TEXTRON INC
For the period ended Jun 29, 2024. Filed Jul 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 29, 2024 · Filed Jul 30, 2024
TXT$83.54-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-30; filed 2024-04-25.
0000217346-24-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-29; filed 2024-07-30.
0000217346-24-000084
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 118 previous paragraphs and 136 current paragraphs.
77 unchanged; 34 reworded; 22 added; 7 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 25 previous and 25 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
•Higher Bell revenues of $93 million, largely due to higher military volume of $104 million, primarily related to the FLRAA program, partially offset by lower volume on the V-22 program.
Current report
•Higher Textron Systems revenues of $17 million, largely due to higher volume.
Current report
•Lower Industrial revenues of $112 million, largely due to lower volume and mix of $119 million, principally in the Specialized Vehicles product line.
Current report
•Higher Textron Aviation revenues of $152 million, reflecting higher pricing of $105 million and higher volume and mix of $47 million.
Current report
•Higher Textron Systems revenues of $17 million, largely due to higher volume.
Current report
Interest Expense
Current report
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.
Current report
In the second quarter of 2024, interest expense, net increased $6 million, 32%, compared with the second quarter of 2023, primarily due to an increase in the weighted-average interest rate. In the first half of 2024, interest expense, net increased $6 million, 15%, compared with the first half of 2023, due to an increase in the weighted-average interest rate and higher average debt outstanding, partially offset by higher interest income of $5 million. For the second quarter and first half of 2024, gross interest expense totaled $36 million and $74 million, respectively. Gross interest expense for the second quarter and first half of 2023 totaled $31 million and $63 million, respectively.
Current report
The following factors contributed to the change in Textron Aviation’s revenues for the periods:
Current report
Textron Aviation’s revenues increased $152 million, 6%, in the first half of 2024, compared with the first half of 2023, reflecting higher pricing of $105 million and higher volume and mix of $47 million. The increase in volume and mix includes higher aftermarket volume and a favorable mix of Citation jets, partially offset by lower defense volume. We delivered 78 Citation jets and 64 commercial turboprops in the first half of 2024, compared with 79 Citation jets and 71 commercial turboprops in the first half of 2023.
Current report
Textron Aviation’s operating expenses increased $110 million, 5%, in the first half of 2024, compared with the first half of 2023, largely due to inflation of $69 million and higher volume and mix described above.
Current report
Segment profit at Textron Aviation increased $24 million, 14%, in the second quarter of 2024, compared with the second quarter of 2023, reflecting higher volume and mix described above and $22 million of favorable pricing, net of inflation, partially offset by an unfavorable impact from performance of $33 million.
Current report
Bell’s revenues increased $199 million, 15%, in the first half of 2024, compared with the first half of 2023, reflecting higher volume and mix of $164 million and higher pricing of $35 million. Volume and mix included higher military volume of $199 million, primarily related to the FLRAA program, partially offset by lower volume on the V-22 program. Commercial volume and mix decreased $35 million, as we delivered 50 commercial helicopters in the first half of 2024, compared with 57 commercial helicopters in the first half of 2023.
Current report
Bell’s operating expenses increased $76 million, 12%, and $162 million, 14% in the second quarter and first half of 2024, respectively, compared with the corresponding periods of 2023, primarily due to higher volume and mix described above.
Current report
In the second quarter and first half of 2024, lower research and development costs of $45 million and $55 million, respectively, had a favorable impact on performance and was largely due to the winddown of the Future Attack Reconnaissance Aircraft Program.
Current report
The following factors contributed to the change in Textron Systems’ revenues for the periods:
Current report
Textron Systems' revenues increased $17 million, 6%, and $17 million, 3%, in the second quarter and first half of 2024, respectively, compared with the corresponding periods of 2023, primarily due to higher volume.
Current report
Textron Systems’ operating expenses increased $19 million, 7%, and $15 million, 3%, in the in the second quarter and first half of 2024, respectively, compared with the corresponding periods of 2023, primarily due to higher volume.
Current report
Textron Systems’ segment profit decreased $2 million, 5%, in the second quarter of 2024, compared with the second quarter of 2023, primarily due to an unfavorable impact from performance.
Current report
Textron Systems’ segment profit increased $2 million, 3%, in the first half of 2024, compared with the first half of 2023, largely reflecting higher pricing, net of inflation.
