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News Article

UTC Reports Second Quarter 2017 Results

  • Raises outlook for 2017 sales and low end of adjusted EPS and organic sales growth

  • Sales of $15.3 billion, up 3 percent versus prior year including 3 percent organic sales growth

  • GAAP EPS of $1.80, up 5 percent versus prior year

  • Adjusted EPS of $1.85, up 2 percent versus prior year

  • Cash flow from operations of $2.1 billion, 149 percent of net income

  • Free cash flow attributable to net income of 118 percent

FARMINGTON, Conn., July 25, 2017 /PRNewswire/ -- United Technologies Corp. (NYSE: UTX) today reported second quarter 2017 results.  All results in this release reflect continuing operations unless otherwise noted.

"United Technologies delivered another quarter of strong results with sales up 3 percent including 3 percent organic sales growth and robust cash flow," said UTC Chairman and Chief Executive Officer Gregory Hayes. "Our performance is in-line with our expectations as we continue to execute on our strategic priorities, including growing the business through our investments in innovative products and services, delivering on our aerospace backlog, and achieving our cost reduction goals, while maintaining a disciplined approach to capital allocation."

"Based on our solid year-to-date performance and outlook for the remainder of 2017, we are raising the low end of our full-year adjusted EPS outlook range by 15 cents. We now expect adjusted EPS of $6.45 to $6.60.* Additionally, we are raising our sales outlook to a range of $58.5 to $59.5 billion.  This reflects organic growth expectations of 3 to 4 percent versus our prior expectation of 2 to 4 percent.* We remain confident that our portfolio of global industry leading franchises is well positioned and will continue to create long-term sustainable shareowner value." 

Second quarter GAAP EPS of $1.80 was up 9 cents (5 percent) versus the prior year and included 5 cents of restructuring. Adjusted EPS of $1.85 was up 2 percent. Sales of $15.3 billion were up 3 percent, driven by 3 points of organic growth and 1 point of net acquisition growth, partially offset by 1 point of adverse foreign exchange.

Net income for the quarter was $1.4 billion, up 1 percent versus the prior year. Cash flow from operations for the quarter was $2.1 billion (149 percent of net income attributable to common shareholders) and capital expenditures were $446 million. Free cash flow of $1.7 billion in the quarter was 118 percent of net income attributable to common shareowners.

In the quarter, new equipment orders at Otis were flat versus the prior year and increased by 11 percent organically at UTC Climate, Controls & Security, each at constant currency.  Commercial aftermarket sales were up 4 percent at Pratt & Whitney and were up 7 percent at UTC Aerospace Systems.

UTC updates its 2017 outlook and now anticipates:

  • Adjusted EPS of $6.45 to $6.60, up from $6.30 to $6.60*;
  • Sales of $58.5 billion to $59.5 billion, up from $57.5 billion to $59 billion (up 2 to 4 percent, including organic sales growth of 3 to 4 percent*);
  • There is no change in the Company's previously provided 2017 expectations for free cash flow, share repurchases, or the 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/79sxfkwf, 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

United Technologies Corporation reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP").

We supplement the reporting of our financial information determined under 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, adjusted net income and adjusted diluted earnings per share ("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/or 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 net income represents net 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 Appendix.  The tables provide additional information as to the items and amounts that have been excluded from the adjusted measures.

When we provide our expectation 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) 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 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 or investment 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          

Contact:
Maureen Fitzgerald                                                   
(860) 728-7907
[email protected]      

 

United Technologies Corporation
Condensed Consolidated Statement of Operations










Quarter Ended June 30,


Six Months Ended June 30,



(Unaudited)


(Unaudited)

(Millions, except per share amounts)

2017


2016


2017


2016

Net Sales

$

15,280



$

14,874



$

29,095



$

28,231


Costs and Expenses:









Cost of products and services sold

11,100



10,741



21,177



20,395



Research and development

609



588



1,186



1,129



Selling, general and administrative

1,538



1,451



3,020



2,814



Total Costs and Expenses

13,247



12,780



25,383



24,338


Other income, net

257



243



845



389


Operating profit

2,290



2,337



4,557



4,282



Interest expense, net

226



225



439



448


Income from continuing operations before income taxes

2,064



2,112



4,118



3,834



Income tax expense

532



587



1,118



1,056


Income from continuing operations

1,532



1,525



3,000



2,778



Less: Noncontrolling interest in subsidiaries' earnings from continuing operations

93



99



175



180


Income from continuing operations attributable to common shareowners

1,439



1,426



2,825



2,598


Discontinued operations:









Income from operations



1





1



(Loss) gain on disposal



(3)





15



Income tax expense



(45)





(52)


Loss from discontinued operations attributable to common shareowners



(47)





(36)


Net income attributable to common shareowners

$

1,439



$

1,379



$

2,825



$

2,562


Earnings (Loss) Per Share of Common Stock - Basic:









From continuing operations attributable to common shareowners

$

1.83



$

1.73



$

3.57



$

3.15



From discontinued operations attributable to common shareowners



(0.06)





(0.04)



Total attributable to common shareowners

$

1.83



$

1.67



$

3.57



$

3.11


Earnings (Loss) Per Share of Common Stock - Diluted:









From continuing operations attributable to common shareowners

$

1.80



$

1.71



$

3.53



$

3.12



From discontinued operations attributable to common shareowners



(0.06)





(0.04)



Total attributable to common shareowners

$

1.80



$

1.65



$

3.53



$

3.08


Weighted Average Number of Shares Outstanding:









Basic shares

789



825



791



825



Diluted shares

798



834



800



832


 

As described on the following pages, consolidated results for the quarters and six months ended June 30, 2017 and 2016 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 June 30,


Six Months Ended June 30,


(Unaudited)


(Unaudited)

(Millions)

2017


2016


2017


2016

Net Sales








Otis

$

3,131



$

3,097



$

5,935



$

5,812


UTC Climate, Controls & Security

4,712



4,459



8,604



8,187


Pratt & Whitney

4,070



3,813



7,828



7,401


UTC Aerospace Systems

3,640



3,716



7,251



7,221


Segment Sales

15,553



15,085



29,618



28,621


Eliminations and other

(273)



(211)



(523)



(390)


Consolidated Net Sales

$

15,280



$

14,874



$

29,095



$

28,231










Operating Profit








Otis

$

544



$

581



$

996



$

1,047


UTC Climate, Controls & Security

873



872



1,836



1,478


Pratt & Whitney

402



386



795



796


UTC Aerospace Systems

579



582



1,155



1,120


Segment Operating Profit

2,398



2,421



4,782



4,441


Eliminations and other

(2)



13



(15)



29


General corporate expenses

(106)



(97)



(210)



(188)


Consolidated Operating Profit

$

2,290



$

2,337



$

4,557



$

4,282


Segment Operating Profit Margin








Otis


17.4%




18.8%

16.8%



18.0%


UTC Climate, Controls & Security


18.5%




19.6%

21.3%



18.1%


Pratt & Whitney


9.9%




10.1%

10.2%



10.8%


UTC Aerospace Systems


15.9%




15.7%




15.9%




15.5%


Segment Operating Profit Margin


15.4%




16.0%

16.1%



15.5%


 

As described on the following pages, consolidated results for the quarters and six months ended June 30, 2017 and 2016 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 June 30,


Six Months Ended June 30,


(Unaudited)


(Unaudited)

In Millions - Income (Expense)

2017


2016


2017


2016

Income from continuing operations attributable to common shareowners

$

1,439



$

1,426



$

2,825



$

2,598


Restructuring Costs included in Operating Profit:








Otis

(12)



(16)



(17)



(31)


UTC Climate, Controls & Security

(18)



(25)



(41)



(53)


Pratt & Whitney

(6)



(66)



(6)



(71)


UTC Aerospace Systems

(24)



(8)



(47)



(21)


Eliminations and other



(1)



(1)



(2)



(60)



(116)



(112)



(178)


Significant non-recurring and non-operational items included in Operating Profit:








UTC Climate, Controls & Security








Gain on sale of investments in Watsco, Inc.





379




Acquisition and integration costs related to current period acquisitions



(12)





(12)


Eliminations and other








Gain on sale of available-for-sale security





1







(12)



380



(12)


Total impact on Consolidated Operating Profit

(60)



(128)



268



(190)


Tax effect of restructuring and significant non-recurring and non-operational items above

20



40



(104)



60


Less: Impact on Net Income from Continuing Operations Attributable to Common Shareowners

(40)



(88)



164



(130)


Adjusted income from continuing operations attributable to common shareowners

$

1,479



$

1,514



$

2,661



$

2,728










Diluted Earnings Per Share from Continuing Operations

$

1.80



$

1.71



$

3.53



$

3.12


Impact on Diluted Earnings Per Share from Continuing Operations

(0.05)



(0.11)



0.20



(0.16)


