RTX Commercial Aerospace drives strong organic sales
growth and segment margin expansion; Q3 book-to-bill of
1.32
ARLINGTON, Va., Oct. 25,
2022 /PRNewswire/ -- Raytheon Technologies
Corporation (NYSE: RTX) reported third quarter 2022 results.
Third quarter 2022
- Sales of $17.0 billion, up 5
percent versus prior year including 6 percent organic growth
- GAAP EPS from continuing operations of $0.94, up 1 percent versus prior year, including
$0.27 of acquisition accounting
adjustments and net significant and/or non-recurring charges
- Adjusted EPS of $1.21, down 4
percent versus prior year
- Operating cash flow from continuing operations of $778 million; Free cash flow of $263 million
- Achieved approximately $105
million of incremental RTX gross cost synergies
- Repurchased $616 million of RTX
shares
Outlook for full year 2022
- Sales of $67.0 - $67.3 billion, down from $67.75 - $68.75
billion
- Adjusted EPS of $4.70 -
$4.80, up from $4.60 - $4.80
- Confirms free cash flow of approximately $4.0 billion
- Confirms share repurchase of at least $2.5 billion of RTX shares
"Raytheon Technologies delivered strong organic sales growth
while also generating adjusted EPS and free cash flow that
exceeded our expectations following the continued recovery in the
commercial aerospace market and strong customer demand across our
business," said Raytheon Technologies Chairman and CEO Greg Hayes. "While we expect industry-wide
challenges to continue near-term, we remain focused on operational
excellence, including cost containment and program performance, to
deliver on our commitments."
"Our $168 billion company backlog
grew over $6 billion in the quarter,
and will continue to grow as we invest in next-generation
technology and innovation to deepen our industry-leading positions
to deliver sustained value for our customers and shareowners."
See "Use and
Definitions of Non-GAAP Financial Measures" below for information
regarding non-GAAP financial measures.
|
Third quarter 2022
Raytheon Technologies reported third quarter sales of
$17.0 billion, up 5 percent over the
prior year, including 6 points of organic sales growth partially
offset by 1 point of net acquisitions and divestitures headwind.
GAAP EPS from continuing operations of $0.94 was up 1 percent versus the prior year and
included $0.26 of acquisition
accounting adjustments primarily related to intangible amortization
and $0.01 of restructuring. Adjusted
EPS of $1.21 was down 4 percent
versus prior year as growth in segment operating profit was more
than offset by the absence of a prior year tax benefit and lower
pension income.
The company recorded net income from continuing operations
attributable to common shareowners in the third quarter of
$1.4 billion, down 1 percent versus
prior year and included $398 million
of acquisition accounting adjustments and net significant and/or
non-recurring charges. Adjusted net income was $1.8 billion, down 6 percent versus prior year.
Operating cash flow from continuing operations in the third quarter
was $778 million. Capital
expenditures were $515 million,
resulting in free cash flow of $263
million.
Summary Financial
Results – Continuing Operations Attributable to
Common Shareowners
|
|
|
|
3rd
Quarter
|
($ in millions, except
EPS)
|
|
2022
|
|
2021
|
%
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
16,951
|
|
$
16,213
|
5 %
|
Net Income
|
$ 1,387
|
|
$ 1,400
|
(1) %
|
EPS
|
$
0.94
|
|
$
0.93
|
1 %
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Sales
|
$
16,951
|
|
$
16,213
|
5 %
|
Net Income
|
$ 1,785
|
|
$ 1,896
|
(6) %
|
EPS
|
$
1.21
|
|
$
1.26
|
(4) %
|
|
|
|
|
|
|
Operating Cash Flow
from Continuing Operations
|
$
778
|
|
$ 1,932
|
(60) %
|
Free Cash
Flow
|
|
$
263
|
|
$ 1,499
|
(82) %
|
Backlog and Bookings
Backlog at the end of the third quarter was $168 billion, of which $101 billion was from commercial aerospace and
$67 billion was from defense.
