Document
false860--12-31Q220192019-06-30truefalse10 Farm Springs RoadFarmington06032CT0000101829YesfalseLarge Accelerated FilerDEUNITED TECHNOLOGIES CORP /DE/falsefalse728-70005100000The three-month EURIBOR rate as of June 30, 2019 was approximately -0.345%. The notes may be redeemed at our option in whole, but not in part, at any time in the event of certain developments affecting U.S. taxation. The three-month EURIBOR rate as of June 30, 2019 was approximately -0.345%. The notes may be redeemed at our option in whole, but not in part, at any time in the event of certain developments affecting U.S. taxation. The three-month LIBOR rate as of June 30, 2019 was approximately 2.319%. The three-month LIBOR rate as of June 30, 2019 was approximately 2.319%. We may redeem these notes at our option pursuant to their terms. We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms. Rockwell Collins debt which remained outstanding following the Merger.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms. We may redeem these notes at our option pursuant to their terms.Rockwell Collins debt which remained outstanding following the Merger.We may redeem these notes at our option pursuant to their terms.Rockwell Collins debt which remained outstanding following the Merger.We may redeem these notes at our option pursuant to their terms.Rockwell Collins debt which remained outstanding following the Merger.We may redeem these notes at our option pursuant to their terms.Rockwell Collins debt which remained outstanding following the Merger.We may redeem these notes at our option pursuant to their terms.Rockwell Collins debt which remained outstanding following the Merger.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.Rockwell Collins debt which remained outstanding following the Merger.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.Rockwell Collins debt which remained outstanding following the Merger.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.Rockwell Collins debt which remained outstanding following the Merger.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.We may redeem these notes at our option pursuant to their terms.0.00150.011250.01150.012500.015000.018750.019000.01950.019500.02150.023000.026500.0280.028000.0310.031250.0320.033500.0350.03650.0370.037500.03950.031000.040500.041250.041500.04350.04450.046250.0480.045000.045000.048750.05250.054000.057000.060500.061250.067000.068000.070000.071000.075000.087500.08875EURIBOR plus 0.15% floating rate notes due 2019 (€750 million principal value) 2EURIBOR plus 0.20% floating rate notes due 2020 (€750 million principal value) 2LIBOR plus 0.650% floating rate notes due 2021 1,3LIBOR plus 0.350% floating rate notes due 2019 3 2018-05-182018-08-162018-05-182018-05-182018-08-162018-08-162018-08-162018-08-162018-08-162018-08-162019202020192021202120242023201920262020201920212030202220262022202420212027202420212027202320232046202520222047202820452047203820482043202020422020201920352040203620382028203620382027202920212019P20Y0MP10Y0MP15Y0M180 days after the date on which each of the separations of Otis and Carrier have been consummated2021-03-152021-08-052021-08-052019-03-1500000$1.73 billion€215 million (approximately $245 million)$177 million4/1/2019August 3, 2012December 24, 2013Our estimated total liability to resolve all pending and unasserted potential future asbestos claims through 2059 is approximately $328 million and is principally recorded in Other long-term liabilities on our Condensed Consolidated Balance Sheet as of June 30, 2019. This amount is on a pre-tax basis, not discounted, and excludes the Company’s legal fees to defend the asbestos claims (which will continue to be expensed by the Company as they are incurred). In addition, the Company has an insurance recovery receivable for probable asbestos related recoveries of approximately $147 million, which is included primarily in Other assets on our Condensed Consolidated Balance Sheet as of June 30, 2019. The amounts recorded by UTC for asbestos-related liabilities and insurance recoveries are based on currently available information and assumptions that we believe are reasonable. Our actual liabilities or insurance recoveries could be higher or lower than those recorded if actual results vary significantly from the assumptions. Key variables in these assumptions include the number and type of new claims to be filed each year, the outcomes or resolution of such claims, the average cost of resolution of each new claim, the amount of insurance available, the allocation methodologies, the contractual terms with each insurer with whom we have reached settlements, the resolution of coverage issues with other excess insurance carriers with whom we have not yet achieved settlements, and the solvency risk with respect to our insurance carriers. Other factors that may affect our future liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, legal rulings that may be made by state and federal courts, and the passage of state or federal legislation. At the end of each year, the Company will evaluate all of these factors and, with input from an outside actuarial expert, make any necessary adjustments to both our estimated asbestos liabilities and insurance recoveries.P4Y0M22DIn October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The amendments in this update for determining whether a decision-making fee is a variable interest require reporting entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety (as currently required in generally accepted accounting principles (GAAP)). These amendments also will create alignment between determining whether a decision making fee is a variable interest and determining whether a reporting entity within a related party group is the primary beneficiary of a VIE. This will significantly reduce the risk that decision makers with insignificant direct and indirect interests could be deemed the primary beneficiary of a VIE. The provisions of this ASU are effective for years beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the impact of this ASU. 00250000000.4950.59150000000506 €118 million (approximately $135 million)92€275 million (approximately $300 million)
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
 ____________________________________ 
FORM 10-Q
____________________________________ 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to                 
Commission file number 1-812
____________________________________ 
UNITED TECHNOLOGIES CORPORATION
____________________________________ 
DELAWARE
 
06-0570975
10 Farm Springs Road, Farmington, Connecticut 06032
(860) 728-7000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock ($1 par value)
UTX
 
New York Stock Exchange
(CUSIP 913017 10 9)
 
 
 
1.125% Notes due 2021
UTX 21D
 
New York Stock Exchange
(CUSIP 913017 CD9)
 
 
 
1.250% Notes due 2023
UTX 23
 
New York Stock Exchange
(CUSIP U91301 AD0)
 
 
 
1.150% Notes due 2024
UTX 24A
 
New York Stock Exchange
(CUSIP 913017 CU1)
 
 
 
1.875% Notes due 2026
UTX 26
 
New York Stock Exchange
(CUSIP 913017 CE7)
 
 
 
2.150% Notes due 2030
UTX 30
 
New York Stock Exchange
(CUSIP 913017 CV9)
 
 
 
Floating Rate Notes due 2019
UTX 19C
 
New York Stock Exchange
(CUSIP 913017 CS6)
 
 
 
Floating Rate Notes due 2020
UTX 20B
 
New York Stock Exchange
(CUSIP 913017 CT4)
 
 
 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý.    No  ¨.


