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<SEC-DOCUMENT>0000101829-02-000045.txt : 20020801
<SEC-HEADER>0000101829-02-000045.hdr.sgml : 20020801
<ACCEPTANCE-DATETIME>20020801092323
ACCESSION NUMBER:		0000101829-02-000045
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20020630
FILED AS OF DATE:		20020801

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			UNITED TECHNOLOGIES CORP /DE/
		CENTRAL INDEX KEY:			0000101829
		STANDARD INDUSTRIAL CLASSIFICATION:	AIRCRAFT ENGINES & ENGINE PARTS [3724]
		IRS NUMBER:				060570975
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-00812
		FILM NUMBER:		02716732

	BUSINESS ADDRESS:	
		STREET 1:		UNITED TECHNOLOGIES BLDG
		STREET 2:		ONE FINANCIAL PLZ
		CITY:			HARTFORD
		STATE:			CT
		ZIP:			06101
		BUSINESS PHONE:		2037287000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	UNITED TECHNOLOGIES CORP
		DATE OF NAME CHANGE:	19841205

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	UNITED TECHNOLOGIES MICROELECTRONICS CENTER
		DATE OF NAME CHANGE:	19850825
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>tenq22002.htm
<DESCRIPTION>10-Q Q2 2002
<TEXT>
<html>

<head>
<title>tenq202</title>
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</head>

<body>

<p><b><font FACE="Arial" SIZE="2"><img SRC="utcbluelogo.gif" width="452" height="77"></font></p>


<font
FACE="Arial" SIZE="5">


<p ALIGN="RIGHT"><font FACE="Arial" SIZE="3">&nbsp;</p>

<p align="center"></font>

</font>

</b>


<strong><font face="Arial" size="2">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES<br>
<br>
FORM 10-Q</font></strong></p>

<font
FACE="Arial" SIZE="5">

<p align="center"><strong><font FACE="Arial" SIZE="2">UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION</font></strong></p>

<p align="center"><strong><font FACE="Arial" SIZE="2">WASHINGTON D.C.</font></strong></p>

<p align="center"><strong><font FACE="Arial" SIZE="2">20549</font></strong></p>

<p align="center"><b><font FACE="Arial" SIZE="2">[X] QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF<br>
THE SECURITIES EXCHANGE ACT OF 1934</font></p>

</b>


</font>

<b>

<p align="center"><font
FACE="Arial" size="2">&nbsp;


</font>

</p>

<p align="center"><font FACE="Arial" size="2">For the quarterly period ended <u>June 30,
2002</u></font></p>

<p align="center"><font
FACE="Arial" size="2">&nbsp;


</font>

</p>

<p align="center"><font FACE="Arial" size="2">&nbsp;OR</font></p>

<p align="center"><font FACE="Arial" size="2">&nbsp;&nbsp;</font></p>

<p align="center"><font FACE="Arial" size="2">[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF<br>
THE SECURITIES EXCHANGE ACT OF 1934</font></p>

<p align="center"><font
FACE="Arial" size="2">&nbsp;


</font>

</p>

<font
FACE="Arial" SIZE="5">

<p align="center"><font FACE="Arial" SIZE="2">For the transition period
from____________________________to__________________________</font></p>

<p align="center">


</font>

<font face="Arial" size="2">&nbsp;</font></p>

<font
FACE="Arial" SIZE="5">

<p align="center"><font FACE="Arial" SIZE="2">Commission file number 1-812&nbsp;</font></p>

<p align="center"><font FACE="Arial" SIZE="2">&nbsp;<u>UNITED TECHNOLOGIES CORPORATION</u></font></p>


</font>

</b>

<p><font face="Arial" size="2">&nbsp;</font></p>
<font
FACE="Arial" SIZE="5">
<div align="center"><center>

<table border="0" width="75%">
  <tr>
    <td width="50%"><p align="center"><b><font FACE="Arial" SIZE="2">DELAWARE</font></b></td>
    <td width="50%"><p align="center"><b><font FACE="Arial" SIZE="2">06-0570975</font></b></td>
  </tr>
</table>
</center></div><b>

<p align="center"><font FACE="Arial" SIZE="2">One Financial Plaza, Hartford, Connecticut
06103</font></p>

<p align="center"><font FACE="Arial" SIZE="2">(860) 728-7000</font></b></p>

<p ALIGN="JUSTIFY"><font FACE="Arial" SIZE="2">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<u> X </u>. No<u>&nbsp;&nbsp;
</u>.</font></p>

<p ALIGN="JUSTIFY"><font face="Arial" size="2">At </font>


</font>

<font face="Arial" size="2">June 30,</font>
<font face="Arial" size="2">
<font
FACE="Arial" SIZE="2">
 2002
there were </font><font face="Arial">471,723,035 </font></font><font
FACE="Arial" SIZE="2"><font face="Arial" size="2">shares of Common Stock outstanding.</font></p>

<hr>
<b><font FACE="Arial" SIZE="3">

<p align="center"></font><font FACE="Arial" SIZE="2">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</font></b></p>
<b>

<p align="center"><font FACE="Arial" SIZE="2">CONTENTS OF QUARTERLY REPORT ON FORM 10-Q<br>
Quarter Ended </font>
</b>


</font>

<b>

<font face="Arial" size="2">June 30,</font>
<font
FACE="Arial" SIZE="5">
<font FACE="Arial" SIZE="2"> 2002</font>


</font>

</p>
<font
FACE="Arial" SIZE="5">

<div align="center">
  <center>

<table CELLSPACING="0" BORDER="0" cellpadding="0" style="font-family: Arial; font-size: 10pt" width="531" height="538">
  <tr>
    <td VALIGN="TOP" width="469" height="18"><font FACE="Arial" SIZE="2">&nbsp; </font></td>
    <td VALIGN="TOP" align="center" class="botbord" width="58" height="18" style="border-bottom-style: solid; border-bottom-width: thin"><font FACE="Arial" SIZE="2"><b>Page</b></font></td>
  </tr>
  <tr>
    <td width="469" height="16"><font face="Arial" size="1">&nbsp; </font></td>
    <td align="center" width="58" height="16"><font face="Arial" size="1">&nbsp; </font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="469" height="18"><font FACE="Arial" SIZE="2"><u>Part I - Financial Information</u></font></td>
    <td VALIGN="TOP" align="center" width="58" height="18"><font FACE="Arial" SIZE="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td width="469" height="16"><font FACE="Arial" size="1">&nbsp; </font></td>
    <td align="center" width="58" height="16"><font FACE="Arial" size="1">&nbsp; </font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="469" height="18"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; Item 1. Financial
    Statements:</font></td>
    <td VALIGN="TOP" align="center" width="58" height="18"><font FACE="Arial" SIZE="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td width="469" height="10"><font FACE="Arial" size="1">&nbsp; </font></td>
    <td align="center" width="58" height="10"><font FACE="Arial" size="1">&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="469" VALIGN="TOP" height="31"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Condensed Consolidated Statement of Operations for the quarter</font></font><font face="Arial" size="2">s
<font
FACE="Arial" SIZE="5">

    </font> ended<font
FACE="Arial" SIZE="5"><br>
    </font></font><font size="2"><font
FACE="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; June 30,</font>
<font FACE="Arial"> 2002 and 2001</font></font></td>
    <td WIDTH="58" VALIGN="TOP" align="right" height="31"><font face="Arial" size="2">1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
</b>

  <tr>
    <td WIDTH="469" VALIGN="TOP" height="34"><font face="Arial"><font SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Condensed Consolidated Statement of Operations for the six months<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ended June 30, </font>


<font FACE="Arial" SIZE="2"> 2002 and 2001</font></font></td>


    <td WIDTH="58" VALIGN="TOP" align="right" height="34">2

<b>

<font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>
</b>

    </td>
  </tr>

  <tr>
    <td WIDTH="469" VALIGN="TOP" height="34"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Condensed Consolidated Balance Sheet at June 30, </font>


<font FACE="Arial" SIZE="2"> 2002 and <br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; December 31, 2001</font></td>


    <td WIDTH="58" VALIGN="TOP" align="right" height="34"><font face="Arial" size="2">3</font>

<b>

<font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>
</b>

    </td>
  </tr>
  <tr>
    <td WIDTH="469" VALIGN="TOP" height="34"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Condensed Consolidated Statement of Cash Flows for the six months&nbsp;<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ended June 30,
      2002 and 2001 </font>


    </td>


    <td WIDTH="58" VALIGN="TOP" align="right" height="34"><font face="Arial" size="2">4</font>

<b>

<font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>
</b>

    </td>
  </tr>
  <tr>
    <td WIDTH="469" VALIGN="TOP" height="18"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Notes to Condensed Consolidated Financial Statements</font></td>


    <td WIDTH="58" VALIGN="TOP" align="right" height="18"><font face="Arial" size="2">5</font>

<b>

<font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>
</b>

    </td>
  </tr>
  <tr>
    <td WIDTH="469" VALIGN="TOP" height="18"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Report of Independent Auditors</font></td>
    <td WIDTH="58" VALIGN="TOP" align="right" height="18"><font FACE="Arial" SIZE="2">13 </font>

<b>

<font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>
</b>

    </td>
  </tr>

<b>

  <tr>
    <td WIDTH="469" height="18"></td>
    <td WIDTH="58" align="right" height="18"></td>
  </tr>
</b>

  <tr>
    <td WIDTH="469" VALIGN="TOP" height="34"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Item 2. Management's Discussion and Analysis of Results of Operations<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and Financial Position</font></td>
    <td WIDTH="58" VALIGN="TOP" align="right" height="34"><font FACE="Arial" SIZE="2">14 </font>

<b>

<font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>
</b>

    </td>
  </tr>

<b>

  <tr>
    <td WIDTH="469" height="18"></td>
    <td WIDTH="58" align="right" height="18"></td>
  </tr>
</b>

  <tr>
    <td WIDTH="469" VALIGN="TOP" height="18"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;
      Item 3. Quantitative and Qualitative Disclosures About Market Risk</font></td>
    <td WIDTH="58" VALIGN="TOP" align="right" height="18"><font face="Arial" size="2">23</font>

<b>

<font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>
</b>

    </td>
  </tr>

<b>

  <tr>
    <td WIDTH="469" height="18"></td>
    <td WIDTH="58" align="right" height="18"></td>
  </tr>
</b>

  <tr>
    <td WIDTH="469" VALIGN="TOP" height="21"><u><font FACE="Arial" SIZE="2">Part II - Other
    Information</font></u></td>

<b>

    <td WIDTH="58" VALIGN="TOP" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="469" height="18"></td>
    <td WIDTH="58" align="right" height="18"></td>
  </tr>
</b>

  <tr>
    <td WIDTH="469" height="18" style="font-family: Arial; font-size: 10pt">


    <font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp; Item 4. Submission of
    Matters to a Vote of Security Holders</font>

    </td>
    <td WIDTH="58" align="right" height="18" style="font-family: Arial; font-size: 10pt" valign="top"><font face="Arial" size="2">25
      <b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b>

      </font>

    </td>
  </tr>

<b>

  <tr>
    <td WIDTH="469" height="18" style="font-family: Arial; font-size: 10pt"></td>
    <td WIDTH="58" align="right" height="18" style="font-family: Arial; font-size: 10pt"></td>
  </tr>
</b>

  <tr>
    <td WIDTH="469" height="18" style="font-family: Arial; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;
      Item 6. Exhibits and Reports on Form 8-K</td>
    <td WIDTH="58" align="right" height="18" style="font-family: Arial; font-size: 10pt" valign="top"><font face="Arial" size="2">26</font>

<b>

<font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>
</b>

    </td>
  </tr>

  <tr>
    <td WIDTH="469" VALIGN="TOP" style="font-family: Arial; font-size: 10pt" height="18">

  &nbsp;&nbsp;

  </td>


<font
FACE="Arial" SIZE="5">


<b>


    <td WIDTH="58" VALIGN="TOP" style="font-family: Arial; font-size: 10pt" align="right" height="18"></td>
  </tr>
</b>

  <tr>
    <td WIDTH="469" VALIGN="TOP" height="18"><font FACE="Arial" SIZE="2">Signatures</font></td>
    </font>
    <td WIDTH="58" VALIGN="TOP" align="right" height="18" style="font-family: Arial; font-size: 10pt"><font face="Arial" size="2">27</font>

<b>

<font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>
</b>

    </td>
  </tr>
<font
FACE="Arial" SIZE="5">
  <tr>
    <td WIDTH="469" height="18"><small><small><small>&nbsp; </small></small></small></td>

<b>

    <td WIDTH="58" align="right" height="18" style="font-family: Arial; font-size: 10pt" valign="top"></td>
  </tr>
</b>

  <tr>
    <td WIDTH="469" VALIGN="TOP" height="18"><font FACE="Arial" SIZE="2">Exhibit Index</font></td>
</font>
    <td WIDTH="58" VALIGN="TOP" align="right" height="18" style="font-family: Arial; font-size: 10pt"><font face="Arial" size="2">28</font>

<b>

<font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>
</b>

  </td>
  </tr>
</table>

</center>
</div>

<b>

<p align="center">&nbsp;</p>
</b>

<p ALIGN="JUSTIFY"><font face="Arial" size="2">&quot;Corporation,&quot;
unless the context otherwise requires, means United Technologies Corporation or
UTC and its subsidiaries.&nbsp;</font></p>
<font
FACE="Arial" SIZE="5">
<font FACE="Arial" SIZE="3">

<hr>
<b>

<p align="center"><font FACE="Arial" SIZE="2">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</font></p>
</b>

</font>

<b>

<p><font FACE="Arial" SIZE="2">Part I - Financial Information</font></p>

<blockquote>
  <p><font FACE="Arial" SIZE="2">Item 1 - Financial Statements</font></p>
</blockquote>

<p ALIGN="CENTER"><font FACE="Arial" SIZE="2"><u>CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS</u><br>
(Unaudited)</font>

<p ALIGN="CENTER"></b></font>

<div align="center">
  <center>

<table CELLSPACING="0" BORDER="0" height="657">
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="35"><font face="Arial" size="2"><br>
    In Millions (except per share amounts)</font></td>
    <td WIDTH="17" VALIGN="TOP" height="35"></td>
    <td WIDTH="169" align="center" colspan="3" class="botbord" height="35"><font face="Arial" size="2"><b>Quarter
      Ended<br>
      June 30,&nbsp;</b></font></td>
  </tr>
<font face="Arial" size="2">
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18">&nbsp;&nbsp;</td>
    <td WIDTH="17" VALIGN="TOP" height="18">&nbsp;&nbsp;</td>
    </font>
    <td WIDTH="79" VALIGN="TOP" align="center" height="18"><font face="Arial" size="2"><u><b>2002</b></u></font></td>
<font FACE="Arial" SIZE="2">
    <td WIDTH="13" VALIGN="TOP" height="18" align="center"></td>
    </font>
    <td WIDTH="69" VALIGN="TOP" class="botbord" height="18" align="center"><p align="center"><b><font FACE="Arial" size="2"><u>2001</u></font></b></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">Revenues</font></td>
    <td WIDTH="17" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="13" VALIGN="top" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="69" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Product sales</font></td>
    <td WIDTH="17" VALIGN="TOP" height="18"><p ALIGN="center">
<font face="Arial" SIZE="2">$</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18">
      <p align="right">
<font face="Arial" SIZE="2">5,566&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
    </td>

    <td WIDTH="13" VALIGN="TOP" height="18"><p ALIGN="right">
<font face="Arial" SIZE="2">$</font></td>
  <center>

    <td WIDTH="69" VALIGN="TOP" align="right" height="18">
<font face="Arial" SIZE="2">5,624
    &nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Service sales</font></td>
    <td WIDTH="17" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18">
<font face="Arial" SIZE="2">1,705&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="13" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="18">
<font face="Arial" SIZE="2">1,636
    &nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21">
<font face="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Financing
    revenues and other income, net</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="79" VALIGN="top" align="right" height="21">
<font face="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
53&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="top" align="right" height="21"><font
    face="Arial" SIZE="2">&nbsp;&nbsp; &nbsp;&nbsp;72&nbsp; &nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" height="21"></td>
    <td WIDTH="17" height="21"></td>
    <td WIDTH="79" align="right" height="21" style="border-top: thin solid; border-bottom: thin solid"><font face="Arial" SIZE="2">&nbsp;&nbsp;
      7,324&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="13" height="21"></td>
    <td WIDTH="69" align="right" height="21" style="border-top: thin solid; border-bottom: thin solid"><font face="Arial" SIZE="2">&nbsp;
      7,332 &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">Costs and
      expenses</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font face="Arial" size="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;
      Cost of
    products sold</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">4,067&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">4,130
    &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Cost of
    services sold</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">1,123&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">1,054
    &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="19"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Research and
    development</font></td>
    <td WIDTH="17" VALIGN="TOP" height="19"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="19"><font FACE="Arial" SIZE="2">305&nbsp;&nbsp;
      &nbsp; </font></td>
    <td WIDTH="13" VALIGN="TOP" height="19"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="19"><font face="Arial" size="2">338
      &nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Selling,
    general and administrative</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">798&nbsp;&nbsp;
      &nbsp; </font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">821
      &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Interest</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="top" align="right" style=border-top: thin solid; border-bottom: thin solid" height="21"><font
    FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; 96&nbsp;&nbsp; &nbsp; </font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;109&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="top" align="right" height="21" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin"><font FACE="Arial" SIZE="2">&nbsp;6,389&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="top" align="right" height="21" style="border-top: thin solid; border-bottom: thin solid"><font FACE="Arial" SIZE="2">&nbsp;
      6,452&nbsp; &nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" height="21"></td>
    <td WIDTH="17" height="21"></td>
    <td WIDTH="79" align="right" height="21"></td>
    <td WIDTH="13" height="21"></td>
    <td align="right" width="69" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">Income before income taxes and
    minority interests</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">935&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">880
      &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">Income taxes</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">266&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">261
    &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">Minority interests</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="top" align="right" height="21" class="botbord"><font
    FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 45&nbsp; &nbsp;&nbsp; </font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="top" align="right" height="21"><font
    FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 31&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" height="20"><font FACE="Arial" SIZE="2">Net income </font></td>
    <td WIDTH="17" height="20"><p ALIGN="center"><font FACE="Arial" SIZE="2">$</font></td>

  </center>
    <td WIDTH="79" height="20" style="border-top: thin solid; border-bottom: thick double">
      <p align="right"><font
    FACE="Arial" SIZE="2">624&nbsp;&nbsp;&nbsp;&nbsp; </font></p>
    </td>

    <td WIDTH="13" height="20"><p ALIGN="right"><font FACE="Arial" SIZE="2">$</font></td>

    <td WIDTH="69" height="20" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">
      <p align="right"><font
    FACE="Arial" SIZE="2">&nbsp;&nbsp;588&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
    </td>
  </tr>
  <center>

  <tr>
    <td WIDTH="300" VALIGN="top" height="21"><font face="Arial" size="2">&nbsp;</font></td>
    <td WIDTH="17" VALIGN="top" height="21"></td>

  </center>
    <td WIDTH="79" VALIGN="top" align="right" height="21">
    </td>
  <center>

    <td WIDTH="13" VALIGN="top" height="21"></td>
    <td WIDTH="69" VALIGN="top" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font SIZE="2" face="Arial">Earnings per share of Common
      Stock</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Basic</font></td>
    <td WIDTH="17" VALIGN="TOP" align="center" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18"><font size="2" face="Arial">1.30&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="13" VALIGN="TOP" align="center" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="18"><font SIZE="2" face="Arial">1.23
    &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Diluted</font></td>
    <td WIDTH="17" VALIGN="TOP" align="center" height="18"><p align="right"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18"><font SIZE="2" face="Arial">1.23&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="13" VALIGN="TOP" align="center" height="18"><p align="right"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="18"><font SIZE="2" face="Arial">1.16
    &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" height="21"><font face="Arial" size="2">&nbsp;</font></td>
    <td WIDTH="17" align="center" height="21"></td>
    <td WIDTH="79" align="right" height="21"></td>
    <td WIDTH="13" align="center" height="21"></td>
    <td WIDTH="69" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18"><font SIZE="2" face="Arial">Dividends per share of Common
      Stock</font></td>
    <td WIDTH="17" VALIGN="TOP" align="center" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18"><font SIZE="2" face="Arial">.245&nbsp;
      &nbsp;</font></td>
    <td WIDTH="13" VALIGN="TOP" align="center" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="18"><font SIZE="2" face="Arial">.225 &nbsp; &nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" height="21"><font face="Arial" size="2">&nbsp;</font></td>
    <td WIDTH="17" height="21"></td>
    <td WIDTH="79" align="right" height="21"></td>
    <td WIDTH="13" height="21"></td>
    <td WIDTH="69" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font SIZE="2" face="Arial">Average number of shares
      outstanding</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Basic</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;473&nbsp;
    &nbsp;&nbsp; </font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"><font SIZE="2" face="Arial">471
    &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Diluted</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;507
    &nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="13" VALIGN="TOP" height="21"></td>
    <td WIDTH="69" VALIGN="TOP" align="right" height="21"><font SIZE="2" face="Arial">507
    &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
</table>

  </center>
</div>

  </center>

<p><font SIZE="2" face="Arial">See accompanying Notes to Condensed Consolidated Financial
Statements</font></p>

<p align="center"><font SIZE="2" face="Arial">1</font></p>

<hr>
<b>

<font
FACE="Arial" SIZE="5">
<font FACE="Arial" SIZE="3">

<p align="center"><font FACE="Arial" SIZE="2">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</font></p>

</font>

<p ALIGN="CENTER"><font FACE="Arial" SIZE="2"><u>CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS</u><br>
(Unaudited)</font>

<p ALIGN="CENTER"></font>

<div align="center">
  <center>

<table CELLSPACING="0" BORDER="0" height="657" width="498">
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="35"><font face="Arial" size="2"><br>
    In Millions (except per share amounts)</font></td>
    <td WIDTH="17" VALIGN="TOP" height="35"></td>
    <td WIDTH="169" align="center" colspan="3" class="botbord" height="35"><font face="Arial" size="2"><b>Six
      Months Ended<br>
      June 30,&nbsp;</b></font></td>
  </tr>
<font face="Arial" size="2">
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18">&nbsp;&nbsp;</td>
    <td WIDTH="17" VALIGN="TOP" height="18">&nbsp;&nbsp;</td>
    </font>
    <td WIDTH="79" VALIGN="TOP" align="center" height="18"><font face="Arial" size="2"><u><b>2002</b></u></font></td>
<font FACE="Arial" SIZE="2">
    <td WIDTH="9" VALIGN="TOP" height="18" align="center"></td>
    </font>
    <td WIDTH="73" VALIGN="TOP" class="botbord" height="18" align="center"><p align="center"><b><font FACE="Arial" size="2"><u>2001</u></font></b></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">Revenues</font></td>
    <td WIDTH="17" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="9" VALIGN="top" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="73" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Product sales</font></td>
    <td WIDTH="17" VALIGN="TOP" height="18"><p ALIGN="center">
<font face="Arial" SIZE="2">$</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18">
      <p align="right">
<font face="Arial" SIZE="2">&nbsp;10,266&nbsp;&nbsp;&nbsp;</font></p>
    </td>

    <td WIDTH="9" VALIGN="TOP" height="18"><p ALIGN="right">
<font face="Arial" SIZE="2">$</font></td>

