HONEYWELL INTERNATIONAL INC (HON) FY 2025 MD&A
This page reproduces the company's own Item 7 MD&A text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in tables and graphs in millions, except per share amounts)
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of Honeywell International Inc. and its consolidated subsidiaries (Honeywell, we, us, our, or the Company) for the three years ended December 31, 2025. All references to Notes relate to Notes to Consolidated Financial Statements in the section titled Financial Statements and Supplementary Data.
BUSINESS UPDATE
MACROECONOMIC CONDITIONS
We continue to monitor macroeconomic and geopolitical developments that continue to be characterized by elevated trade tensions, economic policy uncertainty, and evolving inflationary pressures. While continued global growth proved more resilient than widely anticipated, new tariffs imposed in 2025 and 2026 to date, along with ongoing rollbacks and negotiations, are driving volatility in global markets. Global conflicts, tariffs, labor disruptions, and new regulations continue to generate volatility in global markets and contribute to supply chain vulnerabilities and pricing fluctuations. We remain proactive in our collaboration with suppliers to minimize shortages and mitigate supply chain and price volatility.
Mitigation strategies remain crucial to meet customer demand in this evolving environment. Our mitigation strategies include supply chain simplification, continued alignment to local supply sources, digital solutions for identifying and managing shortages, pricing actions and dual source strategies, longer term planning for constrained materials, supply tracking tools, direct engagement with key suppliers, and new supplier development. Strong relationships with strategic primary and secondary suppliers allow us to collaborate to reliably source key components and raw materials, develop new products, commit our resources to assist certain suppliers, and at times, alter designs of existing products. We believe these mitigation strategies enable us to reduce supply risk, foster new product innovation, and expand our market presence. Additionally, due to the stringent quality controls and product qualification we perform on any new or enhanced product, these mitigation strategies have not impacted, and we do not expect them to impact, product quality or reliability.
To date, our strategies helped minimize our exposure to these conditions. However, if we are not successful in sustaining or executing these strategies, these macroeconomic conditions could have a material adverse effect on our consolidated results of operations, cash flows, or financial condition.
See the section titled Risk Factors for a discussion of risks associated with the potential adverse effects of inflationary cost pressures, supply chain disruptions, tariffs and other trade restrictions and barriers, and labor shortages to our businesses.
PORTFOLIO TRANSFORMATION
We continually assess the relative strength of each business in our portfolio as to strategic fit, market position, profit, and cash flow contribution in order to identify target investment and acquisition opportunities in order to upgrade our combined portfolio. We also identify businesses that do not fit into our long-term strategic plan based on their market position, relative profitability, or growth potential. During the second quarter of 2025, we completed the divestiture of our PPE business, as well as closed on the acquisition of Sundyne. We also announced our agreement to acquire Johnson Matthey's Catalyst Technologies business segment.
On February 6, 2025, we announced our intention to pursue a separation of Honeywell from Honeywell Aerospace, into independent, U.S. publicly traded companies, which is intended to be completed in the third quarter of 2026. The planned separation is intended to be a tax-free separation to Honeywell shareowners for U.S. federal income tax purposes. The separation will be subject to the satisfaction of a number of customary conditions, including, among others, the filing and effectiveness of applicable filings (including a Form 10 registration statement that includes required financial statements) with the SEC, assurance that the separation of the businesses will be tax-free to Honeywell’s shareowners, receipt of applicable regulatory approvals, and final approval by Honeywell’s Board of Directors. The proposed separation is complex in nature, and may be affected by unanticipated developments, credit and equity markets, or changes in market conditions.
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On July 8, 2025, we announced we are evaluating strategic alternatives for our Productivity Solutions and Services and Warehouse and Workflow Solutions businesses within the Industrial Automation reportable segment to further simplify Honeywell's portfolio and accelerate shareowner value creation ahead of the planned separation of Honeywell from Honeywell Aerospace. As of December 31, 2025, the assets and liabilities of these businesses are classified as held for sale.
On July 30, 2025, we entered into a termination agreement for the accelerated monetization of the indemnification and reimbursement agreement we had with Resideo Technologies, Inc. (Resideo), pursuant to which Resideo’s subsidiary had an ongoing obligation to make cash payments to Honeywell in amounts equal to 90% of Honeywell’s annual net spending for environmental matters at certain sites as defined in the agreement. Upon closing of the transactions contemplated pursuant to the termination agreement, we received a one-time cash payment of $1.6 billion in lieu of all future payments to which the Company was entitled pursuant to the indemnification and reimbursement agreement.
