<PAGE>
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Plan period ended December 31, 1998
Commission File Number 1-812
UNITED TECHNOLOGIES CORPORATION
REPRESENTED EMPLOYEE SAVINGS PLAN
UNITED TECHNOLOGIES CORPORATION
One Financial Plaza
Hartford, Connecticut 06101
<PAGE>
FINANCIAL STATEMENTS OF THE UNITED TECHNOLOGIES CORPORATION
REPRESENTED EMPLOYEE SAVINGS PLAN
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
the United Technologies Corporation
Represented Employee Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
with fund information and the related statement of changes in net assets
available for benefits with fund information present fairly, in all material
respects, the net assets available for benefits of the United Technologies
Corporation Represented Employee Savings Plan at December 31, 1998 and 1997, and
the changes in net assets available for benefits for the period ended December
31, 1998, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The fund information in the statement of
net assets available for benefits and the statement of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for plan benefits and changes in net
assets available for benefits of each fund. The fund information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Hartford, Connecticut
June 28, 1999
<PAGE>
<TABLE>
UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits With Fund Information
December 31, 1998
(Thousands of Dollars, except unit amounts)
<CAPTION>
Small UTC INVESCO
Company International Common Total
Income Equity Stock Index Equity Index Global Stock Return
Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Beneficial interests in Bankers Trust
Company Pyramid:
Large Capitalization Equity Index Fund $ - $ 200,259 $ - $ - $ 2,884 $ - $ -
Russell 2000 Equity Index Fund - - 1,461 - - - -
Daily Japanese Equity Index Fund - - - 126 - - -
Daily Non Japanese Equity Index Fund - - - 475 - - -
Government/Corporate Fixed Income
Index Fund - - - - 2,351 - -
Daily International Equity Index Fund - - - - 2,854 - -
United Technologies Corporation Common
Stock - - - - - 57,990 -
Shares of respective registered
investment companies - - - - - - 1,603
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value 473,892 - - - - - -
Participant loans, at cost - - - - - - -
Temporary investments, at cost plus
accrued interest - - - - - 289 -
Total Investments 473,892 200,259 1,461 601 8,089 58,279 1,603
Plan receivables 456 34 1 - 1 662 1
Total Assets 474,348 200,293 1,462 601 8,090 58,941 1,604
Liabilities:
Accrued expenses - - - - - 148 -
Loans payable, net - - - - - - -
Total Liabilities - - - - - 148 -
Net Assets Available for Benefits $ 474,348 $ 200,293 $ 1,462 $ 601 $ 8,090 $ 58,793 $ 1,604
Units of participation 7,088,290 7,401,803 122,571 47,404 2,818,953 3,226,829 51,131
Unit value $ 66.92 $ 27.06 $ 11.93 $ 12.68 $ 2.87 $ 18.22 $ 31.36
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits With Fund Information (Continued)
December 31, 1998
(Thousands of Dollars, except unit amounts)
<CAPTION>
Putnam
Fidelity Putnam New SoGen
Growth & Fund for Fidelity Low- PBHG Opportun- Interna-
Income Growth Fidelity Priced Stock Growth ities tional
Portfolio and Income Contrafund Fund Fund Fund Fund, Inc.
