased 33% organic) due to favorable pricing and higher demand for fluorine products, partially offset by the unfavorable impact of foreign currency translation.
Cost of products and services sold increased due to higher direct and indirect material costs and higher labor costs, and lower sales volumes of higher margin products, partially offset by the favorable impact of foreign currency translation.
Segment profit increased due to favorable pricing, partially offset by higher direct and indirect material costs and higher labor costs, and lower sales volumes of higher margin products.

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YTD 20222023 compared to YTD 20212022
Sales increased due to favorable pricing, partially offset by the unfavorable impact of foreign currency translation and lower sales volumes primarily due to the impact of the Russia-Ukraine conflict.
•UOP sales decreased 1% (decreased 1% organic) due to lower demand for new oil and gas projects and the impact of the Russia-Ukraine conflict, partially offset by favorable pricing.
•Process Solutions sales increased 1% (increased 6% organic) due to favorable pricing and higher demand for certain products and services, partially offset by the unfavorable impact of foreign currency translation and the impact of the Russia-Ukraine conflict.
•Advanced Materials sales increased 19% (increased 23% organic) due to favorable pricing and higher demand for specialty products, partially offset by the unfavorable impact of foreign currency translation.
Cost of products and services sold increased$805 million due to higher direct and indirect material costsorganic sales of $592 million in Commercial Aviation Aftermarket primarily driven by higher sales volumes in air transport due to an increase in flight hours and higher labor costs, partially offsetorganic sales of $150 million in Commercial Aviation Original Equipment primarily driven by the favorable impact of foreign currency translation, and lowerhigher sales volumes primarily due to the impact of the Russia-Ukraine conflict.increased shipments.
Segment profit increased $231 million and segment margin percentage increased 20 basis points to 27.1% compared to 26.9% for the same period of 2022.
HONEYWELL BUILDING TECHNOLOGIES
Net Sales
549755814435549755814436549755814437
Three Months Ended
June 30,		Six Months Ended
June 30,
20232022%
Change		20232022%
Change
Net sales$1,510 $1,531 (1)%$2,997 $2,960 1 %
Cost of products and services sold809 825 1,601 1,612 
Selling, general and administrative and other expenses316 346 636 652 
Segment profit$385 $360 7 %$760 $696 9 %
 2023 vs. 2022
 Three Months Ended
June 30,		Six Months Ended
June 30,
Factors Contributing to Year-Over-Year ChangeNet
Sales		Segment
Profit		Net
Sales		Segment
Profit
Organic— %7 %5 %12 %
Foreign currency translation(1)%— %(4)%(3)%
Acquisitions, divestitures, and other, net— %— %— %— %
Total % change(1)%7 %1 %9 %
Q2 2023 compared to Q2 2022
Sales decreased $21 million due to favorable pricing, partially offset by higher direct and indirect material costs and higher labor costs, lower sales volumes of higher margin products, and the unfavorable impact of foreign currency translation.
SAFETY AND PRODUCTIVITY SOLUTIONS
Net Sales
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Three Months Ended
September 30,		Nine Months Ended
September 30,
20222021%
Change		20222021%
Change
Net sales$1,727 $1,861 (7)%$5,300 $6,062 (13)%
Cost of products and services sold1,205 1,369  3,733 4,442 
Selling, general and administrative and other expenses251 247  812 780 
Segment profit$271 $245 11 %$755 $840 (10)%
Segment profit increased $25 million and segment margin percentage increased 200 basis points to 25.5% compared to 23.5% for the same period of 2022.
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2022 vs. 2021
Three Months Ended
September 30,		Nine Months Ended
September 30,
Factors Contributing to Year-Over-Year ChangeNet
Sales		Segment
Profit		Net
Sales		Segment
Profit
Organic(4)%14 %(10)%(7)%
Foreign currency translation(3)%(3)%(2)%(2)%
Acquisitions, divestitures and other, net— %— %(1)%(1)%
Total % Change(7)%11 %(13)%(10)%
Q3 2022YTD 2023 compared to Q3 2021YTD 2022
Sales decreasedincreased $37 million due to lowerhigher organic sales volumes and the unfavorable impact of foreign currency translation, partially offset$84 million in Building Solutions primarily driven by favorable pricing.