On September 29, 2025, we permanently divested our legacy Bendix asbestos liabilities and certain non-Bendix asbestos liabilities. We recorded a pre-tax loss of $148 million in 2025 related to the divested asbestos liabilities. Under the terms of the divestiture agreement, we contributed $1.4 billion in cash and derecognized $1.5 billion in asbestos liabilities and $0.1 billion of related insurance assets to a third party entity.
On October 30, 2025, the Company completed the spin-off of its Advanced Materials business into an independent, publicly traded company named Solstice Advanced Materials, Inc. (Solstice). Honeywell shareowners of record as of the close of business on October 17, 2025 received one share of Solstice common stock for every four shares of Honeywell common stock. Results of operations, financial position, and cash flows for the Advanced Materials business are reported as discontinued operations for all periods presented and the notes to the financial statements have been adjusted on a retrospective basis. Discussions throughout this MD&A are based on continuing operations unless otherwise noted.
SEGMENT REALIGNMENT
In October 2025, we announced a planned realignment, expected to be effective in the first quarter of 2026, of our business units comprising our Industrial Automation and Energy and Sustainability Solutions reportable business segments. This realignment will form a new reportable business segment, Process Automation and Technology, and result in a new composition of our Industrial Automation reportable business segment. Process Automation and Technology will be comprised of UOP, which is currently in Energy and Sustainability Solutions, and the core portion of the Process Solutions business, which is currently in Industrial Automation. The new composition of Industrial Automation will continue to include the smart energy, thermal solutions, and process measurement and control businesses, currently included in the Process Solutions business, as well as the Sensing and Safety Technologies, Warehouse and Workflow Solutions, and Productivity Solutions and Services businesses. Following the realignment, our reportable business segments will be Aerospace Technologies, Building Automation, Process Automation and Technology, and Industrial Automation. In addition to the realignment, also beginning in 2026, the Company will report its disaggregation of revenue within its Building Automation, Process Automation and Technology, and Industrial Automation segments based on the business models of Products, Projects, Solutions, and Aftermarket. The realignment will not impact our historical consolidated financial position, results of operations, or cash flows. We expect to report our financial performance based on this realignment effective with the first quarter of 2026.
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RESULTS OF OPERATIONS
Consolidated Financial Results
Net Sales by Segment
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Segment Profit by Segment
CONSOLIDATED OPERATING RESULTS
Net Sales
The change in Net sales was attributable to the following:
| 2025 Versus 2024 | 2024 Versus 2023 | |
|---|---|---|
| Volume | 3 % | 1 % |
| Price | 4 % | 2 % |
| Foreign currency translation | —% | (1)% |
| Acquisitions | 4% | 3% |
| Divestitures | (2 %) | — % |
| Other1 | (1 %) | — % |
| Total % change in Net sales | 8 % | 5 % |
| Column 1 | Column 2 |
|---|---|
| 1 | Includes litigation matters considered to be unusual and not indicative of the Company's ongoing performance. |
A discussion of Net sales by reportable business segment can be found in the Review of Business Segments section of this Management's Discussion and Analysis.
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2025 compared with 2024
Net sales increased due to the following:
•Increased pricing and price adjustments to offset inflation,
•Incremental sales from recent acquisitions, and
•Higher sales volumes,
•Partially offset by lower sales from the divestiture of the PPE business, and
•The sales impact of the settlement of the Flexjet-related litigation matters. Refer to Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for further information regarding the Flexjet-related litigation matters.
2024 compared with 2023
Net sales increased due to the following:
•Incremental sales from recent acquisitions,
•Increased pricing and price adjustments to offset inflation, and
•Higher sales volumes,
•Partially offset by unfavorable impact of foreign currency translation, driven by the strengthening of the U.S. dollar against the Turkish lira, Chinese renminbi, and Canadian dollar, offset by the weakening of the U.S. dollar against the British pound.
Cost of Products and Services Sold
2025 compared with 2024
Cost of products and services sold increased due to the following:
•Incremental costs from recent acquisitions of approximately $0.9 billion or 4%,
•Higher direct and indirect material costs and higher labor costs of approximately $0.7 billion or 3%, and
•Higher sales volumes of approximately $0.6 billion or 3%.