Table of Contents

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý.    No  ¨.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
ý
Accelerated filer
¨
 
 
 
 
Non-accelerated filer
¨
Smaller reporting company
¨
 
 
 
 
 
 
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨.    No  ý.
At June 30, 2019 there were 862,831,280 shares of Common Stock outstanding.





Table of Contents

UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONTENTS OF QUARTERLY REPORT ON FORM 10-Q
Quarter Ended June 30, 2019
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

United Technologies Corporation and its subsidiaries' names, abbreviations thereof, logos, and product and service designators are all either the registered or unregistered trademarks or tradenames of United Technologies Corporation and its subsidiaries. Names, abbreviations of names, logos, and products and service designators of other companies are either the registered or unregistered trademarks or tradenames of their respective owners. As used herein, the terms "we," "us," "our," "the Company," or "UTC," unless the context otherwise requires, mean United Technologies Corporation and its subsidiaries. References to internet web sites in this Form 10-Q are provided for convenience only. Information available through these web sites is not incorporated by reference into this Form 10-Q.

3

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.
Financial Statements

UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) 
 
Quarter Ended June 30,
(dollars in millions, except per share amounts)
2019
 
2018
Net Sales:
 
 
 
Product sales
$
14,033

 
$
11,520

Service sales
5,601

 
5,185

 
19,634

 
16,705

Costs and Expenses:
 
 
 
Cost of products sold
10,863

 
9,154

Cost of services sold
3,550

 
3,268

Research and development
743

 
589

Selling, general and administrative
2,106

 
1,759

 
17,262

 
14,770

Other income, net
212

 
941

Operating profit
2,584

 
2,876

Non-service pension (benefit)
(216
)
 
(192
)
Interest expense, net
360

 
234

Income from operations before income taxes
2,440

 
2,834

Income tax expense
441

 
695

Net income from operations
1,999

 
2,139

Less: Noncontrolling interest in subsidiaries' earnings from operations
99

 
91

Net income attributable to common shareowners
$
1,900

 
$
2,048

Earnings Per Share of Common Stock - Basic:
 
 
 
Net income attributable to common shareowners
$
2.22

 
$
2.59

Earnings Per Share of Common Stock - Diluted:
 
 
 
Net income attributable to common shareowners
$
2.20

 
$
2.56


See accompanying Notes to Condensed Consolidated Financial Statements


4

Table of Contents

UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) 
 
Six Months Ended June 30,
(dollars in millions, except per share amounts)
2019
 
2018
Net Sales:
 
 
 
Product sales
$
26,908

 
$
21,778

Service sales
11,091

 
10,169

 
37,999

 
31,947

Costs and Expenses:
 
 
 
Cost of products sold
21,149

 
17,170

Cost of services sold
6,971

 
6,532

Research and development
1,471

 
1,143

Selling, general and administrative
4,103

 
3,470

 
33,694

 
28,315

Other income, net
324

 
1,172

Operating profit
4,629

 
4,804

Non-service pension (benefit)
(424
)
 
(383
)
Interest expense, net
791

 
463

Income from operations before income taxes
4,262

 
4,724

Income tax expense
838

 
1,217

Net income from operations
3,424

 
3,507

Less: Noncontrolling interest in subsidiaries' earnings from operations
178

 
162

Net income attributable to common shareowners
$
3,246

 
$
3,345

Earnings Per Share of Common Stock - Basic:
 
 
 
Net income attributable to common shareowners
$
3.80

 
$
4.23

Earnings Per Share of Common Stock - Diluted:
 
 
 
Net income attributable to common shareowners
$
3.76

 
$
4.18


See accompanying Notes to Condensed Consolidated Financial Statements

5

Table of Contents

UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)

 
Quarter Ended June 30,
 
Six Months Ended June 30,
(dollars in millions)
2019
 
2018
 
2019
 
2018
Net income from operations
$
1,999

 
$
2,139

 
$
3,424

 
$
3,507

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Foreign currency translation adjustments
(423
)
 
(679
)
 
98

 
(140
)
Pension and postretirement benefit plans adjustments
24

 
80

 
57

 
153

ASU 2016-01 adoption impact (Note 12)

 

 

 
(5
)
Change in unrealized cash flow hedging
25

 
(186
)
 
33

 
(172
)
Other comprehensive (loss) income, net of tax
(374
)
 
(785
)
 
188

 
(164
)
Comprehensive income
1,625

 
1,354

 
3,612

 
3,343

Less: Comprehensive income attributable to noncontrolling interest
(100
)
 
(53
)
 
(182
)
 
(157
)
Comprehensive income attributable to common shareowners
$
1,525

 
$
1,301

 
$
3,430

 
$
3,186

See accompanying Notes to Condensed Consolidated Financial Statements

6

Table of Contents

UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(dollars in millions)
June 30, 2019
 
December 31, 2018
Assets
 
 
 
