Slide 1: 3Q 2021 Earnings Conference Call
3Q 2021 Earnings Conference Call October 26, 2021 © 2021 Raytheon Technologies All rights reserved
Slide 2: Forward-Looking Statements
Forward-Looking Statements Note: All results and expectations in the presentation reflect continuing operations unless otherwise noted. This webcast contains statements which, to the extent they are not statements of historical or present fact, constitute “forward-looking statements” under the secur
Slide 3: 3Q 2021 Highlights
3Q 2021 Highlights • Strong financial performance with EPS above Full Year Outlook expectations Sales ~$64.5B • Commercial aftermarket up 48% year-over-year Organic sales growth %1 ~1% • Repurchased $1B of RTX shares; $2B year-to-date • Announced acquisitions of FlightAware and SEAKR Adjusted EPS* $
Slide 4: 3Q 2021 EPS from Cont. Ops
3Q 2021 Sales EPS from Cash Flow Cont. Ops 10% organic1 growth* GAAP Adjusted* $16.2B $1.26 $1.9B ($0.4B) $14.7B $0.93 $1.5B $0.56 $0.10 2020 2021 3Q 2020 3Q 2021 3Q 2020 3Q 2021 Cash Flow From CapEx Free Cash 2020 2021 Cont. Operations Flow* Excludes: Acq. Accounting Adj. ($0.27) ($0.30) Restructur
Slide 5: Collins Aerospace Segment Highlights
Collins Aerospace Segment Highlights 3Q 2021 ($ millions) Reported Adjusted* YOY Var.* Sales 4,592 4,592 7% Operating Profit 478 480 558% ROS 10.4% 10.5% 880 bps • Organic sales* up 9% • Adjusted sales* up 7% Copa Airlines, the second-largest 737 aircraft operator in Latin America, selected Collins
Slide 6: Pratt & Whitney Segment Highlights
Pratt & Whitney Segment Highlights 3Q 2021 ($ millions) Reported Adjusted* YOY Var.* Sales 4,725 4,725 25% Operating Profit 187 189 NM ROS 4.0% 4.0% 510 bps • Organic sales* up 35% • Adjusted sales* up 25% – Commercial aftermarket up 56% – Commercial OEM up 22% – Military up 2% Photo: Spirit Airline
Slide 7: Raytheon Intelligence & Space Segment Highlights
Raytheon Intelligence & Space Segment Highlights 3Q 2021 ($ millions) Reported Adjusted* YOY Var.* Sales 3,740 3,740 0% Operating Profit 391 391 12% ROS 10.5% 10.5% 120 bps • Organic sales* down 1% • Adjusted sales* flat with prior year – Lower material inputs • Adjusted operating profit* up 12% – P
Slide 8: Raytheon Missiles & Defense Segment Highlights
Raytheon Missiles & Defense Segment Highlights 3Q 2021 ($ millions) Reported Adjusted* YOY Var.* Sales 3,902 3,902 7% Operating Profit 490 490 14% ROS 12.6% 12.6% 80 bps • Organic sales* up 5% • Adjusted sales* up 7% – Higher volume on NASAMS and AMRAAM • Adjusted operating profit* up 14% – Higher v
Slide 9: 2021 Outlook
2021 Outlook 3Q Actual Full Year Outlook Sales $16.2B ~$64.5B Prior: $64.4 - $65.4B Organic sales growth%1 10% ~1% Prior: 1% - 3% Adjusted EPS* $1.26 $4.10 - $4.20 Prior: $3.85 - $4.00 Free cash flow* $1.5B ~$5.0B Prior: $4.5 - $5.0B 1) Organic sales growth on an adjusted basis is a non-GAAP measure
Slide 10: 2022 Environment
2022 Environment Positives Monitoring Challenges Comm’l aero aftermarket International travel recovery Supply chain disruption Narrowbody deliveries Global tax environment 787 OE build rates Defense growth Inflation Cost reduction Vaccine mandate Financial flexibility 9
Slide 11: © 2021 Raytheon Technologies All rights reserved
© 2021 Raytheon Technologies All rights reserved
Slide 12: Appendix
a Appendix SZ Raytheon W anf Technologies
Slide 13: Use and Definitions of Non-GAAP Financial Measures