2024 compared with 2023
Cost of products and services sold increased due to the following:
•Higher direct and indirect material costs and higher labor costs of approximately $0.8 billion or 4%, and
•Incremental costs from recent acquisitions of approximately $0.5 billion or 2%,
•Partially offset by higher productivity of approximately $0.3 billion or 1%.
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Gross Margin
2025 compared with 2024
Gross margin increased by approximately $0.5 billion and gross margin as a percentage of Net sales decreased 160 basis points to 36.9% compared to 38.5% for the same period of 2024.
2024 compared with 2023
Gross margin increased by approximately $1.0 billion and gross margin as a percentage of Net sales increased 100 basis points to 38.5% compared to 37.5% for the same period of 2023.
Research and Development Expenses
2025 compared with 2024
Research and development expenses increased as a percentage of net sales primarily due to increased investment in new product development in our Aerospace Technologies business.
2024 compared with 2023
Research and development expenses slightly increased but were flat as a percentage of Net sales.
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A summary of our research and development costs for the years ended December 31, 2025, 2024, and 2023, is as follows:
| 2025 | 2024 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Company funded research and development expenses | $ | 1,812 | $ | 1,454 | $ | 1,375 | ||||
| Customer-sponsored research and development1 | 1,074 | 1,105 | 1,145 | |||||||
| Total research and development costs | $ | 2,886 | $ | 2,559 | $ | 2,520 |
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| 1 | Includes expenditures on customer programs with significant engineering performance obligations and deferred customer funded nonrecurring engineering and development activities included in Cost of products and services sold in the Consolidated Statement of Operations. |
Selling, General and Administrative Expenses
2025 compared with 2024
Selling, general and administrative expenses increased due to the following:
•Incremental costs from acquisitions of approximately $0.2 billion or 4%, and
•Higher labor costs of approximately $0.1 billion or 2%,
•Partially offset by higher productivity of approximately $0.1 billion or 2%.
2024 compared with 2023
Selling, general and administrative expenses increased due to the following:
•Higher labor costs of approximately $0.2 billion or 4%, and
•Incremental costs from acquisitions of approximately $0.2 billion or 4%,
•Partially offset by higher productivity of approximately $0.1 billion or 2%.
Impairment of Goodwill
| 2025 | 2024 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Impairment of goodwill | $ | 724 | $ | — | $ | — |
2025 compared with 2024
Impairment of goodwill increased due to an impairment charge related to the classification of the Productivity Solutions and Services and Warehouse and Workflow Solutions businesses as held for sale during the year ended December 31, 2025.
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Impairment of Assets Held for Sale
| 2025 | 2024 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Impairment of assets held for sale | $ | 270 | $ | 219 | $ | — |
2025 compared with 2024
Impairment of assets held for sale increased due to the classification of the Productivity Solutions and Services and Warehouse and Workflow Solutions business as held for sale during the year ended December 31, 2025.
2024 compared with 2023
Impairment of assets held for sale increased due to the classification of our personal protective equipment business as held for sale during the year ended December 31, 2024.
Other (Income) Expense
| 2025 | 2024 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Other (income) expense | $ | (1,247) | $ | (843) | $ | (830) |
2025 compared with 2024
Other income increased due to the following:
•Gain recognized on Resideo termination agreement of approximately $0.8 billion,
•Partially offset by higher divestiture-related costs of approximately $0.4 billion.
2024 compared with 2023
Other income was largely flat.
Interest and Other Financial Charges
| 2025 | 2024 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Interest and other financial charges | $ | 1,344 | $ | 1,048 | $ | 749 |
2025 compared with 2024
Interest and other financial charges increased due primarily to issuances of long-term debt in August 2024.
2024 compared with 2023
Interest and other financial charges increased due to issuances of long-term debt during the year ended December 31, 2024.
Tax Expense
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2025 compared with U.S. Statutory Rate
The effective tax rate for 2025 was lower than the U.S. federal statutory rate of 21% as a result of the following:
•Tax credits, representing a 400 basis-point decrease, and
•Nontaxable return of basis on the Resideo termination agreement, representing a 310 basis-point decrease,
•Partially offset by nondeductible impairment charges representing a 300 basis-point increase, and
•Changes in accruals on global tax matters, representing a 210 basis-point increase.
