TEXTRON INC
For the period ended Jul 4, 2026. Filed Jul 28, 2026.
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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.
Jul 4, 2026 · Filed Jul 28, 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-Q
Period ended 2026-04-04; filed 2026-04-30.
0000217346-26-000012
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-04; filed 2026-07-28.
0000217346-26-000036
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 105 previous paragraphs and 125 current paragraphs.
66 unchanged; 36 reworded; 18 added; 3 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 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 (18)
Current report
The U.S. tariffs were imposed under various legal authorities, including the International Emergency Economic Powers Act (IEEPA). On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the IEEPA were not authorized by the statute. During the second quarter of 2026, we submitted refund requests for the IEEPA tariffs and have begun to receive refunds for previously paid tariffs.
Current report
•Higher Textron Aviation revenues of $22 million, reflecting higher aircraft revenues of $17 million and higher aftermarket parts and services revenues of $5 million.
Current report
•Higher Industrial revenues of $9 million, reflecting higher revenues of $17 million at Kautex, partially offset by lower revenues of $8 million at Textron Specialized Vehicles.
Current report
Revenues increased $500 million, 7%, in the first half of 2026, compared with the first half of 2025. The revenue increase primarily included the following factors:
Current report
Research and development costs decreased $21 million, 15%, in the second quarter of 2026, compared with the second quarter of 2025, largely due to a decrease of $11 million at the Bell segment, reflecting a reduction in costs on several programs, and a decrease of $6 million at the Textron Systems segment, due to a reduction in costs on certain U.S. Government development programs.
Current report
Textron Aviation’s revenues increased $22 million, 1%, in the second quarter of 2026, compared with the second quarter of 2025, reflecting higher aircraft revenues of $17 million and higher aftermarket parts and services revenues of $5 million. The increase in aircraft revenues was due to higher pricing, partially offset by lower volume and mix. The decrease in volume and mix largely reflected lower Citation jet and defense volume, partially offset by higher commercial turboprop volume. We delivered 40 Citation jets and 44 commercial turboprops in the second quarter of 2026, compared with 49 Citation jets and 34 commercial turboprops in the second quarter of 2025.
Current report
Textron Aviation's segment profit decreased $5 million, 3%, in the second quarter of 2026, compared with the second quarter of 2025, primarily due to an unfavorable impact from manufacturing inefficiencies and lower aircraft volume and mix, partially offset by lower warranty costs.
Current report
Bell’s military aircraft and support programs revenues increased $47 million, 7%, in the second quarter of 2026, compared with the second quarter of 2025, largely due to higher volume on H-1 production and the MV-75 program. Commercial helicopters, parts and services revenues increased $11 million, 3%, in the second quarter of 2026, compared with the second quarter of 2025, primarily due to higher pricing. We delivered 36 commercial helicopters in the second quarter of 2026, compared with 32 commercial helicopters in the second quarter of 2025.
Current report
Bell's research and development costs decreased $11 million, 29%, and $13 million, 17%, in the second quarter and first half of 2026, respectively, compared with the corresponding periods of 2025, reflecting a reduction in costs on several programs.
Current report
Bell’s segment profit decreased $5 million, 6%, in the second quarter of 2026, compared with the second quarter of 2025, and its profit margin decreased 90 basis points, primarily due to an unfavorable impact from contract performance and from the mix of military programs described above, partially offset by lower research and development costs.
Current report
The U.S. Government is pursuing an ATR request for $350 million in additional fiscal 2026 funding for the MV-75 program. The U.S. Government has advised that it is not obligated to reimburse Bell for costs incurred beyond currently obligated funding and performance beyond the allotted funds is at Bell’s own risk. If the additional funding is received, it will be used to offset the costs incurred on the program in the third quarter of 2026. Subsequent to the end of our second quarter, in mid-July 2026, Bell substantially exhausted all available fiscal 2026 program funding and has continued performing work at its own risk. If additional funding is not approved and obligated, we could incur unreimbursed costs and recognize an unfavorable cumulative catch-up program adjustment of up to approximately $120 million, assuming $350 million in costs incurred in excess of available funding which would also negatively impact our cash flows by approximately $350 million. For additional information, see the MV-75 Program - Funding section in Note 12. Commitments and Contingencies.
