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Item 1. Financial Statements

2022-07-26 compared with 2022-04-26 · 211 added, 118 removed, 706 unchanged (32% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(dollars in millions, except per share amounts) 2022 2021 2022 2021

33 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(dollars in millions) 2022 2021 2022 2021

5 unchanged sentences

Other comprehensive income (loss), before tax ( 843 ) 396 ( 1,025 ) 214

Income tax expense related to items of other comprehensive income (loss) ( 18 ) ( 5 )

Other comprehensive loss, net of tax ( 200 ) ( 187 )

Income tax (expense) benefit related to items of other comprehensive income (loss) 27 ( 30 ) 9 ( 35 )

Other comprehensive income (loss), net of tax ( 816 ) 366 ( 1,016 ) 179

Comprehensive income 522 1,446 1,429 2,053

5 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEET

(dollars in millions) March 31, 2022 December 31, 2021

(dollars in millions) June 30, 2022 December 31, 2021

Current Assets

44 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Quarter Ended March 31,

Six Months Ended June 30,

(dollars in millions) 2022 2021

46 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(dollars in millions, except per share amounts;

8 unchanged sentences

Common Stock repurchased ( 1,056 ) ( 645 ) ( 1,812 ) ( 1,020 )

Other — 1 — 3

Ending balance ( 14,539 ) ( 11,424 ) ( 14,539 ) ( 11,424 )

4 unchanged sentences

Dividends on ESOP Common Stock ( 27 ) ( 26 ) ( 40 ) ( 37 )

Other ( 1 ) ( 2 ) — ( 2 )

Ending balance 50,271 48,954 50,271 48,954

5 unchanged sentences

Beginning balance ( 2,115 ) ( 3,921 ) ( 1,915 ) ( 3,734 )

Other comprehensive loss, net of tax ( 200 ) ( 187 )

Other comprehensive income (loss), net of tax ( 816 ) 366 ( 1,016 ) 179

Ending balance ( 2,931 ) ( 3,555 ) ( 2,931 ) ( 3,555 )

6 unchanged sentences

Disposition of noncontrolling interest, net ( 2 ) — ( 13 ) —

Capital contributions 6 — 6 —

Ending balance 1,549 1,606 1,549 1,606

Equity at March 31

Equity at June 30

$ 71,990 $ 72,721 $ 71,990 $ 72,721

8 unchanged sentences

Basis of Presentation

The Condensed Consolidated Financial Statements at March 31, 2022 and for the quarters ended March 31, 2022 and 2021 are unaudited, and in the opinion of management include adjustments of a normal recurring nature necessary for a fair statement of the results for the interim periods.

The Condensed Consolidated Financial Statements at June 30, 2022 and for the quarters and six months ended June 30, 2022 and 2021 are unaudited, and in the opinion of management include adjustments of a normal recurring nature necessary for a fair statement of the results for the interim periods.

The results reported in these Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year.

The financial information included herein should be read in conjunction with the financial statements and notes in our 2021 Annual Report on Form 10-K.

Raytheon Intelligence & Space (RIS) and Raytheon Missiles & Defense (RMD) follow a 4-4-5 fiscal calendar while Collins Aerospace (Collins) and Pratt & Whitney use a quarter calendar end.

Throughout this Quarterly Report on Form 10-Q, when we refer to the quarters ended June 30, 2022 and June 30, 2021 with respect to RIS or RMD, we are referring to their July 3, 2022 and July 4, 2021 fiscal quarter ends, respectively.

Unless the context otherwise requires, the terms “we,” “our,” “us,” “the Company,” “Raytheon Technologies,” and “RTC” mean Raytheon Technologies Corporation and its subsidiaries.

1 unchanged sentence

In response to the Russian military’s invasion of Ukraine on February 24, 2022, the U.S.

government has imposed broad economic sanctions and export controls targeting key industries, entities and individuals in Russia.

government measures, among other items, restrict transactions involving various Russian banks and financial institutions and impose enhanced export controls limiting transfers of various goods, software and technologies to Russia, including broadened export controls specifically targeting Russia’s aerospace sector.

Governments of various other jurisdictions in which we operate, including Canada, the United Kingdom, the European Union and others, have implemented similar measures.

These sanctions and export controls, as well as responses from Russia, have adversely affected and could continue to adversely affect the Company and/or our supply chain, business partners or customers.

As a result of these sanctions and export controls, in the first quarter of 2022, we recorded pretax charges of $ 290 million, $ 210 million net of tax and the impact of noncontrolling interest, within our Collins Aerospace Systems (Collins) and Pratt & Whitney businesses primarily related to increased estimates for credit losses on both our accounts receivables and contract assets, inventory reserves and purchase order obligations, impairment of customer financing assets for products under lease, impairment of contract fulfillment costs that are no longer recoverable, and a loss on the exit of our investment in a Russia-based joint venture.

Additionally, we reversed approximately $ 1.3 billion of remaining performance obligation (RPO) in the quarter ended March 31, 2022 related to our sales contracts in Russia at Pratt & Whitney and Collins.

We will continue to monitor the changes in sanctions and other developments, which may result in financial impacts in future periods.

Based on information available to date, we currently do not expect these incremental impacts to have a material effect on the Company’s financial condition, results of operations or liquidity.

government and the governments of various jurisdictions in which we operate, including Canada, the United Kingdom, the European Union, and others, have imposed broad economic sanctions and export controls targeting specific industries, entities and individuals in Russia.

The Russian government has implemented similar counter-sanctions and export controls targeting specific industries, entities and individuals in the U.S.

and other jurisdictions in which we operate.

These government measures, among other limitations, restrict transactions involving various Russian banks and financial institutions and impose enhanced export controls limiting transfers of various goods, software and technologies to and from Russia, including broadened export controls specifically targeting the aerospace sector.

These measures have adversely affected and could continue to adversely affect the Company and/or our supply chain, business partners or customers.

As a result of these sanctions on Russia and export controls, in the first quarter of 2022, we recorded pretax charges of $ 290 million, $ 210 million net of tax and the impact of noncontrolling interest, within our Collins and Pratt & Whitney businesses primarily related to increased estimates for credit losses on both our accounts receivables and contract assets, inventory reserves and purchase order obligations, impairment of customer financing assets for products under lease, impairment of contract fulfillment costs that are no longer recoverable, and a loss on the exit of our investment in a Russia-based joint venture.

