HARTFORD, Conn., April 21, 2015 /PRNewswire/ -- United
Technologies Corp. (NYSE:UTX) today reported first quarter earnings
per share of $1.58 and net income
attributable to common shareowners of $1.4
billion, up 20 percent and 18 percent respectively versus
the prior year. Results for the current quarter include
favorable one-time items of $0.07 per
share net of restructuring costs. Earnings per share in the year
ago quarter included $0.09 of net
restructuring costs. Excluding these items in both quarters,
earnings per share of $1.51 increased
7 percent year over year. Foreign currency had an unfavorable
impact of $0.07.
![United Technologies Corp. United Technologies Corp.](http://photos.prnewswire.com/prnvar/20140122/NE50390LOGO)
Sales of $14.5 billion decreased
by 1 percent, reflecting the impact of adverse foreign exchange (4
points), which was partially offset by the benefit of organic
growth (3 points). First quarter segment operating profit increased
8 percent over the prior year quarter. Adjusted for
restructuring costs and net one-time items, segment operating
profit was flat, including an unfavorable impact from foreign
exchange (5 points).
"We had a good start to the year, despite headwinds from a
stronger U.S. dollar," said Gregory
Hayes, UTC President and Chief Executive Officer. "The
fundamentals of all of our businesses remained solid, continuing to
drive strong organic sales growth and allowing us to increase EPS
by 13 percent on a constant currency basis, excluding the impact of
gains and restructuring."
Otis new equipment orders in the quarter increased 8 percent
over the prior year at constant currency. Equipment orders at UTC
Climate, Controls & Security increased 6 percent. Commercial
aerospace aftermarket sales were up 2 percent at Pratt &
Whitney and up 4 percent at UTC Aerospace Systems on an organic
basis.
"Although commercial aerospace aftermarket growth was slower in
the quarter than we anticipate for the year," Hayes added, "the
commercial building business in the U.S. is looking better and I'm
encouraged by the signs of growth that we're seeing in Europe. We remain confident in our
expectations of 3 to 5 percent organic top line growth and sales of
$65 to $66 billion, and this
continues to support our earnings per share guidance of
$6.85 to $7.05 in 2015."
Cash flow from operations was $1.3
billion and capital expenditures were $348 million in the quarter. The planned share
repurchase of $3.0 billion for the
year has been completed. UTC continues to assume a
placeholder for full year acquisition spend of $1 billion and expects cash flow from operations
less capital expenditures in the range of 90 to 100 percent of net
income attributable to common shareowners for 2015.
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. Foreign currency impact includes
currency translation as well as hedging activity at Pratt &
Whitney Canada. 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 the plans, strategies, and objectives of UTC
for future operations, including statements relating to a potential
strategic alternative transaction relating to Sikorsky, or the
terms, timing or structure of any such transaction (or whether any
such transaction will take place at all); the future performance of
UTC or Sikorsky if any such transaction is completed; future and
estimated sales, earnings, cash flow, charges, expenditures and
share repurchases; anticipated growth in sales; new products and
their entry into service; anticipated benefits of organizational
changes; and other measures of financial or operational
performance. There can be no assurance that any transaction or
future events will occur as anticipated, if at all, or that actual
results will be as expected. 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 risks
related to a potential separation of, or any other transaction
relating to, Sikorsky; 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 condition 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; challenges in the development and production of new
