<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
UTC SAVINGS PLAN FOR HOURLY
MANAGEMENT-REPRESENTED EMPLOYEES
UNITED TECHNOLOGIES CORPORATION
One Financial Plaza
Hartford, Connecticut 06101
<PAGE>
FINANCIAL STATEMENTS OF THE UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED
EMPLOYEES
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
the UTC Savings Plan for Hourly
Management-Represented Employees
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 UTC Savings Plan For
Hourly Management-Represented Employees 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>
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES
Statement of Net Assets Available for Benefits With Fund Information
December 31, 1998
<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 $ - $ 869,825 $ - $ - $ 42,826 $ - $ -
Russell 2000 Equity Index Fund - - 22,461 - - - -
Daily Japanese Equity Index Fund - - - 2,125 - - -
Daily Non Japanese Equity Index Fund - - - 7,982 - - -
Government/Corporate Fixed Income
Index Fund - - - - 34,904 - -
Daily International Equity Index Fund - - - - 42,374 - -
United Technologies Corporation Common
Stock - - - - - 266,997 -
Shares of respective registered investment
companies - - - - - - 68,399
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value 4,798,401 - - - - - -
Participant loans, at cost - - - - - - -
Temporary investments, at cost plus
accrued interest - - - - - 1,331 -
Total Investments 4,798,401 869,825 22,461 10,107 120,104 268,328 68,399
-
Plan receivables 3,752 - - - - 2,997 -
Total Assets 4,802,153 869,825 22,461 10,107 120,104 271,325 68,399
Liabilities:
Accrued expenses - - - - - 684 -
Loans payable, net - - - - - - -
Total Liabilities - - - - - 684 -
Net Assets Available for Benefits $4,802,153 $ 869,825 $ 22,461 $ 10,107 $ 120,104 $ 270,641 $ 68,399
Units of participation 71,760 32,144 1,883 797 41,848 14,854 2,181
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>
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES
Statement of Net Assets Available for Benefits With Fund Information (Continued)
December 31, 1998
<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>
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 341,591 99,336 119,070 69,652 80,045 144,300 7,180
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 341,591 99,336 119,070 69,652 80,045 144,300 7,180
Plan receivables - - - - - - -
Total Assets 341,591 99,336 119,070 69,652 80,045 144,300 7,180
Liabilities:
Accrued expenses - - - - - - -
Loans payable, net - - - - - - -
Total Liabilities - - - - - - -
Net Assets Available for Benefits $ 341,591 $ 99,336 $ 119,070 $ 69,652 $ 80,045 $ 144,300 $ 7,180
Units of participation 7,452 4,841 2,097 3,048 3,134 2,440 312
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>
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES
Statement of Net Assets Available for Benefits With Fund Information (Continued)
December 31, 1998
<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 $ - $ - $ - $ 912,651
Russell 2000 Equity Index Fund - - - 22,461
Daily Japanese Equity Index Fund - - - 2,125
Daily Non Japanese Equity Index Fund - - - 7,982
Government/Corporate Fixed Income
Index Fund - - - 34,904
Daily International Equity Index Fund - - - 42,374
United Technologies Corporation Common
Stock - - - 266,997
Shares of respective registered
investment companies 34,931 17,314 - 981,818
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value - - - 4,798,401
Participant loans, at cost - - 256,444 256,444
Temporary investments, at cost plus
accrued interest - - - 1,331
Total Investments 34,931 17,314 256,444 7,327,488
Plan receivables - - - 6,749
Total Assets 34,931 17,314 256,444 7,334,237
Liabilities:
Accrued expenses - - - 684
Loans payable, net - - - -
Total Liabilities - - - 684
Net Assets Available for Benefits $ 34,931 $ 17,314 $ 256,444 $ 7,333,553
Units of participation 4,163 1,681 256,444
Unit value $ 8.39 $ 10.30 $ 1.00
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES
Statement of Net Assets Available for Benefits With Fund Information
December 31, 1997
<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 $ - $ 492,470 $ - $ - $ 33,343 $ - $ -
Russell 2000 Equity Index Fund - - 10,189 - - - -
Daily Japanese Equity Index Fund - - - 853 - - -
Daily Non Japanese Equity Index Fund - - - 2,560 - - -
Government/Corporate Fixed Income
Index Fund - - - - 27,280 - -
Daily International Equity Index Fund - - - - 31,992 - -
United Technologies Corporation Common
Stock - - - - - 104,700 -
Shares of respective registered investment
companies - - - - - - 43,015
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value 3,777,373 - - - - - -
Participant loans, at cost - - - - - - -
Temporary investments, at cost plus
accrued interest - - - - - 1,572 -
Total Investments 3,777,373 492,470 10,189 3,413 92,615 106,272 43,015
Plan receivables 1,171 - - - - 224 -
Total Assets 3,778,544 492,470 10,189 3,413 92,615 106,496 43,015
