TEXTRON INC
For the period ended Jan 3, 2026. Filed Feb 11, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Feb 11, 2026
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-K
Period ended 2024-12-28; filed 2025-02-06.
0000217346-25-000017
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-01-03; filed 2026-02-11.
0000217346-26-000006
Item 7. 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 106 previous paragraphs and 105 current paragraphs.
49 unchanged; 33 reworded; 23 added; 23 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 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 (23)
Current report
Business Environment
Current report
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. 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. 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. 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. 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. 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.
Current report
•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.
Current report
•Higher Textron Aviation revenues of $671 million, reflecting higher aircraft revenues of $548 million and higher aftermarket parts and services revenues of $123 million.
Current report
•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.
Current report
Manufacturing group revenues increased $1.1 billion in 2025, compared with 2024, largely reflecting an increase of $1.4 billion in product revenues. The increase in product revenues in 2025 was partially offset by a decrease of $285 million in service revenues, largely related to the classification of revenues for the MV-75 program, which was service-related prior to the transition of the program to the Engineering and Manufacturing Development phase in the third quarter of 2024 when it became product-related.
Current report
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.
Current report
Selling and administrative expense increased $17 million, 1%, in 2025, compared with 2024. The increase included a $21 million impact from inflation, higher share-based compensation expense and lower recoveries at the Finance segment, mostly offset by the impact from the disposition of the Powersports business and a $16 million gain resulting from the early termination of a vendor contract at the Textron Systems segment.
Current report
Non-service components of pension and postretirement income, net increased by $3 million, 1%, in 2025, compared with 2024.
Current report
Textron Aviation’s cost of sales increased $535 million, 13%, in 2025, compared with 2024, largely reflecting higher volume and mix and inflation of $167 million.
Current report
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.
Current report
Bell's cost of sales increased $638 million, 22%, in 2025, compared with 2024, primarily due to higher volume and mix described above.
Current report
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. Bell's profit margin decreased 180 basis points, largely reflecting higher volume on lower margin MV-75 development activities and higher research and development costs.
Current report
As the MV-75 program continues to accelerate, we expect that we will be awarded the long-lead Low-Rate Initial Production (LRIP) phase of the contract in late 2026 or early 2027. Upon award of the LRIP option, which is largely fixed price, we expect to record an unfavorable cumulative catch-up program adjustment, reflecting higher costs than originally anticipated from when the program was bid, in the range of $60 million to $110 million. The overall MV-75 program will continue to generate a positive profit margin after the adjustment.
Current report
Bell's backlog increased $326 million, 4%, in 2025, compared with 2024, due to orders in excess of revenues recognized and deliveries. New orders included a $1.3 billion award for the prototype testing and evaluation phase of the MV-75 program.
Current report
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.
Current report
Textron Systems’ selling and administrative expense decreased $19 million, 18%, in 2025, compared with 2024. The decrease in expense included a $16 million gain resulting from the early termination of a vendor contract in the third quarter of 2025.
Current report
Textron Systems segment profit increased $21 million, 14%, in 2025, compared with 2024, largely due to lower selling and administrative expense as discussed above.
Current report
Industrial segment revenues decreased $302 million, 9%, in 2025, compared with 2024. Textron Specialized Vehicles' revenues decreased $294 million, 18%, largely reflecting a $195 million 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. Kautex revenues decreased $8 million, reflecting lower volume, partially offset by a favorable impact from foreign exchange rate fluctuations and higher pricing.
Current report
Industrial's selling and administrative expense decreased $31 million, 10%, in 2025, compared with 2024, largely reflecting the impact from the disposition.
Current report
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.
Current report
Textron eAviation segment revenues decreased $6 million, 18%, in 2025, compared with 2024, largely due to lower volume and mix. 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.
Current report
Finance segment revenues increased $25 million and segment profit increased $14 million in 2025, compared with 2024. 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.
Removed paragraphs (23)
Previous report
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. 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. 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.
Previous report
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. 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. 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.
Previous report
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. 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. 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.
Previous report
•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.
Previous report
•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.
Previous report
•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.
Previous report
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. The increase in cost was largely due to a $299 million impact from inflation and higher LIFO inventory provision and a $38 million inventory valuation charge to write down inventory to its net realizable value at Textron Specialized Vehicles as discussed in Note 15 to the Consolidated Financial Statements on page 62.
