AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 19/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Installed systems, lifecycle integration and licensed process technology establish plausible mechanisms, but do not establish economic barriers or durable superiority for current HON.
durability · — · Long-term relationships and a substantial installed footprint support continuity, but replacement barriers, technology exclusivity and the duration of excess returns remain unestablished.
customer dependency · — · Firm automation backlog and integrated services show committed demand; they do not demonstrate that customers depend on Honeywell rather than available alternatives.
erosion resilience · — · Building Automation growth is favorable, but the evidence does not establish resilience of a demonstrated moat. Competition and commoditization disclosures describe potential erosion, not proven losses of competitive position.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Price increases contributed to 2025 and 2026 sales; the Q1 bridge reports four percentage points from price alongside a two-point volume decline. This demonstrates realized historical-group pricing, tempered by considerable price competition and missing standalone automation attribution.
retention · 2/4 · Long-term customer relationships, firm automation backlog and sustained Building Automation organic growth provide indirect evidence of continuing demand. They do not distinguish retained customers from new business or establish renewal rates.
margin resilience · 2/4 · Building Automation reports seven quarters of margin expansion. Recast automation continuing operations show higher 2025 segment profit but lower operating income with substantial impairments and other charges. Historical-group first-half 2026 gross margin also contracted. Portfolio resilience is mixed and cannot be attributed solely to pricing.
contractual freedom · 2/4 · Negotiated prices and inflation or index-based adjustment clauses provide some repricing capacity. Competitive awards and considerable price competition constrain terms; unilateral repricing freedom across current automation businesses is not established.
Predictability94
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 2.94
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.20
Financial strength40
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 23.18
- netDebtEbitGrade
- 45.63
- interestCoverageGrade
- 45.88
- currentRatioGrade
- 43.83
- Debt / FCF (x)
- 6.38
- Net debt / operating income (x)
- 2.72
- Interest coverage (x)
- 6.05
- Current ratio (x)
- 1.30
Capital allocation97
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 24.47
- 3-year average dilution (%)
- -3.79
- 3-year average SBC / revenue (%)
- 0.53
- cashConversionGrade
- 91.08
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual acquisition spending, capital expenditure, disposal proceeds and distributions demonstrate active allocation. Reported three-year adjusted ROIC is favorable, but financing requirements, disposal write-downs and lower first-half operating cash generation make outcomes mixed. Historical cash flows include Aerospace; acquisition-specific returns are unavailable.
incentive alignment · 2/4 · Disclosed executive ownership requirements, post-vesting holding periods and an adopted clawback support alignment. The approved 2026 replacement of PSUs with options and RSUs reduces explicit multiyear financial-performance conditions. These disclosures establish policy and design, not individual ownership compliance or actual 2026 vesting.
execution · 2/4 · The completed Aerospace separation and reconciled Building Automation organic growth demonstrate delivery. Industrial Automation missed disclosed 2025 income and cash-flow targets, and disposal-group write-downs continued in 2026. Operating execution is partly assessed from indirect segment evidence; issuer praise is not treated as independent proof.
governance · 2/4 · An independent Audit Committee, independent Lead Director and adopted clawback provide documented safeguards. Combined chairman and CEO roles and the unresolved formal SEC financial-reporting investigation temper the assessment. The investigation is not a finding of misconduct.
Evidence
>10M
Global Installed Base in Buildings
~20K
Process Plants with HON Technology
In 2024, we progressed further in each of our GDMs, deploying best practices in a consistent manner across the portfolio while enabling scaled capabilities across business models, and our operating system proved to be a powerful integration tool throughout the significant M&A actions that we took during the year.
Automation business overview / installed building and process-plant footprint · Filed 10/04/2026
Building Automation offerings include fire detection, building controls and optimization software, energy management systems, access control, and video management software, complemented by installation, maintenance, and upgrades.
Revenue recognition / Building Automation offerings and lifecycle services · Filed 23/07/2026
Honeywell Forge integrates hardware, software and services—enhanced by AI-enabled solutions—to support revenue generation and performance over the lifecycle of a building.
Building Automation business description / Forge lifecycle integration · Filed 23/04/2026
We maintain long-term contractual relationships with many of our customers, suppliers, and other counterparties.
