RTX delivers solid operational performance
and 8% sales growth; Increases 2024 outlook for
adjusted sales* and adjusted EPS*, revises free cash
flow*
ARLINGTON, Va., July 25,
2024 /PRNewswire/ -- RTX (NYSE: RTX) reported second
quarter 2024 results.
Second quarter 2024
- Reported sales of $19.7 billion,
up 8 percent versus prior year and up 10 percent on an organic*
basis
- Adjusted sales* of $19.8 billion,
up 8 percent versus prior year
- GAAP EPS was $0.08 and included
$0.29 of acquisition accounting
adjustments and $1.04 of other net
significant and/or non-recurring items and restructuring, including
$0.03 of restructuring and other
non-recurring items, a $0.68 charge
related to the expected resolution of several legacy legal matters,
and a $0.33 charge related to a fixed
priced development contract with a foreign customer at
Raytheon
- Adjusted EPS* of $1.41, up 9
percent versus prior year
- Operating cash flow of $2.7
billion; Free cash flow* of $2.2
billion
- Company backlog of $206 billion;
including $129 billion of commercial
and $77 billion of defense
- Realized $120 million of
incremental RTX gross cost synergies
Updates outlook for full year 2024
- Adjusted sales* of $78.75 -
$79.5 billion, up from $78.0 - $79.0
billion
- Adjusted EPS* of $5.35 -
$5.45, up from $5.25 - $5.40
- Free cash flow* of approximately $4.7
billion, down from approximately $5.7
billion
"RTX delivered strong operational performance in the second
quarter, with 10 percent organic sales* growth, adjusted margin*
expansion across all three segments and $2.2
billion in free cash flow*," said RTX President and CEO
Chris Calio. "The strength in our
end markets and first half performance give us the confidence to
increase our outlook for adjusted sales* and adjusted EPS* for the
full year."
"With a $206 billion backlog and unprecedented demand
across our portfolio, we are focused on executing on our customer
commitments powered by our CORE operating system, investing in
innovative technologies and capabilities, and leveraging the
breadth and scale of RTX to drive long-term shareowner value."
Second quarter 2024
RTX reported second quarter sales of $19.7
billion, up 8 percent over the prior year. Adjusted sales*
were $19.8 billion, also up 8 percent
over the prior year. GAAP EPS of $0.08 was down 91 percent versus the prior year,
and included $0.29 of acquisition
accounting adjustments, $0.03 of
restructuring and other net significant and/or non-recurring
charges, a $0.68 charge related to
the expected resolution of several legacy legal matters and a
$0.33 charge related to a fixed price
development contract with a foreign customer at Raytheon. Adjusted
EPS* of $1.41 was up 9 percent versus
the prior year.
The company reported net income attributable to common
shareowners in the second quarter of $111
million which included $393
million of acquisition accounting adjustments, $35 million of restructuring and other net
significant and/or non-recurring charges, a charge of $918 million related to the expected resolution
of several legacy legal matters and a $438
million charge related to a fixed price development contract
with a foreign customer at Raytheon. Adjusted net income* of
$1.9 billion was flat versus prior
year as growth in adjusted segment operating profit* was offset by
higher interest and tax expenses, and lower pension income.
Operating cash flow in the second quarter was $2.7 billion. Capital expenditures were
$537 million, resulting in a free
cash flow* of $2.2 billion.
Legacy Legal Matters
The Company has made progress in the quarter on resolving several
outstanding legal matters which has resulted in an EPS charge of
$0.68 associated with the expected
resolution of these matters. The Company expects to enter into a
deferred prosecution agreement with the Department of Justice (DOJ)
and to be subject to an administrative order with the Securities
and Exchange Commission (SEC) to resolve the previously disclosed
criminal and civil government investigations into improper payments
made by Raytheon Company and its joint venture, Thales-Raytheon
Systems (TRS), in connection with certain Middle East contracts since 2012. The Company
also expects to enter into a deferred prosecution agreement and an
False Claims Act (FCA) settlement 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. The
charge also includes the impact of certain voluntarily disclosed
export controls violations primarily identified in connection with
the integration of Rockwell Collins and, to a lesser extent,
Raytheon Company into RTX, including certain violations expected to
be resolved pursuant to a consent agreement with the Department of
State (DOS). In total, RTX recorded an aggregate charge of
$918 million in the quarter, bringing
the total associated reserve for these matters to $1.24 billion. Based upon the current status of
discussions, we believe that the finalization of our respective
agreements with the DOJ, SEC and DOS will occur during the second
half of 2024 and therefore, expect approximately $1.0 billion of related payments to be made
within the same timeframe with the balance to be paid over the next
several years. The items above have been incorporated in our
updated 2024 free cash flow* outlook.
Summary Financial Results – Operations Attributable to Common
Shareowners
|
|
2nd
Quarter
|
($ in millions, except
EPS)
|
2024
|
|
2023
|
%
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
19,721
|
|
$
18,315
|
8 %
|
Net Income
|
$
111
|
|
$ 1,327
|
(92) %
|
EPS
|
$
0.08
|
|
$
0.90
|
(91) %
|
|
|
|
|
|
|
Adjusted*
|
|
|
|
|
|
Sales
|
$
19,791
|
|
$
18,315
|
8 %
|
Net Income
|
$ 1,895
|
|
$ 1,895
|
— %
|
EPS
|
$
1.41
|
|
$
1.29
|
9 %
|
|
|
|
|
|
|
Operating Cash
Flow
|
|
$ 2,733
|
|
$
719
|
280 %
|
Free Cash
Flow*
|
|
$ 2,196
|
|
$
193
|
1038 %
|
Segment Results
Collins Aerospace
|
2nd
Quarter
|
($ in
millions)
|
2024
|
|
2023
|
%
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
6,999
|
|
$
6,384
|
10 %
|
|
Operating
Profit
|
$
1,118
|
|
$ 899
|
24 %
|
|
ROS
|
16.0 %
|
|
14.1 %
|
190
|
bps
|
|
|
|
|
|
|
Adjusted*
|
|
|
|
|
|
Sales
|
$
6,999
|
|
$
6,384
|
10 %
|
|
Operating
Profit
|
$
1,145
|
|
$ 915
|
25 %
|
|
ROS
|
16.4 %
|
|
14.3 %
|
210
|
bps
|
Collins Aerospace had second quarter 2024 reported sales of
$6,999 million, up 10 percent versus
the prior year. The increase in sales was driven by a 12
percent increase in commercial aftermarket, a 10 percent increase
in commercial OE, and a 7 percent increase in defense. The increase
in commercial sales was driven primarily by an increase in
commercial air traffic, including in higher flight hours, and
increased volume across all OEM sales channels. The increase in
defense sales was driven primarily by higher volume.
Collins Aerospace reported operating profit of $1,118 million, up 24 percent versus the prior
year. The increase in operating profit was primarily driven by drop
through on higher commercial aftermarket volume, as well as higher
defense and commercial OE volume. On an adjusted basis, operating
profit* of $1,145 million was up 25
percent versus the prior year.
