FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Plan period ended December 31, 1998 Commission File Number 1-812 UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN UNITED TECHNOLOGIES CORPORATION One Financial Plaza Hartford, Connecticut 06101 FINANCIAL STATEMENTS OF THE UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the United Technologies Corporation Represented Employee Savings Plan 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 United Technologies Corporation Represented Employee Savings Plan at December 31, 1998 and 1997, and the changes in net assets available for benefits for the period ended December 31, 1998, 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. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Hartford, Connecticut June 28, 1999 UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Net Assets Available for Benefits With Fund Information December 31, 1998 (Thousands of Dollars, except unit amounts)
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 $ - $ 200,259 $ - $ - $ 2,884 $ - $ - Russell 2000 Equity Index Fund - - 1,461 - - - - Daily Japanese Equity Index Fund - - - 126 - - - Daily Non Japanese Equity Index Fund - - - 475 - - - Government/Corporate Fixed Income Index Fund - - - - 2,351 - - Daily International Equity Index Fund - - - - 2,854 - - United Technologies Corporation Common Stock - - - - - 57,990 - Shares of respective registered investment companies - - - - - - 1,603 Investments, at contract value or cost: Beneficial interests in investment contracts, at contract value 473,892 - - - - - - Participant loans, at cost - - - - - - - Temporary investments, at cost plus accrued interest - - - - - 289 - Total Investments 473,892 200,259 1,461 601 8,089 58,279 1,603 Plan receivables 456 34 1 - 1 662 1 Total Assets 474,348 200,293 1,462 601 8,090 58,941 1,604 Liabilities: Accrued expenses - - - - - 148 - Loans payable, net - - - - - - - Total Liabilities - - - - - 148 - Net Assets Available for Benefits $ 474,348 $ 200,293 $ 1,462 $ 601 $ 8,090 $ 58,793 $ 1,604 Units of participation 7,088,290 7,401,803 122,571 47,404 2,818,953 3,226,829 51,131 Unit value $ 66.92 $ 27.06 $ 11.93 $ 12.68 $ 2.87 $ 18.22 $ 31.36 The accompanying notes are an integral part of these financial statements. UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Net Assets Available for Benefits With Fund Information (Continued) December 31, 1998 (Thousands of Dollars, except unit amounts)
Putnam Fidelity Putnam New SoGen Growth & Fund for Fidelity Low- PBHG Opportun- Interna- Income 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 18,046 4,295 6,716 2,827 4,728 6,852 692 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 18,046 4,295 6,716 2,827 4,728 6,852 692 Plan receivables 6 2 2 1 2 3 - Total Assets 18,052 4,297 6,718 2,828 4,730 6,855 692 Liabilities: Accrued expenses - - - - - - - Loans payable, net - - - - - - - Total Liabilities - - - - - - - Net Assets Available for Benefits $ 18,052 $ 4,297 $ 6,718 $ 2,828 $ 4,730 $ 6,855 $ 692 Units of participation 393,808 209,398 118,302 123,782 185,188 115,906 30,038 Unit value $ 45.84 $ 20.52 $ 56.79 $ 22.85 $ 25.54 $ 59.14 $ 23.03 The accompanying notes are an integral part of these financial statements. UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Net Assets Available for Benefits With Fund Information (Continued) December 31, 1998 (Thousands of Dollars, except unit amounts)
Templeton Templeton Developing Foreign Markets Fund A Trust A Loan Fund Total Assets: Investments, at fair value: Beneficial interests in Bankers Trust Company Pyramid: Large Capitalization Equity Index Fund $ - $ - $ - $ 203,143 Russell 2000 Equity Index Fund - - - 1,461 Daily Japanese Equity Index Fund - - - 126 Daily Non Japanese Equity Index Fund - - - 475 Government/Corporate Fixed Income Index Fund - - - 2,351 Daily International Equity Index Fund - - - 2,854 United Technologies Corporation Common Stock - - - 57,990 Shares of respective registered investment companies 1,493 695 - 47,947 Investments, at contract value or cost: Beneficial interests in investment contracts, at contract value - - - 473,892 Participant loans, at cost - - 17,896 17,896 Temporary investments, at cost plus accrued interest - - - 289 Total Investments 1,493 695 17,896 808,424 Plan receivables 1 - - 1,172 Total Assets 1,494 695 17,896 809,596 Liabilities: Accrued expenses - - - 148 Loans payable, net - - - - Total Liabilities - - - 148 Net Assets Available for Benefits $ 1,494 $ 695 $ 17,896 $ 809,448 Units of participation 177,980 67,494 17,896,480 Unit value $ 8.39 $ 10.30 $ 1.00 The accompanying notes are an integral part of these financial statements. UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Net Assets Available for Benefits With Fund Information December 31, 1997 (Thousands of Dollars, except unit amounts)
