Summary
On March 10, 2009, United Technologies Corporation (UTC) announced significant restructuring actions and revised financial expectations for 2009, reflecting the challenging economic environment. The company plans additional restructuring of $600 million, bringing the total for 2009 to $750 million (excluding certain accounting impacts). This is expected to result in approximately 11,600 global job reductions, primarily from overhead and administrative functions.
Key Highlights
- 1Additional $600 million in restructuring actions planned for 2009, bringing total to $750 million.
- 2Anticipated global employment reduction of approximately 11,600 positions.
- 3Revised 2009 revenue expectation lowered to approximately $55 billion.
- 4Share repurchase program for 2009 reduced from $2 billion to $1 billion.
- 5Company-funded research and development spending expected to decrease by approximately $100 million from 2008 levels.
- 6First-time adoption of FASB EITF Issue No. 07-1 is expected to provide a $1 billion benefit to 2009 revenues.
Frequently Asked Questions
UTC is undertaking these significant restructuring actions due to the increasingly tough global economic environment and its impact on demand across its various market segments.
The company expects to incur $750 million in total restructuring actions for 2009, which will lead to a reduction of approximately 11,600 jobs. While these actions are intended to improve efficiency, the company has also lowered its 2009 revenue outlook to $55 billion.
The company has halved its expected share repurchases for 2009 from $2 billion to $1 billion. This means less capital will be returned to shareholders through buybacks in 2009 compared to the initial plan.
The adoption of FASB Emerging Issues Task Force Issue No. 07-1 is expected to add approximately $1 billion to UTC's 2009 revenues, related to revenues associated with engine collaboration agreements.