| Consolidated Statement of Operations (USD $) | ||
| In Millions, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
| Revenues: | ||
| Product sales | $8,384 | $8,662 |
| Service sales | 3,656 | 3,537 |
| Other income, net | 51 | 50 |
| Total Revenues | 12,091 | 12,249 |
| Costs and Expenses: | ||
| Cost of products sold | 6,359 | 6,756 |
| Cost of services sold | 2,373 | 2,351 |
| Research and development | 397 | 409 |
| Selling, general and administrative | 1,424 | 1,483 |
| Operating profit | 1,538 | 1,250 |
| Interest expense | 186 | 175 |
| Income before income taxes | 1,352 | 1,075 |
| Income tax expense | 405 | 276 |
| Net income | 947 | 799 |
| Less: Noncontrolling interest in subsidiaries' earnings | 81 | 77 |
| Net income attributable to common shareowners | $866 | $722 |
| Earnings Per Share of Common Stock: | ||
| Basic | 0.95 | 0.79 |
| Diluted | 0.93 | 0.78 |
| Dividends Per Share of Common Stock | 0.43 | 0.39 |
| Weighted average number of shares outstanding: | ||
| Basic shares | 914 | 918 |
| Diluted shares | 929 | 926 |
| Consolidated Balance Sheet (USD $) | ||
| In Millions | Mar. 31, 2010
| Dec. 31, 2009
|
| Assets | ||
| Cash and cash equivalents | $4,788 | $4,449 |
| Accounts receivable, net | 8,737 | 8,469 |
| Inventories and contracts in progress, net | 8,172 | 7,509 |
| Future income tax benefits, current | 1,676 | 1,689 |
| Other assets, current | 948 | 1,078 |
| Total Current Assets | 24,321 | 23,194 |
| Customer financing assets | 1,088 | 1,047 |
| Future income tax benefits | 2,081 | 2,102 |
| Fixed assets | 15,834 | 15,677 |
| Less: Accumulated depreciation | (9,499) | (9,313) |
| Fixed assets, net | 6,335 | 6,364 |
| Goodwill | 17,069 | 16,298 |
| Intangible assets | 4,047 | 3,538 |
| Other assets | 3,447 | 3,219 |
| Total Assets | 58,388 | 55,762 |
| Liabilities and Equity | ||
| Short-term borrowings | 217 | 254 |
| Accounts payable | 4,801 | 4,634 |
| Accrued liabilities | 11,921 | 11,792 |
| Long-term debt currently due | 1,731 | 1,233 |
| Total Current Liabilities | 18,670 | 17,913 |
| Long-term debt | 10,004 | 8,257 |
| Future pension and postretirement benefit obligations | 4,099 | 4,150 |
| Other long-term liabilities | 4,314 | 4,054 |
| Total Liabilities | 37,087 | 34,374 |
| Redeemable noncontrolling interest | 377 | 389 |
| Shareowners' Equity: | ||
| Common Stock | 11,937 | 11,746 |
| Treasury Stock | (15,905) | (15,408) |
| Retained earnings | 27,854 | 27,396 |
| Unearned ESOP shares | (176) | (181) |
| Accumulated other comprehensive loss | (3,746) | (3,487) |
| Total Shareowners' Equity | 19,964 | 20,066 |
| Noncontrolling interest | 960 | 933 |
| Total Equity | 20,924 | 20,999 |
| Total Liabilities and Equity | $58,388 | $55,762 |
| Consolidated Statement of Cash Flows (USD $) | ||
| In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
| Operating Activities: | ||
| Net income attributable to common shareowners | $866 | $722 |
| Noncontrolling interest in subsidiaries' earnings | 81 | 77 |
| Net income | 947 | 799 |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | ||
| Depreciation and amortization | 327 | 306 |
| Deferred income tax (benefit) provision | (59) | 14 |
| Stock compensation cost | 45 | 34 |
| Change in: | ||
| Accounts receivable | (147) | 325 |
| Inventories and contracts in progress | (511) | (504) |
| Other current assets | (58) | (59) |
| Accounts payable and accrued liabilities | 522 | (480) |
| Global pension contributions | (42) | (23) |
| Other operating activities, net | 130 | 73 |
| Net cash flows provided by operating activities | 1,154 | 485 |
| Investing Activities: | ||
| Capital expenditures | (147) | (167) |
| Investments in businesses | (2,108) | (122) |
| Dispositions of businesses | 41 | |
| Increase in customer financing assets, net | (50) | (15) |
| Other investing activities, net | 140 | 83 |
| Net cash flows used in investing activities | (2,124) | (221) |
| Financing Activities: | ||
| Issuance (repayment) of long-term debt, net | 2,212 | (502) |
| Decrease in short-term borrowings, net | (40) | (95) |
| Common Stock issued under employee stock plans | 99 | 36 |
| Dividends paid on Common Stock | (373) | (339) |
| Repurchase of Common Stock | (500) | (200) |
| Other financing activities, net | (80) | (109) |
| Net cash flows provided by (used in) financing activities | 1,318 | (1,209) |
| Effect of foreign exchange rate changes on cash and cash equivalents | (9) | (110) |
