Raytheon Technologies Reports Second Quarter 2020 Results

WALTHAM, Mass., July 28, 2020 /PRNewswire/ — Raytheon Technologies Corporation (NYSE: RTX) reported second quarter 2020 results.

  • Sales of $14.1 billion
  • Adjusted sales of $14.3 billion
  • GAAP EPS from continuing operations of a loss of $2.56 and included $2.96 of net significant and/or non-recurring charges and acquisition accounting adjustments
  • Adjusted EPS of $0.40
  • Operating cash flow from continuing operations of $210 million
  • Free cash flow of an outflow of $248 million
  • Achieved ~$600 million of cost reduction and ~$1 billion of cash conservation actions
  • Combined book-to-bill ratio of 1.20 at RIS and RMD segments

“During the quarter, we continued to deliver good performance in our defense business, while we saw challenges in commercial aerospace as expected,” said Raytheon Technologies CEO Greg Hayes. “Looking ahead, we expect the pressures in commercial aerospace to persist as OEM production levels and aftermarket activity remain low. As a result, we are taking difficult but necessary actions to strengthen the business, including achieving the previously announced cost and cash savings this year. At the same time, we continue to deliver cost synergies from the Rockwell Collins acquisition and the Raytheon merger.”

Hayes continued, “I’m proud of what our team has accomplished in support of our customers, suppliers, and communities during this difficult time. Our balance sheet remains strong and the resiliency of our defense business will help us weather this storm as we continue to capitalize on growth opportunities supported by our record backlog. I am confident that our balanced portfolio and advanced technologies will position us for long-term value creation as the global economy recovers.”

See “Use and Definitions of Non-GAAP Financial Measures” below for information regarding non-GAAP financial measures.

Raytheon Technologies reported second quarter sales of $14.1 billion and adjusted sales of $14.3 billion. GAAP EPS from continuing operations was a loss of $2.56 and included $2.96 of net significant and/or non-recurring charges and acquisition accounting adjustments, where $2.34 was related to charges due to the current economic environment primarily driven by the COVID-19 pandemic. Of the $2.34, $2.13 was related to an impairment of Collins Aerospace goodwill and intangibles. Other adjustments included $0.28 for acquisition accounting adjustments primarily related to intangible amortization and $0.21 for restructuring. Adjusted EPS was $0.40.

The company recorded a net loss from continuing operations in the second quarter of $3.8 billion, and included $4.4 billion of net significant and/or nonrecurring charges and acquisition accounting adjustments. Adjusted net income was $598 million. Operating cash flow from continuing operations in the second quarter was $210 million and better than expected primarily due to the timing of collections and execution on cash conservation actions. Capital expenditures were $458 million, resulting in a free cash outflow of $248 million. Free cash flow included $165 million of merger costs and restructuring.

Summary Financial Results – Continuing Operations

($ in millions, except EPS)

2nd Quarter
2020

Reported

Sales

$

14,061

Net Income

$

(3,844)

EPS

$

(2.56)

Adjusted

Sales

$

14,277

Net Income

$

598

EPS

$

0.40

Operating Cash Flow from Continuing Operations

$

210

Free Cash Flow

$

(248)

Note: Q2 2020 results include the legacy Raytheon business since the merger date of April 3, 2020. Reported and adjusted numbers do not include the legacy Raytheon business pre-merger stub period from March 30, 2020 to April 2, 2020 which had an estimated $400M of sales, $40M of net income, and $100M of operating cash flow.

Bookings and Orders
Backlog at the end of the second quarter was $158.7 billion, of which $85.6 billion was from commercial aerospace and a record $73.1 billion was from defense.

Notable defense bookings during the quarter included:

  • $2.3 billion 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)
  • $1.4 billion on a number of classified programs at Raytheon Intelligence & Space (RIS)
  • $299 million for Standard Missile-3 (SM-3(R)) for the Missile Defense Agency (MDA) and an international customer at RMD

In addition, during the quarter RMD was selected by the U.S. Air Force to develop the Long-Range Standoff Weapon (LRSO).

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

2nd Quarter

Six Months

($ in millions)

2020

2019

% Change

2020

2019

% Change

Reported

Sales

$

4,202

$

6,576

(36)%

$

10,640

$

13,089

(19)%

Operating Profit

$

(317)

$

1,276

(125)%

$

929

$

2,240

(59)%

ROS

(7.5)%

19.4%

8.7%

17.1%

Adjusted

Sales

$

4,298

$

6,576

(35)%

$

10,758

$

13,089

(18)%

Operating Profit

$

24

$

1,293

(98)%

$

1,308

$

2,502

(48)%

ROS

0.6%

19.7%

12.2%

19.1%

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 second quarter 2020 adjusted sales of $4,298 million, down 35 percent versus the prior year. Commercial OE was down 53 percent and commercial aftermarket was down 48 percent, while military was up 10 percent. The decrease in commercial sales was driven primarily by the current economic environment which has resulted in lower flight hours, aircraft fleet utilization and commercial OEM deliveries, which was slightly offset by F-35 and defense development program growth.

