Honeywell International Inc. (NASDAQ:HON)

Goodwill

The goodwill balance exhibits a generally increasing trend, rising from 16,058 million USD in 2020 to 21,825 million USD in 2024. There was a slight dip in 2022 to 17,497 million USD, followed by steady growth thereafter, indicating ongoing acquisitions or reassessments positively impacting the asset value.

Patents and Technology

This category shows a gradual increase from 2,159 million USD in 2020 to 3,513 million USD in 2024. The growth accelerates notably in 2024, suggesting significant investments in intellectual property or capitalized development costs during the last year.

Customer Relationships

Customer relationships also demonstrate a rising trend, increasing from 3,889 million USD in 2020 to 6,411 million USD in 2024. The upward movement is steady, with a marked increase in the final year, likely reflecting enhanced customer base valuation or acquisition-related intangibles.

Trademarks

The trademarks value, considered separately here, fluctuates mildly. Beginning at 327 million USD in 2020, it increases gradually to 398 million USD in 2024. The growth is modest and relatively stable over the period.

Other Intangible Assets

Other intangible assets exhibit a consistent value around 298-299 million USD from 2020 to 2023, then show a substantial increase to 561 million USD in 2024, suggesting recognition of additional intangible assets or reevaluation.

Definite-life Intangibles, Gross Carrying Amount

The gross carrying amount of definite-life intangibles remains fairly stable from 2020 through 2023, fluctuating between 6,673 and 7,259 million USD, followed by a sharp rise to 10,883 million USD in 2024, indicating significant capital investments or acquisitions impacting this asset category.

Accumulated Amortization

Accumulated amortization increases steadily (in absolute terms) from -4,159 million USD in 2020 to -4,999 million USD in 2023, then decreases to -4,666 million USD in 2024. The slight reduction in 2024 may reflect adjustments in amortization schedules or asset impairments.

Definite-life Intangibles, Net Carrying Amount

The net carrying amount of definite-life intangibles shows a decline from 2,514 million USD in 2020 to roughly 2,260 million USD in 2023, followed by a significant jump to 6,217 million USD in 2024. This pattern aligns with the gross carrying amount increases and accumulated amortization changes, confirming asset additions or revaluation effects in 2024.

Indefinite-life Intangibles

Indefinite-life intangibles decline consistently from 1,046 million USD in 2020 to 439 million USD in 2024, reflecting either impairments, disposals, or reclassification during the period.

Other Intangible Assets, Net

The net balance of other intangible assets drops gradually from 3,560 million USD in 2020 to 3,222 million USD in 2022, then remains nearly stable up to 2023 before sharply increasing to 6,656 million USD in 2024, which corresponds with the rise in other intangible components discussed above.

Goodwill and Other Intangible Assets, Net

The combined net value of goodwill and other intangible assets moves upward overall, starting at 19,618 million USD in 2020, peaking slightly in 2021 at 21,369 million USD, dipping in 2022, recovering in 2023, and culminating in a marked rise to 28,481 million USD in 2024. This significant increase underscores a strategic accumulation or revaluation of intangible assets in the final year.

The financial data reveals several notable trends in both reported and goodwill adjusted metrics over the five-year span ending in 2024.

Assets

Reported total assets show a slight decline from 64,586 million USD in 2020 to 61,525 million USD in 2023, followed by a significant increase to 75,196 million USD in 2024. In contrast, adjusted total assets—which exclude goodwill—demonstrate a consistent downward trajectory each year from 48,528 million USD in 2020 to 43,476 million USD in 2023, before rebounding to 53,371 million USD in 2024. This pattern suggests that while the company’s asset base contracted when goodwill is removed, a notable asset increase occurred in the final year across both reported and adjusted measures, likely driven by acquisitions or asset revaluation.

Shareowners’ Equity

The reported total Honeywell shareowners’ equity exhibits a fluctuating trend, increasing from 17,549 million USD in 2020 to a peak of 18,569 million USD in 2021, then declining to 15,856 million USD by 2023, and recovering to 18,619 million USD in 2024. In stark contrast, the adjusted total equity (excluding goodwill) declines sharply from 1,491 million USD in 2020 to negative territory in 2022, reaching -2,193 million USD in 2023 and further dropping to -3,206 million USD in 2024. This negative adjusted equity indicates substantial goodwill impairment or adjustments that erode the company’s net worth when goodwill is excluded.

Insights

The divergence between reported and adjusted figures highlights the material impact of goodwill on the company's balance sheet. While reported figures suggest stability with an eventual increase in asset and equity values by 2024, the adjusted figures reveal an underlying erosion of tangible asset value and equity base over time. This pattern may signal risks related to the valuation of intangible assets and the sustainability of equity when goodwill is discounted. The sudden increase in 2024 in both reported and adjusted assets and reported equity could imply strategic investments or acquisitions, though adjusted equity remains negative, indicating ongoing concerns about asset quality without goodwill inclusion.

The analysis of the financial data reveals several key trends in performance ratios over the five-year period.

