FARMINGTON, Conn., Oct. 25, 2016 /PRNewswire/ -- United
Technologies Corp. (NYSE: UTX) today reported third quarter 2016
results. All results in this release reflect continuing operations
unless otherwise noted.
Third quarter GAAP EPS of $1.74
was up 8 percent versus the prior year and included 2 cents of net restructuring and other
significant items. Adjusted EPS of $1.76 was up 5 percent versus the prior year. Net
income in the quarter was $1.4
billion, up 1 percent versus the prior year. Sales of
$14.4 billion were up 4 percent,
driven by 5 points of organic growth partially offset by 1 point of
adverse foreign exchange.
"United Technologies delivered another quarter of strong
financial performance," said UTC Chairman & Chief Executive
Officer Gregory Hayes. "Organic
growth across the aerospace units and solid cash generation across
all businesses, even with continuing investments in the aerospace
related ramp-up, give us high confidence in meeting our commitments
to shareholders. Based on our year-to-date performance, we now
expect slightly higher organic sales growth and we are raising the
low end of our adjusted EPS outlook by ten
cents and now expect 2016 EPS of $6.55 to $6.60 per share*.
"We continue to focus on innovation and execution in each of our
businesses and this focus is starting to pay off. Otis new
equipment orders in the quarter increased 2 percent over the prior
year at constant currency and grew 8 percent excluding China. Our Geared Turbofan Engine continues to
perform exceptionally well and is now in service with eight
operators around the world. Dispatch reliability on the GTF
powered A320neo is 99.9% and fuel burn is meeting – and in some
cases exceeding – our targets. Customer demand for the Geared
Turbofan Engine also remains strong and our order book has grown to
8,400 engines, including announced and unannounced firm and option
engines."
*Note: When we provide
expectations for adjusted EPS and organic sales on a
forward-looking basis, a reconciliation of the differences between
the non-GAAP expectations and the corresponding GAAP measures
generally is not available without unreasonable effort. See
"Use and Definitions of Non-GAAP Financial Measures" below for
additional information.
Cash flow from operations for the quarter was $2.0 billion (135 percent of net income
attributable to common shareowners) and capital expenditures were
$394 million. Free cash flow of
$1.6 billion in the quarter was 108
percent of net income attributable to common shareowners.
Commercial aftermarket sales were up 11 percent at Pratt &
Whitney, and up 2 percent at UTC Aerospace Systems. While equipment
orders at UTC Climate, Controls & Security were flat on an
organic basis, commercial and residential HVAC orders in the
Americas were up 10 and 11 percent, respectively.
Hayes added, "In the quarter, we completed our $6 billion accelerated share repurchase and we
are on track to return $22 billion in
cash to shareholders from 2015 through 2017. With our focused
portfolio of industry leading franchises, we remain confident in
our ability to create significant long-term value for our
shareholders."
UTC updates its 2016 outlook and now anticipates:
- Adjusted EPS of $6.55 to $6.60 up
from $6.45 to $6.60*;
- Total sales unchanged ($57 to $58
billion, year over year growth of 2 to 3 percent) including
organic sales growth of 2 to 3 percent up from 1 to 3 percent;
- There is no change in the company's previously provided 2016
expectations for free cash flow, share repurchases, and the
placeholder for acquisitions.
*Note: When we provide
expectations for adjusted EPS and organic sales on a
forward-looking basis, a reconciliation of the differences between
the non-GAAP expectations and the corresponding GAAP measures
generally is not available without unreasonable effort. See
"Use and Definitions of Non-GAAP Financial Measures" below for
additional information.
United Technologies Corp., based in Farmington, Connecticut, provides high
technology products and services to the building and aerospace
industries. By combining a passion for science with precision
engineering, the company is creating smart, sustainable solutions
the world needs. Additional information, including a webcast, is
available at www.utc.com or
http://edge.media-server.com/m/p/ac4y9uz5, or to listen to the
earnings call by phone, dial (877) 280-7280 between 8:10 a.m. and 8:30 a.m. ET. To learn more
about UTC, visit the website or follow the company on Twitter:
@UTC
Use and Definitions of Non-GAAP Financial Measures
We supplement the reporting of our financial information
determined under accounting principles generally accepted in
the United States ("GAAP") with
certain non-GAAP financial information. The non-GAAP
information presented provides investors with additional useful
information, but should not be considered in isolation or as
substitutes for the related GAAP measures. Moreover, other
companies may define non-GAAP measures differently, which limits
the usefulness of these measures for comparisons with such other
companies. We encourage investors to review our financial
statements and publicly-filed reports in their entirety and not to
rely on any single financial measure.
