“ Our relentless focus on our four key
priorities — innovation, execution,
cost reduction and disciplined capital
allocation — is the reason we are
optimistic about our future.”

GREG HAYES, CHAIRMAN & CEO

2016 Annual Report

12 13 14 15 16

51.1
56.6 57.9 56.5 57.4

ADJUSTED
NET SALES1

Dollars in billions

12 13 14 15 16

3.5

4.1
4.5

3.9
3.7

RESEARCH AND
DEVELOPMENT2

Dollars in billions

12 13 14 15 16

4.75

5.72
6.46 6.30

6.61

ADJUSTED DILUTED EARNINGS
PER COMMON SHARE FROM
CONTINUING OPERATIONS1

Dollars per share

12 13 14 15 16

2.03
2.20

2.36
2.56 2.62

DIVIDENDS PAID
PER COMMON SHARE

Dollars per share

12 13 14 15 16

6.0

7.3 7.0 6.8
6.4

CASH FLOW FROM
OPERATIONS3

Dollars in billions

12 13 14 15 16

46

38 38
41

45

DEBT TO CAPITAL4

Percent

United Technologies Corp.
(UTC) is a leader in the global
building and aerospace
businesses. Our company was
founded by some of the world’s
greatest inventors. Our 200,000
employees continue their
commitment to innovation. Our
large investments in technology
enable us to develop new and
improved ways to keep people
safe, comfortable, productive
and on the move. By combining
a passion for science with
precision engineering, we create
the smart, sustainable solutions
that move the world forward.

Our commercial building
businesses comprise Otis, the
world’s leading manufacturer
of elevators, escalators and
moving walkways; and UTC
Climate, Controls & Security,
a leading provider of heating,
ventilating, air-conditioning,
refrigeration, fire and security
systems, and building
automation and controls. Our
aerospace businesses consist
of Pratt & Whitney aircraft
engines and UTC Aerospace
Systems. We also operate a
central research organization
that pursues technologies for
improving the performance,
energy efficiency and cost of
our products and processes.

To learn more, visit
www.utc.com.

CONTENTS

01 Letter to Shareowners

04 Business Highlights

09 Financials

32 Cautionary Note
Concerning Factors
That May Affect
Future Results

71 Reconciliation of
Non-GAAP Measures
to Corresponding
GAAP Measures

72 Board of Directors

73 Leadership

74 Shareowner Information

INSIDE BACK COVER
Sustainability

Recognition

FINANCIALS
United Technologies provides high-technology products and services to the aerospace and commercial
building industries worldwide. In 2016 UTC adjusted net sales were $57.4 billion.

BUSINESSES IN BALANCE
UTC’s portfolio is balanced across customer segments, markets and geographies.

1 Adjusted net sales and adjusted diluted earnings per share from continuing operations are non-GAAP financial measures.
For the corresponding measures calculated in accordance with generally accepted accounting principles (GAAP) and a
reconciliation of the differences between the non-GAAP and GAAP measures, please refer to page 71 in this Annual Report.

² Amounts include company- and customer-funded research and development.
3 Amounts presented for 2012 to 2015 have been restated to reflect the adoption in 2016 of Accounting Standards Updates

No. 2016-15 and No. 2016-18. Refer to the financial section, which begins on page 9, for additional information.
4 The increase in the 2016 debt to capitalization ratio primarily reflects debt issuances in 2016 to fund share repurchases and

for general corporate purposes.

38%
20%

28%

50%

12%

38%

46% 54%

14%

United
StatesAsia

Pacific

Europe

Commercial &
Industrial

Commercial
Aerospace

Aftermarket
Original
Equipment
Manufacturing

Military Aerospace &
Space Other

NET SALES BY GEOGRAPHY

as a percent of total net sales
NET SALES BY TYPE

as a percent of total net sales

38%
20%

28%

50%

12%

38%

46% 54%

14%

United
StatesAsia

Pacific

Europe

Commercial &
Industrial

Commercial
Aerospace

Aftermarket
Original
Equipment
Manufacturing

Military Aerospace &
Space Other

NET SALES BY GEOGRAPHY

as a percent of total net sales
NET SALES BY TYPE

as a percent of total net sales

2016 will be remembered as a solid
year for our company. Importantly, it
was a year in which United Technologies
returned to its performance tenet to
under promise and over deliver. We
delivered adjusted earnings per share
of $6.61,* just above the full year
expectations of $6.30 to $6.60 that we
communicated in December 2015.