| Net increase (decrease) in cash and cash equivalents | 339 | (1,055) |
| Cash and cash equivalents, beginning of year | 4,449 | 4,327 |
| Cash and cash equivalents, end of period | $4,788 | $3,272 |
| Notes to Consolidated Financial Statements | |
| 3 Months Ended
Mar. 31, 2010 | |
| Notes to Consolidated Financial Statements | |
| Introduction of Notes to Condensed Consolidated Financial Statements | The Condensed Consolidated Financial Statements at March 31, 2010 and for the quarters ended March 31, 2010 and 2009 are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods. The results reported in these Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the financial statements and notes in our Annual Report to Shareowners (2009 Annual Report) incorporated by reference to our Annual Report on Form 10-K for calendar year 2009 (2009 Form 10-K). |
| Note 1: Acqusitions, Dispositions, Goodwill and Other Intangible Assets | Note 1: Acquisitions, Dispositions, Goodwill and Other Intangible Assets Business Acquisitions. During the first three months of 2010, our investment in business acquisitions was approximately $2.1 billion, including debt assumed of $32 million, and principally reflected the acquisition of the General Electric (GE) Security business, and the acquisition of an equity stake in Clipper Windpower Plc (Clipper). On March 1, 2010, we completed the previously announced acquisition of the GE Security business for approximately $1.8 billion, including debt assumed of $32 million. The GE Security business supplies 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 will be integrated into our UTC Fire Security segment during the course of 2010, and will enhance UTC Fire Security's geographic diversity with the strong North American presence and increased product and technology offerings of GE Security. In connection with the acquisition of GE Security, we recorded approximately $1.0 billion of goodwill and approximately $600 million of identifiable intangible assets. In January 2010, we completed the previously announced acquisition of a 49.5% equity stake in Clipper, a California-based wind turbine manufacturer that trades on the AIM London Stock Exchange. This investment is intended to expand our power generation portfolio and allow us to enter the wind power segment by leveraging our expertise in blade technology, turbines and gearbox design. The total cost was 166 million (approximately $270 million) for the purchase of 84.3 million newly issued shares and 21.8 million shares from existing shareowners. We have accounted for this investment under the equity method of accounting. Pursuant to our agreement with Clipper, we are prohibited from acquiring additional shares of Clipper within two years of the closing date that would result in an equity stake in excess of 49.9% without the prior approval of Clipper. Goodwill. Changes in our goodwill balances for the first three months of 2010 were as follows: (in millions of dollars) Balance as of January 1, 2010 Goodwill resulting from business combinations Foreign currency translation and other Balance as of March 31, 2010 Otis $ 1,382 $ 23 $ (14) $ 1,391 Carrier 3,252 8 (33) 3,227 UTC Fire Security 5,641 1,067 (226) 6,482 Pratt Whitney 1,237 - (11) 1,226 Hamilton Sundstrand 4,496 1 (45) 4,452 Sikorsky 250 - 1 251 Total Segments 16,258 1,099 (328) 17,029 Eliminations and other 40 - - 40 Total $ 16,298 $ 1,099 $ (328) $ 17,069 Intangible Assets. Identifiable intangible assets are comprised of the following: March 31, 2010 December 31, 2009 (in millions of dollars) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Amortized: Service portfolios $ 1,794 $ (838) $ 1,814 $ (833) Patents and trademarks 424 (121) |
| Note 2: Earnings Per Share | Note 2: Earnings Per Share Quarter Ended March 31, (in millions, except per share amounts) 2010 2009 Net income attributable to common shareowners $ 866 $ 722 Basic weighted average shares outstanding 914 918 Stock awards 15 8 Diluted weighted average shares outstanding 929 926 Earnings per share of Common Stock: Basic $ 0.95 $ 0.79 Diluted $ 0.93 $ 0.78 The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock appreciation rights (SARs) and stock options, when the average market price of the common stock is lower than the exercise price of the related SARs and options during the period. These outstanding stock awards are not included in the computation of diluted earnings per share because the effect would be antidilutive. For the three months ended March 31, 2010 and 2009, the number of stock awards excluded from the computation was 12.9 million and 50.0 million, respectively. |