Notable defense bookings during the quarter included:
- $1.6 billion of classified
bookings at Raytheon Intelligence & Space (RIS)
- $1.0 billion to develop the
Hypersonic Attack Cruise Missile (HACM) for the U.S. Air Force at
Raytheon Missiles & Defense (RMD)
- $972 million for the Advanced
Medium-Range Air-to-Air Missile (AMRAAM) for the U.S. Air Force,
the U.S. Navy and international customers at RMD
- $524 million for F135 sustainment
contracts at Pratt & Whitney
- $353 million for the Lower Tier
Air and Missile Defense Sensor (LTAMDS) Pre-planned Product
Improvement program for the U.S Army at RMD
- $278 million for F135 production
Lots 15 and 16 at Pratt & Whitney
- $226 million for AIM-9X
Sidewinder for the U.S. Navy at RMD
- $207 million for integrated
effectors and sensors for Counter-Unmanned Aircraft Systems for the
U.S. Army at RMD
Segment Results
The company's reportable segments are Collins Aerospace, Pratt
& Whitney, Raytheon Intelligence & Space (RIS) and Raytheon
Missiles & Defense (RMD).
Collins
Aerospace
|
|
3rd
Quarter
|
($ in
millions)
|
2022
|
|
2021
|
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
5,100
|
|
$
4,592
|
11 %
|
|
Operating
Profit
|
$ 616
|
|
$ 478
|
29 %
|
|
ROS
|
12.1 %
|
|
10.4 %
|
170
|
bps
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Sales
|
$
5,100
|
|
$
4,592
|
11 %
|
|
Operating
Profit
|
$ 630
|
|
$ 480
|
31 %
|
|
ROS
|
12.4 %
|
|
10.5 %
|
190
|
bps
|
Collins Aerospace had third quarter 2022 adjusted sales of
$5,100 million, up 11 percent versus
the prior year. The increase in sales was driven by a 25 percent
increase in commercial aftermarket and a 16 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
deliveries. The decrease in military sales was driven primarily by
lower material receipts and decreased volume.
Collins Aerospace recorded adjusted operating profit of
$630 million in the quarter, up 31
percent versus the prior year. The increase in adjusted operating
profit was primarily driven by drop through on higher commercial
aftermarket and OE, which more than offset lower volume on military
programs as well as higher SG&A and R&D expense.
Pratt &
Whitney
|
|
3rd
Quarter
|
($ in
millions)
|
2022
|
|
2021
|
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
5,380
|
|
$
4,725
|
14 %
|
|
Operating
Profit
|
$ 316
|
|
$ 187
|
69 %
|
|
ROS
|
5.9 %
|
|
4.0 %
|
190
|
bps
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Sales
|
$
5,380
|
|
$
4,725
|
14 %
|
|
Operating
Profit
|
$ 318
|
|
$ 189
|
68 %
|
|
ROS
|
5.9 %
|
|
4.0 %
|
190
|
bps
|
Pratt & Whitney had third quarter 2022 adjusted sales of
$5,380 million, up 14 percent versus
the prior year. The increase in sales was driven by a 26 percent
increase in commercial OE and a 23 percent increase in commercial
aftermarket which more than offset a 2 percent decrease in military
sales. The increase in commercial sales was primarily due to higher
shop visits and related spare part sales as well as favorable OE
engine mix and volume. The decrease in military sales was driven
primarily by lower expected F135 production volume that was
partially offset by higher F135 sustainment volume.
Pratt & Whitney recorded adjusted operating profit of
$318 million in the quarter, up 68
percent versus the prior year. The increase in adjusted operating
profit was primarily driven by drop through on higher commercial
aftermarket sales volume and favorable military and commercial OE
sales mix, which more than offset higher SG&A and R&D
expense.
Raytheon
Intelligence & Space
|
|
3rd
Quarter
|
($ in
millions)
|
2022
|
|
2021
|
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
3,626
|
|
$
3,740
|
(3) %
|
|
Operating
Profit
|
$ 371
|
|
$ 391
|
(5) %
|
|
ROS
|
10.2 %
|
|
10.5 %
|
(30)
|
bps
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Sales
|
$
3,626
|
|
$
3,740
|
(3) %
|
|
Operating
Profit
|
$ 371
|
|
$ 391
|
(5) %
|
|
ROS
|
10.2 %
|
|
10.5 %
|
(30)
|
bps
|
RIS had third quarter 2022 adjusted sales of $3,626 million, down 3 percent versus the prior
year. The decrease in sales was driven by the divestiture of the
Global Training and Services business. Excluding the impact of
acquisitions and divestitures and FX, sales were
up 2 percent versus prior year. Higher classified sales
in Sensing and Effects programs were partially offset by lower
sales in Command, Control and Communications, including lower sales
of tactical communications systems programs.
