United Technologies Corporation, incorporated in Delaware in 1934, provides high-technology products and services to the building systems
and aerospace industries worldwide. Growth is attributable primarily to the internal development of the company's existing businesses and to acquisitions.
The company operates through six business segments (described below). United Technologies is headquartered in Hartford, Connecticut.
On September 21, 2011, UTC announced an agreement to acquire Goodrich Corporation. Under the terms of the agreement, Goodrich shareholders will receive $127.50 in cash for each share of Goodrich common stock they own at the time of the closing of the transaction. This equates to a total enterprise value of $18.4 billion, including $1.9 billion in net debt to be assumed. The transaction was subject to customary closing conditions, including regulatory approvals and Goodrich shareholder approval. The deal closed on July 26, 2012. Goodrich's products include aircraft nacelles and interior systems, actuation and landing systems, and electronic systems. As a result of the acquisition, Goodrich and Hamilton Sundstrand have been combined to form a new segment named UTC Aerospace Systems. UTC expects that the increased scale, financial strength and complementary products of the new combined business will strengthen the company's position in the aerospace and defense industry. Furthermore, UTC expects that the acquisition will enhance its ability to support customers with more integrated systems.
On September 28, 2011, UTC announced a new organizational structure to better serve customers and to drive growth and achieve efficiencies through greater integration across certain product lines. This new structure combines Carrier and UTC Fire & Security into a new segment called UTC Climate, Controls & Security. Beginning with the first quarter of 2012, Carrier and UTC Fire & Security report combined financial and operational results as part of this new segment. As part of this new organizational structure, the company also created UTC Propulsion & Aerospace Systems, a new organization consisting of Pratt & Whitney and UTC Aerospace Systems (Goodrich + Hamilton Sundstrand). UTC will continue to report the financial and operational results of Pratt & Whitney and UTC Aerospace Systems separately.
On March 14, 2012, the Board of Directors of United Technologies approved a plan for the divestiture of a number of non-core businesses. These non-core businesses include the legacy Hamilton Sundstrand industrial businesses, which manufacture air compressors, metering pumps and heavy duty process pumps for industries involved with chemical and hydrocarbon processing, oil and gas production, water and wastewater treatment, and construction, Clipper Windpower plc, a California-based wind turbine manufacturer, Pratt & Whitney Rocketdyne, a leader in the design, development and manufacture of sophisticated space propulsion systems for military and commercial applications, and Pratt & Whitney Power Systems, which sells aero-derivative engines for industrial applications.
The sale of Clipper was completed in the third quarter of 2012 and the sale of the legacy Hamilton Sundstrand industrial businesses was completed in the fourth quarter of 2012. On July 23, 2012, UTC announced an agreement to sell Pratt & Whitney Rocketdyne to GenCorp Inc. for $550 million. On June 14, 2013, UTC completed the sale of substantially all operations of Rocketdyne to GenCorp for $411 million. On December 12, 2012 UTC announced an agreement to sell Pratt & Whitney Power Systems to Mitsubishi Heavy Industries (MHI) On May 17, 2013, UTC completed the sale MHI for $432 million, excluding contingent consideration valued at approximately $200 million, and entered into a long-term engineering and manufacturing agreement with MHI.
On June 29, 2012, UTC's management approved a plan for the divestiture of UTC Power, a world leader in the application of fuel cell technology for stationary and transportation applications. On December 22, 2012, UTC announced an agreement to sell the UTC Power unit to ClearEdge Power. On February 12, 2013, UTC completed the disposition to ClearEdge Power. The UTC Power disposition resulted in payments by UTC totaling $48 million, which included capitalization of the business prior to the sale and interim funding of operations as the acquiror took control of a loss-generating business. UTC has no continuing involvement with the UTC Power business.
In connection with regulatory approval of the Goodrich acquisition, regulatory authorities required UTC to dispose of the Goodrich electric power systems and the pumps and engine controls businesses. On March 18, 2013, UTC completed the sale of the Goodrich pumps and engine controls business to Triumph Group, Inc., and on March 26, 2013, completed the sale of the Goodrich electric power systems business to Safran S.A. Combined proceeds from the sales of the two businesses were approximately $600 million.
On September 23, 2013, UTC announced the formation of UTC Building & Industrial Systems, a new organizational structure consisting of the Otis and UTC Climate, Controls & Security segments. This new organizational structure is expected to enhance the company's ability to deliver more integrated solutions to its customers and accelerate innovation in smart building technologies and sustainable designs. Otis and UTC Climate, Controls & Security each continue to report their financial and operational results as separate segments.
United Technologies conducts its business through five principal business segments:
The following table highlights United Technologies' sales from 2011 to 2013 by segment:
Each of the above segments group similar operating companies. The management organization of each segment has general operating autonomy over
a range of products and services.
The principal products and services of each segment are as follows:
Pratt & Whitney: commercial, military, business jet and general aviation aircraft engines, auxiliary power units, and parts and services.
UTC Aerospace Systems: aerospace products and aftermarket services, including electric power generation, management and distribution systems, flight control systems, engine control systems, intelligence, surveillance and reconnaissance systems, engine components, environmental control systems, fire protection and detection systems, propeller systems, aircraft nacelles, and interior, actuation, landing and electronic systems.
Sikorsky: military and commercial helicopters, aftermarket helicopter and aircraft parts and services.
Otis: elevators, escalators, moving walkways and service.
UTC Climate, Controls & Security: heating, ventilating, air conditioning (HVAC) and refrigeration systems, controls, services and energy-efficient products for residential, commercial, industrial and transportation applications, fire and special hazard detection and suppression systems, firefighting equipment, security, monitoring and rapid response systems and service, and security personnel services.
Pratt & Whitney is among the world's leading suppliers of aircraft engines for the commercial, military, business jet and general aviation markets.
Pratt & Whitney Global Services provides maintenance, repair and overhaul services, including the sale of spare parts, as well as
fleet management services for large commercial engines.
Pratt & Whitney produces families of engines for wide- and narrow-body aircraft in the commercial market and for fighter and transport aircraft in the military market. Pratt & Whitney Canada (P&WC) is a world leader in the production of engines powering business, regional, light jet, utility and military airplanes and helicopters and provides related maintenance, repair and overhaul services, including the sale of spare parts, as well as fleet management services.
In view of the risks and costs associated with developing new engines, Pratt & Whitney has entered into collaboration arrangements in which sales, costs and risks are shared. At December 31, 2013, the interests of third party participants in Pratt & Whitney-directed commercial jet engine programs ranged from 2% to 49%. In addition, Pratt & Whitney has interests in other engine programs, including a 50% ownership interest in the Engine Alliance (EA), a joint venture with GE Aviation, which markets and manufactures the GP7000 engine for the Airbus A380 aircraft. Pratt & Whitney has entered into risk and revenue sharing arrangements with third parties for 40% of the products and services that Pratt & Whitney is responsible for providing to the EA.
On June 29, 2012, Pratt & Whitney, Rolls-Royce plc, MTU Aero Engines AG, and Japanese Aero Engines Corporation (JAEC), participants in the IAE International Aero Engines AG (IAE) collaboration, which sells and supports V2500 engines for the Airbus A320 family of aircraft, completed a restructuring of their interests in IAE. Under the terms of the agreement, Rolls-Royce sold its ownership and collaboration interests in IAE to Pratt & Whitney, while also entering into an agreement to license its V2500 intellectual property to Pratt & Whitney. 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 during the fifteen year period following closing of the purchase, conditional upon each hour flown by V2500-powered aircraft in service at the closing. Rolls-Royce will continue to support the program as a strategic supplier for the V2500 engine and continue to manufacture parts and assemble engines. Also, Pratt & Whitney has entered into a collaboration arrangement with MTU with respect to a portion of the collaboration interest in IAE acquired from Rolls-Royce for consideration of approximately $233 million with additional payments due to Pratt & Whitney in the future. As a result of these transactions, Pratt & Whitney holds a 61% net interest in the collaboration and a 49.5% ownership interest in IAE.
Also, on October 12, 2011, Pratt & Whitney and Rolls-Royce announced an agreement to form a new joint venture, subject to regulatory approval and other closing conditions, in which each will hold an equal share, to develop new engines to power the next generation of 120 to 230 passenger mid-size aircraft that will replace the existing fleet of mid-size aircraft currently in service or in development. On April 12, 2012, MTU and JAEC also agreed to participate in this new joint venture, in which the partners will focus on high-bypass ratio geared turbofan technology and will also collaborate on future studies of next generation propulsion systems.
The development of new engines and improvements to current production engines present important growth opportunities. Pratt & Whitney is under contract with the U.S. Air Force to develop the F135 engine, a derivative of Pratt & Whitney's F119-PW-100 engine (used on the F-22 Raptor), to power the single-engine F-35 Lightning II aircraft being developed by Lockheed Martin.
Pratt & Whitney achieved initial service release for the conventional take-off and landing/carrier variant and short take-off and vertical landing variant of the F135 engine in February 2010 and January 2011, respectively. These propulsion system configurations are now certified for production and cleared for flight on the Lockheed Martin F-35B stealth fighter jet, and are in use by the U.S. Air Force at Eglin Air Force Base and by the U.S. Marine Corps at Marine Corps Air Station Yuma. In addition, Pratt & Whitney is currently developing technology intended to enable it to power proposed and future aircraft, including the PurePower PW1000G Geared TurboFan engine. The PurePower PW1000G engine targets a significant reduction in fuel burn and noise levels with lower environmental emissions and operating costs than current production engines. In 2009, Pratt & Whitney successfully completed ground and flight testing of a demonstrator engine for the PurePower PW1000G engine. In December 2010, Airbus announced that it will offer the PurePower PW1000G engine as a new engine option to power its A320neo family of aircraft scheduled to enter into service in 2015. In November 2012, Pratt & Whitney commenced testing on this new engine, the PW1100G-JM, being developed as part of a collaboration with MTU and JAEC. Additionally, PurePower PW1000G engine models have been selected by Bombardier to power the new CSeries passenger aircraft, by Mitsubishi Aircraft Corporation to power the new Mitsubishi Regional Jet, and by Irkut Corporation of Russia to power the proposed new Irkut MC-21 passenger aircraft. The CSeries passenger aircraft engine received its civil aviation certificate from Transport Canada in February 2013, had its first flight on the CSeries aircraft in September 2013, and is scheduled to enter into service in 2015. The Mitsubishi Regional Jet and the Irkut MC-21 are scheduled to enter into service in 2017. Further, on January 8, 2013, Embraer announced the selection of the PurePower engine to exclusively power the next generation of Embraer's E-Jet family of aircraft scheduled to enter service in 2018.
The success of these aircraft and the PurePower PW1000G family of engines is dependent upon many factors including technological accomplishments, aircraft demand, and regulatory approval. Based on these factors, as well as the level of success of aircraft program launches by aircraft manufacturers and other conditions, additional investment in the PurePower program may be required. P&WC has developed or is developing the PW210 engine family for helicopters manufactured by Sikorsky, AgustaWestland and Airbus Helicopters and is developing the PurePower PW800 engine for the new generation of long-range and heavy business jets. Pratt & Whitney continues to enhance its programs through performance improvement measures and product base expansion.
Pratt & Whitney's products are sold principally to aircraft manufacturers, airlines and other aircraft operators, aircraft leasing companies and the U.S. and foreign governments. Pratt & Whitney's products and services must adhere to strict regulatory and market-driven safety and performance standards. The frequently changing nature of these standards, along with the long duration of aircraft engine development, production and support programs, creates uncertainty regarding engine program profitability. The vast majority of sales are made directly to the end customer and, to a limited extent, through independent distributors and foreign sales representatives.
Financial results for United Technologies' Pratt & Whitney segment were as follows:
Sales to Airbus (Pratt & Whitney's largest non-governmental customer by sales) were 35% and 25% of total Pratt & Whitney segment sales in 2013 and 2012, respectively. Sales to the U.S. Government were 25% and 27% of total Pratt & Whitney segment sales in 2013 and 2012, respectively. Sales generated by Pratt & Whitney's international operations, including U.S. export sales, were 64% and 57% of total Pratt & Whitney segment sales in 2013 and 2012, respectively. At December 31, 2013, Pratt & Whitney's backlog was $38.5 billion, including $3.6 billion of U.S. Government-funded contracts and subcontracts. At December 31, 2012, these amounts were $43.6 billion and $4.3 billion, respectively. Of the total Pratt & Whitney backlog at December 31, 2013, approximately $8.8 billion is expected to be realized as sales in 2014.
As described above, on July 26, 2012, United Technologies acquired Goodrich pursuant to a merger agreement dated September 21, 2011.
As a result of the acquisition, Goodrich became a wholly-owned subsidiary of UTC and the company combined the acquired Goodrich business
and the legacy Hamilton Sundstrand business to form a new segment named UTC Aerospace Systems.
UTC Aerospace Systems is also part of UTC Propulsion & Aerospace Systems, a new organization consisting of the Pratt & Whitney
and UTC Aerospace Systems segments. The company continues to report the financial and operational results of Pratt & Whitney
and UTC Aerospace Systems separately.
UTC Aerospace Systems is among the world's leading suppliers of technologically advanced aerospace products and aftermarket services for diversified industries worldwide. UTC Aerospace Systems' aerospace products include electric power generation, management and distribution systems, flight control systems, engine control systems, intelligence, surveillance and reconnaissance systems, engine components, environmental control systems, fire protection and detection systems, propeller systems, aircraft nacelles, and interior, actuation, landing and electronic systems.
UTC Aerospace Systems products serve commercial, military, regional, business and general aviation, as well as military ground 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, maintenance, repair and overhaul providers, and independent distributors. Sales to Boeing (UTC Aerospace Systems' largest non-government customer by sales) were 13% and 14% of total UTC Aerospace Systems segment sales in 2012 and 2011, respectively. Sales to the U.S. Government were 24% and 25% of total UTC Aerospace Systems segment sales in 2012 and 2011, respectively.
UTC Aerospace Systems is a supplier of several systems, including the propellers, for the Airbus A400M aircraft that entered service in August of 2013. In addition, UTC Aerospace Systems produced product placements supporting first flights in 2013 of the Airbus A350XWB, Bombardier CSeries and Boeing 787-9 platforms.
UTC Aerospace Systems is engaged in numerous commercial and military development programs including the Boeing 787-10, the Bombardier CSeries aircraft, the Mitsubishi Regional Jet, the Airbus A350XWB and A320neo aircraft, the Dassault Falcon 5X business jet, the Embraer E-Jet E2 family of aircraft, the Irkut MC-21 aircraft, the Learjet 85 business jet, the Sikorsky CH-53K next generation heavy lift helicopter for the U.S. Marine Corps, the Lockheed Martin F-35 Lightning II military fighter jet. UTC Aerospace Systems is also the operations support prime contractor for NASA's space suit/life support system and produces environmental monitoring and control, life support, mechanical systems, power generation, management, and distribution and thermal control systems for the International Space Station and the Orion crew exploration vehicle.
Financial results for the UTC Aerospace Systems segment were as follows:
UTC Aerospace Systems' largest non-governmental customers are Boeing and Airbus with, in the aggregate, 32% and 33% of total OEM sales in 2013 and 2012, respectively, and represent a combined 20% of total UTC Aerospace Systems segment sales in both 2013 and 2012. Sales to the U.S. Government were 21% and 24% of total UTC Aerospace Systems segment sales in 2013 and 2012, respectively. Sales generated by UTC Aerospace Systems' international operations, including U.S. export sales, were 55% and 49% of total UTC Aerospace Systems segment sales in 2013 and 2012, respectively. At December 31, 2013, UTC Aerospace Systems' backlog was $10.2 billion, including $2.5 billion of U.S. Government-funded contracts and subcontracts. At December 31, 2012, these amounts were $10.1 billion and $2.5 billion, respectively. Of the total UTC Aerospace Systems backlog at December 31, 2013, approximately $7.2 billion is expected to be realized as sales in 2014.
Sikorsky is the world's largest helicopter manufacturing company. Sikorsky manufactures military and commercial helicopters and also provides
aftermarket helicopter and aircraft parts and services.
Current major production programs at Sikorsky include the UH-60M Black Hawk medium-lift utility helicopter and HH-60M Pave Hawk CSAR/Medevac helicopter for the U.S. and foreign governments, the S-70 Black Hawk for foreign governments, the MH-60R Seahawk and MH-60S Seahawk helicopters for the U.S. Navy, the International Naval Hawk for multiple naval missions, and the S-76 and S-92 helicopters for commercial operations. Sikorsky delivered its first fully configured S-76D in 2013.
The UH-60M helicopter is the latest and most modern in a series of Black Hawk variants that Sikorsky has been delivering to the U.S. Army since 1978 and requires significant additional assembly hours relative to the previous variants. In December 2007, the U.S. government and Sikorsky signed a five-year multi-service contract for 537 H-60 helicopters to be delivered to the U.S. Army and U.S. Navy, which include the UH-60M, HH-60M, MH-60S and MH-60R. In July 2012, the U.S. Government and Sikorsky signed a new five-year multi-service contract for approximately 650 H-60 helicopters. Sikorsky is also developing the CH-53K next generation heavy lift helicopter for the U.S. Marine Corps and the CH-148 derivative of the H-92 helicopter, a military variant of the S-92 helicopter, for the Canadian government. The latter is being developed under a fixed-price contract that provides for the development, production, and 24-year logistical support (through March 2028) of 28 helicopters. Sikorsky currently anticipates that its revenues under these contracts will be approximately $4.2 billion. Revenues are subject to changes in underlying variables such as future flight hours as well as fluctuations in foreign currency exchange rates. This is the largest and most expansive fixed-price development contract in Sikorsky’s history. No aircraft were delivered to the Canadian Government in 2012 or 2013. In December 2013, Sikorsky and the Canadian Government signed a principles of agreement that establishes a framework to restructure the CH-148 contracts and serves as the basis for ongoing formal contract negotiations.
Sikorsky's aftermarket business includes spare parts sales, overhaul and repair services, maintenance contracts and logistics support programs for helicopters and other aircraft. Sales are principally made to the U.S. and foreign governments, and commercial helicopter operators. Sikorsky is increasingly engaging in logistics support programs and partnering with its government and commercial customers to manage and provide logistics, maintenance and repair services.
Financial results for United Technologies' Sikorsky segment were as follows:
Sales to the U.S. Government were 58% and 66% of total Sikorsky segment sales in 2013 and 2012, respectively. Sales generated by Sikorsky's international operations, including U.S. export sales, were 30% and 32% of total Sikorsky segment sales in 2013 and 2012, respectively. At December 31, 2013, Sikorsky's backlog was $14.9 billion, including $5.4 billion of U.S. Government-funded contracts and subcontracts. At December 31, 2012, these amounts were $14.4 billion and $6.4 billion, respectively. Of the total Sikorsky backlog at December 31, 2013, approximately $5.1 billion is expected to be realized as sales in 2014.
Otis is the world's largest elevator and escalator manufacturing, installation and service company.
Otis designs, manufactures, sells and installs a wide range of passenger and freight elevators for low-, medium- and high-speed applications, as well as a broad line of escalators and moving walkways. In addition to new equipment, Otis provides modernization products to upgrade elevators and escalators as well as maintenance and repair services for both its products and those of other manufacturers. Otis serves customers in the commercial and residential property industries around the world. Otis sells directly to the end customer and, to a limited extent, through sales representatives and distributors.
Financial results for United Technologies' Otis segment were as follows:
Sales generated by Otis' international operations were 82% of total Otis segment sales in both 2013 and 2012. At December 31, 2013, Otis' backlog was $15.4 billion as compared to $14.8 billion at December 31, 2012. Of the total Otis backlog at December 31, 2013, approximately $8.6 billion is expected to be realized as sales in 2014.
UTC Climate, Controls & Security is the world's leading provider of HVAC and refrigeration solutions, including controls for residential,
commercial, industrial and transportation applications. These products and services are sold under the Carrier name
and other brand names to building contractors and owners, homeowners, transportation companies, retail stores and food service companies.
UTC Climate, Controls & Security is also a global provider of security and fire safety products and services.
As described above, in 2012, UTC implemented a new organizational structure that allows the company to better serve customers, drive growth and achieve further efficiencies through greater integration across certain product lines. As part of this new structure, effective January 1, 2012, the company formed the UTC Climate, Controls & Security segment, which is composed of the former Carrier and UTC Fire & Security segments.
UTC Climate, Controls & Security provides electronic security products such as intruder alarms, access control systems and video surveillance systems and designs and manufactures a wide range of fire safety products including specialty hazard detection and fixed suppression products, portable fire extinguishers, fire detection and life safety systems, and other firefighting equipment. Services provided to the electronic security and fire safety industries include systems integration, video surveillance, installation, maintenance, and inspection services. In certain markets, UTC Climate, Controls & Security also provides monitoring, response and security personnel services, including cash-in-transit security, to complement its electronic security and fire safety businesses. Through its venture with Watsco, UTC Climate, Controls & Security distributes Carrier, Bryant, Payne and Totaline residential and light commercial HVAC products in the U.S. and selected territories in the Caribbean and Latin America. UTC Climate, Controls & Security sells directly to end customers and through manufacturers' representatives, distributors, wholesalers, dealers and retail outlets. Certain of UTC Climate, Controls & Security's HVAC businesses are seasonal and can be impacted by weather. UTC Climate, Controls & Security customarily offers its customers incentives to purchase products to ensure an adequate supply of its products in the distribution channels. The principal incentive program provides reimbursements to distributors for offering promotional pricing on UTC Climate, Controls & Security products. UTC Climate, Controls & Security products and services are used by governments, financial institutions, architects, building owners and developers, security and fire consultants, homeowners and other end-users requiring a high level 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, dealers and U.S. retail distribution.
In 2010, UTC completed the acquisition of the GE Security business from General Electric Company, strengthening UTC Climate, Controls & Security's portfolio of security and fire safety technologies for commercial and residential applications, including fire detection and life safety systems, intrusion alarms, video surveillance and access control systems.
In 2012, UTC Climate, Controls & Security continued to execute the portfolio transformation strategy it began in 2008 by completing divestitures of several non-core businesses and taking non-controlling equity interests in various ventures. This included the sale of a controlling interest in a Carrier manufacturing and distribution joint venture in Asia and the sale of a controlling interest in the Carrier Canadian distribution business. These 2012 actions marked the completion of the Carrier portfolio transformation. In 2012, UTC Climate, Controls & Security also completed a number of transactions related to its ongoing fire and security portfolio transformation, including the divestiture of a controlling stake in its U.S.-based fire and security branch operations.
Financial results for the UTC Climate, Controls & Security segment were as follows:
Sales generated by UTC Climate, Controls & Security's international operations, including U.S. export sales, were 61% and 62% of total UTC Climate, Controls & Security segment sales in 2013 and 2012, respectively. At December 31, 2013, UTC Climate, Controls & Security's backlog was $3.1 billion as compared to $3.0 billion at December 31, 2012. Substantially all of the backlog at December 31, 2013 is expected to be realized as sales in 2014.
Revenues ('13): $62,626M +8.5%
R&D ('13): $2,529M +6.7%
Net Profit ('13): $6,109M +11.3%
CAPEX ('13): $1,688M +21.5%
Aerospace Sector:Major Diversified OEM
United Technologies Products:
Civil Aircraft engines; Military Aircraft Engines; Engine maintenance, repair, and overhaul services; Engine spares;
Fleet management services; Power generation, management, and distribution systems; Flight control systems;
Engine control systems; Environmental control systems;
Fire protection and detection systems, Auxiliary power units; Propeller systems; Military helicopters;
Commercial helicopters; and Aftermarket helicopter and aircraft parts and services.
UTC's Major DoD Defense Programs:
| C-130 Hercules
| F-16 Falcon |
UTC's Commercial Programs:
| Airbus: A320 Series, A330, A350XWB, A380 |
|Sales 2009-2013||Net Income 2009-2013||R&D Spending 2009-2013||# Employees 2009-2013|