aa56ca1b1b9bd2a3213c23c24035760e37922bcf97deedbb265ee1dad8a14b78

RTX Corporation is a global aerospace and defense company that operates through three principal business segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The company provides advanced aerospace and defense products and aftermarket service solutions for civil and military aircraft manufacturers, commercial airlines, and defense and commercial space operations **[0000101829-24-000016_exhibit101-2024x05x31formsd.htm:1]** **[0000101829-24-000008_rtx-20231231.htm:4]** **[0000101829-24-000008_rtx-20231231.htm:177]**. RTX sells electric power systems, environmental control systems, flight control systems, integrated avionics, aircraft engines, and advanced capabilities in integrated air and missile defense, smart weapons, missiles, and advanced sensors **[0000101829-24-000016_exhibit101-2024x05x31formsd.htm:1]** **[0000101829-24-000008_rtx-20231231.htm:177]** **[0000101829-24-000008_rtx-20231231.htm:5]** **[0000101829-24-000016_exhibit101-2024x05x31formsd.htm:2]**.

1. **Collins Aerospace** - Provides advanced aerospace and defense products and aftermarket service solutions for civil and military aircraft manufacturers, commercial airlines, and defense and commercial space operations. Offerings include electric power systems, environmental control systems, flight control systems, and integrated avionics **[0000101829-24-000016_exhibit101-2024x05x31formsd.htm:1]** **[0000101829-24-000008_rtx-20231231.htm:4]** **[0000101829-24-000008_rtx-20231231.htm:177]**.
   
2. **Pratt & Whitney** - Supplies aircraft engines for commercial, military, business jet, and general aviation customers. Produces engines for wide- and narrow-body aircraft and military aircraft such as the F-35 Lightning II **[0000101829-24-000016_exhibit101-2024x05x31formsd.htm:1]** **[0000101829-24-000008_rtx-20231231.htm:177]** **[0000101829-24-000008_rtx-20231231.htm:5]**.

3. **Raytheon** - Delivers advanced capabilities in integrated air and missile defense, smart weapons, missiles, and advanced sensors for U.S. and foreign government and commercial customers **[0000101829-24-000016_exhibit101-2024x05x31formsd.htm:2]**.

71703ba80cd2ed6482f4eb749863164566883ffa9942ef10d52426e1ce820289

Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from / Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

74ad6e2b7b93657f86426e3c5aa3b7c078028d102e68c6af8ecf59ef0eba01c9

| Segment / Quarter | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Collins Aerospace ($ million) | **5,662**  **[0000101829-23-000005_a2023-01x248xkerexhibit99.htm:2]**  | **5,581**  **[0000101829-23-000013_a2023-04x258xkerexhibit99.htm:2]**  | **5,850**  **[0000101829-23-000030_a2023-07x258xkerexhibit991.htm:2]**  | **6,629**  **[0000101829-23-000037_rtx-20230930.htm:35]**  | **7,000**  **[RTX_3370587_5]**  | **6,673**  **[0000101829-24-000012_rtx-20240331.htm:30]**  | **6,999**  **[0000101829-24-000027_rtx-20240630.htm:33]**  | **7,075**  **[0000101829-24-000036_a2024-10x228xkerexhibit99.htm:1]**  |
| Pratt & Whitney ($ million) | **5,700**  **[RTX_3141172_4]**  | **5,230**  **[0000101829-23-000013_a2023-04x258xkerexhibit99.htm:2]**  | **5,700**  **[RTX_3255351_3]**  | **926**  **[0000101829-23-000037_rtx-20230930.htm:35]**  | **6,400**  **[RTX_3370587_5]**  | **6,456**  **[0000101829-24-000012_rtx-20240331.htm:30]**  | **6,802**  **[0000101829-24-000027_rtx-20240630.htm:33]**  | **7,239**  **[0000101829-24-000036_a2024-10x228xkerexhibit99.htm:2]**  |
| Raytheon Intelligence & Space (RIS) ($ million) | **3,500**  **[RTX_3141172_4]**  | **3,565**  **[0000101829-23-000013_a2023-04x258xkerexhibit99.htm:2]**  | **3,655**  **[0000101829-23-000032_rtx-20230630.htm:31]**  | N/A | N/A | N/A | N/A | N/A |
| Raytheon Missiles & Defense (RMD) ($ million) | **4,100**  **[RTX_3141172_5]**  | **3,671**  **[0000101829-23-000013_a2023-04x258xkerexhibit99.htm:2]**  | **4,000**  **[0000101829-23-000032_rtx-20230630.htm:31]**  | N/A | N/A | N/A | N/A | N/A |
| Raytheon ($ million) | N/A | N/A | N/A | **6,472**  **[0000101829-23-000037_rtx-20230930.htm:35]**  | **6,886**  **[0000101829-24-000005_a2024-01x238xkerexhibit99.htm:4]**  | **6,659**  **[0000101829-24-000012_rtx-20240331.htm:30]**  | **6,511**  **[0000101829-24-000027_rtx-20240630.htm:33]**  | **6,386**  **[0000101829-24-000036_a2024-10x228xkerexhibit99.htm:2]**  |

141a934015813393a17a1b13e9682abdef0afd086e617675f5a0e3121accea7f

1. Given the challenges in the airborne and space systems leading to slower growth, can you elaborate on the specific strategies you're implementing to strengthen these areas, and what is the expected time frame for seeing tangible results?  **[RTX_3403179_20]** 
2. With the ongoing evaluation of your space business portfolio, how do you plan to address unprofitable segments, and what criteria will determine whether you invest further or exit these markets?  **[RTX_3403179_20]** 
3. Considering the importance of your GTF fleet management plan and the progress of powdered metal inspections, how confident are you in your current assumptions about fallout rates and financial impacts, and what potential risks could alter your outlook?  **[RTX_3403179_1]** 
4. As new defense technology companies gain traction, such as Palantir, how does RTX plan to stay competitive, and do you see these companies as competitive threats or potential partners?  **[RTX_3403179_14]** 
5. With the expectation of flat commercial OE at Collins and reliance on restarting shipments to Boeing, what contingency plans are in place if shipments don't resume as expected, and how will this affect your growth projections?  **[RTX_3403179_4]** 

9beff05f030facfb4212fa1dddd654a294ac5169b4019c0c27a3b0f83651b04d

Defense Backlog ($ Billion)

Bookings for AN/SPY-6(V) Radars ($ Million)

Bookings for Landsat Next Instrument Suite ($ Million)

Bookings for Patriot Air Defense Systems ($ Billion)

Bookings for Guidance Enhanced Missiles (GEM-T) ($ Billion)

Remaining Performance Obligations (RPO) ($ Billion)