Cash and cash equivalents
$
6,819

 
$
6,152

Accounts receivable, net
13,695

 
14,271

Contract assets, current
4,334

 
3,486

Inventory, net
10,934

 
10,083

Other assets, current
1,276

 
1,511

Total Current Assets
37,058

 
35,503

Customer financing assets
3,293

 
3,023

Future income tax benefits
1,712

 
1,646

Fixed assets
24,689

 
24,084

Less: Accumulated depreciation
(12,397
)
 
(11,787
)
Fixed assets, net
12,292

 
12,297

Operating lease right-of-use assets

2,740

 

Goodwill
48,358

 
48,112

Intangible assets, net
25,963

 
26,424

Other assets
7,574

 
7,206

Total Assets
$
138,990

 
$
134,211

Liabilities and Equity
 
 
 
Short-term borrowings
$
1,139

 
$
1,469

Accounts payable
11,109

 
11,080

Accrued liabilities
10,753

 
10,223

Contract liabilities, current
6,219

 
5,720

Long-term debt currently due
6,202

 
2,876

Total Current Liabilities
35,422

 
31,368

Long-term debt
37,910

 
41,192

Future pension and postretirement benefit obligations
3,663

 
4,018

Operating lease liabilities

2,258

 

Other long-term liabilities
16,651

 
16,914

Total Liabilities
95,904

 
93,492

Commitments and contingent liabilities (Note 15)

 

Redeemable noncontrolling interest
109

 
109

Shareowners' Equity:
 
 
 
Common Stock
22,718

 
22,514

Treasury Stock
(32,549
)
 
(32,482
)
Retained earnings
60,548

 
57,823

Unearned ESOP shares
(71
)
 
(76
)
Accumulated other comprehensive loss
(9,892
)
 
(9,333
)
Total Shareowners' Equity
40,754

 
38,446

Noncontrolling interest
2,223

 
2,164

Total Equity
42,977

 
40,610

Total Liabilities and Equity
$
138,990

 
$
134,211

See accompanying Notes to Condensed Consolidated Financial Statements

7

Table of Contents

UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 
Six Months Ended June 30,
(dollars in millions)
2019
 
2018
Operating Activities:
 
 
 
Net income from operations
$
3,424

 
$
3,507

Adjustments to reconcile net income from operations to net cash flows provided by operating activities:
 
 
 
Depreciation and amortization
1,864

 
1,173

Deferred income tax provision
6

 
45

Stock compensation cost
156

 
117

Gain on sale of Taylor Company

 
(795
)
Change in:
 
 
 
Accounts receivable
769

 
(1,661
)
Contract assets, current
(491
)
 
(617
)
Inventory
(1,108
)
 
(962
)
Other current assets
51

 
301

Accounts payable and accrued liabilities
(58
)
 
2,010

Contract liabilities, current
381

 
440

Global pension contributions
(79
)
 
(59
)
Canadian government settlement
(38
)
 
(221
)
Other operating activities, net
(1,266
)
 
(723
)
Net cash flows provided by operating activities
3,611

 
2,555

Investing Activities:
 
 
 
Capital expenditures
(830
)
 
(709
)
Investments in businesses (Note 1)
(32
)
 
(134
)
Dispositions of businesses (Note 1)
133

 
1,094

Increase in customer financing assets, net
(331
)
 
(344
)
Increase in collaboration intangible assets
(169
)
 
(181
)
Receipts from settlements of derivative contracts
61

 
82

Other investing activities, net
(49
)
 
(46
)
Net cash flows used in investing activities
(1,217
)
 
(238
)
Financing Activities:
 
 
 
Issuance of long-term debt
56

 
2,429

Repayment of long-term debt
(65
)
 
(2,092
)
(Decrease) increase in short-term borrowings, net
(327
)
 
642

Proceeds from Common Stock issued under employee stock plans
11

 
6

Dividends paid on Common Stock
(1,219
)
 
(1,070
)
Repurchase of Common Stock
(69
)
 
(52
)
Other financing activities, net
(153
)
 
(74
)
Net cash flows used in financing activities
(1,766
)
 
(211
)
Effect of foreign exchange rate changes on cash and cash equivalents
16

 
(18
)
Net increase in cash, cash equivalents and restricted cash
644

 
2,088

Cash, cash equivalents and restricted cash, beginning of year
6,212

 
9,018

Cash, cash equivalents and restricted cash, end of period
6,856

 
11,106

Less: Restricted cash
37

 
38

Cash and cash equivalents, end of period
$
6,819

 
$
11,068


See accompanying Notes to Condensed Consolidated Financial Statements

8

Table of Contents

UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited)
 
 
Quarter Ended June 30,
 
Six Months Ended June 30,
(dollars in millions, except per share amounts; shares in thousands)
 
2019
 
2018
 
2019
 
2018
Equity beginning balance
 
$
41,946

 
$
32,492

 
$
40,610

 
$
31,421

Common Stock
 
 
 
 
 
 
 
 
Beginning balance
 
22,564

 
17,641

 
22,514

 
17,574

Common Stock issued under employee plans
 
154

 
106

 
211

 
174

Purchase of subsidiary shares from noncontrolling interest, net
 

 

 

 
(1
)
Redeemable noncontrolling interest fair value adjustment
 

 

 
(7
)
 

Ending balance
 
22,718

 
17,747

 
22,718

 
17,747

Treasury Stock
 
 
 
 
 
 
 
 
Beginning balance
 
(32,511
)
 
(35,619
)
 
(32,482
)
 
(35,596
)
Common Stock issued under employee plans
 
1

 
1

 
4

 
3

Common Stock repurchased
 
(39
)
 
