RTX Corp

RTX Corporation is an aerospace and defense company that provides advanced systems and services for commercial, military, and government customers worldwide. The company serves commercial and government customers in both the original equipment and aftermarket parts and services segments of the aerospace industry, and its defense business serves both domestic and international customers as a prime contractor or subcontractor on a broad portfolio of defense and related programs for military and government customers.

RTX operates in highly competitive industries. Its aerospace businesses compete with numerous U.S. and foreign businesses that obtain regulatory agency approval to manufacture products and spare parts. Its defense businesses compete with numerous U.S. and foreign companies in most defense and government electronics, space, effectors, communications, command and control, technical services and support, and other segments. The company frequently partners on defense programs with its major suppliers, some of whom are, from time to time, competitors on other programs. Collins Aerospace's largest commercial customers are Boeing and Airbus with combined sales, prior to discounts and incentives, of 16% ¹ of total Collins segment sales in 2025. Pratt & Whitney's largest commercial customer by sales is Airbus, with sales, prior to discounts and incentives, of 29% ² of total Pratt & Whitney segment sales in 2025.

RTX generates revenue through the design, manufacture, and service of advanced aerospace and defense products and systems. The company's revenue mix includes original equipment manufacturer (OEM) sales and extensive related aftermarket parts and services. Revenue is recognized over time for substantially all defense contracts and certain long-term aerospace aftermarket contracts, and at a point in time for certain aerospace components, engines, and spare parts. The company serves commercial airlines, aircraft manufacturers, aircraft leasing companies, the U.S. and foreign governments, and defense contractors.

Collins Aerospace is a leading global provider of technologically advanced aerospace and defense products. Collins' solutions include aftermarket services for civil and military aircraft manufacturers, commercial airlines, and regional, business, and general aviation, as well as for defense and commercial space operations. Collins designs, manufactures, and supplies a wide range of systems including electric power generation, environmental control systems, flight control systems, landing systems, communication and navigation systems, integrated avionics, and complete cabin interiors. Collins also provides connected aviation solutions and services through worldwide voice and data communication networks, airport systems and integrations, and air traffic management solutions. Collins supports government and defense customer missions by providing systems solutions for connected battlespace, test and training range systems, crew escape systems, and simulation and training. Collins secured over $4 billion ³ in combined long-term agreements to provide new maintenance, repair and overhaul services, and long-term contracts to provide spare parts, for several airlines.

Pratt & Whitney is among the world's leading suppliers of aircraft engines for commercial, military, business jet, and general aviation customers. Pratt & Whitney designs, manufactures, and services large engines for widebody, narrowbody, and large regional aircraft for commercial customers and for fighter, bomber, tanker, and transport aircraft for military customers. Pratt & Whitney also designs, manufactures, and services small engines powering regional airlines, general and business aviation, and helicopters. Pratt & Whitney produces and services the PW1000G Geared Turbofan (GTF) engine family, which has demonstrated a significant reduction in fuel burn and noise levels and lower environmental emissions compared to prior-generation engines. The GTF aftermarket network expanded to 21 ⁴ facilities worldwide, increasing PW1100G-JM shop visit output by approximately 26% ⁵ year over year in 2025. The GTF family now powers more than 2,600 ⁶ aircraft for over 90 ⁷ operators across three aircraft platforms. In 2025, Pratt & Whitney was awarded a $2.8 billion ⁸ undefinitized contract action (UCA) for production of Lot 18 and Lot 19 long lead funding for the F135 engines. Raytheon is a leading provider of defensive and offensive threat detection, tracking and mitigation capabilities for U.S. and foreign government and commercial customers. Raytheon designs, develops, and provides advanced capabilities in integrated air and missile defense, smart weapons, missiles, advanced sensors and radars, interceptors, space-based systems, hypersonics, and missile defense across land, air, sea, and space. In 2025, Raytheon achieved key advancements in, or received contract awards for, programs including Patriot, LTAMDS, SM-3, AIM-9X, AMRAAM, Tomahawk, and certain advanced technologies. Major new contracts awarded in 2025 include contracts to provide AMRAAM missiles to the U.S. Navy, U.S. Air Force and international customers; Guidance Enhanced Missiles (GEM-T) for the NATO Support and Procurement Agency (NSPA) and an international customer; low-rate initial production of LTAMDS for the U.S. Army and Poland; Iron Dome Tamir production for an international customer; AIM-9X Sidewinder short-range air-to-air missiles for the U.S. Navy, U.S. Air Force, and international customers; SM-3 exoatmospheric missile defense interceptors to the Missile Defense Agency; AN/SPY-6 radars for the U.S. Navy; NASAMS to an international customer; Stinger missiles to the U.S. Army and an international customer; Next Generation Jammer Mid-Band (NGJ-MB) for the U.S. Navy and the Royal Australian Air Force; and Javelin guided munition for the U.S. Army and international customers.

