FARMINGTON, Conn., Jan. 27, 2016 /PRNewswire/ --
Adjusted results
- 2015 Adjusted EPS of $6.30 at
high end of expected range
- Adjusted EPS up slightly excluding $0.19 unfavorable FX impact
- Affirms 2016 expectations for Adjusted EPS of $6.30 to $6.60 on sales of $56 billion to $58 billion
Reported (GAAP) results
- 2015 GAAP EPS of $4.53,
reflecting $0.31 in restructuring and
$1.46 of other significant
non-recurring and non-operational items
- Full year sales were $56.1
billion, down 3 percent versus prior year primarily due to
FX, with 1 point of organic sales growth
Key milestones and accomplishments
- First Pratt & Whitney Geared Turbofan-powered A320neo
entered into revenue service
- Won major systems contracts for signature Hudson Yards
development in New York City
- Rebalanced portfolio by divesting Sikorsky
- Returned $12 billion to
shareowners, including share repurchase and dividends
United Technologies Corp. (NYSE: UTX) today reported full year
2015 Adjusted EPS of $6.30. All
results in this release reflect continuing operations unless
otherwise noted.
"I'm pleased to report UTC's 2015 earnings reached the top end
of expectations we set months ago," said UTC President and Chief
Executive Officer Gregory Hayes.
"Solid execution on our strategic priorities has set a strong
foundation for future growth.
"In line with our 2015 strategic priorities, we took decisive
actions to streamline our portfolio with the divestiture of
Sikorsky and return over $12 billion
to shareowners. Returning cash to shareowners continues to be a top
priority and we are still targeting $22
billion of total shareowner returns through share
repurchases and dividends from 2015 through 2017," Hayes
said. "We also streamlined UTC's organizational structure and
initiated a $1.5 billion multi-year
restructuring plan to improve competitiveness.
"UTC is now more focused than ever on innovative new
technologies for the aerospace and buildings industries. This
week Pratt & Whitney's Geared Turbofan entered into service on
the first A320neo – making aviation history by meeting all of its
key performance requirements from day one," Hayes added.
Full year 2015 Adjusted EPS of $6.30 decreased 2 percent year over year, with
foreign currency having an unfavorable impact of $0.19, or 3 percent. Excluding the
unfavorable impact of foreign exchange rates, Adjusted EPS was up
slightly year over year. GAAP earnings per share were
$4.53, reflecting $0.31 in restructuring and $1.46 of net charges related to other significant
non-recurring and non-operational items.
Full year sales of $56.1 billion
decreased by 3 percent, as 1 point of organic sales growth was more
than offset by 4 points of adverse foreign exchange. Free
cash flow for the year was 126 percent of net income attributable
to common shareowners, including slightly more than 25 points of
benefit associated with restructuring and other significant
items.
Fourth quarter Adjusted EPS of $1.53 was down 8 percent. GAAP earnings for
the fourth quarter reflected a loss of $0.30 per share, including $0.16 of restructuring costs and $1.67 of net unfavorable other significant
items. Sales of $14.3 billion
were down 5 percent driven primarily by 4 points of unfavorable
foreign exchange, with organic sales up slightly in the
quarter.
Otis new equipment orders in the quarter increased 2 percent
over the prior year at constant currency, and grew 11 percent
excluding China. Equipment orders at UTC Climate, Controls
& Security decreased by 5 percent. Commercial aftermarket
sales were up 11 percent at Pratt & Whitney, and up 8 percent
at UTC Aerospace Systems.
"As we enter 2016, the tough actions that we've taken, and will
continue to take, put us in position to achieve our financial
objectives. We remain confident in our full year 2016
Adjusted EPS expectations of $6.30 to
$6.60 on sales of $56 billion to $58
billion, despite a difficult macro environment," Hayes
added.
UTC continues to anticipate 2016 free cash flow in the range of
90 to 100 percent of net income attributable to common
shareowners. The company also continues to expect share
repurchase of $3 billion in 2016,
beyond the repurchases that will be completed in 2016 under the
previously announced $6 billion
accelerated share repurchase program. UTC continues to assume
a $1 billion to $2 billion
placeholder for acquisitions in 2016.
United Technologies Corp., based in Farmington, 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
Use of Non-GAAP Financial Measures
Adjusted EPS,
adjusted segment margins and free cash flow are non-GAAP financial
measures that are used in UTC's financial press releases and
webcasts. A reconciliation of these non-GAAP measures to the
corresponding amounts prepared in accordance with generally
accepted accounting principles (GAAP) is included in the tables to
this press release.