Collins Aerospace recorded adjusted operating profit of $24 million in the quarter, down 98 percent versus the prior year. The decrease in adjusted operating profit was driven by lower commercial aerospace OEM and aftermarket sales volume that was slightly offset by gross margin drop through on higher military volume.

Pratt & Whitney

2nd Quarter

Six Months

($ in millions)

2020

2019

% Change

2020

2019

% Change

Reported

Sales

$

3,487

$

5,154

(32)%

$

8,840

$

9,972

(11)%

Operating Profit

$

(457)

$

449

(202)%

$

18

$

927

(98)%

ROS

(13.1)%

8.7%

0.2%

9.3%

Adjusted

Sales

$

3,607

$

5,154

(30)%

$

8,938

$

9,972

(10)%

Operating Profit

$

(151)

$

452

(133)%

$

364

$

944

(61)%

ROS

(4.2)%

8.8%

4.1%

9.5%

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 second quarter 2020 adjusted sales of $3,607 million, down 30 percent versus the prior year. Commercial OE was down 42 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 economic environment, which was slightly offset by F135 production volume and aftermarket growth on multiple fighter jet platforms.

Pratt & Whitney recorded an adjusted operating loss of $151 million in the quarter, down 133 percent versus the prior year. The decrease in adjusted operating profit was primarily driven by lower commercial aftermarket sales volume and unfavorable mix.

Raytheon Intelligence & Space

2nd Quarter

Six Months

($ in millions)

2020

2020

Reported

Sales

$

3,314

$

3,314

Operating Profit

$

311

$

311

ROS

9.4%

9.4%

Adjusted

Sales

$

3,314

$

3,314

Operating Profit

$

311

$

311

ROS

9.4%

9.4%

Note: Q2 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 $200M of sales and $20M of operating profit.

RIS had second quarter adjusted sales of $3,314 million and recorded $311 million of adjusted operating profit in the quarter.

Raytheon Missiles & Defense

2nd Quarter

Six Months

($ in millions)

2020

2020

Reported

Sales

$

3,590

$

3,590

Operating Profit

$

397

$

397

ROS

11.1%

11.1%

Adjusted

Sales

$

3,590

$

3,590

Operating Profit

$

397

$

397

ROS

11.1%

11.1%

Note: Q2 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 $200M of sales and $25M of operating profit.

RMD had second quarter adjusted sales of $3,590 million and recorded $397 million of adjusted operating profit in the quarter.

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 195,000 employees and 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 Second Quarter 2020 Financial Results
Raytheon Technologies’ financial results conference call will be held on Tuesday, July 28, 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 4609655. 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 quarter and six months ended June 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 construction and 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 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.

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Raytheon Technologies Corporation

Condensed Consolidated Statement of Operations

Quarter Ended June 30,

Six Months Ended June 30,

(Unaudited)

(Unaudited)

(dollars in millions, except per share amounts; shares in millions)

2020

2019(1)

2020(1)

2019(1)

Net Sales

$

14,061

$

11,329

$

25,421

$

22,282

Costs and Expenses:

Cost of sales

12,214

8,554

20,786

16,973

Research and development

695

605

1,230

1,192

Selling, general and administrative

1,811

902

2,788

1,770

Total Costs and Expenses

14,720

10,061

24,804

19,935

Goodwill impairment

(3,183)

(3,183)

Other (expense) income, net

82

118

101

181

Operating profit

(3,760)

1,386

(2,465)

2,528

Non-service pension (benefit)

(237)

(200)

(405)

(392)

Interest expense, net

335

352

667

772

Income (loss) from continuing operations before income taxes

(3,858)

1,234

(2,727)

2,148

Income tax expense (benefit)

(38)

6

601

159

Net income (loss) from continuing operations

(3,820)

1,228

(3,328)

1,989

Less: Noncontrolling interest in subsidiaries’ earnings
from continuing operations

24

45

78

94

Income (loss) from continuing operations attributable to
common shareowners

(3,844)

1,183

(3,406)

1,895

Discontinued operations:

Income (loss) from discontinued operations

(56)

1,206

(232)

2,114

Income tax expense (benefit) from discontinued operations

(65)

435

237

679

Income (loss) from discontinued operations

9

771

(469)

1,435

Less: Noncontrolling interest in subsidiaries’ earnings
from discontinued operations

54

43

84

Income (loss) from discontinued operations attributable to
common shareowners

9

717

(512)

1,351

Net (loss) income attributable to common shareowners

$

(3,835)

