•Reports record sales, adjusted earnings per share and free cash flow in 2019; Announces 2020 outlook for Pratt & Whitney and Collins Aerospace

FARMINGTON, Conn., Jan. 28, 2020 /PRNewswire/ --

Fourth Quarter 2019
•Sales of $19.6 billion, up 8 percent versus prior year, including 1 percent organic growth
•GAAP EPS of $1.32, up 59 percent versus prior year
•Adjusted EPS of $1.94, down 1 percent versus prior year

Full Year 2019
•Sales of $77.0 billion, up 16 percent versus prior year including 5 percent organic growth
•GAAP EPS of $6.41, down 1 percent versus prior year
•Adjusted EPS of $8.26, up 9 percent versus prior year

United Technologies Corp. (NYSE: UTX) reported fourth quarter and full year 2019 results and announced its 2020 outlook for Pratt & Whitney and Collins Aerospace Systems.

"United Technologies delivered record sales, adjusted earnings per share and free cash flow in 2019 on continued aerospace strength and a return to profit growth at Otis," said UTC Chairman and Chief Executive Officer Gregory Hayes. "Organic sales grew 5 percent and adjusted earnings and free cash flow exceeded the high end of the ranges we expected. In a year of unprecedented change, our 2019 financial performance is a testament to our focus on our customers and the hard work and dedication of the 240,000 employees across UTC."

Hayes continued, "Operational separation activities for Otis and Carrier are substantially complete, and we are executing the final steps required to spin both businesses as independent companies early in the second quarter. We also remain excited about the transformational merger of UTC's aerospace businesses with Raytheon to create Raytheon Technologies, which will be the premier aerospace and defense systems and services provider. Our goal is to have the merger ready to close concurrent with the portfolio separation."

Fourth Quarter 2019Fourth quarter sales of $19.6 billion were up 8 percent over the prior year, including 1 point of organic sales growth and 8 points of net acquisition benefit, offset by 1 point of foreign exchange headwind. GAAP EPS of $1.32 was up 59 percent versus the prior year and included 46 cents of net nonrecurring charges and 16 cents of restructuring charges. Adjusted EPS of $1.94 was down 1 percent versus the prior year.

Net income in the quarter was $1.1 billion, up 67 percent versus the prior year and included $540 million of net nonrecurring charges. Cash flow from operations was $2.8 billion and capital expenditures were $897 million, resulting in free cash flow of $1.9 billion.

Collins Aerospace commercial aftermarket sales were up 42 percent and up 9 percent organically. On a pro forma basis, Collins Aerospace commercial aftermarket sales were up 11 percent including Rockwell Collins. Pratt & Whitney commercial aftermarket sales were flat, following 11 percent growth in 2018. Equipment orders at Carrier were down 4 percent organically. Otis new equipment orders were up 3 percent at constant currency in the quarter and flat on a rolling twelve month basis.

Full Year 2019 Full year sales of $77.0 billion were up 16 percent over the prior year, including 5 points of organic sales growth and 12 points of net acquisition benefit, offset by 1 point of foreign exchange headwind. Full year GAAP EPS of $6.41 was down 1 percent versus the prior year and included $1.85 of net restructuring charges and other significant items, including $1.46 of one-time portfolio separation costs. Adjusted EPS of $8.26 was up 9 percent versus the prior year.

Net income for the year was $5.5 billion, up 5 percent versus the prior year. Cash flow from operations was $8.9 billion and capital expenditures were $2.3 billion, resulting in free cash flow of $6.6 billion, including approximately $400 million of one-time portfolio separation cash costs.

In 2019, the Pratt & Whitney GTF engine achieved over 4.6 million cumulative revenue flight hours and ended the year with 47 operators benefiting from reduced fuel burn, emissions and noise. Collins Aerospace continued to deliver strong performance and achieved approximately $300 million in cost synergies during the year, remaining on track to deliver at least $600 million in cost synergies by year four. Otis completed one of the largest and most complex modernization projects to date at the Empire State Building, including the installation of a custom-made Gen2 glass elevator. Carrier continued its commitment to innovation, launching more than 100 new products for the fifth year in a row.

Outlook for 2020Given the upcoming portfolio actions, the outlook for sales, adjusted EPS and free cash flow for Raytheon Technologies will be provided after the merger closes.

The outlooks for Carrier and Otis will be provided in conjunction with their upcoming pre-spin investor meetings scheduled for February 10th and 11th, respectively.

For Pratt & Whitney and Collins Aerospace, we provide the following 2020 outlook*:
•Pratt & Whitney sales up mid single digit versus 2019;
•Pratt & Whitney adjusted operating profit up $225 to $275 million versus 2019;
•Collins Aerospace sales down low single digit versus 2019, including an estimated 5 point headwind resulting from the suspension of 737 MAX production, lower ADS-B mandate sales and the expected impact of divestitures associated with the Raytheon merger;
•Collins Aerospace adjusted operating profit down $275 to $325 million versus 2019, including an estimated headwind of approximately $550 to $600 million resulting from the 737 MAX, lower ADS-B mandate profit and the expected impact of divestitures associated with the Raytheon merger.

*Note: When we provide expectations for adjusted operating profit 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.

Additional information, including a webcast, is available at www.utc.com or https://edge.media-server.com/mmc/p/iiouw4sk, or to listen to the earnings call by phone, dial (877) 280-7280 between 7:40 a.m. and 8:00 a.m. ET. To learn more about UTC, visit the website or follow the company on Twitter: @UTC