Current report
Textron Systems’ research and development costs decreased $6 million, 38%, and $7 million, 27%, in the second quarter and first half of 2026, respectively, compared with the corresponding periods of 2025, primarily due to a reduction in costs on certain U.S. Government development programs.
Current report
Industrial segment revenues increased $3 million in the first half of 2026, compared with the first half of 2025. Kautex revenues increased $53 million, 6%, due to a favorable impact of $28 million from foreign exchange rate fluctuations, higher pricing and higher volume and mix. Textron Specialized Vehicles' revenues decreased $50 million, 7%, largely reflecting a $61 million impact from the disposition of the Powersports business, partially offset by higher pricing.
Current report
Industrial's segment profit increased $5 million, 9%, in the second quarter of 2026, compared with the second quarter of 2025, primarily due to higher pricing, net of inflation, partially offset by lower volume and mix. Pricing, net of inflation includes $21 million of tariffs recovered in the second quarter of 2026 that were previously imposed under the IEEPA as described in the Business Environment section on page 21.
Current report
Finance segment revenues decreased $1 million in both the second quarter and first half of 2026, compared with the corresponding periods of 2025. Segment profit increased $2 million and $4 million in the second quarter and first half of 2026, respectively, compared with the corresponding periods of 2025, primarily related to recovery of amounts that were previously written off.
Current report
In the first half of 2026, cash flows from operating activities decreased $153 million to $128 million, compared with $281 million in the first half of 2025, largely due to changes in working capital, partially offset by $62 million in lower net income tax payments.
Current report
In the first half of 2026, cash flows from operating activities decreased $77 million to $187 million, compared with $264 million in the first half of 2025, largely due to changes in working capital, partially offset by a net cash inflow of $72 million from captive financing activities and $64 million in lower net income tax payments.
Current report
•The risk that additional U.S. Government fiscal 2026 funding for the MV-75 program is not approved and obligated pursuant to a contract modification and we incur significant unreimbursed costs.
Removed paragraphs (3)
Previous report
Finance segment revenues were unchanged and segment profit increased $2 million in the first quarter of 2026, compared with the first quarter of 2025.
Previous report
In the first quarter of 2026, the net cash outflow from operating activities was $107 million, compared with a net cash outflow of $114 million in the first quarter of 2025. We expect positive cash flows from operating activities for the full year.
Previous report
In the first quarter of 2026, the net cash outflow from operating activities was $117 million, compared with a net cash outflow of $124 million in the first quarter of 2025.
Reworded paragraphs (36)
Previous wording
Beginning in 2025, the United States has made various changes to its trade policy resulting in new or higher tariffs on goods imported from numerous countries. These tariffs were imposed under various legal authorities, including the International Emergency Economic Powers Act (IEEPA). We are principally a North American manufacturer and 69% of our 2025 revenues were generated in the U.S. Many of our aircraft materials and components qualify under the rules of the United States-Mexico-Canada Agreement 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. To date, we have not experienced a material adverse impact from these tariffs.
Current wording
Since early 2025, the United States has made various changes to its trade policy resulting in new or higher tariffs on goods imported from numerous countries. We are principally a North American manufacturer and 69% of our 2025 revenues were generated in the U.S. Many of our aircraft materials and components qualify under the rules of the United States-Mexico-Canada Agreement 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 with operations in North America 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. To date, we have not experienced a material adverse impact from these tariffs.
Previous wording
On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the IEEPA were not authorized by the statute. While we currently believe the impact of this ruling on our financial results is not material, we will continue to evaluate its potential effects, along with any further developments or changes in global tariff policies on our business and financial position.
Current wording
We will continue to evaluate the ongoing impact of tariffs and any further developments or changes in global tariff policies on our business and financial position.
