Slide 1: 2Q 2020 Earnings Conference Call
2Q 2020 Earnings Conference Call July 28, 2020 © 2020 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 press release contains statements which, to the extent they are not statements of historical or present fact, constitute “forward-looking statements” under the
Slide 3: Current Environment
Current Environment Priorities 2Q 2020 Highlights • Focused on employees, customers and • Selected by the U.S. Air Force to develop the suppliers Long-Range Standoff Weapon (LRSO) • Merger integration and synergies on track • $2.3B booked for TPY-2 Radars for the Kingdom of Saudi Arabia • Strong liq
Slide 4: 2Q 2020 Sales, EPS and Cash Flow
2Q 2020 EPS from Sales Cash Flow Cont. Ops (attributable to common shareowners) Reported Adjusted* GAAP Adjusted* $14.1B $14.3B $0.40 $210M ($458M) Adjustments: ($2.34) Current economic environment, primarily ($248M) COVID-19; ($2.13) goodwill and intangibles impairment ($0.28) Acquisition accountin
Slide 5: 2Q 2020 Defense Quarterly Trends
2Q 2020 Defense Quarterly Trends RTX Defense RIS and RMD Collins and Pratt Backlog Book-to-Bill Military Sales Growth $73.1B 11% 1.22 1.20 10% 1.17 2Q 2020 RIS RMD Consolidated Collins Pratt RIS and Military Military RMD Record defense backlog of over $73B and strong consolidated RIS and RMD book-to
Slide 6: Collins Aerospace Segment Highlights
Collins Aerospace Segment Highlights 2Q 2020 ($ millions) Reported Adjusted* YOY Var.* Sales 4,202 4,298 (35)% Operating Profit (317) 24 (98)% ROS (7.5)% 0.6% • Organic sales* down 36% • Adjusted sales* down 35% – Commercial OEM down 53% – Commercial aftermarket down 48% – Military up 10% Collins Ae
Slide 7: Pratt & Whitney Segment Highlights
Pratt & Whitney Segment Highlights 2Q 2020 ($ millions) Reported Adjusted* YOY Var.* Sales 3,487 3,607 (30)% Operating Profit (457) (151) (133)% ROS (13.1)% (4.2)% • Organic sales* down 32% • Adjusted sales* down 30% – Commercial OEM down 42% – Commercial aftermarket down 51% – Military up 11% Photo
Slide 8: Raytheon Intelligence & Space Segment Highlights
Raytheon Intelligence & Space Segment Highlights 2Q 2020 ($ millions) Reported1 Sales 3,314 Operating Profit 311 ROS 9.4% • Bookings – $1.4B+ of classified bookings – $166M on the Global Aircrew Strategic Network Terminal (Global ASNT) program for the U.S. Air Force • Book-to-bill ratio 1.17 • Backl
Slide 9: Raytheon Missiles & Defense Segment Highlights
Raytheon Missiles & Defense Segment Highlights 2Q 2020 ($ millions) Reported1 Sales 3,590 Operating Profit 397 ROS 11.1% • Bookings – $2.3B for TPY-2 Radars for the Kingdom of Saudi Arabia – $299M for SM-3 for the Missile Defense Agency and an international customer • Selected by the U.S. Air Force
Slide 10: Current Environment
Current Environment Environment Actions $2B of Cost Initiatives • Record defense backlog $2B • Cost synergies & cost reduction actions 30% ~30% ~40% 2Q 3Q 4Q FY • Liquidity $4B of Cash Initiatives • Commercial air traffic ? $4B ~45% ? 25% ~30% • COVID-19 / macro economic environment 2Q 3Q 4Q FY Posi
Slide 11: 2020 Priorities
2020 Priorities • Support employees, customers and suppliers • Technology and product innovation • Execute integration and deliver synergies • Disciplined capital deployment and maintain strong liquidity • Maintain financial flexibility and structure the business for long-term success Proactively ma
