Pratt & Whitney Sikorsky UTC Aerospace Systems UTC Building & Industrial Systems
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January 23, 2013

UTC Reports Fourth Quarter and Full Year EPS of $1.04 and $5.35; Reaffirms 2013 EPS Outlook of $5.85 to $6.15

HARTFORD, Conn. – United Technologies Corp. (NYSE:UTX) today reported full year 2012 earnings per share of $5.35 and net income attributable to common shareowners of $4.8 billion, both essentially flat versus prior year. The acquisition of Goodrich Corporation was $0.06 dilutive to EPS. Sales of $57.7 billion were 4 percent above prior year including net acquisitions (6 points) and adverse foreign currency translation (2 points). For the year, organic sales were flat and segment operating margin was 14.0 percent. Adjusted for restructuring and one-time items, segment operating margin of 14.8 percent was 60 basis points lower than prior year, including dilution from the acquisition of Goodrich Corporation. Cash flow from operations of $6.6 billion, less capital expenditures of $1.4 billion, exceeded net income attributable to common shareowners.

“2012 was a transformational year for United Technologies with the successful completion of the Goodrich and IAE transactions, and the divestiture of several non-core assets,” said Louis Chênevert, UTC Chairman & Chief Executive Officer. “We reshaped our portfolio to focus on our core markets. We also invested $2.4 billion in developing game changing technologies and nearly $600 million on restructuring our operations to address a challenging economic environment.”

Fourth quarter 2012 earnings per share of $1.04 were down 27 percent from the year ago quarter. Results for the quarter included $0.25 per share of restructuring and one-time charges. The prior year quarter included $0.01 of net favorable one-time items in excess of restructuring charges. Before these items, earnings per share decreased $0.12 or 9 percent year over year. In addition, results included a $0.12 charge recorded at Sikorsky related to the Canadian Maritime Helicopter program. Foreign currency translation and hedges at Pratt & Whitney Canada had an adverse impact of $0.02 in the quarter.

Sales of $16.4 billion for the quarter were 14 percent above prior year. Net acquisitions provided 15 points of growth. Organic sales were flat and foreign currency translation had an adverse impact of 1 point. Fourth quarter segment operating margin was 11.4 percent. Adjusted for restructuring costs and net one-time items, segment operating margin of 13.3 percent was 200 basis points lower than prior year, primarily due to the impact of the acquisition of Goodrich Corporation and the Canadian Maritime Helicopter program charge at Sikorsky. Cash flow from operations of $2.0 billion less capital expenditures of $641 million exceeded net income attributable to common shareowners of $945 million.

“We closed the year better than we had anticipated,” said Chênevert. “Cash generation was strong both in the quarter and for the full year, and we delivered on our commitment to pay down approximately one-third of the Goodrich acquisition debt.”

New equipment orders at Otis were up 12 percent over the year ago fourth quarter including adverse foreign exchange of 1 point, driven by strong order growth in China. North American Residential HVAC new equipment orders at UTC Climate, Controls & Security grew 20 percent. Large commercial engine spares orders were up 46 percent at Pratt & Whitney including the impact from the incremental International Aero Engines share. Organically, commercial spares orders were down 8 percent at Pratt & Whitney and down 4 percent at UTC Aerospace Systems.

“With broad based improvement in our order trends, and a continued focus on integration and execution, we remain confident in our ability to deliver 2013 earnings per share of $5.85 to $6.15,” Chênevert added. “We continue to expect sales between $64 and $65 billion and cash flow from operations less capital expenditures to equal or exceed net income attributable to common shareowners in 2013.”

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.

All financial results and projections reflect continuing operations unless otherwise noted. The accompanying tables include information integral to assessing the company’s financial position, operating performance, and cash flow, including a reconciliation of differences between non-GAAP measures used in this release and the comparable financial measures calculated in accordance with generally accepted accounting principles in the United States.

This release includes statements that constitute “forward-looking statements” under the securities laws. Forward-looking statements often contain words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “estimate,” “project,” “target,” “anticipate,” “will,” “should,” “see,” “guidance,” “confident” and similar terms. Forward-looking statements may include, among other things, statements relating to future and estimated sales, earnings, cash flow, financing plans, charges, expenditures, anticipated benefits of acquisitions and divestitures, results of operations, uses of cash and other measures of financial performance. All forward-looking statements involve risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. Risks and uncertainties include, without limitation, the effect of economic conditions in the markets in which we operate, including financial market conditions, fluctuation in commodity prices, interest rates and foreign currency exchange rates; future levels of indebtedness and capital and research and development spending; levels of end market demand in construction and in the aerospace industry; levels of air travel; financial difficulties of commercial airlines; the impact of weather conditions and natural disasters; the financial condition of our customers and suppliers; delays and disruption in delivery of materials and services from suppliers; cost reduction efforts and restructuring costs and savings and other consequences thereof; the scope, nature, timing or impact of acquisitions, dispositions, joint ventures and other business arrangements, including integration of acquired businesses; the timing and amount of gains, losses, impairments and charges related to anticipated dispositions; the timing and impact of anticipated debt reduction following the Goodrich acquisition; the development and production of new products and services; the anticipated benefits of diversification and balance of operations across product lines, regions and industries; the impact of the negotiation of collective bargaining agreements and labor disputes; the outcome of legal proceedings and other contingencies; future availability of credit; pension plan assumptions and future contributions; and the effect of changes in tax, environmental and other laws and regulations and political conditions in countries in which we operate and other factors beyond our control. The completion of the proposed divestitures of businesses is subject to uncertainties, including the ability to secure disposition agreements and regulatory approvals on acceptable terms; and satisfaction of other customary conditions. These forward-looking statements speak only as of the date of this release and we undertake no obligation to update or revise any forward-looking statements after we distribute this release. For additional information identifying factors that may cause actual results to vary materially from those stated in the forward-looking statements, see our reports on Forms 10-K, 10-Q and 8-K filed with the SEC from time to time, including, but not limited to, the information included in UTC's Forms 10-K and 10-Q under the headings “Business,” “Risk Factors,” “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Legal Proceedings” and in the notes to the financial statements included in UTC's Forms 10-K and 10-Q.

Financial tables [PDF]

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