(27
)
 
(71
)
 
(52
)
Ending balance
 
(32,549
)
 
(35,645
)
 
(32,549
)
 
(35,645
)
Retained Earnings
 
 
 
 
 
 
 
 
Beginning balance
 
59,279

 
55,533

 
57,823

 
55,242

Net Income
 
1,900

 
2,048

 
3,246

 
3,345

Dividends on Common Stock
 
(610
)
 
(535
)
 
(1,219
)
 
(1,070
)
Dividends on ESOP Common Stock
 
(18
)
 
(17
)
 
(36
)
 
(35
)
Redeemable noncontrolling interest fair value adjustment
 
(11
)
 

 
(7
)
 
(2
)
New Revenue Standard adoption impact
 

 

 

 
(480
)
ASU 2018-02 adoption impact (Note 12)
 

 

 
745

 

Other
 
8

 
(2
)
 
(4
)
 
27

Ending balance
 
60,548

 
57,027

 
60,548

 
57,027

Unearned ESOP Shares
 
 
 
 
 
 
 
 
Beginning balance
 
(75
)
 
(84
)
 
(76
)
 
(85
)
Common Stock issued under employee plans
 
4

 
3

 
5

 
4

Ending balance
 
(71
)
 
(81
)
 
(71
)
 
(81
)
Accumulated Other Comprehensive (Loss) Income
 
 
 
 
 
 
 
 
Beginning balance
 
(9,519
)
 
(6,937
)
 
(9,333
)
 
(7,525
)
Other comprehensive (loss) income, net of tax
 
(373
)
 
(747
)
 
186

 
(159
)
ASU 2018-02 adoption impact (Note 12)
 

 

 
(745
)
 

Ending balance
 
(9,892
)
 
(7,684
)
 
(9,892
)
 
(7,684
)
Noncontrolling Interest
 
 
 
 
 
 
 
 
Beginning balance
 
2,208

 
1,958

 
2,164

 
1,811

Net Income
 
99

 
91

 
178

 
162

Redeemable noncontrolling interest in subsidiaries' earnings
 
2

 
(3
)
 
5

 
(5
)
Other comprehensive income (loss), net of tax
 
1

 
(38
)
 
4

 
(5
)
Dividends attributable to noncontrolling interest
 
(101
)
 
(73
)
 
(145
)
 
(139
)
Purchase of subsidiary shares from noncontrolling interest, net
 
(1
)
 

 
(1
)
 
(1
)
Disposition of noncontrolling interest, net
 

 

 

 
(8
)
Capital contributions
 
18

 
42

 
18

 
162

Other
 
(3
)
 
5

 

 
5

Ending balance
 
2,223

 
1,982

 
2,223

 
1,982

Equity at June 30
 
$
42,977

 
$
33,346

 
$
42,977

 
$
33,346

 
 
 
 
 
Supplemental share information
Shares of Common Stock issued under employee plans
 
799

 
235

 
1,827

 
1,310

Shares of Common Stock repurchased
 
297

 
214

 
553

 
402

Dividends per share of Common Stock
 
$
0.740

 
$
0.700

 
$
1.470

 
$
1.400

See accompanying Notes to Condensed Consolidated Financial Statements

9

Table of Contents

UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Condensed Consolidated Financial Statements at June 30, 2019 and for the quarters and six months ended June 30, 2019 and 2018 are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the results for the interim periods. The results reported in these Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the financial statements and notes in our Annual Report to Shareowners (2018 Annual Report) incorporated by reference in our Annual Report on Form 10-K for calendar year 2018 (2018 Form 10-K).
Note 1: Acquisitions, Dispositions, Goodwill and Other Intangible Assets
Business Acquisitions. During the six months ended June 30, 2019, our investment in business acquisitions was $32 million, which consisted of small acquisitions at Otis.
On June 9, 2019, UTC entered into a merger agreement with Raytheon Company (“Raytheon”) providing for an all-stock merger of equals transaction.  The Raytheon merger agreement provides, among other things, that each share of Raytheon common stock issued and outstanding immediately prior to the closing of the Raytheon merger (except for shares held by Raytheon as treasury stock) will be converted into the right to receive 2.3348 shares of UTC common stock.  Upon the closing of the Raytheon merger, Raytheon will become a wholly-owned subsidiary of UTC, and UTC will change its name to Raytheon Technologies Corporation. The Raytheon merger is expected to close in the first half of 2020 and is subject to customary closing conditions, including receipt of required regulatory approvals, the approval of both Raytheon’s and our shareowners, and the completion of UTC's previously announced separation of its Otis and Carrier businesses.
On November 26, 2018, we completed the acquisition of Rockwell Collins (the "Rockwell Merger"), a leader in aviation and high-integrity solutions for commercial and military customers as well as leading-edge avionics, flight controls, aircraft interior and data connectivity solutions. Under the terms of the Rockwell merger agreement, each share of common stock, par value $0.01 per share, of Rockwell Collins issued and outstanding immediately prior to the effective time of the Rockwell Merger (other than shares held by Rockwell Collins, the Company, Riveter Merger Sub Corp or any of their respective wholly owned subsidiaries) was converted into the right to receive (1) $93.33 in cash, without interest, and (2) 0.37525 shares of Company common stock (together, the “Merger Consideration”), less any applicable withholding taxes, with cash paid in lieu of fractional shares. The total aggregate consideration payable in the Rockwell Merger was $15.5 billion in cash ($14.9 billion net of cash acquired) and 62.2 million shares of Company common stock. In addition, $7.8 billion of Rockwell Collins debt was outstanding at the time of the Rockwell Merger. This equated to a total enterprise value of $30.6 billion, including the $7.8 billion of Rockwell Collins' outstanding debt.     
(dollars in millions)
 
