10-K 0000101829-26-000006 (2026-02-06) vs 10-K 0000101829-25-000005 (2025-02-03)
| Section | Compared text | Words now | Changed |
|---|
| Risk Factors | Item 1A | 14,220 |
20.0% |
| MD&A | Item 7 | 17,959 |
31.2% |
| Legal Proceedings | Item 3 | 442 |
22.6% |
| Accounting Policies | Item 8, Note 1 – BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING PRINCIPLES | 8,210 |
19.9% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
MD&A 424 words changed in this paragraph; it is 50% similar to last year's version.
Legal Matters. As previously announced, in 2024 the Company resolved several outstanding legal matters, herein referred to as “Resolution of Certain Legal Matters.” The Company entered into a deferred prosecution agreement (DPA) (DPA-1) with the Department of Justice (DOJ) and the Company settled an administrative proceeding with the Securities and Exchange Commission (SEC) (the SEC Administrative Order) to resolve the previously disclosed criminal and civil government investigations into payments made by Raytheon Company and its joint venture, Thales-Raytheon Systems (TRS), in connection with certain Middle East contracts since 2012 (Thales-Raytheon Systems and Related Matters). The Company also entered into a DPA and a False Claims Act (FCA) settlement agreement with the DOJ to resolve previously disclosed criminal and civil government investigations into defective pricing claims for certain legacy Raytheon Company contracts entered into between 2011 and 2013 and in 2017 (DOJ Investigation and Contract Pricing Disputes). 2017. Under these DPAs and the SEC Administrative Order, Raytheon Company and the Company are required to retain, among other things, an independent compliance monitor satisfactory to the DOJ and the SEC (for a term ending three years from the date on which the monitor is engaged) and are required to undertake certain cooperation and disclosure obligations (for a term commencing on the effective date of DPA-1 and the SEC Administrative Order, as applicable, and ending three years from the date on which Raytheon Company and the monitor is engaged). The Company engage an independent compliance monitor will satisfactory to the DOJ and SEC). A single independent compliance monitor was selected to oversee Raytheon Company’s and the Company’s compliance with their respective obligations under the DPAs and the SEC Administrative Order. The DPAs further provide that, Order, and that monitor is expected to be in place by the event end of the DOJ, in its sole discretion, determines during the period of deferral of prosecution that Raytheon Company or first quarter. In 2024, the Company have violated any provision of either DPA, Raytheon Company or the Company may be subject to prosecution for any federal criminal violation, including the charges against Raytheon Company in the relevant DPA. The SEC Administrative Order further provides that, in the event of a breach of the SEC Administrative Order, the SEC may vacate the SEC Administrative Order and institute proceedings against the Company. In the event of any such determination or breach, the Company may face additional adverse impacts. In addition, the Company also resolved 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 that were resolved pursuant to a Consent Agreement (CA) with the U.S. Department of State (DOS) (Trade Compliance Matters). (DOS). The CA, which has a three-year term, requires the Company to implement remedial compliance measures and to conduct an external audit of the Company’s International Traffic in Arms Regulations (ITAR) ITAR compliance program. The CA also requires appointment of an external, independent Special Compliance Officer (SCO). The Company appointed its SCO on September 27, 2024. As a result of the DPAs, SEC Administrative Order, FCA settlement agreement and CA, we recorded a combined pre-tax charge of $918 million during the second quarter of 2024, which included $269 million related to the DOJ Investigation and Contract Pricing Disputes (in addition to amounts previously accrued), $364 million related to Thales-Raytheon Systems and Related Matters (in addition to amounts previously accrued), and $285 million related to Trade Compliance Matters. In the fourth quarter we made payments of $580 million related to the DOJ Investigation and Contract Pricing Dispute and $384 million related to Thales-Raytheon Systems and Related Matters. See “Note 17: Commitments and Contingencies” within Item 8 of this Form 10-K for additional information. further discussion of these and other government matters.
Source: Item 7, 10-K 0000101829-26-000006 vs Item 7, 10-K 0000101829-25-000005
Accounting Policies 283 words changed in this paragraph; it is 44% similar to last year's version.
Substantially all of our defense business revenue, which primarily relates to our Raytheon segment, and to a lesser extent Pratt & Whitney and Collins, is recognized over time because of the continuous transfer of control to our customers. For performance obligations satisfied over time, revenue is recognized on a percentage-of-completion basis generally using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which correspond with and best depict transfer of control to the customer. Contract costs can include labor, materials, subcontractors’ costs, or other direct costs and indirect costs. Our contracts with the U.S. government are typically subject to the Federal Acquisition Regulation (FAR) and are priced based on estimated or actual costs of producing goods or providing services. The FAR provides guidance on the types of costs that are allowable in establishing prices for goods and services provided under U.S. government contracts. The pricing for non-U.S. government contracts is based on the specific negotiations with each customer. Under the typical payment terms of our U.S. government fixed-price contracts, the customer pays us either performance-based payments (PBPs) or progress payments. PBPs are interim payments equal to a negotiated percentage of the contract price based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments up to 80-90% of costs incurred as the work progresses. Because the customer retains a portion of the contract price until completion of the contract, our U.S. government fixed-price contracts generally result in revenue recognized in excess of billings which we present as Contract assets on the Consolidated Balance Sheet. For our U.S. government cost-type contracts, the customer generally pays us for our costs incurred within a short period of time. For non-U.S. government contracts, we typically receive interim payments as work progresses, although for some contracts, we may be entitled to receive an advance payment. Such advances are not considered a significant financing component because they are used to meet working capital demands that can be higher in the early stages of a contract and to protect us from the other party failing to adequately complete some or all of its obligations under the contract. We recognize a liability for advance payments in excess of revenue recognized and present it as Contract liabilities on the Consolidated Balance Sheet.
