Raytheon Technologies Reports 2021 Results, Announces 2022 Outlook
Expects continued sales, earnings and free cash flow growth in 2022
WALTHAM, Mass., Jan. 25, 2022 /PRNewswire/ -- Raytheon Technologies Corporation (NYSE: RTX) reported fourth quarter 2021 results and announced its 2022 outlook.
Fourth quarter 2021
Fourth Quarter 2021
Raytheon Technologies reported fourth quarter sales of $17.0 billion. GAAP EPS from continuing operations was $0.46 and included $0.62 of acquisition accounting adjustments and net significant and/or non-recurring charges. This includes $0.15 of net divestiture activity related to the disposition of Raytheon Intelligence & Space's Global Training and Services business, that was offset by $0.33 of debt extinguishment costs, $0.30 of acquisition accounting adjustments primarily related to intangible amortization, $0.11 of accruals related to previously disclosed legal matters, $0.02 of restructuring and $0.01 of other items. Adjusted EPS was $1.08. The company recorded net income from continuing operations in the fourth quarter of $685 million, which included $929 million of acquisition accounting adjustments and net significant and/or nonrecurring charges. Adjusted net income was $1.6 billion. Operating cash flow from continuing operations in the fourth quarter was $3.2 billion. Capital expenditures were $1.0 billion, resulting in free cash flow of $2.2 billion.
Full Year 2021
Raytheon Technologies reported full year sales of $64.4 billion. GAAP EPS from continuing operations was $2.58 and included $1.69 of acquisition accounting adjustments and net significant and/or non-recurring charges. Adjusted EPS was $4.27. The company recorded net income from continuing operations for the year of $3.9 billion, which included $2.5 billion of acquisition accounting adjustments and net significant and/or nonrecurring charges. Adjusted net income was $6.4 billion. Operating cash flow from continuing operations for the year was $7.1 billion. Capital expenditures were $2.1 billion, resulting in full year free cash flow of $5.0 billion.
Backlog and Bookings
Backlog at the end of the fourth quarter was $156 billion, of which $93 billion was from commercial aerospace and $63 billion was from defense. Notable defense bookings during the quarter included:
The company's reportable segments are Collins Aerospace, Pratt & Whitney, Raytheon Intelligence & Space (RIS) and Raytheon Missiles & Defense (RMD).
Collins Aerospace had fourth quarter 2021 adjusted sales of $4,942 million, up 13 percent versus the prior year. The increase in sales was driven by a 47 percent increase in commercial aftermarket and a 4 percent increase in commercial OE, which more than offset a 3 percent decline in military. The increase in commercial sales was driven primarily by the recovery of commercial air traffic which has resulted in higher flight hours, aircraft fleet utilization and narrowbody OE volume, which was partially offset by lower 787 OE and F-35 volume. Collins Aerospace recorded adjusted operating profit of $469 million in the quarter, up 427 percent versus the prior year. The increase in adjusted operating profit was primarily driven by drop through on higher commercial aftermarket volume that was partially offset by higher E&D and SG&A expense.
Pratt & Whitney had fourth quarter 2021 adjusted sales of $5,115 million, up 14 percent versus the prior year. The increase in sales was driven by a 32 percent increase in commercial OE and a 28 percent increase in commercial aftermarket, which more than offset a 6 percent decrease in military. The increase in commercial sales was primarily due to higher shop visits and related spare part sales and commercial engine deliveries principally driven by the recovery in commercial air traffic. The decrease in military sales was driven by lower spares sales on legacy programs. Pratt & Whitney recorded adjusted operating profit of $162 million in the quarter, up 54 percent versus the prior year. The increase in adjusted operating profit was primarily driven by drop through on higher commercial aftermarket sales volume, that was offset by higher SG&A and E&D expense and lower military volume on legacy programs.
RIS had fourth quarter 2021 adjusted sales of $3,870 million, down 2 percent versus the prior year. The decrease in sales was primarily driven by fewer workdays in the quarter as well as the divestiture of the Global Training and Services business at the beginning of December. Excluding the impact of acquisitions and divestitures, sales were down 1 percent. RIS recorded adjusted operating profit of $400 million, up 11 percent versus the prior year. The increase in adjusted operating profit was primarily driven by productivity across various programs.
RMD had fourth quarter 2021 adjusted sales of $3,859 million, down 10 percent versus prior year. The decrease in sales was primarily driven by four fewer workdays in the quarter as well as lower material receipts and expected declines on several international production contracts. RMD recorded adjusted operating profit of $486 million, down 16 percent versus the prior year. The decrease in adjusted operating profit was driven by lower net program efficiencies and lower sales volume. About Raytheon Technologies
Raytheon Technologies Corporation is an aerospace and defense company that provides advanced systems and services for commercial, military and government customers worldwide. With four industry-leading businesses ― Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space and Raytheon Missiles & Defense ― the company delivers solutions that push the boundaries in avionics, cybersecurity, directed energy, electric propulsion, hypersonics, and quantum physics. The company, formed in 2020 through the combination of Raytheon Company and the United Technologies Corporation aerospace businesses, is headquartered in Waltham, Massachusetts. Conference Call on the Fourth Quarter 2021 Financial Results
Raytheon Technologies' financial results conference call will be held on Tuesday, January 25, 2022 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 5177315. The conference call will also be audiocast on the Internet at www.rtx.com. Individuals may listen to the call and download charts that will be used during the call. These charts will be available for download 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 and any changes therein, including financial market conditions, fluctuations in commodity prices, inflation, interest rates and foreign currency exchange rates, and geopolitical risks; (2) the effect of and risks relating to 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 disruption to business and other commercial activities, the impact on the demand for RTC's products and services, the disruption to global supply and distribution capabilities which have impacted supplies required for RTC's performance, the financial condition of RTC's customers and suppliers, challenges relating to employee health, safety, and availability and workplace and facility operations, and the timing and extent of the recovery from COVID-19 and the impact on such recovery from new COVID-19 variants and outbreaks, vaccine-related issues and other future developments; (3) risks associated with U.S. government sales, including changes or shifts in defense spending due to budgetary constraints, spending cuts resulting from sequestration or the allocation of funds to governmental responses to COVID-19, a continuing resolution, a government shutdown, or otherwise, and uncertain funding of programs; (4) 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; (5) risks relating to RTC international operations from, among other things, changes in trade policies, 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 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. 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SOURCE Raytheon Technologies
- Sales of $17.0 billion
- GAAP EPS from continuing operations of $0.46, which included $0.62 of acquisition accounting adjustments and net significant and/or non-recurring charges
- Adjusted EPS of $1.08
- Operating cash flow from continuing operations of $3.2 billion; Free cash flow of $2.2 billion
- Completed the acquisitions of FlightAware and SEAKR Engineering, and the disposition of RIS' Global Training and Services business
- Achieved approximately $190 million of incremental RTX gross cost synergies
- Company backlog of $156 billion; including defense backlog of $63 billion
- Repurchased $327 million of RTX shares
- Sales of $64.4 billion
- GAAP EPS of $2.58
- Adjusted EPS of $4.27
- Operating cash flow from continuing operations of $7.1 billion; Free cash flow of $5.0 billion
- Achieved approximately $760 million of incremental RTX gross cost synergies
- Repurchased $2.3 billion of RTX shares
- Sales of $68.5 - $69.5 billion
- Adjusted EPS of $4.60 - $4.80
- Free cash flow of approximately $6.0 billion. Assumes the legislation requiring R&D capitalization for tax purposes is deferred beyond 2022.
