UTC Reports Third Quarter EPS of $1.14, Expects 2009 EPS of $4.10, 2009 Restructuring Increased to $800 Million

UTC Reports Third Quarter EPS of $1.14, Expects 2009 EPS of $4.10, 2009
Restructuring Increased to $800 Million

HARTFORD, Conn., Oct. 20 /PRNewswire-FirstCall/ -- United Technologies Corp.
(NYSE: UTX) today reported third quarter 2009 earnings per share of $1.14 and
net income attributable to common shareowners of $1.1 billion, down 14 percent
and 17 percent, respectively, over the year ago quarter. Results for the
current quarter include $0.13 per share in restructuring costs net of one time
gains, as compared with $0.03 in the year ago quarter. Before these items,
earnings per share declined 7 percent. Adverse foreign currency translation
and currency hedges at Pratt & Whitney Canada totaled $0.07 per share in the
third quarter of 2009.

Revenues for the quarter at $13.4 billion were 11 percent below prior year
including organic decline (7 points) and adverse foreign currency translation
(3 points). Segment operating margin at 14.5 percent was 20 basis points
higher than prior year. Adjusted for restructuring costs and one time gains,
segment operating margin was 70 basis points higher than prior year. Cash
flow from operations was $1.9 billion, including $150 million of domestic
pension contributions. Capital expenditures were $161 million in the quarter.

"Strong execution and our relentless focus on cost contributed to record
segment operating margin even in the face of tough end markets," said Louis
Chenevert, UTC President and Chief Executive Officer. "Cash flow from
operations less capital expenditures was 160 percent of net income
attributable to common shareowners on significant inventory reductions across
both commercial and aerospace businesses.

"Year over year order rates have substantially stabilized although at lower
levels and we've started to see improvement in some Asian economies, notably
China," Chenevert continued. "Based on overall order trends as well as
significant cost traction, we now expect 2009 earnings per share at $4.10, the
midpoint of the prior range of $4.00 to $4.20. This guidance also reflects
higher restructuring of $800 million this year with one-time gains of around
$175 million, compared with $750 million of restructuring and $200 million of
gains assumed earlier.

"Cash flow from operations less capital expenditures year to date is 123
percent of net income attributable to common shareowners, notwithstanding
$551 million of domestic pension contributions," Chenevert said. "Working
capital and inventory reductions are enabling this, and we are confident this
cash flow metric will again exceed UTC's usual standard of 100 percent for the
year."

Chenevert added, "Order rates for most of our businesses have largely
stabilized, although the shape of recovery is still uncertain. What is
certain is the cost traction across UTC. In addition, the portfolio
transformation at Carrier, a strong military backlog, and significant
aftermarket content in all our businesses position us to resume earnings
growth in 2010."

The accompanying tables include information integral to assessing the
company's financial position, operating performance, and cash flow.

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 .

This release includes "forward looking statements" concerning expected
revenue, earnings, cash flow, share repurchases, restructuring; anticipated
benefits of UTC's diversification, cost reduction efforts and business model;
and other matters that are subject to risks and uncertainties. These
statements often contain words such as "expect", "anticipate", "plan",
"estimate", "believe", "will", "should", "see", "guidance" and similar terms.
Important factors that could cause actual results to differ materially from
those anticipated or implied in forward looking statements include extended
weakness in global economic conditions; extended contraction in credit
conditions; the impact of volatility and deterioration in financial markets on
overall levels of economic activity; declines in end market demand in
construction and in both the commercial and defense segments of the aerospace
industry; fluctuation in commodity prices, interest rates, foreign currency
exchange rates, and the impact of weather conditions; and company specific
items including the impact of further deterioration and extended weakness in
global economic conditions on the financial strength of customers and
suppliers and on levels of air travel; financial difficulties, including
bankruptcy, of commercial airlines; the availability and impact of
acquisitions; the rate and ability to effectively integrate these acquired
businesses; the ability to achieve cost reductions at planned levels;
challenges in the design, development, production and support of advanced
technologies and new products and services; delays and disruption in delivery
of materials and services from suppliers; labor disputes; and the outcome of
legal proceedings. The level of share repurchases may vary depending on the
level of other investing activities. For information identifying other
important economic, political, regulatory, legal, technological, competitive
and other uncertainties, see UTC's SEC filings as submitted from time to time,
including but not limited to, the information included in UTC's 10-K and 10-Q
Reports under the headings "Business", "Risk Factors", "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Cautionary Note Concerning Factors that May Affect Future Results", as well
as the information included in UTC's Current Reports on Form 8-K.