| Note 3: Inventories and Contracts in Progress | Note 3: Inventories and Contracts in Progress (in millions of dollars) March 31, 2010 December 31, 2009 Raw materials $ 1,309 $ 1,281 Work-in-process 3,400 3,097 Finished goods 3,194 2,889 Contracts in progress 6,440 6,479 14,343 13,746 Less: Progress payments, secured by lien, on U.S. Government contracts (305) (264) Billings on contracts in progress (5,866) (5,973) $ 8,172 $ 7,509 As of March 31, 2010 and December 31, 2009, the above inventory balances include capitalized contract development costs of $886 million and $862 million, respectively, related to certain aerospace programs. These capitalized costs are liquidated as production units are delivered to the customer. The capitalized contract development costs within inventory principally relate to costs capitalized on Sikorsky's CH-148 contract with the Canadian government. The CH-148 is a derivative of the H-92, a military variant of the S-92. |
| Note 4: Borrowings and Lines of Credit | Note 4: Borrowings and Lines of Credit At March 31, 2010, we had committed credit agreements from banks permitting aggregate borrowings of up to $2.5 billion under a $1.5 billion revolving credit agreement and a $1.0 billion multicurrency revolving credit agreement, both of which are available for general funding purposes, including acquisitions. As of March 31, 2010, there were no borrowings under either of these revolving credit agreements, which expire in October 2011 and November 2011, respectively. The undrawn portions under both of these agreements are also available to serve as backup facilities for the issuance of commercial paper. We generally use our commercial paper borrowings for general corporate purposes, including the funding of potential acquisitions and repurchases of our common stock. Long-term debt consists of the following: (in millions of dollars) March 31, 2010 December 31, 2009 4.375% notes due 2010* $ 600 $ 600 7.125% notes due 2010* 500 500 6.350% notes due 2011* 500 500 6.100% notes due 2012* 500 500 4.875% notes due 2015* 1,200 1,200 5.375% notes due 2017* 1,000 1,000 6.125% notes due 2019* 1,250 1,250 8.875% notes due 2019 272 272 4.500% notes due 2020* 1,250 - 8.750% notes due 2021 250 250 6.700% notes due 2028 400 400 7.500% notes due 2029* 550 550 5.400% notes due 2035* 600 600 6.050% notes due 2036* 600 600 6.125% notes due 2038* 1,000 1,000 5.700% notes due 2040* 1,000 - Project financing obligations 139 158 Other (including capitalized leases) 124 110 Total long-term debt 11,735 9,490 Less current portion (1,731) (1,233) Long-term debt, net of current portion $ 10,004 $ 8,257 We may redeem some or all of these series of notes at any time at a redemption price in U.S. dollars equal to the greater of 100% of the principal amount outstanding of the applicable series of notes to be redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest on the applicable series of notes to be redeemed. The discounts applied on such redemptions are based on a semiannual calculation at the adjusted treasury rate plus 10-50 basis points. The redemption price will also include interest accrued to the date of redemption on the principal balance of the notes being redeemed. In February 2010, we issued two series of fixed rate notes that pay interest semiannually, in arrears, on April 15 and October 15 of each year beginning October 15, 2010. The $1.25 billion of fixed rate notes bear interest at a rate equal to 4.500% per year and mature on April 15, 2020. The $1.0 billion of fixed rate notes bear interest at a rate equal to 5.700% per year and mature on April 15, 2040. The proceeds from these notes were used primarily to partially fund the acquisition of the GE Security business, and to repay commercial paper borrowings. We have an existing universal shelf registration statement filed with the Securities and Exchange Commission (SEC) for an indeterminate amount of securities for future issuance, subject to |
