HARTFORD, Conn., April 17 /PRNewswire-FirstCall/ -- United Technologies
Corp. (NYSE: UTX) today reported first quarter 2008 earnings per share of
$1.03 and net income of $1.0 billion, up 26 percent and 22 percent,
respectively, over the year ago first quarter. Results for the current
quarter include a $0.02 per share impact for restructuring costs. In 2007,
results included a $0.07 per share impact for the Otis European Union
Commission fine, net of related reserves, restructuring charges, and
one-time favorable items. Excluding restructuring and other one-time items
in both periods, earnings per share grew 18 percent year over year.
First quarter consolidated revenues increased 12 percent to $13.7
billion, including 7 percent organic growth. Foreign currency translation
and acquisitions accounted for the remainder of the growth.
"We are pleased with this solid start to the year and confident the
geographic and business balance of the UTC portfolio will continue to
deliver superior performance. This quarter's results are further evidence
that our business model, with its focus on global growth through market
leading franchises and cost reduction through the implementation of the ACE
operating system, can deliver solid results even in a softening economic
environment," said Louis Chenevert, UTC President and Chief Executive
Officer.
Although there were some early signs of moderating growth in the U.S.
and several European countries, UTC's commercial construction new equipment
orders were generally up in the quarter. Consumer markets in the U.S.
remain weak, impacting the residential businesses of both Carrier and UTC
Fire & Security. Commercial aerospace markets remain solid. Backlog
continued to expand in all six businesses reaching $60 billion at quarter
end.
"We remain confident in the full year revenue and earnings guidance for
each of our businesses and for UTC overall. Revenues are expected to grow
to $59 billion with earnings per share in the range of $4.65 to $4.85, or 9
percent to 14 percent over the prior year. As we look to the back half of
the year, we continue to adjust our operations in anticipation of the
uncertain economic environment," Chenevert added.
Cash flow from operations was $888 million and capital expenditures
were $237 million for the quarter. Share repurchase totaled $801 million
for the first three months of the year.
"Cash flow from operations less capital expenditures was below net
income for the quarter. Inventories grew seasonally at Carrier and remain
high in the aerospace businesses where backlogs continue to expand. We
continue to expect cash flow from operations less capital expenditures to
meet or exceed net income for the full year," Chenevert continued.
The accompanying tables include information integral to assessing the
company's financial position, operating performance, and cash flow.
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.
This release includes "forward-looking statements" concerning expected
revenue, earnings and cash flow; anticipated benefits of UTC's
diversification and business model; and other matters. These matters are
subject to risks and uncertainties. Important factors that could cause
actual results to differ materially from those anticipated or implied in
forward looking statements include the health of the global economy;
strength of end market demand in building construction and in both the
commercial and defense segments of the aerospace industry; fluctuation in
commodity prices, interest rates, foreign currency exchange rates, and the
impact of weather conditions; and company- specific factors including the
availability and impact of acquisitions; the rate and ability to
effectively integrate these acquired businesses; the ability to achieve
cost reductions at planned levels; challenges in the design, development,
production and support of advanced technologies and new products and
services; delays and disruption in delivery of materials and services from
suppliers; labor disputes; and the outcome of legal proceedings. The level
of share repurchases may vary depending on the level of other investing
activities. For information identifying other important economic,
political, regulatory, legal, technological, competitive and other
uncertainties, see UTC's SEC filings as submitted from time to time,
including but not limited to, the information included in UTC's 10-K and
10-Q Reports under the headings "Business," "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and "Cautionary Note Concerning Factors that May Affect Future Results," as
well as the information included in UTC's Current Reports on Form 8-K.
Contact: John Moran, UTC
(860) 728-7062
UTC-IR
United Technologies Corporation
Condensed Consolidated Statement of Operations
Quarter Ended
March 31,
(Millions, except per share amounts) (Unaudited)
2008 2007
Revenues $ 13,701 $ 12,278
Cost and Expenses
Cost of goods and services sold 9,981 8,996
Research and development 411 382
Selling, general and administrative 1,635 1,396
Operating Profit 1,674 1,504
Interest expense 165 150
Income before income taxes and minority interests 1,509 1,354
Income taxes 430 442
Minority interests 79 93
Net Income $ 1,000 $ 819
Net Earnings Per Share of Common Stock
Basic $ 1.05 $ 0.85
Diluted $ 1.03 $ 0.82
Average Shares
Basic 952 968
Diluted 975 993
As described on the following pages, consolidated results for the
quarters ended March 31, 2008 and 2007 include non-recurring items,
restructuring and related charges.
See accompanying Notes to Condensed Consolidated Financial Statements.
United Technologies Corporation
Segment Revenues and Operating Profit
Quarter Ended
March 31,
(Millions) (Unaudited)
2008 2007
Revenues
Otis $ 3,057 $ 2,728
Carrier 3,409 3,130
UTC Fire & Security 1,598 1,246
Pratt & Whitney 3,207 2,767
Hamilton Sundstrand 1,461 1,313
Sikorsky 1,023 1,006
Segment Revenues 13,755 12,190
Eliminations and other (54) 88
Consolidated Revenues $ 13,701 $ 12,278
Operating Profit
Otis $ 580 $ 574
Carrier 248 213
UTC Fire & Security 115 86
Pratt & Whitney 526 490
Hamilton Sundstrand 229 218
Sikorsky 82 73
Segment Operating Profit 1,780 1,654
Eliminations and other (9) (63)
General corporate expenses (97) (87)
Consolidated Operating Profit $ 1,674 $ 1,504
As described on the following pages, consolidated results for the
quarters ended March 31, 2008 and 2007 include non-recurring items,
restructuring and related charges.
