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CORRESP
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filename1.htm

July 1, 2010

Lyn Shenk

Branch Chief

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

 RE:

 Honeywell
 International Inc.

 Form 10-K
 for the year ended December 31, 2009

 Form 10-Q for the quarterly period ended April 3, 2010

 File No. 001-08974

Dear Mr.
Shenk:

This letter
provides Honeywell International Inc.’s (Honeywell) response to your letter to
David J. Anderson dated June 2, 2010, setting forth the Staff’s comments on the
above referenced Form 10-K and Form 10-Q. The numbered paragraphs below
correspond to the numbered paragraphs in your letter.

Form 10-K: For the fiscal year ended December
31, 2009

Item 1 A. Risk Factors

Risk Factors, page 11

 1.

 Staff’s Comment: We note your statement on
 page 11 that “Our business, operating results, cash flows and financial
 condition are subject to various risks and uncertainties, including, without
 limitation, those set forth below, any one of which could cause our actual
 results to vary materially from recent results or from our anticipated future
 results.” In a letter dated August 8, 2008 you represented that you would
 revise this language in future filings. Please tell us why you have not done
 so. Additionally please tell us whether you have discussed all known material
 risks, or as the disclosure suggests, only some material risks.

 Our Response: We will make the revisions
 indicated in our letter dated August 8, 2008 in our Form 10-K for the year
 ending December 31, 2010. This omission in our most recent Form 10-K was an
 unintentional oversight. We hereby confirm that we have disclosed all known
 material risks.

Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations, page 22

 2.

 Staff’s Comment: Please refer to the
 sections of MD&A titled “Consolidated Results of Operations” and “Review
 of Business Segments.” We note that while you have identified certain factors
 that have materially impacted (i) consolidated net sales and consolidated
 costs and (ii) each segment’s net sales and “segment profit,” you have
 provided only limited quantification of the actual financial impact of those
 factors. For example, in your comparative analyses of results of operations
 for fiscal year 2009 to results for fiscal year 2008, you generally have not
 quantified the absolute impact of lower sales volume, lower material costs,
 reduced labor costs (reflecting reduced census, work schedule reductions,
 benefits from prior repositioning actions and lower incentive compensation),
 and/or indirect cost savings on (a) consolidated cost of products and
 services sold, (b) consolidated selling, general and administrative expenses,
 and (c) each segment’s reported profit. Please revise your disclosure to
 quantify the absolute impact of each factor identified, as well as any other
 factor that may have materially impacted your consolidated and/or segment
 results. Refer to section 501.04 of the Codification of Financial Reporting
 Releases for guidance. Please provide your proposed expanded disclosure as
 part of your response.

 Our Response: We will revise our disclosure
 beginning with our Form 10-Q for
 the quarter ended June 30, 2010, to provide additional quantification of
     the financial impact of items that materially impact our consolidated and
     segment results of operations.

 As shown
 below (using full year 2009 results compared to 2008 as an example) we will
 quantify items that materially impact our consolidated cost of products and
 services sold, consolidated selling, general and administrative expenses, and
 each segment’s reported profit. Also, we propose expanding our segment
 disclosure to quantify the impact of organic revenue, operational segment
 profit, foreign exchange and acquisitions and divestitures on revenue and
 segment profit. These are the most significant items that affect
 period-to-period results. For context and ease of review, we have included
 the complete text of the relevant sections below.

 Representative disclosure example for Consolidated Results of
 Operations:

 Cost of Products and Services Sold

 Cost of
 products and services sold decreased by $4,809 million or 17 percent in 2009
 compared with 2008. The decrease is primarily due to an estimated decline in
 direct material costs of approximately $2.8 billion driven substantially by a
 15 percent decrease in sales as a result of the factors discussed within the
 Review of Business Segments section of this MD&A. The remaining decrease
 consists primarily of reduced labor costs (reflecting reduced census, work
 scheduled reductions, benefits

2

 from prior
 repositioning actions and lower incentive compensation), the positive impact
 of indirect cost savings initiatives across each of our Business Segments and
 lower repositioning charges.

 Gross margin increased by 1.6 percent in 2009
 compared with 2008 primarily due to increases of 2.9 and 0.6 percent,
 respectively, in our Specialty Materials and Automation and Control Solutions
 segments due primarily to an estimated decrease in direct material costs of
 approximately $700 million and $650 million, respectively, other cost savings
 initiatives discussed above and lower repositioning charges. This increase
 was partially offset by lower margins in our Transportation Systems and
 Aerospace segments of 3.2 and 0.7 percent, respectively, due to lower sales
 (27% and 15% declines, respectively). The negative impact of lower sales on
 gross margins in these segments was partially offset by an estimated decrease
 in direct material costs of approximately $700 million and $750 million,
 respectively, and the impact of cost savings initiatives.

