Commercial Aerospace continues to drive sales and EPS
growth; Q2 defense book-to-bill of 1.35
ARLINGTON, Va., July 26,
2022 /PRNewswire/ -- Raytheon Technologies
Corporation (NYSE: RTX) reported second quarter 2022 results.
Second quarter 2022
- Sales of $16.3 billion, up 3
percent versus prior year including 4 percent organic growth
- GAAP EPS from continuing operations of $0.88, up 28 percent versus prior year, including
$0.28 of acquisition accounting
adjustments and net significant and/or non-recurring charges
- Adjusted EPS of $1.16, up 13
percent versus prior year
- Operating cash flow from continuing operations of $1.3 billion; Free cash flow of $807 million
- Achieved approximately $80
million of incremental RTX gross cost synergies
- Repurchased over $1.0 billion of
RTX shares
Outlook for full year 2022
- Confirms sales of $67.75 -
$68.75 billion
- Confirms adjusted EPS to $4.60 -
$4.80
- Confirms free cash flow of approximately $6.0 billion. Assumes the legislation requiring
R&D capitalization for tax purposes is deferred beyond
2022.
- Confirms share repurchase of at least $2.5 billion of RTX shares
"A strong start to the summer travel season drove continued
top-line growth and adjusted EPS that exceeded our expectations,"
said Raytheon Technologies Chairman and CEO Greg Hayes. "Resilient end-market demand along
with our differentiated technology solutions generated over
$24 billion of awards in the
quarter."
"Looking ahead, while we expect the global supply chain
environment, labor availability and inflation will remain
challenging near term, we are actively engaged with our customers
and suppliers to meet demand and remain cost competitive. We
continue to be focused on strategic investments in technology and
innovation that will drive our industry leadership today and into
the future."
See "Use and
Definitions of Non-GAAP Financial Measures" below for information
regarding non-GAAP financial measures.
|
Second quarter 2022
Raytheon Technologies reported second quarter sales of
$16.3 billion, up 3 percent over the
prior year, including 4 points of organic sales growth partially
offset by 1 point of net acquisitions and divestitures headwind.
GAAP EPS from continuing operations of $0.88 was up 28 percent versus the prior year and
included $0.28 of acquisition
accounting adjustments and net significant and/or non-recurring
charges. This includes $0.23 of
acquisition accounting adjustments primarily related to intangible
amortization, $0.04 related to the
disposition of non-core businesses at Collins Aerospace, and
$0.01 of restructuring. Adjusted EPS
of $1.16 was up 13 percent versus
prior year.
The company recorded net income from continuing operations in
the second quarter of $1.3 billion,
up 25 percent versus prior year and included $418 million of acquisition accounting
adjustments and net significant and/or non-recurring charges.
Adjusted net income was $1.7 billion,
up 10 percent versus prior year. Operating cash flow from
continuing operations in the second quarter was $1.3 billion. Capital expenditures were
$479 million, resulting in free cash
flow of $807 million.
Summary Financial
Results – Continuing Operations
|
|
|
|
2nd
Quarter
|
($ in millions, except
EPS)
|
|
2022
|
|
2021
|
%
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
16,314
|
|
$
15,880
|
3 %
|
Net Income
|
$ 1,304
|
|
$ 1,040
|
25 %
|
EPS
|
$
0.88
|
|
$
0.69
|
28 %
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Sales
|
$
16,314
|
|
$
15,880
|
3 %
|
Net Income
|
$ 1,722
|
|
$ 1,565
|
10 %
|
EPS
|
$
1.16
|
|
$
1.03
|
13 %
|
|
|
|
|
|
|
Operating Cash Flow
from Continuing Operations
|
$ 1,286
|
|
$ 1,326
|
(3) %
|
Free Cash
Flow
|
|
$
807
|
|
$
966
|
(16) %
|
Backlog and Bookings
Backlog at the end of the second quarter was $161 billion, of which $96
billion was from commercial aerospace and $65 billion was from defense.
Notable defense bookings during the quarter included:
- $4.0 billion for F135 production
Lots 15 and 16 at Pratt & Whitney
- $1.2 billion of classified
bookings at Raytheon Intelligence & Space (RIS)
- $662 million for Stinger
replenishment for the U.S. Army at Raytheon Missiles & Defense
(RMD)
- $648 million for Standard
Missile-3 (SM-3) for the Missile Defense Agency (MDA) at RMD
- $423 million for a SPY-6 Hardware
Production and Sustainment contract for the U.S. Navy at RMD
- $408 million for F135 sustainment
services at Pratt & Whitney
- $253 million on the Development,
Operations and Maintenance (DOMino) cyber program for the
Department of Homeland Security (DHS) at RIS
- $217 million for Tomahawk for the
U.S. Navy at RMD
Segment Results
The company's reportable segments are Collins Aerospace, Pratt
& Whitney, Raytheon Intelligence & Space (RIS) and Raytheon
Missiles & Defense (RMD).
Collins
Aerospace
|
|
2nd
Quarter
|
($ in
millions)
|
2022
|
|
2021
|
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
5,011
|
|
$
4,545
|
10 %
|
|
Operating
Profit
|
$ 546
|
|
$ 506
|
8 %
|
|
ROS
|
10.9 %
|
|
11.1 %
|
(20)
|
bps
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Sales
|
$
5,011
|
|
$
4,545
|
10 %
|
|
Operating
Profit
|
$ 617
|
|
$ 518
|
19 %
|
|
ROS
|
12.3 %
|
|
11.4 %
|
90
|
bps
|
Collins Aerospace had second quarter 2022 adjusted sales of
$5,011 million, up 10 percent versus
the prior year. The increase in sales was driven by a 25 percent
increase in commercial aftermarket and a 14 percent increase in
commercial OE, which more than offset a 6 percent decline in
military. The increase in commercial sales was driven primarily by
the recovery of commercial air traffic which has resulted in higher
flight hours, aircraft fleet utilization, and narrowbody OE volume.