Liabilities:
Accrued expenses - - - - - 676 -
Loans payable, net - - - - - - -
Total Liabilities - - - - - 676 -
Net Assets Available for Benefits $3,778,544 $ 492,470 $ 10,189 $ 3,413 $ 92,615 $ 105,820 $ 43,015
Units of participation 61,248 23,427 842 324 38,950 8,761 1,479
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>
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES
Statement of Net Assets Available for Benefits With Fund Information (Continued)
December 31, 1997
<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>
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 166,622 43,507 22,980 56,551 54,493 45,721 7,965
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 166,622 43,507 22,980 56,551 54,493 45,721 7,965
Plan receivables - - - - - - -
Total Assets 166,622 43,507 22,980 56,551 54,493 45,721 7,965
Liabilities:
Accrued expenses - - - - - - -
Loans payable, net - - - - - - -
Total Liabilities - - - - - - -
Net Assets Available for Benefits $ 166,622 $ 43,507 $ 22,980 $ 56,551 $ 54,493 $ 45,721 $ 7,965
Units of participation 4,373 2,224 493 2,250 2,146 931 313
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>
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES
Statement of Net Assets Available for Benefits With Fund Information (Continued)
December 31, 1997
<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 $ - $ - $ - $ 525,813
Russell 2000 Equity Index Fund - - - 10,189
Daily Japanese Equity Index Fund - - - 853
Daily Non Japanese Equity Index Fund - - - 2,560
Government/Corporate Fixed Income
Index Fund - - - 27,280
Daily International Equity Index Fund - - - 31,992
United Technologies Corporation Common
Stock - - - 104,700
Shares of respective registered
investment companies 30,483 18,525 - 489,862
Investments, at contract value or cost:
Beneficial interests in investment
contracts, at contract value - - - 3,777,373
Participant loans, at cost - - 214,335 214,335
Temporary investments, at cost plus
accrued interest - - - 1,572
Total Investments 30,483 18,525 214,335 5,186,529
Plan receivables - - - 1,395
Total Assets 30,483 18,525 214,335 5,187,924
Liabilities:
Accrued expenses - - - 676
Loans payable, net - - - -
Total Liabilities - - - 676
Net Assets Available for Benefits $ 30,483 $ 18,525 $ 214,335 $ 5,187,248
Units of participation 3,064 1,432 214,335
Unit value $ 9.95 $ 12.94 $ 1.00
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES
Statement of Net Assets Available for Benefits With Fund Information
December 31, 1998
<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 $ - $ 166,849 $ (722) $ 1,100 $ 19,926 $ 72,328 $ 3,809
Interest 342,643 - - - - - -
Dividends - - - - - - 3,153
Total Investment Income 342,643 166,849 (722) 1,100 19,926 72,328 6,962
Contributions:
Participants' 558,419 171,381 12,878 4,065 27,558 98,722 14,488
Employer's 528,834 72,220 1,956 291 3,717 22,056 1,658
Total Contributions 1,087,253 243,601 14,834 4,356 31,275 120,778 16,146
Repayments on loans 99,917 12,847 138 52 2,647 3,936 374
Deductions from net assets attributed to:
Distributions to participants 344,665 16,666 28 51 6,322 8,036 411
Loans to participants 120,704 32,498 801 122 5,802 7,065 1,601
Administrative expenses 2,336 305 - 43 154 8 43
Total Deductions 467,705 49,469 829 216 12,278 15,109 2,055
Net increase / (decrease) prior to
transfers 1,062,108 373,828 13,421 5,292 41,570 181,933 21,427
Inter-fund transfers (30,634) 3,527 (1,149) 1,402 (14,081) (17,112) 3,957
Assets transferred out of Plan (7,865) - - - - - -
Net increase / (decrease) 1,023,609 377,355 12,272 6,694 27,489 164,821 25,384
Net Assets Available for Benefits
December 31, 1997 3,778,544 492,470 10,189 3,413 92,615 105,820 43,015
Net Assets Available for Benefits
December 31, 1998 $4,802,153 $ 869,825 $ 22,461 $ 10,107 $ 120,104 $ 270,641 $ 68,399
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES
Statement of Net Assets Available for Benefits With Fund Information (Continued)
December 31, 1998
<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 $ 50,149 $ 2,035 $ 12,301 $ (4,709) $ 1,401 $ 17,251 $ (702)
Interest - - - - - - -
Dividends 16,426 8,324 8,648 5,209 - 4,322 620
Total Investment Income 66,575 10,359 20,949 500 1,401 21,573 (82)
Contributions:
Participants' 79,168 26,929 49,882 20,252 30,747 60,331 3,103
Employer's 11,960 4,335 3,076 2,139 4,274 6,973 544
Total Contributions 91,128 31,264 52,958 22,391 35,021 67,304 3,647
Repayments on loans 3,282 1,081 1,699 893 1,012 174 97
Deductions from net assets attributed to:
Distributions to participants 17,344 700 1,105 125 2,051 2,417 5
Loans to participants 2,132 1,986 1,582 335 77 75 339
Administrative expenses - - 39 8 8 11 -
Total Deductions 19,476 2,686 2,726 468 2,136 2,503 344
Net increase / (decrease) prior to
transfers 141,509 40,018 72,880 23,316 35,298 86,548 3,318
Inter-fund transfers 33,460 15,811 23,210 (10,215) (9,746) 12,031 (4,103)
Assets transferred out of Plan - - - - - - -
