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Item 1. Financial Statements

2025-10-21 compared with 2025-07-22 · 188 added, 160 removed, 856 unchanged (29% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

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

23 unchanged sentences

See accompanying Notes to Condensed Consolidated Financial Statements

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RTX CORPORATION

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

(dollars in millions) 2025 2024 2025 2024

11 unchanged sentences

See accompanying Notes to Condensed Consolidated Financial Statements

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RTX CORPORATION

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEET

(dollars in millions) June 30, 2025 December 31, 2024

(dollars in millions) September 30, 2025 December 31, 2024

Current Assets

40 unchanged sentences

See accompanying Notes to Condensed Consolidated Financial Statements

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RTX CORPORATION

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(dollars in millions) 2025 2024

3 unchanged sentences

Depreciation and amortization 3,219 3,225

Deferred income tax provision 121 185

Deferred income tax provision (benefit) 598 ( 119 )

Stock compensation cost 337 328

1 unchanged sentence

Share-based 401(k) matching contributions 435 215

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

Gain on sale of Cybersecurity, Intelligence and Services (CIS) business, net of transaction costs

Accounts receivable ( 1,488 ) 936

10 unchanged sentences

Increase in other intangible assets ( 347 ) ( 447 )

Receipts (payments) from settlements of derivative contracts, net 145 ( 29 )

Receipts from settlements of derivative contracts, net 187 3

Other investing activities, net ( 87 ) ( 38 )

2 unchanged sentences

Repayment of long-term debt ( 2,289 ) ( 1,700 )

Change in commercial paper, net (Note 9) 1,432 —

Change in other short-term borrowings, net 6 31

4 unchanged sentences

Effect of foreign exchange rate changes on cash and cash equivalents 44 11

Net decrease in cash, cash equivalents, and restricted cash ( 779 ) ( 568 )

Net increase in cash, cash equivalents, and restricted cash 398 105

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

3 unchanged sentences

See accompanying Notes to Condensed Consolidated Financial Statements

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RTX CORPORATION

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

(dollars in millions, except per share amounts;

23 unchanged sentences

Beginning balance ( 2,391 ) ( 2,718 ) ( 3,755 ) ( 2,419 )

Other comprehensive income (loss), net of tax 816 ( 83 ) 1,364 ( 299 )

Other comprehensive income, net of tax ( 41 ) 749 1,323 450

Ending balance ( 2,432 ) ( 1,969 ) ( 2,432 ) ( 1,969 )

4 unchanged sentences

Dividends attributable to noncontrolling interest ( 49 ) ( 28 ) ( 160 ) ( 69 )

Other — 14 — 14

Ending balance 1,845 1,712 1,845 1,712

Equity at June 30

Equity at September 30

$ 66,359 $ 62,826 $ 66,359 $ 62,826

5 unchanged sentences

See accompanying Notes to Condensed Consolidated Financial Statements

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RTX CORPORATION

2 unchanged sentences

Basis of Presentation

The Condensed Consolidated Financial Statements at June 30, 2025 and for the quarters and six months ended June 30, 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 Condensed Consolidated Financial Statements at September 30, 2025 and for the quarters and nine months ended September 30, 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.

6 unchanged sentences

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 and six months ended June 30, 2025 and 2024 with respect to Raytheon, we are referring to their June 29, 2025 and June 30, 2024 fiscal quarter ends, respectively.

Throughout this Form 10-Q, when we refer to the quarters and nine months ended September 30, 2025 and 2024 with respect to Raytheon, we are referring to their September 28, 2025 and September 29, 2024 fiscal quarter ends, respectively.

Legal Matters.

3 unchanged sentences

Dispositions.

On June 30, 2025, we entered into a definitive agreement to sell the Simmonds Precision Products business within our Collins segment for approximately $ 0.8 billion in cash.

The closing of this transaction is subject to required 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 (expense), 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.

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

At June 30, 2025, assets of approximately $ 1.6 billion and liabilities of approximately $ 0.6 billion are held for sale.

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.

We completed the sale of this business for gross proceeds of $ 1.8 billion on July 21, 2025.

On July 21, 2025, we completed the previously announced sale of the actuation and flight control business within our Collins segment for gross proceeds of $ 1.8 billion.

Cash received of $ 1.6 billion, net of cash transferred, included amounts attributable to continuing service agreements supporting the buyer post-closing.