This was partially offset by lower material receipts on military
programs and expected declines in F-35 volume.
Collins Aerospace recorded adjusted operating profit of
$617 million in the quarter, up 19
percent versus the prior year. The increase in adjusted operating
profit was primarily driven by drop through on higher commercial
aftermarket, which more than offset higher SG&A expense, the
absence of prior year favorable contract settlements, and lower
military sales volume.
Pratt &
Whitney
|
|
2nd
Quarter
|
($ in
millions)
|
2022
|
|
2021
|
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
4,969
|
|
$
4,280
|
16 %
|
|
Operating
Profit
|
$ 302
|
|
$ 112
|
170 %
|
|
ROS
|
6.1 %
|
|
2.6 %
|
350
|
bps
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Sales
|
$
4,969
|
|
$
4,280
|
16 %
|
|
Operating
Profit
|
$ 303
|
|
$
96
|
216 %
|
|
ROS
|
6.1 %
|
|
2.2 %
|
390
|
bps
|
Pratt & Whitney had second quarter 2022 adjusted sales of
$4,969 million, up 16 percent versus
the prior year. The increase in sales was driven by a 26 percent
increase in commercial aftermarket, a 22 percent increase in
commercial OE, and a 5 percent increase in military. The increase
in commercial sales was primarily due to higher shop visits and
related spare part sales and favorable large engine mix and volume.
The increase in military sales was driven primarily by the timing
of the award for the Lot 15 and 16 F135 production contract in Q2
and higher F135 aftermarket volume.
Pratt & Whitney recorded adjusted operating profit of
$303 million in the quarter, up 216
percent versus the prior year. The increase in adjusted operating
profit was primarily driven by drop through on higher commercial
aftermarket sales volume, favorable commercial OE mix, and higher
military sales volume. This was partially offset by higher SG&A
and R&D.
Raytheon
Intelligence & Space
|
|
2nd
Quarter
|
($ in
millions)
|
2022
|
|
2021
|
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
3,570
|
|
$
3,805
|
(6) %
|
|
Operating
Profit
|
$ 315
|
|
$ 415
|
(24) %
|
|
ROS
|
8.8 %
|
|
10.9 %
|
(210)
|
bps
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Sales
|
$
3,570
|
|
$
3,805
|
(6) %
|
|
Operating
Profit
|
$ 315
|
|
$ 415
|
(24) %
|
|
ROS
|
8.8 %
|
|
10.9 %
|
(210)
|
bps
|
RIS had second quarter 2022 adjusted sales of $3,570 million, down 6 percent versus the prior
year. The decrease in sales was primarily driven by the divestiture
of the Global Training and Services business. Excluding the impact
of acquisitions and divestitures, sales were
down 1 percent versus prior year. Lower expected sales in
Command, Control and Communications as well as lower sales within
Sensing and Effects were partially offset by higher sales in
classified cyber programs within Cyber, Training and Services.
RIS recorded adjusted operating profit of $315 million, down 24 percent versus the prior
year. The decrease in adjusted operating profit was primarily
driven by lower net program efficiencies, including unfavorable
development program adjustments, the impact of the Global Training
and Services divestiture, and the absence of a prior year land
sale.
Raytheon Missiles
& Defense
|
|
2nd
Quarter
|
($ in
millions)
|
2022
|
|
2021
|
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
3,558
|
|
$
3,985
|
(11) %
|
|
Operating
Profit
|
$ 348
|
|
$ 532
|
(35) %
|
|
ROS
|
9.8 %
|
|
13.4 %
|
(360)
|
bps
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Sales
|
$
3,558
|
|
$
3,985
|
(11) %
|
|
Operating
Profit
|
$ 348
|
|
$ 532
|
(35) %
|
|
ROS
|
9.8 %
|
|
13.4 %
|
(360)
|
bps
|
RMD had second quarter 2022 adjusted sales of $3,558 million, down 11 percent versus prior
year. The decrease in sales was primarily driven by continuing
supply chain constraints and expected declines on
certain Land Warfare and Air Defense programs, which were partially
offset by higher volume on SPY-6 production and Next Generation
Interceptor development.
RMD recorded adjusted operating profit of $348 million, down 35 percent versus the prior
year. The decrease in adjusted operating profit was driven
primarily by lower net program efficiencies across various programs
resulting from continued supply chain constraints, unfavorable
program mix and lower volume primarily in Land Warfare and Air
Defense programs.
About Raytheon Technologies
Raytheon Technologies Corporation is an aerospace and defense
company that provides advanced systems and services for commercial,
military and government customers worldwide. With four
industry-leading businesses ― Collins Aerospace Systems, Pratt
& Whitney, Raytheon Intelligence & Space and Raytheon
Missiles & Defense ― the company delivers solutions that push
the boundaries in avionics, cybersecurity, directed energy,
electric propulsion, hypersonics, and quantum physics. The company,
formed in 2020 through the combination of Raytheon Company and the
United Technologies Corporation aerospace businesses, is
headquartered in Arlington,
Virginia.
Conference Call on Second Quarter 2022 Financial
Results
Raytheon Technologies' financial results conference call will be
held on Tuesday, July 26, 2022 at 8:30
a.m. ET. The conference call will be webcast live on the
company's website at www.rtx.com and will be available for replay
following the call. The corresponding presentation slides will be
available for downloading prior to the call.
