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Item 1. Financial Statements

2025-04-22 compared with 2024-10-22 · 234 added, 359 removed, 669 unchanged (47% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(dollars in millions, except per share amounts) 2025 2024

8 unchanged sentences

Total costs and expenses 18,275 17,807

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

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

Other income, net 4 372

Operating profit 2,035 1,870

Non-operating expense (income), net:

1 unchanged sentence

Interest expense, net 443 405

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

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

Total non-operating expense, net 77 19

Income before income taxes 1,958 1,851

Income tax expense 333 108

Net income 1,625 1,743

Noncontrolling interest in subsidiaries’ earnings 90 34

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

Earnings (Loss) Per Share attributable to common shareowners:

Net income attributable to common shareowners $ 1,535 $ 1,709

Earnings Per Share attributable to common shareowners:

Basic $ 1.15 $ 1.29

3 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

Quarter Ended September 30, Nine Months Ended September 30,

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Quarter Ended March 31,

(dollars in millions) 2025 2024

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

Net income $ 1,625 $ 1,743

Other comprehensive income (loss), before tax:

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Other comprehensive income (loss), net of tax 548 ( 216 )

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

Comprehensive income 2,173 1,527

Comprehensive income attributable to noncontrolling interest 90 34

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

Comprehensive income attributable to common shareowners $ 2,083 $ 1,493

See accompanying Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEET

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

(dollars in millions) March 31, 2025 December 31, 2024

Current Assets

1 unchanged sentence

Accounts receivable, net 11,426 10,976

Contract assets 14,684 12,139

Contract assets, net 15,241 14,570

Inventory, net 13,618 12,768

30 unchanged sentences

Retained earnings 54,277 53,589

Unearned ESOP shares — ( 15 )

Accumulated other comprehensive loss ( 3,207 ) ( 3,755 )

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Nine Months Ended September 30,

Quarter Ended March 31,

(dollars in millions) 2025 2024

3 unchanged sentences

Depreciation and amortization 1,052 1,059

Deferred income tax benefit ( 119 ) ( 728 )

Deferred income tax provision (benefit) 67 ( 114 )

Stock compensation cost 111 112

Net periodic pension and other postretirement income ( 324 ) ( 338 )

Share-based 401(k) matching contributions 167 82

Gain on sale of business, net of transaction costs (Note 2)

11 unchanged sentences

Increase in other intangible assets ( 104 ) ( 163 )

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

Payments from settlements of derivative contracts, net ( 47 ) ( 1 )

Other investing activities, net ( 14 ) 41

Net cash flows used in investing activities ( 755 ) ( 2,061 )

Net cash flows (used in) provided by investing activities ( 678 ) 693

Financing Activities:

Proceeds from long-term debt — 2,974

Repayment of long-term debt ( 9 ) ( 950 )

Change in commercial paper, net (Note 9) — 473

Change in other short-term borrowings, net 28 ( 22 )

Dividends paid on common stock ( 2,415 ) ( 2,472 )

Dividends paid ( 840 ) ( 769 )

Repurchase of common stock ( 50 ) ( 56 )

2 unchanged sentences

Effect of foreign exchange rate changes on cash and cash equivalents 16 ( 8 )

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

Net decrease in cash, cash equivalents, and restricted cash ( 413 ) ( 980 )

Cash, cash equivalents, and restricted cash, beginning of period 5,606 6,626

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(dollars in millions, except per share amounts;

3 unchanged sentences

Common stock plans activity 7 ( 6 )

Purchase of subsidiary shares from noncontrolling interest, net — — — ( 1 )

Share-based 401(k) matching contributions 74 59

Ending balance 37,515 37,108

1 unchanged sentence

Beginning balance ( 27,112 ) ( 26,977 )

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

Share-based 401(k) matching contributions 93 —

Common stock repurchased ( 50 ) ( 52 )

2 unchanged sentences

Beginning balance 53,589 52,154

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

Net income attributable to common shareholders 1,535 1,709

Dividends on common stock ( 803 ) ( 769 )

4 unchanged sentences

Beginning balance — ( 15 )

Common stock plans activity 7 3 15 9

Share-based 401(k) matching contributions

Ending balance — ( 11 )

8 unchanged sentences

Dividends attributable to noncontrolling interest ( 64 ) ( 31 )

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

Capital contributions 14 — 14 —

Ending balance 1,791 1,615

Equity at September 30

Equity at March 31

$ 63,307 $ 62,100

2 unchanged sentences

Shares of common stock repurchased 396 560

Treasury shares reissued related to 401(k) matching contributions 1,323 —

Dividends declared per share of common stock $ 0.630 $ 0.590

4 unchanged sentences

Basis of Presentation

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 Condensed Consolidated Financial Statements at March 31, 2025 and for the quarters ended March 31, 2025 and 2024 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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Unless the context otherwise requires, the terms “we,” “our,” “us,” “the Company,” and “RTX” mean RTX Corporation and its subsidiaries.

