Raytheon Applied sciences Experiences 2022 Outcomes, Publicizes 2023 Outlook and Plan to Realign into Three Enterprise Segments

RTX expects continued gross sales and earnings development in 2023; will extra absolutely leverage scale with streamlined enterprise operations

ARLINGTON, Va., Jan. 24, 2023 /PRNewswire/ — Raytheon Applied sciences Company (NYSE: RTX) reported fourth quarter 2022 outcomes and introduced its 2023 outlook and plan to realign its enterprise models into three segments.

Fourth quarter 2022

• Gross sales of $18.1 billion
• GAAP EPS from persevering with operations of $0.96, which included $0.31 of acquisition accounting changes and web vital and/or non-recurring costs
• Adjusted EPS of $1.27
• Working money move from persevering with operations of $4.6 billion; Free money move of $3.8 billion
• Achieved roughly $130 million of incremental RTX gross value synergies
• Firm backlog of $175 billion; together with protection backlog of $69 billion
• Repurchased $408 million of RTX shares

Full yr 2022

• Gross sales of $67.1 billion
• GAAP EPS of $3.51
• Adjusted EPS of $4.78
• Working money move from persevering with operations of $7.2 billion; Free money move of $4.9 billion
• Achieved roughly $405 million of incremental RTX gross value synergies
• Repurchased $2.8 billion of RTX shares

Outlook for full yr 2023

• Gross sales of $72.0 – $73.0 billion
• Adjusted EPS of $4.90 – $5.05
• Free money move of roughly $4.8 billion
• Share repurchase of $3.0 billion of RTX shares

“Raytheon Applied sciences delivered strong full-year outcomes with robust free money move that exceeded our expectations,” mentioned Raytheon Applied sciences Chairman and CEO Greg Hayes. “We successfully supported the speedy industrial aerospace restoration and delivered crucial platforms and superior applied sciences for patrons to fulfill their more and more complicated wants, whereas reaching $86 billion in new awards in 2022 and ending the yr with a complete backlog of $175 billion.”

“Our portfolio is nicely positioned to seize rising demand and we anticipate to ship gross sales development and margin growth, together with robust free money move era, in 2023. We’re deploying capital investments to convey new applied sciences to market and speed up productiveness enchancment, all whereas remaining dedicated to returning not less than $20 billion to our shareowners post-merger via early 2024.”

Portfolio Realignment
On observe to surpass all merger-related targets, the corporate plans to strengthen its market place and generate further income and know-how synergies by realigning its enterprise models. Christopher Calio, whose position has been expanded to President and Chief Working Officer of Raytheon Applied sciences, efficient March 1, will oversee the enterprise transformation initiative.

“In 2023 we are going to additional align our market-leading franchises with buyer must drive operational agility and excellence,” mentioned Christopher Calio, Chief Working Officer, Raytheon Applied sciences. “By extra absolutely leveraging our scale, we are going to ship enhanced buyer options and unlock value financial savings alternatives with improved useful resource allocation and a streamlined footprint.”

The three centered enterprise segments can be Collins Aerospace, Pratt & Whitney, and Raytheon. The corporate plans to implement the reorganization through the second half of 2023 and can present further updates on its progress over the approaching months.

Moreover, the corporate introduced that Roy Azevedo, President of Raytheon Intelligence & Area (RIS), will retire from his position and function an advisor to Christopher Calio, Chief Working Officer, to assist with the transformation.

Fourth quarter 2022
Raytheon Applied sciences reported fourth quarter gross sales of $18.1 billion, up 6 % over the prior yr. GAAP EPS from persevering with operations of $0.96 was up 109 % versus the prior yr and included $0.31 of acquisition accounting changes and web vital and/or non-recurring costs. Adjusted EPS of $1.27 was up 18 % versus the prior yr. Each GAAP and Adjusted EPS included about 6 cents of a tax profit related to authorized entity and operational reorganizations.

