FARMINGTON, Conn., July 25, 2017 /PRNewswire/ -- United
Technologies Corp. (NYSE: UTX) today reported second quarter 2017
results. All results in this release reflect continuing
operations unless otherwise noted.
"United Technologies delivered another quarter of strong results
with sales up 3 percent including 3 percent organic sales growth
and robust cash flow," said UTC Chairman and Chief Executive
Officer Gregory Hayes. "Our
performance is in-line with our expectations as we continue to
execute on our strategic priorities, including growing the business
through our investments in innovative products and services,
delivering on our aerospace backlog, and achieving our cost
reduction goals, while maintaining a disciplined approach to
capital allocation."
"Based on our solid year-to-date performance and outlook for the
remainder of 2017, we are raising the low end of our full-year
adjusted EPS outlook range by 15
cents. We now expect adjusted EPS of $6.45 to $6.60.* Additionally, we are raising our
sales outlook to a range of $58.5 to $59.5
billion. This reflects organic growth expectations of
3 to 4 percent versus our prior expectation of 2 to 4 percent.* We
remain confident that our portfolio of global industry leading
franchises is well positioned and will continue to create long-term
sustainable shareowner value."
Second quarter GAAP EPS of $1.80
was up 9 cents (5 percent) versus the
prior year and included 5 cents of
restructuring. Adjusted EPS of $1.85
was up 2 percent. Sales of $15.3
billion were up 3 percent, driven by 3 points of organic
growth and 1 point of net acquisition growth, partially offset by 1
point of adverse foreign exchange.
Net income for the quarter was $1.4
billion, up 1 percent versus the prior year. Cash flow from
operations for the quarter was $2.1
billion (149 percent of net income attributable to common
shareholders) and capital expenditures were $446 million. Free cash flow of $1.7 billion in the quarter was 118 percent of
net income attributable to common shareowners.
In the quarter, new equipment orders at Otis were flat versus
the prior year and increased by 11 percent organically at UTC
Climate, Controls & Security, each at constant currency.
Commercial aftermarket sales were up 4 percent at Pratt &
Whitney and were up 7 percent at UTC Aerospace Systems.
UTC updates its 2017 outlook and now anticipates:
- Adjusted EPS of $6.45 to $6.60,
up from $6.30 to $6.60*;
- Sales of $58.5 billion to $59.5
billion, up from $57.5 billion to $59
billion (up 2 to 4 percent, including organic sales growth
of 3 to 4 percent*);
- There is no change in the Company's previously provided 2017
expectations for free cash flow, share repurchases, or the
placeholder for acquisitions.
*Note: When we provide expectations for adjusted EPS, organic
sales and free cash flow 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/79sxfkwf, 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
United Technologies Corporation reports its financial results in
accordance with accounting principles generally accepted in
the United States ("GAAP").
We supplement the reporting of our financial information
determined under 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,
adjusted net income and adjusted diluted earnings per share ("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/or 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 net income represents net 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 Appendix. The tables provide additional information as
to the items and amounts that have been excluded from the adjusted
measures.
