# RTX Corp: Form 10-Q for the period ended Jun 30, 2018

- Company: [RTX Corp](/companies/rtx.md) (CIK 101829)
- Form: 10-Q
- Filed: 2018-07-27
- Accepted by EDGAR: Jul 27, 2018, 07:03 ET
- Period: 2018-06-30
- Accession: 0000101829-18-000027
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/101829/000010182918000027/a2018-06x3010xq.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/101829/000010182918000027/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2018-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2018-04-01 to 2018-06-30 | $16.70bn | us-gaap:Revenues |
| Revenue | 6 months, 2018-01-01 to 2018-06-30 | $31.95bn | us-gaap:Revenues |
| Research and development | 3 months, 2018-04-01 to 2018-06-30 | $589.0m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2018-01-01 to 2018-06-30 | $1.14bn | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2018-04-01 to 2018-06-30 | $1.76bn | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2018-01-01 to 2018-06-30 | $3.47bn | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2018-04-01 to 2018-06-30 | $2.88bn | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2018-01-01 to 2018-06-30 | $4.80bn | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2018-04-01 to 2018-06-30 | $234.0m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2018-01-01 to 2018-06-30 | $463.0m | us-gaap:InterestExpense |
| Income tax | 3 months, 2018-04-01 to 2018-06-30 | $695.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2018-01-01 to 2018-06-30 | $1.22bn | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2018-04-01 to 2018-06-30 | $2.05bn | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2018-01-01 to 2018-06-30 | $3.35bn | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2018-04-01 to 2018-06-30 | $2.56 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2018-01-01 to 2018-06-30 | $4.18 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2018-04-01 to 2018-06-30 | $2.59 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2018-01-01 to 2018-06-30 | $4.23 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2018-04-01 to 2018-06-30 | 799,600,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2018-01-01 to 2018-06-30 | 800,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2018-01-01 to 2018-06-30 | $2.56bn | us-gaap:NetCashProvidedByUsedInOperatingActivitiesContinuingOperations |
| Capital expenditure | 6 months, 2018-01-01 to 2018-06-30 | $709.0m | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 6 months, 2018-01-01 to 2018-06-30 | $1.07bn | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 6 months, 2018-01-01 to 2018-06-30 | $52.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2018-06-30 | $11.07bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2018-06-30 | $36.56bn | us-gaap:AssetsCurrent |
| Total assets | at 2018-06-30 | $101.57bn | us-gaap:Assets |
| Current liabilities | at 2018-06-30 | $25.07bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2018-06-30 | $68.09bn | us-gaap:Liabilities |
| Short-term borrowings | at 2018-06-30 | $985.0m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2018-06-30 | $31.36bn | us-gaap:StockholdersEquity |
| Shares outstanding | at 2018-06-30 | 800,093,285 shares | dei:EntityCommonStockSharesOutstanding |

## Management's discussion and analysis

As filed, 74,109 characters.

### BUSINESS OVERVIEW

We are a global provider of high technology products and services to the building systems and aerospace industries. Our operations for the periods presented herein are classified into four principal business segments: Otis, UTC Climate, Controls & Security, Pratt & Whitney, and UTC Aerospace Systems. Otis and UTC Climate, Controls & Security are referred to as the "commercial businesses," while Pratt & Whitney and UTC Aerospace Systems are referred to as the "aerospace businesses."

The current status of significant factors affecting our business environment in 2018 is discussed below. For additional discussion, refer to the "Business Overview" section in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2017 Annual Report, which is incorporated by reference in our 2017 Form 10-K.

### General

Our worldwide operations can be affected by industrial, economic and political factors on both a regional and global level. To limit the impact of any one industry, or the economy of any single country on our consolidated operating results, our strategy has been, and continues to be, the maintenance of a balanced and diversified portfolio of businesses. Our operations include original equipment manufacturing (OEM) and extensive related aftermarket parts and services in both our commercial and aerospace businesses. Our business mix also reflects the combination of shorter cycles at UTC Climate, Controls & Security and in our commercial aerospace spares businesses, and longer cycles at Otis and in our aerospace OEM and aftermarket maintenance businesses. Our customers are in the public and private sectors, and our businesses reflect an extensive geographic diversification that has evolved with continued globalization.

Our military businesses' sales are affected by U.S. Department of Defense budget and spending levels. Total sales to the U.S. Government were $1.8 billion and $1.4 billion for the quarters ended June 30, 2018 and 2017, 11% and 9% of total UTC sales for those periods, respectively. The defense portion of our aerospace business is affected by changes in market demand and the global political environment. Our participation in long-term production, development and sustainment programs for the U.S. Government has and is expected to contribute positively to our results in 2018.

### Acquisition Activity

Our growth strategy contemplates acquisitions. Our operations and results can be affected by the rate and extent to which appropriate acquisition opportunities are available, acquired businesses are effectively integrated, and anticipated synergies or cost savings are achieved. During the six months ended June 30, 2018, our investment in business acquisitions was $134 million, which primarily reflects an acquisition at Pratt & Whitney. On September 4, 2017, we announced that we had entered into a merger agreement with Rockwell Collins, under which we agreed to acquire Rockwell Collins. See Note 1: Acquisitions, Dispositions, Goodwill and Other Intangible Assets for additional discussion. We do not expect to have additional significant acquisition spend, other than the pending acquisition of Rockwell Collins. However, actual acquisition spending may vary depending upon the timing, availability and value of acquisition opportunities. To help manage the cash flow and liquidity resulting from the pending acquisition, we have suspended share repurchases, excluding activity relating to our equity award programs and employee savings plans.

### Other

Government legislation, policies and regulations can have a negative impact on our worldwide operations. Government regulation of refrigerants and energy efficiency standards, elevator safety codes and fire protection regulations are important to our commercial businesses. Government and market-driven safety and performance regulations, restrictions on aircraft engine noise and emissions, and government procurement practices can impact our aerospace and defense businesses.

Global economic and political conditions, changes in raw material and commodity prices, interest rates, foreign currency exchange rates, energy costs, levels of end market demand in construction, levels of air travel, the financial condition of commercial airlines, and the impact from natural disasters and weather conditions create uncertainties that could impact our earnings outlook for the remainder of 2018. See Part I, Item 1A, "Risk Factors" in our 2017 Form 10-K for further discussion.

### CRITICAL ACCOUNTING ESTIMATES

Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses. We believe the most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1 to the Consolidated Financial Statements in our 2017 Annual Report, incorporated by reference in our 2017 Form 10-K, describe the significant accounting estimates and policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ from management's estimates.

Effective January 1, 2018, we adopted ASU 2014-09 and its related amendments (collectively, the New Revenue Standard) and elected the modified retrospective approach.

**Revenue Recognition Accounting Policy Summary.** We account for revenue in accordance with Accounting Standards Codification (ASC) Topic 606: *Revenue from Contracts with Customers*. Under Topic 606, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Some of our contracts with customers contain a single performance obligation, while others contain multiple performance obligations most commonly when a contract spans multiple phases of the product life-cycle such as development, production, maintenance and support. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, we allocate the transaction price to each performance obligation based on its standalone selling price.

We consider the contractual consideration payable by the customer and assess variable consideration that may affect the total transaction price, including contractual discounts, contract incentive payments, estimates of award fees, and other sources of variable consideration, when determining the transaction price of each contract. We include variable consideration in the estimated transaction price when there is a basis to reasonably estimate the amount. These estimates are based on historical experience, anticipated performance and our best judgment at the time. We also consider whether our contracts provide customers with significant financing. Generally, our contracts do not contain significant financing.

*Point in time revenue recognition.* Timing of the satisfaction of performance obligations varies across our businesses due to our diverse product and service mix, customer base, and contractual terms. Performance obligations are satisfied as of a point in time for heating, ventilating, air-conditioning and refrigeration systems, certain alarm and fire detection and suppression systems, and certain aerospace components, engines, and spare parts. Revenue is recognized when control of the product transfers to the customer, generally upon product shipment.

*Over-time revenue recognition.* Performance obligations are satisfied over-time if the customer receives the benefits as we perform work, if the customer controls the asset as it is being produced, or if the product being produced for the customer has no alternative use and we have a contractual right to payment. Revenue is recognized for our construction-type and certain production-type contracts on an over-time basis. We recognize revenue on an over-time basis on certain long-term aerospace aftermarket contracts and aftermarket service work; development, fixed price, and other cost reimbursement contracts in our aerospace businesses; and elevator and escalator sales, installation, service, modernization and other construction contracts in our commercial businesses. For construction and installation contracts within our commercial businesses and aerospace performance obligations satisfied over time, revenue is recognized using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which correspond with and best depict transfer of control to the customer. Contract costs include labor, materials, and subcontractors' costs, or other direct costs, and where applicable on government and commercial contracts, indirect costs.

