For the transition period from____________________________to__________________________

Commission file number 1-812 

 UNITED TECHNOLOGIES CORPORATION

"Corporation," unless the context otherwise requires, means United Technologies Corporation or UTC and its subsidiaries. 

See accompanying Notes to Condensed Consolidated Financial Statements

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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

See accompanying Notes to Condensed Consolidated Financial Statements

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UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

See accompanying Notes to Condensed Consolidated Financial Statements

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See accompanying Notes to Condensed Consolidated Financial Statements

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UNITED TECHNOLOGIES CORPORATION
AND SUBSIDIARIES

     The Condensed Consolidated Financial Statements at June 30, 2003 and for the quarters and six-month periods ended June 30, 2003 and 2002 are unaudited, but in the opinion of management include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results reported in these Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the financial statements and notes in the Corporation's Annual Report incorporated by reference in Form 10-K for calendar year 2002. Certain reclassifications have been made to the prior year amounts to conform to the current year presentation.

Employee Benefit Plans

    During the first six months of 2003, the Corporation made $600 million of cash contributions to its defined benefit domestic pension plans, including $500 million in the first quarter and $100 million in the second quarter.

    The Corporation has long-term incentive plans authorizing various types of market and performance based incentive awards that may be granted to officers and employees. The Corporation applies APB Opinion 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for its long-term stock-based incentive plans. The exercise price of stock options, set at the time of the grant, is not less than the fair market value per share at the date of grant. Options have a term of ten years and generally vest after three years.

    The following table illustrates the effect on net income and earnings per share as if the Black-Scholes fair value method described in Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," as amended, had been applied to the Corporation's long-term incentive plans.

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    With respect to the unaudited condensed consolidated financial information of United Technologies Corporation for the quarters and six-month periods ended June 30, 2003 and 2002, PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their report dated July 17, 2003, appearing below, states that they did not audit and they do not express an opinion on that unaudited condensed consolidated financial information. PricewaterhouseCoopers 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. PricewaterhouseCoopers is not subject to the liability provisions of Section 11 of the Securities Act of 1933 ("the Act") for their report on the unaudited condensed consolidated financial information because that report is not a "report" or a "part" of a registration statement prepared or certified by PricewaterhouseCoopers within the meaning of Sections 7 and 11 of the Act.

To the Shareowners of
  United Technologies Corporation

    We have reviewed the accompanying condensed consolidated balance sheet of United Technologies Corporation and its consolidated subsidiaries as of June 30, 2003, and the related condensed consolidated statement of operations for each of the three-month and six-month periods ended June 30, 2003 and 2002, and the condensed consolidated statement of cash flows for the six-month periods ended June 30, 2003 and 2002. This interim financial information is the responsibility of the Corporation's management.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Hartford, Connecticut
July 17, 2003

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         BUSINESS ENVIRONMENT

    The Corporation's operations are classified into four principal segments: Otis, Carrier, Pratt & Whitney and Flight Systems. Otis and Carrier serve customers in the commercial and residential property industries. Carrier also serves commercial and transport refrigeration customers. Pratt & Whitney and the Flight Systems segment, which includes Hamilton Sundstrand and Sikorsky Aircraft ("Sikorsky"), primarily serve commercial and government customers in the aerospace industry.

    For discussion of the Corporation's business environment, refer to the discussion of "Business Environment" in the Management's Discussion and Analysis of Financial Condition and Results of Operations in the Corporation's Annual Report incorporated by reference in Form 10-K for calendar year 2002. The current status of significant factors impacting the Corporation's business environment in 2003 is discussed below.

    As worldwide businesses, the Corporation's operations are affected by global and regional industry, economic and political factors. The Corporation's geographic and industry diversity, as well as the diversity of its product sales and services, has helped limit the impact of any one industry or the economy of any single country on the consolidated results. Economic conditions in the commercial airline industry, global refrigeration industries, commercial HVAC and construction markets had a negative impact on the Corporation's consolidated results in the first six months of 2003 and are expected to continue to present challenges to its businesses. In addition, the defense portion of the Corporation's aerospace businesses is affected by changes in market demand and the global political environment. The Corporation's participation in long-term production and development programs for the U.S. Government has contributed positively to the Corporation's results in the first six months of 2003 and is expected to continue to benefit results for the remainder of 2003. During the first six months of 2003, foreign currencies contributed positively to the Corporation's consolidated results, primarily driven by the strength of the euro in relation to the U.S. dollar.