$

1,900

$

(3,918)

$

3,246

(Loss) Earnings Per Share attributable to common
shareowners – Basic:

Income (loss) from continuing operations attributable to
common shareowners

$

(2.56)

$

1.38

$

(2.78)

$

2.22

Income (loss) from discontinued operations

0.01

0.84

(0.42)

1.58

Net income (loss) attributable to common shareowners

$

(2.55)

$

2.22

$

(3.20)

$

3.80

(Loss) Earnings Per Share attributable to common
shareowners – Diluted:

Income (loss) from continuing operations attributable to
common shareowners

$

(2.56)

$

1.37

$

(2.78)

$

2.20

Income (loss) from discontinued operations

0.01

0.83

(0.42)

1.56

Net income (loss) attributable to common shareowners

$

(2.55)

$

2.20

$

(3.20)

$

3.76

Weighted Average Shares Outstanding:

Basic shares

1,501.3

854.4

1,225.4

853.8

Diluted shares

1,501.3

863.7

1,225.4

862.3

(1)

As a result of the Separation Transactions and the Distributions we have reclassified certain prior year amounts for the reclassification of the historical Otis and Carrier results to discontinued operations.

Raytheon Technologies Corporation

Segment Net Sales and Operating Profit

Quarter Ended

Six Months Ended

(Unaudited)

(Unaudited)

June 30, 2020

June 30, 2019(1)

June 30, 2020(1)

June 30, 2019(1)

(dollars in millions)

Reported

Adjusted

Reported

Adjusted

Reported

Adjusted

Reported

Adjusted

Net Sales

Collins Aerospace Systems

$

4,202

$

4,298

$

6,576

$

6,576

$

10,640

$

10,758

$

13,089

$

13,089

Pratt & Whitney

3,487

3,607

5,154

5,154

8,840

8,938

9,972

9,972

Raytheon Intelligence &
Space

3,314

3,314

3,314

3,314

Raytheon Missiles & Defense

3,590

3,590

3,590

3,590

Total segment

14,593

14,809

11,730

11,730

26,384

26,600

23,061

23,061

Eliminations and other

(532)

(532)

(401)

(401)

(963)

(963)

(779)

(779)

Consolidated

$

14,061

$

14,277

$

11,329

$

11,329

$

25,421

$

25,637

$

22,282

$

22,282

Operating Profit

Collins Aerospace Systems

$

(317)

$

24

$

1,276

$

1,293

$

929

$

1,308

$

2,240

$

2,502

Pratt & Whitney

(457)

(151)

449

452

18

364

927

944

Raytheon Intelligence &
Space

311

311

311

311

Raytheon Missiles & Defense

397

397

397

397

Total segment

(66)

581

1,725

1,745

1,655

2,380

3,167

3,446

Eliminations and other

(28)

(28)

(42)

(42)

(53)

(53)

(69)

(69)

Corporate expenses and other
unallocated items

(277)

(24)

(87)

(50)

(407)

(123)

(133)

(86)

FAS/CAS operating
adjustment

356

356

356

356

Acquisition accounting
adjustments

(3,745)

(210)

(4,016)

(437)

Consolidated

$

(3,760)

$

885

$

1,386

$

1,653

$

(2,465)

$

2,560

$

2,528

$

3,291

Segment Operating Profit Margin

Collins Aerospace Systems

(7.5)

%

0.6

%

19.4

%

19.7

%

8.7

%

12.2

%

17.1

%

19.1

%

Pratt & Whitney

(13.1)

%

(4.2)

%

8.7

%

8.8

%

0.2

%

4.1

%

9.3

%

9.5

%

Raytheon Intelligence & Space

9.4

%

9.4

%

NM

NM

9.4

%

9.4

%

NM

NM

Raytheon Missiles & Defense

11.1

%

11.1

%

NM

NM

11.1

%

11.1

%

NM

NM

Total segment

(0.5)

%

3.9

%

14.7

%

14.9

%

6.3

%

8.9

%

13.7

%

14.9

%

(1)

Legacy UTC segments have been recast for 2019 and first quarter 2020 as a result of the Separation Transactions, the Distributions and the Raytheon Merger. Refer to supplemental information in the tables on the following pages for additional information.