Pratt & Whitney
|
2nd
Quarter
|
($ in
millions)
|
2024
|
|
2023
|
%
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
6,802
|
|
$
5,701
|
19 %
|
|
Operating
Profit
|
$ 542
|
|
$ 230
|
136 %
|
|
ROS
|
8.0 %
|
|
4.0 %
|
400
|
bps
|
|
|
|
|
|
|
Adjusted*
|
|
|
|
|
|
Sales
|
$
6,802
|
|
$
5,701
|
19 %
|
|
Operating
Profit
|
$ 537
|
|
$ 436
|
23 %
|
|
ROS
|
7.9 %
|
|
7.6 %
|
30
|
bps
|
Pratt & Whitney had second quarter 2024 reported sales of
$6,802 million, up 19 percent versus
the prior year. The increase in sales was driven by a 33 percent
increase in commercial OE, a 16 percent increase in military, and a
15 percent increase in commercial aftermarket. The increase in
commercial sales was primarily due to higher volume and favorable
mix within aftermarket as well as higher GTF OE volume and
favorable mix. The increase in military sales was driven by higher
sustainment volume across multiple platforms.
Pratt & Whitney reported operating profit of $542 million, up 136 percent versus the prior
year. Drop through on higher commercial aftermarket volume as well
as favorable Large Commercial OE and commercial aftermarket mix,
was partially offset by higher Large Commercial OE deliveries and
the absence of a $60 million
favorable prior year contract matter. Higher military volume and
favorable mix was more than offset by higher production costs and
higher R&D and SG&A expenses. The prior year reported
operating profit included the impact of a charge related to a
customer insolvency of $181 million.
On an adjusted basis, operating profit* of $537 million was up 23 percent versus the prior
year.
Raytheon
|
2nd
Quarter
|
($ in
millions)
|
2024
|
|
2023
|
%
Change
|
Reported
|
|
|
|
|
|
Sales
|
$
6,511
|
|
$
6,700
|
(3) %
|
|
Operating
Profit
|
$ 127
|
|
$ 644
|
(80) %
|
|
ROS
|
2.0 %
|
|
9.6 %
|
(760)
|
bps
|
|
|
|
|
|
|
Adjusted*
|
|
|
|
|
|
Sales
|
$
6,581
|
|
$
6,700
|
(2) %
|
|
Operating
Profit
|
$ 709
|
|
$ 662
|
7 %
|
|
ROS
|
10.8 %
|
|
9.9 %
|
90
|
bps
|
Raytheon had second quarter 2024 reported sales of $6,511 million, down 3 percent versus prior year
as higher volume on land and air defense systems including Global
Patriot, counter-UAS programs and Stinger was more than offset by
the divestiture of the Cybersecurity, Intelligence and Services
business completed in the first quarter of 2024. Adjusted sales* of
$6,581 million were down 2 percent
versus prior year. Excluding the impact of acquisition and
divestitures, sales were up 4 percent versus prior year*.
Raytheon reported operating profit of $127 million, down 80 percent versus the prior
year. Drop through on higher volume, favorable mix, and improved
net productivity was more than offset by a $575 million charge related to the anticipated
termination of a fixed price development contract with a foreign
customer which was contracted in 2016 under legacy Raytheon
Company. On an adjusted basis, operating profit* of
$709 million was up 7 percent versus
the prior year.
*Adjusted net sales, organic sales,
adjusted operating profit (loss) and margin, adjusted segment
operating profit (loss) and margin, adjusted net income, adjusted
earnings per share ("EPS"), adjusted effective tax rate and free
cash flow are non-GAAP financial measures. When we provide our
expectation for adjusted net sales, adjusted EPS and free cash flow
on a forward-looking basis, a reconciliation of these non-GAAP
financial measures to the corresponding GAAP measures (expected
diluted EPS and expected cash flow from operations) is not
available without unreasonable effort due to potentially high
variability, complexity, and low visibility as to the items that
would be excluded from the GAAP measure in the relevant future
period, such as unusual gains and losses, the ultimate outcome of
pending litigation, fluctuations in foreign currency exchange
rates, the impact and timing of potential acquisitions and
divestitures, and other structural changes or their probable
significance. The variability of the excluded items may have a
significant, and potentially unpredictable, impact on our future
GAAP results. See "Use and Definitions of Non-GAAP Financial
Measures" below for information regarding non-GAAP financial
measures.
About RTX
With more than 185,000 global employees, RTX
pushes the limits of technology and science to redefine how we
connect and protect our world. Through industry-leading businesses
– Collins Aerospace, Pratt & Whitney, and Raytheon – we are
advancing aviation, engineering integrated defense systems, and
developing next-generation technology solutions and manufacturing
to help global customers address their most critical challenges.
The company, with 2023 sales of $69
billion, is headquartered in Arlington, Virginia.
Conference Call on the Second Quarter 2024 Financial
Results
RTX's financial results conference call will be held
on Thursday, July 25, 2024 at 8:00 a.m.
ET. The conference call will be webcast live on the
company's website at www.rtx.com and will be available for replay
following the call. The corresponding presentation slides will be
available for downloading prior to the call.
Use and Definitions of Non-GAAP Financial Measures
RTX Corporation ("RTX" or "the Company") reports its financial
results in accordance with accounting principles generally accepted
in the United States ("GAAP"). We
supplement the reporting of our financial information determined
under GAAP with certain non-GAAP financial information. The
non-GAAP information presented provides investors with additional
useful information but should not be considered in isolation or as
substitutes for the related GAAP measures. We believe that these
non-GAAP measures provide investors with additional insight into
the Company's ongoing business performance. Other companies may
define non-GAAP measures differently, which limits the usefulness
of these measures for comparisons with such other companies. We
encourage investors to review our financial statements and
publicly-filed reports in their entirety and not to rely on any
single financial measure. A reconciliation of the non-GAAP measures
to the corresponding amounts prepared in accordance with GAAP
appears in the tables in this Appendix. Below are our non-GAAP
financial measures:
Non-GAAP
measure
|
Definition
|
Adjusted net
sales
|
Represents consolidated
net sales (a GAAP measure), excluding net significant and/or
non-recurring items1 (hereinafter referred to as "net
significant and/or non-recurring items").
|
Organic
sales
|
Organic sales
represents the change in consolidated net sales (a GAAP measure),
excluding the impact of foreign currency translation, acquisitions
and divestitures completed in the preceding twelve months and net
significant and/or non-recurring items.
|
Adjusted operating
profit (loss) and margin
|
Adjusted operating
profit (loss) represents operating profit (loss) (a GAAP measure),
excluding restructuring costs, acquisition accounting adjustments
and net significant and/or non-recurring items. Adjusted operating
profit margin represents adjusted operating profit (loss) as a
percentage of adjusted net sales.
|
Segment operating
profit (loss) and margin
|
Segment operating
profit (loss) represents operating profit (loss) (a GAAP measure)
excluding Acquisition Accounting Adjustments2, the
FAS/CAS operating adjustment3, Corporate expenses and
other unallocated items, and Eliminations and other. Segment
operating profit margin represents segment operating profit (loss)
as a percentage of segment sales (net sales, excluding Eliminations
and other).
|
Adjusted segment
sales
|
Represents consolidated
net sales (a GAAP measure) excluding eliminations and other and net
significant and/or non-recurring items.
|
Adjusted segment
operating profit (loss)
and margin
|
Adjusted segment
operating profit (loss) represents segment operating profit (loss)
excluding restructuring costs, and net significant and/or
non-recurring items. Adjusted segment operating profit margin
represents adjusted segment operating profit (loss) as a percentage
of adjusted segment sales (adjusted net sales excluding
Eliminations and other).
