RTX Reports 2024 Results and Announces 2025 Outlook
RTX exceeds 2024 sales and EPS expectations*; Expects continued sales, earnings, and cash flow growth in 2025
ARLINGTON, Va., Jan. 28, 2025 /PRNewswire/ -- RTX (NYSE: RTX) reports fourth quarter 2024 results and announces 2025 outlook.
Fourth quarter 2024
-- Sales of $21.6 billion, up 9 percent versus prior year, and up 11
percent organically* excluding divestitures
-- GAAP EPS was $1.10 and included $0.30 of acquisition accounting
adjustments and $0.14 of restructuring and other net significant and/or
non-recurring charges
-- Adjusted EPS* of $1.54, up 19 percent versus prior year
-- Operating cash flow of $1.6 billion; free cash flow* of $0.5 billion
-- Company backlog of $218 billion; including $125 billion of commercial
and $93 billion of defense
-- Returned $852 million of capital to shareowners
Full year 2024
-- Reported sales of $80.7 billion
-- Adjusted sales* of $80.8 billion, up 9 percent versus prior year, and up
11 percent organically* excluding divestitures
-- GAAP EPS was $3.55 and included $1.20 of acquisition accounting
adjustments and $0.98 of restructuring and other net significant and/or
non-recurring charges
-- Adjusted EPS* of $5.73, up 13 percent versus prior year
-- Operating cash flow of $7.2 billion; free cash flow* of $4.5 billion
-- Returned $3.7 billion of capital to shareowners, returning over $33
billion since the merger
Outlook for full year 2025
-- Adjusted sales* of $83.0 - $84.0 billion, including 4 to 6 percent
organic growth*
-- Adjusted EPS* of $6.00 - $6.15
-- Free cash flow* of $7.0 - $7.5 billion
"RTX delivered a very strong year of performance in 2024 with 11 percent organic sales growth* and 13 percent adjusted EPS growth*, including segment margin expansion* in all three businesses," said RTX President and CEO Chris Calio.
"We have strong momentum heading into 2025 with a $218 billion backlog and unprecedented demand for our products and solutions. We remain focused on advancing our strategic priorities of executing on our commitments, innovating for growth and harnessing the breadth and scale of RTX, giving us confidence in our 2025 financial outlook."
Fourth quarter 2024
RTX reported fourth quarter sales of $21.6 billion, up 9 percent over the prior year. GAAP EPS of $1.10 included $0.30 of acquisition accounting adjustments, $0.05 of restructuring, and $0.09 of other net significant and/or non-recurring charges. Adjusted EPS* of $1.54 was up 19 percent versus the prior year.
The company reported net income attributable to common shareowners in the fourth quarter of $1.5 billion which included $408 million of acquisition accounting adjustments, $61 million of restructuring, and $120 million of other net significant and/or non-recurring charges. Adjusted net income* of $2.1 billion was up 18 percent versus the prior year driven by growth in adjusted segment operating profit*, partially offset by higher taxes and lower pension income. Operating cash flow in the fourth quarter was $1.6 billion. Capital expenditures were $1.1 billion, resulting in free cash flow* of $0.5 billion.
Summary Financial Results - Operations Attributable to Common Shareowners
4th Quarter
Twelve Months
($ in millions, except EPS) 2024 2023 % Change 2024 2023 % Change
Reported
Sales $21,623 $19,927 9 % $80,738 $68,920 17 %
Net Income $1,482 $1,426 4 % $4,774 $3,195 49 %
EPS $1.10 $1.05 5 % $3.55 $2.23 59 %
Adjusted*
Sales $21,623 $19,824 9 % $80,808 $74,305 9 %
Net Income $2,071 $1,753 18 % $7,705 $7,263 6 %
EPS $1.54 $1.29 19 % $5.73 $5.06 13 %
Operating Cash Flow $1,561 $4,711 (67) % $7,159 $7,883 (9) %
Free Cash Flow* $492 $3,906 (87) % $4,534 $5,468 (17) %
Segment Results
Collins Aerospace
4th Quarter Twelve Months
($ in millions) 2024 2023 % Change 2024 2023 % Change
Reported
Sales $7,537 $7,120 6 % $28,284 $26,253 8 %
Operating Profit $1,106 $1,126 (2) % $4,135 $3,825 8 %
ROS 14.7 % 15.8 % (110) bps 14.6 % 14.6 % bps
Adjusted*
Sales $7,537 $7,008 8 % $28,284 $26,198 8 %
Operating Profit $1,207 $1,035 17 % $4,496 $3,896 15 %
ROS 16.0 % 14.8 % 120 bps 15.9 % 14.9 % 100 bps
Collins Aerospace had fourth quarter 2024 reported sales of $7,537 million, up 6 percent versus the prior year. The increase in sales was driven by a 13 percent increase in defense and a 12 percent increase in commercial aftermarket, partially offset by a 6 percent decrease in commercial OE. The increase in defense sales was driven by higher volume across multiple programs and platforms, including new programs awarded in 2024. The increase in commercial aftermarket sales was driven by continued growth in commercial air traffic, and the decrease in commercial OE sales was driven by lower narrow-body volume. Adjusted sales* of $7,537 million, were up 8 percent versus the prior year.
Collins Aerospace reported operating profit of $1,106 million, down 2 percent versus the prior year. This included a $155 million charge related to the impairment of contract fulfillment costs which was partially offset by a $99 million gain on the sale of the Hoist & Winch business. Q4 2023 included a benefit of $112 million from a customer settlement. On an adjusted basis, operating profit* of $1,207 million was up 17 percent versus the prior year. Operationally, the increase was driven by drop through on higher commercial aftermarket and defense volume, which was partially offset by lower commercial OE volume and unfavorable commercial OE mix.