products and services; the impact of diversification across
product lines, regions and industries; the impact 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 presentation 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 or furnished to 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 Operations
|
|
|
|
|
|
Quarter Ended
March 31,
|
|
|
(Unaudited)
|
(Millions, except per
share amounts)
|
2015
|
|
2014
|
Net
Sales
|
$
|
14,541
|
|
|
$
|
14,745
|
|
Costs and
Expenses:
|
|
|
|
|
Cost of products and
services sold
|
10,523
|
|
|
10,690
|
|
|
Research and
development
|
602
|
|
|
624
|
|
|
Selling, general and
administrative
|
1,563
|
|
|
1,596
|
|
|
Total Costs and
Expenses
|
12,688
|
|
|
12,910
|
|
Other income,
net
|
421
|
|
|
263
|
|
Operating
profit
|
2,274
|
|
|
2,098
|
|
|
Interest expense,
net
|
218
|
|
|
225
|
|
Income before income
taxes
|
2,056
|
|
|
1,873
|
|
|
Income tax
expense
|
558
|
|
|
567
|
|
Net income
|
1,498
|
|
|
1,306
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings
|
72
|
|
|
93
|
|
Net income
attributable to common shareowners
|
$
|
1,426
|
|
|
$
|
1,213
|
|
Earnings Per Share
of Common Stock:
|
|
|
|
|
Basic
|
$
|
1.60
|
|
|
$
|
1.35
|
|
|
Diluted
|
1.58
|
|
|
1.32
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
Basic
shares
|
890
|
|
|
901
|
|
|
Diluted
shares
|
904
|
|
|
917
|
|
|
|
|
|
|
|
|
As described on the
following pages, consolidated results for the quarters ended March
31, 2015 and 2014 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)
|
2015
|
|
2014
|
Net
Sales
|
|
|
|
Otis
|
$
|
2,745
|
|
|
$
|
2,955
|
|
UTC Climate, Controls
& Security
|
3,852
|
|
|
3,851
|
|
Pratt &
Whitney
|
3,332
|
|
|
3,329
|
|
UTC Aerospace
Systems
|
3,548
|
|
|
3,450
|
|
Sikorsky
|
1,267
|
|
|
1,361
|
|
Segment
Sales
|
14,744
|
|
|
14,946
|
|
Eliminations and
other
|
(203)
|
|
|
(201)
|
|
Consolidated Net
Sales
|
$
|
14,541
|
|
|
$
|
14,745
|
|
|
|
|
|
Operating
Profit
|
|
|
|
Otis
|
$
|
527
|
|
|
$
|
570
|
|
UTC Climate, Controls
& Security
|
729
|
|
|
537
|
|
Pratt &
Whitney
|
419
|
|
|
388
|
|
UTC Aerospace
Systems
|
569
|
|
|
590
|
|
Sikorsky
|
92
|
|
|
86
|
|
Segment Operating
Profit
|
2,336
|
|
|
2,171
|
|
Eliminations and
other
|
48
|
|
|
39
|
|
General corporate
expenses
|
(110)
|
|
|
(112)
|
|
Consolidated
Operating Profit
|
$
|
2,274
|
|
|
$
|
2,098
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
Otis
|
|
19.2
|
%
|
|
|
19.3
|
%
|
UTC Climate, Controls
& Security
|
|
18.9
|
%
|
|
|
13.9
|
%
|
Pratt &
Whitney
|
|
12.6
|
%
|
|
|
11.7
|
%
|
UTC Aerospace
Systems
|
|
16.0
|
%
|
|
|
17.1
|
%
|
Sikorsky
|
|
7.3
|
%
|
|
|
6.3
|
%
|
Segment Operating
Profit Margin
|
|
15.8
|
%
|
|
|
14.5
|
%
|
|
|
|
|
|
|
|
|
As described on the
following pages, consolidated results for the quarters ended March
31, 2015 and 2014 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)
|
2015
|
|
2014
|
Restructuring
Costs included in Operating Profit:
|
|
|
|
Otis
|
$
|
(6)
|
|
|
$
|
(17)
|
|
UTC Climate, Controls
& Security
|
(24)
|
|
|
(43)
|
|
Pratt &
Whitney
|
(13)
|
|
|
(42)
|
|
UTC Aerospace
Systems
|
(50)
|
|
|
(6)
|
|
Sikorsky
|
—
|
|
|
(17)
|
|
|
(93)
|
|
|
(125)
|
|
Non-Recurring
items included in Operating Profit:
|
|
|
|
UTC Climate, Controls
& Security
|
126
|
|
|
—
|
|
Total impact on
Consolidated Operating Profit
|
33
|
|
|
(125)
|
|
Tax effect of
restructuring and non-recurring items above
|
30
|
|
|
42
|
|
Impact on Net Income
Attributable to Common Shareowners
|
$
|
63
|
|
|
$
|
(83)
|
|
Impact on Diluted
Earnings Per Share
|
$
|
0.07
|
|
|
$
|
(0.09)
|
|
|
|
|
|
|
|
|
|
Details of the
non-recurring items for the quarter ended March 31, 2015 above are
as follows:
|
|
Quarter Ended
March 31, 2015
|
|
UTC Climate,
Controls & Security: Approximately $126 million gain as a
result of a fair value adjustment related to the acquisition of a
controlling interest in a joint venture investment.
|
United
Technologies Corporation
|
Segment Net Sales
and Operating Profit Adjusted for Restructuring Costs and
Non-Recurring Items (as reflected on the previous
page)
|
|
|
|
Quarter Ended
March 31,
|
|
(Unaudited)
|
(Millions)
|
2015
|
|
2014
|
Net
Sales
|
|
|
|
Otis
|
$
|
2,745
|
|
|
$
|
2,955
|
|
UTC Climate, Controls
& Security
|
3,852
|
|
|
3,851
|
|
Pratt &
Whitney
|
3,332
|
|
|
3,329
|
|
UTC Aerospace
Systems
|
3,548
|
|
|
3,450
|
|
Sikorsky
|
1,267
|
|
|
1,361
|
|
Segment
Sales
|
14,744
|
|
|
14,946
|
|
Eliminations and
other
|
(203)
|
|
|
(201)
|
|
Consolidated Net
Sales
|
$
|
14,541
|
|
|
$
|
14,745
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
|
|
Otis
|
$
|
533
|
|
|
$
|
587
|
|
UTC Climate, Controls
& Security
|
627
|
|
|
580
|
|
Pratt &
Whitney
|
432
|
|
|
430
|
|
UTC Aerospace
Systems
|
619
|
|
|
596
|
|
Sikorsky
|
92
|
|
|
103
|
|
Segment Operating
Profit
|
2,303
|
|
|
2,296
|
|
Eliminations and
other
|
48
|
|
|
39
|
|
General corporate
expenses
|
(110)
|
|
|
(112)
|
|
Adjusted
Consolidated Operating Profit
|
$
|
2,241
|
|
|
$
|
2,223
|
|
|
|
|
|
|
|
|
|
Adjusted Segment
Operating Profit Margin
|
|
19.4
|
%
|
|
|
19.9
|
%
|
Otis
|
|
16.3
|
%
|
|
|
15.1
|
%
|
UTC Climate, Controls
& Security
|
|
13.0
|
%
|
|
|
12.9
|
%
|
Pratt &
Whitney
|
|
13.0
|
%
|
|
|
12.9
|
%
|
UTC Aerospace
Systems
|
|
17.4
|
%
|
|
|
17.3
|
%
|
Sikorsky
|
|
7.3
|
%
|
|
|
7.6
|
%
|
Adjusted Segment
Operating Profit Margin
|
|
15.6
|
%
|
|
|
15.4
|
%
|
|
|
|
|
|
|
|
|
United
Technologies Corporation
|
Condensed
Consolidated Balance Sheet
|
|
|
|
|
|
March
31,
|
|
December 31,
|
|
2015
|
|
2014
|
(Millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
5,281
|
|
|
$
|
5,235
|
|
Accounts receivable,
net
|
11,512
|
|
|
11,317
|
|
Inventories and
contracts in progress, net
|
10,336
|
|
|
9,865
|
|
Other assets,
current
|
2,829
|
|
|
3,341
|
|
Total Current
Assets
|
29,958
|
|
|
29,758
|
|
Fixed assets,
net
|
9,175
|
|
|
9,276
|
|
Goodwill
|
27,557
|
|
|
27,796
|
|
Intangible assets,
net
|
15,571
|
|
|
15,560
|
|
Other
assets
|
9,066
|
|
|
8,899
|
|
Total
Assets
|
$
|
91,327
|
|
|
$
|
91,289
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term
debt
|
$
|
4,184
|
|
|
$
|
1,922
|
|
Accounts
payable
|
6,929
|
|
|
6,967
|
|
Accrued
liabilities
|
14,616
|
|
|
14,006
|
|
Total Current
Liabilities
|
25,729
|
|
|
22,895
|
|
Long-term
debt
|
17,809
|
|
|
17,872
|
|
Other long-term
liabilities
|
17,487
|
|
|
17,818
|
|
Total
Liabilities
|
61,025
|
|
|
58,585
|
|
Redeemable
noncontrolling interest
|
135
|
|
|
140
|
|
Shareowners'
Equity:
|
|
|
|
Common
Stock
|
14,919
|
|
|
15,185
|
|
Treasury
Stock
|
(24,520)
|
|
|
(21,922)
|
|
Retained
earnings
|
45,462
|
|
|
44,611
|
|
Accumulated other
comprehensive loss
|
(7,211)
|
|
|
(6,661)
|
|
Total Shareowners'
Equity
|
28,650
|
|
|
31,213
|
|
Noncontrolling
interest
|
1,517
|
|
|
1,351
|
|
Total
Equity
|
30,167
|
|
|
32,564
|
|
Total Liabilities
and Equity
|
$
|
91,327
|
|
|
$
|
91,289
|
|
|
|
|
|
|
|
|
|
Debt
Ratios:
|
|
|
|
|
|
|
|
Debt to total
capitalization:
|
|
42
|
%
|
|
|
38
|
%
|
Net debt to net
capitalization
|
|
36
|
%
|
|
|
31
|
%
|
|
|
|
|
|
|
|
|
See accompanying
Notes to Condensed Consolidated Financial Statements.
|
United
Technologies Corporation
|
|
Condensed
Consolidated Statement of Cash Flows
|
|
|
|
|
Quarter Ended
March 31,
|
|
(Unaudited)
|
(Millions)
|
2015
|
|
2014
|
Operating
Activities:
|
|
|
|
Net income
|
$
|
1,498
|
|
|
$
|
1,306
|
|
Adjustments to
reconcile net income to net cash flows provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
479
|
|
|
467
|
|
Deferred income tax
provision
|
145
|
|
|
44
|
|
Stock compensation
cost
|
51
|
|
|
60
|
|
Change in working
capital
|
(639)
|
|
|
(521)
|
|
Global pension
contributions
|
(45)
|
|
|
(84)
|
|
Other operating
activities, net
|
(179)
|
|
|
63
|
|
Net cash flows
provided by operating activities
|
1,310
|
|
|
1,335
|
|
Investing
Activities:
|
|
|
|
Capital
expenditures
|
(348)
|
|
|
(333)
|
|
Acquisitions and
dispositions of businesses, net
|
(72)
|
|
|
106
|
|
Increase in
collaboration intangible assets
|
(132)
|
|
|
(142)
|
|
Receipts (payments)
from settlements of derivative contracts
|
569
|
|
|
(113)
|
|
Other investing
activities, net
|
156
|
|
|
40
|
|
Net cash flows
provided by (used in) investing activities
|
173
|
|
|
(442)
|
|
Financing
Activities:
|
|
|
|
Issuance of long-term
debt, net
|
10
|
|
|
6
|
|
Increase (decrease)
in short-term borrowings, net
|
2,177
|
|
|
(200)
|
|
Dividends paid on
Common Stock
|
(553)
|
|
|
(514)
|
|
Repurchase of Common
Stock
|
(3,000)
|
|
|
(335)
|
|
Other financing
activities, net
|
(18)
|
|
|
48
|
|
Net cash flows used
in financing activities
|
(1,384)
|
|
|
(995)
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(53)
|
|
|
(40)
|
|
Net increase
(decrease) in cash and cash equivalents
|
46
|
|
|
(142)
|
|
Cash and cash
equivalents, beginning of period
|
5,235
|
|
|
4,619
|
|
Cash and cash
equivalents, end of period
|
$
|
5,281
|
|
|
$
|
4,477
|
|
|
|
|
|
|
|
|
|
See
accompanying Notes to Condensed Consolidated Financial
Statements.
|
United
Technologies Corporation
|
|
Free Cash Flow
Reconciliation
|
|
|
|
|
Quarter Ended
March 31,
|
|
(Unaudited)
|
(Millions)
|
2015
|
|
2014
|
|
|
|
|
|
|
Net income
attributable to common shareowners
|
$
|
1,426
|
|
|
|
$
|
1,213
|
|
|
Net cash flows
provided by operating activities
|
$
|
1,310
|
|
|
|
$
|
1,335
|
|
|
Net cash flows
provided by operating activities as a percentage of net income
attributable to common shareowners
|
|
92
|
%
|
|
|
110
|
%
|
Capital
expenditures
|
(348)
|
|
|
|
(333)
|
|
|
Capital expenditures
as a percentage of net income attributable to common
shareowners
|
|
(24)
|
%
|
|
|
(27)
|
%
|
Free cash
flow
|
$
|
962
|
|
|
|
$
|
1,002
|
|
|
Free cash flow as a
percentage of net income attributable to common
shareowners
|
|
67
|
%
|
|
|
83
|
%
|
|
|
|
|
|
|
|
|
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: Danielle Canzanella,
UTC
(860) 728-6238
Investor Relations
(860) 728-7608
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SOURCE United Technologies Corp.