2024 compared with U.S. Statutory Rate
The effective tax rate for 2024 was lower than the U.S. federal statutory rate of 21% as a result of the following:
•Tax credits, representing a 220 basis-point decrease, and
•Tax benefits on non-U.S. earnings, representing a 170 basis-point decrease,
•Partially offset by state, local and global minimum taxes, representing a 160 basis-point increase, and
•Changes in accruals on global tax matters, representing a 160 basis-point increase.
See Note 5 Income Taxes of Notes to Consolidated Financial Statements for further discussion of changes in the effective tax rate.
Net Income from Continuing Operations
2025 compared with 2024
Earnings per share of common stock from continuing operations–assuming dilution was flat due to the following:
•Impairment of goodwill ($1.10 after tax),
•Higher divestiture-related costs ($0.54 after tax),
•Higher interest and other financial charges ($0.36 after tax), and
•Increase to estimated future environmental liabilities ($0.25 after tax),
•Partially offset by the gain recognized on Resideo termination agreement ($1.22 after tax), and
•Higher segment profit ($0.56 after tax).
2024 compared with 2023
Earnings per share of common stock from continuing operations–assuming dilution increased due to the following:
•Lower repositioning and other charges ($0.72 after tax), and
•Lower share count ($0.15 after tax),
•Partially offset by higher interest expense ($0.36 after tax), and
•Impairment charges on assets held for sale ($0.33 after tax).
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TABLE OF CONTENTS
REVIEW OF BUSINESS SEGMENTS
We globally manage our business operations through four reportable business segments: Aerospace Technologies, Industrial Automation, Building Automation, and Energy and Sustainability Solutions.
AEROSPACE TECHNOLOGIES
Net Sales
| 2025 | 2024 | Change2025vs.2024 | 2023 | Change2024vs.2023 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | $ | 17,510 | $ | 15,458 | 13 | % | $ | 13,624 | 13 | % | |||||||
| Cost of products and services sold | 11,282 | 9,781 | 8,362 | ||||||||||||||
| Selling, general and administrative and other expenses | 1,944 | 1,689 | 1,502 | ||||||||||||||
| Segment profit | $ | 4,284 | $ | 3,988 | 7 | % | $ | 3,760 | 6 | % |
| Factors Contributing to Year-Over-Year Change | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Sales | Segment Profit | Net Sales | Segment Profit | ||||||||
| Reported percent change | 13 | % | 7 | % | 13 | % | 6 | % | |||
| Less: Impact of divestitures to the prior period | — | % | — | % | — | % | — | % | |||
| Reported percent change, adjusted for impact of divestitures | 13 | % | 7 | % | 13 | % | 6 | % | |||
| Less: Foreign currency translation | — | % | — | % | — | % | — | % | |||
| Less: Acquisitions | 3 | % | — | % | 2 | % | 1 | % | |||
| Less: Other2 | (2) | % | (9) | % | — | % | — | % | |||
| Organic percent change1 | 12 | % | 16 | % | 11 | % | 5 | % |
| 1 | Organic sales % change, presented for all of our reportable business segments, is defined as the change in Net sales, adjusted for the impact of divestitures to the prior period, and excluding the impact on sales from foreign currency translation, acquisitions for the first 12 months following the transaction date, and certain other items that are unusual or non-recurring in nature. We believe this non-GAAP measure is useful to investors and management in understanding the ongoing operations and analysis of ongoing operating trends. | |
|---|---|---|
| 2 | Includes Flexjet-related litigation matters, which are considered to be unusual and not indicative of the Company's ongoing performance. |
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2025 compared with 2024
Sales increased $2,052 million due to higher organic sales of $639 million in Defense and Space and higher organic sales of $636 million in Commercial Aviation Aftermarket, both driven by higher sales volume due to increased demand and shipments. Additionally, the acquisitions of CAES and Civitanavi Systems contributed $485 million of inorganic sales in 2025. Beginning September 2025, the results of CAES and Civitanavi Systems are considered organic.
During the fourth quarter of 2025, our Commercial Aviation Aftermarket business recorded charges for the settlement negotiations with Flexjet and the other parties to related litigation matters. Based on negotiations as of December 31, 2025, Aerospace Technologies' sales and segment profit for 2025 decreased by approximately $310 million and $370 million, respectively. Refer to Note 19 Commitments and Contingencies of Notes to Consolidated Financial Statements for further information regarding the Flexjet-related litigation matters.