The sale resulted in a pre-tax gain of $ 0.1 billion, which was recorded in Other income (expense), net within the Condensed Consolidated Statement of Operations.

On June 30, 2025, we entered into a definitive agreement to sell the Simmonds Precision Products business within our Collins segment for approximately $ 0.8 billion in gross proceeds.

The sale of this business was completed on October 6, 2025.

On March 29, 2024, we completed the sale of the 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.

Goodwill and Intangible Assets

Changes in our goodwill balances for the six months ended June 30, 2025 were as follows:

(dollars in millions) Balance as of December 31, 2024 Acquisitions and Divestitures Foreign Currency Translation and Other Balance as of June 30, 2025

Changes in our goodwill balances for the nine months ended September 30, 2025 were as follows:

(dollars in millions) Balance as of December 31, 2024 Acquisitions and Divestitures Foreign Currency Translation and Other Balance as of September 30, 2025

Collins Aerospace (1)

5 unchanged sentences

Total $ 52,789 $ ( 256 ) $ 778 $ 53,311

(1) The reduction in Acquisitions and Divestitures includes the reclassification of goodwill to held for sale and presented in Other assets within the Condensed Consolidated Balance Sheet.

(1) The reduction related to Acquisitions and Divestitures includes the reclassification of goodwill to assets held for sale and presented in Other assets within the Condensed Consolidated Balance Sheet.

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Intangible Assets.

Identifiable intangible assets are comprised of the following:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

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

7 unchanged sentences

Total $ 49,070 $ ( 16,810 ) $ 48,899 $ ( 15,456 )

Amortization of intangible assets for the quarters and six months ended June 30, 2025 and 2024 was $ 508 million and $ 1,009 million and $ 534 million and $ 1,060 million, respectively.

Amortization of intangible assets for the quarters and nine months ended September 30, 2025 and 2024 was $ 520 million and $ 1,529 million and $ 560 million and $ 1,620 million, respectively.

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

2 unchanged sentences

Earnings Per Share

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

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

8 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.

For the quarter and six months ended June 30, 2025, the number of stock awards excluded from the computation was 1.8 million and 2.5 million, respectively.

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

For the quarter and nine months ended September 30, 2025, the number of stock awards excluded from the computation was 0.7 million and 1.9 million, respectively.

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.

Changes in Contract Estimates at Completion

4 unchanged sentences

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.

Management must make assumptions and estimates regarding contract revenues and costs, including estimates of labor productivity and availability, the complexity

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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.

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.

6 unchanged sentences

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

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

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

7 unchanged sentences

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

In addition to the amounts included in the table above, during the quarter ended June 30, 2024, Raytheon initiated the termination of a fixed price development contract with a foreign customer, herein referred to as “Raytheon Contract Termination.” As a result of this action, Raytheon recognized a $ 0.6 billion charge related to the estimated impact of this termination.

In addition to the amounts included in the table above, during the nine months ended September 30, 2024, Raytheon initiated the termination of a fixed price development contract with a foreign customer, herein referred to as “Raytheon Contract Termination.” As a result of this action, Raytheon recognized a $ 0.6 billion charge related to the estimated impact of this termination.

This charge included the write-off of remaining contract assets and the estimated settlement with the customer.

2 unchanged sentences

Accounts receivable, net consisted of the following:

(dollars in millions) June 30, 2025 December 31, 2024

(dollars in millions) September 30, 2025 December 31, 2024

Accounts receivable $ 13,177 $ 11,265

6 unchanged sentences

Total contract assets and contract liabilities were as follows:

(dollars in millions) June 30, 2025 December 31, 2024

(dollars in millions) September 30, 2025 December 31, 2024

Contract assets, net $ 16,604 $ 14,570

1 unchanged sentence

Net contract liabilities $ ( 3,507 ) $ ( 4,046 )

Contract assets, net, increased $ 1.1 billion during the six months ended June 30, 2025 primarily due to sales in excess of billings on certain contracts at Pratt & Whitney, partially offset by an increase in the allowance for expected credit losses due to a customer bankruptcy recorded at Pratt & Whitney in the second quarter of 2025.

Contract liabilities increased $ 0.6 billion during the six months ended June 30, 2025 primarily due to advances received and billings in excess of sales on certain contracts at Pratt & Whitney.

We recognized revenue of $ 2.0 billion and $ 5.0 billion during the quarter and six months ended June 30, 2025 related to contract liabilities outstanding as of January 1, 2025 and recognized revenue of $ 1.8 billion and $ 4.4 billion during the quarter and six months ended June 30, 2024, related to contract liabilities outstanding as of January 1, 2024.

