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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______.
Commission File Number 1-5480
Textron Inc.
(Exact name of registrant as specified in its charter)
Delaware05-0315468
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
40 Westminster Street, Providence, RI
02903
(Address of principal executive offices)(Zip code)
(401) 421-2800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol (s)Name of each exchange on which registered
Common stock, $0.125 par valueTXT
New York Stock Exchange (NYSE)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filerþAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
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As of April 12, 2024, there were 190,698,993 shares of common stock outstanding.


TEXTRON INC.
Index to Form 10-Q
For the Quarterly Period Ended March 30, 2024

    
Page
2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TEXTRON INC.
Consolidated Statements of Operations (Unaudited)

Three Months Ended
(In millions, except per share amounts)March 30,
2024
April 1,
2023
Revenues
Manufacturing product revenues$2,432 $2,550 
Manufacturing service revenues688 462 
Finance revenues15 12 
Total revenues3,135 3,024 
Costs, expenses and other
Cost of products sold2,069 2,176 
Cost of services sold545 355 
Selling and administrative expense316 305 
Interest expense, net20 20 
Special charges14  
Non-service components of pension and postretirement income, net(66)(59)
Total costs, expenses and other2,898 2,797 
Income before income taxes237 227 
Income tax expense36 36 
Net income$201 $191 
Earnings per share
Basic$1.04 $0.93 
Diluted$1.03 $0.92 
See Notes to the Consolidated Financial Statements.
3

TEXTRON INC.
Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended
(In millions)March 30,
2024
April 1,
2023
Net income$201 $191 
Other comprehensive income (loss), net of tax
Pension and postretirement benefits adjustments, net of reclassifications1  
Foreign currency translation adjustments(33)28 
Deferred losses on hedge contracts, net of reclassifications(5)(2)
Other comprehensive income (loss)(37)26 
Comprehensive income$164 $217 
See Notes to the Consolidated Financial Statements.
4

TEXTRON INC.
Consolidated Balance Sheets (Unaudited)

(Dollars in millions)March 30,
2024
December 30,
2023
Assets
Manufacturing group
Cash and equivalents$1,388 $2,121 
Accounts receivable, net894 868 
Inventories4,267 3,914 
Other current assets755 857 
Total current assets7,304 7,760 
Property, plant and equipment, less accumulated depreciation
   and amortization of $5,286 and $5,247, respectively
2,451 2,477 
Goodwill2,288 2,295 
Other assets3,692 3,663 
Total Manufacturing group assets15,735 16,195 
Finance group
Cash and equivalents78 60 
Finance receivables, net582 585 
Other assets19 16 
Total Finance group assets679 661 
Total assets$16,414 $16,856 
Liabilities and shareholders’ equity
Liabilities
Manufacturing group
Current portion of long-term debt$357 $357 
Accounts payable1,136 1,023 
Other current liabilities2,902 2,998 
Total current liabilities4,395 4,378 
Other liabilities1,850 1,904 
Long-term debt2,818 3,169 
Total Manufacturing group liabilities9,063 9,451 
Finance group
Other liabilities78 70 
Debt342 348 
Total Finance group liabilities420 418 
Total liabilities9,483 9,869 
Shareholders’ equity
Common stock25 24 
Capital surplus2,012 1,910 
Treasury stock(484)(165)
Retained earnings6,059 5,862 
Accumulated other comprehensive loss(681)(644)
Total shareholders’ equity6,931 6,987 
Total liabilities and shareholders’ equity$16,414 $16,856 
Common shares outstanding (in thousands)191,101 192,898 
See Notes to the Consolidated Financial Statements.
5

TEXTRON INC.
Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended March 30, 2024 and April 1, 2023, respectively

Consolidated
(In millions)20242023
Cash flows from operating activities
Net income$201 $191 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Non-cash items:
Depreciation and amortization88 92 
Deferred income taxes(16)(32)
Other, net33 39 
Changes in assets and liabilities:
Accounts receivable, net(34)(69)
Inventories(350)(380)
Other assets100 128 
Accounts payable121 261 
Other liabilities(159)(74)
Income taxes, net39 50 
Pension, net(56)(51)
Captive finance receivables, net22 6 
Other operating activities, net4 2 
Net cash provided by (used in) operating activities(7)163 
Cash flows from investing activities
Capital expenditures(66)(62)
Net proceeds from corporate-owned life insurance policies3 20 
Proceeds from sale of property, plant and equipment3  
Finance receivables repaid8 12 
Finance receivables originated(11) 
Other investing activities, net 1 
Net cash used in investing activities(63)(29)
Cash flows from financing activities
Principal payments on long-term debt and nonrecourse debt(365)(17)
Purchases of Textron common stock(317)(377)
Dividends paid(4)(4)
Proceeds from options exercised63 27 
Other financing activities, net(14)(5)
Net cash used in financing activities(637)(376)
Effect of exchange rate changes on cash and equivalents(8)6 
Net decrease in cash and equivalents(715)(236)
Cash and equivalents at beginning of period2,181 2,035 
Cash and equivalents at end of period$1,466 $1,799 
See Notes to the Consolidated Financial Statements.
6


TEXTRON INC.
Consolidated Statements of Cash Flows (Unaudited) (Continued)
For the Three Months Ended March 30, 2024 and April 1, 2023, respectively

