NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes information about equity awards outstanding that are vested and expected to vest and equity awards outstanding that are exercisable at December 31, 2011: EQUITY AWARDS VESTED AND EXPECTED TO VEST EQUITY AWARDS THAT ARE EXERCISABLE (shares in thousands, aggregate intrinsic value in millions) Awards Average Price* Aggregate Intrinsic Value Remaining Term** Awards Average Price* Aggregate Intrinsic Value Remaining Term** Stock Options/Stock Appreciation Rights 54,779 $59.01 $ 771 5.0 37,362 $55.03 $675 3.6 Performance Share Units/Restricted Stock 3,065 — 224 1.3 * weighted-average exercise price per share ** weighted-average contractual remaining term in years The fair value of each option award is estimated on the date of grant using a binomial lattice model. The following table indicates the assumptions used in estimating fair value for the years ended December 31, 2011, 2010 and 2009. Because lattice-based option models incorporate ranges of assumptions for inputs, those ranges are as follows: During 2011, we recorded net pre-tax restructuring costs totaling $336 million for new and ongoing restructuring actions. We recorded charges in the segments as follows: Expected volatilities are based on the returns of our stock, including implied volatilities from traded options on our stock for the binomial lattice model. We use historical data to estimate equity award exercise and employee termination behavior within the valuation model. Separate employee groups and equity award characteristics are considered separately for valuation purposes. The expected term represents an estimate of the period of time equity awards are expected to remain outstanding. The risk-free rate is based on the term structure of interest rates at the time of equity award grant. The net costs consist of $180 million recorded in cost of sales, $154 million in selling, general and administrative expenses and $2 million in other income, net. As described below, these charges primarily relate to actions initiated during 2011 and 2010. 2011 Actions. During 2011, we initiated restructuring actions relating to ongoing cost reduction efforts, including workforce reductions and consolidation of field operations. We recorded net pre-tax restructuring costs totaling $286 million for restructuring actions initiated in 2011, consisting of $136 million in cost of sales, $147 million in selling, general and administrative expenses and $3 million in other income, net. We expect the actions that were initiated in 2011 to result in net workforce reductions of approximately 5,000 hourly and salaried employees, the exiting of approximately 2 million net square feet of facilities and the disposal of assets associated with exited facilities. As of December 31, 2011, we have completed, with respect to the actions initiated in 2011, net workforce reductions of approximately 2,200 employees and 50,000 net square feet of facilities have been exited. We are targeting to complete in 2012 the majority of the remaining workforce and all facility related cost reduction actions initiated in 2011. No specific plans for significant other actions have been finalized at this time. 78 UNITED TECHNOLOGIES CORPORATION NOTE 12: RESTRUCTURING COSTS (Dollars in millions) Otis $ 73 Carrier 46 UTC Fire & Security 80 Pratt & Whitney 67 Hamilton Sundstrand 16 Sikorsky 53 Eliminations and other 1 Total $336 2011 2010 2009 Expected volatility 26% - 32% 24% - 28% 30% - 42% Weighted-average volatility 26% 25% 30% Expected term (in years) 7.5 - 8.0 7.4 - 7.9 7.4 - 7.9 Expected dividends 2.4% 2.7% 2.1% Risk-free rate 0.1% - 3.5% 0.1% - 4.0% 0% - 2.5%