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What changed in Textron's 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of Textron's 2025 and 2026 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2026 report.

+226 added−205 removedSource: 10-K (2026-02-11) vs 10-K (2025-02-06)

Top changes in Textron's 2026 10-K

226 paragraphs added · 205 removed · 160 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

43 edited+14 added−9 removed40 unchanged
Biggest changeHistorically, we have been successful in negotiating renewals to expiring agreements without any material disruption of operating activities; however, on September 21, 2024, Textron Aviation’s largest union rejected a proposed new contract and initiated a strike. The strike impacted approximately 5,000 of Textron Aviation’s employees at its manufacturing, parts and distribution and service center facilities in Wichita, Kansas.
Biggest changeWith the exception of a strike at Textron Aviation which occurred on September 21, 2024 and ended on October 20, 2024, we have been successful in negotiating renewals to expiring agreements without any material disruption of operating activities. Most recently, we successfully renegotiated a collective bargaining agreement with the Bell segment's largest union for a new five-year term.
Item 1. Business Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative products and services around the world. References to “Textron Inc.,” the “Company,” “we,” “our” and “us” in this Annual Report on Form 10-K, unless otherwise indicated, refer to Textron Inc. and its consolidated subsidiaries.
Item 1. Business Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative products and services around the world. References to “Textron,” the “Company,” “we,” “our” and “us” in this Annual Report on Form 10-K, unless otherwise indicated, refer to Textron Inc. and its consolidated subsidiaries.
Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, or, under certain circumstances, to withhold payment or suspend or debar us as a contractor eligible to receive future contract awards; • Changes in foreign military funding priorities or budget constraints and determinations, or changes in government regulations or policies on the export and import of military and commercial products; • Volatility in the global economy or changes in worldwide political conditions that adversely impact demand for our products; • Volatility in interest rates or foreign exchange rates and inflationary pressures; • Risks related to our international business, including establishing and maintaining facilities in locations around the world and relying on joint venture partners, subcontractors, suppliers, representatives, consultants and other business partners in connection with international business, including in emerging market countries; • Our Finance segment’s ability to maintain portfolio credit quality or to realize full value of receivables; • Performance issues with key suppliers or subcontractors; • Legislative or regulatory actions, both domestic and foreign, impacting our operations or demand for our products; 8 Table of Contents • Our ability to control costs and successfully implement various cost-reduction activities; • The efficacy of research and development investments to develop new products or unanticipated expenses in connection with the launching of significant new products or programs; • The timing of our new product launches or certifications of our new aircraft products; • Our ability to keep pace with our competitors in the introduction of new products and upgrades with features and technologies desired by our customers; • Pension plan assumptions and future contributions; • Demand softness or volatility in the markets in which we do business; • Cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption; • Difficulty or unanticipated expenses in connection with integrating acquired businesses; • The risk that acquisitions do not perform as planned, including, for example, the risk that acquired businesses will not achieve revenue and profit projections; • The impact of changes in tax legislation; • The risk of disruptions to our business and the business of our suppliers, customers and other business partners due to unexpected events, such as pandemics, natural disasters, acts of war, strikes, terrorism, social unrest or other societal, geopolitical or macroeconomic conditions; • Risks related to changing U.S. and foreign trade policies, including increased trade restrictions or tariffs; and • The ability of our businesses to hire, train and retain the highly skilled personnel necessary for our businesses to succeed.
Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, or, under certain circumstances, to withhold payment or suspend or debar us as a contractor eligible to receive future contract awards; • Changes in foreign military funding priorities or budget constraints and determinations, or changes in government regulations or policies on the export and import of military and commercial products; • Volatility in the global economy or changes in worldwide political conditions that adversely impact demand for our products; • Volatility in interest rates or foreign exchange rates and inflationary pressures; 8 Table o f Contents • Risks related to our international business, including establishing and maintaining facilities in locations around the world and relying on joint venture partners, subcontractors, suppliers, representatives, consultants and other business partners in connection with international business, including in emerging market countries; • Our Finance segment’s ability to maintain portfolio credit quality or to realize full value of receivables; • Performance issues with key suppliers or subcontractors; • Legislative or regulatory actions, both domestic and foreign, impacting our operations or demand for our products; • Our ability to control costs and successfully implement various cost-reduction activities; • The efficacy of research and development investments to develop new products or unanticipated expenses in connection with the launching of significant new products or programs; • The timing of our new product launches or certifications of our new aircraft products; • Our ability to keep pace with our competitors in the introduction of new products and upgrades with features and technologies desired by our customers; • Pension plan assumptions and future contributions; • Demand softness or volatility in the markets in which we do business; • Cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption; • Difficulty or unanticipated expenses in connection with integrating acquired businesses; • The risk that acquisitions do not perform as planned, including, for example, the risk that acquired businesses will not achieve revenue and profit projections; • The impact of changes in tax legislation; • The risk of disruptions to our business and the business of our suppliers, customers and other business partners due to unexpected events, such as pandemics, natural disasters, acts of war, strikes, terrorism, social unrest or other societal, geopolitical or macroeconomic conditions; • Risks related to changing U.S. and foreign trade policies, including increased trade restrictions or tariffs; and • The ability of our businesses to hire, train and retain the highly skilled personnel necessary for our businesses to succeed.
Government may not be liable for assets we own and utilize to provide services under the “fee-for-service” contracts; and (d) we may be liable for excess costs incurred by the U.S. Government in procuring undelivered items from another source. See the Aerospace and Defense Industry section in Item 1A. Risk Factors for additional information related to regulation of U.S.
Government may not be liable for assets we own and utilize to provide services under “fee-for-service” contracts; and (d) we may be liable for excess costs incurred by the U.S. Government in procuring undelivered items from another source. See the Aerospace and Defense Industry section in Item 1A. Risk Factors for additional information related to regulation of U.S. Government business.
Talent and Career Development Our talent development programs are designed to prepare our employees at all levels to take on new career and growth opportunities at Textron. Leadership, professional and functional training courses are tailored for employees at each stage of their careers and include a mix of enterprise-wide and business unit-specific programs.
Talent and Career Development Our talent development programs are designed to prepare our employees at all levels to take on new career and growth opportunities at Textron. Leadership, professional and functional training courses are tailored for employees at each stage of their careers and include a mix of enterprise-wide and business-specific programs.
The diversified customer base for Textron Specialized Vehicles includes golf courses and resorts, government agencies and municipalities, consumers, outdoor enthusiasts, and commercial and industrial users such as factories, warehouses, airlines, planned communities, hunting preserves, educational and corporate campuses, sporting venues and landscaping professionals.
The diversified customer base for Textron Specialized Vehicles includes golf courses and resorts, government agencies and municipalities, consumers, outdoor enthusiasts, and commercial and industrial users such as factories, warehouses, airlines, planned communities, hunting preserves, educational and corporate campuses, sporting venues, hotels/resorts and landscaping professionals.
With a product lineup ranging from introductory training aircraft through super mid-size business jets, Textron Aviation’s diverse customer base includes fractional aircraft businesses, charter and fleet operators, corporate aviation, individual buyers, training schools, airlines, and special mission, military and government operators. 3 Table of Contents In support of its family of aircraft, Textron Aviation operates a global network of more than 20 service centers.
With a product lineup ranging from introductory training aircraft through super mid-size business jets, Textron Aviation’s diverse customer base includes fractional aircraft businesses, charter and fleet operators, corporate aviation, individual buyers, training schools, airlines, and special mission, military and government operators. 3 Table o f Contents In support of its family of aircraft, Textron Aviation operates a global network of more than 20 service centers.
Kautex, which is headquartered in Bonn, Germany, operates over 30 plants in 13 countries in close proximity to its customers, along with 9 engineering/research and development locations around the world. Our Textron Specialized Vehicles businesses manufacture and sell products under our E-Z-GO, Arctic Cat, TUG Technologies, Douglas Equipment, Premier, Safeaero, Ransomes, Jacobsen and Cushman brands.
Kautex, which is headquartered in Bonn, Germany, operates over 30 plants in 13 countries in close proximity to its customers, along with 9 engineering/research and development locations around the world. Our Textron Specialized Vehicles businesses manufacture and sell products under our E-Z-GO, TUG Technologies, Douglas Equipment, Premier, Safeaero, Ransomes, Jacobsen and Cushman brands.
Government business. Our commercial aircraft manufacturing businesses are regulated by the FAA in the U.S. and by similar aviation regulatory governing authorities internationally, including, the European Aviation Safety Agency. Maintenance facilities and aftermarket services must also comply with FAA and international regulations. These regulations address production and quality systems, airworthiness and installation approvals, repair procedures and continuing operational safety.
Our commercial aircraft manufacturing businesses are regulated by the FAA in the U.S. and by similar aviation regulatory governing authorities internationally, including the European Union Aviation Safety Agency. Maintenance facilities and aftermarket services must also comply with FAA and international regulations. These regulations address production and quality systems, airworthiness and installation approvals, repair procedures and continuing operational safety.
Bell Segment Bell is a leading supplier of military and commercial helicopters, tiltrotor aircraft, and related spare parts and services in the world. Tiltrotor aircraft are designed to provide the benefits of both helicopters and fixed-wing aircraft. Bell supplies advanced military helicopters and provides parts and support services to the U.S. Government and to military customers outside the United States.
Bell Segment Bell is a leading worldwide supplier of military and commercial helicopters, tiltrotor aircraft, and related spare parts and services. Tiltrotor aircraft are designed to provide the benefits of both helicopters and fixed-wing aircraft. Bell supplies advanced military helicopters and provides parts and support services to the U.S. Government and to military customers outside the United States.
These laws and regulations, among other things, require certification and disclosure of all cost and pricing 5 Table of Contents data in connection with contract negotiation; define allowable and unallowable costs and otherwise govern our right to reimbursement under certain cost-based U.S.
These laws and regulations, among other things, require certification and disclosure of all cost and pricing data in connection with contract negotiation; define allowable and unallowable costs and otherwise govern our right to reimbursement under certain cost-based U.S.
Kautex also offers lightweight, composite Pentatonic battery systems, which include enclosures, underbody protection and thermal management systems, for use in electric vehicles, from hybrid to full battery-powered. 4 Table of Contents Kautex’s business model is focused on developing and maintaining long-term customer relationships with leading global original equipment manufacturers (OEMs).
Kautex also offers lightweight, composite Pentatonic battery systems, which include enclosures, underbody protection and thermal management systems, for use in electric vehicles, from hybrid to full battery-powered. Kautex’s business model is focused on developing and maintaining long-term customer relationships with leading global original equipment manufacturers (OEMs).
Textron Aviation’s turboprop aircraft include the Beechcraft King Air 260, King Air 360ER and King Air 360, and the Cessna Caravan, Grand Caravan EX and SkyCourier. The Beechcraft Denali, a high-performance single engine turboprop aircraft under development, continues toward FAA certification.
Textron Aviation’s turboprop aircraft include the Beechcraft King Air 260, King Air 360ER and King Air 360, and the Cessna Caravan, Grand Caravan EX and SkyCourier. The Beechcraft Denali, a high-performance single engine turboprop aircraft under development, continues toward Federal Aviation Administration (FAA) certification.
We use an annual goal setting 6 Table of Contents process to drive injury rate improvements, and the injury rate reduction goal is a performance metric that is tracked and reported to senior leadership and the Audit Committee of the Board of Directors.
We use an annual goal setting process to drive injury rate improvements, and the injury rate reduction goal is a performance metric that is tracked and reported to senior leadership and the Audit Committee of the Board of Directors.
In 2024 and 2023, our Finance group made payments of $109 million and $160 million, respectively, to finance the Manufacturing group's sale of Textron-manufactured products to third parties. Backlog Backlog represents amounts allocated to contracts that we expect to recognize as revenue in future periods when we perform under the contracts.
In 2025 and 2024, our Finance group made payments of $183 million and $109 million, respectively, to finance the Manufacturing group's sale of Textron-manufactured products to third parties. Backlog Backlog represents amounts allocated to contracts that we expect to recognize as revenue in future periods when we perform under the contracts.
Government-sponsored foreign military sales program, generated approximately 25% of our consolidated revenues in 2024, primarily in our Bell and Textron Systems segments. We must comply with and are affected by laws and regulations relating to the formation, administration and performance of U.S. Government contracts.
Government-sponsored foreign military sales program, generated approximately 27% of our consolidated revenues in 2025, primarily in our Bell and Textron Systems segments. We must comply with and are affected by laws and regulations relating to the formation, administration and performance of U.S. Government contracts.
We need highly skilled personnel in multiple areas including, among others, engineering, manufacturing, information technology, cybersecurity, flight operations, business development and strategy and management. In order to attract and retain highly skilled employees, we offer comprehensive compensation and benefit programs, career opportunities and an engaging, inclusive environment where employees are treated with dignity and respect.
We need highly skilled personnel in multiple areas including, among others, engineering, manufacturing, information technology, cybersecurity, flight operations, business development and 6 Table o f Contents strategy and management. In order to attract and retain highly skilled employees, we offer comprehensive compensation and benefit programs, career opportunities and an engaging, inclusive environment where employees are treated with respect.
Our cleaning systems are comprised of nozzles, reservoirs, inlets and pumps to support onboard cleaning for windscreens, headlamps and ADAS cameras and sensors. In addition, Kautex produces plastic tanks for selective catalytic reduction systems used to reduce emissions from diesel engines, and other fuel system components.
Kautex's cleaning systems are comprised of nozzles, reservoirs, inlets and pumps to support onboard cleaning for windscreens, headlamps and ADAS cameras and sensors. In addition, Kautex produces plastic tanks for selective catalytic reduction systems used to 4 Table o f Contents reduce emissions from diesel engines, and other fuel system components.