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Beneficial interests in Bankers Trust
Company Pyramid:
Large Capitalization Equity Index Fund $ - $ - $ - $ - $ - $ - $ -
Russell 2000 Equity Index Fund - - - - - - -
Daily Japanese Equity Index Fund - - - - - - -
Daily Non Japanese Equity Index Fund - - - - - - -
Government/Corporate Fixed Income
Index Fund - - - - - - -
Daily International Equity Index Fund - - - - - - -
United Technologies Corporation Common -
Stock - - - - - - -
Shares of respective registered
investment companies 18,046 4,295 6,716 2,827 4,728 6,852 692
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value - - - - - - -
Participant loans, at cost - - - - - - -
Temporary investments, at cost plus
accrued interest - - - - - - -
Total Investments 18,046 4,295 6,716 2,827 4,728 6,852 692
Plan receivables 6 2 2 1 2 3 -
Total Assets 18,052 4,297 6,718 2,828 4,730 6,855 692
Liabilities:
Accrued expenses - - - - - - -
Loans payable, net - - - - - - -
Total Liabilities - - - - - - -
Net Assets Available for Benefits $ 18,052 $ 4,297 $ 6,718 $ 2,828 $ 4,730 $ 6,855 $ 692
Units of participation 393,808 209,398 118,302 123,782 185,188 115,906 30,038
Unit value $ 45.84 $ 20.52 $ 56.79 $ 22.85 $ 25.54 $ 59.14 $ 23.03
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits With Fund Information (Continued)
December 31, 1998
(Thousands of Dollars, except unit amounts)
<CAPTION>
Templeton
Templeton Developing
Foreign Markets
Fund A Trust A Loan Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Beneficial interests in Bankers Trust
Company Pyramid:
Large Capitalization Equity Index Fund $ - $ - $ - $ 203,143
Russell 2000 Equity Index Fund - - - 1,461
Daily Japanese Equity Index Fund - - - 126
Daily Non Japanese Equity Index Fund - - - 475
Government/Corporate Fixed Income
Index Fund - - - 2,351
Daily International Equity Index Fund - - - 2,854
United Technologies Corporation Common
Stock - - - 57,990
Shares of respective registered
investment companies 1,493 695 - 47,947
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value - - - 473,892
Participant loans, at cost - - 17,896 17,896
Temporary investments, at cost plus
accrued interest - - - 289
Total Investments 1,493 695 17,896 808,424
Plan receivables 1 - - 1,172
Total Assets 1,494 695 17,896 809,596
Liabilities:
Accrued expenses - - - 148
Loans payable, net - - - -
Total Liabilities - - - 148
Net Assets Available for Benefits $ 1,494 $ 695 $ 17,896 $ 809,448
Units of participation 177,980 67,494 17,896,480
Unit value $ 8.39 $ 10.30 $ 1.00
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits With Fund Information
December 31, 1997
(Thousands of Dollars, except unit amounts)
<CAPTION>
Small UTC INVESCO
Company International Common Total
Income Equity Stock Index Equity Index Global Stock Return
Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Beneficial interests in Bankers Trust
Company Pyramid:
Large Capitalization Equity Index Fund $ - $ 163,490 $ - $ - $ 2,830 $ - $ -
Russell 2000 Equity Index Fund - - 1,836 - - - -
Daily Japanese Equity Index Fund - - - 104 - - -
Daily Non Japanese Equity Index Fund - - - 313 - - -
Government/Corporate Fixed Income
Index Fund - - - - 2,316 - -
Daily International Equity Index Fund - - - - 2,716 - -
United Technologies Corporation Common
Stock - - - - - 41,537 -
Shares of respective registered
investment companies - - - - - - 1,074
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value 413,162 - - - - - -
Participant loans, at cost - - - - - - -
Temporary investments, at cost plus
accrued interest - - - - - 624 -
Total Investments 413,162 163,490 1,836 417 7,862 42,161 1,074
Plan receivables 616 195 4 2 17 172 3
Total Assets 413,778 163,685 1,840 419 7,879 42,333 1,077
Liabilities:
Accrued expenses - - - - - 269 -
Loans payable, net - - - - - - -
Total Liabilities - - - - - 269 -
Net Assets Available for Benefits $ 413,778 $ 163,685 $ 1,840 $ 419 $ 7,879 $ 42,064 $ 1,077
Units of participation 6,706,298 7,787,073 152,037 39,785 3,310,348 3,482,194 37,006
Unit value $ 61.70 $ 21.02 $ 12.10 $ 10.53 $ 2.38 $ 12.08 $ 29.09
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits With Fund Information (Continued)
December 31, 1997
(Thousands of Dollars, except unit amounts)
<CAPTION>
Putnam
Fidelity Putnam New SoGen
Growth & Fund for Fidelity Low- PBHG Opportun- Interna-
Income Growth Fidelity Priced Stock Growth ities tional
Portfolio and Income Contrafund Fund Fund Fund Fund, Inc.
