Stock Analysis on Net
Stock Analysis on Net

RTX Corp. (NYSE:RTX)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

RTX Corp., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Federal 213 1,724 387 324 188
State 70 126 60 45 48
United States 283 1,850 447 369 236
Foreign 575 513 427 305 2,024
Current 858 2,363 874 674 2,260
Federal (411) (1,399) (26) (264) 111
State (53) (166) 41 258 52
United States (464) (1,565) 15 (6) 163
Foreign 62 (98) (103) (93) (128)
Future (402) (1,663) (88) (99) 35
Income tax expense 456 700 786 575 2,295

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. RTX Corp. current increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Future Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. RTX Corp. future decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.
Income tax expense Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. RTX Corp. income tax expense decreased from 2021 to 2022 and from 2022 to 2023.

Effective Income Tax Rate (EITR)

RTX Corp., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Statutory U.S. federal income tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
Tax related separation activities 0.00% 0.00% 0.00% 0.00% 8.80%
Tax on international activities -0.70% -3.10% -4.10% -1.10% 1.90%
Tax audit settlements 0.00% 0.00% 0.00% 0.00% -3.50%
Tax charges related to separation of Carrier and Otis and Raytheon merger 0.00% 0.00% -0.80% -17.70% 0.00%
Disposals of businesses 0.00% 0.00% 2.20% -7.50% 0.00%
U.S. research and development credit -4.40% -2.70% -3.50% 6.10% 0.00%
U.S. federal statute lapse -1.50% 0.00% 0.00% 0.00% 0.00%
Goodwill impairment 0.00% 0.00% 0.00% -28.40% 0.00%
State income tax, net 0.40% -0.20% 0.70% 2.40% 0.00%
Foreign Derived Intangible Income (FDII) -3.70% -3.50% -2.50% 3.50% 0.00%
U.K. corporate tax rate enactment 0.00% 0.00% 1.50% -0.40% 0.00%
Other 0.80% 0.10% 1.40% -2.30% -0.40%
Effective income tax rate 11.90% 11.60% 15.90% -24.40% 27.80%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. RTX Corp. effective income tax rate decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

Components of Deferred Tax Assets and Liabilities

RTX Corp., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Insurance and employee benefits 994 1,126 1,831 3,004 1,205
Inventory and contract balances 571 639 756 822 —
Warranty provisions 240 242 248 220 —
Capitalization of research and experimental expenditures 1,631 1,712 — — —
Other basis differences 779 828 878 637 2,982
Powder Metal Matter 644 — — — —
Tax loss carryforwards 905 305 251 196 622
Tax credit carryforwards 891 970 1,088 959 1,021
Future income tax benefits, gross 6,655 5,822 5,052 5,838 5,830
Valuation allowances (1,465) (842) (825) (757) (616)
Future income tax benefits, net 5,190 4,980 4,227 5,081 5,214
Goodwill and intangible assets (6,228) (6,588) (7,168) (7,786) (4,293)
Fixed assets (1,739) (1,751) (1,746) (1,637) —
Other basis differences (238) (220) (323) (151) (2,904)
Other items, net — — — — (143)
Future income tax payable (8,205) (8,559) (9,237) (9,574) (7,340)
Future income tax benefits and payable, net (3,015) (3,579) (5,010) (4,493) (2,126)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Future income tax benefits, gross Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. RTX Corp. future income tax benefits, gross increased from 2021 to 2022 and from 2022 to 2023.
Future income tax benefits, net Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. RTX Corp. future income tax benefits, net increased from 2021 to 2022 and from 2022 to 2023.
Future income tax benefits and payable, net Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. RTX Corp. future income tax benefits and payable, net increased from 2021 to 2022 and from 2022 to 2023.

Deferred Tax Assets and Liabilities, Classification

RTX Corp., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Future income tax benefits — — — — 1,611
Future income taxes payable 3,015 3,579 5,010 4,493 3,737

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Future income tax benefits Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.
Future income taxes payable Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. RTX Corp. future income taxes payable decreased from 2021 to 2022 and from 2022 to 2023.

Adjustments to Financial Statements: Removal of Deferred Taxes

RTX Corp., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 161,869 158,864 161,404 162,153 139,716
Less: Noncurrent deferred tax assets, net — — — — 1,611
Total assets (adjusted) 161,869 158,864 161,404 162,153 138,105
Adjustment to Total Liabilities
Total liabilities (as reported) 100,424 84,650 86,705 88,269 95,390
Less: Noncurrent deferred tax liabilities, net 3,015 3,579 5,010 4,493 3,737
Total liabilities (adjusted) 97,409 81,071 81,695 83,776 91,653
Adjustment to Shareowners’ Equity
Shareowners’ equity (as reported) 59,798 72,632 73,068 72,163 41,774
Less: Net deferred tax assets (liabilities) (3,015) (3,579) (5,010) (4,493) (2,126)
Shareowners’ equity (adjusted) 62,813 76,211 78,078 76,656 43,900
Adjustment to Net Income (loss) Attributable To Common Shareowners
Net income (loss) attributable to common shareowners (as reported) 3,195 5,197 3,864 (3,519) 5,537
Add: Deferred income tax expense (benefit) (402) (1,663) (88) (99) 35
Net income (loss) attributable to common shareowners (adjusted) 2,793 3,534 3,776 (3,618) 5,572