- Share repurchase of at least $2.5 billion of RTX shares
Fourth Quarter 2021
Raytheon Technologies reported fourth quarter sales of $17.0 billion. GAAP EPS from continuing operations was $0.46 and included $0.62 of acquisition accounting adjustments and net significant and/or non-recurring charges. This includes $0.15 of net divestiture activity related to the disposition of Raytheon Intelligence & Space's Global Training and Services business, that was offset by $0.33 of debt extinguishment costs, $0.30 of acquisition accounting adjustments primarily related to intangible amortization, $0.11 of accruals related to previously disclosed legal matters, $0.02 of restructuring and $0.01 of other items. Adjusted EPS was $1.08. The company recorded net income from continuing operations in the fourth quarter of $685 million, which included $929 million of acquisition accounting adjustments and net significant and/or nonrecurring charges. Adjusted net income was $1.6 billion. Operating cash flow from continuing operations in the fourth quarter was $3.2 billion. Capital expenditures were $1.0 billion, resulting in free cash flow of $2.2 billion.
Full Year 2021
Raytheon Technologies reported full year sales of $64.4 billion. GAAP EPS from continuing operations was $2.58 and included $1.69 of acquisition accounting adjustments and net significant and/or non-recurring charges. Adjusted EPS was $4.27. The company recorded net income from continuing operations for the year of $3.9 billion, which included $2.5 billion of acquisition accounting adjustments and net significant and/or nonrecurring charges. Adjusted net income was $6.4 billion. Operating cash flow from continuing operations for the year was $7.1 billion. Capital expenditures were $2.1 billion, resulting in full year free cash flow of $5.0 billion.
| Summary Financial Results – Continuing Operations | ||||||||
|---|---|---|---|---|---|---|---|---|
| 4th Quarter | Twelve Months | |||||||
| ($ in millions, except EPS) | 2021 | 2020 | % Change | 2021 | 2020 | % Change | ||
| Reported | ||||||||
| Sales | $ 17,044 | $ 16,419 | 4 % | $ 64,388 | $ 56,587 | 14 % | ||
| Net Income (Loss) | $ 685 | $ 146 | 369 % | $ 3,897 | $ (3,109) | NM | ||
| EPS | $ 0.46 | $ 0.10 | 360 % | $ 2.58 | $ (2.29) | NM | ||
| Adjusted | ||||||||
| Sales | $ 17,044 | $ 16,583 | 3 % | $ 64,388 | $ 57,148 | 13 % | ||
| Net Income | $ 1,614 | $ 1,122 | 44 % | $ 6,445 | $ 3,711 | 74 % | ||
| EPS | $ 1.08 | $ 0.74 | 46 % | $ 4.27 | $ 2.73 | 56 % | ||
| Operating Cash Flow from Continuing Operations | $ 3,161 | $ 1,370 | 131 % | $ 7,142 | $ 4,334 | 65 % | ||
| Free Cash Flow | $ 2,207 | $ 747 | 195 % | $ 5,008 | $ 2,539 | 97 % | ||
| NM = Not Meaningful | ||||||||
Backlog and Bookings
Backlog at the end of the fourth quarter was $156 billion, of which $93 billion was from commercial aerospace and $63 billion was from defense. Notable defense bookings during the quarter included:
- $1.3 billion of classified bookings at Raytheon Intelligence & Space (RIS)
- $729 million for two Standard Missile-2 (SM-2) production contracts for the U.S. Navy and international customers at Raytheon Missiles & Defense (RMD)
- $672 million of Electro-Optical Infrared (EO/IR) products and services contracts, including the Electro-Optical Distributed Aperture System (EODAS) for the F-35 at RIS
- $592 million for an F135 sustainment contract at Pratt & Whitney
- $435 million for an F119 sustainment contract at Pratt & Whitney
- $269 million for Evolved Seasparrow Missile (ESSM) for the U.S. Navy and international customers at RMD
- $255 million for F-135 production contracts at Pratt & Whitney
- $227 million for the Next Generation Jammer (NGJ) Mid-Band for the U.S. Navy at RIS
The company's reportable segments are Collins Aerospace, Pratt & Whitney, Raytheon Intelligence & Space (RIS) and Raytheon Missiles & Defense (RMD).
