FARMINGTON, Conn., Jan. 25, 2017 /PRNewswire/ -- United
Technologies Corp. (NYSE: UTX) today reported fourth quarter and full year 2016 results. All results in this release
reflect continuing operations unless otherwise noted.
"In 2016, UTC delivered solid financial results with adjusted earnings just above the top end of
our expectations," said UTC Chairman and Chief Executive Officer Gregory Hayes. "UTC also realized
significant operational achievements. Our aerospace businesses supported the entry into service of the A320neo and CSeries
programs, our Climate, Controls & Security business introduced over 100 new products to enhance future growth, and Otis
increased its global segment share for new equipment orders."
Hayes continued, "We remain confident in the 2017 expectations we laid out in December. Despite an uncertain global macro
environment, our growing aerospace backlog and strategic investments in the commercial businesses position us well to generate
higher organic growth in 2017, and we remain on track to our 2020 targets," Hayes added. "UTC remains focused on innovation for
growth, execution, structural cost reduction, and disciplined capital allocation."
Full year 2016 GAAP EPS of $6.13 was up 35 percent versus the prior year. 2016 results included
$0.48 of net restructuring and other significant items, as compared with $1.77 in 2015. Adjusted EPS of $6.61 increased 5 percent year over year.
Full year sales of $57.2 billion increased by 2 percent, as 2 points of organic sales growth and
1 point of net acquisitions growth were partially offset by 1 point of adverse foreign exchange. Net income for the year
was $5.1 billion, up 27 percent versus the prior year. Cash flow from operations for the year was
$6.4 billion (127 percent of net income attributable to common shareholders) and capital
expenditures were $1.7 billion. Free cash flow of $4.7 billion in the
year was 93 percent of net income attributable to common shareowners.
Fourth quarter sales of $14.7 billion were up 3 percent over the prior year. GAAP EPS was
$1.26 (up from ($0.30) in the fourth quarter of 2015) and included
30 cents of net restructuring and other significant items. Adjusted EPS of $1.56 was up 2 percent versus the prior year.
In the fourth quarter, Otis new equipment orders increased 3 percent versus the prior year at constant currency, including
China where new equipment orders were flat. Equipment orders at UTC Climate, Controls
& Security increased by 2 percent. Commercial aftermarket sales were down 6 percent at Pratt & Whitney, and were up
3 percent at UTC Aerospace Systems.
UTC affirms its 2017 outlook and anticipates:
- Adjusted EPS of $6.30 to $6.60*;
- Total sales of $57.5 to $59 billion, with year over year growth of 1 to 3 percent including
organic sales growth of 2 to 4 percent*;
- Free cash flow in the range of 90 to 100 percent* of net income attributable to common shareowners;
- Share repurchases of $3.5 billion in 2017; and
- A $1 billion to $2 billion 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/fmvzm34a, 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, 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 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) the timing and scope of future repurchases of our common stock, which may be suspended at any time due to various
