Textron (TXT) 10-K risk factor changes: FY2023 vs FY2022

Similarly, there is uncertainty as to when or whether our existing commercial backlog for aircraft products will convert to revenues as the conversion depends on production capacity, customer needs and credit [removed: availability.][added: availability, among other factors.]

During [removed: 2022,] [added: 2023,] we derived approximately [removed: 22%] [added: 21%] of our revenues from sales to a variety of U.S. Government entities.

The funding of [removed: these] [added: U.S. Government defense] programs is subject to congressional appropriation decisions and the U.S. Government budget process which includes enacting relevant legislation, such as appropriations bills and accords on the debt ceiling.

Further uncertainty with respect to ongoing programs could also result in the event that the U.S. Government finances its operations through temporary funding measures such as “continuing resolutions” rather than full-year [removed: appropriations.][added: appropriations or if a government shutdown were to occur and were to continue for an extended period of time.]

Significant changes in national and international [removed: policies or] priorities for defense [removed: spending, as well as the potential impact of sequestration,] [added: spending] could affect the funding, or the timing of funding, of our programs, which could negatively impact our results of operations and financial condition.

We also enter into “fee for service” contracts with the U.S. Government where we retain ownership of, and consequently the risk of loss on, aircraft and equipment [removed: supplied to perform under these contracts.]

The U.S. Government relies upon competitive contract award types, including indefinite-delivery, indefinite-quantity, other transaction agreements and multi-award contracts, which [removed: have the potential to] [added: often] create increased pricing [removed: pressure, as well as to] [added: pressure and] increase our cost by requiring that we submit multiple bids or share in costs.

Further, the competitive bidding process is [removed: costly] [added: costly, in some instances requires significant research] and [added: development and/or engineering efforts to participate and] demands employee and managerial time to prepare bids and proposals for contracts that may not be awarded to us or may be split among competitors.

Even if we are successful in obtaining an award, we [added: have in the past and] may [added: in the future] encounter bid protests from unsuccessful bidders on new program [removed: awards, such as the protest filed by our competitor on the FLRAA program.][added: awards.]

Due to the nature of our work under government contracts, we sometimes experience unforeseen technological or schedule difficulties and cost [removed: overruns.][added: overruns due to inflation, labor shortages, supply chain challenges and/or other factors.]

Under each type of contract, if we are unable to control costs or if our initial cost estimates are incorrect, our [added: cash flows, results of operations and financial condition could be adversely affected.]

The market for U.S. Government defense business is highly [added: competitive, and the] competitive [added: bidding process increases pricing pressure and cost] which may affect our ability to win new contracts for major government [removed: programs and result in reduced future revenues.][added: programs.]

[removed: The competition from other government contractors, combined with the increasingly competitive nature of] [added: Despite our best efforts,] the [removed: government contract bidding] [added: U.S. Government customer sometimes chooses competitor's offerings over our offerings] and [removed: award process, results in an intensely competitive market environment in which] there can be no assurance that our businesses will be selected for government programs with significant long-term revenues.

We enter into acquisitions [removed: in an effort to expand] [added: with the intention of expanding] our business and [removed: enhance] [added: enhancing] shareholder value.

Such risks include difficulties in integrating newly acquired businesses and operations in an efficient and cost-effective manner; challenges in achieving expected strategic objectives, cost savings and other benefits; the risk that the acquired businesses’ markets do not evolve as anticipated and that the acquired businesses’ products and technologies do not prove to be those needed to be successful in those markets; the risk that our due diligence reviews of the acquired business do not identify or adequately assess all of the material issues which impact valuation of the business or result in costs or liabilities in excess of what we anticipated; the risk that we pay a purchase price that exceeds what the future results of operations would have merited; the risk [removed: that the acquired business may have significant internal control deficiencies or exposure to regulatory sanctions; and the potential loss of key customers, suppliers and employees of the acquired businesses.]

[removed: These] [added: As a result, we have experienced, and may continue to experience,] cost [removed: increases,] [added: increases for certain materials and components which,] along with increased energy and shipping [removed: costs, have and may continue to negatively impact our profitability, and component shortages] [added: costs] and [removed: delays] [added: other inflationary pressures,] have [added: negatively impacted,] and may continue to [removed: result in production delays for certain of] [added: negatively impact,] our [removed: products.][added: profitability.]

[removed: Failure to perform] [added: Challenges faced] by our subcontractors or suppliers could [added: materially and] adversely affect our performance.

[removed: Our suppliers] [added: Suppliers] may be unable to quickly recover from natural [removed: disasters] [added: disasters, acts of war,] and other events beyond their control and may be subject to additional risks such as material or labor shortages, inflationary conditions or other financial problems that limit their ability to conduct their [removed: operations.][added: operations, resulting in their inability to perform as anticipated.]

During [removed: 2022,] [added: 2023,] we derived approximately 32% of our revenues from international business, including U.S. exports.

Risks related to international operations include import, export, economic sanctions and other trade restrictions; changing U.S. and foreign procurement policies and practices; changes in international trade policies, including higher tariffs on imported goods and materials and renegotiation of free trade agreements; potential retaliatory tariffs imposed by foreign countries against U.S. goods; impacts on our non-U.S. suppliers and customers due to acts of war [added: or terrorism] occurring internationally; restrictions on technology transfer; difficulties in protecting intellectual property; increasing complexity of employment and environmental, health and safety regulations; foreign investment laws; exchange controls; repatriation of earnings or cash settlement challenges; compliance with increasingly rigorous data privacy and protection laws; competition from foreign and multinational firms with home country advantages; economic and government instability; acts of industrial espionage, acts of war and terrorism and related safety concerns.

Natural disasters or other events outside of our control [added: have disrupted and] may [added: in the future] disrupt our operations, adversely affect our results of operations and financial condition, and may not be fully covered by insurance.

Any of these events could result in physical damage to and/or complete or partial closure of one or more of our facilities and temporary or long-term disruption of our [added: operations or the operations of our suppliers by causing business interruptions or by impacting the availability and cost of materials needed for manufacturing or otherwise impacting our ability to deliver products and services to our customers.]

Under certain circumstances, the CPSC [added: has in the past and] could require [added: in the future] us to repair, replace or refund the purchase price of one or more of our products, or potentially even discontinue entire product lines.

[added: Any repurchases or recalls of our products or an imposition of] fines or penalties could be costly to us and could damage the reputation or the value of our brands.

In addition, our stakeholders expect us to reduce greenhouse gas emissions from the use of our products, including by developing and incorporating sustainable technologies into [removed: our products.]

[removed: Our] [added: We expect that most of our] businesses [removed: are expected to] [added: will] require significant research and development investment to succeed in developing the new technologies and products that will enable us to significantly reduce such emissions from the use of our products and successfully compete in a lower carbon economy.

Approximately [removed: 7,300,] [added: 7,400,] or 27%, of our U.S. employees are unionized, and many of our non-U.S. employees are represented by organized councils.

Considerable uncertainty exists regarding how future budget and program decisions will develop.

We cannot predict the impact on existing, follow-on or future programs from changes in the threat environment, defense spending levels, government priorities, political leadership, procurement practices, inflation and other macroeconomic trends, military strategy, or broader societal changes.

supplied to perform under these contracts.

that the acquired business may have significant internal control deficiencies or exposure to regulatory sanctions; and the potential loss of key customers, suppliers and employees of the acquired businesses.

Risks arising from uncertainty in global macroeconomic conditions may harm our business.

We are sensitive to global macroeconomic conditions.

Negative macroeconomic factors may have an adverse effect on our business, results of operations and financial condition, as well as on our distributors, customers and suppliers, and on activity in many of the industries and markets we serve.

We cannot predict changes in worldwide or regional economic or political conditions and government policies as such factors are highly volatile and beyond our control.

If current macroeconomic pressures, including from inflation and labor and supply chain challenges, continue or if global macroeconomic conditions deteriorate and remain at depressed levels for extended periods, our business, results of operations and financial condition could be materially adversely affected.

Our businesses are experiencing and may continue to experience manufacturing inefficiencies and production delays as a result of shortages and delays of critical components for our products and other issues related to our direct or indirect suppliers.

our products.

The use of certain contract award types by the U.S. Government and the competitive bidding process increases pricing pressure and cost and may result in delayed revenues and profit.

cash flows, results of operations and financial condition could be adversely affected.

The competitive bidding process is costly and, in some instances, may require significant research and development and/or engineering efforts to participate.

Despite our best efforts, the U.S. Government customer may choose competitive offerings over our offerings.

The global economic impacts of Russia’s war with Ukraine could adversely affect our business, financial condition or operating results.

The war between Russia and Ukraine and the resulting economic sanctions imposed by the international community have impacted the global economy and given rise to potential global security issues that may adversely affect international business and economic conditions.

Certain of our direct or indirect suppliers have been negatively impacted by these events, resulting in increased costs to us for certain materials and components as well as shortages and delays of critical components for certain of our products.

In addition, these events have caused additional disruption in the supply chains of our automotive OEM customers, already experiencing disruption due to the impacts of the COVID-19 pandemic, which has caused, and may continue to cause, reduced demand for our automotive products.

The continuation of the war could lead to other supply chain disruptions, increased inflationary pressures, and volatility in global markets and industries that could negatively impact our operations.

Furthermore, the potential for retaliatory acts of cyberwarfare from Russia against U.S. companies in response to increasing sanctions on Russia could result in increased cyber-attacks against us.

The impact of any one or more of these or other factors could adversely affect our business, financial condition or operating results.

We maintain Information Systems Incident Management Standards applicable to all our businesses intended to ensure information security events and weaknesses associated with information systems are communicated and acted on in a timely manner.

Our enterprise risk management program includes cyber risk/network protection mitigation plans, and our disclosure controls and procedures address cybersecurity and include processes intended to ensure that security breaches are analyzed for potential disclosure.

Additionally, we conduct periodic training for our employees regarding the protection of sensitive information which includes training intended to prevent the success of cyberattacks.

Further, our insider trading compliance program addresses restrictions against trading while in possession of material, nonpublic information in connection with a cybersecurity incident.

We believe our threat detection and mitigation processes and procedures are robust.

For example, certain of our businesses have been, and

may continue to be, adversely impacted by suppliers which have been unable to perform as anticipated due to impacts of the pandemic and/or the war between Russia and Ukraine.

Our business was adversely impacted, and may again be adversely impacted, by the coronavirus (COVID-19) pandemic.

Our businesses have experienced and continue to experience various degrees of disruption due to the unprecedented conditions surrounding the COVID-19 pandemic.

Economic and other impacts from the pandemic initially resulted in, and could again result in, reduced demand for our aviation and commercial helicopter products and services, the delay or cancellation of existing orders by our customers and lower flight hours, and consequently, lower demand for parts and maintenance.

The effects of COVID-19 have included and could continue to include disruption of the operation of certain of our facilities or the facilities of our customers, suppliers or business partners, as well as other disruptions in our supply chains or our customers’ supply chains.

In addition, disruptions in our automotive OEM supply chains have caused and may continue to cause reduced demand for our automotive products.

We have experienced and may continue to experience lower revenues and/or increased costs as a result of these business and production disruptions.

The extent to which the pandemic could continue to impact our business, results of operations, financial condition and liquidity is highly uncertain and also will depend on future developments, most of which are outside our control.

Such developments may include the geographic spread and duration of the virus, the emergence of variants of the virus that cause severe illness and/or are resistant to the developed vaccines, the development of and access to effective treatments, the acceptance of, and access to, effective vaccines, and the effects of actions that have been or may be taken by various governmental authorities and other third parties in response to the outbreak.

operations or the operations of our suppliers by causing business interruptions or by impacting the availability and cost of materials needed for manufacturing or otherwise impacting our ability to deliver products and services to our customers.

Any repurchases or recalls of our products or an imposition of

In [removed: 2022,] [added: 2023,] Textron’s revenues increased [removed: 4% and segment profit increased 8%,] [added: 6%,] compared with [removed: 2021,] [added: 2022,] reflecting the impact of higher [removed: pricing and higher volume and mix] [added: pricing, principally] at [removed: both] the Textron [removed: Aviation and] [added: Aviation,] Industrial [added: and Bell] segments, [removed: partially offset by lower] [added: and higher] volume and mix at the [removed: Bell and Textron Systems segments.][added: Industrial segment.]

During [removed: 2022,] [added: 2023,] we continued to manage through the impacts of ongoing global supply chain shortages/delays and labor [removed: shortages, in order] [added: shortages] to [removed: meet customer demand.][added: deliver products to our customers.]

In December 2022, Bell was awarded the development contract for the U.S. [removed: Army’s Future Long-Range Assault Aircraft (FLRAA)] [added: Army's FLRAA program, which has begun to represent an increasing portion of Bell’s military aircraft and support] program [removed: as discussed in Item 1.][added: revenues.]

Financial highlights for [removed: 2022] [added: 2023] also include:

- Generated [removed: $1.5] [added: $1.3] billion of net cash from operating activities from our manufacturing businesses.

- Invested [removed: $601] [added: $570] million in research and development projects and [removed: $354] [added: $402] million in capital expenditures.