Bell’s primary U.S. Government programs are for the development of a next generation tiltrotor aircraft for the U.S. Army’s Future Long Range Assault Aircraft (FLRAA) program and the production and support of the V-22 tiltrotor aircraft and H-1 helicopters. Under the U.S.
Bell’s primary U.S. Government programs are for the development of a next generation tiltrotor aircraft for the U.S. Army’s Future Long Range Assault Aircraft program, now designated as the MV-75 program and the production and support of the V-22 tiltrotor aircraft and H-1 helicopters. Under the U.S.
Prior to his role as Vice President – Investor Relations, he served as Senior Vice President & Chief Financial Officer of Textron Aviation from 2018 through 2023, having previously held leadership positions in finance at Textron Aviation. Following Textron’s acquisition of Beechcraft in 2014, as Textron Aviation’s Vice President, Integration & Strategy, Mr.
Rosenberg was Textron's Vice President – Investor Relations and he served as Senior Vice President & Chief Financial Officer of Textron Aviation from 2018 through 2023, having previously held leadership positions in finance at Textron Aviation. Following Textron’s acquisition of Beechcraft in 2014, as Textron Aviation’s Vice President, Integration & Strategy, Mr.
The Textron eAviation segment is also developing both hybrid and electric propulsion aircraft, including Pipistrel's Nuuva V300, a long-range, large-capacity hybrid-electric vertical takeoff and landing aircraft, and an electric vertical takeoff and landing (eVTOL) aircraft.
The Textron eAviation segment has also been developing both hybrid and electric propulsion aircraft, including Pipistrel's Nuuva V300, a long-range, large-capacity hybrid-electric vertical takeoff and landing unmanned aircraft.
Human Capital Resources At December 28, 2024, we employed approximately 34,000 employees worldwide, with approximately 80% located in the U.S. and the remainder located outside of the U.S.
Human Capital Resources At January 3, 2026, we employed approximately 34,000 employees worldwide, with approximately 80% located in the U.S. and the remainder located outside of the U.S.
Notable service offerings of the segment include fee-for-service programs, using unmanned aircraft systems, and live military air-to-air and air-to-ship training and support services for U.S. Navy, Marine and Air Force personnel provided by Airborne Tactical Advantage Company. Industrial Segment Our Industrial segment designs and manufactures a variety of products within the Kautex and Textron Specialized Vehicles businesses.
Navy, Marine and Air Force personnel provided by Airborne Tactical Advantage Company (ATAC) and fee-for-service programs, using unmanned aircraft systems. Industrial Segment Our Industrial segment designs and manufactures a variety of products within the Kautex and Textron Specialized Vehicles businesses.
Approximately 7,400, or 28%, of our U.S. employees, most of whom work for our Bell and Textron Aviation segments, are represented by unions under collective bargaining agreements, and certain of our non-U.S. employees are represented by organized works councils. From time to time, our collective bargaining agreements expire.
Approximately 7,700, or 29%, of our U.S. employees, most of whom work for our Bell and Textron Aviation segments, are represented by unions under collective bargaining agreements, and certain of our non-U.S. employees are represented by organized works councils. Our collective bargaining agreements expire in accordance with their terms.
Government’s ability to fund its activities and/or pay its obligations; • Changing priorities or reductions in the U.S. Government defense budget, including those related to military operations in foreign countries; • Our ability to perform as anticipated and to control costs under contracts with the U.S. Government; • The U.S.
Government defense budget, including those related to military operations in foreign countries; • Our ability to perform as anticipated and to control costs under contracts with the U.S. Government; • The U.S. Government’s ability to unilaterally modify or terminate its contracts with us for the U.S.
In 2024, the FAA granted a light-sport aircraft airworthiness exemption for the Pipistrel Velis Electro, allowing flight training in an electric aircraft within the United States.
In 2024, the FAA granted a light-sport aircraft airworthiness exemption for the Pipistrel Velis Electro, allowing flight training in an electric aircraft within the United States, and in late 2025, Transport Canada validated the type certificate for the Pipistrel Explorer, Velis Club and Velis Electro.
Information about our Executive Officers The following table sets forth certain information concerning our executive officers as of February 6, 2025. Name Age Current Position with Textron Inc. Scott C. Donnelly 63 Chairman, President and Chief Executive Officer Frank T. Connor 65 Executive Vice President and Chief Financial Officer Julie G.
Information about our Executive Officers The following table sets forth certain information concerning our executive officers as of February 11, 2026. Name Age Current Position with Textron Inc. Lisa M. Atherton 51 President and Chief Executive Officer Scott C. Donnelly 64 Executive Chairman David Rosenberg 49 Executive Vice President and Chief Financial Officer Julie G.
Government-sponsored foreign military sales program, Bell offers the V-22 tiltrotor aircraft and H-1 helicopter products for sale to other countries. The FLRAA development contract was awarded to Bell in December 2022. In 2024, the U.S.
Government-sponsored foreign military sales program, Bell offers the V-22 tiltrotor aircraft and H-1 helicopter products for sale to other countries. The MV-75 contract was awarded to Bell in December 2022. In 2024, the U.S. Army announced approval of Milestone B, establishing the MV-75 as a program of record and transitioning the program to the Engineering and Manufacturing Development phase.
Navy's next generation of Landing Craft Air Cushion vehicles; a family of test and simulation products; the Aerosonde Small Unmanned Aircraft System, a multi-mission capable unmanned aircraft system for commercial and military operations; and piston aircraft engines under the Lycoming brand.
Navy's next generation of Landing Craft Air Cushion vehicles; a family of test and simulation products; the Aerosonde family of unmanned aircraft systems products, multi-mission capable for commercial and military operations; armored land vehicles; and piston aircraft engines under the Lycoming brand. Notable service offerings of the segment include live military air-to-air and air-to-ship training and support services for U.S.
He was appointed to the Board of Directors in October 2009 and became Chief Executive Officer of Textron in December 2009. In July 2010, Mr. Donnelly was appointed Chairman of the Board of Directors effective September 1, 2010. Previously, Mr.
Mr. Donnelly is the Executive Chairman of the Board. He joined Textron in June 2008 as Executive Vice President and Chief Operating Officer and was promoted to President and Chief Operating Officer in January 2009. He was appointed to the Board of Directors in October 2009 and became Chief Executive Officer of Textron in December 2009. In July 2010, Mr.
Army announced approval of Milestone B for the FLRAA program, establishing FLRAA as a program of record and transitioning the program to the Engineering and Manufacturing Development phase. This phase includes continued digital modeling, detailed hardware and software design, and fabrication of hardware, as Bell proceeds to critical design review and the first prototype flight planned for 2026.
This phase includes continued digital modeling, detailed hardware and software design, and fabrication of hardware, as Bell proceeds to critical design review and the first prototype tests planned for 2026.
On October 20, 2024, Textron Aviation and the union reached an agreement and a new five-year labor contract was ratified. Our success is highly dependent upon our ability to hire, train and retain a workforce with the skills necessary for our businesses to develop and manufacture the products desired by our customers.
Our success is highly dependent upon our ability to hire, train and retain a workforce with the skills necessary for our businesses to develop and manufacture the products desired by our customers.
The following description of our business and operating segments should be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Textron Aviation Segment Textron Aviation is a leader in general aviation. Textron Aviation manufactures, sells and services Cessna and Beechcraft aircraft, and services the Hawker brand of business jets.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. Textron Aviation Segment Textron Aviation is a leader in general aviation. Textron Aviation manufactures, sells and services Cessna and Beechcraft aircraft, and services the Hawker brand of business jets. The segment has two principal product lines: aircraft and aftermarket parts and services.
We conduct our business through six operating segments: Textron Aviation, Bell, Textron Systems, Industrial and Textron eAviation, which represent our manufacturing businesses, and Finance, which represents our captive finance business. Our segments include numerous separately incorporated subsidiaries. Total revenues for 2024 were $13.7 billion and are presented below by segment and customer type.
Through 2025, we conducted our business through six operating segments: Textron Aviation, Bell, Textron Systems, Industrial and Textron eAviation, which represent our manufacturing businesses, and Finance, which represents our captive finance business. Our segments include numerous separately incorporated subsidiaries.
The Denali will be powered by an engine expected to be up to 20% more efficient than similarly sized engines. Textron Aviation’s military trainer and defense aircraft include the Beechcraft T-6 trainer, which has been used to train pilots from more than 40 countries, and the AT-6 light attack military aircraft.
Textron Aviation’s military trainer and defense aircraft include the Beechcraft T-6 trainer, which has been used to train pilots from more than 40 countries, and the AT-6 light attack military aircraft. Textron Aviation’s piston engine aircraft include the Cessna Skyhawk, Skylane, Turbo Skylane and the Turbo Stationair HD.
The segment has two principal product lines: aircraft and aftermarket parts and services. Aircraft includes sales of business jets, turboprop aircraft, military trainer and defense aircraft and piston engine aircraft. Aftermarket parts and services includes commercial parts sales and maintenance, inspection and repair services, and advanced flight training devices.
Aircraft includes sales of business jets, turboprop aircraft, military trainer and defense aircraft and piston engine aircraft. Aftermarket parts and services includes commercial parts sales and maintenance, inspection and repair services, and advanced flight training devices. Textron Aviation's business jets include the Cessna Citation M2 Gen2, Citation CJ3 Gen2, Citation CJ4 Gen2, Citation Ascend, Citation Latitude and the Citation Longitude.
Textron Aviation's business jets include the Cessna Citation M2 Gen2, Citation CJ3+, Citation CJ4 Gen2, Citation XLS Gen2, Citation Latitude and the Citation Longitude. In October 2024, Textron Aviation introduced its next generation of light jets, the Citation M2 Gen3, CJ3 Gen3 and CJ4 Gen3, which will include the revolutionary Garmin Emergency Autoland technology.
In 2024, Textron Aviation announced its next generation of light jets, the Citation M2 Gen3, CJ3 Gen3 and CJ4 Gen3, which will include the revolutionary Garmin Emergency Autoland technology. Currently under development, the M2 Gen3, CJ3 Gen3 and CJ4 Gen3 are expected to enter into service in 2027.
Textron eAviation Segment Our Textron eAviation segment is focused on research and development initiatives related to sustainable aviation solutions and includes Pipistrel, a manufacturer of light aircraft.
Textron Specialized Vehicles products are sold through a network of independent distributors and dealers worldwide as well as factory direct resources. Textron eAviation Segment Our Textron eAviation segment has been focused on research and development initiatives related to sustainable aviation solutions and includes Pipistrel, a manufacturer of light aircraft.
Donnelly served as Senior Vice President of GE Global Research, one of the world’s largest and most diversified industrial research organizations with facilities in the U.S., India, China and Germany and held various other management positions since joining General Electric in 1989. Mr. Connor joined Textron in August 2009 as Executive Vice President and Chief Financial Officer. Previously, Mr.
Donnelly served as Senior Vice President of GE Global Research and held various other management positions since joining General Electric in 1989. Mr. Rosenberg was appointed Executive Vice President and Chief Financial Officer on March 1, 2025. Previously, Mr.
Textron Aviation’s piston engine aircraft include the Cessna Skyhawk, Skylane, Turbo Skylane, Turbo Stationair HD and the Beechcraft Baron G58 and Bonanza G36. Textron Aviation markets its products worldwide through its own sales force, as well as through a network of authorized independent sales representatives.
Textron Aviation markets its products worldwide through its own sales force, as well as through a network of authorized independent sales representatives.
These businesses design, manufacture and sell golf cars; off-road utility vehicles; powersports products; light transportation vehicles; aviation ground support equipment; professional turf-maintenance equipment; and specialized turf-care vehicles. A significant portion of the products sold by these businesses are powered with lithium batteries, greatly reducing the products’ impact on the environment.
A significant portion of the products sold by the Textron Specialized Vehicles businesses are powered with lithium batteries, reducing the products’ impact on the environment.
Backlog excludes unexercised contract options and potential orders under ordering-type contracts, such as Indefinite Delivery, Indefinite Quantity contracts. Our backlog at the end of 2024 and 2023 is summarized below: (In millions) December 28, 2024 December 30, 2023 Textron Aviation $ 7,845 $ 7,169 Bell 7,469 4,780 Textron Systems 2,594 1,950 Total backlog $ 17,908 $ 13,899 U.S.
Our backlog at the end of 2025 and 2024 is summarized below: (In millions) January 3, 2026 December 28, 2024 Textron Aviation $ 7,724 $ 7,845 Bell 7,795 7,469 Textron Systems 3,304 2,594 Total backlog $ 18,823 $ 17,908 5 Table o f Contents U.S.
Donnelly was the President and CEO of General Electric Company’s Aviation business unit, a position he had held since July 2005. GE’s Aviation business unit is a leading maker of commercial and military jet engines and components, as well as integrated digital, electric power and mechanical systems for aircraft. Prior to July 2005, Mr.
Donnelly was 7 Table o f Contents appointed Chairman of the Board of Directors effective September 1, 2010. Previously, Mr. Donnelly was the President and CEO of General Electric Company’s Aviation business unit, a position he had held since July 2005. Prior to July 2005, Mr.
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Currently under development, the CJ3 Gen2 is expected to enter into service in 2025, the CJ4 Gen3 is expected to enter into service in 2026, and the M2 Gen3 and CJ3 Gen3 are expected to enter into service in 2027.
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Effective January 4, 2026, the beginning of our 2026 fiscal year, the business activities of the Textron eAviation segment were realigned within Textron's other operating segments resulting in the elimination of the Textron eAviation segment as a separate reporting segment. For additional information regarding this segment change, see the Textron eAviation Segment section below.
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In addition, Textron Aviation is developing the Citation Ascend, a high-performance midsize business jet, which is continuing to progress through the Federal Aviation Administration's (FAA) certification process and is expected to enter into service in 2025.
