Slide 1: 1Q 2021 Earnings Conference Call
1Q 2021 Earnings Conference Call April 27, 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 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: 1Q 2021 Highlights
1Q 2021 Highlights • Sales, adjusted EPS and free cash flow above Full Year Outlook expectations • Increased low end of full year sales and adjusted Sales $63.9B - $65.4B EPS outlook • Repurchased $375M of shares Organic sales growth %1 1% - 3% • Increased share buyback from $1.5B to at least Adjust
Slide 4: 1Q 2021 EPS from Continuing Operations
1Q 2021 Sales EPS from Cash Flow Cont. Ops GAAP Adjusted* $15.3B $0.7B ($0.4B) $0.90 $0.51 $0.3B Excludes: Cash Flow CapEx Free Cash - ($0.26) acquisition accounting adjustments From Cont. Flow* - ($0.11) other Operations - ($0.02) restructuring Sales, adjusted EPS and free cash flow exceeded expect
Slide 5: Collins Aerospace Segment Highlights
Collins Aerospace Segment Highlights 1Q 2021 ($ millions) Reported Adjusted* YOY Var.* Sales 4,370 4,370 (32%) Operating Profit 314 332 (74%) ROS 7.2% 7.6% • Organic sales* down 31% • Adjusted sales* down 32% – Commercial OEM down 45% – Commercial aftermarket down 43% – Military down 3% (up 4% ex-di
Slide 6: Pratt & Whitney Segment Highlights
Pratt & Whitney Segment Highlights 1Q 2021 ($ millions) Reported Adjusted* YOY Var.* Sales 4,030 4,030 (24%) Operating Profit 20 40 (92%) ROS 0.5% 1.0% • Organic sales* down 25% • Adjusted sales* down 24% – Commercial OEM down 40% – Commercial aftermarket down 35% – Military up 1% Photo: Photo: Bell
Slide 7: Raytheon Intelligence & Space Segment Highlights
Raytheon Intelligence & Space Segment Highlights 1Q 2021 ($ millions) Reported Adjusted* Sales 3,765 3,765 Operating Profit 388 388 ROS 10.3% 10.3% • Bookings – $1.4 billion of classified bookings – $227 million on a missile warning and defense contract – $199 million for an international tactical a
Slide 8: Raytheon Missiles & Defense Segment Highlights
Raytheon Missiles & Defense Segment Highlights 1Q 2021 ($ millions) Reported Adjusted* Sales 3,793 3,793 Operating Profit 496 496 ROS 13.1% 13.1% • Bookings – $518 million for the Advanced Medium-Range Air-to-Air Missile (AMRAAM) for the U.S. Air Force, Navy and international customers – $247 millio
Slide 9: Current Environment
Current Environment • Increased gross merger synergies by $300M to $1.3B Cost reduction actions & • Substantial progress on synergies and structural cost reduction cost synergies • Robust pipeline of incremental actions • Vaccine distribution and accessibility accelerating • Expect global RPMs and l
Slide 10: 2021 Outlook
2021 Outlook 1Q Actual 2Q Outlook Full Year Outlook Sales $15.3B ✓ $15.5B - $16.0B $63.9B - $65.4B Prior $63.4 - $65.4B Organic sales growth%1 (16%) ✓ 8% - 12% 1% - 3% Prior: flat - 3% Adjusted EPS* $0.90 ✓ $0.90 - $0.95 $3.50 - $3.70 Prior: $3.40 - $3.70 Free cash flow* ~$4.5B ✓ Increasing low end
Slide 11: 2021 Priorities
2021 Priorities • Continue to support employees, customers, suppliers and communities • Invest in technology and product innovation to drive industry leadership • Execute integration and deliver synergies • Drive continued structural cost reduction • Disciplined capital deployment and maintain stron
Slide 12: © 2021 Raytheon Technologies All rights reserved
© 2021 Raytheon Technologies All rights reserved
Slide 13: Appendix
a Appendix SZ Raytheon 12 anf Technologies
Slide 14: Use and Definitions of Non-GAAP Financial Measures
Use and Definitions of Non-GAAP Financial Measures Raytheon Technologies Corporation’s (“RTC”) reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). We supplement the reporting of our financial information determined under GAAP with
Slide 15: 2021 Segment Outlook
2021 Segment Outlook* ($ millions) 1 Adjusted Sales Adjusted Operating Full Year 1 VPY % Profit VPY Current down mid to low single ($200) - $25 Collins Aerospace Prior down high to low single ($275) - $25 Current up low to up mid single ($75) - $25 Pratt & Whitney Prior flat to up mid single ($125)
Slide 16: Additional 2021 Items
Additional 2021 Items Prior Current FY 2021 FY 2021 Adjusted Tax Rate* ~19% ~19% Interest Expense $1,400M - $1,425M ~$1,400M Corporate Expense and Other Unallocated Items $425M - $450M ~$425M FAS/CAS Operating Adjustment ~$1,675M ~$1,675M Non-Service Pension Benefit ~$1,925M ~$1,925M Capex Spending
Slide 17: P&W Engine Shipments to Customers
