Item 1. Business
United Technologies Corporation was incorporated in Delaware in 1934. Growth is attributable to acquisitions and the internal development of existing businesses of the Corporation.*
Management's Discussion and Analysis of the Corporation's Results of Operations and Financial Position at December 31, 2000, with comparisons of 2000 to 1999 and 1999 to 1998, as well as Selected Financial Data for each year in the five year period ended December 31, 2000 are set forth on pages 1 through 8 of the Corporation's 2000 Annual Report to Shareowners. Whenever reference is made in this Form 10-K to specific pages in the 2000 Annual Report to Shareowners, such pages are incorporated herein by reference.
Operating Segments
The Corporation conducts its business through four principal operating segments. The segments were generally determined based on the management of the businesses and on the basis of separate groups of operating companies, each with general operating autonomy over diversified products and services. The principal products of each segment are as follows:
Operating Segment Principal Products
Otis --Otis elevators, escalators, automated people movers and service.
Carrier --Carrier commercial and residential heating, ventilating and air conditioning ("HVAC") systems and equipment, commercial and transport refrigeration equipment, aftermarket service and components.
Pratt & Whitney --Pratt & Whitney commercial, general aviation and military aircraft engines, parts, service, industrial gas turbines and space propulsion.
Flight Systems --Sikorsky commercial and military helicopters, parts and service. --Hamilton Sundstrand aerospace and industrial products, including aircraft power generation and management systems, engine and flight controls, auxiliary power units, environmental control systems and propeller systems (aerospace), and air compressors, metering devices, fluid handling equipment and enclosed gear drives (industrial).
Segment financial data for the years 1998 through 2000, including financial information about foreign and domestic operations and export sales, is included in Note 15 of Notes to Consolidated Financial Statements on pages 22 through 24 of the Corporation's 2000 Annual Report to Shareowners.
Description of Business by Operating Segment
The following description of the Corporation's business by operating segment should be read in conjunction with Management's Discussion and Analysis of Results of Operations and Financial Position appearing in the Corporation's 2000 Annual Report to Shareowners, especially the information contained therein under the heading "Business Environment."
Otis Otis is the world's largest elevator and escalator manufacturing, installation and service company. Otis designs, manufactures, sells and installs a wide range of passenger and freight elevators, including hydraulic and traction elevators for low- and medium-speed applications and gearless elevators for high-speed passenger operations in high-rise buildings. In February 2000, Otis announced its new Gen2 (trademark symbol) elevator system for low- to mid-rise buildings, the first elevator to use flat, coated steel belts. Installations of this new machine room-less elevator began in February 2000. Otis also produces a broad line of escalators and, for horizontal transportation, moving walks and automated people movers and shuttles. In addition to new equipment, Otis provides modernization products and services to upgrade elevators and escalators. Otis also provides maintenance services for a substantial portion of the elevators and escalators which it sells, as well as those of other manufacturers. Otis' products and services are sold principally to building contractors and owners. _______________________
* "Corporation," unless the context otherwise requires, means United Technologies Corporation or UTC and its subsidiaries.
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In 1999, LG-Otis Elevator Company was formed in Korea to acquire the Building Facilities Group of LG Industrial Systems Co. Inc. The Corporation has an 80 percent equity interest in LG-Otis Elevator Company.
Revenues generated by Otis' international operations were 77 and 78 percent of total Otis segment revenues in 2000 and 1999, respectively. At December 31, 2000, Otis' business backlog was $3,770 million, as compared to $3,782 million at December 31, 1999. Substantially all of the business backlog at December 31, 2000 is expected to be realized as sales in 2001.
Carrier Carrier is the world's largest manufacturer of commercial and residential heating, ventilating and air conditioning systems and equipment. Carrier is also a leading producer of commercial and transport refrigeration equipment, and provides aftermarket service and components for its products and those of other manufacturers. The products manufactured by Carrier include chillers and airside equipment, commercial unitary systems, residential split systems (cooling only and heat pump), duct-free split systems, window and portable room air conditioners and furnaces, as well as transport refrigeration and commercial refrigeration equipment. Carrier's products and services are sold under Carrier and other brand names principally to building contractors and owners, homeowners, shipping and trucking companies, supermarkets and food service companies. Sales are made both directly to the customer and through manufacturers' representatives, distributors, dealers, individual wholesalers and retail outlets.
In April 1999, Carrier formed an alliance with Toshiba Corporation to combine and coordinate certain air conditioning manufacturing and distribution operations. Toshiba Carrier Corporation is based in Japan and owned 40 percent by Carrier and 60 percent by Toshiba. Carrier and Toshiba Carrier Corporation formed manufacturing joint ventures in the U.K., with Carrier holding a majority interest, and in Thailand with Carrier and Toshiba Carrier owning equal interests. In August 1999, Carrier expanded its North American presence in residential and light commercial heating and air conditioning equipment by acquiring International Comfort Products Corporation.
In February 2000, Carrier expanded its European commercial refrigeration operations by acquiring the Electrolux Group's commercial refrigeration business. In November 2000, Carrier acquired Specialty Equipment Companies, a manufacturer of commercial refrigeration and food service equipment in the United States and Europe.
Revenues generated by Carrier's international operations, including U.S. export sales, were 48 percent of total Carrier segment revenues in each of 2000 and 1999. At December 31, 2000, Carrier's business backlog was $1,004 million, as compared to $978 million at December 31, 1999. Substantially all of the business backlog at December 31, 2000 is expected to be realized as sales in 2001.
Otis and Carrier Worldwide Operations Otis and Carrier conduct their businesses through subsidiaries and affiliates worldwide, some of which have significant minority interests. In addition, their global growth strategies include investments in markets worldwide, including those in Central and Eastern Europe, the People's Republic of China, Russia, Brazil, South Korea and other countries, which involve a higher degree of currency, political and economic risk than investments in more developed markets.
The U.S. and worldwide operations of Otis and Carrier can be affected by changes in economic, industrial, political, weather and international conditions, including changes in interest rates (which can affect demand for products and services), changes in technology, changes in legislation and government policies (including those related to investments, exchange controls, repatriation of earnings and, in the case of Carrier, regulation of refrigerants), changes in the level of construction activity, changes in exchange rates, changes in labor costs (which can affect Otis service and maintenance margins) and raw material costs, and competition from a large number of companies in the United States and other countries. Carrier's operations can also be affected by changes in the level of production and utilization of transport equipment, in the level of retail sales of perishable food products, and in fuel prices. The principal methods of competition are price, delivery schedule, product performance and service.