Additionally, we reversed approximately $ 1.3 billion of remaining performance obligations (RPO) in the quarter ended March 31, 2022 related to our sales contracts in Russia at Pratt & Whitney and Collins.

We will continue to monitor future developments, including additional sanctions and other measures, that could adversely affect the Company and/or our supply chain, business partners or customers.

COVID-19 Pandemic.

The coronavirus disease 2019 (COVID-19) pandemic continues to negatively affect the global economy, our business and operations, supply chains, and the industries in which we operate.

However, we continue to see indications that commercial air travel is recovering in certain areas of demand.

However, we continue to see that commercial air travel is recovering in certain areas of demand.

While we believe that the long-term outlook for the aerospace industry remains positive due to the fundamental drivers of air travel demand, there continues to be uncertainty with respect to when commercial air traffic capacity will fully return to and/or exceed pre-COVID-19 levels.

2 unchanged sentences

Acquisitions, Dispositions, Goodwill and Intangible Assets

In the quarters ended March 31, 2022 and 2021, cash inflows related to dispositions were $ 35 million and $ 1.0 billion, respectively.

Our dispositions of businesses in the quarter ended March 31, 2022, primarily consisted of immaterial dispositions in our aerospace businesses.

Dispositions of businesses in the quarter ended March 31, 2021 reflect the January 8, 2021 sale of our Forcepoint business, for proceeds of $ 1.1 billion, net of cash transferred.

During the six months ended June 30, 2022 and 2021, cash inflows related to dispositions were $ 88 million and $ 1.1 billion, respectively.

Our dispositions of businesses in the six months ended June 30, 2022, consisted of immaterial dispositions in our aerospace businesses.

Dispositions of businesses in the six months ended June 30, 2021 reflect the January 8, 2021 sale of our Forcepoint business, for proceeds of $ 1.1 billion, net of cash transferred.

We did not recognize a pre-tax gain or loss within the Condensed Consolidated Statement of Operations related to the sale of Forcepoint.

Changes in our goodwill balances for the quarter ended March 31, 2022 were as follows:

(dollars in millions) Balance as of January 1, 2022 Acquisitions and Divestitures Foreign Currency Translation and Other Balance as of March 31, 2022

Changes in our goodwill balances for the six months ended June 30, 2022 were as follows:

(dollars in millions) Balance as of January 1, 2022 Acquisitions and Divestitures Foreign Currency Translation and Other Balance as of June 30, 2022

Collins Aerospace Systems $ 31,384 $ ( 36 ) $ ( 614 ) $ 30,734

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Identifiable intangible assets are comprised of the following:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(dollars in millions) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization

6 unchanged sentences

Total $ 47,825 $ ( 10,263 ) $ 47,884 $ ( 9,368 )

Amortization of intangible assets for the quarters ended March 31, 2022 and 2021 was $ 487 million and $ 596 million, respectively.

Amortization of intangible assets for the quarters and six months ended June 30, 2022 and 2021 were $ 467 million and $ 954 million and $ 602 million and $ 1,198 million, respectively.

The following is the expected amortization of intangible assets for the remainder of 2022 through 2027.

2 unchanged sentences

Earnings Per Share

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(dollars and shares in millions, except per share amounts) 2022 2021 2022 2021

16 unchanged sentences

In addition, the computation of diluted EPS excludes the effect of the potential exercise of stock awards when the awards’ assumed proceeds exceed the average market price of the common shares during the period.

For the quarters ended March 31, 2022 and 2021, the number of stock awards excluded from the computation was 7.5 million and 26.7 million, respectively.

For the quarter and six months ended June 30, 2022, the number of stock awards excluded from the computation was 3.4 million and 5.4 million, respectively.

For the quarter and six months ended June 30, 2021, the number of stock awards excluded from the computation was 11.2 million and 19.0 million, respectively.

Changes in Contract Estimates at Completion

5 unchanged sentences

Management must make assumptions and estimates regarding contract revenue and costs, including estimates of labor productivity and availability, the complexity and scope of the work to be performed, the availability and cost of materials, the length of time to complete the performance obligation, execution by our subcontractors, the availability and timing of funding from our customer, overhead cost rates, and current and past maintenance cost and frequency driven by estimated aircraft and engine utilization and estimated useful lives of components, among others.

Cost estimates may also include the estimated cost of satisfying our industrial cooperation agreements, sometimes in the form of either offset obligations or in-country industrial participation (ICIP) agreements, required under certain contracts primarily within our Raytheon Intelligence & Space (RIS) and Raytheon Missiles & Defense (RMD) segments.

These obligations may or may not be distinct depending on their nature.

2 unchanged sentences

A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations.

Our EAC adjustments also include the establishment of loss provisions for our contracts accounted for on a percentage of completion basis.

Our EAC adjustments also include the establishment of and changes to loss provisions for our contracts accounted for on a percentage of completion basis.

Net EAC adjustments had the following impact on our operating results:

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(dollars in millions, except per share amounts) 2022 2021 2022 2021

2 unchanged sentences

Income from continuing operations attributable to common shareowners (1)

( 32 ) 22 ( 4 ) 31

Diluted earnings per share from continuing operations attributable to common shareholders (1)

4 unchanged sentences

Accounts receivable, net consisted of the following:

(dollars in millions) March 31, 2022 December 31, 2021

(dollars in millions) June 30, 2022 December 31, 2021

Accounts receivable $ 10,897 $ 10,136

6 unchanged sentences

Total contract assets and contract liabilities were as follows:

(dollars in millions) March 31, 2022 December 31, 2021

(dollars in millions) June 30, 2022 December 31, 2021

Contract assets $ 11,836 $ 11,361

1 unchanged sentence

Net contract liabilities $ ( 1,594 ) $ ( 2,359 )

Contract assets increased $ 205 million during the quarter ended March 31, 2022 primarily due to sales in excess of billings at RIS and RMD.

Contract liabilities were relatively consistent during the quarter ended March 31, 2022 compared to December 31, 2021.

We recognized revenue of $ 1.8 billion during the quarter ended March 31, 2022, related to contract liabilities as of January 1, 2022 and $ 1.7 billion during the quarter ended March 31, 2021, related to contract liabilities as of January 1, 2021.