The corporate recorded web earnings from persevering with operations attributable to frequent shareowners within the fourth quarter of $1.4 billion, up 108 % versus the prior yr which included $446 million of acquisition accounting changes and web vital and/or non-recurring costs. Adjusted web earnings was $1.9 billion, up 16 % versus prior yr. Working money move from persevering with operations within the fourth quarter was $4.6 billion. Capital expenditures had been $855 million, leading to free money move of $3.8 billion.

Backlog and Bookings
Backlog on the finish of the fourth quarter was $175 billion, of which $106 billion was from industrial aerospace and $69 billion was from protection.

Notable protection bookings through the quarter included:

• $1.0 billion to fabricate and ship Steerage Enhanced Missile (GEM-T) for a world buyer at Raytheon Missiles & Protection (RMD)
• $1.0 billion of labeled bookings at Raytheon Intelligence & Area (RIS)
• $698 million for Nationwide Superior Floor-to-Air Missile System (NASAMS) for Ukraine at RMD
• $638 million for F135 manufacturing at Pratt & Whitney
• $512 million for F135 sustainment at Pratt & Whitney
• $415 million for Developed Seasparrow Missile (ESSM) manufacturing for the U.S. Navy and worldwide clients at RMD
• $405 million for upkeep and assist of a Surveillance Radar Program (SRP) for a world buyer at RMD
• $317 million for AIM-9X Sidewinder manufacturing lot 23 for the U.S. Air Pressure and worldwide clients at RMD
• $247 million for MIR replenishment for a world buyer at RMD
• $210 million for F117 sustainment at Pratt & Whitney

Phase Outcomes
The corporate’s reportable segments are Collins Aerospace, Pratt & Whitney, Raytheon Intelligence & Area (RIS) and Raytheon Missiles & Protection (RMD).

Collins Aerospace had fourth quarter 2022 gross sales of $5,662 million, up 15 % versus the prior yr. The rise in gross sales was pushed by a 21 % improve in industrial aftermarket, a 20 % improve in industrial OE and a 5 % improve in navy. The rise in industrial gross sales was pushed primarily by the restoration of business air site visitors, which resulted in increased flight hours, plane fleet utilization, and narrowbody deliveries.

Collins Aerospace recorded working revenue of $741 million, up 61 % versus the prior yr. The rise in working revenue was primarily pushed by drop via on increased industrial aftermarket quantity and decrease R&D expense, which greater than offset increased SG&A expense. Adjusted working revenue of $743 million within the quarter was up 58 % versus the prior yr.

Pratt & Whitney had fourth quarter gross sales of $5,652 million, up 10 % versus the prior yr. The rise in gross sales was pushed by a 37 % improve in industrial OE and an 11 % improve in industrial aftermarket which greater than offset a 2 % lower in navy gross sales. The rise in industrial gross sales was primarily as a result of favorable OE engine quantity and blend, and better store visits and associated spare half gross sales. The lower in navy gross sales was pushed primarily by decrease navy legacy aftermarket gross sales.

Pratt & Whitney recorded working revenue of $306 million, up 127 % versus the prior yr. The rise in working revenue was primarily pushed by drop via on increased industrial aftermarket gross sales, which included a positive buyer contract adjustment, and was partially offset by increased SG&A and R&D expense. Pratt & Whitney recorded adjusted working revenue of $321 million within the quarter, up 98 % versus the prior yr.

RIS had fourth quarter 2022 gross sales of $3,544 million, down 8 % versus the prior yr. The lower in gross sales was pushed by the influence of the prior yr World Coaching and Companies divestiture. Excluding the influence of acquisitions and divestitures and FX, gross sales had been down 5 % versus prior yr pushed by Command, Management and Communications, Cyber, Coaching and Companies, and Sensing and Results.

RIS recorded working revenue of $278 million, down 56 % versus the prior yr. The lower in working revenue was pushed partially by the influence of the prior yr World Coaching and Companies divestiture and the associated acquire on sale, in addition to unfavorable combine, decrease web program efficiencies and decrease quantity. On an adjusted foundation, working revenue was down 31 % versus the prior yr.