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Pratt & Whitney and Flight Systems Aerospace and Defense Products Pratt & Whitney and Flight Systems produce aerospace and defense products. Sales of these products are subject to changes in technology; lengthy and costly development cycles; the effects of consolidation in the aerospace and defense industry; heavy dependence on a small number of products and programs; changes in legislation (including restrictions on aircraft engine noise and emissions) and in government procurement practices; policies of some foreign customers which require offset programs (in-country purchases, manufacturing and financial support projects required as a condition to obtaining orders) or other arrangements; substantial competition from domestic manufacturers, foreign manufacturers (whose governments sometimes provide research and development assistance, marketing subsidies and other assistance for their commercial products) and companies that obtain regulatory agency approval to manufacture spare parts; and changes in economic, industrial and international conditions. In addition, the financial performance of these two segments can be affected in a number of respects by the general level of activity and performance of the commercial airline industry and the aviation industry and by changes in fuel prices. The international operations of these segments are subject to local government regulations (including regulations relating to investments, exchange controls and repatriation of earnings) as well as to varying currency, political and economic risks. Sales of military products are affected by defense budgets (both in the U.S. and abroad) and U.S. foreign policy. Military spare parts sales are also affected by policies of the U.S. and foreign governments of purchasing parts from suppliers other than the original equipment manufacturers.
The principal methods of competition in the Corporation's aerospace and defense businesses are price, product performance, service, delivery schedule and other terms and conditions of sale, including discounts and other financial incentives, performance and operating cost guarantees, maintenance agreements and participation in financing arrangements for commercial jet engines and helicopters. Engine selections by airlines, airframe manufacturers and operators can have a significant impact on sales of spare parts and maintenance services. Significant elements of Pratt & Whitney's and Flight Systems' business, such as spare parts sales for engines and aircraft in service, have short lead times. Therefore, backlog information may not be indicative of future demand. Also, since a substantial portion of the backlog for commercial customers is scheduled for delivery beyond 2001, changes in economic conditions may cause customers to request that firm orders be rescheduled or canceled.
In 2000, the Corporation announced its participation in the formation of MyAircraft, a joint venture to develop a business-to-business e-commerce marketplace for aerospace aftermarket products and services. E-commerce business models are subject to significant risks due to rapid changes in technology, business practices and customer acceptance, as well as substantial competition from other e-commerce initiatives. These e-commerce exchanges can also have a significant impact on the manner in which the Corporation sells parts and services.
Pratt & Whitney Pratt & Whitney is one of the world's leading producers of commercial, general aviation and military aircraft engines. Pratt & Whitney provides overhaul and repair services, spare parts, and fleet management services for the engines it produces, as well as for many other models of commercial and military jet and gas turbine engines. Pratt & Whitney also produces power generation equipment, liquid rocket propulsion systems and solid rocket motors.
Pratt & Whitney currently produces three families of large commercial jet engines: the JT8D-200 series, the PW2000 series and the PW4000 series. JT8D- 200 series engines power the Boeing MD-80 aircraft. Applications for the PW2000 series include the Boeing 757-200/PF aircraft and the Iluyshin IL-96 aircraft. The PW4000 engine family powers the Airbus A310-300, A300-600 and A330-200/300 series; the Boeing 747-400, 767-200/300 and 777-200/300 series of aircraft; and the Boeing MD-11 aircraft. (The Boeing Company ("Boeing") phased out production of MD-80 aircraft in December 1999 and has announced that MD-11 production would be phased out in 2001.) Pratt & Whitney has entered into a Memorandum of Understanding with Airbus Industrie ("Airbus") to develop, market and sell PW6000 series engines for installation on Airbus A318 aircraft, currently expected to enter service in the fourth quarter of 2002.
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In view of the risk and cost associated with developing new engines, Pratt & Whitney has entered into commercial engine collaboration arrangements in which costs, revenues and risks are shared. At December 31, 2000, the interests of other participants in these items were approximately as follows: 24 percent of the JT8D-200 series engine program, 29 percent of the PW2000 series engine program, 14 percent of the 94 and 100 inch fan models of the PW4000, 26 percent of the PW4084 and PW4090 models and 24 percent of the PW4098 model. IAE International Aero Engines AG, a collaboration in which Pratt & Whitney has a 33 percent interest, markets and supports the V2500 engine. Applications for the V2500 engine include Airbus' A319, A320 and A321 aircraft and Boeing's MD-90. (Boeing phased out production of MD-90 aircraft in 2000.) Pratt & Whitney also has a 50 percent interest in GE-P&W Engine Alliance, LLC, an alliance formed in 1996 with GE Aircraft Engines to develop, market and manufacture a new jet engine known as the GP7000. The new engine is intended to power Boeing 767- 400ERX, Boeing 747X and Airbus A380 aircraft. In December 2000, Airbus announced the launch of the A380 aircraft (formerly known as the A3XX), with first deliveries scheduled for 2006.
Manufacturers of many commercial aircraft offer their customers a choice of engines, giving rise to competition among engine manufacturers at the time of sale of aircraft. This competition is intense, particularly for new commercial airframe/engine combinations, and can result in offers by engine suppliers of substantial financial incentives, performance and operating cost guarantees and maintenance agreements. Pratt & Whitney's major competitors in the sale of engines are the aircraft engine businesses of General Electric Company and Rolls Royce plc. (For information regarding customer financing commitments, participation in guarantees of customer financing arrangements and performance and operating cost guarantees, see Notes 4 and 13 of Notes to Consolidated Financial Statements on pages 16 and 21 to 22 of the Corporation's 2000 Annual Report to Shareowners.)
Pratt & Whitney products are sold principally to aircraft manufacturers, airlines and other aircraft operators, aircraft leasing companies and the U.S. and foreign governments. Pratt & Whitney sales in the U.S. and Canada are also made directly to the customer and, to a limited extent, through independent distributors. Other export sales are made with the assistance of independent sales representatives. Sales to Boeing and Airbus were each 15 percent of total Pratt & Whitney revenues in 2000, before taking into account discounts or financial incentives offered to customers.