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We will begin to report under the new segment reporting structure with the filing of our Quarterly Report on Form 10-Q for the first quarter of 2026. Total revenues for 2025 were $14.8 billion and are presented below by segment and customer type. The following description of our business and operating segments should be read in conjunction with Item 7.
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Sales are made through a network of independent distributors and dealers worldwide and the Bass Pro Shops and Cabela's retail outlets, which sell our powersports products under the Tracker Off Road brand, as well as factory direct resources. In addition, we also manufacture powersports products for OEMs for resale to customers under the OEM’s branding.
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The engine that powers the Denali was certified by the FAA in February 2025 and is expected to be up to 20% more efficient than similarly sized engines. The Denali is expected to enter into service in 2026.
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The Nuuva V300's first hover flight is expected in 2025 and initial testing on the Nexus, a full-scale technology demonstrator eVTOL, is expected to begin in 2025. Finance Segment Our Finance segment, or the Finance group, is a commercial finance business that consists of Textron Financial Corporation (TFC) and its consolidated subsidiaries.
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In addition, Bell operates the Bell Training Academy (BTA) with its principal location in Fort Worth, Texas and two satellite locations in Singapore and Spain.
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Duffy 59 Executive Vice President and Chief Human Resources Officer E. Robert Lupone 65 Executive Vice President, General Counsel, Secretary and Chief Compliance Officer Mr. Donnelly joined Textron in June 2008 as Executive Vice President and Chief Operating Officer and was promoted to President and Chief Operating Officer in January 2009.
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The BTA provides technically advanced and fully customizable training solutions for approximately 2,000 pilots and 1,000 maintainers annually, including flight training on Bell-owned aircraft and certified Full Flight Simulators and Flight Training Devices, as well as maintenance training on Bell's production representative maintenance training devices.
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Connor was head of Telecom Investment Banking at Goldman, Sachs & Co. from 2003 to 2008. Prior to that position, he served as Chief Operating Officer of Telecom, Technology and Media Investment Banking at Goldman, Sachs & Co. from 1998 to 2003. Mr.
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These businesses design, manufacture and sell golf cars; utility vehicles; light transportation vehicles; aviation ground support equipment; professional turf-maintenance equipment; and specialized turf-care vehicles. In addition, our E-Z-GO business refurbishes and sells previously owned golf cars.
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Connor joined the Corporate Finance Department of Goldman, Sachs & Co. in 1986 and became a Vice President in 1990 and a Managing Director in 1996. 7 Table of Contents On October 23, 2024, we announced that Mr. Connor will be retiring effective February 28, 2025.
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Under the segment realignment mentioned above, effective at the beginning of our 2026 fiscal year, a significant part of Textron eAviation, including Pipistrel, will become part of the Textron Aviation segment to enable the business to more effectively leverage the development, manufacturing and sales expertise at Textron Aviation.
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David Rosenberg, currently our Vice President – Investor Relations, has been appointed Executive Vice President and Chief Financial Officer to succeed Mr. Connor, effective March 1, 2025. Mr. Rosenberg, 48, has more than 24 years of experience in the aviation industry.
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In addition, Textron eAviation’s manned and unmanned products for military applications and related research and development activities will be included in the results of the Textron Systems segment, which is best suited to provide more direct access to the targeted customer base for these products.
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Government’s ability to unilaterally modify or terminate its contracts with us for the U.S.
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Lastly, certain Textron eAviation research and development activities encompassing digital flight control and air vehicle management systems, which we expect will benefit several of our segments, will be reported within corporate expenses. Finance Segment Our Finance segment, or the Finance group, is a commercial finance business that consists of Textron Financial Corporation (TFC) and its consolidated subsidiaries.
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Backlog excludes unexercised contract options and potential orders under ordering-type contracts, such as Indefinite Delivery, Indefinite Quantity contracts.
Added
Duffy 60 Executive Vice President and Chief Human Resources Officer E. Robert Lupone 66 Executive Vice President, General Counsel, Secretary and Chief Compliance Officer On October 22, 2025, Textron's Board of Directors appointed Lisa M. Atherton as President and Chief Executive Officer and as a member of the Board, effective January 4, 2026. Ms. Atherton has succeeded Scott C.
Added
Donnelly, who will continue as an executive officer of the Company, serving as Executive Chairman of the Board. Ms.
Added
Atherton joined the Company in 2007 and has held positions of increasing responsibility, most recently as the President and CEO of Bell, a position to which she was appointed in April 2023 after joining Bell as Chief Operating Officer in January 2023. From 2017 until January 2023, Ms. Atherton led the Company’s Textron Systems segment as its President and CEO.
Added
Government’s ability to fund its activities, pay its obligations, and/or conduct government functions necessary for the certification of aircraft and aircraft parts and other activities of our businesses; • Changing priorities or reductions in the U.S.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Regulatory, Legal and Other Matters We are subject to increasing compliance risks that could adversely affect our operating results. As a global business, we are subject to laws and regulations in the U.S. and other countries in which we operate.
Biggest changeIn addition, the amount of income taxes we pay is subject to audits in various jurisdictions, and a material assessment by a tax authority could affect our profitability. 14 Table o f Contents Risks Related to Regulatory, Legal and Other Matters We are subject to increasing compliance risks that could adversely affect our operating results.
U.S. Government contracts can be terminated at any time and may contain other unfavorable provisions. The U.S. Government typically can terminate or modify any of its contracts with us either for its convenience or if we default by failing to perform under the terms of the applicable contract. In the event of termination for the U.S.
Government contracts can be terminated at any time and may contain other unfavorable provisions. The U.S. Government typically can terminate or modify any of its contracts with us either for its convenience or if we default by failing to perform under the terms of the applicable contract. In the event of termination for the U.S.
Consumer Product Safety Commission (CPSC) to exclude from the market products that are found to be unsafe or hazardous. Under certain circumstances, the CPSC has in the past and could require in the future us to repair, replace or refund the purchase price of one or more of our products, or potentially even discontinue entire product lines.
Consumer Product Safety Commission (CPSC) to exclude from the market products that are found to be unsafe or hazardous. Under certain circumstances, the CPSC has in the past and could in the future require us to repair, replace or refund the purchase price of one or more of our products, or potentially even discontinue entire product lines.
If we experience any extended interruption of operations at any of our facilities as a result of labor disputes, strikes or other work stoppages, our business, financial condition or results of operations could be adversely affected. In addition, the workforces of many of our suppliers and customers are represented by labor unions.
If we again experience any extended interruption of operations at any of our facilities as a result of labor disputes, strikes or other work stoppages, our business, financial condition or results of operations could be adversely affected. In addition, the workforces of many of our suppliers and customers are represented by labor unions.
Risks related to international operations include import, export, economic sanctions and other trade restrictions; changing U.S. and foreign procurement policies and practices; changes in international trade policies, including higher tariffs on imported goods and materials and renegotiation of free trade agreements; potential retaliatory tariffs imposed by foreign countries against U.S. goods; impacts on our non-U.S. suppliers and customers due to acts of war or terrorism occurring internationally; restrictions on technology transfer; difficulties in protecting intellectual property; increasing complexity of employment and environmental, health and safety regulations; foreign investment laws; exchange controls; repatriation of earnings or cash settlement challenges; compliance with increasingly rigorous data privacy and protection laws; competition from foreign and multinational firms with home country advantages; economic and government instability; acts of industrial espionage, acts of war and terrorism and related safety concerns.
Risks related to international operations include import, export, economic sanctions and other trade restrictions; 13 Table o f Contents changing U.S. and foreign procurement policies and practices; changes in international trade policies, including higher tariffs on imported goods and materials and renegotiation of free trade agreements; potential retaliatory tariffs imposed by foreign countries against U.S. goods; impacts on our non-U.S. suppliers and customers due to acts of war or terrorism occurring internationally; restrictions on technology transfer; difficulties in protecting intellectual property; increasing complexity of employment and environmental, health and safety regulations; foreign investment laws; exchange controls; repatriation of earnings or cash settlement challenges; compliance with increasingly rigorous data privacy and protection laws; competition from foreign and multinational firms with home country advantages; economic and government instability; acts of industrial espionage, acts of war and terrorism and related safety concerns.
Increased worldwide public awareness and concern regarding global climate change has resulted and is likely to continue to result in more legislative and regulatory efforts, in the U.S., the European Union and in other jurisdictions in which we operate, in an effort to address the negative impacts of climate change.
Increased worldwide public awareness and concern regarding global climate change has resulted and is likely to continue to result in more legislative and regulatory efforts, in the U.S., the European Union and in other jurisdictions in which we operate, to address the negative impacts of climate change.
In addition, changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we manufacture or sell our products or from where we import products or raw materials (either directly or through our suppliers) could adversely impact our competitive position, business operations and financial results.
In addition, changes in laws or policies governing the terms of foreign trade, including increased trade restrictions, tariffs or taxes on imports from countries where we manufacture or sell our products or from where we import products or raw materials (either directly or through our suppliers) could adversely impact our competitive position, business operations or financial results.
Existing insurance arrangements may not provide full protection for the costs that may arise from such events. The occurrence of any of 13 Table of Contents these events could materially increase our costs and expenses and have a material adverse effect on our business, financial condition and results of operations.
Existing insurance arrangements may not provide full protection for the costs that may arise from such events. The occurrence of any of these events could materially increase our costs and expenses and have a material adverse effect on our business, financial condition and results of operations.
Government, are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands. For information on our cybersecurity governance, risk management and strategy, see Item 1C. Cybersecurity. 12 Table of Contents Challenges faced by our subcontractors or suppliers could materially and adversely affect our performance.
Government, are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to comply with such demands. For information on our cybersecurity governance, risk management and strategy, see Item 1C. Cybersecurity. Challenges faced by our subcontractors or suppliers could materially and adversely affect our performance.
Such events may adversely affect our financial results, damage our reputation and relationships with our customers, and result in regulatory actions and/or litigation. We are subject to risks of doing business globally that could adversely impact our business. During 2024, we derived approximately 29% of our revenues from international business, including U.S. exports.
Such events may adversely affect our financial results, damage our reputation and relationships with our customers, and result in regulatory actions and/or litigation. We are subject to risks of doing business globally that could adversely impact our business. During 2025, we derived approximately 31% of our revenues from international business, including U.S. exports.
Additionally, laws regulating certain consumer products exist in some states, as well as in other countries in which we sell our products, and more restrictive laws and regulations could be adopted in the future. 14 Table of Contents Increased regulation and stakeholder expectations related to global climate change could negatively affect our operating results.
Additionally, laws regulating certain consumer products exist in some states, as well as in other countries in which we sell our products, and more restrictive laws and regulations could be adopted in the future. Increased regulation and stakeholder expectations related to global climate change could negatively affect our operating results.
In particular, the success of Textron eAviation depends in large part, on our ability to develop and certify new electric and hybrid electric aircraft products in order to achieve our long-term strategy of offering a family of sustainable aircraft for urban air mobility, general aviation, cargo and special mission roles.
In particular, the success of the business activities and research and development initiatives begun at Textron eAviation depends in large part, on our ability to develop and certify new electric and hybrid electric aircraft products in order to achieve our long-term strategy of offering a family of sustainable aircraft for urban air mobility, general aviation, cargo and special mission roles.
Also, changes in pension legislation and regulations could increase the cost associated with our defined benefit pension plans. Our business could be adversely affected by strikes or work stoppages and other labor issues.
Also, changes in pension legislation and regulations could increase the cost associated with our defined benefit pension plans. 16 Table o f Contents Our business could be adversely affected by strikes or work stoppages and other labor issues.
Government contracts generally require us to continue to perform even if the U.S. Government is unable to make timely payments, we may need to finance our continued performance for the impacted contracts from our other resources on an interim basis. An extended delay in the timely payment by the U.S. Government could have a material adverse effect on our liquidity.
Government is unable to make timely payments, we may need to finance our continued performance for the impacted contracts from our other resources on an interim basis. An extended delay in the timely payment by the U.S. Government could have a material adverse effect on our liquidity. U.S.
Our competitors may develop these technologies and products before we do and they may be deemed by our customers to be superior to technologies and products we may develop, and they may otherwise gain industry acceptance in advance of, or instead of, our products.
Our competitors may develop these technologies and products before we do and they may be deemed by our customers to be superior to technologies and products we 15 Table o f Contents may develop, and they may otherwise gain industry acceptance in advance of, or instead of, our products.
In addition, we own the rights to many patents, trademarks, brand names, trade names and trade secrets that are important to our business. Our inability to enforce these intellectual property rights could have an adverse effect on our results of operations.
In addition, we own the rights to many patents, trademarks, brand names, trade names and trade secrets that are important to our business. Our inability to enforce these intellectual property rights could have an adverse effect on our results of operations. Additionally, our intellectual property could be at risk due to cybersecurity threats.
Government cost underrun savings, which are derived from total cost being less than target costs; we also share in cost overruns, which occur when total costs exceed target costs up to a negotiated cost ceiling; however, we are solely responsible for costs above the ceiling.
Under fixed-price incentive contracts, we share with the U.S. Government cost underrun savings, which are derived from total cost being less than target costs; we also share in cost overruns, which occur when total costs exceed target costs up to a negotiated cost ceiling; however, we are solely responsible for costs above the ceiling.
Approximately 7,400, or 28%, of our U.S. employees are represented by labor unions under various collective bargaining agreements with varying durations and expiration dates, and many of our non-U.S. employees are represented by organized councils. From time to time, our collective bargaining agreements expire and are subject to renegotiation at that time.
Approximately 7,700, or 29%, of our U.S. employees are represented by labor unions under various collective bargaining agreements with varying durations and expiration dates, and many of our non-U.S. employees are represented by organized councils. Our collective bargaining agreements expire in accordance with their terms and are subject to renegotiation at that time.