Adjusted EPS and adjusted segment margin reflect continuing
operations, excluding restructuring costs and other significant
items of a non-recurring and/or non-operational nature (often
referred to in this press release as "other significant
items"). Management believes Adjusted EPS and adjusted
segment margin are both useful in providing period to period
comparisons of the results of the Company's operational
performance. The tables attached to this press release
provide additional information as to the items and amounts that
have been excluded from Adjusted EPS and adjusted segment
margin.
Free cash flow represents cash flow from operations less capital
expenditures. 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 the Company's Common
Stock and distribution of earnings to shareowners.
When we provide our expectations for Adjusted EPS and/or free
cash flow on a forward-looking basis, the closest corresponding
GAAP measures (expected EPS from continuing operations and expected
cash flow from operations) and a reconciliation of the differences
between the non-GAAP expectation and the corresponding GAAP measure
generally are not available (except as otherwise indicated) without
unreasonable effort due to potentially high variability, complexity
and low visibility as to the items that would be excluded from the
GAAP measure in the relevant future period. The variability
of the excluded items may have a significant, and potentially
unpredictable, impact on our future GAAP results.
Adjusted EPS, adjusted segment margins and free cash flow should
not be considered in isolation or as substitutes for analysis of
the Company's results as reported under GAAP. Other companies
may calculate adjusted EPS, adjusted segment margins and free cash
flow differently than the Company does, limiting the usefulness of
those measures for comparisons with such other companies.
Cautionary Statement
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,
acquisitions and divestitures, orders, foreign exchange rate
assumptions 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 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; 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 and timing of discretionary share repurchases
(those outside the company's current accelerated share repurchase
program) depend upon market conditions, the level of other
investing activities and uses of cash, and discretionary share
repurchases may be suspended at any time. 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
United
Technologies Corporation
|
Condensed
Consolidated Statement of Operations
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions, except per
share amounts)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net
Sales
|
$
|
14,300
|
|
|
$
|
14,980
|
|
|
$
|
56,098
|
|
|
$
|
57,900
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Cost of products and
services sold
|
10,653
|
|
|
10,731
|
|
|
40,431
|
|
|
40,898
|
|
|
Research and
development
|
611
|
|
|
624
|
|
|
2,279
|
|
|
2,475
|
|
|
Selling, general and
administrative
|
1,625
|
|
|
1,620
|
|
|
5,886
|
|
|
6,172
|
|
|
Total Costs and
Expenses
|
12,889
|
|
|
12,975
|
|
|
48,596
|
|
|
49,545
|
|
Other (expense)
income, net
|
(1,019)
|
|
|
275
|
|
|
(211)
|
|
|
1,238
|
|
Operating
profit
|
392
|
|
|
2,280
|
|
|
7,291
|
|
|
9,593
|
|
|
Interest expense,
net
|
206
|
|
|
266
|
|
|
824
|
|
|
881
|
|
Income from
continuing operations before income taxes
|
186
|
|
|
2,014
|
|
|
6,467
|
|
|
8,712
|
|
|
Income tax
expense
|
363
|
|
|
634
|
|
|
2,111
|
|
|
2,244
|
|
(Loss) income from
continuing operations
|
(177)
|
|
|
1,380
|
|
|
4,356
|
|
|
6,468
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings
from continuing
operations
|
79
|
|
|
102
|
|
|
360
|
|
|
402
|
|
(Loss) income from