Source: Item 8, Note 1 – BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING PRINCIPLES, 10-K 0000101829-26-000006 vs Item 8, Note 1 – BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING PRINCIPLES, 10-K 0000101829-25-000005
Risk Factors 231 words changed in this paragraph; it is 81% similar to last year's version.
We design, manufacture, and service products that incorporate advanced technologies; the introduction of new products and technologies involves risks, and we may not realize the degree or timing of benefits initially anticipated. The design, development, production, sale, and support of innovative commercial aerospace and defense systems and products involves advanced technologies. We invest substantial amounts in research and development efforts to pursue advancements in a wide range of technologies, products, and services aimed at meeting the ever-evolving product, program, and service needs of our customers. Our ability to realize the anticipated benefits of our investments depends on a variety of factors, including the competitiveness of our offerings’ performance relative to our peers; meeting development, production, certification, and regulatory approval schedules; receiving regulatory approvals; execution of internal and external performance plans; achieving cost and production efficiencies; availability and quality of supplier- and internally-produced parts and materials; availability of supplier and internal facility capacity to perform maintenance, repair, and overhaul services; availability of test equipment; development of complex software; hiring and training of qualified personnel; identification of emerging technological trends for our target end-customers; the level of customer interest in new technologies and products; requirements to provide disclosure and company intellectual property rights for certain government procurement programs; and customer acceptance of our products and technologies. For example we are investing in artificial intelligence, among other advanced technologies, and our business may be adversely affected if we are unable to successfully integrate the technology into our internal business processes and products and services in a timely, cost-effective, compliant, and responsible manner. The methods and processes we use to develop, deploy or otherwise use artificial intelligence systems may be found to not be in compliance with rapidly evolving regulatory standards thereby preventing or frustrating our use of the systems or creating liability for us. These methods and processes may further perform in unexpected ways or be misused, jeopardizing RTX’s intellectual property or potentially resulting in unexpected loss or misappropriation of intellectual property. Improper use of artificial intelligence could also lead to data breaches, undetected cyber-attacks, regulatory action, and reputational risks. In addition, our customers manufacture or acquire end products and systems that incorporate certain of our products. These end products and systems may also incorporate additional technologies manufactured by third parties and involve additional risks and uncertainties. As a result, the performance and industry acceptance of these larger systems and end products could affect the level of customer interest in, and acceptance of, our products in the marketplace. In addition, many of our products must adhere to strict regulatory and market-driven safety and performance standards in a variety of jurisdictions. The evolving nature of these standards, along with the long duration of development, production, and aftermarket support programs, creates uncertainty regarding program profitability, particularly with our aircraft engine products. Development efforts divert resources from other potential investments in our businesses, and these efforts may not lead to the development of new technologies or products on a timely basis or meet the needs of our customers as fully as alternative investments. In addition, the industries for our products or products that incorporate our technologies may not develop or grow as we anticipate. We, or our customers, suppliers, or subcontractors, may encounter difficulties in developing and producing new products and services, and may not realize the degree or timing of benefits initially anticipated or may otherwise suffer significant adverse financial consequences. Due to the design complexity of our products, or those of our customers or third party manufacturers that incorporate our products into theirs or our customers’ products, we may experience delays in completing the development and introduction of new products, or we may experience the suspension of production after these products enter into service due to safety concerns. Delays and/or suspension of production could result in increased development costs or deflect resources from other projects. If we fail in our development projects or if our new products or technologies fail to achieve customer acceptance or competitors develop more capable technologies or offerings, we may be unsuccessful in obtaining new contracts or winning all or a portion of next generation programs, including in key areas such as advanced sensing solutions, next-generation aircraft engine technologies, advanced avionics solutions and hypersonics. Any of the foregoing could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.
Source: Item 1A, 10-K 0000101829-26-000006 vs Item 1A, 10-K 0000101829-25-000005
Legal Proceedings 85 words changed in this paragraph; it is 63% similar to last year's version.
Multiple lawsuits have been were filed in U.S. courts relating to the October 29, 2018 Lion Air Flight 610 and the March 10, 2019 Ethiopian Airlines Flight 302 accidents. Collins Aerospace (Collins) sold certain aircraft parts and systems to The Boeing Company for the 737 MAX aircraft involved in these accidents. Certain of our Collins businesses have been were named, along with other third parties, as parties in many of these lawsuits. We have also fully supported all governmental investigations and inquiries relating All lawsuits related to the accidents. We do not expect that Lion Air flight have been resolved, and the lawsuits Collins businesses have obtained a full release. Only one lawsuit related to the Ethiopian Airlines flight remains pending, and we anticipate during 2026 the lawsuit will either be resolved or governmental investigations or inquiries the claims against the Collins businesses will have a material adverse effect on our results of operations, financial condition, or liquidity. be dismissed.
