Actionable news
0
All posts from Actionable news
Actionable news in UTX: UNITED TECHNOLOGIES CORPORATION,

United Technologies: Utc Reports First Quarter 2016 Results

The following excerpt is from the company's SEC filing.

Adjusted EPS of $1.47, up 2 percent versus the prior year

Sales were $13.4 billion, with 2 percent organic sales growth

GAAP EPS of $1.42 (including $0.05 in restructuring charges), versus $1.51 in the prior year

Reaffirms 2016 Adjusted EPS expectations of $6.30 to $6.60 on sales of $56 billion to $58 billion

FARMINGTON, Conn., April 27, 2016 - United Technologies Corp. (NYSE:UTX) today reported first quarter 2016 results. All results in this release reflect continuing operations unless otherwise noted.

First quarter Adjusted EPS of $1.47 was up 2 percent versus the prior year. GAAP EPS for the first quarter was $1.42 per share, which included $0.05 of restructuring charges. Sales of $13.4 billion were flat year-over-year as 2 points of organic growth in the quarter was offset by 2 points of unfavorable foreign exchange.

“We are off to a solid start in 2016,” said UTC President and Chief Executive Officer Gregory Hayes. “UTC delivered strong operational performance in the first quarter with organic sales growth of 2 percent. We are also making progress on our strategic priorities, particularly our ability to invest in innovation as we continue to focus on structural cost reduction.”

Cash flow from operations for the quarter was $795 million and capital expenditures were $286 million. Free cash flow of 43 percent to net income was pressured by inventory build in support of the aerospace production ramp and included a payment of $237 million, the first of four annual payments related to the Canadian government settlement that was booked in the fourth quarter of 2015. For 2016, UTC continues to anticipate free cash flow in the range of 90 to 100 percent of net income attributable to common shareowners.

Otis new equipment orders in the quarter increased 1 percent over the prior year at constant currency, and grew 6 percent excluding China. Equipment orders at UTC Climate, Controls & Security decreased by 8 percent, primarily driven by a difficult compare in the refrigeration business. At Pratt & Whitney, commercial aftermarket sales were up 19 percent, and up 1 percent at UTC Aerospace Systems.

“Notwithstanding a slow-growth global macro environment, we remain confident in our full-year 2016 EPS outlook of $6.30 to $6.60 per share,” Hayes added. “As we look to the future, our focused portfolio of industry leading franchises is well-positioned to deliver on our commitments and create significant long-term shareowner value.”

UTC reiterated its 2016 outlook and continues to anticipate:

Adjusted EPS of $6.30 to $6.60 on sales of $56 billion to $58 billion;

Organic sales growth of 1% to 3%;

Free cash flow in the range of 90 to 100 percent of net income attributable to common shareowners;

Share repurchases of $3 billion in 2016, beyond the repurchases that will be completed in 2016 under the previously announced $6 billion accelerated share repurchase program; and

A $1 billion to $2 billion placeholder for acquisitions.

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

Adjusted EPS, adjusted segment margins and free cash flow are non-GAAP financial measures that are used in UTC’s financial press releases and webcasts. A reconciliation of these non-GAAP measures to the corresponding amounts prepared in accordance with generally accepted accounting principles (GAAP) is included in the tables to this press release.

Adjusted EPS and adjusted segment margin reflect continuing operations, excluding restructuring costs and other significant items of a non-recurring and/or non-operational nature (often referred to as “other significant items”). Management believes Adjusted EPS and adjusted segment margin are both useful in providing period to period comparisons of the results of the Company’s operational performance. The tables attached to this press release provide additional information as to the items and amounts that have been excluded from Adjusted EPS and adjusted segment margin.

Free cash flow represents cash flow from operations less capital expenditures. Management believes free cash flow provides a relevant measure of liquidity and a useful 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.

