Tuesday, May 21, 2013 Last update: 4:07 PM
Company Tech News as it Breaks
UTC Reports Fourth Quarter And Full Year EPS Of $1.04 And $5.35; Reaffirms 2013 EPS Outlook Of $5.85 To $6.15
Submitted by admin on 1/23/2013 @ 3:59 AM
Companies mentioned in this article:
United Technologies Corp.
HARTFORD, Conn., Jan. 23, 2013 /PRNewswire/ -- United Technologies Corp. (NYSE: UTX) today reported full year 2012 earnings per share of $5.35 and net income attributable to common shareowners of $4.8 billion, both essentially flat versus prior year. The acquisition of Goodrich Corporation was $0.06 dilutive to EPS. Sales of $57.7 billion were 4 percent above prior year including net acquisitions (6 points) and adverse foreign currency translation (2 points). For the year, organic sales were flat and segment operating margin was 14.0 percent. Adjusted for restructuring and one-time items, segment operating margin of 14.8 percent was 60 basis points lower than prior year, including dilution from the acquisition of Goodrich Corporation. Cash flow from operations of $6.6 billion, less capital expenditures of $1.4 billion, exceeded net income attributable to common shareowners.
"2012 was a transformational year for United Technologies with the successful completion of the Goodrich and IAE transactions, and the divestiture of several non-core assets," said Louis Chenevert, UTC Chairman & Chief Executive Officer. "We reshaped our portfolio to focus on our core markets. We also invested $2.4 billion in developing game changing technologies and nearly $600 million on restructuring our operations to address a challenging economic environment."
Fourth quarter 2012 earnings per share of $1.04 were down 27 percent from the year ago quarter. Results for the quarter included $0.25 per share of restructuring and one-time charges. The prior year quarter included $0.01 of net favorable one-time items in excess of restructuring charges. Before these items, earnings per share decreased $0.12 or 9 percent year over year. In addition, results included a $0.12 charge recorded at Sikorsky related to the Canadian Maritime Helicopter program. Foreign currency translation and hedges at Pratt & Whitney Canada had an adverse impact of $0.02 in the quarter.
Sales of $16.4 billion for the quarter were 14 percent above prior year. Net acquisitions provided 15 points of growth. Organic sales were flat and foreign currency translation had an adverse impact of 1 point. Fourth quarter segment operating margin was 11.4 percent. Adjusted for restructuring costs and net one-time items, segment operating margin of 13.3 percent was 200 basis points lower than prior year, primarily due to the impact of the acquisition of Goodrich Corporation and the Canadian Maritime Helicopter program charge at Sikorsky. Cash flow from operations of $2.0 billion less capital expenditures of $641 million exceeded net income attributable to common shareowners of $945 million.
"We closed the year better than we had anticipated," said Chenevert. "Cash generation was strong both in the quarter and for the full year, and we delivered on our commitment to pay down approximately one-third of the Goodrich acquisition debt."
New equipment orders at Otis were up 12 percent over the year ago fourth quarter including adverse foreign exchange of 1 point, driven by strong order growth in China. North American Residential HVAC new equipment orders at UTC Climate, Controls & Security grew 20 percent. Large commercial engine spares orders were up 46 percent at Pratt & Whitney including the impact from the incremental International Aero Engines share. Organically, commercial spares orders were down 8 percent at Pratt & Whitney and down 4 percent at UTC Aerospace Systems.
"With broad based improvement in our order trends, and a continued focus on integration and execution, we remain confident in our ability to deliver 2013 earnings per share of $5.85 to $6.15," Chenevert added. "We continue to expect sales between $64 and $65 billion and cash flow from operations less capital expenditures to equal or exceed net income attributable to common shareowners in 2013."
United Technologies Corp., based in Hartford, Connecticut, is a diversified company providing 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.
All financial results and projections reflect continuing operations unless otherwise noted. The accompanying tables include information integral to assessing the company's financial position, operating performance, and cash flow, including a reconciliation of differences between non-GAAP measures used in this release and the comparable financial measures calculated in accordance with generally accepted accounting principles in the United States.
