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Accelerate
2012 Annual Report
Financial and
Corporate Responsibility
Performance

Table of contents

  • Page 1
    2012 Annual Report Financial and Corporate Responsibility Performance Accelerate

  • Page 2
    ... and Chubb. Our aerospace businesses are Sikorsky helicopters, Pratt & Whitney aircraft engines and UTC Aerospace Systems. The company also operates a central research organization that pursues technologies for improving the performance, energy efficiency and cost of UTC products and processes...

  • Page 3
    ... we completed in 2012 made us a better, stronger, more focused company. Our big investments in commercial aerospace, our streamlined portfolio and new organizational structure, combined with our global scale and experienced leadership team, position us to deliver strong growth in 2013 and...

  • Page 4
    02 | UNITED TECHNOLOGIES CORPORATION LOUIS R. CHÊNEVERT CHAIRMAN & CHIEF EXECUTIVE OFFICER Today China accounts for half of the world's elevator market and continues to grow. In 2012, Otis expanded its leading presence in China, opening a new factory in Chongqing, one of the world's fastest-...

  • Page 5
    ...executing its portfolio transformation strategy, focusing on core businesses to drive organic growth and generating more than $100 million in integration synergies. At UTC Propulsion & Aerospace Systems, the team is focused on exceeding our target of delivering $400 million of annual savings related...

  • Page 6
    ... joint venture in India with Midea and the opening of a new India manufacturing facility to take advantage of that nation's fast-growing residential air-conditioning market. As always, United Technologies' performance over the past year reï¬,ects the dedication and hard work of our leadership team...

  • Page 7
    2012 ANNUAL REPORT | 05 We make products that make modern life possible - products that set the standard for energy efficiency, performance and reliability. 01 02 03 04 05

  • Page 8
    ... TECHNOLOGIES CORPORATION Growth United Technologies is uniquely positioned to benefit from widespread urbanization and the rapidly growing commercial aerospace market, accelerating our growth well into the future. The Boeing 787 Dreamliner is equipped with 20 major systems and components from UTC...

  • Page 9
    ...hundreds of new service technicians, and Otis is transitioning its high-rise center of excellence, global marketing and business development functions to China. We also are expanding our presence in India. In 2012, UTC Climate, Controls & Security formed a joint venture to manufacture and distribute...

  • Page 10
    08 | UNITED TECHNOLOGIES CORPORATION Performance Top performance means meeting - and exceeding - our customers' expectations. Our game-changing technologies and world-class products and services ensure that we deliver high customer value. Accelerate

  • Page 11
    ... largest acquisition in aerospace history, the employees of Goodrich and Hamilton Sundstrand came together as one integrated company. Intensive planning, coordination and teamwork resulted in seamless customer support and the achievement of all financial commitments. Otis and UTC Climate, Controls...

  • Page 12
    10 | UNITED TECHNOLOGIES CORPORATION Productivity Continuous improvement is in our DNA. In everything we do - from developing new products to finding better ways to serve our customers - we aim for ever higher levels of performance. Accelerate A UTC Climate, Controls & Security manufacturing ...

  • Page 13
    .... The Goodrich acquisition brings tremendous new capabilities and a complementary portfolio of products, including evacuation slides for aircraft such as the Airbus A380. In Monterrey, Mexico, UTC Climate, Controls & Security uses the ACE operating system to improve performance and better support...

  • Page 14
    ... | UNITED TECHNOLOGIES CORPORATION OTIS Ruixue Zhao, Yanlin Zhang Chongqing, China SIKORSKY Bob Arseneault, Joel Vigue, Stacy Sheard, Rod Duplin Coatesville, Pennsylvania Success Our employees have a reputation for innovative thinking - aiming for the biggest improvements and the best solutions...

  • Page 15
    2012 ANNUAL REPORT | 13 PRATT & WHITNEY Lulues Suhani East Hartford, Connecticut UTC CLIMATE, CONTROLS & SECURITY Subhash Chand Gurgaon, India We encourage and support lifelong learning. We launched our Employee Scholar Program in 1996. In 2012, we celebrated a milestone, reaching an investment ...