Manufacturing GroupFinance Group
(In millions)2024202320242023
Cash flows from operating activities
Net income$187 $185 $14 $6 
Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
Non-cash items:
Depreciation and amortization88 92   
Deferred income taxes(16)(32)  
Other, net44 41 (11)(2)
Changes in assets and liabilities:
Accounts receivable, net(34)(69)  
Inventories(350)(380)  
Other assets100 121  7 
Accounts payable121 261   
Other liabilities(153)(65)(6)(9)
Income taxes, net35 48 4 2 
Pension, net(56)(51)  
Other operating activities, net4 2   
Net cash provided by (used in) operating activities(30)153 1 4 
Cash flows from investing activities
Capital expenditures(66)(62)  
Net proceeds from corporate-owned life insurance policies3 20   
Proceeds from sale of property, plant and equipment3    
Finance receivables repaid  47 35 
Finance receivables originated  (28)(17)
Other investing activities, net   1 
Net cash provided by (used in) investing activities(60)(42)19 19 
Cash flows from financing activities
Principal payments on long-term debt and nonrecourse debt(352)(2)(13)(15)
Purchases of Textron common stock(317)(377)  
Dividends paid(4)(4)  
Proceeds from options exercised63 27   
Other financing activities, net(25)(5)11  
Net cash used in financing activities(635)(361)(2)(15)
Effect of exchange rate changes on cash and equivalents(8)6   
Net increase (decrease) in cash and equivalents(733)(244)18 8 
Cash and equivalents at beginning of period2,121 1,963 60 72 
Cash and equivalents at end of period$1,388 $1,719 $78 $80 
See Notes to the Consolidated Financial Statements.
7

TEXTRON INC.
Notes to the Consolidated Financial Statements (Unaudited)

Note 1. Basis of Presentation
Our Consolidated Financial Statements include the accounts of Textron Inc. (Textron) and its majority-owned subsidiaries.  We have prepared these unaudited consolidated financial statements in accordance with accounting principles generally accepted in the U.S. for interim financial information.  Accordingly, these interim financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements.  The consolidated interim financial statements included in this quarterly report should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 30, 2023.  In the opinion of management, the interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair presentation of our consolidated financial position, results of operations and cash flows for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.
Our financings are conducted through two separate borrowing groups.  The Manufacturing group consists of Textron consolidated with its majority-owned subsidiaries that operate in the Textron Aviation, Bell, Textron Systems, Industrial and Textron eAviation segments. The Finance group, which also is the Finance segment, consists of Textron Financial Corporation and its consolidated subsidiaries. We designed this framework to enhance our borrowing power by separating the Finance group. Our Manufacturing group operations include the development, production and delivery of tangible goods and services, while our Finance group provides financial services. Due to the fundamental differences between each borrowing group’s activities, investors, rating agencies and analysts use different measures to evaluate each group’s performance. To support those evaluations, we present balance sheet and cash flow information for each borrowing group within the Consolidated Financial Statements. All significant intercompany transactions are eliminated from the Consolidated Financial Statements, including retail financing activities for inventory sold by our Manufacturing group and financed by our Finance group.
Use of Estimates
We prepare our financial statements in conformity with generally accepted accounting principles, which require us to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Our estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the Consolidated Statements of Operations in the period that they are determined.
Contract Estimates
For contracts where revenue is recognized over time, we recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable.  
In the first quarter of 2024 and 2023, our cumulative catch-up adjustments increased segment profit by $13 million and $8 million, respectively, and net income by $10 million and $6 million, respectively ($0.05 and $0.03 per diluted share, respectively).
Note 2. Accounts Receivable and Finance Receivables
Accounts Receivable
Accounts receivable is composed of the following:
(In millions)March 30,
2024
December 30,
2023
Commercial$816 $831 
U.S. Government contracts102 63 
918 894 
Allowance for credit losses(24)(26)
Total accounts receivable, net$894 $868 
8

Finance Receivables
Finance receivables are presented in the following table:
(In millions)March 30,
2024
December 30,
2023
Finance receivables$603 $609 
Allowance for credit losses(21)(24)
Total finance receivables, net$582 $585 
Finance Receivable Portfolio Quality
We internally assess the quality of our finance receivables based on a number of key credit quality indicators and statistics such as delinquency, loan balance to estimated collateral value and the financial strength of individual borrowers and guarantors. Because many of these indicators are difficult to apply across an entire class of receivables, we evaluate individual loans on a quarterly basis and classify these loans into three categories based on the key credit quality indicators for the individual loan. These three categories are performing, watchlist and nonaccrual.
We classify finance receivables as nonaccrual if credit quality indicators suggest full collection of principal and interest is doubtful. In addition, we automatically classify accounts as nonaccrual once they are contractually delinquent by more than three months unless collection of principal and interest is not doubtful. Accounts are classified as watchlist when credit quality indicators have deteriorated as compared with typical underwriting criteria, and we believe collection of full principal and interest is probable but not certain. All other finance receivables that do not meet the watchlist or nonaccrual categories are classified as performing.
We measure delinquency based on the contractual payment terms of our finance receivables.  In determining the delinquency aging category of an account, any/all principal and interest received is applied to the most past-due principal and/or interest amounts due. If a significant portion of the contractually due payment is delinquent, the entire finance receivable balance is reported in accordance with the most past-due delinquency aging category.
Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows:
(Dollars in millions)March 30,
2024
December 30,
2023
Performing$568$571
Watchlist2223
Nonaccrual1315
Nonaccrual as a percentage of finance receivables2.16%2.46%
Current and less than 31 days past due$582$589
31-60 days past due1816
61-90 days past due
Over 90 days past due34
60+ days contractual delinquency as a percentage of finance receivables0.50%0.66%
At March 30, 2024, 35% of our performing finance receivables were originated since the beginning of 2022 and 30% were originated from 2019 to 2021 with the remainder prior to 2019. For finance receivables categorized as watchlist, 100% were originated from 2020 to 2021, and for nonaccrual, 100% were originated prior to 2020.
On a quarterly basis, we evaluate individual larger balance accounts for impairment.  A finance receivable is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement based on our review of the credit quality indicators described above. Impaired finance receivables include both nonaccrual accounts and accounts for which full collection of principal and interest remains probable, but the account’s original terms have been, or are expected to be, significantly modified.  If the modification specifies an interest rate equal to or greater than a market rate for a finance receivable with comparable risk, the account is not considered impaired in years subsequent to the modification.
9