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 certain non-GAAP financial information.
The non-GAAP information presented provides investors with
additional useful information, but should not be considered in
isolation or as substitutes for the related GAAP measures.
Moreover, other companies may define non-GAAP measures differently,
which limits the usefulness of these measures for comparisons with
such other companies. We encourage investors to review our
financial statements and publicly-filed reports in their entirety
and not to rely on any single financial measure.
Adjusted net sales, organic sales, adjusted operating profit
(loss), adjusted net income and adjusted earnings per share ("EPS")
are non-GAAP financial measures. Adjusted net sales represents
consolidated net sales (a GAAP measure), excluding significant
items of a non-recurring and/or nonoperational nature (hereinafter
referred to as "other significant items"). Organic sales represents
consolidated net sales (a GAAP measure), excluding the impact of
foreign currency translation, acquisitions and divestitures
completed in the preceding twelve months and other significant
items. Adjusted operating profit (loss) represents operating profit
(loss) (a GAAP measure), excluding restructuring costs, acquisition
accounting adjustments and other significant items. Acquisition
accounting adjustments include the amortization of acquired
intangible assets related to acquisitions, the amortization of the
property, plant and equipment fair value adjustment acquired
through acquisitions and the amortization of customer contractual
obligations related to loss making or below market contracts
acquired.
Adjusted net income represents net income from continuing
operations (a GAAP measure), excluding restructuring costs,
acquisition accounting adjustments and other significant items.
Adjusted EPS represents diluted earnings per share from continuing
operations (a GAAP measure), excluding restructuring costs,
acquisition accounting adjustments and other significant items. For
the Business segments, when applicable, adjustments of net sales
similarly reflect continuing operations excluding other significant
items, organic sales similarly excludes the impact of foreign
currency, acquisitions and divestitures, and other significant
items, and adjustments of operating profit (loss) and operating
profit margins (also referred to as return on sales (ROS))
similarly reflect continuing operations, excluding restructuring,
acquisition accounting adjustments and other significant items.
Free cash flow is a non-GAAP financial measure that represents
cash flow from operations (a GAAP measure) less capital
expenditures. Management believes free cash flow is a useful
measure of liquidity and an additional basis for assessing RTC's
ability to fund its activities, including the financing of
acquisitions, debt service, repurchases of RTC's common stock and
distribution of earnings to shareowners.
A reconciliation of the non-GAAP measures to the corresponding
amounts prepared in accordance with GAAP appears in the tables in
this Appendix. The tables provide additional information as to the
items and amounts that have been excluded from the adjusted
measures.
When we provide our expectation for adjusted EPS and free cash
flow on a forward-looking basis, a reconciliation of the
differences between the non-GAAP expectations and the corresponding
GAAP measures (expected diluted EPS from continuing operations and
expected cash flow from operations, respectively) generally is not
available without unreasonable effort due to potentially high
variability, complexity and low visibility as to the items that
would be excluded from the GAAP measure in the relevant future
period, such as unusual gains and losses, the ultimate outcome of
pending litigation, fluctuations in foreign currency exchange
rates, the impact and timing of potential acquisitions and
divestitures, and other structural changes or their probable
significance. The variability of the excluded items may have a
significant, and potentially unpredictable, impact on our future
GAAP results.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains statements which, to the extent they
are not statements of historical or present fact, constitute
"forward-looking statements" under the securities laws. From time
to time, oral or written forward- looking statements may also be
included in other information released to the public. These
forward-looking statements are intended to provide Raytheon
Technologies Corporation ("RTC") management's current expectations
or plans for our future operating and financial performance, based
on assumptions currently believed to be valid. Forward-looking
statements can be identified by the use of words such as "believe,"
"expect," "expectations," "plans," "strategy," "prospects,"
"estimate," "project," "target," "anticipate," "will," "should,"
"see," "guidance," "outlook," "goals," "objectives," "confident,"
"on track" and other words of similar meaning. Forward- looking
statements may include, among other things, statements relating to
future sales, earnings, cash flow, results of operations, uses of
cash, share repurchases, tax payments and rates, research and
development spending, cost savings, other measures of financial
performance, potential future plans, strategies or transactions,
credit ratings and net indebtedness, other anticipated benefits to
RTC of the United Technologies Corporation ("UTC") acquisition of
Rockwell Collins in 2018, the merger (the "merger") between UTC and
Raytheon Company ("Raytheon")) or the spin-offs by UTC of Otis
Worldwide Corporation and Carrier Global Corporation into separate
independent companies (the "separation transactions"), including
estimated synergies and customer cost savings resulting from the
merger and the anticipated benefits and costs of the separation
transactions and other statements that are not solely historical
facts. All forward-looking statements involve risks, uncertainties
and other factors that may cause actual results to differ
materially from those expressed or implied in the forward-looking
statements. For those statements, we claim the protection of the
safe harbor for forward-looking statements contained in the U.S.
