Honeywell International-20170721 - ForM 10-Q Filing For PD Ending 063017

HONEYWELL INTERNATIONAL INC
FORM 10-Q
(Quarterly Report)
Filed 07/21/17 for the Period Ending 06/30/17
Address 115 TABOR ROAD

MORRIS PLAINS, NJ 07950
Telephone 9734552000
CIK 0000773840
Symbol HON
SIC Code 3714 - Motor Vehicle Parts and Accessories
Industry Industrial Conglomerates
Sector Industrials
Fiscal Year 12/31
http://www.edgar-online.com
Copyright 2017, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
UnitedStates
SecuritiesandExchangeCommission
Washington,D.C.20549

Form 10-Q

x
QUARTERLYREPORTPURSUANTTOSECTION13OR15(d)
OFTHESECURITIESEXCHANGEACTOF1934

ForthequarterlyperiodendedJune30,2017

OR

o
TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)
OFTHESECURITIESEXCHANGEACTOF1934

Forthetransitionperiodfrom______to_____

Commissionfilenumber1-8974

Honeywell International Inc.
(Exactnameofregistrantasspecifiedinitscharter)

Delaware 22-2640650
(Stateorotherjurisdictionof (I.R.S.Employer
incorporationororganization) IdentificationNo.)

115TaborRoad

MorrisPlains,NewJersey 07950
(Addressofprincipalexecutiveoffices) (ZipCode)

(973)455-2000
(Registrantstelephonenumber,includingareacode)

NotApplicable
(Formername,formeraddressandformerfiscalyear,
ifchangedsincelastreport)
Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof
1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjectto
suchfilingrequirementsforthepast90days.Yesx
Noo
IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFile
requiredtobesubmittedandpostedpursuanttoRule405ofRegulationS-T(232.405ofthischapter)duringthepreceding12months(orforsuch
shorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).Yesx
Noo
IndicatebycheckmarkwhethertheRegistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,smallerreportingcompany,or
an emerging growth company. See definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth
companyinRule12b-2oftheExchangeAct.(Checkone):
Largeacceleratedfilerx Acceleratedfilero
Non-Acceleratedfilero
(Donotcheckifasmallerreportingcompany) Smallerreportingcompanyo
Emerginggrowthcompanyo
Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithany
neworrevisedfinancialaccountingstandardspursuanttosection13(a)oftheExchangeAct.o
IndicatebycheckmarkwhethertheRegistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct).Yeso
Nox
Therewere760,569,169sharesofCommonStockoutstandingatJune30,2017.

Index

Part I. Financial Information Page No.

Item1. FinancialStatements:

ConsolidatedStatementofOperations(unaudited)ThreeandSixMonthsEndedJune30,2017

and2016 3

ConsolidatedStatementofComprehensiveIncome(unaudited)ThreeandSixMonthsEnded
June30,2017and2016 4

ConsolidatedBalanceSheet(unaudited)June30,2017andDecember31,2016 5

ConsolidatedStatementofCashFlows(unaudited)SixMonthsEndedJune30,2017and2016 6

NotestoConsolidatedFinancialStatements(unaudited) 7

Item2. ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations 22

Item3. QuantitativeandQualitativeDisclosuresAboutMarketRisks 30

Item4. ControlsandProcedures 30

Part II. Other Information

Item1. LegalProceedings 31

Item2. UnregisteredSalesofEquitySecuritiesandUseofProceeds 31

Item5. OtherInformation 31

Item6. Exhibits 32

Signatures 33

CautionaryStatementaboutForward-LookingStatements

Thisreportcontainsforward-lookingstatementswithinthemeaningofSection21EoftheSecuritiesExchangeActof1934.Forward-looking
statements are those that address activities, events or developments that we or our management intends, expects, projects, believes or
anticipateswillormayoccurinthefuture.Theyarebasedonmanagementsassumptionsandassessmentsinthelightofpastexperienceand
trends,currenteconomicandindustryconditions,expectedfuturedevelopmentsandotherrelevantfactors.Theyarenotguaranteesoffuture
performance,andactualresults,developmentsandbusinessdecisionsmaydifferfromthoseenvisagedbyourforward-lookingstatements.Our
forward-lookingstatementsarealsosubjecttorisksanduncertainties,whichcanaffectourperformanceinboththenear-andlong-term.These
forward-looking statements shouldbeconsideredinthelightoftheinformation includedinthisreportandourotherfilingswiththeSecurities
and Exchange Commission, including, without limitation, the Risk Factors, as well as the description of trends and other factors in
ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations,setforthinour2016AnnualReportonForm10-K.
2
PARTI.FINANCIALINFORMATION

ThefinancialstatementsandrelatedfootnotesasofJune30,2017shouldbereadinconjunctionwiththefinancialstatementsfortheyear
endedDecember31,2016containedinour2016AnnualReportonForm10-K.

ITEM1.FINANCIALSTATEMENTS

Consolidated Statement of Operations
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016

(Dollars in millions, except per share amounts)

Productsales $ 8,079 $ 8,035 $ 15,619 $ 15,654
Servicesales 1,999 1,956 3,951 3,859
Netsales 10,078 9,991 19,570 19,513

Costs,expensesandother
Costofproductssold 5,660 5,602 10,897 10,951
Costofservicessold 1,190 1,219 2,309 2,417
6,850 6,821 13,206 13,368
Selling,generalandadministrativeexpenses 1,381 1,329 2,730 2,609
Other(income)expense (10) 1 (22) (17)
Interestandotherfinancialcharges 79 85 154 170
8,300 8,236 16,068 16,130
Incomebeforetaxes 1,778 1,755 3,502 3,383
Taxexpense 378 428 770 830
Netincome 1,400 1,327 2,732 2,553

Less:Netincomeattributabletothenoncontrollinginterest 8 8 14 18

NetincomeattributabletoHoneywell $ 1,392 $ 1,319 $ 2,718 $ 2,535
Earningspershareofcommonstock-basic $ 1.82 $ 1.73 $ 3.56 $ 3.31
Earningspershareofcommonstock-assumingdilution $ 1.80 $ 1.70 $ 3.51 $ 3.26
Cashdividendspershareofcommonstock $ 0.6650 $ 0.5950 $ 1.3300 $ 1.1900

TheNotestoConsolidatedFinancialStatementsareanintegralpartofthisstatement.
3
Consolidated Statement of Comprehensive Income
(Unaudited)

June 30, June 30,
2017 2016 2017 2016

(Dollars in millions)

Netincome $ 1,400 $ 1,327 $ 2,732 $ 2,553
Othercomprehensiveincome(loss),netoftax

Foreignexchangetranslationadjustment (192) (74) 56 48

Priorservicecredit(cost) - - (46) -
Actuarial(gains)lossesrecognized 3 4 5 7
Priorservice(credit)costrecognized (16) (19) (32) (38)
Pensionandotherpostretirementbenefitsadjustments (13) (15) (73) (31)

Effectiveportionofcashflowhedgesrecognizedinother
comprehensiveincome(loss) (49) 38 (62) 6
Less:Reclassificationadjustmentforgains(losses)includedin
netincome 21 (7) 44 (13)
Changesinfairvalueofeffectivecashflowhedges (70) 45 (106) 19
Othercomprehensiveincome(loss),netoftax (275) (44) (123) 36

Comprehensiveincome 1,125 1,283 2,609 2,589
Less:Comprehensiveincomeattributabletothenoncontrolling
interest 9 5 18 15
ComprehensiveincomeattributabletoHoneywell $ 1,116 $ 1,278 $ 2,591 $ 2,574

4
Consolidated Balance Sheet
(Unaudited)

June 30, December 31,
2017 2016

ASSETS
Currentassets:
Cashandcashequivalents $ 7,877 $ 7,843
Short-terminvestments 1,944 1,520
Accountsreceivable-net 8,442 8,177
Inventories 4,651 4,366
Othercurrentassets 1,150 1,152
Totalcurrentassets 24,064 23,058

Investmentsandlong-termreceivables 570 587
Property,plantandequipment-net 5,718 5,793
Goodwill 18,038 17,707
Otherintangibleassets-net 4,566 4,634
Insurancerecoveriesforasbestosrelatedliabilities 401 417
Deferredincometaxes 357 347
Otherassets 1,954 1,603
Totalassets $ 55,668 $ 54,146

LIABILITIES
Currentliabilities:
Accountspayable $ 5,971 $ 5,690
Commercialpaperandothershort-termborrowings 3,803 3,366
Currentmaturitiesoflong-termdebt 1,378 227
Accruedliabilities 6,829 7,048
Totalcurrentliabilities 17,981 16,331
Long-termdebt 11,329 12,182
Deferredincometaxes 329 486
Postretirementbenefitobligationsotherthanpensions 537 473
Asbestosrelatedliabilities 998 1,014
Otherliabilities 3,941 4,110

Redeemablenoncontrollinginterest 3 3

SHAREOWNERS EQUITY
Capital -commonstockissued 958 958
-additionalpaid-incapital 6,033 5,781
Commonstockheldintreasury,atcost (14,135) (13,366)
Accumulatedothercomprehensiveloss (2,837) (2,714)
Retainedearnings 30,406 28,710
TotalHoneywellshareownersequity 20,425 19,369
Noncontrollinginterest 125 178
Totalshareownersequity 20,550 19,547
Totalliabilities,redeemablenoncontrollinginterestandshareownersequity $ 55,668 $ 54,146

5
Consolidated Statement of Cash Flows
(Unaudited)

Six Months Ended
June 30,
2017 2016

Cash flows from operating activities:
Netincome $ 2,732 $ 2,553
Less:Netincomeattributabletothenoncontrollinginterest 14 18
NetincomeattributabletoHoneywell 2,718 2,535
AdjustmentstoreconcilenetincomeattributabletoHoneywelltonetcashprovidedbyoperatingactivities:
Depreciation 354 364
Amortization 193 149
Repositioningandothercharges 353 265
Netpaymentsforrepositioningandothercharges (264) (266)
Pensionandotherpostretirementincome (373) (318)
Pensionandotherpostretirementbenefitpayments (47) (81)
Stockcompensationexpense 94 96
Deferredincometaxes (92) 182
Other (8) (25)
Changesinassetsandliabilities,netoftheeffectsofacquisitionsanddivestitures:
Accountsreceivable (276) (357)
Inventories (298) (212)
Othercurrentassets (3) (138)
Accountspayable 314 -
Accruedliabilities (278) (292)
Netcashprovidedbyoperatingactivities 2,387 1,902

Cash flows from investing activities:
Expendituresforproperty,plantandequipment (401) (475)
Proceedsfromdisposalsofproperty,plantandequipment 25 1
Increaseininvestments (2,329) (1,821)
Decreaseininvestments 1,841 1,785
Cashpaidforacquisitions,netofcashacquired (15) (1,084)
Other (113) 52
Netcashusedforinvestingactivities (992) (1,542)

Cash flows from financing activities:
Proceedsfromissuanceofcommercialpaperandothershort-termborrowings 5,036 10,694
Paymentsofcommercialpaperandothershort-termborrowings (4,835) (12,918)
Proceedsfromissuanceofcommonstock 376 243
Proceedsfromissuanceoflong-termdebt 16 4,473
Paymentsoflong-termdebt (30) (470)
Repurchasesofcommonstock (992) (1,633)
Cashdividendspaid (1,049) (957)
Paymentstopurchasethenoncontrollinginterest - (238)
Other (105) (15)
Netcashusedforfinancingactivities (1,583) (821)
Effectofforeignexchangeratechangesoncashandcashequivalents 222 51
Netincrease(decrease)incashandcashequivalents 34 (410)
Cashandcashequivalentsatbeginningofperiod 7,843 5,455
Cashandcashequivalentsatendofperiod 7,877 5,045

6
Notes to Consolidated Financial Statements
(Unaudited)

Note 1. Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial position of Honeywell International Inc. and its consolidated subsidiaries
(HoneywellortheCompany)atJune30,2017and2016andtheresultsofoperationsforthethreeandsixmonthsendedJune30,2017and2016
andthecashflowsforthesixmonthsendedJune30,2017and2016.TheresultsofoperationsforthethreeandsixmonthsendedJune30,2017
andcashflowsforthesixmonthsendedJune30,2017shouldnotnecessarilybetakenasindicativeoftheentireyear.