Contract assets are net of an allowance for expected credit losses of $ 0.7 billion and $ 0.5 billion as of June 30, 2025 and December 31, 2024, respectively.

The increase in allowance for expected credit losses as of June 30, 2025 as compared to December 31, 2024 was primarily related to an increase in reserves as a result of a customer bankruptcy recorded at Pratt & Whitney in the quarter ended June 30, 2025.

Contract assets, net, increased $ 2.0 billion during the nine months ended September 30, 2025 primarily due to sales in excess of billings on certain contracts at Pratt & Whitney, partially offset by an increase in the allowance for expected credit losses due to a customer bankruptcy recorded at Pratt & Whitney in the second quarter of 2025.

Contract liabilities increased $ 1.5 billion

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during the nine months ended September 30, 2025 primarily due to advances received and billings in excess of sales on certain contracts at Pratt & Whitney.

We recognized revenue of $ 1.5 billion and $ 6.5 billion during the quarter and nine months ended September 30, 2025 related to contract liabilities outstanding as of January 1, 2025 and recognized revenue of $ 1.3 billion and $ 5.7 billion during the quarter and nine months ended September 30, 2024, related to contract liabilities outstanding as of January 1, 2024.

Contract assets are net of an allowance for expected credit losses of $ 0.7 billion and $ 0.5 billion as of September 30, 2025 and December 31, 2024, respectively.

The increase in allowance for expected credit losses as of September 30, 2025 as compared to December 31, 2024 was primarily related to an increase in reserves as a result of a customer bankruptcy recorded at Pratt & Whitney in the second quarter of 2025.

Inventory, net

Inventory, net consisted of the following:

(dollars in millions) June 30, 2025 December 31, 2024

(dollars in millions) September 30, 2025 December 31, 2024

Raw materials $ 4,617 $ 4,164

3 unchanged sentences

Borrowings and Lines of Credit

As of June 30, 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 June 30, 2025, there were no borrowings outstanding under this agreement.

As of September 30, 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 September 30, 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.

At December 31, 2024, we had no commercial paper borrowings outstanding.

As of June 30, 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 June 30, 2025 we had $ 1.4 billion of commercial paper borrowings outstanding.

At June 30, 2025, short-term commercial paper borrowings outstanding had a weighted-average interest rate of 4.7 %.

There were no new borrowings and no new repayments of commercial paper with maturities greater than 90 days during the six months ended June 30, 2025 and 2024.

We made the following repayments of long-term debt during the six months ended June 30, 2025 and 2024:

As of September 30, 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 September 30, 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 nine months ended September 30, 2025 and 2024.

We made the following repayments of long-term debt during the nine months ended September 30, 2025 and 2024:

Date Description of Notes Aggregate Principal Balance (in millions)

August 18, 2025 3.950 % notes due 2025

May 7, 2025 3 Month SOFR plus 1.225 % term loan due 2025

4 unchanged sentences

Long-term debt consisted of the following:

(dollars in millions) June 30, 2025 December 31, 2024

(dollars in millions) September 30, 2025 December 31, 2024

3 Month SOFR plus 1.225 % term loan due 2025

6 unchanged sentences

3.500 % notes due 2027 (1)

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(dollars in millions) September 30, 2025 December 31, 2024

7.200 % notes due 2027 (1)

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3.750 % notes due 2046 (1)

(dollars in millions) June 30, 2025 December 31, 2024

4.050 % notes due 2047 (1)

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

The average maturity of our long-term debt as of June 30, 2025 is approximately 12 years.

The average maturity of our long-term debt as of September 30, 2025 is approximately 12 years.