This release includes statements that constitute "forward-looking statements" under the securities laws. Forward-looking statements often contain words such as "believe," "expect," "plans," "strategy," "prospects," "estimate," "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, financing plans, charges, expenditures, anticipated benefits of acquisitions and divestitures, results of operations, uses of cash 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 indebtedness and capital and research and development spending; levels of end market demand in construction and in the aerospace industry; levels of air travel; financial difficulties of commercial airlines; the impact of weather conditions and natural disasters; the financial condition of our customers and suppliers; delays and disruption in delivery of materials and services from suppliers; cost reduction efforts and restructuring costs and savings and other consequences thereof; the scope, nature, timing or impact of acquisitions, dispositions, joint ventures and other business arrangements, including integration of acquired businesses; the timing and amount of gains, losses, impairments and charges related to anticipated dispositions; the timing and impact of anticipated debt reduction following the Goodrich acquisition; the development and production of new products and services; the anticipated benefits of diversification and balance of operations across product lines, regions and industries; the impact of the negotiation of collective bargaining agreements and labor disputes; the outcome of legal proceedings and other contingencies; future availability of credit; pension plan assumptions and future contributions; and the effect of changes in tax, environmental and other laws and regulations and political conditions in countries in which we operate and other factors beyond our control. The completion of the proposed divestitures of businesses is subject to uncertainties, including the ability to secure disposition agreements and regulatory approvals on acceptable terms; and satisfaction of other customary conditions. These forward-looking statements speak only as of the date of this release and we undertake no obligation to update or revise any forward-looking statements after we distribute this release. For additional information identifying factors that may cause actual results to vary materially from those stated in the 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 Comprehensive Income
Quarter Ended Year Ended
December 31, December 31,
(Unaudited) (Unaudited)
---------- ----------
(Millions, except per share amounts) 2012 2011 2012 2011
---- ---- ---- ----
Net sales $16,443 $14,377 $57,708 $55,754
Costs and Expenses:
Cost of products and services sold 12,286 10,411 42,153 40,369
Research and development 712 524 2,371 1,951
Selling, general and administrative 1,795 1,623 6,452 6,161
Total Costs and Expenses 14,793 12,558 50,976 48,481
Other income, net 101 26 952 573
--- --- --- ---
Operating profit 1,751 1,845 7,684 7,846
Interest expense, net 260 67 773 496
Income from continuing operations before income taxes 1,491 1,778 6,911 7,350
Income tax expense 454 403 1,711 2,134
Income from continuing operations 1,037 1,375 5,200 5,216
----- ----- ----- -----
Discontinued operations:
Income from operations 53 54 171 255
Gain on disposal 2,058 - 861 -
Income tax expense (998) (7) (742) (97)
Net income from discontinued operations 1,113 47 290 158
----- --- --- ---
Net income 2,150 1,422 5,490 5,374
Less: Noncontrolling interest in subsidiaries' earnings 93 97 360 395
Net income attributable to common shareowners $2,057 $1,325 $5,130 $4,979
====== ====== ====== ======
Comprehensive income (loss) $1,369 $(318) $5,540 $3,650
Less: Comprehensive income attributable to
noncontrolling interests 97 81 368 392
Comprehensive income (loss) attributable to
common shareowners $1,272 $(399) $5,172 $3,258
==========
Net income attributable to common shareowners:
From continuing operations $945 $1,280 $4,847 $4,831
From discontinued operations 1,112 45 283 148
Earnings Per Share of Common Stock - Basic:
From continuing operations $1.05 $1.44 $5.41 $5.41
From discontinued operations 1.24 0.05 0.32 0.17
Earnings Per Share of Common Stock - Diluted:
From continuing operations $1.04 $1.42 $5.35 $5.33
From discontinued operations 1.22 0.05 0.31 0.16
As described on the following pages, consolidated results for the quarters and years ended December 31, 2012 and 2011 include restructuring costs and non-recurring items that management believes should be considered when evaluating the underlying financial performance.
See accompanying Notes to Condensed Consolidated Financial Statements.