Source: Item 3, 10-K 0000101829-26-000006 vs Item 3, 10-K 0000101829-25-000005
Every change, by type
Sentences and paragraphs of RTX's Risk Factors and MD&A, 10-K 2026-02-06 against 10-K 2025-02-03.
Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
Our profitability could be negatively affected based on the mix of our U.S. government contracts and programs and the costs incurred of performing the work, especially if we are unable to control costs or if our initial cost estimates are incorrect, particularly under fixed-price development contracts. Our U.S. government contracts are typically either fixed-priced contracts or cost reimbursement contracts. Fixed-price contracts are predominantly either firm fixed-price (FFP) contracts or fixed-price
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedRisk Factors
We continue to closely monitor potential impacts to RTX’s business, customers, suppliers, employees, and operations in Israel, the Middle East, and the region at large due to continued regional instability and tensions.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedRisk Factors
As a U.S. government contractor, we are subject to risks relating to U.S. government audits, investigations, and disputes. We are subject to U.S. government investigations relating to our U.S. government contracts. Such U.S. government investigations
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedRisk Factors
We may be unable to realize expected benefits from strategic initiatives. In order to operate more effectively and efficiently, from time to time we undertake strategic and other operational initiatives. For example, we are undergoing significant, multi-
Read it in 10-K 2026-02-06 at sec.gov ↗
RemovedRisk Factors
Our business may be adversely affected by changes in global economic, capital market, and political conditions. Our business, operating results, financial condition, and liquidity may be adversely affected by changes in global economic conditions, international relations, and geopolitical events and actions, including inflation, credit market conditions, levels of consumer and business confidence, commodity (including energy) prices and supply, trade policies (including tariffs), exchange rates, levels of government spending and deficits, the threat environment, political conditions, and actual or anticipated default on sovereign debt. Supply chain challenges and inflationary pressures continue to negatively affect our performance and the performance of our suppliers and subcontractors. Inflation has increased material and component prices, labor rates, and supplier costs. In addition, due to the nature of our government and commercial aerospace businesses, and their respective customer and supplier contracts, we may be unable to increase our contract value or pricing to offset cost increases, in particular on our fixed price contracts. Our operating profits and margins under our contracts could be adversely affected by these factors. In addition, high interest rates can increase the cost of borrowing and tighten the availability of capital for the Company, which could have an adverse effect on our operating results, financial condition, and liquidity. Tightening of credit in financial markets also could adversely affect the ability of our customers and suppliers to obtain financing for significant purchases and operations, could result in a decrease in, or cancellation of, orders for our products and services, could impact the ability of our customers to make payments, and could increase the risk of supplier financial distress. Moreover, volatility in interest rates and financial markets can lead to economic uncertainty, an economic downturn or recession and impact the demand for our products and services as well as impact our supply chain. Our global business is also adversely affected by decreases in the general level of economic activity, such as decreases in business and consumer spending, air travel, the financial strength and performance of airframers, airlines and business jet operators, and government procurement. In addition, geopolitical risks could affect government priorities, budgets, and policies, such as U.S. approvals of our foreign defense sales as well as sanctions, imposition of tariffs, and other trade-restrictive activities, which could impact sales of defense and other products and services.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedRisk Factors
negotiations on the terms, specifications, or price between the parties. The U.S. government has the ability to unilaterally definitize contracts, which would obligate us to perform under terms and conditions imposed by the U.S. government, affecting our ability to negotiate mutually agreeable contract terms. Uncertainties in final contract price, specifications and terms, or loss of negotiating leverage associated with particularly long delays in contract definitization may negatively affect our profitability. Our U.S. government contracts also require us to comply with extensive and evolving procurement laws, rules and regulations and subject us to potential U.S. government surveillance, audits, investigations, and disputes. We are also involved in programs that are classified by the U.S. government, which have security requirements that place limits on our ability to discuss our performance on these programs, including any risks, disputes, and claims.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedRisk Factors
We continue to closely monitor potential impacts to RTX’s business, customers, suppliers, employees, and operations in Israel, the Middle East, and the region at large due to the war in Gaza, including a recently-announced ceasefire, the related escalation of conflict and instability in the region, and the regime change in Syria. RTX’s commercial manufacturing facilities in Israel remain open and operational and have continued exporting products and importing critical items and raw materials. RTX’s defense programs’ ability to receive components from Israel has not been impacted in any material respect, although we could experience future delivery delays of certain products if the ceasefire does not hold, or if further escalations arise. The overall impacts to RTX from this situation have been minimal; however, given the volatile nature of the situation, the potential impacts to RTX are subject to change.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedRisk Factors
