Slide 1: 1Q 2020 Earnings Conference Call
1Q 2020 Earnings Conference Call May 7, 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 presentation contains statements which, to the extent they are not statements of historical or present fact, constitute “forward-looking statements” under the
Slide 3: COVID-19 Update and Response
COVID-19 Update and Response • Employee health and safety • Business continuity for customers and supply chain • Community and medical industry support • Positioning for the future Raytheon Technologies employee building face shields in East Hartford, CT Taking immediate actions to drive $2B of cost
Slide 4: Raytheon Technologies: Focused A&D Company
Raytheon Technologies: Focused A&D Company Raytheon Technologies Portfolio Creates the world’s most advanced aerospace and defense systems provider Collins Aerospace Pratt & Whitney Serves customers worldwide through a platform- agnostic, balanced and diversified portfolio Delivers breakthrough tech
Slide 5: Strong Financial Profile
Strong Financial Profile Flexible Balance Sheet and Ample Balanced and Diversified Cost and Cash Initiatives Liquidity Portfolio • Strong balance sheet Sales1 • $2B of immediate cost and $4B of cash – RTX Cash ~$8.5B as of April 3, 2020 actions 55% – RTX Net debt ~$25B as of April 3, 2020 – Capex ~$
Slide 6: 1Q 2020: Raytheon Technologies
1Q 2020: Raytheon Technologies Sales EPS Cash Flow GAAP Adjusted* (attributable to common shareowners) Down 1% Down Down 7% 106% $18.4B $18.2B $661M ($412M) $1.91 $1.78 $1.56 $249M ($0.10) 1Q 2019 1Q 2020 1Q 2019 1Q 2020 1Q 2019 1Q 2020 Cash CapEx Free Organic* flat ($0.35) ($1.88) Flow Cash FX (1)
Slide 7: 1Q 2020: Raytheon Company
1Q 2020: Raytheon Company Bookings Backlog Net Sales Up 25% $51.3B Up 93% $41.1B Up 6.5% $10.3B $7.2B $6.7B $5.4B 1Q 2019 1Q 2020 1Q 2019 1Q 2020 1Q 2019 1Q 2020 Record backlog of over $51 billion and strong book-to-bill ratio of 1.44 Note: Raytheon Company first quarter 2020 results are not include
Slide 8: Collins Aerospace Segment Highlights
Collins Aerospace Segment Highlights 1Q 2020 ($ millions) Reported Adjusted* YOY Var.* Sales 6,438 6,438 (1%) Operating Profit 1,092 1,138 3% ROS 17.0% 17.7% 0.8 pts. • Organic sales* down 1% • Reported sales down 1% – Commercial OEM down 12% – Commercial aftermarket up 3% – Military up 10% • Adjust
Slide 9: Pratt & Whitney Segment Highlights
Pratt & Whitney Segment Highlights 1Q 2020 ($ millions) Reported Adjusted* YOY Var.* Sales 5,351 5,351 11% Operating Profit 439 439 (2%) ROS 8.2% 8.2% (1.1) pts. • Organic sales* up 12% • Reported sales up 11% – Commercial OEM up 25% – Commercial aftermarket up 4% – Military up 16% • Adjusted operat
Slide 10: Raytheon Segment Highlights
Raytheon Segment Highlights Raytheon Intelligence & Space Raytheon Missiles & Defense Pro Forma 1Q 2020* ($ millions) Pro Forma 1Q 2020* ($ millions) Sales 3,575 Sales 3,854 Operating Profit 379 Operating Profit 573 ROS 10.6% ROS 14.9% Highlights Highlights • ~$350M on the Force Element Terminal (FE
Slide 11: Current Environment
Current Environment Tailwinds Headwinds / Monitoring • Military program growth • Macro environment/COVID-19 impact • Alignment to National Defense Strategy – OEM production levels • Raytheon Technologies cost synergies – Revenue Passenger Miles • Rockwell Collins cost synergies – Airline financial c
Slide 12: Additional Raytheon Technologies Q2-Q4 2020 Items
Additional Raytheon Technologies Q2-Q4 2020 Items Adjusted Tax Rate ~22% Interest Expense $1,075M - $1,125M Corporate Expense and Other Unallocated Items* $250M - $300M FAS/CAS Operating Adjustment $1,090M - $1,150M Amortization/Acquisition Accounting Adjustments ~$1.8B Non-Service Pension Benefit $
Slide 13: 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 • Structure the business for long-term success Maintain financial strength and flexibility 12
Slide 14: © 2020 Raytheon Technologies All rights reserved
© 2020 Raytheon Technologies All rights reserved
Slide 15: Appendix
a Appendix s% Raytheon 14 ans Technologies
Slide 16: 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 17: Raytheon Technologies: Commercial Aero Aftermarket
Raytheon Technologies: Commercial Aero Aftermarket (VPY %*) 20 10 Flat 0 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 (10) Pratt & Whitney Collins Aerospace Commercial Aftermarket Sales Commercial Aftermarket Sales 16 % VPY for Pratt & Whitney is on a reported basis. 2019 % VPY Collins Aerospac
