Company Announcements

Honeywell International Inc. - Honeywell Delivers Strong Earnings

Honeywell Delivers Strong Earnings With 370 Basis Points Of Operating Margin Expansion And 180 Basis Points Of Segment Margin Expansion; Raises 2019 Full-Year Earnings And Margin Guidance(1)

- Reported Earnings per Share of $2.23; Adjusted Earnings per Share(2) of $2.08, up 9% Ex-Spins(2)

- Reported Sales Down 16% Due to Impact of 2018 Spin-Offs; Organic Sales up 3% Driven by Aerospace, Process Solutions, and Building Technologies

- Operating Income Margin up 370 Basis Points to 19.3%; Segment Margin up 180 Basis Points to 21.2%

- Deployed $1.0 Billion in Capital to Share Repurchases; Announced 10% Dividend Increase

CHARLOTTE, N.C., Oct. 17, 2019 /PRNewswire/ -- Honeywell (NYSE: HON) today announced its financial results for the third quarter of 2019 and raised its full-year segment margin and adjusted earnings per share financial guidance1, narrowed its sales guidance and reaffirmed its cash flow guidance.

"We continue to deliver strong results and returns for our shareowners, even with the ongoing uncertainty in the macroeconomic environment," said Darius Adamczyk, chairman and chief executive officer of Honeywell. "We delivered adjusted earnings per share2 of $2.08, up 9%, excluding the impact of the spin-offs2, which was above the high end of our third-quarter guidance range. Organic sales growth of 3% was driven by strength across Aerospace, continued demand for commercial fire products in Building Technologies, and broad-based growth in Process Solutions. In addition, Honeywell Connected Enterprise drove double-digit connected software growth, continuing our transformation into a premier software industrial company. Our productivity rigor and the favorable impact of the 2018 spin-offs also contributed to our strong results and expanded segment margin, which was up 180 basis points to 21.2% in the quarter."

"We remain on track to meet our cash flow commitments for the year, and we continued to execute on our capital deployment strategy in the third quarter. We repurchased $1.0 billion in Honeywell shares, bringing total repurchases in the first nine months of 2019 to $3.7 billion. We also acquired TruTrak Flight Systems, made three strategic investments within Honeywell Ventures, and announced a 10% dividend increase, the tenth consecutive double-digit dividend increase. Additionally, during the quarter, we issued $2.7 billion of senior notes to refinance October debt maturities at attractive rates, further strengthening our balance sheet," said Adamczyk.

"Overall, we had a strong third quarter, which was a continuation of very strong performance year-to-date. We are well positioned in attractive end markets with multiple levers for value creation heading into 2020. We remain committed to delivering outstanding returns for our customers, shareowners, and employees over the long-term," concluded Adamczyk.

As a result of the company's performance in the first three quarters and management's outlook for the remainder of the year, Honeywell updated its full-year financial guidance1. Organic sales growth is now expected to be in the range of 4% to 5%; segment margin1 is now expected to be 20.9% to 21.0%, up 20 basis points from the low end of the prior guidance range; and adjusted earnings per share1 is now expected to be $8.10 to $8.15, up fifteen cents from the low end of the prior guidance range.

A summary of the company's full-year guidance changes can be found in Table 1.

Third-Quarter Performance

Honeywell sales for the third quarter were down 16% on a reported basis and up 3% on an organic basis. The difference between reported and organic sales primarily relates to the spin-offs of the Transportation Systems business (formerly in Aerospace) and the Homes and ADI Global Distribution business (formerly in Honeywell Building Technologies) as well as the impact of foreign currency translation. The third-quarter financial results can be found in Tables 2 and 3.

Aerospace sales for the third quarter were up 10% on an organic basis driven by continued double-digit growth in the Defense and Space business, strength in the commercial aftermarket, and original equipment demand across air transport and business aviation. Segment margin expanded 350 basis points to 25.6%, primarily driven by commercial excellence, productivity, net of inflation, and the favorable impact from the spin-off of the Transportation Systems business in 2018.

Honeywell Building Technologies sales for the third quarter were up 3% on an organic basis driven by continued demand for commercial fire and building management products, and building projects across the Americas. Segment margin expanded 390 basis points to 21.0% driven by the favorable impact from the spin-off of the Homes and ADI Global Distribution business in 2018.