| Note 5: Income Taxes | Note 5: Income Taxes We conduct business globally and, as a result, UTC or one or more of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as Australia, Canada, China, France, Germany, Hong Kong, Italy, Japan, South Korea, Singapore, Spain, the United Kingdom and the United States. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 1998. In the ordinary course of business there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management's evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest has also been recognized. We recognize interest accrued related to unrecognized tax benefits in interest expense. Penalties, if incurred, would be recognized as a component of income tax expense. It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may change within a range of a net increase of $50 million to a net decrease of $180 million resulting from additional worldwide uncertain tax positions, from the re-evaluation of current uncertain tax positions arising from developments in examinations, in appeals, or in the courts, or from the closure of tax statutes. Not included in the range is 198million (approximately $264 million) of tax benefits that we have claimed related to a 1998 German reorganization. These tax benefits are currently being reviewed by the German Tax Office in the course of an audit of tax years 1999 to 2000. In 2008 the German Federal Tax Court denied benefits to another taxpayer in a case involving a German tax law relevant to our reorganization. The determination of the German Federal Tax Court on this other matter was appealed to the European Court of Justice (ECJ) to determine if the underlying German tax law is violative of European Union (EU) principles. On September 17, 2009 the ECJ issued an opinion in this case that is generally favorable to the other taxpayer and referred the case back to the German Federal Tax Court for further consideration of certain related issues. After consideration of the ECJ decision, we continue to believe that it is more likely than not that the relevant German tax law is violative of EU principles and we have not accrued tax expense for this matter. As developments in the other taxpayer's case in |
| Note 6: Employee Benefit Plans | Note 6: Employee Benefit Plans Pension and Postretirement Plans. We sponsor both funded and unfunded domestic and foreign defined pension and postretirement plans. Contributions to these plans during the quarter ended March 31, 2010 and 2009 were as follows: Quarter Ended March 31, (in millions of dollars) 2010 2009 Defined Benefit Plans $ 42 $ 23 Defined Contribution Plans $ 50 $ 53 Included in the first quarter of 2010 contributions is $1 million of contributions to our domestic defined benefit pension plans. There were no contributions to our domestic defined benefit pension plans in the first quarter of 2009. The following tables illustrate the components of net periodic benefit cost for our pension and other postretirement benefits: Pension Benefits Other Postretirement Benefits Quarter Ended Quarter Ended March 31, March 31, (in millions of dollars) 2010 2009 2010 2009 Service cost $ 99 $ 106 $ 1 $ 1 Interest cost 322 316 11 12 Expected return on plan assets (431) (399) - - Amortization (4) 14 (1) (1) Recognized actuarial net loss 71 56 - (1) 57 93 11 11 Net settlement and curtailment loss 6 13 - - Total net periodic benefit cost $ 63 $ 106 $ 11 $ 11 |
| Note 7: Restructuring and Other Costs | Note 7: Restructuring and Other Costs During the first three months of 2010, we recorded net pre-tax restructuring and other charges in our business segments totaling $67 million for new and ongoing restructuring actions as follows: (in millions of dollars) Otis $ 11 Carrier 18 UTC Fire Security 10 Pratt Whitney 26 Hamilton Sundstrand 2 Total $ 67 The net charges included $41 million in cost of sales, $25 million in selling, general and administrative expenses and $1 million in other income, net. As described below, these costs primarily relate to actions initiated during 2010 and 2009. 