Summary
United Technologies Corporation (UTC) presented its 2011 annual report, highlighting a diversified business model spanning aerospace and commercial sectors. The company's operations are divided into six key segments: Otis (elevators and escalators), Carrier (HVAC and refrigeration), UTC Fire & Security, Pratt & Whitney (aircraft engines), Hamilton Sundstrand (aerospace systems), and Sikorsky (helicopters). A significant strategic move announced in September 2011 was the reorganization into two new segments: UTC Climate, Controls & Security (combining Carrier and UTC Fire & Security) and UTC Propulsion & Aerospace Systems (encompassing Pratt & Whitney and Hamilton Sundstrand), effective early 2012. This restructuring aims to drive growth and efficiency through greater integration. Financially, UTC's performance in 2011 was robust, supported by strong performance in its aerospace divisions, particularly from government contracts, and steady contributions from its commercial businesses. The company also highlighted substantial investments in research and development, underscoring its commitment to innovation and technological advancement. A major forward-looking development was the announced agreement to acquire Goodrich Corporation, signaling a significant expansion in the aerospace and defense sector, expected to close in mid-2012.
Financial Highlights
49 data points| Revenue | $55.75B |
| Cost of Revenue | $29.25B |
| Gross Profit | $26.50B |
| R&D Expenses | $1.95B |
| SG&A Expenses | $6.16B |
| Operating Expenses | $48.48B |
| Operating Income | $7.85B |
| Net Income | $4.98B |
| EPS (Basic) | $5.58 |
| EPS (Diluted) | $5.49 |
| Shares Outstanding (Basic) | 892.30M |
| Shares Outstanding (Diluted) | 906.80M |
Key Highlights
- 1UTC announced a significant organizational restructuring effective Q1 2012, creating two new segments: UTC Climate, Controls & Security and UTC Propulsion & Aerospace Systems, to enhance integration and efficiency.
- 2The company is in the process of acquiring Goodrich Corporation for an enterprise value of $18.4 billion, a strategic move expected to bolster its position in the aerospace and defense industry.
- 3Pratt & Whitney is a key player in developing advanced engine technologies, including the PurePower PW1000G Geared TurboFan engine, selected for new aircraft programs like the Airbus A320neo and Bombardier CSeries.
- 4International sales represented a substantial portion of UTC's revenue, accounting for 61% of total segment sales in 2011, indicating a strong global presence.
- 5Research and development expenditures were significant, totaling $2.1 billion in 2011 (3.5% of total sales), with an additional $1.9 billion in contract R&D funded by the U.S. government.
- 6The company operates with a diversified revenue stream, with commercial and industrial sales comprising approximately 58% of consolidated net sales in 2011, and aerospace sales making up the remaining 42% (22% commercial, 20% military).
- 7UTC faces various risks including economic downturns, competition in the aerospace and construction industries, government contract regulations, and foreign currency fluctuations, which are detailed in the Risk Factors section.