Performance Materials and Technologies sales for the third quarter were up 3% on an organic basis driven by robust demand for services, gas products, and automation projects in Process Solutions, double-digit software growth driven by demand for Honeywell Forge for Industrial, and strength in licensing and refining catalysts in UOP. This was partially offset by lower gas processing sales in UOP and declines in Advanced Materials, which was impacted by continued illegal imports of hydrofluorocarbons (HFCs) into Europe. Segment margin expanded 60 basis points to 21.8%, primarily driven by productivity, net of inflation, and commercial excellence.

Safety and Productivity Solutions sales for the third quarter were down 8% on an organic basis driven by distributor destocking that resulted in lower sales volumes in productivity products and the impact of major systems project timing in Intelligrated, which more than offset continued demand for gas sensing and detection products. Segment margin contracted 320 basis points to 13.4%, primarily driven by lower sales volumes in productivity products and higher sales of lower margin products.

Conference Call Details

Honeywell will discuss its third-quarter results and updated full-year guidance during an investor conference call starting at 8:30 a.m. Eastern Daylight Time today. To participate on the conference call, please dial (800) 239-9838 (domestic) or (323) 794-2551 (international) approximately ten minutes before the 8:30 a.m. EDT start. Please mention to the operator that you are dialing in for Honeywell's third-quarter 2019 earnings call or provide the conference code HON3Q19. The live webcast of the investor call as well as related presentation materials will be available through the Investor Relations section of the company's website (www.honeywell.com/investor). Investors can hear a replay of the conference call from 12:30 p.m. EDT, October 17, until 12:30 p.m. EDT, October 24, by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international). The access code is 7673176.

TABLE 1: FULL-YEAR 2019 GUIDANCE 1


                              Previous Guidance  Current Guidance

Sales                          $36.7B - $37.2B$36.7B - $36.9B

Organic Growth                     4% - 6%           4% - 5%

Segment Margin                  20.7% - 21.0%     20.9% - 21.0%

Expansion                     Up 110 - 140 bps   Up 130 - 140 bps

Expansion Ex-Spins3            Up 30 - 60 bps     Up 50 - 60 bps

Adjusted Earnings Per Share4    $7.95 - $8.15$8.10 - $8.15

Earnings Growth Ex-Spins          8% - 10%            ~ 10%

Operating Cash Flow             $6.2B - $6.5B$6.2B - $6.5B

Adjusted Free Cash Flow5        $5.7B - $6.0B$5.7B - $6.0B

Conversion                       98% - 100%         98% - 100%



TABLE 2: SUMMARY OF HONEYWELL FINANCIAL RESULTS


                                       3Q 2018  3Q 2019  Change

Sales                                   10,762    9,086   (16)%

Organic Growth                                             3%

Segment Margin                           19.4%    21.2%  180 bps

Operating Income Margin                  15.6%    19.3%  370 bps

Reported Earnings Per Share              $3.11$2.23   (28)%

Adjusted Earnings Per Share Ex-Spins6    $1.90$2.08    9%

Cash Flow from Operations                1,878    1,471   (22)%

Adjusted Free Cash Flow7                 1,809    1,286   (29)%



TABLE 3: SUMMARY OF SEGMENT FINANCIAL RESULTS


AEROSPACE                               3Q 2018  3Q 2019   Change

Sales                                     4,030    3,544    (12)%

Organic Growth                                               10%

Segment Profit                              891      908     2%

Segment Margin                            22.1%    25.6%   350 bps

HONEYWELL BUILDING TECHNOLOGIES

Sales                                     2,517    1,415    (44)%

Organic Growth                                               3%

Segment Profit                              430      297    (31)%

Segment Margin                            17.1%    21.0%   390 bps

PERFORMANCE MATERIALS AND TECHNOLOGIES

Sales                                     2,640    2,670     1%

Organic Growth                                               3%

Segment Profit                              560      582     4%

Segment Margin                            21.2%    21.8%   60 bps

SAFETY AND PRODUCTIVITY SOLUTIONS

Sales                                     1,575    1,457    (7)%

Organic Growth                                              (8)%

Segment Profit                              262      195    (26)%

Segment Margin                            16.6%    13.4%  (320) bps

1As discussed in the notes to the attached reconciliations, we do not
provide guidance for margin or EPS on a GAAP basis.

