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Proc-Type: 2001,MIC-CLEAR
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FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) Commission File Number 1-812 UNITED TECHNOLOGIES CORPORATION UNITED TECHNOLOGIES CORPORATION FINANCIAL STATEMENTS OF THE UNITED
TECHNOLOGIES CORPORATION REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of 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 United Technologies Corporation Represented Employee Savings Plan (the
"Plan") at December 31, 2000 and December 31, 1999, and the changes in net
assets available for benefits for the year ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States. These financial statements
are the responsibility of the Plans 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 United Technologies Corporation
Represented Employee Savings Plan $ $ 657
173
830 $ $ The accompanying notes are an integral part of these
financial statements. United Technologies Corporation Represented
Employee Savings Plan $ Total additions $ The accompanying notes are an integral
part of these financial statements. UNITED TECHNOLOGIES CORPORATION Notes to Financial Statements NOTE 1 - DESCRIPTION OF THE PLAN General. The United Technologies
Corporation ("UTC") Represented Employee Savings Plan (the "Plan") is
a defined contribution savings plan administered by UTC. It is subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA"). Union
represented employees of UTC, covered by collective bargaining agreements that provide 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 tax deferred contributions of
between $2 per week and the maximum amount permitted by the relevant collective bargaining
agreement. Certain participants, depending on their collective bargaining agreement, may
also make after-tax 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 match 50
percent of the participant's contributions, up to specified limits. Generally, employer
contributions, plus actual earnings thereon, become fully vested after two years of Plan
participation. Certain participants may also make limited
tax-deferred or after-tax contributions to an individual medical account ("IMA")
or tax-deferred contributions for cost of living adjustments ("COLA"), where
permitted. The employer will match 75 percent of the participants IMA contribution.
All contributions to an IMA will be invested 100 percent in the Income Fund and may not be
withdrawn until retirement or termination. Participant Accounts. Each
participants account is credited with the participant's contributions and
allocations of (a) UTC's contributions based on a percentage of the participants
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 UTC contributions. For the year ended December 31, 2000, approximately
$15,000 of forfeitures were used to fund UTC's contributions. Trustee and Recordkeeper. All of the
Plan's assets are held by Bankers Trust Company ("Bankers Trust"), the Plan
trustee. Bankers Trust is a subsidiary of Deutsche Bank. 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 excluding IMA and COLA. 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 Deutsche Bank'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 terminating participants. Participants terminating due
to retirement may elect to receive benefits in installments over two to twenty years. At
the participants election, the portion of a lump sum distribution attributable to 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, 2000 were approximately $308,000. 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 Plans 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 Plan 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 Plan trustee and recordkeeping fees, were paid directly by the
employer in 2000. The employer also paid certain investment management fees for the funds
administered by Deutsche Asset Management. All other administrative and investment
expenses were paid out of Plan assets during 2000. Use of Estimates. The preparation of
financial statements requires UTC management to make estimates and assumptions that affect
the reported amounts in the financial statements. Actual results could differ from those
estimates. NOTE 3 - INVESTMENTS The following presents investments that
represent 5 percent or more of the Plan's net assets: NOTE 4 - INVESTMENT CONTRACTS WITH INSURANCE COMPANIES The Plan's Income Fund invests in insurance
contracts with insurance companies. Under the 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
2000 and 1999 were 8.3% and 8.1%, 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 plans'
participants. At December 31, 2000, the Plans
interest in the Master Trust comprised 43,878,093 units of the 519,377,890 total units of
participation, or 8.45%. At December 31, 1999, the Plan's interest in the Master Trust
comprised 41,731,235 units of the total 510,203,518 units of participation, or 8.18%. 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 $
Subtotal
Total assets Liabilities:
Total liabilities
Net Assets $ $ United Technologies Corporation Year Ended $ Increase in
net assets Net assets: $ $ $ $ $ $ NOTE 6 - RELATED-PARTY TRANSACTIONS Certain Plan investment options are managed
by Deutsche Asset Management and Fidelity. Bankers Trust, a subsidiary of Deutsche Bank,