| Collins Aerospace | ||||||
|---|---|---|---|---|---|---|
| 4th Quarter | Twelve Months | |||||
| ($ in millions) | 2021 | 2020 | Change | 2021 | 2020 | % Change |
| Reported | ||||||
| Sales | $ 4,942 | $ 4,374 | 13 % | $ 18,449 | $ 19,288 | (4) % |
| Operating Profit | $ 461 | $ 11 | 4091 % | $ 1,759 | $ 1,466 | 20 % |
| ROS | 9.3 % | 0.3 % | 900 bps | 9.5 % | 7.6 % | 190 bps |
| Adjusted | ||||||
| Sales | $ 4,942 | $ 4,388 | 13 % | $ 18,449 | $ 19,424 | (5) % |
| Operating Profit | $ 469 | $ 89 | 427 % | $ 1,799 | $ 1,470 | 22 % |
| ROS | 9.5 % | 2.0 % | 750 bps | 9.8 % | 7.6 % | 220 bps |
Collins Aerospace had fourth quarter 2021 adjusted sales of $4,942 million, up 13 percent versus the prior year. The increase in sales was driven by a 47 percent increase in commercial aftermarket and a 4 percent increase in commercial OE, which more than offset a 3 percent decline in military. The increase in commercial sales was driven primarily by the recovery of commercial air traffic which has resulted in higher flight hours, aircraft fleet utilization and narrowbody OE volume, which was partially offset by lower 787 OE and F-35 volume. Collins Aerospace recorded adjusted operating profit of $469 million in the quarter, up 427 percent versus the prior year. The increase in adjusted operating profit was primarily driven by drop through on higher commercial aftermarket volume that was partially offset by higher E&D and SG&A expense.
| Pratt & Whitney | ||||||
|---|---|---|---|---|---|---|
| 4th Quarter | Twelve Months | |||||
| ($ in millions) | 2021 | 2020 | Change | 2021 | 2020 | % Change |
| Reported | ||||||
| Sales | $ 5,115 | $ 4,465 | 15 % | $ 18,150 | $ 16,799 | 8 % |
| Operating Profit (Loss) | $ 135 | $ 33 | 309 % | $ 454 | $ (564) | NM |
| ROS | 2.6 % | 0.7 % | 190 bps | 2.5 % | (3.4) % | 590 bps |
| Adjusted | ||||||
| Sales | $ 5,115 | $ 4,496 | 14 % | $ 18,150 | $ 17,224 | 5 % |
| Operating Profit | $ 162 | $ 105 | 54 % | $ 487 | $ 426 | 14 % |
| ROS | 3.2 % | 2.3 % | 90 bps | 2.7 % | 2.5 % | 20 bps |
| NM = Not Meaningful | ||||||
Pratt & Whitney had fourth quarter 2021 adjusted sales of $5,115 million, up 14 percent versus the prior year. The increase in sales was driven by a 32 percent increase in commercial OE and a 28 percent increase in commercial aftermarket, which more than offset a 6 percent decrease in military. The increase in commercial sales was primarily due to higher shop visits and related spare part sales and commercial engine deliveries principally driven by the recovery in commercial air traffic. The decrease in military sales was driven by lower spares sales on legacy programs. Pratt & Whitney recorded adjusted operating profit of $162 million in the quarter, up 54 percent versus the prior year. The increase in adjusted operating profit was primarily driven by drop through on higher commercial aftermarket sales volume, that was offset by higher SG&A and E&D expense and lower military volume on legacy programs.
| Raytheon Intelligence & Space | ||||||
|---|---|---|---|---|---|---|
| 4th Quarter | Twelve Months | |||||
| ($ in millions) | 2021 | 2020(1) | Change | 2021 | 2020(1) | Change |
| Reported | ||||||
| Sales | $ 3,870 | $ 3,933 | (2) % | $ 15,180 | $ 11,069 | 37 % |
| Operating Profit | $ 639 | $ 361 | 77 % | $ 1,833 | $ 1,020 | 80 % |
| ROS | 16.5 % | 9.2 % | 730 bps | 12.1 % | 9.2 % | 290 bps |
| Adjusted | ||||||
| Sales | $ 3,870 | $ 3,933 | (2) % | $ 15,180 | $ 11,069 | 37 % |
| Operating Profit | $ 400 | $ 361 | 11 % | $ 1,594 | $ 1,020 | 56 % |
| ROS | 10.3 % | 9.2 % | 110 bps | 10.5 % | 9.2 % | 130 bps |
|
(1) Prior year results have been adjusted to reflect the previously communicated reorganization of the RIS and RMD segments, which became effective on January 1, 2021. |
||||||
RIS had fourth quarter 2021 adjusted sales of $3,870 million, down 2 percent versus the prior year. The decrease in sales was primarily driven by fewer workdays in the quarter as well as the divestiture of the Global Training and Services business at the beginning of December. Excluding the impact of acquisitions and divestitures, sales were down 1 percent. RIS recorded adjusted operating profit of $400 million, up 11 percent versus the prior year. The increase in adjusted operating profit was primarily driven by productivity across various programs.
