Honeywell 2012 Annual Report Download - page 39

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•The extent to which cost savings from productivity actions are able to offset or exceed the
impact of material and non-material inflation;
•The impact of the pension discount rate and asset returns on pension expense, including
mark-to-market adjustments, and funding requirements; and
•The impact of fluctuations in foreign currency exchange rates (in particular the Euro), relative to
the U.S. dollar.
Areas of Focus for 2013
The 2013 areas of focus will be supported by the enablers including the Honeywell Operating
System, our Velocity Product Development process, and Functional Transformation/ Organizational
Efficiency. These areas of focus are generally applicable to each of our operating segments, and
include:
•Driving profitable growth through R&D, technological excellence and optimized manufacturing
capability to deliver innovative products that customers value;
•Expanding margins by maintaining and improving the Company’s cost structure through
manufacturing and administrative process improvements, restructuring, and other actions, which
will drive productivity and enhance the flexibility of the business as it works to proactively
respond to changes in end market demand;
•Proactively managing raw material costs through formula and long-term supply agreements and
hedging activities, where feasible and prudent;
•Driving strong cash flow conversion through effective working capital management which will
enable the Company to undertake strategic actions to benefit the business including capital
expenditures, strategic acquisitions, and returning cash to shareholders;
•Increasing our sales penetration and expanding our localized footprint in high growth regions,
including China, India, Eastern Europe, the Middle East and Latin America;
•Aligning and prioritizing investments for long-term growth, while considering short-term demand
volatility;
•Monitoring both suppliers and customers for signs of liquidity constraints, limiting exposure to
any resulting inability to meet delivery commitments or pay amounts due, and identifying
alternate sources of supply as necessary; and
•Controlling Corporate and other non-operating costs, including costs incurred for asbestos and
environmental matters, pension and other post-retirement expenses and tax expense.
30