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Employee Benefit Plans

2 unchanged sentences

Contributions to our plans were as follows:

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

(dollars in millions) 2025 2024 2025 2024

4 unchanged sentences

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

(dollars in millions) June 30, 2025 December 31, 2024

(dollars in millions) September 30, 2025 December 31, 2024

Non-current pension assets (included in Other assets) $ 2,659 $ 1,819

2 unchanged sentences

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

(dollars in millions) June 30, 2025 December 31, 2024

(dollars in millions) September 30, 2025 December 31, 2024

Non-current pension liabilities $ 1,434 $ 1,532

3 unchanged sentences

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

Quarter Ended June 30,

Six Months Ended June 30,

Quarter Ended September 30,

Nine Months Ended September 30,

(dollars in millions) 2025 2024 2025 2024

6 unchanged sentences

Recognized actuarial net loss 5 5 15 15

Net settlement, curtailment, and special termination benefit (gain) loss 14 3 14 ( 4 )

Net settlement, curtailment, and special termination benefit loss — 4 14 —

Non-service pension income ( 362 ) ( 373 ) ( 1,082 ) ( 1,133 )

3 unchanged sentences

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

(dollars in millions) June 30, 2025 December 31, 2024

(dollars in millions) September 30, 2025 December 31, 2024

Marketable securities held in trusts $ 713 $ 786

Our effective tax rate for the quarter and six months ended June 30, 2025 was 15.4 % and 16.2 %, respectively, as compared to 59.1 % and 15.8 % for the quarter and six months ended June 30, 2024.

The effective tax rate for the quarter ended June 30, 2025 includes a tax benefit of $ 33 million associated with the conclusion of the Internal Revenue Service (IRS) examination of RTX’s 2020 tax year.

The effective tax rate for the quarter ended June 30, 2024 includes the impact of the $ 918 million charge associated with the Resolution of Certain Legal Matters where no related tax benefit was recorded in the quarter.

The effective tax rate for the six months ended June 30, 2025 and June 30, 2024 are relatively consistent.

However, the effective tax rate for the six months ended June 30, 2025 includes the impact from the IRS examination noted above and the effective tax rate for the six months ended June 30, 2024 includes a $ 275 million tax benefit recognized from the conclusion of the examination phases of the RTX and Rockwell Collins audits, a $ 143 million tax cost associated with the sale of the CIS business, and the impact of the $ 918 million charge associated with the Resolution of Certain Legal Matters.

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Our effective tax rate for the quarter and nine months ended September 30, 2025 was 17.7 % and 16.8 %, respectively, as compared to 19.5 % and 17.5 % for the quarter and nine months ended September 30, 2024, respectively.

The lower effective tax rate for the quarter ended September 30, 2025 compared to September 30, 2024 was primarily driven by the absence of a $ 0.2 billion tax charge related to U.S.

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

tax ruling Otis received in the quarter ending September 30, 2024 impacting pre-separation tax years.

The lower effective tax rate also included additional tax expense in the quarter ended September 30, 2025 due to the sale of the Collins actuation and flight control business and higher taxes for 2025, principally driven by the enactment of “An Act to Provide for Reconciliation Pursuant to Title II of the H.

14” on July 4, 2025.

Both periods also included tax benefits associated with certain legal entity reorganizations.

The effective tax rates for the nine months ended September 30, 2025 and 2024 were relatively consistent.

In addition to the items noted above, the effective tax rate for the nine months ended September 30, 2024 included a $ 0.3 billion benefit from the impact of the conclusion of the examination phases of the RTX and Rockwell Collins audits, that was more than offset by an unfavorable impact for the tax cost associated with the sale of the CIS business and the impact of the Resolution of Certain Legal Matters accrued during the second quarter of 2024, in which no tax benefit was recorded.

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

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income tax examinations for years before 2014.

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.

In connection with certain Internal Revenue Service (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 is in the process of disputing these adjustments at the Appeals Division of the IRS.

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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 $ 21 billion and $ 17 billion at June 30, 2025 and December 31, 2024, respectively.

The present value of the aggregate notional principal of our outstanding foreign currency hedges was $ 24 billion and $ 17 billion at September 30, 2025 and December 31, 2024, respectively.

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

(dollars in millions) Balance Sheet Location June 30, 2025 December 31, 2024

(dollars in millions) Balance Sheet Location September 30, 2025 December 31, 2024

Derivatives designated as hedging instruments:

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Other accrued liabilities 68 101

At June 30, 2025, all derivative contracts accounted for as cash flow hedges will m ature by May 2036.

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At September 30, 2025, all derivative contracts accounted for as cash flow hedges will m ature by May 2036.

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.

1 unchanged sentence

Gains or losses attributable to cash flow hedging contract activity are primarily recorded as a component of Products sales when reclassified from Accumulated other comprehensive loss.

During the quarter ended June 30, 2025, the Company entered into forward exchange contracts to partially hedge its net investment in certain foreign subsidiaries denominated in EUR and CAD.

The Company has entered into forward exchange contracts to partially hedge its net investment in certain foreign subsidiaries denominated in EUR and CAD.