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 $ - $ 163,490 $ - $ - $ 2,830 $ - $ - Russell 2000 Equity Index Fund - - 1,836 - - - - Daily Japanese Equity Index Fund - - - 104 - - - Daily Non Japanese Equity Index Fund - - - 313 - - - Government/Corporate Fixed Income Index Fund - - - - 2,316 - - Daily International Equity Index Fund - - - - 2,716 - - United Technologies Corporation Common Stock - - - - - 41,537 - Shares of respective registered investment companies - - - - - - 1,074 Investments, at contract value or cost: Beneficial interests in investment contracts, at contract value 413,162 - - - - - - Participant loans, at cost - - - - - - - Temporary investments, at cost plus accrued interest - - - - - 624 - Total Investments 413,162 163,490 1,836 417 7,862 42,161 1,074 Plan receivables 616 195 4 2 17 172 3 Total Assets 413,778 163,685 1,840 419 7,879 42,333 1,077 Liabilities: Accrued expenses - - - - - 269 - Loans payable, net - - - - - - - Total Liabilities - - - - - 269 - Net Assets Available for Benefits $ 413,778 $ 163,685 $ 1,840 $ 419 $ 7,879 $ 42,064 $ 1,077 Units of participation 6,706,298 7,787,073 152,037 39,785 3,310,348 3,482,194 37,006 Unit value $ 61.70 $ 21.02 $ 12.10 $ 10.53 $ 2.38 $ 12.08 $ 29.09 The accompanying notes are an integral part of these financial statements. UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Net Assets Available for Benefits With Fund Information (Continued) December 31, 1997 (Thousands of Dollars, except unit amounts)
Putnam Fidelity Putnam New SoGen Growth & Fund for Fidelity Low- PBHG Opportun- Interna- Income 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 9,817 3,804 4,213 3,104 5,227 4,153 724 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 9,817 3,804 4,213 3,104 5,227 4,153 724 Plan receivables 24 9 11 7 15 13 2 Total Assets 9,841 3,813 4,224 3,111 5,242 4,166 726 Liabilities: Accrued expenses - - - - - - - Loans payable, net - - - - - - - Total Liabilities - - - - - - - Net Assets Available for Benefits $ 9,841 $ 3,813 $ 4,224 $ 3,111 $ 5,242 $ 4,166 $ 726 Units of participation 258,277 194,964 90,579 123,791 206,464 84,824 28,567 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. UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Net Assets Available for Benefits With Fund Information (Continued) December 31, 1997 (Thousands of Dollars, except unit amounts)
Templeton Templeton Developing Foreign Markets Fund A Trust A Loan Fund Total Assets: Investments, at fair value: Beneficial interests in Bankers Trust Company Pyramid: Large Capitalization Equity Index Fund $ - $ - $ - $ 166,320 Russell 2000 Equity Index Fund - - - 1,836 Daily Japanese Equity Index Fund - - - 104 Daily Non Japanese Equity Index Fund - - - 313 Government/Corporate Fixed Income Index Fund - - - 2,316 Daily International Equity Index Fund - - - 2,716 United Technologies Corporation Common Stock - - - 41,537 Shares of respective registered investment companies 1,577 721 - 34,414 Investments, at contract value or cost: Beneficial interests in investment contracts, at contract value - - - 413,162 Participant loans, at cost - - 15,663 15,663 Temporary investments, at cost plus accrued interest - - - 624 Total Investments 1,577 721 15,663 679,005 Plan receivables 5 2 - 1,097 Total Assets 1,582 723 15,663 680,102 Liabilities: Accrued expenses - - - 269 Loans payable, net - - - - Total Liabilities - - - 269 Net Assets Available for Benefits $ 1,582 $ 723 $ 15,663 $ 679,833 Units of participation 158,995 55,923 15,663,368 Unit value $ 9.95 $ 12.94 $ 1.00 The accompanying notes are an integral part of these financial statements. UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits With Fund Information Period Ended December 31, 1998 (Thousands of Dollars)
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 $ - $ 44,803 $ (13) $ 82 $ 1,454 $ 20,589 $ 98 Interest 35,735 - - - - - - Dividends - - - - - - 78 Total Investment Income 35,735 44,803 (13) 82 1,454 20,589 176 Contributions: Participants' 24,471 8,940 187 78 641 3,721 156 Employer's 7,387 2,200 39 17 185 901 37 Total Contributions 31,858 11,140 226 95 826 4,622 193 Repayments on loans 4,890 1,854 22 9 168 804 18 Deductions from net assets attributed to: Distributions to participants 23,128 7,718 69 10 327 1,916 62 Loans to participants 5,625 2,174 26 4 161 1,110 17 Administrative expenses 64 9 1 - 2 2 - Total Deductions 28,817 9,901 96 14 490 3,028 79 Net increase / (decrease) prior to transfers 43,666 47,896 139 172 1,958 22,987 308 Inter-fund transfers 17,001 (11,132) (517) 10 (1,745) (6,227) 219 Net assets transferred out of Plan (97) (156) - - (2) (31) - Net increase / (decrease) 60,570 36,608 (378) 182 211 16,729 527 Net Assets Available for Benefits December 31, 1997 413,778 163,685 1,840 419 7,879 42,064 1,077 Net Assets Available for Benefits December 31, 1998 $ 474,348 $ 200,293 $ 1,462 $ 601 $ 8,090 $ 58,793 $ 1,604 The accompanying notes are an integral part of these financial statements. UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits With Fund Information (Continued) Period Ended December 31, 1998 (Thousands of Dollars)