  • Page 16
    ... work. Everywhere we do business, we apply the highest standards of corporate responsibility and measure success with the same set of ethical, environmental and safety metrics. "Impacting organizational culture is an ongoing process, as opposed to a successful event. UTC's commitment to continuous...

  • Page 17
    .... We believe the highest standards of ethics and business conduct are fundamental to our success." LILY XU Pratt & Whitney Chengdu, China AMINA KHERBOUCHE UTC Climate, Controls & Security Québec, Canada MIKE MIRANDA Otis United Arab Emirates SANTOSH SETTY UTC Aerospace Systems Bengaluru, India

  • Page 18
    ...UNITED TECHNOLOGIES CORPORATION FIRST Robotics: Pratt & Whitney engineers Renee Jurek and Patrick Booth exemplify our commitment to "make things better." As volunteer mentors for Athena's Warriors - a high school team from West Hartford, Conn. - they share their time and expertise and help to build...

  • Page 19
    ... United States with Junior Achievement, a financial and business literacy program. China Children & Teenagers Fund: Tony Black, president and managing director of Otis China Limited, celebrates a partnership with the China Children & Teenagers Fund, which promotes safety education. UTC supported...

  • Page 20
    ...Financials United Technologies Corporation provides high-technology products and services to the building systems and aerospace industries worldwide through our industry-leading businesses. In 2012, UTC net sales were $57.7 billion. Earnings per share from continuing operations were $5.35 per share...

  • Page 21
    2012 ANNUAL REPORT | 19 Corporate Responsibility Key Performance Indicators measure UTC's sustainability goals and performance for current and discontinued operations. UTC reporting standards include the ongoing analysis and correction of data, as applicable, following the close of a reporting ...

  • Page 22
    20 | UNITED TECHNOLOGIES CORPORATION Business Highlights Elevators, escalators and moving walkways for all types of buildings, including commercial, residential, multipurpose malls, educational institutions and urban transportation systems. EMPLOYEES NET SALES OPERATING PROFIT 61,763 $12.1 ...

  • Page 23
    ...-party systems. Supra won six contract renewals to supply iBox products to real estate associations throughout the United States. Five of the contracts were for the new iBox BT, a real estate key box that can interact with Bluetooth smartphones. UTC Climate, Controls & Security reached a number of...

  • Page 24
    ..., interiors, landing gear, propellers, and aircraft wheels and brakes; power controls and sensing systems for electric systems, engine components, engine and control systems, fire protection, ISR systems, sensors and integrated systems, and space systems. EMPLOYEES NET SALES OPERATING PROFIT 40...

  • Page 25
    ... III aircraft and 40 additional engines are on contract for delivery. Pratt & Whitney AeroPower, a new division realigned from Hamilton Sundstrand, provides auxiliary and ground power units and small turbojet propulsion products to the aviation market. Pratt & Whitney completed the assembly...

  • Page 26
    ... and powerful and marketable idea. We seek and share ideas openly, and encourage diversity of experience and opinion. Successful businesses improve the human condition. We maintain the highest ethical, environmental and safety standards everywhere, and we encourage and celebrate our employees...

  • Page 27
    ... 99 100 FIVE-YEAR SUMMARY MANAGEMENT'S DISCUSSION AND ANALYSIS CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONSOLIDATED STATEMENT OF OPERATIONS CONSOLIDATED...

  • Page 28
    ... incremental research and development spending related to the Goodrich businesses that were acquired during 2012, and approximately $65 million at Pratt & Whitney to further advance development of multiple geared turbo fan platforms. Note 6 In connection with the acquisition of Goodrich, repurchases...

  • Page 29
    ... technology products and services to the building systems and aerospace industries. Our operations for the periods presented herein are classified into five principal business segments: Otis, UTC Climate, Controls & Security, Pratt & Whitney, UTC Aerospace Systems and Sikorsky. Otis and UTC Climate...

  • Page 30
    ... we expect an increase in organic growth, which, if realized, would contribute to operating profit growth, we also continue to invest in new platforms and new markets to position us for additional growth, while remaining focused on structural cost reduction, operational improvements and disciplined...

  • Page 31
    ... from business divestiture activities, primarily those related to UTC Climate, Controls & Security's ongoing portfolio transformation. Our earnings growth strategy contemplates earnings from organic sales growth, including growth from new product development and product improvements, structural cost...