A summary of finance receivables and the allowance for credit losses, based on the results of our impairment evaluation, is provided below. The finance receivables included in this table specifically exclude leveraged leases in accordance with U.S. generally accepted accounting principles.
(In millions)March 30,
2024
December 30,
2023
Finance receivables evaluated collectively$505 $508 
Finance receivables evaluated individually13 15 
Allowance for credit losses based on collective evaluation18 21 
Allowance for credit losses based on individual evaluation3 3 
Impaired finance receivables with specific allowance for credit losses$9 $11 
Impaired finance receivables with no specific allowance for credit losses4 4 
Unpaid principal balance of impaired finance receivables20 25 
Allowance for credit losses on impaired finance receivables3 3 
Average recorded investment of impaired finance receivables14 27 
Note 3. Inventories
Inventories are composed of the following:
(In millions)March 30,
2024
December 30,
2023
Finished goods$1,148 $1,072 
Work in process1,976 1,736 
Raw materials and components1,143 1,106 
Total inventories$4,267 $3,914 
Note 4. Accounts Payable and Warranty Liability
Accounts Payable
Supplier Financing Arrangement
We have a financing arrangement with one of our suppliers for a maximum amount of $175 million that extends payment terms for up to 190 days from the receipt of goods and provides for the supplier to be paid by a financial institution earlier than maturity. This financing arrangement expires in June 2024. As of March 30, 2024 and December 30, 2023, the amount due under this supplier financing arrangement was $135 million and $125 million, respectively.
Warranty Liability
Changes in our warranty liability are as follows:
Three Months Ended
(In millions)March 30,
2024
April 1,
2023
Beginning of period$172 $149 
Provision17 15 
Settlements(18)(18)
Adjustments*(1)3 
End of period$170 $149 
* Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.

Note 5. Leases
We primarily lease certain manufacturing plants, offices, warehouses, training and service centers at various locations worldwide through operating leases. Our operating leases have remaining lease terms up to 25 years, which include options to extend the lease term for periods up to 20 years when it is reasonably certain the option will be exercised. Operating lease cost totaled $18 million and $17 million in the first quarter of 2024 and 2023, respectively. Variable and short-term lease costs were not significant. Cash paid for operating leases totaled $18 million and $17 million in the first quarter of 2024 and 2023, respectively, and is classified in cash flows from operating activities. Noncash transactions totaled $25 million and $15 million in the first quarter of 2024 and 2023, respectively, reflecting the recognition of operating lease assets and liabilities for new or extended leases.
10

Balance sheet and other information related to our operating leases is as follows:
(Dollars in millions)March 30,
2024
December 30,
2023
Other assets$382$371
Other current liabilities5755
Other liabilities334326
Weighted-average remaining lease term (in years)10.110.3
Weighted-average discount rate4.69%4.70%
At March 30, 2024, maturities of our operating lease liabilities on an undiscounted basis totaled $55 million for the remainder of 2024, $66 million for 2025, $52 million for 2026, $44 million for 2027, $42 million for 2028 and $242 million thereafter.
Note 6. Derivative Instruments and Fair Value Measurements
We measure fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  We prioritize the assumptions that market participants would use in pricing the asset or liability into a three-tier fair value hierarchy.  This fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs in which little or no market data exist, requiring companies to develop their own assumptions.  Observable inputs that do not meet the criteria of Level 1, which include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets and liabilities in markets that are not active, are categorized as Level 2.  Level 3 inputs are those that reflect our estimates about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data.  These unobservable inputs are utilized only to the extent that observable inputs are not available or cost effective to obtain.
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
We manufacture and sell our products in a number of countries throughout the world, and, therefore, we are exposed to movements in foreign currency exchange rates. We primarily utilize foreign currency exchange contracts with maturities of no more than three years to manage this volatility. These contracts qualify as cash flow hedges and are intended to offset the effect of exchange rate fluctuations on forecasted sales, inventory purchases and overhead expenses. Net gains and losses recognized in earnings and Accumulated other comprehensive loss on cash flow hedges, including gains and losses related to hedge ineffectiveness, were not significant in the periods presented.
Our foreign currency exchange contracts are measured at fair value using the market method valuation technique. The inputs to this technique utilize current foreign currency exchange forward market rates published by third-party leading financial news and data providers. These are observable data that represent the rates that the financial institution uses for contracts entered into at that date; however, they are not based on actual transactions, so they are classified as Level 2. At March 30, 2024 and December 30, 2023, we had foreign currency exchange contracts with notional amounts upon which the contracts were based of $681 million and $478 million, respectively. At March 30, 2024, the fair value amounts of our foreign currency exchange contracts were a $2 million asset and a $10 million liability. At December 30, 2023, the fair value amount of our foreign currency exchange contracts were a $4 million asset and a $3 million liability.
Our Finance group enters into interest rate swap agreements to mitigate certain exposures to fluctuations in interest rates. By using these contracts, we are able to convert floating-rate cash flows to fixed-rate cash flows. These agreements are designated as cash flow hedges. The fair value of our interest rate swap agreements is determined using values published by third-party leading financial news and data providers. These values are observable data that represent the value that financial institutions use for contracts entered into at that date, but are not based on actual transactions, so they are classified as Level 2.
At March 30, 2024 and December 30, 2023, we had interest rate swap agreements related to our Floating Rate Junior Subordinated Notes for an aggregate notional amount of $185 million that effectively converts the variable-rate interest for these Notes to a weighted-average fixed rate of 5.17%; these agreements have maturities ranging from August 2025 to August 2028. At March 30, 2024 and December 30, 2023, we had an interest rate swap agreement with a notional amount of $25 million that matures in June 2025 and effectively converts variable-rate interest on a term loan to a fixed rate of 4.13%. The fair value of our outstanding interest rate swap agreements was a $6 million asset at March 30, 2024 and a $4 million asset at December 30, 2023.
11