UTC-IR

Contact: John Moran
(860) 728-7062
www.utc.com

United Technologies Corporation
Condensed Consolidated Statement of Operations

Quarter Ended Nine Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
(Millions, except per share amounts) 2009 2008 2009 2008
---- ---- ---- ----

Revenues $13,375 $15,085 $38,820 $44,987

Costs and Expenses
Cost of goods and services sold 9,836 10,935 28,544 32,809
Research and development 344 436 1,137 1,281
Selling, general and administrative 1,424 1,665 4,481 5,075
----- ----- ----- -----
Operating Profit 1,771 2,049 4,658 5,822
Interest expense 170 177 522 518
--- --- --- ---
Income before income taxes 1,601 1,872 4,136 5,304
Income taxes 456 502 1,126 1,480
--- --- ----- -----
Net income 1,145 1,370 3,010 3,824
Less: Noncontrolling interest in
subsidiaries' earnings 87 101 254 280
-- --- --- ---
Net income attributable to common
shareowners $1,058 $1,269 $2,756 $3,544
====== ====== ====== ======

Net Earnings Per Share of Common Stock
Basic $1.15 $1.36 $3.00 $3.76
Diluted $1.14 $1.33 $2.97 $3.68

Average Shares
Basic 917 933 918 943
Diluted 929 951 928 964

As described on the following pages, consolidated results for the
quarters and nine months ended September 30, 2009 and 2008 include
non-recurring items, restructuring and related charges.

See accompanying Notes to Condensed Consolidated Financial Statements.

United Technologies Corporation
Segment Revenues and Operating Profit

Quarter Ended Nine Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
(Millions) 2009 2008 2009 2008
---- ---- ---- ----

Revenues
Otis $2,962 $3,245 $8,579 $9,706
Carrier 3,007 3,917 8,594 11,682
UTC Fire & Security 1,383 1,624 3,999 4,960
Pratt & Whitney 3,031 3,421 9,322 10,454
Hamilton Sundstrand 1,400 1,532 4,183 4,643
Sikorsky 1,648 1,438 4,371 3,768
----- ----- ----- -----
Segment Revenues 13,431 15,177 39,048 45,213
Eliminations and other (56) (92) (228) (226)
--- --- ---- ----
Consolidated Revenues $13,375 $15,085 $38,820 $44,987
======= ======= ======= =======

Operating Profit
Otis $633 $648 $1,770 $1,899
Carrier 312 421 594 1,156
UTC Fire & Security 149 154 297 395
Pratt & Whitney 444 530 1,347 1,602
Hamilton Sundstrand 247 286 626 795
Sikorsky 157 133 406 326
--- --- --- ---
Segment Operating Profit 1,942 2,172 5,040 6,173
General corporate expenses (73) (90) (240) (296)
Eliminations and other (98) (33) (142) (55)
--- --- ---- ---
Consolidated Operating Profit $1,771 $2,049 $4,658 $5,822
====== ====== ====== ======

Segment Operating Profit Margin
Otis 21.4% 20.0% 20.6% 19.6%
Carrier 10.4% 10.7% 6.9% 9.9%
UTC Fire & Security 10.8% 9.5% 7.4% 8.0%
Pratt & Whitney 14.6% 15.5% 14.4% 15.3%
Hamilton Sundstrand 17.6% 18.7% 15.0% 17.1%
Sikorsky 9.5% 9.2% 9.3% 8.7%
--- --- --- ---
Segment Operating Profit Margin 14.5% 14.3% 12.9% 13.7%

As described on the following pages, consolidated results for the quarters
and nine months ended September 30, 2009 and 2008 include non-recurring
items, restructuring and related charges.