Private Securities Litigation Reform Act of 1995. Such risks,
uncertainties and other factors include, without limitation: (1)
the effect of changes in global economic, capital market and
political conditions in the U.S. and globally, such as from the
global sanctions and export controls with respect to Russia, and any changes therein, including
related to financial market conditions, fluctuations in commodity
prices, inflation, interest rates and foreign currency exchange
rates, disruptions in global supply chain and labor markets, and
geopolitical risks; (2) risks associated with U.S. government
sales, including changes or shifts in defense spending due to
budgetary constraints, spending cuts resulting from sequestration
or the allocation of funds to governmental responses to COVID-19, a
continuing resolution, a government shutdown, or otherwise, and
uncertain funding of programs; (3) challenges in the development,
production, delivery, support, and performance of RTC advanced
technologies and new products and services and the realization of
the anticipated benefits (including our expected returns under
customer contracts), as well as the challenges of operating in
RTC's highly- competitive industries; (4) the effect of and risks
relating to the coronavirus disease 2019 (COVID-19) pandemic on
RTC's business, supply chain, operations and the industries in
which it operates, including the decrease in global air travel, and
the timing and extent of the recovery from COVID-19; (5) risks
relating to RTC international operations from, among other things,
changes in trade policies and implementation of sanctions, foreign
currency fluctuations, economic conditions, political factors,
sales methods, and U.S. or local government regulations; (6) the
condition of the aerospace industry; (7) risks relating to RTC's
reliance on U.S. and non-U.S. suppliers and commodity markets,
including the effect of sanctions, delays and disruptions in the
delivery of materials and services to RTC or its suppliers and
price increases; (8) the scope, nature, timing and challenges of
managing acquisitions, investments, divestitures and other
transactions, including the realization of synergies and
opportunities for growth and innovation, the assumption of
liabilities and other risks and incurrence of related costs and
expenses; (9) compliance with legal, environmental, regulatory and
other requirements, including, among other things, export and
import requirements such as the International Traffic in Arms
Regulations and the Export Administration Regulations, anti-bribery
and anticorruption requirements, such as the Foreign Corrupt
Practices Act, industrial cooperation agreement obligations, and
procurement and other regulations in the U.S. and other countries
in which RTC and its businesses operate; (10) the outcome of
pending, threatened and future legal proceedings, investigations
and other contingencies, including those related to U.S. government
audits and disputes; (11) factors that could impact RTC's ability
to engage in desirable capital-raising or strategic transactions,
including its capital structure, levels of indebtedness, capital
expenditures and research and development spending, and the
availability of credit, credit market conditions and other factors;
(12) uncertainties associated with the timing and scope of future
repurchases by RTC of its common stock or declarations of cash
dividends, which may be discontinued, accelerated, suspended or
delayed at any time due to various factors, including market
conditions and the level of other investing activities and uses of
cash; (13) the risks relating to realizing expected benefits from
RTC strategic initiatives such as cost reduction, restructuring,
digital transformation and other operational initiatives; (14) the
risks relating to the integration of legacy businesses of UTC and
RTC as well as the merger, and the realization of the anticipated
benefits of those transactions; (15) risks of additional tax
exposures due to new tax legislation or other developments, in the
U.S. and other countries in which RTC and its businesses operate;
(16) the ability of RTC to attract, train and retain qualified
personnel and maintain its culture and high ethical standards, and
the ability of our personnel to continue to operate our facilities
and businesses around the world; (17) risks relating to a RTC
product safety failure or other failure affecting RTC's or its
customers' or suppliers' products or systems; (18) risks relating
to cyber-attacks on RTC's information technology infrastructure,
products, suppliers, customers and partners, threats to RTC
facilities and personnel, as well as other events outside of RTC's
control such as public health crises, damaging weather or other
acts of nature; (19) the effect of changes in accounting estimates
for our programs on our financial results; (20) the effect of
changes in pension and other postretirement plan estimates and
assumptions and contributions; (21) risks relating to an impairment
of goodwill and other intangible assets; (22) the effects of
climate change and changing climate-related regulations, customer
and market demands, products and technologies; and (23) the
intended qualification of (i) the merger as a tax-free
reorganization and (ii) the separation transactions and other
internal restructurings as tax-free to UTC and former UTC
shareowners, in each case, for U.S. federal income tax purposes.
For additional information on identifying factors that may cause
actual results to vary materially from those stated in
forward-looking statements, see the reports of RTC, UTC and
Raytheon on Forms S-4, 10-K, 10-Q and 8-K filed with or furnished
to the Securities and Exchange Commission from time to time. Any
forward-looking statement speaks only as of the date on which it is
made, and RTC assumes no obligation to update or revise such
statement, whether as a result of new information, future events or
otherwise, except as required by applicable law.
