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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
 ____________________________________ 
FORM 10-Q
____________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
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,Virginia22209
 (Address of principal executive offices) (Zip Code)
(781)522-3000
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock ($1 par value)RTXNew York Stock Exchange
(CUSIP 75513E 101)
2.150% Notes due 2030RTX 30New York Stock Exchange
(CUSIP 75513E AB7)

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,”


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“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  .    No  .
At March 31, 2024 there were 1,329,506,013 shares of Common Stock outstanding.



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RTX CORPORATION
AND SUBSIDIARIES
CONTENTS OF QUARTERLY REPORT ON FORM 10-Q
Quarter Ended March 31, 2024
 
 Page


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-Q are provided for convenience only. Information available through these web sites is not incorporated by reference into this Form 10-Q.

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PART I – FINANCIAL INFORMATION

Item 1.    Financial Statements
RTX CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) 
 Quarter Ended March 31,
(dollars in millions, except per share amounts)20242023
Net Sales:
Products sales$14,303 $12,787 
Services sales5,002 4,427 
Total net sales19,305 17,214 
Costs and Expenses:
Cost of sales - products12,216 10,700 
Cost of sales - services3,528 2,945 
Research and development669 607 
Selling, general, and administrative1,394 1,363 
Total costs and expenses17,807 15,615 
Other income, net372 88 
Operating profit1,870 1,687 
Non-operating expense (income), net:
Non-service pension income(386)(444)
Interest expense, net405 315 
Total non-operating expense (income), net19 (129)
Income before income taxes1,851 1,816 
Income tax expense108 335 
Net income1,743 1,481 
Less: Noncontrolling interest in subsidiaries’ earnings34 55 
Net income attributable to common shareowners$1,709 $1,426 
Earnings Per Share attributable to common shareowners:
Basic$1.29 $0.98 
Diluted1.28 0.97 
See accompanying Notes to Condensed Consolidated Financial Statements

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RTX CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
Quarter Ended March 31,
(dollars in millions)20242023
Net income$1,743 $1,481 
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments(121)122 
Pension and postretirement benefit plans adjustments(51)(146)
Change in unrealized cash flow hedging(73)12 
Other comprehensive income (loss), before tax(245)(12)
Income tax benefit related to items of other comprehensive income (loss)29 41 
Other comprehensive income (loss), net of tax(216)29 
Comprehensive income1,527 1,510 
Less: Comprehensive income attributable to noncontrolling interest34 55 
Comprehensive income attributable to common shareowners$1,493 $1,455 
See accompanying Notes to Condensed Consolidated Financial Statements

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RTX CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(dollars in millions)March 31, 2024December 31, 2023
Assets
Current Assets
Cash and cash equivalents$5,607 $6,587 
Accounts receivable, net10,280 10,838 
Contract assets13,104 12,139 
Inventory, net12,386 11,777 
Other assets, current6,646 7,076 
Total current assets48,023 48,417 
Customer financing assets2,359 2,392 
Fixed assets31,623 31,392 
Accumulated depreciation(15,985)(15,644)
Fixed assets, net15,638 15,748 
Operating lease right-of-use assets1,639 1,638 
Goodwill53,644 53,699 
Intangible assets, net34,960 35,399 
Other assets3,924 4,576 
Total assets$160,187 $161,869 
Liabilities, Redeemable Noncontrolling Interest, and Equity
Current Liabilities
Short-term borrowings$166 $189 
Accounts payable10,522 10,698 
Accrued employee compensation1,862 2,491 
Other accrued liabilities15,006 14,917 
Contract liabilities17,119 17,183 
Long-term debt currently due344 1,283 
Total current liabilities45,019 46,761 
Long-term debt42,334 42,355 
Operating lease liabilities, non-current1,410 1,412 
Future pension and postretirement benefit obligations2,320 2,385 
Other long-term liabilities6,967 7,511 
Total liabilities98,050 100,424 
Commitments and contingencies (Note 16)
Redeemable noncontrolling interest37 35 
Shareowners’ Equity:
Common stock37,108 37,055 
Treasury stock(27,029)(26,977)
Retained earnings53,052 52,154 
Unearned ESOP shares(11)(15)
Accumulated other comprehensive loss(2,635)(2,419)
Total shareowners’ equity60,485 59,798 
Noncontrolling interest1,615 1,612 
Total equity62,100 61,410 
Total liabilities, redeemable noncontrolling interest, and equity$160,187 $161,869 
See accompanying Notes to Condensed Consolidated Financial Statements

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RTX CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 Quarter Ended March 31,
(dollars in millions)20242023
Operating Activities:
Net income$1,743 $1,481 
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities:
Depreciation and amortization1,059 1,034 
Deferred income tax benefit(114)(329)
Stock compensation cost112 100 
Net periodic pension and other postretirement income(338)(388)
Gain on sale of Cybersecurity, Intelligence and Services business, net of transaction costs
(415) 
Change in:
Accounts receivable431 (962)
Contract assets(978)(1,198)
Inventory(646)(720)
Other current assets(225)(526)
Accounts payable and accrued liabilities(218)490 
Contract liabilities(54)223 
Other operating activities, net(15)(68)
Net cash flows provided by (used in) operating activities342 (863)
Investing Activities:
Capital expenditures(467)(520)
Dispositions of businesses, net of cash transferred1,283  
Increase in other intangible assets(163)(154)
Payments from settlements of derivative contracts, net(1)(13)
Other investing activities, net41 108 
Net cash flows provided by (used in) investing activities693 (579)
Financing Activities:
Proceeds from long-term debt 2,971 
Repayment of long-term debt(950) 
Change in commercial paper, net (Note 9) (427)
Change in other short-term borrowings, net(22)22 
Dividends paid on common stock(769)(790)
Repurchase of common stock(56)(562)
Other financing activities, net(210)(118)
Net cash flows (used in) provided by financing activities(2,007)1,096 
Effect of foreign exchange rate changes on cash and cash equivalents(8)1 
Net decrease in cash, cash equivalents, and restricted cash(980)(345)
Cash, cash equivalents, and restricted cash, beginning of period6,626 6,291 
Cash, cash equivalents, and restricted cash, end of period5,646 5,946 
Less: Restricted cash, included in Other assets, current and Other assets39 53 
Cash and cash equivalents, end of period$5,607 $5,893 
See accompanying Notes to Condensed Consolidated Financial Statements

