UTC Reports Fourth Quarter And Full Year EPS Of $1.04 And $5.35; Reaffirms 2013 EPS Outlook Of $5.85 To $6.15

HARTFORD, Conn., Jan. 23, 2013 /PRNewswire/ -- United Technologies Corp. (NYSE: UTX) today reported full year 2012 earnings per share of $5.35 and net income attributable to common shareowners of $4.8 billion, both essentially flat versus prior year.  The acquisition of Goodrich Corporation was $0.06 dilutive to EPS. Sales of $57.7 billion were 4 percent above prior year including net acquisitions (6 points) and adverse foreign currency translation (2 points). For the year, organic sales were flat and segment operating margin was 14.0 percent. Adjusted for restructuring and one-time items, segment operating margin of 14.8 percent was 60 basis points lower than prior year, including dilution from the acquisition of Goodrich Corporation.  Cash flow from operations of $6.6 billion, less capital expenditures of $1.4 billion, exceeded net income attributable to common shareowners.

"2012 was a transformational year for United Technologies with the successful completion of the Goodrich and IAE transactions, and the divestiture of several non-core assets," said Louis Chenevert, UTC Chairman & Chief Executive Officer. "We reshaped our portfolio to focus on our core markets. We also invested $2.4 billion in developing game changing technologies and nearly $600 million on restructuring our operations to address a challenging economic environment."   

Fourth quarter 2012 earnings per share of $1.04 were down 27 percent from the year ago quarter. Results for the quarter included $0.25 per share of restructuring and one-time charges.  The prior year quarter included $0.01 of net favorable one-time items in excess of restructuring charges.  Before these items, earnings per share decreased $0.12 or 9 percent year over year.  In addition, results included a $0.12 charge recorded at Sikorsky related to the Canadian Maritime Helicopter program. Foreign currency translation and hedges at Pratt & Whitney Canada had an adverse impact of $0.02 in the quarter.

Sales of $16.4 billion for the quarter were 14 percent above prior year. Net acquisitions provided 15 points of growth. Organic sales were flat and foreign currency translation had an adverse impact of 1 point. Fourth quarter segment operating margin was 11.4 percent.  Adjusted for restructuring costs and net one-time items, segment operating margin of 13.3 percent was 200 basis points lower than prior year, primarily due to the impact of the acquisition of Goodrich Corporation and the Canadian Maritime Helicopter program charge at Sikorsky.  Cash flow from operations of $2.0 billion less capital expenditures of $641 million exceeded net income attributable to common shareowners of $945 million.

"We closed the year better than we had anticipated," said Chenevert. "Cash generation was strong both in the quarter and for the full year, and we delivered on our commitment to pay down approximately one-third of the Goodrich acquisition debt."

New equipment orders at Otis were up 12 percent over the year ago fourth quarter including adverse foreign exchange of 1 point, driven by strong order growth in China.  North American Residential HVAC new equipment orders at UTC Climate, Controls & Security grew 20 percent.  Large commercial engine spares orders were up 46 percent at Pratt & Whitney including the impact from the incremental International Aero Engines share. Organically, commercial spares orders were down 8 percent at Pratt & Whitney and down 4 percent at UTC Aerospace Systems.

"With broad based improvement in our order trends, and a continued focus on integration and execution, we remain confident in our ability to deliver 2013 earnings per share of $5.85 to $6.15," Chenevert added. "We continue to expect sales between $64 and $65 billion and cash flow from operations less capital expenditures to equal or exceed net income attributable to common shareowners in 2013."

United Technologies Corp., based in Hartford, Connecticut, is a diversified company providing high technology products and services to the building and aerospace industries. Additional information, including a webcast, is available on the Internet at http://www.utc.com.

All financial results and projections reflect continuing operations unless otherwise noted. The accompanying tables include information integral to assessing the company's financial position, operating performance, and cash flow, including a reconciliation of differences between non-GAAP measures used in this release and the comparable financial measures calculated in accordance with generally accepted accounting principles in the United States.