For example, both U.S. and foreign governments and government agencies regulate the aviation industry, and they have previously and may in the future impose new regulations for additional aircraft security or other requirements or restrictions.
Both U.S. and foreign laws and regulations applicable to us have been increasing in scope and complexity. For example, both U.S. and foreign governments and government agencies regulate the aviation industry, and they have previously and may in the future impose new regulations for additional aircraft security or other requirements or restrictions.
Significant changes in national and international priorities for defense spending could affect the funding, or the timing of funding, of our programs, which could negatively impact our results of operations and financial condition. The funding of U.S. Government defense programs is subject to congressional appropriation decisions and the U.S.
Significant changes in national and international priorities for defense spending could affect the funding, or the timing of funding, of our programs, which could negatively impact our results of operations and financial condition.
Our customers, suppliers and subcontractors are likewise targeted, and attack methods continue to evolve. Some cyberattacks depend on human error or manipulation, including phishing attacks or schemes that use social engineering or artificial intelligence to gain access to systems or carry out disbursement of funds or other frauds.
Some cyberattacks depend on human error or manipulation, including phishing attacks or schemes that use social engineering or artificial intelligence to gain access to systems or carry out disbursement of funds or other frauds.
In addition, our investments in equipment or technology that we believe will enable us to obtain future contracts for our U.S. Government or other customers may not result in contracts or revenues sufficient to offset such investment.
In addition, our investments in equipment or technology that we believe will enable us to obtain future contracts for our U.S. Government or other customers may not result in contracts or revenues sufficient to offset such investment. We cannot be sure that our competitors will not develop competing technologies which gain superior market acceptance compared to our products.
The threats we face vary from those common to most industries, to attacks by more advanced and persistent, highly organized adversaries, including nation state actors, which target us for the national security information in our possession, for our role in developing advanced technology systems or with the goal of committing fraudulent activity.
The threats we face are continuous, evolving and vary in degree of severity and sophistication. These threats include advanced, persistent threats from highly organized adversaries, including cybercrime syndicates, nation state actors and hacktivists, which target us for the national security information in our possession, for our role in developing advanced technology systems or with the goal of committing fraudulent activity.
Government’s convenience, contractors are generally protected by provisions covering reimbursement for costs incurred on the contracts and profit on those costs but not the anticipated profit that would have been earned had the contract been completed.
Government’s convenience, contractors are generally protected by provisions covering reimbursement for costs incurred on the contracts and profit on those costs.
Government agencies before we are permitted to sell certain of our aerospace and defense products outside the U.S., and we are not always successful in obtaining these licenses or authorizations in a timely manner. Both U.S. and foreign laws and regulations applicable to us have been increasing in scope and complexity.
For example, we sometimes initially must obtain licenses and authorizations from various U.S. Government agencies before we are permitted to sell certain of our aerospace and defense products outside the U.S., and we are not always successful in obtaining these licenses or authorizations in a timely manner.
International sales and global operations require importing and exporting goods, software and technology, some of which have military applications subjecting them to more stringent import-export controls across international borders on a regular basis. For example, we sometimes initially must obtain licenses and authorizations from various U.S.
As a global business, we are subject to laws and regulations in the U.S. and other countries in which we operate. International sales and global operations require importing and exporting goods, software and technology, some of which have military applications subjecting them to more stringent import-export controls across international borders on a regular basis.
Our future performance depends, in part, on our ability to identify emerging technological trends and customer requirements and to develop and maintain competitive products and services. Delays or cost overruns in the development and acceptance of new products or certification of new aircraft and other products occur from time to time and could adversely affect our results of operations.
Delays or cost overruns in the development and acceptance of new products or certification of new aircraft and other products occur from time to time and could adversely affect our results of operations.
The systems that are subject to review include, but are not limited to, our accounting, estimating, material management and accounting, earned value management, purchasing and government property systems.
These agencies review our performance under contracts, our cost structure and our compliance with laws and regulations applicable to U.S. Government contractors. The systems that are subject to review include, but are not limited to, our accounting, estimating, material management and accounting, earned value management, purchasing and government property systems.
Government programs for which we currently provide or propose to provide products or services from time to time has resulted and, in the future, may result in a loss of anticipated revenues. A loss of such revenues could materially 9 Table of Contents and adversely impact our results of operations and financial condition. In addition, because our U.S.
The reduction, termination or delay in the timing of funding for U.S. Government programs for which we currently provide or propose to provide products or services from time to time has resulted and, in the future, may result in a loss of anticipated revenues.
Government contract. Failure to properly and timely make disclosures under these provisions may result in a termination for default or cause, suspension and/or debarment, and potential fines. As a U.S. Government contractor, our businesses and systems are subject to audit and review by the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA).
Government contract. Failure to properly and timely make disclosures under these provisions may result in a termination for default or cause, suspension and/or debarment, and potential fines. 10 Table o f Contents As a U.S.
In particular, the carrying value of deferred tax assets is dependent on our ability to generate future taxable income, as well as changes to applicable statutory tax rates. In addition, the amount of income taxes we pay is subject to audits in various jurisdictions, and a material assessment by a tax authority could affect our profitability.
In particular, the carrying value of deferred tax assets is dependent on our ability to generate future taxable income, as well as changes to applicable statutory tax rates.
Additionally, fixed-price contracts generally require progress payments rather than performance-based payments which can delay our ability to recover a significant amount of costs 10 Table of Contents incurred on a contract and thus affect the timing of our cash flows. Under fixed-price incentive contracts, we share with the U.S.
Changes in underlying assumptions, circumstances or estimates used in developing the pricing for such contracts can adversely affect our results of operations. Additionally, fixed-price contracts generally require progress payments rather than performance-based payments which can delay our ability to recover a significant amount of costs incurred on a contract and thus affect the timing of our cash flows.
During 2024, we derived approximately 25% of our revenues from sales to a variety of U.S. Government entities. Our revenues from the U.S. Government largely result from contracts awarded to us under various U.S. Government defense-related programs. Considerable uncertainty exists regarding how future budget and program decisions will develop.
During 2025, we derived approximately 27% of our revenues from sales to a variety of U.S. Government entities. Our revenues from the U.S. Government largely result from contracts awarded to us under various U.S. Government defense-related programs. The MV-75 program at Bell represents a significant and growing portion of our U.S. Government revenues and backlog.
We operate in a highly regulated environment and are routinely audited and reviewed by the U.S. Government and its agencies such as the DCAA and DCMA. These agencies review our performance under contracts, our cost structure and our compliance with laws and regulations applicable to U.S. Government contractors.
Government contractor, our businesses and systems are subject to audit and review by the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA). We operate in a highly regulated environment and are routinely audited and reviewed by the U.S. Government and its agencies such as the DCAA and DCMA.
Government finances its operations through temporary funding measures such as “continuing resolutions” rather than full-year appropriations or if a government shutdown were to occur and were to continue for an extended period of time.
Government finances its operations through temporary funding measures such as “continuing resolutions” rather than full-year appropriations or when a government shutdown occurs and continues for an extended period of time. If we incur costs in advance or in excess of funds committed on a contract, we are at risk for non-reimbursement of those costs until additional funds are appropriated.
Our success is highly dependent upon our ability to hire, train and retain a workforce with the skills necessary for our businesses to develop and manufacture the products desired by our customers. We need highly skilled personnel in multiple areas including, among others, engineering, manufacturing, information technology, cybersecurity, flight operations, business development and strategy and management.
Risks Related to Human Capital Our success is highly dependent on our ability to hire, train and retain a qualified workforce. Our success is highly dependent upon our ability to hire, train and retain a workforce with the skills necessary for our businesses to develop and manufacture the products desired by our customers.
Government contracts, and safeguard and restrict the use and dissemination of classified information, covered defense information, and the exportation of certain products and technical data. New laws, regulations or procurement requirements or changes to current ones (including, for example, regulations related to cybersecurity) can significantly increase our costs, reducing our profitability.
Government contracts, and safeguard and restrict the use and dissemination of classified information, covered defense information, and the exportation of certain products and technical data.
Removed
If we incur costs in advance or in excess of funds committed on a contract, we are at risk for non-reimbursement of those costs until additional funds are appropriated. The reduction, termination or delay in the timing of funding for U.S.
Added
Bell has significantly increased and will continue to increase its investments in the resources, facilities and personnel applied to the MV-75 program. Considerable uncertainty exists regarding how future budget and program decisions will develop.
Removed
Changes in underlying assumptions, circumstances or estimates used in developing the pricing for such contracts can adversely affect our results of operations.
Added
In particular, a material reduction or delay in funding of the MV-75 program could have a material adverse effect on our cash flows, results of operations and financial condition. 9 Table o f Contents The funding of U.S. Government defense programs is subject to congressional appropriation decisions and the U.S.
Removed
We cannot be sure that our competitors will not develop competing technologies which gain superior market acceptance compared to our 11 Table of Contents products.
Added
A loss of such revenues could materially and adversely impact our results of operations and financial condition. In addition, because our U.S. Government contracts generally require us to continue to perform even if the U.S.
Removed
Business and Operational Risks Risks arising from uncertainty in global macroeconomic conditions may harm our business. We are sensitive to global macroeconomic conditions.
Added
However, contractors are not automatically entitled to reimbursement for capital investments made for production facilities and other resources necessary to accommodate a large program such as the MV-75 or for the anticipated profit that would have been earned had the contract been completed.
Removed
Additionally, our intellectual property could be at risk due to cybersecurity threats. 15 Table of Contents Risks Related to Human Capital Our success is highly dependent on our ability to hire, train and retain a qualified workforce.
Added
New laws, regulations or procurement requirements or changes to current ones (including, for example, regulations related to cybersecurity and the recently issued Executive Order relating to underperformance of U.S. defense contracts, investment in defense production capacity and possible limitations on dividends and share buybacks) can significantly increase our costs, thereby reducing our profitability or otherwise adversely impacting our results of operations, financial condition, or shareholder returns.
Added
Our future performance depends, in part, on our ability to identify emerging technological trends and customer requirements and to develop and maintain competitive products and services.
Added
Artificial intelligence technologies have developed rapidly and our business may be adversely affected if we cannot successfully 11 Table o f Contents integrate the technology into our internal business processes and product and service offerings in a timely, cost-effective, compliant and responsible manner.
Added
Business and Operational Risks Global macroeconomic conditions could negatively impact our business. Global macroeconomic conditions have negatively impacted our business in the past and could in the future negatively impact our business.
Added
In particular, recent changes to global tariff policies have created significant uncertainty with respect to trade policies, treaties and tariffs. Our aircraft products, subassemblies, parts and components manufactured in Canada and Mexico are largely qualified under the rules of the United States-Mexico-Canada Agreement (USMCA) for preferential treatment on tariffs imposed by the U.S. on imports from Canada and Mexico.
Added
In 2026, the USMCA is subject to a mandatory six-year joint review, during which the United States, Canada, and Mexico will assess whether the agreement continues to serve their respective economic and strategic interests. There can be no assurance that this review will conclude with the continuation of the trilateral agreement in its current form or at all.
Added
The termination of the agreement or renegotiation of the agreement with terms less favorable to us could result in the loss or reduction of preferential tariff treatment which could increase our costs and create compliance and supply-chain disruption risks.
Added
These developments could adversely impact us, our distributors, customers, subcontractors or suppliers, which could have a 12 Table o f Contents material adverse effect on our financial position, results of operations or cash flows. See Management's Discussion and Analysis of Financial Condition and Results of Operations for further discussion of the impact of these tariffs.
Added
Some of these threats are related to the geopolitical environment and have, therefore, grown in number and changed in focus due to recent and evolving conflicts. Our customers, suppliers and subcontractors are likewise targeted, and attack methods continue to evolve.
Added
We need highly skilled personnel in multiple areas including, among others, engineering, manufacturing, information technology, cybersecurity, flight operations, business development and strategy and management.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe will also be 16 Table of Contents required to achieve Cybersecurity Maturity Model Certification which will certify our compliance with the federally mandated CUI program.
Biggest changeWe are required to achieve Cybersecurity Maturity Model Certification (CMMC) for our defense businesses, which will certify their compliance with the federally mandated CUI program. We have successfully achieved CMMC certification at one defense business and have scheduled formal evaluations for the other defense businesses in 2026.
The Board annually receives a comprehensive presentation on information security and controls from our Chief Information Officer (CIO) and, as may be necessary for specific topics, follow up occurs at additional meetings during the course of the year.
The Board annually receives a comprehensive presentation on information security and controls from our Chief Information Officer (CIO) and, as may be necessary for specific topics, follow up occurs at additional Board meetings during the course of the year.
Management of Cybersecurity Risks Textron Information Services is led by our CIO who has held positions of increasing responsibility within our corporate, Bell and Textron Systems IT organizations since 2008, including leading the IT organizations at both segments in maintaining compliance with the DoD information security requirements, as well as with our enterprise information security policies and standards.
Management of Cybersecurity Risks Textron Information Services is led by our CIO who has held positions of increasing responsibility within our corporate, Bell and Textron Systems IT organizations since 2008, including leading the IT organizations at both segments in maintaining compliance with the DoW information security requirements, as well as with our enterprise information security policies and standards.
As a U.S. defense contractor, we are required to comply with extensive regulations, including requirements imposed by the Defense Federal Acquisition Regulation Supplement related to adequately safeguarding controlled unclassified information (CUI) and reporting cybersecurity incidents to the U.S. Department of Defense (DoD).
As a U.S. defense contractor, we are required to comply with extensive regulations, including requirements imposed by the Defense Federal Acquisition Regulation Supplement related to adequately safeguarding controlled unclassified information (CUI) and reporting cybersecurity incidents to the U.S. Department of War (DoW).