|
Adjusted net
income
|
Adjusted net income
represents net income (a GAAP measure), excluding restructuring
costs, acquisition accounting adjustments and net significant
and/or non-recurring items.
|
Adjusted earnings
per
share (EPS)
|
Adjusted EPS represents
diluted earnings per share (a GAAP measure), excluding
restructuring costs, acquisition accounting adjustments and net
significant and/or non-recurring items.
|
Adjusted effective tax
rate
|
Adjusted effective tax
rate represents the effective tax rate (a GAAP measure), excluding
the tax impact of restructuring costs, acquisition accounting
adjustments and net significant and/or non-recurring
items.
|
Free cash
flow
|
Free cash flow
represents cash flow from operations (a GAAP measure) less capital
expenditures. Management believes free cash flow is a useful
measure of liquidity and an additional basis for assessing RTX's
ability to fund its activities, including the financing of
acquisitions, debt service, repurchases of RTX's common stock and
distribution of earnings to shareowners.
|
1 Net
significant and/or non-recurring items represent significant
nonoperational items and/or significant operational items that may
occur at irregular intervals.
|
|
2
Acquisition Accounting Adjustments include the amortization of
acquired intangible assets related to acquisitions, the
amortization of the property, plant and equipment fair value
adjustment acquired through acquisitions, the amortization of
customer contractual obligations related to loss making or below
market contracts acquired, and goodwill impairment, if
applicable.
|
|
3 The
FAS/CAS operating adjustment represents the difference between the
service cost component of our pension and postretirement benefit
(PRB) expense under the Financial Accounting Standards (FAS)
requirements of GAAP and our pension and PRB expense under U.S.
government Cost Accounting Standards (CAS) primarily related to our
Raytheon segment.
|
When we provide our expectation for adjusted net sales, organic
sales, adjusted operating profit (loss) and margin, adjusted
segment operating profit (loss) and margin, adjusted EPS, adjusted
effective tax rate, and free cash flow, on a forward-looking basis,
a reconciliation of the differences between the non-GAAP
expectations and the corresponding GAAP measures, as described
above, generally are not available without unreasonable effort due
to potentially high variability, complexity, and low visibility as
to the items that would be excluded from the GAAP measure in the
relevant future period, such as unusual gains and losses, the
ultimate outcome of pending litigation, fluctuations in foreign
currency exchange rates, the impact and timing of potential
acquisitions and divestitures, and other structural changes or
their probable significance. The variability of the excluded items
may have a significant, and potentially unpredictable, impact on
our future GAAP results.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains statements which, to the extent they
are not statements of historical or present fact, constitute
"forward-looking statements" under the securities laws. From time
to time, oral or written forward- looking statements may also be
included in other information released to the public. These
forward-looking statements are intended to provide RTX Corporation
("RTX") management's current expectations or plans for our future
operating and financial performance, based on assumptions currently
believed to be valid and are not statements of historical fact.
Forward-looking statements can be identified by the use of words
such as "believe," "expect," "expectations," "plans," "strategy,"
"prospects," "estimate," "project," "target," "anticipate," "will,"
"should," "see," "guidance," "outlook," "goals," "objectives,"
"confident," "on track," "designed to" and other words of similar
meaning. Forward-looking statements may include, among other
things, statements relating to future sales, earnings, cash flow,
results of operations, uses of cash, share repurchases, tax
payments and rates, research and development spending, cost
savings, other measures of financial performance, potential future
plans, strategies or transactions, credit ratings and net
indebtedness, the Pratt powder metal matter and related matters and
activities, including without limitation other engine models that
may be impacted, anticipated benefits to RTX of its segment
realignment, pending disposition of Collins' actuation and flight
control business, the merger (the "merger") between United
Technologies Corporation ("UTC") and Raytheon Company ("Raytheon")
or the spin-offs by UTC of Otis Worldwide Corporation and Carrier
Global Corporation into separate independent companies (the
"separation transactions") in 2020, targets and commitments
(including for share repurchases or otherwise), and other
statements that are not solely historical facts. All
forward-looking statements involve risks, uncertainties and other
factors that may cause actual results to differ materially from
those expressed or implied in the forward-looking statements. For
those statements, we claim the protection of the safe harbor for
forward- looking statements contained in the U.S. Private
Securities Litigation Reform Act of 1995. Such risks, uncertainties
and other factors include, without limitation: (1) the effect of
changes in economic, capital market and political conditions in the
U.S. and globally, such as from the global sanctions and export
controls with respect to Russia,
and any changes therein, including 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, and geopolitical risks; (2) risks
associated with U.S. government sales, including changes or shifts
in defense spending due to budgetary constraints, spending cuts
resulting from sequestration, a continuing resolution, a government
shutdown, the debt ceiling or measures taken to avoid default, or
otherwise, and uncertain funding of programs; (3) risks relating to
our performance on our contracts and programs, including our
ability to control costs, and our inability to pass some or all of
our costs on fixed price contracts to the customer, and risks
related to any termination of these contracts or programs,
including the outcome of such terminations and related payments;
(4) challenges in the development, 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; (5)
risks relating to RTX's reliance on U.S. and non-U.S. suppliers and
commodity markets, including the effect of sanctions, delays and
disruptions in the delivery of materials and services to RTX or its
suppliers and price increases; (6) risks relating to RTX
international operations from, among other things, changes in trade
policies and implementation of sanctions, foreign currency
fluctuations, economic conditions, political factors, sales
methods, and U.S. or local government regulations; (7) the
condition of the aerospace industry; (8) the ability of RTX to
attract, train 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; (9) the scope, nature, timing and challenges of
managing acquisitions, investments, divestitures 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; (10) compliance with legal, environmental, regulatory
and other requirements, including, among other things, export and
import requirements such as the International Traffic in Arms
Regulations and the Export Administration Regulations, anti-bribery
and anticorruption requirements, such as the Foreign Corrupt
Practices Act, industrial cooperation agreement obligations, and
procurement and other regulations in the U.S. and other countries
in which RTX and its businesses operate; (11) the outcome of
pending, threatened and future legal proceedings, investigations,
and other contingencies (including the ultimate outcome of those
certain legacy legal matters described above), including those
related to U.S. government audits and disputes and the potential
for suspension or debarment of U.S. government contracting or
export privileges as a result thereof, and including updates to
accrual amounts as a result of such outcomes; (12) 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; (13) uncertainties associated with
the timing and scope of future repurchases by RTX of its common
stock, including the ability to complete the accelerated share
repurchase ("ASR"), the purchase price of the shares acquired
pursuant to the ASR agreement, and the timing and duration of the
ASR program 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; (14) 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; (15) 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; (16) risks
relating to addressing the identified rare condition in powder
metal used to manufacture certain Pratt & Whitney engine parts
requiring accelerated removals and inspections of a significant
portion of the PW1100G-JM Geared Turbofan (GTF) fleet, including,
without limitation, the number and expected timing of shop visits,
inspection results and scope of work to be performed, turnaround
time, availability of new parts, available capacity at overhaul
facilities, outcomes of negotiations with impacted customers, and
risks related to other engine models that may be impacted by the
powder metal matter, and in each case the timing and costs relating
thereto, as well as other issues that could impact RTX product
performance, including quality, reliability or durability; (17)
changes in production volumes of one or more of our significant
customers as a result of business or other challenges, and the
resulting effect on its or their demand for our products and
services; (18) risks relating to a RTX product safety failure or
other failure affecting RTX's or its customers' or suppliers'
products or systems; (19) risks relating to cybersecurity,
including cyber-attacks on RTX's information technology
infrastructure, products, suppliers, customers and partners, and
cybersecurity-related regulations; (20) 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; (21) the effect of changes in accounting estimates for our
programs on our financial results; (22) the effect of changes in
pension and other postretirement plan estimates and assumptions and
contributions; (23) risks relating to an impairment of goodwill and
other intangible assets; (24) the effects of climate change and
changing climate-related regulations, customer and market demands,
products and technologies; and (25) the intended qualification of
(i) the merger as a tax-free reorganization and (ii) the separation
transactions and other internal restructurings as tax-free to UTC
and former UTC shareowners, in each case, for U.S. federal income
tax purposes. For additional information on identifying factors
that may cause actual results to vary materially from those stated
in forward-looking statements, see the reports of RTX, UTC and
Raytheon on Forms S-4, 10-K, 10-Q and 8-K filed with or furnished
to the Securities and Exchange Commission from time to time. Any
forward-looking statement speaks only as of the date on which it is
made, and RTX assumes no obligation to update or revise such
statement, whether as a result of new information, future events or
otherwise, except as required by applicable law.