Our business and financial performance may be adversely affected by cyber-attacks on information technology (IT) infrastructure and products, as well as changes in cybersecurity regulations. Our business may be impacted by disruptions to our own or third-party IT infrastructure, and the products and services that we provide our customers are also at risk of being adversely affected by cyber-attacks. Like other companies, we regularly experience cyber-based attacks. Cybersecurity threats are continuously evolving and may have an impact on our customers, suppliers, subcontractors, and other third parties with whom we do business routinely, both on premises and in the cloud, attempting to gain unauthorized access to our confidential, proprietary, or otherwise protected information, classified information, or personal data or other information relating to our employees, customers, and other third parties, or to disrupt our systems or the systems of third parties. Cybersecurity threats also include attacks targeting the security, confidentiality, integrity, and/or availability of the hardware, software, and information installed, stored, or transmitted in our products, including after the purchase of those products and when they are
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedRisk Factors
Moreover, we believe that a critical element of our ability to successfully attract, train, and retain qualified personnel is our corporate culture, which we believe fosters innovation, collaboration, and a focus on execution, all in an environment of high ethical standards. Our global operations may present challenges in maintaining these important aspects of our corporate culture, and a failure to maintain our corporate culture could negatively impact us. Further, we rely on our key personnel to lead with integrity and to meet our high ethical standards that promote excellent performance. To the extent any of our key personnel were to behave in a way that is inconsistent with our values, including with respect to product safety or quality, legal or regulatory compliance, financial reporting, or people management, we could experience a materially adverse impact to our reputation and our operating results. In addition, failure or perceived failure to meet stakeholder expectations on environmental, social, and governance (ESG) matters could harm our reputation and impact demand for our products and services.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedRisk Factors
As a U.S. government contractor, we are subject to risks relating to U.S. government audits, investigations, and disputes. We are subject to U.S. government investigations relating to our U.S. government contracts. Such U.S. government investigations often take years to complete and could result in administrative, civil, or criminal liabilities, including repayments, fines, treble and other damages, forfeitures, restitution, or penalties, or could lead to suspension or debarment of U.S. government contracting or of export privileges. For instance, if we or one of our business units were charged with wrongdoing in connection with a U.S. government investigation (including fraud, or violation of certain environmental, FCPA, and other anti-bribery and
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedRisk Factors
If either distribution of the stock of Carrier or Otis, together with certain related transactions, were to fail to qualify as a transaction that is generally tax-free, including as a result of subsequent acquisitions of our stock (including pursuant to the Raytheon merger), we could be subject to significant tax liabilities. On April 3, 2020, United Technologies Corporation (UTC) completed the separation of UTC’s business into three independent, publicly traded companies (UTC, Carrier Global Corporation (Carrier) and Otis Worldwide Corporation (Otis)) (the Separation Transactions). UTC distributed all of the outstanding shares of Carrier common stock and all of the outstanding shares of Otis common stock to UTC shareowners who held shares of UTC common stock as of the close of business on March 19, 2020, the record date for the distributions (the Distributions) effective at 12:01 a.m., Eastern Time, on April 3, 2020. We received (1) a private letter ruling from the Internal Revenue Service (IRS) regarding certain U.S. federal income tax matters relating to the Separation Transactions and Distributions and (2) an opinion of outside counsel regarding the qualification of certain elements of the Distributions under Section 355 of the Code. Although we intend for the Distributions generally to be tax-free for U.S. federal income tax purposes, there can be no assurance that they will so qualify. Even if the Distributions were to otherwise qualify as tax-free transactions under Sections 355 and 368(a)(1)(D) of the Code, either Distribution or both Distributions may result in taxable gain to us (but not our stockholders) under Section 355(e) of the Code if such Distribution(s) were deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, shares representing a 50% or greater interest (by vote or value) in shares of Carrier, Otis, or us, as applicable. If the IRS were to determine that any post-Distribution acquisitions of Carrier stock, Otis stock, or our stock, as applicable, pursuant to such a plan (when aggregated with any pre-Distribution acquisitions of Carrier stock, Otis stock, or our stock, as applicable, pursuant to such a plan) would represent a 50% or greater interest in shares of Carrier, Otis, or us, as applicable, such determination could result in significant tax liabilities to us. For purposes of this test, even if the Raytheon merger were treated as part of such plan, it did not result in an acquisition of a 50% or greater interest in us. Any such tax liabilities imposed on us may adversely affect an investment in us. In addition, we obtained tax rulings in certain non-U.S. jurisdictions and/or opinions of external tax advisors, in each case, regarding the tax treatment of certain Separation Transactions. Notwithstanding the receipt of such tax rulings and opinions, there can be no assurance that the relevant taxing authorities will not assert that the tax treatment of the relevant Separation
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedRisk Factors
Transactions differs from the conclusions reached therein. In the event the relevant taxing authorities prevail with any challenge in respect of any relevant Separation Transaction, we would be subject to significant tax liabilities, which may adversely affect an investment in us. Further, under a tax matters agreement that we entered into with Carrier and Otis in connection with the Separation Transactions and Distributions, each of Carrier and Otis generally is required to indemnify us for certain taxes we may incur resulting from the Separation Transactions and/or the Distributions failing to qualify for the intended tax treatment. In addition, under the tax matters agreement, each of Carrier and Otis is responsible for (i) a specified portion of any installment payment we are required to make pursuant to Section 965(h)(2) of the Code and (ii) specified taxes that exclusively relate to the Carrier business or the Otis business, as applicable. The amount of any such taxes for which we would be responsible may be significant, and if we were unable to obtain indemnification payments from Carrier or Otis to which we are entitled under the tax matters agreement and/or other agreements entered into in connection with the Separation Transactions and the Distributions, we would incur significant losses.