He previously led strategic IT projects and teams responsible for delivering global IT solutions for several large U.S. based companies. Our corporate information security organization, led by our Chief Information Security Officer (CISO), who reports to our CIO, is responsible for our overall information security strategy, policy, security engineering, operations and cyber threat detection and response.
He previously led strategic IT projects and teams responsible for delivering global IT solutions for several large U.S. based companies. 17 Table o f Contents Our corporate information security organization, led by our Chief Information Security Officer (CISO), who reports to our CIO, is responsible for our overall information security strategy, policy, security engineering, operations and cyber threat detection and response.
We achieve this objective by: • Designing, implementing and maintaining solutions with appropriate security controls. • Sustaining solutions with required patching and vulnerability remediation. • Creating and executing controls in support of policy as well as regulatory compliance. • Ensuring that our policies, processes, practices and technologies proactively protect, shield, defend and remediate cyber threats. • Delivering quality communications and annual training to stakeholders on cyber awareness and computing hygiene. 17 Table of Contents We believe that the conduct of our employees is critical to the success of our information security.
We achieve this objective by: • Designing, implementing and maintaining solutions with appropriate security controls. • Sustaining solutions with required patching and vulnerability remediation. • Creating and executing controls in support of policy as well as regulatory compliance. • Ensuring that our policies, processes, practices and technologies proactively protect, shield, defend and remediate cyber threats. • Delivering quality communications and annual training to stakeholders on cyber awareness and computing hygiene.
Through our security awareness program, we keep our employees apprised of threats, risks and the part that they play in protecting both themselves and the company.
We believe that the conduct of our employees is critical to the success of our information security. Through our security awareness program, we keep our employees apprised of threats, risks and the part that they play in protecting both themselves and the Company.
Collaboration with our industry partners and government customers contributes to the protection of Textron’s computing environment as well as our military stakeholders.
Our insider threat detection processes are designed to identify and evaluate potential insider threats so that appropriate mitigation can be implemented. 18 Table o f Contents Collaboration with our industry partners and government customers contributes to the protection of Textron’s computing environment as well as our military stakeholders.
Protections against insider threat is a critical component of our security strategy, particularly within our defense business units. Our insider threat detection processes are designed to identify and evaluate potential insider threats so that appropriate mitigation can be implemented.
Protections against insider threat is a critical component of our security strategy, particularly within our defense businesses.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties On December 28, 2024, we operated a total of 56 plants located throughout the U.S. and 44 plants outside the U.S. We own 60 plants and lease the remainder for a total manufacturing space of approximately 23.6 million square feet.
Biggest changeItem 2. Properties On January 3, 2026, we operated a total of 57 plants located throughout the U.S. and 45 plants outside the U.S. We own 59 plants and lease the remainder for a total manufacturing space of approximately 23.8 million square feet.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeGovernment could result in our suspension or debarment from U.S. Government contracting for a period of time. On the basis of information presently available, we do not believe that existing proceedings and claims will have a material effect on our financial position or results of operations. Item 4. Mine Safety Disclosures Not applicable. 18 Table of Contents PART II
Biggest changeGovernment could result in our suspension or debarment from U.S. Government contracting for a period of time. On the basis of information presently available, we do not believe that existing proceedings and claims will have a material effect on our financial position or results of operations. Item 4. Mine Safety Disclosures Not applicable. 19 Table o f Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Repurchases of Equity Securities The following provides information about our fourth quarter 2024 repurchases of equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended: Period (shares in thousands) Total Number of Shares Purchased * Average Price Paid per Share (excluding commissions) Total Number of Shares Purchased as part of Publicly Announced Plan * Maximum Number of Shares that may yet be Purchased under the Plan September 29, 2024 – November 2, 2024 500 $ 82.32 500 17,881 November 3, 2024 – November 30, 2024 1,475 84.88 1,475 16,406 December 1, 2024 – December 28, 2024 820 80.60 820 15,586 Total 2,795 $ 83.17 2,795 * These shares were purchased pursuant to a plan authorizing the repurchases of up to 35 million shares of Textron common stock that was approved on July 24, 2023 by our Board of Directors.
Biggest changeIssuer Repurchases of Equity Securities The following provides information about our fourth quarter 2025 repurchases of equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended: Period (shares in thousands) Total Number of Shares Purchased * Average Price Paid per Share (excluding commissions) Total Number of Shares Purchased as part of Publicly Announced Plan * Maximum Number of Shares that may yet be Purchased under the Plan September 28, 2025 – November 1, 2025 390 $ 80.31 390 6,841 November 2, 2025 – November 29, 2025 1,450 81.05 1,450 5,391 November 30, 2025 – January 3, 2026 455 84.96 455 4,936 Total 2,295 $ 81.70 2,295 * These shares were purchased pursuant to a plan authorizing the repurchases of up to 35 million shares of Textron common stock that was approved on July 24, 2023 by our Board of Directors.
Stock Performance Graph The following graph compares the total return on a cumulative basis at the end of each year of $100 invested in our common stock on December 31, 2019 with the Standard & Poor’s (S&P) 500 Stock Index, the S&P 500 Aerospace & Defense (A&D) Index and the S&P 500 Industrials Index, all of which include Textron.
Stock Performance Graph The following graph compares the total return on a cumulative basis at the end of each year of $100 invested in our common stock on December 31, 2020 with the Standard & Poor’s (S&P) 500 Stock Index, the S&P 500 Aerospace & Defense (A&D) Index and the S&P 500 Industrials Index, all of which include Textron.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market on which our common stock is traded is the New York Stock Exchange under the symbol "TXT." At December 28, 2024, there were approximately 4,800 record holders of Textron common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market on which our common stock is traded is the New York Stock Exchange under the symbol "TXT." At January 3, 2026, there were approximately 4,500 record holders of Textron common stock.
Removed
This share repurchase program has no expiration date.
Added
This share repurchase program had no expiration date. On February 11, 2026, pursuant to a delegation by our Board of Directors, Textron's Audit Committee approved a program for the repurchase of up to 25 million shares of our common stock.
Removed
The values calculated assume dividend reinvestment. 2019 2020 2021 2022 2023 2024 Textron Inc. $ 100.00 $ 108.62 $ 173.72 $ 159.50 $ 181.37 $ 174.29 S&P 500 100.00 118.40 152.39 124.79 157.59 199.99 S&P 500 A&D 100.00 83.94 95.03 111.54 119.09 138.18 S&P 500 Industrials 100.00 111.06 134.52 127.15 150.20 178.38 Item 6. [Reserved] 19 Table of Contents
Added
The new repurchase program has no expiration date and replaced the prior 2023 share repurchase program that had 3.9 million shares remaining available for repurchase.
Added
The values calculated assume dividend reinvestment. 2020 2021 2022 2023 2024 2025 Textron Inc. $ 100.00 $ 159.93 $ 146.84 $ 166.98 $ 158.97 $ 181.10 S&P 500 100.00 128.71 105.40 133.10 166.40 196.57 S&P 500 A&D 100.00 113.22 132.89 141.88 162.31 237.57 S&P 500 Industrials 100.00 121.12 114.48 135.24 158.87 193.29

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

61 edited+34 added−28 removed33 unchanged
Biggest changeConsolidated Results of Operations % Change (Dollars in millions) 2024 2023 2022 2024 2023 Revenues $ 13,702 $ 13,683 $ 12,869 —% 6% Cost of sales 11,200 10,835 10,199 3% 6% Gross margin as a percentage of Manufacturing revenues 18.0% 20.5% 20.4% Research and development costs 491 570 601 (14)% (5)% Selling and administrative expense 1,156 1,225 1,186 (6)% 3% Interest expense, net 97 77 107 26% (28)% Special charges 78 126 — (38)% 100% Non-service components of pension and postretirement income, net 263 237 240 11% (1)% 20 Table of Contents Revenues Revenues increased $19 million in 2024, compared with 2023, largely due to the following factors: • Higher Bell revenues of $432 million, largely reflecting higher military aircraft and support revenues of $347 million, primarily due to higher volume on the FLRAA program, partially offset by lower volume on the V-22 program. • Lower Industrial revenues of $326 million, due to lower revenues of $263 million at Textron Specialized Vehicles, principally in the powersports and personal transportation vehicles product lines due to reduced demand in their end markets, and lower revenues of $63 million at Kautex. • Lower Textron Aviation revenues of $89 million, reflecting lower volume and mix of $270 million, principally a result of the strike discussed in the Segment Analysis section below, partially offset by higher pricing of $181 million in both the aircraft and aftermarket parts and services product lines.
Biggest changeConsolidated Results of Operations % Change (Dollars in millions) 2025 2024 2023 2025 2024 Revenues $ 14,799 $ 13,702 $ 13,683 8% —% Cost of sales 12,104 11,200 10,835 8% 3% Gross margin as a % of Manufacturing revenues 17.8% 18.0% 20.5% Research and development costs $ 521 $ 491 $ 570 6% (14)% Selling and administrative expense 1,173 1,156 1,225 1% (6)% Interest expense, net 126 97 77 30% 26% Special charges 4 78 126 (95)% (38)% Non-service components of pension and postretirement income, net 266 263 237 1% 11% Revenues Revenues increased $1.1 billion in 2025, compared with 2024, largely due to the following factors: • Higher Bell revenues of $703 million, due to higher military aircraft and support programs revenues of $570 million, primarily related to the MV-75 program and military sustainment programs, and higher commercial revenues of $133 million. • Higher Textron Aviation revenues of $671 million, reflecting higher aircraft revenues of $548 million and higher aftermarket parts and services revenues of $123 million. 21 Table o f Contents • Lower Industrial revenues of $302 million, with $294 million at Textron Specialized Vehicles, largely reflecting the impact from the disposition of the Powersports business in April 2025, as discussed in Note 15 to the Consolidated Financial Statements, and lower volume and mix, primarily in golf products.
Changes in segment profit for these contracts are typically expressed in terms of volume and mix and contract performance, which includes cumulative catch-up adjustments associated with a) revisions to the transaction price that may reflect contract modifications or changes in assumptions related to award fees and other variable consideration or b) changes in the total estimated costs at completion due to improved or deteriorated operating performance.
Changes in segment profit for these contracts are typically expressed in terms of volume and mix and contract performance, which includes cumulative catch-up adjustments associated with a) revisions to the transaction price that may reflect contract modifications or changes in assumptions related to award fees and other variable consideration or b) changes in the total estimated costs at completion due to improved or deteriorated operating performance among other factors.
The agreement, as amended in December 2015, also requires Textron to ensure that TFC maintains fixed charge coverage of no less than 125% and consolidated shareholders' equity of no less than $125 million. There were no cash contributions required to be paid to TFC in 2024 and 2023 to maintain compliance with the support agreement.
The agreement, as amended in December 2015, also requires Textron to ensure that TFC maintains fixed charge coverage of no less than 125% and consolidated shareholders' equity of no less than $125 million. There were no cash contributions required to be paid to TFC in 2025 and 2024 to maintain compliance with the support agreement.
For an overview of our business segments, including a discussion of our major products and services, refer to Item 1. Business. A discussion of our financial condition and operating results for 2024 compared with 2023 is provided below, while a discussion of 2023 compared with 2022 can be found in Item 7.
For an overview of our business segments, including a discussion of our major products and services, refer to Item 1. Business. A discussion of our financial condition and operating results for 2025 compared with 2024 is provided below, while a discussion of 2024 compared with 2023 can be found in Item 7.
Manufacturing efficiency includes changes in material, labor and overhead variances to standards, typically due to scrap rates, labor efficiency or inefficiencies, facility usage and other manufacturing productivity inputs. Approximately 25% of our 2024 revenues were derived from contracts with the U.S. Government, including those under the U.S. Government-sponsored foreign military sales program. For our segments that contract with the U.S.
Manufacturing efficiency includes changes in material, labor and overhead variances to standards, typically due to scrap rates, labor efficiency or inefficiencies, facility usage and other manufacturing productivity inputs. Approximately 27% of our 2025 revenues were derived from contracts with the U.S. Government, including those under the U.S. Government-sponsored foreign military sales program. For our segments that contract with the U.S.
Government-sponsored foreign military sales program, for the design, development, manufacture or modification of aerospace and defense products as well as related services. We generally use the cost-to-cost method to measure progress for these contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts.
Government, including those under the U.S. Government-sponsored foreign military sales program, for the design, development, manufacture or modification of aerospace and defense products as well as related services. We generally use the cost-to-cost method to measure progress for these contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts.
When our estimate of the total costs to be incurred on a contract exceeds the estimated total transaction price, a provision for the entire loss is recorded in the period in which the loss is determined.
When our estimate of the total costs to be incurred on a performance obligation exceeds the estimated transaction price, a provision for the entire loss is recorded in the period in which the loss is determined.
The impact of our cumulative catch-up adjustments on segment profit recognized in prior periods is presented below: (In millions) 2024 2023 2022 Gross favorable $ 122 $ 106 $ 101 Gross unfavorable (91) (62) (117) Net adjustments $ 31 $ 44 $ (16) Due to the significance of judgment in the estimation process described above, it is likely that materially different revenues and/or cost of sales amounts could be recorded if we used different assumptions or if the underlying circumstances were to change.
The impact of our cumulative catch-up adjustments on segment profit recognized in prior periods is presented below: (In millions) 2025 2024 2023 Gross favorable $ 130 $ 122 $ 106 Gross unfavorable (64) (91) (62) Net adjustments $ 66 $ 31 $ 44 Due to the significance of judgment in the estimation process described above, it is likely that materially different revenues and/or cost of sales amounts could be recorded if we used different assumptions or if the underlying circumstances were to change.
For a full reconciliation of our effective tax rate to the U.S. federal statutory tax rate, see Note 16 to the Consolidated Financial Statements on page 63 . 21 Table of Contents Segment Analysis We operate in, and report financial information for, the following six operating segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation and Finance.