During the fourth quarter of 2024, our Commercial Aviation Original Equipment business entered into a strategic agreement with Bombardier (the Bombardier Agreement) to provide advanced technology for current and future Bombardier aircraft in avionics, propulsion, and satellite communications technologies. Aerospace Technologies' sales and segment profit for 2024 decreased by approximately $370 million due to the Bombardier Agreement.
Segment profit increased $296 million and segment margin decreased 130 basis points to 24.5% compared to 25.8% for the same period of 2024.
2024 compared with 2023
Sales increased $1,834 million due to higher organic sales of $907 million in Commercial Aviation Aftermarket driven by higher sales volumes in air transport due to an increase in flight hours and higher organic sales of $772 million in Defense and Space driven by higher sales volumes due to increased shipments. Additionally, the acquisitions of CAES and Civitanavi Systems contributed $332 million to 2024 sales.
Additionally, Aerospace Technologies' sales and segment profit for 2024 decreased by approximately $370 million due to the Bombardier Agreement.
Segment profit increased $228 million and segment margin percentage decreased 180 basis points to 25.8% compared to 27.6% for the same period of 2023.
INDUSTRIAL AUTOMATION
Net Sales
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| 2025 | 2024 | Change2025vs.2024 | 2023 | Change2024vs.2023 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | $ | 9,401 | $ | 10,051 | (6) | % | $ | 10,756 | (7) | % | |||||||
| Cost of products and services sold | 5,492 | 5,880 | 6,379 | ||||||||||||||
| Selling, general and administrative and other expenses | 2,166 | 2,209 | 2,168 | ||||||||||||||
| Segment profit | $ | 1,743 | $ | 1,962 | (11) | % | $ | 2,209 | (11) | % |
| Factors Contributing to Year-Over-Year Change | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Sales | Segment Profit | Net Sales | Segment Profit | ||||||||
| Reported percent change | (6) | % | (11) | % | (7) | % | (11) | % | |||
| Less: Impact of divestitures to the prior period | (6) | % | (5) | % | — | % | — | % | |||
| Reported percent change, adjusted for impact of divestitures | — | % | (6) | % | (7) | % | (11) | % | |||
| Less: Foreign currency translation | — | % | — | % | (1) | % | (1) | % | |||
| Less: Acquisitions | — | % | — | % | 1 | % | 1 | % | |||
| Less: Other | — | % | — | % | — | % | — | % | |||
| Organic percent change | — | % | (6) | % | (7) | % | (11) | % |
2025 compared with 2024
Sales decreased $650 million due to the sale of our PPE business within our Sensing and Safety Technologies business on May 21, 2025.
Segment profit decreased $219 million and segment margin decreased 100 basis points to 18.5% compared to 19.5% for the same period in 2024.
On July 8, 2025, the Company announced it is evaluating strategic alternatives for its Productivity Solutions and Services and Warehouse and Workflow Solutions businesses. Following the Company's strategic review, the assets and liabilities of these businesses are classified as held for sale as of December 31, 2025.
2024 compared with 2023
Sales decreased $705 million due to lower organic sales of $527 million in Warehouse and Workflow Solutions driven by lower demand for projects and lower organic sales of $155 million in Sensing and Safety Technologies driven by lower demand for personal protective equipment.
During the second quarter of 2022, our Productivity Solutions and Services business entered into a license and settlement agreement (the Agreement). Under the Agreement, we received $360 million, paid in equal quarterly installments over eight quarters, beginning with the second quarter of 2022 and ending with the first quarter of 2024. The Agreement provides each party a license to its existing patent portfolio for use by the other party’s existing products and resolved the patent-related litigation between the parties.
Segment profit decreased $247 million and segment margin percentage decreased 100 basis points to 19.5% compared to 20.5% for the same period in 2023.