continuing operations attributable to
common
shareowners
|
(256)
|
|
|
1,278
|
|
|
3,996
|
|
|
6,066
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
(32)
|
|
|
291
|
|
|
252
|
|
|
175
|
|
|
Gain on
disposal
|
6,108
|
|
|
—
|
|
|
6,042
|
|
|
—
|
|
|
Income tax
expense
|
(2,544)
|
|
|
(96)
|
|
|
(2,684)
|
|
|
(20)
|
|
|
Income from
discontinued operations
|
3,532
|
|
|
195
|
|
|
3,610
|
|
|
155
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings
from
discontinued operations
|
(2)
|
|
|
—
|
|
|
(2)
|
|
|
1
|
|
Income from
discontinued operations attributable to
common
shareowners
|
3,534
|
|
|
195
|
|
|
3,612
|
|
|
154
|
|
Net income
attributable to common shareowners
|
$
|
3,278
|
|
|
$
|
1,473
|
|
|
$
|
7,608
|
|
|
$
|
6,220
|
|
Earnings Per Share
of Common Stock - Basic:
|
|
|
|
|
|
|
|
|
From continuing
operations attributable to common shareowners
|
$
|
(0.30)
|
|
|
$
|
1.43
|
|
|
$
|
4.58
|
|
|
$
|
6.75
|
|
|
From discontinued
operations attributable to common shareowners
|
4.16
|
|
|
0.22
|
|
|
4.14
|
|
|
0.17
|
|
Earnings Per Share
of Common Stock - Diluted:
|
|
|
|
|
|
|
|
|
From continuing
operations attributable to common shareowners
|
$
|
(0.30)
|
|
|
$
|
1.41
|
|
|
$
|
4.53
|
|
|
$
|
6.65
|
|
|
From discontinued
operations attributable to common shareowners
|
4.16
|
|
|
0.22
|
|
|
4.09
|
|
|
0.17
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
shares
|
850
|
|
|
895
|
|
|
873
|
|
|
898
|
|
|
Diluted
shares
|
850
|
|
|
907
|
|
|
883
|
|
|
912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As described on the
following pages, consolidated results for the quarters and years
ended December 31, 2015 and 2014 include restructuring costs and significant
non-recurring and non-operational 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)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net
Sales
|
|
|
|
|
|
|
|
Otis
|
$
|
3,094
|
|
|
$
|
3,336
|
|
|
$
|
11,980
|
|
|
$
|
12,982
|
|
UTC Climate, Controls
& Security
|
4,122
|
|
|
4,192
|
|
|
16,707
|
|
|
16,823
|
|
Pratt &
Whitney
|
3,839
|
|
|
4,023
|
|
|
14,082
|
|
|
14,508
|
|
UTC Aerospace
Systems
|
3,457
|
|
|
3,594
|
|
|
14,094
|
|
|
14,215
|
|
Segment
Sales
|
14,512
|
|
|
15,145
|
|
|
56,863
|
|
|
58,528
|
|
Eliminations and
other
|
(212)
|
|
|
(165)
|
|
|
(765)
|
|
|
(628)
|
|
Consolidated Net
Sales
|
$
|
14,300
|
|
|
$
|
14,980
|
|
|
$
|
56,098
|
|
|
$
|
57,900
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
Otis
|
$
|
542
|
|
|
$
|
674
|
|
|
$
|
2,338
|
|
|
$
|
2,640
|
|
UTC Climate, Controls
& Security
|
613
|
|
|
623
|
|
|
2,936
|
|
|
2,782
|
|
Pratt &
Whitney
|
(464)
|
|
|
547
|
|
|
861
|
|
|
2,000
|
|
UTC Aerospace
Systems
|
167
|
|
|
588
|
|
|
1,888
|
|
|
2,355
|
|
Segment Operating
Profit
|
858
|
|
|
2,432
|
|
|
8,023
|
|
|
9,777
|
|
Eliminations and
other
|
(333)
|
|
|
(19)
|
|
|
(268)
|
|
|
304
|
|
General corporate
expenses
|
(133)
|
|
|
(133)
|
|
|
(464)
|
|
|
(488)
|
|
Consolidated
Operating Profit
|
$
|
392
|
|
|
$
|
2,280
|
|
|
$
|
7,291
|
|
|
$
|
9,593
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
Otis
|
17.5
|
%
|
|
20.2
|
%
|
|
19.5
|
%
|
|
20.3
|
%
|
UTC Climate, Controls
& Security
|
14.9
|
%
|
|
14.9
|
%
|
|
17.6
|
%
|
|
16.5
|
%
|
Pratt &
Whitney
|
(12.1)
|
%
|
|
13.6
|
%
|
|
6.1
|
%
|
|
13.8
|
%
|
UTC Aerospace
Systems
|
4.8
|
%
|
|
16.4
|
%
|
|
13.4
|
%
|
|
16.6
|
%
|
Segment Operating
Profit Margin
|
5.9
|
%
|
|
16.1
|
%
|
|
14.1
|
%
|
|
16.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
As described on the
following pages, consolidated results for the quarters and years
ended December 31, 2015 and 2014 include restructuring costs and significant
non-recurring and non-operational items that management believes
should be considered when
evaluating the underlying financial performance.