Use and Definitions of Non-GAAP Financial Measures Raytheon Technologies Corporation (“RTC”) reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). We supplement the reporting of our financial information determined under GAAP with ce
Slide 14: 3Q 2021 Quarterly Trends
3Q 2021 Quarterly Trends Sequential 3Q Commercial Pratt & Whitney Active YTD Book-to-Bill Ratio Aftermarket Growth Engines A320 V2500 A320 GTF 17% A220 87% 86% 86% 87% 88% 70% 68% 1.09 60% 1.02 59% 4% RIS RMD Collins Pratt & 1Q 2021 2Q 2021 3Q 2021 Whitney Active is defined as engines with flight ac
Slide 15: 2021 Segment Outlook
2021 Segment Outlook* ($ millions) 1 Adjusted Sales Adjusted Operating Full Year 1 VPY % Profit VPY Current down mid single $250 - $300 Collins Aerospace Prior down mid to low single $100 - $275 Current up mid single flat - $50 Pratt & Whitney Prior up low to mid single ($50) - $25 Raytheon Intellig
Slide 16: Additional 2021 Items
Additional 2021 Items Prior Current FY 2021 FY 2021 Adjusted Tax Rate* ~16% ~16% Interest Expense ~$1,400M ~$1,350M Corporate Expense and Other Unallocated Items ~$375M ~$325M FAS/CAS Operating Adjustment ~$1,675M ~$1,785M Non-Service Pension Benefit ~$1,925M ~$1,950M Capex Spending $2,400M - $2,500
Slide 17: P&W Engine Shipments to Customers
Raytheon Technologies: P&W Engine Shipments to Customers 2020 2021 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Military 48 72 59 62 241 44 61 58 Large Commercial1 211 92 114 129 546 137 144 165 Pratt & Whitney Canada2 466 393 379 412 1,650 396 467 475 1) Large commercial excludes industrial engine shipments 2) Excludes
Slide 18: Free Cash Flow Reconciliation
Raytheon Technologies: Free Cash Flow Reconciliation ($ millions) 3Q 2021 Net income attributable to common shareowners from continuing operations 1,473 Depreciation & amortization 1,158 Change in working capital 95 Other (794) Cash flow from operations 1,932 Capital expenditures (433) Free cash flo
Slide 19: 3Q 2021: Raytheon Technologies Sales Reconciliation
3Q 2021: Raytheon Technologies Sales Reconciliation Total Acquisitions Organic sales growth on an Reported Organic and Other1 adjusted pro forma basis Growth Divestitures Collins Aerospace 7% 9% (2%) - Total reported growth 10% Pratt & Whitney 35% 35% - - Acquisitions and Divestitures 1% RIS - (1%)
Slide 20: 3Q 2021: Raytheon Technologies Restructuring Costs
3Q 2021: Raytheon Technologies Restructuring Costs ($ millions) 2021 2020 Q3 YTD Restructuring impact to: Q1 2021 Q2 2021 Q3 2021 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Operating profit Collins Aerospace Systems (18) (12) (2) (32) (6) (151) (138) (65) (360) Pratt & Whitney (20) 16 (2) (6) - (1
Slide 21: 2020 Reported to Adjusted
Raytheon Technologies: 2020 Reported to Adjusted ($ millions) Restructuring & Significant non-recurring and non- Reported1 Adjusted2 (Unaudited) operational items 2 (Unaudited) Net Sales Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2020 F
Slide 22: 2021 Reported to Adjusted
Raytheon Technologies: 2021 Reported to Adjusted ($ millions) Restructuring & Significant non-recurring and Reported non-operational items 1 Adjusted1 (Unaudited) (Unaudited) Net Sales Q1 2021 Q2 2021 Q3 2021 Q3 YTD 2021 Q1 2021 Q2 2021 Q3 2021 Q3 YTD 2021 Q1 2021 Q2 2021 Q3 2021 Q3 YTD 2021 Collins
Slide 23: Reconciliation of GAAP to Adjusted: Collins Aerospace Systems
Raytheon Technologies: Reconciliation of GAAP to Adjusted Collins Aerospace Systems ($ millions) (Unaudited) (Unaudited) 2021 2020 Q1 2021 Q2 2021 Q3 2021 Q3 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Collins Aerospace Systems Net sales $ 4,370 $ 4,545 $ 4,592 $ 13,507 $ 6,438 $ 4,202 $ 4,274