    <td WIDTH="73" VALIGN="TOP" align="right" height="18">
<font face="Arial" SIZE="2">10,612
    &nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Service sales</font></td>
    <td WIDTH="17" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18">
<font face="Arial" SIZE="2">&nbsp;3,326&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="9" VALIGN="TOP" height="18">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="18">
<font face="Arial" SIZE="2">3,245
    &nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21">
<font face="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Financing
    revenues and other income, net</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21">
<font face="Arial" SIZE="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="79" VALIGN="top" align="right" height="21">
<font face="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;106&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="top" align="right" height="21"><font
    face="Arial" SIZE="2">&nbsp;&nbsp; &nbsp;&nbsp;146&nbsp; &nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" height="21"></td>
    <td WIDTH="17" height="21"></td>
    <td WIDTH="81" align="right" height="21" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" SIZE="2">&nbsp;&nbsp;
      13,698&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="9" height="21"></td>
    <td WIDTH="75" align="right" height="21" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" SIZE="2">&nbsp;
      14,003 &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">Costs and
      expenses</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font face="Arial" size="2">&nbsp;&nbsp;</font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;
      Cost of
    products sold</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">&nbsp;7,487&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"><font face="Arial" size="2">7,924
      &nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Cost of
    services sold</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">&nbsp;2,188&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">2,072
      &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="19"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Research and
    development</font></td>
    <td WIDTH="17" VALIGN="TOP" height="19"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="19"><font FACE="Arial" SIZE="2">&nbsp;643&nbsp;
      &nbsp; </font></td>
    <td WIDTH="9" VALIGN="TOP" height="19"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="19"><font face="Arial" size="2">635
      &nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Selling,
    general and administrative</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">&nbsp;1,552&nbsp;
      &nbsp; </font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">1,606
      &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Interest</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="top" align="right" style='border-top-style: none; border-top-width: medium' thin solid; border-bottom: thin solid" height="21"><font
    FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; &nbsp;195&nbsp; &nbsp; </font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;216&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="81" VALIGN="top" align="right" height="21" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;12,065&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="75" VALIGN="top" align="right" height="21" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin"><font FACE="Arial" SIZE="2">&nbsp;
      12,453&nbsp; &nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" height="21"></td>
    <td WIDTH="17" height="21"></td>
    <td WIDTH="79" align="right" height="21"></td>
    <td WIDTH="9" height="21"></td>
    <td align="right" width="73" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">Income before income taxes and
    minority interests</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">&nbsp;1,633&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"><font face="Arial" size="2">1,550
      &nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">Income taxes</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">&nbsp;464&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"><font FACE="Arial" SIZE="2">465
      &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font FACE="Arial" SIZE="2">Minority interests</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="top" align="right" height="21" class="botbord"><font
    FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;78 &nbsp;&nbsp; </font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="top" align="right" height="21"><font
    FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 57&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="300" height="20"><font FACE="Arial" SIZE="2">Net income </font></td>
    <td WIDTH="17" height="20"><p ALIGN="center"><font FACE="Arial" SIZE="2">$</font></td>

    <td WIDTH="81" height="20" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">
      <p align="right"><font
    FACE="Arial" SIZE="2">&nbsp;1,091&nbsp;&nbsp;&nbsp; </font></p>
    </td>

    <td WIDTH="9" height="20"><p ALIGN="right"><font FACE="Arial" SIZE="2">$</font></td>

    <td WIDTH="75" height="20" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">
      <p align="right"><font
    FACE="Arial" SIZE="2">&nbsp;&nbsp;1,028&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
    </td>
  </tr>

  <tr>
    <td WIDTH="300" VALIGN="top" height="21"><font face="Arial" size="2">&nbsp;</font></td>
    <td WIDTH="17" VALIGN="top" height="21"></td>

    <td WIDTH="79" VALIGN="top" align="right" height="21">
    </td>

    <td WIDTH="9" VALIGN="top" height="21"></td>
    <td WIDTH="73" VALIGN="top" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font SIZE="2" face="Arial">Earnings per share of Common
      Stock</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Basic</font></td>
    <td WIDTH="17" VALIGN="TOP" align="center" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18"><font size="2" face="Arial">&nbsp;2.27&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="9" VALIGN="TOP" align="center" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="18"><font SIZE="2" face="Arial">2.15
      &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Diluted</font></td>
    <td WIDTH="17" VALIGN="TOP" align="center" height="18"><p align="right"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18"><font SIZE="2" face="Arial">&nbsp;2.15&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="9" VALIGN="TOP" align="center" height="18"><p align="right"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="18"><font SIZE="2" face="Arial">2.02
      &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" height="21"><font face="Arial" size="2">&nbsp;</font></td>
    <td WIDTH="17" align="center" height="21"></td>
    <td WIDTH="79" align="right" height="21"></td>
    <td WIDTH="9" align="center" height="21"></td>
    <td WIDTH="73" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="18"><font SIZE="2" face="Arial">Dividends per share of Common
      Stock</font></td>
    <td WIDTH="17" VALIGN="TOP" align="center" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="18"><font SIZE="2" face="Arial">.49&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="9" VALIGN="TOP" align="center" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="18"><font SIZE="2" face="Arial">.45 &nbsp; &nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" height="21"><font face="Arial" size="2">&nbsp;</font></td>
    <td WIDTH="17" height="21"></td>
    <td WIDTH="79" align="right" height="21"></td>
    <td WIDTH="9" height="21"></td>
    <td WIDTH="73" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font SIZE="2" face="Arial">Average number of shares
      outstanding</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Basic</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;
    &nbsp;&nbsp;473&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"><font SIZE="2" face="Arial">471
    &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="300" VALIGN="TOP" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Diluted</font></td>
    <td WIDTH="17" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="TOP" align="right" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;
    &nbsp;&nbsp;&nbsp;507&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="9" VALIGN="TOP" height="21"></td>
    <td WIDTH="73" VALIGN="TOP" align="right" height="21"><font SIZE="2" face="Arial">508
    &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
</table>

</div>

  </center>

</b>

<p><font SIZE="2" face="Arial">See accompanying Notes to Condensed Consolidated Financial
Statements</font></p>

<p align="center"><font size="2" face="Arial">2</font></p>

<b>

<hr>

<p align="center"><font SIZE="2" face="Arial">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</font></b></p>

<p align="center"><font SIZE="2" face="Arial"><b><u>CONDENSED CONSOLIDATED BALANCE SHEET</u></b></font></p>

<div align="center">
  <center>

<table CELLSPACING="0" BORDER="0" height="984">
  <tr>
    <td WIDTH="59%" VALIGN="top" HEIGHT="50"><font SIZE="2" face="Arial"><br>
    <br>
      </font></td>
    <td WIDTH="3%" VALIGN="top" HEIGHT="50"></td>
    <td WIDTH="17%" VALIGN="bottom" HEIGHT="50" class="botbord"><font SIZE="2" face="Arial"><p
    align="center"><b>June 30,</b><b><br>
      <u>
    2002
      </u>
      </b></font></td>
    <td WIDTH="4%" VALIGN="bottom" HEIGHT="50" class="botbord"></td>
    <td WIDTH="17%" VALIGN="bottom" HEIGHT="50" class="botbord"><font SIZE="2" face="Arial"><p
    align="center"><b>December 31,<br>
      <u>
    2001</u></b></font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp;&nbsp;</font><font SIZE="2" face="Arial">In Millions</font></td>
    <td WIDTH="3%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp;&nbsp;</font></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp;&nbsp;</font><font SIZE="2" face="Arial"><b>(Unaudited)</b></font></td>
    <td WIDTH="4%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp;&nbsp;</font></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="100%" VALIGN="TOP" HEIGHT="18" colspan="5"><p align="center"><font SIZE="2"
    face="Arial"><b><u>Assets</u></b></font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp;</font></td>
    <td WIDTH="3%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp;&nbsp;</font></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp;&nbsp;</font></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="18"><font SIZE="2" face="Arial">Cash and cash
    equivalents</font></td>
    <td WIDTH="3%" VALIGN="top" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="18"><font SIZE="2" face="Arial">1,902&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="4%" VALIGN="top" height="18"><p ALIGN="center"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="18"><font SIZE="2" face="Arial">1,558&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="21"><font SIZE="2" face="Arial">Accounts receivable,
    net</font></td>
    <td WIDTH="3%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font SIZE="2" face="Arial">4,591&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font SIZE="2" face="Arial">4,093&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="21"><font SIZE="2" face="Arial">Inventories and
    contracts in progress, net</font></td>
    <td WIDTH="3%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font SIZE="2" face="Arial">4,170&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font SIZE="2" face="Arial">3,973&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="21"><font SIZE="2" face="Arial">Future income tax
    benefits</font></td>
    <td WIDTH="3%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font SIZE="2" face="Arial">1,331&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font SIZE="2" face="Arial">1,378&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="21"><font SIZE="2" face="Arial">Other current assets</font></td>
    <td WIDTH="3%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21" class="botbord"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;
    &nbsp;&nbsp;&nbsp; 319&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21" class="botbord"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp; 261&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="17"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Total Current Assets</font></td>
    <td WIDTH="3%" VALIGN="top" height="17"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="17" style="border-top: thin solid; border-bottom: thin solid"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,313&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" height="17"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="17" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin"><font SIZE="2" face="Arial">&nbsp;
      11,263&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="21"><font SIZE="2" face="Arial">Fixed assets</font></td>
    <td WIDTH="3%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font face="Arial" size="2">10,782&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font SIZE="2" face="Arial">10,405&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Less: Accumulated depreciation</font></td>
    <td WIDTH="3%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" height="21"><p align="right"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6,189)&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="4%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font SIZE="2" face="Arial">&nbsp;
      (5,856)&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="21"><font SIZE="2" face="Arial">&nbsp; </font></td>
    <td WIDTH="3%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21" style="border-top: thin solid; border-bottom: thin solid"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,593&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21" style="border-top: thin solid; border-bottom: thin solid"><font SIZE="2" face="Arial">&nbsp;&nbsp;
      4,549&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="21"><font SIZE="2" face="Arial">Goodwill</font></td>
    <td WIDTH="3%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font SIZE="2" face="Arial">
    &nbsp;&nbsp;&nbsp;6,933&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" height="21"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="21"><font SIZE="2" face="Arial">6,802&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="16"><font SIZE="2" face="Arial">Other assets</font></td>
    <td WIDTH="3%" VALIGN="top" height="16"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="16" style="border-bottom-style: solid; border-bottom-width: thin"><font
    SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;4,543&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" height="16"></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="16" style="border-right-style: solid; border-right-width: 0; border-top-style: solid; border-top-width: 0; border-bottom-style: solid; border-bottom-width: thin"><font
    SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,355&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" HEIGHT="21"><font SIZE="2" face="Arial">&nbsp; </font></td>
    <td WIDTH="3%" VALIGN="top" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right"></td>
    <td WIDTH="4%" VALIGN="top" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right"></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="baseline" HEIGHT="16"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Total Assets</font></td>
    <td WIDTH="3%" VALIGN="baseline" HEIGHT="16"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="17%" VALIGN="baseline" HEIGHT="16" align="right" style="border-bottom: thick double"><font face="Arial" size="2">28,382&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="baseline" HEIGHT="16"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="17%" VALIGN="baseline" HEIGHT="16" align="right" class="double" style="border-bottom: thick double"><font
    SIZE="2" face="Arial">26,969&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td VALIGN="top" COLSPAN="5" height="21"><font face="Arial" size="1"></font></td>
  </tr>
  <tr>
    <td WIDTH="100%" VALIGN="top" COLSPAN="5" height="18"><p align="center"><font SIZE="2"
    face="Arial"><b><u>Liabilities and Shareowners' Equity</u></b></font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp; </font></td>
    <td WIDTH="3%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1"></font></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1"></font></td>
    <td WIDTH="4%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1"></font></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1"></font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="18"><font SIZE="2" face="Arial">Short-term borrowings</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="18" align="right"><font face="Arial" size="2">293&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="18" align="right"><font size="2" face="Arial">588&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">Accounts payable</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font face="Arial" size="2">2,498&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">2,156&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">Accrued liabilities</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font face="Arial" size="2">5,855&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">5,493&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">Long-term debt
    currently due</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;44&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">&nbsp;
    &nbsp;&nbsp;&nbsp; 134&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Total Current Liabilities</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right" style="border-top: thin solid; border-bottom: thin solid"><font SIZE="2" face="Arial">&nbsp;
    &nbsp; &nbsp;&nbsp;&nbsp;&nbsp;8,690&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right" style="border-top: thin solid; border-bottom: thin solid"><font SIZE="2" face="Arial">&nbsp;
    &nbsp;8,371&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp; </font></td>
    <td WIDTH="3%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1"></font></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right"></td>
    <td WIDTH="4%" VALIGN="top" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right"></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">Long-term debt</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font size="2" face="Arial">
      &nbsp;&nbsp;&nbsp;4,651&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">4,237&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">Future pension and
    postretirement benefit obligations</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">
    &nbsp;&nbsp;&nbsp;2,747&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">2,703&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">Other long-term
    liabilities</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">&nbsp;&nbsp;2,705&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">2,860&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1">&nbsp; </font></td>
    <td WIDTH="3%" VALIGN="top" HEIGHT="21"><font face="Arial" size="1"></font></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right"></td>
    <td WIDTH="4%" VALIGN="top" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right"></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">Series A ESOP
    Convertible Preferred Stock</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">
    &nbsp;&nbsp;728&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">743&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">ESOP deferred
    compensation</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">&nbsp;
    &nbsp;&nbsp; &nbsp;(302)&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">&nbsp;
    &nbsp; (314)&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">&nbsp; </font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right" style="border-top: thin solid; border-bottom: thin solid"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp; &nbsp;426&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right" style="border-top: thin solid; border-bottom: thin solid"><font SIZE="2" face="Arial">&nbsp;
    &nbsp;&nbsp; 429&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">Shareowners' Equity:</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;
    Common Stock</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;5,233&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">5,090&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;
    Treasury Stock</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">
    &nbsp;&nbsp;(4,625)&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">(4,404)&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;
    Retained earnings</font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;9,955&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="TOP" HEIGHT="21" align="right"><font SIZE="2" face="Arial">9,149&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" HEIGHT="39"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;
    Accumulated other non-shareowners' changes<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; in equity</font></td>
    <td WIDTH="3%" HEIGHT="39"></td>
    <td WIDTH="17%" HEIGHT="39" align="right"><font SIZE="2" face="Arial"><br>
    &nbsp;&nbsp; &nbsp; &nbsp;(1,400)&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="4%" HEIGHT="39"></td>
    <td WIDTH="17%" HEIGHT="39" align="right"><font SIZE="2" face="Arial"><br>
    &nbsp;&nbsp; (1,466)&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" HEIGHT="21"></td>
    <td WIDTH="3%" VALIGN="top" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right" style="border-top: thin solid; border-bottom: thin solid"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;9,163&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" HEIGHT="21"></td>
    <td WIDTH="17%" VALIGN="top" HEIGHT="21" align="right" style="border-top: thin solid; border-bottom: thin solid"><font SIZE="2" face="Arial">&nbsp;&nbsp;
      8,369&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="top" height="18"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Total Liabilities and Shareowners' Equity</font></td>
    <td WIDTH="3%" VALIGN="top" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="17%" VALIGN="top" height="18" align="right" style="border-bottom: thick double"><font
    SIZE="2" face="Arial"> 28,382&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="4%" VALIGN="top" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="17%" VALIGN="top" align="right" height="18" style="border-bottom: thick double"><font
    SIZE="2" face="Arial">26,969&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
</table>

  </center>
</div>

<p><font SIZE="2" face="Arial">See accompanying Notes to Condensed Consolidated Financial
Statements</font></p>

<p align="center"><font size="2" face="Arial">3</font></p>

<hr>
<b><font FACE="Arial" SIZE="3">

<p align="center"></font><font SIZE="2" face="Arial">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</font></p>

<p ALIGN="CENTER"><font SIZE="2" face="Arial"><u>CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS<br>
</u>(Unaudited)</font></p>
</b>

<div align="center">
  <center>

<table CELLSPACING="0" BORDER="0" width="637">
  <tr>
    <td width="368" valign="bottom" height="34"><font SIZE="2" face="Arial">In Millions</font></td>
    <td width="21" height="34"></td>
    <td colspan="3" align="center" class="botbord" width="236" height="34"><font size="2" face="Arial"><strong>Six
      Months
    Ended<br>
      June 30,</strong></font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font face="Arial" size="1"></font></td>
    <td width="21" height="21"><font face="Arial" size="1"></font></td>
    <td width="102" height="21"><font face="Arial" size="1"></font></td>
    <td width="22" height="21"><font face="Arial" size="1"></font></td>
    <td width="104" height="21"><font face="Arial" size="1"></font></td>
  </tr>
  <tr>
    <td width="368" height="21"></td>
    <td width="21" height="21"></td>
    <td align="center" class="botbord" width="102" height="21"><font SIZE="2" face="Arial"><strong><u>2002</u></strong></font></td>
    <td align="center" width="22" height="21"></td>
    <td align="center" class="botbord" width="104" height="21"><font SIZE="2" face="Arial"><strong><u>2001</u></strong></font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">Operating Activities:</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"></td>
  </tr>
  <tr>
    <td width="368" height="18"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Net income</font></td>
    <td width="21" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td align="right" width="102" height="18"><font SIZE="2" face="Arial">1,091&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="18"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td align="right" width="104" height="18"><font size="2" face="Arial">1,028&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="368" height="34"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustments to reconcile
    net income to net<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; cash flows provided by operating activities:</font></td>
    <td width="21" height="34"></td>
    <td align="right" width="102" height="34"><font SIZE="2" face="Arial"><br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </font></td>
    <td width="22" height="34"></td>
    <td align="right" width="104" height="34"></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Depreciation
    and amortization</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font SIZE="2" face="Arial">&nbsp;
      &nbsp;&nbsp;&nbsp;364&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font size="2" face="Arial">447&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income
    tax provision </font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font size="2" face="Arial">&nbsp;132&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">82&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in:</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font SIZE="2" face="Arial">&nbsp;(352)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">(92)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp; Inventories and
    contracts in progress</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font SIZE="2" face="Arial"> (104)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">(261)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Accounts payable and
    accrued liabilities </font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font face="Arial" size="2">388&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">156&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Other current assets</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;(59)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp; Other, net</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font SIZE="2" face="Arial">&nbsp; &nbsp; &nbsp;&nbsp; &nbsp;
      &nbsp;&nbsp;(69)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;
      11 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp; Net cash flows
    provided by operating activities</font></td>
    <td width="21" height="21"></td>
    <td align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin" width="104" height="21"><font SIZE="2"
    face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;1,391 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td width="22" height="21"></td>
    <td align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin" width="106" height="21"><font SIZE="2"
    face="Arial">&nbsp;&nbsp;&nbsp;&nbsp; 1,383 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font face="Arial" size="1">&nbsp; </font></td>
    <td width="21" height="21"><font face="Arial" size="1"></font></td>
    <td align="right" width="102" height="21"></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">Investing Activities:</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Capital expenditures</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;(275)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">(414)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Investments in businesses</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;(312)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">(276)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Dispositions of businesses </font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font face="Arial" size="2">8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;
      Increase in customer financing assets,
    net</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font face="Arial" size="2">(95)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">(159)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Other, net</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; &nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Net cash flows used in
    investing activities</font></td>
    <td width="21" height="21"></td>
    <td align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin" width="104" height="21"><font SIZE="2"
    face="Arial">&nbsp;&nbsp;&nbsp;(674)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td width="22" height="21"></td>
    <td align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin" width="106" height="21"><font SIZE="2"
    face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (843)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font face="Arial" size="1">&nbsp; </font></td>
    <td width="21" height="21"><font face="Arial" size="1"></font></td>
    <td align="right" width="102" height="21"></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">Financing Activities:</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Issuance of long-term debt</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font face="Arial" size="2">501&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font size="2" face="Arial">500&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="368" height="21"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Repayment of long-term debt</font></td>
    <td width="21" height="21"></td>
    <td align="right" width="102" height="21"><font face="Arial" size="2">(190)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="22" height="21"></td>
    <td align="right" width="104" height="21"><font SIZE="2" face="Arial">(112)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="368" height="22"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;
      Decrease in short-term borrowings, net</font></td>
    <td WIDTH="21" height="22"></td>
    <td WIDTH="102" align="right" height="22"><font face="Arial" size="2">(278)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="22" height="22"></td>
    <td WIDTH="104" align="right" height="22"><font SIZE="2" face="Arial">(272)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="368" height="22"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;
      Common Stock issued under employee stock plans</font></td>
    <td WIDTH="21" height="22"></td>
    <td WIDTH="102" align="right" height="22"><font face="Arial" size="2">144&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="22" height="22"></td>
    <td WIDTH="104" align="right" height="22"><font face="Arial" size="2">246&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="368" height="22"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Dividends paid
    on Common Stock</font></td>
    <td WIDTH="21" height="22"></td>
    <td WIDTH="102" align="right" height="22"><font face="Arial" size="2">(232)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="22" height="22"></td>
    <td WIDTH="104" align="right" height="22"><font SIZE="2" face="Arial">(212)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="368" height="22"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Repurchase of
    Common Stock</font></td>
    <td WIDTH="21" height="22"></td>
    <td WIDTH="102" align="right" height="22"><font face="Arial" size="2">(226)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="22" height="22"></td>
    <td WIDTH="104" align="right" height="22"><font SIZE="2" face="Arial">(365)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="368" height="22"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Other, net</font></td>
    <td WIDTH="21" height="22"></td>
    <td WIDTH="102" align="right" height="22"><font face="Arial" size="2">(108)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="22" height="22"></td>
    <td WIDTH="104" align="right" height="22"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      (98)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="368" height="22"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Net
    cash flows used in financing activities</font></td>
    <td WIDTH="21" height="22"></td>
    <td WIDTH="104" align="right" height="22" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">(389)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="22" height="22"></td>
    <td WIDTH="106" align="right" height="22" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;
      &nbsp; (313)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="368" height="21"><font face="Arial" size="1">&nbsp; </font></td>
    <td WIDTH="21" height="21"><small><small><small></small></small></small></td>
    <td WIDTH="102" align="right" height="21"></td>
    <td WIDTH="22" height="21"></td>
    <td WIDTH="104" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="368" height="38"><font SIZE="2" face="Arial">Effect of foreign exchange rate
    changes on Cash<br>
      &nbsp;&nbsp; and cash equivalents</font></td>
    <td WIDTH="21" height="38"></td>
    <td WIDTH="104" align="right" height="38" valign="bottom" style="border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="22" height="38"></td>
    <td WIDTH="106" align="right" height="38" style="border-bottom-style: solid; border-bottom-width: thin" valign="bottom"><font SIZE="2"
    face="Arial"><br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (18)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="368"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Net increase in Cash and cash equivalents</font></td>
    <td WIDTH="21"></td>
    <td WIDTH="102" align="right"><font face="Arial" size="2">344&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="22"></td>
    <td WIDTH="104" align="right"><font face="Arial" size="2">209&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="368" height="21"><font face="Arial" size="1">&nbsp; </font></td>
    <td WIDTH="21" height="21"><small><small><small></small></small></small></td>
    <td WIDTH="102" align="right" height="21"></td>
    <td WIDTH="22" height="21"></td>
    <td WIDTH="104" align="right" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="368" height="22"><font SIZE="2" face="Arial">Cash and cash equivalents,
    beginning of year</font></td>
    <td WIDTH="21" height="22"></td>
    <td WIDTH="102" align="right" height="22" class="botbord"><font face="Arial" size="2">1,558&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="22" height="22"></td>
    <td WIDTH="104" align="right" height="22" class="botbord"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      748&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="368" height="26"><font SIZE="2" face="Arial">Cash and cash equivalents, end of
    period</font></td>
    <td WIDTH="21" height="26"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="104" align="right" height="26" class="double" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">1,902&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="22" height="26"><p align="right"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="106" align="right" height="26" class="double" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font size="2" face="Arial">957&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
</table>

  </center>
</div>

<p><font SIZE="2" face="Arial">See accompanying Notes to Condensed Consolidated Financial
Statements</font></p>

<p align="center"><font size="2" face="Arial">4</font></p>

<hr>

<p align="center"><b><font SIZE="2" face="Arial">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</font></p>

