FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Plan period ended December 31, 1997 Commission File Number 1-812 UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT-REPRESENTED EMPLOYEES (Full title of the plan) UNITED TECHNOLOGIES CORPORATION One Financial Plaza Hartford, Connecticut 06101 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) FINANCIAL STATEMENTS OF THE UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT- REPRESENTED EMPLOYEES REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the UT Automotive Savings Plan for Hourly, Management-Represented Employees In our opinion, the accompanying statements of net assets available for benefits with fund information and the related statement of changes in net assets available for benefits with fund information present fairly, in all material respects, the net assets available for benefits of the UT Automotive Savings Plan For Hourly, Management-Represented Employees at December 31, 1997 and 1996, and the changes in net assets available for benefits for the period ended December 31, 1997, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The fund information in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for benefits of each fund. The fund information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. PRICE WATERHOUSE LLP Hartford, Connecticut June 26, 1998 UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information December 31, 1997
Small UTC INVESCO Company International Common Total Income Equity Stock Index Equity Index Global Stock Return Fund Fund Fund Fund Fund Fund Fund Assets: Investments, at fair value: Beneficial interests in Bankers Trust Company Pyramid: Large Capitalization Equity Index Fund $ - $ 492,470 $ - $ - $ 33,343 $ - $ - Russell 2000 Equity Index Fund - - 10,189 - - - - Daily Japanese Equity Index Fund - - - 853 - - - Daily Non Japanese Equity Index Fund - - - 2,560 - - - Government/Corporate Fixed Income Index Fund - - - - 27,280 - - Daily International Equity Index Fund - - - - 31,992 - - United Technologies Corporation Common Stock - - - - - 104,700 - Shares of respective registered investment companies - - - - - - 43,015 Investments, at contract value or cost: Beneficial interests in investment contracts, at contract value 3,777,373 - - - - - - Participant loans, at cost - - - - - - - Temporary investments, at cost plus accrued interest - - - - - 1,572 - Total Investments 3,777,373 492,470 10,189 3,413 92,615 106,272 43,015 Plan receivables 1,171 - - - - 224 - Total Assets 3,778,544 492,470 10,189 3,413 92,615 106,496 43,015 Liabilities: Accrued liabilities - - - - - 676 - Loans payable, net - - - - - - - Total Liabilities - - - - - 676 - Net Assets Available for Benefits $3,778,544 $ 492,470 $ 10,189 $ 3,413 $ 92,615 $ 105,820 $ 43,015 Units of participation 612,475 23,427 842 324 38,950 8,761 1,479 Unit value $ 6.17 $ 21.02 $ 12.10 $ 10.53 $ 2.38 $ 12.08 $ 29.09 The accompanying notes are an integral part of these financial statements. /TABLE UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information December 31, 1997
Putnam Fidelity Putnam New SoGen Growth & Fund Fidelity Low- PBHG Opportun- Interna- Income for Growth Fidelity Priced Stock Growth ities tional Portfolio and Income Contrafund Fund Fund Fund Fund, Inc. Assets: Investments, at fair value: Beneficial interests in Bankers Trust Company Pyramid: Large Capitalization Equity Index Fund $ - $ - $ - $ - $ - $ - $ - Russell 2000 Equity Index Fund - - - - - - - Daily Japanese Equity Index Fund - - - - - - - Daily Non Japanese Equity Index Fund - - - - - - - Government/Corporate Fixed Income Index Fund - - - - - - - Daily International Equity Index Fund - - - - - - - United Technologies Corporation Common Stock - - - - - - - Shares of respective registered investment companies 166,622 43,507 22,980 56,551 54,493 45,721 7,965 Investments, at contract value or cost: Beneficial interests in investment contracts, at contract value - - - - - - - Participant loans, at cost - - - - - - - Temporary investments, at cost plus accrued interest - - - - - - - Total Investments 166,622 43,507 22,980 56,551 54,493 45,721 7,965 Plan receivables - - - - - - - Total Assets 166,622 43,507 22,980 56,551 54,493 45,721 7,965 Liabilities: Accrued liabilities - - - - - - - Loans payable, net - - - - - - - Total Liabilities - - - - - - - Net Assets Available for Benefits $ 166,622 $ 43,507 $ 22,980 $ 56,551 $ 54,493 $ 45,721 $ 7,965 Units of participation 4,373 2,224 493 2,250 2,146 931 313 Unit value $ 38.10 $ 19.56 $ 46.63 $ 25.13 $ 25.39 $ 49.10 $ 25.45 The accompanying notes are an integral part of these financial statements. /TABLE UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information December 31, 1997