Adjusted Diluted Earnings Per Share from Continuing Operations

$

1.85



$

1.82



$

3.33



$

3.28


 

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 page)






Quarter Ended June 30,


Six Months Ended June 30,


(Unaudited)


(Unaudited)

(Millions)

2017


2016


2017


2016

Net Sales








Otis

$

3,131



$

3,097



$

5,935



$

5,812


UTC Climate, Controls & Security

4,712



4,459



8,604



8,187


Pratt & Whitney

4,070



3,813



7,828



7,401


UTC Aerospace Systems

3,640



3,716



7,251



7,221


Segment Sales

15,553



15,085



29,618



28,621


Eliminations and other

(273)



(211)



(523)



(390)


Consolidated Net Sales

$

15,280



$

14,874



$

29,095



$

28,231










Adjusted Operating Profit








Otis

$

556



$

597



$

1,013



$

1,078


UTC Climate, Controls & Security

891



909



1,498



1,543


Pratt & Whitney

408



452



801



867


UTC Aerospace Systems

603



590



1,202



1,141


Segment Operating Profit

2,458



2,548



4,514



4,629


Eliminations and other

(2)



14



(16)



31


General corporate expenses

(106)



(97)



(209)



(188)


Adjusted Consolidated Operating Profit

$

2,350



$

2,465



$

4,289



$

4,472


Adjusted Segment Operating Profit Margin








Otis


17.8%




19.3%




17.1%




18.5%


UTC Climate, Controls & Security


18.9%




20.4%




17.4%




18.8%


Pratt & Whitney


10.0%




11.9%




10.2%




11.7%


UTC Aerospace Systems


16.6%




15.9%




16.6%




15.8%


Adjusted Segment Operating Profit Margin


15.8%




16.9%




15.2%




16.2%


 

 

United Technologies Corporation
Components of Changes in Net Sales






Quarter Ended June 30, 2017 Compared with Quarter Ended June 30, 2016












Factors Contributing to Total % Change in Net Sales



Organic


FX
Translation


Acquisitions /
Divestitures, net


Other


Total

Otis


1%


(2)%


1%


1%


1%

UTC Climate, Controls & Security


5%


(1)%


2%



6%

Pratt & Whitney


6%


1%




7%

UTC Aerospace Systems


(1)%



(1)%



(2)%












Consolidated


3%


(1)%


1%



3%























Six Months Ended June 30, 2017 Compared with Six Months Ended June 30, 2016












Factors Contributing to Total % Change in Net Sales



Organic


FX
Translation


Acquisitions /
Divestitures, net


Other


Total

Otis


2%


(2)%


1%


1%


2%

UTC Climate, Controls & Security


3%


(1)%


3%



5%

Pratt & Whitney


5%


1%




6%

UTC Aerospace Systems


2%


(1)%


(1)%














Consolidated


3%


(1)%


1%



3%

 

United Technologies Corporation
Condensed Consolidated Balance Sheet









June 30,


December 31,


2017


2016

(Millions)

(Unaudited)


(Unaudited)

Assets




Cash and cash equivalents

$

9,345



$

7,157


Accounts receivable, net

12,597



11,481


Inventories and contracts in progress, net

9,860



8,704


Other assets, current

1,027



1,208


Total Current Assets

32,829



28,550


Fixed assets, net

9,475



9,158


Goodwill

27,587



27,059


Intangible assets, net

15,881



15,684


Other assets

9,021



9,255


Total Assets

$

94,793



$

89,706






Liabilities and Equity




Short-term debt

$

2,743



$

2,204


Accounts payable

8,542



7,483


Accrued liabilities

12,634



12,219


Total Current Liabilities

23,919



21,906


Long-term debt

23,883



21,697


Other long-term liabilities

16,430



16,638


Total Liabilities

64,232



60,241


Redeemable noncontrolling interest

406



296


Shareowners' Equity:




Common Stock

17,282



17,190


Treasury Stock

(35,516)



(34,150)


Retained earnings

54,640



52,873


Accumulated other comprehensive loss

(7,964)



(8,334)


Total Shareowners' Equity

28,442



27,579


Noncontrolling interest

1,713



1,590


Total Equity

30,155



29,169


Total Liabilities and Equity

$

94,793



$

89,706


Debt Ratios:




Debt to total capitalization


47%


45%


Net debt to net capitalization


36%


36%


 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

United Technologies Corporation
Condensed Consolidated Statement of Cash Flows









Quarter Ended
June 30,


Six Months Ended
June 30,


(Unaudited)