<p align="center"><font SIZE="2" face="Arial"><u>NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS<br>
</u>(Unaudited)</font></p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;<font face="Arial" size="2"> </font></b><font FACE="Arial" SIZE="2">
 The Condensed Consolidated Financial Statements at June 30, 2002 and for the
 quarters and six-month periods ended June 30, 2002 and 2001 are unaudited, but
 in the opinion of management include all adjustments, consisting only of normal
 recurring adjustments, necessary for a fair presentation of the results for the
 interim periods. The results reported in these condensed consolidated financial
 statements should not necessarily be taken as indicative of results that may be
 expected for the entire year.&nbsp; The
 financial information included herein should be read in conjunction with the
 financial statements and notes in the Corporation's Annual Report incorporated
 by reference in Form 10-K for calendar year 2001.</p>
<p ALIGN="JUSTIFY"><font FACE="Arial" SIZE="2"><b>Issuance
of Long-Term Debt</b></font></p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;
In April 2002, the Corporation issued $500 million of 6.10%
unsubordinated, unsecured, nonconvertible notes (the &quot;6.10% Notes&quot;)
under shelf registration statements previously filed with the Securities and
Exchange Commission.&nbsp; The 6.10%
Notes are due May 15, 2012, with interest payable semiannually commencing
November 15, 2002.&nbsp; The Corporation
may redeem all or any portion of the 6.10% Notes at any time for a formula-based
price determined by reference to Treasury rates at the time of the redemption.&nbsp;
Proceeds from the issuance were used primarily to repay commercial paper.&nbsp;
The proceeds from these commercial paper borrowings were used for working
capital and for general corporate purposes.</p>
<p><font face="Arial" size="2"><b>Derivative
Instruments and Hedging Activities</b></font></p>
<p ALIGN="JUSTIFY">
&nbsp;&nbsp;&nbsp; The
Corporation uses derivative instruments, including swaps, forward contracts and
options, to manage certain foreign currency, interest rate and commodity price
exposures.&nbsp; Derivative instruments
are used as risk management tools by the Corporation and are not used for
trading or speculative purposes.&nbsp; The
Corporation enters into derivative and other financial instruments with major
investment grade financial institutions and has policies to monitor the credit
risk of those counterparties.&nbsp; The
Corporation limits counterparty exposure and concentration of risk by
diversifying its counterparties.&nbsp; The
Corporation does not anticipate nonperformance by any of these counterparties.<p ALIGN="JUSTIFY">
&nbsp;&nbsp;&nbsp; Foreign
currency exposures that cannot be naturally offset within an operating unit to
an insignificant amount are hedged with foreign currency derivatives.&nbsp;
These derivatives include forward contracts and swaps that cover
exposures arising from the required remeasurement of
foreign-currency-denominated receivables, payables and borrowings.&nbsp;
The Corporation also uses forward contracts, in limited circumstances, to
hedge a portion of its forecast purchases of raw materials.&nbsp;
In addition, a portion of the Corporation's fixed-rate long-term debt
portfolio is hedged with fixed for floating interest rate swaps.&nbsp;&nbsp;<p ALIGN="JUSTIFY">
 &nbsp;&nbsp;&nbsp; Derivatives used for
hedging purposes must be designated and effective as a hedge of the identified
risk exposure at the inception of the contract.&nbsp; Accordingly, changes in fair value of the derivative contract
must be highly correlated with changes in the fair value of the underlying
hedged item at inception of the hedge and over the life of the hedge contract.
<p align="center"><font face="Arial" size="2">5</font></p>
<hr>

<p align="center"><b><font SIZE="2" face="Arial">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</font></b></p>

<p align="left"><font face="Arial" size="2"><u>Quarterly
Activity</u></font></p>

<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; At June 30, 2002 and
2001, the fair value of derivatives held by the Corporation, including those
embedded in other contracts, was a net asset of $5 million and a net liability
of $48 million, respectively.&nbsp; The
non-shareowner changes in equity associated with hedging activity during the six-month periods ended June 30, 2002 and 2001 were as follows:</font>

<p ALIGN="JUSTIFY">&nbsp;
<div align="center"><center>

<table CELLSPACING="0" BORDER="0" width="633">
  <tr>
    <td WIDTH="328" VALIGN="TOP"><font face="Arial" size="2">In Millions, net of
      tax</font></td>
    <td WIDTH="9" VALIGN="TOP"></td>
    <td WIDTH="115" VALIGN="TOP" align="center" class="medbord"><font face="Arial" size="2"><b><u>2002</u></b></font></td>
    <td WIDTH="21" VALIGN="TOP" align="center"></td>
    <td WIDTH="20" VALIGN="TOP" align="center"></td>
    <td WIDTH="116" VALIGN="TOP" align="center" class="medbord"><font face="Arial" size="2"><b><u>2001</u></b></font></td>
  </tr>
  <tr>
    <td WIDTH="328" height="10"><font face="Arial" size="1">&nbsp; </font></td>
    <td WIDTH="9" height="10"></td>
    <td WIDTH="115" height="10"></td>
    <td WIDTH="21" height="10"></td>
    <td WIDTH="20" height="10"></td>
    <td WIDTH="116" height="10"></td>
  </tr>
  <tr>
    <td WIDTH="328" VALIGN="TOP"><p ALIGN="JUSTIFY"><font SIZE="2" face="Arial">Balance
      at January 1</font></td>
    <td WIDTH="9" VALIGN="TOP"><p ALIGN="CENTER"><font SIZE="2" face="Arial">$</font></td>
</center>
    <td WIDTH="115" VALIGN="TOP" align="right">
      <p align="right"><font size="2" face="Arial">(23)&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <center>

    <td WIDTH="21" VALIGN="TOP" align="right"></td>

    <td WIDTH="20" VALIGN="TOP" align="right"><font size="2" face="Arial">$</font></td>

    <td WIDTH="116" VALIGN="TOP" align="right"><p align="right"><font SIZE="2" face="Arial">-&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="328" VALIGN="TOP"><p ALIGN="JUSTIFY"><font SIZE="2" face="Arial">Cash flow
    hedging gain (loss), net</font></td>
    <td WIDTH="9" VALIGN="TOP"></td>
    <td WIDTH="115" VALIGN="TOP" align="right"><font face="Arial" size="2">11&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="21" VALIGN="TOP" align="right"></td>
    <td WIDTH="20" VALIGN="TOP" align="right"></td>
    <td WIDTH="116" VALIGN="TOP" align="right"><font SIZE="2" face="Arial">(26)&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="328" VALIGN="TOP"><p ALIGN="JUSTIFY"><font SIZE="2" face="Arial">Net loss
    reclassified to sales or cost of products sold</font></td>
    <td WIDTH="9" VALIGN="TOP"></td>
    <td WIDTH="115" VALIGN="top" align="right"><font face="Arial" size="2">18&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="21" VALIGN="top" align="right"></td>
    <td WIDTH="20" VALIGN="top" align="right"></td>
    <td WIDTH="116" VALIGN="top" align="right"><font size="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      10&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="328" style="font-family: Arial; font-size: 10pt"><p ALIGN="JUSTIFY"><font SIZE="2" face="Arial">Balance
      at June 30</font></td>
    <td WIDTH="9" VALIGN="TOP" style="font-family: Arial; font-size: 10pt"><p ALIGN="CENTER"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="117" VALIGN="top" align="right" style="font-family: Arial; font-size: 10pt; border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">6&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="21" VALIGN="top" align="right" style="font-family: Arial; font-size: 10pt"></td>
    <td WIDTH="20" VALIGN="top" align="right" style="font-family: Arial; font-size: 10pt"><font size="2" face="Arial">$</font></td>
    <td WIDTH="116" VALIGN="top" align="right" style="font-family: Arial; font-size: 10pt; border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font SIZE="2" face="Arial">(16)&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
</table>
</center></div>

<p ALIGN="JUSTIFY"><font face="Arial" size="2"> &nbsp;&nbsp;&nbsp;
Of
the amount recorded in shareowners' equity, a $2 million pre-tax loss is
expected to be reclassified into sales or cost of products sold to reflect the
fixed prices obtained from hedging within the next 12 months.&nbsp; Gains and losses recognized in earnings related to
discontinuance of cash flow hedges and ineffectiveness of cash flow hedges
during the quarter ended June 30, 2002 were immaterial.&nbsp;
All open derivative contracts mature by September 2006.</font></p>

<p><b>Non-Shareowners'
Changes in Equity</b></p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Non-shareowners'
changes in equity include all changes in equity during a period except changes
resulting from investments by and distributions to shareowners.&nbsp;
A summary of the non-shareowners' changes in equity is provided below.
<p>&nbsp;</p>

<table CELLSPACING="0" BORDER="0">
  <tr>
    <td WIDTH="270" VALIGN="TOP"><font SIZE="2" face="Arial"><br>
      In Millions&nbsp;</font></td>
    <td WIDTH="202" VALIGN="TOP" align="center" colspan="4"><font face="Arial" size="2"><b>Quarter
      Ended<br>
      June 30,</b></font></td>
    <td WIDTH="16" VALIGN="TOP" align="center"></td>
    <td WIDTH="196" VALIGN="top" align="center" colspan="3"><font face="Arial" size="2"><b>Six
      Months Ended<br>
      June 30,</b></font></td>
  </tr>
  <tr>
    <td WIDTH="270" VALIGN="TOP"></td>
    <td WIDTH="14" VALIGN="TOP" align="center"></td>
    <td WIDTH="86" VALIGN="TOP" align="center"><font size="2" face="Arial"><strong><u>2002</u></strong></font></td>
    <td WIDTH="16" VALIGN="TOP" align="right"></td>
    <td WIDTH="86" VALIGN="TOP" align="center"><font size="2" face="Arial"><strong><u>2001</u></strong></font></td>
    <td WIDTH="16" VALIGN="TOP" align="center"></td>
    <td WIDTH="82" VALIGN="TOP" align="center" class="medbord"><font SIZE="2" face="Arial"><strong><u>2002</u></strong></font></td>
    <td WIDTH="14" VALIGN="TOP" align="center"></td>
    <td WIDTH="86" VALIGN="TOP" align="center" class="medbord"><font SIZE="2" face="Arial"><strong><u>2001</u></strong></font></td>
  </tr>
  <tr>
    <td WIDTH="270" VALIGN="TOP"></td>
    <td WIDTH="14" VALIGN="TOP" align="center"></td>
    <td WIDTH="86" align="left"></td>
    <td WIDTH="16" align="right"></td>
    <td WIDTH="86" align="right"></td>
    <td WIDTH="16" VALIGN="TOP" align="center"></td>
    <td WIDTH="82" VALIGN="TOP" align="right"></td>
    <td WIDTH="14" VALIGN="TOP" align="right"></td>
    <td WIDTH="86" VALIGN="TOP" align="right"></td>
  </tr>
  <tr>
    <td WIDTH="270" VALIGN="TOP"><font SIZE="2" face="Arial">&nbsp; Net income</font></td>
    <td WIDTH="14" VALIGN="TOP" align="center"><font size="2" face="Arial">$</font></td>
    <td WIDTH="86" align="right" style="font-family: Arial; font-size: 10pt">
      <p align="right"><font face="Arial" size="2">624&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="16" align="right" style="font-family: Arial; font-size: 10pt"><font face="Arial" size="2">$</font></td>
    <td WIDTH="86" align="right" style="font-family: Arial; font-size: 10pt"><font size="2" face="Arial">588&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="16" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="82" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"><font size="2" face="Arial">1,091&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="14" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"><p ALIGN="right"><font SIZE="2" face="Arial">$</font></td>
    <td WIDTH="86" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"><font size="2" face="Arial">1,028&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="270" VALIGN="TOP"><font SIZE="2" face="Arial">&nbsp; Foreign currency translation, net</font></td>
    <td WIDTH="14" VALIGN="TOP" align="center"></td>
    <td WIDTH="86" align="right" style="font-family: Arial; font-size: 10pt"><font face="Arial" size="2">109 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="16" align="right" style="font-family: Arial; font-size: 10pt"></td>
    <td WIDTH="86" align="right" style="font-family: Arial; font-size: 10pt"><font size="2" face="Arial">(10)&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;</font></td>
    <td WIDTH="16" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"></td>
    <td WIDTH="82" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"><font SIZE="2" face="Arial">53&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="14" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"></td>
    <td WIDTH="86" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"><font SIZE="2" face="Arial">(121)&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="270" VALIGN="TOP"><font SIZE="2" face="Arial">&nbsp; Unrealized holding (loss)
      gain on
    <br>
    &nbsp;&nbsp;&nbsp; marketable equity securities, net</font></td>
    <td WIDTH="14" VALIGN="TOP" align="center"></td>
  </font>
    <td WIDTH="86" align="right" style="font-family: Arial; font-size: 10pt">
      <font face="Arial" size="2">
      <br>
      (14)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
    </td>
  <font FACE="Arial" SIZE="2">
    <td WIDTH="16" align="right" style="font-family: Arial; font-size: 10pt">
    </td>
  </font>
    <td WIDTH="86" align="right" style="font-family: Arial; font-size: 10pt">

<font face="Arial" size="2">

<br>
14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
    </td>
  <font FACE="Arial" SIZE="2">
    <td WIDTH="16" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt">
    </td>
  </font>
    <td WIDTH="82" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt">
      <font face="Arial" size="2">
      <br>
      (16)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
    </td>
  <font FACE="Arial" SIZE="2">
    <td WIDTH="14" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt">
    </td>
  </font>
    <td WIDTH="86" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt">
      <font face="Arial" size="2">
      <br>
      (2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
    </td>
  </tr>
<font FACE="Arial" SIZE="2">
  <tr>
    <td WIDTH="270" VALIGN="TOP"><font SIZE="2" face="Arial">&nbsp; Cash flow hedging
      gain (loss), net</font></td>
    <td WIDTH="14" VALIGN="TOP" align="center"></td>
    <td WIDTH="86" align="right" style="font-family: Arial; font-size: 10pt"><font face="Arial" size="2">24&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="16" align="right" style="font-family: Arial; font-size: 10pt"></td>
    <td WIDTH="86" align="right" style="font-family: Arial; font-size: 10pt"><font face="Arial" size="2">13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="16" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"></td>
    <td WIDTH="82" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"><font face="Arial" size="2">29&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="14" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"></td>
    <td WIDTH="86" VALIGN="TOP" align="right" style="font-family: Arial; font-size: 10pt"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16)&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td align="right"><font face="Arial" size="2">&nbsp;&nbsp; </font></td>
    <td align="right"><font face="Arial" size="2">$</font></td>
    <td align="right" style="font-family: Arial; font-size: 10pt; border-top-style: solid; border-top-width: THIN; border-bottom-style: double; border-bottom-width: thick">
      <font face="Arial" size="2">743&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
    </td>
    <td align="right" style="font-family: Arial; font-size: 10pt"><font face="Arial" size="2">$</font></td>
    <td align="right" style="font-family: Arial; font-size: 10pt; border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">
      <font face="Arial" size="2">605&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
    </td>
    <td align="right" style="font-family: Arial; font-size: 10pt"><p ALIGN="RIGHT"><font face="Arial" size="2">$</font></td>
    <td align="right" style="font-family: Arial; font-size: 10pt; border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">&nbsp;
      &nbsp;&nbsp; &nbsp;1,157&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="right" style="font-family: Arial; font-size: 10pt"><p ALIGN="RIGHT"><font face="Arial" size="2">$</font></td>
    <td align="right" style="font-family: Arial; font-size: 10pt; border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;
      889&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
</table>

<font face="Arial" size="2">

<p ALIGN="center">6</p>
<hr>
<b>

<p ALIGN="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>
</b>
</font>

<p ALIGN="left"><font face="Arial" size="2"><b>Inventories and Contracts in
Progress</b></font></p>

<div align="center">
  <center>

<table CELLSPACING="0" BORDER="0" width="493">
  <tr>
    <td WIDTH="256" VALIGN="top"><font SIZE="2" face="Arial"><br>
    In Millions </font></td>
    <td WIDTH="17" VALIGN="top"></td>
    <td WIDTH="86" VALIGN="top" class="medbord"><p align="center"><font size="2" face="Arial"><b>June 30,</b></font><font SIZE="2" face="Arial"><b><br>
      <u>
    2002</u></b></font></td>
    <td WIDTH="18" VALIGN="top" class="medbord"></td>
    <td WIDTH="102" VALIGN="top" class="medbord"><p align="center"><font SIZE="2" face="Arial"><b>December
      31,<br>
      <u>
    2001</u></b></font></td>
  </tr>
  <tr>
    <td width="256"><font face="Arial" size="2">&nbsp;</font></td>
    <td width="17"></td>
    <td width="84"></td>
    <td width="16"></td>
    <td width="100"></td>
  </tr>
  <tr>
    <td width="256"><font SIZE="2" face="Arial">Inventories consist of the following:</font></td>
    <td width="17"></td>
    <td width="84"></td>
    <td width="16"></td>
    <td width="100"></td>
  </tr>
  <tr>
    <td width="256"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Raw material</font></td>
    <td width="17"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td align="right" width="84"><font SIZE="2" face="Arial">792&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td align="right" width="16"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td align="right" width="100"><p ALIGN="right"><font SIZE="2" face="Arial">728&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="256"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Work-in-process</font></td>
    <td width="17"></td>
    <td align="right" width="84"><font SIZE="2" face="Arial">1,205&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="right" width="16"></td>
    <td align="right" width="100"><p ALIGN="right"><font SIZE="2" face="Arial">1,208&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="256"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Finished goods</font></td>
    <td width="17"></td>
    <td align="right" width="84"><font SIZE="2" face="Arial">2,607&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="right" width="16"></td>
    <td align="right" width="100"><p ALIGN="right"><font SIZE="2" face="Arial">2,176&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="256"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Contracts in progress</font></td>
    <td width="17"></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: thin" width="86"><font SIZE="2" face="Arial">&nbsp;&nbsp;2,055&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="right" width="16"></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: thin" width="102"><p ALIGN="right"><font SIZE="2"
    face="Arial">&nbsp;&nbsp; 2,106&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td width="256"><font face="Arial" size="2">&nbsp; </font></td>
    <td width="17"></td>
    <td align="right" width="84"><font SIZE="2" face="Arial"> 6,659&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align="right" width="16"></td>
    <td align="right" width="100"><p ALIGN="right"><font SIZE="2" face="Arial">6,218 &nbsp;&nbsp;&nbsp; </font></td>
  </tr>
  <tr>
    <td width="256"><font SIZE="2" face="Arial">Less:</font></td>
    <td width="17"></td>
    <td align="right" width="84"></td>
    <td align="right" width="16"></td>
    <td align="right" width="100"></td>
  </tr>
  <tr>
    <td width="256"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Progress payments, secured by lien, on <br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Government contracts</font></td>
    <td width="17"></td>
    <td align="right" width="84"><font SIZE="2" face="Arial"><br>
      (195)&nbsp;&nbsp;&nbsp;
 </font></td>
    <td align="right" width="16"></td>
    <td align="right" width="100"><p ALIGN="right"><font SIZE="2" face="Arial"><br>
      (146)&nbsp; &nbsp; </font></td>
  </tr>
  <tr>
    <td width="256"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp; Billings on contracts in progress</font></td>
    <td width="17"></td>
    <td align="right" width="84"><font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;(2,294)&nbsp;&nbsp;&nbsp; </font></td>
    <td align="right" width="16"></td>
    <td align="right" width="100"><p ALIGN="right"><font SIZE="2" face="Arial">&nbsp;&nbsp;
      (2,099)&nbsp;
    &nbsp; </font></td>
  </tr>
  <tr>
    <td width="256"><font face="Arial" size="2">&nbsp; </font></td>
    <td width="17"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" width="86"><font
    SIZE="2" face="Arial"> &nbsp; &nbsp;4,170&nbsp;&nbsp; &nbsp;&nbsp;</font></td>
    <td align="right" width="16"><p ALIGN="RIGHT"><font SIZE="2" face="Arial">$</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" width="102"><u><p
    ALIGN="right"></u><font SIZE="2" face="Arial">3,973&nbsp;&nbsp; &nbsp;&nbsp;</font></td>
  </tr>
</table>
  </center>
</div>
<p><b><font face="Arial" size="2">Investments in Businesses</font></b>
<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; During
the first six months of 2002, the Corporation invested $333 million, including
$21 million of debt assumed, in the acquisition of businesses.&nbsp;
Those investments consisted primarily of Sikorsky's acquisition of Derco
and aerospace industry acquisitions at Pratt &amp; Whitney.&nbsp;
The Corporation accounted for acquisitions under the purchase method and
recorded the assets and liabilities of the acquired businesses at their fair
values at the dates of acquisition.&nbsp; The
excess of the purchase price over the estimated fair values of the net assets
acquired has been recorded as goodwill.&nbsp; The
cost of acquisitions, including finalization of restructuring plans and
allocations of cost, may require adjustment based upon information that may come
to the attention of the Corporation which is not currently available.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The results of operations of all acquired businesses
have been included in the Condensed Consolidated Statement of Operations
beginning on the effective date of each acquisition. The pro forma results,
assuming these acquisitions had been made at the beginning of the year, would
not be materially different from reported results.
<p ALIGN="JUSTIFY"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Effective July 1, 2001, the Corporation adopted the
provisions of Statement of Financial Accounting Standards No. 141 &quot;Business
Combinations&quot; (&quot;SFAS 141&quot;).&nbsp;
The provisions of SFAS 141 apply to business combinations completed after
June 30, 2001 and require that the purchase method of accounting be used to
account for such transactions and set forth the accounting and initial
recognition of acquired intangible assets and goodwill.</font></p>
<p><font face="Arial" size="2"><b>Goodwill
and Other Intangible Assets&nbsp;</b></font></p>
<p ALIGN="JUSTIFY"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Effective July 1, 2001, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets" ("SFAS 142") applicable to business combinations
completed after June 30, 2001.&nbsp; Effective
January 1, 2002, additional provisions of SFAS 142, relating to business
combinations completed prior to June 30, 2001, became effective and were adopted
by the Corporation.&nbsp; Under the
provisions of this standard, intangible assets deemed to have indefinite lives
and goodwill are not subject to amortization.&nbsp;
All other intangible assets are amortized over their estimated useful
lives.&nbsp; Intangible assets and
goodwill are subject to annual impairment testing using the guidance and
criteria described in the standard.&nbsp; This
testing requires comparison of carrying values to fair values, and when
appropriate, the carrying value of impaired assets is reduced to fair value.&nbsp;
As of June 30, 2002,
the Corporation has not recognized any goodwill impairment.&nbsp; There can be no assurance that goodwill impairment will not occur in the
future.</font>
<font face="Arial" size="2">
<p align="center"><font face="Arial" size="2">7</font></p>
<hr>

<font face="Arial" size="2">

<b>

<p ALIGN="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>
</b>
</font>

<font face="Arial" size="2">&nbsp;&nbsp;&nbsp; Net
income and basic and diluted earnings per share for the quarter and six months
ended June 30, 2002 and 2001, with 2001 results adjusted to exclude amounts no longer being amortized, are
as follows:</font>
<p>&nbsp;</p>

<table border="0" cellspacing="0" style="font-family: Arial; font-size: 10pt" cellpadding="0" height="258" width="714">
  <tr>
    <td width="307" style="font-family: Arial; font-size: 10pt" height="18"></td>

    <td width="211" align="center" style="font-family: Arial; font-size: 10pt" height="18" colspan="4"><b>Quarter
      Ended<br>
      June 30,&nbsp;</b></td>
    <td width="190" align="center" style="font-family: Arial; font-size: 10pt; font-weight: bold" height="18" colspan="4">Six
      Months Ended<br>
      June 30,</td>

  </tr>
  <tr>
    <td width="307" style="font-family: Arial; font-size: 10pt" height="18">In Millions (except per share amounts)</td>

<b>

    <td width="18" align="right" style="font-family: Arial; font-size: 10pt" height="18"></td>
    <td width="82" align="center" class="medbord" style="font-family: Arial; font-size: 10pt; font-weight: bold" height="18"><u><font face="Arial" size="2">2002</font></u></td>

    <td width="21" align="right" style="font-family: Arial; font-size: 10pt" height="18"></td>
    <td width="84" align="center" class="medbord" style="font-family: Arial; font-size: 10pt; font-weight: bold" height="18"><u><font face="Arial" size="2">2001</font></u></td>
    <td width="18" align="center" style="font-family: Arial; font-size: 10pt; font-weight: bold" height="18"></td>
    <td width="74" align="center" class="medbord" style="font-family: Arial; font-size: 10pt; font-weight: bold" height="18"><u><font face="Arial" size="2">2002</font></u></td>
    <td width="18" align="center" class="medbord" style="font-family: Arial; font-size: 10pt; font-weight: bold" height="18"></td>
    <td width="74" align="center" class="medbord" style="font-family: Arial; font-size: 10pt; font-weight: bold" height="18"><u><font face="Arial" size="2">2001</font></u></td>
</b>

  </tr>
  <tr>
    <td width="307" height="17">&nbsp;&nbsp;</td>

<b>

    <td width="18" align="right" height="17"></td>
    <td width="82" height="17"></td>

    <td width="21" align="right" height="17"></td>
    <td width="84" height="17"></td>
    <td width="18" align="right" height="17"></td>
    <td width="74" height="17"></td>
    <td width="18" height="17"></td>
    <td width="74" height="17"></td>
</b>

