Honeywell International Inc. (HON) 2018年年度報告「NYSE」.pdf

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1、2 0 1 8A N N U A LR E P O R T2018 Shareowners LetterOur 2018 financial performance was excellent with 6%organic sales growth,60 basis points ofmargin expansion,22%growth in adjusted free cash flow,and 100%adjusted free cash flowconversion.In addition,we flawlessly executed two very complex spins,res

2、ulting in the launch of twooutstanding companies in Garrett and Resideo.Despite these achievements,our total shareownerreturn(TSR)was-8%due to the late-year volatility we saw in the stock market.It never feels good tosee negative returns,although we substantially outperformed our multi-industry peer

3、s(-25%TSR)andthe Industrial Select Sector SPDR ETF(XLI)(-13%TSR).Our performance in 2018 demonstrated thatyou can continue to depend on Honeywell to deliver regardless of how the broader market performs.The graphic below shows that Honeywell outperformed the XLI during 9 of the past 10 years,often b

4、ysubstantial amounts.If you are looking for results that beat the market on a consistent basis,Honeywellis a great place to invest!TSR Delta Between HON and XLI Performance2%12%6%5%6%1%10%-5%11%5%09101112131415161718Update on Three Priorities from the 2017 Shareowners LetterIn last years letter,I ta

5、lked about three priorities for 2018:1.Drive free cash flow and cash conversion2.Build a software/sensor strategy into everything we develop3.Take even bolder bets in our new product developmentFree cash flow and cash conversion is a strong story for Honeywell.We have driven the focuson the balance

6、sheet with clear accountability throughout the organization,which led to enhanced cashgeneration in 2018 including 100%adjusted free cash conversion as shown in the table on the nextpage.While I am proud of what we have accomplished to date,we still have substantial opportunity inthis area and will

7、pursue improvements with similar rigor in 2019 and beyond.Key Cash/Working Capital Metrics,2016-2018201620172018Year Over Year AdjustedFree Cash Flow Growth-1%12%22%Adjusted Free Cash FlowConversion86%89%100%Working Capital Turns6.66.87.4Software and sensor strategies are now fully incorporated into

8、 our new product developmentprocess,and these align with the requirements from our Connected Enterprise offerings in Aircraft,Buildings,Plant,Workflow,and Cyber.Before a connected offering either software or hardware isapproved for R&D investment,it must satisfy todays customer needs and allow for e

9、nhancements aswe anticipate future customer needs.We are proud of our new product development pipeline,which we have enhanced andexpanded by focusing on creating superior value for customers while incorporating the latesttechnologies in the marketplace.Some examples of solutions that our customers a

10、re excited about:An online marketplace for new and used aircraft parts powered by blockchain technology thatprovides traceability and transparent pricing.Robotics solutions to deliver fully-automated warehouses.A wireless fire alarm system for buildings enabled by mesh technology that offers ease of

11、installation and ensures a high level of occupant safety.Augmented reality-enabled industrial technologies that improve industrial worker proficiency andeffectiveness.Progress Against Strategic ObjectivesWe continue to hold the bar very high for ourselves in terms of achieving short-and long-termfin

12、ancial and strategic objectives.Even as we work to meet our current commitments,we are thinkingabout how to meet our commitments for the next quarter,the next year,and 10 years from now.Wemade substantial progress against the objectives I first outlined during our 2017 Investor Conference,as shown i

13、n the following table.Key Financial and Strategic Metrics Versus 2017 ExpectationsKEY OBJECTIVE2014-2016AVERAGEEXPECTATION ASOUTLINED IN 2017INVESTORCONFERENCE201720182018PEERAVERAGE(1)Enhance OrganicGrowth1%Low-to Mid-Single DigitsAnnually4%6%5%Continue MarginExpansion70 basispoints(bps)30-50 bps p

14、er year70 bps60 bps(15)bpsYear Over Year FreeCash Flow Growth9%12%22%2%Adjusted Free CashFlow Conversion89%100%Adj.FCF Conversion89%100%91%Total ShareownerReturn(TSR)11%TSR Peers35%(8%)(25%)Dividend Growth14%Dividend Growth EPS Growth12%10%(17%)The final strategic objective I introduced during the 2

15、017 Investor Conference was our plan to moreaggressively deploy capital given our strong financial condition.Since that time,we have continued asteady cadence of capital deployment,with more than$7.6 billion deployed in 2018.The 10%dividendincrease in 2018 represented our ninth consecutive double-di

16、git increase since 2010,and we continuedto opportunistically repurchase Honeywell shares at attractive levels,reducing our share count by 2%year over year.In 2018,we completed two technology-oriented acquisitions totaling more than$500 million,withTransnorm and Ortloff Engineers,Ltd.,joining the Hon

17、eywell family.Transnorm enhances ourwarehouse automation platform and gives us a beachhead in Europe.Ortloff develops highlyproprietary technology that enables maximum separation of gas and gas liquids.We continue toactively seek acquisition opportunities but will maintain our valuation discipline.I

18、n addition to making outstanding progress against our key strategic objectives,we have greatlystreamlined and simplified our portfolio by spinning three businesses since 2015 AdvanSix(ASIX),Garrett(GTX),and Resideo(REZI).We see opportunities to deploy capital across all our remainingplatforms for ac

19、quisitions that either are bolt-ons to our existing businesses and capabilities or are inadjacent spaces.(1)Peer Average includes Emerson Electric(EMR),General Electric(GE),3M Corporation(MMM),and UnitedTechnologies(UTX),companies against whom we frequently compete for investor dollars.Two years int

20、o my tenure as CEO,I am very confident we have created a much more focused,technology-oriented company that is accelerating the pace of organic sales growth and marginexpansion,and becoming more efficient in cash generation while actively deploying capital.We willcontinue to look for opportunities t

21、o invest in and expand existing and adjacent platforms.We will alsocontinuously assess the composition of our portfolio to ensure we have an optimal set of businesseswith attractive growth profiles.Environmental,Social,and Corporate GovernanceHoneywell is very proud of its Environmental,Social,and C

22、orporate Governance(ESG)achievements and,if anything,has been too quiet in sharing some of our accomplishments.Overthe past 15 years,we have deployed over$4 billion to remediate a number of legacy industrial sites,resulting in dramatic improvements to the related facilities and surrounding communiti

23、es:At Onondaga Lake in Syracuse,we have dredged and capped the lake bed,enabling the bestwater quality in 100 years.Additionally,we have restored and preserved about 1,800 acres ofhabitat and are planting 1.1 million native plants,shrubs,and trees.In recognition,Audubon NewYork honored Honeywell wit

24、h its highest award for conserving and restoring natural ecosystems.Inour BaltimoreInnerHarborprojectcalledHarborPoint,Honeywellcomprehensivelyremediated and repurposed a former manufacturing facility.We then signed agreements toprogressively transfer lots to the developer,which recently completed c

25、onstruction of the 289-unitPoint Street Apartments.In January 2019,we completed the$90 million sale of our remediated New Jersey“Bayfront”property to the City of Jersey City for repurposing as a mixed-use development.This transactionwill help ensure that this former industrial property becomes a vib

26、rant community asset.It is also important to note that many of the businesses Honeywell operates have a dramaticallypositive impact on the environment and the sustainability of our planet.A few of our relatedtechnologies include:Honeywell Solstice?,the most environmentally-friendly line of refrigera

27、nts,blowing agents,aerosols,and solvents,which in many cases have lower global warming potential than carbondioxide.Energy savings solutions in Honeywell Building Technologies that maximize user comfort whileoptimizing and reducing energy consumption.Numerous technologies,many enabled by Connected S

28、oftware,that keep aircraft passengersand industrial workers safe,generate cleaner fuels,and keep water and air clean.In addition to benefiting the planet,Honeywell has focused on improving the sustainability of ourown operations.Through thousands of projects worldwide,we have reduced our greenhouse

29、gasintensity by 90%and improved our energy efficiency by more than 70%.Honeywells award-winning global citizenship initiative,Honeywell Hometown Solutions,focuses ona number of social issues such as safe water,humanitarian relief,and safety and accident prevention.Our key area of focus is educating

30、youth,particularly in science,technology,engineering,and math(STEM),and encouraging them to pursue careers in these areas.We have partnered with leadingNGOs,public agencies,and universities to educate students and enhance teacher capabilities.We also take pride in our corporate governance.Inclusion

31、and diversity in the workplace is one ofour three core principles(the other two are integrity and ethics,and workplace respect).Inclusion anddiversity are ingrained in Honeywells culture and give us a competitive advantage.We want Honeywellto be the employer of choice for all,and we welcome people o

32、f all backgrounds.We have worked hardto improve diversity representation in our workforce in fact,over the past eight years,we have seensignificant net increases in representation for U.S.women,people of color in the U.S.,and non-U.S.women.This past January,we launched a new annual program focused o

33、n development andsponsorship of our top 50 up-and-coming female leaders,largely in fields traditionally dominated bymen.We are inclusive not only within our ranks but also on our Board.Three of our 11 independentdirectors are women(including an African American female),three are Hispanic,and two are

34、 non-U.S.citizens.We also have an active integrity hotline to ensure we address potential issues quickly,efficiently,and with appropriate discretion when poor behaviors or actions are experienced or observed.AtHoneywell,we have zero tolerance for behavior that creates a hostile workplace or makes em

35、ployeesfeel uncomfortable in their work environment.2019 Outlook and ObjectivesThe 2019 geopolitical environment brings with it numerous unresolved challenges,including Brexit,trade relationships and sanctions,potential Fed rate hikes,oil price instability,and so on.Althoughmany uncertainties persis

36、t,the overall business environment is still quite strong.Our long-cycle backlogheading into 2019 is up by a double-digit percentage year over year,our order rates have been good,and we continue to see robust growth in Aerospace,Warehouse Automation,Sensing and IoT,and oursoftware offerings.As always

37、,we are careful in our planning so we can perform regardless ofmacroeconomic conditions.We are well prepared for 2019,with numerous new product offeringscoming to the market and the benefits from previously-funded repositioning to help us become evenmore efficient.The key will be for us to be very a

38、gile and make quick adjustments.For 2019,we will emphasize three key areas that present considerable upside for Honeywell overthe next few years:Honeywell Digital,Integrated Supply Chain(ISC)Transformation,and theHoneywell Connected Enterprise.The intent of Honeywell Digital is to make Honeywell a m

39、oreinternally digital company that leverages improved processes,data structures,and governance combined with a coherent and consistent IT infrastructure to enable productivity,enhance customerexperience,reduce errors,and improve decision making.Our entire company will participate in thisinitiative,a

