Performance and balance are why our results are  consistently favorable to peers and to market averages.” “ Dear Shareowner: UTC turned in rock solid performance in challenging economic conditions in 2002. Earnings per share grew 15 percent to $4.42. Free cash flow, at $2.3 billion, slightly exceeded net income, our traditional and unusually high standard. We made acquisitions in  the year totaling $424 million and repurchased UTC common shares for $700 million. We strengthened our pension plans with contributions totaling $753 million. With these outflows, we still ended the year with a debt-to-capital ratio unchanged from last year. We increased the dividend 9 percent, as usual at a five-quarter interval. Cash flow is a strong UTC attribute. Over the last five years it has exceeded $10 billion and funded $8 billion in acquisitions, more than $3 billion in share repurchase, and $2 billion  in dividends. We like the ability to evolve UTC’s portfolio through acquisitions and have  seen Hamilton Sundstrand’s percentage of total UTC sales double over the past decade and Carrier’s increase by half. The fuel for our engine has been productivity and cost reduction, moving operating income margins from 6 percent in 1993 to 14 percent in 2002. This record is unmatched within our  population of peer companies and by few other companies of comparable size worldwide. Established UTC disciplines and methodologies have done this and we see potential for lots more. UTC's total shareholder return was minus 3 percent in 2002 on equity markets worldwide in decline. While marginally negative, we were 12 percentage points favorable to the Dow Jones Industrials (down 15 percent) and 19 points favorable to the S&P 500 (down 22 percent). Longer term, we have decisively outperformed these averages with UTC’s cumulative return over the decade at 471 percent as compared with the Dow Industrials at 196 percent and the S&P 500 at 137 percent. 2002 year in review 1