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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 8-K

 

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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 19, 2006

 

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UNITED TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

 

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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)

 

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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))

 

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Section 2—Financial Information

Item 2.02. Results of Operations and Financial Condition

On April 19, 2006, United Technologies Corporation issued a press release announcing its first quarter 2006 results.

The press release issued April 19, 2006 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

(d) Exhibits.

The following exhibit is included herewith:

 

Exhibit Number		Exhibit Description
99.1		Press release, dated April 19, 2006, issued by United Technologies Corporation.

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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 19, 2006		By:		/s/ Gregory J. Hayes
				Gregory J. Hayes Vice President, Accounting and Control

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EXHIBIT INDEX

 

Exhibit Number		Exhibit Description		Page
99.1		Press release, dated April 19, 2006, issued by United Technologies Corporation		1

Exhibit 99.1

UTC REPORTS FIRST QUARTER EPS INCREASE OF 19 PERCENT ON 13 PERCENT REVENUE

GROWTH; INCREASES 2006 EPS OUTLOOK

HARTFORD, Conn., April 19, 2006 – United Technologies Corp. (NYSE:UTX) today reported first quarter 2006 earnings per share increased 19 percent to $0.76 compared with the year ago first quarter. Consolidated revenues for the quarter increased 13 percent to $10.6 billion, reflecting organic growth of 9 percent and the impact of 2005 acquisitions, primarily Kidde.

“This is a great start to 2006 and supports increasing our full year earnings outlook. We now expect earnings per share in a range of $3.50 to $3.60 for the year, up from the prior range of $3.40 to $3.55. Given the organic growth in the quarter and current backlogs, revenues for the year should be in the range of $46 billion.” said UTC Chairman and Chief Executive Officer George David. “We confirm expectations for cash flow after capital expenditures equal to net income for the year,” he added.

First quarter net income increased 18 percent to $768 million. In the quarter, foreign currency translation reduced earnings by $0.02 per share and revenues by 2 percent.

“Revenues grew organically in the quarter at 9 percent in spite of lower revenues at Sikorsky due to the strike which has now been settled. Cost reductions and productivity continued to fuel margin expansions at Carrier and UTC Fire & Security. Overcoming the adverse impacts of the Sikorsky strike, stronger dollar and R&D calendarization, this is as good a quarter as we have seen in a long time,” David said.

Cash flow from operations was $975 million and, after capital expenditures of $201 million, slightly exceeded net income for the quarter. Share repurchase in the quarter was $375 million, on track with share repurchase guidance of $1.5 billion for the year.

First quarter results include restructuring costs of $31 million offset by an equal gain on the sale of marketable securities. Additional favorable items are anticipated in 2006 which will be used to offset trailing costs from prior restructuring actions as well as to fund potential new actions initiated throughout the year. Total restructuring for 2006 should equal or exceed one time favorable items.

The accompanying tables include information integral to assessing the company’s financial position, operating performance, and cash flow.

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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 revenue, 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 included in UTC’s 10-K and 10-Q Reports under the headings “Business”, “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Cautionary Note Concerning Factors that May Affect Future Results”, as well as the information included in UTC’s Current Reports on Form 8-K.

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United Technologies Corporation

Condensed Consolidated Statement of Operations

 

(Millions, except per share amounts)		Quarter Ended March 31, (Unaudited)
		2006			2005
Revenues		$	10,615		$	9,407
Cost and Expenses
Cost of goods and services sold			7,650			6,815
Research and development			369			291
Selling, general and administrative			1,314			1,213
Operating Profit			1,282			1,088
Interest expense			142			100
Income before income taxes and minority interests			1,140			988
Income taxes			319			277
Minority interests			53			60
Net Income		$	768		$	651
Earnings Per Share of Common Stock
Basic		$	0.78		$	0.66
Diluted		$	0.76		$	0.64
Average Shares
Basic			984			992
Diluted			1,009			1,016

As described on the following pages, consolidated results for the quarters ended March 31, 2006 and 2005 include restructuring and related charges and non-recurring items.

See accompanying Notes to Condensed Consolidated Financial Statements.

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United Technologies Corporation

Segment Revenues and Operating Profit

 

		Quarter Ended March 31, (Unaudited)
(Millions)		2006				2005
Revenues
Otis		$	2,348			$	2,322
Carrier			2,904				2,705
UTC Fire & Security			1,112				764
Pratt & Whitney			2,568				2,013
Hamilton Sundstrand			1,164				1,028
Sikorsky			512				605
Segment Revenues			10,608				9,437
Eliminations and other			7				(30	)
Consolidated Revenues		$	10,615			$	9,407
Operating Profit
Otis		$	439			$	422
Carrier			204				152
UTC Fire & Security			65				39
Pratt & Whitney			430				340
Hamilton Sundstrand			181				152
Sikorsky			3				53
Segment Operating Profit			1,322				1,158
Eliminations and other			45				11
General corporate expenses			(85	)			(81	)
Consolidated Operating Profit		$	1,282			$	1,088

As described on the following pages, consolidated results for the quarters ended March 31, 2006 and 2005 include restructuring and related charges and non-recurring items.