•Sales in Sensing and Safety Technologies decreased 2% (increased 3% organic) due to lower demand for personal protective equipment and the unfavorable impact of foreign currency translation, partially offset by favorable pricing and higher demand for advanced sensing and gas detection.
•Sales in Productivity Solutions and Services decreased 2% (increased 2% organic) due to the unfavorable impact of foreign currency translation, partially offset by favorable pricing and higher sales volumes (driven by a licensing agreement executed in the second quarter of 2022, discussed below).
•Sales in Warehouse and Workflow Solutions decreased 16% (decreased 15% organic) due to lower demand and timing of projects.
Cost of productsbuilding projects and services sold decreased due to lower sales volumes and the favorable impact of foreign currency translation, partially offset by higher direct and indirect material costs and higher labor costs.
Segment profitorganic sales of $51 million in Products primarily driven by increased primarily due to favorable pricing, and lower sales volumes of lower margin products, partially offset by higher direct and indirect material costs and higher labor costs.

YTD 2022 compared to YTD 2021
Sales decreased due to lower sales volumes, the unfavorable impact of foreign currency translation, and the sale of the retail footwear business, partially offset by favorable pricing.
•Sales in Sensing and Safety Technologies decreased 11% (decreased 7% organic) due to lower demand for personal protective equipment, the unfavorable impact of foreign currency translation, and the sale of the retail footwear business, partially offset by favorable pricing and higher demand for advanced sensing and gas detection.
•Sales in Productivity Solutions and Services increased 8% (increased 12% organic) due to favorable pricing and higher sales volumes (driven by a licensing agreement executed in the second quarter of 2022, discussed below), partially offset by the unfavorable impact of foreign currency translation.translation of $100 million.
Segment profit increased $64 million and segment margin percentage increased 190 basis points to 25.4% compared to 23.5% for the same period of 2022.
PERFORMANCE MATERIALS AND TECHNOLOGIES
Net Sales
549755814547549755814548549755814549
Three Months Ended
June 30,		Six Months Ended
June 30,
20232022%
Change		20232022%
Change
Net sales$2,861 $2,694 6 %$5,610 $5,147 9 %
Cost of products and services sold1,796 1,650 3,527 3,166  
Selling, general and administrative and other expenses443 443 895 870  
Segment profit$622 $601 3 %$1,188 $1,111 7 %
2023 vs. 2022
Three Months Ended
June 30,		Six Months Ended
June 30,
Factors Contributing to Year-Over-Year ChangeNet
Sales		Segment
Profit		Net
Sales		Segment
Profit
Organic7 %4 %11 %9 %
Foreign currency translation(1)%(1)%(2)%(2)%
Acquisitions, divestitures, and other, net— %— %— %— %
Total % change6 %3 %9 %7 %
Q2 2023 compared to Q2 2022
Sales increased $167 million due to higher organic sales of $129 million in Process Solutions primarily driven by increased demand in projects and lifecycle solutions and services and higher organic sales of $61 million in UOP primarily driven by growth in gas processing.
Segment profit increased $21 million and segment margin percentage decreased 60 basis points to 21.7% compared to 22.3% for the same period of 2022.
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YTD 2023 compared to YTD 2022
Sales increased $463 million due to higher organic sales of $307 million in Process Solutions primarily driven by increased demand in projects and lifecycle solutions and services, higher organic sales of $150 million in UOP primarily driven by growth in gas processing and refining catalyst shipments, and higher organic sales of $93 million in Advanced Materials primarily driven by increased pricing, partially offset by the unfavorable impact of foreign currency translation of $87 million.
•Segment profit increased $77 million and segment margin percentage decreased 40 basis points to 21.2% compared to 21.6% for the same period of 2022.
SAFETY AND PRODUCTIVITY SOLUTIONS
Net Sales
549755814567549755814568549755814569
Three Months Ended
June 30,		Six Months Ended
June 30,
20232022%
Change		20232022%
Change
Net sales$1,433 $1,829 (22)%$2,948 $3,573 (17)%
Cost of products and services sold891 1,234  1,834 2,385 
Selling, general and administrative and other expenses303 364  615 704 
Segment profit$239 $231 3 %$499 $484 3 %
2023 vs. 2022
Three Months Ended
June 30,		Six Months Ended
June 30,
Factors Contributing to Year-Over-Year ChangeNet
Sales		Segment
Profit		Net
Sales		Segment
Profit
Organic(21)%4 %(16)%5 %
Foreign currency translation(1)%(1)%(1)%(2)%
Acquisitions, divestitures, and other, net— %— %— %— %
Total % change(22)%3 %(17)%3 %
Q2 2023 compared to Q2 2022
Sales decreased $396 million due to lower organic sales of $234 million in Warehouse and Workflow Solutions decreased 24% (decreased 23% organic) due toprimarily driven by lower demand and timing of projects.