United Technologies Corporation
Segment Net Sales and Operating Profit
Quarter Ended Year Ended
December 31,
December 31,
(Unaudited) (Unaudited)
---------- ----------
(Millions) 2012 2011 2012 2011
---- ---- ---- ----
Net Sales
Otis $3,205 $3,211 $12,056 $12,437
UTC Climate, Controls & Security 4,147 4,410 17,090 18,864
Pratt & Whitney 3,891 3,481 13,964 12,711
UTC Aerospace Systems 3,174 1,264 8,334 4,760
Sikorsky 2,176 2,110 6,791 7,355
----- ----- ----- -----
Segment Sales 16,593 14,476 58,235 56,127
Eliminations and other (150) (99) (527) (373)
---- --- ---- ----
Consolidated Net Sales $16,443 $14,377 $57,708 $55,754
======= ======= ======= =======
Operating Profit
Otis $644 $711 $2,512 $2,815
UTC Climate, Controls & Security 460 461 2,425 2,212
Pratt & Whitney 364 519 1,589 1,867
UTC Aerospace Systems 264 198 944 759
Sikorsky 160 207 712 840
--- --- --- ---
Segment Operating Profit 1,892 2,096 8,182 8,493
Eliminations and other (18) (127) (72) (228)
General corporate expenses (123) (124) (426) (419)
---- ---- ---- ----
Consolidated Operating Profit $1,751 $1,845 $7,684 $7,846
====== ====== ====== ======
Segment Operating Profit Margin
Otis 20.1% 22.1% 20.8% 22.6%
UTC Climate, Controls & Security 11.1% 10.5% 14.2% 11.7%
Pratt & Whitney 9.4% 14.9% 11.4% 14.7%
UTC Aerospace Systems 8.3% 15.7% 11.3% 15.9%
Sikorsky 7.4% 9.8% 10.5% 11.4%
--- --- ---- ----
Segment Operating Profit Margin 11.4% 14.5% 14.0% 15.1%
As described on the following pages, consolidated results for the quarters and years ended December 31, 2012 and 2011 include restructuring costs and non-recurring items that management believes should be considered when evaluating the underlying financial performance.
United Technologies Corporation
Restructuring Costs and Non-Recurring Items Included in Results of Continuing Operations
Quarter Ended Year Ended
December 31, December 31,
(Unaudited) (Unaudited)
---------- ----------
In Millions - Income (Expense) 2012 2011 2012 2011
---- ---- ---- ----
Restructuring Costs included in Operating Profit:
Otis $(59) $(26) $(164) $(73)
UTC Climate, Controls & Security (45) (61) (143) (126)
Pratt & Whitney (39) (18) (96) (52)
UTC Aerospace Systems (75) (6) (115) (11)
Sikorsky (35) (37) (53) (53)
Eliminations and other (5) - (19) -
--- --- --- ---
(258) (148) (590) (315)
---- ---- ---- ----
Non-Recurring Gains (Losses) included in Operating Profit:
UTC Climate, Controls & Security (65) 35 157 43
Pratt & Whitney - - - 41
Sikorsky - - - 73
Eliminations and other - (45) 24 (45)
(65) (10) 181 112
--- --- --- ---
Total impact on Consolidated Operating Profit (323) (158) (409) (203)
Non-Recurring items included in Interest - 89 40 89
Expense, Net
Tax effect of restructuring and non-
recurring
items above 92 17 122 15
Non-Recurring items included in Income
Tax Expense - 63 237 80
Impact on Net Income from Continuing Operations Attributable to Common Shareowners $(231) $11 $(10) $(19)
Impact on Diluted Earnings Per Share from Continuing Operations $(0.25) $0.01 $(0.01) $(0.02)
Details of the non-recurring items for the quarters and years ended December 31, 2012 and 2011 above are as follows:
Quarter Ended December 31, 2012
UTC Climate, Controls & Security: Approximately $65 million net charge from UTC Climate, Controls & Security's ongoing portfolio transformation. This net charge includes approximately $24 million of pension settlement charges related to the sale of a controlling interest in its Canadian distribution business and $39 million of impairment charges related to the planned disposition of certain fire and security businesses.
Discontinued Operations: Approximately $2,103 million gain ($1,050 million net of tax) on the sale of the legacy Hamilton Sundstrand's Industrial businesses.
Quarter Ended September 30, 2012
Eliminations and other: Approximately $34 million non-cash gain recognized on the remeasurement to fair value of our previously held shares of Goodrich Corporation stock resulting from our acquisition of the company.
Interest Expense, Net: Approximately $25 million of favorable pre-tax interest adjustments related to the resolution of disputes with the Appeals Division of the IRS for the Company's 2004 - 2005 tax years.
Income Tax Expense: Approximately $34 million of favorable income tax adjustments related to the resolution of disputes with the Appeals Division of the IRS for the Company's 2004 - 2005 tax years.
Discontinued Operations: Approximately $127 million of favorable income tax adjustments related to the reversal of a portion of the deferred tax liability initially recorded during the quarter ended March 31, 2012 on the existing difference between the expected accounting versus tax gain on the planned disposition of legacy Hamilton Sundstrand's Industrial businesses. As a result of the structure of the transaction that was finalized in July 2012, a portion of the deferred tax liability cannot be recorded until the sale is finalized.