2Adjusted EPS and adjusted EPS V% ex-spins exclude 3Q18 after-tax
separation costs related to the spin-offs of Resideo and Garrett, the
3Q18 after-tax segment profit contribution from Resideo and Garrett, net
of the spin indemnification impacts assuming both indemnification
agreements were effective in 3Q18, and adjustments to the charges taken
in connection with the 4Q17 U.S. tax legislation charge.

3Segment margin expansion ex-spins guidance excludes sales and segment
profit contribution from Resideo and Garrett in 2018.

4Adjusted EPS and adjusted EPS V%, ex-spins, guidance excludes pension
mark-to-market, adjustments to the charges taken in connection with the
4Q17 U.S. tax legislation charge, 2018 after-tax separation costs related
to the spin-offs of Resideo and Garrett, and the 2018 after-tax segment
profit contribution from the spin-offs, net of spin indemnification
impacts assuming both indemnification agreements were effective for all
of 2018, of $0.62.

5Adjusted free cash flow guidance and associated conversion exclude
estimated payments of ~$0.3B for separation costs incurred in 2018
related to the spin-offs of Resideo and Garrett. Adjusted free cash flow
conversion guidance also excludes pension mark-to-market and adjustments
to the charges taken in connection with the 4Q17 U.S. tax legislation
charge. As discussed in the notes to the attached reconciliations, we do
not provide cash flow conversion guidance on a GAAP basis.

6Adjusted EPS ex-spins and adjusted EPS V% ex-spins exclude 3Q18
after-tax separation costs related to the spin-offs of Resideo and
Garrett of $233M, and the favorable adjustments to the charges taken in
connection with the 4Q17 U.S. tax legislation charge of $114M in 3Q19 and
$1,047M in 3Q18. Also excludes the 3Q18 after-tax segment profit
contribution from the spin-offs, net of spin indemnification impacts
assuming both indemnification agreements were effective in 3Q18, of
$0.13.

7Adjusted free cash flow and adjusted free cash flow V% exclude impacts
from separation costs related to the spin-offs of $7M in 3Q19 and $114M
in 3Q18.



Honeywell (http://www.honeywell.com/) is a Fortune 100 technology company that delivers industry specific solutions that include aerospace products and services; control technologies for buildings and industry; and performance materials globally. Our technologies help everything from aircraft, buildings, manufacturing plants, supply chains, and workers become more connected to make our world smarter, safer, and more sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom.

This release contains certain statements that may be deemed "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission.

This release contains financial measures presented on a non-GAAP basis. Honeywell's non-GAAP financial measures used in this release are as follows: segment profit, on an overall Honeywell basis, a measure by which we assess operating performance, which we define as operating income adjusted for certain items as presented in the Appendix; segment margin, on an overall Honeywell basis, which we define as segment profit divided by sales and which we adjust to exclude sales and segment profit contribution from Resideo and Garrett in 2018, if and as noted in the release; organic sales growth, which we define as sales growth less the impacts from foreign currency translation, and acquisitions and divestitures for the first 12 months following transaction date; adjusted free cash flow, which we define as cash flow from operations less capital expenditures and which we adjust to exclude the impact of separation costs related to the spin-offs of Resideo and Garrett, if and as noted in the release; adjusted free cash flow conversion, which we define as adjusted free cash flow divided by net income attributable to Honeywell, excluding pension mark-to-market expenses, separation costs related to the spin-offs, and adjustments to the charges taken in connection with the 4Q17 U.S. tax legislation charge, if and as noted in the release; and adjusted earnings per share, which we adjust to exclude pension mark-to-market expenses, as well as for other components, such as separation costs related to the spin-offs, adjustments to the charges taken in connection with the 4Q17 U.S. tax legislation charge, and after-tax segment profit contribution from Resideo and Garrett in the periods noted in the release, net of spin indemnification impacts assuming both indemnification agreements were effective in such periods, if and as noted in the release. The respective tax rates applied when adjusting earnings per share for these items are identified in the release or in the reconciliations presented in the Appendix. Management believes that, when considered together with reported amounts, these measures are useful to investors and management in understanding our ongoing operations and in the analysis of ongoing operating trends. These metrics should be considered in addition to, and not as replacements for, the most comparable GAAP measure. Refer to the Appendix attached to this release for reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures.


