Remaining performance obligations for Aerospace Technologies (USD millions)

Remaining performance obligations for Industrial Automation (USD millions)

Remaining performance obligations for Building Automation (USD millions)

Remaining performance obligations for Energy and Sustainability Solutions (USD millions)

Remaining performance obligations for Corporate and All Other (USD millions)

Total remaining performance obligations (USD millions)

d6d1553526d28f0db19432c1912618860f537e16502dca4147decea80fc24e41

Average Resolution Values for Mesothelioma and Other Cancer Claims ($)

Average Resolution Values for Nonmalignant Claims ($)

Bendix Asbestos-Related Claims - Mesothelioma and Other Cancer Claims ($)

Bendix Asbestos-Related Claims - Nonmalignant Claims ($)

36b08033b2afdc5c44b33e0271d85e2279bfb80c5656640d42f7b3ccce79d031

Honeywell International Inc. is a diversified technology and manufacturing company that operates through four main business segments, focusing on aerospace, industrial automation, building automation, and energy solutions **[0000773840-24-000063_a2023sdexhibit1-01.htm:0]** **[0000773840-24-000014_hon-20231231.htm:88]** **[0000773840-24-000054_hon-20240425.htm:3]** **[0000773840-24-000054_hon-20240425.htm:2]**. The company provides a wide range of products, software, and services, including aircraft components, industrial automation solutions, building safety technologies, and energy transition materials **[0000773840-24-000014_hon-20231231.htm:88]** **[0000773840-24-000054_hon-20240425.htm:3]** **[0000773840-24-000014_hon-20231231.htm:5]**. Honeywell's strategic alignment with global megatrends such as automation and energy transition supports its strong financial performance **[0000773840-24-000063_a2023sdexhibit1-01.htm:0]** **[0000773840-24-000054_hon-20240425.htm:2]**.

1. **Aerospace Technologies** - Supplies products, software, and services for aircraft, including auxiliary power units, propulsion engines, and integrated avionics, with major sales from Commercial Aviation Aftermarket, Defense and Space, and Commercial Aviation Original Equipment **[0000773840-24-000014_hon-20231231.htm:88]** **[0000773840-24-000054_hon-20240425.htm:3]** **[0000773840-24-000014_hon-20231231.htm:5]**.
   - **Commercial Aviation Aftermarket** - Provides aftermarket services and products for commercial aircraft.
   - **Defense and Space** - Offers products and services for defense and space applications.
   - **Commercial Aviation Original Equipment** - Supplies original equipment for commercial aviation.

2. **Industrial Automation** - Delivers solutions for intelligent, sustainable, and secure operations across various industries, with key contributions from Process Solutions, Sensing and Safety Technologies, and Warehouse and Workflow Solutions **[0000773840-24-000054_hon-20240425.htm:3]** **[0000773840-24-000014_hon-20231231.htm:5]** **[0000773840-24-000014_hon-20231231.htm:6]**.
   - **Process Solutions** - Offers automation and control solutions for industrial processes.
   - **Sensing and Safety Technologies** - Provides sensing and safety products for industrial applications.
   - **Warehouse and Workflow Solutions** - Supplies solutions for warehouse management and workflow optimization.

3. **Energy and Sustainability Solutions** - Focuses on technologies and materials for energy transition, with significant contributions from the UOP business unit and Advanced Materials **[0000773840-24-000054_hon-20240425.htm:3]** **[0000773840-24-000014_hon-20231231.htm:6]** **[0000773840-24-000054_hon-20240425.htm:4]**.
   - **UOP** - Provides process technology and materials for the energy industry.
   - **Advanced Materials** - Develops materials for energy efficiency and sustainability.

4. **Building Automation** - Offers products and technologies for building safety, energy efficiency, and productivity, with contributions from Products and Building Solutions **[0000773840-24-000014_hon-20231231.htm:88]** **[0000773840-24-000054_hon-20240425.htm:3]** **[0000773840-24-000054_hon-20240425.htm:4]**.
   - **Products** - Supplies building safety and energy efficiency products.
   - **Building Solutions** - Provides integrated solutions for building management and productivity.

1d8f530fde68575460df1115b7475feccee87fe8874ffd14d92c00e6a8787d7c

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

e258bf8515261dc585a555328b2717fe51ae492395682eaa5989395ef90d456c

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

9ca6a46d2d87472481d5a77e10f5f6ac24f8829ed2fddc6976adaed93693cfb5

1. Could you provide more detail on the specific factors that led to the sales miss in Industrial Automation this quarter, particularly the flat sequential revenues and lower volumes in warehouse and workflow solutions, and what steps are being taken to address these issues?  **[HON_3403596_3]** 

2. With the reduction in your full-year sales guidance due to the slower recovery in Industrial Automation and tempered expectations in Aerospace and Energy markets, how confident are you in achieving your organic growth targets next year, and what are the main risks that could impede this growth?  **[HON_3403596_22]** 

3. Given the challenges in working capital management impacting free cash flow, especially the lower progress in Aerospace inventory and slowing payment cycles in certain high-growth regions, what initiatives are you implementing to improve cash flow generation moving forward?  **[HON_3403596_4]** **[HON_3403596_7]** 

4. Could you elaborate on the rationale behind reclassifying the PPE business as assets held for sale and spinning off Advanced Materials, and how these divestitures will enhance your portfolio optimization efforts and financial performance?  **[HON_3403596_2]** 

5. With the anticipated modest margin contraction in Aerospace due to mix headwinds from original equipment activity and the integration of CAES, how do you plan to mitigate these pressures and return to margin expansion in this segment in 2025?  **[HON_3403596_8]** **[HON_3403596_22]** 

0e0dc3442dcada650c1f4d28a40bc346e6c3ae397969f6f976b3452f169a7e9c

5f4dff27e4e5f097217518dbb9a72ccb92ea61136800d86348254ad5aee22f66

aad0d1f08277afca78a119ea650b261bd4695f208eda3e103a54a430c248c565

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- **Garmin** - Competitor in Aerospace
- **L3 Harris** - Competitor in Aerospace
- **Northrop Grumman** - Competitor in Aerospace
- **RTX Corporation** - Competitor in Aerospace
- **Safran** - Competitor in Aerospace
- **Thales** - Competitor in Aerospace
- **Carrier Global** - Competitor in Honeywell Building Technologies
- **Johnson Controls** - Competitor in Honeywell Building Technologies
- **Schneider Electric** - Competitor in Honeywell Building Technologies and Performance Materials and Technologies
- **Siemens** - Competitor in Honeywell Building Technologies
- **ABB** - Competitor in Performance Materials and Technologies
- **Arkema** - Competitor in Performance Materials and Technologies
- **Axens** - Competitor in Performance Materials and Technologies
- **Chemours** - Competitor in Performance Materials and Technologies
- **Emerson Electric** - Competitor in Performance Materials and Technologies
- **Haldor Topsoe** - Competitor in Performance Materials and Technologies
- **Rockwell Automation** - Competitor in Performance Materials and Technologies
- **3M** - Competitor in Safety and Productivity Solutions
- **Kion Group** - Competitor in Safety and Productivity Solutions
- **MSA Safety Incorporated** - Competitor in Safety and Productivity Solutions
- **TE Connectivity** - Competitor in Safety and Productivity Solutions
- **Zebra Technologies** - Competitor in Safety and Productivity Solutions  **[0000773840-24-000014_hon-20231231.htm:7]** 