| Raytheon Missiles & Defense | ||||||
|---|---|---|---|---|---|---|
| 4th Quarter | Twelve Months | |||||
| ($ in millions) | 2021 | 2020(1) | Change | 2021 | 2020(1) | Change |
| Reported | ||||||
| Sales | $ 3,859 | $ 4,184 | (8) % | $ 15,539 | $ 11,396 | 36 % |
| Operating Profit | $ 486 | $ 33 | 1373 % | $ 2,004 | $ 880 | 128 % |
| ROS | 12.6 % | 0.8 % | 1180 bps | 12.9 % | 7.7 % | 520 bps |
| Adjusted | ||||||
| Sales | $ 3,859 | $ 4,303 | (10) % | $ 15,539 | $ 11,396 | 36 % |
| Operating Profit | $ 486 | $ 579 | (16) % | $ 2,004 | $ 1,396 | 44 % |
| ROS | 12.6 % | 13.5 % | (90) bps | 12.9 % | 12.2 % | 70 bps |
|
(1) Prior year results have been adjusted to reflect the previously communicated reorganization of the RIS and RMD segments, which became effective on January 1, 2021. |
||||||
RMD had fourth quarter 2021 adjusted sales of $3,859 million, down 10 percent versus prior year. The decrease in sales was primarily driven by four fewer workdays in the quarter as well as lower material receipts and expected declines on several international production contracts. RMD recorded adjusted operating profit of $486 million, down 16 percent versus the prior year. The decrease in adjusted operating profit was driven by lower net program efficiencies and lower sales volume. About Raytheon Technologies
Raytheon Technologies Corporation is an aerospace and defense company that provides advanced systems and services for commercial, military and government customers worldwide. With four industry-leading businesses ― Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space and Raytheon Missiles & Defense ― the company delivers solutions that push the boundaries in avionics, cybersecurity, directed energy, electric propulsion, hypersonics, and quantum physics. The company, formed in 2020 through the combination of Raytheon Company and the United Technologies Corporation aerospace businesses, is headquartered in Waltham, Massachusetts. Conference Call on the Fourth Quarter 2021 Financial Results
Raytheon Technologies' financial results conference call will be held on Tuesday, January 25, 2022 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 5177315. The conference call will also be audiocast on the Internet at www.rtx.com. Individuals may listen to the call and download charts that will be used during the call. These charts will be available for download 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 and any changes therein, including financial market conditions, fluctuations in commodity prices, inflation, interest rates and foreign currency exchange rates, and geopolitical risks; (2) the effect of and risks relating to 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 disruption to business and other commercial activities, the impact on the demand for RTC's products and services, the disruption to global supply and distribution capabilities which have impacted supplies required for RTC's performance, the financial condition of RTC's customers and suppliers, challenges relating to employee health, safety, and availability and workplace and facility operations, and the timing and extent of the recovery from COVID-19 and the impact on such recovery from new COVID-19 variants and outbreaks, vaccine-related issues and other future developments; (3) risks associated with U.S. government sales, including changes or shifts in defense spending due to budgetary constraints, spending cuts resulting from sequestration or the allocation of funds to governmental responses to COVID-19, a continuing resolution, a government shutdown, or otherwise, and uncertain funding of programs; (4) 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; (5) risks relating to RTC international operations from, among other things, changes in trade policies, 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 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. RTC-IR Media Contact
202.360.8473 Investor Contact
781.522.5123
| Raytheon Technologies Corporation | ||||
|---|---|---|---|---|
| Consolidated Statement of Operations | ||||
| Quarter Ended December 31, | Twelve Months Ended December 31, | |||
| (Unaudited) | (Unaudited) | |||
|
(dollars in millions, except per share amounts; shares in millions) |
2021 | 2020 | 2021 | 2020 |
| Net Sales | $ 17,044 | $ 16,419 | $ 64,388 | $ 56,587 |
| Costs and Expenses: | ||||
| Cost of sales | 13,616 | 14,266 | 51,897 | 48,056 |
| Research and development | 810 | 710 | 2,732 | 2,582 |
| Selling, general and administrative | 1,407 | 1,351 | 5,224 | 5,540 |
| Total Costs and Expenses | 15,833 | 16,327 | 59,853 | 56,178 |
| Goodwill impairment | — | — | — | (3,183) |
| Other income, net | 109 | 50 | 423 | 885 |
| Operating profit (loss) | 1,320 | 142 | 4,958 | (1,889) |
| Non-service pension income | (472) | (244) | (1,944) | (902) |
| Debt extinguishment costs | 617 | — | 649 | — |
| Interest expense, net | 308 | 349 | 1,322 | 1,366 |
|
Income (loss) from continuing operations before income taxes |
867 | 37 | 4,931 | (2,353) |
| Income tax expense | 96 | (178) | 786 | 575 |
|
Net income (loss) from continuing operations |
771 | 215 | 4,145 | (2,928) |
|
Less: Noncontrolling interest in subsidiaries' earnings from continuing operations |
86 | 69 | 248 | 181 |
|
Income (loss) from continuing operations attributable to common shareowners |
685 | 146 | 3,897 | (3,109) |
| Discontinued operations: | ||||
|
Income (loss) from discontinued operations, before tax |
21 | 3 | (10) | (216) |
|
Income tax expense from discontinued operations |