Adjusted net sales, organic sales, adjusted operating profit and
adjusted diluted EPS are non-GAAP financial measures.
Adjusted net sales represents consolidated net sales from
continuing operations (a GAAP measure), excluding significant items
of a non-recurring and nonoperational nature (hereinafter referred
to as "other significant items"). Organic sales represents
consolidated net sales (a GAAP measure), excluding the impact of
foreign currency translation, acquisitions and divestitures
completed in the preceding twelve months and other significant
items. Adjusted operating profit represents income from
continuing operations (a GAAP measure), excluding restructuring
costs and other significant items. Adjusted diluted EPS represents
diluted earnings per share from continuing operations (a GAAP
measure), excluding restructuring costs and other significant
items. For the business segments, when applicable,
adjustments of net sales, operating profit and margins similarly
reflect continuing operations, excluding restructuring and other
significant items. Management believes that the non-GAAP
measures just mentioned are useful in providing period-to-period
comparisons of the results of the Company's ongoing operational
performance.
Free cash flow is a non-GAAP financial measure that represents
cash flow from operations (a GAAP measure) less capital
expenditures. Management believes free cash flow is 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 the non-GAAP measures to the corresponding
amounts prepared in accordance with GAAP appears in the tables in
this press release. The tables provide additional information
as to the items and amounts that have been excluded from the
adjusted measures.
When we provide our expectations for adjusted EPS and free cash
flow on a forward-looking basis, a reconciliation of the
differences between the non-GAAP expectations and the corresponding
GAAP measures (expected diluted EPS from continuing operations,
expected cash flow from operations and sales) generally is not
available 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, such as unusual gains and losses, the ultimate outcome of
pending litigation, fluctuations in foreign currency exchange
rates, the impact and timing of potential acquisitions and
divestitures, and other structural changes or their probable
significance. The variability of the excluded
items may have a significant, and potentially unpredictable, impact
on our future GAAP results.
Cautionary Statement
This press release contains
statements which, to the extent they are not statements of
historical or present fact, constitute "forward-looking statements"
under the securities laws. From time to time, oral or written
forward-looking statements may also be included in other
information released to the public. These forward-looking
statements are intended to provide management's current
expectations or plans for our future operating and financial
performance, based on assumptions currently believed to be valid.
Forward-looking statements can be identified by the use of words
such as "believe," "expect," "expectations," "plans," "strategy,"
"prospects," "estimate," "project," "target," "anticipate," "will,"
"should," "see," "guidance," "confident" and other words of similar
meaning in connection with a discussion of future operating or
financial performance. Forward-looking statements may include,
among other things, statements relating to future sales, earnings,
cash flow, results of operations, uses of cash, share repurchases
and other measures of financial performance or potential future
plans, strategies or transactions. All forward-looking statements
involve risks, uncertainties and other factors that may cause
actual results to differ materially from those expressed or implied
in the forward-looking statements. For those statements, we claim
the protection of the safe harbor for forward-looking statements
contained in the U.S. Private Securities Litigation Reform Act of
1995. Such risks, uncertainties and other factors include, without
limitation: (1) the effect of economic conditions in the industries
and markets in which we operate in the U.S. and globally and any
changes therein, including financial market conditions,
fluctuations in commodity prices, interest rates and foreign
currency exchange rates, levels of end market demand in
construction and in both the commercial and defense segments of the
aerospace industry, levels of air travel, financial condition of
commercial airlines, the impact of weather conditions and natural
disasters and the financial condition of our customers and
suppliers; (2) challenges in the development, production, delivery,
support, performance and realization of the anticipated benefits of
advanced technologies and new products and services; (3) future
levels of indebtedness and capital spending and research and
development spending; (4) future availability of credit and factors
that may affect such availability, including credit market
conditions and our capital structure; (5) delays and disruption in
delivery of materials and services from suppliers; (6) customer-
and Company- directed cost reduction efforts and restructuring
costs and savings and other consequences thereof; (7) the scope,
nature, impact or timing of acquisition and divestiture activity,
including among other things integration of acquired businesses
into our existing businesses and realization of synergies and
opportunities for growth and innovation; (8) new business
opportunities; (9) our ability to realize the intended benefits of
organizational changes; (10) the anticipated benefits of
diversification and balance of operations across product lines,
regions and industries; (11) the timing and scope of future
repurchases of our common stock, which may be suspended at any time
due to market conditions and the level of other investing
activities and uses of cash; (12) the outcome of legal proceedings,
investigations and other contingencies; (13) pension plan
assumptions and future contributions; (14) the impact of the
negotiation of collective bargaining agreements and labor disputes;
(15) the effect of changes in political conditions in the U.S. and
other countries in which we operate, including, but not limited to
the effect of the U.K's pending withdrawal from the EU, on general
market conditions and currency exchange rates in the near term and
beyond; (16) and the effect of changes in tax, environmental,
regulatory (including among other things import/export) and other
laws and regulations in the U.S. and other countries in which we
operate. 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. Any
forward-looking statement speaks only as of the date on which it is
made, and we assume no obligation to update or revise such
statement, whether as a result of new information, future events or
otherwise, except as required by applicable law.
