FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C.
20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period
from____________________________to__________________________
Commission file number 1-812
UNITED TECHNOLOGIES CORPORATION
DELAWARE 06-0570975
United Technologies Building, Hartford, Connecticut 06101
(203) 728-7000
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X . No .
At March 31, 1994 there were 126,946,084 shares of Common Stock outstanding.
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONTENTS OF QUARTERLY REPORT ON FORM 10-Q
Quarter Ended March 31, 1994
Page
Part I - Financial Information
Item 1. Financial Statements:
Condensed Consolidated Statement of
Operations for the three months ended 1
March 31, 1994 and 1993
Condensed Consolidated Balance Sheet at March
31, 1994 and December 31, 1993 2
Condensed Consolidated Statement of Cash
Flows for the three months ended March 31, 3
1994 and 1993
Notes to Condensed Consolidated Financial 4
Statements
Report of Independent Accountants 6
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Position 7
Part II - Other Information
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
In Millions of Dollars (except per share amounts) 1994 1993
Revenues:
Product sales $ 3,782 $ 3,744
Service sales 963 981
Financing revenues and other income, net 93 139
4,838 4,864
Costs and expenses:
Cost of products sold 3,126 3,129
Cost of services sold 609 620
Research and development 240 283
Selling, general and administrative 603 627
Interest 56 68
4,634 4,727
Income before income taxes and minority interests 204 137
Income taxes 75 56
Minority interests 23 17
Net Income $ 106 $ 64
Preferred Stock Dividend Requirement $ 11 $ 11
Earnings Applicable to Common Stock $ 95 $ 53
Per share of Common Stock:
Primary earnings $ .73 $ .43
Fully diluted earnings $ .71 $ .42
Dividends $ .45 $ .45
Average shares outstanding (in thousands):
Primary 129,321 124,823
Fully diluted 141,942 137,680
See Accompanying Notes
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UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
March 31, December 31,
In Millions of Dollars 1994 1993
Assets
Cash and short-term cash investments $ 399 $ 421
Accounts receivable 3,011 2,981
Future income tax benefits 736 794
Inventories and contracts in progress, net 3,432 3,153
Other current assets 299 357
Total Current Assets 7,877 7,706
Fixed assets 9,907 9,796
Less - accumulated depreciation (5,394) (5,231)
4,513 4,565
Other assets 3,264 3,347
Total Assets $ 15,654 $ 15,618
Liabilities and Shareowners' Equity
Short-term debt $ 1,149 $ 1,020
Accounts payable 1,525 1,815
Accrued liabilities 2,967 2,965
Accrued restructuring costs 222 245
Other current liabilities 936 875
Total Current Liabilities 6,799 6,920
Future income taxes payable 173 177
Long-term debt 1,937 1,939
Other long-term liabilities 2,931 2,808
Series A ESOP Convertible Preferred Stock 919 822
ESOP deferred charge and note receivable (740) (646)
179 176
Shareowners' Equity:
Common Stock 2,119 2,075
Treasury stock (677) (677)
Retained earnings 2,504 2,466
Deferred foreign currency translation adjustments (272) (227)
Minimum pension liability adjustment (39) (39)
3,635 3,598
Total Liabilities and Shareowners' Equity $ 15,654 $ 15,618
See Accompanying Notes
2
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
In Millions of Dollars 1994 1993
Cash flows from operating activities:
Net income $ 106 $ 64
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation and amortization 204 200
(Increase) decrease in:
Accounts receivable 78 (207)
Inventories, net of progress payments (180) (131)
Increase (decrease) in:
Accounts and taxes payable and accrued
liabilities (445) (505)
Future income taxes payable and future income
tax benefits 61 77
Advances on sales contracts 114 23
Other, net 74 93
Net Cash Flows from Operating Activities 12 (386)
Cash flows from investing activities:
Purchases of fixed assets (128) (169)
(Increase) decrease in customer financing
assets, net 9 (52)
Other, net 6 32
Net Cash Flows from Investing Activities (113) (189)
Cash flows from financing activities:
Issuance of long-term debt 8 -
Repayments of long-term debt (12) (100)
Increase in short-term borrowings, net 132 748
Dividends paid on Common and ESOP Preferred
Stocks (68) (66)
Other, net 36 (3)
Net Cash Flows from Financing Activities 96 579
Effect of foreign exchange rate changes on cash and
short-term cash investments (17) (7)
Net Decrease in Cash and Short-Term Cash
Investments (22) (3)
Cash and Short-Term Cash Investments, Beginning of
year 421 354
Cash and Short-Term Cash Investments, End of period $ 399 $ 351
Supplemental Disclosure of Cash Flow Information:
Interest paid, net of amounts capitalized $ 34 $ 40
Income taxes paid, net of refunds 63 79
See Accompanying Notes
3
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The condensed consolidated financial statements at March 31, 1994 and for the
three-month periods ended March 31, 1994 and 1993 are unaudited, but in the
opinion of the Corporation include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results for the
interim periods. Certain 1993 amounts have been reclassified to conform with
the presentation at March 31, 1994.
