Summary of RTX FY Conference Call - November 13, 2025 Company Overview - **Company**: RTX (NYSE:RTX) - **Segments**: - Pratt & Whitney - Collins Aerospace - Raytheon Key Financial Performance - **Q3 Performance**: - 13% top-line organic sales growth - Aftermarket sales up 18% - Defense and Original Equipment (OE) sales up 10% each - **Free Cash Flow**: - $4 billion in Q3, on track for $7-$7.5 billion for the full year - **Sales Guidance**: - Expected sales between $86.5 billion and $87 billion - Adjusted earnings per share projected at $6.10-$6.20 [4][5][6] Demand and Backlog - **Backlog**: - $251 billion, not including significant defense demand - **Government Reopening**: - Positive impact on fourth-quarter performance, reducing risks associated with government shutdowns [8][10] Defense Sector Insights - **Defense Growth**: - 10% growth in defense segment in Q4 - Strong demand for munitions and defense systems, particularly in the U.S. and Europe - **Investment in Capacity**: - $300 million investment in Raytheon for capacity expansion - Focus on synchronizing supply chain with delivery profiles [31][45][46] Commercial Aerospace Insights - **Production Rates**: - 8%-10% increase in Pratt's output for new engines - 16% sales increase in Collins Aerospace - **GTF Engine Production**: - 55% increase in production since 2019 - Anticipated 30% year-over-year increase in PW-1100 engine output [61][75] Pension and Financial Management - **Pension De-risking**: - Transferring $2.5 billion of pension obligations to an insurer, resulting in a one-time non-cash charge of approximately $300 million in Q4 - **Long-term Financial Outlook**: - Anticipated $200 million year-over-year decline in non-service pension income, but not affecting adjusted earnings per share [19][20][38] Working Capital and Inventory Management - **Inventory Management**: - Focus on reducing working capital, particularly inventory - Digital tools being employed to improve material allocation and visibility [25][29] Capital Allocation Strategy - **Investment Focus**: - Over $2.5 billion in CapEx and nearly $3 billion in R&D annually - Prioritizing dividends and debt reduction, with $5.78 billion of debt paid down so far [86][87] Conclusion - **Overall Outlook**: - Strong momentum heading into 2026 with a focus on execution and capitalizing on growth opportunities in both defense and commercial sectors - **Market Position**: - RTX is well-positioned to meet increasing demand and enhance operational efficiency through digital transformation and strategic investments [34][88]