UTC-IR
Contact:
|
Alberto
Canal
|
|
(860)
728-6392
|
|
alberto.canal@utc.com
|
|
Joshua
Silverman
|
|
(860)
493-4284
|
|
joshua.silverman@utc.com
|
United
Technologies Corporation
Condensed
Consolidated Statement of Operations
|
|
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions, except per
share amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
Sales
|
$
|
14,354
|
|
|
$
|
13,788
|
|
|
$
|
42,585
|
|
|
$
|
41,798
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Cost of products and
services sold
|
10,342
|
|
|
9,800
|
|
|
30,737
|
|
|
29,778
|
|
|
Research and
development
|
582
|
|
|
546
|
|
|
1,711
|
|
|
1,668
|
|
|
Selling, general and
administrative
|
1,390
|
|
|
1,359
|
|
|
4,204
|
|
|
4,261
|
|
|
Total Costs and
Expenses
|
12,314
|
|
|
11,705
|
|
|
36,652
|
|
|
35,707
|
|
Other income,
net
|
211
|
|
|
219
|
|
|
600
|
|
|
808
|
|
Operating
profit
|
2,251
|
|
|
2,302
|
|
|
6,533
|
|
|
6,899
|
|
|
Interest expense,
net
|
225
|
|
|
184
|
|
|
673
|
|
|
618
|
|
Income from
continuing operations before income taxes
|
2,026
|
|
|
2,118
|
|
|
5,860
|
|
|
6,281
|
|
|
Income tax
expense
|
492
|
|
|
592
|
|
|
1,548
|
|
|
1,748
|
|
Income from
continuing operations
|
1,534
|
|
|
1,526
|
|
|
4,312
|
|
|
4,533
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings
from continuing operations
|
91
|
|
|
99
|
|
|
271
|
|
|
281
|
|
Income from
continuing operations attributable to common
shareowners
|
1,443
|
|
|
1,427
|
|
|
4,041
|
|
|
4,252
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Income from
operations
|
1
|
|
|
27
|
|
|
2
|
|
|
284
|
|
|
(Loss) gain on
disposal
|
(4)
|
|
|
(38)
|
|
|
11
|
|
|
(66)
|
|
|
Income tax benefit
(expense)
|
40
|
|
|
(54)
|
|
|
(12)
|
|
|
(140)
|
|
Income (loss) from
discontinued operations attributable to
common shareowners
|
37
|
|
|
(65)
|
|
|
1
|
|
|
78
|
|
Net income
attributable to common shareowners
|
$
|
1,480
|
|
|
$
|
1,362
|
|
|
$
|
4,042
|
|
|
$
|
4,330
|
|
Earnings (Loss)
Per Share of Common Stock - Basic:
|
|
|
|
|
|
|
|
|
From continuing
operations attributable to common
shareowners
|
$
|
1.76
|
|
|
$
|
1.63
|
|
|
$
|
4.90
|
|
|
$
|
4.82
|
|
|
From discontinued
operations attributable to common
shareowners
|
0.04
|
|
|
(0.07)
|
|
|
—
|
|
|
0.09
|
|
Earnings (Loss)
Per Share of Common Stock - Diluted:
|
|
|
|
|
|
|
|
|
From continuing
operations attributable to common
shareowners
|
$
|
1.74
|
|
|
$
|
1.61
|
|
|
$
|
4.86
|
|
|
$
|
4.76
|
|
|
From discontinued
operations attributable to common
shareowners
|
0.04
|
|
|
(0.07)