Pratt & Whitney
4th Quarter Twelve Months
($ in millions) 2024 2023 % Change 2024 2023 % Change
Reported
Sales $7,569 $6,439 18 % $28,066 $18,296 NM
Operating Profit (loss) $504 $382 32 % $2,015 $(1,455) NM
ROS 6.7 % 5.9 % 80 bps 7.2 % (8.0) % NM
Adjusted*
Sales $7,569 $6,439 18 % $28,066 $23,697 18 %
Operating Profit $717 $405 77 % $2,281 $1,688 35 %
ROS 9.5 % 6.3 % 320 bps 8.1 % 7.1 % 100 bps
NM = Not Meaningful
Pratt & Whitney had fourth quarter 2024 reported and adjusted sales of $7,569 million, up 18 percent versus the prior year. The increase was driven by a 31 percent increase in commercial OE, a 17 percent increase in commercial aftermarket, and an 8 percent increase in military. The increase in commercial sales was driven by increased deliveries and favorable OE mix in Large Commercial Engines, and higher commercial aftermarket volume. The increase in military sales was driven by higher volume on F135 production, the F135 Engine Core Upgrade program, and F135 sustainment, which was partially offset by lower sustainment volume across legacy platforms, including the F100 and F117.
Pratt & Whitney reported operating profit of $504 million, up 32 percent versus the prior year. The increase was driven by favorable volume and mix in Large Commercial Engines OE, favorable mix in Pratt Canada aftermarket, and drop through on higher commercial aftermarket and military volume. Pratt & Whitney also benefited from an approximately $70 million insurance recovery. Reported operating profit included a $157 million charge related to a customer bankruptcy. On an adjusted basis, operating profit* of $717 million, was up 77 percent versus the prior year.
Raytheon
4th Quarter Twelve Months
($ in millions) 2024 2023 % Change 2024 2023 % Change
Reported
Sales $7,157 $6,886 4 % $26,713 $26,350 1 %
Operating Profit $824 $604 36 % $2,594 $2,379 9 %
ROS 11.5 % 8.8 % 270 bps 9.7 % 9.0 % 70 bps
Adjusted*
Sales $7,157 $6,886 4 % $26,783 $26,350 2 %
Operating Profit $728 $618 18 % $2,728 $2,434 12 %
ROS 10.2 % 9.0 % 120 bps 10.2 % 9.2 % 100 bps
Raytheon had fourth quarter 2024 reported and adjusted sales of $7,157 million, up 4 percent versus the prior year. The increase in sales was driven by higher volume on land and air defense systems, including Global Patriot, NASAMS and counter-UAS programs, as well as higher volume from the restart of contracts with a Middle East customer. This was partially offset by the impact from the divestiture of the Cybersecurity, Intelligence and Services business completed in the first quarter of 2024 and lower volume on air and space defense systems. Excluding the impact of the divestiture, sales were up 10 percent versus the prior year*.
Raytheon reported operating profit of $824 million, up 36 percent versus the prior year. The increase was driven by drop through on higher volume, improved net productivity, and favorable mix which was partially offset by the impact from the divestiture of the Cybersecurity, Intelligence and Services business. Reported operating profit included a $102 million benefit related to reserve adjustments associated with the restart of contracts with a Middle East customer. On an adjusted basis, operating profit* of $728 million was up 18 percent versus the prior year.
*Adjusted net sales (also referred to as adjusted sales), organic sales, adjusted operating profit (loss) and margin, adjusted segment operating profit (loss) and margin,
adjusted net income, adjusted earnings per share ("EPS"), adjusted effective tax rate and free cash flow are non-GAAP financial measures. When we provide our expectation for
adjusted net sales (also referred to as adjusted sales), adjusted EPS and free cash flow on a forward-looking basis, a reconciliation of these non-GAAP financial measures to
the corresponding GAAP measures (expected diluted EPS and expected cash flow from operations) is not available without unreasonable effort due to potentially high variability,
complexity, and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, the ultimate
outcome of pending litigation, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes
or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results. See "Use and
Definitions of Non-GAAP Financial Measures" below for information regarding non-GAAP financial measures.
About RTX
RTX is the world's largest aerospace and defense company. With more than 185,000 global employees, we push the limits of technology and science to redefine how we connect and protect our world. Through industry-leading businesses - Collins Aerospace, Pratt & Whitney and Raytheon - we are advancing aviation, engineering integrated defense systems for operational success, and developing next-generation technology solutions and manufacturing to help global customers address their most critical challenges. The company, with 2024 sales of more than $80 billion, is headquartered in Arlington, Virginia.
Conference Call on the Fourth Quarter 2024 Financial Results
RTX's financial results conference call will be held on Tuesday, January 28, 2025 at 8:30 a.m. ET. The conference call will be webcast live on the company's website at www.rtx.com and will be available for replay following the call. The corresponding presentation slides will be available for downloading prior to the call.
Use and Definitions of Non-GAAP Financial Measures
RTX Corporation ("RTX" or "the Company") reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. The non-GAAP information presented provides investors with additional useful information but should not be considered in isolation or as substitutes for the related GAAP measures. We believe that these non-GAAP measures provide investors with additional insight into the Company's ongoing business performance. Other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. A reconciliation of the non-GAAP measures to the corresponding amounts prepared in accordance with GAAP appears in the tables in this Appendix. Certain non-GAAP financial adjustments are also described in this Appendix. Below are our non-GAAP financial measures:
Non-
GAAP
measure
Definition
Adjusted Represents consolidated net sales (a GAAP measure), excluding
net net significant and/or non-recurring items(1) (hereinafter
sales referred to as "net significant and/or non-recurring
/ items").
Adjusted
sales
Organic Organic sales represents the change in consolidated net sales
sales (a GAAP measure), excluding the impact of foreign currency
translation, acquisitions and divestitures completed in the
preceding twelve months and net significant and/or non-
recurring items.
Adjusted Adjusted operating profit (loss) represents operating profit
operating (loss) (a GAAP measure), excluding restructuring costs,
profit acquisition accounting adjustments and net significant and/
(loss) or non-recurring items. Adjusted operating profit margin
and represents adjusted operating profit (loss) as a percentage
margin of adjusted net sales.
Segment Segment operating profit (loss) represents operating profit
operating (loss) (a GAAP measure) excluding Acquisition Accounting
profit Adjustments(2), the FAS/CAS operating adjustment(3),
(loss) Corporate expenses and other unallocated items, and
and Eliminations and other. Segment operating profit margin
margin represents segment operating profit (loss) as a percentage of
segment sales (net sales, excluding Eliminations and other).
Adjusted Represents consolidated net sales (a GAAP measure) excluding
segment eliminations and other and net significant and/or non-
sales recurring items.