RMD had fourth quarter 2022 gross sales of $4,100 million, up 6 % versus prior yr. The rise in gross sales was primarily pushed by increased web gross sales in Naval Energy together with SPY-6, Strategic Missile Protection together with NGI, and Superior Know-how packages.

RMD recorded working revenue of $376 million, down 23 % versus the prior yr. The lower in working revenue was pushed primarily by unfavorable program combine and decrease web program efficiencies, and a cost related to a divestiture, partially offset by increased quantity. RMD recorded adjusted working revenue of $418 million, down 14 % versus the prior yr.

About Raytheon Applied sciences
Raytheon Applied sciences Company is an aerospace and protection firm that gives superior programs and providers for industrial, navy and authorities clients worldwide. With 4 industry-leading companies ― Collins Aerospace, Pratt & Whitney, Raytheon Intelligence & Area and Raytheon Missiles & Protection ― the corporate delivers options that push the boundaries in avionics, cybersecurity, directed vitality, electrical propulsion, hypersonics, and quantum physics. The corporate, shaped in 2020 via the mix of Raytheon Firm and the United Applied sciences Company aerospace companies, is headquartered in Arlington, Virginia.

Convention Name on the Fourth Quarter 2022 Monetary Outcomes
Raytheon Applied sciences’ monetary outcomes convention name can be held on Tuesday, January 24, 2023 at 8:30 a.m. ET. The convention name can be webcast stay on the corporate’s web site at www.rtx.com and can be out there for replay following the decision. The corresponding presentation slides can be out there for downloading previous to the decision.

Use and Definitions of Non-GAAP Monetary Measures
Raytheon Applied sciences Company (“RTC”) experiences its monetary ends in accordance with accounting ideas typically accepted in america (“GAAP”).

We complement the reporting of our monetary data decided beneath GAAP with sure non-GAAP monetary data. The non-GAAP data offered offers traders with further helpful data, however shouldn’t be thought of in isolation or as substitutes for the associated GAAP measures. Furthermore, different firms might outline non-GAAP measures in another way, which limits the usefulness of those measures for comparisons with such different firms. We encourage traders to evaluate our monetary statements and publicly-filed experiences of their entirety and to not depend on any single monetary measure.

Adjusted web gross sales, natural gross sales, adjusted working revenue (loss), adjusted web earnings, adjusted earnings per share (“EPS”), and free money move are non-GAAP monetary measures. Adjusted web gross sales represents consolidated web gross sales (a GAAP measure), excluding vital nonoperational gadgets and/or vital operational gadgets that will happen at irregular intervals (hereinafter known as “web vital and/or non-recurring gadgets”). Natural gross sales represents consolidated web gross sales (a GAAP measure), excluding the influence of international foreign money translation, acquisitions and divestitures accomplished within the previous twelve months and web vital and/or non-recurring gadgets. Adjusted working revenue (loss) represents working revenue (loss) (a GAAP measure), excluding restructuring prices, acquisition accounting changes and web vital and/or non-recurring gadgets. Acquisition accounting changes embrace the amortization of acquired intangible property associated to acquisitions, the amortization of the property, plant and gear truthful worth adjustment acquired via acquisitions and the amortization of buyer contractual obligations associated to loss making or under market contracts acquired. Adjusted web earnings represents web earnings from persevering with operations (a GAAP measure), excluding restructuring prices, acquisition accounting changes and web vital and/or non-recurring gadgets. Adjusted EPS represents diluted earnings per share from persevering with operations (a GAAP measure), excluding restructuring prices, acquisition accounting changes and web vital and/or non-recurring gadgets. For the Enterprise segments, when relevant, changes of web gross sales equally replicate persevering with operations excluding different vital gadgets, natural gross sales equally excludes the influence of international foreign money, acquisitions and divestitures, and web vital and/or non-recurring gadgets, and changes of working revenue (loss) and working revenue margins (additionally known as return on gross sales (ROS)) equally replicate persevering with operations, excluding restructuring, acquisition accounting changes and web vital and/or non-recurring gadgets.