RTX
Corporation
|
Condensed
Consolidated Statement of Operations
|
|
|
|
|
Quarter Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions, except per share amounts; shares in
millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net Sales
|
$ 19,721
|
|
$ 18,315
|
|
$ 39,026
|
|
$ 35,529
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales
|
16,141
|
|
14,518
|
|
31,885
|
|
28,163
|
|
Research and
development
|
706
|
|
729
|
|
1,375
|
|
1,336
|
|
Selling, general, and
administrative
|
1,449
|
|
1,600
|
|
2,843
|
|
2,963
|
|
Total costs and
expenses
|
18,296
|
|
16,847
|
|
36,103
|
|
32,462
|
Other income (expense),
net
|
(896)
|
|
25
|
|
(524)
|
|
113
|
Operating
profit
|
529
|
|
1,493
|
|
2,399
|
|
3,180
|
|
Non-service pension
income
|
(374)
|
|
(447)
|
|
(760)
|
|
(891)
|
|
Interest expense,
net
|
475
|
|
333
|
|
880
|
|
648
|
Income before income
taxes
|
428
|
|
1,607
|
|
2,279
|
|
3,423
|
|
Income tax
expense
|
253
|
|
248
|
|
361
|
|
583
|
Net income
|
175
|
|
1,359
|
|
1,918
|
|
2,840
|
|
Less: Noncontrolling
interest in subsidiaries' earnings
|
64
|
|
32
|
|
98
|
|
87
|
Net income attributable
to common shareowners
|
$
111
|
|
$
1,327
|
|
$
1,820
|
|
$
2,753
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
attributable to common shareowners:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.08
|
|
$
0.91
|
|
$
1.37
|
|
$
1.89
|
|
Diluted
|
$
0.08
|
|
$
0.90
|
|
$
1.36
|
|
$
1.87
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding:
|
|
|
|
|
|
|
|
|
Basic shares
|
1,331.8
|
|
1,457.5
|
|
1,330.5
|
|
1,459.9
|
|
Diluted
shares
|
1,342.1
|
|
1,468.7
|
|
1,339.7
|
|
1,471.5
|
RTX
Corporation
|
Segment Net Sales
and Operating Profit (Loss)
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
(Unaudited)
|
|
(Unaudited)
|
|
June 30,
2024
|
|
June 30,
2023
|
|
June 30,
2024
|
|
June 30,
2023
|
(dollars in
millions)
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
Collins
Aerospace
|
$
6,999
|
$
6,999
|
|
$
6,384
|
$
6,384
|
|
$
13,672
|
$
13,672
|
|
$
12,504
|
$
12,504
|
Pratt &
Whitney
|
6,802
|
6,802
|
|
5,701
|
5,701
|
|
13,258
|
13,258
|
|
10,931
|
10,931
|
Raytheon
|
6,511
|
6,581
|
|
6,700
|
6,700
|
|
13,170
|
13,240
|
|
12,992
|
12,992
|
Total
segments
|
20,312
|
20,382
|
|
18,785
|
18,785
|
|
40,100
|
40,170
|
|
36,427
|
36,427
|
Eliminations and
other
|
(591)
|
(591)
|
|
(470)
|
(470)
|
|
(1,074)
|
(1,074)
|
|
(898)
|
(898)
|
Consolidated
|
$
19,721
|
$
19,791
|
|
$
18,315
|
$
18,315
|
|
$
39,026
|
$
39,096
|
|
$
35,529
|
$
35,529
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
Collins
Aerospace
|
$
1,118
|
$
1,145
|
|
$ 899
|
$ 915
|
|
$
1,967
|
$
2,193
|
|
$
1,796
|
$
1,818
|
Pratt &
Whitney
|
542
|
537
|
|
230
|
436
|
|
954
|
967
|
|
645
|
870
|
Raytheon
|
127
|
709
|
|
644
|
662
|
|
1,123
|
1,339
|
|
1,215
|
1,246
|
Total
segments
|
1,787
|
2,391
|
|
1,773
|
2,013
|
|
4,044
|
4,499
|
|
3,656
|
3,934
|
Eliminations and
other
|
(36)
|
(36)
|
|
(16)
|
(26)
|
|
(41)
|
(41)
|
|
35
|
(43)
|
Corporate expenses and
other
unallocated items
|
(930)
|
(7)
|
|
(59)
|
(28)
|
|
(1,026)
|
(32)
|
|
(102)
|
(68)
|
FAS/CAS operating
adjustment
|
212
|
212
|
|
284
|
284
|
|
426
|
426
|
|
573
|
573
|
Acquisition
accounting
adjustments
|
(504)
|
—
|
|
(489)
|
—
|
|
(1,004)
|
—
|
|
(982)
|
—
|
Consolidated
|
$ 529
|
$
2,560
|
|
$
1,493
|
$
2,243
|
|
$
2,399
|
$
4,852
|
|
$
3,180
|
$
4,396
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating
Profit Margin
|
|
|
|
|
|
|
|
|
|
Collins
Aerospace
|
16.0 %
|
16.4 %
|
|
14.1 %
|
14.3 %
|
|
14.4 %
|
16.0 %
|
|
14.4 %
|
14.5 %
|
Pratt &
Whitney
|
8.0 %
|
7.9 %
|
|
4.0 %
|
7.6 %
|
|
7.2 %
|
7.3 %
|
|
5.9 %
|
8.0 %
|
Raytheon
|
2.0 %
|
10.8 %
|
|
9.6 %
|
9.9 %
|
|
8.5 %
|
10.1 %
|
|
9.4 %
|
9.6 %
|
Total
segment
|
8.8 %
|
11.7 %
|
|
9.4 %
|
10.7 %
|
|
10.1 %
|
11.2 %
|
|
10.0 %
|
10.8 %
|
RTX
Corporation
|
Condensed
Consolidated Balance Sheet
|
|
|
June 30,
2024
|
|
December 31,
2023
|
(dollars in
millions)
|
(Unaudited)
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
6,011
|
|
$
6,587
|
Accounts receivable,
net
|
10,252
|
|
10,838
|
Contract
assets
|
13,581
|
|
12,139
|
Inventory,
net
|
13,047
|
|
11,777
|
Other assets,
current
|
6,334
|
|
7,076
|
Total current
assets
|
49,225
|
|
48,417
|
Customer financing
assets
|
2,320
|
|
2,392
|
Fixed assets,
net
|
15,693
|
|
15,748
|
Operating lease
right-of-use assets
|
1,664
|
|
1,638
|
Goodwill
|
53,347
|
|
53,699
|
Intangible assets,
net
|
34,503
|
|
35,399
|
Other assets
|
4,417
|
|
4,576
|
Total
assets
|
$
161,169
|
|
$
161,869
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interest, and Equity
|
|
|
|
Short-term
borrowings
|
$
231
|
|
$
189
|
Accounts
payable
|
10,939
|
|
10,698
|
Accrued employee
compensation
|
2,065
|
|
2,491
|
Other accrued
liabilities
|
17,048
|
|
14,917
|
Contract
liabilities
|
17,665
|
|
17,183
|
Long-term debt
currently due
|
1,617
|
|
1,283
|
Total current
liabilities
|
49,565
|
|
46,761
|
Long-term
debt
|
40,303
|
|
42,355
|
Operating lease
liabilities, non-current
|
1,415
|
|
1,412
|
Future pension and
postretirement benefit obligations