Pratt & Whitney currently produces two military aircraft engines, the (powering and fighter aircraft) and the (powering C-17 transport aircraft). All of Pratt & Whitney's sales contracts are with the United States Air Force ("USAF") or with foreign governments. All of Pratt & Whitney's sales contracts are with either the USAF or Boeing. Pratt & Whitney is also under contract with the USAF to develop the engine, the only anticipated source of propulsion for the two-engine fighter aircraft being developed by Lockheed Martin Corporation ("Lockheed Martin") and Boeing. In addition, both contractors (Boeing and Lockheed Martin) that were selected to proceed into the next phase of the Joint Strike Fighter development program have selected derivatives of Pratt & Whitney's engine to power their competing demonstration aircraft. Management cannot predict with certainty whether, when, and in what quantities Pratt & Whitney will produce engines.
Pratt & Whitney Canada ("PWC") is one of the world's leading manufacturers of turbofan, turboprop and turboshaft engines used in a variety of aircraft, including up to seventy passenger business and regional/commuter airline aircraft, general aviation aircraft and light and medium helicopters. PWC also provides auxiliary power units for large commercial aircraft, advanced gas turbine engines for industrial and power generation applications and worldwide engine maintenance services.
Pratt & Whitney Space Propulsion ("SP") produces hydrogen fueled rocket engines for commercial and U.S. Government space applications and advanced turbo pumps for NASA's Space Shuttle program. SP, together with NPO Energomash, is providing a new Lox-Kerosene RD-180 booster engine for two launch vehicles being marketed by Lockheed Martin. Chemical Systems, a unit of SP, manufactures solid fuel propulsion systems and booster motors for commercial and civil applications and several U.S. military launch vehicles and missiles.
Pratt & Whitney Power Systems ("PWPS") supplies industrial power generation and mechanical drive equipment in the 300 kilowatts to 50 megawatts range. In October 2000, PWPS established a service agreement with Power Industry Consultants of Atlanta, Georgia to provide operations, maintenance, field services and turnkey services for PWPS industrial gas turbine products.
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Revenues from Pratt & Whitney's international operations, including U.S. export sales, were 50 percent and 48 percent of total Pratt & Whitney segment revenues in 2000 and 1999, respectively. At December 31, 2000, Pratt & Whitney's business backlog was $9,866 million, including $1,434 million of U.S. Government funded contracts and subcontracts, as compared to $8,256 million and $1,394 million, respectively, at December 31, 1999. Of the total Pratt & Whitney backlog at December 31, 2000, approximately $4,055 million is expected to be realized as sales in 2001.
Flight Systems The Corporation's Flight Systems business is conducted through Sikorsky Aircraft and Hamilton Sundstrand. The Corporation acquired Sundstrand Corporation in 1999 and combined it with the operations of the former Hamilton Standard.
Sikorsky is one of the world's largest manufacturers of military and commercial helicopters and the primary supplier of transport helicopters to the U.S. Army and Navy. Sikorsky also supplies helicopters to foreign governments and the worldwide commercial market. Sikorsky produces helicopters for passenger, utility/transport, cargo, anti-submarine warfare, and search and rescue operations. Sikorsky's business base also includes remanufacturing of used aircraft, spare parts sales, overhaul and repair, and service contracts.
Current production programs at Sikorsky include the Black Hawk medium- transport helicopter for the U.S. and foreign governments; the CH-60 Fleet Combat Support helicopter for the U.S. Navy; the International Naval Hawk, a derivative of the U.S. Navy's Seahawk medium-sized helicopter for multiple naval missions; and the S-76 intermediate-sized helicopter for executive transport, offshore oil platform support, search and rescue, emergency medical service and other utility operations.
In July 1997, Sikorsky signed a multi-year contract with the U.S. Government to deliver 108 Black Hawk family helicopters from July 1997 through June 2002. Under the contract as it has been amended through December 2000, the purchase commitment has been increased to 207 helicopters. As of December 31, 2000, 141 helicopters have been delivered under the contract. While Sikorsky is pursuing opportunities for additional sales to the U.S. Government, Sikorsky's production of Black Hawk family helicopters is increasingly dependent upon obtaining foreign sales. In 2000, Sikorsky signed contracts to sell 47 Black Hawks and variants to several foreign government customers for delivery from 2000 through 2004.
Sikorsky is engaged in development of the S-92 aircraft, a large cabin derivative of the Black Hawk helicopter, for commercial and military markets. A significant portion of the development is being carried out by companies in Brazil, the People's Republic of China, Japan, Spain and Taiwan under collaborative arrangements. Regulatory certification of the S-92 is expected in 2002. While marketing efforts for the S-92 have commenced, management cannot predict with certainty whether, when, and in what quantities the S-92 will be produced.
Sikorsky has a 50 percent interest in a joint venture with Boeing for the development of the U.S. Army's next generation light attack and reconnaissance helicopter, the RAH-66 Comanche. The Sikorsky-Boeing joint venture is performing under a cost reimbursement contract awarded in 1991. The first two prototype aircraft are undergoing flight testing, and the Sikorsky-Boeing joint venture has entered into a $3.1 billion Engineering and Manufacturing Development program with the U.S. Army to deliver thirteen Comanche helicopters in 2004 and 2005 for test and evaluation purposes. The first U.S. Army Comanche unit is scheduled to be operationally equipped in 2006. Management cannot predict with certainty whether, when, and in what quantities any additional Comanche aircraft will be produced.
Hamilton Sundstrand primarily sells products and services for use by aerospace customers worldwide. Industrial products are also sold to a diversified group of basic industries. Hamilton Sundstrand's principal aerospace systems, subsystems and components include electric power generating, distribution, management and control systems; fuel and special fluid pumps; engine control systems; gearboxes; actuation systems; ram air turbine emergency systems; auxiliary power units; environmental control systems; propeller systems; launch vehicle hydraulic power units; and electronic controls and components. Hamilton Sundstrand is also the prime contractor for NASA's space suit/life support system and produces environmental control, life support, mechanical systems and thermal control systems for international space programs. Hamilton Sundstrand's principal industrial products include enclosed gear drives; flexible shaft couplings; large ring gears; metering and specialty pumps; rotary screw industrial and portable air compressors; pneumatic tools; dryers and filters; high-speed centrifugal pumps and compressors and leak proof pumps.