  </tr>
  <tr>
    <td width="307" height="17">Reported Net Income</td>
    <td width="18" align="right" height="17">$</td>
    <td width="82" align="right" height="17">
      <p align="right">&nbsp;&nbsp;&nbsp;624&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="21" align="right" height="17"><font face="Arial" size="2">$</font></td>
    <td width="84" align="right" height="17">
      <p align="right">588&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="18" align="right" height="17">$</td>
    <td width="74" align="right" height="17">1,091&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="18" align="right" height="17"><font face="Arial" size="2">$</font></td>
    <td width="74" align="right" height="17">1,028<font face="Arial" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;
</b>

      </font></td>
  </tr>
  <tr>
    <td width="307" height="18">Adjustments:&nbsp;&nbsp;</td>

<b>

    <td width="18" align="right" height="18"></td>
    <td width="82" align="right" height="18">&nbsp;&nbsp;&nbsp;</td>

    <td width="21" align="right" height="18"></td>
</b>

    <td width="84" align="right" height="18"></td>

<b>

    <td width="18" align="right" height="18"></td>
</b>

    <td width="74" align="right" height="18"></td>

    <td width="18" align="right" height="18"></td>

    <td width="74" align="right" height="18"></td>
  </tr>
  <tr>
    <td width="307" height="18">&nbsp;&nbsp;&nbsp;&nbsp; Goodwill amortization</td>

    <td width="18" align="right" height="18"></td>
    <td width="82" align="right" height="18">-&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="21" align="right" height="18"></td>

    <td width="84" align="right" height="18">58&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="18" align="right" height="18"></td>

    <td width="74" align="right" class="botbord" height="18">-<font face="Arial" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;
</b>

      </font></td>

    <td width="18" align="right" class="botbord" height="18"></td>

    <td width="74" align="right" class="botbord" height="18">114&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr>
    <td width="307" height="18" align="left">&nbsp;&nbsp;&nbsp;&nbsp; Income
      taxes</td>

    <td width="18" align="right" height="18"></td>
    <td width="82" align="right" height="18">-&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="21" align="right" height="18"></td>

    <td width="84" align="right" height="18"><font face="Arial" size="2">(4)</font><b>&nbsp;&nbsp;&nbsp;</b></td>

    <td width="18" align="right" height="18"></td>

    <td width="74" align="right" class="botbord" height="18">-<font face="Arial" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;
</b>

      </font></td>

    <td width="18" align="right" class="botbord" height="18"></td>

    <td width="74" align="right" class="botbord" height="18">(8)<b>&nbsp;&nbsp;&nbsp;</b></td>
  </tr>
  <tr>
    <td width="307" height="26"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;
      </font><font face="Arial" size="2">Minority interest in subsidiaries' earnings</font></td>
    <td width="18" align="right" height="26"></td>

    <td width="82" align="right" height="26">-&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="21" align="right" height="26"></td>

    <td width="84" align="right" height="26">(1)<b>&nbsp;&nbsp;&nbsp;</b></td>

    <td width="18" align="right" height="26"></td>
    <td width="74" align="right" height="26">-<font face="Arial" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;
</b>

      </font></td>
    <td width="18" align="right" height="26"></td>
    <td width="74" align="right" height="26">(1)<b>&nbsp;&nbsp;&nbsp;</b></td>
  </tr>
  <tr>
    <td width="307" height="26">Adjusted Net Income</td>
    <td width="18" align="right" height="26">$</td>

    <td width="84" align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" height="26"><font face="Arial" size="2">&nbsp;&nbsp;
      </font><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;624</font>&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="21" align="right" height="26"><font face="Arial" size="2">$</font></td>

    <td width="86" align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" height="26"><font face="Arial" size="2">641</font>&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="18" align="right" height="26">$</td>
    <td width="76" align="right" class="double" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" height="26">&nbsp;&nbsp;&nbsp;1,091&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="18" align="right" class="double" height="26"><font face="Arial" size="2">$</font></td>
    <td width="76" align="right" class="double" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" height="26">1,133&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr>

<b>

    <td width="307" height="18"></td>
    <td width="18" align="right" height="18"></td>
    <td width="82" align="right" height="18"></td>
    <td width="21" align="right" height="18"></td>
    <td width="84" align="right" height="18"></td>
    <td width="18" align="right" height="18"></td>
    <td width="74" align="right" height="18"></td>
    <td width="18" align="right" height="18"></td>
    <td width="74" align="right" height="18"></td>
</b>

  </tr>
  <tr>
    <td width="307" height="18">Basic earnings per share</td>

<b>

    <td width="18" align="right" height="18"></td>
    <td width="82" align="right" height="18"></td>

    <td width="21" align="right" height="18"></td>
    <td width="84" align="right" height="18"></td>
    <td width="18" align="right" height="18"></td>
    <td width="74" align="right" height="18"></td>
    <td width="18" align="right" height="18"></td>
    <td width="74" align="right" height="18"></td>
</b>

  </tr>
  <tr>
    <td width="307" height="18">&nbsp; Reported</td>
    <td width="18" align="right" height="18">$</td>
    <td width="82" align="right" height="18">1.30&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="21" align="right" height="18"><font face="Arial" size="2">$</font></td>
    <td width="84" align="right" height="18"><font face="Arial" size="2">1.23</font>&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="18" align="right" height="18">$</td>
    <td width="74" align="right" height="18">2.27&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="18" align="right" height="18"><font face="Arial" size="2">$</font></td>
    <td width="74" align="right" height="18">2.15&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr>
    <td width="307" height="18">&nbsp; Adjusted</td>
    <td width="18" align="right" height="18">$</td>

    <td width="82" align="right" height="18"><font face="Arial">-&nbsp;&nbsp;&nbsp;&nbsp;</font></td>

    <td width="21" align="right" height="18">$</td>

    <td width="84" align="right" height="18"><font face="Arial" size="2">1.34</font>&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="18" align="right" height="18">$</td>
    <td width="74" align="right" height="18">-<font face="Arial" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;
</b>

      </font></td>
    <td width="18" align="right" height="18">$</td>
    <td width="74" align="right" height="18">2.37&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr>

<b>

    <td width="307" height="18"></td>
    <td width="18" align="right" height="18"></td>
    <td width="82" align="right" height="18"></td>
    <td width="21" align="right" height="18"></td>
    <td width="84" align="right" height="18"></td>
    <td width="18" align="right" height="18"></td>
    <td width="74" align="right" height="18"></td>
    <td width="18" align="right" height="18"></td>
    <td width="74" align="right" height="18"></td>
</b>

  </tr>
  <tr>
    <td width="307" height="18">Diluted earnings per share</td>

<b>

    <td width="18" align="right" height="18"></td>
    <td width="82" align="right" height="18"></td>

    <td width="21" align="right" height="18"></td>
    <td width="84" align="right" height="18"></td>
    <td width="18" align="right" height="18"></td>
    <td width="74" align="right" height="18"></td>
    <td width="18" align="right" height="18"></td>
    <td width="74" align="right" height="18"></td>
</b>

  </tr>
  <tr>
    <td width="307" height="18">&nbsp; Reported</td>
    <td width="18" align="right" height="18">$</td>
    <td width="82" align="right" height="18"><font face="Arial">1.23&nbsp;&nbsp;&nbsp;&nbsp;</font></td>

    <td width="21" align="right" height="18"><font face="Arial" size="2">$</font></td>
    <td width="84" align="right" height="18"><font face="Arial" size="2">1.16</font>&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="18" align="right" height="18">$</td>
    <td width="74" align="right" height="18">2.15<font face="Arial" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;
</b>

      </font></td>
    <td width="18" align="right" height="18">$</td>
    <td width="74" align="right" height="18">2.02&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr>
    <td width="307" height="18">&nbsp; Adjusted</td>
    <td width="18" align="right" height="18">$</td>

    <td width="82" align="right" height="18"><font face="Arial">-</font><font face="Arial" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;
</b>

      </font></td>

    <td width="21" align="right" height="18">$</td>

    <td width="84" align="right" height="18"><font face="Arial" size="2">1.26</font>&nbsp;&nbsp;&nbsp;&nbsp;</td>

    <td width="18" align="right" height="18">$</td>
    <td width="74" align="right" height="18">-<font face="Arial" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;
</b>

      </font></td>
    <td width="18" align="right" height="18">$</td>
    <td width="74" align="right" height="18">2.22&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
</table>

<p ALIGN="left"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; The changes in the carrying amount of goodwill for the
six months ended June 30, 2002, by segment are as follows:</font></p>

<b>

<table border="0" cellspacing="0" width="100%" cellpadding="0" style="font-family: Arial; font-size: 8pt" height="103">
  <tr>
    <td width="19%" height="18" valign="bottom"><font face="Arial" size="1">In Millions</font></td>
    <td width="1%" align="right" height="18"></td>
    <td width="7%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"><font size="1" face="Arial"><u>Otis</u></font></td>
    <td width="1%" align="center" height="18" style="position: relative" valign="bottom"></td>
    <td width="6%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"><font size="1" face="Arial">&nbsp;<u>Carrier</u></font></td>
    <td width="1%" align="center" height="18" style="position: relative" valign="bottom"></td>
    <td width="6%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"><font size="1" face="Arial">Pratt
      &amp; <u> Whitney</u></font></td>
    <td width="1%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"></td>
    <td width="6%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"><font size="1" face="Arial">Flight<br>
      <u>
      Systems</u></font></td>
    <td width="1%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"></td>
    <td width="6%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"><font size="1" face="Arial">Total<br>
      <u>
      Segments</u></font></td>
    <td width="1%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"></td>
    <td width="6%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"><font size="1" face="Arial">Eliminations<br>
      <u>and Other</u></font></td>
    <td width="1%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"></td>
    <td width="6%" align="center" height="18" style="position: relative" valign="bottom" class="botbord"><font size="1" face="Arial"><u>Total</u></font></td>
  </tr>
  <tr>
    <td width="19%" height="18"></td>
    <td width="1%" align="right" height="18"></td>
    <td width="7%" align="right" height="18"></td>
    <td width="1%" align="right" height="18"></td>
    <td width="6%" align="right" height="18"></td>
    <td width="1%" align="right" height="18"></td>
    <td width="6%" align="right" height="18"></td>
    <td width="1%" align="right" height="18"></td>
    <td width="6%" align="right" height="18"></td>
    <td width="1%" align="right" height="18"></td>
    <td width="6%" align="right" height="18"></td>
    <td width="1%" align="right" height="18"></td>
    <td width="6%" align="right" height="18"></td>
    <td width="1%" align="right" height="18"></td>
    <td width="6%" align="right" height="18"></td>
  </tr>
  <tr>
    <td width="19%" height="18"><font size="1" face="Arial">Balance as of
      January 1, 2002</font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="7%" align="right" height="18"><font size="1" face="Arial">727&nbsp;&nbsp;&nbsp;</font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="6%" align="right" height="18"><font size="1" face="Arial">2,012&nbsp;&nbsp;&nbsp;</font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="6%" align="right" height="18"><font size="1" face="Arial">367&nbsp;&nbsp;&nbsp;</font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="6%" align="right" height="18"><font size="1" face="Arial">3,696&nbsp;&nbsp;&nbsp;</font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="6%" align="right" height="18"><font size="1" face="Arial">6,802&nbsp;&nbsp;&nbsp;</font></td>

</b>
    <td width="1%" align="right" height="18"><font face="Arial" size="1">$</font></td>
    <td width="6%" align="right" height="18"><font size="1" face="Arial">- &nbsp;
      &nbsp;</font></td>

<b>

    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>

</b>
    <td width="6%" align="right" height="18"><font face="Arial" size="1">6,802&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="19%" height="18"><font face="Arial" size="1"></font>

    <font face="Arial" size="1">Goodwill resulting
      from business&nbsp;<br>
      &nbsp; combinations completed or
    finalized</font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="18"></td>

</b>

</font>

    <td width="7%" align="right" height="18"><font face="Arial" size="1"><br>
      </font>
</font>

</font></font><font face="Arial" size="1">3</font><font FACE="Arial" SIZE="2">
<font face="Arial" size="1"> &nbsp;&nbsp;&nbsp;</font></font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="18"></td>

</b>

</font>

    <td width="6%" align="right" height="18"><font face="Arial" size="1"><br>
      13&nbsp;&nbsp;&nbsp;</font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="18"></td>

</b>

</font>

    <td width="6%" align="right" height="18"><font face="Arial" size="1"><br>
      66&nbsp;&nbsp;&nbsp;</font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="18"></td>

</b>

</font>

    <td width="6%" align="right" height="18">
      <p align="right"><font face="Arial" size="1"><br>
      18 &nbsp;&nbsp;&nbsp;</font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="18"></td>

</b>

</font>

    <td width="6%" align="right" height="18" style="font-family: Arial; font-size: 8pt"><font face="Arial" size="1"><br>
      </font><font face="Arial" size="1">100</font><font FACE="Arial" SIZE="2"><font face="Arial" size="1">&nbsp;&nbsp;&nbsp;</font></font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="18"></td>

</b>

</font>

    <td width="6%" align="right" height="18"><font face="Arial" size="1"><br>
      - &nbsp;
      &nbsp;</font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="18"></td>

</b>

</font>

    <td width="6%" align="right" height="18"><font face="Arial" size="1"><br>
      </font><font face="Arial" size="1">100</font><font FACE="Arial" SIZE="2">
<font face="Arial" size="1"> &nbsp;&nbsp;&nbsp;</font></font></td>
  </tr>
  <tr>
    <td width="19%" height="14"><font face="Arial" size="1">Foreign currency translation and
      other</font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="14"></td>

</b>

</font>

    <td width="7%" align="right" height="14" class="botbord"><font face="Arial" size="1">27&nbsp;&nbsp;&nbsp;</font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="14"></td>

</b>

</font>

    <td width="6%" align="right" height="14" class="botbord"><font face="Arial" size="1">(4)&nbsp;&nbsp;</font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="14"></td>

</b>

</font>

    <td width="6%" align="right" height="14" class="botbord"><font face="Arial" size="1">-&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="14"></td>

</b>

</font>

    <td width="6%" align="right" height="14" class="botbord"><font face="Arial" size="1">1</font><font face="Arial" size="1">2</font><font FACE="Arial" SIZE="2">
<font face="Arial" size="1">
      &nbsp;&nbsp;&nbsp;</font></font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="14"></td>

</b>

</font>

    <td width="6%" align="right" height="14" class="botbord"><font face="Arial" size="1">3</font><font face="Arial" size="1">5</font><font FACE="Arial" SIZE="2"><font face="Arial" size="1">
      &nbsp;&nbsp;</font></font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="14" style="font-size: 8pt; font-family: Arial"></td>

</b>

</font>

    <td width="6%" align="right" height="14" class="botbord"><font face="Arial" size="1">(4)&nbsp;&nbsp;&nbsp;</font></td>
  <font FACE="Arial" SIZE="2">

<b>

    <td width="1%" align="right" height="14"></td>

</b>

</font>

    <td width="6%" align="right" height="14" class="botbord"><font face="Arial" size="1">3</font><font face="Arial" size="1">1</font><font FACE="Arial" SIZE="2"><font face="Arial" size="1">
      &nbsp;
      &nbsp;</font></font></td>
  </tr>
  <tr>
    <td width="19%" height="18"><font size="1" face="Arial">Balance as of June 30, 2002</font></td>
    <td width="1%" align="right" height="18">
<font size="1" face="Arial">$</font></td>
    <td width="7%" align="right" height="18" class="double" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font size="1" face="Arial">75</font><font size="1" face="Arial">7</font><font FACE="Arial" SIZE="2"><font size="1" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font></font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="6%" align="right" height="18" class="double" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font size="1" face="Arial">2,021&nbsp;&nbsp;&nbsp;</font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="6%" align="right" height="18" class="double" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font size="1" face="Arial">433&nbsp;&nbsp;&nbsp;</font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="6%" align="right" height="18" class="double" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font size="1" face="Arial">3,72</font><font size="1" face="Arial">6</font><font size="1" face="Arial"><font FACE="Arial" SIZE="2">&nbsp;</font>
    </font><font FACE="Arial" SIZE="2"><font size="1" face="Arial">&nbsp;&nbsp;</font></font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="6%" align="right" height="18" class="double" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="1">6,937&nbsp;
      &nbsp;&nbsp;</font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="6%" align="right" height="18" class="double" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="1">(4)&nbsp;
      &nbsp;</font></td>
    <td width="1%" align="right" height="18"><font size="1" face="Arial">$</font></td>
    <td width="6%" align="right" height="18" class="double" style="font-family: Arial; font-size: 8pt; border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font size="1" face="Arial">6,933
      &nbsp;&nbsp;&nbsp;</font></td>
  </tr>
</table>

<p ALIGN="JUSTIFY"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; The increase in
goodwill during the six months ended June 30, 2002 resulted primarily from
business combinations completed or finalized in the period, primarily aerospace
industry acquisitions at Pratt &amp; Whitney in the first quarter, Sikorsky's
acquisition of Derco in the second quarter, partially offset by the finalization of purchase
accounting adjustments for Hamilton Sundstrand's acquisition of Claverham.&nbsp;</font></p>
<font face="Arial" size="2">

<font face="Arial" size="2">
<p ALIGN="center">8</p>
<hr>
<b>

<p ALIGN="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>
</b>
</font></font>
<font face="Arial" size="2">

<font face="Arial" size="2">

<p ALIGN="JUSTIFY"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Identifiable
intangible assets as of June 30, 2002 are recorded in Other assets in the
Condensed Consolidated Balance Sheet and are comprised of:</p>
</font>
<table border="0" cellpadding="0" cellspacing="0" width="631" style="font-family: Arial; font-size: 10pt">
  <tr>
    <td width="266" colspan="2" valign="bottom" height="34"><font face="Arial" size="2">In
      Millions</font></td>
    <td width="13" align="right" height="34"></td>
    <td width="97" align="center" class="botbord" height="34"><font face="Arial" size="2">Gross<br>
      <u>
      Amount</u></font></td>
    <td width="13" align="center" height="34"></td>
    <td width="98" align="center" class="botbord" height="34"><font face="Arial" size="2">Accumulated<br>
      <u>
      Amortization</u></font></td>
    <td width="16" align="center" height="34"></td>
    <td width="114" align="center" height="34"><font face="Arial" size="2">Net<br>
      <u>
      Intangible Assets</u></font></td>
  </tr>
  <tr>
    <td width="11" height="21"></td>
    <td width="253" height="21"></td>
    <td width="13" align="right" height="21"></td>
    <td width="97" align="right" height="21"></td>
    <td width="13" align="right" height="21"></td>
    <td width="98" align="right" height="21"></td>
    <td width="16" align="right" height="21"></td>
    <td width="114" align="right" height="21"></td>
  </tr>
  <tr>
    <td width="266" colspan="2" height="21"><font face="Arial" size="2">Amortized
      Intangible Assets</font></td>
    <td width="13" align="right" height="21"></td>
    <td width="97" align="right" height="21"></td>
    <td width="13" align="right" height="21"></td>
    <td width="98" align="right" height="21"></td>
    <td width="16" align="right" height="21">&nbsp;</td>
    <td width="114" align="right" height="21"></td>
  </tr>
  <tr>
    <td width="11" height="20"></td>
    <td width="253" height="20"><font face="Arial" size="2">Purchased service contracts</font></td>
    <td width="13" align="right" height="20"><font face="Arial" size="2">$</font></td>
    <td width="97" align="right" height="20" style="font-family: Arial; font-size: 10pt">&nbsp;
      615&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="13" align="right" height="20"><font face="Arial" size="2">$</font></td>
    <td align="right" style="font-family: Arial; font-size: 10pt">(178)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="16" align="right" height="20">$</td>
    <td width="114" align="right" height="20" style="font-family: Arial; font-size: 10pt">437&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr>
    <td width="11" height="21"></td>
    <td width="253" height="21"><font face="Arial" size="2">Patents and trademarks</font></td>
    <td width="13" align="right" height="21"></td>
    <td width="97" align="right" height="21">150&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="13" align="right" height="21"></td>
    <td align="right" style="font-family: Arial; font-size: 10pt">(22)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="16" align="right" height="21"></td>
    <td width="114" align="right" height="21" style="font-family: Arial; font-size: 10pt">128&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr>
    <td></td>
    <td><font face="Arial" size="2">Other, principally customer relationships</font></td>
    <td align="right"></td>
    <td class="botbord" align="right" style="font-family: Arial; font-size: 10pt">76&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align="right" style="font-family: Arial; font-size: 10pt"></td>
    <td align="right" style="font-family: Arial; font-size: 10pt">(10)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align="right" style="font-family: Arial; font-size: 10pt"></td>
    <td align="right" style="font-family: Arial; font-size: 10pt">66&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr>
    <td width="11" height="26"></td>
    <td width="253" height="26"></td>
    <td width="13" align="right" height="26"><font face="Arial" size="2">$</font></td>
    <td width="99" class="double" align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" height="26">841&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="13" align="right" height="26"><font face="Arial" size="2">$</font></td>
    <td align="right" style="font-family: Arial; font-size: 10pt; border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">(210)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="16" align="right" height="26">$</td>
    <td width="116" align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" height="26">631&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
</table>
<p ALIGN="JUSTIFY"><font FACE="Arial" SIZE="2">&nbsp;&nbsp;&nbsp; Amortization of
intangible assets for the three and six months ended June 30, 2002 was $13
million and $23 million, respectively.&nbsp; Amortization
expense of these intangible assets for 2002 to 2006 is estimated to be
approximately $40 million per year.
<p><font face="Arial" size="2"><b>Restructuring</b></font></p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; During the first quarter of 2002, the Corporation recorded pre-tax
restructuring and related charges totaling $102 million, primarily in the
Carrier segment, related to ongoing cost reduction efforts.&nbsp;
These efforts focus principally on the consolidation of manufacturing,
sales and service facilities.&nbsp;</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The charges included accruals of $42 million for severance and related
employee termination costs, $38 million for asset write-downs, largely related
to the disposal of manufacturing assets and facilities that are no longer to be
utilized, and $12 million for facility exit and lease termination costs.&nbsp;
Related charges associated with restructuring actions totaling $10
million were also recorded in the first quarter, primarily in the Carrier
segment.&nbsp; The charges during the
first quarter were classified as $85 million recorded in cost of sales, $15
million in selling, general and administrative expenses, and $2 million in
financing revenues and other income, net.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The first quarter 2002 actions are expected to
result in net workforce reductions of approximately 1,600 salaried and hourly
employees, the elimination of approximately 1.2 million square feet of
facilities and the disposal of assets associated with exited facilities.&nbsp;
As of June 30, 2002, reductions of approximately 950 employees and
approximately one million square feet remain under the programs.&nbsp;
The programs are expected to be completed by the first quarter of 2003.&nbsp;
<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; During the second half of 2001, the Corporation recorded pre-tax charges
totaling $348 million associated with ongoing cost reduction efforts and to
address challenging market conditions in the commercial airline industry.&nbsp; Those programs are expected to result in net workforce
reductions of approximately 8,700 salaried and hourly employees, the elimination
of approximately 2.3 million square feet of facilities and the disposal of
assets associated with exited facilities.&nbsp; As
of June 30, 2002, reductions of approximately 1,800 employees and approximately
1.2 million square feet remain under the programs.&nbsp; The programs are expected to be completed in 2002.&nbsp;
</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; During the second quarter of 2002, approximately $27 million of severance
and related costs and $5 million of facility exit and lease termination accruals
were utilized under the 2001 and first quarter 2002 programs.&nbsp; As of June 30, 2002,
approximately $140 million of severance and related costs and $21 million of
facility exit and lease termination accruals remain under the 2001 and first
quarter 2002 programs.</p>

