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Item 1. Financial Statements

2024-10-22 compared with 2024-07-25 · 244 added, 218 removed, 784 unchanged (37% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

(dollars in millions, except per share amounts) 2024 2023 2024 2023

9 unchanged sentences

Other income (expense), net 134 3 ( 390 ) 116

Operating profit 529 1,493 2,399 3,180

Operating profit (loss) 2,028 ( 1,396 ) 4,427 1,784

Non-operating expense (income), net:

2 unchanged sentences

Total non-operating expense (income), net 122 ( 74 ) 242 ( 317 )

Income before income taxes 428 1,607 2,279 3,423

Income tax expense 253 248 361 583

Net income 175 1,359 1,918 2,840

Income (loss) before income taxes 1,906 ( 1,322 ) 4,185 2,101

Income tax expense (benefit) 371 ( 389 ) 732 194

Net income (loss) 1,535 ( 933 ) 3,453 1,907

Noncontrolling interest in subsidiaries’ earnings 63 51 161 138

Net income attributable to common shareowners $ 111 $ 1,327 $ 1,820 $ 2,753

Earnings Per Share attributable to common shareowners:

Net income (loss) attributable to common shareowners $ 1,472 $ ( 984 ) $ 3,292 $ 1,769

Earnings (Loss) Per Share attributable to common shareowners:

Basic $ 1.10 $ ( 0.68 ) $ 2.47 $ 1.22

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Quarter Ended June 30, Six Months Ended June 30,

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

Quarter Ended September 30, Nine Months Ended September 30,

(dollars in millions) 2024 2023 2024 2023

Net income $ 175 $ 1,359 $ 1,918 $ 2,840

Net income (loss) $ 1,535 $ ( 933 ) $ 3,453 $ 1,907

Other comprehensive income (loss), before tax:

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Other comprehensive income (loss), before tax 772 ( 668 ) 434 ( 174 )

Income tax benefit related to items of other comprehensive income (loss) 10 ( 19 ) 39 22

Income tax benefit (expense) related to items of other comprehensive income (loss) ( 23 ) 54 16 76

Other comprehensive income (loss), net of tax 749 ( 614 ) 450 ( 98 )

Comprehensive income 92 1,846 1,619 3,356

Comprehensive income (loss) 2,284 ( 1,547 ) 3,903 1,809

Comprehensive income attributable to noncontrolling interest 63 51 161 138

Comprehensive income attributable to common shareowners $ 28 $ 1,814 $ 1,521 $ 3,269

Comprehensive income (loss) attributable to common shareowners $ 2,221 $ ( 1,598 ) $ 3,742 $ 1,671

See accompanying Notes to Condensed Consolidated Financial Statements

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CONDENSED CONSOLIDATED BALANCE SHEET

(dollars in millions) June 30, 2024 December 31, 2023

(dollars in millions) September 30, 2024 December 31, 2023

Current Assets

44 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(dollars in millions) 2024 2023

1 unchanged sentence

Net income $ 3,453 $ 1,907

Adjustments to reconcile net income to net cash flows provided by (used in) operating activities:

Adjustments to reconcile net income to net cash flows provided by operating activities:

Depreciation and amortization 3,225 3,152

Deferred income tax provision (benefit) 185 ( 700 )

Deferred income tax benefit ( 119 ) ( 728 )

Stock compensation cost 328 319

8 unchanged sentences

Other operating activities, net 59 219

Net cash flows provided by (used in) operating activities 3,075 ( 144 )

Net cash flows provided by operating activities 5,598 3,172

Investing Activities:

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Increase in other intangible assets ( 447 ) ( 536 )

(Payments) receipts from settlements of derivative contracts, net ( 29 ) 45

Receipts (payments) from settlements of derivative contracts, net 3 ( 18 )

Other investing activities, net ( 38 ) 97

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Other financing activities, net ( 271 ) ( 190 )

Net cash flows (used in) provided by financing activities ( 3,591 ) 468

Net cash flows used in financing activities ( 4,749 ) ( 1,909 )

Effect of foreign exchange rate changes on cash and cash equivalents 11 4

Net decrease in cash, cash equivalents, and restricted cash ( 568 ) ( 859 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 105 ( 794 )

Cash, cash equivalents, and restricted cash, beginning of period 6,626 6,291

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

(dollars in millions, except per share amounts;

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Beginning balance ( 27,080 ) ( 16,713 ) ( 26,977 ) ( 15,530 )

Share-based matching contributions under defined contribution plans 10 — 10 —

Common stock repurchased ( 71 ) ( 1,457 ) ( 174 ) ( 2,640 )

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Beginning balance 51,488 52,489 52,154 52,269

Net income attributable to common shareholders 111 1,327 1,820 2,753

Net income (loss) attributable to common shareholders 1,472 ( 984 ) 3,292 1,769

Dividends on common stock — 5 ( 2,415 ) ( 2,472 )

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Disposition of noncontrolling interest, net — — — ( 3 )

Capital contributions 14 — 14 —

Ending balance 1,712 1,617 1,712 1,617

Equity at June 30

Equity at September 30

$ 62,826 $ 71,213 $ 62,826 $ 71,213

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Basis of Presentation

The Condensed Consolidated Financial Statements at June 30, 2024 and for the quarters and six months ended June 30, 2024 and 2023 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 September 30, 2024 and for the quarters and nine months ended September 30, 2024 and 2023 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.

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We reclassified certain immaterial prior period amounts within the Condensed Consolidated Statement of Cash Flows to conform to our current period presentation.

Effective July 1, 2023, we streamlined the structure of our core businesses to three principal business segments:

Collins Aerospace (Collins), Pratt & Whitney, and Raytheon.

Prior period information has been recast to conform to our current period presentation.

Raytheon follows a 4-4-5 fiscal calendar while Collins and Pratt & Whitney use a quarter calendar end.

Throughout this Form 10-Q, when we refer to the quarters and six months ended June 30, 2024 and 2023 with respect to Raytheon, we are referring to their June 30, 2024 and July 2, 2023 fiscal quarter ends, respectively.

Raytheon follows a 4-4-5 fiscal calendar while Collins Aerospace (Collins) and Pratt & Whitney use a quarter calendar end.

Throughout this Form 10-Q, when we refer to the quarters and nine months ended September 30, 2024 and 2023 with respect to Raytheon, we are referring to their September 29, 2024 and October 1, 2023 fiscal quarter ends, respectively.

Legal Matters.

The Company has made progress in the quarter ended June 30, 2024 toward resolving several outstanding legal matters, herein referred to as “Expected Resolution of Certain Legal Matters.” The Company expects to enter into a deferred prosecution agreement with the Department of Justice (DOJ) and to be subject to an administrative order with the Securities and Exchange Commission (SEC) to resolve the previously disclosed criminal and civil government investigations into improper payments made by Raytheon Company and its joint venture, Thales-Raytheon Systems (TRS), in connection with certain Middle East contracts since 2012 (Thales-Raytheon Systems and Related Matters);

the Company also expects to enter into a deferred prosecution agreement and a False Claims Act (FCA) settlement agreement with the DOJ to resolve previously disclosed criminal and civil government investigations into defective pricing claims for certain legacy Raytheon Company contracts entered into between 2011 and 2013 and in 2017 (DOJ Investigation and Contract Pricing Disputes).

In addition, the Company has made progress in the quarter ended June 30, 2024 toward resolving certain voluntarily disclosed export controls violations primarily identified in connection with the integration of Rockwell Collins and, to a lesser extent, Raytheon Company, including certain violations expected to be resolved pursuant to a consent agreement with the Department of State (DOS) (Trade Compliance Matters).

As a result of the progress made, we recorded a combined pre-tax charge of $ 918 million during the quarter ended June 30, 2024, which included an accrual of $ 269 million related to the DOJ Investigation and Contract Pricing Disputes (in addition to amounts previously accrued), an accrual of $ 364 million related to Thales-Raytheon Systems and Related Matters (in addition to amounts previously accrued), and an accrual of $ 285 million related to Trade Compliance Matters.

The Company has resolved several outstanding legal matters, herein referred to as “Resolution of Certain Legal Matters.” The Company entered into a deferred prosecution agreement (DPA) with the Department of Justice (DOJ) and the Company settled an administrative proceeding with the Securities and Exchange Commission (SEC) to resolve the previously disclosed criminal and civil government investigations into payments made by Raytheon Company and its joint venture, Thales-Raytheon Systems (TRS), in connection with certain Middle East contracts since 2012 (Thales-Raytheon Systems and Related Matters).