  • Page 32
    ...programs at Sikorsky. The year-over-year increase in company-funded research and development in 2012, compared with 2011, primarily reflects increases at UTC Aerospace Systems as a result of incremental research and development spending related to the Goodrich businesses (13%) and at Pratt & Whitney...

  • Page 33
    ... on an equity investment at UTC Climate, Controls & Security, and $45 million of reserves established for legal matters. Interest Expense, Net (DOLLARS IN MILLIONS) 2012 2011 2010 Interest expense Interest income Interest expense, net Average interest expense rate during the year on: Short-term...

  • Page 34
    ... MILLIONS) 2012 2011 2010 2012 2011 Net income attributable to common shareowners from continuing operations Diluted earnings per share from continuing operations $ 4,847 $ 5.35 $ 4,831 $ 5.33 $ 4,195 $ 4.55 Otis UTC Climate, Controls & Security Pratt & Whitney UTC Aerospace Systems Sikorsky...

  • Page 35
    ... recorded net pre-tax restructuring charges in 2012 and 2011 as follows: (DOLLARS IN MILLIONS) 2012 2011 Otis UTC Climate, Controls & Security Pratt & Whitney UTC Aerospace Systems Sikorsky Restructuring costs recorded within continuing operations Restructuring costs recorded within discontinued...

  • Page 36
    ... Statements. SEGMENT REVIEW Net Sales (DOLLARS IN MILLIONS) Operating Profits 2010 2012 2011 2010 Operating Profit Margin 2012 2011 2010 2012 2011 Otis UTC Climate, Controls & Security Pratt & Whitney UTC Aerospace Systems Sikorsky Total segment Eliminations and other General corporate...

  • Page 37
    ... volume in Europe. UTC Climate, Controls & Security As described above, on September 28, 2011, we announced a new organizational structure that allows us to better serve customers through greater integration across product lines. As part of this new structure, effective January 1, 2012, we formed...

  • Page 38
    ... of security and fire protection for their businesses and residences. UTC Climate, Controls & Security provides its security and fire safety products and services under Chubb, Kidde and other brand names and sells directly to customers as well as through manufacturer representatives, distributors...

  • Page 39
    ... on an equity investment in Asia in 2011. Aerospace Businesses The financial performance of Pratt & Whitney, UTC Aerospace Systems and Sikorsky is directly tied to the economic conditions of the commercial aerospace and defense aerospace industries. In particular, Pratt & Whitney experiences intense...

  • Page 40
    38 UNITED TECHNOLOGIES CORPORATION Sikorsky continued to benefit from military spending, with approximately 86% of Sikorsky's 2012 helicopter deliveries based on military platforms. In July 2012, the U.S. Government and Sikorsky signed a five-year multiservice contract for approximately 650 H-60 ...

  • Page 41
    ...2012 ANNUAL REPORT 39 Effective July 1, 2012, the auxiliary power unit business (APU) of the UTC Aerospace Systems business segment was transferred to the Pratt & Whitney business segment. The APU business designs and manufactures a variety of products for commercial and military aircraft. Annual...

  • Page 42
    ... vehicle, space and undersea applications. Aftermarket services include spare parts, overhaul and repair, engineering and technical support and fleet maintenance programs. UTC Aerospace Systems sells aerospace products to airframe manufacturers, the U.S. and foreign governments, aircraft operators...

  • Page 43
    ...of profit contribution on higher sales (11%) and lower warranty costs (5%) partially offset by higher engineering and development (4%) and pension costs (6%). "Acquisitions and divestitures, net" is principally a result of the acquisition of Goodrich. 2011 Compared with 2010 The organic sales growth...

  • Page 44
    ... on the contribution of a business to a venture in the United Arab Emirates in 2011. 2011 Compared with 2010 The increase in organic sales (10%) was primarily attributable to higher military aircraft sales including higher international development aircraft sales and favorable military aircraft...

  • Page 45
    ... but market-valued investments, including real estate and private equity. Across our global pension plans, the continued recognition of prior pension losses and the impact of a lower discount rate, partially offset by additional funding and the positive returns experienced during 2012, are expected...