cd0742683609a45fa2af5836337f759842fd5d0462ac603933210685e20bb6c9

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024 and FY 2024
- **Guidance**:
  1. **Free Cash Flow**: $5.1 billion to $5.4 billion  **[HON_3403596_7]** .
  2. **Full Year Sales**: $38.6 billion to $38.8 billion  **[HON_3403596_5]** .
  3. **Fourth Quarter Sales**: $10.2 billion to $10.4 billion  **[HON_3403596_5]** .
  4. **Segment Margin**: Full year 23.4% to 23.5%; Q4 23.8% to 24.2%  **[HON_3403596_5]** .
  5. **Adjusted EPS**: Full year $10.15 to $10.25; Q4 $2.73 to $2.83  **[HON_3403596_6]** .
  6. **Net Below the Line**: Full year negative $650 million to $700 million; Q4 negative $250 million to $300 million  **[HON_3403596_6]** .
  7. **Pension Income**: $600 million  **[HON_3403596_6]** .
  8. **Repositioning Spend**: Full year $150 million to $190 million; Q4 $60 million to $100 million  **[HON_3403596_6]** .
  9. **Adjusted Effective Tax Rate**: Full year 20%; Q4 17%  **[HON_3403596_6]** .
  10. **Average Share Count**: Full year 655 million; Q4 653 million  **[HON_3403596_6]** .
  11. **Impact of Acquisitions on EPS**: Neutral for 2024, 1% to 2% accretion in 2025  **[HON_3403596_6]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024 and FY 2024
- **Guidance**:
  1. **Sales**: Full year $39.1 billion to $39.7 billion; Q3 $9.8 billion to $10 billion  **[HON_3394265_6]** .
  2. **Acquisitions**: Add $800 million to sales in 2024  **[HON_3394265_6]** .
  3. **Segment Margin**: Full year 23.3% to 23.5%; Q3 23.0% to 23.3%  **[HON_3394265_6]** .
  4. **EPS**: Full year $10.05 to $10.25; Q3 $2.45 to $2.55  **[HON_3394265_8]** .
  5. **Free Cash Flow**: $5.5 billion to $5.9 billion  **[HON_3394265_8]** .
  6. **Pension Income**: $550 million  **[HON_3394265_8]** .
  7. **Net Below-the-Line Impact**: Full year negative $700 million to $800 million; Q3 negative $185 million to $235 million  **[HON_3394265_8]** .
  8. **Repositioning Spend**: Full year $150 million to $225 million; Q3 $30 million to $70 million  **[HON_3394265_8]** .
  9. **Adjusted Effective Tax Rate**: 21% for full year and Q3  **[HON_3394265_8]** .
  10. **Average Share Count**: 655 million for full year and Q3  **[HON_3394265_8]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024 and FY 2024
- **Guidance**:
  1. **Sales**: Full year $38.1 billion to $38.9 billion; Q2 $9.2 billion to $9.5 billion  **[HON_3380715_6]** .
  2. **EPS**: Full year $9.80 to $10.10; Q2 $2.25 to $2.35  **[HON_3380715_8]** .
  3. **Segment Margin**: Expand 30 to 60 basis points for the year; Q2 22.0% to 22.4%  **[HON_3380715_6]** .
  4. **Free Cash Flow**: $5.6 billion to $6 billion  **[HON_3380715_8]** .
  5. **Pension Income**: $550 million  **[HON_3380715_8]** .
  6. **Net Below-the-Line Impact**: Negative $550 million to $700 million  **[HON_3380715_8]** .
  7. **Repositioning Spend**: $200 million to $300 million  **[HON_3380715_8]** .
  8. **Adjusted Effective Tax Rate**: 21% for full year and Q2  **[HON_3380715_8]** .
  9. **Average Share Count**: 656 million  **[HON_3380715_8]** .
  10. **Aerospace Technologies**: Low double-digit growth  **[HON_3380715_7]** .
  11. **Industrial Automation**: Flattish sales growth  **[HON_3380715_7]** .
  12. **Building Automation**: Low single-digit growth  **[HON_3380715_7]** .
  13. **Energy and Sustainability Solutions**: Strong performance  **[HON_3380715_8]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024 and FY 2024
- **Guidance**:
  1. **Sales**: Full year $38.1 billion to $38.9 billion; Q1 $8.9 billion to $9.2 billion  **[HON_3371538_6]** .
  2. **Segment Margin**: Expand 30 to 60 basis points for the year; Q1 21.9% to 22.2%  **[HON_3371538_6]** .
  3. **Adjusted EPS**: Full year $9.80 to $10.10; Q1 $2.12 to $2.22  **[HON_3371538_8]** .
  4. **Pension Income**: $550 million  **[HON_3371538_8]** .
  5. **Net Below-the-Line Impact**: Negative $550 million to $700 million; Q1 negative $140 million to $190 million  **[HON_3371538_8]** .
  6. **Repositioning Spend**: $200 million to $300 million; Q1 $60 million to $100 million  **[HON_3371538_8]** .
  7. **Adjusted Effective Tax Rate**: 21% for full year; Q1 22%  **[HON_3371538_8]** .
  8. **Average Share Count**: 656 million  **[HON_3371538_8]** .
  9. **Free Cash Flow**: $5.6 billion to $6 billion  **[HON_3371538_8]** .
  10. **Aerospace Organic Growth**: Low double-digit range  **[HON_3371538_7]** .
  11. **Industrial Automation Sales**: Flattish  **[HON_3371538_7]** .
  12. **Building Automation Sales Growth**: Low single digit  **[HON_3371538_7]** .
  13. **Energy and Sustainability Solutions Sales**: Flat to up low single digits  **[HON_3371538_8]** .

