RTX delivers strong 12% sales growth; Q1 book-to-bill of 1.34 with an RTX record backlog of $202B; Reaffirms full year outlook  ARLINGTON, Va., April 23, 2024 /PRNewswire/ -- RTX (NYSE:RTX) reported first quarter 2024 results. First quarter 2024 Sales of $19.3 billion, up 12 percent versus prior year on a reported and organic* basis GAAP EPS of $1.28, up 32 percent versus prior year, which included $0.29 of acquisition accounting adjustments and a $0.23 benefit from net significant and/or non-recurring items and restructuring Adjusted EPS* of $1.34, up 10 percent versus prior year Operating cash flow of $0.3 billion; Free cash outflow* of $0.1 billion Gross proceeds of $1.3 billion from the completion of the divestiture of Raytheon's Cybersecurity, Intelligence and Services business Company backlog of $202 billion; including $125 billion of commercial and $77 billion of defense Realized $105 million of incremental RTX gross cost synergies Reaffirms outlook for full year 2024 Sales of $78.0 - $79.0 billion Adjusted EPS* of $5.25 - $5.40 Free cash flow* of approximately $5.7 billion "RTX saw strong momentum in the first quarter, delivering 12 percent organic sales* growth and winning over $25 billion in new orders across our businesses," said RTX President and Chief Operating Officer Chris Calio. "We are making progress on our key priorities to deliver for customers and shareowners, including executing on our GTF fleet management plans, which remain on track." "We're operating in one of the strongest demand periods in our history with a record $202 billion backlog and a portfolio of products and services which are fully aligned to our customers' top priorities. Our focus on execution and driving performance and margin expansion is supported by our CORE operating system, and we continue to invest in operational modernization and production capacity, digital transformation and technological innovation to sustain our growth well into the future." First quarter 2024RTX reported first quarter sales of $19.3 billion, up 12 percent over the prior year. GAAP EPS of $1.28 was up 32 percent versus the prior year, and included $0.29 of acquisition accounting adjustments, a $0.21 benefit related to tax audit settlements, an $0.18 net gain related to the Cybersecurity, Intelligence and Services divestiture, a $0.13 charge associated with initiating alternative titanium sources, and $0.03 of restructuring and other net significant and/or non-recurring charges. Adjusted EPS* of $1.34 was up 10 percent versus the prior year. The company recorded net income attributable to common shareowners in the first quarter of $1.7 billion which included $389 million of acquisition accounting adjustments, a benefit of $285 million related to tax audit settlements, a net gain of $241 million related to the Cybersecurity, Intelligence and Services divestiture, a $175 million charge associated with initiating alternative titanium sources, and $44 million of restructuring and other net significant and/or non-recurring charges. Adjusted net income* of $1.8 billion was flat versus prior year as growth in adjusted segment operating profit* was more than offset by higher interest expense and lower pension income. Operating cash flow in the first quarter was $342 million. Capital expenditures were $467 million, resulting in a free cash outflow* of $125 million. Summary Financial Results – Operations Attributable to Common Shareowners 1st Quarter ($ in millions, except EPS) 2024 2023 % Change Reported Sales $    19,305 $    17,214 12 % Net Income $      1,709 $      1,426 20 % EPS $        1.28 $        0.97 32 % Adjusted* Sales $    19,305 $    17,214 12 % Net Income $      1,791 $      1,793 — % EPS $        1.34 $        1.22 10 % Operating Cash Flow $         342 $       (863) NM Free Cash Flow* $       (125) $    (1,383) NM NM = not meaningful Backlog and BookingsBacklog at the end of the first quarter was $202 billion, of which $125 billion was from commercial aerospace and $77 billion was from defense. Notable defense bookings during the quarter included: $1.6 billion of classified bookings at Raytheon $1.2 billion for Germany Patriot production at Raytheon $818 million for NATO GEM-T production at Raytheon $623 million for international GEM-T production at Raytheon $282 million for Ukraine NASAMS production at Raytheon $251 million for international GEM-T production at Raytheon Segment ResultsThe company's reportable segments are Collins Aerospace, Pratt & Whitney, and