What changed in this filing

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Item 1. Business

2025-02-03 compared with 2024-02-05 · 180 added, 122 removed, 197 unchanged (61% of the section changed)

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The terms “we,” “us,” “our,” the “Company”, and “RTX” mean RTX Corporation and its subsidiaries, unless the context indicates another meaning.

References to “Raytheon Company” mean Raytheon Company, which became a wholly owned subsidiary of RTX on April 3, 2020 through an all-stock merger transaction between United Technologies Corporation and Raytheon Company (the surviving company of which is RTX Corporation).

We serve commercial and government customers in both the original equipment and aftermarket parts and services segments of the aerospace industry.

Our defense business serves both domestic and international customers as a prime contractor or subcontractor on a broad portfolio of defense and related programs for military and government customers.

RTX Corporation, formerly known as Raytheon Technologies, was incorporated in Delaware in 1934.

RTX Corporation was incorporated in Delaware in 1934.

The following description of our business should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Item 7 of this Form 10-K, including the information contained therein under the heading “Business Overview.”

Business Segments

As previously announced, effective July 1, 2023, we streamlined the structure of our core businesses to three principal business segments:

Our operations are classified into three principal business segments:

Collins Aerospace (Collins), Pratt & Whitney, and Raytheon, with each segment comprised of groups of similar operations.

All segment information included in this Form 10-K is reflective of this new structure and prior period information has been recast to conform to our current period presentation.

Collins Aerospace is a leading global provider of technologically advanced aerospace and defense products and aftermarket service solutions for civil and military aircraft manufacturers, commercial airlines, and regional, business and general aviation, as well as for defense and commercial space operations.

Collins Aerospace is a leading global provider of technologically advanced aerospace and defense products.

Collins’ solutions include aftermarket services for civil and military aircraft manufacturers, commercial airlines, and regional, business, and general aviation, as well as for defense and commercial space operations.

Aftermarket services include spare parts, overhaul and repair, engineering and technical support, training and fleet management solutions, asset management services, and information management services.

Collins designs, manufactures, and supplies electric power generation, management and distribution systems, environmental control systems, flight control systems, air data and aircraft sensing systems, engine control systems, engine components, engine nacelle systems, including thrust reversers and mounting pylons, interior and exterior aircraft lighting, aircraft cargo systems, evacuation systems, landing systems (including landing gear, wheels, and braking systems), communication, navigation, surveillance systems, fire and ice detection and protection systems, actuation systems, integrated avionics, and propeller systems.

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Collins supports government and defense customer missions by providing systems solutions for connected battlespace, test and training range systems, crew escape systems, and simulation and training.

Collins sells aerospace and defense products and services to aircraft manufacturers, airlines and other aircraft operators, the U.S.

Collins sells aerospace and defense products and services to aircraft manufacturers, airlines, airports and other aircraft operators, the U.S.

and foreign governments, defense contractors, maintenance, repair, and overhaul providers, and independent distributors around the world.

Collins’ largest commercial customers are Boeing and Airbus with combined sales, prior to discounts and incentives, of 16%, 19%, and 18% of total Collins segment sales in 2024, 2023, and 2022, respectively.

In 2023, Boeing selected Collins for key positions on their X-66A sustainable flight demonstrator aircraft.

Collins also achieved long-term agreements with global airlines valued at $3.5 billion in the aggregate.

Collins continued to receive numerous commercial air transport contract awards for airline selected buyer-furnished equipment installation for interiors, avionics, and wheels and brakes, and long-term FlightSense airline maintenance agreements.

Collins was selected to serve as a key supplier of Command and Control (C2) capabilities as part of the Australian Air6500 effort.

In addition, Collins continued its significant product development activities, including for major systems on the Airbus A321XLR, the Boeing 777X and 737 MAX 10, the Dassault Falcon 6X, and systems in support of the Boeing T-7A trainer and the Boeing VC-25B.

Collins achievements also include an order milestone of 6,000 routers enabling digital transformation for global airlines.

Collins also received a contract for a multi-system mobile Air Traffic Navigation Integration and Coordination System (ATNAVICS).

Collins also continues to invest in sustainable technologies, such as opening an electric airborne power research center in Rockford, IL, where a prototype 1-megawatt motor was run at its design target limit in a ground test.

Collins’ aircraft power and thermal management team demonstrated a full scale prototype cooling system which can deliver 2.5 times the current cooling capacity to enable potential F-35 block upgrades.

In 2024, Collins was awarded expanded contract scope for the Federal Aviation Administration (FAA) air traffic control automation system to implement technical refresh updates aimed at improving the air traffic controller work environment and system security.

Collins was also awarded contracts to supply spare parts for the Army Tactical Navigation System and to design, develop, and deliver systems and products for a new aircraft under the United States Air Force Survivable Airborne Operations Center program.

Collins was also awarded $2 billion in the aggregate for new maintenance, repair and overhaul, and spares long-term contracts with several airlines.

In addition, Collins continued its significant product development activities, including for major systems on the Airbus A321XLR, the Boeing 777X and 737 MAX 10, and systems in support of the Boeing T-7A trainer and the Bell V 280 (FLRAA).

Collins continues to invest in sustainable technologies, such as electrical power architectures, advanced thermoplastic materials, digital trajectory optimizers, highly efficient cooling systems, and numerous other technologies that provide lower weight, drag, and carbon footprint solutions on aircraft.

Collins is also investing in higher efficiency build processes, that reduce chemical and power usage and increase the use of recycling.

Collins composite structural technology supports optimization of the design of aircraft components and equipment to minimize weight, maximize energy efficiency and reduce fuel burn.

Collins works closely with numerous other industry organizations and airframers to explore alternative energy solutions such as sustainable

aviation fuel, hydrogen, and hybrid electric power sources.