Read it in 10-K 2025-02-03 at sec.gov ↗
RewordedRisk Factors
Under DPA-1, DPA-2, and the SEC Administrative Order, Raytheon Company and the Company are required to retain an independent compliance monitor satisfactory to the DOJ and the SEC (for a term ending three years from the date on which the monitor is engaged) and are required to undertake certain cooperation and disclosure obligations (for a term commencing on the effective date of DPA-1 and the SEC Administrative Order, as applicable, and ending three years from the date on which Raytheon Company and the Company engage an independent compliance monitor is engaged). satisfactory to the DOJ and SEC).
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
We have been subject to regulatory investigations for alleged violations of anti-bribery and anti-corruption laws, and could be subject to such investigations in the future, which could result in criminal and civil penalties, disgorgement, further changes or enhancements to our procedures, policies and controls, personnel changes, or other remedial actions.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
The A single independent compliance monitor will was selected to oversee Raytheon Company’s and the Company’s compliance with their respective obligations under DPA-1, DPA-2, and the SEC’s SEC Administrative Order. Order, and that monitor is expected to be in place by the end of the first quarter.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
Additionally, some customers, including the DoD, DoW, are increasingly turning to commercial contractors, rather than traditional defense contractors, for space and data science work, and we are also seeing increased activity from other non-traditional defense contractors contractors, and startups.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
These include shifting significant cash flow from operations to debt principal and interest payments, which will reduce funds we have available for other purposes, such as acquisitions, research and development, and other reinvestments in our businesses, and dividends and common stock repurchases.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
While these factors and their impact are difficult to predict, any one or more of them could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
In addition to ongoing examinations, there could be additional examinations launched in the future by governmental authorities in various jurisdictions, and existing examinations could be expanded.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
Development efforts divert resources from other potential investments in our businesses, and these efforts may not lead to the development of new technologies or products on a timely basis or meet the needs of our customers as fully as alternative investments.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
In addition, in order to support U.S. government priorities, we may begin performance on an undefinitized contract action with a not-to-exceed price before completing contract negotiations on the terms, specifications, or price between the parties.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
For example, an increase in the use of contract structures that shift risk to the contractor (such as fixed-price development contracts and incentive-based fee arrangements), use of novel award fee criteria (such as the evaluation of environmental factors), criteria, evaluation of a bidder’s willingness to provide detailed competitively sensitive intellectual property (such as detailed RTX design, manufacturing and process information that would risk loss of competitively sensitive information), or requirements to transfer technology to domestic sources in connection with offset obligations, could adversely affect our profit rates, ability to preserve differentiated product offerings, maintain lower tier suppliers, or make it more difficult to win new contracts.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
In recent years, global Global supply chain disruptions have impacted our ability to procure raw materials, including certain rare earth elements, microelectronics, and certain commodities.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedRisk Factors
Current geopolitical conditions, including conflicts and other causes of strained intercountry relations, as well as sanctions and other trade restrictive activities, have contributed such as tariffs and export controls, are contributing to these issues.
Read it in 10-K 2026-02-06 at sec.gov ↗
Quiet changesRisk Factors
We use hazardous substances and generate hazardous wastes in certain of our operations.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
The global trade environment is highly dynamic. Since February 2025, the U.S. government has imposed tariffs on imports from all countries with which the U.S. engages in trade. In response, certain countries have announced, and in some cases imposed, tariffs, and non-tariff countermeasures on goods that are imported from the U.S. Our businesses and suppliers import goods subject to U.S. imposed tariffs, as well as goods subject to counter tariffs imposed by other countries. We continue to pursue available options to mitigate the impact of tariffs and countermeasures, including (i) utilizing available exemptions or exclusions to tariffs, such as trade agreements, treaties or other statutory relief, (ii) evaluating operational and supply chain changes, and (iii) where feasible, increasing the prices of our goods and services. Our results for 2025 reflect our best estimate of the impact of the tariffs then in effect. As the duration, extent and enforceability of the tariffs and counter tariffs remain uncertain, we are continuing to evaluate the potential future impacts of the imposition of the announced tariffs to our business and financial condition. Based on current conditions, we do not believe that the tariffs announced by the U.S. or counter tariffs or other actions taken by other countries will have a material adverse effect upon our results of operations, financial condition, or cash flows. However, the actual financial impacts of tariffs are dependent upon various factors, most notably, the scope of goods covered by tariffs, the value of our imports subject to tariffs, the rate of tariffs applied, the timing and duration of tariffs, the enforceability of tariffs and counter-tariffs, the implementation of tariff and non-tariff countermeasures by countries subject to U.S. tariffs, and our and our suppliers’ ability to mitigate the impacts of tariffs. Changes in any of these factors and actual tariff costs incurred could significantly affect the estimates inherent in our financial statements, including those used in our estimates-at-completion (EACs), and estimates supporting the recoverability of our inventories, contract fulfillment costs, deferred tax assets, intangible assets and goodwill, and could have a material effect on our results of operations and cash flows in the periods recognized and paid.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