In January 1994, the Corporation issued 1.4 million additional Series A
Convertible Preferred shares to the ESOP. As required, these shares will be
accounted for under the recently issued AICPA Statement of Position (SOP) 93-6,
"Employers' Accounting for Employee Stock Ownership Plans," and will be
considered outstanding as they are committed to employee accounts. The
Corporation is considering adopting SOP 93-6 relative to its previously issued
ESOP Convertible Preferred shares which is optional under the SOP.
While there has been no significant change in the Corporation's material
contingencies during 1994, the matters previously described in Note 13 of Notes
to Financial Statements in the Corporation's Annual Report on Form 10K for
calendar year 1993 are summarized below.
The Corporation extends performance and operating cost guarantees, which are
beyond its normal warranty and service policies, for extended periods on some of
its products, particularly commercial aircraft engines. Liability under such
guarantees is contingent upon future product performance and durability. The
Corporation has accrued its estimated liability that may result under these
guarantees.
The Corporation has been identified as a potentially responsible party under
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA" or Superfund) for environmental remediation at 84 federal Superfund
sites, many of which relate to formerly-owned businesses. Additionally, the
Corporation is potentially responsible for remediation under federal, state
and/or local regulations at other sites. The Corporation has adequately
provided for its share of future remediation and related expenditures at
Superfund and other known sites for which it may have some remediation
responsibility.
The Corporation has instituted legal proceedings against its insurers seeking
insurance coverage for remediation and related expenditures. These proceedings
are expected to last several years. As no prediction can be made as to the
outcome of these proceedings, potential insurance reimbursements are not
recorded. The above uncertainties notwithstanding, the Corporation believes
that expenditures necessary to comply with the present regulations governing
environmental protection will not have a material effect upon its capital
expenditures, competitive position, financial position or results of operations.
The Corporation is now and believes that, in light of the current government
contracting environment, it will be the subject of one or more government
investigations. If the Corporation or one of its business units were charged
with wrongdoing as a result of any of these investigations, the Corporation or
one of its business units could be suspended from bidding on or receiving awards
of new government contracts pending the completion of legal proceedings. If
convicted or found liable, the Corporation could be fined and debarred from new
government contracting for a period generally not to exceed three years. Any
contracts found to be tainted by fraud could be voided by the Government.
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UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
The Corporation also has other commitments and contingent liabilities related
to legal proceedings and matters arising out of the normal course of business.
Management believes that resolution of these matters will not have a material
adverse effect upon either results of operations, cash flows, or financial
position of the Corporation.
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UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
With respect to the unaudited condensed consolidated financial information of
United Technologies Corporation for the three-month periods ended March 31, 1994
and 1993, Price Waterhouse reported that they have applied limited procedures in
accordance with professional standards for a review of such information.
