Raytheon Technologies Corporation (NYSE:RTX) Q4 2022 Earnings Call Transcript

Page 3 of 10

Chris Calio: Hey Ron, it’s Chris. Maybe I’ll take a crack at the sales synergy. So again, as we kind of said upfront, this is about taking the organization to the next level, right? You got a tremendous defense backlog, something like $70 billion RIS R&D. And this is really about enhancing customer alignment and coordination, we’ve had customer feedback throughout the last couple of years about the need for us to figure out how to better integrate some of our solutions, providing mission solutions to the customers, coming in with a unified narrative and an investment story. All of these things, I think, will enable us to work better and frankly, collaborate better across businesses. In large organizations like ours, you won’t be surprised to hear that sometimes there’s some friction there, and we think this will help remove some of that friction and again, provide better solutions to the customer.

So thus far, the customer feedback, those that we’ve spoken to sort of see that potential and it’s up to us to execute on it. As of the portfolio, I think, again, RIS has a very strong portfolio. Book-to-bill was 0.96 not necessarily where we wanted. We had some campaigns push out of the year, but feel really strong again about the portfolio, and we’re going to continue to invest in it.

Greg Hayes: Ron, let me just jump in and add to that. As we look at this reorganization, this is not just about putting RIS and RMD together to recreate the old legacy Raytheon Company. We’re going to look to take the entire portfolio of RIS, Collins, RMD and move the pieces where they most appropriately aligned from a technology and a customer standpoint. So you may well see pieces, especially related to JADC2 moving into the Collins business. We’ll see how all of this evolves over the next several months. I would tell you by the time we get to the end of the first quarter, we should have a really good understanding of what the new organization is going to look like. We’ll share that with everybody at that point. It’s going to take us longer than that to actually do the rewiring that’s why we’re talking about kind of a mid-year.

But I agree with Chris. I think the portfolio that we have across the legacy Raytheon and Collins business is really quite strong. And the book-to-bill we’ll be €“ we’ll get better at some of those legacy RI&S businesses, especially in the Space segment. I would also tell you that the performance in Q4 was not great, but it was really program €“ legacy programs from many years ago that we still have not completed. So there’s some work to do there. But I would tell you the portfolio is not broken or the business is not broken.

Ronald Epstein: Got it. Right. Thank you.

Operator: Thank you. Our next question comes from the line of Noah Poponak of Goldman Sachs. Your question please, Noah.

Noah Poponak: Hey, good morning, everybody.

Neil Mitchill: Hey Noah, how are you? Good morning.

Page 3 of 10