Slide 1: 2Q 2021 Earnings Conference Call
2Q 2021 Earnings Conference Call July 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 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: Macro Environment
Macro Environment U.S. DoD Modernization Budget Commercial Air Traffic 1.3 Global domestic ASMs RDT&E programs Trillions of miles Δ% 1.0 0.8 $243B $246B 1.2% 0.5 0.3 0.0 $105B $112B 6.8% 2019 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Qtr Avg (Sequential Δ%) (60%) 93% 11% (6%) 24% LTAMDS Long-Range Next-Gen Stan
Slide 4: 2Q 2021 Highlights
2Q 2021 Highlights • Strong financial performance Full Year Outlook • Commercial aftermarket momentum building Sales $64.4B - $65.4B ✓ • Continued defense growth Organic sales growth %1 1% - 3% • Repurchased $632M of RTX shares Adjusted EPS* $3.85 - $4.00 • RTX backlog of $152B; defense $66B Free ca
Slide 5: 2Q 2021 Sales, EPS and Cash Flow
2Q 2021 Sales EPS from Cash Flow Cont. Ops 10% organic1 growth* GAAP Adjusted* $15.9B $14.1B $1.3B $1.03 $0.69 $1.0B $0.39 2020 2021 Excludes: Acq. Accounting Adj. ($0.28) ($0.26) Restructuring ($0.21) ($0.03) Other ($2.46) ($0.05) ($2.56) 2020 2021 Cash Flow From CapEx Free Cash 2Q 2020 2Q 2021 2Q
Slide 6: Collins Aerospace Segment Highlights
Collins Aerospace Segment Highlights 2Q 2021 ($ millions) Reported Adjusted* YOY Var.* Sales 4,545 4,545 6% Operating Profit 506 518 2,058% ROS 11.1% 11.4% 1,080 bps • Organic sales* up 11% • Adjusted sales* up 6% – Commercial aftermarket up 24% – Commercial OEM up 8% – Military down 7% (down 1% ex-
Slide 7: Pratt & Whitney Segment Highlights
Pratt & Whitney Segment Highlights 2Q 2021 ($ millions) Reported Adjusted* YOY Var.* Sales 4,280 4,280 19% Operating Profit 112 96 NM ROS 2.6% 2.2% 640 bps • Organic sales* up 21% • Adjusted sales* up 19% – Commercial aftermarket up 41% – Commercial OEM up 30% – Military down 3% Photo: Photo: Bell U
Slide 8: Raytheon Intelligence & Space Segment Highlights
Raytheon Intelligence & Space Segment Highlights 2Q 2021 ($ millions) Reported Adjusted* YOY Var.* Sales 3,805 3,805 12% Operating Profit 415 415 34% ROS 10.9% 10.9% 180 bps • Organic sales* up 5% • Adjusted sales* up 12% – Pre-merger stub period Air Traffic Controllers in Terminal Radar Approach Co
Slide 9: Raytheon Missiles & Defense Segment Highlights
Raytheon Missiles & Defense Segment Highlights 2Q 2021 ($ millions) Reported Adjusted* YOY Var.* Sales 3,985 3,985 15% Operating Profit 532 532 38% ROS 13.4% 13.4% 220 bps • Organic sales* up 7% • Adjusted sales* up 15% – Pre-merger stub period – Higher volume on an international Patriot program and
Slide 10: Current Environment
Current Environment • Monitoring international border re-openings and COVID variants Commercial • Continued growth in RPMs and load factors throughout the year • Sequential aftermarket growth • Backlog of $66.1B; Q2 book-to-bill 1.12 Defense • Well positioned in high growth areas • Key franchise win
Slide 11: 2021 Outlook
2021 Outlook 2Q Actual Full Year Outlook Sales $15.9B ✓ $64.4B - $65.4B Prior $63.9 - $65.4B Organic sales growth%*,1 10% ✓ 1% - 3% ✓ Adjusted EPS* $1.03 ✓ $3.85 - $4.00 Prior: $3.50 - $3.70 Free cash flow* $1.0B ✓ $4.5B - $5.0B Prior: ~$4.5B 1) Organic sales growth on an adjusted pro forma basis is
Slide 12: 2021 Priorities
2021 Priorities • Continue to support employees, customers, suppliers and communities • Invest in technology and product innovation to drive industry leadership • Execute integration and deliver synergies • Drive operational excellence and continued structural cost reduction • Disciplined capital de
Slide 13: © 2021 Raytheon Technologies All rights reserved
© 2021 Raytheon Technologies All rights reserved
Slide 14: Appendix
a Appendix SZ Raytheon 13 anf Technologies
Slide 15: Use and Definitions of Non-GAAP Financial Measures
Use and Definitions of Non-GAAP Financial Measures Raytheon Technologies Corporation (“RTC”) reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). We supplement the reporting of our financial information determined under GAAP with ce
Slide 16: 2Q 2021 Quarterly Trends
2Q 2021 Quarterly Trends Sequential 2Q Commercial Pratt & Whitney Active YTD Book-to-Bill Ratio Aftermarket Growth Engines A320 V2500 A320 GTF A220 85% 86% 86% 75% 15% 68% 65% 63% 60% 1.11 1.12 45% 5% RIS RMD Collins Pratt & 2Q 2020 4Q 2020 2Q 2021 Whitney Active is defined as engines with flight ac
Slide 17: 2021 Segment Outlook
2021 Segment Outlook* ($ millions) 1 Adjusted Sales Adjusted Operating Full Year 1 VPY % Profit VPY Current $100 - $275 Collins Aerospace down mid to low single Prior ($200) - $25 Current ($50) - $25 Pratt & Whitney up low to mid single Prior ($75) - $25 Current $150 - $175 Raytheon Intelligence & S
Slide 18: Additional 2021 Items
