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<div style="font-size:12pt"><p>The Condensed Consolidated Financial Statements at September 30, 2009 and for the quarters and nine months ended September 30, 2009 and 2008 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. We have evaluated for disclosure subsequent events that have occurred up to October 23, 2009, the date of issuance of our financial statements. 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. The financial information included herein should be read in conjunction with the financial statements and notes in our Annual Report to Shareowners (2008 Annual Report) incorporated by reference to our Annual Report on Form 10-K for calendar year 2008 (2008 Form 10-K). Certain reclassifications have been made herein to 2008 amounts to conform to the current year presentation of noncontrolling interests and collaborative arrangements as required by the Consolidation Topic and Collaborative Arrangements Topic, respectively, of the FASB Accounting Standards Codification (FASB ASC). For further information, see discussion in Notes 9 and 11, respectively, to the Condensed Consolidated Financial Statements.</p></div>
<div style="font-size:12pt"><p>Note 1: Acquisitions, Dispositions, Goodwill and Other Intangible Assets<br /><br />Business Acquisitions. We account for business combinations as required by the provisions of the Business Combinations Topic of the FASB ASC, which includes provisions that we adopted effective January 1, 2009. The accounting for business combinations retains the underlying concepts of the previously issued standard in that all business combinations are still required to be accounted for at fair value, but changes the method of applying the acquisition method in a number of significant aspects. Acquisition costs are generally expensed as incurred; noncontrolling interests are valued at fair value at the acquisition date; in-process research and development is recorded at fair value as an indefinite-lived intangible asset at the acquisition date; restructuring costs associated with a business combination are generally expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally affect income tax expense. These changes are effective on a prospective basis for all of our business combinations for which the acquisition date is on or after January 1, 2009, with the exception of the accounting for valuation allowances on deferred taxes and acquired tax contingencies. Adjustments for valuation allowances on deferred taxes and acquired tax contingencies associated with acquisitions that closed prior to January 1, 2009 would also apply the revised accounting for business combination provisions. <br /><br />During the first nine months of 2009, our investment in businesses was approximately $557 million. Investments in the third quarter of 2009 amounted to $360 million, primarily reflecting the acquisition of additional shares in GST Holdings Limited (GST), a fire alarm system provider in China. The acquisition of these additional shares in GST increased our share ownership from 29% to 99% and further strengthens UTC Fire & Security’s presence in the Chinese fire safety industry. The remainder of our investment in businesses for the first nine months of the year consisted of a number of small acquisitions in both our commercial and aerospace businesses. For acquisitions completed prior to January 1, 2009, the final purchase price allocation of all acquired businesses is subject to the completion of the valuation of certain assets and liabilities, as well as plans for consolidation of facilities, relocation or reduction of employees and other restructuring activities. For acquisitions occurring on or after January 1, 2009, during the measurement period we will recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period shall not exceed one year from the acquisition date. Further, any associated restructuring activities will be expensed in future periods and not recorded through purchase accounting as previously done for acquisitions occurring prior to January 1, 2009. There was no significant impact on our acquisition activity in the first nine months of 2009 from these changes in the provisions of accounting for business combinations.<br /><br />During the second quarter of 2009, Otis recorded a $52 million non-cash, non-taxable gain recognized on the remeasurement to fair value of a previously held equity interest in a joint venture as a result of the purchase of a controlling interest.<br /><br />In July 2009, Carrier and Watsco, Inc (Watsco) formed Carrier Enterprise, LLC, a venture to distribute Carrier, Bryant, Payne and Totaline residential and light commercial heating, ventilating and air-conditioning products in the U.S. Sunbelt region and selected territories in the Caribbean and Latin America. As part of the transaction, Carrier contributed its distribution businesses located in these regions into the new venture. In consideration of its contribution, Carrier received approximately 3 million shares of common stock of Watsco and a 40 percent noncontrolling interest in the new venture, which included a business contributed by Watsco. Watsco owns a 60 percent interest in the venture with options to purchase an additional 20 percent interest from Carrier in future years. Carrier recognized a gain of approximately $57 million in the third quarter of 2009 as a result of its contribution of the majority of its U.S. residential sales and distribution businesses in this new venture.<br /><br />Goodwill. Changes in our goodwill balances for the first nine months of 2009 were as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width="217" align="left" colspan="2" style="border-bottom: 1px solid #000000;" height="40"><b>(in millions of dollars)</b></td><td height="40" width="19" align="left"><b> </b></td><td width="91" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="40"><b>Balance as of January 1, 2009</b></td><td height="40" width="19" align="left"> </td><td width="123" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="40"><b>Goodwill resulting from business combinations</b></td><td height="40" width="19" align="left"> </td><td width="116" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="40"><b>Foreign currency translation and other</b></td><td height="40" width="19" align="left"> </td><td width="91" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="40"><b>Balance as of September 30, 2009</b></td></tr><tr><td width="217" align="left" colspan="2" style="border-top: 1px solid #000000;" height="17">Otis </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="77"> 1,193 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="109"> 127 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="102"> 51 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="77"> 1,371 </td></tr><tr><td width="217" align="left" height="17" colspan="2">Carrier</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 3,270 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="109" align="right"> 3 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="102" align="right"> (52)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 3,221 </td></tr><tr><td width="217" align="left" height="17" colspan="2">UTC Fire & Security</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 5,074 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="109" align="right"> 234 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="102" align="right"> 304 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 5,612 </td></tr><tr><td width="217" align="left" height="17" colspan="2">Pratt & Whitney</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 1,037 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="109" align="right"> 152 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="102" align="right"> 38 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 1,227 </td></tr><tr><td width="217" align="left" height="17" colspan="2">Hamilton Sundstrand</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 4,423 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="109" align="right"> 15 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="102" align="right"> 53 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 4,491 </td></tr><tr><td width="217" align="left" height="17" colspan="2">Sikorsky</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="77"> 249 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="109"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="102"> (8)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="77"> 241 </td></tr><tr><td height="8" width="33" align="left"> </td><td height="8" width="184" align="left"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="77"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="109"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="102"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="77"> </td></tr><tr><td width="217" align="left" height="17" colspan="2">Total Segments</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 15,246 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="109" align="right"> 531 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="102" align="right"> 386 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 16,163 </td></tr><tr><td width="217" align="left" height="17" colspan="2">Eliminations and other</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="77"> 117 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="109"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="102"> (76)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="77"> 41 </td></tr><tr><td height="8" width="33" align="left"> </td><td height="8" width="184" align="left"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="77"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="109"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="102"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="77"> </td></tr><tr><td height="17" width="33" align="left"> </td><td height="17" width="184" align="left">Total</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="17" style="border-bottom: 3px double #000000;" align="right" width="77"> 15,363 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="17" style="border-bottom: 3px double #000000;" align="right" width="109"> 531 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="17" style="border-bottom: 3px double #000000;" align="right" width="102"> 310 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="17" style="border-bottom: 3px double #000000;" align="right" width="77"> 16,204 </td></tr><tr><td height="8" width="33" align="left"> </td><td height="8" width="184" align="left"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 3px double #000000;" align="left" width="14"> </td><td height="8" style="border-top: 3px double #000000;" align="right" width="77"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 3px double #000000;" align="left" width="14"> </td><td height="8" style="border-top: 3px double #000000;" align="right" width="109"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 3px double #000000;" align="left" width="14"> </td><td height="8" style="border-top: 3px double #000000;" align="right" width="102"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 3px double #000000;" align="left" width="14"> </td><td height="8" style="border-top: 3px double #000000;" align="right" width="77"> </td></tr></table><p>Intangible Assets. Identifiable intangible assets are comprised of the following:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="33" align="left"> </td><td height="17" width="33" align="left"> </td><td height="17" width="33" align="left"> </td><td height="17" width="192" align="left"> </td><td height="17" width="19" align="left"> </td><td width="195" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>September 30, 2009</b></td><td height="17" width="19" align="left"> </td><td width="195" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>December 31, 2008</b></td></tr><tr><td width="291" align="left" colspan="4" style="border-bottom: 1px solid #000000;" height="34"><b>(in millions of dollars)</b></td><td height="34" width="19" align="left"> </td><td width="88" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="34"><b>Gross Amount</b></td><td height="34" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td width="88" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="34"><b>Accumulated Amortization</b></td><td height="34" width="19" align="left"> </td><td width="88" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="34"><b>Gross Amount</b></td><td height="34" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td width="88" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="34"><b>Accumulated Amortization</b></td></tr><tr><td width="291" align="left" colspan="4" style="border-top: 1px solid #000000;" height="17">Amortized:</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> </td></tr><tr><td height="17" width="33" align="left"> </td><td width="258" align="left" height="17" colspan="3">Service portfolios</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="75" align="right"> 1,769 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="75" align="right"> (808)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="75" align="right"> 1,625 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="75" align="right"> (700)</td></tr><tr><td height="17" width="33" align="left"> </td><td width="258" align="left" height="17" colspan="3">Patents and trademarks</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 367 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> (117)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 333 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> (103)</td></tr><tr><td height="17" width="33" align="left"> </td><td width="258" align="left" height="17" colspan="3">Other, principally customer relationships</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 2,599 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (993)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 2,460 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (825)</td></tr><tr><td height="8" width="33" align="left"> </td><td height="8" width="33" align="left"> </td><td height="8" width="33" align="left"> </td><td height="8" width="192" align="left"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td></tr><tr><td height="17" width="33" align="left"> </td><td height="17" width="33" align="left"> </td><td height="17" width="33" align="left"> </td><td height="17" width="192" align="left"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 4,735 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (1,918)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 4,418 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (1,628)</td></tr><tr><td height="8" width="33" align="left"> </td><td height="8" width="33" align="left"> </td><td height="8" width="33" align="left"> </td><td height="8" width="192" align="left"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td></tr><tr><td width="291" align="left" height="17" colspan="4">Unamortized:</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> </td></tr><tr><td height="17" width="33" align="left"> </td><td width="258" align="left" height="17" colspan="3">Trademarks and other</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 729 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 653 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> - </td></tr><tr><td height="8" width="33" align="left"> </td><td height="8" width="33" align="left"> </td><td height="8" width="33" align="left"> </td><td height="8" width="192" align="left"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="75"> </td></tr><tr><td height="18" width="33" align="left"> </td><td height="18" width="33" align="left"> </td><td width="225" align="left" height="18" colspan="2">Total</td><td height="18" width="19" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="75"> 5,464 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="75"> (1,918)</td><td height="18" width="19" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="75"> 5,071 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="75"> (1,628)</td></tr><tr><td height="8" width="33" align="left"> </td><td height="8" width="33" align="left"> </td><td height="8" width="33" align="left"> </td><td height="8" width="192" align="left"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="8" style="border-top: 3px double #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="8" style="border-top: 3px double #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="8" style="border-top: 3px double #000000;" align="right" width="75"> </td><td height="8" width="19" align="left"> </td><td height="8" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="8" style="border-top: 3px double #000000;" align="right" width="75"> </td></tr></table><p>Amortization of intangible assets for the quarter and nine months ended September 30, 2009 was $88 million and $259 million, respectively, compared with $85 million and $272 million for the same periods of 2008. Amortization of these intangible assets for 2009 through 2013 is expected to approximate $280 million per year. <br /></p></div>
<div style="font-size:12pt"><p>Note 2: Earnings Per Share </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="34" width="29" align="left"> </td><td height="34" width="353" align="left"> </td><td height="34" width="17" align="left"> </td><td width="155" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="34"><b>Quarter Ended September 30,</b></td><td height="34" width="17" align="left"> </td><td width="155" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="34"><b>Nine Months Ended September 30,</b></td></tr><tr><td width="382" align="left" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>(in millions of dollars, except per share amounts)</b></td><td height="17" width="17" align="left"> </td><td width="69" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="17"> </td><td width="69" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td><td height="17" width="17" align="left"> </td><td width="69" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="17"> </td><td width="69" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td width="382" align="left" colspan="2" style="border-top: 1px solid #000000;" height="18">Net income attributable to common shareowners</td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="56"> 1,058 </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="56"> 1,269 </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="56"> 2,756 </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="56"> 3,544 </td></tr><tr><td height="18" width="29" align="left"> </td><td height="18" width="353" align="left"> </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="56"> </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="56"> </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="56"> </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="56"> </td></tr><tr><td width="382" align="left" height="17" colspan="2">Average shares:</td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="left"> </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="left"> </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="left"> </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="left"> </td></tr><tr><td height="17" width="29" align="left"> </td><td height="17" width="353" align="left">Basic</td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="right"> 917 </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="right"> 933 </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="right"> 918 </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="right"> 943 </td></tr><tr><td height="17" width="29" align="left"> </td><td height="17" width="353" align="left">Stock awards</td><td height="17" width="17" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="56"> 12 </td><td height="17" width="17" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="56"> 18 </td><td height="17" width="17" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="56"> 10 </td><td height="17" width="17" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="56"> 21 </td></tr><tr><td height="18" width="29" align="left"> </td><td height="18" width="353" align="left">Diluted</td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="56"> 929 </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="56"> 951 </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="56"> 928 </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="56"> 964 </td></tr><tr><td height="18" width="29" align="left"> </td><td height="18" width="353" align="left"> </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="56"> </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="56"> </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="56"> </td><td height="18" width="17" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="56"> </td></tr><tr><td width="382" align="left" height="17" colspan="2">Earnings per share of Common Stock:</td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="left"> </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="left"> </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="left"> </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="56" align="left"> </td></tr><tr><td height="17" width="29" align="left"> </td><td height="17" width="353" align="left">Basic </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="56" align="right">1.15 </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="56" align="right">1.36 </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="56" align="right">3.00 </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="56" align="right">3.76 </td></tr><tr><td height="17" width="29" align="left"> </td><td height="17" width="353" align="left">Diluted</td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="56" align="right">1.14 </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="56" align="right">1.33 </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="56" align="right">2.97 </td><td height="17" width="17" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="56" align="right">3.68 </td></tr></table><p>The computation of diluted earnings per share excludes the effect of the potential exercise of stock awards, including stock appreciation rights (SARs) and stock options when the average market price of the common stock is lower than the exercise price of the related SARs and options during the period. These outstanding stock awards are not included in the computation of diluted earnings per share because the effect would have been antidilutive.   For the quarter and nine months ended September 30, 2009, the number of stock awards excluded from the computation was 15.2 million and 35.7 million, respectively.  For the quarter and nine months ended September 30, 2008, the number of stock awards excluded from the computation was 10.2 million and 10.1 million, respectively. </p></div>