  • Page 46
    ... $157 million of net non-cash gains from the portfolio transformation activities at UTC Climate, Controls & Security, an approximately $218 million non-cash tax and interest benefit from the conclusion of the examination by the Internal Revenue Service (IRS) of our 2006 - 2008 tax years and an...

  • Page 47
    ... of acquisition opportunities. Capital expenditures increased $460 million primarily at Pratt & Whitney and Otis, reflecting expenditures related to investments in new programs and low-cost manufacturing facilities, as well as at UTC Aerospace Systems due to spending at legacy Goodrich businesses...

  • Page 48
    ... products purchased under the contract and, in the large commercial engine and wheels and brakes businesses, future highly probable sales of replacement parts required by regulation that are expected to be purchased subsequently for incorporation into the original equipment. Revenue projections...

  • Page 49
    ... Financial Statements. Also included within other intangible assets are commercial aerospace payments made to secure certain contractual rights to provide product on new aircraft platforms. Payments made on these contractual commitments are to be amortized as the related OEM and aftermarket units...

  • Page 50
    ... Government of $10.1 billion in 2012, $9.1 billion in 2011, and $9.1 billion in 2010. Employee Benefit Plans. We sponsor domestic and foreign defined benefit pension and other postretirement plans. Major assumptions used in the accounting for these employee benefit plans include the discount rate...

  • Page 51
    ... exchange for the increased ownership and collaboration interests and intellectual property license, Pratt & Whitney paid Rolls-Royce $1.5 billion at closing with additional payments due to Rolls-Royce contingent upon each hour flown by the V2500powered aircraft in service as of June 29, 2012 during...

  • Page 52
    .... As a result, we have established, and continually update, policies relating to environmental standards of performance for our operations worldwide. We believe that expenditures necessary to comply with the present regulations governing environmental protection will not have a material effect upon...

  • Page 53
    ... Discussion and Analysis 2012 ANNUAL REPORT 51 As previously disclosed, the U.S. Department of Justice (DOJ) sued us in 1999 in the U.S. District Court for the Southern District of Ohio, claiming that Pratt & Whitney violated the civil False Claims Act and common law. This lawsuit relates to the...

  • Page 54
    ... we have claimed related to a 1998 reorganization of the corporate structure of Otis operations in Germany. A portion of these tax benefits were disallowed by the local German Tax Office on July 5, 2012, as a result of the audit of tax years 1999 to 2000. The legal and factual issues relating to the...

  • Page 55
    ..."Other Matters Relating to Our Business as a Whole," and in the "Legal Proceedings" section. Additional important information as to these factors is included in this 2012 Annual Report in the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" under...

  • Page 56
    54 UNITED TECHNOLOGIES CORPORATION Management's Report on Internal Control over Financial Reporting The management of UTC is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide ...

  • Page 57
    ... sheets and the related consolidated statements of operations, of comprehensive income, of cash flows and of changes in equity present fairly, in all material respects, the financial position of United Technologies Corporation and its subsidiaries at December 31, 2012 and December 31, 2011, and the...

  • Page 58
    56 UNITED TECHNOLOGIES CORPORATION Consolidated Statement of Operations (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS; SHARES IN MILLIONS) 2012 2011 2010 Net Sales: Product sales Service sales Costs and Expenses: Cost of products sold Cost of services sold Research and development Selling, ...

  • Page 59
    Consolidated Financial Statements 2012 ANNUAL REPORT 57 Consolidated Statement of Comprehensive Income (DOLLARS IN MILLIONS) 2012 2011 2010 Net income Other comprehensive income (loss), net of tax (expense) benefit: Foreign currency translation adjustments Foreign currency translation ...

  • Page 60
    ... Long-term debt Future pension and postretirement benefit obligations Other long-term liabilities Total Liabilities Commitments and contingent liabilities (Notes 5 and 18) Redeemable non-controlling interest Shareowners' Equity: Capital Stock: Preferred Stock, $1 par value; 250,000 shares authorized...

  • Page 61
    Consolidated Financial Statements 2012 ANNUAL REPORT 59 Consolidated Statement of Cash Flows (DOLLARS IN MILLIONS) 2012 2011 2010 Operating Activities of Continuing Operations: Net income attributable to common shareowners Non-controlling interest in subsidiaries' earnings Net income Less: ...

