Note 2: Discontinued Operations

3 Months Ended

Mar. 31, 2013

Notes to Condensed Consolidated Financial Statements [Abstract]

Note 2: Discontinued Operations

Discontinued Operations

In 2012, the UTC Board of Directors approved plans for the divestiture of a number of non-core businesses. Cash generated from these divestitures is being used to repay debt incurred to finance the Goodrich acquisition. These divestitures, when completed, are expected to generate approximately $3 billion in net cash, on an after-tax basis.

The legacy Hamilton Sundstrand Industrial businesses, as well as Clipper Windpower (Clipper), Pratt & Whitney Rocketdyne (Rocketdyne) and UTC Power all met the "held-for-sale" criteria in 2012. The results of operations, including the net realized gain and expected losses on disposition, and the related cash flows which result from these non-core businesses, have been reclassified to Discontinued Operations in our Condensed Consolidated Statements of Comprehensive Income and Cash Flows. The dispositions of Clipper and the legacy Hamilton Sundstrand Industrial businesses were completed in 2012.

On July 23, 2012, we announced an agreement to sell our Rocketdyne unit to GenCorp Inc. We expect to complete the sale of the business mid-year 2013, pending the satisfaction of closing conditions, including regulatory approval. We are taking significant actions required to satisfy these conditions.

On February 12, 2013, we completed the disposition of UTC Power to ClearEdge Power. The disposition resulted in payments by UTC totaling $48 million, which included capitalization of the business prior to the sale and interim funding of operations as the buyer took control of a loss generating business. We have no continuing involvement with the UTC Power business post disposition.

Although the Board of Directors also approved the sale of the Pratt & Whitney Power Systems business, it was not reclassified to Discontinued Operations due to our expected level of continuing involvement in the business post-sale. The sale of Pratt & Whitney Power Systems is expected to be completed during the second quarter of 2013.

The following summarized financial information related to Rocketdyne, and UTC Power (up to the point of sale) has been segregated from continuing operations and reported as discontinued operations:

	Quarter Ended March 31,
(Dollars in millions)	2013			2012
Discontinued Operations:
Net sales	$	161		$	524
Income from operations	$	20		$	30
Income tax expense	(7		)	(10		)
Income from operations, net of income taxes	13			20
Loss on disposal	(15		)	(961		)
Income tax benefit (expense)	(2		)	84
Loss from discontinued operations	$	(4	)	$	(857	)

The remaining assets and liabilities held for sale on the Condensed Consolidated Balance Sheet as of March 31, 2013 are those of Rocketdyne and Pratt & Whitney Power Systems, and also include those of UTC Power as of December 31, 2012, as follows:

(Dollars in millions)	March 31, 2013		December 31, 2012
Assets
Cash and cash equivalents	$	14	$	17
Accounts receivable, net	234		284
Inventories and contracts in progress, net	122		155
Future income tax benefits, current	4		5
Other assets, current	18		7
Future income tax benefits	2		2
Fixed assets, net	199		224
Goodwill	266		276
Intangible assets, net	12		14
Other assets	67		87
Assets held for sale	$	938	$	1,071
Liabilities
Short-term borrowings	$	—	$	1
Accounts payable	72		111
Accrued liabilities	148		258
Future pension and postretirement benefit obligations	3		3
Other long-term liabilities	38		48
Liabilities held for sale	$	261	$	421