20 | 14 | 23 | 151 |
|
Net income (loss) from discontinued operations |
1 | (11) | (33) | (367) |
|
Less: Noncontrolling interest in subsidiaries' earnings from discontinued operations |
— | — | — | 43 |
|
Income (loss) from discontinued operations attributable to common shareowners |
1 | (11) | (33) | (410) |
|
Net income (loss) attributable to common shareowners |
$ 686 | $ 135 | $ 3,864 | $ (3,519) |
|
Earnings (loss) Per Share attributable to common shareowners - Basic: |
||||
|
Income (loss) from continuing operations |
$ 0.46 | $ 0.10 | $ 2.60 | $ (2.29) |
|
Income (loss) from discontinued operations |
— | (0.01) | (0.03) | (0.30) |
|
Net income (loss) attributable to common shareowners |
$ 0.46 | $ 0.09 | $ 2.57 | $ (2.59) |
|
Earnings (loss) Per Share attributable to common shareowners - Diluted: |
||||
|
Income (loss) from continuing operations |
$ 0.46 | $ 0.10 | $ 2.58 | $ (2.29) |
|
Income (loss) from discontinued operations |
— | (0.01) | (0.02) | (0.30) |
|
Net income (loss) attributable to common shareowners |
$ 0.46 | $ 0.09 | $ 2.56 | $ (2.59) |
| Weighted Average Shares Outstanding: | ||||
| Basic shares | 1,490.5 | 1,512.3 | 1,501.6 | 1,357.8 |
| Diluted shares | 1,500.2 | 1,515.4 | 1,508.5 | 1,357.8 |
| Raytheon Technologies Corporation | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Segment Net Sales and Operating Profit (Loss) |
||||||||||||||
| Quarter Ended | Twelve Months Ended | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||
| December 31, 2021 | December 31, 2020(1) | December 31, 2021 | December 31, 2020(1) | |||||||||||
| (dollars in millions) | Reported | Adjusted | Reported | Adjusted | Reported | Adjusted | Reported | Adjusted | ||||||
| Net Sales | ||||||||||||||
| Collins Aerospace Systems | $ 4,942 | $ 4,942 | $ 4,374 | $ 4,388 | $ 18,449 | $ 18,449 | $ 19,288 | $ 19,424 | ||||||
| Pratt & Whitney | 5,115 | 5,115 | 4,465 | 4,496 | 18,150 | 18,150 | 16,799 | 17,224 | ||||||
| Raytheon Intelligence & Space | 3,870 | 3,870 | 3,933 | 3,933 | 15,180 | 15,180 | 11,069 | 11,069 | ||||||
| Raytheon Missiles & Defense | 3,859 | 3,859 | 4,184 | 4,303 | 15,539 | 15,539 | 11,396 | 11,396 | ||||||
| Total segments | 17,786 | 17,786 | 16,956 | 17,120 | 67,318 | 67,318 | 58,552 | 59,113 | ||||||
| Eliminations and other | (742) | (742) | (537) | (537) | (2,930) | (2,930) | (1,965) | (1,965) | ||||||
| Consolidated | $ 17,044 | $ 17,044 | $ 16,419 | $16,583 | $ 64,388 | $ 64,388 | $ 56,587 | $ 57,148 | ||||||
| Operating Profit (Loss) | ||||||||||||||
| Collins Aerospace Systems | $ 461 | $ 469 | $ 11 | $ 89 | $ 1,759 | $ 1,799 | $ 1,466 | $ 1,470 | ||||||
| Pratt & Whitney | 135 | 162 | 33 | 105 | 454 | 487 | (564) | 426 | ||||||
| Raytheon Intelligence & Space | 639 | 400 | 361 | 361 | 1,833 | 1,594 | 1,020 | 1,020 | ||||||
| Raytheon Missiles & Defense | 486 | 486 | 33 | 579 | 2,004 | 2,004 | 880 | 1,396 | ||||||
| Total segments | 1,721 | 1,517 | 438 | 1,134 | 6,050 | 5,884 | 2,802 | 4,312 | ||||||
| Eliminations and other | (35) | (35) | (6) | (9) | (133) | (133) | (107) | (87) | ||||||
|
Corporate expenses and other unallocated items |
(233) | (70) | (99) | (61) | (552) | (284) | (590) | (194) | ||||||
|
FAS/CAS operating adjustment |
449 | 449 | 370 | 370 | 1,796 | 1,796 | 1,106 | 1,106 | ||||||
|
Acquisition accounting adjustments |
(582) | — | (561) | — | (2,203) | — | (5,100) | — | ||||||
| Consolidated | $ 1,320 | $ 1,861 | $ 142 | $ 1,434 | $ 4,958 | $ 7,263 | $ (1,889) | $ 5,137 | ||||||
|
Segment Operating Profit (Loss) Margin |
||||||||||||||
| Collins Aerospace Systems | 9.3 % | 9.5 % | 0.3 % | 2.0 % | 9.5 % | 9.8 % | 7.6 % | 7.6 % | ||||||
| Pratt & Whitney | 2.6 % | 3.2 % | 0.7 % | 2.3 % | 2.5 % | 2.7 % | (3.4) % | 2.5 % | ||||||
| Raytheon Intelligence & Space | 16.5 % | 10.3 % | 9.2 % | 9.2 % | 12.1 % | 10.5 % | 9.2 % | 9.2 % | ||||||
| Raytheon Missiles & Defense | 12.6 % | 12.6 % | 0.8 % | 13.5 % | 12.9 % | 12.9 % | 7.7 % | 12.2 % | ||||||
| Total segment | 9.7 % | 8.5 % | 2.6 % | 6.6 % | 9.0 % | 8.7 % | 4.8 % | 7.3 % | ||||||
- Effective January 1, 2021, we reorganized certain product areas of our Raytheon Intelligence & Space (RIS) and Raytheon Missiles & Defense (RMD) businesses to more efficiently leverage our capabilities and we have reclassified the prior year numbers in the table above. The reorganization does not impact our previously reported Collins Aerospace Systems and Pratt & Whitney segment results, or our consolidated balance sheets, statements of operations or statements of cash flows.
| Raytheon Technologies Corporation | ||
|---|---|---|
| Consolidated Balance Sheet | ||
| December 31, 2021 | December 31, 2020 | |
| (dollars in millions) | (Unaudited) | (Unaudited) |
| Assets | ||
| Cash and cash equivalents | $ 7,832 | $ 8,802 |
| Accounts receivable, net | 9,661 | 9,254 |
| Contract assets | 11,361 | 9,931 |
| Inventory, net | 9,178 | 9,411 |
| Other assets, current | 4,018 | 5,978 |
| Total Current Assets | 42,050 | 43,376 |
| Customer financing assets | 2,848 | 3,144 |
| Fixed assets, net | 14,972 | 14,962 |
| Operating lease right-of-use assets | 1,958 | 1,880 |
| Goodwill | 54,436 | 54,285 |
| Intangible assets, net | 38,516 | 40,539 |
| Other assets | 6,624 | 3,967 |
| Total Assets | $ 161,404 | $162,153 |
| Liabilities, Redeemable Noncontrolling Interest and Equity | ||
| Short-term borrowings | $ 134 | $ 247 |
| Accounts payable | 8,751 | 8,639 |
| Accrued employee compensation | 2,658 | 3,006 |
| Other accrued liabilities | 10,162 | 10,517 |
| Contract liabilities | 13,720 | 12,889 |
