Summary
L3Harris Technologies (formerly Harris Corporation) announced the completion of the spin-off of its stake in Harris Stratex Networks, Inc. (HSTX) to its shareholders. Effective at the start of trading on May 27, 2009, Harris shareholders of record as of May 13, 2009, received approximately 0.248418 shares of HSTX Class A common stock for each share of Harris common stock held. This distribution, representing 55.8% of HSTX's outstanding shares, was valued at approximately $173 million based on HSTX's closing price on May 26, 2009. Following this transaction, Harris no longer holds an equity interest in HSTX, and HSTX's financial results will be reported under 'Discontinued operations.' The spin-off is structured as a taxable event for Harris shareholders. The company anticipates recording significant charges in its fiscal 2009 fourth quarter related to this transaction, including a write-down of net assets, transaction costs, deferred tax asset write-offs, and non-cash share-based compensation adjustments.
Key Highlights
- 1Harris Corporation completed the spin-off of its 55.8% ownership in Harris Stratex Networks, Inc. (HSTX) to its shareholders on May 27, 2009.
- 2Shareholders received 0.248418 shares of HSTX Class A common stock for each share of Harris common stock held as of the record date of May 13, 2009.
- 3The distributed HSTX shares had an approximate market value of $173 million as of May 26, 2009.
- 4The spin-off is treated as a taxable distribution for U.S. Federal income tax purposes for Harris shareholders.
- 5Harris will no longer consolidate HSTX's financial results; HSTX will be reported as 'Discontinued operations'.
- 6Harris expects to record approximately $45.3 million in charges for the write-down of HSTX net assets, plus additional costs related to the spin-off.
- 7Pro forma financial statements reflecting the impact of the spin-off are filed as exhibits.