Honeywell 2013 Annual Report Download - page 49

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Defense and space sales decreased by 3 percent (negative 4 percent organic) in 2012 primarily
due to anticipated program ramp downs, partially offset by higher international aftermarket sales
and growth from acquisitions, net of divestitures.
Aerospace segment profit increased by 13 percent in 2012 compared with 2011 primarily due to
an increase in operational segment profit of 8 percent, a 4 percent favorable impact from lower OEM
Payments, discussed above, and a 1 percent increase from acquisitions, net of divestitures. The
increase in operational segment profit is due to the favorable impact from higher price and productivity,
net of inflation, and commercial demand partially offset by increased research, development and
engineering investments. Cost of products and services sold totaled $9.0 billion in 2012, an increase of
approximately $324 million from 2011 which is primarily a result of the factors discussed above
(excluding price).
2014 Areas of Focus
Aerospace’s primary areas of focus for 2014 include:
•Global pursuit of new commercial, defense and space programs;
•Driving customer satisfaction through operational excellence (product quality, cycle time
reduction, and supplier management);
•Aligning research and development and customer support costs with customer requirements
and demand for new platforms with high marketplace appeal;
•Expanding sales and operations in international locations;
•Focusing on cost structure initiatives to maintain profitability in face of economic uncertainty and
potential defense and space budget reductions and program specific appropriations;
•Continuing to design equipment that enhances the safety, performance and durability of
aerospace and defense equipment, while reducing weight and operating costs; and
•Continued deployment and optimization of our common enterprise resource planning (ERP)
system.
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
and displays for heating, cooling, indoor air quality, ventilation, humidification, combustion, 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 field instruments
and 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 impacted by:
•Economic conditions and growth rates in developed (North America, Europe and Australia) and
high growth regions;
•Industrial production and global commercial construction (including retrofits and upgrades);
•Demand for residential security, environmental control retrofits and upgrades and energy
efficient products and solutions;
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