On July 21, 2025, RTX completed the sale of the actuation and flight control business within its Collins segment for gross proceeds of $1.8 billion ⁹, resulting in a pre-tax gain of $0.2 billion ¹⁰. On October 6, 2025, RTX completed the sale of the Simmonds Precision Products business within its Collins segment for gross proceeds of approximately $0.8 billion ¹¹, resulting in an aggregate pre-tax gain of $0.1 billion ¹². On March 29, 2024, RTX completed the sale of its Cybersecurity, Intelligence and Services (CIS) business within its Raytheon segment for proceeds of approximately $1.3 billion ¹³ in cash, resulting in an aggregate pre-tax gain, net of transaction and other related costs, of $0.4 billion ¹⁴. On October 31, 2024, RTX completed the sale of its Goodrich Hoist & Winch business within its Collins segment for proceeds of approximately $0.5 billion ¹⁵ in cash, resulting in a pre-tax gain, net of transaction and other related costs, of $0.1 billion ¹⁶. In 2025, RTX repurchased $50 million ¹⁷ of its common stock, representing 396,000 ¹⁸ shares. As of December 31, 2025, management had remaining authority to repurchase approximately $0.6 billion ¹⁹ of common stock under the October 21, 2023 share repurchase program. On February 6, 2026, the Board of Directors declared a dividend of $0.68 ²⁰ per share payable March 19, 2026.

Total net sales for 2025 were $88.603 billion ²¹, compared to $80.738 billion ²² in 2024 and $68.920 billion ²³ in 2023. Operating profit for 2025 was $9.300 billion ²⁴, compared to $6.538 billion ²⁵ in 2024 and $3.561 billion ²⁶ in 2023. Operating profit margin was 10.5% ²⁷ in 2025, compared to 8.1% ²⁸ in 2024 and 5.2% ²⁹ in 2023. Net income attributable to common shareowners for 2025 was $6.732 billion ³⁰, compared to $4.774 billion ³¹ in 2024 and $3.195 billion ³² in 2023. Diluted earnings per share for 2025 was $4.96 ³³, compared to $3.55 ³⁴ in 2024 and $2.23 ³⁵ in 2023. Operating cash flow for 2025 was $10.567 billion ³⁶, compared to $7.159 billion ³⁷ in 2024 and $7.883 billion ³⁸ in 2023.

A key growth vector is the Pratt & Whitney Geared Turbofan (GTF) engine family. The GTF family now powers more than 2,600 ³⁹ aircraft for over 90 ⁴⁰ operators. In 2025, the GTF Advantage engine received FAA and European Union Safety Agency (EASA) certification for the Airbus A320 neo family and is expected to extend the benefits of the current GTF engine, increasing takeoff thrust by 4 to 8 percent ⁴¹ and reducing fuel consumption by up to an additional 1 percent ⁴². Another growth vector is the F135 engine program. In 2025, Pratt & Whitney was awarded a $2.8 billion ⁴³ undefinitized contract action (UCA) for production of Lot 18 and Lot 19 long lead funding for the F135 engines. Pratt & Whitney also continued design maturation and aircraft integration efforts for the F135 Engine Core Upgrade (ECU). Significant activity continued on Pratt & Whitney's military engine development programs, including the Next Generation Adaptive Propulsion (NGAP) program. In early 2025, Pratt & Whitney completed the Detailed Design Review of its XA103 engine for the U.S. Air Force's NGAP.

Another growth vector is the Raytheon segment, which continues to experience increased global demand for its products. In 2025, Raytheon achieved key advancements in, or received contract awards for, programs including Patriot, LTAMDS, SM-3, AIM-9X, AMRAAM, Tomahawk, and certain advanced technologies. Major new contracts awarded in 2025 include contracts to provide AMRAAM missiles, Guidance Enhanced Missiles (GEM-T), low-rate initial production of LTAMDS, Iron Dome Tamir production, AIM-9X Sidewinder missiles, SM-3 interceptors, AN/SPY-6 radars, NASAMS, Stinger missiles, Next Generation Jammer Mid-Band (NGJ-MB), and Javelin guided munition. Raytheon also continued to experience increased global demand for the combat-proven Coyote system. Additionally, the company is investing in sustainable technologies, such as electrical power architectures, advanced composite materials, digital trajectory optimizers, highly efficient cooling systems, and numerous other technologies that provide lower weight, improved drag, and carbon footprint solutions on aircraft.