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 $ 2,595 $ 166 $ 918 $ (285) $ 14 $ 904 $ (68) Interest - - - - - - - Dividends 933 390 493 253 - 214 66 Total Investment Income 3,528 556 1,411 (32) 14 1,118 (2) Contributions: Participants' 1,434 442 561 321 613 636 100 Employer's 338 107 135 76 140 144 26 Total Contributions 1,772 549 696 397 753 780 126 Repayments on loans 246 56 115 40 88 97 14 Deductions from net assets attributed to: Distributions to participants 408 91 143 152 177 237 19 Loans to participants 234 45 103 48 78 77 10 Administrative expenses - - - 1 1 1 - Total Deductions 642 136 246 201 256 315 29 Net increase / (decrease) prior to transfers 4,904 1,025 1,976 204 599 1,680 109 Inter-fund transfers 3,309 (540) 520 (486) (1,110) 1,010 (143) Net assets transferred out of Plan (2) (1) (2) (1) (1) (1) - Net increase / (decrease) 8,211 484 2,494 (283) (512) 2,689 (34) Net Assets Available for Benefits December 31, 1997 9,841 3,813 4,224 3,111 5,242 4,166 726 Net Assets Available for Benefits December 31, 1998 $ 18,052 $ 4,297 $ 6,718 $ 2,828 $ 4,730 $ 6,855 $ 692 The accompanying notes are an integral part of these financial statements. UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits With Fund Information (Continued) Period Ended December 31, 1998 (Thousands of Dollars)
Templeton Templeton Developing Foreign Markets Fund A Trust A Loan Fund Total Additions to net assets attributed to: Investment Income: Net appreciation / (depreciation) in fair value of investments $ (261) $ (134) $ - $ 70,862 Interest - - 1,414 37,149 Dividends 167 15 - 2,609 Total Investment Income (94) (119) 1,414 110,620 Contributions: Participants' 196 99 - 42,596 Employer's 47 23 - 11,802 Total Contributions 243 122 - 54,398 Repayments on loans 26 17 (8,464) - Deductions from net assets attributed to: Distributions to participants 84 20 467 35,028 Loans to participants 23 15 (9,750) - Administrative expenses - - - 81 Total Deductions 107 35 (9,283) 35,109 Net increase / (decrease) prior to transfers 68 (15) 2,233 129,909 Inter-fund transfers (156) (13) - - Net assets transferred out of Plan - - - (294) Net increase / (decrease) (88) (28) 2,233 129,615 Net Assets Available for Benefits December 31, 1997 1,582 723 15,663 679,833 Net Assets Available for Benefits December 31, 1998 $ 1,494 $ 695 $ 17,896 $ 809,448 The accompanying notes are an integral part of these financial statements. UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Notes to Financial Statements NOTE 1 - DESCRIPTION OF THE PLAN General. The United Technologies Corporation (UTC) Represented Employee Savings Plan (the Plan) is a defined contribution savings plan administered by UTC. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Union represented employees of UTC, covered by collective bargaining agreements that provide for Plan participation, 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. All participants may elect, through payroll deductions, to make tax deferred contributions of between $2 per week and the maximum amount permitted by the relevant collective bargaining agreement. Certain participants, depending on their collective bargaining agreement, may also make after-tax contributions. Participant contributions, plus actual earnings thereon, are fully vested at all times under the Plan. The employer will match 50 percent of the participant's contributions, up to specified limits. Generally, employer contributions, plus actual earnings thereon, become fully vested after two years of Plan participation. Certain participants may also make limited tax-deferred or after-tax contributions to an individual medical account (IMA) or tax-deferred contributions for cost of living adjustments (COLA), where permitted. The employer will match 75 percent of the participant's IMA contribution. All contributions to an IMA will be invested 100 percent in the Income Fund and may not be withdrawn until retirement or termination. 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 UTC contributions. For the period ended December 31, 1998, approximately $11,500 of forfeitures were used to fund UTC's contributions. Trustee and Recordkeeper. All of the Plan's assets are held by Bankers Trust Company, the Plan Trustee. Fidelity Institutional Retirement Services Company performs participant account recordkeeping responsibilities. Investment Options. 