Cost of products and services sold decreased due to lower sales volumes, partially offset by higher direct and indirect material costs and higher labor costs,for projects and lower productivity (including a write-downorganic sales of mask inventory).
Segment profit decreased primarily due to higher direct and indirect material costs and higher labor costs, lower productivity, and lower sales volumes, partially offset by favorable pricing.
During the second quarter of 2022, our$136 million in Productivity Solutions and Services business entered into a licenseprimarily driven by lower demand for products.
Segment profit increased $8 million and settlement agreement (the Agreement). Undersegment margin percentage increased 410 basis points to 16.7% compared to 12.6% for the Agreement, we will receive upsame period in 2022.
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YTD 2023 compared to YTD 2022
Sales decreased $625 million due to lower organic sales of $360 million paid in equal quarterly installments over eight quarters, beginning withWarehouse and Workflow Solutions primarily driven by lower demand for projects and lower organic sales of $180 million in Productivity Solutions and Services primarily driven by lower demand for products.
Segment profit increased $15 million and segment margin percentage increased 340 basis points to 16.9% compared to 13.5% for the second quarter ofsame period in 2022. The Agreement provides each party a license to its existing patent portfolio for use by the other party’s existing products and, resolves all patent-related litigation between the parties.
CORPORATE AND ALL OTHER
Corporate and All Other primarily includes unallocated corporate costs, interest expense on holding-company debt, and the controlling majority-owned interest in Quantinuum. Corporate and All Other is not considered a separate reportable business segment as segment reporting criteria is not met for the activities reported with Corporate and All Other.met. The Company continues to monitor the activities in Corporate and All Other to determine the need for further reportable business segment disaggregation.
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REPOSITIONING CHARGES
See Note 5 Repositioning and Other Charges of Notes to Consolidated Financial Statements for a discussion of our repositioning actions and related charges incurred in the ninesix months ended SeptemberJune 30, 20222023, and 2021.2022. Cash spending related to our repositioning actions was $206$150 million in the ninesix months ended SeptemberJune 30, 2022,2023, and was funded through operating cash flows.
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LIQUIDITY AND CAPITAL RESOURCES
(Dollars in tables in millions)
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.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
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 SeptemberJune 30, 2022,2023, and December 31, 2021,2022, we held $8.0$8.8 billion and $11.5$10.1 billion, respectively, of cash and cash equivalents, including our short-term investments.
As of SeptemberJune 30, 2022, $5.62023, $5.1 billion of the Company’s cash, cash equivalents, and short-term investments arewere held by non-USnon-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 law,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:
Six Months Ended June 30,
20232022Variance
Cash and cash equivalents at beginning of period$9,627 $10,959 $(1,332)
Operating activities
Net income attributable to Honeywell2,881 2,395 486 
Noncash adjustments842 931 (89)
Changes in working capital(729)(1,578)849 
NARCO Buyout payment(1,325)— (1,325)
Other operating activities(1,093)(923)(170)
Net cash provided by operating activities576 825 (249)
Net cash provided by (used for) investing activities(709)414 (1,123)
Net cash used for financing activities(863)(3,832)2,969 
Effect of exchange rate changes on cash and cash equivalents(5)(118)113 
Net decrease in cash and cash equivalents(1,001)(2,711)1,710 
Cash and cash equivalents at end of period$8,626 $8,248 $378 
Cash related to operating activities decreased by $249 million primarily driven by the payment pursuant to the North American Refractories Company (NARCO) Amended Buyout Agreement and payment for the settlement of UOP Matters. This was partially offset by cash generated from operations, which included a favorable impact of working capital and the HWI Net Sale Proceeds. The favorable impact of working capital was driven by a $399 million decrease in Accounts receivable, primarily due to higher cash receipts, and a $354 million increase in Accounts payable, primarily due to increased material receipts and lower disbursements. See Note 14 Commitments and Contingencies of Notes to the Consolidated Financial Statements for additional information on the NARCO Amended Buyout Agreement, HWI Net Sale Proceeds, and UOP Matters.