5b0dc045a59cae99cafd59dcd6ab790b69e1a0ba3a7c15fac2b2b17ea3401bb5

f36c419398e89de912ff9b26310bf5878c7cf9cba188df8d05ea3dde35bb6f5f

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted Sales**: $79.25 billion to $79.75 billion; 8% to 9% organic sales growth  **[RTX_3403179_4]** .
  2. **Adjusted EPS**: $5.50 to $5.58  **[RTX_3403179_4]** .
  3. **Free Cash Flow**: Approximately $4.7 billion  **[RTX_3403179_5]** .
  4. **Collins Aerospace**:
     - Sales growth: High single digits (low end).
     - Operating profit: $575 million to $650 million  **[RTX_3403179_6]** .
  5. **Pratt & Whitney**:
     - Sales growth: Mid-teens (higher end).
     - Operating profit: $475 million to $525 million  **[RTX_3403179_6]** .
  6. **Raytheon**:
     - Sales growth: Mid-single digits organically.
     - Operating profit: $200 million to $250 million  **[RTX_3403179_7]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted Sales**: $78.75 billion to $79.5 billion; 8% to 9% organic sales growth  **[RTX_3394272_5]** .
  2. **Adjusted EPS**: $5.35 to $5.45  **[RTX_3394272_5]** .
  3. **Free Cash Flow**: Approximately $4.7 billion  **[RTX_3394272_5]** .
  4. **Collins Aerospace**:
     - Sales growth: High single digits.
     - Operating profit: $650 million to $725 million  **[RTX_3394272_6]** .
  5. **Pratt & Whitney**:
     - Sales growth: Mid-teens.
     - Operating profit: $400 million to $475 million  **[RTX_3394272_6]** .
  6. **Raytheon**:
     - Sales growth: Mid-single digits organically.
     - Operating profit: $125 million to $200 million  **[RTX_3394272_7]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Full Year Sales**: $78 billion to $79 billion; 7% to 8% organic growth  **[RTX_3380259_4]** .
  2. **Adjusted EPS**: $5.25 to $5.40  **[RTX_3380259_4]** .
  3. **Free Cash Flow**: Approximately $5.7 billion  **[RTX_3380259_4]** .
  4. **Collins Aerospace**:
     - Sales growth: Mid- to high single digits.
     - Operating profit: $650 million to $725 million  **[RTX_3380259_6]** .
  5. **Pratt & Whitney**:
     - Sales growth: Low double digits.
     - Operating profit: $400 million to $475 million  **[RTX_3380259_6]** .
  6. **Raytheon**:
     - Sales growth: Low to mid-single digits.
     - Operating profit: $100 million to $200 million  **[RTX_3380259_7]** .
  7. **Defense Book-to-Bill Ratio**: Over 1.1  **[RTX_3380259_23]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Sales**: $78 billion to $79 billion; 7% to 8% organic growth  **[RTX_3370587_7]** .
  2. **Adjusted EPS**: $5.25 to $5.40  **[RTX_3370587_7]** .
  3. **Free Cash Flow**: About $5.7 billion  **[RTX_3370587_7]** .
  4. **Segment Profit Growth**: $2.3 billion improvement  **[RTX_3370587_7]** .
  5. **CapEx**: $100 million headwind  **[RTX_3370587_7]** .
  6. **Payments Related to Powder Metal Impacts**: $1.3 billion headwind  **[RTX_3370587_7]** .
  7. **Interest Expense**: $500 million headwind  **[RTX_3370587_7]** .
  8. **Pension Cash Recovery**: $300 million headwind  **[RTX_3370587_7]** .
  9. **Tax Rate**: Approximately 19.5%  **[RTX_3370587_7]** .
  10. **Collins Aerospace**:
      - Sales growth: Mid- to high single digits.
      - Operating profit: $650 million to $725 million  **[RTX_3370587_7]** .
  11. **Pratt & Whitney**:
      - Sales growth: Low double digits.
      - Operating profit: $400 million to $475 million  **[RTX_3370587_7]** .
  12. **Raytheon**:
      - Sales growth: Low to mid-single digits.
      - Operating profit: $100 million to $200 million  **[RTX_3370587_8]** .
  13. **Sales Eliminations**: 10% increase  **[RTX_3370587_8]** .

78110469ec474a3c63d538d5c414eeda77a745ec3e53ab2217cedf0c8ac9b355

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

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| Name                  | Position                                           | Start Date         | Short Bio                                                                                                                                                                                                 |
|-----------------------|----------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Christopher T. Calio  | President and Chief Executive Officer              | May 2, 2024        | Christopher T. Calio is the President and Chief Executive Officer of RTX Corporation. He has held this role since May 2, 2024. Previously, he was President and COO of RTX Corporation from March 2023 to December 2023  **[0000101829-24-000008_rtx-20231231.htm:187]** **[0001308179-24-000096_rtx4243711_def14a.htm:18]** .                |
| Kevin G. DaSilva      | Corporate Vice President, Treasurer                | April 2020         | Kevin G. DaSilva has been the Corporate Vice President, Treasurer of RTX Corporation since April 2020. He was previously Vice President and Treasurer at Raytheon Company. As of February 2024, he is 60 years old  **[0000101829-24-000008_rtx-20231231.htm:187]** .                         |
| Shane G. Eddy         | President, Pratt & Whitney                         | March 2022         | Shane G. Eddy is the President of Pratt & Whitney, a position he has held since March 2022. He was previously the Senior Vice President and COO at Pratt & Whitney  **[0000101829-24-000008_rtx-20231231.htm:187]** .                                                                         |
| Gregory J. Hayes      | Chairman and Chief Executive Officer               | June 2021 (Chairman), November 2014 (CEO) | Gregory J. Hayes has been Chairman of RTX Corporation since June 2021 and CEO since November 2014. He has extensive experience in executive leadership and the aerospace and defense industry  **[0000101829-24-000008_rtx-20231231.htm:187]** **[0001308179-24-000096_rtx4243711_def14a.htm:20]** **[0001308179-23-000143_rtx4101921-def14a.htm:22]** .                                        |
| Philip J. Jasper      | President, Raytheon                                | January 2024       | Philip J. Jasper is the President of Raytheon, a position he has held since January 2024. He was previously President of Mission Systems at Collins Aerospace  **[0000101829-24-000008_rtx-20231231.htm:187]** **[0001225208-24-000993_xslF345X02/doc3.xml:0]** .                                                                            |
| Amy L. Johnson        | Corporate Vice President, Controller               | September 2021     | Amy L. Johnson has been the Corporate Vice President and Controller of RTX Corporation since September 2021. She previously held finance positions at Pratt & Whitney  **[0000101829-24-000008_rtx-20231231.htm:187]** .                                                                     |
| Ramsaran Maharajh, Jr.| Executive Vice President and General Counsel       | December 2021      | Ramsaran Maharajh, Jr. has been the Executive Vice President and General Counsel of RTX Corporation since December 2021. He held various legal positions at Raytheon Technologies Corporation  **[0000101829-24-000008_rtx-20231231.htm:187]** **[0000101829-23-000009_rtx-20221231.htm:200]** .                                          |
| Neil G. Mitchill, Jr. | Executive Vice President and Chief Financial Officer| April 2021         | Neil G. Mitchill, Jr. has been the Executive Vice President and CFO of RTX Corporation since April 2021. He has held various financial roles at Raytheon Technologies Corporation and Pratt & Whitney  **[0000101829-24-000008_rtx-20231231.htm:187]** **[0001308179-24-000096_rtx4243711_def14a.htm:78]** .                                  |
| Stephen J. Timm       | President, Collins Aerospace                       | February 2020      | Stephen J. Timm is the President of Collins Aerospace, a position he has held since February 2020. He has been with RTX for 26 years and received a salary increase in 2022 to align with the CPG median  **[0000101829-24-000008_rtx-20231231.htm:187]** **[0001308179-23-000143_rtx4101921-def14a.htm:78]** **[0001308179-23-000073_rtx4101921-pre14a.htm:78]** .                             |
| Dantaya M. Williams   | Executive Vice President & Chief Human Resources Officer | June 2020         | Dantaya M. Williams is the Executive Vice President & Chief Human Resources Officer at RTX Corporation, a position she has held since June 2020. She was previously Vice President of Human Resources for Pratt & Whitney  **[0000101829-24-000008_rtx-20231231.htm:188]** .                  |
| Troy Brunk            | President, Collins Aerospace                       | July 17, 2024      | Troy Brunk was appointed as the President of Collins Aerospace on July 17, 2024. He is a 30-year veteran in the aerospace and defense industry and has led several strategic business units at Collins Aerospace  **[0000101829-24-000022_a2024-07x17exhibit99.htm:0]** **[0000101829-24-000022_rtx-20240717.htm:1]** .                      |
| Heather Robertson     | President, Collins' Mission Systems Strategic Business Unit | July 17, 2024    | Heather Robertson is the President of Collins' Mission Systems Strategic Business Unit at RTX. She is a 24-year company veteran and assumed her role as part of a planned leadership transition announced on July 17, 2024  **[0000101829-24-000022_a2024-07x17exhibit99.htm:0]** .               |

