filings.toolsItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Business Environment
Recent changes to the United States trade policy have resulted in new or higher tariffs on goods imported from numerous countries, and some countries have imposed retaliatory tariffs on imports from the United States. We are principally a North American manufacturer and 71% of our 2024 revenues were generated in the U.S. Our aircraft products and components manufactured in Canada and Mexico are largely exempt from newly imposed tariffs on Canadian and Mexican imports as USMCA (United States-Mexico-Canada Agreement) compliant. In addition, our operations outside of North America primarily source materials and components from outside of North America and manufacture products for non-U.S. customers. Many of our businesses also source materials and components from outside of North America. These businesses have been – or could be in the future – impacted by these newly imposed U.S. tariffs. To date, we have not experienced a material adverse impact from these tariffs. We will continue to evaluate the potential impact of these tariffs and any further developments or changes in global tariff policies on our business and financial position.
Consolidated Results of Operations
| Three Months Ended | ||||||||||||||||||||
| (Dollars in millions) | March 29, 2025 | March 30, 2024 | % Change | |||||||||||||||||
| Revenues | $ | 3,306 | $ | 3,135 | 5% | |||||||||||||||
| Cost of sales | 2,672 | 2,470 | 8% | |||||||||||||||||
| Gross margin as a % of Manufacturing revenues | 18.8% | 20.8% | ||||||||||||||||||
| Research and development costs | $ | 132 | $ | 144 | (8)% | |||||||||||||||
| Selling and administrative expense | 298 | 316 | (6)% | |||||||||||||||||
| Interest expense, net | 29 | 20 | 45% | |||||||||||||||||
| Special charges | — | 14 | (100)% | |||||||||||||||||
| Non-service components of pension and postretirement income, net | 66 | 66 | —% |
An analysis of our consolidated operating results is set forth below. A more detailed analysis of our segments’ operating results is provided in the Segment Analysis section on pages 21 to 24.
Revenues
Revenues increased $171 million, 5%, in the first quarter of 2025, compared with the first quarter of 2024. The revenue increase primarily included the following factors:
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Higher Bell revenues of $256 million, due to higher military volume of $154 million, primarily for the U.S. Army's Future Long Range Assault Aircraft (FLRAA) program and for military sustainment programs, and higher commercial revenues of $102 million.
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Higher Textron Aviation revenues of $24 million, largely reflecting higher aftermarket parts and services revenues of $27 million.
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Lower Industrial revenues of $100 million, with $62 million at Textron Specialized Vehicles, reflecting lower volume and mix, primarily in the golf products, and $38 million at Kautex, largely due to lower volume.
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Lower Textron Systems revenues of $10 million, primarily due to lower volume.
Manufacturing group revenues increased $170 million in the first quarter of 2025, compared with the first quarter of 2024, reflecting a $339 million increase in product revenues, partially offset by a $169 million decrease in service revenues. The decrease in service revenues was largely related to the classification of revenues for the FLRAA program, which was service-related prior to the transition of the program to the Engineering and Manufacturing Development phase in the third quarter of 2024 when it became product-related.
Cost of Sales
Cost of sales includes cost of products and services sold for the Manufacturing group. Cost of sales increased $202 million, 8%, in the first quarter of 2025, compared with the first quarter of 2024, largely due to higher net volume and mix of $122 million and a $59 million impact from inflation and higher LIFO inventory provision. Gross margin as a percentage of Manufacturing revenues decreased 200 basis points in the first quarter of 2025, primarily due to lower margin at the Bell segment.
Research and Development Costs
Research and development costs decreased $12 million, 8%, in the first quarter of 2025, compared with the first quarter of 2024, largely reflecting a $10 million decrease at the Textron Systems segment related to timing of project expenditures.
Selling and Administrative Expense
Selling and administrative expense decreased $18 million, 6%, in the first quarter of 2025, compared with the first quarter of 2024, primarily due to lower share-based compensation expense, partially offset by a 2024 recovery of amounts that were previously written off related to one customer relationship in the Finance segment.
