# TEXTRON INC (TXT) Informational only - not investment advice. CIK: 0000217346 SIC: 3720 Aircraft & Parts SIC breadcrumb: [Manufacturing](/division/D/) > [Transportation Equipment](/major-group/37/) > [SIC 3720 Aircraft & Parts](/industry/3720/) Latest 10-K filed: 2026-02-11 SEC page: https://www.sec.gov/edgar/browse/?CIK=217346 Filing source: https://www.sec.gov/Archives/edgar/data/217346/000021734626000006/txt-20260103.htm ## At a glance FY2025 · period end 2026-01-03 · filed 2026-02-11 · accession 0000217346-26-000006 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000217346.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 14,799,000,000 USD | 2025 | verified | | Net income | 921,000,000 USD | 2025 | verified | | Assets | 18,129,000,000 USD | 2025 | verified | | Free cash flow | 929,000,000 USD | 2025 | computed | | Net margin | 6.22% | 2025 | computed | | Revenue YoY | +8.01% | 2025 | computed | | ROE | 11.70% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. Peer groups: [Defense and aerospace primes](/compare/defense/) · SIC 3720 Aircraft & Parts No market price, no rating, no forecast on this site. Not investment advice. ## Peer comparisons including TXT - Defense and aerospace primes: [peer review](/compare/defense/) · [market-risk page](/compare/defense/risk/) ### Peer percentile fingerprint | Ratio | TXT | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | 6.2% | 3.7% | 66 | 65 | | Revenue growth | 8.0% | 5.6% | 58 | 73 | | FCF margin | 6.3% | 4.4% | 59 | 72 | | ROE | 11.7% | 6.0% | 70 | 72 | | ROA | 5.1% | 2.8% | 72 | 75 | | Liabilities / equity | 1.30 | 1.45 | 45 | 72 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 37 Transportation Equipment, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 14799000000 | USD | 2025 | 2026-02-11 | | Net income | 921000000 | USD | 2025 | 2026-02-11 | | Assets | 18129000000 | USD | 2025 | 2026-02-11 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000217346.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | 13,788,000,000 | 14,198,000,000 | 13,972,000,000 | 13,630,000,000 | 11,651,000,000 | 12,382,000,000 | 12,869,000,000 | 13,683,000,000 | 13,702,000,000 | 14,799,000,000 | | Net income | | | 962,000,000 | 307,000,000 | 1,222,000,000 | 815,000,000 | 309,000,000 | 746,000,000 | 861,000,000 | 921,000,000 | 824,000,000 | 921,000,000 | | Diluted EPS | 2.13 | 2.50 | 3.53 | 1.14 | 4.83 | | | 3.30 | 4.01 | 4.56 | 4.33 | 5.11 | | Operating cash flow | | | 925,000,000 | 936,000,000 | 1,107,000,000 | 1,014,000,000 | 768,000,000 | 1,598,000,000 | 1,488,000,000 | 1,266,000,000 | 1,014,000,000 | 1,312,000,000 | | Capital expenditures | | | 446,000,000 | 423,000,000 | 369,000,000 | 339,000,000 | 317,000,000 | 375,000,000 | 354,000,000 | 402,000,000 | 364,000,000 | 383,000,000 | | Dividends paid | | | 22,000,000 | 21,000,000 | 20,000,000 | 18,000,000 | 18,000,000 | 18,000,000 | 17,000,000 | 16,000,000 | 12,000,000 | 18,000,000 | | Share buybacks | | | 241,000,000 | 582,000,000 | 1,783,000,000 | 503,000,000 | 183,000,000 | 921,000,000 | 867,000,000 | 1,168,000,000 | 1,122,000,000 | 822,000,000 | | Assets | | | 15,358,000,000 | 15,340,000,000 | 14,264,000,000 | 15,018,000,000 | 15,443,000,000 | 15,827,000,000 | 16,293,000,000 | 16,856,000,000 | 16,838,000,000 | 18,129,000,000 | | Liabilities | | | 9,784,000,000 | 9,693,000,000 | 9,072,000,000 | 9,500,000,000 | 9,598,000,000 | 9,012,000,000 | 9,180,000,000 | 9,869,000,000 | 9,634,000,000 | 10,254,000,000 | | Stockholders' equity | | | 5,574,000,000 | 5,647,000,000 | 5,192,000,000 | 5,518,000,000 | 5,845,000,000 | 6,815,000,000 | 7,113,000,000 | 6,987,000,000 | 7,204,000,000 | 7,875,000,000 | | Free cash flow | | | 479,000,000 | 513,000,000 | 738,000,000 | 675,000,000 | 451,000,000 | 1,223,000,000 | 1,134,000,000 | 864,000,000 | 650,000,000 | 929,000,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | 6.98% | 2.16% | 8.75% | 5.98% | 2.65% | 6.02% | 6.69% | 6.73% | 6.01% | 6.22% | | Return on equity | | | 17.26% | 5.44% | 23.54% | 14.77% | 5.29% | 10.95% | 12.10% | 13.18% | 11.44% | 11.70% | | Return on assets | | | 6.26% | 2.00% | 8.57% | 5.43% | 2.00% | 4.71% | 5.28% | 5.46% | 4.89% | 5.08% | | Liabilities / equity | | | 1.76 | 1.72 | 1.75 | 1.72 | 1.64 | 1.32 | 1.29 | 1.41 | 1.34 | 1.30 | ## As-reported value updates 2 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period. Ledger: /company/TXT/revisions/ ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-07-28. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000217346.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2019-Q3 | 2019-09-28 | | | 0.95 | reported discrete quarter | | 2020-Q1 | 2020-04-04 | | | 0.22 | reported discrete quarter | | 2020-Q2 | 2020-07-04 | | | -0.40 | reported discrete quarter | | 2020-Q3 | 2020-10-03 | | | 0.50 | reported discrete quarter | | 2021-Q1 | 2021-04-03 | | | 0.75 | reported discrete quarter | | 2021-Q2 | 2021-07-03 | | | 0.80 | reported discrete quarter | | 2022-Q2 | 2022-07-02 | | | 1.00 | reported discrete quarter | | 2023-Q1 | 2023-04-01 | | | 0.92 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 3,343,000,000 | 269,000,000 | | reported discrete quarter | | 2023-Q4 | 2023-12-30 | 3,892,000,000 | 198,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-30 | 3,135,000,000 | 201,000,000 | 1.03 | reported discrete quarter | | 2024-Q2 | 2024-06-29 | 3,527,000,000 | 259,000,000 | | reported discrete quarter | | 2024-Q3 | 2024-09-28 | 3,427,000,000 | 223,000,000 | | reported discrete quarter | | 2024-Q4 | 2024-12-28 | 3,613,000,000 | 141,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-29 | 3,306,000,000 | 207,000,000 | 1.13 | reported discrete quarter | | 2025-Q2 | 2025-06-28 | 3,716,000,000 | 245,000,000 | | reported discrete quarter | | 2025-Q3 | 2025-09-27 | 3,602,000,000 | 234,000,000 | | reported discrete quarter | | 2025-Q4 | 2026-01-03 | 4,175,000,000 | 235,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-04-04 | 3,695,000,000 | 220,000,000 | 1.25 | reported discrete quarter | | 2026-Q2 | 2026-07-04 | 3,827,000,000 | 248,000,000 | 1.42 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from TXT's latest 10-K: [/company/TXT/business/](/company/TXT/business/). ## Risk Factors Verbatim Item 1A Risk Factors from TXT's latest 10-K: [/company/TXT/risk-factors/](/company/TXT/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/217346/000021734626000036/txt-20260704.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-07-28 Report date: 2026-07-04 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Business Environment Since early 2025, the United States has made various changes to its trade policy resulting in new or higher tariffs on goods imported from numerous countries. We are principally a North American manufacturer and 69% of our 2025 revenues were generated in the U.S. Many of our aircraft materials and components qualify under the rules of the United States-Mexico-Canada Agreement for preferential treatment on tariffs imposed by the U.S. on imports from Canada and Mexico. In addition, our operations outside of North America primarily source materials and components from outside of North America and manufacture products for non-U.S. customers. Many of our businesses with operations in North America also source materials and components from outside of North America. These businesses have been and will continue to be impacted by these imposed U.S. tariffs. In order to mitigate these impacts our businesses have been managing, and will continue to manage, pricing and supply chain optimization strategies. To date, we have not experienced a material adverse impact from these tariffs. The U.S. tariffs were imposed under various legal authorities, including the International Emergency Economic Powers Act (IEEPA). On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the IEEPA were not authorized by the statute. During the second quarter of 2026, we submitted refund requests for the IEEPA tariffs and have begun to receive refunds for previously paid tariffs. We will continue to evaluate the ongoing impact of tariffs and any further developments or changes in global tariff policies on our business and financial position. Consolidated Results of Operations [[GREPCENT_TABLE]] [["","Three Months Ended","","Six Months Ended"],["(Dollars in millions)","July 4, 2026","June 28, 2025","% Change","July 4, 2026","June 28, 2025","% Change"],["Revenues","$","3,827","","$","3,716","","3%","$","7,522","","$","7,022","","7%"],["Cost of sales","3,133","","3,007","","4%","6,156","","5,679","","8%"],["Gross margin as a % of Manufacturing revenues","17.8%","18.8%","","17.8%","18.8%"],["Research and development costs","$","116","","$","137","","(15)%","$","236","","$","269","","(12)%"],["Selling and administrative expense","311","","303","","3%","632","","601","","5%"],["Interest expense, net","33","","31","","6%","67","","60","","12%"],["Special