                          Honeywell International Inc.

                Consolidated Statement of Operations (Unaudited)

                (Dollars in millions, except per share amounts)

                    Three Months Ended             Nine Months Ended
                      September 30,                  September 30,

                      2019      2018      2019                 2018

Product sales       $ 6,793$ 8,477$ 20,496$ 25,414

Service sales         2,293     2,285      6,717                          6,659

Net sales             9,086    10,762     27,213                         32,073

Costs, expenses and
other

Cost of products      4,775     6,127     14,244                         18,234
sold (1)

Cost of services      1,263     1,429      3,767                          4,127
sold (1)

                      6,038     7,556     18,011                         22,361

Selling, general      1,296     1,524      4,046                          4,527
and administrative
expenses (1)

Other (income)        (311)     (275)      (901)                          (859)
expense

Interest and other       96        99        266                            277
financial charges

                      7,119     8,904     21,422                         26,306

Income before taxes   1,967     1,858      5,791                          5,767

Tax expense             319     (498)      1,151                            679
(benefit)

Net income            1,648     2,356      4,640                          5,088

Less: Net income         24        18         59                             44
attributable to the
noncontrolling
interest

Net income          $ 1,624$ 2,338$  4,581$  5,044
attributable to
Honeywell

Earnings per share  $  2.26$  3.15$   6.33$   6.76
of common stock -
basic

Earnings per share  $  2.23$  3.11$   6.25$   6.67
of common stock -
assuming dilution

Weighted average      717.6     741.8      723.5                          746.0
number of shares
outstanding - basic

Weighted average      726.7     752.0      732.8                          756.0
number of shares
outstanding -
assuming dilution

                (1) Cost of products and services sold and selling,
                    general and administrative expenses include amounts
                    for repositioning and other charges, the service
                    cost component of pension and other postretirement
                    (income) expense, and stock compensation expense.



   


                          Honeywell International Inc.

                            Segment Data (Unaudited)

                             (Dollars in millions)

                                      Three Months Ended     Nine Months Ended
                                         September 30,         September 30,

Net Sales                               2019      2018       2019        2018

Aerospace                             $ 3,544$  4,030$ 10,393$ 12,065

Honeywell Building Technologies         1,415      2,517      4,254      7,496

Performance Materials and               2,670      2,640      7,977      7,872
Technologies

Safety and Productivity Solutions       1,457      1,575      4,589      4,640

Total                                 $ 9,086$ 10,762$ 27,213$ 32,073

            Reconciliation of Segment Profit to Income Before Taxes

                                      Three Months Ended     Nine Months Ended
                                         September 30,         September 30,

Segment Profit                          2019      2018       2019        2018

Aerospace                             $   908$    891$  2,653$  2,702

Honeywell Building Technologies           297        430        868      1,273

Performance Materials and                 582        560      1,790      1,676
Technologies

Safety and Productivity Solutions         195        262        598        760

Corporate                                (54)       (53)      (202)      (181)

Total segment profit                    1,928      2,090      5,707      6,230

Interest and other financial charges     (96)       (99)      (266)      (277)

Stock compensation expense (1)           (37)       (41)      (112)      (131)

Pension ongoing income (2)                150        247        449        745

Other postretirement income (2)            12         12         35         24

Repositioning and other charges (3,4)    (96)      (299)      (306)      (756)

Other (5)                                 106       (52)        284       (68)

Income before taxes                   $ 1,967$  1,858$  5,791$  5,767

(1) Amounts included in Selling, general and administrative expenses.

(2) Amounts included in Cost of products and services sold and Selling, general
    and administrative expenses (service costs) and Other income/expense
    (non-service cost components).

(3) Amounts included in Cost of products and services sold, Selling, general
    and administrative expenses, and Other income/expense.

(4) Includes repositioning, asbestos, and environmental expenses.

(5) Amounts include the other components of Other income/expense not included
    within other categories in this reconciliation. Equity income (loss) of
    affiliated companies is included in segment profit.



   


                        Honeywell International Inc.