Assets and Liabilities Not Recorded at Fair Value
The carrying value and estimated fair value of our financial instruments that are not reflected in the financial statements at fair value are as follows:
March 30, 2024December 30, 2023
CarryingEstimatedCarryingEstimated
(In millions)ValueFair ValueValueFair Value
Manufacturing group
Debt, excluding leases$(3,168)$(2,965)$(3,520)$(3,342)
Finance group
Finance receivables, excluding leases416 422 417 423 
Debt(342)(305)(348)(293)
Fair value for the Manufacturing group debt is determined using market observable data for similar transactions (Level 2).  The fair value for the Finance group debt was determined primarily based on discounted cash flow analyses using observable market inputs from debt with similar duration, subordination and credit default expectations (Level 2). Fair value estimates for finance receivables were determined based on internally developed discounted cash flow models primarily utilizing significant unobservable inputs (Level 3), which include estimates of the rate of return, financing cost, capital structure and/or discount rate expectations of current market participants combined with estimated loan cash flows based on credit losses, payment rates and expectations of borrowers’ ability to make payments on a timely basis.
Note 7. Shareholders’ Equity
A reconciliation of Shareholders’ equity is presented below:
(In millions)Common
Stock
Capital
Surplus
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shareholders'
Equity
Three months ended March 30, 2024
Beginning of period$24 $1,910 $(165)$5,862 $(644)$6,987 
Net income— — — 201 — 201 
Other comprehensive loss— — — — (37)(37)
Share-based compensation activity1 102 — — — 103 
Dividends declared— — — (4)— (4)
Purchases of common stock, including excise tax*— — (319)— — (319)
End of period$25 $2,012 $(484)$6,059 $(681)$6,931 
Three months ended April 1, 2023
Beginning of period$26 $1,880 $(84)$5,903 $(612)$7,113 
Net income— — — 191 — 191 
Other comprehensive income— — — — 26 26 
Share-based compensation activity— 62 — — — 62 
Dividends declared— — — (4)— (4)
Purchases of common stock, including excise tax*— — (380)— — (380)
End of period$26 $1,942 $(464)$6,090 $(586)$7,008 
*Includes amounts accrued for excise tax imposed on common share repurchases of $2 million for the first quarter of 2024 and $3 million for the first quarter of 2023.
Dividends per share of common stock were $0.02 for both the first quarter of 2024 and 2023.
12

Earnings Per Share
We calculate basic and diluted earnings per share (EPS) based on net income, which approximates income available to common shareholders for each period.  Basic EPS is calculated using the two-class method, which includes the weighted-average number of common shares outstanding during the period and restricted stock units to be paid in stock that are deemed participating securities as they provide nonforfeitable rights to dividends. Diluted EPS considers the dilutive effect of all potential future common stock, including stock options.  
The weighted-average shares outstanding for basic and diluted EPS are as follows:
Three Months Ended
(In thousands)March 30,
2024
April 1,
2023
Basic weighted-average shares outstanding192,800 204,835 
Dilutive effect of stock options2,060 2,176 
Diluted weighted-average shares outstanding194,860 207,011 
Stock options to purchase 1.0 million and 2.0 million shares of common stock were excluded from the calculation of diluted weighted-average shares outstanding for the first quarter of 2024 and 2023, respectively, as their effect would have been anti-dilutive.
Accumulated Other Comprehensive Loss and Other Comprehensive Income (Loss)
The components of Accumulated other comprehensive loss are presented below:
(In millions)Pension and
Postretirement
Benefits
Adjustments
Foreign
Currency
Translation
Adjustments
Deferred
Gains (Losses)
on Hedge
Contracts
Accumulated
Other
Comprehensive
Loss
Balance at December 30, 2023$(598)$(49)$3 $(644)
Other comprehensive loss before reclassifications (33)(5)(38)
Reclassified from Accumulated other comprehensive loss1   1 
Balance at March 30, 2024$(597)$(82)$(2)$(681)
Balance at December 31, 2022$(516)$(94)$(2)$(612)
Other comprehensive income before reclassifications 28 (3)25 
Reclassified from Accumulated other comprehensive loss  1 1 
Balance at April 1, 2023$(516)$(66)$(4)$(586)
The before and after-tax components of Other comprehensive income (loss) are presented below:
March 30, 2024April 1, 2023
(In millions)Pre-Tax
Amount
Tax
(Expense)
Benefit
After-tax
Amount
Pre-Tax
Amount
Tax
(Expense)
Benefit
After-tax
Amount
Three Months Ended
Pension and postretirement benefits adjustments:
Amortization of net actuarial gain*$(1)$ $(1)$(2)$1 $(1)
Amortization of prior service cost*2  2 2 (1)1 
Pension and postretirement benefits adjustments, net1  1    
Foreign currency translation adjustments(33) (33)28  28 
Deferred losses on hedge contracts:
Current deferrals(7)2 (5)(4)1 (3)
Reclassification adjustments(1)1  2 (1)1 
Deferred losses on hedge contracts, net(8)3 (5)(2) (2)
Total$(40)$3 $(37)$26 $ $26 
*These components of other comprehensive income (loss) are included in the computation of net periodic pension cost (income). See Note 15 of our 2023 Annual Report on Form 10-K for additional information.
13