 Selling, General and Administrative Expense

 Selling
 general and administrative expenses (SG&A) as a percentage of sales increased
 by 0.2 of a percentage point in 2009 compared with 2008. The increase as a
 percentage of sales was driven by the 15 percent decrease in sales,
 substantially offset by i) the positive impact of indirect cost savings
 initiatives across each of our Business Segments, ii) reduced labor costs
 (reflecting reduced census, work schedule reductions, benefits from prior
 repositioning actions and lower incentive compensation), and iii) lower
 repositioning charges, collectively resulting in decreased SG&A expense
 of $692 million.

Representative disclosure example for Review
of Business Segment:

Automation and Control Solutions (ACS)

                    Results
of Operations

 2009

 2008

 2007

  (Dollars in millions)

 Net
 sales

 $

 12,611

 $

 14,018

 $

 12,478

 %
 change compared with prior year

 (10

 )%

 12

 %

 Segment
 profit

 $

 1,588

 $

 1,622

 $

 1,405

 %
 change compared with prior year

 (2

 )%

 15

 %

3

 Factors
 Contributing to Year-Over-Year Change

 2009 vs. 2008

 2008 vs. 2007

 Sales

 Segment

 Profit

 Sales

 Segment

 Profit

 Organic
 revenue / Operational segment profit

 (9%)

 (2%)

 2%

 9%

 Foreign
 exchange

 (4%)

 (2%)

 -

 (1%)

 Acquisitions
 and divestitures, net

 3%

 2%

 10%

 7%

 Total % Change

 (10%)

 (2%)

 12%

 15%

           2009
 compared with 2008

 ACS sales decreased by 10 percent in 2009 compared with 2008,
 primarily due to a 9 percent decrease in organic revenue (driven by decreased
 sales volume reflecting adverse global economic conditions) and an
 unfavorable impact of foreign exchange of 4 percent, partially offset by a 3
 percent growth from acquisitions.

 •         Sales in our
 Products businesses decreased by 11 percent, including (i) lower volumes of
 sales in each of our businesses (excluding the impact of acquisitions) and
 (ii) the unfavorable impact of foreign exchange. Softness in residential and
 industrial end-markets was partially offset by the positive impact of
 acquisitions, most significantly Norcross Safety Products.

 •         Sales in our
 Solutions businesses decreased by 9 percent primarily due to the unfavorable
 impact of foreign exchange and volume decreases largely due to softening
 demand as a result of customer deferral of capital and operating
 expenditures. Orders decreased
 while backlog increased in 2009. Decreased orders are primarily due to the
 unfavorable impact of foreign exchange, softening demand (as noted above) and
 order timing and delays. Higher backlog is primarily due to longer duration
 projects. The impact of these factors was partially offset by the positive
 impact of acquisitions, most significantly the RMG Group.

 ACS segment profit decreased by 2 percent in 2009 compared with 2008
 principally due to a 2 percent negative impact of foreign exchange and a 2
 percent decline in operational segment profit, partially offset by a 2
 percent positive impact of acquisitions and divestitures. The decline in
 operational segment profit is primarily a result of the lower sales,
 discussed above, and inflation, partially offset by lower direct material
 costs (estimated to be approximately $650 billion) as well as, reduced labor
 costs (reflecting reduced census, work schedule reductions, benefits from
 prior repositioning actions and lower incentive compensation) and the
 positive impact of indirect cost savings initiatives.

4

Review of Business Segments, page 26

 3.

 Staff’s Comment: We note that your MD&A
disclosure regarding your segments’ operating results discusses segment
revenue and segment profit, but does not provide a comprehensive analysis of
the costs incurred by your segments. In this regard, we believe that
expanding your disclosure to specifically address the costs recognized by
each segment would (i) allow for a more detailed discussion and analysis of
certain significant captions presented on the face of the statement of
operations (e.g., costs of products sold and costs of services sold) and (ii)
provide a better understanding of whether and how changes in costs have
directly impacted segment profitability and/or profit margin percentage. For
example, we believe that additional disclosure regarding segment costs may
facilitate further quantification and analysis of factors that may have
directly impacted each segment’ s costs of sales and/or profitability during
fiscal years 2008 and 2009, such as changes in sales volume, changes in the
amount of research and development expense incurred, increases in costs
attributable to acquired businesses, and fluctuations in raw material and/or
component costs due to changes in procurement activities (e.g., the
expiration of certain of your Aerospace segments’ long-term fixed supplier
price agreements in 2009, as discussed on page 8 of the “Business” section of
your Form 10-K). Furthermore, it would appear that a detailed analysis of
segment costs would provide additional insight regarding the effectiveness of
the repositioning activities and cost saving initiatives implemented at each
segment. Please revise your MD&A disclosure accordingly, or advise. In
connection with your expanded disclosure, consider (a) utilizing tables to
identify, quantify, and present the various material costs incurred by each
segment (i.e., including material components of cost of sales and changes
thereto) and (b) revising your narrative disclosure to discuss any material
fluctuations in the amounts presented in those tables. Provide your proposed
expanded disclosure as part of your response.