5fe91ed4500328b7115f99d5b2c4b798148390263bfd16dcfda393b74e850d6d

| Program Details            | Program 1                  | Program 2                  |
|----------------------------|----------------------------|----------------------------|
| Approval Date              | October 21, 2023  **[0000101829-24-000038_rtx-20240930.htm:83]**        | October 24, 2023  **[0000101829-24-000038_rtx-20240930.htm:34]**        |
| End Date/Duration          | N/A                        | Settled in September 2024  **[0000101829-24-000038_rtx-20240930.htm:34]**  |
| Total additional amount    | **$11 billion**  **[0000101829-24-000038_rtx-20240930.htm:83]**         | **$10 billion**  **[0000101829-24-000038_rtx-20240930.htm:34]**         |
| Remaining authorization    | **$0.7 billion**  **[0000101829-24-000038_rtx-20240930.htm:74]**        | N/A                        |
| Details                    | Replaces December 2022 program; part of a $36-$37 billion capital return commitment through 2025  **[0000101829-24-000008_rtx-20231231.htm:62]** **[RTX_3361674_1]** **[0000101829-23-000037_rtx-20230930.htm:80]**  | Fully executed ASR agreements  **[0000101829-24-000038_rtx-20240930.htm:34]**  |

a39d2e0305664dc6f0bd0bf48d16843bd6a52f769e7daea3c4c2bbcaaec66649

United States

Europe

Asia Pacific

Middle East and North Africa

Other regions

- Canada and All Other

U.S. Exports

Total Revenue

f373ff8c33e916733edb4a1f4cefdc82a0485f3cbedd7cf027106dd1f13b1d49

**Annual guidance for FY 2024:**
- **Adjusted Sales**: $79.25B to $79.75B; 8% to 9% organic growth  **[RTX_3403179_4]**  (raised from $78.75B to $79.50B; 8% to 9% organic growth  **[RTX_3394272_5]** )  
- **Adjusted EPS**: $5.50 to $5.58  **[RTX_3403179_4]**  (raised from $5.35 to $5.45  **[RTX_3394272_5]** )  
- **Free Cash Flow**: Approximately $4.7B  **[RTX_3403179_5]**  (no change from prior guidance  **[RTX_3394272_5]** )  

- **Collins Aerospace sales growth**: High single digits (low end)  **[RTX_3403179_6]**  (no change from prior guidance  **[RTX_3394272_6]** )  
- **Collins Aerospace operating profit**: $575M to $650M  **[RTX_3403179_6]**  (lowered from $650M to $725M  **[RTX_3394272_6]** )  

- **Pratt & Whitney sales growth**: Mid-teens (higher end)  **[RTX_3403179_6]**  (raised from mid-teens  **[RTX_3394272_6]** )  
- **Pratt & Whitney operating profit**: $475M to $525M  **[RTX_3403179_6]**  (raised from $400M to $475M  **[RTX_3394272_6]** )  

- **Raytheon sales growth**: Mid-single digits organically  **[RTX_3403179_7]**  (no change from prior guidance  **[RTX_3394272_7]** )  
- **Raytheon operating profit**: $200M to $250M  **[RTX_3403179_7]**  (raised from $125M to $200M  **[RTX_3394272_7]** )  

bd23f4f2084dea311aea7f0d87f9aeb0a0fea1e8c900c10dc4089142b3369add

- RTX is expected to see **strong profit growth from Pratt & Whitney's aftermarket**, with an anticipated **$500 million** drop-through, supported by the profitable **GTF** (Geared Turbofan) aftermarket, which is **growing at a robust rate** and has been **profitable for several years**. The upcoming **GTF Advantage (GTFA)** entry into service at the end of the year will further enhance margins and performance.  **[RTX_3413366_14]** **[RTX_3413366_20]**
- **Collins Aerospace** is expected to achieve around **40% incremental margins** and is on a path to return to **pre-COVID margin levels**, driven by significant cost reductions and productivity improvements. Despite lower OE volumes than anticipated, Collins has compensated for under-absorption and has significant runway for future growth and margin expansion.  **[RTX_3413366_20]**
- RTX is well-positioned in key **defense programs**, with the **Air Force's increased funding for NGAD** (Next Generation Air Dominance) being a significant tailwind. RTX has been developing their **NGAP** (Next Generation Adaptive Propulsion) solution, has undergone rigorous testing with pleasing results, and believes they have a **very competitive offering**. This positions Pratt & Whitney for **mid-single-digit growth** in the military side of their business.  **[RTX_3413366_11]**

74dd4d84284499db0b2100a54450eb9f094496ba374537d5a5740df06a84adca

- RTX anticipates **negative engine margin headwinds of $150 million to $200 million at Pratt & Whitney** in 2025 due to increased volumes of OE engine deliveries, which could pressure profitability.  **[RTX_3413366_14]**
- **Supply chain constraints**, particularly with **rocket motors**, where RTX is "falling behind" on some programs, may hinder the company's ability to deliver on its backlog and impact revenue growth.  **[RTX_3413366_17]**
- **Declining pension income** is expected to result in a **$0.15 EPS headwind** in 2025, with further decreases anticipated in future years, affecting overall profitability.  **[RTX_3413366_18]**

d25b8c6fb7da9bc035d9b652466c4066897e6e6985e082a3fc07177b017ddd44

1. **Powder Metal Costs and GTF Cash Step-down**  
   **Q:** Are we on track for the $800 million to $1 billion cash step-down in 2026 for GTF?  
   **A:** Yes, the outlook remains consistent with underlying assumptions intact.  **[RTX_3413366_9]**  AOGs have been stable, and MRO output is key.  **[RTX_3413366_9]**  PW1100 output was up **30%** last year, and they plan for above **30%** growth in 2025.  **[RTX_3413366_9]**  On the cash side, they ended 2024 at about **$1.1 billion**, and expect **$1.1 to $1.3 billion** for 2025.  **[RTX_3413366_9]**  They have the residual amount parked in 2026 and feel good about the profile laid out.  **[RTX_3413366_9]** 

2. **Free Cash Flow Outlook Beyond 2025**  
   **Q:** Will components of 2025 free cash flow normalize or reverse in 2026, apart from powder metal costs?  
   **A:** Operational free cash flow for 2025 is about **$8.4 billion** after adding back the **$1.2 billion** powder metal impact.  **[RTX_3413366_12]**  There's a **$1.3 billion** working capital tailwind included, and RTX believes there's additional runway to improve working capital beyond 2025.  **[RTX_3413366_12]**  There's also a nonrecurring international tax payment of a couple hundred million dollars in 2025.  **[RTX_3413366_12]** 