The Company assesses the effectiveness of its net investment hedges using the spot method.

1 unchanged sentence

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 was no longer designated as a net investment hedge.

For the quarter and six months ended June 30, 2025, the effects are reflected within Other income (expense), net.

The effect of cash flow hedging and net investment hedging relationships on Accumulated other comprehensive loss and on the Condensed Consolidated Statement of Operations in the quarters and six months ended June 30, 2025 and 2024 are presented in “Note 17:

At March 31, 2025, this was no longer designated as a net investment hedge and subsequent effects are reflected within Other income (expense), net.

The effect of cash flow hedging and net investment hedging relationships on Accumulated other comprehensive loss and on the Condensed Consolidated Statement of Operations in the quarters and nine months ended September 30, 2025 and 2024 are presented in “Note 17:

Equity.” The hedged items and derivatives designated as hedging instruments are highly effective.

3 unchanged sentences

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

June 30, 2025

September 30, 2025

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

11 unchanged sentences

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

As of June 30, 2025, there has not been any significant impact to the fair value of our derivative liabilities due to our own credit risk.

As of September 30, 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:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(dollars in millions) Carrying

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Long-term debt (excluding finance leases) $ 38,766 $ 36,854 $ 40,991 $ 37,956

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

June 30, 2025

September 30, 2025

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

3 unchanged sentences

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

The fair value of our Short-term borrowings approximates the carrying value due to their short-term nature, with commercial paper classified as level 2 and other short-term borrowings classified as level 3 within the fair value hierarchy.

The fair value of our Short-term borrowings approximates the carrying value due to their short-term nature and is classified as level 3 within the fair value hierarchy.

Variable Interest Entities

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Other collaborators participate in Pratt & Whitney’s program share interest in IAE and IAE LLC.

Pratt & Whitney’s net program share interest in

IAE and IAE LLC, after considering its sub-collaborator share, is 57 % and 51 %, respectively.

Pratt & Whitney’s net program share interest in IAE and IAE LLC, after considering its sub-collaborator share, is 57 % and 51 %, respectively.

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

(dollars in millions) June 30, 2025 December 31, 2024

(dollars in millions) September 30, 2025 December 31, 2024

Current assets $ 13,240 $ 10,315

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

As of June 30, 2025 and December 31, 2024, the following financial guarantees were outstanding:

June 30, 2025 December 31, 2024

As of September 30, 2025 and December 31, 2024, the following financial guarantees were outstanding:

September 30, 2025 December 31, 2024

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

3 unchanged sentences

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 was $ 0.1 billion at June 30, 2025 and December 31, 2024.

Collaboration partners’ share of these financing guarantees was $ 0.1 billion at September 30, 2025 and December 31, 2024.

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

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

The carrying amount of liabilities related to these obligations was $ 0.1 billion at June 30, 2025 and December 31, 2024.

The maximum potential

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

The carrying amount of liabilities related to these obligations was $ 0.1 billion at September 30, 2025 and December 31, 2024.

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

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

The changes in the carrying amount of service and product warranties and product performance guarantees for the six months ended June 30, 2025 and 2024 were as follows:

The changes in the carrying amount of service and product warranties and product performance guarantees for the nine months ended September 30, 2025 and 2024 were as follows:

(dollars in millions) 2025 2024

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Other 6 ( 28 )

Balance as of June 30 $ 1,044 $ 1,068

Balance as of September 30 $ 1,010 $ 1,042

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 June 30, 2025 and December 31, 2024, we had $ 0.8 billion reserved for environmental remediation.

As of both September 30, 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 $ 13.6 billion and $ 14.1 billion as of June 30, 2025 and December 31, 2024, respectively, on a gross basis before reduction for our collaboration partners’ share.

We had commercial aerospace financing commitments and other contractual commitments of approximately $ 13.3 billion and $ 14.1 billion as of September 30, 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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The majority of financing commitments are collateralized arrangements.

We may also lease aircraft and subsequently sublease the aircraft to customers under long-term non-cancelable operating leases, or pay deposits on behalf of our customers to secure production slots with the airframers (pre-delivery payments).

We may also pay deposits on behalf of our customers to secure production slots with the airframers (pre-delivery payments).

Our financing commitments with customers are contingent upon maintenance of certain levels of financial condition by our customers.

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We have entered into certain collaboration arrangements, which may include participation by our collaboration partners in these commitments.