|
|
|
—
|
|
|
0.09
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
shares
|
822
|
|
|
876
|
|
|
824
|
|
|
882
|
|
|
Diluted
shares
|
831
|
|
|
885
|
|
|
832
|
|
|
894
|
|
|
As described on the
following pages, consolidated results for the quarter and nine
months ended September 30, 2016 and 2015 include restructuring
costs and significant non-recurring and non-operational items. See
discussion above, "Use and Definitions of Non-GAAP Financial
Measures," regarding consideration of such costs and items 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
Sales
|
|
|
|
|
|
|
|
Otis
|
$
|
3,018
|
|
|
$
|
3,043
|
|
|
$
|
8,830
|
|
|
$
|
8,886
|
|
UTC Climate, Controls
& Security
|
4,415
|
|
|
4,279
|
|
|
12,602
|
|
|
12,585
|
|
Pratt &
Whitney
|
3,501
|
|
|
3,234
|
|
|
10,902
|
|
|
10,243
|
|
UTC Aerospace
Systems
|
3,646
|
|
|
3,457
|
|
|
10,867
|
|
|
10,637
|
|
Segment
Sales
|
14,580
|
|
|
14,013
|
|
|
43,201
|
|
|
42,351
|
|
Eliminations and
other
|
(226)
|
|
|
(225)
|
|
|
(616)
|
|
|
(553)
|
|
Consolidated Net
Sales
|
$
|
14,354
|
|
|
$
|
13,788
|
|
|
$
|
42,585
|
|
|
$
|
41,798
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
Otis
|
$
|
584
|
|
|
$
|
642
|
|
|
$
|
1,631
|
|
|
$
|
1,796
|
|
UTC Climate, Controls
& Security
|
801
|
|
|
771
|
|
|
2,279
|
|
|
2,323
|
|
Pratt &
Whitney
|
340
|
|
|
419
|
|
|
1,136
|
|
|
1,325
|
|
UTC Aerospace
Systems
|
600
|
|
|
572
|
|
|
1,720
|
|
|
1,721
|
|
Segment Operating
Profit
|
2,325
|
|
|
2,404
|
|
|
6,766
|
|
|
7,165
|
|
Eliminations and
other
|
18
|
|
|
(1)
|
|
|
47
|
|
|
65
|
|
General corporate
expenses
|
(92)
|
|
|
(101)
|
|
|
(280)
|
|
|
(331)
|
|
Consolidated
Operating Profit
|
$
|
2,251
|
|
|
$
|
2,302
|
|
|
$
|
6,533
|
|
|
$
|
6,899
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
Otis
|
19.4
|
%
|
|
21.1
|
%
|
|
18.5
|
%
|
|
20.2
|
%
|
UTC Climate, Controls
& Security
|
18.1
|
%
|
|
18.0
|
%
|
|
18.1
|
%
|
|
18.5
|
%
|
Pratt &
Whitney
|
9.7
|
%
|
|
13.0
|
%
|
|
10.4
|
%
|
|
12.9
|
%
|
UTC Aerospace
Systems
|
16.5
|
%
|
|
16.5
|
%
|
|
15.8
|
%
|
|
16.2
|
%
|
Segment Operating
Profit Margin
|
15.9
|
%
|
|
17.2
|
%
|
|
15.7
|
%
|
|
16.9
|
%
|
|
As described on the
following pages, consolidated results for the quarter and nine
months ended September 30, 2016 and 2015 include restructuring
costs and significant non-recurring and non-operational items. See
discussion above, "Use and Definitions of Non-GAAP Financial
Measures," regarding consideration of such costs and items when
evaluating the underlying financial performance.
