Michael Beardshaw Jeremy Schubert Charles Heldridge Lucas Mendoza

United Technologies Founded in 1929 as a response to Boeing – Headquarters – Hartford, CT Employs 212,000 people Market Cap: $89.05 B Creates – helicopters, aircraft engines – elevators and escalators, fuel cells, HVAC Hybrid inventory valuation – Primarily FIFO, some subsidiaries use LIFO

Honeywell Founded in 1904 by Mark Honeywell – Headquarters – Morristown, NJ Employs 132,000 people worldwide Market Cap: $75.24 B Currently operates in – Operates and creates aerospace and defense products – Smart technology control systems – Chemical products for the pharmaceutical industry – Efficiency production products for the automotive industry Hybrid inventory valuation – Some subsidiaries use LIFO

Boeing Founded in 1916 – Headquarters – Chicago, Illinois Employs 169,000 people worldwide Market Cap: $96.17 B Currently operates in – Aerospace and defense, commercial airplanes, helicopters, and air transportation – The defense industry is Boeing’s largest sector due to the large line of defense products and services offered Uses Weighted Average Inventory method

Common Size Income Statement Boeing 2010 Boeing 2011 Boeing 2012 UTX 2010 UTX 2011 UTX 2012 Honeywell 2010 Honeywell 2011 Honeywell 2012 Sale Of Products 81.8%83.5%87.2%71.1%69.7%70.6%79.7%78.7%79.2% Sale Of Services 18.2%16.5%12.8%28.9%30.3%29.4%21.3% 20.9% Total Revenue 100.0% Cost of Products -65.6%-67.9%-73.8%-53.3%-52.5%-53.9%-62.0%-63.6%-60.9% Cost of Services -14.8%-13.2%-10.0%-19.3%-19.9%-19.2%-14.4%-14.6%-14.2% Capital Corporation Interest Expense -0.3%-0.2%-0.1%N/A Total Cost and Expenses -80.6%-81.3%-84.0%-72.6%-72.4%-73.0%-76.5%-78.2%-75.1% Income from Operating Investments 0.4% 0.3%0.2%1.0%1.7%0.3%0.2% Administrative Expensive -5.7%-5.0%-4.5%-11.1% -11.2%-14.1%-14.8%-13.9% Research and Development -6.4%-5.7%-4.0%-3.2%-3.5%-4.1%N/A Earnings from Operations 7.7%8.5%7.7%13.2%14.1%13.3%9.7%7.3%11.2% Interest and Debt Expense -0.8%-0.7%-0.6%-1.2%-0.9%-1.3%-1.2%-1.0%-0.9% Earnings before Income Tax 7.0%7.9%7.2%12.0%13.2%12.0%9.5%6.2%10.3% Income Tax Expense -1.9%-2.0%-2.5%-3.4%-3.8%-3.0%-2.4%-1.1%-2.5% Net Income 5.1%5.9%4.8%8.7%9.6%9.5%6.1%5.7%7.8%

Common Size Balance Sheet

Revenue by Segment Major Segments: Aerospace - 5% steady annual growth expected Defense - in decline due to decreasing demand Commercial Aircraft - increased growth rate projected, perhaps over 10% Control Solutions – Security systems, climate control, other automated systems Human Transportation – elevators, escalators, etc.

Revenue by Segment

Liquidity

Debt

Profitability

Investor Analysis

Recommendation 1. Favorable key ratios: Quick, Current ratios Debt ratio ROA, ROI, ROE P/E ratio 2. Dividends Dividend Payout, Yield 3. Diversification is a major strength Controls, Aerospace, Transportation

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