Honeywell 2012 Annual Report Download - page 42

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•Global demand for commercial air travel as reflected in global flying hours and utilization rates
for corporate and general aviation aircraft, as well as the demand for spare parts and
maintenance and repair services for aircraft currently in use;
•Level and mix of U.S. and foreign government appropriations for defense and space programs
and military activity;
•Changes in customer platform development schedules, requirements and demands for new
technologies; and
•Availability and price variability of raw materials such as nickel, titanium and other metals.
Aerospace
2012 2011 Change 2010 Change
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,040 $11,475 5% $10,683 7%
Cost of products and services sold . . . . . . . . . . . . . . 8,989 8,665 8,099
Selling, general and administrative expenses . . . . 619 591 553
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 196 196
Segment profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,279 $ 2,023 13% $ 1,835 10%
Factors Contributing to Year-Over-Year Change Sales
Segment
Profit Sales
Segment
Profit
2012 vs. 2011 2011 vs. 2010
Organic growth/ Operational segment profit . . . . . . . . . . . . . 3% 8% 7% 9%
Acquisitions and divestitures, net . . . . . . . . . . . . . . . . . . . . . . . 1% 1% — —
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1% 4% — 1%
Total % Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5% 13% 7% 10%
Aerospace sales by major customer end-markets were as follows:
Customer End-Markets 2012 2011 2010
2012
Versus
2011
2011
Versus
2010
% of Aerospace
Sales
% Increase
(Decrease)
in Sales
Commercial original equipment
Air transport and regional . . . . . . . . . . . . . . . . . . . . . . . . . . 13% 13% 13% 11% 6%
Business and general aviation . . . . . . . . . . . . . . . . . . . . . . 8% 6% 5% 34% 41%
Commercial original equipment . . . . . . . . . . . . . . . . . . . 21% 19% 18% 19% 15%
Commercial aftermarket
Air transport and regional . . . . . . . . . . . . . . . . . . . . . . . . . . 25% 25% 23% 4% 16%
Business and general aviation . . . . . . . . . . . . . . . . . . . . . . 12% 11% 9% 17% 24%
Commercial aftermarket . . . . . . . . . . . . . . . . . . . . . . . . . . 37% 36% 32% 8% 18%
Defense and Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42% 45% 50% (3)% (2)%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100% 5% 7%
2012 compared with 2011
Aerospace sales increased by 5 percent in 2012 compared with 2011 primarily due to an increase
in organic growth of 3 percent primarily due to increased commercial sales volume, a 1 percent
increase from acquisitions, net of divestitures, and a 1 percent increase in revenue related to an $88
million reduction in payments to business and general aviation OE manufacturers to partially offset
their pre-production costs associated with new aircraft platforms (OEM payments).
Details regarding the changes in sales by customer end-markets are as follows:
33