Delaware | 1-812 | 06-0570975 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Exhibit Description |
99 | Press release, dated October 25, 2016, issued by United Technologies Corporation. |
UNITED TECHNOLOGIES CORPORATION | ||
(Registrant) | ||
Date: October 25, 2016 | By: | /S/ AKHIL JOHRI |
Akhil Johri | ||
Executive Vice President & Chief Financial Officer |
Exhibit Number | Exhibit Description |
99 | Press release, dated October 25, 2016, issued by United Technologies Corporation. |
• | Sales of $14.4 billion were up 4 percent versus the prior year including 5 percent organic sales growth |
• | GAAP EPS of $1.74, up 8 percent versus the prior year |
• | Adjusted EPS of $1.76, up 5 percent versus the prior year |
• | Increases 2016 full year adjusted EPS and organic sales outlook* |
• | 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. |
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 |
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 | % |
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 |
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 | $ | — |
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 | % |
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% |
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 | % |
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 |
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 | % |