Honeywell 2014 Annual Report Download - page 27

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BUSINESS OVERVIEW
Our consolidated operating results are principally impacted by:
•Change in global economic growth rates and industry conditions and demand in our key end
markets;
•Overall sales mix, in particular the mix of Aerospace original equipment and aftermarket sales
and the mix of ACS products, distribution and services sales;
•The impact of fluctuations in foreign currency exchange rates (in particular the Euro), relative to
the U.S. dollar;
•The extent to which cost savings from productivity actions are able to offset or exceed the
impact of material and non-material inflation; and
•The impact of the pension discount rate and asset returns on pension expense, including mark-
to-market adjustments, and funding requirements.
Our 2015 areas of focus are supported by the Honeywell Enablers, including the Honeywell
Operating System (HOS Gold), Velocity Product Development, Functional Transformation and the
Honeywell User Experience. These areas of focus are generally applicable to each of our operating
segments and include:
•Driving profitable growth through R&D, technological excellence and optimized manufacturing
capability to deliver innovative products that customers value;
•Expanding margins by maintaining and improving the Company’s cost structure through
manufacturing and administrative process improvements, repositioning, and other actions, which
will drive productivity and enhance the flexibility of the business as it works to proactively
respond to changes in end market demand;
•Proactively managing raw material costs through formula and long-term supply agreements and
hedging activities, where feasible and prudent;
•Driving strong cash flow conversion through effective working capital management which will
enable the Company to undertake strategic actions to benefit the business including capital
expenditures, strategic acquisitions, and returning cash to shareholders;
•Driving organic growth through expansion of our localized footprint in high growth regions,
including China, India, Eastern Europe, the Middle East and Latin America;
•Driving inorganic growth through the identification of appropriate acquisition targets and
deployment of our disciplined, rigorous M&A and integration processes;
•Aligning and prioritizing capital expenditures for long-term growth, while considering short-term
demand volatility;
•Monitoring both suppliers and customers for signs of liquidity constraints, limiting exposure to
any resulting inability to meet delivery commitments or pay amounts due, and identifying
alternate sources of supply as necessary; and
•Controlling Corporate and other non-operating costs, including costs incurred for asbestos and
environmental matters, pension and other post-retirement expenses and tax expense.
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