UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 20, 2005
UNITED TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 1-812 | 06-0570975 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
One Financial Plaza
Hartford, Connecticut 06103
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code
(860) 728-7000
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2—Financial Information
Item 2.02. Results of Operations and Financial Condition
On April 20, 2005, United Technologies Corporation issued a press release announcing its first quarter 2005 results.
The press release issued April 20, 2005 is furnished herewith as Exhibit No. 99.1 to this Report, and shall not be deemed filed for the purposes of Section 18 of the Exchange Act.
Section 9—Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
| (c) | Exhibits. |
The following exhibit is included herewith:
| Exhibit Number |
Exhibit Description | |
| 99.1 | Press release, dated April 20, 2005, issued by United Technologies Corporation. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UNITED TECHNOLOGIES CORPORATION (Registrant) | ||||
| Date: April 20, 2005 | By: | /s/ Gregory J. Hayes | ||
| Gregory J. Hayes | ||||
| Vice President, Accounting and Control | ||||
EXHIBIT INDEX
| Exhibit Number |
Exhibit Description |
Page | ||
| 99.1 | Press release, dated April 20, 2005, issued by United Technologies Corporation | 1 |
Exhibit 99.1
UTC REPORTS FIRST QUARTER EARNINGS PER SHARE INCREASE 19 PERCENT;
IMPROVES 2005 EPS OUTLOOK
HARTFORD, Conn., April 20, 2005 – United Technologies Corp. (NYSE:UTX) today reported first quarter 2005 earnings per share increased 19 percent to $1.28 compared with the year ago first quarter. Consolidated revenues increased 9 percent to $9.4 billion, reflecting six points of organic growth and contribution from the Linde commercial refrigeration business.
“This is an exceptional start to 2005 and gives us confidence to raise our full year earnings outlook accordingly. We now expect full year earnings growth of 12 to 16 percent, or $5.90 to $6.15 per share on a pre-split basis. With Kidde now closed we see revenues of approximately $43 billion for the year,” said Chairman and Chief Executive Officer George David.
UTC announced at its Annual Meeting last week a two-for-one stock split, effective June 10, 2005.
First quarter net income increased $100 million to $651 million, including stock option expense in both years. Cash flow from operations was $846 million, including $65 million in voluntary pension contributions. After capital expenditures of $152 million, cash flow again exceeded net income in the quarter.
“Double digit profit growth at Otis, Pratt & Whitney, Sikorsky, and UTC Fire & Security fueled margin expansion in the quarter,” said David. “The businesses are executing well, overcoming $100 million in higher commodity costs in the quarter while delivering strong cash flow. With a good economic environment worldwide, solid organic growth, and the recent addition of Kidde, we see continued momentum across the company. UTC is in great shape,” David added.
First quarter results include $50 million of restructuring costs and a smaller gain from the sale of an equity security. Restructuring costs, including approximately $100 million of additional trailing costs from previously announced actions, are expected to exceed favorable items for the year.
First quarter 2004 results included a $.06 per share charge at Pratt & Whitney for collaboration accounting litigation dating from more than ten years ago.
Foreign currency translation added $.03 to earnings per share in the quarter.
The company also affirmed guidance for 2005 cash flow from operations less capital expenditures equal to net income before potential voluntary contributions of $500 million to pension plans.
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 revenues, earnings, cash flow 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, 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 in the “Business” section of UTC’s Annual Report on Form 10-K, the information included in UTC’s 10-K and 10-Q Reports under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and the information included in Current Reports on Form 8-K. # # #
United Technologies Corporation
Condensed Consolidated Statement of Operations
| Quarter Ended March 31, |
||||||||
| (Millions, except per share amounts)
|
2005 |
2004 |
||||||
| Revenues | $ | 9,407 | $ | 8,646 | ||||
| Cost and Expenses | ||||||||
| Cost of goods and services sold |
6,815 | 6,275 | ||||||
| Research and development |
291 | 311 | ||||||
| Selling, general and administrative |
1,213 | 1,140 | ||||||
| Operating Profit |
1,088 | 920 | ||||||
| Interest expense |
100 | 87 | ||||||
| Income before income taxes and minority interests |
988 | 833 | ||||||
| Income taxes |
(277 | ) | (230 | ) | ||||
| Minority interests |
(60 | ) | (52 | ) | ||||
| Net Income |
$ | 651 | $ | 551 | ||||
| Earnings Per Share of Common Stock | ||||||||
| Basic |
$ | 1.31 | $ | 1.11 | ||||
| Diluted |
$ | 1.28 | $ | 1.08 | ||||
| Average Shares | ||||||||
| Basic |
496 | 498 | ||||||
| Diluted |
508 | 508 | ||||||
As described on the following pages, consolidated results for the quarters ended March 31, 2005 and 2004 include restructuring and related charges and favorable items.
United Technologies Corporation
Segment Revenues and Operating Profit
| Quarter Ended March 31, (Unaudited) |
||||||||
| (Millions)
|
2005 |
2004 |
||||||
| Revenues | ||||||||
| Otis |
$ | 2,322 | $ | 2,102 | ||||
| Carrier |
2,705 | 2,230 | ||||||
| UTC Fire & Security |
764 | 703 | ||||||
| Pratt & Whitney |
2,013 | 1,939 | ||||||
| Hamilton Sundstrand |
1,028 | 926 | ||||||
| Sikorsky |
605 | 560 | ||||||
| Segment Revenues |
9,437 | 8,460 | ||||||
| Eliminations and other |
(30 | ) | 186 | |||||
| Consolidated Revenues |
$ | 9,407 | $ | 8,646 | ||||
| Operating Profit | ||||||||
| Otis |
$ | 422 | $ | 302 | ||||
| Carrier |
152 | 62 | ||||||
| UTC Fire & Security |
39 | 31 | ||||||
| Pratt & Whitney |
340 | 206 | ||||||
| Hamilton Sundstrand |
152 | 131 | ||||||
| Sikorsky |
53 | 46 | ||||||
| Segment Operating Profit |
1,158 | 778 | ||||||
| Eliminations and other |
11 | 217 | ||||||
| General corporate expenses |
(81 | ) | (75 | ) | ||||
| Consolidated Operating Profit |
$ | 1,088 | $ | 920 | ||||
As described on the following page, consolidated results for the quarters ended March 31, 2005 and 2004 include restructuring and related charges and favorable items.
United Technologies Corporation
Consolidated Operating Profit
Consolidated operating profit for the quarters ended March 31, 2005 and 2004 includes restructuring and related charges as follows:
| Quarter Ended March 31, | ||||||
| Restructuring and Related Charges | 2005 |
2004 | ||||
| Otis |
$ | 5 | $ | 68 | ||
| Carrier |
25 | 113 | ||||
| UTC Fire & Security |
1 | — | ||||
| Pratt & Whitney |
10 | 51 | ||||
| Hamilton Sundstrand |
9 | 20 | ||||
| Sikorsky |
— | 1 | ||||
| Segment Operating Profit |
50 | 253 | ||||
| Corporate Expense |
— | — | ||||
| Eliminations and other |
— | 6 | ||||
| Consolidated Operating Profit |
$ | 50 | $ | 259 | ||
Consolidated results for the quarters ended March 31, 2005 and 2004 include the following favorable items:
2005
| • | $32 million gain from the sale of a portion of the shares held in Snecma, a French aerospace company (included in eliminations and other) |
2004
| • | $250 million gain following a payment from DaimlerChrysler in consideration for the Corporation’s release of certain commitments made by DaimlerChrysler in support of MTU Aero Engines GmbH (included in eliminations and other) |
United Technologies Corporation
Condensed Consolidated Balance Sheet
| (Millions)
|
March 31, 2005 (Unaudited) |
December 31, 2004 (Audited) |
||||||
| Assets | ||||||||
| Cash and cash equivalents |
$ | 1,963 | $ | 2,265 | ||||
| Accounts receivable, net |
6,564 | 6,315 | ||||||
| Inventories and contracts in progress, net |
5,298 | 5,006 | ||||||
| Other current assets |
1,921 | 1,936 | ||||||
| Total Current Assets |
15,746 | 15,522 | ||||||
| Fixed assets, net |
5,160 | 5,231 | ||||||
| Goodwill, net |
10,003 | 10,111 | ||||||
| Intangible assets, net |
1,988 | 2,016 | ||||||
| Other assets |
7,638 | 7,413 | ||||||
| Total Assets |
$ | 40,535 | $ | 40,293 | ||||
| Liabilities and Shareowners’ Equity | ||||||||
| Short-term debt |
$ | 622 | $ | 1,360 | ||||
| Accounts payable |
3,603 | 3,490 | ||||||
| Accrued liabilities |
8,528 | 8,097 | ||||||
| Total Current Liabilities |
12,753 | 12,947 | ||||||
| Long-term debt |
4,223 | 4,231 | ||||||
| Other liabilities |
7,932 | 7,939 | ||||||
| Minority interest in subsidiary companies |
927 | 910 | ||||||
| Total Liabilities |
25,835 | 26,027 | ||||||
| Shareowners’ Equity: |
||||||||
| Common Stock |
8,031 | 7,850 | ||||||
| Treasury Stock |
(6,423 | ) | (6,312 | ) | ||||
| Retained Earnings |
14,310 | 13,880 | ||||||
| Accumulated other non-shareowners’ changes in equity |
(1,218 | ) | (1,152 | ) | ||||
| 14,700 | 14,266 | |||||||
| Total Liabilities and Shareowners’ Equity |
$ | 40,535 | $ | 40,293 | ||||
| Debt Ratios: |
||||||||
| Debt to total capitalization |
25 | % | 28 | % | ||||
| Net debt to net capitalization |
16 | % | 19 | % | ||||
United Technologies Corporation
Condensed Statement of Cash Flows
| Quarter Ended March 31, (Unaudited) |
||||||||
| 2005 |
2004 |
|||||||
| Operating Activities | ||||||||
| Net Income |
$ | 651 | $ | 551 | ||||
| Adjustments to reconcile net income to net cash flows provided by operating activities: |
||||||||
| Depreciation and amortization |
226 | 262 | ||||||
| Deferred income taxes and minority interest |
98 | 55 | ||||||
| Stock compensation cost |
35 | 43 | ||||||
| Changes in working capital |
(104 | ) | 290 | |||||
| Voluntary contributions to pension plans |
(65 | ) | (308 | ) | ||||
| Other, net |
5 | (133 | ) | |||||
| Net Cash Provided by Operating Activities |
846 | 760 | ||||||
| Investing Activities | ||||||||
| Capital expenditures |
(152 | ) | (123 | ) | ||||
| Acquisitions and disposal of businesses, net |
(120 | ) | (41 | ) | ||||
| Other, net |
98 | 68 | ||||||
| Net Cash Used in Investing Activities |
(174 | ) | (96 | ) | ||||
| Financing Activities | ||||||||
| Decrease in borrowings, net |
(735 | ) | (281 | ) | ||||
| Dividends paid on Common Stock |
(208 | ) | (166 | ) | ||||
| Repurchase of Common Stock |
(115 | ) | (216 | ) | ||||
| Other, net |
82 | 104 | ||||||
| Net Cash Used in Financing Activities |
(976 | ) | (559 | ) | ||||
| Effect of foreign exchange rates |
2 | 3 | ||||||
| Net (decrease) increase in cash and cash equivalents |
(302 | ) | 108 | |||||
| Cash and cash equivalents - beginning of period |
2,265 | 1,623 | ||||||
| Cash and cash equivalents - end of period |
$ | 1,963 | $ | 1,731 | ||||
United Technologies Corporation
Notes to Condensed Consolidated Financial Statements
| (1) | UTC adopted Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), “Share-Based Payment”, (SFAS 123(R)) as of January 1, 2005 using the modified retrospective method described in the standard. This standard requires the cost of stock options to be measured at fair value and recognized in the statement of operations on the grant date. In accordance with the standard all periods prior to January 1, 2005 were restated to reflect the impact of the standard as if it had been adopted on January 1, 1995, the original effective date of SFAS No. 123. |
| (2) | Certain reclassifications have been made to prior year amounts to conform to current year presentation. |
| (3) | 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. |
| (4) | Organic growth represents the total reported revenue 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. Non-recurring revenues that are not included in organic growth in 2005 include a $32 million gain on the sale of securities. Non-recurring revenues that were not included in organic growth in the first quarter of 2004 include the gain of $250 million associated with the payment from DaimlerChrysler. |