When we provide our expectation for adjusted EPS, organic sales
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, sales and expected cash flow from operations) 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) 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; (6) delays and disruption in delivery
of materials and services from suppliers; (7) company and customer-
directed cost reduction efforts and restructuring costs and savings
and other consequences thereof; (8) 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; (9) new business or investment
opportunities; (10) our ability to realize the intended benefits of
organizational changes; (11) the anticipated benefits of
diversification and balance of operations across product lines,
regions and industries; (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 the effect of
changes in U.S. trade policies or the U.K.'s pending withdrawal
from the EU, on general market conditions, global trade policies
and currency exchange rates in the near term and beyond; and (16)
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:
Maureen
Fitzgerald
(860) 728-7907
maureen.fitzgerald@utc.com
United
Technologies Corporation
Condensed Consolidated Statement of Operations
|
|
|
|
|
|
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions, except per
share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
Sales
|
$
|
15,280
|
|
|
$
|
14,874
|
|
|
$
|
29,095
|
|
|
$
|
28,231
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Cost of products and
services sold
|
11,100
|
|
|
10,741
|
|
|
21,177
|
|
|
20,395
|
|
|
Research and
development
|
609
|
|
|
588
|
|
|
1,186
|
|
|
1,129
|
|
|
Selling, general and
administrative
|
1,538
|
|
|
1,451
|
|
|
3,020
|
|
|
2,814
|
|
|
Total Costs and
Expenses
|
13,247
|
|
|
12,780
|
|
|
25,383
|
|
|
24,338
|
|
Other income,
net
|
257
|
|
|
243
|
|
|
845
|
|
|
389
|
|
Operating
profit
|
2,290
|
|
|
2,337
|
|
|
4,557
|
|
|
4,282
|
|
|
Interest expense,
net
|
226
|
|
|
225
|
|
|
439
|
|
|
448
|
|
Income from
continuing operations before income taxes
|
2,064
|
|
|
2,112
|
|
|
4,118
|
|
|
3,834
|
|
|
Income tax
expense
|
532
|
|
|
587
|
|
|
1,118
|
|
|
1,056
|
|
Income from
continuing operations
|
1,532
|
|
|
1,525
|
|
|
3,000
|
|
|
2,778
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings from continuing
operations
|
93
|
|
|
99
|
|
|
175
|
|
|
180
|
|
Income from
continuing operations attributable to common shareowners
|
1,439
|
|
|
1,426
|
|
|
2,825
|
|
|
2,598
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Income from
operations
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
(Loss) gain on
disposal
|
—
|
|
|
(3)
|
|
|
—
|
|
|
15
|
|
|
Income tax
expense
|
—
|
|
|
(45)
|
|
|
—
|
|
|
(52)
|
|
Loss from
discontinued operations attributable to common
shareowners
|
—
|
|
|
(47)
|
|
|
—
|
|
|
(36)
|
|
Net income
attributable to common shareowners
|
$
|
1,439
|
|
|
$
|
1,379
|
|
|
$
|
2,825
|
|
|
$
|
2,562
|
|
Earnings (Loss)
Per Share of Common Stock - Basic:
|
|
|
|
|
|
|
|
|
From continuing
operations attributable to common shareowners
|
$
|
1.83
|
|
|
$
|
1.73
|
|
|
$
|
3.57
|
|
|
$
|
3.15
|
|
|
From discontinued
operations attributable to common shareowners
|
—
|
|
|
(0.06)
|
|
|
—
|
|
|
(0.04)
|
|
|
Total attributable to
common shareowners
|
$
|
1.83
|
|
|
$
|
1.67
|
|
|
$
|
3.57
|
|
|
$
|
3.11
|
|
Earnings (Loss)
