Textron 2021 Proxy Statement

TEXTRON 2021 PROXY STATEMENT 23 COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY Key 2020 Per formance Highlights During 2020, the global pandemic caused by the novel coronavirus, known as “COVID-19”, led to worldwide facility closures, workforce disruptions, supply chain destabilizations, reduced demand for many products and services, volatility in the capital markets and uncertainty in the economic outlook. Our operations experienced and continue to experience various degrees of disruption due to the unprecedented conditions surrounding the pandemic. While some of our commercial manufacturing facilities had temporarily closed during the first quarter of 2020 through the latter part of the second quarter due to reduced demand for certain of our products, substantially all manufacturing activities had resumed in the third quarter. In the second half of the year, our commercial businesses have generally experienced an increase in customer demand compared with the first half of 2020, however demand has not resumed to pre-pandemic levels. In the first quarter of 2020, following the onset of the pandemic, we strengthened our cash position by issuing $650 million in senior debt and by borrowing $500 million under a new 364-Day Term Loan Credit Agreement. We also temporarily suspended share repurchases and took other measures to reduce costs and conserve cash, including employee furloughs at many of our commercial businesses and at corporate headquarters, reducing capital expenditures and delaying certain research and development projects. In the second quarter, we continued most of the measures taken in the first quarter to reduce costs and conserve cash and initiated a restructuring plan at certain of our businesses to further reduce costs. During the remainder of the year, we continued our focus on managing our businesses through the impacts of the pandemic while investing in future products and technologies. Key financial highlights for 2020 include: • Generated $833 million of net cash from operating activities from our manufacturing businesses. • Maintained a strong cash position with $2.3 billion in cash and equivalents at the end of the year. • Invested $317 million in capital expenditures and $549 million in research and development projects. • Repurchased 4.1 million shares of our common stock. Business highlights of the year include: • Textron Aviation’s Cessna SkyCourier, the new clean-sheet twin-engine, large-utility turboprop aircraft made its first flight in May 2020; the aircraft is on track for entry into service in the second half of 2021. Textron Aviation also brought innovation to its Beechcraft King Air turboprop product line with technological advancements in the cockpit and enhancements to passenger comfort for both the King Air 360 and the King Air 260. Deliveries of the King Air 360, the company’s flagship turboprop, began during the fourth quarter. • At Bell, our Future Vertical Lift programs advanced in 2020. Both the Bell V-280 Valor and Bell 360 Invictus were down- selected by the U.S. Army for the next rounds of the Future Long-Range Assault Aircraft (FLRAA) and Future Attack Reconnaissance Aircraft (FARA) programs, respectively. • Textron Systems’ Ship-to-Shore Connector (“SSC”) program was awarded a follow-on production contract by the U.S. Navy, bringing the current number of SSC craft being produced by Textron Systems to twenty-four, two of which have been delivered. • At Industrial, Textron Specialized Vehicles focused on new product development, particularly leveraging electric technology and connected-vehicle experiences for its products, and Kautex continued its focus on innovation, particularly around technologies for electric and hybrid-electric systems and autonomous driving technologies.