This release includes statements that constitute "forward-looking statements" under the securities laws. Forward-looking statements often contain words such as "believe," "expect," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "confident" and similar terms. Forward-looking statements may include, among other things, statements relating to future and estimated sales, earnings, cash flow, financing plans, charges, expenditures, anticipated benefits of acquisitions and divestitures, results of operations, uses of cash and other measures of financial performance. All forward-looking statements involve risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. Risks and uncertainties include, without limitation, the effect of economic conditions in the markets in which we operate, including financial market conditions, fluctuation in commodity prices, interest rates and foreign currency exchange rates; future levels of indebtedness and capital and research and development spending; levels of end market demand in construction and in the aerospace industry; levels of air travel; financial difficulties of commercial airlines; the impact of weather conditions and natural disasters; the financial condition of our customers and suppliers; delays and disruption in delivery of materials and services from suppliers; cost reduction efforts and restructuring costs and savings and other consequences thereof; the scope, nature, timing or impact of acquisitions, dispositions, joint ventures and other business arrangements, including integration of acquired businesses; the timing and amount of gains, losses, impairments and charges related to anticipated dispositions; the timing and impact of anticipated debt reduction following the Goodrich acquisition; the development and production of new products and services; the anticipated benefits of diversification and balance of operations across product lines, regions and industries; the impact of the negotiation of collective bargaining agreements and labor disputes; the outcome of legal proceedings and other contingencies; future availability of credit; pension plan assumptions and future contributions; and the effect of changes in tax, environmental and other laws and regulations and political conditions in countries in which we operate and other factors beyond our control. The completion of the proposed divestitures of businesses is subject to uncertainties, including the ability to secure disposition agreements and regulatory approvals on acceptable terms; and satisfaction of other customary conditions. These forward-looking statements speak only as of the date of this release and we undertake no obligation to update or revise any forward-looking statements after we distribute this release. For additional information identifying factors that may cause actual results to vary materially from those stated in the forward-looking statements, see our reports on Forms 10-K, 10-Q and 8-K filed with the SEC from time to time, including, but not limited to, the information included in UTC's Forms 10-K and 10-Q under the headings "Business," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Legal Proceedings" and in the notes to the financial statements included in UTC's Forms 10-K and 10-Q.

UTC-IR

 

 

United Technologies Corporation

Condensed Consolidated Statement of Comprehensive Income

 










Quarter Ended
   December 31,


Year Ended
December 31,




(Unaudited)


(Unaudited)

(Millions, except per share amounts)


2012


2011


2012


2011

Net sales


$

16,443


$

14,377


$

57,708


$

55,754

Costs and Expenses:














Cost of products and services sold



12,286



10,411



42,153



40,369


Research and development



712



524



2,371



1,951


Selling, general and administrative



1,795



1,623



6,452



6,161


        Total Costs and Expenses



14,793



12,558



50,976



48,481

Other income, net



101



26



952



573

Operating profit



1,751



1,845



7,684



7,846


Interest expense, net



260



67



773



496

Income from continuing operations before income taxes



1,491



1,778



6,911



7,350


Income tax expense



454



403



1,711



2,134

Income from continuing operations



1,037



1,375



5,200



5,216

Discontinued operations:














Income from operations



53



54



171



255


Gain on disposal



2,058



-



861



-


Income tax expense



(998)



(7)



(742)



(97)

Net income from discontinued operations



1,113



47



290



158

Net income



2,150



1,422



5,490



5,374


Less: Noncontrolling interest in subsidiaries' earnings



93



97



360



395

Net income attributable to common shareowners


$

2,057


$

1,325


$

5,130


$

4,979















Comprehensive income (loss)


$

1,369


$

(318)


$

5,540


$

3,650


Less: Comprehensive income attributable to














   noncontrolling interests



97



81



368



392

Comprehensive income (loss) attributable to














   common shareowners

$

1,272


$

(399)