|
United
Technologies Corporation
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Results
|
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
In Millions - Income
(Expense)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
Sales
|
$
|
14,354
|
|
|
$
|
13,788
|
|
|
$
|
42,585
|
|
|
$
|
41,798
|
|
Significant
non-recurring and non-operational items
included in Net Sales:
|
|
|
|
|
|
|
|
Pratt & Whitney -
charge resulting from ongoing
customer contract negotiations
|
(184)
|
|
|
—
|
|
|
(184)
|
|
|
—
|
|
Adjusted Net
Sales
|
$
|
14,538
|
|
|
$
|
13,788
|
|
|
$
|
42,769
|
|
|
$
|
41,798
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to
common shareowners
|
$
|
1,443
|
|
|
$
|
1,427
|
|
|
$
|
4,041
|
|
|
$
|
4,252
|
|
Restructuring
Costs included in Operating Profit:
|
|
|
|
|
|
|
|
Otis
|
(10)
|
|
|
(18)
|
|
|
(41)
|
|
|
(32)
|
|
UTC Climate, Controls
& Security
|
(18)
|
|
|
(15)
|
|
|
(71)
|
|
|
(67)
|
|
Pratt &
Whitney
|
21
|
|
|
(22)
|
|
|
(50)
|
|
|
(37)
|
|
UTC Aerospace
Systems
|
(11)
|
|
|
(14)
|
|
|
(32)
|
|
|
(64)
|
|
Eliminations and
other
|
(5)
|
|
|
(4)
|
|
|
(7)
|
|
|
(5)
|
|
|
(23)
|
|
|
(73)
|
|
|
(201)
|
|
|
(205)
|
|
Significant
non-recurring and non-operational items
included in Operating Profit:
|
|
|
|
|
|
|
|
UTC Climate, Controls
& Security
|
(11)
|
|
|
—
|
|
|
(23)
|
|
|
126
|
|
Pratt &
Whitney
|
(95)
|
|
|
—
|
|
|
(95)
|
|
|
—
|
|
|
(106)
|
|
|
—
|
|
|
(118)
|
|
|
126
|
|
Total impact on
Consolidated Operating Profit
|
(129)
|
|
|
(73)
|
|
|
(319)
|
|
|
(79)
|
|
Significant
non-recurring and non-operational items
included in Interest Expense, Net
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
Tax effect of
restructuring and significant non-
recurring and non-operational items above
|
52
|
|
|
21
|
|
|
112
|
|
|
66
|
|
Significant
non-recurring and non-operational items
included in Income Tax Expense
|
56
|
|
|
—
|
|
|
56
|
|
|
—
|
|
Less: Impact on Net
Income from Continuing Operations
Attributable to Common Shareowners
|
(19)
|
|
|
(52)
|
|
|
(149)
|
|
|
(13)
|
|
Adjusted income
from continuing operations
attributable to common shareowners
|
$
|
1,462
|
|
|
$
|
1,479
|
|
|
$
|
4,190
|
|
|
$
|
4,265
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share from Continuing
Operations
|
$
|
1.74
|
|
|
$
|
1.61
|
|
|
$
|
4.86
|
|
|
$
|
4.76
|
|
Impact on Diluted
Earnings Per Share from Continuing
Operations
|
(0.02)
|
|
|
(0.06)
|
|
|
(0.18)
|
|
|
(0.01)
|
|
Adjusted Diluted
Earnings Per Share from Continuing
Operations
|
$
|
1.76
|
|
|
$
|
1.67
|
|
|
$
|
5.04
|
|
|
$
|
4.77
|
|
|
Details of the
significant non-recurring and non-operational items included within
operating profit, interest and income tax of continuing operations
for the quarter and nine months ended September 30, 2016 and 2015
above are as follows:
|
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
In Millions - Income
(Expense)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Significant
non-recurring and non-operational items
included in Operating Profit:
|
|
|
|
|
|
|
|
UTC Climate, Controls
& Security
|
|
|
|
|
|
|
|
Acquisition and
integration costs related to current
period acquisitions
|
$
|
(11)
|
|
|
$
|
—
|
|
|
$
|
(23)
|
|
|
$
|
—
|
|
Gain on fair value
adjustment on acquisition of
controlling interest in a joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
Pratt &
Whitney
|
|
|
|
|
|
|
|
Charge resulting from
ongoing customer contract
negotiations
|
(95)
|
|
|
—
|
|
|
(95)
|
|
|
—
|
|
|
$
|
(106)
|
|
|
$
|
—
|
|
|
$
|
(118)
|
|
|
$
|
126
|
|
Significant
non-recurring and non-operational items