RTC-IR
|
Raytheon
Technologies Corporation
Condensed
Consolidated Statement of Operations
|
|
|
|
|
Quarter Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions, except per share amounts; shares in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net Sales
|
$
16,314
|
|
$
15,880
|
|
$
32,030
|
|
$
31,131
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales
|
12,856
|
|
12,655
|
|
25,416
|
|
25,192
|
|
Research and
development
|
698
|
|
657
|
|
1,333
|
|
1,246
|
|
Selling, general and
administrative
|
1,424
|
|
1,368
|
|
2,893
|
|
2,588
|
|
Total Costs and
Expenses
|
14,978
|
|
14,680
|
|
29,642
|
|
29,026
|
Other income,
net
|
17
|
|
82
|
|
45
|
|
190
|
Operating
profit
|
1,353
|
|
1,282
|
|
2,433
|
|
2,295
|
|
Non-service pension
income
|
(474)
|
|
(490)
|
|
(954)
|
|
(981)
|
|
Interest expense,
net
|
329
|
|
342
|
|
647
|
|
688
|
Income from continuing
operations before income taxes
|
1,498
|
|
1,430
|
|
2,740
|
|
2,588
|
|
Income tax
expense
|
160
|
|
342
|
|
276
|
|
687
|
Net income from
continuing operations
|
1,338
|
|
1,088
|
|
2,464
|
|
1,901
|
|
Less: Noncontrolling
interest in subsidiaries' earnings from continuing
operations
|
34
|
|
48
|
|
57
|
|
89
|
Income from continuing
operations attributable to common shareowners
|
1,304
|
|
1,040
|
|
2,407
|
|
1,812
|
Loss from discontinued
operations attributable to common shareowners
|
—
|
|
(8)
|
|
(19)
|
|
(27)
|
Net income attributable
to common shareowners
|
$
1,304
|
|
$
1,032
|
|
$
2,388
|
|
$
1,785
|
|
|
|
|
|
|
|
|
|
Earnings (loss) Per
Share attributable to common shareowners - Basic:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
$
0.88
|
|
$
0.69
|
|
$
1.62
|
|
$
1.20
|
|
Loss from discontinued
operations
|
—
|
|
—
|
|
(0.01)
|
|
(0.02)
|
|
Net income attributable
to common shareowners
|
$
0.88
|
|
$
0.69
|
|
$
1.61
|
|
$
1.18
|
Earnings (loss) Per
Share attributable to common shareowners - Diluted:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
$
0.88
|
|
$
0.69
|
|
$
1.61
|
|
$
1.20
|
|
Loss from discontinued
operations
|
—
|
|
(0.01)
|
|
(0.01)
|
|
(0.02)
|
|
Net income attributable
to common shareowners
|
$
0.88
|
|
$
0.68
|
|
$
1.60
|
|
$
1.18
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding:
|
|
|
|
|
|
|
|
|
Basic shares
|
1,479.2
|
|
1,506.4
|
|
1,482.9
|
|
1,508.7
|
|
Diluted
shares
|
1,489.6
|
|
1,513.5
|
|
1,493.7
|
|
1,513.7
|
Raytheon
Technologies Corporation
Segment Net Sales
and Operating Profit
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
(Unaudited)
|
|
(Unaudited)
|
|
June 30,
2022
|
|
June 30,
2021
|
|
June 30,
2022
|
|
June 30,
2021
|
(dollars in
millions)
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
Collins Aerospace
Systems
|
$
5,011
|
$
5,011
|
|
$
4,545
|
$
4,545
|
|
$
9,835
|
$
9,835
|
|
$
8,915
|
$
8,915
|
Pratt &
Whitney
|
4,969
|
4,969
|
|
4,280
|
4,280
|
|
9,498
|
9,498
|
|
8,310
|
8,310
|
Raytheon Intelligence
& Space
|
3,570
|
3,570
|
|
3,805
|
3,805
|
|
7,142
|
7,142
|
|
7,570
|
7,570
|
Raytheon Missiles &
Defense
|
3,558
|
3,558
|
|
3,985
|
3,985
|
|
7,085
|
7,085
|
|
7,778
|
7,778
|
Total
segments
|
17,108
|
17,108
|
|
16,615
|
16,615
|
|
33,560
|
33,560
|
|
32,573
|
32,573
|
Eliminations and
other
|
(794)
|
(794)
|
|
(735)
|
(735)
|
|
(1,530)
|
(1,530)
|
|
(1,442)
|
(1,442)
|
Consolidated
|
$
16,314
|
$
16,314
|
|
$
15,880
|
$
15,880
|
|
$
32,030
|
$
32,030
|
|
$
31,131
|
$
31,131
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
|
|
|
|
Collins Aerospace
Systems
|
$ 546
|
$ 617
|
|
$ 506
|
$ 518
|
|
$ 986
|
$
1,201
|
|
$ 820
|
$ 850
|
Pratt &
Whitney
|
302
|
303
|
|
112
|
96
|
|
453
|
611
|
|
132
|
136
|
Raytheon Intelligence
& Space
|
315
|
315
|
|
415
|
415
|
|
693
|
693
|
|
803
|
803
|
Raytheon Missiles &
Defense
|
348
|
348
|
|
532
|
532
|
|
735
|
735
|
|
1,028
|
1,028
|
Total
segments
|
1,511
|
1,583
|
|
1,565
|
1,561
|
|
2,867
|
3,240
|
|
2,783
|
2,817
|
Eliminations and
other
|
(47)
|
(47)
|
|
(40)
|
(40)
|
|
(81)
|
(87)
|
|
(71)
|
(71)
|
Corporate expenses and
other unallocated items
|
(42)
|
(33)
|
|
(149)
|
(89)
|
|
(178)
|
(130)
|
|
(230)
|
(140)
|
FAS/CAS operating
adjustment
|
379
|
379
|
|
425
|
425
|
|
757
|
757
|
|
848
|
848
|
Acquisition accounting
adjustments
|
(448)
|
—
|
|
(519)
|
—
|
|
(932)
|
—
|
|
(1,035)