Current report
Industrial segment revenues decreased $112 million, 11%, in the second quarter of 2024, compared with the second quarter of 2023, largely due to lower volume and mix of $119 million, principally in the Specialized Vehicles product line.
Current report
In the first half of 2024, cash flows from operating activities of continuing operations decreased $114 million to $353 million, compared with $467 million in the first half of 2023, largely due to changes in working capital.
Removed paragraphs (7)
Previous report
The following factors contributed to the change in Textron Aviation’s revenues from the prior year quarter:
Previous report
Bell’s operating expenses increased $86 million, 15% in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher volume and mix described above.
Previous report
Textron Systems' revenues were unchanged in the first quarter of 2024, compared with the first quarter of 2023, as higher pricing of $4 million was offset by lower volume of $4 million.
Previous report
Textron Systems’ operating expenses decreased $4 million in the first quarter of 2024, compared with the first quarter of 2023, largely related to lower volume.
Previous report
The following factors contributed to the change in Textron Systems’ segment profit from the prior year quarter:
Previous report
Textron Systems’ segment profit increased $4 million, 12%, in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher pricing, net of inflation of $2 million.
Previous report
In the first quarter of 2024, the net cash outflow from operating activities was $30 million, compared with a net cash inflow of $153 million in the first quarter of 2023. The $183 million decrease in cash flows was largely due to changes in working capital, primarily due to the timing of payments on accounts payable. We expect positive cash flows from operating activities for the full year.
Reworded paragraphs (34)
Previous wording
An analysis of our consolidated operating results is set forth below. A more detailed analysis of our segments’ operating results is provided in the Segment Analysis section on pages 20 to 24.
Current wording
An analysis of our consolidated operating results is set forth below. A more detailed analysis of our segments’ operating results is provided in the Segment Analysis section on pages 21 to 26.
Previous wording
Revenues increased $111 million, 4%, in the first quarter of 2024, compared with the first quarter of 2023. The revenue increase primarily included the following factors:
Current wording
Revenues increased $103 million, 3%, in the second quarter of 2024, compared with the second quarter of 2023. The revenue increase primarily included the following factors:
Previous wording
•Higher Textron Aviation revenues of $39 million, reflecting higher pricing of $48 million, partially offset by lower volume and mix of $9 million.
Current wording
•Higher Textron Aviation revenues of $113 million, reflecting higher pricing of $57 million and higher volume and mix of $56 million.
Previous wording
•Higher Bell revenues of $106 million, largely reflecting higher military volume of $95 million, primarily related to the FLRAA program, partially offset by lower volume on the V-22 and H-1 programs.
Current wording
•Higher Bell revenues of $199 million, reflecting higher military volume of $199 million, primarily related to the FLRAA program, partially offset by lower volume on the V-22 program.
Previous wording
•Lower Industrial revenues of $40 million, due to lower volume and mix of $51 million, principally in the Specialized Vehicles product line, partially offset by higher pricing of $16 million.
Current wording
•Lower Industrial revenues of $152 million, largely due to lower volume and mix of $170 million, principally in the Specialized Vehicles product line, partially offset by higher pricing of $29 million.
Previous wording
Cost of sales includes cost of products and services sold for the Manufacturing group. In the first quarter of 2024, cost of sales increased $83 million, 3%, compared with the first quarter of 2023, largely due to the impact of higher net volume and mix described above and $52 million of inflation.
Current wording
Cost of sales includes cost of products and services sold for the Manufacturing group. Cost of sales increased $93 million, 3%, and $176 million, 3% in the second quarter and first half of 2024, respectively, compared with the corresponding periods of 2023. The increase in both periods included the impact from inflation of $62 million and $116 million, respectively, and higher net volume and mix of $43 million and $105 million, respectively.
Previous wording
Selling and administrative expense increased $11 million, 4%, in the first quarter of 2024, compared with the first quarter of 2023, primarily reflecting higher share-based compensation expense, partially offset by a gain on a legal settlement and a recovery of amounts that were previously written off related to one customer relationship in the Finance segment.
Current wording
Selling and administrative expense increased $4 million, 1%, and $15 million, 3%, in the second quarter and first half of 2024, respectively, compared with the corresponding periods of 2023. The increase in the first half of 2024, was primarily due to higher share-based compensation expense, partially offset by a gain on a legal settlement.
