WALTHAM, Mass., Oct. 27,
2020 /PRNewswire/ -- Raytheon Technologies Corporation (NYSE: RTX)
reported third quarter 2020 results.
- Sales of $14.7 billion; Adjusted
sales of $15.0 billion
- GAAP EPS from continuing operations of $0.10, which included $0.48 of net significant and/or non-recurring
charges and acquisition accounting adjustments
- Adjusted EPS of $0.58
- Operating cash flow from continuing operations of $1.6 billion
- Free cash flow of $1.2
billion
- Achieved ~$700 million in cost
reduction and ~$1.9 billion in cash
conservation actions
- Robust Defense backlog of $70.2
billion
"We delivered sales that were in line with our expectations as
well as better than expected adjusted EPS and free cash flow during
the quarter as we achieved approximately $700 million of cost reduction and $1.9 billion of cash conservation actions, which
was significantly better than our plan. We are delivering on our
commitments to customers while taking the necessary actions that
will equip us to weather the current environment and emerge as a
stronger business," said Raytheon Technologies Chief Executive
Officer Greg Hayes. "The long-term
business fundamentals and earnings power of Raytheon Technologies
remain strong with our balanced portfolio, leading businesses and
advanced technologies that combine the best of commercial aerospace
and defense."
Raytheon Technologies reported third quarter sales of
$14.7 billion and adjusted sales of
$15.0 billion. GAAP EPS from
continuing operations was $0.10 and
included $0.48 of net significant
and/or non-recurring charges and acquisition accounting
adjustments. This includes a net gain on dispositions of
$0.17 per share, which was more than
offset by $0.27 of acquisition
accounting adjustments primarily related to intangible
amortization, $0.26 of charges due to
the current economic environment primarily driven by the COVID-19
pandemic, and $0.12 of restructuring.
Adjusted EPS was $0.58.
The company recorded net income from continuing operations in
the third quarter of $151 million,
which included $721 million of net
significant and/or nonrecurring charges and acquisition accounting
adjustments. Adjusted net income was $872
million. Operating cash flow from continuing operations in
the third quarter was $1.6 billion
and was better than expected primarily due to the timing of
customer collections and the accelerated execution on cash
conservation actions. Capital expenditures were $389 million, resulting in free cash flow of
$1.2 billion. Free cash flow included
approximately $600 million of merger
costs, restructuring and tax payments on divestitures. This
quarter's performance includes approximately $700 million of cost savings and approximately
$1.9 billion of cash conservation
actions, reflecting substantial progress on our previously stated
goal of $2 billion in cost savings
and $4 billion in cash conservation
actions by the end of 2020.
Summary Financial
Results – Continuing Operations
|
($ in millions,
except EPS)
|
3rd Quarter
2020
|
Reported
|
|
|
Sales
|
$
|
14,747
|
|
Net Income
|
$
|
151
|
|
EPS
|
$
|
0.10
|
|
|
|
|
Adjusted
|
|
|
Sales
|
$
|
15,047
|
|
Net Income
|
$
|
872
|
|
EPS
|
$
|
0.58
|
|
|
|
|
Operating Cash Flow
from Continuing Operations
|
$
|
1,622
|
|
Free Cash
Flow
|
$
|
1,233
|
|
|
|
|
See "Use and
Definitions of Non-GAAP Financial Measures" below for information
regarding non-GAAP financial measures.
|
Bookings and Orders
Backlog at the end of the third
quarter was $152.3 billion, of which
$82.1 billion was from commercial
aerospace and $70.2 billion was from defense.
Notable defense bookings during the quarter included:
- $928 million of classified
bookings at Raytheon Intelligence & Space (RIS)
- $473 million of F-135 bookings at
Pratt & Whitney
- $320 million award for a
multi-year Extravehicular Space Operations Contract (ESOC) to
provide services, upgrades and sustainment in support of NASA's
Extra Vehicular Activity (EVA) on the International Space Station
at Collins Aerospace
- $186 million on the Army
Navy/Transportable Radar Surveillance-Model 2 (AN/TPY-2) radar
program for the Kingdom of Saudi
Arabia (KSA) at Raytheon Missiles & Defense (RMD)
- $176 million to perform
operations and sustainment for the U.S. Air Force's Launch and Test
Range System (LTRS) at RIS
Segment Results
The company's reportable segments are
Collins Aerospace, Pratt & Whitney, Raytheon Intelligence &
Space (RIS) and Raytheon Missiles & Defense (RMD). In
connection with the merger, the company revised its segment
presentation. Prior periods have been revised to reflect the
current presentation. Refer to the accompanying tables for further
details.
Collins
Aerospace
|
|
3rd
Quarter
|
|
Nine
Months
|
($ in
millions)
|
2020
|
2019
|
%
Change
|
|
2020
|
2019
|
%
Change
|
Reported
|
|
|
|
|
|
|
|
Sales
|
$
|
4,274
|
|
$
|
6,495
|
|
(34)
|
%
|
|
$
|
14,914
|
|
$
|
19,584
|
|
(24)
|
%
|
Operating
Profit
|
$
|
526
|
|
$
|
1,259
|
|
(58)
|
%
|
|
$
|
1,455
|
|
$
|
3,499
|
|
(58)
|
%
|
ROS
|
12.3
|
%
|
19.4
|
%
|
|
|
9.8
|
%
|
17.9
|
%
|
|
|
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
|
|
Sales
|
$
|
4,278
|
|
$
|
6,495
|
|
(34)
|
%
|
|
$
|
15,036
|
|
$
|
19,584
|
|
(23)
|
%
|
Operating
Profit
|
$
|
73
|
|
$
|
1,286
|
|
(94)
|
%
|
|
$
|
1,381
|
|
$
|
3,788
|
|
(64)
|
%
|
ROS
|
1.7
|
%
|
19.8
|
%
|
|
|
9.2
|
%
|
19.3
|
%
|
|
|
Note: Prior
periods have been revised to reflect the current segment
presentation which excludes acquisition accounting adjustments and
includes additional corporate expense allocations.
|
Collins Aerospace had third quarter 2020 adjusted sales of
$4,278 million, down 34 percent
versus the prior year. Commercial OE was down 44 percent and
commercial aftermarket was down 52 percent, while military was up 4
percent. Excluding the impact of the Military GPS and Space ISR
divestitures and FX, military was up 8 percent in the quarter. The
decrease in commercial sales was driven primarily by the current
environment which has resulted in lower flight hours, aircraft
fleet utilization and commercial OEM deliveries, as well as the
impact of the 737 MAX grounding and lower ADS-B mandate volume.
This was slightly offset by higher sales across key military
platforms.
