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Report of Independent Registered Public Accounting Firm
T
O
THE
B
OARD
OF
D
IRECTORS
AND
S
HAREHOLDERS
OF
H
ONEYWELL
I
NTERNATIONAL
I
NC
.:
We have audited the accompanying consolidated balance sheet of Honeywell International Inc. and subsidiaries (the
“Company”) as of December 31, 2015, and the related consolidated statements of operations, comprehensive income, cash
flows and shareowners
’
equity for the year then ended. We also have audited the Company
’
s internal control over financial
reporting as of December 31, 2015 based on the criteria established in Internal Control—Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management
’
s Report
on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial
reporting at the Elster Division of Melrose Industries Plc. (“Elster”), which was acquired on December 29, 2015 and whose
financial statements constitute approximately 1.8% of consolidated total assets and a de minimis percentage of total
consolidated net sales for the year ended December 31, 2015. Accordingly, our audit did not include the internal control
over financial reporting at Elster. The Company
’
s management is responsible for these financial statements, for maintaining
effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, including in the accompanying Management
’
s Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company
’
s internal
control over financial reporting based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement and whether effective internal control over financial reporting was
maintained in all material respects. Our audit of the financial statements included examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing
the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audits also included performing such procedures as we considered necessary in
the circumstances. We believe that our audits provide a reasonable basis for our opinions.
A company
’
s internal control over financial reporting is a process designed by, or under the supervision of, the
company
’
s principal executive and principal financial officers, or persons performing similar functions, and effected by the
company
’
s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company
’
s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the company
’
s assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements due to error or fraud may not be prevented or detected
on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to
future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
80