Combination will create a premier systems provider with advanced technologies to address rapidly growing segments of aerospace and defense.

WALTHAM, Mass. and FARMINGTON, Conn.– Raytheon Company (NYSE: RTN) and United Technologies Corp. (NYSE: UTX) have entered into an agreement to combine in an all-stock merger of equals.  The transaction will create a premier systems provider with advanced technologies to address rapidly growing segments within aerospace and defense. The merger of Raytheon, a leading defense company, and United Technologies, a leading aerospace company, comprised of Collins Aerospace and Pratt & Whitney, will offer a complementary portfolio of platform-agnostic aerospace and defense technologies. The combined company, which will be named Raytheon Technologies Corporation, will offer expanded technology and R&D capabilities to deliver innovative and cost-effective solutions aligned with customer priorities and the national defense strategies of the U.S. and its allies and friends. The combination excludes Otis and Carrier, which are expected to be separated from United Technologies in the first half of 2020 as previously announced.

The combined company will have approximately $74 billion in pro forma 2019 sales. With a strong balance sheet and robust cash generation, Raytheon Technologies will enjoy enhanced resources and financial flexibility to support significant R&D and capital investment through business cycles.

Under the terms of the agreement, which was unanimously approved by the Boards of Directors of both companies, Raytheon shareowners will receive 2.3348 shares in the combined company for each Raytheon share. Upon completion of the merger, United Technologies shareowners will own approximately 57 percent and Raytheon shareowners will own approximately 43 percent of the combined company on a fully diluted basis. The merger is expected to close in the first half of 2020, following completion by United Technologies of the previously announced separation of its Otis and Carrier businesses. The timing of the separation of Otis and Carrier is not expected to be affected by the proposed merger and remains on track for completion in the first half of 2020. The merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

“Today is an exciting and transformational day for our companies, and one that brings with it tremendous opportunity for our future success. Raytheon Technologies will continue a legacy of innovation with an expanded aerospace and defense portfolio supported by the world’s most dedicated workforce,” said Tom Kennedy, Raytheon Chairman and CEO. “With our enhanced capabilities, we will deliver value to our customers by anticipating and addressing their most complex challenges, while delivering significant value to shareowners.”

“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” said Greg Hayes, United Technologies Chairman and CEO. “Our two companies have iconic brands that share a long history of innovation, customer focus and proven execution. By joining forces, we will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through business cycles and address our customers’ highest priorities. Merging our portfolios will also deliver cost and revenue synergies that will create long-term value for our customers and shareowners.”

Combination to Create Long-Term Value

• Balanced and diversified aerospace and defense portfolio that is resilient across business cycles: The merger establishes a broad and complementary portfolio of platform-agnostic capabilities across the high-growth segments of aerospace and defense, reducing risk of concentration in any individual platform or program.

• Highly complementary technology and R&D platform: With a combined annual company and customer funded R&D spend of approximately $8 billion, seven technology Centers of Excellence, and over 60,000 engineers, the company will develop new, critical technologies faster and more efficiently than ever before. Areas of joint advancement include, but are not limited to: hypersonics and future missile systems; directed energy weapons; intelligence, surveillance, and reconnaissance (ISR) in contested environments; cyber protection for connected aircraft; next generation connected airspace; and advanced analytics and artificial intelligence for commercial aviation.

• Attractive financial profile with strong cash flow generation and balance sheet: Robust free cash flow growth and a strong balance sheet will support continued investment and return of capital to shareowners. The combined company expects to return $18 to $20 billion of capital to shareowners in the first 36 months following completion of the merger. As a result of the combination, the company also expects to capture more than $1 billion in gross annual run-rate cost synergies by year four post-close, with approximately $500 million in annual savings returned to customers. In addition, the combination presents significant long-term revenue opportunities from technology synergies.

• Complementary company culture: The combined company will have a strong performance-based culture focused on integrity, collaboration, innovation, diversity and corporate social responsibility. Employees will have expanded opportunities for career development and advancement in high-growth areas, as well as ongoing engagement in local communities.

Pro Forma Business Structure

Raytheon plans to consolidate its four businesses into two businesses to be named Intelligence, Space & Airborne Systems and Integrated Defense & Missile Systems. The new businesses will join Collins Aerospace and Pratt & Whitney to form the four businesses of Raytheon Technologies.

Pro Forma Capital Structure

Net debt for the combined company at the time of closing is expected to be approximately $26 billion, with United Technologies expected to contribute approximately $24 billion. The combined company targets an ‘A’ category credit rating at the time of the closing.

Leadership and Governance

The combined company’s Board of Directors will be comprised of 15 members, consisting of 8 directors from United Technologies and 7 from Raytheon, with the lead director from Raytheon. Tom Kennedy will be appointed Executive Chairman and Greg Hayes will be named CEO of Raytheon Technologies. Two years following the close of the transaction, Hayes will assume the role of Chairman and CEO.

Raytheon Technologies will be headquartered in the greater Boston metro area, and will retain a corporate presence in existing locations. The company will be led by a highly experienced, proven leadership team with a strong track record of innovation, delivering on synergies, and meeting financial and customer commitments.

Timing and Closing

The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals, the approval of Raytheon and United Technologies shareowners, as well as completion by United Technologies of the separation of its Otis and Carrier businesses.  As previously mentioned, the transaction is expected to close in the first half of 2020.