Wereportourquarterlyfinancialinformationusingacalendarconvention;thefirst,secondandthirdquartersareconsistentlyreportedas
endingonMarch31,June30andSeptember30.Ithasbeenourpracticetoestablishactualquarterlyclosingdatesusingapredeterminedfiscal
calendar,whichrequiresourbusinessestoclosetheirbooksonaSaturdayinordertominimizethepotentiallydisruptiveeffectsofquarterlyclosing
on our business processes. The effects of this practice are generally not significant to reported results for any quarter and only exist within a
reportingyear.Intheeventthatdifferencesinactualclosingdatesarematerialtoyear-over-yearcomparisonsofquarterlyoryear-to-dateresults,
wewillprovideappropriatedisclosures.OuractualclosingdatesforthethreeandsixmonthsendedJune30,2017and2016wereJuly1,2017and
July2,2016.

Certainprioryearamountshavebeenreclassifiedtoconformtocurrentyearpresentation.

Note 2. Recent Accounting Pronouncements
We consider the applicability and impact of all Accounting Standards Updates (ASUs) issued by Financial Accounting Standards Board
(FASB). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our
consolidatedresultofoperations,financialpositionandcashflows(ConsolidatedFinancialStatements).

In May 2014, and in following related amendments, the FASB issued guidance on revenue from contracts with customers that will
supersedemostcurrentrevenuerecognitionguidance,includingindustry-specificguidance.Theunderlyingprincipleisthatanentitywillrecognize
revenuetodepictthetransferofgoodsorservicestocustomersatanamountthattheentityexpectstobeentitledtoinexchangeforthosegoodsor
services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions
include capitalization of certain contract costs, consideration of time value of money in the transaction price, and allowing estimates of variable
consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures
regardingthenature,amount,timinganduncertaintyofrevenueandcashflowsarisingfromanentityscontractswithcustomers.

TheeffectivedateisforinterimandannualperiodsbeginningonorafterDecember15,2017.Theguidancepermitstheuseofeitherafull
retrospectiveormodifiedretrospectivetransitionmethod.WewilladopttherequirementsofthenewstandardeffectiveJanuary1,2018andexpect
tousethemodifiedretrospectivetransitionmethodwiththecumulativeeffecttotheopeningbalanceofretainedearningsrecognizedasofthedate
ofinitialadoption.Webelievewearefollowinganappropriatetimelinetoallowforproperrecognition,presentationanddisclosureuponadoption,
includingtherelatedimpactstointernalcontrols.

The Companys evaluation of the new standard is substantially complete and the Company has prepared an initial assessment of the
impacts of adoption on its Consolidated Financial Statements and disclosures. The FASB has issued, and may issue in the future, interpretive
guidancewhichmaycauseourevaluationtochange.Wewillcontinuetoevaluatetheadoptionimpactofthenewstandard,includingasitrelatesto
newcontractsthatwillberecognizedfollowingadoption.Basedontheevaluationofourcurrentcontractsandrevenuestreams,recognitionwillbe
mostly consistent under both the current and new standard. However, we expect the guidance in certain areas, particularly in our Aerospace
segment,toimpactourcurrentrevenuerecognitionpolicies.

ThecurrentaccountingpolicyforcostsincurredfornonrecurringengineeringanddevelopmentactivitiesofourAerospaceproductsunder
agreementswithcommercialcustomersisgenerallytorecordtheexpenseas
7
(Unaudited)

incurred.Anycustomerfundingreceivedforsucheffortsisrecognizedwhenearnedasareductionofcostofsales.Followingadoptionofthenew
standard,thecustomerfundingwillgenerallybeclassifiedasrevenueandnotasareductionofcostofsales.Suchrevenuewillberecognizedas
productsaredeliveredtothecustomers.Additionally,underthenewguidance,expensesincurred,uptothecustomeragreedfundedamount,will
bedeferredasanassetandrecognizedascostofsalesalsowhenproductsaredeliveredtothecustomer.Hence,thenewguidancewillresultinan
increaseindeferredcosts(asset)anddeferredrevenue(liability)onourConsolidatedBalanceSheet,however,weexpectthistoresultinnonet
impacttoincomebeforetaxes.
Inaddition,weexpectrevenuesforourmechanicalserviceprograms atourAerospacebusinesstobeimpacted.Ourcurrent policyisto

recognize revenue over time as costs are incurred (input method). Following adoption, we will continue to recognize revenue over time, but
recognitionwillreflectaseriesofdistinctservicesusingtheoutputmethod.Thischangewillresultincertainunbilledreceivablesordeferredrevenue
beingeliminatedthroughretainedearnings,butwedonotexpectamaterialimpact.

Wedonotcurrentlyexpectthenewstandardtohaveamaterialimpactonourconsolidatedfinancialpositionorresultsofoperations.We
expectthenewstandardwillhavenocashimpactand,assuch,doesnotaffecttheeconomicsofourunderlyingcustomercontracts.Weexpectthat
disclosureinournotestoConsolidatedFinancialStatementsrelatedtorevenuerecognitionwillbesignificantlyexpandedunderthenewstandard,
specifically around the quantitative and qualitative information about performance obligations, changes in contract assets and liabilities, and
disaggregationofrevenue.

InFebruary2016,theFASBissuedguidanceonaccountingforleaseswhichrequireslesseestorecognizemostleasesontheirbalance
sheets for the rights and obligations created by those leases. The guidance requires enhanced disclosures regarding the amount, timing, and
uncertaintyof cash flows arising from leases that will be effective for interim and annual periods beginning after December 15, 2018, with early
adoption permitted. We expect to adopt the requirements of the new standard effective January 1, 2019. The guidance requires the use of a
modifiedretrospectiveapproach.Wearecurrentlyevaluatingtheimpactoftheguidanceonourconsolidatedfinancialposition,resultsofoperations,
andrelatednotestofinancialstatements.

InOctober2016,theFASBissuedanaccountingstandardupdatewhichrequiresanentitytorecognizetheincometaxconsequencesofan
intra-entitytransferofanasset,otherthaninventory,atthetimetheentitytransferoccursratherthanwhentheassetisultimatelytransferredtoa
third party, as required under current U.S. GAAP. The guidance is intended to reduce diversity in practice, particularly for transfers involving
intellectualproperty.TheguidanceiseffectiveforinterimandannualperiodsbeginningafterDecember15,2017withearlyadoptionpermitted.We
expecttoadopttheaccountingstandardupdateasofJanuary1,2018.Theguidancerequiresapplicationonamodifiedretrospectivebasis.The
impactuponadoptionwillresultinanincreasetodeferredtaxassetsandliabilities,withthecorrespondingoffsetrecordedasacumulative-effect
adjustment to retained earnings as of the beginning of the adoption period. We are currently in the process of evaluating the impact of this
accounting standard update by determining the population of historical intra-entity transfers. We intend to complete our analysis during the third
quarterof2017.

InMarch2017,theFASBissuedguidanceonpresentationofnetperiodicpensioncostandnetperiodicpostretirement benefitcost. The
newstandardrequiresthatanemployerdisaggregatetheservicecostcomponentofnetbenefitcost.Theemployerwillberequired toreportthe
servicecostcomponentinthesamelineitemoritemsinthestatementofoperationsasothercompensationcostsarisingfromservicesrenderedby
thepertinentemployeesduringtheperiod.Theothercomponentsofnetbenefitcostwillberequiredtobepresentedinthestatementofoperations
separately from the service cost component, such as in other income and expense. The guidance is effective for fiscal years beginning after
December15,2017.ThisguidancewillimpactthepresentationofourConsolidatedFinancialStatements.Ourcurrentpresentationoftheservice
costcomponentisconsistentwiththerequirementsofthenewstandard.Uponouradoptionofthenewstandard,weexpecttopresenttheother
componentswithinOther(income)expense(wecurrentlypresentwithinCostofproductsandservicessoldandSelling,general,andadministrative
expenses).AllcomponentswillcontinuetobeexcludedfromSegmentProfit(seeNote10SegmentFinancialData).
8
(Unaudited)

Note 3. Repositioning and Other Charges
Asummaryofrepositioningandotherchargesfollows:

June 30, June 30,
2017 2016 2017 2016
Severance $ 82 $ 70 $ 102 $ 98
Assetimpairments 33 24 35 31
Exitcosts 8 3 9 5
Reserveadjustments (6) (44) - (61)
Totalnetrepositioningcharge 117 53 146 73

Asbestosrelatedlitigationcharges,netofinsurance 52 56 102 109
Probableandreasonablyestimableenvironmentalliabilities 55 31 105 83

Totalnetrepositioningandothercharges $ 224 $ 140 $ 353 $ 265

Thefollowingtablesummarizesthepretaxdistributionoftotalnetrepositioningandotherchargesbyincomestatementclassification:

June 30, June 30,
2017 2016 2017 2016
Costofproductsandservicessold $ 174 $ 79 $ 310 $ 184
Selling,generalandadministrativeexpenses 24 37 17 57
Other 26 24 26 24
$ 224 $ 140 $ 353 $ 265

Thefollowingtablesummarizesthepretaximpactoftotalnetrepositioningandotherchargesbysegment:

June 30, June 30,
2017 2016 2017 2016
Aerospace $ 84 $ 72 $ 157 $ 121
HomeandBuildingTechnologies 43 (5) 42 12
PerformanceMaterialsandTechnologies (1) 27 2 36
SafetyandProductivitySolutions 4 4 - (6)
Corporate 94 42 152 102
$ 224 $ 140 $ 353 $ 265

In the quarter ended June 30, 2017, we recognized repositioning charges totaling $123 million including severance costs of $82 million
relatedtoworkforcereductionsof1,902manufacturingandadministrativepositionsmainlyinHomeandBuildingTechnologiesandAerospace.The
workforcereductionswereprimarilyrelatedtocostsavingsactionstakeninconnectionwithourproductivityandongoingfunctionaltransformation
initiativesandwithsitetransitions,mainlyinAerospace,tomorecost-effectivelocations.Therepositioning
9
(Unaudited)

charges included asset impairments of $33 million primarily related to the write-down of property in our Corporate segment in connection with a
plannedsaleofsuchproperty.
In the quarter ended June 30, 2016, we recognized repositioning charges totaling $97 million including severance costs of $70 million
relatedtoworkforcereductionsof2,578manufacturingandadministrativepositionsacrossoursegments.Theworkforcereductionswereprimarily
relatedtocostsavingsactionstakeninconnectionwithourproductivityandongoingfunctionaltransformationinitiatives.Therepositioningcharge
includedassetimpairmentsof$24millionprimarilyrelatedtothewrite-offofcertainintangibleassetsinconnectionwiththenowcompletedsaleofa
PerformanceMaterialsandTechnologiesbusiness.Also,$44millionofpreviouslyestablishedaccrualsforseverancemainlyinHomeandBuilding
Technologies, Safety and Productivity Solutions and Aerospace were returned to income as a result of higher attrition than anticipated in prior
severance programs resulting in lower required severance payments, lower than expected severance costs in certain repositioning actions, and
changesinthescopeofpreviouslyannouncedrepositioningactions.