However, their separate report dated April 16, 1994 appearing below, states that
they did not audit and they do not express an opinion on that unaudited
condensed consolidated financial information. Price Waterhouse has not carried
out any significant or additional audit tests beyond those which would have been
necessary if their report had not been included. Accordingly, the degree of
reliance on their report on such information should be restricted in light of
the limited nature of the review procedures applied. Price Waterhouse is not
subject to the liability provisions of section 11 of the Securities Act of 1933
for their report on the unaudited condensed consolidated financial information
because that report is not a "report" or a "part" of the registration statement
prepared or certified by Price Waterhouse within the meaning of sections 7 and
11 of the Act.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
United Technologies Corporation
We have reviewed the accompanying condensed consolidated statement of
operations of United Technologies Corporation and consolidated subsidiaries for
the three-month periods ended March 31, 1994 and 1993, the condensed
consolidated statement of cash flows for the three months ended March 31, 1994
and 1993, and the condensed consolidated balance sheet as of March 31, 1994.
This financial information is the responsibility of the company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial information for it to be in
conformity with generally accepted accounting principles.
We previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1993, and the
related consolidated statements of operations, of cash flows and of changes in
shareowners' equity for the year then ended (not presented herein), and in our
report dated January 26, 1994, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of December 31, 1993,
when read in conjunction with the consolidated financial statements from which
it has been derived, is fairly stated in all material respects in relation
thereto.
PRICE WATERHOUSE
Hartford, Connecticut
April 16, 1994
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UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL POSITION
BUSINESS ENVIRONMENT
The Corporation's major business units serve commercial property and
residential housing, government and commercial aerospace, and automotive
manufacturing customers. Like many businesses, these operations are
increasingly affected by global, as well as regional, economic cycles. While
the U.S. economy continues to strengthen, the results of key international
economies are mixed and are expected to continue to exert a negative influence
on the Corporation's results of operations in the near term.
U.S. residential housing starts continue to increase, up 14% over the same
period in 1993, however, commercial construction starts remain weak. U.S.
commercial vacancy rates have improved only marginally from the 1992 peak of
18%. Construction activity in Europe and Japan remains weak while activity in
China and other Pacific Rim countries continues to strengthen.
Although several domestic airlines have begun to record operating profits for
the first time in several years, the commercial airline industry continues to be
adversely affected by and respond to global market weakness. The financial
performance of the Corporation's Pratt & Whitney segment and, to a lesser
extent, the Flight Systems segment is directly correlated to the commercial
aerospace industry. The Pratt & Whitney segment is a major supplier of
commercial aircraft engines and spare parts. The Flight Systems segment,
through Hamilton Standard, provides fuel and environmental control systems and
propellers for commercial aircraft. While the order rates for commercial
aircraft engine spare parts have shown recent improvement, new commercial
aircraft volumes continue to decrease.
The U.S. Defense industry continues to experience significant downsizing, and
further consolidation within the industry is expected. As a result, the
Corporation has continued to reduce its reliance on U.S. Defense contracts over
the past few years. This trend has been partially offset by increased foreign
military sales. Management believes the Corporation is well positioned as a
major supplier for key domestic and foreign defense programs that will be
important to military needs in the 1990's and beyond.
North American car and light truck production increased 12% (380,000 units)
in the first three months of 1994 over the comparable period in 1993. Although
slightly improved, the European market continues to be adversely affected by the
lingering recession in Europe and is expected to underperform the North American
market in the near future.
In the first quarter of 1994, certain revisions were made in the
Corporation's segment reporting. The Corporation's USBI and Chemical Systems
businesses have been reclassified into the Pratt & Whitney segment from the
Flight Systems segment. In addition, the non-UT Automotive portion of the
Automotive segment, a small amount representing the remainder of the former
Industrial Products segment, and the Other segment have been reclassified to
Financing Revenues and Other Income. These segment reporting changes are
intended to align external reporting with the manner in which the operating
units are managed and measured from an internal profitability perspective.