8301f774266ba19e385c78ace9ae31f044ee2e6f19869ddaf3442f0d29acd7a5

| Name               | Position                                                      | Start Date         | Short Bio                                                                                                                                                                                                 |
|--------------------|---------------------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Vimal Kapur        | Chief Executive Officer                                       | June 1, 2023       | Vimal Kapur has been the CEO of Honeywell since June 1, 2023. He was elected to the Board in March 2023 and succeeded Darius Adamczyk as CEO. He has been with Honeywell since 1989  **[0000773840-24-000032_hon-20240402.htm:25]** **[0000773840-24-000037_hon-20240403.htm:25]** .                                                   |
| Gregory P. Lewis   | Senior Vice President and Chief Financial Officer             | August 2018        | Gregory P. Lewis has been serving as the CFO of Honeywell since August 2018. He was previously Vice President of Enterprise Information Management and CFO of Automation and Control Solutions  **[0000773840-24-000014_hon-20231231.htm:60]** **[0000773840-23-000013_hon-20221231.htm:61]** .                                        |
| Anne T. Madden     | Senior Vice President and General Counsel                     | October 2017       | Anne T. Madden has been the General Counsel at Honeywell since October 2017. She was previously the Corporate Secretary and Vice President of Corporate Development and Global Head of M&A  **[0000773840-24-000014_hon-20231231.htm:60]** **[0000773840-23-000013_hon-20221231.htm:61]** .                                            |
| Lucian Boldea      | President and CEO, Industrial Automation                      | January 1, 2024    | Lucian Boldea is the CEO of Industrial Automation at Honeywell, effective January 1, 2024. He was previously CEO of Performance Materials and Technologies and worked at Eastman Chemical Company  **[0000773840-24-000014_hon-20231231.htm:60]** **[0000773840-24-000014_exhibit106512312023.htm:0]** .                                      |
| James Currier      | President and CEO, Aerospace                                  | August 1, 2023     | James Currier is the CEO of Aerospace Technologies at Honeywell since August 1, 2023. He previously served as President of Electronic Solutions and held other leadership roles within Honeywell  **[0000773840-24-000014_hon-20231231.htm:60]** **[0000773840-24-000014_exhibit106612312023.htm:0]** .                                      |
| Darius Adamczyk    | Executive Chairman and Former CEO                             | June 2023          | Darius Adamczyk has been with Honeywell since 2008. He served as CEO from March 2017 to June 2023 and will retire on June 7, 2024. He has held various leadership roles within Honeywell  **[0000773840-24-000037_hon-20240403.htm:20]** **[0000773840-24-000032_hon-20240402.htm:20]** .                                              |
| Kevin Dehoff       | President and CEO, Connected Enterprise                       | May 2022           | Kevin Dehoff has been the CEO of Connected Enterprise at Honeywell since May 2022. He was previously President of Productivity Solutions and Services and a Senior Partner at McKinsey & Company  **[0000773840-24-000014_hon-20231231.htm:60]** **[0000773840-23-000013_hon-20221231.htm:61]** .                                      |
| Billal M. Hammoud  | President and CEO, Building Automation                        | January 2024       | Billal M. Hammoud is the CEO of Building Automation at Honeywell, effective January 2024. He was previously CEO of Honeywell Building Technologies and held leadership roles at Colfax  **[0000773840-24-000014_hon-20231231.htm:60]** .                                                   |
| Ken West           | President and CEO, Energy and Sustainability Solutions        | January 2024       | Ken West is the CEO of Energy and Sustainability Solutions at Honeywell, effective January 2024. He held various leadership positions within Honeywell's Performance Materials and Technologies division  **[0000773840-24-000014_hon-20231231.htm:60]** .                                  |
| Michael Stepniak   | Upcoming Senior Vice President and Chief Financial Officer    | Future Date        | Michael Stepniak will succeed Greg Lewis as CFO following the announcement of Honeywell's 2024 financial results. He is currently CFO of Honeywell's Aerospace Technologies segment  **[0000773840-24-000086_hon-20240905.htm:1]** .                                                      |
| Greg Lewis         | Upcoming Senior Vice President, Honeywell Accelerator and Senior Advisor | Future Date        | Greg Lewis will transition to Senior Vice President of Honeywell Accelerator and Senior Advisor following the announcement of Honeywell's 2024 financial results. He has been with Honeywell since 2018  **[0000773840-24-000086_hon-20240905.htm:1]** .                                   |

48ff0b3f643ee6e65b88d2bd60b5074ac459c1052fe81e6cc4fe26e1bd0739ff

| Program Details          | Program 1          |
|--------------------------|--------------------|
| Approval Date            | April 24, 2023  **[0000773840-24-000099_hon-20240930.htm:64]**  |
| End Date/Duration        | No expiration date  **[0000773840-24-000099_hon-20240930.htm:64]**  |
| Total additional amount  | $10 billion  **[0000773840-24-000099_hon-20240930.htm:64]**     |
| Remaining authorization  | $5.9 billion  **[0000773840-24-000099_hon-20240930.htm:64]**    |
| Details                  | Offset dilution and reduce share count  **[0000773840-24-000082_hon-20240630.htm:58]** **[0000773840-24-000051_hon-20240331.htm:44]** **[0000773840-23-000073_hon-20230630.htm:54]** **[0000773840-23-000038_hon-20230331.htm:43]** **[0000773840-24-000099_hon-20240930.htm:64]**  |

bc28879552166c7ee6d5c0d7e747c5eacb3ca625dd61d8bc9947dea380e8b64a

United States

Europe

Other International

Total Revenue

6a67db63b293dd8d3ba90ff30e6f17f7798b8ec73bbaa75b8b5146a241afee18

**Quarterly guidance for Q4 2024:**
- **Fourth Quarter Sales**: $10.2 billion to $10.4 billion  **[HON_3403596_5]**  (no prior guidance)  
- **Segment Margin**: 23.8% to 24.2%  **[HON_3403596_5]**  (no prior guidance)  
- **Adjusted EPS**: $2.73 to $2.83  **[HON_3403596_6]**  (no prior guidance)  
- **Net Below the Line**: negative $250 million to $300 million  **[HON_3403596_6]**  (no prior guidance)  
- **Repositioning Spend**: $60 million to $100 million  **[HON_3403596_6]**  (no prior guidance)  
- **Adjusted Effective Tax Rate**: 17%  **[HON_3403596_6]**  (no prior guidance)  
- **Average Share Count**: 653 million  **[HON_3403596_6]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Full Year Sales**: $38.6 billion to $38.8 billion  **[HON_3403596_5]**  (lowered from $39.1 billion to $39.7 billion  **[HON_3394265_6]** )  
- **Segment Margin**: 23.4% to 23.5%  **[HON_3403596_5]**  (raised from 23.3% to 23.5%  **[HON_3394265_6]** )  
- **Adjusted EPS**: $10.15 to $10.25  **[HON_3403596_6]**  (raised from $10.05 to $10.25  **[HON_3394265_8]** )  
- **Free Cash Flow**: $5.1 billion to $5.4 billion  **[HON_3403596_7]**  (lowered from $5.5 billion to $5.9 billion  **[HON_3394265_8]** )  
- **Net Below the Line**: negative $650 million to $700 million  **[HON_3403596_6]**  (raised from negative $700 million to $800 million  **[HON_3394265_8]** )  
- **Pension Income**: $600 million  **[HON_3403596_6]**  (raised from $550 million  **[HON_3394265_8]** )  
- **Repositioning Spend**: $150 million to $190 million  **[HON_3403596_6]**  (lowered from $150 million to $225 million  **[HON_3394265_8]** )  
- **Adjusted Effective Tax Rate**: 20%  **[HON_3403596_6]**  (lowered from 21%  **[HON_3394265_8]** )  
- **Average Share Count**: 655 million  **[HON_3403596_6]**  (no change from prior guidance  **[HON_3394265_8]** )  
- **Impact of Acquisitions on EPS**: Neutral for 2024, 1% to 2% accretion in 2025  **[HON_3403596_6]**  (no prior guidance)