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 21 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 23 to 26.
Previous wording
Revenues increased $389 million, 12%, in the first quarter of 2026, compared with the first quarter of 2025. The revenue increase primarily included the following factors:
Current wording
Revenues increased $111 million, 3%, in the second quarter of 2026, compared with the second quarter of 2025. The revenue increase primarily included the following factors:
Previous wording
•Higher Textron Systems revenues of $39 million, largely due to higher volume.
Current wording
•Higher Textron Systems revenues of $23 million, largely due to higher volume.
Previous wording
•Higher Textron Aviation revenues of $269 million, reflecting higher aircraft revenues of $221 million, largely due to higher Citation jet and commercial turboprop volume, and higher aftermarket parts and services revenues of $48 million.
Current wording
•Higher Textron Aviation revenues of $291 million, reflecting higher aircraft revenues of $238 million, largely due to higher volume and mix, and higher aftermarket parts and services revenues of $53 million.
Previous wording
•Higher Bell revenues of $87 million, due to higher military aircraft and support programs revenues of $161 million, largely from the MV-75 program, partially offset by lower volume on V-22 production and on military sustainment programs. The increase in military revenues was partially offset by lower commercial revenues of $74 million.
Current wording
•Higher Bell revenues of $145 million, due to higher military aircraft and support programs revenues of $208 million, largely from the MV-75 program, partially offset by lower commercial revenues of $63 million.
Previous wording
•Lower Industrial revenues of $6 million, reflecting lower revenues of $42 million at Textron Specialized Vehicles, largely due to the impact from the disposition of the Powersports business in April 2025, partially offset by higher revenues of $36 million at Kautex, primarily due to a favorable impact from foreign exchange rate fluctuations and higher volume and mix.
Current wording
•Higher Industrial revenues of $3 million, reflecting higher revenues of $53 million at Kautex, primarily due to a favorable impact from foreign exchange rate fluctuations, higher pricing and higher volume and mix, largely offset by lower revenues of $50 million at Textron Specialized Vehicles, mostly due to the impact from the disposition of the Powersports business in April 2025, partially offset by higher pricing.
Previous wording
Cost of sales includes cost of products and services sold for the Manufacturing group. Cost of sales increased $351 million, 13%, in the first quarter of 2026, compared with the first quarter of 2025, largely due to higher net volume and mix of $287 million and an $81 million impact from inflation and higher LIFO inventory provision, partially offset by the impact from the Powersports disposition. Gross margin as a percentage of Manufacturing revenues decreased 100 basis points in the first quarter of 2026, primarily due to lower margin at the Bell segment.
Current wording
Cost of sales increased $477 million, 8%, in the first half of 2026, compared with the first half of 2025, largely due to higher net volume and mix of $332 million and a $148 million impact from inflation and higher LIFO inventory provision, partially offset by the impact from the Powersports disposition. Gross margin as a percentage of Manufacturing revenues decreased 100 basis points in the first half of 2026, primarily due to lower margin at the Bell segment.
Previous wording
Research and development costs decreased $12 million, 9%, in the first quarter of 2026, compared with the first quarter of 2025, primarily reflecting a $7 million decrease in certain development projects reported within corporate expenses as discussed in the Segment Analysis section below.
Current wording
Research and development costs decreased $33 million, 12%, in the first half of 2026, compared with the first half of 2025, largely reflecting lower costs of $13 million and $7 million at the Bell and Textron Systems segments, respectively, as described above, along with $9 million in lower costs related to certain development projects reported within corporate expenses as discussed in the Segment Analysis section below.
Previous wording
Selling and administrative expense increased $23 million, 8%, in the first quarter of 2026, compared with the first quarter of 2025, primarily due to higher share-based and other compensation expense.
Current wording
Selling and administrative expense increased $8 million, 3%, and $31 million, 5%, in the second quarter and first half of 2026, respectively, compared with the corresponding periods of 2025. The increase in selling and administrative expense in the first half of 2026 was primarily due to higher share-based and other compensation expense.