Adjusted Adjusted segment operating profit (loss) represents segment
segment operating profit (loss) excluding restructuring costs, and
operating net significant and/or non-recurring items. Adjusted
profit segment operating profit margin represents adjusted segment
(loss) operating profit (loss) as a percentage of adjusted segment
and sales (adjusted net sales excluding Eliminations and other).
margin
Adjusted Adjusted net income represents net income (a GAAP measure),
net excluding restructuring costs, acquisition accounting
income adjustments and net significant and/or non-recurring items.
Adjusted Adjusted EPS represents diluted earnings per share (a GAAP
earnings measure), excluding restructuring costs, acquisition
per accounting adjustments and net significant and/or non-
share recurring items.
(EPS)
Adjusted Adjusted effective tax rate represents the effective tax rate
effective (a GAAP measure), excluding the tax impact of restructuring
tax costs, acquisition accounting adjustments and net significant
rate and/or non-recurring items.
Free Free cash flow represents cash flow from operations (a GAAP
cash measure) less capital expenditures. Management believes free
flow cash flow is a useful measure of liquidity and an additional
basis for assessing RTX's ability to fund its activities,
including the financing of acquisitions, debt service,
repurchases of RTX's common stock and distribution of
earnings to shareowners.
(1) Net significant and/or non-recurring items represent significant nonoperational items and/or significant operational items that may occur at irregular intervals.
2 Acquisition Accounting Adjustments include the amortization of acquired intangible assets related to acquisitions, the amortization of the property, plant and equipment fair
value adjustment acquired through acquisitions, the amortization of customer contractual obligations related to loss making or below market contracts acquired, and goodwill
impairment, if applicable.
3 The FAS/CAS operating adjustment represents the difference between the service cost component of our pension and postretirement benefit (PRB) expense under the Financial
Accounting Standards (FAS) requirements of GAAP and our pension and PRB expense under U.S. government Cost Accounting Standards (CAS) primarily related to our Raytheon segment.
When we provide our expectation for adjusted net sales (also referred to as adjusted sales), organic sales, adjusted operating profit (loss) and margin, adjusted segment operating profit (loss) and margin, adjusted EPS, adjusted effective tax rate, and free cash flow, on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures, as described above, generally are not available without unreasonable effort due to potentially high variability, complexity, and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.
Cautionary Statement Regarding Forward-Looking Statements This press release contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward-looking statements may also be included in other information released to the public. These forward-looking statements are intended to provide RTX Corporation ("RTX") management's current expectations or plans for our future operating and financial performance, based on assumptions currently believed to be valid and are not statements of historical fact. Forward-looking statements can be identified by the use of words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "goals," "objectives," "confident," "on track," "designed to, " "commit," "commitment" and other words of similar meaning. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, share repurchases, tax payments and rates, research and development spending, cost savings, other measures of financial performance, potential future plans, strategies or transactions, credit ratings and net indebtedness, the Pratt powder metal matter and related matters and activities, including without limitation other engine models that may be impacted, the merger (the "merger") between United Technologies Corporation ("UTC") and Raytheon Company ("Raytheon") or the spin-offs by UTC of Otis Worldwide Corporation and Carrier Global Corporation into separate independent companies (the "separation transactions") in 2020, the pending disposition of Collins' actuation and flight control business, targets and commitments (including for share repurchases or otherwise), and other statements that are not solely historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and other factors include, without limitation: (1) the effect of changes in economic, capital market and political conditions in the U.S. and globally, such as from the global sanctions and export controls with respect to Russia, and any changes therein, and including changes related to financial market conditions, banking industry disruptions, fluctuations in commodity prices or supply (including energy supply), inflation, interest rates and foreign currency exchange rates, disruptions in global supply chain and labor markets, levels of consumer and business confidence, the imposition of tariffs, and geopolitical risks, including, without limitation, in the Middle East and Ukraine; (2) risks associated with U.S. government sales, including changes or shifts in defense spending due to budgetary constraints, spending cuts resulting from sequestration, a continuing resolution, a government shutdown, the debt ceiling or measures taken to avoid default, or otherwise, and uncertain funding of programs; (3) risks relating to our performance on our contracts and programs, including our ability to control costs, the mix of our contracts and programs, and our inability to pass some or all of our costs on fixed price contracts to the customer, and risks related to our dependence on U.S. government approvals for international contracts; (4) challenges in the development, certification, production, delivery, support and performance of RTX advanced technologies and new products and services and the realization of the anticipated benefits (including our expected returns under customer contracts), as well as the challenges of operating in RTX's highly-competitive industries both domestically and abroad; (5) risks relating to RTX's reliance on U.S. and non-U.S. suppliers and commodity markets, including the effect of sanctions, tariffs, delays and disruptions in the delivery of materials and services