factors, including 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 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
|
United Technologies Corporation
Condensed Consolidated Statement of Operations
|
|
|
|
Quarter Ended December 31,
|
|
Year Ended December 31,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Millions, except per share amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net Sales
|
$
|
14,659
|
|
|
$
|
14,300
|
|
|
$
|
57,244
|
|
|
$
|
56,098
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
Cost of products and services sold
|
10,723
|
|
|
10,653
|
|
|
41,460
|
|
|
40,431
|
|
|
Research and development
|
626
|
|
|
611
|
|
|
2,337
|
|
|
2,279
|
|
|
Selling, general and administrative
|
1,856
|
|
|
1,625
|
|
|
6,060
|
|
|
5,886
|
|
|
Total Costs and Expenses
|
13,205
|
|
|
12,889
|
|
|
49,857
|
|
|
48,596
|
|
|
Other income (expense), net
|
185
|
|
|
(1,019)
|
|
|
785
|
|
|
(211)
|
|
|
Operating profit
|
1,639
|
|
|
392
|
|
|
8,172
|
|
|
7,291
|
|
|
Interest expense, net
|
366
|
|
|
206
|
|
|
1,039
|
|
|
824
|
|
|
Income from continuing operations before income taxes
|
1,273
|
|
|
186
|
|
|
7,133
|
|
|
6,467
|
|
|
Income tax expense
|
149
|
|
|
363
|
|
|
1,697
|
|
|
2,111
|
|
|
Income (loss) from continuing operations
|
1,124
|
|
|
(177)
|
|
|
5,436
|
|
|
4,356
|
|
|
Less: Noncontrolling interest in subsidiaries' earnings from continuing
operations
|
100
|
|
|
79
|
|
|
371
|
|
|
360
|
|
|
Income (loss) from continuing operations attributable to common
shareowners
|
1,024
|
|
|
(256)
|
|
|
5,065
|
|
|
3,996
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
(Loss) income from operations
|
(1)
|
|
|
(32)
|
|
|
1
|
|
|
252
|
|
|
Gain on disposal
|
2
|
|
|
6,108
|
|
|
13
|
|
|
6,042
|
|
|
Income tax expense
|
(12)
|
|
|
(2,544)
|
|
|
(24)
|
|
|
(2,684)
|
|
|
(Loss) income from discontinued operations
|
(11)
|
|
|
3,532
|
|
|
(10)
|
|
|
3,610
|
|
|
Less: Noncontrolling interest in subsidiaries' earnings from discontinued
operations
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(2)
|
|
|
(Loss) income from discontinued operations attributable to common
shareowners
|
(11)
|
|
|
3,534
|
|
|
(10)
|
|
|
3,612
|
|
|
Net income attributable to common shareowners
|
$
|
1,013
|
|
|
$
|
3,278
|
|
|
$
|
5,055
|
|
|
$
|
7,608
|
|
|
Earnings (Loss) Per Share of Common Stock - Basic:
|
|
|
|
|
|
|
|
|
From continuing operations attributable to common shareowners
|
$
|
1.28
|
|
|
$
|
(0.30)
|
|
|
$
|
6.19
|
|
|
$
|
4.58
|
|
|
From discontinued operations attributable to common shareowners
|
(0.01)
|
|
|
4.16
|
|
|
(0.01)
|
|
|
4.14
|
|
|
Earnings (Loss) Per Share of Common Stock - Diluted:
|
|
|
|
|
|
|
|
|
From continuing operations attributable to common shareowners
|
$
|
1.26
|
|
|
$
|
(0.30)
|
|
|
$
|
6.13
|
|
|
$
|
4.53
|
|
|
From discontinued operations attributable to common shareowners
|
(0.01)
|
|
|
4.16
|
|
|
(0.01)
|
|
|
4.09
|
|
|
Weighted Average Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic shares
|
802
|
|
|
850
|
|
|
818
|
|
|
873
|
|
|
Diluted shares
|
810
|
|
|
850
|
|
|
826
|
|
|
883
|
|