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 the first quarter of 2026, interest expense, net increased $5 million, 17%, compared with the first quarter of 2025, primarily due to higher average debt outstanding. Gross interest expense totaled $43 million and $38 million in the first quarter of 2026 and 2025, 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 the second quarter and first half of 2026, interest expense, net increased $2 million, 6%, and $7 million, 12%, respectively, compared with the corresponding periods of 2025, primarily due to higher average debt outstanding. Gross interest expense totaled $40 million and $39 million in the second quarter of 2026 and 2025, respectively, and $83 million and $77 million in the first half of 2026 and 2025, respectively.
Previous wording
Our effective tax rate for the first quarter of 2026 and 2025 was 17.6% and 14.1%, respectively. In the first quarter of 2026, the effective tax rate was lower than the U.S. federal statutory rate of 21%, primarily due to the favorable impact of research and development credits and tax deductions for foreign-derived deduction eligible income, which replaced foreign-derived intangible income beginning in 2026. In the first quarter of 2025, 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 was 18.4% and 18.0% for the second quarter and first half of 2026, respectively. The effective tax rate was lower than the U.S. federal statutory rate of 21%, primarily due to the favorable impact of research and development credits and tax deductions for foreign-derived deduction eligible income, which replaced foreign-derived intangible income beginning in 2026.
Previous wording
Textron Aviation’s revenues increased $269 million, 22%, in the first quarter of 2026, compared with the first quarter of 2025, reflecting higher aircraft revenues of $221 million and higher aftermarket parts and services revenues of $48 million. The increase in aircraft revenues was primarily due to higher volume and mix, largely reflecting higher Citation jet and commercial turboprop volume. We delivered 37 Citation jets and 35 commercial turboprops in the first quarter of 2026, compared with 31 Citation jets and 30 commercial turboprops in the first quarter of 2025. The increase in aftermarket parts and services revenues was due to higher volume and pricing.
Current wording
Textron Aviation’s revenues increased $291 million, 11%, in the first half of 2026, compared with the first half of 2025, reflecting higher aircraft revenues of $238 million and higher aftermarket parts and services revenues of $53 million. The increase in aircraft revenues was primarily due to higher volume and mix, largely reflecting higher commercial turboprop volume and the mix of Citation jets sold in the period, partially offset by lower defense volume. We delivered 77 Citation jets and 79 commercial turboprops in the first half of 2026, compared with 80 Citation jets and 64 commercial turboprops in the first half of 2025. The increase in aftermarket parts and services revenues was primarily due to higher pricing.
Previous wording
Textron Aviation’s cost of sales increased $220 million, 24%, in the first quarter of 2026, compared with the first quarter of 2025, primarily reflecting higher aircraft volume and inflation of $45 million.
Current wording
Textron Aviation’s cost of sales increased $26 million, 2%, in the second quarter of 2026, compared with the second quarter of 2025, primarily reflecting inflation of $47 million, partially offset by lower aircraft volume. Cost of sales increased $246 million, 12%, in the first half of 2026, compared with the first half of 2025, primarily reflecting higher aircraft volume and inflation of $92 million.
Previous wording
Textron Aviation's selling and administrative expense increased $21 million, 21%, in the first quarter of 2026, compared with the first quarter of 2025, primarily due to higher compensation expense.
Current wording
Textron Aviation's selling and administrative expense increased $2 million, 2%, in the second quarter of 2026, and increased $23 million, 11%, in the first half of 2026, compared with the corresponding periods of 2025. The increase in the first half of 2026 was primarily due to higher compensation expense.
Previous wording
Textron Aviation's segment profit increased $32 million, 26%, in the first quarter of 2026, compared with the first quarter of 2025, primarily due to higher aircraft volume and mix, partially offset by higher selling and administrative expense and warranty costs.
Current wording
Textron Aviation's segment profit increased $27 million, 9%, in the first half of 2026, compared with the first half of 2025, primarily due to higher aircraft volume and mix, partially offset by an unfavorable impact from manufacturing inefficiencies and higher selling and administrative expense described above.