Per Share of Common Stock - Diluted:
|
|
|
|
|
|
|
|
|
From continuing
operations attributable to common shareowners
|
$
|
1.80
|
|
|
$
|
1.71
|
|
|
$
|
3.53
|
|
|
$
|
3.12
|
|
|
From discontinued
operations attributable to common shareowners
|
—
|
|
|
(0.06)
|
|
|
—
|
|
|
(0.04)
|
|
|
Total attributable to
common shareowners
|
$
|
1.80
|
|
|
$
|
1.65
|
|
|
$
|
3.53
|
|
|
$
|
3.08
|
|
Weighted Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
shares
|
789
|
|
|
825
|
|
|
791
|
|
|
825
|
|
|
Diluted
shares
|
798
|
|
|
834
|
|
|
800
|
|
|
832
|
|
As described on the following pages, consolidated results for
the quarters and six months ended June 30,
2017 and 2016 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 June
30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
Sales
|
|
|
|
|
|
|
|
Otis
|
$
|
3,131
|
|
|
$
|
3,097
|
|
|
$
|
5,935
|
|
|
$
|
5,812
|
|
UTC Climate, Controls
& Security
|
4,712
|
|
|
4,459
|
|
|
8,604
|
|
|
8,187
|
|
Pratt &
Whitney
|
4,070
|
|
|
3,813
|
|
|
7,828
|
|
|
7,401
|
|
UTC Aerospace
Systems
|
3,640
|
|
|
3,716
|
|
|
7,251
|
|
|
7,221
|
|
Segment
Sales
|
15,553
|
|
|
15,085
|
|
|
29,618
|
|
|
28,621
|
|
Eliminations and
other
|
(273)
|
|
|
(211)
|
|
|
(523)
|
|
|
(390)
|
|
Consolidated Net
Sales
|
$
|
15,280
|
|
|
$
|
14,874
|
|
|
$
|
29,095
|
|
|
$
|
28,231
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
Otis
|
$
|
544
|
|
|
$
|
581
|
|
|
$
|
996
|
|
|
$
|
1,047
|
|
UTC Climate, Controls
& Security
|
873
|
|
|
872
|
|
|
1,836
|
|
|
1,478
|
|
Pratt &
Whitney
|
402
|
|
|
386
|
|
|
795
|
|
|
796
|
|
UTC Aerospace
Systems
|
579
|
|
|
582
|
|
|
1,155
|
|
|
1,120
|
|
Segment Operating
Profit
|
2,398
|
|
|
2,421
|
|
|
4,782
|
|
|
4,441
|
|
Eliminations and
other
|
(2)
|
|
|
13
|
|
|
(15)
|
|
|
29
|
|
General corporate
expenses
|
(106)
|
|
|
(97)
|
|
|
(210)
|
|
|
(188)
|
|
Consolidated
Operating Profit
|
$
|
2,290
|
|
|
$
|
2,337
|
|
|
$
|
4,557
|
|
|
$
|
4,282
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
Otis
|
|
17.4%
|
|
|
|
18.8%
|
16.8%
|
|
|
18.0%
|
|
UTC Climate, Controls
& Security
|
|
18.5%
|
|
|
|
19.6%
|
21.3%
|
|
|
18.1%
|
|
Pratt &
Whitney
|
|
9.9%
|
|
|
|
10.1%
|
10.2%
|
|
|
10.8%
|
|
UTC Aerospace
Systems
|
|
15.9%
|
|
|
|
15.7%
|
|
|
|
15.9%
|
|
|
|
15.5%
|
|
Segment Operating
Profit Margin
|
|
15.4%
|
|
|
|
16.0%
|
16.1%
|
|
|
15.5%
|
|
As described on the following pages, consolidated results for
the quarters and six months ended June 30,
2017 and 2016 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 June
30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
In Millions - Income
(Expense)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Income from
continuing operations attributable to common
shareowners
|
$
|
1,439
|
|
|
$
|
1,426
|
|
|
$
|
2,825
|
|
|
$
|
2,598
|
|
Restructuring
Costs included in Operating Profit:
|
|
|
|
|
|
|
|
Otis
|
(12)
|
|
|
(16)
|
|
|
(17)
|
|
|
(31)
|
|
UTC Climate, Controls
& Security
|
(18)
|
|
|
(25)
|
|
|
(41)
|
|
|
(53)
|
|
Pratt &
Whitney
|
(6)
|
|
|
(66)
|
|
|
(6)
|
|
|
(71)
|
|
UTC Aerospace
Systems
|
(24)
|
|
|
(8)
|
|
|
(47)
|
|
|
(21)
|
|
Eliminations and
other
|
—
|
|
|
(1)
|
|
|
(1)
|
|
|
(2)
|
|
|
(60)
|
|
|
(116)
|
|
|
(112)
|
|
|
(178)
|
|
Significant
non-recurring and non-operational items included in Operating
Profit:
|
|
|
|
|
|
|
|
UTC Climate, Controls
& Security
|
|
|
|
|
|
|
|
Gain on sale of
investments in Watsco, Inc.
