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UTC in VietnamOctober 2006Louis Chênevert

CARRIER | HAMILTON SUNDSTRAND | OTIS | PRATT & WHITNEY | SIKORSKY | UTC FIRE & SECURITY | UTC POWER

• Good Afternoon, I’m happy to have this opportunity totalk to you about UTC, and what UTC is doing in Vietnam.

• My plan for today, is to give you a brief overview of UTC –and then talk a little about some of our exciting newproducts.

• I also want to leave plenty of time to answer anyquestions and to have an open dialogue.

•However, before I get started I know there are a few issuesthat are of particular interest to this group –

•Permanent Normal Trade Relations for Vietnam,•Vietnam’s WTO accession; and•the upcoming Asia-Pacific Economic CooperationForum

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• UTC strongly supports Permanent Normal Trade Relations for Vietnam.

• Our team in Washington has been a strong advocate in urgingCongress to take action granting this status.

• We think this is overdue.__

• UTC is also a founding member of the US- Vietnam WTO Coalition and

strongly supports Vietnam’s WTO accession.

• The economic reforms this country has undertaken to gain entry to theWTO will make Vietnam a more competitive economy and a moreattractive place for UTC to do business

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• UTC supports APEC and the constructive role it plays in liberalizingtrade and regional economic development.

• Vietnam’s role as host next month of the APEC Leaders Summit shouldmake the leaders and people of Vietnam very proud.

• It signals Vietnam’s emergence as an important country in this area

///• Now, a little about UTC…

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UTC REVENUES2005

Carrier

Pratt &Whitney

Otis

UTCFire & Security

Sikorsky

HamiltonSundstrand

(29%)

US$42.7B (VND 677TR)

• UTC is a diverse, balanced and global company made up ofseven major operating units.

• Our products make 21st century life possible, includingelevators, air conditioners and jet engines….. I’ll talk abouteach division in detail later on in my presentation.

A few facts about UTC:

Revenues for 2005 were $43 Billion on our way to $47B for 2006

We employ over 220,000 people

We have more than 4,000 sites in 70 different countries, … and we conduct business in almost 200 countries.

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4

0

10

20

30

40

50

72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04

UTC REVENUESGrowth

International

United States

(US$ billions)

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(60%)

(40%)

• Last year more than 60% of our total revenue was generatedoutside of the United States – up dramatically in the past 25years.

• We expect international markets will continue to play anincreasingly important role in future growth.

• As I said before, UTC is a very diverse company, ourrevenue sources are well balanced between the U.S, Europeand Asia

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United States

OtherAsia Pacific

CanadaLatin

America

Europe

UTC REVENUES2005

US$42.7B (VND 677TR)

• Last year:

• Almost half of our revenue was related to sales in theU.S.

• Next was revenues from sales in Europe, and

• then from sales in Asia.

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Australia

Other

South Korea

New Zealand

Singapore

UTC ASIA REVENUES2005

IndiaChina

Japan

US$8B (VND 127TR)

• UTC’s Asia revenues were $8B last year.

• Compared with some other countries in Asia, Vietnamis still very much an emerging or developing market forUTC

• Last year our revenues from Vietnam were less than 1%of our total Asian revenues.

• As Vietnam’s economy continues to grow and the rate ofurbanization increases, we see great market opportunitiesfor many of our products.

• A little more on the impact of urbanization in Asia…

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0

500

1000

1500

2000

2500

3000

1950 55 60 65 70 75 80 85 90 95 00 05 10 15 20 25 2030

URBANIZATIONAsia

(millions of urban inhabitants)

Source: United Nations population division, world population prospects

232 280 337408

485574

692837

10121182

1557

1763

1981

2206

1366

2432

2657

• Urbanization is one of the most powerful forces of change inAsia today.

• In 2000 32% of Asia residents lived in urban areas - this isprojected to grow to 52% by 2030.

