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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the fiscal year ended December 31, 2024
			For the fiscal year ended December 31, 2025
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number 001-00812

RTX Corporation

(Exact name of registrant as specified in its charter)


Delaware			06-0570975
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

1000 Wilson Boulevard, Arlington, Virginia 22209

(Address of principal executive offices) (Zip Code)


(781)			522-3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($1 par value)	RTX	New York Stock Exchange
(CUSIP 75513E 101)
2.150% Notes due 2030	RTX 30	New York Stock Exchange
(CUSIP 75513E AB7)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting Common Stock held by non-affiliates at June 30, ~~2024~~2025 was approximately $~~133~~195,~~428~~405,~~194~~729,~~600~~090, based on the New York Stock Exchange closing price for such shares on that date. For purposes of this calculation, the Registrant has assumed that its directors and executive officers are affiliates.

At December 31, ~~2024~~2025, there were 1,~~332~~342,~~122~~287,~~758~~676 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Definitive Proxy Statement for its ~~2025~~2026 Annual Meeting of Shareowners are incorporated by reference in Part III of this Form 10-K.

Table of Contents

INDEX

PART I
Item 1.	Business	4
Item 1A.	Risk Factors	1413
Item 1B.	Unresolved Staff Comments	3027
Item 1C.	Cybersecurity	3027
Item 2.	Properties	3229
Item 3.	Legal Proceedings	3230
Item 4.	Mine Safety Disclosures	3330
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	3431
Item 6.	Reserved	3532
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3633
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	6459
Item 8.	Financial Statements and Supplementary Data	6561
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~118~~112
Item 9A.	Controls and Procedures	~~118~~112
Item 9B.	Other Information	~~118~~112
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	~~118~~112
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	~~119~~113
Item 11.	Executive Compensation	~~120~~114
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~120~~114
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~121~~115
Item 14.	Principal Accountant Fees and Services	~~121~~115
PART IV
Item 15.	Exhibits, Financial Statement Schedules	~~122~~116
Item 16.	Form 10-K Summary	~~129~~122
SIGNATURES		~~130~~123

RTX Corporation and its subsidiaries’ names, abbreviations thereof, logos, and products and services designators are all either the registered or unregistered trademarks or tradenames of RTX Corporation and its subsidiaries. Names, abbreviations of names, logos, and products and services designators of other companies are either the registered or unregistered trademarks or tradenames of their respective owners. References to internet web sites in this Form 10-K are provided for convenience only. Information available through these web sites is not incorporated by reference into this Form 10-K.

Table of Contents

PART I

ITEM 1. BUSINESS

General

RTX Corporation is an aerospace and defense company that provides advanced systems and services for commercial, military, and government customers worldwide. The terms “we,” “us,” “our,” the “Company”, and “RTX” mean RTX Corporation and its subsidiaries, unless the context indicates another meaning. References to “Raytheon Company” mean Raytheon Company, which became a wholly owned subsidiary of RTX on April 3, 2020 through an all-stock merger transaction between United Technologies Corporation and Raytheon Company (the surviving company of which is RTX Corporation). We serve commercial and government customers in both the original equipment and aftermarket parts and services segments of the aerospace industry. Our 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 Corporation was incorporated in Delaware in 1934.

The following description of our business should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Item 7 of this Form 10-K, including the information contained therein under the heading “Business Overview.”

Business Segments

Our operations are classified into three principal business segments: Collins Aerospace (Collins), Pratt & Whitney, and Raytheon, with each segment comprised of groups of similar operations.

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. Aftermarket services include spare parts, overhaul and repair, engineering and technical support, training and fleet management solutions, asset management services, and information management services. Collins designs, manufactures, and supplies electric power generation, management and distribution systems, environmental control systems, flight control systems, air data and aircraft sensing systems, engine control systems, engine components, engine nacelle systems, including thrust reversers and mounting pylons, interior and exterior aircraft lighting, aircraft cargo systems, evacuation systems, landing systems (including landing gear, wheels, and braking systems), communication, navigation, surveillance systems, fire and ice detection and protection systems, ~~actuation systems,~~ integrated avionics, and propeller systems. Collins also designs, manufactures, and supports complete cabin interiors, including seating, oxygen systems, food and beverage preparation, storage and galley systems, lavatory, and wastewater management systems. Collins’ solutions support human space exploration with environmental control and power systems and extravehicular activity suits. 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 sells aerospace and defense products and services to aircraft manufacturers, airlines, airports and other aircraft operators, the U.S. and foreign governments, defense contractors, maintenance, repair, and overhaul providers, and independent distributors around the world. Collins’ largest commercial customers are Boeing and Airbus with combined sales, prior to discounts and incentives, of 16%, 1916%, and 1819% of total Collins segment sales in ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively.

In ~~2024~~2025, Collins was awarded ~~expanded~~a contract ~~scope~~to ~~for~~deliver satellite communication systems to support survivable communications across multiple frequency bands. Collins was also awarded a contract by the Federal Aviation Administration (FAA) ~~air~~to ~~traffic~~support ~~control~~the ~~automation~~Radar ~~system~~System toReplacement ~~implement~~program ~~technical~~as ~~refresh~~part ~~updates~~of ~~aimed at improving~~ the ~~air~~Department ~~traffic~~of ~~controller~~Transportation’s ~~work~~Brand ~~environment~~New ~~and~~Air ~~system~~Traffic ~~security~~Control System. Collins was ~~also~~selected ~~awarded contracts~~ to ~~supply~~be ~~spare~~the ~~parts~~primary subcontractor for the ~~Army~~U.S. ~~Tactical~~Navy’s ~~Navigation~~solution ~~System~~for engineering design and tomanufacturing ~~design~~of the Very Low Frequency communication subsystem, ~~develop~~as well as mission command, control, and ~~deliver~~communications ~~systems~~infrastructure, Advanced Extremely High Frequency and ~~products~~voice ~~for~~communications. In addition, Collins was awarded a ~~new~~follow-on ~~aircraft~~contract ~~under~~from the ~~United~~FAA ~~States~~to ~~Air~~continue ~~Force~~support ~~Survivable~~of ~~Airborne~~the ~~Operations~~Standard ~~Center~~Terminal ~~program~~Automation Replacement System (STARS) which is used to manage aircraft spacing and sequencing on approach. Collins ~~was~~secured ~~also~~over ~~awarded~~ $24 billion in ~~the~~combined ~~aggregate~~long-term ~~for~~agreements to provide new maintenance, repair and overhaul services, and ~~spares~~ long-term contracts ~~with~~to provide spare parts, for several airlines. ~~In addition~~Finally, Collins ~~continued~~was ~~its~~selected ~~significant~~by ~~product~~the European Union’s Clean Aviation Joint Undertaking (Clean Aviation) to collaborate with Pratt & Whitney Canada as well as other consortium members on multiple development ~~activities,~~projects ~~including~~aimed at increasing fuel efficiency for ~~major~~next-generation ~~systems~~regional onaircraft, most notably the ~~Airbus~~Powerplant ~~A321XLR~~Hybrid Applications Regional Segment (PHARES) project. As part of the PHARES project, Pratt & Whitney Canada will lead the ~~Boeing~~development ~~777X~~of ~~and~~a ~~737~~hybrid-electric ~~MAX~~PW127XT-derivative 10engine, incorporating a Collins 250kW motor and ~~systems~~integrated inpower ~~support~~controller. ofCollins ~~the~~will ~~Boeing~~also ~~T-7A~~develop ~~trainer~~an advanced propeller system for improved fuel efficiency and ~~the~~reduced ~~Bell~~noise Vfor ~~280~~such ~~(FLRAA)~~engine as part of PHARES.

Collins continues to invest in sustainable technologies, such as electrical power architectures, advanced thermoplastic materials, digital trajectory optimizers, highly efficient cooling systems, and numerous other technologies that provide lower weight, drag, and carbon footprint solutions on aircraft. Collins is also investing in higher efficiency build processes, that reduce chemical and power usage and increase the use of recycling. Collins composite structural technology supports optimization of the design of aircraft components and equipment to minimize weight, maximize energy efficiency and reduce fuel burn. Collins works closely with numerous other industry organizations and airframers to explore alternative energy solutions such as sustainable

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Collins continues to invest 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. Collins is also investing in higher efficiency build processes, that reduce chemical and power usage and increase the use of recycling. Collins’ thermoplastic and carbon structural technologies support optimization of the design of aircraft components and equipment to minimize weight, maximize energy efficiency, reduce fuel burn, and extend brake life. Collins works closely with numerous other industry organizations and airframers to explore alternative energy solutions such as sustainable aviation fuel, hydrogen, and hybrid electric power sources. Collins also continues to invest in operational capacity in strategic locations, ~~including~~ in the United States (including Puerto Rico), India, Mexico, Singapore, and ~~Puerto~~the ~~Rico~~Philippines.

Pratt & Whitney is among the world’s leading suppliers of aircraft engines for commercial, military, business jet, and general aviation customers. Pratt & Whitney’s ~~Commercial Engines and Military Engines businesses design~~designs, ~~develop~~manufactures, ~~produce,~~ and ~~maintain~~services ~~families of~~ large engines for ~~wide-~~widebody, ~~and~~narrowbody, ~~narrow-body~~ and large regional aircraft for commercial customers and for fighter, bomber, tanker, and transport aircraft for military customers. Pratt & Whitney’s ~~small~~also ~~engine business~~designs, ~~Pratt & Whitney Canada~~manufactures, isand ~~among~~services ~~the~~small ~~world’s leading suppliers of~~ engines powering regional airlines, general and business aviation, and helicopters. Pratt & Whitney ~~also~~ produces, sells, and services military and commercial auxiliary power units. Pratt & Whitney provides fleet management services and aftermarket maintenance, repair, and overhaul services in all of these product segments.

Pratt & Whitney sells products and services principally to aircraft manufacturers, airlines and other aircraft operators, aircraft leasing companies, and the U.S. and foreign governments. Pratt & Whitney’s largest commercial customer by sales is Airbus, with sales, prior to discounts and incentives, of 3129%, 4831%, and 3348% of total Pratt & Whitney segment sales in ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively.

Pratt & Whitney produces and services the PW1000G Geared Turbofan (GTF) engine family. GTF engine models have 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 1821 facilities worldwide, increasing PW1100G-JM shop visit output by approximately 3026% year over year in ~~2024~~2025.

The GTF family now powers more than 2,~~200~~600 aircraft for 85over 90 operators across three aircraft platforms: Airbus A320neo family, Airbus A220, and Embraer E-Jets E2. In ~~2024~~2025, ~~Pratt~~the &GTF ~~Whitney~~Advantage engine received FAA ~~certification~~and ~~for~~European ~~the~~Union ~~GTF~~Safety ~~engine~~Agency ~~that~~(EASA) ~~will~~certification ~~power~~for the Airbus ~~A321XLR~~A320 ~~aircraft.~~neo ~~The~~family ~~GTF~~and ~~Advantage configuration currently under certification testing~~ is expected to extend the benefits of the current GTF engine, increasing takeoff thrust by 4 to 8 percent and reducing fuel consumption by up to an additional 1 percent, maintaining the engine’s lead as the most efficient powerplant for the A320neo family. ~~In 2024, RTX announced it had completed the preliminary design review of the hybrid-electric GTF engine demonstrator for the Clean Aviation SWITCH project.~~

Pratt & Whitney produces and sustains the F135 engine for the U.S. government’s F-35 Joint Program Office to exclusively power the single-engine F-35 Lightning II fifth generation aircraft (commonly known as the Joint Strike Fighter) produced by Lockheed Martin. F135 propulsion system configurations are used for the U.S. Air Force’s F-35A, the U.S. Marine Corps’ F-35B, and the U.S. Navy’s F-35C jets. F135 engines are also used on all F-35 aircraft purchased by Joint Strike Fighter partner countries and other countries through foreign military sales arrangements. ~~2024~~In ~~marked~~2025, ~~the~~Pratt ~~50th~~& ~~anniversary~~Whitney’s ~~since~~F135 ~~the~~engine ~~F-16~~surpassed ~~Fighting~~one ~~Falcon’s~~million ~~first~~engine flight hours, ~~which~~and ~~was~~the ~~powered~~company bywas ~~the~~awarded ~~Pratt~~a &$2.8 ~~Whitney~~billion ~~F100~~undefinitized ~~engine.~~contract ~~With~~action ~~more~~(UCA) ~~than~~for ~~300~~production ~~million~~of ~~flight~~Lot ~~hours,~~18 ~~the~~and ~~F100~~Lot is19 along ~~mainstay~~lead ~~powerplant~~funding for 23the ~~global~~F135 ~~air~~engines ~~forces,~~to ~~powering~~power ~~approximately~~all ~~two-thirds~~three variants of ~~global~~the F-~~16s~~35 Lightning II aircraft. Additionally, Pratt & Whitney continued design maturation and ~~nearly~~aircraft ~~three-quarters~~integration ofefforts ~~F-15s~~for the F135 Engine Core Upgrade (ECU).

Significant activity continued on Pratt & Whitney’s ~~completed~~military engine development programs, including the ~~F135~~Next ~~Engine~~Generation ~~Core~~Adaptive ~~Upgrade~~Propulsion (~~ECU~~NGAP) ~~preliminary~~program. ~~design~~In ~~review~~early ~~and~~2025, ~~was~~Pratt ~~awarded~~& aWhitney ~~new~~completed ~~contract~~the ~~valued~~Detailed atDesign upReview toof ~~$1.3~~its ~~billion~~XA103 engine for ~~continued work on~~ the ~~ECU~~U.S. ~~The~~Air ~~F135~~Force’s ~~program~~NGAP, ~~also~~allowing ~~added~~it ~~Greece~~to ~~and~~begin ~~Romania~~procurement asof ~~new~~hardware ~~customers,~~for ~~bringing~~ the ~~total~~construction ~~number~~ of ~~global~~the ~~participants~~prototype toground 20demonstrator. InMost ~~addition~~recently, ~~significant~~Pratt ~~activity~~& ~~continued~~Whitney onannounced ~~military~~accelerated XA103 engine development ~~programs~~through ~~including~~ the ~~Next~~use ~~Generation~~of ~~Adaptive~~digital ~~Propulsion~~data ~~Program~~packages, ~~(NGAP).~~and ~~The~~continued ~~NGAP~~progress ~~team~~toward ~~completed a critical assessment of its offering with~~ the ~~U.S.~~next ~~Air~~major ~~Force, moving the~~ program ~~closer to completing its detailed design review~~milestone. Meanwhile, the B-21 Raider, which is powered by Pratt & Whitney engines, continued to progress its flight test program.

~~2024~~In ~~also~~2025, ~~marked the certification of~~ Pratt & Whitney Canada’s ~~PW545D~~was ~~engine~~selected ~~that~~by ~~will power~~ the ~~Cessna~~European ~~Citation~~Union's ~~Ascend~~Clean ~~business~~Aviation ~~aircraft from Textron. Pratt & Whitney Canada continues~~ to ~~progress~~lead ~~testing of~~ the ~~propulsion~~PHARES ~~system~~project, ~~for~~marking the ~~RTX~~first ~~Hybrid~~time ~~Electric Flight Demonstrator program, which targets~~ a ~~30%~~Canadian ~~fuel~~company ~~efficiency~~will ~~improvement~~participate in and ~~CO2~~lead ~~emissions~~a ~~reduction~~Clean ~~compared~~Aviation ~~to existing advanced regional turboprops~~program. InAs ~~connection~~part ~~with~~of the ~~RTX~~PHARES ~~Hybrid Electric Flight demonstrator program~~consortium, Pratt & Whitney Canada ~~announced~~will ~~the~~collaborate ~~development~~with ofCollins, anATR, ~~advanced~~Airbus, ~~mobile~~and ~~charging~~technology ~~unit~~research ~~(MCU)~~organizations ~~capable~~to ofdesign ~~charging~~and ~~high~~integrate a hybrid-~~power~~electric ~~batteries~~propulsion atdemonstrator, targeting up to ~~1500~~20% ~~volts.~~improved ~~Also~~fuel inefficiency ~~2024,~~on ~~Airbus~~regional ~~Helicopters~~aircraft ~~selected~~missions. Finally, in 2025, Pratt & Whitney Canada’s ~~and~~PT6 ~~its~~E-Series™ ~~PW210 helicopter~~ engine tofamily ~~support~~surpassed ~~the~~500,000 ~~development~~engine offlight ahours ~~hybrid-propulsion~~since ~~system~~entering ~~for its PioneerLab technology demonstrator~~service.

The development of new engines and improvements to current production engines present important growth opportunities for Pratt & Whitney. In view of the risks and costs associated with developing new engines, Pratt & Whitney has entered into collaboration arrangements in which revenues, costs, and risks are shared with third parties. At December 31, ~~2024~~2025, the interests of third-party collaboration participants in Pratt & Whitney-directed jet engine programs ranged, in the aggregate per program, from 13% to 49%. See “Note 1: Basis of Presentation and Summary of Accounting Principles” within Item 8 of this Form 10-K for a description of our accounting for collaboration arrangements. Pratt & Whitney also continues to enhance its programs through performance improvement measures and product base expansion, utilizing similar collaboration arrangements.

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program, from 13% to 49%. See “Note 1: Basis of Presentation and Summary of Accounting Principles” within Item 8 of this Form 10-K for a description of our accounting for collaboration arrangements. Pratt & Whitney also continues to enhance its programs through performance improvement measures and product base expansion, utilizing similar collaboration arrangements.

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. Raytheon provides air-to-air and air-to-ground sensors, command and control and weapons including the Advanced Medium Range Air-to-Air Missile (AMRAAM), StormBreaker smart weapon, Long Range Stand Off Weapon (LRSO), and the Early Warning Radar. Raytheon also provides advanced naval sensors, command and control and weapons including classified naval radars, the Next Generation Jammer (NGJ), shipboard missiles including the Tomahawk and Standard Missile 6 (SM-6), air-to-air missiles such as the AIM-9X SIDEWINDER missile, and integrated systems such as the SPY-6 radar. In addition, Raytheon provides advanced systems and products that span layered land and integrated air and missile defense, including the Patriot air and missile defense system, the Lower Tier Air and Missile Defense Sensor (LTAMDS), the National Advanced Surface-to-Air Missile System (NASAMS), Javelin, Excalibur, Stinger, and High-Energy Lasers. Raytheon also provides technologically advanced sensors, satellites, and interceptors, including the AN/TPY-2 radar, and Standard Missile 3 (SM-3). Raytheon delivers integrated space solutions including sensors, mission orchestration, satellite control, and software. Raytheon also focuses on the development and early introduction of next-generation technologies and systems, including hypersonics, counter-hypersonics, next-generation radars, sensor experimentation, and electro-optical/infrared (EO/IR) advancements, and aligns products that use shared technologies, including fire control radars, surveillance radars, EO/IR, space-qualified satellite components, and electronics.

Raytheon serves as a prime contractor or major subcontractor on numerous programs with the U.S. Department of ~~Defense~~War (~~DoD~~DoW) (formerly referred to as the U.S. Department of Defense), including the U.S. Navy, U.S. Army, Missile Defense Agency, U.S. Air Force, and U.S. Space Force, as well as programs with U.S. federal civil customers, and other international and classified customers.

In ~~2024~~2025, Raytheon achieved key advancements in, or received contract awards for, the following programs: ~~Global~~ Patriot, ~~program;~~ LTAMDS, ~~program;~~ SM-3, ~~program;~~ AIM-9X, ~~and the~~ AMRAAM, ~~programs;~~Tomahawk, and certain advanced technologies, including classified programs and an advanced development ~~program~~programs. Major new contracts awarded in ~~2024~~2025 include acontracts ~~contract~~ to provide ~~Patriot~~AMRAAM ~~Air~~missiles ~~Defense systems~~ to ~~Germany and Patriot launchers for Poland; a contract for low-rate initial production of LTAMDS defense systems for~~ the U.S. ~~Army~~Navy, ~~and Poland; a contract to provide SM-3 exo-atmospheric missile defense interceptors to the~~ U.S. ~~Navy~~Air Force and international customers; ~~a contract to provide~~ Guidance Enhanced Missiles (GEM-T) ~~tactical~~for ~~ballistic~~the ~~missiles~~North ~~for~~Atlantic Treaty Organization (NATO) Support and Procurement Agency (NSPA); aand ~~contract~~an tointernational ~~provide~~customer; ~~AMRAAM~~low-rate ~~missiles~~initial toproduction ~~the~~of ~~U.S.~~LTAMDS ~~Navy,~~for the U.S. ~~Air~~Army ~~Force~~ and ~~international customers~~Poland; aIron ~~contract~~Dome toTamir ~~provide~~production ~~Patriot~~for ~~Air~~an ~~Defense~~international ~~systems, including GEM-T missiles, to Romania~~customer; ~~a contract to provide~~ AIM-9X Sidewinder short-range air-to-air missiles for the U.S. Navy, U.S. Air Force, and international customers; aSM-3 ~~contract~~exoatmospheric missile defense interceptors to ~~produce~~the Missile Defense Agency; AN/SPY-6~~(V)~~ radars for the U.S. Navy; aNASAMS ~~contract~~to an international customer; Stinger missiles to ~~provide~~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; aand ~~contract to provide~~ Javelin guided munition for the U.S. Army and international customers~~; and a contract to provide Evolved SeaSparrow Missile (ESSM) ship self-defense missile for the U~~.S. ~~Navy~~In ~~and~~2025, ~~international~~Raytheon ~~consortium~~also ~~partners.~~continued ~~Raytheon~~to ~~has~~experience ~~experienced~~ increased global demand for the combat-proven Coyote system, a low-cost, expendable, unmanned aircraft system with the capability of operating in autonomous swarms.

Sales and Customers

We have substantial U.S. government sales, which we conduct through all three of our business segments. In addition, as a global company, all three of our business segments have substantial international sales. See “Note 20: Segment Financial Data” within Item 8 of this Form 10-K for additional information.

U.S. Government Sales. Our U.S. government sales were as follows:

(dollars in millions)	~~2024~~2025			~~2023~~2024			~~2022~~2023
Sales to the U.S. government (1)	$	3233,~~246~~279		$	3132,~~628~~246		$	3031,~~317~~628
Sales to the U.S. government as a percentage of total net sales (1) (2)	4038		%	4640		%	4546		%

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

(2) 2023 total net sales includes the reduction in sales from the Powder Metal Matter.

International Sales. Our sales to international customers, ~~based on customer end use location, where known,~~ were as follows:

(dollars in millions)	~~2024~~2025			~~2023~~2024			~~2022~~2023
Total international sales	$	3441,~~651~~312		$	2934,~~440~~651		$	2529,~~884~~440
Total international sales as a percentage of total net sales (1)	4347		%	43		%	3943		%

(1) 2023 total net sales includes the reduction in sales from the Powder Metal Matter.

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Backlog. Backlog, which is equivalent to our remaining performance obligations (RPO) for our sales contracts, represents the aggregate dollar value of firm orders for which products have not been provided or service has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity (IDIQ) type contracts).

Total backlog was $~~218~~268 billion and $~~196~~218 billion as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively. Of the total RPO as of December 31, ~~2024~~2025, we expect approximately 25% will be recognized as revenue over the next 12 months.

Competition

All of our businesses are subject to significant competition. Our businesses compete on a variety of factors such as price, delivery schedule, past performance, reliability, customer service, innovation, and technology. Many of our competitors have substantial financial resources and significant technological capabilities. Further, some non-U.S. competitors receive government research and development assistance, marketing subsidies, and other assistance for their products beyond the assistance that may be available to us as a U.S. company.

Our aerospace businesses compete with numerous U.S. and foreign businesses that obtain regulatory agency approval to manufacture products and spare parts. Customer selections of aircraft engines, components, and systems can also have a significant impact on future sales of parts and services. In addition, customers (including the U.S. government and other governments) may purchase parts from suppliers other than the original equipment manufacturer, which affects spare parts sales. Some competitors may offer substantial discounts and other financial incentives, performance and operating cost guarantees, and participation in financing arrangements in an effort to compete for the aftermarket associated with these products.

Our 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. We frequently partner on defense programs with our major suppliers, some of whom are, from time to time, competitors on other programs. In addition, the competitive landscape in the defense industry continues to evolve with trends such as the continued increase in commercial competitors, new entrants with different technology approaches and business models, governmental bid evaluation processes requesting expanded intellectual property disclosures and rights sharing that may risk the loss of competitively sensitive information, and increased government, particularly foreign government, sponsorship of competitors on defense development programs. Moreover, our potential international contract awards, particularly for sales of defense products and services, may be limited by our ability to agree to offset obligations or industrial cooperation obligations, sometimes in the form of in-country industrial participation (ICIP) agreements, designed to enhance local industry.

People

As a global technology and innovation-driven company, we depend on a highly skilled workforce. Attracting, developing, advancing, and retaining the best talent while promoting trust, accountability and shared purpose, is critical for us to execute our strategy and grow our business. Individuals with technical, engineering, and science backgrounds, experience, or interests are particularly important for us to succeed in the industries in which we compete. In addition, our defense business in particular requires qualified personnel with security clearances due to our classified programs. Macroeconomic, industry, and labor market conditions continue to affect the environment for hiring and retaining employees with relevant qualifications and experience. While competition for talent has softened, we continue to experience challenges hiring highly qualified personnel for some of our most critical roles and in specific locations. We continuously monitor labor market conditions and trends to mitigate hiring and retention issues.

Governance. The Human Capital & Compensation Committee of the RTX Board of Directors oversees the Company’s human capital management.

Workforce Demographics. As of December 31, ~~2024~~2025, our global employee population consisted of a total of approximately ~~186~~180,000 employees, including approximately 5754,000 engineering professionals and approximately 3432,000 employees represented by labor unions and other employee representative bodies. Our employees were located in 52 countries, with 6869% of our employees located in the U.S. ~~We have published our U.S. Equal Employment Opportunity EEO-1 report data as part of our Environmental Social and Governance (ESG) Report.~~

WeTalent ~~strive~~Acquisition, toDevelopment, ~~build~~and ~~high-performing~~Retention; ~~teams~~Employee Health and Safety. We ~~believe~~continuously amonitor ~~work~~the ~~environment~~hiring, ~~where~~retention, ~~all~~and ~~individuals~~management ~~are~~of ~~seen~~our employees by business and function with a focus to attract, ~~respected~~develop, ~~valued~~engage, advance, and ~~protected~~retain ~~enables~~the ~~them~~best talent in the industry. We aim to ~~focus~~identify onand ~~developing~~hire ~~the~~quality ~~most~~external ~~innovative~~talent ~~solutions~~with skills matched to our ~~industry~~Company’s ~~greatest~~business ~~challenges~~needs. ~~Approximately~~We ~~19%~~invest ofin our workforce ~~across~~through 31internal ofand ~~the~~external ~~countries~~education, intraining ~~which~~and development programs, and tuition assistance benefits. We also provide competitive compensation and benefits. We recognize and reward performance during our annual review process. We regularly conduct talent reviews and develop succession plans to ensure that we ~~operate~~continue ~~are~~to ~~members~~cultivate the leadership pipeline of ~~one~~talent orneeded ~~more~~to ofexecute our ~~nine~~business ~~global~~strategy. We solicit employee ~~resource~~feedback ~~groups~~on ~~(ERGs).~~RTX’s Weperformance ~~also~~as ~~support~~an ~~science~~employer via surveys in the pre-hire, ~~technology~~active, ~~engineering~~and exit stages of employment, and ~~mathematics~~use ~~initiatives~~those results to ~~inspire~~improve ~~the~~our ~~workforce~~workplace ofand ~~the~~employee ~~next~~experience. ~~generation~~These ~~and~~surveys ~~build~~cover ~~talent~~various ~~pipelines~~topics related to employee engagement and culture.

Talent Acquisition, Development, and Retention; Employee Health and Safety. We continuously monitor the hiring, retention, and management of our employees by business and function with a focus to attract, develop, engage, advance, and

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retain the best talent in the industry. We aim to identify and hire quality external talent with skills matched to our Company’s business needs. We invest in our workforce through internal and external education, training and development programs, and tuition assistance benefits. We also provide market competitive compensation and benefits. We recognize and reward performance during our annual review process. We regularly conduct talent reviews and develop succession plans to ensure that we continue to cultivate the leadership pipeline of talent needed to execute our business strategy. We solicit employee feedback on RTX’s performance as an employer via confidential surveys in the pre-hire, active, and exit stages of employment, and use those results to improve our workplace and employee experience. These surveys cover various topics related to employee engagement and culture.

We have industry-leading health and safety programs to help maintain a safe work environment for all employees and mitigate workplace incidents, risks, and hazards. We review and monitor our performance and encourage employee input to identify opportunities to reduce incidents. Moreover, we have industry-leading ethics and compliance programs to help mitigate associated employee risks. We also provide health and wellness benefits and support flexible work arrangements for our employees.

Additional information regarding our human capital strategy is available in our “People” section of our ESG Report that can be found on our company website. Information on our website, including our ESG Report, is not incorporated by reference into this Form 10-K.

For information on the risks related to our human capital resources, see Item 1A. “Risk Factors” of this Form 10-K.

Research and Development and Operations

Our innovative products and services incorporate advanced technologies. As a result, we invest substantial amounts in research and development activities using our own funds and under contractual arrangements with our customers, to enhance existing products and services and develop future technologies to meet our customers’ changing needs and requirements, as well as to address new business opportunities.

We manufacture and service our products in approximately ~~230~~225 manufacturing, production, or overhaul facilities in approximately 3025 countries, including the U.S.

Intellectual Property

We maintain a robust portfolio of patents, trademarks, copyrights, trade secrets, licenses, and franchises related to our businesses. We rely on a combination of these rights, along with nondisclosure agreements, information technology (IT) security systems, internal controls and compliance systems, and other measures to protect our intellectual property. The U.S. government and foreign governments have licenses to certain of our intellectual property, including certain patents, which are developed or used in the performance of government contracts. Commercial customers also have licenses to certain of our intellectual property largely in connection with the sale of our products. While our intellectual property rights in the aggregate are important to the operation of each of our businesses, we do not believe that our business would be materially affected by the expiration of any particular intellectual property right or termination of any particular intellectual property patent license agreement.

Suppliers and Raw Materials

We are dependent on a global supply chain for a wide range of raw materials, commodities, components, and services. Some of our products require relatively scarce raw materials. In some instances, we depend upon a single source of supply or participate in commodity markets that may be subject to allocations of limited supplies by suppliers. In addition, in some cases, we must comply with specific procurement requirements, which may limit the suppliers and subcontractors we may utilize. We are largely dependent upon foreign sources for certain raw materials, such as cobalt, tantalum, chromium, rhenium, nickel, and titanium, and we rely on foreign suppliers as single-source suppliers of some components.

In recent years, we have experienced supply chain disruptions that have impacted our 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 our 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.

We have implemented certain actions and programs which have mitigated some of the impacts, but we anticipate that supply chain disruptions will continue. We work with our suppliers and subcontractors to assess and address the causes of performance failures and delays, including by providing suppliers with raw materials and technical support. We have arranged second and third supply source alternatives in some cases and have increased our materials and parts inventory. We regularly pursue cost reductions through a number of mechanisms, including consolidating or re-sourcing our purchases, expanding the use of long-term agreements, reducing the number of suppliers generally (except as described above for important supply alternatives), strategic sourcing in cost competitive regions, capitalizing on competitions among suppliers and other low-cost sourcing initiatives, and extending our contractually negotiated raw material pricing to higher-tier suppliers in our supply chain. For additional information related to supply chain issues, see Item IA. “Risk Factors” of this Form 10-K.

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reductions through a number of mechanisms, including consolidating or re-sourcing our purchases, expanding the use of long-term agreements, reducing the number of suppliers generally (except as described above for important supply alternatives), strategic sourcing in cost competitive regions, capitalizing on competitions among suppliers and other low-cost sourcing initiatives, and extending our contractually negotiated raw material pricing to higher-tier suppliers in our supply chain. For additional information related to supply chain issues, see Item IA. “Risk Factors” of this Form 10-K.

Other Matters Relating to Our Business

As worldwide businesses, our operations can be affected by a variety of economic, industry, and other factors, including those described in this section, in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in “Cautionary Note Concerning Factors That May Affect Future Results and Risk Factor Summary,” and in Item 1A. “Risk Factors” of this Form 10-K.

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Regulatory Matters

Our businesses are subject to extensive regulation in the industries we serve. We deal with numerous U.S. government agencies and entities, including but not limited to all of the branches of the ~~DoD~~DoW and the FAA. Similar government authorities exist in all of the countries in which we do business.

U.S. Government Contracts. AsThe ~~previously discussed, the~~ U.S. government is our largest customer, representing a substantial majority of our total defense sales. U.S. government contracts are subject to termination by the government, either for convenience or for default in the event of our failure to perform under the applicable contract. In the case of a termination for convenience, we would normally be entitled to reimbursement for our allowable costs incurred, termination costs, and a reasonable profit. If terminated by the government as a result of our default, we could be liable for payments made to us for undelivered goods or services, additional costs the government incurs in acquiring undelivered goods or services from another source, and any other damages it suffers. Our U.S. government contracts generally are subject to the Federal Acquisition Regulation (FAR), which sets forth policies, procedures, and requirements for the acquisition of goods and services by the U.S. government; department-specific regulations that implement or supplement the FAR, such as the ~~DoD~~DoW’s Defense Federal Acquisition Regulation Supplement (DFARS); and other applicable laws and regulations. These regulations provide the U.S. government with various rights, including a broad right to unilaterally terminate contracts for convenience. These regulations further impose a broad range of requirements, many of which are unique to government contracting, including various procurement, import and export, security, contract pricing and cost, contract termination and adjustment, audit, and product integrity requirements. A contractor’s failure to comply with these regulations and requirements could result in reductions to the value of contracts, contract modifications or termination, cash withholds on contract payments, forfeiture of profits, and/or the assessment of civil or criminal penalties and fines, and could lead to suspension or debarment, for cause, from U.S. government contracting or subcontracting for a period of time. In addition, in order to support U.S. government priorities, we may begin performance on an undefinitized contract action prior to completing contract negotiations on the terms, specifications, or price between the parties. The U.S. government has the ability to unilaterally definitize contracts, which would obligate us to perform under terms and conditions imposed by the U.S. government, ~~affecting~~without our ~~ability to negotiate mutually agreeable contract terms~~agreement. Uncertainties in final contract price, specifications and terms, or loss of negotiating leverage associated with particularly long delays in contract definitization may negatively affect our profitability.

For further discussion of risks related to government contracting, including on-going litigation associated with U.S. government audits and investigations, see Item 1A. “Risk Factors” and Item 3. “Legal Proceedings” of this Form 10-K and “Note 17: Commitments and Contingencies” within Item 8 of this Form 10-K.

Commercial Aerospace Product Regulation. Our commercial aerospace products are subject to regulations by the FAA, foreign aviation administration authorities, and international regulatory bodies, including on production and quality systems, airworthiness and installation approvals, repair procedures, and continuing operational safety. In addition, commercial aerospace regulations and regulator approaches differ across jurisdictions and changes in such regulations and implementing legislation can impact our operations.

Global Trade Regulation. We must comply with various laws and regulations relating to the export and import of products, services, and technology from and into the U.S. and other countries having jurisdiction over our operations. In the U.S., these laws and regulations include, among others, the Export Administration Regulations (EAR) administered by the U.S. Department of Commerce, the International Traffic in Arms Regulations (ITAR) and the Arms Export Control Act (AECA) provisions administered by the U.S. Department of State (DOS), embargoes and sanctions regulations administered by the U.S. Department of the Treasury, and import regulations administered by the U.S. Department of Homeland Security and the U.S. Department of Justice (DOJ). Certain of our products, services, and technologies have military or strategic applications and are on the U.S. Munitions List of the ITAR, the Commerce Control List of the EAR, or are otherwise subject to the EAR and/or the U.S. Munitions Import List, and we are required to obtain licenses and authorizations from the appropriate U.S. government agencies before exporting these products out of the U.S. or importing these products into the U.S. Foreign policy of the U.S. or other licensing jurisdictions may affect the licensing process or otherwise prevent us from engaging in business dealings with certain individuals, entities, or countries. Any failure by us, our customers, or our suppliers to comply with these laws and regulations could result in civil or criminal penalties, fines, seizure of our products, adverse publicity, restrictions on our ability to engage in export or import transactions, or the suspension or debarment from doing business with the U.S. government.

For further discussion of risks related to exports and imports, see Item 1A. “Risk Factors”.

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~~certain~~respective ~~individuals~~obligations under DPA-1, ~~entities~~DPA-2, orand ~~countries.~~the ~~Any~~SEC ~~failure~~Administrative ~~by us~~Order, ~~our~~and ~~customers,~~that ormonitor ~~our~~is ~~suppliers~~expected to ~~comply~~be ~~with~~in ~~these~~place ~~laws~~by the end of the first quarter. DPA-1 and ~~regulations~~DPA-2 ~~could~~further ~~result~~provide that, in ~~civil~~the orevent ~~criminal~~the ~~penalties~~DOJ, ~~fines~~in its sole discretion, ~~seizure~~determines during the period of ~~our~~deferral ~~products,~~of ~~adverse~~prosecution ~~publicity~~that Raytheon Company or the Company have violated any provision of either DPA, ~~restrictions~~Raytheon onCompany ~~our~~or ~~ability~~the Company may be subject to ~~engage~~prosecution for any federal criminal violation, including the charges against Raytheon Company in ~~export~~the orrelevant ~~import~~DPA. ~~transactions~~The SEC Administrative Order further provides that, orin the ~~suspension~~event orof ~~debarment~~a ~~from~~breach ~~doing~~of ~~business~~the agreement with the USEC, the SEC may vacate the Administrative Order and institute proceedings against the Company.S. ~~government~~In the event of any such determination of breach, the Company may face additional adverse impacts.

For further discussion of risks related to exports and imports, see Item 1A. “Risk Factors”.

Compliance Matters. As previously disclosed, on October 15, 2024, Raytheon Company entered into a deferred prosecution agreement (DPA) (DPA-1) with the DOJ and on October 16, 2024, the Company became subject to an administrative order issued by the Securities and Exchange Commission (SEC) (the SEC Administrative Order) to resolve the previously disclosed criminal and civil government investigations into payments made by Raytheon Company and its joint venture, Thales-Raytheon Systems (TRS), since 2012 in connection with certain Middle East contracts. On October 16, 2024, Raytheon Company also entered into a DPA (DPA-2) and a False Claims Act (FCA) settlement agreement with the DOJ to resolve previously disclosed criminal and civil government investigations into defective pricing claims for certain legacy Raytheon Company contracts entered into between 2011 and 2013 and in 2017. Under DPA-1, DPA-2, and the SEC Administrative Order, Raytheon Company and the Company are required, among other things, to retain an independent compliance monitor satisfactory to the DOJ and the SEC (for a term ending three years from the date on which the monitor is engaged) and are required to undertake certain cooperation and disclosure obligations (for a term commencing on the effective date of DPA-1 and the SEC Administrative Order, as applicable, and ending three years from the date on which the monitor is engaged). The compliance monitor will oversee Raytheon Company’s and the Company’s compliance with their respective obligations under DPA-1, DPA-2, and the SEC’s Administrative Order. DPA-1 and DPA-2 further provide that, in the event the DOJ, in its sole discretion, determines during the period of deferral of prosecution that Raytheon Company or the Company have violated any provision of either DPA, Raytheon Company or the Company may be subject to prosecution for any federal criminal violation, including the charges against Raytheon Company in the relevant DPA. The SEC Administrative Order further provides that, in the event of a breach of the agreement with the SEC, the SEC may vacate the Administrative Order and institute proceedings against the Company. In the event of any such determination of breach, the Company may face additional adverse impacts.

Also as previously disclosed, on August 29, 2024, the Company entered into a Consent Agreement (CA) with the DOS to resolve alleged civil violations of the AECA and the ITAR. The CA, which has a three-year term, requires the Company to implement remedial compliance measures and to conduct an external audit of the Company’s ITAR compliance program. The CA also requires appointment of an external independent Special Compliance Officer (SCO). The Company appointed its SCO on September 27, 2024. If the Company is unable to satisfy the requirements of the CA within three years as determined by the DOS, it may face a continuation of the CA, additional fines, or other adverse impacts.

For further discussion of DPA-1, DPA-2, the SEC Administrative Order, and the CA, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 1A. “Risk Factors,” and “Note 17: Commitments and Contingencies” within Item 8 of this Form 10-K.

Environmental Regulation. Our operations are subject to and affected by environmental regulation by federal, state, and local authorities in the U.S. and regulatory authorities with jurisdiction over our international operations, including with respect to chemical substances in our products, manufacturing processes, and the operation of our facilities, as well as the generation, treatment, storage, disposal, and remediation of hazardous substances and wastes. We use hazardous substances and generate hazardous wastes in some of our operations and have incurred, and will likely continue to incur, costs associated with environmental compliance activities and management of remediation matters at sites with pollutants. A portion of these costs are eligible for future recovery through the pricing of our products and services under our contracts with the U.S. government. In addition, we have been identified as a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act, also known as the Superfund law, or state law counterparts to the Superfund law, for a number of sites. The nature and extent of environmental concerns vary from site to site and our share of responsibility varies from sole responsibility to very little responsibility. We also manage various government-owned facilities on behalf of the U.S. government. At such facilities, environmental compliance and remediation costs have historically been primarily the responsibility of the U.S. government, and we have relied upon U.S. government funding to pay such costs. We do not anticipate that compliance with current provisions or requirements relating to the protection of the environment or that any payments we may be required to make for cleanup liabilities will have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity. Environmental matters are further addressed in “Note 1: Basis of Presentation and Summary of Accounting Principles” and “Note 17: Commitments and Contingencies” within Item 8 of this Form 10-K.

Most of the U.S. laws governing environmental matters include criminal provisions. If we were convicted of a violation of the federal Clean Air Act or Clean Water Act, the facility or facilities involved in the violation could be deemed ineligible to be used in performing any U.S. government contract we are awarded until the Environmental Protection Agency (EPA) thereafter certifies that the condition giving rise to the violation has been corrected.

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In addition, we could be affected by future foreign or domestic laws or regulations imposed in response to concerns over climate change, and we monitor developments in environmental and climate-related laws and regulations and their potential impact to our business and financial condition. Changes in environmental and climate-related laws or regulations, including regulations on greenhouse gas emissions, carbon pricing, energy taxes, product efficiency standards, global chemical regulations, and mandatory disclosure obligations could lead to new or additional investment in product designs and facility upgrades and could increase our operational and environmental compliance expenditures, including increased energy and raw materials costs and costs associated with manufacturing changes.

For further discussion of risks related to environmental and climate matters and other government regulations, see Item 1A. “Risk Factors” of this Form 10-K.

Other Applicable Regulations. We conduct our businesses through subsidiaries and affiliates worldwide. As a result, our businesses and operations are subject to both U.S. and non-U.S. government laws, regulations, and procurement policies and practices, including regulations relating to ~~export and import controls,~~ tariffs, taxes, investment, sanctions, exchange controls, anti-corruption, privacy, and cash repatriation. Our international sales are also subject to varying currency, political, and economic risks.

~~Cautionary Note Concerning Factors That May Affect Future Results and Risk Factor Summary~~10

This Form 10-K 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 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,” “commit,” “commitment,” “anticipate,” “will,” “should,” “see,” “guidance,” “outlook,” “goals,” “objectives,” “confident,” “on track,” 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 Powder Metal Matter and related matters and activities, including without limitation other engine models that may be impacted, the pending disposition of Collins’ actuation and flight control business, targets and commitments (including for share repurchases or otherwise), and other statements which 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:

•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;

•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;

•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;

•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;

•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;

•risks relating to RTX’s 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;

•the condition of the aerospace industry;

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~~•potential~~Cautionary ~~changes~~Note inConcerning ~~U.S.~~Factors ~~government~~That ~~policy~~May ~~positions,~~Affect ~~including~~Future ~~changes in DoD policies or priorities;~~Results

This Form 10-K contains statements which, to the extent they are not statements of historical or present fact, constitute “forward-looking statements” under the securities laws. These forward-looking statements are intended to provide 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,” “commit,” “commitment,” “anticipate,” “will,” “should,” “see,” “guidance,” “outlook,” “goals,” “objectives,” “confident,” “on track,” “designed to,” 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 Powder Metal Matter and related matters and activities, including without limitation other engine models that may be impacted, targets and commitments (including for share repurchases or otherwise), and other statements which are not solely historical facts. All forward-looking statements involve risks, uncertainties, changes in circumstances, and other factors that are hard to predict, and each of which 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, as amended. Such risks, uncertainties, and other factors include, without limitation:

•changes in economic, capital market, and political conditions in the U.S. and globally;

•changes in U.S. government defense spending, national priorities, and policy positions;

•our performance on our contracts and programs, including our ability to control costs, and our dependence on U.S. government approvals for certain international contracts;

•challenges in the development, certification, production, delivery, support, and performance of RTX’s advanced technologies and new products and services and the realization of anticipated benefits;

•the challenges of operating in RTX’s highly-competitive industries both domestically and abroad;

•our reliance on U.S. and non-U.S. suppliers and commodity markets, including cost increases and disruptions in the delivery of materials and services to RTX or our suppliers;

•changes in trade policies, implementation of sanctions, imposition of tariffs (and counter-tariffs), and other trade measures and restrictions, foreign currency fluctuations, and sales methods;

•the economic condition of the aerospace industry;

•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;

•the scope, nature, timing, and challenges of managing and completing 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;

•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 ITAR and EAR, anti-bribery and anticorruption requirements, such as the Foreign Corrupt Practices Act (FCPA), industrial cooperation agreement obligations, and procurement and other regulations in the U.S. and other countries in which RTX and its businesses operate;

•~~the outcome of~~ pending, threatened, and future legal proceedings, investigations, ~~and other contingencies~~audits, ~~including those related to U.S. government audits~~ and ~~disputes~~other ~~and the potential for suspension or debarment of U.S. government contracting or export privileges as a result thereof~~contingencies;

•~~risks related to~~ the Deferred Prosecution Agreements, SEC Administrative Order, the Consent Agreement; and the related investigations by the SEC and the DOJ;

•~~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;

•~~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~~;

•~~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;

•~~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;

•~~risks relating to addressing~~ the Powder Metal Matter, including, without limitation, the number and expected timing of shop visits, inspection results and scope of work to be performed, turnaround time, availability of 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;

•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;

•~~risks relating to~~ an RTX product safety failure, quality issue, or other failure affecting RTX’s or its customers’ or suppliers’ products or systems;

•~~risks relating to~~ cybersecurity, including cyber-attacks on RTX’s information technology (IT) infrastructure, products, suppliers, customers and partners, and cybersecurity-related regulations;

•~~risks related to~~ insufficient indemnity or insurance coverage;

•~~risks~~our ~~related~~intellectual toproperty ~~artificial~~and ~~intelligence;~~certain third-party intellectual property;

•~~risks~~threats ~~relating~~ to ~~our~~RTX ~~intellectual~~facilities ~~property~~ and ~~certain~~personnel, ~~third-party~~or ~~intellectual~~those ~~property~~of its suppliers or customers, as well as public health crises, damaging weather, acts of nature, or other similar events outside of RTX’s control that may affect RTX or its suppliers or customers;

~~•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;~~11

~~•the~~Table ~~effect~~ of ~~changes in accounting estimates for our programs on our financial results;~~Contents

•~~the effect of~~ changes in ~~pension~~accounting ~~and~~estimates ~~other~~for ~~postretirement~~our ~~plan~~programs ~~estimates~~on ~~and~~our ~~assumptions~~financial ~~and contributions~~results;

•~~risks~~changes ~~relating~~in topension anand ~~impairment~~other ofpostretirement ~~goodwill~~plan estimates and ~~other~~assumptions ~~intangible~~and ~~assets~~contributions;

•~~the~~an ~~effects~~impairment of ~~climate~~goodwill ~~change~~ and ~~changing~~other orintangible ~~new climate-related regulations, customer and market demands, products and technologies~~assets; and

•~~the~~climate ~~intended~~change ~~qualification~~and ~~of (1) the Raytheon merger as a tax~~climate-~~free~~related ~~reorganization~~regulations, and ~~(2) the~~any ~~separation~~related ~~transactions~~customer and ~~other~~market ~~internal~~demands, ~~restructurings~~products ~~as tax-free to us (formerly known as United Technologies Corporation (UTC))~~ and ~~former UTC shareowners, in each case, for U~~technologies.S. ~~federal income tax purposes.~~

In addition, this Form 10-K includes important information as to risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. ~~See~~The ~~“Note 17:~~forward-looking ~~Commitments~~statements ~~and~~speak ~~Contingencies”~~only ~~within~~as ~~Item~~of 8the date of this ~~Form~~report ~~10-K~~or, in the ~~section~~case ~~titled~~of ~~“Management’s~~any ~~Discussion~~document ~~and~~incorporated ~~Analysis~~by reference, the date of ~~Financial~~that ~~Condition~~document. ~~and~~We ~~Results~~undertake ofno ~~Operations”~~obligation ~~under~~to ~~the~~publicly ~~headings~~update ~~“Business~~or ~~Overview,”~~revise ~~“Critical~~any ~~Accounting~~forward-looking ~~Estimates~~statements,” ~~“Results~~whether as a result of ~~Operations~~new information,” ~~and~~future ~~“Liquidity~~events, ~~and~~or ~~Financial Condition~~otherwise,” ~~within~~except ~~Item~~as 7required ofby ~~this~~applicable ~~Form~~law. ~~10-K,~~Additional ~~and~~information as to factors that may cause actual results to differ materially from those expressed or implied in the ~~sections~~forward-looking ~~titled~~statements ~~Item 1A.~~is ~~“Risk~~disclosed from time to time in our other filings with the SEC.