and Fidelity are the Plans trustee and recordkeeper, respectively, 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 PLAN TRANSFER
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Plan period ended December 31, 2000
REPRESENTED EMPLOYEE SAVINGS PLAN
One Financial Plaza
Hartford, Connecticut 06101
REPRESENTED EMPLOYEE SAVINGS PLAN
the United Technologies Corporation
Represented Employee Savings Plan
PricewaterhouseCoopers LLP
Hartford, Connecticut
June 29, 2001
Statement of Net Assets Available for Benefits
(Thousands of Dollars)
December 31,
December 31,
2000
1999
Assets:
Plan's interest in
Master Trust (Notes 3, 4, and 5)
954,548
922,102
Contribution
receivable:
Participants'
97
Employer's
28
125
Net Assets Available for Benefits
955,378
922,227
=======
=======
Statement of Changes in Net Assets Available for Benefits
(Thousands of Dollars)
Year Ended
December 31,
2000
Additions to net assets
attributed to:
Investment Income:
Net depreciation in
fair value of investments
(21,550)
Interest
42,669
Dividends
9,469
Contributions:
Participants'
43,128
Employer's
11,424
85,140
Deductions from net assets
attributed to:
Distributions to
participants
(61,803)
Administrative
expenses
(113)
Total deductions
(61,916)
Net increase prior to transfers
23,224
Plan transfers:
Assets transferred
into Plan (Note 8)
10,679
Assets transferred
out of Plan
(752)
Net Plan
transfers
9,927
Net increase
33,151
Net Assets Available for
Benefits, December 31, 1999
922,227
Net Assets Available for
Benefits, December 31, 2000
955,378
=======
REPRESENTED EMPLOYEE SAVINGS PLAN
December 31,
(Thousands of Dollars, except
unit amounts)
2000
1999
Equity Fund, 6,387,637 and
6,763,808 units,
respectively
$
190,224
$
221,450
UTC Common Stock Fund, 3,829,359
and
4,750,418 units, respectively
102,274
100,153
Income Fund, 7,036,382 and
6,918,254 units,
respectively
551,301
500,949
Master Trust Statement of Net Assets
(Thousands of Dollars)
December 31,
December 31,
2000
1999
Assets:
Short-term
investments
2,640
$
23,147
Investments:
Equity:
Mutual funds
784,876
663,679
Equity commingled index funds
1,460,037
1,466,274
Common stock
759,152
784,371
ESOP stock fund
3,641,487
3,152,372
Debt:
Fixed income commingled index funds
24,916
28,140
Insurance company investment contracts
4,364,663
3,883,142
Participant notes receivable
99,935
81,647
11,137,706
10,082,772
ESOP receivables
128,988
116,234
Interest and dividend receivables
14,678
20,085
11,281,372
10,219,091
Accrued
liabilities
8,708
6,014
Accrued
ESOP interest
2,070
2,154
ESOP
debt
301,100
336,600
Notes
payable to UTC
153,333
131,233
465,211
476,001
10,816,161
9,743,090
========
========
Net assets of the Master Trust
allocable to the Plan
$
954,548
$
922,102
========
========
Master Trust Statement of Changes in Net Assets
(Thousands of Dollars)
December 31,
2000
Additions:
Interest and
dividend income
484,236
Net appreciation on
fair value of investments
422,709
Contributions from
participating plans for purchase of units
294,212
Total additions
1,201,157
Deductions:
Benefit payments on
behalf of participating plans
(583,163)
Master trust
expenses
(37,444)
Total
deductions
(620,607)
Net increase prior to transfers
580,550
Plan transfers:
Assets transferred
in
495,024
Assets transferred
out
(2,503)
Net Plan
transfers
492,521
1,073,071
Beginning of year
9,743,090
End of year
10,816,161
========
Amounts pertaining to the Plan:
Plan interest in net
appreciation and investment income
of Master Trust
$
30,588
========
Contributions
received (cash basis)
53,847
========
Assets transferred
into Plan (Note 8)
10,679
========
Pension benefits
paid
(61,803)
========
Plan expenses
(113)
========
Assets transferred
out of Plan
(752)
========
On June 10, 1999, UTC acquired Sundstrand Corporation and merged it with its Hamilton Standard division and formed a wholly owned subsidiary, Hamilton Sundstrand. During 1999, UTC approved the merger of the Sundstrand Corporation Employee Savings Plan (the "Sundstrand Plan") with the UTC Employee Savings Plan and the UTC Represented Employee Savings Plan (the "UTC Plans"). Salaried and hourly participants of the Sundstrand Plan were eligible to participate in the UTC Plans effective January 1, 2000. On January 13, 2000, approximately $425,503,000 of net assets were transferred into the UTC Plans of which $7,981,000 was transferred into this Plan.
NOTE 9 TAX STATUS
The Internal Revenue Service has determined and informed UTC by letter dated February 8, 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 letter. However, the Plan administrator and tax counsel believe that the Plan is designed and currently being operated in compliance with the applicable requirements of the IRC.
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.
UNITED TECHNOLOGIES CORPORATION
REPRESENTED EMPLOYEE SAVINGS PLAN
Dated: June 29, 2001 By:
/s/ Laurie P. Havanec
Laurie P. Havanec
Director, Employee Benefits and Human Resources Systems
United Technologies Corporation
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-26580) of United Technologies Corporation of our report dated June 29, 2001 relating to the financial statements of the United Technologies Corporation Represented Employee Savings Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Hartford, Connecticut
June 29, 2001