Previous wording
Our effective tax rate for the first quarter of 2024 and 2023 was 15.2% and 15.9%, respectively. In the first quarter of 2024, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the recognition of excess tax benefits related to share-based compensation, the favorable impact of research and development credits, and tax deductions for foreign-derived intangible income. In the first quarter of 2023, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the favorable impact of research and development credits and tax deductions for foreign-derived intangible income.
Current wording
Our effective tax rate for the second quarter and first half of 2023 was 20.1% and 18.3%, respectively. In the first half of 2023, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the favorable impact of research and development credits and tax deductions for foreign-derived intangible income, partially offset by a $7 million provision for withholding taxes due to the planned repatriation of cash related to a non-U.S. jurisdiction.
Previous wording
Textron Aviation’s revenues increased $39 million, 3%, in the first quarter of 2024, compared with the first quarter of 2023, reflecting higher pricing of $48 million, partially offset by lower volume and mix of $9 million. The decrease in volume and mix includes lower commercial turboprop volume, partially offset by higher Citation jet volume. We delivered 36 Citation jets and 20 commercial turboprops in the first quarter of 2024, compared with 35 Citation jets and 34 commercial turboprops in the first quarter of 2023.
Current wording
Textron Aviation’s revenues increased $113 million, 8%, in the second quarter of 2024, compared with the second quarter of 2023, reflecting higher pricing of $57 million and higher volume and mix of $56 million. The increase in volume and mix includes higher commercial turboprop and aftermarket volume, partially offset by lower defense volume. We delivered 42 Citation jets and 44 commercial turboprops in the second quarter of 2024, compared with 44 Citation jets and 37 commercial turboprops in the second quarter of 2023.
Previous wording
Textron Aviation’s operating expenses increased $21 million, 2%, in the first quarter of 2024, compared with the first quarter of 2023, largely reflecting inflation.
Current wording
Textron Aviation’s operating expenses increased $89 million, 7%, in the second quarter of 2024, compared with the second quarter of 2023, largely due to inflation of $35 million and higher volume and mix described above.
Previous wording
The following factors contributed to the change in Textron Aviation’s segment profit from the prior year quarter:
Current wording
The following factors contributed to the change in Textron Aviation’s segment profit for the periods:
Previous wording
Segment profit at Textron Aviation increased $18 million, 14%, in the first quarter of 2024, compared with the first quarter of 2023, primarily due to favorable pricing, net of inflation of $14 million.
Current wording
Segment profit at Textron Aviation increased $42 million, 14%, in the first half of 2024, compared with the first half of 2023, reflecting favorable pricing, net of inflation of $36 million and higher volume and mix, partially offset by an unfavorable impact from performance of $27 million.
Previous wording
The following factors contributed to the change in Bell’s revenues from the prior year quarter:
Current wording
The following factors contributed to the change in Bell’s revenues for the periods:
Previous wording
Bell’s revenues increased $106 million, 17%, in the first quarter of 2024, compared with the first quarter of 2023, reflecting higher volume and mix of $89 million and higher pricing of $17 million. Volume and mix included higher military volume of $95 million, primarily related to the FLRAA program, partially offset by lower volume on the V-22 and H-1 programs. Commercial volume and mix decreased $6 million, as we delivered 18 commercial helicopters in the first quarter of 2024, compared with 22 commercial helicopters in the first quarter of 2023.
Current wording
Bell’s revenues increased $93 million, 13%, in the second quarter of 2024, compared with the second quarter of 2023, reflecting higher volume and mix of $75 million and higher pricing of $18 million. Volume and mix included higher military volume of $104 million, primarily related to the FLRAA program, partially offset by lower volume on the V-22 program. Commercial volume and mix decreased $29 million, as we delivered 32 commercial helicopters in the second quarter of 2024, compared with 35 commercial helicopters in the second quarter of 2023.
Previous wording
The following factors contributed to the change in Bell’s segment profit from the prior year quarter:
Current wording
The following factors contributed to the change in Bell’s segment profit for the periods:
Previous wording
Bell’s segment profit increased $20 million, 33%, in the first quarter of 2024, compared with the first quarter of 2023, largely due to a favorable impact from performance of $30 million, which included $13 million of lower research and development costs, partially offset by lower volume and mix, reflecting the mix of products and services sold in the period.