|
—
|
Consolidated
|
$
1,353
|
$
1,882
|
|
$
1,282
|
$
1,857
|
|
$
2,433
|
$
3,780
|
|
$
2,295
|
$
3,454
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
|
|
Collins Aerospace
Systems
|
10.9 %
|
12.3 %
|
|
11.1 %
|
11.4 %
|
|
10.0 %
|
12.2 %
|
|
9.2 %
|
9.5 %
|
Pratt &
Whitney
|
6.1 %
|
6.1 %
|
|
2.6 %
|
2.2 %
|
|
4.8 %
|
6.4 %
|
|
1.6 %
|
1.6 %
|
Raytheon Intelligence
& Space
|
8.8 %
|
8.8 %
|
|
10.9 %
|
10.9 %
|
|
9.7 %
|
9.7 %
|
|
10.6 %
|
10.6 %
|
Raytheon Missiles &
Defense
|
9.8 %
|
9.8 %
|
|
13.4 %
|
13.4 %
|
|
10.4 %
|
10.4 %
|
|
13.2 %
|
13.2 %
|
Total
segment
|
8.8 %
|
9.3 %
|
|
9.4 %
|
9.4 %
|
|
8.5 %
|
9.7 %
|
|
8.5 %
|
8.6 %
|
Raytheon
Technologies Corporation
Condensed
Consolidated Balance Sheet
|
|
|
June 30,
2022
|
|
December 31,
2021
|
(dollars in
millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
4,767
|
|
$
7,832
|
Accounts receivable,
net
|
10,394
|
|
9,661
|
Contract
assets
|
11,836
|
|
11,361
|
Inventory,
net
|
10,142
|
|
9,178
|
Other assets,
current
|
4,323
|
|
4,018
|
Total Current
Assets
|
41,462
|
|
42,050
|
Customer financing
assets
|
2,675
|
|
2,848
|
Fixed assets,
net
|
14,741
|
|
14,972
|
Operating lease
right-of-use assets
|
1,866
|
|
1,958
|
Goodwill
|
53,806
|
|
54,436
|
Intangible assets,
net
|
37,562
|
|
38,516
|
Other assets
|
6,905
|
|
6,624
|
Total
Assets
|
$
159,017
|
|
$
161,404
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interest and Equity
|
|
|
|
Short-term
borrowings
|
$
113
|
|
$
134
|
Accounts
payable
|
9,732
|
|
8,751
|
Accrued employee
compensation
|
2,028
|
|
2,658
|
Other accrued
liabilities
|
12,459
|
|
10,162
|
Contract
liabilities
|
13,430
|
|
13,720
|
Long-term debt
currently due
|
26
|
|
24
|
Total Current
Liabilities
|
37,788
|
|
35,449
|
Long-term
debt
|
31,274
|
|
31,327
|
Operating lease
liabilities, non-current
|
1,593
|
|
1,657
|
Future pension and
postretirement benefit obligations
|
7,543
|
|
7,855
|
Other long-term
liabilities
|
8,791
|
|
10,417
|
Total
Liabilities
|
86,989
|
|
86,705
|
Redeemable
noncontrolling interest
|
38
|
|
35
|
Shareowners'
Equity:
|
|
|
|
Common
Stock
|
37,640
|
|
37,445
|
Treasury
Stock
|
(14,539)
|
|
(12,727)
|
Retained
earnings
|
50,271
|
|
50,265
|
Accumulated other
comprehensive loss
|
(2,931)
|
|
(1,915)
|
Total Shareowners'
Equity
|
70,441
|
|
73,068
|
Noncontrolling
interest
|
1,549
|
|
1,596
|
Total
Equity
|
71,990
|
|
74,664
|
Total Liabilities,
Redeemable Noncontrolling Interest and Equity
|
$
159,017
|
|
$
161,404
|
Raytheon
Technologies Corporation
Condensed
Consolidated Statement of Cash Flows
|
|
|
Quarter Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
$
1,338
|
|
$
1,088
|
|
$
2,464
|
|
$
1,901
|
Adjustments to
reconcile net income from continuing operations to net cash flows
provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
999
|
|
1,132
|
|
2,013
|
|
2,255
|
Deferred income tax
(benefit) provision
|
(546)
|
|
22
|
|
(1,147)
|
|
175
|
Stock compensation
cost
|
109
|
|
143
|
|
212
|
|
227
|
Net periodic pension
and other postretirement income
|
(354)
|
|
(357)
|
|
(714)
|
|
(715)
|
Change in:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(1,346)
|
|
1,092
|
|
(790)
|
|
293
|
Contract
assets
|
(306)
|
|
(246)
|
|
(525)
|
|
(557)
|
Inventory
|
(446)
|
|
(20)
|
|
(1,033)
|
|
(133)
|
Other current
assets
|
(72)
|
|
(65)
|
|
(353)
|
|
(258)
|
Accounts payable and
accrued liabilities
|
2,425
|
|
(1,271)
|
|
2,109
|
|
(733)
|
Contract
liabilities
|
(259)
|
|
11
|
|
(309)
|
|
(45)
|
Other operating
activities, net
|
(256)
|
|
(203)
|
|
(165)
|
|
(361)
|
Net cash flows
provided by operating activities from continuing
operations
|
1,286
|
|
1,326
|
|
1,762
|
|
2,049
|
Investing
Activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(479)
|
|
(360)
|
|
(918)
|
|
(747)
|
Investments in
businesses
|
—
|
|
—
|
|
—
|
|
(6)
|
Dispositions of
businesses, net of cash transferred
|
53
|
|
25
|
|
88
|
|
1,074
|
Customer financing
assets receipts (payments), net
|
12
|
|
(21)
|
|
(7)
|
|
(102)
|
Increase in
collaboration intangible assets
|
(41)
|
|
(28)
|
|
(91)
|
|
(60)
|
(Payments) receipts
from settlements of derivative contracts, net
|
(118)
|
|
1
|
|
(151)
|
|
50
|
Other investing
activities, net
|
(45)
|
|
40
|
|
(57)
|
|
30
|
Net cash flows (used