Collins Aerospace recorded adjusted operating profit of
$73 million in the quarter, down 94
percent versus the prior year. The decrease in adjusted operating
profit was driven by lower commercial aerospace OEM and aftermarket
sales volume. This was partially offset by cost reduction actions
and gross margin drop through on higher military volume.
Pratt &
Whitney
|
|
3rd
Quarter
|
|
Nine
Months
|
($ in
millions)
|
2020
|
2019
|
%
Change
|
|
2020
|
2019
|
%
Change
|
Reported
|
|
|
|
|
|
|
|
Sales
|
$
|
3,494
|
|
$
|
5,285
|
|
(34)
|
%
|
|
$
|
12,334
|
|
$
|
15,257
|
|
(19)
|
%
|
Operating
Profit
|
$
|
(615)
|
|
$
|
520
|
|
(218)
|
%
|
|
$
|
(597)
|
|
$
|
1,447
|
|
(141)
|
%
|
ROS
|
(17.6)
|
%
|
9.8
|
%
|
|
|
(4.8)
|
%
|
9.5
|
%
|
|
|
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
|
|
Sales
|
$
|
3,790
|
|
$
|
5,285
|
|
(28)
|
%
|
|
$
|
12,728
|
|
$
|
15,257
|
|
(17)
|
%
|
Operating
Profit
|
$
|
(43)
|
|
$
|
520
|
|
(108)
|
%
|
|
$
|
321
|
|
$
|
1,464
|
|
(78)
|
%
|
ROS
|
(1.1)
|
%
|
9.8
|
%
|
|
|
2.5
|
%
|
9.6
|
%
|
|
|
Note: Prior
periods have been revised to reflect the current segment
presentation which excludes acquisition accounting adjustments and
includes additional corporate expense allocations.
|
Pratt & Whitney had third quarter 2020 adjusted sales of
$3,790 million, down 28 percent
versus the prior year. Commercial OE was down 30 percent and
commercial aftermarket was down 51 percent, while military was up
11 percent. The decrease in commercial sales was primarily due to a
significant reduction in shop visits and related spare part sales
and commercial engine deliveries principally driven by the current
environment. This was slightly offset by higher F135 engine sales,
F117 overhauls and aftermarket growth on multiple fighter jet
platforms.
Pratt & Whitney recorded an adjusted operating loss of
$43 million in the quarter, down 108
percent versus the prior year. The decrease in adjusted operating
profit was primarily driven by lower commercial aerospace sales
volume and unfavorable mix. This was partially offset by cost
reduction actions and gross margin drop through on higher military
volume.
Raytheon
Intelligence & Space
|
|
3rd
Quarter
|
|
Nine
Months
|
($ in
millions)
|
2020
|
|
2020
|
Reported
|
|
|
|
Sales
|
$
|
3,674
|
|
|
$
|
6,988
|
|
Operating
Profit
|
$
|
348
|
|
|
$
|
659
|
|
ROS
|
9.5
|
%
|
|
9.4
|
%
|
|
|
|
|
Adjusted
|
|
|
|
Sales
|
$
|
3,674
|
|
|
$
|
6,988
|
|
Operating
Profit
|
$
|
348
|
|
|
$
|
659
|
|
ROS
|
9.5
|
%
|
|
9.4
|
%
|
|
Note: Nine months
2020 reported and adjusted results include RIS since the merger
date of April 3, 2020. Reported and adjusted numbers do not include
RIS pre-merger stub period from March 30, 2020 to April 2, 2020
which had an estimated $200 million of sales and $20 million of
operating profit.
|
|
RIS had third quarter adjusted sales of $3,674 million and adjusted operating profit of
$348 million.
Raytheon Missiles
& Defense
|
|
3rd
Quarter
|
|
Nine
Months
|
($ in
millions)
|
2020
|
|
2020
|
Reported
|
|
|
|
Sales
|
$
|
3,794
|
|
|
$
|
7,384
|
|
Operating
Profit
|
$
|
453
|
|
|
$
|
850
|
|
ROS
|
11.9
|
%
|
|
11.5
|
%
|
|
|
|
|
Adjusted
|
|
|
|
Sales
|
$
|
3,794
|
|
|
$
|
7,384
|
|
Operating
Profit
|
$
|
453
|
|
|
$
|
850
|
|
ROS
|
11.9
|
%
|
|
11.5
|
%
|
|
|
|
|
Note: Nine months
2020 reported and adjusted results include RMD since the merger
date of April 3, 2020. Reported and adjusted numbers do not include
RMD pre-merger stub period from March 30, 2020 to April 2, 2020
which had an estimated $200 million of sales and $25 million of
operating profit.
|
|
RMD had third quarter adjusted sales of $3,794 million and adjusted operating profit of
$453 million.
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
Waltham, Massachusetts.
Conference Call on the Third Quarter 2020 Financial
Results
Raytheon Technologies' financial results conference
call will be held on Tuesday, October 27, 2020 at 8:30 a.m. ET. The dial-in number for the
conference call will be (866) 219-7829 in the U.S. or (478)
205-0667 outside of the U.S. The passcode is 3847687. The
conference call will also be audiocast on the Internet at
www.rtx.com/investors. Individuals may listen to the call and
download charts that will be used during the call. These charts
will be available for printing prior to the call.
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 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, adjusted earnings per share ("EPS"),
adjusted diluted weighted average shares outstanding, and the
adjusted effective tax rate are non-GAAP financial measures.
Adjusted net sales represents consolidated net sales from
continuing operations (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 income from
continuing operations (a GAAP measure), excluding restructuring
costs, acquisition accounting adjustments and other significant
items. 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.