Cash related to investing activities decreased by $1,123 million primarily due to a $483 million increase in cash paid for acquisitions, $409 million cash receipts from Garrett Motion Inc. (Garrett) in 2022, and $375 million decrease in cash receipts from settlements of derivative contracts related to foreign exchange hedging, partially offset by $227 million net decrease in investments, as maturing short-term investments are moved into cash deposits.
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Cash related to financing activities increased by $2,969 million primarily due to a $2,965 million increase in proceeds from the issuance of long-term debt and $1,261 million decrease in repurchases of common stock, partially offset by $1,295 increase in payments of long-term debt.
CASH REQUIREMENTS AND ASSESSMENT OF CURRENT LIQUIDITY
In addition to our normal operating cash requirements, our principal future cash requirements will be to fund capital expenditures, share repurchases, dividends, strategic acquisitions, and debt repayments. 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. During the six months ended June 30, 2023, we repurchased common stock of $1,176 million. Refer to the section titled Liquidity and Capital Resources of our 2022 Form 10-K for a discussion of our expected capital expenditures, share repurchases, and dividends for 2023.
We continue to identify opportunities to improve our liquidity and working capital efficiency, which includes the extension of payment terms with our suppliers and transfer of our trade receivables to unaffiliated financial institutions on a true sale basis. The impact of these programs is not material to our overall liquidity.
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, we are entitled to receive proceeds related to the HWI Sale. During the six months ended June 30, 2023, we received proceeds from the HWI Sale in the amount of $275 million. These payments and receipts have not materially impacted our liquidity position. See Note 11 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 8 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 SeptemberJune 30, 2022,2023, and December 31, 2021,2022, our total borrowings were $17.0$21.4 billion and $19.6 billion, respectively.
September 30, 2022December 31, 2021June 30, 2023December 31, 2022
Commercial paper and other short-term borrowings$3,434 $3,542 
Commercial paperCommercial paper$2,826 $2,715 
Variable rate notesVariable rate notes22622Variable rate notes22 22 
Fixed rate notesFixed rate notes13,74015,314Fixed rate notes18,834 17,086 
OtherOther282272Other232 267 
Fair value of hedging instrumentsFair value of hedging instruments(294)60Fair value of hedging instruments(285)(287)
Debt issuance costs
Debt issuance costs
(199)(211)Debt issuance costs
(256)(233)
Total borrowingsTotal borrowings$16,985 $19,599 Total borrowings$21,373 $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.
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We also have the following revolving credit agreements:
•A $1.5 billion 364-Day Credit Agreement364-day credit agreement (the 364-Day Credit Agreement) with a syndicate of banks, dated as of March 24, 2022.20, 2023. Amounts borrowed under the 364-Day Credit Agreement are required to be repaid no later than March 23, 2023,18, 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 23, 2024,18, 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 31, 2021,24, 2022, which was terminated in accordance with its terms effective March 24, 2022.20, 2023. As of SeptemberJune 30, 2022,2023, there were no outstanding borrowings under our 364-Day Credit Agreement.
•A $4.0 billion Five Year Credit Agreementfive-year credit agreement (the 5-Year Credit Agreement) with a syndicate of banks, dated as of March 24, 2022.20, 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 yearfive-year credit agreement dated as of March 31, 2021.24, 2022. As of SeptemberJune 30, 2022,2023, there were no outstanding borrowings under our 5-Year Credit Agreement.
