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 UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES UNITED TECHNOLOGIES CORPORATION One Financial Plaza Hartford, Connecticut 06101
FINANCIAL STATEMENTS OF THE UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the UTC 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 UTC Savings Plan For Hourly Management-Represented Employees 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
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information December 31, 1998 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 $ - $ 869,825 $ - $ - $ 42,826 $ - $ - Russell 2000 Equity Index Fund - - 22,461 - - - - Daily Japanese Equity Index Fund - - - 2,125 - - - Daily Non Japanese Equity Index Fund - - - 7,982 - - - Government/Corporate Fixed Income Index Fund - - - - 34,904 - - Daily International Equity Index Fund - - - - 42,374 - - United Technologies Corporation Common Stock - - - - - 266,997 - Shares of respective registered investment companies - - - - - - 68,399 Investments, at contract value or cost: Beneficial interests in investment contracts, at contract value 4,798,401 - - - - - - Participant loans, at cost - - - - - - - Temporary investments, at cost plus accrued interest - - - - - 1,331 - Total Investments 4,798,401 869,825 22,461 10,107 120,104 268,328 68,399 - Plan receivables 3,752 - - - - 2,997 - Total Assets 4,802,153 869,825 22,461 10,107 120,104 271,325 68,399 Liabilities: Accrued expenses - - - - - 684 - Loans payable, net - - - - - - - Total Liabilities - - - - - 684 - Net Assets Available for Benefits $4,802,153 $ 869,825 $ 22,461 $ 10,107 $ 120,104 $ 270,641 $ 68,399 Units of participation 71,760 32,144 1,883 797 41,848 14,854 2,181 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.
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information (Continued) December 31, 1998 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 341,591 99,336 119,070 69,652 80,045 144,300 7,180 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 341,591 99,336 119,070 69,652 80,045 144,300 7,180 Plan receivables - - - - - - - Total Assets 341,591 99,336 119,070 69,652 80,045 144,300 7,180 Liabilities: Accrued expenses - - - - - - - Loans payable, net - - - - - - - Total Liabilities - - - - - - - Net Assets Available for Benefits $ 341,591 $ 99,336 $ 119,070 $ 69,652 $ 80,045 $ 144,300 $ 7,180 Units of participation 7,452 4,841 2,097 3,048 3,134 2,440 312 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.
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information (Continued) December 31, 1998 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 $ - $ - $ - $ 912,651 Russell 2000 Equity Index Fund - - - 22,461 Daily Japanese Equity Index Fund - - - 2,125 Daily Non Japanese Equity Index Fund - - - 7,982 Government/Corporate Fixed Income Index Fund - - - 34,904 Daily International Equity Index Fund - - - 42,374 United Technologies Corporation Common Stock - - - 266,997 Shares of respective registered investment companies 34,931 17,314 - 981,818 Investments, at contract value or cost: Beneficial interests in investment contracts, at contract value - - - 4,798,401 Participant loans, at cost - - 256,444 256,444 Temporary investments, at cost plus accrued interest - - - 1,331 Total Investments 34,931 17,314 256,444 7,327,488 Plan receivables - - - 6,749 Total Assets 34,931 17,314 256,444 7,334,237 Liabilities: Accrued expenses - - - 684 Loans payable, net - - - - Total Liabilities - - - 684 Net Assets Available for Benefits $ 34,931 $ 17,314 $ 256,444 $ 7,333,553 Units of participation 4,163 1,681 256,444 Unit value $ 8.39 $ 10.30 $ 1.00 The accompanying notes are an integral part of these financial statements.
UTC 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 expenses - - - - - 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 61,248 23,427 842 324 38,950 8,761 1,479 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.
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information (Continued) 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 expenses - - - - - - - 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.
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information (Continued) December 31, 1997 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 $ - $ - $ - $ 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 expenses - - - 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.
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information December 31, 1998 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 $ - $ 166,849 $ (722) $ 1,100 $ 19,926 $ 72,328 $ 3,809 Interest 342,643 - - - - - - Dividends - - - - - - 3,153 Total Investment Income 342,643 166,849 (722) 1,100 19,926 72,328 6,962 Contributions: Participants' 558,419 171,381 12,878 4,065 27,558 98,722 14,488 Employer's 528,834 72,220 1,956 291 3,717 22,056 1,658 Total Contributions 1,087,253 243,601 14,834 4,356 31,275 120,778 16,146 Repayments on loans 99,917 12,847 138 52 2,647 3,936 374 Deductions from net assets attributed to: Distributions to participants 344,665 16,666 28 51 6,322 8,036 411 Loans to participants 120,704 32,498 801 122 5,802 7,065 1,601 Administrative expenses 2,336 305 - 43 154 8 43 Total Deductions 467,705 49,469 829 216 12,278 15,109 2,055 Net increase / (decrease) prior to transfers 1,062,108 373,828 13,421 5,292 41,570 181,933 21,427 Inter-fund transfers (30,634) 3,527 (1,149) 1,402 (14,081) (17,112) 3,957 Assets transferred out of Plan (7,865) - - - - - - Net increase / (decrease) 1,023,609 377,355 12,272 6,694 27,489 164,821 25,384 Net Assets Available for Benefits December 31, 1997 3,778,544 492,470 10,189 3,413 92,615 105,820 43,015 Net Assets Available for Benefits December 31, 1998 $4,802,153 $ 869,825 $ 22,461 $ 10,107 $ 120,104 $ 270,641 $ 68,399 The accompanying notes are an integral part of these financial statements.