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RTX CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited)
Quarter Ended March 31,
(dollars in millions, except per share amounts; shares in thousands)20242023
Equity beginning balance$61,410 $74,178 
Common Stock
Beginning balance37,055 37,939 
Common stock plans activity53 92 
Ending balance37,108 38,031 
Treasury Stock
Beginning balance(26,977)(15,530)
Common stock repurchased(52)(582)
Ending balance(27,029)(16,112)
Retained Earnings
Beginning balance52,154 52,269 
Net income attributable to common shareholders1,709 1,426 
Dividends on common stock(769)(790)
Dividends on ESOP common stock(14)(13)
Other(28)(1)
Ending balance53,052 52,891 
Unearned ESOP Shares
Beginning balance(15)(28)
Common stock plans activity4 2 
Ending balance(11)(26)
Accumulated Other Comprehensive Loss
Beginning balance(2,419)(2,018)
Other comprehensive income (loss), net of tax(216)29 
Ending balance(2,635)(1,989)
Noncontrolling Interest
Beginning balance1,612 1,546 
Net income34 55 
Less: Redeemable noncontrolling interest net income (2)
Dividends attributable to noncontrolling interest(31)(44)
Disposition of noncontrolling interest, net (3)
Ending balance1,615 1,552 
Equity at March 31
$62,100 $74,347 
Supplemental share information
Shares of common stock issued under employee plans, net3,159 820 
Shares of common stock repurchased560 5,918 
Dividends declared per share of common stock$0.590 $0.550 
See accompanying Notes to Condensed Consolidated Financial Statements

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RTX CORPORATION
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Basis of Presentation
The Condensed Consolidated Financial Statements at March 31, 2024 and for the quarters ended March 31, 2024 and 2023 are unaudited, and in the opinion of management include adjustments of a normal recurring nature necessary for a fair statement of the results for the interim periods. The results reported in these Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the financial statements and notes in our 2023 Annual Report on Form 10-K.
Unless the context otherwise requires, the terms “we,” “our,” “us,” “the Company,” and “RTX” mean RTX Corporation and its subsidiaries.
We reclassified certain immaterial prior period amounts within the Condensed Consolidated Statement of Cash Flows to conform to our current period presentation.
Effective July 1, 2023, we streamlined the structure of our core businesses to three principal business segments: Collins Aerospace, Pratt & Whitney, and Raytheon. Prior period information has been recast to conform to our current period presentation.
Raytheon follows a 4-4-5 fiscal calendar while Collins Aerospace (Collins) and Pratt & Whitney use a quarter calendar end. Throughout this Quarterly Report on Form 10-Q, when we refer to the quarters ended March 31, 2024 and 2023 with respect to Raytheon, we are referring to their March 31, 2024 and April 2, 2023 fiscal quarter ends, respectively.
Pratt & Whitney Powder Metal Matter. As previously disclosed, Pratt & Whitney has determined that a rare condition in powder metal used to manufacture certain engine parts requires accelerated inspection of the PW1100G-JM (PW1100) Geared Turbofan (GTF) fleet, which powers the A320neo family of aircraft (A320neo) (herein referred to as the “Powder Metal Matter”). See “Note 16: Commitments and Contingencies” for additional information.
Russia Sanctions. 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. As a result of the Canadian government’s imposition of 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, we recorded charges of $175 million in the first quarter of 2024 within our Collins segment. These charges are primarily 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. We continue to monitor developments, including additional sanctions and other measures, that could adversely affect the Company and/or our supply chain, business partners, or customers.
Note 2: Acquisitions and Dispositions
Dispositions. On March 29, 2024, we completed the sale of our Cybersecurity, Intelligence and Services (CIS) business within our Raytheon segment for proceeds of approximately $1.3 billion in cash, resulting in an aggregate pre-tax gain, net of transaction and other related costs, of $0.4 billion ($0.2 billion after tax), primarily recognized in Other income, net within the Condensed Consolidated Statement of Operations.
As previously disclosed, on July 20, 2023, we entered into a definitive agreement to sell the actuation and flight control business within our Collins segment to Safran S.A. for gross proceeds of approximately $1.8 billion. The closing of the transaction is subject to regulatory approvals and other customary closing conditions. On November 16, 2023, the Italian government notified RTX that it has denied Safran’s proposed acquisition of the portion of the Collins business conducted by Microtecnica S.r.l. RTX and Safran have both appealed that decision to the relevant regional court in Italy, and continue to evaluate additional options in response to the Italian government’s decision.

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Note 3: Goodwill and Intangible Assets
Goodwill. Changes in our goodwill balances for the quarter ended March 31, 2024 were as follows:
(dollars in millions)Balance as of December 31, 2023Acquisitions and DivestituresForeign Currency Translation and Other
Balance as of March 31, 2024
Collins Aerospace$33,135 $ $(57)$33,078 
Pratt & Whitney1,563   1,563 
Raytheon18,984  2 18,986 
Total Segments53,682  (55)53,627 
Eliminations and other17   17 
Total$53,699 $ $(55)$53,644 
Intangible Assets. Identifiable intangible assets are comprised of the following:
 March 31, 2024December 31, 2023
(dollars in millions)Gross AmountAccumulated AmortizationGross AmountAccumulated Amortization
Amortized:
Collaboration assets$5,879 $(1,747)$5,810 $(1,688)
Exclusivity assets3,516 (356)3,460 (352)
Developed technology and other1,211 (649)1,219 (635)
Customer relationships29,564 (11,115)29,605 (10,683)
40,170 (13,867)40,094 (13,358)
Indefinite-lived:
Trademarks and other8,657  8,663 — 
Total$48,827 $(13,867)$48,757 $(13,358)
Amortization of intangible assets for the quarters ended March 31, 2024 and 2023 was $526 million and $509 million, respectively. The following is the expected amortization of intangible assets for the remainder of 2024 through 2029: 
(dollars in millions)Remaining 202420252026202720282029
Amortization expense$1,687 $2,087 $2,012 $1,891 $1,813 $1,604 
Note 4: Earnings Per Share
 Quarter Ended March 31,
(dollars and shares in millions, except per share amounts)20242023
Net income attributable to common shareowners$1,709 $1,426 
Basic weighted average number of shares outstanding1,329.4 1,462.2 
Stock awards and equity units (share equivalent)7.9 12.0 
Diluted weighted average number of shares outstanding1,337.3 1,474.2 
Earnings Per Share attributable to common shareowners:
Basic$1.29 $0.98 
Diluted1.28 0.97 
The computation of diluted earnings per share (EPS) excludes the effect of the potential exercise of stock awards, including stock appreciation rights and stock options, when the average market price of the common stock is lower than the exercise price of the related stock awards during the period because the effect would be anti-dilutive. In addition, the computation of diluted EPS excludes the effect of the potential release or exercise of stock awards when the awards’ assumed proceeds exceed the average market price of the common shares during the period. For the quarters ended March 31, 2024 and 2023, the number of stock awards excluded from the computation was 15.3 million and 4.1 million, respectively.