RIS recorded adjusted operating profit of $371 million, down 5 percent versus the prior
year. The decrease in adjusted operating profit was primarily
driven by the impact of the Global Training and Services
divestiture that more than offset favorable net program
efficiencies.
Raytheon Missiles
& Defense
|
|
3rd
Quarter
|
($ in
millions)
|
2022
|
|
2021
|
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
3,678
|
|
$
3,902
|
(6) %
|
|
Operating
Profit
|
$ 408
|
|
$ 490
|
(17) %
|
|
ROS
|
11.1 %
|
|
12.6 %
|
(150)
|
bps
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Sales
|
$
3,678
|
|
$
3,902
|
(6) %
|
|
Operating
Profit
|
$ 416
|
|
$ 490
|
(15) %
|
|
ROS
|
11.3 %
|
|
12.6 %
|
(130)
|
bps
|
RMD had third quarter 2022 adjusted sales of $3,678 million, down 6 percent versus prior year.
The decrease in sales was primarily driven by continuing supply
chain constraints and declines on Land Warfare and Air Defense
programs and Naval Power programs. These decreases were partially
offset by higher volume on Strategic Missile Defense programs
including Next Generation Interceptor development.
RMD recorded adjusted operating profit of $416 million, down 15 percent versus the prior
year. The decrease in adjusted operating profit was driven
primarily by unfavorable program mix, lower volume primarily in
Land Warfare and Air Defense programs, and lower net program
efficiencies driven by continued supply chain and labor
constraints.
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 the Third Quarter 2022 Financial
Results
Raytheon Technologies' financial results conference call will be
held on Tuesday, October 25, 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 or supply (including energy supply), 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, 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions, except per share amounts; shares in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net Sales
|
$
16,951
|
|
$
16,213
|
|
$
48,981
|
|
$
47,344
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales
|
13,464
|
|
13,089
|
|
38,880
|
|
38,281
|
|
Research and
development
|
662
|
|
676
|
|
1,995
|
|
1,922
|
|
Selling, general and
administrative
|
1,391
|
|
1,229
|
|
4,284
|
|
3,817
|
|
Total Costs and
Expenses
|
15,517
|
|
14,994
|
|
45,159
|
|
44,020
|
Other income,
net
|
46
|
|
124
|
|
91
|
|
314
|
Operating
profit
|
1,480
|
|
1,343
|
|
3,913
|
|
3,638
|
|
Non-service pension
income
|
(468)
|
|
(491)
|
|
(1,422)
|
|
(1,472)
|
|
Interest expense,
net
|
311
|
|
358
|
|
958
|
|
1,046
|
Income from continuing
operations before income taxes
|
1,637
|
|
1,476
|
|
4,377
|
|
4,064
|
|
Income tax
expense
|
242
|
|
3
|
|
518
|
|
690
|
Net income from
continuing operations
|
1,395
|
|
1,473
|
|
3,859
|
|
3,374
|
|
Less: Noncontrolling
interest in subsidiaries' earnings from continuing
operations
|
8
|
|
73
|
|
65
|
|
162
|
Income from continuing
operations attributable to common shareowners
|
1,387
|
|
1,400
|
|
3,794
|
|
3,212
