24 TEXTRON 2022 PROXY STATEMENT COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY Key 2021 Per formance Highlights In 2021, Textron’s revenues increased 6% and segment profit increased 51%, compared with 2020, reflecting higher volume and pricing, along with performance improvements. Higher earnings and working capital improvements during the year resulted in a year-over-year increase of $636 million in net cash flows from operating activities from our manufacturing businesses. While most of our commercial businesses have not yet returned to 2019 pre-pandemic levels, we experienced a rebound in customer demand in these businesses during 2021. Customer demand for our Textron Aviation aircraft products, in particular, increased throughout the year, enabling the business to return to a more normalized and efficient manufacturing cadence, and resulted in a $2.5 billion, 157%, increase in backlog. During the year, we have been impacted by ongoing pandemic-related global supply chain shortages and delays, as well as inflation, primarily in the Industrial segment, and we continue to manage through these challenges. Key financial highlights for 2021 include: • Generated $1.5 billion of net cash from operating activities from our manufacturing businesses. • Improved our ratio of debt, net of cash and equivalents, to capital to 16%, compared to 21% in the prior year. • Invested $619 million in research and development projects and $375 million in capital expenditures. • Returned $921 million to our shareholders through repurchasing 13.5 million shares of our common stock. $12,382 $11,651 2020 2021 $0 $13,000 ($ in millions) Revenues $1,134 $751 2020 2021 $0 $1,200 ($ in millions) Segment Profit $1,469 $833 2020 2021 $0 $1,500 ($ in millions) Net Cash from Operating Activities Business highlights for 2021 include: • Textron Aviation’s new Cessna SkyCourier twin-engine, large-utility turboprop by year-end had completed a total of more than 2,100 hours of flight test activity, and certification and first deliveries are anticipated in the first half of 2022. The Beechcraft Denali, our new single-engine turboprop in development, began its test flight program with a milestone first flight in November. The Denali is powered by the new GE Aviation Catalyst engine, a more sustainable engine that burns up to 20 percent less fuel than older turboprop engines. • In 2021, the Bell V-280 Valor continued to demonstrate its outstanding capabilities to the U.S. Army as it transitioned to the second and final phase of the Future Long Range Assault Aircraft (FLRAA) program. The down-select and award on the FLRAA program is expected in 2022. We also continued the build and testing of the Bell 360 Invictus competitive prototype for the Future Attack Reconnaissance Aircraft (FARA) program.
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