HARTFORD, Conn., July 17 /PRNewswire-FirstCall/ -- United Technologies
Corp. (NYSE: UTX) today reported second quarter 2008 earnings per share of
$1.32 and net income of $1.3 billion, up 14 percent and 11 percent,
respectively, over the year ago quarter. Results for the current quarter
include a $0.06 per share impact for restructuring costs as compared with a
$0.02 per share impact in the year ago quarter. Excluding restructuring
costs in both periods, earnings per share grew 17 percent year over year.
Second quarter consolidated revenues increased 13 percent to $15.7
billion, including 6 percent organic growth. Foreign currency translation
accounted for 5 points of the revenue growth and $0.04 of the earnings per
share increase. Acquisitions accounted for the remainder of the revenue
growth.
"UTC segment operating profit grew 12 percent in the quarter, with
exceptional performance at Otis, UTC Fire & Security, and Sikorsky," said
Louis Chenevert, UTC President and Chief Executive Officer. "Based on the
strong performance in the first half of the year, we are increasing our
full year revenue and earnings per share guidance. We now expect revenue of
more than $60 billion and earnings per share of $4.80 - $4.95, up from the
prior guidance of $4.65 - $4.85 and 12 to 16 percent above 2007 earnings
per share.
"While the challenges in the world's economies we saw at the outset of
the year are materializing, especially with higher oil prices impacting the
airlines and the U.S. economy generally, we remain confident in our ability
to deliver on this increased guidance given the balance across UTC's
businesses and the strength in our backlogs," Chenevert said.
"New equipment orders at Otis grew 23 percent in the quarter, including
double digit growth in North America, Europe and China, while Carrier's
commercial HVAC new equipment orders grew double digits globally. After
strong orders through the early months of 2008, we are seeing some
moderation in our commercial aerospace aftermarkets, with spare parts
orders in the second quarter slightly below sales at both Pratt & Whitney
and Hamilton Sundstrand."
Chenevert added, "We continue to position the company for solid
earnings growth in 2009 and beyond. We now expect to spend approximately
$300 million on restructuring in 2008, substantially above the $150 million
anticipated at the beginning of the year. We believe these actions,
together with the balance of UTC's businesses, will help us outperform."
Cash flow from operations was $1.4 billion and capital expenditures
were $305 million for the quarter. Share repurchase totaled $719 million in
the quarter and more than $1.5 billion in the first half. UTC anticipates
continuing opportunistic repurchases over the balance of the year and
potentially beyond the company's guidance of $2.0 billion for 2008.
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 Six Months Ended
(Millions, except per June 30, June 30,
share amounts) (Unaudited) (Unaudited)
2008 2007 2008 2007
Revenues $15,667 $13,904 $29,368 $26,182
Cost and Expenses
Cost of goods and
services sold 11,359 10,129 21,340 19,125
Research and
development 434 416 845 798
Selling, general
and administrative 1,775 1,494 3,410 2,890
Operating Profit 2,099 1,865 3,773 3,369
Interest expense 176 163 341 313
Income before income
taxes and minority
interests 1,923 1,702 3,432 3,056
Income taxes 548 479 978 921
Minority interests 100 75 179 168
Net Income $1,275 $1,148 $2,275 $1,967
Net Earnings Per Share
of Common Stock
Basic $1.35 $1.19 $2.40 $2.03
Diluted $1.32 $1.16 $2.34 $1.98
Average Shares
Basic 944 966 948 967
Diluted 966 990 971 991
As described on the following pages, consolidated results for the
quarters and six months ended June 30, 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 Six Months Ended
June 30, June 30,
(Millions) (Unaudited) (Unaudited)
2008 2007 2008 2007
Revenues
Otis $3,404 $2,858 $6,461 $5,586
Carrier 4,356 4,055 7,765 7,185
UTC Fire & Security 1,738 1,349 3,336 2,595
Pratt & Whitney 3,292 3,108 6,499 5,875
Hamilton Sundstrand 1,650 1,404 3,111 2,717
Sikorsky 1,307 1,198 2,330 2,204
Segment Revenues 15,747 13,972 29,502 26,162
Eliminations and other (80) (68) (134) 20
Consolidated Revenues $15,667 $13,904 $29,368 $26,182
Operating Profit
Otis $671 $532 $1,251 $1,106
Carrier 487 489 735 702
UTC Fire & Security 126 101 241 187
Pratt & Whitney 546 522 1,072 1,012
Hamilton Sundstrand 280 246 509 464
Sikorsky 111 87 193 160
Segment Operating
Profit 2,221 1,977 4,001 3,631
Eliminations and other (13) (20) (22) (83)
General corporate
expenses (109) (92) (206) (179)
Consolidated Operating
Profit $2,099 $1,865 $3,773 $3,369
As described on the following pages, consolidated results for the
quarters and six months ended June 30, 2008 and 2007 include non-recurring
items, restructuring and related charges.
United Technologies Corporation
Consolidated Operating Profit
Consolidated operating profit for the quarters and six months ended
June 30, 2008 and 2007 includes restructuring and related charges as
follows:
Quarter Ended Six Months Ended
June 30, June 30,
(Unaudited) (Unaudited)
2008 2007 2008 2007
Otis $4 $7 $6 $5
Carrier 46 1 57 13
UTC Fire & Security 27 4 33 6
Pratt & Whitney 17 7 31 27
Hamilton Sundstrand - 6 1 12
Sikorsky - - - (3)
Total Restructuring
and Related Charges $94 $25 $128 $60
Consolidated results for the quarter and six months ended June 30, 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
June 30, December 31,
2008 2007
(Millions) (Unaudited) (Unaudited)
Assets
Cash and cash equivalents $3,442 $2,904
Accounts receivable, net 10,103 8,844
Inventories and contracts in progress, net 9,082 8,101
Other current assets 2,152 2,222
Total Current Assets 24,779 22,071
Fixed assets, net 6,550 6,296
Goodwill, net 16,619 16,120
Intangible assets, net 3,847 3,757
Other assets 6,691 6,331
Total Assets $58,486 $54,575
Liabilities and Shareowners' Equity
Short-term debt $2,624 $1,133
Accounts payable 5,577 5,059
Accrued liabilities 12,304 11,277
Total Current Liabilities 20,505 17,469
Long-term debt 8,106 8,015
Other liabilities 7,006 6,824
Total Liabilities 35,617 32,308
Minority interest in subsidiary companies 957 912
Shareowners' Equity:
Common Stock 10,657 10,358
Treasury Stock (12,901) (11,338)
Retained Earnings 23,410 21,751
Accumulated other non-shareowners' changes
in equity 746 584
21,912 21,355
Total Liabilities and Shareowners' Equity $58,486 $54,575
Debt Ratios:
Debt to total capitalization 33% 30%
Net debt to net capitalization 25% 23%
United Technologies Corporation
Condensed Consolidated Statement of Cash Flows
Quarter Ended Six Months Ended
June 30, June 30,
(Millions) (Unaudited) (Unaudited)
2008 2007 2008 2007
Operating Activities
Net Income $1,275 $1,148 $2,275 $1,967
Adjustments to
reconcile net income
to net cash flows
provided by operating
activities:
Depreciation and
amortization 326 277 645 555
Deferred income taxes
and minority interest 5 65 46 8
Stock compensation
cost 52 43 110 97
Changes in working
capital (258) (118) (739) (395)
Other, net 18 34 (31) (330)
Net Cash Provided
by Operating
Activities 1,418 1,449 2,306 1,902
Investing Activities
Capital expenditures (305) (251) (542) (459)
Acquisitions and
disposal of businesses,
net (335) (98) (461) (208)
Other, net (159) (28) (228) 130
Net Cash Used in
Investing
Activities (799) (377) (1,231) (537)
Financing Activities
Increase in borrowings,
net 718 308 1,580 594
Dividends paid on
Common Stock (290) (245) (583) (490)
Repurchase of Common
Stock (719) (500) (1,520) (1,000)
Other, net (22) 123 (89) 205
Net Cash Used in
Financing
Activities (313) (314) (612) (691)
Effect of foreign
exchange rates (3) 53 75 72
Net increase in cash
and cash equivalents 303 811 538 746
Cash and cash
equivalents - beginning
of period 3,139 2,481 2,904 2,546
Cash and cash
equivalents - end of
period $3,442 $3,292 $3,442 $3,292
United Technologies Corporation
Free Cash Flow Reconciliation
Quarter Ended
(Millions) June 30, 2008 June 30, 2007
(unaudited) (unaudited)
Net income $1,275 $1,148
Depreciation and
amortization 326 277
Changes in working
capital (258) (118)
Other 75 142
Cash flow from
operating activities 1,418 1,449
Cash flow from
operating activities
as a percentage of
net income 111% 126%
Capital expenditures (305) (251)
Capital expenditures
as a percentage of
net income (24%) (22%)
Free cash flow $1,113 $1,198
Free cash flow as a
percentage of net
income 87% 104%
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.
(3) Otis segment results for the first quarter of 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, UTC, +1-860-728-7062
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