For certain of our long-term aftermarket contracts, revenue is recognized over the contract period. In the commercial businesses, revenue is primarily recognized on a straight-line basis over the contract period. In the aerospace businesses, we generally account for such contracts as a series of daily obligations to stand ready to provide product maintenance and aftermarket services. Revenue is primarily recognized in proportion to cost as sufficient historical evidence indicates that the cost of performing services under the contract is incurred on an other than straight-line basis. Aerospace contract modifications are routine and contracts are often modified to account for changes in contract specifications or requirements. Contract modifications that are for goods or services that are not distinct are accounted for as part of the existing contract.

We incur costs for engineering and development of aerospace products directly related to existing or anticipated contracts with customers. Such costs generate or enhance our ability to satisfy our performance obligations under these contracts. We capitalize these costs as contract fulfillment costs to the extent the costs are recoverable from the associated contract margin and subsequently amortize the costs as the original equipment (OEM) products are delivered to the customer. In instances where intellectual property does not transfer to the customer, we defer the customer funding of OEM product engineering and development and recognize revenue when the OEM products are delivered to the customer. Costs to obtain contracts are not material.

Loss provisions on OEM contracts are recognized to the extent that estimated contract costs exceed the estimated consideration from the products contemplated under the contractual arrangement. For new commitments, we generally record loss provisions at the earlier of contract announcement or contract signing except for certain contracts under which losses are recorded upon receipt of the purchase order that obligates us to perform. For existing commitments, anticipated losses on contractual arrangements are recognized in the period in which losses become evident. Products contemplated under contractual arrangements include firm quantities of product sold under contract and, in the large commercial engine and wheels and brakes businesses, future highly probable sales of replacement parts required by regulation that are expected to be sold subsequently for incorporation into the original equipment. In the large commercial engine and wheels and brakes businesses, when the combined original equipment and aftermarket arrangement for each individual sales campaign are profitable, we record original equipment product losses, as applicable, at the time of delivery.

We review our cost estimates on significant contracts on a quarterly basis and for others, no less frequently than annually or when circumstances change and warrant a modification to a previous estimate. We record changes in contract estimates using the cumulative catch-up method.

Note 2 of the condensed consolidated financial statements contains further detail regarding the adoption of the New Revenue Standard and its impact on the statement of operations for the quarter and six months ended June 30, 2018 and the balance sheet as of June 30, 2018.

### RESULTS OF OPERATIONS

### Net Sales

*(dollars in millions)*

|  | Quarter Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Net Sales | $16,705 | $15,280 | $31,947 | $29,095 |

The factors contributing to the total percentage change year-over-year in total net sales for the quarter and six months ended June 30, 2018 are as follows:

|  | Quarter Ended June 30, 2018 | Six Months Ended June 30, 2018 |
| --- | ---: | ---: |
| Organic change | 6% | 6% |
| Foreign currency translation | 2% | 2% |
| Other | 1% | 2% |
| Total % change | 9% | 10% |

All four segments experienced organic sales growth for both the quarter and six months ended June 30, 2018. During the quarter ended June 30, 2018, Pratt & Whitney sales grew 12% organically, driven by higher commercial aftermarket sales, higher commercial OEM sales and higher military sales, partially offset by lower Pratt & Whitney Canada OEM sales. UTC Aerospace Systems grew 8% organically primarily driven by higher commercial aftermarket and military sales and higher commercial aerospace OEM sales. Organic sales growth of 4% at Climate, Controls & Security was driven by growth in residential HVAC, global commercial HVAC, and transport refrigeration. Otis sales grew 3% organically, reflecting higher service sales, driven by growth in North America and Asia, and higher new equipment sales. The increase in new equipment sales was driven by higher sales in Europe, partially offset by a decline in China.

During the six months ended June 30, 2018, Pratt & Whitney sales grew 11% organically, reflecting growth across all major businesses. UTC Aerospace Systems grew 7% organically, driven by higher commercial aftermarket and military sales. Organic sales growth of 5% at Climate, Controls & Security was driven by growth in residential HVAC, global commercial HVAC, and transport refrigeration. Otis sales grew 2% organically, reflecting higher service sales, driven by growth in North America and Asia. Otis new equipment sales were consistent with the prior year as growth in Europe was offset by a decline in China.

### Cost of Products and Services Sold

*(dollars in millions)*

|  | Quarter Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Total cost of products and services sold | $12,422 | $11,164 | $23,702 | $21,300 |
| Percentage of net sales | 74.4% | 73.1% | 74.2% | 73.2% |

35

The factors contributing to the percentage change year-over-year for the quarter and six months ended June 30, 2018 in total cost of products and services sold are as follows:

|  | Quarter Ended June 30, 2018 | Six Months Ended June 30, 2018 |
| --- | ---: | ---: |
| Organic change | 7% | 6% |
| Foreign currency translation | 2% | 3% |
| Other | 2% | 2% |
| Total % change | 11% | 11% |

The organic increase in total cost of products and services sold for the quarter and six months ended June 30, 2018 was primarily driven by the organic sales increases noted above.

### Gross Margin

*(dollars in millions)*

|  | Quarter Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Gross margin | $4,283 | $4,116 | $8,245 | $7,795 |
| Percentage of net sales | 25.6% | 26.9% | 25.8% | 26.8% |

The decrease in gross margin as a percentage of sales for the quarter ended June 30, 2018 includes a 190 basis point decline in Pratt & Whitney's gross margin driven by higher negative engine margin in the large commercial engine business and adverse mix at Pratt & Whitney Canada and in the military business. Otis gross margin declined 190 basis points primarily driven by unfavorable pricing. Gross margin at UTC Climate, Controls & Security declined 10 basis points. These declines were offset by a 20 basis point improvement at UTC Aerospace Systems reflecting higher commercial aftermarket volumes and cost reduction.

The decrease in gross margin as a percentage of sales for the six months ended June 30, 2018 includes a 190 basis point decline in Pratt & Whitney's gross margin driven by higher negative engine margin in the large commercial engine business and adverse mix at Pratt & Whitney Canada and in the military business. Otis gross margin declined 150 basis points primarily driven by unfavorable pricing. Gross margin at UTC Climate, Controls & Security declined 10 basis points. These declines were offset by a 60 basis point improvement at UTC Aerospace Systems reflecting higher commercial aftermarket volumes and cost reduction.

### Research and Development

*(dollars in millions)*

|  | Quarter Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Company-funded | $589 | $619 | $1,143 | $1,205 |
| Percentage of net sales | 3.5% | 4.1% | 3.6% | 4.1% |
| Customer-funded | $365 | $395 | $688 | $735 |
| Percentage of net sales | 2.2% | 2.6% | 2.2% | 2.5% |

Research and development spending is subject to the variable nature of program development schedules and, therefore, year-over-year fluctuations in spending levels are expected. The majority of the company-funded spending is incurred by the aerospace businesses. The year-over-year decrease (5%) in company-funded research and development for the quarter ended June 30, 2018 was driven by declines at Pratt & Whitney (5%) and at UTC Aerospace Systems (3%) reflecting lower expenses across various commercial programs and the capitalization of certain development costs in accordance with the New Revenue Standard. These declines were partially offset by an increase at UTC Climate, Controls & Security (2%) to support the continued investment in new products. For the six months ended June 30, 2018 company-funded research and development declined 5%, driven by declines at Pratt & Whitney (4%) and at UTC Aerospace Systems (4%) reflecting lower expenses across various commercial programs and the capitalization of certain development costs in accordance with the New Revenue Standard. These declines were partially offset by an increase at UTC Climate, Controls & Security (2%) to support the continued investment in new products.

The decrease (8%) in customer-funded research and development for the quarter ended June 30, 2018 reflects a decline at UTC Aerospace Systems (10%) primarily driven by the deferral of certain development costs in accordance with the New Revenue Standard and lower expenses across various programs, partially offset by an increase at Pratt & Whitney (4%), primarily driven by higher research and development expenses on military development programs. The decline (6%) in customer-funded research and development for the six months ended June 30, 2018 reflects a decrease at UTC Aerospace Systems (7%), primarily driven by the deferral of certain development costs in accordance with the New Revenue Standard, partially offset by an increase at Pratt & Whitney (3%), primarily driven by higher research and development expenses on military development programs.