Templeton Templeton Developing Foreign Markets Fund I Trust I Loan Fund Total Assets: Investments, at fair value: Beneficial interests in Bankers Trust Company Pyramid: Large Capitalization Equity Index Fund $ - $ - $ - $ 525,813 Russell 2000 Equity Index Fund - - - 10,189 Daily Japanese Equity Index Fund - - - 853 Daily Non Japanese Equity Index Fund - - - 2,560 Government/Corporate Fixed Income Index Fund - - - 27,280 Daily International Equity Index Fund - - - 31,992 United Technologies Corporation Common Stock - - - 104,700 Shares of respective registered investment companies 30,483 18,525 - 489,862 Investments, at contract value or cost: Beneficial interests in investment contracts, at contract value - - - 3,777,373 Participant loans, at cost - - 214,335 214,335 Temporary investments, at cost plus accrued interest - - - 1,572 Total Investments 30,483 18,525 214,335 5,186,529 Plan receivables - - - 1,395 Total Assets 30,483 18,525 214,335 5,187,924 Liabilities: Accrued liabilities - - - 676 Loans payable, net - - - - Total Liabilities - - - 676 Net Assets Available for Benefits $ 30,483 $ 18,525 $ 214,335 $ 5,187,248 Units of participation 3,064 1,432 214,335 Unit value $ 9.95 $ 12.94 $ 1.00 The accompanying notes are an integral part of these financial statements. /TABLE UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information December 31, 1996
Income Equity Fund Fund Global Fund Loan Fund Total Assets: Investments, at fair value: Beneficial interests in Bankers Trust Company Pyramid: Government/Corporate Fixed Income Index Fund $ - $ - $ 31,943 $ - $ 31,943 Large Capitalization Equity Index Fund - 235,680 37,271 - 272,951 Daily International Equity Index Fund - - 41,351 - 41,351 Investments, at contract value or cost: Beneficial interests in investment contracts, at contract value 4,150,093 - - - 4,150,093 Participant loans, at cost - - - 187,702 187,702 Temporary investments, at cost plus accrued interest 168 - - - 168 Total Investments 4,150,261 235,680 110,565 187,702 4,684,208 Plan receivables - 1,234 244 1,121 2,599 Total Assets 4,150,261 236,914 110,809 188,823 4,686,807 Liabilities: Accrued liabilities 13,874 - 304 - 14,178 Loans payable, net (2,635) (115) (121) 1,831 (1,040) Total Liabilities 11,239 (115) 183 1,831 13,138 Net Assets Available for Benefits $4,139,022 $ 237,029 $ 110,626 $ 186,992 $4,673,669 Units of participation 724,838 15,045 53,526 186,992 Unit value $ 5.71 $ 15.75 $ 2.07 $ 1.00 The accompanying notes are an integral part of these financial statements. /TABLE UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT-REPRESENTED EMPLOYEES Statement of Changes in Net Assets Available for Benefits With Fund Information Period Ended December 31, 1997
Small UTC INVESCO Company International Common Total Income Equity Stock Index Equity Index Global Stock Return Fund Fund Fund Fund Fund Fund Fund Additions to net assets attributed to: Investment Income: Net appreciation (depreciation) in fair value of investments $ - $ 86,294 $ 1,739 $ 78 $ 12,264 $ (5,728) $ 2,033 Interest 301,805 1 - - - - - Dividends - - - - - - 1,409 Total Investment Income 301,805 86,295 1,739 78 12,264 (5,728) 3,442 Contributions: Participants' 449,277 78,964 3,474 1,404 25,393 40,924 2,405 Employer's 215,734 7,214 262 124 2,670 2,941 258 Total Contributions 665,011 86,178 3,736 1,528 28,063 43,865 2,663 Repayments on loans 82,582 3,644 - - 1,061 184 - Deductions from net assets attributed to: Distributions to participants 807,849 21,216 - - 6,524 1,752 - Loans to participants 124,440 3,137 - - 3,002 4,914 602 Administrative expenses 1,711 50 - - 43 43 - Total Deductions 934,000 24,403 - - 9,569 6,709 602 Net increase / (decrease) prior to transfers 115,398 151,714 5,475 1,606 31,819 31,612 5,503 Inter-fund transfers (475,246) 103,727 4,714 1,807 (49,830) 74,208 37,512 Assets transferred out of Plan (630) - - - - - - Net increase / (decrease) (360,478) 255,441 10,189 3,413 (18,011) 105,820 43,015 Net Assets Available for Benefits December 31, 1996 4,139,022 237,029 - - 110,626 - - Net Assets Available for Benefits December 31, 1997 $3,778,544 $ 492,470 $ 10,189 $ 3,413 $ 92,615 $ 105,820 $ 43,015 The accompanying notes are an integral part of these financial statements. /TABLE UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT-REPRESENTED EMPLOYEES Statement of Changes in Net Assets Available for Benefits With Fund Information Period Ended December 31, 1997