Previously reported segment information has been restated to reflect these
changes.
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UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
RESULTS OF OPERATIONS
Three Months Ended
March 31,
(In Millions of Dollars) 1994 1993
Product sales $ 3,782 $ 3,744
Service sales 963 981
Financing revenues and other income, net 93 139
Consolidated revenues in the first three months of 1994 remained essentially
unchanged from the comparable period of 1993. Increases in sales volumes in the
Carrier and Automotive segments and at Sikorsky were substantially offset by the
impact of continuing reductions in commercial aerospace volumes in the Pratt &
Whitney segment and reductions in volumes and service sales at Hamilton
Standard. The strengthening U.S. dollar negatively impacted both product and
service sales in the quarter ended March 31, 1994. 1993 first quarter other
income includes a $75 million participation fee related to an increase in one
partner's interest in the PW4000 engine program.
Revenues for the Corporation's principal business segments for the three-
month periods ended March 31, 1994 and 1993 and analysis of the variations for
1994 compared to 1993 follow:
Three Months Ended
March 31,
(In Millions of Dollars) 1994 1993
Pratt & Whitney $ 1,360 $ 1,478
Flight Systems 806 834
Carrier 1,012 938
Otis 1,054 1,058
Automotive 613 566
Pratt & Whitney segment revenues during the 1994 first quarter were $118
million (8%) lower than the comparable 1993 period. The impact of significant
reductions in large commercial and small gas turbine engine shipments was
partially offset by increases in commercial spare parts sales and government
engine shipments. The average monthly commercial spare parts order rate during
the first three months of 1994 was approximately $140 million and exceeded the
average monthly rate for all of 1993 by approximately 13%.
First quarter 1994 segment revenues in the Flight Systems segment decreased
$28 million (3%) from the corresponding quarter of 1993. Helicopter revenues
increased in 1994 over 1993 primarily as a result of higher aircraft volumes.
Increased deliveries of Black Hawk helicopters to the U.S. Government during
1994 replaced the effect of those sold to the Turkish government in 1993. This
increase was more than offset by reductions in commercial aerospace volumes at
Hamilton Standard.
Carrier segment revenues increased $74 million (8%) in the first quarter of
1994 over the same period in 1993. Higher revenues in North America and the
8
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
Asia-Pacific region as well as Carrier's Transicold business were partially
offset by the continued revenue decline in Europe and the unfavorable
translation impact of the stronger U.S. dollar.
Otis first quarter segment revenues were essentially the same in both 1994
and 1993. Revenue increases in the Pacific Rim were offset by volume
reductions in Europe and the $38 million negative translation impact of the
stronger U.S. dollar.
Automotive segment revenues during the first three months of 1994 exceeded
the comparable period of 1993 by $47 million (8%) primarily as a result of
increased North American volumes and increased European market penetration.
North American car and light truck production increased 12% (380,000 units) in
the first three months of 1994 over the same period in 1993. The effect of
increased volumes in Europe was more than offset by the translation impact of
the stronger U.S. dollar.
Three Months Ended
March 31,
(In Millions of Dollars) 1994 1993
Cost of products sold $ 3,126 $ 3,129
Product margin % 17.3% 16.4%
Cost of services sold 609 620
Service margin % 36.8% 36.8%
Operating profits in the Corporation's principal business segments for the
three-month periods ended March 31, 1994 and 1993 and analysis of the variations
for 1994 compared to 1993 are presented below.
Three Months Ended
March 31,
(In Millions of Dollars) 1994 1993
Pratt & Whitney $ 84 $ 24
Flight Systems 47 71
Carrier 18 8
Otis 97 94
Automotive 44 37
First quarter 1994 Pratt & Whitney segment operating profits increased $60
million over the depressed level of $24 million in 1993. 1993 first quarter
results also included a $75 million participation fee on the PW4000 engine
program. Pratt's improved results were primarily attributable to higher
commercial engine spare parts sales, higher government engine shipments, lower
spending on research and development, and continued cost improvements.