### Selling, General and Administrative

*(dollars in millions)*

|  | Quarter Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Selling, general and administrative expenses | $1,759 | $1,590 | $3,470 | $3,127 |
| Percentage of net sales | 10.5% | 10.4% | 10.9% | 10.7% |

Selling, general and administrative expenses increased 11% in the quarter ended June 30, 2018, including the impact of foreign exchange (2%) and transaction costs related to the pending acquisition of Rockwell Collins (1%). The growth in Selling, general and administrative expenses also includes higher expenses at UTC Aerospace Systems (3%), reflecting increased headcount and employee compensation related expenses, higher expenses at UTC Climate, Controls & Security (1%), including the impact of costs associated with a product recall program, higher spending at Otis (1%) driven primarily by increased information technology costs, and an increase at Pratt & Whitney (1%) driven by increased headcount and employee compensation related expenses and costs to support higher volumes.

Selling, general and administrative expenses increased 11% in the six months ended June 30, 2018, including the impact of foreign exchange (3%) and transaction costs related to the pending acquisition of Rockwell Collins (1%). The growth in Selling, general and administrative expenses also includes higher expenses at UTC Aerospace Systems (2%), reflecting increased headcount and employee compensation related expenses, higher expenses at UTC Climate, Controls & Security (1%), including the impact of costs associated with a product recall program, higher spending at Otis (1%) driven by increased information technology costs and increased labor costs, and an increase at Pratt & Whitney (1%) driven by increased headcount and employee compensation related expenses and costs to support higher volumes.

We are continuously evaluating our cost structure and have implemented restructuring actions as a method of keeping our cost structure competitive. As appropriate, the amounts reflected above include the beneficial impact of restructuring actions on Selling, general and administrative expenses. See Note 8: Restructuring Costs and the Restructuring Costs section of Management's Discussion and Analysis of Financial Condition and Results of Operations for further discussion.

### Other Income, Net

*(dollars in millions)*

|  | Quarter Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Other income, net | $941 | $257 | $1,172 | $845 |

Other income, net includes equity earnings in unconsolidated entities, royalty income, foreign exchange gains and losses, as well as other ongoing and nonrecurring items. The year-over-year increase in Other income, net ($684 million, 266%) for the quarter ended June 30, 2018 primarily reflects the gain on the sale of Taylor Company ($795 million, 309%), partially offset by an impairment of assets related to a previously acquired UTC Aerospace Systems business (19%) and the absence of a prior year gain on the sale of an investment in a UTC Climate, Controls & Security joint venture (9%).

The year-over-year increase in Other income, net ($327 million, 39%) for the six months ended June 30, 2018 primarily reflects the gain on the sale of Taylor Company ($795 million, 94%), the year-over-year impact of favorable insurance settlements (3%) and a gain on a divestiture at Pratt & Whitney (2%), partially offset by the absence of a prior year gain from the sale of UTC Climate, Controls & Security's investments in Watsco, Inc (45%), an impairment of assets related to a previously acquired UTC Aerospace Systems business (6%) and the absence of a prior year gain on the sale of an investment in a UTC Climate, Controls & Security joint venture (3%).

### Interest Expense, Net

*(dollars in millions)*

|  | Quarter Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Interest expense | $258 | $251 | $514 | $487 |
| Interest income | (24) | (25) | (51) | (48) |
| Interest expense, net | $234 | $226 | $463 | $439 |
| Average interest expense rate | 3.5% | 3.6% | 3.5% | 3.6% |

Interest expense, net increased 4% and 5% for the quarter and six months ended June 30, 2018, respectively. The increase in interest expense reflects the impact of the May 4, 2017 issuance of notes representing $4 billion in aggregate principal and the May 18, 2018 issuance of Euro-denominated notes representing €2 billion in aggregate principal, partially offset by the favorable impact of the repayment at maturity of the following: 1.8% notes in June 2017 representing $1.5 billion in aggregate principal; the 6.8% notes in February 2018 representing $99 million of aggregate principal; the Euro-denominated floating rate notes in February 2018 representing €750 million in aggregate principal; and the 1.778% notes in May 2018 representing $1.1 billion of aggregate principal. The average maturity of our long-term debt at June 30, 2018 is approximately 11 years.

### Income Taxes

|  | Quarter Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Effective tax rate | 24.5% | 25.7% | 25.8% | 27.1% |

On December 22, 2017 Public Law 115-97 “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” was enacted. This law is commonly referred to as the Tax Cuts and Jobs Act of 2017 (TCJA). In accordance with Staff Accounting Bulletin 118 (SAB 118) issued on December 22, 2017, the U.S. income tax amounts recorded attributable to the TCJA’s deemed repatriation provision, the revaluation of U.S. deferred taxes and the tax consequences relating to states with current conformity to the Internal Revenue Code are provisional amounts. Due to the enactment date and tax complexities of the TCJA, the Company has not completed its accounting related to these items.

Prior to enactment of the TCJA, with few exceptions, U.S. income taxes had not been provided on undistributed earnings of UTC's international subsidiaries as the Company had intended to reinvest such earnings permanently outside the U.S. or to repatriate such earnings only when it was tax effective to do so. The Company continues to evaluate the impact of the TCJA on its existing accounting position related to the undistributed earnings. Due to the inherent complexities in determining any incremental U.S. Federal and State taxes and the non-U.S. taxes that may be due if all of these earnings were remitted to the U.S. and as provided for by SAB 118 this evaluation has not yet been completed and no provisional amount has been recorded in regard to the undistributed amounts. After completing its evaluation, the Company will accrue any additional taxes due on previously undistributed earnings to be distributed in the future.

The Company will continue to accumulate and refine the relevant data and computational elements needed to finalize its accounting for the effects of the TCJA by December 22, 2018.

The decrease in the effective tax rate for the quarter ended June 30, 2018 is primarily due to a reduction of the estimated full year forecasted effective tax rate as a result of the enactment of TCJA. This is partially offset by a decrease in tax benefits associated with equity compensation and the absence of incremental tax benefits related to a claim based on the outcome of a favorable Federal Court decision of another taxpayer reported in the quarter ended June 30, 2017.

The decrease in the effective tax rate for the six months ended June 30, 2018 and 2017 is primarily related to the tax benefits described above as well as impacts of the previous quarter TCJA provisional adjustment and absence of the gain on the sale of UTC Climate, Controls & Security's investments in Watsco, Inc. in the first quarter of 2017.

As shown in the table above, the effective tax rate for the six months ended June 30, 2018 is 25.8%; the effective income tax rate for the same period, excluding restructuring, non-operational nonrecurring items, is 24.4%. We estimate our full year 2018 annual effective income tax rate to be approximately 24.5%, excluding restructuring, non-operational nonrecurring items and adjustments related to the TCJA.

### Net Income Attributable to Common Shareowners

*(dollars in millions, except per share amounts)*

|  | Quarter Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Net income attributable to common shareowners | $2,048 | $1,439 | $3,345 | $2,825 |
| Diluted earnings per share from operations | $2.56 | $1.80 | $4.18 | $3.53 |

Net income attributable to common shareowners for the quarter ended June 30, 2018 includes restructuring charges, net of tax benefit, of $59 million as well as a net gain for significant non-operational and/or nonrecurring items, including the impact of taxes, of $531 million. The effect of restructuring charges and significant non-operational and/or nonrecurring items on diluted earnings per share for the quarter ended June 30, 2018 was a gain of $0.59 per share while the effect of foreign currency translation and Pratt &Whitney Canada hedging generated a favorable impact of $0.01 per diluted share.

Net income from continuing operations attributable to common shareowners for the quarter ended June 30, 2017 includes restructuring charges, net of tax benefit, of $40 million. The effect of restructuring charges on diluted earnings per share for the quarter ended June 30, 2017 was $0.05 per share while the effect of foreign currency translation and Pratt &Whitney Canada hedging generated a favorable impact of $0.03 per diluted share.

Net income attributable to common shareowners for the six months ended June 30, 2018 includes restructuring charges, net of tax benefit, of $111 million as well as a net gain for significant non-operational and/or nonrecurring items, including the impact of taxes, of $459 million. The effect of restructuring charges and nonrecurring items on diluted earnings per share for the six months ended June 30, 2018 was a gain of $0.44 per share while the effect of foreign currency translation and Pratt &Whitney Canada hedging generated a favorable impact of $0.06 per diluted share.