|
Loss from discontinued
operations attributable to common shareowners
|
—
|
|
(7)
|
|
(19)
|
|
(34)
|
Net income attributable
to common shareowners
|
$
1,387
|
|
$
1,393
|
|
$
3,775
|
|
$
3,178
|
|
|
|
|
|
|
|
|
|
Earnings (loss) Per
Share attributable to common shareowners - Basic:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
$
0.94
|
|
$
0.93
|
|
$
2.57
|
|
$
2.13
|
|
Loss from discontinued
operations
|
—
|
|
—
|
|
(0.02)
|
|
(0.02)
|
|
Net income attributable
to common shareowners
|
$
0.94
|
|
$
0.93
|
|
$
2.55
|
|
$
2.11
|
Earnings (loss) Per
Share attributable to common shareowners - Diluted:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
$
0.94
|
|
$
0.93
|
|
$
2.55
|
|
$
2.13
|
|
Loss from discontinued
operations
|
—
|
|
—
|
|
(0.01)
|
|
(0.03)
|
|
Net income attributable
to common shareowners
|
$
0.94
|
|
$
0.93
|
|
$
2.54
|
|
$
2.10
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding:
|
|
|
|
|
|
|
|
|
Basic shares
|
1,470.1
|
|
1,497.9
|
|
1,478.7
|
|
1,505.0
|
|
Diluted
shares
|
1,479.3
|
|
1,505.9
|
|
1,488.9
|
|
1,511.0
|
Raytheon
Technologies Corporation
Segment Net Sales
and Operating Profit
|
|
Quarter
Ended
|
|
Nine Months
Ended
|
|
(Unaudited)
|
|
(Unaudited)
|
|
September 30,
2022
|
|
September 30,
2021
|
|
September 30,
2022
|
|
September 30,
2021
|
(dollars in
millions)
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
Collins Aerospace
Systems
|
$
5,100
|
$
5,100
|
|
$
4,592
|
$
4,592
|
|
$
14,935
|
$
14,935
|
|
$
13,507
|
$
13,507
|
Pratt &
Whitney
|
5,380
|
5,380
|
|
4,725
|
4,725
|
|
14,878
|
14,878
|
|
13,035
|
13,035
|
Raytheon Intelligence
& Space
|
3,626
|
3,626
|
|
3,740
|
3,740
|
|
10,768
|
10,768
|
|
11,310
|
11,310
|
Raytheon Missiles &
Defense
|
3,678
|
3,678
|
|
3,902
|
3,902
|
|
10,763
|
10,763
|
|
11,680
|
11,680
|
Total
segments
|
17,784
|
17,784
|
|
16,959
|
16,959
|
|
51,344
|
51,344
|
|
49,532
|
49,532
|
Eliminations and
other
|
(833)
|
(833)
|
|
(746)
|
(746)
|
|
(2,363)
|
(2,363)
|
|
(2,188)
|
(2,188)
|
Consolidated
|
$
16,951
|
$
16,951
|
|
$
16,213
|
$
16,213
|
|
$
48,981
|
$
48,981
|
|
$
47,344
|
$
47,344
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
|
|
|
|
Collins Aerospace
Systems
|
$ 616
|
$ 630
|
|
$ 478
|
$ 480
|
|
$
1,602
|
$
1,831
|
|
$
1,298
|
$
1,330
|
Pratt &
Whitney
|
316
|
318
|
|
187
|
189
|
|
769
|
929
|
|
319
|
325
|
Raytheon Intelligence
& Space
|
371
|
371
|
|
391
|
391
|
|
1,064
|
1,064
|
|
1,194
|
1,194
|
Raytheon Missiles &
Defense
|
408
|
416
|
|
490
|
490
|
|
1,143
|
1,151
|
|
1,518
|
1,518
|
Total
segments
|
1,711
|
1,735
|
|
1,546
|
1,550
|
|
4,578
|
4,975
|
|
4,329
|
4,367
|
Eliminations and
other
|
(50)
|
(50)
|
|
(27)
|
(27)
|
|
(131)
|
(137)
|
|
(98)
|
(98)
|
Corporate expenses and
other unallocated items
|
(77)
|
(77)
|
|
(89)
|
(74)
|
|
(255)
|
(207)
|
|
(319)
|
(214)
|
FAS/CAS operating
adjustment
|
378
|
378
|
|
499
|
499
|
|
1,135
|
1,135
|
|
1,347
|
1,347
|
Acquisition accounting
adjustments
|
(482)
|
—
|
|
(586)
|
—
|