    Traffic growth, load factors, worldwide airline profits, influenced in part by fuel prices and labor issues, and general economic activity have historically been reliable indicators for new aircraft and aftermarket orders in the aerospace industry. Spare part sales and aftermarket service trends are impacted by factors including usage, pricing, regulatory changes and retirement of older aircraft. Performance in the general aviation sector is closely tied to the overall health of the economy and is positively correlated to corporate profits. Current conditions in the airline industry include reduced flight schedules, an increased number of idle aircraft, workforce reductions and declining financial performance, including recent airline bankruptcies. Airlines and aircraft manufacturers continue to reduce supplier bases and seek lower cost packages. These conditions have resulted in decreased aerospace volume and orders in the Corporation's commercial aerospace businesses in the first six months of 2003 and are expected to continue for the remainder of 2003. In addition, ongoing U.S. military involvement in Iraq has created uncertainty in the airline industry.

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    The residual impact of war in Iraq, continued commercial airline financial distress, slowed global economic growth, including the near term impact of Severe Acute Respiratory Syndrome ("SARS"), and weather conditions in key HVAC markets create uncertainties that could impact the Corporation's earnings outlook for the remainder of 2003.

    Preparation of the Corporation's financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management believes the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management's Discussion and Analysis and Note 1 to the Consolidated Financial Statements in the Corporation's Annual Report, incorporated by reference in Form 10-K for the calendar year 2002, describe the significant accounting estimates and policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ from management's estimates. There have been no significant changes in the Corporation's critical accounting estimates during the first six months of 2003.

RESULTS OF CONTINUING OPERATIONS

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    In addition to company funded programs, customer funded research and development programs were $384 million and $733 million in the second quarter and six-month period of 2003, respectively, as compared to $267 million and $526 million for the same periods of 2002. The increases are primarily attributable to Pratt & Whitney's military business.

    Interest expense decreased $3 million (3%) and $11 million (6%) in the second quarter and six-month period of 2003, respectively, when compared to the same periods of 2002.

    Net income and diluted earnings per share increased $8 million (1%) and $.03 (2%), respectively, in the second quarter of 2003 when compared with the same period of 2002. Net income and diluted earnings per share increased $43 million (4%) and $.12 (6%), respectively, in the first six months of 2003 when compared to the same period of 2002. The favorable impact of foreign currency translation contributed $.07 per share and $.12 per share to the second quarter and first six months of 2003, respectively.

    During 2002, the Corporation recorded pre-tax restructuring and related charges totaling $321 million. These charges related to on-going cost reduction efforts, including workforce reductions and consolidation of manufacturing, sales and service facilities. These programs are expected to result in net workforce reductions of approximately 7,000 salaried and hourly employees, the elimination of approximately 2.0 million square feet of facilities and the disposal of assets associated with exited facilities. During 2003, the Corporation has incurred pre-tax cash outflows related to the 2002 programs of approximately $89 million which were funded from cash generated from operations. Savings are expected to increase over a two-year period resulting in recurring pre-tax savings of approximately $285 million annually. As of June 30, 2003, reductions of approximately 1,000 employees and approximately 600 thousand square feet remain to be completed under the programs. As of June 30, 2003, approximately $58 million of severance and related costs and $5 million of facility exit and lease termination accruals remain outstanding. The programs are expected to be completed in 2003.

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   Revenues, operating profits and operating profit margins of the Corporation's principal segments include the results of all majority-owned subsidiaries, consistent with the management reporting of these businesses. As discussed in the Notes to the Condensed Consolidated Financial Statements for certain of these subsidiaries, minority shareholders have rights which overcome the presumption of control. In the consolidated results, these subsidiaries are accounted for using the equity method of accounting. Adjustments to reconcile segment reporting to consolidated results are included in "Eliminations and other," which also includes certain small subsidiaries. Results for the quarters and six-month periods ended June 30, 2003 and 2002 are as follows:

    Carrier revenues increased $99 million (4%) and $160 million (4%) in the second quarter and first six months of 2003, respectively, compared to the same periods of 2002, reflecting the favorable impact of foreign currency translation due to the strengthening of the euro in relation to the U.S. dollar. In addition, the second quarter and six-month increases also reflect growth in the transport refrigeration business and in North American residential HVAC. Global commercial HVAC remained weak and sales in Asia were down largely due to a weak residential market in South Korea.