As of March 31, 2022, our Contract liabilities include approximately $ 420 million of advance payments received from a Middle East customer on contracts for which we no longer believe we will be able to execute on or obtain required regulatory approvals.

Contract assets increased $ 475 million during the six months ended June 30, 2022 primarily due to sales in excess of billings at RIS and Pratt & Whitney.

Contract liabilities decreased $ 290 million during the six months ended June 30, 2022 compared to December 31, 2021 primarily due to revenue recognized on certain contracts with milestone and performance based payments at RMD.

We recognized revenue of $ 1.2 billion and $ 3.0 billion during the quarter and six months ended June 30, 2022, related to contract liabilities as of January 1, 2022 and $ 1.0 billion and $ 2.7 billion during the quarter and six months ended June 30, 2021, related to contract liabilities as of January 1, 2021.

As of June 30, 2022, our Contract liabilities include approximately $ 380 million of advance payments received from a Middle East customer on contracts for which we no longer believe we will be able to execute on or obtain required regulatory approvals.

These advance payments may become refundable to the customer if the contracts are ultimately terminated.

In addition, as of March 31, 2022, our Contract liabilities include advance payments, in immaterial amounts, received from Russian customers on contracts we are currently unable to perform on due to global sanctions on Russia and export controls.

In addition, as of June 30, 2022, our Contract liabilities include advance payments, in immaterial amounts, received from Russian customers on contracts we are currently unable to perform on due to global sanctions on Russia and export controls.

Depending on the contractual terms and as allowed by sanctions, certain of these advance payments may become refundable.

Contract assets include an allowance for credit losses of $ 330 million and $ 251 million as of March 31, 2022 and December 31, 2021, respectively.

Contract assets include an allowance for credit losses of $ 318 million and $ 251 million as of June 30, 2022 and December 31, 2021, respectively.

Inventory, net

(dollars in millions) March 31, 2022 December 31, 2021

(dollars in millions) June 30, 2022 December 31, 2021

Raw materials $ 3,210 $ 3,024

3 unchanged sentences

Borrowings and Lines of Credit

From time to time, we use commercial paper borrowings for general corporate purposes, including the funding of potential

acquisitions, pension contributions, debt refinancing, dividend payments and repurchases of our common stock.

From time to time, we use commercial paper borrowings for general corporate purposes, including the funding of potential acquisitions, pension contributions, debt refinancing, dividend payments and repurchases of our common stock.

The commercial paper notes have original maturities of not more than 90 days from the date of issuance.

As of March 31, 2022, our maximum commercial paper borrowing limit was $ 5.0 billion as the commercial paper is backed by our $ 5.0 billion revolving credit agreement.

We had no commercial paper outstanding at March 31, 2022 or December 31, 2021.

As of March 31, 2022, we had revolving credit agreements with various banks permitting aggregate borrowings of up to $ 7.0 billion, consisting of a $ 5.0 billion revolving credit agreement, which expires in April 2025, and a $ 2.0 billion revolving credit agreement, which expires in May 2022.

As of March 31, 2022, there were no borrowings outstanding under these agreements.

There were no repayments of long-term debt during the quarter ended March 31, 2022.

We made the following repayments of long-term debt during the quarter ended March 31, 2021:

As of June 30, 2022, our maximum commercial paper borrowing limit was $ 5.0 billion as the commercial paper is backed by our $ 5.0 billion revolving credit agreement.

We had no commercial paper outstanding at June 30, 2022 or December 31, 2021.

As of June 30, 2022, we had revolving credit agreements with various banks permitting aggregate borrowings of up to $ 7.0 billion, consisting of a $ 5.0 billion revolving credit agreement, which expires in April 2025, and a $ 2.0 billion revolving credit agreement, which was renewed in May 2022 and expires in May 2023.

As of June 30, 2022, there were no borrowings outstanding under these agreements.

We had no issuances of long-term debt during the six months ended June 30, 2022 and 2021.

We made the following repayments of long-term debt during the six months ended June 30, 2021:

Repayment Date Description of Notes Aggregate Principal Balance (in millions)

1 unchanged sentence

Long-term debt consisted of the following:

(dollars in millions) March 31, 2022 December 31, 2021

(dollars in millions) June 30, 2022 December 31, 2021

3.650 % notes due 2023 (1)

43 unchanged sentences

(1) We may redeem these notes, in whole or in part, at our option pursuant to their terms prior to the applicable maturity date.

The average maturity of our Long-term debt at March 31, 2022 is approximately 15 years.

The average maturity of our Long-term debt at June 30, 2022 is approximately 15 years.

Employee Benefit Plans

2 unchanged sentences

Contributions to our plans were as follows:

Quarter Ended March 31,

Quarter Ended June 30, Six Months Ended June 30,

(dollars in millions) 2022 2021 2022 2021

4 unchanged sentences

The amounts recognized in the Condensed Consolidated Balance Sheet consist of:

(dollars in millions) March 31, 2022 December 31, 2021

(dollars in millions) June 30, 2022 December 31, 2021

Noncurrent pension assets (included in Other assets) $ 3,869 $ 3,214

2 unchanged sentences

The amounts recognized in Future pension and postretirement benefit obligations consist of:

(dollars in millions) March 31, 2022 December 31, 2021

(dollars in millions) June 30, 2022 December 31, 2021

Noncurrent pension liabilities $ 6,596 $ 6,873

4 unchanged sentences

Pension Benefits

Quarter Ended March 31,

Quarter Ended June 30,

(dollars in millions) 2022 2021 2022 2021

Operating expense

$ 118 $ 131 $ 2 $ 2

Service cost $ 118 $ 131 $ 2 $ 2

Non-operating expense

1 unchanged sentence

Expected return on plan assets ( 888 ) ( 871 ) ( 6 ) ( 5 )

( 890 ) ( 868 ) ( 5 ) ( 5 )

Amortization of prior service credit ( 41 ) ( 42 ) — ( 1 )

Recognized actuarial net loss (gain) 77 109 ( 3 ) ( 2 )

77 109 ( 3 ) ( 2 )

Net settlement, curtailment and special termination benefit gain ( 6 ) — — —

Net settlement, curtailment and special termination benefit (gain) loss — 3 — —

Non-service pension income ( 472 ) ( 488 ) ( 2 ) ( 2 )

Total net periodic benefit (income) expense $ ( 354 ) $ ( 357 ) $ — $ —

Pension Benefits

Six Months Ended June 30,

(dollars in millions) 2022 2021 2022 2021

Operating expense

Service cost $ 236 $ 262 $ 4 $ 4

Non-operating expense

Interest cost 762 625 14 12

Expected return on plan assets ( 1,778 ) ( 1,739 ) ( 11 ) ( 10 )

Amortization of prior service credit ( 83 ) ( 84 ) — ( 2 )

Recognized actuarial net loss (gain) 154 218 ( 6 ) ( 4 )

Net settlement, curtailment and special termination benefit (gain) loss ( 6 ) 3 — —

Non-service pension income ( 951 ) ( 977 ) ( 3 ) ( 4 )

Total net periodic benefit (income) expense $ ( 715 ) $ ( 715 ) $ 1 $ —

We have set aside assets in separate trusts, which we expect to be used to pay for certain nonqualified defined benefit and defined contribution plan obligations in excess of qualified plan limits.

