HARTFORD, Conn., April 22, 2014 /PRNewswire/ -- United
Technologies Corp. (NYSE: UTX) reported first quarter earnings per
share of $1.32 and net income
attributable to common shareowners of $1.2
billion, down 5 percent and 4 percent respectively, over the
year ago quarter. Results for the current quarter include
$0.09 per share of restructuring
costs. Earnings per share in the year ago quarter included
$0.11 of favorable one-time items net
of restructuring costs. Excluding these items in both
quarters, earnings per share increased 10 percent year over
year.
Sales of $14.75 billion increased
2 percent, reflecting the benefit of organic growth (5 points)
partially offset by net divestitures (2 points) and adverse foreign
exchange (1 point). First quarter segment operating profit
increased 4 percent over the prior year quarter. Adjusted for
restructuring costs and net one-time items, segment operating
profit grew 9 percent.
"UTC delivered strong results to start the year with continued
momentum coming out of 2013," said Louis
Chenevert, UTC Chairman & Chief Executive Officer.
"All five of the segments contributed to UTC's organic sales growth
in the quarter. Our focus on growth and execution is paying
off as we capitalize on improving end markets."
New equipment orders at Otis increased 9 percent over the year
ago first quarter, led by 27 percent growth in China. Foreign currency had an
unfavorable impact of 2 points overall and a favorable impact of 2
points in China. Equipment orders at UTC Climate, Controls
& Security increased 1 percent organically, with growth in HVAC
and fire and security products partially offset by a decline at
Transicold. Large commercial engine spares orders were up 11
percent at Pratt & Whitney and commercial spares orders
increased 9 percent at UTC Aerospace Systems.
"Continued organic growth and orders strength give us confidence
in our sales expectation of $64
billion for 2014," added Chenevert. "Based on
visibility to additional restructuring projects with solid returns,
we now plan to increase restructuring spending from $300 million to $375
million, which we expect to be offset by one-time
gains. The sales outlook together with continued cost
reduction positions us to increase the lower end of our earnings
per share range. We now expect earnings per share of
$6.65 to $6.85, up from $6.55 to $6.85 previously."
Cash flow from operations was $1.3
billion and capital expenditures were $333 million in the quarter. Share
repurchase was $335 million and UTC
continues to anticipate share repurchase, acquisitions, and debt
paydown of $1 billion each in 2014.
The company continues to target cash flow from operations
less capital expenditures equal to net income attributable to
common shareowners for the
year.
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 press 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; company and customer directed 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,
investigations 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 press 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
|
|
Contact:
|
John Moran,
UTC
|
|
(860)
728-7062
|
|
|
|
Investor
Relations
|
|
(860)
728-7608
|
United
Technologies Corporation
Condensed
Consolidated Statement of Comprehensive Income
|
|
|
|
Quarter Ended
March 31,
|
|
|
(Unaudited)
|
(Millions, except per
share amounts)
|
2014
|
|
2013
|
Net
Sales
|
$
|
14,745
|
|
|
$
|
14,399
|
|
Costs and
Expenses:
|
|
|
|
|
Cost of products and
services sold
|
10,690
|
|
|
10,465
|
|
|
Research and
development
|
624
|
|
|
610
|
|
|
Selling, general and
administrative
|
1,596
|
|
|
1,627
|
|
|
Total Costs and
Expenses
|
12,910
|
|
|
12,702
|
|
Other income,
net
|
263
|
|
|
309
|
|
Operating
profit
|
2,098
|
|
|
2,006
|
|
|
Interest expense,
net
|
225
|
|
|
236
|
|
Income from
continuing operations before income taxes
|
1,873
|
|
|
1,770
|
|
|
Income tax
expense
|
567
|
|
|
418
|
