Honeywell 2008 Annual Report Download - page 16

Product/Service Classes Major Products/Services Major Customers/Uses Key Competitors
Brake hard parts and other
friction materials Disc brake pads and shoes Drum brake linings
Brake blocks
Disc and drum brake
components
Brake hydraulic components
Brake fluid
Aircraft brake linings
Railway linings
Automotive and heavy
vehicle OEMs, OES,
brake manufacturers and
aftermarket channels
Installers
Railway and commercial/
military aircraft OEMs and
brake manufacturers
Advics
Akebono
Federal-Mogul
ITT Corp
JBI
Nisshinbo
TMD Friction
Aerospace Sales
Our sales to aerospace customers were 35 percent of our total sales in each of 2008, 2007 and 2006,
respectively. Our sales to commercial aerospace original equipment manufacturers were 9, 10 and 10 percent of
our total sales in 2008, 2007 and 2006, respectively. In addition, our sales to commercial aftermarket customers
of aerospace products and services were 11 percent of our total sales in each of 2008, 2007 and 2006. Our
Aerospace results of operations can be impacted by various industry and economic conditions. See "Item 1A.
Risk Factors."
U.S. Government Sales
Sales to the U.S. Government (principally by our Aerospace segment), acting through its various
departments and agencies and through prime contractors, amounted to $4,240, $4,011 and $3,688 million in
2008, 2007 and 2006, respectively, which included sales to the U.S. Department of Defense, as a prime
contractor and subcontractor, of $3,412, $3,192 and $3,052 million in 2008, 2007 and 2006, respectively. U.S.
defense spending increased in 2008 and is also expected to increase in 2009. We do not expect to be
significantly affected by any proposed changes in 2009 federal spending due principally to the varied mix of the
government programs which impact us (OEM production, engineering development programs, aftermarket
spares and repairs and overhaul programs). Our contracts with the U.S. Government are subject to audits,
investigations, and termination by the government. See "Item 1A. Risk Factors."
Backlog
Our total backlog at December 31, 2008 and 2007 was $12,972 and $12,303 million, respectively. We
anticipate that approximately $9,480 million of the 2008 backlog will be filled in 2009. 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.
Competition
We are subject to active competition in substantially all product and service areas. Competition is expected
to continue in all geographic regions. Competitive conditions vary widely among the thousands of products and
services provided by us, and vary by country. Depending on the particular customer or market involved, our
businesses compete on a variety of factors, such as price, quality, reliability, delivery, customer service,
performance, applied technology, product innovation and product recognition. Brand identity, service to
customers and quality are generally important competitive factors for our products and services, and there is
considerable price competition. Other competitive factors for certain products include breadth of product line,
research and development efforts and technical and managerial capability. While our competitive position varies
among our products and services, we believe we are a significant competitor in each of our major product and
service classes. However, a number of our products and services are sold in competition with those of a large
number of other companies, some of which have substantial financial resources and significant technological
capabilities. In addition, some of our products compete with the captive component divisions of original
equipment manufacturers. See Item 1A "Risk Factors" for further discussion.
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