in) provided by investing activities from continuing
operations
|
(618)
|
|
(343)
|
|
(1,136)
|
|
239
|
Financing
Activities:
|
|
|
|
|
|
|
|
Repayment of long-term
debt
|
(2)
|
|
(21)
|
|
(2)
|
|
(307)
|
Change in short-term
borrowings, net
|
(23)
|
|
(38)
|
|
(17)
|
|
(51)
|
Dividends paid on
Common Stock
|
(798)
|
|
(756)
|
|
(1,543)
|
|
(1,461)
|
Repurchase of Common
Stock
|
(1,036)
|
|
(632)
|
|
(1,779)
|
|
(1,007)
|
Net transfers to
discontinued operations
|
—
|
|
(19)
|
|
—
|
|
(24)
|
Other financing
activities, net
|
(23)
|
|
(109)
|
|
(286)
|
|
(269)
|
Net cash flows used in
financing activities from continuing operations
|
(1,882)
|
|
(1,575)
|
|
(3,627)
|
|
(3,119)
|
Discontinued
Operations:
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
—
|
|
(19)
|
|
—
|
|
(24)
|
Net cash used in
investing activities
|
—
|
|
—
|
|
—
|
|
—
|
Net cash provided by
financing activities
|
—
|
|
19
|
|
—
|
|
24
|
Net cash used in
discontinued operations
|
—
|
|
—
|
|
—
|
|
—
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(35)
|
|
56
|
|
(20)
|
|
79
|
Net decrease in cash,
cash equivalents and restricted cash
|
(1,249)
|
|
(536)
|
|
(3,021)
|
|
(752)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
6,081
|
|
8,616
|
|
7,853
|
|
8,832
|
Cash, cash equivalents
and restricted cash, end of period
|
4,832
|
|
8,080
|
|
4,832
|
|
8,080
|
Less: Restricted cash,
included in Other assets
|
65
|
|
29
|
|
65
|
|
29
|
Cash and cash
equivalents, end of period
|
$
4,767
|
|
$
8,051
|
|
$
4,767
|
|
$
8,051
|
Raytheon
Technologies Corporation
Reconciliation of
Adjusted (Non-GAAP) Results
Adjusted Sales,
Adjusted Operating Profit & Operating Profit
Margin
|
|
|
Quarter Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions - Income (Expense))
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Collins Aerospace
Systems
|
|
|
|
|
|
|
|
Net sales
|
$ 5,011
|
|
$ 4,545
|
|
$ 9,835
|
|
$ 8,915
|
Operating
profit
|
$
546
|
|
$
506
|
|
$
986
|
|
$
820
|
Restructuring
|
(2)
|
|
(12)
|
|
(5)
|
|
(30)
|
Impairment charges and
reserve adjustments related to Russia sanctions
(1)
|
—
|
|
—
|
|
(141)
|
|
—
|
Charges associated
with disposition of businesses
|
(69)
|
|
—
|
|
(69)
|
|
—
|
Adjusted operating
profit
|
$
617
|
|
$
518
|
|
$ 1,201
|
|
$
850
|
Adjusted operating
profit margin
|
12.3 %
|
|
11.4 %
|
|
12.2 %
|
|
9.5 %
|
Pratt &
Whitney
|
|
|
|
|
|
|
|
Net sales
|
$ 4,969
|
|
$ 4,280
|
|
$ 9,498
|
|
$ 8,310
|
Operating
profit
|
$
302
|
|
$
112
|
|
$
453
|
|
$
132
|
Restructuring
|
(1)
|
|
16
|
|
(3)
|
|
(4)
|
Impairment charges and
reserve adjustments related to Russia sanctions
(1)
|
—
|
|
—
|
|
(155)
|
|
—
|
Adjusted operating
profit
|
$
303
|
|
$
96
|
|
$
611
|
|
$
136
|
Adjusted operating
profit margin
|
6.1 %
|
|
2.2 %
|
|
6.4 %
|
|
1.6 %
|
Raytheon
Intelligence & Space
|
|
|
|
|
|
|
|
Net sales
|
$ 3,570
|
|
$ 3,805
|
|
$ 7,142
|
|
$ 7,570
|
Operating
profit
|
$
315
|
|
$
415
|
|
$
693
|
|
$
803
|
Adjusted operating
profit margin
|
8.8 %
|
|
10.9 %
|
|
9.7 %
|
|
10.6 %
|
Raytheon Missiles
& Defense
|
|
|
|
|
|
|
|
Net sales
|
$ 3,558
|
|
$ 3,985
|
|
$ 7,085
|
|
$ 7,778
|
Operating
profit
|
$
348
|
|
$
532
|
|
$
735
|
|
$ 1,028
|
Adjusted operating
profit margin
|
9.8 %
|
|
13.4 %
|
|
10.4 %
|
|
13.2 %
|
Eliminations and
Other
|
|
|
|
|
|
|
|
Net sales
|
$
(794)
|
|
$
(735)
|
|
$
(1,530)
|
|
$
(1,442)
|
Operating
loss
|
$
(47)
|
|
$
(40)
|
|
$
(81)
|
|
$
(71)
|
Impairment charges and
reserve adjustments related to Russia sanctions
(1)
|
—
|
|
—
|
|
6
|
|
—
|
Adjusted operating
loss
|
$
(47)
|
|
$
(40)
|
|
$
(87)
|
|
$
(71)
|
Corporate expenses
and other unallocated items
|
|
|
|
|
|
|
|
Operating
loss
|
$
(42)
|
|
$
(149)
|
|
$
(178)
|
|
$
(230)
|
Restructuring
|
(9)
|
|
(60)
|
|
(48)
|
|
(65)
|
Costs associated with
the separation of the commercial businesses
|
—
|
|
—
|
|
—
|
|
(8)
|
Transaction and
integration costs associated with the Raytheon Merger
|
—
|
|
—
|
|
—
|
|
(17)
|
Adjusted operating
loss
|
$
(33)
|
|
$
(89)
|
|
$
(130)
|
|
$
(140)
|
FAS/CAS Operating
Adjustment
|
|
|
|
|
|
|
|
Operating
profit
|
$
379
|
|
$
425
|
|
$
757
|
|
$
848
|
Acquisition
Accounting Adjustments
|
|
|
|
|
|
|
|
Operating
loss
|
$
(448)
|
|
$
(519)
|
|
$
(932)
|
|
$
(1,035)
|
Acquisition accounting