Adjusted diluted weighted average shares outstanding represents
diluted weighted average shares outstanding (a GAAP measure),
including stock awards which were anti-dilutive during the nine
months ended September 30, 2020 as a
result of the net loss from operations. The adjusted effective tax
rate represents the effective tax rate (a GAAP measure), excluding
the tax effect of 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, and
adjustments of operating profit and margins 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 free cash flow on a
forward-looking basis, a reconciliation of the differences between
the non-GAAP expectations and the corresponding GAAP measures
(expected cash flow from operations) 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's ("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," "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 rates, R&D spend, other measures of financial
performance, potential future plans, strategies or transactions,
credit ratings and net indebtedness, other anticipated benefits to
RTC of United Technologies Corporation's ("UTC") Rockwell Collins
acquisition, the merger between UTC and Raytheon Company
("Raytheon", and such merger, the "merger") 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 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 economic
conditions in the industries and markets in which RTC operates in
the U.S. and globally and any changes therein, including financial
market conditions, fluctuations in commodity prices, interest rates
and foreign currency exchange rates, levels of end market demand in
both the commercial and defense segments of the aerospace industry,
levels of air travel, financial condition of commercial airlines,
and the impact of pandemic health issues (including COVID-19 and
its effects, among other things, on global supply, demand and
distribution capabilities as the COVID-19 outbreak continues and
results in an increasingly prolonged period of disruption to air
travel and commercial activities generally, and significant
restrictions and limitations on businesses, particularly within the
aerospace and commercial airlines industries) aviation safety
concerns, weather conditions and natural disasters, the financial
condition of our customers and suppliers, and the 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 government shutdown, or otherwise, and uncertain
funding of programs); (2) challenges in the development,
production, delivery, support, performance and realization of the
anticipated benefits (including our expected returns under customer
contracts) of advanced technologies and new products and services;
(3) the scope, nature, impact or timing of acquisition and
divestiture activity, including among other things the integration
of UTC's and Raytheon's businesses or the integration of RTC with
other businesses and realization of synergies and opportunities for
growth and innovation and incurrence of related costs and expenses;
(4) RTC's levels of indebtedness, capital spending and research and
development spending; (5) future availability of credit and factors
that may affect such availability, including credit market
conditions and our capital structure; (6) the timing and scope of
future repurchases by RTC of its common stock, which have been
suspended through the end of the calendar year and may continue to
be suspended, or discontinued or delayed, at any time due to
various factors, including market conditions and the level of other
investing activities and uses of cash; (7) delays and disruption in
delivery of materials and services from suppliers; (8) company and
customer-directed cost reduction efforts and restructuring costs
and savings and other consequences thereof (including the potential
termination of U.S. government contracts and performance under
undefinitized contract awards and the potential inability to
recover termination costs); (9) new business and investment
opportunities; (10) the ability to realize the intended benefits of
organizational changes; (11) the anticipated benefits of
diversification and balance of operations across product lines,
regions and industries; (12) the outcome of legal proceedings,
investigations and other contingencies; (13) pension plan
assumptions and future contributions; (14) the impact of the
negotiation of collective bargaining agreements and labor disputes;
(15) the effect of changes in political conditions in the U.S. and
other countries in which RTC and its businesses operate, including
a change in the Administration or change in the makeup of Congress
following the outcome of the November
2020 elections that may impact, among other things,
regulatory approvals, the effect of changes in U.S. trade policies
or the U.K.'s withdrawal from the European Union, on general market
conditions, global trade policies and currency exchange rates in
the near term and beyond; (16) the effect of changes in tax
(including U.S. tax reform enacted on December 22, 2017, which is commonly referred to
as the Tax Cuts and Jobs Act of 2017), environmental, regulatory
and other laws and regulations (including, among other things,
export and import requirements such as the International Traffic in
Arms Regulations and the Export Administration Regulations,
anti-bribery and anti-corruption requirements, including 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; (17) the
possibility that the anticipated benefits from the combination of
UTC's and Raytheon's businesses (including ongoing integration
activities from historic UTC and Raytheon acquisitions prior to the
merger) cannot be realized in full or at all or may take longer to
realize than expected, or the possibility that costs or
difficulties related to the integration of UTC's businesses with
Raytheon's will be greater than expected or may not result in the
achievement of estimated synergies within the contemplated time
frame or at all; (18) the ability of RTC to retain and hire key
personnel and the ability of our personnel to continue to operate
our facilities and businesses around the world in light of, among
other factors, the COVID-19 outbreak; (19) the expected benefits to
RTC of the separation transactions; (20) the intended qualification
of (i) the merger as a tax-free reorganization and (ii) the
separation transactions as tax-free to UTC and former UTC
shareowners, in each case, for U.S. federal income tax purposes;
and (21) the risk that dissynergy costs incurred in connection with
the separation transactions will exceed legacy UTC's or legacy
Raytheon's estimates. 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
Media Contact
860.493.4364
Investor Contact
781.522.5123
Raytheon
Technologies Corporation
Condensed
Consolidated Statement of Operations
|
|
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions, except per share amounts; shares in
millions)
|
2020
|
|
2019(1)
|
|
2020(1)
|
|
2019(1)
|
Net Sales
|
$
|
14,747
|
|
|
$
|
11,373
|
|
|
$
|
40,168
|
|
|
$
|
33,655
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales
|
13,004
|
|
|
8,509
|
|
|
33,790
|
|
|
25,482
|
|
|
Research and
development
|
642
|
|
|
592
|
|
|
1,872
|
|
|
1,784
|
|
|
Selling, general and
administrative
|
1,401
|
|
|
902
|
|
|
4,189
|
|
|
2,672
|
|
|
Total Costs and
Expenses
|
15,047
|
|
|
10,003
|
|
|
39,851
|
|
|
29,938
|
|
Goodwill
impairment
|
—
|
|
|
—
|
|
|
(3,183)
|
|
|
—
|
|
Other income,
net
|
734
|
|
|
60
|
|
|
835
|
|
|
241
|
|
Operating profit
(loss)
|
434
|
|
|
1,430
|
|
|
(2,031)
|
|
|
3,958
|
|
|
Non-service pension
(income) expense
|
(253)
|
|
|
(289)
|
|
|
(658)
|
|
|
(681)
|
|
|
Interest expense,
net
|
350
|
|
|
402
|
|
|
1,017
|
|
|
1,174
|
|
Income (loss) from
continuing operations before income taxes
|
337
|
|
|
1,317
|
|
|
(2,390)
|
|
|
3,465
|
|
|
Income tax
expense
|
152
|
|
|
306
|
|
|
753
|
|
|
465
|
|
Net income (loss)
from continuing operations
|
185
|
|
|
1,011
|
|
|
(3,143)
|
|
|
3,000
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings
from continuing operations
|
34
|
|
|
53
|
|
|
112
|
|
|
147
|
|
Income (loss) from
continuing operations attributable to
common shareowners
|
151
|
|
|
958
|
|
|
(3,255)
|
|
|
2,853
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations
|
13
|
|
|
1,071
|
|
|
(219)
|
|
|
3,185
|
|
|
Income tax (benefit)
expense from discontinued operations
|
(100)
|
|
|
825
|
|
|
137
|
|
|
1,504
|
|
|
Income (loss) from
discontinued operations, net of tax
|
113
|
|
|
246
|
|
|
(356)
|
|
|
1,681
|
|
|
Less: Noncontrolling
interest in subsidiaries' earnings
from discontinued operations
|
—
|
|
|
56
|
|
|
43
|
|
|
140
|
|
Income (loss) from
discontinued operations attributable to
common
shareowners
|
113
|
|
|
190
|
|
|
(399)
|
|
|
1,541
|
|
Net income (loss)
attributable to common shareowners
|
$
|
264
|
|
|
$
|
1,148
|
|
|
$
|
(3,654)
|
|
|
$
|
4,394
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per
Share attributable to common shareowners -
Basic:
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
0.10
|
|
|
$
|
1.12
|
|
|
$
|
(2.48)
|
|
|
$
|
3.34
|
|
|
Income (loss) from
discontinued operations
|
0.08
|
|
|
0.22
|
|
|
(0.30)
|
|
|
1.80
|
|
|
Net income (loss)
attributable to common shareowners
|
$
|
0.17
|
|
|
$
|
1.34
|
|
|
$
|
(2.79)
|
|
|
$
|
5.14
|
|
Earnings (Loss) Per
Share attributable to common shareowners -
Diluted:
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
0.10
|
|
|
$
|
1.11
|
|
|
$
|
(2.48)
|
|
|
$
|
3.31
|
|
|
Income (loss) from
discontinued operations
|
0.08
|
|
|
0.22
|
|
|
(0.30)
|
|
|
1.78
|
|
|
Net income (loss)
attributable to common shareowners
|
$
|
0.17
|
|
|
$
|
1.33
|
|
|
$
|
(2.79)
|
|
|
$
|
5.09
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
shares
|
1,511.5
|
|
|
855.1
|
|
|
1,311.3
|
|
|
854.2
|
|
|
Diluted
shares
|
1,514.2
|
|
|
864.1
|
|
|
1,311.3
|
|
|
862.9
|
|
|
|
(1)
|
As a result of the
Separation Transactions and the Distributions we have reclassified
prior year amounts for Otis and Carrier as discontinued
operations.