Total Asset Turnover

The reported total asset turnover ratio showed a general rising trend from 0.51 in 2020 to 0.60 in 2023, indicating improving efficiency in using assets to generate sales. However, it declined to 0.51 in 2024. The adjusted total asset turnover, which excludes goodwill, was consistently higher than the reported figures and displayed a steady increase from 0.67 in 2020 to 0.84 in 2023 before declining to 0.72 in 2024. This suggests that the company’s asset utilization excluding goodwill improved notably until 2023 but weakened in the latest year.

Financial Leverage

The reported financial leverage steadily increased over the period, moving from 3.68 in 2020 to 4.04 in 2024. This indicates the company has been incrementally increasing its use of debt relative to equity. The adjusted financial leverage showed a very high and volatile pattern for 2020 and 2021, with values of 32.55 and 57.46 respectively, but no data is available for subsequent years, restricting the ability to analyze longer-term trends in leverage excluding goodwill.

Return on Equity (ROE)

Reported ROE demonstrated an upward trajectory from 27.23% in 2020 to a peak of 35.68% in 2023, followed by a decline to 30.64% in 2024. This pattern reflects an improvement in generating earnings from shareholders' equity until 2023 and a partial reversal thereafter. The adjusted ROE figures were markedly higher in 2020 and 2021, at 320.52% and 681.67%, but are unavailable for the later years, making further assessment impossible. The extremely high adjusted ROE values suggest significant amplification effects excluding goodwill impact during those years.

Return on Assets (ROA)

The reported ROA generally increased from 7.40% in 2020 to a peak of 9.20% in 2023, before declining to 7.59% in 2024. This indicates an overall improvement in the efficiency of asset utilization to generate net income over the initial years, slightly reversed in the most recent year. Adjusted ROA followed a similar pattern but with consistently higher values, rising from 9.85% in 2020 to 13.01% in 2023, then decreasing to 10.69% in 2024. This implies that excluding goodwill, asset profitability improved notably up to 2023, with a subsequent downturn in 2024.

Overall, the data reflects improving operational efficiency and profitability metrics through 2023, with some moderation in 2024. The adjusted figures, which exclude goodwill, generally demonstrate stronger performance ratios, suggesting that goodwill affects the reported results by diluting these efficiency and profitability measures. The increasing financial leverage ratio indicates a growing reliance on debt financing, which may have contributed to increased returns on equity but also presents elevated financial risk if the trend continues.

The analysis of the financial data over the five-year period reveals notable trends in both reported and goodwill adjusted figures.

Total Assets

Reported total assets remained relatively stable from 2020 to 2023, with a slight decline from 64,586 million US$ in 2020 to 61,525 million US$ in 2023. However, in 2024, there was a significant increase to 75,196 million US$, representing a sizeable jump compared to previous years.

Adjusted total assets, which exclude goodwill, showed a consistent downward trend from 48,528 million US$ in 2020 to 43,476 million US$ in 2023. Similar to the reported figures, adjusted total assets increased in 2024 to 53,371 million US$, indicating a reversal of the prior declining trend but not reaching the levels reported in 2020.

Total Asset Turnover

The reported total asset turnover ratio improved steadily from 0.51 in 2020 to 0.60 in 2023, suggesting enhanced efficiency in utilizing reported assets to generate revenue during this period. In 2024, this ratio decreased back to 0.51, indicating a decline in asset utilization efficiency despite the increase in total assets.

Adjusted total asset turnover ratio showed a similar pattern but at higher levels than the reported figures. It increased consistently from 0.67 in 2020 to 0.84 in 2023, demonstrating improved operational efficiency when goodwill adjustments are considered. The ratio then decreased to 0.72 in 2024, which, while lower than the prior year, remains substantially higher than the initial value in 2020.

Overall, the data suggests that the company demonstrated improving efficiency in asset utilization from 2020 through 2023, particularly when goodwill adjustments are applied. The marked increase in total assets in 2024 accompanied by decreased turnover ratios may indicate an expansion in asset base that has not yet translated into proportional revenue growth. The divergence between reported and adjusted figures highlights the impact of goodwill on asset valuation and turnover metrics over the observed period.

The financial data reveals several notable trends over the five-year period ending December 31, 2024. There are distinct differences between reported figures and those adjusted for goodwill, highlighting the impact of impairment and asset valuation adjustments.

Total Assets

Reported total assets show a relatively stable pattern from 2020 to 2023, slightly declining from approximately US$64.6 billion in 2020 to US$61.5 billion in 2023, followed by a significant increase to US$75.2 billion in 2024. In contrast, adjusted total assets consistently decrease from US$48.5 billion in 2020 to US$43.5 billion in 2023, before rising to US$53.4 billion in 2024. This suggests a substantial goodwill or intangible asset write-down in earlier years with some recovery or revaluation in the final year.

