UTC – United Technologies Corporation: United Technologies Reports First Quarter 2018 Results, Raises 2018 Outlook

Tickers: UTX
  • Strong sales and operating profit drive United Technologies' positive momentum in Q1;
  • Adjusted operating profit growth across all four business units;
  • Raises sales and adjusted EPS outlook for 2018
  • Sales of $15.2 billion, up 10 percent versus prior year including 6 percent organic growth
  • GAAP EPS of $1.62, down 6 percent versus prior year reflecting the absence of a one-time gain in Q1 2017
  • Adjusted EPS of $1.77, up 20 percent versus prior year
FARMINGTON, Conn., April 24, 2018/PRNewswire/ -- United Technologies Corp. (NYSE: UTX) today reported first quarter 2018 results and increased its full year sales and adjusted EPS outlook.

'We are off to a solid start in 2018,' said UTC Chairman and Chief Executive Officer Gregory Hayes. 'Sales were up 10 percent, including 6 percent organic growth which represented our strongest first quarter organic growth rate since 2011, with all four businesses contributing. Our focus on innovation and execution is clearly paying off.'

Top Company Interviews

Microsoft Corporation
Intel Corporation
Pfizer, Inc.
General Electric Company
'Based on a strong first quarter performance and solid fundamentals at each of our businesses, we are raising our 2018 sales outlook to a range of $63to $64.5 billionand raising our adjusted EPS outlook range to $6.95to $7.15.* We remain committed to executing on our strategic priorities and are well positioned to deliver sustainable long-term shareowner value,' Hayes concluded.

First quarter sales of $15.2 billionwere up 10 percent over the prior year, including 6 points of organic sales growth and 3 points of foreign exchange. GAAP EPS of $1.62included 15 centsof net restructuring charges and other significant items and was down 6 percent versus the prior year, reflecting the absence of a one-time gain booked in Q1 2017. Adjusted EPS of $1.77was up 20 percent with adjusted operating profit growth at all four segments.

Net income in the quarter was $1.3 billion, down 6 percent versus the prior year. Cash flow from operations was $453 millionand capital expenditures were $337 million. Free cash flow was $116 millionreflecting higher use of working capital from strong organic growth and the timing of shipments, principally at Pratt & Whitney and UTC Climate, Controls & Security. UTC continues to expect $4.5to $5.0 billion* of free cash flow in 2018.

In the quarter, commercial aftermarket sales were up 18 percent at Pratt & Whitney and up 16 percent at UTC Aerospace Systems. Otis new equipment orders were down 4 percent organically versus the prior year. Equipment orders at UTC Climate, Controls & Security increased 10 percent organically.

UTC updates its 2018 outlook and now anticipates:

  • Adjusted EPS of $6.95to $7.15, up from $6.85to $7.10*;
  • Sales of $63.0to $64.5 billion, up from $62.5to $64.0 billion;
  • There is no change in the Company's previously provided 2018 expectations for organic sales growth of 4 to 6 percent* or free cash flow of $4.5to $5.0 billion.*
*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 https://edge.media-server.com/m6/p/ynvi9ko4, 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 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 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, adjusted operating profit, 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, operating profit, 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 communication 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,' 'outlook,' '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, tax rates and other measures of financial performance or potential future plans, strategies or transactions of United Technologies or the combined company following United Technologies' pending acquisition of Rockwell Collins, the anticipated benefits of the pending acquisition, including estimated synergies, the expected timing of financing and completion of the transaction and other statements that are not historical facts. 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 United Technologies and Rockwell Collins 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) the scope, nature, impact or timing of acquisition and divestiture or restructuring activity, including the pending acquisition of Rockwell Collins, including among other things integration of acquired businesses into United Technologies' existing businesses and realization of synergies and opportunities for growth and innovation; (4) future timing and levels of indebtedness, including indebtedness expected to be incurred by United Technologies in connection with the pending Rockwell Collins acquisition, and capital spending and research and development spending, including in connection with the pending Rockwell Collins acquisition; (5) future availability of credit and factors that may affect such availability, including credit market conditions and our capital structure; (6) the timing and scope of future repurchases of United Technologies' common stock, which may be suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash, including in connection with the proposed acquisition of Rockwell; (7) delays and disruption in delivery of materials and services from suppliers; (8) company and customer-directed cost reduction efforts and restructuring costs and savings and other consequences thereof; (9) new business and 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 United Technologies and Rockwell Collins 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; (16) the effect of changes in tax (including U.S. tax reform enacted on December 22, 2017, which is commonly referred to as the Tax Cuts and Jobs Act of 2017), environmental, regulatory (including among other things import/export) and other laws and regulations in the U.S. and other countries in which United Technologies and Rockwell Collins operate; (17) the ability of United Technologies and Rockwell Collins to receive the required regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the merger) and to satisfy the other conditions to the closing of the pending acquisition on a timely basis or at all; (18) the occurrence of events that may give rise to a right of one or both of United Technologies or Rockwell Collins to terminate the merger agreement, including in circumstances that might require Rockwell Collins to pay a termination fee of $695 millionto United Technologies or $50 millionof expense reimbursement; (19) negative effects of the announcement or the completion of the merger on the market price of United Technologies' and/or Rockwell Collins' common stock and/or on their respective financial performance; (20) risks related to Rockwell Collins and United Technologies being restricted in their operation of their businesses while the merger agreement is in effect; (21) risks relating to the value of the United Technologies' shares to be issued in connection with the pending Rockwell acquisition, significant merger costs and/or unknown liabilities; (22) risks associated with third party contracts containing consent and/or other provisions that may be triggered by the Rockwell merger agreement; (23) risks associated with merger-related litigation or appraisal proceedings; and (24) the ability of United Technologies and Rockwell Collins, or the combined company, to retain and hire key personnel. There can be no assurance that United Technologies' pending acquisition of Rockwell Collins or any other transaction described above will in fact be consummated in the manner described or at all. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see the reports of United Technologies and Rockwell Collins on Forms S-4, 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 United Technologies and Rockwell Collins 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. In addition, in connection with the pending Rockwell Collins acquisition, UTC has filed a registration statement, that includes a prospectus from UTC and a proxy statement from Rockwell Collins, which is effective and contains important information about UTC, Rockwell Collins, the transaction and related matters.

UTC-IR

United Technologies Corporation

Condensed Consolidated Statement of Operations

Quarter Ended March 31,

(Unaudited)

(Millions, except per share amounts)

2018

2017

Net Sales

$

15,242

$

13,815

Costs and Expenses:

Cost of products and services sold

11,280

10,136

Research and development

554

586

Selling, general and administrative

1,711

1,537

Total Costs and Expenses

13,545

12,259

Other income, net

231

588

Operating profit

1,928

2,144

Non-service pension (benefit)

(191)

(123)

Interest expense, net

229

213

Income from operations before income taxes

1,890

2,054

Income tax expense

522

586

Net income from operations

1,368

1,468

Less: Noncontrolling interest in subsidiaries' earnings from operations

71

82

Net income attributable to common shareowners

$

1,297

$

1,386

Earnings Per Share of Common Stock:

Basic

$

1.64

$

1.75

Diluted

$

1.62

$

1.73

Weighted Average Number of Shares Outstanding:

Basic shares

790

794

Diluted shares

800

802

We adopted ASU 2014-09, Revenue from Contracts with Customers, and its related amendments (collectively, the New Revenue Standard) effective January 1, 2018and elected the modified retrospective approach. The results for periods before 2018 were not adjusted for the new standard and the cumulative effect of the change in accounting was recognized through retained earnings at the date of adoption. See 'The New Revenue Standard Adoption Impact' for further details. As described on the following pages, consolidated results for the quarters ended March 31, 2018and 2017 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 March 31,

(Unaudited)

(Millions)