• To put that in perspective, China, for example, is expected tourbanize at a rate equivalent to adding a New York and LosAngeles every year for at least the next decade….

• Urbanization will also be a key force in Vietnam….

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0

10

20

30

40

50

1950 55 60 65 70 75 80 85 90 95 00 05 10 15 20 25 2030

URBANIZATIONVietnam

(millions of urban inhabitants)

Source: United Nations population division, world population prospects

3.2 3.9 4.96.3 7.9 7.9

10.3 11.613.4

16.2

22.5

26.4

30.8

35.8

19.1

41.1

46.8

• Vietnam’s urban population is expected to more than doublein the next 25 years

• Urbanization usually occurs with growth in GDP. In Vietnam,GDP growth has been averaging about 7% a year and isprojected to continue at that pace or better for the foreseeablefuture.

• This means greater demand for products used in theconstruction industry like elevators and HVAC systems.

• This is good news for a company like UTC

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Home comfort Building systems Food safety

• Our Carrier Division is the world’s largest producer ofheating, ventilating and air conditioning equipment

• In the US, Carrier produces a residential air conditioning unitevery six seconds

• Today, carrier has a little under one-third of the VietnameseHVAC market

• While the market in Vietnam is relatively small by globalstandards – we see a great potential for future demand drivenby urbanization.

• New construction also presents great opportunities for ourOtis elevator business….

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Elevators Escalators Moving walkways

Elevators Escalators Moving Walkways

• Otis is the world’s largest manufacturer of elevators andescalators.

• Today, Otis’ 1.8 million elevators and 115,000 escalatorsmove the equivalent of the Earth’s entire population every ninedays.

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• As the economy grows, we also expect growth incommercial airline traffic to continue, which is good news forour aero-space divisions.

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PRATT & WHITNEY

• Pratt & Whitney, is a world leader in the design, manufacture,and support of turbine engines for commercial and militaryapplications.

• A Pratt & Whitney-powered aircraft takes off every second ofevery day.

• Pratt & Whitney also powers the worlds most advanced fighterjets.

• Pratt & Whitney is also the leading engine supplier for verylight jets --- an exciting new segment with the potential torevolutionize passenger travel by opening up thousands ofsmall airports

• Pratt & Whitney has a strong relationship with VietnamAirlines – providing the power for a number of their aircraft

• Another of our divisions, Sikorsky, is a premier designer andmanufacturer of advanced helicopters

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SIKORSKY

• Sikorsky’s S-92 is the safest helicopter in the world

• Last year, Sikorsky helicopters were involved in the rescue ofmore than 44,000 people from disaster sites around the world –including hurricane Katrina

• We see near-term opportunities in Vietnam for Search andRescue helicopters as Vietnam’s National Committee on SARseeks to replace their existing aircraft...

•There are also opportunities for providing helicopters to oil andgas companies in Vietnam

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• Hamilton Sundstrand, rounds out our aerospace portfolio. Theywill provide 9 major systems for Boeing’s new 787 Dreamliner…

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HAMILTON SUNDSTRANDAuxiliary

Power SystemRemote Power

Distribution Units

Primary PowerDistribution System

Nitrogen GenerationSystem

HybridRam AirTurbine

ElectricMotor Pump

Electric Power Generationand Start System

Engine GearboxSystem

Electric EnvironmentalControl System

Fire ProtectionSystem

•Hamilton was also recently selected to provide 13 systemsfor NASA’s new Crew Exploration Vehicle that will replacetoday’s Space Shuttle

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• Our newest business, UT Fire and Security monitors morethan a million fire and security systems around the world

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UTC FIRE & SECURITY

• In addition, UT Fire & Security manufactures85,000 smoke and CO2 detectors each day, and over12,000 miles of fire hose each year

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• At UTC, we are really excited about the future ofFuel Cells …. And UTC Power is the world leader inFuel Cell technology

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UTC POWEROn-site power systemsOn-Site Power Systems Bus Fuel Cells

Automotive Fuel Cells Space & Defense Fuel Cells

• Urbanization presents some unique challenges & opportunitiesin the areas of energy consumption & environmental impact.