to RTX or its suppliers and cost increases; (6) risks relating to RTX international operations from, among other things, changes in trade policies and implementation of sanctions, foreign currency fluctuations, economic conditions, political factors, sales methods, U.S. or local government regulations, and our dependence on U.S. government approvals for international contracts; (7) the condition of the aerospace industry; (8) potential changes in policy positions or priorities that emerge from the incoming U.S. presidential administration, including changes in DoD policies or priorities; (9) the ability of RTX to attract, train qualify, and retain qualified personnel and maintain its culture and high ethical standards, and the ability of our personnel to continue to operate our facilities and businesses around the world; (10) the scope, nature, timing and challenges of managing acquisitions, investments, divestitures (including the pending disposition of Collins' actuation and flight control business) and other transactions, including the realization of synergies and opportunities for growth and innovation, the assumption of liabilities and other risks and incurrence of related costs and expenses, and risks related to completion of announced divestitures; (11) compliance with legal, environmental, regulatory and other requirements, including, among other things, obtaining regulatory approvals for new technologies and products and export and import requirements such as the International Traffic in Arms Regulations and the Export Administration Regulations, anti-bribery and anticorruption requirements, such as the Foreign Corrupt Practices Act, industrial cooperation agreement obligations, and procurement and other regulations in the U.S. and other countries in which RTX and its businesses operate; (12) the outcome of pending, threatened and future legal proceedings, investigations, and other contingencies, including those related to U.S. government audits and disputes and the potential for suspension or debarment of U.S. government contracting or export privileges as a result thereof; (13) risks related to the previously-disclosed deferred prosecution agreements entered into between the Company and the Department of Justice (DOJ), the Securities and Exchange Commission (SEC) administrative order imposed on the Company, and the related investigations by the SEC and DOJ, and the consent agreement between the Company and the Department of State; (14) factors that could impact RTX's ability to engage in desirable capital-raising or strategic transactions, including its credit rating, capital structure, levels of indebtedness, and related obligations, capital expenditures and research and development spending, and capital deployment strategy including with respect to share repurchases, and the availability of credit, borrowing costs, credit market conditions, and other factors; (15) uncertainties associated with the timing and scope of future repurchases by RTX of its common stock or declarations of cash dividends, which may be discontinued, accelerated, suspended or delayed at any time due to various factors, including market conditions and the level of other investing activities and uses of cash; (16) risks relating to realizing expected benefits from, incurring costs for, and successfully managing, strategic initiatives such as cost reduction, restructuring, digital transformation and other operational initiatives; (17) risks of additional tax exposures due to new tax legislation or other developments in the U.S. and other countries in which RTX and its businesses operate; (18) risks relating to addressing the identified rare condition in powder metal used to manufacture certain Pratt & Whitney engine parts requiring accelerated removals and inspections of a significant portion of the PW1100G-JM Geared Turbofan (GTF) fleet, including, without limitation, the number and expected timing of shop visits, inspection results and scope of work to be performed, turnaround time, availability of new parts, available capacity at overhaul facilities, outcomes of negotiations with impacted customers, and risks related to other engine models that may be impacted by the powder metal matter, and in each case the timing and costs relating thereto, as well as other issues that could impact RTX product performance, including quality, reliability or durability; (19) changes in production volumes of one or more of our significant customers as a result of business, labor, or other challenges, and the resulting effect on its or their demand for our products and services; (20) risks relating to an RTX product safety failure, quality issue or other failure affecting RTX's or its customers' or suppliers' products or systems; (21) risks relating to cybersecurity, including cyber-attacks on RTX's information technology infrastructure, products, suppliers, customers and partners, and cybersecurity-related regulations; (22) risks related to insufficient indemnity or insurance coverage; (23) risks related to artificial intelligence; (24) risks relating to our intellectual property and certain third-party intellectual property; (25) threats to RTX facilities and personnel, as well as other events outside of RTX's control such as public health crises, damaging weather or other acts of nature; (26) the effect of changes in accounting estimates for our programs on our financial results; (27) the effect of changes in pension and other postretirement plan estimates and assumptions and contributions; (28) risks relating to an impairment of goodwill and other intangible assets; (29) the effects of climate change and changing climate-related regulations, customer and market demands, products and technologies; and (30) the intended qualification of (i) the merger as a tax-free reorganization and (ii) the separation transactions and other internal restructurings as tax-free to UTC and former UTC shareowners, in each case, for U.S. federal income tax purposes. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see the reports of RTX, UTC and Raytheon on Forms S-4, 10-K, 10-Q and 8-K filed with or furnished to the Securities and Exchange Commission from time to time. Any forward-looking statement speaks only as of the date on which it is made, and RTX assumes no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
RTX Corporation
Consolidated
Statement of Operations