<div style="font-size:12pt"><p>Note 3: Inventories and Contracts in Progress </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="525" align="left"><b> </b></td><td height="17" width="19" align="left"><b> </b></td><td width="81" align="center" height="17" colspan="2"><b> </b></td><td height="17" width="19" align="left"><b> </b></td><td width="76" align="center" height="17" colspan="2"><b> </b></td></tr><tr><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="525"><b>(in millions of dollars)</b></td><td height="34" width="19" align="left"><b></b></td><td width="81" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="34"><b>September 30, 2009</b></td><td height="34" width="19" align="left"><b> </b></td><td width="76" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="34"><b>December 31, 2008</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="525">Raw materials</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="68"> 1,239 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="63"> 1,271 </td></tr><tr><td height="17" width="525" align="left">Work-in-process</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="68" align="right"> 3,325 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> 3,295 </td></tr><tr><td height="17" width="525" align="left">Finished goods</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="68" align="right"> 3,286 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> 3,634 </td></tr><tr><td height="17" width="525" align="left">Contracts in progress</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="68"> 6,792 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="63"> 6,113 </td></tr><tr><td height="17" width="525" align="left"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="68"> 14,642 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="63"> 14,313 </td></tr><tr><td height="17" width="525" align="left">Less:</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="68" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td></tr><tr><td height="17" width="525" align="left">Progress payments, secured by lien, on U.S. Government contracts</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="68" align="right"> (361)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (476)</td></tr><tr><td height="17" width="525" align="left">Billings on contracts in progress</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="68"> (6,195)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="63"> (5,497)</td></tr><tr><td height="18" width="525" align="left"> </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="68"> 8,086 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="63"> 8,340 </td></tr></table><p>As of September 30, 2009 and December 31, 2008, inventory also includes capitalized research and development costs of $873 million and $833 million, respectively, related to certain aerospace programs. These capitalized costs are liquidated as production units are delivered to the customer. The capitalized contract research and development costs within inventory principally relate to capitalized costs on Sikorsky’s CH-148 contract with the Canadian government. The CH-148 is a derivative of the H-92, a military variant of the S-92.<br /><br />Certain reclassifications have been made to the 2008 inventory components presented above in order to conform to the current year presentation.</p></div>
<div style="font-size:12pt"><p>Note 4: Borrowings and Lines of Credit <br /><br />Our borrowings consist of the following:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="505" align="left"><b> </b></td><td height="17" width="19" align="left"><b> </b></td><td width="88" align="center" height="17" colspan="2"><b>September 30,</b></td><td height="17" width="19" align="center"><b> </b></td><td width="88" align="center" height="17" colspan="2"><b>December 31,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="505"><b>(in millions of dollars)</b></td><td height="17" width="19" align="left"><b></b></td><td width="88" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" width="19" align="left"><b> </b></td><td width="88" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="505">Short-term borrowings:</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" width="505" align="left">  Commercial paper</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="75" align="right"> 592 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="75" align="right"> 150 </td></tr><tr><td height="17" width="505" align="left">  Revolving credit borrowings</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 461 </td></tr><tr><td height="17" width="505" align="left">  Other borrowings</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 351 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 412 </td></tr><tr><td height="18" width="505" align="left">Total short-term borrowings</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 943 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 1,023 </td></tr></table><p>At September 30, 2009, we had committed credit agreements from banks permitting aggregate borrowings of up to $2.5 billion under a $1.5 billion revolving credit agreement and a $1.0 billion multicurrency revolving credit agreement, both of which are available for general funding purposes, including acquisitions. As of September 30, 2009, there were no borrowings under either of these revolving credit agreements, which expire in October 2011 and November 2011, respectively. The undrawn portions under both of these agreements are also available to serve as backup facilities for the issuance of commercial paper. We generally use our commercial paper borrowings for general corporate purposes, including the funding of potential acquisitions and repurchases of our common stock. <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="512" align="left"><b> </b></td><td height="17" width="19" align="left"><b> </b></td><td width="88" align="center" height="17" colspan="2"><b>September 30,</b></td><td height="17" width="19" align="center"><b> </b></td><td width="88" align="center" height="17" colspan="2"><b>December 31,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="512"><b>(in millions of dollars)</b></td><td height="17" width="19" align="left"><b></b></td><td width="88" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" width="19" align="left"><b> </b></td><td width="88" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="512">Long-term debt:</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> </td></tr><tr><td height="17" width="512" align="left">  LIBOR+.07% floating rate notes due 2009 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="75" align="right"> 500 </td></tr><tr><td height="17" width="512" align="left">  6.500% notes due 2009</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 400 </td></tr><tr><td height="17" width="512" align="left">  7.675% ESOP debt due 2009 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 33 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 33 </td></tr><tr><td height="17" width="512" align="left">  4.375% notes due 2010 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 600 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 600 </td></tr><tr><td height="17" width="512" align="left">  7.125% notes due 2010</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 500 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 500 </td></tr><tr><td height="17" width="512" align="left">  6.350% notes due 2011</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 500 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 500 </td></tr><tr><td height="17" width="512" align="left">  6.100% notes due 2012</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 500 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 500 </td></tr><tr><td height="17" width="512" align="left">  4.875% notes due 2015 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 1,200 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 1,200 </td></tr><tr><td height="17" width="512" align="left">  5.375% notes due 2017 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 1,000 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 1,000 </td></tr><tr><td height="17" width="512" align="left">  6.125% notes due 2019 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 1,250 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 1,250 </td></tr><tr><td height="17" width="512" align="left">  8.875% notes due 2019</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 272 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 272 </td></tr><tr><td height="17" width="512" align="left">  8.750% notes due 2021</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 250 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 250 </td></tr><tr><td height="17" width="512" align="left">  6.700% notes due 2028</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 400 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 400 </td></tr><tr><td height="17" width="512" align="left">  7.500% notes due 2029</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 550 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 550 </td></tr><tr><td height="17" width="512" align="left">  5.400% notes due 2035 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 600 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 600 </td></tr><tr><td height="17" width="512" align="left">  6.050% notes due 2036 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 600 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 600 </td></tr><tr><td height="17" width="512" align="left">  6.125% notes due 2038 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 1,000 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 1,000 </td></tr><tr><td height="17" width="512" align="left">  Project financing obligations</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 125 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 193 </td></tr><tr><td height="17" width="512" align="left">  Other (including capitalized leases)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 109 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 105 </td></tr><tr><td height="17" width="512" align="left">Total long-term debt</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 9,489 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 10,453 </td></tr><tr><td height="17" width="512" align="left">Less current portion</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (760)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (1,116)</td></tr><tr><td height="18" width="512" align="left">Long-term portion</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 8,729 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 9,337 </td></tr></table><p>In February 2009, we redeemed the entire $500 million outstanding principal amount of our LIBOR+.07% floating rate notes that were due June 1, 2009 at a redemption price in U.S. dollars equal to 100% of the principal amount, plus interest accrued. On June 1, 2009, we repaid our $400 million of 6.500 % notes due 2009 which matured on the same date. <br /><br />We have an existing universal shelf registration statement filed with the Securities and Exchange Commission (SEC) for an indeterminate amount of securities for future issuance, subject to our internal limitations on the amount of debt to be issued under this shelf registration statement. <br /></p></div>
<div style="font-size:12pt"><p>Note 5: Income Taxes <br /><br />We conduct business globally and, as a result, UTC or one or more of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as Australia, Canada, China, France, Germany, Hong Kong, Italy, Japan, South Korea, Singapore, Spain, the United Kingdom and the United States. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 1998.<br /><br />In the ordinary course of business there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. We recognize interest accrued related to unrecognized tax benefits in interest expense. Penalties, if incurred, would be recognized as a component of income tax expense. <br /><br />It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may change within a range of a net decrease of $125 million to a net increase of $50 million resulting from additional worldwide uncertain tax positions; from the reevaluation of current uncertain tax positions arising from developments in examinations, in appeals, or in the courts; or from the closure of tax statutes. Not included in the range is €182 million (approximately $267 million) of tax benefits that we have claimed related to a 1998 German reorganization. These tax benefits are currently being reviewed by the German Tax Office in the course of an audit of tax years 1999 to 2000. In 2008 the German Federal Tax Court denied benefits to another taxpayer in a case involving a German tax law relevant to our reorganization. The determination of the German Federal Tax Court on this other matter was appealed to the European Court of Justice (ECJ) to determine if the underlying German tax law is violative of European Union (EU) principles.  On September 17, 2009 the ECJ issued an opinion in this case that is generally favorable to the other taxpayer and referred the case back to the German Federal Tax Court for further consideration of certain related issues. After consideration of the ECJ decision, we continue to believe that it is more likely than not that the relevant German tax law is violative of EU principles and we have not accrued tax expense for this matter. As developments in the other taxpayer’s case in the German courts warrant, it may become necessary for us to accrue for this matter, and related interest. <br /><br />In the third quarter of 2009, the Internal Revenue Service (IRS) completed examination fieldwork for the 2004 and 2005 tax years and issued its audit report. Based on the IRS audit report, in the third quarter of 2009 we filed a protest with respect to certain IRS-proposed adjustments with which we do not agree. These adjustments, included in the above range, will be addressed with the Appeals Division of the IRS. The timing of any resolution is currently uncertain. Also during the third quarter of 2009, the IRS commenced its review of our 2006 through 2008 tax years. <br /><br />We recorded a $38 million reduction in tax expenses in the third quarter of 2009 relating to a re-evaluation of our liabilities and contingencies based on global examination activity in the quarter, including completion of our review of the 2004 and 2005 IRS audit report and our protest filing. In addition, we recognized approximately $17 million of associated pre-tax interest income adjustments in the third quarter of 2009. <br /><br />The effective tax rate for the quarter ended September 30, 2009 has increased as compared to the same period of 2008 as a result of the tax effects of the Carrier and Watsco transaction and a $32 million adverse tax impact associated with a foreign reorganization, net of the reduction to tax expense relating to the re-evaluation of our tax liabilities and contingencies noted above. The effective tax rate for the nine months ended September 30, 2009 decreased as compared to the same period of 2008 as a result of the favorable tax impact of approximately $25 million in the first quarter of 2009 related to the formation of a commercial venture, the non-taxability in the second quarter of 2009 of the gain Otis realized on its purchase of a noncontrolling interest in a joint venture, partially offset by the net adverse impacts of the third quarter 2009 items. </p></div>
<div style="font-size:12pt"><p>Note 6: Employee Benefit Plans <br /><br />Pension and Postretirement Plans. We sponsor both funded and unfunded domestic and foreign defined pension and postretirement plans. Contributions to these plans during the quarters and nine months ended September 30, 2009 and 2008 were as follows: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td width="161" align="center" height="17" colspan="5"><b>Quarter Ended</b></td><td height="17" width="19" align="center"><b> </b></td><td width="167" align="center" height="17" colspan="5"><b>Nine Months Ended</b></td></tr><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td width="161" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>September 30,</b></td><td height="17" width="19" align="center"><b> </b></td><td width="167" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>September 30,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="312"><b>(in millions of dollars)</b></td><td height="17" width="19" align="left"><b></b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="55"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="61"><b>2008 </b></td><td height="17" width="19" align="center"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="61"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="61"><b>2008 </b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;" align="left" width="312">Defined Benefit Plans</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="55">182 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61">13 </td><td height="18" width="19" align="right"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61">633 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61">58 </td></tr><tr><td height="19" width="312" align="left">Defined Contribution Plans</td><td height="19" width="19" align="left"> </td><td height="19" style="border-top: 3px double #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="19" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="55">43 </td><td height="19" width="19" align="left"> </td><td height="19" style="border-top: 3px double #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="19" style="border-top: 3px double #000000;border-bottom: 3px double #000000;" align="right" width="61">50 </td><td height="19" width="19" align="left"> </td><td height="19" style="border-top: 3px double #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="19" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61">144 </td><td height="19" width="19" align="left"> </td><td height="19" style="border-top: 3px double #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="19" style="border-top: 3px double #000000;border-bottom: 3px double #000000;" align="right" width="61">168 </td></tr></table><p>In the first nine months of 2009, we contributed $551 million in cash to our domestic defined benefit pension plans, including $150 million which was contributed in the third quarter of 2009. There were no contributions to our domestic defined benefit pension plans in the first nine months of 2008.