<p ALIGN="center">9</p>
<hr>

<font FACE="Arial" SIZE="2">
<b>

<p ALIGN="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>
</b>
</font>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; During the second quarter of 2002, the Corporation recorded charges
similar in nature to those noted above in connection with its continuing cost
reduction efforts.&nbsp; The amounts were
not material to the results of any individual segment or the Corporation's
consolidated financial position, results of operations or cash flows.
<p ALIGN="JUSTIFY"><b>Contingent Liabilities</b>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; There has been
no significant change in the Corporation's material contingencies during 2002.&nbsp;
Summarized below, however, are the matters previously described in Notes
1 and 14 of the Notes to Consolidated Financial Statements in the Corporation's
Annual Report, incorporated by reference in Form 10-K for calendar year 2001.
<p><u><font face="Arial" size="2">Environmental</font></u></p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The Corporation's operations are subject to
environmental regulation by federal, state and local authorities in the United
States and regulatory authorities with jurisdiction over its foreign operations.</p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Environmental investigatory, remediation, operating and maintenance costs
are accrued when it is probable that a liability has been incurred and the
amount can be reasonably estimated.&nbsp; The
most likely cost to be incurred is accrued based on an evaluation of currently
available facts with respect to each individual site, including existing
technology, current laws and regulations and prior remediation experience.&nbsp; Where no amount within a range of estimates is more likely,
the minimum is accrued.&nbsp; For sites
with multiple responsible parties, the Corporation considers its likely
proportionate share of the anticipated remediation costs and the ability of the
other parties to fulfill their obligations in establishing a provision for those
costs.&nbsp; Liabilities with fixed or
reliably determinable future cash payments are discounted.&nbsp;
Accrued environmental liabilities are not reduced by potential insurance
reimbursements.&nbsp; The Corporation
periodically reassesses these accrued amounts.&nbsp;
Management believes that the likelihood of incurring losses materially in
excess of amounts accrued is remote.</p>

<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; The Corporation has had insurance in force over its history with a number
of insurance companies and has pursued litigation seeking indemnity and defense
under these insurance policies in relation to its environmental liabilities.&nbsp;
In January 2002, the Corporation settled the last of these lawsuits under
an agreement providing for the Corporation to receive payments totaling
approximately $100 million over two years.&nbsp; This settlement was recorded as a reduction to cost of sales in the first
quarter of 2002. </p>
<p><u><font face="Arial" size="2">U.S. Government</font></u></p>
<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; 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.&nbsp; If the Corporation
or one of its business units were charged with wrongdoing as a result of any of
these investigations, they could be suspended from bidding on or receiving
awards of new government contracts pending the completion of legal proceedings.&nbsp;
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.&nbsp; Any contracts found to be
tainted by fraud could be voided by the government.
<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; The Corporation's contracts with the government are also subject to
audits.&nbsp; Like many defense
contractors, the Corporation has received audit reports that recommend that
certain contract prices should be reduced to comply with various government
regulations.&nbsp; Some of these audit
reports involve substantial amounts.&nbsp; The
Corporation has made voluntary refunds in those cases it believes appropriate.&nbsp;
In addition, the Corporation accrues for liabilities associated with
these matters that are probable and can be reasonably estimated.</p>
<p align="center"><font face="Arial" size="2">10</font></p>
<hr>

<font FACE="Arial" SIZE="2">
<b>

<p ALIGN="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>
</b>
</font>
<p><font face="Arial" size="2"><u>Other</u></font></p>
<font face="Arial" size="2">

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The
Corporation extends performance and operating cost guarantees beyond its normal
warranty and service policies for extended periods on some of its products,
particularly commercial aircraft engines.&nbsp; Liability
under such guarantees is contingent upon future product performance and
durability.&nbsp; In addition, the
Corporation incurs discretionary costs to service its products in connection
with product performance issues.&nbsp; The
Corporation has accrued its estimated liability that may result under these
guarantees and for service costs which are probable and can be reasonably
estimated.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The Corporation also has other commitments and contingent liabilities
related to legal proceedings and matters arising out of the normal course of
business.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The Corporation has accrued for environmental investigatory, remediation,
operating and maintenance costs, performance guarantees and other litigation and
claims based on management's estimate of the probable outcome of these
matters.&nbsp; While it is possible that the outcome of these matters may
differ from the recorded liability, management believes that resolution of these
matters will not have a material impact on the Corporation's financial
position, results of operations or cash flows.</p>

<b>

<p ALIGN="JUSTIFY"><b><font SIZE="2" face="Arial">Earnings Per Share</font>
</b>

</p>
  </b>

<table border="0" cellspacing="1" style="font-family: Arial; font-size: 10pt"><font SIZE="2" face="Arial">
  <tr>
    <td width="261"></td>

<td width="206" align="center" colspan="4"><font SIZE="2" face="Arial">
  <b>Quarter Ended<br>
  June 30,</b></font></td>

<td width="13" align="right"></td>

<td width="207" colspan="3" align="center">
  <b>Six Months Ended<br>
  June 30,</b></td>
    </tr>
  <tr>
    <td width="261">In Millions (except per share amounts)</td>

<td width="11" align="right"></td>

<td width="92">
  <p align="center"><b><u>2002</u></b></td>

<td width="12" align="right"></td>

<td width="91">
  <p align="center"><b><u>2001</u></b></td>

<td width="13" align="right"></td>

<td width="93">
  <p align="center"><b><u>2002</u></b></td>

<td width="21" align="right"></td>

<td width="93">
  <p align="center"><b><u>2001</u></b></td>
    </tr>

<b>

    <tr>
      <td width="261"></td>
      <td width="11" align="right"></td>
      <td width="92"></td>
      <td width="12" align="right"></td>
      <td width="91"></td>
      <td width="13" align="right"></td>
      <td width="93"></td>
      <td width="21" align="right"></td>
      <td width="93"></td>
    </tr>
  </b>

    <tr>
      <td width="261">Net income</td>
      <td width="11" align="right"><font SIZE="2" face="Arial">
  $</font></td>

      <td width="92" align="right">624<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

      <td width="12" align="right"><font SIZE="2" face="Arial">
  $</font></td>
      <td width="91">
        <p align="right">588&nbsp;&nbsp;&nbsp;&nbsp;</td>

      <td width="13" align="right"><font SIZE="2" face="Arial">
  $</font></td>

      <td width="93" align="right">1,091<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

      <td width="21" align="right"><font SIZE="2" face="Arial">
  $</font></td>
      <td width="93" align="right">1,028&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>

    <tr>
      <td width="261">Less:&nbsp; ESOP Stock dividends</td>

<b>

      <td width="11" align="right"></td>
  </b>

      <td width="92" style="border-bottom-style: solid; border-bottom-width: thin" align="right">&nbsp;&nbsp;(8)<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="12" align="right"></td>
  </b>

      <td width="91" style="border-bottom-style: solid; border-bottom-width: thin">
        <p align="right">(8)<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="13" align="right"></td>
  </b>

      <td width="93" style="border-bottom-style: solid; border-bottom-width: thin" align="right">&nbsp;&nbsp;(16)<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="21" align="right"></td>
  </b>

      <td width="93" align="right" style="border-bottom-style: solid; border-bottom-width: thin">(16)<font SIZE="2" face="Arial">&nbsp;
        &nbsp;&nbsp;</font>

      </td>
    </tr>

    <tr>
      <td width="261">Basic earnings</td>

<b>

      <td width="11" align="right"></td>
  </b>

      <td width="92" align="right">616<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="12" align="right"></td>
  </b>

      <td width="91">
        <p align="right">580&nbsp;&nbsp;&nbsp;&nbsp;</td>

<b>

      <td width="13" align="right"></td>
  </b>

      <td width="93" align="right">1,075<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="21" align="right"></td>
  </b>

      <td width="93" align="right">1,012&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>

    <tr>
      <td width="261">ESOP Stock adjustment</td>

<b>

      <td width="11" align="right"></td>
  </b>

      <td width="92" align="right">8<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="12" align="right"></td>
  </b>

      <td width="91" align="right">7&nbsp;&nbsp;&nbsp;&nbsp;</td>

<b>

      <td width="13" align="right"></td>
  </b>

      <td width="93" align="right">15<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="21" align="right"></td>
  </b>

      <td width="93" align="right">14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>

    <tr>
      <td width="261">Diluted earnings</td>

      <td width="11" align="right">$</td>

      <td width="92" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" align="right">&nbsp;&nbsp;624<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

      <td width="12" align="right">$</td>
      <td width="91" align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">587&nbsp;&nbsp;&nbsp;&nbsp;</td>
      <td width="13" align="right">$</td>

      <td width="93" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" align="right">&nbsp;&nbsp;1,090<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

      <td width="21" align="right">$</td>
      <td width="93" align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">1,026&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>

<b>

    <tr>
      <td width="261"></td>
      <td width="11" align="right"></td>
      <td width="92"></td>
      <td width="12" align="right"></td>
      <td width="91" align="right"></td>
      <td width="13" align="right"></td>
      <td width="93"></td>
      <td width="21" align="right"></td>
      <td width="93" align="right"></td>
    </tr>
  </b>

    <tr>
      <td width="261">Average shares:</td>

<b>

      <td width="11" align="right"></td>
      <td width="92"></td>
      <td width="12" align="right"></td>
      <td width="91" align="right"></td>
      <td width="13" align="right"></td>
      <td width="93"></td>
      <td width="21" align="right"></td>
      <td width="93" align="right"></td>
    </tr>
  </b>

    <tr>
      <td width="261">&nbsp; Basic</td>

<b>

      <td width="11" align="right"></td>
  </b>

      <td width="92" align="right">473<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="12" align="right"></td>
  </b>

      <td width="91" align="right">471&nbsp;&nbsp;&nbsp;&nbsp;</td>

<b>

      <td width="13" align="right"></td>
  </b>

      <td width="93" align="right">47<font SIZE="2" face="Arial">3&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="21" align="right"></td>
  </b>

      <td width="93" align="right">471&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>

    <tr>
      <td width="261">&nbsp; Stock awards</td>

<b>

      <td width="11" align="right"></td>
  </b>

      <td width="92" align="right">8<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="12" align="right"></td>
  </b>

      <td width="91" align="right">10&nbsp;&nbsp;&nbsp;&nbsp;</td>

<b>

      <td width="13" align="right"></td>
  </b>

      <td width="93" align="right">8<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="21" align="right"></td>
  </b>

      <td width="93" align="right">11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>

    <tr>
      <td width="261">&nbsp; ESOP Stock</td>

<b>

      <td width="11" align="right"></td>
  </b>

      <td width="92" align="right">26<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="12" align="right"></td>
  </b>

      <td width="91" align="right">26&nbsp;&nbsp;&nbsp;&nbsp;</td>

<b>

      <td width="13" align="right"></td>
  </b>

      <td width="93" align="right">26<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="21" align="right"></td>
  </b>

      <td width="93" align="right">26&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>

    <tr>
      <td width="261">&nbsp; Diluted</td>

<b>

      <td width="11" align="right"></td>
  </b>

      <td width="92" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" align="right">&nbsp;&nbsp;507<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="12" align="right"></td>
  </b>

      <td width="91" align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">507&nbsp;&nbsp;&nbsp;&nbsp;</td>

<b>

      <td width="13" align="right"></td>
  </b>

      <td width="93" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick" align="right">&nbsp;&nbsp;507<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

<b>

      <td width="21" align="right"></td>
  </b>

      <td width="93" align="right" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">508&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>

<b>

    <tr>
      <td width="261"></td>
      <td width="11" align="right"></td>
      <td width="92" align="right"></td>
      <td width="12" align="right"></td>
      <td width="91" align="right"></td>
      <td width="13" align="right"></td>
      <td width="93" align="right"></td>
      <td width="21" align="right"></td>
      <td width="93" align="right"></td>
    </tr>
  </b>

    <tr>
      <td width="261">Earnings per share of Common Stock:</td>

<b>

      <td width="11" align="right"></td>
      <td width="92" align="right"></td>
      <td width="12" align="right"></td>
      <td width="91" align="right"></td>
      <td width="13" align="right"></td>
      <td width="93" align="right"></td>
      <td width="21" align="right"></td>
      <td width="93" align="right"></td>
    </tr>
  </b>

    <tr>
      <td width="261">&nbsp; Basic</td>

      <td width="11" align="right">$</td>

      <td width="92" align="right">1.30<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

      <td width="12" align="right">$</td>
      <td width="91" align="right">1.23&nbsp;&nbsp;&nbsp;&nbsp;</td>
      <td width="13" align="right">$</td>

      <td width="93" align="right">2.27<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>

      <td width="21" align="right">$</td>
      <td width="93" align="right">2.15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>

    <tr>
      <td width="261">&nbsp; Diluted</td>

      <td width="11" align="right">$</td>


      <td width="92" align="right">1.23<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>
      <td width="12" align="right">$</td>
      <td width="91" align="right">1.16&nbsp;&nbsp;&nbsp;&nbsp;</td>
      <td width="13" align="right">$</td>


      <td width="93" align="right">2.15<font SIZE="2" face="Arial">&nbsp;&nbsp;&nbsp;&nbsp;</font>

      </td>
      <td width="21" align="right">$</td>
      <td width="93" align="right">2.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>
  </table>
<p><b>Segment Financial Data</b></p>
<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; The Corporation's operations are classified into four principal
segments:&nbsp; Otis, Carrier, Pratt
&amp; Whitney and Flight Systems.&nbsp; Those
segments are generally determined based upon the management of the business and
on the basis of separate groups of operating companies, each with general
operating autonomy over diversified products and services.&nbsp;
</p>
<p ALIGN="center"><font face="Arial" size="2">11
</p>
  <hr>
<b>

<p ALIGN="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>
</b>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Segment
financial data include the results of all majority-owned businesses, consistent
with the management reporting of these businesses.&nbsp; For certain of these subsidiaries, minority shareholders have rights,
which under the provisions of Emerging Issues Task Force (&quot;EITF&quot;)
96-16, overcome the presumption of consolidation.&nbsp; In the Corporation's consolidated results, these
subsidiaries are accounted for using the equity method of accounting.&nbsp; Adjustments to reconcile segment reporting to consolidated
results are included in "Eliminations and other," which also includes
certain small subsidiaries.
</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Segment
information for the quarter and six-month period ended June 30, 2002 and 2001
are included in Management's Discussion and Analysis in the &quot;Results of
Continuing Operations - Segment
Review" section.</p>
<p><b>Recent Accounting Guidance</b></p>
<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; In June 2001, Statement of Financial Accounting Standards
(&quot;SFAS&quot;) No. 143,
"Accounting for Asset Retirement Obligations" was issued.&nbsp;
The standard requires that legal obligations associated with the
retirement of long-lived intangible assets be recorded at fair value when
incurred and will be effective for the Corporation on January 1, 2003.&nbsp;
The adoption of this statement will not have a material impact on the
Corporation's consolidated financial position, results of operations or cash
flows.</p>

<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; In
April 2002, SFAS No. 145, &quot;Rescission of FASB Statements No. 4, 44 and 64,
Amendment of FASB Statement No. 13, and Technical Corrections&quot; was issued.&nbsp;
This statement provides guidance on the classification of gains and
losses from the extinguishment of debt and on the accounting for certain
specified lease transactions.&nbsp; The adoption of this statement will not have a material
impact on the Corporation's consolidated financial position, results of
operations or cash flows.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</p>
<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; In
June 2002, SFAS No. 146, &quot;Accounting for Costs Associated with Exit or Disposal Activities&quot;
was issued.&nbsp; This statement provides
guidance on the recognition and measurement of liabilities associated with
disposal activities and is effective for the Corporation on January 1, 2003.&nbsp;
The Corporation is currently reviewing the provisions of SFAS No. 146 to
determine the standard's impact upon adoption.&nbsp;&nbsp;</p>

      <p align="center">12</p>

<b>

<i>

<hr>

</i>

<p ALIGN="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>
</b>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; With respect
to the unaudited condensed consolidated financial information of United
Technologies Corporation for the quarters and six-month periods ended June 30,
2002 and 2001, PricewaterhouseCoopers LLP (&quot;PricewaterhouseCoopers&quot;)
reported that they have applied limited procedures in accordance with
professional standards for a review of such information.&nbsp;
However, their report dated July 17, 2002, appearing below, states that
they did not audit and they do not express an opinion on that unaudited
condensed consolidated financial information.&nbsp;
PricewaterhouseCoopers has not carried out any significant or additional
audit tests beyond those which would have been necessary if their report had not
been included.&nbsp; Accordingly, the
degree of reliance on their report on such information should be restricted in
light of the limited nature of the review procedures applied.&nbsp;
PricewaterhouseCoopers is not subject to the liability provisions of
Section 11 of the Securities Act of 1933 (&quot;the Act&quot;) for their report
on the unaudited condensed consolidated financial information because that
report is not a &quot;report&quot; or a &quot;part&quot; of a registration
statement prepared or certified by PricewaterhouseCoopers within the meaning of
Sections 7 and 11 of the Act.</p>

<p align="center"><u><b>REPORT OF INDEPENDENT AUDITORS</b></u></p>
<p>To the Shareowners of<br>
&nbsp; United Technologies Corporation</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; We
have reviewed the accompanying condensed consolidated statement of operations of
United Technologies Corporation and its consolidated subsidiaries for the
quarters and six months ended June&nbsp;30, 2002 and 2001, the condensed
consolidated statement of cash flows for the six months ended June 30, 2002 and
2001, and the condensed consolidated balance sheet as of June 30, 2002.&nbsp;
This financial information is the responsibility of the Corporation's
management.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants.&nbsp;
A review of interim financial information consists principally of
applying analytical procedures to financial data and making inquiries of persons
responsible for financial and accounting matters.&nbsp;
It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole.&nbsp; Accordingly,
we do not express such an opinion.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial information
for it to be in conformity with accounting principles generally accepted in the
United States of America.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; We previously audited in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet as of
December 31, 2001, and the related consolidated statements of operations, of
changes in shareowners' equity and of cash flows for the year then ended (not
presented herein), and in our report dated January 17, 2002, we expressed an
unqualified opinion on those consolidated financial statements.&nbsp;
In our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 2001, is fairly stated in all
material respects in relation to the consolidated balance sheet from which it
has been derived.
<p>/s/
PricewaterhouseCoopers LLP<br>
PricewaterhouseCoopers
LLP<br>
Hartford, Connecticut<br>
July 17, 2002</p>
<p align="center">&nbsp;13</p>

<b>

<i>

<hr>

</i>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

<p>&nbsp;&nbsp;&nbsp; Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Position</p>

<p align="center">BUSINESS ENVIRONMENT</p>

</b>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The
Corporation's operations are classified into four principal segments:&nbsp;
Otis, Carrier, Pratt &amp; Whitney and Flight Systems.&nbsp;
Otis and Carrier serve customers in the commercial and residential
property industries.&nbsp; Carrier also
serves commercial and transport refrigeration customers.&nbsp;
Pratt &amp; Whitney and the Flight Systems segment, which includes
Sikorsky Aircraft (&quot;Sikorsky&quot;) and Hamilton Sundstrand, primarily
serve commercial and government customers in the aerospace industry.</p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; For discussion of the Corporation's business environment, refer to the
discussion of &quot;Business Environment&quot; in the Management's Discussion
and Analysis of Results of Operations and Financial Position in the
Corporation's Annual Report incorporated by reference in Form 10-K for calendar
year 2001.&nbsp; The current status of
significant factors impacting the Corporation's business environment in 2002
is discussed below.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; As worldwide businesses, the Corporation's operations are affected by
global and regional industry, economic and political factors.&nbsp;
Current conditions in the commercial airline industry, retail and
transport refrigeration industries and commercial HVAC and construction markets
had a negative impact on the Corporation's consolidated results and are
expected to continue to present challenges to the Corporation's businesses
operating in these markets.&nbsp; In addition, the defense portion of the Corporation's
aerospace businesses is affected by changes in market demand and the global
political environment.&nbsp; The Corporation's participation in long-term
production and development programs for the U.S. government has contributed to
the Corporation's results in the first six months of 2002 and is expected to
continue for the remainder of 2002. During the
first six months of 2002, foreign currencies had a slightly favorable impact on the
Corporation's consolidated results due primarily to the strengthening of the
Euro in relation to the U.S. dollar during the second quarter of 2002.&nbsp; In general, the diversity of the Corporation's businesses and
global market presence has helped, and is expected to continue to help, limit
the impact of any one industry or the economy of any single country on the
consolidated results. </p>

<i>

<p ALIGN="JUSTIFY"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp; </font></i><font face="Arial" size="2">The Corporation's growth strategy contemplates acquisitions in its core
businesses.&nbsp; The
rate and extent to which appropriate acquisition opportunities are available and
to which acquired businesses are integrated and anticipated synergies or cost
savings are achieved can affect the Corporation's operations and results.</p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Traffic growth, load factors, worldwide profits, and general economic
activity have historically been reliable indicators for new aircraft and
aftermarket orders in the aerospace industry.&nbsp;
Spare part sales and aftermarket service trends can be impacted by
factors including usage, pricing, regulatory changes and retirement of older
aircraft.&nbsp; Performance in the
general aviation sector has been closely tied to the overall health of the
economy and is positively correlated to corporate profits.&nbsp;
Airline operations continue to be negatively impacted by the disruption
caused by the September 2001 attacks.&nbsp; These conditions have resulted in reduced flight schedules,
an increased number of idle aircraft, workforce reductions and declining
financial performance within the airline industry.&nbsp;
Airlines and aircraft manufacturers have continued to reduce supplier
bases and seek lower cost packages.&nbsp; These
conditions have resulted in decreased commercial aerospace volume and orders in
the Corporation's aerospace businesses and are expected to continue for the
remainder of 2002.</p>

<p align="center">14</p>
<i>
<hr>

</i>

<b>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

</b>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The Corporation's products and services are regulated by strict safety
and performance standards, particularly in the commercial engine business.&nbsp;
These standards can create uncertainty regarding the profitability of
commercial engine programs.
</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; There have been no other significant changes in the Corporation's
business environment during the first six months of 2002.
</p>
<p align="center"><b>RESULTS
OF CONTINUING OPERATIONS</b></p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Consolidated
revenues were $7.3 billion in the second quarter of 2002, level with the same
period of 2001, and $13.7 billion for the first six months of 2002, a decrease
of $305 million (2%) from the prior year. The decrease reflects lower volume at
Carrier and Pratt &amp; Whitney, largely in the Power Systems business,
partially offset by growth at Otis.
</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Gross margin as a percentage of sales was flat (28.6%) in the second
quarter of 2002 compared with the same period of 2001 reflecting the margin
impact of reduced volume, largely offset by the absence of goodwill amortization
in 2002.&nbsp; Gross margin increased
nine tenths of a percent to 28.8% in the six-month period of 2002
compared to the same period of 2001.&nbsp; The
six-month increase also reflects the benefit of an approximate $100 million
settlement of environmental claims and the favorable impact of commercial engine
contract changes at Pratt &amp; Whitney, partially offset by the first quarter
of 2002 restructuring charges of $85 million.&nbsp; Gross margin in the second quarter and six-month period
of 2002 also benefited
from previous cost reduction actions.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Research and development spending decreased $33 million (10%) in the
second quarter and increased $8 million (1%) for the six-month period of 2002
compared to 2001. The second quarter decrease is primarily associated with cost
reduction actions at Carrier and at Pratt &amp; Whitney, reflecting the variable nature of engineering development
program schedules.&nbsp;
The six-month increase reflects costs associated with Pratt &amp;
Whitney's PW6000 program and Sikorsky's S/H-92 program, primarily in the
first quarter of 2002, partially offset by cost reduction actions at Carrier.&nbsp;
As a percentage of sales, research and development was 4.2% and 4.7% in
the second quarter and six-month period of 2002, as compared to 4.7% and 4.6% in
the same periods of 2001.&nbsp; Research
and development is expected to be in the range of 4% to 5% of sales in 2002.
</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Selling, general and administrative expenses decreased $23 million (3%)
and $54 million (3%) in the second quarter and six-month period of 2002 compared
to the same period of 2001.&nbsp; The
decrease is primarily the result of cost reduction actions, principally at
Carrier partially offset by restructuring charges of $15 million recorded in the
first quarter of 2002. As a percentage of sales, these expenses were 11.0% and
11.4% in the second quarter and six-month period of 2002, as compared to 11.3%
and 11.6% in the same periods of 2001.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Interest expense decreased $13 million (12%) and $21 million (10%) in the
second quarter and six-month period of 2002 compared to 2001.&nbsp; The decrease is due primarily to lower short-term borrowings in 2002.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The effective income tax rate for the second quarter and six-month period
of 2002 was 28.4% as compared to 29.7% and 30.0% for the same periods of 2001.
The reduction in the Corporation's effective tax rate for the second quarter
and six-month period of 2002 is due primarily to an increase in pre-tax income
from discontinuing amortization of non-deductible goodwill in accordance with
Statement of Financial Accounting Standards No. 142 (&quot;SFAS 142&quot;).&nbsp;
The effective tax rate for the second quarter and first six months of
2001, adjusted for the impact of SFAS 142, was 28.3% and 28.4%.</p>
<p align="center">15</p>
<i>
<hr>