080fb9cea12198e1697e83e9374f0ba738b5d9757c89d2a873a2cc204dbb60d0

| Name                      | Start Date   | End Date   | Reason for Change                                                                 |
|---------------------------|--------------|------------|-----------------------------------------------------------------------------------|
| Deloitte & Touche LLP     | July 29, 2014  **[0000930413-14-003397_c78241_8k.htm:1]**  | Present | Current auditor.                                                              |
| PricewaterhouseCoopers LLP| N/A          | December 31, 2014  **[0000930413-14-003397_c78241_8k.htm:1]**  | The Audit Committee conducted a comprehensive, competitive process to determine the independent registered public accounting firm for the fiscal year ended December 31, 2015, and decided to engage a new auditor.  **[0000930413-14-003397_c78241_8k.htm:1]**  |

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00352a6e37a264e8f1243c27b06b63bbebf10ea72ea67ec5e69d5d1060722081

54b1d86b823d22641652f5adcb2edd09141778693ef8097ef9d48d8b72c94774

- Total Revenue: $9,728 million (+6% YoY)  **[0000773840-24-000099_hon-20240930.htm:4]**   
- Aerospace: $3,912 million (+12% YoY)  **[0000773840-24-000099_hon-20240930.htm:45]**   
- Honeywell Building Technologies: $1,745 million (+14% YoY)  **[0000773840-24-000099_hon-20240930.htm:45]**   
- Performance Materials and Technologies: $1,563 million (**-45%** YoY)  **[0000773840-24-000099_hon-20240930.htm:45]**   
- Safety and Productivity Solutions: $2,501 million (**+90%** YoY)  **[0000773840-24-000099_hon-20240930.htm:45]**   
- Operating Income (EBIT): $1,527 million (**-22%** YoY)  **[0000773840-24-000099_hon-20240930.htm:4]**   
- Net Income: $1,413 million (-7% YoY)  **[0000773840-24-000099_hon-20240930.htm:4]**   

f41afaae4914504ae8b2552a488eb4137000f6f42c3693938a4b8b9679825d96

abbf0600a86f5bae4edd45aa840e81dc61ae6bff82dd7f93e380abf34cd68d55

1. **Margin Outlook**  
   **Q:** How will margins progress throughout the year?  
   **A:** Management expects margin expansion of **30 to 60 basis points** in 2024, driven by **3% pricing**, strong productivity, and leverage from the short-cycle recovery. They are confident in their pricing execution and see **margin accretion** as the year progresses.  **[HON_3371538_13]** 

2. **Capital Deployment and Carrier Deal**  
   **Q:** Is the Carrier acquisition considered a bolt-on, and will there be more deals like it?  
   **A:** They view the Carrier deal as a bolt-on acquisition that adds to their core portfolio, specifically enhancing their security business. The deal is approximately **4% of their market cap**, and they are open to similar-sized acquisitions that fit their strategy and financial criteria.  **[HON_3371538_16]** 

3. **Short-Cycle Recovery Timing**  
   **Q:** What is needed to hit the high end of guidance?  
   **A:** Hitting the high end depends on the pace of the **short-cycle recovery**. Early signs of recovery are appearing in some businesses, and if it accelerates, it could lead to higher growth. Their **backlog is up 8%**, providing a strong foundation.  **[HON_3371538_22]** 

4. **Aerospace Growth Expectations**  
   **Q:** How is Aerospace expected to perform in 2024?  
   **A:** Aerospace is expected to grow at **low double digits**, with continued high growth in Original Equipment (OE) and **double-digit growth in aftermarket**. Supply chain improvements are supporting this growth, and defense is projected to grow in the low to mid-single digits.  **[HON_3371538_21]** 

5. **Warehouse Automation Business Recovery**  
   **Q:** What is the outlook for the warehouse automation business?  
   **A:** The pipeline for warehouse automation projects is up nearly **30%** compared to last year, indicating strong future demand. Despite top-line challenges, they expect **margin expansion** in this business due to cost actions and growth in the aftermarket segment.  **[HON_3371538_25]** 

6. **Regional Outlook and China**  
   **Q:** What are the expectations for China and other regions in 2024?  
   **A:** China's growth is expected to be similar to 2023, around **7%**, with no material shift. High-growth regions like India and the Middle East performed exceedingly well and are expected to continue. Europe remains challenging, and in the U.S., they are watching the interest rate environment.  **[HON_3371538_15]** 

7. **Pricing Strategy for 2024**  
   **Q:** How does pricing factor into the revenue outlook?  
   **A:** They project **3% pricing** in 2024, with price/cost expected to be neutral to slightly positive. This strategy contributes to margin expansion and offsets cost pressures. Pricing execution remains strong across the businesses.  **[HON_3371538_19]** 

8. **UOP and Advanced Materials Outlook**  
   **Q:** What is driving the positive outlook for UOP and Advanced Materials?  
   **A:** UOP carries a strong backlog, with expectation of a **good year** in 2024, supported by growth in catalysts and sustainable technologies. Advanced Materials is seeing a recovery in semiconductors and chemicals, which should continue into 2024.  **[HON_3371538_17]** **[HON_3371538_18]** 

9. **Cash Flow and Potential Tax Benefits**  
   **Q:** Will potential R&D tax benefits impact free cash flow in 2024?  
   **A:** They are not including potential R&D tax benefits in their guidance and prefer to wait for legislative clarity before factoring any impact into their cash flow projections.  **[HON_3371538_20]** 

10. **HBT Destocking and Security Acquisition**  
    **Q:** How does the security acquisition align with destocking in the products business?  
    **A:** While destocking affects the products business in the short term, the security acquisition strengthens their portfolio and positions them for future growth. They expect short-cycle recovery to drive growth as the year progresses, and the acquisition is aligned with their strategy to enhance core offerings.  **[HON_3371538_27]** 

fb90095d8500e48db3877cad422984dc2007d9afc45ff296f082a924310efd9c

d02ed0c0fff123f902d1025eb8953fd7d46e5cec4e59d3eb9fac5c80067b8347

1. **Segment Profit Guidance Reduction**  
   **Q:** Why has segment profit guidance been reduced?  
   **A:** Management explained that the midpoint of their EPS guidance has been reduced by **$0.15**, with about **two-thirds** due to the core business and **one-third** due to recent acquisitions and associated interest costs.  **[HON_3394265_10]** **[HON_3394265_11]** **[HON_3394265_12]**  The core business impact is driven by a mix shift towards long-cycle businesses, which have lower margins compared to short-cycle businesses.  **[HON_3394265_12]** **[HON_3394265_14]**  Despite this, they remain confident about a strong exit rate in the second half.  **[HON_3394265_10]** 