Quarter Ended December Twelve Months Ended
31, December 31,
(Unaudited)
(Unaudited)
(dollars in millions, except per share amounts; shares in millions) 2024 2023 2024 2023
Net Sales $21,623 $19,927 $80,738 $68,920
Costs and expenses:
Cost of sales 17,388 15,918 65,328 56,831
Research and development 808 757 2,934 2,805
Selling, general, and administrative 1,574 1,445 5,806 5,809
Total costs and expenses 19,770 18,120 74,068 65,445
Other income (expense), net 258 (30) (132) 86
Operating profit 2,111 1,777 6,538 3,561
Non-service pension income (384) (446) (1,518) (1,780)
Interest expense, net 486 488 1,862 1,505
Income before income taxes 2,009 1,735 6,194 3,836
Income tax expense 449 262 1,181 456
Net income 1,560 1,473 5,013 3,380
Less: Noncontrolling interest in subsidiaries'
earnings 78 47 239 185
Net income attributable to common shareowners $1,482 $1,426 $4,774 $3,195
Earnings Per Share attributable to common shareowners:
Basic $1.11 $1.05 $3.58 $2.24
Diluted $1.10 $1.05 $3.55 $2.23
Weighted Average Shares Outstanding:
Basic shares 1,334.4 1,354.9 1,332.1 1,426.0
Diluted shares 1,348.9 1,361.7 1,343.6 1,435.4
RTX Corporation
Segment Net Sales and Operating Profit (Loss)
Quarter Ended Twelve Months Ended
(Unaudited)
(Unaudited)
December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023
(dollars in millions) Reported Adjusted Reported Adjusted Reported Adjusted Reported Adjusted
Net Sales
Collins Aerospace $7,537 $7,537 $7,120 $7,008 $28,284 $28,284 $26,253 $26,198
Pratt & Whitney 7,569 7,569 6,439 6,439 28,066 28,066 18,296 23,697
Raytheon 7,157 7,157 6,886 6,886 26,713 26,783 26,350 26,350
Total segments 22,263 22,263 20,445 20,333 83,063 83,133 70,899 76,245
Eliminations and other (640) (640) (518) (509) (2,325) (2,325) (1,979) (1,940)
Consolidated $21,623 $21,623 $19,927 $19,824 $80,738 $80,808 $68,920 $74,305
Operating Profit (Loss)
Collins Aerospace $1,106 $1,207 $1,126 $1,035 $4,135 $4,496 $3,825 $3,896
Pratt & Whitney 504 717 382 405 2,015 2,281 (1,455) 1,688
Raytheon 824 728 604 618 2,594 2,728 2,379 2,434
Total segments 2,434 2,652 2,112 2,058 8,744 9,505 4,749 8,018
Eliminations and other 7 7 (8) 1 (48) (48) (42) (81)
Corporate expenses and other unallocated items (7) (4) (110) (70) (933) (107) (275) (169)
FAS/CAS operating adjustment 197 197 282 282 833 833 1,127 1,127
Acquisition accounting adjustments (520) (499) (2,058) (1,998)
Consolidated $2,111 $2,852 $1,777 $2,271 $6,538 $10,183 $3,561 $8,895
Segment Operating Profit (Loss) Margin
Collins Aerospace 14.7 % 16.0 % 15.8 % 14.8 % 14.6 % 15.9 % 14.6 % 14.9 %
Pratt & Whitney 6.7 % 9.5 % 5.9 % 6.3 % 7.2 % 8.1 % (8.0) % 7.1 %
Raytheon 11.5 % 10.2 % 8.8 % 9.0 % 9.7 % 10.2 % 9.0 % 9.2 %
Total segment 10.9 % 11.9 % 10.3 % 10.1 % 10.5 % 11.4 % 6.7 % 10.5 %
RTX Corporation
Consolidated
Balance Sheet
December 31, 2024 December 31, 2023
(dollars in millions) (Unaudited) (Unaudited)
Assets
Cash and cash equivalents $5,578 $6,587
Accounts receivable, net 10,976 10,838
Contract assets 14,570 12,139
Inventory, net 12,768 11,777
Other assets, current 7,241 7,076
Total current assets 51,133 48,417
Customer financing assets 2,246 2,392
Fixed assets, net 16,089 15,748
Operating lease right-of-use assets 1,864 1,638
Goodwill 52,789 53,699
Intangible assets, net 33,443 35,399
Other assets 5,297 4,576
Total assets $162,861 $161,869
Liabilities, Redeemable Noncontrolling Interest, and Equity
Short-term borrowings $183 $189
Accounts payable 12,897 10,698
Accrued employee compensation 2,620 2,491
Other accrued liabilities 14,831 14,917
Contract liabilities 18,616 17,183
Long-term debt currently due 2,352 1,283
Total current liabilities 51,499 46,761
Long-term debt 38,726 42,355
Operating lease liabilities, non-current 1,632 1,412
Future pension and postretirement benefit obligations 2,104 2,385
Other long-term liabilities 6,942 7,511
Total liabilities 100,903 100,424
Redeemable noncontrolling interest 35 35
Shareowners' Equity:
Common stock 37,434 37,040
Treasury stock (27,112) (26,977)
Retained earnings 53,589 52,154
Accumulated other comprehensive loss (3,755) (2,419)
Total shareowners' equity 60,156 59,798
Noncontrolling interest 1,767 1,612
Total equity 61,923 61,410
Total liabilities, redeemable noncontrolling interest, and equity $162,861 $161,869
RTX Corporation
Consolidated
Statement of Cash Flows
Quarter Ended Twelve Months Ended
December 31, December 31,
(Unaudited)
(Unaudited)
(dollars in millions) 2024 2023 2024 2023
Operating Activities:
Net income $1,560 $1,473 $5,013 $3,380
Adjustments to reconcile net income to net cash flows provided by operating activities from:
Depreciation and amortization 1,139 1,059 4,364 4,211
Deferred income tax (benefit) provision 72 326 (47) (402)
Stock compensation cost 109 106 437 425
Net periodic pension and other postretirement income (334) (391) (1,326) (1,555)
Gain on sale of Cybersecurity, Intelligence and Services business, net of transaction costs - (415)
Change in:
Accounts receivable (1,111) (892) (175) (1,805)
Contract assets 39 410 (2,414) (753)
Inventory 231 326 (1,474) (1,104)
Other current assets (160) (283) (402) (1,161)
Accounts payable and accrued liabilities (819) 594 1,508 4,016
Contract liabilities 676 1,893 1,872 2,322
Other operating activities, net 159 90 218 309
Net cash flows provided by operating activities 1,561 4,711 7,159 7,883
Investing Activities:
Capital expenditures (1,069) (805) (2,625) (2,415)
Dispositions of businesses, net of cash transferred 512 1,795 6
Increase in other intangible assets (164) (215) (611) (751)
(Payments) receipts from settlements of derivative contracts, net (145) 32 (142) 14
Other investing activities, net 87 10 49 107
Net cash flows used in investing activities (779) (978) (1,534) (3,039)
Financing Activities:
Proceeds from long-term debt - 9,940 12,914
Repayment of long-term debt (800) (403) (2,500) (578)
Proceeds from bridge loan - 10,000 10,000
Repayment of bridge loan - (10,000) (10,000)
Change in commercial paper, net - (997) (524)
Change in other short-term borrowings, net (35) 19 (4) 87
Dividends paid on common stock (802) (767) (3,217) (3,239)
Repurchase of common stock (50) (10,283) (444) (12,870)
Other financing activities, net (181) (127) (452) (317)
Net cash flows used in financing activities (1,868) (2,618) (6,617) (4,527)
Effect of foreign exchange rate changes on cash and cash equivalents (39) 14 (28) 18