Previous wording
Bell’s military aircraft and support programs revenues increased $161 million, 25%, in the first quarter of 2026, compared with the first quarter of 2025, largely due to higher volume on the MV-75 program, partially offset by lower volume on V-22 production and on military sustainment programs. Commercial helicopters, parts and services revenues decreased $74 million, 21%, in the first quarter of 2026, compared with the first quarter of 2025, primarily due to lower volume and mix as we delivered 20 commercial helicopters in the first quarter of 2026, compared with 29 commercial helicopters in the first quarter of 2025.
Current wording
Bell’s military aircraft and support programs revenues increased $208 million, 16%, in the first half of 2026, compared with the first half of 2025, reflecting higher volume on the MV-75 program and H-1 production, partially offset by lower volume on V-22 production and on military sustainment programs. Commercial helicopters, parts and services revenues decreased $63 million, 9%, in the first half of 2026, compared with the first half of 2025, primarily due to lower volume and mix. We delivered 56 commercial helicopters in the first half of 2026, compared with 61 commercial helicopters in the first half of 2025.
Previous wording
Bell’s cost of sales increased $101 million, 13%, in the first quarter of 2026, compared with the first quarter of 2025, largely due to higher net volume and mix described above.
Current wording
Bell’s cost of sales increased $76 million, 9%, and $177 million, 11%, in the second quarter and first half of 2026, respectively, compared with the corresponding periods of 2025, largely due to higher net volume and mix described above.
Previous wording
Bell's segment profit decreased $18 million, 20%, in the first quarter of 2026, compared with the first quarter of 2025, and its profit margin decreased 250 basis points, largely reflecting an unfavorable impact from the mix of military programs described above and lower commercial volume and mix.
Current wording
Bell's segment profit decreased $23 million, 14%, in the first half of 2026, compared with the first half of 2025, and its profit margin decreased 160 basis points, largely reflecting an unfavorable impact from the mix of military programs described above, lower commercial volume and mix and contract performance, partially offset by lower research and development costs.
Previous wording
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 wording
As the MV-75 program continues to progress, 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. We expect the overall MV-75 program to continue to generate a positive profit margin after the adjustment.
Previous wording
Textron Systems’ revenues increased $39 million, 13%, in the first quarter of 2026, compared with the first quarter of 2025, largely due to higher volume on the Ship-to-Shore Connector program and military training and support services provided by Airborne Tactical Advantage Company (ATAC), partially offset by lower net volume on other programs.
Current wording
Textron Systems’ revenues increased $62 million, 10%, in the first half of 2026, compared with the first half of 2025, primarily due to higher volume on military training and support services provided by ATAC and the Ship-to-Shore Connector program.
Previous wording
Textron Systems’ cost of sales increased $37 million, 17%, in the first quarter of 2026, compared with the first quarter of 2025, primarily due to higher net volume described above.
Current wording
Textron Systems’ cost of sales increased $23 million, 9%, and $60 million, 13%, in the second quarter and first half of 2026, respectively, compared with the corresponding periods of 2025, primarily due to higher net volume described above.
Previous wording
Textron Systems’ segment profit increased $4 million, 11%, in the first quarter of 2026, compared with the first quarter of 2025, largely due to higher net volume described above.
Current wording
Textron Systems’ segment profit increased $4 million, 10%, in the second quarter of 2026 compared with the second quarter of 2025, primarily due to lower research and development costs. Segment profit increased $8 million, 10%, in the first half of 2026, compared with the first half of 2025, primarily due to higher volume described above and lower research and development costs.
Previous wording
Industrial segment revenues decreased $6 million, 1%, in the first quarter of 2026, compared with the first quarter of 2025. Textron Specialized Vehicles' revenues decreased $42 million, 12%, largely reflecting a $55 million impact from the disposition of the Powersports business in April 2025. Kautex revenues increased $36 million, 8%, primarily due to a favorable impact of $20 million from foreign exchange rate fluctuations and higher volume and mix.