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Factors” and Item 3. “Legal Proceedings,” of this Form 10-K. This Form 10-K also includes important information as to these factors in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Government Matters,” within Item 7 of this Form 10-K, and in the “Business” section under the headings “General,” “Business Segments”, “Other Matters Relating to Our Business”, and “Regulatory Matters.” The forward-looking statements speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our other filings with the SEC.

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ITEM 1A. RISK FACTORS

Our business, operating results, financial condition, and liquidity can be impacted by the factors set forth below, any one of which could cause our actual results to vary materially from recent results or from our anticipated future results.

INDUSTRY RISKS

~~Our~~Changes ~~business~~in ~~may~~U.S. begovernment ~~adversely~~defense ~~affected~~spending bycould ~~changes~~negatively inimpact ~~global~~our ~~economic~~financial position, ~~capital~~results ~~market~~of operations, liquidity, and ~~political~~overall ~~conditions~~business. ~~Our~~U.S. ~~business,~~government ~~operating~~sales ~~results,~~constitute ~~financial~~a ~~condition,~~significant ~~and~~portion ~~liquidity~~of ~~may~~our beconsolidated ~~adversely~~sales. ~~affected~~Our byU.S. ~~changes~~government inrevenues ~~global~~largely ~~economic~~result ~~conditions,~~from ~~international~~contracts ~~relations,~~awarded ~~and~~under ~~geopolitical~~various ~~events~~U.S. ~~and~~government ~~actions~~programs, ~~including~~primarily ~~inflation,~~defense-related ~~credit~~programs ~~market~~with ~~conditions,~~the ~~levels~~U.S. Department of ~~consumer~~War ~~and~~(DoW) ~~business confidence, commodity~~ (~~including~~formerly ~~energy)~~referred ~~prices~~to ~~and~~as ~~supply,~~the ~~trade~~U.S. ~~policies~~Department ~~(including~~of ~~tariffs~~Defense), ~~exchange~~and ~~rates,~~a ~~levels~~broad range of ~~government~~programs ~~spending~~with ~~and~~other ~~deficits,~~departments ~~the threat environment, political conditions,~~ and ~~actual~~agencies. orChanges ~~anticipated~~in ~~default on sovereign debt~~U.S. ~~Supply~~government ~~chain~~defense ~~challenges~~spending ~~and~~for ~~inflationary~~various ~~pressures~~reasons, ~~continue~~including toas ~~negatively~~a ~~affect~~result ~~our~~of ~~performance~~potential ~~and~~changes ~~the~~in ~~performance~~policy ofor ~~our~~budgetary ~~suppliers~~positions ~~and~~or ~~subcontractors.~~priorities, ~~Inflation~~could ~~has~~negatively ~~increased~~impact ~~material~~our ~~and~~results ~~component~~of ~~prices~~operations, ~~labor~~financial ~~rates~~condition, and ~~supplier costs~~liquidity. InOur ~~addition,~~programs ~~due~~and tocontracts ~~the~~are ~~nature~~subject ofto ~~our~~U.S. government ~~and~~policies, ~~commercial~~budget ~~aerospace businesses~~decisions, and ~~their~~appropriation ~~respective customer and supplier contracts~~processes, wewhich ~~may~~are bedriven ~~unable~~by tonumerous ~~increase~~factors ~~our~~including ~~contract~~U.S. ~~value~~domestic orand ~~pricing~~broader togeopolitical ~~offset~~events, ~~cost~~macroeconomic ~~increases~~conditions, inand ~~particular~~the onability ~~our~~of ~~fixed~~the ~~price contracts~~U.S. ~~Our~~government ~~operating~~to ~~profits~~enact ~~and~~relevant ~~margins~~legislation, ~~under~~such ~~our~~as ~~contracts~~appropriations ~~could~~bills. beIn ~~adversely~~recent ~~affected~~years, ~~by these factors~~U.S. Ingovernment ~~addition,~~appropriations ~~high~~have ~~interest~~been ~~rates~~affected ~~can~~by ~~increase~~larger ~~the~~U.S. ~~cost~~government ofbudgetary ~~borrowing~~issues and ~~tighten~~related ~~the~~legislation, ~~availability~~and ~~of capital for~~ the ~~Company,~~U.S. ~~which~~government ~~could~~has ~~have~~been anunable ~~adverse~~to ~~effect~~complete onits ~~our~~budget ~~operating~~process ~~results,~~before ~~financial~~the ~~condition,~~end ~~and~~of ~~liquidity.~~its ~~Tightening~~fiscal ofyear, ~~credit~~resulting in ~~financial~~both ~~markets~~governmental ~~also~~shutdowns ~~could~~and ~~adversely~~continuing ~~affect~~resolutions ~~the~~providing ~~ability~~only ofenough ~~our~~funds ~~customers~~for ~~and~~U.S. ~~suppliers~~government agencies to ~~obtain~~continue ~~financing~~operating ~~for~~at ~~significant~~prior-year ~~purchases~~levels. ~~and~~Our ~~operations~~business, ~~could~~program ~~result in a decrease in~~performance, orand ~~cancellation~~results of, ~~orders~~operations ~~for~~could ~~our~~be ~~products~~impacted ~~and~~by ~~services, could impact~~ the ~~ability~~resulting ofdisruptions ~~our~~to ~~customers~~federal togovernment ~~make~~offices, ~~payments~~workers, and ~~could~~operations, ~~increase~~including risks relating to the ~~risk~~funding of ~~supplier~~certain ~~financial~~programs ~~distress.~~or ~~Moreover~~contracts, ~~volatility~~stop inwork ~~interest~~orders, ~~rates~~as ~~and~~well ~~financial~~as ~~markets~~delays ~~can~~in ~~lead~~contract ~~to economic uncertainty~~awards, annew ~~economic~~program ~~downturn~~starts, orpayments ~~recession and impact the demand~~ for ~~our~~work ~~products~~performed, and ~~services~~other asactions. ~~well~~As asa ~~impact~~result, ~~our supply chain~~U.S. ~~Our~~government ~~global~~defense ~~business~~spending islevels ~~also~~are ~~adversely~~subject ~~affected~~to bya ~~decreases~~wide inrange ~~the~~of ~~general~~outcomes ~~level~~and ofare ~~economic~~difficult ~~activity,~~to ~~such~~predict asbeyond ~~decreases~~the innear-term ~~business~~due ~~and~~to ~~consumer~~numerous ~~spending~~factors, ~~air~~including ~~travel,~~ the ~~financial~~external ~~strength~~threat ~~and~~environment, ~~performance~~future ofgovernmental ~~airframers~~priorities, ~~airlines~~ and ~~business~~the ~~jet~~state ~~operators,~~of ~~and~~governmental ~~government procurement~~finances. InSignificant ~~addition,~~changes ~~geopolitical~~in ~~risks~~U.S. ~~could affect~~ government ~~priorities,~~defense ~~budgets,~~spending ~~and~~or ~~policies,~~changes ~~such~~in as U.S. ~~approvals~~government ofpriorities, ~~our foreign defense sales as well as sanctions~~policies, ~~imposition~~and ofrequirements ~~tariffs,~~could ~~and~~have ~~other~~a ~~trade-restrictive~~material ~~activities,~~adverse ~~which~~effect ~~could~~on ~~impact~~our ~~sales~~results of ~~defense~~operations, ~~and~~financial ~~other~~condition, ~~products~~ and ~~services~~liquidity.

~~Changes~~We inface risks relating to our U.S. government ~~defense~~contracts ~~spending~~and ~~could~~programs, ~~negatively~~including ~~impact~~the ~~our~~mix ~~financial position, results~~ of ~~operations,~~our ~~liquidity, and overall business.~~ U.S. government ~~sales~~contracts ~~constitute~~and aprograms, ~~significant~~our ~~portion~~performance, ofand our ~~consolidated~~ability ~~sales.~~to ~~Our~~control Ucosts.S. ~~government~~The ~~revenues~~termination ~~largely~~of ~~result~~one ~~from~~or ~~contracts~~more ~~awarded~~of ~~under~~our ~~various~~ U.S. government ~~programs~~contracts, ~~primarily~~or ~~defense-related programs with~~ the ~~U.S.~~occurrence ~~Department~~ of ~~Defense~~performance ~~(DoD)~~delays, ~~and~~cost aoverruns, ~~broad~~product ~~range~~failures, ofshortages ~~programs with other departments and agencies. Changes~~ in ~~U.S.~~materials, ~~government~~components, ~~defense~~or ~~spending~~labor, ~~for~~contract ~~various~~definitization ~~reasons~~delays, ~~including~~or asother afailures ~~result~~to ofperform ~~potential~~to ~~changes~~customer inexpectations ~~policy~~and orcontract ~~budgetary positions or priorities~~requirements, could negatively impact our reputation and competitive position, results of operations, financial condition, and liquidity. ~~Our programs are subject to~~ U.S. government ~~policies,~~contracts ~~budget~~with ~~decisions,~~prime ~~and~~contractors ~~appropriation~~generally ~~processes,~~permit ~~which~~the ~~are~~government ~~driven~~to byterminate ~~numerous~~the ~~factors~~contract, ~~including~~in ~~U.S.~~whole ~~domestic~~or ~~and~~in ~~broader geopolitical events~~part, ~~macroeconomic~~without ~~conditions~~prior notice, ~~and~~at the ~~ability of the~~ U.S. government’s toconvenience ~~enact~~or ~~relevant~~for ~~legislation,~~default ~~such~~based ason ~~appropriations bills~~performance. InIf ~~recent~~one ~~years,~~of ~~U.S.~~our ~~government~~contracts ~~appropriations~~is ~~have~~terminated ~~been~~for ~~affected~~convenience, bywe ~~larger~~would ~~U.S.~~generally ~~government~~be ~~budgetary~~entitled ~~issues~~to ~~and~~payments ~~related~~for ~~legislation,~~our ~~and~~allowable ~~the~~costs ~~U.S.~~incurred, ~~government~~termination ~~has~~costs, ~~been~~and ~~unable~~would toreceive ~~complete~~some ~~its~~allowance ~~budget~~for ~~process~~profit ~~before~~on the ~~end~~work ofperformed. ~~its~~If ~~fiscal~~one ~~year,~~of ~~resulting~~our incontracts ~~both~~is ~~governmental~~terminated ~~shutdowns~~for ~~and~~default, ~~continuing~~we ~~resolutions~~would ~~providing~~generally ~~only~~be ~~enough~~entitled ~~funds for U.S. government agencies~~ to ~~continue~~payments ~~operating~~for atwork ~~prior-year~~accepted ~~levels.~~by ~~The~~the U.S. government. isA ~~currently~~termination ~~operating~~arising ~~under~~out aof ~~continuing~~our ~~resolution~~default tocould ~~keep~~expose ~~the~~us ~~government~~to ~~funded~~liability ~~while~~and ~~Congress~~have ~~works~~a tonegative ~~enact~~impact ~~full~~on ~~year~~our ~~fiscal~~ability ~~year~~to ~~2025~~obtain ~~(FY25)~~future ~~appropriation~~contracts ~~bills~~and orders. ItIn isaddition, ~~currently~~we ~~uncertain~~are ~~whether~~a ~~Congress~~subcontractor ~~will~~on besome ~~able~~programs, toand ~~enact~~the ~~FY25~~U.S. ~~appropriation~~government ~~bills~~could ~~and,~~terminate ifthe ~~such~~prime ~~bills~~contract ~~are~~for ~~passed,~~convenience ~~the~~or ~~spending~~otherwise, ~~levels~~without ~~and~~regard ~~priorities~~to ~~for~~our ~~defense~~performance ~~and~~as ~~other~~a ~~areas~~subcontractor. IfWe ~~Congress~~may isnot ~~unable~~be able to ~~complete~~offset ~~the~~lost ~~FY25~~revenues ~~appropriation~~resulting ~~bills,~~from ~~(or~~contract ~~pass~~termination. ~~another continuing resolution)~~Moreover, ~~then~~because the funding of U.S. government ~~would~~programs ~~shut~~is ~~down,~~subject ~~during~~to ~~which~~congressional ~~time~~appropriations ~~federal~~made ~~agencies~~on ~~would~~a ~~cease~~fiscal ~~all~~year ~~non-essential~~basis ~~functions.~~even ~~Our~~for ~~business~~multi-year programs, ~~program~~programs ~~performance,~~are often only partially funded initially and ~~results~~may ofnot ~~operations~~continue ~~could~~to be ~~impacted~~funded byin ~~the~~future ~~resulting~~years. ~~disruptions~~Appropriation tobills ~~federal~~may ~~government~~be ~~offices~~delayed, ~~workers,~~which ~~and~~may ~~operations,~~result ~~including~~in ~~risks~~delays ~~relating~~ to funding, the ~~funding~~collection of ~~certain programs~~receivables, ~~stop~~and ~~work~~our ~~orders,~~contract asperformance ~~well~~due asto ~~delays~~lack inof ~~contract~~authorized ~~awards,~~funds ~~new~~to ~~program~~procure ~~starts,~~related ~~payments~~products ~~for work performed,~~ and ~~other actions~~services. WeThe ~~also~~timing ~~may~~of ~~experience~~contract ~~similar~~definitization ~~impacts~~can inbe ~~the~~affected ~~event~~by offactors anspecific ~~extended~~to ~~period~~the ~~of continuing resolutions~~U.S. ~~Generally~~government, ~~the~~including ~~significance~~staffing oflimitations. ~~these~~Under ~~impacts~~certain ~~will~~circumstances, ~~primarily~~we bemay ~~based~~use onour ~~the~~own ~~length~~funds ofto ~~the~~meet ~~continuing~~our ~~resolution~~customer’s desired delivery dates or ~~shutdown.~~other ~~Furthermore~~requirements, ~~under~~but ~~the~~we ~~Fiscal~~may ~~Responsibility~~not ~~Act~~be ofreimbursed. ~~2023~~Further, ~~which~~if ~~imposes~~appropriations ~~limits on discretionary spending~~ for ~~defense~~one ~~and~~of ~~non-defense~~our programs inbecome ~~exchange~~unavailable, ~~for~~reduced, ~~the~~or ~~lifting~~delayed, of the ~~debt~~U.S. ~~ceiling~~government inmay ~~June~~terminate ~~2023,~~for ifconvenience ~~Congress~~our ~~fails~~contract toor ~~enact~~subcontract ~~all~~under ~~appropriation~~that ~~bills~~program. byIn ~~April 30~~addition, ~~2025,~~our ~~then~~U.S. ~~the~~government ~~budget~~contracts ~~caps~~typically ~~will~~involve bethe ~~reduced~~development, application, and ~~corresponding~~manufacture ~~automatic~~of ~~reductions~~advanced todefense ~~agency~~and ~~budget~~technology ~~accounts~~systems ~~will~~and beproducts ~~enforced~~aimed ~~through~~at ~~sequestration~~achieving challenging goals. As a result, ~~U.S.~~of ~~government~~untested ~~defense~~or ~~spending~~unproven ~~levels~~technologies, ~~are~~or ~~subject~~modified torequirements aor ~~wide~~specifications, ~~range~~we ofmay ~~outcomes~~experience technological and ~~are~~other ~~difficult~~performance todifficulties ~~predict~~(including ~~beyond~~delays, ~~the~~setbacks, ~~near-term~~cost ~~due~~overruns, toor ~~numerous~~product ~~factors~~failures), ~~including~~our ~~the~~attention ~~external~~or ~~threat~~resources ~~environment,~~may ~~future~~be ~~governmental~~diverted ~~priorities~~from other projects, and ~~the~~our ~~state~~future ofsales ~~governmental~~opportunities ~~finances.~~may ~~Significant~~be ~~changes in U~~impacted.S. ~~government~~Additionally, ~~defense~~as ~~spending~~our orcustomers ~~changes~~demand inmore ~~U.S.~~mature ~~government priorities~~solutions, ~~policies,~~we ~~and~~may ~~requirements~~be ~~could~~required ~~have~~to ainvest ~~material~~in ~~adverse~~development ~~effect~~prior onto ~~our~~contract ~~results~~award ofwith ~~operations,~~no ~~financial~~guarantee ~~condition,~~of ~~and liquidity~~award.

14Our profitability could be negatively affected based on the mix of our U.S. government contracts and programs and the costs incurred of performing the work, especially if we are unable to control costs or if our initial cost estimates are incorrect, particularly under fixed-price development contracts. Our U.S. government contracts are typically either fixed-priced contracts or cost reimbursement contracts. Fixed-price contracts are predominantly either firm fixed-price (FFP) contracts or fixed-price

Table of Contents

Weincentive ~~face~~(FPI) ~~risks relating to our U~~contracts.S. ~~government~~Under FFP contracts, ~~and~~we ~~programs,~~receive ~~including~~a ~~the~~fixed ~~mix~~price irrespective of ~~our~~the ~~U.S.~~actual ~~government~~costs ~~contracts~~we incur, and ~~programs,~~we ~~our~~therefore ~~performance,~~carry ~~and~~the ~~our~~burden ~~ability~~of toany ~~control~~cost ~~costs~~overruns. ~~The~~Under ~~termination~~FPI ofcontracts, ~~one~~we orgenerally ~~more~~share ofwith ~~our~~the U.S. government ~~contracts,~~savings orfor ~~the~~cost ~~occurrence~~underruns ofless ~~performance~~than ~~delays,~~target costs and expenses for cost overruns ~~(due~~exceeding target costs up to ~~inflation~~a ornegotiated ~~otherwise),~~ceiling ~~product~~price. ~~failures,~~We ~~shortages~~carry inthe ~~materials,~~entire ~~components,~~burden orof ~~labor,~~cost ~~contract~~overruns ~~definitization~~exceeding ~~delays,~~the orceiling ~~other~~price ~~failures~~amount tounder ~~perform~~FPI tocontracts, ~~customer~~which ~~expectations~~may ~~and~~result ~~contract~~in ~~requirements,~~a ~~could~~cumulative ~~negatively~~adjustment ~~impact~~in the period our ~~reputation~~estimates ~~and~~change. ~~competitive~~Under ~~position~~cost reimbursable contracts, ~~results~~we ofare ~~operations,~~reimbursed ~~financial~~for ~~condition,~~allowable costs and ~~liquidity.~~are ~~U.S.~~typically ~~government~~paid ~~contracts~~a ~~with~~fixed ~~prime~~or ~~contractors~~performance-based fee, but we are generally ~~permit~~not ~~the~~reimbursed ~~government~~for tounauthorized ~~terminate~~costs ~~the~~exceeding ~~contract,~~a incost ~~whole~~ceiling amount or incosts ~~part,~~not ~~without~~allowable ~~prior~~under ~~notice,~~the atcontract ~~the~~or Uapplicable regulations.S. ~~government’s~~Excess ~~convenience~~costs oron ~~for~~cost ~~default~~reimbursable ~~based~~contracts oncould ~~performance.~~also Ifresult ~~one~~in oflower ~~our~~profit ~~contracts~~rates. isWe ~~terminated~~may incur unexpected costs for ~~convenience~~various reasons, weincluding ~~would~~technical ~~generally~~and bemanufacturing ~~entitled~~challenges, toschedule ~~payments~~delays, ~~for~~the ~~our~~timeliness ~~allowable~~and ~~costs~~availability ~~incurred~~of materials, ~~termination~~components, ~~costs~~or labor, ~~and~~the ~~would~~inaccuracy ~~receive~~of ~~some~~initial ~~allowance~~contract ~~for~~cost ~~profit~~estimates, oninternal ~~the~~and ~~work~~subcontractor ~~performed.~~performance Ifor ~~one~~product ofquality ~~our~~issues, ~~contracts~~inability isto ~~terminated~~achieve ~~for~~expected ~~default~~cost reduction, wedigital ~~would~~transformation, ~~generally~~manufacturing, beoperating, ~~entitled~~and other strategic initiatives, inflation, inability to ~~payments~~pass ~~for~~on ~~work~~tariff ~~accepted~~costs, byand ~~the~~changing ~~U.S.~~laws ~~government.~~or Aregulations, ~~termination~~natural ~~arising~~disasters, ~~out~~and ofpublic ~~our~~health ~~default~~crises. ~~could~~We ~~expose~~may usalso toexperience ~~liability~~cost underruns which would reduce contract value and ~~have~~related aexpected ~~negative~~revenues, ~~impact~~and onwe ~~our~~may ~~ability~~be unable to ~~obtain~~expand ~~future~~the ~~contracts~~contract ~~and~~scope ~~orders.~~or Insecure ~~addition,~~additional wework ~~are~~to aoffset ~~subcontractor~~the onresulting ~~some~~lost revenues. While contracts for development programs, with complex design and ~~the~~technical ~~U.S.~~challenges ~~government~~are ~~could~~often ~~terminate~~cost ~~the~~reimbursable, ~~prime~~they ~~contract~~can ~~for~~be ~~convenience~~FFP or ~~otherwise~~FPI, ~~without~~which ~~regard~~can tosignificantly increase our ~~performance~~risk asof a ~~subcontractor.~~potential Wenegative ~~may~~profit ~~not~~adjustment, beas ~~able~~development tocontracts ~~offset~~by ~~lost~~nature ~~revenues~~involve ~~resulting~~elements ~~from~~that ~~contract~~have ~~termination.~~not ~~Moreover,~~been ~~because~~undertaken ~~the~~before ~~funding~~and, ofthus, ~~U.S.~~are ~~government~~highly ~~programs is~~ subject to ~~congressional~~future ~~appropriations~~unexpected ~~made~~cost ongrowth. aIn ~~fiscal~~addition, ~~year~~other ~~basis~~contracts ~~even~~in backlog are for ~~multi-year~~the ~~programs~~transition from development to production, ~~programs~~which ~~are~~includes ~~often~~starting ~~only~~and ~~partially~~stabilizing ~~funded~~a ~~initially~~manufacturing and ~~may~~test ~~not~~line ~~continue~~while tothe befinal ~~funded~~design inis ~~future~~still ~~years~~being validated. ~~Appropriation~~Moreover, ~~bills~~over ~~may~~the bepast ~~delayed~~several years, ~~which~~the ~~may~~DoW ~~result~~has inincreased ~~delays~~its touse ~~funding~~of Other Transaction Authority (OTA) agreements, ~~the~~under ~~collection~~which ofit ~~receivables~~awards certain prototypes, research, and ~~our~~production ~~contract~~contracts ~~performance~~without ~~due~~all toof ~~lack~~the ofprocurement ~~authorized~~requirements ~~funds~~that typically apply to ~~procure~~DoW ~~related~~contracts, ~~products~~including ~~and~~justification ~~services.~~of ~~The~~sole ~~timing~~source ofawards. ~~contract~~OTAs ~~definitization~~may ~~can~~use befixed-price ~~affected~~contracting byduring ~~factors~~all ~~specific~~phases toof the ~~U.S. government~~contract, ~~including~~or ~~staffing~~mandated ~~limitations.~~contract ~~Under~~cost ~~certain~~sharing. ~~circumstances,~~They we may ~~use~~also ~~our~~require ~~own~~non-traditional ~~funds~~subcontractor toparticipation ~~meet~~and ~~our~~impose ~~customer’s~~other ~~desired~~requirements ~~delivery~~that ~~dates~~differ orfrom our other ~~requirements,~~DoW ~~but~~contracts. weOur business may ~~not~~ be ~~reimbursed.~~negatively ~~Further,~~impacted if ~~appropriations~~we are unable to bid for ~~one~~OTA ofwork ~~our~~and/or ~~programs~~perform ~~become~~on ~~unavailable,~~our ~~reduced~~OTA agreements, orincluding ~~delayed~~any applicable non-traditional requirements. In addition, ~~the~~in order to support U.S. government priorities, we may ~~terminate~~begin ~~for~~performance ~~convenience~~on ~~our~~an undefinitized contract oraction ~~subcontract~~with ~~under~~a ~~that~~not-to-exceed ~~program.~~price Inbefore ~~addition~~completing contract negotiations on the terms, ~~our~~specifications, or price between the parties. The U.S. government ~~contracts~~has ~~typically~~the ~~involve~~ability ~~the~~to ~~development,~~unilaterally ~~application~~definitize contracts, ~~and~~which ~~manufacture~~would ofobligate ~~advanced~~us ~~defense~~to ~~and~~perform ~~technology~~under ~~systems~~terms and ~~products~~conditions ~~aimed~~imposed atby ~~achieving~~the ~~challenging~~U.S. ~~goals~~government without our agreement. AsUncertainties ain ~~result~~final ofcontract ~~untested~~price, orspecifications ~~unproven~~and ~~technologies~~terms, or ~~modified~~loss ~~requirements~~of ornegotiating ~~specifications,~~leverage weassociated ~~may~~with ~~experience~~particularly ~~technological~~long ~~and~~delays ~~other~~in ~~performance~~contract ~~difficulties~~definitization ~~(including~~may ~~delays,~~negatively ~~setbacks,~~affect ~~cost~~our ~~overruns,~~profitability. orOur ~~product~~U.S. ~~failures),~~government ~~our~~contracts ~~attention~~also orrequire ~~resources~~us ~~may~~to becomply ~~diverted~~with ~~from~~extensive ~~other~~and ~~projects~~evolving procurement laws, rules and ~~our~~regulations ~~future~~and ~~sales~~subject ~~opportunities~~us ~~may~~to bepotential ~~impacted~~U.S. ~~Additionally~~government surveillance, asaudits, ~~our~~investigations, ~~customers~~and ~~demand~~disputes. ~~more~~We ~~mature~~are ~~and~~also ~~proven~~involved ~~solutions~~in programs that are classified by the U.S. government, wewhich ~~may~~have besecurity ~~required~~requirements tothat ~~invest~~place inlimits ~~development~~on ~~prior~~our ability to ~~contract~~discuss ~~award~~our ~~with~~performance noon ~~guarantee~~these ofprograms, ~~award~~including any risks, disputes, and claims.

Our ~~profitability~~international ~~could~~business beis ~~negatively~~subject ~~affected~~to ~~based~~economic, onregulatory, ~~the~~competition, ~~mix~~and ofother ~~our U~~risks.S. ~~government~~Our ~~contracts~~international ~~and~~sales ~~programs~~ and ~~the~~operations ~~costs incurred of performing the work, especially if we~~ are ~~unable~~subject to ~~control~~risks ~~costs~~associated orwith ifpolitical ~~our~~and ~~initial~~economic ~~cost estimates are incorrect~~factors, ~~particularly~~regulatory under fixed-price development contracts. Our U.S. government contracts are typically either fixed-priced contracts or cost reimbursement contracts. Fixed-price contracts are predominantly either firm fixed-price (FFP) contracts or fixed-price incentive (FPI) contracts. Under FFP contractsrequirements, ~~we receive a fixed price irrespective of the actual costs we incur~~competition, and weother ~~therefore~~risks. ~~carry~~A ~~the~~significant ~~burden~~portion of ~~any~~our ~~cost~~sales ~~overruns.~~are ~~Under FPI contracts~~international, weincluding ~~generally share with the~~ U.S. ~~government~~export ~~savings~~sales. ~~for~~Transactions ~~cost~~related ~~underruns less than target costs and expenses for cost overruns exceeding target costs up~~ to ~~a negotiated ceiling price~~non-U.S. Weoperations ~~carry the entire burden of cost overruns exceeding the ceiling price amount under FPI contracts, which~~ may ~~result~~be indenominated ~~a cumulative adjustment~~ in ~~the~~local ~~period our estimates change~~currencies. ~~Under~~Foreign ~~cost~~currency ~~reimbursable~~exchange ~~contracts,~~rate wefluctuations ~~are~~(including ~~reimbursed~~their ~~for~~impact allowable costs and are typically paid a fixed or performance-based fee, but we are generally not reimbursed for unauthorized costs exceeding a cost ceiling amount or costs not allowable under the contract or applicable regulations. Excess costs on ~~cost~~supplier ~~reimbursable~~prices) ~~contracts could also result in lower profit rates. We~~ may ~~incur~~negatively ~~unexpected~~affect ~~costs~~demand for ~~various~~our ~~reasons,~~products ~~including technical~~ and ~~manufacturing~~our ~~challenges,~~operating ~~schedule~~profit ~~delays, the timeliness~~ and ~~availability~~margins. ofThe ~~materials,~~majority ~~components, or labor, the inaccuracy~~ of ~~initial~~our ~~contract~~commercial ~~cost~~aerospace ~~estimates,~~sales ~~internal~~are ~~and~~in ~~subcontractor~~U.S. ~~performance or product quality issues~~Dollars, ~~inability~~while ~~to achieve~~ the ~~benefits~~majority of our ~~expected~~non-U.S. ~~cost reduction, digital transformation, manufacturing,~~ operating, ~~and other strategic initiatives, inflation, inability to pass on tariff~~ costs, ~~and~~are ~~changing~~incurred ~~laws~~in orthe ~~regulations,~~applicable ~~natural~~local ~~disasters, and public health crises~~currency. WePratt ~~may~~& ~~also~~Whitney ~~experience~~Canada ~~cost~~is ~~underruns~~especially ~~which~~susceptible ~~would reduce contract value and related expected revenues, and we may be unable~~ to ~~expand~~fluctuations ~~the~~in ~~contract~~exchange ~~scope~~rates ~~or secure additional work to offset the resulting lost revenues. While contracts~~ for ~~development~~this programs with complex design and technical challenges are often cost reimbursable, they can be FFP or FPI, which can significantly increase our risk of a potential negative profit adjustment, as development contracts by nature involve elements that have not been undertaken before and, thus, are highly subject to future unexpected cost growthreason. In addition, ~~other~~because ~~contracts~~our infinancial ~~backlog~~statements are ~~for~~denominated ~~the~~in ~~transition from development to production, which includes starting and stabilizing a manufacturing and test line while the final design is still being validated~~U.S. ~~Moreover~~Dollars, ~~over~~currency ~~the~~fluctuations past several years, the DoD has increased its use of Other Transaction Authority (OTA) agreements, under which it awards certain prototypes, research, and production contracts without all of the procurement requirements that typically apply to DoD contracts, including justification of sole source awards. OTAs may ~~use~~cause ~~fixed-price~~translation ~~contracting~~gains ~~during all phases of the contract,~~ or ~~mandated~~losses contract cost sharing. They may also require non-traditional subcontractor participation and impose other requirements that differ from our other DoD contracts. Our business may be negatively impacted if we are unable to bid for ~~OTA work and/or perform on our OTA agreements, including any applicable~~ non-~~traditional requirements. In addition, in order to support~~ U.S. ~~government~~operating ~~priorities,~~unit wefinancial ~~may~~statements. ~~begin performance on an undefinitized contract action with a not-to-exceed price before completing contract~~

15Our international sales and operations are also subject to risks associated with local government laws, regulations, and policies, including with respect to investments, taxation, exchange controls, capital controls, employment regulations, repatriation of earnings, and tariffs. Differing legal systems, customs, and contract laws and regulations pose additional risk. International transactions may include contractual terms that differ from those of similar contracts in the U.S. or that may be interpreted differently in foreign countries. In addition, in certain foreign countries, we engage foreign non-employee representatives and consultants for international sales and teaming with international subcontractors, partners, and suppliers for international programs. While we have robust policies and controls in place, these engagements expose us to various risks including those associated with the Foreign Corrupt Practices Act (FCPA) and local antibribery laws and regulations.

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negotiations on the terms, specifications, or price between the parties. The U.S. government has the ability to unilaterally definitize contracts, which would obligate us to perform under terms and conditions imposed by the U.S. government, affecting our ability to negotiate mutually agreeable contract terms. Uncertainties in final contract price, specifications and terms, or loss of negotiating leverage associated with particularly long delays in contract definitization may negatively affect our profitability. Our U.S. government contracts also require us to comply with extensive and evolving procurement laws, rules and regulations and subject us to potential U.S. government surveillance, audits, investigations, and disputes. We are also involved in programs that are classified by the U.S. government, which have security requirements that place limits on our ability to discuss our performance on these programs, including any risks, disputes, and claims.

Our international business is subject to economic, regulatory, competition, and other risks. Our international sales and operations are subject to risks associated with political and economic factors, regulatory requirements, competition, and other risks. A significant portion of our sales are international, including U.S. export sales. Our non-U.S. operations transactions may be denominated in local currencies. Foreign currency exchange rate fluctuations (including their impact on supplier prices) may negatively affect demand for our products and our reported profits, as well as our operating margins. The majority of our commercial aerospace sales are in U.S. Dollars, while the majority of their non-U.S. operating costs are incurred in the applicable local currency. Pratt & Whitney Canada is especially susceptible to fluctuations in exchange rates for this reason. In addition, because our financial statements are denominated in U.S. Dollars, currency fluctuations may cause translation gains or losses for non-U.S. operating unit financial statements.

Our international sales and operations are also subject to risks associated with local government laws, regulations, and policies, including with respect to investments, taxation, exchange controls, capital controls, employment regulations, repatriation of earnings, and tariffs. Differing legal systems, customs, and contract laws and regulations pose additional risk. International transactions may include contractual terms that differ from those of similar contracts in the U.S. or that may be interpreted differently in foreign countries. In addition, in certain foreign countries, we engage foreign non-employee representatives and consultants for international sales and teaming with international subcontractors, partners, and suppliers for international programs. While we have robust policies and controls in place, these engagements expose us to various challenges including risks associated with the Foreign Corrupt Practices Act (FCPA) and local antibribery laws and regulations. From time to time, we have disputes with such representatives regarding claimed commissions and other matters which can result in litigation or arbitration. In addition, we face risks related to the unintended or unauthorized use of our products.

Our international business faces substantial competition from both U.S. companies and foreign companies. In some instances, foreign companies may be owned by foreign governments or may receive loans, marketing subsidies, and other assistance from their governments that may not be available to U.S. companies or our foreign subsidiaries. In addition, foreign companies may be subject to fewer restrictions on technology transfer than U.S. companies.

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Our international contracts, particularly for sales of defense products and services, may include offset obligations or industrial cooperation obligations requiring specific local purchases, manufacturing agreements, technology transfer agreements, financial support obligations, or other local investments, sometimes in the form of in-country industrial participation (ICIP) agreements. Approvals of offset or ICIP thresholds and requirements may be subjective and time-consuming and may delay contract awards. Certain customers’ demands are increasing for greater offset or ICIP commitment levels, higher-value content, including the transfer of technologies and capabilities, and local production and economic development. In addition, our ability to satisfy customer demands relating to the transfer of technologies and capabilities under ICIP arrangements and other international contracts may be limited by U.S. government export controls.

As a result of the above factors, we could experience financial penalties and award and funding delays on international programs, our profitability on these programs could be negatively affected, and we could incur losses on these programs that could negatively impact our results of operations, financial condition, and liquidity.

Geopolitical factors and changes in policies and regulations could adversely affect our business. Our international sales and operations are sensitive to changes in foreign national priorities, foreign government budgets, and regional and local political and economic factors, including wars and armed conflicts, political or civil unrest, volatility in energy prices or supply, inflation, interest rates, changes in threat environments and political relations, and geopolitical uncertainties. Our international sales and operations are also sensitive to changes in U.S. or foreign government laws, regulations, and policies, including those related to tariffs, sanctions, embargoes, export and import controls, other trade restrictions, and trade agreements. Events such as increased trade restrictions, retaliatory trade policies, or regime change can affect demand for our products and services, the competitive position of our products, our supply chain, and our ability to manufacture or sell products in certain countries. Further, operations in emerging market countries are subject to additional risks, including volatility in rates of economic growth, government instability, cultural differences (such as employment and business practices), the imposition of exchange and capital controls, and risks associated with exporting components manufactured in those countries for incorporation into finished products completed in other countries. While these factors and their impact are difficult to predict, any one or more of them could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

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them could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

In addition, given the role of our defense businesses in the support of the national security interests of the U.S. and its allies, we are subject to risks and uncertainties relating to policies of the U.S. and its allies, as well as other countries, including those that are or become regarded as potential adversaries or threats. We engage in both direct commercial sales, which generally require U.S. government licenses and approvals, as well as foreign military sales, which are government-to-government transactions initiated by, and carried out at the direction of, the U.S. government. Changes in budgets and spending levels, policies, or priorities, which are subject to geopolitical risks and threats, may impact our defense businesses, including the timing of and delays in U.S. government licenses and approvals for sales, the risk of sanctions or other restrictions, as well as potential human rights issues associated with the use of our defense products. These risks and uncertainties may directly or indirectly impact our commercial businesses as well.

In February 2023, China announced sanctions against Raytheon Missiles & Defense (RMD) (a former RTX Corporation (RTX) business segment, which became part of Raytheon as a result of the July 1, 2023 RTX segment realignment), and previously announced it may take measures against RTX, in connection with certain foreign military sales to Taiwan. The Chinese sanctions against RMD included a fine equal to twice the value of the arms that RMD sold to Taiwan since September 2020. Since that time, China has announced additional sanctions against the Raytheon business and a Collins Aerospace (Collins) joint venture. If China were to impose additional sanctions, enforce announced sanctions, or take other regulatory action against RTX, our suppliers, affiliates, or partners, it could potentially disrupt our business operations. Any impact of these or other potential sanctions, or other actions by China, is uncertain. Our businesses have sold, and are expected to sell in the future, additional defense products to Taiwan from time to time in alignment with U.S. government policy, and we are unable to determine the potential impact, if any, of any future sanctions or other actions by China in response to these sales. Moreover, the Chinese government has generally expanded its ability to restrict China-related import, export and investment activities, which may have an adverse impact on our ability to conduct business or sell our commercial aerospace products in China. In addition, in response to Russia’s invasion of Ukraine, the U.S. government and the governments of various jurisdictions in which we operate have imposed broad economic sanctions and export controls targeting specific industries, entities, and individuals in Russia. The Russian government has implemented similar counter-sanctions and export controls targeting specific industries, entities, and individuals in the U.S. and other jurisdictions in which we operate, including certain members of the Company’s management team and Board of Directors. These government measures, among other limitations, restrict transactions involving various Russian banks and financial institutions and impose enhanced export controls limiting transfers of various goods, software, and technologies to and from Russia, including broadened export controls specifically targeting the aerospace sector. These measures have adversely affected and could continue to adversely affect the Company and/or our supply chain, business partners, or customers.

We continue to closely monitor potential impacts to RTX’s business, customers, suppliers, employees, and operations in Israel, the Middle East, and the region at large due to the war in Gaza, including a recently-announced ceasefire, the related escalation of conflict and instability in the region, and the regime change in Syria. RTX’s commercial manufacturing facilities in Israel remain open and operational and have continued exporting products and importing critical items and raw materials. RTX’s defense programs’ ability to receive components from Israel has not been impacted in any material respect, although we could experience future delivery delays of certain products if the ceasefire does not hold, or if further escalations arise. The overall impacts to RTX from this situation have been minimal; however, given the volatile nature of the situation, the potential impacts to RTX are subject to change.15

~~Our~~Table ~~financial performance is dependent on the condition~~ of the aerospace industry. Our commercial aerospace businesses constitute a substantial portion of our financial results, and the performance of those businesses is directly tied to economic conditions in the commercial 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, including current and predicted traffic levels, load factors, aircraft fuel prices, labor issues, airline consolidation, bankruptcies and restructuring activities, competition, the retirement of older aircraft, corporate profitability and financial health, cost reduction efforts, tightening of credit in financial markets and the availability of aircraft leasing and financing alternatives, remaining performance obligations levels, the satisfaction of certification or other regulatory requirements for aircraft in various jurisdictions, regulatory changes, terrorism and related safety concerns, political stability, and general economic conditions. Any of these factors affecting the industry could reduce the sales and margins of our aerospace businesses. In addition, because we have significant business with Airbus and Boeing, our aerospace businesses could be adversely affected by challenges faced by these or other individual customers. Other factors, including future terrorist actions, aviation safety concerns, public health issues, or major natural disasters, could also dramatically reduce the demand for commercial air travel, which could negatively impact the sales and margins of our aerospace businesses. Additionally, because a substantial portion of product deliveries to commercial aerospace customers are scheduled for delivery in the future, changes in economic conditions may cause customers to request that firm Contents

We continue to closely monitor potential impacts to RTX’s business, customers, suppliers, employees, and operations in Israel, the Middle East, and the region at large due to continued regional instability and tensions.

Our financial performance is dependent on the condition of the aerospace industry. Our commercial aerospace businesses constitute a substantial portion of our financial results, and the performance of those businesses is directly tied to economic conditions in the commercial 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, including current and predicted traffic levels, load factors, aircraft fuel prices, labor issues, airline consolidation, bankruptcies and restructuring activities, competition, the retirement of older aircraft, corporate profitability and financial health, cost reduction efforts, tightening of credit in financial markets and the availability of aircraft leasing and financing alternatives, remaining performance obligations levels, the satisfaction of certification or other regulatory requirements for aircraft in various jurisdictions, regulatory changes, terrorism and related safety concerns, political stability, and general economic conditions. Any of these factors affecting the industry could reduce the sales and margins of our aerospace businesses. In addition, because we have significant business with Airbus and Boeing, our aerospace businesses could be adversely affected by challenges faced by these or other individual customers. Other factors, including future terrorist actions, aviation safety concerns, public health issues, or major natural disasters, could also dramatically reduce the demand for commercial air travel, which could negatively impact the sales and margins of our aerospace businesses. Additionally, because a substantial portion of product deliveries to commercial aerospace customers are scheduled for delivery in the future, changes in economic conditions may cause customers to request that firm orders be rescheduled or canceled. At times, our aerospace businesses also enter into FFP or cost-share development contracts with customers, which may require us to bear cost overruns related to unforeseen technical and design challenges that arise during the development and early production stages of a program. Spare parts sales and aftermarket services, particularly under long-term aftermarket contracts are also affected by similar factors, including usage, pricing, technological improvements, regulatory changes, and the retirement of older aircraft. Furthermore, because of the lengthy research and development cycle involved in bringing products in these business segments to market, we cannot predict the economic conditions that will exist when any new product is ready to enter into service. A reduction in spending in the commercial aviation industry could have a significant effect on the demand for our products, which could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

We design, manufacture, and service products that incorporate advanced technologies; the introduction of new products and technologies involves risks, and we may not realize the degree or timing of benefits initially anticipated. The design, development, production, sale, and support of innovative commercial aerospace and defense systems and products involves advanced technologies. We invest substantial amounts in research and development efforts to pursue advancements in a wide range of technologies, products, and services aimed at meeting the ever-evolving product, program, and service needs of our customers. Our ability to realize the anticipated benefits of our investments depends on a variety of factors, including the competitiveness of our offerings’ performance relative to our peers; meeting development, production, certification, and regulatory approval schedules; receiving regulatory approvals; execution of internal and external performance plans; achieving cost and production efficiencies; availability and quality of supplier- and internally-produced parts and materials; availability of supplier and internal facility capacity to perform maintenance, repair, and overhaul services; availability of test equipment; development of complex software; hiring and training of qualified personnel; identification of emerging technological trends for our target end-customers; the level of customer interest in new technologies and products; requirements to provide disclosure and company intellectual property rights for certain government procurement programs; and customer acceptance of our products and technologies. For example we are investing in artificial intelligence, among other advanced technologies, and our business may be adversely affected if we are unable to successfully integrate the technology into our internal business processes and products and services in a timely, cost-effective, compliant, and responsible manner. The methods and processes we use to develop, deploy or otherwise use artificial intelligence systems may be found to not be in compliance with rapidly evolving regulatory standards thereby preventing or frustrating our use of the systems or creating liability for us. These methods and processes may further perform in unexpected ways or be misused, jeopardizing RTX’s intellectual property or potentially resulting in unexpected loss or misappropriation of intellectual property. Improper use of artificial intelligence could also lead to data breaches, undetected cyber-attacks, regulatory action, and reputational risks. In addition, our customers manufacture or acquire end products and systems that incorporate certain of our products. These end products and systems may also incorporate additional technologies manufactured by third parties and involve additional risks and uncertainties. As a result, the performance and industry acceptance of these larger systems and end products could affect the level of customer interest in, and acceptance of, our products in the marketplace. In addition, many of our products must adhere to strict regulatory and market-driven safety and performance standards in a variety of jurisdictions. The evolving nature of these standards, along with the long duration of development, production, and aftermarket support programs, creates uncertainty regarding program profitability, particularly with our aircraft engine products. Development efforts divert resources from other potential investments in our businesses, and these efforts may not lead to the development of new technologies or products on a timely

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basis or meet the needs of our customers as fully as alternative investments. In addition, the industries for our products or products that incorporate our technologies may not develop or grow as we anticipate. We, or our customers, suppliers, or subcontractors, may encounter difficulties in developing and producing new products and services, and may not realize the degree or timing of benefits initially anticipated or may otherwise suffer significant adverse financial consequences. Due to the design complexity of our products, or those of our customers or third party manufacturers that incorporate our products into theirs or our customers’ products, we may experience delays in completing the development and introduction of new products, or we may experience the suspension of production after these products enter into service due to safety concerns. Delays and/or suspension of production could result in increased development costs or deflect resources from other projects. If we fail in our development projects or if our new products or technologies fail to achieve customer acceptance or competitors develop more capable technologies or offerings, we may be unsuccessful in obtaining new contracts or winning all or a portion of next generation programs, including in key areas such as advanced sensing solutions, next-generation aircraft engine technologies, advanced avionics solutions and hypersonics. Any of the foregoing could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

In particular, Pratt & Whitney’s Geared Turbofan (GTF) family of engines incorporates advanced technologies. The level of orders received for the GTF family of engines, coupled with a requirement to achieve mature production levels in a very short time frame, have required significant growth in our manufacturing and supply chain capacity. In addition, in July 2023 Pratt & Whitney determined that a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100G-JM (PW1100) GTF fleet, which powers the A320neo family of aircraft. This issue has resulted in increased engine removals and inspections, shop visits, aircraft on ground levels, and costs to the Company. If any of our production or maintenance, repair, and overhaul ramp-up efforts are delayed, if suppliers cannot timely deliver or perform to our standards, if any other engine models are found to be materially impacted by the powder metal issue, and/or if we identify or experience other issues, including durability issues, with in-service engines in the GTF family of engines (or other engines), whether for manufacturing reasons or otherwise, we may not meet customer requirements, which could result in material additional costs, including liquidated damages or other liabilities.