Net increase (decrease) in cash, cash equivalents and restricted cash (1,125) 1,129 (1,020) 335
Cash, cash equivalents and restricted cash, beginning of period 6,731 5,497 6,626 6,291
Cash, cash equivalents and restricted cash, end of period 5,606 6,626 5,606 6,626
Less: Restricted cash, included in Other assets, current and Other assets 28 39 28 39
Cash and cash equivalents, end of period $5,578 $6,587 $5,578 $6,587
RTX Corporation
Reconciliation of Adjusted (Non-GAAP) Results
Adjusted Sales, Adjusted Operating Profit & Operating Profit Margin
Quarter Ended Twelve Months Ended
December 31, December 31,
(Unaudited)
(Unaudited)
(dollars in millions - Income (Expense)) 2024 2023 2024 2023
Collins Aerospace
Net sales $7,537 $7,120 $28,284 $26,253
Benefits related to litigation matters (1) - 112 55
Adjusted net sales $7,537 $7,008 $28,284 $26,198
Operating profit $1,106 $1,126 $4,135 $3,825
Restructuring (17) 1 (47) (71)
Gain on sale of business, net of transaction and other related costs (1) 99 99
Charge associated with initiating alternative titanium sources (1) - (175)
Segment and portfolio transformation and divestiture costs (1) (28) (29) (83) (62)
Benefits related to litigation matters (1) - 119 62
Impairment of contract fulfillment costs (1) (155) (155)
Adjusted operating profit $1,207 $1,035 $4,496 $3,896
Adjusted operating profit margin 16.0 % 14.8 % 15.9 % 14.9 %
Pratt & Whitney
Net sales $7,569 $6,439 $28,066 $18,296
Powder Metal charge (1) - (5,401)
Adjusted net sales $7,569 $6,439 $28,066 $23,697
Operating profit (loss) $504 $382 $2,015 $(1,455)
Restructuring (56) (23) (102) (74)
Insurance settlement - 27
Powder Metal charge (1) - (2,888)
Charges related to a customer insolvency (1) - (181)
Expected settlement of a litigation matter (1) - (34)
Customer bankruptcy (1) (157) (157)
Adjusted operating profit $717 $405 $2,281 $1,688
Adjusted operating profit margin 9.5 % 6.3 % 8.1 % 7.1 %
Raytheon
Net sales $7,157 $6,886 $26,713 $26,350
Contract termination (1) - (70)
Adjusted net sales $7,157 $6,886 $26,783 $26,350
Operating profit $824 $604 $2,594 $2,379
Restructuring (6) (9) (36) (42)
Gain on sale of business, net of transaction and other related costs (1) - 375
Segment and portfolio transformation and divestiture costs (1) - (5) (13)
Contract termination (1) - (575)
Middle East contracts restart adjustments (1) 102 102
Adjusted operating profit $728 $618 $2,728 $2,434
Adjusted operating profit margin 10.2 % 9.0 % 10.2 % 9.2 %
Eliminations and Other
Net sales $(640) $(518) $(2,325) $(1,979)
Prior year impact from R&D capitalization IRS notice (1) - (9) (39)
Adjusted net sales $(640) $(509) $(2,325) $(1,940)
Operating profit (loss) $7 $(8) $(48) $(42)
Prior year impact from R&D capitalization IRS notice (1) - (9) (39)
Gain on sale of land - 68
Charges related to a customer insolvency (1) - 10
Adjusted operating profit (loss) $7 $1 $(48) $(81)
Corporate expenses and other unallocated items
Operating loss $(7) $(110) $(933) $(275)
Restructuring - (13) (9) (59)
Tax audit settlements (1) - (68)
Segment and portfolio transformation and divestiture costs (1) (3) (11) (11) (31)
Legal matters (1) - (918)
Expiration of tax statute of limitations - (16) (16)
Tax matters and related indemnification (1) - 180
Adjusted operating loss $(4) $(70) $(107) $(169)
FAS/CAS Operating Adjustment
Operating profit $197 $282 $833 $1,127
Acquisition Accounting Adjustments
Operating loss $(520) $(499) $(2,058) $(1,998)
Acquisition accounting adjustments (520) (499) (2,058) (1,998)
Adjusted operating profit
$ -
$ -
$ -
$ -
RTX Consolidated
Net sales $21,623 $19,927 $80,738 $68,920
Total net significant and/or non-recurring items included in Net sales above (1) - 103 (70) (5,385)
Adjusted net sales $21,623 $19,824 $80,808 $74,305
Operating profit $2,111 $1,777 $6,538 $3,561
Restructuring (79) (44) (194) (246)
Acquisition accounting adjustments (520) (499) (2,058) (1,998)
Total net significant and/or non-recurring items included in Operating profit above (1) (142) 49 (1,393) (3,090)
Adjusted operating profit $2,852 $2,271 $10,183 $8,895
(1) Refer to "Non-GAAP Financial Adjustments" below for a description of
these adjustments.
RTX Corporation
Reconciliation of Adjusted (Non-GAAP) Results
Adjusted Income, Earnings Per Share, and Effective Tax Rate
Quarter Ended Twelve Months
December 31, Ended December 31,
(Unaudited)
(Unaudited)
(dollars in millions - Income (Expense)) 2024 2023 2024 2023
Net income attributable to common shareowners $1,482 $1,426 $4,774 $3,195
Total Restructuring (79) (44) (194) (246)
Total Acquisition accounting adjustments (520) (499) (2,058) (1,998)
Total net significant and/or non-recurring items included in Operating profit (1) (142) 49 (1,393) (3,090)
Significant and/or non-recurring items included in Non-service Pension Income
Non-service pension restructuring - (2) (9) (4)
Pension curtailment related to sale of business (1) - 9
Significant non-recurring and non-operational items included in Interest Expense, Net
Tax audit settlements (1) - 78
Benefits related to litigation matters - 1 1
Expiration of tax statute of limitations - 10 10
Tax matters and related indemnification (1) - (11)
Tax effect of restructuring and net significant and/or non-recurring items above 152 99 516 1,191
Significant and/or non-recurring items included in Income Tax Expense
Tax audit settlements (1) - 296
Expiration of tax statute of limitations - 61 61
Prior year impact from R&D capitalization IRS notice (1) - (5) (13)
Tax matters and related indemnification (1) - (156)
Significant and/or non-recurring items included in Noncontrolling Interest
Noncontrolling interest share of charges related to an insurance settlement - (9)
Noncontrolling interest share of benefits related to litigation matters (1) - 3 3
Noncontrolling interest share of customer insolvency charges (1) - 17
Less: Impact on net income (loss) attributable to common shareowners (589) (327) (2,931) (4,068)
Adjusted net income attributable to common shareowners $2,071 $1,753 $7,705 $7,263
Diluted Earnings Per Share $1.10 $1.05 $3.55 $2.23
Impact on Diluted Earnings Per Share (0.44) (0.24) (2.18) (2.83)
Adjusted Diluted Earnings Per Share $1.54 $1.29 $5.73 $5.06
Effective Tax Rate 22.3 % 15.1 % 19.1 % 11.9 %
Impact on Effective Tax Rate 0.4 % (3.7) % 0.3 % (6.6) %
Adjusted Effective Tax Rate 21.9 % 18.8 % 18.8 % 18.5 %
(1) Refer to "Non-GAAP Financial Adjustments" below for a description of
these adjustments.