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Note 5: Changes in Contract Estimates at Completion
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 revenue 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:
Quarter Ended March 31,
(dollars in millions, except per share amounts)20242023
Total net sales$(18)$(40)
Operating profit(162)(124)
Income attributable to common shareowners (1)
(128)(98)
Diluted earnings per share attributable to common shareowners (1)
$(0.10)$(0.07)
(1)     Amounts reflect a U.S. statutory tax rate of 21%, which approximates our tax rate on our EAC adjustments.
Note 6: Accounts Receivable, Net
Accounts receivable, net consisted of the following:
(dollars in millions)March 31, 2024December 31, 2023
Accounts receivable$10,600 $11,154 
Allowance for expected credit losses(320)(316)
Total accounts receivable, net$10,280 $10,838 

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Note 7: Contract Assets and Liabilities
Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billings. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. We receive payments from customers based on the terms established in our contracts. Total contract assets and contract liabilities were as follows:
(dollars in millions)March 31, 2024December 31, 2023
Contract assets$13,104 $12,139 
Contract liabilities(17,119)(17,183)
Net contract liabilities$(4,015)$(5,044)
Contract assets increased $965 million during the quarter ended March 31, 2024 primarily due to sales in excess of billings on certain contracts at Pratt & Whitney and Raytheon. We recognized revenue of $2.6 billion during the quarter ended March 31, 2024, related to contract liabilities as of January 1, 2024 and $1.9 billion during the quarter ended March 31, 2023, related to contract liabilities as of January 1, 2023.
As of March 31, 2024, our Contract liabilities include approximately $405 million of advance payments received from a Middle East customer on contracts for which we no longer believe we will be able to execute on or obtain required regulatory approvals. These advance payments may become refundable to the customer if the contracts are ultimately terminated.
Contract assets are net of an allowance for expected credit losses of $194 million and $197 million as of March 31, 2024 and December 31, 2023, respectively.
Note 8: Inventory, net
Inventory, net consisted of the following:
(dollars in millions)March 31, 2024December 31, 2023
Raw materials$4,126 $3,911 
Work-in-process4,384 4,162 
Finished goods3,876 3,704 
Total inventory, net$12,386 $11,777 
Note 9: Borrowings and Lines of Credit
As of March 31, 2024, 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 March 31, 2024, there were no borrowings outstanding under this agreement.
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 March 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. At March 31, 2024 and December 31, 2023, we had no commercial paper borrowings outstanding. During the quarter ended March 31, 2024, we had no new borrowings, and no repayments, of commercial paper with maturities greater than 90 days. During the quarter ended March 31, 2023, we had no new borrowings, and $100 million in repayments, of commercial paper with maturities greater than 90 days.
There were no issuances of long-term debt during the quarter ended March 31, 2024. We had the following issuances of long-term debt during the quarter ended March 31, 2023:
DateDescription of NotesAggregate Principal Balance (in millions)
February 27, 2023
5.000% notes due 2026
$500 
5.150% notes due 2033
1,250 
5.375% notes due 2053
1,250 

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There were no repayments of long-term debt during the quarter ended March 31, 2023. We made the following repayment of long-term debt during the quarter ended March 31, 2024:
DateDescription of NotesAggregate Principal Balance (in millions)
March 15, 2024
3.200% notes due 2024
$950 
In April 2024, we repaid $500 million of the 3 Month Secured Overnight Financing Rate (SOFR) plus 1.225% term loan due 2025.
Long-term debt consisted of the following:
(dollars in millions)March 31, 2024December 31, 2023
3.200% notes due 2024 (1)
$ $950 
3.150% notes due 2024 (1)
300 300 
3 Month SOFR plus 1.225% term loan due 2025
2,000 2,000 
3.950% notes due 2025 (1)
1,500 1,500 
5.000% notes due 2026 (1)
500 500 
2.650% notes due 2026 (1)
719 719 
3 Month SOFR plus 1.225% term loan due 2026
2,000 2,000 
5.750% notes due 2026 (1)
1,250 1,250 
3.125% notes due 2027 (1)
1,100 1,100 
3.500% notes due 2027 (1)
1,300 1,300 
7.200% notes due 2027 (1)
382 382 
7.100% notes due 2027
135 135 
6.700% notes due 2028
285 285 
7.000% notes due 2028 (1)
185 185 
4.125% notes due 2028 (1)
3,000 3,000 
5.750% notes due 2029 (1)
500 500 
7.500% notes due 2029 (1)
414 414 
2.150% notes due 2030 (€500 million principal value) (1)
542 548 
2.250% notes due 2030 (1)
1,000 1,000 
6.000% notes due 2031 (1)
1,000 1,000 
1.900% notes due 2031 (1)
1,000 1,000 
2.375% notes due 2032 (1)
1,000 1,000 
5.150% notes due 2033 (1)
1,250 1,250 
6.100% notes due 2034 (1)
1,500 1,500 
5.400% notes due 2035 (1)
446 446 
6.050% notes due 2036 (1)
410 410 
6.800% notes due 2036 (1)
117 117 
7.000% notes due 2038
148 148 
6.125% notes due 2038 (1)
575 575 
4.450% notes due 2038 (1)
750 750 
5.700% notes due 2040 (1)
553 553 
4.875% notes due 2040 (1)
600 600 
4.700% notes due 2041 (1)
425 425 
4.500% notes due 2042 (1)
3,500 3,500 
4.800% notes due 2043 (1)
400 400 
4.200% notes due 2044 (1)
300 300 
4.150% notes due 2045 (1)
850 850 
3.750% notes due 2046 (1)
1,100 1,100 
4.050% notes due 2047 (1)
600 600 

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4.350% notes due 2047 (1)
1,000 1,000 
4.625% notes due 2048 (1)
1,750 1,750 
3.125% notes due 2050 (1)
1,000 1,000 
2.820% notes due 2051 (1)
1,000 1,000 
3.030% notes due 2052 (1)
1,100 1,100 
5.375% notes due 2053 (1)
1,250 1,250 
6.400% notes due 2054 (1)
1,750 1,750 
Other (including finance leases)
252 255 
Total principal long-term debt42,738 43,697 
Other (fair market value adjustments, (discounts)/premiums, and debt issuance costs)(60)(59)
Total long-term debt42,678 43,638 
Less: current portion344 1,283 
Long-term debt, net of current portion$42,334 $42,355 
(1)    We may redeem these notes, in whole or in part, at our option pursuant to their terms prior to the applicable maturity date.
The average maturity of our long-term debt at March 31, 2024 is approximately 13 years.
Note 10: Employee Benefit Plans
Pension and Postretirement Plans. We sponsor both funded and unfunded domestic and foreign defined benefit pension and postretirement benefit (PRB) plans and defined contribution plans.
Contributions to our plans were as follows:
 Quarter Ended March 31,
(dollars in millions)20242023
U.S. qualified defined benefit plans$ $ 
International defined benefit plans2 8 
PRB plans9 4 
Defined contribution plans395 372 
The amounts recognized in the Condensed Consolidated Balance Sheet consist of:
(dollars in millions)March 31, 2024December 31, 2023
Noncurrent pension assets (included in Other assets)$1,600 $1,296 
Current pension and PRB liabilities (included in Accrued employee compensation)270 270 
Future pension and postretirement benefit obligations2,320 2,385 
The amounts recognized in Future pension and postretirement benefit obligations consist of:
(dollars in millions)March 31, 2024December 31, 2023
Noncurrent pension liabilities$1,679 $1,737 
Noncurrent PRB liabilities580 582 
Other pension and PRB related items
61 66 
Future pension and postretirement benefit obligations$2,320 $2,385 