Risk factors / existing long-term contractual relationships · Filed 23/07/2026
About Honeywell Technologies
Twelve Months Ended December 31,
2025
2023
Building Automation
Reported sales percent change
13%
1%
Less: Impact of divestitures to the prior period
—%
—%
Reported sales percent change, adjusted for impact of divestitures
13%
1%
Less: Foreign currency translation
—%
(1)%
Less: Acquisitions
5%
—%
Less: Other
—%
—%
Organic sales percent change
8%
2%
We define organic sales percentage as the year-over-year change in reported sales relative to the comparable period, adjusted for the impact of divestitures to the prior period, and excluding the impact on sales from foreign currency translation, acquisitions for the first 12 months following the transaction date, and certain other items that are unusual or non-recurring in nature.
Non-GAAP reconciliation / Building Automation organic growth in 2023 and 2025 · Filed 19/08/2026
Some of our key competitors include but are not limited to:
AEROSPACE TECHNOLOGIES
BUILDING AUTOMATION
•Garmin
•L3 Harris
•Rolls Royce
•RTX Corporation
•Safran
•Thales
•Johnson Controls
•Schneider Electric
•Siemens
ENERGY AND SUSTAINABILITY SOLUTIONS
•Clariant
•Flowserve
•Topsoe
•Dematic
•Emerson Electric
•Itron
•MSA Safety Incorporated
•Rockwell Automation
•TE Connectivity
•Zebra Technologies
Our businesses compete on a variety of factors such as performance, applied technology, product innovation, product recognition, quality, reliability, customer service, delivery, and price.
Business / named competitors and competitive factors · Filed 17/02/2026
Our products face considerable price competition.
Competition / considerable price competition · Filed 17/02/2026
In certain of our businesses, our contracts are typically awarded on a competitive basis.
Risk factors / competitive contract awards · Filed 23/07/2026
•Building Automation—Operating results may be adversely impacted by downturns in the level of global buildings and infrastructure construction activity (including retrofits and upgrades), lower capital spending and operating expenditures on projects, changes in the competitive landscape, including new market entrants and new technologies, and fluctuations in inventory levels in distribution channels.
Risk factors / Building Automation cyclicality and potential competitive changes · Filed 23/07/2026
The UOP business delivers licensed process technology, equipment, engineering, catalysts, adsorbents, and services through end-to-end solutions to its customers enabled by the convergence of its domain expertise and vast installed base, combined with the Honeywell Forge platform.
Business / UOP licensed technology, equipment, catalysts and services · Filed 17/02/2026
•Process Automation and Technology—Operating results may be adversely impacted by reduced investments in process automation and downturns in capacity utilization for chemical, industrial, refining and petrochemical plants, our customers’ availability of capital for refinery construction and expansion, raw material demand and supply, product commoditization, and our ability to maximize our facilities’ production capacity and minimize downtime.
Risk factors / Process Automation and Technology demand and commoditization risks · Filed 23/07/2026
Failure of foreign jurisdictions to protect our intellectual property rights, an inability to effectively enforce such rights in foreign jurisdictions, or the imposition of foreign jurisdiction investment or sourcing restrictions or requirements could result in loss of valuable proprietary information and could impact our competitive position and financial results.
Risk factors / potential intellectual-property protection failures · Filed 23/07/2026
Q1 2025
Volume
(2 %)
Price
4 %
Foreign currency translation
2 %
Acquisitions
1 %
Divestitures
(3 %)
Other
— %
Total % change in Net sales
2 %
A discussion of Net sales by reportable business segment can be found in the Review of Business Segments section of this Management's Discussion and Analysis.
MD&A / Q1 2026 consolidated price and volume sales bridge · Filed 23/04/2026
•Increased pricing and price adjustments to offset inflation,
MD&A / realized pricing contribution to consolidated sales · Filed 23/07/2026
Contract revenues are largely determined by negotiated contract prices and quantities, modified by our assumptions regarding contract options, change orders, incentive and award provisions associated with technical performance and price adjustment clauses (such as inflation or index-based clauses).
Critical accounting estimates / negotiated contract prices and price-adjustment clauses · Filed 17/02/2026
With a sharper focus on higher-growth verticals, empowering local teams through a regional structure and bringing innovative new products to customers ─ including Honeywell Technologies Forge Connected Buildings ─ Hammoud led Building Automation to seven consecutive quarters of high-single-digit organic growth and margin expansion.
