RTX CORPORATION FARMINGTON, Conn., July 26, 2016 /PRNewswire/ -- United Technologies Corp. (NYSE: UTX) today reported second quarter 2016 results. All results in this release reflect continuing operations unless otherwise noted.
Second quarter GAAP EPS of $1.71 was up 4 percent versus the prior year and included 11 cents of net restructuring and other significant non-operational items. Adjusted EPS of $1.82 was up 9 percent versus the prior year. Net income in the quarter was $1.4 billion, down 3 percent versus the prior year. Sales of $14.9 billion were up 1 percent, with 1 point of organic and 1 point of net acquisition growth offset by 1 point of unfavorable foreign exchange.
"United Technologies had a solid first half of the year with 2 percent organic sales growth, and we remain on track to meet our growth targets for 2020," UTC President and Chief Executive Officer Gregory Hayes said. "We delivered strong cash flow, led by exceptional cash generation in the commercial businesses, even while we continued to invest in the aerospace ramp. As a result of our solid financial performance through the second quarter, we are raising the low end of our 2016 adjusted EPS outlook by 15 cents to $6.45 to $6.60 per share*, on increased sales of $57 to $58 billion."
*Note: Expectations for EPS and organic sales are provided on an adjusted basis as the corresponding GAAP measures are not reasonably available due to uncertainty as to potentially significant items of a non-recurring and/or non-operational nature. See "Use of Non-GAAP Financial Measures" below for additional information.
Cash flow from operations for the quarter was $1.8 billion (125 percent of net income attributable to common shareowners) and capital expenditures were $363 million. Free cash flow of $1.4 billion in the quarter was 100 percent of net income attributable to common shareowners.
Otis new equipment orders in the quarter decreased 4 percent over the prior year at constant currency, and grew 3 percent excluding China. Equipment orders at UTC Climate, Controls & Security decreased by 4 percent, primarily driven by a difficult compare in the transport refrigeration business. Commercial aftermarket sales were up 20 percent at Pratt & Whitney, and up 5 percent at UTC Aerospace Systems.
"We continue to focus on our key priorities. This includes achieving critical aerospace program milestones and successfully meeting the production ramp to support our large and growing order book. We now have orders for 8,200 Geared Turbofan engines, including announced and unannounced firm and option engines," Hayes added. "In our commercial businesses, we continue to invest in innovation and position ourselves to benefit from growing urbanization trends. With our focused portfolio of industry leading franchises, we are confident in our ability to create significant long-term value for our shareholders."
UTC updates its 2016 outlook and now anticipates:
-- Adjusted EPS of $6.45 to $6.60 up from $6.30 to $6.60**;
-- Sales of $57 billion to $58 billion, up from $56 billion to $58 billion
(year over year growth of 2% to 3%, including organic sales growth of 1%
to 3%**);
-- There is no change in the Company's previously provided 2016
expectations for free cash flow, share repurchases, and the placeholder
for acquisitions.
**Note: Expectations for EPS and organic sales are provided on an adjusted basis as the corresponding GAAP measures are not reasonably available due to uncertainty as to potentially significant items of a non-recurring and/or non-operational nature. See "Use 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. Additional information, including a webcast, is available on the Internet at http://www.utc.com. To learn more about UTC, visit the website or follow the company on Twitter: @UTC
Use of Non-GAAP Financial Measures
We report financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP measures - namely, adjusted EPS, organic sales and free cash flow - should not be considered in isolation or as substitutes for the related GAAP measures. Moreover, other companies may define these non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies.
Adjusted EPS represents diluted earnings per share from continuing operations (a GAAP measure), excluding restructuring costs and other significant items of a non-recurring and/or non-operational nature (hereinafter referred to as "other significant items"). Organic sales represent 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. Management believes that these non-GAAP measures are useful in providing period to period comparisons of the results of the Company's ongoing operational performance.
Free cash flow 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 the Company's Common Stock and distribution of earnings to shareowners.
A reconciliation of these non-GAAP measures to the corresponding amounts prepared in accordance with GAAP is included in the tables accompanying this press release. The tables provide additional information as to the items and amounts that have been excluded from these adjusted measures.