Competition may reduce our revenues and margins and limit our future opportunities. We operate in highly competitive industries and our competitors may have more extensive or more specialized engineering, manufacturing, servicing, and marketing capabilities than we do. Our contracts are typically awarded on a competitive basis. Our bids are based in part upon the cost to provide the products and services. If we fail to accurately estimate these costs, the profitability of our contracts may be adversely affected. In addition, we may face customer-directed cost reduction targets that could have a material adverse effect on the profitability of our contracts if these targets are not achieved when required. Moreover, bid protests from unsuccessful bidders on new program awards are frequent with respect to DoW awards in particular. Generally, a bid protest will delay the start of contract activities, delay earnings, and could result in the award decision being overturned and require a re-bid of the contract. We have also experienced highly competitive pricing, in which a bidder may anticipate making a substantial investment in a program in order to win the work. Highly competitive activity within the commercial aerospace industry has included substantial discounts and other financial incentives, performance and operating cost guarantees, and participation in financing arrangements, in order to secure both new engine business and the aftermarket revenues associated with these products. If our competitors can offer lower cost services or products, or provide services or products more quickly, at equivalent or in some cases even reduced capabilities, we may lose business opportunities, which could adversely affect our future results. Competitors may also be willing to accept more risk or lower profitability in competing for contracts than we are. Further, our competitors, including our customers, may develop competing technologies which gain industry acceptance in advance of, or instead of, our products, or meet particular in-demand technological needs before us or with technology that is superior to our existing or new technologies. This competition could cause our existing technologies and offerings to become obsolete or otherwise decrease demand for our offerings. In addition, the possibility exists that competitors or customers will develop aftermarket services and parts for our products that attract customers and adversely impact our return on investment on original equipment manufacturer products. We also anticipate companies continuing to enhance their competitive position against our defense businesses as a result of continued domestic and cross-border defense industry consolidation and the expansion of competitors’ capabilities. We are also facing increased competition domestically and internationally from foreign and multinational firms. Additionally, some customers, including the DoW, are increasingly turning to commercial contractors, other non-traditional defense contractors, and startups. For example, the U.S. government may award large competitive contracts to other suppliers to maintain a broad industrial base. In addition, U.S. government procurement policies and procedures and the application thereof are regularly changing. For example, an increase in the use of contract structures that shift risk to the contractor (such as fixed-price development contracts and incentive-based fee arrangements), use of novel award fee criteria, evaluation of a bidder’s willingness to provide detailed competitively sensitive intellectual property (such as detailed RTX design, manufacturing and process information that would risk loss of competitively sensitive information), or requirements to transfer technology to domestic sources in connection with offset obligations, could adversely affect our profit rates, ability to preserve differentiated product offerings, maintain lower tier suppliers, or make it more difficult to win new

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~~orders be rescheduled or canceled~~contracts. AtIf ~~times,~~we ~~our~~are ~~aerospace~~unable ~~businesses also enter into FFP or cost-share development contracts with customers, which may require us~~ to ~~bear~~continue ~~cost overruns related~~ to ~~unforeseen~~compete ~~technical~~successfully ~~and~~against ~~design~~our ~~challenges~~current ~~that~~or ~~arise~~future ~~during~~competitors the development and early production stages of a program. Spare parts sales and aftermarket services, particularly under long-term aftermarket contracts are also affected by similar factors, including usage, pricing, technological improvements, regulatory changes, and the retirement of older aircraft. Furthermore, because of the lengthy research and development cycle involved in ~~bringing~~our ~~products~~core ~~in these business segments to market~~businesses, we ~~cannot~~may ~~predict~~experience ~~the~~declines ~~economic conditions that will exist when any new product is ready to enter into service. A reduction~~ in ~~spending~~revenues inand ~~the commercial aviation~~ industry ~~could~~segment ~~have~~share ~~a significant effect on the demand for our products,~~ which could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

WeOPERATIONAL design, manufacture, and service products that incorporate advanced technologies; the introduction of new products and technologies involves risks, and we may not realize the degree or timing of benefits initially anticipated. The design, development, production, sale, and support of innovative commercial aerospace and defense systems and products involves advanced technologies. We invest substantial amounts in research and development efforts to pursue advancements in a wide range of technologies, products, and services aimed at meeting the ever-evolving product, program, and service needs of our customers. Our ability to realize the anticipated benefits of our investments depends on a variety of factors, including the competitiveness of our offerings’ performance relative to our peers; meeting development, production, certification, and regulatory approval schedules; receiving regulatory approvals; execution of internal and external performance plans; achieving cost and production efficiencies; availability and quality of supplier- and internally-produced parts and materials; availability of supplier and internal facility capacity to perform maintenance, repair, and overhaul services; availability of test equipment; development of complex software; hiring and training of qualified personnel; identification of emerging technological trends for our target end-customers; the level of customer interest in new technologies and products; requirements to provide disclosure and company intellectual property rights for certain government procurement programs; and customer acceptance of our products and technologies. For example we are investing in artificial intelligence, among other advanced technologies, and our business may be adversely affected if we are unable to successfully integrate the technology into our internal business processes and products and services in a timely, cost-effective, compliant, and responsible manner. The methods and processes we use to develop, deploy or otherwise use artificial intelligence systems may be found to not be in compliance with rapidly evolving regulatory standards thereby preventing or frustrating our use of the systems or creating liability for us. These methods and processes may further perform in unexpected ways or be misused, jeopardizing RTX’s intellectual property or potentially resulting in unexpected loss or misappropriation of intellectual property. Improper use of artificial intelligence could also lead to data breaches, undetected cyber-attacks, regulatory action, and reputational risks. In addition, our customers manufacture or acquire end products and systems that incorporate certain of our products. These end products and systems may also incorporate additional technologies manufactured by third parties and involve additional risks and uncertainties. As a result, the performance and industry acceptance of these larger systems and end products could affect the level of customer interest in, and acceptance of, our products in the marketplace. In addition, many of our products must adhere to strict regulatory and market-driven safety and performance standards in a variety of jurisdictions. The evolving nature of these standards, along with the long duration of development, production, and aftermarket support programs, creates uncertainty regarding program profitability, particularly with our aircraft engine products. Development efforts divert resources from other potential investments in our businesses, and these efforts may not lead to the development of new technologies or products on a timely basis or meet the needs of our customers as fully as alternative investments. In addition, the industries for our products or products that incorporate our technologies may not develop or grow as we anticipate. We, or our customers, suppliers, or subcontractors, may encounter difficulties in developing and producing new products and services, and may not realize the degree or timing of benefits initially anticipated or may otherwise suffer significant adverse financial consequences. Due to the design complexity of our products, or those of our customers or third party manufacturers that incorporate our products into theirs or our customers’ products, we may experience delays in completing the development and introduction of new products, or we may experience the suspension of production after these products enter into service due to safety concerns. Delays and/or suspension of production could result in increased development costs or deflect resources from other projects. If we fail in our development projects or if our new products or technologies fail to achieve customer acceptance or competitors develop more capable technologies or offerings, we may be unsuccessful in obtaining new contracts or winning all or a portion of next generation programs, including in key areas such as advanced sensing solutions, next-generation aircraft engine technologies, advanced avionics solutions and hypersonics. Any of the foregoing could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.RISKS

InOur ~~particular~~business and financial performance may be adversely affected by cyber-attacks on information technology (IT) infrastructure and products, ~~Pratt~~as &well ~~Whitney’s~~as ~~Geared~~changes ~~Turbofan~~in cybersecurity regulations. Our business may be impacted by disruptions to our own or third-party IT infrastructure, and the products and services that we provide our customers are also at risk of being adversely affected by cyber-attacks. Like other companies, we regularly experience cyber-based attacks. Cybersecurity threats are continuously evolving and may have an impact on our customers, suppliers, subcontractors, and other third parties with whom we do business routinely, both on premises and in the cloud, attempting to gain unauthorized access to our confidential, proprietary, or otherwise protected information, classified information, or personal data or other information relating to our employees, customers, and other third parties, or to disrupt our systems or the systems of third parties. Cybersecurity threats also include attacks targeting the security, confidentiality, integrity, and/or availability of the hardware, software, and information installed, stored, or transmitted in our products, including after the purchase of those products and when they are incorporated into third-party products, facilities, or infrastructure. We are also exposed to the risk of insider threat attacks. Any such attacks could disrupt our systems or those of third parties (~~GTF~~including mission and safety critical systems), ~~family~~impact business operations, result in unauthorized release of ~~engines~~confidential, ~~incorporates~~proprietary, ~~advanced~~or ~~technologies~~otherwise protected information, and corrupt our data or that of third parties. The ~~level~~threats we face are continuous and evolving, and vary in degree of ~~orders~~severity ~~received~~and ~~for~~sophistication. These threats include advanced persistent threats from highly organized adversaries, including but not limited to cyber criminals, nation states, and so-called hacktivists, particularly those adverse to the ~~GTF~~security ~~family~~interests of ~~engines~~the U.S. and its allies, ~~coupled~~which ~~with~~target aus ~~requirement~~and other defense contractors. These types of threats are related to ~~achieve~~the ~~mature~~geopolitical ~~production~~environment ~~levels~~and have, therefore, grown in number due to recent geopolitical conflicts. In addition, as a ~~very~~result ~~short~~of ~~time~~the ~~frame~~rapid pace of technological change, we and our customers, suppliers, subcontractors, and other third parties with whom we conduct business continue to rely on legacy systems and software, which can be more vulnerable to cyber threats and attacks. Moreover, we, like other companies, are seeing an unprecedented number of previously unknown vulnerabilities, for which there are no known mitigations, being revealed by new attacks. Further, the sophistication, availability, and use of artificial intelligence by threat actors present an increased level of risk. Due to the evolving threat landscape, we have ~~required~~experienced ~~significant~~and ~~growth~~expect into ~~our~~continue ~~manufacturing~~to experience more frequent and ~~supply~~increasingly ~~chain~~advanced ~~capacity~~cyber-attacks. In addition, changes in ~~July~~domestic ~~2023~~and ~~Pratt~~international &cybersecurity-related ~~Whitney~~laws ~~determined~~and regulations have expanded cybersecurity-related compliance requirements, and cybersecurity regulatory enforcement activity has grown. We expect the regulatory environment to continue to evolve, and these regulatory changes could increase our operational and compliance expenditures and those of our suppliers, and lead to new or additional IT and product development expenses. We also face reputational, litigation, and financial risks in relation to potential required disclosures and increased risk of enforcement. We continue to make investments and adopt measures designed to enhance our protection, detection, response, and recovery capabilities, and to mitigate potential risks to our technology, products, services, and operations from potential cybersecurity threats, as well as to comply with evolving regulations. However, given the unpredictability, nature, and scope of cyber-attacks, it is possible that awe ~~rare~~are ~~condition~~unable to defend against all cyber-attacks, that potential vulnerabilities could go undetected and persist in ~~powder~~the ~~metal~~environment ~~used~~for an extended period, or that we may otherwise be unable to ~~manufacture~~mitigate ~~certain~~customer ~~engine~~losses ~~parts~~and ~~requires~~other ~~accelerated~~potential ~~inspection~~consequences of these attacks. In addition, some products and services that we provide to customers, particularly those related to public security, may raise potential liabilities related to privacy and intellectual property. In some cases, we must rely on the ~~PW1100G~~safeguards put in place by our customers, suppliers, subcontractors, and other third parties to protect against and report cyber threats and attacks. We could potentially be subject to production downtimes, operational delays, other detrimental impacts on our operations, or ability to provide products and services to our customers, the compromise of confidential information, intellectual property or otherwise protected information, misappropriation, destruction, or corruption of data, security breaches, other manipulation or improper use of our or third-JMparty ~~(PW1100)~~systems, ~~GTF~~networks, ~~fleet~~or products, ~~which~~financial ~~powers~~losses from remedial actions, loss of business, or potential liability, penalties, fines, and/or damage to our reputation. Any of these could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity. Due to the ~~A320neo~~evolving ~~family~~nature of ~~aircraft~~such risks, the impact of any potential incident cannot be predicted. ~~This~~Further, ~~issue~~our ~~has~~insurance ~~resulted~~coverage, inwhich may exclude losses from war or cyber operations, may not be adequate to cover all related costs and we may not otherwise be fully indemnified for them.

We are dependent on a global supply chain and subject to risks related to the availability of materials and the performance of our suppliers; in recent years we have experienced supply chain disruptions that resulted in delays and increased costs and adversely affected our performance. Our performance requires a variety of raw materials, supplier-provided parts, components, sub-systems, and contract manufacturing services, and we rely on U.S. and non-U.S. suppliers (including third-party manufacturing suppliers, subcontractors, and service providers) and commodity markets for these materials and services. In some instances, we depend upon a single source of supply, manufacturing, services support, or assembly, or participate in commodity markets that may be subject to allocations of limited supplies by suppliers. Emerging laws and increasing regulatory

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~~increased~~requirements ~~engine~~aimed ~~removals~~at ~~and~~global ~~inspections,~~supply ~~shop~~chains ~~visits,~~may ~~aircraft~~impact onour ~~ground~~ability ~~levels,~~to ~~costs~~access tocertain ~~the~~materials ~~Company~~and components, and ~~other~~otherwise ~~negative~~adversely ~~impacts~~affect ~~described~~our inbusiness, ~~more~~and ~~detail~~we ~~below.~~may Ifnot ~~any~~only ofbe ~~our~~held ~~production~~responsible orfor ~~maintenance,~~our ~~repair~~compliance, ~~and~~but ~~overhaul~~for ~~ramp-up~~that ~~efforts~~of ~~are~~our ~~delayed,~~suppliers. ifIn ~~suppliers~~addition, ~~cannot~~our ~~timely~~defense ~~deliver~~businesses orare ~~perform~~subject to ~~our~~specific ~~standards,~~procurement ifrequirements ~~any~~that ~~other~~limit ~~engine~~the ~~models~~types ~~are~~of ~~found~~materials tothey beuse. ~~materially~~Our ~~impacted~~defense bybusinesses ~~the~~also ~~powder~~must ~~metal~~require ~~issue,~~suppliers ~~and/or~~to ifcomply wewith ~~identify~~various orDoW ~~experience other issues~~requirements, ~~including~~any ~~durability~~of ~~issues,~~which ~~with~~requirements ~~in-service~~may ~~engines~~further inlimit the ~~GTF~~suppliers ~~family~~and ofsubcontractors ~~engines~~they ~~(or~~may ~~other~~utilize. ~~engines),~~Identifying ~~whether~~and ~~for~~qualifying ~~manufacturing~~second- ~~reasons~~ or ~~otherwise,~~third- wesource ~~may~~suppliers ~~not~~can ~~meet~~be ~~customer~~difficult, ~~requirements~~time-consuming, ~~which~~and ~~could~~may result in ~~material~~increased ~~additional~~ costs~~, including liquidated damages or other liabilities~~.

~~Competition~~Global ~~may~~supply ~~reduce~~chain ~~our~~disruptions ~~revenues~~have ~~and~~impacted ~~margins and limit~~ our ~~future~~ability ~~opportunities.~~to Weprocure ~~operate~~raw inmaterials, ~~highly~~including ~~competitive~~certain ~~industries~~rare ~~and~~earth ~~our competitors may have more extensive or more specialized engineering~~elements, ~~manufacturing~~microelectronics, ~~servicing,~~ and ~~marketing~~certain ~~capabilities than we do~~commodities. ~~Our~~These ~~contracts~~disruptions ~~are~~have ~~typically~~been ~~awarded~~driven onby asupply ~~competitive~~chain ~~basis.~~market ~~Our~~constraints ~~bids are based in part upon the cost to provide the products~~ and ~~services.~~macroeconomic ~~If we fail to accurately estimate these costs~~conditions, ~~the~~including ~~profitability~~inflation ofand ~~our~~labor ~~contracts~~market ~~may be adversely affected~~shortages. InCurrent ~~addition~~geopolitical conditions, weincluding ~~may~~conflicts ~~face~~and ~~customer-directed~~other ~~cost~~causes ~~reduction targets that could have a material adverse effect on the profitability~~ of ~~our~~strained ~~contracts~~intercountry ~~if these targets are not achieved when required. Moreover~~relations, ~~bid~~as ~~protests~~well ~~from~~as ~~unsuccessful~~sanctions ~~bidders~~and onother ~~new~~trade ~~program~~restrictive ~~awards are frequent with respect to DoD awards in particular. Generally, a bid protest will delay the start of contract~~ activities, ~~delay~~such ~~earnings,~~as ~~and~~tariffs ~~could result in the award decision being overturned~~ and ~~require~~export ~~a re-bid of the contract. We have also experienced highly competitive pricing~~controls, inare ~~which~~contributing ~~a bidder may anticipate making a substantial investment in a program in order~~ to ~~win~~these ~~the work~~issues. ~~Highly~~In ~~competitive~~addition, ~~activity within~~ the ~~commercial~~inflationary ~~aerospace~~environment ~~industry~~ has ~~included~~increased ~~substantial~~material ~~discounts~~ and ~~other~~component ~~financial incentives~~prices, ~~performance~~labor ~~and operating cost guarantees~~rates, and ~~participation~~supplier ~~in financing arrangements~~costs, ~~in order to secure both new engine business~~ and ~~the~~negatively ~~aftermarket~~impacted ~~revenues associated with these products~~costs. IfCredit ~~our~~market ~~competitors~~conditions, ~~can~~including ~~offer~~higher ~~lower~~interest ~~cost~~rates ~~services~~and orthe ~~products,~~availability orof ~~provide services or products more quickly~~credit, athave ~~equivalent~~impacted ~~or in~~ some ~~cases~~of ~~even~~our ~~reduced~~suppliers ~~capabilities,~~and wesubcontractors ~~may~~as ~~lose business opportunities, which could adversely affect our future results~~well. ~~Competitors~~As ~~may~~a ~~also~~result beof ~~willing~~these toprocurement ~~accept~~issues, ~~more~~the ~~risk~~production orflow ~~lower profitability~~ in ~~competing~~our ~~for~~factories ~~contracts~~has ~~than~~been wenegatively ~~are. Further~~impacted, ~~our~~which ~~competitors~~has, ~~including our customers, may develop competing technologies which gain industry acceptance~~ in ~~advance of~~turn, orhindered ~~instead of,~~ our ~~products,~~ability ~~or meet particular in-demand technological needs before us or with technology that is superior~~ to ~~our~~perform ~~existing~~on ~~or new technologies. This competition could cause~~ our ~~existing~~commitments ~~technologies and offerings~~ to ~~become obsolete or otherwise decrease demand for our offerings. In addition, the possibility exists that competitors or~~ customers ~~will develop aftermarket services~~ and ~~parts~~negatively ~~for~~affected our ~~products~~results that attract customers and adversely impact our return on investment on original equipment manufacturer products. We also anticipate companies continuing to enhance their competitive position against our defense businesses as a result of ~~continued~~operations, ~~domestic~~financial ~~and~~condition, ~~cross-border defense industry consolidation~~ and ~~the~~liquidity. ~~expansion~~Our ~~of competitors’ capabilities throughout the~~ supply ~~chain~~costs ~~through~~have ~~vertical integration. We are also facing~~ increased ~~competition~~due ~~domestically and internationally from foreign and multinational firms. Additionally, some customers, including the DoD, are increasingly turning~~ to commercial contractors, rather than traditional defense contractors, for space and data science work, and we are also seeing increased activity from other non-traditional defense contractors and startups. For example, the ~~U.S.~~above ~~government may award large competitive contracts to other suppliers to maintain a broad industrial base~~factors. In addition, ~~U.S.~~we ~~government~~are ~~procurement~~largely ~~policies~~dependent ~~and~~upon ~~procedures~~foreign ~~and~~sources ~~the~~for ~~application~~certain ~~thereof~~raw ~~are~~materials, ~~regularly~~such ~~changing.~~as ~~Moreover~~cobalt, ~~our potential international contract awards~~tantalum, ~~particularly for sales of defense products and services~~chromium, ~~may be limited by our ability to agree to offset obligations or industrial cooperation obligations or enter into ICIP agreements~~rhenium, ~~as discussed above. For example~~nickel, ~~an increase in the use of contract structures that shift risk to the contractor (such as fixed-price development contracts~~ and ~~incentive-based fee arrangements)~~titanium, ~~use~~and ofwe ~~novel~~rely ~~award~~on ~~fee~~foreign ~~criteria~~suppliers ~~(such~~ as ~~the~~single-source ~~evaluation~~suppliers of ~~environmental~~some ~~factors),~~components. ~~evaluation~~Some ofraw amaterials ~~bidder’s willingness to provide detailed competitively sensitive intellectual property (such as detailed RTX design, manufacturing~~ and ~~process~~components ~~information~~have ~~that~~been ~~would risk loss of competitively sensitive information), or requirements to transfer technology to domestic sources~~ in ~~connection~~the ~~with~~past ~~offset~~sourced ~~obligations,~~from ~~could~~areas ~~adversely~~now ~~affect~~under ~~our profit rates~~sanctions, ~~ability~~such toas ~~preserve differentiated product offerings~~Russia, ~~maintain lower tier suppliers,~~ or ~~make~~are itcurrently ~~more~~sourced ~~difficult~~from toareas ~~win~~which ~~new contracts. If we~~ are ~~unable~~at torisk ~~continue~~of tosanctions ~~compete successfully against our current~~ or ~~future~~other ~~competitors~~trade inrestrictive ~~our core businesses~~actions, wesuch ~~may~~as ~~experience declines in revenues and industry segment share which could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity~~China.

~~OPERATIONAL~~The ~~RISKS~~timing of the impacts of these supply chain risks and issues and our ability to mitigate them are uncertain and difficult to predict. However, we expect the current supply chain, inflation, and price issues, and their negative impacts on our business, to continue. In particular, we expect to experience prolonged delays for certain critical component parts and sub-systems. Furthermore, the existing supply chain issues could be compounded by other events, such as an economic downturn; changes in trade policies, such as tariffs; supplier capacity constraints for other reasons; supplier quality issues (for example, defects or fraudulent parts); supplier closing, bankruptcy, or financial difficulties; price increases for various reasons; and worsening shortages of raw materials or commodities, including as a result of war or other geopolitical actions, natural disaster, health pandemics or other business continuity events, or transport and distribution issues, any of which could further negatively impact our ability to meet our commitments to customers or increase our operating costs and therefore incrementally affect our results of operations, financial condition, and liquidity.

~~Our~~Due ~~business~~to the nature of our products and ~~financial~~services, ~~performance~~a ~~may~~product besafety ~~adversely~~failure, ~~affected~~quality byissue, ~~cyber-attacks~~or onother ~~information~~failure ~~technology~~affecting ~~(IT)~~our ~~infrastructure~~or ~~and~~our customers’ or suppliers’ products, asor ~~well~~systems ascould ~~changes~~seriously inharm ~~cybersecurity~~our ~~regulations~~business. Our ~~business~~products ~~may~~and beservices ~~impacted~~are byhighly ~~disruptions~~sophisticated toand ~~our~~specialized, ~~own~~involve orcomplex advanced technologies, are often integrated with third-party ITproducts ~~infrastructure~~and services, and ~~the~~are utilized for specific purposes that require precision, reliability, and durability. Many of our products and services include both hardware and software that weinvolve ~~provide~~industrial ~~our~~machinery ~~customers~~and ~~are~~intricate ~~also~~aviation atand ~~risk~~defense ofsystems, ~~being~~including ~~adversely~~commercial ~~affected~~and bymilitary ~~cyber-attacks.~~jet ~~Like~~engines, power and control systems, and other ~~companies~~aircraft parts, weair ~~regularly~~and ~~experience~~missile ~~cyber-based~~defense ~~attacks.~~systems, ~~Cybersecurity~~and ~~threats~~military ~~are~~sensors ~~continuously~~and ~~evolving~~command and control systems. Technical, mechanical, quality, electronic, and other failures may ~~have~~occur anfrom ~~impact~~time onto time, whether as a result of manufacturing or design defect, operational process, or production issue attributable to us, our customers, suppliers, ~~subcontractors~~partners, third party integrators, or others. Product design changes and ~~other~~updates ~~third~~could ~~parties~~also ~~with~~have ~~whom~~associated wecost doand ~~business~~schedule ~~routinely~~impacts. In addition, ~~both~~our onproducts ~~premises~~could fail as a result of cyber-attacks, such as those that seize control and result in ~~the~~misuse ~~cloud~~or unintended use of our products, ~~attempting~~or toother ~~gain~~intentional ~~unauthorized~~acts. ~~access~~The toimpact of a catastrophic product or system failure or similar event affecting our ~~confidential,~~or ~~proprietary,~~our customers’ or ~~otherwise~~suppliers’ ~~protected~~products ~~information,~~or ~~classified~~services ~~information~~could be significant, orand ~~personal~~could ~~data~~result in injuries or ~~other~~death, ~~information~~property ~~relating~~damage, toloss ~~our~~of ~~employees~~strategic capabilities, ~~customers~~loss of intellectual property, loss of reputation, and other ~~third~~significant ~~parties~~negative effects. A product or system failure, or perceived failure, could lead to ~~disrupt~~negative publicity, a diversion of management attention, and damage to our ~~systems~~reputation orthat ~~the~~could ~~systems~~reduce ofdemand ~~third~~for ~~parties~~our products and services. ~~Cybersecurity~~It ~~threats~~could also ~~include~~result ~~attacks~~in ~~targeting~~product recalls and product liability and warranty claims (including claims related to the ~~security~~safety or reliability of our products) and related expenses, ~~confidentiality~~other service, ~~integrity~~repair, and~~/or~~ ~~availability~~maintenance ofcosts, ~~the~~labor ~~hardware~~and material costs, ~~software~~customer support costs, significant damages, and ~~information~~other ~~installed~~costs, ~~stored~~including fines and other remedies, and regulatory and environmental liabilities. We may also incur increased costs, delayed payments, reputational harm, or ~~transmitted~~lost equipment or services revenue in connection with a significant issue with a third party’s product with which our products are integrated. Further, ~~including~~our ~~after~~insurance ~~the~~coverage ~~purchase~~may ofnot ~~those~~be ~~products~~adequate to cover all related costs and ~~when~~we ~~they~~may ~~are~~not otherwise be fully indemnified for them. Any of the foregoing could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

In particular, in 2023, Pratt & Whitney determined that a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100 GTF fleet, which powers the A320neo family of aircraft. This

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~~incorporated~~determination into third-party products, facilities, or infrastructure. We are also exposed to the risk of insider threat attacks. Any such attacks could disrupt our systems or those of third parties (including mission and ~~safety~~corresponding ~~critical~~fleet ~~systems),~~actions ~~impact~~have ~~business~~resulted ~~operations, result~~ in ~~unauthorized release of confidential~~, ~~proprietary, or otherwise protected information,~~ and ~~corrupt our data or that of third parties. The threats we face~~ are ~~continuous~~expected ~~and~~to ~~evolving,~~continue ~~and~~to ~~vary~~result in ~~degree of severity and sophistication. These threats include advanced persistent threats from highly organized adversaries~~, ~~including~~an ~~but~~elevated ~~not~~level ~~limited~~of toaircraft ~~cyber~~on ~~criminals,~~ground ~~nation~~for ~~states, and so-called hacktivists, particularly those adverse to~~ the ~~security~~A320neo ~~interests~~family of ~~the~~aircraft ~~U.S.~~ and ~~its~~significant ~~allies,~~incremental ~~which~~shop ~~target~~visits usnecessary ~~and~~to ~~other~~perform ~~defense~~inspections ~~contractors.~~on ~~These~~PW1100 ~~types~~GTF ofengines ~~threats~~through ~~are related to~~ the ~~geopolitical~~end ~~environment~~of ~~and have, therefore, grown in number due to recent geopolitical conflicts~~2026. InAs ~~addition, as~~ a result ~~of the rapid pace of technological change~~, we ~~and~~have ~~our customers, suppliers, subcontractors,~~ and ~~other~~will ~~third parties with whom we conduct business~~ continue to ~~rely~~incur onsignificant ~~legacy~~customer ~~systems~~support and ~~software,~~mitigation ~~which~~costs ~~can be more vulnerable to cyber threats~~ and ~~attacks.~~significant ~~Moreover~~labor, wematerial, like other companies, are seeing an unprecedented number of previously unknown vulnerabilities, for which there are no known mitigations, being revealed by new attacks. Further, the sophistication, availability, and ~~use~~related ~~of artificial intelligence by threat actors present an increased level of risk~~costs. ~~Due~~This tomatter ~~the~~has ~~evolving~~caused ~~threat~~reputational ~~landscape,~~harm ~~we have experienced~~ and ~~expect~~has tonegatively ~~continue to experience more frequent and increasingly advanced cyber-attacks. In addition~~impacted, ~~changes in domestic~~ and ~~international~~will cybersecurity-related laws and regulations have expanded cybersecurity-related compliance requirements, and cybersecurity regulatory enforcement activity has grown. We expect the regulatory environment to continue to ~~evolve~~impact, ~~and these regulatory changes could increase~~ our ~~operational~~results ~~and compliance expenditures and those~~ of ~~our~~operations ~~suppliers,~~ and ~~lead~~financial ~~to new or additional IT and product development expenses~~condition. WeThe ~~also~~expected ~~face~~financial ~~reputational,~~impact ~~litigation,~~of ~~and~~the ~~financial~~powder ~~risks~~metal inissue ~~relation~~is tobased ~~potential~~on ~~required~~historical ~~disclosures~~experience and ~~increased~~is ~~risk~~subject ~~of enforcement. We continue~~ to ~~make~~various ~~investments~~assumptions and ~~adopt measures designed to enhance our protection~~judgments, ~~detection~~including, ~~response,~~without ~~and recovery capabilities~~limitation, ~~and~~the tonumber ~~mitigate potential risks to our technology, products, services,~~ and ~~operations~~expected ~~from~~timing ~~potential~~of ~~cybersecurity~~shop ~~threats~~visits, asinspection ~~well~~results ~~as to comply with evolving regulations. However, given the unpredictability, nature,~~ and scope of ~~cyber-attacks,~~work ~~it is possible that we are unable~~ to ~~defend~~be ~~against all cyber-attacks~~performed, ~~that~~turnaround ~~potential vulnerabilities could go undetected and persist in the environment for an extended period~~time, oravailability ~~that we may otherwise be unable to mitigate customer losses and other potential consequences~~ of ~~these attacks. In addition~~parts, ~~some~~available ~~products~~capacity ~~and~~at ~~services~~overhaul ~~that we provide to customers~~facilities, ~~particularly those related to public security, may raise potential liabilities related to privacy~~ and ~~intellectual~~outcomes ~~property.~~of Innegotiations ~~some~~with ~~cases,~~impacted ~~we must rely on the safeguards put in place by our~~ customers, ~~suppliers, subcontractors,~~ and ~~other~~these ~~third~~assumptions ~~parties~~are ~~to protect against and report cyber threats and attacks. We could potentially be~~ subject to ~~production~~variability. ~~downtimes,~~Potential ~~operational~~changes ~~delays, other detrimental impacts on our operations, or ability~~ to provide products and services to our customers, the compromise of confidential information, intellectual property or otherwise protected information, misappropriation, destruction, or corruption of data, security breaches, other manipulation or improper use of our or third-party systems, networks, or products, financial losses from remedial actions, loss of business, or potential liability, penalties, fines, and/or damage to our reputation. Any of these assumptions could have a material ~~adverse~~ effect on ~~our~~the ~~competitive~~Company’s ~~position,~~ results of operations, ~~financial~~for ~~condition,~~the orperiods ~~liquidity.~~in ~~Due~~which toit ~~the~~is ~~evolving~~recognized. ~~nature~~In ofaddition, ~~such~~other ~~risks,~~engine ~~the~~models ~~impact~~within ofPratt ~~any~~& ~~potential~~Whitney’s ~~incident~~fleet ~~cannot~~contain beparts ~~predicted.~~manufactured ~~Further,~~with ~~our~~affected ~~insurance~~powder ~~coverage,~~metal. ~~which~~The ~~may~~negative ~~exclude~~impacts ~~losses~~arising from ~~war~~the orPowder ~~cyber~~Metal ~~operations,~~Matter ~~may~~could ~~not~~increase beif ~~adequate~~any toother ~~cover~~engine ~~all~~models ~~related~~are ~~costs~~found ~~and~~to webe ~~may~~materially ~~not~~impacted ~~otherwise~~by bethis ~~fully~~rare ~~indemnified for them~~condition.

We ~~are~~depend ~~dependent~~ on athe ~~global~~recruitment ~~supply chain~~ and ~~subject~~retention ~~to risks related to the availability~~ of ~~materials~~qualified personnel, and ~~the performance of~~ our ~~suppliers;~~failure into ~~recent~~attract, ~~years~~train, ~~we have experienced supply chain disruptions that resulted in delays~~ and ~~increased~~retain ~~costs~~such ~~and~~personnel ~~adversely~~could ~~affected~~seriously harm our ~~performance~~business. ~~Our~~Due ~~performance~~to ~~requires~~the aspecialized ~~variety~~nature of ~~raw~~our ~~materials~~business, ~~supplier-provided~~our ~~parts,~~future ~~components,~~performance ~~sub-systems,~~is ~~and~~highly ~~contract~~dependent ~~manufacturing~~upon the continued services, ~~and~~of weour ~~rely~~key ontechnical ~~U.S.~~personnel and ~~non-U.S.~~executive ~~suppliers~~officers, ~~(including~~and ~~third-party~~the ~~manufacturing suppliers~~hiring, ~~subcontractors~~development, and ~~service~~retention ~~providers)~~of ~~and~~qualified ~~commodity markets for these materials and services. In some instances~~technical, ~~we depend upon a single source of supply~~engineering, manufacturing, ~~services support~~marketing, ~~or assembly~~sales, orand ~~participate~~management inpersonnel ~~commodity~~for ~~markets~~our ~~that may be subject to allocations of limited supplies by suppliers~~operations. ~~Emerging~~Our ~~laws~~defense ~~and~~business ~~increasing~~in ~~regulatory~~particular ~~requirements~~requires ~~aimed~~qualified atpersonnel ~~global~~with ~~supply~~security ~~chains~~clearances ~~may~~due ~~impact~~to our ~~ability~~classified toprograms. ~~access~~As ~~certain~~portions ~~materials~~of ~~and~~our ~~components,~~workforce ~~and~~continue ~~otherwise~~to ~~adversely~~retire ~~affect our business,~~ and we ~~may~~lose ~~not~~experienced ~~only~~personnel bein ~~held~~the ~~responsible for our compliance~~future, ~~but~~it ~~for~~is critical that ofwe ~~our~~develop ~~suppliers.~~other ~~In addition~~employees, ~~our~~hire ~~defense~~new ~~businesses~~qualified ~~are~~personnel, ~~subject~~and tosuccessfully ~~specific~~manage ~~procurement requirements that limit~~ the ~~types~~transfer of ~~materials~~critical ~~they~~skillsets ~~use. Our defense businesses also must require suppliers to comply with various DoD requirements, any of which requirements may further limit the suppliers~~ and ~~subcontractors~~industry ~~they~~knowledge ~~may~~within ~~utilize.~~our ~~Identifying and qualifying second- or third- source suppliers can be difficult, time-consuming, and may result in increased costs~~workforce.

InWe ~~recent~~have ~~years~~experienced, ~~global~~and ~~supply~~continue ~~chain~~to ~~disruptions~~experience, ~~have~~challenges ~~impacted~~hiring ~~our~~highly ~~ability~~qualified topersonnel ~~procure~~including ~~raw materials~~engineers, ~~microelectronics~~skilled laborers, and ~~certain~~security ~~commodities~~clearance holders. ~~These~~We ~~disruptions~~expect ~~were~~these ~~driven~~difficulties byto ~~supply~~continue ~~chain~~in ~~market~~the ~~constraints~~future. ~~and~~In ~~macroeconomic conditions~~addition, ~~including~~the ~~inflation~~cost ~~and~~of labor ~~market~~remains ~~shortages~~high. ~~Current~~With ~~geopolitical~~respect ~~conditions~~to existing personnel, ~~including~~some ~~conflicts~~may ~~and~~become ~~other~~required ~~causes~~to ofreceive ~~strained~~various ~~intercountry~~security ~~relations,~~clearances asand ~~well~~substantial astraining ~~sanctions~~in ~~and~~order ~~other~~to ~~trade~~work ~~restrictive~~on ~~activities,~~certain ~~have~~programs ~~contributed~~or toperform ~~these~~certain ~~issues~~tasks. InNecessary ~~addition,~~security ~~the~~clearances ~~inflationary~~may ~~environment~~be ~~has~~delayed, ~~increased~~which ~~material~~may ~~and~~impact ~~component~~our ~~prices,~~ability ~~labor~~to ~~rates,~~perform ~~and~~on ~~supplier~~our ~~costs,~~U.S. ~~and~~government ~~negatively~~contracts. ~~impacted~~We ~~costs.~~also ~~Credit~~may ~~market~~not ~~conditions,~~be ~~including~~successful ~~higher~~in ~~interest~~training ~~rates~~or ~~and~~developing qualified personnel with the ~~availability~~requisite ofrelevant ~~credit,~~skills ~~have~~or ~~impacted~~security clearances. Moreover, some of our ~~suppliers~~employees ~~and~~are ~~subcontractors~~covered asby ~~well~~collective bargaining agreements. AsHistorically, awe ~~result~~have ofbeen ~~these~~able ~~procurement~~to ~~issues,~~renegotiate ~~the~~expiring ~~production~~agreements ~~flow~~without inexperiencing ~~our~~significant ~~factories~~prolonged ~~has~~disruptions ~~been~~to ~~negatively~~business ~~impacted~~operations. However, ~~which~~the labor environment has, inexperienced ~~turn,~~shifts ~~hindered~~that ~~our~~pose ~~ability~~higher torisk ~~perform~~of onfuture ~~our~~labor ~~commitments~~disruption. toAny ~~customers~~of ~~and~~the ~~negatively~~above factors could seriously harm our business.

Exports and imports of certain of our products are subject to various export control, sanctions, and import regulations and may require authorization from regulatory agencies of the U.S. or other countries. We must comply with various laws and regulations relating to the export and import of products, services, and technology from and into the U.S. and other countries having jurisdiction over our operations. In the U.S., these laws and regulations include, among others, the Export Administration Regulations (EAR) administered by the U.S. Department of Commerce, the International Traffic in Arms Regulations (ITAR) and Arms Export Control Act (AECA) provisions administered by the U.S. Department of State (DOS), embargoes and sanctions regulations administered by the U.S. Department of the Treasury, and import regulations administered by the U.S. Department of Homeland Security and the U.S. Department of Justice (DOJ). Certain of our products, services, and technologies have military or strategic applications and are on the U.S. Munitions List of the ITAR, the Commerce Control List of the EAR, or are otherwise subject to the EAR and/or the U.S. Munitions Import List, and we are required to obtain licenses and authorizations from the appropriate U.S. government agencies before exporting these products out of the U.S. or importing these products into the U.S. U.S. foreign policy or the foreign policy of other licensing jurisdictions may affect the licensing process or otherwise prevent us from engaging in business dealings with certain individuals, entities, or countries. From time to time, we identify, investigate, remediate and voluntarily disclose violations or potential violations of the ITAR, EAR, or other global trade laws and regulations. Any failure by us, our customers, or our suppliers to comply with the above-referenced laws and regulations, arising out of our voluntary disclosures or otherwise, could result in civil or criminal penalties, fines, seizure of our products, adverse publicity, restrictions on our ability to engage in export or import transactions, or the suspension or debarment from doing business with the U.S. government. Moreover, any changes in export control, sanctions, or import regulations may further restrict the export or import of our products or services, and the possibility of such changes requires constant monitoring to ensure we remain compliant. Our ability to obtain required licenses and authorizations on a timely basis, or at all, is subject to risks and uncertainties, including changing laws, regulations, or foreign policies, delays in Congressional action, or geopolitical and other factors. If we are not successful in obtaining or maintaining the necessary licenses or authorizations in a timely manner, our sales relating to those approvals may be prevented or delayed, and revenue and profit previously recognized may be reversed. Any restrictions on the export or import of our products or product lines could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

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~~affected~~In ~~our~~addition, ~~results~~as ofpreviously ~~operations~~disclosed, ~~financial~~on ~~condition~~August 29, 2024, the Company entered into a Consent Agreement (CA) with the DOS to resolve alleged civil violations of the AECA and ~~liquidity~~the ITAR. ~~Our~~The ~~supply~~CA, ~~costs~~which ~~have~~has ~~increased~~a ~~due~~three-year term, requires the Company to implement remedial compliance measures and to conduct an external audit of the ~~above~~Company’s ~~factors~~ITAR compliance program. InThe ~~addition~~CA also requires appointment of an external, independent Special Compliance Officer (SCO). The Company appointed its SCO on September 27, 2024. If we are ~~largely~~unable ~~dependent~~to ~~upon~~satisfy ~~foreign~~the ~~sources~~requirements ~~for~~of ~~certain~~the ~~raw~~CA ~~materials,~~within ~~such~~three years as ~~cobalt,~~determined ~~tantalum,~~by ~~chromium,~~the ~~rhenium~~DOS, ~~nickel~~we may face a continuation of the CA, ~~and~~additional ~~titanium~~fines, ~~and~~or weother ~~rely~~adverse onimpacts. ~~foreign~~In ~~suppliers~~addition, asduring ~~single-source~~the ~~suppliers~~term of ~~some~~the ~~components.~~CA, ~~Some~~the ~~raw~~CA’s ~~materials~~transaction-related ~~and~~requirements ~~components~~may ~~have~~impact ~~been~~our inability ~~the~~to ~~past~~execute ~~sourced~~potential ~~from~~future ~~areas~~divestitures ~~now~~within ~~under~~expected ~~sanctions~~timeframes or consistent with expected valuation metrics, ~~such~~and ason ~~Russia~~acceptable terms and conditions, which could delay or ~~are~~impair ~~currently~~our ~~sourced~~ability ~~from~~to ~~areas~~achieve ~~which~~the ~~are~~expected atbenefits ~~risk~~from ofour ~~sanctions~~strategic plan, or ~~other~~otherwise ~~trade~~harm ~~restrictive~~our ~~actions~~competitive position, ~~such~~results asof ~~China.~~operations, financial condition, or liquidity.

~~The~~Our ~~timing~~business ofand ~~the~~financial ~~impacts~~performance ofmay ~~these~~be ~~supply~~adversely ~~chain~~affected ~~risks~~by ~~and~~threats ~~issues~~to ~~and~~ our ~~ability~~physical tosecurity ~~mitigate~~and ~~them~~other ~~are~~events ~~uncertain~~outside ~~and~~our ~~difficult to predict~~control. ~~However,~~We wecould ~~expect~~encounter ~~the~~threats ~~current~~to ~~supply~~our ~~chain,~~physical ~~inflation~~security, ~~and~~including ~~price~~our ~~issues~~facilities and personnel, and ~~their~~threats ~~negative~~from ~~impacts~~workplace onviolence, ~~our~~civil ~~business~~unrest, toterrorism, ~~continue.~~or Insimilar ~~particular~~acts, weany ~~expect~~of towhich ~~experience~~could ~~prolonged~~disrupt ~~delays~~our ~~for~~business. ~~certain~~In ~~critical~~addition, ~~component~~our ~~parts~~business, and ~~sub-systems.~~the ~~Furthermore~~businesses of our suppliers, ~~the~~subcontractors, ~~existing~~service ~~supply~~providers, ~~chain~~and ~~issues~~customers, could be ~~compounded~~disrupted by ~~other~~public ~~events~~health crises, such as anpandemics ~~economic~~and ~~downturn;~~epidemics, ~~changes~~and ingovernmental, ~~trade policies~~business, ~~such~~and asindividual ~~tariffs;~~actions ~~supplier~~taken ~~capacity~~in ~~constraints~~response, ~~for~~damaging ~~other~~weather ~~reasons;~~or ~~supplier~~other ~~quality~~acts ~~issues~~of ~~(for example~~nature, ~~defects~~physical orattacks ~~fraudulent~~due ~~parts);~~to ~~supplier~~proximity ~~closing,~~to ~~bankruptcy~~nation-state conflicts, orcyber-attacks ~~financial~~on ~~difficulties;~~IT ~~price~~infrastructure ~~increases~~and ~~for~~products, ~~various~~or ~~reasons;~~other ~~and~~events ~~worsening~~outside ~~shortages~~ of ~~raw~~our ~~materials~~control. orAny ~~commodities,~~such ~~including~~business asdisruption acould ~~result~~subject ofus ~~war~~to orproduction ~~other~~downtimes, ~~geopolitical~~operational ~~actions~~delays, ~~natural~~supply ~~disaster~~chain ~~(including~~challenges, ~~the~~other ~~effects~~detrimental ofimpacts ~~climate~~on ~~change),~~our ~~health~~operations ~~pandemic~~ or ~~other~~ability ~~business~~to ~~continuity~~provide ~~events~~products and services to our customers, ordecreased ~~transport~~demand ~~and~~for ~~distribution~~our ~~issues~~products, ~~any~~decreased ofdefense ~~which~~budgets, ~~could~~financial ~~further~~losses ~~negatively~~from ~~impact~~remedial ~~our~~actions, ~~ability~~the todiversion ~~meet~~of ~~our~~management’s ~~commitments~~attention toand ~~customers~~resources, or ~~increase~~loss ~~our~~of ~~operating~~business, ~~costs~~any ~~and~~of ~~therefore~~which ~~incrementally~~could ~~affect~~have a material adverse effect on our competitive position, results of operations, financial condition, ~~and~~or liquidity. The impact of any such business disruption is difficult to predict.