                   Consolidated Balance Sheet (Unaudited)

                           (Dollars in millions)

                                                 September 30,  December 31,
                                                     2019           2018

ASSETS

Current assets:

Cash and cash equivalents                        $ 10,908$  9,287

Short-term investments                              1,456          1,623

Accounts receivable - net                           7,583          7,508

Inventories                                         4,601          4,326

Other current assets                                1,640          1,618

Total current assets                               26,188         24,362

Investments and long-term receivables                 631            742

Property, plant and equipment - net                 5,240          5,296

Goodwill                                           15,426         15,546

Other intangible assets - net                       3,787          4,139

Insurance recoveries for asbestos related             412            437
liabilities

Deferred income taxes                                 241            382

Other assets                                        8,179          6,869

Total assets                                     $ 60,104$ 57,773

LIABILITIES

Current liabilities:

Accounts payable                                 $  5,522$  5,607

Commercial paper and other short-term borrowings    3,422          3,586

Current maturities of long-term debt                4,088          2,872

Accrued liabilities                                 6,883          6,859

Total current liabilities                          19,915         18,924

Long-term debt                                     11,101          9,756

Deferred income taxes                               1,366          1,713

Postretirement benefit obligations other than         329            344
pensions

Asbestos related liabilities                        2,195          2,269

Other liabilities                                   6,885          6,402

Redeemable noncontrolling interest                      7              7

Shareowners' equity                                18,306         18,358

Total liabilities, redeemable noncontrolling     $ 60,104$ 57,773
interest and shareowners' equity



   


                          Honeywell International Inc.

                Consolidated Statement of Cash Flows (Unaudited)

                             (Dollars in millions)

                                        Three Months Ended    Nine Months Ended
                                           September 30,        September 30,

                                          2019       2018      2019       2018

Cash flows from operating activities:

Net income                              $  1,648$ 2,356$  4,640$ 5,088

Less: Net income attributable to the          24        18         59        44
noncontrolling interest

Net income attributable to Honeywell       1,624     2,338      4,581     5,044

Adjustments to reconcile net income
attributable to Honeywell to net cash
provided by operating activities:

Depreciation                                 165       186        500       558

Amortization                                  98       100        319       304

Repositioning and other charges               96       299        306       756

Net payments for repositioning and          (72)     (191)      (157)     (519)
other charges

Pension and other postretirement income    (162)     (259)      (484)     (769)

Pension and other postretirement             (5)      (23)       (50)      (67)
benefit payments

Stock compensation expense                    37        41        112       131

Deferred income taxes                      (342)     (596)      (298)     (482)

Other                                         93     (241)         98     (163)

Changes in assets and liabilities, net
of the effects of acquisitions and
divestitures:

Accounts receivable                        (176)        34       (78)       131

Inventories                                  (3)     (270)      (276)     (459)

Other current assets                         171       182       (68)       356

Accounts payable                            (81)       242       (89)       466

Accrued liabilities                           28        36      (133)     (412)

Net cash provided by (used for)            1,471     1,878      4,283     4,875
operating activities

Cash flows from investing activities:

Expenditures for property, plant and       (192)     (183)      (504)     (522)
equipment

Proceeds from disposals of property,          31         1         41         4
plant and equipment

Increase in investments                    (944)   (1,095)    (3,218)   (2,882)

Decrease in investments                    1,155     1,126      3,318     4,634

Cash paid for acquisitions, net of cash      (4)      (51)        (4)      (51)
acquired

Other                                        175        30        245       250

Net cash provided by (used for)              221     (172)      (122)     1,433
investing activities

Cash flows from financing activities:

Proceeds from issuance of commercial       3,178     6,551     10,292    19,300
paper and other short-term borrowings

Payments of commercial paper and other   (3,178)   (7,001)   (10,293)   (19,153)
short-term borrowings

Proceeds from issuance of common stock        47       115        425       242

Proceeds from issuance of long-term        2,696        21      2,725        26
debt

Payments of long-term debt                  (36)      (26)      (120)   (1,303)

Repurchases of common stock              (1,000)     (604)    (3,650)   (2,308)

Cash dividends paid                        (595)     (553)    (1,798)   (1,669)

Pre-separation funding                         —     1,604          —     1,604

Other                                       (40)      (23)       (72)     (141)

Net cash provided by (used for)            1,072        84    (2,491)   (3,402)
financing activities

Effect of foreign exchange rate changes     (81)      (69)       (49)     (162)
on cash and cash equivalents

Net increase (decrease) in cash and        2,683     1,721      1,621     2,744
cash equivalents

Cash and cash equivalents at beginning     8,225     8,082      9,287     7,059
of period

Cash and cash equivalents at end of     $ 10,908$ 9,803$ 10,908$ 9,803
period



   

      Honeywell International Inc.