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

RTX Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

RTX Corp., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 4.64% 7.75% 6.00% -6.22% 7.19%
Adjusted net profit margin 4.05% 5.27% 5.86% -6.39% 7.23%
Total Asset Turnover
Reported total asset turnover 0.43 0.42 0.40 0.35 0.55
Adjusted total asset turnover 0.43 0.42 0.40 0.35 0.56
Financial Leverage
Reported financial leverage 2.71 2.19 2.21 2.25 3.34
Adjusted financial leverage 2.58 2.08 2.07 2.12 3.15
Return on Equity (ROE)
Reported ROE 5.34% 7.16% 5.29% -4.88% 13.25%
Adjusted ROE 4.45% 4.64% 4.84% -4.72% 12.69%
Return on Assets (ROA)
Reported ROA 1.97% 3.27% 2.39% -2.17% 3.96%
Adjusted ROA 1.73% 2.22% 2.34% -2.23% 4.03%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. RTX Corp. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. RTX Corp. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 RTX Corp. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. RTX Corp. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. RTX Corp. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

RTX Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to common shareowners 3,195 5,197 3,864 (3,519) 5,537
Net sales 68,920 67,074 64,388 56,587 77,046
Profitability Ratio
Net profit margin1 4.64% 7.75% 6.00% -6.22% 7.19%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to common shareowners 2,793 3,534 3,776 (3,618) 5,572
Net sales 68,920 67,074 64,388 56,587 77,046
Profitability Ratio
Adjusted net profit margin2 4.05% 5.27% 5.86% -6.39% 7.23%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Net income (loss) attributable to common shareowners ÷ Net sales
= 100 × 3,195 ÷ 68,920 = 4.64%

2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to common shareowners ÷ Net sales
= 100 × 2,793 ÷ 68,920 = 4.05%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. RTX Corp. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net sales 68,920 67,074 64,388 56,587 77,046
Total assets 161,869 158,864 161,404 162,153 139,716
Activity Ratio
Total asset turnover1 0.43 0.42 0.40 0.35 0.55
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales 68,920 67,074 64,388 56,587 77,046
Adjusted total assets 161,869 158,864 161,404 162,153 138,105
Activity Ratio
Adjusted total asset turnover2 0.43 0.42 0.40 0.35 0.56

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 68,920 ÷ 161,869 = 0.43

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 68,920 ÷ 161,869 = 0.43

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. RTX Corp. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 161,869 158,864 161,404 162,153 139,716
Shareowners’ equity 59,798 72,632 73,068 72,163 41,774
Solvency Ratio
Financial leverage1 2.71 2.19 2.21 2.25 3.34
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 161,869 158,864 161,404 162,153 138,105
Adjusted shareowners’ equity 62,813 76,211 78,078 76,656 43,900
Solvency Ratio
Adjusted financial leverage2 2.58 2.08 2.07 2.12 3.15

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Shareowners’ equity
= 161,869 ÷ 59,798 = 2.71

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareowners’ equity
= 161,869 ÷ 62,813 = 2.58

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 RTX Corp. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to common shareowners 3,195 5,197 3,864 (3,519) 5,537
Shareowners’ equity 59,798 72,632 73,068 72,163 41,774
Profitability Ratio
ROE1 5.34% 7.16% 5.29% -4.88% 13.25%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to common shareowners 2,793 3,534 3,776 (3,618) 5,572
Adjusted shareowners’ equity 62,813 76,211 78,078 76,656 43,900
Profitability Ratio
Adjusted ROE2 4.45% 4.64% 4.84% -4.72% 12.69%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net income (loss) attributable to common shareowners ÷ Shareowners’ equity
= 100 × 3,195 ÷ 59,798 = 5.34%

2 Adjusted ROE = 100 × Adjusted net income (loss) attributable to common shareowners ÷ Adjusted shareowners’ equity
= 100 × 2,793 ÷ 62,813 = 4.45%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. RTX Corp. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to common shareowners 3,195 5,197 3,864 (3,519) 5,537
Total assets 161,869 158,864 161,404 162,153 139,716
Profitability Ratio
ROA1 1.97% 3.27% 2.39% -2.17% 3.96%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to common shareowners 2,793 3,534 3,776 (3,618) 5,572
Adjusted total assets 161,869 158,864 161,404 162,153 138,105
Profitability Ratio
Adjusted ROA2 1.73% 2.22% 2.34% -2.23% 4.03%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income (loss) attributable to common shareowners ÷ Total assets
= 100 × 3,195 ÷ 161,869 = 1.97%

2 Adjusted ROA = 100 × Adjusted net income (loss) attributable to common shareowners ÷ Adjusted total assets
= 100 × 2,793 ÷ 161,869 = 1.73%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. RTX Corp. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.