U.S. Government’s Budget, Tax Legislation and Executive Orders. On February 3, 2026, Congress passed and the President signed a spending package to end a U.S. government shutdown. The spending package funds the government through the end of the government’s fiscal year, with the exception of the Department of Homeland Security, which remains subject to a continuing resolution.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
On July 4, 2025, “An Act to Provide for Reconciliation Pursuant to Title II of the H. Con. Res. 14” (the Act) was enacted. The Act provides for several corporate tax changes including, but not limited to, restoring full expensing of domestic research and
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
development costs, restoring immediate deductibility of certain capital expenditures, and changes in the computations of U.S. taxation on international earnings. See “Note 12: Income Taxes,” within Item 8 of this Form 10-K, for additional information.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
The Act also provides a supplementary $156.2 billion to the DoW for obligations through 2029, which includes $24.4 billion for the Golden Dome for America project. The project, outlined in a January 27, 2025 Executive Order, calls for the development and deployment of a next-generation missile defense shield. On May 20, 2025, the DoW announced a draft architecture and implementation plan for the system. With next generation technologies across land, sea and space that build upon existing, proven defense capabilities, RTX’s portfolio is well-positioned to play a role in delivering reliable solutions for the Golden Dome for America initiative. Whether this Executive Order or corresponding funding will have a material impact on our business or results of operations will depend on a variety of factors, including actual awards, award timelines, mission priorities, and future budget determinations. The Act also includes $25.4 billion in funding to enhance DoW resources for munitions and supply chain resiliency. As a leading munitions manufacturer, RTX is strategically situated to play a key role in supporting this initiative.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
The President has also issued multiple executive orders, including one intended to reform the DoW’s defense acquisition processes and promote expedited and streamlined acquisitions. Following issuance of those orders, the Secretary of War issued a memorandum and released the DoW’s Acquisition Transformation Strategy, which is aligned with the executive orders and seeks to overhaul the existing defense acquisition system through process changes that prioritize speed, flexibility, and rigorous execution. A subsequent executive order was issued that may limit corporate distributions, share repurchases, and executive compensation incentives during periods of defense contractor underperformance, insufficient prioritization, investment or production speed under their U.S. Government contracts. We are monitoring how these executive orders and related actions will be implemented and any potential future impacts to our business. While those impacts are uncertain, a limitation on our ability to issue distributions or engage in share repurchases related to the defense contractor performance executive order could adversely affect the market price of our common stock.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
We continue to closely monitor potential impacts to RTX’s business, customers, suppliers, employees, and operations in Israel, the Middle East, and the region at large due to continued regional instability and tensions.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
Selling, general, and administrative expenses increased $0.3 billion in 2025 compared to 2024, primarily driven by higher employee-related costs and higher restructuring costs related to ongoing cost reduction efforts driven by various workforce reductions initiated in 2025 at Collins.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
related to the Raytheon Contract Termination, and the $0.3 billion change in our FAS/CAS operating adjustment which is described below in “Segment Review.”
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
Although the 2025 and 2024 effective tax rates are the same, the 2025 effective rate reflects a lower U.S. tax benefit associated with Foreign Derived Intangible Income resulting from the Act. Both periods include tax benefits associated with certain legal entity reorganizations and the tax effects of dispositions.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
The $3.4 billion increase in cash flows provided by operating activities in 2025 compared to 2024 was primarily driven by higher net income after adjustments to reconcile to net cash provided by operating activities driven by our segment performance, an increase in accounts payable and accrued liabilities due to the timing of collaborator payables, and the benefit of lower inventory growth. These increases were partially offset by an increase in accounts receivable due to higher volume and timing of collections.
Read it in 10-K 2026-02-06 at sec.gov ↗
AddedMD&A
(dollars in millions; shares in thousands) 2025 2024 2023 $ Shares $ Shares $ Shares Shares of common stock repurchased (1) $ 50 396 $ 186 1,781 $ 12,870 141,696 ASR Tranche 1 settlement - shares received (2) — — — 391 — — ASR Tranche 2 settlement - financing cash paid (2) (3) — — 258 — — — Total shares of common stock repurchased $ 50 396 $ 444 2,172 $ 12,870 141,696
Read it in 10-K 2026-02-06 at sec.gov ↗
RemovedMD&A
technology programs, and we apply our Customer Oriented Results and Excellence (CORE) operating platform to the execution of these initiatives. However, the impact of these pressures and corresponding initiatives is uncertain and subject to a range of factors and future developments.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
