Honeywell 2009 Annual Report Download - page 43

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Automation and Control Solutions (ACS)
Overview
ACS provides innovative products and solutions that make homes, buildings, industrial sites and
infrastructure more efficient, safe and comfortable. Our ACS products and services include controls for heating,
cooling, indoor air quality, ventilation, humidification, lighting and home automation; advanced software
applications for home/building control and optimization; sensors, switches, control systems and instruments for
measuring pressure, air flow, temperature and electrical current; security, fire and gas detection; personal
protection equipment; access control; video surveillance; remote patient monitoring systems; products for
automatic identification and data collection, installation, maintenance and upgrades of systems that keep
buildings safe, comfortable and productive; and automation and control solutions for industrial plants, including
advanced software and automation systems that integrate, control and monitor complex processes in many types
of industrial settings as well as equipment that controls, measures and analyzes natural gas production and
transportation.
Economic and Other Factors
ACS's operating results are principally driven by:
• Global commercial construction (including retrofits and upgrades);
•
Demand for residential security and environmental control retrofits and upgrades;
•
Demand for energy efficient products and solutions;
•
Industrial production;
•
Government and public sector spending;
•
U.S. and European economic conditions;
•
Economic growth rates in developed (U.S. and Europe) and emerging markets;
•
The strength of capital and operating spending on process (including petrochemical and refining) and
building automation;
•
Inventory levels in distribution channels; and
•
Changes to energy, fire, security, health care, safety and environmental concerns and regulations.
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%
2009 compared with 2008
ACS sales decreased by 10 percent in 2009 compared with 2008, primarily due to decreased sales volume
(reflecting slower global economic growth) 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
30