Honeywell 2014 Annual Report Download - page 30

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Factors Contributing to Year-Over-Year Change Sales
Segment
Profit Sales
Segment
Profit
2014 vs. 2013 2013 vs. 2012
Organic growth/ Operational segment profit . . . . . . . . . . . . . 4% 9% 3% 7%
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1)% (1)% — —
Acquisitions and divestitures, net . . . . . . . . . . . . . . . . . . . . . . . 5% 3% 2% 1%
Total % Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8% 11% 5% 8%
2014 compared with 2013
ACS sales increased by 8% in 2014 compared with 2013, primarily due to growth from
acquisitions, net of divestitures and organic sales growth, partially offset by the unfavorable impact of
foreign exchange.
•Sales in our Energy, Safety & Security businesses increased by 11% (4% organic) in 2014
principally due to (i) acquisitions, net of divestitures, (ii) higher global sales volumes in our
Environmental and Combustion Controls business driven by strong U.S. residential market
conditions and new product introductions, (iii) increases in sales volumes in our Fire and
Industrial Safety businesses driven by organic growth in all regions and (iv) increases in sales
volumes in our Scanning and Mobility business in the second half of 2014.
•Sales in Building Solutions & Distribution increased by 1% (2% organic) in 2014 principally due
to increased sales volumes in our Americas Distribution business partially offset by softness in
the U.S. energy retrofit business. Building solutions backlog increased in 2014.
ACS segment profit increased by 11% in 2014 compared with 2013 due to a 9% increase in
operational segment profit and a 3% increase from acquisitions, net of divestitures, partially offset by
the unfavorable impact of foreign exchange. The increase in operational segment profit is primarily the
result of higher sales volumes as discussed above, and the positive impact of price and productivity,
net of inflation partially offset by continued investment for growth. Cost of products and services sold
totaled $9.4 billion in 2014, an increase of $575 million which is primarily due to higher sales volume,
acquisitions, net of divestitures and inflation, partially offset by productivity and the favorable impact of
foreign exchange.
2013 compared with 2012
ACS sales increased by 5% in 2013 compared with 2012, primarily due to a 3% increase in
organic revenue driven by increased sales volume and 2% growth from acquisitions, net of
divestitures.
•Sales in our Energy, Safety & Security businesses increased by 8% (3% organic) in 2013
principally due to (i) the positive impact of acquisitions, (ii) increases in sales volumes in our
environmental and combustion control and security businesses driven by improved U.S.
residential market conditions and new product introductions and (iii) higher sales volumes of our
fire systems and sensors and safety products (in the second half), partially offset by decreases
in sales volumes of our sensing and control products (in the first half of 2013) and scanning and
mobility products primarily the result of continued softness in their U.S. end markets.
•Sales in our Building Solutions & Distribution businesses increased by 1% in 2013 principally
due to increased sales volumes in our Americas Distribution business due to improved U.S.
residential market conditions partially offset by continued softness in the U.S. energy retrofit
business.
ACS segment profit increased by 8% in 2013 compared with 2012 due to a 7% increase in
operational segment profit and a 1% increase from acquisitions. The increase in operational segment
profit is primarily the result of the positive impact from price and productivity, net of inflation, investment
for growth and higher sales volumes as discussed above. Cost of products and services sold totaled
$8.9 billion in 2013, an increase of $361 million which is primarily due to higher sales volume,
acquisitions and inflation partially offset by the favorable impact of productivity and foreign exchange.
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