Collins also continues to invest in operational capacity in strategic locations, including in the United States, India, Mexico, Singapore, and Puerto Rico.

Pratt & Whitney is among the world’s leading suppliers of aircraft engines for commercial, military, business jet, and general aviation customers.

Pratt & Whitney’s Commercial Engines and Military Engines businesses design, develop, produce, and maintain families of large engines for wide- and narrow-body and large regional aircraft for commercial customers and for fighter, bomber, tanker, and transport aircraft for military customers.

Pratt & Whitney’s small engine business, Pratt & Whitney Canada, is among the world’s leading suppliers of engines powering regional airlines, general and business aviation, as well as helicopters.

Pratt & Whitney’s small engine business, Pratt & Whitney Canada, is among the world’s leading suppliers of engines powering regional airlines, general and business aviation, and helicopters.

Pratt & Whitney also produces, sells, and services military and commercial auxiliary power units.

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Pratt & Whitney’s largest commercial customer by sales is Airbus, with sales, prior to discounts and incentives, of 31%, 48%, and 33% of total Pratt & Whitney segment sales in 2024, 2023, and 2022, respectively.

Segment sales in 2023 includes the reduction in sales associated with the Powder Metal Matter discussed below.

Pratt & Whitney produces the PW1000G Geared Turbofan (GTF) engine family, the first of which, the PW1100G-JM which powers the Airbus A320neo family of aircraft, entered into service in January 2016.

The PW1000G GTF engine has demonstrated a significant reduction in fuel burn and noise levels and lower environmental emissions compared to prior-generation engines.

GTF engine models also power the Airbus A220 and Embraer E-Jets E2 aircraft families.

In addition, Pratt & Whitney Canada’s PW800 engine has been selected to exclusively power Gulfstream’s G400, G500, and G600 business jets.

Moreover, Dassault’s Falcon 6X business jet entered into service in December 2023.

Pratt & Whitney produces and services the PW1000G Geared Turbofan (GTF) engine family.

GTF engine models have demonstrated a significant reduction in fuel burn and noise levels and lower environmental emissions compared to prior-generation engines.

The GTF aftermarket network expanded to 18 facilities worldwide, increasing PW1100G-JM shop visit output by approximately 30% year over year in 2024.

The GTF family now powers more than 2,200 aircraft for 85 operators across three aircraft platforms:

Airbus A320neo family, Airbus A220, and Embraer E-Jets E2.

In 2024, Pratt & Whitney received FAA certification for the GTF engine that will power the Airbus A321XLR aircraft.

The GTF Advantage configuration currently under certification testing is expected to extend the benefits of the current GTF engine, increasing takeoff thrust by 4 to 8 percent and reducing fuel consumption by up to an additional 1 percent, maintaining the engine’s lead as the most efficient powerplant for the A320neo family.

In 2024, RTX announced it had completed the preliminary design review of the hybrid-electric GTF engine demonstrator for the Clean Aviation SWITCH project.

Pratt & Whitney produces and sustains the F135 engine for the U.S.

government’s F-35 Joint Program Office to power the single-engine F-35 Lightning II aircraft (commonly known as the Joint Strike Fighter) produced by Lockheed Martin.

F135 propulsion system configurations are used for the U.S Air Force’s F-35A, the U.S.

government’s F-35 Joint Program Office to exclusively power the single-engine F-35 Lightning II aircraft (commonly known as the Joint Strike Fighter) produced by Lockheed Martin.

F135 propulsion system configurations are used for the U.S.

Air Force’s F-35A, the U.S.

Marine Corps’ F-35B, and the U.S.

Navy’s F-35C jets.

F135 engines are also used on F-35 aircraft purchased by Joint Strike Fighter partner countries and other countries through foreign military sales arrangements.

Pratt & Whitney is also under contract to build engines for the U.S.

Air Force’s B-21 long-range strike bomber.

F135 engines are also used on all F-35 aircraft purchased by Joint Strike Fighter partner countries and other countries through foreign military sales arrangements.

2024 marked the 50th anniversary since the F-16 Fighting Falcon’s first flight, which was powered by the Pratt & Whitney F100 engine.

With more than 300 million flight hours, the F100 is a mainstay powerplant for 23 global air forces, powering approximately two-thirds of global F-16s and nearly three-quarters of F-15s.

Pratt & Whitney completed the F135 Engine Core Upgrade (ECU) preliminary design review and was awarded a new contract valued at up to $1.3 billion for continued work on the ECU.

The F135 program also added Greece and Romania as new customers, bringing the total number of global participants to 20.

In addition, significant activity continued on military engine development programs including the Next Generation Adaptive Propulsion Program (NGAP).

The NGAP team completed a critical assessment of its offering with the U.S.

Air Force, moving the program closer to completing its detailed design review.

Meanwhile, the B-21 Raider, which is powered by Pratt & Whitney engines, continued to progress its flight test program.

2024 also marked the certification of Pratt & Whitney Canada’s PW545D engine that will power the Cessna Citation Ascend business aircraft from Textron.

Pratt & Whitney Canada continues to progress testing of the propulsion system for the RTX Hybrid Electric Flight Demonstrator program, which targets a 30% fuel efficiency improvement and CO2 emissions reduction compared to existing advanced regional turboprops.

In connection with the RTX Hybrid Electric Flight demonstrator program, Pratt & Whitney Canada announced the development of an advanced mobile charging unit (MCU) capable of charging high-power batteries at up to 1500 volts.

Also in 2024, Airbus Helicopters selected Pratt & Whitney Canada and its PW210 helicopter engine to support the development of a hybrid-propulsion system for its PioneerLab technology demonstrator.