Shareowners’ Equity

Reported total Honeywell shareowners' equity demonstrates a rise from US$17.5 billion in 2020 to a peak of US$18.6 billion in 2021, then declines steadily to US$15.9 billion in 2023, before rebounding to approximately US$18.6 billion in 2024. Meanwhile, adjusted shareowners' equity reveals a markedly different and more concerning trend. Starting at US$1.5 billion in 2020, it sharply decreases to negative values by 2022 (−US$0.8 billion), worsening further to −US$2.2 billion in 2023 and −US$3.2 billion in 2024. This negative equity on an adjusted basis indicates significant impairment affecting the net asset value.

Financial Leverage

Reported financial leverage ratios display moderate fluctuation, decreasing from approximately 3.68 in 2020 to 3.47 in 2021, then gradually increasing to 4.04 by 2024. This pattern suggests an incremental rise in the company’s use of debt relative to equity over the latter years. Adjusted financial leverage figures, available only for the first two years, show extremely high and increasing values from 32.55 in 2020 to 57.46 in 2021, underscoring significant leverage when goodwill adjustments are considered. The absence of adjusted leverage data beyond 2021 likely reflects the negative equity values making such calculations less meaningful.

Overall, the data indicates that while the reported financial position appears relatively stable with growth in assets and a rebound in equity in the latest year, the adjusted results reveal underlying asset impairments and declining net equity. The increasing adjusted financial leverage and negative adjusted equity suggest potential concerns about the quality of reported equity and the impact of goodwill on the company’s financial health.

The analysis of the reported and goodwill adjusted financial data over the five-year period reveals several notable trends and variances.

Shareowners' Equity (Reported)

The reported total Honeywell shareowners' equity exhibited fluctuations, generally hovering between approximately $15.9 billion and $18.6 billion. It increased from $17.5 billion in 2020 to a peak of $18.6 billion in 2024, with a dip to around $15.9 billion in 2023, indicating some variability but an overall mildly positive trend toward the end of the period.

Shareowners' Equity (Adjusted)

The adjusted total shareowners' equity, which accounts for goodwill adjustments, showed a distinctly different pattern. Starting from a positive $1.49 billion in 2020, it significantly declined to a negative $3.21 billion by 2024. This declining trend suggests that the goodwill adjustments materially reduced equity, eventually resulting in a negative balance, highlighting potential impairment or write-down impacts.

Return on Equity (ROE) - Reported

The reported ROE remained relatively strong throughout the period, consistently above 27%, peaking at 35.68% in 2023 before slightly declining to 30.64% in 2024. This suggests that, based on reported figures, the company maintained robust profitability relative to shareholders' equity.

Return on Equity (ROE) - Adjusted

The adjusted ROE values, which consider goodwill adjustments, showed extremely elevated percentages in 2020 and 2021—320.52% and 681.67%, respectively. However, data for the following years (2022-2024) are missing. The disproportionately high adjusted ROE in the initial years likely results from the substantially reduced adjusted equity base due to goodwill deductions, inflating the ROE ratio and indicating distorted profitability measures when adjusted for goodwill.

Overall, the reported data indicate stable equity and strong profitability, whereas the goodwill-adjusted data reflect a deteriorating equity base and potentially misleadingly high ROE figures early on due to the low or negative equity denominator. This contrast suggests that goodwill adjustments have a significant impact on the financial metrics and should be carefully considered in performance evaluation.

Total Assets

Reported total assets exhibited a declining trend from 64,586 million US dollars in 2020 to 61,525 million in 2023, followed by a significant increase to 75,196 million in 2024. Adjusted total assets, which exclude goodwill, similarly decreased from 48,528 million in 2020 to 43,476 million in 2023, then rose to 53,371 million in 2024. The parallel movement in both reported and adjusted totals suggests that asset composition remained consistent despite fluctuations, with a notable asset base expansion in 2024.

Return on Assets (ROA)

The reported ROA demonstrated variability, initially rising from 7.4% in 2020 to 8.6% in 2021, then slightly declining to 7.97% in 2022, followed by an increase to 9.2% in 2023 before decreasing to 7.59% in 2024. This indicates fluctuating profitability relative to total assets, with a peak in 2023. Adjusted ROA, which accounts for asset values excluding goodwill, consistently exceeded reported ROA each year. It increased from 9.85% in 2020 to 11.86% in 2021, experienced a slight drop to 11.09% in 2022, then rose to a peak of 13.01% in 2023, and declined to 10.69% in 2024. These patterns suggest improved operational efficiency excluding goodwill effects, especially visible in the peak years 2021 and 2023, with some normalization in 2024.

Overall Insights

The data reflects a pattern of asset reduction during 2020 through 2023, followed by a marked asset increase in 2024. Profitability as measured by ROA shows fluctuations, with adjusted metrics indicating stronger asset utilization than reported figures throughout the period. The use of adjusted data highlights operational performance excluding intangible assets such as goodwill, revealing higher returns on a diminished asset base until 2023, before both asset base and returns adjusted upward in 2024. The findings imply that goodwill has a dampening effect on reported profitability but that core asset performance remains favorable with periodic volatility.