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The components of net periodic (income) expense for our defined pension and PRB plans were as follows:
 
Pension Benefits
Quarter Ended March 31,
PRB
Quarter Ended March 31,
(dollars in millions)2024202320242023
Operating expense
Service cost$47 $55 $1 $1 
Non-operating expense
Interest cost596 626 11 12 
Expected return on plan assets(937)(937)(5)(5)
Amortization of prior service credit(43)(39)  
Recognized actuarial net (gain) loss5 (95)(6)(8)
 Net settlement, curtailment, and special termination benefit (gain) loss(7)2   
Non-service pension income(386)(443) (1)
Total net periodic (income) expense$(339)$(388)$1 $ 
We have set aside assets in separate trusts, which we expect to be used to pay for certain nonqualified defined benefit and defined contribution plan obligations in excess of qualified plan limits. These assets are included in Other assets in our Condensed Consolidated Balance Sheet. The fair value of marketable securities held in trusts was as follows:
(dollars in millions)March 31, 2024December 31, 2023
Marketable securities held in trusts$705 $745 
Note 11: Income Taxes
Our effective tax rate for the quarter ended March 31, 2024 was 5.8%, as compared to 18.4% for the quarter ended March 31, 2023. The lower effective tax rate for the quarter ended March 31, 2024 compared to the quarter ended March 31, 2023 is primarily driven by the $275 million tax benefit recognized as a result of the conclusion of the examination phases of the RTX and Rockwell Collins audits, partially offset by the tax costs related to the sale of the CIS business of $143 million.
We conduct business globally and, as a result, RTX or one or more of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as Canada, China, France, Germany, India, Poland, Saudi Arabia, Singapore, Switzerland, the United Kingdom, and the United States. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2014.
The Examination Division of the Internal Revenue Service (IRS) has concluded the examination phase of RTX (formerly United Technologies Corporation) tax years 2017 and 2018, pre-acquisition Rockwell Collins tax years 2016, 2017 and 2018, and pre-merger Raytheon Company tax years 2017, 2018 and 2019 as well as certain refund claims of Raytheon Company for tax years 2014, 2015 and 2016 filed prior to the Raytheon merger. The Company filed protests with respect to certain IRS proposed adjustments for each exam and will dispute these adjustments at the Appeals Division of the IRS. The timing of any resolution at the Appeals Division is uncertain.
As a result of the conclusion of the examination phases for RTX and Rockwell Collins during the quarter ended March 31, 2024, the Company recognized a net income benefit of $285 million in the quarter, of which $275 million is within income tax expense. The net income benefit recognized includes the effects of adjusting interest accruals and certain tax related indemnity receivables.
In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. It is reasonably possible that over the next 12 months the amount of unrecognized tax benefits may change within a range of a net reduction of $50 million to a net increase of $75 million as a result of the revaluation of uncertain tax positions arising from developments in examinations, in appeals, or in the courts, or the closure of tax statutes.

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Note 12: Financial Instruments
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.
The present value of aggregate notional principal of our outstanding foreign currency hedges was $14.9 billion and $15.8 billion at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024, all derivative contracts accounted for as cash flow hedges will mature by March 2036.
The following table summarizes the fair value and presentation in the Condensed Consolidated Balance Sheet for derivative instruments:
(dollars in millions)Balance Sheet LocationMarch 31, 2024December 31, 2023
Derivatives designated as hedging instruments:
Foreign exchange contractsOther assets, current$173 $225 
Other accrued liabilities166 143 
Derivatives not designated as hedging instruments:
Foreign exchange contractsOther assets, current$22 $83 
Other accrued liabilities46 37 
The effect of cash flow hedging relationships on Accumulated other comprehensive loss and on the Condensed Consolidated Statement of Operations in the quarters ended March 31, 2024 and 2023 are presented in “Note 17: Equity.” The amounts of gain or loss are attributable to foreign exchange contract activity and are primarily recorded as a component of Products sales when reclassified from Accumulated other comprehensive loss.
The Company utilizes the critical terms match method in assessing derivatives for hedge effectiveness. Accordingly, the hedged items and derivatives designated as hedging instruments are highly effective.
As of March 31, 2024, our €500 million principal value of euro-denominated long-term debt qualifies as a net investment hedge against our investments in European businesses, which is deemed to be effective.
The effect of derivatives not designated as hedging instruments is included within Other income, net, on the Condensed Consolidated Statement of Operations and is not significant.
Note 13: Fair Value Measurements
The following tables provide the valuation hierarchy classification of assets and liabilities that are carried at fair value and measured on a recurring basis in our Condensed Consolidated Balance Sheet:
March 31, 2024
(dollars in millions)TotalLevel 1Level 2Level 3
Recurring fair value measurements:
Marketable securities held in trusts$705 $646 $59 $ 
Derivative assets195  195  
Derivative liabilities212  212  
December 31, 2023
(dollars in millions)TotalLevel 1Level 2Level 3
Recurring fair value measurements:
Marketable securities held in trusts$745 $682 $63 $ 
Derivative assets308  308  
Derivative liabilities180  180  
Valuation Techniques. Our derivative assets and liabilities include foreign exchange contracts that are measured at fair value using internal models based on observable market inputs such as forward rates, interest rates, our own credit risk, and our counterparties’ credit risks.