|
(1,414)
|
—
|
|
(1,621)
|
—
|
Consolidated
|
$
1,480
|
$
1,986
|
|
$
1,343
|
$
1,948
|
|
$
3,913
|
$
5,766
|
|
$
3,638
|
$
5,402
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
|
|
Collins Aerospace
Systems
|
12.1 %
|
12.4 %
|
|
10.4 %
|
10.5 %
|
|
10.7 %
|
12.3 %
|
|
9.6 %
|
9.8 %
|
Pratt &
Whitney
|
5.9 %
|
5.9 %
|
|
4.0 %
|
4.0 %
|
|
5.2 %
|
6.2 %
|
|
2.4 %
|
2.5 %
|
Raytheon Intelligence
& Space
|
10.2 %
|
10.2 %
|
|
10.5 %
|
10.5 %
|
|
9.9 %
|
9.9 %
|
|
10.6 %
|
10.6 %
|
Raytheon Missiles &
Defense
|
11.1 %
|
11.3 %
|
|
12.6 %
|
12.6 %
|
|
10.6 %
|
10.7 %
|
|
13.0 %
|
13.0 %
|
Total
segment
|
9.6 %
|
9.8 %
|
|
9.1 %
|
9.1 %
|
|
8.9 %
|
9.7 %
|
|
8.7 %
|
8.8 %
|
Raytheon
Technologies Corporation
Condensed
Consolidated Balance Sheet
|
|
September 30,
2022
|
|
December 31,
2021
|
(dollars in
millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
5,381
|
|
$
7,832
|
Accounts receivable,
net
|
9,233
|
|
9,661
|
Contract
assets
|
12,297
|
|
11,361
|
Inventory,
net
|
10,443
|
|
9,178
|
Other assets,
current
|
4,467
|
|
4,018
|
Total current
assets
|
41,821
|
|
42,050
|
Customer financing
assets
|
2,618
|
|
2,848
|
Fixed assets,
net
|
14,668
|
|
14,972
|
Operating lease
right-of-use assets
|
1,802
|
|
1,958
|
Goodwill
|
53,168
|
|
54,436
|
Intangible assets,
net
|
37,046
|
|
38,516
|
Other assets
|
7,102
|
|
6,624
|
Total
assets
|
$
158,225
|
|
$
161,404
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interest and Equity
|
|
|
|
Short-term
borrowings
|
$
2,195
|
|
$
134
|
Accounts
payable
|
9,017
|
|
8,751
|
Accrued employee
compensation
|
2,390
|
|
2,658
|
Other accrued
liabilities
|
11,210
|
|
10,162
|
Contract
liabilities
|
13,368
|
|
13,720
|
Long-term debt
currently due
|
193
|
|
24
|
Total current
liabilities
|
38,373
|
|
35,449
|
Long-term
debt
|
31,059
|
|
31,327
|
Operating lease
liabilities, non-current
|
1,539
|
|
1,657
|
Future pension and
postretirement benefit obligations
|
7,362
|
|
7,855
|
Other long-term
liabilities
|
8,124
|
|
10,417
|
Total
liabilities
|
86,457
|
|
86,705
|
Redeemable
noncontrolling interest
|
33
|
|
35
|
Shareowners'
Equity:
|
|
|
|
Common
stock
|
37,798
|
|
37,445
|
Treasury
stock
|
(15,141)
|
|
(12,727)
|
Retained
earnings
|
51,652
|
|
50,265
|
Accumulated other
comprehensive loss
|
(4,122)
|
|
(1,915)
|
Total shareowners'
equity
|
70,187
|
|
73,068
|
Noncontrolling
interest
|
1,548
|
|
1,596
|
Total
equity
|
71,735
|
|
74,664
|
Total liabilities,
redeemable noncontrolling interest and equity
|
$
158,225
|
|
$
161,404
|
Raytheon
Technologies Corporation
Condensed
Consolidated Statement of Cash Flows
|
|
Quarter Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
$
1,395
|
|
$
1,473
|
|
$
3,859
|
|
$
3,374
|
Adjustments to
reconcile net income from continuing operations to net cash flows
provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
1,047
|
|
1,158
|
|
3,060
|
|
3,413
|
Deferred income tax
benefit
|
(534)
|
|
(317)
|
|
(1,681)
|
|
(142)
|
Stock compensation
cost
|
106
|