NM Not Meaningful

Raytheon Technologies Corporation

Condensed Consolidated Balance Sheet

June 30, 2020

December 31, 2019

(dollars in millions)

(Unaudited)

(Unaudited)

Assets

Cash and cash equivalents

$

6,975

$

4,937

Accounts receivable, net(2)

9,496

8,743

Contract assets(2)

9,943

4,462

Inventory, net

10,256

9,047

Assets related to discontinued operations(1)

135

31,823

Other assets, current

5,469

2,565

Total Current Assets

42,274

61,577

Customer financing assets

3,363

3,463

Future income tax benefits

732

884

Fixed assets, net

14,805

10,322

Operating lease right-of-use assets

2,102

1,252

Goodwill

53,269

36,609

Intangible assets, net

42,003

24,473

Other assets(2)

2,969

1,035

Total Assets

$

161,517

$

139,615

Liabilities, Redeemable Noncontrolling Interests and Equity

Short-term borrowings

$

243

$

2,293

Accounts payable

7,182

7,816

Accrued liabilities(2)

14,253

9,770

Contract liabilities(2)

11,997

9,014

Liabilities related to discontinued operations(1)

319

14,443

Long-term debt currently due

1,297

3,258

Total Current Liabilities

35,291

46,594

Long-term debt

31,210

37,701

Operating lease liabilities, non-current

1,723

1,093

Future pension and postretirement benefit obligations

14,972

2,487

Other long-term liabilities(2)

9,394

7,414

Total Liabilities

92,590

95,289

Redeemable noncontrolling interest

35

95

Shareowners’ Equity:

Common Stock

36,679

22,955

Treasury Stock

(10,398)

(32,626)

Retained earnings

49,744

61,594

Accumulated other comprehensive loss

(8,800)

(10,149)

Total Shareowners’ Equity

67,225

41,774

Noncontrolling interest

1,667

2,457

Total Equity

68,892

44,231

Total Liabilities, Redeemable Noncontrolling Interests and Equity

$

161,517

$

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 June 30,

Six Months Ended June 30,

(Unaudited)

(Unaudited)

(dollars in millions)

2020

2019(1)

2020

2019(1)

Operating Activities:

Net income (loss) from continuing operations

$

(3,820)

$

1,228

$

(3,328)

$

1,989

Adjustments to reconcile net income (loss) from continuing operations to net cash
flows provided by operating activities:

Depreciation and amortization

1,111

650

1,839

1,330

Deferred income tax provision

(274)

3

118

10

Stock compensation cost

72

69

135

118

Net periodic pension and other postretirement benefit

(93)

(125)

(223)

(244)

Goodwill impairment loss

3,183

3,183

Change in:

Accounts receivable

773

(146)

1,163

736

Contract assets

725

(255)

376

(573)

Inventory

(155)

(317)

(550)

(795)

Other current assets

28

21

(180)

(322)

Accounts payable and accrued liabilities

(2,007)

109

(1,395)

(218)

Contract liabilities

302

413

201

633

Global pension contributions

(34)

(33)

(42)

(37)

Canadian government settlement

(38)

Other operating activities, net

399

(121)

45

180

Net cash flows provided by operating activities from continuing operations

210

1,496

1,342

2,769

Investing Activities:

Capital expenditures

(458)

(384)

(783)

(678)

Dispositions of businesses

234

234

133

Cash acquired in Raytheon Merger

3,208

3,208

Increase in customer financing assets, net

(41)

(159)

(129)

(332)

Increase in collaboration intangible assets

(28)

(82)

(106)

(169)

Receipts (payments) from settlements of derivative contracts

238

(31)

(286)

61

Other investing activities, net

(57)

(58)

(82)

(118)

Net cash flows provided by (used in) investing activities from continuing operations

3,096

(714)

2,056

(1,103)

Financing Activities:

Issuance of long-term debt

1,984

3

1,984

2

Dividend from discontinued operations

17,207

Repayment of long-term debt

(1,228)

(9)

(15,038)

(13)

Decrease in short-term borrowings, net

(1,382)

(18)

(2,045)

(388)

Proceeds from Common Stock issued under employee stock plans

4

6

10

11

Dividends paid on Common Stock

(724)

(610)

(1,338)

(1,219)

Repurchase of Common Stock

(40)

(47)

(69)

Net transfers (to) from discontinued operations

(950)

168

(1,966)

682

Other financing activities, net

(76)

(11)

(99)

(73)

Net cash flows used in financing activities from continuing operations

(2,372)

(511)

(1,332)

(1,067)

Discontinued Operations:

Net cash (used in) provided by operating activities

(189)

614

(661)

841

Net cash used in investing activities

(109)

(241)

(114)

Net cash used in financing activities

(1,803)

(178)

(1,481)

(698)

Net cash flows (used in) provided by discontinued operations

(1,992)

327

(2,383)

29

Effect of foreign exchange rate changes on cash and cash equivalents

9

(10)

4

Effect of foreign exchange rate changes on cash and cash equivalents from
discontinued operations

(25)

(76)

11

Net (decrease) increase in cash, cash equivalents and restricted cash

(1,049)

573

(403)

643

Cash, cash equivalents and restricted cash, beginning of period

6,073

4,057

4,961

3,731

Cash, cash equivalents and restricted cash within assets related to discontinued
operations, beginning of period