Despite headwinds from our investments in inventory and capital to
support the unprecedented production ramp up in our aerospace
businesses, we generated $4.7 billion of free cash flow.* We also
delivered on our commitment to return value to our shareowners,
raising our dividend for the 80th consecutive year. United Technologies
remains on track to return more than $22 billion to shareowners
through dividends and share repurchases from 2015 through 2017.
Even as we returned record amounts to our shareowners,
we continued to invest for the future in both our aerospace and
commercial buildings businesses, spending $3.7 billion on research
and development and $1.7 billion on capital expenditures. These
investments will improve efficiency in our facilities and support
organic growth in the coming years.
Throughout 2016 we achieved impressive milestones and
strengthened the competitive position of our four global businesses:
Otis, Pratt & Whitney, UTC Aerospace Systems and UTC Climate,
Controls & Security. We aggressively managed costs in all of our
businesses and moved forward on a multiyear, approximately
$1.5 billion restructuring plan.
Our 2016 results are due to a continuing focus on our four
key priorities: innovation, execution, cost reduction and disciplined

capital allocation. These four priorities will continue to drive our
performance over the coming years.

STRENGTH IN THE FACE OF GLOBAL UNCERTAINTY

These last few years have seen unprecedented global change. As
we look ahead, rapid change will become the new normal for the
world. 2016 brought us Brexit and a new U.S. administration as the
tensions arising from globalization were manifested at the ballot box.
With upcoming elections in Europe and slowing growth in China and
emerging markets, these trends may continue in the coming year,
creating uncertainty and instability in the global economy.
Our continued commitment to our four key priorities combined
with our portfolio of industry-leading businesses, global footprint
and scale, and a strong balance sheet provide us with sustainable
competitive advantages. They also give us confidence in our ability
to deliver even in the most challenging of environments.
We are well-positioned to achieve our long-term growth
objectives. We have made the right investments, and we have the
right management team in place. We will continue to invest in our
people and our technologies so that we create value for customers
and deliver the returns our investors expect.

A FOUNDATION FOR FUTURE GROWTH

We achieved several notable milestones during the year.
Otis continued to deliver solutions to the world’s most iconic
buildings. During the year Otis was awarded significant contracts in
China and India where urbanization is occurring rapidly, including the

Greg Hayes
Chairman & CEO

United Technologies Corporation | 01

DEAR
SHAREOWNER

* Adjusted earnings per share and free cash flow are non-GAAP financial measures.
For additional information regarding the use of these measures, the corresponding
amounts prepared in accordance with generally accepted accounting principles
(GAAP) and a reconciliation of the differences between the non-GAAP and GAAP
measures, please refer to page 71 in this Annual Report.

02 | 2016 Annual Report

Gregory J. Hayes
Chairman & CEO

Shenzhen Financial Centre and two properties for Taj Hotels Resorts
and Palaces in Mumbai. It was also recently awarded a major
contract to modernize elevators in Chicago’s Willis Tower, the tallest
building in the United States by highest occupied floor.
UTC Climate, Controls & Security launched 132 new products
in 2016 that are expected to generate organic sales growth. With a
strong portfolio of respected brands such as Carrier, Kidde, Chubb
and Carrier Transicold, UTC Climate, Controls & Security has a
reputation for providing customers with the most innovative, energy-
efficient and cost-effective products on the market.
Pratt & Whitney’s Geared Turbofan engine successfully entered
into service early in the year, delivering on its promise of 16 percent
greater fuel efficiency, 75 percent reduction in noise footprint and
50 percent reduction in regulated emissions. Customer demand
for the GTF engine remains exceptionally strong with more than
8,000 orders, including options, at the end of 2016.
UTC Aerospace Systems enabled entry into service of the
Airbus A320neo and Bombardier C Series and the first flights of the
Embraer E2 and Boeing 737 MAX. With state-of-the-art systems and
controls present on virtually every aircraft in service, UTC Aerospace
Systems is well-positioned for growth.
Our strategy to continue providing innovative, cost-
competitive and sustainable technologies for the aerospace and
building industries and our relentless focus on our four key priorities
are the reasons we are optimistic about our future.

