Honeywell International : Q3 2020 Honeywell Earnings Conference Call Presentation

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3Q19

3Q20

3Q19

3Q20

3Q19

3Q20

3Q19

3Q20

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Sustainable Technology Solutions

• New business in PMT created to develop and commercialize new technologies that meet the growing demand for sustainable solutions
• Examples include plastics recycling, energy storage, and renewable fuels
• Will contribute to the expansion of our technology portfolio and accelerate long-term growth

Our "10-10-10" ESG Goals by 2024

• Reduce Scope 1 and Scope 2 GHG emissions intensity by an additional 10% from 2018 levels
• Deploy at least 10 renewable energy projects
• Achieve certification to ISO's 50001 Energy
  Management Standard at 10 sites

Sustainable Solutions

~50% of our NPI R&D activity is directed towards products that improve

environmental and social outcomes for our customers

Our Progress

reduction in Scope	energy efficiency	greenhouse gas	million gallons of	acres
1 and Scope 2	improvement	and energy	water saved in	remediated
greenhouse gas	since	efficiency	water-stressed	and restored
intensity since	2004 to 137	projects	regions since	as
2004, achieving 56	MWh/$M (or 0.47	completed since	2013 from over	valuable
MT CO2e/$M at	BBTU/$M) at the	2010, saving an	150 projects	community
the end of 2019	end of 2019	annualized $90M		assets

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3Q19 Adjusted	Segment Profit	Below the Line	Adjusted Effective	Share Count	3Q20 Adjusted	Adjustment for	3Q20
		and Other	Tax Rate			Non-Cash Charge

Aero

HBT

PMT

SPS

Aero

HBT

PMT

SPS

		2Q20		3Q20		2Q20		3Q20

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($M)	2Q19			3Q19			2Q20			3Q20
Aerospace	$3,508	$3,544	$2,543	$2,662
Honeywell Building Technologies	1,450	1,415	1,177	1,305
Performance Materials and Technologies	2,735	2,670	2,218	2,252
Safety and Productivity Solutions	1,550		1,457		1,539		1,578
Net sales	$9,243	$9,086	$7,477	$7,797
Aerospace	$907	$908	$528	$617
Honeywell Building Technologies	300	297	250	282
Performance Materials and Technologies	644	582	419	442
Safety and Productivity Solutions	191	195	213	219
Corporate	(72)		(54)		(25)		(7)
Segment profit	$1,970	$1,928	$1,385	$1,553
Stock compensation expense (1)	(34)	(37)	(34)	(40)
Repositioning, Other (2,3)	(137)	(109)	(295)	(161)
Pension and other postretirement service costs (4)	(37)		(30)		(38)		(41)
Operating income	$1,762		$1,752		$1,018		$1,311
Segment profit	$1,970	$1,928	$1,385	$1,553
÷ Net sales	$9,243		$9,086		$7,477		$7,797
Segment profit margin %	21.3%		21.2%		18.5%		19.9%
Operating income	$1,762	$1,752	$1,018	$1,311
÷ Net sales	$9,243		$9,086		$7,477		$7,797
Operating income margin %	19.1%		19.3%		13.6%		16.8%

1. Amounts 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. Amounts 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	2Q20		3Q20
Reported sales % change	(19%)	(14%)
Less: Foreign currency translation	(1%)	-
Less: Acquisitions, divestitures and other, net	-		-
Organic sales % change	(18%)	(14%)
Aerospace
Reported sales % change	(28%)	(25%)
Less: Foreign currency translation	-	-
Less: Acquisitions, divestitures and other, net	(1%)		-
Organic sales % change	(27%)	(25%)
Honeywell Building Technologies
Reported sales % change	(19%)	(8%)
Less: Foreign currency translation	(2%)	-
Less: Acquisitions, divestitures and other, net	-		-
Organic sales % change	(17%)	(8%)
Performance Materials and Technologies
Reported sales % change	(19%)	(16%)
Less: Foreign currency translation	(2%)	-
Less: Acquisitions, divestitures and other, net	-		-
Organic sales % change	(17%)	(16%)
Safety and Productivity Solutions
Reported sales % change	(1%)	8%
Less: Foreign currency translation	(2%)	-
Less: Acquisitions, divestitures and other, net	-		-
Organic sales % change	1%		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, acquisitions, net of divestitures and non-comparable impacts from adoption of the new revenue recognition standard. 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.