Free money move is a non-GAAP monetary measure that represents money move from operations (a GAAP measure) much less capital expenditures. Administration believes free money move is a helpful measure of liquidity and an extra foundation for assessing RTC’s means to fund its actions, together with the financing of acquisitions, debt service, repurchases of RTC’s frequent inventory and distribution of earnings to shareowners.

A reconciliation of the non-GAAP measures to the corresponding quantities ready in accordance with GAAP seems within the tables on this Appendix. The tables present further data as to the gadgets and quantities which were excluded from the adjusted measures.

After we present our expectation for adjusted EPS and free money move on a forward-looking foundation, a reconciliation of the variations between the non-GAAP expectations and the corresponding GAAP measures (anticipated diluted EPS from persevering with operations and anticipated money move from operations, respectively) typically will not be out there with out unreasonable effort as a result of doubtlessly excessive variability, complexity and low visibility as to the gadgets that might be excluded from the GAAP measure within the related future interval, reminiscent of uncommon positive factors and losses, the last word end result of pending litigation, fluctuations in international foreign money change charges, the influence and timing of potential acquisitions and divestitures, and different structural adjustments or their possible significance. The variability of the excluded gadgets might have a major, and doubtlessly unpredictable, influence on our future GAAP outcomes.

Cautionary Assertion Concerning Ahead-Wanting Statements
This press launch incorporates statements which, to the extent they aren’t statements of historic or current truth, represent “forward-looking statements” beneath the securities legal guidelines. Every so often, oral or written forward- trying statements may be included in different data launched to the general public. These forward-looking statements are meant to supply Raytheon Applied sciences Company (“RTC”) administration’s present expectations or plans for our future working and monetary efficiency, primarily based on assumptions at present believed to be legitimate and will not be statements of historic truth. Ahead-looking statements could be recognized by way of phrases reminiscent of “imagine,” “anticipate,” “expectations,” “plans,” “technique,” “prospects,” “estimate,” “mission,” “goal,” “anticipate,” “will,” “ought to,” “see,” “steerage,” “outlook,” “targets,” “targets,” “assured,” “on observe” and different phrases of comparable which means. Ahead- trying statements might embrace, amongst different issues, statements referring to future gross sales, earnings, money move, outcomes of operations, makes use of of money, share repurchases, tax funds and charges, analysis and improvement spending, value financial savings, different measures of monetary efficiency, potential future plans, methods or transactions, credit score scores and web indebtedness, different anticipated advantages to RTC of the United Applied sciences Company (“UTC”) acquisition of Rockwell Collins in 2018, the merger (the “merger”) between UTC and Raytheon Firm (“Raytheon”)) or the spin-offs by UTC of Otis Worldwide Company and Service World Company into separate unbiased firms (the “separation transactions”), together with estimated synergies and buyer value financial savings ensuing from the merger and the anticipated advantages and prices of the separation transactions and different statements that aren’t solely historic info. All forward-looking statements contain dangers, uncertainties and different components that will trigger precise outcomes to vary materially from these expressed or implied within the forward-looking statements. For these statements, we declare the safety of the secure harbor for forward- trying statements contained within the U.S. Non-public Securities Litigation Reform Act of 1995. Such dangers, uncertainties and different components embrace, with out limitation: (1) the impact of adjustments in international financial, capital market and political situations within the U.S. and globally, reminiscent of from the worldwide sanctions and export controls with respect to Russia, and any adjustments therein, together with associated to monetary market situations, fluctuations in commodity costs or provide (together with vitality provide), inflation, rates of interest and international foreign money change charges, disruptions in international provide chain and labor markets, and geopolitical dangers; (2) dangers related to U.S. authorities gross sales, together with adjustments or shifts in protection spending as a result of budgetary constraints, spending cuts ensuing from sequestration, a unbroken decision, a authorities shutdown, the debt ceiling or measures taken to keep away from default, or in any other case, and unsure funding of packages; (3) challenges within the improvement, manufacturing, supply, assist, and efficiency of RTC superior applied sciences and new services and the conclusion of the anticipated advantages (together with our anticipated returns beneath buyer contracts), in addition to the