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

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 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:

Commitments and Contingencies” for additional information.

Pratt & Whitney 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:

Commitments and Contingencies” for additional information.

Russia Sanctions.

In response to Russia’s invasion of Ukraine, the U.S.

government and the governments of various jurisdictions in which we operate, have imposed broad economic sanctions and export controls targeting specific industries, entities, and individuals in Russia.

As a result of the Canadian government’s imposition of sanctions in February 2024, including those imposed on U.S.- and German-based Russian-owned entities from which we source titanium for use in our Canadian operations, we recorded charges of $ 175 million in the first quarter of 2024 within our Collins segment.

These charges are primarily related to the recognition of unfavorable purchase commitments and an impairment of contract fulfillment costs that are no longer recoverable as a result of initiating alternative titanium sources.

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

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

We reclassified certain immaterial prior period amounts within our Condensed Consolidated Statement of Cash Flows and Condensed Consolidated Statement of Changes in Equity related to our share-based 401(k) matching contributions to conform to our current period presentation.

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

Throughout this Form 10-Q, when we refer to the quarters ended March 31, 2025 and 2024 with respect to Raytheon, we are referring to their March 30, 2025 and March 31, 2024 fiscal quarter ends, respectively.

Acquisitions and Dispositions

Dispositions.

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.

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 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, net within the Condensed Consolidated Statement of Operations.

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 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.

During the fourth quarter of 2024, as a result of progress towards regulatory approvals, held for sale criteria was met.

At March 31, 2025, assets of approximately $ 1.6 billion and liabilities of approximately $ 0.6 billion are held for sale at fair value less cost to sell.

Held for sale assets primarily include $ 0.7 billion of goodwill and intangible assets presented in Other assets and $ 0.3 billion of inventory presented in Other assets, current, within the Condensed Consolidated Balance Sheet.

Held for sale liabilities primarily include $ 0.4 billion of contract liabilities and other accrued liabilities presented in Other accrued liabilities within the Condensed Consolidated Balance Sheet.

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

This disposition does not qualify for presentation as discontinued operations.

Goodwill and Intangible Assets

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

Changes in our goodwill balances for the quarter ended March 31, 2025 were as follows:

(dollars in millions) Balance as of December 31, 2024 Acquisitions and Divestitures Foreign Currency Translation and Other Balance as of March 31, 2025

Collins Aerospace $ 32,223 $ — $ 256 $ 32,479

$ 33,135 $ ( 264 ) $ 321 $ 33,192

Pratt & Whitney 1,563 — — 1,563

3 unchanged sentences

Total $ 52,789 $ — $ 256 $ 53,045

(1) The reduction in Acquisitions and Divestitures includes the reclassification of goodwill to held for sale assets.

Intangible Assets.

Identifiable intangible assets are comprised of the following:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

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

7 unchanged sentences

Total $ 49,107 $ ( 15,991 ) $ 48,899 $ ( 15,456 )

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.

Amortization of intangible assets for the quarters ended March 31, 2025 and 2024 was $ 501 million and $ 526 million, respectively.

The following is the expected amortization of intangible assets for the remainder of 2025 through 2030:

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Earnings Per Share

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(dollars and shares in millions, except per share amounts) 2025 2024

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

Net income attributable to common shareowners $ 1,535 $ 1,709

Basic weighted average number of shares outstanding 1,337.1 1,329.4

1 unchanged sentence

Diluted weighted average number of shares outstanding 1,351.8 1,337.3

Earnings (Loss) Per Share attributable to common shareowners:

Earnings Per Share attributable to common shareowners:

Basic $ 1.15 $ 1.29

2 unchanged sentences

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.

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.

For the quarters ended March 31, 2025 and 2024, the number of stock awards excluded from the computation was 3.2 million and 15.3 million, respectively.

Changes in Contract Estimates at Completion

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The risks and opportunities relate to management’s judgment about the ability and cost to achieve the schedule, consideration of customer-directed delays or reductions in scheduled deliveries, technical requirements, customer activity levels, such as flight hours or aircraft landings, and related variable consideration.

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

aircraft and engine utilization and estimated useful lives of components, among others.

In particular, fixed-price development programs involve significant management judgment, as development contracts by nature have elements that have not been done before and thus, are highly subject to future unexpected cost changes.