Slide 24: Reconciliation of GAAP to Adjusted: Pratt & Whitney
Raytheon Technologies: Reconciliation of GAAP to Adjusted Pratt & Whitney ($ millions) (Unaudited) (Unaudited) 2021 2020 Q1 2021 Q2 2021 Q3 2021 Q3 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Pratt & Whitney Net sales $ 4,030 $ 4,280 $ 4,725 $ 13,035 $ 5,353 $ 3,487 $ 3,494 $ 4,465 $ 16,799 Sig
Slide 25: Reconciliation of GAAP to Adjusted: Raytheon Intelligence & Space
Raytheon Technologies: Reconciliation of GAAP to Adjusted Raytheon Intelligence & Space ($ millions) (Unaudited) (Unaudited) 2021 2020 1 Q1 2021 Q2 2021 Q3 2021 Q3 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Raytheon Intelligence & Space Net sales $ 3,765 $ 3,805 $ 3,740 $ 11,310 $ - $ 3,387 $
Slide 26: Reconciliation of GAAP to Adjusted: Raytheon Missiles & Defense
Raytheon Technologies: Reconciliation of GAAP to Adjusted Raytheon Missiles & Defense ($ millions) (Unaudited) (Unaudited) 2021 2020 1 Q1 2021 Q2 2021 Q3 2021 Q3 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Raytheon Missiles & Defense Net sales $ 3,793 $ 3,985 $ 3,902 $ 11,680 $ - $ 3,506 $ 3,70
Slide 27: Reconciliation of GAAP to Adjusted: Non-Segment Operating Profit
Raytheon Technologies: Reconciliation of GAAP to Adjusted Non-Segment Operating Profit ($ millions) (Unaudited) (Unaudited) 2021 2020 1 Q1 2021 Q2 2021 Q3 2021 Q3 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Eliminations and other Net sales $ (707) $ (735) $ (746) $ (2,188) $ (431) $ (521) $ (47
Slide 28: Reconciliation of GAAP to Adjusted: Consolidated Income, EPS
Raytheon Technologies: Reconciliation of GAAP to Adjusted Consolidated Income, Earnings Per Share ($ millions) 1: Refer to slides 22 - 26 for individual operating profit adjustments. 27
Slide 29: Adjusted Pro Forma Segment Data
Raytheon Technologies: Adjusted Pro Forma Segment Data ($ millions) 1: For additional information on how our pro forma information was prepared and for the non-GAAP reconciliation for Adjusted pro forma results, refer to the following slides. 2: For the non-GAAP reconciliation for the Adjusted Q1, Q
Slide 30: Pro Forma Segment Data: Sales
Raytheon Technologies: Pro Forma Segment Data Reconciliation of Pro Forma1 GAAP to Adjusted Pro Forma Sales ($ millions) 2020 Q1 Q2 Q3 Q4 FY Collins Aerospace Systems Net sales, Pro Forma $ 6,438 $ 4,202 $ 4,274 $ 4,374 $ 19,288 Significant unfavorable contract adjustments (22) (96) (4) (14) (136) A
Slide 31: Pro Forma Segment Data: Operating Profit
Raytheon Technologies: Pro Forma Segment Data Reconciliation of Pro Forma1 GAAP to Adjusted Pro Forma Operating Profit ($ millions) 2020 Q1 Q2 Q3 Q4 FY Collins Aerospace Systems Operating profit, Pro Forma $ 1,246 $ (317) $ 526 $ 11 $ 1,466 Restructuring (6) (151) (138) (65) (360) Significant unfavo
Slide 32: Pro Forma Consolidated Data
Raytheon Technologies: Pro Forma Consolidated Data Reconciliation of Pro Forma1 to Adjusted Pro Forma Income (loss) from continuing operations & EPS ($ millions) Q1 2020 PF Q2 2020 PF Q3 2020 Q4 2020 FY 2020 PF Net income (loss) from continuing operations attributable to common shareowners, Pro Form
Slide 33: Reconciliation of 2020 Adjusted to Adjusted Pro Forma Earnings
Raytheon Technologies: Reconciliation of 2020 Adjusted Earnings to 2020 Adjusted Pro forma Earnings ($ millions) 1 2 2020 Adjusted Earnings Pro Forma Adjustments 2020 Adjusted Pro Forma Earnings Net Sales Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2020 Q2 2020