~~Due~~We todepend ~~the~~on ~~nature of~~ our ~~products~~intellectual property and ~~services,~~have aaccess ~~product~~to ~~safety~~certain ~~failure,~~third-party ~~quality~~intellectual ~~issue,~~property; infringement or ~~other~~ failure ~~affecting~~to ~~our~~protect or our ~~customers’~~intellectual property or ~~suppliers’~~access ~~products~~to orthird ~~systems~~party intellectual property could ~~seriously~~adversely ~~harm~~affect our ~~business.~~future ~~Our~~growth ~~products~~ and ~~services~~success. ~~are~~We ~~highly~~rely ~~sophisticated~~on ~~and~~a ~~specialized~~combination of patents, ~~involve~~trademarks, ~~complex~~copyrights, ~~advanced~~trade ~~technologies~~secrets, ~~are~~nondisclosure ~~often~~agreements, ~~integrated~~IT ~~with~~security ~~third-party~~systems, ~~products~~internal controls and ~~services~~compliance systems, and ~~are~~other ~~utilized~~measures ~~for~~to ~~specific~~protect ~~purposes~~our ~~that~~intellectual ~~require~~property. ~~precision,~~We ~~reliability~~also rely on nondisclosure agreements, ~~and~~confidentiality ~~durability.~~obligations ~~Many~~in ofcontracts, ~~our~~IT ~~products~~security systems, and ~~services~~other ~~include~~measures ~~both~~to ~~hardware~~protect certain customer and ~~software~~supplier information and intellectual property that ~~involve~~we ~~industrial~~have ~~machinery~~in ~~and~~our ~~intricate~~possession ~~aviation~~or to which we have access. The U.S. government and ~~defense~~foreign ~~systems~~governments have licenses under certain of our intellectual property, including ~~commercial~~certain ~~and~~patents, ~~military~~which ~~jet~~are ~~engines,~~developed ~~power~~or ~~and~~used ~~control~~in ~~systems,~~performance ~~and~~of ~~other~~government ~~aircraft~~contracts. ~~parts,~~Governments ~~air~~may ~~and~~use ~~missile~~or ~~defense~~authorize ~~systems,~~others ~~and~~(including ~~military~~our ~~sensors~~competitors) ~~and~~to ~~command~~use ~~and~~such ~~control~~patents ~~systems.~~and ~~Technical,~~intellectual ~~mechanical,~~property ~~quality,~~for ~~electronic,~~government and other ~~failures~~purposes. Governments may ~~occur~~challenge ~~from~~the ~~time~~sufficiency toof ~~time,~~intellectual ~~whether~~property asrights awe ~~result~~have ofgranted ~~manufacturing~~in orgovernment ~~design~~contracts ~~defect,~~and ~~operational~~attempt ~~process~~to obtain greater rights, orwhich ~~production~~could ~~issue~~reduce ~~attributable~~our ability to ~~us,~~protect our ~~customers,~~intellectual ~~suppliers,~~property ~~partners,~~rights ~~third~~and ~~party~~to ~~integrators~~compete. In some instances, orwe have augmented our technology base by licensing the proprietary intellectual property of others. ~~Product~~Intellectual ~~design~~property ~~changes~~obtained ~~and~~from ~~updates~~third ~~could~~parties is also ~~have~~subject ~~associated~~to ~~cost~~challenge, ~~and~~invalidation, ~~schedule~~misappropriation, ~~impacts~~or circumvention by third parties. In addition, ~~our~~we ~~products~~may ~~could~~not ~~fail~~be asable ato ~~result~~obtain ofnecessary ~~cyber-attacks,~~licenses ~~such~~on ascommercially ~~those~~reasonable ~~that~~terms. ~~seize~~In ~~control~~other instances, our ability to procure and ~~result~~perform ingovernment ~~misuse~~contracts orrequires ~~unintended~~us ~~use~~to ofobtain ~~our~~certain ~~products,~~rights orin ~~other~~the ~~intentional~~intellectual ~~acts~~property of others through government grants. ~~The~~Governments ~~impact~~may ofdeny aus ~~catastrophic~~the ~~product~~right orto ~~system~~obtain ~~failure~~such orrights ~~similar~~in ~~event~~the ~~affecting~~intellectual property of others, which may affect our orability to perform government contracts. Moreover, our ~~customers’~~efforts orto ~~suppliers’~~protect ~~products~~intellectual orproperty ~~services~~and ~~could~~proprietary rights may not be ~~significant,~~sufficient. ~~and~~We ~~could~~cannot ~~result~~be insure ~~injuries~~that orour ~~death,~~pending ~~property~~patent ~~damage,~~applications ~~loss~~will ofresult ~~strategic~~in ~~capabilities,~~the ~~loss~~issuance of ~~intellectual~~patents ~~property~~to us, ~~loss~~that ofpatents ~~reputation,~~issued ~~and~~to ~~other~~or ~~significant~~licensed ~~negative~~by ~~effects.~~us Ain ~~product~~the past or ~~system~~in ~~failure,~~the future will not be challenged or ~~perceived~~circumvented ~~failure~~by competitors, ~~could~~or ~~lead~~that tothese ~~negative~~patents ~~publicity,~~will abe ~~diversion~~found ofto ~~management~~be ~~attention,~~valid ~~and~~or ~~damage~~sufficiently broad to preclude our ~~reputation~~competitors ~~that~~from ~~could~~introducing ~~reduce~~technologies ~~demand~~similar ~~for~~to those covered by our ~~products~~patents and ~~services~~patent applications. ItOur ~~could~~ability ~~also~~to ~~result~~protect inand ~~product~~enforce ~~recalls~~our ~~and~~intellectual ~~product~~property ~~liability~~rights ~~and~~may ~~warranty~~be ~~claims~~limited ~~(including~~in ~~claims~~certain ~~related~~countries tooutside the ~~safety~~U.S. In addition, we may be the target of competitor or ~~reliability~~other third-party patent enforcement actions seeking substantial monetary damages or seeking to prevent our sale and marketing of certain of our products) ~~and~~or ~~related~~services. ~~expenses,~~Our ~~other~~competitive ~~service,~~position ~~repair,~~also ~~and~~may ~~maintenance~~be ~~costs,~~adversely ~~labor~~impacted ~~and~~by ~~material~~limitations ~~costs,~~on ~~customer~~our ~~support~~ability ~~costs,~~to ~~significant~~obtain ~~damages~~possession of, and ~~other~~ownership ~~costs~~of, ~~including~~necessary ~~fines~~licenses ~~and~~concerning ~~other~~data ~~remedies~~important to the development or provision of our products or service offerings, ~~and~~or ~~regulatory~~by ~~and~~limitations ~~environmental~~on ~~liabilities~~our ability to restrict the use by others of data related to our products or services. We may also ~~incur~~be ~~increased~~subject ~~costs~~to disruptions, ~~delayed payments~~losses, ~~reputational~~and ~~harm,~~liability orresulting ~~lost~~from ~~equipment~~various orcybersecurity ~~services~~attacks ~~revenue~~or inIT ~~connection~~failures, ~~with~~as adescribed ~~significant~~above. ~~issue~~Any ~~with~~of athese ~~third~~events ~~party’s~~or ~~product~~factors ~~with~~could ~~which~~have ~~our~~a ~~products~~material ~~are~~adverse ~~integrated.~~effect ~~Further,~~on our ~~insurance~~competitive ~~coverage~~position, ~~may~~subject ~~not~~us beto ~~adequate~~judgments, topenalties, ~~cover~~and ~~all~~significant ~~related~~litigation costs, ~~and~~or wetemporarily ~~may~~or ~~not~~permanently ~~otherwise~~disrupt beour ~~fully~~sales ~~indemnified~~and ~~for~~marketing ~~them~~of the affected products or services. Any of the foregoing could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

~~In particular~~LEGAL, ~~in 2023~~ENVIRONMENTAL, ~~Pratt~~AND &REGULATORY Whitney determined that a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100 GTF fleet, which powers the A320neo family of aircraft. This determination and corresponding fleet actions have resulted in, and are expected to continue to result in, an elevated level of aircraft on ground for the A320neo family of aircraft and significant incremental shop visits necessary to perform inspections on PW1100 GTF engines through the end of 2026. As a result, we have and will continue to incur significant customer support and mitigation costs and significant labor, material, and related costs. This matter has caused reputational harm and has negatively impacted, and will continue to impact, our results of operations and financial condition. The expected financial impact of the powder metal issue is based on historical experience and is subject to various assumptions and judgments, including, without limitation, the number and expected timing of shop visits, inspection results and scope of work to be performed, turnaround time, availability of parts, available capacity at overhaul facilities, and outcomes of negotiations with impacted customers, and these assumptions are subject to variability. Potential changes to these assumptions could have a material effect on the Company’s results of operations for the periods in which it is recognized. In addition, other engine models within Pratt & Whitney’s fleet contain parts manufactured with affected powder metal. The negative impacts arising from the Powder Metal Matter could increase if any other engine models are found to be materially impacted by this rare condition.RISKS

WeAs ~~depend~~a onU.S. ~~the~~government ~~recruitment~~contractor, ~~and~~we ~~retention~~are ofsubject ~~qualified~~to ~~personnel,~~risks ~~and~~relating ~~our~~to ~~failure~~U.S. togovernment ~~attract~~audits, ~~train~~investigations, and ~~retain~~disputes. ~~such~~We ~~personnel~~are ~~could~~subject ~~seriously~~to ~~harm~~U.S. ~~our~~government ~~business.~~investigations ~~Due~~relating to ~~the specialized nature of~~ our ~~business,~~U.S. ~~our~~government ~~future~~contracts. ~~performance~~Such isU.S. ~~highly~~government investigations

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~~dependent~~often ~~upon~~take ~~the~~years ~~continued~~to ~~services~~complete and could result in administrative, civil, or criminal liabilities, including repayments, fines, treble and other damages, forfeitures, restitution, or penalties, or could lead to suspension or debarment of U.S. government contracting or of export privileges. For instance, if we or one of our ~~key~~business ~~technical~~units ~~personnel~~were ~~and~~charged ~~executive~~with ~~officers~~wrongdoing in connection with a U.S. government investigation (including fraud, or violation of certain environmental, FCPA, and other anti-bribery and anti-corruption laws, or export laws, as further described below), the ~~hiring~~U.S. government could suspend us from bidding on or receiving awards of new U.S. government contracts pending the completion of legal proceedings. If convicted or found liable, ~~development~~the U.S. government could fine and debar us from new U.S. government contracting for a period generally not to exceed three years, and ~~retention~~could void any contracts found to be tainted by fraud. We also could suffer reputational harm if allegations of ~~qualified~~impropriety ~~technical~~were made against us, ~~engineering~~even if such allegations are later determined to be unsubstantiated. Further, ~~manufacturing~~our U.S. government contracts are subject to audit and we have received audit reports recommending the reduction of certain contract prices because, ~~marketing~~for example, ~~sales~~cost or pricing data disclosures or cost accounting practices used to price and negotiate those contracts may not have conformed to government regulations. Some of these audit reports recommend that certain payments be repaid, delayed, or withheld, and ~~management~~may ~~personnel~~involve ~~for~~substantial amounts, which could, if the audit reports’ theories were to prevail in litigation, also have future impacts such as increasing the costs absorbed by our ~~operations~~commercial businesses. ~~Our~~We ~~defense~~have ~~business~~made voluntary refunds in ~~particular~~those ~~requires~~cases ~~qualified~~we ~~personnel~~believe ~~with~~appropriate, ~~security~~have ~~clearances~~settled ~~due~~some allegations, and, in some cases, continue to negotiate and/or litigate. We may be, and have been, required to make significant payments into escrow of disputed liabilities while the related litigation is pending. If the litigation is resolved in our ~~classified~~favor, ~~programs~~any such payments will be returned to us with interest. AsThe ~~portions~~Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA) also review the adequacy of, and our ~~workforce~~compliance ~~continue~~with, our internal control systems and policies, including our accounting, purchasing, government property, estimating, earned value management, and material management accounting systems. Our final allowable incurred costs for each year are subject to ~~retire~~audit and wehave ~~lose~~from ~~experienced~~time ~~personnel~~to time resulted in disputes between us and the ~~future~~U.S. government, itincluding isDCMA ~~critical~~claims ~~that~~to recover payments for alleged noncompliance with cost accounting standards. Any costs found to be improperly allocated to a specific contract will not be reimbursed by the U.S. government or must be refunded by us to the U.S. government if already reimbursed. In some cases, the DOJ has conducted investigations or convened grand juries to investigate possible irregularities in our costs. An adverse outcome of any audit or investigation could result in civil and criminal penalties and fines, which could negatively impact our results of operations, financial condition, and liquidity. In addition, if allegations of impropriety were made against us, we ~~develop~~could ~~other~~suffer ~~employees~~serious reputational harm, ~~hire~~which ~~new~~could ~~qualified~~negatively ~~personnel~~affect our results of operations, financial position, and ~~successfully~~liquidity. ~~manage~~As discussed below and as previously disclosed, in October 2024, the ~~transfer~~Company ofentered ~~critical~~into ~~skillsets~~a deferred prosecution agreement and ~~industry~~a ~~knowledge~~civil ~~within~~settlement ~~our~~agreement ~~workforce~~with the DOJ to resolve investigations relating to pricing on certain government contracts.

WeA ~~have~~violation ~~experienced,~~by Raytheon Company or the Company of any one of the deferred prosecution agreements or Securities and ~~continue~~Exchange toCommission ~~experience~~(SEC) administrative order announced on October 16, ~~challenges~~2024 ~~hiring~~could ~~highly~~adversely ~~qualified~~affect ~~personnel~~our ~~including~~business. ~~engineers~~As previously disclosed, ~~skilled~~on ~~laborers~~October 15, 2024, Raytheon Company entered into a deferred prosecution agreement (DPA) (DPA-1) with the DOJ and ~~security~~on ~~clearance~~October ~~holders.~~16, We2024, ~~expect~~the ~~these~~Company ~~difficulties~~became subject to ~~continue~~an inadministrative order issued by the ~~future~~SEC (the SEC Administrative Order) to resolve the previously disclosed criminal and civil government investigations into payments made by Raytheon Company and its joint venture, Thales-Raytheon Systems (TRS), since 2012 in connection with certain Middle East contracts. InOn ~~addition~~October 16, 2024, Raytheon also entered into a DPA (DPA-2) and a False Claims Act (FCA) settlement agreement with the ~~cost~~DOJ ofto ~~labor~~resolve ~~remains~~previously ~~high~~disclosed criminal and civil government investigations into defective pricing claims for certain legacy Raytheon contracts entered into between 2011 and 2013 and in 2017. ~~Some~~The ~~candidates~~Company made a settlement payment, criminal and ~~new~~civil ~~personnel~~penalties, ~~may~~restitution, ~~have~~and ~~job~~disgorgement, as applicable, pursuant to DPA-~~related~~1, ~~expectations~~DPA-2, ~~that~~the ~~differ~~SEC ~~from~~Administrative ~~our~~Order ~~current~~and ~~workforce~~the FCA settlement agreement as described in “Note 17: Commitments and ~~are~~Contingencies” ~~inconsistent~~within ~~with~~Item ~~our~~8 ~~corporate~~of ~~culture.~~this ~~With~~Form ~~respect~~10-K. Pursuant to ~~existing~~DPA-1, ~~personnel~~among other terms, ~~some~~the ~~may~~DOJ ~~become~~will ~~required~~defer, for a period of three years, criminal prosecution of Raytheon Company related to ~~receive~~one ~~various~~count ~~security~~of ~~clearances~~conspiracy to violate the anti-bribery provisions of the FCPA and ~~substantial~~one ~~training~~count inof ~~order~~conspiracy to ~~work~~violate onthe AECA by failing to make related disclosures of certain ~~programs~~payments that qualified as fees, commissions and/or ~~perform~~political ~~certain~~contributions ~~tasks~~under Part 130 of ITAR. ~~Necessary~~Pursuant ~~security~~to ~~clearances~~DPA-2, ~~may~~among beother ~~delayed~~terms, ~~which~~the ~~may~~DOJ ~~impact~~will ~~our~~defer, ~~ability~~for a period of three years, criminal prosecution of Raytheon Company related to ~~perform~~two oncounts ~~our~~of ~~U.S.~~major ~~government~~fraud against the United States by Raytheon Company involving two legacy contracts. WeUnder ~~also~~DPA-1, ~~may~~DPA-2, ~~not~~and bethe ~~successful~~SEC inAdministrative ~~training~~Order, orRaytheon ~~developing~~Company ~~qualified~~and ~~personnel~~the ~~with~~Company are required to undertake certain cooperation and disclosure obligations (for a term commencing on the ~~requisite~~effective ~~relevant~~date ~~skills~~of orDPA-1 ~~security~~and ~~clearances.~~the ~~Moreover~~SEC Administrative Order, ~~some~~as ofapplicable, ~~our~~and ~~employees~~ending ~~are~~three ~~covered~~years byfrom ~~collective~~the ~~bargaining~~date ~~agreements~~on which Raytheon Company and the Company engage an independent compliance monitor satisfactory to the DOJ and SEC). ~~Historically,~~A wesingle ~~have~~independent ~~been~~compliance ~~able~~monitor was selected to ~~renegotiate~~oversee ~~expiring~~Raytheon ~~agreements~~Company’s ~~without~~and ~~experiencing~~the ~~significant~~Company’s ~~disruptions~~compliance with their respective obligations under DPA-1, DPA-2, and the SEC Administrative Order, and that monitor is expected to ~~business~~be ~~operations~~in place by the end of the first quarter. ~~However~~DPA-1 and DPA-2 further provide that, in the ~~U.S.~~event ~~labor~~the ~~environment~~DOJ, ~~has~~in ~~experienced~~its ~~shifts~~sole discretion, ~~and~~determines ifduring wethe ~~have~~deferred ~~additional~~prosecution ~~challenges~~period ~~renegotiating~~that ~~agreements~~Raytheon Company or ifthe ~~our~~Company ~~employees~~has ~~pursue~~violated ~~new~~any ~~collective~~provision ~~representation,~~of ~~then~~either weDPA, ~~could~~Raytheon ~~experience~~Company ~~additional~~or ~~costs~~the ~~and/or~~Company may be subject to ~~work~~prosecution ~~stoppages~~for any federal criminal violations brought against Raytheon Company or the relevant Company in DPA-1 and DPA-2. ~~Any~~The SEC Administrative Order further provides that, in the event of a breach of the ~~above~~SEC ~~factors~~Administrative ~~could~~Order, ~~seriously~~the ~~harm~~SEC ~~our~~may ~~business.~~vacate the Administrative Order and institute proceedings

Moreover, we believe that a critical element of our ability to successfully attract, train, and retain qualified personnel is our corporate culture, which we believe fosters innovation, collaboration, and a focus on execution, all in an environment of high ethical standards. Our global operations may present challenges in maintaining these important aspects of our corporate culture, and a failure to maintain our corporate culture could negatively impact us. Further, we rely on our key personnel to lead with integrity and to meet our high ethical standards that promote excellent performance. To the extent any of our key personnel were to behave in a way that is inconsistent with our values, including with respect to product safety or quality, legal or regulatory compliance, financial reporting, or people management, we could experience a materially adverse impact to our reputation and our operating results. In addition, failure or perceived failure to meet stakeholder expectations on environmental, social, and governance (ESG) matters could harm our reputation and impact demand for our products and services.

Exports and imports of certain of our products are subject to various export control, sanctions, and import regulations and may require authorization from regulatory agencies of the U.S. or other countries. We must comply with various laws and regulations relating to the export and import of products, services, and technology from and into the U.S. and other countries having jurisdiction over our operations. In the U.S., these laws and regulations include, among others, the Export Administration Regulations (EAR) administered by the U.S. Department of Commerce, the International Traffic in Arms Regulations (ITAR) and Arms Export Control Act (AECA) provisions administered by the U.S. Department of State (DOS), embargoes and sanctions regulations administered by the U.S. Department of the Treasury, and import regulations administered by the U.S. Department of Homeland Security and the U.S. Department of Justice (DOJ). Certain of our products, services, and technologies have military or strategic applications and are on the U.S. Munitions List of the ITAR, the Commerce Control List of the EAR, or are otherwise subject to the EAR and/or the U.S. Munitions Import List, and we are required to obtain licenses and authorizations from the appropriate U.S. government agencies before exporting these products out of the U.S. or importing these products into the U.S. U.S. foreign policy or the foreign policy of other licensing jurisdictions may affect the licensing process or otherwise prevent us from engaging in business dealings with certain individuals, entities, or countries. From time to time, we identify, investigate, remediate and voluntarily disclose violations or potential violations of the ITAR and EAR. Any failure by us, our customers, or our suppliers to comply with the above-referenced laws and regulations, arising out of our voluntary disclosures or otherwise, could result in civil or criminal penalties, fines, seizure of our products, adverse publicity, restrictions on our ability to engage in export or import transactions, or the suspension or debarment from doing business with the U.S. government. Moreover, any changes in export control, sanctions, or import regulations may further restrict the export or import of our products or services, and the possibility of such changes requires constant monitoring to ensure we remain compliant. Our ability to obtain required licenses and authorizations on a timely basis, or at all, is subject to risks and uncertainties, including changing laws, regulations, or foreign policies, delays in Congressional action, or geopolitical and other factors. If we are not successful in obtaining or maintaining the necessary licenses or authorizations in a timely manner, our sales relating to those approvals may be prevented or delayed, and revenue and profit previously recognized may be reversed. Any restrictions on the export or import of our products or product lines could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

In addition, as previously disclosed, on August 29, 2024, the Company entered into a Consent Agreement (CA) with the DOS to resolve alleged civil violations of the AECA and the ITAR. The CA, which has a three-year term, requires the Company to implement remedial compliance measures and to conduct an external audit of the Company’s ITAR compliance program. The

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CAagainst ~~also~~the ~~requires~~Company. ~~appointment~~Any breach of anDPA-1, ~~external~~DPA-2, ~~independent~~or ~~Special~~the ~~Compliance~~SEC ~~Officer~~Administrative ~~(SCO).~~Order ~~The~~could subject Raytheon Company ~~appointed~~or ~~its~~the ~~SCO~~Company onto ~~September~~criminal 27prosecutions and/or administrative proceedings, ~~2024.~~resulting Ifin weadditional ~~are~~criminal ~~unable~~and tocivil ~~satisfy~~penalties and fines, extension of either DPA’s term(s), including the ~~requirements~~terms of the CAmonitorship, ~~within~~increased ~~three~~future ~~years~~regulatory asand ~~determined~~legal scrutiny by ~~the~~U.S. ~~DOS~~or foreign government agencies, weadditional ~~may~~reputational ~~face~~harm, aadditional ~~continuation~~compliance costs, suspension of ~~the~~export CAprivileges and/or suspension or debarment from U.S. government contracting or subcontracting for a period of time, ~~additional~~any ~~fines~~of which could negatively affect our results of operations, orfinancial ~~other~~position, ~~adverse~~and ~~impacts~~liquidity. In addition, during the term of the CADPAs, the CADPAs’s transaction-related requirements may impact our ability to execute potential future divestitures within expected timeframes or consistent with expected valuation metrics, which could delay or impair our ability to achieve the expected benefits from our strategic plan, or otherwise harm our competitive position, results of operations, financial condition, or liquidity.

~~Our~~We ~~business~~are subject to litigation, environmental, anti-corruption, and ~~financial~~other ~~performance~~legal ~~may~~and becompliance ~~adversely~~risks. ~~affected~~We byare ~~threats~~subject to ~~our~~a ~~physical~~variety ~~security~~of litigation and ~~other~~legal ~~events~~compliance ~~outside our control~~risks. WeThese ~~could~~risks ~~encounter~~relate ~~threats~~ to, ~~our~~among ~~physical~~other ~~security~~things, ~~including~~product ~~our~~safety ~~facilities~~ and ~~personnel~~reliability, ~~and~~personal ~~threats~~injuries, ~~from~~intellectual ~~workplace~~property ~~violence~~rights, ~~civil~~contract-related ~~unrest~~claims, ~~terrorism~~government contracts, ortaxes, ~~similar~~environmental ~~acts~~matters, ~~any~~the use of ~~which~~chemical ~~could~~substances, ~~disrupt~~the ~~our~~use ~~business.~~of Inartificial ~~addition~~intelligence, ~~our~~export ~~business~~control, ~~and~~sanctions, ~~the~~employment ~~businesses~~matters, ofsecurities ~~our suppliers~~laws, ~~subcontractors,~~competition ~~service providers~~laws, and ~~customers,~~laws governing improper business practices. We or one of our businesses could be ~~disrupted~~charged bywith ~~public~~wrongdoing ~~health~~as ~~crises,~~a result of such asmatters. ~~pandemics~~If ~~and~~convicted ~~epidemics,~~or ~~and~~found ~~governmental~~liable, ~~business,~~we ~~and~~could ~~individual~~be ~~actions~~subject ~~taken~~to insignificant ~~response~~fines, ~~damaging~~penalties, ~~weather~~repayments, or other ~~acts~~damages of(in ~~nature~~certain cases, ~~physical~~treble ~~attacks~~damages). ~~due~~Product torecalls ~~proximity~~or toother ~~nation-state~~supply ~~conflicts,~~disruptions ~~cyber-attacks~~and onproduct ITliability ~~infrastructure~~and warranty claims can result in significant damages and ~~products~~costs, orincluding ~~other~~fines, ~~events~~as ~~outside~~well ofas ~~our~~other ~~control.~~harm ~~Any~~to ~~such~~our business ~~disruption~~as ~~could~~discussed ~~subject~~above. usAs toa ~~production~~global ~~downtimes~~business, ~~operational~~we ~~delays,~~are ~~supply~~subject ~~chain~~to ~~challenges,~~complex ~~other~~laws ~~detrimental~~and ~~impacts~~regulations onin ~~our~~the ~~operations~~U.S. orand ~~ability~~in toother ~~provide~~countries ~~products~~in ~~and~~which ~~services~~we tooperate. ~~our~~Those ~~customers,~~laws ~~decreased~~and ~~demand~~regulations ~~for~~may ~~our~~be ~~products,~~interpreted ~~decreased~~in ~~defense~~different ~~budgets,~~ways. ~~financial~~They ~~losses~~may also change from ~~remedial~~time ~~actions~~to time, ~~the~~as ~~diversion~~may ofrelated ~~management’s~~interpretations ~~attention~~ and ~~resources,~~other orguidance. ~~loss~~Changes ofin ~~business,~~laws ~~any~~or ofregulations ~~which~~ could ~~have~~result ain ~~material~~higher ~~adverse~~expenses. ~~effect~~Uncertainty onrelating ~~our~~to ~~competitive~~laws ~~position,~~or ~~results~~regulations ofmay ~~operations,~~also ~~financial~~affect ~~condition,~~how orwe ~~liquidity.~~conduct ~~The~~our ~~impact~~operations ofand ~~any~~structure ~~such~~our ~~business~~investments ~~disruption~~and iscould ~~difficult~~limit our ability to ~~predict~~enforce our rights.

We ~~depend~~use onhazardous ~~our~~substances ~~intellectual property~~ and ~~have~~generate ~~access~~hazardous towastes ~~certain~~in ~~third-party~~our ~~intellectual~~operations. ~~property;~~We ~~infringement~~also orrely ~~failure~~upon tothe ~~protect~~use ~~our~~of ~~intellectual~~chemical ~~property~~substances orthat ~~access~~are toheavily ~~third~~regulated ~~party~~in ~~intellectual~~connection ~~property~~with ~~could adversely affect~~ our ~~future~~products, ~~growth~~manufacturing processes and ~~success.~~operation Weof ~~rely~~our onfacilities. As a ~~combination of patents~~result, ~~trademarks,~~we ~~copyrights,~~are ~~trade~~subject ~~secrets,~~to ~~nondisclosure~~potentially ~~agreements,~~material ITliabilities ~~security~~related ~~systems,~~to ~~internal~~potential ~~controls and~~ non-compliance ~~systems,~~ and ~~other~~both ~~measures~~personal toinjuries ~~protect~~or ~~our intellectual~~ property. Wedamage ~~also~~that ~~rely~~may onbe ~~nondisclosure~~caused ~~agreements,~~by ~~confidentiality~~hazardous ~~obligations~~substance inreleases ~~contracts, IT security systems,~~ and ~~other~~exposures. ~~measures~~Personal toinjury ~~protect~~lawsuits ~~certain~~may ~~customer~~involve individual and ~~supplier~~purported ~~information~~class ~~and~~actions ~~intellectual~~alleging ~~property~~ that wecontaminants ~~have~~originating infrom our ~~possession~~current or toformer ~~which~~products weor ~~have~~operating ~~access.~~facilities ~~The~~caused ~~U.S.~~or ~~government~~contributed ~~and~~to ~~foreign~~medical ~~governments~~conditions, ~~have~~including ~~licenses~~cancers ~~under~~or ~~certain~~other ofillnesses ~~our~~incurred ~~intellectual~~by ~~property~~employees, ~~including~~former ~~certain patents~~employees, ~~which~~third-parties’ ~~are~~employees, ~~developed~~ or ~~used~~residents in ~~performance~~the ofarea, ~~government~~and ~~contracts.~~environmental ~~Governments~~damage ~~may use~~ or ~~authorize~~diminution ~~others~~of ~~(including~~real ~~our~~estate ~~competitors) to use such patents and intellectual property for government and other purposes~~values. ~~Governments~~For ~~may~~example, ~~challenge the sufficiency of intellectual property rights~~ we ~~have~~are ~~granted~~investigating inand ~~government~~remediating ~~contracts~~contamination ~~and~~related ~~attempt~~ to ~~obtain~~past ~~greater~~practices ~~rights,~~at ~~which~~a ~~could~~number ~~reduce~~of ~~our~~properties ~~ability to protect our intellectual property rights~~ and, toin ~~compete. In~~ some ~~instances~~cases, we have ~~augmented~~been ~~our~~named ~~technology~~as ~~base~~a bydefendant ~~licensing~~in ~~the~~related ~~proprietary~~“toxic ~~intellectual~~tort” ~~property of others~~claims. ~~Intellectual~~We ~~property~~are ~~obtained~~also ~~from~~subject ~~third~~to ~~parties~~laws isand ~~also~~regulations ~~subject~~that: to(1) ~~challenge,~~impose ~~invalidation,~~requirements ~~misappropriation,~~for orchemical ~~circumvention~~substances byand ~~third~~the ~~parties.~~proper Inmanagement, ~~addition~~treatment, westorage, ~~may~~and ~~not~~disposal beof ~~able~~hazardous tosubstances ~~obtain~~and ~~necessary~~wastes; ~~licenses~~(2) onrestrict ~~commercially~~air ~~reasonable~~and ~~terms.~~water Inemissions ~~other~~from ~~instances,~~ our ~~ability~~operations to(including ~~procure~~U.S. ~~and perform~~ government-owned ~~contracts~~facilities ~~requires~~we usmanage); toand ~~obtain~~(3) ~~certain~~require ~~rights~~maintenance ~~in the intellectual property~~ of ~~others~~a ~~through~~safe ~~government grants~~workplace. ~~Governments~~These ~~may~~laws ~~deny~~and usregulations ~~the~~can ~~right~~lead to ~~obtain~~substantial ~~such~~fines ~~rights~~and incriminal ~~the~~sanctions ~~intellectual~~for ~~property of others~~violations, ~~which~~and may ~~affect~~require ~~our~~the ~~ability~~installation toof ~~perform~~costly ~~government~~equipment ~~contracts.~~or ~~Moreover,~~operational ~~our~~changes ~~efforts~~ to ~~protect~~limit ~~intellectual~~pollution ~~property~~emissions, ~~and~~decrease ~~proprietary~~the ~~rights~~likelihood ~~may~~of ~~not~~accidental behazardous ~~sufficient.~~substance Wereleases, ~~cannot~~and/or bereduce ~~sure~~the ~~that~~risks ~~our~~of ~~pending~~injury ~~patent~~to ~~applications~~people. ~~will~~We ~~result~~incur, inand ~~the~~expect ~~issuance~~to ofcontinue ~~patents~~ to usincur, ~~that~~capital ~~patents~~and ~~issued~~other expenditures to orcomply ~~licensed~~with bythese uslaws inand ~~the~~regulations. ~~past~~A orcriminal inviolation ~~the~~of ~~future~~certain ~~will~~U.S. ~~not~~environmental bestatutes ~~challenged~~such oras ~~circumvented~~the byClean ~~competitors,~~Air orAct ~~that~~and ~~these~~Clean ~~patents~~Water ~~will~~Act becould ~~found~~result toin besuspension, ~~valid~~debarment, or ~~sufficiently~~disqualification ~~broad~~by tothe ~~preclude~~U.S. ~~our~~Environmental ~~competitors~~Protection ~~from~~Agency ~~introducing~~(EPA). ~~technologies~~A ~~similar~~facility determined to ~~those~~be ~~covered~~in byviolation ~~our~~of ~~patents~~the ~~and~~criminal ~~patent~~provisions ~~applications.~~of ~~Our~~these ~~ability~~statutes tocan ~~protect and enforce our intellectual property rights may~~ be ~~limited~~prohibited infrom ~~certain~~performing ~~countries~~any ~~outside the~~ U.S. Ingovernment ~~addition,~~contract wework ~~may~~until be the ~~target~~violation ofhas ~~competitor~~been orcorrected ~~other~~and ~~third-party~~the ~~patent~~EPA ~~enforcement~~approves ~~actions~~the ~~seeking~~reinstatement ~~substantial monetary damages or seeking to prevent our sale and marketing~~ of ~~certain~~the ~~of our products or services~~facility. ~~Our~~Even ~~competitive~~in ~~position~~litigation ~~also~~where ~~may~~we bebelieve ~~adversely~~our ~~impacted~~liability byis ~~limitations~~remote, onthere ~~our~~is ~~ability~~a torisk ~~obtain~~that ~~possession~~a ~~of,~~negative ~~and~~finding ~~ownership~~or ~~of,~~decision ~~necessary~~in ~~licenses~~a ~~concerning~~matter ~~data~~involving ~~important~~multiple toplaintiffs ~~the development~~ or ~~provision~~a ofpurported ~~our~~class ~~products~~action orcould ~~service~~have ~~offerings,~~a ormaterial byadverse ~~limitations~~effect on our ~~ability~~competitive toposition, ~~restrict~~results ~~the use by others~~ of ~~data~~operations, ~~related~~financial tocondition, ~~our products~~ or ~~services.~~liquidity, Wein ~~may~~particular ~~also~~with berespect ~~subject~~ to ~~disruptions,~~environmental ~~losses,~~claims ~~and~~in ~~liability~~regions ~~resulting~~where ~~from~~we ~~various~~have, ~~cybersecurity attacks~~ or ITpreviously ~~failures~~had, assignificant ~~described above~~operations. ~~Any~~In ofaddition, ~~these~~new ~~events~~laws, regulations, or ~~factors~~governmental ~~could~~policies, ~~have~~sudden achanges ~~material~~in ~~adverse~~the ~~effect~~interpretation onand ~~our~~enforcement ~~competitive~~of ~~position,~~existing ~~subject~~laws usand ~~to judgments~~regulations, ~~penalties,~~the ~~and~~discovery ~~significant~~of ~~litigation~~previously ~~costs~~unknown contamination, or ~~temporarily~~the orimposition ~~permanently~~of ~~disrupt~~new ~~our~~clean-up ~~sales~~standards ~~and~~could ~~marketing~~require ofus ~~the~~to ~~affected~~incur ~~products~~additional orcosts ~~services.~~in ~~Any of~~ the ~~foregoing~~future ~~could~~that would have a ~~material~~negative ~~adverse~~ effect on our ~~competitive position,~~ results of operations, financial condition, orand liquidity.

~~LEGAL~~In addition, ~~ENVIRONMENTAL~~the FCPA and other anti-bribery and anti-corruption laws generally prohibit companies and their intermediaries from making improper payments to U.S. and non-U.S. officials for the purpose of obtaining or retaining business. These laws apply to companies, ~~AND~~individual ~~REGULATORY~~directors, ~~RISKS~~officers, employees, and agents. U.S. companies also may be held liable for actions taken by strategic or local partners or representatives. The FCPA also imposes accounting standards and requirements on publicly traded U.S. corporations and their foreign affiliates, which are intended to prevent the diversion of corporate funds to the payment of bribes and other improper payments. Certain of our customer relationships outside of the U.S. are with governmental entities and are, therefore, subject to the FCPA and other anti-bribery and anti-corruption laws, including the anti-

As a U.S. government contractor, we are subject to risks relating to U.S. government audits, investigations, and disputes. We are subject to U.S. government investigations relating to our U.S. government contracts. Such U.S. government investigations often take years to complete and could result in administrative, civil, or criminal liabilities, including repayments, fines, treble and other damages, forfeitures, restitution, or penalties, or could lead to suspension or debarment of U.S. government contracting or of export privileges. For instance, if we or one of our business units were charged with wrongdoing in connection with a U.S. government investigation (including fraud, or violation of certain environmental, FCPA, and other anti-bribery and

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bribery and anti-corruption laws, ~~or export laws, as further described below), the U.S. government could suspend us from bidding on or receiving awards~~ of ~~new~~ non-U.S. ~~government contracts pending the completion of legal proceedings~~countries. IfOur ~~convicted~~policies ormandate ~~found~~compliance ~~liable,~~with ~~the~~these ~~U.S.~~anti-bribery ~~government could fine~~ and ~~debar~~anti-corruption ~~us from new U~~laws.S. ~~government~~Despite ~~contracting~~meaningful ~~for~~measures athat ~~period~~we ~~generally~~undertake ~~not~~ to ~~exceed~~ensure ~~three~~lawful ~~years~~conduct, ~~and~~which ~~could~~include ~~void~~training ~~any~~and ~~contracts~~internal ~~found~~control topolicies, bethese ~~tainted~~measures bymay ~~fraud.~~not Wealways ~~also~~prevent ~~could~~violations ~~suffer reputational harm if allegations~~ of impropriety were made against us, even if such allegations are later determined to be unsubstantiated. Further, our U.S. government contracts are subject to audit and we have received audit reports recommending the ~~reduction~~FCPA ~~of certain contract prices because, for example, cost~~ or ~~pricing~~similar ~~data~~laws. ~~disclosures~~As ordiscussed ~~cost~~above ~~accounting practices used to price~~ and ~~negotiate~~as ~~those~~previously ~~contracts may not have conformed to government regulations. Some of these audit reports recommend that certain payments be repaid~~disclosed, ~~delayed,~~in orOctober ~~withheld~~2024, ~~and~~the ~~may~~Company ~~involve~~entered ~~substantial~~into ~~amounts,~~a ~~which~~DPA ~~could,~~with if the ~~audit~~DOJ ~~reports’~~and ~~theories~~consented ~~were~~ to ~~prevail in litigation, also have future impacts such as increasing~~ the ~~costs~~entry ~~absorbed~~of byan ~~our~~SEC ~~commercial~~Administrative ~~businesses.~~Order Weto ~~have~~resolve ~~made~~investigations ~~voluntary~~related ~~refunds~~to inconduct ~~those cases we believe appropriate~~that, ~~have~~among ~~settled~~other ~~some allegations~~things, ~~and,~~violated inthe ~~some cases, continue to negotiate and/or litigate~~FCPA. We ~~may be, and~~ have been, ~~required~~subject to ~~make~~regulatory ~~significant~~investigations ~~payments~~for ~~into~~alleged ~~escrow~~violations of ~~disputed~~anti-bribery ~~liabilities~~and ~~while~~anti-corruption ~~the related litigation is pending. If the litigation is resolved in our favor~~laws, ~~any~~and ~~such~~could ~~payments will~~ be ~~returned~~subject to ussuch ~~with~~investigations ~~interest.~~in ~~The Defense Contract Audit Agency (DCAA) and~~ the ~~Defense Contract Management Agency (DCMA) also review the adequacy of~~future, ~~and~~which ~~our~~could ~~compliance~~result with, our internal control systems and policies, including our accounting, purchasing, government property, estimating, earned value management, and material management accounting systems. Our final allowable incurred costs for each year are subject to audit and have from time to time resulted in ~~disputes~~criminal ~~between us~~ and ~~the~~civil ~~U.S. government~~penalties, ~~including DCMA claims to recover payments for alleged noncompliance with cost accounting standards. In some cases~~disgorgement, ~~the~~further ~~DOJ~~changes ~~has conducted investigations~~ or ~~convened~~enhancements ~~grand juries~~ to ~~investigate possible irregularities in~~ our ~~costs.~~procedures, Aspolicies ~~discussed below~~ and ~~as previously disclosed~~controls, inpersonnel ~~October 2024~~changes, the Company entered into certain deferred prosecution agreements and a civil settlement agreement with the DOJ to resolve investigations relating to pricing on certain government contracts. Any costs found to be improperly allocated to a specific contract will not be reimbursed by the U.S. government or ~~must~~other beremedial ~~refunded by us to the U~~actions.S. ~~government~~Violations ~~if already reimbursed. An adverse outcome~~ of ~~any~~these ~~audit~~laws, or ~~investigation~~allegations ~~could~~of ~~result~~such ~~in civil and criminal penalties and fines~~violations, ~~which~~ could ~~negatively~~disrupt ~~impact~~ our ~~results of~~ operations, ~~financial~~cause ~~condition~~reputational harm, ~~and~~involve ~~liquidity.~~significant Inmanagement ~~addition~~attention, ifand ~~allegations~~result ofin ~~impropriety~~a ~~were~~material ~~made~~adverse ~~against~~effect ~~us,~~on weour ~~could~~competitive ~~suffer serious reputational harm~~position, ~~which could negatively affect our~~ results of operations, financial ~~position~~condition, ~~and~~or liquidity.

~~A violation by Raytheon Company or the Company of any one of the deferred prosecution agreements or Securities and Exchange Commission (SEC) administrative order announced on October 16~~Cybersecurity, ~~2024~~artificial ~~could adversely affect our business. As previously disclosed~~intelligence, ~~on October 15, 2024, Raytheon Company entered into a deferred prosecution agreement (DPA) (DPA-1) with the DOJ~~ and ondata ~~October~~security ~~16, 2024, the Company became subject to an administrative order issued by the SEC (the SEC Administrative Order) to resolve the previously disclosed criminal~~ and ~~civil~~protection ~~government~~laws ~~investigations into payments made by Raytheon Company~~ and ~~its~~regulations ~~joint~~are ~~venture,~~evolving ~~Thales-Raytheon Systems (TRS), since 2012 in connection with certain Middle East contracts. On October 16, 2024, Raytheon also entered into a DPA (DPA-2)~~ and apresent ~~False~~increasing Claims Act (FCA) settlement agreement with the DOJ to resolve previously disclosed criminal and civil government investigations into defective pricing claims for certain legacy Raytheon contracts entered into between 2011 and 2013 and in 2017. The Company made a settlement payment, criminal and civil penalties, restitution, and disgorgement, as applicable, pursuant to DPA-1, DPA-2, the SEC Administrative Order and the FCA settlement agreement as described in “Note 17: Commitments and Contingencies” within Item 8 of this Form 10-K. Pursuant to DPA-1, among other terms, the DOJ will defer, for a period of three years, criminal prosecution of Raytheon Company related to Raytheon Company’s alleged conspiracy to violate the anti-bribery provisions of the FCPA and alleged conspiracy to violate the AECA by failing to make related disclosures of certain payments that qualified as fees, commissions and/or political contributions under Part 130 of ITAR. Pursuant to DPA-2, among other terms, the DOJ will defer, for a period of three years, criminal prosecution of Raytheon Company related to two counts of major fraud against the United States by Raytheon Company involving two legacy contracts. Under DPA-1, DPA-2, and the SEC Administrative Order, Raytheon Company and the Company are required to retain an independent compliance monitor satisfactory to the DOJ and the SEC (for a term ending three years from the date on which the monitor is engaged) and are required to undertake certain cooperation and disclosure obligations (for a term commencing on the effective date of DPA-1 and the SEC Administrative Orderchallenges, ~~as applicable, and ending three years from the date on~~ which ~~the~~may ~~monitor~~increase isour ~~engaged). The compliance monitor will oversee Raytheon Company’s and the Company’s compliance with their respective obligations under DPA-1~~costs, ~~DPA-2,~~affect ~~and~~our ~~the SEC’s Administrative Order. DPA-1 and DPA-2 further provide that~~competitiveness, incause ~~the~~reputational ~~event the DOJ~~harm, in its sole discretion, determines during the deferred prosecution period that Raytheon Company or the Company has violated any provision of either DPA, Raytheon Company or the Company may be subject to prosecution for any federal criminal violations brought against Raytheon Company or the relevant Company in DPA-1 and ~~DPA-2.~~expose ~~The~~us SEC Administrative Order further provides that, in the event of a breach of the SEC Administrative Order, the SEC may vacate the Administrative Order and institute proceedings against the Company. Any breach of DPA-1, DPA-2, or the SEC Administrative Order could subject Raytheon Company or the Company to ~~criminal~~substantial ~~prosecutions~~fines ~~and/~~or ~~administrative~~other ~~proceedings, resulting in additional criminal and civil~~ penalties ~~and fines, extension of either DPA’s term(s), including the terms of the monitorship, increased future regulatory and legal scrutiny by U~~.S. ~~or foreign government agencies, additional reputational harm, additional compliance costs, suspension of export privileges and/~~

Our business and financial performance may be adversely affected by climate change, including regulations, customer demand, technologies, and extreme weather. Our business may be impacted by climate change and governmental and industry actions taken in response, which present short, medium, and long-term risks to our business and financial condition. Current and emerging environmental and climate-related laws, regulations, or other policies, including regulations on greenhouse gas emissions, carbon pricing, energy taxes, product efficiency standards, and mandatory disclosure obligations, could increase our operational and compliance expenditures and those of our suppliers, including increased energy and raw materials costs, and costs associated with manufacturing changes, and lead to new or additional investments in product designs and facility upgrades. In addition, we continue to see ever-increasing demands for offerings focused on addressing long-term climate change, transitioning to lower emission technologies, including low to no carbon products and services, the use of alternative energy sources, and other sustainable aviation technologies, weather and climate monitoring products and services. Customers, shareholders, and institutional investors may focus on measuring and minimizing environmental impact, including our environmental sustainability practices and commitments with respect to our operations, products, and suppliers. As a result, we continue to evaluate making additional investments in new technologies and capabilities, and devoting management and other resources in response to the foregoing. We may not realize, on a timely basis or at all, the anticipated benefits of these investments and actions for a variety of reasons, including technological challenges, evolving government and customer requirements, and our ability to anticipate them and develop in-demand technologies on a timely basis, and other risks related to the development of advanced technologies described above. In addition, certain technologies will be dependent upon government action, such as investments in infrastructure, creating appropriate market incentives, and making certain raw materials available for development of certain technologies. Moreover, we rely on our suppliers to timely and effectively adapt and meet our evolving technological supply needs, and they may be unable to fully respond to our requirements in a timely manner or at all. We also face competition risks as our competitors also respond to advancing sustainable technologies. Our competitors may develop these in-demand technologies before we do, their new technologies may be deemed by our customers to be superior to technologies we may develop, and their technologies may otherwise gain industry acceptance in advance of or instead of our products. In addition, as we and our competitors develop increasingly sustainable technologies, demand for our older offerings may decrease or become nonexistent. Our reputation may also be damaged if we or our industry fail, or are perceived to fail, to achieve sustainability goals or commitments or to comply with evolving environmental and climate-related regulations. In addition, climate-related litigation and government investigations could be commenced against us, could be costly to defend, and could adversely affect our business. Moreover, our business, the businesses of our suppliers, subcontractors, service providers, distributors, and customers, and the industries in which we operate, could be negatively impacted by increasing frequency and severity of acute extreme weather events caused by climate change, including hurricanes, tornadoes, floods, snow and ice storms, fires, heat waves, and mud slides, and by chronic changes in weather patterns, such as temperature increases, drought, and sea level rise. These events could damage our and our suppliers’ facilities, products, and other assets, and cause disruptions to our business and operations, supply chain, and distribution networks, and the businesses of our customers, and require an increase in expenditures to improve climate resiliency of our operations. Any of the foregoing could materially decrease our revenues and materially increase our costs and expenses.

FINANCIAL, TAX, AND INSURANCE RELATED RISKS

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orother ~~suspension~~purposes, orsuch ~~debarment~~as ~~from~~acquisitions, ~~U.S.~~research ~~government~~and ~~contracting or subcontracting for a period of time~~development, ~~any~~and ofother ~~which~~reinvestments ~~could~~in ~~negatively affect~~ our ~~results of operations~~businesses, ~~financial~~and ~~position,~~dividends and ~~liquidity.~~common Instock ~~addition,~~repurchases. ~~during~~It ~~the~~could ~~term~~also ofreduce ~~the~~our ~~DPAs,~~flexibility ~~the~~in ~~DPAs’~~planning ~~transaction-related~~for, ~~requirements~~or ~~may~~reacting ~~impact our ability~~ to, ~~execute~~changes ~~potential~~in ~~future~~our ~~divestitures~~business ~~within~~and ~~expected~~market ~~timeframes~~conditions. orIt ~~consistent~~exposes ~~with~~us ~~expected~~to ~~valuation~~interest ~~metrics,~~rate ~~which~~and ~~could~~credit ~~delay~~market orrisk ~~impair~~at ~~our~~the ~~ability~~time toof ~~achieve~~refinancing ~~the~~outstanding ~~expected~~debt, ~~benefits~~as ~~from~~well ~~our~~as ~~strategic~~these ~~plan,~~same orrisks ~~otherwise~~on ~~harm~~ our ~~competitive~~commercial ~~position~~paper obligations, ~~results~~which ofare ~~operations,~~issued ~~financial~~at ~~condition~~variable ~~or liquidity~~rates.

WeIn ~~are subject to litigation~~addition, ~~environmental,~~if ~~anti-corruption,~~we ~~and~~require ~~other~~additional ~~legal~~funding ~~and~~in ~~compliance~~order ~~risks. We are subject~~ to afund ~~variety~~outstanding offinancing ~~litigation~~commitments ~~and~~or ~~legal~~meet ~~compliance risks. These risks relate to, among~~ other ~~things,~~business ~~product safety and reliability~~requirements, ~~personal~~a ~~injuries,~~number ~~intellectual~~of ~~property~~factors ~~rights,~~could ~~contract-related~~cause ~~claims,~~us ~~government~~to ~~contracts,~~incur ~~taxes,~~increased ~~environmental~~borrowing ~~matters,~~costs ~~the~~and ~~use~~to ofhave ~~artificial~~greater ~~intelligence,~~difficulty ~~export~~accessing ~~control,~~public ~~sanctions,~~and ~~employment~~private ~~matters,~~markets ~~securities~~for ~~laws~~debt, ~~competition~~any ~~laws,~~of ~~and~~which ~~laws~~may ~~governing~~adversely ~~improper~~affect ~~business~~our ~~practices.~~ability Weto orfund ~~one of~~ our ~~businesses~~business ~~could be charged with wrongdoing as a result of such matters~~requirements. IfThese ~~convicted~~factors orinclude ~~found~~disruptions ~~liable, we could be subject to significant fines, penalties, repayments,~~ or ~~other~~declines ~~damages (~~in ~~certain~~the ~~cases,~~global ~~treble~~capital ~~damages).~~markets ~~Product recalls~~ and/or ~~product~~a ~~liability~~decline ~~and warranty claims can result~~ in ~~significant~~our ~~damages~~financial ~~and costs~~performance, ~~including fines~~outlook, asor ~~well~~credit asratings. ~~other~~Downgrades ~~harm~~of to our ~~business~~credit asratings ~~discussed~~may ~~above. As a global business~~result, if we are ~~subject~~unable to ~~complex~~meet ~~laws~~operating ~~and~~expectations ~~regulations in the U.S.~~ and inour ~~other~~cash ~~countries~~flow ~~in which we operate. Those laws and regulations may be interpreted in different ways. They may also change from time to time~~expectations, ~~as may related interpretations and other guidance. Changes in laws~~ or ~~regulations could result in higher expenses. Uncertainty relating~~ to ~~laws~~the orextent ~~regulations~~that ~~may also affect how~~ we ~~conduct~~are ~~our~~unable ~~operations~~to ~~and~~reduce ~~structure~~ our ~~investments~~outstanding ~~and~~debt ~~could~~according ~~limit our ability~~ to ~~enforce~~planned ~~our rights~~timeframes.

We use hazardous substances and generate hazardous wastes in certain of our operations. We also rely upon the use of chemical substances that are heavily regulated in connection with our products, manufacturing processes and operation of our facilities. As a result, we are subject to potentially material liabilities related to potential non-compliance and both personal injuries or property damage that may be caused by hazardous substance releases and exposures. Personal injury lawsuits may involve individual and purported class actions alleging that contaminants originating from our current or former products or operating facilities caused or contributed to medical conditions, including cancers or other illnesses incurred by employees, former employees, third-parties’ employees, or residents in the area, and environmental damage or diminution of real estate values. For example, we are investigating and remediating contamination related to past practices at a number of properties and, in some cases, have been named as a defendant in related “toxic tort” claims. We are also subject to laws and regulations that: (1) impose requirements for chemical substances and the proper management, treatment, storage, and disposal of hazardous substances and wastes; (2) restrict air and water emissions from our operations (including U.S. government-owned facilities we manage); and (3) require maintenance of a safe workplace. These laws and regulations can lead to substantial fines and criminal sanctions for violations, and may require the installation of costly equipment or operational changes to limit pollution emissions, decrease the likelihood of accidental hazardous substance releases, and/or reduce the risks of injury to people. We incur, and expect to continue to incur, capital and other expenditures to comply with these laws and regulations. A criminal violation of certain U.S. environmental statutes such as the Clean Air Act and Clean Water Act could result in suspension, debarment, or disqualification by the U.S. Environmental Protection Agency (EPA). A facility determined to be in violation of the criminal provisions of these statutes can be prohibited from performing any U.S. government contract work until the violation has been corrected and the EPA approves the reinstatement of the facility. Even in litigation where we believe our liability is remote, there is a risk that a negative finding or decision in a matter involving multiple plaintiffs or a purported class action could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity, in particular with respect to environmental claims in regions where we have, or previously had, significant operations. In addition, new laws, regulations, or governmental policies, sudden changes in the interpretation and enforcement of existing laws and regulations, the discovery of previously unknown contamination, or the imposition of new clean-up standards could require us to incur additional costs in the future that would have a negative effect on our results of operations, financial condition, and liquidity.