United Technologies Corporation
Consolidated Operating Profit

Consolidated operating profit for the quarters and nine months ended
September 30, 2009 and 2008 includes restructuring and related charges as
follows:

Quarter Ended Nine Months Ended
September 30, September 30,
(Unaudited) (Unaudited)

(Millions) 2009 2008 2009 2008
---- ---- ---- ----
Otis $52 $5 $131 $11
Carrier(1) 43 34 139 91
UTC Fire & Security 7 - 107 33
Pratt & Whitney(2) 57 52 177 83
Hamilton Sundstrand 13 2 69 3
Sikorsky - - 7 -
General Corporate Expenses - - 3 -
Eliminations and Other(3) 59 - 62 -
-- --- -- ---
Total Restructuring and Related
Charges(1) $231 $93 $695 $221
==== === ==== ====

(1) Approximately $4 million and $12 million of the total amount of
restructuring and related charges incurred in the quarter ended
September 30, 2009 and June 30, 2009, respectively, resides in other
income, net which is reflected within revenues.

(2) Restructuring and related charges recorded in the quarter ended
September 30, 2009 at Pratt & Whitney primarily reflect reserves
established in connection with Pratt's announced plans to close its
Connecticut Airfoil Repair Operations facility in East Hartford,
Connecticut and its engine overhaul facility in Cheshire, Connecticut.

(3) Amount incurred in the quarter ended September 30, 2009 reflects the
impact of a curtailment of our domestic pension plans.

Consolidated results for the quarter and nine months ended September 30, 2009
include the following non-recurring items.

Q3-2009

Carrier: Approximately $57 million gain recognized from the contribution of
the majority of Carrier's US residential sales and distribution business into
a new venture formed with Watsco, Inc.

Eliminations and Other: Approximately $17 million of favorable pretax
interest adjustments related to global tax examination activity in the
quarter, primarily reflecting the completion of our review of the 2004 to 2005
Internal Revenue Service (IRS) audit report.

Income Taxes: Favorable income tax adjustments of approximately $38 million
based on global examination activity in the quarter, including completion of
our review of the 2004 to 2005 IRS audit report.

Income Taxes: Approximately $32 million adverse tax impact associated with a
foreign reorganization.

Q2-2009

Otis: An approximately $52 million non-cash, non-taxable gain recognized on
the remeasurement to fair value of a previously held equity interest in a
joint venture as a result of the purchase of a controlling interest.

Q1-2009

Income Taxes: Favorable tax impact of approximately $25 million related to the
formation of a commercial venture.

Q3-2008

Pratt & Whitney: Approximately $37 million non-cash gain on a partial sale of
an investment.

The following page provides segment revenues, operating profit and operating
profit margins as adjusted for restructuring and the aforementioned
non-recurring items. Management believes these adjusted results more
accurately portray the ongoing operational performance and fundamentals of the
underlying businesses. The amounts and timing of restructuring and
non-recurring activity can vary substantially from period to period with no
assurances of comparable activity or amounts being incurred in future periods.
The level of expected restructuring announced in 2009 of $800 million (of
which $695 million has been recorded to date), is significantly in excess of
that incurred in prior years and reflects the severity of the current global
recession. These amounts have therefore been adjusted out in the following
schedule in order to provide a more representative comparison of current year
operating performance to prior year performance.

United Technologies Corporation
Segment Revenues and Operating Profit Adjusted for Restructuring and
Non-recurring items (as reflected on the previous page)

Quarter Ended Nine Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
(Millions) 2009 2008 2009 2008
---- ---- ---- ----

Adjusted Revenues
Otis $2,962 $3,245 $8,527 $9,706
Carrier 2,954 3,917 8,553 11,682
UTC Fire & Security 1,383 1,624 3,999 4,960
Pratt & Whitney 3,031 3,384 9,322 10,417
Hamilton Sundstrand 1,400 1,532 4,183 4,643
Sikorsky 1,648 1,438 4,371 3,768
----- ----- ----- -----
Adjusted Segment Revenues 13,378 15,140 38,955 45,176
Eliminations and other (73) (92) (245) (226)
--- --- ---- ----
Adjusted Consolidated Revenues $13,305 $15,048 $38,710 $44,950
======= ======= ======= =======

Adjusted Operating Profit
Otis $685 $653 $1,849 $1,910
Carrier 298 455 676 1,247
UTC Fire & Security 156 154 404 428
Pratt & Whitney 501 545 1,524 1,648
Hamilton Sundstrand 260 288 695 798
Sikorsky 157 133 413 326
--- --- --- ---
Adjusted Segment Operating
Profit 2,057 2,228 5,561 6,357
General corporate expenses (73) (90) (237) (296)
Eliminations and other (56) (33) (97) (55)
--- --- --- ---
Adjusted Consolidated Operating
Profit $1,928 $2,105 $5,227 $6,006
====== ====== ====== ======