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We also have a current shelf registration statement filed with the Securities and Exchange Commission (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 SeptemberJune 30, 2022,2023, 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's
OutlookStableStableStable
Short-termA-1F1P1
Long-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:
Nine Months Ended September 30,
20222021Variance
Cash and cash equivalents at beginning of period$10,959 $14,275 $(3,316)
Operating activities
Net income attributable to Honeywell3,947 4,114 (167)
Noncash adjustments1,202 675 527 
Changes in working capital(1,415)(556)(859)
Other operating activities(826)(858)32 
Net cash provided by operating activities2,908 3,375 (467)
Net cash provided by (used for) investing activities540 (1,347)1,887 
Net cash used for financing activities(6,609)(5,195)(1,414)
Effect of exchange rate changes on cash(349)(21)(328)
Net increase (decrease) in cash and cash equivalents(3,510)(3,188)(322)
Cash and cash equivalents at end of period$7,449 $11,087 $(3,638)
Cash related to operating activities decreased due to an unfavorable impact to working capital and a decrease in net income, partially offset by an increase in noncash adjustments, primarily driven by an increase in repositioning and other charges and a gain from the 2021 sale of the retail footwear business.
Cash related to investing activities increased by $1,887 million primarily due to $1,156 million decrease in cash paid for acquisitions, $685 million increase in cash receipts from settlements of derivative contracts, and $133 million net decrease in investments, partially offset by $203 million in proceeds from the 2021 sale of the retail footwear business.
Cash related to financing activities decreased by $1,414 million primarily due to $2,507 million decrease in proceeds from the issuance of long-term debt and $328 million increase in repurchases of common stock, partially offset by $1,537 million decrease in payments of long-term debt.
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CASH REQUIREMENTS AND ASSESSMENT OF CURRENT LIQUIDITY
In addition to our normal operating cash requirements, our principal future cash requirements will be to fund capital expenditures, share repurchases, dividends, strategic acquisitions and debt repayments. 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. During the nine months ended September 30, 2022, we repurchased common stock of $2,827 million. Refer to the section titled Liquidity and Capital Resources of our 2021 Form 10-K for a discussion of our expected capital expenditures, share repurchases, and dividends for 2022.
We continue to identify opportunities to improve our liquidity and working capital efficiency, which includes the extension of payment terms with our suppliers and sales of our trade receivables to unaffiliated financial institutions without recourse. The impact of these programs is not material to our overall liquidity.
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.
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 8 Long-term Debt and Credit Agreements of Notes to Consolidated Financial Statements for additional discussion of items impacting our liquidity.
OTHER MATTERS
LITIGATION
We are subject to a number of lawsuits, investigations, and claims (some of which involve substantial amounts) arising out of the conduct of our business. See Note 14 Commitments and Contingencies of Notes to Consolidated Financial Statements for further discussion of environmental, asbestos, and other litigation matters.
CRITICAL ACCOUNTING ESTIMATES
There have been no material changes to our Critical Accounting Estimates presented in our 20212022 Annual Report on Form 10-K. For a discussion of the Company’s Critical Accounting Estimates, see the section titled Critical Accounting Estimates in our 20212022 Annual Report on Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements for a discussion of recent accounting pronouncements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
For a discussion of the Company’s quantitative and qualitative disclosures about market risks, see the section titled Quantitative and Qualitative Disclosures About Market Risks in our 20212022 Annual Report on Form 10-K. As of SeptemberJune 30, 2022,2023, there has been no material change in this information.
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ITEM 4. CONTROLS AND PROCEDURES
Honeywell management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that such disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure information required to be disclosed in the reports that Honeywell files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer, our Chief Financial Officer, and our Controller, as appropriate, to allow timely decisions regarding required disclosure. There were no changes that materially affected, or are reasonably likely to materially affect, Honeywell’s internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are subject to a number of lawsuits, investigations, and claims (some of which involve substantial amounts) arising out of the conduct of our business. See a discussion of environmental, asbestos, and other litigation matters in Note 14 Commitments and Contingencies of Notes to Consolidated Financial Statements for a discussion of environmental, asbestos and other litigation matters..
There were no matters requiring disclosure pursuant to the requirement to disclose certain environmental matters involving potential monetary sanctions in excess of $300,000.
ITEM 1A. RISK FACTORS
Other than as noted below, thereThere have been no material changes to our Risk Factors presented in our 20212022 Annual Report on Form 10-K under the section titled Risk Factors. For further discussion of our Risk Factors, refer to the section titled Risk Factors in our 20212022 Annual Report on Form 10-K.
A significant percentage of our sales and operations is in non-U.S. jurisdictions and is subject to the economic, political, regulatory, foreign exchange, and other risks of international operations, including those from the ongoing Russia-Ukraine conflict.