40、nd we fully expect to see significant improvements over the next few years.ISC Transformation is a comprehensive effort to modernize and simplify our manufacturingpractices,including use of technology such as additive manufacturing and robotics,planning practices,and vendor integration.By reducing t

41、he complexity of our supply chain and planning processes,we canachieve world-class standards in inventory,delivery,and operational efficiencies.Similar to HoneywellDigital,this is a multi-year initiative,which will result in a much simpler and more efficient integratedsupply chain.One of my key obje

42、ctives for Honeywell is to transform into a software-industrial company.Although we delivered very good results and grew our software sales by double digits organically in2018,we see the opportunity to further accelerate growth.Customers across all of our business groupswant us to do more in the IoT

43、 space because of our expertise in their respective industries,oursoftware capabilities,and our long-term relationships based on trust.To address this,we reorganizedour core software personnel late last year and formed Honeywell Connected Enterprise(HCE)toprovide more consolidated governance,along w

44、ith an integrated strategy for product development andgo-to-market execution.We anticipate that HCE,with its new leadership and governance structure,willhelp us accelerate the pace at which we introduce exciting new products that greatly benefit ourcustomers.In closing,Honeywell will continue to do

45、in 2019 what we have always done deliver for ourshareowners,customers,and employees.We have proven this consistently over the last decade.Ourportfolio is in great shape following the changes we made in 2018,and we are executing an aggressivebusiness transformation agenda that will position us even b

46、etter for the future.While building acompany that continues to outperform well into the future is extremely important,it is not enough.Wealso must enhance the communities in which we operate around the world.This is why we strive tomake the world safer,more environmentally friendly,and less energy i

47、ntensive.This is why we are fullycommitted to our ESG efforts.Doing well as a business gives us great joy;however,using ourtechnologies and capabilities to have a long-term positive impact on the world is even more gratifying.As always,thank you for your trust in Honeywell.We value the fact that you

48、 own our shares,andwe work hard every day to make you proud.Keep in mind our best days are still ahead of us!Sincerely,DARIUS ADAMCZYKChairman and Chief Executive OfficerNotes to Shareowners Letter1)Reconciliation of Organic Sales%Change20142015201620172018Reported sales%change.3%(4%)2%3%3%Less:Fore

49、ign Currency Translation.(4%)(1%)1%Less:Acquisitions and Divestitures,Net.4%(1%)(4%)Organic Sales%Change.3%(1%)4%6%We define organic sales percent as the year-over-year change in reported sales relative to the comparable period,excluding the impacton sales from foreign currency translation,and acqui

50、sitions,net of divestitures.We believe this measure is useful to investors andmanagement in understanding our ongoing operations and in analysis of ongoing operating trends.2)Reconciliation of Segment Profit to Operating Income and Calculation of Segment Profit andOperating Income Margins($M)2013201

51、42015201620172018Net sales.$39,055$40,306$38,581$39,302$40,534$41,802Segment profit.$6,351$6,696$7,256$7,186$7,690$8,190Stock compensationexpense(1).(170)(187)(175)(184)(176)(175)Repositioning,Other(2,3).(702)(590)(569)(674)(962)(1,100)Pension and otherpostretirement servicecosts(4).(330)(297)(274)(

52、277)(249)(210)Operating income.$5,149$5,622$6,238$6,051$6,303$6,705Segment profit.$6,351$6,696$7,256$7,186$7,690$8,190 Net sales.$39,055$40,306$38,581$39,302$40,534$41,802Segment profit margin%.16.3%16.6%18.8%18.3%19.0%19.6%Operating income.$5,149$5,622$6,238$6,051$6,303$6,705 Net sales.$39,055$40,3

53、06$38,581$39,302$40,534$41,802Operating income margin%.13.2%14.0%16.2%15.4%15.6%16.0%(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,gen

54、eral and administrative expenses,and Other income/expense.(4)Amounts included in Cost of products and services sold and Selling,general and administrative expenses(service costs).We define segment profit as operating income,excluding stock compensation expense,pension and other postretirement servic

55、e costs,and repositioning and other charges.We believe these measures are useful to investors and management in understanding our ongoingoperations and in analysis of ongoing operating trends.3)Reconciliation of Cash Provided by Operating Activities to Adjusted Free Cash Flow and Calculationof Adjus

56、ted Free Cash Flow Conversion($M)201320142015201620172018Cash provided by operatingactivities.$4,335$5,080$5,519$5,498$5,966$6,434Expenditures for property,plantand equipment.(947)(1,094)(1,073)(1,095)(1,031)(828)Free cash flow.3,3883,9864,4464,4034,9355,606Separation cost payments.424Adjusted free

57、cash flow.$3,388$3,986$4,446$4,403$4,935$6,030Net income attributable toHoneywell.$3,922$4,262$4,771$4,812$1,545$6,765Pension mark-to-marketexpense(1).38179432156728Debt refinancing expense(1).93Separation costs,includes nettax impacts.14732U.S.Tax Reform.3,891(1,494)Adjusted net income attributable

58、to Honeywell.$3,960$4,441$4,814$5,120$5,517$6,031Cash provided by operatingactivities.$4,335$5,080$5,519$5,498$5,966$6,434 Net income attributable toHoneywell.$3,922$4,262$4,771$4,812$1,545$6,765Operating cash flow conversion.111%119%116%114%386%95%Adjusted free cash flow.$3,388$3,986$4,446$4,403$4,

59、935$6,030 Adjusted net incomeattributable to Honeywell.$3,960$4,441$4,814$5,120$5,517$6,031Adjusted free cash flowconversion%.86%90%92%86%89%100%(1)Pension mark-to-market uses a blended tax rate of 25.5%,28.1%,36.1%,21.3%,23%and 24%.Debt refinancing expense uses a taxrate of 26.5%.We define free cas

60、h 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 beused to repay scheduled debt maturities and can be used to inves

61、t in future growth through new business development activities oracquisitions,pay dividends,repurchase stock or repay debt obligations prior to their maturities.This metric can also be used to evaluateour ability to generate cash flow from business operations and the impact that this cash flow has o

62、n our liquidity.UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549Form 10-K?ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2018OR?TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT

63、 OF 1934For the transition period fromtoCommission file number 1-8974Honeywell International Inc.(Exact name of registrant as specified in its charter)Delaware22-2640650(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)115 Tabor RoadMorris Plains,New Jers

64、ey07950(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code(973)455-2000Securities registered pursuant to Section 12(b)of the Act:Title of Each ClassName of Each Exchangeon Which RegisteredCommon Stock,par value$1 per share*New York Stock Exchange0.650%S

65、enior Notes due 2020New York Stock Exchange1.300%Senior Notes due 2023New York Stock Exchange2.250%Senior Notes due 2028New York Stock Exchange*The common stock is also listed on the London Stock Exchange.Securities registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the Reg

66、istrant is a well-known seasoned issuer,as defined in Rule 405 of the SecuritiesAct.Yes?No?Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d)ofthe Exchange Act.Yes?No?Indicate by check mark whether the Registrant(1)has filed all reports r

67、equired to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that theRegistrant was required to file such reports),and(2)has been subject to such filing requirements for the past90 days.Yes?No?Indicate by check mark whethe

68、r the Registrant has submitted electronically every Interactive Data File required tobe submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes?No?Indicate by check m

69、ark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not containedherein,and will not be contained,to the best of Registrants knowledge,in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

70、?Indicate by check mark whether the Registrant is a large accelerated filer,an accelerated filer,a non-acceleratedfiler,or a smaller reporting company.See definition of“accelerated filer,”“large accelerated filer,”and“smallerreporting company”in Rule 12b-2 of the Exchange Act.(Check One):Large accel

71、erated filer?Accelerated filer?Non-accelerated filer?Smaller reporting company?Emerging growth company?If an emerging growth company,indicate by check mark if the registrant has elected not to use the extendedtransition period for complying with any new or revised financial accounting standards purs

72、uant to section 13(a)ofthe Exchange Act.?Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes?No?The aggregate market value of the voting stock held by nonaffiliates of the Registrant was approximately$107.6 billion at June 30,2018.There were 729,

73、085,890 shares of Common Stock outstanding at January 25,2019.Documents Incorporated by ReferencePart III:Proxy Statement for Annual Meeting of Shareowners to be held April 29,2019.TABLE OF CONTENTSItemPagePart I1.Business.1Executive Officers of the Registrant.51A.Risk Factors.51B.Unresolved Staff C

74、omments.132.Properties.133.Legal Proceedings.134.Mine Safety Disclosures.13Part II.5.Market for Registrants Common Equity,Related Stockholder Matters andIssuer Purchases of Equity Securities.146.Selected Financial Data.167.Managements Discussion and Analysis of Financial Condition and Resultsof Oper

75、ations.177A.Quantitative and Qualitative Disclosures About Market Risks.358.Financial Statements and Supplementary Data.369.Changes in and Disagreements with Accountants on Accounting andFinancial Disclosure.969A.Controls and Procedures.969B.Other Information.96Part III.10.Directors and Executive Of

76、ficers of the Registrant.9811.Executive Compensation.9812.Security Ownership of Certain Beneficial Owners and Management andRelated Stockholder Matters.9813.Certain Relationships and Related Transactions.10014.Principal Accounting Fees and Services.100Part IV.15.Exhibits and Financial Statement Sche

77、dules.10116.Form 10-K Summary.101Signatures.108PART I.Item 1.BusinessHoneywell International Inc.(“Honeywell”or“the Company”)invents and commercializestechnologies that address some of the worlds most critical challenges around energy,safety,security,productivity and global urbanization.As a diversi

78、fied technology and manufacturing company,we areuniquely positioned to blend physical products with software to serve customers worldwide withaerospace products and services,energy efficient products and solutions for businesses,specialtychemicals,electronic and advanced materials,process technology

79、 for refining and petrochemicals,andproductivity,sensing,safety and security technologies for buildings and industries.Our products andsolutions enable a safer,more comfortable and more productive world,enhancing the quality of life ofpeople around the globe.Honeywell was incorporated in Delaware in

80、 1985.Our Annual Report on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-Kand any amendments to those reports,are available free of charge on our website()under the heading Investor Relations(see SEC Filings and Reports)immediately after they are filed with,or furnished to,the S

81、ecurities and Exchange Commission(SEC).In addition,in this Annual Report onForm 10-K,the Company incorporates by reference certain information from parts of its Proxy Statementfor the 2019 Annual Meeting of Stockholders,which we expect to file with the SEC on or aboutMarch 14,2019,and which will als