- Returned [removed: $867 million] [added: $1.2 billion] to our shareholders through the repurchase of [removed: 13.1] [added: 16.2] million shares of our common stock.

A discussion of our financial condition and operating results for [removed: 2022] [added: 2023] compared with [removed: 2021] [added: 2022] is provided below, while a discussion of [removed: 2021] [added: 2022] compared with [removed: 2020] [added: 2021] 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 [removed: January 1,] [added: December 31,] 2022.

| *(Dollars in millions)* | | | [removed: 2022] [added: 2023] | | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | | [removed: 2022] [added: 2023] | | | [removed: 2021] [added: 2022] | | |

| Revenues | | | $ | [removed: 12,869] [added: 13,683] | | $ | [removed: 12,382] [added: 12,869] | | $ | [removed: 11,651] [added: 12,382] | | [removed: 4%] [added: 6%] | | | [removed: 6%] [added: 4%] | | |

| Cost of sales | | | [removed: 10,800] [added: 11,405] | | | [removed: 10,297] [added: 10,800] | | | [removed: 10,094] [added: 10,297] | | | [removed: 5%] [added: 6%] | | | [removed: 2%] [added: 5%] | | |

| Gross margin as a percentage of Manufacturing revenues | | | [removed: 15.7%] [added: 16.3%] | | | [removed: 16.5%] [added: 15.7%] | | | [removed: 13.0%] [added: 16.5%] | | | | | | | | |

| Selling and administrative expense | | | [removed: 1,186] [added: 1,225] | | | [removed: 1,221] [added: 1,186] | | | [removed: 1,045] [added: 1,221] | | | [removed: (3)%] [added: 3%] | | | [removed: 17%] [added: (3)%] | | |

| Interest expense, net | | | [removed: 107] [added: 77] | | | [removed: 142] [added: 107] | | | [removed: 166] [added: 142] | | | [removed: (25)%] [added: (28)%] | | | [removed: (14)%] [added: (25)%] | | |

| Non-service components of pension and postretirement income, net | | | [removed: 240] [added: 237] | | | [removed: 159] [added: 240] | | | [removed: 83] [added: 159] | | | [removed: 51%] [added: (1)%] | | | [removed: 92%] [added: 51%] | | |

Revenues increased [removed: $487] [added: $814] million, [removed: 4%,] [added: 6%,] in [removed: 2022,] [added: 2023,] compared with [removed: 2021.][added: 2022.]

- Higher Textron Aviation revenues of [removed: $507] [added: $300] million, reflecting higher [added: pricing of $335 million, partially offset by lower] volume and mix of [removed: $302 million and higher pricing of $205] [added: $35] million.

- Higher Industrial revenues of [removed: $335] [added: $376] million due to [removed: a favorable impact from pricing of $227 million, principally in the Specialized Vehicles product line, and] higher volume and mix of [removed: $203] [added: $280] million [removed: in] [added: across] both product [removed: lines, partially offset by an unfavorable] [added: lines and a favorable] impact from [removed: exchange rate fluctuations] [added: pricing] of [removed: $95] [added: $99] million.

[removed: In 2022, cost of sales] [added: Segment profit] increased [removed: $503 million, 5%,] [added: 17%,] compared with [removed: 2021,] [added: 2022,] largely due to [removed: an unfavorable impact from inflation of $385 million, principally reflecting] higher [removed: material costs in] [added: pricing, net of inflation at] the [removed: Industrial and] Textron Aviation [added: and Industrial] segments.

Gross margin as a percentage of Manufacturing revenues [removed: decreased 80] [added: increased 60] basis points in [removed: 2022,] [added: 2023,] compared with [removed: 2021, as higher margin at the Textron Aviation segment, reflecting] [added: 2022, largely due to] higher [removed: volume and mix and pricing, was more than offset by lower margin at the other Manufacturing segments, primarily] [added: margins] at the [added: Industrial,] Bell [removed: segment due to lower volume] and [removed: mix.][added: Textron Aviation segments.]

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 [removed: equivalents.][added: equivalents for the Manufacturing borrowing group.]

In [removed: 2022,] [added: 2023,] interest expense, net decreased [removed: $35] [added: $30] million, [removed: 25%,] [added: 28%,] compared with [removed: 2021,] [added: 2022,] primarily due to an increase in interest income of [removed: $22 million and lower average debt outstanding.][added: $34 million.]

For [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] gross interest expense totaled [removed: $129] [added: $133] million, [removed: $142] [added: $129] million and [removed: $166] [added: $142] million, respectively.

Non-service components of pension and postretirement income, net [removed: increased] [added: decreased] by [removed: $81] [added: $3] million, [removed: 51%,] [added: 1%,] in [removed: 2022,] [added: 2023,] compared with [removed: 2021.][added: 2022.]

Special charges [removed: of $25 million in 2021, primarily] include restructuring activities [added: and asset impairment charges] as described in Note 16 to the Consolidated Financial Statements in Item 8.

| | | | [removed: 2022] [added: 2023] | | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | |

| Effective tax rate | | | 15.2% | | | [removed: 14.4%] [added: 15.2%] | | | [removed: (9.6%)] [added: 14.4%] | | |

In [added: 2023 and] 2022, 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.

We conduct our business through six operating segments: Textron Aviation, Bell, Textron Systems, [removed: Industrial and] [added: Industrial,] Textron [removed: eAviation, which represent our manufacturing businesses,] [added: eAviation] and [removed: Finance, which represents our captive finance business.][added: Finance.]

Operating expenses for the Manufacturing segments include cost of [removed: sales,] [added: sales and] selling and administrative [removed: expense and other non-service components of net periodic benefit cost/(income), and exclude] [added: expense, while excluding] certain corporate [removed: expenses] [added: expenses, LIFO inventory provision, intangible asset amortization] and special charges.

Performance reflects an increase or decrease in research and development, depreciation, selling and administrative costs, warranty, product liability, quality/scrap, labor efficiency, overhead, [removed: non-service pension cost/(income),] product line profitability, start-up, ramp up and cost-reduction initiatives or other manufacturing inputs.

Approximately [removed: 22%] [added: 21%] of our [removed: 2022] [added: 2023] revenues were derived from contracts with the U.S. Government, including those under the U.S. Government-sponsored foreign military sales program.

Changes in segment profit for these contracts are typically expressed in terms of volume and mix and performance; these include 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 [added: variable consideration or b) changes in the total estimated costs at completion due to improved or deteriorated operating performance.]

| Aircraft | | | $ | [removed: 3,387] [added: 3,577] | | $ | [removed: 3,116] [added: 3,387] | | $ | [removed: 2,714] [added: 3,116] | | [removed: 9%] [added: 6%] | | | [removed: 15%] [added: 9%] | | |

| Aftermarket parts and services | | | [removed: 1,686] [added: 1,796] | | | [removed: 1,450] [added: 1,686] | | | [removed: 1,260] [added: 1,450] | | | [removed: 16%] [added: 7%] | | | [removed: 15%] [added: 16%] | | |

| Total revenues | | | [removed: 5,073] [added: 5,373] | | | [removed: 4,566] [added: 5,073] | | | [removed: 3,974] [added: 4,566] | | | [removed: 11%] [added: 6%] | | | [removed: 15%] [added: 11%] | | |

| Backlog | | | $ | [removed: 6,387] [added: 7,169] | | $ | [removed: 4,120] [added: 6,387] | | $ | [removed: 1,603] [added: 4,120] | | [removed: 55%] [added: 12%] | | | [removed: 157%] [added: 55%] | | |

Factors contributing to the [removed: 2022] [added: 2023] year-over-year revenue change are provided below:

| *(In millions)* | | | [removed: 2022] [added: 2023] versus [removed: 2021] [added: 2022] | | |

Our backlog increased 5% in 2023 to $13.9 billion, which included a $782 million increase at the Textron Aviation segment.

Beginning in 2023, we changed how we measure our segment profit for the manufacturing segments, as discussed in the Segment Analysis section below.

As a result of this change, the prior periods have been recast to conform to this presentation.

The impact of the change in the segment profit measure on the narrative discussion of fluctuations in segment profit provided 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 31, 2022 was insignificant.

| Special charges | | | 126 | | | — | | | 25 | | | — | | | — | | |

- Higher Textron Systems revenues of $63 million, primarily due to higher volume of $44 million.

- Higher Bell revenues of $56 million, reflecting higher pricing of $68 million, partially offset by lower volume and mix of $12 million.

In 2023, cost of sales increased $605 million, 6%, compared with 2022, largely due to the impact of higher net volume and mix described above, and $257 million of inflation.

Selling and administrative expense increased $39 million, 3%, in 2023, compared with 2022, primarily reflecting higher share-based compensation expense and $27 million of inflation, largely in labor costs, partially offset by a $17 million recovery of amounts that were previously written off related to one customer relationship at the Finance segment.

Beginning in 2023, we changed how we measure our segment profit for the manufacturing segments to exclude the non-service components of pension and postretirement income, net; LIFO inventory provision; and intangible asset amortization.

This measure also continues to exclude interest expense, net for Manufacturing group; certain corporate expenses; gains/losses on major business dispositions; and special charges.

The prior periods have been recast to conform to this presentation.

| *(Dollars in millions)* | | | 2023 | | | 2022 | | | 2021 | | | 2023 | | | 2022 | | |

| Operating expenses | | | 4,724 | | | 4,513 | | | 4,217 | | | 5% | | | 7% | | |

| Segment profit | | | $ | 649 | | $ | 560 | | $ | 349 | | 16% | | | 60% | | |

| Pricing | | | $ | 335 | |

| Total change | | | $ | 300 | |

Textron Aviation’s operating expenses increased $211 million, 5%, in 2023, compared with 2022, largely reflecting inflation of $176 million.

| *(In millions)* | | | 2023 versus 2022 | | |

Textron Aviation’s segment profit increased $89 million, 16%, in 2023, compared with 2022, due to favorable pricing, net of inflation of $159 million and a favorable impact from the mix of products and services sold, partially offset by an unfavorable impact from performance of $79 million, largely related to supply chain and labor inefficiencies.

| *(Dollars in millions)* | | | 2023 | | | 2022 | | | 2021 | | | 2023 | | | 2022 | | |

| Operating expenses | | | 2,827 | | | 2,809 | | | 2,965 | | | 1% | | | (5)% | | |

| Segment profit | | | $ | 320 | | $ | 282 | | $ | 399 | | 13% | | | (29)% | | |

| Profit margin | | | 10.2% | | | 9.1% | | | 11.9% | | | | | | | | |

Under current contracts, production of the V-22 tiltrotor aircraft is expected to end with final deliveries in the next two years after which this program will transition to the support stage.

For the H-1 helicopter, final deliveries under the current contract are expected to be completed in early 2024, fully transitioning this platform to the support stage.

Factors contributing to the 2023 year-over-year revenue change are provided below:

| *(In millions)* | | | 2023 versus 2022 | | |

Bell’s revenues increased $56 million, 2%, in 2023, compared with 2022, reflecting higher pricing of $68 million, partially offset by lower volume and mix of $12 million.

Volume and mix included lower military volume of $39 million, as higher volume from the FLRAA program was more than offset by lower volume on the V-22 and H-1 programs.

Commercial volume and mix increased $27 million, reflecting a favorable mix as we delivered 171 commercial helicopters in 2023, compared with 179 commercial helicopters in 2022.

Bell’s operating expenses increased $18 million, 1%, in 2023, compared with 2022, primarily due to inflation of $55 million and higher operating expenses due to the mix of products and services sold, partially offset by lower research and development costs described below.

Factors contributing to 2023 year-over-year segment profit change are provided below:

| *(In millions)* | | | 2023 versus 2022 | | |

| *(Dollars in millions)* | | | 2023 | | | 2022 | | | 2021 | | | 2023 | | | 2022 | | |

| Operating expenses | | | 1,088 | | | 1,040 | | | 1,095 | | | 5% | | | (5)% | | |

| Segment profit | | | $ | 147 | | $ | 132 | | $ | 178 | | 11% | | | (26)% | | |

| Profit margin | | | 11.9% | | | 11.3% | | | 14.0% | | | | | | | | |

Factors contributing to the 2023 year-over-year revenue change are provided below:

Our backlog increased 31%, to $13.3 billion by the end of 2022, reflecting increased demand in many of our businesses, including a 55% increase in backlog at the Textron Aviation segment.

Business.

Financial Statements and Supplementary Data.

- Lower Bell revenues of $273 million due to lower military revenues of $333 million, primarily in the H-1 program due to lower aircraft and spares production volume reflecting lower demand, partially offset by higher commercial revenues of $60 million, largely due to higher pricing.

- Lower Textron Systems revenues of $101 million, largely due to lower volume of $121 million, which included an $88 million decrease from our Afghanistan fee-for-service and aircraft support contracts.

Selling and administrative expense decreased $35 million, 3%, in 2022, compared with 2021, primarily reflecting lower share-based compensation expense.