|
116
|
|
318
|
|
343
|
Net periodic pension
and other postretirement income
|
(348)
|
|
(358)
|
|
(1,062)
|
|
(1,073)
|
Change in:
|
|
|
|
|
|
|
|
Accounts
receivable
|
1,111
|
|
(690)
|
|
321
|
|
(397)
|
Contract
assets
|
(474)
|
|
(560)
|
|
(999)
|
|
(1,117)
|
Inventory
|
(401)
|
|
76
|
|
(1,434)
|
|
(57)
|
Other current
assets
|
(231)
|
|
(17)
|
|
(584)
|
|
(275)
|
Accounts payable and
accrued liabilities
|
(811)
|
|
1,158
|
|
1,298
|
|
425
|
Contract
liabilities
|
25
|
|
128
|
|
(284)
|
|
83
|
Other operating
activities, net
|
(107)
|
|
(235)
|
|
(272)
|
|
(596)
|
Net cash flows
provided by operating activities from continuing
operations
|
778
|
|
1,932
|
|
2,540
|
|
3,981
|
Investing
Activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(515)
|
|
(433)
|
|
(1,433)
|
|
(1,180)
|
Investments in
businesses
|
(66)
|
|
—
|
|
(66)
|
|
(6)
|
Dispositions of
businesses, net of cash transferred
|
6
|
|
—
|
|
94
|
|
1,074
|
Customer financing
assets receipts, net
|
32
|
|
126
|
|
25
|
|
24
|
Increase in
collaboration intangible assets
|
(78)
|
|
(78)
|
|
(169)
|
|
(138)
|
(Payments) receipts
from settlements of derivative contracts, net
|
(108)
|
|
(8)
|
|
(259)
|
|
42
|
Other investing
activities, net
|
(26)
|
|
15
|
|
(83)
|
|
45
|
Net cash flows used in
investing activities from continuing operations
|
(755)
|
|
(378)
|
|
(1,891)
|
|
(139)
|
Financing
Activities:
|
|
|
|
|
|
|
|
Issuance of long-term
debt
|
—
|
|
1,981
|
|
—
|
|
1,981
|
Repayment of long-term
debt
|
—
|
|
(2,240)
|
|
(2)
|
|
(2,547)
|
Change in commercial
paper, net
|
2,067
|
|
—
|
|
2,067
|
|
—
|
Change in other
short-term borrowings, net
|
3
|
|
10
|
|
(14)
|
|
(41)
|
Dividends paid on
common stock
|
(794)
|
|
(751)
|
|
(2,337)
|
|
(2,212)
|
Repurchase of common
stock
|
(616)
|
|
(993)
|
|
(2,395)
|
|
(2,000)
|
Net transfers to
discontinued operations
|
—
|
|
(3)
|
|
—
|
|
(27)
|
Other financing
activities, net
|
(43)
|
|
(67)
|
|
(329)
|
|
(336)
|
Net cash flows used in
financing activities from continuing operations
|
617
|
|
(2,063)
|
|
(3,010)
|
|
(5,182)
|
Discontinued
Operations:
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
—
|
|
(3)
|
|
—
|
|
(27)
|
Net cash used in
investing activities
|
—
|
|
—
|
|
—
|
|
—
|
Net cash provided by
financing activities
|
—
|
|
3
|
|
—
|
|
27
|
Net cash used in
discontinued operations
|
—
|
|
—
|
|
—
|
|
—
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(37)
|
|
(69)
|
|
(57)
|
|
10
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
603
|
|
(578)
|
|
(2,418)
|
|
(1,330)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
4,832
|
|
8,080
|
|
7,853
|
|
8,832
|
Cash, cash equivalents
and restricted cash, end of period
|
5,435
|
|
7,502
|
|
5,435
|
|
7,502
|
Less: Restricted cash,
included in other assets
|
54
|
|
26
|
|
54
|
|
26
|
Cash and cash
equivalents, end of period
|
$
5,381
|
|
$
7,476
|
|
$
5,381
|
|
$
7,476
|
Raytheon
Technologies Corporation
Reconciliation of
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))