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Beneficial interests in Bankers Trust
Company Pyramid:
Large Capitalization Equity Index Fund $ - $ - $ - $ - $ - $ - $ -
Russell 2000 Equity Index Fund - - - - - - -
Daily Japanese Equity Index Fund - - - - - - -
Daily Non Japanese Equity Index Fund - - - - - - -
Government/Corporate Fixed Income
Index Fund - - - - - - -
Daily International Equity Index Fund - - - - - - -
United Technologies Corporation Common - - - - -
Stock - -
Shares of respective registered
investment companies 9,817 3,804 4,213 3,104 5,227 4,153 724
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value - - - - - - -
Participant loans, at cost - - - - - - -
Temporary investments, at cost plus
accrued interest - - - - - - -
Total Investments 9,817 3,804 4,213 3,104 5,227 4,153 724
Plan receivables 24 9 11 7 15 13 2
Total Assets 9,841 3,813 4,224 3,111 5,242 4,166 726
Liabilities:
Accrued expenses - - - - - - -
Loans payable, net - - - - - - -
Total Liabilities - - - - - - -
Net Assets Available for Benefits $ 9,841 $ 3,813 $ 4,224 $ 3,111 $ 5,242 $ 4,166 $ 726
Units of participation 258,277 194,964 90,579 123,791 206,464 84,824 28,567
Unit value $ 38.10 $ 19.56 $ 46.63 $ 25.13 $ 25.39 $ 49.10 $ 25.45
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits With Fund Information (Continued)
December 31, 1997
(Thousands of Dollars, except unit amounts)
<CAPTION>
Templeton
Templeton Developing
Foreign Markets
Fund A Trust A Loan Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
Beneficial interests in Bankers Trust
Company Pyramid:
Large Capitalization Equity Index Fund $ - $ - $ - $ 166,320
Russell 2000 Equity Index Fund - - - 1,836
Daily Japanese Equity Index Fund - - - 104
Daily Non Japanese Equity Index Fund - - - 313
Government/Corporate Fixed Income
Index Fund - - - 2,316
Daily International Equity Index Fund - - - 2,716
United Technologies Corporation Common
Stock - - - 41,537
Shares of respective registered
investment companies 1,577 721 - 34,414
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value - - - 413,162
Participant loans, at cost - - 15,663 15,663
Temporary investments, at cost plus
accrued interest - - - 624
Total Investments 1,577 721 15,663 679,005
Plan receivables 5 2 - 1,097
Total Assets 1,582 723 15,663 680,102
Liabilities:
Accrued expenses - - - 269
Loans payable, net - - - -
Total Liabilities - - - 269
Net Assets Available for Benefits $ 1,582 $ 723 $ 15,663 $ 679,833
Units of participation 158,995 55,923 15,663,368
Unit value $ 9.95 $ 12.94 $ 1.00
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits With Fund Information
Period Ended December 31, 1998
(Thousands of Dollars)
<CAPTION>
Small UTC INVESCO
Company International Common Total
Income Equity Stock Index Equity Index Global Stock Return
Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment Income:
Net appreciation / (depreciation) in fair
value of investments $ - $ 44,803 $ (13) $ 82 $ 1,454 $ 20,589 $ 98
Interest 35,735 - - - - - -
Dividends - - - - - - 78
Total Investment Income 35,735 44,803 (13) 82 1,454 20,589 176
Contributions:
Participants' 24,471 8,940 187 78 641 3,721 156
Employer's 7,387 2,200 39 17 185 901 37
Total Contributions 31,858 11,140 226 95 826 4,622 193
Repayments on loans 4,890 1,854 22 9 168 804 18
Deductions from net assets attributed to:
Distributions to participants 23,128 7,718 69 10 327 1,916 62
Loans to participants 5,625 2,174 26 4 161 1,110 17
Administrative expenses 64 9 1 - 2 2 -
Total Deductions 28,817 9,901 96 14 490 3,028 79
Net increase / (decrease) prior to
transfers 43,666 47,896 139 172 1,958 22,987 308
Inter-fund transfers 17,001 (11,132) (517) 10 (1,745) (6,227) 219
Net assets transferred out of Plan (97) (156) - - (2) (31) -
Net increase / (decrease) 60,570 36,608 (378) 182 211 16,729 527
Net Assets Available for Benefits
December 31, 1997 413,778 163,685 1,840 419 7,879 42,064 1,077
Net Assets Available for Benefits
December 31, 1998 $ 474,348 $ 200,293 $ 1,462 $ 601 $ 8,090 $ 58,793 $ 1,604
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits With Fund Information (Continued)
Period Ended December 31, 1998
(Thousands of Dollars)
<CAPTION>
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.
