Related Party Transactions |
9 Months Ended |
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Sep. 26, 2026 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Related Party Transactions Related Party Loans Related party debt due from and due to Honeywell or its affiliates are recorded in Accounts receivable and Accrued liabilities in the Condensed Consolidated Balance Sheets, respectively. Related party loans receivable of $44 million and related party loans payable of $16 million are reflected in the Condensed Consolidated Balance Sheets as of December 31, 2025. No related party loans receivable or payable were outstanding as of September 26, 2026. The interest income and expense related to the loan activity is recorded in Interest expense (income), net in the Condensed Consolidated Statements of Operations. Distribution to Honeywell On March 16, 2026, the Company completed the private note offering of $16.0 billion of senior unsecured notes (collectively the “Initial Notes”). Net proceeds of $15.1 billion from the Initial Notes were distributed to Honeywell in connection with the Spin-off. The distribution was reflected in the Condensed Consolidated Statements of Cash Flows as a financing activity and in the Condensed Consolidated Balance Sheets as Net Parent investment. Refer to Note 9. Debt and Credit Agreements for further details. Corporate Allocations For the periods prior to the Spin-off, the Company recorded expenses allocated from Honeywell including, but not limited to, legal, accounting, information technology, human resources, and other infrastructure support. Allocations for management costs and corporate support services provided to the Company totaled $294 million for the nine months ended September 26, 2026, and totaled $164 million and $475 million for the three and nine months ended September 27, 2025, respectively, and such amounts are included within Cost of products and services sold, Research and development expenses, and Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. For the three months ended September 26, 2026, there were no expenses allocated from Honeywell. Cash Management and Net Parent Investment For the periods prior to the Spin-off, Honeywell used a centralized approach for the purpose of cash management and financing of its operations. The Company’s excess cash in participating bank accounts was transferred to Honeywell daily, and Honeywell funded the Company’s operating and investing activities as needed. Honeywell operated a centralized non-interest-bearing cash pool in the U.S. and regional interest-bearing cash pools outside of the U.S. The total net effect of the settlement of these intercompany transactions is reflected in the Condensed Consolidated Statements of Cash Flows as a financing activity and in the Condensed Consolidated Balance Sheets as Net Parent investment. Separation and Distribution Agreements In connection with the Spin-off, the Company and Honeywell entered into definitive agreements which set forth the terms and conditions of the Spin-off and provide a framework for the Company’s relationship with Honeywell following the Spin-off as follows: •The Separation and Distribution Agreement sets forth, among other things, the Company’s agreements with Honeywell regarding the principal actions to be taken in connection with the Spin-off. It also sets forth other agreements that govern certain aspects of the Company’s ongoing relationship with Honeywell following the Distribution. •The Transition Services Agreement governs certain transitional services to be provided by Honeywell to the Company on an interim, transitional basis. The services, including, but not limited to global real estate support, information technology support, finance administration support, and human resources support, will be provided for a limited time, generally for no longer than two years following the Distribution Date, and will be provided for specified fees, which are generally based on the cost of services provided. •The Tax Matters Agreement governs the Company’s and Honeywell’s respective rights, responsibilities, and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and tax proceedings, and other matters regarding taxes. The Tax Matters Agreement provides special rules that allocate tax liabilities in the event the share distribution or certain related transactions fail to qualify for their intended tax consequences. •The Employee Matters Agreement addresses employment and employee compensation and benefits matters. The Employee Matters Agreement addresses the allocation and treatment of assets and liabilities relating to employees and compensation and benefit plans and programs in which the Company’s employees participated prior to the Spin-off. •The Intellectual Property License Agreement governs the terms by which each of the Company and Honeywell, and their respective affiliates, grant and receive perpetual non-exclusive licenses to and from each other in respect of certain patents and other intellectual property rights owned by the licensing party or its group, excluding rights in trademarks and certain other intellectual property rights that may be addressed in separate agreements between the parties or their respective affiliates. •The Trademark License Agreement provides the Company a license to use “Honeywell Aerospace” and certain other trademarks in its operation of the Aerospace business, including in the names of Honeywell Aerospace and certain of its subsidiaries, subject to certain restrictions. The agreement includes exclusivity terms with respect to the use of “Honeywell Aerospace” and certain other uses, subject to certain exceptions, including exceptions permitting the Company to continue to market and sell products and services under the “Honeywell” mark. The Trademark License Agreement includes customary quality control provisions to protect and preserve the goodwill associated with “Honeywell” and the other licensed marks. In exchange, the Company will pay Honeywell an aggregate amount of $1,125 million over a period of five years, with an initial payment of $18.75 million that was paid within five days of the Distribution Date followed by 59 equal monthly payments of $18.75 million. Costs associated with the Honeywell trademark license are expensed as incurred.
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