| Dear Colleague: |
| Today, we announced several important planned changes to our portfolio that will position the Company for sustainable organic sales growth and margin expansion within a more focused set of end markets. You can read the details about these changes – including our intention to spin off our Homes product portfolio and ADI global distribution business as well as our Transportation Systems business into two stand-alone, publicly-traded companies – in this morning’s press release and in our presentation to investors. |
| These are big changes for the Company, and I want to emphasize that regardless of whether an employee will remain with Honeywell or join the new Homes or TS businesses, all employees will continue to be part of dynamic organizations whose top priority is to bring value to their customers by offering technology-differentiated solutions. There will be many new professional opportunities to grow and thrive. Above all, we will be in a terrific position to continue to perform for our customers, our shareowners, and for each other. Let’s remember the spins will likely not occur until late next year and, until then, both businesses will remain fully a part of Honeywell. We must stay focused at all times on doing a great job for our customers and executing on our business plans. |
| The changes announced today follow the completion of a comprehensive review of our portfolio. We evaluated each business unit using numerous criteria, including growth outlook, financial performance, market dynamics, potential for disruption, and, most importantly, assessment of fit as a Honeywell business. We considered which businesses would benefit most from continuing to be part of Honeywell, and which would benefit from independent strategic and capital allocation decision making tailored for their evolving end markets. The remaining Honeywell portfolio will consist of high-growth businesses that are aligned to six attractive industrial end markets, driven by mega trends such as energy efficiency, infrastructure investment, urbanization, and safety. This portfolio will present us with numerous opportunities to pursue organic and inorganic growth and margin expansion through further deployment of our world-class HOS Gold operating system and the Honeywell Sentience Platform. |
| I also want to take this opportunity to welcome Gary Michel to Honeywell in his new role as HBT President and CEO. Gary will report to me and serve as a Company officer. He brings 32 years of leadership experience from Ingersoll-Rand Company, where he demonstrated a deep understanding of his customers and end markets, and the ability to translate this knowledge into technology-differentiated offerings that bring value to customers. Gary succeeds Terrence Hahn, who will move into a leadership role in preparing the Homes Products and ADI businesses for the spin and will continue to report directly to me. I would like to thank Terrence for his leadership in establishing HBT and building on our strong positions in these markets. |
| Finally, I would like to acknowledge the Honeywell Process Solutions team within Performance Materials and Technologies (PMT) in advance for the work they will do to integrate the Smart Energy business into their portfolio. These businesses are a great fit with each other, and we anticipate that their combination will allow us to expand our industrial metering, control system,and software capabilities and serve a broader set of customers. |
| As a reminder, I will be hosting an all-employee global town meeting at 11 a.m. EDT on Friday, October 20. Please be sure to attend, as I will provide more details and insights into today’s announcements and answer any questions you may have. |
| Thank you for all your hard work and support. |
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