|
Income from
continuing operations
|
1,306
|
|
|
1,352
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings from continuing
operations
|
93
|
|
|
82
|
|
Income from
continuing operations attributable to common shareowners
|
1,213
|
|
|
1,270
|
|
Discontinued
Operations:
|
|
|
|
|
Income from
operations
|
—
|
|
|
20
|
|
|
Loss on
disposal
|
—
|
|
|
(15)
|
|
|
Income tax
expense
|
—
|
|
|
(9)
|
|
Loss from
discontinued operations attributable to common
shareowners
|
—
|
|
|
(4)
|
|
Net income
attributable to common shareowners
|
$
|
1,213
|
|
|
$
|
1,266
|
|
Comprehensive
income
|
$
|
1,238
|
|
|
$
|
908
|
|
|
Less: Comprehensive
income attributable to noncontrolling interests
|
86
|
|
|
61
|
|
Comprehensive income
attributable to common shareowners
|
$
|
1,152
|
|
|
$
|
847
|
|
Earnings Per Share
of Common Stock - Basic:
|
|
|
|
|
From continuing
operations attributable to common shareowners
|
$
|
1.35
|
|
|
$
|
1.41
|
|
|
From discontinued
operations attributable to common shareowners
|
—
|
|
|
—
|
|
Earnings Per Share
of Common Stock - Diluted:
|
|
|
|
|
From continuing
operations attributable to common shareowners
|
$
|
1.32
|
|
|
$
|
1.39
|
|
|
From discontinued
operations attributable to common shareowners
|
—
|
|
|
—
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
Basic
shares
|
901
|
|
|
901
|
|
|
Diluted
shares
|
917
|
|
|
914
|
|
|
As described on the following pages, consolidated results for
the quarters ended March 31, 2014 and
2013 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
March 31,
|
|
(Unaudited)
|
(Millions)
|
2014
|
|
2013
|
Net
Sales
|
|
|
|
Otis
|
$
|
2,955
|
|
|
$
|
2,814
|
|
UTC Climate, Controls
& Security
|
3,851
|
|
|
3,837
|
|
Pratt &
Whitney
|
3,329
|
|
|
3,402
|
|
UTC Aerospace
Systems
|
3,450
|
|
|
3,263
|
|
Sikorsky
|
1,361
|
|
|
1,249
|
|
Segment
Sales
|
14,946
|
|
|
14,565
|
|
Eliminations and
other
|
(201)
|
|
|
(166)
|
|
Consolidated Net
Sales
|
$
|
14,745
|
|
|
$
|
14,399
|
|
|
|
|
|
Operating
Profit
|
|
|
|
Otis
|
$
|
570
|
|
|
$
|
575
|
|
UTC Climate, Controls
& Security
|
537
|
|
|
520
|
|
Pratt &
Whitney
|
388
|
|
|
406
|
|
UTC Aerospace
Systems
|
590
|
|
|
501
|
|
Sikorsky
|
86
|
|
|
90
|
|
Segment Operating
Profit
|
2,171
|
|
|
2,092
|
|
Eliminations and
other
|
39
|
|
|
21
|
|
General corporate
expenses
|
(112)
|
|
|
(107)
|
|
Consolidated
Operating Profit
|
$
|
2,098
|
|
|
$
|
2,006
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit Margin
|
|
|
|
Otis
|
19.3
|
%
|
|
20.4
|
%
|
UTC Climate, Controls
& Security
|
13.9
|
%
|
|
13.6
|
%
|
Pratt &
Whitney
|
11.7
|
%
|
|
11.9
|
%
|
UTC Aerospace
Systems
|
17.1
|
%
|
|
15.4
|
%
|
Sikorsky
|
6.3
|
%
|
|
7.2
|
%
|
Segment Operating
Profit Margin
|
14.5
|
%
|
|
14.4
|
%
|
|
As described on the following pages, consolidated results for
the quarters ended March 31, 2014 and
2013 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
March 31,
|
|
(Unaudited)
|
In Millions - Income
(Expense)
|
2014
|
|
2013
|
Restructuring
Costs included in Operating Profit:
|
|
|
|
Otis
|
$
|
(17)
|
|
|
$
|
(10)
|
|
UTC Climate, Controls
& Security
|
(43)
|
|
|
(22)
|
|
Pratt &
Whitney
|
(42)
|
|
|
(7)
|
|
UTC Aerospace
Systems
|
(6)
|
|
|
(8)
|
|
Sikorsky
|
(17)
|
|
|
(5)
|
|
|
(125)
|
|
|
(52)
|
|
Non-Recurring
items included in Operating Profit:
|
|
|
|
UTC Climate, Controls
& Security
|
—
|
|
|
38
|
|
|
—
|
|
|
38
|
|
Total impact on
Consolidated Operating Profit
|
(125)
|
|
|
(14)
|
|
Tax effect of
restructuring and non-recurring items above
|
42
|
|
|
16
|
|
Non-Recurring
items included in Income Tax Expense
|
—
|
|
|
95
|
|
Impact on Net Income
from Continuing Operations Attributable to Common
Shareowners
|
$
|
(83)
|
|
|
$
|
97
|
|
Impact on Diluted
Earnings Per Share from Continuing Operations
|
$
|
(0.09)
|
|
|
$
|
0.11
|
|
Details of the non-recurring items for the quarter ended
March 31, 2013 above are as
follows:
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.