A FUTURE PROPELLED BY MEGATRENDS

Urbanization and the resulting growth in large cities, an expanding
middle class and growth in commercial air travel provide significant
opportunities for our businesses over the next 15 years.
The urban population is projected to grow by 1 billion people
by 2030, and the middle class is expected to double over the same
period to almost 60 percent of the global population. These trends
will drive the need for more housing, office buildings and mass
transportation, along with demand for climate controls, food safety,
elevators and moving walkways, and fire and security systems.
Another trend is the dramatic growth in commercial air travel.
Today there are approximately 27,000 aircraft in service. By 2030
that number is expected to grow to 47,000. Our unique position on
these new aircraft will allow us to benefit from the growing demand
for jet engines and advanced aerospace systems.

AN INVESTMENT IN FUTURE TECHNOLOGY

Our investment in innovation continues both in research and
development and in the execution of our digital strategies. In
2016 we launched initiatives in each of our businesses to capitalize
on the significant opportunities presented by an increasingly
connected world.
Otis services more than 1.9 million elevators and is deploying
digital tools to its 31,000 mechanics to improve field productivity
and service performance for customers. With 40 percent more

sensors than the V2500, Pratt & Whitney’s GTF engine can generate
approximately 4 million data points per engine per flight, allowing us
to proactively monitor engine performance, minimize disruption and
predict future maintenance needs.
These are just a few examples of how digital technology is
advancing our company. By developing different solutions in each
of our businesses to capture and analyze the vast amounts of data
generated by our high-technology products and systems, we are
able to drive efficiency into our businesses and create greater value
for our customers.
As digitalization continues to change the way we approach
our business, our ability to anticipate and adapt to change is critical.
We continue to implement new and better ways to work faster and
smarter to enable our future performance.

AN INVESTMENT IN OUR PEOPLE

While our investment in new technology is critical, I am reminded
constantly that companies don’t innovate, people do. Our most
important investments, therefore, are the ones we make in
our people.
We are proud to have celebrated the 20th anniversary of our
Employee Scholar Program in 2016. Through the ESP we cover the
costs for our employees to continue their education in whatever
field they choose. Since its inception, more than 45,000 employees
from more than 60 countries have participated in the ESP, earning
more than 38,500 degrees. We encourage our employees to develop
the skills they need, not only for their current jobs, but also for the
jobs of tomorrow. The forces of globalization cannot be ignored or
disputed, and the skills of today will not guarantee success in the
future. At United Technologies we understand that only a highly
educated, world-class workforce will enable us to survive and thrive
in the competitive world in which we live. Education will be the
differentiator of the future.
We also have a diverse and global workforce that embraces
many different viewpoints, but we all share a common commitment
to maintaining the highest ethical standards and creating a safe and
healthy work environment. We are leaders in sustainability, working
to solve tomorrow’s environmental challenges in our facilities and
with our products. And we partner with communities around the
world to inspire the next generation of leaders.
I want to thank our 200,000 employees for their commitment
and dedication throughout the year. Every day we strive to make
United Technologies the best it can be. I look forward to another
great year in 2017 and beyond.

United Technologies Corporation | 03

2016 was a good year for United Technologies. But no
matter how much we accomplish, we recognize that
there is always more to do. The competitive landscape
is changing at a rapid pace, requiring companies to be
flexible and adapt quickly. That is why we approach our
work with a sense of urgency — so that no matter what
the business environment, we deliver the results that our
shareowners and customers expect of us.

DOING MORE
MORE TO DO

Otis is the world’s leading manufacturer and maintainer of people-
moving products, including elevators, escalators and moving
walkways. Otis offers products and services in approximately
200 countries and territories, and maintains more than 1.9 million
elevators and escalators worldwide.

