HARTFORD, Conn., July 21, 2015 /PRNewswire/ -- United Technologies
Corp. (NYSE: UTX) today reported second quarter earnings per share
of $1.73 and net income attributable
to common shareowners of $1.5
billion, down 6 percent and 8 percent respectively versus
the prior year. Results for the current quarter include
unfavorable one-time items and restructuring charges of
$0.08 per share. Net favorable
one-time items offset restructuring costs in the second quarter of
last year. Excluding these items in both quarters, earnings
per share of $1.81 decreased 2
percent year over year. Foreign currency had an unfavorable
impact of $0.06.
Sales of $16.3 billion decreased
by 5 percent, reflecting the impact of adverse foreign exchange (4
points) and absence of the prior year Sikorsky Canadian Maritime
Helicopter Program adjustment (5 points), which were partially
offset by the benefit of organic growth (3 points) and acquisitions
(1 point) in 2015. Second quarter segment operating profit
increased 21 percent over the prior year quarter. Adjusted
for restructuring costs and net one-time items, segment operating
profit was down 3 percent.
"Through the first half of the year, the businesses delivered 3
percent organic sales growth in what continues to be a slow growth
global economy. This solid growth contributed to a 6 percent
increase in EPS on a constant currency basis, excluding the impact
of gains and restructuring," said Gregory
Hayes, UTC President and Chief Executive Officer. "Continued
strength in the U.S. dollar has had a significant adverse impact on
our results this year."
Otis new equipment orders in the quarter increased 5 percent
over the prior year at constant currency, with growth in the
Americas and in EMEA offset by a 10 percent orders decline in
China. At UTC Climate, Controls
& Security, equipment orders increased 4 percent, with growth
in U.S. residential HVAC and Transicold offset by a 15 percent
orders decline in China. Commercial aerospace aftermarket
sales were up 1 percent at Pratt & Whitney and flat at UTC
Aerospace Systems on an organic basis. Provisioning and
repair sales at UTC Aerospace Systems were down in the quarter, but
those declines were partially offset by high single digit growth in
spare parts sales.
"With six months of trends behind us, it is now clear the
commercial aftermarket at UTC Aerospace Systems will be
significantly below our expectations for the year," Hayes added.
"This, along with continuing softness in Otis Europe and a slowing China, led us to reassess our 2015 outlook for
UTC Aerospace Systems and Otis. We now expect 2015
operating profit at UTC Aerospace Systems to be down $25 to $75 million and at Otis to be down
$25 to $75 million at constant
currency. Including the adverse impact of FX, we expect profit at
Otis to be down $300 to $350 million
compared to prior year."
"While this revised forecast is disappointing, we remain
confident in our long term outlook for the business. We have
industry leading franchises, strong recurring revenue streams and
have focused our portfolio on attractive end markets. We will
accelerate aggressive cost reduction across the businesses and look
for additional structural cost actions that can drive earnings
growth well into the future. We will also look to deploy additional
capital to share repurchase and M&A," Hayes continued.
As announced yesterday, UTC has reached an agreement to sell
Sikorsky to Lockheed Martin for $9
billion, subject to regulatory approvals and customary
closing conditions. As a result, Sikorsky will be reported in
discontinued operations beginning in the third quarter. The
company now expects full year EPS of $6.45
to $6.60 from operations including Sikorsky, but excluding
an expected gain related to its sale. Expectations from continuing
operations are now $6.15 to $6.30.
This is down from the previous expectations of $6.55 to $6.85 and $6.35
to $6.55, respectively. Sales expectations from
continuing operations have also been revised to $57 to $58 billion from the prior expectation of
$58 to $59 billion. The revised
expectations reflect approximately 3 percent organic sales
growth.
Cash flow from operations was $1.5
billion and capital expenditures were $358 million in the quarter. UTC continues to
assume a $1 billion placeholder for
full year acquisition spend and expects cash flow from operations
less capital expenditures in the range of 90 to 100 percent of net
income from continuing operations attributable to common
shareowners for 2015.