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information (Continued) December 31, 1998 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 $ 50,149 $ 2,035 $ 12,301 $ (4,709) $ 1,401 $ 17,251 $ (702) Interest - - - - - - - Dividends 16,426 8,324 8,648 5,209 - 4,322 620 Total Investment Income 66,575 10,359 20,949 500 1,401 21,573 (82) Contributions: Participants' 79,168 26,929 49,882 20,252 30,747 60,331 3,103 Employer's 11,960 4,335 3,076 2,139 4,274 6,973 544 Total Contributions 91,128 31,264 52,958 22,391 35,021 67,304 3,647 Repayments on loans 3,282 1,081 1,699 893 1,012 174 97 Deductions from net assets attributed to: Distributions to participants 17,344 700 1,105 125 2,051 2,417 5 Loans to participants 2,132 1,986 1,582 335 77 75 339 Administrative expenses - - 39 8 8 11 - Total Deductions 19,476 2,686 2,726 468 2,136 2,503 344 Net increase / (decrease) prior to transfers 141,509 40,018 72,880 23,316 35,298 86,548 3,318 Inter-fund transfers 33,460 15,811 23,210 (10,215) (9,746) 12,031 (4,103) Assets transferred out of Plan - - - - - - - Net increase / (decrease) 174,969 55,829 96,090 13,101 25,552 98,579 (785) Net Assets Available for Benefits December 31, 1997 166,622 43,507 22,980 56,551 54,493 45,721 7,965 Net Assets Available for Benefits December 31, 1998 $ 341,591 $ 99,336 $ 119,070 $ 69,652 $ 80,045 $ 144,300 $ 7,180 The accompanying notes are an integral part of these financial statements.
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES Statement of Net Assets Available for Benefits With Fund Information (Continued) December 31, 1998 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 $ (5,915) $ (3,987) $ - $ 331,114 Interest - - 19,798 362,441 Dividends 3,518 361 - 50,581 Total Investment Income (2,397) (3,626) 19,798 744,136 Contributions: Participants' 10,368 4,224 - 1,172,515 Employer's 882 199 - 665,114 Total Contributions 11,250 4,423 - 1,837,629 Repayments on loans 253 326 (128,728) - Deductions from net assets attributed to: Distributions to participants - - 24,714 424,640 Loans to participants 399 235 (175,753) - Administrative expenses - - - 2,955 Total Deductions 399 235 (151,039) 427,595 Net increase / (decrease) prior to transfers 8,707 888 42,109 2,154,170 Inter-fund transfers (4,259) (2,099) - - Assets transferred out of Plan - - - (7,865) Net increase / (decrease) 4,448 (1,211) 42,109 2,146,305 Net Assets Available for Benefits December 31, 1997 30,483 18,525 214,335 5,187,248 Net Assets Available for Benefits December 31, 1998 $ 34,931 $ 17,314 $ 256,444 $ 7,333,553 The accompanying notes are an integral part of these financial statements.
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES Notes to Financial Statements NOTE 1 - DESCRIPTION OF THE PLAN General. The UTC Savings Plan for Hourly Management-Represented Employees (formerly the UT Automotive Savings Plan for Hourly Management-Represented Employees) (the Plan), is a defined contribution savings plan administered by United Technologies Corporation (UTC). It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). During 1998, non- union hourly employees of certain divisions of Carrier and UT Automotive Corpor- ation (UTA) were 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. As described in Note 6, UTC sold its UTA subsidiary on May 4, 1999. 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. Carrier and UTA (the Employer) contribute specified amounts to the Plan in accordance with the terms outlined in the respective employment agreements. Generally, the Employer's contributions, plus actual earnings thereon, become fully vested after two 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, 1998 approximately $2,900 of forfeitures were used to fund Employer'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 2,455 and 1,438 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 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 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. Distributions in UTC Common Stock for the period ended December 31,1998 were approximately $1,400. 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 451,079 units of the 522,172,913 total units of participation, or 0.09%. At December 31, 1997, the Plan's interest in the Master Trust comprised 366,592 units of the total 534,787,672 units of participation, or 0.07%. 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 proce- dures 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: December 31, December 31, 1998 1997 CIGNA $ 1,590,214,600 $ 1,456,403,738 Aetna 471,765,293 437,582,101 Travelers 398,145,628 367,508,974 Prudential 252,192,024 231,133,416 Metropolitan Life 1,019,271,695 780,096,192 $ 3,731,589,240 $ 3,272,724,421 Amount of the contracts allocable to the Plan $ 4,798,401 $ 3,777,373 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 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 letter. 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 During 1998, UTC approved the merger of certain defined contribution plans of Tyler Refrigeration Corporation (a subsidiary of Carrier Corporation) into the Plan effective January 1, 1999. Participants of the former Tyler Refrigeration Corporation defined contribution plans are eligible to participate in the Plan effective January 1, 1999. On February 26, 1999, approximately $25,300,000 of net assets was transferred into the Plan. 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 its sale of UTA to Lear Corporation. 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.
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. UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES 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. 333-18743) of United Technologies Corporation of our report dated June 28, 1999 appearing in the UTC Savings Plan for Hourly, Management-Represented Employees Annual Report on Form 11-K for the year ended December 31, 1998. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Hartford, Connecticut June 28, 1999