82、o be available free of charge on our website.Major BusinessesOn October 1,2018,the Company completed the spin-off of its Transportation Systems business,formerly part of Aerospace,and on October 29,2018,the Company completed the spin-off of itsHomes and Global Distribution business,formerly part of

83、Home and Building Technologies.Therefore,as of the end of 2018,those businesses were no longer part of the Company.Following the spin-off ofthe Homes and Global Distribution business,the Home and Building Technologies segment wasrenamed Honeywell Building Technologies.The major products/services,cus

84、tomers/uses and keycompetitors of each of our segments are:AerospaceAerospace is a leading global supplier of products,software and services for aircrafts that it sellsto original equipment manufacturers(OEM)and other customers in a variety of end markets including:air transport,regional,business an

85、d general aviation aircraft,airlines,aircraft operators and defenseand space contractors.Aerospace products and services include auxiliary power units,propulsionengines,environmental control systems,integrated avionics,wireless connectivity services,electricpower systems,engine controls,flight safet

86、y,communications,navigation hardware,data and softwareapplications,radar and surveillance systems,aircraft lighting,management and technical services,advanced systems and instruments,satellite and space components,aircraft wheels and brakes,repairand overhaul services and thermal systems.Aerospace a

87、lso provides spare parts,repair,overhaul andmaintenance services(principally to aircraft operators)and connected solutions and data services forthe aftermarket.Honeywell Building TechnologiesHoneywell Building Technologies is a leading global provider of products,software,solutions andtechnologies t

88、hat enable commercial building owners and occupants to ensure their facilities are safe,energy efficient,sustainable and productive.Honeywell Building Technologies products and servicesinclude advanced software applications for building control and optimization;sensors,switches,controlsystems and in

89、struments for energy management;access control;video surveillance;fire products;remote patient monitoring systems;and installation,maintenance and upgrades of systems that keepbuildings safe,comfortable and productive.1Performance Materials and TechnologiesPerformance Materials and Technologies is a

90、 global leader in developing and manufacturing high-quality performance chemicals and materials,process technologies and automation solutions.UOPprovides process technology,products,including catalysts and adsorbents,equipment and consultingservices that enable customers to efficiently produce gasol

91、ine,diesel,jet fuel,petrochemicals andrenewable fuels for the petroleum refining,gas processing,petrochemical,and other industries.Process Solutions is a pioneer in automation control,instrumentation,advanced software and relatedservices for the oil and gas,refining,pulp and paper,industrial power g

92、eneration,chemicals andpetrochemicals,biofuels,life sciences,and metals,minerals and mining industries.Through its smartenergy business,Process Solutions also enables utilities and distribution companies to deployadvanced capabilities that transform operations,improve reliability and environmental s

93、ustainability,and better serve customers.Advanced Materials manufactures a wide variety of high-performanceproducts,including fluorocarbons,hydrofluoroolefins,specialty films,waxes,additives,advancedfibers,customized research chemicals and intermediates,and electronic materials and chemicals.Safety

94、and Productivity SolutionsSafety and Productivity Solutions is a leading global provider of products,software and connectedsolutions to customers around the globe that improve productivity,workplace safety and assetperformance.Safety products include personal protection equipment,apparel,gear,and fo

95、otweardesigned for work,play and outdoor activities;gas detection technology;and cloud-based notificationand emergency messaging.Productivity Solutions products and services include mobile devices andsoftware for computing,data collection and thermal printing;supply chain and warehouse automationequ

96、ipment,software and solutions;custom-engineered sensors,switches and controls for sensing andproductivity solutions;and software-based data and asset management productivity solutions.CompetitionWe are subject to competition in substantially all product and service areas.Some of our keycompetitors a

97、re:Aerospace:Garmin,Thales,Safran and United Technologies Honeywell Building Technologies:Emerson Electric,Itron,Johnson Controls,Schneider Electricand Siemens Performance Materials and Technologies:Albemarle,BASF,DowDupont,Emerson Electric andSinopec Safety and Productivity Solutions:3M,Mine Safety

98、 Appliances(MSA),Kion Group,TEConnectivity and Zebra TechnologiesOur businesses compete on a variety of factors such as price,quality,reliability,delivery,customer service,performance,applied technology,product innovation and product recognition.Brandidentity,service to customers and quality are imp

99、ortant competitive factors for our products andservices,and there is considerable price competition.Other competitive factors include breadth ofproduct line,research and development efforts and technical and managerial capability.While ourcompetitive position varies among our products and services,w

100、e believe we are a significantcompetitor in each of our major product and service classes.Many of our competitors have substantialfinancial resources and significant technological capabilities.In addition,some of our products competewith the captive component divisions of OEMs.Aerospace SalesOur Aer

101、ospace segment sales were 37%,36%and 38%of our total sales in 2018,2017 and2016.Our sales to commercial aerospace OEMs were 7%,6%and 6%of our total sales in 2018,2017and 2016.In addition,our sales to commercial aftermarket customers of aerospace products andservices were 13%,13%and 12%of our total s

102、ales in 2018,2017 and 2016.2U.S.Government SalesSales to the U.S.Government(principally by Aerospace),acting through its various departmentsand agencies and through prime contractors,amounted to$3,403 million,$3,203 million and$3,330 million in 2018,2017 and 2016,which included sales to the U.S.Depa

103、rtment of Defense,as aprime contractor and subcontractor,of$2,832 million,$2,546 million and$2,647 million in 2018,2017and 2016.We do not expect our overall operating results to be significantly affected by any proposedchanges in 2019 federal defense spending due principally to the varied mix of the

104、 governmentprograms which impact us(OEMs production,engineering development programs,aftermarket sparesand repairs and overhaul programs),as well as our diversified commercial businesses.BacklogOur backlog represents the estimated remaining value of work to be performed under firmcontracts.Starting

105、in 2018 following the adoption of the new revenue recognition standard,backlog isequal to our remaining performance obligations under the contracts that meet the new guidance onrevenue from contracts with customers as discussed in Note 7 to the Consolidated FinancialStatements.Backlog was$24,850 mil

106、lion and$17,690 million at December 31,2018 and 2017.Weexpect to recognize approximately 56%of our remaining performance obligations as revenue in 2019,and the remaining balance thereafter.International OperationsWe are engaged in manufacturing,sales,service and research and development(R&D)globally

107、.U.S.exports and non-U.S.manufactured products are significant to our operations.U.S.exportscomprised 13%of our total sales in 2018,12%in 2017 and 13%in 2016.Non-U.S.manufacturedproducts and services,mainly in Europe and Asia,were 43%of our total sales in 2018,44%in 2017and 43%in 2016.Manufactured P

108、roducts and Systems andPerformance of ServicesAerospaceHoneywellBuildingTechnologiesPerformanceMaterials andTechnologiesSafety andProductivitySolutionsYear Ended December 31,2018(%of Segment Sales)U.S.Exports.21%1%16%3%Non-U.S.31%52%55%40%Information related to risks attendant to our foreign operati

109、ons is included in Item 1A.Risk Factorsunder the caption“Macroeconomic and Industry Risks.”Raw MaterialsThe principal raw materials used in our operations are generally readily available.Although weoccasionally experience disruption in raw materials supply,we experienced no significant problems inth

110、e purchase of key raw materials or commodities in 2018.We are not dependent on any one supplierfor a material amount of our raw materials.The costs of certain key raw materials,including R240,copper,fluorspar,tungsten salts,ethylene,and perchloroethylene in Performance Materials and Technologies and

111、 nickel,steel,titanium and othermetals in Aerospace,are expected to continue to fluctuate.We will continue to attempt to offset rawmaterial cost increases with formula or long-term supply agreements,price increases and hedgingactivities where feasible.We do not presently anticipate that a shortage o

112、f raw materials will cause anymaterial adverse impacts during 2019.3Patents,Trademarks,Licenses and Distribution RightsOur segments are not dependent upon any single patent or related group of patents,or anylicenses or distribution rights.In our judgment,our intellectual property rights are adequate

113、 for theconduct of our business.We believe that,in the aggregate,the rights under our patents,trademarksand licenses are generally important to our operations,but we do not consider any individual patent,trademark or any licensing or distribution rights related to a specific process or product to be

114、 ofmaterial importance in relation to our total business.EnvironmentWe are subject to various federal,state,local and foreign government requirements regardingprotection of human health and the environment.We believe that,as a general matter,our policies,practices and procedures are properly designe

115、d to prevent unreasonable risk of environmentaldamage,and of resulting financial liability,in connection with our business.Some risk of environmentaldamage is,however,inherent in some of our operations and products,as it is with other companiesengaged in similar businesses.We are and have been engag

116、ed in the handling,manufacturing,use and disposal of manysubstances classified as hazardous by one or more regulatory agencies.We believe that,as a generalmatter,our policies,practices and procedures are properly designed to prevent unreasonable risk ofenvironmental damage and personal injury,and th

117、at our handling,manufacture,use and disposal ofthese substances are in accord with environmental and safety laws and regulations.It is also possiblethat future knowledge or other developments,such as improved capability to detect substances in theenvironment or increasingly strict environmental laws

118、 and standards and enforcement policies,couldbring into question our current or past handling,manufacture,use or disposal of these substances.Among other environmental requirements,we are subject to the federal Superfund and similarstate and foreign laws and regulations,under which we have been desi

119、gnated as a potentiallyresponsible party that may be liable for cleanup costs associated with current and former operatingsites and various hazardous waste sites,some of which are on the U.S.Environmental ProtectionAgencys National Priority List.Although there is a possibility that a responsible par

120、ty might have tobear more than its proportional share of the cleanup costs if it is unable to obtain appropriatecontribution from other responsible parties,we do not anticipate having to bear significantly more thanour proportional share in multi-party situations taken as a whole.We do not believe t

121、hat existing or pending climate change legislation,regulation,or internationaltreaties or accords are reasonably likely to have a material effect in the foreseeable future on theCompanys business or markets that it serves,nor on its results of operations,capital expenditures,earnings,competitiveposi

122、tionorfinancialstanding.Wewillcontinuetomonitoremergingdevelopments in this area.EmployeesWe have approximately 114,000 employees at December 31,2018,of whom approximately44,000 are located in the United States.4Executive Officers of the RegistrantThe executive officers of Honeywell,listed as follow

123、s,are elected annually by the Board ofDirectors.There are no family relationships among them.Name,Age,Date FirstElected anExecutive OfficerBusiness ExperienceDarius Adamczyk,532017(a)Chairman of the Board and Chief Executive Officer since April 2018.President and Chief Executive Officer from April 2