2010 Actions. During the first three months of 2010, we initiated restructuring actions relating to ongoing cost reduction efforts, including workforce reductions and consolidation of field operations. We recorded net pre-tax restructuring and other charges totaling $49 million, including $27 million in cost of sales and $22 million in selling, general and administrative expenses. We expect the 2010 actions that were initiated in the first three months to result in net workforce reductions of approximately 1,400 hourly and salaried employees, the exiting of approximately 1.1 million net square feet of facilities and the disposal of assets associated with the exited facilities. As of March 31, 2010, we have completed net workforce reductions of approximately 100 employees. We are targeting the majority of the remaining workforce and all facility related cost reduction actions for completion during 2010 and 2011. No specific plans for significant other actions have been finalized at this time. The following table summarizes the accrual balances and utilization by cost type for the 2010 restructuring actions: (in millions of dollars) Severance Asset Write-Downs Facility Exit and Lease Termination Costs Total Net pre-tax restructuring charges 42 - 7 49 Utilization (5) - (1) (6) Balance at March 31, 2010 $ 37 $ - $ 6 $ 43 The following table summarizes expected, incurred and remaining costs for the 2010 restructuring actions by type: (in millions of dollars) Severance Asset Write-Downs Facility Exit and Lease Termination Costs Total Expected costs $ 60 $ - $ 31 $ 91 Costs incurred - quarter ended March 31, 2010 (42) - (7) (49) Balance at March 31, 2010 $ 18 $ - $ 24 $ 42 The following table summarizes expected, incurred and remaining costs for the 2010 restructuring actions by segment: Costs Incurred Remaining Quarter Ended Costs at (in millions of dollars) Expected Costs March 31, 2010 March 31, 2010 Otis $ 17 $ (11) $ 6 Carrier 29 (8) 21 UTC Fire Security 15 (9) 6 Pratt Whitney 28 (19) 9 Hamilton Sundstrand 2 (2) - Total $ 91 $ (49) $ 42 2009 Actions. During the first three months of 2010, we recorded net pre-tax restructuring and other charges and reversals totaling $19 million for restructuring actions initiated in 2009, including $14 million in cost of sales, $4 million in selling, general and administrative expenses |
| Note 8: Financial Instruments | Note 8: Financial Instruments We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments under the Derivatives and Hedging Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) and those utilized as economic hedges. We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates, foreign exchange rates and commodity prices. These fluctuations can increase the costs of financing, investing and operating the business. We have used derivative instruments, including swaps, forward contracts and options to manage certain foreign currency, interest rate and commodity price exposures. By nature, all financial instruments involve market and credit risks. We enter into derivative and other financial instruments with major investment grade financial institutions and have policies to monitor the credit risk of those counterparties. We limit counterparty exposure and concentration of risk by diversifying counterparties. While there can be no assurance, we do not anticipate any material non-performance by any of these counterparties. Foreign Currency Forward Contracts. We manage our foreign currency transaction risks to acceptable limits through the use of derivatives that hedge forecasted cash flows associated with foreign currency transaction exposures, which are accounted for as cash flow hedges, as deemed appropriate. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the hedge accounting criteria of the Derivatives and Hedging Topic of the FASB ASC, the changes in the derivatives' fair values are not included in current earnings but are included in Accumulated Other Comprehensive Loss. These changes in fair value will subsequently be reclassified into earnings as a component of product sales or expenses, as applicable, when the forecasted transaction occurs. To the extent that a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded currently in earnings in the period it occurs. To the extent the hedge accounting criteria are not met, the foreign currency forward contracts are utilized as economic hedges and changes in the fair value of these contracts are recorded currently in earnings in the period in which they occur. These include hedges that are used to reduce exchange rate risks arising from the change in fair value of certain foreign currency denominated assets and liabilities (e.g. payables, receivables) and other economic hedges where the hedge accounting criteria were not met. The four quarter rolling average of the notional amount of foreign exchange contracts hedging foreign currency transactions was $9 billion at both March 31, 2010 and December 31, 2009. Commodity Forward Contracts. We enter into commodity forward contracts to reduce the risk of fluctuations in the price we pay for certain commodities (e.g., nickel) which are used directly in the production of our products, or are components of the produc |