(Unaudited)

(Millions)

2017


2016


2017


2016

Operating Activities of Continuing Operations:








Net income from continuing operations

$

1,532



$

1,525



$

3,000



$

2,778


Adjustments to reconcile net income from continuing operations to net cash flows provided by operating activities of continuing operations:








Depreciation and amortization

527



494



1,039



960


Deferred income tax provision

393



75



502



220


Stock compensation cost

49



48



96



96


Change in working capital

(79)



35



(554)



(596)


Global pension contributions

(33)



(32)



(79)



(107)


Canadian government settlement





(246)



(237)


Other operating activities, net

(243)



(337)



(619)



(508)


Net cash flows provided by operating activities of continuing operations

2,146



1,808



3,139



2,606


Investing Activities of Continuing Operations:








Capital expenditures

(446)



(363)



(771)



(649)


Acquisitions and dispositions of businesses, net

(49)



(425)



(149)



(488)


Proceeds from sale of investments in Watsco, Inc.





596




Increase in collaboration intangible assets

(94)



(101)



(195)



(199)


(Payments) receipts from settlements of derivative contracts

(181)



44



(294)



86


Other investing activities, net

(81)



(42)



(177)



(130)


Net cash flows used in investing activities of continuing operations

(851)



(887)



(990)



(1,380)


Financing Activities of Continuing Operations:








Issuance (repayment) of long-term debt, net

2,429



(2)



2,402



2,322


(Decrease) increase in short-term borrowings, net

(535)



(484)



32



(178)


Dividends paid on Common Stock

(503)



(526)



(1,008)



(1,035)


Repurchase of Common Stock

(437)



(36)



(1,370)



(36)


Other financing activities, net

(77)



(68)



(108)



(159)


Net cash flows provided by (used in) financing activities of continuing operations

877



(1,116)



(52)



914


Discontinued Operations:








Net cash used in operating activities



(236)





(2,463)


Net cash provided by investing activities



6





6


Net cash flows used in discontinued operations



(230)





(2,457)


Effect of foreign exchange rate changes on cash and cash equivalents

26



(7)



95



10


Net increase (decrease) in cash, cash equivalents and restricted cash

2,198



(432)



2,192



(307)


Cash, cash equivalents and restricted cash, beginning of period

7,183



7,245



7,189



7,120


Cash, cash equivalents and restricted cash, end of period

9,381



6,813



9,381



6,813


Less: Restricted cash, included in Other assets

36



28



36



28


Cash and cash equivalents, end of period

$

9,345



$

6,785



$

9,345



$

6,785


 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

United Technologies Corporation
Free Cash Flow Reconciliation





Quarter Ended June 30,


(Unaudited)

(Millions)

2017


2016







Net income attributable to common shareowners from continuing operations

$

1,439




$

1,426



Net cash flows provided by operating activities of continuing operations

$

2,146




$

1,808



Net cash flows provided by operating activities of continuing operations as a percentage of net income attributable to common shareowners from continuing operations


149

%



127

%

Capital expenditures

(446)




(363)



Capital expenditures as a percentage of net income attributable to common shareowners from continuing operations


(31)

%



(25)

%

Free cash flow from continuing operations

$

1,700




$

1,445



Free cash flow from continuing operations as a percentage of net income attributable to common shareowners from continuing operations


118

%



101

%








Six Months Ended June 30,


(Unaudited)

(Millions)

2017


2016







Net income attributable to common shareowners from continuing operations

$

2,825




$

2,598



Net cash flows provided by operating activities of continuing operations

$

3,139




$

2,606



Net cash flows provided by operating activities of continuing operations as a percentage of net income attributable to common shareowners from continuing operations


111

%



100

%

Capital expenditures

(771)




(649)



Capital expenditures as a percentage of net income attributable to common shareowners from continuing operations


(27)

%



(25)

%

Free cash flow from continuing operations

$

2,368




$

1,957



Free cash flow from continuing operations as a percentage of net income attributable to common shareowners from continuing operations


84

%



75

%

 

Notes to Condensed Consolidated Financial Statements

Certain reclassifications have been made to the prior year amounts to conform to the current year presentation. As previously disclosed in our 2016 Form 10-K, in 2016 we early adopted Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments and ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.  Amounts previously reported for the quarter and six months ended June 30, 2016 have been restated as required upon adoption of these ASUs. These restatements had an immaterial impact to the Condensed Consolidated Financial Statements as of June 30, 2016 and for the quarter and six months then ended.

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.