Putnam Fidelity Putnam New SoGen Growth & Fund Fidelity Low- PBHG Opportun- Interna- Income for Growth Fidelity Priced Stock Growth ities tional Portfolio and Income Contrafund Fund Fund Fund Fund, Inc. Additions to net assets attributed to: Investment Income: Net appreciation (depreciation) in fair value of investments $ 15,235 $ (648) $ (10) $ 2,650 $ 1,680 $ 6,155 $ (887) Interest - - - - - - - Dividends 6,162 5,215 1,873 2,736 - 958 785 Total Investment Income 21,397 4,567 1,863 5,386 1,680 7,113 (102) Contributions: Participants' 29,868 13,643 9,496 7,735 16,397 15,622 1,147 Employer's 1,341 942 449 474 877 904 121 Total Contributions 31,209 14,585 9,945 8,209 17,274 16,526 1,268 Repayments on loans 148 9 - 825 148 47 19 Deductions from net assets attributed to: Distributions to participants 427 321 - 696 306 358 - Loans to participants 266 - - 811 831 157 - Administrative expenses - - - 14 - - - Total Deductions 693 321 - 1,521 1,137 515 - Net increase / (decrease) prior to transfers 52,061 18,840 11,808 12,899 17,965 23,171 1,185 Inter-fund transfers 114,561 24,667 11,172 43,652 36,528 22,550 6,780 Assets transferred out of Plan - - - - - - - Net increase / (decrease) 166,622 43,507 22,980 56,551 54,493 45,721 7,965 Net Assets Available for Benefits December 31, 1996 - - - - - - - Net Assets Available for Benefits Deceber 31, 1997 $ 166,622 $ 43,507 $ 22,980 $ 56,551 $ 54,493 $ 45,721 $ 7,965 The accompanying notes are an integral part of these financial statements. /TABLE UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT-REPRESENTED EMPLOYEES Statement of Changes in Net Assets Available for Benefits With Fund Information Period Ended December 31, 1997
Templeton Templeton Developing Foreign Markets Fund I Trust I Loan Fund Total Additions to net assets attributed to: Investment Income: Net appreciation (depreciation) in fair value of investments $ (3,732) $ (6,083) $ - $ 111,040 Interest - - 13,835 315,641 Dividends 3,044 1,233 - 23,415 Total Investment Income (688) (4,850) 13,835 450,096 Contributions: Participants' 7,877 2,931 - 706,557 Employer's 408 126 - 234,845 Total Contributions 8,285 3,057 - 941,402 Repayments on loans 83 686 (89,436) - Deductions from net assets attributed to: Distributions to participants - - 35,979 875,428 Loans to participants 155 608 (138,923) - Administrative expenses - - - 1,861 Total Deductions 155 608 (102,944) 877,289 Net increase / (decrease) prior to transfers 7,525 (1,715) 27,343 514,209 Inter-fund transfers 22,958 20,240 - - Assets transferred out of Plan - - - (630) Net increase / (decrease) 30,483 18,525 27,343 513,579 Net Assets Available for Benefits December 31, 1996 - - 186,992 4,673,669 Net Assets Available for Benefits December 31, 1997 $ 30,483 $ 18,525 $ 214,335 $ 5,187,248 The accompanying notes are an integral part of these financial statements. /TABLE UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT-REPRESENTED EMPLOYEES Notes to Financial Statements NOTE 1 - DESCRIPTION OF THE PLAN General. The UT Automotive Savings Plan for Hourly, Management-Represented Employees (the Plan) is a defined contribution savings plan administered by United Technologies Corporation (UTC), the parent company. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Non- union hourly employees of UT Automotive Corporation (UTA) are eligible to participate in the Plan after completing at least one year of service. The following is a brief description of the Plan. For more complete information, participants should refer to the plan document which is available from UTC. Contributions and Vesting. Participants may elect to contribute, through payroll deductions, between 1 and 16 percent of their total compensation. Participant contributions, plus actual earnings thereon, are fully vested at all times under the Plan. UTA (the employer) contributes between $.05 and $.14 per compensated hour for certain of its employees. Generally, employer contributions, plus actual earnings thereon, become fully vested after five years of Plan participation. Participant Accounts. Each participant's account is credited with the participant's contributions and allocations of (a) UTC's contributions based on a percentage of the participant's contribution and (b) Plan earnings based on account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. Forfeited balances of terminated participants' nonvested amounts are used to reduce future employer contributions. For the period ended December 31, 1997, approximately $3,300 of forfeitures were used to fund employer contributions. Trustee and Recordkeeper. All of the Plan's assets are held by Bankers Trust Company, the Plan Trustee. As of January 1, 1997, Fidelity Institutional Retirement Services Company assumed the participant account recordkeeping responsibilities. Investment Options. On January 1, 1997, investment options increased to sixteen from the previous three. Participants may elect to allocate their contributions