For a full reconciliation of our effective tax rate to the U.S. federal statutory tax rate, see Note 16 to the Consolidated Financial Statements on page 64 . 22 Table o f Contents Segment Analysis We operate in, and report financial information for, the following six operating segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation and Finance.
All estimates are subject to change during the performance of the contract and, therefore, may affect the profit booking rate. Changes in our estimate of the total expected cost or in the transaction price for a contract typically impact our profit booking rate.
All estimates are subject to change during the performance of the contract and, therefore, may affect the profit booking rate. 29 Table o f Contents Changes in our estimate of the total expected cost or in the transaction price for a contract typically impact our profit booking rate.
A change of 50 basis-points higher or lower, with all other assumptions held constant, in this weighted-average discount rate in 2024 would have changed our pension income for our domestic plans by approximately $10 million. 29 Table of Contents
A change of 50 basis-points higher or lower, with all other assumptions held constant, in this weighted-average discount rate in 2025 would have changed our pension income for our domestic plans by approximately $10 million. 30 Table o f Contents
Manufacturing Group Cash Flows Cash flows from continuing operations for the Manufacturing group as presented in our Consolidated Statements of Cash Flows are summarized below: (In millions) 2024 2023 2022 Operating activities $ 1,008 $ 1,270 $ 1,461 Investing activities (288) (345) (511) Financing activities (1,438) (776) (875) Cash flows from operating activities were $1.0 billion in 2024, compared with $1.3 billion in 2023.
Manufacturing Group Cash Flows Cash flows from continuing operations for the Manufacturing group as presented in our Consolidated Statements of Cash Flows are summarized below: (In millions) 2025 2024 2023 Operating activities $ 1,327 $ 1,008 $ 1,270 Investing activities (264) (288) (345) Financing activities (530) (1,438) (776) Cash flows from operating activities were $1.3 billion in 2025, compared with $1.0 billion in 2024.
For the Manufacturing group, we also have purchase obligations that require material future cash outlays totaling $2.7 billion in 2025, $501 million in 2026 and $355 million thereafter. Purchase obligations include undiscounted amounts committed under contracts or purchase orders for goods and services with defined terms as to price, quantity and delivery dates, as well as property, plant and equipment.
For the Manufacturing group, we also have purchase obligations that require material future cash outlays totaling $3.5 billion in 2026, $626 million in 2027 and $171 million thereafter. Purchase obligations include undiscounted amounts committed under contracts or purchase orders for goods and services with defined terms as to price, quantity and delivery dates, as well as property, plant and equipment.
Income Taxes 2024 2023 2022 Effective tax rate 12.5% 15.2% 15.2% In 2024, the effective tax rate of 12.5% was lower than the U.S. federal statutory tax rate of 21%, largely due to the favorable impact of research and development credits and the effective settlement of certain tax positions in the fourth quarter of 2024, which is discussed in Note 16 to the Consolidated Financial Statements on page 63 .
In 2024, the effective tax rate of 12.5% was lower than the U.S. federal statutory tax rate of 21%, largely due to the favorable impact of research and development credits and the effective settlement of certain tax positions in the fourth quarter of 2024, which is discussed in Note 16 to the Consolidated Financial Statements.
Cash flows used by financing activities in 2024 included $1.1 billion of cash paid to repurchase an aggregate of 12.9 million shares of our common stock under the 2023 share repurchase plan described below and payments on long-term debt of $361 million.
In 2024, cash flows used in financing activities included $1.1 billion of cash paid to repurchase an aggregate of 12.9 million shares of our common stock and $361 million of payments on long-term debt.
In 2024, the weighted-average discount rate used in calculating pension income was 5.19%, compared with 5.51% in 2023. For our domestic plans, the assumed discount rate was 5.25% in 2024, compared with 5.55% in 2023.
In 2025, the weighted-average discount rate used in calculating pension income was 5.73%, compared with 5.19% in 2024. For our domestic plans, the assumed discount rate was 5.80% in 2025, compared with 5.25% in 2024.
In 2024 and 2023, investing cash flows included capital expenditures of $364 million and $402 million, respectively, partially offset by net proceeds from corporate-owned life insurance policies of $85 million and $40 million, respectively.
In 2025 and 2024, cash flows used in investing activities included capital expenditures of $383 million and $364 million, respectively, partially offset by net proceeds from corporate-owned life insurance policies of $80 million and $85 million, respectively.
A lower expected rate of return on plan assets will decrease pension income. For 2024 and 2023, the assumed expected long-term rate of return on plan assets used in calculating pension income was 7.16% and 7.14%, respectively. For 2024, the assumed rate of return for our domestic plans, which represent approximately 90% of our total pension assets, was 7.25%.
For both 2025 and 2024, the assumed expected long-term rate of return on plan assets used in calculating pension income was 7.16%. For 2025, the assumed rate of return for our domestic plans, which represent approximately 89% of our total pension assets, was 7.25%.
Financial highlights for 2024 also include: • Generated $1.0 billion of net cash from operating activities from our manufacturing businesses. • Invested $491 million in research and development projects and $364 million in capital expenditures. • Returned $1.1 billion to our shareholders through the repurchase of 12.9 million shares of our common stock.
Financial highlights for 2025 also include: • Generated $1.3 billion of net cash from operating activities from our manufacturing businesses. • Invested $521 million in research and development projects and $383 million in capital expenditures. • Returned $822 million to our shareholders through the repurchase of 10.7 million shares of our common stock.
In July 2023, Textron's Board of Directors approved a program for the repurchase of up to 35 million shares of our common stock. This share repurchase program allows us to continue our practice of repurchasing shares to offset the impact of dilution from stock-based compensation and benefit plans and for opportunistic capital management purposes.
This share repurchase program allows us to continue our practice of repurchasing shares to offset the impact of dilution from stock-based compensation and benefit plans and for opportunistic capital management purposes.
In 2023, the effective tax rate of 15.2% was lower than the U.S. federal statutory tax rate of 21%, largely due to the favorable impact of research and development credits and tax deductions for foreign-derived intangible income.
Income Taxes 2025 2024 2023 Effective tax rate 18.8% 12.5% 15.2% In 2025, the effective tax rate of 18.8% was lower than the U.S. federal statutory tax rate of 21%, largely due to the favorable impact of research and development credits.
We also maintain an effective shelf registration statement filed with the Securities and Exchange Commission that allows us to issue an unlimited amount of public debt and other securities. On March 1, 2024, we repaid our $350 million 4.30% Notes due March 2024.
We also maintain an effective shelf registration statement filed with the Securities and Exchange Commission that allows us to issue an unlimited amount of public debt and other securities.
Special Charges Special charges of $78 million and $126 million in 2024 and 2023, respectively, include restructuring activities and asset impairment charges as described in Note 15 to the Consolidated Financial Statements on page 62 .
For 2025, 2024 and 2023, gross interest expense totaled $164 million, $146 million and $133 million, respectively. Special Charges Special charges of $4 million, $78 million and $126 million in 2025, 2024 and 2023, respectively, largely include restructuring activities and asset impairment charges as described in Note 15 to the Consolidated Financial Statements on page 63 .
In 2023, cash flows used by financing activities included $1.2 billion of share repurchases, partially offset by $348 million of net proceeds from the issuance of long-term debt.
Cash flows used in financing activities in 2025 included $822 million of share repurchases and $720 million of payments on long-term debt, partially offset by $991 million of net proceeds from the issuance of long-term debt. In 2024, cash flows used in financing activities included $1.1 billion of share repurchases and $377 million of payments on long-term debt.
Industrial % Change (Dollars in millions) 2024 2023 2022 2024 2023 Revenues: Kautex $ 1,891 $ 1,954 $ 1,771 (3)% 10% Textron Specialized Vehicles 1,624 1,887 1,694 (14)% 11% Total revenues 3,515 3,841 3,465 (8)% 11% Cost of sales 2,993 3,221 2,959 (7)% 9% Research and development costs 72 80 71 (10)% 13% Selling and administrative expense 299 312 280 (4)% 11% Segment profit $ 151 $ 228 $ 155 (34)% 47% Profit margin 4.3% 5.9% 4.5% Industrial segment revenues decreased $326 million, 8%, in 2024, compared with 2023, largely due to lower volume and mix.
Industrial % Change (Dollars in millions) 2025 2024 2023 2025 2024 Revenues: Kautex $ 1,883 $ 1,891 $ 1,954 —% (3)% Textron Specialized Vehicles 1,330 1,624 1,887 (18)% (14)% Total revenues 3,213 3,515 3,841 (9)% (8)% Cost of sales 2,733 2,993 3,221 (9)% (7)% Research and development costs 67 72 80 (7)% (10)% Selling and administrative expense 268 299 312 (10)% (4)% Segment profit $ 145 $ 151 $ 228 (4)% (34)% Profit margin 4.5% 4.3% 5.9% Industrial segment revenues decreased $302 million, 9%, in 2025, compared with 2024.
In 2023, cash flows used by financing activities included $1.2 billion of cash paid to repurchase an aggregate of 16.2 million shares of our common stock, partially offset by $348 million of net proceeds from the issuance of long-term debt.
Cash flows used in financing activities in 2025 included $822 million of cash paid to repurchase an aggregate of 10.7 million shares of our common stock and $707 million of payments on long-term debt, partially offset by $991 million of net proceeds from the issuance of long-term debt.
Approximately 28% of our purchase obligations represent purchase orders issued for goods and services to be delivered under firm contracts with the U.S.
Approximately 33% of our purchase obligations represent purchase orders issued for goods and services to be delivered under firm contracts with the U.S. Government for which we have full recourse under customary contract termination clauses.
Assessment of Liquidity and Significant Future Cash Requirements Key information that is utilized in assessing our liquidity is summarized below: (Dollars in millions) December 28, 2024 December 30, 2023 Manufacturing group Cash and equivalents $ 1,386 $ 2,121 Debt 3,247 3,526 Shareholders’ equity 7,204 6,987 Capital (debt plus shareholders’ equity) 10,451 10,513 Net debt (net of cash and equivalents) to capital 21% 17% Debt to capital 31% 34% Finance group Cash and equivalents $ 55 $ 60 Debt 341 348 We believe that our calculations of debt to capital and net debt to capital are useful measures as they provide a summary indication of the level of debt financing (i.e., leverage) that is in place to support our capital structure, as well as to provide an indication of our capacity to add further leverage.
Assessment of Liquidity and Significant Future Cash Requirements Key information that is utilized in assessing our liquidity is summarized below: (Dollars in millions) January 3, 2026 December 28, 2024 Manufacturing group Cash and equivalents $ 1,940 $ 1,386 Debt 3,539 3,247 Shareholders’ equity 7,875 7,204 Capital (debt plus shareholders’ equity) 11,414 10,451 Net debt (net of cash and equivalents) to capital 17% 21% Debt to capital 31% 31% Finance group Cash and equivalents $ 85 $ 55 Debt 339 341 We believe that our calculations of debt to capital and net debt to capital are useful measures as they provide a summary indication of the level of debt financing (i.e., leverage) that is in place to support our capital structure, as well as to provide an indication of our capacity to add further leverage. 26 Table o f Contents We expect to have sufficient cash to meet our needs based on our existing cash balances, the cash we expect to generate from our manufacturing operations and the availability of our existing credit facility.
Reclassification adjustments included in the Consolidated Statements of Cash Flows on page 36 are summarized below: (In millions) 2024 2023 2022 Reclassification adjustments from investing activities to operating activities: Finance receivable originations for Manufacturing group inventory sales $ (109) $ (160) $ (92) Cash received from customers 108 143 127 Other — — 1 Total reclassification adjustments from investing activities to operating activities $ (1) $ (17) $ 36 Under a Support Agreement between Textron and TFC, Textron is required to maintain a controlling interest in TFC.
These captive financing activities, along with all significant intercompany transactions, are reclassified or eliminated from the Consolidated Statements of Cash Flows. 28 Table o f Contents Reclassification adjustments included in the Consolidated Statements of Cash Flows on page 37 are summarized below: (In millions) 2025 2024 2023 Reclassification adjustments from investing activities: Finance receivable originations for Manufacturing group inventory sales $ (183) $ (109) $ (160) Cash received from customers 166 108 143 Total reclassification adjustments from investing activities (17) (1) (17) Reclassification adjustments from financing activities: Dividends received by Manufacturing group from Finance group (25) — — Total reclassification adjustments to cash flows from operating activities $ (42) $ (1) $ (17) Under a Support Agreement between Textron and TFC, Textron is required to maintain a controlling interest in TFC.
We believe this approach yields a discount rate that is consistent with an implied rate of return that an independent investor or market participant would require for an investment in a company having similar risks and business characteristics to the reporting unit being assessed. 28 Table of Contents Based on our annual impairment review, the fair value calculated using the estimates discussed above exceeded the carrying value by an adequate amount for each reporting group.
We believe this approach yields a discount rate that is consistent with an implied rate of return that an independent investor or market participant would require for an investment in a company having similar risks and business characteristics to the reporting unit being assessed.
This section should be read in conjunction with Note 1 to the Consolidated Financial Statements on page 38 , which includes other significant accounting policies. 27 Table of Contents Revenue Recognition A substantial portion of our revenues is related to long-term contracts with the U.S. Government, including those under the U.S.
We believe these policies require our most difficult, subjective and complex judgments in estimating the effect of inherent uncertainties. This section should be read in conjunction with Note 1 to the Consolidated Financial Statements on page 39 , which includes other significant accounting policies. Revenue Recognition A substantial portion of our revenues is related to long-term contracts with the U.S.