<br /><br />The following tables illustrate the components of net periodic benefit cost for our pension and other postretirement benefits: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td width="167" align="center" height="17" colspan="5"><b>Pension Benefits</b></td><td height="17" width="19" align="left"> </td><td width="167" align="center" height="17" colspan="5"><b>Other Postretirement Benefits</b></td></tr><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td width="167" align="center" height="17" colspan="5"><b>Quarter Ended</b></td><td height="17" width="19" align="left"> </td><td width="167" align="center" height="17" colspan="5"><b>Quarter Ended</b></td></tr><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td width="167" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>September 30,</b></td><td height="17" width="19" align="left"> </td><td width="167" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>September 30,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="312"><b>(in millions of dollars)</b></td><td height="17" width="19" align="left"></td><td width="74" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td width="74" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td><td height="17" width="19" align="left"> </td><td width="74" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td width="74" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="312">Service cost</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 108 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 112 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 1 </td></tr><tr><td height="17" width="312" align="left">Interest cost</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 324 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 317 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 12 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 13 </td></tr><tr><td height="17" width="312" align="left">Expected return on plan assets</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (416)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (418)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (1)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (1)</td></tr><tr><td height="17" width="312" align="left">Amortization</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 14 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 13 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (1)</td></tr><tr><td height="17" width="312" align="left">Recognized actuarial net loss </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 56 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 30 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td></tr><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 86 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 54 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 11 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 12 </td></tr><tr><td height="17" width="312" align="left">Net settlement and curtailment loss </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 84 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td></tr><tr><td height="18" width="312" align="left">Total net periodic benefit cost</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 170 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 54 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 11 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 12 </td></tr><tr><td height="7" width="312" align="left"> </td><td height="7" width="19" align="left"> </td><td height="7" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="7" style="border-top: 3px double #000000;" align="right" width="61"> </td><td height="7" width="19" align="left"> </td><td height="7" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="7" style="border-top: 3px double #000000;" align="right" width="61"> </td><td height="7" width="19" align="left"> </td><td height="7" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="7" style="border-top: 3px double #000000;" align="right" width="61"> </td><td height="7" width="19" align="left"> </td><td height="7" style="border-top: 3px double #000000;" align="left" width="13"> </td><td height="7" style="border-top: 3px double #000000;" align="right" width="61"> </td></tr><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> </td></tr><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td width="167" align="center" height="17" colspan="5"><b>Pension Benefits</b></td><td height="17" width="19" align="left"> </td><td width="167" align="center" height="17" colspan="5"><b>Other Postretirement Benefits</b></td></tr><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td width="167" align="center" height="17" colspan="5"><b>Nine Months Ended</b></td><td height="17" width="19" align="left"> </td><td width="167" align="center" height="17" colspan="5"><b>Nine Months Ended</b></td></tr><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td width="167" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>September 30,</b></td><td height="17" width="19" align="left"> </td><td width="167" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>September 30,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="312"><b>(in millions of dollars)</b></td><td height="17" width="19" align="left"></td><td width="74" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td width="74" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td><td height="17" width="19" align="left"> </td><td width="74" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td width="74" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="312">Service cost</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 322 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 339 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 2 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 3 </td></tr><tr><td height="17" width="312" align="left">Interest cost</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 959 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 957 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 37 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 40 </td></tr><tr><td height="17" width="312" align="left">Expected return on plan assets</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (1,218)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (1,259)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (1)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (2)</td></tr><tr><td height="17" width="312" align="left">Amortization</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 42 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> 38 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (2)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="61" align="right"> (5)</td></tr><tr><td height="17" width="312" align="left">Recognized actuarial net loss (gain)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 168 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 91 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> (2)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td></tr><tr><td height="17" width="312" align="left"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 273 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 166 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 34 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 36 </td></tr><tr><td height="17" width="312" align="left">Net settlement and curtailment loss (gain)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 101 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> (2)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td></tr><tr><td height="18" width="312" align="left">Total net periodic benefit cost</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 374 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 164 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 34 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 36 </td></tr></table></div>
<div style="font-size:12pt"><p>Note 7: Restructuring and Related Costs <br /><br />During the first nine months of 2009, we recorded net pre-tax restructuring and related charges in our business segments totaling $695 million for new and ongoing restructuring actions as follows: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="620"><b>(in millions of dollars)</b></td><td height="17" width="13" align="left"><b></b></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="620">Otis</td><td height="17" width="13" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 131 </td></tr><tr><td height="17" width="620" align="left">Carrier</td><td height="17" width="13" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 139 </td></tr><tr><td height="17" width="620" align="left">UTC Fire & Security</td><td height="17" width="13" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 107 </td></tr><tr><td height="17" width="620" align="left">Pratt & Whitney</td><td height="17" width="13" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 177 </td></tr><tr><td height="17" width="620" align="left">Hamilton Sundstrand</td><td height="17" width="13" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 69 </td></tr><tr><td height="17" width="620" align="left">Sikorsky</td><td height="17" width="13" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 7 </td></tr><tr><td height="17" width="620" align="left">Eliminations and other</td><td height="17" width="13" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 62 </td></tr><tr><td height="17" width="620" align="left">General corporate expenses</td><td height="17" width="13" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 3 </td></tr><tr><td height="27" width="620" align="left">Total</td><td height="27" width="13" align="left"> </td><td height="27" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="27" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 695 </td></tr></table><p>The net charges included $361 million in cost of sales, $311 million in selling, general and administrative expenses and $23 million in other income and, as described below, primarily relate to actions initiated during 2009 and 2008. Restructuring costs reflected in Eliminations and other primarily reflect the costs associated with the curtailment of our domestic pension plans. <br /><br />2009 Actions. During the first nine months of 2009, we initiated restructuring actions relating to ongoing cost reduction efforts, including workforce reductions, the consolidation of field operations and the consolidation of repair and overhaul operations. We recorded net pre-tax restructuring and related charges totaling $667 million, including $335 million in cost of sales, $310 million in selling, general and administrative expenses and $22 million in other income. <br /><br />We expect the 2009 actions that were initiated in the first nine months to result in net workforce reductions of approximately 13,000 hourly and salaried employees, the exiting of approximately 4.3 million net square feet of facilities and the disposal of assets associated with the exited facilities. As of September 30, 2009, net workforce reductions of approximately 9,200 employees have been completed. The majority of the remaining workforce and all facility related cost reduction actions are targeted for completion during 2010 and 2011. No specific plans for significant other actions have been finalized at this time.<br /><br />On September 21, 2009, Pratt & Whitney announced plans to close its Connecticut Airfoil Repair Operations facility in East Hartford, Connecticut by the second quarter of 2010 and its engine overhaul facility in Cheshire, Connecticut by early 2011.  On September 22, 2009, the International Association of Machinists (IAM) filed a lawsuit in U.S. District Court in Hartford, Connecticut alleging that Pratt & Whitney’s decision to close these facilities and transfer certain work to facilities outside Connecticut breached the terms of its collective bargaining agreement with the IAM, and seeking to enjoin Pratt & Whitney from moving the work for the duration of the current collective bargaining agreement.  Pratt & Whitney believes that it has fully complied with the collective bargaining agreement and that the IAM’s contentions are without merit.  Trial is currently scheduled to begin December 14, 2009, and a decision is anticipated by early 2010.  Pratt & Whitney has recorded $51 million of restructuring costs associated with these planned closures.<br /> <br />The following table summarizes the accrual balances and utilization by cost type for the 2009 restructuring actions:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="56" style="border-bottom: 1px solid #000000;" align="left" width="289"><b>(in millions of dollars)</b></td><td height="56" width="19" align="center"></td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="56"><b>Severance</b></td><td height="56" width="19" align="center"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="56"><b>Asset
Write-Downs</b></td><td height="56" width="19" align="center"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="56"><b>Facility Exit and Lease Termination Costs</b></td><td height="56" width="19" align="center"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="56"><b>Total</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="289">Restructuring accruals at June 30, 2009</td><td height="17" width="19" align="center"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 250 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 7 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 257 </td></tr><tr><td height="17" width="289" align="left">Net pre-tax restructuring charges</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 200 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 25 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 8 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 233 </td></tr><tr><td height="17" width="289" align="left">Utilization</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (138)</td><td height="17" width="19" align="right"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (25)</td><td height="17" width="19" align="right"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (8)</td><td height="17" width="19" align="right"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (171)</td></tr><tr><td height="17" width="289" align="left">Balance at September 30, 2009</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="75"> 312 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="75"> - </td><td height="17" width="19" align="right"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="75"> 7 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="75"> 319 </td></tr></table><p>The following table summarizes expected, incurred and remaining costs for the 2009 restructuring actions by type:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="50" style="border-bottom: 1px solid #000000;" align="left" width="289"><b>(in millions of dollars)</b></td><td height="50" width="19" align="left"></td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="50"><b>Severance</b></td><td height="50" width="19" align="left"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="50"><b>Asset Write-Downs</b></td><td height="50" width="19" align="left"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="50"><b>Facility Exit and Lease Termination Costs</b></td><td height="50" width="19" align="left"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="50"><b>Total</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="289">Expected costs</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 664 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 45 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 99 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 808 </td></tr><tr><td height="17" width="289" align="left">Costs incurred - quarter ended March 31, 2009</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (140)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (6)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (5)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (151)</td></tr><tr><td height="17" width="289" align="left">Costs incurred - quarter ended June 30, 2009</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (255)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (14)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (14)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (283)</td></tr><tr><td height="17" width="289" align="left">Costs incurred - quarter ended September 30, 2009</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (200)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (25)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (8)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (233)</td></tr><tr><td height="18" width="289" align="left">Balance at September 30, 2009</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 69 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> - </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 72 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 141 </td></tr></table><p>The following table summarizes expected, incurred and remaining costs for the 2009 restructuring actions by segment: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="181" align="left"><b> </b></td><td height="17" width="19" align="left"><b> </b></td><td height="17" width="14" align="left"><b> </b></td><td height="17" width="75" align="left"><b> </b></td><td height="17" width="18" align="left"><b> </b></td><td height="17" width="14" align="left"><b> </b></td><td width="94" align="center" height="17" colspan="2"><b>Costs Incurred - </b></td><td width="89" align="center" height="17" colspan="2"><b>Costs Incurred - </b></td><td height="17" width="19" align="center"><b> </b></td><td width="89" align="center" height="17" colspan="2"><b>Costs Incurred - </b></td><td height="17" width="19" align="left"><b> </b></td><td width="102" align="center" height="17" colspan="2"><b>Remaining</b></td></tr><tr><td height="17" width="181" align="left"><b> </b></td><td height="17" width="19" align="left"><b> </b></td><td height="17" width="14" align="left"><b> </b></td><td height="17" width="75" align="left"><b> </b></td><td height="17" width="18" align="left"><b> </b></td><td height="17" width="14" align="left"><b> </b></td><td width="94" align="center" height="17" colspan="2"><b>Quarter Ended</b></td><td width="89" align="center" height="17" colspan="2"><b>Quarter Ended</b></td><td height="17" width="19" align="center"><b> </b></td><td width="89" align="center" height="17" colspan="2"><b>Quarter Ended</b></td><td height="17" width="19" align="left"><b> </b></td><td width="102" align="center" height="17" colspan="2"><b>Costs at</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="181"><b>(in millions of dollars)</b></td><td height="17" width="19" align="left"><b></b></td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>Expected Costs</b></td><td height="17" width="18" align="center"><b> </b></td><td height="17" width="14" align="left"><b> </b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>March 31, 2009</b></td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>June 30, 2009</b></td><td height="17" width="19" align="center"><b> </b></td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>September 30, 2009</b></td><td height="17" width="19" align="left"><b> </b></td><td width="102" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>September 30, 2009</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="181">Otis </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 143 </td><td height="17" width="18" align="right"> </td><td height="17" width="14" align="left">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> (21)</td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> (57)</td><td height="17" width="19" align="right"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> (52)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="88"> 13 </td></tr><tr><td height="17" width="181" align="left">Carrier</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 184 </td><td height="17" width="18" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (35)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (53)</td><td height="17" width="19" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (41)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="88" align="right"> 55 </td></tr><tr><td height="17" width="181" align="left">UTC Fire & Security</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 112 </td><td height="17" width="18" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (13)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (83)</td><td height="17" width="19" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (4)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="88" align="right"> 12 </td></tr><tr><td height="17" width="181" align="left">Pratt & Whitney</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 218 </td><td height="17" width="18" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (59)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (43)</td><td height="17" width="19" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (63)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="88" align="right"> 53 </td></tr><tr><td height="17" width="181" align="left">Hamilton Sundstrand</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 78 </td><td height="17" width="18" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (19)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (37)</td><td height="17" width="19" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (14)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="88" align="right"> 8 </td></tr><tr><td height="17" width="181" align="left">Sikorsky</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 7 </td><td height="17" width="18" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (7)</td><td height="17" width="19" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="88" align="right"> - </td></tr><tr><td height="17" width="181" align="left">Eliminations and other</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 63 </td><td height="17" width="18" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (3)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (1)</td><td height="17" width="19" align="right"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (59)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="88" align="right"> - </td></tr><tr><td height="17" width="181" align="left">General corporate expenses</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 3 </td><td height="17" width="18" align="right"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (1)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (2)</td><td height="17" width="19" align="right"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="88"> - </td></tr><tr><td height="18" width="181" align="left">Total</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 808 </td><td height="18" width="18" align="right"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> (151)</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> (283)</td><td height="18" width="19" align="right"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> (233)</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="88"> 141 </td></tr></table><p>2008 Actions. During the first nine months of 2009, we recorded net pre-tax restructuring and related charges and reversals totaling $26 million for restructuring actions initiated in 2008, including $24 million in cost of sales, $1 million in selling, general and administrative expenses and $1 million in other income. The 2008 actions relate to ongoing cost reduction efforts, including selling, general and administrative reductions, principally at Carrier, Pratt & Whitney, and UTC Fire & Security, and the consolidation of manufacturing facilities. <br /><br />As of September 30, 2009, net workforce reductions of approximately 5,000 employees of an expected 6,200 employees have been completed, and 200,000 net square feet of facilities of an expected 1.2 million net square feet have been exited. The majority of the remaining workforce and facility related cost reduction actions are targeted for completion during 2009 and 2010. <br /><br />The following table summarizes the accrual balances and utilization by cost type for the 2008 restructuring actions: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="56" style="border-bottom: 1px solid #000000;" align="left" width="289"><b>(in millions of dollars)</b></td><td height="56" width="19" align="center"></td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="56"><b>Severance</b></td><td height="56" width="19" align="center"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="56"><b>Asset
