Textron 2020 Proxy Statement

TEXTRON 2020 PROXY STATEMENT 21 COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY Key 2019 Performance Highlights During 2019, we achieved $1.27 billion in segment profit on revenues of $13.63 billion, and our manufacturing businesses generated $960 million of net cash from operating activities of continuing operations. We continued our strategy of investing in new products with $647 million invested in research and development activities for the year, along with $339 million in capital expenditures. We returned $521 million to our shareholders through share repurchases and dividend payments. Backlog increased 8% to $9.8 billion, which includes new contracts with the U.S. Government for spares and logistic support for the V-22 tiltrotor aircraft and the H-1 helicopter programs at the Bell segment. Business highlights of the year include: • At Textron Aviation, we certified and began deliveries of our newest Citation, the Longitude super mid-size jet, delivering 13 Longitudes in 2019, including the first Longitude to NetJets. We also advanced the development of our new Cessna SkyCourier twin-engine large-utility turboprop that we expect will have its first flight in early 2020. For the fourth consecutive year, our Citation Latitude jet that entered service in August 2015 was the most-delivered midsize business jet in the industry. • Bell completed a second year of flight testing of its V-280 Valor next generation tiltrotor aircraft, Bell’s competitor for the U.S. Army’s Future Long-Range Attack Aircraft program. Bell also introduced the Bell 360 Invictus, our offering for the Army’s Future Attack Reconnaissance Aircraft competition. In a significant foreign military sale, the Government of the Czech Republic agreed to purchase four Bell AH-1Z and eight UH-1Y helicopters. • At Textron Systems, the first Ship-to-Shore Connector craft successfully completed Acceptance Trials after a series of in-port and underway demonstrations for our U.S. Navy customer. The U.S. Army announced its intention to award us a contract to build four RIPSAW M5 unmanned vehicles designed and built by Textron System’s Howe & Howe Technologies company. In addition, Textron Systems’ Airborne Tactical Advantage Company won a contract to provide live military air-to- air training and support services to the U.S. Air Force. • Textron Specialized Vehicles entered into an agreement with Bass Pro Shops to design and manufacture a line of side-by- sides and ATVs to be branded as Tracker Off Road and distributed by Bass Pro Shops, Cabela’s and independent Tracker Marine dealers. Also, TSV’s golf business now has over 80,000 of its E-Z-GO ELiTE series of lithium-battery-powered vehicles, which excel in energy efficiency and performance, at more than 1,350 private golf facilities worldwide. Segment Profit $1,400 $0 $1,267 2018 $1,270 ($ in millions) Segment Profit Margin 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% Textron Aviation Bell 2018 2019 Textron Systems Industrial 4.0% 2.0% 0.0% 2019 9.0% 8.7% 13.4%13.4% 10.7%10.6% 5.1% 5.7% Backlog $11,000 $0 2018 2019 $9,827 $9,097 ($ in millions) Revenue $15,000 $0 $13,972 2018 $13,630 2019 ($ in millions)