adjustments
|
(448)
|
|
(519)
|
|
(932)
|
|
(1,035)
|
Adjusted operating
profit
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
RTC
Consolidated
|
|
|
|
|
|
|
|
Net sales
|
$
16,314
|
|
$
15,880
|
|
$
32,030
|
|
$
31,131
|
Operating
profit
|
$ 1,353
|
|
$ 1,282
|
|
$ 2,433
|
|
$ 2,295
|
Restructuring
|
(12)
|
|
(56)
|
|
(56)
|
|
(99)
|
Acquisition accounting
adjustments
|
(448)
|
|
(519)
|
|
(932)
|
|
(1,035)
|
Total significant
non-recurring and non-operational items included in Operating
profit above
|
(69)
|
|
—
|
|
(359)
|
|
(25)
|
Adjusted operating
profit
|
$ 1,882
|
|
$ 1,857
|
|
$ 3,780
|
|
$ 3,454
|
|
|
(1)
|
Total significant
non-recurring and non-operational items in the table above for the
six months ended June 30, 2022 includes a net pre-tax charge of
$0.3 billion related to the impact of the sanctions imposed upon
Russia in response to the Russia-Ukraine conflict, primarily
consisting of charges related to increased estimates for credit
losses on both our accounts receivables and contract assets,
inventory reserves, impairment of customer financing assets for
products under lease and contract fulfillment costs, and
recognition of supplier obligations. Management has determined that
these items are directly attributable to the sanctions, incremental
to similar costs (or income) incurred for reasons other than the
sanctions and not expected to recur, and therefore, not indicative
of the Company's ongoing operational performance.
|
Raytheon
Technologies Corporation
Reconciliation of
Adjusted (Non-GAAP) Results
Adjusted Income from
Continuing Operations, Earnings Per Share, and Effective Tax
Rate
|
|
|
Quarter Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions - Income (Expense))
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Income from
continuing operations attributable to common
shareowners
|
$ 1,304
|
|
$ 1,040
|
|
$ 2,407
|
|
$ 1,812
|
Total
Restructuring
|
(12)
|
|
(56)
|
|
(56)
|
|
(99)
|
Total Acquisition
accounting adjustments
|
(448)
|
|
(519)
|
|
(932)
|
|
(1,035)
|
Total significant
non-recurring and non-operational items included in Operating
profit
|
(69)
|
|
—
|
|
(359)
|
|
(25)
|
Significant
non-recurring and non-operational items included in Non-service
Pension Income
|
|
|
|
|
|
|
|
Non-service pension
restructuring
|
—
|
|
—
|
|
5
|
|
—
|
Tax effect of
restructuring and significant non-recurring and non-operational
items above
|
111
|
|
123
|
|
293
|
|
257
|
Significant
non-recurring and non-operational items included in Income Tax
Expense
|
|
|
|
|
|
|
|
Tax impact from UK
rate change
|
—
|
|
(73)
|
|
—
|
|
(73)
|
Tax impact from
business disposal
|
—
|
|
—
|
|
—
|
|
(148)
|
Significant
non-recurring and non-operational items included in Noncontrolling
Interest
|
|
|
|
|
|
|
|
Noncontrolling
interest share of certain Russia sanction charges
|
—
|
|
—
|
|
11
|
|
—
|
Less: Impact on net
income attributable to common shareowners
|
(418)
|
|
(525)
|
|
(1,038)
|
|
(1,123)
|
Adjusted income from
continuing operations attributable to common
shareowners
|
$ 1,722
|
|
$ 1,565
|
|
$ 3,445
|
|
$ 2,935
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
$
0.88
|
|
$
0.69
|
|
$
1.61
|
|
$
1.20
|
Impact on Diluted
Earnings Per Share
|
(0.28)
|
|
(0.34)
|
|
(0.70)
|
|
(0.74)
|
Adjusted Diluted
Earnings Per Share
|
$
1.16
|
|
$
1.03
|
|
$
2.31
|
|
$
1.94
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
10.7 %
|
|
23.9 %
|
|
10.1 %
|
|
26.5 %
|
Impact on Effective
Tax Rate
|
(2.7) %
|
|
4.3 %
|
|
(3.8) %
|
|
7.2 %
|
Adjusted Effective
Tax Rate
|
13.4 %
|
|
19.6 %
|
|
13.9 %
|
|
19.3 %
|
Raytheon
Technologies Corporation
Free Cash Flow
Reconciliation
|
|
|
Quarter Ended
June 30,
|
|
(Unaudited)
|
(dollars in
millions)
|
2022
|
|
2021
|
Net cash flows provided
by operating activities from continuing operations
|
$
1,286
|
|
$
1,326
|
Capital
expenditures
|
(479)
|
|
(360)
|
Free cash
flow
|
$
807
|
|
$
966
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
(dollars in
millions)
|
2022
|
|
2021
|
Net cash flows provided
by operating activities from continuing operations
|
$
1,762
|
|
$
2,049
|
Capital
expenditures
|
(918)
|
|
(747)
|
Free cash
flow
|
$
844
|
|
$
1,302
|
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SOURCE Raytheon Technologies