InthesixmonthsendedJune30,2017,werecognizedrepositioningchargestotaling$146millionincludingseverancecostsof$102million
relatedto cost savings actions taken inconnection with our productivity andongoingfunctional transformation initiatives andwith site transitions,
mainlyinAerospace,tomorecost-effectivelocations.Therepositioningchargesincludedassetimpairmentsof$35millionprimarilyrelatedtothe
write-downofpropertyinourCorporatesegmentinconnectionwithaplannedsaleofsuchproperty.

InthesixmonthsendedJune30,2016,werecognizedrepositioningchargestotaling$134millionincludingseverancecostsof$98million
related to cost savings actions taken in connection with our productivity and ongoing functional transformation initiatives, achieving acquisition-
related synergies and outsourcing of certain packaging operations. The repositioning charge included asset impairments of $31 million primarily
related to the write-off of certain intangible assets in connection with the now completed sale of a Performance Materials and Technologies
business.Also,$61millionofpreviouslyestablishedaccruals,primarilyforseverance,inHomeandBuildingTechnologies,SafetyandProductivity
Solutions,AerospaceandPerformanceMaterialsandTechnologieswerereturnedtoincomeasaresultofhigherattritionthananticipatedinprior
severance programs resulting in lower required severance payments, lower than expected severance costs in certain repositioning actions, and
changesinthescopeofpreviouslyannouncedrepositioningactions.

Thefollowingtablesummarizesthestatusofourtotalrepositioningreserves:

Severance Asset Exit
Costs Impairments Costs Total
December31,2016 $ 298 $ - $ 33 $ 331
Charges 102 35 9 146
Usage-cash (88) - (6) (94)
Usage-noncash - (35) - (35)
Foreigncurrencytranslation 10 - 1 11
Adjustmentsandreclassifications 1 - (9) (8)
June30,2017 $ 323 $ - $ 28 $ 351

Certainrepositioningprojects in2017and2016includedexitordisposalactivities, thecostsrelatedtowhichwillberecognizedinfuture
periodswhentheactualliabilityisincurred.Suchexitanddisposalcostsarenotexpectedtobesignificant.
10
(Unaudited)

Note 4. Earnings Per Share

June 30, June 30,
Basic 2017 2016 2017 2016


Weightedaveragesharesoutstanding 764.2 763.3 763.6 765.5

Earningspershareofcommonstock $ 1.82 $ 1.73 $ 3.56 $ 3.31

June 30, June 30,
Assuming Dilution 2017 2016 2017 2016


Average Shares
Weightedaveragesharesoutstanding 764.2 763.3 763.6 765.5
Dilutivesecuritiesissuable-stockplans 9.8 11.6 10.4 11.7
Totalweightedaveragesharesoutstanding 774.0 774.9 774.0 777.2

Earningspershareofcommonstock $ 1.80 $
1.70 $ 3.51 $ 3.26

Thedilutedearningspersharecalculationsexcludetheeffectofstockoptionswhentheoptionsassumedproceedsexceedtheaverage
marketpriceofthecommonsharesduringtheperiod.ForthethreeandsixmonthsendedJune30,2017,theweightedaveragenumberofstock
optionsexcludedfromthecomputationswere5.0millionand3.5million.ForthethreeandsixmonthsendedJune30,2016,theweightedaverage
numberofstockoptionsexcludedfromthecomputationswere6.7millionand7.6million.Thesestockoptionswereoutstandingattheendofeach
period.

Note 5. Accounts Receivable

2017 2016

Trade $ 8,641 $ 8,449
Less-Allowancefordoubtfulaccounts (199) (272)
$ 8,442 $ 8,177

Trade receivables include $1,728 million and $1,626 million of unbilled balances under long-term contracts as of June 30, 2017 and
December31,2016.Theseamountsarebilledinaccordancewiththetermsofthecustomercontractstowhichtheyrelate.

Note 6. Inventories

2017 2016

Rawmaterials $ 1,187 $ 1,104
Workinprocess 795 775
Finishedproducts 2,707 2,552
4,689 4,431
ReductiontoLIFOcostbasis (38) (65)
$ 4,651 $ 4,366
11
(Unaudited)
Note 7. Long-term Debt and Credit Agreements

2017 2016
FloatingrateEuronotesdue2018 $ 1,140 $ 1,054
1.40%notesdue2019 1,250 1,250
Floatingratenotesdue2019 250 250
0.65%Euronotesdue2020 1,140 1,054
4.25%notesdue2021 800 800
1.85%notesdue2021 1,500 1,500
1.30%Euronotesdue2023 1,426 1,317
3.35%notesdue2023 300 300
2.50%notesdue2026 1,500 1,500
2.25%Euronotesdue2028 855 790
5.70%notesdue2036 550 550
5.70%notesdue2037 600 600
5.375%notesdue2041 600 600
Industrialdevelopmentbondobligations,floatingratematuringatvariousdatesthrough2037 30 30
6.625%debenturesdue2028 216 216
9.065%debenturesdue2033 51 51
Other(includingcapitalizedleasesanddebtissuancecosts),0.3%weightedaverage
maturingatvariousdatesthrough2023 499 547
12,707 12,409
Less:currentportion (1,378) (227)
$ 11,329 $ 12,182
OnApril28,2017,theCompanyenteredintoAmendmentNo.3(Amendment)totheAmendedandRestated$4billionCreditAgreement
datedasofJuly10,2015,asamendedbyAmendmentNo.1datedasofSeptember30,2015andAmendmentNo.2datedasofApril29,2016(as
soamended,theCreditAgreement),withasyndicateofbanks.TheCreditAgreementismaintainedforgeneralcorporatepurposes.Commitments
undertheCreditAgreementcanbeincreasedpursuanttothetermsoftheCreditAgreementtoanaggregateamountnottoexceed$4.5billion.The
Amendment,amongotherthings,extendstheCreditAgreementsterminationdatefromJuly10,2021toApril28,2022.
On April 28, 2017, the Company entered into a $1.5 billion 364-Day Credit Agreement (364-Day Credit Agreement) with a syndicate of
banks.The364-DayCreditAgreementismaintainedforgeneralcorporatepurposes.

Afull description ofthe Amendment and364-Day Credit Agreement can befound inthe Companys Current Report onForm 8-K, dated
April28,2017.

Therehavebeennoborrowingsunderanyofthecreditagreementspreviouslydescribed.
Note 8. Financial Instruments and Fair Value Measures
Our credit, market, foreign currency and interest rate risk management policies are described in Note 14, Financial Instruments and Fair
ValueMeasures,ofNotestoConsolidatedFinancialStatementsinour2016AnnualReportonForm10-K.

ThefollowingtablesetsforththeCompanysfinancialassetsandliabilitiesthatwereaccountedforatfairvalueonarecurringbasis:
12
(Unaudited)

2017 2016
Assets:
Foreigncurrencyexchangecontracts $ 54 $ 152
Availableforsaleinvestments 2,072 1,670
Interestrateswapagreements 63 69

Liabilities:
Foreigncurrencyexchangecontracts $ 40 $ 2
Interestrateswapagreements 44 48
Theforeigncurrencyexchangecontractsandinterestrateswapagreementsarevaluedusingbrokerquotationsormarkettransactionsin
either the listed or over-the-counter markets. These derivative instruments are classified within level 2. The Company holds investments in
certificatesofdeposits,timedepositsandcommercialpaperthataredesignatedasavailableforsaleandarevaluedusingpublishedpricesbased
on observable market data. These investments are classified within level 2. The Company also holds available for sale investments in U.S.
governmentandcorporatedebtsecuritiesvaluedutilizingpublishedpricesbasedonquotedmarketpricing,whichareclassifiedwithinlevel1.
Thecarryingvalueofcashandcashequivalents,accountsreceivable,payables,commercialpaperandshort-termborrowingscontainedin
theConsolidatedBalanceSheetapproximatesfairvalue.ThefollowingtablesetsforththeCompanysfinancialassetsandliabilitiesthatwerenot
carriedatfairvalue:
June 30, 2017 December 31, 2016

Carrying Fair Carrying Fair
Value Value Value Value
Assets
Long-termreceivables $ 249 $ 238 $ 280 $ 273
Liabilities
Long-termdebtandrelatedcurrentmaturities $ 12,707 $ 13,403 $ 12,409 $ 13,008
The Company determined the fair value of the long-term receivables by discounting based upon the terms of the receivable and
counterpartydetailsincluding credit quality. As such, the fair value of these receivables is considered level 2. The Company determined the fair
valueofthelong-termdebtandrelatedcurrentmaturitiesutilizingtransactionsinthelistedmarketsforidenticalorsimilarliabilities.Assuch,thefair
valueofthelong-termdebtandrelatedcurrentmaturitiesisconsideredlevel2aswell.

InterestrateswapagreementsaredesignatedashedgerelationshipswithgainsorlossesonthederivativerecognizedinInterestandother
financialcharges offsetting the gains and losses on the underlying debt being hedged. For the three and six months ended June 30, 2017, we
recognized$9millionofgainsand$2millionoflossesinearningsoninterestrateswapagreements.ForthethreeandsixmonthsendedJune30,
2016,werecognized$8millionand$37millionofgainsinearningsoninterestrateswapagreements.Gainsandlossesarefullyoffsetbylosses
andgainsontheunderlyingdebtbeinghedged.

We also economically hedge our exposure to changes in foreign exchange rates primarily with forward contracts. These contracts are
marked-to-market with the resulting gains and losses recognized in earnings offsetting the gains and losses on the non-functional currency
denominatedmonetaryassetsandliabilitiesbeinghedged.Werecognized$84millionand$118millionofexpenseinOther(income)expensefor
thethreeandsixmonthsendedJune30,2017.Werecognized$122millionand$90millionofincomeinOther(income)expenseforthethreeand
sixmonthsendedJune30,2016.
13
(Unaudited)
Note 9. Accumulated Other Comprehensive Income (Loss)
Changes in Accumulated Other Comprehensive Income by Component
Pension Changes in
Foreign and Other Fair Value
Exchange Postretirement of Effective
Translation Benefits Cash Flow
Adjustment Adjustments Hedges Total
BalanceatDecember31,2016 $ (1,944) $ (879) $ 109 $ (2,714)
Othercomprehensiveincome(loss)before
reclassifications 56 (46) (62) (52)
Amountsreclassifiedfromaccumulatedother
comprehensiveincome - (27) (44) (71)
Netcurrentperiodothercomprehensiveincome(loss) 56 (73) (106) (123)
BalanceatJune30,2017 $ (1,888) $ (952) $ 3 $ (2,837)
Pension Changes in
Foreign and Other Fair Value
Exchange Postretirement of Effective
Translation Benefits Cash Flow
Adjustment Adjustments Hedges Total
BalanceatDecember31,2015 $ (1,892) $ (644) $ 1 $ (2,535)
Othercomprehensiveincome(loss)before
reclassifications 48 - 6 54
Amountsreclassifiedfromaccumulatedother
comprehensiveincome - (31) 13 (18)
Netcurrentperiodothercomprehensiveincome(loss) 48 (31) 19 36
BalanceatJune30,2016 $ (1,844) $ (675) $ 20 $ (2,499)
14
(Unaudited)
Note 10. Segment Financial Data
Wegloballymanageourbusinessoperationsthroughfourreportableoperatingsegments.Segmentinformationisconsistentwithhow
managementreviewsthebusinesses,makesinvestingandresourceallocationdecisionsandassessesoperatingperformance.