$

5,172


$

3,258















Net income attributable to common shareowners:














From continuing operations


$

945


$

1,280


$

4,847


$

4,831


From discontinued operations



1,112



45



283



148

Earnings Per Share of Common Stock - Basic:














From continuing operations


$

1.05


$

1.44


$

5.41


$

5.41


From discontinued operations



1.24



0.05



0.32



0.17

Earnings Per Share of Common Stock - Diluted:














From continuing operations


$

1.04


$

1.42


$

5.35


$

5.33


From discontinued operations



1.22



0.05



0.31



0.16

As described on the following pages, consolidated results for the quarters and years ended December 31, 2012 and 2011 include restructuring costs and non-recurring items that management believes should be considered when evaluating the underlying financial performance.

See accompanying Notes to Condensed Consolidated Financial Statements.

 

United Technologies Corporation

Segment Net Sales and Operating Profit

 








Quarter Ended
December 31,


Year Ended

December 31,



(Unaudited)


(Unaudited)

(Millions)


2012


2011


2012


2011














Net Sales













Otis


$

3,205


$

3,211


$

12,056


$

12,437

UTC Climate, Controls & Security



4,147



4,410



17,090



18,864

Pratt & Whitney



3,891



3,481



13,964



12,711

UTC Aerospace Systems



3,174



1,264



8,334



4,760

Sikorsky



2,176



2,110



6,791



7,355

Segment Sales



16,593



14,476



58,235



56,127

Eliminations and other



(150)



(99)



(527)



(373)

Consolidated Net Sales


$

16,443


$

14,377


$

57,708


$

55,754



























Operating Profit













Otis


$

644


$

711


$

2,512


$

2,815

UTC Climate, Controls & Security



460



461



2,425



2,212

Pratt & Whitney



364



519



1,589



1,867

UTC Aerospace Systems



264



198



944



759

Sikorsky



160



207



712



840

Segment Operating Profit



1,892



2,096



8,182



8,493

Eliminations and other



(18)



(127)



(72)



(228)

General corporate expenses



(123)



(124)



(426)



(419)

Consolidated Operating Profit


$

1,751


$

1,845


$

7,684


$

7,846



























Segment Operating Profit Margin













Otis



20.1%



22.1%



20.8%



22.6%

UTC Climate, Controls & Security



11.1%



10.5%



14.2%



11.7%

Pratt & Whitney



9.4%



14.9%



11.4%



14.7%

UTC Aerospace Systems



8.3%



15.7%



11.3%



15.9%

Sikorsky



7.4%



9.8%



10.5%



11.4%

Segment Operating Profit Margin



11.4%



14.5%



14.0%



15.1%

As described on the following pages, consolidated results for the quarters and years ended December 31, 2012 and 2011 include restructuring costs and non-recurring items that management believes should be considered when evaluating the underlying financial performance.

 

United Technologies Corporation

Restructuring Costs and Non-Recurring Items Included in Results of Continuing Operations

 










Quarter Ended
December 31,


Year Ended
December 31,




(Unaudited)


(Unaudited)

In Millions - Income (Expense)


2012 


2011


2012


2011















Restructuring Costs included in Operating Profit:







Otis


$

(59)


$

(26)


$

(164)


$

(73)

UTC Climate, Controls & Security



 (45)



(61)



(143)



(126)

Pratt & Whitney



 (39)



(18)



(96)



(52)

UTC Aerospace Systems



 (75)



(6)



(115)



(11)

Sikorsky



 (35)



(37)



(53)



(53)

Eliminations and other 



 (5)



-



(19)



-





 (258)



(148)



(590)



(315)















Non-Recurring Gains (Losses) included in Operating Profit:







UTC Climate, Controls & Security



 (65)



35



157



43

Pratt & Whitney



 - 



-



-



41

Sikorsky



 - 



-



-



73

Eliminations and other



 - 



(45)