The Company also entered into a DPA and a False Claims Act (FCA) settlement agreement with the DOJ to resolve previously disclosed criminal and civil government investigations into defective pricing claims for certain legacy Raytheon Company contracts entered into between 2011 and 2013 and in 2017 (DOJ Investigation and Contract Pricing Disputes).

In addition, the Company resolved certain voluntarily disclosed export controls violations primarily identified in connection with the integration of Rockwell Collins and, to a lesser extent, Raytheon Company, including certain violations that were resolved pursuant to a consent agreement with the Department of State (DOS) (Trade Compliance Matters).

As a result, we recorded a combined pre-tax charge of $ 918 million during the second quarter of 2024, which included an accrual of $ 269 million related to the DOJ Investigation and Contract Pricing Disputes (in addition to amounts previously accrued), an accrual of $ 364 million related to Thales-Raytheon Systems and Related Matters (in addition to amounts previously accrued), and an accrual of $ 285 million related to Trade Compliance Matters.

See “Note 16:

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Pratt & Whitney Powder Metal Matter.

As previously disclosed, Pratt & Whitney has determined that a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100G-JM (PW1100) Geared Turbofan (GTF) fleet, which powers the A320neo family of aircraft (A320neo) (herein referred to as the “Powder Metal Matter”).

In 2023, Pratt & Whitney determined that a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100G-JM (PW1100) Geared Turbofan (GTF) fleet, which powers the A320neo family of aircraft (A320neo) (herein referred to as the “Powder Metal Matter”).

See “Note 16:

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On March 29, 2024, we completed the sale of our Cybersecurity, Intelligence and Services (CIS) business within our Raytheon segment for proceeds of approximately $ 1.3 billion in cash, resulting in an aggregate pre-tax gain, net of transaction and other related costs, of $ 0.4 billion ($ 0.2 billion after tax), primarily recognized in Other income (expense), net within the Condensed Consolidated Statement of Operations.

As previously disclosed, on July 20, 2023, we entered into a definitive agreement to sell the actuation and flight control business within our Collins segment to Safran S.A.

On July 1, 2024, we entered into a definitive agreement to sell our Goodrich Hoist & Winch business within our Collins segment for approximately $ 0.5 billion in cash.

The closing of the transaction is subject to regulatory approvals and other customary closing conditions.

On July 20, 2023, we entered into a definitive agreement to sell the actuation and flight control business within our Collins segment to Safran S.A.

for gross proceeds of approximately $ 1.8 billion.

On November 16, 2023, the Italian government notified RTX that it had denied Safran’s proposed acquisition of the portion of the Collins business conducted by Microtecnica S.r.l.

On June 4, 2024, the Italian government notified RTX that it will now approve the proposed transaction in response to additional commitments Safran has agreed to make in respect of the proposed transaction.

On June 4, 2024, the Italian government issued a further decree indicating its approval of the proposed transaction in response to additional commitments Safran has agreed to make in respect of the proposed transaction.

The closing of the transaction is subject to other regulatory approvals and other customary closing conditions.

On July 1, 2024, we entered into a definitive agreement to sell our Goodrich Hoist & Winch business within our Collins segment for approximately $ 0.5 billion in cash.

The closing of the transaction is subject to regulatory approvals and other customary closing conditions.

Goodwill and Intangible Assets

Changes in our goodwill balances for the six months ended June 30, 2024 were as follows:

(dollars in millions) Balance as of December 31, 2023 Acquisitions and Divestitures Foreign Currency Translation and Other Balance as of June 30, 2024

Changes in our goodwill balances for the nine months ended September 30, 2024 were as follows:

(dollars in millions) Balance as of December 31, 2023 Acquisitions and Divestitures Foreign Currency Translation and Other Balance as of September 30, 2024

Collins Aerospace (1)

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Identifiable intangible assets are comprised of the following:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

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

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Total $ 49,170 $ ( 15,011 ) $ 48,757 $ ( 13,358 )

Amortization of intangible assets for the quarters and six months ended June 30, 2024 and 2023 was $ 534 million and $ 1,060 million and $ 510 million and $ 1,019 million, respectively.

Amortization of intangible assets for the quarters and nine months ended September 30, 2024 and 2023 was $ 560 million and $ 1,620 million and $ 545 million and $ 1,564 million, respectively.

The following is the expected amortization of intangible assets for the remainder of 2024 through 2029:

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Earnings Per Share

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

(dollars and shares in millions, except per share amounts) 2024 2023 2024 2023

Net income attributable to common shareowners $ 111 $ 1,327 $ 1,820 $ 2,753

Net income (loss) attributable to common shareowners $ 1,472 $ ( 984 ) $ 3,292 $ 1,769

Basic weighted average number of shares outstanding 1,333.2 1,448.1 1,331.4 1,455.7

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Diluted weighted average number of shares outstanding 1,346.2 1,448.1 1,341.8 1,465.9

Earnings Per Share attributable to common shareowners:

Earnings (Loss) Per Share attributable to common shareowners:

Basic $ 1.10 $ ( 0.68 ) $ 2.47 $ 1.22

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

For the quarter and six months ended June 30, 2024, the number of stock awards excluded from the computation was 3.9 million and 9.6 million, respectively.

For both the quarter and six months ended June 30, 2023, the number of stock awards excluded from the computation was 4.0 million.

There were no stock awards excluded from the computation for the quarter ended September 30, 2024, and the number of stock awards excluded from the nine months ended September 30, 2024 was 6.4 million.

For the quarter and nine months ended September 30, 2023, the number of stock awards excluded from the computation was 20.5 million and 7.0 million, respectively.

All outstanding stock awards are excluded in the computation of diluted EPS in the quarter ended September 30, 2023 because their effect was antidilutive due to the loss from continuing operations.

Changes in Contract Estimates at Completion

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

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

(dollars in millions, except per share amounts) 2024 2023 2024 2023

Total net sales $ ( 63 ) $ ( 235 ) $ ( 78 ) $ ( 304 )

Operating profit ( 62 ) ( 30 ) ( 224 ) ( 154 )

Income attributable to common shareowners (1)

Operating profit (loss) ( 91 ) ( 279 ) ( 315 ) ( 433 )

Income (loss) attributable to common shareowners (1)

( 72 ) ( 220 ) ( 249 ) ( 342 )

Diluted earnings per share attributable to common shareowners (1)

Diluted earnings (loss) per share attributable to common shareowners (1)

$ ( 0.05 ) $ ( 0.15 ) $ ( 0.19 ) $ ( 0.23 )

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statutory tax rate of 21%, which approximates our tax rate on our EAC adjustments.

In addition to the amounts included in the table above, during the quarter ended June 30, 2024, Raytheon initiated the termination of a fixed price development contract with a foreign customer, herein referred to as “Raytheon Contract Termination.” As a result of this action, Raytheon recognized a $ 575 million charge related to the estimated impact of this termination.

This charge includes the write-off of remaining contract assets and our best estimate of the expected settlement in conjunction with this termination.

In addition to the amounts included in the table above, during the second quarter of 2024, Raytheon initiated the termination of a fixed price development contract with a foreign customer, herein referred to as “Raytheon Contract Termination.” As a result of this action, Raytheon recognized a $ 575 million charge related to the estimated impact of this termination.

This charge included the write-off of remaining contract assets and our best estimate of the expected settlement in conjunction with this termination.

Subsequent to September 30, 2024, the contract termination agreement was executed.

Accounts Receivable, Net

Accounts receivable, net consisted of the following:

(dollars in millions) June 30, 2024 December 31, 2023

(dollars in millions) September 30, 2024 December 31, 2023

Accounts receivable $ 10,414 $ 11,154

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Total contract assets and contract liabilities were as follows:

(dollars in millions) June 30, 2024 December 31, 2023

(dollars in millions) September 30, 2024 December 31, 2023

Contract assets $ 14,684 $ 12,139

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Net contract liabilities $ ( 3,752 ) $ ( 5,044 )

Contract assets increased $ 1.4 billion during the six months ended June 30, 2024 primarily due to sales in excess of billings on certain contracts at Pratt & Whitney and Raytheon.

Contract liabilities increased $ 0.5 billion during the six months ended June 30, 2024 primarily due to billings in excess of sales on certain contracts at Raytheon.