The development of new engines and improvements to current production engines present important growth opportunities for Pratt & Whitney.

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Pratt & Whitney also continues to enhance its programs through performance improvement measures and product base expansion, utilizing similar collaboration arrangements.

In 2023, Pratt & Whitney continued to reach significant milestones on the GTF engine program, including surpassing 1.4 billion gallons of fuel saved and 14 million metric tons of carbon emissions avoided since entry into service.

The GTF Advantage configuration currently under testing is expected to extend the benefits of today’s GTF engine, increasing takeoff thrust up to 8 percent and reducing fuel consumption by up to an additional 1 percent, maintaining the engine’s lead as the most efficient powerplant for the A320neo family.

The GTF family now powers more than 1,700 aircraft for 70 operators across three aircraft platforms:

Airbus A320neo family, Airbus A220, and Embraer E-Jets E2.

The GTF Advantage engine continues Federal Aviation Regulations Part 33 (FAR33) certification testing to operate with, and has successfully run on, 100% sustainable aviation fuel (SAF).

In 2023, Pratt & Whitney announced it will supply two GTF engines to power the Boeing X-66A sustainable flight demonstrator aircraft.

As previously disclosed, Pratt & Whitney determined this year that a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100G-JM fleet (herein referred to as Powder Metal Matter) as described further in “Note 17:

Commitments and Contingencies” within Item 8 of this Form 10-K.

The year also saw the certification of the PW127XT-L engine for the ATR short takeoff and landing regional turboprop, marking the 200th engine certification for Pratt & Whitney Canada.

The Hybrid Electric Flight Demonstrator program, targeting a 30% fuel efficiency improvement and CO2 emissions reduction compared to existing advanced regional turboprops, successfully completed a rated power test of the demonstrator's 1 megawatt electric motor, developed by Collins.

Textron Aviation announced that the PW545D engine was selected to power the new Cessna Citation Ascend business jet.

In addition, Pratt & Whitney received a significant number of contract awards for the F135 program, including a supplemental contract for Lots 15-17 and funding to continue work on an F135 engine core upgrade.

The F135 program also added the Czech Republic as a new customer.

In addition, significant activity continued on development programs including the Next Generation Adaptive Propulsion Program, as well as the first flight of the B-21 Raider, which is powered by Pratt & Whitney engines.

Pratt & Whitney also secured substantial awards for sustainment of the F117, F119, and F100 engine fleets.

Raytheon is a leading provider of defensive and offensive threat detection, tracking and mitigation capabilities for U.S.

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Raytheon also provides advanced naval sensors, command and control and weapons including classified naval radars, the Next Generation Jammer (NGJ), shipboard missiles including the Tomahawk and Standard Missile 6 (SM-6), air-to-air missiles such as the AIM-9X SIDEWINDER missile, and integrated systems such as the SPY-6 radar.

In addition, Raytheon provides advanced systems and products that span layered land and integrated air and missile defense, including the proven Patriot air and missile defense system, the Lower Tier Air and Missile Defense Sensor (LTAMDS), the National Advanced Surface-to-Air Missile System (NASAMS), Javelin, Excalibur, Stinger, and High-Energy Lasers.

In addition, Raytheon provides advanced systems and products that span layered land and integrated air and missile defense, including the Patriot air and missile defense system, the Lower Tier Air and Missile Defense Sensor (LTAMDS), the National Advanced Surface-to-Air Missile System (NASAMS), Javelin, Excalibur, Stinger, and High-Energy Lasers.

Raytheon also provides technologically advanced sensors, satellites, and interceptors, including the AN/TPY-2 radar, and Standard Missile 3 (SM-3).

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Department of Defense (DoD), including the U.S.

Army, Missile Defense Agency (MDA), U.S.

Army, Missile Defense Agency, U.S.

Air Force, and U.S.

Space Force, as well as programs with U.S federal civil customers, and other international and classified customers.

Space Force, as well as programs with U.S.

federal civil customers, and other international and classified customers.

In 2024, Raytheon achieved key advancements in, or received contract awards for, the following programs:

Naval Strike Missile (NSM), the StormBreaker smart weapon, AIM-9X and the AMRAAM program, and certain advanced technologies, including classified programs and an advanced development program.

Major new awards in 2023 include a NATO contract to provide Guidance Enhanced Missiles (GEM-T) for the NATO Support and Procurement Agency (NSPA), AMRAAM for the U.S.

Air Force and Navy and international customers;

a contract to provide Patriot Air Defense systems to Switzerland, a contract to provide StormBreaker for the U.S.

Air Force and Navy, a contract to provide Next Generation Jammer Mid-Band (NGJ-MB) for the U.S.

Navy and the government of Australia, a contract for the SPY-6 Hardware Production and Sustainment base for the U.S.

Navy, a contract to provide Excalibur guided munitions for the U.S.

Army and international customers, a contract to provide the Next Generation Short Range Interceptor (NGSRI) for the U.S.

Army, and a contract to develop and produce Hypersonic Attack Cruise Missiles (HACM) for the U.S.

Global Patriot program;

LTAMDS program;

SM-3 program;

AIM-9X and the AMRAAM programs;

and certain advanced technologies, including classified programs and an advanced development program.

Major new contracts awarded in 2024 include a contract to provide Patriot Air Defense systems to Germany and Patriot launchers for Poland;

a contract for low-rate initial production of LTAMDS defense systems for the U.S.

Army and Poland;

a contract to provide SM-3 exo-atmospheric missile defense interceptors to the U.S.

Navy and international customers;

a contract to provide Guidance Enhanced Missiles (GEM-T) tactical ballistic missiles for NATO Support and Procurement Agency (NSPA);

a contract to provide AMRAAM missiles to the U.S.