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

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(dollars in millions, except per share amounts) 2025 2024

Total net sales $ ( 46 ) $ ( 18 )

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

Income (loss) attributable to common shareowners (1)

Operating profit ( 158 ) ( 162 )

Income attributable to common shareowners (1)

( 125 ) ( 128 )

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

Diluted earnings per share attributable to common shareowners (1)

$ ( 0.09 ) $ ( 0.10 )

1 unchanged sentence

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 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) September 30, 2024 December 31, 2023

(dollars in millions) March 31, 2025 December 31, 2024

Accounts receivable $ 11,751 $ 11,265

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Total contract assets and contract liabilities were as follows:

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

Contract assets $ 14,684 $ 12,139

(dollars in millions) March 31, 2025 December 31, 2024

Contract assets, net $ 15,241 $ 14,570

Contract liabilities ( 19,038 ) ( 18,616 )

Net contract liabilities $ ( 3,797 ) $ ( 4,046 )

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.

Contract assets, net, increased $ 0.7 billion during the quarter ended March 31, 2025 primarily due to sales in excess of billings on certain contracts at Pratt & Whitney.

Contract liabilities increased $ 0.4 billion during the quarter ended March 31, 2025 primarily due to advances received and billings in excess of sales on certain contracts at Pratt & Whitney.

We recognized revenue of $ 3.0 billion during the quarter ended March 31, 2025 related to contract liabilities outstanding as of January 1, 2025 and recognized revenue of $ 2.6 billion during the quarter ended March 31, 2024, related to contract liabilities outstanding as of January 1, 2024.

Contract assets are net of an allowance for expected credit losses of $ 510 million and $ 491 million as of March 31, 2025 and December 31, 2024, respectively.

Inventory, net

Inventory, net consisted of the following:

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

(dollars in millions) March 31, 2025 December 31, 2024

Raw materials $ 4,491 $ 4,164

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Borrowings and Lines of Credit

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.

As of March 31, 2025, 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 March 31, 2025, 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 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)

February 27, 2023 5.000 % notes due 2026

5.150 % notes due 2033

5.375 % notes due 2053

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

As of March 31, 2025, 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 March 31, 2025 and December 31, 2024, we had no commercial paper borrowings outstanding.

There were no new borrowings and no new repayments of commercial paper with maturities greater than 90 days during the quarters ended March 31, 2025 and 2024.

We made the following repayment of long-term debt during the quarter ended March 31, 2024:

Date Description of Notes Aggregate Principal Balance (in millions)

May 7, 2024 3 Month SOFR plus 1.225 % Term Loan due 2025

April 17, 2024 3 Month SOFR plus 1.225 % Term Loan due 2025

April 4, 2024 3 Month SOFR plus 1.225 % Term Loan due 2025

March 15, 2024 3.200 % notes due 2024

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)

3.150 % notes due 2024 (1)

(dollars in millions) March 31, 2025 December 31, 2024

3 Month SOFR plus 1.225 % term loan due 2025

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5.400 % notes due 2035 (1)

(dollars in millions) March 31, 2025 December 31, 2024

6.050 % notes due 2036 (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 September 30, 2024 is approximately 12 years.

The average maturity of our long-term debt as of March 31, 2025 is approximately 12 years.

Employee Benefit Plans

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Contributions to our plans were as follows:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

(dollars in millions) 2025 2024

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Defined contribution plans 401 395

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) September 30, 2024 December 31, 2023

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

(dollars in millions) March 31, 2025 December 31, 2024

Non-current pension assets (included in Other assets) $ 2,130 $ 1,819

Current pension and PRB liabilities (included in Accrued employee compensation) 257 256

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

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

Noncurrent pension liabilities $ 1,613 $ 1,737

Noncurrent PRB liabilities 553 582

(dollars in millions) March 31, 2025 December 31, 2024

Non-current pension liabilities $ 1,493 $ 1,532

Non-current PRB liabilities 502 523

Other pension and PRB related items 65 49

Future pension and postretirement benefit obligations $ 2,060 $ 2,104

The components of net periodic (income) expense for our defined pension and PRB plans were as follows:

Pension Benefits

Quarter Ended September 30,

The components of net periodic income for our defined pension plans were as follows:

Quarter Ended March 31,

(dollars in millions) 2025 2024

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Amortization of prior service credit ( 39 ) ( 43 )

Recognized actuarial net (gain) loss 5 ( 94 ) ( 6 ) ( 8 )

Net settlement, curtailment, and special termination benefit (gain) loss 4 4 — —

Non-service pension income ( 373 ) ( 442 ) ( 1 ) ( 1 )

Total net periodic (income) expense $ ( 326 ) $ ( 386 ) $ — $ —

Pension Benefits

Nine Months Ended September 30,

(dollars in millions) 2024 2023 2024 2023

Operating expense

$ 141 $ 167 $ 3 $ 3

Non-operating expense

Interest cost 1,789 1,880 33 36

Expected return on plan assets ( 2,810 ) ( 2,815 ) ( 15 ) ( 15 )

Amortization of prior service credit ( 127 ) ( 118 ) ( 1 ) —

Recognized actuarial net (gain) loss 15 ( 284 ) ( 18 ) ( 24 )

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

Recognized actuarial net loss 5 5

Net settlement, curtailment, and special termination benefit gain — ( 7 )

Non-service pension income ( 368 ) ( 386 )

Total net periodic (income) expense $ ( 992 ) $ ( 1,164 ) $ 2 $ —

Total net periodic income $ ( 326 ) $ ( 339 )

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

1 unchanged sentence

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

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

(dollars in millions) March 31, 2025 December 31, 2024

Marketable securities held in trusts $ 682 $ 786

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.