United Technologies Corp., based in Hartford, Connecticut, provides high
technology systems 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
sale of 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 sale 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 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 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 June
30,
|
|
Six Months Ended
June 30,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions, except per
share amounts)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net
Sales
|
$
|
16,333
|
|
|
$
|
17,191
|
|
|
$
|
30,874
|
|
|
$
|
31,936
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Cost of products and
services sold
|
11,825
|
|
|
12,931
|
|
|
22,348
|
|
|
23,621
|
|
|
Research and
development
|
606
|
|
|
666
|
|
|
1,208
|
|
|
1,290
|
|
|
Selling, general and
administrative
|
1,543
|
|
|
1,623
|
|
|
3,106
|
|
|
3,219
|
|
|
Total Costs and
Expenses
|
13,974
|
|
|
15,220
|
|
|
26,662
|
|
|
28,130
|
|
Other income,
net
|
193
|
|
|
384
|
|
|
614
|
|
|
647
|
|
Operating
profit
|
2,552
|
|
|
2,355
|
|
|
4,826
|
|
|
4,453
|
|
|
Interest expense,
net
|
216
|
|
|
206
|
|
|
434
|
|
|
431
|
|
Income before income
taxes
|
2,336
|
|
|
2,149
|
|
|
4,392
|
|
|
4,022
|
|
|
Income tax
expense
|
684
|
|
|
359
|
|
|
1,242
|
|
|
926
|
|
Net income
|
1,652
|
|
|
1,790
|
|
|
3,150
|
|
|
3,096
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings
|
110
|
|
|
110
|
|
|
182
|
|
|
203
|
|
Net income
attributable to common shareowners
|
$
|
1,542
|
|
|
$
|
1,680
|
|
|
$
|
2,968
|
|
|
$
|
2,893
|
|
Earnings Per Share
of Common Stock:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.76
|
|
|
$
|
1.87
|
|
|
$
|
3.35
|
|
|
$
|
3.21
|
|
|
Diluted
|
1.73
|
|
|
1.84
|
|
|
3.31
|
|
|
3.16
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
shares
|
877
|
|
|
900
|
|
|
885
|
|
|
900
|
|
|
Diluted
shares
|
889
|
|
|
915
|
|
|
898
|
|
|
915
|
|
As described on the following pages, consolidated results for
the quarters and six months ended June 30,
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 June
30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net
Sales
|
|
|
|
|
|
|
|
Otis
|
$
|
3,098
|
|
|
$
|
3,365
|
|
|
$
|
5,843
|
|
|
$
|
6,320
|
|
UTC Climate, Controls
& Security
|
4,454
|
|
|
4,429
|
|
|
8,306
|
|
|
8,280
|
|
Pratt &
Whitney
|
3,677
|
|
|
3,592
|
|
|
7,009
|
|
|
6,921
|
|
UTC Aerospace
Systems
|
3,632
|
|
|
3,636
|
|
|
7,180
|
|
|
7,086
|
|
Sikorsky
|
1,691
|
|
|
2,384
|
|
|
2,958
|
|
|
3,745
|
|
Segment
Sales
|
16,552
|
|
|
17,406
|
|
|
31,296
|
|
|
32,352
|
|
Eliminations and
other
|
(219)
|
|
|
(215)
|
|
|
(422)
|
|
|
(416)
|
|
Consolidated Net
Sales
|
$
|
16,333
|
|
|
$
|
17,191
|
|
|
$
|
30,874
|
|
|
$
|
31,936
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
Otis
|
$
|
627
|
|
|
$
|
693
|
|
|
$
|
1,154
|
|
|
$
|
1,263
|
|
UTC Climate, Controls
& Security
|
823
|
|
|
815
|
|
|
1,552
|
|
|
1,352
|
|
Pratt &
Whitney
|
487
|
|
|
432
|
|
|
906
|
|
|
820
|
|
UTC Aerospace
Systems
|
580
|
|
|
602
|
|
|
1,149
|
|
|
1,192