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment Income:
Net appreciation / (depreciation) in fair
value of investments $ 2,595 $ 166 $ 918 $ (285) $ 14 $ 904 $ (68)
Interest - - - - - - -
Dividends 933 390 493 253 - 214 66
Total Investment Income 3,528 556 1,411 (32) 14 1,118 (2)
Contributions:
Participants' 1,434 442 561 321 613 636 100
Employer's 338 107 135 76 140 144 26
Total Contributions 1,772 549 696 397 753 780 126
Repayments on loans 246 56 115 40 88 97 14
Deductions from net assets attributed to:
Distributions to participants 408 91 143 152 177 237 19
Loans to participants 234 45 103 48 78 77 10
Administrative expenses - - - 1 1 1 -
Total Deductions 642 136 246 201 256 315 29
Net increase / (decrease) prior to
transfers 4,904 1,025 1,976 204 599 1,680 109
Inter-fund transfers 3,309 (540) 520 (486) (1,110) 1,010 (143)
Net assets transferred out of Plan (2) (1) (2) (1) (1) (1) -
Net increase / (decrease) 8,211 484 2,494 (283) (512) 2,689 (34)
Net Assets Available for Benefits
December 31, 1997 9,841 3,813 4,224 3,111 5,242 4,166 726
Net Assets Available for Benefits
December 31, 1998 $ 18,052 $ 4,297 $ 6,718 $ 2,828 $ 4,730 $ 6,855 $ 692
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UNITED TECHNOLOGIES CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits With Fund Information (Continued)
Period Ended December 31, 1998
(Thousands of Dollars)
<CAPTION>
Templeton
Templeton Developing
Foreign Markets
Fund A Trust A Loan Fund Total
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment Income:
Net appreciation / (depreciation) in fair
value of investments $ (261) $ (134) $ - $ 70,862
Interest - - 1,414 37,149
Dividends 167 15 - 2,609
Total Investment Income (94) (119) 1,414 110,620
Contributions:
Participants' 196 99 - 42,596
Employer's 47 23 - 11,802
Total Contributions 243 122 - 54,398
Repayments on loans 26 17 (8,464) -
Deductions from net assets attributed to:
Distributions to participants 84 20 467 35,028
Loans to participants 23 15 (9,750) -
Administrative expenses - - - 81
Total Deductions 107 35 (9,283) 35,109
Net increase / (decrease) prior to
transfers 68 (15) 2,233 129,909
Inter-fund transfers (156) (13) - -
Net assets transferred out of Plan - - - (294)
Net increase / (decrease) (88) (28) 2,233 129,615
Net Assets Available for Benefits
December 31, 1997 1,582 723 15,663 679,833
Net Assets Available for Benefits
December 31, 1998 $ 1,494 $ 695 $ 17,896 $ 809,448
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED TECHNOLOGIES CORPORATION
REPRESENTED EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
NOTE 1 - DESCRIPTION OF THE PLAN
General. The United Technologies Corporation (UTC) Represented Employee Savings
Plan (the Plan) is a defined contribution savings plan administered by UTC. It
is subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA). Union represented employees of UTC, covered by collective
bargaining agreements that provide for Plan participation, are eligible to
participate in the Plan after completing at least one year of service. The
following is a brief description of the Plan. For more complete information,
participants should refer to the Plan document which is available from UTC.
Contributions and Vesting. All participants may elect, through payroll
deductions, to make tax deferred contributions of between $2 per week and the
maximum amount permitted by the relevant collective bargaining agreement.
Certain participants, depending on their collective bargaining agreement, may
also make after-tax contributions. Participant contributions, plus actual
earnings thereon, are fully vested at all times under the Plan. The employer
will match 50 percent of the participant's contributions, up to specified
limits. Generally, employer contributions, plus actual earnings thereon, become
fully vested after two years of Plan participation.
Certain participants may also make limited tax-deferred or after-tax
contributions to an individual medical account (IMA) or tax-deferred
contributions for cost of living adjustments (COLA), where permitted. The
employer will match 75 percent of the participant's IMA contribution. All
contributions to an IMA will be invested 100 percent in the Income Fund and may
not be withdrawn until retirement or termination.
Participant Accounts. Each participant's account is credited with the
participant's contributions and allocations of (a) UTC's contributions based on
a percentage of the participant's contribution and (b) Plan earnings based on
account balances. The benefit to which a participant is entitled is the benefit
that can be provided from the participant's vested account. Forfeited balances
of terminated participants' nonvested amounts are used to reduce future UTC
contributions. For the period ended December 31, 1998, approximately $11,500 of
forfeitures were used to fund UTC's contributions.