2. **Impact of M&A on Margins**  
   **Q:** How are recent acquisitions affecting margins?  
   **A:** Recent acquisitions are contributing to revenue but are initially dilutive to margins due to integration costs and interest expenses.  **[HON_3394265_10]** **[HON_3394265_11]** **[HON_3394265_16]**  Management noted that about **one-third** of the EPS guidance reduction is due to M&A activities.  **[HON_3394265_11]** **[HON_3394265_12]**  They expect these acquisitions to be accretive beyond 2024 as integration costs subside.  **[HON_3394265_13]** **[HON_3394265_16]** 

3. **Mix Shift to Long-Cycle Businesses**  
   **Q:** How is the shift to long-cycle businesses impacting margins?  
   **A:** The company is seeing stronger growth in long-cycle businesses like Building Solutions and Process Automation, while short-cycle businesses are not accelerating as much as hoped.  **[HON_3394265_10]** **[HON_3394265_12]** **[HON_3394265_27]**  Since long-cycle projects carry margins about **30 points lower** than short-cycle businesses, this mix shift is unfavorably impacting overall margins.  **[HON_3394265_12]** **[HON_3394265_14]**  However, it provides greater visibility and positions them well for future growth.  **[HON_3394265_12]** **[HON_3394265_17]** 

4. **Short-Cycle Business Performance**  
   **Q:** What is happening with short-cycle businesses?  
   **A:** Short-cycle businesses are improving sequentially but not as robustly as expected.  **[HON_3394265_10]** **[HON_3394265_25]**  Certain areas within Building Products and Industrial Automation are growing at the lower end of initial estimates.  **[HON_3394265_12]** **[HON_3394265_25]**  This slower growth contributes to the unfavorable margin mix.  **[HON_3394265_25]** **[HON_3394265_27]** 

5. **Aerospace Growth and Outlook**  
   **Q:** What is the outlook for the Aerospace segment?  
   **A:** Aerospace is expected to continue strong growth, with Original Equipment (OE) sales projected to be up **strong double digits**, approaching **20%**.  **[HON_3394265_23]** **[HON_3394265_24]**  Aftermarket growth is expected in the **mid-teens**, and Defense and Space are also seeing double-digit growth.  **[HON_3394265_24]**  Management remains optimistic about Aerospace performance over the next several years.  **[HON_3394265_19]** **[HON_3394265_23]** 

6. **Orders and Backlog Strength**  
   **Q:** How are orders and backlog trending?  
   **A:** Orders grew **double-digit** in Building Automation and Energy and Sustainability Solutions, and **high single digits** in Industrial Automation.  **[HON_3394265_17]**  This has increased the backlog to **$32 billion**, up **5%**, providing strong visibility into revenue for the second half and supporting the pivot towards long-cycle businesses.  **[HON_3394265_17]** 

7. **BA and IA Margin Expectations**  
   **Q:** How have margin expectations changed for Building Automation (BA) and Industrial Automation (IA)?  
   **A:** Margin expectations for BA and IA have been reduced due to the unfavorable mix shift towards long-cycle businesses.  **[HON_3394265_27]**  Margins are still expected to improve by tens of basis points but not as much as initially anticipated.  **[HON_3394265_27]**  The majority of the guidance reduction is within the IA and BA segments.  **[HON_3394265_16]** **[HON_3394265_27]** 

8. **Pricing and Inflation Impact**  
   **Q:** Has there been any change in pricing or inflation impact?  
   **A:** Pricing remains on track, with rates around **3%** and expected to be slightly stronger in the second half.  **[HON_3394265_27]**  Price-cost is roughly neutral, and strong productivity is contributing to margin expansion.  **[HON_3394265_27]**  Electronics and labor continue to experience elevated inflation.  **[HON_3394265_27]** 

9. **M&A Activity and Divestitures**  
   **Q:** Will the current rate of M&A continue, and how about divestitures?  
   **A:** The M&A pipeline remains active, but the company is mindful of integrating the four recent deals.  **[HON_3394265_26]**  They are working on divestitures and expect to show progress during 2024.  **[HON_3394265_26]** 

10. **Regional Performance**  
    **Q:** How are different regions performing?  
    **A:** China continues to do well, driven by Aerospace and Energy businesses, with growth in the high single digits.  **[HON_3394265_18]**  The Middle East is experiencing strong momentum, especially in Saudi Arabia and UAE.  **[HON_3394265_18]**  Europe is showing signs of recovery, with good revenue progression in the first half.  **[HON_3394265_18]** 

d297183b3113139a2ad3e3923f3f6845d9ead45965c72ab190c1e60623b16084

- **Honeywell expects margin expansion of 30 to 60 basis points in 2024**, driven by **3% pricing**, strong productivity including use of AI, and significant margin accretion from the recovery of high-margin short-cycle businesses. The company remains extremely confident in its margin expansion algorithm.  **[HON_3371538_13]**
- **Advanced Materials business is set to perform better in 2024** due to recovery in semiconductors and certain chemical segments. Honeywell sees a modestly increasing recovery in semis and expects this trend to continue, leading to improved performance compared to 2023.  **[HON_3371538_18]**
- **High-growth regions, representing almost 25% of Honeywell's revenue, are expected to grow double digits in 2024**, with India growing at high double digits and contributing about **1% to overall organic growth**. Strong performance in the Middle East and India will support Honeywell's growth ambitions.  **[HON_3371538_15]**