Note 8. Segment Information
We operate in, and reported financial information for, the following six operating segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation and Finance. Segment profit is an important measure used for evaluating performance and for decision-making purposes. Segment profit for the manufacturing segments excludes the non-service components of pension and postretirement income, net; LIFO inventory provision; intangible asset amortization; interest expense, net for Manufacturing group; certain corporate expenses; gains/losses on major business dispositions; and special charges. The measurement for the Finance segment includes interest income and expense along with intercompany interest income and expense.
Our revenues by segment, along with a reconciliation of segment profit to income before income taxes, are included in the table below:
Three Months Ended
(In millions)March 30,
2024
April 1,
2023
Revenues
Textron Aviation$1,188 $1,149 
Bell727 621 
Textron Systems306 306 
Industrial892 932 
Textron eAviation7 4 
Finance15 12 
Total revenues$3,135 $3,024 
Segment Profit
Textron Aviation$143 $125 
Bell80 60 
Textron Systems38 34 
Industrial29 41 
Textron eAviation(18)(9)
Finance18 8 
Segment profit290 259 
Corporate expenses and other, net(62)(39)
Interest expense, net for Manufacturing group(15)(17)
LIFO inventory provision(20)(25)
Intangible asset amortization(8)(10)
Special charges(14) 
Non-service components of pension and postretirement income, net66 59 
Income before income taxes$237 $227 
Note 9. Revenues
Disaggregation of Revenues
Our revenues disaggregated by major product type are presented below:
Three Months Ended
(In millions)March 30,
2024
April 1,
2023
Aircraft$732 $718 
Aftermarket parts and services456 431 
Textron Aviation$1,188 $1,149 
Military aircraft and support programs480 385 
Commercial helicopters, parts and services247 236 
Bell$727 $621 
Textron Systems$306 $306 
Fuel systems and functional components488 488 
Specialized vehicles404 444 
Industrial$892 $932 
Textron eAviation$7 $4 
Finance$15 $12 
Total revenues$3,135 $3,024 
14

Our revenues for our segments by customer type and geographic location are presented below:
(In millions)Textron
Aviation
BellTextron
Systems
IndustrialTextron eAviationFinanceTotal
Three months ended March 30, 2024
Customer type:
Commercial$1,155 $239 $72 $884 $7 $15 $2,372 
U.S. Government33 488 234 8   763 
Total revenues$1,188 $727 $306 $892 $7 $15 $3,135 
Geographic location:
United States$950 $559 $274 $460 $4 $4 $2,251 
Europe62 23 13 198 2 5 303 
Other international176 145 19 234 1 6 581 
Total revenues$1,188 $727 $306 $892 $7 $15 $3,135 
Three months ended April 1, 2023
Customer type:
Commercial$1,107 $232 $74 $927 $4 $12 $2,356 
U.S. Government42 389 232 5   668 
Total revenues$1,149 $621 $306 $932 $4 $12 $3,024 
Geographic location:
United States$836 $460 $275 $494 $1 $4 $2,070 
Europe66 19 14 204 2  305 
Other international247 142 17 234 1 8 649 
Total revenues$1,149 $621 $306 $932 $4 $12 $3,024 
Remaining Performance Obligations
Our remaining performance obligations, which is the equivalent of our backlog, represent the expected transaction price allocated to our contracts that we expect to recognize as revenues in future periods when we perform under the contracts.  These remaining obligations exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery, Indefinite Quantity contracts. At March 30, 2024, we had $13.7 billion in remaining performance obligations of which we expect to recognize revenues of approximately 85% through 2025, an additional 14% through 2027, and the balance thereafter.  
Contract Assets and Liabilities
Assets and liabilities related to our contracts with customers are reported on a contract-by-contract basis at the end of each reporting period. At March 30, 2024 and December 30, 2023, contract assets totaled $426 million and $513 million, respectively, and contract liabilities totaled $1.9 billion and $1.8 billion, respectively, reflecting timing differences between revenues recognized, billings and payments from customers. We recognized revenues of $327 million and $316 million in the first quarter of 2024 and 2023, respectively, that were included in the contract liability balance at the beginning of each year.
Note 10. Share-Based Compensation
Under our share-based compensation plan, we have authorization to provide awards to selected employees and non-employee directors in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, performance stock, performance share units and other awards.  Compensation expense included in net income for our share-based compensation plan is as follows:
Three Months Ended
(In millions)March 30,
2024
April 1,
2023
Compensation expense$77 $45 
Income tax benefit(19)(11)
Total compensation expense included in net income$58 $34 
Compensation expense included stock option expense of $15 million and $14 million in the first quarter of 2024 and 2023, respectively. We typically grant stock appreciation rights to selected non-U.S. employees. At March 30, 2024, outstanding stock appreciation rights totaled 409,232 with a weighted-average exercise price of $62.60 and a weighted-average remaining contractual life of 6.6 years; these units had an intrinsic value of $14 million, compared to $10 million at April 1, 2023.
15