Interest Expense, Net
Interest expense, net includes interest expense for both the Finance and Manufacturing borrowing groups, with interest on intercompany borrowings eliminated, and interest income earned on cash and equivalents for the Manufacturing borrowing group. In the first quarter of 2025, interest expense, net increased $9 million, 45%, compared with the first quarter of 2024, reflecting lower interest income. Gross interest expense totaled $38 million in both the first quarter of 2025 and 2024.
Special Charges
Special charges include restructuring activities as discussed in Note 13 to the Consolidated Financial Statements on page 18.
Income Taxes
Our effective tax rate for the first quarter of 2025 and 2024 was 14.1% and 15.2%, respectively. In the first quarter of 2025, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the favorable impact of research and development credits and tax deductions for foreign-derived intangible income. In the first quarter of 2024, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the recognition of excess tax benefits related to share-based compensation, the favorable impact of research and development credits, and tax deductions for foreign-derived intangible income.
Backlog
Our backlog is summarized below:
| (In millions) | March 29, 2025 | December 28, 2024 | ||||||
| Textron Aviation | $ | 7,868 | $ | 7,845 | ||||
| Bell | 7,052 | 7,469 | ||||||
| Textron Systems | 2,322 | 2,594 | ||||||
| Total backlog | $ | 17,242 | $ | 17,908 |
Segment Analysis
We operate in, and report financial information for, the following six operating segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation and Finance. Segment profit is an important measure used for evaluating performance and for decision-making purposes. Segment profit for the manufacturing segments excludes the non-service components of pension and postretirement income, net; LIFO inventory provision; intangible asset amortization; interest expense, net for Manufacturing group; certain corporate expenses; gains/losses on major business dispositions; and special charges. The operating costs used to derive segment profit for our manufacturing segments includes cost of sales, research and development costs and selling and administrative expense. The cost of sales discussed in this Segment Analysis section excludes the LIFO inventory provision and intangible asset amortization discussed above that are reported within Cost of products sold or Cost of services sold on the Consolidated Statement of Operations. The measurement for the Finance segment includes interest income and expense along with intercompany interest income and expense.
In our discussion of comparative results for the Manufacturing group, material changes in revenues and segment profit for our commercial businesses typically are expressed in terms of product line revenues, including volume and mix and pricing; foreign exchange; acquisitions and dispositions; inflation; manufacturing efficiency; and changes in research and development costs and selling and administrative expense. For revenues, volume and mix represents changes in revenues from increases or decreases in the number of units delivered or services provided and the composition of products and/or services sold. For segment profit, volume and mix represents a change due to the number of units delivered or services provided and the composition of products and/or services sold at different profit margins. Pricing represents changes in unit pricing. Foreign exchange is the change resulting from translating foreign-denominated amounts into U.S. dollars at exchange rates that are different from the prior period. Revenues generated by acquired businesses are reflected in Acquisitions for a twelve-month period, while reductions in revenues and segment profit from the sale of businesses are reflected as Dispositions. Inflation represents higher material, wages, benefits, pension service cost or other costs. Manufacturing efficiency includes changes in material, labor and overhead variances to standards, typically due to scrap rates, labor efficiency or inefficiencies, facility usage and other manufacturing productivity inputs.
Approximately 25% of our 2024 revenues were derived from contracts with the U.S. Government, including those under the U.S. Government-sponsored foreign military sales program. For our segments that contract with the U.S. Government, material changes in revenues related to these contracts are expressed in terms of volume. Changes in segment profit for these contracts are typically expressed in terms of volume and mix and contract performance, which includes cumulative catch-up adjustments associated with
a) revisions to the transaction price that may reflect contract modifications or changes in assumptions related to award fees and other variable consideration or b) changes in the total estimated costs at completion due to improved or deteriorated operating performance.