922d366939d4c1b1ac027d310af69546846dfc151bb2fd175468f2fc460b42b9

- **Honeywell's Aerospace segment expects commercial Original Equipment (OE) to grow double digits**, maintaining strong growth trends, with **demand from Boeing remaining unchanged**. The company is confident in finishing the year strong, **anticipating high single-digit growth in Defense & Space revenues**, with **strong order bookings driven by U.S. and international demand**, indicating extremely favorable trends.  **[HON_3380715_17]** **[HON_3380715_15]**
- **High-growth regions like India, Middle East, and China are showing continued strength**, acting as a tailwind for revenues. **China grew high single digits**, driven by strength in the **aero and energy businesses**. These regions remain a positive factor in overall revenue mix for Honeywell.  **[HON_3380715_21]**
- **Process Solutions business has strong booking trends** and **double-digit aftermarket growth for several consecutive quarters**, with expectations to continue performing well. The business is also **diversifying into new verticals like battery storage and gigafactories**, which are becoming attractive growth opportunities, supporting robust future prospects.  **[HON_3380715_21]**

e165048407c5f017a2f55591e5cd36242daa0be090b3a81f160c47f67b9c518f

- **Margin pressure due to an unfavorable mix shift toward lower-margin long-cycle businesses** is affecting Honeywell's segment margins in key areas like Industrial Automation and Building Automation. Management noted that margins in these segments are coming down versus prior expectations and that progress will be less robust than initially thought.  **[HON_3394265_13]** **[HON_3394265_27]**
- **Integration costs from recent acquisitions are impacting segment profits and EPS**, with the company acknowledging that integration costs are incurred inside segment profit and are affecting margins. They did not provide precise numbers, adding uncertainty about the financial impact of these acquisitions.  **[HON_3394265_16]** **[HON_3394265_15]**
- **Challenges in short-cycle businesses, including destocking and economic slowdown in key regions like China**, are affecting segment performance, particularly in Industrial Automation and Building Automation. Short-cycle businesses are underperforming, and management indicated that the economic slowdown in China is challenging short-cycle businesses there.  **[HON_3394265_18]** **[HON_3394265_13]**

982ea0e3740e2821629324ff9c76f3ef249b237f2c7524f947f4c579b74d55ec

| Year | Amount Due (in millions) | Debt Type                     | Interest Rate (%) | % of Total Debt                     |
|----------|------------------------------|------------------------------------|------------------------|------------------------------------------|
| 2024     | 400 **[0000773840-24-000099_hon-20240930.htm:26]**                  | 4.85% Notes                       | 4.85 **[0000773840-24-000099_hon-20240930.htm:26]**          | 1.3% = (400 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2025     | 1,250 **[0000773840-24-000099_hon-20240930.htm:26]**                | 1.35% Notes                       | 1.35 **[0000773840-24-000099_hon-20240930.htm:26]**          | 4.1% = (1,250 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2026     | 1,500 **[0000773840-24-000099_hon-20240930.htm:26]**                | 2.50% Notes                       | 2.50 **[0000773840-24-000099_hon-20240930.htm:26]**          | 4.9% = (1,500 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2027     | 4,718 **[0000773840-24-000099_hon-20240930.htm:26]**                | 1.10% Notes, 3.50% Euro Notes, 4.65% Notes, 4.37% Term Loan | 1.10 - 4.65 **[0000773840-24-000099_hon-20240930.htm:26]** | 15.3% = (4,718 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2028     | 2,541 **[0000773840-24-000099_hon-20240930.htm:26]**                | 4.95% Notes, 2.25% Euro Notes, 6.625% Debentures | 2.25 - 6.625 **[0000773840-24-000099_hon-20240930.htm:26]** | 8.2% = (2,541 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2029     | 2,000 **[0000773840-24-000099_hon-20240930.htm:26]**                | 4.25% Notes, 2.70% Notes, 4.875% Notes | 2.70 - 4.875 **[0000773840-24-000099_hon-20240930.htm:26]** | 6.5% = (2,000 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2030     | 2,840 **[0000773840-24-000099_hon-20240930.htm:26]**                | 4.70% Notes, 3.375% Euro Notes, 1.95% Notes | 1.95 - 4.70 **[0000773840-24-000099_hon-20240930.htm:26]** | 9.2% = (2,840 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2031     | 2,000 **[0000773840-24-000099_hon-20240930.htm:26]**                | 4.95% Notes, 1.75% Notes          | 1.75 - 4.95 **[0000773840-24-000099_hon-20240930.htm:26]**   | 6.5% = (2,000 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2032     | 1,770 **[0000773840-24-000099_hon-20240930.htm:26]**                | 4.75% Notes, 0.75% Euro Notes, 3.75% Euro Notes | 0.75 - 4.75 **[0000773840-24-000099_hon-20240930.htm:26]** | 5.7% = (1,770 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2033     | 1,501 **[0000773840-24-000099_hon-20240930.htm:26]**                | 5.00% Notes, 9.065% Debentures    | 5.00 - 9.065 **[0000773840-24-000099_hon-20240930.htm:26]**  | 4.9% = (1,501 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2034     | 2,119 **[0000773840-24-000099_hon-20240930.htm:26]**                | 4.50% Notes, 4.125% Euro Notes    | 4.125 - 4.50 **[0000773840-24-000099_hon-20240930.htm:26]**  | 6.9% = (2,119 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2035     | 1,450 **[0000773840-24-000099_hon-20240930.htm:26]**                | 5.00% Notes                       | 5.00 **[0000773840-24-000099_hon-20240930.htm:26]**          | 4.7% = (1,450 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2036     | 1,281 **[0000773840-24-000099_hon-20240930.htm:26]**                | 3.75% Euro Notes, 5.70% Notes     | 3.75 - 5.70 **[0000773840-24-000099_hon-20240930.htm:26]**   | 4.2% = (1,281 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2037     | 462 **[0000773840-24-000099_hon-20240930.htm:26]**                  | 5.70% Notes                       | 5.70 **[0000773840-24-000099_hon-20240930.htm:26]**          | 1.5% = (462 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2041     | 417 **[0000773840-24-000099_hon-20240930.htm:26]**                  | 5.375% Notes                      | 5.375 **[0000773840-24-000099_hon-20240930.htm:26]**         | 1.4% = (417 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2047     | 442 **[0000773840-24-000099_hon-20240930.htm:26]**                  | 3.812% Notes                      | 3.812 **[0000773840-24-000099_hon-20240930.htm:26]**         | 1.4% = (442 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2050     | 750 **[0000773840-24-000099_hon-20240930.htm:26]**                  | 2.80% Notes                       | 2.80 **[0000773840-24-000099_hon-20240930.htm:26]**          | 2.4% = (750 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2054     | 1,750 **[0000773840-24-000099_hon-20240930.htm:26]**                | 5.25% Notes                       | 5.25 **[0000773840-24-000099_hon-20240930.htm:26]**          | 5.7% = (1,750 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |
| 2064     | 650 **[0000773840-24-000099_hon-20240930.htm:26]**                  | 5.35% Notes                       | 5.35 **[0000773840-24-000099_hon-20240930.htm:26]**          | 2.1% = (650 / 30,800) * 100 **[0000773840-24-000099_hon-20240930.htm:26]** **[0000773840-24-000099_hon-20240930.htm:56]** |

439579969ff5b45fbc8ebb54c7309676a823b4e770a125445eb46313f3f35a49

- **Warehouse automation business is facing weak order conversions**, with the pipeline remaining strong but order conversion being weak, specifically in the project side. The business is currently in a trough, awaiting recovery.  **[HON_3380715_10]**
- **Aerospace margins are expected to remain flat for the year**, with product mix and shifts between original equipment (OE) and aftermarket sales impacting profitability. Despite strong growth in commercial OE, margins may dampen due to OE mix.  **[HON_3380715_17]**
- **Energy and Sustainability Solutions (ESS) experienced margin contraction** due to onetime factory restart costs, which are expected to continue affecting margins until stabilization is achieved later in the year.  **[HON_3380715_24]**