1,993

2,225

2,459

2,481

Cash, cash equivalents and restricted cash, end of period

7,017

6,855

7,017

6,855

Less: Restricted cash

42

18

42

18

Less: Cash, cash equivalents and restricted cash for discontinued operations

2,521

2,521

Cash and cash equivalents, end of period

$

6,975

$

4,316

$

6,975

$

4,316

(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 June 30,

Six Months Ended June 30,

(Unaudited)

(Unaudited)

(dollars in millions – Income (Expense))

2020

2019

2020

2019

Collins Aerospace Systems

Net sales

$

4,202

$

6,576

$

10,640

$

13,089

Significant unfavorable contract adjustments(1)

(96)

(118)

Adjusted net sales

$

4,298

$

6,576

$

10,758

$

13,089

Operating profit (loss)

$

(317)

$

1,276

$

929

$

2,240

Restructuring

(151)

(17)

(157)

(56)

Significant unfavorable contract adjustments(1)

(122)

(144)

Bad debt expense driven by customer bankruptcies and
collectability risk(1)

(89)

(99)

Foreign government wage subsidies(1)

24

24

Fixed asset impairment(1)

(3)

(3)

Loss on sale of business

(25)

Amortization of Rockwell Collins inventory fair value adjustment

(181)

Adjusted operating profit

$

24

$

1,293

$

1,308

$

2,502

Adjusted operating profit margin

0.6

%

19.7

%

12.2

%

19.1

%

Pratt & Whitney

Net sales

$

3,487

$

5,154

$

8,840

$

9,972

Favorable impact of a contract termination

22

Significant unfavorable contract adjustments(1)

(120)

(120)

Adjusted net sales

$

3,607

$

5,154

$

8,938

$

9,972

Operating profit (loss)

$

(457)

$

449

$

18

$

927

Restructuring

(107)

(3)

(107)

(17)

Bad debt expense driven by customer bankruptcies and
collectability risk(1)

(148)

(210)

Significant unfavorable contract adjustments(1)

(110)

(110)

Foreign government wage subsidies(1)

59

59

Favorable impact of a contract termination

22

Adjusted operating profit

$

(151)

$

452

$

364

$

944

Adjusted operating profit margin

(4.2)

%

8.8

%

4.1

%

9.5

%

Raytheon Intelligence & Space

Net sales

$

3,314

$

$

3,314

$

Operating profit

$

311

$

$

311

$

Operating profit margin

9.4

%

%

9.4

%

%

Raytheon Missiles & Defense

Net sales

$

3,590

$

$

3,590

$

Operating profit

$

397

$

$

397

$

Operating profit margin

11.1

%

%

11.1

%

%

Corporate, Eliminations and other items

Net sales

$

(532)

$

(401)

$

(963)

$

(779)

Operating profit

$

(305)

$

(129)

$

(460)

$

(202)

Restructuring

(169)

(1)

(171)

(2)

Transaction and integration costs related to acquisition of
Rockwell Collins, Inc.

(10)

(19)

Costs associated with the separation of the commercial businesses

(14)

(14)

Transaction expenses associated with the Raytheon Merger

(70)

(26)

(99)

(26)

Adjusted operating profit

$

(52)

$

(92)

$

(176)

$

(155)

Acquisition Accounting Adjustments(2)

Operating Profit

$

(3,745)

$

(210)

$

(4,016)

$

(437)

Intangible impairment(1)

(17)

(57)

Goodwill impairment(1)

(3,183)

(3,183)

Acquisition accounting adjustments

(545)

(210)

(776)

(437)

Adjusted operating profit

$

$

$

$

RTC Consolidated

Net sales

$

14,061

$

11,329

$

25,421

$

22,282

Significant unfavorable contract adjustments

(216)

(216)

Adjusted net sales

$

14,277

$

11,329

$

25,637

$

22,282

Operating profit

$

(3,760)

$

1,386

$

(2,465)

$

2,528

Restructuring

(427)

(21)

(435)

(75)

Acquisition accounting adjustments

(545)

(210)

(776)

(437)

Total significant non-recurring and non-operational items included
in Operating Profit above

(3,673)

(36)

(3,814)

(251)

Consolidated adjusted operating profit

$

885

$

1,653

$

2,560

$

3,291

(1)

For the three and six months ended June 30, 2020, included in other significant items in the table above is a net pre-tax charge of $3.6 billion related to the impact of the COVID-19 pandemic. This amount includes a $3.2 billion impairment of goodwill, $0.2 billion of charges related to customer bankruptcies and increased collectability risk, and $0.2 billion of charges related to significant unfavorable contract adjustments. 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 (Loss) from Continuing Operations, Earnings Per Share, Weighted Average
Diluted Shares Outstanding and Effective Tax Rate