charges","\u2014","","4","","(100)%","\u2014","","4","","(100)%"],["Non-service components of pension and postretirement income, net","70","","67","","4%","140","","133","","5%"]] [[/GREPCENT_TABLE]] An analysis of our consolidated operating results is set forth below. A more detailed analysis of our segments’ operating results is provided in the Segment Analysis section on pages 23 to 26. Revenues Revenues increased $111 million, 3%, in the second quarter of 2026, compared with the second quarter of 2025. The revenue increase primarily included the following factors: •Higher Bell revenues of $58 million due to higher military aircraft and support programs revenues of $47 million and higher commercial revenues of $11 million. •Higher Textron Systems revenues of $23 million, largely due to higher volume. •Higher Textron Aviation revenues of $22 million, reflecting higher aircraft revenues of $17 million and higher aftermarket parts and services revenues of $5 million. •Higher Industrial revenues of $9 million, reflecting higher revenues of $17 million at Kautex, partially offset by lower revenues of $8 million at Textron Specialized Vehicles. Revenues increased $500 million, 7%, in the first half of 2026, compared with the first half of 2025. The revenue increase primarily included the following factors: •Higher Textron Aviation revenues of $291 million, reflecting higher aircraft revenues of $238 million, largely due to higher volume and mix, and higher aftermarket parts and services revenues of $53 million. •Higher Bell revenues of $145 million, due to higher military aircraft and support programs revenues of $208 million, largely from the MV-75 program, partially offset by lower commercial revenues of $63 million. •Higher Textron Systems revenues of $62 million, largely due to higher volume. •Higher Industrial revenues of $3 million, reflecting higher revenues of $53 million at Kautex, primarily due to a favorable impact from foreign exchange rate fluctuations, higher pricing and higher volume and mix, largely offset by lower 21 Table of Contents revenues of $50 million at Textron Specialized Vehicles, mostly due to the impact from the disposition of the Powersports business in April 2025, partially offset by higher pricing. Cost of Sales Cost of sales includes cost of products and services sold for the Manufacturing group. Cost of sales increased $126 million, 4%, in the second quarter of 2026, compared with the second quarter of 2025, primarily due to a $67 million impact from inflation and higher net volume and mix of $44 million. Gross margin as a percentage of Manufacturing revenues decreased 100 basis points in the second quarter of 2026, primarily due to lower margin at the Bell segment. Cost of sales increased $477 million, 8%, in the first half of 2026, compared with the first half of 2025, largely due to higher net volume and mix of $332 million and a $148 million impact from inflation and higher LIFO inventory provision, partially offset by the impact from the Powersports disposition. Gross margin as a percentage of Manufacturing revenues decreased 100 basis points in the first half of 2026, primarily due to lower margin at the Bell segment. Research and Development Costs Research and development costs decreased $21 million, 15%, in the second quarter of 2026, compared with the second quarter of 2025, largely due to a decrease of $11 million at the Bell segment, reflecting a reduction in costs on several programs, and a decrease of $6 million at the Textron Systems segment, due to a reduction in costs on certain U.S. Government development programs. Research and development costs decreased $33 million, 12%, in the first half of 2026, compared with the first half of 2025, largely reflecting lower costs of $13 million and $7 million at the Bell and Textron Systems segments, respectively, as described above, along with $9 million in lower costs related to certain development projects reported within corporate expenses as discussed in the Segment Analysis section below. Selling and Administrative Expense Selling and administrative expense increased $8 million, 3%, and $31 million, 5%, in the second quarter and first half of 2026, respectively, compared with the corresponding periods of 2025. The increase in selling and administrative expense in the first half of 2026 was primarily due to higher share-based and other compensation expense. 