Fourth-quarter segment operating margin for Industrial Technologies was 16.1 percent, an increase of 0.8 percentage points compared with last year. The segment margin improvement was due to higher volumes, improved pricing and productivity, which were partially offset by inflation and investment spending. Air and Productivity operating margins exceeded 17 percent in the fourth quarter and exceeded 16 percent for full year 2012.
Residential Solutions includes the Trane and Schlage brands, which deliver safety, comfort and efficiency to homeowners throughout the Americas. Products, services and solutions include mechanical and electronic locks, HVAC systems, indoor air quality solutions and controls, and remote home management systems. Fourth-quarter revenues were $422 million, a decrease of approximately 5 percent (down 5 percent, excluding currency) compared with 2011. Bookings also declined by mid-single digit percentages year-over-year.
Total fourth quarter residential security revenues were down low-teen percentages compared with 2011 as a result of lower sales to “big box” customers, which offset increased year-over-year revenues from the new builder market and South American customers.
Residential HVAC revenues declined by a low-single digit percentage compared with fourth quarter 2011 results. 2012 fourth-quarter HVAC unit shipments were flat compared with last year. Fourth quarter 2012 year-over-year revenue comparisons were negatively impacted by significant fourth-quarter 2011 shipments related to planned inventory reductions. Excluding the impact of 2011 inventory reductions, fourth-quarter 2012 unit shipments increased by high-single digit percentages compared with last year.Fourth-quarter segment operating margin was 6.9 percent and increased by 8.1 percentage points compared with negative (1.2 percent) recorded in 2011. The segment margin increase was due to improved pricing and productivity in 2012 and easy comparisons with the fourth quarter of 2011 when the residential HVAC business significantly reduced inventory levels. 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. Fourth-quarter revenues of $445 million increased by approximately 7 percent (up 7 percent excluding currency) compared with the fourth quarter of 2011. Revenues in the Americas increased by high-single digit percentages as price improvements and market share gains in mechanical products more than offset the impact of stagnant commercial building markets. Revenues in overseas markets increased by a mid-single digit percentage as declines in European revenues were more than offset by strong growth in Asia.