Our international operations, including U.S. exports, represent more than half of the Company’s sales. Risks related to international operations include exchange control regulations, wage and price controls, antitrust regulations, employment regulations, foreign investment laws, import, export and other trade restrictions (such as sanctions and embargoes), differing levels of protection of intellectual property, acts of industrial espionage, violations by our employees of anti-corruption laws (despite our efforts to mitigate such risk), changes in regulations regarding transactions with state-owned enterprises, nationalization of private enterprises, acts of terrorism, acts of war, civil strife, and our ability to hire and maintain qualified staff and maintain the safety of our employees in these regions. Instability and uncertainties arising from the global geopolitical environment and the evolving international and domestic political, regulatory, and economic landscape, including the potential for changes in global trade policies, such as sanctions and trade barriers, and trends such as populism, economic nationalism and negative sentiment toward multinational companies, as well as the cost of compliance with increasingly complex and often conflicting regulations worldwide, can impair our flexibility in modifying product, marketing, pricing or other strategies for growing our businesses, as well as our ability to improve productivity and maintain acceptable operating margins.
Existing free trade laws and regulations provide certain beneficial duties and tariffs for qualifying imports and exports. Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products or from where we import products or raw materials, either directly or through our suppliers, could have an impact on our competitive position and financial results.
The U.S. continues to implement certain trade actions, including imposing tariffs on certain goods imported from China and other countries, which has resulted in retaliatory tariffs by China and other countries. Additional tariffs, export controls and sanctions laws imposed by the U.S. on a broader range of imports, or further retaliatory trade measures taken by China or other countries in response, could increase the cost of our products.
In response to the conflict between Russia and Ukraine, the U.S. and other countries imposed actions including sanctions, export and import controls, and trade restrictions with respect to Russian and Belarusian governments, government-related entities, and other entities and individuals. Further, the Russian government implemented retaliatory actions against the U.S. and other nation members of the North Atlantic Treaty Organization (NATO) as well as certain other nations. As a result of these governmental actions, in March 2022, we suspended substantially all of our sales, distribution, and service activities in Russia and Belarus (the Suspension), and in June 2022, we decided to wind down our existing businesses and operations in Russia (the Wind down). Given the uncertainty inherent in our remaining obligations related to our contracts with Russian counterparties, we do not believe it is possible to develop estimates of reasonably possible loss in excess of current accruals for these matters. Based on available information to date, the Company's estimate of potential future losses or other contingencies related to the Suspension and Wind down activities, including guarantee payments or any litigation costs or as otherwise related to our Wind down in Russia, could adversely affect the Company's consolidated results of operations in periods recognized but would not be material with respect to the Company's consolidated financial position. As the conflict continues to evolve, existing conditions may worsen, or other impacts, including escalation of the conflict in other regions of Europe, where there is a material portion of our business, increased tension between Russia and the U.S. and other NATO members and other countries, or other impacts that are unknown at this time, could lead to increased charges and could have a material adverse effect on our consolidated financial position. These impacts may result in increased costs or additional
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impacts on our operations and may adversely affect our ability to meet contractual and financial obligations, results of operations, and financial condition.
To the extent the current conflict between Russia and Ukraine escalates, it may also negatively impact other risks disclosed in our 2021 Form 10-K and further impact our financial results. Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including inflation and consumer spending; cybersecurity incidents and other disruptions to our information technology infrastructure or that of our customers and suppliers, including disruptions at our cloud computing, server, systems and other third party IT service providers; adverse changes in international trade policies and relations; our ability to implement and execute our business strategy, particularly in Eastern Europe and surrounding regions; disruptions in global supply chains; energy shortages; terrorist activities targeting U.S. government contractors and/or critical infrastructure; our exposure to foreign currency fluctuations; and constraints, volatility, or disruption in the capital markets.
Operating outside of the U.S. also exposes us to foreign exchange risk, which we monitor and seek to reduce through hedging activities. However, foreign exchange hedging activities bear a financial cost and may not always be available to us or be successful in eliminating such volatility. Finally, we generate significant amounts of cash outside of the U.S. that is invested with financial and non-financial counterparties. While we employ comprehensive controls regarding global cash management to guard against cash or investment loss and to ensure our ability to fund our operations and commitments, a material disruption to the counterparties with whom we transact business could expose Honeywell to financial loss.