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Hamilton Sundstrand's aerospace businesses serve commercial, military, regional, business and general aviation, as well as space and undersea applications. Aftermarket services include spare parts, overhaul and repair and engineering and technical support. Hamilton Sundstrand aerospace products are sold directly to airframe manufacturers, the U.S. Government, aircraft operators and independent distributors. Hamilton Sundstrand sales of aerospace products to Boeing, Pratt & Whitney and Airbus, including sales where the U.S. Government was the ultimate customer, were 11 percent of Flight Systems segment sales in 2000.
Hamilton Sundstrand's industrial products serve industries involved with raw material processing, bulk material handling and construction (including mining; metal and other material processing; hydrocarbon and chemical processing; water and waste water treatment). These industrial products are sold directly to end- users, through manufacturer representatives and distributors and through engineering contractors. Demand for Hamilton Sundstrand's industrial products is tied closely to the level of general economic activity. Hamilton Sundstrand has competitors or potential competitors in both its aerospace and industrial businesses. Hamilton Sundstrand believes that its research and development, proprietary technology, and product and service reputations have been significant in maintaining its competitive standing.
Revenues generated by the Flight Systems segment's international operations, including export sales, were 44 percent and 41 percent of total Flight Systems segment revenues in 2000 and 1999, respectively. At December 31, 2000, Flight Systems' business backlog was $4,593 million, including $2,532 million under funded contracts and subcontracts with the U.S. Government, as compared to $3,930 million and $1,011 million, respectively, at December 31, 1999. Of the total Flight Systems segment backlog at December 31, 2000, approximately $2,985 million is expected to be realized as sales in 2001.
Other The Corporation's International Fuel Cells unit ("IFC") is a world leader in fuel cell production and development for commercial, transportation, residential and space applications. IFC is the sole supplier of fuel cells for U.S. space missions and also offers a commercially available fuel cell power plant, known as the PC25 (trademark symbol).
The PC25 is a 200 kilowatt stationary fuel cell power plant with a phosphoric acid cell stack. Over 200 PC25 units have been delivered around the world. Fuel cell power plants using proton exchange membrane technology (PEM) are currently in development for transportation, commercial stationary, and residential applications. IFC is working with five automakers and two bus manufacturers, as well as the U.S. Department of Energy, on development and demonstration programs for automobiles.
Although fuel cells are believed to be superior to conventional power generators in terms of efficiency and environmental characteristics, current production rates remain low across the industry. Continued technology advancement and wider market acceptance are required to reduce the production cost of fuel cell components and power plants. There is still significant uncertainty as to whether and when commercially viable PEM fuel cells will be produced. IFC continues to seek strategic partners to develop sources of supply, as well as marketing and distribution channels. Toshiba Corporation owns a 13 percent equity interest in IFC.
The results of IFC are included in the "Eliminations and other" category in the segment financial data in Note 15 of Notes to Consolidated Financial Statements on pages 22 to 24 of the Corporation's 2000 Annual Report to Shareowners.
Other Matters Relating to the Corporation's Business as a Whole
Research and Development To maintain its competitive position, the Corporation spends substantial amounts of its own funds on research and development. Such expenditures, which are charged to income as incurred, were $1,302 million or 5.0 percent of total sales in 2000, as compared with $1,292 million or 5.4 percent of total sales in 1999 and $1,168 million or 5.1 percent of total sales in 1998. The Corporation also performs research and development work under contracts funded by the U.S. Government and other customers. Such contract research and development, which is performed principally in the Pratt & Whitney segment and to a lesser extent in the Flight Systems segment, amounted to $1,004 million in 2000, as compared with $1,044 million in 1999 and $1,065 million in 1998.
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Contracts, Other Risk Factors, Environmental and Other Matters Government contracts are subject to termination at the convenience of the Government, in which event the Corporation normally would be entitled to reimbursement for its allowable costs incurred plus a reasonable profit. Most of the Corporation's sales are made under fixed-price type contracts; only 4 percent of the Corporation's total sales for 2000 were made under cost- reimbursement type contracts.
Like many defense contractors, the Corporation has received allegations from the U.S. Government that some contract prices should be reduced because cost or pricing data submitted in negotiation of the contract prices may not have been in conformance with government regulations. The Corporation has made voluntary refunds in those cases it believes appropriate, has settled some allegations, and does not believe that any further price reductions that may be required will have a material effect upon its financial position, results of operations or cash flows.
The Corporation is now, and believes that in light of the current government contracting environment it will be, the subject of one or more government investigations. See Item 3 - Legal Proceedings on pages 9 and 10 of this Form 10-K and Note 14 of Notes to Consolidated Financial Statements on page 22 of the Corporation's 2000 Annual Report to Shareowners for further discussion.
The diversification of the Corporation's businesses across industries and geographically throughout the world has helped to limit in varying degrees the effect of adverse conditions in any one industry or the economy of any country or region on the consolidated results of the Corporation. There can be no assurance, however, that the effect of adverse conditions in one or more industries or regions will be limited or offset in the future.
Like other users in the U.S., the Corporation is largely dependent upon foreign sources for certain of its raw materials requirements such as cobalt (Africa) and chromium (Africa, Eastern and Central Europe and the countries of the former Soviet Union). To alleviate this dependence and accompanying risk, the Corporation has a number of on-going programs which include the development of new suppliers; the increased use of more readily available materials through material substitutions and the development of new alloys; and the conservation of materials through scrap reclamation and new manufacturing processes such as net shape forging.
The Corporation has sought cost reductions in its purchases of certain other materials, components, and supplies by consolidating its purchases, reducing the number of suppliers and using online bidding competitions among potential suppliers. In some instances, the Corporation is reliant upon a single source of supply. A disruption in deliveries from its suppliers, therefore, could have an adverse effect on the Corporation's ability to meet its commitments to customers. The Corporation believes that it has appropriately balanced the risks against the costs of sustaining a greater number of suppliers. The Corporation does not foresee any unavailability of materials, components, or supplies which will have any material adverse effect on its overall business, or on any of its business segments, in the near term.
The Corporation does not anticipate that compliance with current federal, state and local provisions relating to the protection of the environment will have a material adverse effect upon its cash flows, competitive position, financial position or results of operations. (Environmental matters are the subject of certain of the legal matters described in Item 3 - Legal Proceedings on pages 9 and 10 of this Form 10-K, and are further addressed in Management's Discussion and Analysis of Results of Operations and Financial Position on page 7 and Notes 1 and 14 of Notes to Consolidated Financial Statements on pages 15 and 22 of the Corporation's 2000 Annual Report to Shareowners.)