Net income from continuing operations attributable to common shareowners for the six months ended June 30, 2017 includes restructuring charges, net of tax benefit, of $74 million as well as the net favorable impact of significant non-operational and/or nonrecurring items, net of tax, of $238 million. The effect of restructuring charges and nonrecurring items on diluted earnings per share for the six months ended June 30, 2017 was $0.20 per share while the effect of foreign currency translation and Pratt &Whitney Canada hedging generated a favorable impact of $0.06 per diluted share.

### Restructuring Costs

*(dollars in millions)*

|  | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: |
| Restructuring costs | $149 | $112 |

Restructuring actions are an essential component of our operating margin improvement efforts and relate to existing and recently acquired operations. Charges generally arise from severance related to workforce reductions, facility exit and lease termination costs associated with the consolidation of field and manufacturing operations and costs to exit legacy programs. We expect restructuring costs in 2018 to be consistent with 2017, including trailing costs related to prior actions associated with our continuing cost reduction efforts and the integration of acquisitions. We continue to closely monitor the economic environment and may undertake further restructuring actions to keep our cost structure aligned with the demands of the prevailing market conditions.

**2018 Actions.** During the six months ended June 30, 2018, we recorded net pre-tax restructuring charges of $73 million relating to ongoing cost reduction actions initiated in 2018. We expect to incur additional restructuring charges of $62 million to complete these actions. We are targeting to complete in 2018 and 2019 the majority of the remaining workforce and facility related cost reduction actions initiated in 2018. We expect recurring pre-tax savings in continuing operations to increase to approximately $60 million annually over the two-year period subsequent to initiating the actions. Approximately 83% of the total expected pre-tax charges will require cash payments, which we have funded and expect to continue to fund with cash generated from operations. During the six months ended June 30, 2018, we had cash outflows of approximately $27 million related to the 2018 actions.

**2017 Actions.** During the six months ended June 30, 2018 and 2017, we recorded net pre-tax restructuring charges of $67 million and $63 million, respectively, for actions initiated in 2017. We expect to incur additional restructuring charges of $82 million to complete these actions. We are targeting to complete in 2018 the majority of the remaining workforce and facility related cost reduction actions initiated in 2017. We expect recurring pre-tax savings in continuing operations to increase over the two-year period subsequent to initiating the actions to approximately $211 million annually, of which, approximately $90 million was realized during the six months ended June 30, 2018. Approximately 87% of the total expected pre-tax charge will require cash payments, which we have and expect to continue to fund with cash generated from operations. During the six months ended June 30, 2018, we had cash outflows of approximately $63 million related to the 2017 actions.

In addition, during the six months ended June 30, 2018, we recorded net pre-tax restructuring costs totaling $9 million for restructuring actions initiated in 2016 and prior. For additional discussion of restructuring, see Note 8 to the Condensed Consolidated Financial Statements.

### Segment Review

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. Adjustments to reconcile segment reporting to the consolidated results for the quarter and six months ended June 30, 2018 and 2017 are included in "Eliminations and other", which also includes certain smaller subsidiaries. We attempt to quantify material cited factors within our discussion of the results of each segment whenever those factors are determinable. However, in some instances, the factors we cite within our segment discussion are based upon input measures or qualitative information that does not lend itself to quantification when discussed in the context of the financial results measured on an output basis and are not, therefore, quantified in the below discussions.

### Commercial Businesses

Our commercial businesses generally serve customers in the worldwide commercial and residential property industries, and UTC Climate, Controls & Security also serves customers in the commercial and transport refrigeration industries. Sales in the commercial businesses are influenced by a number of external factors, including fluctuations in residential and commercial construction activity, regulatory changes, interest rates, labor costs, foreign currency exchange rates, customer attrition, raw material and energy costs, credit markets and other global and political factors. UTC Climate, Controls & Security's financial performance can also be influenced by production and utilization of transport equipment and, in the case of its residential business, weather conditions. To ensure adequate supply of products in the distribution channel, UTC Climate, Controls & Security customarily offers its customers incentives to purchase products. The principal incentive program provides reimbursements to distributors for offering promotional pricing on UTC Climate, Controls & Security products. We account for incentive payments made as a reduction to sales.

At constant currency and excluding the effect of acquisitions and divestitures, UTC Climate, Controls & Security equipment orders in the quarter ended June 30, 2018 increased 8% in comparison to the same period of the prior year, driven by increases in transport refrigeration (27%), residential equipment (8%) and commercial HVAC (6%). At constant currency, and excluding the impact of the New Revenue Standard, Otis new equipment orders in the quarter increased 10% in comparison to the prior year, driven by increased orders in North America (17%), Asia, excluding China (14%), the Middle East (58%) and China (8%).

Summary performance for each of the commercial businesses for the quarters ended June 30, 2018 and 2017 was as follows:

*(dollars in millions)*

|  | Otis 2018 | 2017 | Change | UTC Climate, Controls & Security 2018 | 2017 | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net Sales | $3,344 | $3,131 | 7% | $5,035 | $4,712 | 7% |
| Cost of Sales | 2,389 | 2,177 | 10% | 3,521 | 3,289 | 7% |
|  | 955 | 954 | — | 1,514 | 1,423 | 6% |
| Operating Expenses and Other | 467 | 415 | 13% | (131) | 586 | (122)% |
| Operating Profits | $488 | $539 | (9)% | $1,645 | $837 | 97% |

Operating Profit Margins 14.6 % 17.2 % 32.7 % 17.8 %

Summary performance for each of the commercial businesses for the six months ended June 30, 2018 and 2017 was as follows:

*(dollars in millions)*

|  | Otis 2018 | 2017 | Change | UTC Climate, Controls & Security 2018 | 2017 | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net Sales | $6,381 | $5,935 | 8% | $9,411 | $8,604 | 9% |
| Cost of Sales | 4,523 | 4,118 | 10% | 6,625 | 6,051 | 9% |
|  | 1,858 | 1,817 | 2% | 2,786 | 2,553 | 9% |
| Operating Expenses and Other | 920 | 831 | 11% | 549 | 785 | (30)% |
| Operating Profits | $938 | $986 | (5)% | $2,237 | $1,768 | 27% |

Operating Profit Margins 14.7 % 16.6 % 23.8 % 20.5 %

### Otis –

### Quarter Ended June 30, 2018 Compared with Quarter Ended June 30, 2017

|  | Factors Contributing to Total % Change Organic / Operational | FX Translation | Acquisitions / Divestitures, net | Restructuring Costs | Other |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net Sales | 3% | 4% | — | — | — |
| Cost of Sales | 4% | 4% | — | — | 2% |
| Operating Profits | (8)% | 4% | — | (2)% | (3)% |

The organic sales increase of 3% reflects higher service sales (2%), primarily driven by growth in North America and Asia, and higher new equipment sales (1%) driven by higher sales in Europe (2%), partially offset by a decline in China (1%).

The operational profit decrease of 8% was driven by:

- unfavorable price and mix (6%), primarily driven by China
- unfavorable commodities impact (2%)
- higher selling, general and administrative expenses and research and development costs (2%)
- unfavorable transactional foreign exchange gains from mark-to-market adjustments and embedded foreign currency derivatives within certain new equipment contracts (1%)

These decreases were partially offset by:

- profit contribution from the higher sales volumes noted above (5%)

The 3% decrease in "Other" primarily represents the unfavorable impact of legal matters.

### Six Months Ended June 30, 2018 Compared with Six Months Ended June 30, 2017

|  | Factors Contributing to Total % Change Organic / Operational | FX Translation | Acquisitions / Divestitures, net | Restructuring Costs | Other |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net Sales | 2% | 5% | — | — | 1% |
| Cost of Sales | 3% | 5% | — | — | 2% |
| Operating Profits | (5)% | 5% | — | (3)% | (2)% |

The organic sales increase of 2% reflects higher service sales (2%), primarily driven by growth in North America and Asia. New equipment sales were consistent with the prior year as growth in Europe (1%) was offset by a decline in China (1%).

