Honeywell 2013 Annual Report Download - page 23

Our contracts with the U.S. Government are subject to audits, investigations, and termination by the
government. See “Item 1A. Risk Factors.”
Backlog
Our total backlog at December 31, 2013 and 2012 was $16,523 and $16,307 million, respectively.
We anticipate that approximately $12,262 million of the 2013 backlog will be filled in 2014. We believe
that backlog is not necessarily a reliable indicator of our future sales because a substantial portion of
the orders constituting this backlog may be canceled at the customer’s option.
Competition
We are subject to active competition in substantially all product and service areas. Competition is
expected to continue in all geographic regions. Competitive conditions vary widely among the
thousands of products and services provided by us, and vary by country. Our businesses compete on
a variety of factors, such as price, quality, reliability, delivery, customer service, performance, applied
technology, product innovation and product recognition. Brand identity, service to customers and
quality are important competitive factors for our products and services, and there is considerable price
competition. Other competitive factors include breadth of product line, research and development
efforts and technical and managerial capability. While our competitive position varies among our
products and services, we believe we are a significant competitor in each of our major product and
service classes. A number of our products and services are sold in competition with those of a large
number of other companies, some of which have substantial financial resources and significant
technological capabilities. In addition, some of our products compete with the captive component
divisions of original equipment manufacturers. See Item 1A “Risk Factors” for further discussion.
International Operations
We are engaged in manufacturing, sales, service and research and development globally. U.S.
exports and foreign manufactured products are significant to our operations. U.S. exports comprised
14, 14 and 12 percent of our total sales in 2013, 2012 and 2011, respectively. Foreign manufactured
products and services, mainly in Europe and Asia, were 41, 41 and 43 percent of our total sales in
2013, 2012 and 2011, respectively.
Approximately 23 percent of total 2013 sales of Aerospace-related products and services were
exports of U.S. manufactured products and systems and performance of services such as aircraft
repair and overhaul. Exports were principally made to Europe, Asia, Canada, and Latin America.
Foreign manufactured products and systems and performance of services comprised approximately
16 percent of total 2013 Aerospace sales. The principal manufacturing facilities outside the U.S. are in
Europe, with less significant operations in Canada and Asia.
Approximately 3 percent of total 2013 sales of Automation and Control Solutions products and
services were exports of U.S. manufactured products. Foreign manufactured products and
performance of services accounted for 57 percent of total 2013 Automation and Control Solutions
sales. The principal manufacturing facilities outside the U.S. are in Europe and Asia, with less
significant operations in Canada and Australia.
Approximately 30 percent of total 2013 sales of Performance Materials and Technologies products
and services were exports of U.S. manufactured products. Exports were principally made to Asia and
Latin America. Foreign manufactured products and performance of services comprised 23 percent of
total 2013 Performance Materials and Technologies sales. The principal manufacturing facilities
outside the U.S. are in Europe and Asia.
Approximately 4 percent of total 2013 sales of Transportation Systems products were exports of
U.S. manufactured products. Foreign manufactured products accounted for 84 percent of total 2013
sales of Transportation Systems. The principal manufacturing facilities outside the U.S. are in Europe,
with less significant operations in Asia.
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