| Long-term debt currently due | 24 | 550 |
| Total Current Liabilities | 35,449 | 35,848 |
| Long-term debt | 31,327 | 31,026 |
| Operating lease liabilities, non-current | 1,657 | 1,516 |
| Future pension and postretirement benefit obligations | 7,855 | 10,342 |
| Other long-term liabilities | 10,417 | 9,537 |
| Total Liabilities | 86,705 | 88,269 |
| Redeemable noncontrolling interest | 35 | 32 |
| Shareowners' Equity: | ||
| Common Stock | 37,445 | 36,881 |
| Treasury Stock | (12,727) | (10,407) |
| Retained earnings | 50,265 | 49,423 |
| Accumulated other comprehensive loss | (1,915) | (3,734) |
| Total Shareowners' Equity | 73,068 | 72,163 |
| Noncontrolling interest | 1,596 | 1,689 |
| Total Equity | 74,664 | 73,852 |
| Total Liabilities, Redeemable Noncontrolling Interest and Equity | $ 161,404 | $ 162,153 |
| Raytheon Technologies Corporation | ||||
|---|---|---|---|---|
| Consolidated Statement of Cash Flows | ||||
| Quarter Ended December 31, | Twelve Months Ended December 31, | |||
| (Unaudited) | (Unaudited) | |||
| (dollars in millions) | 2021 | 2020 | 2021 | 2020 |
| Operating Activities: | ||||
| Net income (loss) from continuing operations | $ 771 | $ 215 | $ 4,145 | $ (2,928) |
|
Adjustments to reconcile net income (loss) from continuing operations to net cash flows provided by operating activities: |
||||
| Depreciation and amortization | 1,144 | 1,153 | 4,557 | 4,156 |
| Deferred income tax (benefit) provision | 54 | (65) | (88) | (99) |
| Stock compensation cost | 99 | 77 | 442 | 330 |
|
Net periodic pension and other postretirement income |
(341) | (88) | (1,414) | (413) |
| Debt extinguishment costs | 617 | — | 649 | — |
| Goodwill impairment charge | — | — | — | 3,183 |
| Change in: | ||||
| Accounts receivable | (173) | 751 | (570) | 1,318 |
| Contract assets | (477) | (636) | (1,594) | 63 |
| Inventory | 220 | 523 | 163 | 412 |
| Other current assets | (291) | (64) | (566) | (445) |
| Accounts payable and accrued liabilities | 492 | (800) | 917 | (1,666) |
| Contract liabilities | 1,289 | 775 | 1,372 | 1,129 |
| Global pension contributions | (21) | (961) | (59) | (1,025) |
| Other operating activities, net | (222) | 490 | (812) | 319 |
|
Net cash flows provided by operating activities from continuing operations |
3,161 | 1,370 | 7,142 | 4,334 |
| Investing Activities: | ||||
| Capital expenditures | (954) | (623) | (2,134) | (1,795) |
| Investments in businesses | (1,082) | (419) | (1,088) | (419) |
|
Dispositions of businesses, net of cash transferred |
805 | (19) | 1,879 | 2,556 |
| Cash acquired in Raytheon Merger | — | — | — | 3,208 |
|
Receipts (payments) on customer financing assets, net |
134 | 226 | 158 | 88 |
| Increase in collaboration intangible assets | (50) | (36) | (188) | (172) |
|
(Payments) receipts from settlements of derivative contracts, net |
(58) | 83 | (16) | (32) |
| Other investing activities, net | (20) | (21) | 25 | (91) |
|
Net cash flows (used in) provided by investing activities from continuing operations |
(1,225) | (809) | (1,364) | 3,343 |
| Financing Activities: | ||||
| Issuance of long-term debt | 2,081 | 5 | 4,062 | 2,004 |
| Distribution from discontinued operations | — | — | — | 17,207 |
| Repayment of long-term debt | (1,747) | (1,030) | (4,254) | (16,082) |
| Debt extinguishment costs | (609) | — | (649) | — |
|
(Decrease) increase in short-term borrowings, net |
(72) | 19 | (113) | (2,041) |
|
Proceeds from Common Stock issued under employee stock plans |
4 | 9 | 7 | 15 |
| Dividends paid on Common Stock | (745) | (706) | (2,957) | (2,732) |
| Repurchase of Common Stock | (327) | — | (2,327) | (47) |
| Net transfer to discontinued operations | (44) | (35) | (71) | (2,033) |
| Other financing activities, net | (115) | (66) | (454) | (151) |
|
Net cash flows used in financing activities from continuing operations |
(1,574) | (1,804) | (6,756) | (3,860) |
| Discontinued Operations: | ||||
|
Net cash (used in) provided by operating activities |
(44) | (35) | (71) | (728) |
| Net cash used in investing activities | — | — | — | (241) |
|
Net cash provided by (used in) financing activities |
44 | 35 | 71 | (1,414) |
| Net cash used in discontinued operations | — | — | — | (2,383) |
|
Effect of foreign exchange rate changes on cash and cash equivalents from continuing operations |
(11) | 43 | (1) | 54 |
|
Effect of foreign exchange rate changes on cash and cash equivalents from discontinued operations |
— | — | — | (76) |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
351 | (1,200) | (979) | 1,412 |
|
Cash, cash equivalents and restricted cash, beginning of year |
7,502 | 10,032 | 8,832 | 4,961 |
|
Cash, cash equivalents and restricted cash within assets related to discontinued operations, beginning of year |
— | — | — | 2,459 |
|
Cash, cash equivalents and restricted cash, end of year |
7,853 | 8,832 | 7,853 | 8,832 |
|
Less: Restricted cash, included in Other assets |
21 | 30 | 21 | 30 |
| Cash and cash equivalents, end of year | $ 7,832 | $ 8,802 | $ 7,832 | $ 8,802 |
| Raytheon Technologies Corporation | ||||||
|---|---|---|---|---|---|---|
| Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results | ||||||
| Adjusted Sales, Adjusted Operating Profit & Operating Profit Margin | ||||||
| Quarter Ended December 31, | Twelve Months Ended December 31, | |||||
| (Unaudited) | (Unaudited) | |||||
| (dollars in millions - Income (Expense)) | 2021 | 2020(2) | 2021 | 2020(2) | ||
| Collins Aerospace Systems | ||||||
| Net sales | $ 4,942 | $ 4,374 | $ 18,449 | $19,288 | ||
