HVAC revenues were up low teens compared with the third quarter of 2011 due to improving market conditions and market share gains in air conditioning units and furnaces. Third-quarter segment operating margin was 8.1 percent, an increase of 4.3 percentage points, compared with 3.8 percent recorded in 2011. The segment margin increase was due to increased volume, improved productivity and higher pricing, which were partially offset by inflation and an unfavorable revenue mix shift to lower efficiency and opening price point air conditioning products.
Security Technologies is a leading global supplier of commercial security products and services. The segment’s market-leading products include mechanical and electronic security products, biometric and access-control systems, and security and time and attendance scheduling software. Third-quarter revenues of $391 million decreased by approximately 7 percent (down 4 percent excluding currency) compared with the third quarter of 2011. Revenues in the Americas were down by low single digits, as price improvements were more than offset by lower volumes. Revenues in overseas markets also decreased primarily due to declining construction markets and currency translation. Third-quarter segment operating margin was 21.5 percent, up slightly compared with the third quarter of 2011. The higher segment operating margin was due to higher productivity and improved pricing, partially offset by inflation, unfavorable revenue mix and increased investment spending.
During the third quarter, working capital was 3.9 percent of revenues and increased slightly compared with 2011. Cash balances and total debt balances were $0.9 billion and $3.3 billion, respectively, at the end of the third quarter. The company repurchased 7.6 million shares during the third quarter. Approximately 10.8 million shares have been repurchased for approximately $480 million as of Oct. 18, 2012. The company expects to spend a total of $840 million during 2012 to complete the current $2 billion share repurchase authorization. Approximately 47 million shares have been repurchased for $1.6 billion since the program’s inception in June of 2011.