We recognized revenue of $ 1.8 billion and $ 4.4 billion during the quarter and six months ended June 30, 2024, respectively, related to contract liabilities outstanding as of January 1, 2024 and recognized revenue of $ 1.5 billion and $ 3.4 billion during the quarter and six months ended June 30, 2023, respectively, related to contract liabilities outstanding as of January 1, 2023.

As of June 30, 2024, our Contract liabilities include approximately $ 405 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.

Contract assets are net of an allowance for expected credit losses of $ 203 million and $ 197 million as of June 30, 2024 and December 31, 2023, respectively.

Contract assets increased $ 2.5 billion during the nine months ended September 30, 2024 primarily due to sales in excess of billings on certain contracts at Pratt & Whitney and Raytheon.

Contract liabilities increased $ 1.3 billion during the nine months ended September 30, 2024 primarily due to billings in excess of sales on certain contracts at Raytheon.

We recognized revenue of $ 1.3 billion and $ 5.7 billion during the quarter and nine months ended September 30, 2024, respectively, related to contract liabilities outstanding as of January 1, 2024 and recognized revenue of $ 0.9 billion and $ 4.4 billion during the quarter and nine months ended September 30, 2023, respectively, related to contract liabilities outstanding as of January 1, 2023.

During the third quarter of 2024, we received a critical license required to restart work under certain contracts with a Middle East customer.

In order to perform under these contracts, significant actions are required, including obtaining additional regulatory approvals, and therefore we have not recognized revenue on these contracts to date.

As of September 30, 2024, our Contract liabilities include approximately $ 430 million of advance payments received in connection with these contracts, which may become refundable to the customer if the contracts are ultimately terminated.

Contract assets are net of an allowance for expected credit losses of $ 177 million and $ 197 million as of September 30, 2024 and December 31, 2023, respectively.

Inventory, net

Inventory, net consisted of the following:

(dollars in millions) June 30, 2024 December 31, 2023

(dollars in millions) September 30, 2024 December 31, 2023

Raw materials $ 4,467 $ 3,911

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Borrowings and Lines of Credit

As of June 30, 2024, we had a revolving credit agreement with various banks permitting aggregate borrowings of up to $ 5.0 billion, which expires in August 2028.

As of June 30, 2024, there were no borrowings outstanding under this agreement.

As of September 30, 2024, we had a revolving credit agreement with various banks permitting aggregate borrowings of up to $ 5.0 billion, which expires in August 2028.

As of September 30, 2024, there were no borrowings outstanding under this agreement.

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 364 days from the date of issuance.

As of June 30, 2024, our maximum commercial paper borrowing limit was $ 5.0 billion as the commercial paper is backed by our $ 5.0 billion revolving credit agreement.

At June 30, 2024 and December 31, 2023, we had no commercial paper borrowings outstanding.

During the six months ended June 30, 2024, we had no new borrowings or repayments of commercial paper with maturities greater than 90 days.

During the six months ended June 30, 2023, we had no new borrowings and $ 200 million in repayments of commercial paper with maturities greater than 90 days.

There were no issuances of long-term debt during the six months ended June 30, 2024.

We had the following issuances of long-term debt during the six months ended June 30, 2023:

As of September 30, 2024, our maximum commercial paper borrowing limit was $ 5.0 billion as the commercial paper is backed by our $ 5.0 billion revolving credit agreement.

At September 30, 2024 and December 31, 2023, we had no commercial paper borrowings outstanding.

During the nine months ended September 30, 2024, we had no new borrowings or repayments of commercial paper with maturities greater than 90 days.

During the nine months ended September 30, 2023, we had no new borrowings and had $ 200 million in repayments of commercial paper with maturities greater than 90 days.

There were no issuances of long-term debt during the nine months ended September 30, 2024.

We had the following issuances of long-term debt during the nine months ended September 30, 2023:

Date Description of Notes Aggregate Principal Balance (in millions)

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5.375 % notes due 2053

There were no repayments of long-term debt during the six months ended June 30, 2023.

We made the following repayments of long-term debt during the six months ended June 30, 2024:

We made the following repayments of long-term debt during the nine months ended September 30, 2024 and 2023:

Date Description of Notes Aggregate Principal Balance (in millions)

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March 15, 2024 3.200 % notes due 2024

(dollars in millions) June 30, 2024 December 31, 2023

August 16, 2023 3.650 % notes due 2023

Long-term debt consisted of the following:

(dollars in millions) September 30, 2024 December 31, 2023

3.200 % notes due 2024 (1)

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(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 as of June 30, 2024 is approximately 13 years.

The average maturity of our long-term debt as of September 30, 2024 is approximately 12 years.

Employee Benefit Plans

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Contributions to our plans were as follows:

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

(dollars in millions) 2024 2023 2024 2023

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Defined contribution plans (1)

308 296 1,042 985

(1) Our domestic defined contribution plan uses an Employee Stock Ownership Plan (ESOP) for certain employer matching contributions, which historically held stock that was purchased using external borrowings.

During the third quarter of 2024, the remaining unallocated common shares of the ESOP trust were depleted, and we began funding the ESOP on a non-leveraged basis utilizing treasury shares.

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

(dollars in millions) June 30, 2024 December 31, 2023

(dollars in millions) September 30, 2024 December 31, 2023

Noncurrent pension assets (included in Other assets) $ 2,217 $ 1,296

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

(dollars in millions) June 30, 2024 December 31, 2023

(dollars in millions) September 30, 2024 December 31, 2023

Noncurrent pension liabilities $ 1,613 $ 1,737

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Pension Benefits

Quarter Ended June 30,

Quarter Ended September 30,

(dollars in millions) 2024 2023 2024 2023

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Pension Benefits

Six Months Ended June 30,

Nine Months Ended September 30,

(dollars in millions) 2024 2023 2024 2023

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

(dollars in millions) June 30, 2024 December 31, 2023

(dollars in millions) September 30, 2024 December 31, 2023

Marketable securities held in trusts $ 746 $ 745

Our effective tax rates for the quarter and six months ended June 30, 2024 were 59.1 % and 15.8 %, respectively, as compared to 15.4 % and 17.0 % for the quarter and six months ended June 30, 2023, respectively.

The increase in the effective tax rate for the quarter ended June 30, 2024 as compared to the quarter ended June 30, 2023 is primarily driven by a $ 918 million charge associated with the Expected Resolution of Certain Legal Matters accrued during the quarter ended June 30, 2024 where no tax benefit has been recorded.

Additionally, the annualized effective tax rate currently forecasted for 2024 is higher than the comparable period in 2023, principally driven by lower U.S.

federal research and development tax credits and higher non-U.S.

income taxes.

The higher forecasted non-U.S.

income taxes are principally driven by legislation enacted during the quarter ended June 30, 2024 by the Organisation for Economic Co-operation and Development’s (OECD) Pillar Two initiatives.

The effective tax rate for the six months ended June 30, 2024 includes a $ 275 million tax benefit recognized in the quarter ended March 31, 2024 resulting from the conclusion of the examination phases of the RTX and Rockwell Collins audits and $ 143 million of tax costs associated with the sale of the CIS business.

The resulting net tax benefit from these items, coupled with lower year to date pre-tax income, more than offset the effective tax rate impact of a $ 918 million charge associated with the Expected Resolution of Certain Legal Matters accrued during the quarter ended June 30, 2024 where no tax benefit has been recorded.

Our effective tax rates for the quarter and nine months ended September 30, 2024 were 19.5 % and 17.5 %, respectively, as compared to 29.4 % and 9.2 % for the quarter and nine months ended September 30, 2023, respectively.

The change in the effective tax rate for the quarter ended September 30, 2024, as compared to the quarter ended September 30, 2023, is driven in part by the $ 2.9 billion Powder Metal Matter charge and the associated deferred tax benefit of $ 663 million recorded in the quarter ended September 30, 2023.

Additionally, in the quarter ended September 30, 2024, the Company recorded a $ 138 million deferred tax benefit associated with legal entity reorganizations and a $ 56 million tax benefit in response to favorable U.S.

Tax Court rulings issued to unrelated taxpayers, but with facts similar to ours.

The nature of the tax item in the rulings is subject to a tax matters agreement entered into with Carrier and Otis in connection with the separation of those businesses in 2020, and therefore we recorded a pre-tax charge of $ 32 million for their respective indemnified amounts.