Management biography / reported seven-quarter Building Automation growth and margin expansion · Filed 19/08/2026
Years Ended December 31,
2025
2024
Continuing Operations
Discontinued Operations1
Continuing Operations
Discontinued Operations1
Operating income
$
1,171
$
5,247
$
2,173
$
5,268
Stock compensation expense2
153
54
153
41
Repositioning, Other3,4
390
304
147
145
Pension and other postretirement service costs4
57
19
46
19
Amortization of acquisition-related intangibles5
509
64
374
41
Acquisition-related costs5,6
2
—
25
—
Indefinite-lived intangible asset impairment5
44
—
48
—
Impairment of goodwill
724
—
—
—
Impairment of assets held for sale
270
—
219
—
Loss on Quantinuum7
187
—
142
—
Segment profit
$
3,507
$
5,688
$
3,327
$
5,514
1
Effective June 29, 2026, Honeywell International Inc.
Recast annual continuing operations / operating income, segment profit and excluded charges · Filed 29/06/2026
Our backlog by reportable business segment is as follows:
March 31, 2026
Aerospace Technologies
$
18,822
Building Automation
9,255
Process Automation and Technology
7,437
Industrial Automation
2,667
Corporate and All Other1
81
Total backlog
$
38,262
1
The backlog within Corporate and All Other relates to the Quantinuum business.
MD&A / identified automation-segment firm backlog at March 31, 2026 · Filed 23/04/2026
Net cash used for investing activities from continuing operations driven by $2,211 million of cash paid for acquisitions, $986 million of capital expenditures, and $399 million of net payments for settlements of derivative contracts, partially offset by $1,157 million proceeds from the sale of the PPE business.
Liquidity / actual acquisition spending, capital expenditure and disposal proceeds · Filed 17/02/2026
Net cash used for financing activities driven by $3,804 million of repurchases of common stock, $2,976 million of cash dividends paid, and $2,909 million of payments of long-term debt, partially offset by $4,035 million of long-term debt proceeds, $1,962 million of pre-separation funding related to the spin-off of the Advanced Materials business, and $1,482 million of net proceeds from commercial paper.
Liquidity / actual shareholder distributions and financing · Filed 17/02/2026
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2026 2025 (Dollars in millions) Cash flows from operating activities Net income $ 6,481 $ 3,036 Less: Net income from discontinued operations — 357 Net income from continuing operations 6,481 2,679 Adjustments to reconcile net income from continuing operations to net cash (used for) provided by operating activities Depreciation 290 269 Amortization 379 404 Gain on deconsolidation of subsidiary (6,629) — Equity loss of affiliated companies 240 (23) (Gain) loss on sale of non-strategic businesses and assets (6) 29 Impairment of assets held for sale 311 15 Loss on debt extinguishment 241 — Repositioning and other charges 159 84 Net payments for repositioning and other charges (145) (195) Pension and other postretirement income (336) (233) Pension and other postretirement benefit payments (11) (12) Stock compensation expense 108 114 Deferred income taxes 962 (31) Other 252 (317) Changes in assets and liabilities, net of the effects of acquisitions and divestitures: Accounts receivable (718) (853) Inventories (234) (438) Other current assets (449) (154) Accounts payable 89 112 Accrued liabilities 70 412 Income taxes (428) (420) Net cash provided by operating activities from continuing operations 626 1,442 Net cash provided by operating activities from discontinued operations — 474 Net cash provided by operating activities 626 1,916 Cash flows from investing activities Capital expenditures (538) (416) Increase in investments (505) (681) Decrease in investments 513 753 Receipts (payments) from settlements of derivative contracts 127 (415) Deconsolidation of subsidiary cash (623) — Cash paid for acquisitions, net of cash acquired (28) (2,163) Proceeds from sale of business, net of cash transferred 6 1,157 Net cash used for investing activities from continuing operations (1,048) (1,765) Net cash used for investing activities from discontinued operations — (115) Net cash used for investing activities (1,048) (1,880) The Notes to Consolidated Financial Statements are an integral part of this statement.
Cash flow statement / first-half operating cash generation and investing expenditure · Filed 23/07/2026
The Company recognized a $311 million increase to the valuation allowance during the six months ended June 30, 2026, to write down the disposal groups to fair value, less costs to sell, as applicable.
Acquisitions and divestitures / first-half disposal-group write-down · Filed 23/07/2026
Honeywell’s three-year average ROIC was 15.6%, which outperformed the Compensation Peer Group median.
