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SLIDE 1

~~ United

V Technologies

PROCURING LEGAL SERVICES

Paul Beach Associate General Counsel August 9, 2008

UTe LEGAL

275 Attorneys

in

20 countries GLOBAL OUTSIDE COUNSEL SPEND

By business unit

30% 12007 Total = $139M I 24%

24% 24%

20% 10% 9% 5% 6% 0%

1% 1%

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V Technologies

220,000 employees

$60+B revenue

Operations in 180+ countries~

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GLOBAL OUTSIDE LEGAL SPEND % revenue

$150 0.35% $125 0.30% $100 0.25% 0.20% $75 0.15% $50 0.10%

$25 0.05%

$0 0.00%

2000 2001 2002 2003 2004 2005 2006 2007

GLOBAL OUTSIDE COUNSEL SPEND

2007 by area of law

$90 $75 $60

~

~ $45

~

$30 $15 $0

U.S. Non-U.S.

Lit IP . Lit Non-IP M GenerailP General Non-IP a M&A 1

SLIDE 2

LEGAL SERVICES INITIATIVE (circa 1999)

Cost Reduction Tools

PREFERRED COUNSEL PROGRAM Consolidation

900 750 730

us

. Non-U,S. ~Total

Convergence Volume Discounts

600

m

Engagement Guidelines

450 410

Preferred Support

Vendors

300 150

Compliance via E- Invoicing 2000 2001 2002 2003 2004 2005 2006 2007

PREFERRED COUNSEL PROGRAM

CON

CENTRA TION

233 firms approved for new work

Firms accounting for 75% of global spend

500

100

421 410

78

400

80 62

300

60 53

200

42 37 40 34 32

100

20

2005 2006 2007 . Preferred . Recommended m No new matters Unapproved

1999 2000 2001 2002 2003 2004 2005

PREFERRED COUNSEL

• 109 Worldwide

PREFERRED COUNSEL SPEND

% of Total Counsel Spend

100% 90%

BO

70''- 60'- 50% 41% 40% 30''- 20''- 10''- 0''-

2000 2001

8B%

Europe

18 2002 2003 2004 2005 2006 2007

2

SLIDE 3

ENTERPRISE LEGAL

2003 v. 2007

2003 2007

% Revenues $31 B

$54.8 B

77%

Employees

203,300 225,600

11%

Attorneys

182 242 33%

Attorneys J SB revenue

5.9 4.4 (25%)

Total outside legal spend

$65 M $139 M 113%

IP (Lit & Non-Lit)

$9 M $43 M

377%

Non IP Spend

$56 M $96 M 71%

Outside legal spend as %

.22% .25% 19%

• f Revenues

LEGAL SERVICES INITIATIVE Current Approach

Price Cost Year 1 Year 2 Year 3 Year 4 Year 5

ALTERNATIVE FEES

Goals Incentivize Effciency Predictability

Strengthen Partnering

Focus on Process

Knowledge Management

• Continuous Process Improvement

LEGAL SERVICES INITIATIVE Limit of the Initial Approach

310 290 270

ii 250

::

~ 230

;; 210

L Margin

¡Gapf

190 170 150 Year 1

Year 2 Year 5

Year 3 Year 4

LEGAL SERVICES INITIATIVE

Cost Reduction Tools

Initially.. .

Convergence

Now...

. Intensify Management of Top Spend Mailers

. Leverage Spend

Consolidation Through Alternative Fee Arrangements Volume Discounts

Engagement Guidelines Preferred Support

Vendors

. Establish Best Practices . Productivity Metrics

Compliance via E- Invoicing

ALTERNATIVE FEES

Types

Contingency fees Partial contingency - "Success Fee" Flat fees Fixed fees with bands Retainer for 7/24 access to simple advice ACES ™ (considering)

Discounted/Blended Hourly Rates are not Alternative Fees

3

SLIDE 4

ALTERNATIVE FEES Global Spend

2006 2007

2008 PRIORITIES

Attack the U.S. spend

seek to move aiay from high-cost firms better cost management of high-cost matters more aggressive early ADR

Affirmative litigation on partial/full contingency Restructure Preferred Counsel agreements

mandate alternative fees hourly rate freeze mandate ACE/Six Sigma process improvements

Does economic downturn offer opportunities for retainers?

ALTERNATIVE FEES

Allocation

2006

4