3. **GTF Aftermarket Margins and Collins Incrementals**  
   **Q:** Where are you booking GTF aftermarket today, and what's the right level of Collins incremental margins?  
   **A:** GTF aftermarket margins are near double digits and have been profitable for several years.  **[RTX_3413366_20]**  They expect continued expansion as contracts age and pricing improves.  **[RTX_3413366_20]**  Collins is expecting a **40%** incremental margin in 2025, with further runway to return to pre-COVID margins in the long term.  **[RTX_3413366_20]** 

4. **Segment Margin Targets Achievability**  
   **Q:** Are the segment margin targets from 2021 still achievable?  
   **A:** RTX believes all margin targets are achievable in the long term.  **[RTX_3413366_21]**  Collins shows significant margin improvement, with **150 basis points** of margin expansion in the 2025 outlook.  **[RTX_3413366_21]**  Despite headwinds, underlying fundamentals and margin runway remain strong across businesses.  **[RTX_3413366_21]** 

5. **Supply Chain Constraints**  
   **Q:** Where are you still seeing supply chain constraints?  
   **A:** Constraints remain in structural castings, isothermal forgings, microelectronics, and rocket motors.  **[RTX_3413366_17]**  Structural castings were up **12%** year-over-year, and Collins has improved microelectronics lead times.  **[RTX_3413366_17]**  Rocket motors show progress on some programs but need to ramp on others.  **[RTX_3413366_17]** 

6. **Conservative Aerospace OEM Guidance**  
   **Q:** Is your 2025 aerospace OEM guidance conservative due to contingencies or inventory?  
   **A:** RTX took a prudent approach at Collins due to some inventory in the channel, targeting specific narrow-body systems.  **[RTX_3413366_13]**  They expect the ramp to continue and are positioned to meet rising rates if growth accelerates.  **[RTX_3413366_13]**  Pratt's Large Commercial Engines were up **14%** in unit deliveries last year, expecting similar growth in 2025.  **[RTX_3413366_13]** 

7. **Productivity Initiatives and Priorities**  
   **Q:** What are your top priorities, and how are you addressing productivity?  
   **A:** The top priority is executing on a **$218 billion** backlog and commitments, including GTF recovery.  **[RTX_3413366_16]**  Productivity is enhanced through the core operating system, automation, and AI investments.  **[RTX_3413366_16]**  They aim for **11%** sales growth with only **2%** headcount growth.  **[RTX_3413366_16]** 

8. **Alignment with New Spending Priorities**  
   **Q:** How is Raytheon aligned with new spending priorities and international demand?  
   **A:** Demand remains strong with a **$63 billion** backlog and **1.48** book-to-bill.  **[RTX_3413366_10]**  International demand is robust, with NATO countries increasing spending, Poland nearing **5%** of GDP.  **[RTX_3413366_10]**  This provides a tailwind for RTX.  **[RTX_3413366_10]** 

9. **Status of NGAP Program**  
   **Q:** What's the status of NGAP and its impact on Pratt & Whitney?  
   **A:** RTX is pleased with NGAP progress, with rigorous testing yielding positive results.  **[RTX_3413366_11]**  Additional funding helps continue development and reduce risks.  **[RTX_3413366_11]**  Along with the F135 Engine Core Upgrade, it contributes to mid-single-digit growth for Pratt's military business.  **[RTX_3413366_11]** 

10. **Pension Headwinds and Trends**  
    **Q:** Can you touch on pension headwinds in 2025 and beyond?  
    **A:** RTX expects a **$0.15** EPS headwind in 2025 due to pension de-risking.  **[RTX_3413366_18]**  Plans are well-funded at **104%** funded status, and income will decline slightly each year after 2025.  **[RTX_3413366_18]** 

11. **Collins Aftermarket Growth Components**  
    **Q:** Can you disaggregate provisioning versus repair in Collins aftermarket growth?  
    **A:** Parts and repair are expected to be up high single digits to over **10%**.  **[RTX_3413366_19]**  Provisioning aligns with OE growth at mid-single digits, and mods and upgrades will be over **10%**.  **[RTX_3413366_19]** 

12. **OE Growth and Pratt's Free Cash Flow**  
    **Q:** How does OE growth relate to GTF deliveries and impact on Pratt's EBIT and free cash flow?  
    **A:** Pratt's profit growth will come mainly from aftermarket with about **$500 million** drop-through.  **[RTX_3413366_14]**  Negative engine margin headwind is expected to be **$150 million to $200 million**.  **[RTX_3413366_14]**  GTF aftermarket is profitable and expected to grow further.  **[RTX_3413366_14]** 

13. **Age of Fleet and Aftermarket Growth**  
    **Q:** How does fleet age affect aftermarket growth at Collins?  
    **A:** The installed base continues to grow, with warranty expirations increasing each year, providing tailwinds.  **[RTX_3413366_15]**  Collins has a **$160 billion** installed base, leading to robust aftermarket demand.  **[RTX_3413366_15]** 

14. **Resuming 737 MAX Avionics Deliveries**  
    **Q:** Has Boeing restarted issuing purchase orders for 737 MAX avionics equipment?  
    **A:** Yes, RTX is back working with Boeing on the ramp and continues to engage closely.  **[RTX_3413366_12]** 

15. **Iron Dome Opportunity**  
    **Q:** What does Iron Dome mean for RTX?  
    **A:** RTX is a major partner in Israel's Iron Dome and sees significant opportunity in the U.S..  **[RTX_3413366_16]**  They are ready to engage as the program takes shape and view it as core to their capabilities.  **[RTX_3413366_16]** 

009c96e32aa2e957325babb8553a065ce44bc46bc57b3cad175c2993eccae3bd

RTX projects a $500M GTF aftermarket drop-through in 2024, boosting Pratt & Whitney profits even as engine margin headwinds of $150–$200M loom for 2025. Meanwhile, Collins expects ~40% incremental margins, positioning RTX for strong growth despite supply chain pressures.

f2fd324415914e3efdad2adb559a3ddc3b99b3464f827cede2efde66f3e7f3d9

ae5d2e51bf083bef13d7c7f7547c7971abc7a36c30c71c212c1b016923a72e23

**Annual guidance for FY 2025:**

- **Adjusted Sales**: $83B to $84B  **[RTX_3413366_0]** **[RTX_3413366_6]**  (raised from $79.25B to $79.75B  **[RTX_3403179_4]** )  
- **Organic sales growth**: 4% to 6%  **[RTX_3413366_0]** **[RTX_3413366_6]**  (lowered from 8% to 9%  **[RTX_3403179_4]** )  
- **Adjusted EPS**: $6.00 to $6.15  **[RTX_3413366_0]** **[RTX_3413366_6]**  (raised from $5.50 to $5.58  **[RTX_3403179_4]** )  
- **Free Cash Flow**: $7B to $7.5B  **[RTX_3413366_0]** **[RTX_3413366_6]**  (raised from ~$4.7B  **[RTX_3403179_5]** )  
- **Segment Profit Growth**: 10% to 13%  **[RTX_3413366_0]**  (no prior guidance)  
- **Capital Expenditures (CapEx)**: $2.5B to $2.7B  **[RTX_3413366_6]**  (no prior guidance)  
- **Commercial Aftermarket Growth (company-wide)**: ~10%  **[RTX_3413366_6]**  (no prior guidance)  
- **Commercial OE Sales Growth**: Mid-single digits  **[RTX_3413366_6]**  (no prior guidance)  
- **Defense Sales Growth**: Mid-single digits  **[RTX_3413366_6]**  (no prior guidance)

