How cyclical is the distribution and homes business?

• On the distribution side, revenue and EBITDA will decline meaningfully in a recession, but cash flow will actually improve
• In the homes business, revenue declined by ~11% in the last recession. However, EBITDA stayed relatively flat. He wasn’t at Honeywell at that time, and he doesn’t know how they were able to keep EBITDA flat. He thinks EBITDA would decline at least in line with revenue in a recessionary environment. But importantly, the business is not hugely cyclical.

EBITDA margins have increased from 8% to 10% – what has driven that increase?