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Collins Aerospace
Systems
|
|
|
|
|
|
|
|
Net sales
|
$ 5,100
|
|
$ 4,592
|
|
$
14,935
|
|
$
13,507
|
Operating
profit
|
$
616
|
|
$
478
|
|
$ 1,602
|
|
$ 1,298
|
Restructuring
|
(14)
|
|
(2)
|
|
(19)
|
|
(32)
|
Impairment charges and
reserve adjustments related to Russia sanctions
(1)
|
—
|
|
—
|
|
(141)
|
|
—
|
Charges associated
with disposition of businesses
|
—
|
|
—
|
|
(69)
|
|
—
|
Adjusted operating
profit
|
$
630
|
|
$
480
|
|
$ 1,831
|
|
$ 1,330
|
Adjusted operating
profit margin
|
12.4 %
|
|
10.5 %
|
|
12.3 %
|
|
9.8 %
|
Pratt &
Whitney
|
|
|
|
|
|
|
|
Net sales
|
$ 5,380
|
|
$ 4,725
|
|
$
14,878
|
|
$
13,035
|
Operating
profit
|
$
316
|
|
$
187
|
|
$
769
|
|
$
319
|
Restructuring
|
(2)
|
|
(2)
|
|
(5)
|
|
(6)
|
Impairment charges and
reserve adjustments related to Russia sanctions
(1)
|
—
|
|
—
|
|
(155)
|
|
—
|
Adjusted operating
profit
|
$
318
|
|
$
189
|
|
$
929
|
|
$
325
|
Adjusted operating
profit margin
|
5.9 %
|
|
4.0 %
|
|
6.2 %
|
|
2.5 %
|
Raytheon
Intelligence & Space
|
|
|
|
|
|
|
|
Net sales
|
$ 3,626
|
|
$ 3,740
|
|
$
10,768
|
|
$
11,310
|
Operating
profit
|
$
371
|
|
$
391
|
|
$ 1,064
|
|
$ 1,194
|
Adjusted operating
profit margin
|
10.2 %
|
|
10.5 %
|
|
9.9 %
|
|
10.6 %
|
Raytheon Missiles
& Defense
|
|
|
|
|
|
|
|
Net sales
|
$ 3,678
|
|
$ 3,902
|
|
$
10,763
|
|
$
11,680
|
Operating
profit
|
$
408
|
|
$
490
|
|
$ 1,143
|
|
$ 1,518
|
Restructuring
|
(8)
|
|
—
|
|
(8)
|
|
—
|
Adjusted operating
profit
|
$
416
|
|
$
490
|
|
$ 1,151
|
|
$ 1,518
|
Adjusted operating
profit margin
|
11.3 %
|
|
12.6 %
|
|
10.7 %
|
|
13.0 %
|
Eliminations and
Other
|
|
|
|
|
|
|
|
Net sales
|
$
(833)
|
|
$
(746)
|
|
$
(2,363)
|
|
$
(2,188)
|
Operating
loss
|
$
(50)
|
|
$
(27)
|
|
$
(131)
|
|
$
(98)
|
Impairment charges and
reserve adjustments related to Russia sanctions
(1)
|
—
|
|
—
|
|
6
|
|
—
|
Adjusted operating
loss
|
$
(50)
|
|
$
(27)
|
|
$
(137)
|
|
$
(98)
|
Corporate expenses
and other unallocated items
|
|
|
|
|
|
|
|
Operating
loss
|
$
(77)
|
|
$
(89)
|
|
$
(255)
|
|
$
(319)
|
Restructuring
|
—
|
|
(15)
|
|
(48)
|
|
(80)
|
Costs associated with
the separation of the commercial businesses
|
—
|
|
—
|
|
—
|
|
(8)
|
Transaction and
integration costs associated with the Raytheon Merger
|
—
|
|
—
|
|
—
|
|
(17)
|
Adjusted operating
loss
|
$
(77)
|
|
$
(74)
|
|
$
(207)
|
|
$
(214)
|
FAS/CAS Operating
Adjustment
|
|
|
|
|
|
|
|
Operating
profit
|
$
378
|
|
$
499
|
|
$ 1,135
|
|
$ 1,347
|
Acquisition
Accounting Adjustments
|
|
|
|
|
|
|
|
Operating
loss
|
$
(482)
|
|
$
(586)
|
|
$
(1,414)
|
|
$
(1,621)
|
Acquisition accounting
adjustments
|
(482)
|
|
(586)
|
|
(1,414)
|
|
(1,621)
|
Adjusted operating
profit
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
RTC
Consolidated
|
|
|
|
|
|
|
|
Net sales
|
$
16,951
|
|
$
16,213
|
|
$
48,981
|
|
$
47,344
|
Operating
profit
|
$ 1,480
|
|
$ 1,343
|
|
$ 3,913
|
|
$ 3,638
|
Restructuring
|
(24)
|
|
(19)
|
|
(80)
|
