Atlas 5 Engine Maker Stays with UTC for Now
PARIS — GenCorp’sis under no obligation to purchase United Technologies Corp.’s 50 percent stake in the company that provides the main engine for the U.S. Atlas 5 rockets unless certain conditions are met, GenCorp said.
In a filing with the U.S. Securities and Exchange Commission (SEC), GenCorp said the July 2012 agreement with United Technologies Corp. (UTC) on the purchase of Pratt & Whitney Rocketdyne was amended last June, just after the U.S. government closed its review of the proposed $550 million purchase that created Aerojet Rocketdyne.
The June amendments included language that freed GenCorp from having to acquire Rocketdyne’s stake in RD Amross LLC, a joint venture with NPO Energomash of Khimki, Russia, the manufacturer of the RD-180 engine that powers the Atlas 5.
“There are a number of risks and uncertainties relating to the [RD Amross] acquisition,” GenCorp said in its SEC filing, dated Oct. 15, citing Russian government regulatory approval as one of the necessary conditions to the purchase. It raised the possibility that Russian regulators might refuse the transfer of UTC’s ownership to GenCorp.
GenCorp was able to reduce its purchase price for Pratt & Whitney Rocketdyne by $55 million to account for the fact that the RD Amross stake was not yet part of the deal. This and other reductions related to customer advances and near-term capital spending resulted in a final purchase price of $411.2 million, GenCorp said.
Rancho Cordova, Calif.-based GenCorp completed its Rocketdyne purchase June 14. In its SEC filing, GenCorp said Rocketdyne revenue between June 14 and Aug. 31, when GenCorp’s third quarter closed, totaled $136.8 million, with net income of $8.7 million.
The Rocketdyne contribution, along with higher sales of Standard Missile 3 Block 2A hardware and increased deliveries of Atlas 5 rocket elements to( ) of Centennial, Colo., drove a sharp increase in GenCorp revenue for the nine months ending Aug. 31. Revenue rose by 29 percent, to $897.8 million, compared with the same period a year ago.
ULA accounted for 14 percent of GenCorp’s revenue for the nine months ending Aug. 31 but 20 percent for the final three months of the period. NASA contracts, which for the nine-month period made up less than 10 percent of GenCorp’s business, contributed 12 percent of revenue for the three months ending Aug. 31.
GenCorp said its firm backlog of orders stood at $1.5 billion on Aug. 31, up from just over $1 billion a year ago. Rocketdyne’s business accounted for $564 million of the latest backlog.
GenCorp said it had spent some $30.4 million in connection with the Rocketdyne purchase and integrating Rocketdyne into the Aerojet operation, with more costs to come.