Sikorsky is one of the world’s largest helicopter companies. Sikorsky manufactures military and commercial helicopters and also provides aftermarket helicopter and aircraft parts and services.
Major production programs at Sikorsky include the UH-60M Black Hawk medium-transport helicopters and HH-60M Medevac helicopters for the U.S. and foreign governments, the S-70 Black Hawk for foreign governments, the MH-60S for the U.S. Navy and the MH-60R helicopters for the U.S. and foreign navies, the S-70B Naval Hawk for foreign naval missions, and the S-76 and S-92 helicopters for commercial operations. In July 2012, the U.S. Government and Sikorsky signed a five-year multi-service contract for approximately 650 H-60 helicopters. Actual production quantities are determined year-by-year over the life of the program based on funding allocations set by Congress and the U.S. Department of Defense acquisition priorities, as well as the U.S. Foreign Military Sales program.
Sikorsky is also developing the CH-53K next generation heavy lift helicopter for the U.S. Marine Corps, the VH-92A helicopter for the U.S. Marine One transport mission, and the HH-60W combat rescue helicopter for the U.S. Air Force. Also, Sikorsky is developing the CH-148 derivative of the H-92 helicopter, a military variant of the S-92 helicopter, for the Canadian Government. The latter is being developed under a fixed-price contract that provides for the development and production of 28 helicopters, and a related support contract that provides for logistical support. Delivery of the final configuration aircraft, which was scheduled to begin in 2012, has not occurred due to a number of disputes between the Canadian Government and Sikorsky related to contractual requirements and contract performance.
On June 18, 2014, Sikorsky and the Canadian Government signed amendments to the CH-148 contracts. The amended contracts finalize the scope of the aircraft, change the governance of the program and establish a phased approach to the delivery of interim and final configuration helicopters starting in 2015. The amended contracts also extend the in-service support contract through approximately 2038. The contract value of the amended contracts is estimated to be approximately $6.4 billion. Revenues are subject to changes in underlying variables such as future flight hours as well as fluctuations in foreign currency exchange rates.
Sikorsky’s aftermarket business includes spare parts sales, mission equipment, overhaul and repair services, maintenance contracts and logistics support programs for helicopters and other aircraft. Sales are principally made to the U.S. and foreign governments, and commercial helicopter operators. Sikorsky also engages in logistics support programs and partners with its government and commercial customers to manage and provide logistics, maintenance and repair services.
Sales to the U.S. Government were 52 percent and 58 percent of total Sikorsky segment sales in 2014 and 2013, respectively. Sales generated by Sikorsky’s international operations, including U.S. export sales, were 48 percent and 30 percent of total Sikorsky segment sales in 2014 and 2013, respectively. At December 31, 2014, Sikorsky’s backlog was $15.8 billion, including $5.2 billion of U.S. Government-funded contracts and subcontracts. At December 31, 2013, these amounts were $14.9 billion and $5.4 billion, respectively. Of the total Sikorsky backlog at December 31, 2014, approximately $5.0 billion is expected to be realized as sales in 2015.
On March 11, 2015 United Technologies Corp. announced that its Board of Directors had authorized a review of strategic alternatives for the corporation's Sikorsky Aircraft business, including a potential tax-free spinoff. "Today, Sikorsky is a world leader in the design, manufacture and service of military and commercial helicopter platforms. It has unmatched technological capabilities, outstanding people and a strong backlog," added Hayes. "Looking to the future, we are evaluating whether Sikorsky's unique business as a rotorcraft OEM with a predominately military customer base is best positioned as a stand-alone company, and whether a separation would allow United Technologies to better focus on providing high-technology systems and services to the aerospace and building industries."
On June 15, 2015 United Technologies Corp. announced that it would pursue the separation of the Sikorsky Aircraft business from United Technologies, subject to final Board approval. This announcement followed a review of strategic alternatives for Sikorsky announced earlier in the year. A decision on whether Sikorsky would be spun off or sold was expected by the end of the third quarter.
"Our strategic review has confirmed that exiting the helicopter business is the best path forward for United Technologies," said Gregory Hayes, UTC President and Chief Executive Officer. "Sikorsky is the world's premier helicopter company and through a series of strategic wins is well positioned for long-term growth. However, separation of Sikorsky from the portfolio will allow both United Technologies and Sikorsky to better focus on their core businesses. Over the coming weeks, we'll determine whether a spinoff or direct sale is the best way to enhance Sikorsky's long-term success and create the most value for customers and shareholders."
Lockheed Martin announced on 20 June 2015 that it had entered into a definitive agreement to acquire Sikorsky Aircraft for $9.0 billion from United Technologies Corporation. The price would effectively reduced to approximately $7.1 billion, after taking into account tax benefits resulting from the transaction. The acquisition was expected to close by late fourth quarter 2015 or early first quarter 2016.
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