Our effective tax rate for the quarter ended March 31, 2025 was 17.0 % as compared to 5.8 % for the quarter ended March 31, 2024.

The effective tax rate for the quarter ended March 31, 2024 included tax benefits of $ 275 million recognized as a result of the conclusion of the examination phases of the RTX and Rockwell Collins Internal Revenue Service (IRS) audits, which was partially offset by the tax cost of $ 143 million associated with the sale of the CIS business.

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 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.

In connection with certain IRS audits, the Company has previously 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 will dispute these adjustments at the Appeals Division of the IRS.

The timing of any resolution at the Appeals Division is uncertain.

Separately, the Company expects the IRS’ examination of RTX’s tax year 2020 to commence in the fourth quarter of 2024.

In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions.

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 $ 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.

On January 15, 2025, the IRS notified the Company of its intent to close the examination of RTX’s 2020 tax year.

The Company is awaiting formal closure of the examination by the IRS.

As a result of an unfavorable decision reached by the Appeals Committee of the Kingdom of Saudi Arabia (KSA) General Services Tax Committee (GSTC), we recognized a Net income charge of $ 27 million during the quarter ended March 31, 2025.

The Company continues to believe the position of the KSA tax authority is not supported by the facts in question or KSA tax law and are pursuing available options to seek reversal of GSTC’s decision.

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 $ 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 present value of the aggregate notional principal of our outstanding foreign currency hedges was $ 18 billion and $ 17 billion at March 31, 2025 and December 31, 2024, respectively.

At March 31, 2025, 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 September 30, 2024 December 31, 2023

(dollars in millions) Balance Sheet Location March 31, 2025 December 31, 2024

Derivatives designated as hedging instruments:

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Other accrued liabilities 41 101

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:

The effect of cash flow hedging relationships on Accumulated other comprehensive loss and on the Condensed Consolidated Statement of Operations in the quarters ended March 31, 2025 and 2024 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.

Cash receipts or payments on derivatives designated as cash flow hedges are recorded in Other operating activities, net within the Condensed Consolidated Statement of Cash Flows.

The Company utilizes the critical terms match method in assessing derivatives for hedge effectiveness.

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

As of December 31, 2024, we had € 320 million of our € 500 million principal value of euro-denominated long-term debt designated as a net investment hedge against our investments in European businesses.

At March 31, 2025, this is no longer designated as a net investment hedge, and the effects have been reflected within Other income, net.

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

Cash receipts or payments related to the settlement of derivatives not designated as hedging instruments are recorded as investing cash flows within the Condensed Consolidated Statement of Cash Flows.

Fair Value Measurements

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:

September 30, 2024

March 31, 2025

(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 September 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 March 31, 2025, 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:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(dollars in millions) Carrying

Value Carrying

Customer financing notes receivable $ 109 $ 104 $ 74 $ 63

Long-term debt (excluding finance leases) $ 41,004 $ 38,342 $ 40,991 $ 37,956

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:

September 30, 2024

March 31, 2025

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

Customer financing notes receivable $ 104 $ — $ 104 $ —

Long-term debt (excluding finance leases) $ 38,342 $ — $ 35,563 $ 2,779

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

Customer financing notes receivable $ 63 $ — $ 63 $ —

Long-term debt (excluding finance leases) $ 37,956 $ — $ 35,180 $ 2,776

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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) September 30, 2024 December 31, 2023

(dollars in millions) March 31, 2025 December 31, 2024

Current assets $ 11,468 $ 10,315

Noncurrent assets 1,066 860

Non-current assets 1,099 1,060

Total assets $ 12,567 $ 11,375

Current liabilities $ 14,493 $ 13,595

Noncurrent liabilities 143 31

Non-current liabilities 132 140

Total liabilities $ 14,625 $ 13,735

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

September 30, 2024 December 31, 2023

As of March 31, 2025 and December 31, 2024, the following financial guarantees were outstanding:

March 31, 2025 December 31, 2024

(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 $ 133 million and $ 135 million at September 30, 2024 and December 31, 2023, respectively.