Write-Downs</b></td><td height="56" width="19" align="center"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="56"><b>Facility Exit and Lease Termination Costs</b></td><td height="56" width="19" align="center"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="56"><b>Total</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="289">Restructuring accruals at June 30, 2009</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 69 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 5 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 74 </td></tr><tr><td height="17" width="289" align="left">Net pre-tax restructuring charges</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (8)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 1 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 5 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (2)</td></tr><tr><td height="17" width="289" align="left">Utilization</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (13)</td><td height="17" width="19" align="right"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (1)</td><td height="17" width="19" align="right"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (6)</td><td height="17" width="19" align="right"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (20)</td></tr><tr><td height="18" width="289" align="left">Balance at September 30, 2009</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 48 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> - </td><td height="18" width="19" align="right"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 4 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 52 </td></tr></table><p>The following table summarizes expected, incurred and remaining costs for the 2008 restructuring actions by type: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="50" style="border-bottom: 1px solid #000000;" align="left" width="289"><b>(in millions of dollars)</b></td><td height="50" width="19" align="left"></td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="50"><b>Severance</b></td><td height="50" width="19" align="left"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="50"><b>Asset Write-Downs</b></td><td height="50" width="19" align="left"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="50"><b>Facility Exit and Lease Termination Costs</b></td><td height="50" width="19" align="left"> </td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="50"><b>Total</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="289">Expected costs</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 290 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 25 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 51 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 366 </td></tr><tr><td height="17" width="289" align="left">Costs incurred through December 31, 2008</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (277)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (24)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (26)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (327)</td></tr><tr><td height="17" width="289" align="left">Costs incurred - quarter ended March 31, 2009</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (5)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (6)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (11)</td></tr><tr><td height="17" width="289" align="left">Costs incurred - quarter ended June 30, 2009</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (14)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (3)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (17)</td></tr><tr><td height="17" width="289" align="left">Costs incurred - quarter ended September 30, 2009</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 8 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (1)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (5)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 2 </td></tr><tr><td height="18" width="289" align="left">Remaining costs at September 30, 2009</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 2 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> - </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 11 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 13 </td></tr></table><p>The following table summarizes expected, incurred and remaining costs for the 2008 restructuring actions by segment: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="34" width="145" align="left"><b> </b></td><td height="34" width="12" align="left"><b> </b></td><td height="34" width="14" align="left"><b> </b></td><td height="34" width="70" align="left"><b> </b></td><td height="34" width="12" align="left"><b> </b></td><td width="93" align="center" height="34" colspan="2"><b>Costs Incurred</b></td><td height="34" width="12" align="left"><b> </b></td><td width="71" align="center" height="34" colspan="2"><b>Costs Incurred</b></td><td height="34" width="12" align="left"><b> </b></td><td width="71" align="center" height="34" colspan="2"><b>Costs Incurred </b></td><td height="34" width="12" align="center"><b> </b></td><td width="94" align="center" height="34" colspan="2"><b>Costs Incurred </b></td><td height="34" width="12" align="center"><b> </b></td><td width="91" align="center" height="34" colspan="2"><b>Remaining</b></td></tr><tr><td height="17" width="145" align="left"><b> </b></td><td height="17" width="12" align="left"><b> </b></td><td height="17" width="14" align="left"><b> </b></td><td height="17" width="70" align="left"><b> </b></td><td height="17" width="12" align="left"><b> </b></td><td width="93" align="center" height="17" colspan="2"><b>through</b></td><td height="17" width="12" align="left"><b> </b></td><td width="71" align="center" height="17" colspan="2"><b>Quarter ended</b></td><td height="17" width="12" align="left"><b> </b></td><td width="71" align="center" height="17" colspan="2"><b>Quarter ended</b></td><td height="17" width="12" align="center"><b> </b></td><td width="94" align="center" height="17" colspan="2"><b>Quarter ended</b></td><td height="17" width="12" align="center"><b> </b></td><td width="91" align="center" height="17" colspan="2"><b>Costs at</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="145"><b>(in millions of dollars)</b></td><td height="17" width="12" align="left"><b></b></td><td width="84" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>Expected Costs</b></td><td height="17" width="12" align="center"><b> </b></td><td width="93" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>December 31, 2008</b></td><td height="17" width="12" align="left"><b> </b></td><td width="71" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>March 31, 2009</b></td><td height="17" width="12" align="left"><b> </b></td><td width="71" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>June 30, 2009</b></td><td height="17" width="12" align="center"><b> </b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>September 30, 2009</b></td><td height="17" width="12" align="center"><b> </b></td><td width="91" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>September 30, 2009</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="145">Otis </td><td height="17" width="12" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="70"> 23 </td><td height="17" width="12" align="right"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="80"> (21)</td><td height="17" width="12" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="57"> (1)</td><td height="17" width="12" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="57"> - </td><td height="17" width="12" align="right"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="80"> - </td><td height="17" width="12" align="right"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="77"> 1 </td></tr><tr><td height="17" width="145" align="left">Carrier</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="70" align="right"> 158 </td><td height="17" width="12" align="right"> </td><td height="17" width="13" align="left"> </td><td height="17" width="80" align="right"> (141)</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="57" align="right"> (6)</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="57" align="right"> (2)</td><td height="17" width="12" align="right"> </td><td height="17" width="14" align="right"> </td><td height="17" width="80" align="right"> (2)</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 7 </td></tr><tr><td height="17" width="145" align="left">UTC Fire & Security</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="70" align="right"> 69 </td><td height="17" width="12" align="right"> </td><td height="17" width="13" align="left"> </td><td height="17" width="80" align="right"> (58)</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="57" align="right"> (1)</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="57" align="right"> (3)</td><td height="17" width="12" align="right"> </td><td height="17" width="14" align="right"> </td><td height="17" width="80" align="right"> (3)</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 4 </td></tr><tr><td height="17" width="145" align="left">Pratt & Whitney</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="70" align="right"> 106 </td><td height="17" width="12" align="right"> </td><td height="17" width="13" align="left"> </td><td height="17" width="80" align="right"> (93)</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="57" align="right"> (5)</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="57" align="right"> (13)</td><td height="17" width="12" align="right"> </td><td height="17" width="14" align="right"> </td><td height="17" width="80" align="right"> 6 </td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> 1 </td></tr><tr><td height="17" width="145" align="left">Hamilton Sundstrand</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="70" align="right"> 10 </td><td height="17" width="12" align="right"> </td><td height="17" width="13" align="left"> </td><td height="17" width="80" align="right"> (13)</td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="57" align="right"> 1 </td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="57" align="right"> 1 </td><td height="17" width="12" align="right"> </td><td height="17" width="14" align="right"> </td><td height="17" width="80" align="right"> 1 </td><td height="17" width="12" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="77" align="right"> - </td></tr><tr><td height="17" width="145" align="left">Eliminations and other</td><td height="17" width="12" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="70"> - </td><td height="17" width="12" align="right"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="80"> (1)</td><td height="17" width="12" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="57"> 1 </td><td height="17" width="12" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="57"> - </td><td height="17" width="12" align="right"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="80"> - </td><td height="17" width="12" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="77"> - </td></tr><tr><td height="18" width="145" align="left">Total</td><td height="18" width="12" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="70"> 366 </td><td height="18" width="12" align="right"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="80"> (327)</td><td height="18" width="12" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="57"> (11)</td><td height="18" width="12" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="57"> (17)</td><td height="18" width="12" align="right"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="80"> 2 </td><td height="18" width="12" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="77"> 13 </td></tr></table></div>
<div style="font-size:12pt"><p>Note 8: Financial Instruments<br /><br />We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments under the Derivatives and Hedging Topic of the FASB ASC and those utilized as economic hedges. We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates, foreign exchange rates and commodity prices. These fluctuations can increase the costs of financing, investing and operating the business. We have used derivative instruments, including swaps, forward contracts and options to manage certain foreign currency, interest rate and commodity price exposures. <br /><br />By nature, all financial instruments involve market and credit risks. We enter into derivative and other financial instruments with major investment grade financial institutions and have policies to monitor the credit risk of those counterparties. We limit counterparty exposure and concentration of risk by diversifying counterparties. While there can be no assurance, we do not anticipate any material non-performance by any of these counterparties. <br /><br />Foreign Currency Forward Contracts. We manage our foreign currency transaction risks to acceptable limits through the use of derivatives to hedge forecasted cash flows associated with foreign currency transaction exposures which are accounted for as cash flow hedges, as deemed appropriate. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the hedge accounting criteria of the Derivatives and Hedging Topic of the FASB ASC, changes in the derivatives’ fair value are not included in current earnings but are included in Accumulated other comprehensive loss. These changes in fair value will subsequently be reclassified into earnings as a component of product sales or expenses, as applicable, when the forecasted transaction occurs. To the extent that a previously designated hedging transaction is no longer an effective hedge, any ineffectiveness measured in the hedging relationship is recorded currently in earnings in the period it occurs.<br /><br />To the extent the hedge accounting criteria are not met, the foreign currency forward contracts are utilized as economic hedges and changes in the fair value of these contracts are recorded currently in earnings in the period in which they occur. These include hedges that are used to reduce exchange rate risks arising from the change in fair value of certain foreign currency denominated assets and liabilities (i.e. payables, receivables) and other economic hedges where the hedge accounting criteria were not met. <br /><br />The four quarter rolling average of the notional amount of foreign exchange contracts hedging foreign currency transactions was $8.6 billion and $11.2 billion at September 30, 2009 and December 31, 2008, respectively.<br /><br />Commodity Forward Contracts. We enter into commodity forward contracts to reduce the risk of fluctuations in the price we pay for certain commodities (for example, nickel) which are used directly in the production of our products, or are components of the products we procure to use in the production of our products. These hedges are economic hedges and the changes in fair value of these contracts are recorded currently in earnings in the period in which they occur. The fair value of commodity contracts were insignificant for the period ended September 30, 2009. <br /><br />The outstanding notional amount of contracts hedging commodity exposures was insignificant at September 30, 2009 and December 31, 2008, respectively.<br /><br />The following table summarizes the fair value of derivative instruments as of September 30, 2009:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width="253" align="left" height="17" colspan="2"> </td><td height="17" width="9" align="left"> </td><td height="17" width="138" align="center"><b>Assets</b></td><td height="17" width="10" align="center"><b> </b></td><td height="17" width="14" align="center"><b> </b></td><td height="17" width="43" align="center"><b> </b></td><td height="17" width="14" align="left"> </td><td height="17" width="150" align="center"><b>Liabilities</b></td><td height="17" width="10" align="center"><b> </b></td><td height="17" width="14" align="center"><b> </b></td><td height="17" width="43" align="center"><b> </b></td></tr><tr><td width="253" align="left" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>(in millions of dollars)</b></td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="138"><b>Balance Sheet Location</b></td><td height="17" width="10" align="center"><b> </b></td><td height="17" width="14" align="center"><b> </b></td><td height="17" width="43" align="center"><b> </b></td><td height="17" width="14" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="150"><b>Balance Sheet Location</b></td><td height="17" width="10" align="center"><b> </b></td><td height="17" width="14" align="center"><b> </b></td><td height="17" width="43" align="center"><b> </b></td></tr><tr><td width="253" align="left" colspan="2" style="border-top: 1px solid #000000;" height="17">Derivatives designated as hedging instruments:</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="138"> </td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="43" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="150"> </td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="43" align="left"> </td></tr><tr><td height="17" width="21" align="left"> </td><td height="17" width="232" align="left">Foreign Exchange Contracts</td><td height="17" width="9" align="left"> </td><td height="17" width="138" align="left">Other Current Assets</td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" width="43" align="right"> 48 </td><td height="17" width="14" align="left"> </td><td height="17" width="150" align="left">Accrued Liabilities</td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" width="43" align="right"> 61 </td></tr><tr><td height="17" width="21" align="left"> </td><td height="17" width="232" align="left">Foreign Exchange Contracts</td><td height="17" width="9" align="left"> </td><td height="17" width="138" align="left">Other Assets</td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="43"> 57 </td><td height="17" width="14" align="left"> </td><td height="17" width="150" align="left">Other Long-Term Liabilities</td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="43"> 1 </td></tr><tr><td height="17" width="21" align="left"> </td><td height="17" width="232" align="left"> </td><td height="17" width="9" align="left"> </td><td height="17" width="138" align="left"> </td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="43"> 105 </td><td height="17" width="14" align="left"> </td><td height="17" width="150" align="left"> </td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="43"> 62 </td></tr><tr><td height="11" width="21" align="left"> </td><td height="11" width="232" align="left"> </td><td height="11" width="9" align="left"> </td><td height="11" width="138" align="left"> </td><td height="11" width="10" align="left"> </td><td height="11" width="14" align="left"> </td><td height="11" style="border-top: 1px solid #000000;" align="left" width="43"> </td><td height="11" width="14" align="left"> </td><td height="11" width="150" align="left"> </td><td height="11" width="10" align="left"> </td><td height="11" width="14" align="left"> </td><td height="11" style="border-top: 1px solid #000000;" align="left" width="43"> </td></tr><tr><td width="253" align="left" height="17" colspan="2">Derivatives not designated as hedging instruments:</td><td height="17" width="9" align="left"> </td><td height="17" width="138" align="left"> </td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="43" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="150" align="left"> </td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="43" align="left"> </td></tr><tr><td height="17" width="21" align="left"> </td><td height="17" width="232" align="left">Foreign Exchange Contracts</td><td height="17" width="9" align="left"> </td><td height="17" width="138" align="left">Other Current Assets</td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" width="43" align="right"> 84 </td><td height="17" width="14" align="left"> </td><td height="17" width="150" align="left">Accrued Liabilities</td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" width="43" align="right"> 73 </td></tr><tr><td height="17" width="21" align="left"> </td><td height="17" width="232" align="left">Foreign Exchange Contracts</td><td height="17" width="9" align="left"> </td><td height="17" width="138" align="left">Other Assets</td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="43"> 6 </td><td height="17" width="14" align="left"> </td><td height="17" width="150" align="left">Other Long-Term Liabilities</td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="43"> 10 </td></tr><tr><td height="17" width="21" align="left"> </td><td height="17" width="232" align="left"> </td><td height="17" width="9" align="left"> </td><td height="17" width="138" align="left"> </td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="43"> 90 </td><td height="17" width="14" align="left"> </td><td height="17" width="150" align="left"> </td><td height="17" width="10" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="43"> 83 </td></tr><tr><td height="11" width="21" align="left"> </td><td height="11" width="232" align="left"> </td><td height="11" width="9" align="left"> </td><td height="11" width="138" align="left"> </td><td height="11" width="10" align="left"> </td><td height="11" width="14" align="left"> </td><td height="11" style="border-bottom: 1px solid #000000;" align="left" width="43"> </td><td height="11" width="14" align="left"> </td><td height="11" width="150" align="left"> </td><td height="11" width="10" align="left"> </td><td height="11" width="14" align="left"> </td><td height="11" style="border-bottom: 1px solid #000000;" align="left" width="43"> </td></tr><tr><td width="253" align="left" height="18" colspan="2">Total Derivative Contracts </td><td