The quarter ended September 30, 2024 also includes a $ 212 million tax charge related to U.S.

federal income taxes now owed by the Company resulting from a favorable non-U.S.

tax ruling Otis received in the quarter impacting pre-separation tax years.

This tax ruling results in a reduction of U.S.

foreign tax credits previously claimed by the Company in pre-separation tax years for which Otis must indemnify us.

The Company recorded a pre-tax benefit of $ 212 million representing a portion of the indemnity owed by Otis pursuant to the tax matters agreement and will record the remaining amount owed upon receipt.

Additionally, the Company is indemnified for associated interest of $ 31 million as of September 30, 2024.

In addition to items described above, the effective tax rate for the nine months ended September 30, 2024 also includes a $ 275 million tax benefit recognized in the first quarter of 2024 resulting from the conclusion of the examination phases of the U.S.

federal income tax audits for RTX 2017 and 2018 tax years and Rockwell Collins 2016, 2017, and 2018 tax years, a $ 143 million tax cost associated with the sale of the CIS business, and the effective tax rate impact of the $ 918 million charge associated with the Resolution of Certain Legal Matters accrued during the second quarter of 2024 where no tax benefit has been recorded.

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

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income tax examinations for years before 2014.

The Company filed protests with respect to certain IRS proposed adjustments for RTX (formerly United Technologies Corporation) tax years 2017 and 2018, pre-acquisition Rockwell Collins tax years 2016, 2017 and 2018, and pre-merger Raytheon Company tax years 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 Company filed protests with respect to certain Internal Revenue Service (IRS) proposed adjustments for RTX (formerly United Technologies Corporation) tax years 2017 and 2018, pre-acquisition Rockwell Collins tax years 2016, 2017, and 2018, and pre-merger Raytheon Company tax years 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 Company will dispute these adjustments at the Appeals Division of the IRS.

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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 over the next 12 months the amount

of unrecognized tax benefits may change within a range of a net reduction of $ 50 million to a net increase of $ 75 million as a result of the revaluation of uncertain tax positions arising from developments in examinations, in appeals, or in the courts, or the closure of tax statutes.

It is reasonably possible that over the next 12 months the amount of unrecognized tax benefits may change within a range of a net reduction of $ 100 million to a net increase of $ 75 million as a result of the revaluation of uncertain tax positions arising from developments in examinations, in appeals, or in the courts, or the closure of tax statutes.

Financial Instruments

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

The present value of the aggregate notional principal of our outstanding foreign currency hedges was $ 15.7 billion and $ 15.8 billion at June 30, 2024 and December 31, 2023, respectively.

At June 30, 2024, all derivative contracts accounted for as cash flow hedges will m ature by March 2036.

The present value of the aggregate notional principal of our outstanding foreign currency hedges was $ 17.0 billion and $ 15.8 billion at September 30, 2024 and December 31, 2023, respectively.

At September 30, 2024, all derivative contracts accounted for as cash flow hedges will m ature by May 2036.

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

(dollars in millions) Balance Sheet Location June 30, 2024 December 31, 2023

(dollars in millions) Balance Sheet Location September 30, 2024 December 31, 2023

Derivatives designated as hedging instruments:

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Other accrued liabilities 9 37

The effect of cash flow hedging relationships on Accumulated other comprehensive loss and on the Condensed Consolidated Statement of Operations in the quarters and six months ended June 30, 2024 and 2023 are presented in “Note 17:

The effect of cash flow hedging relationships on Accumulated other comprehensive loss and on the Condensed Consolidated Statement of Operations in the quarters and nine months ended September 30, 2024 and 2023 are presented in “Note 17:

Equity.” 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.

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

As of June 30, 2024, our € 500 million principal value of euro-denominated long-term debt qualifies as a net investment hedge against our investments in European businesses, which is deemed to be effective.

As of September 30, 2024, our € 500 million principal value of euro-denominated long-term debt 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 (expense), net, on the Condensed Consolidated Statement of Operations and is not significant.

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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:

June 30, 2024

September 30, 2024

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

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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 June 30, 2024, there has not been any significant impact to the fair value of our derivative liabilities due to our own credit risk.

As of September 30, 2024, 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:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(dollars in millions) Carrying

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

June 30, 2024

September 30, 2024

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

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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) June 30, 2024 December 31, 2023

(dollars in millions) September 30, 2024 December 31, 2023

Current assets $ 10,575 $ 9,309

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

As of June 30, 2024 and December 31, 2023, the following financial guarantees were outstanding:

June 30, 2024 December 31, 2023

As of September 30, 2024 and December 31, 2023, the following financial guarantees were outstanding:

September 30, 2024 December 31, 2023

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

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The estimated fair market 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 were $ 134 million and $ 135 million at June 30, 2024 and December 31, 2023, respectively.

Collaboration partners’ share of these financing guarantees were $ 133 million and $ 135 million at September 30, 2024 and December 31, 2023, 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 were $ 98 million and $ 97 million at June 30, 2024 and December 31, 2023, respectively.

The carrying amount of liabilities related to these obligations were $ 99 million and $ 97 million at September 30, 2024 and December 31, 2023, respectively.

These primarily relate to environmental liabilities, which are included in our total environmental liabilities as further discussed in “Note 16:

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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 six months ended June 30, 2024 and 2023 were as follows:

The changes in the carrying amount of service and product warranties and product performance guarantees for the nine months ended September 30, 2024 and 2023 were as follows:

(dollars in millions) 2024 2023

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Other ( 28 ) ( 21 )

Balance as of June 30 $ 1,068 $ 1,079

Balance as of September 30 $ 1,042 $ 1,111

Product and service guarantees incurred in connection with long term production contracts and certain aftermarket arrangements are generally accounted for within the contract estimates at completion.

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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 June 30, 2024 and December 31, 2023, we had $ 769 million and $ 760 million, respectively, reserved for environmental remediation.

As of both September 30, 2024 and December 31, 2023, we had $ 0.8 billion reserved for environmental remediation.

Commercial Aerospace Financing and Other Commitments.

We had commercial aerospace financing commitments and other contractual commitments of approximately $ 14.4 billion and $ 14.6 billion as of June 30, 2024 and December 31, 2023, respectively, on a gross basis before reduction for our collaboration partners’ share.

We had commercial aerospace financing commitments and other contractual commitments of approximately $ 14.1 billion and $ 14.6 billion as of September 30, 2024 and December 31, 2023, 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 $ 3.1 billion as of June 30, 2024.

The stated values of these letters of credit agreements and surety bonds totaled $ 3.1 billion as of September 30, 2024.

Offset / Industrial Participation 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 June 30, 2024, the aggregate amount of these agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $ 12.6 billion.

At September 30, 2024, the aggregate amount of these agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $ 12.5 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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Pratt & Whitney Powder Metal Matter.

Pratt & Whitney has determined that a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100 GTF fleet, which powers the A320neo.

In 2023, Pratt & Whitney determined that a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100 GTF fleet, which powers the A320neo.

This determination was made pursuant to Pratt & Whitney’s safety management system.

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Guidance to affected operators was released via service bulletins (SB) and SI in November 2023, and this guidance has been reflected in airworthiness directives issued by the Federal Aviation Administration (FAA).

Consistent with previous information, the actions are expected to result in significant incremental shop visits through the end of 2026.

As a result, Pratt & Whitney expects a significant increase in aircraft on ground levels for the

PW1100 powered A320neo fleet through 2026.

Consistent with previous information, the actions are currently resulting in, and are expected to continue to result in, significant incremental shop visits through the end of 2026.

As a result, Pratt & Whitney expects aircraft on ground

levels for the PW1100 powered A320neo fleet to remain elevated through 2026.

As a result of anticipated increased aircraft on ground levels and expected compensation to customers for this disruption, as well as incremental maintenance costs resulting from increased inspections and shop visits, Pratt & Whitney recorded a pre-tax operating profit charge in the third quarter of 2023 of $ 2.9 billion, reflecting Pratt & Whitney’s net 51 % program share of the PW1100 program.

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The charge recorded in the third quarter of 2023 resulted in a net increase in Other accrued liabilities of $ 2.8 billion, which principally related to our 51 % share of an accrual for expected customer compensation.

At June 30, 2024 and December 31, 2023, we had Other accrued liabilities of $ 2.6 billion and $ 2.8 billion, respectively, primarily related to expected compensation to customers.

The reduction in the accrual during the six months ended June 30, 2024 was due to customer compensation.