Quarter Ended June 30, 2012
UTC Climate, Controls & Security: Approximately $110 million net gain from UTC Climate, Controls & Security's ongoing portfolio transformation. This net gain includes approximately $142 million from the sale of a controlling interest in its Canadian distribution business, partially offset by a $32 million loss on the disposition of its U.S. fire and security branch operations.
Discontinued Operations:
-- Approximately $179 million pre-tax impairment charge related to
inventory, fixed assets and goodwill, as a result of the decision to
dispose of the UTC Power business.
-- Approximately $91 million reserve for potential remediation costs
associated with certain components of wind turbines previously installed
by our Clipper business.
Quarter Ended March 31, 2012
UTC Climate, Controls & Security: Approximately $112 million net gain from UTC Climate, Controls & Security's ongoing portfolio transformation. This net gain includes approximately $215 million from the sale of a controlling interest in a manufacturing and distribution joint venture in Asia, partially offset by $103 million of impairment charges related to planned business dispositions.
Eliminations and other: An additional $10 million of reserves were established for the export licensing compliance matters recorded in the fourth quarter 2011.
Interest Expense, Net: Approximately $15 million of favorable pre-tax interest adjustments related to the conclusion of the IRS's examination of the Company's 2006 - 2008 tax years.
Income Tax Expense: Approximately $203 million of favorable income tax adjustments related to the conclusion of the IRS's examination of the Company's 2006 - 2008 tax years.
Discontinued Operations:
-- Approximately $360 million and $590 million of pre-tax goodwill
impairment charges ($220 million and $410 million after tax) related to
Rocketdyne and Clipper, respectively.
-- Approximately $235 million of unfavorable income tax adjustments related
to the recognition of a deferred tax liability on the existing
difference between the expected accounting versus tax gain on the
planned disposition of legacy Hamilton Sundstrand's Industrial
businesses.
Quarter Ended December 31, 2011
UTC Climate, Controls & Security:
-- Approximately $81 million net gain resulting from Carrier's ongoing
portfolio transformation primarily as a result of the contribution of
Carrier's heating, air-conditioning, and ventilation operations in
Brazil, Argentina, and Chile into a new venture controlled by Midea
Group of China.
-- Approximately $46 million other-than-temporary impairment charge on an
equity investment.
Eliminations and other: Approximately $45 million of reserves were established for legal matters.
Interest Expense, Net: Approximately $89 million of favorable pre-tax interest adjustments related to the settlement of U.S. federal income tax refund claims for years prior to 2004.
Income Tax Expense: Approximately $63 million of favorable income tax adjustments related to the settlement of U.S. federal income tax refund claims for years prior to 2004.
Quarter Ended September 30, 2011
UTC Climate, Controls & Security:
-- Approximately $28 million net gain resulting from dispositions
associated with UTC Climate, Controls & Security's ongoing portfolio
transformation.
-- Approximately $20 million other-than-temporary impairment charge on an
equity investment.
Pratt & Whitney: Approximately $41 million gain recognized from the sale of an equity investment.
Income Tax Expense: Favorable tax benefit of approximately $17 million as a result of a U.K. tax rate reduction enacted in July 2011.
Quarter Ended June 30, 2011
Sikorsky: Approximately $73 million gain recognized from the contribution of a business into a new venture in the United Arab Emirates.
The following page provides segment net sales, operating profits and operating profit margins as adjusted for the aforementioned restructuring costs and non-recurring items. Management believes these adjusted results more accurately portray the ongoing operational performance and fundamentals of the underlying businesses. The amount and timing of restructuring costs and non-recurring activity can vary substantially from period to period with no assurances of comparable activity or amounts being incurred in future periods. These amounts have therefore been adjusted out in the following schedule in order to provide a more representative comparison of current year operating performance to prior year performance.
