RTX Corporation Morgan Stanley's 14th Annual Laguna Conference

Great to be here. Great.

I'll keep it simple. I'll be making some forward-looking statements this morning. Of course, those come with certain risks and uncertainties, so please consult our SEC filings for those. Kristine, maybe I'll just make some brief opening remarks to sort of frame up what we're going to talk about today.

Good morning, everybody. Here at RTX, we have very strong conviction that we're exceptionally well-positioned in the aerospace and defense landscape with our three industry-leading businesses, Pratt & Whitney, Collins, and Raytheon. If you think about Pratt & Whitney, it's got the best small engine company in Pratt & Whitney Canada, over 70,000 engines in service, number 1 and number 2 in virtually all of its sub-segments. Our military engine business is sole source on some of the highest priority platforms in defense today. Think F-35, B-21, and of course, we've got the GTF, 8,000 engines in service, and a long tail of deliveries ahead of us. At Collins, you've got a portfolio that is number 1 or number 2 in 70% of its product segments. It's got 2x the content on new platforms than it did on legacy platforms.

It's got about $105 billion of out-of-warranty equipment flying around today. If you think of Pratt and Collins, not only are they riding the wave of the OE and aircraft demand that's out there today, everything they're delivering is going to have a very long and lucrative aftermarket tail to it. Then, of course, there's Raytheon, which has defense franchises across the company, which is critical to defending the U.S. and our allies. You're reading about it every day, protecting people and critical infrastructure. It's got 35 systems in operation today in 50 countries, and a significant backlog. I think if you look at the end of Q2, the 12-month rolling book-to-bill is 1.77.

Wow. Incredible demand for the product.

We've just recently signed up the UCA for our Tomahawk. We'll be adding that to our backlog here in the third quarter. When you think about that product portfolio, it is just very well-positioned to take advantage of the demand we're seeing in aerospace and defense. That's evidenced by the $289 billion backlog that we've got across RTX. That's up 22% year-over-year. Just incredible demand. It is real, and it is enduring. I'll tell you, our focus, of course, is on executing on this backlog, and we're seeing real momentum, in our execution, our operational focus. If you think through the first half of the year, 13% organic sales growth, 21% year-over-year, adjusted EPS growth, and we generated about $4 billion in free cash flow.

Really good operational progress here in the first half of the year. Of course, we're in a long cycle business, and while execution day in, day out of that backlog is critical to our customers and to our results, we've got to continue to look over the horizon to make sure that we've got the right technologies to fill our pipeline as we move forward, and that we're making sure that we're investing in the newest tools and systems to design and manufacture our products. This year we'll invest about $10.5 billion in company and customer-funded E&D and CapEx to make sure that we are staying very healthy in terms of the product pipeline, delivering on our backlog today, and making sure that we stay competitive well into the future. Last thing I would just say, Kristine, is no change to our full-year outlook.

We still remain on track. With that said, we're starting to see some IEEPA refunds start to flow through here in the third quarter and into the fourth quarter, and so we'll provide an update on that as we kind of move forward. With that, I'll put it back into your capable hands.

We are not paying any commissions today to you, Kristine, but yes, thank you.