height="18" width="9" align="left"> </td><td height="18" width="138" align="left"> </td><td height="18" width="10" align="left"> </td><td height="18" width="14" align="left">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="43"> 195 </td><td height="18" width="14" align="left"> </td><td height="18" width="150" align="left"> </td><td height="18" width="10" align="left"> </td><td height="18" width="14" align="left">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="43"> 145 </td></tr></table><p>The impact on Accumulated other comprehensive loss from foreign exchange derivative instruments that qualified as cash flow hedges for the period was as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="35" width="35" align="left"><b> </b></td><td height="35" width="95" align="left"><b> </b></td><td height="35" width="412" align="left"><b> </b></td><td height="35" width="11" align="left"><b> </b></td><td height="35" width="12" align="left"> </td><td height="35" width="75" align="center"><b>Quarter Ended</b></td><td height="35" width="13" align="left"> </td><td height="35" width="75" align="center"><b>Nine Months Ended</b></td></tr><tr><td width="542" align="left" colspan="3" style="border-bottom: 1px solid #000000;" height="25"><b>(in millions of dollars)</b></td><td height="25" width="11" align="left"><b> </b></td><td height="25" width="12" align="left"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="center" width="75"><b>September 30, 2009</b></td><td height="25" width="13" align="left"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="center" width="75"><b>September 30, 2009</b></td></tr><tr><td width="542" align="left" colspan="3" style="border-top: 1px solid #000000;" height="17">Gain recorded in Accumulated other comprehensive loss</td><td height="17" width="11" align="left"><b> </b></td><td height="17" width="12" align="left">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 148 </td><td height="17" width="13" align="left">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 150 </td></tr><tr><td width="542" align="left" height="17" colspan="3">Loss reclassified from Accumulated other comprehensive loss into Product Sales (effective portion)</td><td height="17" width="11" align="left"> </td><td height="17" width="12" align="left"> </td><td height="17" width="75" align="right"> (39)</td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> (138)</td></tr><tr><td width="542" align="left" height="17" colspan="3">Loss recognized in Other Income, net on derivatives (ineffective portion)</td><td height="17" width="11" align="left"> </td><td height="17" width="12" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> (5)</td></tr><tr><td height="6" width="35" align="left"> </td><td height="6" width="95" align="left"> </td><td height="6" width="412" align="left"> </td><td height="6" width="11" align="left"> </td><td height="6" width="12" align="left"> </td><td height="6" width="75" align="left"> </td><td height="6" width="13" align="left"> </td><td height="6" width="75" align="left"> </td></tr></table><p>Assuming current market conditions continue, of the amount recorded in Accumulated other comprehensive loss, a $9 million pre-tax gain is expected to be reclassified into product sales or cost of products sold to reflect the fixed prices obtained from foreign exchange hedging within the next 12 months. Gains and losses recognized in earnings related to the discontinuance or the ineffectiveness of cash flow hedges was $5 million for the nine months ended September 30, 2009. The ineffectiveness recognized in earnings was the result of certain forecasted product sales transactions no longer occurring and was recorded in the first quarter of 2009. At September 30, 2009, all derivative contracts accounted for as cash flow hedges mature by December 2014.<br /></p><p>The effect on the Condensed Consolidated Statement of Operations from foreign exchange contracts not designated as hedging instruments was as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="25" width="35" align="left"><b> </b></td><td height="25" width="95" align="left"><b> </b></td><td height="25" width="412" align="left"><b> </b></td><td height="25" width="11" align="left"><b> </b></td><td height="25" width="11" align="left"><b> </b></td><td height="25" width="75" align="center"><b>Quarter Ended</b></td><td height="25" width="13" align="left"><b> </b></td><td height="25" width="75" align="center"><b>Nine Months Ended</b></td></tr><tr><td width="542" align="left" colspan="3" style="border-bottom: 1px solid #000000;" height="25"><b>(in millions of dollars)</b></td><td height="25" width="11" align="left"><b> </b></td><td height="25" width="11" align="left"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="center" width="75"><b>September 30, 2009</b></td><td height="25" width="13" align="left"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="center" width="75"><b>September 30, 2009</b></td></tr><tr><td width="542" align="left" colspan="3" style="border-top: 1px solid #000000;" height="17">Gain (Loss) recognized in Other Income, net </td><td height="17" width="11" align="left"><b> </b></td><td height="17" width="11" align="left">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 17 </td><td height="17" width="13" align="left">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> (31)</td></tr><tr><td height="6" width="35" align="left"> </td><td height="6" width="95" align="left"> </td><td height="6" width="412" align="left"> </td><td height="6" width="11" align="left"> </td><td height="6" width="11" align="left"> </td><td height="6" width="75" align="left"> </td><td height="6" width="13" align="left"> </td><td height="6" width="75" align="left"> </td></tr></table><p>Fair Value Disclosure. The Fair Value Measurements and Disclosures Topic of the FASB ASC defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. The Topic indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability, and also defines fair value based upon an exit price model. <br /><br />We adopted the requirements of the Fair Value Measurements and Disclosure Topic as of January 1, 2008, with the exception of the application to non-recurring nonfinancial assets and nonfinancial liabilities, which was delayed and therefore adopted as of January 1, 2009. As of September 30, 2009, we do not have any significant non-recurring measurements of nonfinancial assets and nonfinancial liabilities. <br /><br />Valuation Hierarchy. The Fair Value Measurements and Disclosure Topic of the FASB ASC establishes a valuation hierarchy for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.<br /><br />The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2009:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="60" style="border-bottom: 1px solid #000000;" align="left" width="289"><b>(in millions of dollars)</b></td><td height="60" width="19" align="left"><b></b></td><td width="88" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="60"><b>Total Carrying Value at
September 30, 2009</b></td><td height="60" width="19" align="left"> </td><td width="88" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="60"><b>Quoted price in active markets
(Level 1)</b></td><td height="60" width="19" align="left"> </td><td width="88" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="60"><b>Significant other observable inputs
(Level 2)</b></td><td height="60" width="19" align="left"> </td><td width="88" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="60"><b>Unobservable inputs
(Level 3)</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="289">Available-for-sale securities</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 631 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 631 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> - </td></tr><tr><td height="17" width="289" align="left">Derivative assets</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 195 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 195 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> - </td></tr><tr><td height="17" width="289" align="left">Derivative liabilities</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 145 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> 145 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="75" align="right"> - </td></tr></table><p>Valuation Techniques. Our available for sale securities include equity investments that are traded in an active market. They are measured at fair value using closing stock prices from active markets and are classified within Level 1 of the valuation hierarchy. Our derivative assets and liabilities include foreign exchange and commodity derivatives that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and our counterparties’ credit risks. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. Based on our continued ability to trade securities and enter into forward contracts, we consider the markets for our fair value instruments to be active. <br /><br />As of September 30, 2009, there has not been any significant impact to the fair value of our derivative liabilities due to our own credit risk. Similarly, there has not been any significant adverse impact to our derivative assets based on our evaluation of our counterparties’ credit risks. <br /><br />The Financial Instruments Topic of the FASB ASC requires interim disclosures regarding the fair values of financial instruments. Additionally, this topic requires disclosure of the methods and significant assumptions used to estimate the fair value of certain financial instruments on an interim basis as well as changes in the methods and significant assumptions from prior periods. The interim disclosure requirements of this Topic do not change the previous accounting treatment for these financial instruments. We adopted the interim disclosure requirements under this Topic during the quarter ended June 30, 2009. <br /><br />The carrying amounts and fair values of financial instruments at September 30, 2009 and December 31, 2008 are as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="33" align="left"> </td><td height="17" width="320" align="left"> </td><td height="17" width="19" align="left"> </td><td width="175" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>September 30, 2009</b></td><td height="17" width="19" align="left"> </td><td width="175" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>December 31, 2008</b></td></tr><tr><td width="353" align="left" colspan="2" style="border-bottom: 1px solid #000000;" height="34"><b>(in millions of dollars)</b></td><td height="34" width="19" align="left"></td><td width="78" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="34"><b>Carrying
Amount</b></td><td height="34" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td width="78" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="34"><b>Fair
Value</b></td><td height="34" width="19" align="left"></td><td width="78" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="34"><b>Carrying
Amount</b></td><td height="34" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td width="78" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="34"><b>Fair
Value</b></td></tr><tr><td width="353" align="left" colspan="2" style="border-top: 1px solid #000000;" height="17">Financial Assets and Liabilities</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="64"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="64"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="64"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="64"> </td></tr><tr><td height="17" width="33" align="left"> </td><td height="17" width="320" align="left">Marketable equity securities</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" width="64" align="right"> 631 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" width="64" align="right"> 631 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" width="64" align="right"> 325 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left">$</td><td height="17" width="64" align="right"> 325 </td></tr><tr><td height="17" width="33" align="left"> </td><td height="17" width="320" align="left">Long-term receivables</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> 362 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> 345 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> 343 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> 316 </td></tr><tr><td height="17" width="33" align="left"> </td><td height="17" width="320" align="left">Customer financing notes receivable</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> 320 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> 256 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> 316 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> 245 </td></tr><tr><td height="17" width="33" align="left"> </td><td height="17" width="320" align="left">Short-term borrowings</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> (943)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> (943)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> (1,023)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> (1,023)</td></tr><tr><td height="17" width="33" align="left"> </td><td height="17" width="320" align="left">Long-term debt</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> (9,440)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> (10,352)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> (10,408)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="64" align="right"> (11,332)</td></tr></table><p>The above fair values were computed based on comparable transactions, quoted market prices, discounted future cash flows or an estimate of the amount to be received or paid to terminate or settle the agreement, as applicable. Differences from carrying amounts are attributable to interest and or credit rate changes subsequent to when the transaction occurred. The values of marketable equity securities represent our investment in common stock that is classified as available for sale and is accounted for at fair value. The fair values of cash and cash equivalents, accounts receivable, net, short-term borrowings, and accounts payable approximate the carrying amounts due to the short-term maturities of these instruments. <br /> <br />We have outstanding financing and rental commitments totaling $1,036 million at September 30, 2009. Risks associated with changes in interest rates on these commitments are mitigated by the fact that interest rates are variable during the commitment term and are set at the date of funding based on current market conditions, the fair value of the underlying collateral and the credit worthiness of the customers. As a result, the fair value of these financings is expected to equal the amounts funded. The fair value of the commitment itself is not readily determinable and is not considered significant.<br /></p></div>
<div style="font-size:12pt"><p>Note 9: Equity <br /><br />A summary of the changes in equity for the quarters and nine months ended September 30, 2009 and 2008 is provided below: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="238" align="left"> </td><td height="17" width="9" align="left"> </td><td width="451" align="center" colspan="17" style="border-bottom: 1px solid #000000;" height="17"><b>Quarter Ended September 30,</b></td></tr><tr><td width="282" align="left" colspan="4" style="border-bottom: 1px solid #000000;" height="17"><b>(in millions of dollars)</b></td><td height="17" width="9" align="left"> </td><td width="221" align="center" colspan="8" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="9"><b> </b></td><td width="221" align="center" colspan="8" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td height="36" style="border-top: 1px solid #000000;" align="left" width="15"><b> </b></td><td height="36" style="border-top: 1px solid #000000;" align="left" width="15"><b> </b></td><td height="36" style="border-top: 1px solid #000000;" align="left" width="14"><b> </b></td><td height="36" style="border-top: 1px solid #000000;" align="left" width="238"><b> </b></td><td height="36" width="9" align="left"> </td><td width="65" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Shareowners'
Equity</b></td><td height="36" style="border-top: 1px solid #000000;" align="center" width="9"><b> </b></td><td width="73" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Noncontrolling
Interest</b></td><td height="36" style="border-top: 1px solid #000000;" align="center" width="9"><b> </b></td><td width="65" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Total
Equity</b></td><td height="36" width="9" align="center"><b> </b></td><td width="65" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Shareowners'
Equity</b></td><td height="36" style="border-top: 1px solid #000000;" align="center" width="9"><b> </b></td><td width="73" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Noncontrolling
Interest</b></td><td height="36" style="border-top: 1px solid #000000;" align="center" width="9"><b> </b></td><td width="65" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Total
Equity</b></td></tr><tr><td width="282" align="left" height="17" colspan="4">Equity, beginning of period</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 17,379 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="59"> 1,027 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 18,406 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 21,912 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="59"> 957 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 22,869 </td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Comprehensive income for the period</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td width="252" align="left" height="17" colspan="2">Net income</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 1,058 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> 87 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> 1,145 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 1,269 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> 101 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 1,370 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td width="252" align="left" height="17" colspan="2">Other comprehensive income (loss):</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="238" align="left">Foreign currency translation, net</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 485 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> 25 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> 510 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (965)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> (17)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (982)</td></tr><tr><td height="35" width="15" align="left"> </td><td height="35" width="15" align="left"> </td><td height="35" width="14" align="left"> </td><td height="35" width="238" align="left">Increases (decreases) in unrealized gains
from available-for-sale investments, net</td><td height="35" width="9" align="left"> </td><td height="35" width="14" align="left"> </td><td height="35" width="51" align="right"> 63 </td><td height="35" width="9" align="left"> </td><td height="35" width="14" align="right"> </td><td height="35" width="59" align="right"> - </td><td height="35" width="9" align="left"> </td><td height="35" width="14" align="right"> </td><td height="35" width="51" align="right"> 63 </td><td height="35" width="9" align="left"> </td><td height="35" width="14" align="left"> </td><td height="35" width="51" align="right"> (19)</td><td height="35" width="9" align="left"> </td><td height="35" width="14" align="left"> </td><td height="35" width="59" align="right"> - </td><td height="35" width="9" align="left"> </td><td height="35" width="14" align="left"> </td><td height="35" width="51" align="right"> (19)</td></tr><tr><td height="18" width="15" align="left"> </td><td height="18" width="15" align="left"> </td><td height="18" width="14" align="left"> </td><td height="18" width="238" align="left">Cash flow hedging gains (losses)</td><td height="18" width="9" align="left"> </td><td height="18" width="14" align="left"> </td><td height="18" width="51" align="right"> 136 </td><td height="18" width="9" align="left"> </td><td height="18" width="14" align="right"> </td><td height="18" width="59" align="right"> - </td><td height="18" width="9" align="left"> </td><td height="18" width="14" align="right"> </td><td height="18" width="51" align="right"> 136 </td><td height="18" width="9" align="left"> </td><td height="18" width="14" align="left"> </td><td height="18" width="51" align="right"> (38)</td><td height="18" width="9" align="left"> </td><td height="18" width="14" align="left"> </td><td height="18" width="59" align="right"> - </td><td height="18" width="9" align="left"> </td><td height="18" width="14" align="left"> </td><td height="18" width="51" align="right"> (38)</td></tr><tr><td height="35" width="15" align="left"> </td><td height="35" width="15" align="left"> </td><td height="35" width="14" align="left"> </td><td height="35" width="238" align="left">Change in pension and post-retirement