  • Page 62
    ... of tax benefit of $67 Treasury Stock reissued under employee plans (3.6 million shares) Equity Units issuance Dividends on Common Stock Dividends on ESOP Common Stock Dividends attributable to non-controlling interest Redeemable non-controlling interest accretion Purchase of subsidiary shares from...

  • Page 63
    ...Financial Statements 2012 ANNUAL REPORT 61 Shareowners' Equity Accumulated Other Comprehensive Income (Loss) Redeemable Non-controlling Interest Retained Earnings Unearned ESOP Shares Non-controlling Interest Total Equity...) (337) (2) (4) 52 66 100 $ 36,776 $ (139) $ (5,448) $ 1,155 (18) 2 (34...

  • Page 64
    ... 2012 we acquired Goodrich Corporation (Goodrich). As a result of the acquisition, Goodrich became a wholly-owned subsidiary of UTC. The acquired Goodrich business and legacy Hamilton Sundstrand business have been combined to form a new segment named UTC Aerospace Systems. This segment and our Pratt...

  • Page 65
    ... include products purchased under contract and, in the large commercial engine and wheels and brakes businesses, future highly probable sales of replacement parts required by regulation that are expected to be purchased subsequently for incorporation into the original equipment. Revenue projections...

  • Page 66
    ... share of engine parts, incur their own production costs and make certain payments to Pratt & Whitney for shared or joint program costs. The reimbursement of a collaborator's share of program costs is recorded as a reduction of the related expense item at that time. UTC Climate, Controls & Security...

  • Page 67
    ...value of $18.3 billion, including $1.9 billion in net debt assumed. The acquired Goodrich businesses were combined with the legacy Hamilton Sundstrand businesses to form the new UTC Aerospace Systems segment. The Goodrich acquisition and the formation of UTC Aerospace Systems provide increased scale...

  • Page 68
    ... done on a number of Goodrich sites, we determined that environmental liability obligations of $232 million were assumed in connection with the acquisition. The fair values of the customer relationship and related program intangible assets, which include the related aerospace program OEM and...

  • Page 69
    ... purchase accounting for the unremitted earnings no longer considered permanently reinvested. In accordance with conditions imposed for regulatory approval the Goodrich acquisition, UTC must dispose of the electric power systems and pumps and engine controls businesses of Goodrich. These businesses...

  • Page 70
    ... of 2011. 5 Added the additional interest expense for the debt incurred to finance our acquisition of Goodrich and reduced interest expense for the debt fair value adjustment which would have been amortized. conditional upon each hour flown by V2500-powered aircraft in service at the closing. The...

  • Page 71
    ...security and fire safety technologies for commercial and residential applications through a broad product portfolio that includes fire detection and life safety systems, intrusion alarms, and video surveillance and access control systems. This business, which has been integrated into our UTC Climate...

  • Page 72
    ... of the legacy Hamilton Sundstrand Industrials business was completed in December 2012, while the divestiture of Clipper was completed in the third quarter of 2012. Cash flows from the operation of Rocketdyne and UTC Power will continue to be reported in discontinued operations until their disposals...

  • Page 73
    Notes to Consolidated Financial Statements 2012 ANNUAL REPORT 71 final disposition of these businesses based upon the values, terms and conditions that are ultimately negotiated. On December 13, 2012, we completed the sale of the legacy Hamilton Sundstrand Industrial businesses to BC Partners and...

  • Page 74
    72 UNITED TECHNOLOGIES CORPORATION NOTE 4: EARNINGS PER SHARE (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS; SHARES IN MILLIONS) NOTE 5: COMMERCIAL AEROSPACE INDUSTRY ASSETS AND COMMITMENTS 2012 2011 2010 Net income attributable to common shareowners: Net income from continuing operations Net ...

  • Page 75
    ... 8, 2013, to power the next generation Embraer E-Jet family. In exchange for the increased ownership and collaboration interests and intellectual property license, Pratt & Whitney paid Rolls-Royce $1.5 billion at closing with additional payments due to Rolls-Royce contingent upon each hour flown...

