SOUTH WINDSOR, Conn. and TOKYO, Sept. 19, 2000 — International Fuel Cells, a unit of United Technologies Corp., and Toshiba Corp. plan to form a joint venture to develop and market stationary fuel cell technology in Japan.

The joint venture will incorporate Toshiba’s fuel cell development activities in Japan and focus on accelerating development of Proton Exchange Membrane (PEM) fuel cell technologies and on increasing sales of the PC25 fuel cell power system.

“This joint venture will combine our research efforts, eliminate duplication and accelerate the development of PEM fuel cell technology,” said William Miller, IFC president. “The venture will also provide IFC with expanded access to the Japanese market for both residential and commercial fuel cell power plants.”

Toshiba has worked to develop fuel cell technology since 1978. This year, Toshiba manufactured 30 kilowatt and 1 kilowatt PEM fuel cell test plants.

IFC has been in the fuel cell business for more than 40 years. It has supplied fuel cells to NASA for every manned space flight since Apollo. It also developed the PC25 fuel cell power plant, a 200-kilowatt commercial power system. More than 200 PC25 systems have been delivered since 1991, achieving more than 3.5 million hours of operation.

IFC has been aggressively pursuing PEM technology for transportation, residential and stationary applications and is currently working with five automakers, including BMW and Hyundai, as well as the U.S. Department of Energy, on development and demonstration programs for automobiles.

Under the terms of the memorandum of understanding signed among Toshiba, IFC and UTC, Toshiba would transfer all its current fuel cell operations into the joint venture. It would also conduct all business regarding fuel cells for stationary and portable power applications through the joint venture.

Toshiba will hold a 51 percent stake in the venture; IFC will hold the remaining 49 percent stake. The joint venture will focus on development and sales of commercial and residential fuel cells in Japan and will employ some 100 workers, mainly engineers.

The new venture does not affect the current ownership structure of IFC. UTC and Toshiba remain 88 percent and 12 percent owners in IFC, respectively.

Toshiba began selling the PC25 power plant in 1996 and currently operates 41 PC25 plants.

Fuel cells generate electric power by combining hydrogen — or hydrogen from fuels such as methanol, natural gas or petroleum — with oxygen. Since the fuel is converted directly to electricity, a fuel cell can operate at much higher efficiencies than internal combustion engines, extracting more electricity from the same amount of fuel. The fuel cell itself has no moving parts, making it a quiet and reliable source of power.

International Fuel Cells, a unit of United Technologies Corp., is the world leader in fuel cell production and development for commercial, transportation, residential and space applications.