in any whole percentage among the following funds. Participants are permitted to transfer their accounts between investment funds daily in any whole percentage or whole dollar amount. The investment funds are as follows: . The Income Fund invests in contracts issued by five insurance companies. See Note 3. . The Equity Fund invests in a portfolio of common stocks replicating the Standard & Poor's Composite Index of 500 stocks (S&P 500). . The Small Company Stock Index Fund invests in a portfolio of common stocks replicating the Russell 2000 Index. . The International Equity Index Fund invests in the equities of a mix of stock markets outside the U.S. . The Global Fund invests in both U.S. and foreign investments to replicate the performance, in approximately equal portions, of three indices: the S&P 500, the EAFE Index (an international stock index of large companies in Europe, Australia and the Far East), and the Lehman Brothers Government/Corporate Index. . The UTC Common Stock Fund consists principally of 1,438 shares of UTC Common Stock at December 31, 1997. . The INVESCO Total Return Fund invests in shares of a registered investment company that principally invests in both equity and fixed or variable income securities to achieve a moderate total return from capital appreciation and current income. . The Fidelity Growth & Income Portfolio invests in shares of a registered investment company that principally invests in U.S. and foreign equity securities that pay current dividends and show potential earnings growth. . The Putnam Fund for Growth and Income invests in shares of a registered investment company that principally invests in equity securities of companies that pay regular dividends to shareowners. . The Fidelity Contrafund invests in shares of a registered investment company that principally invests in equity securities of U.S. and foreign companies believed to be undervalued or out of favor. . The Fidelity Low-Priced Stock Fund invests in shares of a registered investment company that principally invests in equity securities of companies believed to be undervalued, overlooked or out of favor, which are generally priced at $35 or less. . The PBHG Growth Fund invests in shares of a registered investment company that principally invests in equity securities of companies believed to have an outlook for strong earnings growth. . The Putnam New Opportunities Fund invests in shares of a registered investment company that principally invests in equity securities of companies in certain emerging industry groups. . The SoGen International Fund, Inc. invests in shares of a registered investment company that invests in U.S. and foreign equity, fixed income and gold-related securities and cash. . The Templeton Foreign Fund I invests in shares of a registered investment company that principally invests in equity securities of companies in developed and developing countries outside the U.S. . The Templeton Developing Markets Trust I invests in shares of a registered investment company that principally invests in equity securities of companies in developing countries. Participant Loans. Certain participants with at least two years of plan participation are allowed to borrow up to 50 percent of their account balances, excluding employer contributions. Loan amounts can range from $1,000 to $50,000 and must be repaid within 5 years. The loans are secured by the balance in the participant's account and bear interest at Bankers Trust's prime rate plus one percent. Principal and interest are paid ratably through payroll deductions. Payment of Benefits. Generally, benefits are paid in a lump sum to a terminating participant. A participant terminating due to retirement may elect to receive benefits in installments over two to twenty years. At the participant's election, the portion of a lump sum distribution attributable to the UTC Common Stock Fund may be paid in shares of UTC Common Stock instead of cash. There were no distributions in common stock for the period ended December 31, 1997. Other. Participants who transfer to a new UTC location with a different savings plan have the option of transferring their account balances in accordance with the provisions of the new savings plan. NOTE 2 - SUMMARY OF ACCOUNTING PRINCIPLES Basis of Accounting. The financial statements of the Plan are prepared under the accrual method of accounting. Benefits are recorded when paid. Master Trust. The Plan's assets are kept in a Master Trust maintained by the Trustee. Under the Master Trust agreement, the assets of certain employee savings plans of UTC and its subsidiaries are combined. Participating Plans purchase units of participation in the investment funds based