Current wording
Industrial segment revenues increased $9 million, 1%, in the second quarter of 2026, compared with the second quarter of 2025. Kautex revenues increased $17 million, 4%, largely due to a favorable impact from pricing and from foreign exchange rate fluctuations of $8 million. Textron Specialized Vehicles' revenues decreased $8 million, 2%, reflecting lower volume and mix and the impact from the disposition of the Powersports business in April 2025, partially offset by higher pricing.
Previous wording
Industrial's cost of sales decreased $17 million, 3%, in the first quarter of 2026, compared with the first quarter of 2025, primarily reflecting the impact from the disposition, partially offset by higher volume and mix discussed above and an unfavorable impact from foreign exchange rate fluctuations.
Current wording
Industrial's cost of sales decreased $1 million and $18 million, 1%, in the second quarter and first half of 2026, respectively, compared with the corresponding periods of 2025. The decrease in the first half of 2026 primarily reflected the impact from the disposition, partially offset by an unfavorable impact from foreign exchange rate fluctuations and higher net volume and mix discussed above.
Previous wording
Industrial's segment profit increased $10 million, 33%, in the first quarter of 2026, compared with the first quarter of 2025, primarily due to manufacturing efficiencies, which included the benefit of cost reductions resulting from prior year restructuring activities.
Current wording
Industrial's segment profit increased $15 million, 18%, in the first half of 2026, compared with the first half of 2025, primarily due to manufacturing efficiencies, which included the benefit of cost reductions resulting from prior year restructuring activities, and higher pricing, net of inflation, partially offset by lower net volume and mix. Pricing, net of inflation includes $21 million of tariff recoveries as described above.
Previous wording
Cash flows for the Manufacturing group as presented in our Consolidated Statements of Cash Flows are summarized below:
Current wording
Cash flows from continuing operations for the Manufacturing group as presented in our Consolidated Statements of Cash Flows are summarized below:
Previous wording
Cash flows used in investing activities included $133 million and $56 million of capital expenditures in the first quarter of 2026 and 2025, respectively. In the first quarter of 2025, cash flows used in investing activities also included $31 million of net proceeds from corporate-owned life insurance policies.
Current wording
Cash flows used in investing activities included $228 million and $134 million of capital expenditures in the first half of 2026 and 2025, respectively. In the first half of 2025, cash flows used in investing activities also included $57 million of net proceeds from corporate-owned life insurance policies and $16 million of net proceeds from the disposition of the Powersports business.
Previous wording
Cash flows used in financing activities in the first quarter of 2026 included $168 million of cash paid to repurchase an aggregate of 1.8 million shares of our common stock and $74 million of payments on long-term debt, partially offset by $56 million of proceeds from the exercise of stock options granted to employees. In the first quarter of 2025, cash flows used in financing activities included $352 million of payments on long-term debt and $215 million of cash paid to repurchase an aggregate of 2.9 million shares of our common stock, largely offset by $495 million of net proceeds from the issuance of long-term debt.
Current wording
Cash flows used in financing activities in the first half of 2026 included $377 million of cash paid to repurchase an aggregate of 4.1 million shares of our common stock and $75 million of payments on long-term debt, partially offset by $61 million of proceeds from the exercise of stock options granted to employees. In the first half of 2025, cash flows used in financing activities included $429 million of cash paid to repurchase an aggregate of 5.8 million shares of our common stock and $353 million of payments on long-term debt, partially offset by $495 million of net proceeds from the issuance of long-term debt.
Previous wording
The Finance group’s cash flows from investing activities included finance receivable originations of $49 million and $33 million in the first quarter of 2026 and 2025, respectively, and collections on finance receivables totaling $34 million and $29 million, respectively. In the first quarter of 2026, investing cash flows also included $24 million of proceeds from the disposition of non-captive assets.