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United Technologies Corporation

Consolidated Operating Profit

Consolidated operating profit for the quarters ended March 31, 2006 and 2005 includes restructuring and related charges as follows:

 

		Quarter Ended March 31, (Unaudited)
(Millions)		2006			2005
Restructuring and Related Charges
Otis		$	2		$	5
Carrier			7			25
UTC Fire & Security			2			1
Pratt & Whitney			12			10
Hamilton Sundstrand			8			9
Sikorsky			—			—
Segment Operating Profit			31			50
Eliminations and other			—			—
General corporate expenses			—			—
Consolidated Operating Profit		$	31		$	50

Consolidated results for the quarters ended March 31, 2006 and 2005 include the following non-recurring items:

2006

Q1

 

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Pratt & Whitney: Approximately $25 million gain realized on the sale of a partnership interest in an engine program at Pratt Canada.

 

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Eliminations and Other: Approximately $25 million gain from the sale of marketable securities.

2005

Q1

 

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Eliminations and Other: Approximately $30 million gain from the sale of marketable securities.

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United Technologies Corporation

Condensed Consolidated Balance Sheet

 

		March 31, 2006				December 31, 2005
(Millions)		(Unaudited)				(Unaudited)
Assets
Cash and cash equivalents		$	2,417			$	2,247
Accounts receivable, net			7,128				7,240
Inventories and contracts in progress, net			6,472				5,659
Other current assets			2,104				2,060
Total Current Assets			18,121				17,206
Fixed assets, net			5,677				5,623
Goodwill, net			13,254				13,007
Intangible assets, net			3,030				3,059
Other assets			6,949				7,030
Total Assets		$	47,031			$	45,925
Liabilities and Shareowners’ Equity
Short-term debt		$	2,319			$	2,305
Accounts payable			4,017				3,820
Accrued liabilities			9,657				9,220
Total Current Liabilities			15,993				15,345
Long-term debt			5,954				5,935
Other liabilities			6,926				6,876
Total Liabilities			28,873				28,156
Minority interest in subsidiary companies			801				778
Shareowners’ Equity:
Common Stock			8,737				8,552
Treasury Stock			(7,789	)			(7,418	)
Retained Earnings			16,601				16,051
Accumulated other non-shareowners’ changes in equity			(192	)			(194	)
			17,357				16,991
Total Liabilities and Shareowners’ Equity		$	47,031			$	45,925
Debt Ratios:
Debt to total capitalization			32	%			33	%
Net debt to net capitalization			25	%			26	%

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United Technologies Corporation

Condensed Statement of Cash Flows

 

		Quarter Ended March 31, (Unaudited)
		2006				2005
(Millions)
Operating Activities
Net Income		$	768			$	651
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization			264				226
Deferred income taxes and minority interest			32				98
Stock compensation cost			44				35
Changes in working capital			(174	)			(104	)
Voluntary contributions to pension plans			—				(65	)
Other, net			41				5
Net Cash Provided by Operating Activities			975				846
Investing Activities
Capital expenditures			(201	)			(152	)
Acquisitions and disposal of businesses, net			(90	)			(120	)
Other, net			(36	)			98
Net Cash Used in Investing Activities			(327	)			(174	)
Financing Activities
Decrease in borrowings, net			(14	)			(735	)
Dividends paid on Common Stock			(207	)			(208	)
Repurchase of Common Stock			(375	)			(115	)
Other, net			112				82
Net Cash Used in Financing Activities			(484	)			(976	)
Effect of foreign exchange rates			6				2
Net increase (decrease) in cash and cash equivalents			170				(302	)
Cash and cash equivalents - beginning of period			2,247				2,265
Cash and cash equivalents - end of period		$	2,417			$	1,963

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United Technologies Corporation

Notes to Condensed Consolidated Financial Statements

 

(1)	Certain reclassifications have been made to prior year amounts to conform to current year presentation.

 

(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)

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 2006 include approximately $25 million from the sale of marketable securities. Non-recurring revenues that are not included in organic growth in 2005 include approximately $30 million from the sale of marketable securities. Constant currency represents reported revenues or operating profits less the impact of foreign currency translation.