|
United
Technologies Corporation
|
Reconciliation of
Reported to Adjusted Results
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
In Millions - Income
(Expense)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net
Sales
|
$
|
14,300
|
|
|
$
|
14,980
|
|
|
$
|
56,098
|
|
|
$
|
57,900
|
|
Significant
non-recurring and non-operational items
included in Net
Sales:
|
|
|
|
|
|
|
|
Pratt & Whitney -
charge resulting from customer
contract
negotiations
|
(142)
|
|
|
—
|
|
|
(142)
|
|
|
—
|
|
UTC Aerospace Systems
- charge resulting from customer contract negotiations
|
(210)
|
|
|
—
|
|
|
(210)
|
|
|
—
|
|
Adjusted Net
Sales
|
$
|
14,652
|
|
|
$
|
14,980
|
|
|
$
|
56,450
|
|
|
$
|
57,900
|
|
|
|
|
|
|
|
|
|
(Loss) income from
continuing operations attributable
to common
shareowners
|
$
|
(256)
|
|
|
$
|
1,278
|
|
|
$
|
3,996
|
|
|
$
|
6,066
|
|
Restructuring
Costs included in Operating Profit:
|
|
|
|
|
|
|
|
Otis
|
(19)
|
|
|
(34)
|
|
|
(51)
|
|
|
(87)
|
|
UTC Climate, Controls
& Security
|
(41)
|
|
|
(34)
|
|
|
(108)
|
|
|
(116)
|
|
Pratt &
Whitney
|
(68)
|
|
|
(9)
|
|
|
(105)
|
|
|
(64)
|
|
UTC Aerospace
Systems
|
(47)
|
|
|
(46)
|
|
|
(111)
|
|
|
(82)
|
|
Eliminations and
other
|
(16)
|
|
|
(5)
|
|
|
(21)
|
|
|
(5)
|
|
|
(191)
|
|
|
(128)
|
|
|
(396)
|
|
|
(354)
|
|
Significant
non-recurring and non-operational items included in Operating
Profit:
|
|
|
|
|
|
|
|
UTC Climate, Controls
& Security
|
(5)
|
|
|
—
|
|
|
121
|
|
|
30
|
|
Pratt &
Whitney
|
(947)
|
|
|
—
|
|
|
(947)
|
|
|
1
|
|
UTC Aerospace
Systems
|
(356)
|
|
|
—
|
|
|
(356)
|
|
|
—
|
|
Eliminations and
other
|
(264)
|
|
|
—
|
|
|
(264)
|
|
|
220
|
|
|
(1,572)
|
|
|
—
|
|
|
(1,446)
|
|
|
251
|
|
Total impact on
Consolidated Operating Profit
|
(1,763)
|
|
|
(128)
|
|
|
(1,842)
|
|
|
(103)
|
|
Significant
non-recurring and non-operational items included in Interest
Expense, Net
|
—
|
|
|
(55)
|
|
|
—
|
|
|
(11)
|
|
Tax effect of
restructuring and significant non-recurring
and non-operational
items above
|
551
|
|
|
32
|
|
|
617
|
|
|
7
|
|
Significant
non-recurring and non-operational items included in Income Tax
Expense
|
(342)
|
|
|
(87)
|
|
|
(342)
|
|
|
284
|
|
Less: Impact on Net
Income from Continuing
Operations
Attributable to Common Shareowners
|
(1,554)
|
|
|
(238)
|
|
|
(1,567)
|
|
|
177
|
|
Adjusted income
from continuing operations attributable to common
shareowners
|
$
|
1,298
|
|
|
$
|
1,516
|
|
|
$
|
5,563
|
|
|
$
|
5,889
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share from Continuing Operations
|
$
|
(0.30)
|
|
|
$
|
1.41
|
|
|
$
|
4.53
|
|
|
$
|
6.65
|
|
Impact on Diluted
Earnings Per Share from Continuing Operations
|
(1.83)
|
|
|
(0.26)
|
|
|
(1.77)
|
|
|
0.19
|
|
Adjusted Diluted
Earnings Per Share from Continuing Operations
|
$
|
1.53
|
|
|
$
|
1.67
|
|
|
$
|
6.30
|
|
|
$
|
6.46
|
|
Details of the
significant non-recurring and non-operational items included within
operating profit for the quarters and year ended December 31,
2015 and 2014 above are as follows:
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
In Millions - Income
(Expense)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Significant
non-recurring and non-operational items
included in
Operating Profit:
|
|
|
|
|
|
|
|
UTC Climate, Controls
& Security
|
|
|
|
|
|
|
|
Gain on fair value
adjustment on acquisition of
controlling interest
in a joint venture
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
126
|
|
|
$
|
—
|
|
Net gain from ongoing