Otis can be found in many of the world’s most iconic buildings. In 2016
Otis was selected to modernize elevators in Chicago’s Willis Tower, the
tallest building in the United States by highest occupied floor.
Demonstrating its commitment to innovation, Otis increased its
investment in research and development by 25 percent in 2016 and
plans to double it over the next few years. The resources are directed
at developing transformational technologies that deliver greater energy
efficiency, enhanced service, and increased comfort, convenience and
connectivity for passengers. As part of this effort Otis China will build a
new engineering research center in Shanghai to develop new products
and service technologies for the large China segment and other global
markets. The center will include one of the world’s tallest above-ground
test towers.
Otis is working on new digital tools and technologies that will
transform its elevator service network and enable greater connectivity
with customers. In 2016 Otis began equipping its 31,000 mechanics
with sophisticated digital tools and applications that will use big data

to drive condition-based monitoring and maintenance. Otis and UTC
Climate, Controls & Security are exploring other opportunities to develop
digital solutions for integrated, smart building equipment.
During the year Otis unveiled its new intelligent, connected elevator,
the Gen2 Life. Based upon its proprietary Gen2 technology, the Gen2
Life offers higher energy efficiency, optimizes space requirements and
enables greater connectivity for building owners and users. It also offers
customers new interior design packages with more than 400,000 options.
Otis achieved a number of milestones in 2016, including the
installation of the world’s longest rise double-deck elevator in South
Korea’s Lotte World Tower, the country’s tallest building. The elevator
can carry 54 passengers from the ground to an observation deck on
the 121st floor in one minute. Otis also marked the sale of its 500,000th
Gen2 elevator during the year, one of its most energy-efficient and
best-selling elevators. Otis continued to be awarded contracts for major
projects in China and India where the building market is especially large.

04 | 2016 Annual Report

OTIS $11.9B
NET SALES

$2.2B*
ADJUSTED
OPERATING PROFIT

67,396
EMPLOYEES

INNOVATIVE
ICONIC
LANDMARKS

A city of skyscrapers, Chicago has long been defined by
Willis Tower. Otis, the company that invented the modern
elevator and sets the industry standard, has been selected
to modernize elevators in this landmark building.

* Adjusted operating profit is a non-GAAP financial measure. For additional information
regarding the use of this measure, the corresponding amount prepared in accordance with
generally accepted accounting principles (GAAP) and a reconciliation of the differences
between the non-GAAP and GAAP measure, please refer to page 71 in this Annual Report.

United Technologies Corporation | 05

UTC CLIMATE,
CONTROLS &
SECURITY

$16.9B
NET SALES

$3.1B*
ADJUSTED
OPERATING PROFIT

56,475
EMPLOYEES

SAFER
SMARTER
BUILDINGS

Backed by more than 80 of the world’s most
respected brands, UTC Climate, Controls &
Security is at the forefront of developing digital
products that can be connected to provide
safety, comfort, convenience and greater
productivity for a building’s occupants. At the
same time, it builds on a legacy of innovation,
continuing to deliver products that are energy
efficient, environmentally responsible and
cost competitive.

UTC Climate, Controls & Security promotes safer and smarter
sustainable buildings with state-of-the-art fire safety, security,
building automation, heating, ventilating, air-conditioning and
refrigeration systems and services.

UTC Climate, Controls & Security continues to build momentum for long-
term growth in an increasingly urban and connected world. It is backed
by a portfolio of more than 80 leading brands, a strong global presence
and a commitment to operational excellence. Innovation is a key
differentiator. This business consistently invests to deliver state-of-the-art
products and to enhance the performance of existing lines.
The company’s commitment to research and development
can be seen in the 132 new products launched in 2016. Among them
was Carrier’s new AquaEdge 19DV centrifugal chiller that offers
excellent performance and leading efficiency with a next-generation,
environmentally sustainable refrigerant. Carrier introduced the Côr home
automation system, which enables homeowners to secure, control and
remotely manage their homes’ most critical systems from a mobile app.
Onity delivered its digital DirectKey mobile access solution, providing
hotel guests a secure way to use their smartphone as a room key and
access other controlled areas.
The company broke ground in transport refrigeration when
U.K. food retailer Sainsbury’s became the first customer to take delivery
of Carrier Transicold’s prototype natural refrigerant trailer unit. The
new-generation system uses low global warming potential carbon
dioxide refrigerant, a safe and non-ozone depleting gas that sets the