Most of the laws governing environmental matters include criminal provisions. If the Corporation were convicted of a violation of the federal Clean Air Act or the Clean Water Act, the facility or facilities involved in the violation would be listed on the Environmental Protection Agency's ("EPA") List of Violating Facilities. The listing would continue until the EPA concluded that the cause of the violation had been cured. Listed facilities cannot be used in performing any U.S. Government contract awarded to the Corporation during any period of listing by the EPA.
While the Corporation's patents, trademarks, licenses and franchises are cumulatively important to its business, the Corporation does not believe that the loss of any one or group of related patents, trademarks, licenses or franchises would have a material adverse effect on the overall business of the Corporation or on any of its operating segments.
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Cautionary Note Concerning Factors That May Affect Future Results This Form 10-K contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These forward-looking statements are intended to provide Management's current expectations or plans for the future operating and financial performance of the Corporation, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "believe," "expect," "plans," "strategy," "prospects," "estimate," "project," "anticipate" and other words of similar meaning in connection with a discussion of future operating or financial performance. These include, among others, statements relating to:
. Future earnings and other measurements of financial performance . Future cash flow and uses of cash . The effect of economic downturns or growth in particular regions . The effect of changes in the level of activity in particular industries or markets . The scope, nature or impact of acquisition activity . Product developments and new business opportunities, including e-business . Restructuring costs and savings . The outcome of contingencies . The transition to the use of the euro as a currency.
All forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. This Annual Report on Form 10-K for 2000 includes important information as to risk factors in the "Business" section under the headings "Description of Business by Operating Segment," "Other Matters Relating to the Corporation's Business as a Whole" and "Legal Proceedings." Additional important information as to risk factors is included in the Corporation's 2000 Annual Report to Shareowners in the section titled "Management's Discussion and Analysis of Results of Operations and Financial Position" under the headings "Business Environment," "Results of Continuing Operations," "Business Acquisitions," "Restructuring and Other Costs," "Liquidity and Financing Commitments," "Market Risk and Risk Management," "Environmental Matters," "U.S. Government," "New Accounting Pronouncements," and "Euro Conversion," which is incorporated by reference in this Form 10-K. For additional information identifying factors that may cause actual results to vary materially from those stated in the forward-looking statements, see the Corporation's reports on Forms 10-Q and 8-K filed with the Securities and Exchange Commission from time to time.
Employees At December 31, 2000, the Corporation's total employment was approximately 153,800. For discussion of the effects of the Corporation's restructuring actions on employment, see Management's Discussion and Analysis of Results of Operations and Financial Position on page 4 and Note 11 of Notes to Consolidated Financial Statements on pages 20 to 21 of the Corporation's 2000 Annual Report to Shareowners.
Item 2.
Item 2. Properties
The Corporation's fixed assets as of December 31, 2000 include the plants and warehouses described below and a substantial quantity of machinery and equipment, most of which is general purpose machinery and equipment using special jigs, tools and fixtures and in many instances having automatic control features and special adaptations. The plants, warehouses, machinery and equipment in use as of December 31, 2000 are in good operating condition, are well maintained, and substantially all are in regular use.
The following square footage numbers are approximations. At December 31, 2000, the Corporation operated (a) plants in the U.S. which had 30.6 million square feet, of which 3.3 million square feet were leased; (b) plants outside the U.S. which had 18.8 million square feet, of which 1.8 million square feet were leased; (c) warehouses in the U.S. which had 8.9 million square feet, of which 5.5 million square feet were leased; and (d) warehouses outside the U.S. which had 8.5 million square feet, of which 6.1 million square feet were leased.
For discussion of the effect of the Corporation's restructuring actions on production facilities, see Management's Discussion and Analysis of Results of Operations and Financial Position on page 4 and Note 11 of Notes to the Consolidated Financial Statements on pages 20 to 21 of the Corporation's 2000 Annual Report to Shareowners.
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Management believes that the fixed assets capitalized and the facilities in operation at December 31, 2000 for the production of the Corporation's products are suitable and adequate for the business conducted therein in the current business environment, are being appropriately utilized consistent with experience and have sufficient production capacity for their present intended purposes. Utilization of the facilities varies based on demand for the products. The Corporation continuously reviews its anticipated requirements for facilities and, based on that review, may from time to time acquire additional facilities and/or dispose of existing facilities.
Item 3.
Item 3. Legal Proceedings
As previously reported, the Department of Defense and the Corporation are litigating whether Pratt & Whitney's accounting practices for certain engine parts are acceptable. The litigation, filed with the Armed Services Board of Contract Appeals ("ASBCA"), No. 47416 et al., relates to the accounting for engine parts produced by foreign companies under commercial engine collaboration programs from 1984 through 1995. In December 1996 the Government claimed damages of $157.6 million, plus $102.7 million in interest through 1996. Pratt & Whitney believes its accounting practices are proper and has not modified them. In March and April 1998, the matter was tried before an ASBCA judge. A decision is anticipated in 2001. Should the Government prevail on liability, damages could be larger than initially claimed because the Government may amend its claim to include the period after 1995 and interest continues to accrue on the claim asserted in 1996.
As previously reported, a jury in Chromalloy Gas Turbine Corporation v. United Technologies Corporation, No. 95-CI-12541, a Texas state action, found that Pratt & Whitney did not monopolize any relevant market but did willfully attempt to monopolize an unspecified market. In May 1997, the court entered a Final Judgment denying Chromalloy's request for damages, injunctive relief and declaratory relief. In October 1998, the Texas Fourth Court of Appeals affirmed the decision of the trial court, declining to grant injunctive relief to Chromalloy. In November 1999, the appellate court denied Chromalloy's motions for rehearing and rehearing en banc. In March 2000, Chromalloy filed a petition for review with the Texas Supreme Court. In December 2000, the Texas Supreme Court denied Chromalloy's petition for review. In January 2001, Chromalloy filed a motion for rehearing with the Texas Supreme Court.