United Technologies Corporation
Segment Net Sales and Operating Profit Adjusted for Restructuring Costs and Non-Recurring Items (as reflected on the previous pages)
Quarter Ended Year Ended
December 31, December 31,
(Unaudited) (Unaudited)
---------- ----------
(Millions) 2012 2011 2012 2011
---- ---- ---- ----
Net Sales
Otis $3,205 $3,211 $12,056 $12,437
UTC Climate, Controls & Security 4,147 4,410 17,090 18,864
Pratt & Whitney 3,891 3,481 13,964 12,711
UTC Aerospace Systems 3,174 1,264 8,334 4,760
Sikorsky 2,176 2,110 6,791 7,355
----- ----- ----- -----
Segment Sales 16,593 14,476 58,235 56,127
Eliminations and other (150) (99) (527) (373)
---- --- ---- ----
Consolidated Net Sales $16,443 $14,377 $57,708 $55,754
======= ======= ======= =======
Adjusted Operating Profit
Otis $703 $737 $2,676 $2,888
UTC Climate, Controls & Security 570 487 2,411 2,295
Pratt & Whitney 403 537 1,685 1,878
UTC Aerospace Systems 339 204 1,059 770
Sikorsky 195 244 765 820
--- --- --- ---
Adjusted Segment Operating Profit 2,210 2,209 8,596 8,651
Eliminations and other (13) (82) (77) (183)
General corporate expenses (123) (124) (426) (419)
---- ---- ---- ----
Adjusted Consolidated Operating Profit $2,074 $2,003 $8,093 $8,049
====== ====== ====== ======
Adjusted Segment Operating Profit Margin
Otis 21.9% 23.0% 22.2% 23.2%
UTC Climate, Controls & Security 13.7% 11.0% 14.1% 12.2%
Pratt & Whitney 10.4% 15.4% 12.1% 14.8%
UTC Aerospace Systems 10.7% 16.1% 12.7% 16.2%
Sikorsky 9.0% 11.6% 11.3% 11.1%
--- ---- ---- ----
Adjusted Segment Operating Profit Margin 13.3% 15.3% 14.8% 15.4%
United Technologies Corporation
Condensed Consolidated Balance Sheet
December 31, December 31,
2012 2011
(Millions) (Unaudited) (Unaudited)
---------- ----------
Assets
------
Cash and cash equivalents $4,819 $5,960
Accounts receivable, net 11,099 9,546
Inventories and contracts in progress, net 9,537 7,797
Assets held for sale 1,071 -
Other assets, current 3,084 2,455
----- -----
Total Current Assets 29,610 25,758
Fixed assets, net 8,518 6,201
Goodwill 27,801 17,943
Intangible assets, net 15,189 3,918
Other assets 8,291 7,632
----- -----
Total Assets $89,409 $61,452
======= =======
Liabilities and Equity
----------------------
Short-term debt $1,624 $759
Accounts payable 6,431 5,570
Accrued liabilities 15,310 12,287
Liabilities held for sale 421 -
--- ---
Total Current Liabilities 23,786 18,616
Long-term debt 21,597 9,501
Other long-term liabilities 16,719 10,157
------ ------
Total Liabilities 62,102 38,274
Redeemable noncontrolling interest 238 358
Shareowners' Equity:
Common Stock 13,837 13,293
Treasury Stock (19,251) (19,410)
Retained earnings 36,776 33,487
Accumulated other comprehensive loss (5,448) (5,490)
------ ------
Total Shareowners' Equity 25,914 21,880
Noncontrolling interest 1,155 940
----- ---
Total Equity 27,069 22,820
Total Liabilities and Equity $89,409 $61,452
======= =======
Debt Ratios:
Debt to total capitalization 46% 31%
Net debt to net capitalization 40% 16%
See accompanying Notes to Condensed Consolidated Financial Statements.