24



(45)





 (65)



(10)



181



112
















Total impact on Consolidated Operating Profit



 (323)



(158)



(409)



(203)















Non-Recurring items included in Interest


-



89



40



89


Expense, Net




























Tax effect of restructuring and non-recurring













      items above



 92 



17



122



15















Non-Recurring items included in Income













Tax Expense



 - 



63



237



80
















Impact on Net Income from Continuing Operations Attributable to Common Shareowners


$

(231)


$

11


$

(10)


$

(19)
















Impact on Diluted Earnings Per Share from Continuing Operations


$

(0.25)


$

0.01


$

(0.01)


$

(0.02)





Details of the non-recurring items for the quarters and years ended December 31, 2012 and 2011 above are as follows:

Quarter Ended December 31, 2012

UTC Climate, Controls & Security:  Approximately $65 million net charge from UTC Climate, Controls & Security's ongoing portfolio transformation.  This net charge includes approximately $24 million of pension settlement charges related to the sale of a controlling interest in its Canadian distribution business and $39 million of impairment charges related to the planned disposition of certain fire and security businesses.

Discontinued Operations:  Approximately $2,103 million gain ($1,050 million net of tax) on the sale of the legacy Hamilton Sundstrand's Industrial businesses.

Quarter Ended September 30, 2012

Eliminations and other:  Approximately $34 million non-cash gain recognized on the remeasurement to fair value of our previously held shares of Goodrich Corporation stock resulting from our acquisition of the company.

Interest Expense, Net:  Approximately $25 million of favorable pre-tax interest adjustments related to the resolution of disputes with the Appeals Division of the IRS for the Company's 2004 - 2005 tax years.

Income Tax Expense:  Approximately $34 million of favorable income tax adjustments related to the resolution of disputes with the Appeals Division of the IRS for the Company's 2004 - 2005 tax years.

Discontinued Operations:  Approximately $127 million of favorable income tax adjustments related to the reversal of a portion of the deferred tax liability initially recorded during the quarter ended March 31, 2012 on the existing difference between the expected accounting versus tax gain on the planned disposition of legacy Hamilton Sundstrand's Industrial businesses. As a result of the structure of the transaction that was finalized in July 2012, a portion of the deferred tax liability cannot be recorded until the sale is finalized.

Quarter Ended June 30, 2012

UTC Climate, Controls & Security:  Approximately $110 million net gain from UTC Climate, Controls & Security's ongoing portfolio transformation.  This net gain includes approximately $142 million from the sale of a controlling interest in its Canadian distribution business, partially offset by a $32 million loss on the disposition of its U.S. fire and security branch operations.

Discontinued Operations:

  • Approximately $179 million pre-tax impairment charge related to inventory, fixed assets and goodwill, as a result of the decision to dispose of the UTC Power business.
  • Approximately $91 million reserve for potential remediation costs associated with certain components of wind turbines previously installed by our Clipper business.

Quarter Ended March 31, 2012

UTC Climate, Controls & Security:  Approximately $112 million net gain from UTC Climate, Controls & Security's ongoing portfolio transformation.  This net gain includes approximately $215 million from the sale of a controlling interest in a manufacturing and distribution joint venture in Asia, partially offset by $103 million of impairment charges related to planned business dispositions.

Eliminations and other:  An additional $10 million of reserves were established for the export licensing compliance matters recorded in the fourth quarter 2011.

Interest Expense, Net:  Approximately $15 million of favorable pre-tax interest adjustments related to the conclusion of the IRS's examination of the Company's 2006 – 2008 tax years.

Income Tax Expense:  Approximately $203 million of favorable income tax adjustments related to the conclusion of the IRS's examination of the Company's 2006 – 2008 tax years.