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 second quarter and first half of 2026, interest expense, net increased $2 million, 6%, and $7 million, 12%, respectively, compared with the corresponding periods of 2025, primarily due to higher average debt outstanding. Gross interest expense totaled $40 million and $39 million in the second quarter of 2026 and 2025, respectively, and $83 million and $77 million in the first half of 2026 and 2025, respectively. Income Taxes Our effective tax rate was 18.4% and 18.0% for the second quarter and first half of 2026, respectively. The effective tax rate was lower than the U.S. federal statutory rate of 21%, primarily due to the favorable impact of research and development credits and tax deductions for foreign-derived deduction eligible income, which replaced foreign-derived intangible income beginning in 2026. Our effective tax rate for the second quarter and first half of 2025 was 18.6% and 16.6%, respectively. The effective tax rate was lower than the U.S. federal statutory rate of 21%, primarily due to the favorable impact of research and development credits and tax deductions for foreign-derived intangible income. Backlog Our backlog is summarized below: [[GREPCENT_TABLE]] [["(In millions)","July 4, 2026","January 3, 2026"],["Textron Aviation","$","8,028","","$","7,724"],["Bell","7,538","","7,795"],["Textron Systems","3,348","","3,304"],["Total backlog","$","18,914","","$","18,823"]] [[/GREPCENT_TABLE]] 22 Table of Contents Segment Analysis We operate in, and report financial information for, the following five operating segments: Textron Aviation, Bell, Textron Systems, Industrial and Finance. Effective January 4, 2026, the beginning of our 2026 fiscal year, the business activities of the Textron eAviation segment were realigned within Textron's other operating segments resulting in the elimination of the Textron eAviation segment as a separate reporting segment. Under the segment realignment, a significant part of Textron eAviation, including Pipistrel, became part of the Textron Aviation segment to enable the business to more effectively leverage the development, manufacturing and sales expertise at Textron Aviation. In addition, Textron eAviation’s manned and unmanned products for military applications and related research and development activities are included in the results of the Textron Systems segment, which is best suited to provide more direct access to the targeted customer base for these products. Lastly, certain Textron eAviation research and development activities encompassing digital flight control and air vehicle management systems, which we expect will benefit several of our segments, are reported within corporate expenses. The prior period has been recast to reflect the segment realignment. 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 Statements 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 [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/217346/000021734626000006/txt-20260103.htm Complete FY 2026 MD&A: /company/TXT/mda/fy2026/ Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Filing date: 2026-02-11 Report date: 2026-01-03 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview In 2025, Textron’s revenues increased 8%, compared with 2024, reflecting the impact of higher volume on the MV-75 program at the Bell segment and higher aircraft and aftermarket parts and services revenues at the Textron Aviation segment. Segment profit increased 14%, compared with 2024, largely reflecting higher volume and mix at Textron Aviation. Our backlog increased 5% in 2025 to $18.8 billion, which included a $710 million increase at the Textron Systems segment and a $326 million increase at the Bell segment. Financial highlights for 2025 also include: •Generated $1.3 billion of net cash from operating activities from our manufacturing businesses. •Invested $521 million in research and development projects and $383 million in capital expenditures. •Returned $822 million to our shareholders through the repurchase of 10.7 million shares of our common stock. For an overview of our business segments, including a discussion of our major products and services, refer to Item 1. Business. A discussion of our financial condition and operating results for 2025 compared with 2024 is provided below, while a discussion of 2024 compared with 2023 can be found in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 28, 2024. The following