United Technologies Corporation
Consolidated Operating Profit
Consolidated operating profit for the quarters ended March 31, 2008 and
2007 includes restructuring and related charges as follows:
Quarter Ended
March 31,
(Unaudited)
2008 2007
Otis $ 2 $ (2)
Carrier 11 12
UTC Fire & Security 6 2
Pratt & Whitney 14 20
Hamilton Sundstrand 1 6
Sikorsky - (3)
Total Restructuring and Related Charges $ 34 $ 35
Consolidated results for the quarter ended March 31, 2007 include the
following non-recurring items.
Q1 - 2007
-- Otis: Segment results include an $84 million gain from the sale of
land. The consolidated operating results include taxes related to the
gain of approximately $29 million in addition to an approximately $27
million charge for the minority partner's interest in the gain. The
resulting impact to consolidated net income is approximately $28
million.
-- Pratt & Whitney: Approximately $40 million gain at Pratt & Whitney
from a contract termination.
-- Eliminations and Other: A $216 million loss recorded in connection
with the European Union commission fine.
-- Eliminations and Other: A $151 million gain from the sale of
marketable securities.
In the first quarter, the net impact of the above items ($0.05 per
share), together with $35 million of pre-tax restructuring and related
charges ($0.02 per share), had a $0.07 adverse impact to earnings per
share.
United Technologies Corporation
Condensed Consolidated Balance Sheet
March 31, December 31,
2008 2007
(Millions) (Unaudited) (Unaudited)
Assets
Cash and cash equivalents $ 3,139 $ 2,904
Accounts receivable, net 9,558 8,844
Inventories and contracts in progress, net 9,075 8,101
Other current assets 2,144 2,222
Total Current Assets 23,916 22,071
Fixed assets, net 6,477 6,296
Goodwill, net 16,415 16,120
Intangible assets, net 3,862 3,757
Other assets 6,383 6,331
Total Assets $ 57,053 $ 54,575
Liabilities and Shareowners' Equity
Short-term debt $ 2,003 $ 1,133
Accounts payable 5,503 5,059
Accrued liabilities 12,099 11,277
Total Current Liabilities 19,605 17,469
Long-term debt 8,014 8,015
Other liabilities 6,864 6,824
Total Liabilities 34,483 32,308
Minority interest in subsidiary companies 984 912
Shareowners' Equity:
Common Stock 10,498 10,358
Treasury Stock (12,157) (11,338)
Retained Earnings 22,440 21,751
Accumulated other non-shareowners' changes
in equity 805 584
21,586 21,355
Total Liabilities and Shareowners' Equity $ 57,053 $ 54,575
Debt Ratios:
Debt to total capitalization 32% 30%
Net debt to net capitalization 24% 23%
United Technologies Corporation
Condensed Consolidated Statement of Cash Flows
Quarter Ended
March 31,
(Millions) (Unaudited)
2008 2007
Operating Activities
Net Income $ 1,000 $ 819
Adjustments to reconcile net income to net cash
flows provided by operating activities:
Depreciation and amortization 319 278
Deferred income taxes and minority interest 41 (57)
Stock compensation cost 58 54
Changes in working capital (481) (277)
Other, net (49) (364)
Net Cash Provided by Operating Activities 888 453
Investing Activities
Capital expenditures (237) (208)
Acquisitions and disposal of businesses, net (126) (110)
Other, net (69) 158
Net Cash Used in Investing Activities (432) (160)
Financing Activities
Increase in borrowings, net 862 286
Dividends paid on Common Stock (293) (245)
Repurchase of Common Stock (801) (500)
Other, net (67) 82
Net Cash Used in Financing Activities (299) (377)
Effect of foreign exchange rates 78 19
Net increase (decrease) in cash
and cash equivalents 235 (65)
Cash and cash equivalents - beginning of period 2,904 2,546
Cash and cash equivalents - end of period $ 3,139 $ 2,481
United Technologies Corporation
Free Cash Flow Reconciliation
Quarter Ended
(Millions) March 31, 2008 March 31, 2007
(unaudited) (unaudited)
Net income $ 1,000 $ 819
Depreciation and amortization 319 278
Change in working capital (481) (277)
Other 50 (367)
Cash flow from operating activities 888 453
Cash flow from operating activities
as a percentage of net income 89% 55%
Capital expenditures (237) (208)
Capital expenditures as a percentage
of net income (24%) (25%)
Free cash flow $ 651 $ 245
Free cash flow as a percentage of
net income 65% 30%
Free cash flow, which represents cash flow from operations less capital
expenditures, is the principal cash performance measure used by the
Company. Management believes free cash flow provides a relevant measure of
liquidity and a useful basis for assessing the Corporation's ability to
fund its activities, including the financing of acquisitions, debt service,
repurchases of the Corporation's Common Stock and distribution of earnings
to shareholders. Others 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 above.
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 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. Non-recurring items
that are not included in organic growth in 2007 include an $84 million
gain at Otis from the sale of land (See Note 3 below), a $40 million
gain at Pratt & Whitney from a contract termination, and $151 million
from the sale of marketable securities, and a $216 million loss
recorded in connection with the EU commission fine during the first
quarter.
(3) Otis segment results for the first quarter for 2007 include an $84
million gain from the sale of land. The consolidated operating results
include taxes related to the gain of approximately $29 million in
addition to an approximately $27 million charge for the minority
partner's interest in the gain. The resulting impact to consolidated
net income is approximately $28 million.
SOURCE United Technologies Corp.
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Related links:
http://www.utc.com
http://www.prnewswire.com/comp/913919.html /
CONTACT:
John Moran of UTC, +1-860-728-7062
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