The Company is subject to various federal, state, local, and foreign government requirements relating to the protection of the environment. With respect to environmental matters involving site contamination, the Company continually conducts studies, individually or jointly with other potentially responsible parties, to determine the feasibility of various remedial techniques. It is the Company’s policy to record liabilities for environmental matters when remedial efforts or damage claim payments are probable and the costs can be reasonably estimated. Such liabilities are based on the Company’s best estimate of the undiscounted future costs required to complete the remedial work. The recorded liabilities are adjusted periodically as remediation efforts progress or as additional technical, regulatory, or legal information becomes available.

In conjunction with the Honeywell Aerospace Spin-Off, the Company entered into the Separation and Distribution Agreement with Honeywell Aerospace and underwent a separation, pursuant to which certain businesses and entities with associated environmental liabilities were transferred to Honeywell Aerospace. Honeywell Aerospace assumed responsibility for those environmental liabilities and agreed to indemnify the Company for any losses, costs, or liabilities incurred by the Company in connection with such environmental liabilities. In addition, the Company received acknowledgements from environmental agencies which established that Honeywell Aerospace would be obligated to remediate these environmental liabilities, and the Company may be looked to, for remediation if Honeywell Aerospace does not satisfy its remediation obligations. Accordingly, in connection with the Aerospace Spin-Off transaction, the Company derecognized $828 million of environmental liabilities through equity as part of the transferred businesses and recognized its residual obligation as a stand-ready obligation in accordance with ASC 460, Guarantees.

The Company is unable to estimate the maximum potential amount of any payments in the event Honeywell Aerospace does not satisfy its environmental liabilities obligations because the scope, timing, and ultimate cost of future remediation activities depend on site-specific conditions, regulatory requirements, and other factors that cannot currently be estimated. The Company would not be responsible for any assumed obligations unless (i) Honeywell Aerospace was financially or legally incapable of satisfying its remediation or indemnification obligations and (ii) all available defenses of the Company to liability were finally (and without further right of appeal) determined by a court of competent jurisdiction to be invalid. The Company evaluates this scenario as a loss contingency at each reporting date. At September 30, 2026, the Company concluded that no additional accrual for liability was required under ASC 450-20 because a loss was remote.

In conjunction with the Resideo Technologies, Inc. (Resideo) spin-off, the Company entered into an indemnification and reimbursement agreement with a Resideo subsidiary, pursuant to which Resideo’s subsidiary had an ongoing obligation to make cash payments to Honeywell Technologies in amounts equal to 90% of Honeywell Technologies’ annual net spending for environmental matters at certain sites as defined in the agreement. As the Company incurred costs for environmental matters deemed probable and reasonably estimable related to the sites covered by the indemnification and reimbursement agreement, a corresponding receivable from Resideo for 90% of such costs was also recorded. The amount payable to Honeywell Technologies in any given year was subject to a cap of $140 million, and the payment obligation was to continue until the earlier of December 31, 2043, or December 31 of the third consecutive year during which the annual payment obligation was less than $25 million. Reimbursements associated with this agreement were collected from Resideo quarterly and were $105 million in the nine months ended September 30, 2025.

In the third quarter of 2025, the Company and Resideo entered into a termination agreement for the accelerated monetization of the indemnification and reimbursement agreement. Upon closing of the transactions contemplated pursuant to the termination agreement, the Company received a one-time cash payment of $1,590 million in lieu of all future payments to which the Company was entitled pursuant to the indemnification and reimbursement agreement. Additionally, Resideo paid the quarterly payment of $35 million for the quarter ending September 30, 2025 due under the indemnification and reimbursement agreement. The Company applied the one-time cash payment and quarterly reimbursement payment against the outstanding receivable balance due from Resideo, inclusive of expenses incurred in the third quarter of 2025. The Company recognized a gain of $802 million in Other (income) expense for the cash proceeds received in excess of the receivables due from Resideo as of the third quarter of 2025.

The Company is cooperating with a formal investigation by the SEC which is focused on certain financial reporting matters, including with respect to the Company’s former Performance Materials and Technologies segment. At this time, the Company does not expect the outcome of this matter to have a material adverse effect on the Company’s consolidated results of operations, cash flows, or financial position.

The Company is subject to a number of other lawsuits, investigations, and disputes (some of which involve substantial amounts claimed) arising out of the conduct of its business operations or those of previously owned entities, including matters relating to commercial transactions, government contracts, product liability, the integration of emerging technologies (such as, but not limited to, artificial intelligence and machine learning), prior acquisitions and divestitures, employment, employee benefit plans, intellectual property, legal, and environmental, health, and safety matters. The Company recognizes liabilities for any contingency that is probable of occurrence and reasonably estimable. The Company continually assesses the likelihood of adverse judgments or outcomes in such matters, as well as potential ranges of probable losses (taking into consideration any insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts.

Given the uncertainty inherent in litigation and investigations, including those discussed in this Note 15, the Company cannot predict when or how these matters will be resolved and does not believe it is possible to develop estimates of reasonably possible loss (or a range of possible loss) in excess of current accruals for commitment and contingency matters. Considering the Company’s past experience and existing accruals, the Company does not expect the outcome of such matters, either individually or in the aggregate, to have a material adverse effect on the Company’s consolidated financial position. Because most contingencies are resolved over long periods of time, potential liabilities are subject to change due to new developments (including new discovery of facts, changes in legislation, and outcomes of similar cases through the judicial system), changes in assumptions or changes in settlement strategy, which could cause the Company to pay damage awards or settlements (or become subject to equitable remedies) that could have a material adverse effect on the Company’s consolidated results of operations or operating cash flows in the periods recognized or paid.