    Carrier's operating profits increased $28 million (8%) and $118 million (30%) in the second quarter and first six months of 2003, respectively, compared to the same periods of 2002. These increases reflect higher volume in the transport refrigeration business and continued benefits from cost reduction actions partially offset by unfavorable pricing trends in commercial HVAC and Asia. The six-month increase also reflects the absence of $74 million of restructuring charges recorded in the first quarter of 2002, with approximately half of the remainder due to the favorable impact of foreign currency translation. Foreign currency translation contributed approximately half of the reported second quarter operating profit increase.

    Pratt & Whitney revenues increased $73 million (4%) and decreased $36 million (1%) in the second quarter and first six months of 2003, respectively, compared to the same periods of 2002. The second quarter increase is due primarily to increased military revenues partially offset by declines in commercial spare parts volume and lower volume at Pratt & Whitney Canada. The six-month period also reflects lower volume at Pratt & Whitney Power Systems compared to the same period of 2002.

    Pratt & Whitney operating profits decreased $66 million (20%) and $108 million (17%) in the second quarter and the first six months of 2003, respectively, compared to the same periods of 2002. The second quarter and six-month decreases primarily reflect declines in commercial spare parts volume, partially offset by the profit impact of increased military revenues. The six-month decrease also includes lower research and development costs, reflecting finalization of a technology funding agreement at Pratt & Whitney Canada in the first quarter of 2003, the absence of PW6000 costs recorded in the first quarter of 2002 partially offset by the favorable impact of commercial engine contract changes recorded in the first quarter of 2002.

    Flight Systems revenues increased $13 million (1%) and $121 million (5%) in the second quarter and first six months of 2003, respectively, compared to the same periods of 2002. The second quarter and six-month increases were due to higher aftermarket revenues at Sikorsky, due in part to the April 2002 acquisition of Derco, and military revenues at Hamilton Sundstrand, partially offset by lower helicopter revenues at Sikorsky and lower commercial aerospace volume at Hamilton Sundstrand.

    Flight Systems operating profits decreased $19 million (10%) in the second quarter and increased $10 million (3%) in the first six months of 2003 compared to the same periods of 2002. The second quarter decrease reflects continued weakness in commercial aerospace, restructuring charges at Hamilton Sundstrand and lower helicopter profits, partially offset by increased aftermarket profits and lower S-92 spending at Sikorsky. The six-month increase reflects increased aftermarket profit due in part to the acquisition of Derco, and lower S-92 spending at Sikorsky, partially offset by continued commercial aerospace weakness at Hamilton Sundstrand.

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    Management assesses the Corporation's liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. Significant factors affecting the management of liquidity are cash flows generated from operating activities, capital expenditures, customer financing requirements, investments in businesses, dividends, Common Stock repurchases, adequacy of available bank lines of credit and the ability to attract long-term capital with satisfactory terms.

    Cash used in investing activities decreased $346 million in the first six months of 2003 compared with the same period of 2002, primarily due to lower capital expenditures and investments in businesses. The decrease in capital expenditures is due to a rationalization and timing of capital projects. Capital expenditures for the full year 2003 are expected to decline approximately 10% from the prior year.

    Cash spending for investments in businesses for the first six months of 2003 was $94 million, including the Corporation's initial purchase  of Chubb plc shares. On June 11, 2003, the Corporation announced an offer to acquire Chubb plc, a London-based provider of security and fire protection services, for $1 billion in cash and the assumption of approximately $1 billion of debt. Chubb reported 2002 revenues of approximately $2.5 billion and has leading market positions in the U.K., France, Hong Kong, Canada and Australia. The offer is subject to customary conditions including acceptance of the offer by Chubb shareholders, approvals by relevant regulatory agencies, and compliance with required filing and other regulations. The transaction is expected to close in the third quarter of 2003.