In addition, the FCPA and other anti-bribery and anti-corruption laws generally prohibit companies and their intermediaries from making improper payments to U.S. and non-U.S. officials for the purpose of obtaining or retaining business. These laws apply to companies, individual directors, officers, employees, and agents. U.S. companies also may be held liable for actions taken by strategic or local partners or representatives. The FCPA also imposes accounting standards and requirements on publicly traded U.S. corporations and their foreign affiliates, which are intended to prevent the diversion of corporate funds to the payment of bribes and other improper payments. Certain of our customer relationships outside of the U.S. are with governmental entities and are, therefore, subject to the FCPA and other anti-bribery and anti-corruption laws, including the anti-bribery and anti-corruption laws of non-U.S. countries. Our policies mandate compliance with these anti-bribery and anti-corruption laws. Despite meaningful measures that we undertake to ensure lawful conduct, which include training and internal control policies, these measures may not always prevent violations of the FCPA or similar laws. As discussed above and as previously disclosed, in October 2024, the Company entered into a DPA with the DOJ and consented to the entry of an SEC Administrative Order to resolve investigations related to conduct that, among other things, violated the FCPA. We have been subject to regulatory investigations for alleged violations of anti-bribery and anti-corruption laws, and could be subject to such

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investigations in the future, which could result in criminal and civil penalties, disgorgement, further changes or enhancements to our procedures, policies and controls, personnel changes, or other remedial actions. Violations of these laws, or allegations of such violations, could disrupt our operations, cause reputational harm, involve significant management attention, and result in a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

Cybersecurity and data security and protection laws and regulations are evolving and present increasing compliance challenges, which may increase our costs, affect our competitiveness, cause reputational harm, and expose us to substantial fines or other penalties.

Our business and financial performance may be adversely affected by climate change, including regulations, customer demand, technologies, and extreme weather. Our business may be impacted by climate change and governmental and industry actions taken in response, which present short, medium, and long-term risks to our business and financial condition. Current and emerging environmental and climate-related laws, regulations, or other policies, including regulations on greenhouse gas emissions, carbon pricing, energy taxes, product efficiency standards, mandatory disclosure obligations, and U.S. government procurement requirements, could increase our operational and compliance expenditures and those of our suppliers, including increased energy and raw materials costs, and costs associated with manufacturing changes, and lead to new or additional investments in product designs and facility upgrades. In addition, we continue to see ever-increasing demands for offerings focused on addressing climate change, transitioning to lower emission technologies, including low to no carbon products and services, the use of alternative energy sources, and other sustainable aviation technologies, and climate monitoring and adaptation products and services. Customers, shareholders, and institutional investors are focused on ESG, including our environmental sustainability practices and commitments with respect to our operations, products, and suppliers. As a result, we continue to make additional investments in new technologies and capabilities, and devote management and other resources in response to the foregoing. We may not realize, on a timely basis or at all, the anticipated benefits of these investments and actions for a variety of reasons, including technological challenges, evolving government and customer requirements, and our ability to anticipate them and develop in-demand technologies on a timely basis, and other risks related to the development of advanced technologies described above. In addition, certain technologies will be dependent upon government action, such as investments in infrastructure, creating appropriate market incentives, and making certain raw materials available for development of certain technologies. Moreover, we rely on our suppliers to timely and effectively adapt and meet our evolving technological supply needs, and they may be unable to fully respond to our requirements in a timely manner or at all. We also face competition risks as our competitors also respond to advancing sustainable technologies. Our competitors may develop these in-demand technologies before we do, their new technologies may be deemed by our customers to be superior to technologies we may develop, and their technologies may otherwise gain industry acceptance in advance of or instead of our products. In addition, as we and our competitors develop increasingly sustainable technologies, demand for our older offerings may decrease or become nonexistent. Our reputation may also be damaged if we or our industry fail, or are perceived to fail, to achieve sustainability goals or commitments or to comply with evolving climate-related regulations. In addition, climate-related litigation and government investigations could be commenced against us, could be costly to defend, and could adversely affect our business. Moreover, our business, the businesses of our suppliers, subcontractors, service providers, distributors, and customers, and the industries in which we operate, could be negatively impacted by increasing frequency and severity of acute extreme weather events caused by climate change, including hurricanes, tornadoes, floods, snow and ice storms, fires, heat waves, and mud slides, and by chronic changes in weather patterns, such as temperature increases, drought, and sea level rise. These events could damage our and our suppliers’ facilities, products, and other assets, and cause disruptions to our business and operations, supply chain, and distribution networks, and the businesses of our customers, and require an increase in expenditures to improve climate resiliency of our operations. Any of the foregoing could materially decrease our revenues and materially increase our costs and expenses.

FINANCIAL, TAX, AND INSURANCE RELATED RISKS

Our debt levels and related debt service obligations could negatively impact our intended capital allocation, and we may be unable to obtain debt at competitive rates, on commercially reasonable terms, or in sufficient amounts. We have outstanding debt and other financial obligations, and we depend, in part, upon the issuance of debt to fund our business requirements. The increased indebtedness of RTX in connection with the $10 billion accelerated share repurchase (ASR) transactions that began in October 2023 and completed at the end of September 2024 may have various negative impacts on our business. These include shifting significant cash flow from operations to debt principal and interest payments, which will reduce funds we have available for other purposes, such as acquisitions, research and development, and other reinvestments in our businesses, and dividends and common stock repurchases. It could also reduce our flexibility in planning for, or reacting to, changes in our business and market conditions. It exposes us to interest rate and credit market risk at the time of refinancing outstanding debt, as well as these same risks on our commercial paper obligations, which are issued at variable rates.

In addition, if we require additional funding in order to fund outstanding financing commitments or meet other business requirements, a number of factors could cause us to incur increased borrowing costs and to have greater difficulty accessing

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public and private markets for debt, any of which may adversely affect our ability to fund our business requirements. These factors include disruptions or declines in the global capital markets and/or a decline in our financial performance, outlook, or credit ratings. Downgrades of our credit ratings may result, if we are unable to meet operating expectations and our cash flow expectations, or to the extent that we are unable to reduce our outstanding debt according to planned timeframes.

We use estimates in accounting for many of our programs, and changes in our estimates could adversely affect our future financial results. Accounting for long-term contracts and related assets requires estimates and judgments related to our progress toward completion and the long-term performance on the contract. Significant judgments include potential risks associated with the ability and cost to achieve program schedule, including customer-directed delays or reductions in scheduled deliveries, and technical and other specific contract requirements including customer activity levels and variable consideration based upon that activity. Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenues and cost at completion is complex and subject to many variables. Management must make assumptions and estimates regarding contract revenue and cost (such as estimates of variable consideration, including award fees and penalties), including with respect to: (1) labor productivity and availability; (2) the complexity and scope of the work to be performed; (3) the availability and cost of materials including any impact from changing costs or inflation; (4) the length of time to complete the performance obligation; (5) execution by our subcontractors; (6) the availability and timing of funding from our customer; (7) overhead cost rates; and (8) current and past maintenance cost and frequency driven by estimated aircraft and engine utilization and estimated useful lives of components, among other variables. Cost estimates may also include the estimated cost of satisfying our industrial cooperation agreements, sometimes in the form of either offset obligations or ICIP agreements, required under certain contracts. In addition, in 2023 Pratt & Whitney determined that a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100 GTF fleet, which powers the A320neo family of aircraft. This determination and corresponding fleet actions have resulted in, and are expected to continue to result in, significant incremental shop visits necessary to perform inspections on PW1100 GTF engines as compared to estimates prior to this determination. Actual and future estimated aircraft on ground levels for the A320neo family of aircraft have therefore increased. The expected financial impact of the powder metal issue is based on historical experience and is subject to various assumptions and judgments, including, without limitation, the number and expected timing of shop visits, inspection results and scope of work to be performed, turnaround time, availability of parts, available capacity at overhaul facilities, and outcomes of negotiations with impacted customers, and these assumptions are subject to variability. Because of the significance of management’s judgments and estimation processes described above, it is likely that materially different amounts could be recorded if we used different assumptions or if the underlying circumstances were to change. Changes in underlying assumptions, circumstances, or estimates may adversely affect our future results of operations and financial condition.

Significant changes in key estimates and assumptions with respect to our retirement plans, such as discount rate, expected return on plan assets (EROA), and other actuarial factors, could affect our future earnings, equity, and pension contributions. We must determine our pension and other postretirement benefit plans’ expense or income, which involves significant judgment particularly with respect to our discount rate, EROA, and other actuarial assumptions. These assumptions are evaluated annually at December 31 and when significant events require a mid-year remeasurement. They may change significantly due to changes in economic, legislative, regulatory, and/or demographic experience or circumstances. Changes in our assumptions or actual experience that differs from these assumptions, as well as management changes to retirement plans, could impact our pension and postretirement net periodic (income) expense, the plans’ funded status, and/or the required cash contributions to such plans, which could negatively impact our results of operations, financial condition, or liquidity. Our plan assets are invested in accordance with our investment management objectives and are subject to market volatility and other conditions.

Additional tax expense or exposures could affect our future profitability. We are subject to income taxes in the United States and international jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are transactions and calculations where the ultimate tax determination is uncertain. Changes in tax laws and regulations, as well as changes and conflicts in related interpretations and other tax guidance, and fluctuations in taxable income could materially impact our tax receivables and liabilities and our deferred tax assets and deferred tax liabilities, as well as our income tax expense and tax payments. Additionally, in the ordinary course of business, we are subject to examinations by various tax authorities. In addition to ongoing examinations, there could be additional examinations launched in the future by governmental authorities in various jurisdictions, and existing examinations could be expanded. The final determination of tax audits and any related litigation could be materially different from our historical income tax provisions and accruals. Additionally, changes in the geographic mix of our sales could impact our tax liabilities and affect our income tax expense and profitability. The global and diverse nature of our operations means that these risks will continue to exist and additional examinations, proceedings, and contingencies will arise from time to time. Our results of operations, financial condition, or liquidity could be negatively impacted by any of the above factors, the outcome of any one of which cannot be predicted with certainty.

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examinations launched in the future by governmental authorities in various jurisdictions, and existing examinations could be expanded. The final determination of tax audits and any related litigation could be materially different from our historical income tax provisions and accruals. Additionally, changes in the geographic mix of our sales could impact our tax liabilities and affect our income tax expense and profitability. The global and diverse nature of our operations means that these risks will continue to exist and additional examinations, proceedings, and contingencies will arise from time to time. Our results of operations, financial condition, or liquidity could be negatively impacted by any of the above factors, the outcome of any one of which cannot be predicted with certainty.

Goodwill and other intangible assets represent a significant portion of our assets, and any impairment of these assets could negatively impact our results of operations and financial condition. A significant portion of our assets consists of goodwill and other intangible assets, primarily recorded as the result of historical acquisitions or investments in businesses. We may subsequently experience unforeseen events that could adversely affect the value of our goodwill or intangible assets. Our goodwill and indefinite-lived intangible assets are subject to an impairment test annually and are also tested for impairment whenever facts and circumstances indicate that goodwill or indefinite-lived intangible assets may be impaired. In the event of an impairment, any excess of the carrying value of these assets over the fair value must be written off in the period of determination. Finite-lived intangible assets are generally amortized over the useful life of such assets. Future determinations of significant impairments of goodwill or indefinite-lived intangible assets as a result of an impairment test or accelerated amortization of finite-lived intangible assets could have a negative impact on our results of operations and financial condition.

Quarterly cash dividends and share repurchases are subject to uncertainties and may affect our common stock price. Quarterly cash dividends and share repurchases under our share repurchase program generally constitute components of our capital allocation strategy, which we fund through a combination of operating free cash flow, borrowings, and proceeds from divestitures. However, we are not required to declare dividends or make any share repurchases under our share repurchase program. Dividends and share repurchases may be discontinued, accelerated, suspended, or delayed at any time without prior notice. Even if not discontinued, the amount of such dividends and repurchases may be changed, and the amount, timing, and frequency of such dividends and repurchases may vary from historical practice or from the company’s stated expectations. Decisions with respect to dividends and share repurchases are subject to the discretion of our Board of Directors and are based on a variety of factors. ~~Important~~In addition, pursuant to a January 7, 2026 Executive Order, the Secretary of War could seek to limit our ability to pay cash dividends or make share repurchases if the Secretary of War determines that we have underperformed or lacked sufficient prioritization of, investment in or production speed in carrying out / performing under our U.S. government contracts. Other important factors that could cause us to discontinue, limit, suspend, increase, or delay our quarterly cash dividends or share repurchases include market conditions, the price of our common stock, the nature and timing of other investment opportunities, changes in our business strategy, the terms of our financing arrangements, our outlook as to the ability to obtain financing at attractive rates, the impact on our credit ratings, the availability of domestic cash, and overall business expectations. The reduction or elimination of our cash dividend, or suspension or elimination of our share repurchase program could adversely affect the market price of our common stock. Additionally, there can be no assurance that any share repurchases will enhance shareowner value because the market price of our common stock may decline below the levels at which we repurchased shares of common stock, and short-term stock price fluctuations could reduce the program’s effectiveness.

See Item 5. “Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities” in this Form 10-K for a description of our share repurchase program and past share repurchases.

We face certain significant risk exposures and potential liabilities that may not be adequately covered by indemnity or insurance. A significant portion of our business relates to designing, developing, and manufacturing advanced aerospace, defense, and technology systems and products. New technologies may be untested or unproven. In addition, we may incur significant liabilities that are unique to our products and services. In some, but not all, circumstances, we may be entitled to indemnification from our customers through contractual provisions, and we may obtain limitations of liability and additional defenses for various reasons including the qualification of our products and services by the Department of Homeland Security under the SAFETY Act provisions of the Homeland Security Act of 2002. The insurance coverage we maintain or indemnification to which we may be contractually or otherwise entitled may not be adequate to cover all claims or liabilities. Accordingly, we may be forced to bear substantial costs resulting from risks and uncertainties of our business, which would negatively impact our results of operations, financial condition, and liquidity. Any accident, failure of, or defect in our products and services, even if fully indemnified or insured, could negatively affect our reputation among our customers and the public, and make it more difficult for us to compete effectively. It could also affect the cost and availability of insurance in the future.

STRATEGIC INITIATIVE AND TRANSACTION RISKS

We may be unable to realize expected benefits from strategic initiatives. In order to operate more effectively and efficiently, from time to time we undertake strategic and other operational initiatives. For example, we are undergoing significant, multi-year digital transformation initiatives to improve our business, modernize operations, and reduce costs. Under these initiatives, we are leveraging digital capabilities throughout the way in which we conduct our business and provide our products and services to customers, including how we design, build, and maintain our products and services and operate our facilities. We also continue to engage our Customer Oriented Results and Excellence (CORE) operating system to drive continuing improvement into our processes and facilities. In addition, we continue to invest in structural cost reduction in our facilities, including aligning work to more efficient manufacturing centers, implementing advanced manufacturing capabilities including Industry 4.0 digital initiatives and automation, and closing facilities that are not required to meet future capacity and work needs. Other initiatives include the pursuit of advanced technologies and new business acquisitions and subsequent integrations. For example, we continue to invest in the integration of artificial intelligence technologies into our processes and business operations. We realigned our business segment structure in 2023, and we also implement restructuring plans from time to time. Restructuring activities include or may result in workforce reductions, global facility reductions, procurement cost reduction

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year digital transformation initiatives to improve our business, modernize operations, and reduce costs. Under these initiatives, we are leveraging digital capabilities throughout the way in which we conduct our business and provide our products and services to customers, including how we design, build, and maintain our products and services and operate our facilities. We also use our Customer Oriented Results and Excellence (CORE) operating system to drive continuing improvement into our processes and facilities. In addition, we continue to invest in structural cost reduction in our 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. Other initiatives include the pursuit of advanced technologies and new business acquisitions and subsequent integrations. For example, we continue to invest in the integration of artificial intelligence technologies into our processes and business operations. We also implement restructuring plans from time to time. Restructuring activities include or may result in reductions of the workforce, the number of global facilities, procurement costs, legal entity and operational reorganizations, and other cost reduction initiatives. These strategic activities are complex and require the investment of resources including in personnel and systems. If we do not successfully manage our current or future strategic initiatives, expected efficiencies and benefits might be delayed or not realized, and our operations and business could be disrupted. In addition, certain U.S. government contracts and programs have begun to require digital engineering and other digital capabilities, and our inability to achieve these capabilities with respect to these programs timely may result in loss of revenues. Risks associated with workforce management issues include unfavorable political responses to such actions, unforeseen delays in the implementation of anticipated workforce reductions, additional unexpected costs, adverse effects on employee morale, and the failure to meet operational targets due to the loss of employees or work stoppages. Any of the above factors may impair our ability to achieve anticipated benefits, or otherwise harm our business, or have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

Failure to successfully manage and execute potential future acquisitions, investments, divestitures, joint ventures, and other transactions, and other risks associated with these activities could adversely affect our future financial results. In pursuing our business strategies, we continually review, evaluate, and consider potential investments, acquisitions, divestitures, joint ventures, and other teaming and collaborative arrangements. We undertake to identify opportunities that will complement our existing products and services or customer base, as well as expand our offerings and business opportunities into new areas that naturally extend from our core capabilities. In evaluating such transactions, we are required to make difficult judgments regarding the value of business opportunities, technologies, and other assets, and the risks and cost of potential liabilities. Further, these transactions involve certain other risks and uncertainties including: (1) the risks involved with entering new markets; (2) the difficulty in integrating newly-acquired businesses and managing or monitoring other collaborative business arrangements; (3) the complexity of separating a portion of our business to enable a divestiture; (4) the risk that we may be unable to execute potential transactions, if at all, within the expected timeline, on acceptable financial or other terms and conditions; (5) continued financial involvement in divested businesses, such as through continued equity ownership, guarantees, retained assets or liabilities, transition services or other ongoing commercial commitments, indemnities, or other current or contingent financial or commercial commitments, following a divestiture; (56) challenges and failures in achieving strategic objectives and other expected benefits, which may result in certain liabilities to us for guarantees and other commitments; (67) the risk that regulatory authorities may deny our proposed transactions, or may impose on those transactions conditions that undermine the strategic rationale, reduce the financial benefit of, or jeopardize the consummation of those transactions; (78) unidentified issues not discovered in RTX’s due diligence; (89) the diversion of our attention and resources from our operations and other initiatives; (910) the potential impairment of acquired assets; (1011) the performance of underlying products, capabilities, or technologies; and (1112) the performance or potential loss of key employees and customers of acquired businesses. In addition, future transactions may impact our deployment of capital, including dividends, share repurchases, pension contributions, and investments. In particular, if we are unable to complete the pending divestiture of Collins’ actuation and flight controls business within our expected timeframe or at all, we may be unable to reduce our outstanding debt according to planned timeframes.

If either distribution of the stock of Carrier or Otis, together with certain related transactions, were to fail to qualify as a transaction that is generally tax-free, including as a result of subsequent acquisitions of our stock (including pursuant to the Raytheon merger), we could be subject to significant tax liabilities. On April 3, 2020, United Technologies Corporation (UTC) completed the separation of UTC’s business into three independent, publicly traded companies (UTC, Carrier Global Corporation (Carrier) and Otis Worldwide Corporation (Otis)) (the Separation Transactions). UTC distributed all of the outstanding shares of Carrier common stock and all of the outstanding shares of Otis common stock to UTC shareowners who held shares of UTC common stock as of the close of business on March 19, 2020, the record date for the distributions (the Distributions) effective at 12:01 a.m., Eastern Time, on April 3, 2020. We received (1) a private letter ruling from the Internal Revenue Service (IRS) regarding certain U.S. federal income tax matters relating to the Separation Transactions and Distributions and (2) an opinion of outside counsel regarding the qualification of certain elements of the Distributions under Section 355 of the Code. Although we intend for the Distributions generally to be tax-free for U.S. federal income tax purposes, there can be no assurance that they will so qualify. Even if the Distributions were to otherwise qualify as tax-free transactions under Sections 355 and 368(a)(1)(D) of the Code, either Distribution or both Distributions may result in taxable gain to us (but not our stockholders) under Section 355(e) of the Code if such Distribution(s) were deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, shares representing a 50% or greater interest (by vote or value) in shares of Carrier, Otis, or us, as applicable. If the IRS were to determine that any post-Distribution acquisitions of Carrier stock, Otis stock, or our stock, as applicable, pursuant to such a plan (when aggregated with any pre-Distribution acquisitions of Carrier stock, Otis stock, or our stock, as applicable, pursuant to such a plan) would represent a 50% or greater interest in shares of Carrier, Otis, or us, as applicable, such determination could result in significant tax liabilities to us. For purposes of this test, even if the Raytheon merger were treated as part of such plan, it did not result in an acquisition of a 50% or greater interest in us. Any such tax liabilities imposed on us may adversely affect an investment in us. In addition, we obtained tax rulings in certain non-U.S. jurisdictions and/or opinions of external tax advisors, in each case, regarding the tax treatment of certain Separation Transactions. Notwithstanding the receipt of such tax rulings and opinions, there can be no assurance that the relevant taxing authorities will not assert that the tax treatment of the relevant Separation

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Transactions differs from the conclusions reached therein. In the event the relevant taxing authorities prevail with any challenge in respect of any relevant Separation Transaction, we would be subject to significant tax liabilities, which may adversely affect an investment in us. Further, under a tax matters agreement that we entered into with Carrier and Otis in connection with the Separation Transactions and Distributions, each of Carrier and Otis generally is required to indemnify us for certain taxes we may incur resulting from the Separation Transactions and/or the Distributions failing to qualify for the intended tax treatment. In addition, under the tax matters agreement, each of Carrier and Otis is responsible for (i) a specified portion of any installment payment we are required to make pursuant to Section 965(h)(2) of the Code and (ii) specified taxes that exclusively relate to the Carrier business or the Otis business, as applicable. The amount of any such taxes for which we would be responsible may be significant, and if we were unable to obtain indemnification payments from Carrier or Otis to which we are entitled under the tax matters agreement and/or other agreements entered into in connection with the Separation Transactions and the Distributions, we would incur significant losses.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

As a global aerospace and defense company serving commercial and government customers in the aerospace industry and domestic and international military and government customers as a defense contractor, we are the target of advanced and persistent cyber-attacks from a variety of sources. Our products and services are highly sophisticated and specialized, involve complex advanced technologies including information technology (IT) systems, and process, store, or transmit highly sensitive unclassified and classified information. Moreover, our products and services are often integrated with third-party products and services. Cybersecurity threats include attacks on, or other attempts to infiltrate, our IT infrastructure and the IT infrastructure of our customers, suppliers, subcontractors, and other third parties, attempting to gain unauthorized access to our confidential or other proprietary information, classified information, or information relating to our employees, customers, and other third parties, or to disrupt our systems or the systems of our customers, suppliers, subcontractors, and other third parties. Cybersecurity threats also include attempts to infiltrate our products or services, such as attacks targeting the security, confidentiality, integrity or availability of the hardware, software and information installed, stored, or transmitted in our products, which may occur after the purchase of those products or when they are incorporated into third-party products, facilities, or infrastructure.

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Cybersecurity threats also include attempts to infiltrate our products or services, such as attacks targeting the security, confidentiality, integrity or availability of the hardware, software and information installed, stored, or transmitted in our products, which may occur after the purchase of those products or when they are incorporated into third-party products, facilities, or infrastructure.

Our Cybersecurity Program

Given the nature of our business and the cybersecurity risks we face, we have a robust cybersecurity program for identifying, assessing, and managing cybersecurity risks, which include material risks from cybersecurity threats, to our internal systems, our products, services and programs for customers, and our supply chain. Our cybersecurity program is made up of two components: our enterprise cybersecurity program and our cybersecurity program for our products and services.

Enterprise Cybersecurity. Our enterprise cybersecurity program aligns with the National Institute of Standards and Technology (NIST) standards. Our program includes processes and controls for the deployment of new IT systems by the Company and controls over new and existing system operation. We monitor and conduct regular testing of these controls and systems, including vulnerability management through active discovery and testing to regularly assess patching and configuration status. In addition, we require our employees and contract workers to complete annual cybersecurity training, and we regularly conduct simulated phishing and cyber-related communications to educate individuals on the latest threats.

Product and Services Cybersecurity. Our product development processes apply development, security, and operations principles aligned with applicable government and commercial standards, and include vulnerability scanning and static and dynamic composition analysis. We regularly assess our product development processes, product cyber maturity, and the teams providing our secure services in relation to cybersecurity. In addition, we strive to meet all security requirements mandated by government and commercial customers and adhere to regulatory guidance and standards for system security engineering. Many of our products also undergo industry audits and regulatory compliance certifications, and our products delivered to the U.S. Department of ~~Defense~~War (~~DoD~~DoW) (formerly referred to as the U.S. Department of Defense) must comply with ~~DoD~~DoW risk management requirements.

Cybersecurity for Systems used in Support of U.S. Government Customers. With respect to products and services provided to, and IT systems used in connection with programs for, the U.S. government, our cybersecurity program aligns with the NIST standards and meets the requirements of 32 CFR Part 117 and other applicable U.S. government guidance. The program includes authorization and assessment of new and existing IT systems by our customers and third parties. We monitor use on these systems, including vulnerability management through patching and configuration. In addition, we restrict user access and require authorized users to complete additional user and cybersecurity training.

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Incident Response. Our cybersecurity program includes monitoring for potential security threats that may lead to exploitation of vulnerabilities. We evaluate and assign severity levels to incidents, escalate and engage incident response teams based on severity, and manage and mitigate the related risks. Incidents are reported internally to members of senior management and the Board of Directors as appropriate based on severity and incident type and are also analyzed for external reporting requirements. Our incident management process is designed to coordinate functions to enable continuity of essential business operation in the event of a cyber crisis.

Third-Party Service Providers. We engage third party service providers to expand the capabilities and capacity of our cybersecurity program, including for design, monitoring, and testing of the program’s risk prevention and protection measures, and process execution including incident detection, investigation, analysis and response, eradication, and recovery.

Management of Third-Party Risks. Our suppliers, subcontractors, and other third-party service providers are subject to cybersecurity obligations and controls. We assess and periodically reassess the cybersecurity posture of third-party service providers who store, process, or transmit our information as a service, or connect to our networks. We also require our suppliers, subcontractors, and other third-party service providers to agree to cybersecurity-related contractual terms and conditions of purchase. Many of these third parties are also subject to regulatory requirements in mandatory government procurement clauses, including those contained in the Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS). Among other things, mandatory government procurement clauses obligate adherence to a generally accepted cybersecurity framework, such as NIST, and occasional assessment of the implementation of cybersecurity controls as a condition of contract award or during contract performance. Finally, we require these third parties to notify us of cybersecurity incidents that impact us.

Program Assessment. We continuously evaluate and seek to improve and mature our cybersecurity processes. Our cybersecurity program is regularly assessed through management self-evaluation and ongoing monitoring procedures to evaluate our program effectiveness, including assessments associated with internal controls over financial reporting as well as vulnerability management through active discovery and testing to validate patching and configuration. Additionally, our Internal Audit function regularly assesses our program effectiveness through audits of our systems and processes to help maintain compliance with policies. As cybersecurity threats are continuously evolving, we also periodically engage with third parties to perform maturity assessments of our program to identify potential risk areas and improvement opportunities. This includes assessment of our overall program, policies and processes, compliance with regulatory requirements, and assessment of key vulnerabilities. We use these assessments to supplement our own evaluation of the overall health of our program and target improvement areas. Several external organizations also evaluate our enterprise cybersecurity program, including the Defense Contract Management Agency (DCMA) and Cybersecurity Maturity Model Certification Third-Party Assessment Organization. Moreover, some of our products are audited or reviewed for regulatory compliance certification pursuant to the relevant DoD risk management framework.

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maintain compliance with policies. As cybersecurity threats are continuously evolving, we also periodically engage with third parties to perform maturity assessments of our program to identify potential risk areas and improvement opportunities. This includes assessment of our overall program, policies and processes, compliance with regulatory requirements, and assessment of key vulnerabilities. We use these assessments to supplement our own evaluation of the overall health of our program and target improvement areas. Several external organizations also evaluate our enterprise cybersecurity program, including the Defense Contract Management Agency (DCMA) and Cybersecurity Maturity Model Certification Third-Party Assessment Organizations. Moreover, some of our products are audited or reviewed for regulatory compliance certification pursuant to the relevant DoW risk management framework.

Board Oversight and Management’s Role

Enterprise Cybersecurity. Our Board of Directors has primary oversight responsibility for enterprise cybersecurity risks. The Special Activities Committee of the Board supports the Board in oversight of classified business cybersecurity, including with respect to Company internal information and operational technology systems. The Audit Committee also considers enterprise cybersecurity risks in connection with its financial and compliance risk oversight role.

Our global chief information security officer (CISO), under the direction of our chief digital officer, leads our enterprise cybersecurity program and is responsible for assessing and managing enterprise cybersecurity risks. Our CISO regularly updates the Board of Directors on cybersecurity risks as they relate to our information and operational technology systems, our suppliers, and other third-party service providers, in addition to updates on enterprise cybersecurity incidents and key Company defenses and mitigation strategies.

Our CISO is an experienced cybersecurity senior executive with more than 25 years’ experience building and leading cybersecurity, risk management, and IT teams. In performing his role, he regularly reviews enterprise cybersecurity risks, controls, program policy, and processes, including training, oversees policy and program development, implementation and updates, and informs senior leadership on cybersecurity-related issues and activities affecting the organization. Our CISO is regularly apprised of enterprise cybersecurity events, threats, and activities, including with respect to incidents, protection vulnerabilities, software update needs, and lifecycle status.

Product and Services Cybersecurity. The Special Activities Committee of our Board of Directors has primary oversight responsibility for cybersecurity risks related to our products and services. The full Board of Directors also receives periodic briefings from management regarding the Company’s products and services cybersecurity risks. The Audit Committee also considers product and services cybersecurity risks in connection with its financial and compliance risk oversight role.

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Our product cybersecurity officer (PCO), under the direction of our chief technology officer, leads our cybersecurity program for our products and services and is responsible for assessing and managing related cybersecurity risks. Our PCO updates the Special Activities Committee on cybersecurity risks as they relate to our products and services, in addition to updates on product and service cybersecurity incidents, defenses, and mitigation strategies.

Our PCO is an experienced embedded systems engineer and chief engineer with ~~nearly~~ 20 years’ experience in the development, product assurance, and security of critical and highly regulated embedded and other computer systems in medical, aviation, and military products and services. In performing her role, she regularly reviews cybersecurity risks, controls, program policy and processes, including training, and oversees and advises teams performing policy and program development, implementation, and updates. Our PCO is regularly apprised of product and service cybersecurity events, threats, and activities including with respect to incidents, protection vulnerabilities, software update needs, and lifecycle status.

Enterprise Risk Management

Our cybersecurity risk processes are a key element of our Enterprise Risk Management (ERM) process, which is designed to identify and evaluate the full range of significant risks to RTX. As part of our ERM program, RTX’s functional and operations departments identify and manage enterprise risks on an annual cycle. The process consists of structured reviews, discussions, and mitigation planning, and includes risks identified by our Enterprise Cybersecurity and Product Cybersecurity functions as part of the overall review of significant risks to RTX. The top ERM risks are compiled annually and shared with the Audit Committee of the Board of Directors as well as the full Board of Directors. In addition, Internal Audit incorporates these risks into its continuous risk assessment process and periodically audits specific ERM risks.

For more information on risks related to cybersecurity, see Item IA. “Risk Factors” of this Form 10-K.

ITEM 2. PROPERTIES

We have significant properties in approximately 25 countries, with approximately 450 significant properties comprising approximately 75 million square feet of productive space. Approximately 30% of our square footage related to our significant ~~properties is leased, and 70% is owned. Approximately 70% of our square footage related to our significant properties is located in the United States.~~

Our fixed assets as of December 31, 2024 include manufacturing facilities and non-manufacturing facilities such as warehouses, laboratories, office space, and a substantial quantity of machinery and equipment, including general purpose machinery and equipment using special jigs, tools, and fixtures and in many instances having automatic control features and special adaptations. The facilities, warehouses, machinery, and equipment in use as of December 31, 2024 are in good operating condition and are well-maintained.29

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properties is leased, and 70% is owned. Approximately 70% of our square footage related to our significant properties is located in the United States.

Our fixed assets as of December 31, 2025 include manufacturing facilities and non-manufacturing facilities such as warehouses, laboratories, office space, and a substantial quantity of machinery and equipment, including general purpose machinery and equipment using special jigs, tools, and fixtures and in many instances having automatic control features and special adaptations. The facilities, warehouses, machinery, and equipment in use as of December 31, 2025 are in good operating condition and are well-maintained.

ITEM 3. LEGAL PROCEEDINGS

We are subject to a number of lawsuits, investigations, and claims (some of which involve substantial amounts). For a discussion of contingencies related to certain legal proceedings, see “Note 17: Commitments and Contingencies” within Item 8 of this Form 10-K. Except as otherwise noted, while we are unable to predict the final outcome, based on information currently available, we do not believe that resolution of any of these matters will have a material adverse effect upon our competitive position, results of operations, financial condition, or liquidity.

A further discussion of government contracts and related investigations, as well as a discussion of our environmental liabilities, can be found under the heading “Other Matters Relating to Our Business” within Item 1. “Business” of this Form 10-K and in Item 1A. “Risk Factors” of this Form 10-K.

Pursuant to the Securities and Exchange Commission (SEC) regulations, for proceedings under environmental laws to which a government authority is a party and we reasonably believe such proceedings will result in monetary sanctions, we have adopted a disclosure threshold of $1 million.

Environmental Enforcement Proceeding

The Colorado Department of Public Health and Environment (CDPHE) issued a Notice of Violation/Cease and Desist Order (NOV/CDO) to Raytheon Company on January 31, 2023, alleging violations of a water discharge permit at a former Raytheon Company facility in Boulder, Colorado. On March 27, 2024, the CDPHE informed Raytheon Company that it iswas seeking a penalty in the amount of approximately $1 million in connection with the alleged violations and iswas requiring Raytheon Company to undertake a compliance program. In order to resolve the NOV/CDO, on October 6, 2025, Raytheon Company issigned ~~contesting~~a Compliance Order on Consent (COC) with the ~~alleged~~CDPHE ~~violations~~under which, without any admission of fault or liability, it agreed to pay $458,211 in civil penalties and to perform certain remediation work at the ~~penalty~~former ~~demand,~~facility under an agreed upon compliance schedule. Raytheon Company paid the civil penalties in the fourth quarter of 2025.

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and has the right to appeal the NOV/CDO and any associated penalty. We do not expect liability related to this matter to have a material adverse impact on our results of operations, financial condition, or liquidity.

737 MAX Aircraft Litigation

Multiple lawsuits ~~have~~were ~~been~~ filed in U.S. courts relating to the October 29, 2018 Lion Air Flight 610 and the March 10, 2019 Ethiopian Airlines Flight 302 accidents. Collins Aerospace (Collins) sold certain aircraft parts and systems to The Boeing Company for the 737 MAX aircraft involved in these accidents. Certain of our Collins businesses ~~have~~were ~~been~~ named, along with other third parties, as parties in many of these lawsuits. WeAll ~~have~~lawsuits ~~also~~related ~~fully~~to ~~supported~~the ~~all~~Lion ~~governmental~~Air ~~investigations~~flight ~~and~~have ~~inquiries~~been ~~relating~~resolved, toand the ~~accidents~~Collins businesses have obtained a full release. WeOnly doone ~~not~~lawsuit ~~expect~~related ~~that~~to the ~~lawsuits~~Ethiopian orAirlines ~~governmental~~flight ~~investigations~~remains orpending, ~~inquiries~~and ~~will~~we ~~have~~anticipate aduring ~~material~~2026 ~~adverse~~the ~~effect~~lawsuit onwill ~~our~~either ~~results~~be ofresolved ~~operations,~~or ~~financial~~the ~~condition,~~claims oragainst ~~liquidity~~the Collins businesses will be dismissed.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

RTX Corporation’s common stock is listed on the New York Stock Exchange under the ticker symbol “RTX.” There were 3735,~~447~~327 registered shareowners at December 31, ~~2024~~2025. The information required by Item 5 with respect to securities authorized for issuance under equity compensation plans is contained within Item 12 of this Form 10-K.

Stock Performance Graph

The following graph presents the cumulative total shareowner return for the five years ending December 31, ~~2024~~2025 for our common stock as compared to the Standard & Poor’s 500 Stock Index and the S&P 500 Aerospace & Defense (A&D) Index. These figures assume that all dividends paid over the five-year period were reinvested, and that the starting value of each index and the investment in common stock was $100.00 on December 31, ~~2019~~2020.

Comparison of Cumulative Five Year Total Return

	Annual Return PercentageYears Ending
Company/Index	12/31/~~2020~~2021	12/31/~~2021~~2022	12/31/~~2022~~2023	12/31/~~2023~~2024	12/31/~~2024~~2025
RTX Common Stock	~~(16~~23.~~73)~~27	2320.2701	20(14.0144)	~~(14~~40.~~44)~~76	4061.7644
S&P 500 Index	1828.4071	28(18.7111)	~~(18~~26.~~11)~~29	2625.2902	2517.0288
S&P 500 Aerospace & Defense Index	~~(16~~13.~~06)~~22	1317.2237	176.3777	614.7740	1441.4098

Indexed ReturnsYears Ending

Company/Index

Base Period 12/31/~~2019~~2020

12/31/~~2020~~2021

12/31/~~2021~~2022

12/31/~~2022~~2023

12/31/~~2023~~2024

12/31/~~2024~~2025

RTX Common Stock

100.00

83123.27

~~102~~147.6594

~~123~~126.1958

~~105~~178.4117

~~148~~287.3764

S&P 500 Index

100.00

~~118~~128.4071

~~152~~105.3940

~~124~~133.7910

~~157~~166.5940

~~197~~196.0216

S&P 500 Aerospace & Defense Index

100.00

83113.9422

95132.0389

~~111~~141.5488

~~119~~162.0931

~~136~~230.2445

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Issuer Purchases of Equity Securities

The following table provides information about our purchases of equity securities that are registered by us pursuant to Section 12 of the Exchange Act during the quarter ended December 31, ~~2024~~2025.

2024

Total Number of Shares Purchased(000’s)

Average Price Paid per Share

Total Number of Shares Purchased as Part of a Publicly Announced Program(000’s)

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(dollars in millions)

2025

Total Number of Shares Purchased(000’s)

Average Price Paid per Share

Total Number of Shares Purchased as Part of a Publicly Announced Program(000’s)

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(dollars in millions)

October 1 - October 31

—

~~715~~615

November 1 - November 30

~~416~~—

~~120.05~~—

~~416~~—

~~665~~615

December 1 - December 31

—

~~665~~615

Total

~~416~~—

~~120.05~~—

~~416~~—

On October 21, 2023, our Board of Directors authorized a share repurchase program for up to $11 billion of our common stock, replacing the previous program announced on December 12, 2022. Under the 2023 program, shares may be purchased on the open market, in privately negotiated transactions, under accelerated share repurchase programs, and under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended.

OnWe ~~October~~may ~~24,~~also ~~2023,~~reacquire ~~we entered into accelerated share repurchase (ASR) agreements with certain financial institution counterparties to repurchase~~ shares ofoutside ~~our common stock for an aggregate purchase price~~ of ~~$10~~the ~~billion.~~program ~~The~~in ~~ASR~~connection ~~agreements~~with ~~provided for~~ the ~~repurchase~~surrender of ~~our~~shares ~~common~~to ~~stock~~cover ~~based~~taxes on ~~the~~vesting ~~average~~ of ~~the~~restricted ~~daily volume-weighted average prices of our common~~ stock. ~~during~~Our ~~the~~ability ~~term~~to ofrepurchase ~~such~~shares ~~ASR~~is ~~agreements, less a discount and~~ subject to ~~adjustments~~applicable ~~pursuant to the terms and conditions of the ASR agreements~~law. ~~Pursuant~~During to the ~~ASR~~quarter ~~agreements,~~ended ~~we made aggregate payments of $10 billion on October 26~~December 31, ~~2023~~2025, ~~and~~we ~~received~~did ~~initial~~not ~~deliveries~~repurchase ~~of approximately 108.4 million~~ shares ofoutside ~~our common stock at a price~~ of ~~$78.38 per share, which, on that date, represented approximately 85% of~~ the ~~shares expected to be repurchased~~program.

The shares associated with the remaining portion of the aggregate purchase price have been settled over two tranches. In July 2024, the first tranche was settled upon final delivery to us of 0.4 million shares of common stock. In September 2024, with respect to the second tranche, we owed 2.2 million shares of common stock that we elected to cash settle for $261 million. The cash payment required as a result of the second tranche settlement was due to the significant increase in the price of our common stock during the ASR term. The final average price under the ASR was $94.28 per share.

We may also reacquire shares outside of the program in connection with the surrender of shares to cover taxes on vesting of restricted stock. Our ability to repurchase shares is subject to applicable law. During the quarter ended December 31, 2024, we did not repurchase shares outside of the program.

ITEM 6.

Reserved.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to provide information to the reader in understanding our consolidated financial statements and notes thereto included in Item 8. “Financial Statements and Supplementary Data” of this Form 10-K, the changes in certain key items in those financial statements between select periods, and the primary factors that accounted for those changes. In addition, we discuss certain accounting principles, policies, and critical estimates that affect our financial statements. Our discussion also contains some additional context regarding our business, including industry considerations and the business environment, as well as certain forward-looking statements related to future events and expectations. This MD&A should be read in conjunction with the other sections of this Form 10-K, including Item 1A. “Risk Factors.”

BUSINESS OVERVIEW

We are a global premier systems provider of high technology products and services to the aerospace and defense industries. We operate in three principal business segments: Collins Aerospace (Collins), Pratt & Whitney, and Raytheon. Unless the context otherwise requires, the terms “we,” “our,” “us,” “the Company,” and “RTX” mean RTX Corporation and its subsidiaries. References to “Raytheon Company” mean Raytheon Company, which became a wholly owned subsidiary of RTX on April 3, 2020 through an all-stock merger transaction between United Technologies Corporation and Raytheon Company (the surviving company of which is RTX Corporation).

Industry Considerations

Our worldwide operations can be affected by industrial, economic, and political factors on both a regional and global level. Our operations include original equipment manufacturer (OEM) and extensive related aftermarket parts and services related to our aerospace operations. Our defense business serves both domestic and international customers primarily as a prime contractor or subcontractor on a broad portfolio of defense and related programs for government customers. Our business mix also reflects the combination of shorter cycles in our commercial aerospace spares contracts and certain service contracts in our defense business, and longer cycles in our aerospace OEM and aftermarket maintenance contracts and on our defense contracts to design, develop, manufacture, or modify complex equipment. Our customers are in the public and private sectors, and our businesses reflect an extensive geographic diversification that has evolved with continued globalization.

Government legislation, policies, and regulations can impact our business and operations. Changes in environmental and climate change-related laws or regulations, including regulations on greenhouse gas emissions, carbon pricing, and energy taxes, could lead to new or additional investment in product designs and facility upgrades and could increase our operational and environmental compliance expenditures, including increased energy and raw materials costs and costs associated with manufacturing changes. In addition, government and industry-driven safety and performance regulations, restrictions on aircraft engine noise and emissions, government imposed travel restrictions, and government procurement practices can impact our businesses.

Collins and Pratt & Whitney serve both commercial and government aerospace customers. Revenue passenger miles (RPMs), available seat miles, and the general economic health of airline carriers and airframers, as well as the financial strength and performance of airframers, are key barometers for our commercial aerospace operations. Performance in the general aviation sector is closely tied to the overall health of the economy and is positively correlated to corporate profits. Many of our aerospace customers are covered under long-term aftermarket service agreements at both Collins and Pratt & Whitney, which are inclusive of both spare parts and services.

Our defense operations are affected by U.S. Department of ~~Defense~~War (~~DoD~~DoW) (formerly referred to as the U.S. Department of Defense) budget and spending levels, changes in demand, changes in policy positions or priorities, the domestic and global political and economic environment, and the evolving nature of the global and national security threat environment. In addition, our defense businesses engage in both direct commercial sales, which generally require U.S. government licenses and approvals, as well as foreign military sales, which are government-to-government transactions initiated by, and carried out at the direction of, the U.S. government. Changes in these budget and spending levels, policies, or priorities, which are subject to U.S. domestic and foreign geopolitical risks and threats, may impact our defense businesses, including the timing of and delays in U.S. government licenses and approvals for sales, the risk of sanctions, or other restrictions.

Other Matters

Global, economic, and political conditions, changes in raw material and commodity prices and supply, labor availability and costs, inflation, interest rates, potential changes in U.S. government policy positions, including changes in ~~DoD~~DoW policies or priorities, geopolitical conflicts and strained intercountry relations, U.S. and non-U.S. tax law changes, foreign currency exchange rates, sanctions, tariffs, energy costs and supply, levels of air travel, the financial condition of commercial airlines, and the impact from natural disasters and weather conditions create uncertainties that could impact our businesses.

36Legal Matters. As previously disclosed, in 2024 the Company resolved several outstanding legal matters, herein referred to as “Resolution of Certain Legal Matters.” See “Note 17: Commitments and Contingencies,” within Item 8 of this Form 10-K, for additional information.

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~~Legal~~Pratt ~~Matters.~~& AsWhitney ~~previously~~Powder ~~announced,~~Metal ~~in 2024 the Company resolved several outstanding legal matters, herein referred to as “Resolution of Certain Legal Matters~~Matter.” ~~The~~As ~~Company~~described ~~entered~~further into a deferred prosecution agreement (DPA) (DPA-1) with the Department of Justice (DOJ) and the Company settled an administrative proceeding with the Securities and Exchange Commission (SEC) (the SEC Administrative Order) to resolve the previously disclosed criminal and civil government investigations into payments made by Raytheon Company and its joint venture, Thales-Raytheon Systems (TRS), in ~~connection~~“Note 17: ~~with~~Commitments ~~certain Middle East contracts since 2012 (Thales-Raytheon Systems~~ and Related Matters). The Company also entered into a DPA and a False Claims Act (FCA) settlement agreement with the DOJ to resolve previously disclosed criminal and civil government investigations into defective pricing claims for certain legacy Raytheon Company contracts entered into between 2011 and 2013 and in 2017 (DOJ Investigation and Contract Pricing Disputes). Under these DPAs and the SEC Administrative OrderContingencies,” ~~Raytheon~~within ~~Company~~Item ~~and~~8 the Company are required to retain, among other things, an independent compliance monitor satisfactory to the DOJ and the SEC (for a term ending three years from the date on which the monitor is engaged) and are required to undertake certain cooperation and disclosure obligations (for a term commencing on the effective date of ~~DPA-1~~this ~~and~~Form ~~the SEC Administrative Order~~10-K, as applicable, and ending three years from the date on which the monitor is engaged). The compliance monitor will oversee Raytheon Company’s and the Company’s compliance with their respective obligations under the DPAs and the SEC Administrative Order. The DPAs further provide that, in ~~the event the DOJ~~2023, inPratt ~~its~~& ~~sole~~Whitney ~~discretion,~~determined ~~determines during the period of deferral of prosecution~~ that Raytheon Company or the Company have violated any provision of either DPA, Raytheon Company or the Company may be subject to prosecution for any federal criminal violation, including the charges against Raytheon Company in the relevant DPA. The SEC Administrative Order further provides that, in the event of a ~~breach~~rare ofcondition the SEC Administrative Order, the SEC may vacate the SEC Administrative Order and institute proceedings against the Company. In the event of any such determination or breach, the Company may face additional adverse impacts. In addition, the Company resolved certain voluntarily disclosed export controls violations primarily identified in ~~connection~~powder ~~with~~metal ~~the~~used ~~integration of Rockwell Collins and,~~ to amanufacture ~~lesser extent, Raytheon Company, including~~ certain ~~violations~~engine ~~that~~parts ~~were resolved pursuant to a Consent Agreement (CA) with the Department of State (DOS) (Trade Compliance Matters). The CA, which has a three-year term,~~ requires ~~the~~accelerated ~~Company~~inspection ~~to implement remedial compliance measures and to conduct an external audit~~ of the ~~Company’s~~PW1100G-JM ~~International Traffic in Arms Regulations~~ (~~ITAR~~PW1100) ~~compliance~~Geared ~~program.~~Turbofan ~~The CA also requires appointment of an external, independent Special Compliance Officer~~ (~~SCO~~GTF). ~~The Company appointed its SCO on September 27~~fleet, ~~2024.~~which Aspowers ~~a result of~~ the ~~DPAs,~~A320neo ~~SEC~~family ~~Administrative Order, FCA settlement agreement and CA, we recorded a combined pre-tax charge~~ of ~~$918 million~~aircraft ~~during the second quarter of 2024, which included $269 million related to the DOJ Investigation and Contract Pricing Disputes~~ (~~in addition to amounts previously accrued~~A320neo), ~~$364 million related to Thales-Raytheon Systems and Related Matters~~ (inherein ~~addition~~referred to ~~amounts~~as ~~previously accrued), and $285 million related to Trade Compliance Matters. In~~ the ~~fourth quarter we made payments of $580 million related to the DOJ Investigation and Contract Pricing Dispute and $384 million related to Thales-Raytheon Systems and Related Matters. See~~ “~~Note 17:~~Powder ~~Commitments~~Metal ~~and Contingencies~~Matter” ~~within Item 8 of this Form 10-K for additional information~~).