The increase is based on our annual valuation at the end of 2021 and is primarily driven by an increase in the discount rate utilized for our domestic qualified pension plans and the impact of actual pension asset returns that exceeded our expected return on plan assets.

There were no special charges recorded in 2022.

In 2021, the effective tax rate of 14.4% was lower than the U.S. federal statutory tax rate of 21%, largely due to the favorable impact of research and development credits, which included a $12 million benefit recognized for additional credits related to prior years.

Segment profit for the manufacturing segments includes non-service components of net periodic benefit cost/(income) and excludes interest expense, net; certain corporate expenses; gains/losses on major business dispositions; special charges; and an inventory charge related to the 2020 COVID-19 restructuring plan, as discussed in Note 16 to the Consolidated Financial Statements in Item 8.

variable consideration or b) changes in the total estimated costs at completion due to improved or deteriorated operating performance.

| Operating expenses | | | 4,489 | | | 4,188 | | | 3,958 | | | 7% | | | 6% | | |

| Segment profit | | | $ | 584 | | $ | 378 | | $ | 16 | | 54% | | | 2,263% | | |

| Profit margin | | | 11.5% | | | 8.3% | | | 0.4% | | | | | | | | |

The higher aftermarket volume reflected increased aircraft utilization.

| Operating expenses | | | 2,774 | | | 2,956 | | | 2,847 | | | (6)% | | | 4% | | |

Under the current contracts, production is expected to end by 2023 for the H-1 helicopter and 2025 for the V-22 tiltrotor.

In December 2022, Bell was awarded the development contract for the next stage of the FLRAA program, as discussed in Item 1 Business.

Bell’s revenues decreased $273 million, 8%, in 2022, compared with 2021, largely due to lower military revenues of $333 million, primarily in the H-1 program due to lower aircraft and spares production volume reflecting lower demand.

Commercial revenues increased $60 million, largely due to higher pricing.

We delivered 179 commercial helicopters in 2022, compared with 156 commercial helicopters in 2021.

Performance included lower research and development costs, pension costs and selling and administrative expense of $113 million, partially offset by an unfavorable change in net program adjustments.

Bell Backlog

Bell’s backlog increased $910 million, 24%, in 2022, largely due to new orders in excess of deliveries and revenues recognized.

Bell was awarded a $1.4 billion 5-year contract with the U.S. Government for spares and logistic support for the V-22 tiltrotor aircraft in the first quarter of 2022.

| Operating expenses | | | 1,020 | | | 1,084 | | | 1,161 | | | (6)% | | | (7)% | | |

| Segment profit | | | $ | 152 | | $ | 189 | | $ | 152 | | (20)% | | | 24% | | |

| Profit margin | | | 13.0% | | | 14.8% | | | 11.6% | | | | | | | | |

Revenues at Textron Systems decreased $101 million, 8%, in 2022, compared with 2021.

Lower volume of $121 million included an $88 million decrease from our Afghanistan fee-for-service and aircraft support contracts, primarily reflecting the impact from the U.S. Army’s withdrawal from Afghanistan.

Textron Systems’ operating expenses decreased $64 million, 6%, in 2022, compared with 2021, primarily related to lower volume described above.

| Fuel Systems and Functional Components | | | $ | 1,771 | | $ | 1,735 | | $ | 1,751 | | 2% | | | (1)% | | |

| Operating expenses | | | 3,300 | | | 2,990 | | | 2,889 | | | 10% | | | 3% | | |

| Segment profit | | | $ | 165 | | $ | 140 | | $ | 111 | | 18% | | | 26% | | |

| Pricing | | | $ | 227 | |

Operating expenses for the Industrial segment increased $310 million, 10%, in 2022 compared with 2021, primarily reflecting inflation of $226 million, largely in material costs, and higher volume and mix described above, partially offset by a favorable impact of $85 million from foreign exchange rate fluctuations.

Segment profit for the Industrial segment increased $25 million, 18%, in 2022, compared with 2021, primarily due to higher volume and mix of $44 million as described above, partially offset by an unfavorable impact from foreign exchange rate fluctuations of $10 million and performance of $10 million.

Textron eAviation was formed upon the acquisition of Pipistrel, a manufacturer of electrically powered aircraft, on April 15, 2022, as discussed in Note 2 to the Consolidated Financial Statements in Item 8.

This segment includes the operating results of Pipistrel, along with research and development costs for initiatives related to the development of sustainable aviation solutions.

In 2022, Textron eAviation segment revenues totaled $16 million and segment loss totaled $26 million.

The notional amount of outstanding foreign currency exchange contracts was [removed: $354] [added: $478] million and [removed: $272] [added: $354] million at December [removed: 31, 2022] [added: 30, 2023] and [removed: January 1,] [added: December 31,] 2022, respectively.

We had interest rate swap agreements with a total notional amount of [removed: $297] [added: $210] million at December [removed: 31, 2022] [added: 30, 2023] and [removed: $289] [added: $297] million at [removed: January 1,] [added: December 31,] 2022, which effectively converted certain floating-rate debt to a fixed-rate equivalent.

| | | | December [removed: 31, 2022] [added: 30, 2023] | | | | | | | | | [removed: January 1,] [added: December 31,] 2022 | | | | | | | | |

| Foreign currency exchange contracts | | | [removed: (11)] [added: 1] | | | [removed: (11)] [added: 1] | | | [removed: 28] [added: 30] | | | [removed: 1] [added: (11)] | | | [removed: 1] [added: (11)] | | | [removed: 21] [added: 28] | | |

| Debt | | | $ | [removed: (3,175)] [added: (3,520)] | | $ | [removed: (2,872)] [added: (3,342)] | | $ | [removed: (51)] [added: (54)] | | $ | [removed: (3,181)] [added: (3,175)] | | $ | [removed: (3,346)] [added: (2,872)] | | $ | [removed: (24)] [added: (51)] | |

| Finance receivables | | | $ | [removed: 390] [added: 417] | | $ | [removed: 369] [added: 423] | | $ | [removed: 10] [added: 9] | | $ | [removed: 413] [added: 390] | | $ | [removed: 444] [added: 369] | | $ | [removed: 7] [added: 10] | |

| Debt | | | [removed: (375)] [added: (348)] | | | [removed: (294)] [added: (293)] | | | (1) | | | [removed: (582)] [added: (375)] | | | [removed: (546)] [added: (294)] | | | [removed: —] [added: (1)] | | |

| | | | $ | (5) | | $ | (5) | | $ | 29 | | $ | (17) | | $ | (17) | | $ | 27 | |

| | | | $ | (17) | | $ | (17) | | $ | 27 | | $ | (5) | | $ | (5) | | $ | 20 | |

Total revenues [added: for 2023 were $13.7 billion and are presented below] by segment and customer [removed: type for 2022 are presented below.][added: type.]

[removed: ][added: ]

Textron Aviation manufactures, sells and services [removed: Beechcraft and] Cessna [added: and Beechcraft] aircraft, and services the Hawker brand of business jets.

[removed: The family of jets currently offered by] Textron [removed: Aviation includes] [added: Aviation's business jets include] the [added: Cessna] Citation M2 Gen2, Citation [removed: CJ3+,] [added: CJ3 Gen2,] Citation CJ4 Gen2, Citation XLS Gen2, Citation Latitude and the Citation Longitude.

Textron Aviation’s turboprop aircraft include the Beechcraft King Air 260, King Air 360ER and King Air 360, and the Cessna Caravan, Grand Caravan EX and [removed: SkyCourier, which was certified in March 2022.][added: SkyCourier.]

In addition, Textron Aviation’s military trainer and defense aircraft include the [added: Beechcraft] T-6 trainer, which has been used to train pilots from more than [removed: 20] [added: 40] countries, and the AT-6 light attack military aircraft, which [added: has] achieved military type certification from the U.S. Air [removed: Force in July 2022, enabling international sales of the aircraft.][added: Force.]

In support of its family of aircraft, Textron Aviation operates a global network of more than 20 service centers, two of which are co-located with [removed: Bell, along with more than 300 authorized independent service centers located throughout the world.][added: Bell.]

Textron Aviation also provides its customers with around-the-clock parts support and offers a mobile support program with over [removed: 70] [added: 80] mobile service units.

[removed: Textron Aviation is developing the Denali, a high-performance single engine turboprop aircraft that] [added: The Denali] will be powered by an engine expected to be up to 20% more efficient than similarly sized engines.

Bell’s [removed: primary] [added: major] U.S. Government programs are for the production and support of V-22 tiltrotor aircraft, primarily for the U.S. Department of [removed: Defense,] [added: Defense; the development of the V-280 Valor, a next generation tiltrotor aircraft for the U.S. Army’s Future Long Range Assault Aircraft (FLRAA) program;] and [added: production and support of] H-1 helicopters for the U.S. Marine Corps.

Under the U.S. Government-sponsored foreign military sales program, Bell offers [removed: its] [added: the] V-22 tiltrotor aircraft and H-1 helicopter products for sale to other countries.

The commercial helicopters currently offered by Bell include the 429, 407GXi, [removed: 412EPX, 412EPI,] [added: 412EPX and] 505 Jet Ranger [removed: X and Huey II.][added: X.]

For both its military programs and its commercial products, Bell provides post-sale support and service for an installed base of approximately 13,000 [removed: helicopters through a network of eight Company-operated service centers, four global parts distribution centers and approximately 85 independent service centers located in approximately 35 countries.][added: helicopters.]

Bell is [added: also] developing a new rotorcraft, the Bell 360 Invictus, for the U.S. Army's Future Attack Reconnaissance Aircraft (FARA) Competitive Prototype Program, which is [removed: also] part of the U.S. government's FVL initiative.

Bell continues to progress on its development of the 360 Invictus Prototype under this [removed: phase.][added: phase of the cost-share program.]

Bell’s first super medium commercial helicopter, the 525 Relentless, is currently in the certification process with the [removed: Federal Aviation Administration (FAA).][added: FAA.]

The businesses in our Textron Systems segment [removed: develop] [added: develop, manufacture] and integrate a variety of products and services for U.S. and international military, government and commercial customers to support defense, homeland security, aerospace, infrastructure protection and other customer missions.

Product and service offerings of this segment include [removed: unmanned aircraft systems,] electronic systems and solutions, advanced marine craft, piston aircraft engines, live military air-to-air and air-to-ship training, weapons and related components, [added: unmanned aircraft systems] and [added: both manned and unmanned] armored and specialty vehicles.

Notable products developed and produced by the Textron Systems segment include the [added: Ship-to-Shore Connector, the U.S. Navy's next generation of Landing Craft Air Cushion vehicles; a family of test and simulation products;] Shadow, the U.S. Army's premier tactical unmanned aircraft system; the Aerosonde Small Unmanned Aircraft System, a multi-mission capable unmanned aircraft system for commercial and military operations; [removed: the U.S. Navy's next generation Landing Craft Air Cushion, developed as part of the Ship-to-Shore Connector program;] and piston aircraft engines under the Lycoming brand.

Notable service offerings of the segment include fee-for-service [removed: programs] [added: programs,] using unmanned aircraft [removed: systems] [added: systems,] and live military air-to-air and air-to-ship training and support services for U.S. Navy, Marine and Air Force personnel provided by Airborne Tactical Advantage Company.

Our Industrial segment designs and manufactures a variety of products within the [removed: Fuel Systems and Functional Components] [added: Kautex] and Specialized Vehicles product lines.

In addition, Kautex produces plastic tanks for selective catalytic reduction systems used to [removed: reduce emissions from diesel engines, and other fuel system components.]

Kautex has also developed and begun to [removed: market the] [added: offer lightweight, composite] Pentatonic battery [removed: system, a customizable, lightweight battery housing with] [added: systems, which include enclosures, underbody protection and] thermal management [removed: capabilities, comprised of either thermoplastic composite or composite metal hybrid,] [added: systems,] for use in electric vehicles, from hybrid to full battery-powered.

[removed: Kautex] [added: Kautex, which is headquartered in Bonn, Germany,] operates over 30 plants in 13 countries in close proximity to its customers, along with 9 engineering/research and development locations around the world.

These businesses design, manufacture and sell golf [removed: cars,] [added: cars;] off-road utility [removed: vehicles, recreational side-by-side and all-terrain vehicles, snowmobiles,] [added: vehicles; powersports products;] light transportation [removed: vehicles,] [added: vehicles;] aviation ground support [removed: equipment and] [added: equipment;] professional turf-maintenance [removed: equipment, as well as] [added: equipment; and] specialized turf-care vehicles.

Pipistrel’s Velis Electro is the world’s first, and currently only, electric aircraft to receive full type certification from the European Union Aviation Safety Agency [removed: and, in 2022, it earned] [added: and from the] UK Civil Aviation [removed: Authority type certification.][added: Authority.]

[removed: The] [added: Our] Textron eAviation segment includes [removed: Pipistrel] [added: Pipistrel, a manufacturer of light aircraft,] along with other research and development initiatives related to sustainable aviation solutions.

