2019 Proxy Statement

TEXTRON 2019 PROXY STATEMENT 21 COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY Business Overview During 201 , we continued our strategy of investing in new products and leveraging operations to drive earnings growth and margin expansion across our Textron Aviation, Bell and Textron Systems segments, while returning signi¿cant capital to our shareholders. :e generated $1.1 billion in net cash from operating activities of our manufacturing businesses and invested $6 million in research and development activities and $ 69 million in capital expenditures. Segment pro¿t for the year increased by over 2017 to $1. billion, reÀecting operational improvements in our Textron Aviation, Bell and Textron Systems segments. Revenues declined 2 year over year, largely as a result of the sale of our Tools & Test businesses within our Industrial segment. :e received $0. billion in net cash proceeds from the Tools & Test sale which we returned to our shareholders through repurchases of our stock. During the course of the year, we returned another $1.0 billion to our shareholders through additional share repurchases and dividend payments. Our backlog increased 27 year over year to $9.1 billion, which includes the award of our third multi year 9 22 contract at Bell for $2. billion and increased orders for our commercial aircraft at the Textron Aviation and Bell segments. Revenues $15,000 $0 $14,198 2017 $13,972 2018 ($ in millions) Segment Profit $1,400 $0 $1,169 2017 $1,267 ($ in millions) Segment Profit Margin 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% Textron Aviation Bell 2017 2018 Textron Systems Industrial 4.0% 2.0% 0.0% 2018 6.5% 9.0% 12.5% 13.4% 7.6% 10.7% 6.8% 5.1% Backlog at Year-End $10,000 $0 2017 $7,184 2018 $9,097 ($ in millions) Share Repurchases and Dividends $2,000 $0 $603 2017 $1,803 2018 ($ in millions)