1 unchanged sentence

The fair value of marketable securities held in trusts was as follows:

(dollars in millions) March 31, 2022 December 31, 2021

(dollars in millions) June 30, 2022 December 31, 2021

Marketable securities held in trusts $ 788 $ 965

Our effective tax rate was 9.3 % and 29.8 % i n the quarters ended March 31, 2022 and 2021, respectively.

The effective tax rate in the quarter ended March 31, 2022 includes a benefit of 5 percentage points primarily related to an incremental Foreign Derived Intangible Income (FDII) benefit and other effects created by the capitalization of research or experimental expenditures for tax-purposes, which was enacted as part of the Tax Cuts and Jobs Act of 2017 and became effective on January 1, 2022.

Tax expense in the quarter ended March 31, 2021 includes tax charges incremental to the U.S.

Our effective tax rate was 10.7 % and 23.9 % i n the quarters ended June 30, 2022 and 2021, respectively.

The effective tax rate in the quarter ended June 30, 2022 includes a benefit of approximately 4 percentage points primarily related to an incremental Foreign Derived Intangible Income (FDII) benefit and other effects created by the capitalization of research or experimental expenditures for tax-purposes, which was enacted as part of the Tax Cuts and Jobs Act of 2017 and became effective on January 1, 2022.

Tax expense in the quarter ended June 30, 2021 includes tax charges of $ 73 million incremental to the U.S.

statutory rate associated with the revaluation of deferred taxes resulting from the increase in the United Kingdom (U.K.) corporate tax rate to 25% enacted in 2021 and effective in 2023.

Our effective tax rate was 10.1 % and 26.5 % in the six months ended June 30, 2022 and 2021, respectively.

The effective tax rate in the six months ended June 30, 2022 includes a benefit of approximately 5 percentage points primarily related to an incremental FDII benefit and other effects created by the capitalization of research or experimental expenditures for tax-purposes, which was enacted as part of the Tax Cuts and Jobs Act of 2017 and became effective on January 1, 2022.

Tax expense in the six months ended June 30, 2021 includes tax charges incremental to the U.S.

statutory rate of $ 148 million associated with the sale of the Forcepoint business, as described in “Note 2:

Acquisitions, Dispositions, Goodwill and Intangible Assets.” Subsequently, in the fourth quarter of 2021, we recognized an incremental $ 104 million tax benefit due to the revaluation of that Forcepoint tax benefit as a result of completing the divestiture of RIS’s global training and services business.

Acquisitions, Dispositions, Goodwill and

Intangible Assets,” and $ 73 million associated with the enactment of the U.K.

corporate tax rate change discussed above.

Subsequently, in the fourth quarter of 2021, we recognized an incremental $ 104 million tax benefit due to the revaluation of the Forcepoint tax benefit as a result of completing the divestiture of RIS’s global training and services business.

We conduct business globally and, as a result, Raytheon Technologies or one or more of our subsidiaries files income tax returns in the U.S.

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We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting date.

It is reasonably possible that a net reduction within the range of $ 20 million to $ 500 million of unrecognized tax benefits may occur within the next 12 months as a result of the revaluation of uncertain tax positions arising from the issuance of legislation, regulatory or other guidance or developments in examinations, in appeals, or in the courts, or the closure of tax statutes.

It is reasonably possible that a net reduction within the range of $ 20 million to $ 400 million of unrecognized tax benefits may occur within the next 12 months as a result of the revaluation of uncertain tax positions arising from developments in examinations, in appeals, or in the courts, the closure of tax statutes, or the issuance of legislation, regulatory or other guidance.

Management has determined that the distributions of Carrier and Otis on April 3, 2020, and certain related internal business separation transactions, qualified as tax-free under applicable law.

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The Examination Division of the Internal Revenue Service (IRS) is currently auditing Raytheon Technologies tax years 2017 and 2018 and pre-merger Raytheon Company tax periods 2017, 2018 and 2019 as well as certain refund claims of Raytheon Company for tax years 2014, 2015 and 2016 filed prior to the Raytheon merger.

The Examination Division of the IRS is also auditing pre-acquisition Rockwell Collins fiscal tax years 2016 and 2017, which is projected to close during 2022.

As a result of the projected closure of the audit of Rockwell Collins fiscal tax years 2016 and 2017, it is reasonably possible that the Company may recognize non-cash gains in the range of $ 20 million to $ 100 million during 2022.

The audit of each of these tax years is expected to continue into 2023.

The Examination Division of the IRS is currently auditing pre-acquisition Rockwell Collins fiscal tax years 2016 and 2017.

During the second quarter of 2022, the IRS added fiscal tax year 2018 to their review.

The audit of 2016, 2017, and 2018 is projected to close during 2023.

Financial Instruments

3 unchanged sentences

We have used derivative instruments, including swaps, forward contracts and options, to manage certain foreign currency, interest rate and commodity price exposures.

The aggregate notional amount of our outstanding foreign currency hedges was $ 8.6 billion and $ 8.5 billion at March 31, 2022 and December 31, 2021, respectively.

At March 31, 2022, all derivative contracts accounted for as cash flow hedges will m ature by February 2030.

The aggregate notional amount of our outstanding foreign currency hedges was $ 10.0 billion and $ 8.5 billion at June 30, 2022 and December 31, 2021, respectively.

At June 30, 2022, all derivative contracts accounted for as cash flow hedges will m ature by February 2030.