As previously reported, the Corporation has been served with two qui tam complaints under the civil False Claims Act in United States District Court for the District of Connecticut: U.S. ex rel. Drake v. Norden Systems, Inc. and UTC, No.394CV00963 (filed July 1997, and involving allegations of improper accounting for fixed assets) and U.S. ex rel. Capella v. UTC and Norden Systems Inc., No. 394CV02063 (filed December 1994, and involving allegations of improper accounting for insurance costs). The civil False Claims Act provides for penalties in a civil case of up to $10,000 per false claim submitted. The number of false claims implicated by the foregoing qui tam complaints cannot currently be ascertained; however, if determined adversely to the Corporation, the number could result in significant penalties. The qui tam relator in each case has claimed unspecified damages (trebled) and penalties, and the Department of Justice in each case has declined to take over the litigation. In August 2000, the court dismissed portions of the complaints.
In March 1999, the Department of Justice filed a civil False Claims Act complaint against the Corporation in United States District Court for the Southern District of Ohio (Western Division), No. C-3-99-093. This lawsuit is related to the "Fighter Engine Competition" between Pratt & Whitney's engine and GE's engine, for contracts awarded by the U.S. Air Force between fiscal years 1985 and 1990, inclusive. The Government alleges that Pratt & Whitney inflated its estimated costs for purchased parts and withheld data that would have revealed the overstatements. The Government seeks damages of at least $95 million (some portion of which would be trebled plus penalties of up to $10,000 per claim submitted).
The Corporation does not believe that resolution of any of the foregoing legal matters will have a material adverse effect upon the Corporation's competitive position, results of operations, cash flows, or financial position.
The Corporation is now, and believes that in light of the current government contracting environment it will be, the subject of one or more government investigations. If the Corporation or one of its business units were charged with wrongdoing as a result of any of these investigations, the Corporation or one of its business units could be suspended from bidding on or receiving awards of new government contracts pending the completion of legal proceedings. If convicted or found liable, the Corporation could be fined and debarred from new government contracting for a period generally not to exceed three years. Any contracts found to be tainted by fraud could be voided by the Government.
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The Corporation has incurred and will likely continue to incur liabilities under various state and federal statutes for the cleanup of pollutants previously released into the environment. The Corporation believes that any payments it may be required to make as a result of these claims will not have a material effect upon the cash flows, competitive or financial position, or results of operations of the Corporation. (For information regarding the matters discussed in this paragraph, see "Environmental Matters" in Management's Discussion and Analysis of Results of Operations and Financial Position on page 7 and Notes 1 and 14 of Notes to Consolidated Financial Statements on pages 15 and 22 of the Corporation's 2000 Annual Report to Shareowners.)
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to security holders for a vote during the fourth quarter ended December 31, 2000.
- ----- Executive Officers of the Registrant
The executive officers of United Technologies Corporation, together with the offices presently held by them, their business experience since January 1, 1996, and their ages, are as follows:
Other Business Experience Age Name Title Since 1/1/96 2/1/01
Jonathan W. President, President, Carrier 44 Ayers Carrier Asia Pacific Corporation Operations; Vice (since 2000) President-Strategic Planning, United Technologies Corporation
Dean C. President, Senior Vice President, 59 Borgman Sikorsky Aircraft The Boeing Company; (since 1998) President, McDonnell Douglas Helicopter Company
Ari Bousbib Executive Vice Vice President, 39 President and Corporate Strategy and Chief Operating Development; Vice Officer, Otis President, Strategic (since January Planning, United 2001) Technologies Corporation; Managing Director, The Strategic Partners Group
William L. Senior Vice 58 Bucknall, Jr. President, Human ------- Resources and Organization (since 1992)
John F. Senior Vice Vice President, United 57 Cassidy, Jr. President - Technologies Research Science and Center Technology (since 1998) and Vice President, United Technologies Research Center
Louis President, Pratt Executive Vice 43 Chenevert & Whitney (since President-Operations, 1999) Pratt & Whitney; Vice President - Operations, Pratt & Whitney Canada
George David Chairman (since President (1992-1999) 58 1997) and Chief Executive Officer (since 1994)
John E. Vice President, Senior Vice President 54 Evard, Jr. Taxes Corporate Development (since August & General Tax Counsel, 2000) Senior Vice President & General Tax Counsel, CNH Global N.V.; Vice President & General Tax Counsel, Case Corporation
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Other Business Experience Age Name Title Since 1/1/96 2/1/01
David J. Senior Vice Senior Vice President 46 FitzPatrick President, Chief & Chief Financial Financial Officer Officer, United and Treasurer Technologies (since June 2000) Corporation; Vice President and Controller, Eastman Kodak Co.
Ruth R. Senior Vice President and Chief 56 Harkin President, Executive Officer, International Overseas Private Affairs and Investment Corporation Government Relations, United Technologies Corporation and Chair, United Technologies International (since 1997)
Karl J. President and Executive Vice 52 Krapek Chief Operating President, United Officer (since Technologies 1999) Corporation (1997- 1999) and President, Pratt & Whitney (1992-1999)
Robert F. Executive Vice Executive Vice 44 Leduc President and President, Pratt & Chief Operating Whitney Officer, Pratt & Whitney (since September 2000)
Ronald F. President, Executive Vice 60 McKenna Hamilton President, Sundstrand Sundstrand Corporation and Chief Corporation Operating Officer, (since 1999) Sundstrand Aerospace
Angelo J. Vice President, Vice President, 47 Messina Corporate Financial Planning and Strategy and Analysis; Director, Development Financial Planning and (since January Analysis, United 2001) Technologies Corporation; Vice President, Group Strategic Planning, Pratt & Whitney; Director, Investor Relations, United Technologies Corporation
David G. Nord Vice President, Acting Controller; 43 Controller Assistant Controller, (since October Financial Reporting 2000) and Accounting, United Technologies Corporation; Corporate Controller, Pittston Co.
Stephen F. Executive Vice Executive Vice 61 Page President, United President and Chief Technologies Financial Officer, Corporation and United Technologies President and Corporation Chief Executive Officer, Otis (since 1997)
William H. Senior Vice Vice President, 57 Trachsel President, Secretary and Deputy General Counsel General Counsel and Secretary (since 1998)
All of the officers serve at the pleasure of the Board of Directors of United Technologies Corporation or the subsidiary designated.
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Item 5.
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
See Comparative Stock Data appearing on page 24 of the Corporation's 2000 Annual Report to Shareowners containing the following data relating to the Corporation's Common Stock: principal market, quarterly high and low sales prices, approximate number of shareowners and frequency and amount of dividends. All such data are incorporated by reference in this Form 10-K.