  • Page 76
    ... Goodrich acquisition and pay related fees, expenses and other amounts due and payable by UTC as a result of the acquisition. The net proceeds from the sale of the equity units were allocated between the purchase contracts and the notes in our financial statements based on the underlying fair value...

  • Page 77
    ... to the statement of operations based on a constant rate calculation. The purchase contracts are reflected in our diluted earnings per share calculations using the treasury stock method. To finance the remainder of the cash consideration of the Goodrich acquisition and pay related fees, expenses...

  • Page 78
    76 UNITED TECHNOLOGIES CORPORATION The project financing obligations noted above are associated with the sale of rights to unbilled revenues related to the ongoing activity of an entity owned by UTC Climate, Controls and Security. The percentage of total short-term borrowings and longterm debt at ...

  • Page 79
    Notes to Consolidated Financial Statements 2012 ANNUAL REPORT 77 Changes in non-controlling interests that do not result in a change of control, and where there is a difference between fair value and carrying value, are accounted for as equity transactions. A summary of these changes in ownership...

  • Page 80
    ... additional high tax dividends from 2010 earnings to the U.S. as a result of U.S. tax legislation enacted in 2010. This was partially offset by the non-deductibility of impairment charges, the adverse impact from the health care legislation related to the Medicare Part D program and other increases...

  • Page 81
    ... to Goodrich defined contribution plans. Effective January 1, 2010, newly hired non-union domestic employees receive all of their retirement benefits through the defined contribution savings plan. Our non-union domestic employee savings plan uses an Employee Stock Ownership Plan (ESOP) for employer...

  • Page 82
    ... reflect the impact of foreign exchange translation, primarily for plans in the U.K. and Canada, partially offset by the impact of settlements. As part of the Goodrich acquisition on July 26, 2012, we assumed approximately $5.2 billion of pension projected benefit obligations and $3.8 billion of...

  • Page 83
    ...in international, value-added and opportunistic strategies. Within the income generating assets, the fixed income portfolio is mainly a broadly diversified portfolio of corporate bonds. The plans have continued their pension risk management techniques designed to reduce the plan's interest rate risk...

  • Page 84
    ... Equities(b) Private Equities(c) Fixed Income Securities Governments Corporate Bonds Structured Products(d) Real Estate(e) Other(f) Cash & Cash Equivalents(g) Subtotal Other Assets & Liabilities(h) Total at December 31, 2011 (a) Represents commingled funds that invest primarily in common stocks...

  • Page 85
    ... Private Equities Corporate Bonds Real Estate (DOLLARS IN MILLIONS) Total Balance, December 31, 2010 Realized gains (losses) Unrealized gains (losses) relating to instruments still held in the reporting period Purchases, sales, and settlements, net Balance, December 31, 2011 Plan assets acquired...

  • Page 86
    ...2011 As part of our acquisition of Goodrich on July 26, 2012, we assumed approximately $328 million of postretirement projected benefit obligations. We modified the postretirement medical benefits provided to legacy Goodrich salaried employees by eliminating any company Health care cost trend rate...

  • Page 87
    ... and 2010, respectively, we were listed in the National Elevator Industry Pension Plan's Forms 5500 as providing more than 5% of the total contributions for the plan. At the date these financial statements were issued, Forms 5500 were not available for the plan year ending June 30, 2012. In addition...

  • Page 88
    ...of certain tax benefits have been reported as operating cash outflows with corresponding cash inflows from financing activities. At December 31, 2012, there was $185 million of total unrecognized compensation cost related to non-vested equity awards granted under long-term incentive plans. This cost...

  • Page 89
    ... for new and ongoing restructuring actions. We recorded charges in the segments as follows: (DOLLARS IN MILLIONS) $ - Otis UTC Climate, Controls & Security Pratt & Whitney UTC Aerospace Systems Sikorsky Eliminations and other Restructuring costs recorded within continuing operations Restructuring...

  • Page 90
    ... costs for the 2011 programs by segment: Costs Incurred During 2011 Costs Incurred During 2012 Remaining Costs at December 31, 2012 (DOLLARS IN MILLIONS) Expected Costs Otis UTC Climate, Controls & Security Pratt & Whitney UTC Aerospace Systems Sikorsky Discontinued operations Total $ 104 $ 119...