When we provide our expectations for adjusted EPS, free cash flow, and/or organic sales on a forward-looking basis, a reconciliation of differences between these non-GAAP expectations and the corresponding GAAP measures (expected diluted EPS from continuing operations, 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 the impact of other significant items on EPS, cash flow from operations and sales. 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) delays and disruption in delivery of materials and services from suppliers; (6) customer- and Company- directed cost reduction efforts and restructuring costs and savings and other consequences thereof; (7) 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; (8) new business opportunities; (9) our ability to realize the intended benefits of organizational changes; (10) the anticipated benefits of diversification and balance of operations across product lines, regions and industries; (11) 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; (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, but not limited to the effect of the U.K's pending withdrawal from the EU, on general market conditions and currency exchange rates in the near term and beyond; (16) and 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: Alberto Canal
(860) 728-6392
Joshua Silverman
(860) 493-4284
United Technologies Corporation
Condensed Consolidated Statement of Operations
Quarter Ended June 30, Six Months Ended June 30,
(Unaudited) (Unaudited)
---------- ----------
(Millions, except per share amounts) 2016 2015 2016 2015
---- ---- ---- ----
Net Sales $14,874 $14,690 $28,231 $28,010
Costs and Expenses:
Cost of products and services sold 10,741 10,472 20,395 19,978
Research and development 588 558 1,129 1,122
Selling, general and administrative 1,451 1,426 2,814 2,902
-----
Total Costs and Expenses 12,780 12,456 24,338 24,002
Other income, net 243 181 389 589
--- --- --- ---
Operating profit 2,337 2,415 4,282 4,597
Interest expense, net 225 217 448 434
---
Income from continuing operations before income taxes 2,112 2,198 3,834 4,163
Income tax expense 593 626 1,054 1,156
---
Income from continuing operations 1,519 1,572 2,780 3,007
Less: Noncontrolling interest in subsidiaries' earnings from continuing operations 99 111 180 182
---
Income from continuing operations attributable to common shareowners 1,420 1,461 2,600 2,825
----- ----- ----- -----
Discontinued operations:
Income from operations 1 166 1 257
(Loss) gain on disposal (3) (28) 15 (28)
Income tax expense (45) (58) (52) (86)
----
(Loss) income from discontinued operations (47) 80 (36) 143
Less: Noncontrolling interest in subsidiaries' earnings from discontinued operations - (1) - -
---
(Loss) income from discontinued operations attributable to common shareowners (47) 81 (36) 143
Net income attributable to common shareowners $1,373 $1,542 $2,564 $2,968
====== ====== ====== ======
Earnings (Loss) Per Share of Common Stock - Basic:
From continuing operations attributable to common shareowners $1.72 $1.67 $3.15 $3.19
From discontinued operations attributable to common shareowners (0.06) 0.09 (0.04) 0.16
Earnings (Loss) Per Share of Common Stock - Diluted:
From continuing operations attributable to common shareowners $1.71 $1.64 $3.13 $3.15
From discontinued operations attributable to common shareowners (0.06) 0.09 (0.04) 0.16
Weighted Average Number of Shares Outstanding:
Basic shares 825 877 825 885
Diluted shares 833 889 832 898
As described on the following pages, consolidated results for the quarters and six months ended June 30, 2016 and 2015 include restructuring costs and significant non-recurring and non-operational items that management believes should be considered 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) 2016 2015 2016 2015
---- ---- ---- ----
Net Sales
Otis $3,097 $3,098 $5,812 $5,843
UTC Climate, Controls & Security 4,459 4,454 8,187 8,306
Pratt & Whitney 3,813 3,677 7,401 7,009
UTC Aerospace Systems 3,716 3,632 7,221 7,180
Segment Sales 15,085 14,861 28,621 28,338
Eliminations and other (211) (171) (390) (328)
Consolidated Net Sales $14,874 $14,690 $28,231 $28,010
======= ======= ======= =======
Operating Profit
Otis $581 $627 $1,047 $1,154
UTC Climate, Controls & Security 872 823 1,478 1,552
Pratt & Whitney 386 487 796 906
UTC Aerospace Systems 582 580 1,120 1,149
--- --- ----- -----
Segment Operating Profit 2,421 2,517 4,441 4,761
Eliminations and other 13 18 29 66
General corporate expenses (97) (120) (188) (230)
Consolidated Operating Profit $2,337 $2,415 $4,282 $4,597
====== ====== ====== ======
Segment Operating Profit Margin
Otis 18.8% 20.2% 18.0% 19.8%
UTC Climate, Controls & Security 19.6% 18.5% 18.1% 18.7%
Pratt & Whitney 10.1% 13.2% 10.8% 12.9%
UTC Aerospace Systems 15.7% 16.0% 15.5% 16.0%
---- ---- ---- ----
Segment Operating Profit Margin 16.0% 16.9% 15.5% 16.8%
As described on the following pages, consolidated results for the quarters and six months ended June 30, 2016 and 2015 include restructuring costs and significant non-recurring and non-operational items that management believes should be considered when evaluating
the underlying financial performance.