Current wording
The Finance group’s cash flows from investing activities included finance receivable originations of $71 million and $111 million in the first half of 2026 and 2025, respectively, and collections on finance receivables totaling $115 million and $81 million, respectively. In the first half of 2026 and 2025, investing cash flows also included $24 million and $59 million of proceeds from the disposition of non-captive assets, respectively. In the first half of 2025, financing activities included payments on long-term and nonrecourse debt of $11 million.
Previous wording
The consolidated cash flows after elimination of activity between the borrowing groups, are summarized below:
Current wording
The consolidated cash flows from continuing operations after elimination of activity between the borrowing groups, are summarized below:
Previous wording
Cash flows used in investing activities in the first quarter of 2026 included $133 million of capital expenditures, partially offset by $24 million of proceeds from the disposition of non-captive assets. In the first quarter of 2025, cash flows used in investing activities included $56 million of capital expenditures, partially offset by $31 million of net proceeds from corporate-owned life insurance policies.
Current wording
Cash flows used in investing activities in the first half of 2026 included $228 million of capital expenditures, partially offset by $24 million of proceeds from the disposition of non-captive assets. In the first half of 2025, cash flows from investing activities included $59 million of proceeds from the disposition of non-captive assets, $57 million of net proceeds from corporate-owned life insurance policies and $16 million of net proceeds from the disposition of the Powersports business, offset by $134 million of capital expenditures.
Previous wording
Cash flows used in financing activities in the first quarter of 2026 included $168 million of cash paid to repurchase shares of our outstanding common stock and $74 million of payments on long-term debt, partially offset by $56 million of proceeds from the exercise of stock options granted to employees. In the first quarter of 2025, cash flows used in financing activities included $355 million of payments on long-term and non-recourse debt and $215 million of cash paid to repurchase shares of our outstanding common stock, largely offset by $495 million of net proceeds from the issuance of long-term debt.
Current wording
Cash flows used in financing activities in the first half of 2026 included $377 million of cash paid to repurchase shares of our outstanding common stock and $75 million of payments on long-term debt and nonrecourse debt, partially offset by $61 million of proceeds from the exercise of stock options granted to employees. In the first half of 2025, cash flows used in financing activities included $429 million of cash paid to repurchase shares of our outstanding common stock and $364 million of payments on long-term and nonrecourse debt, partially offset by $495 million of net proceeds from the issuance of long-term debt.
Previous wording
•Uncertainty related to the Company's ability to satisfy the necessary conditions to consummate the separation of its Industrial segment; and
Current wording
•Uncertainty related to the Company's ability to satisfy the necessary conditions to consummate the separation of its Industrial segment;
Previous wording
•Risks related to the Company’s ability to effect a successful separation and realize the anticipated benefits of the separation on a timely basis or at all.
Current wording
•Risks related to the Company’s ability to effect a successful separation and realize the anticipated benefits of the separation on a timely basis or at all; and
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
•Higher Bell revenues of $58 million due to higher military aircraft and support programs revenues of $47 million and higher commercial revenues of $11 million.
Current report — wording carried from elsewhere
•Higher Textron Systems revenues of $62 million, largely due to higher volume.
Current report — wording carried from elsewhere
Cost of sales includes cost of products and services sold for the Manufacturing group. Cost of sales increased $126 million, 4%, in the second quarter of 2026, compared with the second quarter of 2025, primarily due to a $67 million impact from inflation and higher net volume and mix of $44 million. Gross margin as a percentage of Manufacturing revenues decreased 100 basis points in the second quarter of 2026, primarily due to lower margin at the Bell segment.
Current report — wording carried from elsewhere
Our effective tax rate for the second quarter and first half of 2025 was 18.6% and 16.6%, respectively. The effective tax rate was lower than the U.S. federal statutory rate of 21%, primarily due to the favorable impact of research and development credits and tax deductions for foreign-derived intangible income.
Current report — wording carried from elsewhere
Textron Systems’ revenues increased $23 million, 7%, in the second quarter of 2026, compared with the second quarter of 2025, primarily due to higher volume on armored land vehicles and military training and support services provided by Airborne Tactical Advantage Company (ATAC).