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. In December of 1997, UTC approved a reverse unit split of the units of participation and the unit value of the Income Fund effective as of January 1, 1998. As a result, the units of participation and the unit value was decreased and increased, respectively, by a factor of ten. All units of participation and unit value amounts presented herein have been restated to reflect the reverse unit split. . 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 533,240 and 570,464 shares of UTC Common Stock at December 31, 1998 and 1997, respectively. See Note 6. . The INVESCO Total Return Fund, a registered investment company, 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, a registered investment company, 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, a registered investment company, principally invests in equity securities of companies that pay regular dividends to shareowners. . The Fidelity Contrafund, a registered investment company, 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, a registered investment company, 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, a registered investment company, principally invests in equity securities of companies believed to have an outlook for strong earnings growth. . The Putnam New Opportunities Fund, a registered investment company, principally invests in equity securities of companies in certain emerging industry groups. . The SoGen International Fund, Inc., a registered investment company, invests in U.S. and foreign equity, fixed income and gold-related securities and cash. . The Templeton Foreign Fund A (formerly the Templeton Foreign Fund I), a registered investment company, principally invests in equity securities of companies in developed and developing countries outside the U.S. . The Templeton Developing Markets Trust A (formerly the Templeton Developing Markets Trust I), a registered investment company, 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 vested account balances excluding IMA and COLA. 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 terminating participants. Participants 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. Distributions in UTC Common Stock for the period ended December 31, 1998 were approximately $70,800. Other. Participants who transfer to a new UTC location with a different savings plan may 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, except for benefits which 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, 1998, the Plan's interest in the Master Trust comprised 40,075,357 units of the 522,172,913 total units of participation, or 7.68%. At December 31, 1997, the Plan's interest in the Master Trust comprised 38,380,493 units of the total 534,787,672 units of participation, or 7.18%. 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 recordkeeping fees, were paid directly by the employer in 1998. 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 1998 and 1997 were 8.5% and 8.1%, 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 - TAX STATUS The Internal Revenue Service has determined and informed UTC by letter dated February 8, 1996 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. NOTE 6 - SUBSEQUENT EVENTS On April 30, 1999, the Board of Directors of UTC declared a 2 for 1 stock split in the form of a stock dividend payable May 17, 1999 to shareowners of record at the close of business on May 7, 1999. The share amounts reflected herein do not reflect the stock split. On May 4, 1999, UTC completed the sale of its UT Automotive Corporation (UTA) subsidiary to Lear Corporation. Plan participants include employees of UTA. UTA employees have the option to transfer their account balances or leave their investments in the Plan. These employees were permitted to continue making contributions to the Plan through May 31, 1999.
(Thousand of Dollars) December 31, December 31, 1998 1997 CIGNA $ 1,590,214 $ 1,456,404 Aetna 471,765 437,582 Travelers 398,146 367,509 Prudential 252,192 231,133 Metropolitan Life 1,019,272 780,096 $ 3,731,589 $ 3,272,724 Amount of the contracts allocable to the Plan $ 473,892 $ 413,162 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. UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN Dated: June 28, 1999 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. 33-26580) of United Technologies Corporation of our report dated June 28, 1999 appearing in the United Technologies Corporation Represented Employee Savings Plan's Annual Report on Form 11-K for the year ended December 31, 1998. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Hartford, Connecticut June 28, 1999