A substantial number of the originations in our finance receivable portfolio are cross-border transactions for aircraft sold outside of the U.S. In [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] our Finance group [removed: paid our Manufacturing group $92] [added: made payments of $160] million and [removed: $100] [added: $92] million, respectively, [removed: related] to [added: finance] the [added: Manufacturing group's] sale of Textron-manufactured products to third [removed: parties that were financed by the Finance group.][added: parties.]

Our backlog at the end of [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] is summarized below:

| *(In millions)* | | | December [removed: 31, 2022] [added: 30, 2023] | | | [removed: January 1,] [added: December 31,] 2022 | | |

| Textron Aviation | | | $ | [removed: 6,387] [added: 7,169] | | $ | [removed: 4,120] [added: 6,387] | |

| Bell | | | [removed: 4,781] [added: 4,780] | | | [removed: 3,871] [added: 4,781] | | |

| Textron Systems | | | [removed: 2,098] [added: 1,950] | | | [removed: 2,144] [added: 2,098] | | |

| Total backlog | | | $ | [removed: 13,266] [added: 13,899] | | $ | [removed: 10,135] [added: 13,266] | |

Contracts with the U.S. Government, including contracts under the U.S. Government-sponsored foreign military sales program, generated approximately [removed: 22%] [added: 21%] of our consolidated revenues in [removed: 2022,] [added: 2023,] primarily in our Bell and Textron Systems segments.

These laws and regulations, among other things, require certification and disclosure of all cost and pricing data in connection with contract negotiation; define allowable and unallowable costs and otherwise govern our right to reimbursement under certain cost-based U.S. Government contracts; and safeguard and restrict the use and dissemination of [removed: classified and covered defense information and the export of certain products and technical data.]

At December [removed: 31, 2022,] [added: 30, 2023,] we employed approximately [removed: 34,000] [added: 35,000] employees worldwide, with approximately 80% located in the U.S. and the remainder located outside of the U.S. Approximately [removed: 7,300,] [added: 7,400,] or 27%, of our U.S. employees, most of whom work for our Bell and Textron Aviation segments, are represented by unions under collective bargaining agreements, and certain of our non-U.S. employees are represented by organized works councils.

In order to attract and retain highly skilled employees, we [removed: are committed to ensuring a safe and healthy work environment, offering] [added: offer] comprehensive compensation and benefit programs, [removed: creating great] career opportunities and [removed: building] an engaging, inclusive environment where all employees are treated with dignity and respect.

[added: To maintain and enhance the safety of our employees, we promote a workplace safety culture of continuous improvement, shared responsibility, and individual accountability] We use an annual goal setting process to drive injury rate improvements, and the injury rate reduction goal is a performance metric that is tracked and reported to senior leadership and the Audit Committee of the Board of Directors.

We believe by employing highly [removed: talented, diverse] [added: talented] employees, who feel valued, respected and are able to contribute fully, we will improve performance, innovation, collaboration and talent retention, all of which contributes to stronger business results and reinforces our reputation as leaders in our industries and communities.

Our segments include numerous separately incorporated subsidiaries.

With a product lineup ranging from introductory training aircraft through super mid-size business jets, Textron Aviation’s diverse customer base includes fractional aircraft businesses, charter and fleet operators, corporate aviation, individual buyers, training schools, airlines, and special mission, military and government operators.

In addition, more than 300 authorized independent service centers are located throughout the world.

Textron Aviation is developing the Citation Ascend, a high-performance midsize business jet, which is expected to enter into service in 2025.

The Beechcraft Denali, a high-performance single engine turboprop aircraft also under development, achieved its first flight in November 2021 and is in the certification process with the Federal Aviation Administration (FAA).

The FLRAA development contract was awarded to Bell in December 2022 as part of the U.S. Army’s Future Vertical Lift (FVL) initiative.

Bell is developing a tiltrotor aircraft, based on the V-280 Valor, to meet U.S. Army weapon system requirements.

The V-280 Valor first flew in December 2017 and has conducted over 200 hours of flight testing.

On February 8, 2024, as part of plans to rebalance its aviation modernization investments, the U.S. Army announced plans to discontinue development of the FARA at the conclusion of FY24 prototyping activities.

Bell operates a global network of eight Company-operated service centers, two of which are co-located with Textron Aviation, and four global parts distribution centers.

In addition, approximately 85 independent service centers are located in about 35 countries.

reduce emissions from diesel engines, and other fuel system components.

classified and covered defense information and the export of certain products and technical data.

The health and safety of our employees, contractors and communities is a priority, and we strive to provide our employees with healthy working conditions and safe facilities.

litigation staff with primary oversight of litigation throughout Textron.

- The risk of disruptions to our business and the business of our suppliers, customers and other business partners due to unexpected events, such as pandemics, natural disasters, acts of war, strikes, terrorism, social unrest or other societal or political conditions; and

Our segments include operations that are unincorporated divisions of Textron Inc. and others that are separately incorporated subsidiaries.

In addition, Able Aerospace Services, Inc., a subsidiary of Textron Aviation, provides component and maintenance, repair and overhaul services in support of commercial and military fixed- and rotor-wing aircraft.

*Product Development Programs*

The Denali achieved its first flight in November 2021 and is currently in the flight testing process.

Bell is one of the leading suppliers of helicopters to the U.S. Government and, in association with The Boeing Company, the only supplier of military tiltrotor aircraft.

The H-1 helicopter program includes a utility model, the UH-1Y, and an advanced attack model, the AH-1Z, which have 84% parts commonality between them.

Bell is developing the V-280 Valor, a next generation vertical lift aircraft for the Future Long Range Assault Aircraft (FLRAA) program, which is part of the U.S. Army’s Future Vertical Lift (FVL) initiative.

The V-280 achieved its first flight in December 2017, conducted over 200 hours of flight testing, and has demonstrated all key performance objectives established by the U.S. Army, including flying in excess of 300 knots airspeed.

After an extended competitive process, in December 2022, Bell was awarded the development contract for the next stage of the FLRAA program.

A competitor has filed a protest with the Government Accountability Office (GAO) regarding the award of the FLRAA contract to Bell, and a stop-work order has been issued pending resolution of the protest.

We expect the GAO to issue its decision on the protest by April 7, 2023.

The FARA program was initiated by the U.S. Army to develop a successor to the retired Bell OH-58D Kiowa Warrior helicopter.

Our Fuel Systems and Functional Components product line is produced by our Kautex business unit which is headquartered in Bonn, Germany.

Textron eAviation was formed in the second quarter of 2022 following our acquisition of Pipistrel, a manufacturer of electrically powered aircraft, on April 15, 2022.

Our Finance segment’s largest business risk is the collectability of its finance receivable portfolio.

See Finance Segment section in Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for information about the Finance segment’s credit performance.

To maintain and enhance the safety of our employees, we promote a culture of continuous improvement and individual accountability to provide safe workplaces.

The health and safety of our employees has been a priority throughout the duration of the COVID-19 pandemic.

Our enterprise-wide pandemic response teams, formed early in the pandemic, guided our operations in the processes and procedures to comply with applicable government-imposed health and safety-related operating restrictions, to enhance the safety of our facilities to protect the health of our employees and to monitor trends.

During 2022, these teams continued to operate as needed, updating response actions as government guidance and orders evolved, and we have continued to communicate with our employees as appropriate.

*Diversity and Inclusion*

For over a decade, Textron has allocated five percent of annual incentive compensation for management-level employees toward achievement of diversity goals.

Beginning in 2020, we focused these goals specifically on hiring diversity.

To improve our outreach to diverse candidates, we have increased our recruiting efforts at historically black colleges and universities, enhanced our partnerships with diverse professional organizations and participated in diverse STEM conferences.

In addition, we provide inclusion and unconscious bias training to our employees and recruiters to improve diversity in recruiting.

- Risks and uncertainties related to the ongoing impact of the COVID-19 pandemic and the war between Russia and Ukraine on our business and operations;

- Risks related to a competitor's protest of the award of the FLRAA contract to Bell.

We [removed: also] are subject to actual and threatened legal proceedings and other claims arising out of the conduct of our business, including proceedings and claims relating to commercial and financial transactions; government contracts; alleged lack of compliance with applicable laws and regulations; disputes with suppliers, production partners or other third parties; product liability; patent and trademark infringement; employment disputes; and environmental, health and safety matters.

As previously reported in Textron’s Annual Report on Form 10-K for the fiscal year ended January 4, 2020, on August 22, 2019, a purported shareholder class action lawsuit was filed in the United States District Court in the Southern District of New York against Textron, its Chairman and Chief Executive Officer and its Chief Financial Officer.

The suit, filed by Building Trades Pension Fund of Western Pennsylvania, alleges that the defendants violated the federal securities laws by making materially false and misleading statements and concealing material adverse facts related to the Arctic Cat acquisition and integration.

The complaint seeks unspecified compensatory damages.

On November 12, 2019, the Court appointed IWA Forest Industry Pension Fund (IWA) as the sole lead plaintiff in the case.

On December 24, 2019, IWA filed an Amended Complaint in the now entitled In re Textron Inc. Securities Litigation.

On February 14, 2020, IWA filed a Second Amended Complaint, and on March 6, 2020, Textron filed a motion to dismiss the Second Amended Complaint.

On July 20, 2020, the Court granted Textron’s motion to dismiss and closed the case.

On August 18, 2020, plaintiffs filed a notice of appeal contesting the dismissal, which Textron opposed.

On September 17, 2021, the Second Circuit Court of Appeals narrowed the case, unanimously upholding dismissal of most of the Second Amended Complaint, but reversing dismissal of one aspect of the Second Amended Complaint and remanding that remaining portion back to the District Court for further proceedings.

On June 23, 2022, as a result of a mediation process overseen by an independent mediator, the Parties entered into a settlement agreement to settle plaintiff’s claims for an amount not material to Textron.

On November 21, 2022, the Court entered an order giving final approval of the settlement and final judgment in the case.

Neither Textron nor any of the other defendants admitted any wrongdoing with respect to the allegations in the case.

[Table of [removed: Content](#i6b9bcdaa820142b5bea13ad0ca89a054_7)[s](#i6b9bcdaa820142b5bea13ad0ca89a054_7)][added: Content](#i977290c73bc34362a4261d6a76667593_7)[s](#i977290c73bc34362a4261d6a76667593_7)]

For the fiscal year ended December [removed: 31, 2022][added: 30, 2023]

The aggregate market value of the registrant’s Common Stock held by non-affiliates at July [removed: 2, 2022] [added: 1, 2023] was approximately [removed: $12.9] [added: $13.3] billion based on the New York Stock Exchange closing price for such shares on that date.

At February [removed: 4, 2023, 205,216,698] [added: 3, 2024, 192,853,981] shares of Common Stock were outstanding.

Part III of this Report incorporates information from certain portions of the registrant’s Definitive Proxy Statement for its Annual Meeting of Shareholders to be held on April [removed: 26, 2023.][added: 24, 2024.]

| [Item [removed: 1.](#i6b9bcdaa820142b5bea13ad0ca89a054_13)] [added: 1.](#i977290c73bc34362a4261d6a76667593_13)] | | | [removed: [Business](#i6b9bcdaa820142b5bea13ad0ca89a054_13)] [added: [Business](#i977290c73bc34362a4261d6a76667593_13)] | | | [removed: [3](#i6b9bcdaa820142b5bea13ad0ca89a054_13)] [added: [3](#i977290c73bc34362a4261d6a76667593_13)] | | |

| [Item [removed: 1A.](#i6b9bcdaa820142b5bea13ad0ca89a054_16)] [added: 1A.](#i977290c73bc34362a4261d6a76667593_16)] | | | [Risk [removed: Factors](#i6b9bcdaa820142b5bea13ad0ca89a054_16)] [added: Factors](#i977290c73bc34362a4261d6a76667593_16)] | | | [removed: [10](#i6b9bcdaa820142b5bea13ad0ca89a054_16)] [added: [9](#i977290c73bc34362a4261d6a76667593_16)] | | |

| [Item [removed: 1B.](#i6b9bcdaa820142b5bea13ad0ca89a054_19)] [added: 1B.](#i977290c73bc34362a4261d6a76667593_19)] | | | [Unresolved Staff [removed: Comments](#i6b9bcdaa820142b5bea13ad0ca89a054_19)] [added: Comments](#i977290c73bc34362a4261d6a76667593_19)] | | | [removed: [17](#i6b9bcdaa820142b5bea13ad0ca89a054_19)] [added: [16](#i977290c73bc34362a4261d6a76667593_19)] | | |

| [Item [removed: 2.](#i6b9bcdaa820142b5bea13ad0ca89a054_22)] [added: 2.](#i977290c73bc34362a4261d6a76667593_22)] | | | [removed: [Properties](#i6b9bcdaa820142b5bea13ad0ca89a054_22)] [added: [Properties](#i977290c73bc34362a4261d6a76667593_22)] | | | [removed: [17](#i6b9bcdaa820142b5bea13ad0ca89a054_22)] [added: [18](#i977290c73bc34362a4261d6a76667593_22)] | | |

| [Item [removed: 3.](#i6b9bcdaa820142b5bea13ad0ca89a054_25)] [added: 3.](#i977290c73bc34362a4261d6a76667593_25)] | | | [Legal [removed: Proceedings](#i6b9bcdaa820142b5bea13ad0ca89a054_25)] [added: Proceedings](#i977290c73bc34362a4261d6a76667593_25)] | | | [removed: [18](#i6b9bcdaa820142b5bea13ad0ca89a054_25)] [added: [18](#i977290c73bc34362a4261d6a76667593_25)] | | |

| [Item [removed: 4.](#i6b9bcdaa820142b5bea13ad0ca89a054_28)] [added: 4.](#i977290c73bc34362a4261d6a76667593_28)] | | | [Mine Safety [removed: Disclosures](#i6b9bcdaa820142b5bea13ad0ca89a054_28)] [added: Disclosures](#i977290c73bc34362a4261d6a76667593_28)] | | | [removed: [18](#i6b9bcdaa820142b5bea13ad0ca89a054_28)] [added: [18](#i977290c73bc34362a4261d6a76667593_28)] | | |

| [Item [removed: 5.](#i6b9bcdaa820142b5bea13ad0ca89a054_34)] [added: 5.](#i977290c73bc34362a4261d6a76667593_34)] | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i6b9bcdaa820142b5bea13ad0ca89a054_34)] [added: Securities](#i977290c73bc34362a4261d6a76667593_34)] | | | [removed: [18](#i6b9bcdaa820142b5bea13ad0ca89a054_34)] [added: [18](#i977290c73bc34362a4261d6a76667593_34)] | | |

| [Item [removed: 7.](#i6b9bcdaa820142b5bea13ad0ca89a054_37)] [added: 7.](#i977290c73bc34362a4261d6a76667593_37)] | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i6b9bcdaa820142b5bea13ad0ca89a054_37)] [added: Operations](#i977290c73bc34362a4261d6a76667593_37)] | | | [removed: [20](#i6b9bcdaa820142b5bea13ad0ca89a054_37)] [added: [20](#i977290c73bc34362a4261d6a76667593_37)] | | |