Discontinued Operations:

  • Approximately $360 million and $590 million of pre-tax goodwill impairment charges ($220 million and $410 million after tax) related to Rocketdyne and Clipper, respectively.
  • Approximately $235 million of unfavorable income tax adjustments related to the recognition of a deferred tax liability on the existing difference between the expected accounting versus tax gain on the planned disposition of legacy Hamilton Sundstrand's Industrial businesses.

Quarter Ended December 31, 2011

UTC Climate, Controls & Security: 

  • Approximately $81 million net gain resulting from Carrier's ongoing portfolio transformation primarily as a result of the contribution of Carrier's heating, air-conditioning, and ventilation operations in Brazil, Argentina, and Chile into a new venture controlled by Midea Group of China.
  • Approximately $46 million other-than-temporary impairment charge on an equity investment.

Eliminations and other:  Approximately $45 million of reserves were established for legal matters.

Interest Expense, Net: Approximately $89 million of favorable pre-tax interest adjustments related to the settlement of U.S. federal income tax refund claims for years prior to 2004.

Income Tax Expense: Approximately $63 million of favorable income tax adjustments related to the settlement of U.S. federal income tax refund claims for years prior to 2004.

Quarter Ended September 30, 2011

UTC Climate, Controls & Security: 

  • Approximately $28 million net gain resulting from dispositions associated with UTC Climate, Controls & Security's ongoing portfolio transformation.
  • Approximately $20 million other-than-temporary impairment charge on an equity investment.

Pratt & Whitney:  Approximately $41 million gain recognized from the sale of an equity investment.

Income Tax Expense:  Favorable tax benefit of approximately $17 million as a result of a U.K. tax rate reduction enacted in July 2011.

Quarter Ended June 30, 2011

Sikorsky:  Approximately $73 million gain recognized from the contribution of a business into a new venture in the United Arab Emirates.

The following page provides segment net sales, operating profits and operating profit margins as adjusted for the aforementioned restructuring costs and non-recurring items.  Management believes these adjusted results more accurately portray the ongoing operational performance and fundamentals of the underlying businesses.  The amount and timing of restructuring costs and non-recurring activity can vary substantially from period to period with no assurances of comparable activity or amounts being incurred in future periods.  These amounts have therefore been adjusted out in the following schedule in order to provide a more representative comparison of current year operating performance to prior year performance.


 

United Technologies Corporation

Segment Net Sales and Operating Profit Adjusted for Restructuring Costs and Non-Recurring Items (as reflected on the previous pages)

 








Quarter Ended

December 31,


Year Ended

December 31,



(Unaudited)


(Unaudited)

(Millions)


2012


2011


2012


2011














Net Sales













Otis


$

3,205


$

3,211


$

12,056


$

12,437

UTC Climate, Controls & Security



4,147



4,410



17,090



18,864

Pratt & Whitney



3,891



3,481



13,964



12,711

UTC Aerospace Systems



3,174



1,264



8,334



4,760

Sikorsky



2,176



2,110



6,791



7,355

Segment Sales



16,593



14,476



58,235



56,127

Eliminations and other



(150)



(99)



(527)



(373)

Consolidated Net Sales


$

16,443


$

14,377


$

57,708


$

55,754



























Adjusted Operating Profit













Otis


$

703


$

737


$

2,676


$

2,888

UTC Climate, Controls & Security



570



487



2,411



2,295

Pratt & Whitney



403



537



1,685



1,878

UTC Aerospace Systems



339



204



1,059



770

Sikorsky



195



244



765



820

Adjusted Segment Operating Profit



2,210



2,209



8,596



8,651

Eliminations and other



(13)



(82)



(77)



(183)

General corporate expenses



(123)



(124)



(426)



(419)