|
—
|
|
|
—
|
|
|
379
|
|
|
—
|
|
Acquisition and
integration costs related to current period acquisitions
|
—
|
|
|
(12)
|
|
|
—
|
|
|
(12)
|
|
Eliminations and
other
|
|
|
|
|
|
|
|
Gain on sale of
available-for-sale security
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(12)
|
|
|
380
|
|
|
(12)
|
|
Total impact on
Consolidated Operating Profit
|
(60)
|
|
|
(128)
|
|
|
268
|
|
|
(190)
|
|
Tax effect of
restructuring and significant non-recurring and non-operational
items above
|
20
|
|
|
40
|
|
|
(104)
|
|
|
60
|
|
Less: Impact on Net
Income from Continuing Operations Attributable to Common
Shareowners
|
(40)
|
|
|
(88)
|
|
|
164
|
|
|
(130)
|
|
Adjusted income
from continuing operations attributable to common
shareowners
|
$
|
1,479
|
|
|
$
|
1,514
|
|
|
$
|
2,661
|
|
|
$
|
2,728
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share from Continuing Operations
|
$
|
1.80
|
|
|
$
|
1.71
|
|
|
$
|
3.53
|
|
|
$
|
3.12
|
|
Impact on Diluted
Earnings Per Share from Continuing Operations
|
(0.05)
|
|
|
(0.11)
|
|
|
0.20
|
|
|
(0.16)
|
|
Adjusted Diluted
Earnings Per Share from Continuing Operations
|
$
|
1.85
|
|
|
$
|
1.82
|
|
|
$
|
3.33
|
|
|
$
|
3.28
|
|
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 page)
|
|
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(Millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
Sales
|
|
|
|
|
|
|
|
Otis
|
$
|
3,131
|
|
|
$
|
3,097
|
|
|
$
|
5,935
|
|
|
$
|
5,812
|
|
UTC Climate, Controls
& Security
|
4,712
|
|
|
4,459
|
|
|
8,604
|
|
|
8,187
|
|
Pratt &
Whitney
|
4,070
|
|
|
3,813
|
|
|
7,828
|
|
|
7,401
|
|
UTC Aerospace
Systems
|
3,640
|
|
|
3,716
|
|
|
7,251
|
|
|
7,221
|
|
Segment
Sales
|
15,553
|
|
|
15,085
|
|
|
29,618
|
|
|
28,621
|
|
Eliminations and
other
|
(273)
|
|
|
(211)
|
|
|
(523)
|
|
|
(390)
|
|
Consolidated Net
Sales
|
$
|
15,280
|
|
|
$
|
14,874
|
|
|
$
|
29,095
|
|
|
$
|
28,231
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
|
|
|
|
|
|
Otis
|
$
|
556
|
|
|
$
|
597
|
|
|
$
|
1,013
|
|
|
$
|
1,078
|
|
UTC Climate, Controls
& Security
|
891
|
|
|
909
|
|
|
1,498
|
|
|
1,543
|
|
Pratt &
Whitney
|
408
|
|
|
452
|
|
|
801
|
|
|
867
|
|
UTC Aerospace
Systems
|
603
|
|
|
590
|
|
|
1,202
|
|
|
1,141
|
|
Segment Operating
Profit
|
2,458
|
|
|
2,548
|
|
|
4,514
|
|
|
4,629
|
|
Eliminations and
other
|
(2)
|
|
|
14
|
|
|
(16)
|
|
|
31
|
|
General corporate
expenses
|
(106)
|
|
|
(97)
|
|
|
(209)
|
|
|
(188)
|
|
Adjusted
Consolidated Operating Profit
|
$
|
2,350
|
|
|
$
|
2,465
|
|
|
$
|
4,289
|
|
|
$
|
4,472
|
|
Adjusted Segment
Operating Profit Margin
|
|
|
|
|
|
|
|
Otis
|
|
17.8%
|
|
|
|
19.3%
|
|
|
|
17.1%
|
|
|
|
18.5%
|
|
UTC Climate, Controls
& Security
|
|
18.9%
|
|
|
|
20.4%
|
|
|
|
17.4%
|
|
|
|
18.8%
|
|
Pratt &
Whitney
|
|
10.0%
|
|
|
|
11.9%
|
|
|
|
10.2%
|
|
|
|
11.7%
|
|
UTC Aerospace
Systems
|
|
16.6%
|
|
|
|
15.9%
|
|
|
|
16.6%
|
|
|
|
15.8%
|
|
Adjusted Segment
Operating Profit Margin
|
|
15.8%
|
|
|
|
16.9%
|
|
|
|
15.2%
|
|
|
|
16.2%
|
|
United
Technologies Corporation
