Honeywell 2004 Annual Report Download - page 57

Backlog
Our total backlog at year-end 2004 and 2003 was $8,229 and $7,191 million, respectively. We anticipate that approximately
$6,339 million of the 2004 backlog will be filled in 2005. We believe that backlog is not necessarily a reliable indicator of our future
sales because a substantial portion of the orders constituting this backlog may be canceled at the customer's option.
Inflation
Highly competitive market conditions have minimized inflation's impact on the selling prices of our products and the costs of our
purchased materials. Except for the costs of certain raw materials in our Specialty Materials reportable segment (See Business
Overview section of this MD&A for further discussion), cost increases for materials and labor have generally been low, and
productivity enhancement programs, including repositioning actions and Six Sigma initiatives, have largely offset any impact.
Recent Accounting Pronouncements
See Note 1 of Notes to Financial Statements in “Item 8. Financial Statements and Supplementary Data” for a discussion of recent
accounting pronouncements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Information relating to market risk is included in “Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations” under the caption “Financial Instruments”.
Item 8. Financial Statements and Supplementary Data
42