benefit plans, net</td><td height="35" width="9" align="left"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="right" width="51"> 11 </td><td height="35" width="9" align="left"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="right" width="59"> - </td><td height="35" width="9" align="left"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="right" width="51"> 11 </td><td height="35" width="9" align="left"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="right" width="51"> 34 </td><td height="35" width="9" align="left"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="right" width="59"> - </td><td height="35" width="9" align="left"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="35" style="border-bottom: 1px solid #000000;" align="right" width="51"> 34 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td width="252" align="left" height="17" colspan="2">Total other comprehensive income (loss)</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="51"> 695 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="59"> 25 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="51"> 720 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="51"> (988)</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="59"> (17)</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="51"> (1,005)</td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Total comprehensive income for the period</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 1,753 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="59"> 112 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 1,865 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 281 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="59"> 84 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 365 </td></tr><tr><td height="6" width="15" align="left"> </td><td height="6" width="15" align="left"> </td><td height="6" width="14" align="left"> </td><td height="6" width="238" align="left"> </td><td height="6" width="9" align="left"> </td><td height="6" width="14" align="left"> </td><td height="6" width="51" align="right"> </td><td height="6" width="9" align="left"> </td><td height="6" width="14" align="right"> </td><td height="6" width="59" align="right"> </td><td height="6" width="9" align="left"> </td><td height="6" width="14" align="right"> </td><td height="6" width="51" align="right"> </td><td height="6" width="9" align="left"> </td><td height="6" width="14" align="left"> </td><td height="6" width="51" align="right"> </td><td height="6" width="9" align="left"> </td><td height="6" width="14" align="left"> </td><td height="6" width="59" align="right"> </td><td height="6" width="9" align="left"> </td><td height="6" width="14" align="left"> </td><td height="6" width="51" align="right"> </td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Common Stock issued under employee plans</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 177 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> 177 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 113 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 113 </td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Common Stock repurchased</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (430)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> (430)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (925)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (925)</td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Dividends on Common Stock</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (339)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="left"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> (339)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (286)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (286)</td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Dividends on ESOP Common Stock</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (14)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> (14)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (12)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (12)</td></tr><tr><td height="33" width="15" align="left"> </td><td width="267" align="left" height="33" colspan="3">Dividends attributable to noncontrolling
interest</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="right"> </td><td height="33" width="59" align="right"> (59)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="right"> </td><td height="33" width="51" align="right"> (59)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="59" align="right"> (81)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> (81)</td></tr><tr><td height="33" width="15" align="left"> </td><td width="267" align="left" height="33" colspan="3">Purchase of subsidiary shares from
noncontrolling interest</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> (37)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="right"> </td><td height="33" width="59" align="right"> (14)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="right"> </td><td height="33" width="51" align="right"> (51)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="59" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> - </td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Acquired noncontrolling interest</td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="51"> - </td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="59"> 91 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="51"> 91 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="51"> - </td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="59"> 2 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="51"> 2 </td></tr><tr><td height="6" width="15" align="left"> </td><td height="6" width="15" align="left"> </td><td height="6" width="14" align="left"> </td><td height="6" width="238" align="left"> </td><td height="6" width="9" align="left"> </td><td height="6" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="6" style="border-top: 1px solid #000000;" align="right" width="51"> </td><td height="6" width="9" align="left"> </td><td height="6" style="border-top: 1px solid #000000;" align="right" width="14"> </td><td height="6" style="border-top: 1px solid #000000;" align="right" width="59"> </td><td height="6" width="9" align="left"> </td><td height="6" style="border-top: 1px solid #000000;" align="right" width="14"> </td><td height="6" style="border-top: 1px solid #000000;" align="right" width="51"> </td><td height="6" width="9" align="left"> </td><td height="6" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="6" style="border-top: 1px solid #000000;" align="right" width="51"> </td><td height="6" width="9" align="left"> </td><td height="6" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="6" style="border-top: 1px solid #000000;" align="right" width="59"> </td><td height="6" width="9" align="left"> </td><td height="6" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="6" style="border-top: 1px solid #000000;" align="right" width="51"> </td></tr><tr><td width="282" align="left" height="18" colspan="4">Equity, end of period</td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="51"> 18,489 </td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="59"> 1,157 </td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="51"> 19,646 </td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="51"> 21,083 </td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="59"> 962 </td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="51"> 22,045 </td></tr></table><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="238" align="left"> </td><td height="17" width="9" align="left"> </td><td width="451" align="center" colspan="17" style="border-bottom: 1px solid #000000;" height="17"><b>Nine Months Ended September 30,</b></td></tr><tr><td width="282" align="left" colspan="4" style="border-bottom: 1px solid #000000;" height="17"><b>(in millions of dollars)</b></td><td height="17" width="9" align="left"> </td><td width="221" align="center" colspan="8" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="9"><b> </b></td><td width="221" align="center" colspan="8" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td height="36" style="border-top: 1px solid #000000;" align="left" width="15"><b> </b></td><td height="36" style="border-top: 1px solid #000000;" align="left" width="15"><b> </b></td><td height="36" style="border-top: 1px solid #000000;" align="left" width="14"><b> </b></td><td height="36" style="border-top: 1px solid #000000;" align="left" width="238"><b> </b></td><td height="36" width="9" align="left"> </td><td width="65" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Shareowners'
Equity</b></td><td height="36" style="border-top: 1px solid #000000;" align="center" width="9"><b> </b></td><td width="73" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Noncontrolling
Interest</b></td><td height="36" style="border-top: 1px solid #000000;" align="center" width="9"><b> </b></td><td width="65" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Total
Equity</b></td><td height="36" width="9" align="center"><b> </b></td><td width="65" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Shareowners'
Equity</b></td><td height="36" style="border-top: 1px solid #000000;" align="center" width="9"><b> </b></td><td width="73" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Noncontrolling
Interest</b></td><td height="36" style="border-top: 1px solid #000000;" align="center" width="9"><b> </b></td><td width="65" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="36"><b>Total
Equity</b></td></tr><tr><td width="282" align="left" height="17" colspan="4">Equity, beginning of period</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 15,917 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="59"> 1,009 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 16,926 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 21,355 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="59"> 912 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 22,267 </td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Comprehensive income for the period</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td width="252" align="left" height="17" colspan="2">Net income</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 2,756 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> 254 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> 3,010 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 3,544 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> 280 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 3,824 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td width="252" align="left" height="17" colspan="2">Other comprehensive income (loss):</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="238" align="left">Foreign currency translation, net</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 937 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> 11 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> 948 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (800)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> 15 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (785)</td></tr><tr><td height="34" width="15" align="left"> </td><td height="34" width="15" align="left"> </td><td height="34" width="14" align="left"> </td><td height="34" width="238" align="left">Increases (decreases) in unrealized gains
from available-for-sale investments, net</td><td height="34" width="9" align="left"> </td><td height="34" width="14" align="left"> </td><td height="34" width="51" align="right"> 93 </td><td height="34" width="9" align="left"> </td><td height="34" width="14" align="right"> </td><td height="34" width="59" align="right"> - </td><td height="34" width="9" align="left"> </td><td height="34" width="14" align="right"> </td><td height="34" width="51" align="right"> 93 </td><td height="34" width="9" align="left"> </td><td height="34" width="14" align="left"> </td><td height="34" width="51" align="right"> (34)</td><td height="34" width="9" align="left"> </td><td height="34" width="14" align="left"> </td><td height="34" width="59" align="right"> - </td><td height="34" width="9" align="left"> </td><td height="34" width="14" align="left"> </td><td height="34" width="51" align="right"> (34)</td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="238" align="left">Cash flow hedging gains (losses)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 208 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> - </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> 208 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (73)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> - </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (73)</td></tr><tr><td height="34" width="15" align="left"> </td><td height="34" width="15" align="left"> </td><td height="34" width="14" align="left"> </td><td height="34" width="238" align="left">Change in pension and post-retirement
benefit plans, net</td><td height="34" width="9" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="51"> 87 </td><td height="34" width="9" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="59"> - </td><td height="34" width="9" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="51"> 87 </td><td height="34" width="9" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="51"> 81 </td><td height="34" width="9" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="59"> - </td><td height="34" width="9" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="51"> 81 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="15" align="left"> </td><td width="252" align="left" height="17" colspan="2">Total other comprehensive income (loss)</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="51"> 1,325 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="59"> 11 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="51"> 1,336 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="51"> (826)</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="59"> 15 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="51"> (811)</td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Total comprehensive income for the period</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 4,081 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="59"> 265 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 4,346 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 2,718 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="59"> 295 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="51"> 3,013 </td></tr><tr><td height="7" width="15" align="left"> </td><td height="7" width="15" align="left"> </td><td height="7" width="14" align="left"> </td><td height="7" width="238" align="left"> </td><td height="7" width="9" align="left"> </td><td height="7" width="14" align="left"> </td><td height="7" width="51" align="right"> </td><td height="7" width="9" align="left"> </td><td height="7" width="14" align="right"> </td><td height="7" width="59" align="right"> </td><td height="7" width="9" align="left"> </td><td height="7" width="14" align="right"> </td><td height="7" width="51" align="right"> </td><td height="7" width="9" align="left"> </td><td height="7" width="14" align="left"> </td><td height="7" width="51" align="right"> </td><td height="7" width="9" align="left"> </td><td height="7" width="14" align="left"> </td><td height="7" width="59" align="right"> </td><td height="7" width="9" align="left"> </td><td height="7" width="14" align="left"> </td><td height="7" width="51" align="right"> </td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Common Stock issued under employee plans</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 397 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> 397 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 408 </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> 408 </td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Common Stock repurchased</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (780)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> (780)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (2,492)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (2,492)</td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Dividends on Common Stock</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (1,018)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="left"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> (1,018)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (869)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (869)</td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Dividends on ESOP Common Stock</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (44)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="right"> </td><td height="17" width="51" align="right"> (44)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (37)</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="59" align="right"> </td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="51" align="right"> (37)</td></tr><tr><td height="33" width="15" align="left"> </td><td width="267" align="left" height="33" colspan="3">Dividends attributable to noncontrolling
interest</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="right"> </td><td height="33" width="59" align="right"> (259)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="right"> </td><td height="33" width="51" align="right"> (259)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="59" align="right"> (270)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> (270)</td></tr><tr><td height="33" width="15" align="left"> </td><td width="267" align="left" height="33" colspan="3">Purchase of subsidiary shares from
noncontrolling interest</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> (64)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="right"> </td><td height="33" width="59" align="right"> (24)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="right"> </td><td height="33" width="51" align="right"> (88)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="59" align="right"> (51)</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> (51)</td></tr><tr><td height="33" width="15" align="left"> </td><td width="267" align="left" height="33" colspan="3">Sale of subsidiary shares in
noncontrolling interest</td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="right"> </td><td height="33" width="59" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="right"> </td><td height="33" width="51" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> - </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="59" align="right"> 40 </td><td height="33" width="9" align="left"> </td><td height="33" width="14" align="left"> </td><td height="33" width="51" align="right"> 40 </td></tr><tr><td height="17" width="15" align="left"> </td><td width="267" align="left" height="17" colspan="3">Acquired noncontrolling interest</td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="51"> - </td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="59"> 166 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="51"> 166 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="51"> - </td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="59"> 36 </td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="51"> 36 </td></tr><tr><td height="7" width="15" align="left"> </td><td height="7" width="15" align="left"> </td><td height="7" width="14" align="left"> </td><td height="7" width="238" align="left"> </td><td height="7" width="9" align="left"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="51"> </td><td height="7" width="9" align="left"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="59"> </td><td height="7" width="9" align="left"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="51"> </td><td height="7" width="9" align="left"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="51"> </td><td height="7" width="9" align="left"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="59"> </td><td height="7" width="9" align="left"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="7" style="border-top: 1px solid #000000;" align="left" width="51"> </td></tr><tr><td width="282" align="left" height="18" colspan="4">Equity, end of period</td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="51"> 18,489 </td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="59"> 1,157 </td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="51"> 19,646 </td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="51"> 21,083 </td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="59"> 962 </td><td height="18" width="9" align="left"> </td><td height="18" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-bottom: 3px double #000000;" align="right" width="51"> 22,045 </td></tr></table><p>Effective January 1, 2009, we adopted the provisions under the Consolidation Topic of the FASB ASC as it relates to the accounting for noncontrolling interests in Consolidated Financial Statements. These provisions require that the carrying value of noncontrolling interests (previously referred to as minority interests) be removed from the mezzanine section of the balance sheet and reclassified as equity, and that consolidated net income be recast to include net income attributable to the noncontrolling interest. As a result of this adoption, we reclassified noncontrolling interests in the amounts of $1,009 million and $962 million from the mezzanine section to equity in the December 31, 2008 and September 30, 2008, balance sheets, respectively. <br /><br />Consistent with the requirements under the Business Combinations Topic of the FASB ASC and the accounting for noncontrolling interests in Consolidated Financial Statements, changes in noncontrolling interests that do not result in a change of control and where there is a difference between fair value and carrying value are accounted for as equity transactions. A summary of these changes in ownership interests in subsidiaries and the effect on shareowners’ equity for the quarter and nine months ended September 30, 2009 is provided below:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width="459" align="left" colspan="3" style="border-bottom: 1px solid #000000;" height="27"><b>(in millions of dollars)</b></td><td height="27" width="9" align="left"> </td><td width="96" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="27"><b>Quarter Ended September 30, 2009</b></td><td height="27" width="27" align="left"> </td><td width="96" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="27"><b>Nine Months Ended September 30, 2009</b></td></tr><tr><td width="459" align="left" colspan="3" style="border-top: 1px solid #000000;" height="17">Net income attributable to common shareowners</td><td height="17" width="9" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="82"> 1,058 </td><td height="17" width="27" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="82"> 2,756 </td></tr><tr><td height="8" width="15" align="left"> </td><td height="8" width="15" align="left"> </td><td height="8" width="429" align="left"> </td><td height="8" width="9" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="82"> </td><td height="8" width="27" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="82"> </td></tr><tr><td width="459" align="left" height="17" colspan="3">Transfers to noncontrolling interests</td><td height="17" width="9" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="82" align="right"> </td><td height="17" width="27" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="82" align="right"> </td></tr><tr><td height="17" width="15" align="left"> </td><td width="444" align="left" height="17" colspan="2">Decrease in common stock for purchase of subsidiary shares</td><td height="17" width="9" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="82"> (37)</td><td height="17" width="27" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="82"> (64)</td></tr><tr><td height="8" width="15" align="left"> </td><td height="8" width="15" align="left"> </td><td height="8" width="429" align="left"> </td><td height="8" width="9" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="82"> </td><td height="8" width="27" align="left"> </td><td height="8" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="8" style="border-top: 1px solid #000000;" align="right" width="82"> </td></tr><tr><td width="459" align="left" height="33" colspan="3">Change from net income attributable to common shareowners and transfers to