Adjusted Segment Operating
Profit Margin
Otis 23.1% 20.1% 21.7% 19.7%
Carrier 10.1% 11.6% 7.9% 10.7%
UTC Fire & Security 11.3% 9.5% 10.1% 8.6%
Pratt & Whitney 16.5% 16.1% 16.3% 15.8%
Hamilton Sundstrand 18.6% 18.8% 16.6% 17.2%
Sikorsky 9.5% 9.2% 9.4% 8.7%
--- --- --- ---
Adjusted Segment Operating
Profit Margin 15.4% 14.7% 14.3% 14.1%

United Technologies Corporation
Condensed Consolidated Balance Sheet

September 30, December 31,
(Millions) 2009 2008
---- ----
(Unaudited) (Unaudited)
Assets
------
Cash and cash equivalents $4,632 $4,327
Accounts receivable, net 8,460 9,480
Inventories and contracts in progress, net 8,086 8,340
Other current assets 2,551 2,320
----- -----
Total Current Assets 23,729 24,467

Fixed assets, net 6,278 6,348
Goodwill, net 16,204 15,363
Intangible assets, net 3,546 3,443
Other assets 7,820 7,216
----- -----

Total Assets $57,577 $56,837
======= =======

Liabilities and Equity
----------------------
Short-term debt $1,703 $2,139
Accounts payable 4,430 5,594
Accrued liabilities 12,067 12,069
------ ------
Total Current Liabilities 18,200 19,802

Long-term debt 8,729 9,337
Other liabilities 11,002 10,772
------ ------
Total Liabilities 37,931 39,911
------ ------

Shareowners' Equity:
Common Stock 11,332 10,979
Treasury Stock (15,090) (14,316)
Retained Earnings 26,827 25,159
Accumulated other comprehensive loss (4,580) (5,905)
------ ------
Total Shareowners' Equity 18,489 15,917
Noncontrolling interest 1,157 1,009
----- -----
Total Equity 19,646 16,926
------ ------

Total Liabilities and Equity $57,577 $56,837
======= =======

Debt Ratios:
Debt to total capitalization 35% 40%
Net debt to net capitalization 23% 30%

United Technologies Corporation
Condensed Consolidated Statement of Cash Flows

Quarter Nine Months
Ended Ended
September 30, September 30,
(Unaudited) (Unaudited)
(Millions) 2009 2008 2009 2008
---- ---- ---- ----

Operating Activities
Net income attributable to common
shareowners $1,058 $1,269 $2,756 $3,544
Noncontrolling interest in subsidiaries'
earnings 87 101 254 280
-- --- --- ---
Net income 1,145 1,370 3,010 3,824
Adjustments to reconcile net income to
net cash flows provided by operating
activities:
Depreciation and amortization 316 326 925 971
Deferred income tax provision (benefit) 13 (10) 36 (143)
Stock compensation cost 32 51 110 161
Changes in working capital 480 49 284 (690)
Domestic pension contributions (150) - (551) -
Other, net 17 49 64 18
-- -- -- --
Net Cash Provided by Operating
Activities 1,853 1,835 3,878 4,141
----- ----- ----- -----

Investing Activities
Capital expenditures (161) (268) (501) (810)
Acquisitions and disposal of businesses,
net (297) 23 (450) (438)
Other, net 254 286 220 58
--- --- --- --
Net Cash Used in Investing Activities (204) 41 (731) (1,190)
---- -- ---- ------

Financing Activities
(Decrease) increase in borrowings, net (409) (328) (1,037) 1,252
Dividends paid on Common Stock (339) (286) (1,018) (869)
Repurchase of Common Stock (430) (950) (780) (2,470)
Other, net 55 (60) (73) (149)
-- --- --- ----
Net Cash Used in Financing Activities (1,123) (1,624) (2,908) (2,236)
------ ------ ------ ------

Effect of foreign exchange rates 90 (79) 66 (4)
-- --- -- --

Net increase in cash and cash
equivalents 616 173 305 711

Cash and cash equivalents - beginning of
period 4,016 3,442 4,327 2,904
----- ----- ----- -----
Cash and cash equivalents - end of period $4,632 $3,615 $4,632 $3,615
====== ====== ====== ======