As described on the following pages, consolidated results for the quarters and years ended December 31,
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 December 31,
|
|
Year Ended December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net Sales
|
|
|
|
|
|
|
|
|
Otis
|
$
|
3,063
|
|
|
$
|
3,094
|
|
|
$
|
11,893
|
|
|
$
|
11,980
|
|
|
UTC Climate, Controls & Security
|
4,249
|
|
|
4,122
|
|
|
16,851
|
|
|
16,707
|
|
|
Pratt & Whitney
|
3,992
|
|
|
3,839
|
|
|
14,894
|
|
|
14,082
|
|
|
UTC Aerospace Systems
|
3,598
|
|
|
3,457
|
|
|
14,465
|
|
|
14,094
|
|
|
Segment Sales
|
14,902
|
|
|
14,512
|
|
|
58,103
|
|
|
56,863
|
|
|
Eliminations and other
|
(243)
|
|
|
(212)
|
|
|
(859)
|
|
|
(765)
|
|
|
Consolidated Net Sales
|
$
|
14,659
|
|
|
$
|
14,300
|
|
|
$
|
57,244
|
|
|
$
|
56,098
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
|
|
|
|
|
|
|
|
|
Otis
|
$
|
516
|
|
|
$
|
542
|
|
|
$
|
2,147
|
|
|
$
|
2,338
|
|
|
UTC Climate, Controls & Security
|
677
|
|
|
613
|
|
|
2,956
|
|
|
2,936
|
|
|
Pratt & Whitney
|
409
|
|
|
(464)
|
|
|
1,545
|
|
|
861
|
|
|
UTC Aerospace Systems
|
578
|
|
|
167
|
|
|
2,298
|
|
|
1,888
|
|
|
Segment Operating Profit
|
2,180
|
|
|
858
|
|
|
8,946
|
|
|
8,023
|
|
|
Eliminations and other
|
(415)
|
|
|
(333)
|
|
|
(368)
|
|
|
(268)
|
|
|
General corporate expenses
|
(126)
|
|
|
(133)
|
|
|
(406)
|
|
|
(464)
|
|
|
Consolidated Operating Profit
|
$
|
1,639
|
|
|
$
|
392
|
|
|
$
|
8,172
|
|
|
$
|
7,291
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Profit Margin
|
|
|
|
|
|
|
|
|
Otis
|
16.8
|
%
|
|
17.5
|
%
|
|
18.1
|
%
|
|
19.5
|
%
|
|
UTC Climate, Controls & Security
|
15.9
|
%
|
|
14.9
|
%
|
|
17.5
|
%
|
|
17.6
|
%
|
|
Pratt & Whitney
|
10.2
|
%
|
|
(12.1)
|
%
|
|
10.4
|
%
|
|
6.1
|
%
|
|
UTC Aerospace Systems
|
16.1
|
%
|
|
4.8
|
%
|
|
15.9
|
%
|
|
13.4
|
%
|
|
Segment Operating Profit Margin
|
14.6
|
%
|
|
5.9
|
%
|
|
15.4
|
%
|
|
14.1
|
%
|
As described on the following pages, consolidated results for the quarters and years ended December 31,
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 December 31,
|
|
Year Ended December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
|
In Millions - Income (Expense)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net Sales
|
$
|
14,659
|
|
|
$
|
14,300
|
|
|
$
|
57,244
|
|
|
$
|
56,098
|
|
|
Significant non-recurring and non-operational items included in Net
Sales:
|
|
|
|
|
|
|
|
|
Pratt & Whitney - charge resulting from ongoing customer contract
negotiations
|
—
|
|
|
(142)
|
|
|
(184)
|
|
|
(142)
|
|
|
UTC Aerospace Systems - charge resulting from customer contract
negotiations
|
—
|
|
|
(210)
|
|
|
—
|
|
|
(210)
|
|
|
Adjusted Net Sales
|
$
|
14,659
|
|
|
$
|
14,652
|
|
|
$
|
57,428
|
|
|
$
|
56,450
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to common
shareowners
|
$
|
1,024
|
|
|
$
|
(256)
|
|
|
$
|
5,065
|
|
|
$
|
3,996
|
|
|
Restructuring Costs included in Operating Profit:
|
|
|
|
|
|
|
|
|
Otis
|
(18)
|
|
|
(19)
|
|
|
(59)
|
|
|
(51)
|
|
|
UTC Climate, Controls & Security
|
6
|
|
|
(41)
|
|
|
(65)
|
|
|
(108)
|
|
|
Pratt & Whitney
|
(61)
|
|
|
(68)
|
|
|
(111)
|
|
|
(105)
|
|
|
UTC Aerospace Systems
|
(17)
|
|
|
(47)
|
|
|
(49)
|
|
|
(111)
|
|
|
Eliminations and other