included in Interest Expense, Net
|
|
|
|
|
|
|
|
Favorable pre-tax
interest adjustments, primarily related
to Goodrich Corporation's 2011 - 2012 tax years
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Significant
non-recurring and non-operational items
included in Income Tax Expense
|
|
|
|
|
|
|
|
Favorable income tax
adjustments, primarily related to
Goodrich Corporation's 2011 - 2012 tax years
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
—
|
|
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 two pages)
|
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Adjusted Net
Sales
|
|
|
|
|
|
|
|
Otis
|
$
|
3,018
|
|
|
$
|
3,043
|
|
|
$
|
8,830
|
|
|
$
|
8,886
|
|
UTC Climate, Controls
& Security
|
4,415
|
|
|
4,279
|
|
|
12,602
|
|
|
12,585
|
|
Pratt &
Whitney
|
3,685
|
|
|
3,234
|
|
|
11,086
|
|
|
10,243
|
|
UTC Aerospace
Systems
|
3,646
|
|
|
3,457
|
|
|
10,867
|
|
|
10,637
|
|
Segment
Sales
|
14,764
|
|
|
14,013
|
|
|
43,385
|
|
|
42,351
|
|
Eliminations and
other
|
(226)
|
|
|
(225)
|
|
|
(616)
|
|
|
(553)
|
|
Adjusted
Consolidated Net Sales
|
$
|
14,538
|
|
|
$
|
13,788
|
|
|
$
|
42,769
|
|
|
$
|
41,798
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
|
|
|
|
|
|
Otis
|
$
|
594
|
|
|
$
|
660
|
|
|
$
|
1,672
|
|
|
$
|
1,828
|
|
UTC Climate, Controls
& Security
|
830
|
|
|
786
|
|
|
2,373
|
|
|
2,264
|
|
Pratt &
Whitney
|
414
|
|
|
441
|
|
|
1,281
|
|
|
1,362
|
|
UTC Aerospace
Systems
|
611
|
|
|
586
|
|
|
1,752
|
|
|
1,785
|
|
Segment Operating
Profit
|
2,449
|
|
|
2,473
|
|
|
7,078
|
|
|
7,239
|
|
Eliminations and
other
|
22
|
|
|
(1)
|
|
|
53
|
|
|
66
|
|
General corporate
expenses
|
(91)
|
|
|
(97)
|
|
|
(279)
|
|
|
(327)
|
|
Adjusted
Consolidated Operating Profit
|
$
|
2,380
|
|
|
$
|
2,375
|
|
|
$
|
6,852
|
|
|
$
|
6,978
|
|
|
|
|
|
|
|
|
|
Adjusted Segment
Operating Profit Margin
|
|
|
|
|
|
|
|
Otis
|
19.7
|
%
|
|
21.7
|
%
|
|
18.9
|
%
|
|
20.6
|
%
|
UTC Climate, Controls
& Security
|
18.8
|
%
|
|
18.4
|
%
|
|
18.8
|
%
|
|
18.0
|
%
|
Pratt &
Whitney
|
11.2
|
%
|
|
13.6
|
%
|
|
11.6
|
%
|
|
13.3
|
%
|
UTC Aerospace
Systems
|
16.8
|
%
|
|
17.0
|
%
|
|
16.1
|
%
|
|
16.8
|
%
|
Adjusted Segment
Operating Profit Margin
|
16.6
|
%
|
|
17.6
|
%
|
|
16.3
|
%
|
|
17.1
|
%
|
United
Technologies Corporation
Components of
Changes in Net Sales
|
|
Quarter Ended
September 30, 2016 Compared with Quarter Ended September 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
Factors
Contributing to Total % Change in Net Sales
|
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
Otis
|
|
—
|
|
(1)%
|
|
—
|
|
—
|
|
(1)%
|
UTC Climate, Controls
& Security
|
|
—
|
|
(1)%
|
|
4%
|
|
—
|
|
3%
|
Pratt &
Whitney
|
|
13%
|
|
1%
|
|
—
|
|
(6)%
|
|
8%
|
UTC Aerospace
Systems
|
|
6%
|
|
(1)%
|
|
—
|
|
—
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
5%
|
|
(1)%
|
|
1%
|
|
(1)%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended September 30, 2016 Compared with Nine Months Ended September
30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Factors
Contributing to Total % Change in Net Sales
|
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
Otis
|
|
2%
|
|
(3)%
|
|
—
|
|
—
|
|
(1)%
|
UTC Climate, Controls
& Security
|
|
(1)%
|
|
(1)%
|
|
2%
|
|
—
|
|
—
|
Pratt &
Whitney
|
|
8%
|
|
—
|
|
—
|
|
(2)%
|
|
6%
|
UTC Aerospace
Systems
|
|
3%
|
|
(1)%
|
|
—
|
|
—
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
3%
|
|
(2)%
|
|
1%
|
|
—
|
|
2%
|
United
Technologies Corporation
Condensed
Consolidated Balance Sheet
|
|
|
September
30,
|
|
December 31,
|
|
2016
|
|
2015
|
(Millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