The filing discusses the FAS/CAS operating adjustment, which represents the difference between the service cost component of pension and postretirement benefit expense under FAS requirements and expense under U.S. government Cost Accounting Standards (CAS). The FAS/CAS operating adjustment was $753 million ⁴⁴ in 2025, compared to $833 million ⁴⁵ in 2024 and $1.127 billion ⁴⁶ in 2023. The change in the FAS/CAS operating adjustment in 2025 compared to 2024 was driven by a decrease in CAS expense, primarily due to increases in the applicable CAS discount rates and reductions in administrative expenses paid by the pension plans. The company is continuously evaluating its cost structure and has implemented restructuring actions in an effort to keep its cost structure competitive. Restructuring costs generally arise from severance related to workforce reductions and facility exit costs.

The company continues to invest in operational capacity in strategic locations in the United States (including Puerto Rico), India, Mexico, Singapore, and the Philippines. Collins continues to invest in operational capacity in these locations. The company is also undergoing significant, multi-year digital transformation initiatives to improve its business, modernize operations, and reduce costs. Under these initiatives, the company is leveraging digital capabilities throughout the way in which it conducts its business and provides its products and services to customers, including how it designs, builds, and maintains its products and services and operates its facilities. The company also uses its Customer Oriented Results and Excellence (CORE) operating system to drive continuing improvement into its processes and facilities. The company continues to invest in structural cost reduction in its facilities, including aligning work to more efficient manufacturing centers, implementing advanced manufacturing capabilities including digital initiatives and automation, and closing facilities that are not required to meet future capacity and work needs.

Company-funded research and development spending was $2.807 billion ⁴⁷ in 2025, compared to $2.934 billion ⁴⁸ in 2024 and $2.805 billion ⁴⁹ in 2023. Capital expenditures were $2.627 billion ⁵⁰ in 2025, compared to $2.625 billion ⁵¹ in 2024 and $2.415 billion ⁵² in 2023. As of December 31, 2025, management had remaining authority to repurchase approximately $0.6 billion ⁵³ of common stock under the October 21, 2023 share repurchase program. Dividends declared per share of common stock were $2.670 ⁵⁴ in 2025, compared to $2.480 ⁵⁵ in 2024 and $2.320 ⁵⁶ in 2023.

The company faces headwinds from global supply chain disruptions that have impacted its ability to procure raw materials, including certain rare earth elements, microelectronics, and certain commodities, resulting in delays and increased costs. These disruptions have been driven by supply chain market constraints and macroeconomic conditions, including inflation and labor market shortages. The high inflationary environment has increased material and component prices, labor rates and supplier costs, which has negatively impacted costs. Current geopolitical conditions, including conflicts and other causes of strained intercountry relations, as well as sanctions and other trade restrictive activities, such as tariffs and export controls, are continuing to contribute to these supply chain issues. The company anticipates that supply chain disruptions will continue. The company also faces headwinds from the Powder Metal Matter, which has resulted in increased engine removals and inspections, shop visits, aircraft on ground levels, and costs. The company expects aircraft on ground levels for the PW1100 powered A320neo fleet to remain elevated through 2026 ⁵⁷.

The company faces headwinds from changes in U.S. government defense spending, which could negatively impact its financial position, results of operations, liquidity, and overall business. U.S. government sales constitute a significant portion of consolidated sales. Changes in U.S. government defense spending for various reasons, including as a result of potential changes in policy or budgetary positions or priorities, could negatively impact results. The company also faces headwinds from the economic condition of the aerospace industry, which is cyclical in nature. Capital spending and demand for aircraft engines, aerospace products, and component aftermarket parts and services is limited to commercial airlines, lessors, other aircraft operators, and aircraft manufacturers that are influenced by a wide variety of factors.

A material risk is the Powder Metal Matter, where a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100 GTF fleet. This has resulted in significant incremental shop visits and costs, with an accrual for expected customer compensation of $0.7 billion ⁵⁸ as of December 31, 2025. The company expects aircraft on ground levels to remain elevated through 2026 ⁵⁹, and the financial impact is subject to variability in assumptions. Another key risk is the company's dependence on U.S. government contracts, which are subject to audits, investigations, and potential termination. In 2024, the company resolved several legal matters, including entering into deferred prosecution agreements (DPAs) with the DOJ and a Consent Agreement with the DOS, which require compliance and cooperation obligations and could result in additional penalties if violated. The company also faces risks from global supply chain disruptions, which have impacted its ability to procure raw materials and components, resulting in delays and increased costs. The company anticipates these disruptions will continue. Additionally, the company faces risks from changes in U.S. government defense spending and the cyclical nature of the commercial aerospace industry, which could reduce demand for its products and services.

Management's message emphasizes the company's position as a global premier systems provider of high technology products and services to the aerospace and defense industries. Key themes include a focus on program execution, prudent management of capital and investments to maximize operating income and cash, and a strong focus on adjusted earnings per share and free cash flow as strong indicators of overall performance and ability to create shareowner value. The company also highlights its strategic and operational initiatives, including digital transformation, operational modernization, cost reduction, and advanced technology programs, and its application of the Customer Oriented Results and Excellence (CORE) operating platform to the execution of these initiatives.