RTX Corporation
Reconciliation of Adjusted (Non-GAAP) Results
Segment Operating Profit Margin and Adjusted Segment Operating Profit Margin
Quarter Ended Twelve Months Ended
December 31, December 31,
(Unaudited)
(Unaudited)
(dollars in millions) 2024 2023 2024 2023
Net Sales $21,623 $19,927 $80,738 $68,920
Reconciliation to segment net sales:
Eliminations and other 640 518 2,325 1,979
Segment Net Sales $22,263 $20,445 $83,063 $70,899
Reconciliation to adjusted segment net sales:
Net significant and/or non-recurring items (1) - 112 (70) (5,346)
Adjusted Segment Net Sales $22,263 $20,333 $83,133 $76,245
Operating Profit $2,111 $1,777 $6,538 $3,561
Operating Profit Margin 9.8 % 8.9 % 8.1 % 5.2 %
Reconciliation to segment operating profit:
Eliminations and other (7) 8 48 42
Corporate expenses and other unallocated items 7 110 933 275
FAS/CAS operating adjustment (197) (282) (833) (1,127)
Acquisition accounting adjustments 520 499 2,058 1,998
Segment Operating Profit $2,434 $2,112 $8,744 $4,749
Segment Operating Profit Margin 10.9 % 10.3 % 10.5 % 6.7 %
Reconciliation to adjusted segment operating profit:
Restructuring (79) (31) (185) (187)
Net significant and/or non-recurring items (1) (139) 85 (576) (3,082)
Adjusted Segment Operating Profit $2,652 $2,058 $9,505 $8,018
Adjusted Segment Operating Profit Margin 11.9 % 10.1 % 11.4 % 10.5 %
(1) Refer to "Non-GAAP Financial Adjustments" below for a description of
these adjustments.
RTX Corporation
Free Cash Flow Reconciliation
Quarter Ended December 31,
(Unaudited)
(dollars in millions) 2024 2023
Net cash flows provided by operating activities $1,561 $4,711
Capital expenditures (1,069) (805)
Free cash flow $492 $3,906
Twelve Months Ended December
31,
(Unaudited)
(dollars in millions) 2024 2023
Net cash flows provided by operating activities $7,159 $7,883
Capital expenditures (2,625) (2,415)
Free cash flow $4,534 $5,468
RTX Corporation
Reconciliation of Adjusted (Non-GAAP) Results
Organic Sales Reconciliation
Quarter ended December 31, 2024
compared to the Quarter Ended December 31, 2023
(Unaudited)
(dollars in millions) Total Reported Acquisitions & FX /Other Organic Prior Year Organic Change
Change Divestitures Change (2) Change Adjusted Sales
(1) as a % of
Change Adjusted Sales
Collins Aerospace $417 $(18) $(107) $542 $7,008 8 %
Pratt & Whitney 1,130 (25) 1,155 6,439 18 %
Raytheon 271 (412) 8 675 6,886 10 %
Eliminations and Other (3) (122) 1 22 (145) (509) 28 %
Consolidated $1,696 $(429) $(102) $2,227 $19,824 11 %
(1) For the full Non-GAAP reconciliation of adjusted sales refer to
"Reconciliation of Adjusted (Non-GAAP) Results - Adjusted Sales,
Adjusted Operating Profit & Operating Profit Margin."
(2) Includes other significant non-operational items and/or significant
operational items that may occur at irregular intervals.
(3) FX/Other Change includes the transactional impact of foreign exchange
hedging at Pratt & Whitney Canada, which is included in Pratt &
Whitney's FX/Other Change, but excluded for Consolidated RTX.
Twelve Months Ended December 31, 2024
compared to the Twelve Months Ended
December 31, 2023
(Unaudited)
(dollars in millions) Total Reported Acquisitions & FX /Other Organic Change Prior Year Organic Change
Change Divestitures Change (2) Adjusted Sales
(1) as a % of
Change Adjusted Sales
Collins Aerospace $2,031 $(18) $(47) $2,096 $26,198 8 %
Pratt & Whitney 9,770 5,384 4,386 23,697 19 %
Raytheon 363 (1,274) (54) 1,691 26,350 6 %
Eliminations and Other (3) (346) 1 10 (357) (1,940) 18 %
Consolidated $11,818 $(1,291) $5,293 $7,816 $74,305 11 %
(1) For the full Non-GAAP reconciliation of adjusted sales refer to
"Reconciliation of Adjusted (Non-GAAP) Results - Adjusted Sales,
Adjusted Operating Profit & Operating Profit Margin."
(2) Includes other significant non-operational items and/or significant
operational items that may occur at irregular intervals.
(3) FX/Other Change includes the transactional impact of foreign exchange
hedging at Pratt & Whitney Canada, which is included in Pratt &
Whitney's FX/Other Change, but excluded for Consolidated RTX.
Non-GAAP Financial Adjustments
Non-GAAP Adjustments
Description
Benefits related to litigation The quarter and twelve months ended December 31, 2023
matters includes a net sales benefit of $112 million and $55
million, respectively and a corresponding net operating
profit benefit of $119 million and $62 million,
respectively related to the settlement of two customer
litigation matters at Collins. Management has determined
that the nature and significance of these settlements
are considered unusual and therefore, not indicative of
the Company's ongoing operational performance.
Segment and portfolio The quarters and twelve months ended December 31, 2024
transformation and divestiture and 2023 include certain segment and portfolio
costs transformation costs incurred in connection with the
2023 completed segment realignment as well as separation
costs incurred in advance of the completion of certain
divestitures.
Charge associated with initiating The twelve months ended December 31, 2024 includes a net
alternative titanium sources pre-tax charge of $0.2 billion related to the
recognition of unfavorable purchase commitments and an
impairment of contract fulfillment costs associated with
initiating alternative titanium sources at Collins.
These charges were recorded as a result of the Canadian
government's imposition of new sanctions in February
2024, which included U.S.- and German-based Russian-
owned entities from which we source titanium for use in
our Canadian operations. Management has determined that
these impacts are directly attributable to the
sanctions, incremental to similar costs incurred for
reasons other than those related to the sanctions and
has determined that the nature of the charge is
considered significant and unusual, and therefore, not
indicative of the Company's ongoing operational
performance.
Impairment of contract fulfillment The quarter and twelve months ended December 31, 2024
costs include a net pre-tax charge of $0.2 billion related to
an impairment of contract fulfillment costs as a result
of a contract cancellation during the fourth quarter of
2024 at Collins. Management has determined that the
nature and significance of the charge is considered
unusual and, therefore not indicative of the Company's
ongoing operational performance.
Powder Metal charge The twelve months ended December 31, 2023 includes a net
pre-tax charge of $2.9 billion related to the Pratt
powder metal matter during the third quarter of 2023.