Previous report
Consolidated gross margin as a percentage of Manufacturing revenues decreased 250 basis points in 2024, compared with 2023, primarily due to lower gross margin at the Bell segment, largely due to the mix of contracts discussed above, and at the Textron Aviation segment, reflecting the mix of aircraft sold and manufacturing inefficiencies, largely due to the strike. In addition, higher LIFO inventory provision and the inventory valuation charge noted above accounted for 80 basis points of the decrease.
Previous report
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.
Previous report
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.
Previous report
On September 21, 2024, the IAM District 70, Local Lodge 774 called a strike against Textron Aviation. The strike impacted approximately 5,000 of Textron Aviation’s employees at the manufacturing, parts and distribution and service center facilities in Wichita. On October 20, 2024, Textron Aviation and the IAM reached an agreement on a new five-year labor contract. The strike had a significant adverse impact on Textron Aviation’s ability to meet its production and delivery schedules in the third quarter and continuing into the fourth quarter of 2024. As a result, our revenues and profit were unfavorably impacted in the second half of 2024 by delayed aircraft deliveries and manufacturing inefficiencies associated with the labor disruption and the recovery of operating activities.
Previous report
Textron Aviation’s cost of sales decreased $14 million in 2024, compared with 2023. The impact of lower volume and mix on our cost of sales was offset by $127 million of inflation and $43 million in manufacturing inefficiencies, largely reflecting idle facilities costs resulting from the strike discussed above.
Previous report
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.
Previous report
Textron Aviation’s backlog increased $676 million, 9%, in 2024, reflecting orders in excess of deliveries.
Previous report
Bell’s military aircraft and support programs include a development contract for the U.S. Army's FLRAA program, as well as production, upgrade, and support contracts for the V-22 tiltrotor aircraft and H-1 helicopters. The FLRAA program represents an increasing portion of Bell’s revenues as development activities have ramped. In August 2024, 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. In the second half of 2024, Bell was awarded contracts totaling approximately $3.0 billion for this phase of the program.
Previous report
Bell's cost of sales increased $507 million, 21%, in 2024, compared with 2023, primarily due to the higher volume and mix discussed above.
Previous report
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.
Previous report
Bell’s segment profit increased $50 million, 16%, in 2024, compared with 2023, primarily due to lower research and development costs, as described above, partially offset by an unfavorable impact from mix as volume increased on lower margin FLRAA development activities while volume decreased on higher margin V-22 program revenues.
Previous report
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.
Previous report
Industrial segment revenues decreased $326 million, 8%, in 2024, compared with 2023, largely due to lower volume and mix. Textron Specialized Vehicles' revenues decreased $263 million, 14%, reflecting lower volume, principally in the powersports and personal transportation vehicles products due to reduced demand in their end markets. Kautex revenues decreased $63 million, 3%, largely due to lower volume.
Previous report
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.
Previous report
Textron eAviation segment revenues increased $1 million, 3%, in 2024, compared with 2023. Research and development costs increased $17 million, 37%, largely due to the ramp up of development efforts on hybrid and electric propulsion aircraft. Segment loss increased $13 million in 2024, compared with 2023, primarily reflecting the higher research and development costs.
Previous report
Finance segment revenues decreased $5 million and segment profit decreased $11 million in 2024, compared with 2023. 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.
Reworded paragraphs (33)
Previous wording
Financial highlights for 2024 also include:
Current wording
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. 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. Financial highlights for 2025 also include:
Previous wording
•Generated $1.0 billion of net cash from operating activities from our manufacturing businesses.
Current wording
•Generated $1.3 billion of net cash from operating activities from our manufacturing businesses.
Previous wording
•Invested $491 million in research and development projects and $364 million in capital expenditures.
Current wording
•Invested $521 million in research and development projects and $383 million in capital expenditures.
Previous wording
•Returned $1.1 billion to our shareholders through the repurchase of 12.9 million shares of our common stock.
Current wording
•Returned $822 million to our shareholders through the repurchase of 10.7 million shares of our common stock.
Previous wording
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. 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.
Current wording
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. 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.