When we provide our expectations for Adjusted EPS and/or free cash flow on a forward-looking basis, the closest corresponding GAAP measures (expected EPS from continuing operations and expected cash flow from operations) and a reconciliation of the differences between the non-GAAP expectation and the corresponding GAAP measure generally are not available (except as otherwise indicated) 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. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.

Adjusted EPS, adjusted segment margins and free cash flow should not be considered in isolation or as substitutes for analysis of the Company’s results as reported under GAAP. Other companies may calculate adjusted EPS, adjusted segment margins and free cash flow differently than the Company does, limiting the usefulness of those measures for comparisons with such other companies.

Cautionary Statement

This press release includes statements that constitute “forward-looking statements” under the securities laws. Forward-looking statements often contain words such as “believe,” “expect,” “plans,” “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, charges, expenditures, share repurchases, acquisitions and divestitures, orders, foreign exchange rate assumptions 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 research and development spending; levels of end market demand in construction and in the aerospace industry; levels of air travel; financial condition of commercial airlines; the impact of

government budget and funding decisions on the economy; changes in government procurement priorities and funding; weather conditions and natural disasters; delays and disruption in delivery of materials and services from suppliers; company and customer directed cost reduction efforts and restructuring costs and consequences thereof; the impact of acquisitions, dispositions, joint ventures and similar transactions; the development and production of new products and services; the impact of diversification across product lines, regions and industries; the impact of legal proceedings, investigations and other contingencies; pension plan assumptions and future contributions; the effect of changes in tax, environmental and other laws and regulations and political conditions; and other factors beyond our control. The level and timing of discretionary share repurchases (those outside the company’s current accelerated share repurchase program) depend upon market conditions, the level of other investing activities and uses of cash, and discretionary share repurchases may be suspended at any time. The forward-looking statements speak only as of the date of this press release and we undertake no obligation to update or revise any forward-looking statements as of a later date. 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 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.

UTC-IR

United Technologies Corporation

Condensed Consolidated Statement of Operations

Quarter Ended March 31,

(Unaudited)

(Millions, except per share amounts)

Net Sales

13,357

13,320

Costs and Expenses:

Cost of products and services sold

Research and development

Selling, general and administrative

Total Costs and Expenses

11,558

11,546

Other income, net

Operating profit

Interest expense, net

Income from continuing operations before income taxes

Income tax expense

Less: Noncontrolling interest in subsidiaries' earnings from continuing operations

Income from continuing operations attributable to common shareowners

Discontinued operations:

Income from operations

Gain on disposal

Income from discontinued operations

Less: Noncontrolling interest in subsidiaries' earnings from discontinued operations

Income from discontinued operations attributable to common shareowners

Net income attributable to common shareowners

Earnings Per Share of Common Stock - Basic:

From continuing operations attributable to common shareowners

From discontinued operations attributable to common shareowners

Earnings Per Share of Common Stock - Diluted:

Weighted Average Number of Shares Outstanding:

Basic shares

Diluted shares

As described on the following pages, consolidated results for the quarters ended

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.

Segment Net Sales and Operating Profit

(Millions)

Segment Sales

13,536

13,477

Eliminations and other

Consolidated Net Sales

Segment Operating Profit

General corporate expenses

Consolidated Operating Profit

Segment Operating Profit Margin

include restructuring costs and significant non-recurring and non-operational items that management believes should be considered when evaluating the underlying financial performance.

Reconciliation of Reported to Adjusted Results

In Millions - Income (Expense)

Restructuring Costs included in Operating Profit:

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

UTC Climate, Controls & Security:

Gain on fair value adjustment on acquisition of controlling interest in a joint venture

Total impact on Consolidated Operating Profit

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

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

Adjusted income from continuing operations attributable to common shareowners

Diluted Earnings Per Share from Continuing Operations

Impact on Diluted Earnings Per Share from Continuing Operations

Adjusted Diluted Earnings Per Share from Continuing Operations

Segment Net Sales and Operating Profit Adjusted for Restructuring Costs and

Significant Non-recurring and Non-operational Items (as reflected on the previous page)