Textron Aviation
| Three Months Ended | ||||||||||||||||||||
| (Dollars in millions) | March 29, 2025 | March 30, 2024 | % Change | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Aircraft | $ | 729 | $ | 732 | —% | |||||||||||||||
| Aftermarket parts and services | 483 | 456 | 6% | |||||||||||||||||
| Total revenues | 1,212 | 1,188 | 2% | |||||||||||||||||
| Cost of sales | 929 | 891 | 4% | |||||||||||||||||
| Research and development costs | 57 | 52 | 10% | |||||||||||||||||
| Selling and administrative expense | 99 | 102 | (3)% | |||||||||||||||||
| Segment profit | $ | 127 | $ | 143 | (11)% | |||||||||||||||
| Profit margin | 10.5% | 12.0% |
Textron Aviation’s revenues increased $24 million, 2%, in the first quarter of 2025, compared with the first quarter of 2024, largely reflecting higher aftermarket parts and services revenues of $27 million. Aircraft revenues were relatively unchanged reflecting the mix of aircraft sold, which included lower Citation jet volume and higher defense and commercial turboprop volume, and higher pricing. We delivered 31 Citation jets and 30 commercial turboprops in the first quarter of 2025, compared with 36 Citation jets and 20 commercial turboprops in the first quarter of 2024.
Textron Aviation’s cost of sales increased $38 million, 4%, in the first quarter of 2025, compared with the first quarter of 2024, largely reflecting inflation of $35 million, partially offset by lower net volume and mix discussed above.
Textron Aviation's segment profit decreased $16 million, 11%, in the first quarter of 2025, compared with the first quarter of 2024, largely reflecting lower net aircraft volume and mix, partially offset by higher aftermarket volume.
Bell
| Three Months Ended | ||||||||||||||||||||
| (Dollars in millions) | March 29, 2025 | March 30, 2024 | % Change | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Military aircraft and support programs | $ | 634 | $ | 480 | 32% | |||||||||||||||
| Commercial helicopters, parts and services | 349 | 247 | 41% | |||||||||||||||||
| Total revenues | 983 | 727 | 35% | |||||||||||||||||
| Cost of sales | 803 | 565 | 42% | |||||||||||||||||
| Research and development costs | 39 | 39 | —% | |||||||||||||||||
| Selling and administrative expense | 51 | 43 | 19% | |||||||||||||||||
| Segment profit | $ | 90 | $ | 80 | 13% | |||||||||||||||
| Profit margin | 9.2% | 11.0% |
Bell’s military and support programs revenues increased $154 million, 32%, in the first quarter of 2025, compared with the first quarter of 2024, primarily due to higher volume on the U.S. Army's FLRAA program and on military sustainment programs. Commercial helicopters, parts and services revenues increased $102 million, 41%, in the first quarter of 2025, compared with the first quarter of 2024, primarily due to higher volume and mix as we delivered 29 commercial helicopters in the first quarter of 2025, compared with 18 commercial helicopters in the first quarter of 2024.
Bell’s cost of sales increased $238 million, 42%, in the first quarter of 2025, compared with the first quarter of 2024, primarily due to higher volume and mix described above.
Bell’s segment profit increased $10 million, 13%, in the first quarter of 2025, compared with the first quarter of 2024, while its profit margin decreased 180 basis points, largely reflecting the impact of higher volume on lower margin FLRAA development activities and the mix of commercial helicopters, along with an $8 million increase in selling and administrative expense.
Textron Systems
| Three Months Ended | ||||||||||||||||||||
| (Dollars in millions) | March 29, 2025 | March 30, 2024 | % Change | |||||||||||||||||
| Revenues | $ | 296 | $ | 306 | (3)% | |||||||||||||||
| Cost of sales | 219 | 222 | (1)% | |||||||||||||||||
| Research and development costs | 8 | 18 | (56)% | |||||||||||||||||
| Selling and administrative expense | 29 | 28 | 4% | |||||||||||||||||
| Segment profit | $ | 40 | $ | 38 | 5% | |||||||||||||||
| Profit margin | 13.5% | 12.4% |
Textron Systems’ revenues decreased $10 million, 3%, in the first quarter of 2025, compared with the first quarter of 2024, largely due to lower volume, which included the impact of the cancellation of the Shadow program in 2024, partially offset by higher volume for the Ship-to-Shore Connector program.