Flight Systems segment operating profits in the first quarter of 1994
decreased $24 million (34%) from the first quarter of 1993. Improved operating
performance at Sikorsky, primarily from increased helicopter deliveries, was
more than offset by lower commercial aerospace volumes and continued downsizing
at Hamilton Standard, as well as lower results at Norden.
First quarter 1994 segment operating profits in the Carrier segment improved
$10 million from the first quarter of 1993. Improved results in North America
and the Asia-Pacific region as well as Carrier's Transicold business were
partially offset by lower results in Europe as a result of the continuing
recession.
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UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
Otis segment operating profits in the first three months of 1994 increased $3
million (3%) over 1993 on essentially unchanged revenues. Excluding the
translation impact of the stronger U.S. dollar,
operating profits increased $10 million. Operating profits improved in North
America, the Pacific Rim, and in Europe before the negative impact of currency
translation.
Automotive segment operating profits in the first quarter of 1994 were $7
million higher (19%) than the first quarter of 1993 mainly as a result of
increased North American industry volume and European market penetration. These
improvements were partially offset by the unfavorable impact of currency
translation.
Research and development expenditures decreased $50 million (17%) in the
first quarter of 1994 before the reductions described below. The decrease
occurred mainly at Pratt & Whitney where the PW4084 and PW4168 commercial engine
development programs are reaching maturity. Billings to participants for
certain advanced commercial aircraft engine expenditures totaled $12 million and
$19 million for the first quarters of 1994 and 1993, respectively. These
billings have been applied as a reduction of research and development expenses.
Selling, general and administrative expenses for the first quarter of 1994
decreased $24 million (4%) from the corresponding 1993 quarter. The decrease
results principally from the effects of the Corporation's restructuring efforts
initiated in the first quarter of 1992 which have increasingly reduced ongoing
general and administrative expenses.
Interest expense decreased $12 million (18%) in the first quarter of 1994
primarily as a result of the Corporation's cash management and debt reduction
programs.
10
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
FINANCIAL POSITION
Selected financial data as of March 31, 1994, December 31, 1993 and March 31,
1993 follows:
March 31, December 31, March 31,
(Millions of Dollars) 1994 1993 1993
Net working capital $ 1,078 $ 786 $ 1,009
Current asset ratio 1.2 to 1 1.1 to 1 1.1 to 1
Short-term debt:
Bank borrowings $ 282 $ 279 $ 326
Commercial paper 631 501 799
Long-term debt - current 236 240 411
$ 1,149 $ 1,020 $ 1,536
Long-term debt:
ESOP debt guarantee $ 517 $ 517 $ 553
Capital lease obligations 375 379 387
All other 1,045 1,043 1,312
$ 1,937 $ 1,939 $ 2,252
Debt to total capitalization 46% 45% 53%
Cash inflow from operations was $12 million during the first quarter of 1994
as compared to a $386 million cash outflow from operations during the
corresponding period of 1993. The improvement results primarily from improved
operating results and working capital reductions. Management believes that its
existing cash position and other available sources of liquidity are sufficient
to meet current and anticipated requirements for the foreseeable future.
The Corporation's ratio of debt to total capitalization at March 31, 1994
decreased seven percentage points from the same date one year earlier as a
result of operating results and improved cash flow. Due to seasonal impacts
affecting the Corporation's businesses, the March 31, 1994 debt to total
capitalization ratio is slightly higher than the ratio at the end of the prior
year.
In April 1994, the Corporation received approximately $125 million from the
sale of its equity share holdings in Westland Group plc. In the second quarter
1994, the Corporation will report a gain, after tax, of approximately $50
million as a result of the sale. As part of ongoing continuous improvement,
management is considering volume-related downsizing and other actions this year,
principally in the Corporation's aerospace businesses which, if required, could
result in charges in the range of the gain. These actions will not materially
alter the Corporation's estimated employment levels previously announced.
