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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES[X]
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
or
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE[ ]
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________ to ____________________
Commission file number 1-812
UNITED TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 06 0570975
(State or other (I.R.S. Employer
jurisdiction of
incorporation or Identification No.)
organization)
United Technologies Building, Hartford, 06101
Connecticut
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: ( 203) 728-7000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
Medium-Term Notes, Series B, New York Stock Exchange
PEN
Notes due September 8, 1997
Common Stock ($5 par value) New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and is not to be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [ X ]
At February 1, 1994, there were 126,610,856 shares of Common Stock
outstanding; the aggregate market value of the voting Common Stock held by non
affiliates at February 1, 1994 was approximately $8,435,448,281.
List hereunder the following documents if incorporated by reference and the
Part of the Form
10-K into which the document is incorporated: (1) United Technologies
Corporation 1993 Annual Report to Shareowners, Parts I, II and IV; and (2)
United Technologies Corporation Proxy Statement for the 1994 Annual Meeting of
Shareowners, Part III.
PAGE
UNITED TECHNOLOGIES CORPORATION
________________________________
Index to Annual Report
on Form 10-K
Year Ended December 31, 1993
PART I
Page
Item 1. Business 1
Item 2. Properties 13
Item 3. Legal Proceedings 14
Item 4. Submission of Matters to a Vote of Security 16
Holders
- ----- Executive Officers of the Registrant 16
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters 19
Item 6. Selected Financial Data 19
Item 7. Management's Discussion and Analysis of Results of
Operations and Financial Position 19
Item 8. Financial Statements and Supplementary Data 19
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 19
PART III
Item 10. Directors and Executive Officers of the Registrant 19
Item 11. Executive Compensation 19
Item 12. Security Ownership of Certain Beneficial Owners 19
and Management
Item 13. Certain Relationships and Related Transactions 19
PART IV
Item 14. Exhibits, Financial Statement Schedules, and 20
Reports on Form 8-K
PAGE
Item 1. Business
History of Business
United Technologies Corporation was incorporated in Delaware in 1934. Since
1973, growth has been enhanced by the acquisition of several companies and by
internal growth of existing businesses of the Corporation*.
In the first quarter of 1988, the Corporation sold its Essex Group. In
December 1988, the Corporation purchased a 46 percent equity interest in
Sheller-Globe Corporation, and purchased the remaining equity of the company in
the fourth quarter of 1989. During 1990, the Corporation sold its interests in
several of the Automotive segment's non-core businesses. In January 1994, the
Corporation announced that it was planning to sell 40% of the economic interest
in its Automotive segment to the public through an initial public offering. See
the description of Automotive at pages 11 through 12 of this Report. In
February of 1994, the Corporation announced an agreement to sell Norden Systems,
Inc., to Westinghouse Electric Corporation, subject to approval of the U.S.
Government.
Management's Discussion and Analysis of the Corporation's Results of
Operations for 1993 compared to 1992, and for 1992 compared to 1991, and its
Financial Position at December 31, 1993 and 1992, and Selected Financial Data
for each year in the five year period ended December 31, 1993 are set forth on
pages 27 through 35 of the Corporation's 1993 Annual Report to Shareowners.
Whenever reference is made in this report to specific pages in the 1993 Annual
Report to Shareowners, such pages are incorporated herein by reference.
Operating Units and Industry Segments
The Corporation conducts its business principally through its Pratt &
Whitney, Sikorsky, Hamilton Standard, Norden, Carrier, Otis, and UT Automotive
units and also the United Technologies Research Center.
The operating units of the Corporation conduct their business within five
principal industry segments or lines of business--Pratt & Whitney, Flight
Systems, Carrier, Otis, and Automotive. Management believes that during 1993
the principal products produced by the major business units within these five
segments held in many instances, rankings of either number one or two. The
principal products of the operating units reported within each of these industry
segments are as follows:
Industry Segment Principal Products
Pratt & Whitney --Pratt & Whitney engines and parts
Flight Systems --Sikorsky helicopters and parts
--Hamilton Standard engine controls, environmental
systems, propellers and other flight systems
--Norden airborne and ground radar and
command/control systems
--Chemical Systems and USBI rocket boosters and
preparation and refurbishment of rocket boosters
Carrier --Carrier heating, ventilating, air conditioning,
and refrigeration equipment and service
Otis --Otis elevators, escalators and service
Automotive --Automotive components and systems
The Consolidated Summary of Business Segment Financial Data for the years
1991 through 1993 appears on pages 51 through 54 of the Corporation's 1993
Annual Report to Shareowners.
_______________
*"Corporation," unless the context otherwise requires, means United
Technologies Corporation and its consolidated subsidiaries.
PAGE
2
Description of Business by Industry Segment
The following description of the Corporation's business by industry segment
should be read in conjunction with Management's Discussion and Analysis of
Results of Operations and Financial Position appearing in the Corporation's 1993
Annual Report to Shareowners, especially the information contained therein under
the headings "Business Environment" and "Restructuring and Other Actions."
Pratt & Whitney
Pratt & Whitney's business consists almost entirely of revenues* from the
sale of aircraft gas turbine engines and spare parts and from the overhaul and
repair of engines. Pratt & Whitney products are sold principally to aircraft
manufacturers, airlines and other aircraft operators, aircraft leasing
companies, and the U.S. and foreign governments. Direct and indirect revenues
from sales to the U.S. Government amounted to $1,556 million, or approximately
26 percent, of Pratt & Whitney revenues in 1993. Sales to the Boeing Company
and McDonnell Douglas Corporation, consisting primarily of commercial aircraft
jet engines, amounted to $1,218 million, or approximately 21 percent, and $452
million, or approximately 8 percent, respectively, of total Pratt & Whitney
revenues in 1993.
Commercial Aircraft Engines and Parts
Pratt & Whitney is one of the world's leading producers of large turbofan
(jet) engines and parts for commercial aircraft. During the years 1991 through
1993, the Corporation's total revenues from its commercial engine business were
as follows:
Year Total Revenues Engines & Parts
1991 $3,778 million
1992 $3,700 million
1993 $3,266 million
As of December 31, 1993, Pratt & Whitney jet engines powered approximately
6,600 commercial aircraft for approximately 725 domestic and foreign airlines
and other owners and operators. Jet engines currently in production at Pratt &
Whitney for installation in commercial aircraft are as follows:
Year of Current
Commercial First Maximum Current Production Number of
Engine Commercial Takeoff Aircraft in which Engines per
Designation Service Thrust Installed Aircraft
JT8D-200 1980 21,000 lbs. Douglas MD-80** 2
PW2000 1984 41,700 lbs. Boeing 757-200/PF*** 2
PW4000 1987 62,000 lbs. Airbus A310-300*** 2
Airbus A300-600*** 2
Boeing 747-400*** 4
Boeing 767-200/- 2
300***
Douglas MD-11*** 3
IAE V2500 1989 30,000 lbs. Airbus A320/A321**** 2
Douglas MD-90***** 2
_______________
For the definition of "revenues" as used in this report, see Notes to *
Consolidated Summary of Business Segment Financial Data at page 54 of the
Corporation's 1993 Annual Report to Shareowners.
** Powered exclusively by Pratt & Whitney engines.
Powered by competitive as well as Pratt & Whitney engines.***
**** Powered by competitive as well as IAE International Aero Engines AG
engines.
*****Powered exclusively by IAE International Aero Engines AG engines.
PAGE
3
During 1992, International Lease Finance and Shorouk Air announced firm
orders for 14 Boeing 757 aircraft, each powered by two PW2000 engines. At
December 31, 1993, a total of 14 customers had announced firm orders for 376
Boeing 757 aircraft powered by 752 PW2000 engines, of which 568 engines had been
delivered.
The PW4000 is operating in airline service today at up to 62,000 pounds of
thrust and was certified at 68,000 pounds of thrust for the Airbus A330 in
August, 1993, and is scheduled to be certified at 84,000 pounds of thrust for
the Boeing 777 in April 1994. The PW4000 engine powers current production
McDonnell Douglas MD-11, Boeing 747 and 767, and Airbus A300 and A310 aircraft.
During 1990, United Airlines selected the PW4000 as the launch engine on the new
Boeing 777 aircraft as part of a $4 billion engine order, the largest in Pratt &
Whitney's history. During 1991, All Nippon Airways became the second customer
to select the PW4000-powered Boeing 777. In 1993, firm orders for 45 installed
PW4000 engines were announced by six customers. At December 31, 1993, 67
customers had ordered a total of 674 aircraft powered by 1,748 PW4000 engines,
of which 984 engines had been delivered.
Motoren-und Turbinen-Union GmbH (MTU), a subsidiary of Daimler-Benz of
Germany, and Pratt & Whitney have agreed that each company will participate with
the other in the development, manufacture and marketing of commercial gas
turbine engines. Under terms of a general collaboration agreement signed in
March 1991, Pratt & Whitney will be the lead company on the PW4084, the growth
version of the PW4000 engine intended for the Boeing 777 aircraft. MTU will
have a 12.5 percent share of this program. Pratt & Whitney/MTU presently
collaborate in the development, manufacture and marketing of the JT8D-200,
the PW300 (see the discussion of General Aviation Engines and Parts
beginning at page 4 of this Report), the PW2000 and the V2500 commercial gas
turbine engines. P&W, GE, SNECMA and MTU are negotiating an agreement under
which a European company could be formed to produce small turbofan engines in
the range of the 12,000 to 20,000 pound thrust class.