noncontrolling interests</td><td height="33" width="9" align="left"> </td><td height="33" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="33" style="border-bottom: 3px double #000000;" align="right" width="82"> 1,021 </td><td height="33" width="27" align="left"> </td><td height="33" style="border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="33" style="border-bottom: 3px double #000000;" align="right" width="82"> 2,692 </td></tr></table></div>
<div style="font-size:12pt"><p>Note 10: Guarantees <br /><br />We extend a variety of financial, market value and product performance guarantees to third parties. There have been no material changes to guarantees outstanding since December 31, 2008. <br /><br />The changes in the carrying amount of service and product warranties and product performance guarantees for the nine months ended September 30, 2009 and 2008 are as follows: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="505"><b>(in millions of dollars)</b></td><td height="17" width="19" align="left"><b></b></td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" width="19" align="left"><b> </b></td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="505">Balance as of January 1</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 1,136 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 1,252 </td></tr><tr><td height="17" width="505" align="left">Warranties and performance guarantees issued</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 275 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> 363 </td></tr><tr><td height="17" width="505" align="left">Settlements made</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (312)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="75" align="right"> (457)</td></tr><tr><td height="17" width="505" align="left">Other</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (24)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 1 </td></tr><tr><td height="18" width="505" align="left">Balance as of September 30</td><td height="18" width="19" align="left"> </td><td height="18" width="14" align="right">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 1,075 </td><td height="18" width="19" align="left"> </td><td height="18" width="14" align="right">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75"> 1,159 </td></tr></table></div>
<div style="font-size:12pt"><p>Note 11: Collaborative Arrangements<br /><br />In view of the risks and costs associated with developing new engines, Pratt & Whitney has entered into certain collaboration arrangements in which costs, revenues and risks are shared. Revenues generated from engine programs, spare parts sales, and aftermarket business under collaboration arrangements are recorded as earned in our financial statements. Amounts attributable to our collaborative partners for their share of revenues are recorded as an expense in our financial statements based upon the terms and nature of the arrangement. Costs associated with engine programs under collaborative arrangements are expensed as incurred. Under these arrangements, collaborators contribute their program share of engine parts, incur their own production costs and make certain payments to Pratt & Whitney for shared or joint program costs. The reimbursement of the collaborator’s share of program costs is recorded as a reduction of the related expense item at that time. As of September 30, 2009, the collaborators’ interests in existing engine production programs ranged from 1 percent to 29 percent. Pratt & Whitney directs those programs and is the principal participant in all existing collaborative arrangements. There are no individually significant collaborative arrangements and none of the partners exceed 25 percent share in an individual program. <br /><br />The following table illustrates the income statement classification and amounts attributable to transactions arising from the collaborative arrangements between participants for each period presented: </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="15" align="left"> </td><td height="17" width="321" align="left"> </td><td height="17" width="19" align="left"> </td><td width="171" align="center" height="17" colspan="5"><b>Quarter Ended </b></td><td height="17" width="19" align="left"> </td><td width="171" align="center" height="17" colspan="5"><b>Nine Months Ended</b></td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="321" align="left"> </td><td height="17" width="19" align="left"> </td><td width="171" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>September 30,</b></td><td height="17" width="19" align="left"> </td><td width="171" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>September 30,</b></td></tr><tr><td width="336" align="left" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>(in millions of dollars)</b></td><td height="17" width="19" align="left"><b> </b></td><td width="76" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="19"><b> </b></td><td width="76" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td><td height="17" width="19" align="left"><b> </b></td><td width="76" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="19"><b> </b></td><td width="76" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td width="336" align="left" colspan="2" style="border-top: 1px solid #000000;" height="17">Collaborator share of revenues:</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="63"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="63"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="63"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="63"> </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="321" align="left">Cost of products sold</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right">$ 167 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right">$ 267 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right">$ 567 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right">$ 794 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="321" align="left">Cost of services sold</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> 7 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> 4 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> 21 </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> 11 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="321" align="left"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td></tr><tr><td width="336" align="left" height="17" colspan="2">Collaborator share of program costs </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="321" align="left">(reimbursement of expenses incurred):</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="321" align="left">Cost of products sold</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (14)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (20)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (47)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (63)</td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="321" align="left">Research and development</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (14)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (11)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (46)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (34)</td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="321" align="left">Selling, general and administrative</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (1)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (3)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (4)</td><td height="17" width="19" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="63" align="right"> (8)</td></tr></table><p>The Collaborative Arrangements Topic of the FASB ASC requires that participants in a collaborative arrangement report costs incurred and revenues generated from such transactions on a gross basis and in the appropriate line items in each company’s financial statements. This is pursuant to the guidance in the Revenue Recognition Topic of the FASB ASC that addresses whether an entity should report revenue gross or net depending on whether the entity functions as a principal or agent. The Collaborative Arrangements Topic also requires disclosure of the nature and purpose of the participant’s collaborative arrangements, the participant’s rights and obligations under these arrangements, the accounting policy for collaborative arrangements, the income statement classification and amounts attributable to transactions arising from collaboration arrangements between participants, and the disclosure related to individually significant collaborative arrangements. These requirements were effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years, and must be applied retrospectively to all prior periods presented for all collaborative arrangements existing as of the effective date. <br /><br />We adopted the provisions of the Collaborative Arrangements Topic as of January 1, 2009. As required, we have applied the provisions retrospectively for all periods presented. As a result, the collaborators’ share of revenues, which were previously reported on a net basis, are now reported on a gross basis. Certain reclassifications were made to the prior year amounts in both the Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations. In the Condensed Consolidated Balance Sheet, accounts receivable and accounts payable were each increased by $368 million at December 31, 2008, in order to reflect the amounts owed to our collaborative partners for their share of revenues on a gross basis. <br /><br />The following table illustrates the effect of the retroactive application on our Revenues and Costs and Expenses for all collaborative arrangements existing as of the effective date:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="15" align="left"> </td><td height="17" width="158" align="left"> </td><td height="17" width="15" align="left"> </td><td width="255" align="center" colspan="8" style="border-bottom: 1px solid #000000;" height="17"><b>Quarter Ended September 30, 2008</b></td><td height="17" width="15" align="left"> </td><td width="255" align="center" colspan="8" style="border-bottom: 1px solid #000000;" height="17"><b>Nine Months Ended September 30, 2008</b></td></tr><tr><td width="173" align="left" colspan="2" style="border-bottom: 1px solid #000000;" height="42"><b>(in millions of dollars)</b></td><td height="42" width="15" align="left"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="42"><b>As
Previously Reported</b></td><td height="42" style="border-top: 1px solid #000000;" align="center" width="15"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="42"><b>Effect of Retroactive Application</b></td><td height="42" style="border-top: 1px solid #000000;" align="center" width="15"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="42"><b>Currently Reported </b></td><td height="42" width="15" align="left"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="42"><b>As
Previously Reported</b></td><td height="42" style="border-top: 1px solid #000000;" align="center" width="15"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="42"><b>Effect of Retroactive Application</b></td><td height="42" style="border-top: 1px solid #000000;" align="center" width="15"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="42"><b>Currently Reported </b></td></tr><tr><td width="173" align="left" colspan="2" style="border-top: 1px solid #000000;" height="17">Revenues:</td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="62"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="62"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="62"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="62"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="62"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="62"> </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="158" align="left">Product sales</td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="62" align="right"> 10,735 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="62" align="right"> 267 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="62" align="right"> 11,002 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="62" align="right"> 31,810 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="62" align="right"> 794 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left">$</td><td height="17" width="62" align="right"> 32,604 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="158" align="left">Service sales</td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 3,967 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 4 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 3,971 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 12,004 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 11 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 12,015 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="158" align="left">Other income, net</td><td height="17" width="15" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="62"> 112 </td><td height="17" width="15" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="62"> - </td><td height="17" width="15" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="62"> 112 </td><td height="17" width="15" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="62"> 368 </td><td height="17" width="15" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="62"> - </td><td height="17" width="15" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="62"> 368 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="158" align="left"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="62"> 14,814 </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="62"> 271 </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="62"> 15,085 </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="62"> 44,182 </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="62"> 805 </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="62"> 44,987 </td></tr><tr><td width="173" align="left" height="17" colspan="2">Costs and Expenses:</td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="62"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="62"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="62"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="62"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="62"> </td><td height="17" width="15" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="62"> </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="158" align="left">Cost of products sold</td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 7,979 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 267 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 8,246 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 23,882 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 794 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 24,676 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="158" align="left">Cost of services sold</td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 2,685 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 4 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 2,689 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 8,122 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 11 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 8,133 </td></tr><tr><td height="17" width="15" align="left"> </td><td height="17" width="158" align="left">Research and development</td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 436 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> - </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 436 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 1,281 </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> - </td><td height="17" width="15" align="left"> </td><td height="17" width="13" align="left"> </td><td height="17" width="62" align="right"> 1,281 </td></tr><tr><td height="34" width="15" align="left"> </td><td height="34" width="158" align="left">Selling, general and
administrative</td><td height="34" width="15" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="62"> 1,665 </td><td height="34" width="15" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="62"> - </td><td height="34" width="15" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="62"> 1,665 </td><td height="34" width="15" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="62"> 5,075 </td><td height="34" width="15" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="62"> - </td><td height="34" width="15" align="left"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="62"> 5,075 </td></tr><tr><td width="173" align="left" height="18" colspan="2">Operating profit</td><td height="18" width="15" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="62"> 2,049 </td><td height="18" width="15" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="62"> - </td><td height="18" width="15" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="62"> 2,049 </td><td height="18" width="15" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="62"> 5,822 </td><td height="18" width="15" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="62"> - </td><td height="18" width="15" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="13">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="62"> 5,822 </td></tr></table></div>
<div style="font-size:12pt"><p>Note 12: Contingent Liabilities <br /><br />Summarized below are the matters previously described in Note 15 of the Notes to the Consolidated Financial Statements in our 2008 Annual Report, incorporated by reference in our 2008 Form 10-K. <br /><br />Environmental. Our operations are subject to environmental regulation by federal, state and local authorities in the United States and regulatory authorities with jurisdiction over our foreign operations. <br /><br />We accrue for environmental investigatory, remediation, operating and maintenance costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. 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. Where no amount within a range of estimates is more likely, we accrue the minimum. For sites with multiple responsible parties, we consider our 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. We discount liabilities with fixed or reliably determinable future cash payments. We do not reduce accrued environmental liabilities by potential insurance reimbursements. We periodically reassess these accrued amounts. We believe that the likelihood of incurring losses materially in excess of amounts accrued is remote. <br /><br />Government. We are now, and believe that in light of the current U.S. government contracting environment we will continue to be, the subject of one or more U.S. government investigations. If we or one of our business units were charged with wrongdoing as a result of any of these investigations or other government investigations (including violations of certain environmental or export laws) the U.S. government could suspend us from bidding on or receiving awards of new U.S. government contracts pending the completion of legal proceedings. If convicted or found liable, the U.S. government could fine and debar us from new U.S. government contracting for a period generally not to exceed three years. The U.S. government could void any contracts found to be tainted by fraud. <br /><br />Our contracts with the U.S. government are also subject to audits. Like many defense contractors, we have 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. We have made voluntary refunds in those cases we believe appropriate and continue to litigate certain other cases. In addition, we accrue for liabilities associated with those matters that are probable and can be reasonably estimated. The most likely settlement amount to be incurred is accrued based upon a range of estimates. Where no amount within a range of estimates is more likely, then we accrue the minimum amount.<br /><br />As previously disclosed, the Department of Justice (DOJ) sued us in 1999 in the U.S. District Court for the Southern District of Ohio, claiming that Pratt & Whitney violated the civil False Claims Act and common law. This lawsuit relates to the “Fighter Engine Competition” between Pratt & Whitney’s F100 engine and General Electric’s F110 engine. The DOJ alleges that the government overpaid for F100 engines under contracts awarded by the U.S. Air Force in fiscal years 1985 through 1990 because Pratt & Whitney inflated its estimated costs for some purchased parts and withheld data that would have revealed the overstatements. At trial of this matter, completed in December 2004, the government claimed Pratt & Whitney’s liability to be $624 million. On August 1, 2008, the trial court judge held that the Air Force had not suffered any actual damages because Pratt & Whitney had made significant price concessions. However, the trial court judge found that Pratt & Whitney violated the False Claims Act due to inaccurate statements contained in the 1983 offer. In the absence of actual damages, the trial court judge awarded the DOJ the maximum civil penalty of $7.09 million, or $10,000 for each of the 709 invoices Pratt & Whitney submitted in 1989 and later under the contracts. Both the DOJ and UTC have appealed the decision. Should the government ultimately prevail, the outcome of this matter could result in a material effect on our results of operations in the period in which a liability would be recognized or cash flows for the period in which damages would be paid. <br /><br />As previously disclosed, in December 2008, the Department of Defense (DOD) issued a contract claim against Sikorsky to recover overpayments the DOD alleges it has incurred since 2003 in connection with cost accounting changes approved by the DOD and implemented by Sikorsky in 1999 and 2006. These changes relate to the calculation of material overhead rates in government contracts. The DOD claimed that Sikorsky’s liability is approximately $80 million (including interest). We believe this claim is without merit and intend to appeal. <br /><br />Other. We extend performance and operating cost guarantees beyond our normal warranty and service policies for extended periods on some of our products. We have accrued our estimate of the liability that may result under these guarantees and for service costs that are probable and can be reasonably estimated. <br /><br />We have accrued for environmental investigatory, remediation, operating and maintenance costs, performance guarantees and other litigation and claims based on our estimate of the probable outcome of these matters. While it is possible that the outcome of these matters may differ from the recorded liability, we believe that resolution of these matters will not have a material impact on our competitive position, results of operations, cash flows or financial condition. <br /><br />We also have other commitments and contingent liabilities related to legal proceedings, self insurance programs and matters arising out of the normal course of business. We accrue contingencies based upon a range of possible outcomes. If no amount within this range is a better estimate than any other, then we accrue the minimum amount.<br /><br />Except as otherwise noted above, we do not believe that resolution of any of these matters will have a material adverse effect upon our competitive position, results of operations, cash flows or financial condition. </p></div>