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| [Item [removed: 8.](#i6b9bcdaa820142b5bea13ad0ca89a054_73)] [added: 8.](#i977290c73bc34362a4261d6a76667593_76)] | | | [Financial Statements and Supplementary [removed: Data](#i6b9bcdaa820142b5bea13ad0ca89a054_73)] [added: Data](#i977290c73bc34362a4261d6a76667593_76)] | | | [removed: [32](#i6b9bcdaa820142b5bea13ad0ca89a054_73)] [added: [33](#i977290c73bc34362a4261d6a76667593_76)] | | |

| [Item [removed: 9.](#i6b9bcdaa820142b5bea13ad0ca89a054_169)] [added: 9.](#i977290c73bc34362a4261d6a76667593_169)] | | | [Changes In and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i6b9bcdaa820142b5bea13ad0ca89a054_169)] [added: Disclosure](#i977290c73bc34362a4261d6a76667593_169)] | | | [removed: [69](#i6b9bcdaa820142b5bea13ad0ca89a054_169)] [added: [69](#i977290c73bc34362a4261d6a76667593_169)] | | |

| [Item [removed: 9A.](#i6b9bcdaa820142b5bea13ad0ca89a054_172)] [added: 9A.](#i977290c73bc34362a4261d6a76667593_172)] | | | [Controls and [removed: Procedures](#i6b9bcdaa820142b5bea13ad0ca89a054_172)] [added: Procedures](#i977290c73bc34362a4261d6a76667593_172)] | | | [removed: [69](#i6b9bcdaa820142b5bea13ad0ca89a054_172)] [added: [69](#i977290c73bc34362a4261d6a76667593_172)] | | |

| [Item [removed: 9C.](#i6b9bcdaa820142b5bea13ad0ca89a054_178)] [added: 9C.](#i977290c73bc34362a4261d6a76667593_178)] | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i6b9bcdaa820142b5bea13ad0ca89a054_178)] [added: Inspections](#i977290c73bc34362a4261d6a76667593_178)] | | | [removed: [71](#i6b9bcdaa820142b5bea13ad0ca89a054_178)] [added: [71](#i977290c73bc34362a4261d6a76667593_178)] | | |

| [PART [removed: III](#i6b9bcdaa820142b5bea13ad0ca89a054_181)] [added: III](#i977290c73bc34362a4261d6a76667593_181)] | | | | | | | | |

| [Item [removed: 10.](#i6b9bcdaa820142b5bea13ad0ca89a054_184)] [added: 10.](#i977290c73bc34362a4261d6a76667593_184)] | | | [Directors, Executive Officers and Corporate [removed: Governance](#i6b9bcdaa820142b5bea13ad0ca89a054_184)] [added: Governance](#i977290c73bc34362a4261d6a76667593_184)] | | | [removed: [71](#i6b9bcdaa820142b5bea13ad0ca89a054_184)] [added: [71](#i977290c73bc34362a4261d6a76667593_184)] | | |

| [Item [removed: 11.](#i6b9bcdaa820142b5bea13ad0ca89a054_187)] [added: 11.](#i977290c73bc34362a4261d6a76667593_187)] | | | [Executive [removed: Compensation](#i6b9bcdaa820142b5bea13ad0ca89a054_187)] [added: Compensation](#i977290c73bc34362a4261d6a76667593_187)] | | | [removed: [71](#i6b9bcdaa820142b5bea13ad0ca89a054_187)] [added: [71](#i977290c73bc34362a4261d6a76667593_187)] | | |

| [Item [removed: 12.](#i6b9bcdaa820142b5bea13ad0ca89a054_190)] [added: 12.](#i977290c73bc34362a4261d6a76667593_190)] | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i6b9bcdaa820142b5bea13ad0ca89a054_190)] [added: Matters](#i977290c73bc34362a4261d6a76667593_190)] | | | [removed: [71](#i6b9bcdaa820142b5bea13ad0ca89a054_190)] [added: [71](#i977290c73bc34362a4261d6a76667593_190)] | | |

| [Item [removed: 13.](#i6b9bcdaa820142b5bea13ad0ca89a054_193)] [added: 13.](#i977290c73bc34362a4261d6a76667593_193)] | | | [Certain Relationships and Related Transactions and Director [removed: Independence](#i6b9bcdaa820142b5bea13ad0ca89a054_193)] [added: Independence](#i977290c73bc34362a4261d6a76667593_193)] | | | [removed: [71](#i6b9bcdaa820142b5bea13ad0ca89a054_193)] [added: [71](#i977290c73bc34362a4261d6a76667593_193)] | | |

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| [PART [removed: IV](#i6b9bcdaa820142b5bea13ad0ca89a054_199)] [added: IV](#i977290c73bc34362a4261d6a76667593_199)] | | | | | | | | |

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| [Item [removed: 16.](#i6b9bcdaa820142b5bea13ad0ca89a054_205)] [added: 16.](#i977290c73bc34362a4261d6a76667593_205)] | | | [Form 10-K [removed: Summary](#i6b9bcdaa820142b5bea13ad0ca89a054_205)] [added: Summary](#i977290c73bc34362a4261d6a76667593_205)] | | | [removed: [75](#i6b9bcdaa820142b5bea13ad0ca89a054_205)] [added: [75](#i977290c73bc34362a4261d6a76667593_205)] | | |

| [removed: [Signatures](#i6b9bcdaa820142b5bea13ad0ca89a054_208)] [added: [Signatures](#i977290c73bc34362a4261d6a76667593_208)] | | | | | | [removed: [76](#i6b9bcdaa820142b5bea13ad0ca89a054_208)] [added: [76](#i977290c73bc34362a4261d6a76667593_208)] | | |

For the Fiscal Year Ended December 30, 2023

| [PART I](#i977290c73bc34362a4261d6a76667593_10) | | | | | | | | |

| [Item 1](#i977290c73bc34362a4261d6a76667593_1629)[C](#i977290c73bc34362a4261d6a76667593_1629)[.](#i977290c73bc34362a4261d6a76667593_1629) | | | [Cybersecurity](#i977290c73bc34362a4261d6a76667593_1629) | | | [16](#i977290c73bc34362a4261d6a76667593_1629) | | |

| [PART II](#i977290c73bc34362a4261d6a76667593_31) | | | | | | | | |

| [Item](#i977290c73bc34362a4261d6a76667593_1649) [6](#i977290c73bc34362a4261d6a76667593_1649)[.](#i977290c73bc34362a4261d6a76667593_1649) | | | [\[Reserved\]](#i977290c73bc34362a4261d6a76667593_1649) | | | [19](#i977290c73bc34362a4261d6a76667593_1649) | | |

| [Item 9](#i977290c73bc34362a4261d6a76667593_1655)[B](#i977290c73bc34362a4261d6a76667593_1655)[.](#i977290c73bc34362a4261d6a76667593_1655) | | | [Other Information](#i977290c73bc34362a4261d6a76667593_1655) | | | [71](#i977290c73bc34362a4261d6a76667593_1655) | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| [PART I](#i6b9bcdaa820142b5bea13ad0ca89a054_10) | | | | | | | | |

| [PART II](#i6b9bcdaa820142b5bea13ad0ca89a054_31) | | | | | | | | |

Overview

Our IT and related systems are critical to the efficient operation of our business and essential to our ability to perform day to day processes.

We face persistent security threats, including threats to our IT infrastructure and unlawful attempts to gain access to our confidential, classified or otherwise proprietary information, or that of our employees or customers, via phishing/malware campaigns and other cyberattack methods.

Our centrally defined security policies and processes are based on industry best practices and are revisited regularly to ensure their appropriateness based on risk, threats and current technological capabilities.

We monitor compliance with these policies and processes through frequent internal audits and a set of robust metrics that assist in protection of our environment.

As a U.S. defense contractor, we are additionally obligated to comply with current Department of Defense regulations such as Defense Federal Acquisition Regulation Supplement and the evolving Cybersecurity Maturity Model Certification guidelines.

We maintain Information Systems Incident Management Standards applicable to all our businesses that are intended to ensure information security events and weaknesses associated with information systems are communicated and acted on in a timely manner.

Our disclosure controls and procedures address cybersecurity and include processes intended to ensure that security breaches are reported to appropriate personnel and, if warranted, analyzed for potential disclosure.

While we have experienced cybersecurity attacks, such attacks to date have not materially affected the Company or our business strategy, results of operations, or financial condition.

Governance

*Board Oversight of Cybersecurity Matters*

Oversight of information security matters is conducted by our full Board of Directors.

The Board annually receives a comprehensive presentation on information security and controls from our Chief Information Officer (CIO) and, as may be necessary for specific topics, follow up occurs at additional meetings during the course of the year.

*Management of Cybersecurity Risks*

Textron Information Services is led by our CIO who has held positions of increasing responsibility within our corporate, Bell and Textron Systems IT organizations since 2008, including leading the IT organizations at both segments in maintaining compliance with U.S. Department of Defense information security requirements, as well as with our enterprise information security policies and standards.

He previously led strategic IT projects and teams responsible for delivering global IT solutions for several large U.S. based companies.

Our corporate information security organization, led by our Chief Information Security Officer (CISO), who reports to our CIO, is responsible for our overall information security strategy, policy, security engineering, operations and cyber threat detection and response.

Our CISO has more than 20 years of experience in the field of information security and holds multiple cybersecurity certifications including the designation of Certified Information Systems Security Professional.

Risk Management

Cybersecurity related risks have been identified as material business risks, and identifying, assessing and managing these risks is integrated into our Enterprise Risk Management (ERM) process, which is designed to identify, assess and guide in managing material risks throughout Textron at both the business segment and enterprise levels.

We maintain cyber risk/network protection mitigation plans through our ERM process to assist in management of these risks.

Our full Board oversees our ERM process through discussions at our Board of Directors’ Annual Strategic Business and Risk Review and at an annual dedicated ERM Review.

In addition, high risk areas, including cybersecurity matters, are reviewed and discussed with the full Board or other Board Committees, as appropriate.

The Audit Committee, as reflected in its charter, has been designated to assist the Board in its oversight of our ERM process, including with respect to cybersecurity risk.

We maintain a detailed Cybersecurity Incident Response Plan that guides our incident response process.

Upon the occurrence of a cybersecurity event, the cyber incident response team will follow a predefined process, documenting each step taken, to analyze and validate the event, and, if a cybersecurity incident is suspected to have occurred, quickly perform an initial analysis to determine the incident’s scope.

The team will prioritize the response to each incident based on its estimate of the business impact caused by the incident and the estimated efforts required to recover from the incident.

Notification of the incident is made to various stakeholders, including senior management and, if appropriate based upon the incident severity assessment, our Board.

The team will also conduct incident containment, eradication and recovery, and post incident activity.

Strategy

*Our Security Culture*

We protect our information assets and manage risk by promoting a culture that communicates security risks, designs secure IT systems and operates according to approved processes to reduce the likelihood and impact of security incidents.

We achieve this objective by:

- Designing, implementing and maintaining solutions with appropriate security controls.

- Sustaining solutions with required patching and vulnerability remediation.

- Creating and executing controls in support of policy as well as regulatory compliance.

- Ensuring that our policies, processes, practices and technologies proactively protect, shield, defend and remediate cyber threats.