Components of Changes in Net Sales
|
|
|
|
|
|
Quarter Ended
June 30, 2017 Compared with Quarter Ended June 30,
2016
|
|
|
|
|
|
|
|
|
|
|
|
Factors
Contributing to Total % Change in Net Sales
|
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
Otis
|
|
1%
|
|
(2)%
|
|
1%
|
|
1%
|
|
1%
|
UTC Climate, Controls
& Security
|
|
5%
|
|
(1)%
|
|
2%
|
|
—
|
|
6%
|
Pratt &
Whitney
|
|
6%
|
|
1%
|
|
—
|
|
—
|
|
7%
|
UTC Aerospace
Systems
|
|
(1)%
|
|
—
|
|
(1)%
|
|
—
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
3%
|
|
(1)%
|
|
1%
|
|
—
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended June 30, 2017 Compared with Six Months Ended June 30,
2016
|
|
|
|
|
|
|
|
|
|
|
|
Factors
Contributing to Total % Change in Net Sales
|
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
Otis
|
|
2%
|
|
(2)%
|
|
1%
|
|
1%
|
|
2%
|
UTC Climate, Controls
& Security
|
|
3%
|
|
(1)%
|
|
3%
|
|
—
|
|
5%
|
Pratt &
Whitney
|
|
5%
|
|
1%
|
|
—
|
|
—
|
|
6%
|
UTC Aerospace
Systems
|
|
2%
|
|
(1)%
|
|
(1)%
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
3%
|
|
(1)%
|
|
1%
|
|
—
|
|
3%
|
United
Technologies Corporation
Condensed Consolidated Balance Sheet
|
|
|
|
|
|
|
|
|
June
30,
|
|
December 31,
|
|
2017
|
|
2016
|
(Millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
9,345
|
|
|
$
|
7,157
|
|
Accounts receivable,
net
|
12,597
|
|
|
11,481
|
|
Inventories and
contracts in progress, net
|
9,860
|
|
|
8,704
|
|
Other assets,
current
|
1,027
|
|
|
1,208
|
|
Total Current
Assets
|
32,829
|
|
|
28,550
|
|
Fixed assets,
net
|
9,475
|
|
|
9,158
|
|
Goodwill
|
27,587
|
|
|
27,059
|
|
Intangible assets,
net
|
15,881
|
|
|
15,684
|
|
Other
assets
|
9,021
|
|
|
9,255
|
|
Total
Assets
|
$
|
94,793
|
|
|
$
|
89,706
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term
debt
|
$
|
2,743
|
|
|
$
|
2,204
|
|
Accounts
payable
|
8,542
|
|
|
7,483
|
|
Accrued
liabilities
|
12,634
|
|
|
12,219
|
|
Total Current
Liabilities
|
23,919
|
|
|
21,906
|
|
Long-term
debt
|
23,883
|
|
|
21,697
|
|
Other long-term
liabilities
|
16,430
|
|
|
16,638
|
|
Total
Liabilities
|
64,232
|
|
|
60,241
|
|
Redeemable
noncontrolling interest
|
406
|
|
|
296
|
|
Shareowners'
Equity:
|
|
|
|
Common
Stock
|
17,282
|
|
|
17,190
|
|
Treasury
Stock
|
(35,516)
|
|
|
(34,150)
|
|
Retained
earnings
|
54,640
|
|
|
52,873
|
|
Accumulated other
comprehensive loss
|
(7,964)
|
|
|
(8,334)
|
|
Total Shareowners'
Equity
|
28,442
|
|
|
27,579
|
|
Noncontrolling
interest
|
1,713
|
|
|
1,590
|
|
Total
Equity
|
30,155
|
|
|
29,169
|
|
Total Liabilities
and Equity
|
$
|
94,793
|
|
|
$
|
89,706
|
|
Debt
Ratios:
|
|
|
|
Debt to total
capitalization
|
|
47%
|
|
45%
|
|
Net debt to net
capitalization
|
|
36%
|
|
36%
|
|
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)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating
Activities of Continuing Operations:
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
$
|
1,532
|
|
|
$
|
1,525
|
|
|
$
|
3,000
|
|
|
$
|
2,778
|
|
Adjustments to
