Christopher T. Calio
President & Chief Executive Officer at RTX
Thank you, and good morning, everyone.
As you saw from our press release this morning, RTX delivered another strong quarter of performance, building on our momentum from the first-half of the year. Demand across the business, including double-digit growth in commercial aftermarket and defense, remains robust and drove 8% organic [Technical Issues] sales growth. Our focus on execution drove 100 basis points of segment margin expansion in the quarter and free cash flow was strong at $2 billion. Based on these results and our expectations for the remainder of the year, we are again raising our full-year outlook for adjusted sales and EPS. And Neil will take you through the details here in a few minutes.
Also of note in the quarter, we completed the accelerated share repurchase program we initiated last October, returning $10.3 billion of capital to shareowners. We've now returned over $32 billion of capital to shareowners since the merger, putting us well on-track to deliver on our commitment of $36 billion to $37 billion by the end of next year. Looking ahead, we continue to experience robust demand for our products and services, saw incredible growth in our backlog, which ended the quarter at a record $221 billion, with a book-to-bill of 1.8 and included $25 billion of defense and $11 billion of commercial orders, clearly demonstrating the differentiated performance that our products and services provide to our customers and supporting our confidence in the long-term growth of RTX.
There were several notable highlights. At Raytheon, we booked a record $16.6 billion of awards in the quarter, driven by the continued global demand for integrated air and missile defense capabilities, with 45% of these bookings for international customers. Key awards included $3 billion associated with our Patriot and GEM-T products, $1.3 billion for SM-3, and $1.2 billion for AMRAAM. Importantly, we booked $1.9 billion for LTAMDS, the first domestic and international production order for our next-generation 360-degree air and missile defense system. At Pratt, we were awarded a $1.3 billion contract for the continued development of the F135 Engine Core Upgrade program, which will deliver enhanced engine range and performance for all variants of the F-35 well into the future. And at Collins, the FAA awarded our Connected Aviation team a $470 million sustainment contract for the continued technical refresh and enhancement of our air traffic control automation system, which has deployed at over 500 air traffic control towers across the U.S. The system provides a real-time view of the airspace and tools to assist with air traffic management and airspace safety.
Okay. Let's move to Slide 4, and I'll provide an update on how we are progressing on our strategic priorities, all of which are enablers to drive best-in-class performance across RTX, including continued top-line growth, margin expansion and strong cash flow generation. I'll start with executing on our commitments, and first and foremost is our GTF fleet management plan. We remain on-track, and our financial and operational outlook remains consistent with our prior comments. At the end of Q3, our inspections of powdered metal parts continue to progress according to plan. The associated fallout rate remains below the 1% expectation and the findings are consistent with the underlying assumptions of our fleet management plan. At our MRO facilities, throughput of engines is improving. PW1100 output increased 10% sequentially and 27% on a year-over-year basis. The team is utilizing core practices to optimize the inspection sequence and implement concurrent assembly operations in our MRO facilities. And we've now reached support agreements with 28 of our customers, covering roughly 75% of the impacted PW1100 fleet.
The terms continue to remain in-line with our assumptions. We're also leveraging our core operating system and Industry 4.0 initiatives across the Company to drive continuous performance improvements, while expanding capacity. For example, at our Raytheon facility in McKinney, Texas, our focus on core implementation, along with investments in capacity and automation, have significantly increased production of our 360-degree sensor suite for the F-35, known as EODAS, which stands for Electro-Optical Distributed Aperture System. Specifically, the teams drove yield improvement, streamlined test and inspection operations and moved from an assembly line production process to a single piece build flow, which has resulted in a five times increase in production capacity for EODAS over the past 12 months. And at Collins, our avionics business is already benefiting from our connected equipment by deploying an automated smart torque system resulting in zero torque-related defects and saving over 20,000 labor hours so far this year. Across RTX, we've now connected 34 factories with our proprietary digital analytics technology and we are on-track to connect 40 factories by the end of the year.
On the capacity front, we continue to invest in increasing output on our key franchise programs to deliver on strong customer demand. This month, Pratt opened a new 845,000 square-foot facility in Oklahoma City that will support global sustainment efforts for military engines, including the F135, F117 and F100. This state-of-the-art facility also features automation and advanced manufacturing technologies that will streamline processes, resulting in improved productivity and throughput.
Shifting to innovating for future growth, we continue to execute on 14 cross-technology roadmaps across RTX to develop next-generation technologies in domains that support our customers' long-term needs. An example is our hybrid electric propulsion technology to improve fuel efficiency. In the quarter, Airbus Helicopters selected Collins and Pratt Canada to support the development of a hybrid electric propulsion system for its PioneerLab technology demonstrator, which is targeting a 30% improvement in fuel efficiency on a twin-engine helicopter. Pratt Canada will provide a derivative of its PW210 engine, combined with two electric motors from Collins.
And as part of our advanced materials roadmap, Collins and Raytheon are working together to adapt commercial brake carbon-carbon composite technology to hypersonic missile applications. Thermal management is a critical requirement, given the high-level speed and high-temperature environments at play. In the quarter, the team achieved technology readiness level six, demonstrating the ability of the parts to survive and perform in extreme environmental conditions. These initiatives highlight our commitment to developing critical next-gen products and solutions for our customers.
Finally, we're focused on leveraging the breadth and scale of RTX. This includes driving simplification within our digital footprint and harmonizing common processes to take cost and complexity out of the business, which will ultimately help drive productivity. So far this year, we've eliminated over 265 systems to streamline our engineering, supply chain and manufacturing processes. For example, Collins is on-track to reduce their engineering systems by 20% this year. This will help optimize the end-to-end process flow through standard work. We are also leveraging our scale within our supply chain to drive increased efficiencies, speed and savings. Through a coordinated RTX approach, we've identified more than 100 million pounds of common metals across 60 unique alloys that are procured by our suppliers. We've negotiated long-term agreements with these alloys that our suppliers can leverage to reduce lead times and cost. We currently have 45 suppliers utilizing these agreements, with the plan to add 15 more by year-end. We expect to realize a 10% to 15% cost savings on these alloys utilizing this approach.
Okay. So, overall, I'm pleased with the progress we've made in our strategic priorities and the momentum we've created across our businesses. With that, I'll turn it over to Neil to take you through the third quarter results in more detail. Neil?