• Our Fuel Cells represent the only technology that makes electricpower in a 100% environmentally friendly way

• I note that Fuel Cell technology is not new at UTC…, our fuelcells have provided electric power for every US manned spaceflight for the past 40 years

• Today, our Fuel Cells have been installed in 19 countries on fivecontinents, and

• We believe that as the world urbanizes and more attention isfocused on the environment, Fuel Cells will change the way wethink about power generation and distribution. ……

• We also see fuel cell opportunities in transportation….

• Fuel efficiency and fewer harmful emissions are key features ofmany of our new products.

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Otis Gen2

•The Gen2 elevator system is engineered to cut energy costs

• It is 70% more efficient than conventional elevators and itsregenerative drive actually generates electricity as the elevatordescends.

• On top of that, the Gen2 system eliminates the need for repeatedlubrication, clean-up and hazardous waste disposal.

• On the Aero-space side, our next generation engines will be,quieter, more fuel efficient and produce less harmful emissions…..

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Geared Turbo Fan

• Compared to today’s engine’s, the GTF provides:

• Greater fuel efficiency -- 11 to 12 % improvement in fuelburn

• It also produces less noise -25 to 31 dB reduction;

•Less pollution through reduced combustor emissions…

• And, a 12 to 15% reduction in operating cost relative totoday’s aircraft engines……

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• At UTC, energy efficiency and lower environmental impactsare engineered into our manufacturing processes as well asour products, and the results have been remarkable…

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Sustainable Development

• Our total energy consumption is down 18% since 1997 despiteincreases in production volume

• UTC water consumption worldwide is down 44 % during thesame time period --

That’s a savings of 2.1 billion gallons -- enough to supplyalmost 14 million average adults with drinking water for 1year -- Or, enough to fill 11 billion water bottles like this onethat you have at your seat

• Our air emissions and hazardous wastes are down by about90% at U.S. operations since 1990

• We have done this while continuing to deliver unprecedentedgrowth in revenues and shareholder return -- demonstrating thatwhat is good for the environment can be good for business too..

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5,000

10,000

15,000

20,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2Q2006

Total UTC

(degrees)

UTC SCHOLAR PROGRAM

1,774

3,228

5,044

7,064

8,909

11,171

13,491

15,830

789

18,457

19,790

• UTC’s future is also dependent on having the best workforce.That’s why we fund our Employee Scholar Program

• This program is one of the most comprehensive employer-sponsored education programs in world.

• Under the ESP UTC pays 100% of the costs for employeeswho go back to school, including tuition, fees and books. And,when they graduate we grant them a stock award.

• Employees can enroll in classes and obtain a degree in anyfield, whether or not it is related to their jobs.

• Since its inception ten years ago more than 19,000 employeesreceived degrees for a total UTC investment of almost $600M.

• There are currently more than 13,200 employees enrolled,more than 5,000 of them international employees.

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Vietnam today… and tomorrow

• Now I’d like to take my final few minutes and talk about what I seefor Vietnam.

• I applaud the government for taking the necessary action to attainWTO membership and congratulate Vietnam on hosting next monthsAPEC meeting.

• Vietnam’s liberalized economic policy has led to growing foreigninvestment and rising incomes, particularly in Hanoi and Ho Chi MinhCity

• Urbanization and the rise in GDP are good signs for a strong future.

•As I visited different locations in this country I saw optimism, energyand vitality – these are also good signs for a bright future forVietnam…

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UTC in VietnamOctober 2006Louis Chênevert

CARRIER | HAMILTON SUNDSTRAND | OTIS | PRATT & WHITNEY | SIKORSKY | UTC FIRE & SECURITY | UTC POWER

• Thank you, and at this time I am happy to take yourquestions

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