United Technologies Corporation
Reconciliation of Reported to Adjusted Results
Quarter Ended June 30, Six Months Ended June 30,
(Unaudited) (Unaudited)
---------- ----------
In Millions - Income (Expense) 2016 2015 2016 2015
---- ---- ---- ----
Income from continuing operations attributable to common shareowners $1,420 $1,461 $2,600 $2,825
------ ------ ------ ------
Restructuring Costs included in Operating Profit:
Otis (16) (8) (31) (14)
UTC Climate, Controls & Security (25) (28) (53) (52)
Pratt & Whitney (66) (2) (71) (15)
UTC Aerospace Systems (8) - (21) (50)
Eliminations and other (1) (1) (2) (1)
(116) (39) (178) (132)
---- --- ---- ----
Significant non-recurring and non-operational items included in Operating Profit:
UTC Climate, Controls & Security:
Gain on fair value adjustment on acquisition of - - - 126
controlling interest in a joint venture
Acquisition and integration costs related to current (12) - (12) -
period acquisitions
(12) - (12) 126
--- --- --- ---
Total impact on Consolidated Operating Profit (128) (39) (190) (6)
Tax effect of restructuring and significant non- 40 15 60 45
recurring and non-operational items above
Less: Impact on Net Income from Continuing Operations Attributable to Common Shareowners (88) (24) (130) 39
--- --- ---- ---
Adjusted income from continuing operations attributable to common shareowners $1,508 $1,485 $2,730 $2,786
====== ====== ====== ======
Diluted Earnings Per Share from Continuing Operations $1.71 $1.64 $3.13 $3.15
Impact on Diluted Earnings Per Share from Continuing Operations (0.11) (0.03) (0.16) 0.04
----- ----- ----- ----
Adjusted Diluted Earnings Per Share from Continuing Operations $1.82 $1.67 $3.29 $3.11
===== ===== ===== =====
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) 2016 2015 2016 2015
---- ---- ---- ----
Net Sales
Otis $3,097 $3,098 $5,812 $5,843
UTC Climate, Controls & Security 4,459 4,454 8,187 8,306
Pratt & Whitney 3,813 3,677 7,401 7,009
UTC Aerospace Systems 3,716 3,632 7,221 7,180
----- ----- ----- -----
Segment Sales 15,085 14,861 28,621 28,338
Eliminations and other (211) (171) (390) (328)
---- ---- ---- ----
Consolidated Net Sales $14,874 $14,690 $28,231 $28,010
======= ======= ======= =======
Adjusted Operating Profit
Otis $597 $635 $1,078 $1,168
UTC Climate, Controls & Security 909 851 1,543 1,478
Pratt & Whitney 452 489 867 921
UTC Aerospace Systems 590 580 1,141 1,199
--- --- ----- -----
Segment Operating Profit 2,548 2,555 4,629 4,766
Eliminations and other 14 19 31 67
General corporate expenses (97) (120) (188) (230)
Adjusted Consolidated Operating Profit $2,465 $2,454 $4,472 $4,603
====== ====== ====== ======
Adjusted Segment Operating Profit Margin
Otis 19.3% 20.5% 18.5% 20.0%
UTC Climate, Controls & Security 20.4% 19.1% 18.8% 17.8%
Pratt & Whitney 11.9% 13.3% 11.7% 13.1%
UTC Aerospace Systems 15.9% 16.0% 15.8% 16.7%
---- ---- ---- ----
Adjusted Segment Operating Profit Margin 16.9% 17.2% 16.2% 16.8%
United Technologies Corporation
Components of Changes in Net Sales
Quarter Ended June 30, 2016 Compared with Quarter Ended June 30, 2015
Factors Contributing to Total % Change in Net Sales
---------------------------------------------------
Organic FX Acquisitions / Total
Translation Divestitures, net
----------- -----------------
Otis 2% (2)% - -
UTC Climate, Controls & Security (1)% (1)% 2% -
Pratt & Whitney 4% - - 4%
UTC Aerospace Systems 2% - - 2%
Consolidated 1% (1)% 1% 1%
Six Months Ended June 30, 2016 Compared with Six Months Ended June 30, 2015
Factors Contributing to Total % Change in Net Sales
---------------------------------------------------
Organic FX Acquisitions / Total
Translation Divestitures, net
----------- -----------------
Otis 3% (4)% - (1)%
UTC Climate, Controls & Security (1)% (1)% 1% (1)%
Pratt & Whitney 6% - - 6%
UTC Aerospace Systems 1% - - 1%