The decrease of $252 million in cash flows was largely due to changes in working capital and lower earnings, partially offset by $161 million in lower net tax payments. Net income tax payments were $191 million and $352 million in 2024 and 2023, respectively. Pension contributions were $44 million and $45 million in 2024 and 2023, respectively.
The $298 million increase in cash flows was largely due to higher earnings, lower net income tax payments and changes in working capital. Net income tax payments were $104 million and $191 million in 2025 and 2024, respectively. Pension contributions were $41 million and $44 million in 2025 and 2024, respectively.
Cash flows used in financing activities included payments on long-term and nonrecourse debt of $16 million and $37 million in 2024 and 2023, respectively. 26 Table of Contents Consolidated Cash Flows The consolidated cash flows from continuing operations, after elimination of activity between the borrowing groups, are summarized below: (In millions) 2024 2023 2022 Operating activities $ 1,015 $ 1,267 $ 1,490 Investing activities (284) (317) (447) Financing activities (1,454) (813) (1,091) Consolidated cash flows from operating activities were $1.0 billion in 2024, compared with $1.3 billion in 2023.
Consolidated Cash Flows The consolidated cash flows from continuing operations, after elimination of activity between the borrowing groups, are summarized below: (In millions) 2025 2024 2023 Operating activities $ 1,313 $ 1,015 $ 1,267 Investing activities (207) (284) (317) Financing activities (543) (1,454) (813) Consolidated cash flows from operating activities were $1.3 billion in 2025, compared with $1.0 billion in 2024.
Bell % Change (Dollars in millions) 2024 2023 2022 2024 2023 Revenues: Military aircraft and support programs $ 2,048 $ 1,701 $ 1,740 20% (2)% Commercial helicopters, parts and services 1,531 1,446 1,351 6% 7% Total revenues 3,579 3,147 3,091 14% 2% Cost of sales 2,899 2,392 2,316 21% 3% Research and development costs 97 192 266 (49)% (28)% Selling and administrative expense 213 243 227 (12)% 7% Segment profit $ 370 $ 320 $ 282 16% 13% Profit margin 10.3% 10.2% 9.1% Backlog $ 7,469 $ 4,780 $ 4,781 56% —% Bell’s military aircraft and support programs include a development contract for the U.S.
Bell % Change (Dollars in millions) 2025 2024 2023 2025 2024 Revenues: Military aircraft and support programs $ 2,618 $ 2,048 $ 1,701 28% 20% Commercial helicopters, parts and services 1,664 1,531 1,446 9% 6% Total revenues 4,282 3,579 3,147 20% 14% Cost of sales 3,537 2,899 2,392 22% 21% Research and development costs 153 97 192 58% (49)% Selling and administrative expense 229 213 243 8% (12)% Segment profit $ 363 $ 370 $ 320 (2)% 16% Profit margin 8.5% 10.3% 10.2% Backlog $ 7,795 $ 7,469 $ 4,780 4% 56% Bell’s military aircraft and support programs revenues increased $570 million, 28%, in 2025, compared with 2024, primarily due to higher volume on the MV-75 program and military sustainment programs.
Textron Aviation % Change (Dollars in millions) 2024 2023 2022 2024 2023 Revenues: Aircraft $ 3,374 $ 3,577 $ 3,387 (6)% 6% Aftermarket parts and services 1,910 1,796 1,686 6% 7% Total revenues 5,284 5,373 5,073 (2)% 6% Cost of sales 4,102 4,116 3,905 —% 5% Research and development costs 208 199 191 5% 4% Selling and administrative expense 408 409 417 —% (2)% Segment profit $ 566 $ 649 $ 560 (13)% 16% Profit margin 10.7% 12.1% 11.0% Backlog $ 7,845 $ 7,169 $ 6,387 9% 12% Textron Aviation’s revenues decreased $89 million, 2%, in 2024, compared with 2023, reflecting lower volume and mix of $270 million, which was principally a result of the strike discussed below, partially offset by higher pricing of $181 million.
Textron Aviation % Change (Dollars in millions) 2025 2024 2023 2025 2024 Revenues: Aircraft $ 3,922 $ 3,374 $ 3,577 16% (6)% Aftermarket parts and services 2,033 1,910 1,796 6% 6% Total revenues 5,955 5,284 5,373 13% (2)% Cost of sales 4,637 4,102 4,116 13% —% Research and development costs 214 208 199 3% 5% Selling and administrative expense 410 408 409 —% —% Segment profit $ 694 $ 566 $ 649 23% (13)% Profit margin 11.7% 10.7% 12.1% Backlog $ 7,724 $ 7,845 $ 7,169 (2)% 9% Textron Aviation’s revenues increased $671 million, 13%, in 2025, compared with 2024, reflecting higher aircraft revenues of $548 million and higher aftermarket parts and services revenues of $123 million.
Government for which we have full recourse under customary contract termination clauses. 25 Table of Contents Credit Facilities and Other Sources of Capital Textron has a senior unsecured revolving credit facility for an aggregate principal amount of $1.0 billion, of which $100 million is available for the issuance of letters of credit.
Credit Facilities and Other Sources of Capital On October 16, 2025, Textron entered into a senior unsecured revolving credit facility for an aggregate principal amount of $1.0 billion, of which $100 million is available for the issuance of letters of credit.
In addition to our manufacturing operating cash requirements, future material cash outlays include our contractual combined debt and interest payments for the Manufacturing group of $473 million in 2025, $457 million in 2026, $444 million in 2027 and $2.5 billion thereafter, and for the Finance group of $46 million in 2025, $20 million in 2026, $69 million in 2027 and $507 million thereafter.
In addition to our manufacturing operating cash requirements, future material cash outlays include our contractual combined debt and interest payments for the Manufacturing group of $150 million in 2026, $496 million in 2027, $500 million in 2028 and $3.4 billion thereafter, and for the Finance group of $19 million in 2026, $68 million in 2027, $41 million in 2028 and $466 million thereafter.
Interest Expense, Net Interest expense, net includes interest expense for both the Finance and Manufacturing borrowing groups, with interest on intercompany borrowings eliminated, and interest income earned on cash and equivalents for the Manufacturing borrowing group.
Interest Expense, Net Interest expense, net includes interest expense for both the Finance and Manufacturing borrowing groups, with interest on intercompany borrowings eliminated, and interest income earned on cash and equivalents for the Manufacturing borrowing group. In 2025, interest expense, net increased $29 million, 30%, compared with 2024, primarily due to higher average debt outstanding and lower interest income.
We also make assumptions regarding employee demographic factors such as retirement patterns, mortality, turnover and rate of compensation increases. We evaluate and update these assumptions annually. To determine the weighted-average expected long-term rate of return on plan assets, we consider the current and expected asset allocation, as well as historical and expected returns on each plan asset class.
Key assumptions used in determining these obligations and related expenses or benefits include the expected long-term rates of return on plan assets and discount rates. We also make assumptions regarding employee demographic factors such as retirement patterns, mortality, turnover and rate of compensation increases. We evaluate and update these assumptions annually.
Research and Development Costs Research and development costs decreased $79 million, 14%, in 2024, compared with 2023, largely reflecting the winddown of the Future Attack Reconnaissance Aircraft Program at the Bell segment, partially offset by a $17 million increase at the Textron eAviation segment, largely due to development efforts on hybrid and electric propulsion aircraft.
The higher research and development costs included an increase of $56 million at Bell, largely reflecting lower costs in 2024 due to the wind down of the Future Attack Reconnaissance Aircraft program, partially offset by a decrease of $21 million at the Textron eAviation segment, due to a reduction in costs on certain development projects.
Backlog increased $2.7 billion, 56%, at Bell due to orders in excess of revenues recognized and deliveries, largely related to the FLRAA program discussed above. 23 Table of Contents Textron Systems % Change (Dollars in millions) 2024 2023 2022 2024 2023 Revenues $ 1,241 $ 1,235 $ 1,172 —% 5% Cost of sales 929 925 878 —% 5% Research and development costs 51 53 53 (4)% —% Selling and administrative expense 107 110 109 (3)% 1% Segment profit $ 154 $ 147 $ 132 5% 11% Profit margin 12.4% 11.9% 11.3% Backlog $ 2,594 $ 1,950 $ 2,098 33% (7)% Textron Systems revenues and segment profit increased $6 million and $7 million, respectively, in 2024, compared with 2023.
New orders included a $1.3 billion award for the prototype testing and evaluation phase of the MV-75 program. 24 Table o f Contents Textron Systems % Change (Dollars in millions) 2025 2024 2023 2025 2024 Revenues $ 1,247 $ 1,241 $ 1,235 —% —% Cost of sales 939 929 925 1% —% Research and development costs 45 51 53 (12)% (4)% Selling and administrative expense 88 107 110 (18)% (3)% Segment profit $ 175 $ 154 $ 147 14% 5% Profit margin 14.0% 12.4% 11.9% Backlog $ 3,304 $ 2,594 $ 1,950 27% 33% Textron Systems revenues increased $6 million in 2025, compared with 2024.
The following discussion should be read in conjunction with our Consolidated Financial Statements and related Notes included in Item 8. Financial Statements and Supplementary Data.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 28, 2024. The following discussion should be read in conjunction with our Consolidated Financial Statements and related Notes included in Item 8. Financial Statements and Supplementary Data.
Finance Group Cash Flows The cash flows from continuing operations for the Finance group as presented in our Consolidated Statements of Cash Flows are summarized below: (In millions) 2024 2023 2022 Operating activities $ 8 $ 14 $ (7) Investing activities 3 11 100 Financing activities (16) (37) (216) The Finance group’s cash flows from investing activities primarily included collections on finance receivables totaling $133 million and $169 million in 2024 and 2023, respectively, partially offset by finance receivable originations of $130 million and $160 million, respectively.
Finance Group Cash Flows The cash flows from continuing operations for the Finance group as presented in our Consolidated Statements of Cash Flows are summarized below: (In millions) 2025 2024 2023 Operating activities $ 28 $ 8 $ 14 Investing activities 40 3 11 Financing activities (38) (16) (37) Cash flows from operating activities for the Finance Group were $28 million in 2025, compared with $8 million in 2024.
In 2024 and 2023, investing cash flows included capital expenditures of $364 million and $402 million, respectively, partially offset by net proceeds from corporate-owned life insurance policies of $85 million and $40 million, respectively. Cash flows used by financing activities in 2024 included $1.1 billion of share repurchases and payments on long-term debt of $377 million.
In 2025 and 2024, cash flows used in investing activities included capital expenditures of $383 million and $364 million, respectively, partially offset by net proceeds from corporate-owned life insurance policies of $80 million and $85 million, respectively. Cash flows used in investing activities in 2025 also included $72 million of proceeds from the disposition of non-captive assets.
Segment loss increased $13 million in 2024, compared with 2023, primarily reflecting the higher research and development costs. 24 Table of Contents Finance (In millions) 2024 2023 2022 Revenues $ 50 $ 55 $ 52 Selling and administrative expense (4) (6) 8 Interest expense, net 19 15 13 Segment profit $ 35 $ 46 $ 31 Finance segment revenues decreased $5 million and segment profit decreased $11 million in 2024, compared with 2023.
Finance (In millions) 2025 2024 2023 Revenues $ 75 $ 50 $ 55 Selling and administrative expense 8 (4) (6) Interest expense, net 18 19 15 Segment profit $ 49 $ 35 $ 46 Finance segment revenues increased $25 million and segment profit increased $14 million in 2025, compared with 2024.
Bell's cost of sales increased $507 million, 21%, in 2024, compared with 2023, primarily due to the higher volume and mix discussed above. Bell's research and development costs decreased $95 million, 49%, in 2024, compared with 2023, largely due to the winddown of the Future Attack Reconnaissance Aircraft Program.
Bell's research and development costs increased $56 million, 58%, in 2025, compared with 2024, largely reflecting lower costs in 2024 due to the wind down of the Future Attack Reconnaissance Aircraft program. Bell’s segment profit decreased $7 million, 2%, in 2025, compared with 2024, reflecting higher research and development costs described above, partially offset by higher volume and mix.
The facility expires in October 2027 and provides for two one-year extensions at our option with the consent of lenders representing a majority of the commitments under the facility. At December 28, 2024 and December 30, 2023, there were no amounts borrowed against the facility and there were $9 million of outstanding letters of credit issued under the facility.
The facility expires in October 2030 and provides for two one-year extensions at our option with the consent of lenders representing a majority of the commitments under the facility. The new facility replaces the prior 5-year facility which was scheduled to expire in October 2027.
Selling and administrative expense included recoveries of $10 million and $18 million in 2024 and 2023, respectively. The decrease in segment profit was primarily due to $8 million in lower recoveries of credit losses. Liquidity and Capital Resources Our financings are conducted through two separate borrowing groups.
The increase in revenues and segment profit included $17 million of gains on the disposition of non-captive assets in 2025. Selling and administrative expense increased $12 million in 2025, compared with 2024, largely reflecting lower recoveries of $9 million. Liquidity and Capital Resources Our financings are conducted through two separate borrowing groups.
Accordingly, we do not believe that there is a reasonable possibility that any units might fail the impairment test in the foreseeable future. Retirement Benefits We sponsor funded and unfunded domestic and international pension plans for certain of our employees. Beginning on January 1, 2010, we initiated actions to commence the closure of the pension plans to new entrants.
Retirement Benefits We sponsor funded and unfunded domestic and international pension plans for certain of our employees. Beginning on January 1, 2010, we initiated actions to commence the closure of the pension plans to new entrants. We provide employees hired subsequent to these closures with defined-contribution benefits. Our pension benefit obligations are calculated based on actuarial valuations.
Segment profit for the Industrial segment decreased $77 million, 34%, in 2024, compared with 2023, largely due to a $105 million impact from lower volume and mix, partially offset by $22 million in manufacturing efficiencies and $21 million in lower selling and administrative expense and research and development costs, largely due to cost reduction activities.