The operational profit decrease of 5% was driven by:

- unfavorable price and mix (9%), primarily driven by China
- unfavorable commodities impact (2%)
- higher selling, general and administrative expenses (2%)

These decreases were partially offset by:

- profit contribution from the higher sales volumes noted above (6%)
- favorable productivity (1%)
- favorable transactional foreign exchange gains from mark-to-market adjustments and embedded foreign currency derivatives within certain new equipment contracts (1%)

The 2% decrease in "Other" primarily represents the unfavorable impact of legal matters.

### UTC Climate, Controls & Security –

### Quarter Ended June 30, 2018 Compared with Quarter Ended June 30, 2017

|  | Factors Contributing to Total % Change Organic / Operational | FX Translation | Acquisitions / Divestitures, net | Restructuring Costs | Other |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net Sales | 4% | 3% | — | — | — |
| Cost of Sales | 4% | 3% | — | — | — |
| Operating Profits | 5% | 1% | — | — | 91% |

The organic sales increase of 4% was primarily driven by growth in residential HVAC (1%), global commercial HVAC (1%), and transport refrigeration (1%) primarily driven by strong performance in the container division.

The operational profit increase of 5% was driven by:

- profit contribution from the higher sales volumes noted above, net of unfavorable mix (4%)
- the year-over-year impact of a prior year unfavorable contract adjustment related to a large commercial project (5%)

These increases were partially offset by:

- higher logistics costs (2%)
- higher research and development costs (1%)

The 91% increase in “Other” primarily reflects a gain on the sale of Taylor Company.

### Six Months Ended June 30, 2018 Compared with Six Months Ended June 30, 2017

|  | Factors Contributing to Total % Change Organic / Operational | FX Translation | Acquisitions / Divestitures, net | Restructuring Costs | Other |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net Sales | 5% | 4% | — | — | — |
| Cost of Sales | 5% | 4% | — | — | — |
| Operating Profits | 5% | 2% | — | 1% | 19% |

The organic sales increase of 5% was driven by growth in residential HVAC (1%), global commercial HVAC (1%), and transport refrigeration (2%) primarily driven by strong performance in the container division.

The operational profit increase of 5% was driven by:

- profit contribution from the higher sales volumes noted above, net of unfavorable mix (5%)
- the year-over-year impact of a prior year unfavorable contract adjustment related to a large commercial project (4%)

These increases were partially offset by:

- increased logistics costs (1%)
- higher commodity cost, net of price (1%)
- higher research and development costs (1%)

The 19% increase in “Other” reflects a gain on the sale of Taylor Company (45%), partially offset by the absence of gains on the sale of investments in the prior year (23%), primarily Watsco, Inc., and the 2018 impact of period costs associated with a product recall program (1%).

### Aerospace Businesses

The aerospace businesses serve both commercial and government aerospace customers. Revenue passenger miles (RPMs), U.S. Government military and space spending, and the general economic health of airline carriers are all barometers for our aerospace businesses. Performance in the general aviation sector is closely tied to the overall health of the economy and is positively correlated to corporate profits.

We continue to see growth in a strong commercial airline industry which is benefiting from traffic growth, lower airfares, and stronger economic conditions. Airline traffic, as measured by RPMs, grew approximately 7% in the first five months of 2018.

Our commercial aftermarket businesses continue to evolve as an increasing proportion of our aerospace businesses' customers are covered under Fleet Management Programs (FMPs) at Pratt & Whitney and long-term aftermarket service agreements at UTC Aerospace Systems. FMPs are comprehensive long-term spare part and service agreements with our customers. We expect a continued shift to FMPs and long-term aftermarket service agreements in lieu of transactional spare part sales as new aerospace product offerings enter our customers' fleets under long-term service agreements and legacy fleets are retired. For the first six months of 2018, as compared with 2017, total commercial aerospace aftermarket sales increased 15% at Pratt & Whitney and 14% at UTC Aerospace Systems.

Operating profit in the quarter and six months ended June 30, 2018 included significant net unfavorable changes in aerospace contract estimates totaling $41 million and $82 million, respectively, primarily reflecting unfavorable net contract adjustments recorded at Pratt & Whitney. Operating profit in the quarter ended June 30, 2017 included significant changes in aerospace contract estimates totaling $1 million, as favorable net contract adjustments recorded at UTC Aerospace Systems, were largely offset by unfavorable net contract adjustments recorded at Pratt & Whitney. Operating profit in the six months ended June 30, 2017 included significant net unfavorable changes in aerospace contract estimates of $29 million, primarily representing unfavorable contract adjustments recorded at Pratt & Whitney.

As previously disclosed, Pratt & Whitney's PurePower PW1500G engine models have been selected to power the Airbus A220 passenger aircraft (formerly Bombardier CSeries) which entered into service on July 15, 2016. There have been multi-year delays in the development of the aircraft. Notwithstanding these delays, Bombardier reports that they have received over 300 orders for the aircraft and that both the A220-100 and A220-300 aircraft models have been certified and have entered into revenue service. We have made various investments in support of the production and delivery of our PW1500G engines and systems for the A220 program, which we currently expect to recover through future deliveries of PW1500G powered A220 aircraft. On October 16, 2017, Bombardier and Airbus announced an agreement to become partners on the CSeries aircraft program. On July 1, 2018 the transaction was completed with Airbus acquiring a majority stake in the partnership. We will continue to monitor the progress of the program and our ability to recover our investments, which we believe is strengthened by this partnership.

Summary performance for each of the aerospace businesses for the quarters ended June 30, 2018 and 2017 was as follows:

*(dollars in millions)*

|  | Pratt & Whitney 2018 | 2017 | Change | UTC Aerospace Systems 2018 | 2017 | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net Sales | $4,736 | $4,070 | 16% | $3,962 | $3,640 | 9% |
| Cost of Sales | 3,893 | 3,267 | 19% | 2,922 | 2,690 | 9% |
|  | 843 | 803 | 5% | 1,040 | 950 | 9% |
| Operating Expenses and Other | 446 | 439 | 2% | 471 | 416 | 13% |
| Operating Profits | $397 | $364 | 9% | $569 | $534 | 7% |

Operating Profit Margins 8.4 % 8.9 % 14.4 % 14.7 %

Summary performance for each of the aerospace businesses for the six months ended June 30, 2018 and 2017 was as follows:

*(dollars in millions)*

|  | Pratt & Whitney 2018 | 2017 | Change | UTC Aerospace Systems 2018 | 2017 | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net Sales | $9,065 | $7,828 | 16% | $7,779 | $7,251 | 7% |
| Cost of Sales | 7,414 | 6,253 | 19% | 5,705 | 5,357 | 6% |
|  | 1,651 | 1,575 | 5% | 2,074 | 1,894 | 10% |
| Operating Expenses and Other | 841 | 855 | (2)% | 917 | 829 | 11% |
| Operating Profits | $810 | $720 | 13% | $1,157 | $1,065 | 9% |

Operating Profit Margins 8.9 % 9.2 % 14.9 % 14.7 %

### Pratt & Whitney –

### Quarter Ended June 30, 2018 Compared with Quarter Ended June 30, 2017

|  | Factors Contributing to Total % Change Organic / Operational | FX Translation\* | Acquisitions / Divestitures, net | Restructuring Costs | Other |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net Sales | 12% | — | — | — | 4% |
| Cost of Sales | 12% | 1% | — | — | 6% |
| Operating Profits | 21% | (1)% | — | 1% | (12)% |

\* *For Pratt & Whitney only, the transactional impact of foreign exchange hedging at Pratt & Whitney Canada has been netted against the translational foreign exchange impact for presentation purposes in the table above. For all other segments these foreign exchange transactional impacts are included within the organic/operational caption in their respective tables. Due to its significance to Pratt & Whitney's overall operating results, we believe it is useful to segregate the foreign exchange transactional impact in order to clearly identify the underlying financial performance.*

The organic sales increase of 12% primarily reflects higher commercial aftermarket sales (6%), increased commercial OEM sales (3%) and higher military sales (3%). The 4% increase in "Other" reflects the sales impact of adopting the New Revenue Standard.

The operational profit increase of 21% was primarily driven by:

- higher commercial aftermarket profit contribution (27%), driven by the sales increase noted above

This increase was partially offset by:

- lower military profit contribution (3%), driven by adverse mix
- lower commercial OEM profit contribution (1%), primarily driven by adverse mix at Pratt & Whitney Canada and higher negative engine margin
- higher selling, general and administrative expenses and other ramp-related costs (2%)

The 12% decrease in "Other" primarily reflects the operating profit impact of adopting the New Revenue Standard (7%) and the absence of prior year licensing income (5%).

