UTC Reports Second Quarter EPS Growth From Continuing Operations of 15 Percent; Expects 2012 EPS of $5.25 to $5.35 on Sales of $58 Billion to $59 Billion and Increases Restructuring

HARTFORD, Conn., July 26, 2012 /PRNewswire/ — United Technologies Corp. (NYSE: UTX) today reported second quarter 2012 results. All results in this release reflect continuing operations unless otherwise noted.

Earnings per share of $1.62 and net income attributable to common shareowners of $1.5 billion, were up 15 percent and 14 percent, respectively, over the year ago quarter. Results for the current quarter include $0.10 per share of net favorable one-time items, partially offset by $0.06 of restructuring costs. Earnings per share in the year ago quarter included $0.05 per share of net favorable one-time items, partially offset by $0.04 of restructuring costs. Before these items, earnings per share increased 13 percent year over year. The effective tax rate for the quarter was 22.5 percent. Foreign currency translation, and hedges at Pratt & Whitney Canada, had an adverse impact of $0.05.

United Technologies completed the acquisition of Rolls Royce’s interests in International Aero Engines on June 29. For its proposed acquisition of Goodrich Corporation, United Technologies anticipates receiving full regulatory approval today and closing the acquisition by the end of this week.

“The Goodrich and IAE transactions better position UTC to serve the growing aerospace market,” said Louis Chenevert, UTC Chairman & Chief Executive Officer.

“We are concluding on the substantial transformational changes to our portfolio that will generate shareholder value well into the future.”

Sales for the quarter of $13.8 billion were 5 percent below prior year. Organic sales increased 1 percent over the year ago quarter, while net divestitures and foreign currency translation each had an adverse impact of 3 points. Combined, net divestitures and foreign currency translation accounted for $0.8 billion of the sales decline.

Second quarter segment operating margin at 16.5 percent was 70 basis points higher than prior year. Adjusted for restructuring costs and net one-time items, segment operating margin at 16.4 percent was 80 basis points higher than prior year. Research and development costs increased $31 million in the quarter to $525 million. Cash flow from operations was $1.7 billion and capital expenditures were $244 million in the quarter.

“UTC delivered solid operating performance while sustaining our investment in game-changing technology in the face of a challenging economic environment,” Chenevert added.

New equipment orders at Otis were down 7 percent over the year ago second quarter, including unfavorable foreign exchange of 3 percentage points. North American Residential HVAC new equipment orders at UTC Climate, Controls & Security grew 4 percent. Commercial spares orders were down 15 percent at Pratt & Whitney’s large engine business and down 10 percent at Hamilton Sundstrand.

“In light of the slowing global economy, a weaker Euro that we now assume to be in the range of $1.20 for the remainder of the year, and late July close for Goodrich, we now expect 2012 sales of $58 billion to $59 billion,” Chenevert added. “We expect earnings per share of $5.25 to $5.35, versus our prior expectation of $5.30 to $5.50. As always, we will focus on cost reduction and strong execution. We are increasing our investment in restructuring this year to $500 million, up from our prior plan of $450 million, and continue to expect net one-time gains of $600 million.”

UTC continues to expect cash flow from operations less capital expenditures to meet or exceed net income attributable to common shareowners for the year. The company does not anticipate share repurchase in 2012 and has a placeholder of $500 million for acquisitions excluding the Goodrich transaction. UTC continues to expect a full year effective tax rate of 29.5 percent, excluding Goodrich and one-time items.

Earnings per share from discontinued operations were a loss of $0.15 in the quarter. Results included a $179 million pre-tax impairment charge associated with the UTC Power business, which was moved to discontinued operations in the second quarter, as well as a reserve for potential warranty costs associated with the Clipper business.

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.

The accompanying tables include information integral to assessing the company’s financial position, operating performance, and cash flow, including a reconciliation of differences between non-GAAP measures used in this release and the comparable financial measures calculated in accordance with generally accepted accounting principles in the United States.