United Technologies Corporation
Free Cash Flow Reconciliation

Quarter Ended
September 30,
(Millions) (Unaudited)
2009 2008
---- ----

Net income attributable to common
shareowners $1,058 $1,269
Noncontrolling interest in subsidiaries'
earnings 87 101
-- ---
Net income 1,145 1,370

Depreciation and amortization 316 326
Changes in working capital 480 49
Other (88) 90
--- --
Cash flow from operating activities 1,853 1,835
Cash flow from operating activities as a
percentage of net income attributable to
common shareowners 175% 144%
Capital expenditures (161) (268)
---- ----
Capital expenditures as a percentage of
net income (15)% (21)%
attributable to common shareowners --- ---
Free cash flow $1,692 $1,567
====== ======
Free cash flow as a percentage of net
income attributable to common shareowners 160% 123%
=== ===

Free cash flow, which represents cash flow from operations less capital
expenditures, is the principal cash performance measure used by the
Company. Management believes free cash flow provides a relevant measure
of liquidity and a useful basis for assessing the Corporation's ability to
fund its activities, including the financing of acquisitions, debt
service, repurchases of the Corporation's Common Stock and distribution
of earnings to shareholders. Others that use the term free cash flow may
calculate it differently. The reconciliation of net cash flow provided by
operating activities, prepared in accordance with Generally Accepted
Accounting Principles, to free cash flow is above.

United Technologies Corporation
Notes to Condensed Consolidated Financial Statements

1. Certain reclassifications have been made to the prior year amounts to
conform to the current year presentation of noncontrolling interests
and
collaborative arrangements as required by the Consolidation Topic and
Collaborative Arrangements Topic, respectively, of the FASB Accounting
Standards Codification ("FASB ASC"). Effective January 1, 2009, we
adopted the provisions under the Consolidation Topic of the FASB ASC as
it relates to the accounting for noncontrolling interests in
Consolidated
Financial Statements. Such provisions include a requirement that the
carrying value of noncontrolling interest (previously referred to as
minority interest) be removed from the mezzanine section of the balance
sheet and reclassified as equity; and consolidated net income to be
recast to include net income attributable to the noncontrolling
interest.
The Collaborative Arrangements Topic of the FASB ASC, which we adopted
as
of January 1, 2009, shall be applied retrospectively to all prior
periods
presented for all collaborative arrangements existing as of the
effective
date. The Collaborative Arrangements Topic requires that participants
in
a collaborative arrangement report costs incurred and revenues
generated
from these transactions on a gross basis and in the appropriate line
item
in each company's financial statement. Under this Topic, revenues were
increased approximately $174 million and $271 million for the quarters
ended September 30, 2009 and 2008 and $588 million and $805 million for
the nine months ended September 30, 2009 and 2008, respectively, with
an
offsetting increase to cost of sales to reflect the collaborators'
share
of revenues on a gross basis. Additionally, both accounts receivable
and
accounts payable were increased by $368 million as of December 31, 2008
in order to reflect the amounts owed to our collaborative partners for
their share of revenues on a gross basis.
2. Debt to total capitalization equals total debt divided by total debt
plus
equity. Net debt to net capitalization equals total debt less cash and
cash equivalents divided by total debt plus equity less cash and cash
equivalents.

3. Organic growth represents the total reported increase within the
Corporation's ongoing businesses less the impact of foreign currency
translation, acquisitions and divestitures completed in the preceding
twelve months and significant non-recurring items. Non-recurring items
that are not included in organic growth in 2009 include an
approximately
$57 million gain recognized from the contribution of the majority of
Carrier's U.S. residential sales and distribution business into a new
venture formed with Watsco, Inc., approximately $52 million related to
a
non-cash, non-taxable gain recognized on the remeasurement to fair
value
of a previously held equity interest in a joint venture as a result of
the purchase of a controlling interest and approximately $17 million of
favorable pretax interest adjustments related to global tax examination
activity in the quarter, primarily reflecting the completion of our
review of the 2004 to 2005 Internal Revenue Service (IRS) audit report.

Not included within organic growth for 2008 is a non-recurring item of
approximately $37 million related to a non-cash gain on a partial sale
of
an investment at Pratt & Whitney.

SOURCE United Technologies Corp.

Media, John Moran, +1-860-728-7062; Investors, UTC Investor Relations,
+1-860-728-7608