U.S. Government’s Budget. Since the end of its fiscal year 2024, the U.S. government has been operating under two continuing resolutions, the most recent of which was signed on December 21, 2024, to keep the government funded through March 14, 2025 while Congress works to enact full year fiscal year 2025 (FY25) appropriation bills. Under a continuing resolution, federal agencies continue to operate generally at the same funding levels as the prior year, but typically new spending initiatives cannot be executed during this period. It is currently uncertain whether Congress will be able to enact FY25 appropriations bills and, if such bills are passed, the spending levels and priorities for defense and other areas. If Congress is unable to complete the FY25 appropriation bills (or pass another continuing resolution) by March 14, 2025, then the U.S. government would shut down, during which time federal agencies would cease all non-essential functions. In the event of a U.S. government shutdown, our business, program performance and results of operations could be impacted by the resulting disruptions to federal government offices, workers, and operations, including risks relating to the funding of certain programs, stop work orders, delays in contract awards, new program starts, payments for work performed, and other actions. We also may experience similar impacts in the event of an extended period of continuing resolutions. Generally, the significance of these impacts will primarily be based on the length of the shutdown or continuing resolution. Furthermore, under the Fiscal Responsibility Act of 2023, which imposes limits on discretionary spending for defense and non-defense programs in exchange for the lifting of the debt ceiling in June 2023, if Congress fails to enact appropriation bills by April 30, 2025, budget caps will be reduced and corresponding automatic reductions to agency budget accounts will be enforced through sequestration.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
We continue to closely monitor potential impacts to RTX’s business, customers, suppliers, employees, and operations in Israel, the Middle East, and the region at large due to the war in Gaza, including a recently-announced ceasefire, the related escalation of conflict and instability in the region, and the regime change in Syria. RTX’s commercial manufacturing facilities in Israel remain open and operational and have continued exporting products and importing critical items and raw materials. RTX’s defense programs’ ability to receive components from Israel has not been impacted in any material respect, although we could experience future delivery delays of certain products if the ceasefire does not hold, or if further escalations arise. The overall impacts to RTX from this situation have been minimal; however, given the volatile nature of the situation, the potential impacts to RTX are subject to change.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
On February 1, 2025, President Trump issued three executive orders directing the United States to impose new tariffs on imports from Canada, Mexico, and China, to take effect on February 4, 2025, and on February 3, 2025, President Trump announced his intention to pause tariffs on Canada and Mexico for the next month. The tariffs impose an additional 25% ad valorem rate of duty on all imports from Canada and Mexico (other than imports of Canadian energy resources exports, which are subject to a 10% ad valorem rate of duty) and an additional 10% ad valorem rate of duty on all imports from China. We are currently evaluating the potential impact of the imposition of the announced tariffs to our business and financial condition. RTX also exports products to Canada, Mexico and China and we are currently monitoring the potential impact, if any, of actions taken in response to these tariffs by Canada, Mexico and China. On January 28, 2025, RTX announced its full-year 2025 financial outlook, and that outlook does not reflect the impact of tariffs on imports from Canada, Mexico and China announced pursuant to the February 1, 2025 executive orders. While we do not believe that the tariffs announced by the United States on February 1, 2025 will have a material adverse effect upon our results of operations, financial condition, or liquidity, there may be an impact to our previously issued outlook. The actual impact of the new tariffs is subject to a number of factors including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
Other income (expense), net in 2023 was relatively consistent with 2022, as the net unfavorable year-over-year impact of foreign exchange gains and losses of $0.1 billion, was more than offset by the absence of $0.1 billion of charges associated with the disposition of three businesses in 2022 and a $0.1 billion gain on sale of land during the first quarter of 2023. The remaining decrease was spread across individually less significant items.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
The change in Non-service pension income of $0.1 billion in 2023 compared to 2022 was primarily driven by an increase in interest rates during 2022 and prior years’ pension asset returns performing below our expected return on plan assets (EROA) assumption, partially offset by an increase in our 2023 EROA assumption.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
Interest expense, net increased $0.2 billion in 2023 compared to 2022. The increase in Interest expense of $0.4 billion was primarily due to the long-term debt issuances in the first and the fourth quarters of 2023, interest and fees on short-term loans related to an accelerated share repurchase (ASR), and the increase in commercial paper activity in 2023. The change in Other non-operating expense (income) of $0.1 billion was primarily driven by a change in the mark-to-market fair value of marketable securities held in trusts associated with certain of our nonqualified deferred compensation and employee benefit plans and an increase in dividend income.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
The items above are partially offset by a $275 million tax benefit resulting from the conclusion of the examination phases of the U.S. federal income tax audits for RTX 2017 and 2018 tax years and Rockwell Collins 2016, 2017, and 2018 tax years, as well as, a $138 million deferred tax benefit associated with legal entity reorganizations.
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
Net income from continuing operations attributable to common shareowners for 2024 includes the following:
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
Net income from continuing operations attributable to common shareowners for 2023 includes the following:
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
Net income from continuing operations attributable to common shareowners for 2022 includes the following:
Read it in 10-K 2025-02-03 at sec.gov ↗
RemovedMD&A
The changes in Net income attributable to common shareowners and diluted EPS from operations for 2024 compared to 2023 and for 2023 compared to 2022 were driven by the changes in continuing operations, as discussed above.