28328e83428624b588ddb4a23b82a62eabbf320ac89020472be3b4008251c8f2

1. **2025 Outlook and Margin Expansion**  
   **Q:** Any updated thoughts on 2025 outlook and margins?  
   **A:** Honeywell expects all four segments to have organic growth in 2025 and anticipates returning to margin expansion. Confidence stems from a **6% increase in backlog** (**10% including acquisitions**) and a robust cost position driving margin expansion across all segments. They remain cautious due to uncertainties like wars and upcoming U.S. elections and will provide specific guidance in January.  **[HON_3403596_9]** **[HON_3403596_11]** 

2. **Free Cash Flow Guidance Cut**  
   **Q:** What's causing the free cash flow guidance cut?  
   **A:** The reduction is due to higher inventory in Aerospace, which remains challenging to reduce, and slowing payment cycles in high-growth regions, partly because of oil prices and Middle East disruptions. Progress has been made in inventory reduction in Industrial Automation and Buildings Automation, but not in Aerospace.  **[HON_3403596_12]** 

3. **Portfolio Actions and Divestitures**  
   **Q:** Any impact of market changes on portfolio measures like PPE and Advanced Materials?  
   **A:** Portfolio actions are driven by fitting Honeywell into three simplified megatrends. Actions like spinning off Advanced Materials and selling PPE reflect this commitment. Honeywell is continually assessing its portfolio to improve growth and margin expansion, with further divestitures possible but not on a specific timeline.  **[HON_3403596_10]** **[HON_3403596_21]** 

4. **Aerospace Growth and Margins**  
   **Q:** How is Aerospace growth and margin outlook for Q4 and 2025?  
   **A:** Aerospace growth is slowing to mid- to high single digits in Q4 due to elevated comps and prior disruptions like a plant fire and hurricane impacts. The company expects continued organic growth and maintains a positive outlook, with a backlog exceeding **$2 billion** carrying into 2025. Margins will see some reversion in Q4 due to increased OE shipments, but the full-year margin outlook remains unchanged.  **[HON_3403596_17]** **[HON_3403596_19]** 

5. **Project Delays in Process Solutions and UOP**  
   **Q:** What's causing project delays in Process Solutions and UOP?  
   **A:** Delays are due to customers pushing out smaller projects and catalyst shipments, influenced by uncertainties like Middle East conflicts and oil price fluctuations, as well as awaiting outcomes of U.S. elections. Despite this, UOP achieved a historic high of **$1 billion** in orders in the quarter, driven by long-cycle commitments.  **[HON_3403596_23]** 

6. **Industrial Automation Performance**  
   **Q:** Is Honeywell holding or losing share in Industrial Automation?  
   **A:** Performance is aligned with market drivers across multiple global end markets, including significant presence in Germany and China. Economic dynamics in these regions have impacted results. Looking ahead, headwinds like the rebaselining of Intelligrated volumes and the absence of Zebra royalties will be behind them, positioning the segment for growth in 2025.  **[HON_3403596_18]** 

7. **Intelligrated Business Turnaround**  
   **Q:** How do you plan to fix the Intelligrated business?  
   **A:** Intelligrated saw slight sequential growth in Q3, expected to continue in Q4, indicating the business is at its bottom with a slight turnaround. The aftermarket is projected to become **60% of revenue in 2025**, up from 30%. The main constraint is customer adoption rates due to high capital investment requirements. The cost base has been rebaselined to a **$1 billion** run-rate revenue.  **[HON_3403596_16]** 

8. **Defense Business Growth Outlook**  
   **Q:** Can defense growth momentum continue into 2025?  
   **A:** Honeywell expects strong growth in its defense business to continue in 2025, supported by solid order books and sustained demand. The acquisition of CAES, serving the defense segment, will increase the mix of defense in the Aerospace portfolio, further boosting growth.  **[HON_3403596_24]** 

9. **Aftermarket Performance in Aerospace**  
   **Q:** What's driving aftermarket growth in Aerospace?  
   **A:** Aftermarket growth is stronger in Air Transport (ATR), with double-digit increases, while Business General Aviation (BGA) is growing at single digits. This trend is expected to continue, driven by expanding international flight hours and successful RMU (Retrofit, Modifications, and Upgrades) portfolio development.  **[HON_3403596_13]** **[HON_3403596_20]** 

10. **Geographical Performance**  
    **Q:** How are different regions performing, especially in Buildings?  
    **A:** Europe is showing moderate recovery in Building Automation, having crossed the trough with improving short-cycle business. In China, performance is flat to slightly contracting in automation businesses, with no change in trajectory. Honeywell sees strong growth in India and Saudi Arabia, which are becoming catalysts for growth with double-digit revenue increases.  **[HON_3403596_25]** 

7b0f33745236fe18bafd86d3b35ae744187e9d5f35fdfe576af213e91bbcb34e

- Honeywell's **automation businesses in China are flat to slight contraction**, with **no observed change in trajectory**, indicating weakness in this key market.  **[HON_3403596_26]**
- **Industrial Automation sales decreased 5% organically** in the quarter, primarily due to lower volumes in warehouse and workflow solutions and short-cycle safety and sensing technologies, reflecting ongoing declines in this segment.  **[HON_3403596_4]**
- The company had to **rebaseline its expectations for the year** due to **near-term delays in project-led businesses, lack of short cycle improvement, and supply chain disruptions**, resulting in **organic growth of 3% coming in below guidance**, highlighting operational challenges.  **[HON_3403596_1]**

1b47137de36be8e89bfd3de818286fd92c8ce679ea8e9afb7ce0d2f2685aed36

- **Honeywell anticipates organic growth across all four business segments in 2025**, supported by a **backlog up 6%, or 10% with acquisitions**, and plans to **return to margin expansion** next year.  **[HON_3403596_10]**
- The company is experiencing a **moderate recovery in European building automation**, having **"crossed the trough in Europe"**. Additionally, there is **strong double-digit revenue growth** in **India and Saudi Arabia**, acting as catalysts for growth.  **[HON_3403596_26]**
- Honeywell is **strengthening its portfolio** through strategic acquisitions in **high-demand markets** such as **defense, LNG, and access solutions**, which is **improving the growth profile** of the company.  **[HON_3403596_14]**

54034af6fe055bdb0f71f0eeee09837a8c640d044b63020a4e0547e5e7b78d56

1. **Portfolio Actions**  
   **Q:** Do you anticipate further portfolio actions?  
   **A:** Vimal Kapur plans to take action on about **10% of the portfolio** that doesn't align with Honeywell's three megatrends. These actions will be incremental, involving several small divestitures rather than one large one. Honeywell will continue to be its own activist and consider changes where necessary to optimize the portfolio.  **[HON_3380715_11]** **[HON_3380715_22]** 