In addition, in connection with our 2012 agreement to acquire Rolls-Royce’s ownership and collaboration interests in IAE, additional payments are due to Rolls-Royce contingent upon each hour flown through June 2027 by the V2500-powered aircraft in service as of the acquisition date.

In addition, in connection with our 2012 agreement to acquire Rolls-Royce’s ownership and collaboration interests in IAE, additional payments are due to Rolls-Royce contingent

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upon each hour flown through June 2027 by the V2500-powered aircraft in service as of the acquisition date.

These flight hour payments are capitalized as collaboration intangible assets as payments are made.

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We have entered into standby letters of credit and surety bonds with financial institutions to meet various bid, performance, warranty, retention, guarantee, and advance payment obligations for us or our affiliates.

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 $ 3.9 billion as of June 30, 2025.

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

The stated values of these letters of credit agreements and surety bonds totaled $ 4.1 billion as of September 30, 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 June 30, 2025, the aggregate amount of these agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $ 11.5 billion.

At September 30, 2025, the aggregate amount of these agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $ 11.5 billion.

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

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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, which has a three-year term, requires the Company to

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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).

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

At June 30, 2025 and December 31, 2024, we had other accrued liabilities of $ 1.1 billion and $ 1.7 billion, respectively, primarily related to expected compensation to customers.

The decrease in the accrual during the six months ended June 30, 2025 was primarily due to customer compensation in the form of credits issued to customers during the period.

At September 30, 2025 and December 31, 2024, we had other accrued liabilities of $ 0.9 billion and $ 1.7 billion, respectively, primarily related to expected

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compensation to customers.

The decrease in the accrual during the nine months ended September 30, 2025 was primarily due to customer compensation in the form of credits issued and cash paid 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 ($ 1.4 billion at June 30, 2025).

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 ($ 356 million at June 30, 2025 ).

The second claim demands payment of $ 1.1 billion plus interest ($ 383 million at September 30, 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 ($ 196 million at June 30, 2025).

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 ($ 203 million at September 30, 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.

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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 ($ 171 million at June 30, 2025).

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 ($ 92 million at June 30, 2025).

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 ($ 99 million at September 30, 2025).

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

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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.

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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 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.

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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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Trade Compliance Matters

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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 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.

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 paid in August 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 June 30, 2025 for these matters and the matters being resolved pursuant to the CA.

We have accrued $ 218 million in the aggregate as of September 30, 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.

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

UTC Equity Conversion Litigation

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

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 May 28, 2025, the Delaware Supreme Court affirmed the dismissal, concluding the case in the Company’s favor.

Civil Litigation Related to Employee Hiring Practices

Pratt & Whitney was 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 granted final approval of the settlement in May 2025.

The case is now concluded.

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 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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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.

The lawsuits were consolidated, and on September 12, 2025, the Court granted the defendants’ motion to dismiss the consolidated case.

On October 14, 2025, plaintiffs filed a Notice of Appeal to the United States Court of Appeals for the Second Circuit.

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

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

On November 7, 2023, January 30, 2024, and May 21, 2024, the Company received subpoenas from the SEC seeking engineering, operational, organizational, accounting, and financial documents in connection with an investigation relating to the Company’s disclosures in 2023 of issues arising from Pratt & Whitney’s use of powder metal in manufacturing various engine parts, its identification of certain risks associated with those manufacturing processes, and corrective actions identified by Pratt & Whitney to mitigate those risks.

The Company is cooperating with the SEC and is responding to the subpoenas.

The Company has received subpoenas from the SEC seeking engineering, operational, organizational, accounting, and financial documents and witness testimony in connection with an investigation relating to the Company’s disclosures in 2023 of issues arising from Pratt & Whitney’s use of powder metal in manufacturing various engine parts, its identification of certain risks associated with those manufacturing processes, and corrective actions identified by Pratt & Whitney to mitigate those risks.

The Company is continuing to cooperate with the SEC’s ongoing investigation.

At this time, we are unable to predict the timing or outcome of this SEC investigation.

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These matters are often based on alleged violations of contract, product liability, warranty, regulatory, environmental, health and safety, employment, intellectual property, tax, and other laws.

In some instances, claims for substantial monetary damages are asserted against the Company and its subsidiaries and could result in fines, penalties, compensatory or treble damages, or non-monetary relief.