Honeywellssenior management evaluates segment performance based on segment profit. Segment profit is measured as segment
income(loss)beforetaxesexcludinggeneralcorporateunallocatedexpense,otherincome(expense),interestandotherfinancialcharges,stock
compensationexpense,pensionandotherpostretirementincome(expense),andrepositioningandothercharges.

June 30, June 30,
2017 2016 2017 2016
NetSales
Aerospace
Products $ 2,545 $ 2,556 $ 4,941 $ 5,046
Services 1,129 1,223 2,279 2,438
Total 3,674 3,779 7,220 7,484
HomeandBuildingTechnologies
Products 2,379 2,375 4,596 4,572
Services 357 301 693 581
Total 2,736 2,676 5,289 5,153
PerformanceMaterialsandTechnologies
Products 1,800 2,013 3,474 3,897
Services 439 421 834 818
Total 2,239 2,434 4,308 4,715
SafetyandProductivitySolutions
Products 1,355 1,091 2,608 2,139
Services 74 11 145 22
Total 1,429 1,102 2,753 2,161
$ 10,078 $ 9,991 $ 19,570 $ 19,513

SegmentProfit
Aerospace $ 819 $ 791 $ 1,615 $ 1,589
HomeandBuildingTechnologies 420 412 809 772
PerformanceMaterialsandTechnologies 524 520 995 981
SafetyandProductivitySolutions 214 173 408 323
Corporate (67) (49) (128) (98)
Totalsegmentprofit 1,910 1,847 3,699 3,567

Otherincome(expense)(a) (1) (7) 5 5
Interestandotherfinancialcharges (79) (85) (154) (170)
Stockcompensationexpense (b) (44) (43) (94) (96)
Pensionongoingincome(b) 184 151 363 301
Otherpostretirementincome(expense)(b) 6 8 10 17
Repositioningandothercharges(b) (198) (116) (327) (241)
Incomebeforetaxes $ 1,778 $ 1,755 $ 3,502 $ 3,383
(a)Equityincome(loss)ofaffiliatedcompaniesisincludedinsegmentprofit.
(b)Amountsincludedincostofproductsandservicessoldandselling,generalandadministrativeexpenses.
15
(Unaudited)
Note 11. Pension Benefits
Netperiodicpensionbenefitincomeforoursignificantdefinedbenefitplansincludethefollowingcomponents:

U.S. Plans
June 30, June 30,
2017 2016 2017 2016

Servicecost $ 43 $ 47 $ 86 $ 95
Interestcost 146 150 293 300
Expectedreturnonplanassets (315) (306) (630) (612)
Amortizationofpriorservice(credit) (11) (11) (22) (22)
$ (137) $ (120) $ (273) $ (239)
Non-U.S. Plans
June 30, June 30,
2017 2016 2017 2016

Servicecost $ 10 $ 13 $ 19 $ 25
Interestcost 37 47 72 94
Expectedreturnonplanassets (102) (100) (201) (199)
Amortizationofpriorservice(credit) - (1) - (2)
$ (55) $ (41) $ (110) $ (82)
Note 12. Commitments and Contingencies
Environmental Matters

OurenvironmentalmattersaredescribedinNote19CommitmentsandContingenciesofNotestoConsolidatedFinancialStatementsinour
2016AnnualReportonForm10-K.
Thefollowingtablesummarizesinformationconcerningourrecordedliabilitiesforenvironmentalcosts:
December31,2016 $ 511
Accrualsforenvironmentalmattersdeemed
probableandreasonablyestimable 105
Environmentalliabilitypayments (70)
Other 8
June30,2017 $ 554
Environmentalliabilitiesareincludedinthefollowingbalancesheetaccounts:

2017 2016
Accruedliabilities $ 252 $ 252
Otherliabilities 302 259
$ 554 $ 511
16
(Unaudited)
We do not currently possess sufficient information to reasonably estimate the amounts of environmental liabilities to be recorded upon
future completion of studies, litigation or settlements, and neither the timing nor the amount of the ultimate costs associated with environmental
matters can be determined although they could be material to our consolidated results of operations and operating cash flows in the periods
recognized or paid. However, considering our past experience and existing reserves, we do not expect that environmental matters will have a
materialadverseeffectonourconsolidatedfinancialposition.

Onondaga
Lake,
Syracuse,
NY
In 2016, we largely completed a dredging/capping remedy of Onondaga Lake pursuant to a consent
decreeapprovedbytheUnitedStatesDistrictCourtfortheNorthernDistrictofNewYorkinJanuary2007.Someadditionallong-termmonitoring
andmaintenanceactivitieswillcontinue,asrequiredbytheconsentdecree.Honeywellisalsoconductingremedialinvestigationsandactivitiesat
othersitesinSyracuse.Wehaverecordedreservesfortheseinvestigationsandactivitieswhereappropriate.

Honeywellhasenteredintoacooperativeagreementwithpotentialnaturalresourcetrusteestoassessallegednaturalresourcedamages
relatingtothesesites.Itisnotpossibletopredicttheoutcomeordurationofthisassessment,ortheamountsof,orresponsibilityfor,anydamages.

Asbestos Matters
Honeywellisadefendantinasbestosrelatedpersonalinjuryactionsrelatedtotwopredecessorcompanies:

NorthAmericanRefractoriesCompany(NARCO),whichwassoldin1986,producedrefractoryproducts(bricksandcementusedinhigh
temperatureapplications).ClaimantsconsistlargelyofindividualswhoallegeexposuretoNARCOasbestos-containingrefractoryproducts
inanoccupationalsetting.
Bendix Friction Materials (Bendix) business, which was sold in 2014, manufactured automotive brake parts that contained chrysotile
asbestos in an encapsulated form. Claimants consist largely of individuals who allege exposure to asbestos from brakes from either
performingorbeinginthevicinityofindividualswhoperformedbrakereplacements.
ThefollowingtablessummarizeinformationconcerningNARCOandBendixasbestosrelatedbalances:
Asbestos Related Liabilities
Bendix NARCO Total

December31,2016 $ 641 $ 919 $ 1,560
Accrualforupdatetoestimatedliability 95 14 109
Asbestosrelatedliabilitypayments (104) (20) (124)
June30,2017 $ 632 $ 913 $ 1,545
Insurance Recoveries for Asbestos Related Liabilities
Bendix NARCO Total

December31,2016 $ 121 $ 319 $ 440
Probableinsurancerecoveriesrelatedtoestimated
liability 8 - 8
Insurancereceiptsforasbestosrelatedliabilities (20) (4) (24)
June30,2017 $ 109 $ 315 $ 424
17
(Unaudited)
NARCOandBendixasbestosrelatedbalancesareincludedinthefollowingbalancesheetaccounts:

2017 2016
Othercurrentassets $ 23 $ 23
Insurancerecoveriesforasbestosrelatedliabilities 401 417
$ 424 $ 440

Accruedliabilities $ 547 $ 546
Asbestosrelatedliabilities 998 1,014
$ 1,545 $ 1,560
NARCO
Products
In connection with NARCOs emergence from bankruptcy on April 30, 2013, a federally authorized 524(g) trust
(NARCOTrust)wasestablishedfortheevaluationandresolutionofallexistingandfutureNARCOasbestosclaims.BothHoneywellandNARCO
are protected by a permanent channeling injunction barring all present and future individual actions in state or federal courts and requiring all
asbestos related claims based on exposure to NARCO asbestos-containing products to be made against the NARCO Trust. The NARCO Trust
reviewssubmittedclaimsanddeterminesawardamountsinaccordancewithestablishedTrustDistributionProceduresapprovedbytheBankruptcy
Courtwhichsetforththecriteriaclaimantsmustmeettoqualifyforcompensationincluding,amongotherthings,exposureandmedicalcriteriathat
determine the award amount. In addition, Honeywell provided, andcontinues to provide, input to the design of control procedures for processing
NARCOclaims,andhason-goingauditrightstoreviewandmonitortheclaimsprocessorsadherencetotheestablishedrequirementsoftheTrust
DistributionProcedures.

Honeywell is obligated to fund NARCO asbestos claims submitted to the NARCO Trust which qualify for payment under the Trust
DistributionProcedures(AnnualContributionClaims),subjecttoannualcapsof$140millionintheyears2017and2018and$145millionforeach
yearthereafter.However,theinitial$100millionofclaimsprocessedthroughtheNARCOTrust(theInitialClaimsAmount)willnotcountagainstthe
annualcapandanyunusedportionoftheInitialClaimsAmountwillrollovertosubsequentyearsuntilfullyutilized.In2015,Honeywellfiledsuit
againsttheNARCOTrustinBankruptcyCourtallegingbreachofcertainprovisionsoftheTrustAgreementandTrustDistributionProcedures.The
parties agreed to dismiss the proceeding without prejudice pursuant to an 18 month Standstill Agreement that expires in October 2017. Claims
processing will continue during this period subject to a defined dispute resolution process. As of June 30, 2017, Honeywell has not made any
paymentstotheNARCOTrustforAnnualContributionClaims.

Honeywell is also responsible for payments due to claimants pursuant to settlement agreements reached during the pendency of the
NARCO bankruptcy proceedings that provide for the right to submit claims to the NARCO Trust subject to qualification under the terms of the
settlement agreements and Trust Distribution Procedures criteria (Pre-established Unliquidated Claims), which amounts are estimated at $150
million and are expected to be paid during the initial years of trust operations ($5 million of which has been paid since the effective date ofthe
NARCOTrust).Suchpaymentsarenotsubjecttotheannualcapdescribedabove.

Our consolidated financial statements reflect an estimated liability for pre-established unliquidated claims ($145 million), unsettled claims
pendingasofthetimeNARCOfiledforbankruptcyprotection($25million)andfortheestimatedvalueoffutureNARCOasbestosclaimsexpected
tobeassertedagainsttheNARCOTrust($743million).TheestimateoffutureNARCOclaimsisbasedonacommonlyacceptedmethodologyused
bynumerousbankruptcycourtsaddressing524(g)trustsandalsoreflectsdisputesconcerningimplementationoftheTrustDistributionProcedures
bytheNARCOTrust,alackofsufficienttrustclaimsprocessingexperience,aswellasthestayofallNARCOasbestosclaimswhichremainedin
placethroughoutNARCOsChapter11case.Somecriticalassumptionsunderlyingthiscommonlyacceptedmethodologyincludeclaimsfilingrates,
disease criteria and payment values contained in the Trust Distribution Procedures, estimated approval rates of claims submitted to the NARCO
Trustandepidemiologicalstudiesestimatingdiseaseinstances.TheestimatedvalueoffutureNARCOclaimswasoriginallyestablishedatthetime
oftheNARCOChapter11filingreflectingclaimsexpectedtobeassertedagainstNARCOoverafifteenyearperiod.Thisprojectionresultedina
rangeofestimatedliabilityof$743millionto$961million.Webelievethatnoamountwithinthisrangeisabetterestimatethananyother
18
(Unaudited)
amount,andaccordingly,wehaverecordedtheminimumamountintherange.

OurinsurancereceivablecorrespondingtotheestimatedliabilityforpendingandfutureNARCOasbestosclaimsreflectscoveragewhich
reimbursesHoneywellforportionsofNARCO-relatedindemnityanddefensecostsandisprovidedbyalargenumberofinsurancepolicieswritten
bydozensof insurance companies in both the domestic insurance market and the London excess market. We conduct analyses to estimate the
probableamountofinsurancethatisrecoverableforasbestosclaims.Whilethesubstantialmajorityofourinsurancecarriersaresolvent,someof
ourindividualcarriersareinsolvent,whichhasbeenconsideredinouranalysisofprobablerecoveries.Wemadejudgmentsconcerninginsurance
coveragethatwebelievearereasonableandconsistentwithourhistoricaldealingsandourknowledgeofanypertinentsolvencyissuessurrounding
insurers.