Trustee and Recordkeeper. All of the Plan's assets are held by Bankers Trust
Company, the Plan Trustee. Fidelity Institutional Retirement Services Company
performs participant account recordkeeping responsibilities.
Investment Options. Participants may elect to allocate their contributions in
any whole percentage among the following funds. Participants are permitted to
transfer their accounts between investment funds daily in any whole percentage
or whole dollar amount. The investment funds are as follows:
. The Income Fund invests in contracts issued by five insurance companies. See
Note 3. In December of 1997, UTC approved a reverse unit split of the units
of participation and the unit value of the Income Fund effective as of
January 1, 1998. As a result, the units of participation and the unit value
was decreased and increased, respectively, by a factor of ten. All units of
participation and unit value amounts presented herein have been restated to
reflect the reverse unit split.
. The Equity Fund invests in a portfolio of common stocks replicating the
Standard & Poor's Composite Index of 500 stocks (S&P 500).
. The Small Company Stock Index Fund invests in a portfolio of common stocks
replicating the Russell 2000 Index.
. The International Equity Index Fund invests in the equities of a mix of stock
markets outside the U.S.
. The Global Fund invests in both U.S. and foreign investments to replicate the
performance, in approximately equal portions, of three indices: the S&P 500,
the EAFE Index (an international stock index of large companies in Europe,
Australia and the Far East), and the Lehman Brothers Government/Corporate
Index.
. The UTC Common Stock Fund consists principally of 533,240 and 570,464 shares
of UTC Common Stock at December 31, 1998 and 1997, respectively. See Note 6.
. The INVESCO Total Return Fund, a registered investment company, principally
invests in both equity and fixed or variable income securities to achieve a
moderate total return from capital appreciation and current income.
. The Fidelity Growth & Income Portfolio, a registered investment company,
principally invests in U.S. and foreign equity securities that pay current
dividends and show potential earnings growth.
. The Putnam Fund for Growth and Income, a registered investment company,
principally invests in equity securities of companies that pay regular
dividends to shareowners.
. The Fidelity Contrafund, a registered investment company, principally invests
in equity securities of U.S. and foreign companies believed to be undervalued
or out of favor.
. The Fidelity Low-Priced Stock Fund, a registered investment company,
principally invests in equity securities of companies believed to be
undervalued, overlooked or out of favor, which are generally priced at $35 or
less.
. The PBHG Growth Fund, a registered investment company, principally invests in
equity securities of companies believed to have an outlook for strong
earnings growth.
. The Putnam New Opportunities Fund, a registered investment company,
principally invests in equity securities of companies in certain emerging
industry groups.
. The SoGen International Fund, Inc., a registered investment company, invests
in U.S. and foreign equity, fixed income and gold-related securities and
cash.
. The Templeton Foreign Fund A (formerly the Templeton Foreign Fund I), a
registered investment company, principally invests in equity securities of
companies in developed and developing countries outside the U.S.
. The Templeton Developing Markets Trust A (formerly the Templeton Developing
Markets Trust I), a registered investment company, principally invests in
equity securities of companies in developing countries.
Participant Loans. Certain participants with at least two years of Plan
participation are allowed to borrow up to 50 percent of their vested account
balances excluding IMA and COLA. Loan amounts can range from $1,000 to $50,000
and must be repaid within 5 years. The loans are secured by the balance in the
participant's account and bear interest at Bankers Trust's prime rate plus one
percent. Principal and interest are paid ratably through payroll deductions.
Payment of Benefits. Generally, benefits are paid in a lump sum to terminating
participants. Participants terminating due to retirement may elect to receive
benefits in installments over two to twenty years. At the participant's
election, the portion of a lump sum distribution attributable to the UTC Common
Stock Fund may be paid in shares of UTC Common Stock instead of cash.
Distributions in UTC Common Stock for the period ended December 31, 1998 were
approximately $70,800.
Other. Participants who transfer to a new UTC location with a different savings
plan may have the option of transferring their account balances in accordance
with the provisions of the new savings plan.
NOTE 2 - SUMMARY OF ACCOUNTING PRINCIPLES
Basis of Accounting. The financial statements of the Plan are prepared under
the accrual method of accounting, except for benefits which are recorded when
paid.