Item 6.
Item 6. Selected Financial Data
See the Five Year Summary appearing on page 1 of the Corporation's 2000 Annual Report to Shareowners containing the following data: revenues, net income, basic and diluted earnings per share, cash dividends per common share, total assets and long-term debt. All such data are incorporated by reference in this Form 10-K. See Notes to Consolidated Financial Statements appearing on pages 14 to 24 of the Corporation's 2000 Annual Report to Shareowners for a description of any accounting changes and acquisitions or dispositions of businesses materially affecting the comparability of the information reflected in such Five Year Summary.
Item 7.
Item 7. Management's Discussion and Analysis of Results of Operations and Financial Position
See Management's Discussion and Analysis of Results of Operations and Financial Position appearing on pages 2 through 8 of the Corporation's 2000 Annual Report to Shareowners; such discussion and analysis is incorporated by reference in this Form 10-K.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
For information concerning market risk sensitive instruments, see discussion under the headings "Market Risk and Risk Management" in Management's Discussion and Analysis of Results of Operations and Financial Position on page 7 and "Hedging Activity" at Note 1 and Notes 12 and 13 on pages 14 to 15 and 21 to 22 of the Corporation's 2000 Annual Report to Shareowners. Such information is incorporated by reference in this Form 10-K.
Item 8.
Item 8. Financial Statements and Supplementary Data
The 2000 and 1999 Consolidated Balance Sheet, and other financial statements for the years 2000, 1999 and 1998, together with the report thereon of PricewaterhouseCoopers LLP dated January 18, 2001, appearing on pages 9 through 13 in the Corporation's 2000 Annual Report to Shareowners are incorporated by reference in this Form 10-K. The 2000 and 1999 Selected Quarterly Financial Data appearing on page 24 in the Corporation's 2000 Annual Report to Shareowners are incorporated by reference in this Form 10-K.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The information required by Item 10 with respect to directors is incorporated herein by reference to the section of the Corporation's Proxy Statement for the 2001 Annual Meeting of Shareowners entitled "General Information Concerning the Board of Directors Nominees." Information regarding executive officers is contained in Part I of this Form 10-K under the heading "Executive Officers." Information concerning Section 16(a) compliance is contained in the section of the Corporation's Proxy Statement for the 2001 Annual Meeting of Shareowners entitled "Section 16(a) Beneficial Ownership Reporting Compliance."
Item 11.
Item 11. Executive Compensation
The information required by Item 11 is incorporated herein by reference to the sections of the Corporation's Proxy Statement for the 2001 Annual Meeting of Shareowners entitled "Report of Committee on Compensation and Executive Development" and "Compensation of Executive Officers." Such incorporation by reference shall not be deemed to specifically incorporate by reference the information referred to in Item 402(a)(8) of Regulation S-K.
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Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by Item 12 is incorporated herein by reference to the section of the Corporation's Proxy Statement for the 2001 Annual Meeting of Shareowners entitled "Security Ownership of Directors, Nominees and Executive Officers."
Item 13.
Item 13. Certain Relationships and Related Transactions
The information required by Item 13 is incorporated herein by reference to the section of the Corporation's Proxy Statement for the 2001 Annual Meeting of Shareowners entitled "Compensation of Executive Officers--Certain Business Relationships."
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements, Financial Statement Schedules and Exhibits
(1) Financial Statements (incorporated by Page Number reference from the 2000 Annual Report to in Annual Shareowners): Report
Report of Independent Accountants ................. 9
Consolidated Statement of Operations for the three years ended December 31, 2000 ............... 10
Consolidated Balance Sheet-December 31, 2000 and 1999 .......................................... 11
Consolidated Statement of Cash Flows for the three years ended December 31, 2000 ............... 12
Notes to Consolidated Financial Statements ........ 14
Selected Quarterly Financial Data (Unaudited) ..... 24
Page Number (2) Financial Statement Schedule for the three in Form years ended December 31, 2000: 10-K
Report of Independent Accountants on Financial Statement Schedule .......................................... S-I
Schedule II Valuation and Qualifying Accounts ..... S-II
Consent of Independent Accountants ................
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or the notes thereto.
(3)Exhibits:
The following list of exhibits includes exhibits submitted with this Form 10-K as filed with the SEC and those incorporated by reference to other filings.
Exhibit Number 3(i) Restated Certificate of Incorporation, incorporated by reference to Exhibit 3(i) to United Technologies Corporation Quarterly Report on Form 10-Q (Commission File number 1-812) for quarterly period ended June 30, 2000.
3(ii) Bylaws as amended and restated effective February 8, 1999, incorporated by reference to Exhibit 3(ii) to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1999.
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Exhibit Number 4(a) Indenture, dated as of April 1, 1990, between the Corporation and State Street Bank and Trust Company (as successor to The Connecticut National Bank), as trustee (incorporated by reference to Exhibit 4(a) to the Corporation's Registration Statement on Form S-3, File No. 333-74195, filed with the SEC on March 10, 1999). The Corporation hereby agrees to furnish to the Commission upon request a copy of each other instrument defining the rights of holders of long- term debt of the Corporation and its consolidated subsidiaries and any unconsolidated subsidiaries.
10.1 United Technologies Corporation 1979 Long Term Incentive Plan, incorporated by reference to Exhibit 10(i) to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1992.
10.2 United Technologies Corporation Annual Executive Incentive Compensation Plan, as amended.*
10.3 United Technologies Corporation Disability Insurance Benefits for Executive Control Group, incorporated by reference to Exhibit 10 (iii) to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1992.
10.4 United Technologies Corporation Executive Estate Preservation Program, incorporated by reference to Exhibit 10(iv) to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1- 812) for fiscal year ended December 31, 1992.
10.5 United Technologies Corporation Pension Preservation Plan, incorporated by reference to Exhibit 10(v) for United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1992.
10.6 United Technologies Corporation Senior Executive Severance Plan, incorporated by reference to Exhibit 10(vi) to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1992.
10.7 United Technologies Corporation Deferred Compensation Plan, as amended.*
10.8 Otis Elevator Company Incentive Compensation Plan, incorporated by reference to Exhibit 10(viii) to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1992.
10.9 United Technologies Corporation Directors Retirement Plan, as amended.*
10.10 United Technologies Corporation Deferred Compensation Plan for Non-Employee Directors, incorporated by reference to Exhibit 10(x) to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1992.