7,107
|
|
|
$
|
7,075
|
|
Accounts receivable,
net
|
11,500
|
|
|
10,653
|
|
Inventories and
contracts in progress, net
|
9,081
|
|
|
8,135
|
|
Other assets,
current
|
860
|
|
|
843
|
|
Total Current
Assets
|
28,548
|
|
|
26,706
|
|
Fixed assets,
net
|
8,989
|
|
|
8,732
|
|
Goodwill
|
27,422
|
|
|
27,301
|
|
Intangible assets,
net
|
15,800
|
|
|
15,603
|
|
Other
assets
|
9,303
|
|
|
9,142
|
|
Total
Assets
|
$
|
90,062
|
|
|
$
|
87,484
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term
debt
|
$
|
2,475
|
|
|
$
|
1,105
|
|
Accounts
payable
|
7,432
|
|
|
6,875
|
|
Accrued
liabilities
|
12,634
|
|
|
14,638
|
|
Total Current
Liabilities
|
22,541
|
|
|
22,618
|
|
Long-term
debt
|
20,190
|
|
|
19,320
|
|
Other long-term
liabilities
|
16,252
|
|
|
16,580
|
|
Total
Liabilities
|
58,983
|
|
|
58,518
|
|
Redeemable
noncontrolling interest
|
315
|
|
|
122
|
|
Shareowners'
Equity:
|
|
|
|
Common
Stock
|
17,116
|
|
|
15,928
|
|
Treasury
Stock
|
(32,584)
|
|
|
(30,907)
|
|
Retained
earnings
|
52,384
|
|
|
49,956
|
|
Accumulated other
comprehensive loss
|
(7,729)
|
|
|
(7,619)
|
|
Total Shareowners'
Equity
|
29,187
|
|
|
27,358
|
|
Noncontrolling
interest
|
1,577
|
|
|
1,486
|
|
Total
Equity
|
30,764
|
|
|
28,844
|
|
Total Liabilities
and Equity
|
$
|
90,062
|
|
|
$
|
87,484
|
|
|
|
|
|
Debt
Ratios:
|
|
|
|
Debt to total
capitalization
|
42
|
%
|
|
41
|
%
|
Net debt to net
capitalization
|
34
|
%
|
|
32
|
%
|
|
See accompanying
Notes to Condensed Consolidated Financial Statements.
|
United
Technologies Corporation
Condensed Consolidated Statement of Cash Flows
|
|
|
Quarter Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating
Activities of Continuing Operations:
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
$
|
1,534
|
|
|
$
|
1,526
|
|
|
$
|
4,312
|
|
|
$
|
4,533
|
|
Adjustments to
reconcile net income from continuing operations to net
cash flows provided by operating activities of continuing
operations:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
496
|
|
|
486
|
|
|
1,456
|
|
|
1,401
|
|
Deferred income tax
provision
|
53
|
|
|
109
|
|
|
273
|
|
|
444
|
|
Stock compensation
cost
|
16
|
|
|
16
|
|
|
112
|
|
|
108
|
|
Change in working
capital
|
(116)
|
|
|
(966)
|
|
|
(753)
|
|
|
(1,688)
|
|
Global pension
contributions
|
(18)
|
|
|
(23)
|
|
|
(125)
|
|
|
(93)
|
|
Canadian government
settlement
|
—
|
|
|
—
|
|
|
(237)
|
|
|
—
|
|
Other operating
activities, net
|
(14)
|
|
|
(127)
|
|
|
(502)
|
|
|
(661)
|
|
Net cash
flows provided by operating activities of continuing
operations
|
1,951
|
|
|
1,021
|
|
|
4,536
|
|
|
4,044
|
|
Investing
Activities of Continuing Operations:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(394)
|
|
|
(390)
|
|
|
(1,043)
|
|
|
(1,044)
|
|
Acquisitions and
dispositions of businesses, net
|
101
|
|
|
(67)
|
|
|
(387)
|
|
|
(157)
|
|
Increase in
collaboration intangible assets
|
(102)
|
|
|
(84)
|
|
|
(301)
|
|
|
(331)
|
|
(Payments) receipts
from settlements of derivative contracts
|
(115)
|
|
|
(268)
|
|
|
(29)
|
|
|
147
|
|
Other investing
activities, net
|
3
|
|
|
(111)
|
|
|
(89)
|
|
|
(31)
|
|
Net cash
flows used in investing activities of continuing
operations
|
(507)
|
|
|
(920)
|
|
|
(1,849)
|
|
|
(1,416)
|
|
Financing
Activities of Continuing Operations:
|
|
|
|
|
|
|
|
(Repayment) issuance
of long-term debt, net
|
(41)
|
|
|
2
|
|
|
2,281
|
|
|
4
|
|
Increase (decrease)
in short-term borrowings, net
|
115
|
|
|
247
|
|
|
(63)
|
|
|
2,891
|
|
Proceeds from Common
Stock issuance - equity unit remarketing
|
—
|
|
|
1,100
|
|
|
—
|
|
|
1,100
|
|
Dividends paid on
Common Stock
|
(526)
|
|
|