</i>

</font></font>


</font></font></font></font></font></font></font></font></font></font></font></font></font>

<font FACE="Arial" SIZE="2">

<b>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

</b>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Net income increased
$36 million (6%) and $63 million (6%) for the second quarter and six-month
period of 2002 when compared with the same periods in 2001.&nbsp; Diluted earnings per share increased $.07 (6%) and $.13 (6%) for the
second quarter and six-month period of 2002 when compared with the same periods
in 2001.&nbsp; Both net income and
diluted earnings per share for 2002 include the impact of discontinuing
amortization of goodwill in accordance with SFAS 142.&nbsp; Net income for the second quarter and six-month period of 2001, adjusted
to exclude amounts no longer being amortized, was $641 million and $1,133
million.&nbsp; Diluted earnings per share for the second quarter and six-month
period of 2001, adjusted to exclude amounts no longer being amortized, were $1.26 and $2.22.</p>
<p><b>Restructuring Costs</b></p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; As
described in the Notes to Condensed Consolidated Financial Statements, during
the quarter ended March 31, 2002, the Corporation recorded pre-tax restructuring
and related charges totaling $102 million, primarily at Carrier, associated with
ongoing cost
reduction efforts.&nbsp; These efforts
focus principally on the consolidation of manufacturing, sales and service
facilities.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The charges included accruals of $42 million for severance and related
employee termination costs, $38 million for asset write-downs, largely related
to the disposal of manufacturing assets and facilities that are no longer to be
utilized, and $12 million for facility exit and lease termination costs.&nbsp;
Related charges associated with restructuring actions totaling $10
million were also recorded in the first quarter, primarily in the Carrier
segment.&nbsp; The charges during the
first quarter were classified as $85 million recorded in cost of sales, $15
million in selling, general and administrative expenses, and $2 million in
financing revenues and other income, net.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The first quarter 2002 actions are expected to result
in net workforce reductions of approximately 1,600 salaried and hourly
employees, the elimination of approximately 1.2 million square feet of
facilities and the disposal of assets associated with exited facilities.&nbsp;
During the year, the Corporation has incurred pre-tax cash outflows
related to the 2002 programs of approximately $14 million, which were funded by
cash generated from operations.&nbsp; Savings
are expected to increase over a two-year period resulting in recurring pre-tax
savings of approximately $80 million annually.&nbsp;
As of June 30, 2002, reductions of approximately 950 employees and
approximately one million square feet remain under the programs.&nbsp;
The programs are expected to be completed by the first quarter of 2003.
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; During the second half of 2001, the Corporation recorded pre-tax charges
of $348 million associated with ongoing cost reduction efforts and to address
challenging market conditions in the commercial airline industry.&nbsp;
In the current year, the Corporation has incurred pre-tax cash outflows
related to the 2001 programs of approximately $80 million, which were funded by
cash generated from operations.&nbsp; Recurring
pre-tax savings, associated primarily with the net reduction in workforce and
facility closures, are expected to increase over a two-year period to
approximately $300 million annually.&nbsp; As
of June 30, 2002, reductions of approximately 1,800 employees and approximately
1.2 million square feet remain under the programs.&nbsp;
The programs are expected to be completed by the end of 2002.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; During the second quarter of 2002, approximately $27 million of severance
and related costs and $5 million of facility exit and lease termination accruals
were utilized under the 2001 and first quarter 2002 programs.&nbsp; As of June 30, 2002, approximately $140 million of severance and related
costs and $21 million of facility exit and lease termination accruals remain
under the 2001 and first quarter 2002 programs.
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; During the second quarter of 2002, the Corporation recorded charges
similar in nature to those noted above in connection with its continuing cost
reduction efforts.&nbsp; The amounts were
not material to the results of any individual segment or the Corporation's
consolidated financial position, results of operations or cash flows.&nbsp;
</p>

<p ALIGN="center">16</p>

<b>

<hr>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

<p>Segment
Review&nbsp;</p>

</b>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Revenues,
operating profits and operating profit margins of the Corporation's principal
segments include the results of all majority-owned subsidiaries, consistent with
the management reporting of these businesses.&nbsp;
Adjustments to reconcile segment reporting to consolidated results are
included in &quot;Eliminations and other,&quot; which also includes certain
small subsidiaries.&nbsp; Results for the
quarter and six-month periods ended June 30, 2002 and 2001 are as follows:

<p ALIGN="JUSTIFY">&nbsp;


<table border="0" cellspacing="1" height="392" style="font-family: Arial; font-size: 10pt" width="704">
  <tr>
    <td width="197" nowrap height="21"><br>

<font face="Arial" size="1">In
Millions of Dollars</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="131" align="center" height="21" colspan="3" valign="bottom" class="botbord"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Revenues</b></td>
    <td width="12" align="center" height="21" valign="bottom"></td>
    <td width="120" align="center" height="21" colspan="3" valign="bottom" class="botbord"><b>&nbsp;&nbsp;&nbsp;
      Operating Profits</b></td>
    <td width="14" align="center" height="21"></td>
    <td width="166" align="center" height="21" colspan="3" class="botbord" valign="bottom"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Operating<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Profit Margin</b></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2"><b>Quarter Ended
      June 30,</b></font></td>
    <td width="9" align="right" height="21"></td>
    <td width="53" align="right" height="21"><font face="Arial" size="2"><b><u>2002</u>&nbsp;&nbsp;</b></font></td>
    <td width="10" align="right" height="21"></td>
    <td width="56" align="right" height="21"><font face="Arial" size="2"><b><u>2001</u>&nbsp;&nbsp;</b></font></td>
    <td width="12" align="right" height="21"></td>
    <td width="57" align="right" height="21"><font face="Arial" size="2"><b><u>2002</u>&nbsp;&nbsp;</b></font></td>
    <td width="17" align="right" height="21">
      <p align="left"></td>
    <td width="45" align="right" height="21"><font face="Arial" size="2"><b><u>2001</u>*&nbsp;&nbsp;</b></font></td>
    <td width="14" align="right" height="21"></td>
    <td width="77" align="right" height="21">
      <p align="right"><font face="Arial" size="2"><b><u>2002</u>&nbsp;&nbsp;&nbsp;</b></font></p>
    </td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"><font face="Arial" size="2"><b><u>2001</u>*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21">&nbsp;&nbsp;</td>
    <td width="9" align="right" height="21"></td>
    <td width="53" align="right" height="21"></td>
    <td width="10" align="right" height="21"></td>
    <td width="56" align="right" height="21"></td>
    <td width="12" align="right" height="21"></td>
    <td width="57" align="right" height="21"></td>
    <td width="17" align="right" height="21"></td>
    <td width="45" align="right" height="21"></td>
    <td width="14" align="right" height="21"></td>
    <td width="77" align="right" height="21"></td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2">&nbsp; Otis</font></td>
    <td width="9" align="right" height="21">$</td>
    <td width="53" align="right" height="21"><font face="Arial" size="2">&nbsp;1,680&nbsp;</font></td>
    <td width="10" align="right" height="21">$</td>
    <td width="56" align="right" height="21"><font face="Arial" size="2">1,537&nbsp;</font></td>
    <td width="12" align="right" height="21">$</td>
    <td width="57" align="right" height="21">263&nbsp;&nbsp;</td>
    <td width="17" align="right" height="21">$</td>
    <td width="45" align="right" height="21"><font face="Arial" size="2">223&nbsp;&nbsp;</font></td>
    <td width="14" align="right" height="21"></td>
    <td width="77" align="right" height="21">15.7%&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"><font face="Arial" size="2">14.5%&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2">&nbsp;
      Carrier</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="53" align="right" height="21"><font face="Arial" size="2">&nbsp;2,541&nbsp;</font></td>
    <td width="10" align="right" height="21"></td>
    <td width="56" align="right" height="21"><font face="Arial" size="2">2,613&nbsp;&nbsp;</font></td>
    <td width="12" align="right" height="21"></td>
    <td width="57" align="right" height="21">335&nbsp;&nbsp;</td>
    <td width="17" align="right" height="21"></td>
    <td width="45" align="right" height="21"><font face="Arial" size="2">317&nbsp;&nbsp;</font></td>
    <td width="14" align="right" height="21"></td>
    <td width="77" align="right" height="21">13.2%&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21">12.1<font face="Arial" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2">&nbsp; Pratt
      &amp; Whitney</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="53" align="right" height="21"><font face="Arial" size="2">&nbsp;1,875&nbsp;</font></td>
    <td width="10" align="right" height="21"></td>
    <td width="56" align="right" height="21"><font face="Arial" size="2">1,957&nbsp;&nbsp;</font></td>
    <td width="12" align="right" height="21"></td>
    <td width="57" align="right" height="21">335&nbsp;&nbsp;</td>
    <td width="17" align="right" height="21"></td>
    <td width="45" align="right" height="21"><font face="Arial" size="2">353&nbsp;&nbsp;</font></td>
    <td width="14" align="right" height="21"></td>
    <td width="77" align="right" height="21">17.9%&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"><font face="Arial" size="2">18.0%&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="20"><font face="Arial" size="2">&nbsp; Flight
      Systems</font></td>
    <td width="9" align="right" height="20"></td>
    <td width="55" align="right" class="botbord" height="20" style="border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">&nbsp;1,379&nbsp;</font></td>
    <td width="10" align="right" height="20"></td>
    <td width="58" align="right" class="botbord" height="20" style="border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">1,337&nbsp;&nbsp;</font></td>
    <td width="12" align="right" height="20"></td>
    <td width="59" align="right" class="botbord" height="20" style="border-bottom-style: solid; border-bottom-width: thin">192&nbsp;&nbsp;</td>
    <td width="17" align="right" height="20"></td>
    <td width="47" align="right" height="20" class="botbord" style="border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">179&nbsp;&nbsp;</font></td>
    <td width="14" align="right" height="20"></td>
    <td width="77" align="right" height="20">13.9%&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="2" align="right" height="20"></td>
    <td width="75" align="right" height="20"><font face="Arial" size="2">13.4%&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2">&nbsp; Total
      segment</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="53" align="right" height="21"><font face="Arial" size="2">7,475&nbsp;</font></td>
    <td width="10" align="right" height="21"></td>
    <td width="56" align="right" height="21"><font face="Arial" size="2">7,444&nbsp;&nbsp;</font></td>
    <td width="12" align="right" height="21"></td>
    <td width="57" align="right" height="21">1,125&nbsp;</td>
    <td width="17" align="right" height="21"></td>
    <td width="45" align="right" height="21"><font face="Arial" size="2">1,072&nbsp;&nbsp;</font></td>
    <td width="14" align="right" height="21"></td>
    <td width="77" align="right" height="21">15.1%&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"><font face="Arial" size="2">14.4%&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2">&nbsp;
      Eliminations and other</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="53" align="right" height="21">(151)</td>
    <td width="10" align="right" height="21"></td>
    <td width="56" align="right" height="21"><font face="Arial" size="2">(112)&nbsp;</font></td>
    <td width="12" align="right" height="21"></td>
    <td width="57" align="right" height="21">(40)&nbsp;</td>
    <td width="17" align="right" height="21"></td>
    <td width="45" align="right" height="21"><font face="Arial" size="2">(29)&nbsp;</font></td>
    <td width="14" align="right" height="21"></td>
    <td width="77" align="right" height="21"></td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"></td>
  </tr>
  <tr>
    <td width="197" nowrap height="23">
      <p align="left"><font face="Arial" size="2">&nbsp; General corporate expenses</font></p>
    </td>
    <td width="9" align="right" height="23"></td>
    <td width="53" align="right" class="botbord" height="23">
      <p align="right"><font face="Arial" size="2">-&nbsp;&nbsp;</font></td>
    <td width="10" align="right" height="23"></td>
    <td width="56" align="right" height="23">
      <p class="botbord">-&nbsp;&nbsp;</td>
    <td width="12" align="right" height="23">
      <p align="right"></p>
    </td>
    <td width="57" align="right" class="botbord" height="23">(54)&nbsp;</td>
    <td width="17" align="right" height="23"></td>
    <td width="45" align="right" class="botbord" height="23"><font face="Arial" size="2">(54)&nbsp;</font></td>
    <td width="14" align="right" height="23"></td>
    <td width="77" align="right" height="23"></td>
    <td width="2" align="right" height="23"></td>
    <td width="75" align="right" height="23"></td>
  </tr>
  <tr>
    <td width="197" nowrap height="24"><font face="Arial" size="2">&nbsp;
      Consolidated</font></td>
    <td width="9" align="right" height="24"><font face="Arial" size="2">$</font></td>
    <td width="55" align="right" class="double" height="24" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">7,324</td>
    <td width="10" align="right" height="24">$</td>
    <td width="58" align="right" class="double" height="24" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">7,332&nbsp;&nbsp;</font></td>
    <td width="12" align="right" height="24"></td>
    <td width="59" align="right" height="24" style="border-top-style: solid; border-top-width: thin">1,031&nbsp;</td>
    <td width="17" align="right" height="24"></td>
    <td width="47" align="right" height="24" style="border-top-style: solid; border-top-width: thin"><font face="Arial" size="2">989&nbsp;&nbsp;</font></td>
    <td width="14" align="right" height="24"></td>
    <td width="77" align="right" height="24"></td>
    <td width="2" align="right" height="24"></td>
    <td width="75" align="right" height="24"></td>
  </tr>
  <tr>
    <td width="197" nowrap height="10"><font face="Arial" size="2">&nbsp;
      Interest expense</font></td>
    <td width="9" align="right" height="10"></td>
    <td width="53" align="right" height="10"></td>
    <td width="10" align="right" height="10"></td>
    <td width="56" align="right" height="10"></td>
    <td width="12" align="right" height="10"></td>
    <td width="59" align="right" style="border-bottom-style: solid; border-bottom-width: thin" height="10">(96)&nbsp;</td>
    <td width="17" align="right" height="10"></td>
    <td width="47" align="right" style="border-bottom-style: solid; border-bottom-width: thin" height="10"><font face="Arial" size="2">(109)&nbsp;</font></td>
    <td width="14" align="right" height="10"></td>
    <td width="77" align="right" height="10"></td>
    <td width="2" align="right" height="10"></td>
    <td width="75" align="right" height="10"></td>
  </tr>
  <tr>
    <td width="271" nowrap colspan="3" height="24">&nbsp; Income before income taxes
      and minority<br>
      &nbsp;&nbsp;&nbsp; interests</td>
    <td width="10" height="24"></td>
    <td width="56" height="24"></td>
    <td width="12" height="24">
      <p align="right">$</td>
    <td width="59" style="border-bottom-style: double; border-bottom-width: THICK" height="24">
      <p align="right">935&nbsp;&nbsp;</td>
    <td width="17" height="24">
      <p align="right">$</td>
    <td width="47" style="border-bottom-style: double; border-bottom-width: thick" height="24">
      <p align="right">880<font face="Arial" size="2">&nbsp;</font>&nbsp;</td>
    <td width="14" height="24"></td>
    <td width="77" height="24"></td>
    <td width="2" height="24"></td>
    <td width="75" height="24"></td>
  </tr>
</table>

</font>
<blockquote>
  <p ALIGN="JUSTIFY"><font face="Arial" size="1">*Effective
  January 1, 2002, the Corporation adopted SFAS 142 which requires that
  intangible assets deemed to have indefinite lives and goodwill are no longer
  subject to amortization.&nbsp; Goodwill
  amortization recorded in segment operating profits for the quarter ended June
  30, 2001 is as follows:&nbsp; Otis -
  $7, Carrier - $19, Pratt &amp; Whitney - $6, and Flight Systems - $26.&nbsp;
  Excluding goodwill amortization, second quarter 2001 segment operating
  profits and related operating profit margins are as follows:&nbsp; Otis - $230 (15.0%), Carrier - $336 (12.9%), Pratt &amp; Whitney - $359
  (18.3%), and Flight Systems - $205 (15.3%).</font></p>
</blockquote>
<font FACE="Arial" SIZE="2">

<table border="0" cellspacing="1" height="392" style="font-family: Arial; font-size: 10pt" width="694">
  <tr>
    <td width="197" nowrap height="21"></td>
    <td width="9" align="right" height="21"></td>
    <td width="144" align="center" height="21" colspan="3" valign="bottom" class="botbord">
      <p align="center"><b>Revenues</b></td>
    <td width="21" align="center" height="21" valign="bottom"></td>
    <td width="119" align="center" height="21" colspan="3" valign="bottom" class="botbord"><b>&nbsp;&nbsp;&nbsp;
      Operating Profit</b></td>
    <td width="9" align="center" height="21"></td>
    <td width="150" align="center" height="21" colspan="3" class="botbord" valign="bottom"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Operating<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Profit Margin</b></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2"><b>Six Months
      Ended
      June 30,</b></font></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="center" height="21"><font face="Arial" size="2"><u><b>2002</b></u></font></td>
    <td width="10" align="center" height="21"></td>
    <td width="61" align="center" height="21"><font face="Arial" size="2"><u><b>2001</b></u></font></td>
    <td width="21" align="center" height="21"></td>
    <td width="47" align="center" height="21">
      <p align="right"><font face="Arial" size="2"><b><u>2002</u>**</b></font></p>
    </td>
    <td width="9" align="right" height="21">
      <p align="left"></td>
    <td width="52" align="center" height="21">
      <p align="right"><font face="Arial" size="2"><b><u>2001</u>***</b></font></p>
    </td>
    <td width="9" align="center" height="21"></td>
    <td width="61" align="center" height="21">
      <p align="right"><font face="Arial" size="2"><b><u>2002</u>&nbsp;&nbsp;&nbsp;</b></font></p>
    </td>
    <td width="2" align="center" height="21"></td>
    <td width="75" align="center" height="21">
      <p><font face="Arial" size="2"><b><u>2001</u>***</b></font></p>
    </td>
  </tr>
  <tr>
    <td width="197" nowrap height="21">&nbsp;&nbsp;</td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21"></td>
    <td width="10" align="right" height="21"></td>
    <td width="61" align="right" height="21"></td>
    <td width="21" align="right" height="21"></td>
    <td width="47" align="right" height="21"></td>
    <td width="9" align="right" height="21"></td>
    <td width="52" align="right" height="21"></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21"></td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2">&nbsp; Otis</font></td>
    <td width="9" align="right" height="21">$</td>
    <td width="61" align="right" height="21"><font face="Arial" size="2">&nbsp;&nbsp;3,216&nbsp;&nbsp;</font></td>
    <td width="10" align="right" height="21">$</td>
    <td width="61" align="right" height="21"><font face="Arial" size="2">3,085 &nbsp;</font></td>
    <td width="21" align="right" height="21">$</td>
    <td width="47" align="right" height="21">497&nbsp;&nbsp;</td>
    <td width="9" align="right" height="21">$</td>
    <td width="52" align="right" height="21">44<font face="Arial" size="2">3&nbsp;&nbsp;</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21">15.5%</td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"><font face="Arial" size="2">14.4%&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2">&nbsp;
      Carrier</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21"><font face="Arial" size="2">&nbsp;&nbsp;4,43</font>7&nbsp;&nbsp;</td>
    <td width="10" align="right" height="21"></td>
    <td width="61" align="right" height="21"><font face="Arial" size="2">4,698 &nbsp;</font></td>
    <td width="21" align="right" height="21"></td>
    <td width="47" align="right" height="21">396<font FACE="Arial" SIZE="2">&nbsp;&nbsp;

</font>

    </td>
    <td width="9" align="right" height="21"></td>
    <td width="52" align="right" height="21"><font face="Arial" size="2">448&nbsp;&nbsp;</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21">8.9%</td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"><font face="Arial" size="2">9.5%&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2">&nbsp; Pratt
      &amp; Whitney</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21"><font face="Arial" size="2">&nbsp;&nbsp;3,715&nbsp;&nbsp;</font></td>
    <td width="10" align="right" height="21"></td>
    <td width="61" align="right" height="21"><font face="Arial" size="2">3,835 &nbsp;</font></td>
    <td width="21" align="right" height="21"></td>
    <td width="47" align="right" height="21">653<font FACE="Arial" SIZE="2">&nbsp;&nbsp;

</font>

    </td>
    <td width="9" align="right" height="21"></td>
    <td width="52" align="right" height="21"><font face="Arial" size="2">696&nbsp;&nbsp;</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21">17.6%</td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"><font face="Arial" size="2">18.1%&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="20"><font face="Arial" size="2">&nbsp; Flight
      Systems</font></td>
    <td width="9" align="right" height="20"></td>
    <td width="63" align="right" class="botbord" height="20" style="border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">&nbsp;&nbsp;2,588&nbsp;&nbsp;</font></td>
    <td width="10" align="right" height="20"></td>
    <td width="63" align="right" class="botbord" height="20" style="border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">2,591 &nbsp;</font></td>
    <td width="21" align="right" height="20"></td>
    <td width="49" align="right" class="botbord" height="20" style="border-bottom-style: solid; border-bottom-width: thin">350<font FACE="Arial" SIZE="2">&nbsp;&nbsp;

</font>

    </td>
    <td width="9" align="right" height="20"></td>
    <td width="54" align="right" height="20" class="botbord" style="border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">347&nbsp;&nbsp;</font></td>
    <td width="9" align="right" height="20"></td>
    <td width="61" align="right" height="20">13.5%</td>
    <td width="2" align="right" height="20"></td>
    <td width="75" align="right" height="20"><font face="Arial" size="2">13.4%&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2">&nbsp; Total
      segment</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21"><font face="Arial" size="2">&nbsp;13,956&nbsp;&nbsp;</font></td>
    <td width="10" align="right" height="21"></td>
    <td width="61" align="right" height="21"><font face="Arial" size="2">14,209 &nbsp;</font></td>
    <td width="21" align="right" height="21"></td>
    <td width="47" align="right" height="21">1,896<font FACE="Arial" SIZE="2">&nbsp;&nbsp;

</font>

    </td>
    <td width="9" align="right" height="21"></td>
    <td width="52" align="right" height="21"><font face="Arial" size="2">1,934&nbsp;&nbsp;</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21">13.6%</td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"><font face="Arial" size="2">13.6%&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td width="197" nowrap height="21"><font face="Arial" size="2">&nbsp;
      Eliminations and other</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21" style="font-family: Arial; font-size: 10pt">(258)&nbsp;</td>
    <td width="10" align="right" height="21"></td>
    <td width="61" align="right" height="21">(206)&nbsp;&nbsp;</td>
    <td width="21" align="right" height="21"></td>
    <td width="47" align="right" height="21">43<font FACE="Arial" SIZE="2">&nbsp;&nbsp;

</font>

    </td>
    <td width="9" align="right" height="21"></td>
    <td width="52" align="right" height="21"><font face="Arial" size="2">(62)&nbsp;</font></td>
    <td width="9" align="right" height="21"></td>
    <td width="61" align="right" height="21"></td>
    <td width="2" align="right" height="21"></td>
    <td width="75" align="right" height="21"></td>
  </tr>
  <tr>
    <td width="197" nowrap height="23">
      <p align="left"><font face="Arial" size="2">&nbsp; General corporate expenses</font></p>
    </td>
    <td width="9" align="right" height="23"></td>
    <td width="61" align="right" class="botbord" height="23">
      <p align="right"><font face="Arial" size="2">-&nbsp;&nbsp;</font></td>
    <td width="10" align="right" height="23"></td>
    <td width="61" align="right" height="23">
      <p class="botbord">-<font face="Arial" size="2"> &nbsp;</font></td>
    <td width="21" align="right" height="23">
      <p align="right"></p>
    </td>
    <td width="47" align="right" class="botbord" height="23">(111)&nbsp;</td>
    <td width="9" align="right" height="23"></td>
    <td width="52" align="right" class="botbord" height="23"><font face="Arial" size="2">(106)&nbsp;</font></td>
    <td width="9" align="right" height="23"></td>
    <td width="61" align="right" height="23"></td>
    <td width="2" align="right" height="23"></td>
    <td width="75" align="right" height="23"></td>
  </tr>
  <tr>
    <td width="197" nowrap height="24"><font face="Arial" size="2">&nbsp;
      Consolidated</font></td>
    <td width="9" align="right" height="24"><font face="Arial" size="2">$</font></td>
    <td width="63" align="right" class="double" height="24" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick">13,698&nbsp;&nbsp;</td>
    <td width="10" align="right" height="24">$</td>
    <td width="63" align="right" class="double" height="24" style="border-top-style: solid; border-top-width: thin; border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">14,003 &nbsp;</font></td>
    <td width="21" align="right" height="24"></td>
    <td width="49" align="right" height="24" style="font-family: Arial; font-size: 10pt; border-top-style: solid; border-top-width: thin">1,828<font FACE="Arial" SIZE="2">
      &nbsp;</font>