|
1
|
|
|
(16)
|
|
|
(6)
|
|
|
(21)
|
|
|
(89)
|
|
|
(191)
|
|
|
(290)
|
|
|
(396)
|
|
|
Significant non-recurring and non-operational items included in
Operating Profit:
|
|
|
|
|
|
|
|
|
UTC Climate, Controls & Security
|
(9)
|
|
|
(5)
|
|
|
(32)
|
|
|
121
|
|
|
Pratt & Whitney
|
—
|
|
|
(947)
|
|
|
(95)
|
|
|
(947)
|
|
|
UTC Aerospace Systems
|
—
|
|
|
(356)
|
|
|
—
|
|
|
(356)
|
|
|
Eliminations and other
|
(423)
|
|
|
(264)
|
|
|
(423)
|
|
|
(264)
|
|
|
(432)
|
|
|
(1,572)
|
|
|
(550)
|
|
|
(1,446)
|
|
|
Total impact on Consolidated Operating Profit
|
(521)
|
|
|
(1,763)
|
|
|
(840)
|
|
|
(1,842)
|
|
|
Significant non-recurring and non-operational items included in Interest
Expense, Net
|
(142)
|
|
|
—
|
|
|
(140)
|
|
|
—
|
|
|
Tax effect of restructuring and significant non-recurring and
non-operational items above
|
242
|
|
|
551
|
|
|
354
|
|
|
617
|
|
|
Significant non-recurring and non-operational items included in Income
Tax Expense
|
175
|
|
|
(342)
|
|
|
231
|
|
|
(342)
|
|
|
Less: Impact on Net Income from Continuing Operations Attributable to
Common Shareowners
|
(246)
|
|
|
(1,554)
|
|
|
(395)
|
|
|
(1,567)
|
|
|
Adjusted income from continuing operations attributable to common
shareowners
|
$
|
1,270
|
|
|
$
|
1,298
|
|
|
$
|
5,460
|
|
|
$
|
5,563
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share from Continuing Operations
|
$
|
1.26
|
|
|
$
|
(0.30)
|
|
|
$
|
6.13
|
|
|
$
|
4.53
|
|
|
Impact on Diluted Earnings Per Share from Continuing Operations
|
(0.30)
|
|
|
(1.83)
|
|
|
(0.48)
|
|
|
(1.77)
|
|
|
Adjusted Diluted Earnings Per Share from Continuing
Operations
|
$
|
1.56
|
|
|
$
|
1.53
|
|
|
$
|
6.61
|
|
|
$
|
6.30
|
|
Details of the significant non-recurring and non-operational items included within operating profit for the quarters and years
ended December 31, 2016 and 2015 above are as follows:
|
Quarter Ended December 31,
|
|
Year Ended December 31,
|
|
(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
|
$
|
(9)
|
|
|
$
|
(5)
|
|
|
$
|
(32)
|
|
|
$
|
(5)
|
|
|
Gain on fair value adjustment on acquisition of controlling interest in a
joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|
Pratt & Whitney
|
|
|
|
|
|
|
|
|
Charge related to a research and development support agreement with the
Canadian government
|
—
|
|
|
(867)
|
|
|
—
|
|
|
(867)
|
|
|
Charge resulting from ongoing customer contract negotiations
|
—
|
|
|
(80)
|
|
|
(95)
|
|
|
(80)
|
|
|
UTC Aerospace Systems
|
|
|
|
|
|
|
|
|
Charge resulting from customer contract negotiations
|
—
|
|
|
(295)
|
|
|
—
|
|
|
(295)
|
|
|
Charge for impairment of assets held for sale
|
—
|
|
|
(61)
|
|
|
—
|
|
|
(61)
|
|
|
Eliminations & other
|
|
|
|
|
|
|
|
|
Pension settlement charge resulting from defined benefit plan de-risking
actions
|
(423)
|
|
|
—
|
|
|
(423)
|
|
|
—
|
|
|
Charge for pending and future asbestos-related claims
|
—
|
|
|
(237)
|
|
|
—
|
|
|
(237)
|
|
|
Charge from agreement with a state taxing authority for monetization of tax
credits
|
—
|
|
|
(27)
|
|
|
—
|
|
|
(27)
|
|
|
$
|
(432)
|
|
|
$
|
(1,572)
|
|
|
$
|
(550)
|
|
|
$
|
(1,446)
|
|
Details of the significant non-recurring and non-operational items included within interest and income tax of continuing