reconcile net income from continuing operations to net cash flows
provided by operating activities of continuing
operations:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
527
|
|
|
494
|
|
|
1,039
|
|
|
960
|
|
Deferred income tax
provision
|
393
|
|
|
75
|
|
|
502
|
|
|
220
|
|
Stock compensation
cost
|
49
|
|
|
48
|
|
|
96
|
|
|
96
|
|
Change in working
capital
|
(79)
|
|
|
35
|
|
|
(554)
|
|
|
(596)
|
|
Global pension
contributions
|
(33)
|
|
|
(32)
|
|
|
(79)
|
|
|
(107)
|
|
Canadian government
settlement
|
—
|
|
|
—
|
|
|
(246)
|
|
|
(237)
|
|
Other operating
activities, net
|
(243)
|
|
|
(337)
|
|
|
(619)
|
|
|
(508)
|
|
Net cash flows
provided by operating activities of continuing
operations
|
2,146
|
|
|
1,808
|
|
|
3,139
|
|
|
2,606
|
|
Investing
Activities of Continuing Operations:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(446)
|
|
|
(363)
|
|
|
(771)
|
|
|
(649)
|
|
Acquisitions and
dispositions of businesses, net
|
(49)
|
|
|
(425)
|
|
|
(149)
|
|
|
(488)
|
|
Proceeds from sale of
investments in Watsco, Inc.
|
—
|
|
|
—
|
|
|
596
|
|
|
—
|
|
Increase in
collaboration intangible assets
|
(94)
|
|
|
(101)
|
|
|
(195)
|
|
|
(199)
|
|
(Payments) receipts
from settlements of derivative contracts
|
(181)
|
|
|
44
|
|
|
(294)
|
|
|
86
|
|
Other investing
activities, net
|
(81)
|
|
|
(42)
|
|
|
(177)
|
|
|
(130)
|
|
Net cash flows used
in investing activities of continuing operations
|
(851)
|
|
|
(887)
|
|
|
(990)
|
|
|
(1,380)
|
|
Financing
Activities of Continuing Operations:
|
|
|
|
|
|
|
|
Issuance (repayment)
of long-term debt, net
|
2,429
|
|
|
(2)
|
|
|
2,402
|
|
|
2,322
|
|
(Decrease) increase
in short-term borrowings, net
|
(535)
|
|
|
(484)
|
|
|
32
|
|
|
(178)
|
|
Dividends paid on
Common Stock
|
(503)
|
|
|
(526)
|
|
|
(1,008)
|
|
|
(1,035)
|
|
Repurchase of Common
Stock
|
(437)
|
|
|
(36)
|
|
|
(1,370)
|
|
|
(36)
|
|
Other financing
activities, net
|
(77)
|
|
|
(68)
|
|
|
(108)
|
|
|
(159)
|
|
Net cash flows
provided by (used in) financing activities of continuing
operations
|
877
|
|
|
(1,116)
|
|
|
(52)
|
|
|
914
|
|
Discontinued
Operations:
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
—
|
|
|
(236)
|
|
|
—
|
|
|
(2,463)
|
|
Net cash provided by
investing activities
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
Net cash flows used
in discontinued operations
|
—
|
|
|
(230)
|
|
|
—
|
|
|
(2,457)
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
26
|
|
|
(7)
|
|
|
95
|
|
|
10
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
2,198
|
|
|
(432)
|
|
|
2,192
|
|
|
(307)
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
7,183
|
|
|
7,245
|
|
|
7,189
|
|
|
7,120
|
|
Cash, cash
equivalents and restricted cash, end of period
|
9,381
|
|
|
6,813
|
|
|
9,381
|
|
|
6,813
|
|
Less: Restricted
cash, included in Other assets
|
36
|
|
|
28
|
|
|
36
|
|
|
28
|
|
Cash and cash
equivalents, end of period
|
$
|
9,345
|
|
|
$
|
6,785
|
|
|
$
|
9,345
|
|
|
$
|
6,785
|
|
See accompanying Notes to Condensed Consolidated Financial
Statements.
