HONEYWELL INTERNATIONAL INC.CONSOLIDATED BALANCE SHEET

December 31,2012 2011

(Dollars in millions)ASSETSCurrent assets:

Cash and cash equivalents $ 4,634 $ 3,698 Accounts, notes and other receivables 7,429 7,228 Inventories 4,235 4,264 Deferred income taxes 669 460 Investments and other current assets 631 484

Total current assets 17,598 16,134 Investments and long-term receivables 623 494 Property, plant and equipment—net 5,001 4,804 Goodwill 12,425 11,858 Other intangible assets—net 2,449 2,477 Insurance recoveries for asbestos related liabilities 663 709 Deferred income taxes 1,889 2,132 Other assets 1,205 1,200

Total assets $ 41,853 $ 39,808 LIABILITIESCurrent liabilities:

Accounts payable $ 4,736 $ 4,738 Short-term borrowings 76 60 Commercial paper 400 599 Current maturities of long-term debt 625 15 Accrued liabilities 7,208 6,863

Total current liabilities 13,045 12,275 Long-term debt 6,395 6,881 Deferred income taxes 628 676 Postretirement benefit obligations other than pensions 1,365 1,417 Asbestos related liabilities 1,292 1,499 Other liabilities 5,913 6,158 Redeemable noncontrolling interest 150 — SHAREOWNERS’ EQUITYCapital—common stock issued 958 958

—additional paid-in capital 4,358 4,157 Common stock held in treasury, at cost (8,801 ) (8,948 )Accumulated other comprehensive income (loss) (1,339 ) (1,444 )Retained earnings 17,799 16,083

Total Honeywell shareowners’ equity 12,975 10,806 Noncontrolling interest 90 96

Total shareowners’ equity 13,065 10,902 Total liabilities, redeemable noncontrolling interest and shareowners’ equity $ 41,853 $ 39,808

The Notes to Financial Statements are an integral part of this statement.

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HONEYWELL INTERNATIONAL INC.NOTES TO FINANCIAL STATEMENTS

(Dollars in millions, except per share amounts)

Note 1—Summary of Significant Accounting PoliciesAccounting Principles—The financial statements and accompanying notes are prepared in accordance with accounting

principles generally accepted in the United States of America. The following is a description of Honeywell’s significantaccounting policies.

Principles of Consolidation—The consolidated financial statements include the accounts of Honeywell International Inc.and all of its subsidiaries and entities in which a controlling interest is maintained. Our consolidation policy requires equityinvestments that we exercise significant influence over but do not control the investee and are not the primary beneficiary ofthe investee’s activities to be accounted for using the equity method. Investments through which we are not able to exercisesignificant influence over the investee and which we do not have readily determinable fair values are accounted for under thecost method. All intercompany transactions and balances are eliminated in consolidation.

The Consumer Products Group (CPG) automotive aftermarket business had historically been part of the TransportationSystems reportable segment. In accordance with generally accepted accounting principles, CPG is presented asdiscontinued operations in all periods presented. See Note 2 Acquisitions and Divestitures for further details.

Noncontrolling interest is included within the equity section in the Consolidated Balance Sheet. Redeemable noncontrollinginterest is considered to be temporary equity and is therefore reported outside of permanent equity on the Company’sConsolidated Balance Sheet at the greater of the initial carrying amount adjusted for the noncontrolling interest’s share of netincome (loss) or its redemption value. We present the amount of consolidated net income that is attributable to Honeywell andthe noncontrolling interest in the Consolidated Statement of Operations. Furthermore, we disclose the amount of comprehensiveincome that is attributable to Honeywell and the noncontrolling interest in the Consolidated Statement of ComprehensiveIncome.

Cash and Cash Equivalents—Cash and cash equivalents include cash on hand and on deposit and highly liquid,temporary cash investments with an original maturity of three months or less.

Inventories—Inventories are valued at the lower of cost or market using the first-in, first-out or the average cost methodand the last-in, first-out (LIFO) method for certain qualifying domestic inventories.

Investments—Investments in affiliates over which we have a significant influence, but not a controlling interest, areaccounted for using the equity method of accounting. Other investments are carried at market value, if readily determinable, orat cost. All equity investments are periodically reviewed to determine if declines in fair value below cost basis are other-than-temporary. Significant and sustained decreases in quoted market prices or a series of historic and projected operating lossesby investees are strong indicators of other-than-temporary declines. If the decline in fair value is determined to be other- than-temporary, an impairment loss is recorded and the investment is written down to a new carrying value.

Property, Plant and Equipment—Property, plant and equipment are recorded at cost, including any asset retirementobligations, less accumulated depreciation. For financial reporting, the straight-line method of depreciation is used over theestimated useful lives of 10 to 50 years for buildings and improvements and 2 to 16 years for machinery and equipment.Recognition of the fair value of obligations associated with the retirement of tangible long-lived assets is required when there isa legal obligation to incur such costs. Upon initial recognition of a liability, the cost is capitalized as part of the related long-livedasset and depreciated over the corresponding asset’s useful life. See Note 11 Property, Plant and Equipment - Net and Note17 Other Liabilities of Notes to the Financial Statements for additional details.

Goodwill and Indefinite-Lived Intangible Assets —Goodwill represents the excess of acquisition costs over the fairvalue of tangible net assets and identifiable intangible assets of businesses acquired. Goodwill and certain other intangibleassets deemed to have indefinite lives are not

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HONEYWELL INTERNATIONAL INC.NOTES TO FINANCIAL STATEMENTS—(Continued)

(Dollars in millions, except per share amounts)

Note 8—Accounts, Notes and Other Receivables

December 31,2012 2011

Trade $ 6,940 $ 6,926 Other 715 555

7,655 7,481 Less—Allowance for doubtful accounts (226 ) (253 )

$ 7,429 $ 7,228

Trade Receivables includes $1,495, and $1,404 million of unbilled balances under long-term contracts as of December31, 2012 and December 31, 2011, respectively. These amounts are billed in accordance with the terms of customer contractsto which they relate.

Note 9—Inventories

December 31,2012 2011

Raw materials $ 1,152 $ 1,222 Work in process 859 958 Finished products 2,421 2,253

4,432 4,433 Reduction to LIFO cost basis (197 ) (169 )

$ 4,235 $ 4,264

Inventories valued at LIFO amounted to $325 and $302 million at December 31, 2012 and 2011, respectively. Had suchLIFO inventories been valued at current costs, their carrying values would have been approximately $197 and $169 millionhigher at December 31, 2012 and 2011, respectively.

Note 10—Investments and Long-Term Receivables

December 31,2012 2011

Investments $ 424 $ 362 Long-term trade and other receivables 168 81 Long-term financing receivables 31 51

$ 623 $ 494

Long-Term Trade and Other Receivables include $31 million and $29 million of unbilled balances under long-termcontracts as of December 31, 2012 and 2011, respectively. These amounts are billed in accordance with the terms of thecustomer contracts to which they relate.

The following table summarizes long term trade, financing and other receivables by segment, including current portionsand allowances for credit losses.

December 31,2012

Aerospace $ 11 Automation and Control Solutions 89 Performance Materials and Technologies 9 Transportation Systems 15 Corporate 73

$ 197

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