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Form 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the Plan Period Ended December 31, 1999
Commission File Number 1-5358
SUNDSTRAND COPRORATION
ROCKFORD FACTORY EMPLOYEE SAVINGS PLAN
UNITED TECHNOLOGIES CORPORATION
One Financial Plaza
Hartford, Connecticut 06101
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FINANCIAL STATEMENTS OF THE SUNDSTRAND
CORPORATION ROCKFORD FACTORY EMPLOYEE SAVINGS PLAN
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of the
Sundstrand Corporation
Rockford Factory Employee Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Sundstrand Corporation Rockford Factory Employee Savings Plan (the
"Plan") at December 31, 1999, and the changes in net assets available for
benefits for the period ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States. 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 audit. We did not
audit the statement of net assets available for benefits at December 31,1998.
Those financial statements were audited by other auditors whose report has been
furnished to us, and our opinion is based solely on the report of the other
auditors. We conducted our audit of these statements in accordance with
auditing standards generally accepted in the United States, 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 audit provides a reasonable basis
for the opinion expressed above.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audit 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, CT
June 28, 2000
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Report of Independent Auditors
Participants and Administrator of the
Sundstrand Corporation
Rockford Factory Employee Savings Plan
We have audited the accompanying statement of net assets available for benefits
of the Sundstrand Corporation Rockford Factory Employee Savings Plan as of
December 31, 1998. The statement of net assets available for benefits is the
responsibility of the Plan's management. Our responsibility is to express an
opinion on the statement of net assets available for benefits based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted
in the Untied States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the statement of net assets
available for benefits is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement of net assets available for benefits. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above present fairly, in all
material respects, the net assets available for benefits of the Plan at December
31, 1998, in conformity with accounting principles generally accepted in the
United States.
/s/ Ernst & Young LLP
Ernst & Young LLP
May 28, 1999
Chicago, Illinois
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Sundstrand Corporation Rockford Factory
Employee Savings Plan
Statements of Net Assets Available for Benefits
(Thousands of Dollars)
December 31, December 31,
1999 1998
Assets:
Investments (Note 3) $41,333 $33,800
Loans to participants 2,461 2,352
Net Assets Available for Benefits $43,794 $36,152
The accompanying notes are an integral part of these financial statements.
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Sundstrand Corporation Rockford Factory
Employee Savings Plan
Statement of Changes in Net Assets Available for Benefits
(Thousands of Dollars)
Year Ended
December 31,
1999
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 5,704
Interest 194
Dividends 1,783
Contributions:
Participants' 4,304
Total additions 11,985
Deductions from net assets attributed to:
Distributions to participants (4,332)
Administrative expenses (11)
Total deductions (4,343)
Net increase 7,642
Net Assets Available for Benefits, December 31, 1998 36,152
Net Assets Available for Benefits, December 31, 1999 $43,794
The accompanying notes are an integral part of these financial statements.
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Sundstrand Corporation Rockford Factory
Employee Savings Plan
Notes to Financial Statements
1. Description of the Plan
General
The Sundstrand Corporation Rockford Factory Employee Savings Plan (the
"Plan") is a defined contribution plan covering all regular, hourly
employees in the collective bargaining unit represented by the U.A.W. and
its Local Union No. 592 at the Rockford, Illinois plant of the Sundstrand
Corporation. The following is a brief description of the Plan. For more
complete information, participants should refer to the Plan document.
On June 10, 1999, United Technologies Corporation ("UTC") acquired
Sundstrand Corporation and merged it with its Hamilton Standard division to
form a wholly owned subsidiary, Hamilton Sundstrand Corporation. This Plan
will continue to operate unless affected by any future collective bargaining
agreements.
Contributions and Vesting
Participants may elect to contribute, through payroll deductions, up to 20
percent of their eligible compensation, as defined by the Plan.
Participants direct the investment of their contributions into various
investment options offered by the Plan. The Plan offered 26 investment
options to the participants during the year ended December 31,1999:
Sundstrand Stock Fund (replaced by a UTC Stock Fund); seven Growth Funds;
five Growth and Income Funds; three Balanced Funds; four Life Strategy
Funds; four Fixed Income Funds; and two Money Market Funds. Plan participants
also had the option of electing life insurance coverage through the Life
Insurance Fund. Under this option, participant contributions were used to
purchase life insurance coverage for the participant and/or his or her
beneficiaries. Effective July 1, 1996, new policies or increased coverage
through the Life Insurance Fund were no longer available. Existing policies
were unchanged and premium deductions for those policies will continue.
Transamerica Assurance Company is the carrier of life insurance coverage.
Participant contributions, plus actual earnings thereon, are fully vested at
all times under the Plan.
Participant Accounts
Interest, dividends, and realized and unrealized gains and losses on
investments of the funds are allocated directly to each participant's
account by Vanguard Fiduciary Trust Company ("Vanguard").
Trustee and Recordkeeper
All of the Plan's assets are held by Vanguard, the Plan trustee, who also
has participant account recordkeeping responsibilities.
Participant Loans
Participants may elect to borrow from their balance in any of the funds
except the Life Insurance Fund a minimum of $500 up to a maximum of $50,000
or 50 percent of their account balance, whichever is less. Participants
borrowing from their accounts for the purpose of purchasing a principal
residence may select a repayment term of up to 15 years, with all other
loans having a repayment term of not more than five years. Loans are repaid
with interest, through equal payroll deductions over the loan term. The
interest rate is equal to the prime rate, published in The Wall Street
Journal on the last business day of each month. Loan payments are allocated
between the individual funds based on the respective contribution percentage
at the time of repayment.
