HARTFORD, Conn., Oct. 21, 2014 /PRNewswire/ -- United Technologies Corp. (NYSE:UTX) reported third quarter earnings per share of $2.04 and net income attributable to common shareowners of $1.9 billion, up 32 percent and 31 percent respectively over the year ago quarter.  Results for the current quarter include $0.22 per share of favorable one-time items net of restructuring costs.  Earnings per share in the year ago quarter included $0.08 of restructuring costs and one-time items.  Excluding these items in both quarters, earnings per share increased 12 percent year over year.

Sales of $16.2 billion increased 5 percent, all driven by organic growth.  Third quarter segment operating profit increased 16 percent over the prior year, with operating margin of 17.5 percent.  Excluding restructuring costs and net one-time items, segment operating profit grew 8 percent with 60 basis points of operating margin expansion to 17.2 percent.  

"UTC delivered another quarter of solid performance," said Louis Chênevert, UTC Chairman & Chief Executive Officer.  "Along with strong margin expansion and a fifth consecutive quarter of organic sales growth, we've seen increased demand for our integrated building solutions and revenue synergy opportunities for our Building & Industrial Systems businesses.  We also achieved a number of significant program milestones that position UTC for long-term growth. These include supporting the first flight of the Airbus A320neo with Pratt & Whitney's new Geared Turbofan engines and unveiling Sikorsky's next-generation S-97 Raider helicopter."

Otis new equipment orders in the quarter increased 4 percent over the prior year at constant currency.  Equipment orders at UTC Climate, Controls & Security increased 5 percent excluding early order activity ahead of next year's SEER-14 standard change.  Large commercial engine spares orders were up 1 percent at Pratt & Whitney and commercial spares orders increased 11 percent at UTC Aerospace Systems.  Commercial aftermarket sales were up 7 percent and 10 percent at Pratt & Whitney and UTC Aerospace Systems, respectively. 

"With double-digit earnings and 4 percent organic sales growth through the first three quarters, UTC remains on track to deliver on our expectations for the year," said Chênevert. "Our solid backlog and organic growth trends continue to give us confidence in our earnings per share range of $6.75 to $6.85, on sales of about $65 billion."

Cash flow from operations was $1.9 billion and capital expenditures were $415 million in the quarter. Share repurchase was $425 million.  UTC now expects share repurchase of $1.5 billion for the year, up from the previous expectation of $1.35 billion.  As a result of ongoing investment to support the aerospace upcycle, the company continues to anticipate 2014 cash flow from operations less capital expenditures of about 90 percent of net income attributable to common shareowners.

United Technologies Corp., based in Hartford, 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

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 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 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 difficulties 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 of share repurchases depends upon market conditions and the level of other investing activities and uses of cash. 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

Contact:

Kate Ruppar, UTC
(860) 728-6515

Investor Relations
(860) 728-7608

www.utc.com

United Technologies Corporation
Condensed Consolidated Statement of Operations

United Technologies Corporation
Segment Net Sales and Operating Profit

United Technologies Corporation
Restructuring Costs and Non-Recurring Items Included in Consolidated Results

Details of the non-recurring items for the quarters and nine months ended September 30, 2014 and 2013 above are as follows:

Quarter Ended September 30, 2014

UTC Climate, Controls & Security:  Approximately $30 million net gain from UTC Climate, Controls & Security's ongoing portfolio transformation, primarily due to a gain on the sale of an interest in a joint venture in North America.

Pratt & Whitney:  Approximately $83 million net gain, primarily as a result of fair value adjustments related to a business acquisition.

Interest Expense, Net: Approximately $23 million of favorable pre-tax interest adjustments, primarily related to the resolution of disputes with the Appeals Division of the IRS for the Company's 2006 - 2008 tax years.

Income Tax Expense: Approximately $118 million of favorable income tax adjustments, primarily related to the resolution of disputes with the Appeals Division of the IRS for the Company's 2006 - 2008 tax years.

Quarter Ended June 30, 2014

Pratt & Whitney:

• Approximately $60 million charge to adjust the fair value of a Pratt & Whitney joint venture investment.
• Approximately $22 million charge for impairment of assets related to a joint venture.

Sikorsky: 

• A cumulative adjustment to record $830 million in sales and $438 million in losses based upon the change in estimate required for the contractual amendments signed with the Canadian Government on the Maritime Helicopter program.
• Approximately $28 million charge for the impairment of a Sikorsky joint venture investment.

Eliminations & Other:  Approximately $220 million gain on an agreement with a state taxing authority for the monetization of tax credits.

Interest Expense, Net: Approximately $21 million of favorable pre-tax interest adjustments, primarily related to the conclusion of the IRS's examination of the Company's 2009 and 2010 tax years.

Income Tax Expense: Approximately $253 million of favorable income tax adjustments related to the conclusion of the IRS's examination of the Company's 2009 and 2010 tax years, as well as the settlement of state income taxes related to the disposition of the Hamilton Sundstrand Industrials businesses.

Quarter Ended September 30, 2013

Pratt & Whitney: Approximately $25 million charge to adjust the fair value of a Pratt & Whitney joint venture investment.

Income Tax Expense: Favorable tax benefit of approximately $24 million as a result of a U.K. tax rate reduction enacted in July 2013.

Quarter Ended June 30, 2013

Pratt & Whitney:  Approximately $193 million gain from the sale of the Pratt & Whitney Power Systems business.  This gain was not reclassified to "Discontinued Operations" due to our expected level of continuing involvement in the business post disposition.

Interest Expense, Net: Approximately $36 million of favorable pre-tax interest adjustments related to settlements for the Company's tax years prior to 2006, as well as the conclusion of certain IRS examinations of 2009 and 2010 tax years.

Income Tax Expense: Approximately $22 million of favorable income tax adjustments related to the conclusion of certain IRS examinations of 2009 and 2010 tax years.

Quarter Ended March 31, 2013

UTC Climate, Controls & Security:  Approximately $38 million net gain from UTC Climate, Controls & Security's ongoing portfolio transformation, primarily due to a gain on the sale of a business in Hong Kong.

Income Tax Expense:  Approximately $95 million of favorable income tax adjustments as a result of the enactment of the American Taxpayer Relief Act of 2012 in January 2013.  The $95 million is primarily related to the retroactive extension of the research and development credit to 2012.

United Technologies Corporation
Segment Net Sales and Operating Profit Adjusted for Restructuring Costs and Non-Recurring Items (as reflected on the previous pages)

United Technologies Corporation
Condensed Consolidated Balance Sheet

United Technologies Corporation
Condensed Consolidated Statement of Cash Flows

United Technologies Corporation
Free Cash Flow Reconciliation

Notes to Condensed Consolidated Financial Statements

(1)   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.

(2)   Organic sales growth 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 items.

(3)   Free cash flow, which represents cash flow from operations less capital expenditures, is the principal cash performance measure used by UTC. 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 UTC's common stock and distribution of earnings to shareholders.  Other companies that use the term free cash flow may calculate it differently.  The reconciliation of net cash flow provided by operating activities, prepared in accordance with generally accepted accounting principles, to free cash flow is shown above.

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SOURCE United Technologies Corp.