IAE International Aero Engines AG (IAE), a corporation whose shareholders
consist of Pratt & Whitney, Rolls-Royce plc of England, Japanese Aero Engines
Corporation, MTU, and FiatAvio of Italy, is providing the V2500 engine, to cover
the range of 18,000 to 30,000 pounds of thrust. Pratt & Whitney has a 30
percent equity share in IAE. At December 31, 1993, 18 customers had placed firm
orders for 311 A320 and A321 (a larger capacity derivative of the A320) aircraft
to be powered by the V2500 engine. In addition, at December 31, 1993, seven
customers had placed firm orders for 101 MD-90s, a two engine aircraft which
will be powered exclusively by the V2500.
The competitive environment encountered in introducing new airframe/engine
combinations into the fleets of individual airlines, and the manner in which
Pratt & Whitney and other engine suppliers respond to that environment, are
discussed at pages 5 through 7 of this Report.
Military Engines and Parts
Pratt & Whitney is one of two major suppliers to the U.S. Government of
large jet engines and jet engine parts for military aircraft. During the years
1991 through 1993, the Corporation's total revenues from its government engine
business were as follows:
Year Total Revenues Engines & Parts
1991 $2,062 million
1992 $2,006 million
1993 $1,595 million
At December 31, 1993, approximately 16,500 Pratt & Whitney jet engines were
in active military inventories of the U.S. and foreign governments.
Jet engines currently in production at Pratt & Whitney for installation on
military aircraft are as follows:
PAGE
4
Current Current Number of
Military Year of Maximum Production Engines per
Engine First Takeoff Aircraft in Aircraft
Designation Operational Thrust which Installed
Use
F100 1974 29,000 lbs. Air Force F-15 2
class Air Force F-16 1
F117 1992 41,700 lbs. Air Force C-17 4
Pratt & Whitney competes with General Electric Company (GE) for engine
orders for F-15 and F-16 fighter aircraft. The F-15 is produced by McDonnell
Douglas Corporation, and the F-16 is currently produced by Lockheed Corporation.
Since 1982, Pratt & Whitney's F100 engine has been used to fill approximately
one-half of the U.S. Air Force's engine orders for these aircraft. The number
of engines for these aircraft ordered annually by the Air Force has decreased
from 231 engines ordered in 1989 to 12 engines ordered in 1993, all 12 of which
have been awarded to GE. The Corporation has been notified by the U.S. Air
Force that no further F-16 acquisitions are planned at present.
During 1993, Pratt & Whitney delivered two F100 engines under a contract
with the South Korean Air Force which calls for production and licensed
production of a total of 132 F100 engines. Delivery of 18 engines under an F-16
program with Taiwan is scheduled for 1994, and current orders call for Pratt &
Whitney to sell 166 F100 engines under that program. In March 1993, the Royal
Saudi Air Force issued a letter of intent announcing the selection of Pratt &
Whitney's F100-PW-229 to power its F-15 fleet, which contemplated the delivery
of approximately 154 engines, commencing in 1994. However, in February 1994
Saudi Arabia reached an agreement in principle with the U.S. Government and
five U.S. defense contractors to restructure certain payments for military
hardware, which included stretching out deliveries of the 72 F-15s involved.
In January 1994, Israel selected an F-15 derivative with the F100 engine for
an anticipated procurement of 20 aircraft, with an option to purchase five
more, plus an undetermined number of spares.
Currently, all orders for the F117 engine, a version of the PW2000 which
powers the C-17 airlift aircraft produced by McDonnell Douglas for the U.S. Air
Force, are placed directly with Pratt & Whitney by the Air Force. Twenty F117
engines were delivered to the Air Force in 1993, and 35 F117 engines are
scheduled for delivery in 1994. Original Air Force plans called for delivery of
120 C-17s; however, management believes that number may be reduced as a result
of either or both of U.S. defense budget cuts and possible Air Force procurement
of non-military aircraft to fill the C-17's anticipated role.
Jet engines under development by Pratt & Whitney are designated the J52-P-
409 and the F119-PW-100 (formerly PW5000). The J52-P-409 is an improved
performance version of the J52-P-408 and J52-P-8 engines and is rated at
approximately 12,500 pounds of takeoff thrust. Due to reductions in the U.S.
defense budget, management cannot predict with certainty whether this engine
will be produced in significant numbers. The F119 was selected to power the Air
Force's F-22 aircraft under development by the team of Lockheed Corporation and
the Boeing Company, and it is a 35,000-pound-thrust class engine. This engine
is being developed under an Engineering and Manufacturing Development contract.
Also, as a result of reductions in the U.S. defense budget, management cannot
predict with certainty when, and in what quantities, production of the F119 will
commence.
The competitive environment encountered in supplying military jet engines
and jet engine parts to the U.S. Government is discussed beginning at page 12 of
this Report.
General Aviation Engines and Parts
Pratt & Whitney is one of the world's leading producers of small gas turbine
engines and parts for business and regional/commuter aircraft, and also supplies
small turbine engines and parts for military aircraft, for helicopters and as
auxiliary power units for large transport aircraft.
Small gas turbine engines are manufactured by Pratt & Whitney Canada and
consist of the PT6 series of turboprop/turboshaft engines, which produce up to
1,650 shaft-horsepower, the JT15D series of turbofan engines, which produce up
to 3,095 pounds of takeoff thrust and the PW100 series, a turboprop engine,
which produces up to 2,750 shaft-horsepower. Typical applications are six to
PAGE
5
eighty-passenger business and regional airline aircraft, including the Beech
King Air and Super King Air series, the Beech Starship I and Piaggio Avanti
pusher turboprops, the Beech 1900 airliner and the Beechjet, Cessna Citation II
and V and Caravan I and II, de Havilland Dash 8-100 and Dash 8-300, Piper
Cheyenne IIIA, Embraer EMB-120, British Aerospace ATP, Fokker 50, Dornier DO 328
and Aerospatiale/Aeritalia ATR-42 and ATR-72 aircraft, and the Bell 212/412 and
Sikorsky S-76B helicopters.
On December 31, 1993, more than 17,000 PT6, JT15D and PW100 powered aircraft
and helicopters were in use in approximately 160 countries and territories.
During 1993, two Pratt & Whitney powered contenders for the Air Force Joint
Primary Aircraft Training System completed first flight, one with the PT6 and
the other with the JT15D. The PT6, JT15D and PW100 were each selected for a new
or derivative installation in 1993.
The PW300, a 5,000 pound thrust class turbofan engine, has been developed
for mid-size business jets under a collaboration agreement with MTU. The engine
powers two applications, the Raytheon Corporate Jets Hawker 1000 and the Learjet
Model 60, which started production deliveries in 1991 and 1993, respectively.
The PW200 series, a new 500 to 800 shaft-horsepower turboshaft engine, is
being developed in Canada to power a series of light helicopters. The first
model received Canadian Department of Transport certification in 1991 and is
installed in the McDonnell Douglas MD Explorer helicopter which achieved first
flight in 1992. The PW206B is installed in the Eurocopter EC 135, currently
being developed.
In September 1993, Pratt & Whitney Canada launched the PW500 program, a new
family of turbofan engines in the 2,500-4,000 thrust class aimed at light to
medium business jets. An engine supply contract has been signed with a launch
customer but no firm orders have yet been received.
The PW901A engine is used as the auxiliary power unit for the Boeing 747-400
aircraft. An auxiliary power unit provides aircraft with starting power,
electric power, lighting and air conditioning. More than 430 units have now
been ordered by Boeing.
Other Pratt & Whitney Products
Other activities in the Pratt & Whitney Segment include the production of
the RL10 liquid hydrogen fuel rocket motor used for upper stage propulsion for
the National Aeronautics and Space Administration (NASA) Atlas-Centaur and
Titan-Centaur launch vehicles; the supply of contract services for the
construction, outfitting and operation of aircraft and aircraft engine
maintenance centers for foreign customers; and the overhaul and repair of Pratt
& Whitney engines in the U.S. and Canada and in overseas locations. Pratt &
Whitney is a participant in the National Aero-space Plane (NASP) team with
Rockwell, Rocketdyne, McDonnell Douglas and Lockheed under contract with the
U.S. Air Force. The contract for the NASP involves research and concept studies
for the X-30 design.
Other Pratt & Whitney Segment Information
Pratt & Whitney's business is subject to rapid changes in technology;
lengthy and costly development cycles; heavy dependence on a small number of
products and programs; changes in legislation and in government procurement and
other regulations and procurement practices (such as the current Defense
Department emphasis on development of prototypes rather than full production of
new systems and on upgrading
existing systems rather than developing new systems); procurement preferences
and policies of some foreign customers which require in-country manufacture
through co-production (such as the co-production of the F100-PW-229 for the
South Korean Fighter Program), offset procurement (where in-country purchases
are required as a condition to obtaining orders), joint ventures and production
sharing (such as exist in the case of the IAE V2500, JT8D, PW300, PW2000 and
PW4000 engines), licensing or other arrangements; substantial competition from
major domestic manufacturers and from foreign manufacturers whose governments
sometimes give them direct and indirect research and development, marketing
subsidies and other assistance for their commercial products; and changes in
economic, industrial and international conditions.
The principal methods of competition in Pratt & Whitney's business are
price, product performance, service, delivery schedule and other terms and
PAGE
6
conditions of sale, including fleet introductory assistance allowances and
performance and operating cost guarantees, and the participation by the
Corporation and its finance subsidiaries in customer financing arrangements in
connection with sales of commercial jet engines. Fleet introductory allowances
are financial incentives offered by the Corporation to airline customers in
order to make engine sales which lead, in turn, to the sale of spare parts and
services. Pratt & Whitney's major competitors are the aircraft engine
businesses of GE and Rolls Royce. (For information regarding the Corporation's
finance subsidiaries and commitments to finance or arrange financing for
commercial aircraft, see Note 5 of Notes to Financial Statements at page 43 of
the Corporation's 1993 Annual Report to Shareowners.)