| Note 9: Shareowners' Equity and Noncontrolling Interest | Note 9: Shareowners' Equity and Noncontrolling Interest A summary of the changes in shareowners' equity and noncontrolling interest (excluding redeemable noncontrolling interest) comprising total equity for the quarters ended March 31, 2010 and 2009 is provided below: Quarter Ended March 31, (in millions of dollars) 2010 2009 Shareowners' Equity Noncontrolling Interest Total Equity Shareowners' Equity Noncontrolling Interest Total Equity Equity, beginning of period $ 20,066 $ 933 $ 20,999 $ 15,763 $ 918 $ 16,681 Comprehensive income for the period Net income 866 81 947 722 77 799 Redeemable noncontrolling interest in subsidiaries' earnings - (6) (6) - (4) (4) Other comprehensive income (loss): Foreign currency translation, net (350) (10) (360) (285) (17) (302) Increases (decreases) in unrealized gains from available-for-sale investments, net 35 - 35 (19) - (19) Cash flow hedging gains (losses) 25 - 25 (52) - (52) Change in pension and post-retirement benefit plans, net 31 - 31 50 - 50 Total other comprehensive loss (259) (10) (269) (306) (17) (323) Total comprehensive income for the period 607 65 672 416 56 472 Common Stock issued under employee plans 187 - 187 71 - 71 Common Stock repurchased (500) - (500) (200) - (200) Dividends on Common Stock (373) - (373) (339) - (339) Dividends on ESOP Common Stock (16) - (16) (15) - (15) Dividends attributable to noncontrolling interest - (89) (89) - (84) (84) Purchase of subsidiary shares from noncontrolling interest (2) (1) (3) (27) (10) (37) Sale of subsidiary shares in noncontrolling interest - 27 27 - - - Acquired noncontrolling interest - 25 25 - 14 14 Change in redemption value of put options (5) - (5) (2) - (2) Equity, end of period $ 19,964 $ 960 $ 20,924 $ 15,667 $ 894 $ 16,561 During 2009, we adopted the FASB ASU for redeemable equity instruments, applicable for all noncontrolling interests with redemption features, such as put options, that are not solely within our control (redeemable noncontrolling interests). The standards require redeemable noncontrolling interests to be reported in the mezzanine section of the balance sheet, between liabilities and equity, at the greater of redemption value or initial carrying value. As a result of this adoption, we have retroactively reclassified "redeemable noncontrolling interests" in the mezzanine section of the balance sheet and have increased them to redemption value, where required, resulting in a $225 million reclassification from total equity in the March 31, 2009 balance sheet. A summary of the changes in redeemable noncontrolling interest recorded in the mezzanine section of the balance sheet for the quarters ended March 31, 2010 and 2009 is provided below: Quarter Ended March 31, (in millions of dollars) |
| Note 10: Guarantees | Note 10: Guarantees We extend a variety of financial, market value and product performance guarantees to third parties. There have been no material changes to guarantees outstanding since December 31, 2009. The changes in the carrying amount of service and product warranties and product performance guarantees for the three months ended March 31, 2010 and 2009 are as follows: (in millions of dollars) 2010 2009 Balance as of January 1 $ 1,072 $ 1,136 Warranties and performance guarantees issued 122 104 Settlements made (90) (120) Other (6) (30) Balance as of March 31 $ 1,098 $ 1,090 |