Previous wording
Revenues increased $19 million in 2024, compared with 2023, largely due to the following factors:
Current wording
Revenues increased $1.1 billion in 2025, compared with 2024, largely due to the following factors:
Previous wording
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.
Current wording
Research and development costs increased $30 million, 6%, in 2025, compared with 2024. 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.
Previous wording
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 2024, interest expense, net increased $20 million, 26%, compared with 2023, primarily due to an increase in the weighted-average interest rate of our debt and $7 million in lower interest income. For 2024, 2023 and 2022, gross interest expense totaled $146 million, $133 million and $129 million, respectively.
Current wording
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. For 2025, 2024 and 2023, gross interest expense totaled $164 million, $146 million and $133 million, respectively.
Previous wording
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.
Current wording
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.
Previous wording
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 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.
Current wording
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. 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.
Previous wording
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. Government, material changes in revenues related to these contracts are expressed in terms of volume. 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.
Current wording
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, material changes in revenues related to these contracts are expressed in terms of volume. 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. See the Critical Accounting Estimates - Revenue Recognition section in Item 7 for a discussion of the factors that impact our estimated costs.
Previous wording
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. Aircraft revenues decreased $203 million, 6%, due to lower volume and mix, largely from Citation jet and commercial turboprop deliveries, partially offset by higher pricing. We delivered 151 Citation jets and 127 commercial turboprops in 2024, compared with 168 Citation jets and 153 commercial turboprops in 2023. Aftermarket parts and services revenues increased $114 million, 6%, due to higher pricing and volume.
Current wording
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. The increase in aircraft revenues was due to higher volume and mix and higher pricing. The increase in volume and mix is largely due to higher jet and commercial turboprop volume. The higher volume and mix also reflects the recovery from the strike that began in the third quarter of 2024 and continued into the fourth quarter of 2024. We delivered 171 Citation jets and 146 commercial turboprops in 2025, compared with 151 Citation jets and 127 commercial turboprops in 2024. The increase in aftermarket parts and services revenues was due to higher pricing and volume.
Previous wording
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.
Current wording
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. 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.
Previous wording
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.
Current wording
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.
Previous wording
Textron Systems revenues and segment profit increased $6 million and $7 million, respectively, in 2024, compared with 2023. 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.
Current wording
Textron Systems revenues increased $6 million in 2025, compared with 2024. The increase in revenues reflected higher pricing, partially offset by lower volume and mix. The decrease in volume and mix largely reflects the impact of the cancellation of the Shadow program and termination of certain U.S. Government development programs, partially offset by higher volume on the Ship-to-Shore Connector program.
Previous wording
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.
Current wording
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.
Previous wording
Industrial's cost of sales decreased $228 million, 7%, in 2024 compared with 2023, primarily reflecting the impact of lower volume and mix.
Current wording
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.
Previous wording
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. 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.
Current wording
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. 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.
Previous wording
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. Approximately 28% 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.
Current wording
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. 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.
Previous wording
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. We may elect to increase the aggregate amount of commitments under the facility to up to $1.3 billion by designating an additional lender or by an existing lender agreeing to increase its commitment. 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.
Current wording
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. We may elect to increase the aggregate amount of commitments under the facility to up to $1.3 billion by designating an additional lender or by an existing lender agreeing to increase its commitment. 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. At January 3, 2026 and December 28, 2024, there were no amounts borrowed against either facility. At January 3, 2026, there were no letters of credit issued and outstanding under the new facility, and at December 28, 2024, there was a $9 million letter of credit issued and outstanding under the prior facility.
Previous wording
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.
Current wording
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 October 31, 2025, we issued $500 million of SEC-registered fixed-rate notes due in March 2036 with an annual interest rate of 4.95%, and on February 13, 2025, we issued $500 million of SEC-registered fixed-rate notes due in May 2035 with an annual interest rate of 5.50%. On December 31, 2025, we repaid our $350 million 4.00% notes due in March 2026, and on March 3, 2025, we repaid our $350 million 3.875% Notes due in March 2025.
Previous wording
Cash flows from operating activities were $1.0 billion in 2024, compared with $1.3 billion in 2023. 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.
Current wording
Cash flows from operating activities were $1.3 billion in 2025, compared with $1.0 billion in 2024. The $319 million increase in cash flows was primarily due to higher earnings, lower net income tax payments, changes in working capital and a $25 million dividend received from the Finance group. The dividend is included within cash flows from operating activities for the Manufacturing group as it represents a return on investment. 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.
