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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 1-812
CARRIER CORPORATION
REPRESENTED EMPLOYEE SAVINGS PLAN
UNITED TECHNOLOGIES CORPORATION
One Financial Plaza
Hartford, Connecticut 06101
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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
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 Carrier Corporation Represented Employee Savings Plan (the "Plan") at
December 31, 1999 and December 31, 1998, and the changes in net assets available
for benefits for the year 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 audits. We
conducted our audits 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 audits provide a reasonable basis for the opinion expressed
above.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Hartford, Connecticut
June 28, 2000
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Carrier Corporation Represented Employee Savings Plan
Statement of Net Assets Available for Benefits
(Thousands of Dollars)
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December 31, December 31,
1999 1998
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Assets:
Plan's interest in Master Trust (Notes 3, 4 and 5) $ 107,466 $ 88,157
Net Assets Available for Benefits $ 107,466 $ 88,157
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The accompanying notes are an integral part of these financial statements.
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Carrier Corporation Represented 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 $ 9,004
Interest 3,592
Dividends 843
Contributions:
Participants' 10,090
Employer's 2,954
Total additions 26,483
Deductions from net assets attributed to:
Distributions to participants (7,131)
Administrative expenses (31)
Total deductions (7,162)
Net increase prior to transfers 19,321
Assets transferred out of Plan (12)
Net increase 19,309
Net Assets Available for Benefits, December 31, 1998 88,157
Net Assets Available for Benefits, December 31, 1999 $107,466
The accompanying notes are an integral part of these financial statements.
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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
Corporation, 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. Participants direct the investment of their
contributions into various investment options offered by the Plan. The Plan
currently offers ten mutual funds, four commingled index funds, one stable value
fund, and a company stock fund as investment options for participants.
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 agree-
ment. 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 year ended December 31, 1999, approximately $20,000 of
forfeitures were used to fund employer contributions.
Trustee and Recordkeeper. All of the Plan's assets are held by Bankers Trust
Company ("Bankers Trust"), the Plan Trustee. Fidelity Institutional Retirement
Services Company ("Fidelity") performs participant account recordkeeping
responsibilities.
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
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an investment in the UTC Common Stock Fund investment option may be paid in
shares of UTC Common Stock instead of cash. Distributions in UTC Common Stock
for the year ended December 31,1999 were approximately $26,000.
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
Plan's 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 participating plans' unit values. Distributions to
participants reduce the number of participation units held by the participating
plans (see Note 5).
Investment Valuation and Income Recognition. The Income Fund's investments in
insurance contracts (see Note 4) 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.
Purchases and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date.
Plan Expenses. Plan administrative expenses, including the Plan's trustee and
recordkeeping fees, were paid directly by the employer in 1999. 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.
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NOTE 3 - INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets:
December 31,
(Thousand of Dollars, 1999 1998
except unit amounts)
Equity Fund, 865,843 and
907,182 units, respectively $ 28,348 $ 24,548
UTC Common Stock Fund, 786,272
and 541,169 units, respectively $ 16,573 $ 9,727
Income Fund, 638,850 and
630,529 units, respectively $ 46,259 $ 42,162
NOTE 4 - INVESTMENT CONTRACTS WITH INSURANCE COMPANIES
The Plan's Income Fund invests in insurance contracts with insurance companies.
Under these contracts, each insurance company guarantees repayment in full of
the principal amount 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 1999 and 1998 were 8.1% and 8.5%,
respectively.
NOTE 5 - INVESTMENT IN MASTER TRUST
UTC has entered into a Master Trust agreement with Bankers Trust. Under this
agreement, certain savings plans of UTC and its subsidiaries combine their trust
fund investments in the Master Trust.
Participating plans purchase units of participation in the investment funds
based on their contribution to such funds along with income that the investment
funds may earn, less distributions made to the plan participants.
At December 31, 1999, the Plan's interest in the Master Trust comprised
6,019,084 units of the 510,203,518 total units of participation, or 1.18%. At
December 31, 1998, the Plan's interest in the Master Trust comprised 5,038,159
units of the total 522,172,913 units of participation, or 0.96%.
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The following is a summary of the financial information and data for the Master
Trust and the portion applicable to the Plan:
United Technologies Corporation
Master Trust Statement of Net Assets
(Thousands of Dollars)
December 31, December 31,
1999 1998
Assets:
Short-term investments $ 23,147 $ 6,646
Investments:
Equity:
Mutual funds 663,679 483,050
Equity commingled index funds 1,466,274 1,310,686
Common stock 784,371 526,457
ESOP stock fund 3,152,372 2,736,411
Debt:
Fixed income commingled index funds 28,140 26,874
Insurance company investment contracts 3,883,142 3,731,589
Participant notes receivable 81,647 83,257
Subtotal 10,082,772 8,904,970
ESOP receivables 116,234 101,138
Interest and dividend receivables 20,085 8,824
Total assets 10,219,091 9,014,932
Liabilities:
Accrued liabilities 6,014 1,378
Accrued ESOP interest 2,154 2,205
ESOP debt 336,600 372,600
Notes payable to UTC 131,233 104,033
Total liabilities 476,001 480,216
Net Assets $ 9,743,090 $8,534,716
Net assets of the Master Trust allocable
to the Plan $ 107,466 $ 88,157
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United Technologies Corporation
Master Trust Statement of Changes in Net Assets
(Thousands of Dollars)
Year Ended
December 31,
1999
Additions:
Interest and dividend income $ 414,622
Net appreciation on fair value of investments 1,004,193
Contributions from participating plans for
purchase of units 289,582
Total additions 1,708,397
Deductions:
Benefit payments on behalf of participating plans (437,791)
Master trust expenses (38,225)
Total deductions (476,016)
Net increase prior to transfers 1,232,381
Plan transfers:
Assets transferred in 41,739
Assets transferred out (65,746)
Net Plan transfers (24,007)
Increase in net assets 1,208,374
Net assets:
Beginning of year 8,534,716
End of year $9,743,090
Amounts pertaining to the Plan:
Plan interest in net appreciation and investment
income of Master Trust $ 13,439
Contributions received (cash basis) $ 13,044
Pension benefits paid $ (7,131)
Plan expenses $ (31)
Assets transferred out of Plan $ (12)
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NOTE 6 - RELATED-PARTY TRANSACTIONS
Certain Plan investment options are managed by Bankers Trust and Fidelity.
Bankers Trust and Fidelity are the Plan's trustee and recordkeeper, respective-
ly, as defined by the Plan and, therefore, these transactions qualify as party-
in-interest transactions.
NOTE 7 - 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 8 - 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.
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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.
CARRIER CORPORATION
REPRESENTED EMPLOYEE SAVINGS PLAN
Dated: June 28, 2000 By: /s/ Michael C. Sankner
Michael C. Sankner
Manager, Actuarial Administrator
United Technologies Corporation