Operating outside the U.S. also exposes us to additional intellectual property risk. The laws and enforcement practices of certain jurisdictions in which we operate may not protect our intellectual property rights to the same extent as in the U.S. and may impose joint venture, technology transfer, local service or other foreign investment requirements, and restrictions that potentially compromise control over our technology and proprietary information. Failure of foreign jurisdictions to protect our intellectual property rights, an inability to effectively enforce such rights in foreign jurisdictions, or the imposition of foreign jurisdiction investment or sourcing restrictions or requirements could result in loss of valuable proprietary information and could impact our competitive position and financial results.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On February 12, 2021,April 24, 2023, the Board of Directors authorized the repurchase of up to a total of $10 billion of Honeywell common stock, which included amountsincluding approximately $2.1 billion of remaining availability under and replaced, the previously approvedannounced $10 billion share repurchase program.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 SeptemberJune 30, 2022,2023, Honeywell purchased 2,066,3692,430,801 shares of its common stock, par value $1 per share. As of SeptemberJune 30, 2022, $4.32023, $9.6 billion remained available for additional share repurchases. The following table summarizes Honeywell’s purchaseour purchases of itsHoneywell's common stock for the quarter ended SeptemberJune 30, 2022:2023:
Issuer Purchases of Equity Securities
PeriodTotal
Number of
Shares
Purchased		Average
Price Paid
per Share		Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans
or Programs		Approximate Dollar
Value of Shares that
May Yet be
Purchased Under Plans or
Programs
(Dollars in millions)
July 1-31, 2022— $— — $4,668 
August 1-31, 2022756,767 $198.18 756,767 $4,518 
September 1-30, 20221,309,602 $183.21 1,309,602 $4,279 
Issuer Purchases of Equity Securities
PeriodTotal
Number of
Shares
Purchased		Average
Price Paid
per Share		Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans
or Programs		Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under Plans or
Programs
(Dollars in millions)
April 1-30, 2023686,048$193.84686,048$9,986
May 1-31, 2023887,293$196.05887,293$9,812
June 1-30, 2023857,460$198.17857,460$9,642
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ITEM 4. MINE SAFETY DISCLOSURES
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 quarterly report.
ITEM 5. 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 10b5-1 and non-Rule 10b5-1 equity trading plans. The following table describes equity trading plans adopted by our executive officers and directors during the three months ended June 30, 2023:
Name and titleActionPlan TypeDate of adoption of Rule 10b5-1 trading planScheduled expiration of Rule 10b5-1 trading planAggregate number of securities to be purchased or sold
Kevin Burke
Director
AdoptionRule 10b5-15/30/202311/30/20245,732 stock options and associated sale of shares to cover option exercise costs and tax obligations.
During the three months ended June 30, 2023, none of our executive officers or directors terminated or modified a 10b5-1 equity trading plan, or adopted, terminated, or modified any non-Rule 10b5-1 equity trading arrangement (as defined in Item 408(c) of Regulation S-K).
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ITEM 6. EXHIBITS
Exhibit No. Description
10.1*
Offer letter dated July 26, 2022 from Honeywell International Inc. to Vimal Kapur (incorporated by reference to Exhibit 99 to Honeywell's Form 8-K filed on July 28, 2022)
31.1 
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2 
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1 
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2 
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
95
Mine Safety Disclosures (filed herewith)
101.INSInline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCHInline XBRL Taxonomy Extension Schema (filed herewith)
101.CALInline XBRL Taxonomy Extension Calculation Linkbase (filed herewith)
101.DEFInline XBRL Taxonomy Extension Definition Linkbase (filed herewith)
101.LABInline XBRL Taxonomy Extension Label Linkbase (filed herewith)
101.PREInline XBRL Taxonomy Extension Presentation Linkbase (filed herewith)
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
* Management contract or compensatory plan or arrangement

5650    Honeywell International Inc.
TABLE OF CONTENTS
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrantRegistrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 HONEYWELL INTERNATIONAL INC.
   
Date: OctoberJuly 27, 20222023By:/s/ Robert D. Mailloux
  Robert D. Mailloux
Vice President and Controller
(on behalf of the Registrant
and as the Registrant’s
Principal Accounting Officer)
5751    Honeywell International Inc.