- Delivering quality communications and annual training to stakeholders on cyber awareness and computing hygiene.

We believe that the conduct of our employees is critical to the success of our information security.

Through our security awareness program, we keep our employees apprised of threats, risks and the part that they play in protecting both themselves and the company.

On December [removed: 31, 2022,] [added: 30, 2023,] we operated a total of [removed: 54] [added: 56] plants located throughout the U.S. and 44 plants outside the U.S. We own [removed: 58] [added: 59] plants and lease the remainder for a total manufacturing space of approximately [removed: 23.6] [added: 23.7] million square feet.

The principal market on which our common stock is traded is the New York Stock Exchange under the symbol "TXT." At December [removed: 31, 2022,] [added: 30, 2023,] there were approximately [removed: 5,500] [added: 5,200] record holders of Textron common stock.

The following provides information about our fourth quarter [removed: 2022] [added: 2023] repurchases of equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:

These shares were purchased pursuant to a plan authorizing the [removed: repurchase] [added: repurchases] of up to [removed: 25] [added: 35] million shares of Textron common stock that was [removed: announced] [added: approved] on [removed: January 25,2022 and has no expiration date.*][added: July 24, 2023 by our Board of Directors.]

The following graph compares the total return on a cumulative basis at the end of each year of $100 invested in our common stock on December 31, [removed: 2017] [added: 2018] with the Standard & Poor’s (S&P) 500 Stock Index, the S&P 500 Aerospace & Defense (A&D) Index and the S&P 500 Industrials Index, all of which include Textron.

[removed: ][added: ]

| | | | [removed: 2017 | | |] 2018 | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | | [added: 2023 | | |]

| October 1, 2023 – November 4, 2023 | | | 495 | | | $ | 76.41 | | 495 | | | 31,650 | | |

| November 5, 2023 – December 2, 2023 | | | 1,075 | | | 76.93 | | | 1,075 | | | 30,575 | | |

| December 3, 2023 – December 30, 2023 | | | 2,099 | | | 77.76 | | | 2,099 | | | 28,476 | | |

| Total | | | 3,669 | | | $ | 77.33 | | 3,669 | | | | | |

This share repurchase program has no expiration date.*

| Textron Inc. | | | $ | 100.00 | | $ | 98.17 | | $ | 106.29 | | $ | 170.00 | | $ | 156.09 | | $ | 177.49 | |

| S&P 500 | | | 100.00 | | | 132.82 | | | 157.02 | | | 202.09 | | | 165.49 | | | 209.00 | | |

| S&P 500 A&D | | | 100.00 | | | 137.16 | | | 110.84 | | | 125.50 | | | 147.30 | | | 157.27 | | |

| S&P 500 Industrials | | | 100.00 | | | 133.52 | | | 164.01 | | | 209.76 | | | 169.06 | | | 220.52 | | |

| October 2, 2022 – November 5, 2022 | | | 750 | | | $ | 64.62 | | 750 | | | 14,500 | | |

| November 6, 2022 – December 3, 2022 | | | 1,635 | | | 69.67 | | | 1,635 | | | 12,865 | | |

| December 4, 2022 – December 31, 2022 | | | 940 | | | 70.12 | | | 940 | | | 11,925 | | |

| Total | | | 3,325 | | | $ | 68.66 | | 3,325 | | | | | |

| Textron Inc. | | | $ | 100.00 | | $ | 80.77 | | $ | 79.29 | | $ | 85.86 | | $ | 137.31 | | $ | 126.08 | |

| S&P 500 | | | 100.00 | | | 94.80 | | | 125.91 | | | 148.85 | | | 191.58 | | | 156.88 | | |

| S&P 500 A&D | | | 100.00 | | | 90.72 | | | 124.44 | | | 100.56 | | | 113.86 | | | 133.64 | | |

| S&P 500 Industrials | | | 100.00 | | | 96.09 | | | 128.30 | | | 157.60 | | | 201.56 | | | 162.45 | | |

| [Consolidated Statements of Operations for each of the years in the three-year period [removed: ended](#i6b9bcdaa820142b5bea13ad0ca89a054_76)] [added: ended](#i977290c73bc34362a4261d6a76667593_79)] December [removed: 31, 2022] [added: 30, 2023] | | | | | | | | | [removed: [33](#i6b9bcdaa820142b5bea13ad0ca89a054_76)] [added: [34](#i977290c73bc34362a4261d6a76667593_79)] | | |

| [Consolidated Statements of Comprehensive Income for each of the years in the three-year period [removed: ended](#i6b9bcdaa820142b5bea13ad0ca89a054_79)] [added: ended](#i977290c73bc34362a4261d6a76667593_82)] December [removed: 31, 2022] [added: 30, 2023] | | | | | | | | | [removed: [34](#i6b9bcdaa820142b5bea13ad0ca89a054_79)] [added: [35](#i977290c73bc34362a4261d6a76667593_82)] | | |

| [Consolidated Balance Sheets as [removed: of](#i6b9bcdaa820142b5bea13ad0ca89a054_82)] [added: of](#i977290c73bc34362a4261d6a76667593_85)] December [added: 30, 2023 [and](#i977290c73bc34362a4261d6a76667593_85) December] 31, 2022 [removed: [and](#i6b9bcdaa820142b5bea13ad0ca89a054_82) January 1, 2022] | | | | | | | | | [removed: [35](#i6b9bcdaa820142b5bea13ad0ca89a054_82)] [added: [36](#i977290c73bc34362a4261d6a76667593_85)] | | |

| [Consolidated Statements of Shareholders’ Equity for each of the years in the three-year period [removed: ended](#i6b9bcdaa820142b5bea13ad0ca89a054_85)] [added: ended](#i977290c73bc34362a4261d6a76667593_88)] December [removed: 31, 2022] [added: 30, 2023] | | | | | | | | | [removed: [36](#i6b9bcdaa820142b5bea13ad0ca89a054_85)] [added: [37](#i977290c73bc34362a4261d6a76667593_88)] | | |

| [Consolidated Statements of Cash Flows for each of the years in the three-year period [removed: ended](#i6b9bcdaa820142b5bea13ad0ca89a054_88)] [added: ended](#i977290c73bc34362a4261d6a76667593_91)] December [removed: 31, 2022] [added: 30, 2023] | | | | | | | | | [removed: [37](#i6b9bcdaa820142b5bea13ad0ca89a054_88)] [added: [38](#i977290c73bc34362a4261d6a76667593_91)] | | |

| [Notes to the Consolidated Financial [removed: Statements](#i6b9bcdaa820142b5bea13ad0ca89a054_94)] [added: Statements](#i977290c73bc34362a4261d6a76667593_97)] | | | | | | | | | | | |

| | | | [Note [removed: 1.](#i6b9bcdaa820142b5bea13ad0ca89a054_97)] [added: 1.](#i977290c73bc34362a4261d6a76667593_100)] | | | [Summary of Significant Accounting [removed: Policies](#i6b9bcdaa820142b5bea13ad0ca89a054_97)] [added: Policies](#i977290c73bc34362a4261d6a76667593_100)] | | | [removed: [39](#i6b9bcdaa820142b5bea13ad0ca89a054_97)] [added: [40](#i977290c73bc34362a4261d6a76667593_100)] | | |

| | | | [Note [removed: 2.](#i6b9bcdaa820142b5bea13ad0ca89a054_100)] [added: 2.](#i977290c73bc34362a4261d6a76667593_103)] | | | [removed: [Business](#i6b9bcdaa820142b5bea13ad0ca89a054_100) [Acquisition and](#i6b9bcdaa820142b5bea13ad0ca89a054_100) [Disposition](#i6b9bcdaa820142b5bea13ad0ca89a054_100)] [added: [Business Acquisition and Disposition](#i977290c73bc34362a4261d6a76667593_103)] | | | [removed: [45](#i6b9bcdaa820142b5bea13ad0ca89a054_100)] [added: [46](#i977290c73bc34362a4261d6a76667593_103)] | | |

| | | | [Note [removed: 3.](#i6b9bcdaa820142b5bea13ad0ca89a054_103)] [added: 3.](#i977290c73bc34362a4261d6a76667593_106)] | | | [Goodwill and Intangible [removed: Assets](#i6b9bcdaa820142b5bea13ad0ca89a054_103)] [added: Assets](#i977290c73bc34362a4261d6a76667593_106)] | | | [removed: [45](#i6b9bcdaa820142b5bea13ad0ca89a054_103)] [added: [46](#i977290c73bc34362a4261d6a76667593_106)] | | |

| | | | [Note [removed: 4.](#i6b9bcdaa820142b5bea13ad0ca89a054_106)] [added: 4.](#i977290c73bc34362a4261d6a76667593_109)] | | | [Accounts Receivable and Finance [removed: Receivables](#i6b9bcdaa820142b5bea13ad0ca89a054_106)] [added: Receivables](#i977290c73bc34362a4261d6a76667593_109)] | | | [removed: [46](#i6b9bcdaa820142b5bea13ad0ca89a054_106)] [added: [46](#i977290c73bc34362a4261d6a76667593_109)] | | |

| | | | [Note [removed: 6.](#i6b9bcdaa820142b5bea13ad0ca89a054_112)] [added: 6.](#i977290c73bc34362a4261d6a76667593_115)] | | | [Property, Plant and Equipment, [removed: Net](#i6b9bcdaa820142b5bea13ad0ca89a054_112)] [added: Net](#i977290c73bc34362a4261d6a76667593_115)] | | | [removed: [48](#i6b9bcdaa820142b5bea13ad0ca89a054_112)] [added: [49](#i977290c73bc34362a4261d6a76667593_115)] | | |

[removed: | | | | [Note 7.](#i6b9bcdaa820142b5bea13ad0ca89a054_115) | | | [Other] [added: Other] Current [removed: Liabilities](#i6b9bcdaa820142b5bea13ad0ca89a054_115) | | | [48](#i6b9bcdaa820142b5bea13ad0ca89a054_115) | | |][added: Liabilities]

| | | | [Note [removed: 9.](#i6b9bcdaa820142b5bea13ad0ca89a054_124)] [added: 9.](#i977290c73bc34362a4261d6a76667593_124)] | | | [Debt and Credit [removed: Facilities](#i6b9bcdaa820142b5bea13ad0ca89a054_124)] [added: Facilities](#i977290c73bc34362a4261d6a76667593_124)] | | | [removed: [49](#i6b9bcdaa820142b5bea13ad0ca89a054_124)] [added: [50](#i977290c73bc34362a4261d6a76667593_124)] | | |

| | | | [removed: [Note](#i6b9bcdaa820142b5bea13ad0ca89a054_127) [](#i6b9bcdaa820142b5bea13ad0ca89a054_127)[10.](#i6b9bcdaa820142b5bea13ad0ca89a054_127)] [added: [Note 10.](#i977290c73bc34362a4261d6a76667593_127)] | | | [Derivative Instruments and Fair Value [removed: Measurements](#i6b9bcdaa820142b5bea13ad0ca89a054_127)] [added: Measurements](#i977290c73bc34362a4261d6a76667593_127)] | | | [removed: [50](#i6b9bcdaa820142b5bea13ad0ca89a054_127)] [added: [51](#i977290c73bc34362a4261d6a76667593_127)] | | |

| | | | [Note [removed: 11.](#i6b9bcdaa820142b5bea13ad0ca89a054_130)] [added: 11.](#i977290c73bc34362a4261d6a76667593_130)] | | | [Shareholders’ [removed: Equity](#i6b9bcdaa820142b5bea13ad0ca89a054_130)] [added: Equity](#i977290c73bc34362a4261d6a76667593_130)] | | | [removed: [51](#i6b9bcdaa820142b5bea13ad0ca89a054_130)] [added: [52](#i977290c73bc34362a4261d6a76667593_130)] | | |

| | | | [Note [removed: 12.](#i6b9bcdaa820142b5bea13ad0ca89a054_133)] [added: 12.](#i977290c73bc34362a4261d6a76667593_133)] | | | [Segment and Geographic [removed: Data](#i6b9bcdaa820142b5bea13ad0ca89a054_133)] [added: Data](#i977290c73bc34362a4261d6a76667593_133)] | | | [removed: [53](#i6b9bcdaa820142b5bea13ad0ca89a054_133)] [added: [54](#i977290c73bc34362a4261d6a76667593_133)] | | |

| | | | [Note [removed: 13.](#i6b9bcdaa820142b5bea13ad0ca89a054_136)] [added: 13.](#i977290c73bc34362a4261d6a76667593_136)] | | | [removed: [Revenues](#i6b9bcdaa820142b5bea13ad0ca89a054_136)] [added: [Revenues](#i977290c73bc34362a4261d6a76667593_136)] | | | [removed: [55](#i6b9bcdaa820142b5bea13ad0ca89a054_136)] [added: [56](#i977290c73bc34362a4261d6a76667593_136)] | | |