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BUILDING AUTOMATION
Net Sales
| 2025 | 2024 | Change2025vs.2024 | 2023 | Change2024vs.2023 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | $ | 7,367 | $ | 6,540 | 13 | % | $ | 6,031 | 8 | % | |||||||
| Cost of products and services sold | 3,832 | 3,482 | 3,240 | ||||||||||||||
| Selling, general and administrative and other expenses | 1,582 | 1,377 | 1,262 | ||||||||||||||
| Segment profit | $ | 1,953 | $ | 1,681 | 16 | % | $ | 1,529 | 10 | % |
| Factors Contributing to Year-Over-Year Change | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Sales | Segment Profit | Net Sales | Segment Profit | ||||||||
| Reported percent change | 13 | % | 16 | % | 8 | % | 10 | % | |||
| Less: Impact of divestitures to the prior period | — | % | — | % | — | % | — | % | |||
| Reported percent change, adjusted for impact of divestitures | 13 | % | 16 | % | 8 | % | 10 | % | |||
| Less: Foreign currency translation | — | % | — | % | (1) | % | — | % | |||
| Less: Acquisitions | 5 | % | 6 | % | 7 | % | 10 | % | |||
| Less: Other | — | % | — | % | — | % | — | % | |||
| Organic percent change | 8 | % | 10 | % | 2 | % | — | % |
2025 compared with 2024
Sales increased $827 million due to higher organic sales of $287 million in Products and higher organic sales of $217 million in Building Solutions, both driven by higher demand. Additionally, the acquisition of Access Solutions contributed $302 million of inorganic sales growth during 2025. Beginning June 2025, the results of Access Solutions are considered organic.
Segment profit increased $272 million and segment margin increased 80 basis points to 26.5% compared to 25.7% for the same period of 2024.
2024 compared with 2023
Sales increased $509 million due to higher organic sales of $245 million in Building Solutions driven by higher demand for building projects and services, partially offset by lower organic sales of $124 million in Products driven by lower demand. The acquisition of Access Solutions contributed $424 million to 2024 sales.
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Segment profit increased $152 million and segment margin percentage increased 30 basis points to 25.7% compared to 25.4% for the same period of 2023.
ENERGY AND SUSTAINABILITY SOLUTIONS
Net Sales
| 2025 | 2024 | Change2025vs.2024 | 2023 | Change2024vs.2023 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales | $ | 3,134 | $ | 2,644 | 19 | % | $ | 2,586 | 2 | % | |||||||
| Cost of products and services sold | 1,873 | 1,562 | 1,599 | ||||||||||||||
| Selling, general and administrative and other expenses | 569 | 467 | 418 | ||||||||||||||
| Segment profit | $ | 692 | $ | 615 | 13 | % | $ | 569 | 8 | % |
| Factors Contributing to Year-Over-Year Change | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Sales | Segment Profit | Net Sales | Segment Profit | ||||||||
| Reported percent change | 19 | % | 13 | % | 2 | % | 8 | % | |||
| Less: Impact of divestitures to the prior period | — | % | — | % | — | % | — | % | |||
| Reported percent change, adjusted for impact of divestitures | 19 | % | 13 | % | 2 | % | 8 | % | |||
| Less: Foreign currency translation | — | % | 1 | % | — | % | — | % | |||
| Less: Acquisitions | 20 | % | 31 | % | 2 | % | 5 | % | |||
| Less: Other | — | % | — | % | — | % | — | % | |||
| Organic percent change | (1) | % | (19) | % | — | % | 3 | % |
2025 compared with 2024
Sales increased $490 million due to inorganic sales growth from the acquisitions of LNG and Sundyne. Beginning October 2025, the results of LNG are considered organic.
Segment profit increased $77 million and segment margin decreased 120 basis points to 22.1% compared to 23.3% for the same period of 2024.
2024 compared with 2023
Sales increased $58 million driven by inorganic sales growth from the acquisition of LNG.
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Segment profit increased $46 million and segment margin increased 130 basis points to 23.3% compared to 22.0% for the same period of 2023.
CORPORATE AND ALL OTHER
Corporate and All Other primarily includes unallocated corporate costs, interest expense on holding-company debt, and the controlling majority-owned interest in Quantinuum. Corporate expenses historically allocated to Advanced Materials and not eligible to be part of discontinued operations are now included in Corporate and All Other. Corporate and All Other is not a separate reportable business segment as segment reporting criteria is not met. The Company continues to monitor the activities in Corporate and All Other to determine the need for further reportable business segment disaggregation.
REPOSITIONING CHARGES
See Note 4 Repositioning and Other (Gains) Charges of Notes to Consolidated Financial Statements for a discussion of our repositioning actions and related charges incurred in 2025, 2024, and 2023. Cash spending related to our repositioning actions was $153 million, $189 million, and $280 million in 2025, 2024, and 2023, respectively, and was funded through operating cash flows.
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TABLE OF CONTENTS