discussion should be read in conjunction with our Consolidated Financial Statements and related Notes included in Item 8. Financial Statements and Supplementary Data. Business Environment Changes to the United States trade policy have resulted in new or higher tariffs on goods imported from numerous countries, and some countries have imposed retaliatory tariffs on imports from the United States. We are principally a North American manufacturer and 69% of our 2025 revenues were generated in the U.S. Our aircraft products, subassemblies, parts and components manufactured in Canada and Mexico are largely qualified under the rules of the United States-Mexico-Canada Agreement (USMCA) for preferential treatment on tariffs imposed by the U.S. on imports from Canada and Mexico. In addition, our operations outside of North America primarily source materials and components from outside of North America and manufacture products for non-U.S. customers. Many of our businesses also source materials and components from outside of North America. These businesses have been and will continue to be impacted by these imposed U.S. tariffs. In order to mitigate these impacts our businesses have been managing, and will continue to manage, pricing and supply chain optimization strategies. In addition, our aircraft businesses are working through the tariff reconciliation and refund process with the U.S. Government to recover tariff costs that were previously paid related to materials and components that were subsequently determined to be USMCA compliant. To date, we have not experienced a material adverse impact from these tariffs. We will continue to evaluate the ongoing impact of these tariffs and any further developments or changes in global tariff policies on our business and financial position. Consolidated Results of Operations [[GREPCENT_TABLE]] [["","","","","% Change"],["(Dollars in millions)","2025","2024","2023","2025","2024"],["Revenues","$","14,799","$","13,702","$","13,683","8%","\u2014%"],["Cost of sales","12,104","11,200","10,835","8%","3%"],["Gross margin as a % of Manufacturing revenues","17.8%","18.0%","20.5%"],["Research and development costs","$","521","$","491","$","570","6%","(14)%"],["Selling and administrative expense","1,173","1,156","1,225","1%","(6)%"],["Interest expense, net","126","97","77","30%","26%"],["Special charges","4","78","126","(95)%","(38)%"],["Non-service components of pension and postretirement income, net","266","263","237","1%","11%"]] [[/GREPCENT_TABLE]] Revenues Revenues increased $1.1 billion in 2025, compared with 2024, largely due to the following factors: •Higher Bell revenues of $703 million, due to higher military aircraft and support programs revenues of $570 million, primarily related to the MV-75 program and military sustainment programs, and higher commercial revenues of $133 million. •Higher Textron Aviation revenues of $671 million, reflecting higher aircraft revenues of $548 million and higher aftermarket parts and services revenues of $123 million. 21 Table of Contents •Lower Industrial revenues of $302 million, with $294 million at Textron Specialized Vehicles, largely reflecting the impact from the disposition of the Powersports business in April 2025, as discussed in Note 15 to the Consolidated Financial Statements, and lower volume and mix, primarily in golf products. Manufacturing group revenues increased $1.1 billion in 2025, compared with 2024, largely reflecting an increase of $1.4 billion in product revenues. The increase in product revenues in 2025 was partially offset by a decrease of $285 million in service revenues, largely related to the classification of revenues for the MV-75 program, which was service-related prior to the transition of the program to the Engineering and Manufacturing Development phase in the third quarter of 2024 when it became product-related. Cost of Sales Cost of sales includes cost of products and services sold for the Manufacturing group. In 2025, cost of sales increased $904 million, 8%, compared with 2024, largely due to higher net volume and mix and a $281 million impact from inflation, partially offset by the impact from the disposition of the Powersports business. Research and Development Costs Research and development costs increased $30 million, 6%, in 2025, compared with 2024. The higher research and development costs included an increase of $56 million at Bell, largely reflecting lower costs in 2024 