ProjectingfutureeventsissubjecttomanyuncertaintiesthatcouldcausetheNARCO-relatedasbestosliabilitiesorassetstobehigheror
lowerthanthoseprojectedandrecorded.Giventheuncertainties,wereviewourestimatesperiodically,andupdatethembasedonourexperience
andotherrelevantfactors.Similarly,wewillreevaluateourprojectionsconcerningourprobableinsurancerecoveriesinlightofanychangestothe
projectedliabilityorotherdevelopmentsthatmayimpactinsurancerecoveries.

Bendix
Products
ThefollowingtablespresentinformationregardingBendixrelatedasbestosclaimsactivity:

Six Months Ended Years Ended
Claims Activity 2017 2016 2015
ClaimsUnresolvedatthebeginningofperiod 7,724 7,779 9,267
ClaimsFiled 1,300 2,830 2,862
ClaimsResolved (2,266) (2,885) (4,350)
ClaimsUnresolvedattheendofperiod 6,758 7,724 7,779

Disease Distribution of Unresolved Claims 2017 2016 2015
MesotheliomaandOtherCancerClaims 3,103 3,490 3,772
NonmalignantClaims 3,655 4,234 4,007
TotalClaims 6,758 7,724 7,779
Honeywellhasexperiencedaverageresolutionvaluesperclaimexcludinglegalcostsasfollows:
Years Ended December 31,

2016 2015 2014 2013 2012
(in whole dollars)
Malignantclaims $ 44,000 $ 44,000 $ 53,500 $ 51,000 $ 49,000
Nonmalignantclaims $ 4,485 $ 100 $ 120 $ 850 $ 1,400
ItisnotpossibletopredictwhetherresolutionvaluesforBendix-relatedasbestosclaimswillincrease,decreaseorstabilizeinthefuture.

Ourconsolidatedfinancialstatementsreflectanestimatedliabilityforresolutionofpending(claimsactuallyfiledasofthefinancialstatement
date)andfutureBendix-relatedasbestosclaims.WehavevaluedBendixpendingandfutureclaimsusingaverageresolutionvaluesfortheprevious
fiveyears.WeupdatetheresolutionvaluesusedtoestimatethecostofBendixpendingandfutureclaimsduringthefourthquartereachyear.

Theliabilityforfutureclaimsrepresentstheestimatedvalueoffutureasbestosrelatedbodilyinjuryclaims
19
(Unaudited)
expectedtobeassertedagainstBendixoverthenextfiveyears.SuchestimatedcostoffutureBendix-relatedasbestosclaimsisbasedonhistoric
claimsfilingexperienceanddismissalrates,diseaseclassifications,andresolutionvaluesinthetortsystemforthepreviousfiveyears.Inlightofthe
uncertaintiesinherentinmakinglong-termprojections,aswellascertainfactorsuniquetofrictionproductasbestosclaims,wedonotbelievethat
we have a reasonable basis for estimating asbestos claims beyond the next five years. The methodology used to estimate the liability for future
claimsissimilartothatusedtoestimatetheliabilityforfutureNARCO-relatedasbestosclaims.

OurinsurancereceivablecorrespondingtotheliabilityforsettlementofpendingandfutureBendixasbestosclaimsreflectscoveragewhich
is provided by a large number of insurance policies written by dozens of insurance companies in both the domestic insurance market and the
London excess market. Based on our ongoing analysis of the probable insurance recovery, insurance receivables are recorded in the financial
statementssimultaneouswiththerecordingoftheestimatedliabilityfortheunderlyingasbestosclaims.Thisdeterminationisbasedonouranalysis
of the underlying insurance policies, our historical experience with our insurers, our ongoing review of the solvency of our insurers, judicial
determinationsrelevanttoourinsuranceprograms,andourconsiderationoftheimpactsofanysettlementsreachedwithourinsurers.
Honeywell believes it has sufficient insurance coverage and reserves to cover all pending Bendix-related asbestos claims and Bendix-
relatedasbestosclaimsestimatedtobefiledwithinthenextfiveyears.Althoughitisimpossibletopredicttheoutcomeofeitherpendingorfuture
Bendix-relatedasbestosclaims,wedonotbelievethatsuchclaimswouldhaveamaterialadverseeffectonourconsolidatedfinancialpositionin
lightofourinsurancecoverageandourpriorexperienceinresolvingsuchclaims.Iftherateandtypesofclaimsfiled,theaverageresolutionvalueof
such claims and the period of time over which claim settlements are paid (collectively, the Variable Claims Factors) donot substantially change,
HoneywellwouldnotexpectfutureBendix-relatedasbestosclaimstohaveamaterialadverseeffectonourresultsofoperationsoroperatingcash
flowsinanyfiscalyear.Noassurancescanbegiven,however,thattheVariableClaimsFactorswillnotchange.
Other Matters

Wearesubjecttoanumberofotherlawsuits,investigationsanddisputes(someofwhichinvolvesubstantialamountsclaimed)arisingout
oftheconductofourbusiness,includingmattersrelatingtocommercialtransactions,governmentcontracts,productliability,prioracquisitionsand
divestitures, employment, employee benefit plans, intellectual property, andenvironmental, health and safety matters. Werecognize aliabilityfor
anycontingencythatisprobableofoccurrenceandreasonablyestimable.Wecontinuallyassessthelikelihoodofadversejudgmentsofoutcomesin
these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on a careful analysis of
eachmatterwiththeassistanceofoutsidelegalcounseland,ifapplicable,otherexperts.Includedintheseothermattersarethefollowing:

Honeywell
v.
United
Auto
Workers
(UAW)
et.
al
InSeptember2011,theUAWandcertainHoneywellretireesfiledasuitintheEastern
District of Michigan alleging that the Master Collective Bargaining Agreements (MCBAs) between Honeywell and the UAW do not provide for
limitations on Honeywells obligation to contribute toward healthcare coverage for former employees who retired under the MCBAs (CAPS).
HoneywellsubsequentlyansweredtheUAWscomplaintandassertedcounterclaims.

HoneywellbeganenforcingtheCAPSagainstformeremployeeswhoretiredaftertheinitialinclusionoftheCAPSinthe2003MCBA(the
post-2003retirees)onJanuary1,2014.TheUAWandcertainoftheplaintiffsfiledamotionforpartialsummaryjudgmentwithrespecttothepost-
2003retirees,seekingarulingthatthe2003MCBAdidnotlimitHoneywellsobligationtocontributetohealthcarecoverageforthoseretirees.That
motionremainspending.HoneywellisconfidentthattheDistrictCourtwillfindthatthe2003MCBAdoes,infact,limitHoneywellsretireehealthcare
obligation for the post-2003 retirees. In the event of an adverse ruling, however, Honeywells other postretirement benefits for post-2003 retirees
wouldincreasebyapproximately$95million,reflectingtheestimatedvalueoftheseCAPS.
Inthesecondquarterof2014,thepartiesagreedtostaytheproceedingswithrespecttoformer employeeswhoretiredbeforetheinitial
inclusion of the CAPS in the 2003 MCBA (the pre-2003 retirees) until the Supreme Court decided M&G
Polymers
USA,
LLC
v.
Tackett
.
The
SupremeCourtdecidedthecaseonJanuary26,2015and,basedontheruling,HoneywellbeganenforcingtheCAPSagainstthepre-2003retirees
asofMay1,2015.HoneywellisconfidentthattheCAPSwillbeupheldbytheDistrictCourtandthatitsliabilityforhealthcarecoveragepremiums
withrespecttotheputativeclasswillbelimitedasnegotiatedandexpresslysetforthintheapplicableMCBAs.Intheeventofanadverseruling,
however,Honeywellsotherpostretirementbenefitsforthepre-2003retireeswouldincreasebyapproximately$129million,reflectingtheestimated
valueoftheseCAPS.
20
(Unaudited)
Joint
Strike
Fighter
Investigation
In 2013 the Company received subpoenas from the Department of Justice requesting information
relatingprimarilytopartsmanufacturedintheUnitedKingdomandChinausedintheF-35fighterjet.InMay2017,Honeywellreceivedadeclination
letterfromtheDepartmentofJusticestatingthatitwouldnotpursueanycriminalprosecutionoftheCompanyoritsemployees.Thismatterisnow
fullyresolved.

Given the uncertainty inherent in litigation and investigations (including the specific matters referenced above), we do not believe it is
possibletodevelopestimatesofreasonablypossiblelossinexcessofcurrentaccrualsforthesematters(otherthanasspecificallysetforthabove).
Consideringourpastexperienceandexistingaccruals,wedonotexpecttheoutcomeofthesematters, eitherindividuallyorin theaggregate,to
haveamaterialadverseeffectonourconsolidatedfinancialposition.Becausemostcontingenciesareresolvedoverlongperiodsoftime,potential
liabilities are subject to change due to new developments, changes in settlement strategy or the impact of evidentiary requirements, which could
causeustopaydamageawardsorsettlements(orbecomesubjecttoequitableremedies)thatcouldhaveamaterialadverseeffectonourresults
ofoperationsoroperatingcashflowsintheperiodsrecognizedorpaid.
21
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

ThefollowingMD&AisintendedtohelpthereaderunderstandtheresultsofoperationsandfinancialconditionofHoneywellInternational
Inc. and its consolidated subsidiaries (Honeywell or the Company) for the three (quarter) and six months ended June 30, 2017. The financial
information asofJune30,2017shouldbereadinconjunction withtheconsolidated financialstatements for theyear endedDecember 31,2016
containedinour2016AnnualReportonForm10-K.
A. Results of Operations three and six months ended June 30, 2017 compared with the three and six months ended June 30, 2016
Net Sales

June 30, June 30,
2017 2016 2017 2016
Netsales $ 10,078 $ 9,991 $ 19,570 $ 19,513
%changecomparedwithpriorperiod 1% -
Thechangeinnetsalescomparedtotheprioryearperiodisattributabletothefollowing:
Three Months Year to Date

Volume 3% 2%
ForeignCurrencyTranslation (1)% (1)%
Acquisitions/Divestitures (1)% (1)%
1% -
A discussion of net sales by segment can be found in the Review of Business Segments section of this MD&A. The foreign currency
translationimpactinthequarterandsixmonthsisprimarilydrivenbytheweakeningoftheBritishPoundandEuroagainsttheU.S.Dollar.
Cost of Products and Services Sold

June 30, June 30,
2017 2016 2017 2016
Costofproductsandservicessold $ 6,850 $ 6,821 $ 13,206 $ 13,368
%changecomparedwithpriorperiod - (1)%

GrossMarginpercentage 32.0% 31.7% 32.5% 31.5%
Costofproductsandservicessoldwereflatinthequarterprimarilyduetolowerlaborcostsofapproximately$140million(drivenprimarily
by divestitures, net of acquisitions, and productivity, net of inflation) and decreased indirect material costs of approximately $40 million (driven
primarilybyproductivity,netofinflation),partiallyoffsetbyhigherorganicsalesvolumesthatalsodroveincreaseddirectmaterialsofapproximately
$140million(partiallyoffsetbyproductivity,netofinflation)andhigherrepositioningandotherchargesofapproximately$95million.
Cost of products and services sold decreased in the six months primarily due to lower labor costs of approximately $280 million (driven
primarily by divestitures, net of acquisitions, and productivity, net of inflation) and decreased indirect material costs of approximately $90 million
(driven primarily by productivity, net of inflation), partially offset by higher organic sales volumes that also drove increased direct materials of
approximately$130million(partiallyoffsetbyproductivity,netofinflation)andhigherrepositioningandotherchargesofapproximately$125million.
22
Gross margin percentage increased in the quarter primarily due to higher gross margin in Aerospace and Performance Materials and
Technologies(approximately1.7percentagepointimpactcollectively),partiallyoffsetbyhigherrepositioningandotherchargesallocatedtocostof
productsandservicessold(approximately0.9percentagepointimpact)andlowergrossmargininHomeandBuildingTechnologiesandSafetyand
ProductivitySolutions(approximately0.5percentagepointimpactcollectively).
GrossmarginpercentageincreasedinthesixmonthsprimarilyduetohighergrossmargininAerospaceandPerformanceMaterialsand
Technologies(approximately1.8percentagepointimpactcollectively),partiallyoffsetbyhigherrepositioningandotherchargesallocatedtocostof
productsandservicessold(approximately0.6percentagepointimpact)andlowergrossmargininHomeandBuildingTechnologiesandSafetyand
ProductivitySolutions(approximately0.3percentagepointimpactcollectively).