standard for refrigerants and supports advances toward a smart,
sustainable cold chain.
Research and development investment remains a priority. The new
Hyderabad Research & Design Center in India opened and is expected to
become the largest center supporting R&D for UTC Climate, Controls &
Security. The Center of Excellence in Culoz, France, also opened. The
facility focuses on innovations that improve air quality and treatment,
shorten new product development, and improve energy performance
and user comfort. Along with Otis, UTC Climate, Controls & Security also
announced plans to establish a research center of excellence with the
University of Maryland.
UTC Climate, Controls & Security continues to expand its global
presence. As one example, the acquisition of approximately 70 percent
of Riello Group, S.p.A., a leading Italian heating company, has opened
key segments in Europe and elsewhere.
In all of its work, UTC Climate, Controls & Security remains a
leader in the green building movement. During the year it broke ground
on the UTC Center for Intelligent Buildings, a state-of-the-art showcase
designed to provide visitors a new way to interact with current and
emerging building technologies. The center, scheduled for completion
in 2017 and targeted to be LEED certified, will be located in Palm Beach
Gardens, Fla.

* Adjusted operating profit is a non-GAAP financial measure. For additional information
regarding the use of this measure, the corresponding amount prepared in accordance with
generally accepted accounting principles (GAAP) and a reconciliation of the differences
between the non-GAAP and GAAP measure, please refer to page 71 in this Annual Report.

06 | 2016 Annual Report

Pratt & Whitney is a world leader in the design, manufacture and
service of aircraft engines and auxiliary power units.

Pratt & Whitney is entering a new era of growth propelled by demand for
its revolutionary Geared Turbofan commercial engines; Pratt & Whitney
Canada’s leading civil aircraft engines, including a powerful new line for
business jets; and its military engines, including the F135 engine for the
F-35 Lightning II aircraft, the most technologically advanced fighter jet
in history.
The GTF engine is transforming the aviation industry as the most
sustainable engine on the market. In 2016 GTF engine orders increased
to more than 8,000, including options. Since its entry into service in early
2016 it has delivered its promised 16 percent reduction in fuel burn,
50 percent fewer environmental emissions and a noise footprint that is
reduced by 75 percent.
As the GTF continues to enter service, Pratt & Whitney is
taking steps to offer customers a strong maintenance, repair and
overhaul network that provides global reach, choice and value. During
the year it announced a $65 million investment in its engine overhaul
facility in Columbus, Georgia, a site with decades of high-volume
engine maintenance experience. Other members of the GTF network
include MTU Aero Engines, Japanese Aero Engines Corporation and
Lufthansa Technik.

Pratt & Whitney Canada continues to prove why it sets the
industry standard for civil aircraft engines. In 2016 it received two engine
certifications and one aircraft certification. In addition its PW815GA
engine powered the first flight of the Gulfstream G600, a next-generation
business jet. To enhance customer service, Pratt & Whitney Canada
introduced MyP&WC Power, an online portal that enables customers to
connect with the company and access information and support tools.
On the military front, Pratt & Whitney was announced as the
engine provider for the U.S. Air Force’s B-21 Raider. The U.S. Air Force
declared Initial Operational Capability on the F-35A, signaling that it had
met all key criteria to be considered combat ready. The U.S. Air Force
also awarded the company a contract for the development of a future
combat engine through its Adaptive Engine Transition Program.
Late in the year the U.S. Army selected Advanced Turbine
Engine Company, a joint venture of Pratt & Whitney and Honeywell,
for the preliminary design of a new engine for Black Hawk and
Apache helicopters.

PRATT &
WHITNEY

$15.1B*
ADJUSTED
NET SALES

$1.8B*
ADJUSTED
OPERATING PROFIT

35,104
EMPLOYEES

EVERY ENGINE

EVERY PARAMETER
EVERY SECOND

* Adjusted net sales and adjusted operating profit are non-GAAP financial measures. For
additional information regarding the use of these measures, the corresponding amount
prepared in accordance with generally accepted accounting principles (GAAP) and a
reconciliation of the differences between the non-GAAP and GAAP measure, please refer
to page 71 in this Annual Report.

The Bombardier CS300 is powered by Pratt &
Whitney’s revolutionary Geared Turbofan engine.
Equipped with state-of-the-art technologies, every
engine is monitored every second from hundreds
of data parameters. Massive amounts of data are
generated, which are analyzed and used to predict
an aircraft’s performance and offer individualized
service to customers.

United Technologies Corporation | 07

UTC Aerospace Systems is one of the world’s largest suppliers of
advanced aerospace products and systems for commercial, military
and space customers.