Amount
Cash consideration paid for Rockwell Collins outstanding common stock & equity awards
 
$
15,533

Fair value of UTC common stock issued for Rockwell Collins outstanding common stock & equity awards
 
7,960

Total consideration transferred
 
$
23,493

The cash consideration utilized for the Rockwell Merger was partially financed through the previously disclosed issuance of $11.0 billion aggregate principal notes on August 16, 2018 for net proceeds of $10.9 billion. For the remainder of the cash consideration, we utilized repatriated cash and cash equivalents and cash flow generated from operating activities.
Preliminary Allocation of Consideration Transferred to Net Assets Acquired:
The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from the Rockwell Collins acquisition. The final determination of the fair value of certain assets and liabilities will be completed up to a one year measurement period from the date of acquisition as required by the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, “Business Combinations”. As of June 30, 2019, the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are preliminary, including the validation of the underlying cash flows used to determine the fair value of the identified intangible assets. The size and breadth of the Rockwell Collins acquisition necessitates use of the one year measurement period to adequately analyze all the factors used in establishing the asset and liability fair values as of the acquisition date, including, but not limited to, intangible assets, inventory, real property, leases, deferred tax liabilities related to the unremitted earnings of

10

Table of Contents

foreign subsidiaries, certain reserves and the related tax impacts of any adjustments. Any potential adjustments could be material in relation to the preliminary values presented below:
(dollars in millions)
 
Cash and cash equivalents
$
640

Accounts receivable, net
1,665

Inventory, net
1,511

Contract assets, current
289

Other assets, current
263

Future income tax benefits
37

Fixed assets, net
1,673

Intangible assets:
 
Customer relationships
8,220

Tradenames/trademarks
1,870

        Developed technology
600

Other assets
210

Total identifiable assets acquired
16,978

 
 
Short-term borrowings
2,254

Accounts payable
515

Accrued liabilities
1,618

Contract liabilities, current
301

Long-term debt
5,530

Future pension and postretirement benefit obligation
502

Other long-term liabilities
3,481

Noncontrolling interest
6

Total liabilities acquired
14,207

Total identifiable net assets
2,771

Goodwill
20,722

Total consideration transferred
$
23,493

In order to allocate the consideration transferred for Rockwell Collins, the fair values of all identifiable assets and liabilities were established. For accounting and financial reporting purposes, fair value is defined under FASB ASC Topic 820, “Fair Value Measurements and Disclosures” as the price that would be received upon sale of an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants. Use of different estimates and judgments could yield different results. Fair value adjustments to Rockwell Collins' identified assets and liabilities resulted in an increase in inventory and fixed assets of $282 million and $269 million, respectively. In determining the fair value of identifiable assets acquired and liabilities assumed, a review was conducted for any significant contingent assets or liabilities existing as of the acquisition date. The preliminary assessment did not note any significant contingencies related to existing legal or government action.

11

Table of Contents

The fair values of the customer relationship and related program intangible assets, which include the related aerospace program original equipment (OEM) and aftermarket cash flows, were determined by using an “income approach." Under this approach, the net earnings attributable to the asset or liability being measured are isolated using the discounted projected net cash flows. These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured. Both the amount and the duration of the cash flows are considered from a market participant perspective. Our estimates of market participant net cash flows considered historical and projected pricing, remaining developmental effort, operational performance, including company specific synergies, aftermarket retention, product life cycles, material and labor pricing, and other relevant customer, contractual and market factors. Where appropriate, the net cash flows are probability-adjusted to reflect the uncertainties associated with the underlying assumptions as well as the risk profile of the net cash flows utilized in the valuation. The probability-adjusted future cash flows are then discounted to present value using an appropriate discount rate. The customer relationship and related program intangible assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of the underlying programs of 10 to 20 years. The developed technology intangible asset is being amortized over the economic pattern of benefit. The fair value of the tradename intangible assets were determined utilizing the relief from royalty method which is a form of the income approach. Under this method, a royalty rate based on observed market royalties is applied to projected revenue supporting the tradename and discounted to present value using an appropriate discount rate.  The tradename intangible assets have been determined to have an indefinite life. The intangible assets included above consist of the following:
(dollars in millions)
Estimated
Fair Value
 
Estimated
Life
Acquired customer relationships
$
8,220

 
10-20 years
Acquired tradenames/trademarks
1,870

 
Indefinite
Acquired developed technology
600

 
15 years
 
$
10,690

 
 
We also identified customer contractual obligations on certain contracts with economic returns that are lower than could be realized in market transactions as of the acquisition date. We measured these liabilities under the measurement provisions of FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” which is based on the price to transfer the obligation to a market participant at the measurement date, assuming that the liability will remain outstanding in the marketplace. Based on the estimated net cash outflows of the programs plus a reasonable contracting profit margin required to transfer the contracts to market participants, we recorded assumed liabilities of approximately $1,020 million. These liabilities will be liquidated in accordance with the underlying pattern of obligations, as reflected by the expenses incurred on the contracts. Total consumption of the contractual obligation for the next five years is expected to be as follows: $77 million in 2019, $129 million in 2020, $131 million in 2021, $132 million in 2022, and $119 million in 2023.
Acquisition-Related Costs:
Acquisition-related costs have been expensed as incurred. In the six months ended June 30, 2019 and 2018, approximately $10 million and $50 million, respectively, of transaction and integration costs have been incurred. These costs were recorded in Selling, general and administrative expenses within the Condensed Consolidated Statement of Operations.
Supplemental Pro-Forma Data:
Rockwell Collins' results of operations have been included in UTC’s financial statements for the period subsequent to the completion of the acquisition on November 26, 2018. Rockwell Collins contributed sales of approximately $4.6 billion and operating profit of approximately $665 million for the six months ended June 30, 2019. The following unaudited supplemental pro-forma data presents consolidated information as if the acquisition had been completed on January 1, 2017. The pro-forma results were calculated by combining the results of UTC with the stand-alone results of Rockwell Collins for the pre-acquisition periods, which were adjusted to account for certain costs that would have been incurred during this pre-acquisition period:
 