2018

2017

Net Sales

Otis

$

3,037

$

2,804

UTC Climate, Controls & Security

4,376

3,892

Pratt & Whitney

4,329

3,758

UTC Aerospace Systems

3,817

3,611

Segment Sales

15,559

14,065

Eliminations and other

(317)

(250)

Consolidated Net Sales

$

15,242

$

13,815

Operating Profit

Otis

$

450

$

447

UTC Climate, Controls & Security

592

931

Pratt & Whitney

413

356

UTC Aerospace Systems

588

531

Segment Operating Profit

2,043

2,265

Eliminations and other

(11)

(18)

General corporate expenses

(104)

(103)

Consolidated Operating Profit

$

1,928

$

2,144

Segment Operating Profit Margin

Otis

14.8

%

15.9

%

UTC Climate, Controls & Security

13.5

%

23.9

%

Pratt & Whitney

9.5

%

9.5

%

UTC Aerospace Systems

15.4

%

14.7

%

Segment Operating Profit Margin

13.1

%

16.1

%

We adopted ASU 2014-09, Revenue from Contracts with Customers, and its related amendments (collectively, the New Revenue Standard) effective January 1, 2018and elected the modified retrospective approach. The results for periods before 2018 were not adjusted for the new standard and the cumulative effect of the change in accounting was recognized through retained earnings at the date of adoption. See 'The New Revenue Standard Adoption Impact' for further details. As described on the following pages, consolidated results for the quarters ended March 31, 2018and 2017 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 March 31,

(Unaudited)

In Millions - Income (Expense)

2018

2017

Income from operations attributable to common shareowners

$

1,297

$

1,386

Restructuring Costs included in Operating Profit:

Otis

(26)

(5)

UTC Climate, Controls & Security

(14)

(23)

Pratt & Whitney

-

-

UTC Aerospace Systems

(27)

(23)

Eliminations and other

(2)

(1)

(69)

(52)

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

UTC Climate, Controls & Security

-

379

Eliminations and other

(30)

1

(30)

380

Total impact on Consolidated Operating Profit

(99)

328

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

19

(124)

Significant non-recurring and non-operational items included in Income Tax Expense

(44)

-

Less: Impact on Net Income Attributable to Common Shareowners

(124)

204

Adjusted income attributable to common shareowners

$

1,421

$

1,182

Diluted Earnings Per Share

$

1.62

$

1.73

Impact on Diluted Earnings Per Share

(0.15)

0.25

Adjusted Diluted Earnings Per Share

$

1.77

$

1.48

Effective Tax Rate

27.6

%

28.5

%

Impact on Effective Tax Rate

(2.6)

%

(1.7)

%

Adjusted Effective Tax Rate

25.0

%

26.8

%

Details of the significant non-recurring and non-operational items included within operating profit, interest and income tax of continuing operations for the quarters ended March 31, 2018and 2017 above are as follows:

Quarter Ended March 31,

(Unaudited)

In Millions - Income (Expense)

2018

2017

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

Gain on sale of investments in Watsco, Inc.

$

-

$

379

Transaction and integration costs related to merger agreement with Rockwell Collins, Inc.

(30)

-

Gain on sale of available-for-sale securities

-

1

$

(30)

$

380

Significant non-recurring and non-operational items included in Income Tax Expense

Unfavorable income tax adjustments related to the estimated impact of the U.S. tax
reform legislation enacted on December 22, 2017

$

(44)

$

-

$

(44)

$

-

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 two pages)

Quarter Ended March 31,

(Unaudited)

(Millions)

2018

2017

Adjusted Net Sales

Otis

$

3,037

$

2,804

UTC Climate, Controls & Security

4,376

3,892

Pratt & Whitney

4,329

3,758

UTC Aerospace Systems

3,817

3,611

Segment Sales

15,559

14,065

Eliminations and other

(317)

(250)

Adjusted Consolidated Net Sales

$

15,242

$

13,815

Adjusted Operating Profit

Otis

$

476

$

452

UTC Climate, Controls & Security

606

575

Pratt & Whitney

413

356

UTC Aerospace Systems

615

554

Segment Operating Profit

2,110

1,937

Eliminations and other

19

(19)

General corporate expenses

(102)

(102)

Adjusted Consolidated Operating Profit

$

2,027

$

1,816

Adjusted Segment Operating Profit Margin

Otis

15.7

%

16.1

%

UTC Climate, Controls & Security

13.8

%

14.8

%

Pratt & Whitney

9.5

%

9.5

%

UTC Aerospace Systems

16.1

%

15.3

%

Adjusted Segment Operating Profit Margin

13.6

%

13.8

%

United Technologies Corporation

Components of Changes in Net Sales

Quarter Ended March 31, 2018 Compared with Quarter Ended March 31, 2017

Factors Contributing to Total % Change in Net Sales

Organic

FX

Translation

Acquisitions /

Divestitures, net

Other

Total

Otis

1%

6%

-

1%

8%

UTC Climate, Controls & Security

7%

5%

-

-

12%

Pratt & Whitney

9%

1%

-

5%

15%

UTC Aerospace Systems

5%

1%

-

-

6%

Consolidated

6%

3%

-

1%

10%

United Technologies Corporation

Condensed Consolidated Balance Sheet

March 31,

December 31,

2018

2017

(Millions)

(Unaudited)

(Unaudited)

Assets

Cash and cash equivalents

$

7,667

$

8,985

Accounts receivable, net

11,699

12,595

Contract assets, current

2,989

-

Inventories and contracts in progress, net

8,938

9,881

Other assets, current

1,448

1,397

Total Current Assets

32,741

32,858

Fixed assets, net

10,283

10,186

Goodwill

28,339

27,910

Intangible assets, net

15,995

15,883

Other assets

11,421

10,083

Total Assets

$

98,779

$

96,920

Liabilities and Equity

Short-term debt

$

2,194

$

2,496

Accounts payable

8,875

9,579

Accrued liabilities

7,951

12,316

Contract liabilities, current

5,727

-

Total Current Liabilities

24,747

24,391

Long-term debt

25,153

24,989

Other long-term liabilities

16,252

15,988

Total Liabilities

66,152

65,368

Redeemable noncontrolling interest

135

131

Shareowners' Equity:

Common Stock

17,557

17,489

Treasury Stock

(35,619)

(35,596)

Retained earnings

55,533

55,242

Accumulated other comprehensive loss

(6,937)

(7,525)

Total Shareowners' Equity

30,534

29,610

Noncontrolling interest

1,958

1,811

Total Equity

32,492

31,421

Total Liabilities and Equity

$

98,779

$

96,920

Debt Ratios:

Debt to total capitalization

46

%

47

%

Net debt to net capitalization

38

%

37

%

We adopted ASU 2014-09, Revenue from Contracts with Customers, and its related amendments (collectively, the New Revenue Standard) effective January 1, 2018and elected the modified retrospective approach. The results for periods before 2018 were not adjusted for the new standard and the cumulative effect of the change in accounting was recognized through retained earnings at the date of adoption. See 'The New Revenue Standard Adoption Impact' for further details. See accompanying Notes to Condensed Consolidated Financial Statements.

United Technologies Corporation

Condensed Consolidated Statement of Cash Flows

Quarter Ended

March 31,

(Unaudited)

(Millions)

2018

2017

Operating Activities:

Net income from operations

$

1,368

$

1,468

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

Depreciation and amortization

581

512

Deferred income tax provision

42

109

Stock compensation cost

55

47

Change in working capital

(972)

(475)

Global pension contributions

(37)

(46)

Canadian government settlement

(221)

(246)

Other operating activities, net

(363)

(376)

Net cash flows provided by operating activities

453

993

Investing Activities:

Capital expenditures

(337)

(325)

Acquisitions and dispositions of businesses, net

(90)

(100)

Proceeds from sale of investments in Watsco, Inc.

-

596

Increase in collaboration intangible assets

(78)

(101)

Payments from settlements of derivative contracts

(221)

(113)

Other investing activities, net

(250)

(96)

Net cash flows used in investing activities

(976)

(139)

Financing Activities:

Payments of long-term debt, net

(975)

(27)

Increase in short-term borrowings, net

666

567

Dividends paid on Common Stock

(535)

(505)

Repurchase of Common Stock

(25)

(933)

Other financing activities, net

(41)

(31)

Net cash flows used in financing activities

(910)

(929)

Effect of foreign exchange rate changes on cash and cash equivalents

119

69

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

(1,314)

(6)

Cash, cash equivalents and restricted cash, beginning of period

9,018

7,189

Cash, cash equivalents and restricted cash, end of period

7,704

7,183

Less: Restricted cash, included in Other assets

37

27

Cash and cash equivalents, end of period

$

7,667

$

7,156

See accompanying Notes to Condensed Consolidated Financial Statements.

United Technologies Corporation

Free Cash Flow Reconciliation

Quarter Ended March 31,

(Unaudited)

(Millions)

2018

2017

Net income attributable to common shareowners

$

1,297

$

1,386

Net cash flows provided by operating activities

$

453

$

993

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

35

%

72

%

Capital expenditures

(337)

(325)

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

(26)

%

(23)

%

Free cash flow

$

116

$

668

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

9

%

48

%

Notes to Condensed Consolidated Financial Statements

Certain reclassifications have been made to the prior year amounts to conform to the current year presentation.

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.

United Technologies Corporation
The New Revenue Standard Adoption Impact

The following schedule quantifies the impact of adopting the New Revenue Standard on the statement of operations for the three months ended March 31, 2018. The effect of the new standard represents the increase (decrease) in the line item based on the adoption of the New Revenue Standard.

(dollars in millions)

March 31,
2018, under
previous
standard

Effect of the
New Revenue
Standard

March 31, 2018
as reported

Net Sales

$

15,020

$

222

$

15,242

Costs and Expenses:

Cost of products and services sold

11,054

226

11,280

Research and development

574

(20)

554

Selling, general and administrative

1,710

1

1,711

Total Costs and Expenses

13,338

207

13,545

Other income, net

232

(1)

231

Operating profit

1,914

14

1,928

Non-service pension (benefit)

(191)

-

(191)

Interest expense, net

229

-

229

Income from operations before income taxes

1,876

14

1,890

Income tax expense

518

4

522

Net income

1,358

10

1,368

Less: Noncontrolling interest in subsidiaries' earnings

69

2

71

Net income attributable to common shareowners

$

1,289

$

8

$

1,297

The following schedule quantifies the impact of adopting the New Revenue Standard on segment net sales and operating profit.

(dollars in millions)

Effect of the New Revenue
Standard

Net sales

Operating
Profit

Otis

$

28

$

(2)

UTC Climate, Controls & Security

-

-

Pratt & Whitney

200

12

UTC Aerospace Systems

(6)

4

Consolidated

$

222

$

14

The following schedule reflects the effect of the New Revenue Standard on our balance sheet as of March 31, 2018.

(dollars in millions)

March 31,
2018, under
previous
standard

Effect of the
New Revenue
Standard

March 31, 2018
as reported

Assets

Accounts receivable, net

$

13,105

$

(1,406)

$

11,699

Inventories

10,788

(1,850)

8,938

Contract assets, current

-

2,989

2,989

Other assets, current

1,456

(8)

1,448

Intangible assets, net

16,064

(69)

15,995

Other assets

10,485

936

11,421

Liabilities and Equity

Accrued liabilities

$

13,547

$

(5,596)

$

7,951

Contract liabilities, current

-

5,727

5,727

Other long term liabilities

15,319

933

13,405

Retained earnings

56,005

(472)

55,533

Contact:

Media Inquiries, UTC

(860) 493-4149

Investor Relations, UTC

(860) 728-7608

SOURCE United Technologies Corp.

Disclaimer

UTC - United Technologies Corporation published this content on 24 April 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 24 April 2018 11:05:10 UTC