Raytheon. Collins Aerospace 1st Quarter ($ in millions) 2024 2023 % Change Reported Sales $   6,673 $   6,120 9 % Operating Profit $      849 $      897 (5) % ROS 12.7 % 14.7 % (200) bps Adjusted* Sales $   6,673 $   6,120 9 % Operating Profit $   1,048 $      903 16 % ROS 15.7 % 14.8 % 90 bps Collins Aerospace had first quarter 2024 reported sales of $6,673 million, up 9 percent versus the prior year. The increase in sales was driven by a 14 percent increase in both commercial aftermarket and commercial OE, and a 1 percent increase in defense. The increase in commercial sales was driven primarily by strong demand across commercial aerospace end markets, which resulted in higher flight hours and higher OE production rates. The increase in defense sales was driven primarily by higher volume. Collins Aerospace recorded operating profit of $849 million, down 5 percent versus the prior year. Reported operating profit included $175 million of charges related to unfavorable purchase commitments and an impairment charge as a result of initiating alternative titanium sources. On an adjusted basis, operating profit* of $1,048 million was up 16 percent versus the prior year. The increase in adjusted operating profit* was primarily driven by drop through on higher commercial aftermarket volume, partially offset by unfavorable OE mix, higher space program costs and increased R&D expense. Pratt & Whitney 1st Quarter ($ in millions) 2024 2023 % Change Reported Sales $   6,456 $   5,230 23 % Operating Profit $      412 $      415 (1) % ROS 6.4 % 7.9 % (150) bps Adjusted* Sales $   6,456 $   5,230 23 % Operating Profit $      430 $      434 (1) % ROS 6.7 % 8.3 % (160) bps Pratt & Whitney had first quarter 2024 reported sales of $6,456 million, up 23 percent versus the prior year. The increase in sales was driven by a 64 percent increase in commercial OE, a 21 percent increase in military, and a 9 percent increase in commercial aftermarket. The increase in commercial sales was primarily due to higher GTF OE volume and favorable mix, and higher aftermarket volume. The increase in military sales was driven by higher sustainment volume across multiple platforms and higher development volume driven primarily by the F135 Engine Core Upgrade program. Pratt & Whitney recorded operating profit of $412 million, down 1 percent versus the prior year. The benefit of favorable commercial OE mix and drop through on higher commercial aftermarket volume was partially offset by headwinds from increased commercial OE deliveries, unfavorable commercial aftermarket mix, and the absence of a favorable $60 million prior year contract matter. Higher military volume and favorable mix was more than offset by higher R&D and SG&A expenses. On an adjusted basis, operating profit* of $430 million was down 1 percent versus the prior year. Raytheon 1st Quarter ($ in millions) 2024 2023 % Change Reported Sales $   6,659 $   6,292 6 % Operating Profit $      996 $      571 74 % ROS 15.0 % 9.1 % 590 bps Adjusted* Sales $   6,659 $   6,292 6 % Operating Profit $      630 $      584 8 % ROS 9.5 % 9.3 % 20 bps Raytheon had first quarter 2024 reported sales of $6,659 million, up 6 percent versus prior year. The increase in sales was primarily driven by higher volume on land and air defense systems, including Global Patriot, counter-UAS systems and NASAMS, and advanced technology programs. Raytheon recorded operating profit of $996 million, up 74 percent versus the prior year. The increase in operating profit was driven primarily by higher volume and improved net productivity, partially offset by unfavorable mix. Reported operating profit included a $375 million net gain on the sale of the Cybersecurity, Intelligence, and Services business. On an adjusted basis, operating profit* of $630 million was up 8 percent versus the prior year. About RTXWith 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 First Quarter 2024 Financial ResultsRTX's financial results conference call will be held on Tuesday, April 23, 2024 at 8:30 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. *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") and free cash flow are non-GAAP financial measures. When we provide our expectation for 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. 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. 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 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 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), ...