Quarter Ended June 30,
 
Six Months Ended June 30,
(dollars in millions, except per share amounts)
2019
 
2018
 
2019
 
2018
Net sales
$
19,634

 
$
18,810

 
$
37,994

 
$
36,131

Net income attributable to common shareowners
$
1,901

 
$
2,266

 
$
3,385

 
$
3,742

Basic earnings per share of common stock
$
2.22

 
$
2.66

 
$
3.96

 
$
4.39

Diluted earnings per share of common stock
$
2.20

 
$
2.63

 
$
3.92

 
$
4.34


12

Table of Contents

The unaudited supplemental pro-forma data above includes the following significant adjustments made to account for certain costs which would have been incurred if the acquisition had been completed on January 1, 2017, as adjusted for the applicable tax impact.
 
Quarter Ended June 30,
 
Six Months Ended June 30,
(dollars in millions)
2019
 
2018
 
2019
 
2018
Amortization of inventory and fixed asset fair value adjustment 1
$

 
$
(5
)
 
$
141

 
$
(10
)
Amortization of acquired Rockwell Collins intangible assets, net 2

 
(53
)
 

 
(106
)
Utilization of contractual customer obligation 3

 
8

 

 
10

UTC/Rockwell Collins fees for advisory, legal, accounting services 4
1

 
17

 
3

 
43

Interest expense incurred on acquisition financing, net 5

 
(76
)
 

 
(152
)
Elimination of capitalized pre-production engineering amortization 6

 
17

 

 
32

Adjustment to net periodic pension cost 7

 
11

 

 
22

Adjustment to reflect the adoption of ASC 606 8

 
29

 

 
58

Elimination of entities held for sale 9

 
(5
)
 
(5
)
 
(12
)
 
$
1

 
$
(57
)
 
$
139

 
$
(115
)
1
Reflects the elimination of the inventory step-up amortization recorded by UTC in 2019 as this would have been completed within the first two quarters of 2017. Additionally, this adjustment reflects the amortization of the fixed asset fair value adjustment as of the acquisition date.
2
Reflects the additional amortization of the acquired Rockwell Collins' intangible assets recognized at fair value in purchase accounting and eliminates the historical Rockwell Collins intangible asset amortization expense.
3
Reflects the additional amortization of liabilities recognized for acquired contracts with terms less favorable than could be realized in market transactions as of the acquisition date and eliminates Rockwell Collins historical amortization of these liabilities.
4
Reflects the elimination of transaction-related fees incurred by UTC and Rockwell Collins in connection with the acquisition and assumes all of the fees were incurred during the first quarter of 2017.
5
Reflects the additional interest expense incurred on debt to finance our acquisition of Rockwell Collins and reduces interest expense for the debt fair value adjustment which would have been amortized.
6
Reflects the elimination of Rockwell Collins capitalized pre-production engineering amortization to conform to UTC policy.
7
Reflects adjustments for the elimination of amortization of prior service cost and actuarial loss amortization, which was recorded by Rockwell Collins, as a result of fair value purchase accounting, net of the impact of the revised pension and post-retirement benefit (expense) as determined under UTC’s plan assumptions.
8
Reflects adjustments to Rockwell Collins revenue recognition as if they adopted the New Revenue Standard as of January 1, 2018 and primarily relates to capitalization of contract costs and changes in timing of sales recognition for contracts requiring an over time method of revenue recognition, partially offset by deferral of revenue recognized on OEM product engineering and development.
9
Reflects the elimination of entities required to be sold for regulatory approvals.
The unaudited supplemental pro-forma financial information does not reflect the potential realization of cost savings related to the integration of the two companies. Further, the pro-forma data should not be considered indicative of the results that would have occurred if the acquisition and related financing had been consummated on January 1, 2017, nor are they indicative of future results.
Dispositions. Cash inflows related to dispositions during the six months ended June 30, 2019 were $133 million and primarily consisted of the dispositions of businesses held for sale associated with the Rockwell Collins acquisition. In accordance with conditions imposed for regulatory approval of the acquisition, Rockwell Collins was required to dispose of certain businesses. These businesses were held separate from UTC’s and Rockwell Collins' ongoing businesses pursuant to regulatory requirements. Definitive agreements to sell each of the businesses were entered into prior to the completion of UTC's acquisition of Rockwell Collins. The related assets and liabilities of these businesses had been accounted for as held for sale at fair value less cost to sell. As of December 31, 2018, assets held for sale of $175 million were included within Other assets, current and liabilities held for sale of $40 million were included within Accrued liabilities on the Consolidated Balance Sheet. The major classes of assets and liabilities primarily include net Inventory of $51 million and net Fixed assets of $37 million. In the first quarter of 2019, Rockwell Collins completed the sale of all businesses which were held for sale as of December 31, 2018.