Air Force and international customers;

a contract to provide Patriot Air Defense systems, including GEM-T missiles, to Romania;

a contract to provide AIM-9X Sidewinder short-range air-to-air missiles for the U.S.

Air Force, and international customers;

a contract to produce AN/SPY-6(V) radars for the U.S.

a contract to provide Next Generation Jammer Mid-Band (NGJ-MB) for the U.S.

Navy and the Royal Australian Air Force;

a contract to provide Javelin guided munition for the U.S.

Army and international customers;

and a contract to provide Evolved SeaSparrow Missile (ESSM) ship self-defense missile for the U.S.

Navy and international consortium partners.

Raytheon has experienced increased global demand for the combat-proven Coyote system, a low-cost, expendable, unmanned aircraft system with the capability of operating in autonomous swarms.

Sales and Customers

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(1) 2023 total net sales includes the reduction in sales from the Powder Metal Matter.

excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity (IDIQ) type contracts).

Backlog, which is equivalent to our remaining performance obligations (RPO) for our sales contracts, represents the aggregate dollar value of firm orders for which products have not been provided or service has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity (IDIQ) type contracts).

Total backlog was $218 billion and $196 billion as of December 31, 2024 and 2023, respectively.

Of the total RPO as of December 31, 2023, we expect approximately 25% will be recognized as sales over the next 12 months.

Of the total RPO as of December 31, 2024, we expect approximately 25% will be recognized as revenue over the next 12 months.

All of our businesses are subject to significant competition.

Our businesses compete on a variety of factors such as price, delivery schedule, past performance, reliability, customer service, product development, innovation, and technology.

Our businesses compete on a variety of factors such as price, delivery schedule, past performance, reliability, customer service, innovation, and technology.

Many of our competitors have substantial financial resources and significant technological capabilities.

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competitors receive government research and development assistance, marketing subsidies, and other assistance for their products beyond the assistance that may be available to us as a U.S.

Our aerospace businesses compete with numerous domestic and foreign manufacturers, customers, and companies that obtain regulatory agency approval to manufacture spare parts.

Our aerospace businesses compete with numerous U.S.

and foreign businesses that obtain regulatory agency approval to manufacture products and spare parts.

Customer selections of aircraft engines, components, and systems can also have a significant impact on future sales of parts and services.

In addition, the U.S.

government’s and other governments’ policies of purchasing parts from suppliers other than the original equipment manufacturer affect military spare parts sales.

In addition, customers (including the U.S.

government and other governments) may purchase parts from suppliers other than the original equipment manufacturer, which affects spare parts sales.

Some competitors may offer substantial discounts and other financial incentives, performance and operating cost guarantees, and participation in financing arrangements in an effort to compete for the aftermarket associated with these products.

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We frequently partner on defense programs with our major suppliers, some of whom are, from time to time, competitors on other programs.

In addition, the competitive landscape in the defense industry continues to evolve with trends such as the continued increase in commercial competitors and increased government, particularly foreign, sponsorship of competitors on defense development programs.

In addition, the competitive landscape in the defense industry continues to evolve with trends such as the continued increase in commercial competitors, new entrants with different technology approaches and business models, governmental bid evaluation processes requesting expanded intellectual property disclosures and rights sharing that may risk the loss of competitively sensitive information, and increased government, particularly foreign government, sponsorship of competitors on defense development programs.

Moreover, our potential international contract awards, particularly for sales of defense products and services, may be limited by our ability to agree to offset obligations or industrial cooperation obligations, sometimes in the form of in-country industrial participation (ICIP) agreements, designed to enhance local industry.

As a global technology and innovation-driven company, we depend on a highly skilled workforce.

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In addition, our defense business in particular requires qualified personnel with security clearances due to our classified programs.

Shifts in macroeconomic, industry and labor market conditions may affect the environment for hiring and retaining employees with relevant qualifications and experience, and we have experienced, and continue to experience, challenges hiring highly qualified personnel.

Macroeconomic, industry, and labor market conditions continue to affect the environment for hiring and retaining employees with relevant qualifications and experience.

While competition for talent has softened, we continue to experience challenges hiring highly qualified personnel for some of our most critical roles and in specific locations.

We continuously monitor labor market conditions and trends to mitigate hiring and retention issues.

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As of December 31, 2024, our global employee population consisted of a total of approximately 186,000 employees, including approximately 57,000 engineering professionals and approximately 34,000 employees represented by labor unions and other employee representative bodies.

Our employees are located in 51 countries, with 70% of our employees located in the U.S.

As of December 31, 2023, women represented 25% of our global workforce and 33% of our global executives, and people of color represented 33% of our U.S.

employee population and 17% of our U.S.

In addition, we had over 2,200 U.S.

new hires who self-identified as veterans in 2023.

Diversity, Equity, and Inclusion (DE&I).

We strive to advance a diverse, equitable, and inclusive work environment.

We believe a work environment where all individuals are respected, valued, and supported enables them to focus on developing the most innovative solutions to our industry’s greatest challenges.

Our RTX DE&I Pillars for Action framework is focused on workforce diversity, supplier diversity, community engagement, and DE&I public policy.

We have a DE&I advisory board of senior leaders.

We review diversity in talent development and promotion, employee compensation practices and succession planning, and embed DE&I training into our leadership development programs.

Our employees were located in 52 countries, with 68% of our employees located in the U.S.

We have published our U.S.

Equal Employment Opportunity EEO-1 report data as part of our Environmental Social Governance (ESG) Report.

We have nine global employee resource groups (ERGs), which are volunteer-run organizations that are open to all employees and are intended to foster an inclusive culture.

Approximately 16% of our workforce across 25 of the countries in which we operate are members of one or more of these ERGs.