As previously disclosed, the Corporation filed a registration statement with
the Securities and Exchange Commission on January 19, 1994 pursuant to its plan
to sell to the public a 40 to 44 percent equity interest in UT Automotive, the
Corporation's Automotive segment. The Corporation has postponed the offering of
17.8 million shares of UT Automotive in light of current market conditions. The
company will continue to monitor the market.
11
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
The Board of Directors has authorized management, at its discretion and
depending on market conditions, to acquire from time to time up to 4.5 million
shares of UTC Common Stock through open market transactions. The shares
purchased under this program are intended to offset the dilution resulting from
the issuance of shares of stock under the Corporation's existing and future
stock-based employee compensation and benefit programs. During the past two
years, shares issued in support of such programs have averaged approximately two
million annually.
For a description of the Corporation's material contingencies, refer to Notes
to Condensed Consolidated Financial Statements at pages 4 and 5 of this report
and Part I, Item 3 - Legal Proceedings of the Corporation's Annual Report on
Form 10K for calendar year 1993.
12
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
Part II - Other Information
Item 1. Legal Proceedings
There has been no material change in legal proceedings during the first
quarter of 1994. (For a description of previously reported legal proceedings,
refer to Part I, Item 3 - Legal Proceedings of the Corporation's Annual Report
on Form 10K for calendar year 1993.)
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(11) Computation of per share earnings
(12) Computation of ratio of earnings to fixed charges
(15) Letter re unaudited interim financial information
(b) No Reports on Form 8-K were filed during the quarter ended March 31,
1994.
13
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED TECHNOLOGIES CORPORATION
Dated: May 4, 1994 By:
Stephen F. Page
Executive Vice President and
Chief Financial Officer
Dated: May 4, 1994 By:
George E. Minnich
Vice President and Controller
Dated: May 4, 1994 By:
William H. Trachsel
Vice President and Secretary
14
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit 11 - Computation of per share earnings
Exhibit 12 - Computation of ratio of earnings to fixed charges
Exhibit 15 - Letter re unaudited interim financial information
15
Exhibit 11
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
Three Months Ended
March 31,
In Millions of Dollars (except per share amounts) 1994 1993
Earnings applicable to Common Stock $ 95 $ 53
Add back of Common Stock dividend upon assumed
conversion of ESOP Preferred Stock 6 5
Fully diluted net earnings for period $ 101 $ 58
Average number of common shares outstanding during
period (four month-end average) 129,320,635 124,823,255
Fully diluted average number of common shares
outstanding, assuming all outstanding convertible
securities had been converted on the dates of issue 141,941,730 137,680,483
Primary earnings per common share $ .73 $ .43
Fully diluted earnings per common share $ .71 $ .42
Exhibit 12
UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Three Months Ended
March 31,
In Millions of Dollars 1994 1993
Fixed Charges:
Interest on indebtedness $ 56 $ 68
Interest capitalized 7 7
One-third of rents* 25 28
Total Fixed Charges $ 88 $ 103
Earnings:
Income before income taxes and minority interests $ 204 $ 137
Fixed charges per above 88 103
Less: interest capitalized (7) (7)
81 96
Amortization of interest capitalized 11 10
Total Earnings $ 296 $ 243
Ratio of Earnings to Fixed Charges 3.36 2.36
* Reasonable approximation of the interest factor.
Exhibit 15
May 4, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Dear Sirs:
We are aware that United Technologies Corporation has incorporated by reference
our report dated April 16, 1994 (issued pursuant to the provisions of Statement
on Auditing Standards No. 71) in the Prospectus constituting part of its
Registration Statements on Form S-3 (Nos. 33-46916, 33-40163, 33-34320, 33-
31514, 33-29687 and 33-6452) and Form S-8 (Nos. 33-45440, 33-11255, 33-26580,
33-26627, 33-28974, 33-51385, and 2-87322). We are also aware of our
responsibilities under the Securities Act of 1933.
Yours very truly,
Price Waterhouse
