Honeywell 2015 Annual Report Download - page 22

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Aerospace
2015 compared with 2014
Aerospace sales decreased primarily due to the unfavorable impact from foreign currency translation and the Friction
Materials divestiture, partially offset by an increase in organic sales, as discussed below, and a decrease in incentives
predominantly to air transport and regional aviation original equipment manufacturers (OEM Incentives).
Aerospace segment profit increased primarily due to an 8% increase in operational segment profit and a 6% favorable
impact of acquisitions, divestitures and other (predominantly the absence of higher prior year OEM Incentives), as
discussed above, partially offset by a 4% unfavorable impact of foreign currency translation. The increase in operational
segment profit is primarily driven by productivity, net of inflation, and favorable pricing, partially offset by continued
investments for growth. Cost of products and services sold decreased primarily due to the favorable impact of foreign
currency translation, the Friction Materials divestiture, and productivity, net of inflation, partially offset by continued
investments for growth.
2014 compared with 2013
Aerospace sales decreased primarily due to the Friction Materials divestiture and an increase in OEM incentives,
partially offset by an increase in organic sales, as discussed below.
19
2015
2014
Change
2013
Change
Net sales
$
15,237
$
15,598
(2
)%
$
15,735
(1
)%
Cost of products and services sold
11,068
11,699
11,889
Selling, general and administrative expenses
643
712
705
Other
308
272
271
Segment profit
$
3,218
$
2,915
10
%
$
2,870
2
%
Factors Contributing to Year
-Over-Year Change
2015 vs. 2014
2014 vs. 2013
Sales
Segment
Profit
Sales
Segment
Profit
Organic growth/ Operational segment profit
2
%
8
%
2
%
8
%
Foreign currency translation
(3
)%
(4
)%
—
—
Acquisitions, divestitures and other, net
(1
)%
6
%
(3
)%
(6
)%
Total % Change
(2
)%
10
%
(1
)%
2
%
•
Commercial Original Equipment sales increased by 11% (increased 5% organic) primarily driven by a decrease in
OEM Incentives and higher business and general aviation engine shipments.
•
Commercial Aftermarket sales increased by 2% (increased 2% organic) primarily driven by higher repair and overhaul
activities, partially offset by lower retrofits, modifications and upgrades for business and general aviation customers.
•
Defense and Space sales decreased by 1% (flat organic) primarily due to lower U.S. government revenue, partially
offset by growth in international programs.
•
Transportation Systems sales decreased by 19% (increased 3% organic) primarily due to the unfavorable impact from
foreign currency translation and the Friction Materials divestiture, partially offset by continued growth from new
platform launches and higher global turbo gas penetration.
•
Commercial Original Equipment sales decreased by 2% (increased by 3% organic) primarily due to an increase in
OEM Incentives to air transport and regional original equipment manufacturers (OEMs), partially offset by higher air
transport volumes, consistent with the OEMs
’
higher production rates, and business and general aviation engine
shipments.
•
Commercial Aftermarket sales increased by 3% driven primarily by higher sales of spare parts to air transport and
regional customers, partially offset by a decline in retrofits, modifications and