     Reconciliation of Organic Sales % Change (Unaudited)

                                                 Three Months
                                                Ended September
                                                   30, 2019

Honeywell

Reported sales % change                              (16)%

Less: Foreign currency translation                   (1)%

Less: Acquisitions, divestitures and other, net      (18)%

Organic sales % change                                3%

Aerospace

Reported sales % change                              (12)%

Less: Foreign currency translation                    —%

Less: Acquisitions, divestitures and other, net      (22)%

Organic sales % change                                10%

Honeywell Building Technologies

Reported sales % change                              (44)%

Less: Foreign currency translation                   (1)%

Less: Acquisitions, divestitures and other, net      (46)%

Organic sales % change                                3%

Performance Materials and Technologies

Reported sales % change                               1%

Less: Foreign currency translation                   (2)%

Less: Acquisitions, divestitures and other, net       —%

Organic sales % change                                3%

Safety and Productivity Solutions

Reported sales % change                              (7)%

Less: Foreign currency translation                   (1)%

Less: Acquisitions, divestitures and other, net       2%

Organic sales % change                               (8)%

We define organic sales percent as the year-over-year change in
reported sales relative to the comparable period, excluding the
impact on sales from foreign currency translation and
acquisitions, net of divestitures. We believe this measure is
useful to investors and management in understanding our ongoing
operations and in analysis of ongoing operating trends.

A quantitative reconciliation of reported sales percent change
to organic sales percent change has not been provided for
forward-looking measures of organic sales percent change
because management cannot reliably predict or estimate, without
unreasonable effort, the fluctuations in global currency
markets that impact foreign currency translation, nor is it
reasonable for management to predict the timing, occurrence and
impact of acquisition and divestiture transactions, all of
which could significantly impact our reported sales percent
change.



   


                      Honeywell International Inc.

Reconciliation of Segment Profit to Operating Income and Calculation of
        Segment Profit and Operating Income Margins (Unaudited)

                         (Dollars in millions)

                                                    Three Months Ended
                                                       September 30,

                                                     2019        2018

Segment profit                                     $ 1,928$  2,090

Stock compensation expense (1)                        (37)        (41)

Repositioning, Other (2,3)                           (109)       (313)

Pension and other postretirement service costs (4)    (30)        (54)

Operating income                                   $ 1,752$  1,682

Segment profit                                     $ 1,928$  2,090

÷ Net sales                                        $ 9,086$ 10,762

Segment profit margin %                               21.2 %      19.4 %

Operating income                                   $ 1,752$  1,682

÷ Net sales                                        $ 9,086$ 10,762

Operating income margin %                             19.3 %      15.6 %

                                               (1) Included in Selling,
                                                   general and
                                                   administrative
                                                   expenses.

                                               (2) Includes
                                                   repositioning,
                                                   asbestos,
                                                   environmental
                                                   expenses and equity
                                                   income adjustment.

                                               (3) Included in Cost of
                                                   products and services
                                                   sold, Selling,
                                                   general and
                                                   administrative
                                                   expenses and Other
                                                   income/expense.

                                               (4) Included in Cost of
                                                   products and services
                                                   sold and Selling,
                                                   general and
                                                   administrative
                                                   expenses.

We define segment profit as operating income, excluding stock
compensation expense, pension and other postretirement service costs,
and repositioning and other charges. We believe these measures are
useful to investors and management in understanding our ongoing
operations and in analysis of ongoing operating trends.



   


                          Honeywell International Inc.