Historically, it was common to new aircraft programs for only one engine to
be selected for a given airplane. In those situations, competition between
engine manufacturers occurred principally at the time of the selection of the
engine for the particular aircraft. That approach still prevails in some
situations, including general aviation aircraft, the McDonnell Douglas MD-80,
which is powered exclusively by the Pratt & Whitney JT8D engine, and the MD-90,
which is powered exclusively by the IAE V2500. In those situations, when the
customer chooses an aircraft, there is no choice of engines. The customer must
buy the engine originally selected for that aircraft.
In the case of commercial aircraft such as the Boeing 747, 757, 767 and 777,
the McDonnell Douglas MD-11, and the Airbus Industrie A300, A300-600, A310, A320
and A321, aircraft manufacturers offer their customers a choice of engines,
giving rise to substantial competition among engine manufacturers at the time of
the sale of aircraft. This competition has become increasingly significant
where new commercial airframe/engine combinations are first introduced to the
market and into the fleets of individual airlines. Financial incentives granted
by engine suppliers, and performance and operating cost guarantees on their
part, are frequently important factors in such sales and can be substantial.
(For information regarding participation in guarantees of customer financing
arrangements granted by Pratt & Whitney and performance and operating cost
guarantees, see Notes 1, 5, 12 and 13 of Notes to Financial Statements at pages
41 to 43 and 50, of the Corporation's 1993 Annual Report to Shareowners.)
Sales of Pratt & Whitney military engines are adversely affected by
declining defense budgets (both in the U.S. and, to some extent, abroad) and the
presence of competitors, such as General Electric. Military spare parts sales
have been, and will continue to be, adversely affected by the decline in overall
procurement by the U.S. Government and, to a lesser extent, by the U. S.
Government's policy of increasing its parts purchases from suppliers other than
the original equipment manufacturers. The combined impact of these developments
is not believed to be material to the Corporation at the present time. The
Corporation's sales to the U.S. Government of spare parts for military products,
a substantial portion of which are manufactured by the Corporation's suppliers
and subcontractors, were approximately $374 million or 6 percent of total Pratt
& Whitney revenues in 1993.
Pratt & Whitney sales in the U.S. and Canada are made directly to the
customer by the Corporation and, to a limited extent, through independent
distributors. Other export sales from the U.S. are made with the assistance of
an overseas network of sales offices and representatives outside the U.S.
Export sales amounted to $2,289 million, or approximately 33 percent, and $2,031
million, or approximately 34 percent, of total Pratt & Whitney revenues in 1992
and 1993, respectively.
Pratt & Whitney's revenues associated with manufacturing operations outside
the U.S., which consist primarily of small gas turbine engines and parts
manufactured in the Corporation's plants near Montreal, Canada, amounted to
$1,217 million, or approximately 18 percent, and $1,118 million, or
approximately 19 percent, of total Pratt & Whitney revenues in 1992 and 1993,
respectively. Such operations are subject to local government regulations as
well as to varying political and economic risks.
At December 31, 1993, the business backlog in the Pratt & Whitney business
amounted to $9,484 million, including $1,600 million under funded contracts and
subcontracts with the U.S. Government, as compared to $11,627 million and $1,553
million, respectively, at December 31, 1992. Of the total Pratt & Whitney
business backlog at December 31, 1993, approximately $5,133 million is expected
to be realized as sales in 1994. Pratt & Whitney's backlog is based on the
terms of firm orders received and does not include discounts granted directly to
airline and other customers. Beginning in 1992, a number of major domestic
PAGE
7
airlines, foreign airlines and other owners and operators expressed their
interest in postponing delivery of aircraft on order and, in some cases,
existing orders and options for future delivery were canceled. The Corporation
has negotiated with United Airlines changes to previously negotiated engine
contract terms, including deferral of some engine deliveries. These factors
could affect the amount of Pratt & Whitney business backlog which will
ultimately be realized as sales.
Flight Systems
The Corporation's Flight Systems business is conducted through Sikorsky
Aircraft, Hamilton Standard, Norden Systems, Chemical Systems, USBI, and
International Fuel Cells.
Flight Systems products are sold principally to the U.S. Government,
airframe and aircraft engine manufacturers, airlines and other aircraft
operators, and foreign governments. Direct and indirect revenues from sales to
the U.S. Government amounted to $2,416 million, or approximately 62 percent, of
total Flight Systems revenues in 1993.
Military and Commercial Helicopters
Sikorsky is one of the world's leading manufacturers of military and
commercial helicopters. Sikorsky is the primary supplier of transport
helicopters to the U.S. Army. Sikorsky is currently producing helicopters for a
variety of uses including passenger, utility/transport, cargo, anti-submarine
warfare, search and rescue, mine countermeasures and heavy-lift operations. In
addition to all branches of the U.S. military, Sikorsky supplies helicopters to
foreign governments and the worldwide commercial market. Sikorsky's business
base also encompasses spare parts for past and current helicopters produced by
Sikorsky, and, through the Sikorsky Support Services, Inc. subsidiary of the
Corporation, repair and retrofit of helicopters in the U.S. military fleet.
Other helicopter manufacturers include Bell Helicopters, Eurocopter, Boeing
Helicopters, Agusta and Westland.
Current production programs at Sikorsky include the BLACK HAWK medium-
transport helicopter for the U.S. Army and derivatives for foreign governments;
the SEAHAWK and CV Helo medium-sized helicopters for anti-submarine warfare
missions for the U.S. Navy and derivatives for both the U.S. and foreign
governments; the HH-60 JAYHAWK medium-range recovery helicopter for the U.S.
Coast Guard; the CH-53E SUPER STALLION heavy-lift and MH-53E SEA DRAGON mine
counter-measures helicopters for the U.S. Navy and Marine Corps and derivatives
for Japan; and the S-76 intermediate-sized helicopter for executive transport
and offshore oil platform support.
In 1993, seven HH-60J JAYHAWK helicopters were delivered to the U.S. Coast
Guard. On the commercial side, 10 of the 11 deliveries of S-76 helicopters in
1993 were made to international customers.
Although in 1992 Sikorsky was awarded a U.S. Government contract for 300
BLACK HAWK helicopters through 1997, declining Defense Department budgets are
such that Sikorsky's future will be increasingly dependent upon expanding its
international position. Typically, these sales are expected to require the
development of an in-country co-production program. Sikorsky succeeded in
developing such a program in South Korea in 1990 by entering into a contract
with Korean Airlines for 81 BLACK HAWK helicopters, 74 of which were to be co-
produced. With this contract substantially completed, a supplemental contract
was signed on December 31, 1993 for an additional 57 helicopter kits. In
December 1992, Sikorsky signed a contract to provide up to 95 BLACK HAWK
helicopters to the Turkish Armed Forces. The first 45 aircraft will be produced
by Sikorsky. Of these, 40 have been delivered to and accepted by Turkey with
the remainder scheduled to be delivered by June 1994. Sikorsky currently is
negotiating a contract for the remaining 50 helicopters that are to be co-
produced with Turkish industry participation.
Sikorsky has been teamed with Boeing Helicopter Company for the Engineering
and Manufacturing Development (EMD) of the U.S. Army's next generation light
helicopter program, the RAH-66 Comanche. The Boeing/Sikorsky team has been
performing under the EMD cost reimbursement contract awarded in 1991. Present
requirements call for a minimum of 1,292 aircraft; however, due in part to
declining defense budgets, the Department of Defense in early 1992 called for an
extension of the development contract and a deferral of Comanche production
beyond 1997. The Corporation cannot predict the quantity of aircraft which
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8
ultimately will be built. Based on Department of Defense direction, the Army
and Sikorsky in January 1993 completed negotiations of a restructured
Demonstration Validation Prototype Program to validate crucial components of the
Comanche design.
Sikorsky's development of a new S-92 commercial helicopter continues.
Other Flight Systems Products
Hamilton Standard is a leading domestic producer of a number of Flight
Systems products. Major production programs include engine controls,
environmental controls, flight controls and propellers for commercial and
military aircraft. In addition, Hamilton Standard produces the space suit for
the NASA space shuttle astronauts and environmental controls for the shuttle's
orbiter.
Norden Systems produces airborne, shipboard and ground based radar systems,
electronic systems and anti-submarine warfare systems for the U.S. and foreign
governments. Current production programs include the limited rate initial
production (LRIP) of the AN/APY-3 Joint STARS (Surveillance Target Attack Radar
System) for the U.S. Air Force, the AN/APG-76 Multi-Mode Radar System (MMRS) for
the Israeli F-4 Super Phantom Program, the Airport Surface Detection Equipment
(ASDE-3) surface traffic control radar for the Federal Aviation Administration
(FAA), the fire control radar for the Multiple Launch Rocket System (MLRS), the
AN/SPS-40 and AN/SPS-67 shipboard radars, the AN/SYS sensor fusion system, and
the AN/WLR-9 acoustic intercept system which is operational on all U.S. Navy
submarines.
Development programs include Joint STARS, which was utilized in the Persian
Gulf conflict to identify ground targets; a podded version of the MMRS, which
will extend the aircraft and customer base of the radar; the Airport Movement
Area Safety System (AMASS) which, in conjunction with ASDE-3, will provide the
FAA an automatic runway incursion warning system designed to prevent aircraft
runway collisions; the EA-6B Advanced Capability Radar (ADVCAP) for the U.S.
Navy; and the WYL-1 Acoustic Intercept System, which is an advanced version of
the AN/WLR-9.
The Chemical Systems Division manufactures and provides launch services for
solid rocket propellant boosters producing more than one million pounds of
thrust which, when used in pairs, constitute the initial booster stage for the
U.S. Air Force's Titan IV launch vehicle as well as for the Martin Marietta
Titan III commercial launch vehicle. In addition, Chemical Systems Division
produces other propulsion systems, such as shuttle booster separation motors,
the Inertial Upper Stage solid rocket motors for the U.S. Air Force and NASA,
the third stage rocket motor for the Navy's Trident II Missile, Tomahawk missile
boosters and Aegis booster motors for the U.S. Navy, and is currently a
qualified supplier of the U.S. Air Force's Minuteman III/Stage III propulsion
system. In 1992, Chemical Systems received a contract from Lockheed Space and
Missiles Company for the demonstration and validation of the solid propellant
rocket, which will power the U.S. Army's Theater High Altitude Area Defense
(THAAD) ballistic missile defense system.
USBI is under contract with NASA for the Space Shuttle Solid Rocket Boosters
and is responsible for the design, assembly, test, launch operations support and
refurbishment of the solid rocket boosters. In addition, USBI provides design
support to the Shuttle Processing Contractor in the stacking and testing of the
Space Shuttle vehicle, and is responsible for the integration of the solid
rocket motors with solid rocket boosters.
International Fuel Cells Corporation (IFC) develops, manufactures and sells
fuel cell systems and fuel cell electric generating power plants to commercial,
aerospace and military customers. ONSI Corporation, an IFC subsidiary
established with investments by Toshiba Corporation of Japan and Ansaldo S.p.A.
of Italy to manufacture, sell and develop future models of stationary, packaged
fuel cell power plants of 1,000 kilowatts or less, delivered 25 of its 200-
kilowatt PC25_ fuel cell power plants to commercial customers in 1993.
Other Flight Systems Segment Information
The Flight Systems business is subject to rapid changes in technology;
lengthy and costly development cycles; heavy dependence on a small number of
products and programs; changes in legislation and in government procurement and
other regulations and procurement practices (such as the current Defense
PAGE
9
Department emphasis on development of prototypes rather than full production of
new systems and on upgrading existing systems rather than developing new
systems); declining defense budgets (both in the U.S. and abroad); procurement
preferences and policies of some foreign governments which require in-country
manufacture through co-production or offset procurement (such as co-production
and offset arrangements entered into with the governments of South Korea and
Turkey with respect to the sales discussed at page 7 of this Report), licensing
or other arrangements; substantial competition from a large number of companies,
including competition from major domestic and foreign manufacturers; and changes
in economic, industrial and international conditions.
The principal methods of competition in the Flight Systems business are
price, delivery schedules, product performance, service and other terms and
conditions of sale, including participation in the financing of helicopter
sales.
Sales in the U.S. are usually made directly to the customer by the
Corporation. Export sales to Canada from the U.S. are made directly to the
customer. All other export sales are made with the assistance of an overseas
network of sales offices and representatives outside the U.S. Such export sales
amounted to $810 million, or approximately 20 percent, and $1,000 million, or
approximately 25 percent, of total Flight Systems revenues in 1992 and 1993,
respectively.
At December 31, 1993, the Flight Systems business backlog amounted to $4,877
million, including $3,277 million under funded contracts and subcontracts with
the U.S. Government, as compared to $5,571 million and $4,026 million,
respectively, at December 31, 1992. Of the total Flight Systems business
backlog at December 31, 1993, approximately $2,897 million is expected to be
realized as sales in 1994.
Carrier
Carrier is the world's largest manufacturer of heating, ventilating and air
conditioning (HVAC) systems and equipment. Carrier also participates in the
commercial, industrial and transport refrigeration businesses. During the years
1991 through 1993, the Corporation's total revenues from these businesses were:
Total Revenues--HVAC and Refrigeration
Year Systems, Equipment and Service
1991 $3,843 million
1992 $4,328 million
1993 $4,480 million
Carrier manufactures and sells 15 major global product lines, with over
10,000 different products manufactured. The products manufactured 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.
Other Carrier Segment Information
Carrier's business is subject to changes in economic, industrial and
international conditions, including possible increases in interest rates, which
could reduce the demand for HVAC systems and equipment; changes in legislation
and in government regulations; changes in technology; decreases in construction
starts; and competition from a large number of companies, including other major
domestic and foreign manufacturers. The principal methods of competition are
delivery schedule, product performance, price, service and other terms and
conditions of sale.
Carrier's products and services are sold principally to builders and
building contractors and owners. Sales are made both directly to the customer
and by or through manufacturers' representatives, distributors, dealers,
individual wholesalers and retail outlets.
In 1992 and 1993, Carrier's revenues associated with operations outside of
the U.S. amounted to $2,335 million, or approximately 54 percent, and $2,284
million, or approximately 51 percent, respectively, of total Carrier Segment
revenues. International operations are subject to local government regulations
(including regulations relating to capital contributions, currency conversion
PAGE
10
and repatriation of earnings), as well as to varying political and economic
risks.
At December 31, 1993, the Carrier business backlog amounted to $780 million,
as compared to $685 million at December 31, 1992. Substantially all of the
total business backlog at December 31, 1993 is expected to be realized as sales
in 1994.
Otis
Otis is the world's leader in the production, installation and service of
elevators and escalators. During the years 1991 through 1993, the Corporation's
total revenues from elevators, escalators and services were as follows:
Total Revenues--
Elevators,
Year Escalators & Services
1991 $4,304 million
1992 $4,512 million
1993 $4,418 million
Included in the above amounts are service revenues of $2,379 million, $2,666
million, and $2,636 million, in 1991, 1992 and 1993, respectively.
Otis manufactures a wide range of passenger and freight elevators, including
geared and hydraulic elevators for medium and low speed passenger and freight
applications and gearless elevators for high-speed passenger operations in high
rise buildings, and modernizes older elevators and escalators. Otis also
produces a broad line of escalators, moving sidewalks, and shuttle systems for
horizontal transportation.
Otis services a substantial portion of the elevators and escalators which it
has sold in the past and also services elevators and escalators of other
manufacturers. At December 31, 1993, Otis serviced more than 750,000 elevators
and escalators worldwide, the majority of which are under regular service
contracts.
Otis conducts its business principally through various affiliated companies
worldwide. In some cases, consolidated affiliates have significant minority
interests.
In addition, Otis continues to invest in emerging markets in Central and
Eastern Europe and Asia (e.g., Russia, Ukraine, and the People's Republic of
China) through the establishment of affiliated companies, with varying amounts
of equity participation. Management cannot predict how these markets will
progress, but does not believe that any adverse developments in these markets
will have a material effect on the Corporation.
Other Otis Segment Information
Otis' business is subject to changes in economic, industrial and
international conditions, including possible increases in interest rates, which
could reduce the demand for elevators, escalators and services; changes in
legislation and in government regulations; changes in technology; decreases in
construction starts; and substantial competition from a large number of
companies including other major domestic and foreign manufacturers. The
principal methods of competition are price, delivery schedule, product
performance, service and other terms and conditions of sale. Otis' products and
services are sold principally to builders and building contractors and owners.
In 1992 and 1993, revenues associated with operations outside of the U.S.
amounted to $3,754 million, or approximately 83 percent, and $3,723 million, or
approximately 84 percent, respectively, of total Otis Segment revenues.
International operations are subject to local government regulations (including
regulations relating to capital contributions, currency conversion and
repatriation of earnings), as well as to varying political and economic risks.
At December 31, 1993, the Otis business backlog amounted to $2,812 million
as compared to $2,868 million at December 31, 1992. Of the total business
backlog at December 31, 1993, approximately $2,442 million is expected to be
realized as sales in 1994.
PAGE
11
Automotive
The Corporation's Automotive business is conducted through the Automotive
Group. The Automotive Group is a major domestic supplier of wire harness
systems, switches, terminals and connectors, steering wheels, instrument panels,
consoles, fractional horsepower motors and other automotive components. The
Automotive Group also supplies wire harness systems, fractional horsepower
motors, steering wheels and other automotive components to customers in Europe
and Asia.
During 1990, the Corporation sold its interests in (1) the Sealing Systems
Division of Sheller-Globe Corporation, a supplier of rubber molded products
principally used as weather stripping for automotive windows, with domestic
operations in Iowa, Indiana and California and international operations in
France and Spain; (2) Diavia S.p.A. and Aura S.r.L., two Italian automotive
aftermarket air conditioning system suppliers; (3) Sheller-Ryobi Corporation, an
Indiana aluminum die casting manufacturer; and (4) Sheller-Globe Engineered
Polymers Corporation, a Minnesota non-automotive plastic components producer.
During 1992, the Corporation sold its interest in the Hose, Fittings and
Industrial Products Division of United Technologies Automotive, Inc., a supplier
of coupled hose assemblies and fittings products and extruded plastic and
plastic sheet products, hydraulic valves and machined products to the automotive
and commercial marketplace, which had domestic operations in Georgia, Illinois,
Indiana, Michigan, North Carolina and Ohio and an international operation in the
United Kingdom.
On January 19, 1994, the Corporation announced that it was planning to sell
40% of the economic interest of its Automotive segment to the public through an
initial public offering of the Class A Common Stock of UT Automotive, Inc.
("UTA"). UTA filed a registration statement on Form S-1 under the Securities
Act of 1933 relating to the offering (the "Registration Statement"). The
Registration Statement has not yet been declared effective and is subject to
amendment. The Corporation currently plans to retain 60% of the economic
interest in UTA and will have the ability to elect at least 80% of the board of
directors of UTA.
Sales to the Automotive Industry
Sales to the major domestic automotive manufacturers are made against
periodic short-term releases issued by the automotive manufacturers under annual
orders for a percentage of the respective manufacturer's requirements for the
products ordered. In 1991, sales to the major domestic automotive manufacturers
were $1,302 million, or approximately 62 percent, of total Automotive revenues.
In 1992, sales to the major domestic automotive manufacturers were $1,554
million, or approximately 65 percent, of total Automotive revenues. In 1993,
sales to the major domestic automotive manufacturers were $1,602 million, or
approximately 67 percent, of total Automotive revenues.
In 1991, sales to Ford Motor Company were $851 million, or approximately 65
percent, of sales to the major domestic automotive manufacturers and
approximately 41 percent of total Automotive revenues. In 1992, sales to Ford
Motor Company were $991 million, or approximately 64 percent, of sales to the
major domestic automotive manufacturers and approximately 42 percent of total
Automotive revenues. In 1993, sales to Ford Motor Company were $965 million, or
approximately 60 percent, of sales to the major domestic automotive
manufacturers and approximately 41 percent of total Automotive revenues.
Other Automotive Segment Products
The Automotive Group also produces headliners, door trim panels, sun visors,
armrests, package trays and other interior trim, acoustical padding, foam
products, mirrors, sun visors, thermal and acoustic barriers, horn pads, airbag
covers, steering wheels, electronic controls and modules, vehicle entry systems,
relays, interior lighting systems, switches and controls for turn signals,
headlights, windshield wipers and ignition systems, power window motors, power
door lock activators, anti-lock brake system pump motors, vehicle emission air
blower motors, and windshield wiper motors and systems. United Technologies
Industrial Lasers Division designs, builds and sells worldwide, high-power,
continuous-wave CO2 industrial lasers.
PAGE
12
Other Automotive Segment Information
The Automotive segment's business is subject to changes in economic,
industrial and international conditions; increases in interest rates and
decreases in the level of automotive production which could reduce the demand
for many of the industrial products of the Corporation; changes in the prices of
essential raw materials and petroleum-based materials; changes in legislation
and in government regulations; changes in technology; and substantial
competition from a large number of companies including other major domestic and
foreign manufacturers. The principal methods of competition are price, delivery
schedule and product performance.
Automotive segment sales are made principally to automotive original
equipment manufacturers and systems suppliers. Sales are made both directly to
the customer and by or through manufacturers' representatives.
Original equipment manufacturers throughout the world are outsourcing an
increasing share of the design and manufacture of their automotive systems and
subsystems. This trend benefits a select group of large, first-tier suppliers
that can provide sophisticated design and engineering services, low-cost
manufacturing, high product quality, and total systems capabilities on a global
basis. To remain competitive in this environment, the ability to consistently
deliver, on time, products of ever-increasing quality has become a critical
requirement.
In 1991, 1992 and 1993, revenues associated with operations outside of the
U.S. amounted to $831 million, or approximately 40 percent, $1,062 million, or
approximately 45 percent, and $743 million, or approximately 31 percent,
respectively, of total Automotive segment revenues. International operations
are subject to local government regulations (including regulations relating to
currency conversion and repatriation of earnings), as well as to varying
political and economic risks.
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, net of
reimbursements from participating suppliers to the Corporation's advanced
commercial aircraft engine programs which are charged against income as incurred
and relate principally to the Pratt & Whitney business, were $1,137 million or 5
percent of total revenues in 1993, as compared with $1,221 million or 6 percent
of total revenues in 1992 and $1,133 million or 5 percent of total revenues in
1991. The Corporation also performs research and development work under
contracts funded by the U.S. Government and some other customers. Such contract
research and development, which is performed principally in the Pratt & Whitney
business and to a lesser extent in the Flight Systems business, amounted to $918
million in 1993, as compared with $1,012 million in 1992 and $750 million in
1991.
Contracts, Environmental and Other Matters
Contracts with the U.S. Government are subject to termination for 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 six percent of the Corporation's total sales for 1993 were made under cost-
reimbursement type contracts. Development contracts awarded in 1991 for the
RAH-66 Comanche and the F119 Advanced Tactical Fighter engine are on a cost-
reimbursement basis.
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 or results of operations.
PAGE
13
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 at page 14 of this report for
further discussion.
Recent peace initiatives and related changes in Eastern Europe have served
to reduce both U.S. and foreign defense spending as a whole. Management does
not currently believe that Defense Department budget cutbacks will have a
material adverse effect on the profitability of the Corporation, however, due in
part to the Corporation's efforts to reduce its reliance on defense contracts.
The Corporation purchases substantial quantities of materials, components
and supplies from a large number of sources. Like other users in the U.S., the
Corporation is largely dependent on foreign sources located in Africa for its
requirements of cobalt, and on sources located in Africa, Eastern and Central
Europe and the countries of the former U.S.S.R. for its requirements of
chromium. The Corporation does not foresee any unavailability of materials or
components which will have any material adverse effect on its overall business,
or on any of its business segments, in the near term. To alleviate possible
longer term effects, the Corporation has a number of ongoing programs which
include the expansion of its internal production capacity for precision parts;
the development of new vendor sources; the increased use of more readily
available materials through material substitutions and the development of new
alloys; and conservation of materials through scrap reclamation and new
manufacturing processes such as net shape forging.
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 business segments.
The Corporation does not anticipate that compliance with federal, state and
local provisions relating to the protection of the environment will have a
material adverse effect upon its capital expenditures, competitive position,
financial position or results of operations. (Environmental matters are the
subject of certain of the Legal Proceedings described in Item 3 beginning at
page 14 of this Report, and are further addressed in "Management's Discussion
and Analysis of Results of Operations and Financial Position" at pages 34 and 35
and Note 13 of Notes to Financial Statements at page 50 of the Corporation's
1993 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. Any listed facility cannot be used
in performing any U.S. Government contract awarded to the Corporation during any
period of listing by the EPA.
In March 1990, it was announced that the Corporation and MTU, a subsidiary
of Daimler-Benz AG (Daimler) had signed a memorandum of understanding concerning
future business collaboration between the two companies. In March 1991, a
formal agreement was executed providing for expanded cooperation between the
parties with respect to commercial and general aviation engine research and
development, manufacturing and marketing. See page 3 of this report for further
description of this matter.
Employees
At December 31, 1993, the Corporation's total employment was approximately
168,600, a reduction of approximately 9,400 over the prior year.
Item 2. Properties
The Corporation's fixed assets 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 modern automatic control features and special
adaptations. The Corporation's plants, warehouses, machinery and equipment are
in good operating condition, are well maintained, and substantially all of its
PAGE
14
facilities are in regular use. The Corporation considers the present level of
fixed assets capitalized as of December 31, 1993, suitable and adequate for the
respective industry segment's operations in the current business environment.
For a further discussion of management's effort to restructure the Corporation,
see "Management's Discussion and Analysis of Results of Operations and Financial
Position" appearing in the Corporation's 1993 Annual Report to Shareowners,
especially the information contained under the heading "Restructuring and Other
Actions". The square footage numbers set forth in the succeeding paragraphs of
this Item 2 are approximations.
At December 31, 1993, the Corporation operated (a) plants in the U.S. which
had 35.7 million square feet, of which 5.7 million square feet were leased; (b)
plants outside the U.S. which had 17.9 million square feet, of which 2.4 million
square feet were leased; (c) warehouses in the U.S. which had 6.4 million square
feet, of which 4.8 million square feet were leased; and (d) warehouses outside
the U.S. which had 5.8 million square feet, of which 4.1 million square feet
were leased.
Pratt & Whitney segment plants are located in six states, Canada,
Singapore, the Netherlands and other areas. At December 31, 1993, the U.S.
plants operated by the Pratt & Whitney segment had aggregate floor areas of 14.2
million square feet, of which 0.7 million square feet were leased and the plants
outside the U.S. had aggregate floor areas of 3.0 million square feet, of which
0.2 million square feet were leased. In the Pratt & Whitney segment, outdoor
testing of engines is conducted on 7,100 acres in Palm Beach County, Florida.
In addition, the Corporation currently owns and operates airports in East
Hartford, Connecticut and Palm Beach County, Florida. Plans have been announced
to move the Corporation's East Hartford airport operations to Bradley
International Airport in Windsor Locks, Connecticut.
Flight Systems plants are located in ten states, Italy and the Federal
Republic of Germany. At December 31, 1993, the U.S. plants operated by the
Flight Systems segment had aggregate floor areas of 8.8 million square feet, of
which 1.9 million square feet were leased, and the plants outside the U.S. had
aggregate floor areas of 0.7 million square feet, of which 0.1 million square
feet were leased. Flight Systems also operates company-owned helicopter air
fields in Bridgeport and Stratford, Connecticut, a company-owned rotary-wing
aircraft completion, training and test center in Palm Beach County, Florida and
a 5,100 acre outdoor rocket engine test center in Coyote, California.
Carrier plants are located in seven states, Europe, Asia, Latin America,
Australia and Canada. At December 31, 1993, the U.S. plants had an aggregate
floor area of 5.7 million square feet, of which 1.9 million square feet were
leased, and the plants outside the U.S. had an aggregate floor area of 4.4
million square feet, of which 0.6 million square feet were leased.
Otis plants are located in one state, Europe, Asia and Latin America. At
December 31, 1993, the U.S. plants had an aggregate floor area of 0.8 million
square feet, of which none was leased, and the plants outside the U.S. had an
aggregate floor area of 5.9 million square feet, of which 0.6 million square
feet were leased.
Automotive segment plants are located in fourteen states, Canada, Mexico,
Europe and Asia. At December 31, 1993, the U.S. plants had an aggregate floor
area of 5.7 million square feet, of which 1.1 million square feet were leased;
and the plants outside the U.S. had an aggregate floor area of 4.0 million
square feet, of which 1.0 million square feet were leased.
Management believes that the facilities for the production of its products
are suitable and adequate for the business conducted therein, are being
appropriately utilized in line 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. Legal Proceedings
In June 1989, Sikorsky Aircraft submitted a voluntary disclosure report to
the Department of Defense describing the conditions that gave rise to a $75
million downward adjustment of progress payments in April 1988 and related
matters. On May 18, 1989, an employee filed under seal a "qui tam" action under
PAGE
15
the Civil False Claims Act in the United States District court for the District
of Connecticut (Civil Action No. H-89-323-AHM) based on information that he
learned while working on the Corporation's investigation of the matter. The
Corporation and the Department of Justice have entered into a settlement
agreement whereby the Corporation will pay the Government $150 million for any
damage it has suffered. The amount of the settlement has been previously
accrued.
On June 29, 1992, the Department of Justice filed a Civil False Claims Act
complaint in the United States District Court for the District of Connecticut,
No. 592CV375, against Sikorsky Aircraft alleging that the government was
overcharged by nearly $4 million in connection with the pricing of parts
supplied for the reconditioning of the Navy's Sea King helicopter. The
Complaint seeks treble damages plus a $10,000 penalty for each false claim
submitted. Management believes that resolution of this matter will not have a
material adverse effect upon its capital expenditures, competitive position,
financial position or results of operations.
In November 1991, the Corporation was served with a Department of Defense
Inspector General subpoena for records relating to Pratt & Whitney's government
contracts accounting practices for aircraft engine parts produced by foreign
companies under certain commercial engine collaboration programs. Pratt &
Whitney made a voluntary payment of $13,932,000 to the U.S. Government on
December 23, 1992. A federal grand jury in the District of Connecticut is
investigating this matter. Management believes that resolution of this matter
will not have a material adverse effect upon its capital expenditures,
competitive position, financial position or results of operations.
In March 1992, the Corporation received a subpoena from the Department of
Defense Inspector General requesting documents in connection with Pratt &
Whitney's sales of goods and services to the Israeli Government. The
investigation relates to the activities of former Israeli General Rami Dotan who
pleaded guilty in Israel to engaging in corrupt practices in connection with
Israeli Air Force procurements involving another engine manufacturer. A federal
grand jury in the Southern District of Florida and the Civil Division of the
Department of Justice are investigating this matter.
A federal grand jury continues to investigate alleged violations of law in
connection with marketing helicopters to the Government of the Kingdom of
Saudi Arabia. The Corporation has responded to a grand jury subpoena
requesting documents in connection with this matter and several current
and former employees have been interviewed. A related civil suit filed by a
former employee has been settled. Management believes that resolution of this
matter will not have a material adverse effect upon its capital expenditures,
competitive position, financial position or results of operations.
The Corporation believes that, in light of the current government
contracting environment, it will be the subject of one or more government
investigations in the foreseeable future. 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.
In 1991, two complaints, each purporting to commence derivative and class
actions by shareholders of the Corporation, were filed in the United States
District Court for the District of Connecticut. The suits sought unspecified
treble damages as well as other relief. On June 26, 1992, the District Court
dismissed these two complaints in their entirety. Plaintiffs filed a
consolidated amended complaint on September 23, 1992. The amended complaint,
like the original complaints, named nine of the Corporation's directors as
defendants and related to the Corporation's conduct of its defense business.
Defendants moved to dismiss the complaint, and on February 4, 1994, the District
Court dismissed the amended consolidated complaint in its entirety.
Various state and federal government authorities have designated the
Corporation as a potentially responsible party for liabilities under the
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)
and similar state statutes. Said authorities seek expenditures and damages for
contamination due to the release of pollutants into the environment. The
PAGE
16
Corporation believes that any payments it may be required to make as a result of
these claims will not be material to the business or financial condition of the
Corporation. The Corporation has had liability and property insurance in force
over its history with a number of insurance companies, and the Corporation has
commenced litigation seeking indemnity and defense under these insurance
policies. No prediction can be made at this time as to the eventual outcome of
this litigation. (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 at pages 34 and 35 of the
Corporation's 1993 Annual Report to Shareowners.)
In January 1994, UT Automotive (UTA) received a letter from the Michigan
Department of Natural Resources (MDNR) alleging violations of certain provisions
of an air permit for its Niles, Michigan facility. MDNR also asserted that
these were violations of a Consent Judgment between the MDNR and UTA (Consent
Judgment No. 92-1811-CET, Berrien County Circuit Court). It alleged that the
VOC emission rates established by the permit were exceeded. UTA is discussing
the allegations with MDNR. Management believes that the resolution of this
matter, including payments of any fines or penalties, will not have a material
adverse effect upon its capital expenditures, competitive position, financial
position or results of operations.
In July 1992, the Maine Department of Environmental Conservation (MDEC)
filed a Consent Agreement and Enforcement Order against the Corporation related
to a Pratt & Whitney facility in North Berwick, Maine. On October 27, 1993, the
Corporation and MDEC entered into a settlement agreement, under which the
Corporation agreed to pay a penalty of $134,200, to improve its hazardous waste
management procedures and submit certain reports and studies regarding hazardous
waste management to the MDEC. The matter is now concluded.
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, 1993.
- ----- Executive Officers of the Registrant
The executive officers of United Technologies Corporation, together with the
offices in United Technologies Corporation presently held by them, their
business experience since January 1, 1989, and their ages, are as follows:
PAGE
17
Other Business Age
Name Title Experience 2/1/94
Since 1/1/89
Norman R. President, UT President, Electrical 51
Bodine Automotive (since Systems & Components;
1992) President, Automotive
Products Division, UT
Automotive
Eugene Buckley President, Sikorsky ------- 63
Aircraft (since
1987)
William L. Senior Vice Vice President, Human 51
Bucknall, Jr. President, Human Resources &
Resources & Organization, United
Organization (since Technologies; Vice
1992) President, Human
Resources, Carrier;
Corporate Director,
Compensation and
Benefits; Corporate
Director, Salaried
Employee Relations
Franklyn A. Senior Vice Senior Vice President, 43
Caine President, Planning Controller; Senior Vice
and Corporate President, Human
Development (since Resources &
1993) Organization; Vice
President, Treasurer
Mark S. Coran Executive Vice Vice President, 50
President, Controller, United
Operations, Pratt & Technologies; Vice
Whitney (since 1991) President, Group
Finance, Pratt & Whitney
Robert F. Chairman (since President and Chief 60
Daniell 1987), Chief Operating Officer (1984-
Executive Officer 1992)
(since 1986)
George David President and Chief Executive Vice President 51
Operating Officer and President,
(since 1992) Commercial/Industrial;
Senior Vice President,
United Technologies;
President and Chief
Executive Officer, Otis
Elevator
Thomas J. Fay Senior Vice Senior Vice President, 60
President, Corporate Affairs, Aetna
Communications Life & Casualty
(since 1990)
Frederick C. Vice President, Director, Financial 43
Flynn, Jr. Treasurer (since Programs; Director,
1989) Business Development
William S. President, Carrier President, Carrier North 51
Frago Corporation (since American Operations;
1992) Vice President,
Worldwide Marketing &
Product Management,
General Electric
Lighting
Bruno Grob President, European Executive Vice 44
& Transcontinental President, European &
Operations, Otis Transcontinental
Elevator (since Operations; President,
1992) Director General, Otis
France; Vice President &
Regional Manager, North
American Operations,
Otis Elevator
PAGE
18
Other Business Age
Name Title Experience 2/1/94
Since 1/1/89
Robert J. Senior Vice Vice President, Science 60
Hermann President Science & & Technology
Technology (since
1992)
James T. Executive Vice Vice President and 51
Johnson President, General Manager-Everett
Pratt & Whitney and Division, Boeing
President-Large Commercial Airplane
Commercial Engines Group
(since 1993)
Karl J. Krapek President, Pratt & Chairman, President and 45
Whitney Chief Executive Officer,
(since 1992) Carrier Corporation;
President and Chief
Operating Officer;
President, North
American Operations,
Otis Elevator
Frank W. Senior Vice Vice President, Business 63
McAbee, Jr. President, Practices; Vice
Environmental and President, Government
Business Practices Contracts and Compliance
(since 1990)
George E. Vice President - Partner - Price 44
Minnich Controller Waterhouse
(since 1993)
Stephen F. Page Executive Vice Executive Vice President 54
President and Chief
and Chief Financial Financial Officer; Vice
Officer (since 1993) President Finance &
Treasurer, Black &
Decker Corporation
William F. Paul Senior Vice Senior Vice President, 57
President, Washington Office;
Government Affairs Senior Vice President &
(since 1991) Executive Vice
President,
Aerospace/Defense;
Senior Vice President,
Defense & Space Systems
Karl M. Thomas Executive Vice Group Vice President, 57
President, Operations; President,
Technical, Pratt & Manufacturing, Pratt &
Whitney (since 1991) Whitney
William H. Vice President, Vice President and 50
Trachsel Secretary and Deputy Deputy General Counsel
General Counsel
(since 1993)
Jean-Pierre van President, Otis Executive Vice President 59
Rooy Elevator (since and Chief Operating
1991) Officer; President,
North American
Operations; Senior Vice
President, European &
Transcontinental
Operations, Otis
Elevator
Irving B. Executive Vice Senior Vice President 48
Yoskowitz President and and General Counsel
General Counsel
(since 1990)
All of the officers serve at the pleasure of the Board of Directors of United
Technologies Corporation or the subsidiary designated.
PAGE
19
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
See "Comparative Stock Data" appearing on page 35 of the Corporation's 1993
Annual Report to its 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 Report.
Item 6. Selected Financial Data
See the Five-Year Summary appearing on page 27 of the Corporation's 1993
Annual Report to its Shareowners containing the following data: sales, net
income, primary and fully diluted earnings per share, cash dividends on Common
Stock, total assets and long-term debt. All such data are incorporated by
reference in this Report.
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 28 through 35 of the Corporation's 1993
Annual Report to its Shareowners; such discussion and analysis is incorporated
by reference in this Report.
Item 8. Financial Statements and Supplementary Data
The 1993 and 1992 Balance Sheets, and other financial statements for the
years 1993, 1992 and 1991, together with the report thereon of Price Waterhouse
dated January 26, 1994, appearing on pages 36 through 54 in the Corporation's
1993 Annual Report to its Shareowners are incorporated by reference in this
Report.
The 1993 and 1992 Selected Quarterly Financial Data appearing on page 55 in
the Corporation's 1993 Annual Report to its Shareowners are incorporated by
reference in this Report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
Item 10. Directors and Executive Officers of the Registrant
The information required by Item 10 with respect to directors is
incorporated herein by reference from pages 4 through 6 of the Corporation's
Proxy Statement for the 1994 Annual Meeting of Shareowners. Information
regarding executive officers is contained in Part I of this Report (pages 16
through 18).
Item 11. Executive Compensation
The information required by Item 11 is incorporated herein by reference from
pages 8 through 13, and pages 18 through 19 of the Corporation's Proxy Statement
for the 1994 Annual Meeting of Shareowners. 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.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by Item 12 is incorporated herein by reference from
pages 7 through 8 of the Corporation's Proxy Statement for the 1994 Annual
Meeting of Shareowners.
Item 13. Certain Relationships and Related Transactions
The information required by Item 13 is incorporated herein by reference from
page 8 of the Corporation's Proxy Statement for the 1994 Annual Meeting of
Shareowners.
PAGE
20
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Page No. in
Annual
Report
(a) (1) Financial Statements (incorporated by
reference from the 1993 Annual
Report to Shareowners):
Report of Independent Accountants 36
Consolidated Statement of Operations
for the Three Years ended December 37
31, 1993
Consolidated Balance Sheet--December
31, 1993 and 1992 38
Consolidated Statement of Cash Flows
for the Three Years ended December 39
31, 1993
Consolidated Statement of Changes in
Shareowners' Equity for the Three 40
Years ended December 31, 1993
Notes to Financial Statements 41
Consolidated Summary of Business
Segment Financial Data 51
Selected Quarterly Financial Data 55
(Unaudited)
Page No. in
Form 10-K
(2) Financial Statement Schedules:
For the three years ended December
31, 1993:
Report of Independent Accountants on
Financial Statement Schedules S-1
V-- Property, Plant and Equipment S-2
VI-- Accumulated Depreciation and
Amortization of Property, Plant and S-3
Equipment
VIII-- Valuation and Qualifying Accounts S-4
IX-- Short-Term Borrowings S-5
X-- Supplementary Income Statement S-6
Information
Consent of Independent Accountants F-1
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:
(3) (i) Restated Certificate of Incorporation
[incorporated by reference to Exhibit (3)(i)
to Form 10K for the year ended December 31,
1992]
(ii) Bylaws
(4) (i) In accordance with Item 601 of Regulation S-K
of the Securities and Exchange Commission, the
Corporation hereby agrees to furnish upon
request to the Commission a copy of each
instrument defining the rights of holders of
long-term debt of the Corporation and its
consolidated subsidiaries and any
unconsolidated subsidiaries for which
financial statements otherwise would be
required to be filed with this annual report
on Form 10-K for the year ended December 31,
1993
PAGE
21
(10) (i) United Technologies Corporation 1979 Long Term
Incentive Plan [incorporated by reference to
Exhibit (10)(i) to Form 10K for the year ended
December 31, 1992]
(ii) United Technologies Corporation Annual
Executive Incentive Compensation Plan
[incorporated by reference to Exhibit (10)(ii)
to Form 10K for the year ended December 31,
1992]
(iii) United Technologies Corporation Disability
Insurance Benefits for Executive Control Group
[incorporated by reference to Exhibit
(10)(iii) to Form 10K for the year ended
December 31, 1992]
(iv) United Technologies Corporation Executive
Estate Preservation Program [incorporated by
reference to Exhibit (10)(iv) to Form 10K for
the year ended December 31, 1992]
(v) Pension Preservation Plan [incorporated by
reference to Exhibit (10)(v) to Form 10K for
the year ended December 31, 1992]
(vi) Senior Executive Severance Plan [incorporated
by reference to Exhibit (10)(vi) to Form 10K
for the year ended December 31, 1992]
(vii) United Technologies Corporation Deferred
Compensation Plan [incorporated by reference
to Exhibit (10)(vii) to Form 10K for the year
ended December 31, 1992]
(viii) Otis Elevator Company Incentive Compensation
Plan [incorporated by reference to Exhibit
(10)(viii) to Form 10K for the year ended
December 31, 1992]
(ix) Directors Retirement Plan [incorporated by
reference to Exhibit (10)(ix) to Form 10K for
the year ended December 31, 1992]
(x) United Technologies Corporation Deferred
Compensation Plan for Non-Employee Directors
[incorporated by reference to Exhibit (10)(x)
to Form 10K for the year ended December 31,
1992]
(xi) United Technologies Corporation Long Term
Incentive Plan [ incorporated by reference to
Exhibit (10)(xi) to Form 10K for the year
ended December 31, 1992]
(xii) United Technologies Corporation Executive
Disability, Income Protection and Standard
Separation Agreement Plan [incorporated by
reference to Exhibit (10)(xii) to Form 10K for
the year ended December 31, 1992]
(xiii) United Technologies Corporation Directors'
Restricted Stock/Unit Program [incorporated by
reference to Exhibit (10)(xiii) to Form 10K
for the year ended December 31, 1992]
(xiv) United Technologies Corporation Directors'
Stock and Deferred Stock Unit Retainer Program
(xv) United Technologies Corporation Pension
Replacement Plan
(11) Statement re Computation of Per Share Earnings
(12) Computation of Ratio of Earnings to Fixed Charges
(13) Annual Report to Shareowners for year ended December 31,
1993 (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)
(22) Subsidiaries of the Registrant
(25) Powers of Attorney of Howard H. Baker, Jr., Antonia
Handler Chayes, Robert F. Daniell, Robert F. Dee,
Charles W. Duncan, Jr., Pehr G. Gyllenhammar,
Gerald D. Hines, Charles R. Lee,
Robert H. Malott, and Jacqueline G. Wexler
(b) A report on Form 8-K was filed by the Registrant on January 19, 1994, in
response to both Item 5 and Item 7.
PAGE
22
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
By /s/ Stephen F. Page Date: March 31, 1994
Stephen F. Page, Executive Vice
President and Chief Financial
Officer
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 above.
Signature Title
ROBERT F. DANIELL* Chairman and Chief Executive
(Robert F. Daniell) Officer; Director
/s/ GEORGE DAVID President and Chief Operating
(George David) Officer; Director
/s/ GEORGE E. MINNICH Vice President Controller;
(George E. Minnich) Principal
Accounting Officer
/s/ STEPHEN F. PAGE Executive Vice President and
(Stephen F. Page) Chief
Financial Officer
HOWARD H. BAKER, JR.* Director
(Howard H. Baker, Jr.)
ANTONIA HANDLER CHAYES* Director
(Antonia Handler Chayes)
ROBERT F. DEE* Director
(Robert F. Dee)
CHARLES W. DUNCAN, JR.* Director
(Charles W. Duncan, Jr.)
PEHR G. GYLLENHAMMAR* Director
(Pehr G. Gyllenhammar)
GERALD D. HINES* Director
(Gerald D. Hines)
CHARLES R. LEE* Director
(Charles R. Lee)
ROBERT H. MALOTT* Director
(Robert H. Malott)
JACQUELINE G. WEXLER* Director
(Jacqueline G. Wexler)
* By William H. Trachsel
(WILLIAM H. TRACHSEL, AS ATTORNEY-IN-FACT)
PAGE
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors
of United Technologies Corporation
Our audits of the consolidated financial statements referred to in our report
dated January 26, 1994 appearing on page 36 of the 1993 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 Schedules listed in Item
14(a)(2) of this Form 10-K. In our opinion, these Financial Statement Schedules
present fairly, in all material respects, the information set forth therein when
read in conjunction with the related consolidated financial statements.
Price Waterhouse
Hartford, Connecticut
January 26, 1994
S-1
PAGE
SCHEDULE V
UNITED TECHNOLOGIES CORPORATION AND SUBSIDIARIES
Schedule V - Property, Plant and Equipment
Three Years Ended December 31, 1993
(Millions of Dollars)
Balance at Other Changes - Foreign Balance at
Beginning of Additions Retirements Debit or Currency Close of
Year at Cost or Sales (Credit) Translation Year
1993:
Land $ 161 $ 1 $ 2 $ 1 (A) $ (2) $ 158
(1) (B)
Buildings and improvements 2,620 162 29 16 (A) (29) 2,754
14 (B)
Machinery, tools and equipment 6,206 761 228 21 (A) (109) 6,427
(224) (B)
Under construction 543 (78) 6 4 (A) (4) 457
(2) (B)
$ 9,530 $ 846 $ 265 $ (171) $ (144) $ 9,796
1992:
Land $ 164 $ 5 $ 13 $ 1 (A) $ - $ 161
4 (B)
Buildings and improvements 2,456 240 58 5 (A) (28) 2,620
5 (B)
Machinery, tools and equipment 6,005 736 269 7 (A) (106) 6,206
(167) (B)
Under construction 608 (61) 5 - (A) (2) 543
3 (B)
$ 9,233 $ 920 $ 345 $ (142) $ (136) $ 9,530
1991:
Land $ 149 $ 5 $ 3 $ 15 (A) $ (3) $ 164
1 (B)
Buildings and improvements 2,292 195 21 39 (A) (20) 2,456
(29) (B)
Machinery, tools and equipment 5,497 860 220 91 (A) (59) 6,005
(164) (B)
Under construction 651 (12) 6 - (A) (3) 608
(22) (B)
$ 8,589 $ 1,048 $ 250 $ (69) $ (85) $ 9,233
(A)Acquired companies.
(B)Other, including transfers from under construction, certain fully
depreciated or fully amortized assets eliminated and disposition of
business units. Reference is made to the following Notes to Financial
Statements: Note 1 - Summary of Accounting Principles with respect to
depreciation methods and rates, Note 3 - Restructuring and Employee
Severance Plans, and Note 4 - International Operations with respect to
foreign currency translation.
S-2PAGE
SCHEDULE VI
UNITED TECHNOLOGIES CORPORATION AND SUBSIDIARIES
Schedule VI - Accumulated Depreciation and Amortization
of Property, Plant and Equipment
Three Years Ended December 31, 1993
(Millions of Dollars)
Balance at Additions Other Changes - Foreign Balance at
Beginning of Charged Retirements (Debit) or Currency Close of
Year to Income or Sales Credit Translation Year
1993:
Buildings and improvements $ 1,212 $ 101 $ 19 $ 3 (A) $ (10) $ 1,289
2 (B)
Machinery, tools and equipment 3,716 676 188 9 (A) (63) 3,942
(208) (B)
$ 4,928 $ 777 $ 207 $ (194) $ (73) $ 5,231
1992:
Buildings and improvements $ 1,141 $ 110 $ 30 $ - (A) $ (8) $ 1,212
(1) (B)
Machinery, tools and equipment 3,485 667 204 1 (A) (60) 3,716
(173) (B)
$ 4,626 $ 777 $ 234 $ (173) $ (68) $ 4,928
1991:
Buildings and improvements $ 1,058 $ 102 $ 12 $ 4 (A) $ (8) $ 1,141
(3) (B)
Machinery, tools and equipment 3,135 633 158 30 (A) (30) 3,485
(125) (B)
$ 4,193 $ 735 $ 170 $ (94) $ (38) $ 4,626
Notes:
(A)Acquired companies.
(B)Other, including reserves in respect of certain fully depreciated or
fully amortized assets eliminated and disposition of business units.
Reference is made to the following Notes to Financial Statements: Note
1 - Summary of Accounting Principles with respect to depreciation
methods and rates, Note 3 - Restructuring and Employee Severance Plans,
and Note 4 - International Operations with respect to foreign currency
translation.
S-3PAGE
SCHEDULE VIII
UNITED TECHNOLOGIES CORPORATION AND SUBSIDIARIES
Schedule VIII - Valuation and Qualifying Accounts and Reserves
Three Years Ended December 31, 1993
(Millions of Dollars)
Allowances for Doubtful Accounts and Other Customer Financing Activity:
Balance December 31, 1990 $ 119
Provision charged to income 45
Doubtful accounts written off (net) (27)
Other adjustments 4
Balance December 31, 1991 141
Provision charged to income 414
Doubtful accounts written off (net) (19)
Other adjustments (12)
Balance December 31, 1992 524
Provision charged to income 40
Doubtful accounts written off (net) (72)
Other adjustments (26)
Balance December 31, 1993 $ 466
Future Income Tax Benefits - Valuation
allowance:
Balance December 31, 1991 $ -
Additions due to adoption of FAS 109 149
Additions charged to income tax expense 68
Balance December 31, 1992 $ 217
Additions charged to income tax expense 130
Reductions credited to income tax expense (50)
Balance December 31, 1993 $ 297
Certain 1992 and 1991 amounts have been restated to conform with 1993
presentation.
S-4PAGE
SCHEDULE IX
UNITED TECHNOLOGIES CORPORATION AND SUBSIDIARIES
Schedule IX - Short-Term Borrowings
Three Years Ended December 31, 1993
(Millions of Dollars)
Maximum Average Weighted
Category of Weighted Amount Amount Average
Aggregate Balance Average Outstanding Outstanding Interest Rate
Short-Term at End Interest During the During the During the
Borrowings of Period Rate Period (A) Period (B) Period (C)
1993:
Bank borrowings $ 279 9.3% $ 415 $ 346 10.8%
Commercial paper 501 3.3 856 799 3.2
1992:
Bank borrowings $ 328 10.0% $ 404 $ 333 13.2%
Commercial paper 49 3.6 285 273 3.7
1991:
Bank borrowings $ 289 10.9% $ 289 $ 192 23.4%
Commercial paper 3 4.9 698 436 6.1
Notes:
(A)Maximum amount of combined short-term borrowings outstanding at any
month end during the period totaled $1,207 in 1993, $605 in 1992 and
$869 in 1991.
(B)Bank borrowings amounts are based upon a thirteen month-end average,
while commercial paper amounts are based upon a daily average.
(C)Interest expense for the period divided by the average amount
outstanding.
Reference is made to Note 9 - Borrowings and Lines of Credit of Notes to
Financial Statements with respect to the general terms of short-term
borrowings.
S-5PAGE
SCHEDULE X
UNITED TECHNOLOGIES CORPORATION AND SUBSIDIARIES
Schedule X - Supplementary Income Statement Information
Three Years Ended December 31, 1993
(Millions of Dollars)
Maintenance and Repairs:
1993 . . . . . . . . . . . . . . . . . . . . . . . $ 242
1992 . . . . . . . . . . . . . . . . . . . . . . . 291
1991 . . . . . . . . . . . . . . . . . . . . . . . 284
S-6PAGE
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-3 (Nos. 33-46916, 33-
40163, 33-34320, 33-31514, 33-29687 and 33-6452) and Form S-8 (Nos. 33-45440,
33-11255, 33-26580, 33-26627, 33-28974, 33-51385, and 2-87322) of United
Technologies Corporation of our report dated January 26, 1994 appearing on page
36 of the 1993 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 on the Financial Statement Schedules, which appears on
page S-1 of this Form 10-K.
Price Waterhouse
Hartford, Connecticut
March 29, 1994
F-1
PAGE
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
EXHIBITS FILED
with
FORM 10 - K ANNUAL REPORT
(Fiscal Year ended December 31, 1993)
Under
The Securities Exchange Act of 1934
________________
UNITED TECHNOLOGIES CORPORATION
PAGE
INDEX TO EXHIBITS
Exhibit (3)(i) -- Restated Certificate of Incorporation
*
Exhibit (3)(ii) -- Bylaws
Exhibit (10)(i) -- United Technologies Corporation *
1979 Long Term Incentive Plan
Exhibit (10)(ii) -- United Technologies Corporation *
Annual Executive Incentive
Compensation Plan
Exhibit (10)(iii) -- United Technologies Corporation
*
Disability Insurance Benefits for
Executive Control Group
Exhibit (10)(iv) -- United Technologies Corporation *
Executive Estate Preservation
Program
Exhibit (10)(v) -- Pension Preservation Plan *
Exhibit (10)(vi) -- Senior Executive Severance Plan *
Exhibit (10)(vii) -- United Technologies Corporation
*
Deferred Compensation Plan
Exhibit -- Otis Elevator Company Incentive
(10)(viii) *
Compensation Plan
Exhibit (10)(ix) -- Directors Retirement Plan *
Exhibit (10)(x) -- United Technologies Corporation *
Deferred Compensation Plan for
Non-Employee Directors
Exhibit (10)(xi) -- United Technologies Corporation *
Long Term Incentive Plan
Exhibit (10)(xii) -- United Technologies Corporation *
Executive Disability, Income
Protection Plan and Standard
Separation Agreement
Exhibit -- United Technologies Corporation *
(10)(xiii) Directors' Restricted Stock/Unit
Program
Exhibit (10)(xiv) -- United Technologies Corporation
Directors' Stock and Deferred Stock
Unit Retainer Program
_______________
* Incorporated by reference (see Item 14).
PAGE
Exhibit (10)(xv) -- United Technologies Corporation
Pension Replacement Plan
Exhibit (11) -- Statement re Computation of Per
Share Earnings
Exhibit (12) -- Computation of Ratio of Earnings to
Fixed Charges
Exhibit (13) -- Annual Report to Shareowners for
year ended December 31, 1993
Exhibit (22) -- Subsidiaries of the Registrant
Exhibit (25) -- Powers of Attorney of Howard H.
Baker, Jr., Antonia Handler Chayes,
Robert F. Daniell, Robert F. Dee,
Charles W. Duncan, Jr.,
Pehr G. Gyllenhammar, Gerald D. Hines,
Charles R. Lee, Robert H. Malott,
and Jacqueline G. Wexler
PAGE
PAGE