<div style="font-size:12pt"><p>Note 13: Segment Financial Data <br /><br />Our operations are classified into six principal segments: Otis, Carrier, UTC Fire & Security, Pratt & Whitney, Hamilton Sundstrand and Sikorsky. The segments are generally based on the management structure of the businesses and the grouping of similar operating companies, where each management organization has general operating autonomy over diversified products and services. <br /><br />As discussed more fully in Note 11 to the Condensed Consolidated Financial Statements, as of January 1, 2009 the collaborators’ share of revenues, which were previously reported on a net basis, are now reported on a gross basis as required under the Collaborative Arrangements Topic of the FASB ASC. Prior period amounts include retrospective application of the accounting for Collaborative Arrangements.<br /> <br />Results for the quarters and nine months ended September 30, 2009 and 2008 are as follows: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="187" align="left"><b>Quarter Ended September 30,</b></td><td height="17" width="19" align="left"><b> </b></td><td width="169" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>Revenues</b></td><td height="17" width="19" align="left"><b> </b></td><td width="169" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>Operating Profits</b></td><td height="17" width="19" align="left"><b> </b></td><td width="169" align="center" colspan="3" style="border-bottom: 1px solid #000000;" height="17"><b>Operating Profit Margins</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="187"><b>(in millions of dollars)</b></td><td height="17" width="19" align="left"><b></b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td><td height="17" width="19" align="left"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td><td height="17" width="19" align="left"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="187">Otis</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 2,962 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 3,245 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 633 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 648 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75">21.4% </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75">20.0% </td></tr><tr><td height="17" width="187" align="left">Carrier</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 3,007 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 3,917 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 312 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 421 </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">10.4% </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">10.7% </td></tr><tr><td height="17" width="187" align="left">UTC Fire & Security</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 1,383 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 1,624 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 149 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 154 </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">10.8% </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">9.5% </td></tr><tr><td height="17" width="187" align="left">Pratt & Whitney</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 3,031 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 3,421 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 444 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 530 </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">14.6% </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">15.5% </td></tr><tr><td height="17" width="187" align="left">Hamilton Sundstrand</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 1,400 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 1,532 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 247 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 286 </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">17.6% </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">18.7% </td></tr><tr><td height="17" width="187" align="left">Sikorsky</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 1,648 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 1,438 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 157 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 133 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75">9.5% </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75">9.2% </td></tr><tr><td height="25" width="187" align="left">Total segments</td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="25" style="border-top: 1px solid #000000;" align="right" width="61"> 13,431 </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="25" style="border-top: 1px solid #000000;" align="right" width="61"> 15,177 </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="25" style="border-top: 1px solid #000000;" align="right" width="61"> 1,942 </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="25" style="border-top: 1px solid #000000;" align="right" width="61"> 2,172 </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;" align="right" width="75">14.5% </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;" align="right" width="75">14.3% </td></tr><tr><td height="17" width="187" align="left">Eliminations and other</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> (56)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> (92)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> (98)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> (33)</td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> </td></tr><tr><td height="17" width="187" align="left">General corporate expenses</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> (73)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> (90)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> </td></tr><tr><td height="25" width="187" align="left">Consolidated</td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="25" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 13,375 </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="25" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 15,085 </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="25" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 1,771 </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="25" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 2,049 </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75">13.2% </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75">13.6% </td></tr><tr><td height="18" width="187" align="left"> </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="14"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="61"> </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="14"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="61"> </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="14"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="61"> </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="14"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="61"> </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="75"> </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 3px double #000000;" align="left" width="75"> </td></tr><tr><td height="17" width="187" align="left"><b>Nine Months Ended September 30,</b></td><td height="17" width="19" align="left"><b> </b></td><td width="169" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>Revenues</b></td><td height="17" width="19" align="left"><b> </b></td><td width="169" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="17"><b>Operating Profits</b></td><td height="17" width="19" align="left"><b> </b></td><td width="169" align="center" colspan="3" style="border-bottom: 1px solid #000000;" height="17"><b>Operating Profit Margins</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="187"><b>(in millions of dollars)</b></td><td height="17" width="19" align="left"><b></b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td><td height="17" width="19" align="left"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td width="75" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td><td height="17" width="19" align="left"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="187">Otis</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 8,579 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 9,706 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 1,770 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 1,899 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75">20.6% </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75">19.6% </td></tr><tr><td height="17" width="187" align="left">Carrier</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 8,594 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 11,682 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 594 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 1,156 </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">6.9% </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">9.9% </td></tr><tr><td height="17" width="187" align="left">UTC Fire & Security</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 3,999 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 4,960 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 297 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 395 </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">7.4% </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">8.0% </td></tr><tr><td height="17" width="187" align="left">Pratt & Whitney</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 9,322 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 10,454 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 1,347 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 1,602 </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">14.4% </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">15.3% </td></tr><tr><td height="17" width="187" align="left">Hamilton Sundstrand</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 4,183 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 4,643 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 626 </td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> 795 </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">15.0% </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right">17.1% </td></tr><tr><td height="17" width="187" align="left">Sikorsky</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 4,371 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 3,768 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 406 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> 326 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75">9.3% </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75">8.7% </td></tr><tr><td height="17" width="187" align="left">Total segments</td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 39,048 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 45,213 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 5,040 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="61"> 6,173 </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75">12.9% </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75">13.7% </td></tr><tr><td height="17" width="187" align="left">Eliminations and other</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> (228)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> (226)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> (142)</td><td height="17" width="19" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="61" align="right"> (55)</td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> </td></tr><tr><td height="17" width="187" align="left">General corporate expenses</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> - </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> (240)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="61"> (296)</td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> </td></tr><tr><td height="18" width="187" align="left">Consolidated</td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 38,820 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 44,987 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 4,658 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="left" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="61"> 5,822 </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75">12.0% </td><td height="18" width="19" align="left"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;" align="right" width="75">12.9% </td></tr></table><p>See Note 7 to the Condensed Consolidated Financial Statements for a discussion of restructuring charges included in segment operating results. <br /></p></div>
<div style="font-size:12pt"><p>Note 14: Accounting Pronouncements<br /><br />In December 2008, the FASB issued additional guidance, which resides under the Compensation – Retirement Benefits Topic of the FASB ASC, on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan on investment policies and strategies, major categories of plan assets, inputs and valuation techniques used to measure the fair value of plan assets and significant concentrations of risk within plan assets. This guidance will be effective for fiscal years ending after December 15, 2009, with earlier application permitted. Upon initial application, the provisions of this guidance are not required for earlier periods that are presented for comparative purposes. We are currently evaluating the disclosure requirements of this guidance and anticipate that it will not have a significant impact on the reporting of our results of operations.<br /><br />In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140” (SFAS 166). As of September 30, 2009, SFAS 166 has not been incorporated within the FASB ASC. SFAS 166 removes the concept of a qualifying special-purpose entity and establishes a new “participating interest” definition that must be met for transfers of portions of financial assets to be eligible for sale accounting, clarifies and amends the derecognition criteria for a transfer to be accounted for as a sale, and changes the amount that can be recognized as a gain or loss on a transfer accounted for as a sale when beneficial interests are received by the transferor. Enhanced disclosures are also required to provide information about transfers of financial assets and a transferor’s continuing involvement with transferred financial assets. This statement must be applied as of the beginning of an entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. We are currently evaluating this new statement.<br /><br />In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (SFAS 167). As of September 30, 2009, SFAS 167 has not been incorporated within the FASB ASC. SFAS 167 amends previous accounting related to the Consolidation of Variable Interest Entities to require an enterprise to qualitatively assess the determination of the primary beneficiary of a variable interest entity (VIE) based on whether the entity (1) has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) has the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. Also, SFAS 167 requires an ongoing reconsideration of the primary beneficiary, and amends the events that trigger a reassessment of whether an entity is a VIE. Enhanced disclosures are also required to provide information about an enterprise’s involvement in a VIE. This statement will be effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. We are currently evaluating this new statement.<br /><br />In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05, “Measuring Liabilities at Fair Value.” This ASU clarifies the application of certain valuation techniques in circumstances in which a quoted price in an active market for the identical liability is not available and clarifies that when estimating the fair value of a liability, the fair value is not adjusted to reflect the impact of contractual restrictions that prevent its transfer. The guidance provided in this ASU becomes effective for us on October 1, 2009. We have evaluated this ASU and have determined there are no significant impacts to our financial position or results of operations. <br /><br />In September 2009, the FASB issued ASU No. 2009-12, “Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent).” This ASU provides amendments for the fair value measurement of investments to create a practical expedient to measure the fair value of an investment in certain entities on the basis of the net asset value per share of the investment (or its equivalent) determined as of the reporting entity’s measurement date. Therefore, certain attributes of the investment (such as restrictions on redemption) and transaction prices from principal-to-principal or brokered transactions will not be considered in measuring the fair value of the investment if the practical expedient is used. The amendment in this ASU also requires disclosures by major category of investment about the attributes of those investments, such as the nature of any restrictions on the investor’s ability to redeem its investments at measurement date, any unfunded commitments, and the investment strategies of the investees. The amendments in this ASU are effective for interim and annual periods ending after December 15, 2009. Early application is permitted. We are currently evaluating this new ASU and anticipate that it will not have a significant impact on our financial position or results of operations.<br /><br />In October 2009, the FASB issued ASU No. 2009-13, “Multiple-Deliverable Revenue Arrangements.” This ASU establishes the accounting and reporting guidance for arrangements including multiple revenue-generating activities. This ASU provides amendments to the criteria for separating deliverables, measuring and allocating arrangement consideration to one or more units of accounting. The amendments in this ASU also establish a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about the nature and terms, significant deliverables, and its performance within arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the application of the relative selling-price method affects the timing or amount of revenue recognition. The amendments in this ASU are effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. Early application is permitted. We are currently evaluating this new ASU.<br /><br />In October 2009, the FASB issued ASU No. 2009-14, “Certain Revenue Arrangements That Include Software Elements.” This ASU changes the accounting model for revenue arrangements that include both tangible products and software elements that are “essential to the functionality,” and scopes these products out of current software revenue guidance. The new guidance will include factors to help companies determine what software elements are considered “essential to the functionality.” The amendments will now subject software-enabled products to other revenue guidance and disclosure requirements, such as guidance surrounding revenue arrangements with multiple-deliverables. The amendments in this ASU are effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. Early application is permitted. We are currently evaluating this new ASU.<br /></p></div>