Selling, General and Administrative Expenses

June 30, June 30,
2017 2016 2017 2016
Selling,generalandadministrativeexpense $ 1,381 $ 1,329 $ 2,730 $ 2,609
Percentofsales 13.7% 13.3% 13.9% 13.4%
Selling, general and administrative expenses increased in the quarter and six months primarily driven by an increase in labor costs
(primarilyattributedtoacquisitions,netofdivestitures,investmentforgrowthandmeritincreases),partiallyoffsetbybenefitsfromrestructuringand
lowerallocationstoselling,generalandadministrativeexpensesofrepositioningandothercharges.

Tax Expense

June 30, June 30,
2017 2016 2017 2016

Taxexpense $ 378 $ 428 $ 770 $ 830
Effectivetaxrate 21.3% 24.4% 22.0% 24.5%
The effective tax rate decreased in the quarter primarily driven by increased tax benefits for employee share-based payments and the
resolutionofvariousU.S.taxmatters,partiallyoffsetbyincreasedexpenseforreserves.

Theeffectivetaxratedecreasedforthesixmonthsprimarilydrivenbyincreasedtaxbenefitsforemployeeshare-basedpaymentsandthe
resolutionoftaxmatterswithcertainjurisdictions,partiallyoffsetbyincreasedexpenseforreservesandtaxesontheunremittedearningsofcertain
foreignaffiliatesthatarenotdeemedpermanentlyreinvested.

TheeffectivetaxratesforthequarterandsixmonthsendedJune30,2017and2016werelowerthantheU.S.federalstatutoryrateof35%
resultinginpartfromnon-U.S.earningstaxedatlowerrates,thevastmajorityofwhichweintendtopermanentlyreinvestoutsidetheUnitedStates,
andfrombenefitsfrommanufacturingincentives.

TheCompany currently expects the effective tax rate for 2017 to be approximately 24%. The effective tax rate can vary from quarter to
quarterforunusualorinfrequentlyoccurringitems,theresolutionofincometaxaudits,changesintaxlawsorotheritemssuchaspensionmark-to-
marketadjustmentsandthetaximpactfromemployeeshare-basedpayments.
23
Net Income Attributable to Honeywell

June 30, June 30,
2017 2016 2017 2016


Earningspershareofcommonstockassumingdilution $ 1.80 $ 1.70 $ 3.51 $ 3.26
Earningspershareofcommonstockassumingdilutionincreasedinthequarterandsixmonthsprimarily drivenbyincreasedsegment
profit in each of our business segments, a lower effective tax rate and higher pension income, partially offset by higher repositioning and other
charges.
Review of Business Segments

June 30, June 30,
% %
2017 2016 Change 2017 2016 Change

AerospaceSales
CommercialAviationOriginalEquipment $ 641 $ 676 (5)% $ 1,252 $ 1,377 (9)%
CommercialAviationAftermarket 1,262 1,207 5% 2,463 2,355 5%
DefenseandSpace 983 1,096 (10)% 1,933 2,165 (11)%
TransportationSystems 788 800 (2)% 1,572 1,587 (1)%
TotalAerospaceSales 3,674 3,779 7,220 7,484

HomeandBuildingTechnologiesSales
HomeandBuildingProducts 1,527 1,499 2% 2,968 2,897 2%
HomeandBuildingDistribution 1,209 1,177 3% 2,321 2,256 3%
TotalHomeandBuildingTechnologiesSales 2,736 2,676 5,289 5,153

PerformanceMaterialsandTechnologiesSales
UOP 641 614 4% 1,218 1,182 3%
ProcessSolutions 867 886 (2)% 1,692 1,723 (2)%
AdvancedMaterials 731 934 (22)% 1,398 1,810 (23)%
TotalPerformanceMaterialsandTechnologies
Sales 2,239 2,434 4,308 4,715

SafetyandProductivitySolutionsSales
Safety 529 524 1% 1,050 1,032 2%
ProductivitySolutions 900 578 56% 1,703 1,129 51%
TotalSafetyandProductivitySolutionsSales 1,429 1,102 2,753 2,161

NetSales $ 10,078 $ 9,991 $ 19,570 $ 19,513
24
Aerospace

June 30, June 30,
% %
2017 2016 Change 2017 2016 Change

Netsales $ 3,674 $ 3,779 (3)% $ 7,220 $ 7,484 (4)%
Costofproductsandservicessold 2,579 2,757 5,047 5,439
Selling,generalandadministrativeandother
expenses 276 231 558 456
Segmentprofit $ 819 $ 791 4% $ 1,615 $ 1,589 2%
2017 vs. 2016

June 30, June 30,
Segment Segment
Factors Contributing to Year-Over-Year Change Sales Profit Sales Profit
Organicgrowth/Operationalsegmentprofit 2% 7% - 5%
Foreigncurrencytranslation (1)% (1)% (1)% (1)%
Acquisitions,divestituresandother,net (4)% (2)% (3)% (2)%
Total%Change (3)% 4% (4)% 2%
Aerospace sales decreased in the quarter and six months ended June 30, 2017 primarily due to the government services business
divestitureandtheunfavorableimpactofforeigncurrencytranslation,partiallyoffsetbyorganicsalesgrowth.
CommercialOriginalEquipmentsalesdecreased5%(decreased5%organic)inthequarteranddecreased9%(decreased8%organic)
in the six months primarily due to continued weakness inthe business aviation market, whichdrove lower shipments tobusiness jet
originalequipmentmanufacturers(OEMs),asexpected,andhigherincentivestooriginalequipmentmanufacturers(OEMincentives).
CommercialAftermarketsalesincreased5%(increased5%organic)inthequarterandincreased5%(increased4%organic)inthesix
monthsdrivenprimarilybyhigherrepairandoverhaulactivitiesandincreasedsparesshipmentstoairtransportandregionalcustomers.
DefenseandSpacesalesdecreased10%(increased2%organic)inthequarteranddecreased11%(increased1%organic)inthesix
monthsprimarilyduetothegovernmentservicesbusinessdivestiture.Organicsalesincreasedinthequarterandsixmonthsprimarily
duetogrowthinourU.S.defensebusiness,offsetbylowersalesinourcommercialhelicopterandspacebusinesses.
TransportationSystemssalesdecreased2%(increased1%organic)inthequarteranddecreased1%(increased1%organic)inthesix
monthsprimarilyduetolowerdieselturbovolumesandtheunfavorableimpactofforeigncurrencytranslation,partiallyoffsetbyhigher
commercialvehiclevolumesandgasturbopenetration.
Aerospacesegmentprofitincreasedinthequarterandsixmonthsdrivenprimarilybyanincreaseinoperationalsegmentprofit,offsetbythe
governmentservicesbusinessdivestitureandtheunfavorableimpactofforeigncurrencytranslation.Theincreaseinoperationalsegmentprofitis
driven primarily by restructuring benefits, higher organic sales volume, partially offset by inflation. Cost of products and services sold decreased
primarilyduetothegovernmentservicesbusinessdivestiture,restructuringbenefitsandproductivity,netofinflation.
25
Home and Building Technologies

June 30, June 30,
2017 2016 % Change 2017 2016 % Change
Netsales $ 2,736 $ 2,676 2% $ 5,289 $ 5,153 3%
expenses 461 479 913 939
Segmentprofit $ 420 $ 412 2% $ 809 $ 772 5%
2017 vs. 2016

June 30, June 30,
Segment Segment
Organicgrowth/Operationalsegmentprofit 4% 3% 4% 6%
Acquisitionsanddivestitures,net 1% 1%
Total%Change 2% 2% 3% 5%
HomeandBuildingTechnologies salesincreased inthequarter andsixmonths endedJune30,2017primarily driven byorganic growth

partiallyoffsetbytheunfavorableimpactofforeigncurrencytranslation.
SalesinHomeandBuildingProductsincreased2%(increased4%organic)inthequarterandincreased2%(increased3%organic)in
thesixmonthsprimarilyduetoorganicsalesgrowthpartiallyoffsetbytheunfavorableimpactofforeigncurrencytranslation.Organic
salesgrowthinthequarterandinthesixmonthswasdrivenbysalesgrowthinSecurityandFire,EnvironmentalandEnergySolutions,
andSmartEnergy.
SalesinHomeandBuildingDistributionincreased3%(increased4%organic)inthequarterandincreased3%(increased4%organic)
inthesixmonthsprimarilyduetoorganicsalesgrowthpartiallyoffsetbytheunfavorableimpactofforeigncurrencytranslation.Organic
salesgrowthinthequarterandsixmonthswasdrivenbyincreasedgrowthintheglobaldistributionbusiness.
HomeandBuildingTechnologiessegmentprofitincreasedinthequarterandsixmonthsduetohigheroperationalsegmentprofitpartially
offsetbytheunfavorableimpactofforeigncurrencytranslation.Theincreaseinoperationalsegmentprofitisprimarilyduetothepositiveimpactof
productivity,net of inflation, offset by the unfavorable impact of product mix. Cost of products and services sold increased in the quarter andsix
monthsprimarilyduetohigherorganicsalesvolumespartiallyoffsetbytheimpactofforeigncurrencytranslation.
26
Performance Materials and Technologies

June 30, June 30,
% %
2017 2016 Change 2017 2016 Change
Netsales $ 2,239 $ 2,434 (8)% $ 4,308 $ 4,715 (9)%
expenses 294 301 577 593
Segmentprofit $ 524 $ 520 1% $ 995 $ 981 1%
2017 vs. 2016

June 30, June 30,
Segment Segment

Acquisitionsanddivestitures,net (13)% (6)% (13)% (8)%
Total%Change (8%) 1% (9%) 1%
PerformanceMaterialsandTechnologiessalesdecreasedinthequarterandsixmonthsendedJune30,2017duetodivestituresandthe
unfavorableimpactofforeigncurrencytranslation,partiallyoffsetbygrowthinorganicsalesvolumes.

UOPsalesincreased4%(increased6%organic)inthequarterandincreased3%(increased5%organic)inthesixmonthsdrivenprimarily
byhighergasprocessingprojectrevenuesandhigherequipmentrevenuesinthequarter,partiallyoffsetbydecreasedlicensingrevenue.

Process Solutions sales decreased 2% (decreased 1% organic) in the quarter and decreased 2% (flat organic) in the six months driven
primarilybydecreasedrevenuesinprojectsandlowerfieldproductsales,partiallyoffsetbyhigherrevenueinservicesandsoftware.
AdvancedMaterialssalesdecreased22%(increased12%organic)inthequarteranddecreased23%(increased12%organic)inthesix
monthsdrivenprimarilybythespin-offoftheformerresinsandchemicalsbusiness,partiallyoffsetbyincreasedfluorineproductsvolumes.
PerformanceMaterialsandTechnologiessegmentprofitincreasedinthequarterandsixmonthsduetoanincreaseinoperationalsegment
profit, partially offset by divestitures and the unfavorable impact of foreign currency translation. The increase in operational segment profit is
primarily due to productivity, net of inflation, higher organic sales volume and pricing, partially offset by unfavorable product mix and continued
investmentsforgrowth.Costofproductsandservicessolddecreasedinthequarterandsixmonthsprimarilyduetodivestituresandproductivity,
netofinflation,partiallyoffsetbyhigherorganicsalesvolumes.
27
Safety and Productivity Solutions

June 30, June 30,
% %
2017 2016 Change 2017 2016 Change

Netsales $ 1,429 $ 1,102 30% $ 2,753 $ 2,161 27%
Costofproductsandservicessold 942 707 1,806 1,397
expenses 273 222 539 441
Segmentprofit $ 214 $ 173 24% $ 408 $ 323 26%
2017 vs. 2016

June 30, June 30,
Segment Segment

Foreignexchange (1)% (3)% (1)% (2)%
Acquisitionsanddivestitures,net 30% 18% 26% 11%
Total%Change 30% 24% 27% 26%
Safety and Productivity Solutions sales increased in the quarter and six months ended June 30, 2017 primarily due to growth from
acquisitionsandincreasedorganicsalesvolumepartiallyoffsetbytheunfavorableimpactofforeigncurrencyexchange.

Salesin Safety increased 1% (increased 2% organic) in the quarter and increased 2% (increased 3% organic) in the six months due to
increasedsalesvolumeintheIndustrialSafety business,partially offsetbylowervolumeinRetail,andtheunfavorableimpact offoreign
currencytranslation.

SalesinProductivitySolutionsincreased56%(decreased1%organic)inthequarterandincreased51%(increased1%organic)inthesix
monthsprimarilyduetogrowthfromacquisitions(Intelligrated).

Safety andProductivity Solutions segment profit increased in the quarter and six months primarily due to increase from acquisitions and
operationalsegmentprofit.Theincreaseinoperationalsegmentprofitforthequarterandsixmonthisdrivenbyhigherproductivity,netofinflation,
andsalesvolume.Costofproductsandservicessoldincreasedprimarilyduetoacquisitions.
Repositioning and Other Charges
Ourrepositioningactionsareexpectedtogenerateincrementalpretaxsavingsof$250millionto$350millionin2017comparedwith2016
primarilyfromplannedworkforcereductions.Cashspendingrelatedtoourrepositioningactionswas$94millioninthesixmonthsendedJune30,
2017andwasfundedthroughoperatingcashflows.Weexpectcashspendingforrepositioningactionstobeapproximately$225millionin2017and
tobefundedthroughoperatingcashflows.
28
B. Liquidity and Capital Resources
Cash Flow Summary
Six Months Ended

June 30,
2017 2016
Cashprovidedby(usedfor):
Operatingactivities $ 2,387 $ 1,902
Investingactivities (992) (1,542)
Financingactivities (1,583) (821)
Effectofexchangeratechangesoncash 222 51
Netincrease(decrease)incashandcashequivalents $ 34 $ (410)
Cashprovidedbyoperatingactivitiesincreasedby$485millionprimarilydueto(i)a$309millionfavorableimpactfromworkingcapital,(ii)
an increase in net income of $179 million and (iii) a $73 million improvement in customer advances and deferred income, partially offset by
increasedcashtaxpaymentsof$252million.
Cash used for investing activities decreased by $550 million primarily due to a decrease in cash paid for acquisitions of $1,069 million,
partiallyoffsetbyanet$452millionincreaseininvestments,primarilyshorttermmarketablesecurities,andanincreaseof$165millioninsettlement
paymentsofforeigncurrencyexchangecontractsusedaseconomichedgesoncertainnon-functionalcurrencydenominatedmonetaryassetsand
liabilities.
Cashusedforfinancingactivitiesincreasedby$762millionprimarilyduetoadecreaseinthenetproceedsfromdebtissuancesof$1,592
millionandanincreaseincashdividendspaidof$92million,partiallyoffsetbyadecreaseinnetrepurchasesofcommonstockof$774millionand
theacquisitionin2016oftheremaining30%noncontrollinginterestofUOPRussellLLCof$238million.
Liquidity

TheCompanycontinuestomanageitsbusinessestomaximizeoperatingcashflowsastheprimarysourceofliquidity.Inadditiontoour
availablecashandoperatingcashflows,additionalsourcesofliquidityincludecommittedcreditlines,short-term debtfromthecommercialpaper
market,long-termborrowings,aswellasaccesstothepublicdebtandequitymarkets.Wecontinuetobalanceourcashandfinancingusesthrough
investmentinourexistingcorebusinesses,debtreduction,acquisitionactivity,sharerepurchasesanddividends.
We continuously assess the relative strength of each business in our portfolio as to strategic fit, market position, profit and cash flow
contribution in order to upgrade our combined portfolio and identify business units that will most benefit from increased investment. We identify
acquisitioncandidatesthatwillfurtherourstrategicplanandstrengthenourexistingcorebusinesses.Wealsoidentifybusinessunitsthatdonotfit
into our long-term strategic plan based on their market position, relative profitability or growth potential. These businesses are considered for
potentialdivestiture,restructuringorotherrepositioningactionssubjecttoregulatoryconstraints.

In 2017, we are not required to make contributions to our U.S. pension plans. We plan to make contributions of cash and/or marketable
securities of approximately $130 million ($89 million of marketable securities were contributed in January 2017) to our non-U.S. plans in 2017 to
satisfyregulatoryfundingrequirements.ThetimingandamountofcontributionstobothourU.S.andnon-U.S.plansmaybeimpactedbyanumber
offactors,includingthefundedstatusoftheplans.

InthethreemonthsendedJune30,2017,theCompanyrepurchased$682millionofoutstandingshares.UndertheCompanyspreviously
approved $5 billion share repurchase program, $3.1 billion remained available as of June 30, 2017 for additional share repurchases. Honeywell
presently expects to repurchase outstanding shares from time to time to offset the dilutive impact over the long-term of employee stock-based
compensationplans,includingfutureoptionexercises,restrictedunitvestingandmatchingcontributionsunderoursavingsplans.Theamountand
timingoffuturerepurchasesmayvarydependingonmarketconditionsandthelevelofoperating,financingandotherinvestingactivities.
29
C. Other Matters
Litigation
Wearesubjecttoanumberoflawsuits,investigationsandclaims(someofwhichinvolvesubstantialamounts)arisingoutoftheconductof
ourbusiness.SeeNote12CommitmentsandContingenciesofNotestoConsolidatedFinancialStatementsforfurtherdiscussionofenvironmental,
asbestosandotherlitigationmatters.
CriticalAccountingPolicies
ThefinancialinformationasofJune30,2017shouldbereadinconjunctionwiththeconsolidatedfinancialstatementsfortheyearended
December31,2016containedinour2016AnnualReportonForm10-K.
ForadiscussionoftheCompanyscriticalaccountingpolicies,seeItem7.ManagementsDiscussionandAnalysisofFinancialCondition
andResultsofOperationsinour2016AnnualReportonForm10-K.
RecentAccountingPronouncements
See Note 2 Recent Accounting Pronouncements of Notes to Consolidated Financial Statements for a discussion of recent accounting
pronouncements.
Item3. QuantitativeandQualitativeDisclosuresAboutMarketRisks
For a discussion of the Companys quantitative and qualitative disclosures about market risks, see Item 7A. Quantitative and Qualitative
Disclosures About Market Risks, in our 2016 Annual Report on Form 10-K. As of June 30, 2017, there has been no material change in this
information.
Item4. ControlsandProcedures
Honeywellmanagement,includingtheChiefExecutiveOfficerandChiefFinancialOfficer,conductedanevaluationoftheeffectivenessof
our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of1934,as
amended (Exchange Act)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Chief
ExecutiveOfficerandtheChiefFinancialOfficerconcludedthatsuchdisclosurecontrolsandprocedureswereeffectiveasoftheendoftheperiod
coveredbythisQuarterlyReportonForm10-QtoensureinformationrequiredtobedisclosedinthereportsthatHoneywellfilesorsubmitsunder
theExchangeActisrecorded,processed,summarized,andreportedwithinthetimeperiodsspecifiedintheSecuritiesandExchangeCommission
rulesandforms,andthatitisaccumulatedandcommunicatedtoourmanagement,includingourChiefExecutiveOfficer,ourChiefFinancialOfficer,
and our Controller, as appropriate, to allow timely decisions regarding required disclosure. There have been no changes that have materially
affected, or are reasonably likely to materially affect, Honeywells internal control over financial reporting that have occurred during the period
coveredbythisQuarterlyReportonForm10-Q.
30
Part II. Other Information
Item1. LegalProceedings
GeneralLegalMatters
Wearesubjecttoanumberoflawsuits,investigationsandclaims(someofwhichinvolvesubstantialamounts)arisingoutoftheconductof
our business. See Note 12 Commitments and Contingencies of Notes to Consolidated Financial Statements for a discussion of environmental,
asbestosandotherlitigationmatters.
EnvironmentalMattersInvolvingPotentialMonetarySanctionsinExcessof$100,000
None.
Item2. UnregisteredSalesofEquitySecuritiesandUseofProceeds
Honeywell purchased 5,150,000 shares of its common stock, par value $1 per share, in the quarter ended June 30, 2017. Under the
Companys previously approved $5 billion share repurchase program, $3.1 billion remained available as of June 30, 2017 for additional share
repurchases.ThefollowingtablesummarizesHoneywellspurchaseofitscommonstockforthequarterendedJune30,2017:
Issuer Purchases of Equity Securities

(a) (b) (c ) (d)
Total Number Approximate Dollar
of Shares Value of Shares that
Total Purchased as May Yet be Purchased
Number of Average Part of Publicly Under Plans or
Shares Price Paid Announced Plans Programs
Period Purchased per Share or Programs (Dollars in millions)
May2017 2,600,000 $131.25 2,600,000 $3,426
June2017 2,550,000 $133.51 2,550,000 $3,085

Item5. OtherInformation
IranThreatReductionandSyrianHumanRightsActof2012

UndertheIranThreatReductionandSyrianHumanRightsActof2012,whichaddedSection13(r)oftheSecuritiesExchangeActof1934,
Honeywellisrequired todiscloseinitsperiodicreports ifitoranyofitsaffiliates knowinglyengagedincertainactivities, transactions ordealings
relating toIran orwithentities orindividuals designated pursuant tocertain Executive Orders. Allofouractivities inIranduringthethreemonths
ended June 30, 2017, including the activities disclosed below, were conducted by our non-U.S. subsidiaries under General License H, (ii) under
GeneralLicenseI,or(iii)underaspecificlicenseissuedbyU.S.TreasurysOfficeofForeignAssetsControl(OFAC),andotherwiseincompliance
withallapplicablelaws,includingsanctionsregulationsadministeredbyOFAC.

InthethreemonthsendedJune30,2017,thenon-U.S.subsidiariesofourUOPbusiness,partofPerformanceMaterialsandTechnologies,
engagedinthefollowingactivitiesrelatedtoIransoil,gasand/orpetrochemicalsectors:

DeliveredservicestoIraniancounterpartiespursuanttonewandexistingcontracts,whichresultedinrevenueofapproximately$8.8million
(expectedtotalvalueofthesecontractsisapproximately$66.2million).

Soldnon-U.S.originproductstonon-U.S.third-partiesforend-useinIranpursuanttonewandexistingcontracts,whichresultedinrevenue
ofapproximately$1.4million(expectedtotalvalueofthesecontractsisapproximately$1.9million).
31
In the three months ended June 30, 2017, the Process Solutions business, part of Performance Materials and Technologies, sold
approximately$0.1millionofnon-U.S.originproductstodistributors(includinganIraniandistributor)foruseinthegasdistributionsectorinIran.
WeintendtocontinuedoingbusinessinIranunderGeneralLicensesHandIorunderaspecificlicenseissuedbyOFAC,andotherwisein
compliancewithallapplicablelaws.SuchactivitiesmayrequireadditionaldisclosurepursuanttoSection13(r)oftheAct.
Item6. Exhibits
(a) SeetheExhibitIndexonpage34ofthisQuarterlyReportonForm10-Q.
32
SIGNATURES

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonitsbehalfby
theundersignedthereuntodulyauthorized.
HoneywellInternationalInc.

Date:July21,2017 By: /s/JenniferH.Mak
JenniferH.Mak
VicePresidentandController
(onbehalfoftheRegistrant
andastheRegistrants
PrincipalAccountingOfficer)
33
EXHIBIT INDEX
Exhibit
No. Description

10.1* 364-Day CreditAgreement, datedasofApril28,2017,amongHoneywellInternational Inc., thebanks, financialinstitutions and
other institutional lenders parties thereto, Citibank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication
agent, Bankof America, N.A., BarclaysBankPLC,Deutsche BankSecurities Inc., Goldman SachsBankUSA,Morgan Stanley
MUFGLoanPartners,LLCandWellsFargoBank,NationalAssociation,asdocumentationagents,andCitigroupGlobalMarkets
Inc.andJPMorganChaseBank,N.A.,asjointleadarrangersandco-bookmanagers(incorporatedbyreferencetoExhibit10.1to
HoneywellsForm8-KfiledApril28,2017)

10.2* AmendmentNo.3,datedasofApril28,2017,totheAmendedandRestatedFiveYearCreditAgreementdatedasofJuly10,
2015,asamendedbyAmendmentNo.1datedasofSeptember30,2015andthatcertainAmendmentNo.2datedasofApril29,
2016,amongHoneywellInternationalInc.,thebanks,financialinstitutionsandotherinstitutionallenderspartiesthereto,Citibank,
N.A., as administrative agent, Citibank International Limited, as swing line agent, JPMorgan Chase Bank, N.A., as syndication
agent, Bankof America, N.A., BarclaysBankPLC,Deutsche BankSecurities Inc., Goldman SachsBankUSA,MorganStanley
MUFGLoanPartners,LLCandWellsFargoBank,NationalAssociation,asdocumentationagents,andCitigroupGlobalMarkets
Inc.andJ.P.MorganSecuritiesLLC,asjointleadarrangersandco-bookmanagers(incorporatedbyreferencetoExhibit10.2to
HoneywellsForm8-KfiledApril28,2017)

11 ComputationofPerShareEarnings(1)

12 ComputationofRatioofEarningstoFixedCharges(filedherewith)

31.1 CertificationofPrincipalExecutiveOfficerPursuanttoSection302oftheSarbanes-OxleyActof2002(filedherewith)

31.2 CertificationofPrincipalFinancialOfficerPursuanttoSection302oftheSarbanes-OxleyActof2002(filedherewith)

32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-OxleyActof2002(filedherewith)

32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-OxleyActof2002(filedherewith)

101.INS XBRLInstanceDocument(filedherewith)

101.SCH XBRLTaxonomyExtensionSchema(filedherewith)

101.CAL XBRLTaxonomyExtensionCalculationLinkbase(filedherewith)

101.DEF XBRLTaxonomyExtensionDefinitionLinkbase(filedherewith)

101.LAB XBRLTaxonomyExtensionLabelLinkbase(filedherewith)

101.PRE XBRLTaxonomyExtensionPresentationLinkbase(filedherewith)

(1) DatarequiredisprovidedinNote4EarningsPerShareofNotestoConsolidatedFinancialStatements.

*TheExhibitsidentifiedabovewithanasterisk(*)aremanagementcontractsorcompensatoryplansorarrangements.
34
EXHIBIT 12

HONEYWELL INTERNATIONAL INC.
STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Six Months Ended
June 30, 2017

Determination of Earnings:
Incomebeforetaxes $ 3,502
Add(Deduct):
Amortizationofcapitalizedinterest 10
Fixedcharges 175
Equityincome,netofdistributions (17)
Total earnings, as defined $ 3,670

Fixed Charges:
Rents(a) $ 21
Interestandotherfinancialcharges 154
175
Capitalizedinterest 7
Total fixed charges $ 182
Ratio of Earnings to Fixed Charges 20.16

(a) Denotestheequivalentofanappropriateportionofrentalsrepresentativeoftheinterestfactoronallrentalsother
thanforcapitalizedleases.

EXHIBIT 31.1

CERTIFICATION PURSUANT TO
SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I,DariusAdamczyk,PresidentandChiefExecutiveOfficer,certifythat:
1. IhavereviewedthisQuarterlyReportonForm10-QofHoneywellInternationalInc.;

2. Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessaryto
makethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiod
coveredbythisreport;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4. TheregistrantsothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefined
inExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting(asdefinedinExchangeActRules13a-15(f)
and15d-15(f))fortheregistrantandhave:

a) designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobedesignedunderour
supervision,toensurethatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknownto
usbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b) designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontroloverfinancialreportingtobedesignedunder
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples;

c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions
abouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuch
evaluation;and

d) disclosedinthisreportanychangeintheregistrants internalcontroloverfinancialreportingthatoccurredduringtheregistrants
most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonablylikelytomateriallyaffect,theregistrantsinternalcontroloverfinancialreporting;

5. TheregistrantsothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,
totheregistrantsauditorsandtheauditcommitteeoftheregistrantsboardofdirectors(orpersonsperformingtheequivalentfunctions):

a) allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreportingwhichare
reasonablylikelytoadverselyaffecttheregistrantsabilitytorecord,process,summarizeandreportfinancialinformation;and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants
internalcontroloverfinancialreporting.
Date:July21,2017 By: /s/DariusAdamczyk

DariusAdamczyk
PresidentandChiefExecutiveOfficer

EXHIBIT 31.2

SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I,ThomasA.Szlosek,SeniorVicePresidentandChiefFinancialOfficer,certifythat:
1. IhavereviewedthisQuarterlyReportonForm10-QofHoneywellInternationalInc.;

2. Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessaryto
makethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiod
coveredbythisreport;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4. TheregistrantsothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefined
inExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting(asdefinedinExchangeActRules13a-15(f)
and15d-15(f))fortheregistrantandhave:

a) designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedures tobedesignedunderour
supervision,toensurethatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknownto
usbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b) designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontroloverfinancialreportingtobedesignedunder
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples;

c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions
abouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuch
evaluation;and

d) disclosedinthis report anychangeintheregistrants internalcontrol overfinancial reporting thatoccurredduringtheregistrants
most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, oris
reasonablylikelytomateriallyaffect,theregistrantsinternalcontroloverfinancialreporting;

5. TheregistrantsothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,
totheregistrantsauditorsandtheauditcommitteeoftheregistrantsboardofdirectors(orpersonsperformingtheequivalentfunctions):

e) allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreportingwhichare
reasonablylikelytoadverselyaffecttheregistrantsabilitytorecord,process,summarizeandreportfinancialinformation;and

a) anyfraud, whether or not material, that involves management or other employees who have a significant role in the registrants
internalcontroloverfinancialreporting.
Date:July21,2017 By: /s/ThomasA.Szlosek

ThomasA.Szlosek
SeniorVicePresidentandChiefFinancialOfficer

EXHIBIT 32.1

18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

InconnectionwiththeQuarterlyReportofHoneywellInternationalInc.(theCompany)onForm10-QfortheperiodendedJune30,2017asfiled
withtheSecuritiesandExchangeCommissiononthedatehereof(theReport),I,DariusAdamczyk, PresidentandChiefExecutiveOfficerofthe
Company,certify,pursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002,that:
(1) TheReportfullycomplieswiththerequirementsofSection13(a)or15(d)oftheSecuritiesExchangeActof1934;and

(2) TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresultsofoperationsof
theCompany.
Date:July21,2017 By: /s/DariusAdamczyk

DariusAdamczyk
PresidentandChiefExecutiveOfficer

EXHIBIT 32.2

18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

InconnectionwiththeQuarterlyReportofHoneywellInternationalInc.(theCompany)onForm10-QfortheperiodendedJune30,2017asfiled
with theSecurities andExchangeCommission onthedatehereof(the Report), I, ThomasA.Szlosek,SeniorVicePresident andChiefFinancial
OfficeroftheCompany,certify,pursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002,that:
(1) TheReportfullycomplieswiththerequirementsofSection13(a)or15(d)oftheSecuritiesExchangeActof1934;and

(2) TheinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresultsofoperationsof
theCompany.
Date:July21,2017 By: /s/ThomasA.Szlosek

ThomasA.Szlosek
SeniorVicePresidentandChiefFinancialOfficer

Honeywell International-20170721 - ForM 10-Q Filing For PD Ending 063017

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HONEYWELL INTERNATIONAL INC

Filed 07/21/17 for the Period Ending 06/30/17

Address 115 TABOR ROAD

Honeywell International Inc.

Inaddition,weexpectrevenuesforourmechanicalserviceprograms atourAerospacebusinesstobeimpacted.Ourcurrent policyisto

Three Months Ended Six Months Ended

June 30, December 31,

June 30, December 31,

Note 7. Long-term Debt and Credit Agreements

June 30, December 31,

Note 8. Financial Instruments and Fair Value Measures

June 30, December 31,

June 30, 2017 December 31, 2016

Note 9. Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated Other Comprehensive Income by Component

Note 10. Segment Financial Data

Three Months Ended Six Months Ended

Note 11. Pension Benefits

Note 12. Commitments and Contingencies

June 30, December 31,

Asbestos Related Liabilities

Bendix NARCO Total

Insurance Recoveries for Asbestos Related Liabilities

Bendix NARCO Total

June 30, December 31,

June 30, December 31,

Years Ended December 31,

Three Months Ended Six Months Ended

Three Months Year to Date

Cost of Products and Services Sold

Three Months Ended Six Months Ended

Three Months Ended Six Months Ended

Three Months Ended Six Months Ended

Three Months Ended Six Months Ended

Review of Business Segments

Three Months Ended Six Months Ended

Three Months Ended Six Months Ended

2017 vs. 2016

Three Months Ended Six Months Ended

2017 vs. 2016

HomeandBuildingTechnologies salesincreased inthequarter andsixmonths endedJune30,2017primarily driven byorganic growth

Three Months Ended Six Months Ended

2017 vs. 2016

Three Months Ended Six Months Ended

2017 vs. 2016

Repositioning and Other Charges

Cash Flow Summary

Six Months Ended

Issuer Purchases of Equity Securities

Ratio of Earnings to Fixed Charges 20.16

Date:July21,2017 By: /s/DariusAdamczyk

Date:July21,2017 By: /s/ThomasA.Szlosek

Date:July21,2017 By: /s/DariusAdamczyk

Date:July21,2017 By: /s/ThomasA.Szlosek

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