Master Trust. The Plan's assets are kept in a Master Trust maintained by the
Trustee. Under the Master Trust agreement, the assets of certain employee
savings plans of UTC and its subsidiaries are combined. Participating Plans
purchase units of participation in the investment funds based on their
contribution to such funds and the unit value of the applicable investment fund
at the end of the trading day in which a transaction occurs. The unit value of
each fund is determined at the close of each day by dividing the sum of
uninvested cash, accrued income and the current value of investments by the
total number of outstanding units in such funds. Income from the funds'
investments increases the Plans' unit values. Distributions to participants
reduce the number of participation units held by the Plans.
At December 31, 1998, the Plan's interest in the Master Trust comprised
40,075,357 units of the 522,172,913 total units of participation, or 7.68%. At
December 31, 1997, the Plan's interest in the Master Trust comprised 38,380,493
units of the total 534,787,672 units of participation, or 7.18%.
Investment Valuation. The Income Fund's investment contracts are stated at
contract value which represents contributions plus earnings, less Plan
withdrawals. All other funds are stated at fair value, as determined by the
Trustee, typically by reference to published market data.
Plan Expenses. Plan administrative expenses, including Trustee and recordkeeping
fees, were paid directly by the employer in 1998. The employer also paid
certain investment management fees for the Bankers Trust managed funds. All
other administrative and investment expenses were paid out of Plan assets.
Use of Estimates. The preparation of financial statements requires UTC to make
estimates and assumptions that affect the reported amounts in the financial
statements. Actual results could differ from those estimates.
NOTE 3 - INVESTMENT CONTRACTS
Under these contracts, each insurance company guarantees repayment in full of
the principal amount invested plus interest credited at a fixed rate for a
specified period. Interest is credited to each contract based on an annual
interest rate set each year by the individual insurance companies. This rate,
which differs among contracts, takes into account any difference between prior
year credited interest and the actual amount of investment earnings allocable
to the contract in accordance with the established allocation procedures of the
insurance company. The interest rates earned for 1998 and 1997 were 8.5% and
8.1%, respectively.
The following is a summary of the investment contracts held in the Income Fund
and the portion allocable to the Plan:
<TABLE>
<CAPTION>
(Thousand of Dollars) December 31, December 31,
1998 1997
<S> <C> <C>
CIGNA $ 1,590,214 $ 1,456,404
Aetna 471,765 437,582
Travelers 398,146 367,509
Prudential 252,192 231,133
Metropolitan Life 1,019,272 780,096
$ 3,731,589 $ 3,272,724
Amount of the contracts allocable to the Plan $ 473,892 $ 413,162
</TABLE>
NOTE 4 - PLAN TERMINATION
Although it has not expressed any intent to do so, UTC has the right under the
Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested in their accounts.
NOTE 5 - TAX STATUS
The Internal Revenue Service has determined and informed UTC by letter dated
February 8, 1996 that the Plan and related trust are designed in accordance with
applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended since receiving the determination letters. However, the Plan
administrator and tax counsel believe that the Plan is designed and currently
being operated in compliance with the applicable requirements of the IRC.
NOTE 6 - SUBSEQUENT EVENTS
On April 30, 1999, the Board of Directors of UTC declared a 2 for 1 stock split
in the form of a stock dividend payable May 17, 1999 to shareowners of record at
the close of business on May 7, 1999. The share amounts reflected herein do not
reflect the stock split.
On May 4, 1999, UTC completed the sale of its UT Automotive Corporation (UTA)
subsidiary to Lear Corporation. Plan participants include employees of UTA.
UTA employees have the option to transfer their account balances or leave their
investments in the Plan. These employees were permitted to continue making
contributions to the Plan through May 31, 1999.
<PAGE>
SIGNATURES
The Plan (or other persons who administer the employee benefit plan), pursuant
to the requirements of the Securities Exchange Act of 1934, has duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
UNITED TECHNOLOGIES CORPORATION
REPRESENTED EMPLOYEE SAVINGS PLAN
Dated: June 28, 1999 By: /s/ Daniel P. O'Connell
Daniel P. O'Connell
Corporate Director, Employee Benefits and Human
Resources Systems
United Technologies Corporation
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-26580) of United Technologies Corporation of our
report dated June 28, 1999 appearing in the United Technologies Corporation
Represented Employee Savings Plan's Annual Report on Form 11-K for the year
ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Hartford, Connecticut
June 28, 1999