challenges of working in RTC’s highly- aggressive industries; (4) dangers referring to RTC’s reliance on U.S. and non-U.S. suppliers and commodity markets, together with the impact of sanctions, delays and disruptions within the supply of supplies and providers to RTC or its suppliers and worth will increase; (5) dangers referring to RTC worldwide operations from, amongst different issues, adjustments in commerce insurance policies and implementation of sanctions, international foreign money fluctuations, financial situations, political components, gross sales strategies, and U.S. or native authorities rules; (6) the situation of the aerospace {industry}; (7) the flexibility of RTC to draw, practice and retain certified personnel and preserve its tradition and excessive moral requirements, and the flexibility of our personnel to proceed to function our services and companies world wide; (8) the impact of and dangers referring to the coronavirus illness 2019 (COVID-19) pandemic on RTC’s enterprise, provide chain, operations and the industries wherein it operates, together with the lower in international air journey, and the timing and extent of the continued restoration from COVID-19; (9) the scope, nature, timing and challenges of managing acquisitions, investments, divestitures and different transactions, together with the conclusion of synergies and alternatives for development and innovation, the belief of liabilities and different dangers and incurrence of associated prices and bills; (10) compliance with authorized, environmental, regulatory and different necessities, together with, amongst different issues, export and import necessities such because the Worldwide Visitors in Arms Laws and the Export Administration Laws, anti-bribery and anticorruption necessities, such because the International Corrupt Practices Act, industrial cooperation settlement obligations, and procurement and different rules within the U.S. and different international locations wherein RTC and its companies function; (11) the end result of pending, threatened and future authorized proceedings, investigations and different contingencies, together with these associated to U.S. authorities audits and disputes; (12) components that would influence RTC’s means to have interaction in fascinating capital-raising or strategic transactions, together with its capital construction, ranges of indebtedness, capital expenditures and analysis and improvement spending, and the provision of credit score, credit score market situations and different components; (13) uncertainties related to the timing and scope of future repurchases by RTC of its frequent inventory or declarations of money dividends, which can be discontinued, accelerated, suspended or delayed at any time as a result of numerous components, together with market situations and the extent of different investing actions and makes use of of money; (14) the dangers referring to realizing anticipated advantages from RTC strategic initiatives reminiscent of value discount, restructuring, digital transformation and different operational initiatives; (15) dangers referring to the mixing of the legacy companies of UTC and RTC in addition to the merger, and the conclusion of the anticipated advantages of these transactions; (16) dangers of further tax exposures as a result of new tax laws or different developments, within the U.S. and different international locations wherein RTC and its companies function; (17) dangers referring to a RTC product security failure or different failure affecting RTC’s or its clients’ or suppliers’ merchandise or programs; (18) dangers referring to cyber-attacks on RTC’s data know-how infrastructure, merchandise, suppliers, clients and companions, threats to RTC services and personnel, in addition to different occasions exterior of RTC’s management reminiscent of public well being crises, damaging climate or different acts of nature; (19) the impact of adjustments in accounting estimates for our packages on our monetary outcomes; (20) the impact of adjustments in pension and different postretirement plan estimates and assumptions and contributions; (21) dangers referring to an impairment of goodwill and different intangible property; (22) the consequences of local weather change and altering climate-related rules, buyer and market calls for, merchandise and applied sciences; and (23) the meant qualification of (i) the merger as a tax-free reorganization and (ii) the separation transactions and different inside restructurings as tax-free to UTC and former UTC shareowners, in every case, for U.S. federal earnings tax functions. For extra data on figuring out components that will trigger precise outcomes to differ materially from these acknowledged in forward-looking statements, see the experiences of RTC, UTC and Raytheon on Varieties S-4, 10-Okay, 10-Q and 8-Okay filed with or furnished to the Securities and Trade Fee every so often. Any forward-looking assertion speaks solely as of the date on which it’s made, and RTC assumes no obligation to replace or revise such assertion, whether or not because of new data, future occasions or in any other case, besides as required by relevant legislation.

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SOURCE Raytheon Applied sciences