FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION
15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Plan Period Ended December 31, 2002
Commission File Number 1-812
HAMILTON SUNDSTRAND de PUERTO RICO
SAVINGS PLAN
UNITED TECHNOLOGIES CORPORATION
One Financial Plaza
Hartford, Connecticut 06103
HAMILTON SUNDSTRAND de PUERTO RICO SAVINGS PLAN
Index to Financial Statements
December 31, 2002 and 2001
|
Page |
||
| Report of Independent Auditors | 1 | |
| Financial Statements | ||
| Statements of Net Assets Available for Benefits | 2 | |
| Statement of Changes in Net Assets Available for Benefits | 3 | |
| Notes to Financial Statements | 4 - 7 | |
| Supplemental Schedules | 8 - 9 | |
| Exhibit Index | 11 | |
FINANCIAL
STATEMENTS OF THE
HAMILTON SUNDSTRAND de PUERTO RICO SAVINGS PLAN
Report of Independent Auditors
To the Participants and Administrator of the
Hamilton Sundstrand de Puerto Rico Savings Plan
In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Hamilton Sundstrand de Puerto Rico Savings Plan (the "Plan") at December 31, 2002 and December 31, 2001, and the changes in net assets available for benefits for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America, 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 our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedules of Assets Held at End of Year and Non-exempt Transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are 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 27, 2003
1
HAMILTON
SUNDSTRAND de PUERTO RICO SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
| 2002 | 2001 | |||
| Assets: | ||||
| Investments (Note 3) |
$ |
2,254,503 |
$ |
2,217,260 |
| Loans to participants | 413,066 | 316,837 | ||
| Net Assets Available for Benefits | $ |
2,667,569 |
$ |
2,534,097 |
The accompanying notes are an integral part of these financial statements.
2
HAMILTON SUNDSTRAND de
PUERTO RICO SAVINGS PLAN
Statement of Changes in Net Assets Available for
Benefits
For the Year Ended December 31, 2002
| 2002 | ||
| Additions to net assets attributed to: | ||
| Investment income: | ||
| Interest |
$ |
417 |
| Dividends | 40,878 | |
| Contributions: | ||
| Participants' | 531,221 | |
| Employer's | 190,350 | |
| Total additions | 762,866 | |
|
|
||
| Deductions from net assets attributed to: | ||
| Net depreciation in fair value of investments | (275,268) | |
| Distributions to participants | (323,852) | |
| Administrative expenses | (30,274) | |
| Total deductions | (629,394) | |
|
|
||
| Net increase | 133,472 | |
| Net Assets Available for Benefits, December 31, 2001 | 2,534,097 | |
|
|
||
| Net Assets Available for Benefits, December 31, 2002 | $ |
2,667,569 |
The accompanying notes are an integral part of these financial statements.
3
HAMILTON SUNDSTRAND de PUERTO
RICO SAVINGS PLAN
Notes to Financial Statements
NOTE 1 - DESCRIPTION OF THE PLAN
General. The Hamilton Sundstrand de Puerto Rico Savings Plan, formerly known as the Sundstrand de Puerto Rico Employee Savings Plan, (the "Plan") is a defined contribution plan covering all employees of Hamilton Sundstrand de Puerto Rico, Inc., an indirect subsidiary of United Technologies Corporation ("UTC"). The following is a brief description of the Plan. A complete description of the provisions of the Plan can be obtained by referring to the prospectus and summary plan description as well as the Plan document which are available from UTC.
Contributions and Vesting. Eligible new hires are automatically participants in the Plan and will contribute 2% of compensation to the Plan, unless they elect out of plan participation or elect to contribute at a higher rate. Participants may elect to contribute, through payroll deductions, up to 8 percent of their eligible compensation, as defined by the Plan. Participants direct the investment of their contributions into various investment options offered by the Plan. As of December 31, 2002, the Plan offered 6 investment options to participants: three Growth Funds; one Income Fund; one Money Market Fund; and UTC Common Stock.
The company matching contribution is 100 percent of the participant's eligible contributions from the first 2 percent of base pay. Employer and participant contributions are deposited into the investment funds in accordance with the participants' elections.
