<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
CARRIER CORPORATION
REPRESENTED EMPLOYEE SAVINGS PLAN
UNITED TECHNOLOGIES CORPORATION
One Financial Plaza
Hartford, Connecticut 06101
<PAGE>
FINANCIAL STATEMENTS OF THE CARRIER CORPORATION
REPRESENTED EMPLOYEE SAVINGS PLAN
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
the Carrier 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 Carrier 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>
CARRIER CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Benefits With Fund Information
December 31, 1998
(Thousands of Dollars, except unit amount)
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 $ - $ 24,548 $ - $ - $ 223 $ - $ -
Russell 2000 Equity Index Fund - - 264 - - - -
Daily Japanese Equity Index Fund - - - 16 - - -
Daily Non Japanese Equity Index Fund - - - 60 - - -
Government/Corporate Fixed Income
Index Fund - - - - 181 - -
Daily International Equity Index Fund - - - - 220 - -
United Technologies Corporation Common
Stock - - - - - 9,727 -
Shares of respective registered
investment companies - - - - - - 187
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value 42,162 - - - - - -
Participant loans, at cost - - - - - - -
Temporary investments, at cost plus
accrued interest - - - - - 49 -
Total Investments 42,162 24,548 264 76 624 9,776 187
Plan receivables 33 - - - - 109 -
Total Assets 42,195 24,548 264 76 624 9,885 187
Liabilities:
Accrued expenses - - - - - 25 -
Loans payable, net - - - - - - -
Total Liabilities - - - - - 25 -
Net Assets Available for Benefits $ 42,195 $ 24,548 $ 264 $ 76 $ 624 $ 9,860 $ 187
Units of participation 630,529 907,182 22,151 5,981 217,351 541,169 5,949
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>
CARRIER 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 2,868 1,066 788 411 797 1,626 78
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 2,868 1,066 788 411 797 1,626 78
Plan receivables - - - - - - -
Total Assets 2,868 1,066 788 411 797 1,626 78
Liabilities:
Accrued expenses - - - - - - -
Loans payable, net - - - - - - -
Total Liabilities - - - - - - -
Net Assets Available for Benefits $ 2,868 $ 1,066 $ 788 $ 411 $ 797 $ 1,626 $ 78
Units of participation 62,567 51,926 13,875 17,983 31,222 27,496 3,405
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>
CARRIER 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>
Assets:
Investments, at fair value:
Beneficial interests in Bankers Trust
Company Pyramid:
Large Capitalization Equity Index Fund $ - $ - $ - $ 24,771
Russell 2000 Equity Index Fund - - - 264
Daily Japanese Equity Index Fund - - - 16
Daily Non Japanese Equity Index Fund - - - 60
Government/Corporate Fixed Income
Index Fund - - - 181
Daily International Equity Index Fund - - - 220
United Technologies Corporation Common
Stock - - - 9,727
Shares of respective registered
investment companies 220 84 - 8,125
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value - - - 42,162
Participant loans, at cost - - 2,465 2,465
Temporary investments, at cost plus
accrued interest - - - 49
Total Investments 220 84 2,465 88,040
Plan receivables - - - 142
Total Assets 220 84 2,465 88,182
Liabilities:
Accrued expenses - - - 25
Loans payable, net - - - -
Total Liabilities - - - 25
Net Assets Available for Benefits $ 220 $ 84 $ 2,465 $ 88,157
Units of participation 26,169 8,128 2,465,076
Unit value $ 8.39 $ 10.30 $ 1.00
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CARRIER 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 $ - $ 18,072 $ - $ - $ 182 $ - $ -
Russell 2000 Equity Index Fund - - 257 - - - -
Daily Japanese Equity Index Fund - - - 14 - - -
Daily Non Japanese Equity Index Fund - - - 40 - - -
Government/Corporate Fixed Income
Index Fund - - - - 149 - -
Daily International Equity Index Fund - - - - 175 - -
United Technologies Corporation Common
Stock - - - - - 6,573 -
Shares of respective registered
investment companies - - - - - - 71
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value 35,463 - - - - - -
Participant loans, at cost - - - - - - -
Temporary investments, at cost plus
accrued interest - - - - - 99 -
Total Investments 35,463 18,072 257 54 506 6,672 71
Plan receivables 48 17 - - 1 24 -
Total Assets 35,511 18,089 257 54 507 6,696 71
Liabilities:
Accrued expenses - - - - - 42 -
Loans payable, net - - - - - - -
Total Liabilities - - - - - 42 -
Net Assets Available for Benefits $ 35,511 $ 18,089 $ 257 $ 54 $ 507 $ 6,654 $ 71
Units of participation 575,543 860,566 21,273 5,160 212,926 550,816 2,439
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>
CARRIER 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 1,101 584 418 336 758 798 70
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 1,101 584 418 336 758 798 70
Plan receivables 2 1 1 1 2 1 -
Total Assets 1,103 585 419 337 760 799 70
Liabilities:
Accrued expenses - - - - - - -
Loans payable, net - - - - - - -
Total Liabilities - - - - - - -
Net Assets Available for Benefits $ 1,103 $ 585 $ 419 $ 337 $ 760 $ 799 $ 70
Units of participation 28,958 29,895 8,998 13,401 29,931 16,269 2,746
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>
CARRIER 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>
Assets:
Investments, at fair value:
Beneficial interests in Bankers Trust
Company Pyramid:
Large Capitalization Equity Index Fund $ - $ - $ - $ 18,254
Russell 2000 Equity Index Fund - - - 257
Daily Japanese Equity Index Fund - - - 14
Daily Non Japanese Equity Index Fund - - - 40
Government/Corporate Fixed Income
Index Fund - - - 149
Daily International Equity Index Fund - - - 175
United Technologies Corporation Common
Stock - - - 6,573
Shares of respective registered
investment companies 162 65 - 4,363
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value - - - 35,463
Participant loans, at cost - - 1,628 1,628
Temporary investments, at cost plus
accrued interest - - - 99
Total Investments 162 65 1,628 67,015
Plan receivables - - - 98
Total Assets 162 65 1,628 67,113
Liabilities:
Accrued expenses - - - 42
Loans payable, net - - - -
Total Liabilities - - - 42
Net Assets Available for Benefits $ 162 $ 65 $ 1,628 $ 67,071
Units of participation 16,301 5,001 1,627,581
Unit value $ 9.95 $ 12.94 $ 1.00
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CARRIER 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 $ - $ 5,280 $ (10) $ 9 $ 104 $ 3,317 $ 9
Interest 3,119 - - - - - -
Dividends - - - - - - 9
Total Investment Income 3,119 5,280 (10) 9 104 3,317 18
Contributions:
Participants' 4,368 2,162 57 19 110 1,137 65
Employer's 1,469 648 17 6 35 352 17
Total Contributions 5,837 2,810 74 25 145 1,489 82
Repayments on loans 469 267 7 1 7 176 1
Deductions from net assets attributed to:
Distributions to participants 2,388 854 2 2 17 362 2
Loans to participants 844 524 11 - 12 220 2
Administrative expenses 16 4 - - - 2 -
Total Deductions 3,248 1,382 13 2 29 584 4
Net increase / (decrease) prior to
transfers 6,177 6,975 58 33 227 4,398 97
Inter-fund transfers 507 (516) (51) (11) (110) (1,192) 19
Net increase 6,684 6,459 7 22 117 3,206 116
Net Assets Available for Benefits
December 31, 1997 35,511 18,089 257 54 507 6,654 71
Net Assets Available for Benefits
December 31, 1998 $ 42,195 $ 24,548 $ 264 $ 76 $ 624 $ 9,860 $ 187
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CARRIER 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 $ 352 $ 22 $ 109 $ (36) $ (5) $ 200 $ (7)
Interest - - - - - - -
Dividends 136 94 58 34 - 50 7
Total Investment Income 488 116 167 (2) (5) 250 -
Contributions:
Participants' 376 157 122 111 154 223 17
Employer's 107 43 35 29 45 60 5
Total Contributions 483 200 157 140 199 283 22
Repayments on loans 26 9 4 5 11 14 1
Deductions from net assets attributed to:
Distributions to participants 36 13 65 8 24 72 1
Loans to participants 29 9 6 13 20 17 2
Administrative expenses - - - - - - -
Total Deductions 65 22 71 21 44 89 3
Net increase / (decrease) prior to
transfers 932 303 257 122 161 458 20
Inter-fund transfers 833 178 112 (48) (124) 369 (12)
Net increase 1,765 481 369 74 37 827 8
Net Assets Available for Benefits
December 31, 1997 1,103 585 419 337 760 799 70
Net Assets Available for Benefits
December 31, 1998 $ 2,868 $ 1,066 $ 788 $ 411 $ 797 $ 1,626 $ 78
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
CARRIER 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 $ (34) $ (23) $ - $ 9,287
Interest - - 175 3,294
Dividends 21 2 - 411
Total Investment Income (13) (21) 175 12,992
Contributions:
Participants' 43 15 - 9,136
Employer's 12 4 - 2,884