10.11 United Technologies Corporation Long Term Incentive Plan, as amended.*
10.12 United Technologies Corporation Executive Disability, Income Protection and Standard Separation Agreement Plan, incorporated by reference to Exhibit 10(xii) to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1992.
10.13 United Technologies Corporation Directors' Restricted Stock/Unit Program, incorporated by reference to Exhibit 10(xiii) to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1992.
10.14 United Technologies Corporation Board of Directors Deferred Stock Unit Plan*, and Amendment 1 thereto (incorporated by reference to Exhibit (10)(iii)(A)(1) to United Technologies Corporation Report on Form 10-Q (Commission file number 1-812) for quarterly period ended June 30, 2000).
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Exhibit Number 10.15 United Technologies Corporation Pension Replacement Plan, incorporated by reference to Exhibit 10(xv) to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1993.
10.16 United Technologies Corporation Special Retention and Stock Appreciation Program, incorporated by reference to Exhibit 10(xvi) to United Technologies Corporation Report on Form 10-Q (Commission file number 1-812) for quarterly period ended September 30, 1995.
10.17 United Technologies Corporation Nonemployee Director Stock Option Plan*, and Amendment 1 thereto (incorporated by reference to Exhibit (10)(iii)(A)(2) to United Technologies Corporation Report on Form 10-Q (Commission file number 1-812) for quarterly period ended June 30, 2000).
10.18 Merger Agreement, dated as of February 21, 1999, among United Technologies Corporation, HSSail Inc. and Sundstrand Corporation, incorporated by reference to Exhibit 2.1 to United Technologies Corporation Report on Form 8-K (Commission file number 1-812) dated February 21, 1999 and filed with the SEC on February 23, 1999.
10.19 Stock Purchase Agreement, dated as of March 16, 1999, by and between Nevada Bond Investment Corp. II and Lear Corporation, incorporated by reference to Exhibit 99.1 to United Technologies Corporation Report on Form 8-K (Commission file number 1-812) dated March 16, 1999 and filed with the SEC on March 19, 1999.
10.20 Incentive compensation letter agreement dated December 21, 1998 and signed April 1, 1999 between the Corporation and C. Scott Greer, President of UT Automotive, incorporated by reference to Exhibit 10.1 to United Technologies Corporation Report on Form 10-Q (Commission file number 1-812) for the Quarter ended June 30, 1999.
11 Statement re: Computation of Per Share Earnings.**
12 Statement re: Computation of Ratio of Earnings to Fixed Charges.**
13 Annual Report to Shareowners for year ended December 31, 2000 (except for the pages and information thereof expressly incorporated by reference in this Form 10-K, the Annual Report to Shareowners is provided solely for the information of the Securities and Exchange Commission and is not to be deemed "filed" as part of this Form 10-K).**
21 Subsidiaries of the Registrant.**
23 Consent of PricewaterhouseCoopers LLP, included as page of this Form 10-K.
24 Powers of Attorney of Antonia Handler Chayes, Jean- Pierre Garnier, Jamie S. Gorelick, Charles R. Lee, Richard D. McCormick, Frank P. Popoff, Andre Villeneuve, Harold A. Wagner and Sanford I. Weill.**
Notes to Exhibits List:
* Incorporated by reference to Exhibit of the same number to United Technologies Corporation Annual Report on Form 10-K (Commission file number 1-812) for fiscal year ended December 31, 1995. ** Submitted electronically herewith.
Exhibits 10.1 through 10.20 are contracts or compensatory plans required to be filed as exhibits pursuant to Item 14(c) of the requirements for Form 10-K reports.
(b) No reports on Form 8-K were filed by the Corporation during the quarter ended December 31, 2000.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
UNITED TECHNOLOGIES CORPORATION (Registrant)
By /s/ David J. FitzPatrick David J. FitzPatrick Date: February 12, 2001 Senior Vice President, Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated, on the date set forth below.
Signature Title Date
/s/ George David Chairman, Director February 12, 2001 George David and Chief Executive Officer
/s/ Karl J. Krapek Director, President February 12, 2001 Karl J. Krapek and Chief Operating Officer
/s/ David J. Fitzpatrick Senior Vice February 12, 2001 David J. Fitzpatrick President, Chief Financial Officer and Treasurer
/s/ David G. Nord Vice President, February 12, 2001 David G. Nord Controller
ANTONIA HANDLER CHAYES* Director ) (Antonia Handler Chayes) *By:/s/William H. Trachsel JEAN-PIERRE GARNIER* Director ) William H. Trachsel (Jean-Pierre Garnier) Attorney-in-Fact Date: February 12, 2001 JAMIE S. GORELICK* (Jamie S. Gorelick) Director )
CHARLES R. LEE* Director ) (Charles R. Lee)
RICHARD D. MCCORMICK* Director ) (Richard D. McCormick)
FRANK P. POPOFF* Director ) (Frank P. Popoff)
ANDRE VILLENEUVE* Director ) (Andre Villeneuve)
HAROLD A. WAGNER* Director ) (Harold A. Wagner)
SANFORD I. WEILL* (Sanford I. Weill) Director )
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REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Shareowners of United Technologies Corporation
Our audits of the consolidated financial statements referred to in our report dated January 18, 2001 appearing on page 9 of the 2000 Annual Report to Shareowners of United Technologies Corporation (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 14(a)(2) of this Form 10-K. In our opinion, the Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
/s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Hartford, Connecticut January 18, 2001
S-I
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus constituting part of the Registration Statements on Form S-3 (Nos. 333- 51830, 333-89041 and 333-91959), in the Registration Statement on Form S-4 (No. 333-77991) as amended by Post-Effective Amendment No. 1 on Form S-8 (No. 333-77991-01) and in the Registration Statements on Form S-8 (Nos. 333- 21853, 333-18743, 333-21851, 33-57769, 33-45440, 33-11255, 33-26580, 33- 26627, 33-28974, 33-51385, 33-58937, 2-87322, 333-77817 and 333-82911) of United Technologies Corporation of our report dated January 18, 2001 relating to the financial statements, which appears on page 9 of the 2000 Annual Report to Shareowners, which is incorporated by reference in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report dated January 18, 2001 on the Financial Statement Schedule, which appears on page S-I of this Form 10-K.
/s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Hartford, Connecticut February 12, 2001