The following table summarizes the fair value and presentation in the Condensed Consolidated Balance Sheet for derivative instruments:

(dollars in millions) Balance Sheet Location March 31, 2022 December 31, 2021

(dollars in millions) Balance Sheet Location June 30, 2022 December 31, 2021

Derivatives designated as hedging instruments:

4 unchanged sentences

Other accrued liabilities 23 11

The effect of cash flow hedging relationships on Accumulated other comprehensive income (loss) and on the Condensed Consolidated Statement of Operations in the quarters ended March 31, 2022 and 2021 are presented in “Note 16:

The effect of cash flow hedging relationships on Accumulated other comprehensive income (loss) and on the Condensed Consolidated Statement of Operations in the quarters and six months ended June 30, 2022 and 2021 are presented in “Note 16:

Accumulated Other Comprehensive Loss.” The amounts of gain or loss are attributable to foreign exchange contract activity and are primarily recorded as a component of Products sales when reclassified from Accumulated other comprehensive loss.

1 unchanged sentence

Accordingly, the hedged items and derivatives designated as hedging instruments are highly effective.

As of March 31, 2022, we have € 500 million of euro-denominated long-term debt outstanding, which qualifies as a net investment hedge against our investments in European businesses, which is deemed to be effective.

As of June 30, 2022, we have € 500 million of euro-denominated long-term debt outstanding, which qualifies as a net investment hedge against our investments in European businesses, which is deemed to be effective.

The effect of derivatives not designated as hedging instruments is included within Other income, net, on the Condensed Consolidated Statement of Operations.

1 unchanged sentence

The following tables provide the valuation hierarchy classification of assets and liabilities that are carried at fair value and measured on a recurring basis in our Condensed Consolidated Balance Sheet:

March 31, 2022

June 30, 2022

(dollars in millions) Total Level 1 Level 2 Level 3

11 unchanged sentences

Our derivative assets and liabilities include foreign exchange contracts that are measured at fair value using internal models based on observable market inputs such as forward rates, interest rates, our own credit risk and our counterparties’ credit risks.

As of March 31, 2022, there has not been any significant impact to the fair value of our derivative liabilities due to our own credit risk.

As of June 30, 2022, there has not been any significant impact to the fair value of our derivative liabilities due to our own credit risk.

Similarly, there has not been any significant adverse impact to our derivative assets based on our evaluation of our counterparties’ credit risks.

The following table provides carrying amounts and fair values of financial instruments that are not carried at fair value in our Condensed Consolidated Balance Sheet:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(dollars in millions) Carrying

3 unchanged sentences

The following tables provides the valuation hierarchy classification of assets and liabilities that are not carried at fair value in our Condensed Consolidated Balance Sheet:

March 31, 2022

June 30, 2022

(dollars in millions) Total Level 1 Level 2 Level 3

12 unchanged sentences

IAE and IAE LLC retain limited equity with the primary economics of the programs passed to the participants.

As such, we have determined that IAE and IAE LLC are variable interest entities with Pratt

& Whitney as the primary beneficiary.

As such, we have determined that IAE and IAE LLC are variable interest entities with Pratt & Whitney as the primary beneficiary.

IAE and IAE LLC have, therefore, been consolidated.

The carrying amounts and classification of assets and liabilities for variable interest entities in our Condensed Consolidated Balance Sheet are as follows:

(dollars in millions) March 31, 2022 December 31, 2021

(dollars in millions) June 30, 2022 December 31, 2021

Current assets $ 8,130 $ 7,081

7 unchanged sentences

Additional guarantees of project performance for which there is no stated value also remain outstanding.

As of March 31, 2022 and December 31, 2021, the following financial guarantees were outstanding:

March 31, 2022 December 31, 2021

A portion of our third party guarantees are subject to indemnification for our benefit for any liabilities that could arise.

As of June 30, 2022 and December 31, 2021, the following financial guarantees were outstanding:

June 30, 2022 December 31, 2021

(dollars in millions) Maximum Potential Payment Carrying Amount of Liability Maximum Potential Payment Carrying Amount of Liability

3 unchanged sentences

The estimated fair values of the guaranteed assets equal or exceed the value of the related guarantees, net of existing reserves.

Collaboration partners’ share of these financing guarantees is $ 140 million and $ 141 million at March 31, 2022 and December 31, 2021, respectively.

Collaboration partners’ share of these financing guarantees is $ 140 million and $ 141 million at June 30, 2022 and December 31, 2021, respectively.

We also have obligations arising from sales of certain businesses and assets, including those from representations and warranties and related indemnities for environmental, health and safety, tax and employment matters.

The maximum potential payment related to these obligations is not a specified amount as a number of the obligations do not contain financial caps.

The carrying amount of liabilities related to these obligations was $ 118 million and $ 120 million at March 31, 2022 and December 31, 2021, respectively.

The carrying amount of liabilities related to these obligations was $ 110 million and $ 120 million at June 30, 2022 and December 31, 2021, respectively.

These primarily relate to environmental liabilities, which are included in our total environmental liabilities as further discussed in “Note 15:

6 unchanged sentences

Adjustments are made to accruals as claims data and historical experience warrant.

The changes in the carrying amount of service and product warranties and product performance guarantees for the quarters ended March 31, 2022 and 2021 were as follows:

The changes in the carrying amount of service and product warranties and product performance guarantees for the six months ended June 30, 2022 and 2021 were as follows:

(dollars in millions) 2022 2021

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Other ( 11 ) ( 3 )

Balance as of March 31 $ 1,154 $ 1,100

Balance as of June 30 $ 1,143 $ 1,102

Commitments and Contingencies

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We do not expect any additional liability to have a material adverse effect on our results of operations, financial condition or liquidity.

As of March 31, 2022 and December 31, 2021, we had $ 830 million and $ 834 million, respectively, reserved for environmental remediation.

As of June 30, 2022 and December 31, 2021, we had $ 824 million and $ 834 million, respectively, reserved for environmental remediation.

Commercial Aerospace Financing and Other Commitments.

We had commercial aerospace financing commitments and other contractual commitments of approximately $ 15.5 billion and $ 15.6 billion as of March 31, 2022 and December 31, 2021, respectively, on a gross basis before reduction for our collaboration partners’ share.

We had commercial aerospace financing commitments and other contractual commitments of approximately $ 15.4 billion and $ 15.6 billion as of June 30, 2022 and December 31, 2021, respectively, on a gross basis before reduction for our collaboration partners’ share.