| Significant unfavorable contract adjustments(1) | — | (14) | — | (136) | ||
| Adjusted net sales | $ 4,942 | $ 4,388 | $ 18,449 | $19,424 | ||
| Operating profit | $ 461 | $ 11 | $ 1,759 | $ 1,466 | ||
| Restructuring | (8) | (65) | (40) | (360) | ||
| Significant unfavorable contract adjustments(1) | — | (14) | — | (183) | ||
|
Charges related to customer bankruptcies and collectability risk(1) |
— | (2) | — | (125) | ||
| Foreign government wage subsidies(1) | — | 16 | — | 72 | ||
| Fixed asset impairment(1) | — | — | — | (3) | ||
| Gain on sale of businesses | — | (13) | — | 595 | ||
| Adjusted operating profit | $ 469 | $ 89 | $ 1,799 | $ 1,470 | ||
| Adjusted operating profit margin | 9.5 % | 2.0 % | 9.8 % | 7.6 % | ||
| Pratt & Whitney | ||||||
| Net sales | $ 5,115 | $ 4,465 | $ 18,150 | $ 16,799 | ||
|
Favorable impact of a contract termination(1) |
— | — | — | 22 | ||
|
Significant unfavorable contract adjustments(1) |
— | (31) | — | (447) | ||
| Adjusted net sales | $ 5,115 | $ 4,496 | $ 18,150 | $ 17,224 | ||
| Operating profit (loss) | $ 135 | $ 33 | $ 454 | $ (564) | ||
| Restructuring | (1) | (10) | (7) | (180) | ||
| Litigation accrual | (26) | — | (26) | — | ||
|
Charges related to customer bankruptcies and collectability risk(1) |
— | (28) | — | (262) | ||
|
Significant unfavorable contract adjustments(1) |
— | (27) | — | (680) | ||
| Foreign government wage subsidies(1) | — | 36 | — | 153 | ||
|
Charges related to a commercial financing arrangement(1) |
— | (43) | — | (43) | ||
|
Favorable impact of a contract termination(1) |
— | — | — | 22 | ||
| Adjusted operating profit | $ 162 | $ 105 | $ 487 | $ 426 | ||
| Adjusted operating profit margin | 3.2 % | 2.3 % | 2.7 % | 2.5 % | ||
| Raytheon Intelligence & Space | ||||||
| Net sales | $ 3,870 | $ 3,933 | $ 15,180 | $ 11,069 | ||
| Operating profit | $ 639 | $ 361 | $ 1,833 | $ 1,020 | ||
| Gain on sale of business | 239 | — | 239 | — | ||
| Adjusted operating profit | $ 400 | $ 361 | $ 1,594 | $ 1,020 | ||
| Adjusted operating profit margin | 10.3 % | 9.2 % | 10.5 % | 9.2 % | ||
| Raytheon Missiles & Defense | ||||||
| Net sales | $ 3,859 | $ 4,184 | $ 15,539 | $ 11,396 | ||
| Middle East contract adjustment | — | (119) | — | — | ||
| Adjusted net sales | $ 3,859 | $ 4,303 | $ 15,539 | $ 11,396 | ||
| Operating profit | $ 486 | $ 33 | $ 2,004 | $ 880 | ||
| Middle East contract adjustment | — | (546) | — | (516) | ||
| Adjusted operating profit | $ 486 | $ 579 | $ 2,004 | $ 1,396 | ||
| Adjusted operating profit margin | 12.6 % | 13.5 % | 12.9 % | 12.2 % | ||
| Eliminations and Other | ||||||
| Net sales | $ (742) | $ (537) | $ (2,930) | $ (1,965) | ||
| Operating loss | $ (35) | $ (6) | $ (133) | $ (107) | ||
| Restructuring | — | 3 | — | (20) | ||
| Adjusted operating loss | $ (35) | $ (9) | $ (133) | $ (87) | ||
|
Corporate expenses and other unallocated items |
||||||
| Operating loss | $ (233) | $ (99) | $ (552) | $ (590) | ||
| Restructuring | (16) | (16) | (96) | (208) | ||
| Litigation accrual | (147) | — | (147) | — | ||
|
Costs associated with the separation of the commercial businesses |
— | (2) | (8) | (23) | ||
|
Transaction and integration costs associated with the Raytheon Merger |
— | (20) | (17) | (165) | ||
| Adjusted operating loss | $ (70) | $ (61) | $ (284) | $ (194) | ||
| FAS/CAS Operating Adjustment | ||||||
| Operating profit | $ 449 | $ 370 | $ 1,796 | $ 1,106 | ||
| Acquisition Accounting Adjustments | ||||||
| Operating loss | $ (582) | $ (561) | $ (2,203) | $ (5,100) | ||
| Intangible impairment(1) | — | — | — | (57) | ||
| Goodwill impairment(1) | — | — | — | (3,183) | ||
| Acquisition accounting adjustments | (582) | (561) | (2,203) | (1,860) | ||
| Adjusted operating profit | $ — | $ — | $ — | $ — | ||
| RTC Consolidated | ||||||
| Net sales | $ 17,044 | $ 16,419 | $ 64,388 | $ 56,587 | ||
| Favorable impact of a contract termination | — | — | — | 22 | ||
| Significant unfavorable contract adjustments | — | (45) | — | (583) | ||
| Middle East contract adjustment | — | (119) | — | — | ||
| Adjusted net sales | $ 17,044 | $ 16,583 | $ 64,388 | $ 57,148 | ||
| Operating profit (loss) | $ 1,320 | $ 142 | $ 4,958 | $ (1,889) | ||
| Restructuring | (25) | (88) | (143) | (768) | ||
| Acquisition accounting adjustments | (582) | (561) | (2,203) | (1,860) | ||
|
Total significant non-recurring and non-operational items included in Operating profit (loss) above |
66 | (643) | 41 | (4,398) | ||
| Adjusted operating profit | $ 1,861 | $ 1,434 | $ 7,263 | $ 5,137 | ||
-
Total significant non-recurring and non-operational items in the table above for the quarter and twelve months ended December 31, 2020 includes a net pre-tax charge of $0.1 billion and $4.3 billion, respectively, related to the impact of the COVID-19 pandemic, primarily consisting of charges related to the impairment of goodwill in the second quarter of 2020, significant unfavorable contract adjustments, and customer bankruptcies and increased collectability risk. Management determined these items are incremental to similar costs (or income) incurred for reasons other than the pandemic and not expected to recur once the impact of the pandemic has subsided, and therefore, not indicative of the Company's ongoing operational performance and appropriate for adjustment in the applicable periods. Similar items were not significant for the quarter and twelve months ended December 31, 2021, therefore, such items have not been adjusted for in the table above for the quarter and twelve months ended December 31, 2021.