Textron Systems’ research and development costs decreased $10 million, 56%, in the first quarter of 2025, compared with the first quarter of 2024, related to the timing of project expenditures.
Textron Systems’ segment profit increased $2 million, 5%, in the first quarter of 2025, compared with the first quarter of 2024, primarily due to the lower research and development costs, partially offset by lower volume.
Industrial
| Three Months Ended | ||||||||||||||||||||
| (Dollars in millions) | March 29, 2025 | March 30, 2024 | % Change | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Kautex | $ | 450 | $ | 488 | (8)% | |||||||||||||||
| Textron Specialized Vehicles | 342 | 404 | (15)% | |||||||||||||||||
| Total revenues | 792 | 892 | (11)% | |||||||||||||||||
| Cost of sales | 678 | 758 | (11)% | |||||||||||||||||
| Research and development costs | 14 | 20 | (30)% | |||||||||||||||||
| Selling and administrative expense | 70 | 85 | (18)% | |||||||||||||||||
| Segment profit | $ | 30 | $ | 29 | 3% | |||||||||||||||
| Profit margin | 3.8% | 3.3% |
Industrial segment revenues decreased $100 million, 11%, in the first quarter of 2025, compared with the first quarter of 2024, largely due to lower volume and mix. Textron Specialized Vehicles' revenues decreased $62 million, 15%, reflecting lower volume and mix, primarily in the golf products. Kautex revenues decreased $38 million, 8%, largely due to lower volume.
Industrial's cost of sales decreased $80 million, 11%, in the first quarter of 2025, compared with the first quarter of 2024, principally reflecting the impact of lower volume and mix described above.
Industrial's selling and administrative expense decreased $15 million, 18%, in the first quarter of 2025, compared with the first quarter of 2024, primarily reflecting lower compensation costs, which included the impact of headcount reductions from restructuring activities.
Segment profit for the Industrial segment was essentially unchanged in the first quarter of 2025, compared with the first quarter of 2024 as lower volume and mix was mostly offset by cost reductions resulting from restructuring activities.
Textron eAviation
| Three Months Ended | ||||||||||||||||||||
| (Dollars in millions) | March 29, 2025 | March 30, 2024 | % Change | |||||||||||||||||
| Revenues | $ | 7 | $ | 7 | —% | |||||||||||||||
| Cost of sales | 6 | 6 | —% | |||||||||||||||||
| Research and development costs | 14 | 15 | (7)% | |||||||||||||||||
| Selling and administrative expense | 4 | 4 | —% | |||||||||||||||||
| Segment loss | $ | (17) | $ | (18) | (6)% | |||||||||||||||
Textron eAviation segment revenues were unchanged and segment loss decreased $1 million in the first quarter of 2025, compared with the first quarter of 2024.
Finance
| Three Months Ended | ||||||||||||||
| (In millions) | March 29, 2025 | March 30, 2024 | ||||||||||||
| Revenues | $ | 16 | $ | 15 | ||||||||||
| Selling and administrative expense | 2 | (8) | ||||||||||||
| Interest expense, net | 4 | 5 | ||||||||||||
| Segment profit | $ | 10 | $ | 18 |
Finance segment revenues increased $1 million and segment profit decreased $8 million in the first quarter of 2025, compared with the first quarter of 2024. Selling and administrative expense in the first quarter of 2024 included an $8 million recovery of amounts that were previously written off related to one customer relationship.