Collaboration partners’ share of these financing guarantees were $ 129 million and $ 131 million at March 31, 2025 and December 31, 2024, 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 $ 99 million and $ 97 million at September 30, 2024 and December 31, 2023, respectively.

The carrying amount of liabilities related to these obligations was $ 100 million and $ 101 million at March 31, 2025 and December 31, 2024, 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 nine months ended September 30, 2024 and 2023 were as follows:

The changes in the carrying amount of service and product warranties and product performance guarantees for the quarters ended March 31, 2025 and 2024 were as follows:

(dollars in millions) 2025 2024

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Other 2 ( 1 )

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

Balance as of March 31 $ 1,023 $ 1,084

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

As of both March 31, 2025 and December 31, 2024, 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 $ 14.1 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.

We had commercial aerospace financing commitments and other contractual commitments of approximately $ 13.9 billion and $ 14.1 billion as of March 31, 2025 and December 31, 2024, 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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Our financing commitments with customers are contingent upon maintenance of certain levels of financial condition by our customers.

Associated risks on these commitments are mitigated due to the fact that interest rates are variable during the commitment term and are set at the date of funding based on current market conditions, the fair value of the underlying collateral, and the credit worthiness of our customers.

As a result, the fair value of these financing commitments is expected to equal the amounts funded.

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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 September 30, 2024.

The stated values of these letters of credit agreements and surety bonds totaled $ 3.1 billion as of March 31, 2025.

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 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.

At March 31, 2025, the aggregate amount of these agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $ 11.7 billion.

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

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government contracting.

They could also result in deferred prosecution agreements, consent agreements, guilty plea agreements, and/or imposition of an independent compliance monitor.

They could also result in deferred prosecution agreements, administrative orders, consent agreements, guilty plea agreements, and/or imposition of an independent compliance monitor.

government investigations often take years to complete.

In particular, in 2024 the Company entered into a deferred prosecution agreement (DPA) (DPA-1) with the DOJ and the Company settled an administrative proceeding with 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), in connection with certain Middle East contracts since 2012 (Thales-Raytheon Systems and Related Matters).

The 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 (DOJ Investigation and Contract Pricing Disputes).

Under these DPAs and the SEC Administrative Order, Raytheon Company and the Company are required to retain, among other things, 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 the DPAs and the SEC Administrative Order.

In 2024, the Company also 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 (CA) with the Department of State (DOS).

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 International Traffic in Arms Regulations (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.

As noted above, the U.S.

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Our compliance with such local government regulations or any applicable U.S.

government regulations (e.g., Arms Export Control Act (AECA), Export Administration Regulations (EAR), Foreign Corrupt Practices Act (FCPA), and International Traffic in Arms Regulations (ITAR)) may also be investigated or audited.

government regulations (e.g., Arms Export Control Act (AECA), Export Administration Regulations (EAR), Foreign Corrupt Practices Act (FCPA), and ITAR) may also be investigated or audited.

In addition, we accrue for liabilities associated with those matters that are probable and can be reasonably estimated.

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

In making these determinations, we applied the tax law in the relevant jurisdictions to our facts and circumstances and obtained tax rulings from the relevant taxing authorities, tax opinions, and/or other external tax advice related to the concluded tax treatment.

In making these determinations, we applied the tax law in the relevant jurisdictions to our facts and circumstances and obtained tax rulings

from the relevant taxing authorities, tax opinions, and/or other external tax advice related to the concluded tax treatment.

If the completed distributions of Carrier or Otis or certain internal business separation transactions were to fail to qualify for tax-free treatment, the Company could be subject to significant liabilities, and there could be material adverse impacts on the Company’s business, results of operations, financial condition, or liquidity in future reporting periods.

Pratt & Whitney 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 PW1100 GTF fleet, which powers the A320neo.

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

On August 4, 2023, Pratt & Whitney issued a special instruction (SI) to operators of PW1100 GTF powered A320neo aircraft, which required accelerated inspections and engine removals covering an initial subset of operational engines, no later than September 15, 2023.

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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 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.

Consistent with previous information, the actions are resulting in significant incremental shop visits.

As a result of this matter, 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 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.

At March 31, 2025 and December 31, 2024, we had other accrued liabilities of $ 1.4 billion and $ 1.7 billion, respectively, primarily related to expected compensation to customers.

The decrease in the accrual during the quarter ended March 31, 2025 was primarily due to customer compensation in the form of credits issued to customers during the period.

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 ($ 1.2 billion at September 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.

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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 second claim demands payment of $ 1.1 billion plus interest ($ 331 million at March 31, 2025 ).

Pratt & Whitney believes the second claim is without merit and filed an appeal to the ASBCA on October 15, 2024.

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 ($ 190 million at March 31, 2025).