In some instances, claims for substantial monetary damages are asserted against the Company and

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its subsidiaries and could result in fines, penalties, compensatory or treble damages, or non-monetary relief.

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

Accumulated Other Comprehensive Loss.

A summary of the changes in each component of Accumulated other comprehensive loss, net of tax for the quarters and six months ended June 30, 2025 and 2024 is provided below:

A summary of the changes in each component of Accumulated other comprehensive loss, net of tax for the quarters and nine months ended September 30, 2025 and 2024 is provided below:

(dollars in millions) Foreign Currency Translation (1)

Defined Benefit Pension and Postretirement Plans Unrealized Hedging Gains (Losses) Accumulated Other Comprehensive Loss

Quarter Ended June 30, 2025

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

Quarter Ended September 30, 2025

Balance at June 30, 2025 $ 414 $ ( 2,896 ) $ 91 $ ( 2,391 )

Other comprehensive income (loss) before reclassifications, net 29 20 ( 57 ) ( 8 )

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Tax benefit (expense) ( 1 ) 7 14 20

Balance at June 30, 2025 $ 414 $ ( 2,896 ) $ 91 $ ( 2,391 )

Six Months Ended June 30, 2025

Balance at September 30, 2025 $ 429 $ ( 2,901 ) $ 40 $ ( 2,432 )

Nine Months Ended September 30, 2025

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

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Tax benefit (expense) — 46 ( 50 ) ( 4 )

Balance at June 30, 2025 $ 414 $ ( 2,896 ) $ 91 $ ( 2,391 )

Balance at September 30, 2025 $ 429 $ ( 2,901 ) $ 40 $ ( 2,432 )

(1) The amount of foreign currency translation recognized in Other Comprehensive Income (loss) (OCI) includes gains (losses) relating to net investment hedges, as further discussed in “Note 12:

Financial Instruments”.

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

Quarter Ended June 30, 2024

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

(dollars in millions) Foreign Currency Translation (1)

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

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

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

Six Months Ended June 30, 2024

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

Nine Months Ended September 30, 2024

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

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Tax benefit (expense) 3 32 ( 19 ) 16

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

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

(1) The amount of foreign currency translation recognized in OCI includes gains (losses) relating to net investment hedges, as further discussed in “Note 12:

Financial Instruments”.

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Segment Financial Data

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

Results for the quarters ended June 30, 2025 and 2024 are as follows:

Results for the quarters ended September 30, 2025 and 2024 are as follows:

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

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Eliminations and other (2)

( 611 ) ( 14 )

Corporate expenses and other unallocated items — ( 25 )

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

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

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Pratt & Whitney 7,239 ( 257 ) ( 6,425 ) 557 7.7 %

6,511 ( 80 ) ( 6,304 ) 127 2.0 %

Raytheon 6,386 ( 125 ) ( 5,614 ) 647 10.1 %

Total segment 20,700 $ ( 751 ) $ ( 17,683 ) 2,266 10.9 %

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

(3) Operating Profit and Margin includes a $ 0.6 billion charge in the second quarter of 2024 related to the Raytheon Contract Termination.

Changes in Contract Estimates at Completion” for additional information.

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

Results for the six months ended June 30, 2025 and 2024 are as follows:

Results for the nine months ended September 30, 2025 and 2024 are as follows:

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

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

Capital Expenditures and Depreciation and Amortization segment information for the quarters ended June 30, 2025 and 2024 are as follows:

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Capital Expenditures and Depreciation and Amortization segment information for the quarters ended September 30, 2025 and 2024 are as follows:

Capital Expenditures Depreciation & Amortization

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Consolidated $ 614 $ 552 $ 1,091 $ 1,094

Capital Expenditures and Depreciation and Amortization segment information for the six months ended June 30, 2025 and 2024 are as follows:

Capital Expenditures and Depreciation and Amortization segment information for the nine months ended September 30, 2025 and 2024 are as follows:

Capital Expenditures Depreciation & Amortization

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Total assets by segment are as follows:

(dollars in millions) June 30, 2025 December 31, 2024

(dollars in millions) September 30, 2025 December 31, 2024

Collins Aerospace (1)

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

Segment sales disaggregated by geographic region based on customer location for the quarters ended June 30, 2025 and 2024 are as follows:

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Segment sales disaggregated by geographic region based on customer location for the quarters ended September 30, 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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Business segment sales $ 7,621 $ 8,423 $ 7,045 $ ( 611 ) $ 22,478 $ 7,075 $ 7,239 $ 6,386 $ ( 611 ) $ 20,089