 Our Response: We will revise our disclosure beginning
     with our Form 10-Q for the quarter ended June 30, 2010, as described
     in the response to the Staff’s Comment 2 above.

 4.

 Staff’s Comment: Please analyze the relative
 factors that drive variances in the gross profit margin percentage for each
 segment to the extent not apparent from your analysis of variances in revenue
 and costs of revenues. Although a detailed discussion of the drivers
 underlying variances in revenues and associated costs may be presented within
 the respective segment analyses, the relative weight of each on the gross
 profit margin percentage may not be fully apparent or understood without a
 specific analysis in this regard. Provide your proposed revised disclosure as
 part of your response.

 Our Response: We will revise our disclosure
 beginning with our Form 10-Q for
 the quarter ended June 30, 2010, as described in the response to the Staff’s
 Comment 2 above.

5

Liquidity and Capital Resources

Cash Flow Summary, page 37

 5.

 Staff’s Comment: We note that your MD&A
 discussion of cash provided by operating activities references changes in
 earnings and working capital and/or the period-to-period changes in certain
 reconciling items identified on the face of your statements of cash flows.
 Such references may not sufficiently explain the changes in actual cash
 receipts and cash disbursements, given that (i) earnings and working capital
 are recognized on an accrual basis and (ii) you prepare your statements of
 cash flows using the indirect method. Furthermore, we note that your
 Aerospace segment generates a material percentage of your reported
 consolidated sales revenue. In this regard, we note that the timing of
 revenue and expense recognition under the long-term contracts of your
 Aerospace segment may not necessarily correspond with the timing of cash
 receipts and disbursements under such contracts, as contract terms may (a)
 require your customers to make advance payments or (b) result in the
 recognition of deferred revenue or unbilled revenue, for which no cash is received.
 While we acknowledge that your comparison of 2008 cash flows to 2007 cash
 flows refers to changes in customer advances and deferred income, we believe
 a fuller discussion of the impact of such factors and the related underlying
 drivers would be useful, particularly due to the significance of the
 Aerospace segment. For the aforementioned reasons, we believe that you should
 expand your discussion and comparative analysis of cash provided by operating
 activities to place a greater emphasis on the actual cash impact of the
 factors identified. In this regard, we believe your revised disclosure should
 quantify material changes in cash receipts and cash disbursements and discuss
 the underlying factors that resulted in such changes. Please revise your
 disclosure accordingly, or advise. Provide your proposed expanded disclosure
 as part of your response. For further guidance, refer to Section IV.B of our
 interpretive release “Commission Guidance Regarding Management’s Discussion
 and Analysis of Financial Condition and Results of Operations,” which is
 available on our website at http://www.sec.gov/rules/interp33-8350.htm.

 Our Response: Our current disclosure
 highlights and quantifies each of the material changes in our cash flows,
 specifically cash taxes, sale of insurance and long-term receivables,
 repositioning payments and total working capital. However, we propose to
 include additional discussion of underlying drivers of changes in operating
 cash flow specific to working capital, if material, beginning with our Form
 10-Q for the quarter ended June 30, 2010. There were no material cash flow
 impacts related to unbilled receivables, deferred revenues and/or long-term
 contracts in 2009. We do, and will continue to, monitor related balance sheet
 accounts (i.e. unbilled receivables and deferred revenue) on a segment basis
 and will disclose the impact of long-term contract accounting on cash flow if
 material.

 Below is an
 example of expanded disclosure regarding 2009 activity that we will include
 in our Form 10-K for the year ending December 31, 2010:

6

 Cash
 provided by operating activities increased by $155 million during 2009
 compared with 2008 primarily due to a favorable impact from working capital
 of $577 million (primarily due to a decrease in inventory of $479 million
 driven by reduced purchases of raw material and componen