|
|
Sikorsky
|
165
|
|
|
(317)
|
|
|
257
|
|
|
(231)
|
|
Segment Operating
Profit
|
2,682
|
|
|
2,225
|
|
|
5,018
|
|
|
4,396
|
|
Eliminations and
other
|
(10)
|
|
|
249
|
|
|
38
|
|
|
288
|
|
General corporate
expenses
|
(120)
|
|
|
(119)
|
|
|
(230)
|
|
|
(231)
|
|
Consolidated
Operating Profit
|
$
|
2,552
|
|
|
$
|
2,355
|
|
|
$
|
4,826
|
|
|
$
|
4,453
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Otis
|
|
20.2
|
%
|
|
|
20.6
|
%
|
|
|
19.8
|
%
|
|
|
20.0
|
%
|
UTC Climate, Controls
& Security
|
|
18.5
|
%
|
|
|
18.4
|
%
|
|
|
18.7
|
%
|
|
|
16.3
|
%
|
Pratt &
Whitney
|
|
13.2
|
%
|
|
|
12.0
|
%
|
|
|
12.9
|
%
|
|
|
11.8
|
%
|
UTC Aerospace
Systems
|
|
16.0
|
%
|
|
|
16.6
|
%
|
|
|
16.0
|
%
|
|
|
16.8
|
%
|
Sikorsky
|
|
9.8
|
%
|
|
|
(13.3)
|
%
|
|
|
8.7
|
%
|
|
|
(6.2)
|
%
|
Segment Operating
Profit Margin
|
|
16.2
|
%
|
|
|
12.8
|
%
|
|
|
16.0
|
%
|
|
|
13.6
|
%
|
As described on the following pages, consolidated results for
the quarters and six months ended June 30,
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 June
30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
In Millions - Income
(Expense)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Non-Recurring
items included in Net Sales:
|
|
|
|
|
|
|
|
Sikorsky
|
$
|
—
|
|
|
$
|
830
|
|
|
$
|
—
|
|
|
$
|
830
|
|
|
|
|
|
|
|
|
|
Restructuring
Costs included in Operating Profit:
|
|
|
|
|
|
|
|
Otis
|
$
|
(8)
|
|
|
$
|
(21)
|
|
|
$
|
(14)
|
|
|
$
|
(38)
|
|
UTC Climate, Controls
& Security
|
(28)
|
|
|
(25)
|
|
|
(52)
|
|
|
(68)
|
|
Pratt &
Whitney
|
(2)
|
|
|
(5)
|
|
|
(15)
|
|
|
(47)
|
|
UTC Aerospace
Systems
|
—
|
|
|
(4)
|
|
|
(50)
|
|
|
(10)
|
|
Sikorsky
|
(23)
|
|
|
—
|
|
|
(23)
|
|
|
(17)
|
|
Eliminations and
other
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(62)
|
|
|
(55)
|
|
|
(155)
|
|
|
(180)
|
|
Non-Recurring
items included in Operating Profit:
|
|
|
|
|
|
|
|
UTC Climate, Controls
& Security
|
—
|
|
|
—
|
|
|
126
|
|
|
—
|
|
Pratt &
Whitney
|
—
|
|
|
(82)
|
|
|
—
|
|
|
(82)
|
|
Sikorsky
|
—
|
|
|
(466)
|
|
|
—
|
|
|
(466)
|
|
Eliminations and
other
|
(28)
|
|
|
220
|
|
|
(28)
|
|
|
220
|
|
|
(28)
|
|
|
(328)
|
|
|
98
|
|
|
(328)
|
|
Total impact on
Consolidated Operating Profit
|
(90)
|
|
|
(383)
|
|
|
(57)
|
|
|
(508)
|
|
Non-Recurring
items included in Interest Expense, Net
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
Tax effect of
restructuring and non-recurring items above
|
23
|
|
|
108
|
|
|
53
|
|
|
150
|
|
Non-Recurring
items included in Income Tax Expense
|
—
|
|
|
253
|
|
|
—
|
|
|
253
|
|
Impact on Net Income
Attributable to Common Shareowners
|
$
|
(67)
|
|
|
$
|
(1)
|
|
|
$
|
(4)
|
|
|
$
|
(84)
|
|
Impact on Diluted
Earnings Per Share
|
$
|
(0.08)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.09)
|
|
Details of the non-recurring items for the quarters and six
months ended June 30, 2015 and 2014
above are as follows:
Quarter Ended June 30,
2015
Eliminations & Other: Approximately
$28 million of transaction and
separation costs related to the planned sale or spin-off of
Sikorsky.
