UTC Reports Full Year Earnings Per Share of $6.21, Up 16 Percent Versus Prior Year; Affirms 2014 Outlook

22 Jan, 2014, 06:59 ET from United Technologies Corp.

HARTFORD, Conn., Jan. 22, 2014 /PRNewswire/ -- United Technologies Corp. (NYSE: UTX) reported full year 2013 earnings per share of $6.21 and net income attributable to common shareowners of $5.7 billion, up 16 percent  and 17 percent, respectively over the prior year. Sales of $63 billion were 9 percent above prior year including net acquisitions (8 points) and organic growth (1 point).  The company did not recognize revenue on the Canadian Maritime Helicopter program in 2013 which resulted in a net earnings per share benefit of $0.06 versus expectations. Segment operating margin was 15.3 percent, 130 basis points higher than prior year. Adjusted for restructuring and one-time items, segment operating margin of 15.7 percent was 90 basis points higher than prior year.  Cash flow from operations of $7.5 billion, less capital expenditures of $1.7 billion, exceeded net income attributable to common shareowners.

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"UTC closed a strong 2013 with 16 percent earnings growth despite slower than expected recovery in our end markets," said Louis Chenevert, UTC Chairman & Chief Executive Officer.  "The integration of our transformational deals and relentless focus on cost reduction were at the core of another successful year. And we delivered strong cash flow and margin expansion even as we made significant investments for future growth."

Earnings per share for the fourth quarter of $1.58 included $0.11 of restructuring charges, partially offset by $0.02 of net favorable one-time items. The prior year quarter included $0.25 of restructuring costs and one-time charges.  Adjusted for restructuring costs and net one-time items, earnings per share grew 29 percent, with segment operating margins of 15.3 percent. Sales of $16.8 billion increased 2 percent, reflecting the benefit of organic growth (4 points) partially offset by net divestitures (2 points).  

"We saw an acceleration of organic growth throughout the year," added Chenevert.  "Fourth quarter organic sales growth of 4 percent combined with continued orders strength gives us good momentum as we enter 2014."

New equipment orders at Otis increased 8 percent over the year ago quarter.  UTC Climate, Controls & Security equipment orders increased 5 percent organically.  Large commercial engine spares orders were up 20 percent at Pratt & Whitney and commercial spares orders increased 19 percent at UTC Aerospace Systems.

"We are confident in our ability to deliver 2014 earnings per share of $6.55 to $6.85 on sales of approximately $64 billion," Chenevert said. "With a portfolio and organization focused on our core markets, we have a strong foundation for earnings growth in 2014 and beyond." 

UTC expects to invest nearly $2 billion in capital expenditures in 2014, and continues to target cash flow from operations less capital expenditures equal to net income attributable to common shareowners.  The company also expects share repurchase and acquisition spend of $1 billion each in 2014, following $1.2 billion and $151 million, respectively, in 2013.

United Technologies Corp., based in Hartford, Connecticut, provides 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. To learn more about UTC, visit the website or follow the company on Twitter: @UTC

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," "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, charges, expenditures, share repurchases 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 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 government budget and funding decisions on the economy; changes in government procurement priorities and funding; weather conditions and natural disasters; delays and disruption in delivery of materials and services from suppliers; cost reduction efforts and restructuring costs and consequences thereof; the impact of acquisitions, dispositions, joint ventures and similar transactions; the development and production of new products and services; the impact  of diversification across product lines, regions and industries; the outcome of legal proceedings and other contingencies; pension plan assumptions and future contributions; the effect of changes in tax, environmental and other laws and regulations and political conditions; and other factors beyond our control. The level of share repurchases depends upon market conditions and the level of other investing activities and uses of cash. The 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 as of a later date. For additional information identifying factors that may cause actual results to vary materially from those stated in 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)

2013

2012

2013

2012

Net sales

$

16,759

$

16,443

$

62,626

$

57,708

Costs and Expenses:

Cost of products and services sold

12,284

12,286

45,321

42,153

Research and development

658

712

2,529

2,371

Selling, general and administrative

1,721

1,795

6,718

6,452

Total Costs and Expenses

14,663

14,793

54,568

50,976

Other income, net

234

101

1,151

952

Operating profit

2,330

1,751

9,209

7,684

Interest expense, net

218

260

897

773

Income from continuing operations before income taxes

2,112

1,491

8,312

6,911

Income tax expense

561

454

2,238

1,711

Income from continuing operations

1,551

1,037

6,074

5,200

Less: Noncontrolling interest in subsidiaries' earnings from continuing operations

102

92

388

353

Income from continuing operations attributable to common shareowners

1,449

945

5,686

4,847

Discontinued operations:

Income (loss) from operations

19

63

(998)