We also support science, technology, engineering, and mathematics initiatives for women and people of color, and provide opportunities to attract, develop and engage military veterans, people with disabilities, and the LGBTQ+ community.

Equal Employment Opportunity EEO-1 report data as part of our Environmental Social and Governance (ESG) Report.

We strive to build high-performing teams.

We believe a work environment where all individuals are seen, respected, valued, and protected enables them to focus on developing the most innovative solutions to our industry’s greatest challenges.

Approximately 19% of our workforce across 31 of the countries in which we operate are members of one or more of our nine global employee resource groups (ERGs).

We also support science, technology, engineering, and mathematics initiatives to inspire the workforce of the next generation and build talent pipelines.

Talent Acquisition, Development, and Retention;

Employee Health and Safety.

We continuously monitor the hiring, retention, and management of our employees by business and function with a focus to attract, develop, engage, advance, and retain the best talent in the industry.

We aim to identify and hire quality, diverse external talent with skills matched to our Company’s business needs.

We continuously monitor the hiring, retention, and management of our employees by business and function with a focus to attract, develop, engage, advance, and

retain the best talent in the industry.

We aim to identify and hire quality external talent with skills matched to our Company’s business needs.

We invest in our workforce through internal and external education, training and development programs, and tuition assistance benefits.

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We recognize and reward performance during our annual review process.

We regularly conduct succession planning to ensure that we continue to cultivate the leadership pipeline of talent needed to execute our business strategy.

We regularly conduct talent reviews and develop succession plans to ensure that we continue to cultivate the leadership pipeline of talent needed to execute our business strategy.

We solicit employee feedback on RTX’s performance as an employer via confidential surveys in the pre-hire, active, and exit stages of employment, and use those results to improve our workplace and employee experience.

These surveys cover various topics related to employee engagement, inclusion, and belonging.

These surveys cover various topics related to employee engagement and culture.

We have industry-leading health and safety programs to help maintain a safe work environment for all employees and mitigate workplace incidents, risks, and hazards.

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Our innovative products and services incorporate advanced technologies.

As a result, we invest substantial amounts in research and development (R&D) activities using our own funds and under contractual arrangements with our customers, to enhance existing products and services and develop future technologies to meet our customers’ changing needs and requirements, as well as to address new business opportunities.

As a result, we invest substantial amounts in research and development activities using our own funds and under contractual arrangements with our customers, to enhance existing products and services and develop future technologies to meet our customers’ changing needs and requirements, as well as to address new business opportunities.

We manufacture and service our products in approximately 230 manufacturing, production, or overhaul facilities in approximately 30 countries, including the U.S.

In addition, RTX has offices in approximately 10 other countries.

Intellectual Property

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We are largely dependent upon foreign sources for certain raw materials, such as cobalt, tantalum, chromium, rhenium, nickel, and titanium, and we rely on foreign suppliers as single-source suppliers of some components.

In 2023, we continued to experience supply chain disruptions that impacted our ability to procure raw materials, microelectronics, and certain commodities, and resulted in delays and increased costs.

These disruptions were driven by supply chain market constraints and macroeconomic conditions, including inflation and labor market shortages.

High inflation increased material and component prices, labor rates and supplier costs, and put pressure on our margins.

Current geopolitical conditions, including conflicts and other causes of strained intercountry relations, as well as sanctions and other trade restrictive activities, are contributing to these supply chain issues.

We have implemented certain actions and programs to mitigate some of the impacts, but anticipate supply chain disruptions to continue into 2024.

We work with our suppliers and subcontractors to assess the causes of performance failures and delays and

work to address them, including by providing suppliers with raw materials and technical support.

We have arranged second and third supply source alternatives and have increased our materials and parts inventory.

We regularly pursue cost reductions through a number of mechanisms, including consolidating or re-sourcing our purchases, expanding the use of long-term agreements, reducing the number of suppliers generally (except as described above for important supply alternatives), strategic sourcing in cost competitive regions, competitions among suppliers and other low-cost sourcing initiatives, and extending our contractually negotiated raw material pricing to higher-tier suppliers in our supply chain.

In recent years, we have experienced supply chain disruptions that have impacted our ability to procure raw materials, microelectronics, and certain commodities, resulting in delays and increased costs.

These disruptions have been driven by supply chain market constraints and macroeconomic conditions, including inflation and labor market shortages.

The high inflationary environment has increased material and component prices, labor rates and supplier costs, which has negatively impacted our costs.

We have implemented certain actions and programs which have mitigated some of the impacts, but we anticipate that supply chain disruptions will continue.

We work with our suppliers and subcontractors to assess and address the causes of performance failures and delays, including by providing suppliers with raw materials and technical support.

We have arranged second and third supply source alternatives in some cases and have increased our materials and parts inventory.

We regularly pursue cost

reductions through a number of mechanisms, including consolidating or re-sourcing our purchases, expanding the use of long-term agreements, reducing the number of suppliers generally (except as described above for important supply alternatives), strategic sourcing in cost competitive regions, capitalizing on competitions among suppliers and other low-cost sourcing initiatives, and extending our contractually negotiated raw material pricing to higher-tier suppliers in our supply chain.

For additional information related to supply chain issues, see Item IA.

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As worldwide businesses, our operations can be affected by a variety of economic, industry, and other factors, including those described in this section, in Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Item 1.

“Cautionary Note Concerning Factors That May Affect Future Results,” and in Item 1A.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in “Cautionary Note Concerning Factors That May Affect Future Results and Risk Factor Summary,” and in Item 1A.

“Risk Factors” of this Form 10-K.

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We deal with numerous U.S.

government agencies and entities, including but not limited to all of the branches of the DoD, the Federal Aviation Administration (FAA), and the Department of Homeland Security.

government agencies and entities, including but not limited to all of the branches of the DoD and the FAA.