portfolio transformation
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
Acquisition and
integration costs related to current
period
acquisitions
|
(5)
|
|
|
—
|
|
|
(5)
|
|
|
—
|
|
Pratt &
Whitney
|
|
|
|
|
|
|
|
Charge related to a
research and development support
agreement with the
Canadian government
|
(867)
|
|
|
—
|
|
|
(867)
|
|
|
—
|
|
Charge resulting from
customer contract negotiations
|
(80)
|
|
|
—
|
|
|
(80)
|
|
|
—
|
|
Net gain on fair
value adjustment related to a business acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
Adjustment to fair
value of a joint venture investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(60)
|
|
Charge for impairment
of assets related to a joint
venture
investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(22)
|
|
UTC Aerospace
Systems
|
|
|
|
|
|
|
|
Charge resulting from
customer contract negotiations
|
(295)
|
|
|
—
|
|
|
(295)
|
|
|
—
|
|
Charge for impairment
of assets held for sale
|
(61)
|
|
|
—
|
|
|
(61)
|
|
|
—
|
|
Eliminations &
other
|
|
|
|
|
|
|
|
Charge for pending
and future asbestos-related claims
|
(237)
|
|
|
—
|
|
|
(237)
|
|
|
—
|
|
(Charge) gain from
agreement with a state taxing authority for monetization of tax
credits
|
(27)
|
|
|
—
|
|
|
(27)
|
|
|
220
|
|
|
$
|
(1,572)
|
|
|
$
|
—
|
|
|
$
|
(1,446)
|
|
|
$
|
251
|
|
Details of the
significant non-recurring and non-operational items included within
interest and income tax of continuing operations for the quarters
and year ended December 31, 2015 and 2014 above are as
follows:
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
In Millions - Income
(Expense)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Significant
non-recurring and non-operational items
included in
Interest Expense, Net
|
|
|
|
|
|
|
|
Unfavorable pre-tax
interest accruals related to the
ongoing dispute with
German tax authorities
|
$
|
—
|
|
|
$
|
(143)
|
|
|
$
|
—
|
|
|
$
|
(143)
|
|
Favorable pre-tax
interest adjustments, primarily related
to Goodrich
Corporation's 2000 to 2010 tax years
|
—
|
|
|
88
|
|
|
—
|
|
|
88
|
|
Favorable pre-tax
interest adjustments, primarily related
to the Company's 2006
- 2008 and 2009 - 2010 tax
years
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
$
|
—
|
|
|
$
|
(55)
|
|
|
$
|
—
|
|
|
$
|
(11)
|
|
Significant
non-recurring and non-operational items
included in Income
Tax Expense
|
|
|
|
|
|
|
|
Unfavorable income
tax accruals related to the
repatriation of
foreign earnings
|
$
|
(274)
|
|
|
$
|
—
|
|
|
$
|
(274)
|
|
|
$
|
—
|
|
Unfavorable income
tax accruals related to changes in
tax laws
|
(68)
|
|
|
—
|
|
|
(68)
|
|
|
—
|
|
Unfavorable income
tax accruals related to the ongoing
dispute with German
tax authorities
|
—
|
|
|
(267)
|
|
|
—
|
|
|
(267)
|
|
Favorable tax
adjustment primarily associated with
management's decision
to repatriate additional high
taxed
dividends
|
—
|
|
|
180
|
|
|
—
|
|
|
180
|
|
Favorable income tax
adjustments related to the
Company's 2006 - 2008
and 2009 - 2010 tax years, and
settlement of state
income taxes related to the disposition of the
Hamilton Sundstrand
Industrials
businesses
|
—
|
|
|
—
|
|
|
—
|
|
|
371
|
|
|
$
|
(342)
|
|
|
$
|
(87)
|
|
|
$
|
(342)
|
|
|
$
|
284
|
|
United
Technologies Corporation
|
Segment Net Sales
and Operating Profit Adjusted for Restructuring Costs
and
|
Significant
Non-recurring and Non-operational Items (as reflected on the
previous three pages)