operations for the quarters and years ended December 31, 2016 and 2015 above are as follows:
|
Quarter Ended December 31,
|
|
Year Ended December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
|
In Millions - Income (Expense)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Significant non-recurring and non-operational items included in Interest
Expense, Net
|
|
|
|
|
|
|
|
|
Net extinguishment loss from early redemption of debt
|
$
|
(164)
|
|
|
$
|
—
|
|
|
$
|
(164)
|
|
|
$
|
—
|
|
|
Favorable pre-tax interest adjustments, primarily related to 2011 - 2012
tax years
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
Favorable pre-tax interest adjustments, primarily related to Goodrich
Corporation's 2011 - 2012 tax years
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
$
|
(142)
|
|
|
$
|
—
|
|
|
$
|
(140)
|
|
|
$
|
—
|
|
|
Significant non-recurring and non-operational items included in Income
Tax Expense
|
|
|
|
|
|
|
|
|
Favorable income tax adjustments, primarily related to 2011 - 2012 tax
years
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
Favorable income tax adjustments related to reductions in French tax
laws
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
Favorable income tax adjustments, primarily related to Goodrich
Corporation's 2011 - 2012 tax years
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
Unfavorable income tax accruals related to the repatriation of foreign
earnings
|
—
|
|
|
(274)
|
|
|
—
|
|
|
(274)
|
|
|
Unfavorable income tax accruals related to changes in tax laws
|
—
|
|
|
(68)
|
|
|
—
|
|
|
(68)
|
|
|
$
|
175
|
|
|
$
|
(342)
|
|
|
$
|
231
|
|
|
$
|
(342)
|
|
|
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 December 31,
|
|
Year Ended December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Adjusted Net Sales
|
|
|
|
|
|
|
|
|
Otis
|
$
|
3,063
|
|
|
$
|
3,094
|
|
|
$
|
11,893
|
|
|
$
|
11,980
|
|
|
UTC Climate, Controls & Security
|
4,249
|
|
|
4,122
|
|
|
16,851
|
|
|
16,707
|
|
|
Pratt & Whitney
|
3,992
|
|
|
3,981
|
|
|
15,078
|
|
|
14,224
|
|
|
UTC Aerospace Systems
|
3,598
|
|
|
3,667
|
|
|
14,465
|
|
|
14,304
|
|
|
Segment Sales
|
14,902
|
|
|
14,864
|
|
|
58,287
|
|
|
57,215
|
|
|
Eliminations and other
|
(243)
|
|
|
(212)
|
|
|
(859)
|
|
|
(765)
|
|
|
Adjusted Consolidated Net Sales
|
$
|
14,659
|
|
|
$
|
14,652
|
|
|
$
|
57,428
|
|
|
$
|
56,450
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Profit
|
|
|
|
|
|
|
|
|
Otis
|
$
|
534
|
|
|
$
|
561
|
|
|
$
|
2,206
|
|
|
$
|
2,389
|
|
|
UTC Climate, Controls & Security
|
680
|
|
|
659
|
|
|
3,053
|
|
|
2,923
|
|
|
Pratt & Whitney
|
470
|
|
|
551
|
|
|
1,751
|
|
|
1,913
|
|
|
UTC Aerospace Systems
|
595
|
|
|
570
|
|
|
2,347
|
|
|
2,355
|
|
|
Segment Operating Profit
|
2,279
|
|
|
2,341
|
|
|
9,357
|
|
|
9,580
|
|
|
Eliminations and other
|
7
|
|
|
(58)
|
|
|
60
|
|
|
8
|
|
|
General corporate expenses
|
(126)
|
|
|
(128)
|
|
|
(405)
|
|
|
(455)
|
|
|
Adjusted Consolidated Operating Profit
|
$
|
2,160
|
|
|
$
|
2,155
|
|
|
$
|
9,012
|
|
|
$
|
9,133
|
|
|
|
|
|
|
|
|
|
|
Adjusted Segment Operating Profit Margin
|
|
|
|
|
|
|
|
|
Otis
|
17.4
|
%
|
|
18.1
|
%
|
|
18.5
|
%
|
|
19.9
|
%
|
|
UTC Climate, Controls & Security
|
16.0
|
%
|
|
16.0
|