| | | | [Note [removed: 14.](#i6b9bcdaa820142b5bea13ad0ca89a054_142)] [added: 14.](#i977290c73bc34362a4261d6a76667593_142)] | | | [Share-Based [removed: Compensation](#i6b9bcdaa820142b5bea13ad0ca89a054_142)] [added: Compensation](#i977290c73bc34362a4261d6a76667593_142)] | | | [removed: [56](#i6b9bcdaa820142b5bea13ad0ca89a054_142)] [added: [57](#i977290c73bc34362a4261d6a76667593_142)] | | |

| | | | [Note [removed: 15.](#i6b9bcdaa820142b5bea13ad0ca89a054_145)] [added: 15.](#i977290c73bc34362a4261d6a76667593_145)] | | | [Retirement [removed: Plans](#i6b9bcdaa820142b5bea13ad0ca89a054_145)] [added: Plans](#i977290c73bc34362a4261d6a76667593_145)] | | | [removed: [58](#i6b9bcdaa820142b5bea13ad0ca89a054_145)] [added: [59](#i977290c73bc34362a4261d6a76667593_145)] | | |

| | | | [Note [removed: 16.](#i6b9bcdaa820142b5bea13ad0ca89a054_148)] [added: 16.](#i977290c73bc34362a4261d6a76667593_148)] | | | [Special [removed: Charges](#i6b9bcdaa820142b5bea13ad0ca89a054_148)] [added: Charges](#i977290c73bc34362a4261d6a76667593_148)] | | | [removed: [62](#i6b9bcdaa820142b5bea13ad0ca89a054_148)] [added: [63](#i977290c73bc34362a4261d6a76667593_148)] | | |

| | | | [Note [removed: 17.](#i6b9bcdaa820142b5bea13ad0ca89a054_151)] [added: 17.](#i977290c73bc34362a4261d6a76667593_151)] | | | [Income [removed: Taxes](#i6b9bcdaa820142b5bea13ad0ca89a054_151)] [added: Taxes](#i977290c73bc34362a4261d6a76667593_151)] | | | [removed: [63](#i6b9bcdaa820142b5bea13ad0ca89a054_151)] [added: [64](#i977290c73bc34362a4261d6a76667593_151)] | | |

| | | | [Note [removed: 18.](#i6b9bcdaa820142b5bea13ad0ca89a054_154)] [added: 18.](#i977290c73bc34362a4261d6a76667593_154)] | | | [Commitments and [removed: Contingencies](#i6b9bcdaa820142b5bea13ad0ca89a054_154)] [added: Contingencies](#i977290c73bc34362a4261d6a76667593_154)] | | | [removed: [66](#i6b9bcdaa820142b5bea13ad0ca89a054_154)] [added: [66](#i977290c73bc34362a4261d6a76667593_154)] | | |

| | | | [Note [removed: 19.](#i6b9bcdaa820142b5bea13ad0ca89a054_157)] [added: 19.](#i977290c73bc34362a4261d6a76667593_157)] | | | [Supplemental Cash Flow [removed: Information](#i6b9bcdaa820142b5bea13ad0ca89a054_157)] [added: Information](#i977290c73bc34362a4261d6a76667593_157)] | | | [removed: [66](#i6b9bcdaa820142b5bea13ad0ca89a054_157)] [added: [66](#i977290c73bc34362a4261d6a76667593_157)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i6b9bcdaa820142b5bea13ad0ca89a054_160)] [added: Firm](#i977290c73bc34362a4261d6a76667593_160)] | | | | | | | | | [removed: [67](#i6b9bcdaa820142b5bea13ad0ca89a054_160)] [added: [67](#i977290c73bc34362a4261d6a76667593_160)] | | |

| | | | [Schedule II – Valuation and Qualifying [removed: Accounts](#i6b9bcdaa820142b5bea13ad0ca89a054_166)] [added: Accounts](#i977290c73bc34362a4261d6a76667593_166)] | | | | | | [removed: [69](#i6b9bcdaa820142b5bea13ad0ca89a054_166)] [added: [69](#i977290c73bc34362a4261d6a76667593_166)] | | |

For each of the years in the three-year period ended December [removed: 31, 2022][added: 30, 2023]

| *(In millions, except per share data)* | | | [removed: 2022] [added: 2023] | | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | |

| Manufacturing product revenues | | | $ | [removed: 10,945] [added: 11,573] | | $ | [removed: 10,541] [added: 10,945] | | $ | [removed: 9,720] [added: 10,541] | |

| Manufacturing service revenues | | | [removed: 1,872] [added: 2,055] | | | [removed: 1,792] [added: 1,872] | | | [removed: 1,876] [added: 1,792] | | |

| Finance revenues | | | [removed: 52] [added: 55] | | | [removed: 49] [added: 52] | | | [removed: 55] [added: 49] | | |

| Total revenues | | | [removed: 12,869] [added: 13,683] | | | [removed: 12,382] [added: 12,869] | | | [removed: 11,651] [added: 12,382] | | |

| Cost of products sold | | | [removed: 9,380] [added: 9,770] | | | [removed: 8,955] [added: 9,380] | | | [removed: 8,715] [added: 8,955] | | |

| Cost of services sold | | | [removed: 1,420] [added: 1,635] | | | [removed: 1,342] [added: 1,420] | | | [removed: 1,379] [added: 1,342] | | |

| Selling and administrative expense | | | [removed: 1,186] [added: 1,225] | | | [removed: 1,221] [added: 1,186] | | | [removed: 1,045] [added: 1,221] | | |

| Interest expense, net | | | [removed: 107] [added: 77] | | | [removed: 142] [added: 107] | | | [removed: 166] [added: 142] | | |

| Special charges | | | [removed: —] [added: 126] | | | [removed: 25] [added: —] | | | [removed: 147] [added: 25] | | |

| Non-service components of pension and postretirement income, net | | | [removed: (240)] [added: (237)] | | | [removed: (159)] [added: (240)] | | | [removed: (83)] [added: (159)] | | |

| Gain on business disposition | | | — | | | [removed: (17)] [added: —] | | | [removed: —] [added: (17)] | | |

| Total costs, expenses and other | | | [removed: 11,853] [added: 12,596] | | | [removed: 11,509] [added: 11,853] | | | [removed: 11,369] [added: 11,509] | | |

| Income from continuing operations before income taxes | | | [removed: 1,016] [added: 1,087] | | | [removed: 873] [added: 1,016] | | | [removed: 282] [added: 873] | | |

| | | | [Note 5.](#i977290c73bc34362a4261d6a76667593_112) | | | [Inventories](#i977290c73bc34362a4261d6a76667593_112) | | | [48](#i977290c73bc34362a4261d6a76667593_112) | | |

| | | | [Note 7.](#i977290c73bc34362a4261d6a76667593_118) | | | Accounts Payable and Other [Current Liabilities](#i977290c73bc34362a4261d6a76667593_118) | | | [49](#i977290c73bc34362a4261d6a76667593_118) | | |

| | | | [Note 8.](#i977290c73bc34362a4261d6a76667593_121) | | | [Leases](#i977290c73bc34362a4261d6a76667593_121) | | | [50](#i977290c73bc34362a4261d6a76667593_121) | | |

| Discontinued operations | | | (0.01) | | | — | | | — | | |

| Basic Earnings per share | | | $ | 4.61 | | $ | 4.05 | | $ | 3.33 | |

| Discontinued operations | | | (0.01) | | | — | | | — | | |

| Diluted Earnings per share | | | $ | 4.56 | | $ | 4.01 | | $ | 3.30 | |

For each of the years in the three-year period ended December 30, 2023

| Net income | | | $ | 921 | | $ | 861 | | $ | 746 | |

| Purchases of common stock, including excise tax* | | | — | | | — | | | (1,178) | | | — | | | — | | | (1,178) | | |

| Retirement of treasury stock | | | (2) | | | (149) | | | 1,097 | | | (946) | | | — | | | — | | |

| Balance at December 30, 2023 | | | $ | 24 | | $ | 1,910 | | $ | (165) | | $ | 5,862 | | $ | (644) | | $ | 6,987 | |

Includes amounts accrued for excise tax imposed on common share repurchases beginning on January 1, 2023 as part of the Inflation Reduction Act that totaled $10 million in 2023.*

For each of the years in the three-year period ended December 30, 2023

| Asset impairments | | | 88 | | | 2 | | | 13 | | |

| Inventories | | | (359) | | | (55) | | | 45 | | |

For each of the years in the three-year period ended December 30, 2023

| Asset impairments | | | 88 | | | 2 | | | 13 | | | — | | | — | | | — | | |

| Inventories | | | (359) | | | (55) | | | 45 | | | — | | | — | | | — | | |

Revenue is then recognized for the transaction price allocated to the

In 2023, our cumulative catch-up adjustments increased segment profit by $44 million and net income by $34 million, ($0.17 per diluted share).

Pipistrel is a manufacturer of light aircraft and gliders with both electric and combustion engines and is included in the Textron eAviation segment.

| Balance at December 30, 2023 | | | $ | 633 | | $ | 37 | | $ | 1,010 | | $ | 470 | | $ | 145 | | $ | 2,295 | |

In 2023, we recognized $27 million of intangible asset impairment charges, primarily related to customer relationships and contractual agreements, as discussed in Note 16.

| | | | 894 | | | 879 | | |

| *(In millions)* | | | December 30, 2023 | | | December 31, 2022 | | |

| *(In millions)* | | | December 30, 2023 | | | December 31, 2022 | | |

| | | | | | | | | | | | | 7,724 | | | 7,607 | | |

Accounts Payable and Other Current Liabilities

Accounts Payable

*Supplier Financing Arrangement*

We have a financing arrangement with one of our suppliers for a maximum amount of $175 million that extends payment terms for up to 190 days from the receipt of goods and provides for the supplier to be paid by a financial institution earlier than maturity.

This financing arrangement expires in April 2024.

As of December 30, 2023 and December 31, 2022, the amount due under this supplier financing arrangement was $125 million and $110 million, respectively.

| *(In millions)* | | | December 30, 2023 | | | December 31, 2022 | | |

| *(In millions)* | | | 2023 | | | 2022 | | | 2021 | | |

| *(Dollars in millions)* | | | December 30, 2023 | | | December 31, 2022 | | |

| *(In millions)* | | | December 30, 2023 | | | December 31, 2022 | | |

| 6.10% due 2033 | | | 350 | | | — | | |

| Total | | | $ | 365 | | $ | 382 | | $ | 355 | | $ | 405 | | $ | 303 | |

| | | | [Note 5.](#i6b9bcdaa820142b5bea13ad0ca89a054_109) | | | [Inventories](#i6b9bcdaa820142b5bea13ad0ca89a054_109) | | | [48](#i6b9bcdaa820142b5bea13ad0ca89a054_109) | | |

| | | | [Note 8.](#i6b9bcdaa820142b5bea13ad0ca89a054_118) | | | [Leases](#i6b9bcdaa820142b5bea13ad0ca89a054_118) | | | [49](#i6b9bcdaa820142b5bea13ad0ca89a054_118) | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at January 4, 2020 | | | $ | 29 | | $ | 1,674 | | $ | (20) | | $ | 5,682 | | $ | (1,847) | | $ | 5,518 | |

| Purchases of common stock | | | — | | | — | | | (183) | | | — | | | — | | | (183) | | |

| Asset impairments and TRU inventory charge | | | 2 | | | 13 | | | 116 | | |

| Inventories | | | (55) | | | 45 | | | 434 | | |

| Payments on borrowings against corporate-owned life insurance policies | | | — | | | — | | | (377) | | |

| Asset impairments and TRU inventory charge | | | 2 | | | 13 | | | 116 | | | — | | | — | | | — | | |

| Inventories | | | (55) | | | 45 | | | 434 | | | — | | | — | | | — | | |

| Net proceeds (payments) from corporate-owned life insurance policies | | | 23 | | | (2) | | | 22 | | | — | | | — | | | — | | |

| Proceeds from borrowings against corporate-owned life insurance policies | | | — | | | — | | | 377 | | | — | | | — | | | — | | |

| Payments on borrowings against corporate-owned life insurance policies | | | — | | | — | | | (377) | | | — | | | — | | | — | | |

standalone selling price of each performance obligation.

2022 Business Acquisition

Beginning in the second quarter of 2022, this business is included in a new reporting segment, Textron eAviation, which combines the operating results of Pipistrel along with other research and development initiatives related to sustainable aviation solutions.

We allocated the purchase price for this business to the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date and recorded $141 million in goodwill, related to expected synergies and the value of the assembled workforce, and $76 million in intangible assets, primarily developed technologies.

The intangible assets were primarily valued using the relief-from-royalty method.

