Honeywell 2015 Annual Report Download - page 11

constrained by our suppliers ’ inability to scale production and adjust delivery of long-lead time products during times of
volatile demand. Our inability to fill our supply needs would jeopardize our ability to fulfill obligations under commercial and
government contracts, which could, in turn, result in reduced sales and profits, contract penalties or terminations, and
damage to customer relationships.
We may be unable to successfully execute or effectively integrate acquisitions, and divestitures may not occur as
planned.
We regularly review our portfolio of businesses and pursue growth through acquisitions and seek to divest non-core
businesses. We may not be able to complete transactions on favorable terms, on a timely basis or at all. In addition, our
results of operations and cash flows may be adversely impacted by (i) the failure of acquired businesses to meet or exceed
expected returns, (ii) the failure to integrate multiple acquired businesses into Honeywell simultaneously and on schedule
and/or to achieve expected synergies, (iii) the inability to dispose of non-core assets and businesses on satisfactory terms
and conditions, and (iv) the discovery of unanticipated liabilities or other problems in acquired businesses for which we lack
contractual protections, insurance or indemnities or, with regard to divested businesses, claims by purchasers to whom we
have provided contractual indemnification.
Our future growth is largely dependent upon our ability to develop new technologies and introduce new products
that achieve market acceptance in increasingly competitive markets with acceptable margins.
Our future growth rate depends upon a number of factors, including our ability to (i) identify emerging technological
trends in our target end-markets, (ii) develop and maintain competitive products and defend our market share against an
ever-expanding number of competitors including many new and non- traditional competitors, (iii) enhance our products by
adding innovative features that differentiate our products from those of our competitors and prevent commoditization of our
products, (iv) develop, manufacture and bring compelling new products to market quickly and cost-effectively, and (v)
attract, develop and retain individuals with the requisite technical expertise and understanding of customers
’ needs to
develop new technologies and introduce new products.
The failure of our technologies or products to gain market acceptance due to more attractive offerings by our
competitors could significantly reduce our revenues and adversely affect our competitive standing and prospects.
Failure to increase productivity through sustainable operational improvements, as well as an inability to
successfully execute repositioning projects, may reduce our profitability or adversely impact our businesses.
Our profitability and margin growth are dependent upon our ability to drive sustainable improvements. In addition, we
seek productivity and cost savings benefits through repositioning actions and projects, such as consolidation of
manufacturing facilities, transitions to cost-competitive regions and product line rationalizations. Risks associated with these
actions include delays in execution of the planned initiatives, additional unexpected costs and adverse effects on employee
morale. We may not realize the full operational or financial benefits we expect, the recognition of these benefits may be
delayed and these actions may potentially disrupt our operations.
As a supplier of military and other equipment to the U.S. Government, we are subject to unusual risks, such as the
right of the U.S. Government to terminate contracts for convenience and to conduct audits and investigations of
our operations and performance.
U.S. Government contracts are subject to termination by the government, either for the convenience of the government
or for our failure to perform consistent with the terms of the applicable contract. Our contracts with the U.S. Government are
also subject to government audits that may recommend downward price adjustments and other changes. When appropriate
and prudent, we have made adjustments and paid voluntary refunds in the past and may do so in the future.
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