2. **Margin Outlook**  
   **Q:** How will margins evolve, especially in IA and BA?  
   **A:** Margin expansion in both Building Automation (BA) and Industrial Automation (IA) depends significantly on the **recovery of short-cycle businesses**, volume leverage, and productivity improvements. While Aerospace margins were strong in Q1, they are expected to be **flattish for the year** due to product mix and higher OE volumes. Honeywell anticipates stronger margins in the second half as product volumes increase.  **[HON_3380715_18]** **[HON_3380715_14]** **[HON_3380715_19]** 

3. **Aerospace Outlook**  
   **Q:** How is Aerospace performing amid production changes?  
   **A:** Despite supply chain challenges, Aerospace is expected to continue **strong growth in both OE and aftermarket**, with commercial OE growth potentially accelerating. Issues with Boeing's 737 MAX and 787 production are not expected to significantly impact Honeywell due to their presence across multiple platforms. Aerospace margins are expected to be **flattish year-over-year**, with Q1 being the high point.  **[HON_3380715_17]** **[HON_3380715_19]** 

4. **Industrial Automation Revenue**  
   **Q:** What drives the H2 revenue increase in IA?  
   **A:** The second-half pickup in IA revenue is attributed to recovery in **short-cycle businesses**, strong performance in **Process Solutions (HPS)**, and growth in sensing and other product lines. Honeywell expects **stronger H2 versus H1**, with IA contributing significantly to the revenue ramp supported by order spacing and backlog.  **[HON_3380715_13]** 

5. **Defense and Space Outlook**  
   **Q:** What's driving growth in Defense and Space?  
   **A:** Growth is driven by **supply chain improvements** and increasing demand from both U.S. and international markets. Honeywell expects **high single-digit revenue growth** in Defense and Space, with stronger orders and a positive outlook for the second half and beyond. The business is benefiting from not only domestic but also strong international demand.  **[HON_3380715_15]** 

6. **Quantinuum Monetization**  
   **Q:** What's the timeline for monetizing Quantinuum?  
   **A:** Honeywell anticipates a potential monetization event for Quantinuum around **2025**, contingent on achieving key milestones. Recent progress includes a pre-money valuation exceeding **$5 billion** and technological advancements in quantum computing accuracy, such as successful experiments with Microsoft demonstrating reliable results.  **[HON_3380715_23]** 

7. **ESS and UOP Outlook**  
   **Q:** What's the outlook for ESS/UOP and green projects?  
   **A:** Honeywell remains **very bullish on UOP**, with strong traditional energy projects and a robust pipeline of renewable technologies. They expect strong orders and revenue growth in 2024 and beyond, with new technologies like producing **sustainable aviation fuel (SAF) from biomass** contributing to future prospects. The outlook for UOP is extremely positive, driven by both traditional and new energy segments.  **[HON_3380715_16]** 

8. **M&A Pipeline**  
   **Q:** How is the M&A pipeline developing?  
   **A:** The M&A pipeline is **very strong**, with Honeywell remaining disciplined on strategic fit and valuation. They expect to continue taking actions to add new businesses to the portfolio and express a positive outlook on future acquisitions, indicating ongoing efforts to deploy capital effectively.  **[HON_3380715_25]** 

9. **Regional Performance**  
   **Q:** How are different regions performing?  
   **A:** High-growth regions like **India and the Middle East** continue to show strength. China grew at **high single digits**, driven by Aerospace and energy businesses. Europe has stabilized, with positive trends, especially in short-cycle businesses, indicating that the worst is likely behind them.  **[HON_3380715_20]** 

10. **Process Business Outlook**  
    **Q:** What's the outlook for Process Solutions?  
    **A:** The Process Solutions business is performing well, with strong bookings and **double-digit aftermarket growth** for several consecutive quarters. The business is diversifying into new verticals like **battery storage and gigafactories**, and expects to replicate 2023's high growth pattern, with a strong outlook ahead.  **[HON_3380715_21]** 

11. **Warehouse Automation**  
    **Q:** What's the outlook for warehouse automation?  
    **A:** The warehouse automation business is currently in a trough, with weak order conversions in projects despite a strong pipeline. Aftermarket growth remains positive, indicating continued usage of deployed systems. Honeywell remains optimistic about the business prospects and anticipates a recovery in the future.  **[HON_3380715_10]** 

12. **ESS Margins**  
    **Q:** Can you quantify ESS margin contraction due to restart costs?  
    **A:** The margin contraction in ESS is due to the restart of a major facility, which involves certain costs and operational challenges. The business, worth approximately **$400 million annually**, is expected to stabilize by the end of the year, leading to a strong exit rate into **2025**. Honeywell anticipates improved margins as operations become more stable.  **[HON_3380715_24]** 

779cc99befca762aac041d4ae45e4321cc4d1cc144a6d9d31da4be1a032ff197

- **Honeywell is pivoting its Aerospace business towards higher-growth segments, such as defense, aiming for sustained high single-digit growth over the next 5 to 7 years, and is optimistic about the business's future performance.**  **[HON_3394265_19]**
- **The company is making strategic acquisitions that are accretive to Honeywell's baseline growth rate, with significant synergies expected, particularly in Aerospace and Energy sectors, enhancing future earnings and growth.**  **[HON_3394265_22]**
- **Honeywell expects commercial original equipment (OE) sales in Aerospace to grow strong double digits, approximately 20% for the year**, driven by sustained demand and increased shipset deliveries, bolstering its growth prospects.  **[HON_3394265_23]**

6a4e7e1fe2cdb73ee1cfb6cc81c7d0c36bfb655f33590cc33ca52eb0f8769717

- **Challenging Geographies**: Honeywell faces headwinds in Europe, with negative or neutral performance expected due to economic challenges in the region. Additionally, China is no longer a significant source of high growth as it was 5 to 7 years ago, which may impact overall growth prospects.  **[HON_3371538_15]**
- **Dependence on Short-Cycle Recovery**: The Industrial Automation (IA) and Energy and Sustainability Solutions (ESS) segments are experiencing declines, with recovery dependent on the uncertain timing of short-cycle market improvements. This poses risks to overall performance, as these segments are expected to remain flat or decline until a market rebound occurs, which is anticipated to be back half weighted.  **[HON_3371538_19]**
- **Margin Pressures in Aerospace**: Despite robust demand, Aerospace margins are expected to remain comparable to recent levels due to higher sales of lower-margin products, continued investments, and supply chain constraints. This limits Honeywell's ability to expand margins in one of its key growth segments.  **[HON_3371538_13]** ,  **[HON_3371538_24]**

68cfb447538f99fbdfa6d2559e1f6fed65cdba239fa72a34b11868f6a59900e0

Honeywell International Inc (HON)

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