Aircraft financing commitments, in the form of debt or lease financing, are provided to certain commercial aerospace customers.

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We enter into these agreements to assist certain affiliates in obtaining financing on more favorable terms, making bids on contracts and performing their contractual obligations.

The stated values of these letters of credit agreements and surety bonds totaled $ 3.7 billion as of March 31, 2022.

The stated values of these letters of credit agreements and surety bonds totaled $ 3.4 billion as of June 30, 2022.

Offset Obligations.

We have entered into industrial cooperation agreements, sometimes in the form of either offset agreements or ICIP agreements, as a condition to obtaining orders for our products and services from certain customers in foreign countries.

At March 31, 2022, the aggregate amount of our offset agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $ 10.9 billion.

At June 30, 2022, the aggregate amount of our offset agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $ 11.7 billion.

These agreements are designed to return economic value to the foreign country by requiring us to engage in activities supporting local defense or commercial industries, promoting a balance of trade, developing in-country technology capabilities or addressing other local development priorities.

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Cost Accounting Standards Claims

As previously disclosed, in April 2019, a Divisional Administrative Contracting Officer (DACO) of the United States DCMA asserted a claim against Pratt & Whitney to recover alleged overpayments of approximately $ 1.73 billion plus interest ($ 748 million at March 31, 2022).

million at June 30, 2022).

The claim is based on Pratt & Whitney’s alleged noncompliance with Cost Accounting Standards (CAS) from January 1, 2007 to March 31, 2019, due to its method of allocating independent research and development costs to government contracts.

Pratt & Whitney believes that the claim is without merit and filed an appeal to the ASBCA on June 7, 2019.

As previously disclosed, in December 2013, a DCMA DACO asserted a claim against Pratt & Whitney to recover alleged overpayments of approximately $ 177 million plus interest ($ 121 million at March 31, 2022).

The claim is based on Pratt & Whitney’s alleged noncompliance with CAS from January 1, 2005 to December 31, 2012, due to its method of determining the cost of collaborator parts used in the calculation of material overhead costs for government contracts.

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Although the ASBCA decision may also be subject to further appellate review, we believe that the ASBCA’s rejection of the DCMA’s asserted measure of the cost of collaborator parts is well supported in fact and law and likely will be sustained.

In December 2018, a DCMA DACO issued a second claim against Pratt & Whitney that similarly

alleges that its method of determining the cost of collaborator parts does not comply with the CAS for calendar years 2013 through 2017.

This second claim, which asserts the same measure of the cost of collaborator parts rejected by the ASBCA’s recent decision, demands payment of $ 269 million plus interest ($ 82 million at March 31, 2022).

In December 2018, a DCMA DACO issued a second claim against Pratt & Whitney that similarly alleges that its method of determining the cost of collaborator parts does not comply with the CAS for calendar years 2013 through 2017.

This second claim, which asserts the same measure of the cost of collaborator parts rejected by the ASBCA’s recent decision, demands payment of $ 269 million plus interest ($ 86 million at June 30, 2022).

Pratt & Whitney appealed this second claim to the ASBCA in January 2019.

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A putative securities class action lawsuit was filed in the United States District Court for the District of Arizona against the Company and certain of its executives alleging that the defendants violated federal securities laws by making material misstatements in regulatory filings regarding internal controls over financial reporting in RMD.

Three shareholder derivative lawsuits were filed in the United States District Court for the District of Delaware against the former Raytheon Company Board of Directors, the Company and certain of its executives, each alleging that defendants violated federal securities laws and breached their fiduciary duties by engaging in improper accounting practices, failing to implement sufficient internal financial and compliance controls, and making a series of false and misleading statements in regulatory filings.

Three shareholder derivative lawsuits were filed in the United States District Court for the District of Delaware against the former Raytheon Company Board of Directors, the

Company and certain of its executives, each alleging that defendants violated federal securities laws and breached their fiduciary duties by engaging in improper accounting practices, failing to implement sufficient internal financial and compliance controls, and making a series of false and misleading statements in regulatory filings.

We believe that each of these lawsuits lacks merit.

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Plaintiffs seek money damages, attorneys’ fees and other relief.

We continue to believe that the

Company has meritorious defenses to these claims.

We continue to believe that the Company has meritorious defenses to these claims.

At this time, the Company is unable to predict the outcome;

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No current or former Collins employees were named in the indictment.

We were recently advised that the Company is a target of the DOJ investigation, and we continue to cooperate with the investigation.

We have been advised that the Company is a target of the DOJ investigation, and we continue to cooperate with the investigation.

No criminal charge has been filed against the Company or its affiliates.

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Plaintiffs in each of the civil lawsuits seek to represent different purported classes of engineers and skilled laborers employed by Pratt & Whitney and other supplier-defendants since 2011.

Collins was also named as a defendant in some of the lawsuits.

Plaintiffs in each of the lawsuits seek treble damages in an undetermined amount, plus attorneys’ fees and costs of suit.

All of the lawsuits have been consolidated, and we anticipate the filing of a single amended class action complaint.

All of the lawsuits have been consolidated, and a single amended class action complaint was filed.

We believe that the claims asserted lack merit.

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Accumulated Other Comprehensive Loss

A summary of the changes in each component of Accumulated other comprehensive loss, net of tax for the quarters ended March 31, 2022 and 2021 is provided below:

A summary of the changes in each component of Accumulated other comprehensive loss, net of tax for the quarters and six months ended June 30, 2022 and 2021 is provided below:

(dollars in millions) Foreign Currency Translation Defined Benefit Pension and Postretirement Plans Unrealized Hedging Gains (Losses) Accumulated Other Comprehensive Income (Loss)

Quarter Ended March 31, 2022

Quarter Ended June 30, 2022

Balance at March 31, 2022 $ ( 194 ) $ ( 1,811 ) $ ( 110 ) $ ( 2,115 )

Other comprehensive income (loss) before reclassifications, net ( 708 ) 14 ( 199 ) ( 893 )

Amounts reclassified, pre-tax — 33 17 50

Tax benefit (expense) ( 6 ) ( 8 ) 41 27

Balance at June 30, 2022 $ ( 908 ) $ ( 1,772 ) $ ( 251 ) $ ( 2,931 )