Adjusted Operating Profit

Adjusted Consolidated Operating Profit

Adjusted Segment Operating Profit Margin

Condensed Consolidated Balance Sheet

December 31,

Assets

Cash and cash equivalents

Accounts receivable, net

10,899

10,653

Inventories and contracts in progress, net

Other assets, current

Total Current Assets

27,527

26,706

Fixed assets, net

Goodwill

27,408

27,301

Intangible assets, net

15,719

15,603

Total Assets

88,571

87,484

Liabilities and Equity

Short-term debt

Accounts payable

Accrued liabilities

12,581

14,638

Total Current Liabilities

20,523

22,618

Long-term debt

21,688

19,320

Other long-term liabilities

16,330

16,580

Total Liabilities

58,541

58,518

Redeemable noncontrolling interest

Shareowners' Equity:

16,154

15,928

Treasury Stock

(31,082

(30,907

Retained earnings

50,625

49,956

Accumulated other comprehensive loss

(7,344

(7,619

Total Shareowners' Equity

28,353

27,358

Total Equity

29,903

28,844

Total Liabilities and Equity

Debt Ratios:

Debt to total capitalization

Net debt to net capitalization

Condensed Consolidated Statement of Cash Flows

Operating Activities of Continuing Operations:

Net income from continuing operations

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

Depreciation and amortization

Deferred income tax provision

Stock compensation cost

Change in working capital

Global pension contributions

Other operating activities, net

Net cash flows provided by operating activities of continuing operations

Investing Activities of Continuing Operations:

Capital expenditures

Acquisitions and dispositions of businesses, net

Increase in collaboration intangible assets

Receipts from settlements of derivative contracts

Other investing activities, net

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

Financing Activities of Continuing Operations:

Issuance of long-term debt, net

Increase in short-term borrowings, net

Dividends paid on Common Stock

Repurchase of Common Stock

(3,000

Other financing activities, net

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

(1,383

Discontinued Operations:

Net cash used in operating activities

(2,227

Net cash used in investing activities

Net cash used in financing activities

Net cash flows used in discontinued operations

Effect of foreign exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents of continuing operations, end of period

Less: Cash and cash equivalents of assets held for sale

Free Cash Flow Reconciliation

Net income attributable to common shareowners from continuing operations

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

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

Free cash flow from continuing operations

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

Adjusted Net Sales, Adjusted Operating Profit and Adjusted EPS are non-GAAP financial measures. Adjusted Net Sales represents Net Sales excluding significant items of a non-recurring and non-operational nature. Adjusted Operating Profit represents operating profit excluding restructuring costs and other significant items of a non-recurring and non-operational nature. Adjusted EPS represents diluted earnings per share from continuing operations, excluding restructuring costs and other significant items of a non-recurring and non-operational nature. Management believes Adjusted Net Sales, Adjusted Operating Profit and Adjusted EPS 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.

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.

Organic sales growth is a non-GAAP financial measure that represents the total reported increase within the Corporation's ongoing businesses less the impact of foreign currency translation, acquisitions and divestitures completed in the preceding twelve months and significant non-recurring and non-operational items.

Free cash flow is a non-GAAP financial measure that represents cash flow from operations less capital expenditures. Management believes free cash flow provides 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.

Adjusted Net Sales, Adjusted Operating Profit, Adjusted EPS and free cash flow should not be considered in isolation or as substitutes for analysis of the Company’s results as reported under GAAP. Other companies may calculate Adjusted Net Sales, Adjusted Operating Profit, Adjusted EPS and free cash flow differently than the Company does, limiting the usefulness of those measures for comparisons with other companies.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

To receive a free e-mail notification whenever United Technologies Corporation makes a similar move, sign up!

Other recent filings from the company include the following:

Amendments to Articles of Incorporation or - April 25, 2016