Reconciliation of Earnings per Share to Adjusted Earnings per Share and Adjusted
            Earnings per Share Excluding Spin-off Impact (Unaudited)

                                 Three Months Ended September 30,  Twelve Months
                                                                       Ended
                                                                   December 31,

                                  2019             2018                2018

Earnings per share of common     $ 2.23$ 3.11$ 8.98
stock - assuming dilution (1)

Pension mark-to-market expense        —        —                     0.04
(2)

Separation costs (3)                  —     0.31                     0.97

Impacts from U.S. Tax Reform     (0.15)   (1.39)                   (1.98)

Adjusted earnings per share of   $ 2.08$ 2.03$ 8.01
common stock - assuming dilution

Less: EPS, attributable to                  0.13                     0.62
spin-offs

Adjusted earnings per share of            $ 1.90$ 7.39
common stock - assuming
dilution, excluding spin-off
impact

(1) For the three months ended September 30, 2019 and 2018, adjusted earnings
    per share utilizes weighted average shares of approximately 726.7 million
    and 752.0 million. For the twelve months ended December 31, 2018, adjusted
    earnings per share utilizes weighted average shares of approximately 753.0
    million.

(2) Pension mark-to-market expense uses a blended tax rate of 24% for 2018.

(3) For the three months ended September 30, 2018, separation costs of $248
    million ($233 million net of tax) includes $132 million of tax costs we
    incurred in the restructuring of the ownership of various legal entities in
    anticipation of the spin-off transactions ("frictional tax costs") and $116
    million ($101 million net of tax) of other separation costs. For the twelve
    months ended December 31, 2018, separation costs of $732 million including
    net tax impacts.

We believe adjusted earnings per share, excluding spin-off impact, is a measure
that is useful to investors and management in understanding our ongoing
operations and in analysis of ongoing operating trends. For forward looking
information, management cannot reliably predict or estimate, without
unreasonable effort, the pension mark-to-market expense as it is dependent on
macroeconomic factors, such as interest rates and the return generated on
invested pension plan assets. We therefore do not include an estimate for the
pension mark-to-market expense. Based on economic and industry conditions,
future developments and other relevant factors, these assumptions are subject to
change.



   


                    Honeywell International Inc.

Reconciliation of Cash Provided by Operating Activities to Adjusted
Free Cash Flow and Calculation of Adjusted Free Cash Flow Conversion
                            (Unaudited)

                       (Dollars in millions)

                                                  Three      Three
                                                 Months     Months
                                                  Ended      Ended
                                                September  September
                                                   30,        30,
                                                  2019       2018

Cash provided by operating activities           $ 1,471$ 1,878

Expenditures for property, plant and equipment    (192)      (183)

Free cash flow                                    1,279      1,695

Separation cost payments                              7        114

Adjusted free cash flow                         $ 1,286$ 1,809

Net income attributable to Honeywell            $ 1,624$ 2,338

Separation costs, includes net tax impacts            —        233

Impacts from U.S. Tax Reform                      (114)    (1,047)

Adjusted net income attributable to Honeywell   $ 1,510$ 1,524

Cash provided by operating activities           $ 1,471$ 1,878

÷ Net income (loss) attributable to Honeywell   $ 1,624$ 2,338

Operating cash flow conversion                       91 %       80 %

Adjusted free cash flow                         $ 1,286$ 1,809

÷ Adjusted net income attributable to Honeywell $ 1,510$ 1,524

Adjusted free cash flow conversion %                 85 %      119 %

We define free cash flow as cash provided by operating activities
less cash expenditures for property, plant and equipment.

We believe that this metric is useful to investors and management as
a measure of cash generated by business operations that will be used
to repay scheduled debt maturities and can be used to invest in
future growth through new business development activities or
acquisitions, pay dividends, repurchase stock or repay debt
obligations prior to their maturities. This metric can also be used
to evaluate our ability to generate cash flow from business
operations and the impact that this cash flow has on our liquidity.



   

      Honeywell International Inc.

  Reconciliation of Segment Profit to Operating Income and
 Calculation of Segment Profit and Operating Income Margins
                         (Unaudited)

                    (Dollars in millions)

                                                     Twelve
                                                     Months
                                                     Ended
                                                    December
                                                      31,
                                                      2018

Segment profit                                     $  8,190

Stock compensation expense (1)                        (175)

Repositioning, Other (2,3)                          (1,100)

Pension and other postretirement service costs (4)    (210)

Operating income                                   $  6,705

Segment profit                                     $  8,190

÷ Net sales                                        $ 41,802

Segment profit margin %                                19.6 %

Operating income                                   $  6,705

÷ Net sales                                        $ 41,802

Operating income margin %                              16.0 %

                                               (1) Included
                                                   in
                                                   Selling,
                                                   general
                                                   and
                                                   administrat
                                                   ive
                                                   expenses.