%
|
|
18.1
|
%
|
|
17.5
|
%
|
|
Pratt & Whitney
|
11.8
|
%
|
|
13.8
|
%
|
|
11.6
|
%
|
|
13.4
|
%
|
|
UTC Aerospace Systems
|
16.5
|
%
|
|
15.5
|
%
|
|
16.2
|
%
|
|
16.5
|
%
|
|
Adjusted Segment Operating Profit Margin
|
15.3
|
%
|
|
15.7
|
%
|
|
16.1
|
%
|
|
16.7
|
%
|
|
United Technologies Corporation
Components of Changes in Net Sales
|
|
|
|
|
|
|
Quarter Ended December 31, 2016 Compared with Quarter Ended December 31,
2015
|
|
|
|
|
|
|
|
|
|
|
|
Factors Contributing to Total % Change in Net Sales
|
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
|
Otis
|
|
—
|
|
(1)%
|
|
—
|
|
—
|
|
(1)%
|
|
UTC Climate, Controls & Security
|
|
—
|
|
(2)%
|
|
5%
|
|
—
|
|
3%
|
|
Pratt & Whitney
|
|
—
|
|
1%
|
|
(1)%
|
|
4%
|
|
4%
|
|
UTC Aerospace Systems
|
|
—
|
|
(1)%
|
|
(1)%
|
|
6%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
—
|
|
(1)%
|
|
2%
|
|
2%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016 Compared with Year Ended December 31,
2015
|
|
|
|
|
|
|
|
|
|
|
|
Factors Contributing to Total % Change in Net Sales
|
|
|
Organic
|
|
FX
Translation
|
|
Acquisitions /
Divestitures, net
|
|
Other
|
|
Total
|
|
Otis
|
|
1%
|
|
(2)%
|
|
—
|
|
—
|
|
(1)%
|
|
UTC Climate, Controls & Security
|
|
(1)%
|
|
(1)%
|
|
3%
|
|
—
|
|
1%
|
|
Pratt & Whitney
|
|
6%
|
|
—
|
|
—
|
|
—
|
|
6%
|
|
UTC Aerospace Systems
|
|
2%
|
|
—
|
|
—
|
|
1%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
2%
|
|
(1)%
|
|
1%
|
|
—
|
|
2%
|
|
United Technologies Corporation
Condensed Consolidated Balance Sheet
|
|
|
December 31,
|
|
December 31,
|
|
2016
|
|
2015
|
|
(Millions)
|
(Unaudited)
|
|
(Unaudited)
|
|
Assets
|
|
|
|
|
Cash and cash equivalents
|
$
|
7,157
|
|
|
$
|
7,075
|
|
|
Accounts receivable, net
|
11,481
|
|
|
10,653
|
|
|
Inventories and contracts in progress, net
|
8,704
|
|
|
8,135
|
|
|
Other assets, current
|
1,208
|
|
|
843
|
|
|
Total Current Assets
|
28,550
|
|
|
26,706
|
|
|
Fixed assets, net
|
9,158
|
|
|
8,732
|
|
|
Goodwill
|
27,059
|
|
|
27,301
|
|
|
Intangible assets, net
|
15,684
|
|
|
15,603
|
|
|
Other assets
|
9,255
|
|
|
9,142
|
|
|
Total Assets
|
$
|
89,706
|
|
|
$
|
87,484
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
Short-term debt
|
$
|
2,204
|
|
|
$
|
1,105
|
|
|
Accounts payable
|
7,483
|
|
|
6,875
|
|
|
Accrued liabilities
|
12,219
|
|
|
14,638
|
|
|
Total Current Liabilities
|
21,906
|
|
|
22,618
|
|
|
Long-term debt
|
21,697
|
|
|
19,320
|
|
|
Other long-term liabilities
|
16,638
|
|
|
16,580
|
|
|
Total Liabilities
|
60,241
|
|
|
58,518
|
|
|
Redeemable noncontrolling interest
|
296
|
|
|
122
|
|
|
Shareowners' Equity:
|
|
|
|
|
Common Stock
|
17,190
|
|
|
15,928
|
|
|
Treasury Stock
|
(34,150)
|
|
|
(30,907)
|
|
|
Retained earnings
|
52,873
|
|
|
49,956
|
|
|
Accumulated other comprehensive loss
|
(8,334)
|
|
|
(7,619)
|
|
|
Total Shareowners' Equity
|
27,579
|
|
|
27,358
|
|
|
Noncontrolling interest
|
1,590
|
|
|
1,486
|
|
|
Total Equity
|
29,169
|
|
|
28,844
|
|
|
Total Liabilities and Equity
|
$
|
89,706
|
|
|
$
|
87,484
|
|
|
|
|
|
|
Debt Ratios:
|
|
|
|
|
Debt to total capitalization
|
45
|
%
|
|
41
|
%
|
|
Net debt to net capitalization
|
36
|
%
|
|
32
|
%
|
See accompanying Notes to Condensed Consolidated Financial Statements.