United Technologies Corporation
Condensed Consolidated Statement of Cash Flows
Quarter Ended Year Ended
December 31, December 31,
(Unaudited) (Unaudited)
---------- ----------
(Millions) 2012 2011 2012 2011
---- ---- ---- ----
Operating Activities of Continuing Operations:
Income from continuing operations $1,037 $1,375 $5,200 $5,216
Adjustments to reconcile net income from
continuing
operations to net cash flows provided by
operating
activities of continuing operations:
Depreciation and amortization 477 301 1,524 1,263
Deferred income tax provision (benefit) 91 (3) 120 334
Stock compensation cost 60 42 210 221
Change in working capital 252 261 103 (291)
Global pension contributions * (197) (305) (430) (551)
Other operating activities, net 234 239 (122) 268
Net cash flows provided by operating activities 1,954 1,910 6,605 6,460
of continuing operations
Investing Activities of Continuing Operations:
Capital expenditures (641) (359) (1,389) (929)
Acquisitions and dispositions of businesses, net 45 (16) (15,601) 137
Increase in collaboration intangible assets (149) - (1,543) -
Other investing activities, net (55) (9) (262) 120
Net cash flows used in investing activities of continuing (800) (384) (18,795) (672)
operations
Financing Activities of Continuing Operations:
(Repayment) issuance of long-term debt, net (741) (507) 10,057 (557)
(Decrease) increase in short-term borrowings, net (4,723) (568) (214) 562
Dividends paid on Common Stock (464) (410) (1,752) (1,602)
Repurchase of Common Stock - - - (2,175)
Other financing activities, net (37) (108) (70) (211)
Net cash flows (used in) provided by financing activities (5,965) (1,593) 8,021 (3,983)
of continuing operations
Discontinued Operations:
Net cash provided by operating activities 19 102 41 130
Net cash provided by (used in) investing
activities 3,326 (25) 2,974 (35)
Net cash used in financing activities - (2) - (22)
Net cash flows provided by discontinued operations 3,345 75 3,015 73
----- --- ----- ---
Effect of foreign exchange rate changes on cash and 5 (14) 30 (1)
cash equivalents
Net (decrease) increase in cash and cash equivalents (1,461) (6) (1,124) 1,877
Cash and cash equivalents, beginning of period 6,297 5,966 5,960 4,083
----- ----- ----- -----
Cash and cash equivalents, end of period 4,836 5,960 4,836 5,960
Less: Cash and cash equivalents (17) - (17) -
of assets held for sale
Cash and cash equivalents of continuing $4,819 $5,960 $4,819 $5,960
operations, end of period
* Non-cash activities include contributions of UTC common stock to domestic defined benefit pension plans of
$450 million during the third quarter of 2011.
See accompanying Notes to Condensed Consolidated Financial Statements.
United Technologies Corporation
Free Cash Flow Reconciliation
Quarter Ended December 31,
(Unaudited)
----------
(Millions) 2012 2011
---- ----
Net income attributable to common shareowners from $945 $1,280
continuing operations
Net cash flows provided by operating activities of $1,954 $1,910
continuing operations
Net cash flows provided by operating activities of continuing 207% 149%
operations as a percentage of net income attributable to
common shareowners from continuing operations
Capital expenditures (641) (359)
---- ----
Capital expenditures as a percentage of net income (68)% (28)%
attributable to common shareowners from continuing operations
Free cash flow from continuing operations $1,313 $1,551
====== ======
Free cash flow from continuing operations as a percentage of 139% 121%
net income attributable to common shareowners
from continuing operations
Year Ended December 31,
(Unaudited)
----------
(Millions) 2012 2011
---- ----
Net income attributable to common shareowners from $4,847 $4,831
continuing operations
Net cash flows provided by operating activities of $6,605 $6,460
continuing operations
Net cash flows provided by operating activities of continuing 136% 134%
operations as a percentage of net income attributable to
common shareowners from continuing operations
Capital expenditures (1,389) (929)
------ ----
Capital expenditures as a percentage of net income (29)% (19)%
attributable to common shareowners from continuing operations
Free cash flow from continuing operations $5,216 $5,531
====== ======
Free cash flow from continuing operations as a percentage of 108% 114%
net income attributable to common shareowners
from continuing operations
United Technologies Corporation
Notes to Condensed Consolidated Financial
Statements
(1) Debt to total capitalization equals total
debt divided by total debt plus equity. Net
debt to net capitalization equals total debt
less cash and cash equivalents divided by total
debt plus equity less cash and cash
equivalents.
(2) Organic sales growth represents the total
reported increase within the Corporation's
ongoing businesses less the impact of foreign
currency translation, acquisitions and
divestitures completed in the preceding twelve
months and significant non-recurring items.
(3) Free cash flow, which represents cash flow
from operations less capital expenditures, is
the principal cash performance measure used by
UTC. Management believes free cash flow
provides a relevant measure of liquidity and a
useful basis for assessing UTC's ability to
fund its activities, including the financing of
acquisitions, debt service, repurchases of
UTC's common stock and distribution of earnings
to shareholders. Other companies that use the
term free cash flow may calculate it
differently. The reconciliation of net cash
flow provided by operating activities, prepared
in accordance with generally accepted
accounting principles, to free cash flow is
shown above.
(4) Prior period amounts reported within these
Condensed Consolidated Financial Statements
have been revised for:
The combination of the financial results of the
former Carrier and UTC Fire & Security segments
into a new segment called UTC Climate, Controls
& Security; and Discontinued operations related
to actual and planned divestiture of a number
of non-core businesses.
Contact: John Moran, UTC
(860) 728-7062
SOURCE United Technologies Corp.