Consolidated 2% (1)% - 1%
United Technologies Corporation
Condensed Consolidated Balance Sheet
June 30, December 31,
2016 2015
(Millions) (Unaudited) (Unaudited)
---------- ----------
Assets
------
Cash and cash equivalents $6,785 $7,075
Accounts receivable, net 11,544 10,653
Inventories and contracts in progress, net 8,747 8,135
Other assets, current 894 843
Total Current Assets 27,970 26,706
Fixed assets, net 8,911 8,732
Goodwill 27,535 27,301
Intangible assets, net 15,842 15,603
Other assets 9,222 9,142
----- -----
Total Assets $89,480 $87,484
======= =======
Liabilities and Equity
----------------------
Short-term debt $2,407 $1,105
Accounts payable 7,242 6,875
Accrued liabilities 12,534 14,638
Total Current Liabilities 22,183 22,618
Long-term debt 20,130 19,320
Other long-term liabilities 16,205 16,580
------ ------
Total Liabilities 58,518 58,518
------ ------
Redeemable noncontrolling interest 314 122
Shareowners' Equity:
Common Stock 16,241 15,928
Treasury Stock (31,118) (30,907)
Retained earnings 51,451 49,956
Accumulated other comprehensive loss (7,484) (7,619)
------ ------
Total Shareowners' Equity 29,090 27,358
Noncontrolling interest 1,558 1,486
----- -----
Total Equity 30,648 28,844
Total Liabilities and Equity $89,480 $87,484
======= =======
Debt Ratios:
Debt to total capitalization 42% 41%
Net debt to net capitalization 34% 32%
See accompanying Notes to Condensed Consolidated Financial Statements.
United Technologies Corporation
Condensed Consolidated Statement of Cash Flows
Quarter Ended Six Months Ended
June 30, June 30,
(Unaudited) (Unaudited)
---------- ----------
(Millions) 2016 2015 2016 2015
---- ---- ---- ----
Operating Activities of Continuing Operations:
Net income from continuing operations $1,519 $1,572 $2,780 $3,007
Adjustments to reconcile net income from continuing operations to net cash flows provided by operating activities of continuing operations:
Depreciation and amortization 494 457 960 915
Deferred income tax provision 74 182 208 335
Stock compensation cost 48 46 96 92
Change in working capital 3 (450) (637) (723)
Global pension contributions (32) (26) (107) (70)
Canadian government settlement - - (237) -
Other operating activities, net (330) (406) (492) (534)
Net cash flows provided by operating activities of continuing operations 1,776 1,375 2,571 3,022
----- ----- ----- -----
Investing Activities of Continuing Operations:
Capital expenditures (363) (332) (649) (654)
Acquisitions and dispositions of businesses, net (425) (19) (488) (90)
Increase in collaboration intangible assets (101) (115) (199) (247)
Receipts (payments) from settlements of derivative contracts 44 (154) 86 414
Other investing activities, net (14) (84) (92) 81
--- ---
Net cash flows used in investing activities of continuing operations (859) (704) (1,342) (496)
---- ---- ------ ----
Financing Activities of Continuing Operations:
(Repayment) issuance of long-term debt, net (2) (8) 2,322 2
(Decrease) increase in short-term borrowings, net (484) 468 (178) 2,645
Dividends paid on Common Stock (526) (543) (1,035) (1,096)
Repurchase of Common Stock (36) - (36) (3,000)
Other financing activities, net (62) (73) (145) (92)
Net cash flows (used in) provided by financing activities of continuing (1,110) (156) 928 (1,541)
operations
Discontinued Operations:
Net cash (used in) provided by operating activities (236) 161 (2,463) (174)
Net cash provided by (used in) investing activities 6 (25) 6 (60)
Net cash used in financing activities - (4) - (5)
--- --- --- ---
Net cash flows (used in) provided by discontinued operations (230) 132 (2,457) (239)
---- --- ------ ----
Effect of foreign exchange rate changes on cash and cash equivalents (7) 5 10 (48)
--- --- --- ---
Net (decrease) increase in cash and cash equivalents (430) 652 (290) 698