### Six Months Ended June 30, 2018 Compared with Six Months Ended June 30, 2017

|  | Factors Contributing to Total % Change Organic / Operational | FX Translation\* | Acquisitions / Divestitures, net | Restructuring Costs | Other |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net Sales | 11% | — | — | — | 5% |
| Cost of Sales | 12% | 1% | — | — | 6% |
| Operating Profits | 13% | 2% | — | — | (2)% |

The organic sales increase of 11% primarily reflects higher commercial aftermarket sales (7%), increased commercial OEM sales (2%), and higher military sales (3%). The 5% increase in "Other" reflects the sales impact of adopting the New Revenue Standard.

The operational profit increase of 13% was primarily driven by:

- higher commercial aftermarket profit contribution (21%), driven by the sales increase noted above
- higher military profit contribution (3%), driven by the sales increase noted above

These increases were partially offset by:

- lower commercial OEM profit contribution (11%), primarily driven by higher negative engine margin and customer support costs

The 2% decrease in "Other" primarily reflects the absence of prior year licensing income (3%), and the operating profit impact of adopting the New Revenue Standard (2%), partially offset by a gain on a divestiture (3%).

### UTC Aerospace Systems –

### Quarter Ended June 30, 2018 Compared with Quarter Ended June 30, 2017

|  | Factors Contributing to Total % Change Organic / Operational | FX Translation | Acquisitions / Divestitures, net | Restructuring Costs | Other |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net Sales | 8% | 1% | — | — | — |
| Cost of Sales | 7% | 1% | — | 1% | — |
| Operating Profits | 17% | (2)% | — | (2)% | (6)% |

The organic sales increase of 8% primarily reflects higher commercial aftermarket and military sales (combined, 5%) and higher commercial aerospace OEM sales (4%).

The operational profit increase of 17% primarily reflects:

- higher commercial aftermarket and military profit contribution driven by the sales growth noted above (combined, 16%)
- higher commercial OEM profit contribution driven by the sales growth noted above (10%)

These increases were partially offset by:

- higher selling, general and administrative expenses (8%)

The 6% decrease in "Other" primarily reflects an impairment of assets related to a previously acquired business.

### Six Months Ended June 30, 2018 Compared with Six Months Ended June 30, 2017

|  | Factors Contributing to Total % Change Organic / Operational | FX Translation | Acquisitions / Divestitures, net | Restructuring Costs | Other |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net Sales | 7% | 1% | — | — | (1)% |
| Cost of Sales | 5% | 1% | — | — | — |
| Operating Profits | 16% | (3)% | — | (1)% | (3)% |

The organic sales increase of 7% primarily reflects higher commercial aftermarket and military sales (combined, 6%).

The operational profit increase of 16% primarily reflects:

- higher commercial aftermarket and military profit contribution driven by the sales growth noted above (combined, 23%)

These increases were partially offset by:

- higher selling, general and administrative expenses (7%)

The 3% decrease in "Other" primarily reflects an impairment of assets related to a previously acquired business.

### Eliminations and other –

*(dollars in millions)*

|  | Net Sales Quarter Ended June 30, 2018 | 2017 | Operating Profits Quarter Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Eliminations and other | $(372) | $(273) | $(97) | $(5) |
| General corporate expenses | — | — | (126) | (105) |

*(dollars in millions)*

|  | Net Sales Six Months Ended June 30, 2018 | 2017 | Operating Profits Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Eliminations and other | $(689) | $(523) | $(108) | $(23) |
| General corporate expenses | — | — | (230) | (208) |

Eliminations and other reflects the elimination of sales, other income and operating profit transacted between segments, as well as the operating results of certain smaller businesses. The year-over-year increase in sales eliminations for the quarter and six months ended June 30, 2018, as compared to the same periods of 2017, reflects an increase in the amount of inter-segment eliminations, principally between our aerospace businesses. The decrease in operating profits for the quarter ended June 30, 2018, is driven by higher inter-segment profit eliminations resulting from increased inter-segment activity amongst our aerospace businesses, transaction costs related to the pending acquisition of Rockwell Collins, and lower year-over-year gains on sales of securities. The decrease in operating profits for the six months ended June 30, 2018, is primarily driven by higher inter-segment profit eliminations resulting from increased inter-segment activity amongst our aerospace businesses, and transaction costs related to the pending acquisition of Rockwell Collins.

### LIQUIDITY AND FINANCIAL CONDITION

*(dollars in millions)*

|  | June 30, 2018 | December 31, 2017 | June 30, 2017 |
| --- | ---: | ---: | ---: |
| Cash and cash equivalents | $11,068 | $8,985 | $9,345 |
| Total debt | 28,309 | 27,485 | 26,626 |
| Net debt (total debt less cash and cash equivalents) | 17,241 | 18,500 | 17,281 |
| Total equity | 33,346 | 31,421 | 30,155 |
| Total capitalization (total debt plus total equity) | 61,655 | 58,906 | 56,781 |
| Net capitalization (total debt plus total equity less cash and cash equivalents) | 50,587 | 49,921 | 47,436 |

46

|  |  |  |  |
| --- | ---: | ---: | ---: |
| Total debt to total capitalization | 46% | 47% | 47% |
| Net debt to net capitalization | 34% | 37% | 36% |

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. Our principal source of liquidity is operating cash flows from continuing operations. For 2018, we expect cash flows from continuing operations, net of capital expenditures, to approximate $4.5 billion to $5.0 billion. In addition to operating cash flows, other significant factors that affect our overall management of liquidity include: capital expenditures, customer financing requirements, investments in businesses, dividends, common stock repurchases, pension funding, access to the commercial paper markets, adequacy of available bank lines of credit, redemptions of debt, and the ability to attract long-term capital at satisfactory terms.

At June 30, 2018, we had cash and cash equivalents of $11,068 million, of which approximately 36% was held by UTC's foreign subsidiaries. We manage our worldwide cash requirements by reviewing available funds among the many subsidiaries through which we conduct our business and the cost effectiveness with which those funds can be accessed. As previously discussed, on December 22, 2017, the TCJA was enacted. Prior to enactment of the TCJA, with few exceptions, U.S. income taxes had not been provided on undistributed earnings of UTC's international subsidiaries as the Company had intended to reinvest such earnings permanently outside the U.S. or to repatriate such earnings only when it was tax effective to do so. The Company continues to evaluate the impact of the TCJA on its existing accounting position related to the undistributed earnings. Due to the inherent complexities in determining any incremental U.S. Federal and State taxes and the non-U.S. taxes that may be due if all of these earnings were remitted to the U.S., and in accordance with SAB 118, this evaluation has not been completed and no provisional amount has been recorded in regard to the undistributed amounts. After completing its evaluation, the Company will accrue any additional taxes due on previously undistributed earnings to be distributed in the future.

On occasion, we are required to maintain cash deposits with certain banks with respect to contractual obligations related to acquisitions or divestitures or other legal obligations. As of June 30, 2018 and December 31, 2017, the amount of such restricted cash was approximately $38 million and $33 million, respectively.

Historically, our strong debt ratings and financial position have enabled us to issue long-term debt at favorable market rates. Our ability to obtain debt financing at comparable risk-based interest rates is partly a function of our existing debt-to-total-capitalization level as well as our credit standing. Our debt-to-total-capitalization of 46% at June 30, 2018, remained relatively consistent with the prior year. We use our commercial paper borrowings for general corporate purposes, including the funding of potential acquisitions, pension contributions, debt refinancing, dividend payments and repurchases of our common stock. The need for commercial paper borrowing arises when the use of domestic cash for general corporate purposes exceeds the sum of domestic cash generation and foreign cash repatriated to the U.S.

At June 30, 2018, we had revolving credit agreements with various banks permitting aggregate borrowings of up to $4.35 billion pursuant to a $2.20 billion revolving credit agreement and a $2.15 billion multicurrency revolving credit agreement, both of which expire in August 2021. As of June 30, 2018, there were no borrowings under these revolving credit agreements. The undrawn portions of these revolving credit agreements are also available to serve as backup facilities for the issuance of commercial paper. As of June 30, 2018, our maximum commercial paper borrowing limit was $4.35 billion.

Commercial paper borrowings at June 30, 2018 include approximately €750 million ($876 million) of euro-denominated commercial paper.