Participant contributions, plus actual earnings thereon, are fully vested at all times under the Plan. Employer contributions, plus actual earnings thereon, become fully vested after three years of eligible service.
Participant Accounts. Interest, dividends, and realized and unrealized gains and losses on investments of the funds are allocated directly to each participant's account by Banco Popular. Forfeited balances of terminated participants' nonvested employer contribution accounts are used to reduce future employer contributions. For the year ended December 31, 2002, no forfeitures were used to reduce employer contributions.
Voting Rights. Common Stock held in the UTC Common Stock Fund is voted by the Trustee at shareowner meetings of UTC in accordance with the confidential instructions of the participants whose accounts are invested in the funds. All shares of employer stock in the UTC Common Stock Fund for which the Trustee receives voting instructions from participants to whose accounts the shares are allocated are voted in accordance with those instructions. All employer stock in the UTC Common Stock Fund for which the Trustee does not receive timely voting instructions are voted by the Trustee in accordance with the timely instructions it receives with respect to a plurality of the shares in the UTC Common Stock Fund.
Trustee and Recordkeeper. All of the Plan's assets are held by Banco Popular, the Plan trustee, who also has participant account recordkeeping responsibilities.
Participant Loans. Participants may elect to borrow from their account balances a minimum of $500 up to a maximum of $50,000 or 50 percent of their account balances, whichever is less. The interest rate on participant loan withdrawals during 2002 was 9%.
Payment of Benefits. Generally, on termination of service due to death, disability, or retirement, benefits are paid in a lump sum to a terminating participant.
4
HAMILTON SUNDSTRAND de PUERTO
RICO SAVINGS PLAN
Notes to Financial Statements
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.
Investment Valuation and Income Recognition. The Plan's investments are stated at fair value as determined by the Plan trustee, typically by reference to published market data. The UTC Common Stock is valued at its year-end unit closing price. Participant loans are valued at cost, which approximates fair value.
Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date.
Plan Expenses. Administrative expenses, such as trustee, custodial and recordkeeping fees, were paid directly by the Plan in 2002.
Use of Estimates. The preparation of financial statements requires Plan management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
5
HAMILTON SUNDSTRAND de PUERTO
RICO SAVINGS PLAN
Notes to Financial Statements
The following presents investments that represent 5 percent or more of the Plan's net assets:
|
2002 |
2001 |
|||
| Deutsche
Asset Management Equity 500 Index Fund, 7,050 and 6,142 units, respectively |
|
704,132 |
|
799,633 |
| Deutsche
Asset Management U.S. Bond Index Premier Fund, 43,241 and 38,411 units, respectively |
458,347 |
400,247 |
||
|
Deutsche Asset Management Money Market Fund, 384,850 and 373,553 units, respectively |
384,850 |
373,553 |
||
| UTC Common Stock, 6,960 and 5,487 units, respectively | 431,102 | 354,625 | ||
| Vanguard Small Cap Index Fund, 10,975 and 8,802 units, respectively | 171,872 | 174,449 |
During 2002, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $275,268. Mutual fund investments depreciated by $254,072 and the UTC Stock Fund depreciated by $21,196.
NOTE 4 - RELATED-PARTY TRANSACTIONS
The Plan holds common shares of UTC, the Plan sponsor, and these qualify as party-in-interest transactions.
The Plan invests in UTC Common Stock
. During the year ended December 31, 2002, the Plan purchased units of UTC Common Stock in the approximate amount of $119,000, sold units of UTC Common Stock in the approximate amount of $22,000, and had net depreciation on the UTC Common Stock in the approximate amount of $21,000. The total value of the Plan's interest in UTC Common Stock was $431,102 and $354,625 at December 31, 2002 and 2001, respectively.6
HAMILTON SUNDSTRAND de PUERTO RICO SAVINGS PLAN
Notes to Financial Statements
Although it has not expressed any intent to do so, the Plan sponsor has the right under the Plan to terminate the Plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). In the event of Plan termination, participants will become fully vested in their account balances.