Research and development costs decreased $21 million, 33%, due to a reduction in costs on certain development projects. Segment loss decreased $13 million in 2025, compared with 2024, primarily reflecting the lower research and development costs, partially offset by lower volume and mix.
The impact on volume related to the cancellation of the Shadow program in the first quarter of 2024 was largely offset by higher volume on the Ship-to-Shore Connector program. Textron Systems’ backlog increased $644 million, 33%, in 2024, compared with 2023, reflecting orders in excess of revenues recognized and deliveries, which included new contract awards for the Ship-to-Shore Connector program.
Textron Systems’ backlog increased $710 million, 27%, in 2025, compared with 2024, reflecting orders in excess of revenues recognized and deliveries. New orders included $480 million for additional units on the Ship-to-Shore Connector program and $475 million for a five-year contract for ATAC’s U.S. Navy Fighter Jet Services.
Cost of Sales Cost of sales includes cost of products and services sold for the Manufacturing group. In 2024, cost of sales increased $365 million, 3%, compared with 2023.
Cost of Sales Cost of sales includes cost of products and services sold for the Manufacturing group. In 2025, cost of sales increased $904 million, 8%, compared with 2024, largely due to higher net volume and mix and a $281 million impact from inflation, partially offset by the impact from the disposition of the Powersports business.
Bell’s military and support programs revenues increased $347 million, 20%, in 2024, compared with 2023, primarily due to higher volume on the FLRAA program, partially offset by lower volume on the V-22 program. Commercial helicopters, parts and services increased $85 million, 6%. We delivered 172 commercial helicopters in 2024, compared with 171 commercial helicopters in 2023.
Commercial helicopters, parts and services revenues increased $133 million, 9%, primarily due to the mix of aircraft sold and higher pricing. We delivered 169 commercial helicopters in 2025, compared with 172 commercial helicopters in 2024. Bell's cost of sales increased $638 million, 22%, in 2025, compared with 2024, primarily due to higher volume and mix described above.
Textron eAviation % Change (Dollars in millions) 2024 2023 2022 2024 2023 Revenues $ 33 $ 32 $ 16 3% 100% Cost of sales 29 35 18 (17)% 94% Research and development costs 63 46 20 37% 130% Selling and administrative expense 17 14 2 21% 600% Segment loss $ (76) $ (63) $ (24) 21% 163% Textron eAviation segment revenues increased $1 million, 3%, in 2024, compared with 2023.
Industrial's segment profit decreased $6 million, 4%, in 2025, compared with 2024, primarily reflecting lower volume and mix described above, partially offset by the impact from the disposition and a favorable impact from manufacturing efficiencies, which included cost reductions resulting from restructuring activities. 25 Table o f Contents Textron eAviation % Change (Dollars in millions) 2025 2024 2023 2025 2024 Revenues $ 27 $ 33 $ 32 (18)% 3% Cost of sales 27 29 35 (7)% (17)% Research and development costs 42 63 46 (33)% 37% Selling and administrative expense 21 17 14 24% 21% Segment loss $ (63) $ (76) $ (63) (17)% 21% Textron eAviation segment revenues decreased $6 million, 18%, in 2025, compared with 2024, largely due to lower volume and mix.
The repurchase program has no expiration date and there were 15.6 million shares remaining under the program at December 28, 2024. Dividend payments to shareholders totaled $12 million and $16 million in 2024 and 2023, respectively. Due to the timing of our fiscal year-end, we made three dividend payments in 2024, compared with four dividend payments in 2023.
Due to the timing of our fiscal year-end, we made five dividend payments in 2025, compared with three dividend payments in 2024.
Industrial's cost of sales decreased $228 million, 7%, in 2024 compared with 2023, primarily reflecting the impact of lower volume and mix.
Kautex revenues decreased $8 million, reflecting lower volume, partially offset by a favorable impact from foreign exchange rate fluctuations and higher pricing. Industrial's cost of sales decreased $260 million, 9%, in 2025 compared with 2024, principally reflecting the impact from the disposition and lower volume and mix, partially offset by higher inflation of $44 million.
The $262 million decrease in cash flows was largely due to changes in working capital and lower earnings, partially offset by $157 million in lower net tax payments. Net income tax payments were $181 million and $338 million in 2024 and 2023, respectively. Pension contributions were $44 million and $45 million in 2024 and 2023, respectively.
Net income tax payments were $92 million and $181 million in 2025 and 2024, respectively. Pension contributions were $41 million and $44 million in 2025 and 2024, respectively.
Non-service Components of Pension and Postretirement Income, Net Non-service components of pension and postretirement income, net increased by $26 million, 11%, in 2024, compared with 2023. The increase is based on our annual valuation at the end of 2023 and is primarily driven by the impact of actual pension asset returns that exceeded our expected return on plan assets.
Non-service Components of Pension and Postretirement Income, Net Non-service components of pension and postretirement income, net increased by $3 million, 1%, in 2025, compared with 2024.
Textron Aviation’s segment profit decreased $83 million, 13%, in 2024, compared with 2023, primarily due to lower volume and mix and the manufacturing inefficiencies discussed above, partially offset by higher pricing, net of inflation. Textron Aviation’s backlog increased $676 million, 9%, in 2024, reflecting orders in excess of deliveries.
Textron Aviation’s segment profit increased $128 million, 23%, in 2025, compared with 2024, largely due to higher volume and mix and a favorable impact from manufacturing efficiencies, related to idle facilities costs recognized in 2024 resulting from the strike, partially offset by higher warranty costs.
Selling and administrative expense decreased at Bell by $30 million, 12%, in 2024, compared with 2023, primarily due to a gain on a legal settlement recorded in the first quarter of 2024 and lower bid and proposal costs.
Textron Systems’ research and development costs decreased $6 million, 12%, in 2025, compared with 2024, primarily due to a reduction in costs on certain U.S. Government development programs. Textron Systems’ selling and administrative expense decreased $19 million, 18%, in 2025, compared with 2024.
Selling and Administrative Expense Selling and administrative expense decreased $69 million, 6%, in 2024, compared with 2023, primarily reflecting lower compensation expense, which included lower shared-based and incentive compensation and savings from restructuring activities.
Industrial's selling and administrative expense decreased $31 million, 10%, in 2025, compared with 2024, largely reflecting the impact from the disposition.
Removed
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview In 2024, our operating results were adversely impacted by a strike at the Textron Aviation segment. On September 21, 2024, the International Association of Machinists and Aerospace Workers (IAM) District 70, Local Lodge 774 called a strike against Textron Aviation.
Added
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview In 2025, Textron’s revenues increased 8%, compared with 2024, reflecting the impact of higher volume on the MV-75 program at the Bell segment and higher aircraft and aftermarket parts and services revenues at the Textron Aviation segment.
Removed
On October 20, 2024, an agreement was reached on a new five-year labor contract. As a result, our revenues and profit were unfavorably impacted in the second half of 2024 due to delayed aircraft deliveries and manufacturing inefficiencies associated with the labor disruption and the recovery of operating activities.
Added
Segment profit increased 14%, compared with 2024, largely reflecting higher volume and mix at Textron Aviation. Our backlog increased 5% in 2025 to $18.8 billion, which included a $710 million increase at the Textron Systems segment and a $326 million increase at the Bell segment.
Removed
At the Industrial segment, we experienced lower revenues and profit in 2024, largely resulting from a decline in demand in our end markets for Textron Specialized Vehicles products. We are in the process of conducting a strategic review of our powersports product line, as discussed in Note 15 to the Consolidated Financial Statements on page 62 .
Added
Business Environment Changes to the United States trade policy have resulted in new or higher tariffs on goods imported from numerous countries, and some countries have imposed retaliatory tariffs on imports from the United States. We are principally a North American manufacturer and 69% of our 2025 revenues were generated in the U.S.
Removed
At our Bell segment, the ramp up of the FLRAA program contributed to a 14% growth in its revenues for the year. In August, the U.S. Army announced approval of Milestone B for the FLRAA program, establishing it as a program of record and transitioning it to the Engineering and Manufacturing Development phase.
Added
Our aircraft products, subassemblies, parts and components manufactured in Canada and Mexico are largely qualified under the rules of the United States-Mexico-Canada Agreement (USMCA) for preferential treatment on tariffs imposed by the U.S. on imports from Canada and Mexico.
Removed
In the second half of the year, Bell was awarded contracts totaling approximately $3.0 billion for this phase of the program that contributed to a total company backlog increase of $4.0 billion, 29%, to $17.9 billion at the end of 2024.
Added
In addition, our operations outside of North America primarily source materials and components from outside of North America and manufacture products for non-U.S. customers. Many of our businesses also source materials and components from outside of North America. These businesses have been and will continue to be impacted by these imposed U.S. tariffs.
Removed
This backlog increase included growth of $676 million at the Textron Aviation segment, reflecting steady customer demand supported by new products, and $644 million at the Textron Systems segment, which included new contract awards for the Ship-to-Shore Connector program.
Added
In order to mitigate these impacts our businesses have been managing, and will continue to manage, pricing and supply chain optimization strategies. In addition, our aircraft businesses are working through the tariff reconciliation and refund process with the U.S.
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 30, 2023.
Added
Government to recover tariff costs that were previously paid related to materials and components that were subsequently determined to be USMCA compliant. To date, we have not experienced a material adverse impact from these tariffs.
Removed
In November 2023, the Financial Accounting Standards Board issued Accounting Standard Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires a public entity to disclose, on an annual and interim basis, significant segment expenses and other segment items that are regularly provided to the Chief Operating Decision Maker.
Added
We will continue to evaluate the ongoing impact of these tariffs and any further developments or changes in global tariff policies on our business and financial position.
Removed
The new standard is effective for fiscal years beginning after December 15, 2023. We adopted ASU 2023-07 in the fourth quarter of 2024 and have recast management’s discussion and analysis of the results of operations of our company to include a discussion of the additional expense categories.
Added
Manufacturing group revenues increased $1.1 billion in 2025, compared with 2024, largely reflecting an increase of $1.4 billion in product revenues.
Removed
In connection with the adoption of this standard, research and development costs previously included within Cost of products sold are now reported on a separate line in our Consolidated Statements of Operations. Prior period amounts have been recast to conform to the new presentation.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs part of managing this risk, we seek to achieve a prudent balance between floating- and fixed-rate exposures. We continually monitor our mix of these exposures and adjust the mix, as necessary. For our Finance group, we generally limit our risk to changes in interest rates with a strategy of matching floating-rate assets with floating-rate liabilities.
Biggest changeInterest Rate Risk Our financial results are affected by changes in interest rates. As part of managing this risk, we seek to achieve a prudent balance between floating- and fixed-rate exposures. We continually monitor our mix of these exposures and adjust the mix, as necessary.
These contracts generally are used to fix the local currency cost of purchased goods or services or selling prices denominated in currencies other than the functional currency. The notional amount of outstanding foreign currency exchange contracts was $464 million and $478 million at December 28, 2024 and December 30, 2023, respectively.
These contracts generally are used to fix the local currency cost of purchased goods or services or selling prices denominated in currencies other than the functional currency. The notional amount of outstanding foreign currency exchange contracts was $477 million and $464 million at January 3, 2026 and December 28, 2024, respectively.
December 28, 2024 December 30, 2023 ( In millions ) Carrying Value* Fair Value* Sensitivity of Fair Value to a 10% Change Carrying Value* Fair Value* Sensitivity of Fair Value to a 10% Change Manufacturing group Foreign currency exchange risk Foreign currency exchange contracts $ (14) $ (14) $ 31 $ 1 $ 1 $ 30 Interest rate risk Debt (3,164) (2,989) (49) (3,520) (3,342) (54) Finance group Interest rate risk Finance receivables 439 454 9 417 423 9 Debt (341) (311) — (348) (293) (1) * The value represents an asset or (liability). 30 Table of Contents
January 3, 2026 December 28, 2024 ( In millions ) Carrying Value* Fair Value* Sensitivity of Fair Value to a 10% Change Carrying Value* Fair Value* Sensitivity of Fair Value to a 10% Change Manufacturing group Foreign currency exchange risk Foreign currency exchange contracts $ (4) $ (4) $ 34 $ (14) $ (14) $ 31 Interest rate risk Debt (3,459) (3,406) (66) (3,164) (2,989) (49) Finance group Interest rate risk Finance receivables 493 528 12 439 454 9 Debt (339) (312) — (341) (311) — * The value represents an asset or (liability). 31 Table o f Contents
Quantitative Risk Measures In the normal course of business, we enter into financial instruments for purposes other than trading. The financial instruments that are subject to market risk include finance receivables (excluding leases), debt (excluding finance lease obligations) and foreign currency exchange contracts.
The financial instruments that are subject to market risk include finance receivables (excluding leases), debt (excluding finance lease obligations) and foreign currency exchange contracts.
This strategy includes the use of interest rate swap agreements. We had interest rate swap agreements with a total notional amount of $289 million at December 28, 2024 and $210 million at December 30, 2023, which effectively converted certain floating-rate debt to a fixed-rate equivalent.
We had interest rate swap agreements with a total notional amount of $264 million at January 3, 2026 and $289 million at December 28, 2024, which effectively converted certain floating-rate debt to a fixed-rate equivalent. Quantitative Risk Measures In the normal course of business, we enter into financial instruments for purposes other than trading.
Removed
We also may hedge exposures to certain of our foreign currency assets and earnings by funding those asset positions with debt in the same foreign currency so the exposures are naturally offset. Interest Rate Risk Our financial results are affected by changes in interest rates.
Added
For our Finance group, we generally limit our risk to changes in interest rates with a strategy of matching floating-rate assets with floating-rate liabilities. This strategy includes the use of interest rate swap agreements.

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