Current wording
Bell’s segment profit increased $17 million, 26%, in the second quarter of 2024, compared with the second quarter of 2023, largely due to a favorable impact from performance of $39 million, partially offset by lower volume and mix, reflecting the mix of products and services sold in the period.
Previous wording
The following factors contributed to the change in Textron Systems’ revenues from the prior year quarter:
Current wording
The following factors contributed to the change in Textron Systems’ segment profit for the periods:
Previous wording
The following factors contributed to the change in Industrial’s revenues from the prior year quarter:
Current wording
The following factors contributed to the change in Industrial’s revenues for the periods:
Previous wording
Industrial segment revenues decreased $40 million, 4%, in the first quarter of 2024, compared with the first quarter of 2023, largely due to lower volume and mix of $51 million, principally in the Specialized Vehicles product line, partially offset by higher pricing of $16 million in the segment.
Current wording
Industrial segment revenues decreased $152 million, 8%, in the first half of 2024, compared with the first half of 2023, largely due to lower volume and mix of $170 million, principally in the Specialized Vehicles product line, partially offset by higher pricing of $29 million in the segment.
Previous wording
Industrial's operating expenses decreased $28 million, 3%, in the first quarter of 2024, compared with the first quarter of 2023, principally reflecting the impact of lower volume and mix described above.
Current wording
Industrial's operating expenses decreased $75 million, 8%, and $103 million, 6%, in the second quarter and first half of 2024, respectively, compared with the corresponding periods in 2023, principally reflecting the impact of lower volume and mix described above.
Previous wording
The following factors contributed to the change in Industrial’s segment profit from the prior year quarter:
Current wording
The following factors contributed to the change in Industrial’s segment profit for the periods:
Previous wording
Segment profit for the Industrial segment decreased $12 million, 29%, in the first quarter of 2024, compared with the first quarter of 2023, largely due to lower volume and mix of $14 million as described above.
Current wording
Segment profit for the Industrial segment decreased $37 million, 47%, and $49 million, 41%, in the second quarter and first half of 2024, compared with the corresponding periods of 2023, largely due to lower volume and mix described above.
Previous wording
The following factors contributed to the change in Textron eAviation’s revenues from the prior year quarter:
Current wording
The following factors contributed to the change in Textron eAviation’s revenues for the periods:
Previous wording
Textron eAviation segment revenues increased $3 million, in the first quarter of 2024, compared with the first quarter of 2023, primarily reflecting higher volume and mix.
Current wording
Textron eAviation segment revenues decreased $2 million, 18% in the second quarter of 2024, compared with the second quarter of 2023, primarily reflecting lower volume and mix.
Previous wording
Textron eAviation's operating expenses increased $12 million, in the first quarter of 2024, compared with the first quarter of 2023, primarily related to higher research and development costs.
Current wording
Textron eAviation's operating expenses increased $4 million and $16 million, in the second quarter and first half of 2024, respectively, compared with the corresponding periods of 2023, primarily related to higher research and development costs.
Previous wording
The following factors contributed to the change in Textron eAviation’s segment loss from the prior year quarter:
Current wording
The following factors contributed to the change in Textron eAviation’s segment loss for the periods:
Previous wording
Textron eAviation's segment loss increased $9 million in the first quarter of 2024, compared with the first quarter of 2023, largely due to an unfavorable impact from performance and other, primarily reflecting higher research and development costs.
Current wording
Textron eAviation's segment loss increased $6 million and $15 million in the second quarter and first half of 2024, respectively, compared with the corresponding periods of 2023. The increase in the first half of 2024 was largely due to an unfavorable impact from performance and other, primarily reflecting higher research and development costs.
Previous wording
Finance segment revenues increased $3 million in the first quarter of 2024, compared with the first quarter of 2023, and segment profit increased $10 million. The increase in segment profit was largely due to an $8 million recovery of amounts that were previously written off related to one customer relationship. The following table reflects information about the Finance segment’s credit performance related to finance receivables.
Current wording
Finance segment revenues decreased $6 million and $3 million in the second quarter and first half of 2024, respectively, compared with the corresponding periods of 2023. Segment profit decreased $5 million in the second quarter of 2024 and increased $5 million in the first half of 2024, compared with the corresponding periods of 2023. The increase in segment profit in the first half of 2024 was largely due to an $8 million recovery of amounts that were previously written off related to one customer relationship. The following table reflects information about the Finance segment’s credit performance related to finance receivables.