The Puerto Rico Department of Treasury ruled on June 1, 1994 that the Plan qualifies under section 165(a) of the Income Tax Act of 1954 (the "Act"), as amended. Therefore, the related trust is not subject to tax under present Puerto Rico income tax law. The Plan has been amended since receiving the determination letter. However, the Plan administrator and legal counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Act.
7
HAMILTON SUNDSTRAND de PUERTO RICO
SAVINGS PLAN
FORM 5500, SCHEDULE G, PART III - SCHEDULE OF NONEXEMPT TRANSACTIONS
Notes to Financial Statements
| (a) Identity of Party Involved |
(b) Relationship to Plan, Employer, or Other Party-In-Interest |
(c) Description of Transactions Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value |
(d) Purchase Price |
(e) Selling Price |
(f) Lease Rental |
(g) Expenses Incurred in Connection with Transactions |
(h) Cost of Asset |
(i) Current Value of Asset on Transaction Date |
(j) Net Gain (Loss) on Each Transaction |
| UTC | Employer | A portion of September 2002 participant contributions were deposited into the Plan on October 23, 2002. The interest rate used to calculate lost income is 9.2%. |
$ 2 |
N/A | N/A | N/A | $ 2 |
$ 2 |
--* |
* Department of Labor Reg. 2510.3-102 requires that employee contributions be submitted to the Plan no later than 15 business days following the end of the month in which amounts were withheld from compensation. Failure to remit employee contributions in to the Plan on a timely basis is considered a nonexempt transaction with a party-in-interest. Management believes that this transaction should not affect the tax-qualified status of the Plan as all such required payments were subsequently paid upon discovery. Therefore, no provision for income taxes has been included in the Plan's financial statements.
8
SUPPLEMENTAL SCHEDULE
HAMILTON SUNDSTRAND de PUERTO RICO SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets Held at End of Year
December 31, 2002
(a) |
|
(c) |
|
||
| Deutsche Asset Management | Equity 500 Index Fund | $ |
704,132 | ||
| Deutsche Asset Management | U.S. Bond Index Premier Fund | 458,347 | |||
| Deutsche Asset Management | Money Market Fund | 384,850 | |||
* |
United Technologies Corporation | UTC Common Stock | 431,102 | ||
| Vanguard Group of Investments | Vanguard Small Cap Index Fund | 171,872 |
|||
| Deutsche Asset Management | EAFE Equity Premier Fund | 104,200 | |||
| Plan Participants | Participant Loans Receivable | 413,066 | |||
| $ | 2,667,569 |
* Indicates an identified person known to be a party-in-interest to the Plan
9
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.
|
HAMILTON SUNDSTRAND de PUERTO RICO SAVINGS PLAN |
|||
| Dated: June 30, 2003 | By: | /s/ Laurie P. Havanec | |
|
Laurie P. Havanec Director, Employee Benefits and Human Resources Systems United Technologies Corporation |
|||
10
| (23) | Consent of Independent Auditors * |
| (99) | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by Laurie P. Havanec and David L. Porter as of June 30, 2003. * |
* Submitted electronically herewith.
11
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-100718) of United Technologies Corporation of our report dated June 27, 2003 relating to the financial statements of the Hamilton Sundstrand de Puerto Rico Savings Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Hartford, Connecticut
June 27, 2003
Exhibit 99
Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States
Code)
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned of United Technologies Corporation, a Delaware corporation (the "Company"), does hereby certify that:
The Annual Report for the Hamilton Sundstrand de Puerto Rico Savings Plan on Form 11-K for the year ended December 31, 2002 (the "Form 11-K") fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 11-K fairly presents, in all material respects, the financial condition and results of operations of the Plan.
| Date: | June 27, 2003 | /s/ Laurie P. Havanec |
| Laurie P. Havanec Director, Employee Benefits and Human Resource Systems United Technologies Corporation |
||
| Date: | June 27, 2003 | /s/ David L. Porter |
| David L. Porter Assistant Controller, Financial Reporting and Accounting United Technologies Corporation |
A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is accompanying the Form 11-K solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Form 11-K or as a separate disclosure document.