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About United Technologies Corporation

United Technologies (UTC) provides high-tech products and services for the aerospace, commercial building, and automated controls and security industries. It operates through engine aircraft manufacturer Pratt & Whitney; Carrier, its former climate, controls, and security business; Collins Aerospace Systems, maker of engine controls and flight systems for military and commercial aircraft; and Otis, the world's largest elevator and escalator manufacturer. UTC announced in 2018 that it would split into three separate companies based on its business segments. Carrier and Otis will operate as standalone companies. In 2019, UTC said it would merge the Collins and Pratt & Whitney units with Raytheon in an all-stock deal. 

Change in Company Type

UTC and Raytheon agreed in 2019 to merge in a deal valued at $121 billion, creating a company with strong aerospace and defense offerings. The combined company would have annual revenue of about $74 billion, making it the second biggest aerospace company behind Boeing. Called Raytheon Technologies, the company would pair United’s Collins Aerospace and Pratt & Whitney units with Raytheon's defense products, which include the Patriot and Sidewinder missile systems. In the all-stock deal, United shareholders would own 57% of the company and Raytheon shareholders would own the rest. The deal requires regulatory approval, but the companies expect it to close in the first half of 2020.

UTC completed the acquisition of Rockwell Collins in a $30 billion deal in 2018. The company is spinning off its other units into independent companies to provide better focus and flexibility to each business. The Climate, Controls and Security business will be renamed Carrier and focus on heating and cooling products. Otis will continue to provide elevators, escalators and moving walkways as the third independent company. The company expects the separation to be completed in 2020.

Operations

UTC operates through four segments: Pratt & Whitney, Carrier, Collins Aerospace Systems, and Otis.

Pratt & Whitney (about 30% of total sales) makes and sells aircraft engines for the commercial, military, business jet, and general aviation markets. It also provides fleet management and aftermarket maintenance services. Its Pratt & Whitney Canada is among the world’s leading suppliers of engines for the general and business aviation markets, and also supplies products for regional airlines, utility airplanes, and helicopters.

The Carrier segment (nearly 30%) makes HVAC, refrigeration, fire, security, and building automation products for the commercial, government, and residential sectors. It also provides refrigeration and monitoring products and solutions for the transportation industry. Many of Carrier's security and fire safety products are marketed under the Chubb and Kidde brand names.

Collins Aerospace Systems (roughly 25%) provides aerospace products and aftermarket services for aircraft manufacturers, airlines, the military, and space and undersea operations. Products include power generation and management, aircraft sensing and engine control systems, and surveillance and reconnaissance systems, among several others. It also provides information management services through voice and data communication networks worldwide.

The company's Otis segment (generating about 20% of revenue) is the world’s largest elevator and escalator manufacturer. It designs, installs, and services a wide range of passenger and freight elevators as well as escalators and moving walkways. Otis also makes modernization products that improve the safety, reliability, and aesthetics of existing installations. Its CompassPlus product features a touch screen for destination management that gets people to their destinations 50% faster than traditional elevator systems.

Geographic Reach

Headquartered in Farmington, CT, UTC does business in more than 120 countries. It operates more than 650 major properties comprising approximately 96 million square feet of manufacturing space.

The US generates roughly 60% of the company's total sales, followed by Europe (20%) and the Asia Pacific region (15%).

Sales and Marketing

Customers in the commercial and industrial sectors contribute more than 45% of UTC's total revenue. The commercial aerospace market generates almost 40%, and the military aerospace and space sectors about 15%. The US government generates about 25% of Pratt & Whitney's sales and almost 20% of Collins Aerospace Systems' sales.

Carrier sells its products directly to customers and through manufacturers' reps, distributors, dealers, and through retail channels. Otis sells directly to customers and through sales reps and distributors.

 

Financial Performance

UTC has seen a general upward trend in revenue for the last several years, leading to record sales and earnings in 2018.

Revenue in 2018 spiked up by 11% to $66.5 billion compared with $59.8 billion the previous year. The increase in revenue was driven by higher sales in all its divisions. Pratt & Whitney grew by 14% with higher commercial aftermarket and military sales and higher commercial OEM sales. Growth in HVAC revenue at Carrier and higher service and equipment sales at Otis also contributed to the increase.

Net income reached $5.3 billion, up 16% over $4.6 billion in 2017, mainly from increased sales.

Cash at the end of fiscal 2018 was $6.2 billion, an increase of $2.8 billion from the prior year. Cash from operations contributed $6.3 billion to the coffers, while investing activities used $17.0 billion, mainly for the acquisition of Rockwell Collins. Financing activities provided $7.9 billion, primarily from loans. This total includes $2.2 billion paid to stockholders.

Strategy

UTC is capitalizing on the growth in commercial aviation and an expanding middle class, which is providing more sales opportunities in all its businesses. The company continues to introduce new and innovative products and is investing in digital technologies—such as data analytics, autonomy, and electricification—that it believes will drive future growth.

In 2018, the company's decision to spin off its Carrier and Otis operations as standalone companies aims to increase the value of both entities and focus on the commercial aerospace business under the UTC name. 

Carrier has increased its business through more than 200 new product launches in the past two years. It opened a technology and customer experience center in Palm Beach Gardens, FL where customers can see its products and services working to improve building efficiency. The business also streamlined its portfolio by divesting its Taylor Company (equipment manufacturer) and acquiring S2 Security, a maker of video management solutions.

Otis introduced its Otis Signature Services and Otis ONE platform that uses digital technologies for remote diagnostics, data analytics, and machine learning to prevent shutdowns. 

Mergers and Acquisitions

In the biggest aerospace deal in history, UTC acquired aircraft parts manufacturer Rockwell Collins for $23 billion in 2018. Rockwell is now a new UTC division named Collins Aerospace Systems. UTC projects the new division will generate more than $23 billion in revenue per year and will make aviation electronics and communication equipment for commercial and military aircraft. UTC is making the deal to boost its aerospace business and position it as a springboard for future growth. 

UTC intends to separate its other commercial businesses, Otis and Carrier (formerly its Climate, Controls, & Security business) into independent companies. Expected to be completed in 2020, spinoff activities are underway and posing several challenges including separating tax filings and IT systems.

Company Background

United Technologies dates back to 1929 when William Boeing of Boeing Firms and Frederick Rentschler of Pratt & Whitney formed the United Aircraft and Transport Corporation. United Aircraft soon bought aviation companies Hamilton Aero, Standard Steel Propeller, and Sikorsky.

United Aircraft split in 1934 into three independent entities: United Airlines, Boeing Airplane Company, and United Aircraft. United Aircraft retained Pratt & Whitney and several other manufacturing interests. In 1975, the company changed its name to United Technologies Corporation, representing the intent to diversify into other fields in addition to the aerospace industry.

United Technologies Corporation

10 FARM SPRINGS RD
Farmington, CT 06032-2577
Phone: 1 (860) 728-7000

Stats

Employer Type: Publicly Owned
Stock Symbol: UTX
Stock Exchange: , NYSE
SVP Digital and CIO: Vince Campisi
Chairman, President, and CEO: Gregory J. Hayes
EVP and CFO: Akhil Johri
Employees (This Location): 430
Employees (All Locations): 240,000

Major Office Locations

Farmington, CT

Other Locations

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