- **Collins Aerospace Sales Growth (Adjusted)**: Low single digits  **[RTX_3413366_6]**  (lowered from high single digits  **[RTX_3403179_6]** )  
- **Collins Aerospace Sales Growth (Organic)**: Mid-single digits  **[RTX_3413366_6]**  (lowered from high single digits  **[RTX_3403179_6]** )  
- **Collins Aerospace Commercial Aftermarket Growth**: High single digits to low double digits  **[RTX_3413366_6]**  (no prior guidance)  
- **Collins Aerospace Adjusted Operating Profit Growth**: $500M to $600M year-over-year  **[RTX_3413366_7]**  (no prior guidance)

- **Pratt & Whitney Sales Growth (Adjusted & Organic)**: High single digits  **[RTX_3413366_7]**  (lowered from mid-teens  **[RTX_3403179_6]** )  
- **Pratt & Whitney Commercial Aftermarket Growth**: Low double digits  **[RTX_3413366_7]**  (no prior guidance)  
- **Pratt & Whitney Commercial OE Sales Growth**: Mid-single digits  **[RTX_3413366_7]**  (no prior guidance)  
- **Pratt & Whitney Military Sales Growth**: Mid-single digits  **[RTX_3413366_7]**  (no prior guidance)  
- **Pratt & Whitney Adjusted Operating Profit Growth**: $325M to $400M year-over-year  **[RTX_3413366_7]**  (no prior guidance)

- **Raytheon Sales Growth (Organic)**: Mid-single digits  **[RTX_3413366_7]**  (no change from mid-single digits  **[RTX_3403179_7]** )  
- **Raytheon Adjusted Operating Profit Growth**: $150M to $225M year-over-year  **[RTX_3413366_7]**  (no prior guidance)

- **Working Capital Improvement**: ~$1.3B year-over-year  **[RTX_3413366_6]**  (no prior guidance)  
- **Divestitures Impact**: $80M (Collins Actuation) and $35M (Cybersecurity) headwinds  **[RTX_3413366_7]** **[RTX_3413366_6]**  (no prior guidance)  
- **Powder Metal Compensation Impact**: $1.1B to $1.3B  **[RTX_3413366_6]**  (no prior guidance)  
- **R&D Spending**: Over $7.5B  **[RTX_3413366_1]**  (no prior guidance)

a0fcc2d8583916a0448ff2e3620d3eed4b3bf22ed5f1332fb15fed3f047c277e

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP    | 1947  **[0000101829-24-000008_rtx-20231231.htm:114]**    | Present  | Current auditor   |

91b193219a8eae8a6504ce7128ce51432f476fd25f4ef2e9fdfb82ebb4902a38

060b6584dd2aa96665fd8d8c26c04f54cd8e71a471318acbc9cbcd14269f93dc

c1786669412a327f1f7f0ce26c643534b578cd243d541f456f337589235dc250

9765bd19813be7c3d72387e4dad290c39cf1dc4821c0bbb44bcdb91f868494ca

f6f9da396684d8298aec95e19fd12236a55aaa5a081c6fdde8e08e0704c93d38

Total backlog (USD billions)

Commercial backlog (USD billions)

Defense backlog (USD billions)

Defense bookings (USD billions)

Gross favorable EAC adjustments (USD millions)

Gross unfavorable EAC adjustments (USD millions)

Total net EAC adjustments (USD millions)

30c762b69a8e0be74efc577433150fec19ec3623cb738bab9bf6872d7495bae0

- RTX is experiencing **strong free cash flow generation**, with **$4 billion** year-to-date and expecting **another strong operational fourth quarter**, projecting **90% to 100% free cash flow conversion** against adjusted net income in the long term.  **[RTX_3403179_13]**
- The company has an **exceptionally strong backlog** in both **defense and commercial segments**, which is anticipated to drive productivity improvements and **margin expansion** across all three businesses.  **[RTX_3403179_11]**
- RTX is investing heavily in **R&D and innovation**, leveraging **RTX Ventures** to make **promising investments** that will enhance their product portfolio, maintaining a **fantastic product portfolio** critical to the U.S. and allies for decades to come.  **[RTX_3403179_14]**

06d429ffb6c262df3a904fd3fe8d3738d34a17c129b0bbd1f17226023d1e6305

- **Significant cash flow impact due to the powdered metal issue, with disbursements of about \$1.3 billion in 2024 and \$1.5 billion in 2025, affecting financial performance.**  **[RTX_3370587_11]**
- **Challenges in ramping up production of full-life discs are leading to potential bottlenecks in meeting customer demands, including commitments to Airbus.**  **[RTX_3370587_18]**
- **The military business at Collins Aerospace is experiencing slow growth, with military sales flat in 2023 and expected to grow only low to mid-single digits in 2024, which may dampen overall growth prospects.**  **[RTX_3370587_21]**

07f321c40b3d157cefbb94d2eb357207de4291312a0d46c104377a245edfe366

- **Strong aftermarket performance at Collins Aerospace**, with **aftermarket sales up 26%** and **provisioning up 42%** over the full year, indicating robust demand and potential for continued revenue growth.  **[RTX_3370587_21]**
- **RTX expects a 20% year-over-year increase in large commercial engine deliveries in 2024**, expressing confidence in meeting Airbus's requirements, which suggests significant growth potential in the aerospace sector.  **[RTX_3370587_18]**
- **Cost reduction initiatives and operational improvements at Collins Aerospace and Pratt & Whitney** are expected to drive **margin expansion** and **profitability**, including moving engineering and manufacturing to lower-cost locations and ramping up production capacity.  **[RTX_3370587_21]** ,  **[RTX_3370587_18]** ,  **[RTX_3370587_16]**

9c3cd1fd57df180fc2cfc49cf04d5e495997a042486702f0239dffed005eade4

- **Underperformance in certain business segments, particularly airborne and space systems.** Christopher Calio acknowledged these areas have been more challenging and are under evaluation for strategic adjustments.  **[RTX_3403179_20]**
- **Challenges in balancing demands for the GTF engine between spare parts and original equipment deliveries.** RTX is allocating resources between spares and MRO to support the fleet, indicating pressure on production and supply chain constraints.  **[RTX_3403179_9]**
- **Potential delays in strategic pivots affecting future growth.** The evaluation and potential shift in strategy, especially in the space domain, may take time as these are long-cycle businesses, potentially impacting growth in the near term.  **[RTX_3403179_20]**

3402d2781e47c2407d02136ade8090cb1af9eeb3599b80d32e1622b5acad94d5

1. **Cash Flow Impact from Powdered Metal Issue**  
   **Q:** What's the cash flow hit from the powdered metal issue?  
   **A:** The cash flow impact from the powdered metal issue in **2023 was essentially zero**, as cash flows shifted to the right.  **[RTX_3370587_11]**  We moved about half of that into **2024**, amounting to **$1.3 billion**.  **[RTX_3370587_11]**  We're still holding **$1.5 billion** in our **2025** outlook, with the rest spilling into early **2026**.  **[RTX_3370587_11]** 

2. **GTF Situation – AOGs and Cash Impact**  
   **Q:** Can you update us on the GTF AOG scheduling and cash impact?  
   **A:** We expect the peak number of AOGs to be in **Q1 2024**, then trend downward.  **[RTX_3370587_10]**  The peak will be lower than initially assessed because the timing of the AD has shifted, and customers have proactively accelerated some removals.  **[RTX_3370587_10]**  Regarding cash impact, the timing of payments has shifted from the second half of **2023** into **2024**, but the total special support remains at **6% to 7%**.  **[RTX_3370587_10]** 