Six Months Ended June 30, 2022

Balance at December 31, 2021 $ 49 $ ( 1,828 ) $ ( 136 ) $ ( 1,915 )

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Tax benefit (expense) ( 9 ) ( 12 ) 30 9

Balance at March 31, 2022 $ ( 194 ) $ ( 1,811 ) $ ( 110 ) $ ( 2,115 )

Balance at June 30, 2022 $ ( 908 ) $ ( 1,772 ) $ ( 251 ) $ ( 2,931 )

(dollars in millions) Foreign Currency Translation Defined Benefit Pension and Postretirement Plans Unrealized Hedging Gains (Losses) Accumulated Other Comprehensive Income (Loss)

Quarter Ended March 31, 2021

Quarter Ended June 30, 2021

Balance at March 31, 2021 $ 529 $ ( 4,441 ) $ ( 9 ) $ ( 3,921 )

Other comprehensive income (loss) before reclassifications, net 258 ( 14 ) 108 352

Amounts reclassified, pre-tax — 64 ( 20 ) 44

Tax benefit (expense) 2 ( 11 ) ( 21 ) ( 30 )

Balance at June 30, 2021 $ 789 $ ( 4,402 ) $ 58 $ ( 3,555 )

Six Months Ended June 30, 2021

Balance at December 31, 2020 $ 710 $ ( 4,483 ) $ 39 $ ( 3,734 )

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Tax benefit (expense) ( 3 ) ( 23 ) ( 9 ) ( 35 )

Balance at March 31, 2021 $ 529 $ ( 4,441 ) $ ( 9 ) $ ( 3,921 )

Balance at June 30, 2021 $ 789 $ ( 4,402 ) $ 58 $ ( 3,555 )

Segment Financial Data

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Generally Accepted Accounting Principles (GAAP) and our pension and PRB expense under U.S.

government Cost Accounting Standards (CAS) primarily related to our RIS and RMD segments.

government Cost Accounting

Standards (CAS) primarily related to our RIS and RMD segments.

While the ultimate liability for pension and PRB costs under FAS and CAS is similar, the pattern of cost recognition is different.

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These pricing arrangements may result in margins different than what the purchasing segment realizes on the ultimate third-party sale.

Results for the quarters ended March 31, 2022 and 2021 are as follows:

Results for the quarters ended June 30, 2022 and 2021 are as follows:

Net Sales Operating Profit Operating Profit Margins

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Army’s Lower Tier Air and Missile Defense Sensor (LTAMDS) project.

Results for the six months ended June 30, 2022 and 2021 are as follows:

Net Sales Operating Profit Operating Profit Margins

(dollars in millions) 2022 2021 2022 2021 2022 2021

Collins Aerospace Systems $ 9,835 $ 8,915 $ 986 $ 820 10.0 % 9.2 %

Pratt & Whitney 9,498 8,310 453 132 4.8 % 1.6 %

Raytheon Intelligence & Space 7,142 7,570 693 803 9.7 % 10.6 %

Raytheon Missiles & Defense 7,085 7,778 735 1,028 10.4 % 13.2 %

Total segment 33,560 32,573 2,867 2,783 8.5 % 8.5 %

Eliminations and other (1)

( 1,530 ) ( 1,442 ) ( 81 ) ( 71 )

Corporate expenses and other unallocated items (2)

— — ( 178 ) ( 230 )

FAS/CAS operating adjustment — — 757 848

Acquisition accounting adjustments — — ( 932 ) ( 1,035 )

Consolidated $ 32,030 $ 31,131 $ 2,433 $ 2,295 7.6 % 7.4 %

(1) Includes the operating results of certain smaller non-reportable business segments.

(2) Includes the net expenses related to the U.S.

Army’s LTAMDS project.

We disaggregate our contracts from customers by geographic region based on customer location, by customer and by sales type.

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We believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Segment sales disaggregated by geographic region for the quarters ended March 31, 2022 and 2021 are as follows:

Segment sales disaggregated by geographic region for the quarters ended June 30, 2022 and 2021 are as follows:

(dollars in millions) Collins Aerospace Systems Pratt & Whitney Raytheon Intelligence & Space Raytheon Missiles & Defense Other Total Collins Aerospace Systems Pratt & Whitney Raytheon Intelligence & Space Raytheon Missiles & Defense Other Total

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Business segment sales $ 5,011 $ 4,969 $ 3,570 $ 3,558 $ ( 794 ) $ 16,314 $ 4,545 $ 4,280 $ 3,805 $ 3,985 $ ( 735 ) $ 15,880

Segment sales disaggregated by customer for the quarters ended March 31, 2022 and 2021 are as follows:

Segment sales disaggregated by geographic region for the six months ended June 30, 2022 and 2021 are as follows:

United States $ 4,707 $ 4,874 $ 5,718 $ 4,612 $ 4 $ 19,915 $ 4,565 $ 4,298 $ 5,985 $ 4,742 $ 11 $ 19,601

Europe 2,584 1,936 210 520 — 5,250 2,141 1,433 232 652 5 4,463

Asia Pacific 952 1,698 353 662 — 3,665 875 1,764 409 726 — 3,774

Middle East and North Africa 231 190 143 1,134 — 1,698 210 189 265 1,495 — 2,159

Canada and All Other 598 800 74 30 — 1,502 420 626 55 33 — 1,134

Consolidated net sales 9,072 9,498 6,498 6,958 4 32,030 8,211 8,310 6,946 7,648 16 31,131

Inter-segment sales 763 — 644 127 ( 1,534 ) — 704 — 624 130 ( 1,458 ) —

Business segment sales $ 9,835 $ 9,498 $ 7,142 $ 7,085 $ ( 1,530 ) $ 32,030 $ 8,915 $ 8,310 $ 7,570 $ 7,778 $ ( 1,442 ) $ 31,131

Segment sales disaggregated by type of customer for the quarters ended June 30, 2022 and 2021 are as follows:

government (1)

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(1) Excludes foreign military sales through the U.S.