Previous wording
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.
Current wording
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 $16 million of net proceeds from the disposition of the Powersports business as discussed in Note 15 to the Consolidated Financial Statements.
Previous wording
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 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.
Current wording
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. 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.
Previous wording
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. The repurchase program has no expiration date and there were 15.6 million shares remaining under the program at December 28, 2024.
Current wording
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. 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. The new repurchase program has no expiration date and replaced the prior 2023 share repurchase program, which was utilized in 2025 for repurchases.
Previous wording
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.
Current wording
Dividend payments to shareholders totaled $18 million and $12 million in 2025 and 2024, respectively. Due to the timing of our fiscal year-end, we made five dividend payments in 2025, compared with three dividend payments in 2024.
Previous wording
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. 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.
Current wording
Cash flows from operating activities for the Finance Group were $28 million in 2025, compared with $8 million in 2024. The $20 million increase in cash flows was primarily due to higher earnings. The Finance group’s cash flows from investing activities primarily included finance receivable originations of $241 million and $130 million, respectively, and collections on finance receivables totaling $208 million and $133 million in 2025 and 2024, respectively. In 2025, investing cash flows also included $72 million of proceeds from the disposition of non-captive assets. Cash flows used in financing activities included payments on long-term and nonrecourse debt of $13 million and $16 million in 2025 and 2024, respectively. Dividends paid to the Manufacturing group totaled $25 million in 2025.
Previous wording
Consolidated cash flows from operating activities were $1.0 billion in 2024, compared with $1.3 billion in 2023. 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.
Current wording
Consolidated cash flows from operating activities were $1.3 billion in 2025, compared with $1.0 billion in 2024. 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.
Previous wording
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.
Current wording
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.
Previous wording
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 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.
Current wording
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.
Previous wording
Due to the number of years it may take to complete these contracts and the scope and nature of the work required to be performed on the contracts, the estimation of total transaction price and costs at completion is complicated and subject to many variables and, accordingly, is subject to change. In estimating total costs at completion, we are required to make numerous assumptions related to the complexity of design and related development work to be performed; engineering requirements; product performance; subcontractor performance; availability and cost of materials; labor productivity, availability and cost; overhead and capital costs; manufacturing efficiencies; the length of time to complete the contract (to estimate increases in wages and prices for materials); and costs of satisfying offset obligations, among other variables. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our cost projections quarterly or more frequently when circumstances significantly change. 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.
Current wording
Due to the number of years it may take to complete these contracts and the scope and nature of the work required to be performed on the contracts, the estimation of total transaction price and costs at completion is complicated and subject to many variables and, accordingly, is subject to change. In estimating total costs at completion, we are required to make numerous assumptions related to the complexity of design and related development work to be performed; engineering requirements; product performance; subcontractor performance; availability and cost of materials; labor productivity, availability and cost; overhead and capital costs; manufacturing efficiencies; the length of time to complete the contract (to estimate increases in wages and prices for materials); and costs of satisfying offset obligations, among other variables. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our cost projections quarterly or more frequently when circumstances significantly change. 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.
Previous wording
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. 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%. Net periodic benefit income is sensitive to changes in the expected long-term rate of return on plan assets.
Current wording
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. A lower expected rate of return on plan assets will decrease pension income. 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%. Net periodic benefit income is sensitive to changes in the expected long-term rate of return on plan assets.
Previous wording
The discount rate enables us to state expected future benefit payments as a present value on the measurement date, reflecting the current rate at which the pension liabilities could be effectively settled. This rate should be in line with rates for high-quality fixed income investments available for the period to maturity of the pension benefits, which fluctuate as long-term interest rates change. A lower discount rate increases the present value of the benefit obligations and generally decreases pension income. 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. 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.
Current wording
The discount rate enables us to state expected future benefit payments as a present value on the measurement date, reflecting the current rate at which the pension liabilities could be effectively settled. This rate should be in line with rates for high-quality fixed income investments available for the period to maturity of the pension benefits, which fluctuate as long-term interest rates change. A lower discount rate increases the present value of the benefit obligations and generally decreases pension income. 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. 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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.