|
2,264
|
|
2,385
|
Other long-term
liabilities
|
6,941
|
|
7,511
|
Total
liabilities
|
100,488
|
|
100,424
|
Redeemable
noncontrolling interest
|
31
|
|
35
|
Shareowners'
Equity:
|
|
|
|
Common
stock
|
37,295
|
|
37,040
|
Treasury
stock
|
(27,080)
|
|
(26,977)
|
Retained
earnings
|
51,488
|
|
52,154
|
Accumulated other
comprehensive loss
|
(2,718)
|
|
(2,419)
|
Total shareowners'
equity
|
58,985
|
|
59,798
|
Noncontrolling
interest
|
1,665
|
|
1,612
|
Total
equity
|
60,650
|
|
61,410
|
Total liabilities,
redeemable noncontrolling interest, and equity
|
$
161,169
|
|
$
161,869
|
RTX
Corporation
|
Condensed
Consolidated Statement of Cash Flows
|
|
|
Quarter Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net income
|
$
175
|
|
$ 1,359
|
|
$
1,918
|
|
$
2,840
|
Adjustments to
reconcile net income to net cash flows provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
1,072
|
|
1,044
|
|
2,131
|
|
2,078
|
Deferred income tax
provision (benefit)
|
299
|
|
(371)
|
|
185
|
|
(700)
|
Stock compensation
cost
|
111
|
|
112
|
|
223
|
|
212
|
Net periodic pension
and other postretirement income
|
(328)
|
|
(390)
|
|
(666)
|
|
(778)
|
Gain on sale of
business, net of transaction costs
|
—
|
|
—
|
|
(415)
|
|
—
|
Change in:
|
|
|
|
|
|
|
|
Accounts
receivable
|
156
|
|
263
|
|
587
|
|
(699)
|
Contract
assets
|
(479)
|
|
(232)
|
|
(1,457)
|
|
(1,430)
|
Inventory
|
(715)
|
|
(602)
|
|
(1,361)
|
|
(1,322)
|
Other current
assets
|
442
|
|
(108)
|
|
217
|
|
(634)
|
Accounts payable and
accrued liabilities
|
1,463
|
|
(639)
|
|
1,245
|
|
(149)
|
Contract
liabilities
|
566
|
|
32
|
|
512
|
|
255
|
Other operating
activities, net
|
(29)
|
|
251
|
|
(44)
|
|
183
|
Net cash
flows provided by (used in) operating activities
|
2,733
|
|
719
|
|
3,075
|
|
(144)
|
Investing
Activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(537)
|
|
(526)
|
|
(1,004)
|
|
(1,046)
|
Dispositions of
businesses, net of cash transferred
|
—
|
|
—
|
|
1,283
|
|
—
|
Increase in other
intangible assets
|
(155)
|
|
(160)
|
|
(318)
|
|
(314)
|
(Payments) receipts
from settlements of derivative contracts, net
|
(28)
|
|
58
|
|
(29)
|
|
45
|
Other investing
activities, net
|
(13)
|
|
5
|
|
28
|
|
113
|
Net cash
flows used in investing activities
|
(733)
|
|
(623)
|
|
(40)
|
|
(1,202)
|
Financing
Activities:
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
—
|
|
3
|
|
—
|
|
2,974
|
Repayment of long-term
debt
|
(750)
|
|
(3)
|
|
(1,700)
|
|
(3)
|
Change in commercial
paper, net
|
—
|
|
897
|
|
—
|
|
470
|
Change in other
short-term borrowings, net
|
65
|
|
(46)
|
|
43
|
|
(24)
|
Dividends paid on
common stock
|
(823)
|
|
(844)
|
|
(1,592)
|
|
(1,634)
|
Repurchase of common
stock
|
(44)
|
|
(596)
|
|
(100)
|
|
(1,158)
|
Other financing
activities, net
|
(32)
|
|
(39)
|
|
(242)
|
|
(157)
|
Net cash
flows (used in) provided by financing activities
|
(1,584)
|
|
(628)
|
|
(3,591)
|
|
468
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(4)
|
|
18
|
|
(12)
|
|
19
|
Net
increase (decrease) in cash, cash equivalents and restricted
cash
|
412
|
|
(514)
|
|
(568)
|
|
(859)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
5,646
|
|
5,946
|
|
6,626
|
|
6,291
|
Cash, cash equivalents
and restricted cash, end of period
|
6,058
|
|
5,432
|
|
6,058
|
|
5,432
|
Less:
Restricted cash, included in Other assets, current and Other
assets
|
47
|
|
41
|
|
47
|
|
41
|
Cash and cash
equivalents, end of period
|
$ 6,011
|
|
$ 5,391
|
|
$
6,011
|
|
$
5,391
|
RTX
Corporation
|
Reconciliation of
Adjusted (Non-GAAP) Results
|
Adjusted Sales,
Adjusted Operating Profit & Operating Profit
Margin
|
|
|
Quarter Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions - Income (Expense))
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Collins
Aerospace
|
|
|
|
|
|
|
|
Net sales
|
$ 6,999
|
|
$ 6,384
|
|
$
13,672
|
|
$
12,504
|
Operating
profit
|
$ 1,118
|
|
$
899
|
|
$ 1,967
|
|
$ 1,796
|
Restructuring
|
(12)
|
|
(5)
|
|
(18)
|
|
(8)
|
Segment and portfolio
transformation costs
|
(15)
|
|
(11)
|
|
(33)
|
|
(14)
|
Charge associated with
initiating alternative titanium sources (5)
|
—
|
|
—
|
|
(175)
|
|
—
|
Adjusted operating
profit
|
$ 1,145
|
|
$
915
|
|
$ 2,193
|
|
$ 1,818
|
Adjusted operating
profit margin
|
16.4 %
|
|
14.3 %
|
|
16.0 %
|
|
14.5 %
|
Pratt &
Whitney
|
|
|
|
|
|
|
|
Net sales
|
$ 6,802
|
|
$ 5,701
|
|
$
13,258
|
|
$
10,931
|
Operating
profit
|
$
542
|
|
$
230
|
|
$
954
|
|
$
645
|
Restructuring
|
(15)
|
|
(25)
|
|
(33)
|
|
(44)
|
Insurance
settlement
|
20
|
|
—
|
|
20
|
|
—
|
Charges related to a
customer insolvency (4)
|
—
|
|
(181)
|
|
—
|
|
(181)
|
Adjusted operating
profit
|
$
537
|
|
$
436
|
|
$
967
|
|
$
870
|
Adjusted operating
profit margin
|
7.9 %
|
|
7.6 %
|
|
7.3 %
|
|
8.0 %
|
Raytheon
|
|
|
|
|
|
|
|
Net sales
|
$ 6,511
|
|
$ 6,700
|
|
$
13,170
|
|
$
12,992
|
Contract termination
(2)
|
(70)
|
|
—
|
|
(70)
|
|
—
|
Adjusted net
sales
|
$ 6,581
|
|
$ 6,700
|
|
$
13,240
|
|
$
12,992
|
Operating
profit
|
$
127
|
|
$
644
|
|
$ 1,123
|
|
$ 1,215
|
Restructuring
|
(7)
|
|
(17)
|
|
(16)
|
|
(24)
|
Contract termination
(2)
|
(575)
|
|
—
|
|
(575)
|
|
—
|
Gain on sale of
business, net of transaction and other related costs
(3)
|
—
|
|
—
|
|
375
|
|
—
|
Segment and portfolio
transformation costs
|
—
|
|
(1)
|
|
—
|
|
(7)
|
Adjusted operating
profit
|
$
709
|
|
$
662
|
|
$ 1,339
|
|
$ 1,246
|
Adjusted operating
profit margin
|
10.8 %
|
|
9.9 %
|
|
10.1 %
|
|
9.6 %
|
Eliminations and
Other
|
|
|
|
|
|
|
|
Net sales
|
$
(591)
|
|
$
(470)
|
|
$
(1,074)
|
|
$
(898)
|
Operating profit
(loss)
|
$
(36)
|
|
$
(16)
|
|
$
(41)
|
|
$
35
|
Gain on sale of
land
|
—
|
|
—
|
|
—
|
|
68
|
Charges related to a
customer insolvency (4)
|
—
|
|
10
|
|
—
|
|
10
|
Adjusted operating
loss
|
$
(36)
|
|
$
(26)
|
|
$
(41)
|
|
$
(43)
|
Corporate expenses
and other unallocated items
|
|
|
|
|
|
|
|
Operating
loss
|
$
(930)
|
|
$
(59)
|
|
$
(1,026)
|
|
$
(102)
|
Restructuring
|
(2)
|
|
(21)
|
|
(3)
|
|
(22)
|
Tax audit settlements
(6)
|
—
|
|
—
|
|
(68)
|
|
—
|
Legal matters
(1)
|
(918)
|
|
—
|
|
(918)
|
|
—
|
Segment and portfolio
transformation costs
|
(3)
|
|
(10)
|
|
(5)
|
|
(12)
|
Adjusted operating
loss
|
$
(7)
|
|
$
(28)
|
|
$
(32)
|
|
$
(68)
|
FAS/CAS Operating
Adjustment
|
|
|
|
|
|
|
|
Operating
profit
|
$
212
|
|
$
284
|
|
$
426
|
|
$
573
|
Acquisition
Accounting Adjustments
|
|
|
|
|
|
|
|
Operating
loss
|
$
(504)
|
|
$
(489)
|
|
$
(1,004)
|
|
$
(982)
|
Acquisition accounting
adjustments
|
(504)
|
|
(489)
|
|
(1,004)
|
|
(982)
|
Adjusted operating
profit
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
RTX
Consolidated
|
|
|
|
|
|
|
|
Net sales
|
$
19,721
|
|
$
18,315
|
|
$
39,026
|
|
$
35,529
|
Total net significant
and/or non-recurring items included in Net sales above
(2)
|
(70)
|
|
—
|
|
(70)
|
|
—
|
Adjusted net
sales
|
$
19,791
|
|
$
18,315
|
|
$
39,096
|
|
$
35,529
|
Operating
profit
|
$
529
|
|
$ 1,493
|
|
$ 2,399
|
|
$ 3,180
|
Restructuring
|
(36)
|
|
(68)
|
|
(70)
|
|
(98)
|
Acquisition accounting
adjustments
|
(504)
|
|
(489)
|
|
(1,004)
|
|
(982)
|
Total net significant
and/or non-recurring items included in Operating profit
above(1)(2)(3)(4)(5)(6)
|
(1,491)
|
|
(193)
|
|
(1,379)
|
|
(136)
|
Adjusted operating
profit
|
$ 2,560
|
|
$ 2,243
|
|
$ 4,852
|
|
$ 4,396
|
(1)
|
Total net significant
and/or non-recurring items in the table above for the quarter and
six months ended June 30, 2024 includes charges of $918 million
related to the expected resolution of several outstanding legal
matters. The charge includes an additional accrual of $269 million
to resolve the previously disclosed criminal and civil government
investigations of defective pricing claims for certain legacy
Raytheon Company contracts entered into between 2011 and 2013 and
in 2017; an additional accrual of $364 million to resolve the
previously disclosed criminal and civil government investigations
of improper payments made by Raytheon Company and its joint
venture, Thales-Raytheon Systems, in connection with certain Middle
East contracts since 2012; and an accrual of $285 million related
to certain voluntarily disclosed export controls violations,
primarily identified in connection with the integration of Rockwell
Collins and, to a lesser extent, Raytheon Company, including
certain violations expected to be resolved pursuant to a consent
agreement with the Department of State. Management has determined
that these impacts are directly attributable to these legacy legal
matters and that the nature of the charges are considered
significant and unusual and therefore, not indicative of the
Company's ongoing operational performance.
|
(2)
|
Total net significant
and/or non-recurring items in the table above for the quarter and
six months ended June 30, 2024 includes a pre-tax charge of $575
million related to the anticipated termination of a fixed price
development contract with a foreign customer at Raytheon. The
charge includes the write-off of remaining contract assets and our
best estimate of the expected settlement in conjunction with this
termination. Management has determined that these impacts are
directly attributable to the expected termination, incremental to
similar costs incurred for reasons other than those attributable to
the termination and has determined that the nature of the pre-tax
charge is considered significant and unusual and therefore, not
indicative of the Company's ongoing operational
performance.
|
(3)
|
Total net significant
and/or non-recurring items in the table above for the six months
ended June 30, 2024 includes a pre-tax gain, net of transaction and
other related costs, of $0.4 billion associated with the completed
sale of the Cybersecurity, Intelligence and Services (CIS) business
at Raytheon. Management has determined that the nature of the net
gain on the divestiture is considered significant and
non-operational and therefore, not indicative of the Company's
ongoing operational performance.
|
(4)
|
Total net significant
and/or non-recurring items in the table above for the six months
ended June 30, 2023 includes a net pre-tax charge of $0.2 billion
related to a customer insolvency during the second quarter of 2023.
The charge primarily relates to Contract assets and Customer
financing assets exposures with the customer. Management has
determined that the nature and significance of the charge is
considered unusual and, therefore not indicative of the Company's
ongoing operational performance.
|
(5)
|
Total net significant
and/or non-recurring items in the table above for the six months
ended June 30, 2024 includes a net pre-tax charge of $0.2 billion
related to the recognition of unfavorable purchase commitments and
an impairment of contract fulfillment costs associated with
initiating alternative titanium sources at Collins. These charges
were recorded as a result of the Canadian government's imposition
of new sanctions in February 2024, which included U.S.- and
German-based Russian-owned entities from which we source titanium
for use in our Canadian operations. Management has determined that
these impacts are directly attributable to the sanctions,
incremental to similar costs incurred for reasons other than those
related to the sanctions and has determined that the nature of the
charge is considered significant and unusual, and therefore, not
indicative of the Company's ongoing operational
performance.
|
(6)
|
Total net significant
and/or non-recurring items in the table above for the six months
ended June 30, 2024 includes a tax benefit of $0.3 billion
recognized as a result of the closure of the examination phase of
multiple federal tax audits. In addition, there was a pre-tax
charge of $68 million for the write-off of certain tax related
indemnity receivables and a pre-tax gain on the reversal of $78
million of interest accruals, both directly associated with these
tax audit settlements. Management has determined that the nature of
these impacts related to the tax audit settlements is considered
significant and non-operational and therefore, not indicative of
the Company's ongoing operational performance.
|
RTX
Corporation
|
Reconciliation of
Adjusted (Non-GAAP) Results
|
Adjusted Income,
Earnings Per Share, and Effective Tax Rate
|
|
|
Quarter Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions - Income (Expense))
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net income
attributable to common shareowners
|
$
111
|
|
$
1,327
|
|
$
1,820
|
|
$
2,753
|
Total
Restructuring
|
(36)
|
|
(68)
|
|
(70)
|
|
(98)
|
Total Acquisition
accounting adjustments
|
(504)
|
|
(489)
|
|
(1,004)
|
|
(982)
|
Total net significant
and/or non-recurring items included in Operating profit
(1)(2)(3)(4)(5)(6)
|
(1,491)
|
|
(193)
|
|
(1,379)
|
|
(136)
|
Significant and/or
non-recurring items included in Non-service Pension
Income
|
|
|
|
|
|
|
|
Non-service pension
restructuring
|
(3)
|
|
—
|
|
(5)
|
|
(2)
|
Pension curtailment
related to sale of business (3)
|
—
|
|
—
|
|
9
|
|
—
|
Significant
non-recurring and non-operational items included in Interest
Expense, Net
|
|
|
|
|
|
|
|
Tax audit settlements
(6)
|
—
|
|
—
|
|
78
|
|
—
|
Tax effect of
restructuring and net significant and/or non-recurring items
above
|
257
|
|
165
|
|
216
|
|
266
|
Significant and/or
non-recurring items included in Income Tax Expense
|
|
|
|
|
|
|
|
Tax audit settlements
(6)
|
—
|
|
—
|
|
296
|
|
—
|
Significant and/or
non-recurring items included in Noncontrolling
Interest
|
|
|
|
|
|
|
|
Noncontrolling
interest share of customer insolvency charges
(4)
|
—
|
|
17
|
|
—
|
|
17
|
Noncontrolling
interest share of charges related to an insurance
settlement
|
(7)
|
|
—
|
|
(7)
|
|
—
|
Less: Impact on net
income attributable to common shareowners
|
(1,784)
|
|
(568)
|
|
(1,866)
|
|
(935)
|
Adjusted net income
attributable to common shareowners
|
$
1,895
|
|
$
1,895
|
|
$
3,686
|
|
$
3,688
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share
|
$
0.08
|
|
$
0.90
|
|
$
1.36
|
|
$
1.87
|
Impact on Diluted
Earnings Per Share
|
(1.33)
|
|
(0.39)
|
|
(1.39)
|
|
(0.64)
|
Adjusted Diluted
Earnings Per Share
|
$
1.41
|
|
$
1.29
|
|
$
2.75
|
|
$
2.51
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
59.1 %
|
|
15.4 %
|
|
15.8 %
|
|
17.0 %
|
Impact on Effective
Tax Rate
|
38.4 %
|
|
(2.1) %
|
|
(3.0) %
|
|
(1.3) %
|
Adjusted Effective
Tax Rate
|
20.7 %
|
|
17.5 %
|
|
18.8 %
|
|
18.3 %
|
(1)
|
Total net significant
and/or non-recurring items in the table above for the quarter and
six months ended June 30, 2024 includes charges of $918 million
related to the expected resolution of several outstanding legal
matters. The charge includes an additional accrual of $269 million
to resolve the previously disclosed criminal and civil government
investigations of defective pricing claims for certain legacy
Raytheon Company contracts entered into between 2011 and 2013 and
in 2017; an additional accrual of $364 million to resolve the
previously disclosed criminal and civil government
investigations of improper payments made by Raytheon Company and
its joint venture, Thales-Raytheon Systems, in connection with
certain Middle East contracts since 2012; and an accrual of $285
million related to certain voluntarily disclosed export controls
violations, primarily identified in connection with the integration
of Rockwell Collins and, to a lesser extent, Raytheon Company,
including certain violations expected to be resolved pursuant to a
consent agreement with the Department of State. Management has
determined that these impacts are directly attributable to these
legacy legal matters and that the nature of the charges are
considered significant and unusual and therefore, not indicative of
the Company's ongoing operational performance.
|
(2)
|
Total net significant
and/or non-recurring items in the table above for the quarter and
six months ended June 30, 2024 includes a pre-tax charge of $575
million related to the anticipated termination of a fixed price
development contract with a foreign customer at Raytheon. The
charge includes the write-off of remaining contract assets and our
best estimate of the expected settlement in conjunction with this
termination. Management has determined that these impacts are
directly attributable to the expected termination, incremental to
similar costs incurred for reasons other than those attributable to
the termination and has determined that the nature of the pre-tax
charge is considered significant and unusual and therefore, not
indicative of the Company's ongoing operational
performance.
|
(3)
|
Total net significant
and/or non-recurring items in the table above for the six months
ended June 30, 2024 includes a pre-tax gain, net of transaction and
other related costs, of $0.4 billion associated with the completed
sale of the Cybersecurity, Intelligence and Services (CIS) business
at Raytheon. Management has determined that the nature of the net
gain on the divestiture is considered significant and
non-operational and therefore, not indicative of the Company's
ongoing operational performance.
|
(4)
|
Total net significant
and/or non-recurring items in the table above for the six months
ended June 30, 2023 includes a net pre-tax charge of $0.2 billion
related to a customer insolvency during the second quarter of 2023.
The charge primarily relates to Contract assets and Customer
financing assets exposures with the customer. Management has
determined that the nature and significance of the charge is
considered unusual and, therefore not indicative of the Company's
ongoing operational performance.
|
(5)
|
Total net significant
and/or non-recurring items in the table above for the six months
ended June 30, 2024 includes a net pre-tax charge of $0.2 billion
related to the recognition of unfavorable purchase commitments and
an impairment of contract fulfillment costs associated with
initiating alternative titanium sources at Collins. These charges
were recorded as a result of the Canadian government's imposition
of new sanctions in February 2024, which included U.S.- and
German-based Russian-owned entities from which we source titanium
for use in our Canadian operations. Management has determined that
these impacts are directly attributable to the sanctions,
incremental to similar costs incurred for reasons other than those
related to the sanctions and has determined that the nature of the
charge is considered significant and unusual, and therefore, not
indicative of the Company's ongoing operational
performance.
|
(6)
|
Total net significant
and/or non-recurring items in the table above for the six months
ended June 30, 2024 includes a tax benefit of $0.3 billion
recognized as a result of the closure of the examination phase of
multiple federal tax audits. In addition, there was a pre-tax
charge of $68 million for the write-off of certain tax related
indemnity receivables and a pre-tax gain on the reversal of $78
million of interest accruals, both directly associated with these
tax audit settlements. Management has determined that the nature of
these impacts related to the tax audit settlements is considered
significant and non-operational and therefore, not indicative of
the Company's ongoing operational performance.
|
RTX
Corporation
|
Reconciliation of
Adjusted (Non-GAAP) Results
|
Segment Operating
Profit Margin and Adjusted Segment Operating Profit
Margin
|
|
|
Quarter Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
|
(Unaudited)
|
(dollars in
millions - Income (Expense))
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net
Sales
|
$
19,721
|
|
$
18,315
|
|
$
39,026
|
|
$
35,529
|
Reconciliation to
segment net sales:
|
|
|
|
|
|
|
|
Eliminations and other
|
591
|
|
470
|
|
1,074
|
|
898
|
Segment Net
Sales
|
$
20,312
|
|
$
18,785
|
|
$
40,100
|
|
$
36,427
|
Reconciliation to
adjusted segment net sales:
|
|
|
|
|
|
|
|
Net
significant and/or non-recurring items (1)
|
(70)
|
|
—
|
|
(70)
|
|
—
|
Adjusted Segment Net
Sales
|
$
20,382
|
|
$
18,785
|
|
$
40,170
|
|
$
36,427
|
|
|
|
|
|
|
|
|
Operating
Profit
|
$
529
|
|
$ 1,493
|
|
$ 2,399
|
|
$ 3,180
|
Operating Profit
Margin
|
2.7 %
|
|
8.2 %
|
|
6.1 %
|
|
9.0 %
|
Reconciliation to
segment operating profit:
|
|
|
|
|
|
|
|
Eliminations and other
|
36
|
|
16
|
|
41
|
|
(35)
|
Corporate
expenses and other unallocated items
|
930
|
|
59
|
|
1,026
|
|
102
|
FAS/CAS
operating adjustment
|
(212)
|
|
(284)
|
|
(426)
|
|
(573)
|
Acquisition accounting adjustments
|
504
|
|
489
|
|
1,004
|
|
982
|
Segment Operating
Profit
|
$ 1,787
|
|
$ 1,773
|
|
$ 4,044
|
|
$ 3,656
|
Segment Operating
Profit Margin
|
8.8 %
|
|
9.4 %
|
|
10.1 %
|
|
10.0 %
|
Reconciliation to
adjusted segment operating profit:
|
|
|
|
|
|
|
|
Restructuring
|
(34)
|
|
(47)
|
|
(67)
|
|
(76)
|
Net
significant and/or non-recurring items
(1)(2)(3)(4)(5)
|
(570)
|
|
(193)
|
|
(388)
|
|
(202)
|
Adjusted Segment
Operating Profit
|
$ 2,391
|
|
$ 2,013
|
|
$ 4,499
|
|
$ 3,934
|
Adjusted Segment
Operating Profit Margin
|
11.7 %
|
|
10.7 %
|
|
11.2 %
|
|
10.8 %
|
(1)
|
Total net significant
and/or non-recurring items in the table above for the quarter and
six months ended June 30, 2024 includes a pre-tax charge of $575
million related to the anticipated termination of a fixed price
development contract with a foreign customer at Raytheon. The
charge includes the write-off of remaining contract assets and our
best estimate of the expected settlement in conjunction with this
termination. Management has determined that these impacts are
directly attributable to the expected termination, incremental to
similar costs incurred for reasons other than those attributable to
the termination and has determined that the nature of the pre-tax
charge is considered significant and unusual and therefore, not
indicative of the Company's ongoing operational
performance.
|
(2)
|
Net significant and/or
non-recurring items in the table above for the six months ended
June 30, 2024 includes a pre-tax gain, net of transaction and other
related costs, of $0.4 billion associated with the completed sale
of the CIS business at Raytheon. Management has determined that the
nature of the net gain on the divestiture is considered significant
and non-operational and therefore, not indicative of the Company's
ongoing operational performance.
|
(3)
|
Net significant and/or
non-recurring items in the table above for the six months ended
June 30, 2023 includes a net pre-tax charge of
$0.2 billion related to a customer insolvency during the
second quarter of 2023. The charge primarily relates to Contract
assets and Customer financing assets exposures with the customer.
Management has determined that the nature and significance of the
charge is considered unusual and, therefore not indicative of the
Company's ongoing operational performance.
|
(4)
|
Net significant and/or
non-recurring items in the table above for the six months ended
June 30, 2024 includes a net pre-tax charge of $0.2 billion related
to the recognition of unfavorable purchase commitments and an
impairment of contract fulfillment costs associated with initiating
alternative titanium sources at Collins. These charges were
recorded as a result of the Canadian government's imposition of new
sanctions in February 2024, which included U.S.- and German-based
Russian-owned entities from which we source titanium for use in our
Canadian operations. Management has determined that these impacts
are directly attributable to the sanctions, incremental to similar
costs incurred for reasons other than those related to the
sanctions and has determined that the nature of the charge is
considered significant and unusual, and therefore, not indicative
of the Company's ongoing operational performance.
|
(5)
|
Net significant and/or
non-recurring items in the table above for the six months ended
June 30, 2024 includes a tax benefit of $0.3 billion recognized as
a result of the closure of the examination phase of multiple
federal tax audits. In addition, there was a pre-tax charge of $68
million for the write-off of certain tax related indemnity
receivables and a pre-tax gain on the reversal of $78 million of
interest accruals, both directly associated with these tax audit
settlements. Management has determined that the nature of these
impacts related to the tax audit settlements is considered
significant and non-operational and therefore, not indicative of
the Company's ongoing operational performance.
|
RTX
Corporation
|
Free Cash Flow
Reconciliation
|
|
|
Quarter Ended
June 30,
|
|
(Unaudited)
|
(dollars in
millions)
|
2024
|
|
2023
|
Net cash flows provided
by operating activities
|
$
2,733
|
|
$
719
|
Capital
expenditures
|
(537)
|
|
(526)
|
Free cash
flow
|
$
2,196
|
|
$
193
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
(Unaudited)
|
(dollars in
millions)
|
2024
|
|
2023
|
Net cash flows provided
by (used in) operating activities
|
$
3,075
|
|
$
(144)
|
Capital
expenditures
|
(1,004)
|
|
(1,046)
|
Free cash
flow
|
$
2,071
|
|
$
(1,190)
|
Media Contact
202.384.2474
Investor Contact
781.522.5123
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content:https://www.prnewswire.com/news-releases/rtx-reports-q2-2024-results-302205879.html
SOURCE RTX