At September 30, 2024 and December 31, 2023, we had Other accrued liabilities of $ 2.2 billion and $ 2.8 billion, respectively, primarily related to expected compensation to customers.

The decrease in the accrual during the nine months ended September 30, 2024 was due to customer compensation.

Other engine models within Pratt & Whitney’s fleet contain parts manufactured with affected powder metal, but we do not currently believe there will be any resultant significant financial impact with respect to these other engine models at this time.

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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 $ 1.7 billion plus interest ($ 1.1 billion at June 30, 2024).

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 ($ 169 million at June 30, 2024).

On September 30, 2024, a DCMA DACO issued a second claim against Pratt & Whitney that similarly alleges that Pratt & Whitney was noncompliant with CAS due to its method of allocating independent research and development costs to government contracts from April 1, 2019 to December 31, 2023.

The second claim demands payment of $ 1.1 billion plus interest ($ 276 million at September 30, 2024 ).

Pratt & Whitney believes the second claim is without merit and will file an appeal to the ASBCA.

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 ($ 176 million at September 30, 2024).

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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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 November 22, 2021 decision, demands payment of $ 269 million plus interest ($ 139 million at June 30, 2024).

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

In December 2023, a DCMA DACO issued a third 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 2018 through 2022.

This third claim, which asserts the same measure of the cost of collaborator parts rejected by the ASBCA’s prior decision, demands payment of $ 277 million plus interest ($ 66 million at June 30, 2024).

This third claim, which asserts the same measure of the cost of collaborator parts rejected by the ASBCA’s prior decision, demands payment of $ 277 million plus interest ($ 73 million at September 30,

Pratt & Whitney appealed this third claim to the ASBCA at the end of December 2023.

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In the third quarter of 2020, Raytheon Company received an additional subpoena from the SEC, seeking information and documents as part of its investigation.

Based on the government’s and our own internal investigations, the Company engaged in resolution discussions with the SEC and DOJ, and during the quarter ended June 30, 2024, the Company reached agreements in principle with the DOJ and SEC as to the principal elements of such resolutions.

Resolution with the SEC and DOJ remains subject to reaching final agreements satisfactory to all parties and the final approval of the SEC, the DOJ and the Company.

Pursuant to the agreements in principle reached, the Company expects that it will enter into a deferred prosecution agreement (DPA) with the DOJ under which the DOJ will defer, for a period of three years, criminal prosecution of Raytheon Company related to Raytheon Company’s conspiracy to violate the anti-bribery provisions of the FCPA and conspiracy to violate the AECA by failing to make related disclosures of certain payments that may qualify as fees, commissions and/or political contributions under Part 130 of the ITAR.

If the Company, including Raytheon Company, fully complies with all of the obligations to be set forth in a final DPA during such DPA’s three-year term, the DOJ will move for dismissal with prejudice of the deferred charges against Raytheon Company.

In addition, the Company expects that the SEC will issue an administrative cease and desist order finding that the Company violated the anti-bribery, books and records, and internal controls provisions of the FCPA.

The Company also expects, based on the agreements in principle described above, that it will be required to retain an independent compliance monitor for Raytheon Company satisfactory to the DOJ and the SEC and undertake compliance self-reporting obligations for a three-year term.

The compliance monitor will oversee our compliance with the DPA.

The Company further expects that, as part of the resolution, it will pay the DOJ an amount that includes a criminal monetary penalty and forfeiture and the SEC an amount that includes disgorgement, prejudgment interest on disgorgement, and a civil penalty.

The Company has recorded an aggregate accrual of $ 384 million for these matters during the quarter ended June 30, 2024.

In the event that final agreements with the DOJ and the SEC are not reached, litigation may ensue and, accordingly, the actual loss incurred in connection with these matters, if any, could be less than, equal to or more than the aggregate accrued amount noted above.

Based upon the status of discussions, we believe that the finalization of our agreements with the DOJ and the SEC will occur during the second half of 2024 and therefore, expect payments to be made within the same timeframe.

However, there can be no assurance that final agreements of such resolutions will be reached or as to the timing or ultimate terms, including those described herein, of such final resolutions, if any.

The Company does not believe that these matters, including the accrual (and the future payment of the accrual), will have a material adverse effect on our results of operations, financial condition, or liquidity.

Following the government’s and the Company’s own internal investigations, the Company engaged in resolution discussions with the DOJ and the SEC, and during the quarter ended June 30, 2024, the Company reached agreements in principle with the DOJ and the SEC as to the principal elements of such resolutions, as previously disclosed on July 25, 2024.

On October 15, 2024, Raytheon Company entered into a deferred prosecution agreement (DPA) (DPA-1) with the DOJ and on October 16, 2024, the Company settled an administrative proceeding with the SEC to resolve these matters.

Pursuant to DPA-1, the DOJ will defer, for a period of three years, criminal prosecution of Raytheon Company related to Raytheon Company’s conspiracy to violate the anti-bribery provisions of the FCPA and conspiracy to violate the AECA by failing to make related disclosures of certain payments that qualified as fees, commissions and/or political contributions under Part 130 of the ITAR.

If Raytheon Company and the Company fully comply with all of their respective obligations under DPA-1 during its three-year term, the DOJ will move for dismissal with prejudice of the deferred charges against Raytheon Company.

DPA-1 provides for a criminal monetary penalty and forfeiture of $ 282 million.

In addition, the SEC’s administrative order issued in connection with the administrative proceeding settlement alleged that Raytheon Company violated the anti-bribery, books and records, and internal controls provisions of the FCPA.

The order provides for a $ 102 million payment to the SEC that includes disgorgement, prejudgment interest on disgorgement, and a civil penalty.

Under DPA-1, the SEC’s administrative order, and DPA-2 discussed in “DOJ Investigation and Contract Pricing Disputes” below, Raytheon Company and the Company are required to retain an independent compliance monitor(s) satisfactory to the DOJ and the SEC and are required to undertake certain cooperation and disclosure obligations for a three-year term.

The compliance monitor(s) will oversee Raytheon Company’s and the Company’s compliance with their respective obligations under DPA-1, the SEC’s administrative order, and DPA-2 discussed in “DOJ Investigation and Contract Pricing Disputes” below.

The Company has accrued $ 384 million in the aggregate for DPA-1 and the SEC’s administrative order as of September 30, 2024, which will be paid during the fourth quarter of 2024.

The Company does not believe that these matters will have a material adverse effect on our results of operations, financial condition, or liquidity.

DOJ Investigation and Contract Pricing Disputes

As previously disclosed, on October 8, 2020, the Company received a criminal subpoena from the DOJ seeking information and documents in connection with an investigation relating to financial accounting, internal controls over financial reporting, and cost reporting regarding Raytheon Company since 2009.

The investigation involves multi-year contracts subject to governmental regulation, including potential defective pricing claims for certain Raytheon Company contracts entered into between 2011 and 2013.

The investigation involved multi-year contracts subject to governmental regulation, including defective pricing claims for certain Raytheon Company contracts entered into between 2011 and 2013.

As part of the same investigation, on March 24, 2021, the Company received a second criminal subpoena from the DOJ seeking documents relating to a certain contract entered into in 2017 by Raytheon Company.

Based on the government’s and our own internal investigations, the Company engaged in resolution discussions with the DOJ, and during the quarter ended June 30, 2024, the Company reached an agreement in principle with the DOJ as to the principal elements of such resolution.

Resolution with the DOJ remains subject to reaching a final agreement satisfactory to all parties and the final approval of the DOJ and the Company.

Pursuant to this agreement in principle, the Company expects that it will enter into a DPA with the DOJ under which the DOJ will defer, for a period of three years, criminal prosecution of Raytheon Company related to two counts of major fraud against the United States by Raytheon Company involving two legacy contracts.

In addition, the Company expects, based on the agreement in principle described above, that it will be required to retain an independent compliance monitor for Raytheon Company satisfactory to the DOJ and undertake self-reporting obligations for a three-year term.

The compliance monitor will oversee our compliance with the DPA.

In addition, the Company has been cooperating with the DOJ with respect to a related civil defective pricing investigation under the FCA.

The Company also has reached an agreement in principle with the DOJ as to the principal elements necessary to resolve the related defective pricing investigation under the FCA.

Resolution also remains subject to reaching a final agreement satisfactory to all parties and the final approval of the DOJ and the Company.

The Company further expects that, as part of the resolution, it will pay the DOJ an amount that includes a criminal monetary penalty, an FCA settlement that includes restitution, and interest on the FCA settlement.