Stock Options
Options to purchase our shares have a maximum term of ten years and generally vest ratably over a three-year period. Stock option compensation cost is calculated under the fair value approach using the Black-Scholes option-pricing model to determine the fair value of options granted on the date of grant. The expected volatility used in this model is based on historical volatilities and implied volatilities from traded options on our common stock.  The expected term is based on historical option exercise data, which is adjusted to reflect any anticipated changes in expected behavior.
We grant options annually on the first day of March. The assumptions used in our option-pricing model for these grants and the weighted-average fair value for these options are as follows:
March 1,
2024
March 1,
2023
Fair value of options at grant date$27.69$23.83 
Dividend yield0.1%0.1%
Expected volatility27.2%29.4%
Risk-free interest rate4.3%4.2%
Expected term (in years)4.84.8
The stock option activity during the first quarter of 2024 is provided below:
(Options in thousands)Number of
Options
Weighted-
Average
Exercise Price
Outstanding at December 30, 20237,515 $54.25 
Granted956 88.68 
Exercised(1,425)(44.98)
Forfeited or expired(8)(71.23)
Outstanding at March 30, 20247,038 $60.78 
Exercisable at March 30, 20245,001 $53.19 
At March 30, 2024, our outstanding options had an aggregate intrinsic value of $247 million and a weighted-average remaining contractual life of 6.4 years. Our exercisable options had an aggregate intrinsic value of $214 million and a weighted-average remaining contractual life of 5.3 years at March 30, 2024.  The total intrinsic value of options exercised during the first quarter of 2024 and 2023 was $60 million and $19 million, respectively.
Restricted Stock Units
We issue restricted stock units that include the right to receive dividend equivalents and are settled in both cash and stock. Beginning in 2020, new grants of restricted stock units will vest in full on the third anniversary of the grant date. Restricted stock units granted prior to 2020 vest one-third each in the third, fourth and fifth year following the year of the grant. Compensation cost is determined using the fair value of these units based on the trading price of our common stock. For units payable in stock, we use the trading price on the grant date, while units payable in cash are remeasured using the price at each reporting period date.
The activity for restricted stock units payable in both stock and cash during the first quarter of 2024 is provided below:
Units Payable in StockUnits Payable in Cash
(Shares/Units in thousands)Number of
Shares
Weighted-
Average Grant
Date Fair Value
Number of
Units
Weighted-
Average Grant
Date Fair Value
Outstanding at December 30, 2023, nonvested396 $61.73 810 $63.06 
Granted94 88.68 219 88.70 
Vested(165)(52.40)(367)(52.26)
Forfeited  (7)(66.64)
Outstanding at March 30, 2024, nonvested325 $74.29 655 $77.66 
16

The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows:
Three Months Ended
(In millions)March 30,
2024
April 1,
2023
Fair value of awards vested$41 $44 
Cash paid33 34 
Performance Share Units
The activity for our performance share units during the first quarter of 2024 is as follows:
(Units in thousands)Number of
Units
Weighted-
Average Grant
Date Fair Value
Outstanding at December 30, 2023, nonvested366 $72.23 
Granted194 88.68 
Outstanding at March 30, 2024, nonvested560 $77.92 
Cash paid under these awards totaled $35 million and $27 million in the first quarter of 2024 and 2023, respectively.
Note 11. Retirement Plans
We provide defined benefit pension plans and other postretirement benefits to eligible employees.  The components of net periodic benefit income for these plans are as follows:
Three Months Ended
(In millions)March 30,
2024
April 1,
2023
Pension Benefits
Service cost$17 $17 
Interest cost90 91 
Expected return on plan assets(159)(152)
Amortization of net actuarial loss1  
Amortization of prior service cost2 3 
Net periodic benefit income*$(49)$(41)
Postretirement Benefits Other Than Pensions
Interest cost$2 $2 
Amortization of net actuarial gain(2)(2)
Amortization of prior service credit (1)
Net periodic benefit income$ $(1)
* Excludes the cost associated with the defined contribution component, included in certain of our U.S.-based defined benefit pension plans, that totaled $4 million for both the first quarter of 2024 and 2023.
Note 12. Special Charges
On April 24, 2024, the Board of Directors approved the expansion of Textron’s 2023 restructuring plan to further reduce operating expenses through headcount reductions. In the first quarter of 2024, both the Shadow and Future Attack Reconnaissance Aircraft programs were cancelled at the Textron Systems and Bell segments, resulting in additional severance costs under the restructuring plan. Additionally, we increased our planned headcount reduction within the Industrial segment due to lower anticipated consumer demand for certain products at the Specialized Vehicles product line and reduced demand for fuel systems from European automotive manufacturers at Kautex. We now expect to incur additional severance costs in the second quarter of 2024 in the range of $25 million to $30 million, largely related to headcount reductions within the Industrial segment.
Since inception of the 2023 restructuring plan, we have incurred $140 million in special charges, including severance costs of $52 million, which included $22 million at the Industrial segment, $18 million at the Bell segment and $12 million at the Textron Systems segment; and asset impairment charges of $88 million at the Industrial segment. Special charges in the first quarter of 2024 totaled $14 million, which included $13 million in severance costs and $1 million in asset impairment charges in connection with this plan; we recorded $7 million of these charges at the Textron Systems segment, $5 million at the Bell segment and $2 million at the Industrial segment.
17