  • Page 91
    Notes to Consolidated Financial Statements 2012 ANNUAL REPORT 89 The following table summarizes the fair value of derivative instruments as of December 31, 2012 and December 31, 2011 which consist solely of foreign exchange contracts: December 31, 2012 Derivatives designated as hedging ...

  • Page 92
    ... portfolio transformation efforts including the integration of the legacy UTC Fire & Security businesses with the legacy Carrier businesses. These net gains include approximately $357 million from the sales of controlling interests in manufacturing and distribution joint ventures in Asia and Canada...

  • Page 93
    ... related to acquisitions. Economic conditions and air travel influence the operating environment for most airlines, and the financial performance of our aerospace businesses is directly tied to the economic conditions of the commercial aerospace and defense industries. Additionally, the value...

  • Page 94
    ... customer in the portfolio based upon public information and information obtained directly from our customers. We conduct a review of customer credit ratings, published historical credit default rates for different rating categories, and multiple third party aircraft value publications as a basis to...

  • Page 95
    ...property license, Pratt & Whitney paid Rolls-Royce $1.5 billion at 2012 2011 2010 Collaborator share of sales: Cost of products sold Cost of services sold Collaborator share of program costs (reimbursement of expenses incurred): Cost of products sold Research and development Selling, general and...

  • Page 96
    ... we have claimed related to a 1998 reorganization of the corporate structure of Otis operations in Germany. A portion of these tax benefits were disallowed by the local German Tax Office on July 5, 2012, as a result of the audit of tax years 1999 to 2000. The legal and factual issues relating to the...

  • Page 97
    ... manufacturers, and U.S. and foreign governments. Pratt & Whitney also provides product support and a full range of overhaul, repair and fleet management services and produces land-based power generation equipment. Effective July 1, 2012, the auxiliary power unit business (APU) of the UTC Aerospace...

  • Page 98
    ... Segment information for the years ended December 31 is as follows: Net Sales (DOLLARS IN MILLIONS) Operating Profits 2010 2012 2011 2010 2012 2011 Otis UTC Climate, Controls & Security Pratt & Whitney UTC Aerospace Systems Sikorsky Total segment Eliminations and other General corporate expenses...

  • Page 99
    ... $50 $0 12/07 12/08 12/09 12/10 12/11 12/12 December 2007 2008 2009 2010 2011 2012 United Technologies Corporation S&P 500 Index Dow Jones Industrial Average $ 100.00 $ 100.00 $ 100.00 $ 71.57 $ 63.00 $ 68.07 $ 95.40 $ 79.67 $ 83.51 $ 110.88 $ $ 91.68 95.25 $ 105.37 $ 93.61 $ 103.24...

  • Page 100
    ... Goodrich Corporation (Aerospace and Defense Systems and Services) Richard D. McCormick Retired Chairman, President and Chief Executive Officer US West, Inc. (Telecommunications) Harold McGraw Ill Chairman, President and Chief Executive Officer The McGraw-Hill Companies (Global Information Services...

  • Page 101
    2012 ANNUAL REPORT 99 Leadership Paul R. Adams Chief Operating Officer, Pratt & Whitney David Adler President, Sikorsky Aerospace Services Elizabeth B. Amato Senior Vice President, Human Resources and Organization David G. Appel President, Transicold, UTC Climate, Controls & Security Alain M. ...

  • Page 102
    ...of the UTC Annual Report on Form 10-K for fiscal year 2012 filed with the Securities and Exchange Commission by writing to: Corporate Secretary United Technologies Corporation United Technologies Building Hartford, CT 06101 For additional Information about UTC, please contact Investor Relations at...

  • Page 103
    ... for most honored company, best chief financial officer and best investor relations team. UTC named among Thomson Reuters Top 100 Global Innovators in the transportation equipment industry. UTC recognized with the 2011-2012 Excellence Prize for Sustainable Development in China for its work on the...

  • Page 104
    United Technologies Building Hartford, CT 06101 U.S.A. www.utc.com Otis Pratt & Whitney Sikorsky UTC Aerospace Systems UTC Climate, Controls & Security