| Note 11: Collaborative Arrangements | Note 11: Collaborative Arrangements In view of the risks and costs associated with developing new engines, Pratt Whitney has entered into certain collaboration arrangements in which costs, revenues and risks are shared. Revenues generated from engine programs, spare parts sales, and aftermarket business under collaboration arrangements are recorded as earned in our financial statements. Amounts attributable to our collaborative partners for their share of revenues are recorded as an expense in our financial statements based upon the terms and nature of the arrangement. Costs associated with engine programs under collaborative arrangements are expensed as incurred. Under these arrangements, collaborators contribute their program 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 the collaborator's share of program costs is recorded as a reduction of the related expense item at that time. As of March 31, 2010, the collaborators' interests in all commercial engine programs ranged from 12 percent to 48 percent. Pratt Whitney directs those programs and is the principal participant in all existing collaborative arrangements. There are no individually significant collaborative arrangements and none of the partners exceed 31 percent share in an individual program. |
| Note 12: Contingent Liabilities | Note 12: Contingent Liabilities Summarized below are the matters previously described in Note 16 of the Notes to the Consolidated Financial Statements in our 2009 Annual Report, incorporated by reference in our 2009 Form 10-K. Environmental. Our operations are subject to environmental regulation by federal, state and local authorities in the United States and regulatory authorities with jurisdiction over our foreign operations. We accrue for the costs of environmental investigatory, remediation, operating and maintenance costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts with respect to each individual site, including existing technology, current laws and regulations and prior remediation experience. Where no amount within a range of estimates is more likely, we accrue the minimum. For sites with multiple responsible parties, we consider our likely proportionate share of the anticipated remediation costs and the ability of the other parties to fulfill their obligations in establishing a provision for those costs. We discount liabilities with fixed or reliably determinable future cash payments. We do not reduce accrued environmental liabilities by potential insurance reimbursements. We periodically reassess these accrued amounts. We believe that the likelihood of incurring losses materially in excess of amounts accrued is remote. Government. We are now, and believe that in light of the current U.S. government contracting environment we will continue to be, the subject of one or more U.S. government investigations. If we or one of our business units were charged with wrongdoing as a result of any of these investigations or other government investigations (including violations of certain environmental or export laws) the U.S. government could suspend us from bidding on or receiving awards of new U.S. government contracts pending the completion of legal proceedings. If convicted or found liable, the U.S. government could fine and debar us from new U.S. government contracting for a period generally not to exceed three years. The U.S. government could void any contracts found to be tainted by fraud. Our contracts with the U.S. government are also subject to audits. Like many defense contractors, we have received audit reports, which recommend that certain contract prices should be reduced to comply with various government regulations. Some of these audit reports involve substantial amounts. We have made voluntary refunds in those cases we believe appropriate and continue to litigate certain other cases. In addition, we accrue for liabilities associated with those matters that are probable and can be reasonably estimated. The most likely settlement amount to be incurred is accrued based upon a range of estimates. Where no amount within a range of estimates is more likely, then we accrue the minimum amount. As previously disclosed, the Department of Justice (DOJ) sued us in 1999 in the U.S. District Court for the Southern District of Ohio, claiming that Pratt Whitney |