Liquidity and Capital Resources
Our financings are conducted through two separate borrowing groups. The Manufacturing group consists of Textron consolidated with its majority-owned subsidiaries that operate in the Textron Aviation, Bell, Textron Systems, Industrial and Textron eAviation segments. The Finance group, which also is the Finance segment, consists of Textron Financial Corporation and its consolidated subsidiaries. We designed this framework to enhance our borrowing power by separating the Finance group. Our Manufacturing group operations include the development, production and delivery of tangible goods and services, while our Finance group provides financial services. Due to the fundamental differences between each borrowing group’s activities, investors, rating agencies and analysts use different measures to evaluate each group’s performance. To support those evaluations, we present balance sheet and cash flow information for each borrowing group within the Consolidated Financial Statements.
Key information that is utilized in assessing our liquidity is summarized below:
| (Dollars in millions) | March 29, 2025 | December 28, 2024 | ||||||
| Manufacturing group | ||||||||
| Cash and equivalents | $ | 1,194 | $ | 1,386 | ||||
| Debt | 3,394 | 3,247 | ||||||
| Shareholders’ equity | 7,275 | 7,204 | ||||||
| Capital (debt plus shareholders’ equity) | 10,669 | 10,451 | ||||||
| Net debt (net of cash and equivalents) to capital | 23% | 21% | ||||||
| Debt to capital | 32% | 31% | ||||||
| Finance group | ||||||||
| Cash and equivalents | $ | 51 | $ | 55 | ||||
| Debt | 340 | 341 |
We believe that our calculations of debt to capital and net debt to capital are useful measures as they provide a summary indication of the level of debt financing (i.e., leverage) that is in place to support our capital structure, as well as to provide an indication of the capacity to add further leverage. We expect to have sufficient cash to meet our needs based on our existing cash balances, the cash we expect to generate from our manufacturing operations and the availability of our existing credit facility.
Credit Facilities and Other Sources of Capital
Textron has a senior unsecured revolving credit facility for an aggregate principal amount of $1.0 billion, of which $100 million is available for the issuance of letters of credit. We may elect to increase the aggregate amount of commitments under the facility to up to $1.3 billion by designating an additional lender or by an existing lender agreeing to increase its commitment. The facility expires in October 2027 and provides for two one-year extensions at our option with the consent of lenders representing a majority of the commitments under the facility. At March 29, 2025 and December 28, 2024, there were no amounts borrowed against the facility and there were $9 million of outstanding letters of credit issued under the facility.
We also maintain an effective shelf registration statement filed with the Securities and Exchange Commission that allows us to issue an unlimited amount of public debt and other securities. On February 13, 2025, we issued $500 million of SEC-registered fixed-rate notes due in May 2035 with an annual interest rate of 5.50%. On March 3, 2025, we repaid our $350 million 3.875% Notes due in 2025.
Manufacturing Group Cash Flows
Cash flows for the Manufacturing group as presented in our Consolidated Statements of Cash Flows are summarized below:
| Three Months Ended | ||||||||
| (In millions) | March 29, 2025 | March 30, 2024 | ||||||
| Operating activities | $ | (114) | $ | (30) | ||||
| Investing activities | (10) | (60) | ||||||
| Financing activities | (75) | (635) |
In the first quarter of 2025, the net cash outflow from operating activities was $114 million, compared with a net cash outflow of $30 million in the first quarter of 2024. The $84 million increase in cash outflows was largely due to changes in working capital. We expect positive cash flows from operating activities for the full year.
Cash flows used in investing activities included $56 million and $66 million of capital expenditures in the first quarter of 2025 and 2024, respectively. In the first quarter of 2025, cash flows from investing activities also included $31 million of net proceeds from corporate-owned life insurance policies.
Cash flows used in financing activities in the first quarter of 2025 included $352 million of payments on long-term debt and $215 million of cash paid to repurchase an aggregate of 2.9 million shares of our common stock, largely offset by $495 million of net proceeds from the issuance of long-term debt. In the first quarter of 2024, cash flows used in financing activities included $352 million of payments on long-term debt and $317 million of cash paid to repurchase an aggregate of 3.6 million shares of our common stock.
Finance Group Cash Flows
Cash flows for the Finance group as presented in our Consolidated Statements of Cash Flows are summarized below:
| Three Months Ended | ||||||||
| (In millions) | March 29, 2025 | March 30, 2024 | ||||||
| Operating activities | $ | 3 | $ | 1 | ||||
| Investing activities | (4) | 19 | ||||||
| Financing activities | (3) | (2) |
The Finance group’s cash flows from investing activities included collections on finance receivables totaling $29 million and $47 million in the first quarter of 2025 and 2024, respectively, and finance receivable originations of $33 million and $28 million, respectively.
Consolidated Cash Flows
The consolidated cash flows after elimination of activity between the borrowing groups, are summarized below:
| Three Months Ended | ||||||||
| (In millions) | March 29, 2025 | March 30, 2024 | ||||||
| Operating activities | $ | (124) | $ | (7) | ||||
| Investing activities | (1) | (63) | ||||||
| Financing activities | (78) | (637) |
In the first quarter of 2025, the net cash outflow from operating activities was $124 million, compared with a net cash outflow of $7 million in the first quarter of 2024. The $117 million increase in cash outflows was largely due to changes in working capital and a net cash outflow of $35 million from captive financing activities.
Cash flows used in investing activities included $56 million and $66 million of capital expenditures in the first quarter of 2025 and 2024, respectively. In the first quarter of 2025, cash flows from investing activities also included $31 million of net proceeds from corporate-owned life insurance policies.
Cash flows used in financing activities in the first quarter of 2025 included $355 million of payments on long-term debt and $215 million of cash paid to repurchase shares of our outstanding common stock, largely offset by $495 million of net proceeds from the issuance of long-term debt. In the first quarter of 2024, cash flows used in financing activities included $365 million of payments on long-term debt and $317 million of cash paid to repurchase shares of our outstanding common stock.
Captive Financing and Other Intercompany Transactions
The Finance group provides financing primarily to purchasers of new and pre-owned Textron Aviation aircraft and Bell helicopters manufactured by our Manufacturing group, otherwise known as captive financing. In the Consolidated Statements of Cash Flows, cash received from customers is reflected as operating activities when received from third parties. However, in the cash flow information provided for the separate borrowing groups, cash flows related to captive financing activities are reflected based on the operations of each group. For example, when product is sold by our Manufacturing group to a customer and is financed by the Finance group, the origination of the finance receivable is recorded within investing activities as a cash outflow in the Finance group’s statement of cash flows. Meanwhile, in the Manufacturing group’s statement of cash flows, the cash received from the Finance group on the customer’s behalf is recorded within operating cash flows as a cash inflow. Although cash is transferred between the two borrowing groups, there is no cash transaction reported in the consolidated cash flows at the time of the original financing. These captive financing activities, along with all significant intercompany transactions, are reclassified or eliminated from the Consolidated Statements of Cash Flows.
Reclassification adjustments included in the Consolidated Statements of Cash Flows on page 6 are summarized below:
| Three Months Ended | ||||||||
| (In millions) | March 29, 2025 | March 30, 2024 | ||||||
| Reclassification adjustments from investing activities to operating activities: | ||||||||
| Finance receivable originations for Manufacturing group inventory sales | $ | (33) | $ | (17) | ||||
| Cash received from customers | 20 | 39 | ||||||
| Total reclassification adjustments from investing activities to operating activities | $ | (13) | $ | 22 |
Critical Accounting Estimates Update
Our Consolidated Financial Statements are prepared in conformity with U.S. generally accepted accounting principles, which require us to make estimates and assumptions that affect the amounts reported in the financial statements. The accounting estimates that we believe are most critical to the portrayal of our financial condition and results of operations are reported in Item 7 of our 2024 Annual Report on Form 10-K. The following section provides an update of the year-end disclosure.
Revenue Recognition
A substantial portion of our revenues is related to long-term contracts with the U.S. Government, including those under the U.S. Government-sponsored foreign military sales program, for the design, development, manufacture or modification of aerospace and defense products as well as related services. We generally use the cost-to-cost method to measure progress for these contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts. Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred.
Changes in our estimate of the total expected cost or in the transaction price for a contract typically impact our profit booking rate. We utilize the cumulative catch-up method of accounting to recognize the impact of these changes on our profit booking rate for a contract. Under this method, the inception-to-date impact of a profit adjustment on a contract is recognized in the period the adjustment is identified. The impact of our cumulative catch-up adjustments on segment profit recognized in prior periods is presented below:
| Three Months Ended | ||||||||||||||
| (In millions) | March 29, 2025 | March 30, 2024 | ||||||||||||
| Gross favorable | $ | 27 | $ | 43 | ||||||||||
| Gross unfavorable | (10) | (30) | ||||||||||||
| Net adjustments | $ | 17 | $ | 13 |
Forward-Looking Information
Certain statements in this Quarterly Report on Form 10-Q and other oral and written statements made by us from time to time are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which may describe strategies, goals, outlook or other non-historical matters, or project revenues, income, returns or other financial measures, often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “guidance,” “project,” “target,” “potential,” “will,” “should,” “could,” “likely” or “may” and similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. In addition to those factors described in our 2024 Annual Report on Form 10-K under “Risk Factors,” among the factors that could cause actual results to differ materially from past and projected future results are the following:
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Interruptions in the U.S. Government’s ability to fund its activities and/or pay its obligations;
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Changing priorities or reductions in the U.S. Government defense budget, including those related to military operations in foreign countries;
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Our ability to perform as anticipated and to control costs under contracts with the U.S. Government;
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The U.S. Government’s ability to unilaterally modify or terminate its contracts with us for the U.S. Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, or, under certain circumstances, to withhold payment or suspend or debar us as a contractor eligible to receive future contract awards;
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Changes in foreign military funding priorities or budget constraints and determinations, or changes in government regulations or policies on the export and import of military and commercial products;
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Volatility in the global economy or changes in worldwide political conditions that adversely impact demand for our products;
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Volatility in interest rates or foreign exchange rates and inflationary pressures;
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Risks related to our international business, including establishing and maintaining facilities in locations around the world and relying on joint venture partners, subcontractors, suppliers, representatives, consultants and other business partners in connection with international business, including in emerging market countries;
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Our Finance segment’s ability to maintain portfolio credit quality or to realize full value of receivables;
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Performance issues with key suppliers or subcontractors;
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Legislative or regulatory actions, both domestic and foreign, impacting our operations or demand for our products;
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Our ability to control costs and successfully implement various cost-reduction activities;
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The efficacy of research and development investments to develop new products or unanticipated expenses in connection with the launching of significant new products or programs;
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The timing of our new product launches or certifications of our new aircraft products;
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Our ability to keep pace with our competitors in the introduction of new products and upgrades with features and technologies desired by our customers;
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Pension plan assumptions and future contributions;
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Demand softness or volatility in the markets in which we do business;
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Cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption;
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Difficulty or unanticipated expenses in connection with integrating acquired businesses;
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The risk that acquisitions do not perform as planned, including, for example, the risk that acquired businesses will not achieve revenue and profit projections;
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The impact of changes in tax legislation;
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The risk of disruptions to our business and the business of our suppliers, customers and other business partners due to unexpected events, such as pandemics, natural disasters, acts of war, strikes, terrorism, social unrest or other societal, geopolitical or macroeconomic conditions;
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Risks related to changing U.S. and foreign trade policies, including increased trade restrictions or tariffs; and
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The ability of our businesses to hire, train and retain the highly skilled personnel necessary for our businesses to succeed.
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