|
United Technologies Corporation
Condensed Consolidated Statement of Cash Flows
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Operating Activities of Continuing Operations:
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations
|
$
|
1,124
|
|
|
$
|
(177)
|
|
|
$
|
5,436
|
|
|
$
|
4,356
|
|
|
Adjustments to reconcile net income (loss) from continuing operations to
net cash flows provided by operating activities of continuing operations:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
506
|
|
|
462
|
|
|
1,962
|
|
|
1,863
|
|
|
Deferred income tax provision
|
125
|
|
|
218
|
|
|
398
|
|
|
662
|
|
|
Stock compensation cost
|
40
|
|
|
50
|
|
|
152
|
|
|
158
|
|
|
Change in working capital
|
(462)
|
|
|
890
|
|
|
(1,161)
|
|
|
(769)
|
|
|
Global pension contributions
|
(178)
|
|
|
(54)
|
|
|
(303)
|
|
|
(147)
|
|
|
Canadian government settlement
|
—
|
|
|
867
|
|
|
(237)
|
|
|
867
|
|
|
Other operating activities, net
|
690
|
|
|
447
|
|
|
165
|
|
|
(235)
|
|
|
Net cash flows provided by operating
activities of continuing operations
|
1,845
|
|
|
2,703
|
|
|
6,412
|
|
|
6,755
|
|
|
Investing Activities of Continuing Operations:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
(656)
|
|
|
(608)
|
|
|
(1,699)
|
|
|
(1,652)
|
|
|
Acquisitions and dispositions of businesses, net
|
(112)
|
|
|
(181)
|
|
|
(499)
|
|
|
(338)
|
|
|
Increase in collaboration intangible assets
|
(79)
|
|
|
(106)
|
|
|
(380)
|
|
|
(437)
|
|
|
Receipts from settlements of derivative contracts
|
278
|
|
|
13
|
|
|
249
|
|
|
160
|
|
|
Other investing activities, net
|
(42)
|
|
|
(276)
|
|
|
(180)
|
|
|
(527)
|
|
|
Net cash flows used in investing activities
of continuing operations
|
(611)
|
|
|
(1,158)
|
|
|
(2,509)
|
|
|
(2,794)
|
|
|
Financing Activities of Continuing Operations:
|
|
|
|
|
|
|
|
|
Issuance (repayment) of long-term debt, net
|
1,736
|
|
|
(24)
|
|
|
4,017
|
|
|
(20)
|
|
|
(Decrease) increase in short-term borrowings, net
|
(268)
|
|
|
(2,096)
|
|
|
(331)
|
|
|
795
|
|
|
Proceeds from Common Stock issuance - equity unit remarketing
|
—
|
|
|
—
|
|
|
—
|
|
|
1,100
|
|
|
Dividends paid on Common Stock
|
(508)
|
|
|
(541)
|
|
|
(2,069)
|
|
|
(2,184)
|
|
|
Repurchase of Common Stock
|
(1,726)
|
|
|
(6,000)
|
|
|
(2,254)
|
|
|
(10,000)
|
|
|
Other financing activities, net
|
(219)
|
|
|
(253)
|
|
|
(551)
|
|
|
(467)
|
|
|
Net cash flows used in financing activities
of continuing operations
|
(985)
|
|
|
(8,914)
|
|
|
(1,188)
|
|
|
(10,776)
|
|
|
Discontinued Operations:
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
(46)
|
|
|
(73)
|
|
|
(2,532)
|
|
|
(372)
|
|
|
Net cash provided by investing activities
|
—
|
|
|
9,066
|
|
|
6
|
|
|
9,000
|
|
|
Net cash used in financing activities
|
—
|
|
|
(8)
|
|
|
—
|
|
|
(9)
|
|
|
Net cash flows (used in) provided by
discontinued operations
|
(46)
|
|
|
8,985
|
|
|
(2,526)
|
|
|
8,619
|