Net increase / (decrease) 174,969 55,829 96,090 13,101 25,552 98,579 (785)
Net Assets Available for Benefits
December 31, 1997 166,622 43,507 22,980 56,551 54,493 45,721 7,965
Net Assets Available for Benefits
December 31, 1998 $ 341,591 $ 99,336 $ 119,070 $ 69,652 $ 80,045 $ 144,300 $ 7,180
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES
Statement of Net Assets Available for Benefits With Fund Information (Continued)
December 31, 1998
<CAPTION>
Templeton
Templeton Developing
Foreign Markets
Fund A Trust A Loan Fund Total
<C> <C> <C> <C> <C>
Additions to net assets attributed to:
<S>
Investment Income:
Net appreciation / (depreciation) in fair
value of investments $ (5,915) $ (3,987) $ - $ 331,114
Interest - - 19,798 362,441
Dividends 3,518 361 - 50,581
Total Investment Income (2,397) (3,626) 19,798 744,136
Contributions:
Participants' 10,368 4,224 - 1,172,515
Employer's 882 199 - 665,114
Total Contributions 11,250 4,423 - 1,837,629
Repayments on loans 253 326 (128,728) -
Deductions from net assets attributed to:
Distributions to participants - - 24,714 424,640
Loans to participants 399 235 (175,753) -
Administrative expenses - - - 2,955
Total Deductions 399 235 (151,039) 427,595
Net increase / (decrease) prior to
transfers 8,707 888 42,109 2,154,170
Inter-fund transfers (4,259) (2,099) - -
Assets transferred out of Plan - - - (7,865)
Net increase / (decrease) 4,448 (1,211) 42,109 2,146,305
Net Assets Available for Benefits
December 31, 1997 30,483 18,525 214,335 5,187,248
Net Assets Available for Benefits
December 31, 1998 $ 34,931 $ 17,314 $ 256,444 $ 7,333,553
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UTC SAVINGS PLAN FOR HOURLY MANAGEMENT-REPRESENTED EMPLOYEES
Notes to Financial Statements
NOTE 1 - DESCRIPTION OF THE PLAN
General. The UTC Savings Plan for Hourly Management-Represented Employees
(formerly the UT Automotive Savings Plan for Hourly Management-Represented
Employees) (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). During 1998, non-
union hourly employees of certain divisions of Carrier and UT Automotive Corpor-
ation (UTA) were 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. As described in Note 6, UTC sold its UTA subsidiary on
May 4, 1999.
Contributions and Vesting. Participants may elect to contribute, through
payroll deductions, between 1 and 16 percent of their total compensation.
Participant contributions, plus actual earnings thereon, are fully vested at all
times under the Plan. Carrier and UTA (the Employer) contribute specified
amounts to the Plan in accordance with the terms outlined in the respective
employment agreements. Generally, the Employer's 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 $2,900 of
forfeitures were used to fund Employer'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 2,455 and 1,438 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 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 account balances,
excluding employer contributions. 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 $1,400.
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
451,079 units of the 522,172,913 total units of participation, or 0.09%. At
December 31, 1997, the Plan's interest in the Master Trust comprised 366,592
units of the total 534,787,672 units of participation, or 0.07%.
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 proce-
dures 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>
December 31, December 31,
1998 1997
<S> <C> <C>
CIGNA $ 1,590,214,600 $ 1,456,403,738
Aetna 471,765,293 437,582,101
Travelers 398,145,628 367,508,974
Prudential 252,192,024 231,133,416
Metropolitan Life 1,019,271,695 780,096,192
$ 3,731,589,240 $ 3,272,724,421
Amount of the contracts allocable to the Plan $ 4,798,401 $ 3,777,373
</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 27, 1998, 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 letter. 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
During 1998, UTC approved the merger of certain defined contribution plans of
Tyler Refrigeration Corporation (a subsidiary of Carrier Corporation) into the
Plan effective January 1, 1999. Participants of the former Tyler Refrigeration
Corporation defined contribution plans are eligible to participate in the Plan
effective January 1, 1999. On February 26, 1999, approximately $25,300,000 of
net assets was transferred into the Plan.
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 its sale of UTA to Lear Corporation. 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.
UTC SAVINGS PLAN FOR HOURLY
MANAGEMENT-REPRESENTED EMPLOYEES
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. 333-18743) of United Technologies Corporation of our
report dated June 28, 1999 appearing in the UTC Savings Plan for Hourly,
Management-Represented Employees Annual Report on Form 11-K for the year ended
December 31, 1998.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Hartford, Connecticut
June 28, 1999