Read it in 10-K 2025-02-03 at sec.gov ↗
RewordedMD&A
This was The increase in Other income (expense), net in 2025 compared to 2024 also benefited from the absence of a $0.9 billion charge related to the Resolution of Certain Legal Matters in 2024, partially offset by the absence of a prior year benefit of $0.4 billion gain on the sale of Raytheon’s the CIS business in the first quarter net of 2024, transaction and other related costs, a $0.2 billion benefit from a tax related indemnity receivable recorded in the third quarter of 2024, receivable, a $0.1 billion gain on the sale of Collins’ Collin’s Goodrich Hoist & Winch business in the fourth quarter of 2024, business, and an insurance recovery at Pratt & Whitney of approximately $0.1 billion in the fourth quarter of 2024. billion.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
The $1.3 $1.2 billion decrease in net sales related to Acquisitions and divestitures, net in 2024 compared to 2023, 2025 was primarily driven by the sale of the actuation and flight control business within our Collins segment completed in the third quarter of 2025, the sale of the Simmonds Precision Products business within our Collins segment completed in the fourth quarter of 2025, the sale of the Cybersecurity, Intelligence and Services (CIS) business within our Raytheon segment completed in the first quarter of 2024, and the sale of the Goodrich Hoist & Winch business within our Collins segment completed in the fourth quarter of 2024.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
Date Description of Notes Aggregate Principal Balance (in millions) December 24, 2024 17, 2025 3 Month Secured Overnight Financing Rate (SOFR) SOFR plus 1.225% Term Loan due 2026 $ 1,100 August 18, 2025 $ 500 December 15, 2024 3.150% 3.950% notes due 2024 300 2025 1,500 May 7, 2024 2025 3 Month SOFR plus 1.225% term loan due 2025 250 April 17, 2024 3 Month SOFR plus 1.225% term loan due 2025 250 April 4, 2024 3 Month SOFR plus 1.225% term loan due 2025 250 March 15, 2024 3.200% notes due 2024 950 750
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
The decrease in Other operating profit of $0.3 billion in 2024 compared to 2023 was primarily increase is also driven by the absence of $0.2 billion of charges recorded in the first quarter of 2024, 2024 related to the recognition of unfavorable purchase commitments and an impairment of contract fulfillment costs that are no longer recoverable as a result of initiating alternative titanium sources, and the absence of a $0.2 billion charge related to the impairment of contract fulfillment costs in the fourth quarter of 2024 due to a contract cancellation, and the absence of net favorable customer settlements recorded cancellation recognized in 2023. 2024.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
Under these DPAs and the SEC Administrative Order, Raytheon Company and the Company are required to retain, among other things, an independent compliance monitor satisfactory to the DOJ and the SEC (for a term ending three years from the date on which the monitor is engaged) and are required to undertake certain cooperation and disclosure obligations (for a term commencing on the effective date of DPA-1 and the SEC Administrative Order, as applicable, and ending three years from the date on which Raytheon Company and the Company engage an independent compliance monitor is engaged). satisfactory to the DOJ and SEC).
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
In addition, the increase The decrease in Other cost of sales includes of $0.6 billion in 2025 was primarily driven by the absence of charges recorded in 2024, including a $0.5 billion charge recorded in the second quarter of 2024 at Raytheon related to the termination of a fixed price development contract with a foreign customer, herein customer (herein referred to as “Raytheon Contract Termination,” in the second quarter of 2024, Termination”) and $0.2 billion of charges recorded in the first quarter of 2024 at Collins related to the recognition of unfavorable purchase commitments and an impairment of contract fulfillment costs that are were no longer recoverable as a result of initiating alternative titanium sources.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
Net products sales decreased $1.2 increased $10.0 billion in 2023 2024 compared to 2022, 2023, primarily driven by a $3.8 billion decrease at Pratt & Whitney due to a the absence of the net sales charge of $5.3 billion associated with the Powder Metal Matter, partially offset by and increases in external product sales of $2.1 $2.4 billion at Collins Pratt & Whitney, $1.2 billion at Collins, and $0.6 $1.0 billion at Raytheon.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
The decrease in net sales and operating profit due to acquisitions / divestitures, Acquisitions/Divestitures, net in 2024 from 2025 compared to 2023 2024 primarily relates to the sale of the CIS actuation and flight control business completed in 2025, the first quarter sale of Simmonds Precision Products completed in 2025, and the sale of the Goodrich Hoist & Winch business completed in 2024.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
The change in corporate expenses and other unallocated items of $0.7 billion in 2024 compared to 2023 was primarily due to a $0.9 billion charge related to the Resolution of Certain Legal Matters recorded in the second quarter of 2024, partially offset by a $0.2 billion benefit from a tax related indemnity receivable recorded in the third quarter of 2024.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
In addition, the increase in Operating profit was driven by the increased operating performance of our segments of approximately $1.5 billion, a $0.4 billion gain on sale of the CIS business recorded in the first quarter of 2024, and a $0.2 billion benefit from a tax related indemnity receivable recorded in the third quarter of 2024.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
The organic operating profit increase of $0.6 $0.4 billion in 2024 2025 compared to 2023 2024 reflects higher commercial aerospace operating profit of $0.4 $0.5 billion driven by favorable mix on and higher large commercial OEM volume which was partially offset by higher OEM production costs. military operating profit of $0.2 billion.
Read it in 10-K 2026-02-06 at sec.gov ↗
RewordedMD&A
The Also contributing to the organic net sales increase of $4.4 billion in 2024 compared to 2023 primarily reflects was higher commercial OEM sales of $1.7 $0.9 billion primarily driven by favorable mix on higher volume and higher commercial aftermarket sales of $1.6 billion primarily driven by higher volume.
Read it in 10-K 2026-02-06 at sec.gov ↗
Quiet changesMD&A
Additionally, the organic change in Cost of sales and Operating profit excludes restructuring costs, the FAS/CAS operating adjustment, and costs related to certain acquisition accounting adjustments.
Read it in 10-K 2026-02-06 at sec.gov ↗
