On this page of StockholderLetter.com we present the 3/13/2023 shareholder letter from RTX Corp — ticker symbol RTX. Reading current and past RTX letters to shareholders can bring important insights into the investment thesis.

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RTX 3/13/2023 Shareholder/Stockholder Letter Transcript:

Raytheon Technologies
2022 Annual Report

By the numbers
Financials1
$67.1
$4.78
$7.1
2022 net sales
(dollars in billions)
2022 adjusted earnings
per share2
2022 research and development3
$7.2
$2.160
$175
2022 cash flow from operations
2022 dividends paid
per common share
2022 backlog
Sales by type
Sales by geography
Total backlog
41% Commercial
59% Defense
61%
17%
12%
5%
$106B Commercial
$69B Defense
(dollars in billions)
(dollars in billions)
(dollars in billions)
Sales mix
United States
Europe
Asia Pacific
Middle East and
North Africa
5% Other
Raytheon Technologies
Raytheon Technologies (NYSE: RTX) is the world   s largest aerospace and defense company. Our global team of 180,000+
employees pushes the limits of known science and redefines how we connect and protect our world. We are advancing
aviation, building smarter defense systems and creating innovations to take us deeper into space. The company, with
2022 sales of $67 billion, is headquartered in Arlington, Virginia.
To learn more, visit www.rtx.com.
1 The financial information presented is on a continuing operations basis.
2 Adjusted earnings per share is a non-GAAP financial measure. For the corresponding measures calculated in accordance with generally accepted accounting principles
(GAAP) and a reconciliation of the differences between the non-GAAP and GAAP measures, please refer to page 14 in this annual report.
3 Amounts include company- and customer-funded research and development.

Dear Shareowners
As I reflect on Raytheon Technologies    growth and progress
in 2022, I   m gratified our strong fundamentals and innovative
spirit prevailed through a year of adversity.
We worked through tremendous challenges, including
inflation headwinds, a strained supply chain, an extremely
tight labor market and Russia   s invasion of Ukraine, which
caused us to cease all operations and sales in Russia.
Despite these many challenges, this past year confirmed
that our focused portfolio, our superior technical
capabilities and our talented workforce are unmatched
across commercial aerospace and defense markets.
Commercial air traffic continued its recovery from the
global pandemic, resulting in strong demand for our
commercial products and services, while heightened
threat levels are leading the United States and its
allies to enhance defense readiness and to invest in
advanced capabilities.
Our transformative technologies are allowing us to
shape the future of our industry in sustainable
flight, connected aviation ecosystems, multi-domain
operations, and next-generation sensors and
effectors. Two years into our merger, we continue
to realize operational advantages and cost synergies,
and our $175 billion backlog underscores the
high demand for our solutions, products and services.
We take pride in our mission, and as near-term
headwinds recede and we continue to invest in our
business, we are well positioned for future success.
Gregory J. Hayes
Chairman and
Chief Executive Officer
RAYTHEON TECHNOLOGIES 2022 ANNUAL REPORT
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Financial highlights
In 2022, Raytheon Technologies had net sales of $67.1 billion and adjusted earnings
per share of $4.78, driven by the commercial air traffic rebound. We spent more
than $9 billion on research and development and capital expenditures in 2022 as we
continue to invest in technology and innovation and fund future organic growth.
We generated $7.2 billion in cash flow from operations and ended the year with
$4.9 billion in free cash flow despite a $1.6 billion additional U.S. federal cash tax
payment associated with the amortization of R&D spending for federal tax purposes.
We continue to reduce costs, achieving over $400 million in merger-related gross cost
synergies. These bring our total synergies to about $1.4 billion since the merger, and
we are on track to meet our target of $1.5 billion a year earlier than planned.
We also returned $5.9 billion to shareowners in 2022 through dividends and share
repurchases, bringing our capital return merger-to-date to $13.3 billion.
Continued progress
Sustainable aviation
Raytheon Technologies    commitment to sustainable air travel continues to advance.
In October, Airbus began development flight testing of the Pratt & Whitney GTF
Advantage engine on an A320neo aircraft. The GTF Advantage is the world   s most
efficient and sustainable single-aisle aircraft engine, and last year it also proved capable
of running on 100 percent sustainable aviation fuel. Since entering service in 2016, GTF
engines have saved more than one billion gallons of jet fuel and more than 10 million
metric tons of CO2.
   Since entering
service in 2016,
GTF engines have
saved more than
one billion gallons
of jet fuel and more
than 10 million
metric tons of CO2.   
Our leadership in sustainability was also evident in NASA   s selection of Pratt & Whitney
to develop advanced engine technologies to reduce fuel consumption and emissions
for the next single-aisle aircraft. Meanwhile, the European Union Commission selected
Collins Aerospace and Pratt & Whitney, via the Clean Aviation Joint Undertaking, to
team with EU and UK partners on seven sustainable aviation development projects,
ranging from hybrid electric propulsion and thermal management to novel wing
designs and future liquid hydrogen storage tanks. Additionally, our 2021 acquisition
of FlightAware continues to progress as we integrate aircraft tracking and AI-driven
prediction tools into offerings for airports, commercial and business aviation and even
uncrewed aircraft system customers.
Smarter defense
Raytheon Technologies continues to be an essential partner in U.S. and allied defense.
We are a leader in the development of operational hypersonic and counter-hypersonic
systems, a key strategy for the U.S. military. After a second successful flight test of
the Hypersonic Air-breathing Weapon Concept in July, the U.S. Air Force awarded
Raytheon Missiles & Defense a $1 billion contract to develop the Hypersonic Attack
Cruise Missile. RMD also completed the systems requirement review for its glide phase
interceptor prototype to defend the United States from hypersonic missile threats.
As part of the U.S. government   s support for Ukraine, Raytheon Technologies    solutions
are being used to defend Ukrainian citizens, including the Javelin weapon system,
Stinger missiles and GPS-guided Excalibur munitions. In November, the U.S. Army
Adjusted earnings per share and free cash flow are non-GAAP financial measures.
See page 14 for additional information on non-GAAP measures.
2
RAYTHEON TECHNOLOGIES 2022 ANNUAL REPORT