2019 Financial Outlook 

There is no change to either Raytheon’s or United Technologies’ financial outlook for 2019.

Advisors

Citigroup Global Markets Inc. is acting as financial advisor to Raytheon, and RBC Capital Markets LLC provided a fairness opinion. Shearman & Sterling LLP is serving as legal advisor to Raytheon. Morgan Stanley & Co. LLC, Evercore, and Goldman Sachs & Co. LLC are acting as financial advisors to United Technologies. Wachtell, Lipton, Rosen & Katz is serving as legal advisor to United Technologies.

Conference Call

A conference call to discuss the merger will be held Monday, June 10, 2019 at 8:00 a.m. EDT. Participants will include Tom Kennedy, Chairman and CEO of Raytheon; Greg Hayes, Chairman and CEO of United Technologies; Toby O’Brien, vice president and Chief Financial Officer of Raytheon; and Akhil Johri, executive vice president and Chief Financial Officer of United Technologies.

The dial-in number for the conference call will be (877) 280-7280. The conference call will also be audiocast online at www.raytheon.com/ir and www.utc.com. Individuals may listen to the call and download charts that will be used during the call. These charts will be available prior to the call. Interested parties are encouraged to check the website ahead of time to ensure their computers are configured for the audio stream.

Transaction Website

Additional information on the merger and related materials can be found on a joint transaction website at www.futureofaerospacedefense.com.

Cadence at Carino Commons Community – NWC of Arizona Avenue and Queen Creek Road

Phoenix, Arizona — A 7.49-acre land parcel at the northwest corner of Arizona Avenue and Queen Creek Road in Chandler has been sold for $3,257,134.  The buyer, HSH-Chandler Owner AZ LLC plans to develop a full-service senior housing project on the land.

“This transaction has been three years in the making,” says Tim Dulany, senior vice president with Colliers International in Arizona.  “All neighboring property owners and parties to the deal worked tirelessly and creatively to formulate a project design that would satisfy everyone’s goals and requirements.  The resulting senior housing community will be a wonderful asset to serve the property type demand for the area and has been enthusiastically embraced by the City of Chandler.”

Dulany represented HSH-Chandler Owner AZ LLC (a partnership of Cadence Senior Housing and Global Senior Housing) in the land purchase.  Larry Ortega, executive vice president of Colliers International in Arizona represented the land seller, Carino Commons Investors LLC.  Dulany has more than 25 years of healthcare and senior housing real estate experience representing developers and operators to buy, sell, and or develop senior housing projects throughout the western US.

Global Senior Housing, a San Diego-based developer of senior housing properties, will build Cadence at Carino Commons on the site.  Scottsdale-based Cadence Living will then handle management and operations of the senior community.  Cadence is recognized for its SYMPHONY program, which offers a holistic approach to community engagement involving all aspects of life: physical, intellectual, emotional, social and spiritual.

Cadence at Carino Commons will be a three-story project consisting of approximately 206,283 square feet of space.  The proposed 191 units will include independent living, assisted living and memory care residences.  The unit mix will include 26 Memory Care units, 18 Studios, 99 one-bedroom and 48 two-bedroom units.  The developer has a proposed ground-breaking of the project in September 2019, with completion slated for 2^nd quarter of 2021. 

Global Senior Housing was founded in 2013 by Ron and Nick Walsh.  Having understood the demographic trends and need to satisfy growing demand for senior housing, the duo combined their expertise in real estate and finance to develop projects in the sector.  The company forms strategic joint ventures with exceptional operators to manage the marketing, lease-up and operations of their communities. In addition to the Chandler property, Global Senior housing is currently working on senior communities in Idaho, Washington and Texas.

Cadence Senior Living owns and operates senior communities throughout Arizona, Colorado, Tennessee and Georgia.  Leadership of Cadence provides seasoned expertise in real estate, senior housing development and senior housing management. Cadence is recognized for its devoted approach to health, wellness and creating vibrant communities that offer residence exceptional lifestyles. This will be Cadence’s fourth community in the Greater Phoenix area, joining properties in Glendale, Mesa and Scottsdale.

Pima County, in partnership with local lending and housing agencies, joins U.S. Department of Housing and Urban Development (HUD) in recognizing June as National Home Ownership Month. With that in mind, homeowners and first-time homebuyers can meet housing experts and find a trove of information about buying and keeping an affordable, sustainable, quality home at the Pima County Housing Center’s 2019 Home Ownership Fair on Saturday, June 8 from 9 a.m. to 1 p.m. at the Tucson Association of Realtors, 2445 N. Tucson Blvd.

The event’s title sponsor is Pima Federal Credit Union, with additional support from TAR, the Community Investment Corporation, Family Housing Resources, Wells Fargo Bank, BBVA Compass Bank and other local partners.The theme is “The Power of Home Ownership.”

The event will offer workshops on budgeting, credit repair and down payment assistance; resources for current homeowners and new homebuyers and a chance to meet with HUD-certified counselors, credit experts, realty professionals, mortgage lenders and representatives for non-profit housing agencies. Visitors also can get do-it-yourself advice and energy saving tips from Lowe’s Home Improvement and Tucson Electric Power experts.

The day won’t be all facts and figures — kids can meet The Pima County Sheriff’s Auxiliary Volunteers’ McGruff the Crime Dog and Pete the Beak from Tucson Water. Parents may enter a drawing for prizes.

Refreshments will be available. Admission and parking are free.