Additional 2021 Items Prior Current FY 2021 FY 2021 Adjusted Tax Rate* ~19% ~16% Interest Expense ~$1,400M ~$1,400M Corporate Expense and Other Unallocated Items ~$425M ~$375M FAS/CAS Operating Adjustment ~$1,675M ~$1,675M Non-Service Pension Benefit ~$1,925M ~$1,925M Capex Spending ~$2,500M $2,400M
Slide 19: P&W Engine Shipments to Customers
Raytheon Technologies: P&W Engine Shipments to Customers 2020 2021 Q1 Q2 Q3 Q4 FY Q1 Q2 Military 48 72 59 62 241 44 61 Large Commercial1 211 92 114 129 546 137 144 Pratt & Whitney Canada2 466 393 379 412 1,650 396 467 1) Large commercial excludes industrial engine shipments 2) Excludes APUs 18
Slide 20: Free Cash Flow Reconciliation
Raytheon Technologies: Free Cash Flow Reconciliation ($ millions) 2Q 2021 Net income attributable to common shareowners from continuing operations 1,088 Depreciation & amortization 1,132 Change in working capital (499) Other (395) Cash flow from operations 1,326 Capital expenditures (360) Free cash
Slide 21: 2Q 2021: Sales Reconciliation
2Q 2021: Raytheon Technologies Sales Reconciliation Total Acquisitions Organic sales growth on an Reported Organic and Other1 adjusted pro forma basis Growth Divestitures Collins Aerospace 8% 11% (4%) 1% Total reported growth 13% Pratt & Whitney 23% 21% - 2% Raytheon Merger pro forma adjustments (3%
Slide 22: 2Q 2021: Restructuring Costs
2Q 2021: Raytheon Technologies Restructuring Costs ($ millions) 2021 2020 Restructuring impact to: Q1 2021 Q2 2021 Q2 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Operating profit Collins Aerospace Systems (18) (12) (30) (6) (151) (138) (65) (360) Pratt & Whitney (20) 16 (4) - (107) (63) (10) (1
Slide 23: 2020 Reported to Adjusted
Raytheon Technologies: 2020 Reported to Adjusted ($ millions) 1 Restructuring & Significant non-recurring and non- Reported 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
Slide 24: 2021 Reported to Adjusted
Raytheon Technologies: 2021 Reported to Adjusted ($ millions) Reported Restructuring & Significant non-recurring and non- Adjusted1 (Unaudited) operational items1 (Unaudited) Net Sales Q1 2021 Q2 2021 Q2 YTD 2021 Q1 2021 Q2 2021 Q2 YTD 2021 Q1 2021 Q2 2021 Q2 YTD 2021 Collins Aerospace Systems $ 4,3
Slide 25: Reconciliation of GAAP to Adjusted: Collins Aerospace
Raytheon Technologies: Reconciliation of GAAP to Adjusted Collins Aerospace Systems ($ millions) (Unaudited) (Unaudited) 2021 2020 Q1 2021 Q2 2021 Q2 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Collins Aerospace Systems Net sales $ 4,370 $ 4,545 $ 8,915 $ 6,438 $ 4,202 $ 4,274 $ 4,374 $ 19,288
Slide 26: 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 Q2 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Pratt & Whitney Net sales $ 4,030 $ 4,280 $ 8,310 $ 5,353 $ 3,487 $ 3,494 $ 4,465 $ 16,799 Significant unfavora
Slide 27: 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 Q2 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Raytheon Intelligence & Space Net sales $ 3,765 $ 3,805 $ 7,570 $ - $ 3,387 $ 3,749 $ 3,933 $ 1
Slide 28: 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 Q2 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Raytheon Missiles & Defense Net sales $ 3,793 $ 3,985 $ 7,778 $ - $ 3,506 $ 3,706 $ 4,184 $ 11,39
Slide 29: 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 Q2 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Eliminations and other Net sales $ (707) $ (735) $ (1,442) $ (431) $ (521) $ (476) $ (537) $ (1,
Slide 30: Reconciliation of GAAP to Adjusted: Consolidated Income, EPS
Raytheon Technologies: Reconciliation of GAAP to Adjusted Consolidated Income, Earnings Per Share (Unaudited) (Unaudited) ($ millions) 2021 2020 Q1 2021 Q2 2021 Q2 YTD 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Income (loss) from continuing operations attributable to common shareowners $ 772 $ 1,0
Slide 31: Adjusted Pro Forma Segment Data
Raytheon Technologies: Adjusted Pro Forma Segment Data ($ millions) (Unaudited) Adjusted2 Adjusted Pro Forma / Actuals 1 Net Sales Q1 2021 Q2 2021 Q2 YTD 2021 Q1 2020 PF Q2 2020 PF Q3 2020 Q4 2020 FY 2020 PF Collins Aerospace Systems $ 4,370 $ 4,545 $ 8,915 $ 6,460 $ 4,298 $ 4,278 $ 4,388 $ 19,424 P
Slide 32: 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 33: 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 34: 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 35: Reconciliation of 2020 Adjusted Earnings 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
Slide 36: Pension Impact
Pension Impact ($ millions) Current projections* 2020 2020 2021 2022 2023 2024 2025 Actual Adjusted pro forma P&L impact RMD/RIS Service cost ($354) ($477) ($405) ($375) ($200) ($175) ($175) RMD/RIS CAS recovery $1,460 $1,987 $2,080 $1,750 $1,300 $800 $525 FAS/CAS operating $1,106 $1,510 $1,675 $1,3