3. **Pratt & Whitney Margins**  
   **Q:** What's driving margins higher at Pratt & Whitney?  
   **A:** The margin increase is mainly driven by aftermarket sales, which are up in the **low teens**, providing significant drop-through to profit.  **[RTX_3370587_12]**  We're expanding margins on both legacy and GTF aftermarket as volumes grow.  **[RTX_3370587_12]**  OE sales are up **mid-teens**, with engine production increasing about **20%**, leading to better absorption.  **[RTX_3370587_12]**  Military sales are also up **mid-single digits**, contributing to the profit increase.  **[RTX_3370587_12]** 

4. **Raytheon Headwinds and Fixed-Price Programs**  
   **Q:** What's the status of Raytheon's fixed-price development programs?  
   **A:** We've faced headwinds from fixed-price development programs, some with difficult requirements outside our core capabilities.  **[RTX_3370587_14]**  We're adding resources and working with customers to restructure specifications for better outcomes.  **[RTX_3370587_14]**  We expect improvement over the next **12 to 18 months** as we achieve milestones.  **[RTX_3370587_14]**  In **2023**, we had a **$240 million** headwind from negative productivity; in **2024**, we expect a **$200 million** year-over-year improvement.  **[RTX_3370587_14]** 

5. **Incorporation of Full-Life Parts**  
   **Q:** By end of '24, how will full-life parts be incorporated?  
   **A:** We're incorporating full-life powder metal parts in OE engines starting this year, maximizing time on wing for customers.  **[RTX_3370587_13]**  In MRO, we've begun earlier than planned, starting before Q2, and will ramp up throughout the year.  **[RTX_3370587_13]**  Not all shop visits will have full-life parts initially, but we'll reach our targets as planned by year's end.  **[RTX_3370587_13]** 

6. **Bottleneck in Full-Life Disc Production**  
   **Q:** What's the bottleneck in ramping full-life disc production?  
   **A:** The bottleneck is ramping up the powdered metal value stream, including inspection and machining capacity, which needs significant scaling beyond initial expectations.  **[RTX_3370587_18]**  We're focusing on quality, yield, tooling, and maintenance to enable the volume jump.  **[RTX_3370587_18]**  For **2024**, we expect large commercial engine deliveries to be up about **20%** year-over-year and are confident in meeting Airbus' commitments.  **[RTX_3370587_18]** 

7. **RTX Margin Assumptions to 2025**  
   **Q:** How will you achieve 2025 margin targets from 2024 guidance?  
   **A:** We'll achieve our **2025** margin targets through aftermarket growth fueling better absorption and cost reductions at Pratt & Whitney and Collins.  **[RTX_3370587_15]**  Pratt and Collins are within their expected ranges, likely towards the middle to high end.  **[RTX_3370587_15]**  Adjustments at Raytheon have been made, but our overall margin assumptions at the RTX level remain about the same as previously projected.  **[RTX_3370587_15]** 

8. **Risks from AOGs to Customer Financials**  
   **Q:** Are you concerned about financial risks with airlines due to AOGs?  
   **A:** We are actively engaging with our customers to support them through compensation structures and special support.  **[RTX_3370587_17]**  Around **10 to 12** customers are more impacted, and we're working hard to provide fair compensation for the powdered metal AOG situation.  **[RTX_3370587_17]**  We aim to avoid harming our customers' financials and maintain good relationships.  **[RTX_3370587_17]** 

9. **Collins Outlook – Widebody and Interiors**  
   **Q:** How is Collins' outlook driven by widebody and interiors?  
   **A:** Collins' aftermarket is expected to be up **10% or more**, with OE sales up mid- to high single digits.  **[RTX_3370587_19]**  We're seeing a shift from narrow-body to wide-body as a big driver.  **[RTX_3370587_19]**  While wide-body OE margins are thinner, it sets us up well for long-term growth as aftermarket picks up post-warranty.  **[RTX_3370587_19]**  The interiors business is growing but won't return to 2019 levels until about **2026**; we're transforming the cost footprint to improve margins when volume returns.  **[RTX_3370587_19]** 

10. **Collins Growth Outlook and Military Business**  
    **Q:** What's the potential for Collins' top-line growth, and is the military business a drag?  
    **A:** We see potential for top-line growth at Collins, with OE production rates rising and aftermarket strength.  **[RTX_3370587_21]**  The military business isn't a drag; it was flat in **2023** but expected to grow low to mid-single digits in **2024** as supply chain issues improve.  **[RTX_3370587_21]**  We're well-positioned on strategic platforms and are driving structural cost reductions to support margin expansion.  **[RTX_3370587_21]** 

7eac42797d9e1f4af9361cf71270192d6eb5bf674440834fe93be8d31ee3787c

- RTX is experiencing delays in certifying wide-body first-class seats with the **FAA** due to complex requirements, potentially impacting revenue in their Collins interiors business.  **[RTX_3394272_24]**
- Supply chain disruptions, such as the need to relocate **787 heat exchanger** production out of **Russia** due to the conflict in Ukraine, have caused delays in ramping up output to meet **Boeing's demand**.  **[RTX_3394272_24]**
- Despite increasing sales guidance, RTX did not raise profit guidance due to **higher product costs**, **lower OE rates**, and **increased R&D expenses**, particularly in the defense segments of **Pratt & Whitney** and **Collins**, which may pressure margins.  **[RTX_3394272_17]**

1c11e5cc5059be8c2410463cf0eb0f5c7fb71a3ab8844c8ebe1a7c321fabca2a

1. **GTF Engine Fleet Management**

   **Q:** Are there milestones indicating risk reduction in the GTF fleet plan?

   **A:** The GTF fleet management plan is a multiyear process, focusing on AOG levels, turnaround times, and MRO output. The company had a strong first quarter, prioritizing MRO output and material flow, including new powdered metal parts. Increased MRO output will relieve the fleet, reducing AOG days and penalties.  **[RTX_3380259_11]** 

2. **Defense Margins and Fixed Price Programs**

   **Q:** How are the fixed price development programs affecting defense margins?

   **A:** Productivity improvements contributed to margin expansion, with a **$58 million** year-over-year improvement in Q1. Challenges remain with fixed price development programs, expected to take **12–18 months** to resolve. Progress has been made, but some headwinds persist as they work through testing and technical milestones.  **[RTX_3380259_14]** 

3. **Pratt & Whitney Aftermarket Guidance**

   **Q:** Given Q1's strong growth, is there risk to achieving full-year Pratt aftermarket guidance?

   **A:** The **9%** aftermarket growth in Q1 was as expected. The company anticipates low-teens growth for the full year and remains confident in hitting **800** V2500 shop visit inductions. Increased content on shop visits and material flow will support continued growth despite some offsets in other programs.  **[RTX_3380259_10]** 

4. **Raytheon Defense Bookings and Outlook**

   **Q:** Can you discuss the defense bookings and outlook for the next 12–24 months?

   **A:** Demand remains strong due to global tensions, with significant bookings in Q1. The company expects continued strong top-line growth and bookings, driven by products like GEM-T, NASAMS, Patriot, AMRAAM, and AIM-9X. International orders constituted about **60%** of Raytheon's Q1 bookings, providing a favorable mix for margins.  **[RTX_3380259_13]** 

5. **Collins Aerospace Margin Expansion**

   **Q:** What drives margin expansion at Collins, and details on the $175M impairment?

   **A:** Margin expansion is driven by aftermarket growth and cost reductions. The **$175 million** charge relates to titanium procurement, securing alternative sources due to supply chain dynamics and sanctions. New agreements resulted in higher purchase costs and impairment of previously capitalized costs but derisk future supply.  **[RTX_3380259_16]** 