- Effective January 1, 2021, we reorganized certain product areas of our Raytheon Intelligence & Space (RIS) and Raytheon Missiles & Defense (RMD) businesses to more efficiently leverage our capabilities and we have reclassified the prior year numbers in the table above. The reorganization does not impact our previously reported Collins Aerospace Systems and Pratt & Whitney segment results, or our consolidated balance sheets, statements of operations or statements of cash flows.
| Raytheon Technologies Corporation | ||||||
|---|---|---|---|---|---|---|
| Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results | ||||||
|
Adjusted Income from Continuing Operations, Earnings Per Share, Weighted Average Diluted Shares Outstanding and Effective Tax Rate |
||||||
| Quarter Ended December 31, | Twelve Months Ended December 31, | |||||
| (Unaudited) | (Unaudited) | |||||
|
(dollars and shares in millions - Income (Expense)) |
2021 | 2020 | 2021 | 2020 | ||
|
Income (loss) from continuing operations attributable to common shareowners |
$ 685 | $ 146 | $ 3,897 | $ (3,109) | ||
| Total Restructuring | (25) | (88) | (143) | (768) | ||
| Total Acquisition accounting adjustments | (582) | (561) | (2,203) | (1,860) | ||
|
Total significant non-recurring and non-operational items included in Operating profit (loss) |
66 | (643) | 41 | (4,398) | ||
|
Significant non-recurring and non-operational items included in Non- service Pension Income |
||||||
| Pension curtailment/settlement | (29) | (4) | (29) | (29) | ||
|
Pension curtailment/settlement related to the sale of businesses |
12 | — | 12 | (8) | ||
| Non-service pension restructuring | — | (4) | — | (9) | ||
| Debt extinguishment costs | (617) | — | (649) | — | ||
|
Significant non-recurring and non-operational items included in Interest Expense, Net |
||||||
| Deferred compensation | — | — | — | 4 | ||
|
Tax effect of restructuring and significant non-recurring and non- operational items above |
137 | 260 | 535 | 653 | ||
|
Significant non-recurring and non-operational items included in Income Tax Expense |
||||||
| Tax impact from UK rate change | — | — | (73) | — | ||
| Tax impact from business disposals | 104 | 55 | (44) | 45 | ||
|
Tax expenses associated with the Company's separation of Otis and Carrier |
— | — | — | (415) | ||
| Tax impact related to debt exchange | — | (13) | — | (62) | ||
| Revaluation of certain international tax incentives | 51 | (2) | 51 | (48) | ||
|
Revaluation of deferred taxes related to Raytheon merger and the Company's separation of Otis and Carrier |
(30) | 25 | (30) | 56 | ||
| Tax impact of goodwill impairment | — | — | — | 11 | ||
| Tax impact as a result of tax reform regulations | — | (5) | — | 4 | ||
| State valuation allowance releases | — | 4 | — | 4 | ||
|
Significant non-recurring and non-operational items included in Noncontrolling Interest |
||||||
|
Noncontrolling interest resulting from the revaluation of certain international tax incentives |
(16) | — | (16) | — | ||
|
Less: Impact on net income attributable to common shareowners |
(929) | (976) | (2,548) | (6,820) | ||
|
Adjusted income from continuing operations attributable to common shareowners |
$ 1,614 | $ 1,122 | $ 6,445 | $ 3,711 | ||
| Diluted Earnings (Loss) Per Share | $ 0.46 | $ 0.10 | $ 2.58 | $ (2.29) | ||
| Impact on Diluted Earnings (Loss) Per Share | (0.62) | (0.64) | (1.69) | (5.02) | ||
| Adjusted Diluted Earnings Per Share | $ 1.08 | $ 0.74 | $ 4.27 | $ 2.73 | ||
|
Weighted Average Number of Shares Outstanding |
||||||
| Reported Diluted | 1,500.2 | 1,515.4 | 1,508.5 | 1,357.8 | ||
| Impact of dilutive shares(1) | — | — | — | 3.9 | ||
| Adjusted Diluted | 1,500.2 | 1,515.4 | 1,508.5 | 1,361.7 | ||
| Effective Tax Rate | 11.1 % | (481.1) % | 15.9 % | (24.4) % | ||
| Impact on Effective Tax Rate | 6.4 % | 492.0 % | (0.4) % | 41.9 % | ||
| Adjusted Effective Tax Rate | 17.5 % | 10.9 % | 15.5 % | 17.5 % | ||
-
The computation of reported diluted earnings per share in the twelve months ended December 31, 2020 excludes the effect of the potential exercise of stock awards, including stock appreciation rights and stock options, because their effect was antidilutive due to the reported loss from operations. On an adjusted basis, the Company reported income from continuing operations and therefore, 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 December 31, | ||
| (Unaudited) | ||
| (dollars in millions) | 2021 | 2020 |
| Net cash flows provided by operating activities from continuing operations | $ 3,161 | $ 1,370 |
| Capital expenditures | (954) | (623) |
| Free cash flow | $ 2,207 | $ 747 |
| Twelve Months Ended December 31, | ||
| (Unaudited) | ||
| (dollars in millions) | 2021 | 2020 |
| Net cash flows provided by operating activities from continuing operations | $ 7,142 | $ 4,334 |
| Capital expenditures | (2,134) | (1,795) |
| Free cash flow | $ 5,008 | $ 2,539 |