Adjusted Consolidated Operating Profit


$

2,074


$

2,003


$

8,093


$

8,049



























Adjusted Segment Operating Profit Margin













Otis



21.9%



23.0%



22.2%



23.2%

UTC Climate, Controls & Security



13.7%



11.0%



14.1%



12.2%

Pratt & Whitney



10.4%



15.4%



12.1%



14.8%

UTC Aerospace Systems



10.7%



16.1%



12.7%



16.2%

Sikorsky



9.0%



11.6%



11.3%



11.1%

Adjusted Segment Operating Profit Margin



13.3%



15.3%



14.8%



15.4%

 


 

United Technologies Corporation

Condensed Consolidated Balance Sheet

 










December 31,


December 31,




2012


2011

(Millions)


(Unaudited)


(Unaudited)

Assets







Cash and cash equivalents


$

4,819


$

5,960

Accounts receivable, net



11,099



9,546

Inventories and contracts in progress, net



9,537



7,797

Assets held for sale



1,071



-

Other assets, current



3,084



2,455


Total Current Assets



29,610



25,758









Fixed assets, net



8,518



6,201

Goodwill



27,801



17,943

Intangible assets, net



15,189



3,918

Other assets



8,291



7,632









Total Assets


$

89,409


$

61,452









Liabilities and Equity







Short-term debt


$

1,624


$

759

Accounts payable



6,431



5,570

Accrued liabilities



15,310



12,287

Liabilities held for sale



421



-


Total Current Liabilities



23,786



18,616









Long-term debt



21,597



9,501

Other long-term liabilities



16,719



10,157


Total Liabilities



62,102



38,274









Redeemable noncontrolling interest



238



358









Shareowners' Equity:







Common Stock



13,837



13,293

Treasury Stock



(19,251)



(19,410)

Retained earnings



36,776



33,487

Accumulated other comprehensive loss



(5,448)



(5,490)


Total Shareowners' Equity



25,914



21,880

Noncontrolling interest



1,155



940


Total Equity



27,069



22,820









Total Liabilities and Equity


$

89,409


$

61,452









Debt Ratios:







Debt to total capitalization



46%



31%

Net debt to net capitalization



40%



16%









See accompanying Notes to Condensed Consolidated Financial Statements.

 


 

United Technologies Corporation

Condensed Consolidated Statement of Cash Flows

 












Quarter Ended

December 31,


Year Ended

December 31,





(Unaudited)


(Unaudited)

(Millions)


2012


2011


2012


2011

Operating Activities of Continuing Operations:














Income from continuing operations


$

1,037


$

1,375


$

5,200


$

5,216


Adjustments to reconcile net income from continuing

   operations to net cash flows provided by operating

   activities of continuing operations:















Depreciation and amortization



477



301



1,524



1,263



Deferred income tax provision (benefit)



91



(3)



120



334



Stock compensation cost



60



42



210



221



Change in working capital



252



261



103



(291)


Global pension contributions  *



(197)



(305)



(430)



(551)


Other operating activities, net



234



239



(122)



268



Net cash flows provided by operating activities
of continuing operations



1,954



1,910



6,605



6,460
















Investing Activities of Continuing Operations:














Capital expenditures



(641)



(359)



(1,389)



(929)


Acquisitions and dispositions of businesses, net



45



(16)



(15,601)



137


Increase in collaboration intangible assets



(149)



-



(1,543)



-


Other investing activities, net



(55)



(9)



(262)



120



Net cash flows used in investing activities of continuing
operations



(800)



(384)



(18,795)



(672)
















Financing Activities of Continuing Operations:














(Repayment) issuance of long-term debt, net



(741)



(507)



10,057



(557)


(Decrease) increase in short-term borrowings, net



(4,723)



(568)



(214)



562


Dividends paid on Common Stock



(464)



(410)



(1,752)



(1,602)


Repurchase of Common Stock



-



-



-



(2,175)


Other financing activities, net



(37)



(108)



(70)



(211)



Net cash flows (used in) provided by financing activities
  of continuing operations



(5,965)



(1,593)



8,021



(3,983)
















Discontinued Operations:














Net cash provided by operating activities



19



102



41



130


Net cash provided by (used in) investing activities



3,326



(25)