~~Pratt~~Global &Supply ~~Whitney~~Chain. ~~Powder~~We ~~Metal~~are ~~Matter.~~dependent Inon ~~2023,~~a ~~Pratt~~global &supply ~~Whitney~~chain ~~determined~~and ~~that~~have aexperienced ~~rare~~supply ~~condition~~chain disruptions that resulted in ~~powder~~delays ~~metal~~and ~~used~~increased costs and adversely affected our performance. These disruptions impacted our ability to ~~manufacture~~procure raw materials, including certain ~~engine~~rare ~~parts~~earth ~~requires~~elements, ~~accelerated~~microelectronics, ~~inspection~~and ofcertain ~~the~~commodities ~~PW1100G-JM~~on ~~(PW1100)~~a ~~Geared~~timely ~~Turbofan~~basis ~~(GTF)~~and/or ~~fleet~~at expected prices, ~~which~~and ~~powers~~are ~~the~~driven ~~A320neo~~by ~~family~~supply chain market constraints and macroeconomic conditions, including inflation and labor market shortages. Current geopolitical conditions, including conflicts and other causes of ~~aircraft~~strained ~~(A320neo)~~intercountry ~~(herein~~relations, ~~referred~~as towell as ~~the~~sanctions ~~“Powder~~and ~~Metal~~other ~~Matter”)~~trade restrictive activities, such as tariffs and export controls, are contributing to these issues. ~~See~~Furthermore, ~~“Note 17:~~our ~~Commitments~~suppliers and ~~Contingencies”~~subcontractors ~~within~~have ~~Item~~been 8impacted by these same issues. We have implemented actions and programs to mitigate some of ~~this~~the ~~Form~~impacts ~~10-K~~but ~~for~~anticipate ~~additional~~supply ~~information~~chain disruptions to continue.

~~Global~~Economic ~~Supply Chain~~Environment. WeThe ~~are~~inflationary ~~dependent~~environment onhas aincreased ~~global~~material ~~supply~~and ~~chain~~component prices, labor rates, and ~~have~~supplier ~~experienced~~costs ~~supply~~and ~~chain~~has ~~disruptions~~negatively ~~that~~impacted ~~resulted~~our inperformance, ~~delays~~including our productivity expectations. Due to the nature of our government and ~~increased~~commercial ~~costs~~aerospace businesses, and ~~adversely~~their ~~affected~~respective ~~our~~customer ~~performance.~~and ~~These~~supplier ~~disruptions~~contracts, ~~impacted~~we ~~our~~are ~~ability~~not always able to ~~procure~~offset ~~raw~~cost ~~materials~~increases by increasing our contract value or pricing, ~~microelectronics~~in particular on our fixed-price contracts. Increasing material, component, and ~~certain~~labor ~~commodities~~prices oncould asubject ~~timely~~us ~~basis~~to losses in our fixed price contracts in the event of cost overruns. In addition, higher interest rates have increased the cost of borrowing and~~/or~~ attightened ~~expected~~the ~~prices~~availability of capital. Among other things, these effects can constrain our customers’ purchasing power and ~~are~~decrease ~~driven~~orders byfor ~~supply~~our ~~chain~~products ~~market~~and ~~constraints~~services and ~~macroeconomic~~impact ~~conditions,~~the ~~including~~ability ~~inflation~~of our customers to make payments and ~~labor~~our ~~market~~suppliers ~~shortages~~to perform. ~~Current~~Moreover, ~~geopolitical~~changes ~~conditions~~in the macroeconomic environment, including ~~conflicts~~volatility with respect to global trade policy, interest rates, and ~~other~~financial ~~causes~~markets, ofcan ~~strained~~lead ~~intercountry~~to ~~relations~~economic uncertainty, an economic downturn or recession and impact the demand for our products and services as well as ~~sanctions~~our ~~and~~supply ~~other~~chain. ~~trade~~We ~~restrictive~~continue ~~activities,~~to ~~are~~pursue ~~contributing~~strategic and operational initiatives to help address these ~~issues.~~macroeconomic ~~Furthermore~~pressures, including our ~~suppliers~~digital ~~and~~transformation, ~~subcontractors~~operational ~~have~~modernization, ~~been~~cost ~~impacted~~reduction, byand ~~these~~advanced ~~same~~technology ~~issues.~~programs, Weand ~~have~~we ~~implemented~~apply ~~actions~~our Customer Oriented Results and ~~programs~~Excellence (CORE) operating platform to ~~mitigate~~the ~~some~~execution of these initiatives. However, the ~~impacts~~impact ~~but~~of ~~anticipate~~these ~~supply~~pressures ~~chain~~and ~~disruptions~~corresponding initiatives is uncertain and subject to ~~continue~~a range of factors and future developments.

~~Economic Environment.~~ The ~~inflationary~~global trade environment ~~has~~is ~~increased~~highly ~~material~~dynamic. ~~and~~Since ~~component~~February ~~prices~~2025, ~~labor~~the ~~rates,~~U.S. ~~and~~government ~~supplier~~has ~~costs~~imposed ~~and~~tariffs ~~has~~on ~~negatively~~imports ~~impacted~~from ~~our~~all ~~performance,~~countries ~~including~~with ~~our~~which ~~productivity~~the ~~expectations~~U.S. ~~Due~~engages toin ~~the~~trade. ~~nature~~In ofresponse, ~~our~~certain ~~government~~countries have announced, and ~~commercial~~in ~~aerospace~~some ~~businesses~~cases imposed, tariffs, and ~~their~~non-tariff ~~respective~~countermeasures ~~customer~~on goods that are imported from the U.S. Our businesses and ~~supplier~~suppliers ~~contracts~~import goods subject to U.S. imposed tariffs, weas ~~are~~well ~~not~~as ~~always~~goods ~~able~~subject to ~~offset~~counter ~~cost~~tariffs ~~increases~~imposed by ~~increasing~~other ~~our~~countries. ~~contract~~We ~~value~~continue to pursue available options to mitigate the impact of tariffs and countermeasures, including (i) utilizing available exemptions or ~~pricing~~exclusions to tariffs, insuch ~~particular~~as ontrade ~~our~~agreements, ~~fixed-price~~treaties ~~contracts.~~or ~~Increasing~~other ~~material~~statutory relief, ~~component~~(ii) evaluating operational and supply chain changes, and ~~labor~~(iii) where feasible, increasing the prices ~~could~~of ~~subject~~our usgoods toand ~~losses~~services. inOur results for 2025 reflect our ~~fixed~~best ~~price~~estimate ~~contracts~~of the impact of the tariffs then in effect. As the ~~event~~duration, extent and enforceability of ~~cost~~the ~~overruns.~~tariffs Inand ~~addition~~counter tariffs remain uncertain, ~~higher~~we ~~interest~~are ~~rates~~continuing ~~have~~to ~~increased~~evaluate the ~~cost~~potential future impacts of ~~borrowing~~the imposition of the announced tariffs to our business and ~~tightened~~financial condition. Based on current conditions, we do not believe that the ~~availability~~tariffs ofannounced ~~capital~~by the U.S. ~~Among~~or counter tariffs or other ~~things,~~actions ~~these~~taken ~~effects~~by ~~can~~other ~~constrain~~countries will have a material adverse effect upon our ~~customers’~~results ~~purchasing~~of ~~power~~operations, ~~and~~financial ~~decrease~~condition, ~~orders~~or ~~for~~cash ~~our~~flows. ~~products~~However, ~~and~~the ~~services~~actual ~~and~~financial ~~impact~~impacts of tariffs are dependent upon various factors, most notably, the ~~ability~~scope of goods covered by tariffs, the value of our ~~customers~~imports subject to ~~make~~tariffs, ~~payments~~the rate of tariffs applied, the timing and ~~our~~duration ~~suppliers~~of totariffs, ~~perform.~~the ~~Moreover~~enforceability of tariffs and counter-tariffs, ~~volatility~~the inimplementation ~~interest~~of ~~rates~~tariff and ~~financial~~non-tariff ~~markets~~countermeasures ~~can~~by ~~lead~~countries subject to ~~economic~~U.S. ~~uncertainty~~tariffs, anand ~~economic~~our ~~downturn~~and orour ~~recession,~~suppliers’ ~~and~~ability ~~impact~~to mitigate the ~~demand~~impacts ~~for~~of ~~our~~tariffs. ~~products~~Changes in any of these factors and ~~services~~actual astariff ~~well~~costs asincurred ~~our~~could ~~supply~~significantly ~~chain.~~affect Wethe ~~continue~~estimates toinherent ~~pursue~~in ~~strategic~~our ~~and~~financial ~~operational~~statements, ~~initiatives~~including tothose ~~help~~used ~~address~~in ~~these~~our ~~macroeconomic~~estimates-at-completion ~~pressures~~(EACs), ~~including~~and estimates supporting the recoverability of our ~~digital~~inventories, ~~transformation~~contract fulfillment costs, ~~operational~~deferred ~~modernization~~tax assets, ~~cost~~intangible ~~reduction~~assets and goodwill, and ~~advanced~~could have a material effect on our results of operations and cash flows in the periods recognized and paid.

37U.S. Government’s Budget, Tax Legislation and Executive Orders. On February 3, 2026, Congress passed and the President signed a spending package to end a U.S. government shutdown. The spending package funds the government through the end of the government’s fiscal year, with the exception of the Department of Homeland Security, which remains subject to a continuing resolution.

On July 4, 2025, “An Act to Provide for Reconciliation Pursuant to Title II of the H. Con. Res. 14” (the Act) was enacted. The Act provides for several corporate tax changes including, but not limited to, restoring full expensing of domestic research and

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~~technology~~development ~~programs~~costs, ~~and~~restoring weimmediate ~~apply~~deductibility ~~our~~of ~~Customer~~certain ~~Oriented~~capital ~~Results~~expenditures, and ~~Excellence~~changes ~~(CORE)~~in ~~operating platform to~~ the ~~execution~~computations of ~~these initiatives~~U.S. ~~However,~~taxation ~~the~~on ~~impact~~international ofearnings. ~~these~~See ~~pressures~~“Note ~~and~~12: ~~corresponding~~Income ~~initiatives~~Taxes,” iswithin ~~uncertain~~Item ~~and~~8 ~~subject~~of tothis aForm ~~range~~10-K, offor ~~factors~~additional ~~and future developments~~information.

~~U.S.~~The ~~Government’s~~Act ~~Budget.~~also ~~Since~~provides ~~the~~a ~~end~~supplementary of$156.2 ~~its~~billion ~~fiscal~~to ~~year 2024,~~ the ~~U.S.~~DoW ~~government~~for ~~has~~obligations ~~been~~through ~~operating~~2029, ~~under~~which ~~two~~includes ~~continuing~~$24.4 ~~resolutions,~~billion for the ~~most~~Golden ~~recent~~Dome offor ~~which~~America ~~was~~project. ~~signed~~The ~~on December 21~~project, ~~2024,~~outlined toin ~~keep~~a ~~the~~January ~~government funded through March 14~~27, 2025 ~~while~~Executive ~~Congress~~Order, ~~works~~calls tofor ~~enact~~the ~~full~~development ~~year~~and ~~fiscal~~deployment ~~year~~of ~~2025~~a ~~(FY25)~~next-generation ~~appropriation~~missile ~~bills~~defense shield. ~~Under~~On aMay ~~continuing~~20, ~~resolution~~2025, ~~federal~~the ~~agencies~~DoW ~~continue~~announced toa ~~operate~~draft ~~generally~~architecture atand ~~the~~implementation ~~same~~plan ~~funding~~for ~~levels as~~ the ~~prior year, but typically new spending initiatives cannot be executed during this period~~system. ItWith isnext ~~currently~~generation ~~uncertain~~technologies ~~whether~~across ~~Congress~~land, ~~will~~sea ~~be able to enact FY25 appropriations bills~~ and, ifspace ~~such~~that ~~bills~~build ~~are~~upon ~~passed~~existing, ~~the~~proven ~~spending levels and priorities for~~ defense ~~and~~capabilities, ~~other~~RTX’s ~~areas.~~portfolio ~~If Congress~~ is ~~unable~~well-positioned to ~~complete~~play ~~the~~a ~~FY25~~role ~~appropriation~~in ~~bills~~delivering ~~(or~~reliable ~~pass~~solutions ~~another~~for ~~continuing~~the ~~resolution)~~Golden byDome ~~March~~for ~~14,~~America ~~2025, then the U~~initiative.S. ~~government~~Whether ~~would~~this ~~shut~~Executive ~~down,~~Order ~~during~~or ~~which~~corresponding ~~time~~funding ~~federal~~will ~~agencies~~have ~~would cease all non-essential functions. In the event of~~ a ~~U.S.~~material ~~government~~impact ~~shutdown,~~on our business, ~~program~~or ~~performance and~~ results of operations ~~could~~will bedepend ~~impacted~~on bya ~~the~~variety ~~resulting~~of ~~disruptions to federal government offices~~factors, ~~workers, and operations,~~ including ~~risks~~actual ~~relating to the funding of certain programs, stop work orders, delays in contract~~ awards, ~~new~~award ~~program starts~~timelines, ~~payments~~mission ~~for work performed~~priorities, and ~~other~~future ~~actions.~~budget ~~We also may experience similar impacts in the event of an extended period of continuing resolutions~~determinations. ~~Generally,~~The ~~the~~Act ~~significance~~also ofincludes ~~these impacts will primarily be based on the length of the shutdown or continuing resolution~~$25.4 ~~Furthermore,~~billion ~~under~~in ~~the~~funding ~~Fiscal~~to ~~Responsibility~~enhance ~~Act~~DoW ofresources ~~2023, which imposes limits on discretionary spending~~ for ~~defense~~munitions and ~~non-defense~~supply ~~programs~~chain inresiliency. ~~exchange~~As ~~for~~a ~~the~~leading ~~lifting~~munitions ~~of the debt ceiling in June 2023~~manufacturer, ifRTX ~~Congress~~is ~~fails~~strategically tosituated ~~enact appropriation bills by April 30, 2025, budget caps will be reduced and corresponding automatic reductions~~ to ~~agency~~play ~~budget~~a ~~accounts~~key ~~will~~role bein ~~enforced~~supporting ~~through~~this ~~sequestration~~initiative.

The President has also issued multiple executive orders, including one intended to reform the DoW’s defense acquisition processes and promote expedited and streamlined acquisitions. Following issuance of those orders, the Secretary of War issued a memorandum and released the DoW’s Acquisition Transformation Strategy, which is aligned with the executive orders and seeks to overhaul the existing defense acquisition system through process changes that prioritize speed, flexibility, and rigorous execution. A subsequent executive order was issued that may limit corporate distributions, share repurchases, and executive compensation incentives during periods of defense contractor underperformance, insufficient prioritization, investment or production speed under their U.S. Government contracts. We are monitoring how these executive orders and related actions will be implemented and any potential future impacts to our business. While those impacts are uncertain, a limitation on our ability to issue distributions or engage in share repurchases related to the defense contractor performance executive order could adversely affect the market price of our common stock.

Geopolitical Matters. In response to Russia’s invasion of Ukraine, the U.S. government and the governments of various jurisdictions in which we operate, have imposed broad economic sanctions and export controls targeting specific industries, entities, and individuals in Russia. The Russian government has implemented similar counter-sanctions and export controls targeting specific industries, entities, and individuals in the U.S. and other jurisdictions in which we operate, including certain members of the Company’s management team and Board of Directors. These government measures, among other limitations, restrict transactions involving various Russian banks and financial institutions and impose enhanced export controls limiting transfers of various goods, software, and technologies to and from Russia, including broadened export controls specifically targeting the aerospace sector. These measures have adversely affected, and could continue to adversely affect, the Company and/or our supply chain, business partners, or customers; however, based on information available to date, we do not currently expect these issues will have a material adverse effect on our financial results. We will continue to monitor future developments, including additional sanctions and other measures, that could adversely affect the Company and/or our supply chain, business partners, or customers.

In February 2023, China announced sanctions against Raytheon Missiles & Defense (RMD) (a former RTX business segment which became part of the Raytheon business during the third quarter of 2023), and previously announced it may take measures against RTX, in connection with certain foreign military sales to Taiwan. The Chinese sanctions against RMD included a fine equal to twice the value of the arms that RMD sold to Taiwan since September 2020. Since that time, China has announced additional sanctions against the Raytheon business and a Collins joint venture. If China were to impose additional sanctions, enforce announced sanctions, or take other regulatory action against RTX, our suppliers, affiliates, or partners, it could potentially disrupt our business operations. Any impact of these or other potential sanctions or other actions by China, is uncertain.

We have direct commercial sales contracts for products and services to certain foreign customers, for which U.S. government review and approval have been pending. The U.S. government’s approval of these sales is subject to a range of factors, including its foreign policies related to these customers, which are subject to continuing review and potential changes. Likewise, regulatory approvals previously granted for prior sales can be paused or revoked if the products and services have not yet been delivered to the customer. In addition, certain programs require approvals by foreign governments, and those approvals may not be obtained on a timely basis or at all or may be revoked. If we ultimately do not receive all of the regulatory approvals, or those approvals are revoked, it could have a material effect on our financial results.

We continue to closely monitor potential impacts to RTX’s business, customers, suppliers, employees, and operations in Israel, the Middle East, and the region at large due to ~~the~~continued ~~war~~regional ~~in Gaza, including a recently-announced ceasefire, the related escalation of conflict and~~ instability ~~in the region,~~ and ~~the regime change in Syria~~tensions. RTX’s commercial manufacturing facilities in Israel remain open and operational and have continued exporting products and importing critical items and raw materials. RTX’s defense programs’ ability to receive components from Israel has not been impacted in any material respect, although we could experience future delivery delays of certain products if the ceasefire does not hold, or if further escalations arise. The overall impacts to RTX from this situation have been minimal; however, given the volatile nature of the situation, the potential impacts to RTX are subject to change.

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On February 1, 2025, President Trump issued three executive orders directing the United States to impose new tariffs on imports from Canada, Mexico, and China, to take effect on February 4, 2025, and on February 3, 2025, President Trump announced his intention to pause tariffs on Canada and Mexico for the next month. The tariffs impose an additional 25% ad valorem rate of duty on all imports from Canada and Mexico (other than imports of Canadian energy resources exports, which are subject to a 10% ad valorem rate of duty) and an additional 10% ad valorem rate of duty on all imports from China. We are currently evaluating the potential impact of the imposition of the announced tariffs to our business and financial condition. RTX also exports products to Canada, Mexico and China and we are currently monitoring the potential impact, if any, of actions taken in response to these tariffs by Canada, Mexico and China. On January 28, 2025, RTX announced its full-year 2025 financial outlook, and that outlook does not reflect the impact of tariffs on imports from Canada, Mexico and China announced pursuant to the February 1, 2025 executive orders. While we do not believe that the tariffs announced by the United States on February 1, 2025 will have a material adverse effect upon our results of operations, financial condition, or liquidity, there may be an impact to our previously issued outlook. The actual impact of the new tariffs is subject to a number of factors including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.

See Item 1A. “Risk Factors” within Part I of this Form 10-K for further discussion.

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FINANCIAL SUMMARY

We use the following key financial performance measures to manage our business on a consolidated basis and by business segment, and to monitor and assess our results of operations:

•Net sales: a metric that measures our revenue for the current year;

•Operating profit: a measure of our profit for the year, before non-operating expenses (income), net and income tax expense;

•Operating profit margin: a measure of our Operating profit as a percentage of Total net sales; and

•Operating cash flow ~~from continuing operations~~: a measure of the amount of cash generated by our business operations.

(dollars in millions)	~~2024~~2025			~~2023~~2024			~~2022~~2023
Total net sales	$	8088,~~738~~603		$	6880,~~920~~738		$	6768,~~074~~920
Operating profit	69,~~538~~300			36,~~561~~538			53,~~504~~561
Operating profit margin	810.15		%	58.21		%	85.2		%
Operating cash flow from continuing operations	$	7,159		$	7,883		$	7,168
Operating cash flow	$	10,567		$	7,159		$	7,883

In order to better assess the underlying performance of our business, we also focus on the change in organic net sales on both a consolidated basis and business segment basis, and the change in organic operating profit on a business segment basis, which allows for better year-over-year comparability. See “Results of Operations” below for our definition of the organic change in Net sales and Operating profit, which are non-Generally Accepted Accounting Principles (non-GAAP) measures that are not defined measures under U.S. Generally Accepted Accounting Principles (GAAP) and may be calculated differently by other companies.

We also focus on backlog as a key financial performance measure of our forward-looking sales growth. Total backlog was $~~218~~268 billion and $~~196~~218 billion as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively. Backlog, which is equivalent to our remaining performance obligations (RPO) for our sales contracts, represents the aggregate dollar value of firm orders for which products have not been provided or service has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity (IDIQ) type contracts). Backlog generally increases with bookings and/or orders and generally decreases as sales are recognized on these bookings and is affected by changes in foreign exchange rates, as well as contract cancellations and terminations, and cost underruns on cost-type contracts.

In addition, we maintain a strong focus on program execution and the prudent management of capital and investments in order to maximize operating income and cash. We focus on adjusted earnings per share (EPS) and measures to assess our cash generation and the efficiency and effectiveness of our use of capital, such as free cash flow, both of which are non-GAAP measures that are not defined measures under U.S. GAAP and may be calculated differently by other companies.

Considered together, we believe these metrics are strong indicators of our overall performance and our ability to create shareowner value. We also use these and other performance metrics for executive compensation purposes.

A discussion of our results of operations and financial condition follows below in “Results of Operations”, “Segment Review”, and “Liquidity and Financial Condition”.

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RESULTS OF OPERATIONS

As described in our “Cautionary Note Concerning Factors That May Affect Future Results ~~and Risk Factor Summary~~” of this Form 10-K, our period-to-period comparisons of our results, particularly at a segment level, may not be indicative of our future operating results. The following discussions of comparative results among periods, including the discussion of segment results, should be viewed in this context.

We provide the organic change in Net sales and Cost of sales for our consolidated results of operations as well as the organic change in Net sales and Operating profit for our segments. We believe that these non-GAAP measures are useful to investors because they provide transparency to the underlying performance of our business, which allows for better year-over-year comparability. The organic change in Net sales, Cost of sales, and Operating profit excludes acquisitions and divestitures, net, and the effect of foreign currency exchange rate translation fluctuations and other significant non-operational items and/or significant operational items that may occur at irregular intervals (Other). Additionally, the organic change in Cost of sales and Operating profit excludes restructuring costs, the FAS/CAS operating adjustment, and ~~costs related to certain~~ acquisition accounting adjustments. Restructuring costs generally arise from severance related to workforce reductions and facility exit costs. We are continuously evaluating our cost structure and ~~have~~implement ~~implemented~~ restructuring actions in an effort to keep our cost structure competitive. 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 U.S. GAAP and our pension and PRB expense under U.S. government Cost Accounting Standards (CAS), primarily related to our Raytheon segment. 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.

(dollars in millions)			2024						2023						2022
Total net sales			$	80,738					$	68,920					$	67,074

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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.

Net Sales


(dollars in millions)	2025		2024		2023
Total net sales	$	88,603	$	80,738	$	68,920

The factors contributing to the total change year-over-year in Total net sales are as follows:

(dollars in millions)	~~2024~~2025		~~2023~~2024
Organic (1)	$	78,~~816~~894	$	7,~~343~~816
Acquisitions and divestitures, net	(1,~~291~~179)		(~~143~~1,291)
Other	~~5,293~~150		(5,~~354)~~293
Total change	$	117,~~818~~865	$	111,~~846~~818

(1) See “Results of Operations” for definition of organic. A reconciliation of this measure to reported U.S. GAAP amounts is provided in the table above.

Net sales increased $7.8.9 billion organically in ~~2024 compared to 2023~~2025, primarily due to higher organic sales of $4.48 billion at Pratt & Whitney, $2.16 billion at Collins, and $1.7 billion at Raytheon. The $1.3 billion decrease in net sales related to Acquisitions and divestitures, net in 2024 compared to 2023, was primarily driven by the sale of our Cybersecurity, Intelligence and Services (CIS) business within our Raytheon segment completed in the first quarter of 2024. The increase in Other net sales of $5.3 billion in 2024 compared to 2023, was primarily driven by the absence of the net sales charge of $5.4 billion associated with the Powder Metal Matter recognized in the third quarter of 2023.

~~Net~~The ~~sales increased~~ $71.3 2 billion ~~organically~~decrease in ~~2023~~net ~~compared~~sales torelated ~~2022, primarily due~~ to ~~higher~~Acquisitions ~~organic~~and ~~sales of $3.2 billion at Collins~~divestitures, ~~$3.1~~net ~~billion~~in at2025 ~~Pratt~~was &primarily ~~Whitney,~~driven ~~and~~by ~~$1.3~~the ~~billion~~sale atof ~~Raytheon.~~the ~~The~~actuation ~~$0.1 billion~~and ~~decrease~~flight incontrol ~~net~~business ~~sales~~within ~~related~~our toCollins ~~Acquisitions~~segment ~~and~~completed ~~divestitures, net~~ in ~~2023~~the ~~compared~~third toquarter ~~2022~~of 2025, ~~was~~the ~~primarily~~sale ~~driven~~of by the ~~divestiture~~Simmonds ofPrecision aProducts ~~small~~business ~~non-core~~within ~~naval~~our ~~power~~Collins ~~business~~segment completed in the fourth quarter of ~~2022.~~2025, ~~The~~the ~~decrease~~sale inof ~~Other~~the ~~net~~Cybersecurity, ~~sales~~Intelligence ofand ~~$5.4~~Services ~~billion~~(CIS) inbusiness ~~2023~~within ~~compared~~our toRaytheon ~~2022,~~segment ~~was~~completed ~~primarily~~in ~~driven~~the byfirst ~~the~~quarter ~~net~~of ~~sales~~2024, ~~charge~~and the sale of ~~$5.4 billion~~the ~~associated~~Goodrich ~~with~~Hoist ~~the~~& ~~Powder~~Winch ~~Metal~~business ~~Matter~~within ~~recognized~~our Collins segment completed in the ~~third~~fourth quarter of ~~2023~~2024.

Net sales increased $7.8 billion organically in 2024, primarily due to higher organic sales of $4.4 billion at Pratt & Whitney, $2.1 billion at Collins, and $1.7 billion at Raytheon.

The $1.3 billion decrease in net sales related to Acquisitions and divestitures, net in 2024 was primarily driven by the sale of our CIS business within our Raytheon segment completed in the first quarter of 2024.

The increase in Other net sales of $5.3 billion in 2024 was primarily driven by the absence of the net sales charge of $5.4 billion associated with the Powder Metal Matter recognized in the third quarter of 2023.

See “Segment Review” below for further information by segment.


							% of Total Net Sales
(dollars in millions)	2025		2024		2023		2025		2024		2023
Net sales
Products	$	64,171	$	59,612	$	49,571	72	%	74	%	72	%
Services	24,432		21,126		19,349		28	%	26	%	28	%
Total net sales	$	88,603	$	80,738	$	68,920	100	%	100	%	100	%

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							% of Total Net Sales
(dollars in millions)	2024		2023		2022		2024		2023		2022
Net sales
Products	$	59,612	$	49,571	$	50,773	74	%	72	%	76	%
Services	21,126		19,349		16,301		26	%	28	%	24	%
Total net sales	$	80,738	$	68,920	$	67,074	100	%	100	%	100	%

Refer to “Note 20: Segment Financial Data” within Item 8 of this Form 10-K for the composition of external net sales by products and services by segment.

Net products sales increased $104.06 billion in ~~2024~~2025 compared to ~~2023~~2024, primarily ~~driven~~due byto ~~the absence of the net sales charge of $5.3 billion associated with the Powder Metal Matter, and~~ increases in external products sales of $2.42 billion at Pratt & Whitney, $1.2 billion at Collins, and $1.~~0 billion at Raytheon. Net services sales increased $1.8 billion in 2024 compared to 2023, primarily due to increases in external services sales of $~~2~~.0 billion at Pratt & Whitney, including the absence of a services sales charge of $0.1~~ billion ~~associated with the Powder Metal Matter, and a $0.4 billion increase~~ at ~~Collins, partially offset by a decrease in external services sales of $0.7 billion at~~ Raytheon~~, primarily driven by the sale of our CIS business completed in the first quarter of 2024~~.

Net products sales decreased $1.2 billion in 2023 compared to 2022, primarily driven by a $3.8 billion decrease at Pratt & Whitney due to a net sales charge of $5.3 billion associated with the Powder Metal Matter, partially offset by increases of $2.1 billion at Collins and $0.6 billion at Raytheon. Net services sales increased $3.03 billion in ~~2023~~2025 compared to ~~2022~~2024, primarily due to increases in external services sales of $12.7 billion at Pratt & Whitney, $0.8 5 billion at Collins, and $0.6 1 billion at Raytheon~~, partially offset by a services sales charge of $0~~.~~1 billion associated with the Powder Metal Matter.~~

Net products sales increased $10.0 billion in 2024 compared to 2023, primarily driven by the absence of the net sales charge of $5.3 billion associated with the Powder Metal Matter, and increases in external product sales of $2.4 billion at Pratt & Whitney, $1.2 billion at Collins, and $1.0 billion at Raytheon.

Net services sales increased $1.8 billion in 2024 compared to 2023, primarily due to increases in external services sales of $2.0 billion at Pratt & Whitney, including the absence of a services sales charge of $0.1 billion associated with the Powder Metal Matter, and a $0.4 billion increase at Collins, partially offset by a decrease in external services of $0.7 billion at Raytheon, primarily driven by the sale of our CIS business completed in the first quarter of 2024.

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Our sales to major customers were as follows:

							% of Total Net Sales
(dollars in millions)	~~2024~~2025		~~2023~~2024		~~2022~~2023		~~2024~~2025		~~2023~~2024		~~2022~~2023
Sales to the U.S. government (1)	$	3233,~~246~~279	$	3132,~~628~~246	$	3031,~~317~~628	4038	%	4640	%	4546	%
Foreign military sales through the U.S. government	56,~~765~~702		45,~~974~~765		54,~~042~~974		78	%	7	%	87	%
Foreign government direct commercial sales	56,~~317~~123		45,~~249~~317		4,~~327~~249		7	%	67	%	6	%
Commercial aerospace and other commercial sales (2)	3742,~~410~~499		2837,~~069~~410		2728,~~388~~069		4648	%	4146	%	41	%
Total net sales	$	8088,~~738~~603	$	6880,~~920~~738	$	6768,~~074~~920	100	%	100	%	100	%

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

(2) 2023 includes the reduction in sales from the Powder Metal Matter.

Cost of Sales

(dollars in millions)	~~2024~~2025			~~2023~~2024			~~2022~~2023
Total cost of sales	$	6570,~~328~~814		$	5665,~~831~~328		$	5356,~~406~~831
Percentage of net sales	8180		%	8281		%	8082		%

The factors contributing to the change year-over-year in Total cost of sales are as follows:

(dollars in millions)	~~2024~~2025		~~2023~~2024
Organic (1)	$	67,~~188~~132	$	56,~~721~~188
Acquisitions and divestitures, net	(1,~~210~~055)		(~~133~~1,210)
Restructuring	~~(9)~~12		~~107~~(9)
FAS/CAS operating adjustment	~~246~~89		~~238~~246
Acquisition accounting adjustments	61(52)		~~107~~61
Other	~~3,222~~(640)		(23,~~615)~~222
Total change	$	85,~~498~~486	$	38,~~425~~498

(1) See “Results of Operations” for definition of organic. A reconciliation of this measure to reported U.S. GAAP amounts is provided in the table above.

The organic increase in ~~Total~~total cost of sales in ~~2024~~2025 ~~compared to 2023~~ of $67.21 billion was primarily due to the organic net sales increases at Pratt & Whitney, Collins, and Raytheon noted above. The $1.21 billion decrease in cost of sales related to Acquisitions and divestitures, net in 2025 was primarily due to the net sales decreases related to Acquisitions and divestitures, net noted above.

41The decrease in Other cost of sales of $0.6 billion in 2025 was primarily driven by the absence of charges recorded in 2024, including a $0.5 billion charge recorded in the second quarter of 2024 at Raytheon related to the termination of a fixed price development contract with a foreign customer (herein referred to as “Raytheon Contract Termination”) and $0.2 billion of charges recorded in the first quarter of 2024 at Collins related to the recognition of unfavorable purchase commitments and an impairment of contract fulfillment costs that were no longer recoverable as a result of initiating alternative titanium sources.

~~Table~~The organic increase in total cost of ~~Contents~~sales in 2024 of $6.2 billion was primarily due to the organic net sales increases at Pratt & Whitney, Collins, and Raytheon noted above.

~~Acquisitions and divestitures, net in 2024 compared to 2023, was primarily driven by the sale of our CIS business within our Raytheon segment completed in the first quarter of 2024.~~ The ~~increase in Other cost of sales of~~ $31.2 billion indecrease ~~2024 compared to 2023 was primarily driven by the absence of the Powder Metal Matter charge recorded~~ in ~~the third quarter of 2023, which resulted in a $2.5 billion net reduction in~~ cost of sales ~~primarily~~related ~~reflecting~~to ~~our~~Acquisitions ~~partners’~~and ~~49% share of the impact. In addition~~divestitures, ~~the~~net ~~increase~~ in ~~Other~~2024 ~~cost~~was ofprimarily ~~sales~~driven ~~includes~~by ~~a $0.5 billion charge at Raytheon related to~~ the ~~termination~~sale of aour ~~fixed~~CIS ~~price~~business ~~development~~within ~~contract~~our ~~with a foreign customer, herein referred to as “~~Raytheon ~~Contract~~segment ~~Termination,”~~completed in the ~~second quarter of 2024, and $0.2 billion of charges recorded in the~~ first quarter of 2024 at Collins related to the recognition of unfavorable purchase commitments and an impairment of contract fulfillment costs that are no longer recoverable as a result of initiating alternative titanium sources.

The ~~organic~~ increase in ~~Total~~Other cost of sales ~~in 2023 compared to 2022~~ of $53.7 2 billion in 2024 was primarily ~~due~~driven toby the ~~organic~~absence ~~net~~of ~~sales~~the ~~increases~~Powder atMetal ~~Pratt~~Matter &charge ~~Whitney,~~recorded ~~Collins,~~in ~~and~~the ~~Raytheon~~third ~~noted~~quarter ~~above.~~of ~~The~~2023, which resulted in a $02.1 5 billion ~~decrease~~net reduction in cost of sales ~~related~~primarily toreflecting ~~Acquisitions~~our ~~and~~partners’ ~~divestitures,~~49% ~~net~~share inof ~~2023~~the ~~compared~~impact. toIn ~~2022~~addition, ~~was~~the ~~primarily~~increase ~~driven~~in byOther ~~the~~cost ~~divestiture~~ of sales includes a ~~small~~$0.5 billion ~~non-core~~charge ~~naval~~related ~~power~~to ~~business~~the Raytheon Contract Termination recorded in the ~~fourth~~second quarter of ~~2022~~2024, and $0.2 billion ~~The~~of ~~decrease~~charges recorded in ~~Other~~the ~~cost~~first ofquarter ~~sales~~ of ~~$2.6~~2024 ~~billion~~at inCollins ~~2023~~related ~~compared~~ to ~~2022~~the ~~was~~recognition ~~primarily~~of ~~driven~~unfavorable bypurchase acommitments ~~net~~and ~~reduction~~an inimpairment ~~cost~~ of ~~sales~~contract offulfillment ~~$2.5 billion~~costs ~~primarily~~that ~~reflecting~~are ~~our~~no ~~partners’~~longer ~~49%~~recoverable ~~share~~as a result of ~~the~~initiating ~~Powder~~alternative ~~Metal~~titanium ~~Matter~~sources.

Restructuring actions relate to ongoing cost reduction efforts including workforce reductions and the consolidation of facilities.

For discussion on FAS/CAS operating adjustment, see the “FAS/CAS operating adjustment” subsection under the “Segment Review” section below. For discussion on Acquisition accounting adjustments, see the “Acquisition accounting adjustments” subsection under the “Segment Review” section below.

							% of Total Net Sales
(dollars in millions)	2024		2023		2022		2024		2023		2022
Cost of sales
Products	$	50,768	$	43,425	$	41,927	63	%	63	%	63	%
Services	14,560		13,406		11,479		18	%	19	%	17	%
Total cost of sales	$	65,328	$	56,831	$	53,406	81	%	82	%	80	%

~~Net~~Table ~~products cost~~ of sales increased $7.3 billion in 2024 compared to 2023, primarily due to the absence of the Powder Metal Matter charge recorded in the third quarter of 2023, which resulted in a $2.5 billion net reduction in cost of sales primarily reflecting our partners’ 49% share of the impact. In addition, net product cost of sales includes increases in external products cost of sales at Pratt & Whitney, Collins, and Raytheon all driven by the products sales changes noted above, a $0.5 billion charge related to the Raytheon Contract Termination in the second quarter of 2024, and $0.2 billion of charges at Collins as a result of initiating alternative titanium sources recorded in the first quarter of 2024. Net services cost of sales increased $1.2 billion in 2024 compared to 2023, primarily due to increases in external services cost of sales at Pratt & Whitney and Collins, partially offset by a decrease in external services cost of sales at Raytheon, all driven by the services sales changes noted above.Contents

Net products cost of sales increased $1.5 billion in 2023 compared to 2022, primarily due to increases in external products cost of sales at Pratt & Whitney, Collins, and Raytheon, all driven by the products sales changes noted above, partially offset by a net reduction in cost of sales of $2.5 billion primarily reflecting our partners’ 49% share of the Powder Metal Matter. Net services cost of sales increased $1.9 billion in 2023 compared to 2022, primarily due to increases in external services cost of sales at Pratt & Whitney, Collins, and Raytheon, all driven by the services sales changes noted above.


							% of Total Net Sales
(dollars in millions)	2025		2024		2023		2025		2024		2023
Cost of sales
Products	$	53,780	$	50,768	$	43,425	61	%	63	%	63	%
Services	17,034		14,560		13,406		19	%	18	%	19	%
Total cost of sales	$	70,814	$	65,328	$	56,831	80	%	81	%	82	%

(dollars in millions)	2024			2023			2022
Company-funded	$	2,934		$	2,805		$	2,711
Percentage of net sales	3.6		%	4.1		%	4.0		%
Customer-funded (1)	$	4,723		$	4,456		$	4,376
Percentage of net sales	5.8		%	6.5		%	6.5		%

Net products cost of sales increased $3.0 billion in 2025 compared to 2024, primarily driven by increases in external products cost of sales at Pratt & Whitney and Collins, each driven by the products sales changes noted above. The increase was partially offset by the absence of a $0.5 billion charge recorded in the second quarter of 2024 at Raytheon related to the Raytheon Contract Termination and charges of $0.2 billion recorded in the first quarter of 2024 at Collins as a result of initiating alternative titanium sources.

Net services cost of sales increased $2.5 billion in 2025 compared to 2024, primarily due to an increase in external services cost of sales at Pratt & Whitney, driven by the services sales change noted above.

Net products cost of sales increased $7.3 billion in 2024 compared to 2023, primarily due to the absence of the Powder Metal Matter charge recorded in the third quarter of 2023, which resulted in a $2.5 billion net reduction in cost of sales primarily reflecting our partners’ 49% share of the impact. In addition, net product cost of sales includes increases in external products cost of sales at Pratt & Whitney, Collins, and Raytheon all driven by the products sales changes noted above, a $0.5 billion charge related to the Raytheon Contract Termination in the second quarter of 2024, and $0.2 billion of charges at Collins as a result of initiating alternative titanium sources recorded in the first quarter of 2024.

Net services cost of sales increased $1.2 billion in 2024 compared to 2023, primarily due to increases in external services cost of sales at Pratt & Whitney and Collins, partially offset by a decrease in external services cost of sales at Raytheon, all driven by the services sales changes noted above.

Research and Development


(dollars in millions)	2025			2024			2023
Company-funded	$	2,807		$	2,934		$	2,805
Percentage of net sales	3.2		%	3.6		%	4.1		%
Customer-funded (1)	$	4,886		$	4,723		$	4,456
Percentage of net sales	5.5		%	5.8		%	6.5		%

(1) Included in Cost of sales in our Consolidated Statement of Operations.

Research and development spending is subject to the variable nature of program development schedules and, therefore, year-over-year fluctuations in spending levels are expected.

The ~~increase~~decrease in company-funded research and development of $0.1 billion in ~~2024~~2025 compared to ~~2023~~2024, was primarily driven by ~~increased~~lower spending on ~~commercial~~military ~~program~~and ~~development~~commercial programs at Collins and Pratt & Whitney, partially offset by ~~lower~~higher expenses on development programs at Raytheon. ~~The increase in company-funded research and development of $0.1 billion in 2023~~

42The increase in company-funded research and development of $0.1 billion in 2024 compared to 2023, was primarily driven by increased spending on commercial program development at Collins and Pratt & Whitney, partially offset by lower expenses on development programs at Raytheon.

The increase in customer-funded research and development of $0.2 billion in 2025 compared to 2024, was primarily driven by higher development spend on various military and commercial programs at Collins and increased spending at Pratt & Whitney on military development programs, partially offset by lower spending on customer-funded expenses at Raytheon on military development programs, specifically related to the Next Generation Interceptor (NGI) program.

The increase in customer-funded research and development of $0.3 billion in 2024 compared to 2023, was primarily driven by higher development spend on various military and commercial programs at Collins and increased spending at Pratt & Whitney on military programs primarily driven by the F135 Engine Core Upgrade (ECU), partially offset by lower expenses at Raytheon primarily related to the NGI program.

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Selling, General, and Administrative

compared to 2022, was primarily driven by increased spending on commercial program development at Pratt & Whitney and higher program expenses at Collins, partially offset by decreased spend on other development programs.


(dollars in millions)	2025			2024			2023
Selling, general, and administrative	$	6,095		$	5,806		$	5,809
Percentage of net sales	6.9		%	7.2		%	8.4		%

~~The~~Selling, ~~increase~~general, ~~in customer-funded research~~ and ~~development~~administrative ofexpenses increased $0.3 billion in ~~2024~~2025 compared to ~~2023~~2024, ~~was~~ primarily driven by higher ~~expenses~~employee-related oncosts ~~various military~~ and ~~commercial~~higher ~~programs~~restructuring atcosts ~~Collins and increased spending at Pratt & Whitney on military programs primarily driven by the F135 Engine Core Upgrade (ECU), partially offset by lower expenses at Raytheon primarily~~ related to ~~the~~ongoing ~~Next~~cost ~~Generation~~reduction ~~Interceptor~~efforts ~~(NGI) program. The increase in customer-funded research and development of $0.1 billion in 2023 compared to 2022, was primarily~~ driven by ~~higher expenses on~~ various ~~commercial~~workforce ~~and~~reductions ~~military~~initiated ~~programs~~in at2025 ~~Collins and increased spending~~ at ~~Pratt & Whitney on military programs, partially offset by lower expenses on various programs at Raytheon~~Collins.

(dollars in millions)	2024			2023			2022
Selling, general, and administrative	$	5,806		$	5,809		$	5,573
Percentage of net sales	7.2		%	8.4		%	8.3		%

Selling, general, and administrative expenses in 2024 were relatively consistent compared to 2023.

Selling, general, and administrative expenses in 2024 were relatively consistent with 2023, as a $0.1 billion customer bankruptcy charge recorded in the fourth quarter of 2024 was offset by the absence of a $0.1 billion customer insolvency charge recorded in the second quarter of 2023, both at Pratt & Whitney.

Selling, general, and administrative expenses increased $0.2 billion in 2023 compared to 2022, primarily driven by a $0.1 billion charge at Pratt & Whitney related to a customer insolvency in the second quarter of 2023, costs related to our segment realignment and divestitures in 2023, and increased employee-related costs, partially offset by the absence of $0.1 billion of charges recorded in the first quarter of 2022 related to increased estimates for credit losses due to global sanctions on and export controls with respect to Russia. See “Note 1: Basis of Presentation and Summary of Accounting Principles” within Item 8 of this Form 10-K for additional information on Russia sanctions.

We are continuously evaluating our cost structure and have implemented restructuring actions in an effort to keep our cost structure competitive. Therefore, the amounts reflected above include the beneficial impact of previous restructuring actions on Selling, general, and administrative expenses.

Other Income (Expense), Net

(dollars in millions)

~~2024~~2025

~~2023~~2024

~~2022~~2023

Other income (expense), net

~~(132)~~413

86(132)

~~120~~86

Other income (expense), net includes equity earnings in unconsolidated entities, royalty income, foreign exchange gains and losses, and other ongoing and non-recurring items.

The ~~decrease~~increase in Other income (expense), net of $0.25 billion in ~~2024~~2025 compared to ~~2023~~2024 was primarily due to a $0.92 billion ~~charge~~gain ~~during~~on ~~the~~sale ~~second quarter~~ of ~~2024 related to~~ the ~~Resolution~~actuation ofand ~~Certain~~flight ~~Legal~~control ~~Matters.~~business ~~This~~in ~~was~~the ~~partially~~third ~~offset~~quarter byof 2025, a $0.41 billion gain on ~~the~~ sale of ~~Raytheon’s~~the ~~CIS~~Simmonds Precision Products business in the ~~first~~fourth quarter of ~~2024~~2025, aand $0.21 billion ~~benefit~~of ~~from~~gains arelated ~~tax~~to ~~related~~the ~~indemnity~~increase ~~receivable~~in ~~recorded~~fair value on investments in ~~the~~2025. ~~third~~The ~~quarter~~increase ofin ~~2024~~Other income (expense), net in 2025 compared to 2024 also benefited from the absence of a $0.19 billion ~~gain~~charge onrelated to the ~~sale~~Resolution of ~~Collins’~~Certain ~~Goodrich~~Legal ~~Hoist~~Matters &in ~~Winch~~2024, ~~business~~partially inoffset by the ~~fourth~~absence ~~quarter~~of a prior year benefit of ~~2024,~~$0.4 ~~and~~billion angain ~~insurance~~on ~~recovery~~sale atof ~~Pratt~~the &CIS ~~Whitney~~business net of ~~approximately~~transaction and other related costs, a $0.12 billion inbenefit ~~the~~from ~~fourth~~a ~~quarter~~tax ofrelated ~~2024.~~indemnity ~~See~~receivable, ~~“Note 12:~~a ~~Income~~$0.1 ~~Taxes”~~billion ~~within~~gain ~~Item~~on 8sale of ~~this~~Collin’s ~~Form~~Goodrich ~~10-K~~Hoist ~~for~~& ~~additional~~Winch ~~information~~business, onand ~~the~~an ~~indemnity~~insurance ~~receivable~~recovery ~~and~~at ~~the~~Pratt ~~offsetting~~& ~~impacts~~Whitney toof ~~Income~~approximately ~~tax~~$0.1 ~~expense~~billion.

The decrease in Other income (expense), net of $0.2 billion in 2024 compared to 2023, was ~~relatively~~primarily ~~consistent~~due ~~with~~to ~~2022,~~a as$0.9 ~~the~~billion ~~net~~charge ~~unfavorable~~during ~~year-over-year~~the ~~impact~~second quarter of ~~foreign~~2024 ~~exchange~~related ~~gains~~to ~~and~~the ~~losses~~Resolution of Certain Legal Matters. This was partially offset by a $0.14 billion, ~~was~~gain ~~more~~on ~~than~~sale ~~offset~~of byRaytheon’s CIS business in the ~~absence~~first quarter of 2024, a $0.12 billion ofbenefit ~~charges~~from ~~associated~~a ~~with~~tax ~~the~~related ~~disposition~~indemnity ofreceivable ~~three~~recorded ~~businesses~~ in ~~2022~~the ~~and~~third quarter of 2024, a $0.1 billion gain on sale of ~~land~~Collins’ ~~during~~Goodrich Hoist & Winch business in the ~~first~~fourth quarter of ~~2023.~~2024, ~~The~~and ~~remaining~~an ~~decrease~~insurance ~~was~~recovery ~~spread~~at ~~across~~Pratt ~~individually~~& ~~less~~Whitney ~~significant~~of ~~items~~approximately $0.1 billion in the fourth quarter of 2024.

Operating Profit

(dollars in millions)	~~2024~~2025			~~2023~~2024			~~2022~~2023
Operating profit	$	69,~~538~~300		$	36,~~561~~538		$	53,~~504~~561
Operating profit margin	810.15		%	58.21		%	85.2		%

The increase in Operating profit of $32.08 billion in ~~2024~~2025 compared to ~~2023~~2024 was primarily driven by an increase in the ~~absence~~organic operating performance of ~~the~~our segments of $21.95 billion, a $0.2 billion gain on sale of ~~charges~~the ~~associated~~actuation ~~with~~and flight control business in 2025, and a $0.1 billion gain on sale of the ~~Powder~~Simmonds ~~Metal~~Precision ~~Matter~~Products ~~recorded~~business in the ~~third~~fourth quarter of ~~2023~~2025. InThe ~~addition, the~~ increase in Operating profit ~~was~~in ~~driven~~2025 bycompared ~~the~~to ~~increased~~2024 ~~operating~~also ~~performance~~benefited from the absence of ~~our~~2024 ~~segments~~charges, including a $0.9 billion charge related to the Resolution of ~~approximately~~Certain Legal Matters, a $10.56 billion charge related to the Raytheon Contract Termination, and charges of $0.2 billion at Collins as a result of initiating alternative titanium sources. These increases were partially offset by the absence of prior year benefits including a $0.4 billion gain on sale of the CIS business, net of transaction and other related costs and a $0.2 billion benefit from a tax related indemnity receivable.