The charge is reflected in the Consolidated Statement of
Operations as a reduction of sales of $5.4 billion which
was partially offset by a net reduction of cost of sales
of $2.5 billion primarily representing our partners' 49%
share of this charge. The charge includes the Company's
current best estimate of expected customer compensation
for the estimated duration of the disruption as well as
the third quarter Estimate-at-Completion (EAC)
adjustment impact of this matter to Pratt & Whitney's
long-term maintenance contracts. Management has
determined that these items are directly attributable to
the powder metal matter, incremental to similar costs
(or income) incurred for reasons other than those
related to the powder metal matter and not expected to
recur, and therefore, not indicative of the Company's
ongoing operational performance.
Charge related to a customer The twelve months ended December 31, 2023 includes a net
insolvency pre-tax charge of $0.2 billion related to a customer
insolvency during the second quarter of 2023. The charge
primarily relates to Contract assets and Customer
financing assets exposures with the customer. Management
has determined that the nature and significance of the
charge is considered unusual and, therefore not
indicative of the Company's ongoing operational
performance.
Expected settlement of a The twelve months ended December 31, 2024 includes a pre-
litigation matter tax charge of $34 million reflecting the expected
settlement value relating to a litigation matter at
Pratt & Whitney. Management has determined that the
impact is directly attributable to the expected legal
settlement and that the nature of the charge is
considered non-operational and therefore, not
indicative of the Company's ongoing operational
performance.
Customer bankruptcy The quarter and twelve months ended December 31, 2024
include a net pre-tax charge of approximately $0.2
billion related to a customer bankruptcy during the
fourth quarter of 2024 at Pratt & Whitney. The charge
primarily relates to contract asset exposures with the
customer. Management has determined that the nature and
significance of the charge is considered unusual and,
therefore not indicative of the Company's ongoing
operational performance.
Contract termination The twelve months ended December 31, 2024 includes a pre-
tax charge of $0.6 billion related to the termination of
a fixed price development contract with a foreign
customer at Raytheon. The charge includes the write-off
of remaining contract assets and settlement with the
customer. Management has determined that these impacts
are directly attributable to the termination,
incremental to similar costs incurred for reasons other
than those attributable to the termination and has
determined that the nature of the pre-tax charge is
considered significant and unusual and therefore, not
indicative of the Company's ongoing operational
performance.
Gain on sale of business, net of The quarter and twelve months ended December 31, 2024
transaction and other related includes a pre-tax gain, net of transaction and other
costs related costs, of $0.1 billion associated with the
completed sale of the Hoist & Winch business at Collins.
The twelve months ended December 31, 2024 also includes
a pre-tax gain, net of transaction and other related
costs, of $0.4 billion associated with the completed
sale of the Cybersecurity, Intelligence and Services
(CIS) business at Raytheon. Management has determined
that the nature of these net gains on the divestitures
is considered significant and non-operational and
therefore, not indicative of the Company's ongoing
operational performance.
Middle East contracts restart The quarter and twelve months ended December 31, 2024
adjustments includes a net operating profit benefit of $0.1 billion
primarily related to reserve and contract loss provision
adjustments as a result of restarting work under certain
contracts with a Middle East customer. Management has
determined that the nature and significance of the
benefit is considered unusual, therefore not indicative
of the Company's ongoing operational performance.
Prior year impact from R&D The quarter and twelve months ended December 31, 2023
capitalization IRS notice includes a net pre-tax charge of $9 million and $39
million, respectively and a tax expense increase of $5
million and $13 million, respectively related to the
2022 impact of an IRS notice issued in September 2023
related to the capitalization of research and
experimental expenditures for tax purposes. Management
has determined that these items are directly
attributable to the IRS notice and represents the impact
to 2022, incremental to similar costs (or income)
incurred for reasons other than the tax law change and
not expected to recur, and therefore, not indicative of
the Company's ongoing operational performance.
Tax audit settlements The twelve months ended December 31, 2024 includes a tax
benefit of $0.3 billion recognized as a result of the
closure of the examination phase of multiple federal tax
audits. In addition, there was a pre-tax charge of $68
million for the write-off of certain tax related
indemnity receivables and a pre-tax gain on the
reversal of $78 million of interest accruals, both
directly associated with these tax audit settlements.
Management has determined that the nature of these
impacts related to the tax audit settlements is
considered significant and non-operational and
therefore, not indicative of the Company's ongoing
operational performance.
Legal matters The twelve months ended December 31, 2024 includes
charges of $0.9 billion related to the expected
resolution of several outstanding legal matters. The
charge includes an additional accrual of $0.3 billion to
resolve the previously disclosed criminal and civil
government investigations of defective pricing claims
for certain legacy Raytheon Company contracts entered
into between 2011 and 2013 and in 2017; an additional
accrual of $0.4 billion to resolve the previously
disclosed criminal and civil government investigations
of improper payments made by Raytheon Company and its
joint venture, Thales-Raytheon Systems, in connection
with certain Middle East contracts since 2012; and an
accrual of $0.3 billion related to certain voluntarily
disclosed export controls violations, primarily
identified in connection with the integration of
Rockwell Collins and, to a lesser extent, Raytheon
Company, including certain violations expected to be
resolved pursuant to a consent agreement with the
Department of State. Management has determined that
these impacts are directly attributable to these legacy
legal matters and that the nature of the charges are
considered significant and unusual and therefore, not
indicative of the Company's ongoing operational
performance.
Tax matters and related The twelve months ended December 31, 2024 includes the
indemnification impact of a recent favorable international tax court
ruling related to certain tax payments made by a
previously separated entity. As a result of this ruling,
and the expected reimbursement of international taxes to
the previously separated entity, the Company will owe
additional U.S. income tax of $0.2 billion and related
interest. The Company recorded a pre-tax benefit of
$0.2 billion to recognize recovery of the additional
taxes and interest owed pursuant to a tax matters
agreement entered into in connection with the
separation. There was no net income impact in 2024 as a
result of this adjustment. We also recognized an income
tax benefit of $56 million 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 the tax matters agreement
with previously separated entities and therefore we
recorded a pre-tax charge of $32 million for the
indemnified amounts. Management has determined that the
nature of these impacts to both pre-tax income and
income tax expense is considered significant and non-
operational and therefore, not indicative of the
Company's ongoing operational performance.
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SOURCE RTX