Similar government authorities exist in all of the countries in which we do business.

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government contracting or subcontracting for a period of time.

In addition, in order to support U.S.

government priorities, we may begin performance on an undefinitized contract action prior to completing contract negotiations on the terms, specifications, or price between the parties.

government has the ability to unilaterally definitize contracts, which would obligate us to perform under terms and conditions imposed by the U.S.

government, affecting our ability to negotiate mutually agreeable contract terms.

Uncertainties in final contract price, specifications and terms, or loss of negotiating leverage associated with particularly long delays in contract definitization may negatively affect our profitability.

For further discussion of risks related to government contracting, including on-going litigation associated with U.S.

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In addition, commercial aerospace regulations and regulator approaches differ across jurisdictions and changes in such regulations and implementing legislation can impact our operations.

Global Trade Regulation.

We must comply with various laws and regulations relating to the export and import of products, services, and technology from and into the U.S.

and other countries having jurisdiction over our operations.

In the U.S., these laws and regulations include, among others, the Export Administration Regulations (EAR) administered by the U.S.

Department of Commerce, the International Traffic in Arms Regulations (ITAR) and the Arms Export Control Act (AECA) provisions administered by the U.S.

Department of State (DOS), embargoes and sanctions regulations administered by the U.S.

Department of the Treasury, and import regulations administered by the U.S.

Department of Homeland Security and the U.S.

Department of Justice (DOJ).

Certain of our products, services, and technologies have military or strategic applications and are on the U.S.

Munitions List of the ITAR, the Commerce Control List of the EAR, or are otherwise subject to the EAR and/or the U.S.

Munitions Import List, and we are required to obtain licenses and authorizations from the appropriate U.S.

government agencies before exporting these products out of the U.S.

or importing these products into the U.S.

Foreign policy of the U.S.

or other licensing jurisdictions may affect the licensing process or otherwise prevent us from engaging in business dealings with

certain individuals, entities, or countries.

Any failure by us, our customers, or our suppliers to comply with these laws and regulations could result in civil or criminal penalties, fines, seizure of our products, adverse publicity, restrictions on our ability to engage in export or import transactions, or the suspension or debarment from doing business with the U.S.

For further discussion of risks related to exports and imports, see Item 1A.

“Risk Factors”.

Compliance Matters.

As previously disclosed, 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 became subject to an administrative order issued by the Securities and Exchange Commission (SEC) (the SEC Administrative Order) to resolve the previously disclosed criminal and civil government investigations into payments made by Raytheon Company and its joint venture, Thales-Raytheon Systems (TRS), since 2012 in connection with certain Middle East contracts.

On October 16, 2024, Raytheon Company also entered into a DPA (DPA-2) 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.

Under DPA-1, DPA-2, and the SEC Administrative Order, Raytheon Company and the Company are required, among other things, to retain an independent compliance monitor satisfactory to the DOJ and the SEC (for a term ending three years from the date on which the monitor is engaged) and are required to undertake certain cooperation and disclosure obligations (for a term commencing on the effective date of DPA-1 and the SEC Administrative Order, as applicable, and ending three years from the date on which the monitor is engaged).

The compliance monitor will oversee Raytheon Company’s and the Company’s compliance with their respective obligations under DPA-1, DPA-2, and the SEC’s Administrative Order.

DPA-1 and DPA-2 further provide that, in the event the DOJ, in its sole discretion, determines during the period of deferral of prosecution that Raytheon Company or the Company have violated any provision of either DPA, Raytheon Company or the Company may be subject to prosecution for any federal criminal violation, including the charges against Raytheon Company in the relevant DPA.

The SEC Administrative Order further provides that, in the event of a breach of the agreement with the SEC, the SEC may vacate the Administrative Order and institute proceedings against the Company.

In the event of any such determination of breach, the Company may face additional adverse impacts.

Also as previously disclosed, on August 29, 2024, the Company entered into a Consent Agreement (CA) with the DOS to resolve alleged civil violations of the AECA and the ITAR.

The CA, which has a three-year term, requires the Company to implement remedial compliance measures and to conduct an external audit of the Company’s ITAR compliance program.

The CA also requires appointment of an external independent Special Compliance Officer (SCO).

The Company appointed its SCO on September 27, 2024.

If the Company is unable to satisfy the requirements of the CA within three years as determined by the DOS, it may face a continuation of the CA, additional fines, or other adverse impacts.

For further discussion of DPA-1, DPA-2, the SEC Administrative Order, and the CA, see Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 1A.

“Risk Factors,” and “Note 17:

Commitments and Contingencies” within Item 8 of this Form 10-K.

Environmental Regulation.

Our operations are subject to and affected by environmental regulation by federal, state, and local authorities in the U.S.

and regulatory authorities with jurisdiction over our international operations, including with respect to the generation, treatment, storage, disposal, and remediation of hazardous substances and wastes.

and regulatory authorities with jurisdiction over our international operations, including with respect to chemical substances in our products, manufacturing processes, and the operation of our facilities, as well as the generation, treatment, storage, disposal, and remediation of hazardous substances and wastes.

We use hazardous substances and generate hazardous wastes in some of our operations and have incurred, and will likely continue to incur, costs associated with environmental compliance activities and management of remediation matters at sites with pollutants.

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At such facilities, environmental compliance and remediation costs have historically been primarily the responsibility of the U.S.

government, and we have relied upon the U.S.

government, and we have relied upon U.S.

government funding to pay such costs.