On May 18, 2018, we issued €750 million aggregate principal amount of 1.150% senior notes due 2024, €500 million aggregate principal amount of 2.150% senior notes due 2030 and €750 million aggregate principal amount of senior floating rate notes due 2020. The net proceeds received from these debt issuances were used for general corporate purposes.

On May 4, 2018, we repaid at maturity approximately $1.1 billion aggregate principal amount of 1.778% junior subordinated notes.

On February 1, 2018, we repaid at maturity the $99 million 6.80% notes due in 2018 and on February 22, 2018, we repaid at maturity the €750 million EURIBOR plus 0.80% floating rate notes due in 2018.

On November 13, 2017, we issued €750 million aggregate principal amount of floating rate notes due 2019. The net proceeds from this debt issuance were used to fund the repayment of commercial paper and for other general corporate purposes.

On May 4, 2017, we issued $1.0 billion aggregate principal amount of 1.900% notes due 2020, $500 million aggregate principal amount of 2.300% notes due 2022, $800 million aggregate principal amount of 2.800% notes due 2024, $1.1 billion aggregate principal amount of 3.125% notes due 2027 and $600 million aggregate principal amount of 4.050% notes due 2047. The net proceeds received from these debt issuances were used to fund the repayment at maturity of our 1.800% notes due 2017, representing $1.5 billion in aggregate principal and other general corporate purposes.

Within the Business Overview of Management's Discussion and Analysis, we have described the pending acquisition of Rockwell Collins. The purchase consideration will be a combination of UTC shares and cash. We anticipate that approximately $15 billion will be required to pay the aggregate cash portion of the Merger Consideration. We expect to fund the cash portion of the Merger Consideration through debt issuances and cash on hand. Additionally, we have entered into a $6.5 billion 364-day unsecured bridge loan credit agreement that would be funded only to the extent certain anticipated debt issuances are not completed prior to the completion of the merger. We expect to assume approximately $7 billion of Rockwell Collins’ outstanding debt. To help manage the cash flow and liquidity impact resulting from the pending acquisition, we have suspended share repurchases, excluding activity relating to our equity award programs and employee savings plans. As we continue to assess the impacts of the TCJA, future opportunities for repatriation of our non-U.S. earnings, and accelerated de-leveraging, we may consider, in addition to investments in our operations, limited additional share repurchases to offset the effects of dilution related to our stock-based compensation programs. We have repatriated $5.1 billion of overseas cash for the six months ended June 30, 2018. Available cash on hand will be used to reduce the debt funding requirements for the transaction.

We believe our future operating cash flows will be sufficient to meet our future operating cash needs. Further, we continue to have access to the commercial paper markets and our existing credit facilities, and our ability to obtain debt or equity financing, as well as the availability under committed credit lines, provides additional potential sources of liquidity should they be required or appropriate.

### Cash Flow - Operating Activities

*(dollars in millions)*

|  | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: |
| Net cash flows provided by operating activities | $2,555 | $3,139 |

Cash generated from operating activities in the six months ended June 30, 2018 was $584 million lower than the same period in 2017. Cash outflows for working capital improved $65 million in the six months ended June 30, 2018 over the prior period. Factoring activity provided an increase in cash generated from operating activities of approximately $350 million in the six months ended June 30, 2018, as compared to the prior year. This increase in factoring was driven largely by Pratt & Whitney's temporary extension of contractual payment terms with certain commercial aerospace customers. This increase does not reflect the factoring of certain aerospace receivables performed at customer request for which we are compensated by the customer for the extended payment cycle.

In the six months ended June 30, 2018, cash outflows from working capital were $489 million, excluding the adoption impact of the New Revenue Standard. Accounts receivables increased from an increase in sales volume driven by UTC Climate, Controls & Security Residential & Commercial HVAC businesses, UTC Aerospace Systems and Pratt & Whitney. Contract assets increased due to costs in excess of billings primarily at Pratt & Whitney driven by military engines, at Otis due to progression on major projects, and at UTC Climate, Controls & Security in Commercial HVAC. Inventory increased in the quarter primarily driven by UTC Climate, Controls & Security seasonal build and an increase in production work in process for the Geared Turbo Fan at Pratt & Whitney. These increases were partially offset by increases in accounts payable and accrued liabilities, driven by the higher inventory purchasing activity and customer advances at Pratt & Whitney as well as an increase in current contract liabilities driven by seasonal advanced billings and progress payments on major contracts at Otis and the timing of billings on aftermarket contracts at Pratt & Whitney.

In the six months ended June 30, 2017, cash outflows from working capital were $554 million. Inventories increased approximately $1.1 billion, primarily in our aerospace businesses supporting an increase in forecasted OEM deliveries and related aftermarket demand, and in our commercial businesses primarily driven by seasonal demand in our North American HVAC business and installation projects in process in our refrigeration businesses. These increases were largely offset by increases in accounts payable and accrued liabilities, primarily at Pratt & Whitney, with other increases at UTC Climate, Controls & Security attributable to higher seasonal demand in our North American HVAC business. Accounts receivable increased primarily in our aerospace businesses, and were partially offset by increased customer advances at Pratt & Whitney and Otis. Factoring activity provided an increase of approximately $400 million in cash generated from operating activities of continuing operations in the six months ended June 30, 2017, as compared to the prior year period. This increase in factoring was driven largely by Pratt & Whitney's temporary extension of contractual payment terms with certain commercial aerospace customers.

The funded status of our defined benefit pension plans is dependent upon many factors, including returns on invested assets, the level of market interest rates and actuarial mortality assumptions. We can contribute cash or UTC shares to our plans at our discretion, subject to applicable regulations. Total cash contributions to our global defined benefit pension plans during the six months ended June 30, 2018 and 2017 were approximately $59 million and $79 million, respectively. Although our domestic pension plans are approximately 103% funded on a projected benefit obligation basis as of June 30, 2018, and we are not required to make additional contributions through the end of 2028, we may elect to make discretionary contributions in 2018. We expect to make total contributions of approximately $100 million to our global defined benefit pension plans in 2018. Contributions to our global defined benefit pension plans in 2018 are expected to meet or exceed the current funding requirements.

### Cash Flow - Investing Activities

*(dollars in millions)*

|  | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: |
| Net cash flows used in investing activities | $(238) | $(990) |

Cash flows used in investing activities of continuing operations for the six months ended June 30, 2018 and 2017 primarily reflect capital expenditures, cash investments in customer financing assets, investments/dispositions of businesses, payments related to our collaboration intangible assets and contractual rights to provide product on new aircraft platforms, and settlements of derivative contracts. The $752 million decrease in cash flows used in investing activities in the six months ended June 30, 2018 compared to June 30, 2017 primarily relates to the $1 billion in proceeds from the sale of Taylor Company in June 2018 by UTC Climate, Controls & Security, $376 million in receipts from settlements of derivative contracts, partially offset by the absence of $596 million in net proceeds received from UTC Climate, Controls & Security's sale of investments in Watsco, Inc. in the quarter ended March 31, 2017.

Capital expenditures for the six months ended June 30, 2018 ($709 million) primarily relate to investments in production capacity at Pratt & Whitney, several small projects at UTC Aerospace Systems, and new facilities at UTC Climate, Controls & Security.

Cash investments in businesses in the six months ended June 30, 2018 ($134 million) primarily consisted of an acquisition at Pratt & Whitney. We do not expect to have additional significant acquisition spend, other than the pending acquisition of Rockwell Collins. However, actual acquisition spending may vary depending upon the timing, availability and appropriate value of acquisition opportunities. Dispositions of businesses in the six months ended June 30, 2018 of $1.1 billion primarily relate to the sale of Taylor Company.

Customer financing activities in the six months ended June 30, 2018 were a net use of cash of $344 million, primarily driven by additional Geared Turbofan engines to support customer fleets. While we expect that 2018 customer financing activity will be a net use of funds, actual funding is subject to usage under existing customer financing commitments during the remainder of the year. We may also arrange for third-party investors to assume a portion of our commitments. We had commercial aerospace financing and other contractual commitments of approximately $15.2 billion at June 30, 2018 related to commercial aircraft and certain contractual rights to provide product on new aircraft platforms, of which up to $0.6 billion may be required to be disbursed during the remainder of 2018. We had commercial aerospace financing and other contractual commitments of approximately $15.3 billion at December 31, 2017.

During the six months ended June 30, 2018, our collaboration intangible assets increased by approximately $181 million, which primarily relates to payments made under our 2012 agreement to acquire Rolls-Royce's collaboration interest in IAE.