|
Raytheon
Technologies Corporation
Segment Net Sales
and Operating Profit
|
|
|
Quarter
Ended
|
|
Nine Months
Ended
|
|
(Unaudited)
|
|
(Unaudited)
|
|
September 30,
2020
|
|
September 30,
2019(1)
|
|
September 30,
2020(1)
|
|
September 30,
2019(1)
|
(dollars in
millions)
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
Collins Aerospace
Systems
|
$
|
4,274
|
|
$
|
4,278
|
|
|
$
|
6,495
|
|
$
|
6,495
|
|
|
$
|
14,914
|
|
$
|
15,036
|
|
|
$
|
19,584
|
|
$
|
19,584
|
|
Pratt &
Whitney
|
$
|
3,494
|
|
$
|
3,790
|
|
|
$
|
5,285
|
|
$
|
5,285
|
|
|
$
|
12,334
|
|
$
|
12,728
|
|
|
$
|
15,257
|
|
$
|
15,257
|
|
Raytheon Intelligence
& Space
|
$
|
3,674
|
|
$
|
3,674
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
6,988
|
|
$
|
6,988
|
|
|
$
|
—
|
|
$
|
—
|
|
Raytheon Missiles
& Defense
|
$
|
3,794
|
|
$
|
3,794
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
7,384
|
|
$
|
7,384
|
|
|
$
|
—
|
|
$
|
—
|
|
Total
segments
|
$
|
15,236
|
|
$
|
15,536
|
|
|
$
|
11,780
|
|
$
|
11,780
|
|
|
$
|
41,620
|
|
$
|
42,136
|
|
|
$
|
34,841
|
|
$
|
34,841
|
|
Eliminations and
other
|
$
|
(489)
|
|
$
|
(489)
|
|
|
$
|
(407)
|
|
$
|
(407)
|
|
|
$
|
(1,452)
|
|
$
|
(1,452)
|
|
|
$
|
(1,186)
|
|
$
|
(1,186)
|
|
Consolidated
|
$
|
14,747
|
|
$
|
15,047
|
|
|
$
|
11,373
|
|
$
|
11,373
|
|
|
$
|
40,168
|
|
$
|
40,684
|
|
|
$
|
33,655
|
|
$
|
33,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
Collins Aerospace
Systems
|
$
|
526
|
|
$
|
73
|
|
|
$
|
1,259
|
|
$
|
1,286
|
|
|
$
|
1,455
|
|
$
|
1,381
|
|
|
$
|
3,499
|
|
$
|
3,788
|
|
Pratt &
Whitney
|
$
|
(615)
|
|
$
|
(43)
|
|
|
$
|
520
|
|
$
|
520
|
|
|
$
|
(597)
|
|
$
|
321
|
|
|
$
|
1,447
|
|
$
|
1,464
|
|
Raytheon Intelligence
& Space
|
$
|
348
|
|
$
|
348
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
659
|
|
$
|
659
|
|
|
$
|
—
|
|
$
|
—
|
|
Raytheon Missiles
& Defense
|
$
|
453
|
|
$
|
453
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
850
|
|
$
|
850
|
|
|
$
|
—
|
|
$
|
—
|
|
Total
segments
|
$
|
712
|
|
$
|
831
|
|
|
$
|
1,779
|
|
$
|
1,806
|
|
|
$
|
2,367
|
|
$
|
3,211
|
|
|
$
|
4,946
|
|
$
|
5,252
|
|
Eliminations and
other
|
$
|
(51)
|
|
$
|
(28)
|
|
|
$
|
(46)
|
|
$
|
(46)
|
|
|
$
|
(104)
|
|
$
|
(80)
|
|
|
$
|
(115)
|
|
$
|
(115)
|
|
Corporate expenses
and
other unallocated items
|
$
|
(84)
|
|
$
|
(10)
|
|
|
$
|
(83)
|
|
$
|
(46)
|
|
|
$
|
(491)
|
|
$
|
(134)
|
|
|
$
|
(216)
|
|
$
|
(132)
|
|
FAS/CAS operating
adjustment
|
$
|
380
|
|
$
|
380
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
736
|
|
$
|
736
|
|
|
$
|
—
|
|
$
|
—
|
|
Acquisition
accounting adjustments
|
$
|
(523)
|
|
$
|
—
|
|
|
$
|
(220)
|
|
$
|
—
|
|
|
$
|
(4,539)
|
|
$
|
—
|
|
|
$
|
(657)
|
|
$
|
—
|
|
Consolidated
|
$
|
434
|
|
$
|
1,173
|
|
|
$
|
1,430
|
|
$
|
1,714
|
|
|
$
|
(2,031)
|
|
$
|
3,733
|
|
|
$
|
3,958
|
|
$
|
5,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit (Loss) Margin
|
|
|
|
|
|
|
|
|
|
|
|
Collins Aerospace
Systems
|
12.3
|
%
|
1.7
|
%
|
|
19.4
|
%
|
19.8
|
%
|
|
9.8
|
%
|
9.2
|
%
|
|
17.9
|
%
|
19.3
|
%
|
Pratt &
Whitney
|
(17.6)
|
%
|
(1.1)
|
%
|
|
9.8
|
%
|
9.8
|
%
|
|
(4.8)
|
%
|
2.5
|
%
|
|
9.5
|
%
|
9.6
|
%
|
Raytheon Intelligence
& Space
|
9.5
|
%
|
9.5
|
%
|
|
NM
|
|
NM
|
|
|
9.4
|
%
|
9.4
|
%
|
|
NM
|
|
NM
|
|
Raytheon Missiles
& Defense
|
11.9
|
%
|
11.9
|
%
|
|
NM
|
|
NM
|
|
|
11.5
|
%
|
11.5
|
%
|
|
NM
|
|
NM
|
|
Total
segment
|
4.7
|
%
|
5.3
|
%
|
|
15.1
|
%
|
15.3
|
%
|
|
5.7
|
%
|
7.6
|
%
|
|
14.2
|
%
|
15.1
|
%
|
|
|
(1)
|
Legacy UTC segments
have been recast for the quarters of 2019, as well as first quarter
2020, as a result of the Separation Transactions, the Distributions
and the Raytheon Merger, which resulted in the reclassification of
amounts for Otis and Carrier as discontinued operations and
revisions to the Company's measurement of segment operating
profit.
|
|
|
NM
|
Not
Meaningful
|
Raytheon
Technologies Corporation
Condensed
Consolidated Balance Sheet
|
|
|
September 30,
2020
|
|
December 31,
2019
|
(dollars in
millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
10,001
|
|
|
$
|
4,937
|
|
Accounts receivable,
net
|
10,115
|
|
|
8,743
|
|
Contract
assets(2)
|
9,617
|
|
|
4,462
|
|
Inventory,
net
|
9,843
|
|
|
9,047
|
|
Assets related to
discontinued operations(1)
|
56
|
|
|
31,823
|
|
Other assets,
current
|
3,879
|
|
|
2,565
|
|
Total Current
Assets
|
43,511
|
|
|
61,577
|
|
Customer financing
assets
|
3,314
|
|
|
3,463
|
|
Future income tax
benefits
|
699
|
|
|
884
|
|
Fixed assets,
net
|
14,730
|
|
|
10,322
|
|
Operating lease
right-of-use assets
|
2,027
|
|
|
1,252
|
|
Goodwill
|
53,524
|
|
|
36,609
|
|
Intangible assets,
net
|
41,564
|
|
|
24,473
|
|
Other
assets(2)
|
3,030
|
|
|
1,035
|
|
Total
Assets
|
$
|
162,399
|
|
|
$
|
139,615
|
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interests and Equity
|
|
|
|
Short-term
borrowings
|
$
|
228
|
|
|
$
|
2,293
|
|
Accounts
payable
|
8,143
|
|
|
7,816
|
|
Accrued
liabilities(2)
|
13,558
|
|
|
9,770
|
|
Contract
liabilities(2)
|
12,208
|
|
|
9,014
|
|
Liabilities related
to discontinued operations(1)
|
118
|
|
|
14,443
|
|
Long-term debt
currently due
|
1,307
|
|
|
3,258
|
|
Total Current
Liabilities
|
35,562
|
|
|
46,594
|
|
Long-term
debt
|
31,246
|
|
|
37,701
|
|
Operating lease
liabilities, non-current
|
1,651
|
|
|
1,093
|
|
Future pension and
postretirement benefit obligations
|
14,688
|
|
|
2,487
|
|
Other long-term
liabilities(2)
|
9,142
|
|
|
7,414
|
|
Total
Liabilities
|
92,289
|
|
|
95,289
|
|
Redeemable
noncontrolling interests
|
30
|
|
|
95
|
|
Shareowners'
Equity:
|
|
|
|
Common
Stock
|
36,781
|
|
|
22,955
|
|
Treasury
Stock
|
(10,407)
|
|
|
(32,626)
|
|
Retained
earnings
|
50,017
|
|
|
61,594
|
|
Accumulated other
comprehensive loss
|
(8,012)
|
|
|
(10,149)
|
|
Total Shareowners'
Equity
|
68,379
|
|
|
41,774
|
|
Noncontrolling
interest
|
1,701
|
|
|
2,457
|
|
Total
Equity
|
70,080
|
|
|
44,231
|
|
Total Liabilities,
Redeemable Noncontrolling Interests and Equity
|
$
|
162,399
|
|
|
$
|
139,615
|
|
|
As a result of the
Separation Transactions, the Distributions and the Raytheon Merger,
certain reclassifications have been made to the prior year amounts
to conform to the current year presentation. These
reclassifications include:
|
|
(1)
|
the reclassification
of the historical Otis and Carrier results to assets and
liabilities related to discontinued operations
|
|
(2)
|
the presentation of
contract-related assets and liabilities as current based upon the
duration of our operating cycle
|
Raytheon
Technologies Corporation
Condensed
Consolidated Statement of Cash Flows
|
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019(1)
|
|
2020
|
|
2019(1)
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net income (loss) from
continuing operations
|
$
|
185
|
|
|
$
|
1,011
|
|
|
$
|
(3,143)
|
|
|
$
|
3,000
|
|
Adjustments to
reconcile net income (loss) from continuing operations to net
cash
flows provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
1,164
|
|
|
692
|
|
|
3,003
|
|
|
2,022
|
|
Deferred income tax
provision
|
(152)
|
|
|
9
|
|
|
(34)
|
|
|
19
|
|
Stock compensation
cost
|
118
|
|
|
74
|
|
|
253
|
|
|
192
|
|
Net periodic pension
and other postretirement income
|
(102)
|
|
|
(227)
|
|
|
(325)
|
|
|
(471)
|
|
Goodwill impairment
loss
|
—
|
|
|
—
|
|
|
3,183
|
|
|
—
|
|
Change in:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(596)
|
|
|
(774)
|
|
|
567
|
|
|
(38)
|
|
Contract
assets
|
323
|
|
|
(129)
|
|
|
699
|
|
|
(702)
|
|
Inventory
|
439
|
|
|
(461)
|
|
|
(111)
|
|
|
(1,256)
|
|
Other current
assets
|
(201)
|
|
|
(318)
|
|
|
(381)
|
|
|
(640)
|
|
Accounts payable and
accrued liabilities
|
529
|
|
|
1,388
|
|
|
(866)
|
|
|
1,170
|
|
Contract
liabilities
|
153
|
|
|
220
|
|
|
354
|
|
|
853
|
|
Global pension
contributions
|
(22)
|
|
|
(4)
|
|
|
(64)
|
|
|
(41)
|
|
Canadian government
settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
(38)
|
|
Other operating
activities, net
|
(216)
|
|
|
246
|
|
|
(171)
|
|
|
426
|
|
Net cash flows
provided by operating activities from continuing
operations
|
1,622
|
|
|
1,727
|
|
|
2,964
|
|
|
4,496
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(389)
|
|
|
(444)
|
|
|
(1,172)
|
|
|
(1,122)
|
|
Dispositions of
businesses
|
2,341
|
|
|
1
|
|
|
2,575
|
|
|
134
|
|
Cash acquired in
Raytheon Merger
|
—
|
|
|
—
|
|
|
3,208
|
|
|
—
|
|
Increase in customer
financing assets, net
|
(9)
|
|
|
(113)
|
|
|
(138)
|
|
|
(445)
|
|
Increase in
collaboration intangible assets
|
(30)
|
|
|
(90)
|
|
|
(136)
|
|
|
(259)
|
|
Receipts (payments)
from settlements of derivative contracts, net
|
171
|
|
|
99
|
|
|
(115)
|
|
|
160
|
|
Other investing
activities, net
|
12
|
|
|
(82)
|
|
|
(70)
|
|
|
(200)
|
|
Net cash flows
provided by (used in) investing activities from continuing
operations
|
2,096
|
|
|
(629)
|
|
|
4,152
|
|
|
(1,732)
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
Issuance of long-term
debt
|
15
|
|
|
—
|
|
|
1,999
|
|
|
2
|
|
Distribution from
discontinued operations
|
—
|
|
|
—
|
|
|
17,207
|
|
|
—
|
|
Repayment of long-term
debt
|
(14)
|
|
|
(599)
|
|
|
(15,052)
|
|
|
(612)
|
|
(Decrease) increase in
short-term borrowings, net
|
(15)
|
|
|
223
|
|
|
(2,060)
|
|
|
(165)
|
|
Proceeds from Common
Stock issued under employee stock plans
|
(4)
|
|
|
3
|
|
|
6
|
|
|
14
|
|
Dividends paid on
Common Stock
|
(688)
|
|
|
(611)
|
|
|
(2,026)
|
|
|
(1,830)
|
|
Repurchase of Common
Stock
|
—
|
|
|
(42)
|
|
|
(47)
|
|
|
(111)
|
|
Net transfers from
(to) discontinued operations
|
(32)
|
|
|
574
|
|
|
(1,998)
|
|
|
1,256
|
|
Other financing
activities, net
|
14
|
|
|
35
|
|
|
(85)
|
|
|
(38)
|
|
Net cash flows used in
financing activities from continuing operations
|
(724)
|
|
|
(417)
|
|
|
(2,056)
|
|
|
(1,484)
|
|
Discontinued
Operations:
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
(32)
|
|
|
764
|
|
|
(693)
|
|
|
1,605
|
|
Net cash used in
investing activities
|
—
|
|
|
(127)
|
|
|
(241)
|
|
|
(241)
|
|
Net cash used in
financing activities
|
32
|
|
|
(712)
|
|
|
(1,449)
|
|
|
(1,410)
|
|
Net cash flows used in
discontinued operations
|
—
|
|
|
(75)
|
|
|
(2,383)
|
|
|
(46)
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents from
continuing
operations
|
21
|
|
|
(15)
|
|
|
11
|
|
|
(11)
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents from
discontinued operations
|
—
|
|
|
(65)
|
|
|
(76)
|
|
|
(54)
|
|
Net increase in cash,
cash equivalents and restricted cash
|
3,015
|
|
|
526
|
|
|
2,612
|
|
|
1,169
|
|
Cash, cash equivalents
and restricted cash, beginning of period
|
7,017
|
|
|
4,334
|
|
|
4,961
|
|
|
3,731
|
|
Cash, cash equivalents
and restricted cash within assets related to discontinued
operations, beginning of period
|
—
|
|
|
2,521
|
|
|
2,459
|
|
|
2,481
|
|
Cash, cash equivalents
and restricted cash, end of period
|
10,032
|
|
|
7,381
|
|
|
10,032
|
|
|
7,381
|
|
Less: Restricted
cash
|
31
|
|
|
20
|
|
|
31
|
|
|
20
|
|
Less: Cash, cash
equivalents and restricted cash for discontinued
operations
|
—
|
|
|
2,378
|
|
|
—
|
|
|
2,378
|
|
Cash and cash
equivalents, end of period
|
$
|
10,001
|
|
|
$
|
4,983
|
|
|
$
|
10,001
|
|
|
$
|
4,983
|
|
|
|
(1)
|
As a result of the
Separation Transactions, the Distributions and the Raytheon Merger,
certain reclassifications have been made to the prior year amounts
to conform to the current year presentation. These
reclassifications include the reclassification of the historical
Otis and Carrier results to discontinued operations and the
reclassification of lease amortization within our presentation of
cash flows.
|
Raytheon
Technologies Corporation
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Results
Adjusted Sales,
Adjusted Operating Profit & Operating Profit
Margin
|
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions - Income (Expense))
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Collins Aerospace
Systems
|
|
|
|
|
|
|
|
Net sales
|
$
|
4,274
|
|
|
$
|
6,495
|
|
|
$
|
14,914
|
|
|
$
|
19,584
|
|
Significant
unfavorable contract adjustments(1)
|
(4)
|
|
|
—
|
|
|
(122)
|
|
|
—
|
|
Adjusted net
sales
|
$
|
4,278
|
|
|
$
|
6,495
|
|
|
$
|
15,036
|
|
|
$
|
19,584
|
|
|
|
|
|
|
|
|
|
Operating profit
(loss)
|
$
|
526
|
|
|
$
|
1,259
|
|
|
$
|
1,455
|
|
|
$
|
3,499
|
|
Restructuring
|
(138)
|
|
|
(27)
|
|
|
(295)
|
|
|
(83)
|
|
Significant
unfavorable contract adjustments(1)
|
(25)
|
|
|
—
|
|
|
(169)
|
|
|
—
|
|
Bad debt expense
driven by customer bankruptcies and
collectability risk(1)
|
(24)
|
|
|
—
|
|
|
(123)
|
|
|
—
|
|
Foreign government
wage subsidies(1)
|
32
|
|
|
—
|
|
|
56
|
|
|
—
|
|
Fixed asset
impairment(1)
|
—
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
Gain on sale of
businesses
|
608
|
|
|
—
|
|
|
608
|
|
|
—
|
|
Loss on sale of
business
|
—
|
|
|
—
|
|
|
—
|
|
|
(25)
|
|
Amortization of
Rockwell Collins inventory fair value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(181)
|
|
Adjusted operating
profit
|
$
|
73
|
|
|
$
|
1,286
|
|
|
$
|
1,381
|
|
|
$
|
3,788
|
|
Adjusted operating
profit margin
|
1.7
|
%
|
|
19.8
|
%
|
|
9.2
|
%
|
|
19.3
|
%
|
Pratt &
Whitney
|
|
|
|
|
|
|
|
Net sales
|
$
|
3,494
|
|
|
$
|
5,285
|
|
|
$
|
12,334
|
|
|
$
|
15,257
|
|
Favorable impact of a
contract termination
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
Significant
unfavorable contract adjustments(1)
|
(296)
|
|
|
—
|
|
|
(416)
|
|
|
—
|
|
Adjusted net
sales
|
$
|
3,790
|
|
|
$
|
5,285
|
|
|
$
|
12,728
|
|
|
$
|
15,257
|
|
|
|
|
|
|
|
|
|
Operating (loss)
profit
|
$
|
(615)
|
|
|
$
|
520
|
|
|
$
|
(597)
|
|
|
$
|
1,447
|
|
Restructuring
|
(63)
|
|
|
—
|
|
|
(170)
|
|
|
(17)
|
|
Bad debt expense
driven by customer bankruptcies and
collectability risk(1)
|
(24)
|
|
|
—
|
|
|
(234)
|
|
|
—
|
|
Significant
unfavorable contract adjustments(1)
|
(543)
|
|
|
—
|
|
|
(653)
|
|
|
—
|
|
Foreign government
wage subsidies(1)
|
58
|
|
|
—
|
|
|
117
|
|
|
—
|
|
Favorable impact of a
contract termination
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
Adjusted operating
(loss) profit
|
$
|
(43)
|
|
|
$
|
520
|
|
|
$
|
321
|
|
|
$
|
1,464
|
|
Adjusted operating
(loss) profit margin
|
(1.1)
|
%
|
|
9.8
|
%
|
|
2.5
|
%
|
|
9.6
|
%
|
Raytheon
Intelligence & Space
|
|
|
|
|
|
|
|
Net sales
|
$
|
3,674
|
|
|
$
|
—
|
|
|
$
|
6,988
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
$
|
348
|
|
|
$
|
—
|
|
|
$
|
659
|
|
|
$
|
—
|
|
Operating profit
margin
|
9.5
|
%
|
|
—
|
%
|
|
9.4
|
%
|
|
—
|
%
|
Raytheon Missiles
& Defense
|
|
|
|
|
|
|
|
Net sales
|
$
|
3,794
|
|
|
$
|
—
|
|
|
$
|
7,384
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
$
|
453
|
|
|
$
|
—
|
|
|
$
|
850
|
|
|
$
|
—
|
|
Operating profit
margin
|
11.9
|
%
|
|
—
|
%
|
|
11.5
|
%
|
|
—
|
%
|
Corporate,
Eliminations and other items
|
|
|
|
|
|
|
|
Net sales
|
$
|
(489)
|
|
|
$
|
(407)
|
|
|
$
|
(1,452)
|
|
|
$
|
(1,186)
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
$
|
(135)
|
|
|
$
|
(129)
|
|
|
$
|
(595)
|
|
|
$
|
(331)
|
|
Restructuring
|
(44)
|
|
|
(1)
|
|
|
(215)
|
|
|
(3)
|
|
Transaction and
integration costs related to acquisition of
Rockwell Collins, Inc.
|
—
|
|
|
(11)
|
|
|
—
|
|
|
(30)
|
|
Costs associated with
the separation of the commercial businesses
|
(7)
|
|
|
—
|
|
|
(21)
|
|
|
—
|
|
Transaction and
integration costs associated with the Raytheon
Merger
|
(46)
|
|
|
(25)
|
|
|
(145)
|
|
|
(51)
|
|
Adjusted operating
loss
|
$
|
(38)
|
|
|
$
|
(92)
|
|
|
$
|
(214)
|
|
|
$
|
(247)
|
|
Acquisition
Accounting Adjustments(2)
|
|
|
|
|
|
|
|
Operating
Loss
|
$
|
(523)
|
|
|
$
|
(220)
|
|
|
$
|
(4,539)
|
|
|
$
|
(657)
|
|
Intangible
impairment(1)
|
—
|
|
|
—
|
|
|
(57)
|
|
|
—
|
|
Goodwill
impairment(1)
|
—
|
|
|
—
|
|
|
(3,183)
|
|
|
—
|
|
Acquisition accounting
adjustments
|
(523)
|
|
|
(220)
|
|
|
(1,299)
|
|
|
(657)
|
|
Adjusted operating
profit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
RTC
Consolidated
|
|
|
|
|
|
|
|
Net sales
|
$
|
14,747
|
|
|
$
|
11,373
|
|
|
$
|
40,168
|
|
|
$
|
33,655
|
|
Favorable impact of a
contract termination
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
Significant
unfavorable contract adjustments
|
(300)
|
|
|
—
|
|
|
(538)
|
|
|
—
|
|
Adjusted net
sales
|
$
|
15,047
|
|
|
$
|
11,373
|
|
|
$
|
40,684
|
|
|
$
|
33,655
|
|
|
|
|
|
|
|
|
|
Operating profit
(loss)
|
$
|
434
|
|
|
$
|
1,430
|
|
|
$
|
(2,031)
|
|
|
$
|
3,958
|
|
Restructuring
|
(245)
|
|
|
(28)
|
|
|
(680)
|
|
|
(103)
|
|
Acquisition accounting
adjustments
|
(523)
|
|
|
(220)
|
|
|
(1,299)
|
|
|
(657)
|
|
Total significant
non-recurring and non-operational items included
in Operating Profit above
|
29
|
|
|
(36)
|
|
|
(3,785)
|
|
|
(287)
|
|
Consolidated adjusted
operating profit
|
$
|
1,173
|
|
|
$
|
1,714
|
|
|
$
|
3,733
|
|
|
$
|
5,005
|
|
|
|
(1)
|
Included in other
significant items in the table above for the three months ended
September 30, 2020 is a net pre-tax charge of $0.5 billion related
to the impact of the COVID-19 pandemic. This amount includes $0.6
billion of charges related to significant unfavorable contract
adjustments. Included in other significant items in the table above
for the nine months ended September 30, 2020, is a net pre-tax
charge of $4.2 billion related to the impact of the COVID-19
pandemic. This amount includes a $3.2 billion impairment of
goodwill, $0.8 billion of charges related to significant
unfavorable contract adjustments and $0.4 billion of charges
related to customer bankruptcies and increased collectability risk.