We do not anticipate that compliance with current provisions or requirements relating to the protection of the environment or that any

payments we may be required to make for cleanup liabilities will have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

We do not anticipate that compliance with current provisions or requirements relating to the protection of the environment or that any payments we may be required to make for cleanup liabilities will have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

Environmental matters are further addressed in “Note 1:

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If we were convicted of a violation of the federal Clean Air Act or Clean Water Act, the facility or facilities involved in the violation could be deemed ineligible to be used in performing any U.S.

government contract we are awarded until the Environmental Protection Agency thereafter certifies that the condition giving rise to the violation has been corrected.

government contract we are awarded until the Environmental Protection Agency (EPA) thereafter certifies that the condition giving rise to the violation has been corrected.

In addition, we could be affected by future foreign or domestic laws or regulations imposed in response to concerns over climate change, and we monitor developments in environmental and climate-related laws and regulations and their potential impact to our business and financial condition.

Changes in environmental and climate-related laws or regulations, including regulations on greenhouse gas emissions, carbon pricing, energy taxes, product efficiency standards, and mandatory disclosure obligations could lead to new or additional investment in product designs and facility upgrades and could increase our operational and environmental compliance expenditures, including increased energy and raw materials costs and costs associated with manufacturing changes.

Changes in environmental and climate-related laws or regulations, including regulations on greenhouse gas emissions, carbon pricing, energy taxes, product efficiency standards, global chemical regulations, and mandatory disclosure obligations could lead to new or additional investment in product designs and facility upgrades and could increase our operational and environmental compliance expenditures, including increased energy and raw materials costs and costs associated with manufacturing changes.

For further discussion of risks related to environmental and climate matters and other government regulations, see Item 1A.

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Our international sales are also subject to varying currency, political, and economic risks.

Cautionary Note Concerning Factors That May Affect Future Results

Cautionary Note Concerning Factors That May Affect Future Results and Risk Factor Summary

This Form 10-K contains statements which, to the extent they are not statements of historical or present fact, constitute “forward-looking statements” under the securities laws.

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Forward-looking statements can be identified by the use of words such as “believe,” “expect,” “expectations,” “plans,” “strategy,” “prospects,” “estimate,” “project,” “target,” “commit,” “commitment,” “anticipate,” “will,” “should,” “see,” “guidance,” “outlook,” “goals,” “objectives,” “confident,” “on track,” and other words of similar meaning.

Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, share repurchases (including the accelerated share repurchase program), tax payments and rates, research and development spending, cost savings, other measures of financial performance, potential future plans, strategies or transactions, credit ratings and net indebtedness, a rare condition in powder metal used to manufacture certain engine parts requiring accelerated inspection of the PW1100G-JM (PW1100) Geared Turbofan (GTF) fleet (herein referred to as the Powder Metal Matter) and related matters and activities, including without limitation other engine models that may be impacted, anticipated benefits to RTX of its segment realignment, pending dispositions of Raytheon’s Cybersecurity, Intelligence and Services business and Collins’ actuation and flight control business, targets and commitments (including for share repurchases or otherwise), and other statements which are not solely historical facts.

Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, share repurchases, tax payments and rates, research and development spending, cost savings, other measures of financial performance, potential future plans, strategies or transactions, credit ratings and net indebtedness, the Powder Metal Matter and related matters and activities, including without limitation other engine models that may be impacted, the pending disposition of Collins’ actuation and flight control business, targets and commitments (including for share repurchases or otherwise), and other statements which are not solely historical facts.

All forward-looking statements involve risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements.

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• the effect of changes in economic, capital market, and political conditions in the U.S.

and globally, such as from the global sanctions and export controls with respect to Russia, and any changes therein, including related to financial market conditions, bank failures, and other banking industry disruptions, fluctuations in commodity prices or supply (including energy supply), inflation, interest rates and foreign currency exchange rates, disruptions in global supply chain and labor markets, and geopolitical risks;

and globally, such as from the global sanctions and export controls with respect to Russia, and any changes therein, and including changes related to financial market conditions, banking industry disruptions, fluctuations in commodity prices or supply (including energy supply), inflation, interest rates and foreign currency exchange rates, disruptions in global supply chain and labor markets, levels of consumer and business confidence, the imposition of tariffs, and geopolitical risks, including, without limitation, in the Middle East and Ukraine;

• risks associated with U.S.

government sales, including changes or shifts in defense spending due to budgetary constraints, spending cuts resulting from sequestration, a continuing resolution, a government shutdown, the debt ceiling or measures taken to avoid default, or otherwise, and uncertain funding of programs;

• risks relating to our performance on our contracts and programs, including our ability to control costs, and our inability to pass some or all of our costs on fixed price contracts to the customer;

• challenges in the development, production, delivery, support, and performance of RTX advanced technologies and new products and services and the realization of the anticipated benefits (including our expected returns under customer contracts), as well as the challenges of operating in RTX’s highly-competitive industries;

• risks relating to our performance on our contracts and programs, including our ability to control costs, the mix of our contracts and programs, and our inability to pass some or all of our costs on fixed price contracts to the customer, and risks related to our dependence on U.S.

government approvals for international contracts;

• challenges in the development, certification, production, delivery, support, and performance of RTX advanced technologies and new products and services and the realization of the anticipated benefits (including our expected returns under customer contracts), as well as the challenges of operating in RTX’s highly-competitive industries both domestically and abroad;

• risks relating to RTX’s reliance on U.S.

suppliers and commodity markets, including the effect of sanctions, delays, and disruptions in the delivery of materials and services to RTX or its suppliers and price increases;

• risks relating to RTX international operations from, among other things, changes in trade policies and implementation of sanctions, foreign currency fluctuations, economic conditions, political factors, sales methods, and U.S.

or local government regulations;

suppliers and commodity markets, including the effect of sanctions, tariffs, delays, and disruptions in the delivery of materials and services to RTX or its suppliers and cost increases;