Compensation discussion / reported three-year average adjusted ROIC versus compensation peers · Filed 10/04/2026
Ownership thresholds in the Company’s stock ownership guidelines for officers require NEOs to hold shares of common stock equal to five times their current annual base salary (10 times for the CEO), as detailed in the Stock Ownership Guidelines.
Compensation risk oversight / executive ownership requirements · Filed 10/04/2026
In addition, upon vesting, RSUs are settled in shares of Honeywell stock with the NEO required to hold the resulting net shares at least one year before being able to sell them.
Executive compensation / post-vesting holding requirement · Filed 10/04/2026
This Clawback Policy is administered by our MDCC and enables the Company to recover from covered current and former executives certain incentive-based compensation in the event of an accounting restatement resulting from material noncompliance with any financial reporting requirements under the federal securities laws.
Recoupment / adopted clawback policy and coverage · Filed 10/04/2026
However, with the expected spin-off of Honeywell Aerospace in the third quarter of 2026 and other ongoing portfolio optimization projects (as described above), taking into consideration that these transactions will significantly transform our business portfolio, the MDCC approved a simplified and streamlined ICP and LTI structure for 2026.
Compensation design / approved simplified 2026 incentive structure · Filed 10/04/2026
Long Term Incentives (LTI)
After thorough analysis of various options, the MDCC determined that for 2026, rather than PSUs, an equal mix of Stock Options and Restricted Stock Units provides the best balance between executive retention and alignment with shareowner interests, in light of the expected Aerospace spin-off.
Compensation design / 2026 replacement of PSUs with options and RSUs · Filed 10/04/2026
Mr. Masso's formulaic payout portion of ICP (80% of ICP) was based on actual 2025 performance against the 2025 ICP goals for both Total Honeywell and the IA business unit (each weighted equally), as follows:
ICP Goal
2025 ICP Goal
(Target)
2025 Actual Plan Performance(1)
Achievement
Metric
Percentage(2)
Weighting
Calculated
Percentage
Total Honeywell ICP
106.9
53.4
IA ICP Sales
$9.013 billion
$8.936 billion
99.1
97.9
19.6
IA ICP Income Contribution
$1.529 billion
$1.294 billion
84.6
61.5
9.2
IA ICP Free Cash Flow
$1.651 billion
$1.477 billion
89.4
73.6
11.0
Total Calculated (Formulaic) Payout: IA (Mr.
Compensation discussion / Industrial Automation actual results against 2025 targets · Filed 10/04/2026
CHARLOTTE, N.C., June 29, 2026 – Honeywell Technologies (NASDAQ: HON) today announced it has completed the previously announced spin-off of its Aerospace Technologies business, which now operates as Honeywell Aerospace.
June 29, 2026 announcement / completed Aerospace spin-off · Filed 29/06/2026
CAP vs SEGMENT MARGIN 2026 NOTICE AND PROXY STATEMENT | 107 PROPOSAL 3: APPROVAL OF INDEPENDENT ACCOUNTANTS The Audit Committee, which consists entirely of independent directors, is directly responsible for the appointment, compensation, retention, and oversight of the Company’s independent registered public accounting firm.
Governance / independent Audit Committee responsibilities · Filed 10/04/2026
Independent Lead Director with expanded responsibilities elected by independent directors.
Governance / independent Lead Director · Filed 10/04/2026
BOARD LEADERSHIP STRUCTURE
CHAIRMAN OF THE BOARD
Vimal Kapur has served as Chairman of the Board since June 2024.
Board leadership / CEO serving as chairman · Filed 10/04/2026
SEC MATTER
The Company is cooperating with a formal investigation by the SEC which is focused on certain financial reporting matters, including with respect to the Company's former Performance Materials and Technologies segment.
Commitments and contingencies / formal SEC financial-reporting investigation · Filed 17/02/2026
For purposes of this report, which covers the quarterly period prior to the completion of the Aerospace Spin-Off, our financial results include the assets, liabilities, and operating results of Honeywell Aerospace as continuing operations.
Basis of presentation / Aerospace retained in reported quarterly continuing operations · Filed 23/07/2026
YTD 2026 compared with YTD 2025 Gross margin increased by approximately $0.1 billion and gross margin percentage decreased 100 basis points to 38.1% compared to 39.1% for the same period of 2025.
MD&A / first-half 2026 consolidated gross-margin contraction · Filed 23/07/2026
•Increased pricing and price adjustments to offset inflation,
MD&A / 2025 sales contribution from pricing and inflation adjustments · Filed 17/02/2026
