8-KOther Events

RTX Corp 8-K Report, Corporate Update (Nov 12, 2015)

Filed November 12, 2015For Securities:RTX

Summary

United Technologies Corporation (now RTX Corp) announced on November 12, 2015, the execution of accelerated share repurchase (ASR) agreements totaling $6 billion. This significant buyback program is a key component of the company's previously stated intention to repurchase approximately $10 billion in stock during 2015. The ASRs are being funded by the $6 billion in net proceeds recently received from the sale of the Sikorsky division, demonstrating a strategic deployment of capital to return value to shareholders. The ASR agreements are structured with initial share deliveries occurring on November 16, 2015, with final settlement expected by the third quarter of 2016. The exact number of shares repurchased will be determined by the average daily volume-weighted average prices during the ASR tranches, subject to a discount and potential adjustments. This move signals strong confidence from management in the company's financial position and future prospects, and aims to enhance shareholder value through a substantial reduction in outstanding shares.

Key Highlights

  • 1Execution of $6 billion in Accelerated Share Repurchase (ASR) agreements.
  • 2ASR program is part of the company's larger $10 billion share repurchase target for 2015.
  • 3Funding for the ASR comes from the $6 billion in net proceeds from the recently completed Sikorsky sale.
  • 4Agreements entered into with Deutsche Bank AG and JPMorgan Chase Bank.
  • 5Initial share delivery is expected on November 16, 2015.
  • 6Final settlement of all ASR transactions is anticipated by the third quarter of 2016.
  • 7The buyback program is within the existing Board of Directors' authorization for stock purchases.

Frequently Asked Questions

The primary purpose of these ASR agreements is to significantly reduce the number of outstanding shares of common stock, thereby aiming to enhance shareholder value. This is a major step towards fulfilling the company's previously announced $10 billion share repurchase target for 2015.

The $6 billion used for these ASR agreements is being funded by the net proceeds received from the sale of the Sikorsky division, which was completed on November 6, 2015. This indicates a strategic reallocation of capital.

The final number of shares repurchased will be determined at settlement dates, which are expected to occur no later than the third quarter of 2016. The exact number depends on the average daily volume-weighted average prices of the company's common stock during the term of each ASR tranche, subject to a discount and potential adjustments.

No, this $6 billion ASR program is part of the company's previously announced share repurchase target of approximately $10 billion for 2015 and falls within the remaining amount authorized by the Board of Directors for the purchase of up to $12 billion of the company's common stock.