Segment sales disaggregated by sales type for the quarters ended March 31, 2022 and 2021 are as follows:

Segment sales disaggregated by type of customer for the six months ended June 30, 2022 and 2021 are as follows:

government (1)

$ 2,074 $ 2,591 $ 5,617 $ 4,611 $ 4 $ 14,897 $ 2,369 $ 2,453 $ 5,844 $ 4,741 $ 11 $ 15,418

Foreign military sales through the U.S.

government 107 501 309 1,440 — 2,357 65 639 417 1,671 — 2,792

Foreign government direct commercial sales 514 219 416 905 — 2,054 546 266 446 1,235 — 2,493

Commercial aerospace and other commercial 6,377 6,187 156 2 — 12,722 5,231 4,952 239 1 5 10,428

Consolidated net sales 9,072 9,498 6,498 6,958 4 32,030 8,211 8,310 6,946 7,648 16 31,131

Inter-segment sales 763 — 644 127 ( 1,534 ) — 704 — 624 130 ( 1,458 ) —

Business segment sales $ 9,835 $ 9,498 $ 7,142 $ 7,085 $ ( 1,530 ) $ 32,030 $ 8,915 $ 8,310 $ 7,570 $ 7,778 $ ( 1,442 ) $ 31,131

(1) Excludes foreign military sales through the U.S.

Segment sales disaggregated by sales type for the quarters ended June 30, 2022 and 2021 are as follows:

Products $ 3,577 $ 2,982 $ 2,564 $ 3,135 $ — $ 12,258 $ 3,349 $ 2,582 $ 2,675 $ 3,565 $ 8 $ 12,179

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Business segment sales $ 5,011 $ 4,969 $ 3,570 $ 3,558 $ ( 794 ) $ 16,314 $ 4,545 $ 4,280 $ 3,805 $ 3,985 $ ( 735 ) $ 15,880

RIS and RMD segment sales disaggregated by contract type for the quarters ended March 31, 2022 and 2021 are as follows:

Segment sales disaggregated by sales type for the six months ended June 30, 2022 and 2021 are as follows:

Products $ 7,059 $ 5,615 $ 5,168 $ 6,274 $ 4 $ 24,120 $ 6,531 $ 5,005 $ 5,351 $ 6,940 $ 16 $ 23,843

Services 2,013 3,883 1,330 684 — 7,910 1,680 3,305 1,595 708 — 7,288

Consolidated net sales 9,072 9,498 6,498 6,958 4 32,030 8,211 8,310 6,946 7,648 16 31,131

Inter-segment sales 763 — 644 127 ( 1,534 ) — 704 — 624 130 ( 1,458 ) —

Business segment sales $ 9,835 $ 9,498 $ 7,142 $ 7,085 $ ( 1,530 ) $ 32,030 $ 8,915 $ 8,310 $ 7,570 $ 7,778 $ ( 1,442 ) $ 31,131

RIS and RMD segment sales disaggregated by contract type for the quarters ended June 30, 2022 and 2021 are as follows:

(dollars in millions) Raytheon Intelligence & Space Raytheon Missiles & Defense Raytheon Intelligence & Space Raytheon Missiles & Defense

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Business segment sales $ 3,570 $ 3,558 $ 3,805 $ 3,985

RIS and RMD segment sales disaggregated by contract type for the six months ended June 30, 2022 and 2021 are as follows:

(dollars in millions) Raytheon Intelligence & Space Raytheon Missiles & Defense Raytheon Intelligence & Space Raytheon Missiles & Defense

Fixed-price $ 2,693 $ 4,118 $ 3,027 $ 4,653

Cost-type 3,805 2,840 3,919 2,995

Consolidated net sales 6,498 6,958 6,946 7,648

Inter-segments sales 644 127 624 130

Business segment sales $ 7,142 $ 7,085 $ 7,570 $ 7,778

Remaining Performance Obligations (RPO)

RPO represent the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied.

Total RPO was $ 154 billion as of March 31, 2022.

Total RPO was $ 161 billion as of June 30, 2022.

In the quarter ended March 31, 2022, we reversed approximately $ 1.3 billion of RPO related to our sales contracts in Russia due to global sanctions on and export controls with respect to Russia, as further discussed in “Note 1:

Basis of Presentation.” Of the total RPO as of March 31, 2022, we expect approximately 30 % will be recognized as sales over the next 12 months.

Basis of Presentation.” Of the total RPO as of June 30, 2022, we expect approximately 30 % will be recognized as sales over the next 12 months.

Approximately 40 % of our RPO relates to long-term commercial aerospace maintenance contracts at Pratt & Whitney, which are generally expected to be realized over a span of up to 15 years.

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We are currently evaluating the impact of the standard, but we do not expect it to have a material impact on our disclosures.

Other new pronouncements issued but not effective until after March 31, 2022 are not expected to have a material impact on our financial condition, results of operations or liquidity.

With respect to the unaudited condensed consolidated financial information of Raytheon Technologies for the quarters ended March 31, 2022 and 2021, PricewaterhouseCoopers LLP (PwC) reported that it has applied limited procedures in accordance with professional standards for a review of such information.

However, its report dated April 26, 2022, appearing below, states that the firm did not audit and does not express an opinion on that unaudited condensed consolidated financial information.

Other new pronouncements issued but not effective until after June 30, 2022 are not expected to have a material impact on our financial condition, results of operations or liquidity.

With respect to the unaudited condensed consolidated financial information of Raytheon Technologies for the quarters and six months ended June 30, 2022 and 2021, PricewaterhouseCoopers LLP (PwC) reported that it has applied limited procedures in accordance with professional standards for a review of such information.

However, its report dated July 26, 2022, appearing below, states that the firm did not audit and does not express an opinion on that unaudited condensed consolidated financial information.

PwC has not carried out any significant or additional audit tests beyond those that would have been necessary if their report had not been included.

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Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheet of Raytheon Technologies Corporation and its subsidiaries (the “Company”) as of March 31, 2022, and the related condensed consolidated statements of operations, of comprehensive income, of changes in equity, and of cash flows for the three-month periods ended March 31, 2022 and 2021, including the related notes (collectively referred to as the “interim financial information”).

We have reviewed the accompanying condensed consolidated balance sheet of Raytheon Technologies Corporation and its subsidiaries (the “Company”) as of June 30, 2022, and the related condensed consolidated statements of operations, of comprehensive income, and of changes in equity for the three-month and six-month periods ended June 30, 2022 and 2021 and the condensed consolidated statement of cash flows for the six-month periods ended June 30, 2022 and 2021, including the related notes (collectively referred to as the “interim financial information”).

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

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Boston, Massachusetts

April 26, 2022

July 26, 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements