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UTC Reports Full Year 2016 Results, Affirms 2017 Outlook

UTC_Q4_Earnings_Intranet_500x250-03-Singapore-06
  • 2016 GAAP EPS of $6.13, up 35 percent versus prior year
  • 2016 Adjusted EPS of $6.61, up 5 percent versus prior year
  • 2016 Sales of $57.2 billion, up 2 percent versus the prior year including 2 percent organic sales growth
  • Affirms 2017 expectations for Adjusted EPS of $6.30 to $6.60* on sales of $57.5 billion to $59 billion

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.

 

SOURCE United Technologies Corp.