Headcount reductions since inception of the plan are expected to total approximately 1,500 positions, representing 4% of our global workforce. We estimate that remaining future cash outlays under this plan will be in the range of $60 million to $65 million, most of which we expect to pay in 2024. We expect charges under this plan to be substantially completed by the end of the first half of 2024.
Our restructuring reserve activity is summarized below:
(In millions)Severance
Costs
Contract
Terminations
and Other
Total
Balance at December 30, 2023$42 $5 $47 
Provision for 2023 Restructuring Plan13  13 
Cash paid(18) (18)
Foreign currency translation(1) (1)
Balance at March 30, 2024$36 $5 $41 
Note 13. Income Taxes
Our effective tax rate for the first quarter of 2024 and 2023 was 15.2% and 15.9%, respectively. In the first quarter of 2024, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the recognition of excess tax benefits related to share-based compensation, the favorable impact of research and development credits, and tax deductions for foreign-derived intangible income. In the first quarter of 2023, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the favorable impact of research and development credits and tax deductions for foreign-derived intangible income.
Note 14. Commitments and Contingencies
We are subject to actual and threatened legal proceedings and other claims arising out of the conduct of our business, including proceedings and claims relating to commercial and financial transactions; government contracts; alleged lack of compliance with applicable laws and regulations; disputes with suppliers, production partners or other third parties; product liability; patent and trademark infringement; employment disputes; and environmental, health and safety matters. Some of these legal proceedings and claims seek damages, fines or penalties in substantial amounts or remediation of environmental contamination. As a government contractor, we are subject to audits, reviews and investigations to determine whether our operations are being conducted in accordance with applicable regulatory requirements. Under federal government procurement regulations, certain claims brought by the U.S. Government could result in our suspension or debarment from U.S. Government contracting for a period of time. On the basis of information presently available, we do not believe that existing proceedings and claims will have a material effect on our financial position or results of operations.
18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Consolidated Results of Operations
Three Months Ended
(Dollars in millions)March 30,
2024
April 1,
2023
% Change
Revenues$3,135 $3,024 4%
Cost of sales2,614 2,531 3%
Gross margin as a % of Manufacturing revenues16.2%16.0%
Selling and administrative expense316 305 4%
Interest expense, net20 20 —%
Special charges14 — 100%
Non-service components of pension and postretirement income, net66 59 12%
An analysis of our consolidated operating results is set forth below. A more detailed analysis of our segments’ operating results is provided in the Segment Analysis section on pages 20 to 24.
Revenues
Revenues increased $111 million, 4%, in the first quarter of 2024, compared with the first quarter of 2023. The revenue increase primarily included the following factors:
Higher Bell revenues of $106 million, largely reflecting higher military volume of $95 million, primarily related to the FLRAA program, partially offset by lower volume on the V-22 and H-1 programs.
Higher Textron Aviation revenues of $39 million, reflecting higher pricing of $48 million, partially offset by lower volume and mix of $9 million.
Lower Industrial revenues of $40 million, due to lower volume and mix of $51 million, principally in the Specialized Vehicles product line, partially offset by higher pricing of $16 million.
Cost of Sales and Selling and Administrative Expense
Cost of sales includes cost of products and services sold for the Manufacturing group. In the first quarter of 2024, cost of sales increased $83 million, 3%, compared with the first quarter of 2023, largely due to the impact of higher net volume and mix described above and $52 million of inflation.
Selling and administrative expense increased $11 million, 4%, in the first quarter of 2024, compared with the first quarter of 2023, primarily reflecting higher share-based compensation expense, partially offset by a gain on a legal settlement and a recovery of amounts that were previously written off related to one customer relationship in the Finance segment.
Special Charges
Special charges include restructuring activities and asset impairment charges as described in Note 12 to the Consolidated Financial Statements in Item 1. Financial Statements.
Income Taxes
Our effective tax rate for the first quarter of 2024 and 2023 was 15.2% and 15.9%, respectively. In the first quarter of 2024, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the recognition of excess tax benefits related to share-based compensation, the favorable impact of research and development credits, and tax deductions for foreign-derived intangible income. In the first quarter of 2023, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the favorable impact of research and development credits and tax deductions for foreign-derived intangible income.
Backlog
Our backlog is summarized below:
(In millions)March 30,
2024
December 30,
2023
Textron Aviation$7,346 $7,169 
Bell4,549 4,780 
Textron Systems1,822 1,950 
Total backlog$13,717 $13,899 

