Fellow Shareholders,

In 2023, we successfully executed on our strategy of ongoing investments in new products and programs to drive organic growth and margin expansion. We launched new products across our businesses, won new business from our U.S. military customers and continued the innovation that will drive future growth.

Robust new product pipeline

Reflecting strong demand for its broad range of aircraft, Textron Aviation ended 2023 with a backlog of $7.2 billion, an increase of $782 million from year-end 2022. Textron Aviation continued its investments in new products with the introduction of the Cessna Citation Ascend, which is currently under development.

The Citation Ascend is designed to bring the latest technology and innovations in cockpit avionics, engine performance and luxurious cabin features to the midsize business jet market. In September, Textron Aviation and NetJets announced a fleet agreement for the option for NetJets to purchase up to 1,500 additional Citation business jets over the next 15 years. As part of this agreement, NetJets was named as the fleet launch customer for the Citation Ascend, which is expected to enter into service in 2025.

Textron Aviation also announced the Citation CJ3 Gen2, the most comprehensive of our Gen2 product announcements to date, incorporating leading-edge technology, proven performance and an unmatched cabin experience in the light jet market. Both new Citation models have been designed with the input of Textron Aviation’s Customer Advisory Boards.

We also announced the addition of the revolutionary Garmin Emergency Autoland system to the Beechcraft Denali, a new, single-engine turboprop which is currently in the certification process with the Federal Aviation Administration. The Denali is the first aircraft powered by the new, efficient GE Catalyst engine.

Textron Specialized Vehicles introduced new products across its brands. Demonstrating its leadership in lithium battery technology and commitment to electrification, the company unveiled its new Jacobsen SLF1 ELiTE lithium mower. The newest Jacobsen offering was the centerpiece of an all-electric display of Jacobsen and Cushman products at the 2023 Golf Course Superintendents Association of America Conference and Trade Show.

E-Z-GO also released new vehicle models, including the street-legal E-Z-GO Liberty LSV for personal transportation and a next-generation upgrade to the market-leading RXV golf car. New Cushman low-speed vehicles, the Cushman Tour LSV and Hauler PRO LSV, are street-legal vehicles designed for utility use. The new Arctic Cat CATALYST snowmobile platform featured an innovative design that delivers more control for the rider and requires significantly less effort in carving through the snow.

Military program awards and downselects

During 2023, Bell began work on development of the next-generation tiltrotor aircraft for the U.S. Army’s Future Long Range Assault Aircraft (FLRAA) program under a contract awarded to Bell in December 2022. Bell ramped up activity with additional engineering resources, contracting with key suppliers, ordering long-lead materials and breaking ground on a new FLRAA Drive Systems Test Lab as it continues work on a truly remarkable and transformational tiltrotor aircraft, based on the V-280 Valor, to meet U.S. Army weapon system requirements.

Bell was selected to compete for the Defense Advanced Research Projects Agency (DARPA) Speed and Runway Independent Technologies (SPRINT) X-Plane program, developing an experimental aircraft with jet aircraft performance while providing runway independence for the next generation of air mobility platforms. With Bell’s long history producing X-planes such as the Bell X-1 and XV-15, and its investments in High-Speed Vertical Take-off and Landing (HSVTOL) technology and research, Bell will continue to push the boundaries of vertical lift aircraft performance.

In February, Textron Aviation announced it was awarded the Multi-Engine Training System (METS) contract by Naval Air Systems Command (NAVAIR). The initial contract award was for 10 Beechcraft King Air 260 aircraft, with options for up to an additional 54 aircraft, and associated spare parts and support. Deliveries of the aircraft are expected to begin in 2024, and the customer recently exercised the option for an additional 10 aircraft.

Textron Systems continued to expand its support to our military customers. We grew our Intelligence, Surveillance and Reconnaissance (ISR) support to the U.S. Navy, expanding our Aerosonde^® uncrewed aircraft systems (UAS) from four to seven vessels over the course of 2023. In addition, the business received a Navy award for the design, development and integration of a next-generation mine sweep system known as the Magnetic and Acoustic Generation Next Unmanned Superconducting Sweep (MAGNUSS) for use on board the Common Unmanned Surface Vessel platform.

During the year, the U.S. Army downselected Textron Systems for several important programs. After successfully completing the requirements for the Future Tactical Uncrewed Aircraft System (FTUAS) program Option 1, Textron Systems was selected for the Option 2 award. In this phase, Textron Systems refined its proposed design for the Aerosonde^® Mk. 4.8 Hybrid Quad UAS based on the Army’s Modular Open System Approach requirements.

On the Land side, Textron Systems’ RIPSAW^® M3 was downselected to participate in the Army’s Robotic Combat Vehicle Phase 1: Platform Prototype program, an anticipated Army Program of Record. Textron Systems will deliver two prototype vehicles in 2024 to the Army for comprehensive testing. Textron Systems is also part of a team chosen for the next phase of the XM30 Combat Vehicle Program. Textron Systems is the designated manufacturer for this team, fabricating, assembling and testing the prototype vehicles. The XM30 vehicle will eventually replace the Army’s fleet of more than 3,000 M2 Bradley Fighting Vehicles.

Leadership in electrification

As the new Jacobsen SLF1 ELiTE leads the turf industry in electrification, we are making tremendous strides across the company with ground-breaking electric technologies and products for land and air.

As part of its ongoing initiative to electrify its product line, Textron Ground Support Equipment launched its new TUG 660 Li belt loader, powered by lithium battery technology. This zero-emission, fully electric operation allows airlines, air freight companies and ground handlers to help achieve their sustainability goals with lower operational costs.

Pipistrel, within our Textron eAviation segment, has expanded its distributor and customer reach while making progress on new products. In 2023, Pipistrel added three new distributors in the U.S. that collectively represent 29 states, as well as distributors in both Canada and Africa. These distributors are an extension of our continued efforts to sell, service and support our growing fleet of Pipistrel aircraft.

Pipistrel also announced that its Velis Electro will be used by the U.S Air Force’s (USAF) Agility Prime program to explore operational and training uses of the aircraft. Agility Prime is the USAF’s vertical lift program that partners with the eVTOL commercial industry, providing access to zero emission aircraft for a variety of uses, including training and operations.

Pipistrel’s 2023 progress included preparation for the Nuuva v300’s first flight. The hybrid electric, remotely piloted VTOL cargo aircraft, has been designed to carry up to 660 pounds of payload at a typical range of up to 162nm. Additionally, Textron eAviation is leveraging expertise across our Bell, Textron Aviation and Textron Systems businesses in the development of our Nexus eVTOL platform demonstrator for passenger transport. During 2023, the team conducted wind tunnel testing on a scale-powered model and began the build of the demonstrator vehicle.

After receiving its first order from an automotive OEM in late 2022 for a thermoplastic composite underbody battery protection system, Kautex ramped up in preparation for successful production of this innovative product. The underbody protection product is part of Kautex’s customizable Pentatonic battery system, which also includes battery enclosures and thermal management systems for use in electric vehicles, from hybrid to full battery electric vehicles. This order represented a significant step in establishing Kautex as a supplier in the expanding battery electric vehicle market.

A strong year across our businesses

By successfully executing on our long-term strategy of investing in new products, our sales and service channels and our manufacturing operations, we had a year of strong performance. With the hard work and dedication of our employees, our achievements position us for sustained growth in the year ahead. Guided by our values of integrity, respect, trust, and the pursuit of excellence, we will continue to drive innovation across our company and remain committed to delivering long-term value for our shareholders. On behalf of Textron’s Board of Directors, thank you for your continued support of our company.