XBRL Preparers Viewpoint

1
XBRL Preparers Viewpoint

• John Stantial
• Director of Financial Reporting
• United Technologies Corporation

2
Agenda

• Background
• UTC Participation
• Costs, Resources Tools
• Understanding the Basics
• Why Participate Now?
• Tapping into the Future Benefits
• Items for Consideration
• Conclusion Call to Action

3
Background United Technologies

• 47B international conglomerate
• Six principal segments
• Otis
• Carrier
• UTC Fire Security
• Pratt Whitney
• Hamilton Sundstrand
• Sikorsky
• Component of the Dow Jones
• Industrial Index

4
UTC Participation

• 9th company to participate in VFP
• Filed all seven quarters earnings releases in
  past two years
• First company to file complete Form 10-Q
  including auditors opinion
• Recently filed complete Exhibit 13 of Form 10-K
  including auditors opinion and certain other
  exhibits
• UTC is member of the XBRL, U.S. temporary Board
  of Directors

5
Costs, Resources and Tools

• Investment
• Initial required investment of 300
• 80 hours of effort on first filing now down to 4
• Total investment of approximately 40K and 600
  hours
• Tools
• Both Rivet and Fujitsu tools used
• Resources
• Virtually all work done in house by existing
  resources outside resources are available
• Voluntary review of initial filing

6
Understanding the Basics

• Tagging, validating generating files
• Taxonomies Extensions
• NO new information is being provided
• Technical knowledge of XML is not necessarily a
  requirement
• Focus moves from format to content
• General requirements under the current SEC program

7
Why Participate Now?

• Eliminate learning curve
• Open and flexible program
• Establish processes and controls
• Influence the development of taxonomies, tools,
  processes
• Potential for increased analyst/investor
  visibility
• Begin exploring potential benefits and future
  opportunities
• No valid reason not to!

8
Current 10-Q Process Flow
Supplemental Data
ERP
10-Q in Word
10-Q in HTML
ERP
HFM
ERP
Total Process Time 845 Hours
Review and Check
Review and Check
Edgar
10-Q in XBRL
9
Future 10-Q Process Flow
ERP
10-Q in XBRL
HFM XBRL Tagged
ERP
ERP
Edgar
Supplemental Data XBRL Tagged
Total Process Time 700 Hours
10
The Benefits - Beyond SEC Reporting

• Single source for ALL possible external reporting
• Benchmarking, peer comparisons, research
• Internal consistency across all locations
• Enhanced control significant reduction to manual
  handling/manipulation of data
• Facilitation and increased reliability of ad hoc
  data requests

11
Items for Consideration

• Current chicken and egg situation
• Continued taxonomy development and use of
  extensions
• Creation of sufficient mass
• Initiatives and acceptance by agencies beyond the
  SEC
• Attest requirements, standards and industry
  learning curve

12
Attestation

• Current standards
• do not exist
• Level and type of
• assurance to be
• required
• Our auditors
• experience
• Industry involvement
• required in advance
• of any mandate

13
Conclusion Call to Action

• There is a learning curve, however, after initial
  effort, time expended drops off significantly
• Fastest way to learn and understand XBRL is to
  jump in and start tagging
• Cost/resources should not be/are not an issue
• Benefits become more obvious with familiarity
• Critical mass is needed difficult to play ball
  with everyone on the sidelines
• Need analyst community to push on their channels
• Attestation aspect needs development