13

Table of Contents

On November 26, 2018, the Company announced its intention to separate into three independent companies. Following the separations, the Company will operate as an aerospace company comprised of Collins Aerospace Systems and the Pratt & Whitney businesses, and Otis and Carrier will become independent companies. The proposed separations are expected to be effected through spin-offs of Otis and Carrier that are intended to be tax-free for the Company’s shareowners for U.S. federal income tax purposes, and are expected to be completed in the first half of 2020. Separation of Otis and Carrier from UTC via spin-off transactions will be subject to the satisfaction of customary conditions, including, among others, final approval by the Company’s Board of Directors, receipt of tax rulings in certain jurisdictions and/or a tax opinion from external counsel (as applicable), the filing with the Securities and Exchange Commission (SEC) and effectiveness of Form 10 registration statements, and satisfactory completion of financing (subject to UTC’s agreement to consummate the distributions pursuant to, and subject to the terms and conditions of, the Raytheon merger agreement).
Goodwill. Changes in our goodwill balances for the six months ended June 30, 2019 were as follows:
(dollars in millions)
Balance as of
January 1, 2019
 
Goodwill 
Resulting from Business Combinations
 
Foreign Currency Translation and Other
 
Balance as of
June 30, 2019
Otis
$
1,688

 
$
7

 
$
(16
)
 
$
1,679

Carrier
9,835

 
1

 
3

 
9,839

Pratt & Whitney
1,567

 

 
(4
)
 
1,563

Collins Aerospace Systems
35,001

 
255

 

 
35,256

Total Segments
48,091

 
263

 
(17
)
 
48,337

Eliminations and other
21

 

 

 
21

Total
$
48,112

 
$
263

 
$
(17
)
 
$
48,358


Goodwill increased $255 million at Collins Aerospace Systems resulting from several insignificant purchase accounting adjustments made during the six months ended June 30, 2019, the largest of which included a reduction in acquired customer relationship intangible assets of $100 million.
Intangible Assets. Identifiable intangible assets are comprised of the following:

 
June 30, 2019
 
December 31, 2018
(dollars in millions)
Gross Amount
 
Accumulated
Amortization
 
Gross Amount
 
Accumulated
Amortization
Amortized:
 
 
 
 
 
 
 
Service portfolios
$
2,179

 
$
(1,656
)
 
$
2,164

 
$
(1,608
)
Patents and trademarks
361

 
(245
)
 
361

 
(236
)
Collaboration intangible assets
4,681

 
(779
)
 
4,509

 
(649
)
Customer relationships and other
22,598

 
(5,099
)
 
22,525

 
(4,560
)
 
29,819

 
(7,779
)
 
29,559

 
(7,053
)
Unamortized:
 
 
 
 
 
 
 
Trademarks and other
3,923

 

 
3,918

 

Total
$
33,742

 
$
(7,779
)
 
$
33,477

 
$
(7,053
)


14

Table of Contents

In addition to customer relationship intangible assets obtained through business combinations, customer relationship intangible assets include payments made to our customers to secure certain contractual rights. Such payments are capitalized when distinct rights are obtained and sufficient incremental cash flows to support the recoverability of the assets have been established. Otherwise, the applicable portion of the payments is expensed. We amortize these intangible assets based on the underlying pattern of economic benefit, which may result in an amortization method other than straight-line. In the aerospace industry, amortization based on the pattern of economic benefit generally results in lower amortization expense during the development period with amortization expense increasing as programs enter full production and aftermarket cycles. If a pattern of economic benefit cannot be reliably determined, a straight-line amortization method is used. We classify amortization of such payments as a reduction of sales. The collaboration intangible assets are amortized based upon the pattern of economic benefits as represented by the underlying cash flows.
Amortization of intangible assets for the quarter and six months ended June 30, 2019 was $348 million and $722 million, respectively, compared with $232 million and $455 million for the same periods of 2018. The following is the expected amortization of intangible assets for the years 2019 through 2024, which reflects the pattern of expected economic benefit on certain aerospace intangible assets. 
(dollars in millions)
 
Remaining 2019
 
2020
 
2021
 
2022
 
2023
 
2024
Amortization expense
 
$
742

 
$
1,427

 
$
1,408

 
$
1,407

 
$
1,398

 
$
1,378


Note 2: Revenue Recognition
We account for revenue in accordance with ASC Topic 606: Revenue from Contracts with Customers.
Performance Obligations. 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, unfunded contract value under U.S. Government contracts, 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.
Timing of the satisfaction of performance obligations varies across our businesses due to our diverse product and service mix, customer base, and contractual terms.
Remaining Performance Obligations (RPO). RPO represents the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. As of June 30, 2019 our total RPO was approximately $125.1 billion compared to $115.5 billion as of December 31, 2018. Of the total RPO as of June 30, 2019, we expect approximately 45% will be recognized as sales over the following 24 months.
Capitalized Contract Costs. 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 OEM products performance obligations are satisfied. 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 performance obligations related to the OEM products are satisfied. Capitalized net contract fulfillment costs were $1,229 million and $914 million as of June 30, 2019 and December 31, 2018, respectively and are recognized in Other assets in our Condensed Consolidated Balance Sheet.