6. **737 MAX Impact on Collins**

   **Q:** How do 737 MAX issues affect Collins Aerospace?

   **A:** Collins has significant content on the 737 and 787 platforms. There is some uncertainty around production rates, but the company is working closely with Boeing and has the capacity and material to support their needs. They are prepared to take necessary actions based on Boeing's guidance.  **[RTX_3380259_19]** 

7. **Customer Compensation for GTF**

   **Q:** What's the status of GTF customer compensation agreements?

   **A:** The company has completed about **nine agreements**, representing approximately **one-third** of the GTF fleet. They are close on several other significant agreements. The compensation remains within the previously provided guidance.  **[RTX_3380259_18]** 

8. **Aircraft on Ground Levels**

   **Q:** What is the trajectory of aircraft on ground (AOG) levels?

   **A:** AOG levels are at peak, around **550** aircraft, and are expected to gradually decline. Reduction depends on increasing MRO output, improving turnaround times, and material flow. The focus is on enhancing these factors to alleviate fleet pressures.  **[RTX_3380259_12]** 

9. **European Defense Bookings and FMS Mix**

   **Q:** How does European demand affect bookings and margins?

   **A:** European demand, particularly for integrated air and missile defense, contributes to strong bookings. International orders, especially Foreign Military Sales, are expected to be a multiyear process, favorably impacting margins due to a higher mix of international sales, which were about **60%** of Q1 bookings.  **[RTX_3380259_21]** 

10. **Supply Chain and Production Capacity**

    **Q:** How are supply chain issues and capacity affecting defense execution?

    **A:** The company has seen four consecutive quarters of material receipt growth at Raytheon, indicating supply chain improvements. They are adding production capacity, including expansions in Huntsville and Camden, to meet demand and focus on executing the backlog at required margins.  **[RTX_3380259_17]** 

11. **GTF Shop Visit Turnaround Time**

    **Q:** What is the current GTF wing-to-wing turnaround time?

    **A:** The wing-to-wing turnaround time for GTF engines is within the **250–300 days** range. This depends on the mix of work scopes and material flow. Optimizing work scopes may reduce times, but current figures reflect necessary heavy shop visits.  **[RTX_3380259_22]** 

0ab0f8102b80b9ca36a358077c73f68e6917ffec7274541c471b27abdd6d3791

1. **GTF Compensation Payments**  
   **Q:** Why aren't you paying more to customers affected by GTF issues?  
   **A:** We expect to make about **$1 billion** in payments this year, with over **$300 million** made year-to-date.  **[RTX_3403179_18]**  We're crediting customers as AOGs (Aircraft on Ground) occur and have agreements covering **75%** of AOGs with **28** customers.  **[RTX_3403179_18]**  Payments will ramp up in the fourth quarter, and we remain consistent with our financial assumptions.  **[RTX_3403179_18]** **[RTX_3403179_19]** 

2. **GTF Powdered Metal Parts Progress**  
   **Q:** How are you managing GTF deliveries and insertion of powdered metal parts?  
   **A:** All engines delivered today have full-life powdered metal parts.  **[RTX_3403179_9]** **[RTX_3403179_17]**  We're balancing material allocation in MRO and expect to ramp up insertion of these parts as we head into **2025**.  **[RTX_3403179_17]**  Isothermal forgings are ramped up **38%** year-over-year, aiding production.  **[RTX_3403179_9]** 

3. **Collins Margin Outlook**  
   **Q:** Is the margin expansion at Collins still on track?  
   **A:** We expect margins at Collins to grow but are monitoring OE levels and inflation.  **[RTX_3403179_17]**  Absorption of higher volumes is crucial for better unit costs.  **[RTX_3403179_17]**  We're taking cost reduction actions and focusing on structural improvements to drive margin expansion.  **[RTX_3403179_17]** 

4. **Free Cash Flow Expectations**  
   **Q:** How should we think about free cash flow going forward?  
   **A:** We're confident in achieving **$4.7 billion** in free cash flow this year.  **[RTX_3403179_13]**  Longer term, we see no reason why we won't generate **90% to 100%** free cash flow conversion against adjusted net income.  **[RTX_3403179_13]**  Growth in aftermarket profit is a significant contributor to cash flow growth.  **[RTX_3403179_13]** 

5. **Raytheon Growth Outlook**  
   **Q:** What acceleration should we expect from Raytheon into '25 and beyond?  
   **A:** Demand at Raytheon is incredibly strong, with **$16.6 billion** in bookings and a backlog of **$60 billion**.  **[RTX_3403179_10]**  The international backlog is up over **10** points to **44%**, which will be a tailwind for growth in the coming years.  **[RTX_3403179_10]**  Mix shift is already improving margins by over **100 basis points**.  **[RTX_3403179_10]** 

6. **Productivity Improvements**  
   **Q:** Can you add context to your views on productivity growth?  
   **A:** We're seeing productivity improvements across the business. At Raytheon, we've achieved over **$110 million** in productivity benefits year-over-year, expecting about **$200 million** for the full year.  **[RTX_3403179_11]**  Automation and factory improvements are driving efficiencies that will support margin expansion.  **[RTX_3403179_11]** 

7. **Collins OE and Aftermarket**  
   **Q:** How do you view Collins' OE decline and aftermarket growth?  
   **A:** Collins' OE sales were down due to lower narrow-body volumes and strike impacts.  **[RTX_3403179_12]**  However, the aftermarket is up **9%**, supported by continued flying of older platforms and low retirements.  **[RTX_3403179_12]**  We expect aftermarket strength to continue as these platforms remain in service.  **[RTX_3403179_12]** 

8. **Competitors in Defense Tech**  
   **Q:** How do you view emerging competitors like Palantir?  
   **A:** We see them both as competition and potential partners.  **[RTX_3403179_14]**  While we have strengths in scaling and production, we're learning from their agility and cost-effectiveness.  **[RTX_3403179_14]**  Through RTX Ventures, we're investing in early-stage companies to access new technologies.  **[RTX_3403179_14]** 

9. **Raytheon Airborne and Space Strategy**  
   **Q:** What's your strategy for growth in airborne and space systems?  
   **A:** We're evaluating our portfolio, focusing on strengths like space protection, ISR, and C2.  **[RTX_3403179_20]**  We aim to avoid low-margin fixed-price development programs and instead invest where we can offer profitable growth.  **[RTX_3403179_20]** 

10. **Pratt Military Aftermarket Growth**  
    **Q:** How should we think about military aftermarket growth at Pratt?  
    **A:** We saw **20%** military growth at Pratt in the quarter, with aftermarket aligning with that.  **[RTX_3403179_23]**  As the installed base grows and flight activity ramps up, we expect continued strong growth and margin improvement due to mix shifts.  **[RTX_3403179_23]** 

688811d0a9cda316a121ccdf128afa4cffdf5865d39447e21976907f701e1a7d

- **Strong demand for RTX's defense products** due to the Ukraine supplemental bill, with about **two-thirds of the $60 billion** allocated to Ukraine being addressable with RTX products like **GEM-T, NASAMS, Patriot, AMRAAM, and AIM-9X**.  **[RTX_3380259_13]**
- **Raytheon expects a prolonged period of book-to-bill above 1**, driven by significant orders for products such as **AMRAAM, LTAMDS, Patriot, SPY-6, and SM-3**, supporting multiple years of growth.  **[RTX_3380259_23]**
- **Improved margins at Raytheon** anticipated due to a higher mix of international sales, with **60% of Q1 bookings being international**, providing a favorable tailwind to margins.  **[RTX_3380259_23]**

d71e718bf8a5ce220e570f05bf29cc16ca5a811d44c9200992b374f4805d4880

1. **Free Cash Flow Target**  
   **Q:** Does the free cash flow target for next year still stand?  
   **A:** Management affirmed that the free cash flow target for next year remains achievable, citing strong fundamental business drivers and resilient demand. They acknowledge potential risks like OE rates and supply chain challenges but express confidence based on current visibility.  **[RTX_3394272_15]** 