Slide 12: © 2020 Raytheon Technologies All rights reserved
© 2020 Raytheon Technologies All rights reserved
Slide 13: Appendix
a Appendix SZ Raytheon 12 nk Technologies
Slide 14: Use and Definitions of Non-GAAP Financial Measures
Use and Definitions of Non-GAAP Financial Measures Raytheon Technologies Corporation’s (“RTC”) reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information determined under GAAP with
Slide 15: P&W Engine Shipments to Customers
Raytheon Technologies: P&W Engine Shipments to Customers 2019 2020 Q1 Q2 Q3 Q4 FY Q1 Q2 Military 39 58 53 65 215 48 72 Large commercial* 189 173 165 219 746 211 92 Pratt & Whitney 524 593 607 631 2,355 466 393 Canada** *Large commercial excludes industrial engine shipments. **Excludes APUs. 14
Slide 16: Free Cash Flow Reconciliation
Raytheon Technologies: Free Cash Flow Reconciliation ($ millions) 2Q 2020 Net loss attributable to common shareowners from continuing operations (3,820) Depreciation & amortization 1,111 Goodwill impairment 3,183 Change in working capital (334) Other 70 Cash flow from operations 210 Capital expendit
Slide 17: 2Q 2020 Sales Reconciliation
2Q 2020: Raytheon Technologies Sales Reconciliation Total Organic Acquisitions FX Growth - and Reported Divestitures Collins Aerospace (36%) (36%) - - Pratt & Whitney (32%) (32%) - - RIS 100% - 100% - RMD 100% - 100% - Elims & Other 33% 16% - 17% Total RTC 24% (36%) 61% (1%) 16
Slide 18: Segment Data – GAAP
Raytheon Technologies: Segment Data – GAAP RAYTHEON TECHNOLOGIES CORPORATION SEGMENT DATA - Reported 2020 2019 Q1 Q2 YTD 2020 Q1 Q2 Q3 Q4 YTD 2019 ($ Millions except per share amounts) Q1 Q2 YTD 2020 Q1 Q2 Q3 Q4 YTD 2019 Continuing Operations (Loss) Earnings per share - basic 0.51 (2.56) (2.78) 0.84
Slide 19: Segment Data – Adjusted
Raytheon Technologies: Segment Data – Adjusted Ex Rest & Significant non-recurring and RAYTHEON TECHNOLOGIES CORPORATION non-operational items Ex Rest & Significant non-recurring and non-operational items SEGMENT DATA - Adjusted (Unaudited) 2020 2019 ($ Millions except per share amounts) Q1 Q2 Q2 YT
Slide 20: Reconciliation of GAAP to Adjusted
Raytheon Technologies: Reconciliation of GAAP to Adjusted 19
Slide 21: Reconciliation of GAAP to Adjusted, cont.
Raytheon Technologies: Reconciliation of GAAP to Adjusted, cont. 20
Slide 22: Pro Forma Segment Data - GAAP and Adjusted
Raytheon Technologies: Pro Forma Segment Data - GAAP and Adjusted 1 RTX Pro Forma Segment Recast, GAAP and Adjusted (dollars in millions) 2020 2019 Pro Forma Net Sales 1 Q1 Q2 YTD Q2 Q1 Q2 Q3 Q4 FY Collins Aerospace Systems $ 6,438 $ 4,202 $ 10,640 $ 6,513 $ 6,576 $ 6,495 $ 6,444 $ 26,028 Pratt & Wh
Slide 23: Pro Forma Segment Data: Sales Reconciliation
Raytheon Technologies: Pro Forma Segment Data Reconciliation of Pro Forma1 GAAP to Adjusted Pro Forma Sales 2020 2019 (dollars in millions) Q1 Q2 YTD Q2 Q1 Q2 Q3 Q4 FY Collins Aerospace Systems Net sales, Pro Forma $ 6,438 $ 4,202 $ 10,640 $ 6,513 $ 6,576 $ 6,495 $ 6,444 $ 26,028 Significant unfavor
Slide 24: Pro Forma Segment Data: Operating Profit Reconciliation
Raytheon Technologies: Pro Forma Segment Data Reconciliation of Pro Forma1 GAAP to Adjusted Pro Forma Operating Profit 2020 2019 (dollars in millions) Q1 Q2 YTD Q2 Q1 Q2 Q3 Q4 FY Collins Aerospace Systems Operating profit, Pro Forma $ 1,246 $ (317) $ 929 $ 964 $ 1,276 $ 1,259 $ 1,009 $ 4,508 Restruc