124、017 to April2018.Chief Operating Officer from April 2016 to March 2017.President and Chief Executive Officer Performance Materials andTechnologiesfromApril2014toApril2016.PresidentofHoneywell Process Solutions from April 2012 to April 2014.Que Thanh Dallara,452018President and Chief Executive Office

125、r Connected Enterprise sinceOctober 2018.Vice President and Chief Commercial Officer fromJanuary 2017 to October 2018.Rajeev Gautam,662016President and Chief Executive Officer Performance Materials andTechnologies since April 2016.President of Honeywell UOP fromJanuary 2009 to April 2016.Mark R.Jame

126、s,572007SeniorVicePresidentHumanResources,SecurityandCommunications since November 2007.Vimal Kapur,532018PresidentandChiefExecutiveOfficerHoneywellBuildingTechnologies since May 2018.President of Honeywell ProcessSolutions from 2014 to May 2018.Gregory P.Lewis,512018Senior Vice President and Chief

127、Financial Officer since August 2018.VicePresidentofEnterpriseInformationManagementfromOctober2016toApril2018,priortobeingnamedVicePresident,Corporate Finance in May 2018.Chief FinancialOfficer of Automation and Control Solutions from April 2013 toSeptember 2016.Anne T.Madden,542017Senior Vice Presid

128、ent and General Counsel since October 2017.Also Corporate Secretary since February 2018.Vice President ofCorporate Development and Global Head of M&A from January2002 to October 2017.Timothy O.Mahoney,622009President and Chief Executive Officer Aerospace since September2009.Krishna Mikkilineni,59201

129、0(b)Senior Vice President Engineering and Information Technology sinceApril 2013.John F.Waldron,432016President and Chief Executive Officer,Safety and ProductivitySolutions since July 2016.President of Sensing and ProductivitySolutions from July 2015 to July 2016.President of Scanning andMobility fr

130、om April 2012 to July 2015.(a)Also a Director.(b)Mr.Mikkilineni will retire from the Company effective April 30,2019.Item 1A.Risk FactorsCautionary Statement About Forward-Looking StatementsWe describe many of the trends and other factors that drive our business and future results inItem 7.Managemen

131、ts Discussion and Analysis of Financial Condition and Results of Operations andin other parts of this report(including this Item 1A).Such discussions contain forward-lookingstatements within the meaning of Section 21E of the Securities Exchange Act of 1934.5Forward-looking statements are those that

132、address activities,events or developments thatmanagement intends,expects,projects,believes or anticipates will or may occur in the future.Theyare based on managements assumptions and assessments in light of past experience and trends,current economic and industry conditions,expected future developme

133、nts and other relevant factors.They are not guarantees of future performance,and actual results,developments and businessdecisions may differ significantly from those envisaged by our forward-looking statements.We do notundertake to update or revise any of our forward-looking statements.Our forward-

134、looking statementsare also subject to risks and uncertainties that can affect our performance in both the near-and long-term.These forward-looking statements should be considered in light of the information included in thisForm 10-K,including,in particular,the factors discussed below.These factors m

135、ay be revised orsupplemented in subsequent reports on Forms 10-Q and 8-K.Risk FactorsOur business,operating results,cash flows and financial condition are subject to the principal risksand uncertainties set forth below,any one of which could cause our actual results to vary materiallyfrom recent res

136、ults or from our anticipated future results.Macroeconomic and Industry RisksIndustry and economic conditions may adversely affect the markets and operatingconditions of our customers,which in turn can affect demand for our products and servicesand our results of operations.AerospaceOperating results

137、 of Aerospace are directly tied to cyclical industry and economicconditions,as well as changes in customer buying patterns of aftermarket parts,supplierstability,factory transitions and global supply chain capacity constraints that may lead toshortages of crucial components.The operating results of

138、our Commercial Aviation businessunit may be adversely affected by downturns in the global demand for air travel which impactsnew aircraft production or the delay or cancellation of new aircraft orders,delays in launchschedules for new aircraft,the retirement of aircraft and global flying hours,which

139、 impact airtransport,regional,business and general aviation aircraft utilization rates.Operating resultscould also be impacted by changes in overall trends related to end market demand for theproduct portfolio,as well as,new entrants and non-traditional players entering the market.Operating results

140、in our Defense and Space business unit may be affected by the mix of U.S.and foreign government appropriations for defense and space programs and by compliancerisks.Results may also be impacted by the potential introduction of counterfeit parts into ourglobal supply chain.HoneywellBuildingTechnologi

141、esOperatingresultsmaybeadverselyimpactedbydownturns in the level of global commercial construction activity(including retrofits andupgrades),lower capital spending and operating expenditures on building projects,lessindustrial plant expansion,changes in the competitive landscape including new market

142、 entrantsand new technologies,and fluctuations in inventory levels in distribution channels.Performance Materials and TechnologiesOperating results may be adversely impacted bydownturns in capacity utilization for chemical,industrial,refining,petrochemical and semi-conductor plants,our customers ava

143、ilability of capital for refinery construction and expansion,raw material demand and supply volatility,product commoditization,and our ability to maximizeour facilities production capacity and minimize downtime.In particular,the volatility in oil andnatural gas prices have and will continue to impac

144、t our customers operating levels and capitalspending and thus demand for our products and services.Safety and Productivity SolutionsOperating results may be adversely impacted bydownturns in the level of global capital spending and operating expenditures,including in theoil and gas industry,reduced

145、investments in process automation,safety monitoring,and plantcapacity utilization initiatives,fluctuations in retail markets,lower customer demand due to thefailure to anticipate and respond to overall trends related to end market demand,changes in the6competitive landscape including new market entr

146、ants and technology that may lead to productcommoditization,and adverse industry economic conditions,all of which could result in lowermarket share,reduced selling prices and lower margins.An increasing percentage of our sales and operations is in non-U.S.jurisdictions and issubject to the economic,

147、political,regulatory,foreign exchange and other risks ofinternational operations.Our international operations,including U.S.exports,represent more than half of the Companyssales.Risks related to international operations include exchange control regulations,wage and pricecontrols,antitrust regulation

148、s,employment regulations,foreign investment laws,import,export andother trade restrictions(such as sanctions and embargoes),violations by our employees of anti-corruption laws(despite our efforts to mitigate these risks),changes in regulations regardingtransactions with state-owned enterprises,natio

149、nalization of private enterprises,acts of terrorism,andour ability to hire and maintain qualified staff and maintain the safety of our employees in theseregions.Instability and uncertainties arising from the global geopolitical environment,and the evolvinginternational and domestic political,regulat

150、ory and economic landscape,the potential for changes inglobal trade policies including sanctions and trade barriers,trends such as populism,economicnationalism and negative sentiment toward multinational companies,and the cost of compliance withincreasingly complex and often conflicting regulations

151、worldwide can impair our flexibility in modifyingproduct,marketing,pricing or other strategies for growing our businesses,as well as our ability toimprove productivity and maintain acceptable operating margins.While it is currently not known what the final outcome and full terms of the United Kingdo

152、ms futurerelationship with the European Union will be,it is possible that there will be greater restrictions onimports and exports between the United Kingdom and other countries,including the United States,increased tariffs on U.K.imports and exports,and increased regulatory complexities.Existing fr

153、ee trade laws and regulations,such as the North American Free Trade Agreement,orany successor agreement,provide certain beneficial duties and tariffs for qualifying imports andexports.Changes in laws or policies governing the terms of foreign trade,and in particular increasedtrade restrictions,tarif

154、fs or taxes on imports from countries where we manufacture products or fromwhere we import products or raw materials,either directly or through our suppliers,could have animpact on our competitive position and financial results.Operating outside of the United States also exposes us to foreign exchan

155、ge risk,which we monitorand seek to reduce through hedging activities.However,foreign exchange hedging activities bear afinancial cost and may not always be available to us or be successful in eliminating such volatility.Finally,we generate significant amounts of cash outside of the United States th

156、at is invested withfinancial and non-financial counterparties.While we employ comprehensive controls regarding globalcash management to guard against cash or investment loss and to ensure our ability to fund ouroperations and commitments,a material disruption to the counterparties with whom we trans

157、actbusiness could expose Honeywell to financial loss.Risks related to our defined benefit pension plans may adversely impact our results ofoperations and cash flow.Significant changes in actual investment return on pension assets,discount rates,and otherfactors could adversely affect our results of

158、operations and require cash pension contributions in futureperiods.Changes in discount rates and actual asset returns different than our anticipated asset returnscan result in significant non-cash actuarial gains or losses which we record in the fourth quarter of eachfiscal year,and,if applicable,in

159、 any quarter in which an interim re-measurement is triggered.Withregard to cash pension contributions,funding requirements for our pension plans are largely dependentupon interest rates,actual investment returns on pension assets and the impact of legislative orregulatory changes related to pension

160、funding obligations.7Operational RisksRaw material price fluctuations,the ability of key suppliers to meet quality and deliveryrequirements,or catastrophic events can increase the cost of our products and services,impact our ability to meet commitments to customers and cause us to incur significantl

161、iabilities.The cost of raw materials is a key element in the cost of our products,particularly in PerformanceMaterials and Technologies(R240,copper,fluorspar,tungsten salts,ethylene,and perchloroethylene)and in Aerospace(nickel,steel,titanium and other metals).Our inability to offset material price

162、inflationthrough increased prices to customers,formula or long-term fixed price contracts with suppliers,productivity actions or through commodity hedges could adversely affect our results of operations.Many major components,product equipment items and raw materials,particularly in Aerospace,are pro

163、cured or subcontracted on a single or sole-source basis.Although we maintain a qualificationand performance surveillance process and we believe that sources of supply for raw materials andcomponents are generally adequate,it is difficult to predict what effects shortages or price increasesmay have i

164、n the future.Our ability to manage inventory and meet delivery requirements may beconstrained by our suppliers inability to scale production and adjust delivery of long-lead time productsduring times of volatile demand.Our inability to fill our supply needs would jeopardize our ability tofulfill obl

165、igations under commercial and government contracts,which could,in turn,result in reducedsales and profits,contract penalties or terminations,and damage to customer relationships.We may be unable to successfully execute or effectively integrate acquisitions,anddivestitures may not occur as planned.We

166、 regularly review our portfolio of businesses and pursue growth through acquisitions and seekto divest non-core businesses.We may not be able to complete transactions on favorable terms,on atimely basis,or at all,and during integration we may discover cybersecurity and compliance issues.Inaddition,o

167、ur results of operations and cash flows may be adversely impacted by(i)the failure ofacquired businesses to meet or exceed expected returns,including risk of impairment;(ii)the failure tointegrate multiple acquired businesses into Honeywell simultaneously and on schedule and/or toachieve expected sy

