COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY Key 2022 Performance Highlights In 2022, Textron’s revenues increased 4% and segment profit increased 8%, compared with 2021. 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. During 2022, we continued to manage through the impacts of ongoing global supply chain shortages/delays and labor shortages, in order to meet customer demand. Financial highlights for 2022 also include: ● Generated $1.5 billion of net cash from operating activities from continuing operations of our manufacturing businesses ● Invested $601 million in research and development projects and $354 million in capital expenditures ● Returned $867 million to our shareholders through the repurchase of 13.1 million shares of our common stock Business highlights for 2022 include: ● Textron Aviation celebrated FAA certification of the Cessna SkyCourier, its new clean-sheet aircraft, and began deliveries to its launch customer, FedEx Express. We also received FAA certification and made the first deliveries of our Citation M2 Gen2 entry-level light jet and Citation XLS Gen2 midsize business jet, representing the next generation of these popular models. Our Beechcraft AT-6E Wolverine achieved Military Type Certification from the U.S. Air Force, enabling international sales of this light attack aircraft. ● In December 2022, Bell was awarded the development contract for the U.S. Army’s Future Long-Range Assault Aircraft (FLRAA) program. The award is subject to a bid protest filed by a competitor. Bell also made significant progress during the year on the Bell 360 Invictus, our aircraft submission for the Army’s Future Attack Reconnaissance Aircraft (FARA) program. On the commercial side, we saw increased commercial sales activity across our product portfolio. ● At Textron Systems, we advanced our weapons programs with two contract awards based on our new anti-vehicle munition system that fulfills the U.S. Army’s directive for next-generation technology in this area. We delivered the Cottonmouth Advanced Reconnaissance Vehicle prototype to the U.S. Marine Corps for the formal government evaluation phase and also delivered the fifth and sixth Ship-toShore connector to the U.S. Navy. ● In response to customer demand for products that reduce the impact on the environment, Textron Specialized Vehicles has expanded its line-up of products powered by lithium-ion battery technology, including to Textron GSE’s diverse product line under its TUG, Premier, Douglas and Safeaero brands. Kautex continued to execute on its hybrid fuel tank programs, winning 14 hybrid electric vehicle programs. ● We acquired Pipistrel, the world’s only manufacturer of certified electric aircraft and formed Textron eAviation, a new business segment to focus on the development of sustainable aircraft. 24 TEXTRON 2023 PROXY STATEMENT
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