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As of March 31, 2024, there has not been any significant impact to the fair value of our derivative liabilities due to our own credit risk. Similarly, there has not been any significant adverse impact to our derivative assets based on our evaluation of our counterparties’ credit risks.
The following table provides carrying amounts and fair values of financial instruments that are not carried at fair value in our Condensed Consolidated Balance Sheet:
 March 31, 2024December 31, 2023
(dollars in millions)Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Customer financing notes receivable$66 $56 $74 $63 
Long-term debt (excluding finance leases)42,588 39,957 43,546 41,598 
The following tables provide the valuation hierarchy classification of assets and liabilities that are not carried at fair value in our Condensed Consolidated Balance Sheet:
March 31, 2024
(dollars in millions)TotalLevel 1Level 2Level 3
Customer financing notes receivable$56 $ $56 $ 
Long-term debt (excluding finance leases)39,957  35,914 4,043 
December 31, 2023
(dollars in millions)TotalLevel 1Level 2Level 3
Customer financing notes receivable$63 $ $63 $ 
Long-term debt (excluding finance leases)41,598  37,559 4,039 
The fair value of our Short-term borrowings approximates the carrying value due to their short-term nature and is classified as level 3 within the fair value hierarchy.
Note 14: Variable Interest Entities
Pratt & Whitney holds a 61% program share interest in the International Aero Engines AG (IAE) collaboration with MTU Aero Engines AG (MTU) and Japanese Aero Engines Corporation (JAEC), and a 49.5% ownership interest in IAE. IAE’s business purpose is to coordinate the design, development, manufacturing, and product support of the V2500 engine program through involvement with the collaborators. Additionally, Pratt & Whitney, JAEC, and MTU are participants in the International Aero Engines, LLC (IAE LLC) collaboration, whose business purpose is to coordinate the design, development, manufacturing, and product support for the PW1100G-JM engine for the Airbus A320neo family of aircraft. Pratt & Whitney holds a 59% program share interest and a 59% ownership interest in IAE LLC. IAE and IAE LLC retain limited equity with the primary economics of the programs passed to the participants. As such, we have determined that IAE and IAE LLC are variable interest entities with Pratt & Whitney as the primary beneficiary. IAE and IAE LLC have, therefore, been consolidated. Other collaborators participate in Pratt & Whitney’s program share interest in IAE and IAE LLC. Pratt & Whitney’s net program share interest in IAE and IAE LLC, after considering its sub-collaborator share, is 57% and 51%, respectively. The carrying amounts and classification of assets and liabilities for variable interest entities in our Condensed Consolidated Balance Sheet are as follows:
(dollars in millions)March 31, 2024December 31, 2023
Current assets$9,200 $9,309 
Noncurrent assets946 860 
Total assets$10,146 $10,169 
Current liabilities$12,680 $13,020 
Noncurrent liabilities84 31 
Total liabilities$12,764 $13,051 
Note 15: Guarantees
We extend a variety of financial, market value, and product performance guarantees to third parties. These instruments expire on various dates through 2032. Additional guarantees of project performance for which there is no stated value also remain

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outstanding. A portion of our third party guarantees are subject to indemnification for our benefit for any liabilities that could arise. As of March 31, 2024 and December 31, 2023, the following financial guarantees were outstanding:
March 31, 2024December 31, 2023
(dollars in millions)Maximum Potential PaymentCarrying Amount of LiabilityMaximum Potential PaymentCarrying Amount of Liability
Commercial aerospace financing arrangements$286 $ $288 $ 
Third party guarantees365 1 386 1 
We have made residual value and other guarantees related to various commercial aerospace customer financing arrangements. The estimated fair market values of the guaranteed assets equal or exceed the value of the related guarantees, net of existing reserves. Collaboration partners’ share of these financing guarantees were $134 million and $135 million at March 31, 2024 and December 31, 2023, respectively.
We also have obligations arising from sales of certain businesses and assets, including those from representations and warranties and related indemnities for environmental, health and safety, tax, and employment matters. The maximum potential payment related to these obligations is not a specified amount, as a number of the obligations do not contain financial caps. The carrying amount of liabilities related to these obligations were $94 million and $97 million at March 31, 2024 and December 31, 2023, respectively. These primarily relate to environmental liabilities, which are included in our total environmental liabilities as further discussed in “Note 16: Commitments and Contingencies.”
We accrue for costs associated with guarantees when it is probable that a liability has been incurred and the amount can be reasonably estimated. The most likely cost to be incurred is accrued based on an evaluation of currently available facts, and where no amount within a range of estimates is more likely, the minimum is accrued.
We also provide service and warranty policies on our products and extend performance and operating cost guarantees beyond our normal service and warranty policies on some of our products, particularly commercial aircraft engines. In addition, we incur discretionary costs to service our products in connection with specific product performance issues. Liabilities for performance and operating cost guarantees are based upon future product performance and durability, and are largely estimated based upon historical experience. Adjustments are made to accruals as claims data and historical experience warrant.
The changes in the carrying amount of service and product warranties and product performance guarantees for the quarters ended March 31, 2024 and 2023 were as follows:
(dollars in millions)20242023
Balance as of January 1$1,091 $1,109 
Warranties and performance guarantees issued65 69 
Settlements(71)(84)
Other(1)(1)
Balance as of March 31$1,084 $1,093 
Product and service guarantees incurred in connection with long term production contracts and certain aftermarket arrangements are generally accounted for within the contract estimates at completion.
Note 16: Commitments and Contingencies
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 the following matters will have a material adverse effect upon our competitive position, results of operations, financial condition, or liquidity.
Environmental. Our operations are subject to environmental regulation by federal, state, and local authorities in the United States and regulatory authorities with jurisdiction over our foreign operations. We have accrued for the costs of environmental remediation activities, including but not limited to investigatory, remediation, operating and maintenance costs, and performance guarantees, and periodically reassess these amounts. We do not expect any additional liability to have a material adverse effect on our results of operations, financial condition, or liquidity. As of March 31, 2024 and December 31, 2023, we had $770 million and $760 million, respectively, reserved for environmental remediation.
Commercial Aerospace Financing and Other Commitments. We had commercial aerospace financing commitments and other contractual commitments of approximately $14.5 billion and $14.6 billion as of March 31, 2024 and December 31, 2023, respectively, on a gross basis before reduction for our collaboration partners’ share. Aircraft financing commitments, in the form of debt or lease financing, are provided to certain commercial aerospace customers. The extent to which the financing