Slide 18: 1Q 2020: Raytheon Technologies Sales Reconciliation
1Q 2020: Raytheon Technologies Sales Reconciliation Total Growth Organic FX Otis (4%) (2%) (2%) Carrier (10%) (9%) (1%) Pratt & Whitney 11% 12% (1%) Collins Aerospace (1%) (1%) 0% Total RTC (1%) 0% (1%) 17
Slide 19: Raytheon Technologies: P&W Engine Shipments to Customers
Raytheon Technologies: P&W Engine Shipments to Customers 2019 2020 Q1 Q2 Q3 Q4 FY Q1 Military 39 58 53 65 215 48 Large commercial* 189 173 165 219 746 211 Pratt & Whitney Canada** 524 593 607 631 2,355 466 *Large commercial excludes industrial engine shipments. **Excludes APUs. 18
Slide 20: Raytheon Technologies: Segment Data – GAAP
Raytheon Technologies: Segment Data – GAAP RAYTHEON TECHNOLOGIES CORPORATION SEGMENT DATA - Reported 2020 2019 ($ Millions except per share amounts) Q1 Q1 Q2 Q3 Q4 YTD 2019 Otis Net Sales 2,966 3,096 3,348 3,307 3,362 13,113 Operating Profit (a),(v),(w),(ff),(gg) 371 426 515 508 499 1,948 Operating
Slide 21: Raytheon Technologies: Segment Data – Notes
Raytheon Technologies: Segment Data – Notes The earnings release and conference-call discussion adjust 2020 and 2019 segment results for restructuring costs as well as certain significant non-recurring and/or non-operational items. The following restructuring costs and significant non-recurring and/
Slide 22: Raytheon Technologies: Segment Data – Adjusted
Raytheon Technologies: Segment Data – Adjusted Ex Rest & Significant non- Ex Rest & Significant non-recurring and non-operational RAYTHEON TECHNOLOGIES CORPORATION recurring and non- items operational items SEGMENT DATA - Adjusted (Unaudited) 2020 2019 ($ Millions except per share amounts) Q1 Q1 Q2
Slide 23: RTC: Segment Adjusted Operating Profit Reconciliation
RTC: Segment Adjusted Operating Profit Reconciliation Raytheon Technologies Corporation Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results Adjusted Operating Profit & Operating Profit Margin Quarter Ended March 31, (Unaudited) (dollars in millions - Income (Expense)) 2020 2019 Otis Net
Slide 24: Raytheon Technologies: Reported EPS Reconciliation
Raytheon Technologies: Reported EPS Reconciliation Reconciliation of Diluted Earnings per Share to Adjusted Diluted Earnings per Share (dollars in millions except per share amounts) 2020 2019 Q1 Q1 Q2 Q3 Q4 Total Diluted (loss) earnings per share attributable to common shareowners $ (0.10) $ 1.56 $
Slide 25: Reconciliation of Former Raytheon Company Segments to Post-Merger Segments
Reconciliation of the Former Raytheon Company’s Historical Segments to the Post-Merger Segments Q1 2020 Operating ($ in millions, except percentages) Sales Profit ROS Raytheon Intelligence & Space Intelligence, Information and Services 1,731 142 Space and Airborne Systems 1,894 244 Corporate allocat
Slide 26: Raytheon Technologies: Key Data
Raytheon Technologies: Key Data ($ millions) 1Q 20 1Q 19 Free cash flow 249 1,137 Debt/capital* 53% 52% Net debt/capital* 48% 48% Capital expenditure 412 363 Share repurchase 47 29 Acquisitions** 10 19 *Adjusted to reflect the accounting for non-controlling interests. **Includes debt assumed. 25
Slide 27: Raytheon Technologies: Free Cash Flow Reconciliation
Raytheon Technologies: Free Cash Flow Reconciliation ($ millions) 1Q 2020 2019 Net income attributable to common shareowners from (83) 1,346 continuing operations Depreciation & amortization 980 942 Change in working capital (887) (445) Other 651 (343) Cash flow from operations 661 1,500 Capital exp
Slide 28: RIS & RMD 2020 Outlook
RIS & RMD 2020 Outlook Purchase Pre-Merger Q1 Pre-Merger ‘Stub Period’ Accounting/ COVID-19 RTX Q2-Q4 Outlook % growth Actuals Q2-Q4 Outlook % growth Mar 30-Apr 2 Divestiture Synergies Impact Outlook Sales ($ billions) RIS 15.2-15.5 6-8% (3.6) 11.6-11.9 6-8% (0.2) (0.1) (0.2) (0.1) 11.0-11.3 RMD 16.
Slide 29: RTX Financial Reporting Presentation Notes
RTX Financial Reporting Presentation Notes Collins Aerospace Systems • Includes legacy Collins Aerospace Systems segment (and continues to include Collins’ Mission Systems business) • On a recast basis, 2019 would exclude ~$620M of acquisition accounting adjustments and include ~$200M of corporate e