15

Table of Contents

Contract Assets and Liabilities. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. We receive payments from customers based on the terms established in our contracts. Total contract assets and contract liabilities as of June 30, 2019 and December 31, 2018 are as follows:
(dollars in millions)
June 30, 2019
 
December 31, 2018
Contract assets, current
$
4,334

 
$
3,486

Contract assets, noncurrent (included within Other assets)
1,215

 
1,142

Total contract assets
5,549

 
4,628

Contract liabilities, current
(6,219
)
 
(5,720
)
Contract liabilities, noncurrent (included within Other long-term liabilities)
(5,190
)
 
(5,069
)
Total contract liabilities
(11,409
)
 
(10,789
)
Net contract liabilities
$
(5,860
)
 
$
(6,161
)
Contract assets increased $921 million during the six months ended June 30, 2019 primarily due to revenue recognition in excess of customer billings, primarily on Pratt & Whitney military and commercial aftermarket service agreements and various programs at Collins Aerospace Systems. Contract liabilities increased $620 million during the six months ended June 30, 2019 primarily due to customer billings in excess of revenue recognized on Pratt & Whitney commercial aftermarket service agreements, at Collins Aerospace across various programs, and on Otis maintenance contracts. We recognized revenue of $3.2 billion during the six months ended June 30, 2019 related to contract liabilities as of December 31, 2018.
Note 3: Earnings Per Share
 
Quarter Ended June 30,
 
Six Months Ended June 30,
(dollars in millions, except per share amounts; shares in millions)
2019
 
2018
 
2019
 
2018
Net income attributable to common shareowners
$
1,900

 
$
2,048

 
$
3,246

 
$
3,345

Basic weighted average number of shares outstanding
854.4

 
790.5

 
853.8

 
790.2

Stock awards and equity units (share equivalent)
9.3

 
9.1

 
8.5

 
9.8

Diluted weighted average number of shares outstanding
863.7

 
799.6

 
862.3

 
800.0

Earnings Per Share of Common Stock:
 
 
 
 
 
 
 
Basic
$
2.22

 
$
2.59

 
$
3.80

 
$
4.23

Diluted
$
2.20

 
$
2.56

 
$
3.76

 
$
4.18


The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock appreciation rights and stock options, when the average market price of the common stock is lower than the exercise price of the related stock awards during the period because the effect would be anti-dilutive. In addition, the computation of diluted earnings per share excludes the effect of the potential exercise of stock awards when the awards’ assumed proceeds exceed the average market price of the common shares during the period. For the quarter and six months ended June 30, 2019, the number of stock awards excluded from the computation was approximately 11.0 million and 13.0 million, respectively. For the quarter and six months ended June 30, 2018, the number of stock awards excluded from the computation was approximately 5.1 million.
Note 4: Inventory, net
(dollars in millions)
June 30, 2019
 
December 31, 2018
Raw materials
$
3,024

 
$
3,052

Work-in-process
2,863

 
2,673

Finished goods
5,047

 
4,358

 
$
10,934

 
$
10,083


Raw materials, work-in-process and finished goods are net of valuation reserves of $1,405 million and $1,270 million as of June 30, 2019 and December 31, 2018, respectively.

16

Table of Contents


Note 5: Borrowings and Lines of Credit
(dollars in millions)
June 30, 2019
 
December 31, 2018
Commercial paper
$
855

 
$
1,257

Other borrowings
284

 
212

Total short-term borrowings
$
1,139

 
$
1,469


At June 30, 2019, we had credit agreements with various banks permitting aggregate borrowings of up to $10.35 billion, including: a $2.20 billion revolving credit agreement and a $2.15 billion multicurrency revolving credit agreement, both of which expire in August 2021; and a $2.0 billion revolving credit agreement and a $4.0 billion term credit agreement, both of which we entered into on March 15, 2019 and which will expire on March 15, 2021 or, if earlier, the date that is 180 days after the date on which each of the separations of Otis and Carrier have been consummated. On March 15, 2019, we terminated the $1.5 billion revolving credit agreement that we entered into on November 26, 2018. As of June 30, 2019, there were no borrowings under any of these 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, 2019, our maximum commercial paper borrowing limit was $6.35 billion. Commercial paper borrowings at June 30, 2019 include approximately 750 million ($855 million) of euro-denominated commercial paper. 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 borrowings 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.
Long-term debt consisted of the following:
(dollars in millions)
June 30, 2019
 
December 31, 2018
LIBOR plus 0.350% floating rate notes due 2019 3
$
350

 
$
350

1.500% notes due 2019 1
650

 
650

1.950% notes due 2019 4
300

 
300

EURIBOR plus 0.15% floating rate notes due 2019 (€750 million principal value) 2
855

 
858

5.250% notes due 2019 4
300

 
300

8.875% notes due 2019
271

 
271

4.875% notes due 2020 1
171

 
171

4.500% notes due 2020 1
1,250

 
1,250

1.900% notes due 2020 1
1,000

 
1,000

EURIBOR plus 0.20% floating rate notes due 2020 (€750 million principal value) 2
855

 
858

8.750% notes due 2021
250

 
250

3.100% notes due 2021 4
250

 
250

3.350% notes due 2021 1
1,000

 
1,000

LIBOR plus 0.650% floating rate notes due 2021 1,3
750

 
750

1.950% notes due 2021 1
750

 
750

1.125% notes due 2021 (€950 million principal value) 1
1,082

 
1,088

2.300% notes due 2022 1
500

 
500

2.800% notes due 2022 4
1,100

 
1,100

3.100% notes due 2022 1
2,300

 
2,300

1.250% notes due 2023 (€750 million principal value) 1
855

 
858

3.650% notes due 2023 1
2,250

 
2,250

3.700% notes due 2023 4
400

 
400

2.800% notes due 2024 1
800

 
800

3.200% notes due 2024 4
950

 
950

1.150% notes due 2024 (€750 million principal value) 1
855

 
858

3.950% notes due 2025 1
1,500

 
1,500



17

Table of Contents

1.875% notes due 2026 (€500 million principal value) 1
569

 
573

2.650% notes due 2026 1
1,150

 
1,150

3.125% notes due 2027 1
1,100