This method utilizes significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy and requires us to make estimates and assumptions about sales, growth rates, royalty rates and discount rates based on marketplace data.

| Balance at January 2, 2021 | | | $ | 631 | | $ | 35 | | $ | 1,009 | | $ | 482 | | $ | — | | $ | 2,157 | |

| | | | 879 | | | 862 | | |

At December 31, 2022 and January 1, 2022, finance receivables of $73 million and $93 million, respectively, have been pledged as collateral for TFC’s debt of $28 million and $43 million, respectively.

| | | | | | | | | | | | | 7,607 | | | 7,426 | | |

| Variable-rate notes due 2022-2027 (weighted-average rate of 5.81% and 1.57%, respectively)* | | | 5 | | | 7 | | |

| Fixed-rate notes due 2022-2028 (weighted-average rate of 3.39% and 3.29%, respectively)* | | | 23 | | | 36 | | |

Notes amortize on a monthly basis and are secured by finance receivables as described in Note 4.*

| Total | | | $ | 20 | | $ | 367 | | $ | 384 | | $ | 356 | | $ | 406 | |

This new facility replaces the existing five-year facility, which was scheduled to expire in October 2024.

At December 31, 2022, there were $9 million of outstanding letters of credit issued under the new facility, and at January 1, 2022, there were $9 million of outstanding letters of credit issued under the prior facility.

Interest is variable at the three-month London Interbank Offered Rate + 1.735%.

At December 31, 2022, we had a swap agreement for a notional amount of $272 million with a maturity of August 2023 and a swap agreement for a notional amount of $25 million, maturing in June 2025, with a combined fair value of an $8 million asset.

At January 1, 2022, we had a swap agreement for a notional amount of $289 million with a maturity of August 2023 and an insignificant fair value.

| Balance at January 2, 2021 | | | $ | (1,780) | | $ | 42 | | $ | (1) | | $ | (1,739) | |

Segment profit for the manufacturing segments includes non-service components of net periodic benefit cost/(income) and excludes interest expense, net; certain corporate expenses; gains/losses on major business dispositions; special charges; and an inventory charge related to the 2020 COVID-19 restructuring plan, as discussed in Note 16.

| Bell | | | 3,091 | | | 3,364 | | | 3,309 | | | 317 | | | 408 | | | 462 | | |

| Industrial | | | 3,465 | | | 3,130 | | | 3,000 | | | 165 | | | 140 | | | 111 | | |

| Total | | | $ | 12,869 | | $ | 12,382 | | $ | 11,651 | | $ | 1,223 | | $ | 1,134 | | $ | 751 | |

| Inventory charge* | | | | | | | | | | | | — | | | — | | | (55) | | |

| Bell | | | 2,857 | | | 3,382 | | | 80 | | | 92 | | | 117 | | | 90 | | | 87 | | | 91 | | |

We performed an evaluation of the effectiveness of our disclosure controls and procedures as of December [removed: 31, 2022.][added: 30, 2023.]

Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were operating and effective as of December [removed: 31, 2022.][added: 30, 2023.]

Based on our evaluation under the 2013 Framework, we have concluded that Textron Inc. maintained, in all material respects, effective internal control over financial reporting as of December [removed: 31, 2022.][added: 30, 2023.]

The independent registered public accounting firm, Ernst & Young LLP (PCAOB ID: 42), has audited the Consolidated Financial Statements of Textron Inc. and has issued an attestation report on Textron’s internal controls over financial reporting as of December [removed: 31, 2022,] [added: 30, 2023,] as stated in its report, which is included herein.

We have audited Textron Inc.’s internal control over financial reporting as of December [removed: 31, 2022,] [added: 30, 2023,] based on criteria established in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework), (the COSO criteria).

In our opinion, Textron, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December [removed: 31, 2022,] [added: 30, 2023,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Consolidated Balance Sheets of the Company as of December [removed: 31, 2022] [added: 30, 2023] and [removed: January 1,] [added: December 31,] 2022, and the related Consolidated Statements of Operations, Comprehensive Income, Shareholders' Equity and Cash Flows for each of the three years in the period ended December [removed: 31, 2022,] [added: 30, 2023,] and the related notes and the financial statement schedule [removed: contained on page 70,] [added: listed in the Index at Item 8] of the Company and our report dated February [removed: 16, 2023] [added: 12, 2024] expressed an unqualified opinion thereon.

February 12, 2024

February 16, 2023

None of our directors or executive officers adopted or terminated a “Rule 10b5-1 trading arrangement” or adopted or terminated a “non-Rule 10b5-1 trading arrangement” (as such terms are defined in Item 408 of Regulation S-K) during the quarter ended December 30, 2023.

The information appearing under “ELECTION OF DIRECTORS — Nominees for Director,” “CORPORATE GOVERNANCE — Corporate Governance Guidelines and Policies,” “— Code of Ethics,” and “— Board Committees — *Audit Committee*,” in the Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Shareholders is incorporated by reference into this Annual Report on Form 10-K.

The information appearing under “CORPORATE GOVERNANCE — Compensation of Directors,” “COMPENSATION COMMITTEE REPORT,” “COMPENSATION DISCUSSION AND ANALYSIS” and “EXECUTIVE COMPENSATION” in the Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Shareholders is incorporated by reference into this Annual Report on Form 10-K.

The information appearing under “SECURITY OWNERSHIP” and “EXECUTIVE COMPENSATION – Equity Compensation Plan Information” in the Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Shareholders is incorporated by reference into this Annual Report on Form 10-K.

The information appearing under “CORPORATE GOVERNANCE — Director Independence” and “EXECUTIVE COMPENSATION — Transactions with Related Persons” in the Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Shareholders is incorporated by reference into this Annual Report on Form 10-K.

The information appearing under “RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM — Fees to Independent Auditors” in the Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Shareholders is incorporated by reference into this Annual Report on Form 10-K.

Financial Statements and Schedules — See Index on Page [removed: 32.][added: 33.]

| [removed: 10.2] [added: 10.2A] | | | | | | [Amended and Restated Textron Inc. Short-Term Incentive Plan. Incorporated by reference to Exhibit 10.1 to Textron’s Quarterly Report on Form 10-Q for the fiscal quarter [removed: ended October] [added: ended](https://www.sec.gov/Archives/edgar/data/217346/000021734620000069/q3202010qex-101.htm) [October] 3, [removed: 2020.](https://www.sec.gov/Archives/edgar/data/217346/000021734620000069/q3202010qex-101.htm)] [added: 2020](https://www.sec.gov/Archives/edgar/data/217346/000021734620000069/q3202010qex-101.htm)[.](https://www.sec.gov/Archives/edgar/data/217346/000021734620000069/q3202010qex-101.htm)] | | |

| [removed: 10.3B] [added: 10.3C] | | | | | | [Form of Non-Qualified Stock Option Agreement under 2015 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.1 to Textron’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 2, 2016 (SEC File No. 1-5480).](https://www.sec.gov/Archives/edgar/data/217346/000110465916114825/a16-6092_1ex10d1.htm) | | |

| [removed: 10.3C] [added: 10.3D] | | | | | | [Form of Stock-Settled Restricted Stock Unit (with Dividend Equivalents) Grant Agreement under 2015 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.2 to Textron’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 2, 2016 (SEC File No. 1-5480).](https://www.sec.gov/Archives/edgar/data/217346/000110465916114825/a16-6092_1ex10d2.htm) | | |

| [removed: 10.3D] [added: 10.3E] | | | | | | [Form of Performance Share Unit Grant Agreement under 2015 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.3 to Textron’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 2, 2016 (SEC File No. 1-5480).](https://www.sec.gov/Archives/edgar/data/217346/000110465916114825/a16-6092_1ex10d3.htm) | | |

| [removed: 10.3E] [added: 10.3F] | | | | | | [Form of Performance Share Unit Grant Agreement under 2015 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.2 to Textron’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 4, 2020.](https://www.sec.gov/Archives/edgar/data/217346/000110465920055073/txt-20200404xex10d2.htm) | | |

| [removed: 10.3F] [added: 10.3G] | | | | | | [Form of Stock-Settled Restricted Stock Unit (with Dividend Equivalents) Grant Agreement under 2015 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.1 to Textron's Quarterly Report on Form 10-Q for the fiscal quarter ended April 4, 2020.](https://www.sec.gov/Archives/edgar/data/217346/000110465920055073/txt-20200404xex10d1.htm) | | |

| 10.9 | | | | | | [Form of Indemnity Agreement between Textron and its executive officers. Incorporated by reference to Exhibit 10.9 to Textron’s Annual Report on Form 10-K for the fiscal year ended December 30, [removed: 2017.](https://www.sec.gov/Archives/edgar/data/217346/000110465918009905/a18-1018_1ex10d9.htm)] [added: 2017](https://www.sec.gov/Archives/edgar/data/217346/000110465918009905/a18-1018_1ex10d9.htm)] | | |

| 10.16 | | | | | | [Director [removed: Compensation.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/q4202210k-exx1016.htm)] [added: Compensation. Incorporated by reference to Exhibit 10.16 to Textron's Annual Report on Form 10-K for the fiscal year ended December 31, 202](https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/q4202210k-exx1016.htm)[2.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/q4202210k-exx1016.htm)] | | |

| 10.18 | | | | | | [Credit Agreement, dated as of [removed: October](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm) [21](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm)[, 20](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm)[22](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm)[,] [added: October 21, 2022,] among Textron, the Lenders listed therein, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A. and Citibank, N.A., as Syndication Agents, and MUFG Bank, Ltd., as Documentation Agent. Incorporated by reference to Exhibit 10.1 to Textron’s Quarterly Report on Form 10-Q for the fiscal quarter [removed: ended](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm) [Octobe](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm)[r](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm) [](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm)[1](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm)[, 20](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm)[22](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm)[.](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm)] [added: ended October 1, 2022.](https://www.sec.gov/Archives/edgar/data/217346/000021734622000025/q3202210qex-101.htm)] | | |

| 21 | | | | | | [Certain subsidiaries of Textron. Other subsidiaries, which considered in the aggregate do not constitute a significant subsidiary, are omitted from such [removed: list.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/q4202210k-exx21.htm)] [added: list.](https://www.sec.gov/Archives/edgar/data/217346/000021734624000017/q4202310k-exx21.htm)] | | |

| 23 | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/q4202210k-exx23.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/217346/000021734624000017/q4202310k-exx23.htm)] | | |

| 24 | | | | | | [Power of [removed: attorney.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/q4202210k-exx24.htm)] [added: attorney.](https://www.sec.gov/Archives/edgar/data/217346/000021734624000017/q4202310k-exx24.htm)] | | |

| 31.1 | | | | | | [Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/q4202210k-exx311.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/217346/000021734624000017/q4202310k-exx311.htm)] | | |

| 31.2 | | | | | | [Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/q4202210k-exx312.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/217346/000021734624000017/q4202310k-exx312.htm)] | | |

| 32.1 | | | | | | [Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/q4202210k-exx321.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/217346/000021734624000017/q4202310k-exx321.htm)] | | |

| 32.2 | | | | | | [Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/q4202210k-exx322.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/217346/000021734624000017/q4202310k-exx322.htm)] | | |

| 101 | | | | | | The following materials from Textron Inc.’s Annual Report on Form 10-K for the year ended December [removed: 31, 2022,] [added: 30, 2023,] formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, (vi) the Notes to the Consolidated Financial Statements, and (vii) Schedule II – Valuation and Qualifying Accounts. | | |

| 10.2B | | | | | | [Amend](https://www.sec.gov/Archives/edgar/data/217346/000021734623000033/q3202310qex-101.htm)[ment No. 1 to Amended](https://www.sec.gov/Archives/edgar/data/217346/000021734623000033/q3202310qex-101.htm) [and Restated Textron Inc. Short-Term Incentive Plan. Incorporated by reference to Exhibit 10.1 to Textron’s Quarterly Report on Form 10-Q for the fiscal quarter ended](https://www.sec.gov/Archives/edgar/data/217346/000021734623000033/q3202310qex-101.htm) [September 30, 2023](https://www.sec.gov/Archives/edgar/data/217346/000021734623000033/q3202310qex-101.htm). | | |

| 10.3B | | | | | | [Amendment No. 1 to Textron](https://www.sec.gov/Archives/edgar/data/217346/000021734623000033/q3202310qex-102.htm) [Inc. 2015 Long-Term Incentive Plan. Incorporated by reference to Exhibit 10.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000033/q3202310qex-102.htm)[2](https://www.sec.gov/Archives/edgar/data/217346/000021734623000033/q3202310qex-102.htm) [to Textron’s Quarterly Report on Form 10-Q for the fiscal quarter ended](https://www.sec.gov/Archives/edgar/data/217346/000021734623000033/q3202310qex-102.htm) [September 30, 2023.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000033/q3202310qex-102.htm)[.](https://www.sec.gov/Archives/edgar/data/217346/000021734623000033/q3202310qex-102.htm) | | |

| | | | | | | | | |

| 97 | | | | | | [Textron Inc. Recovery Policy.](https://www.sec.gov/Archives/edgar/data/217346/000021734624000017/q4202310k-exx97.htm) | | |

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Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on this [removed: 16th] [added: 12th] day of February [removed: 2023.][added: 2024.]

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below on this [removed: 16th] [added: 12th] day of February [removed: 2023] [added: 2024] by the following persons on behalf of the registrant and in the capacities indicated:

| | | | Michael X. Garrett | | | | | | Director | | |

| | | | | | | | | | | | |

| | | | * | | | | | | | | |

| | | | James T. Conway | | | | | | Director | | |

| | | | Ralph D. Heath | | | | | | Director | | |