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Payment of Benefits
Generally, on termination of service due to death, disability, or
retirement, benefits are paid in a lump sum to a terminating participant.
Other
The Sundstrand Stock Fund was liquidated upon the merger of Sundstrand
Corporation and UTC. Each share of Sundstrand common stock in the Sundstrand
Stock Fund was converted into a cash portion plus a UTC stock portion in
accordance with the merger agreement dated February 21, 1999. The cash
portion was $35.00 per share and was deposited in the Vanguard Treasury
Money Market Fund. The portion converted to UTC stock was deposited in the
UTC Stock Fund. Currently, no further contributions can be made to this
fund.
2. Summary of Accounting Principles
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method
of accounting, except for benefits, which are recorded when paid.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value as determined by the Plan
Trustee, typically by reference to published market data. The UTC Stock Fund
is valued at its year-end unit closing price (comprised of year-end market
price plus the cash position that has not been invested in UTC stock).
Participant loans are valued at cost, which approximates fair value.
Purchases and sales of investments are recorded on a trade-date basis.
Interest income is accrued when earned. Dividend income is recorded on the
ex-dividend date.
Plan Expenses
Terminated and retired participants pay an annual administration fee. All
other administrative expenses, such as Trustee and recordkeeping fees, were
paid directly by the employer in 1999.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires UTC management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
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3. Investments
The following presents investments that represent 5 percent or more of the
Plan's net assets:
December 31,
1999 1998
(thousands of dollars, except unit amounts)
Vanguard 500 Index Fund,
56,688 and 47,635 units, respectively $7,671 $5,428
Vanguard Growth Index Fund,
68,085 and 24,148 units, respectively 2,684 764
Vanguard Treasury Money Market Fund,
8,810,071 and 4,946,158 units, respectively 8,810 4,946
Vanguard U.S. Growth Fund,
130,966 and 110,210 units, respectively 5,700 4,131
Vanguard Windsor II Fund,
132,546 and 124,387 units, respectively 3,309 3,712
United Technologies Stock Fund,
86,272 units 3,682 -
Sundstrand Stock Fund,
292,901 units - 8,939
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value by approximately $5,704,000. Mutual Fund investments appreciated by
$2,379,000 and the UTC Stock Fund appreciated by $3,325,000, including
realized gain of $2,371,000 from the conversion of the Sundstrand Stock Fund
to the UTC Stock Fund.
4. Related-Party Transactions
Certain Plan investment options are managed by Vanguard Fiduciary Trust
Company. Vanguard is the Plan's trustee and recordkeeper, as defined by the
Plan and, therefore, these transactions qualify as party-in-interest
transactions.
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5. Plan Termination
Although it has not expressed any intent to do so, UTC, subject to a
collective bargaining agreement, has the right under the Plan to terminate
the Plan subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). In the event of Plan termination,
participants will become fully vested in their account balances.
6. Tax Status
The Internal Revenue Service has determined on March 8, 1996, that the Plan
is 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 administration and legal counsel believe that the
Plan is designed and is currently being operated in compliance with the
applicable requirements of the IRC.
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Supplemental Schedule
Sundstrand Corporation Rockford Factory
Employee Savings Plan
Assets Held for Investment Purposes
December 31, 1999
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<CAPTION>
<S> <C> <C> <C>
(c)
Description of investment,
(b) including maturity date,
Identity of issue, rate of interest, (d)
borrower lessor or collateral, par or Current
(a) similar party maturity value Value
* Vanguard Group of Investments Treasury Money Market Fund $8,810,071
* Vanguard Group of Investments S&P 500 Index Fund 7,671,609
* Vanguard Group of Investments U.S. Growth Fund 5,700,942
* Vanguard Group of Investments United Technologies Stock
Fund 3,682,081
* Vanguard Group of Investments Windsor II Fund 3,309,673
* Vanguard Group of Investments Growth Index Fund 2,684,597
* Vanguard Group of Investments Prime Money Market Fund 1,315,358
* Vanguard Group of Investments International Growth Fund 1,230,912
* Vanguard Group of Investments Life Strategy Moderate
Growth Fund 965,011
* Vanguard Group of Investments Life Strategy Growth Fund 746,770
* Vanguard Group of Investments Extended Market Index Fund 644,812
* Vanguard Group of Investments Growth and Income Fund 610,177
* Vanguard Group of Investments STAR Fund 560,391
* Vanguard Group of Investments Wellesley Income Fund 496,868
* Vanguard Group of Investments Explorer Fund 466,399
* Vanguard Group of Investments Pacific Stock Index Fund 455,263
* Vanguard Group of Investments Long-Term Treasury Fund 402,397
* Vanguard Group of Investments Total Stock Market Index
Fund 331,342
* Vanguard Group of Investments Emerging Markets Index
Fund 311,199
* Vanguard Group of Investments Balanced Index Fund 268,586
* Vanguard Group of Investments Life Strategy Conservative
Growth Fund 268,308
* Vanguard Group of Investments Total Bond Market Index
Fund 191,258
* Vanguard Group of Investments Short-Term Treasury Fund 103,813
* Vanguard Group of Investments European Stock Index Fund 79,362
* Vanguard Group of Investments Life Strategy Income Fund 13,796
* Vanguard Group of Investments Intermediate-Term
Corporate Fund 12,152
Plan Participants Participant Loans Receivable 2,460,779
* Indicates an identified person known to be a party-in-interest to the Plan
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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.
SUNDSTRAND CORPORATION ROCKFORD
FACTORY EMPLOYEE SAVINGS PLAN
Dated: June 28, 2000 By: /s/ Michael C. Sankner
Michael C. Sankner
Manager, Actuarial Administrator
United Technologies Corporation