The Company has updated its accrual for these matters to an aggregate accrual of $ 575 million as of June 30, 2024 .

In the event that final agreement with the DOJ is not reached, litigation may ensue and, accordingly, the actual loss incurred in connection with these matters, if any, could be less than, equal to or more than the aggregate accrued amount noted above.

Based upon the current status of discussions, we believe that the finalization of our agreement with the DOJ will occur during the second half of 2024 and therefore, expect payments to be made within the same timeframe .

However, there can be no assurance that final agreements of such resolutions will be reached or as to the timing or ultimate terms, including those described herein, of such final resolutions if any.

The Company does not believe that these matters, including the increased accrual (and the future payment of the accrual), will have a material adverse effect on our results of operations, financial condition, or liquidity.

As previously disclosed on July 25, 2024, following the government’s and the Company’s own internal investigations, the Company engaged in resolution discussions with the DOJ, and during the quarter ended June 30, 2024, the Company reached an agreement in principle with the DOJ as to the principal elements of such resolution.

In addition, the Company cooperated with the DOJ with respect to a related civil defective pricing investigation under the False Claims Act (FCA).

On October 16, 2024, Raytheon Company entered into a DPA (DPA-2) and an FCA settlement agreement (FCA Settlement Agreement) with the DOJ to resolve these matters.

Pursuant to DPA-2, the DOJ will defer, for a period of three years, criminal prosecution of Raytheon Company related to two counts of major fraud against the United States by Raytheon Company involving two legacy contracts.

If Raytheon Company and the Company fully comply with all of their respective obligations in DPA-2 during its three-year term, the DOJ will move for dismissal with prejudice of the deferred charges against Raytheon Company.

DPA-2 provides for a criminal penalty in the amount of $ 147 million, plus restitution, and the FCA Settlement Agreement provides for an FCA settlement payment in the amount of $ 428 million plus interest ($ 4 million at September 30, 2024), which includes restitution that will satisfy the criminal restitution obligation when paid.

Under DPA-2 as well as DPA-1 and the SEC administrative order discussed in “Thales-Raytheon Systems and Related Matters” above, Raytheon Company and the Company are required to retain an independent compliance monitor(s) satisfactory to the DOJ and the SEC and are required to undertake certain cooperation and disclosure

obligations for a three-year term.

The compliance monitor(s) will oversee Raytheon Company’s and the Company’s compliance with their respective obligations under DPA-2 as well as DPA-1 and the SEC administrative order discussed in “Thales-Raytheon Systems and Related Matters” above.

The Company has accrued $ 579 million in the aggregate for DPA-2 and the FCA Settlement Agreement as of September 30, 2024, which will be paid during the fourth quarter of 2024.

The Company does not believe that these matters, will have a material adverse effect on our results of operations, financial condition, or liquidity.

Trade Compliance Matters

From time to time, we identify, investigate, remediate, and voluntarily disclose violations or potential violations of the ITAR and EAR to the relevant regulators.

In May 2024, the Department of State’s Office of Defense Trade Controls Compliance (DTCC) informed the Company of its intent to seek administrative penalties for alleged violations of the AECA and the ITAR.

The DTCC informed us that it considers certain of our voluntary disclosur es, primarily identified in connection with the integration of Rockwell Collins and, to a lesser extent, Raytheon Company, filed since 2019 to reflect deficiencies warranting a civil penalty.

We are currently in discussions with the DTCC to reach a consent agreement, which we anticipate will provide for a payment by the Company, an independent compliance monitor, and commitments regarding additional remedial compliance efforts.

At this time, the Company has determined that there is a probable risk of liability for potential penalties related to the anticipated consent agreement with the DTCC, as well as other export compliance matters which have been voluntarily disclosed to the cognizant regulators.

We have accrued approximately $ 285 million for these matters in aggregate.

Based on the current status of discussions, we believe that finalization of the consent agreement with the DTCC will occur during the second half of 2024, and we expect related payments to be made over the next three years.

We are currently unable to estimate the timing or outcome of the other voluntarily disclosed export compliance matters that are not subject to the consent agreement.

However, the Company does not believe the ultimate outcome of these matters will have a material adverse effect on our results of operations, financial condition, or liquidity.

In May 2024, the U.S.

Department of State’s (DOS) Office of Defense Trade Controls Compliance (DTCC) informed the Company of its intent to seek administrative penalties for alleged violations of the AECA and the ITAR.

The DTCC informed us that it considers certain of our voluntary disclosures, primarily identified in connection with the integration of Rockwell Collins and, to a lesser extent, Raytheon Company, filed since 2019 to reflect deficiencies warranting a civil penalty.

On August 29, 2024, the Company entered into a Consent Agreement (CA) with the DOS to resolve these matters.

The CA settles certain AECA and ITAR compliance matters with the DTCC and the Directorate of Defense Trade Controls.

The CA has a three-year term and provides for:

(i) a civil penalty of $ 200 million, $ 100 million of which is suspended on the condition that such amount is applied to DTCC-approved remedial compliance measures;

(ii) the appointment of an external Special Compliance Officer to oversee compliance with the CA, the AECA, and the ITAR;

(iii) an external audit of the Company’s AECA and ITAR compliance program;

and (iv) implementation of additional remedial compliance measures related to AECA and ITAR compliance.

The $ 100 million portion of the settlement that is not subject to suspension, which was accrued by the Company in the second quarter ended June 30, 2024, will be paid in installments, with $ 34 million paid in September 2024, $ 33 million paid by August 29, 2025, and $ 33 million paid by August 29, 2026.

As previously disclosed, the Company has determined that there is a probable risk of liability for potential penalties related to other export compliance matters which have been voluntarily disclosed to the cognizant regulators, but which are not subject to the CA.

We have accrued $ 251 million in the aggregate as of September 30, 2024 for these matters and the matters being resolved pursuant to the CA.

We are currently unable to estimate the timing or outcome of the other voluntarily disclosed export compliance matters that are not subject to the CA.

However, the Company does not believe these matters will have a material adverse effect on our results of operations, financial condition, or liquidity.

UTC Equity Conversion Litigation

As previously disclosed, on December 6, 2022, a shareholder derivative lawsuit was filed in the Delaware Court of Chancery against the Company and certain current and former members of its Board of Directors, alleging that defendants breached their fiduciary duties in May 2020 by amending the method by which United Technologies Corporation (UTC) equity awards were converted to certain Company equity awards following the separation of UTC into three independent, publicly traded companies.

We believe that the lawsuit lacks merit.

Based on the information available to date, we do not believe that this matter will have a material adverse effect on our results of operations, financial condition, or liquidity.

On July 23, 2024, in response to a motion to dismiss filed by the Company, the Court dismissed the shareholder derivative lawsuit in its entirety with prejudice.

On August 22, 2024, Plaintiff filed an appeal to the Delaware Supreme Court.

We continue to believe that the lawsuit lacks merit.

We also continue to believe that this matter will not have a material adverse effect on our results of operations, financial condition, or liquidity.

Civil Litigation Related to Employee Hiring Practices

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Plaintiffs seek to represent different purported classes of engineers and skilled laborers employed by Pratt & Whitney and other supplier-defendants since 2011, and are seeking to recover treble damages in an undetermined amount, plus attorneys’ fees and costs of suit.

We believe that the claims asserted lack merit.

Based on the information available to date, we do not believe that this matter will have a material adverse effect on our results of operations, financial condition, or liquidity.

On August 30, 2024, Pratt & Whitney filed a notice with the court that the parties have reached agreement in principle to settle Plaintiffs’ claims on a class-wide basis for an immaterial amount.

In April 2024, a shareholder derivative lawsuit was filed in the Delaware Court of Chancery against the Company and certain current and former officers and directors of the Company alleging that defendants breached their fiduciary duties by failing to implement and enforce a reasonable oversight mechanism for compliance with antitrust laws.

We believe that the lawsuit lacks merit.

Based on the information available to date, we do not believe that this matter will have a material adverse effect on our results of operations, financial condition, or liquidity.

Based on the information available to date, we do not believe that this this matter will have a material adverse effect on our results of operations, financial condition, or liquidity.

Powder Metal Disclosure Litigation and SEC Investigation

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First, two putative federal securities class action lawsuits were filed in the United States District Court for the District of Connecticut against the Company and certain current and former executives of the Company.