    </td>
    <td width="9" align="right" height="24"></td>
    <td width="54" align="right" height="24" style="border-top-style: solid; border-top-width: thin"><font face="Arial" size="2">1,766&nbsp;&nbsp;</font></td>
    <td width="9" align="right" height="24"></td>
    <td width="61" align="right" height="24"></td>
    <td width="2" align="right" height="24"></td>
    <td width="75" align="right" height="24"></td>
  </tr>
  <tr>
    <td width="197" nowrap height="15"><font face="Arial" size="2">&nbsp;
      Interest expense</font></td>
    <td width="9" align="right" height="15"></td>
    <td width="61" align="right" height="15"></td>
    <td width="10" align="right" height="15"></td>
    <td width="61" align="right" height="15"></td>
    <td width="21" align="right" height="15"></td>
    <td width="47" align="right" height="15" style="font-family: Arial; font-size: 10pt; border-bottom-style: solid; border-bottom-width: thin">
      <p align="right">(195)&nbsp;</p>

    </td>
    <td width="9" align="right" height="15"></td>
    <td width="52" align="right" height="15" style="border-bottom-style: solid; border-bottom-width: thin">
      <p align="right"><font face="Arial" size="2">(216)&nbsp;</font></p>
    </td>
    <td width="9" align="right" height="15"></td>
    <td width="61" align="right" height="15"></td>
    <td width="2" align="right" height="15"></td>
    <td width="75" align="right" height="15"></td>
  </tr>
  <tr>
    <td width="267" nowrap colspan="3" height="24"><font face="Arial" size="2">&nbsp; Income
      before income taxes and minority<br>
      &nbsp;&nbsp;&nbsp; interests</font></td>
    <td width="10" align="right" height="24"></td>
    <td width="61" align="right" height="24"></td>
    <td width="21" height="24">
      <p align="right">$</p>
    </td>
    <td width="49" height="24" style="border-bottom-style: double; border-bottom-width: thick">
      <p align="right">1,633&nbsp;&nbsp;</td>
    <td width="9" height="24">
      <p align="right">$</td>
    <td width="54" height="24" style="font-family: Arial; font-size: 10pt; border-bottom-style: double; border-bottom-width: thick">
      <p align="right">1,550 &nbsp;&nbsp;</td>
    <td width="9" align="right" height="24"></td>
    <td width="61" align="right" height="24"></td>
    <td width="2" align="right" height="24"></td>
    <td width="75" align="right" height="24"></td>
  </tr>
</table>

</font>

<blockquote>

<p ALIGN="JUSTIFY"><font FACE="Arial" size="1">**First quarter 2002 restructuring and related
charges included in segment operating profits are as follows:&nbsp;
Otis - $16, Carrier - $74, Pratt &amp; Whitney - $9, and Flight Systems -
$5.</font></p>
<p ALIGN="JUSTIFY"><font FACE="Arial" size="1">***Goodwill amortization recorded in segment
operating profits for the six months ended June 30, 2001 is as follows:&nbsp;
Otis - $14, Carrier - $37, Pratt &amp; Whitney - $11, and Flight Systems
- - $52.&nbsp; Excluding goodwill
amortization, segment operating profits and related operating profit margins for
the six months ended June 30, 2001 are as follows:&nbsp;
Otis - $457 (14.8%), Carrier - $485 (10.3%), Pratt &amp; Whitney - $707
(18.4%), and Flight Systems - $399 (15.4%).</font></p>

</blockquote>

<font FACE="Arial" SIZE="2">
<p align="center">17</p>
<hr>

<b>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

</b>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; <b>Otis</b> revenues increased $143 million
(9%) and $131 million (4%) in the second quarter and six-month period of 2002
compared to the same periods of 2001 with about half of the second quarter revenue growth due
to acquisitions.&nbsp; On a constant
currency basis, revenues increased 8% in the second quarter, reflecting the
strength of the Euro in relation to the U.S. dollar, and increased 6% in the
six-month period reflecting weakened Asian currencies.&nbsp;
The increases were led by Europe and Asia, largely reflecting the impact
of recent acquisitions.&nbsp; Except for
South America, revenues increased in all regions due to increased service and
new equipment sales.&nbsp; Otis new
equipment orders increased more than 20% in the quarter, about half of which was
organic.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Otis operating profits increased $40 million (18%) and $54 million (12%)
in the second quarter and six-month period of 2002 compared to 2001.&nbsp;
On a constant currency basis, operating profit increased 16% and 13% in
the second quarter and six-month period, reflecting profit improvements in all
regions, except South America, primarily due to the profit impact of increased
revenues and productivity improvements.</p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;<b> Carrier</b> revenues decreased $72
million (3%) and $261 million (6%) in the second quarter and six-month period of
2002 compared to 2001, reflecting continued weakness in the North American HVAC
and commercial refrigeration businesses, and in Latin America.&nbsp;
In the second quarter of 2002, revenues increased in Asia and the
transport refrigeration sector compared to second quarter of 2001. Foreign
currency had a minimal impact in the second quarter.&nbsp;
On a constant currency basis, revenues decreased 5% in the six-month
period due primarily to the strength of the U.S. dollar in relation to Asian and
Latin American currencies, partially offset by the strengthening of the Euro in
the second quarter of 2002.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Carrier's operating profits increased $18 million (6%) in the second
quarter and decreased $52 million (12%) in the six-month period of 2002 compared
to 2001.&nbsp; The second quarter
increase was due primarily to cost reduction actions and the discontinuance of
goodwill amortization, partially offset by the profit impact of reduced volume
and the absence of a purchasing related settlement recorded in the year ago
quarter.&nbsp;&nbsp; The six-month
decrease primarily reflects the first quarter 2002 restructuring charge and the
profit impact of reduced volume, partially offset by the benefit of cost
reduction actions and the absence of goodwill amortization.
</p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; <b>Pratt &amp; Whitney</b> revenues
decreased $82 million (4%) and $120 million (3%) in the second quarter and
six-month period of 2002 compared to 2001.&nbsp;
The decreases were primarily due to lower volume at Pratt &amp; Whitney
Power Systems and Pratt &amp; Whitney Canada, and declines in commercial spare
parts, reflecting conditions in the commercial airline industry.&nbsp;
These decreases were partially offset by increased military engine
revenue and commercial overhaul and repair volume.&nbsp; Despite
the decline in commercial spare parts revenue, commercial spare parts orders in
the second quarter exceeded the Corporation's expectations, down less than 10%
from the second quarter of 2001.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Pratt &amp; Whitney operating profits decreased $18 million (5%) and $43
million (6%) in the second quarter and six-month period of 2002 compared to
2001, primarily reflecting lower volume at Pratt &amp; Whitney Canada,
commercial spare parts decline, and declines at Pratt &amp; Whitney Power
Systems, partially offset by higher military engine volume and overhaul and
repair profits. The six-month decrease also reflects costs associated with the
PW6000 program, partially offset by the favorable impact of commercial engine
contract changes, both recorded in the first quarter of 2002.</p>

<p ALIGN="JUSTIFY"><b>&nbsp;&nbsp;&nbsp; Flight Systems</b> revenues
increased $42 million (3%) in the second quarter and decreased $3 million in the
six-month period of 2002 compared to 2001. The second quarter increase is
primarily associated with increased aftermarket revenues at Sikorsky, due in
part to the acquisition of Derco, and increased original equipment and military
spare parts revenue at Hamilton Sundstrand. The increases were partially offset
by lower helicopter shipments at Sikorsky and lower commercial spare parts
volume at Hamilton Sundstrand.&nbsp; The six-month decrease also reflects lower
industrial volume at Hamilton Sundstrand.&nbsp; Sikorsky's second quarter 2002
acquisition of Derco is expected to result in an expansion of Sikorsky's
aftermarket business.
</p>
<p align="center">18</p>
<hr>

<b>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

</b>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Flight Systems operating profits increased $13 million (7%) and $3
million (1%) in the second quarter and six-month period of 2002 compared to
2001.&nbsp; Excluding the impact of the
discontinuance of goodwill amortization, Flight Systems operating profit
decreased $13 million (6%) and $49 million (12%) for the second quarter and
six-month period of 2002 compared to 2001. The operating profit decrease
reflects lower helicopter shipments at Sikorsky and lower commercial spare parts
at Hamilton Sundstrand, partially offset by increased aftermarket profit at
Sikorsky and the benefit of cost reduction actions at Hamilton Sundstrand.&nbsp;
In addition, the six-month decrease reflects higher research and
development costs on the S/H-92 program and increased costs on an international
Naval Hawk program at Sikorsky.
</p>
<p ALIGN="center">19
</p>
<hr>

<b>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

</b>
<p align="center"><b>LIQUIDITY AND FINANCIAL POSITION</b></p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Management assesses the
Corporation's liquidity in
terms of its overall ability to generate cash to fund its operating and
investing activities.&nbsp; Significant
factors affecting the management of liquidity are cash flows generated from
operating activities, capital expenditures, investments in businesses, customer
financing requirements, Common Stock repurchases, adequate bank lines of credit
and financial flexibility to attract long-term capital with satisfactory terms.

<b>

<p>&nbsp;

</b>

<div align="center">
  <center>

<table CELLSPACING="0" BORDER="0" style="font-family: Arial; font-size: 10pt">
  <tr>
    <td WIDTH="244" VALIGN="TOP"><font face="Arial" size="2"><br>
    In Millions of Dollars</font></td>

<b>

    <td WIDTH="17" VALIGN="TOP" style="font-family: Arial; font-size: 10pt; font-weight: bold"></td>
</b>

    <td WIDTH="126" align="center" style="font-family: Arial; font-size: 10pt; font-weight: bold">June 30,<font face="Arial" size="2"><br>
      <u>
    2002</u></font></td>

<b>

    <td WIDTH="22" VALIGN="bottom" align="center" style="font-family: Arial; font-size: 10pt; font-weight: bold"></td>
</b>

    <td WIDTH="133" align="center" style="font-family: Arial; font-size: 10pt; font-weight: bold"><font face="Arial" size="2">December 31,<br>
      <u>
    2001</u></font></td>

<b>

    <td WIDTH="17" align="center" style="font-family: Arial; font-size: 10pt; font-weight: bold"></td>
</b>

    <td WIDTH="116" align="center" style="font-family: Arial; font-size: 10pt; font-weight: bold">June 30,<font face="Arial" size="2"><br>
      <u>
    2001</u></font></td>
  </tr>

<b>

  <tr>
    <td VALIGN="top" height="10" width="244"></td>
    <td VALIGN="top" height="10" width="17"></td>
    <td VALIGN="top" height="10" width="126"></td>
    <td VALIGN="top" height="10" width="22"></td>
    <td VALIGN="top" height="10" width="133"></td>
    <td VALIGN="top" height="10" width="17"></td>
    <td VALIGN="top" height="10" width="116"></td>
  </tr>
</b>

  <tr>
    <td WIDTH="244" VALIGN="TOP"><font face="Arial" size="2">Cash and cash equivalents</font></td>
    <td WIDTH="17" VALIGN="TOP"><p ALIGN="RIGHT"><font face="Arial" size="2">$</font></td>
    <td WIDTH="126" VALIGN="TOP" align="right"><font face="Arial" size="2">1,902&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td WIDTH="22" VALIGN="TOP"><p ALIGN="RIGHT"><font face="Arial" size="2">$</font></td>
    <td WIDTH="133" VALIGN="TOP" align="right"><font face="Arial" size="2">1,558&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="17" VALIGN="TOP"><p ALIGN="RIGHT"><font face="Arial" size="2">$</font></td>
    <td WIDTH="116" VALIGN="TOP" align="right">957<font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="244" VALIGN="TOP"><font face="Arial" size="2">Total debt</font></td>

<b>

    <td WIDTH="17" VALIGN="TOP"></td>
</b>

    <td WIDTH="126" VALIGN="TOP" align="right"><font face="Arial" size="2">4,988&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>

<b>

    <td WIDTH="22" VALIGN="TOP"></td>
</b>

    <td WIDTH="133" VALIGN="TOP" align="right"><font face="Arial" size="2">4,959&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>

<b>

    <td WIDTH="17" VALIGN="TOP"></td>
</b>

    <td WIDTH="116" VALIGN="TOP" align="right"><font face="Arial" size="2">4,935&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>

  <tr>
    <td WIDTH="244" VALIGN="TOP"><font face="Arial" size="2">Net debt (total debt less cash)</font></td>
    <td WIDTH="17" VALIGN="TOP">&nbsp;&nbsp;</td>

    <td WIDTH="126" VALIGN="TOP" align="right"><font face="Arial" size="2">3,086&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>

    <td WIDTH="22" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="133" VALIGN="TOP" align="right"><font face="Arial" size="2">3,401&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>

    <td WIDTH="17" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="116" VALIGN="TOP" align="right"><font face="Arial" size="2">3,978&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="244" VALIGN="TOP"><font face="Arial" size="2">Shareowners' equity</font></td>

    <td WIDTH="17" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="126" VALIGN="TOP" align="right"><font face="Arial" size="2">9,163&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>

    <td WIDTH="22" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="133" VALIGN="TOP" align="right"><font face="Arial" size="2">8,369&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>

    <td WIDTH="17" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="116" VALIGN="TOP" align="right"><font face="Arial" size="2">8,149&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="244" VALIGN="TOP"><font face="Arial" size="2">Debt to total capitalization</font></td>

    <td WIDTH="17" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="126" VALIGN="TOP" align="right"><font face="Arial" size="2">35%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>

    <td WIDTH="22" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="133" VALIGN="TOP" align="right"><font face="Arial" size="2">37%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>

    <td WIDTH="17" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="116" VALIGN="TOP" align="right"><font face="Arial" size="2">38%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td WIDTH="244" VALIGN="TOP"><font face="Arial" size="2">Net debt to total capitalization</font></td>

    <td WIDTH="17" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="126" VALIGN="TOP" align="right"><font face="Arial" size="2">25%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>

    <td WIDTH="22" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="133" VALIGN="TOP" align="right"><font face="Arial" size="2">29%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>

    <td WIDTH="17" VALIGN="TOP">&nbsp;&nbsp;</td>
    <td WIDTH="116" VALIGN="TOP" align="right"><font face="Arial" size="2">33%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>

<b>

</table>

  </center>
</div>

</b>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Net cash flows
provided by operating activities increased $8 million in the first six months of
2002 compared to the corresponding period in 2001, due to improved operating
performance partially offset by higher accounts receivable and inventory levels.</p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Cash used in investing activities decreased $169 million in the first six
months of 2002 compared with the same period of 2001, primarily due to lower customer financing requirements and capital
expenditures.&nbsp; The decrease in
capital expenditures is due to a rationalization of capital projects, resulting
in lower capital expenditures in the first half of 2002, and represents the
majority of the anticipated decline in capital spending for the full year of
2002.&nbsp;
Cash spending for investments in businesses for the first six months of
2002 was $312 million and includes Sikorsky's second quarter acquisition of
Derco and Pratt &amp; Whitney's first quarter aerospace acquisitions as well as
other smaller industry-consolidating transactions. The Corporation's rate of investment in businesses in the first half of 2002 was comparable to
the same period in 2001.&nbsp;
Acquisition activity for the remainder of 2002 will depend upon the
availability of appropriate acquisition opportunities.&nbsp;
</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Customer financing activity was a net use of cash of $95 million in the
first six months of 2002 compared with a $159 million net use of cash in the
first six months of 2001, reflecting lower customer generated financing
requirements.&nbsp;While the Corporation
expects that 2002 customer financing activity will be a net use of funds, actual
funding is subject to usage under existing customer financing commitments during
the remainder of the year.&nbsp; The
Corporation had financing and rental commitments of $1.4 billion related to
commercial aircraft at June 30, 2002, compared to $1.6 billion at December 31,
2001.</p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Net cash flows used in financing activities increased $76 million in the
first six months of 2002 compared with the same period of 2001, due primarily to
higher debt repayments and less Common Stock issued on fewer option exercises,
partially offset by fewer repurchases of Common Stock. In April 2002, the
Corporation issued $500 million of 6.10% unsubordinated, unsecured,
nonconvertible notes under shelf registration statements previously filed with
the Securities and Exchange Commission (the "Commission").&nbsp;
Under a shelf registration statement previously filed with the
Commission, the Corporation can issue up to $1.1 billion of additional debt and
equity securities.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The Corporation repurchased $226 million of Common Stock, representing
3.2 million shares in the first six months of 2002 under previously announced
share repurchase programs.&nbsp; The
share repurchase programs continue to be a use of the Corporation's cash flows
and have more than offset the dilutive effect resulting from the issuance of
stock and options under stock-based employee&nbsp;benefit programs.&nbsp; At
June 30, 2002, the Corporation was authorized to repurchase an additional 12.6
million shares, and expects total share repurchases in 2002 to approximate $600
million.</p>
<p align="center">20</p>


<hr>

<b>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

</b>
<p ALIGN="JUSTIFY"> &nbsp;&nbsp;&nbsp; The funded status of the Corporation's
pension plans is dependent upon many factors, including returns on invested
assets.&nbsp; Recent declines in the value of securities traded in equity
markets have had a negative impact on the fair value of the plans' assets, which
may require the Corporation to make additional contributions to the plans.&nbsp;
The Corporation can contribute cash to these plans at its discretion and under
current authorization from the Board of Directors, the Corporation can contribute
up to $500 million of Common Stock, $247 million of which was funded in the fourth
quarter of 2001.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The Corporation manages its worldwide cash requirements considering
available funds among the many subsidiaries through which it conducts its
business and the cost effectiveness with which those funds can be accessed. The
repatriation of cash balances from certain of the Corporation's subsidiaries
could have adverse tax consequences; however, those balances are generally
available without legal restrictions to fund ordinary business operations.&nbsp;
The Corporation has and will continue to transfer cash from those
subsidiaries to the parent and to other international subsidiaries when it is
cost effective to do so.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Management believes that its existing cash position and other available
sources of liquidity are sufficient to meet current and anticipated requirements
for the foreseeable future.&nbsp; Although
uncertainties in acquisition spending could cause modest variations at times,
management anticipates that the level of debt-to-capital will remain generally
consistent with recent levels over the last year.</p>
<p ALIGN="JUSTIFY"><b>Critical Accounting Policies</b></p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Preparation
of the Corporation's financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses.&nbsp; Note
1 of the Notes to Consolidated Financial Statements in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2001 describes the
significant accounting policies used in preparation of the Consolidated
Financial Statements.&nbsp; Management
believes the most complex and sensitive judgments, because of their significance
to the consolidated financial statements, result primarily from the need to make
estimates about the effects of matters that are inherently uncertain.&nbsp;
The most significant areas involving management judgments and estimates
are described below.&nbsp; Actual results
in these areas could differ from management's estimates.</p>
<p ALIGN="JUSTIFY"><i>Long-Term Contract Accounting</i></p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The Corporation utilizes percentage of completion accounting on certain
of its long-term contracts.&nbsp; The
percentage of completion method requires estimates of future revenues and costs
over the full term of product delivery.&nbsp; </p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Losses, if any, on long-term contracts are provided for when anticipated.
Loss provisions are based upon excess inventoriable manufacturing, engineering,
estimated warranty and product guarantee costs over the net revenue from the
products contemplated by the specific order.&nbsp;
The net revenue is determined based upon an estimate of the quantity,
pricing and timing of future product deliveries.&nbsp;
Contract accounting also requires estimates of future costs over the
performance period of the contract.</p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; Contract costs are incurred over a period of several years, and the
estimation of these costs requires management judgment.&nbsp;
The long-term nature of these contracts, the complexity of the products,
and the strict safety and performance standards under which they are regulated
can affect the Corporation's ability to estimate costs precisely.&nbsp;
As a result, the Corporation updates its cost estimates when
circumstances change and warrant a modification to a previous estimate.&nbsp;
Adjustments to contract loss provisions resulting from revisions to cost
estimates or changes to customer contractual terms are recorded in earnings upon
identification.&nbsp;</p>
<p align="center">
21
<i>
<hr>
</i>
<b>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

</b>
<p ALIGN="JUSTIFY"><i>Income Taxes</i></p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The future tax benefit arising from net deductible
temporary differences and tax carryforwards is $2.4 billion at June 30, 2002 and
$2.6 billion at December 31, 2001.&nbsp; Management
believes that the Corporation's earnings during the periods when the temporary
differences become deductible will be sufficient to realize the related future
income tax benefits.&nbsp; For those
jurisdictions where the expiration date of tax carryforwards or the projected
operating results indicate that realization is not likely, a valuation allowance
is provided.</p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; In assessing the need for a valuation allowance, the Corporation
estimates future taxable income, considering the feasibility of ongoing tax
planning strategies and the realizability of tax loss carryforwards.&nbsp;
Valuation allowances related to deferred tax assets can be impacted by
changes to tax laws, changes to statutory tax rates and future taxable income
levels.&nbsp; In the event the
Corporation were to determine that it would not be able to realize all or a
portion of its deferred tax assets in the future, the Corporation would reduce
such amounts through a charge to income in the period that such determination
was made.&nbsp; Conversely, if the
Corporation were to determine that it would be able to realize its deferred tax
assets in the future in excess of the net carrying amounts, the Corporation
would decrease the recorded valuation allowance through an increase to income in
the period that such determination was made.</p>


<p ALIGN="JUSTIFY"><i>Business Acquisitions</i></p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The
Corporation completed acquisitions during the first six months of 2002 of $333
million, including $21 million of debt assumed in the acquisition of businesses.&nbsp;
The assets and liabilities of acquired businesses are recorded under the
purchase method at their estimated fair values at the dates of acquisition.&nbsp; Goodwill represents costs
in excess of fair values assigned to the underlying net assets of acquired
companies.&nbsp; The Corporation
had recorded goodwill of $6.9 billion as of June 30, 2002 and $6.8 billion as of
December 31, 2001.</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; In accordance with SFAS 142, goodwill and intangible assets deemed to
have indefinite lives are not amortized, but are subject to annual impairment
testing using the specific guidance and criteria described in the standard.&nbsp;
The identification and measurement of goodwill impairment involves the
estimation of the fair value of reporting units, including the related goodwill.&nbsp; The estimates of fair value of reporting units are based on
the best information available as of the date of the assessment, which primarily
incorporate management assumptions about expected future cash flows and
contemplate other valuation techniques.&nbsp; Future
cash flows can be affected by changes in industry or market conditions or the
rate and extent to which anticipated synergies or cost savings are realized with
newly acquired entities.&nbsp; Although no goodwill impairment has been recorded to date,
there can be no assurances that future goodwill impairments will not occur.</p>
<p><i>Product
Performance</i></p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The Corporation extends performance and operating cost
guarantees beyond its normal service and warranty policies for extended periods
on some of its products, particularly commercial aircraft engines.&nbsp;
Liability under such guarantees is based upon future product performance
and durability.&nbsp;In addition, the Corporation incurs discretionary costs to
service its products in connection with product performance issues.&nbsp;
The Corporation accrues for such costs that are probable and can be
reasonably estimated.&nbsp; The costs
associated with these product performance and operating cost guarantees require
estimates over the full terms of the agreements, and require management to
consider factors such as the extent of future maintenance requirements and the
future cost of material and labor to perform the services. These cost estimates
are largely based upon historical experience.</p>
<p ALIGN="center">22</p>
<i>
<hr>


