UPDATE 3-United Technologies to take $870 mln charge in 4th qtr

Wed Jan 6, 2016 12:47pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Agreement buys out royalty deals with Canada

* To make four payments annually to Canadian government

* Total payment, including accrued amounts, $965 mln

* Shares down nearly 2 pct in afternoon trading (Adds details about agreement, analyst downgrade; updates share price)

By Ankit Ajmera

Jan 6 (Reuters) - United Technologies Corp said on Wednesday it would take a pretax charge of about $870 million in the fourth quarter to buy out some royalty payments to Canada.

The surprise announcement came a month after the diversified manufacturer of Pratt & Whitney engines and Otis elevators updated its investor outlook. Shares were down 1.8 percent at $93.97 in early afternoon trading.

Agreements signed on Dec. 30 buy out royalty payments UTC was required to make in anticipation of future aircraft engine sales, UTC said. The payments to Canada's federal government and Quebec's provincial government were in exchange for research and development funds.

Pratt & Whitney Canada makes turbofan, turboprop and turboshaft engines for business jets, other small aircraft and helicopters.   Continued...