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United Technologies Outlines Financing Structure for Proposed Goodrich Acquisition; Expects 2012 Earnings Per Share Growth of 0 to 4 Percent From Continuing Operations Including Goodrich

 

HARTFORD, Conn., March 15, 2012 /PRNewswire/ -- In a meeting with investors and analysts, United Technologies Corp. (NYSE: UTX) today updated its financing plan for the proposed $16.5 billion cash acquisition of Goodrich Corp. (NYSE: GR), including expected proceeds of approximately $3 billion from net divestitures and $1.5 billion from mandatory convertible instruments.  

UTC businesses identified for sale include Pratt & Whitney Rocketdyne, Clipper Windpower and the Hamilton Sundstrand Industrial businesses: Milton Roy, Sullair and Sundyne.  These businesses are treated as held for sale and have been moved to discontinued operations in UTC's financial statements.  Gains realized at the time of closing are expected to be greater than impairment charges in discontinued operations.

"We are taking the opportunity to re-evaluate our portfolio as we enter a transformational stage with the proposed acquisitions of Goodrich and Rolls-Royce's share in the International Aero Engines joint venture," said UTC Chairman & Chief Executive Officer Louis Chenevert. "The proceeds from divestitures of non-core businesses will help minimize the equity issuance and reduce dilution from the Goodrich transaction.

"The Goodrich transaction remains on track for a mid-year close," added Chenevert. "Including Goodrich, we expect United Technologies' EPS from continuing operations in 2012 of $5.30 to $5.50, up 0 to 4 percent."

On the same basis, the company expects 2012 sales of $61 to $62 billion, up 9 to 11 percent and cash flow from operations less capital expenditures to equal or exceed net income attributable to common shareowners.  The accompanying tables contain 2011 financial results revised for discontinued operations.

United Technologies Corp., based in Hartford, Connecticut, is a diversified company providing 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.

This release includes statements that constitute "forward-looking statements" under the securities laws. Forward-looking statements often contain words such as "believe," "expect," "plans," "strategy," "prospects," "estimate," "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, financing plans, charges, expenditures, proceeds of divestitures, results of operations, uses of cash 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 indebtedness and capital and 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 weather conditions and natural disasters; the financial condition of our customers and suppliers; delays and disruption in delivery of materials and services from suppliers; cost reduction efforts and restructuring costs and savings and other consequences thereof; the scope, nature or impact of acquisitions, dispositions, joint ventures and other business arrangements, including integration of acquired businesses; the timing of completion of the previously announced transactions with Goodrich and Rolls-Royce; the timing and impact of anticipated dispositions of non-core businesses; the timing and amount of anticipated gains, losses, impairments and charges related to such dispositions; the timing and impact of anticipated financings in connection with the anticipated Goodrich transaction; the development and production of new products and services; the anticipated benefits of diversification and balance of operations across product lines, regions and industries; the impact of the negotiation of collective bargaining agreements, and labor disputes; the outcome of legal proceedings and other contingencies; future availability of credit; pension plan assumptions and future contributions; and the effect of changes in tax, environmental and other laws and regulations and political conditions in countries in which we operate and other factors beyond our control. The closing of the Goodrich acquisition is subject to customary closing conditions, including regulatory approvals. The transaction with Rolls-Royce is also subject to customary closing conditions, including regulatory approvals. The completion of the proposed divestitures of non-core businesses is subject to uncertainties, including the ability to secure disposition agreements on acceptable terms; the satisfaction of information, consultation, and / or negotiations obligations, if any, with employee representatives; and satisfaction of other customary conditions  These forward-looking statements speak only as of the date of this release and we undertake no obligation to update or revise any forward-looking statements after we distribute this release. For additional information identifying factors that may cause actual results to vary materially from those stated in the 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:

John Moran, UTC

 

(860) 728-7062

  

United Technologies Corporation

2011 Revised for Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Year Ended

 

 

 

 

 

 

March 31

 

June 30

 

September 30

 

December 31

 

December 31

 

 

(in millions)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Otis 

 

 