UTC Aerospace Systems is on virtually every aircraft in service and is
well-positioned to support the extraordinary growth forecast for the
commercial aviation industry. During the year its advanced systems
enabled the first flights of the Embraer E2, the Boeing 737 MAX and the
Gulfstream G600 as well as the entry into service of the Airbus A320neo
and the Bombardier C Series.
This business is at the forefront of more electric, more intelligent
and more integrated aircraft. One example is the work it is doing for
Hawaiian Airlines. During the year it was chosen to provide state-of-the-
art electronic flight bag systems for enhanced functionality, greater safety
and stronger cybersecurity. For flight crews, the new electronic flight
bag systems enhance their ability to evaluate aircraft performance and
weather conditions in real time.
UTC Aerospace Systems also has developed a revolutionary
design approach to the secondary power distribution system, the
“nerve center” of an airplane’s power system. The patent-pending
process enables a rapid development cycle for managing and protecting
an aircraft’s electrically powered devices. The new technology has been
deployed on Embraer’s E190-E2 regional jets.
Work is underway on an advanced mobile app to bring preflight
and inflight information to a pilot’s tablet. Users will be able to access

intelligent analytics wherever they are, allowing them to adjust aircraft
operations based on real-time data. The easy access to information is
expected to improve fuel consumption, on-time departures and arrivals,
and eliminate paper-based processes.
Another major development is a lighter and more compact
advanced integrated drive generator to provide electrical inflight power
on Embraer’s new E190-E2. The new generator supplies the constant
frequency electric power needed for the aircraft — which is equivalent to
the amount of electricity needed to power 48 homes — and does so with
the added benefit of cost and fuel savings.
On the military front, UTC Aerospace Systems continues to
move its MS-177 multi-spectral and long-range imaging sensor system
to new heights. During the year the sensor completed a series of flight
demonstrations from a high-altitude, long-endurance unmanned aerial
system, performing successfully in both land and maritime mission
environments. The U.S. Air Force awarded UTC Aerospace Systems 
a contract to expand and enhance the sensor’s multi-spectral
resolution reach.

UTC Aerospace Systems is advancing modern
flight with sophisticated systems that make aircraft
more electric, more intelligent and more integrated.
The vast amount of data generated by these
systems is gathered, analyzed and delivered in real
time to enhance the safety, efficiency and overall
performance of an aircraft.

MORE ELECTRIC

MORE INTEGRATED
MORE INTELLIGENT

UTC AEROSPACE
SYSTEMS

$14.5B
NET SALES

$2.3B*
ADJUSTED
OPERATING PROFIT

40,959
EMPLOYEES

* Adjusted operating profit is a non-GAAP financial measure. For additional information
regarding the use of this measure, the corresponding amount prepared in accordance with
generally accepted accounting principles (GAAP) and a reconciliation of the differences
between the non-GAAP and GAAP measure, please refer to page 71 in this Annual Report.

1. Daniel Słowik Pratt & Whitney
POLAND

2. Shobha Guggari UTC Aerospace
Systems INDIA

3. George Deese UTC Climate,
Controls & Security
UNITED STATES

4. Sarah Dixon Otis
UNITED KINGDOM

5. Galina Dineva UTC Climate,
Controls & Security BELGIUM

6. Buyun Jing United Technologies
Research Center CHINA

7. Courtney Dornell Otis
UNITED STATES

8. Zhijun Ni Otis CHINA

9. Lily Fu Pratt & Whitney CHINA

10. John Sullivan UTC Aerospace
Systems UNITED STATES

1

5

8

2

6

9

3

7

10

08 | 2016 Annual Report

We take pride in being known as a company that sets big goals and
delivers big results. We do this by having a highly educated, engaged
and motivated workforce. The Employee Scholar Program helps
make that possible.

In 2016 we celebrated the 20th anniversary of the ESP, a program that
has been recognized by educators and media for its generosity — but
more important for its focus on helping employees stay abreast of their
current field or develop skills in new ones. In today’s highly competitive
business environment, it is essential that we have a workforce that can
adapt quickly and recognize the opportunities that a changing business
environment brings. By encouraging lifelong learning — and helping
employees achieve it — we build a high-performance culture that is never …