(Loss) gain on disposal

(3)

2,092

(33)

2,030

Income tax benefit (expense)

17

(998)

5

(742)

Income from discontinued operations

14

1,113

35

290

Less: Noncontrolling interest in subsidiaries' earnings from discontinued operations

1

7

Income from discontinued operations attributable to common shareowners

14

1,112

35

283

Net income attributable to common shareowners

$

1,463

$

2,057

$

5,721

$

5,130

Comprehensive income

$

4,005

$

1,369

$

8,663

$

5,540

Less: Comprehensive income attributable to noncontrolling interests

97

97

374

368

Comprehensive income attributable to common shareowners

$

3,908

$

1,272

$

8,289

$

5,172

Earnings Per Share of Common Stock - Basic:

From continuing operations attributable to common shareowners

$

1.61

$

1.05

$

6.31

$

5.41

From discontinued operations attributable to common shareowners

0.02

1.24

0.04

0.32

Earnings Per Share of Common Stock - Diluted:

From continuing operations attributable to common shareowners

$

1.58

$

1.04

$

6.21

$

5.35

From discontinued operations attributable to common shareowners

0.02

1.22

0.04

0.31

Weighted average number of shares outstanding:

Basic shares

901

900

901

895

Diluted shares

917

911

915

907

As described on the following pages, consolidated results for the quarters and years ended December 31, 2013 and 2012 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)

2013

2012

2013

2012

Net Sales

Otis

$

3,344

$

3,205

$

12,484

$

12,056

UTC Climate, Controls & Security

4,192

4,147

16,809

17,090

Pratt & Whitney

4,089

3,891

14,501

13,964

UTC Aerospace Systems

3,451

3,174

13,347

8,334

Sikorsky

1,897

2,176

6,253

6,791

Segment Sales

16,973

16,593

63,394

58,235

Eliminations and other

(214)

(150)

(768)

(527)

Consolidated Net Sales

$

16,759

$

16,443

$

62,626

$

57,708

Operating Profit

Otis

$

684

$

644

$

2,590

$

2,512

UTC Climate, Controls & Security

622

460

2,590

2,425

Pratt & Whitney

464

364

1,876

1,589

UTC Aerospace Systems

517

264

2,018

944

Sikorsky

189

160

594

712

Segment Operating Profit

2,476

1,892

9,668

8,182

Eliminations and other

(10)

(18)

22

(72)

General corporate expenses

(136)

(123)

(481)

(426)

Consolidated Operating Profit

$

2,330

$

1,751

$

9,209

$

7,684

Segment Operating Profit Margin

Otis

20.5

%

20.1

%

20.7

%

20.8

%

UTC Climate, Controls & Security

14.8

%

11.1

%

15.4

%

14.2

%

Pratt & Whitney

11.3

%

9.4

%

12.9

%

11.4

%

UTC Aerospace Systems

15.0

%

8.3

%

15.1

%

11.3

%

Sikorsky

10.0

%

7.4

%

9.5

%

10.5

%

Segment Operating Profit Margin

14.6

%

11.4

%

15.3

%

14.0

%

 

As described on the following pages, consolidated results for the quarters and years ended December 31, 2013 and 2012 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 Consolidated Results

 

Quarter Ended December 31,

Year Ended December 31,

(Unaudited)

(Unaudited)

In Millions - Income (Expense)

2013

2012

2013

2012

Restructuring Costs included in Operating Profit:

Otis

$

(20)

$

(59)

$

(88)

$

(164)

UTC Climate, Controls & Security

(31)

(45)

(97)

(143)

Pratt & Whitney

(32)

(39)

(154)

(96)

UTC Aerospace Systems

(27)

(75)

(92)

(115)

Sikorsky

(25)

(35)

(50)

(53)

Eliminations and other

(1)

(5)

(19)

(136)

(258)

(481)

(590)

Non-Recurring items included in Operating Profit:

UTC Climate, Controls & Security

17

(65)

55

157

Pratt & Whitney

168

Eliminations and other

24

17

(65)

223

181

Total impact on Consolidated Operating Profit

(119)

(323)

(258)

(409)

Non-Recurring items included in Interest Expense, Net

12

48

40

Tax effect of restructuring and non-recurring items above

15

92

54

122

Non-Recurring items included in Income Tax Expense

13

154

237

Impact on Net Income from Continuing Operations

Attributable to Common Shareowners

$

(79)

$

(231)

$

(2)

$

(10)

Impact on Diluted Earnings Per Share from Continuing

Operations

$

(0.09)

$

(0.25)

$

$

(0.01)

Details of the non-recurring items for the quarters and years ended December 31, 2013 and 2012 above are as follows:

Quarter Ended December 31, 2013

UTC Climate, Controls & Security:  Approximately $17 million net gain from UTC Climate, Controls & Security's ongoing portfolio transformation, primarily due to a gain on the sale of a business in Australia.