    Including the recently announced offer to acquire Chubb plc, the Corporation expects acquisition activity for the full year 2003 to  approximate $3.0 billion. Actual acquisition spending may vary depending upon the availability of appropriate acquisition opportunities.

    Customer financing activity was a net use of cash of $56 million in the first six months of 2003 compared with a $95 million use of cash in the first six months of 2002, reflecting lower customer generated financing requirements. While the Corporation expects that 2003 customer financing activity will be a net use of funds, actual funding is subject to usage under existing customer financing commitments during the remainder of the year. The Corporation had financing and rental commitments of approximately $1.6 billion related to commercial aircraft at June 30, 2003 and December 31, 2002. The Corporation may also arrange for third-party investors to assume a portion of its commitments.

    The Corporation repurchased $251 million of Common Stock, representing 4.1 million shares, in the first six months of 2003 under previously announced share repurchase programs. In October 2002, the Corporation announced that the Board of Directors authorized the repurchase of up to 30 million shares. The new authorization replaces the previous share repurchase authority. The Corporation expects total share repurchases in 2003 of approximately $500 million, however, total repurchases may vary depending upon the level of other investing activities. The share repurchase programs continue to be a use of the Corporation's cash flows and have approximately offset the dilutive effect resulting from the issuance of stock and options under stock-based employee benefit programs.

    The funded status of the Corporation's pension plans is dependent upon many factors, including returns on invested assets and the level of market interest rates. The Corporation can contribute cash to these plans at its discretion and made $600 million of cash contributions to its domestic pension plans during 2003, representing $500 million in the first quarter and an additional $100 million in the second quarter.  In each of the remaining quarterly periods of  2003, the Corporation expects to make contributions approximating those made in the second quarter of 2003.

    The Corporation manages its worldwide cash requirements considering available funds among the many subsidiaries through which it conducts its business and the cost effectiveness with which those funds can be accessed. The repatriation of cash balances from certain of the Corporation's subsidiaries could have adverse tax consequences; however, those balances are generally available without legal restrictions to fund ordinary business operations. The Corporation has and will continue to transfer cash from those subsidiaries to the parent and to other international subsidiaries when it is cost effective to do so.

    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. Although variations in acquisition spending could cause changes in debt to capital levels, management anticipates that the year-end 2003 debt-to-capital level will approximate prior year levels.

Recent Accounting Guidance

    In January 2003, Financial Accounting Standards Board Interpretation ("FIN") No. 46, "Consolidation of Variable Interest Entities" was issued. The interpretation provides guidance on consolidating variable interest entities and applies immediately to variable interests created after January 31, 2003. The guidelines of the interpretation will become applicable for the Corporation in its third quarter 2003 financial statements for variable interest entities created before February 1, 2003. The interpretation requires variable interest entities to be consolidated if the equity investment at risk is not sufficient to permit an entity to finance its activities without support from other parties or the equity investors lack certain specified characteristics.

    The adoption of FIN 46 for variable interests created after January 31, 2003 did not have a material impact on the Corporation's consolidated financial condition, results of operations or cash flows. The Corporation is continuing to review the provisions of FIN 46 to determine its impact, if any, on future reporting periods with respect to interests in variable interest entities created prior to February 1, 2003, and does not currently anticipate any material accounting or disclosure requirement under the provisions of the interpretation.

    There has been no change in the Corporation's internal control over financial reporting during the Corporation's quarter ended June 30, 2003 that has materially affected, or is reasonably likely to materially affect, the Corporation's internal control over financial reporting.

Part II – Other Information

Item 1.     Legal Proceedings

    As previously reported, the U.S. Department of Defense (DoD) and the Corporation are litigating whether Pratt & Whitney's accounting practices for certain engine parts are acceptable. The litigation, filed in 1994 with the Armed Services Board of Contract Appeals ("ASBCA"), No. 47416 et al., relates to the accounting for engine parts produced by foreign companies under commercial engine collaboration programs from 1984 through 1995. On January 15, 2003, the Court of Appeals for the Federal Circuit reversed the ASBCA and remanded the case to the ASBCA for further proceedings. The Corporation sought reconsideration of this decision by the Court in late February 2003. On April 23, 2003, the Court declined to reconsider its decision and the Corporation intends to seek review by the U.S. Supreme Court.