The lawsuits allege that defendants violated federal securities laws by making material misstatements and omitting material facts relating to Pratt & Whitney’s GTF engine fleet, including the impact of the powder metal issue on the fleet, in various regulatory filings.

The lawsuits allege that defendants violated federal securities laws by making material misstatements and

omitting material facts relating to Pratt & Whitney’s GTF engine fleet, including the impact of the powder metal issue on the fleet, in various regulatory filings.

The lawsuits were consolidated and remain pending.

Second, multiple shareholder derivative lawsuits were filed against current and former officers and directors of the Company, all of which have now been consolidated into a single action which is pending in the United States District Court for the District of Delaware.

The operative complaint in

the consolidated action alleges that the defendants caused the Company to make materially false and misleading statements relating to Pratt & Whitney’s GTF engines, and failed to maintain an adequate system of oversight, disclosure controls and procedures, and internal controls over financial reporting.

The operative complaint in the consolidated action alleges that the defendants caused the Company to make materially false and misleading statements relating to Pratt & Whitney’s GTF engines, and failed to maintain an adequate system of oversight, disclosure controls and procedures, and internal controls over financial reporting.

Based on the information available to date, we do not believe that either matter will have a material adverse effect on our results of operations, financial condition, or liquidity.

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On October 24, 2023, we entered into accelerated share repurchase (ASR) agreements with certain financial institution counterparties to repurchase shares of our common stock for an aggregate purchase price of $ 10 billion.

The ASR agreements provided for the repurchase of our common stock based on the average of the daily volume-weighted average prices of our common stock during the term of such ASR agreement, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreement.

Pursuant to the ASR agreements, we made aggregate payments of $ 10 billion on October 26, 2023, and received initial deliveries of approximately 108.4 million shares of our common stock at a price of $ 78.38 per share, which, on that date, represented approximately 85% of the shares expected to be repurchased.

The total number of shares to be repurchased is subject to final settlement as discussed below.

The aggregate purchase price was recorded as a reduction to Shareowners’ equity, consisting of an $ 8.5 billion increase in Treasury stock and a $ 1.5 billion decrease in Common stock.

The final number of shares to be repurchased will be based on the average of the daily volume-weighted average prices of our common stock during the term of the ASR agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreements.

Upon final settlement of the ASR, under certain circumstances, each of the counterparties may be required to deliver additional shares of common stock, or we may be required to deliver shares of common stock or to make a cash payment to the counterparties, at our election.

The final settlement of each transaction under the ASR agreements is scheduled to occur no later than the third quarter of 2024 and in each case may be accelerated at the option of the applicable counterparty.

The shares associated with the remaining portion of the aggregate purchase price have been settled over two tranches.

In July 2024, the first tranche was settled upon final delivery to us of approximately 0.4 million shares of common stock.

In September 2024, with respect to the second tranche, we owed approximately 2.2 million shares of common stock that we elected to cash settle for $ 261 million.

The cash payment required as a result of the second tranche settlement was due to the significant increase in the price of our common stock during the ASR term.

The final average price under the ASR was $ 94.28 per share.

Accumulated Other Comprehensive Loss.

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, 2024 and 2023 is provided below:

A summary of the changes in each component of Accumulated other comprehensive loss, net of tax for the quarters and nine months ended September 30, 2024 and 2023 is provided below:

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

Quarter Ended June 30, 2024

Balance at March 31, 2024 $ ( 562 ) $ ( 2,065 ) $ ( 8 ) $ ( 2,635 )

Quarter Ended September 30, 2024

Balance at June 30, 2024 $ ( 632 ) $ ( 2,102 ) $ 16 $ ( 2,718 )

Other comprehensive income (loss) before reclassifications, net 749 ( 72 ) 125 802

1 unchanged sentence

Tax benefit (expense) 6 11 ( 40 ) ( 23 )

Balance at June 30, 2024 $ ( 632 ) $ ( 2,102 ) $ 16 $ ( 2,718 )

Six Months Ended June 30, 2024

Balance at September 30, 2024 $ 123 $ ( 2,207 ) $ 115 $ ( 1,969 )

Nine Months Ended September 30, 2024

Balance at December 31, 2023 $ ( 440 ) $ ( 2,026 ) $ 47 $ ( 2,419 )

2 unchanged sentences

Tax benefit (expense) 3 32 ( 19 ) 16

Balance at June 30, 2024 $ ( 632 ) $ ( 2,102 ) $ 16 $ ( 2,718 )

Balance at September 30, 2024 $ 123 $ ( 2,207 ) $ 115 $ ( 1,969 )

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

Quarter Ended June 30, 2023

Balance at March 31, 2023 $ ( 882 ) $ ( 890 ) $ ( 217 ) $ ( 1,989 )

Quarter Ended September 30, 2023

Balance at June 30, 2023 $ ( 476 ) $ ( 1,035 ) $ 9 $ ( 1,502 )

Other comprehensive income (loss) before reclassifications, net ( 441 ) 37 ( 132 ) ( 536 )

1 unchanged sentence

Tax benefit (expense) ( 3 ) 33 24 54

Balance at June 30, 2023 $ ( 476 ) $ ( 1,035 ) $ 9 $ ( 1,502 )

Six Months Ended June 30, 2023

Balance at September 30, 2023 $ ( 920 ) $ ( 1,106 ) $ ( 90 ) $ ( 2,116 )

Nine Months Ended September 30, 2023

Balance at December 31, 2022 $ ( 1,005 ) $ ( 782 ) $ ( 231 ) $ ( 2,018 )

2 unchanged sentences

Tax benefit (expense) — 109 ( 33 ) 76

Balance at June 30, 2023 $ ( 476 ) $ ( 1,035 ) $ 9 $ ( 1,502 )

Balance at September 30, 2023 $ ( 920 ) $ ( 1,106 ) $ ( 90 ) $ ( 2,116 )

Segment Financial Data

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These adjustments are not considered part of management’s evaluation of segment results .

Total sales and operating profit by segment include inter-segment sales which are generally recorded at cost-plus a specified fee or at a negotiated fixed price.

Total sales and operating profit (loss) by segment include inter-segment sales which are generally recorded at cost-plus a specified fee or at a negotiated fixed price.

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 June 30, 2024 and 2023 are as follows:

Net Sales Operating Profit Operating Profit Margins

Results for the quarters ended September 30, 2024 and 2023 are as follows:

Net Sales Operating Profit (Loss) Operating Profit (Loss) Margins

(dollars in millions) 2024 2023 2024 2023 2024 2023

2 unchanged sentences

7,239 926 557 ( 2,482 ) 7.7 % ( 268.0 ) %

Raytheon 6,386 6,472 647 560 10.1 % 8.7 %

Total segment 20,700 14,027 2,266 ( 1,019 ) 10.9 % ( 7.3 ) %

2 unchanged sentences

Corporate expenses and other unallocated items — — 100 ( 63 )

— — ( 930 ) ( 59 )

FAS/CAS operating adjustment — — 210 272

2 unchanged sentences

(1) Includes the operating results of certain smaller operations.

(2) Operating Profit and Margins include a $ 0.6 billion charge in the second quarter of 2024 related to the anticipated Raytheon Contract Termination.

Changes in Contract Estimates at Completion” for additional information.

(3) Includes a $ 0.9 billion charge in the second quarter of 2024 related to the Expected Resolution of Certain Legal Matters.

Basis of Presentation” for additional information.

Results for the six months ended June 30, 2024 and 2023 are as follows:

Net Sales Operating Profit Operating Profit Margins

(2) 2023 includes the impacts of the Powder Metal Matter.

Results for the nine months ended September 30, 2024 and 2023 are as follows:

Net Sales Operating Profit (Loss) Operating Profit (Loss) Margins

(dollars in millions) 2024 2023 2024 2023 2024 2023

2 unchanged sentences

20,497 11,857 1,511 ( 1,837 ) 7.4 % ( 15.5 ) %

19,556 19,464 1,770 1,775 9.1 % 9.1 %

Total segment 60,800 50,454 6,310 2,637 10.4 % 5.2 %

7 unchanged sentences

(1) Includes the operating results of certain smaller operations.

(2) 2023 includes the impacts of the Powder Metal Matter.

(3) Operating Profit and Margins include a $ 0.6 billion charge in the second quarter of 2024 related to the anticipated Raytheon Contract Termination and a $ 0.4 billion gain, net of transaction and other related costs, in the first quarter of 2024 related to the sale of our CIS business.