Quarter Ended June 30,

Six Months Ended June 30,

(Unaudited)

(Unaudited)

(dollars and shares in millions – Income (Expense))

2020

2019

2020

2019

Income (loss) from continuing operations attributable
to common shareowners

$

(3,844)

$

1,183

$

(3,406)

$

1,895

Total Restructuring Costs

(427)

(21)

(435)

(75)

Total Acquisition accounting adjustments

(545)

(210)

(776)

(437)

Total significant non-recurring and non-operational
items included in Operating Profit

(3,673)

(36)

(3,814)

(251)

Significant non-recurring and non-operational items
included in Non-service Pension

Pension curtailment

(25)

(25)

Significant non-recurring and non-operational items
included in Interest Expense, Net

Interest on tax settlements

58

58

Deferred compensation

4

4

Tax effect of restructuring and significant non-
recurring and non-operational items above

321

53

403

162

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

264

264

Tax impact from business disposal

(22)

(22)

Tax impact related to debt exchange

(60)

(60)

Revaluation of certain international tax incentives

(46)

(46)

Revaluation of deferred taxes related to Raytheon
merger and the Company’s separation of Otis and Carrier

31

31

Less: Impact on net income attributable to common
shareowners

(4,442)

108

(5,155)

(279)

Adjusted income (loss) from continuing operations
attributable to common shareowners

$

598

$

1,075

$

1,749

$

2,174

Diluted (Loss) Earnings Per Share

$

(2.56)

$

1.37

$

(2.78)

$

2.20

Impact on Diluted (Loss) Earnings Per Share

(2.96)

0.13

(4.20)

(0.32)

Adjusted Diluted Earnings Per Share

$

0.40

$

1.24

$

1.42

$

2.52

Weighted Average Number of Shares Outstanding

Reported Diluted

1,501.3

863.7

1,225.4

862.3

Impact of dilutive shares(1)

2.4

4.9

Adjusted Diluted

1,503.7

863.7

1,230.3

862.3

Effective Tax Rate

1.0

%

0.5

%

(22.0)

%

7.4

%

Impact on Effective Tax Rate

22.0

%

21.9

%

43.2

%

13.1

%

Adjusted Effective Tax Rate

23.0

%

22.4

%

21.2

%

20.5

%

(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 quarter ended and six months ended June 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 June 30,

(Unaudited)

(dollars in millions)

2020

2019

Net cash flows provided by operating activities from continuing operations

$

210

$

1,496

Capital expenditures

(458)

(384)

Free cash flow

$

(248)

$

1,112

Six Months Ended June 30,

(Unaudited)

(dollars in millions)

2020

2019

Net cash flows provided by operating activities from continuing operations

$

1,342

$

2,769

Capital expenditures

(783)

(678)

Free cash flow

$

559

$

2,091

Raytheon Technologies Corporation

Legacy UTC Reported Segment Results

In conjunction with the Raytheon Merger, we revised our measurement of segment performance to reflect how management now reviews and evaluates operating performance. Under the new segment performance measurement, certain acquisition accounting adjustments are now excluded from segment results in order to better represent the ongoing operational performance of those segments. In addition, the majority of Corporate expenses are now allocated to the segments, excluding certain items that remain at Corporate because they are not included in management’s review of the segment results. The tables below summarize the historical results of our Pratt and Whitney and Collins Aerospace Systems segments reflecting the impact of these adjustments.

2020

2019

Net Sales (dollars in millions)

Q1

Q1

Q2

Q3

Q4

FY

Pratt & Whitney

$

5,353

$

4,818

$

5,154

$

5,285

$

5,645

$

20,902

Collins Aerospace Systems

6,438

6,513

6,576

6,495

6,444

26,028

Total segments

11,791

11,331

11,730

11,780

12,089

46,930

Eliminations and other

(431)

(378)

(401)

(407)

(395)

(1,581)

Total net sales from continuing
operations

$

11,360

$

10,953

$

11,329

$

11,373

$

11,694

$

45,349

2020

2019

Operating Profit (dollars in millions)

Q1

Q1

Q2

Q3

Q4

FY

Pratt & Whitney

$

475

$

478

$

449

$

520

$

354

$

1,801

Collins Aerospace Systems

1,246

964

1,276

1,259

1,009

4,508

Total segments

1,721

1,442

1,725

1,779

1,363

6,309

Corporate expenses and other unallocated
items

(25)

(27)

(42)

(46)

(25)

(140)

Eliminations and other

(130)

(46)

(87)

(83)

(151)

(367)

Acquisition accounting adjustments

(271)

(227)

(210)

(220)

(231)

(888)