| Note 13: Segment Financial Data | Note 13: Segment Financial Data Our operations are classified into six principal segments: Otis, Carrier, UTC Fire Security, Pratt Whitney, Hamilton Sundstrand and Sikorsky. The segments are generally based on the management structure of the businesses and the grouping of similar operating companies, where each management organization has general operating autonomy over diversified products and services. Results for the quarters ended March 31, 2010 and 2009 are as follows: Revenues Operating Profits Operating Profit Margins (in millions of dollars) 2010 2009 2010 2009 2010 2009 Otis $ 2,732 $ 2,665 $ 596 $ 506 21.8% 19.0% Carrier 2,440 2,487 139 22 5.7% 0.9% UTC Fire Security 1,419 1,286 123 93 8.7% 7.2% Pratt Whitney 2,892 3,180 436 436 15.1% 13.7% Hamilton Sundstrand 1,341 1,381 221 192 16.5% 13.9% Sikorsky 1,366 1,334 145 116 10.6% 8.7% Total segments 12,190 12,333 1,660 1,365 13.6% 11.1% Eliminations and other (99) (84) (45) (37) General corporate expenses - - (77) (78) Consolidated $ 12,091 $ 12,249 $ 1,538 $ 1,250 12.7% 10.2% See Note 7 to the Condensed Consolidated Financial Statements for a discussion of restructuring and other costs included in segment operating results. |
| Note 14: Accounting Pronouncements | Note 14: Accounting Pronouncements In October 2009, the FASB issued ASU No. 2009-13, "Multiple-Deliverable Revenue Arrangements." This ASU establishes the accounting and reporting guidance for arrangements including multiple revenue-generating activities. This ASU provides amendments to the criteria for separating deliverables, measuring and allocating arrangement consideration to one or more units of accounting. The amendments in this ASU also establish a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendor's multiple-deliverable revenue arrangements, including information about the nature and terms, significant deliverables, and its performance within arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the application of the relative selling-price method affects the timing or amount of revenue recognition. The amendments in this ASU are effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. Early application is permitted. We are currently evaluating this new ASU. In October 2009, the FASB issued ASU No. 2009-14, "Certain Revenue Arrangements That Include Software Elements." This ASU changes the accounting model for revenue arrangements that include both tangible products and software elements that are "essential to the functionality," and scopes these products out of current software revenue guidance. The new guidance will include factors to help companies determine what software elements are considered "essential to the functionality." The amendments will now subject software-enabled products to other revenue guidance and disclosure requirements, such as guidance surrounding revenue arrangements with multiple-deliverables. The amendments in this ASU are effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. Early application is permitted. We are currently evaluating this new ASU. In March 2010, the FASB ratified the EITF final consensus on Issue No. 08-9, "Milestone Method of Revenue Recognition." The guidance in this consensus allows milestone method as an acceptable revenue recognition methodology when an arrangement includes substantive milestones. The guidance provides a definition of substantive milestone and should be applied regardless of whether the arrangement includes single or multiple deliverables or units of accounting. The scope of this consensus is limited to the transactions involving milestones relating to research and development deliverables. The guidance includes enhanced disclosure requirements about each arrangement, individual milestones and related contingent consideration, information about substantive milestones and factors considered in the determination. The consensus is effective prospectively to milestones achieved in fiscal years, and interim periods within those years, after June 15, 2010. Early application and retrospective |
| Entity Information (USD $) | ||
| 3 Months Ended
Mar. 31, 2010 | Jun. 30, 2009
| |
| Top Element - 05 - Document - Entity Information | ||
| Entity Registrant Name | UNITED TECHNOLOGIES CORP /DE/ | |
| Entity Central Index Key | 0000101829 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Well-known Seasoned Issuer | Yes | |
| Entity Voluntary Filers | No | |
| Entity Current Reporting Status | Yes | |
| Entity Filer Category | Large Accelerated Filer | |
| Entity Tax Identification Number | 060570975 | |
| Entity Public Float | $48,749,457,537 | |
| Entity Common Stock, Shares Outstanding | 933,080,048 |
| Document Information | |
| 3 Months Ended
Mar. 31, 2010 | |
| Top Element - 06 - Document - Document Information | |
| Document Type | 10-Q |
| Document Period End Date | 2010-03-31 |
| Amendment Flag | false |
| Document Fiscal Year Focus | 2,010 |
| Document Fiscal Period Focus | Q1 |