Total Contributions 55 19 - 12,020
Repayments on loans 1 - (999) -
Deductions from net assets attributed to:
Distributions to participants 6 2 50 3,904
Loans to participants 1 1 (1,711) -
Administrative expenses - - - 22
Total Deductions 7 3 (1,661) 3,926
Net increase / (decrease) prior to
transfers 36 (5) 837 21,086
Inter-fund transfers 22 24 - -
Net increase 58 19 837 21,086
Net Assets Available for Benefits
December 31, 1997 162 65 1,628 67,071
Net Assets Available for Benefits
December 31, 1998 $ 220 $ 84 $ 2,465 $ 88,157
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CARRIER CORPORATION REPRESENTED EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
NOTE 1 - DESCRIPTION OF THE PLAN
General. The Carrier Corporation Represented Employee Savings Plan (the Plan)
is a defined contribution savings plan administered by United Technologies
Corporation (UTC). It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA). Union represented employees of Carrier,
covered by a collective bargaining agreement that provides 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 after-tax contributions of between $2 per week and a maximum
amount as permitted by the relevant collective bargaining agreement. Certain
participants, depending on their collective bargaining agreement, may also make
tax-deferred contributions. Participant contributions, plus actual earnings
thereon, are fully vested at all times under the Plan. The employer will
contribute specified amounts to the Plan in accordance with the terms outlined
in each collective bargaining agreement. Generally, employer contributions, plus
actual earnings thereon, become fully vested after two years of Plan
participation.
Participant Accounts. Each participant's account is credited with the
participant's contributions and allocations of (a) UTC's contributions based on
a percentage of the participant's contribution and (b) Plan earnings based on
account balances. The benefit to which a participant is entitled is the benefit
that can be provided from the participant's vested account. Forfeited balances
of terminated participants' nonvested amounts are used to reduce future employer
contributions. For the period ended December 31, 1998, approximately $19,000
of forfeitures were used to fund employer 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 89,447 and 90,276 shares of
UTC Common Stock at December 31, 1998 and 1997, respectively. 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.
. 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. Loan amounts can range from $1,000 to $50,000 and must be repaid
within 5 years. The loans are secured by the balance in the participant's
account and bear interest at Bankers Trust's prime rate plus one percent.
Principal and interest are paid ratably through payroll deductions.
Payment of Benefits. Generally, benefits are paid in a lump sum to a
terminating participant. A participant terminating due to retirement may elect
to receive benefits in installments over two to twenty years. At the
participant's election, the portion of a lump sum distribution attributable to
the UTC Common Stock Fund may be paid in shares of UTC Common Stock instead of
cash. Distributions in UTC Common Stock for the period ended December 31,1998
were approximately $11,000.
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
5,038,159 units of the 522,172,913 total units of participation, or 0.96%. At
December 31, 1997, the Plan's interest in the Master Trust comprised 4,007,804
units of the total 534,787,672 units of participation, or 0.75%.
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>
(Thousands 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 $ 42,162 $ 35,463
</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
September 23, 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.
<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.
CARRIER 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. 33-11255) of United Technologies Corporation of our
report dated June 28, 1999 appearing in the Carrier Corporation Represented
Employee Savings Plan's Annual Report on Form 11-K for the period ended December
31, 1998.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Hartford, Connecticut
June 28, 1999