168、nergies;(iii)the inability to dispose of non-core assets and businesses onsatisfactory terms and conditions;(iv)the discovery of unanticipated liabilities,labor relations difficultiesor other problems in acquired businesses for which we lack contractual protections,insurance orindemnities,or with re

169、gard to divested businesses,claims by purchasers to whom we have providedcontractual indemnification and(v)the inability to collect on the indemnification and reimbursementagreements entered into with our spin-offs,Garrett Motion Inc.and Resideo Technologies,Inc.Our future growth is largely dependen

170、t upon our ability to develop new technologies andintroduce new products that achieve market acceptance in increasingly competitive marketswith acceptable margins.Our future growth rate depends upon a number of factors,including our ability to(i)identify andevolve with emerging technological and bro

171、ader industry trends in our target end-markets,(ii)developand maintain competitive products,(iii)defend our market share against an ever-expanding number ofcompetitors including many new and non-traditional competitors,(iv)enhance our products by addinginnovative features that differentiate our prod

172、ucts from those of our competitors and preventcommoditization of our products,(v)develop,manufacture and bring compelling new products tomarket quickly and cost-effectively,(vi)monitor disruptive technologies and business models,(vii)achieve sufficient return on investment for new products introduce

173、d based on capital expendituresand research and development spending,(viii)respond to changes in overall trends related to endmarket demand,and(x)attract,develop and retain individuals with the requisite technical expertiseand understanding of customers needs to develop new technologies and introduc

174、e new products.Competitors may also develop after-market services and parts for our products which attract customersand adversely affect our return on investment for new products.8The failure of our technologies or products to gain market acceptance due to more attractiveofferings by our competitors

175、 or the failure to address any of the above factors could significantly reduceour revenues and adversely affect our competitive standing and prospects.Failure to increase productivity through sustainable operational improvements,as well as aninability to successfully execute repositioning projects o

176、r to effectively manage ourworkforce,may reduce our profitability or adversely impact our businesses.Our profitability and margin growth are dependent upon our ability to drive sustainableimprovements.In addition,we seek productivity and cost savings benefits through repositioningactions and project

177、s,such as consolidation of manufacturing facilities,transitions to cost-competitiveregions and product line rationalizations.Risks associated with these actions include delays inexecution of the planned initiatives,additional unexpected costs,realization of fewer than estimatedproductivity improveme

178、nts and adverse effects on employee morale.We may not realize the fulloperational or financial benefits we expect,the recognition of these benefits may be delayed and theseactions may potentially disrupt our operations.In addition,organizational changes,increased attrition,failure to create and impl

179、ement a succession plan for key Company positions,not retaining key talent,inability to attract new employees with unique skills,labor relations difficulties,or workforce stoppagecould have a material adverse effect on our business,reputation,financial position and results ofoperations.As a supplier

180、 to the U.S.Government,we are subject to unique risks,such as the right ofthe U.S.Government to terminate contracts for convenience and to conduct audits andinvestigations of our operations and performance.U.S.Government contracts are subject to termination by the government,either for theconvenienc

181、e of the government or for our failure to perform consistent with the terms of theapplicable contract.Our contracts with the U.S.Government are also subject to government audits thatmay recommend downward price adjustments and other changes.When appropriate and prudent,wehave made adjustments and pa

182、id voluntary refunds in the past and may do so in the future.We are also subject to government investigations of business practices and compliance withgovernment procurement regulations.If,as a result of any such investigation or other governmentinvestigations(including investigation of violations o

183、f certain environmental,employment or exportlaws),Honeywell or one of its businesses were found to have violated applicable law,then it could besuspended from bidding on or receiving awards of new government contracts,suspended fromcontract performance pending the completion of legal proceedings and

184、/or have its export privilegessuspended.Our operations and the prior operations of predecessor companies expose us to the risk ofmaterial environmental liabilities.Mainly because of past operations and operations of predecessor companies,we are subject topotentially material liabilities related to t

185、he remediation of environmental hazards and to claims ofpersonal injuries or property damages that may be caused by hazardous substance releases andexposures.We continue to incur remedial response and voluntary clean-up costs for site contaminationand are a party to lawsuits and claims associated wi

186、th environmental and safety matters,including pastproduction of products containing hazardous substances.Additional lawsuits,claims and costsinvolving environmental matters are likely to continue to arise in the future.Various federal,state,localand foreign governments regulate the discharge of mate

187、rials into the environment,or the use of orcommunications respecting certain materials in our products,and can impose substantial fines andcriminal sanctions for violations,and require injunctive relief measures,including installation of costlyequipment or operational changes to limit emissions and/

188、or decrease the likelihood of accidentalhazardous substance releases,or limiting access of our products to markets,among others.Inaddition,changes in laws,regulations and enforcement of policies,the discovery of previouslyunknown contamination or new technology or information related to individual s

189、ites,the establishmentof stricter toxicity standards with respect to certain contaminants,or the imposition of new clean-up9requirements or remedial techniques could require us to incur additional costs in the future that wouldhave a negative effect on our financial condition or results of operation

190、s.Cybersecurity incidents could disrupt business operations,result in the loss of critical andconfidential information,and adversely impact our reputation and results of operations.Global cybersecurity threats and incidents can range from uncoordinated individual attempts togain unauthorized access

191、to information technology(IT)systems to sophisticated and targetedmeasures known as advanced persistent threats,directed at the Company,its products,its customersand/or its third party service providers,including cloud providers.Our customers,including the U.S.government,areincreasinglyrequiringcybe

192、rsecurityprotectionsandmandatingcybersecuritystandards in our products,and we may incur additional costs to comply with such demands.Whilewe have experienced,and expect to continue to experience,these types of threats and incidents,noneof them to date have been material to the Company.We seek to dep

193、loy comprehensive measures todeter,prevent,detect,respond to and mitigate these threats,including identity and access controls,data protection,vulnerability assessments,product software designs which we believe are lesssusceptible to cyber attacks,continuous monitoring of our IT networks and systems

194、 and maintenanceof backup and protective systems.Despite these efforts,cybersecurity incidents,depending on theirnature and scope,could potentially result in the misappropriation,destruction,corruption orunavailability of critical data and confidential or proprietary information(our own or that of t

195、hirdparties)and the disruption of business operations.Cybersecurity incidents aimed at the softwareimbedded in our products could lead to third party claims that our product failures have caused asimilar range of damages to our customers,and this risk is enhanced by the increasingly connectednature

196、of our products.The potential consequences of a material cybersecurity incident includefinancial loss,reputational damage,litigation with third parties,theft of intellectual property,fines leviedby the Federal Trade Commission,diminution in the value of our investment in research,developmentand engi

197、neering,and increased cybersecurity protection and remediation costs due to the increasingsophistication and proliferation of threats,which in turn could adversely affect our competitiveness andresults of operations.Data privacy,identity protection,and information security may require significant re

198、sourcesand presents certain risks.We collect,store,have access to and otherwise process certain confidential or sensitive data,including proprietary business information,personal data or other information that is subject to privacyand security laws,regulations and/or customer-imposed controls.Despit

199、e our efforts to protect suchdata,we may be vulnerable to material security breaches,theft,misplaced or lost data,programmingerrors,or employee errors that could potentially lead to the compromising of such data,improper useof our systems,software solutions or networks,unauthorized access,use,disclo

200、sure,modification ordestruction of information,defective products,production downtimes and operational disruptions.Inaddition,we operate in an environment in which there are different and potentially conflicting dataprivacy laws in effect in the various U.S.states and foreign jurisdictions in which

201、we operate and wemust understand and comply with each law and standard in each of these jurisdictions while ensuringthe data is secure.For example,the State of California recently passed legislation granting residentscertain new data privacy rights and regulating the security of Internet of Things d

202、evices,which will gointo effect in January 2020;European laws require us to have an approved legal mechanism to transferpersonal data out of Europe;the European Union General Data Protection Regulation,which tookeffect in May 2018,superseded prior European Union data protection legislation and impos

203、es morestringent requirements in how we collect and process personal data and provides for significantlygreater penalties for noncompliance;and several other countries have passed laws that requirepersonal data relating to their citizens to be maintained on local servers and impose additional datatr

204、ansfer restrictions.Government enforcement actions can be costly and interrupt the regular operationof our business,and violations of data privacy laws can result in fines,reputational damage and civillawsuits,any of which may adversely affect our business,reputation and financial statements.10A mat

205、erial disruption of our operations,particularly at our manufacturing facilities or withinour information technology infrastructure,could adversely affect our business.Our facilities,supply chains,distribution systems and information technology systems are subjectto catastrophic loss due to natural d

206、isasters including hurricanes and floods,power outages,fires,explosions,terrorism,equipment failures,sabotage,adverse weather conditions,public health crises,labor disputes,critical supply failure,inaccurate downtime forecast,political disruption,and otherreasons,which can result in undesirable cons

207、equences,including financial losses and damagedrelationships with customers.We employ information technology systems and networks to support thebusiness and rely on them to process,transmit and store electronic information,and to manage orsupport a variety of business processes and activities.Disrup

208、tions to our information technologyinfrastructure from system failures,shutdowns,power outages,telecommunication or utility failures,and other events,including disruptions at our cloud computing,server,systems and other third party ITservice providers,could interfere with our operations,interrupt pr

209、oduction and shipments,damagecustomer and business partner relationships,and negatively impact our reputation.Legal and Regulatory RisksOur U.S.and non-U.S.tax liabilities are dependent,in part,upon the distribution of incomeamong various jurisdictions in which we operate.Our future results of opera

210、tions could be adversely affected by changes in the effective tax rate asa result of a change in the mix of earnings in countries with differing statutory tax rates,changes in taxlaws,regulations and judicial rulings(or changes in the interpretation thereof),potential expansion oftaxation on digital

211、 services,changes in generally accepted accounting principles,changes in thevaluation of deferred tax assets and liabilities,changes in the amount of earnings permanentlyreinvested offshore,the results of audits and examinations of previously filed tax returns andcontinuing assessments of our tax ex

212、posures and various other governmental enforcement initiatives.Our tax expense includes estimates of tax reserves and reflects other estimates and assumptions,including assessments of future earnings of the Company which could impact the valuation of ourdeferred tax assets.Changes in tax laws or reg

213、ulations,including further regulatory developmentsarising from U.S.tax reform legislation as well as multi-jurisdictional changes enacted in response tothe action items provided by the Organization for Economic Co-operation and Development(OECD),will increase tax uncertainty and impact our provision

214、 for income taxes.Changes in legislation or government regulations or policies can have a significant impacton our results of operations.The sales and margins of each of our segments are directly impacted by government regulationsincluding safety,performance and product certification regulations.Wit

215、hin Aerospace,the operatingresults of Commercial Original Equipment and Commercial Aftermarket may be impacted by,amongother things,mandates of the Federal Aviation Administration and other similar international regulatorybodies requiring the installation of equipment on aircraft.Our Defense and Spa

216、ce business unit may beaffected by changes in government procurement regulations.Within Honeywell Building Technologies,the demand for and cost of providing products,services and solutions can be impacted by fire,security,safety,health care,environmental and energy efficiency standards and regulatio

217、ns.Performance Materials and Technologies results of operations can be impacted by environmentalstandards,regulations,and judicial determinations.Growth in all our businesses within emergingmarkets may be adversely impacted by the inability to acquire and retain qualified employees wherelocal employ

218、ment law mandates may be restrictive.Noncompliance with legislation and regulations canresult in fines and penalties.Increased public awareness and concern regarding global climate change may result in moreinternational,regional and/or federal requirements to reduce or mitigate global warming and th

219、eseregulations could mandate even more restrictive standards,such as stricter limits on greenhouse gasemissions,than the voluntary commitments that the Company has made or require such changes on amore accelerated time frame.There continues to be a lack of consistent climate legislation,which11creat

220、es economic and regulatory uncertainty.If environmental laws or regulations are either changedor adopted and impose significant operational restrictions and compliance requirements upon theCompany or its products,they could negatively impact the Companys business,capital expenditures,results of oper

221、ations,financial condition and competitive position.We cannot predict with certainty the outcome of litigation matters,government proceedingsand other contingencies and uncertainties.We are subject to a number of lawsuits,investigations and disputes(some of which involvesubstantial amounts claimed)a

222、rising out of the conduct of our business,including matters relating tocommercial transactions,government contracts,product liability(including asbestos),prior acquisitionsand divestitures,employment,employee benefits plans,intellectual property,antitrust,accounting,import and export,and environment

223、al,health and safety matters.Our potential liabilities are subject tochange over time due to new developments,changes in settlement strategy or the impact ofevidentiary requirements,and we may become subject to or be required to pay damage awards orsettlements that could have a material adverse effe

224、ct on our results of operations,cash flows andfinancial condition.While we maintain insurance for certain risks,the amount of our insurancecoverage may not be adequate to cover the total amount of all insured claims and liabilities.Theincurrence of significant liabilities for which there is no or in

225、sufficient insurance coverage couldadversely affect our results of operations,cash flows,liquidity and financial condition.12Item 1B.Unresolved Staff CommentsNoneItem 2.PropertiesWe have approximately 991 locations,of which 252 are manufacturing sites.Our properties andequipment are in good operatin

226、g condition and are adequate for our present needs.We do notanticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.Item 3.Legal ProceedingsWe are subject to a number of lawsuits,investigations and claims(some of which involvesubstantial amounts)arising

227、out of the conduct of our business.See a discussion of environmental,asbestos and other litigation matters in Note 20 Commitments and Contingencies of Notes toConsolidated Financial Statements.Item 4.Mine Safety DisclosuresNot applicable.13Part II.Item 5.Market for Registrants Common Equity,Related

228、Stockholder Mattersand Issuer Purchases of Equity SecuritiesHoneywells common stock is listed on the New York Stock Exchange under the ticker symbol“HON”.Dividend information for Honeywells common stock is included in Note 25 Unaudited QuarterlyFinancial Information of Notes to Consolidated Financia

229、l Statements.The number of record holders of our common stock at December 31,2018 was 45,606.Information regarding securities authorized for issuance under equity compensation plans isincluded in Item 12.Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder Matters un

230、der the caption“Equity Compensation Plans.”Honeywell purchased 11,181,042 shares of its common stock,par value$1 per share,in thequarter ending December 31,2018.In December 2017,the Board of Directors authorized therepurchase of up to a total of$8 billion of Honeywell common stock,which included amo

231、unts remainingunder and replaced the previously approved share repurchase program.$3.7 billion remained availableas of as of December 31,2018 for additional share repurchases.Honeywell presently expects torepurchase outstanding shares from time to time to generally offset the dilutive impact of empl

232、oyeestock based compensation plans,including option exercises,restricted unit vesting and matchingcontributions under our savings plans.Additionally,we seek to reduce share count via sharerepurchases as and when attractive opportunities arise.The amount and timing of future repurchasesmay vary depen

233、ding on market conditions and the level of our operating,financing and other investingactivities.The following table summarizes Honeywells purchase of its common stock for the three monthsended December 31,2018:PeriodTotalNumber ofSharesPurchasedAveragePrice Paidper ShareTotal Numberof SharesPurchas

234、ed asPart of PubliclyAnnouncedPlansor ProgramsApproximate DollarValue of Shares thatMay Yet be PurchasedUnder Plans orPrograms(Dollars in millions)Issuer Purchases of Equity SecuritiesOctober 20185,360,640$156.755,360,640$4,589November 20184,810,000$146.774,810,000$3,883December 20181,010,402$143.62

235、1,010,402$3,73714Performance GraphThe following graph compares the five-year cumulative total return on our common stock to thetotal returns on the Standard&Poors(S&P)500 Stock Index and a composite of S&Ps IndustrialConglomerates and Aerospace and Defense indices,on a 65%/35%weighted basis(the Comp

236、ositeIndex).The weighting of the components of the Composite Index are based on our segments relativecontribution to total segment profit.The selection of the Industrial Conglomerates component of theComposite Index reflects the diverse and distinct range of non-aerospace businesses conducted byHone

237、ywell.The annual changes for the five-year period shown in the graph are based on theassumption that$100 had been invested in Honeywell stock and each index on December 31,2013and that all dividends were reinvested.COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURNDOLLARS0501001502002015201820172016201

238、42013 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018Honeywell 100 111.51 118.02 135.76 183.33 168.31S&P 500 Index 100 113.69 115.26 129.05 157.22 150.33Composite Index 100 104.90 118.38 132.97 144.89 115.4915HONEYWELL INTERNATIONAL INC.This selected financial data should be read in conjunctio

239、n with Honeywells Consolidated FinancialStatements and related Notes included elsewhere in this Annual Report as well as the section of thisAnnual Report titled Item 7.Managements Discussion and Analysis of Financial Condition and Resultsof Operations.Item 6.Selected Financial Data2018(1)2017(1)2016

240、20152014Years Ended December 31,(Dollars in millions,except per share amounts)Results of Operations(2)Net sales.$41,802$40,534$39,302$38,581$40,306Net income attributable to Honeywell.6,7651,5454,8124,7714,262Earnings Per Common Share(2)Earnings from continuing operations:Basic.9.102.036.306.125.43A

241、ssuming dilution.8.982.006.216.045.36Dividends per share.3.062.742.452.151.87Financial Position at Year-End(2)Property,plant and equipment-net.5,2965,9265,7935,7895,383Total assets.57,77359,47054,56649,71145,969Short-term debt.6,4585,3093,5936,5142,637Long-term debt.9,75612,57312,1825,5546,046Total

242、debt.16,21417,88215,77512,0688,683Redeemable noncontrolling interest.753290219Shareowners equity.18,35816,66518,88317,75117,113(1)2018 and 2017 Net Income attributable to Honeywell and Earnings Per Common Share wereimpacted by U.S.Tax Reform;see Note 5 Income Taxes of Notes to Consolidated Financial

243、Statements for further details.(2)Results of Operations,Earnings per Common Share and Financial Position at Year-End wererevised in years prior to 2018 in connection with our change in accounting for Bendix asbestos-related liabilities for unasserted claims.See Note 20 Commitments and Contingencies

244、of Notes toConsolidated Financial Statements for further details.16Item 7.Managements Discussion and Analysis of Financial Condition andResults of Operations(Dollars in millions,except per share amounts)The following Managements Discussion and Analysis of Financial Condition and Results ofOperations

245、 is intended to help the reader understand the results of operations and financial conditionof Honeywell International Inc.and its consolidated subsidiaries(“Honeywell”or“the Company”)for thethree years ended December 31,2018.All references to Notes relate to Notes to ConsolidatedFinancial Statement

246、s in Item 8.Financial Statements and Supplementary Data.On October 29,2018,the Company completed the tax-free spin-off to Honeywell shareowners ofits Homes and Global Distribution business,part of Home and Building Technologies(renamedHoneywell Building Technologies following the spin-off),into a st

247、andalone publicly-traded company,Resideo Technologies,Inc.(“Resideo”).The assets and liabilities associated with Resideo have beenremoved from the Companys Consolidated Balance Sheet as of the effective date of the spin-off.Theresults of operations for Resideo are included in the Consolidated Statem

248、ent of Operations through theeffective date of the spin-off.On October 1,2018,the Company completed the tax-free spin-off to Honeywell shareowners of itsTransportation Systems business,part of Aerospace,into a standalone publicly-traded company,Garrett Motion Inc.(“Garrett”).The assets and liabiliti

249、es associated with Garrett have been removedfrom the Companys Consolidated Balance Sheet as of the effective date of the spin-off.The results ofoperations for Garrett are included in the Consolidated Statement of Operations through the effectivedate of the spin-off.On October 1,2016,the Company comp

250、leted the tax-free spin-off to Honeywell shareowners of itsResins and Chemicals business,part of Performance Materials and Technologies,into a standalone,publicly-traded company(named AdvanSix Inc.(“AdvanSix”).The assets and liabilities associated withAdvanSix have been removed from the Companys Con

251、solidated Balance Sheet as of the effectivedate of the spin-off.The results of operations for AdvanSix are included in the Consolidated Statementof Operations through the effective date of the spin-off.On September 16,2016,the Company completed the sale of the Aerospace government servicesbusiness,H

252、oneywell Technology Solutions Inc(“HTSI”or“government services business”).The assetsand liabilities associated with HTSI have been removed from the Companys Consolidated BalanceSheet as of the effective date of the sale.The results of operations for HTSI are included in theConsolidated Statement of

253、Operations through the effective date of the sale.EXECUTIVE SUMMARYDuring 2018,Honeywell continued to deliver on our financial commitments and to create long-termshareowner value.We grew net sales 3%to$41,802 million and grew income before taxes 8%to$7,487 million.The improvement in year over year i

254、ncome before taxes was attributable to both salesgrowth as well as operational improvements that increased operating margins.We believe our ability toconsistently grow earnings derives from the consistent,rigorous deployment of the HoneywellOperating System as well as a long history of identifying a

255、nd investing in productivity initiatives.Wehave continued our focus on commercial excellence processes,such as Velocity Product Development(“VPD”),to drive higher sales at better margins.We are careful not to allow the attainment of short-term financial results to imperil the creation oflong-term,su

256、stainable shareowner value.Hence,as part of the announcement in October 2017 of theresults of our portfolio review,we affirmed our commitment to a strategy and investments that areintended to enable us to become one of the worlds leading software industrial companies.Ourrefocused strategy and invest

257、ments are intended to take better advantage of our core technologicaland software strengths in high growth businesses that participate in six attractive industrial endmarkets.Each of these end markets is characterized by favorable global mega-trends including energyefficiency,infrastructure investme

258、nt,urbanization and safety.17In 2018 we deployed capital of$7.6 billion,including the following:Capital Investmentwe invested over$0.8 billion in capital expenditures focused on highreturn projects.DividendsIn 2018,we paid cash dividends of$2.3 billion and increased our annual dividendrate by 10%,as

259、 we seek to continue to grow the dividend in line with earnings.The dividendincrease in September 2018 marked the ninth consecutive double-digit increase since 2010.Share Repurchaseswe continue to repurchase our shares with the goal of keeping sharecount flat and by offsetting the dilutive impact of

260、 employee stock based compensation andsavings plans.Additionally,we seek to reduce share count via share repurchases as and whenattractive opportunities arise.In 2018,we repurchased 26.5 million shares for$4.0 billion.MergersandAcquisitionswedeployedapproximately$0.5billionduring2018onacquisitions.C

261、ONSOLIDATED RESULTS OF OPERATIONSNet Sales201820172016Net sales.$41,802$40,534$39,302%change compared with prior period.3%3%The change in net sales is attributable to the following:2018Versus20172017Versus2016Volume.4%3%Price.2%1%Acquisitions/Divestitures.(4)%(1)%Foreign Currency Translation.1%0%3%3

262、%A discussion of net sales by segment can be found in the Review of Business Segments sectionof this Managements Discussion and Analysis.The foreign currency translation impact in 2018 compared with 2017 was principally driven by thestrengthening on average year over year of the Euro against the U.S

263、.Dollar.The foreign currency translation impact in 2017 compared with 2016 was flat.The strengthening ofthe Euro was offset by the weakening of the British Pound against the U.S.Dollar.Cost of Products and Services Sold201820172016Cost of products and services sold.$29,046$28,144$27,677%change compa

264、red with prior period.3%2%Gross Margin percentage.30.5%30.6%29.6%Cost of products and services sold increased in 2018 compared with 2017 principally due toincreased direct material costs of approximately$790 million(driven by higher sales volume andinflation partially offset by divestitures and prod

265、uctivity)and higher repositioning and other charges ofapproximately$70 million.Gross margin percentage decreased in 2018 compared with 2017 principally due to higherrepositioning and other charges(approximately 0.2 percentage point impact)partially offset by highergross margin in the segments(approx

266、imately 0.1 percentage point impact collectively).Cost of products and services sold increased in 2017 compared with 2016 principally due toincreased direct material costs of approximately$290 million(driven by higher sales volume andacquisitions partially offset by divestitures and productivity,net

267、 of inflation),higher repositioning and18other charges of approximately$220 million and higher depreciation and amortization of approximately$90 million,partially offset by decreased indirect material costs of approximately$70 million and lowerlabor costs of approximately$60 million.Gross margin per

268、centage increased in 2017 compared with 2016 principally due to higher grossmargin in Aerospace and Performance Materials and Technologies(approximately 1.7 percentagepoint impact collectively),partially offset by higher repositioning and other charges(approximately 0.5percentage point impact)and by

269、 lower gross margin in Home and Building Solutions and Safety andProductivity Solutions(approximately 0.3 percentage point impact collectively).Selling,General and Administrative Expenses201820172016Selling,general and administrative expenses.$6,051$6,087$5,574%of sales.14.5%15.0%14.2%Selling,genera

270、l and administrative expenses decreased in 2018 compared with 2017 primarily dueto productivity and divestiture impacts,partially offset by labor inflation and higher repositioningcharges.Selling,general and administrative expenses increased in 2017 compared with 2016 primarily dueto increased labor

271、 costs(driven primarily by acquisitions,net of divestitures,investment for growth andmerit increases),and higher repositioning charges.Other(Income)Expense201820172016Other(income)expense.$(1,149)$(963)$(739)Other(income)expense increased in 2018 compared with 2017 primarily due to an increase inpen

272、sion ongoing incomenon-service,favorable impacts of foreign currency and an increase in interestincome,partially offset by separation costs associated with the spin-offs of our Homes and GlobalDistribution business and Transportation Systems business.Other(income)expense increased in 2017 compared w

273、ith 2016 primarily due to due to anincrease in pension ongoing incomenon-service.Tax Expense201820172016Tax expense.$659$5,362$1,603Effective tax rate.8.8%77.2%24.8%The effective tax rate for 2018 was lower than the U.S.federal statutory rate of 21%primarilyattributable to internal restructuring ini

274、tiatives that resulted in a reduction of accrued withholding taxesof approximately$1.1 billion related to unremitted foreign earnings.In addition,we recorded a taxbenefit of approximately$440 million as a reduction to our 2017 provisional estimate of impacts fromwhat is commonly referred to as the U

275、.S.Tax Cuts and Jobs Act(“U.S.Tax Reform”),which waspartially offset by$411 million of tax costs associated with the internal restructuring of the Homes andGlobal Distribution business and the Transportation Systems business in advance of their spin-offs.The effective tax rate for 2017 was higher th

276、an the U.S.federal statutory rate of 35%primarilyfrom the estimated impacts of U.S.Tax Reform of approximately$3.8 billion,partially offset by lowertax rates on non-U.S.earnings.The effective tax rate for 2016 was lower than the U.S.federal statutory rate of 35%primarily fromlower tax rates on non-U

277、.S.earnings.For further discussion of changes in the effective tax rate,see Note 5 Income Taxes of Notes toConsolidated Financial Statements.19Net Income Attributable to Honeywell201820172016Net income attributable to Honeywell.$6,765$1,545$4,812Earnings per share of common stockassuming dilution.$8

278、.98$2.00$6.21Earnings per share of common stockassuming dilution increased in 2018 compared with 2017primarily driven by the lower income tax expenses(due to reduction of accrued withholding taxes andthe higher comparative income taxes in 2017 from U.S.Tax Reform),higher segment profit,increasedpens

279、ion and other postretirement income,and lower share count,partially offset by separation costsand higher repositioning and other charges.Earnings per share of common stockassuming dilution decreased in 2017 compared with 2016primarily driven by additional income tax expense from U.S.Tax Reform,highe

280、r repositioning andother charges,partially offset by higher segment profit across all segments,lower pension mark-to-market expense and increased pension and other postretirement income.BUSINESS OVERVIEWOur consolidated results are principally impacted by:Changes in global economic growth rates and

281、industry conditions and demand in our key endmarkets;The impact of fluctuations in foreign currency exchange rates(in particular the Euro),relative tothe U.S.Dollar;The extent to which cost savings from productivity actions are able to offset or exceed theimpact of material and non-material inflatio

282、n;The spin-offs of the Homes and Global Distribution business and the Transportation Systemsbusiness into two stand-alone,publicly-traded companies and the associated separation costs;The impact of the pension discount rate and asset returns on pension expense,including mark-to-market adjustments,an

283、d funding requirements;and The impact of U.S.Tax Reform.Our 2019 areas of focus,most of which are applicable to each of our segments include:Driving profitable growth through research and development and technological excellence todeliver innovative products that customers value,and through expansio

284、n and localization of ourfootprint in high growth regions;Executing on our strategy to become a software-industrial company,which for us meansproducts and services that facilitate the connected plane,building and factory;Expanding margins by optimizing the Companys cost structure through manufacturi

285、ng andadministrative process improvements,repositioning,and other productivity actions;Executing disciplined,rigorous M&A and integration processes to deliver growth throughacquisitions;Controlling corporate costs,including costs incurred for asbestos and environmental matters,pension and other post

286、-retirement benefits;and Increasing availability of capital through strong cash flow conversion from effective workingcapital management and proactively managing debt levels to enable the Company to smartlydeploy capital for strategic acquisitions,dividends,share repurchases and capital expenditures

287、.20Review of Business Segments2018201720162018Versus20172017Versus2016%ChangeYears Ended December 31,Aerospace SalesCommercial Aviation OriginalEquipment.$2,833$2,475$2,52514%(2)%Commercial Aviation Aftermarket.5,3735,1034,7965%6%Defense and Space.4,6654,0534,37515%(7)%Transportation Systems.2,6223,

288、1483,055(17)%3%Total Aerospace Sales.15,49314,77914,751Honeywell Building Technologies SalesHomes.3,9284,4824,405(12)%2%Buildings.5,3705,2955,0851%4%Total Honeywell BuildingTechnologies Sales.9,2989,7779,490Performance Materials andTechnologies SalesUOP.2,8452,7532,4693%12%Process Solutions.4,9814,7

289、954,6404%3%Advanced Materials.2,8482,7913,3272%(16)%Total Performance Materials andTechnologies Sales.10,67410,33910,436Safety and Productivity Solutions SalesSafety.2,2782,1692,0755%5%Productivity Solutions.4,0593,4702,55017%36%Total Safety and ProductivitySolutions Sales.6,3375,6394,625Net Sales.$

290、41,802$40,534$39,302Aerospace20182017Change2016ChangeNet sales.$15,493$14,7795%$14,751Cost of products and services sold.10,83710,32010,820Selling,general and administrative and otherexpenses.1,1531,171940Segment profit.$3,503$3,2887%$2,99110%Factors Contributing to Year-Over-Year ChangeSalesSegment

291、ProfitSalesSegmentProfit2018 vs.20172017 vs.2016Organic growth/Operational segment profit.9%9%2%11%Foreign currency translation.1%1%Acquisitions,divestitures and other,net.(5)%(3)%(2)%(1)%Total%Change.5%7%10%2018 compared with 2017Aerospace sales increased due to organic sales growth,due to both vol

292、ume and price,thefavorable impact of foreign currency translation,the impact of the adoption of the new revenue21recognition accounting standard(included within Acquisitions,divestitures and other,net in the tableabove),offset by the spin-off of the Transportation Systems business on October 1,2018.