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Adjusted Net
Sales
|
|
|
|
|
|
|
|
Otis
|
$
|
3,094
|
|
|
$
|
3,336
|
|
|
$
|
11,980
|
|
|
$
|
12,982
|
|
UTC Climate, Controls
& Security
|
4,122
|
|
|
4,192
|
|
|
16,707
|
|
|
16,823
|
|
Pratt &
Whitney
|
3,981
|
|
|
4,023
|
|
|
14,224
|
|
|
14,508
|
|
UTC Aerospace
Systems
|
3,667
|
|
|
3,594
|
|
|
14,304
|
|
|
14,215
|
|
Segment
Sales
|
14,864
|
|
|
15,145
|
|
|
57,215
|
|
|
58,528
|
|
Eliminations and
other
|
(212)
|
|
|
(165)
|
|
|
(765)
|
|
|
(628)
|
|
Adjusted
Consolidated Net Sales
|
$
|
14,652
|
|
|
$
|
14,980
|
|
|
$
|
56,450
|
|
|
$
|
57,900
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
|
|
|
|
|
|
Otis
|
$
|
561
|
|
|
$
|
708
|
|
|
$
|
2,389
|
|
|
$
|
2,727
|
|
UTC Climate, Controls
& Security
|
659
|
|
|
657
|
|
|
2,923
|
|
|
2,868
|
|
Pratt &
Whitney
|
551
|
|
|
556
|
|
|
1,913
|
|
|
2,063
|
|
UTC Aerospace
Systems
|
570
|
|
|
634
|
|
|
2,355
|
|
|
2,437
|
|
Segment Operating
Profit
|
2,341
|
|
|
2,555
|
|
|
9,580
|
|
|
10,095
|
|
Eliminations and
other
|
(58)
|
|
|
(18)
|
|
|
8
|
|
|
85
|
|
General corporate
expenses
|
(128)
|
|
|
(129)
|
|
|
(455)
|
|
|
(484)
|
|
Adjusted
Consolidated Operating Profit
|
$
|
2,155
|
|
|
$
|
2,408
|
|
|
$
|
9,133
|
|
|
$
|
9,696
|
|
|
|
|
|
|
|
|
|
Adjusted Segment
Operating Profit Margin
|
|
|
|
|
|
|
|
Otis
|
18.1
|
%
|
|
21.2
|
%
|
|
19.9
|
%
|
|
21.0
|
%
|
UTC Climate, Controls
& Security
|
16.0
|
%
|
|
15.7
|
%
|
|
17.5
|
%
|
|
17.0
|
%
|
Pratt &
Whitney
|
13.8
|
%
|
|
13.8
|
%
|
|
13.4
|
%
|
|
14.2
|
%
|
UTC Aerospace
Systems
|
15.5
|
%
|
|
17.6
|
%
|
|
16.5
|
%
|
|
17.1
|
%
|
Adjusted Segment
Operating Profit Margin
|
15.7
|
%
|
|
16.9
|
%
|
|
16.7
|
%
|
|
17.2
|
%
|
United
Technologies Corporation
|
Condensed
Consolidated Balance Sheet
|
|
|
|
|
|
December
31,
|
|
December 31,
|
|
2015
|
|
2014
|
(Millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
7,075
|
|
|
$
|
5,229
|
|
Accounts receivable,
net
|
10,653
|
|
|
10,448
|
|
Inventories and
contracts in progress, net
|
8,135
|
|
|
7,642
|
|
Other assets,
current
|
843
|
|
|
3,296
|
|
Assets held for
sale
|
—
|
|
|
4,868
|
|
Total Current
Assets
|
26,706
|
|
|
31,483
|
|
Fixed assets,
net
|
8,732
|
|
|
8,592
|
|
Goodwill
|
27,301
|
|
|
27,448
|
|
Intangible assets,
net
|
15,603
|
|
|
15,528
|
|
Other
assets
|
9,142
|
|
|
8,155
|
|
Total
Assets
|
$
|
87,484
|
|
|
$
|
91,206
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term
debt
|
$
|
1,105
|
|
|
$
|
1,917
|
|
Accounts
payable
|
6,875
|
|
|
6,250
|
|
Accrued
liabilities
|
14,638
|
|
|
12,527
|
|
Liabilities held for
sale
|
—
|
|
|
2,781
|
|
Total Current
Liabilities
|
22,618
|
|
|
23,475
|
|
Long-term
debt
|
19,320
|
|
|
17,784
|
|
Other long-term
liabilities
|
16,580
|
|
|
17,243
|
|
Total
Liabilities
|
58,518
|
|
|
58,502
|
|
Redeemable
noncontrolling interest
|
122
|
|
|
140
|
|
Shareowners'
Equity:
|
|
|
|
Common
Stock
|
15,928
|
|
|
15,185
|
|
Treasury
Stock
|
(30,907)
|
|
|
(21,922)
|
|
Retained
earnings
|
49,956
|
|
|
44,611
|
|
Accumulated other
comprehensive loss
|
(7,619)
|
|
|
(6,661)
|
|
Total Shareowners'
Equity
|
27,358
|
|
|
31,213
|
|
Noncontrolling
interest
|
1,486
|
|
|
1,351
|
|
Total
Equity
|
28,844
|
|
|
32,564
|
|
Total Liabilities
and Equity
|
$
|
87,484
|
|
|
$
|
91,206
|
|
|
|
|
|
|
|
|
|
Debt
Ratios:
|
|
|
|
Debt to total
capitalization
|
41
|
%
|
|
38
|
%
|
Net debt to net
capitalization
|
32
|
%
|
|
31
|
%
|
|
|
|
|
|
|
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)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating
Activities of Continuing Operations:
|
|
|
|
|
|
|
|
(Loss) income from
continuing operations
|
$
|
(177)
|
|
|
$
|
1,380
|
|
|
$
|
4,356
|
|
|
$
|
6,468
|
|
Adjustments to
reconcile (loss) income from continuing operations to
net
cash flows provided
by operating activities of continuing operations:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
462
|
|
|
468
|
|
|
1,863
|
|
|
1,820
|
|
Deferred income tax
provision
|
218
|
|
|
172
|
|
|
662
|
|
|
403
|
|
Stock compensation
cost
|
50
|
|
|
32
|
|
|
158
|
|
|
219
|
|
Canadian government
settlement
|
867
|
|
|
—
|
|
|
867
|
|
|
—
|
|
Change in working
capital
|
841
|
|
|
140
|
|
|
(847)
|
|
|
(729)
|
|
Global pension
contributions
|
(54)
|
|
|
(313)
|
|
|
(147)
|
|
|
(517)
|
|
Other operating
activities, net
|
447
|
|
|
93
|
|
|
(214)
|
|
|
(670)
|
|
Net cash
flows provided by operating activities of continuing
operations
|
2,654
|
|
|
1,972
|
|
|
6,698
|
|
|
6,994
|
|
Investing
Activities of Continuing Operations:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(608)
|
|
|
(531)
|
|
|
(1,652)
|
|
|
(1,594)
|
|
Acquisitions and
dispositions of businesses, net
|
(181)
|
|
|
76
|
|
|
(338)
|
|
|
(58)
|
|
Increase in
collaboration intangible assets
|
(106)
|
|
|
(134)
|
|
|
(437)
|
|
|
(593)
|
|
Receipts (payments)
from settlements of derivative contracts
|
13
|
|
|
(60)
|
|
|
160
|
|
|
93
|
|
Other investing
activities, net
|
(229)
|
|
|
(151)
|
|
|
(260)
|
|
|
(40)
|
|
Net cash
flows used in investing activities of continuing
operations
|
(1,111)
|
|
|
(800)
|
|
|
(2,527)
|
|
|
(2,192)
|
|
Financing
Activities of Continuing Operations:
|
|
|
|
|
|
|
|
(Repayment) issuance
of long-term debt, net
|
(24)
|
|
|
15
|
|
|
(20)
|
|
|
(206)
|
|
(Decrease) increase
in short-term borrowings, net
|
(2,096)
|
|
|
(209)
|
|
|
795
|
|
|
(346)
|
|
Proceeds from Common
Stock issuance - equity unit remarketing
|
—
|
|
|
—
|
|
|
1,100
|
|
|
—
|
|
Dividends paid on
Common Stock
|
(541)
|
|
|
(510)
|
|
|
(2,184)
|
|
|
(2,048)
|
|
Repurchase of Common
Stock
|
(6,000)
|
|
|
(405)
|
|
|
(10,000)
|
|
|
(1,500)
|
|
Other financing
activities, net
|
(254)
|
|
|
(65)
|
|
|
(467)
|
|
|
(147)
|
|
Net cash
flows used in financing activities of continuing
operations
|
(8,915)
|
|
|
(1,174)
|
|
|
(10,776)
|
|
|
(4,247)
|
|
Discontinued
Operations:
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
(73)
|
|
|
339
|
|
|
(372)
|
|
|
342
|
|
Net cash provided by
(used in) investing activities
|
9,066
|
|
|
(29)
|
|
|
9,000
|
|
|
(113)
|
|
Net cash used in
financing activities
|
(8)
|
|
|
(11)
|
|
|
(9)
|
|
|
(12)
|
|
Net cash
flows provided by discontinued operations
|
8,985
|
|
|
299
|
|
|
8,619
|
|
|
217
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(31)
|
|
|
(97)
|
|
|
(174)
|
|
|
(156)
|
|
Net
increase in cash and cash equivalents
|
1,582
|
|
|
200
|
|
|
1,840
|
|
|
616
|
|
Cash and cash
equivalents, beginning of period
|
5,493
|
|
|
5,035
|
|
|
5,235
|
|
|
4,619
|
|
Cash and cash
equivalents of continuing operations, end of period
|
7,075
|
|
|
5,235
|
|
|
7,075
|
|
|
5,235
|
|
Less: Cash and cash
equivalents of assets held for sale
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
Cash and cash
equivalents of continuing operations, end of period
|
$
|
7,075
|
|
|
$
|
5,229
|
|
|
$
|
7,075
|
|
|
$
|
5,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying Notes to Condensed Consolidated Financial
Statements.