    As previously reported, the Corporation had pending against it one qui tam complaint under the civil False Claims Act in United States District Court for the District of Connecticut: U.S. ex rel. Drake v. Norden Systems, Inc. and UTC, No. 394CV00963 (filed July 1997, and involving allegations of improper accounting for fixed assets). In February 2003, the case was dismissed. On June 18, 2003, the Court denied the relator's motion for reconsideration.  The relator has appealed this dismissal.

    As previously reported, in March 1999, the U.S. Department of Justice filed a civil False Claims Act complaint against the Corporation in United States District Court for the Southern District of Ohio (Western Division), No. C-3-99-093. This lawsuit relates to the "Fighter Engine Competition" between Pratt & Whitney's F100 engine and GE's F110 engine, for contracts awarded by the U.S. Air Force between fiscal years 1985 and 1990, inclusive. The Government alleges that Pratt & Whitney inflated its estimated costs for purchased parts and withheld data that would have revealed the overstatements. In mid-2002, the Court denied motions filed by Pratt & Whitney that could have resulted in dismissal of all or part of the Government's claims. The Corporation requested that the Court reconsider this denial. This request was denied in March 2003. On May 9, 2003, the Government asked the Court to allow an amendment to the complaint, which the Corporation has opposed. Trial of this matter is anticipated in the second quarter of 2004.    

    As previously reported, the Corporation entered into a Consent Decree in August of 1993 with the EPA and the Department of Justice in Docket Number H-90-715 (JAC) in the U.S. District Court for the District of Connecticut. Under the Consent Decree, the Corporation agreed to adopt programs to enhance the effectiveness of its environmental management systems and to conduct environmental regulatory compliance audits of all of its facilities in New England. The Corporation having successfully completed all requirements of the Consent Decree and upon Joint Motion by the Corporation and the United States, the Consent Decree was terminated by order of the U.S. District Court for the District of Connecticut, effective as of April 10, 2003.

    Except as noted above, there have been no material developments in legal proceedings. For a description of previously reported legal proceedings, refer to Part I, Item 3, Legal Proceedings of the Corporation's Annual Report on Form 10-K for 2002.

    The Corporation does not believe that the resolution of the foregoing legal matters will have a material adverse effect upon the Corporation's competitive position, results of operations, cash flow or financial condition.

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Item 4.    Submission of Matters to a Vote of Security Holders

The Corporation held its Annual Meeting of Shareowners on April 9, 2003.

The following individuals were nominated and elected to serve as directors:

George David, Jean-Pierre Garnier, Jamie S. Gorelick, Charles R. Lee, Richard D. McCormick,
Stephen F. Page, Frank P. Popoff, H. Patrick Swygert, Andre Villeneuve and Harold A. Wagner

The Shareowners voted as follows on the following matters:

1)	Election of directors.  The voting results for each of the nominees are as follows:

2)	A proposal of the Audit Committee and the Board of Directors to re-appoint PricewaterhouseCoopers LLP to serve as Independent Auditor. A total of 396,399,903 shares were voted for and 23,269,301 shares were voted against this proposal. There were 6,096,286 abstentions and zero broker non-votes.
3)	A shareowner proposal recommending additional disclosure of compensation of executive officers. A total of 29,713,878 shares were voted for and 339,100,860 shares were voted against this proposal. There were 9,079,690 abstentions and 47,871,062 broker non-votes.
4)	A shareowner proposal recommending that the Board of Directors provide a report concerning the Corporation's involvement in space-based weaponization. A total of 19,132,696 shares were voted for and 343,134,077 shares were voted against this proposal. There were 15,423,775 abstentions and 48,074,942 broker non-votes.
5)	A shareowner proposal recommending shareowner approval of certain future severance agreements with senior executives. A total of 199,116,227 shares were voted for and 169,409,562 shares were voted against this proposal. There were 9,162,834 abstentions and 48,076,867 broker non-votes.