</i>


<b>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

</b>
 <p>
<i>
Contracting with the Federal Government</i>


<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; The
Corporation's contracts with the U.S. Government are subject to government
investigations and audits. Like many defense contractors, the Corporation has
received audit reports, which recommend that certain contract prices should be
reduced to comply with various government regulations. Some of these audit
reports involve substantial amounts. The Corporation has made voluntary refunds
in those cases it believes appropriate.&nbsp; In
addition, the Corporation accrues for liabilities associated with those matters
that are probable and can be reasonably estimated.&nbsp;
The inherent uncertainty related to the outcome of these audit matters
can result in amounts materially different from any provisions we have made with
respect to their resolution.&nbsp; The
Corporation recorded sales to the U.S. Government of $1.1 billion and $2.0
billion in the second quarter and six-month period of 2002, respectively,
compared to $800 million and $1.6 billion in the second quarter and six-month period
of 2001.</p>


<p ALIGN="JUSTIFY"><b>Recent Accounting Guidance</b></p>


  <p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; In June 2001, Statement of Financial
  Accounting Standards (&quot;SFAS&quot;) No. 143, "Accounting for Asset Retirement Obligations"
was issued.&nbsp; The standard requires
that legal obligations associated with the retirement of long-lived intangible
assets be recorded at fair value when incurred and will be effective for the
Corporation on January 1, 2003.&nbsp; The
Corporation is currently reviewing the provisions of SFAS 143 to determine the standard's
  impact upon adoption.</p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; In
April 2002, SFAS No. 145, &quot;Rescission of FASB Statements No. 4, 44 and 64,
Amendment of FASB Statement No. 13, and Technical Corrections&quot; was issued.&nbsp; This statement provides guidance on the classification of
gains and losses from the extinguishment of debt and on the accounting for
certain specified lease transactions.&nbsp; The
adoption of this statement will not have a material impact on the Corporation's
consolidated financial position, results of operations or cash flows.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; In
June 2002, SFAS No. 146, &quot;Accounting for Costs Associated with Exit or Disposal Activities&quot; was
issued.&nbsp; This statement provides
guidance on the recognition and measurement of liabilities associated with
disposal activities and is effective for the Corporation on January 1, 2003.&nbsp;
The Corporation is currently reviewing the provisions of SFAS 146 to
determine the standard's impact upon adoption.&nbsp;</p>
  <p><b>&nbsp;&nbsp;&nbsp; Item
  3. Quantitative and Qualitative Disclosures about Market Risk</b></p>
<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; There has been no significant change in the
  Corporation's exposure to market risk during the first six months of 2002.&nbsp;
  For discussion of the Corporation's exposure to market risk, refer to
  Item 7A, Quantitative and Qualitative Disclosures about Market Risk, contained
  in the Corporation's Annual Report incorporated by reference in Form 10-K for
  the calendar year 2001.</p>
  <p align="center">23</p>
<i>
  <hr>

</i>

<p ALIGN="CENTER"><b>UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</b></p>
<font FACE="Arial" SIZE="3">

<p ALIGN="CENTER"></font><font face="Arial" size="2"><b>CAUTIONARY NOTE CONCERNING FACTORS
THAT MAY AFFECT FUTURE RESULTS</b></font></p>

<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp;<i> </i>This report on Form 10-Q
contains statements which, to the extent they are not statements of historical
or present fact, constitute "forward-looking statements" under the
securities laws.&nbsp; From time to time,
oral or written forward-looking statements may also be included in other
materials released to the public.&nbsp; These
forward-looking statements are intended to provide management's current
expectations or plans for the future operating and financial performance of the
Corporation, based on assumptions currently believed to be valid.&nbsp;
Forward-looking statements can be identified by the use of words such as
"believe," "expect," "plans," "strategy," "prospects,"
"estimate," "project," "anticipate" and other words of similar
meaning in connection with a discussion of future operating or financial
performance.&nbsp; These include,
among others, statements relating to:</p>
<ul>
  <li>
    <p ALIGN="JUSTIFY">Future earnings and other measurements of financial
    performance</li>
  <li>
    <p ALIGN="JUSTIFY">Future
cash flow and uses of cash</li>
  <li>
    <p ALIGN="JUSTIFY">The
effect of economic downturns or growth in particular regions</li>
  <li>
    <p ALIGN="JUSTIFY">The effect of&nbsp; changes in the level of activity in particular industries or markets</li>
  <li>
    <p ALIGN="JUSTIFY">The scope, nature or impact of acquisition activity and
    integration into the Corporation's businesses</li>
  <li>
    <p ALIGN="JUSTIFY">Product developments and new business opportunities</li>
  <li>
    <p ALIGN="JUSTIFY">Restructuring costs and savings</li>
  <li>
    <p ALIGN="JUSTIFY">The outcome of contingencies</li>
  <li>
    <p ALIGN="JUSTIFY">Future repurchases of Common Stock</li>
  <li>
    <p ALIGN="JUSTIFY">Future levels of indebtedness and capital spending.</li>
</ul>


<p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; All forward-looking statements involve risks and uncertainties that may
cause actual results to differ materially from those expressed or implied in the
forward-looking statements.&nbsp; This
Quarterly Report on Form 10&#8209;Q includes important information as to risk
factors in the "Notes to Condensed Consolidated Financial Statements" under
the heading "Contingent Liabilities" and in the section titled
"Management's Discussion and Analysis of Results of Operations and Financial
Position" under the headings "Business Environment," "Results of
Continuing Operations," &quot;Restructuring,&quot; &quot;Liquidity and Financial
Position&quot; and &quot;Critical Accounting Policies.&quot;&nbsp; The Corporation's
Annual Report on Form 10-K for 2001 also includes
important information as to risk factors in the "Business" section under the
headings "Description of Business by Operating Segment," "Other Matters
Relating to the Corporation's Business as a Whole" and "Legal
Proceedings."&nbsp; Additional
important information as to risk factors is included in the Corporation's 2001
Annual Report to Shareowners in the section titled "Management's Discussion
and Analysis of Results of Operations and Financial Position" under the
headings "Business Environment" and "Restructuring and Other Costs."&nbsp; For additional information identifying factors that may cause actual
results to vary materially from those stated in the forward-looking statements,
see the Corporation's reports on Forms 10-Q and 8-K filed with the Securities
and Exchange Commission from time to time.</p>

<p ALIGN="center">24</p>

<b>

<i>

<hr>

</i>

<p ALIGN="CENTER">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

<blockquote>

<p> Part II &#150; Other Information</p>

</b>

<p><b>Item 4.&nbsp;&nbsp;&nbsp; Submission of Matters to a Vote of Security
Holders</b>  </p>

<p ALIGN="JUSTIFY">The Corporation held its Annual Meeting of Shareowners on April
10, 2002.</p>
<p ALIGN="JUSTIFY">The following individuals were nominated and elected to serve as
directors:

</p>
<p ALIGN="JUSTIFY"> George David, Jean-Pierre Garnier, Jamie S. Gorelick, Charles&nbsp;R. Lee, Richard D. McCormick, Frank P. Popoff,
H. Patrick Swygert, Andre Villeneuve, H. A. Wagner and Sanford I. Weill.

</p>
<p>The Shareowners voted as follows on the following matters:
</p>
<ol>
  <li>Election
of Directors.&nbsp; The voting results
for each nominee are as follows:</li>
</ol>
</blockquote>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse: collapse; mso-table-layout-alt: fixed; mso-padding-alt: 0in 5.4pt 0in 5.4pt; font-family: Arial; font-size: 10pt; margin-left: 36.9pt" width="573" height="233">
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">

    NAME

    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>VOTES FOR</p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>VOTES
      WITHHELD</p>
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p>&nbsp;</p>
    </td>

<i>

    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p> </p>
    </td>
    </i>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p><font face="Arial" size="2">George
      David</font></p>
    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>428,757,478</p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" align="center" height="18">
      <p>7,563,033</p>
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="17">
      <p><font face="Arial" size="2">Jean-Pierre
      Garnier</font></p>
    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="17" align="center">
      <p>428,883,211</p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" align="center" height="17">
      <p>7,437,300</p>
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p style="margin-top:0in;margin-right:.5in;margin-bottom:
  0in;margin-left:0in;margin-bottom:.0001pt;tab-stops:.5in 153.0pt"><font face="Arial" size="2">Jamie S.
      Gorelick</font></p>
    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>426,078,040</p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" align="center" height="18">
      <p>&nbsp;10,242,471&nbsp;&nbsp;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p><font face="Arial" size="2">Charles
      R. Lee</font></p>
    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>428,864,613
     </p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" align="center" height="18">
      7,455,898
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p><font face="Arial" size="2">Richard
      D. McCormick</font>  </p>
    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>426,520,369</p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" align="center" height="18">
      9,800,142
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p><font face="Arial" size="2">Frank P.
      Popoff</font></p>
    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>426,441,411</p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" align="center" height="18">
      9,879,100
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p>H. Patrick Swygert</p>
    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>428,558,457</p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" align="center" height="18">
      7,762,054
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p><font face="Arial" size="2">Andre
      Villeneuve</font></p>
    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>426,478,277</p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" align="center" height="18">
      9,842,234
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p><font face="Arial" size="2">H. A.
      Wagner</font></p>
    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>426,472,536</p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" align="center" height="18">
      9,847,975
    </td>
  </tr>
  <tr>
    <td width="222" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18">
      <p>Sanford
      I. Weill</p>
    </td>
    <td width="156" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" height="18" align="center">
      <p>422,054,677</p>
    </td>
    <td width="147" valign="top" style="padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in" align="center" height="18">
      14,265,834&nbsp;&nbsp;&nbsp;
    </td>
  </tr>
</table>
<blockquote>
  <ol start="2">
    <li>
The
reappointment of the Corporation's independent accountants was approved by a
count of 413,375,300 votes for, 15,675,777 votes against and 7,268,002 votes
abstaining.</li>
  </ol>
  <ol start="3">
    <li>
A
shareowner proposal concerning disclosure of political contributions was
rejected by a count of 14,598,211 votes for, and 341,760,286 votes against, with
    27,581,216 votes abstaining and 52,379,396 broker non-votes.</li>
  </ol>
  <ol start="4">
    <li>
A
shareowner proposal concerning weaponization of space was rejected by
a count of 14,980,373 votes for, and 338,101,222 votes against, with 30,858,118 votes abstaining and
    52,379,396 broker non-votes.&nbsp;</li>
  </ol>
  <ol start="5">
    <li>
      <p align="left">A shareowner proposal concerning use of measures of human capital in connection with the awarding of
performance-based executive compensation was rejected by a count of 16,070,148 votes for, and
    343,285,283 votes against, with 24,584,282 votes abstaining and 52,379,396 broker non-votes.</li>
  </ol>
</blockquote>

      <p align="center">25
<hr>

<b>

<p ALIGN="CENTER">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES</p>

</b>

<blockquote>

<p ALIGN="left"><b>&nbsp;Item 6.&nbsp;&nbsp;&nbsp; Exhibits and Reports on Form 8-K</p>

  </b>

<p>&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; Exhibits</p>

</blockquote>

<ol start="4">

<b>

  <div align="left"><table border="0" cellspacing="0" width="622">
    <tr>
      <td width="78" style="font-family: Arial; font-size: 10pt">
        <p align="right">(12)&nbsp;</td>
      <td width="593" style="font-family: Arial; font-size: 10pt"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;
        Statement re: computation of ratio of earnings
      to fixed charges. *</font></td>
    </tr>

    <tr>
      <td width="78">
        <p align="right"><font face="Arial" size="2">(15)&nbsp;</font></p>
      </td>
      <td width="593"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp; Letter re: unaudited interim financial
      information. *</font></td>
    </tr>

  </table>
  </div>
  </ol>

<i>

<blockquote>

</i>

</b>

<p>&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; Reports on Form 8-K</p>

<blockquote>
  <p ALIGN="JUSTIFY">&nbsp; No reports on Form 8-K were filed
  during the quarter ended June 30, 2002.</p>
</blockquote>

<i>

</blockquote>

</i>

<p>*Submitted electronically herewith.</p>

<p align="center">26</p>

<b>

<i>

<hr>

</i>

<p align="center">UNITED TECHNOLOGIES CORPORATION<br>
AND SUBSIDIARIES<font FACE="Arial" SIZE="3"></p>

<p align="center"></font><font face="Arial" size="2">SIGNATURES</font></p>

<i>

<p>&nbsp;</p>

</i>

<p ALIGN="JUSTIFY"></b>Pursuant to the requirements 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.</p>

<i>

<p>&nbsp;</p>

<b>

<div align="left">

<table border="0" cellspacing="0">
  <tr>
    <td width="44%" height="21"></td>
  </b>

</i>

<b>

    <td width="118%" height="21"><font face="Arial" size="2">UNITED TECHNOLOGIES CORPORATION</font></td>
  </tr>

<i>

  <tr>
    <td width="44%" height="18"></td>
    <td width="118%" height="18"></td>
  </tr>
</i>
</b>

  <tr>
    <td width="44%" height="21"><font face="Arial" size="2">Dated:&nbsp; August
      1, 2002</font></td>
    <td width="118%" height="21"><font face="Arial" size="2">By:<u> /s/ David J. FitzPatrick </u></font></td>
  </tr>

<b>

<i>

  <tr>
    <td width="44%" height="21"></td>
</i>
</b>

    <td width="118%" height="21"><font face="Arial" size="2">David J. FitzPatrick</font></td>
  </tr>

<b>

<i>

  <tr>
    <td width="44%" height="21"></td>
</i>
</b>

    <td width="118%" height="21"><font face="Arial" size="2">Senior Vice President,
      Chief
    Financial Officer</font></td>
  </tr>

<b>

<i>

  <tr>
    <td width="44%" height="21"></td>
    <td width="118%" height="21"></td>
  </tr>
</i>
</b>

  <tr>
    <td width="44%" height="21"><font face="Arial" size="2">Dated:&nbsp; August
      1, 2002</font></td>
    <td width="118%" height="21"><font face="Arial" size="2">By:<u> /s/ David G. Nord </u></font></td>
  </tr>

<b>

<i>

  <tr>
    <td width="44%" height="21"></td>
</i>
</b>

    <td width="118%" height="21"><font face="Arial" size="2">David G. Nord</font></td>
  </tr>

<b>

<i>

  <tr>
    <td width="44%" height="21"></td>
</i>
</b>

    <td width="118%" height="21"><font face="Arial" size="2">Vice President, Controller</font></td>
  </tr>

<b>

<i>

  <tr>
    <td width="44%" height="21"></td>
    <td width="118%" height="21"></td>
  </tr>
</i>
</b>

  <tr>
    <td width="44%" height="21"><font face="Arial" size="2">Dated:&nbsp; August
      1, 2002</font></td>
    <td width="118%" height="21"><font face="Arial" size="2">By:<u> /s/ William H. Trachsel </u></font></td>
  </tr>

<b>

<i>

  <tr>
    <td width="44%" height="21"></td>
</i>
</b>

    <td width="118%" height="21"><font face="Arial" size="2">William H. Trachsel</font></td>
  </tr>

<b>

<i>

  <tr>
    <td width="44%" height="21"></td>
</i>
</b>

    <td width="118%" height="21"><font face="Arial" size="2">Senior Vice President, General
    Counsel and Secretary</font></td>
  </tr>

<b>

<i>

  <tr>
    <td width="44%" height="21"></td>
    <td width="118%" height="21"></td>
  </tr>
</table>
</div>

</i></b>

<p align="center">27</p>

<b>

<i>

<hr>

</i>

<blockquote>
  <blockquote>
    <blockquote>
      <blockquote>
        <u><p ALIGN="CENTER">EXHIBIT INDEX</p>
        </u>

<i>

<p ALIGN="CENTER">&nbsp;</p>
      </blockquote>
    </blockquote>
  </blockquote>
</blockquote>

</i>

<table border="0" cellspacing="0" width="100%" cellpadding="0">
  <tr>
    <td width="12%" align="right"><font face="Arial" size="2">(12)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="88%"><font face="Arial" size="2">Statement re: computation of ratio of earnings
    to fixed charges. *</font></td>
  </tr>

<i>

  <tr>
    <td width="12%" height="10" style="font-family: Arial; font-size: 10pt" align="right"></td>
    <td width="88%" height="10" style="font-family: Arial; font-size: 10pt"></td>
  </tr>
  </i>
  <tr>
    <td width="12%" align="right"><font face="Arial" size="2">(15)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="88%"><font face="Arial" size="2">Letter re: unaudited interim financial
    information. *</font></td>
  </tr>
</table>
</b>


<p>*Submitted electronically herewith.</p>

<p align="center">28</p>

<i>

<b>

<hr>
</b>

</i>




</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>3
<FILENAME>ex12tenq202.htm
<DESCRIPTION>EX-12 Q2 2002
<TEXT>
<html>

<head>
<title>ex12q202</title>
</head>

<body>

<p><font face="Arial"
size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit 12</b></font></p>

<p align="center"><font face="Arial"
size="2"><b>UNITED TECHNOLOGIES CORPORATION<br>
</b></font><font face="Arial"
size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AND SUBSIDIARIES</b></font></p>

<p align="center"><font face="Arial"
size="2"><b><u>STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES</u></b></font></p>

<p>&nbsp;</p>

<div align="center">
  <center>

  <table border="0" cellpadding="0" cellspacing="0" width="667">
    <tr>
      <td width="441" height="21" colspan="2"></td>
      <td width="18" align="right" height="21"></td>
      <td width="202" align="center" height="21" colspan="3">
        <font face="Arial" size="2"><b>Six Months
        Ended</b></font></td>
    </tr>
    <tr>
      <td width="441" height="21" colspan="2"></td>
      <td width="18" align="right" height="21"></td>
      <td width="204" align="center" height="21" style="border-bottom-style: solid; border-bottom-width: thin" colspan="3">
        <font face="Arial" size="2"><b>June 30,</b></font></td>
    </tr>
    <tr>
      <td width="441" height="21" colspan="2"><font face="Arial" size="2">In
        Millions of Dollars</font></td>
      <td width="18" align="right" height="21"></td>
      <td width="75" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: thin">
        <p align="center"><font face="Arial" size="2"><b>2002</b></font></td>
      <td width="52" align="right" height="21"></td>
      <td width="75" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: thin" class="botbord">
        <p align="center"><font face="Arial" size="2"><b>2001</b></font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
    </tr>
    <tr>
      <td width="441" height="11" colspan="2"><font face="Arial" size="2">Fixed
        Charges:</font></td>
      <td width="18" align="right" height="11"></td>
      <td width="73" align="right" height="11"></td>
      <td width="52" align="right" height="11"></td>
      <td width="73" align="right" height="11"></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"><font face="Arial" size="2">Interest expense</font></td>
      <td width="18" align="right" height="21"><font face="Arial" size="2">$&nbsp;&nbsp;</font></td>
      <td width="73" align="right" height="21"><font face="Arial" size="2">195&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="52" align="right" height="21"><font face="Arial" size="2">$&nbsp;&nbsp;</font></td>
      <td width="73" align="right" height="21"><font face="Arial" size="2">216&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"><font face="Arial" size="2">Interest
        capitalized</font></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21"><font face="Arial" size="2">9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21"><font face="Arial" size="2">13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"><font face="Arial" size="2">One-third of
        rents*</font></td>
      <td width="18" align="right" height="21"></td>
      <td width="75" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: thin" class="botbord"><font face="Arial" size="2">31&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="52" align="right" height="21"></td>
      <td width="75" align="right" height="21" style="border-bottom-style: solid; border-bottom-width: thin" class="botbord"><font face="Arial" size="2">32&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"><font face="Arial" size="2">Total Fixed
        Charges</font></td>
      <td width="18" align="right" height="21"><font face="Arial" size="2">$&nbsp;&nbsp;</font></td>
      <td width="75" align="right" height="21" class="double" style="border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">235&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="52" align="right" height="21"><font face="Arial" size="2">$&nbsp;&nbsp;</font></td>
      <td width="75" align="right" height="21" class="double" style="border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">261&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
    </tr>
    <tr>
      <td width="441" height="21" colspan="2"><font face="Arial" size="2">Earnings:</font></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"><font face="Arial" size="2">Income before
        income taxes and minority interests</font></td>
      <td width="18" align="right" height="21"><font face="Arial" size="2">$&nbsp;&nbsp;</font></td>
    <td width="73" align="right" height="21"><font face="Arial" size="2">1,633&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <center>
    <td width="52" align="right" height="21"><font face="Arial" size="2">$&nbsp;&nbsp;</font></td>
    <td width="73" align="right" height="21"><font face="Arial" size="2">1,550&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"><font face="Arial" size="2">Fixed charges per
        above</font></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21"><font face="Arial" size="2">235&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21"><font face="Arial" size="2">261&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"><font face="Arial" size="2">Less: interest
        capitalized</font></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21" class="botbord"><font face="Arial" size="2">(9)&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21" class="botbord"><font face="Arial" size="2">(13)&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"></td>
      <td width="18" align="right" height="21"></td>
      <td width="75" align="right" height="21" class="botbord" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">226&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="52" align="right" height="21"></td>
      <td width="75" align="right" height="21" class="botbord" style="border-top-style: solid; border-top-width: thin; border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">248&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"><font face="Arial" size="2">Amortization of
        interest capitalized</font></td>
      <td width="18" align="right" height="21"></td>
      <td width="75" align="right" height="21" class="botbord" style="border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="52" align="right" height="21"></td>
      <td width="75" align="right" height="21" class="botbord" style="border-bottom-style: solid; border-bottom-width: thin"><font face="Arial" size="2">8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
    </tr>
    <tr>
      <td width="19" height="15"></td>
      <td width="420" height="15"><font face="Arial" size="2">Total Earnings</font></td>
      <td width="18" align="right" height="15"><font face="Arial" size="2">$&nbsp;&nbsp;</font></td>
      <td width="75" align="right" height="15" class="double" style="border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">1,861&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="52" align="right" height="15"><font face="Arial" size="2">$&nbsp;&nbsp;</font></td>
      <td width="75" align="right" height="15" class="double" style="border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">1,806&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
    <tr>
      <td width="19" height="21"></td>
      <td width="420" height="21"></td>
      <td width="18" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
      <td width="52" align="right" height="21"></td>
      <td width="73" align="right" height="21"></td>
    </tr>
    <tr>
      <td width="441" height="21" colspan="2"><font face="Arial" size="2">Ratio
        of Earnings to Fixed Charges</font></td>
      <td width="18" align="right" height="21"></td>
      <td width="75" align="right" height="21" class="double" style="border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">7.92&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
      <td width="52" align="right" height="21"></td>
      <td width="75" align="right" height="21" class="double" style="border-bottom-style: double; border-bottom-width: thick"><font face="Arial" size="2">6.92&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    </tr>
  </table>
  </center>
  </div>
  </center>

<p><font face="Arial" size="2">* Reasonable approximation of the
interest factor.</font></p>
<hr>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-15
<SEQUENCE>4
<FILENAME>ex15tenq0202.htm
<DESCRIPTION>EX-15 Q2 2002
<TEXT>
<html>

<head>
<title>Ex 15 Q2 02</title>
</head>

<body>

<p align="right"><font face="Arial" size="2"><b>Exhibit
15</b></font></p>
<p>&nbsp;</p>
<p><font face="Arial" size="2">August 1, 2002</font></p>
<p><font face="Arial" size="2">Securities and Exchange
Commission<br>
450 Fifth Street, N.W.<br>
Washington, D.C.&nbsp; 20549</font></p>
<p><font face="Arial" size="2">Commissioners:</font></p>
<p align="JUSTIFY"><font face="Arial" size="2">&nbsp;We
are aware that our report dated July 17, 2002 on our review of interim financial
information of United Technologies Corporation (the "Corporation") as of and
for the period ended June 30, 2002 and included in the Corporation's quarterly
report on Form 10-Q for the quarter then ended is incorporated by reference in
its Registration Statements on Form S-3 (Nos. 333-51830 and 333-60276), in the
Registration Statement on Form S-4 (No. 333-77991) as amended by Post-Effective
Amendment No. 1 on Form S-8 (No. 333-77991-01) and in the Registration
Statements on Form S-8 (Nos. 333-21853, 333-18743, 333-21851, 33-57769,
33-45440, 33-11255, 33-26580, 33-26627, 33-28974, 33-51385, 33-58937, 2-87322,
333-77817, and 333-82911).</font></p>
<p><font face="Arial" size="2">Yours very truly,</font></p>
<p>&nbsp;<font face="Arial" size="2">/s/ PricewaterhouseCoopers LLP<br>
PricewaterhouseCoopers LLP<br>
Hartford, Connecticut</font></p>
<hr>

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<SEQUENCE>6
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