Segment sales disaggregated by geographic region for the six months ended June 30, 2025 and 2024 are as follows:

Segment sales disaggregated by geographic region for the nine months ended September 30, 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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Business segment sales $ 22,460 $ 23,420 $ 20,386 $ ( 1,901 ) $ 64,365 $ 20,747 $ 20,497 $ 19,556 $ ( 1,685 ) $ 59,115

Segment sales disaggregated by type of customer for the quarters ended June 30, 2025 and 2024 are as follows:

Segment sales disaggregated by type of customer for the quarters ended September 30, 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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(1) Excludes foreign military sales through the U.S.

Segment sales disaggregated by type of customer for the six months ended June 30, 2025 and 2024 are as follows:

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Segment sales disaggregated by type of customer for the nine months ended September 30, 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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(1) Excludes foreign military sales through the U.S.

Segment sales disaggregated by sales type for the quarters ended June 30, 2025 and 2024 are as follows:

Segment sales disaggregated by sales type for the quarters ended September 30, 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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Business segment sales $ 7,621 $ 8,423 $ 7,045 $ ( 611 ) $ 22,478 $ 7,075 $ 7,239 $ 6,386 $ ( 611 ) $ 20,089

Segment sales disaggregated by sales type for the six months ended June 30, 2025 and 2024 are as follows:

Segment sales disaggregated by sales type for the nine months ended September 30, 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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Business segment sales $ 22,460 $ 23,420 $ 20,386 $ ( 1,901 ) $ 64,365 $ 20,747 $ 20,497 $ 19,556 $ ( 1,685 ) $ 59,115

Raytheon segment sales disaggregated by contract type for the quarters ended June 30, 2025 and 2024 are as follows:

Raytheon segment sales disaggregated by contract type for the quarters ended September 30, 2025 and 2024 are as follows:

(dollars in millions) 2025 2024

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Business segment sales $ 7,045 $ 6,386

Raytheon segment sales disaggregated by contract type for the six months ended June 30, 2025 and 2024 are as follows:

Raytheon segment sales disaggregated by contract type for the nine months ended September 30, 2025 and 2024 are as follows:

(dollars in millions) 2025 2024

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Business segment sales $ 20,386 $ 19,556

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Remaining Performance Obligations (RPO)

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

Total RPO was approximately $ 236 billion as of June 30, 2025.

Of the total RPO as of June 30, 2025, we expect approximately 25 % will be recognized as revenue over the next 12 months.

Total RPO was approximately $ 251 billion as of September 30, 2025.

Of the total RPO as of September 30, 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 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.

In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which better aligns the accounting guidance to how software is developed by eliminating project stages from capitalization criteria.

The new standard is effective for annual reporting periods beginning after December 15, 2027 and interim periods within those annual reporting periods.

The standard allows for prospective, modified, or retrospective transition.

Early adoption is permitted.

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

In November 2024, the FASB issued 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.

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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.

Improvements to Income Tax Disclosures, to enhance income tax reporting disclosures and require disclosure of specific categories in the tabular rate reconciliation as well as further disaggregation of income taxes paid for individually significant jurisdictions.

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

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

Other new pronouncements issued but not effective until after June 30, 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 and six months ended June 30, 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 July 22, 2025, appearing below, states that the firm did not audit and does not express an opinion on that unaudited condensed consolidated financial information.

Other new pronouncements issued but not effective until after September 30, 2025 are not expected to have a material impact on our results of operations, financial condition, or liquidity.

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With respect to the unaudited condensed consolidated financial information of RTX for the quarters and nine months ended September 30, 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 October 21, 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 June 30, 2025, and the related condensed consolidated statements of operations, of comprehensive income, and of changes in equity for the three-month and six-month periods ended June 30, 2025 and 2024, and the condensed consolidated statement of cash flows for the six-month periods ended June 30, 2025 and 2024, including the related notes (collectively referred to as the “interim financial information”).

We have reviewed the accompanying condensed consolidated balance sheet of RTX Corporation and its subsidiaries (the “Company”) as of September 30, 2025, and the related condensed consolidated statements of operations, of comprehensive income, and of changes in equity for the three-month and nine-month periods ended September 30, 2025 and 2024, and the condensed consolidated statement of cash flows for the nine-month periods ended September 30, 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

July 22, 2025

October 21, 2025

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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