As discussed in Note 9 to the Condensed Consolidated Financial Statements, we enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments under the Derivatives and Hedging Topic of the FASB 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. The settlement of these derivative instruments resulted in a net cash inflow of approximately $82 million during the six months ended June 30, 2018 and a net cash outflow of $294 million during the six months ended June 30, 2017.

### Cash Flow - Financing Activities

*(dollars in millions)*

|  | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: |
| Net cash flows used in financing activities | $(211) | $(52) |

49

Our financing activities primarily include the issuance and repayment of short term and long term debt, payment of dividends and stock repurchases. Net cash used in financing activities decreased $159 million in the six months ended June 30, 2018 compared to the six months ended June 30, 2017 primarily due to a reduction in debt issuances of $1.6 billion and an increase in debt repayments of $481 million, partially offset by an increase in short-term borrowings of $610 million and a reduction in common stock repurchase of $1.3 billion.

Commercial paper borrowings and revolving credit facilities provide short-term liquidity to supplement operating cash flows and are used for general corporate purposes, including the funding of potential acquisitions and repurchases of our stock. We had approximately $0.9 billion of outstanding commercial paper at June 30, 2018.

At June 30, 2018, management had remaining authority to repurchase approximately $2.2 billion of our common stock under the October 14, 2015 share repurchase program. Under this program, shares may be purchased on the open market, in privately negotiated transactions, under accelerated share repurchase programs, and under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. We may also reacquire shares outside of the program from time to time in connection with the surrender of shares to cover taxes on vesting of restricted stock and as required under our employee savings plan. We made cash payments of approximately $52 million to repurchase approximately 402 thousand shares of our common stock during the six months ended June 30, 2018. In connection with the merger agreement with Rockwell Collins announced on September 4, 2017, we have suspended share repurchases, excluding activity required under our equity award programs and employee savings plans. As we continue to assess the impacts of the TCJA, future opportunities for repatriation of our non-U.S. earnings, and accelerated de-leveraging, we may consider, in addition to investments in our operations, limited additional share repurchases to offset the effects of dilution related to our stock-based compensation programs.

We paid dividends on common stock of $0.70 per share in both the first quarter and second quarter of 2018, totaling approximately $1,070 million in the aggregate for the six months ended June 30, 2018. On June 13, 2018, the Board of Directors declared a dividend of $0.70 per share payable September 10, 2018 to shareowners of record at the close of business on August 17, 2018.

We have an existing universal shelf registration statement filed with the SEC for an indeterminate amount of debt and equity securities for future issuance, subject to our internal limitations on the amount of debt to be issued under this shelf registration statement.

### Off-Balance Sheet Arrangements and Contractual Obligations

In our 2017 Annual Report, incorporated by reference in our 2017 Form 10-K, we disclosed our off-balance sheet arrangements and contractual obligations. As of June 30, 2018, there have been no material changes to these off-balance sheet arrangements and contractual obligations outside the ordinary course of business.

## Market risk

As filed, 279 characters.

There has been no significant change in our exposure to market risk during the six months ended June 30, 2018. For discussion of our exposure to market risk, refer to Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," contained in our 2017 Form 10-K.

## Controls and procedures

As filed, 9,917 characters.

As required by Rule 13a-15 under the Exchange Act, we carried out an evaluation under the supervision and with the participation of our management, including the Chairman, President and Chief Executive Officer (CEO), the Executive Vice President & Chief Financial Officer (CFO) and the Corporate Vice President, Controller (Controller), of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2018. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our CEO, our CFO and our Controller have concluded that, as of June 30, 2018, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our CEO, our CFO and our Controller, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting during the six months ended June 30, 2018, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

### Cautionary Note Concerning Factors That May Affect Future Results

This Form 10-Q contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward-looking statements may also be included in other information released to the public. These forward-looking statements are intended to provide management’s current expectations or plans for our future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook", "confident" and other words of similar meaning in connection with a discussion of future operating or financial performance. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, share repurchases, tax rates and other measures of financial performance or potential future plans, strategies or transactions of United Technologies or the combined company following United Technologies’ pending acquisition of Rockwell Collins, the anticipated benefits of the pending acquisition, including estimated synergies, the expected timing of financing and completion of the transaction and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and other factors include, without limitation:

- the effect of economic conditions in the industries and markets in which we and Rockwell Collins operate in the U.S. and globally and any changes therein, including financial market conditions, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand in construction and in both the commercial and defense segments of the aerospace industry, levels of air travel, financial condition of commercial airlines, the impact of weather conditions and natural disasters and the financial condition of our customers and suppliers;
- challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services;
- the scope, nature, impact or timing of the pending Rockwell Collins acquisition and other acquisition and divestiture or restructuring activity, including among other things integration of acquired businesses into UTC's existing businesses and realization of synergies and opportunities for growth and innovation;
- future timing and levels of indebtedness, including indebtedness expected to be incurred by UTC in connection with the pending Rockwell Collins acquisition, and capital spending and research and development spending, including in connection with the pending Rockwell Collins acquisition;
- future availability of credit and factors that may affect such availability, including credit market conditions and our capital structure;
- the timing and scope of future repurchases of our common stock, which may be suspended at any time due to various factors, including market conditions and the level of other investing activities and uses of cash, including in connection with the pending acquisition of Rockwell Collins;
- delays and disruption in delivery of materials and services from suppliers;
- company and customer-directed cost reduction efforts and restructuring costs and savings and other consequences thereof;
- new business and investment opportunities;
- our ability to realize the intended benefits of organizational changes;
- the anticipated benefits of diversification and balance of operations across product lines, regions and industries;
- the outcome of legal proceedings, investigations and other contingencies;
- pension plan assumptions and future contributions;
- the impact of the negotiation of collective bargaining agreements and labor disputes;
- the effect of changes in political conditions in the U.S. and other countries in which we and Rockwell Collins operate, including the effect of changes in U.S. trade policies or the U.K.'s pending withdrawal from the EU, on general market conditions, global trade policies and currency exchange rates in the near term and beyond; and
- the effect of changes in tax (including the U.S. tax reform enacted on December 22, 2017, which is commonly referred to as the Tax Cuts and Jobs Act of 2017), environmental, regulatory (including among other things import/export) and other laws and regulations in the U.S. and other countries in which we and Rockwell Collins operate;
- the ability of UTC and Rockwell Collins to receive the required regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the merger) and to satisfy the other conditions to the closing of the pending acquisition on a timely basis or at all;
- the occurrence of events that may give rise to a right of one or both of UTC or Rockwell Collins to terminate the merger agreement;
- negative effects of the announcement or the completion of the merger on the market price of UTC’s and/or Rockwell Collins’ common stock and/or on their respective financial performance;
- risks related to Rockwell Collins and UTC being restricted in their operation of their businesses while the merger agreement is in effect;
- risks relating to the value of the UTC’s shares to be issued in connection with the pending Rockwell Collins acquisition, significant merger costs and/or unknown liabilities;
- risks associated with third-party contracts containing consent and/or other provisions that may be triggered by the Rockwell Collins merger agreement;
- risks associated with merger-related litigation; and
- the ability of UTC and Rockwell Collins, or the combined company, to retain and hire key personnel.

In addition, this Form 10-Q includes important information as to risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. See the "Notes to Condensed Consolidated Financial Statements" under the heading "Note 15: Contingent Liabilities," the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the headings "Business Overview," "Results of Operations," "Liquidity and Financial Condition," and "Critical Accounting Estimates," and the sections titled "Legal Proceedings" and "Risk Factors" in this Form 10-Q and in our 2017 Annual Report and 2017 Form 10-K. Additional important information as to these factors is included in our 2017 Annual Report in the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the headings "Restructuring Costs," "Environmental Matters" and "Governmental Matters", in our 2017 Form 10-K in the "Business" section under the headings "General," "Description of Business by Segment" and "Other Matters Relating to Our Business as a Whole" and in our Form S-4 Registration Statement (Registration No. 333-220883) under the heading "Risk Factors". The forward-looking statements speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our other filings with the SEC.

## Risk factors

As filed, 143 characters.

There have been no material changes in the Company's risk factors from those disclosed in Part I, Item 1A, Risk Factors, in our 2017 Form 10-K.

Filed Jul 27, 2018.
Source: SEC EDGAR, the filing index for accession 0000101829-18-000027. Last ingested by Listed: Nov 3, 2026, 21:25 ET. No prices; not investment advice.