|
United
Technologies Corporation
|
Free Cash Flow
Reconciliation
|
|
|
|
Year Ended
December 31,
|
|
(Unaudited)
|
(Millions)
|
2015
|
|
2014
|
|
|
|
|
|
|
Net income
attributable to common shareowners from continuing
operations
|
$
|
3,996
|
|
|
|
$
|
6,066
|
|
|
Net cash flows
provided by operating activities of continuing
operations
|
$
|
6,698
|
|
|
|
$
|
6,994
|
|
|
Net cash flows
provided by operating activities of continuing operations as
a
percentage of net
income attributable to common shareowners from
continuing
operations
|
|
168
|
%
|
|
|
115
|
%
|
Capital
expenditures
|
(1,652)
|
|
|
|
(1,594)
|
|
|
Capital expenditures
as a percentage of net income attributable to common shareowners
from continuing operations
|
|
(41)
|
%
|
|
|
(26)
|
%
|
Free cash flow from
continuing operations
|
$
|
5,046
|
|
|
|
$
|
5,400
|
|
|
Free cash flow from
continuing operations as a percentage of net income attributable to
common shareowners from continuing operations
|
|
126
|
%
|
|
|
89
|
%
|
Notes to Condensed
Consolidated Financial Statements
|
|
|
(1)
|
Adjusted Net Sales,
Adjusted Operating Profit and Adjusted EPS are non-GAAP financial
measures. Adjusted Net Sales represents Net Sales excluding
significant items of a non-recurring and non-operational
nature. Adjusted Operating Profit represents operating profit
excluding restructuring costs and other significant items of a
non-recurring and non-operational nature. Adjusted EPS
represents diluted earnings per share from continuing operations,
excluding restructuring costs and other significant items of a
non-recurring and non-operational nature. Management believes
Adjusted Net Sales, Adjusted Operating Profit and Adjusted EPS are
useful in providing period to period comparisons of the results of
the Company's ongoing operational performance. A reconciliation of
these non-GAAP measures to the corresponding amounts prepared in
accordance with generally accepted accounting principles is
included in the tables above.
|
(2)
|
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.
|
(3)
|
Organic sales growth
is a non-GAAP financial measure that 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 and non-operational items.
|
(4)
|
Free cash flow is a
non-GAAP financial measure that represents cash flow from
operations less capital expenditures. Management believes free cash
flow provides a useful measure of liquidity and an additional 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. A
reconciliation of net cash flow provided by operating activities,
prepared in accordance with generally accepted accounting
principles, to free cash flow is provided above.
|
(5)
|
Adjusted Net Sales,
Adjusted Operating Profit, Adjusted EPS and free cash flow should
not be considered in isolation or as substitutes for analysis of
the Company's results as reported under GAAP. Other companies
may calculate Adjusted Net Sales, Adjusted Operating Profit,
Adjusted EPS and free cash flow differently than the Company does,
limiting the usefulness of those measures for comparisons with
other companies.
|
Contact:
|
John
Moran
|
|
(860)
728-7062
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/utc-reports-full-year-2015-results-affirms-2016-outlook-300210387.html
SOURCE United Technologies Corp.