Honeywell 2013 Annual Report Download - page 48

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Commercial original equipment (OE) sales increased by 3 percent in 2013 compared to 2012.
•Air transport and regional OE sales increased by 7 percent in 2013 driven by higher air transport
volumes, consistent with the OE Manufacturers’ (OEM) higher production rates, partially offset
by lower regional jet sales.
•Business and general aviation OE sales decreased by 3 percent in 2013 driven by an increase
in OEM Payments to business and general aviation customers, partially offset by strong demand
in the business jet mid to large cabin segment.
Commercial aftermarket sales increased by 2 percent in 2013 compared to 2012.
•Air transport and regional aftermarket sales were flat for 2013 primarily due to higher repair and
overhaul activities related to utilization, offset by lower spares volumes.
•Business and general aviation aftermarket sales increased by 6 percent in 2013 primarily due to
higher sales for retrofit, modifications and upgrades, partially offset by fewer repair and overhaul
activities.
Defense and space sales decreased by 5 percent in 2013 primarily due to U.S. government
program ramp downs and lower defense budget, partially offset by a royalty gain in the fourth
quarter.
Aerospace segment profit increased by 4 percent in 2013 compared with 2012 primarily due to an
increase in operational segment profit driven by commercial sales growth, as discussed above,
including favorable pricing and productivity, net of inflation, partially offset by lower defense and space
sales, as discussed above. The segment margin impact from other factors was flat, which reflects the
net effect of a royalty gain in the fourth quarter, offset by the unfavorable impact from an increase in
OEM Payments. Cost of products and services sold totaled $8.8 billion in 2013, a decrease of
approximately $101 million from 2012 which is primarily a result of the factors discussed above
(excluding price).
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:
Commercial original equipment (OE) sales increased by 19 percent (12 percent organic) in 2012
compared to 2011.
•Air transport and regional OE sales increased by 11 percent (11 percent organic) in 2012
primarily driven by higher sales to our OE customers, consistent with higher production rates,
and a favorable platform mix.
•Business and general aviation OE sales increased by 34 percent (15 percent organic) in 2012
driven by strong demand in the business jet end-market, favorable platform mix, growth from
acquisitions and the favorable 12 percent impact of the OEM Payments discussed above.
Commercial aftermarket sales increased by 8 percent in 2012 compared to 2011.
•Air transport and regional aftermarket sales increased by 4 percent for 2012 primarily due to
increased sales of spare parts and higher maintenance activity driven by an approximate 2
percent increase in global flying hours in 2012, increased sales of avionics upgrades, and
changes in customer buying patterns relating to maintenance activity in the first half of 2012.
•Business and general aviation aftermarket sales increased by 17 percent in 2012 primarily due
to increased sales of spare parts and revenue associated with maintenance service agreements
and a higher penetration in retrofit, modifications, and upgrades.
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