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.
Quarter Ended June 30,
2014
Pratt & Whitney:
- Approximately $60 million charge
to adjust the fair value of a Pratt & Whitney joint venture
investment.
- Approximately $22 million charge
for impairment of assets related to a joint venture.
Sikorsky:
- A cumulative adjustment to record $830
million in sales and $438
million in losses based upon the change in estimate required
for the contractual amendments signed with the Canadian Government
on the Maritime Helicopter program.
- Approximately $28 million charge
for the impairment of a Sikorsky joint venture investment.
Eliminations & Other: Approximately
$220 million gain on an agreement
with a state taxing authority for the monetization of tax
credits.
Interest Expense, Net: Approximately $21 million of favorable pre-tax interest
adjustments, primarily related to the conclusion of the IRS's
examination of the Company's 2009 and 2010 tax years.
Income Tax Expense: Approximately $253 million of favorable income tax adjustments
related to the conclusion of the IRS's examination of the Company's
2009 and 2010 tax years, as well as the settlement of state income
taxes related to the disposition of the Hamilton Sundstrand
Industrials businesses.
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 June
30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Adjusted Net
Sales
|
|
|
|
|
|
|
|
Otis
|
$
|
3,098
|
|
|
$
|
3,365
|
|
|
$
|
5,843
|
|
|
$
|
6,320
|
|
UTC Climate, Controls
& Security
|
4,454
|
|
|
4,429
|
|
|
8,306
|
|
|
8,280
|
|
Pratt &
Whitney
|
3,677
|
|
|
3,592
|
|
|
7,009
|
|
|
6,921
|
|
UTC Aerospace
Systems
|
3,632
|
|
|
3,636
|
|
|
7,180
|
|
|
7,086
|
|
Sikorsky
|
1,691
|
|
|
1,554
|
|
|
2,958
|
|
|
2,915
|
|
Segment
Sales
|
16,552
|
|
|
16,576
|
|
|
31,296
|
|
|
31,522
|
|
Eliminations and
other
|
(219)
|
|
|
(215)
|
|
|
(422)
|
|
|
(416)
|
|
Adjusted
Consolidated Net Sales
|
$
|
16,333
|
|
|
$
|
16,361
|
|
|
$
|
30,874
|
|
|
$
|
31,106
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
|
|
|
|
|
|
Otis
|
$
|
635
|
|
|
$
|
714
|
|
|
$
|
1,168
|
|
|
$
|
1,301
|
|
UTC Climate, Controls
& Security
|
851
|
|
|
840
|
|
|
1,478
|
|
|
1,420
|
|
Pratt &
Whitney
|
489
|
|
|
519
|
|
|
921
|
|
|
949
|
|
UTC Aerospace
Systems
|
580
|
|
|
606
|
|
|
1,199
|
|
|
1,202
|
|
Sikorsky
|
188
|
|
|
149
|
|
|
280
|
|
|
252
|
|
Segment Operating
Profit
|
2,743
|
|
|
2,828
|
|
|
5,046
|
|
|
5,124
|
|
Eliminations and
other
|
19
|
|
|
29
|
|
|
67