due to the wind down of the Future Attack Reconnaissance Aircraft program, partially offset by a decrease of $21 million at the Textron eAviation segment, due to a reduction in costs on certain development projects. Selling and Administrative Expense Selling and administrative expense increased $17 million, 1%, in 2025, compared with 2024. The increase included a $21 million impact from inflation, higher share-based compensation expense and lower recoveries at the Finance segment, mostly offset by the impact from the disposition of the Powersports business and a $16 million gain resulting from the early termination of a vendor contract at the Textron Systems segment. 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 2025, interest expense, net increased $29 million, 30%, compared with 2024, primarily due to higher average debt outstanding and lower interest income. For 2025, 2024 and 2023, gross interest expense totaled $164 million, $146 million and $133 million, respectively. Special Charges Special charges of $4 million, $78 million and $126 million in 2025, 2024 and 2023, respectively, largely include restructuring activities and asset impairment charges as described in Note 15 to the Consolidated Financial Statements on page 63. Non-service Components of Pension and Postretirement Income, Net Non-service components of pension and postretirement income, net increased by $3 million, 1%, in 2025, compared with 2024. Income Taxes [[GREPCENT_TABLE]] [["","2025","2024","2023"],["Effective tax rate","18.8%","12.5%","15.2%"]] [[/GREPCENT_TABLE]] In 2025, the effective tax rate of 18.8% was lower than the U.S. federal statutory tax rate of 21%, largely due to the favorable impact of research and development credits. In 2024, the effective tax rate of 12.5% was lower than the U.S. federal statutory tax rate of 21%, largely due to the favorable impact of research and development credits and the effective settlement of certain tax positions in the fourth quarter of 2024, which is discussed in Note 16 to the Consolidated Financial Statements. For a full reconciliation of our effective tax rate to the U.S. federal statutory tax rate, see Note 16 to the Consolidated Financial Statements on page 64. 22 Table of Contents 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; special charges and the inventory valuation charge to write down production-related powersports inventory. 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, intangible asset amortization and the inventory valuation charge 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 27% of our 2025 revenues were derived from contracts with the U.S. Government, including those under the U.S. Government-sponsored foreign military sales program. For our segments that contract with the U.S. Government, material changes in revenues related to these contracts are expressed in terms of volume. Changes in segment profit for these contracts are typically expressed in terms of volume and mix and contract performance, which includes cumulative catch-up adjustments associated with a) revisions to the transaction price that may reflect contract modifications or changes in assumptions related to award fees and other variable consideration or b) changes in the total estimated costs at comp [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2026 MD&A: /company/TXT/mda/fy2026/ All MD&A years: /company/TXT/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/TXT/mda/fy2024/): filed 2025-02-06; accession 0000217346-25-000017 (https://www.sec.gov/Archives/edgar/data/217346/000021734625000017/txt-20241228.htm) - [FY 2023 MD&A](/company/TXT/mda/fy2023/): filed 2024-02-12; accession 0000217346-24-000017 (https://www.sec.gov/Archives/edgar/data/217346/000021734624000017/txt-20231230.htm) - [FY 2022 MD&A](/company/TXT/mda/fy2022/): filed 2023-02-16; accession 0000217346-23-000006 (https://www.sec.gov/Archives/edgar/data/217346/000021734623000006/txt-20221231.htm) - [FY 2022 MD&A](/company/TXT/mda/a-0000217346-22-000005/): filed 2022-02-17; accession 0000217346-22-000005 (https://www.sec.gov/Archives/edgar/data/217346/000021734622000005/txt-20220101.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 3720 Aircraft & Parts) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/TXT.md · JSON record: /company/TXT.json · verified financials: /company/TXT/financials.json / /company/TXT/financials.csv · machine TOC for the whole site: /llms.txt