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.

In 2014, Pratt & Whitney filed an appeal to the ASBCA.

In 2014, Pratt & Whitney

filed an appeal to the ASBCA.

An evidentiary hearing was held and completed in June 2019.

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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 ($ 148 million at September 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 ($ 73 million at September 30,

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 ($ 86 million at March 31, 2025).

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

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Thales-Raytheon Systems and Related Matters

As previously disclosed, in 2019, Raytheon Company received a subpoena from the SEC seeking information in connection with an investigation into whether there were improper payments made by Raytheon Company, our joint venture known as Thales-Raytheon Systems (TRS), or anyone acting on their behalf, in connection with TRS or Raytheon Company contracts in certain Middle East countries since 2014.

As previously disclosed, in 2019, Raytheon Company received a subpoena from the SEC seeking information in connection with an investigation into whether there were improper payments made by Raytheon Company, our TRS joint venture, or anyone acting on their behalf, in connection with TRS or Raytheon Company contracts in certain Middle East countries since 2014.

In the first quarter of 2020, the DOJ advised Raytheon Company it had opened a parallel criminal investigation.

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

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.

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 second quarter of 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 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.

If Raytheon Company and the Company fully comply with all of their respective obligations under DPA-1 during its three-year term (commencing on the effective date of DPA-1 and ending three years from the date on which the monitor is engaged), 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.

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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.

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, 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’s 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, the SEC’s Administrative Order, and DPA-2 discussed in “DOJ Investigation and Contract Pricing Disputes” below.

During the fourth quarter of 2024, the Company paid $ 384 million in the aggregate for DPA-1 and the SEC's Administrative Order which was consistent with amounts accrued.

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

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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 involved multi-year contracts subject to governmental regulation, including 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.

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.

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 second quarter of 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 FCA.

On October 16, 2024, Raytheon Company entered into DPA-2 and the 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.

If Raytheon Company and the Company fully comply with all of their respective obligations in DPA-2 during its three-year term (commencing on the effective date of DPA-1 and ending three years from the date on which the monitor is engaged), 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 $ 433 million, 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, 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’s 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-2 as well as DPA-1 and the SEC Administrative Order discussed in “Thales-Raytheon Systems and Related Matters” above.

During the fourth quarter of 2024, the Company paid $ 580 million in the aggregate for DPA-2 and the FCA Settlement Agreement which was consistent with amounts accrued plus interest.

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

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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.

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.

On August 29, 2024, the Company entered into a 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.

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(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;

(ii) the appointment of an external Special Compliance Officer (SCO) 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.

The $ 100 million portion of the settlement that is not subject to suspension, which was accrued by the Company in the second quarter of 2024, will be paid in installments, with $ 34 million paid in September 2024, $ 33 million due by August 29, 2025, and $ 33 million due 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 have accrued $ 251 million in the aggregate as of March 31, 2025 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.

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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.

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.

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

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

We continue to believe that the lawsuit lacks merit.

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Civil Litigation Related to Employee Hiring Practices

Pratt & Whitney is one of multiple defendants in a putative class action lawsuit pending in the United States District Court for the District of Connecticut alleging that Pratt & Whitney and the other defendants agreed to restrict the hiring and recruiting of certain engineers and skilled laborers in a manner that violated federal antitrust laws.

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.

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.

Pratt & Whitney is one of multiple defendants in a class action lawsuit pending in the United States District Court for the District of Connecticut alleging that Pratt & Whitney and the other defendants agreed to restrict the hiring and recruiting of certain engineers and skilled laborers in a manner that violated federal antitrust laws.

As of December 2024, all defendants, including Pratt & Whitney, reached a settlement with class counsel.

The Court has preliminarily approved the settlement, and we expect the Court will grant final approval of the settlement in 2025.

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.

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.

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.

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.

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.

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We do not believe that these matters will have a material adverse effect upon our results of operations, financial condition, or liquidity.

Common Stock - Share Repurchases.

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 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 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 nine months ended September 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 ended March 31, 2025 and 2024 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 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

Amounts reclassified, pre-tax — ( 44 ) 14 ( 30 )

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

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

Nine Months Ended September 30, 2024

Quarter Ended March 31, 2025

Balance at December 31, 2024 $ ( 949 ) $ ( 2,679 ) $ ( 127 ) $ ( 3,755 )

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Tax benefit (expense) 1 9 ( 30 ) ( 20 )

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

Balance at March 31, 2025 $ ( 449 ) $ ( 2,745 ) $ ( 13 ) $ ( 3,207 )

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

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 )

Amounts reclassified, pre-tax — ( 141 ) 9 ( 132 )

Tax benefit (expense) ( 3 ) 33 24 54

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

Nine Months Ended September 30, 2023

Quarter Ended March 31, 2024

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

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Tax benefit (expense) ( 1 ) 12 18 29

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

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

Segment Financial Data

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Our segments are generally based on the management structure of the businesses and the grouping of similar operating companies, where each management organization has general operating autonomy over diversified products and services.