293、Commercial Original Equipment sales increased 14%(increased 11%organic)primarily due toincreased demand from business aviation,and air transport and regional original equipmentmanufacturers(OEM),lower OEM incentives and the impact from the classification ofnonrecurring engineering and development fu

294、nding resulting from the adoption of the newrevenue recognition accounting standard.Commercial Aftermarket sales increased 5%(increased 5%organic)primarily due to growth inbusiness aviation and air transport and regional.Defense and Space sales increased 15%(increased 15%organic)primarily driven by

295、growth inU.S.and international defense.Transportation Systems sales decreased 17%driven by divestiture impacts following itsOctober 1,2018 spin-off.For the nine-month period prior to the spin-off,sales increased 7%organic driven by higher volumes in light vehicle gas turbos and commercial vehicles.A

296、erospace segment profit increased due to an increase in operational segment profit,thefavorable impact of foreign currency translation,and the impact on service programs from the adoptionof the new revenue recognition accounting standard,partially offset by the Transportation Systemsdivestiture.The

297、increase in operational segment profit was driven primarily by higher organic salesvolume,price,productivity net of inflation,and lower OEM incentives,partially offset by the spin-off ofthe Transportation Systems business.Cost of products and services sold increased primarily due tohigher organic sa

298、les volume,the impact of foreign currency translation and inflation,partially offset bythe Transportation Systems divestiture.2017 compared with 2016Aerospace sales were flat due to organic sales growth,offset by the government servicesbusiness divestiture.Commercial Original Equipment sales decreas

299、ed 2%(decreased 2%organic)primarily due tolower shipments to business jet OEMs,partially offset by lower air transport and regional OEMincentives.Commercial Aftermarket sales increased 6%(increased 6%organic)primarily driven by higherrepair and overhaul activities and increased spares shipments.Defe

300、nse and Space sales decreased 7%(increased 1%organic)primarily due to thegovernment services business divestiture and lower Space sales,partially offset by growth inU.S.defense.Transportation Systems sales increased 3%(increased 2%organic)primarily driven by highercommercial vehicle volumes,gas turb

301、o penetration and the favorable impact from foreigncurrency translation,partially offset by lower diesel turbo volumes.Aerospace segment profit increased due to an increase in operational segment profit,partiallyoffset by the government services business divestiture.The increase in operational segme

302、nt profit wasdriven primarily by productivity,net of inflation,including restructuring benefits,lower OEM incentivesand higher organic sales volume,partially offset by the government services business divestiture.Costof products and services sold decreased primarily driven by the government services

303、 businessdivestiture and productivity,net of inflation,partially offset by higher organic sales volume.22Honeywell Building Technologies20182017Change2016ChangeNet sales.$9,298$9,777(5)%$9,4903%Cost of products and services sold.6,0666,4306,152Selling,general and administrative and otherexpenses.1,6

304、241,6971,717Segment profit.$1,608$1,650(3)%$1,6212%Factors Contributing to Year-Over-Year ChangeSalesSegmentProfitSalesSegmentProfit2018 vs.20172017 vs.2016Organic growth/Operational segment profit.3%5%2%1%Foreign currency translation.1%1%1%Acquisitions and divestitures,net.(9)%(9)%1%Total%Change.(5

305、)%(3)%3%2%2018 compared with 2017Honeywell Building Technologies sales decreased primarily due to the Homes divestiture partiallyoffset by an increase in organic growth,due to both volume and price,and the favorable impact offoreign currency translation.Sales in Homes decreased 12%driven by divestit

306、ure impacts following its October 29,2018spin-off.For the period prior to the spin-off,sales increased 6%organic driven by both Productsand Distribution(ADI)businesses.Sales in Buildings increased 1%(flat organic)due to the organic growth in Building Solutionsand the favorable impact of foreign curr

307、ency translation,offset by lower sales in BuildingManagement Systems and Building Products.Honeywell Building Technologies segment profit decreased due to the Homes divestiture,partiallyoffset by an increase in operational segment profit and the favorable impact of foreign currencytranslation.The in

308、crease in operational segment profit was primarily driven by price and productivity,partially offset by inflation and higher sales of lower margin products.Cost of products and servicesdecreased due to the Homes divestiture,partially offset by higher organic sales.2017 compared with 2016Honeywell Bu

309、ilding Technologies sales increased primarily due to an increase in organic sales,price,and acquisitions.Sales in Homes increased 2%(increased 2%organic)due to an increase in organic salesgrowth in Distribution,partially offset by lower sales volume in Products.Sales in Buildings increased 4%(increa

310、sed 3%organic)due to organic sales growth in BuildingProducts,Building Management Systems,Building Solutions,and acquisitions.Honeywell Building Technologies segment profit increased due to an increase in operationalsegment profit and the favorable impact of foreign currency translation.The increase

311、 in operationalsegment profit was primarily driven by productivity,net of inflation,and price,partially offset by highersales of lower margin products.Cost of products and services increased due to higher organic salesand acquisitions.23Performance Materials and Technologies20182017Change2016ChangeN

312、et sales.$10,674$10,3393%$10,436(1)%Cost of products and services sold.6,9486,7646,978Selling,general and administrative and otherexpenses.1,3981,3691,346Segment profit.$2,328$2,2066%$2,1124%Factors Contributing to Year-Over-Year ChangeSalesSegmentProfitSalesSegmentProfit2018 vs.20172017 vs.2016Orga

313、nic growth/Operational segment profit.2%5%8%10%Foreign currency translation.1%1%Acquisitions and divestitures,net.(9)%(6)%Total%Change.3%6%(1)%4%2018 compared with 2017Performance Materials and Technologies sales increased primarily due to organic growth,mainlydue to price,and the favorable impact o

314、f foreign currency translation.UOP sales increased 3%(increased 3%organic)driven primarily by increases in engineeringrevenues and increased catalyst volumes,partially offset by lower gas processing equipmentrevenues.Process Solutions sales increased 4%(increased 3%organic)driven primarily by increa

315、ses inmaintenance and migration services,increased revenues in projects,and higher field productssales.Advanced Materials sales increased 2%(flat organic)driven primarily by increased volumes influorine products,partially offset by lower other specialty products sales.Performance Materials and Techn

316、ologies segment profit increased primarily due to an increase inoperational segment profit and the favorable impact of foreign currency translation.The increase inoperational segment profit is primarily due to productivity and price,partially offset by inflation,highersales of lower margin products,

317、and continued investments for growth.Cost of products and servicessold increased primarily due to inflation,higher sales of lower margin products,and foreign currencytranslation,partially offset by productivity.2017 compared with 2016Performance Materials and Technologies sales decreased primarily d

318、ue to divestitures,partiallyoffset by organic growth.UOP sales increased 12%(increased 12%organic)driven primarily by higher gas processingproject revenues,increased catalyst volumes,increased equipment sales,and increasedengineering revenues,partially offset by decreased licensing revenues.Process

319、Solutions sales increased 3%(increased 3%organic)driven primarily by higherrevenue in smart energy,services,thermal solutions,and software,partially offset by lower fieldproducts sales.Advanced Materials sales decreased 16%(increased 11%organic)driven primarily by the spin-off of the former resins a

320、nd chemicals business,partially offset by increased volumes in fluorineproducts.Performance Materials and Technologies segment profit increased primarily due to an increase inoperational segment profit,partially offset by divestitures.The increase in operational segment profit isprimarily due to pro

321、ductivity,net of inflation,higher organic sales volume and pricing,partially offset byunfavorable product mix and continued investments for growth.Cost of products and services sold24decreased primarily due to divestitures and productivity,net of inflation,partially offset by higherorganic sales vol

322、umes.Safety and Productivity Solutions20182017Change2016ChangeNet sales.$6,337$5,63912%$4,62522%Cost of products and services sold.4,2053,7143,001Selling,general and administrative and other expenses.1,1001,073944Segment profit.$1,032$85221%$68025%Factors Contributing to Year-Over-Year ChangeSalesSe

323、gmentProfitSalesSegmentProfit2018 vs.20172017 vs.2016Organic growth/Operational segment profit.11%20%5%18%Foreign currency translation.1%1%Acquisitions and divestitures,net.17%7%Total%Change.12%21%22%25%2018 compared with 2017Safety and Productivity Solutions sales increased primarily due to organic

324、 sales growth,mainlydue to sales volume and a modest impact due to price.Sales in Safety increased 5%(increased 4%organic)due to increased sales volume in bothIndustrial Safety and Retail.Sales in Productivity Solutions increased 17%(increased 16%organic)primarily due toincreased sales volume in Int

325、elligrated,Sensing and IoT,and Productivity Products.Safety and Productivity Solutions segment profit increased primarily due to an increase inoperational segment profit.The increase in operational segment profit was driven by higher salesvolume and price.Cost of products and services increased prim

326、arily due to higher organic sales.2017 compared with 2016Safety and Productivity Solutions sales increased primarily due to acquisitions and organic salesvolume.Sales in Safety increased 5%(increased 4%organic)due to increased sales volume in theIndustrial Safety business,higher distribution in the

327、Retail business,and the favorable impact offoreign currency translation.Sales in Productivity Solutions increased 36%(increased 6%organic)principally due to growthfrom acquisitions(Intelligrated was acquired in August 2016).Safety and Productivity Solutions segment profit increased due to an increas

328、e from operationalsegment profit and acquisitions.The increase in operational segment profit is driven by higherproductivity,net of inflation,and sales volume.Cost of products and services increased primarily dueto acquisitions and higher sales volume offset by productivity,net of inflation.Repositi

329、oning ChargesSee Note 3 Repositioning and Other Charges of Notes to Consolidated Financial Statements for adiscussion of our repositioning actions and related charges incurred in 2018,2017 and 2016.Cashspending related to our repositioning actions was$285 million,$177 million and$228 million in 2018

330、,2017 and 2016,and was funded through operating cash flows.In 2019,we expect cash spending forrepositioning actions to be approximately$300 million and to be funded through operating cash flows.25LIQUIDITY AND CAPITAL RESOURCESThe Company continues to manage its businesses to maximize operating cash

331、 flows as theprimary source of liquidity.In addition to our available cash and operating cash flows,additionalsources of liquidity include committed credit lines,short-term debt from the commercial paper market,long-term borrowings,access to the public debt and equity markets and the ability to acce

332、ss non-U.S.cash as a result of the U.S.Tax Reform.We continue to balance our cash and financing uses throughinvestment in our existing core businesses,acquisition activity,share repurchases and dividends.Cash Flow SummaryOur cash flows from operating,investing and financing activities,as reflected i

333、n the ConsolidatedStatement of Cash Flows,are summarized as follows:201820172016Years Ended December 31,Cash provided by(used for):Operating activities.$6,434$5,966$5,498Investing activities.1,027(3,574)(3,342)Financing activities.(5,032)(3,516)346Effect of exchange rate changes on cash.(201)340(114)Net(decrease)increase in cash and cash equivalents.$2,228$(784)$2,3882018 compared with 2017Cash pr