24 Eme r s on 2013 Ann u al R e por t Indu S t RI al a ut OM at IO n change change dollars in millions 2011 2012 2013 11 12 12 13 Sales 5294 5188 4885 2 6 Earnings 830 871 777 5 11 Margin 157 168 159 2013 vs 2012 Industrial Automation sales were 49 billion in 2013 a decrease of 303 million or 6 percent as global demand for industrial goods remained weak particularly in Europe The power generating alternators and renewable energy businesses led the decline largely due to customer inventory destocking i n t h e a l t e r n a t o r s business for most of the year Smaller d e c r e a s e s in the industrial motors electrical drives power t r a n s m i s s i o n and materials joining businesses were slightly offset by an increase in hermetic motors from improved HVAC compressor demand Underlying sales decreased 6 percent on lower volume while foreign currency translation had a 13 million unfavorable impact Underlying sales decreased 11 percent in Europe and 6 percent in the United States while sales increased 4 percent in Latin America and 6 percent in Middle EastAfrica Sales in Asia were fat Earnings of 777 million were down 94 million and margin decreased 09 percentage points on lower volume deleverage in the power generating alternators and industrial motors business and the electrical drives business and the comparative effect of a 43 million gain in 2012 from the receipt of dumping duties Savings from cost reduction actions and materials cost containment more than offset the volume decline and associated deleverage The gain in 2012 had an unfavorable impact of 08 percentage points on the margin comparison 2012 vs 2011 Industrial Automation sales decreased 106 million to 52 billion in 2012 refecting solid growth in the electrical distribution and materials joining businesses offset by decreases in the electrical drives solar and wind power and power generating alternators and industrial motors businesses First half softness in hermetic motors due to a global decline in compressor demand also affected results Underlying sales grew 1 percent refecting an estimated 3 percent beneft from price and 2 percent lower volume while unfavorable foreign currency translation deducted 3 percent 140 million Underlying sales increased 3 percent in the United States 6 percent in Latin America and 4 percent in Canada while sales decreased 1 percent in Europe Sales in Asia were fat China down 3 percent Earnings of 871 million were up 41 million and margin increased 11 percentage points refecting a 43 million gain on payments received by the power transmission business related to dumping duties Operationally pricing and cost reduction benefts were largely offset by lower volume and resulting deleverage and higher materials and other costs netw ORK PO we R change change dollars in millions 2011 2012 2013 11 12 12 13 Sales 6811 6399 6155 6 4 Earnings 756 624 554 17 11 Margin 111 97 90 2013 vs 2012 Sales for Network Power were 62 billion in 2013 a decrease of 244 million or 4 percent refecting continued weakness in telecommunications and information technology end markets The network power systems business was down modestly as decreases in the telecommunicationsrelated power infrastructure management precision cooling and uninterruptible power supplies businesses were partially offset by an increase in inbound power Comparisons were adversely affected by 110 million of higher sales from the large Australian National Broadband Network project in 2012 The embedded computing and power business declined sharply due largely to lower end market demand and product rationalization which had an approximate 2 percentage point negative impact on segment sales growth Underlying sales were down 4 percent overall on 3 percent lower volume and 1 percent lower price Foreign currency translation had a 16 million unfavorable impact Geographically underlying sales decreased 6 percent in Asia 5 percent in Europe 2 percent in the United States and 8 percent in Canada while sales increased 3 percent in Latin America and 5 percent in Middle EastAfrica Earnings of 554 million decreased 70 million and margin decreased 07 percentage points primarily due to lower volume deleverage higher S ale S BY S e GM ent 24 19 15 8 34 n Process Management n Industrial Automation n Network Power n Climate Technologies n Commercial Residential Solutions C O nt I n u O u S P OR t F O l IO M an a G e M en t d R I ve S GR O wt H