43The increase in Operating profit of $3.0 billion in 2024 compared to 2023 was primarily driven by the absence of the $2.9 billion of charges associated with the Powder Metal Matter recorded in the third quarter of 2023. In addition, the increase in Operating profit was driven by the increased operating performance of our segments of approximately $1.5 billion, a $0.4 billion gain on sale of the CIS business recorded in the first quarter of 2024, and a $0.2 billion benefit from a tax related indemnity receivable recorded in the third quarter of 2024. The above items were partially offset by a $0.9 billion charge in the second quarter of 2024 related to the Resolution of Certain Legal Matters, a $0.6 billion charge in the second quarter of 2024

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~~billion gain on sale of the CIS business recorded in the first quarter of 2024, and a $0.2 billion benefit from a tax~~ related ~~indemnity receivable recorded in the third quarter of 2024. The above items were partially offset by a $0.9 billion charge in the second quarter of 2024 related~~ to the ~~Resolution of Certain Legal Matters, a $0.6 billion charge in the second quarter of 2024 related to the~~ Raytheon Contract Termination, and the $0.3 billion change in our FAS/CAS operating adjustment which is described below in “Segment Review.” ~~See “Note 12: Income Taxes” within Item 8 of this Form 10-K for additional information on the indemnity receivable and the offsetting impacts to Income tax expense.~~

Non-service Pension Income

The decrease in Operating profit of $1.9 billion in 2023 compared to 2022 was primarily driven by a decrease at Pratt & Whitney primarily driven by the $2.9 billion charge associated with the Powder Metal Matter and a decrease in the change in our FAS/CAS operating adjustment, partially offset by an increase in Operating profit at Collins and Raytheon, all of which are described below in “Segment Review.”


(dollars in millions)	2025		2024		2023
Non-service pension income	$	(1,182)	$	(1,518)	$	(1,780)

(dollars in millions)			2024						2023						2022
Non-service pension income			$	(1,518)					$	(1,780)					$	(1,889)

The change in Non-service pension income of $0.3 billion in 2025 compared to 2024 was primarily driven by a $0.3 billion settlement charge recorded in fourth quarter of 2025 associated with the annuity buy-out conversion. See “Note 10: Employee Benefit Plans” within Item 8 of this Form 10-K for further discussion.

The change in Non-service pension income of $0.3 billion in 2024 compared to 2023 was primarily driven by the decrease in the recognized actuarial net (gain) loss as a result of the merger of the remaining Raytheon Company qualified pension plans into the RTX Consolidated Pension Plan at December 31, 2023.

Interest Expense, Net

The change in Non-service pension income of $0.1 billion in 2023 compared to 2022 was primarily driven by an increase in interest rates during 2022 and prior years’ pension asset returns performing below our expected return on plan assets (EROA) assumption, partially offset by an increase in our 2023 EROA assumption.


(dollars in millions)	2025			2024			2023
Interest expense	$	1,835		$	1,970		$	1,653
Interest income	(98)			(102)			(100)
Other non-operating expense (income) (1)	12			(6)			(48)
Interest expense, net	$	1,749		$	1,862		$	1,505
Total average interest expense rate - average outstanding borrowings during the year:	4.5		%	4.6		%	4.3		%


Total average interest expense rate - outstanding borrowings as of December 31:	4.5		%	4.5		%	4.6		%

(dollars in millions)	2024			2023			2022
Interest expense	$	1,970		$	1,653		$	1,300
Interest income	(102)			(100)			(70)
Other non-operating expense (income) (1)	(6)			(48)			46
Interest expense, net	$	1,862		$	1,505		$	1,276
Total average interest expense rate - average outstanding borrowings during the year:	4.6		%	4.3		%	4.0		%
Total average interest expense rate - outstanding borrowings as of December 31:	4.5		%	4.6		%	4.0		%

(1) Primarily consists of the gains or losses on assets associated with certain of our nonqualified deferred compensation and employee benefit plans, the gains or losses on liabilities associated with certain of our nonqualified deferred compensation plans, and non-operating dividend income.

Interest expense, net decreased $0.1 billion in 2025 compared to 2024, primarily driven by debt repayments in 2025.

Interest expense, net increased $0.4 billion in 2024 compared to 2023. The increase in Interest expense of $0.3 billion was primarily due to long-term debt issuances and term loan borrowings in 2023, partially offset by the reversal of interest accruals as a result of the conclusion of the examination phases of certain RTX and Rockwell Collins tax audits in the first quarter of 2024.

Income Taxes

Interest expense, net increased $0.2 billion in 2023 compared to 2022. The increase in Interest expense of $0.4 billion was primarily due to the long-term debt issuances in the first and the fourth quarters of 2023, interest and fees on short-term loans related to an accelerated share repurchase (ASR), and the increase in commercial paper activity in 2023. The change in Other non-operating expense (income) of $0.1 billion was primarily driven by a change in the mark-to-market fair value of marketable securities held in trusts associated with certain of our nonqualified deferred compensation and employee benefit plans and an increase in dividend income.


	2025		2024		2023
Effective income tax rate	19.1	%	19.1	%	11.9	%

			2024						2023						2022
Effective income tax rate			19.1		%				11.9		%				12.9		%

Although the 2025 and 2024 effective tax rates are the same, the 2025 effective rate reflects a lower U.S. tax benefit associated with Foreign Derived Intangible Income resulting from the Act. Both periods include tax benefits associated with certain legal entity reorganizations and the tax effects of dispositions.

The ~~higher~~2024 effective tax rate includes tax benefits of $0.3 billion resulting from the conclusion of the examination phases of the U.S. federal income tax audits for RTX 2017 and 2018 tax years and Rockwell Collins 2016, 2017, and 2018 tax years. Also included in the 2024 effective tax rate ~~compared~~is a $0.2 billion tax charge related to ~~2023~~U.S. isfederal ~~primarily~~income ~~driven~~taxes owed by the $2Company resulting from a favorable non-U.9S. ~~billion~~tax ~~Powder~~ruling ~~Metal~~Otis ~~Matter~~received in 2024. The ruling Otis received reduces U.S. foreign tax credits previously claimed by the Company in pre-separation tax ~~charge~~years. This item is subject to a tax matters agreement entered into with Carrier and Otis in connection with the ~~associated~~separations of those businesses in 2020. Accordingly, the Company recorded a pre-tax benefit of $~~663~~0.2 billion ~~million~~for ~~recorded~~a portion of the indemnity owed by Otis to the Company for the reduction in ~~2023~~foreign taxes in the pre-separation years. Additionally, the Company is indemnified by Otis for the associated interest related to the Otis non-US ruling.

The ~~2024~~2023 effective tax rate includes ~~$224~~a ~~million~~deferred of tax ~~expense~~benefit ~~associated~~of ~~with the 2024 dispositions~~$0.7 billion ~~Also~~associated ~~included~~with in the ~~2024 effective tax rate is a~~ $~~212 million tax charge related to U~~2.S.9 billion ~~federal~~Powder ~~income~~Metal ~~taxes~~Matter ~~now owed by the Company resulting from a favorable non-U.S. tax ruling Otis received in 2024. The ruling reduces U.S. foreign tax credits previously claimed by the Company in~~ pre-~~separation~~ tax ~~years~~charge. ~~The Company also recognized a $56 million tax benefit in response to favorable U.S.~~

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Tax Court rulings issued to unrelated taxpayers, but with similar facts as ours. Both of these items are subject to a tax matters agreement entered into with Carrier and Otis in connection with the separations of those businesses in 2020. Accordingly, the Company recorded a pre-tax benefit of $212 million for a portion of the indemnity owed by Otis to the Company for the reduction in foreign taxes in the pre-separation years and a pre-tax charge of $32 million for the indemnified amounts payable to Carrier and Otis associated with the $56 million tax benefit. The Company will record the remaining amounts owed by Otis to the Company related to Otis’ non-U.S. ruling upon receipt of the amounts from Otis. Additionally, the Company is indemnified by Otis for the associated interest related to the Otis non-U.S. ruling.

The items above are partially offset by a $275 million tax benefit resulting from the conclusion of the examination phases of the U.S. federal income tax audits for RTX 2017 and 2018 tax years and Rockwell Collins 2016, 2017, and 2018 tax years, as well as, a $138 million deferred tax benefit associated with legal entity reorganizations.

The lower 2023 effective tax rate compared to 2022 is primarily driven by a favorable impact related to the $2.9 billion charge for the Powder Metal Matter and the associated tax benefit of $663 million, and the absence of a $207 million tax benefit recorded in 2022 related to legal entity and operational reorganizations.

For additional discussion of income taxes and the effective income tax rate, see “Income Taxes” within Critical Accounting Estimates below, and “Note 12: Income Taxes” within Item 8 of this Form 10-K.

(dollars in millions, except per share amounts)	2024		2023		2022
Net income from continuing operations attributable to common shareowners	$	4,774	$	3,195	$	5,216
Diluted earnings per share from continuing operations	$	3.55	$	2.23	$	3.51

Net income from continuing operations attributable to common shareowners for 2024 includes the following:

•acquisition accounting adjustments of $1.6 billion, net of tax, which had an unfavorable impact on diluted EPS from continuing operations of $1.20;

•a charge related to the Resolution of Certain Legal Matters of $0.9 billion, net of tax, which had an unfavorable impact on diluted EPS from continuing operations of $0.65;

•a charge of $0.4 billion, net of tax, related to the Raytheon Contract Termination, which had an unfavorable impact on diluted EPS from continuing operations of $0.33;

•benefit recognized as a result of the conclusion of the examination phases of the RTX and Rockwell Collins tax audits of $0.3 billion, net of tax, which had a favorable impact on diluted EPS from continuing operations of $0.21;

•a gain on sale of the CIS business, net of transaction and other related costs, of $0.2 billion, net of tax, which had a favorable impact on diluted EPS from continuing operations of $0.18;

•charges related to initiating alternative titanium sources at our Collins segment of $0.2 billion, which had an unfavorable impact on diluted EPS from continuing operations of $0.13;

•restructuring charges of $0.2 billion, net of tax, which had an unfavorable impact on diluted EPS from continuing operations of $0.12;

•a charge of $0.1 billion, net of tax, related to a customer bankruptcy, which had an unfavorable impact on diluted EPS from continuing operations of $0.09; and

•a charge of $0.1 billion, net of tax, related to impairment of contract fulfillment costs in the fourth quarter of 2024, due to a contract cancellation at our Collins segment, which had an unfavorable impact on diluted EPS from continuing operations of $0.09.

Net income from continuing operations attributable to common shareowners for 2023 includes the following:

•charge associated with the Powder Metal Matter of $2.2 billion, net of tax and partner share, which had an unfavorable impact on diluted EPS from continuing operations of $1.55;

•acquisition accounting adjustments of $1.6 billion, net of tax, which had an unfavorable impact on diluted EPS from continuing operations of $1.09;

•restructuring charges of $0.2 billion, net of tax, which had an unfavorable impact on diluted EPS from continuing operations of $0.13; and

•charges related to a customer insolvency of $0.1 billion, net of tax and noncontrolling interest, which had an unfavorable impact on diluted EPS from continuing operations of $0.08.

Net income from continuing operations attributable to common shareowners for 2022 includes the following:

•acquisition accounting adjustments of $1.5 billion, net of tax, which had an unfavorable impact on diluted EPS from continuing operations of $0.99;

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Net Income Attributable to Common Shareowners

•impairment charges and reserve adjustments related to the global sanctions on and export controls with respect to Russia of $0.2 billion, net of tax, which had an unfavorable impact on diluted EPS from continuing operations of $0.14;


(dollars in millions, except per share amounts)	2025		2024		2023
Net income attributable to common shareowners	$	6,732	$	4,774	$	3,195
Diluted earnings per share	$	4.96	$	3.55	$	2.23

~~•combined~~Net ~~charges~~income ~~associated~~attributable ~~with~~to ~~disposition~~common ofshareowners ~~businesses~~for at2025 ~~Collins~~includes ~~and~~the ~~Raytheon of $0.1 billion, net of tax, which had an unfavorable impact on diluted EPS from continuing operations of $0.07; and~~following:

•~~restructuring~~acquisition ~~charges~~accounting adjustments of $0.1 .6 billion, net of tax, which had an unfavorable impact on diluted ~~EPS~~earnings ~~from~~per ~~continuing~~share ~~operations~~(EPS) of $01.~~06.~~15;

(dollars in millions, except per share amounts)	2024		2023		2022
Net income attributable to common shareowners	$	4,774	$	3,195	$	5,197
Diluted earnings per share from operations	$	3.55	$	2.23	$	3.50

•a pension settlement charge of $0.2 billion, net of tax, which had an unfavorable impact on diluted EPS of $0.15; and

~~The~~•restructuring ~~changes~~charges inof ~~Net~~$0.2 billion, ~~income~~net ~~attributable~~of totax, ~~common~~which ~~shareowners~~had ~~and~~an ~~diluted~~unfavorable ~~EPS~~impact ~~from~~on ~~operations~~diluted ~~for~~EPS ~~2024~~of ~~compared to 2023 and for 2023 compared to 2022 were driven by the changes in continuing operations, as discussed above~~$0.14.

Net income attributable to common shareowners for 2024 includes the following:

•acquisition accounting adjustments of $1.6 billion, net of tax, which had an unfavorable impact on diluted EPS of $1.20;

•a charge related to the Resolution of Certain Legal Matters of $0.9 billion, net of tax, which had an unfavorable impact on diluted EPS of $0.65;

•a charge of $0.4 billion, net of tax, related to the Raytheon Contract Termination, which had an unfavorable impact on diluted EPS of $0.33;

•a gain on sale of the CIS business, net of transaction and other related costs, of $0.2 billion, net of tax, which had a favorable impact on diluted EPS of $0.18;

•charges related to initiating alternative titanium sources at our Collins segment of $0.2 billion, which had an unfavorable impact on diluted EPS of $0.13;

•restructuring charges of $0.2 billion, net of tax, which had an unfavorable impact on diluted EPS of $0.12;

•a charge of $0.1 billion, net of tax, related to a customer bankruptcy, which had an unfavorable impact on diluted EPS of $0.09; and

Net income attributable to common shareowners for 2023 includes the following:

•charge associated with the Powder Metal Matter of $2.2 billion, net of tax and partner share, which had an unfavorable impact on diluted EPS of $1.55;

•acquisition accounting adjustments of $1.6 billion, net of tax, which had an unfavorable impact on diluted EPS of $1.09;

•restructuring charges of $0.2 billion, net of tax, which had an unfavorable impact on diluted EPS of $0.13; and

•charges related to a customer insolvency of $0.1 billion, net of tax and noncontrolling interest, which had an unfavorable impact on diluted EPS of $0.08.

SEGMENT REVIEW

For a detailed description of our businesses, see “Business Segments” within Item 1. “Business” of this Form 10-K.

Segments are generally based on the management structure of the businesses and the grouping of similar operations, based on capabilities and technologies, where each management organization has general operating autonomy over diversified products and services. Segment Total net sales and Operating profit (loss) include intercompany sales and profit, which are ultimately eliminated within Eliminations and other, which also includes certain smaller non-reportable segments. Segment results exclude certain acquisition accounting adjustments, the FAS/CAS operating adjustment, and certain corporate expenses, as further discussed below.

We present a FAS/CAS operating adjustment outside of segment results, which represents the difference between the service cost component of our pension and postretirement benefit (PRB) expense under the Financial Accounting Standards (FAS) requirements of U.S. GAAP and our pension and PRB expense under U.S. government Cost Accounting Standards (CAS) primarily related to our Raytheon segment. While the ultimate liability for pension and PRB costs under FAS and CAS is similar, the pattern of cost recognition is different. Over time, we generally expect to recover the related Raytheon pension and PRB liabilities through the pricing of our products and services to the U.S. government. Collins and Pratt & Whitney generally record pension and PRB expense on a FAS basis.

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Given the nature of our business, we believe that Total net sales and Operating profit (loss) (and the related operating profit (loss) margin percentage), which we disclose and discuss at the segment level, are most relevant to an understanding of management’s view of our segment performance, as described below.

We provide the organic change in Net sales and Operating profit (loss) for our segments as discussed above in “Results of Operations.” We believe that these non-GAAP measures are useful to investors because they provide transparency to the underlying performance of our business, which allows for better year-over-year comparability. For Pratt & Whitney only, Other also includes the transactional impact of foreign exchange hedging at Pratt & Whitney Canada due to its significance to Pratt & Whitney’s overall operating results.

Total Net Sales. Total net sales by segment were as follows:

(dollars in millions)

~~2024~~2025

~~2023~~2024

~~2022~~2023

Collins Aerospace

2830,~~284~~196

2628,~~253~~284

2326,~~052~~253

Pratt & Whitney (1)

2832,~~066~~916

1828,~~296~~066

2018,~~530~~296

Raytheon

2628,~~713~~043

26,~~350~~713

2526,~~176~~350

Total segment

8391,~~063~~155

7083,~~899~~063

6870,~~758~~899

Eliminations and other

(2,~~325~~552)

(12,~~979~~325)

(1,~~684~~979)

Consolidated

8088,~~738~~603

6880,~~920~~738

6768,~~074~~920

(1) 2023 includes the reduction in sales from the Powder Metal Matter.

Operating Profit (Loss). Operating profit (loss) by segment was as follows:


(dollars in millions)	2025		2024		2023
Collins Aerospace	$	4,923	$	4,135	$	3,825
Pratt & Whitney (1)	2,596		2,015		(1,455)
Raytheon	3,227		2,594		2,379
Total segment	10,746		8,744		4,749
Eliminations and other	54		(48)		(42)
Corporate expenses and other unallocated items (2)	(248)		(933)		(275)
FAS/CAS operating adjustment	753		833		1,127
Acquisition accounting adjustments	(2,005)		(2,058)		(1,998)
Consolidated	$	9,300	$	6,538	$	3,561

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(dollars in millions)	2024		2023		2022
Collins Aerospace	$	4,135	$	3,825	$	2,816
Pratt & Whitney (1)	2,015		(1,455)		1,075
Raytheon	2,594		2,379		2,448
Total segment	8,744		4,749		6,339
Eliminations and other	(48)		(42)		(23)
Corporate expenses and other unallocated items (2) (3)	(933)		(275)		(318)
FAS/CAS operating adjustment	833		1,127		1,399
Acquisition accounting adjustments	(2,058)		(1,998)		(1,893)
Consolidated	$	6,538	$	3,561	$	5,504

(1) 2023 includes the impacts from the Powder Metal Matter.

(2) ~~2022~~Includes ~~includes~~a $0.9 billion charge in the ~~net~~second ~~expenses~~quarter of 2024 related to the ~~U.S.~~Resolution ~~Army’s~~of ~~Lower~~Certain ~~Tier~~Legal ~~Air~~Matters. ~~and~~See ~~Missile~~“Note 1: ~~Defense~~Basis ~~Sensor~~of ~~(LTAMDS)~~Presentation ~~program.~~and ~~Beginning~~Summary inof ~~2023,~~Accounting ~~LTAMDS~~Principles” ~~results~~within ~~are~~Item ~~included~~8 inof ~~the~~this ~~Raytheon~~Form ~~segment.~~10-K for additional information.

(3) Includes a $0.9 billion charge in the second quarter of 2024 related to the Resolution of Certain Legal Matters. See “Note 1: Basis of Presentation and Summary of Accounting Principles” within Item 8 of this Form 10-K for additional information.

Included in segment Operating profit (loss) are Estimate at Completion (EAC) adjustments, which relate to changes in Operating profit and margin due to revisions to total estimated revenues and costs at completion. These changes may reflect improved or deteriorated operating performance, as well as changes in facts and assumptions related to contract options, contract modifications, incentive and award fees associated with program performance, customer activity levels, and other customer-directed changes. For a full description of our EAC process, refer to “Note 1: Basis of Presentation and Summary of Accounting Principles” within Item 8 of this Form 10-K. Given that we have thousands of individual contracts, and given the types and complexity of the assumptions and estimates we must make on an on-going basis and the nature of the work required to be performed under our contracts, we have both favorable and unfavorable EAC adjustments in the ordinary course.

We had the following net EAC adjustments for the periods presented:

(dollars in millions)

~~2024~~2025

~~2023~~2024

~~2022~~2023

Net EAC adjustments

(~~473~~386)

(~~648~~473)

(37648)

The change in net EAC adjustments of $0.21 billion in ~~2024~~2025 compared to ~~2023~~2024 was primarily due to favorable changes in net EAC adjustments at ~~Pratt & Whitney and~~ Raytheon, partially offset by unfavorable changes in net EAC adjustments at ~~Collins~~Pratt & Whitney. The change at ~~Pratt~~Raytheon ~~was~~benefited ~~primarily~~from ~~driven by~~ the absence of a $~~0.1~~53 ~~billion~~million unfavorable ~~impact~~adjustment ~~recorded~~ in the third quarter of ~~2023~~2024, aswith athe ~~result~~remaining ofchange ~~increased~~spread ~~cost~~across tonumerous ~~our~~individual ~~aftermarket contracts resulting from the Powder Metal Matter~~programs. The ~~change~~unfavorable changes at ~~Collins~~Pratt ~~was~~& Whitney were spread across numerous ~~individual~~ programs, with no individual or common significant driver. ~~The change at Raytheon was primarily due to improvement in net EAC adjustments related to certain fixed price development contracts.~~

InThe ~~addition~~change ~~to the amounts included~~ in the table above, during the fourth quarter of 2024, as a result of obtaining critical licenses and further regulatory approvals, we restarted work under certain contracts with a Middle East customer and began recognizing revenue on these contracts. As a result, Raytheon recognized a net ~~operating~~EAC ~~profit~~adjustments ~~benefit~~ of $0.12 billion ~~primarily~~in ~~related to reserve and contract loss provision adjustments. Additionally, during the second quarter of~~ 2024, ~~Raytheon~~compared ~~initiated~~to ~~the~~2023 ~~termination~~was ofprimarily adue ~~fixed price development contract with a foreign customer (Raytheon Contract Termination) and recognized a $0.6 billion charge related~~ to ~~the~~favorable ~~impact~~changes ofin ~~the~~net ~~termination.~~EAC ~~The~~adjustments ~~charge~~at ~~included~~Pratt ~~the~~& ~~write-off~~Whitney ~~of remaining contract assets~~ and ~~the~~Raytheon, ~~estimated~~partially ~~settlement~~offset ~~with~~by ~~the~~unfavorable ~~customer.~~changes ~~The contract termination was completed and customer settlement occurred during the fourth quarter of 2024,~~ in ~~line~~net ~~with~~EAC ~~previously~~adjustments ~~accrued~~at ~~amounts~~Collins.

The change in net EAC adjustments of $0.6 billion in 2023 compared to 2022 was primarily due to unfavorable changes in net EAC adjustments at Pratt & Whitney and to a lesser extent at Collins and Raytheon. Included in the change at Pratt & Whitney was the unfavorable impact of $0.1 billion recorded in the third quarter of 2023 as a result of increased cost to our aftermarket contracts resulting from the Powder Metal Matter and an unfavorable impact of approximately $60 million recorded in the fourth quarter of 2023 as a result of increased cost on a military program. The change in net EAC adjustments at Pratt & Whitney also includes the absence of a $50 million favorable contract adjustment resulting from a contract modification on a commercial aftermarket program in the second quarter of 2022. The change at Collins was spread across numerous individual programs, with no individual or common significant driver. The change at Raytheon was primarily due to unfavorable changes in net EAC adjustments related to certain fixed price development contracts and $51 million of unfavorable EAC adjustments related to significant contract options exercised in 2023. 43

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The change at Pratt was primarily driven by the absence of a $0.1 billion unfavorable impact recorded in the third quarter of 2023 as a result of increased cost to our aftermarket contracts resulting from the Powder Metal Matter. The change at Collins was spread across numerous individual programs, with no individual or common significant driver. The change at Raytheon was primarily due to improvement in net EAC adjustments related to certain fixed price development contracts.

In addition to the amounts included in the table above, during the fourth quarter of 2024, as a result of obtaining critical licenses and further regulatory approvals, we restarted work under certain contracts with a Middle East customer and began recognizing revenue on these contracts. As a result, Raytheon recognized a net operating profit benefit of $0.1 billion primarily related to reserve and contract loss provision adjustments. Additionally, during the second quarter of 2024, Raytheon recognized a $0.6 billion charge related to the impact of the Raytheon Contract Termination. The charge included the write-off of remaining contract assets and the estimated settlement with the customer. The contract termination was completed and customer settlement occurred during the fourth quarter of 2024, in line with previously accrued amounts.

Significant EAC adjustments, when they occur, are discussed in each business segment’s discussion below.

Backlog and Bookings. Total backlog was approximately $~~218~~268 billion and $~~196~~218 billion as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively. Our backlog by segment, which excludes intercompany backlog, was as follows at December 31:

(dollars in billions)	~~2024~~2025		~~2023~~2024
Collins Aerospace	$	3642	$	3036
Pratt & Whitney	~~119~~151		~~114~~119
Raytheon	6375		5263
Total backlog	$	~~218~~268	$	~~196~~218

Total backlog includes commercial backlog of $~~125~~161 billion and $~~118~~125 billion as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively, and defense backlog of $93107 billion and $7893 billion as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

Backlog, which is equivalent to our RPO for our sales contracts, represents the aggregate dollar value of firm orders for which products have not been provided or service has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., IDIQ type contracts). Backlog generally increases with bookings and/or orders and generally decreases as sales are recognized on these bookings and is affected by changes in foreign exchange rates, as well as contract cancellations and terminations, and cost underruns on cost-type contracts as discussed further below.

We believe bookings are an important measure of future performance for our defense businesses. Our defense operations consist primarily of our Raytheon business and operations in the defense businesses within our Collins and Pratt & Whitney segments. Defense bookings were approximately $61 billion, ~~$51~~in ~~billion,~~both 2025 and 2024 and $4751 billion ~~for~~in ~~2024,~~ 2023~~, and 2022 respectively~~.

Defense bookings generally represent the dollar value of new external defense contracts awarded to us during the reporting period and include firm orders for which funding has not been appropriated. Defense bookings exclude unexercised contract options and potential orders under ordering-type contracts (e.g., IDIQ type contracts). We reflect contract cancellations and terminations, as well as the impact of changes in foreign exchange rates, directly as an adjustment to backlog in the period in which the cancellation or termination occurs and the impact is determinable. Contract cancellations and terminations also include contract underruns on cost-type programs.

Collins Aerospace

										% Change
(dollars in millions)	~~2024~~2025			~~2023~~2024			~~2022~~2023			~~2024~~2025 compared with ~~2023~~2024		~~2023~~2024 compared with ~~2022~~2023
Net sales	$	2830,~~284~~196		$	2628,~~253~~284		$	2326,~~052~~253		87	%	148	%
Operating profit	4,~~135~~923			34,~~825~~135			23,~~816~~825			819	%	368	%
Operating profit margins	1416.63		%	14.6		%	1214.26		%

2025 Compared with 2024

Factors Contributing to Total Change

(dollars in millions)

Organic (1)

Acquisitions /Divestitures, net

RestructuringCosts

Other

Total Change

Net sales

2,~~096~~606

(18754)

—

~~(47)~~60

21,~~031~~912

Operating profit

~~618~~495

(356)

24(157)

~~(329)~~506

~~310~~788

(1) See “Segment Review” above for definition of organic. A reconciliation of these measures to reported U.S. GAAP amounts is provided in the table above.

	Factors Contributing to Total Change
(dollars in millions)	Organic (1)		Acquisitions /Divestitures, net		RestructuringCosts		Other		Total Change
Net sales	$	3,173	$	(48)	$	—	$	76	$	3,201
Operating profit	889		(2)		(50)		172		1,009

(1) See “Segment Review” above for definition of organic. A reconciliation of these measures to reported U.S. GAAP amounts is provided in the table above.

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2024 Compared with 2023


	Factors Contributing to Total Change
(dollars in millions)	Organic (1)		Acquisitions / Divestitures, net		Restructuring Costs		Other		Total Change
Net sales	$	2,096	$	(18)	$	—	$	(47)	$	2,031

Operating profit	618		(3)		24		(329)		310

(1) See “Segment Review” above for definition of organic. A reconciliation of these measures to reported U.S. GAAP amounts is provided in the table above.

2025 Compared with 2024

The organic net sales increase of $2.6 billion in 2025 compared to 2024 primarily relates to higher commercial aerospace aftermarket sales of $1.4 billion, higher defense sales of $0.7 billion and higher commercial OEM sales of $0.5 billion. The increase in commercial aftermarket sales was driven by higher volume across all aftermarket sales channels. The increase in defense sales was due to higher volume across multiple programs and platforms. The increase in commercial OEM sales was primarily driven by higher volume on widebody and narrowbody.

The organic operating profit increase of $0.5 billion in 2025 compared to 2024 was primarily due to higher commercial aerospace operating profit of $0.3 billion, principally driven by the higher sales volume discussed above, partially offset by the impact of tariffs and unfavorable commercial OEM mix. Defense operating profit increased $0.1 billion in 2025 compared to 2024 due to higher sales volume. Lower research and development expenses were partially offset by higher selling, general and administrative expenses.

The decrease in net sales due to Acquisitions/Divestitures, net from 2025 compared to 2024 primarily relates to the sale of the actuation and flight control business completed in 2025, the sale of Simmonds Precision Products completed in 2025, and the sale of the Goodrich Hoist & Winch business completed in 2024.

The increase in Other operating profit of $0.5 billion in 2025 compared to 2024 primarily relates to higher net gains on the sale of businesses, as referenced above, of $0.3 billion in 2025 as compared to $0.1 billion in 2024. The increase is also driven by the absence of $0.2 billion of charges recorded in 2024 related to the recognition of unfavorable purchase commitments and an impairment of contract fulfillment costs that are no longer recoverable as a result of initiating alternative titanium sources, and the absence of a $0.2 billion charge related to the impairment of contract fulfillment costs due to a contract cancellation recognized in 2024.

The increase in restructuring costs from 2025 compared to 2024 relates to ongoing cost reduction efforts driven by various workforce reductions initiated in 2025.

2024 Compared with 2023

The organic net sales increase of $2.1 billion in 2024 compared to 2023 primarily relates to higher commercial aerospace aftermarket sales of $1.2 billion, higher defense sales of $0.8 billion, and higher commercial aerospace OEM sales of $0.1 billion. The increase in commercial aerospace sales was principally driven by continued growth in commercial air traffic, which has resulted in an increase in flight hours and increased OEM volume primarily within ~~wide-body~~widebody and regional aircraft, partially offset by decreased OEM volume in ~~narrow-body~~narrowbody aircraft. The defense sales increase was primarily due to higher volume across multiple programs and platforms.

The organic operating profit increase of $0.6 billion in 2024 compared to 2023 was primarily due to higher commercial aerospace operating profit of $0.4 billion, principally driven by the higher aftermarket sales volume discussed above, partially offset by unfavorable OEM mix. Defense operating profit increased $0.3 billion 2024 compared to 2023 due to the higher volume discussed above, partially offset by higher space program costs. The above increases were partially offset by $0.1 billion of higher research and development costs.

The decrease in Other operating profit of $0.3 billion in 2024 compared to 2023 was primarily driven by $0.2 billion of charges in the first quarter of 2024, related to the recognition of unfavorable purchase commitments and an impairment of contract fulfillment costs that are no longer recoverable as a result of initiating alternative titanium sources, $0.2 billion impairment of contract fulfillment costs in the fourth quarter of 2024 due to a contract cancellation, and the absence of net favorable customer settlements recorded in 2023. These decreases in Other operating profit were partially offset by a $0.1 billion net gain on the sale of the Goodrich Hoist & Winch business in the fourth quarter of 2024.

Restructuring actions relate to ongoing cost reduction efforts driven by various workforce reductions.

~~2023~~Defense ~~Compared~~Bookings ~~with~~– ~~2022~~In 2025, Collins recorded $12 billion in defense bookings, comprised of a number of smaller individual bookings under $0.5 billion.

The organic net sales increase of $3.2 billion in 2023 compared to 2022 primarily relates to higher commercial aerospace aftermarket sales of $2.1 billion, including increases across all aftermarket sales channels. These increases were principally driven by the continued recovery of commercial air traffic which resulted in an increase in flight hours. Commercial aerospace OEM sales increased $1.1 billion due to increased production rates in narrow-body, wide-body, and business jets. Military sales were relatively consistent in 2023 compared to 2022.45

The increase in Other net sales of $0.1 billion in 2023 compared to 2022 was primarily due to net favorable customer settlements in 2023, including a $0.1 billion favorable customer settlement recorded in the fourth quarter of 2023, partially offset by a $0.1 billion charge related to a customer litigation matter recorded in the third quarter 2023.

The organic operating profit increase of $0.9 billion in 2023 compared to 2022 was primarily due to higher commercial aftermarket volume and favorable mix, partially offset by lower commercial aerospace OEM as drop through on volume was more than offset by higher production costs. This increase in commercial aerospace operating profit was partially offset by $0.2 billion of higher selling, general, and administrative expenses and research and developments costs primarily due to increased employee-related costs. Military operating profit decreased $0.1 billion primarily due to unfavorable mix and higher production costs.

The increase in Other operating profit of $0.2 billion in 2023 compared to 2022 was primarily due to the absence of $0.1 billion of pre-tax charges related to global sanctions and export controls with respect to Russia recorded in 2022, the absence of $0.1 billion of charges associated with the disposition of two non-core businesses in 2022, and the net favorable customer settlements discussed above. The above items were partially offset by $0.1 billion of divestiture costs related to the pending sale of our actuation and flight control business.

See “Note 1: Basis of Presentation and Summary of Accounting Principles” within Item 8 of this Form 10-K for additional information on Russia sanctions. See “Note 2: Acquisitions and Dispositions” within Item 8 of this Form 10-K for further discussion on business dispositions.

Defense Bookings – In addition to a number of smaller bookings in 2024, Collins booked $2.2 billion to support the U.S. Air Force’s next-generation Survivable Airborne Operations Center, $470 million for Federal Aviation Administration (FAA) air traffic control automation system sustainment, and $391 million for F-35 landing gear Lots 18, 19, and 20.

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Pratt & Whitney

										% Change
(dollars in millions)	~~2024~~2025			~~2023~~2024			~~2022~~2023			~~2024~~2025 compared with ~~2023~~2024		~~2023~~2024 compared with ~~2022~~2023
Net sales	$	2832,~~066~~916		$	1828,~~296~~066		$	2018,~~530~~296		5317	%	~~(11)~~53	%
Operating profit (loss)	2,~~015~~596			(12,~~455)~~015			(1,~~075~~455)			NM29	%	~~(235)~~NM	%
Operating profit (loss) margins	7.29		%	(87.0)2		%	5(8.20)		%

NM = Not meaningful

2025 Compared with 2024


	Factors Contributing to Total Change
(dollars in millions)	Organic (1)		Acquisitions / Divestitures, net		Restructuring Costs		Other		Total Change
Net sales	$	4,810	$	—	$	—	$	40	$	4,850

Operating profit	448		—		81		52		581

(1) See “Segment Review” above for definition of organic. A reconciliation of these measures to reported U.S. GAAP amounts is provided in the table above.

2024 Compared with 2023


	Factors Contributing to Total Change
(dollars in millions)	Organic (1)		Acquisitions / Divestitures, net		Restructuring Costs		Other		Total Change
Net sales	$	4,386	$	—	$	—	$	5,384	$	9,770

Operating profit (loss)	559		—		(28)		2,939		3,470

(1) See “Segment Review” above for definition of organic. A reconciliation of these measures to reported U.S. GAAP amounts is provided in the table above.

	Factors Contributing to Total Change
(dollars in millions)	Organic (1)		Acquisitions /Divestitures, net		RestructuringCosts		Other		Total Change
Net sales	$	3,133	$	—	$	—	$	(5,367)	$	(2,234)
Operating profit (loss)	410		—		(54)		(2,886)		(2,530)

2025 Compared with 2024

~~(1) See~~The ~~“Segment~~organic ~~Review”~~net ~~above~~sales ~~for~~increase ~~definition~~ of ~~organic~~$4.8 Abillion ~~reconciliation~~in 2025 compared to 2024 was primarily driven by higher commercial aftermarket sales of ~~these~~$2.9 ~~measures~~billion primarily driven by higher volume. Also contributing to ~~reported~~the Uorganic net sales increase was higher commercial OEM sales of $0.S9 billion driven by favorable mix and higher volume. ~~GAAP~~Military ~~amounts~~sales isincreased ~~provided~~$1.0 inbillion, primarily due to higher production volume on the ~~table~~F135 ~~above~~program.

The organic operating profit increase of $0.4 billion in 2025 compared to 2024 reflects higher commercial aerospace operating profit of $0.5 billion and higher military operating profit of $0.2 billion. Higher commercial aftermarket volume and favorable commercial OEM mix more than offset the impacts of unfavorable aftermarket mix and higher tariffs and production costs. The increase in military operating profit was driven by the higher sales volume discussed above, as well as favorable mix and the absence of an unfavorable EAC adjustment of approximately $50 million in the fourth quarter of 2024, partially offset by higher production costs. These increases were partially offset by higher selling and general administrative expenses of $0.2 billion and the absence of a fourth quarter 2024 insurance recovery of approximately $0.1 billion.

The increase in Other operating profit in 2025 compared to 2024 primarily relates to a customer bankruptcy charge of $0.1 billion in 2025 compared to a $0.2 billion charge in 2024.

2024 Compared with 2023

The organic net sales increase of $4.4 billion in 2024 compared to 2023 primarily reflects higher commercial OEM sales of $1.7 billion primarily driven by favorable mix on higher volume and higher commercial aftermarket sales of $1.6 billion primarily driven by higher volume. Military sales increased $1.1 billion, primarily due to higher sustainment and production volume across multiple platforms.

The Other net sales ~~increase~~decrease of $5.4 billion in 2024 compared to 2023 was primarily relates to the absence of a charge recognized in the third quarter of 2023 related to the Powder Metal Matter.

The organic operating profit (loss) increase of $0.6 billion in 2024 compared to 2023 reflects higher commercial aerospace operating profit of $0.4 billion driven by favorable mix on higher large commercial OEM volume which was partially offset by higher OEM production costs. Commercial aerospace operating profit also benefited from higher commercial aftermarket volume, which was partially offset by the impact of a shift in aftermarket mix towards higher GTF volume as well as two favorable contract matters in 2023 totaling $0.1 billion that did not repeat in 2024. The increase in military operating profit of $0.2 billion was driven by the increases from the sales volume discussed above, as well as favorable sustainment mix, partially offset by higher production costs. Military operating profit also benefited from the absence of an unfavorable EAC adjustment of approximately $60 million in the fourth quarter of 2023, which was partially offset by an unfavorable EAC adjustment of approximately $50 million in the fourth quarter of 2024. Higher research and development expenses and selling, general, and administrative expenses were partially offset by an insurance recovery of approximately $0.1 billion in the fourth quarter of 2024.

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of approximately $60 million in the fourth quarter of 2023, which was partially offset by an unfavorable EAC adjustment of approximately $50 million in the fourth quarter of 2024. Higher research and development expenses and selling, general, and administrative expenses were partially offset by an insurance recovery of approximately $0.1 billion in the fourth quarter of 2024.

The change in Other operating profit (loss) of $2.9 billion in 2024 compared to 2023 reflects the absence of a charge recognized in the third quarter of 2023 related to the Powder Metal Matter of $2.9 billion and a $0.2 billion charge related to a customer insolvency in the second quarter of 2023, partially offset by a $0.2 billion charge related to a customer bankruptcy in the fourth quarter of 2024.

Restructuring actions relate to ongoing cost reduction efforts including workforce reductions and the consolidation of facilities.

~~2023~~Defense ~~Compared~~Bookings ~~with~~– ~~2022~~In 2025, Pratt & Whitney recorded $9 billion in defense bookings. In addition to a number of smaller individual bookings, Pratt & Whitney booked $2.9 billion for F135 production and $2.4 billion for F135 sustainment.

Raytheon

The organic net sales increase of $3.1 billion in 2023 compared to 2022 primarily reflects higher commercial aftermarket sales of $1.9 billion, primarily due to an increase in volume, content, and favorable mix. The increase also includes higher commercial OEM sales of $0.9 billion, primarily driven by higher volume and favorable mix. Military sales increased $0.3 billion, primarily due to higher F135 sustainment volume.


										% Change
(dollars in millions)	2025			2024			2023			2025 compared with 2024		2024 compared with 2023
Net sales	$	28,043		$	26,713		$	26,350		5	%	1	%
Operating profit	3,227			2,594			2,379			24	%	9	%
Operating profit margins	11.5		%	9.7		%	9.0		%
Defense Bookings	$	39,975		$	39,235		$	31,889		2	%	23	%

502025 Compared with 2024

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	Factors Contributing to Total Change
(dollars in millions)	Organic (1)		Acquisitions / Divestitures, net		Restructuring Costs		Other		Total Change
Net sales	$	1,715	$	(460)	$	—	$	75	$	1,330
Operating Profit	563		(34)		32		72		633

~~The~~(1) See ~~Other~~“Segment ~~net~~Review” ~~sales~~above ~~decrease~~for definition of $5organic.4 ~~billion~~A inreconciliation ~~2023~~of ~~compared~~these measures to ~~2022~~reported ~~was~~U.S. ~~primarily~~GAAP ~~due~~amounts tois ~~the~~provided ~~charge recognized~~ in the ~~third~~table ~~quarter of 2023 related to the Powder Metal Matter~~above.

The organic operating profit increase of $0.4 billion in 2023 compared to 2022 was primarily driven by higher commercial aerospace operating profit of $0.6 billion, principally due to the aftermarket sales increase discussed above, partially offset by lower commercial OEM operating profit as the OEM volume increase combined with higher production costs more than offset the benefit from favorable mix. Commercial aerospace operating profit in 2023 also benefited from two favorable contract matters totaling $0.1 billion, which was partially offset by the absence of a prior year $50 million favorable contract adjustment resulting from a contract modification on a commercial aftermarket contract. Military operating profit was relatively consistent compared to 2022. The increase from the military sales volume was more than offset by higher production costs and an unfavorable EAC adjustment of $0.1 billion in the fourth quarter of 2023. Higher research and development expenses were partially offset by lower selling, general, and administrative expenses.

The change in Other operating profit (loss) of $2.9 billion in 2023 compared to 2022 was primarily due to the charge recognized in the third quarter of 2023 related to the Powder Metal Matter of $2.9 billion and a $0.2 billion charge related to a customer insolvency during the second quarter of 2023, partially offset by the absence of $0.2 billion of pre-tax charges recorded in the first quarter of 2022 related to global sanctions on and export controls with respect to Russia. See “Note 1: Basis of Presentation and Summary of Accounting Principles” within Item 8 of this Form 10-K for additional information on Russia sanctions.

Defense Bookings – In addition to a number of smaller bookings, in 2024 Pratt & Whitney booked $2.3 billion for F117 sustainment, $2.2 billion for F135 sustainment, $1.5 billion for F135 ECU development, $729 million for F135 production, and $475 million for F119 sustainment.

										% Change
(dollars in millions)	2024			2023			2022			2024 compared with 2023		2023 compared with 2022
Net sales	$	26,713		$	26,350		$	25,176		1	%	5	%
Operating profit	2,594			2,379			2,448			9	%	(3)	%
Operating profit margins	9.7		%	9.0		%	9.7		%
Defense Bookings	$	39,235		$	31,889		$	30,479		23	%	5	%

2024 Compared with 2023


	Factors Contributing to Total Change
(dollars in millions)	Organic (1)		Acquisitions / Divestitures, net		Restructuring Costs		Other		Total Change
Net sales	$	1,691	$	(1,274)	$	—	$	(54)	$	363
Operating Profit	352		(74)		6		(69)		215

(1) See “Segment Review” above for definition of organic. A reconciliation of these measures to reported U.S. GAAP amounts is provided in the table above.

~~2023~~2025 Compared with ~~2022~~2024

	Factors Contributing to Total Change
(dollars in millions)	Organic (1)		Acquisitions /Divestitures, net		RestructuringCosts		Other		Total Change
Net sales	$	1,292	$	(95)	$	—	$	(23)	$	1,174
Operating Profit	(58)		—		(34)		23		(69)

The organic net sales increase of $1.7 billion in 2025 compared to 2024 was primarily due to higher net sales of $1.6 billion from land and air defense systems programs driven by higher net sales on Patriot programs, international National Advanced Surface-to-Air Missile System (NASAMS) programs, and Lower Tier Air and Missile Defense Sensor (LTAMDS) programs. Also contributing to the increase was higher net sales of $0.7 billion from naval power programs primarily due to higher net sales on Evolved SeaSparrow Missile (ESSM) programs, SPY-6 radar programs, and certain classified programs. These increases were partially offset by lower net sales of $0.3 billion within air and space defense systems, primarily driven by lower development program volume partially offset by higher net sales on advanced medium-range air-to-air missile (AMRAAM) programs. Additionally, the organic net sales increase was partially offset by the absence of $0.3 billion of sales recognized in the fourth quarter of 2024 associated with the restart of certain contracts with a Middle East customer.

~~(1) See~~The ~~“Segment~~increase ~~Review”~~in ~~above~~Other ~~for~~net ~~definition~~sales of ~~organic~~$0.1 Abillion ~~reconciliation~~in of2025 ~~these~~compared ~~measures~~ to ~~reported~~2024 Uwas primarily driven by the absence of $0.S.1 ~~GAAP~~billion ~~amounts~~charge isrelated ~~provided~~to Raytheon Contract Termination initiated in the ~~table~~second ~~above~~quarter of 2024.

The organic operating profit increase of $0.6 billion in 2025 compared to 2024 ~~Compared~~was ~~with~~primarily ~~2023~~due to a favorable change in mix and other performance of $0.3 billion, a favorable change in net EAC adjustments of $0.2 billion and higher volume of approximately $0.1 billion. The favorable change in mix and other performance was primarily driven by increased production

The organic net sales increase of $1.7 billion in 2024 compared to 2023 was primarily due to higher net sales of $1.4 billion from land and air defense systems programs driven by higher net sales on certain international Patriot programs, certain international National Advanced Surface-to-Air Missile System (NASAMS) programs, and Counter-Unmanned Aircraft Systems (C-UAS) programs. Also contributing to the increase was higher net sales of $0.4 billion from advanced technology programs primarily driven by higher volume on classified programs and on a development program. Additionally, the organic net sales increase includes $0.3 billion of sales associated with the restart of certain contracts with a Middle East customer. 47

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~~These~~on ~~increases~~Patriot ~~were~~programs. ~~partially~~The ~~offset~~favorable bychange ~~lower~~in net ~~sales~~EAC ofadjustments ~~$0.5~~was ~~billion~~spread ~~from~~across ~~air~~numerous programs and ~~space~~benefited ~~defense~~from ~~systems~~the ~~programs~~absence ~~primarily~~of ~~due~~a to$53 million unfavorable adjustment in the ~~completion~~third quarter of ~~certain~~2024 ~~programs,~~related ~~and~~to ~~the~~cost ~~timing~~increases ofon a ~~prior~~classified ~~year~~ program. ~~award~~The increase in volume was principally driven by the higher net sales discussed above.

The decrease in ~~Other~~ net sales inand ~~2024~~operating ~~compared~~profit due to ~~2023~~Acquisitions ~~was~~/ ~~primarily~~Divestitures, ~~driven~~net byin ~~$0.1~~2025 ~~billion~~compared ~~related~~to 2024 primarily relates to the ~~Raytheon~~sale ~~Contract~~of ~~Termination~~the ~~initiated~~CIS business completed in the ~~second~~first quarter of 2024.

The increase in Other operating profit of $0.1 billion in 2025 compared to 2024 was primarily due to the absence of a $0.6 billion charge related to the Raytheon Contract Termination initiated in the second quarter of 2024, partially offset by the absence of a $0.4 billion gain on sale of the CIS business in the first quarter of 2024, and a $0.1 billion net benefit primarily related to reserve and contract loss provision adjustments recognized in the fourth quarter of 2024 as a result of restarting work under certain contracts with a Middle East customer.

2024 Compared with 2023

The organic net sales increase of $1.7 billion in 2024 compared to 2023 was primarily due to higher net sales of $1.4 billion from land and air defense systems programs driven by higher net sales on certain international Patriot programs, certain international NASAMS programs, and Counter-Unmanned Aircraft Systems (C-UAS) programs. Also contributing to the increase was higher net sales of $0.4 billion from advanced technology programs primarily driven by higher volume on classified programs and on a development program. Additionally, the organic net sales increase includes $0.3 billion of sales associated with the restart of certain contracts with a Middle East customer. These increases were partially offset by lower net sales of $0.5 billion from air and space defense systems programs primarily due to the completion of certain programs, and the timing of a prior year program award.

The decrease in Other net sales in 2025 compared to 2024 was primarily driven by $0.1 billion related to the Raytheon Contract Termination initiated in the second quarter of 2024.

