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HARTFORD, Conn., January 23, 2007 –- United Technologies Corp. (NYSE:UTX) today reported fourth quarter 2006 earnings per share of $0.87 and net income of $865 million, up 23 percent and 20 percent, respectively, excluding the 2005 fourth quarter impact of adopting FIN 47. Consolidated revenues for the quarter increased 14 percent to $12.8 billion, including organic growth of 10 percent.

In the quarter, foreign currency translation increased revenues by 3 percent and earnings by $0.02 per share.

Full year earnings per share of $3.71 and net income of $3.7 billion were 19 and 18 percent higher, respectively, than 2005 results. Revenues increased 12 percent to $47.8 billion, including 9 points of organic growth, 2 points of acquisitions, and 1 point of foreign exchange.

Cash flow from operations after capital expenditures exceeded net income for both the quarter and full year. In the fourth quarter, cash flow from operations was $1.66 billion and capital expenditures were $351 million. For the full year, cash flow from operations was $4.80 billion and capital expenditures were $954 million. Voluntary cash contributions to pension plans were $159 million in the fourth quarter and $190 million for the year.

“UTC had another solid year in 2006 and is set for more of the same in 2007,” said UTC Chairman and Chief Executive Officer George David.

“Organic growth for the year was strong at 9 percent and follows 7 percent in 2005 and 8 percent in 2004. These growth rates reflect UTC’s innovative and competitive products, strong presence in emerging markets, and good conditions in most of our markets worldwide. The exception has been Carrier’s North American residential market over the second half of 2006 on a substantially weaker U.S. housing market. However, robust aerospace and commercial construction markets well more than offset this.”

“UTC also experienced production challenges in 2006 at Carrier with the launch of its high efficiency residential air conditioning product and at Sikorsky on a doubling of volume over the 2004-2007 period. UTC’s 19 percent growth in earnings per share for the year given these market and production challenges demonstrates the balance in the portfolio and the strength of UTC’s businesses overall. We believe we are well positioned for earnings increases in 2007 and especially on favorable compares at Carrier and Sikorsky. We confirm prior guidance for 2007 earnings per share in the $4.05 to $4.20 range and cash flow after capital expenditures again to exceed net income,” David added.

Share repurchase in the quarter was $738 million and brought the year’s total to $2.07 billion. Acquisition spending, including debt assumed, was $1.0 billion for the year with approximately $514 million in the fourth quarter. Debt to capital ended the year at 31 percent, lower than 2005 despite the $1.83 billion reduction in equity resulting from the adoption of the Statement of Financial Accounting Standards No. 158 (Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans).

Fourth quarter results include restructuring costs of $82 million. For the year, restructuring costs totaled $288 million, slightly exceeding one time favorable items. Additional favorable items are anticipated in 2007 to offset trailing costs from previous restructuring actions as well as to fund potential new actions initiated throughout the year.

References in this release to earnings per share growth are before the cumulative effect of a change in accounting related to the adoption of Financial Accounting Standards Board Interpretation No. 47 (Accounting for Conditional Asset Retirement Obligations), which resulted in a non-cash after tax cumulative impact of $95 million or $0.09 per share and was recorded in fourth quarter 2005 results.

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 that provides a broad range of high technology products and support services to the building systems and aerospace industries.

This release is supplemented by presentation materials that are available on UTC's website at www.utc.com, and includes "forward looking statements" concerning expected revenue, earnings, cash flow, share repurchases, restructuring and other matters that 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 items 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. 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.

View the financial tables in PDF format.