Honeywell 2009 Annual Report Download - page 20

Item 1A. Risk Factors
Cautionary Statement about Forward-Looking Statements
We have described many of the trends and other factors that drive our business and future results in "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations", including the overview
of the Company and each of our segments and the discussion of their respective economic and other factors and
areas of focus for 2010. These sections and other parts of this report (including this Item 1A) contain "forward-
looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are those that address activities, events or developments that management
intends, expects, projects, believes or anticipates will or may occur in the future. They are based on
management's assumptions and assessments in light of past experience and trends, current economic and
industry conditions, expected future developments and other relevant factors. They are not guarantees of future
performance, and actual results, developments and business decisions may differ significantly from those
envisaged by our forward-looking statements. We do not undertake to update or revise any of our forward-
looking statements. Our forward-looking statements are also subject to risks and uncertainties that can affect our
performance in both the near-and long-term. These forward-looking statements should be considered in light of
the information included in this Form 10-K, including, in particular, the factors discussed below.
Risk Factors
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.
Industry and economic conditions may adversely affect the market and operating conditions of our
customers, which in turn can affect demand for our products and services and our results of operations.
The operating results of our segments are impacted by general global industry and economic conditions that
can cause changes in spending and capital investment patterns, demand for our products and services and the
level of our manufacturing and shipping costs. The operating results of our Aerospace segment, which generated
35 percent of our consolidated revenues in 2009, are directly tied to cyclical industry and economic conditions,
including global demand for air travel as reflected in new aircraft production, the deferral or cancellation of orders
for new aircraft, delays in launch schedules for new aircraft platforms, the retirement of aircraft, global flying
hours, and business and general aviation aircraft utilization rates, as well as changes in customer buying patterns
with respect to aftermarket parts, supplier consolidation, factory transitions, capacity constraints, and the level
and mix of U.S. Government appropriations for defense and space programs (as further discussed in other risk
factors below). The challenging operating environment faced by the commercial airline industry is expected to
continue and may be influenced by a wide variety of factors including global flying hours, aircraft fuel prices, labor
issues, airline consolidation, airline insolvencies, terrorism and safety concerns as well as changes in regulations.
Future terrorist actions or pandemic health issues could dramatically reduce both the demand for air travel and
our Aerospace aftermarket sales and margins. The operating results of our Automation and Control Solutions
(ACS) segment, which generated 41 percent of our consolidated revenues in 2009, are impacted by the level of
global residential and commercial construction (including retrofits and upgrades), capital spending and operating
expenditures on building and process automation, industrial plant capacity utilization and expansion, inventory
levels in distribution channels, and global economic growth rates. Specialty Materials' operating results, which
generated 13 percent of our consolidated revenues in 2009, are impacted by global economic growth rates,
capacity utilization for chemical, industrial, refining, petrochemical and semiconductor plants, our customers'
availability of capital for refinery construction and expansion, and commodity demand volatility. Transportation
Systems' operating results, which generated 11 percent of our consolidated revenues in 2009, are impacted by
global production and demand for automobiles and
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