Previous wording
Cash flows used in investing activities in the first quarter of 2024 included $66 million of capital expenditures. Investing activities in the first quarter of 2023 included $62 million of capital expenditures, partially offset by $20 million of net proceeds from corporate-owned life insurance policies.
Current wording
Cash flows used in investing activities included $140 million and $145 million of capital expenditures in the first half of 2024 and 2023, respectively, partially offset by $26 million and $38 million of net proceeds from corporate-owned life insurance policies, respectively.
Previous wording
Cash flows used in financing activities in the first quarter of 2024 included $352 million of payments on long-term debt and $317 million of cash paid to repurchase an aggregate of 3.6 million shares of our common stock. In the first quarter of 2023, cash flows used in financing activities included $377 million of cash paid to repurchase an aggregate of 5.2 million shares of our common stock.
Current wording
Cash flows used in financing activities in the first half of 2024 included $675 million of cash paid to repurchase an aggregate of 7.7 million shares of our common stock and $359 million of payments on long-term debt. In the first half of 2023, cash flows used in financing activities included $650 million of cash paid to repurchase an aggregate of 9.4 million shares of our common stock.
Previous wording
The Finance group’s cash flows from investing activities included collections on finance receivables totaling $47 million and $35 million in the first quarter of 2024 and 2023, respectively, partially offset by finance receivable originations of $28 million and $17 million, respectively. In the first quarter of 2024 and 2023, financing activities included payments on long-term and nonrecourse debt of $13 million and $15 million, respectively.
Current wording
The Finance group’s cash flows from investing activities included collections on finance receivables totaling $78 million and $67 million in the first half of 2024 and 2023, respectively, partially offset by finance receivable originations of $58 million and $63 million, respectively. In the first half of 2024 and 2023, financing activities included payments on long-term and nonrecourse debt of $15 million and $31 million, respectively.
Previous wording
In the first quarter of 2024, the net cash outflow from operating activities was $7 million, compared with a net cash inflow of $163 million in the first quarter of 2023. The $170 million decrease in cash flows was largely due to changes in working capital, primarily due to the timing of payments on accounts payable.
Current wording
In the first half of 2024, cash flows from operating activities of continuing operations decreased $99 million to $361 million, compared with $460 million in the first half of 2023, largely due to changes in working capital, partially offset by a net cash inflow from captive financing activities of $22 million.
Previous wording
Cash flows used in investing activities in the first quarter of 2024 included $66 million of capital expenditures. Investing activities in the first quarter of 2023 included $62 million of capital expenditures, partially offset by $20 million of net proceeds from corporate-owned life insurance policies.
Current wording
Cash flows used in investing activities included $140 million and $145 million of capital expenditures in the first half of 2024 and 2023, respectively, partially offset by $26 million and $38 million of net proceeds from corporate-owned life insurance policies, respectively.
Previous wording
Cash flows used in financing activities in the first quarter of 2024 included $365 million of payments on long-term debt and $317 million of cash paid to repurchase shares of our outstanding common stock. In the first quarter of 2023, cash flows used in financing activities included $377 million of cash paid to repurchase shares of our outstanding common stock.
Current wording
Cash flows used in financing activities in the first half of 2024 included $675 million of cash paid to repurchase shares of our outstanding common stock and $374 million of payments on long-term debt. In the first half of 2023, cash flows used in financing activities included $650 million of cash paid to repurchase shares of our outstanding common stock.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Revenues increased $214 million, 3%, in the first half of 2024, compared with the first half of 2023. The revenue increase primarily included the following factors:
Current report — wording carried from elsewhere
Our effective tax rate for the second quarter and first half of 2024 was 19.5% and 17.7%, respectively. In the second quarter and first half of 2024, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the favorable impact of research and development credits and tax deductions for foreign-derived intangible income.
Current report — wording carried from elsewhere
Bell’s segment profit increased $37 million, 30%, in the first half of 2024, compared with the first half of 2023, largely due to a favorable impact from performance of $69 million, partially offset by lower volume and mix, reflecting the mix of products and services sold in the period.