Management has determined these items are directly attributable to
the COVID-19 pandemic, incremental to similar costs incurred for
reasons other than the pandemic, not expected to recur once the
impact of the pandemic has subsided, and therefore not indicative
of the Company's ongoing operational performance.
|
|
|
(2)
|
In conjunction with
the Raytheon Merger, we have revised our definition of Adjusted
operating profit, Adjusted net income, and Adjusted EPS to exclude
the impact of Acquisition accounting adjustments along with
restructuring costs and other significant items. Acquisition
accounting adjustments include the amortization expense and
impairment charges related to acquired intangible assets related to
historical acquisitions, the amortization of the property, plant
and equipment fair value adjustment acquired through historical
acquisitions, and the amortization of customer contractual
obligations related to loss making or below market contracts
acquired. Management believes the revision to these non-GAAP
measures is useful in providing period-to-period comparisons of the
results of the Company's ongoing operational performance. All
periods presented reflect the impact of this change.
|
Raytheon
Technologies Corporation
Reconciliation of
Reported (GAAP) to Adjusted (Non-GAAP) Results
Adjusted Income
from Continuing Operations, Earnings Per Share, Weighted Average
Diluted Shares Outstanding and Effective Tax Rate
|
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars and
shares in millions - Income (Expense))
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Income (loss) from
continuing operations attributable
to common shareowners
|
$
|
151
|
|
|
$
|
958
|
|
|
$
|
(3,255)
|
|
|
$
|
2,853
|
|
Total
Restructuring
|
(245)
|
|
|
(28)
|
|
|
(680)
|
|
|
(103)
|
|
Total Acquisition
accounting adjustments
|
(523)
|
|
|
(220)
|
|
|
(1,299)
|
|
|
(657)
|
|
Total significant
non-recurring and non-operational items
included in Operating Profit
|
29
|
|
|
(36)
|
|
|
(3,785)
|
|
|
(287)
|
|
Significant
non-recurring and non-operational items
included in Non-service Pension
|
|
|
|
|
|
|
|
Pension
curtailment
|
—
|
|
|
98
|
|
|
(25)
|
|
|
98
|
|
Pension curtailment /
settlement related to Collins
Aerospace sale of businesses
|
(8)
|
|
|
—
|
|
|
(8)
|
|
|
—
|
|
Non-service pension
restructuring
|
(5)
|
|
|
—
|
|
|
(5)
|
|
|
—
|
|
Significant
non-recurring and non-operational items
included in Interest Expense, Net
|
|
|
|
|
|
|
|
Interest on tax
settlements
|
—
|
|
|
5
|
|
|
—
|
|
|
63
|
|
Deferred
compensation
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
Tax effect of
restructuring and significant non-recurring
and non-operational items above
|
(12)
|
|
|
32
|
|
|
391
|
|
|
194
|
|
Significant
non-recurring and non-operational items
included in Income Tax Expense
|
|
|
|
|
|
|
|
Tax expenses
associated with the Company's
separation of Otis and Carrier
|
—
|
|
|
—
|
|
|
(415)
|
|
|
—
|
|
Tax
settlements
|
—
|
|
|
8
|
|
|
—
|
|
|
272
|
|
Tax impact from
business disposal
|
12
|
|
|
—
|
|
|
(10)
|
|
|
—
|
|
Tax impact related to
debt exchange
|
11
|
|
|
—
|
|
|
(49)
|
|
|
—
|
|
Revaluation of certain
international tax incentives
|
—
|
|
|
—
|
|
|
(46)
|
|
|
—
|
|
Revaluation of
deferred taxes related to Raytheon
merger and the Company's separation of Otis and Carrier
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
Tax impact of Q2
impairment
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
Tax impact as a result
of tax reform regulations
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
Less: Impact on net
income attributable to common
shareowners
|
(721)
|
|
|
(141)
|
|
|
(5,876)
|
|
|
(420)
|
|
Adjusted income
from continuing operations
attributable to common shareowners
|
$
|
872
|
|
|
$
|
1,099
|
|
|
$
|
2,621
|
|
|
$
|
3,273
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share
|
$
|
0.10
|
|
|
$
|
1.11
|
|
|
$
|
(2.48)
|
|
|
$
|
3.31
|
|
Impact on Diluted
Earnings Per Share
|
(0.48)
|
|
|
(0.16)
|
|
|
(4.47)
|
|
|
(0.48)
|
|
Adjusted Diluted
Earnings Per Share
|
$
|
0.58
|
|
|
$
|
1.27
|
|
|
$
|
1.99
|
|
|
$
|
3.79
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Shares Outstanding
|
|
|
|
|
|
|
|
Reported
Diluted
|
1,514.2
|
|
|
864.1
|
|
|
1,311.3
|
|
|
862.9
|
|
Impact of dilutive
shares(1)
|
—
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
Adjusted
Diluted
|
1,514.2
|
|
|
864.1
|
|
|
1,315.5
|
|
|
862.9
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
45.1
|
%
|
|
23.2
|
%
|
|
(31.5)
|
%
|
|
13.4
|
%
|
Impact on Effective
Tax Rate
|
(28.3)
|
%
|
|
(0.1)
|
%
|
|
51.3
|
%
|
|
8.0
|
%
|
Adjusted Effective
Tax Rate
|
16.8
|
%
|
|
23.1
|
%
|
|
19.8
|
%
|
|
21.4
|
%
|
|
|
(1)
|
The computation of
reported diluted earnings per share excludes the effect of the
potential exercise of stock awards, including stock appreciation
rights and stock options, because their effect was antidilutive in
the nine months ended September 30, 2020 due to the reported loss
from operations. On an adjusted basis, the Company reported income
from continuing operations and the dilutive effect of such awards
is included in the calculation of Adjusted Diluted Earnings Per
Share.
|
Raytheon
Technologies Corporation
Free Cash Flow
Reconciliation
|
|
|
Quarter Ended
September 30,
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
|
|
|
Net cash flows
provided by operating activities from continuing
operations
|
$
|
1,622
|
|
|
$
|
1,727
|
|
Capital
expenditures
|
(389)
|
|
|
(444)
|
|
Free cash
flow
|
$
|
1,233
|
|
|
$
|
1,283
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
(dollars in
millions)
|
2020
|
|
2019
|
|
|
|
|
Net cash flows
provided by operating activities from continuing
operations
|
$
|
2,964
|
|
|
$
|
4,496
|
|
Capital
expenditures
|
(1,172)
|
|
|
(1,122)
|
|
Free cash
flow
|
$
|
1,792
|
|
|
$
|
3,374
|
|
View original
content:http://www.prnewswire.com/news-releases/raytheon-technologies-reports-third-quarter-2020-results-301160090.html
SOURCE Raytheon Technologies