Cash and cash equivalents, beginning of period 7,215 5,281 7,075 5,235
----- ----- ----- -----
Cash and cash equivalents of continuing operations, end of period 6,785 5,933 6,785 5,933
Less: Cash and cash equivalents of assets held for sale - 115 - 115
--- --- --- ---
Cash and cash equivalents of continuing operations, end of period $6,785 $5,818 $6,785 $5,818
====== ====== ====== ======
See accompanying Notes to Condensed Consolidated Financial Statements.
United Technologies Corporation
Free Cash Flow Reconciliation
Quarter Ended June 30,
(Unaudited)
----------
(Millions) 2016 2015
---- ----
Net income attributable to common shareowners from continuing operations $1,420 $1,461
====== ======
Net cash flows provided by operating activities of continuing operations $1,776 $1,375
Net cash flows provided by operating activities of continuing operations as a percentage of net income attributable to common shareowners from continuing
operations 125% 94%
Capital expenditures (363) (332)
---- ----
Capital expenditures as a percentage of net income attributable to common shareowners from continuing operations (26)% (23)%
---- ----
Free cash flow from continuing operations $1,413 $1,043
====== ======
Free cash flow from continuing operations as a percentage of net income attributable to common shareowners from continuing operations 100% 71%
=== ===
Six Months Ended June 30,
(Unaudited)
----------
(Millions) 2016 2015
---- ----
Net income attributable to common shareowners from continuing operations $2,600 $2,825
====== ======
Net cash flows provided by operating activities of continuing operations $2,571 $3,022
Net cash flows provided by operating activities of continuing operations as a percentage of net income attributable to common shareowners from continuing
operations 99% 107%
Capital expenditures (649) (654)
---- ----
Capital expenditures as a percentage of net income attributable to common shareowners from continuing operations (25)% (23)%
---- ----
Free cash flow from continuing operations $1,922 $2,368
====== ======
Free cash flow from continuing operations as a percentage of net income attributable to common shareowners from continuing operations 74% 84%
=== ===
Notes to Condensed Consolidated Financial
Statements
(1) Adjusted net sales, organic sales,
adjusted operating profit and
adjusted 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 non-operational
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
EPS represents diluted earnings
per share from continuing
operations (a GAAP measure),
excluding restructuring costs and
other significant items. For the
business segments, adjustments of
net sales, operating profit and
margins similarly reflect
continuing operations, excluding
restructuring and other
significant items. Management
believes that these non-GAAP
measures are useful in providing
period to period comparisons of
the results of the Company's
ongoing operational performance. A
reconciliation of these non-GAAP
measures to the corresponding
amounts prepared in accordance
with generally accepted accounting
principles is included in the
tables above.
(2) 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.
(3) 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 net cash flow
provided by operating activities,
prepared in accordance with
generally accepted accounting
principles, to free cash flow is
provided above.
(4) Adjusted net sales, organic sales,
adjusted operating profit,
adjusted EPS and free cash flow
should not be considered in
isolation or as substitutes for
the related GAAP measures.
Moreover, other companies may
define these non-GAAP measures
differently, which limits the
usefulness of those measures for
comparisons with such other
companies.
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SOURCE United Technologies Corp.