United
Technologies Corporation
Free Cash Flow Reconciliation
|
|
|
|
|
Quarter Ended June
30,
|
|
(Unaudited)
|
(Millions)
|
2017
|
|
2016
|
|
|
|
|
|
|
Net income
attributable to common shareowners from continuing
operations
|
$
|
1,439
|
|
|
|
$
|
1,426
|
|
|
Net cash flows
provided by operating activities of continuing
operations
|
$
|
2,146
|
|
|
|
$
|
1,808
|
|
|
Net cash flows
provided by operating activities of continuing operations as a
percentage of net income attributable to common shareowners from
continuing operations
|
|
149
|
%
|
|
|
127
|
%
|
Capital
expenditures
|
(446)
|
|
|
|
(363)
|
|
|
Capital expenditures
as a percentage of net income attributable to common shareowners
from continuing operations
|
|
(31)
|
%
|
|
|
(25)
|
%
|
Free cash flow from
continuing operations
|
$
|
1,700
|
|
|
|
$
|
1,445
|
|
|
Free cash flow from
continuing operations as a percentage of net income attributable to
common shareowners from continuing operations
|
|
118
|
%
|
|
|
101
|
%
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
(Millions)
|
2017
|
|
2016
|
|
|
|
|
|
|
Net income
attributable to common shareowners from continuing
operations
|
$
|
2,825
|
|
|
|
$
|
2,598
|
|
|
Net cash flows
provided by operating activities of continuing
operations
|
$
|
3,139
|
|
|
|
$
|
2,606
|
|
|
Net cash flows
provided by operating activities of continuing operations as a
percentage of net income attributable to common shareowners from
continuing operations
|
|
111
|
%
|
|
|
100
|
%
|
Capital
expenditures
|
(771)
|
|
|
|
(649)
|
|
|
Capital expenditures
as a percentage of net income attributable to common shareowners
from continuing operations
|
|
(27)
|
%
|
|
|
(25)
|
%
|
Free cash flow from
continuing operations
|
$
|
2,368
|
|
|
|
$
|
1,957
|
|
|
Free cash flow from
continuing operations as a percentage of net income attributable to
common shareowners from continuing operations
|
|
84
|
%
|
|
|
75
|
%
|
Notes to Condensed Consolidated Financial Statements
Certain reclassifications have been made to the prior year
amounts to conform to the current year presentation. As previously
disclosed in our 2016 Form 10-K, in 2016 we early adopted
Accounting Standards Update (ASU) 2016-09, Compensation - Stock
Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting, ASU 2016-15, Statement of Cash Flows
(Topic 230): Classification of Certain Cash Receipts and Cash
Payments and ASU 2016-18, Statement of Cash Flows (Topic
230): Restricted Cash. Amounts previously reported for
the quarter and six months ended June 30,
2016 have been restated as required upon adoption of these
ASUs. These restatements had an immaterial impact to the Condensed
Consolidated Financial Statements as of June
30, 2016 and for the quarter and six months then ended.
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.
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SOURCE United Technologies Corp.