United Technologies will likely invest less than $500 million in mergers and acquisitions in 2013 as it absorbs last year's addition of Goodrich and conservatively manages a growing stockpile of cash.
"There is quite frankly not much in the pipeline," says Gregory Hayes, senior vice-president and chief financial officer.
The company's activity in mergers and activities could pick up next year after it completes the integration of Goodrich into the newly-formed UTC Aerospace Systems division, which also includes Hamilton Sundstrand. Last year, United Technologies' subsidiary Pratt & Whitney also acquired the Rolls-Royce ownership share of International Aero Engines.
"We're well-positioned as we go into 2014," Hayes says.
Indeed, the company will likely finish the year with $7 billion in cash even despite a $2 billion expense to pay dividends, a $1 billion debt payment, and at least $1 billion planned for a share buy-back programme, Hayes adds.
UTC, meanwhile, is completing several divestitures by the second quarter, he says. These include the spin-off of the Goodrich engine controls business and the Honeywell electric power systems unit. UTC also is selling off two P&W units - Rocketdyne and Power Systems.
But Hayes also described a "tension" within United Technologies' account for capital expenditures. The company has budgeted $1.7 billion for "capex" spending in 2013, but Hayes and chief executive Louis Chenevert think that amount is too high. The aerospace operating divisions, however, are feeling pressure to prepare for a significant production ramp-up on commercial programmes, as Airbus and Boeing plan to exceed already historic output levels.
It is possible that United Technologies will deduct up to $200 million from the capital expenditure accounts in 2013, Hayes says, but acknowledges there is "pushback" from the company's customers.