Raytheon Technologies: P&W Engine Shipments to Customers 2020 2021 Q1 Q2 Q3 Q4 FY Q1 Military 48 72 59 62 241 44 Large commercial* 211 92 114 129 546 137 Pratt & Whitney Canada** 466 393 379 412 1,650 396 *Large commercial excludes industrial engine shipments. **Excludes APUs. 16
Slide 18: Free Cash Flow Reconciliation
Raytheon Technologies: Free Cash Flow Reconciliation ($ millions) 1Q 2021 Net income attributable to common shareowners from continuing operations 813 Depreciation & amortization 1,123 Change in working capital (934) Other (279) Cash flow from operations 723 Capital expenditures (387) Free cash flow
Slide 19: 1Q 2021: Raytheon Technologies Sales Reconciliation
1Q 2021: Raytheon Technologies Sales Reconciliation Total Acquisitions Organic sales growth on an Reported Organic and Other* adjusted pro forma basis Growth Divestitures Collins Aerospace (32%) (31%) (1%) - Total reported growth 34% Pratt & Whitney (25%) (25%) - - Raytheon Merger pro forma adjustme
Slide 20: 1Q 2021: Restructuring Costs
1Q 2021: Raytheon Technologies Restructuring Costs ($ millions) 2021 2020 Restructuring impact to: Q1 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Operating profit Collins Aerospace Systems (18) (6) (151) (138) (65) (360) Pratt & Whitney (20) - (107) (63) (10) (180) RIS - - - - - - RMD - - - - - - T
Slide 21: 2020 Reported to Adjusted
Raytheon Technologies: 2020 Reported to Adjusted ($ millions) Restructuring & Significant non-recurring and non- Reported Adjusted1 (Unaudited) operational items 1 (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 FY
Slide 22: 2021 Reported to Adjusted
Raytheon Technologies: 2021 Reported to Adjusted Restructuring & ($ millions) Significant non- Reported recurring and non- Adjusted1 (Unaudited) operational items1 (Unaudited) Net Sales Q1 2021 Q1 2021 Q1 2021 Collins Aerospace Systems $ 4,370 $ - $ 4,370 Pratt & Whitney 4,030 - 4,030 Raytheon Intel
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 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Collins Aerospace Systems Net sales $ 4,370 $ 6,438 $ 4,202 $ 4,274 $ 4,374 $ 19,288 Significant unfavorable contract adj
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 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Pratt & Whitney Net sales $ 4,030 $ 5,353 $ 3,487 $ 3,494 $ 4,465 $ 16,799 Significant unfavorable contract adjustments - 22 (120)
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 Q1 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Raytheon Intelligence & Space Net sales $ 3,765 $ - $ 3,314 $ 3,674 $ 3,853 $ 10,841 Adjusted net sales $ 3,765 $ - $
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 Q1 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Raytheon Missiles & Defense Net sales $ 3,793 $ - $ 3,590 $ 3,794 $ 4,276 $ 11,660 Middle East contract adjustment - -
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 Q1 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Eliminations and other Net sales $ (707) $ (431) $ (532) $ (489) $ (549) $ (2,001) Operating loss $ (31) $ (25) $ (28)
Slide 28: Reconciliation of GAAP to Adjusted: Consolidated Income, EPS
Raytheon Technologies: Reconciliation of GAAP to Adjusted Consolidated Income, Earnings Per Share ($ millions) (Unaudited) (Unaudited) 2021 2020 Q1 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Income (loss) from continuing operations attributable to common shareowners $ 772 $ 438 $ (3,844) $ 151 $ 1
Slide 29: Adjusted Pro Forma Segment Data
Raytheon Technologies: Adjusted Pro Forma Segment Data ($ millions) (Unaudited) Adjusted 2 Adjusted Pro Forma / Actuals 1 Net Sales Q1 2021 Q1 2020 PF Q2 2020 PF Q3 2020 Q4 2020 FY 2020 PF Collins Aerospace Systems $ 4,370 $ 6,460 $ 4,298 $ 4,278 $ 4,388 $ 19,424 Pratt & Whitney 4,030 5,331 3,607 3,
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 Earnings to Adjusted Pro Forma Earnings
Raytheon Technologies: Reconciliation of 2020 Adjusted Earnings to 2020 Adjusted Pro forma Earnings ($ millions) (dollars in millions) 2020 Adjusted Earnings Pro Forma Adjustments 1 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
Slide 34: Pension Impact
Pension Impact ($ millions) Current projections* 2020 2020 2021 2022 2023 Actual Adjusted pro forma P&L impact RMD/RIS Service cost ($354) ($477) ($405) ($375) ($200) RMD/RIS CAS recovery $1,460 $1,987 $2,080 $1,750 $1,300 FAS/CAS operating adjustment $1,106 $1,510 $1,675 $1,375 $1,100 Non-service p