• risks relating to RTX’s international operations from, among other things, changes in trade policies and implementation of sanctions, foreign currency fluctuations, economic conditions, political factors, sales methods, U.S.

or local government regulations, and our dependence on U.S.

government approvals for international contracts;

• the condition of the aerospace industry;

• the ability of RTX to attract, train, and retain qualified personnel and maintain its culture and high ethical standards, and the ability of our personnel to continue to operate our facilities and businesses around the world;

• the scope, nature, timing, and challenges of managing acquisitions, investments, divestitures, and other transactions, including the realization of synergies and opportunities for growth and innovation, the assumption of liabilities, and other risks and incurrence of related costs and expenses, and risks related to completion of announced divestitures;

• compliance with legal, environmental, regulatory, and other requirements, including, among other things, export and import requirements such as the International Traffic in Arms Regulations and the Export Administration Regulations, anti-bribery and anticorruption requirements, such as the Foreign Corrupt Practices Act, industrial cooperation agreement obligations, and procurement and other regulations in the U.S.

• potential changes in U.S.

government policy positions, including changes in DoD policies or priorities;

• the ability of RTX to attract, train, qualify, and retain qualified personnel and maintain its culture and high ethical standards, and the ability of our personnel to continue to operate our facilities and businesses around the world;

• the scope, nature, timing, and challenges of managing acquisitions, investments, divestitures (including the pending disposition of Collins' actuation and flight control business), and other transactions, including the realization of synergies and opportunities for growth and innovation, the assumption of liabilities, and other risks and incurrence of related costs and expenses, and risks related to completion of announced divestitures;

• compliance with legal, environmental, regulatory, and other requirements, including, among other things, obtaining regulatory approvals for new technologies and products, and export and import requirements such as ITAR and EAR, anti-bribery and anticorruption requirements, such as the Foreign Corrupt Practices Act (FCPA), industrial cooperation agreement obligations, and procurement and other regulations in the U.S.

and other countries in which RTX and its businesses operate;

• the outcome of pending, threatened, and future legal proceedings, investigations, and other contingencies, including those related to U.S.

government audits and disputes;

government audits and disputes and the potential for suspension or debarment of U.S.

government contracting or export privileges as a result thereof;

• risks related to the Deferred Prosecution Agreements, SEC Administrative Order, the Consent Agreement;

and the related investigations by the SEC and the DOJ;

• factors that could impact RTX’s ability to engage in desirable capital-raising or strategic transactions, including its credit rating, capital structure, levels of indebtedness, and related obligations, capital expenditures, and research and development spending, and capital deployment strategy including with respect to share repurchases, and the availability of credit, borrowing costs, credit market conditions, and other factors;

• uncertainties associated with the timing and scope of future repurchases by RTX of its common stock, including the ability to complete the accelerated share repurchase (ASR), the purchase price of the shares acquired pursuant to the ASR agreement, and the timing and duration of the ASR program, or declarations of cash dividends, which may be discontinued, accelerated, suspended, or delayed at any time due to various factors, including market conditions and the level of other investing activities and uses of cash;

• risks relating to realizing expected benefits from, incurring costs for, and successfully managing the Company’s segment realignment effective July 1, 2023, and other RTX strategic initiatives such as cost reduction, restructuring, digital transformation, and other operational initiatives;

• uncertainties associated with the timing and scope of future repurchases by RTX of its common stock, or declarations of cash dividends, which may be discontinued, accelerated, suspended, or delayed at any time due to various factors, including market conditions and the level of other investing activities and uses of cash;

• risks relating to realizing expected benefits from, incurring costs for, and successfully managing strategic initiatives such as cost reduction, restructuring, digital transformation, and other operational initiatives;

• risks of additional tax exposures due to new tax legislation or other developments in the U.S.

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• risks relating to addressing the Powder Metal Matter, including, without limitation, the number and expected timing of shop visits, inspection results and scope of work to be performed, turnaround time, availability of parts, available capacity at overhaul facilities, outcomes of negotiations with impacted customers, and risks related to other engine models that may be impacted by the Powder Metal Matter, and in each case the timing and costs relating thereto, as well as other issues that could impact RTX product performance, including quality, reliability, or durability;

• risks relating to a RTX product safety failure or other failure affecting RTX’s or its customers’ or suppliers’ products or systems;

• risks relating to cybersecurity, including cyber-attacks on RTX’s information technology infrastructure, products, suppliers, customers and partners, and cybersecurity-related regulations;

• changes in production volumes of one or more of our significant customers as a result of business, labor, or other challenges, and the resulting effect on its or their demand for our products and services;

• risks relating to an RTX product safety failure, quality issue, or other failure affecting RTX’s or its customers’ or suppliers’ products or systems;

• risks relating to cybersecurity, including cyber-attacks on RTX’s IT infrastructure, products, suppliers, customers and partners, and cybersecurity-related regulations;

• risks related to insufficient indemnity or insurance coverage;

• risks related to artificial intelligence;

• risks relating to our intellectual property and certain third-party intellectual property;

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See “Note 17:

Commitments and

Contingencies” within Item 8 of this Form 10-K, the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the headings “Business Overview,” “Critical Accounting Estimates,” “Results of Operations,” and “Liquidity and Financial Condition,” within Item 7 of this Form 10-K, and the sections titled Item 1A.

“Risk Factors” and Item 3.

Commitments and Contingencies” within Item 8 of this Form 10-K, the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the headings “Business Overview,” “Critical Accounting Estimates,” “Results of Operations,” and “Liquidity and Financial Condition,” within Item 7 of this Form 10-K, and the sections titled Item 1A.

Factors” and Item 3.

“Legal Proceedings,” of this Form 10-K.

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We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our other filings with the Securities and Exchange Commission (SEC) .

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-K

Item 1. Business