|
|
|
68
|
|
General corporate
expenses
|
(120)
|
|
|
(119)
|
|
|
(230)
|
|
|
(231)
|
|
Adjusted
Consolidated Operating Profit
|
$
|
2,642
|
|
|
$
|
2,738
|
|
|
$
|
4,883
|
|
|
$
|
4,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Segment
Operating Profit Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Otis
|
|
20.5
|
%
|
|
|
21.2
|
%
|
|
|
20.0
|
%
|
|
|
20.6
|
%
|
UTC Climate, Controls
& Security
|
|
19.1
|
%
|
|
|
19.0
|
%
|
|
|
17.8
|
%
|
|
|
17.1
|
%
|
Pratt &
Whitney
|
|
13.3
|
%
|
|
|
14.4
|
%
|
|
|
13.1
|
%
|
|
|
13.7
|
%
|
UTC Aerospace
Systems
|
|
16.0
|
%
|
|
|
16.7
|
%
|
|
|
16.7
|
%
|
|
|
17.0
|
%
|
Sikorsky
|
|
11.1
|
%
|
|
|
9.6
|
%
|
|
|
9.5
|
%
|
|
|
8.6
|
%
|
Adjusted Segment
Operating Profit Margin
|
|
16.6
|
%
|
|
|
17.1
|
%
|
|
|
16.1
|
%
|
|
|
16.3
|
%
|
United
Technologies Corporation
Condensed
Consolidated Balance Sheet
|
|
|
June
30,
|
|
December 31,
|
|
2015
|
|
2014
|
(Millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
5,933
|
|
|
$
|
5,235
|
|
Accounts receivable,
net
|
11,516
|
|
|
11,317
|
|
Inventories and
contracts in progress, net
|
10,295
|
|
|
9,865
|
|
Other assets,
current
|
2,925
|
|
|
3,341
|
|
Total Current
Assets
|
30,669
|
|
|
29,758
|
|
Fixed assets,
net
|
9,266
|
|
|
9,276
|
|
Goodwill
|
27,933
|
|
|
27,796
|
|
Intangible assets,
net
|
15,706
|
|
|
15,560
|
|
Other
assets
|
9,199
|
|
|
8,899
|
|
Total
Assets
|
$
|
92,773
|
|
|
$
|
91,289
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term
debt
|
$
|
2,954
|
|
|
$
|
1,922
|
|
Accounts
payable
|
7,153
|
|
|
6,967
|
|
Accrued
liabilities
|
13,622
|
|
|
14,006
|
|
Total Current
Liabilities
|
23,729
|
|
|
22,895
|
|
Long-term
debt
|
19,489
|
|
|
17,872
|
|
Other long-term
liabilities
|
17,483
|
|
|
17,818
|
|
Total
Liabilities
|
60,701
|
|
|
58,585
|
|
Redeemable
noncontrolling interest
|
134
|
|
|
140
|
|
Shareowners'
Equity:
|
|
|
|
Common
Stock
|
15,031
|
|
|
15,185
|
|
Treasury
Stock
|
(24,520)
|
|
|
(21,922)
|
|
Retained
earnings
|
46,443
|
|
|
44,611
|
|
Accumulated other
comprehensive loss
|
(6,577)
|
|
|
(6,661)
|
|
Total Shareowners'
Equity
|
30,377
|
|
|
31,213
|
|
Noncontrolling
interest
|
1,561
|
|
|
1,351
|
|
Total
Equity
|
31,938
|
|
|
32,564
|
|
Total Liabilities
and Equity
|
$
|
92,773
|
|
|
$
|
91,289
|
|
Debt
Ratios:
|
|
|
|
|
|
|
|
Debt to total
capitalization
|
|
41
|
%
|
|
|
38
|
%
|
Net debt to net
capitalization
|
|
34
|
%
|
|
|
31
|
%
|
See accompanying Notes to Condensed Consolidated Financial
Statements.
United
Technologies Corporation
Condensed
Consolidated Statement of Cash Flows
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net income
|
$
|
1,652
|
|
|
$
|
1,790
|
|
|
$
|
3,150
|
|
|
$
|
3,096
|
|
Adjustments to
reconcile net income to net cash flows provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
479
|
|
|
468
|
|
|
958
|
|
|
935
|
|
Deferred income tax
provision (benefit)
|
180
|
|
|
(8)
|
|
|
325
|
|
|
36
|
|
Stock compensation
cost
|
51
|
|
|
58
|
|
|
102
|
|
|
118
|
|
Change in working
capital
|
(407)
|
|
|
(478)
|
|
|
(1,044)
|
|
|
(999)
|
|
Global pension
contributions
|
(26)
|
|
|
(60)
|
|
|
(70)
|
|
|
(144)
|
|
Other operating
activities, net
|
(393)
|
|
|
(28)
|
|
|
(573)
|
|
|
35
|
|
Net cash flows
provided by operating activities
|
1,536
|
|
|
1,742
|
|
|
2,848
|
|
|
3,077
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(358)
|
|
|
(406)
|
|
|
(706)
|
|
|
(739)
|
|
Acquisitions and
dispositions of businesses, net
|
(19)
|
|
|
(34)
|
|
|
(90)
|
|
|
72
|
|
Increase in
collaboration intangible assets
|
(115)
|
|
|
(165)
|
|
|
(247)
|
|
|
(308)
|
|
(Payments) receipts
from settlements of derivative contracts
|
(154)
|
|
|
150
|
|
|
415
|
|
|
37
|
|
Other investing
activities, net
|
(83)
|
|
|
26
|
|
|
72
|
|
|
65
|
|
Net cash flows used
in investing activities
|
(729)
|
|
|
(429)
|
|
|
(556)
|
|
|
(873)
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
(Repayment) issuance
of long-term debt, net
|
(7)
|
|
|
(179)
|
|
|
3
|
|
|
(173)
|
|
Increase in
short-term borrowings, net
|
468
|
|
|
219
|
|
|
2,645
|
|
|
19
|
|
Dividends paid on
Common Stock
|
(543)
|
|
|
(513)
|
|
|
(1,096)
|
|
|
(1,026)
|
|
Repurchase of Common
Stock
|
—
|
|
|
(335)
|
|
|
(3,000)
|
|
|
(670)
|
|
Other financing
activities, net
|
(78)
|
|
|
(41)
|
|
|
(98)
|
|
|
7
|
|
Net cash flows used
in financing activities
|
(160)
|
|
|
(849)
|
|
|
(1,546)
|
|
|
(1,843)
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
5
|
|
|
21
|
|
|
(48)
|
|
|
(18)
|
|
Net increase in cash
and cash equivalents
|
652
|
|
|
485
|
|
|
698
|
|
|
343
|
|
Cash and cash
equivalents, beginning of period
|
5,281
|
|
|
4,477
|
|
|
5,235
|
|
|
4,619
|
|
Cash and cash
equivalents, end of period
|
$
|
5,933
|
|
|
$
|
4,962
|
|
|
$
|
5,933
|
|
|
$
|
4,962
|
|
See accompanying Notes to Condensed Consolidated Financial
Statements.
United
Technologies Corporation
Free Cash Flow
Reconciliation
|
|
|
Quarter Ended June
30,
|
|
(Unaudited)
|
(Millions)
|
2015
|
|
2014
|
|
|
|
|
|
|
Net income
attributable to common shareowners
|
$
|
1,542
|
|
|
|
$
|
1,680
|
|
|
Net cash flows
provided by operating activities
|
$
|
1,536
|
|
|
|
$
|
1,742
|
|
|
Net cash flows
provided by operating activities as a percentage of net income
attributable to common shareowners
|
|
100
|
%
|
|
|
104
|
%
|
Capital
expenditures
|
(358)
|
|
|
|
(406)
|
|
|
Capital expenditures
as a percentage of net income attributable to common
shareowners
|
|
(23)
|
%
|
|
|
(24)
|
%
|
Free cash
flow
|
$
|
1,178
|
|
|
|
$
|
1,336
|
|
|
Free cash flow as a
percentage of net income attributable to common
shareowners
|
|
76
|
%
|
|
|
80
|
%
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
(Millions)
|
2015
|
|
2014
|
|
|
|
|
|
|
Net income
attributable to common shareowners
|
$
|
2,968
|
|
|
|
$
|
2,893
|
|
|
Net cash flows
provided by operating activities
|
$
|
2,848
|
|
|
|
$
|
3,077
|
|
|
Net cash flows
provided by operating activities as a percentage of net income
attributable to common shareowners
|
|
96
|
%
|
|
|
106
|
%
|
Capital
expenditures
|
(706)
|
|
|
|
(739)
|
|
|
Capital expenditures
as a percentage of net income attributable to common
shareowners
|
|
(24)
|
%
|
|
|
(26)
|
%
|
Free cash
flow
|
$
|
2,142
|
|
|
|
$
|
2,338
|
|
|
Free cash flow as a
percentage of net income attributable to common
shareowners
|
|
72
|
%
|
|
|
81
|
%
|
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.