|
(118)
|
Acquisition accounting
adjustments
|
(482)
|
|
(586)
|
|
(1,414)
|
|
(1,621)
|
Total significant
non-recurring and non-operational items included in Operating
profit above
|
—
|
|
—
|
|
(359)
|
|
(25)
|
Adjusted operating
profit
|
$ 1,986
|
|
$ 1,948
|
|
$ 5,766
|
|
$ 5,402
|
|
|
(1)
|
Total significant
non-recurring and non-operational items in the table above for the
nine months ended September 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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions - Income (Expense))
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Income from
continuing operations attributable to common
shareowners
|
$
1,387
|
|
$
1,400
|
|
$ 3,794
|
|
$ 3,212
|
Total
Restructuring
|
(24)
|
|
(19)
|
|
(80)
|
|
(118)
|
Total Acquisition
accounting adjustments
|
(482)
|
|
(586)
|
|
(1,414)
|
|
(1,621)
|
Total significant
non-recurring and non-operational items included in
Operating profit
|
—
|
|
—
|
|
(359)
|
|
(25)
|
Significant
non-recurring and non-operational items included in Non-
service Pension Income
|
|
|
|
|
|
|
|
Non-service pension
restructuring
|
—
|
|
—
|
|
5
|
|
—
|
Significant
non-recurring and non-operational items included in Interest
Expense, Net
|
|
|
|
|
|
|
|
Debt
extinguishment costs
|
—
|
|
(32)
|
|
—
|
|
(32)
|
Tax effect of
restructuring and significant non-recurring and non-
operational items above
|
108
|
|
141
|
|
401
|
|
398
|
Significant
non-recurring and non-operational items included in Income
Tax Expense
|
|
|
|
|
|
|
|
Tax impact from UK
rate change
|
—
|
|
—
|
|
—
|
|
(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
|
(398)
|
|
(496)
|
|
(1,436)
|
|
(1,619)
|
Adjusted income from
continuing operations attributable to common
shareowners
|
$
1,785
|
|
$
1,896
|
|
$ 5,230
|
|
$ 4,831
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
$
0.94
|
|
$
0.93
|
|
$
2.55
|
|
$
2.13
|
Impact on Diluted
Earnings Per Share
|
(0.27)
|
|
(0.33)
|
|
(0.96)
|
|
(1.07)
|
Adjusted Diluted
Earnings Per Share
|
$
1.21
|
|
$
1.26
|
|
$
3.51
|
|
$
3.20
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
14.8 %
|
|
0.2 %
|
|
11.8 %
|
|
17.0 %
|
Impact on Effective
Tax Rate
|
(1.5) %
|
|
(6.6) %
|
|
(3.0) %
|
|
2.2 %
|
Adjusted Effective
Tax Rate
|
16.3 %
|
|
6.8 %
|
|
14.8 %
|
|
14.8 %
|
Raytheon
Technologies Corporation
Free Cash Flow
Reconciliation
|
|
Quarter Ended
September 30,
|
|
(Unaudited)
|
(dollars in
millions)
|
2022
|
|
2021
|
Net cash flows provided
by operating activities from continuing operations
|
$
778
|
|
$
1,932
|
Capital
expenditures
|
(515)
|
|
(433)
|
Free cash
flow
|
$
263
|
|
$
1,499
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
(Unaudited)
|
(dollars in
millions)
|
2022
|
|
2021
|
Net cash flows provided
by operating activities from continuing operations
|
$
2,540
|
|
$
3,981
|
Capital
expenditures
|
(1,433)
|
|
(1,180)
|
Free cash
flow
|
$
1,107
|
|
$
2,801
|
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SOURCE Raytheon Technologies