Neil G. Mitchill
Chief Financial Officer at RTX
Thank you, Jennifer.
I'm on Slide 8. So before I get into the specifics of our '22 financial outlook, let me give you some perspective on how we are thinking about the environment as we look ahead. So let me start with the positives. Despite the impact of COVID variants, we expect the commercial aerospace recovery will continue into 2022, with continued growth in commercial aftermarket and narrowbody OE deliveries, driven by further strength in domestic traffic and growth in international traffic.
By the end of the year, we are assuming global RPMs recover to about 90% of 2019 levels, with domestic travel recovering to be approximately in line with the 2019 levels and international travel recovering to between 75% and 80% of 2019 levels. The reopening of international borders, specifically in the Asia Pacific region and the related wide-body traffic will be a significant factor in the timing and extent of the related aftermarket recovery. Ultimately, the timing and trajectory of the overall recovery this year isn't likely to be linear and it will depend on our customers' fleet decisions and buying behavior.
Looking longer term, we continue to expect commercial traffic to return to 2019 levels by the end of next year. On the defense side, we expect continued organic growth in 2022 as we deliver on our $63 billion backlog, continued bipartisan support for the fiscal '22 defense budget and international demand for our products and technologies. And across RTX, we remain laser focused on driving operational excellence to deliver cost reduction and further margin expansion, including $335 million of incremental RTX merger cost synergies during 2022. And this keeps us on track to achieve $1.5 billion in gross cost synergies by Q1 of 2024.
On the challenges side, we anticipate that global supply chain and inflation pressures will continue, and that 787 build rates will remain low. With respect to the supply chain, we anticipate that COVID-related labor disruptions will persist through the first half of the year, but will ease through the second half of the year. And as we've discussed, a significant portion of our material spend is under long-term agreements. That said, we are assuming a level of inflationary pressure across our businesses and our outlook that will be partially offset by productivity improvements. And of course, we're continuing to monitor the U.S. and global tax environment and the current and potentially protracted continuing resolution.
So with that backdrop, let me tell you how this translates to our financial outlook for the year. Let's turn to Slide 9. At the RTX level, we expect full-year 2022 sales of between $68.5 billion and $69.5 billion. This represents organic growth of between 7% and 9% year-over-year. Keep in mind, the sale of RIS' global training and services businesses creates about $1 billion of sales headwind year-over-year as well as the associated profit.
From an earnings perspective, we expect adjusted EPS of $4.60 to $4.80, up 8% to 12% year-over-year and we expect to generate free cash flow of about $6 billion. That's up about 20% versus 2021 [sic] [2020]. It's important to note that this free cash flow outlook assumes that the legislation requiring R&D capitalization for tax purposes is deferred beyond 2022, which as we've said before, the free cash flow impact of this legislation is approximately $2 billion.
It's also worth noting that if the legislation is not deferred, you would see about a $0.10 EPS benefit as well from the impacts of the RMD capitalization that would have components -- would have on components of our U.S. taxable income. And as Greg mentioned, we expect to buy back at least $2.5 billion of RTX shares over the year, subject to market conditions.
With that, let's move to Slide 10 for the segment outlooks. At Collins, we expect full-year sales to be up low double-digits and adjusted operating profit to grow between $650 million and $800 million versus last year. This is primarily driven by higher narrowbody OE deliveries and growth across all three commercial aftermarket channels, supporting both narrow and widebody aircraft. And military sales at Collins are expected to be up low single-digit for the year.
Turning to Pratt & Whitney. We see full-year sales growing low double-digits versus prior year, principally driven by higher OE deliveries in both Pratt's large commercial engine and Pratt Canada businesses, as well as continued growth in legacy large commercial engine and Pratt Canada shop visits. Military sales at Pratt are expected to be down mid-single digit, driven by lower F-135 production inputs, partially offset by higher F-135 sustainment volume. With respect to operating profit, we see Pratt's adjusted operating profit growing between $500 million and $600 million versus last year, primarily on higher aftermarket volume and partially offset by higher large commercial OE engine deliveries and lower military volumes.
Turning to RIS. We expect full-year sales to be down slightly versus prior year on a reported basis and to grow low single-digit on an organic basis, with strength coming from classified programs and production ramps in Airborne ISR and EWS. And we expect year-over-year adjusted operating profit at RIS to be flat to up $50 million, driven by higher net program efficiencies and volume.
At RMD, we see sales growing low single to mid-single digit, driven by growth across multiple programs and for adjusted operating profit to be up in the range of $150 million to $200 million versus prior year, driven by improved program performance and the volume. It's worth mentioning that we expect both RIS and RMD to again have a book-to-bill greater than 1.0 for the year. And finally, we expect intercompany sales wins to grow in line with total company sales. I will note that we've included in our outlook some of the below-the-line items and pension in the webcast appendices.
So turning now to Slide 11 for our '22 adjusted EPS walk. Starting with the segments. We expect the segments to generate about $0.83 of EPS growth at the midpoint of our outlook range. From there, pension will be a headwind, primarily due to lower CAS recovery and higher discount rates.
Our tax rate in '22 is expected to be between 18.5% and 19% versus the 15.5% in 2021, primarily due to one-time tax benefits associated with the prior year optimization of our legal entity and operating structure that we realized in the third quarter that will not repeat. This will result in a $0.19 headwind.
We expect corporate expenses to be a $0.06 headwind year-over-year due to higher investment-related RTX synergy projects and digital transformation initiatives that are partially offset by lower LTAM [Phonetic] spend. And finally, lower share count, interest and other items are expected to be a $0.07 tailwind. All of this brings us to our outlook range of $4.60 to $4.80 per share.
Now turning to free cash flow on Slide 12. We expect strong operational growth, along with lower restructuring to contribute about $1.5 billion of free cash flow growth in 2022. These will be partially offset by expected pension headwinds and higher cash taxes to get to our free cash flow outlook of about $6 billion. Again, this outlook assumes the legislation requiring RMD capitalization for tax purposes is deferred.
And lastly, before turning it back to Greg, a couple of comments on the first quarter. With respect to sales, we expect sales to be up mid-single digit organically versus prior year, driven by the continued commercial aerospace recovery and partially offset by lower defense sales, driven by continuing supply chain pressures and the impact of Omicron.
And again, just to remind you, prior year included Q1 sales of about $200 million as well as the associated profit for the divested RIS services business. On the adjusted EPS side, we see low double-digit to mid-teens growth in the quarter versus prior year. And for cash, we expect to see an outflow of about $500 million in the quarter due to typical seasonal factors in the timing of collections.
So with that, let me hand it back to Greg to wrap things up.
