HARTFORD, Conn., June 6, 2006 -- United Technologies Corp. (NYSE: UTX) announced today it has entered into an agreement with the U.S. Department of Defense to pay $283 million in settlement of government contract accounting matters. The agreement ends the previously reported litigation over Pratt & Whitney’s cost accounting for engine parts on commercial engine collaboration programs from 1984 through 2004.

The longstanding accounting disagreement had centered on the allocation of overhead costs between commercial and government programs. Since January 1, 2005, Pratt & Whitney has used an alternative method for allocating overhead costs, which is based on the value added by Pratt & Whitney in the manufacturing process. This methodology has been approved by the government.

Reserves relating to these matters exceeded the settlement amount by approximately $0.05 per share, and the company anticipates restructuring charges over the course of 2006 will equal or exceed this difference. UTC, parent of Pratt & Whitney, reaffirmed guidance of earnings per share in the range of $3.50 to $3.60 and cash flow from operations after capital expenditures equal to net income, both for the year.

United Technologies Corp. based in Hartford, Connecticut, is a diversified company that provides a broad range of high technology products and support services to the building systems and aerospace industries.

This release includes "forward looking statements" concerning expected revenue, earnings, cash flow and other matters that are subject to risks and uncertainties. Important factors that could cause actual results to differ materially from those anticipated or implied in forward looking statements include the health of the global economy; strength of end market demand in building construction and in both the commercial and defense segments of the aerospace industry; fluctuation in commodity prices, interest rates, foreign currency exchange rates, and the impact of weather conditions; and company specific items including the availability and impact of acquisitions, the rate and ability to effectively integrate these acquired businesses, the ability to achieve cost reductions at planned levels, and the outcome of legal proceedings. For information identifying other important economic, political, regulatory, legal, technological, competitive and other uncertainties, see UTC's SEC filings as submitted from time to time, including but not limited to, the information included in UTC's 10-K and 10-Q Reports under the headings “Business”, “Risk Factors”, "Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Cautionary Note Concerning Factors That May Affect Future Results,” as well as the information included in UTC’s Current Reports on Form 8-K.