2,974



(35)


Net cash used in financing activities



-



(2)



-



(22)



Net cash flows provided by discontinued operations



3,345



75



3,015



73
















Effect of foreign exchange rate changes on cash and

    cash equivalents



5



(14)



30



(1)


















Net (decrease) increase in cash and cash equivalents



(1,461)



(6)



(1,124)



1,877
















Cash and cash equivalents, beginning of period



6,297



5,966



5,960



4,083

Cash and cash equivalents, end of period



4,836



5,960



4,836



5,960


Less: Cash and cash equivalents

    of assets held for sale



(17)



-



(17)



-

Cash and cash equivalents of continuing

   operations, end of period


$

4,819


$

5,960


$

4,819


$

5,960































* Non-cash activities include contributions of UTC common stock to domestic defined benefit pension plans of

        $450 million during the third quarter of 2011.
















See accompanying Notes to Condensed Consolidated Financial Statements.

 


 

United Technologies Corporation

Free Cash Flow Reconciliation

 









Quarter Ended December 31,





(Unaudited)


(Millions)


2012



2011














Net income attributable to common shareowners from

   continuing operations


$

945




$

1,280















Net cash flows provided by operating activities of

   continuing operations


$

1,954




$

1,910




Net cash flows provided by operating activities of continuing

   operations as a percentage of net income attributable to

   common shareowners from continuing operations




207

%




149

%

Capital expenditures



(641)





(359)




Capital expenditures as a percentage of net income

     attributable to common shareowners from continuing operations




(68)

%




(28)

%

Free cash flow from continuing operations


$

1,313




$

1,551




Free cash flow from continuing operations as a percentage of

   net income attributable to common shareowners

   from continuing operations




139

%




121

%




























Year Ended December 31,





(Unaudited)


(Millions)


2012



2011














Net income attributable to common shareowners from

   continuing operations


$

4,847




$

4,831















Net cash flows provided by operating activities of

   continuing operations


$

6,605




$

6,460




Net cash flows provided by operating activities of continuing

   operations as a percentage of net income attributable to

   common shareowners from continuing operations




136

%




134

%

Capital expenditures



(1,389)





(929)




Capital expenditures as a percentage of net income

     attributable to common shareowners from continuing operations




(29)

%




(19)

%

Free cash flow from continuing operations


$

5,216




$

5,531




Free cash flow from continuing operations as a percentage of

   net income attributable to common shareowners

   from continuing operations




108

%




114

%

United Technologies Corporation

Notes to Condensed Consolidated Financial Statements



(1) Debt to total capitalization equals total debt divided by total debt plus equity.  Net debt to net capitalization equals total debt less cash and cash equivalents divided by total debt plus equity less cash and cash equivalents.


(2) Organic sales growth represents the total reported increase within the Corporation's ongoing businesses less the impact of foreign currency translation, acquisitions and divestitures completed in the preceding twelve months and significant non-recurring items.


(3) Free cash flow, which represents cash flow from operations less capital expenditures, is the principal cash performance measure used by UTC. Management believes free cash flow provides a relevant measure of liquidity and a useful basis for assessing UTC's ability to fund its activities, including the financing of acquisitions, debt service, repurchases of UTC's common stock and distribution of earnings to shareholders.  Other companies that use the term free cash flow may calculate it differently.  The reconciliation of net cash flow provided by operating activities, prepared in accordance with generally accepted accounting principles, to free cash flow is shown above.


(4)  Prior period amounts reported within these Condensed Consolidated Financial Statements have been revised for:


  • The combination of the financial results of the former Carrier and UTC Fire & Security segments into a new segment called UTC Climate, Controls & Security; and
  • Discontinued operations related to actual and planned divestiture of a number of non-core businesses.

Contact: John Moran, UTC
(860) 728-7062

SOURCE United Technologies Corp.



RELATED LINKS
http://www.utc.com

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