RTX’s chief operating decision maker (CODM) is our President and Chief Executive Officer.

The CODM uses segment operating profit as a profitability measure to assess actual and forecasted segment performance to make decisions regarding incentive compensation and the allocation of capital and other investments.

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.

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

We present a FAS/CAS operating adjustment outside of segment results, which represents the difference between the service cost component of our pension and PRB expense under the Financial Accounting Standards (FAS) requirements of U.S.

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

Over time, we generally expect to recover the related Raytheon

pension and PRB liabilities through the pricing of our products and services to the U.S.

Over time, we generally expect to recover the related Raytheon pension and PRB liabilities through the pricing of our products and services to the U.S.

Collins and Pratt & Whitney generally record pension and PRB expense on a FAS basis .

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

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 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

Results for the quarters ended March 31, 2025 and 2024 are as follows:

(dollars in millions) Net Sales Research and Development Other Segment Items (1)

Operating Profit Operating Profit Margin

Collins Aerospace $ 7,217 $ ( 313 ) $ ( 5,816 ) $ 1,088 15.1 %

Pratt & Whitney 7,366 ( 229 ) ( 6,557 ) 580 7.9 %

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

Raytheon 6,340 ( 98 ) ( 5,564 ) 678 10.7 %

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Eliminations and other (2)

( 611 ) ( 563 ) ( 14 ) ( 69 )

Corporate expenses and other unallocated items — ( 38 )

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Consolidated $ 20,306 $ 2,035 10.0 %

(1) Includes Cost of sales, Selling, general, and administrative expenses, and Other income, net.

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

(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

(dollars in millions) Net Sales Research and Development Other Segment Items (1)

Operating Profit Operating Profit Margin

Collins Aerospace $ 6,673 $ ( 313 ) $ ( 5,511 ) $ 849 12.7 %

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6,659 ( 89 ) ( 5,574 ) 996 15.0 %

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

Total segment 19,788 $ ( 671 ) $ ( 16,860 ) 2,257 11.4 %

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Corporate expenses and other unallocated items — ( 96 )

— — ( 926 ) ( 165 )

FAS/CAS operating adjustment — 214

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Consolidated $ 19,305 $ 1,870 9.7 %

(1) Includes Cost of sales, Selling, general, and administrative expenses, and Other income, net.

(2) 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.

Changes in Contract Estimates at Completion” and “Note 2:

Acquisitions and Dispositions,” respectively, for additional information.

(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.

(3) Operating profit includes a $ 0.4 billion gain, net of transaction and other related costs, related to the sale of the CIS business.

Acquisitions and Dispositions” for additional information.

Capital Expenditures and Depreciation & Amortization segment information for the quarters ended March 31, 2025 and 2024 are as follows:

Capital Expenditures Depreciation & Amortization

(dollars in millions) 2025 2024 2025 2024

Collins Aerospace $ 112 $ 125 $ 217 $ 203

Pratt & Whitney 153 139 194 193

Raytheon 225 191 131 127

Total segment 490 455 542 523

Corporate, eliminations, and other 23 12 21 18

Acquisition accounting adjustments 489 518

Consolidated $ 513 $ 467 $ 1,052 $ 1,059

Total assets by segment are as follows:

(dollars in millions) March 31, 2025 December 31, 2024

Collins Aerospace (1)

$ 73,105 $ 72,372

Pratt & Whitney (1)

46,248 44,307

44,681 44,936

Total segment 164,034 161,615

Corporate, eliminations, and other 830 1,246

Consolidated $ 164,864 $ 162,861

(1) Total assets include acquired intangible assets and the property, plant, and equipment fair value adjustment.

Related amortization expense is included in Acquisition accounting adjustments.

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

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

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

Segment sales disaggregated by geographic region based on customer location for the quarters ended March 31, 2025 and 2024 are as follows:

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

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Other regions 444 692 51 — 1,187 361 444 30 — 835

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

Consolidated net sales 6,587 7,365 6,300 54 20,306 6,169 6,456 6,630 50 19,305

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Business segment sales $ 7,217 $ 7,366 $ 6,340 $ ( 617 ) $ 20,306 $ 6,673 $ 6,456 $ 6,659 $ ( 483 ) $ 19,305

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

Segment sales disaggregated by type of customer for the quarters ended March 31, 2025 and 2024 are as follows:

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

United States $ 10,128 $ 9,629 $ 14,511 $ 129 $ 34,397 $ 9,657 $ 8,327 $ 14,865 $ 81 $ 32,930

Europe 4,871 4,612 2,056 3 11,542 4,580 3,998 1,209 3 9,790

Asia Pacific 2,296 3,977 1,603 1 7,877 1,864 3,068 1,640 1 6,573

Middle East and North Africa 612 489 1,167 — 2,268 531 382 1,525 — 2,438

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

Inter-segment sales 1,709 1 108 ( 1,818 ) — 1,451 1 94 ( 1,546 ) —

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 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.

