Political Activities

United Technologies and its employees have a legitimate interest in participating in public policy debates. UTC’s government affairs initiatives are intended to educate and persuade officials and the public on a broad range of public policy issues that are important to the company’s businesses. These initiatives are consistent with the interests of UTC’s shareowners, and are not based on personal agendas of individual directors, officers, or employees. These efforts are supplemented by voluntary giving by individual employees to the United Technologies Corporation Federal Political Action Committee (“UTC PAC”); by membership in trade associations; and by encouraging grassroots support by employees and others for issues that affect our business objectives.

Policy & Oversight

All of these activities are pursued in accordance with the standards articulated in UTC’s Code of Ethics, which states: “UTC will comply with all national, state and local laws regulating UTC’s participation in political affairs, including limitations on contributions to political parties, national political committees, and individual candidates.” In addition, UTC’s Corporate Policy Manual (Section 5) permits UTC to provide financial support to state candidates, political parties, and organizations as permitted by law, and only after approval of the UTC Senior Vice President, Government Affairs and the UTC Senior Vice President & General Counsel. The Charter of the Public Issues Review Committee of the Board of Directors requires the Committee to review and monitor “UTC’s conduct of its public policy and government relations activities, including activities of any political action committees.” These reviews also include state and “527” contribution activities.

U.S. Federal Contributions

Every day, U.S. Government lawmakers make decisions that affect UTC’s businesses, and for this reason UTC supports candidates for public office who understand the company’s broad business objectives.

UTC makes no corporate contributions to federal candidates or federal political committees, as use of company funds for this purpose is prohibited by law. However, we support candidates for federal office via the UTC PAC. Like virtually all of our peer companies, we offer eligible employees an opportunity to coordinate and maximize the effect of their political efforts by contributing to the PAC, which primarily supports candidates for the U.S. Congress. UTC PAC offers employees, regardless of their political affiliations, a legal and ethical way to speak with a unified voice on issues important to our company.

The UTC PAC is non-partisan. It contributes to candidates supportive of UTC’s corporate business interests and public policy goals, regardless of political party, and also to national political organizations of both major parties. The bylaws of the UTC PAC provide basic organizational material and incorporate Federal Election Commission regulations. An 11-member Steering Committee meets monthly to review candidates and approve contributions. The Steering Committee consists of four employees from UTC's Global Government Affairs organization and one from each of UTC's major business units.

In addition to its bylaws, the UTC PAC adheres to the following principles:

• Participation by eligible employees is always voluntary;
• The PAC does not seek, request, or expect any specific benefit for its contributions to candidates or for any official act;
• The Steering Committee will report its contributions to elected officials and candidates as required by law, and to PAC contributors periodically; and
• PAC contributions are intended primarily for individuals seeking federal elective office. Contributions to leadership PACs, multi-candidate PACs, and organizational or association PACs are made only after the most careful and deliberate consideration.

The Steering Committee considers the following factors in deciding the timing and amount of contributions to candidates:

• The candidate's views (and voting record, in the case of incumbents) on issues critical to UTC's success;
• The presence of UTC facilities in the candidate's district;
• The congressional committees on which the legislator serves (in the case of incumbents); and
• The strength of the candidate and the impact a contribution and implied UTC endorsement might have on the race.

State Contributions

Corporate contributions to candidates for state-level office are permissible in certain states. However, in 2011, UTC business units made no such contributions to candidates for state offices.

Section 527 Activity

In 2009, UTC paid a membership fees of $10,000 each to the Republican Governor’s Association (RGA) and the Democratic Governors’ Association (DGA), both “527” organizations. The RGA and the DGA have assured us that those fees are used solely for operating expenses, with no part being used for contributions.

Trade Associations

We participate in trade associations to keep abreast of business and technical issues and emerging standards within our industries, and to be part of an important public education effort regarding major issues of common concern to our industries. We do not join trade associations for political purposes and we do not expect those associations of which we are a member to make political contributions or to be otherwise engaged in the political campaign process. Our participation in trade associations is subject to management oversight and membership requires management approval. Guidelines on trade association participation are provided in the UTC Code of Ethics and supplements to the Code, and these are available to all UTC employees.

Electioneering Expenditures

The U.S. Supreme Court determined in 2010 that corporations may make unlimited expenditures for independent communications to the general public that expressly advocate the election or defeat of a clearly identified federal candidate. UTC has not made any such expenditure in the past, and has no present plans to spend corporate funds directly on such communications. The Federal Election Commission, which regulates such activity, is considering regulatory changes following this Supreme Court decision, and the U.S. Congress is considering changes in law. UTC may review its position depending on the outcome of these initiatives. Any new policies or practices adopted by UTC would conform to applicable laws and be consistent with UTC’s Code of Ethics and the interests of UTC’s shareowners.

UTC PAC contributions made to candidates, political organizations, and leadership PACs:

2011-2012
Contributions to candidates for federal level office
Contributions to committees

2009-2010
Contributions to candidates for federal level office
Contributions to committees

2007-2008
Contributions to candidates for federal level office
Contributions to candidates for state level office
Contributions to committees

List of the trade associations to which UTC paid dues of $50,000 or higher in 2011 and the portion of these dues not deducted under Section 162(e)(1) of the Internal Revenue Code.