2. **Cash Flow Gap and DOJ Impact**  
   **Q:** How will the net income to cash flow gap close, and what's the DOJ cash impact beyond 2024?  
   **A:** Management expects the net income to cash flow gap to close over time, highlighting underlying operational free cash flow of **$7–7.5 billion** after adjusting for nonrecurring items. The DOJ settlements will impact cash flow primarily in 2024, with manageable residual payments of about **$50 million per year** thereafter.  **[RTX_3394272_12]** 

3. **Terminated Contract Impact**  
   **Q:** Details on terminated contract, other problem programs, and cash impact?  
   **A:** RTX proactively terminated a significant classified defense contract due to misalignment with core competencies, incurring a cash impact of about **$500 million** in 2024. Management feels they have a better handle on other classified fixed-price development programs and expects minimal lingering costs beyond 2024.  **[RTX_3394272_11]** 

4. **Profit Guidance Unchanged**  
   **Q:** Sales up but profit guidance unchanged; is that conservative?  
   **A:** While sales guidance increased by **$625 million** at the midpoint, profit guidance remains unchanged due to higher production costs, particularly in military programs, under-absorption from lower OE rates, and increased R&D spending. Management is confident in the updated outlook but opts for caution amid several moving pieces.  **[RTX_3394272_17]** 

5. **GTF Fleet Management Plan**  
   **Q:** Any improvements in GTF fleet management plan before 2026?  
   **A:** Management reports that key assumptions for the GTF fleet remain consistent or better, with MRO output up **10%** from Q1 to Q2 and first-half output up over **30%** year-over-year. While they are driving improvements in material flow and processes, no definitive indication of metrics improving before 2026 was provided.  **[RTX_3394272_9]** 

6. **Structural Casting Issues**  
   **Q:** Why are structural casting issues persisting, and what's being done?  
   **A:** Structural castings remain a constraint due to reliance on a few suppliers ramping up simultaneously. RTX is seeing sequential improvements but acknowledges the need for higher increases. They're enhancing demand forecasting, securing long-term agreements, and deploying teams to suppliers to accelerate production.  **[RTX_3394272_16]** 

7. **Production Rates on MAX and 787**  
   **Q:** Have you reduced production rates on MAX and 787?  
   **A:** RTX has adjusted its outlook for Boeing OE rates, reflecting a more gradual increase rather than reduction. They are currently in the low **30s** per month and expect rates to ramp up over the year, aligning with airframers but monitoring the situation closely.  **[RTX_3394272_20]** 

8. **V2500 MRO and GTF Inductions**  
   **Q:** V2500 MRO status and long GTF induction wait times?  
   **A:** V2500 inductions are on track, with **369** inductions in the first half and heavier overhaul work scopes expected in the second half. For GTF engines, while shop turnaround times have improved when material is available, induction wait times remain lengthy due to a backlog of engines awaiting service.  **[RTX_3394272_13]** 

9. **Future Engine Outlook**  
   **Q:** Outlook for future engines and next-gen GTF efficiency?  
   **A:** RTX is focused on the GTF Advantage, nearing certification with over **90%** testing complete, offering additional **1%** fuel burn improvement and **4%** thrust. For future engines, they are investing in technologies like composite fan blades, CMCs, planetary gear systems, and hybrid-electric applications, aiming for further efficiency gains while prioritizing durability and reliability.  **[RTX_3394272_18]** 

10. **Divestitures and Hoist & Winch Deal**  
    **Q:** Update on divestitures and hoist & winch deal contribution?  
    **A:** RTX is pleased with recent divestitures, including the hoist and winch business expected to close in Q4, though details on revenue and EBIT contributions were not provided. They continue to evaluate the portfolio rigorously and consider additional pruning and strategic investments through RTX Ventures.  **[RTX_3394272_19]** 

11. **FAA Certification and 787 Output**  
    **Q:** Progress on FAA certification of seats and 787 heat exchanger output?  
    **A:** RTX is making progress on certifying wide-body first-class seats, though acknowledging the complex and stringent certification process. For the 787 heat exchanger, they are ramping up production to meet Boeing's demand after relocating production due to the Russia-Ukraine conflict.  **[RTX_3394272_24]** 

12. **Collins Interiors Update**  
    **Q:** Update on Collins Interiors and expectations?  
    **A:** Collins Aerospace sees significant improvement in the interiors business, which is the only segment still lagging pre-pandemic levels. Management expects substantial growth in the second half driven by aftermarket mods and upgrades.  **[RTX_3394272_14]** 

13. **Aligning Profit Drivers**  
    **Q:** Will profit drivers be better aligned with airframers on future programs?  
    **A:** Management agrees that aligning business models with airframers is necessary to better serve customers and reduce tensions arising from misaligned incentives. They anticipate discussions to achieve better alignment on future clean-sheet aircraft programs.  **[RTX_3394272_21]** 

14. **GTF Powdered Metal Impact**  
    **Q:** Can you quantify engines affected by GTF powdered metal issue?  
    **A:** While specific numbers were not provided, management explained that all new engines since late last year have full-life powdered metal parts. The ramp-up of inserting these parts into MRO engines is ongoing and will accelerate into **2025** and **2026**, with prioritization based on engine evaluations.  **[RTX_3394272_22]** 

15. **Assumption Changes in Negotiations**  
    **Q:** Any changes in assumptions during customer negotiations?  
    **A:** Management states that key assumptions remain similar, though agreements vary by customer based on operational specifics. Each negotiation is tailored, but overall output and assumptions are consistent with previous guidance.  **[RTX_3394272_23]** 

16. **Airbus Forecast and Engine Deliveries**  
    **Q:** Comments on Airbus forecast cut and engine deliveries?  
    **A:** RTX acknowledges they are not fully meeting Airbus's needs but are seeing sequential and year-over-year growth in OE deliveries. They continue to balance OE, spare engine, and MRO demands and expect to provide Airbus with the necessary engines in the second half.  **[RTX_3394272_10]** 

1881653a28caf105b28c7ebe6c89ca3a52a01fc6e4e77bc716d2d8899b0af973

- **RTX expects operational free cash flow of $7 billion to $7.5 billion**, demonstrating strong underlying operations and sustainable cash flow once one-time items are resolved.  **[RTX_3394272_12]**
- **RTX raised its sales guidance**, driven by strong performance in Pratt & Whitney and Collins units, with increased demand in military (e.g., **F135 and F117 engines**) and commercial aftermarket segments, trending towards the high end of prior ranges.  **[RTX_3394272_17]**
- **RTX is advancing engine technology with the GTF Advantage, which is 90% through testing**, offering **1% improved fuel burn**, **4% increased thrust**, and enhanced durability, while investing in enabling technologies for future engines, positioning the company as a leader in next-generation propulsion systems.  **[RTX_3394272_23]**

231099cbff8c73a60599de24efab71029c528ef04c937b0f64a67c4be78da4dd

RTX Corp (RTX)

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