awarded the company a $1.2 billion contract for six National Advanced Surface-to-Air
Missile Systems for Ukraine, and in December, the U.S. government announced plans to
send a Global Patriot Solutions missile defense system to Ukraine.
In September, Pratt & Whitney delivered its 1,000th F135 engine     the safest, most
capable military jet engine in operation. We are also working on modernization of
the F-35, pairing Pratt & Whitney   s F135 Engine Core Upgrade with Collins    Emergency
Power and Cooling System for significantly more thrust, range and thermal capabilities.
These engine system upgrades will greatly enhance engine efficiency and engine life,
as well as reduce life cycle cost. This unique solution demonstrates the true power
of our company.
Raytheon Technologies continues to support multi-domain operations on several
fronts, including the next phase of development for the U.S. Army   s TITAN program,
a tactical ground station that finds and tracks threats to support long-range precision
targeting. Collins was awarded a production contract of up to $583 million for
the Mounted Assured Positioning, Navigation and Timing System Gen II Program.
RMD was awarded a $651 million contract, with options totaling $2.5 billion, for
the AN/SPY   6(V) family of radars to equip 31 U.S. Navy ships.
RMD also delivered the first Lower Tier Air and Missile Defense Sensor to the U.S. Army,
providing a stepped increase of performance from our legacy Patriot system, defending
against a range of threats, from crewed and uncrewed aircraft to cruise missiles and
ballistic missiles.
Intelligent space technologies
We continue to make advances in space technologies, which
we know will be essential for the future of global commerce,
scientific discovery and security. In 2022, Raytheon
Intelligence & Space delivered the ground test and flight
operations system in support of the James Webb Space
Telescope, and Collins was selected to produce NASA   s nextgeneration spacesuit for the International Space Station.
In November, NASA launched Artemis 1, which included
key subsystems and avionics from Collins, and also included
CubeSat miniature satellites that leverage precision avionics
from our recently acquired Blue Canyon Technologies.
Global Patriot Solutions
missile defense system
RAYTHEON TECHNOLOGIES 2022 ANNUAL REPORT
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 3/13/2023 Letter Continued (Full PDF)