Total operating profit from continuing
operations

$

1,295

$

1,142

$

1,386

$

1,430

$

956

$

4,914

2020

2019

Operating Profit Margin

Q1

Q1

Q2

Q3

Q4

FY

Pratt & Whitney

8.9

%

9.9

%

8.7

%

9.8

%

6.3

%

8.6

%

Collins Aerospace Systems

19.4

%

14.8

%

19.4

%

19.4

%

15.7

%

17.3

%

Total segments operating profit margin

14.6

%

12.7

%

14.7

%

15.1

%

11.3

%

13.4

%

Raytheon Technologies Corporation

Legacy UTC Reconciliation of Previously Reported to Reported Segment Results

(dollars in millions)

2020

2019

Q1

Q1

Q2

Q3

Q4

FY

Pratt & Whitney

Net sales, as previously reported

$

5,351

$

4,817

$

5,150

$

5,283

$

5,642

$

20,892

Corporate expense allocation adjustment

2

1

4

2

3

10

Net sales, reported

$

5,353

$

4,818

$

5,154

$

5,285

$

5,645

$

20,902

Operating profit, as previously reported

$

439

$

433

$

424

$

471

$

340

$

1,668

Corporate expense allocation adjustment

(37)

(32)

(34)

(33)

(51)

(150)

Acquisition accounting adjustment

73

77

59

82

65

283

Operating profit, reported

$

475

$

478

$

449

$

520

$

354

$

1,801

Operating profit %, as previously reported

8.2

%

9.0

%

8.2

%

8.9

%

6.0

%

8.0

%

Operating profit %, reported

8.9

%

9.9

%

8.7

%

9.8

%

6.3

%

8.6

%

Collins Aerospace Systems

Net sales, reported

$

6,438

$

6,513

$

6,576

$

6,495

$

6,444

$

26,028

Operating profit, as previously reported

$

1,092

$

856

$

1,172

$

1,167

$

905

$

4,100

Corporate expense allocation adjustment

(44)

(42)

(47)

(46)

(62)

(197)

Acquisition accounting adjustment

198

150

151

138

166

605

Operating profit, reported

$

1,246

$

964

$

1,276

$

1,259

$

1,009

$

4,508

Operating profit %, as previously reported

17.0

%

13.1

%

17.8

%

18.0

%

14.0

%

15.8

%

Operating profit %, reported

19.4

%

14.8

%

19.4

%

19.4

%

15.7

%

17.3

%

2020

2019

Total Segments

Q1

Q1

Q2

Q3

Q4

FY

Net sales, reported

$

11,791

$

11,331

$

11,730

$

11,780

$

12,089

$

46,930

Operating profit, reported

$

1,721

$

1,442

$

1,725

$

1,779

$

1,363

$

6,309

Operating profit %, reported

14.6

%

12.7

%

14.7

%

15.1

%

11.3

%

13.4

%

Corporate, Eliminations, and Other

Net sales, as previously reported

$

(433)

$

(384)

$

(402)

$

(411)

$

(398)

$

(1,595)

Adjustment for discontinued operations

2

6

6

6

6

24

Corporate Expense Allocation Adjustment

(5)

(2)

(3)

(10)

Net sales, reported

$

(431)

$

(378)

$

(401)

$

(407)

$

(395)

$

(1,581)

Operating Profit:

General corporate expenses, as
previously reported

$

(25)

$

(101)

$

(239)

$

(232)

$

(360)

$

(932)

Corporate expense allocation adjustment

74

197

186

335

792

Corporate expenses and other unallocated
items, reported

$

(25)

$

(27)

$

(42)

$

(46)

$

(25)

$

(140)

Eliminations and other, as previously
reported

$

(115)

$

(98)

$

(124)

$

(113)

$

(180)

$

(515)

Adjustment for discontinued operations

228

52

153

137

251

593

Corporate expense allocation adjustment

(243)

(116)

(107)

(222)

(445)

Eliminations and other, reported

$

(130)

$

(46)

$

(87)

$

(83)

$

(151)

$

(367)

Acquisition Accounting Adjustments,
reported

$

(271)

$

(227)

$

(210)

$

(220)

$

(231)

$

(888)

Continuing Operations, reported

Net sales, reported

$

11,360

$

10,953

$

11,329

$

11,373

$

11,694

$

45,349

Operating profit, reported

$

1,295

$

1,142

$

1,386

$

1,430

$

956

$

4,914

Operating profit %, reported

11.4

%

10.4

%

12.2

%

12.6

%

8.2

%

10.8

%

Raytheon Technologies Corporation

Legacy UTC Segment Results, Adjusted

2020

2019

Net Sales, Adjusted (dollars in millions)

Q1

Q1

Q2

Q3

Q4

FY

Pratt & Whitney

$

5,331

$

4,818

$

5,154

$

5,285

$

5,645

$

20,902

Collins Aerospace Systems

6,460

6,513

6,576

6,495

6,444

26,028

Total segments

11,791

11,331

11,730

11,780

12,089

46,930

Eliminations and other

(431)