on their contribution to such funds and the unit value of the applicable investment fund at the end of the trading day in which a transaction occurs. The unit value of each fund is determined at the close of each day by dividing the sum of uninvested cash, accrued income and the current value of investments by the total number of outstanding units in such funds. Income from the funds' investments increases the Plans' unit values. Distributions to participants reduce the number of participation units held by the Plans. At December 31, 1997, the Plan's interest in the Master Trust comprised 917,819 units of the 1,012,560,383 total units of participation, or 0.09%. At December 31, 1996, the Plan's interest in the Master Trust comprised 980,401 units of the total 1,062,864,802 units of participation, or 0.09%. Investment Valuation. The Income Fund's investment contracts are stated at contract value which represents contributions plus earnings, less Plan withdrawals. All other funds are stated at fair value, as determined by the Trustee, typically by reference to published market data. Plan Expenses. Plan administrative expenses, including Trustee and recordkeeper fees were paid directly by the employer in 1997. The employer also paid certain investment management fees for the Bankers Trust managed funds. All other administrative and investment expenses were paid out of Plan assets. Use of Estimates. The preparation of financial statements requires UTC to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates. NOTE 3 - INVESTMENT CONTRACTS Under these contracts, each insurance company guarantees repayment in full of the principal amount invested plus interest credited at a fixed rate for a specified period. Interest is credited to each contract based on an annual interest rate set each year by the individual insurance companies. This rate, which differs among contracts, takes into account any difference between prior year credited interest and the actual amount of investment earnings allocable to the contract in accordance with the established allocation procedures of the insurance company. The interest rates earned for 1997 and 1996 were 8.1% and 7.5%, respectively. The following is a summary of the investment contracts held in the Income Fund and the portion allocable to the Plan: NOTE 4 - PLAN TERMINATION Although it has not expressed any intent to do so, UTC has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. NOTE 5 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following are reconciliations of net assets available for benefits and benefits paid from the financial statements to the Form 5500:
(Thousands of Dollars) December 31, December 31, 1997 1996 CIGNA $ 1,456,404 $ 1,512,307 Aetna 437,582 457,815 Travelers 367,509 388,845 Prudential 231,133 236,966 Metropolitan Life 780,096 782,764 $ 3,272,724 $ 3,378,697 Amount of the contracts allocable to the Plan $ 3,777 $ 4,150
December 31, 1997 1996 Net assets available for benefits per the financial statements $5,187,248 $4,673,669 Amounts allocated to participant withdrawals - (142,522) Net assets available for benefits per Form 5500 $5,187,248 $4,531,147 Amounts allocated to participant withdrawals are recorded on Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date.
Year Ended December 31, 1997 Benefits paid to participants per the financial statements $ 875,428 Add: Amounts allocated to participant withdrawals at December 31, 1997 - Less: Amounts allocated to participant withdrawals at December 31, 1996 (142,522) Benefits paid to participants per Form 5500 $ 732,906 NOTE 6 - TAX STATUS The Internal Revenue Service has determined and informed UTC by letter dated February 27, 1998 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letters. However, the Plan administrator and tax counsel believe that the Plan is designed and currently being operated in compliance with the applicable requirements of the IRC. SIGNATURES The Plan (or other persons who administer the employee benefit plan), pursuant to the requirements of the Securities Exchange Act of 1934, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. UT AUTOMOTIVE SAVINGS PLAN FOR HOURLY, MANAGEMENT-REPRESENTED EMPLOYEES Dated: June 26, 1998 By: /s/ Daniel P. O'Connell Daniel P. O'Connell Corporate Director, Employee Benefits and Human Resources Systems United Technologies Corporation Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-18743) of United Technologies Corporation of our report dated June 26, 1998 appearing in the UT Automotive Savings Plan for Hourly, Management-Represented Employees' Annual Report on Form 11-K for the year ended December 31, 1997. PRICE WATERHOUSE LLP Hartford, Connecticut June 26, 1998