Interest Expense, Net: Approximately $12 million of favorable pre-tax interest adjustments related to the resolution of a dispute with the IRS for the legacy Goodrich 2001 - 2006 tax years.

Income Tax Expense: Approximately $13 million of favorable income tax adjustments related to the resolution of a dispute with the IRS for the legacy Goodrich 2001 - 2006 tax years.

Quarter Ended September 30, 2013

Pratt & Whitney: Approximately $25 million charge to adjust the fair value of a Pratt & Whitney joint venture investment.

Income Tax Expense: Favorable tax benefit of approximately $24 million as a result of a U.K. tax rate reduction enacted in July 2013.

Quarter Ended June 30, 2013

Pratt & Whitney: Approximately $193 million gain from the sale of the Pratt & Whitney Power Systems business.  This gain was not reclassified to "Discontinued Operations" due to our expected level of continuing involvement in the business post disposition.

Interest Expense, Net: Approximately $36 million of favorable pre-tax interest adjustments related to settlements for the Company's tax years prior to 2006, as well as the conclusion of certain IRS examinations of 2009 and 2010 tax years.

Income Tax Expense: Approximately $22 million of favorable income tax adjustments related to the conclusion of certain IRS examinations of 2009 and 2010 tax years.

Quarter Ended March 31, 2013

UTC Climate, Controls & Security:  Approximately $38 million net gain from UTC Climate, Controls & Security's ongoing portfolio transformation, primarily due to a gain on the sale of a business in Hong Kong.

Income Tax Expense:  Approximately $95 million of favorable income tax adjustments as a result of the enactment of the American Taxpayer Relief Act of 2012 in January 2013.  The $95 million is primarily related to the retroactive extension of the research and development credit to 2012.

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 UTC Aerospace Systems' 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.

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)

2013

2012

2013

2012

Net Sales

Otis

$

3,344

$

3,205

$

12,484

$

12,056

UTC Climate, Controls & Security

4,192

4,147

16,809

17,090

Pratt & Whitney

4,089

3,891

14,501

13,964

UTC Aerospace Systems

3,451

3,174

13,347

8,334

Sikorsky

1,897

2,176

6,253

6,791

Segment Sales

16,973

16,593

63,394

58,235

Eliminations and other

(214)

(150)

(768)

(527)

Consolidated Net Sales

$

16,759

$

16,443

$

62,626

$

57,708

Adjusted Operating Profit

Otis

$

704

$

703

$

2,678

$

2,676

UTC Climate, Controls & Security

636

570

2,632

2,411

Pratt & Whitney

496

403

1,862

1,685

UTC Aerospace Systems

544

339

2,110

1,059

Sikorsky

214

195

644

765

Segment Operating Profit

2,594

2,210

9,926

8,596

Eliminations and other

(9)

(13)

22

(77)

General corporate expenses

(136)

(123)

(481)

(426)

Adjusted Consolidated Operating Profit

$

2,449

$

2,074

$

9,467

$

8,093

Adjusted Segment Operating Profit Margin

Otis

21.1

%

21.9

%

21.5

%

22.2

%

UTC Climate, Controls & Security

15.2

%

13.7

%

15.7

%

14.1

%

Pratt & Whitney

12.1

%

10.4

%

12.8

%

12.1

%

UTC Aerospace Systems

15.8

%

10.7

%

15.8

%

12.7

%

Sikorsky

11.3

%

9.0

%

10.3

%

11.3

%

Adjusted Segment Operating Profit Margin

15.3

%

13.3

%

15.7

%

14.8

%

 

United Technologies Corporation Condensed Consolidated Balance Sheet

 

December 31,

December 31,

2013

2012

(Millions)

(Unaudited)

(Unaudited)

Assets

Cash and cash equivalents

$

4,619

$

4,819

Accounts receivable, net

11,458

11,099

Inventories and contracts in progress, net

10,330

9,537

Assets held for sale

1,071

Other assets, current

3,035

3,084

Total Current Assets

29,442

29,610

Fixed assets, net

8,866

8,518

Goodwill

28,168

27,801

Intangible assets, net

15,521

15,189

Other assets

8,597

8,291

Total Assets

$

90,594

$

89,409

Liabilities and Equity

Short-term debt

$

500

$

1,624

Accounts payable

6,965

6,431

Accrued liabilities

15,335

15,310

Liabilities held for sale

421

Total Current Liabilities

22,800

23,786

Long-term debt

19,741

21,597

Other long-term liabilities

14,723

16,719

Total Liabilities

57,264

62,102

Redeemable noncontrolling interest

111

238

Shareowners' Equity:

Common Stock

14,638

13,837

Treasury Stock

(20,431)

(19,251)

Retained earnings

40,539

36,776

Accumulated other comprehensive loss

(2,880)

(5,448)

Total Shareowners' Equity

31,866

25,914

Noncontrolling interest

1,353

1,155

Total Equity

33,219

27,069

Total Liabilities and Equity

$

90,594

$

89,409

Debt Ratios:

Debt to total capitalization

38

%

46

%

Net debt to net capitalization

32

%

40

%

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)

2013

2012

2013

2012

Operating Activities of Continuing Operations:

Income from continuing operations

$

1,551

$

1,037

$

6,074

$

5,200

Adjustments to reconcile net income from continuing

operations to net cash flows provided by operating activities

of continuing operations:

Depreciation and amortization

486

477

1,821

1,524

Deferred income tax provision

228

91

242

120

Stock compensation cost

59

60

275

210

Change in working capital

264

252

(199)

103

Global pension contributions

(37)

(197)

(108)

(430)

Other operating activities, net

62

234

(600)

(122)

Net cash flows provided by operating activities of

continuing operations

2,613

1,954

7,505

6,605

Investing Activities of Continuing Operations:

Capital expenditures

(641)

(641)

(1,688)

(1,389)

Acquisitions and dispositions of businesses, net

65

45

1,409

(15,601)

Increase in collaboration intangible assets

(175)

(149)

(722)

(1,543)

(Increase) decrease in restricted cash

(8)

191

(5)

Other investing activities, net

(105)

(246)

(458)

(262)

Net cash flows used in investing activities of continuing

operations

(864)

(800)

(1,464)

(18,795)

Financing Activities of Continuing Operations:

(Repayment) issuance of long-term debt, net

(976)

(741)

(2,770)

10,057

Increase (decrease) in short-term borrowings, net

91

(4,723)

(113)

(214)

Dividends paid on Common Stock

(512)

(464)

(1,908)

(1,752)

Repurchase of Common Stock

(200)

(1,200)

Other financing activities, net

(116)

(37)

51

(70)

Net cash flows (used in) provided by financing activities

of continuing operations

(1,713)

(5,965)

(5,940)

8,021

Discontinued Operations:

Net cash (used in) provided by operating activities

(25)

19

(628)

41

Net cash provided by investing activities

3,326

351

2,974

Net cash flows (used in) provided by discontinued

operations

(25)

3,345

(277)

3,015

Effect of foreign exchange rate changes on cash and cash equivalents

(13)

5

(41)

30

Net decrease in cash and cash equivalents

(2)

(1,461)

(217)

(1,124)

Cash and cash equivalents, beginning of period

4,621

6,297

4,836

5,960

Cash and cash equivalents, end of period

4,619

4,836

$

4,619

4,836

Less: Cash and cash equivalents of assets held for sale

(17)

(17)

Cash and cash equivalents of continuing operations, end of period

$

4,619

$

4,819

$

4,619

$

4,819

See accompanying Notes to Condensed Consolidated Financial Statements.

 

United Technologies Corporation Free Cash Flow Reconciliation

 

Quarter Ended December 31,

(Unaudited)

(Millions)

2013

2012

Net income attributable to common shareowners from continuing operations

$

1,449

$

945

Net cash flows provided by operating activities of continuing operations

$

2,613

$

1,954

Net cash flows provided by operating activities of continuing operations

as a percentage of net income attributable to common shareowners from

continuing operations

180

%

207

%

Capital expenditures

(641)

(641)

Capital expenditures as a percentage of net income attributable to

common shareowners from continuing operations

(44)

%

(68)

%

Free cash flow from continuing operations

$

1,972

$

1,313

Free cash flow from continuing operations as a percentage of net

income attributable to common shareowners from continuing operations

136

%

139

%

Year Ended December 31,

(Unaudited)

(Millions)

2013

2012

Net income attributable to common shareowners from continuing operations

$

5,686

$

4,847

Net cash flows provided by operating activities of continuing operations

$

7,505

$

6,605

Net cash flows provided by operating activities of continuing operations

as a percentage of net income attributable to common shareowners from

continuing operations

132

%

136

%

Capital expenditures

(1,688)

(1,389)

Capital expenditures as a percentage of net income attributable to

common shareowners from continuing operations

(30)

%

(29)

%

Free cash flow from continuing operations

$

5,817

$

5,216

Free cash flow from continuing operations as a percentage of net

income attributable to common shareowners from continuing operations

102

%

108

%

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.

 

Contact:

John Moran, UTC

(860) 728-7062

Investor Relations

(860) 728-7608

 

SOURCE United Technologies Corp.



RELATED LINKS

http://www.utc.com