|
|
Effect of foreign exchange rate changes on cash and cash
equivalents
|
(148)
|
|
|
(31)
|
|
|
(120)
|
|
|
(174)
|
|
|
Net increase in cash and cash
equivalents
|
55
|
|
|
1,585
|
|
|
69
|
|
|
1,630
|
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
7,134
|
|
|
5,535
|
|
|
7,120
|
|
|
5,490
|
|
|
Cash and cash equivalents of continuing operations, end of
period
|
7,189
|
|
|
7,120
|
|
|
7,189
|
|
|
7,120
|
|
|
Less: Restricted cash, included in Other assets
|
32
|
|
|
45
|
|
|
32
|
|
|
45
|
|
|
Cash and cash equivalents of continuing operations, end of
period
|
$
|
7,157
|
|
|
$
|
7,075
|
|
|
$
|
7,157
|
|
|
$
|
7,075
|
|
See accompanying Notes to Condensed Consolidated Financial Statements.
|
United Technologies Corporation
Free Cash Flow Reconciliation
|
|
|
Quarter Ended December 31,
|
|
(Unaudited)
|
|
(Millions)
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Net income attributable to common shareowners from continuing
operations
|
$
|
1,024
|
|
|
|
$
|
(256)
|
|
|
|
Net cash flows provided by operating activities of continuing
operations
|
$
|
1,845
|
|
|
|
$
|
2,703
|
|
|
|
Net cash flows provided by operating activities of continuing operations as
a percentage of net income attributable to common shareowners from continuing operations
|
|
180
|
%
|
|
|
(1,056)
|
%
|
|
Capital expenditures
|
(656)
|
|
|
|
(608)
|
|
|
|
Capital expenditures as a percentage of net income attributable to common
shareowners from continuing operations
|
|
(64)
|
%
|
|
|
238
|
%
|
|
Free cash flow from continuing operations
|
$
|
1,189
|
|
|
|
$
|
2,095
|
|
|
|
Free cash flow from continuing operations as a percentage of net income
attributable to common shareowners from continuing operations
|
|
116
|
%
|
|
|
(818)
|
%
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
(Unaudited)
|
|
(Millions)
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Net income attributable to common shareowners from continuing
operations
|
$
|
5,065
|
|
|
|
$
|
3,996
|
|
|
|
Net cash flows provided by operating activities of continuing
operations
|
$
|
6,412
|
|
|
|
$
|
6,755
|
|
|
|
Net cash flows provided by operating activities of continuing operations as
a percentage of net income attributable to common shareowners from continuing operations
|
|
127
|
%
|
|
|
169
|
%
|
|
Capital expenditures
|
(1,699)
|
|
|
|
(1,652)
|
|
|
|
Capital expenditures as a percentage of net income attributable to common
shareowners from continuing operations
|
|
(34)
|
%
|
|
|
(41)
|
%
|
|
Free cash flow from continuing operations
|
$
|
4,713
|
|
|
|
$
|
5,103
|
|
|
|
Free cash flow from continuing operations as a percentage of net income
attributable to common shareowners from continuing operations
|
|
93
|
%
|
|
|
128
|
%
|
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-full-year-2016-results-affirms-2017-outlook-300396300.html
SOURCE United Technologies Corp.