(547)
|
|
|
(1,561)
|
|
|
(1,643)
|
|
Repurchase of Common
Stock
|
(492)
|
|
|
(1,000)
|
|
|
(528)
|
|
|
(4,000)
|
|
Other financing
activities, net
|
(173)
|
|
|
(122)
|
|
|
(332)
|
|
|
(213)
|
|
Net cash
flows used in financing activities of continuing
operations
|
(1,117)
|
|
|
(320)
|
|
|
(203)
|
|
|
(1,861)
|
|
Discontinued
Operations:
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
(23)
|
|
|
(123)
|
|
|
(2,486)
|
|
|
(299)
|
|
Net cash (used in)
provided by investing activities
|
—
|
|
|
(7)
|
|
|
6
|
|
|
(66)
|
|
Net cash provided by
(used in) financing activities
|
—
|
|
|
4
|
|
|
—
|
|
|
(1)
|
|
Net cash
flows used in discontinued operations
|
(23)
|
|
|
(126)
|
|
|
(2,480)
|
|
|
(366)
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
18
|
|
|
(95)
|
|
|
28
|
|
|
(143)
|
|
Net
increase (decrease) in cash and cash equivalents
|
322
|
|
|
(440)
|
|
|
32
|
|
|
258
|
|
Cash and cash
equivalents, beginning of period
|
6,785
|
|
|
5,933
|
|
|
7,075
|
|
|
5,235
|
|
Cash and cash
equivalents of continuing operations, end of period
|
7,107
|
|
|
5,493
|
|
|
7,107
|
|
|
5,493
|
|
Less: Cash and cash
equivalents of assets held for sale
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
Cash and cash
equivalents of continuing operations, end of period
|
$
|
7,107
|
|
|
$
|
5,477
|
|
|
$
|
7,107
|
|
|
$
|
5,477
|
|
|
See accompanying
Notes to Condensed Consolidated Financial Statements.
|
United
Technologies Corporation
Free Cash Flow
Reconciliation
|
|
|
Quarter Ended
September 30,
|
|
(Unaudited)
|
(Millions)
|
2016
|
|
2015
|
|
|
|
|
|
|
Net income
attributable to common shareowners from continuing
operations
|
$
|
1,443
|
|
|
|
$
|
1,427
|
|
|
Net cash flows
provided by operating activities of continuing
operations
|
$
|
1,951
|
|
|
|
$
|
1,021
|
|
|
Net cash flows
provided by operating activities of continuing operations as a
percentage of net income attributable to common shareowners from
continuing
operations
|
|
135
|
%
|
|
|
72
|
%
|
Capital
expenditures
|
(394)
|
|
|
|
(390)
|
|
|
Capital expenditures
as a percentage of net income attributable to common
shareowners from continuing operations
|
|
(27)
|
%
|
|
|
(27)
|
%
|
Free cash flow from
continuing operations
|
$
|
1,557
|
|
|
|
$
|
631
|
|
|
Free cash flow from
continuing operations as a percentage of net income
attributable to common shareowners from continuing
operations
|
|
108
|
%
|
|
|
44
|
%
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
(Millions)
|
2016
|
|
2015
|
|
|
|
|
|
|
Net income
attributable to common shareowners from continuing
operations
|
$
|
4,041
|
|
|
|
$
|
4,252
|
|
|
Net cash flows
provided by operating activities of continuing
operations
|
$
|
4,536
|
|
|
|
$
|
4,044
|
|
|
Net cash flows
provided by operating activities of continuing operations as a
percentage of net income attributable to common shareowners from
continuing
operations
|
|
112
|
%
|
|
|
95
|
%
|
Capital
expenditures
|
(1,043)
|
|
|
|
(1,044)
|
|
|
Capital expenditures
as a percentage of net income attributable to common
shareowners from continuing operations
|
|
(26)
|
%
|
|
|
(25)
|
%
|
Free cash flow from
continuing operations
|
$
|
3,493
|
|
|
|
$
|
3,000
|
|
|
Free cash flow from
continuing operations as a percentage of net income
attributable to common shareowners from continuing
operations
|
|
86
|
%
|
|
|
71
|
%
|
|
Notes to Condensed
Consolidated Financial Statements
|
|
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.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/utc-reports-third-quarter-2016-results-300350186.html
SOURCE United Technologies Corp.