The organic operating profit increase of $0.4 billion in 2024 compared to 2023 was primarily due to higher volume of $0.2 billion primarily driven by the net sales increases noted above and an improvement in net EAC adjustments of $0.2 billion. The change in net EAC adjustments was primarily due to improvement in net EAC adjustments related to certain fixed price development contracts. Included in the change in net EAC adjustments was a benefit from the absence of a $51 million unfavorable adjustment in 2023 related to significant contract options exercised, which was offset by a $53 million unfavorable EAC adjustment in the third quarter of 2024 related to cost increases on a classified program.

The decrease in net sales and operating profit due to ~~acquisitions~~Acquisitions / ~~divestitures~~Divestitures, net in 2024 compared to 2023 primarily relates to the sale of the CIS business completed in the first quarter of 2024.

The decrease in Other operating profit in 2024 compared to 2023 was primarily driven by $0.6 billion related to the Raytheon Contract Termination initiated in the second quarter of 2024, partially offset by a $0.4 billion gain on the sale of the CIS business in the first quarter of 2024, and a $0.1 billion net benefit primarily related to reserve and contract loss provision adjustments recognized in the fourth quarter of 2024 as a result of restarting work under certain contracts with a Middle East customer.

~~2023~~Defense ~~Compared~~Backlog ~~with~~and ~~2022~~Bookings– Backlog was $75 billion at December 31, 2025 compared to $63 billion at December 31, 2024. In 2025, Raytheon recorded $40 billion in defense bookings. In addition to a number of smaller individual bookings, Raytheon booked $2.5 billion on several contracts to provide Guidance Enhanced Missiles (GEM-T) and Patriot launchers for international customers and the U.S. Army, $2.1 billion to provide AMRAAM to the U.S. Air Force, U.S. Navy, and international customers, $1.5 billion for low-rate initial production (LRIP) of LTAMDS for the U.S. Army and Poland, $1.2 billion for Iron Dome Tamir production for an international customer, $1.2 billion to provide Patriot systems for Spain, $1.1 billion for AIM-9X Sidewinder Block II short-range air-to-air missiles for the U.S. Navy and international customers, $901 million to provide Standard Missile-3 (SM-3) for the Missile Defense Agency (MDA), $647 million for a SPY-6 Hardware Production and Sustainment contract for the U.S. Navy, $581 million for Next Generation Jammer Mid-Band (NGJ-MB) for the U.S. Navy and the Royal Australian Air Force, $556 million to provide NASAMS to an international customer, $529 million to provide Patriot systems for the Netherlands, $517 million to provide Stinger missiles to the U.S. Army and international customers, $513 million to provide Tomahawk to the U.S. Navy, and $5.9 billion on a number of classified contracts.

The organic net sales increase of $1.3 billion in 2023 compared to 2022 was primarily due to higher net sales of $0.5 billion from advanced technology programs, $0.3 billion from air and space defense systems programs, $0.2 billion from cybersecurity, intelligence and services programs, and $0.2 billion from naval power programs. The increase in advanced technology programs includes higher net sales on an advanced development program awarded in the third quarter of 2022, and higher net sales on certain classified programs awarded in 2022. The increase in air and space defense systems programs includes higher net sales on the StormBreaker program, driven by awards in the first and fourth quarters of 2023 and higher net sales on the Advanced Medium Range Air-to-Air Missile (AMRAAM) program, driven by an award in the second quarter of 2023. The increase in cybersecurity, intelligence and services programs was driven by certain classified programs as well as federal and civil programs. The increase in naval power programs was due to higher volumes on Naval Strike Missile and AIM-9X programs.

The organic operating profit decrease of $0.1 billion in 2023 compared to 2022 was primarily due to an unfavorable change in mix and other performance of $0.1 billion, and an unfavorable net change in EAC adjustments of $0.1 billion, partially offset by higher volume of $0.2 billion. The unfavorable change in mix and other performance was primarily driven by an expected decline in certain higher margin international programs and higher volume on various lower margin programs including early production phase programs. The net change in EAC adjustments was primarily due to unfavorable changes in net EAC adjustments related to certain fixed price development contracts and approximately $50 million of unfavorable EAC adjustments related to significant contract options exercised in 2023. The increase in volume was principally driven by the higher net sales discussed above.

The increase in Other operating profit in 2023 compared to 2022 was primarily driven by the absence of a $42 million charge in 2022 associated with a divestiture of a small non-core naval power business, with the remaining change spread across multiple items.

The decrease in net sales due to acquisitions / divestitures, net in 2023 compared to 2022 primarily relates to the divestiture of a small non-core naval power business in the first quarter of 2023.

Restructuring actions relate to ongoing cost reduction efforts including workforce reductions.

Defense Backlog and Bookings– Backlog was $63 billion at December 31, 2024 compared to $52 billion at December 31, 2023. Included in the change in backlog was a $1.1 billion reduction related to the sale of the CIS business and a $0.9 billion increase related to restarting work on certain contracts with a Middle East customer, as discussed above. In addition to a number of smaller bookings, in 2024, Raytheon booked $2.4 billion to provide Patriot Air Defense systems to Germany, $1.9 billion for low-rate initial production of LTAMDS for the U.S. Army and Poland, $1.6 billion to provide Standard Missile 3 (SM-3) to the U.S. Navy and international customers, $1.4 billion to provide Guidance Enhanced Missiles (GEM-T) for NATO Support and Procurement Agency (NSPA), $1.2 billion to provide AMRAAM to the U.S. Navy, U.S. Air Force and international customers, $1.0 billion to provide Evolved SeaSparrow Missile (ESSM) for the U.S. Navy and international consortium partners, $848 million to provide Patriot Air Defense systems, including GEM-T missiles, to Romania, $763 million to provide Stinger missiles to NSPA and Poland, $737 million to provide AIM-9X Sidewinder short-range air-to-air missiles for the U.S. Navy,

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U.S. Air Force, and international customers, $639 million to produce AN/SPY-6(V) radars for the U.S. Navy, $623 million to provide GEM-T for an international customer, $591 million for Next Generation Jammer Mid-Band (NGJ-MB) for the U.S. Navy and the Royal Australian Air Force, $538 million to provide Javelin for the U.S. Army and international customers, $530 million to provide Patriot launchers for Poland, $479 million to provide GEM-T for an international customer, $473 million for an Advanced Tactical Electro-Optical Infrared (EO/IR) system for the U.S. Air Force, $453 million to provide GEM-T for an international customer, $393 million to design and build the Landsat Next Instrument Suite (LandIS) for NASA, $333 million to provide Standard Missile 6 (SM-6) for the U.S. Navy, $301 million to provide Tomahawk to the U.S. Navy and international customers, $282 million to provide Stormbreaker to the U.S. Air Force, $282 million to provide NASAMS for Ukraine, $272 million for Standard Missile II (SM-2) provisioned items and ordered spares for the U.S. Navy, $251 million to provide GEM-T for an international customer, and $5.7 billion on a number of classified contracts.

Corporate and Eliminations and other

Eliminations and other reflects the elimination of sales, other income, and operating profit transacted between segments, as well as the operating results of certain smaller operations.

Corporate expenses and other unallocated items consists of costs not considered part of management’s evaluation of reportable segment operating performance, including certain unallowable costs and reserves. In addition, in 2022, net costs associated with corporate research and development related to the LTAMDS program were included in Corporate expenses and other unallocated items. Beginning in 2023, the remaining net costs associated with the LTAMDS program are reflected within the Raytheon segment.48

	Net Sales						Operating Profit
(dollars in millions)	2024		2023		2022		2024		2023		2022
Eliminations and other	$	(2,325)	$	(1,979)	$	(1,684)	$	(48)	$	(42)	$	(23)
Corporate expenses and other unallocated items	—		—		—		(933)		(275)		(318)

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	Net Sales						Operating Profit
(dollars in millions)	2025		2024		2023		2025		2024		2023
Eliminations and other	$	(2,552)	$	(2,325)	$	(1,979)	$	54	$	(48)	$	(42)
Corporate expenses and other unallocated items	—		—		—		(248)		(933)		(275)

The increase in eliminations and other net sales of $0.2 billion in 2025 compared to 2024 was primarily due to an increase in intersegment eliminations, principally driven by Collins. The change in eliminations and other operating profit of $0.1 billion in 2025 compared to 2024 was primarily due to gains related to the increase in fair value on investments recognized in 2025.

The increase in eliminations and other net sales of $0.3 billion in 2024 compared to 2023 was primarily due to an increase in intersegment eliminations, principally driven by Collins. Eliminations and other operating profit in 2024 was relatively consistent with 2023.

The ~~increase~~change in ~~eliminations~~corporate expenses and other ~~net~~unallocated ~~sales~~items of $0.37 billion in ~~2023~~2025 compared to ~~2022~~2024 was primarily due to anthe ~~increase~~absence of a $0.9 billion charge related to the Resolution of Certain Legal Matters recorded in ~~intersegment~~the ~~eliminations~~second quarter of 2024 related to the Resolution of Certain Legal Matters, ~~principally~~partially ~~driven~~offset by ~~Collins.~~higher ~~Eliminations~~selling, general and ~~other~~administrative ~~operating~~expenses ~~profit~~of $0.1 billion in ~~2023~~2025 ~~was~~and ~~relatively~~the ~~consistent~~absence ~~with~~of ~~2022~~a $0.2 billion benefit from a tax related indemnity receivable recorded in the third quarter of 2024.

The change in corporate expenses and other unallocated items of $0.7 billion in 2024 compared to 2023 was primarily due to a $0.9 billion charge related to the Resolution of Certain Legal Matters recorded in the second quarter of 2024, partially offset by a $0.2 billion benefit from a tax related indemnity receivable recorded in the third quarter of 2024.

~~The change in corporate expenses and other unallocated items of~~ $~~43 million~~0.9 inbillion ~~2023~~charge ~~compared to 2022 was primarily due to a decrease in expenses~~ related to the ~~LTAMDS~~Resolution ~~program,~~of ~~which~~Certain ~~are~~Legal ~~included~~Matters recorded in the ~~Raytheon~~second ~~segment~~quarter ~~beginning~~of ~~in 2023~~2024, partially offset by ~~an increase in costs related to our segment realignment in 2023, with the remaining change spread across multiple items.~~

a $0.2 billion benefit from a tax related indemnity receivable recorded in the third quarter of 2024.

FAS/CAS operating adjustment

The segment results of Raytheon include pension and PRB expense as determined under U.S. government CAS, which we generally recover through the pricing of our products and services to the U.S. government. The difference between our CAS expense and the FAS service cost attributable to these segments under U.S. GAAP is the FAS/CAS operating adjustment. The FAS/CAS operating adjustment results in consolidated pension expense in operating profit equal to the service cost component of FAS expense under U.S. GAAP. The segment results of Collins and Pratt & Whitney generally include FAS service cost.

The CAS expense calculation is different from the FAS requirements and calculation methodology. While the ultimate liability for pension costs under FAS and CAS is similar, the pattern of cost recognition is different. Our CAS pension expense is comprised primarily of CAS service cost and amortization amounts resulting from demographic or economic experience different than expected, changes in assumptions, or changes in plan provisions. Unlike FAS, CAS expense is only recognized for plans that are not fully funded on a CAS basis. Consequently, if plans become or cease to be fully funded under CAS due to our asset or liability experience, our CAS expense will change accordingly.

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The components of the FAS/CAS operating adjustment were as follows:

(dollars in millions)

~~2024~~2025

~~2023~~2024

~~2022~~2023

FAS service cost (expense)

(~~138~~120)

(~~145~~138)

(~~336~~145)

CAS expense

~~971~~873

~~1,272~~971

1,~~735~~272

FAS/CAS operating adjustment

~~833~~753

~~1,127~~833

1,~~399~~127

The change in our FAS/CAS operating adjustment of $0.31 billion in ~~2024~~2025 compared to ~~2023~~2024 was driven by a decrease in CAS expense, primarily due to ~~the~~increases ~~recognition~~in ofthe ~~historical~~applicable CAS ~~gain/loss~~discount ~~experience.~~rates and reductions in administrative expenses paid by the pension plans.

The change in our FAS/CAS operating adjustment of $0.3 billion in ~~2023~~2024 compared to ~~2022~~2023 was driven by a ~~$0.5 billion~~ decrease in CAS expense, partially offset by a $0.2 billion decrease in FAS service cost. The decrease in CAS expense was primarily due to changes to the Raytheon Company domestic pension plans announced in December 2020 that were effective December 31, 2022, and the recognition of historical CAS gain/loss experience. Similarly, the decrease in FAS service cost was primarily due to changes to the Raytheon Company domestic pension plans announced in December 2020 that were effective December 31, 2022. Refer to “Note 10: Employee Benefit Plans” within Item 8 of this Form 10-K for additional information on the Raytheon Company domestic pension plan change.

expense, primarily due to the recognition of historical CAS gain/loss experience.

Acquisition accounting adjustments

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

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customer contractual obligations related to loss-making or below-market contracts acquired, and goodwill impairment, if applicable. These adjustments are not considered part of management’s evaluation of segment results.

The components of Acquisition accounting adjustments were as follows:

(dollars in millions)	~~2024~~2025		~~2023~~2024		~~2022~~2023
Amortization of acquired intangibles	$	(2,~~095~~050)	$	(2,~~021~~095)	$	(12,~~912~~021)
Amortization of property, plant, and equipment fair value adjustment	(4433)		(6044)		(8960)
Amortization of customer contractual obligations related to acquired loss-making and below-market contracts	8178		8381		~~108~~83
Acquisition accounting adjustments	$	(2,~~058~~005)	$	(12,~~998~~058)	$	(1,~~893~~998)

Acquisition accounting adjustments related to acquisitions in each segment were as follows:

(dollars in millions)

~~2024~~2025

~~2023~~2024

~~2022~~2023

Collins Aerospace

(~~833~~807)

(~~854~~833)

(~~865~~854)

Pratt & Whitney

(~~312~~384)

(~~287~~312)

(~~243~~287)

Raytheon

(~~913~~814)

(~~857~~913)

(~~785~~857)

Acquisition accounting adjustments

(2,~~058~~005)

(12,~~998~~058)

(1,~~893~~998)

LIQUIDITY AND FINANCIAL CONDITION

Acquisition accounting adjustments in 2024 and 2023 were relatively consistent with 2023 and 2022, respectively.


(dollars in millions)	2025			2024
Cash and cash equivalents	$	7,435		$	5,578
Total debt	37,904			41,261

Total equity	67,102			61,923
Total capitalization (total debt plus total equity)	105,006			103,184

Total debt to total capitalization	36		%	40		%

(dollars in millions)	2024			2023
Cash and cash equivalents	$	5,578		$	6,587
Total debt	41,261			43,827
Total equity	61,923			61,410
Total capitalization (total debt plus total equity)	103,184			105,237
Total debt to total capitalization	40		%	42		%

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing, and financing activities and the timing of such activities. Our principal source of liquidity is cash flows from operating activities. In addition to operating cash flows, other significant factors that affect our overall management of liquidity include: capital expenditures, customer financing requirements, investments in and divestitures of businesses, dividends, common stock repurchases, pension funding, access to the commercial paper markets, adequacy of available bank lines of credit, redemptions of debt, and the ability to attract long-term capital at satisfactory terms.

WeAt ~~assess~~December 31, ~~our~~2025, ~~liquidity~~we inhad ~~terms~~cash and cash equivalents of ~~our~~$7.4 ~~ability~~billion, toof ~~generate~~which ~~cash~~33% towas ~~fund~~held by RTX’s foreign subsidiaries. We manage our ~~operating,~~worldwide ~~investing,~~cash ~~and~~requirements ~~financing~~by ~~activities~~reviewing ~~and~~available funds among the ~~timing~~many ofsubsidiaries ~~such~~through ~~activities.~~which ~~Our~~we ~~principal~~conduct ~~source~~our ofbusiness ~~liquidity~~and isthe ~~cash~~cost ~~flows~~effectiveness ~~from~~with ~~operating~~which ~~activities~~those funds can be accessed. InThe ~~addition~~Company intends to ~~operating~~repatriate ~~cash~~certain ~~flows,~~undistributed ~~other~~earnings ~~significant~~of ~~factors~~its international subsidiaries that ~~affect~~have ~~our~~been ~~overall~~previously ~~management~~taxed ofin ~~liquidity~~the ~~include:~~U.S. ~~capital~~Taxes ~~expenditures,~~associated ~~customer~~with ~~financing~~the ~~requirements,~~future ~~investments~~remittance inof ~~and~~these ~~divestitures~~earnings have been recorded. For the remainder of ~~businesses,~~the ~~dividends,~~Company’s ~~common~~undistributed ~~stock~~international ~~repurchases~~earnings, ~~pension~~unless ~~funding~~tax effective to repatriate, ~~access~~RTX will continue to permanently reinvest these earnings.

54Our ability to access global debt markets and the related cost of these borrowings depends on the strength of our credit rating and market conditions. In March 2025, our Moody’s Investors Service outlook improved from Baa1/negative to Baa1/stable. In June 2025, our S&P Global rating was affirmed and our outlook was revised from BBB+/negative to BBB+/stable. Though the Company expects to continue having adequate access to funds, declines in our credit ratings or Company outlook could result in higher borrowing costs.

As of December 31, 2025, we had a revolving credit agreement with various banks permitting aggregate borrowings of up to $5.0 billion, which expires in August 2028. As of December 31, 2025, there were no borrowings outstanding under this agreement. In addition, at December 31, 2025, approximately $0.6 billion was available under short-term lines of credit primarily with global banks at our international subsidiaries.

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~~the~~From time to time, we use commercial paper ~~markets,~~borrowings ~~adequacy~~for ofgeneral ~~available~~corporate ~~bank~~purposes, ~~lines~~including the funding of ~~credit~~potential acquisitions, ~~redemptions~~pension ofcontributions, debt refinancing, dividend payments, and repurchases of our common stock. The commercial paper notes have original maturities of not more than 364 days from the ~~ability~~date toof ~~attract~~issuance. ~~long-term~~As ~~capital~~of atDecember 31, ~~satisfactory~~2025, ~~terms~~our maximum commercial paper borrowing limit was $5.0 billion as the commercial paper is backed by our $5.0 billion revolving credit agreement. We had no commercial paper borrowings outstanding at December 31, 2025.

At ~~December 31,~~During ~~2024~~2025, we ~~had~~made ~~cash and cash equivalents of $5.6 billion, of which 41% was held by RTX’s foreign subsidiaries. We manage our worldwide cash requirements by reviewing available funds among~~ the ~~many~~following ~~subsidiaries~~repayments ~~through which we conduct our business and the cost effectiveness with which those funds can be accessed. The Company intends to repatriate certain undistributed earnings~~ of ~~its~~long-term international subsidiaries that have been previously taxed in the U.S. Taxes associated with the future remittance of these earnings have been recorded. For the remainder of the Company’s undistributed international earnings, unless tax effective to repatriate, RTX will continue to permanently reinvest these earnings. debt:

Our ability to access global debt markets and the related cost of these borrowings depends on the strength of our credit rating and market conditions. Our S&P Global credit rating remains at BBB+/negative, and our Moody’s Investors Service outlook is Baa1/negative. Though the Company expects to continue having adequate access to funds, declines in our credit ratings or Company outlook could result in higher borrowing costs.


Date	Description of Notes	Aggregate Principal Balance (in millions)
December 17, 2025	3 Month SOFR plus 1.225% Term Loan due 2026	$	1,100
August 18, 2025	3.950% notes due 2025	1,500
May 7, 2025	3 Month SOFR plus 1.225% term loan due 2025	750

AsWe ofhave ~~December 31,~~an ~~2024,~~existing weuniversal ~~had~~shelf aregistration ~~revolving credit agreement with various banks permitting aggregate borrowings of up to $5.0 billion~~statement, which ~~expires~~we infiled ~~August~~with ~~2028.~~the AsSEC ofon ~~December 31~~September 18, ~~2024~~2025, ~~there~~for ~~were~~an noindeterminate ~~borrowings~~amount ~~outstanding~~of ~~under~~debt ~~this~~and ~~agreement.~~equity Insecurities ~~addition,~~for atfuture ~~December 31~~issuance, ~~2024,~~subject ~~approximately~~to ~~$0.7~~our ~~billion~~internal ~~was~~limitations ~~available~~on ~~under~~the ~~short-term~~amount ~~lines~~ of ~~credit~~debt ~~primarily~~to ~~with~~be ~~global~~issued ~~banks~~under atthis ~~our~~shelf ~~international~~registration ~~subsidiaries~~statement.

From time to time, we use commercial paper borrowings for general corporate purposes, including the funding of potential acquisitions, pension contributions, debt refinancing, dividend payments, and repurchases of our common stock. The commercial paper notes have original maturities of not more than 364 days from the date of issuance. As of December 31, 2024, our maximum commercial paper borrowing limit was $5.0 billion as the commercial paper is backed by our $5.0 billion revolving credit agreement. We had no commercial paper borrowings outstanding at December 31, 2024.

There were no issuances of long-term debt during 2024. During 2024, we made the following repayments of long-term debt:

Date	Description of Notes	Aggregate Principal Balance (in millions)
December 24, 2024	3 Month Secured Overnight Financing Rate (SOFR) plus 1.225% Term Loan due 2025	$	500
December 15, 2024	3.150% notes due 2024	300
May 7, 2024	3 Month SOFR plus 1.225% term loan due 2025	250
April 17, 2024	3 Month SOFR plus 1.225% term loan due 2025	250
April 4, 2024	3 Month SOFR plus 1.225% term loan due 2025	250
March 15, 2024	3.200% notes due 2024	950

We have an existing universal shelf registration statement, which we filed with the SEC on September 22, 2022, for an indeterminate amount of debt and equity securities for future issuance, subject to our internal limitations on the amount of debt to be issued under this shelf registration statement.

The Company offers voluntary supply chain finance (SCF) programs with global financial institutions which enables our suppliers, at their sole discretion, to sell their receivables from the Company to the financial institutions at a rate that leverages our credit rating, which might be beneficial to them. Our suppliers’ participation in the SCF programs does not impact or change our terms and conditions with those suppliers, and therefore, we have no economic interest in a supplier’s decision to participate in the programs. In addition, we do not pay for any of the costs of the programs incurred by those suppliers that choose to participate, and have no direct financial relationship with the financial institutions, as it relates to sales of receivables made by those suppliers. As such, the SCF programs do not impact our working capital, cash flows, or overall liquidity.

We believe our cash on hand and future operating cash flows will be sufficient to meet our future operating cash needs. Further, we continue to have access to the commercial paper markets and our existing credit facilities, and our ability to obtain debt or equity financing, as well as the availability under committed credit lines, provides additional potential sources of liquidity should they be required.

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Cash Flow - Operating Activities

(dollars in millions)	~~2024~~2025		~~2023~~2024		~~2022~~2023
Net cash flows provided by operating activities from continuing operations	$	7,159	$	7,883	$	7,168
Net cash flows provided by operating activities	$	10,567	$	7,159	$	7,883

2025 Compared with 2024 Operating Activities

Included within Net income for 2024 was a $0.9 billion charge related to the Resolution of Certain Legal Matters and a $0.4 billion, net of tax, charge related to the Raytheon Contract Termination. During 2024, we paid a combined $1.5 billion related to the Resolution of Certain Legal Matters and the Raytheon Contract Termination.

The $3.4 billion increase in cash flows provided by operating activities in 2025 compared to 2024 was primarily driven by higher net income after adjustments to reconcile to net cash provided by operating activities driven by our segment performance, an increase in accounts payable and accrued liabilities due to the timing of collaborator payables, and the benefit of lower inventory growth. These increases were partially offset by an increase in accounts receivable due to higher volume and timing of collections.

The Company enters into various factoring agreements with third-party financial institutions to sell certain of its receivables, primarily related to customer facilitated programs. The activity pursuant to these agreements is generally dependent on underlying delivery volumes within our commercial OEM programs. Factoring activity resulted in a $0.1 billion decrease in cash provided by operating activities in 2025 compared to 2024.

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2024 Compared with 2023 Operating Activities

Net income ~~from continuing operations~~ in 2024 included charges of $0.9 billion related to the Resolution of Certain Legal Matters and $0.4 billion related to the Raytheon Contract Termination, net of tax. Net income ~~from continuing operations~~ in 2023 included a $2.2 billion charge related to the Powder Metal Matter, net of tax. The Powder Metal Matter also had the effect of increasing Other accrued liabilities by $2.8 billion in 2023. Utilization of Other accrued liabilities in 2024 related to this matter were $1.0 billion and represent cash paid and credits issued to customers. During 2024, we also paid a combined $1.5 billion related to the Resolution of Certain Legal Matters and the Raytheon Contract Termination.

Additionally, a favorable impact from accounts receivable collections, including the related impact of factoring as discussed below, and a favorable change in accounts payable and other accrued liabilities driven by timing of payments and an increase in material purchases, partially offset by the net change in contract assets and contract liabilities, primarily at Pratt & Whitney, due to sales in excess of billings, contributed to an increase in net cash flows provided by operating activities ~~from continuing operations~~ in 2024 compared to 2023. Excluding the charges discussed above, higher net income ~~from continuing operations~~ after adjustments for depreciation and amortization, deferred income tax benefit, stock compensation cost, net periodic pension and other postretirement income, and gain on sale of CIS business, net of transaction costs also contributed to an increase in net cash flows provided by operating activities ~~from continuing operations~~ in 2024 compared to 2023, primarily driven by the operating performance of our segments.

The Company enters into various factoring agreements with third-party financial institutions to sell certain of its receivables, primarily related to customer facilitated programs. ~~Factoring~~The activity ~~resulted~~pursuant into anthese ~~increase~~agreements ofis ~~$0.1 billion~~generally independent ~~cash~~on ~~provided~~underlying bydelivery ~~operating~~volumes ~~activities~~within ~~from~~our ~~continuing~~commercial ~~operations~~OEM ~~during~~programs. ~~2024,~~Factoring ~~compared~~activity toresulted in a ~~decrease of~~ $0.89 billion increase in cash provided by operating activities ~~from~~in ~~continuing~~2024, ~~operations~~compared ~~during~~to 2023.

2023 Compared with 2022 Operating Activities

Net income from continuing operations in 2023 included a $2.2 billion charge related to the Powder Metal Matter, net of tax, which had no effect on cash flow in the period. This charge also had the effect of increasing Other accrued liabilities by $2.8 billion in 2023. Excluding the impact of this charge, the favorable change in cash flows provided by operating activities from continuing operations in 2023 compared to 2022, is primarily driven by higher net income from continuing operations after adjustments for depreciation and amortization, deferred income tax benefit, stock compensation cost, and net periodic pension and other postretirement income. Also contributing to the change in cash flows is a net favorable impact of net contract assets and liabilities due to the timing of collections, a net decrease in tax payments further discussed below, and lower inventory receipts compared to 2022. These favorable changes were partially offset by higher accounts receivable as a result of increased sales volume and timing of collections and a decrease in factoring.

The Company enters into various factoring agreements with third-party financial institutions to sell certain of its receivables. Factoring activity resulted in a decrease of $0.8 billion in cash provided by operating activities from continuing operations during 2023, compared to an increase of $2.3 billion in cash provided by operating activities from continuing operations during 2022. Factoring activity included amounts factored on certain aerospace receivables at the customers’ request for which we may be compensated by the customer

Operating Activities

We ~~made~~make ~~pension~~both required and ~~PRB~~discretionary contributions to ~~trusts~~our ofpension $0plans.1 ~~billion,~~Required ~~$0.2~~contributions ~~billion~~are primarily determined by Employee Retirement Income Security Act of 1974 (ERISA) funding rules, ~~and~~which $0require us to fully fund our U.1S. ~~billion~~qualified inpension ~~2024,~~plans ~~2023,~~over a rolling fifteen-year period as determined annually based on the calculated funded status at the beginning of each year per the Pension Protection Act of 2006 and ~~2022,~~subsequent ~~respectively~~amendments. ~~Included~~The infunding ~~the~~requirements ~~2023~~are ~~contributions~~primarily isbased aon ~~discretionary~~the ~~noncash~~year’s ~~contribution~~expected service cost and amortization of ~~$50 million~~other ~~made~~previously inunfunded ~~RTX~~liabilities, ~~common~~which ~~stock~~are todependent ~~our~~upon ~~U.S.~~many ~~qualified~~factors, ~~pension~~including ~~plans~~returns on invested assets, the level of market interest rates, and actuarial assumptions.

WeGlobal ~~make~~pension ~~both required~~ and ~~discretionary~~PRB ~~contributions~~cash tofunding ~~our~~requirements ~~pension plans. Required contributions~~ are ~~primarily~~expected ~~determined~~to bybe ~~Employee~~approximately ~~Retirement~~$0.3 billion ~~Income~~in ~~Security Act of 1974 (ERISA) funding rules~~2026, which ~~require~~includes usbenefit payments to ~~fully~~be ~~fund~~paid ~~our~~directly ~~U.S~~by ~~qualified~~the ~~pension~~Company. ~~plans~~We ~~over~~can acontribute ~~rolling~~cash ~~fifteen-year~~or ~~period~~RTX asshares ~~determined~~to ~~annually~~our ~~based~~plans onat ~~the~~our ~~calculated~~discretion, ~~funded~~subject ~~status~~to atapplicable ~~the~~regulations. ~~beginning~~As of ~~each~~December 31, ~~year~~2025, ~~per~~ the ~~Pension~~total ~~Protection~~investment ~~Act~~by ofthe ~~2006 and subsequent amendments~~U.S. ~~The~~qualified ~~funding~~pension ~~requirements~~plans ~~are~~in ~~primarily~~RTX ~~based~~shares onwas ~~the~~less ~~year’s~~than ~~expected~~1% ~~service cost and amortization~~ of ~~other~~total ~~previously~~plan ~~unfunded liabilities, which are dependent upon many factors, including returns on invested~~ assets~~, the level of market interest rates, and actuarial assumptions~~.

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Global pension and PRB cash funding requirements are expected to be approximately $0.3 billion in 2025, which includes benefit payments to be paid directly by the Company. We can contribute cash or RTX shares to our plans at our discretion, subject to applicable regulations. As of December 31, 2024, the total investment by the U.S. qualified pension plans in RTX shares was less than 1% of total plan assets.

Our domestic defined contribution plan uses an Employee Stock Ownership Plan (ESOP) for certain employer matching contributions. In the fourth quarter of 2024, we expanded the use of ESOP shares to fund our matching contributions to additional participants who had previously received matching contributions in cash.

We made net income tax payments of $1.26 billion, $1.52 billion, and $21.45 billion in ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively. ASee ~~provision~~“Note 12: ~~enacted~~Income inTaxes” ~~the~~within ~~Tax~~Item ~~Cuts~~8 ~~and Jobs Act~~ of ~~2017~~this ~~related~~Form to10-K ~~the capitalization of research and experimental expenditures~~ for ~~tax~~further ~~purposes became effective on January 1, 2022~~discussion. As such, we made incremental income tax payments of $1.6 billion in 2022. In September and December 2023, the Internal Revenue Service (IRS) issued interim guidance, retroactive to 2022, clarifying the capitalization requirements for certain types of research and experimental expenditures. The Company’s analysis indicates the guidance provided in the notices will result in fewer costs being subject to capitalization, and as such, costs previously required to be capitalized are now deductible in the year incurred. These notices resulted in the Company making lower income tax payments in 2023 compared to 2022.

Included in cash flows from operating activities ~~from continuing operations~~ are payments related to our operating lease obligations. See “Note 11: Leases” within Item 8 of this Form 10-K for actual and expected payments on operating lease obligations.

In addition, the majority of our cash flows for purchase obligations are classified as cash flows from operating activities ~~from continuing operations~~. We expect future payments related to our purchase obligations to be approximately $~~40.1~~47 billion, of which $~~25.5~~29 billion is payable in ~~2025~~2026. Purchase obligations include current amounts committed for the purchase of goods and services under legally enforceable contracts or purchase orders, and do not represent our entire anticipated purchases in the future. Approximately 50% of our purchase obligations described above represent purchase orders for products to be delivered under firm contracts with the U.S. government for which we have full recourse under customary contract termination clauses.

While the timing of cash flows are subject to a number of variables, for the Powder Metal Matter we estimate the accrual for expected customer compensation to be utilized consistent with the timing of execution of the fleet management plan, the period of increased aircraft on ground levels, and contractual terms with customers. In both 2025 and 2024, we utilized $1.0 billion of the accrual through cash payments and credits issued to customers. We currently estimate a full year ~~2025~~2026 cash impact related to the Powder Metal Matter of approximately $10.17 billion ~~to $1.3 billion~~, which includes the impact of cash paid, customer credits applied and the timing of partner recovery.

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Cash Flow - Investing Activities

(dollars in millions)	~~2024~~2025		~~2023~~2024		~~2022~~2023
Net cash flows used in investing activities from continuing operations	$	(1,534)	$	(3,039)	$	(2,829)
Net cash flows used in investing activities	$	(1,265)	$	(1,534)	$	(3,039)

Our investing activities primarily include capital expenditures, cash investments in customer financing assets, investments in and dispositions of businesses, payments related to our collaboration intangible assets and contractual rights to provide product on new aircraft platforms, and settlements of derivative contracts not designated as hedging instruments and designated net investment hedges.

2025 Compared with 2024 Investing Activities

The $0.3 billion change in cash flows used in investing activities in 2025 compared to 2024 primarily related to higher receipts from settlements of derivative contracts of $0.3 billion. Also contributing to the change was a $0.1 billion increase in net proceeds received from divestitures. In 2025, we received $1.2 billion from the actuation and flight control business divestiture and $0.7 billion from the sale of the Simmonds Precision Products business as compared to $1.3 billion from the CIS divestiture and $0.5 billion from the Goodrich Hoist & Winch divestiture in 2024.

2024 Compared with 2023 Investing Activities

The $1.5 billion change in cash flows used in investing activities ~~from continuing operations~~ in 2024 compared to 2023 primarily related to the cash proceeds from the sale of our CIS business within our Raytheon segment and the sale of our Goodrich Hoist & Winch business within our Collins segment of approximately $1.3 billion and $0.5 billion, respectively.

2023 Compared with 2022 Investing Activities

The $0.2 billion change in cash flows used in investing activities from continuing operations in 2023 compared to 2022 primarily related to an increase in payments for intangible assets discussed below and capital expenditures primarily due to investments in production facilities at Pratt & Whitney and Raytheon, partially offset by the timing of our derivative contract settlements.

Investing Activities

There were no significant acquisitions in ~~2024~~2025, ~~2023~~2024, or ~~2022~~2023. For information on dispositions of businesses in ~~2024~~2025, ~~2023~~2024, or ~~2022~~2023, see above orand “Note 2: Acquisitions and Dispositions” within Item 8 of this Form 10-K.

57In 2025, 2024, and 2023 our intangible assets increased by $0.5 billion, $0.6 billion, and $0.8 billion, respectively, primarily related to collaboration payment commitments made under our 2012 agreement to acquire Rolls-Royce’s collaboration interests in International Aero Engines AG (IAE) and exclusivity payments made on contractual commitments included within intangible assets. At December 31, 2025, we had commercial aerospace financing and other contractual commitments, including exclusivity and collaboration payment commitments, of approximately $13.1 billion, on a gross basis before reduction for our collaboration partners’ share. Refer to “Note 17: Commitments and Contingencies” within Item 8 of this Form 10-K for further details on our commercial aerospace financing and other contractual commitments.

~~Table~~As discussed in “Note 13: Financial Instruments” within Item 8 of ~~Contents~~this Form 10-K, we enter into derivative instruments primarily for risk management purposes, including derivatives designated as hedging instruments and those utilized as economic hedges. We operate internationally and in the normal course of business, are exposed to fluctuations in interest rates, foreign exchange rates, and commodity prices. These fluctuations can increase the costs of financing, investing, and operating the business. We have used derivative instruments, including swaps, forward contracts, and options, to manage certain foreign currency, interest rate, and commodity price exposures.

In 2024, 2023, and 2022 our intangible assets increased by $0.6 billion, $0.8 billion, and $0.5 billion, respectively, primarily related to collaboration payment commitments made under our 2012 agreement to acquire Rolls-Royce’s collaboration interests in International Aero Engines AG (IAE) and exclusivity payments made on contractual commitments included within intangible assets. At December 31, 2024, we had commercial aerospace financing and other contractual commitments, including exclusivity and collaboration payment commitments, of approximately $14.1 billion, on a gross basis before reduction for our collaboration partners’ share. Refer to “Note 17: Commitments and Contingencies” within Item 8 of this Form 10-K for further details on our commercial aerospace financing and other contractual commitments.

As discussed in “Note 13: Financial Instruments” within Item 8 of this Form 10-K, we enter into derivative instruments primarily for risk management purposes, including derivatives designated as hedging instruments and those utilized as economic hedges. We operate internationally and in the normal course of business, are exposed to fluctuations in interest rates, foreign exchange rates, and commodity prices. These fluctuations can increase the costs of financing, investing, and operating the business. We have used derivative instruments, including swaps, forward contracts, and options, to manage certain foreign currency, interest rate, and commodity price exposures. During 2024 and 2022, we had net cash payments of $142 million and $205 million, respectively and had net cash receipts of $14 million during 2023, from the settlement of these derivative instruments not designated as hedging instruments.

Cash Flow - Financing Activities

(dollars in millions)	~~2024~~2025		~~2023~~2024		~~2022~~2023
Net cash flows used in financing activities from continuing operations	$	(6,617)	$	(4,527)	$	(5,859)
Net cash flows used in financing activities	$	(7,486)	$	(6,617)	$	(4,527)

Our financing activities primarily include the issuance and repayment of commercial paper and other short-term and long-term debt, payment of dividends, and share repurchases.

2025 Compared with 2024 Financing Activities

The $0.9 billion increase in cash flows used in financing activities in 2025 compared to the 2024 was primarily driven by higher year-over-year long-term debt repayments of $0.9 billion. Refer to “Note 9: Borrowings and Lines of Credit” within Item 8 of this Form 10-K for additional information on debt repayments. Additionally, lower share repurchases were more than offset by higher dividends paid in 2025 as compared to 2024.

2024 Compared with 2023 Financing Activities

The $2.1 billion increase in cash flows used in financing activities from continuing operations in 2024 compared to the 2023 was primarily driven by higher year-over-year long-term debt repayments of $1.9 billion. Prior year long-term debt proceeds of $12.9 billion were partially offset by lower year-over-year share repurchases of $12.4 billion, primarily related to the prior year ASR.53

2023 Compared with 2022 Financing Activities

The $1.3 billion decrease in cash flows used in financing activities from continuing operations in 2023 compared to 2022 was primarily driven by long-term debt proceeds of $12.9 billion, partially offset by higher share repurchases of $10.1 billion primarily related to the ASR, an increase in repayment of commercial paper borrowings, net of $1.0 billion, and repayments of long-term debt of $0.6 billion.

Financing Activities

Included in cash flows from financing activities from continuing operations are principal payments related to our long-term debt. A summary of our long-term debt commitments, including interest payments which are included in cash flows provided by operating activities from continuing operations, as of December 31, 2024 was as follows:

	Payments Due by Period
(dollars in millions)	2025		2026		2027		Thereafter
Long-term debt—principal	$	2,343	$	4,505	$	2,937	$	31,361
Long-term debt—future interest	$	1,848	$	1,741	$	1,491	$	18,238

At December 31, 2024, management had remaining authority to repurchase approximately $0.7 billion of our common stock under the October 21, 2023 share repurchase program. Under the 2023 program, shares may be purchased on the open market, in privately negotiated transactions, under accelerated share repurchase programs, and under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. We may also reacquire shares outside of the program in connection with the surrender of shares to cover taxes on vesting of restricted stock. Our ability to repurchase shares is subject to applicable law.

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The $2.1 billion increase in cash flows used in financing activities in 2024 compared to 2023 was primarily driven by higher year-over-year long-term debt repayments of $1.9 billion. Prior year long-term debt proceeds of $12.9 billion were partially offset by lower year-over-year share repurchases of $12.4 billion, primarily related to the prior year ASR.

Financing Activities

Included in cash flows from financing activities are principal payments related to our long-term debt. A summary of our long-term debt commitments, including interest payments which are included in cash flows provided by operating activities, as of December 31, 2025 was as follows:


	Payments Due by Period
(dollars in millions)	2026		2027		2028		Thereafter
Long-term debt—principal	$	3,412	$	2,928	$	3,490	$	27,947
Long-term debt—future interest	$	1,676	$	1,491	$	1,413	$	16,826

At December 31, 2025, management had remaining authority to repurchase approximately $0.6 billion of our common stock under the October 21, 2023 share repurchase program. Under the 2023 program, shares may be purchased on the open market, in privately negotiated transactions, under accelerated share repurchase programs, and under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. We may also reacquire shares outside of the program in connection with the surrender of shares to cover taxes on vesting of restricted stock. Our ability to repurchase shares is subject to applicable law.

Our share repurchases were as follows for the years ended December 31:

(dollars in millions; shares in thousands)	~~2024~~2025			~~2023~~2024			~~2022~~2023
	$		Shares	$		Shares	$		Shares
Shares of common stock repurchased (1)	$	~~186~~50	~~1,781~~396	$	~~12,870~~186	~~141~~1,~~696~~781	$	212,~~803~~870	29141,~~943~~696
ASR Tranche 1 settlement - shares received (2)	—		~~391~~—	—		—391	—		—
ASR Tranche 2 settlement - financing cash paid (2) (3)	~~258~~—		—	—258		—	—		—
Total shares of common stock repurchased	$	~~444~~50	~~2,172~~396	$	~~12,870~~444	~~141~~2,~~696~~172	$	212,~~803~~870	29141,~~943~~696

(1) Relates to share repurchases that were settled in cash during the year.

(2) Includes the settlement of the ASR first and second tranches in the third quarter of 2024. ~~Refer to “Note 18: Equity” within Item 8 of this Form 10-K for additional information.~~

(3) Excludes the change in fair value of the stock price from trade date to settlement date of $3 million, which is classified as an operating cash flow in our Consolidated Statement of Cash Flows.

~~Our~~Pursuant ~~Board~~to the ASR agreements entered into in 2023, the shares associated with the remaining portion of ~~Directors~~the ~~authorized~~aggregate purchase price have been settled over two tranches. In July 2024, the ~~following~~first tranche was settled upon final delivery to us of approximately 0.4 million shares of common stock. In September 2024, with respect to the second tranche, we owed approximately 2.2 million shares of common stock that we elected to cash ~~dividends~~settle for $261 million. The cash payment required as a result of the ~~years~~second ~~ended~~tranche ~~December~~settlement ~~31:~~was due to the significant increase in the price of our common stock during the ASR term. The final average price under the ASR was $94.28 per share.

(dollars in millions, except per share amounts)	2024		2023		2022
Dividends paid per share of common stock	$	2.480	$	2.320	$	2.160
Total dividends paid	$	3,217	$	3,239	$	3,128

On February 6, 2026, the Board of Directors declared a dividend of $0.68 per share payable March 19, 2026 to shareowners of record at the close of business on February 20, 2026.

On January 31, 2025, the Board of Directors declared a dividend of $0.63 per share payable March 20, 2025 to shareowners of record at the close of business on February 21, 2025.

CRITICAL ACCOUNTING ESTIMATES

Preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Management believes the most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. The most significant areas involving management judgments and estimates are described below. Actual results in these areas could differ from management’s estimates.

Long-Term Contract Accounting. We recognize revenue on an over-time basis for substantially all defense contracts and certain long-term aerospace aftermarket contracts. We measure progress toward completion of these contracts on a percentage-of-completion basis, generally using costs incurred to date relative to total estimated costs at completion. Contract costs are incurred over a period of time, which can be several years, and the estimation of these costs requires management’s judgment. We review our Estimates at Completion (EACs) at least annually or when a change in circumstances warrants a modification to a previous estimate. For significant contracts, we review our EACs more frequently. Due to the nature of the work required to be performed on many of the Company’s performance obligations, the estimation of total revenue and cost at completion is complex, subject to many inputs, and requires significant judgment by management on a contract by contract basis. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities, and the related changes in estimates of revenues and costs. The risks and opportunities relate to management’s judgment about the ability and cost to achieve the schedule, consideration of customer-directed delays or reductions in scheduled deliveries, technical requirements, customer activity levels, such as flight hours or aircraft landings, and related variable consideration. Management must make assumptions and estimates regarding contract revenues and costs, including estimates of labor productivity and availability, the complexity and scope of the work to be performed, the availability and cost of materials including any impact from changing costs or inflation, the length of time to complete the performance obligation, execution by our subcontractors, the availability and timing of funding from our customer, overhead cost rates, and current and past maintenance cost and frequency driven by estimated aircraft and engine utilization and estimated useful lives of components, among others. In particular, fixed-price development programs involve significant management judgment, as development contracts by nature have elements that have not been done before and thus, are highly subject to future unexpected cost changes. Cost estimates may also include the estimated cost of satisfying our industrial cooperation agreements, sometimes in the form of either offset obligations or in-country industrial participation (ICIP) agreements, required under certain contracts. These obligations may or may not be distinct depending on their nature. If cash is paid to a customer to satisfy our offset obligations it is recorded as a reduction in the transaction price. Changes in estimates of net sales, cost of sales, and the related impact to operating profit on contracts recognized over time are recognized on a cumulative catch-up basis, which recognizes the cumulative effect of the profit changes on current and prior periods based on a performance obligation’s percentage-of-completion in the current period. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. Our EAC adjustments also

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complex, subject to many inputs, and requires significant judgment by management on a contract by contract basis. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities, and the related changes in estimates of revenues and costs. The risks and opportunities relate to management’s judgment about the ability and cost to achieve the schedule, consideration of customer-directed delays or reductions in scheduled deliveries, technical requirements, customer activity levels, such as flight hours or aircraft landings, and related variable consideration. Management must make assumptions and estimates regarding contract revenues and costs, including estimates of labor productivity and availability, the complexity and scope of the work to be performed, the availability and cost of materials including any impact from changing costs or inflation, the length of time to complete the performance obligation, execution by our subcontractors, the availability and timing of funding from our customer, overhead cost rates, and current and past maintenance cost and frequency driven by estimated aircraft and engine utilization and estimated useful lives of components, among others. In particular, fixed-price development programs involve significant management judgment, as development contracts by nature have elements that have not been done before and thus, are highly subject to future unexpected cost changes. Cost estimates may also include the estimated cost of satisfying our industrial cooperation agreements, sometimes in the form of either offset obligations or in-country industrial participation (ICIP) agreements, required under certain contracts. These obligations may or may not be distinct depending on their nature. If cash is paid to a customer to satisfy our offset obligations, it is recorded as a reduction in the transaction price. Changes in estimates of net sales, cost of sales, and the related impact to operating profit on contracts recognized over time are recognized on a cumulative catch-up basis, which recognizes the cumulative effect of the profit changes on current and prior periods based on a performance obligation’s percentage-of-completion in the current period. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. Our EAC adjustments also include the establishment of, and changes to, loss provisions for our contracts accounted for on a percentage-of-completion basis.

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

(dollars in millions, except per share amounts)	~~2024~~2025		~~2023~~2024		~~2022~~2023
Total net sales	$	(~~144~~208)	$	(~~452~~144)	$	~~152~~(452)
Operating profit (loss)	(473)		(648)		(37)
Operating profit	(386)		(473)		(648)
Income (loss) from continuing operations attributable to common shareowners (1)	(374)		(512)		(29)
Net income attributable to common shareowners (1)	(305)		(374)		(512)
Diluted earnings (loss) per share from continuing operations attributable to common shareowners (1)	$	(0.28)	$	(0.36)	$	(0.02)
Diluted earnings per share attributable to common shareowners (1)	$	(0.22)	$	(0.28)	$	(0.36)

(1) Amounts reflect a U.S. statutory tax rate of 21%, which approximates our tax rate on our EAC adjustments.

In addition to the amounts included in the table above, during the fourth quarter of 2024, as a result of obtaining critical licenses and further regulatory approvals, we restarted work under certain contracts with a Middle East customer and began recognizing revenue on these contracts. As a result, Raytheon recognized a net operating profit benefit of $0.1 billion primarily related to reserve and contract loss provision adjustments. Additionally, during the second quarter of 2024, Raytheon ~~initiated the termination of a fixed price development contract with a foreign customer (Raytheon Contract Termination) and~~ recognized a $0.6 billion charge related to the impact of the ~~termination~~Raytheon Contract Termination. The charge included the write-off of remaining contract assets and the estimated settlement with the customer. The contract termination was completed and customer settlement occurred during the fourth quarter of 2024, in line with previously accrued amounts.

Costs incurred for engineering and development of certain aerospace products under contracts with customers are capitalized as contract fulfillment costs, to the extent recoverable from the associated contract margin and customer funding, and subsequently amortized as the products are delivered to the customer. The estimation of contract costs, and margin, considered as part of this recoverability assessment requires significant judgment. We regularly assess capitalized contract fulfillment costs for impairment. In 2024, we recognized impairment charges at Collins of approximately $0.2 billion ~~and $0.1 billion at Collins~~ due to a contract cancellation and $0.1 billion as a result of the impact of initiating alternative titanium sources~~, respectively~~. See “Note 1: Basis of Presentation and Summary of Accounting Principles” within Item 8 of this Form 10-K for further discussion.

Income Taxes. Management believes that our earni

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