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commitments will be utilized is not currently known, since customers may be able to obtain more favorable terms from other financing sources. We may also arrange for third-party investors to assume a portion of these commitments. The majority of financing commitments are collateralized arrangements. We may also lease aircraft and subsequently sublease the aircraft to customers under long-term non-cancelable operating leases, or pay deposits on behalf of our customers to secure production slots with the airframers (pre-delivery payments). Our financing commitments with customers are contingent upon maintenance of certain levels of financial condition by our customers. Associated risks on these commitments are mitigated due to the fact that interest rates are variable during the commitment term and are set at the date of funding based on current market conditions, the fair value of the underlying collateral, and the credit worthiness of our customers. As a result, the fair value of these financing commitments is expected to equal the amounts funded.
We also have other contractual commitments to make payments to secure certain contractual rights to provide product on new aircraft platforms. The estimated amount and timing of these payments are generally based on future sales or engine flight hours. Payments made on these contractual commitments are included within intangible assets as exclusivity assets and are amortized over the term of underlying economic benefit. We have entered into certain collaboration arrangements, which may include participation by our collaboration partners in these commitments. In addition, in connection with our 2012 agreement to acquire Rolls-Royce’s ownership and collaboration interests in IAE, additional payments are due to Rolls-Royce contingent upon each hour flown through June 2027 by the V2500-powered aircraft in service as of the acquisition date. These flight hour payments are capitalized as collaboration intangible assets as payments are made.
Other Financing Arrangements. We have entered into standby letters of credit and surety bonds with financial institutions to meet various bid, performance, warranty, retention, and advance payment obligations for us or our affiliates. We enter into these agreements to assist certain affiliates in obtaining financing on more favorable terms, making bids on contracts and performing their contractual obligations. The stated values of these letters of credit agreements and surety bonds totaled $3.3 billion as of March 31, 2024.
Offset / Industrial Participation Obligations. We have entered into industrial cooperation agreements, sometimes in the form of either offset agreements or ICIP agreements, as a condition to obtaining orders for our products and services from certain customers in foreign countries. At March 31, 2024, the aggregate amount of these agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $12.5 billion. These agreements are designed to return economic value to the foreign country by requiring us to engage in activities supporting local defense or commercial industries, promoting a balance of trade, developing in-country technology capabilities, or addressing other local development priorities. Offset agreements may be satisfied through activities that do not require a direct cash payment, including transferring technology, providing manufacturing, training, and other consulting support to in-country projects, and the purchase by third parties (e.g., our vendors) of supplies from in-country vendors. These agreements may also be satisfied through our use of cash for activities such as subcontracting with local partners, purchasing supplies from in-country vendors, providing financial support for in-country projects, and making investments in local ventures. Such activities may also vary by country depending upon requirements as dictated by their governments. We typically do not commit to offset agreements until orders for our products or services are definitive. The amounts ultimately applied against our offset agreements are based on negotiations with the customers and typically require cash outlays that represent only a fraction of the notional value in the offset agreements. Offset programs usually extend over several or more years and may provide for penalties in the event we fail to perform in accordance with offset requirements. Historically, we have not been required to pay any penalties of significance.
Government Oversight. In the ordinary course of business, the Company and its subsidiaries and our properties are subject to regulatory and governmental examinations, information gathering requests, inquiries, investigations, and threatened legal actions and proceedings. For example, we are now, and believe that, in light of the current U.S. government contracting environment, we will continue to be the subject of one or more U.S. government investigations. Our contracts with the U.S. government are also subject to audits. Agencies that oversee contract performance include: the Defense Contract Audit Agency (DCAA), the Defense Contract Management Agency (DCMA), the Inspectors General of the U.S. Department of Defense (DoD) and other departments and agencies, the Government Accountability Office (GAO), the Department of Justice (DOJ), and Congressional Committees. Other areas of our business operations may also be subject to audit and investigation by these and other agencies. From time to time, agencies investigate or conduct audits to determine whether our operations are being conducted in accordance with applicable requirements. Such investigations and audits may be initiated due to a number of reasons, including as a result of a whistleblower complaint. Such investigations and audits could result in administrative, civil or criminal liabilities, including repayments, fines, treble or other damages, forfeitures, restitution, or penalties being imposed upon us, the suspension of government export licenses, or the suspension or debarment from future U.S. government contracting. U.S. government investigations often take years to complete. The U.S. government also reserves the right to debar a contractor from receiving new government contracts for fraudulent, criminal, or other seriously improper conduct. The U.S. government could void any contracts found to be tainted by fraud. Like many defense contractors, we have received audit reports recommending the reduction of certain contract prices because, for example, cost or pricing data or cost accounting

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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 may involve substantial amounts. We have made voluntary refunds in those cases we believe appropriate, have settled some allegations and, in some cases, continue to negotiate and/or litigate. The Company may be, and in some cases has been, required to make payments into escrow of disputed liabilities while the related litigation is pending. If the litigation is resolved in the Company’s favor, any such payments will be returned to the Company with interest. Our final allowable incurred costs for each year are also subject to audit and have, from time to time, resulted in disputes between us and the U.S. government, with litigation resulting at the Court of Federal Claims (COFC) or the Armed Services Board of Contract Appeals (ASBCA), or their related courts of appeals. In addition, the DOJ has, from time to time, convened grand juries to investigate possible irregularities by us. We also provide products and services to customers outside of the U.S., and those sales are subject to local government laws, regulations, and procurement policies and practices. Our compliance with such local government regulations or any applicable U.S. government regulations (e.g., the Foreign Corrupt Practices Act (FCPA) and International Traffic in Arms Regulations (ITAR)) may also be investigated or audited. In addition, we accrue for liabilities associated with those matters that are probable and can be reasonably estimated. The most likely liability amount to be incurred is accrued based upon a range of estimates. Where no amount within a range of estimates is more likely, then we accrue the minimum amount. Other than as specifically disclosed in this Form 10-Q, we do not expect these audits, investigations or disputes to have a material effect on our results of operations, financial condition, or liquidity, either individually or in the aggregate.
Tax Treatment of Carrier and Otis Dispositions. Management has determined that the distributions of Carrier and Otis on April 3, 2020, and certain related internal business separation transactions, qualified as tax-free under applicable law. In making these determinations, we applied the tax law in the relevant jurisdictions to our facts and circumstances and obtained tax rulings from the relevant taxing authorities, tax opinions, and/or other external tax advice related to the concluded tax treatment. If the completed distributions of Carrier or Otis or certain internal business separation transactions were to fail to qualify for tax-free treatment, the Company could be subject to significant liabilities, and there could be material adverse impacts on the Company’s business, results of operations, financial condition, or liquidity in future reporting periods.
Pratt & Whitney Powder Metal Matter. Pratt & Whitney has 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. This determination was made pursuant to Pratt & Whitney’s safety management system.
On August 4, 2023, Pratt & Whitney issued a special instruction (SI), to operators of PW1100 GTF powered A320neo aircraft, which required accelerated inspections and engine removals covering an initial subset of operational engines, no later than September 15, 2023. During the third quarter of 2023, through its safety management system, Pratt & Whitney continued its engineering and industrial assessment which resulted in an updated fleet management plan for the remaining PW1100 fleet. This updated plan requires a combination of part inspections and retirements for some high pressure turbine and high pressure compressor parts made from affected raw material. Guidance to affected operators was released via service bulletins (SB) and SI in November 2023, and this guidance has been reflected in airworthiness directives issued by the Federal Aviation Administration (FAA). Consistent with previous information, the actions are expected to result in significant incremental shop visits through the end of 2026. As a result, Pratt & Whitney expects a significant increase in aircraft on ground levels for the PW1100 powered A320neo fleet through 2026.
As a result of anticipated increased aircraft on ground levels and expected compensation to customers for this disruption, as well as incremental maintenance costs resulting from increased inspections and shop visits, Pratt & Whitney recorded a pre-tax operating profit charge in the third quarter of 2023 of $2.9 billion, reflecting Pratt & Whitney’s net 51% program share of the PW1100 program. This amount reflected our best estimate of expected customer compensation for the estimated duration of the disruption as well as the EAC adjustment impact of this matter to Pratt & Whitney’s long-term maintenance contracts. The incremental costs to the business’s long-term maintenance contracts include the estimated cost of additional inspections, replacement of parts, and other related impacts.
The charge recorded in the third quarter of 2023 resulted in a net increase in Other accrued liabilities of $2.8 billion, which principally related to our 51% share of an accrual for expected customer compensation. At March 31, 2024 and December 31, 2023, we had Other accrued liabilities of $2.7 billion and $2.8 billion, respectively, related to the Powder Metal Matter. The change in the accrual during the quarter ended March 31, 2024 was primarily due to customer payments and credits issued.
Other engine models within Pratt & Whitney’s fleet contain parts manufactured with affected powder metal, and while Pratt & Whitney continues to evaluate the impact of this powder metal issue on other engine models within its fleet, we do not currently believe there will be any significant financial impact with respect to these other engine models. The financial impact of the powder metal issue is based on historical experience and is subject to various assumptions and judgments, most notably, 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. While these

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assumptions reflect our best estimates at this time, they are subject to variability. Potential changes to these assumptions and actual incurred costs could significantly affect the estimates inherent in our financial statements and could have a material effect on the Company’s results of operations for the periods in which they are recognized.
Legal Proceedings. The Company and its subsidiaries are subject to various contract pricing disputes, government investigations, and litigation matters across jurisdictions, updates to certain of which are set forth below.
Cost Accounting Standards Claims
As previously disclosed, in April 2019, a Divisional Administrative Contracting Officer (DACO) of the United States DCMA asserted a claim against Pratt & Whitney to recover alleged overpayments of approximately $1.73 billion plus interest ($1.09 billion at March 31, 2024). The claim is based on Pratt & Whitney’s alleged noncompliance with Cost Accounting Standards (CAS) from January 1, 2007 to March 31, 2019, due to its method of allocating independent research and development costs to government contracts. Pratt & Whitney believes that the claim is without merit and filed an appeal to the ASBCA on June 7, 2019.
As previously disclosed, in December 2013, a DCMA DACO asserted a claim against Pratt & Whitney to recover alleged overpayments of approximately $177 million plus interest ($162 million at March 31, 2024). The claim is based on Pratt & Whitney’s alleged noncompliance with CAS from January 1, 2005 to December 31, 2012, due to its method of determining the cost of collaborator parts used in the calculation of material overhead costs for government contracts. In 2014, Pratt & Whitney filed an appeal to the ASBCA. An evidentiary hearing was held and completed in June 2019. On November 22, 2021, the ASBCA issued its written decision sustaining in part and denying in part Pratt & Whitney’s appeal. The ASBCA rejected the DCMA’s asserted measure of the cost of collaborator parts, and ruled substantially in Pratt & Whitney’s favor on other liability issues. The ASBCA remanded the appeal to the parties for resolution of damages issues, which could require further proceedings at the ASBCA. On December 23, 2021, the DCMA filed a motion with the ASBCA seeking partial reconsideration of the November 22, 2021 decision. The motion for reconsideration was denied on August 29, 2022. On December 23, 2022, the DCMA filed an appeal to the United States Court of Appeals for the Federal Circuit. We continue to believe that the ASBCA’s rejection of the DCMA’s asserted measure of the cost of collaborator parts is well supported in fact and law and likely will be sustained. In December 2018, a DCMA DACO issued a second claim against Pratt & Whitney that similarly alleges that its method of determining the cost of collaborator parts does not comply with the CAS for calendar years 2013 through 2017. This second claim, which asserts the same measure of the cost of collaborator parts rejected by the ASBCA’s November 22, 2021 decision, demands payment of $269 million plus interest ($131 million at March 31, 2024). Pratt & Whitney appealed this second claim to the ASBCA in January 2019. In December 2023, a DCMA DACO issued a third claim against Pratt & Whitney that similarly alleges that its method of determining the cost of collaborator parts does not comply with the CAS for calendar years 2018 through 2022. This third claim, which asserts the same measure of the cost of collaborator parts rejected by the ASBCA’s prior decision, demands payment of $277 million plus interest ($59 million at March 31, 2024). Pratt & Whitney appealed this third claim to the ASBCA at the end of December 2023. Although subject to further litigation at the ASBCA and potentially further appellate proceedings, we continue to believe that the November 22, 2021 decision in the first claim will apply with equal legal effect to the second and third claims. Accordingly, we believe that the amounts demanded by the DCMA as set forth in the three claims are without legal basis and that any damages owed to the U.S. government for the three claims will not have a material adverse effect on our results of operations, financial condition, or liquidity.
Thales-Raytheon Systems and Related Matters
As previously disclosed, in 2019, Raytheon Company received a subpoena from the Securities and Exchange Commission (SEC) seeking information in connection with an investigation into whether there were improper payments made by Raytheon Company, our joint venture known as Thales-Raytheon Systems (TRS), or anyone acting on their behalf, in connection with TRS or Raytheon Company contracts in certain Middle East countries since 2014. In the first quarter of 2020, the DOJ advised Raytheon Company it had opened a parallel criminal investigation. In the third quarter of 2020, Raytheon Company received an additional subpoena from the SEC, seeking information and documents as part of its ongoing investigation. The Company maintains a rigorous anti-corruption compliance program, and continues to cooperate fully with the SEC’s and DOJ’s inquiries, and to examine through our own investigation whether there were any improper payments or any such conduct that was in violation of Raytheon Company policy. Although the investigation of these issues remains ongoing, information indicating that such conduct has occurred with respect to certain contracts has been identified. However, at this time, the Company is unable to predict the outcome of the SEC’s or DOJ’s inquiries. Further, based on the information available to date, we cannot reasonably estimate the range of potential loss or impact to the business that may result, but do not believe that the results of these inquiries will have a material adverse effect on our results of operations, financial condition, or liquidity.

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DOJ Investigation and Contract Pricing Disputes
As previously disclosed, on October 8, 2020, the Company received a criminal subpoena from the DOJ seeking information and documents in connection with an investigation relating to financial accounting, internal controls over financial reporting, and cost reporting regarding Raytheon’s business since 2009. The investigation involves multi-year contracts subject to governmental regulation, including potential civil defective pricing claims for certain Raytheon contracts entered into between 2011 and 2013. As part of the same investigation, on March 24, 2021, the Company received a second criminal subpoena from the DOJ seeking documents relating to a certain Raytheon contract entered into in 2017. We are cooperating fully with, and will continue to review the issues raised by, the DOJ’s ongoing investigation. We continue to make substantial progress in our internal review of the issues raised by the DOJ investigation. Although we believe we have defenses to the potential claims, the Company has determined that there is a probable risk of liability for damages, interest, and potential penalties, and has accrued $306 million for this matter. We are currently unable to estimate an incremental loss, if any, which may result when the DOJ investigation is complete. Based on the information available to date, we do not believe the results of the DOJ investigation, or of any pending or potential civil litigation, will have a material adverse effect on our results of operations, financial condition, or liquidity.
UTC Equity Conversion Litigation
As previously disclosed, on December 6, 2022, a shareholder derivative lawsuit was filed in the Delaware Court of Chancery against the Company and certain current and former members of its Board of Directors, alleging that defendants breached their fiduciary duties in May 2020 by amending the method by which United Technologies Corporation (UTC) equity awards were converted to certain Company equity awards following the separation of UTC into three independent, publicly traded companies. We believe that the lawsuit lacks merit. Based on the information available to date, we do not believe that this matter will have a material adverse effect on our results of operations, financial condition, or liquidity.
Civil Litigation Related to Employee Hiring Practices
Pratt & Whitney is one of multiple defendants in a putative class action lawsuit pending in the United States District Court for the District of Connecticut alleging that Pratt & Whitney and the other defendants agreed to restrict the hiring and recruiting of certain engineers and skilled laborers in a manner that violated federal antitrust laws. Plaintiffs seek to represent different purported classes of engineers and skilled laborers employed by Pratt & Whitney and other supplier-defendants since 2011, and are seeking to recover treble damages in an undetermined amount, plus attorneys’ fees and costs of suit. We believe that the claims asserted lack merit. Based on the information available to date, we do not believe that this matter will have a material adverse effect on our results of operations, financial condition, or liquidity.
In April 2024, a shareholder derivative lawsuit was filed in the Delaware Court of Chancery against the Company and certain current and former officers and directors of the Company alleging that defendants breached their fiduciary duties by failing to implement and enforce a reasonable oversight mechanism for compliance with antitrust laws. We believe that the lawsuit lacks merit. Based on the information available to date, we do not believe that this matter will have a material adverse effect on our results of operations, financial condition, or liquidity.
Powder Metal Disclosure Litigation and SEC Investigation
Following the Company’s disclosures of a rare condition in powder metal used to manufacture certain Pratt & Whitney engine parts, two sets of civil actions were filed against RTX. First, two putative federal securities class action lawsuits were filed in the United States District Court for the District of Connecticut against the Company and certain current and former executives of the Company. The lawsuits allege that defendants violated federal securities laws by making material misstatements and omitting material facts relating to Pratt & Whitney’s Geared Turbofan engine fleet, including the impact of the powder metal issue on the fleet, in various regulatory filings. The lawsuits were consolidated and remain pending. Second, multiple shareholder derivative lawsuits were filed against current and former Officers and Directors of the Company, all of which have now been consolidated into a single action which is pending in the United States District Court for the District of Delaware. The operative complaint in the consolidated action alleges that the defendants caused the Company to make materially false and misleading statements relating to Pratt & Whitney’s Geared Turbofan engines, and failed to maintain an adequate system of oversight, disclosure controls and procedures, and internal controls over financial reporting. Based on the information available to date, we do not believe that either matter will have a material adverse effect on our results of operations, financial condition, or liquidity.
On November 7, 2023 and January 30, 2024, the Company received subpoenas from the SEC seeking engineering, operational, organizational, accounting, and financial documents in connection with an investigation relating to the Company’s disclosures in 2023 of issues arising from Pratt & Whitney’s use of powder metal in manufacturing various engine parts, its identification of certain risks associated with those manufacturing processes, and corrective actions identified by Pratt & Whitney to mitigate

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those risks. The Company is cooperating with the SEC and is responding to the subpoenas. At this time, we are unable to predict the timing or outcome of this SEC investigation.
Where appropriate, we have recorded loss contingency accruals for the above-referenced matters, and the amounts individually, or in the aggregate, are not material.
Other. As described in “Note 15: Guarantees,” we extend performance and operating cost guarantees beyond our normal warranty and service policies for extended periods on some of our products. We have accrued our estimate of the liability that may result under these guarantees and for service costs that are probable and can be reasonably estimated.
We also have other commitments and contingent liabilities related to legal proceedings, self-insurance programs, and matters arising out of the normal course of business. We accrue contingencies based upon a range of possible outcomes. If no amount within this range is a better estimate than any other, then we accrue the minimum amount.
In the ordinary course of business, the Company and its subsidiaries are also routinely defendants in, parties to, or otherwise subject to many pending and threatened legal actions, claims, disputes, and proceedings. These matters are often based on alleged violations of contract, product liability, warranty, regulatory, environmental, health and safety, employment, intellectual property, tax, and other laws. In some instances, claims for substantial monetary damages are asserted against the Company and its subsidiaries and could result in fines, penalties, compensatory or treble damages, or non-monetary relief. We do not believe that these matters will have a material adverse effect upon our results of operations, financial condition, or liquidity.
Note 17: Equity
Common Stock - Share Repurchases. On October 24, 2023, we entered into accelerated share repurchase (ASR) agreements with certain financial institution counterparties to repurchase shares of our common stock for an aggregate purchase price of $10 billion. Pursuant to the ASR agreements, we made aggregate payments of $10 billion on October 26, 2023, and received initial deliveries of approximately 108.4 million shares of our common stock at a price of $78.38 per share, representing approximately 85% of the shares expected to be repurchased. The aggregate purchase price was recorded as a reduction to Shareowners’ equity, consisting of a $8.5 billion increase in Treasury stock and a $1.5 billion decrease in Common stock.
The final number of shares to be repurchased will be based on the average of the daily volume-weighted average prices of our common stock during the term of the ASR agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreements. Upon final settlement of the ASR, under certain circumstances, each of the counterparties may be required to deliver additional shares of common stock, or we may be required to deliver shares of common stock or to make a cash payment to the counterparties, at our election. The final settlement of each transaction under the ASR agreements is scheduled to occur no later than the third quarter of 2024 and in each case may be accelerated at the option of the applicable counterparty.
Accumulated Other Comprehensive Loss. A summary of the changes in each component of Accumulated other comprehensive loss, net of tax for the quarters ended March 31, 2024 and 2023 is provided below:
(dollars in millions)Foreign Currency TranslationDefined Benefit Pension and Postretirement PlansUnrealized Hedging Gains (Losses)Accumulated Other Comprehensive Loss
Quarter Ended March 31, 2024
Balance at December 31, 2023$(440)$(2,026)$47 $(2,419)
Other comprehensive income (loss) before reclassifications, net(121)(7)(81)(209)
Amounts reclassified, pre-tax