($M)		3Q20
Cash provided by operating activities	$1,007
Expenditures for property, plant and equipment	(249)
Free cash flow		$758
Net income (loss) attributable to Honeywell	$758
Reimbursement receivable charge	(1)	350
Adjusted net income attributable to Honeywell	$1,108
Cash provided by operating activities	$1,007
÷ Net income (loss) attributable to Honeywell	$758
Operating cash flow conversion		133%
Free cash flow		$758
÷ Adjusted Net income attributable to Honeywell	$1,108
Adjusted Free cash flow conversion %	68%

1. A non-cash $350M pre-tax and after-tax charge associated with the reduction in carrying value to present value of reimbursement receivables due from Garrett in relation to Garrett's September 20,
   2020 Chapter 11 bankruptcy filing.

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.

($M)	3Q19	2Q20	3Q20
Cash provided by operating activities	$1,471	$1,480	$1,007
Expenditures for property, plant and equipment	(192)	(227)	(249)
Free cash flow	$1,279	$1,253	$758
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.

				3Q19	4Q19	2019	2Q20	3Q20
Earnings per share of common stock - assuming dilution (EPS)	(1)	$2.23	$2.16	$8.41	$1.53	$1.07
Pension mark-to-market expense	(2)		-	$0.13	$0.13	-	-
Separation-related tax adjustment	(3)		-	-	-	(0.27)	-
Impacts from U.S. Tax Reform				(0.15)	(0.23)	(0.38)	-	-
Reimbursement receivable charge	(4)		-	-	-	-	0.49
Adjusted earnings per share of common stock - assuming dilution	$2.08	$2.06	$8.16	$1.26	$1.56

1. For the three months ended September 30, 2020 and 2019, adjusted earnings per share utilizes weighted average shares of approximately 709.6 million and 726.7 million. For the three months ended June 30, 2020, adjusted earnings per share utilizes weighted average shares of approximately 708.1 million. For the three and twelve months ended December 31, 2019 adjusted earnings per share utilizes weighted average shares of approximately 722.6 million and 730.3.
2. Pension mark-to-market expense uses a blended tax rate of 24% for 2019.
3. For the three months ended June 30, 2020, separation-related tax adjustment of $186 million ($186 million net of tax) includes the favorable resolution of a foreign tax matter related to the spin-off transactions.
4. The impact due to a non-cash $350M pre-tax and after-tax charge associated with the reduction in carrying value to present value of reimbursement receivables due from Garrett in relation to Garrett's September 20, 2020 Chapter 11 bankruptcy filing.

($M)	4Q19		2019
Segment profit	$2,032	$7,739
Stock compensation expense (1)	(41)	(153)
Repositioning, Other (2,3)	(259)	(598)
Pension and other postretirement service costs (4)	(37)		(137)
Operating income	$1,695		$6,851
Segment profit	$2,032	$7,739
÷ Net sales	$9,496		$36,709
Segment profit margin %	21.4%		21.1%
Operating income	$1,695	$6,851
÷ Net sales	$9,496		$36,709
Operating income margin %	17.8%		18.7%

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.

A quantitative reconciliation of segment profit, on an overall Honeywell basis, to operating income has not been provided for all forward-looking measures of segment profit and segment margin included herewithin. Management cannot reliably predict or estimate, without unreasonable effort, the impact and timing on future operating results arising from items excluded from segment profit, particularly 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. The information that is unavailable to provide a quantitative reconciliation could have a significant impact on our reported financial results. To the extent quantitative information becomes available without unreasonable effort in the future, and closer to the period to which the forward-looking measures pertain, a reconciliation of segment profit to operating income will be included within future filings.

Earnings per share of common stock - assuming dilution (EPS)	(1)
Pension mark-to-market expense
Separation-related tax adjustment	(2)
Reimbursement receivable charge	(3)
Adjusted earnings per share of common stock - assuming dilution

4Q20 (E)	2020 (E)
$1.97	- $2.02	$6.78	- $6.83
	-		-
	-	(0.27)
	-	0.49
$1.97	- $2.02	$7.00	- $7.05

1. For the three and twelve months ended December 31, 2020, expected adjusted earnings per share utilizes weighted average shares of approximately 710 million and 711 million.
2. For the twelve months ended December 31, 2020, separation-related tax adjustment of $186 million ($186 million net of tax) includes the favorable resolution of a foreign tax matter related to the spin-off transactions.
3. The impact due to a non-cash $350M pre-tax and after-tax charge associated with the reduction in carrying value to present value of reimbursement receivables due from Garrett in relation to Garrett's September 20, 2020 Chapter 11 bankruptcy filing.

We believe adjusted earnings per share, 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.