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
March 31,
|
|
(Unaudited)
|
(Millions)
|
2014
|
|
2013
|
Net
Sales
|
|
|
|
Otis
|
$
|
2,955
|
|
|
$
|
2,814
|
|
UTC Climate, Controls
& Security
|
3,851
|
|
|
3,837
|
|
Pratt &
Whitney
|
3,329
|
|
|
3,402
|
|
UTC Aerospace
Systems
|
3,450
|
|
|
3,263
|
|
Sikorsky
|
1,361
|
|
|
1,249
|
|
Segment
Sales
|
14,946
|
|
|
14,565
|
|
Eliminations and
other
|
(201)
|
|
|
(166)
|
|
Consolidated Net
Sales
|
$
|
14,745
|
|
|
$
|
14,399
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
|
|
Otis
|
$
|
587
|
|
|
$
|
585
|
|
UTC Climate, Controls
& Security
|
580
|
|
|
504
|
|
Pratt &
Whitney
|
430
|
|
|
413
|
|
UTC Aerospace
Systems
|
596
|
|
|
509
|
|
Sikorsky
|
103
|
|
|
95
|
|
Segment Operating
Profit
|
2,296
|
|
|
2,106
|
|
Eliminations and
other
|
39
|
|
|
21
|
|
General corporate
expenses
|
(112)
|
|
|
(107)
|
|
Adjusted
Consolidated Operating Profit
|
$
|
2,223
|
|
|
$
|
2,020
|
|
|
|
|
|
Adjusted Segment
Operating Profit Margin
|
|
|
|
Otis
|
19.9
|
%
|
|
20.8
|
%
|
UTC Climate, Controls
& Security
|
15.1
|
%
|
|
13.1
|
%
|
Pratt &
Whitney
|
12.9
|
%
|
|
12.1
|
%
|
UTC Aerospace
Systems
|
17.3
|
%
|
|
15.6
|
%
|
Sikorsky
|
7.6
|
%
|
|
7.6
|
%
|
Adjusted Segment
Operating Profit Margin
|
15.4
|
%
|
|
14.5
|
%
|
United
Technologies Corporation
Condensed
Consolidated Balance Sheet
|
|
|
March
31,
|
|
December 31,
|
|
2014
|
|
2013
|
(Millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
4,477
|
|
|
$
|
4,619
|
|
Accounts receivable,
net
|
11,537
|
|
|
11,458
|
|
Inventories and
contracts in progress, net
|
10,992
|
|
|
10,330
|
|
Other assets,
current
|
2,814
|
|
|
3,035
|
|
Total Current
Assets
|
29,820
|
|
|
29,442
|
|
Fixed assets,
net
|
8,895
|
|
|
8,866
|
|
Goodwill
|
28,216
|
|
|
28,168
|
|
Intangible assets,
net
|
15,528
|
|
|
15,521
|
|
Other
assets
|
8,770
|
|
|
8,597
|
|
Total
Assets
|
$
|
91,229
|
|
|
$
|
90,594
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term
debt
|
$
|
304
|
|
|
$
|
500
|
|
Accounts
payable
|
6,949
|
|
|
6,965
|
|
Accrued
liabilities
|
15,678
|
|
|
15,335
|
|
Total Current
Liabilities
|
22,931
|
|
|
22,800
|
|
Long-term
debt
|
19,739
|
|
|
19,741
|
|
Other long-term
liabilities
|
14,727
|
|
|
14,723
|
|
Total
Liabilities
|
57,397
|
|
|
57,264
|
|
Redeemable
noncontrolling interest
|
137
|
|
|
111
|
|
Shareowners'
Equity:
|
|
|
|
Common
Stock
|
14,813
|
|
|
14,638
|
|
Treasury
Stock
|
(20,760)
|
|
|
(20,431)
|
|
Retained
earnings
|
41,205
|
|
|
40,539
|
|
Accumulated other
comprehensive loss
|
(2,941)
|
|
|
(2,880)
|
|
Total Shareowners'
Equity
|
32,317
|
|
|
31,866
|
|
Noncontrolling
interest
|
1,378
|
|
|
1,353
|
|
Total
Equity
|
33,695
|
|
|
33,219
|
|
Total Liabilities
and Equity
|
$
|
91,229
|
|
|
$
|
90,594
|
|
|
|
|
|
Debt
Ratios:
|
|
|
|
Debt to total
capitalization
|
37
|
%
|
|
38
|
%
|
Net debt to net
capitalization
|
32
|
%
|
|
32
|
%
|
|
See accompanying Notes to Condensed Consolidated Financial
Statements.