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

(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.

government (1)

$ 4,951 $ 4,664 $ 14,432 $ 128 $ 24,175 $ 4,670 $ 3,774 $ 14,670 $ 79 $ 23,193

Foreign military sales through the U.S.

government 248 1,129 2,643 — 4,020 226 1,158 2,436 — 3,820

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

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

Inter-segment sales 1,709 1 108 ( 1,818 ) — 1,451 1 94 ( 1,546 ) —

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

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

(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

Services 1,429 3,120 823 9 5,381 1,338 2,412 1,103 ( 4 ) 4,849

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

Inter-segment sales 622 — 39 ( 661 ) — 530 — 30 ( 560 ) —

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

(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

Segment sales disaggregated by sales type for the quarters ended March 31, 2025 and 2024 are as follows:

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

Products $ 5,110 $ 4,032 $ 5,406 $ 43 $ 14,591 $ 4,833 $ 3,957 $ 5,467 $ 46 $ 14,303

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Business segment sales $ 7,217 $ 7,366 $ 6,340 $ ( 617 ) $ 20,306 $ 6,673 $ 6,456 $ 6,659 $ ( 483 ) $ 19,305

(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

Fixed-price $ 3,409 $ 2,997

Cost-type 2,938 3,445

Consolidated net sales 6,347 6,442

Inter-segment sales 39 30

Business segment sales $ 6,386 $ 6,472

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

Raytheon segment sales disaggregated by contract type for the quarters ended March 31, 2025 and 2024 are as follows:

(dollars in millions) 2025 2024

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

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.

Total RPO was approximately $ 217 billion as of March 31, 2025.

Of the total RPO as of March 31, 2025, 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.

Accounting Pronouncements

In March 2024, the SEC issued the final rule under SEC Release Nos.

33-11275 and 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors, requiring public companies to provide certain climate-related information in their registration statements and annual reports.

The final rules will require information about a company’s climate-related risks that have materially impacted or are reasonably likely to have a material impact on its business strategy, results of operations, or financial condition, and the actual and potential material impacts of any identified climate-related risks on the company’s strategy, business model, and outlook, as well as relating to assessment, management, oversight, and mitigation of such material risks, material climate-related targets and goals, and material greenhouse gas emissions.

Additionally, certain disclosures related to severe weather events and other natural conditions will be required in the audited financial statements.

The first phase of the final rule is effective for fiscal years beginning in 2025.

Disclosure for prior periods is only required if it was previously disclosed in an SEC filing.

On April 4, 2024, the SEC voluntarily stayed implementation of the final rule to facilitate the orderly judicial resolution of pending legal challenges to the rule.

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Disaggregation of Income Statement Expenses, which requires a tabular disclosure of the amounts of specified natural expense categories included in each relevant expense caption.

Additionally, ASU 2024-03 requires the disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The new standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on a prospective basis.

Early adoption is permitted.

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

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740):

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, to enhance income tax reporting disclosures and require disclosure of specific categories in the tabular rate reconciliation.

The new standard is effective for fiscal years beginning after December 15, 2024, on a prospective basis.

Early adoption and retrospective application are permitted.

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

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which expands the segment reporting disclosures and requires disclosure of segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, amounts and description of its composition for other segment items, and interim disclosure of a reportable segment’s profit or loss and assets.

Additionally, the amendments require the disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing performance and deciding how to allocate resources.

The new standard is effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis.

Early adoption is permitted.

Early adoption and

retrospective application are permitted.

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

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.

Other new pronouncements issued but not effective until after March 31, 2025 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 ended March 31, 2025 and 2024, PricewaterhouseCoopers LLP (PwC) reported that it has applied limited procedures in accordance with professional standards for a review of such information.

However, its report dated April 22, 2025, appearing below, states that the firm did not audit and does not express an opinion on that unaudited condensed consolidated financial information.

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

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Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheet of 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”).

We have reviewed the accompanying condensed consolidated balance sheet of RTX Corporation and its subsidiaries (the “Company”) as of March 31, 2025, and the related condensed consolidated statements of operations, of comprehensive income, of changes in equity, and of cash flows for the three-month periods ended March 31, 2025 and 2024, including the related notes (collectively referred to as the “interim financial information”).

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

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Boston, Massachusetts

October 22, 2024

April 22, 2025

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