Honeywell 2012 Annual Report Download - page 21

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 2013. 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 the risks and
uncertainties 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 markets 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 32 percent of our consolidated revenues in 2012, 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. and foreign 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 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 42 percent of our
consolidated revenues in 2012, 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. Performance Materials and Technologies’
operating results, which generated 16 percent of our consolidated revenues in 2012, 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
raw material demand and supply volatility. Transportation Systems’ operating results, which generated
10 percent of our consolidated revenues in 2012, are impacted by global production and demand for
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