United
Technologies Corporation
Condensed
Consolidated Statement of Cash Flows
|
|
|
Quarter Ended
March 31,
|
|
(Unaudited)
|
(Millions)
|
2014
|
|
2013
|
Operating
Activities of Continuing Operations:
|
|
|
|
Income from
continuing operations
|
$
|
1,306
|
|
|
$
|
1,352
|
|
Adjustments to
reconcile net income from continuing operations to net cash flows
provided
by operating
activities of continuing operations:
|
|
|
|
Depreciation and
amortization
|
467
|
|
|
444
|
|
Deferred income tax
provision (benefit)
|
44
|
|
|
(40)
|
|
Stock compensation
cost
|
60
|
|
|
70
|
|
Change in working
capital
|
(521)
|
|
|
(198)
|
|
Global pension
contributions
|
(84)
|
|
|
(29)
|
|
Other operating
activities, net
|
63
|
|
|
(190)
|
|
Net cash flows
provided by operating activities of continuing
operations
|
1,335
|
|
|
1,409
|
|
Investing
Activities of Continuing Operations:
|
|
|
|
Capital
expenditures
|
(333)
|
|
|
(295)
|
|
Acquisitions and
dispositions of businesses, net
|
106
|
|
|
722
|
|
Increase in
collaboration intangible assets
|
(142)
|
|
|
(157)
|
|
Other investing
activities, net
|
(73)
|
|
|
69
|
|
Net cash
flows (used in) provided by investing activities of continuing
operations
|
(442)
|
|
|
339
|
|
Financing
Activities of Continuing Operations:
|
|
|
|
Issuance (repayment)
of long-term debt, net
|
6
|
|
|
(46)
|
|
Decrease in
short-term borrowings, net
|
(200)
|
|
|
(329)
|
|
Dividends paid on
Common Stock
|
(514)
|
|
|
(465)
|
|
Repurchase of Common
Stock
|
(335)
|
|
|
(335)
|
|
Other financing
activities, net
|
48
|
|
|
156
|
|
Net cash
flows used in financing activities of continuing
operations
|
(995)
|
|
|
(1,019)
|
|
Discontinued
Operations:
|
|
|
|
Net cash used in
operating activities
|
—
|
|
|
(715)
|
|
Net cash used in
investing activities
|
—
|
|
|
(51)
|
|
Net cash
flows used in discontinued operations
|
—
|
|
|
(766)
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(40)
|
|
|
(18)
|
|
Net
decrease in cash and cash equivalents
|
(142)
|
|
|
(55)
|
|
Cash and cash
equivalents, beginning of period
|
4,619
|
|
|
4,836
|
|
Cash and cash
equivalents, end of period
|
4,477
|
|
|
4,781
|
|
Less: Cash and cash
equivalents of assets held for sale
|
—
|
|
|
14
|
|
Cash and cash
equivalents of continuing operations, end of period
|
$
|
4,477
|
|
|
$
|
4,767
|
|
|
See accompanying Notes to Condensed Consolidated Financial
Statements.
United
Technologies Corporation
Free Cash Flow
Reconciliation
|
|
|
Quarter Ended
March 31,
|
|
(Unaudited)
|
(Millions)
|
2014
|
|
2013
|
|
|
|
|
|
|
Net income from
continuing operations attributable to common shareowners
|
$
|
1,213
|
|
|
|
$
|
1,270
|
|
|
Net cash flows
provided by operating activities of continuing
operations
|
$
|
1,335
|
|
|
|
$
|
1,409
|
|
|
Net cash flows
provided by operating activities of continuing operations as
a
percentage of net
income from continuing operations attributable to common
shareowners
|
|
110
|
%
|
|
|
111
|
%
|
Capital
expenditures
|
(333)
|
|
|
|
(295)
|
|
|
Capital expenditures
as a percentage of net income from continuing operations
attributable to
common shareowners
|
|
(27)
|
%
|
|
|
(23)
|
%
|
Free cash flow from
continuing operations
|
$
|
1,002
|
|
|
|
$
|
1,114
|
|
|
Free cash flow from
continuing operations as a percentage of net income from
continuing operations
attributable to common shareowners
|
|
83
|
%
|
|
|
88
|
%
|
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.
|
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SOURCE United Technologies Corp.