1 unchanged sentence

Acquisitions and Dispositions,” respectively, for additional information.

(3) Includes a $ 0.9 billion charge in the second quarter of 2024 related to the Expected Resolution of Certain Legal Matters.

(4) Includes a $ 0.9 billion charge in the second quarter of 2024 related to the Resolution of Certain Legal Matters.

Basis of Presentation” for additional information.

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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 based on customer location for the quarters ended June 30, 2024 and 2023 are as follows:

Segment sales disaggregated by geographic region based on customer location for the quarters ended September 30, 2024 and 2023 are as follows:

(dollars in millions) Collins Aerospace Pratt & Whitney Raytheon Other Total Collins Aerospace Pratt & Whitney Raytheon Other Total

4 unchanged sentences

Other regions 380 730 31 — 1,141 335 586 37 — 958

Powder Metal Matter — — — — — — ( 5,401 ) — — ( 5,401 )

Consolidated net sales 6,453 7,239 6,347 50 20,089 6,099 926 6,442 ( 3 ) 13,464

1 unchanged sentence

Business segment sales $ 7,075 $ 7,239 $ 6,386 $ ( 611 ) $ 20,089 $ 6,629 $ 926 $ 6,472 $ ( 563 ) $ 13,464

Segment sales disaggregated by geographic region for the six months ended June 30, 2024 and 2023 are as follows:

Segment sales disaggregated by geographic region for the nine months ended September 30, 2024 and 2023 are as follows:

(dollars in millions) Collins Aerospace Pratt & Whitney Raytheon Other Total Collins Aerospace Pratt & Whitney Raytheon Other Total

4 unchanged sentences

Other regions 1,131 1,789 111 — 3,031 1,050 1,482 131 — 2,663

Powder Metal Matter — — — — — — ( 5,401 ) — — ( 5,401 )

Consolidated net sales 19,038 20,496 19,448 133 59,115 17,682 11,856 19,370 85 48,993

1 unchanged sentence

Business segment sales $ 20,747 $ 20,497 $ 19,556 $ ( 1,685 ) $ 59,115 $ 19,133 $ 11,857 $ 19,464 $ ( 1,461 ) $ 48,993

Segment sales disaggregated by type of customer for the quarters ended June 30, 2024 and 2023 are as follows:

(dollars in millions) Collins Aerospace Pratt & Whitney Raytheon Other Total Collins Aerospace Pratt & Whitney Raytheon Other Total

Segment sales disaggregated by type of customer for the quarters ended September 30, 2024 and 2023 are as follows:

(dollars in millions) Collins Aerospace Pratt & Whitney Raytheon Other Total Collins Aerospace Pratt & Whitney (2)

Raytheon Other Total

Sales to the U.S.

9 unchanged sentences

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

Segment sales disaggregated by customer for the six months ended June 30, 2024 and 2023 are as follows:

(dollars in millions) Collins Aerospace Pratt & Whitney Raytheon Other Total Collins Aerospace Pratt & Whitney Raytheon Other Total

(2) Includes the reduction in sales from the Powder Metal Matter.

Segment sales disaggregated by customer for the nine months ended September 30, 2024 and 2023 are as follows:

(dollars in millions) Collins Aerospace Pratt & Whitney Raytheon Other Total Collins Aerospace Pratt & Whitney (2)

Raytheon Other Total

Sales to the U.S.

4 unchanged sentences

Foreign government direct commercial sales 945 514 2,136 2 3,597 793 347 1,970 3 3,113

Commercial aerospace and other commercial 8,602 9,174 171 3 17,950 7,729 7,491 197 1 15,418

Commercial aerospace and other commercial sales 12,894 14,189 237 3 27,323 11,993 6,577 294 3 18,867

Consolidated net sales 19,038 20,496 19,448 133 59,115 17,682 11,856 19,370 85 48,993

2 unchanged sentences

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

Segment sales disaggregated by sales type for the quarters ended June 30, 2024 and 2023 are as follows:

(dollars in millions) Collins Aerospace Pratt & Whitney Raytheon Other Total Collins Aerospace Pratt & Whitney Raytheon Other Total

(2) Includes the reduction in sales from the Powder Metal Matter.

Segment sales disaggregated by sales type for the quarters ended September 30, 2024 and 2023 are as follows:

(dollars in millions) Collins Aerospace Pratt & Whitney Raytheon Other Total Collins Aerospace Pratt & Whitney (1)

Raytheon Other Total

Products $ 5,024 $ 4,119 $ 5,524 $ 41 $ 14,708 $ 4,761 $ ( 1,486 ) $ 5,339 $ 1 $ 8,615

3 unchanged sentences

Business segment sales $ 7,075 $ 7,239 $ 6,386 $ ( 611 ) $ 20,089 $ 6,629 $ 926 $ 6,472 $ ( 563 ) $ 13,464

Segment sales disaggregated by sales type for the six months ended June 30, 2024 and 2023 are as follows:

(dollars in millions) Collins Aerospace Pratt & Whitney Raytheon Other Total Collins Aerospace Pratt & Whitney Raytheon Other Total

(1) Includes the reduction in sales from the Powder Metal Matter.

Segment sales disaggregated by sales type for the nine months ended September 30, 2024 and 2023 are as follows:

(dollars in millions) Collins Aerospace Pratt & Whitney Raytheon Other Total Collins Aerospace Pratt & Whitney (1)

Raytheon Other Total

Products $ 14,884 $ 11,925 $ 16,648 $ 116 $ 43,573 $ 13,813 $ 4,765 $ 16,149 $ 86 $ 34,813

3 unchanged sentences

Business segment sales $ 20,747 $ 20,497 $ 19,556 $ ( 1,685 ) $ 59,115 $ 19,133 $ 11,857 $ 19,464 $ ( 1,461 ) $ 48,993

Raytheon segment sales disaggregated by contract type for the quarters ended June 30, 2024 and 2023 are as follows:

(1) Includes the reduction in sales from the Powder Metal Matter.

Raytheon segment sales disaggregated by contract type for the quarters ended September 30, 2024 and 2023 are as follows:

(dollars in millions) 2024 2023

4 unchanged sentences

Business segment sales $ 6,386 $ 6,472

Raytheon segment sales disaggregated by contract type for the six months ended June 30, 2024 and 2023 are as follows:

Raytheon segment sales disaggregated by contract type for the nine months ended September 30, 2024 and 2023 are as follows:

(dollars in millions) 2024 2023

2 unchanged sentences

Consolidated net sales 19,448 19,370

Inter-segments sales 69 64

Inter-segment sales 108 94

Business segment sales $ 19,556 $ 19,464

1 unchanged sentence

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

Total RPO was $ 206 billion as of June 30, 2024.

Of the total RPO as of June 30, 2024, we expect approximately 25 % will be recognized as revenue over the next 12 months.

Total RPO was $ 221 billion as of September 30, 2024.

Of the total RPO as of September 30, 2024, we expect approximately 25 % will be recognized as revenue over the next 12 months.

Approximately 45 % 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 20 years.

19 unchanged sentences

We are currently evaluating the impact on our disclosures of adopting this new pronouncement.

Other new pronouncements issued but not effective until after June 30, 2024 are not expected to have a material impact on our results of operations, financial condition, or liquidity.

With respect to the unaudited condensed consolidated financial information of RTX for the quarters and six months ended June 30, 2024 and 2023, 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 25, 2024, 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 September 30, 2024 are not expected to have a material impact on our results of operations, financial condition, or liquidity.

With respect to the unaudited condensed consolidated financial information of RTX for the quarters and nine months ended September 30, 2024 and 2023, 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 October 22, 2024, 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.

4 unchanged sentences

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheet of RTX Corporation and its subsidiaries (the “Company”) as of June 30, 2024, 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, 2024 and 2023, and the condensed consolidated statement of cash flows for the six-month periods ended June 30, 2024 and 2023, including the related notes (collectively referred to as the “interim financial information”).

We have reviewed the accompanying condensed consolidated balance sheet of RTX Corporation and its subsidiaries (the “Company”) as of September 30, 2024, and the related condensed consolidated statements of operations, of comprehensive income (loss), and of changes in equity for the three-month and nine-month periods ended September 30, 2024 and 2023, and the condensed consolidated statement of cash flows for the nine-month periods ended September 30, 2024 and 2023, 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.

11 unchanged sentences

Boston, Massachusetts

July 25, 2024

October 22, 2024

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