$

2,772

 

$

3,192

 

$

3,262

 

$

3,211

 

$

12,437

 

 

 

 UTC Climate, Controls & Security 

 

 

 

4,393

 

 

5,140

 

 

4,921

 

 

4,410

 

 

18,864

 

 

 

 Pratt & Whitney 

 

 

 

2,873

 

 

3,276

 

 

3,081

 

 

3,481

 

 

12,711

 

 

 

 Hamilton Sundstrand 

 

 

 

1,138

 

 

1,171

 

 

1,187

 

 

1,264

 

 

4,760

 

 

 

 Sikorsky 

 

 

 

1,582

 

 

1,786

 

 

1,877

 

 

2,110

 

 

7,355

 

 

 

 Total Segment Sales 

 

 

 

12,758

 

 

14,565

 

 

14,328

 

 

14,476

 

 

56,127

 

 

 

Eliminations and other

 

 

 

(78)

 

 

(83)

 

 

(88)

 

 

(92)

 

 

(341)

 

 

 

Consolidated Sales

 

 

$

12,680

 

$

14,482

 

$

14,240

 

$

14,384

 

$

55,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Otis

 

 

$

630

 

$

743

 

$

731

 

$

711

 

$

2,815

 

 

 

UTC Climate, Controls & Security

 

 

 

471

 

 

665

 

 

615

 

 

461

 

 

2,212

 

 

 

Pratt & Whitney

 

 

 

428

 

 

424

 

 

496

 

 

519

 

 

1,867

 

 

 

Hamilton Sundstrand

 

 

 

172

 

 

185

 

 

204

 

 

198

 

 

759

 

 

 

Sikorsky

 

 

 

141

 

 

277

 

 

215

 

 

207

 

 

840

 

 

 

Total Segment Operating Profit

 

 

 

1,842

 

 

2,294

 

 

2,261

 

 

2,096

 

 

8,493

 

 

 

Eliminations and other

 

 

 

(65)

 

 

(49)

 

 

(29)

 

 

(138)

 

 

(281)

 

 

 

General corporate expenses

 

 

 

(89)

 

 

(104)

 

 

(102)

 

 

(124)

 

 

(419)

 

 

 

Consolidated Operating Profit

 

 

 

1,688

 

 

2,141

 

 

2,130

 

 

1,834

 

 

7,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

148

 

 

141

 

 

140

 

 

66

 

 

495

 

 

Income from continuing operations before income taxes

 

 

 

1,540

 

 

2,000

 

 

1,990

 

 

1,768

 

 

7,298

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

486

 

 

609

 

 

618

 

 

395

 

 

2,108

 

 

Income from continuing operations

 

 

 

1,054

 

 

1,391

 

 

1,372

 

 

1,373

 

 

5,190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

90

 

 

79

 

 

74

 

 

64

 

 

307

 

 

 

Income tax expense

 

 

 

43

 

 

40

 

 

25

 

 

15

 

 

123

 

 

 

Income from discontinued operations

 

 

 

47

 

 

39

 

 

49

 

 

49

 

 

184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

1,101

 

 

1,430

 

 

1,421

 

 

1,422

 

 

5,374

 

 

Less: Non-controlling interest in subsidiaries' earnings

 

 

 

89

 

 

112

 

 

97

 

 

97

 

 

395

 

 

Net income attributable to common shareowners

 

 

$

1,012

 

$

1,318

 

$

1,324

 

$

1,325

 

$

4,979

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share - Basic

 

 

$

1.08

 

$

1.44

 

$

1.44

 

$

1.44

 

$

5.38

 

 

 

Earnings per Share - Diluted

 

 

 

1.06

 

 

1.41

 

 

1.42

 

 

1.42

 

 

5.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share - Basic

 

 

$

0.05

 

$

0.04

 

$

0.05

 

$

0.05

 

$

0.20

 

 

 

Earnings per Share - Diluted

 

 

 

0.05

 

 

0.04

 

 

0.05

 

 

0.05

 

 

0.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SOURCE United Technologies Corp.

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