                                               (2) Includes
                                                   repositioni
                                                   ng,
                                                   asbestos,
                                                   environment
                                                   al
                                                   expenses
                                                   and equity
                                                   income
                                                   adjustment.

                                               (3) Included
                                                   in Cost of
                                                   products
                                                   and
                                                   services
                                                   sold,
                                                   Selling,
                                                   general
                                                   and
                                                   administrat
                                                   ive
                                                   expenses
                                                   and Other
                                                   income/expe
                                                   nse.

                                               (4) Included
                                                   in Cost of
                                                   products
                                                   and
                                                   services
                                                   sold and
                                                   Selling,
                                                   general
                                                   and
                                                   administrat
                                                   ive
                                                   expenses.

We define segment profit as operating income, excluding stock
compensation expense, pension and other postretirement
service costs, and repositioning and other charges. We
believe these measures are useful to investors and management
in understanding our ongoing operations and in analysis of
ongoing operating trends.

A quantitative reconciliation of segment profit margin, on an
overall Honeywell basis, to operating income margin has not
been provided for all forward-looking measures of segment
profit margin included herewithin, however, operating income
margin is expected to be up 230 to 240 bps in 2019 full year,
with the differences between segment profit margin and
operating income margin driven by expected full year stock
compensation expense, repositioning and other, and pension
and other postretirement service costs. For forward looking
information, a reconciliation of segment profit margin to
operating income margin is not provided as management cannot
reliably predict or estimate, without unreasonable effort,
the apportionment of the amount attributable to the
reconciling items between segment profit margin and operating
income margin due to the uncertainty of each respective item.



   

      Honeywell International Inc.

Calculation of Segment Profit Excluding Spin-off Impact and
          Segment Margin Excluding Spin-off Impact

                   (Dollars in millions)

                                                    Twelve
                                                    Months
                                                    Ended
                                                   December
                                                     31,
                                                     2018

Segment profit                                    $  8,190

Spin-off impact (1)                                (1,011)

Segment profit excluding spin-off impact          $  7,179

Sales                                             $ 41,802

Spin-off impact (1)                                (6,551)

Sale excluding spin-off impact                    $ 35,251

Segment profit margin % excluding spin-off impact     20.4 %

                                              (1) Amount
                                                  computed
                                                  as the
                                                  portion of
                                                  Aerospace
                                                  and
                                                  Honeywell
                                                  Building
                                                  Technologie
                                                  s segment
                                                  profit and
                                                  sales in
                                                  the
                                                  applicable
                                                  prior year
                                                  period for
                                                  Transportat
                                                  ion
                                                  Systems
                                                  and Homes
                                                  and Global
                                                  Distributio
                                                  n spin-off
                                                  businesses.



   

      Honeywell International Inc.

 Reconciliation of Cash Provided by Operating Activities to
            Adjusted Free Cash Flow (Unaudited)

                                               Twelve Months
                                                   Ended
                                               December 31,
                                               2019(E) ($B)

Cash provided by operating activities           ~$6.2 - $6.5

Expenditures for property, plant and equipment        ~(0.8)

Free cash flow                                    ~5.4 - 5.7

Separation cost payments                                ~0.3

Adjusted free cash flow                         ~$5.7 - $6.0

We define free cash flow as cash provided by operating
activities less cash expenditures for property, plant and
equipment.

We believe that this metric is useful to investors and
management as a measure of cash generated by business
operations that will be used to repay scheduled debt
maturities and can be used to invest in future growth
through new business development activities or acquisitions,
pay dividends, repurchase stock or repay debt obligations
prior to their maturities. This metric can also be used to
evaluate our ability to generate cash flow from business
operations and the impact that this cash flow has on our
liquidity. For forward looking information, we do not
provide cash flow conversion guidance on a GAAP basis as
management cannot reliably predict or estimate, without
unreasonable effort, the pension mark-to-market expense as
it is dependent on macroeconomic factors, such as interest
rates and the return generated on invested pension plan
assets.



   


Contacts:

Media                     Investor Relations

Nina KraussMark Bendza

(704) 627-6035            (704) 627-6200

nina.krauss@honeywell.commark.bendza@honeywell.com