(378)

(401)

(407)

(395)

(1,581)

Total adjusted net sales from continuing operations

$

11,360

$

10,953

$

11,329

$

11,373

$

11,694

$

45,349

2020

2019

Operating Profit, Adjusted (dollars in millions)

Q1

Q1

Q2

Q3

Q4

FY

Pratt & Whitney

$

515

$

492

$

452

$

520

$

470

$

1,934

Collins Aerospace Systems

1,284

1,209

1,293

1,286

1,061

4,849

Total segments

1,799

1,701

1,745

1,806

1,531

6,783

Corporate expenses and other unallocated items

(25)

(27)

(42)

(46)

(25)

(140)

Eliminations and other

(99)

(36)

(50)

(46)

(96)

(228)

Total adjusted operating profit from continuing operations

$

1,675

$

1,638

$

1,653

$

1,714

$

1,410

$

6,415

2020

2019

Operating Profit Margin, Adjusted

Q1

Q1

Q2

Q3

Q4

FY

Pratt & Whitney

9.7

%

10.2

%

8.8

%

9.8

%

8.3

%

9.3

%

Collins Aerospace Systems

19.9

%

18.6

%

19.7

%

19.8

%

16.5

%

18.6

%

Total Segments Adjusted Operating Profit Margin

15.3

%

15.0

%

14.9

%

15.3

%

12.7

%

14.5

%

Raytheon Technologies Corporation

Legacy UTC Reconciliation of Reported (GAAP) to Adjusted (non GAAP) Segment Results

(dollars in millions)

2020

2019

Q1

Q1

Q2

Q3

Q4

FY

Pratt & Whitney

Net sales

$

5,353

$

4,818

$

5,154

$

5,285

$

5,645

$

20,902

Favorable impact of a contract termination

22

Adjusted net sales

$

5,331

$

4,818

$

5,154

$

5,285

$

5,645

$

20,902

Operating profit, Recast

$

475

$

478

$

449

$

520

$

354

$

1,801

Restructuring

(14)

(3)

(116)

(133)

Bad debt expense driven by customer bankruptcies and
collectability risk

(62)

Favorable impact of a contract termination

22

Adjusted operating profit

$

515

$

492

$

452

$

520

$

470

$

1,934

Adjusted operating profit margin

9.7

%

10.2

%

8.8

%

9.8

%

8.3

%

9.3

%

Collins Aerospace Systems

Net sales

$

6,438

$

6,513

$

6,576

$

6,495

$

6,444

$

26,028

Significant unfavorable adjustments to contract estimates

(22)

Adjusted net sales

$

6,460

$

6,513

$

6,576

$

6,495

$

6,444

$

26,028

Operating profit

$

1,246

$

964

$

1,276

$

1,259

$

1,009

$

4,508

Restructuring

(6)

(39)

(17)

(27)

(19)

(102)

Loss on sale of business

(25)

(25)

Amortization of Rockwell Collins inventory fair value
adjustment

(181)

(181)

Costs associated with pension plan amendment

(33)

(33)

Bad debt expense driven by customer bankruptcies and
collectability risk

(10)

Significant unfavorable adjustments to contract estimates

(22)

Adjusted operating profit

$

1,284

$

1,209

$

1,293

$

1,286

$

1,061

$

4,849

Adjusted operating profit margin

19.9

%

18.6

%

19.7

%

19.8

%

16.5

%

18.6

%

Corporate, Eliminations, and Other

Net sales

$

(431)

$

(378)

$

(401)

$

(407)

$

(395)

$

(1,581)

Eliminations and other

Operating profit

$

(25)

$

(27)

$

(42)

$

(46)

$

(25)

$

(140)

Adjusted operating profit

$

(25)

$

(27)

$

(42)

$

(46)

$

(25)

$

(140)

Corporate expenses and other unallocated items

Operating profit

$

(130)

$

(46)

$

(87)

$

(83)

$

(151)

$

(367)

Restructuring

(2)

(1)

(1)

(1)

(3)

(6)

Transaction and integration costs related to merger
agreement with Rockwell Collins, Inc.

(9)

(10)

(11)

(10)

(40)

Transaction expenses associated with the Raytheon
Merger

(29)

(26)

(25)

(32)

(83)

Costs associated with pension plan amendment

(10)

(10)

Adjusted operating profit

$

(99)

$

(36)

$

(50)

$

(46)

$

(96)

$

(228)

Total Adjusted net sales from continuing operations

$

11,360

$

10,953

$

11,329

$

11,373

$

11,694

$

45,349

Total Adjusted operating profit from continuing
operations

$

1,675

$

1,638

$

1,653

$

1,714

$

1,410

$

6,415

SOURCE Raytheon Technologies

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