19

Segment Analysis
We operate in, and report financial information for, the following six operating segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation and Finance. Segment profit is an important measure used for evaluating performance and for decision-making purposes. Segment profit for the manufacturing segments excludes the non-service components of pension and postretirement income, net; LIFO inventory provision; intangible asset amortization; interest expense, net for Manufacturing group; certain corporate expenses; gains/losses on major business dispositions; and special charges. The measurement for the Finance segment includes interest income and expense along with intercompany interest income and expense. Operating expenses for the Manufacturing segments include cost of sales and selling and administrative expense, while excluding certain corporate expenses, LIFO inventory provision, intangible asset amortization and special charges.
In our discussion of comparative results for the Manufacturing group, changes in revenues and segment profit for our commercial businesses typically are expressed in terms of volume and mix, pricing, foreign exchange, acquisitions and dispositions, inflation and performance. For revenues, volume and mix represents changes in revenues from increases or decreases in the number of units delivered or services provided and the composition of products and/or services sold. For segment profit, volume and mix represents a change due to the number of units delivered or services provided and the composition of products and/or services sold at different profit margins. Pricing represents changes in unit pricing. Foreign exchange is the change resulting from translating foreign-denominated amounts into U.S. dollars at exchange rates that are different from the prior period. Revenues generated by acquired businesses are reflected in Acquisitions for a twelve-month period, while reductions in revenues and segment profit from the sale of businesses are reflected as Dispositions. Inflation represents higher material, wages, benefits, pension service cost or other costs. Performance reflects an increase or decrease in research and development, depreciation, selling and administrative costs, warranty, product liability, quality/scrap, labor efficiency, overhead, product line profitability, start-up, ramp up and cost-reduction initiatives or other manufacturing inputs.
Approximately 21% of our 2023 revenues were derived from contracts with the U.S. Government, including those under the U.S. Government-sponsored foreign military sales program. For our segments that contract with the U.S. Government, changes in revenues related to these contracts are expressed in terms of volume. Changes in segment profit for these contracts are typically expressed in terms of volume and mix and performance; these include cumulative catch-up adjustments associated with a) revisions to the transaction price that may reflect contract modifications or changes in assumptions related to award fees and other variable consideration or b) changes in the total estimated costs at completion due to improved or deteriorated operating performance.
Textron Aviation
Three Months Ended
(Dollars in millions)March 30,
2024
April 1,
2023
% Change
Revenues:
Aircraft$732 $718 2%
Aftermarket parts and services456 431 6%
Total revenues1,188 1,149 3%
Operating expenses1,045 1,024 2%
Segment profit$143 $125 14%
Profit margin12.0%10.9%
Textron Aviation Revenues and Operating Expenses
The following factors contributed to the change in Textron Aviation’s revenues from the prior year quarter:
(In millions)Q1 2024
versus
Q1 2023
Pricing$48 
Volume and mix(9)
Total change$39 
Textron Aviation’s revenues increased $39 million, 3%, in the first quarter of 2024, compared with the first quarter of 2023, reflecting higher pricing of $48 million, partially offset by lower volume and mix of $9 million. The decrease in volume and mix includes lower commercial turboprop volume, partially offset by higher Citation jet volume. We delivered 36 Citation jets and 20 commercial turboprops in the first quarter of 2024, compared with 35 Citation jets and 34 commercial turboprops in the first quarter of 2023.
20

Textron Aviation’s operating expenses increased $21 million, 2%, in the first quarter of 2024, compared with the first quarter of 2023, largely reflecting inflation.
Textron Aviation Segment Profit
The following factors contributed to the change in Textron Aviation’s segment profit from the prior year quarter:
(In millions)Q1 2024
versus
Q1 2023
Pricing, net of inflation$14 
Performance
Volume and mix(2)
Total change$18 
Segment profit at Textron Aviation increased $18 million, 14%, in the first quarter of 2024, compared with the first quarter of 2023, primarily due to favorable pricing, net of inflation of $14 million.

Bell
Three Months Ended
(Dollars in millions)March 30,
2024
April 1,
2023
% Change
Revenues:
Military aircraft and support programs$480 $385 25%
Commercial helicopters, parts and services247 236 5%
Total revenues727 621 17%
Operating expenses647 561 15%
Segment profit$80 $60 33%
Profit margin11.0%9.7%
Bell’s military aircraft and support programs include a development contract for the U.S. Army's FLRAA program, as well as production, upgrade, and support contracts for the V-22 tiltrotor aircraft and H-1 helicopters. The FLRAA program has begun to represent an increasing portion of Bell’s revenues as development activities have ramped. We continue to receive production, upgrade and support orders for the V-22 and H-1 programs, however, these programs are expected to represent a lower portion of Bell’s military revenue in the future. In the first quarter of 2024, Bell received a foreign military sale award for the production and delivery of 12 AH-1Z helicopters.
Bell Revenues and Operating Expenses
The following factors contributed to the change in Bell’s revenues from the prior year quarter:
(In millions)Q1 2024
versus
Q1 2023
Volume and mix$89 
Pricing17 
Total change$106 
Bell’s revenues increased $106 million, 17%, in the first quarter of 2024, compared with the first quarter of 2023, reflecting higher volume and mix of $89 million and higher pricing of $17 million. Volume and mix included higher military volume of $95 million, primarily related to the FLRAA program, partially offset by lower volume on the V-22 and H-1 programs. Commercial volume and mix decreased $6 million, as we delivered 18 commercial helicopters in the first quarter of 2024, compared with 22 commercial helicopters in the first quarter of 2023. 
Bell’s operating expenses increased $86 million, 15% in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher volume and mix described above.
21

Bell Segment Profit
The following factors contributed to the change in Bell’s segment profit from the prior year quarter:
(In millions)Q1 2024
versus
Q1 2023
Performance$30 
Pricing, net of inflation
Volume and mix(14)
Total change$20 
Bell’s segment profit increased $20 million, 33%, in the first quarter of 2024, compared with the first quarter of 2023, largely due to a favorable impact from performance of $30 million, which included $13 million of lower research and development costs, partially offset by lower volume and mix, reflecting the mix of products and services sold in the period.
Textron Systems
Three Months Ended
(Dollars in millions)March 30,
2024
April 1,
2023
% Change
Revenues$306 $306 —%
Operating expenses268 272 (1)%
Segment profit$38 $34 12%
Profit margin12.4%11.1%
Textron Systems Revenues and Operating Expenses
The following factors contributed to the change in Textron Systems’ revenues from the prior year quarter:
(In millions)Q1 2024
versus
Q1 2023
Pricing$
Volume(4)
Total change$— 
Textron Systems' revenues were unchanged in the first quarter of 2024, compared with the first quarter of 2023, as higher pricing of $4 million was offset by lower volume of $4 million.
Textron Systems’ operating expenses decreased $4 million in the first quarter of 2024, compared with the first quarter of 2023, largely related to lower volume.
Textron Systems Segment Profit
The following factors contributed to the change in Textron Systems’ segment profit from the prior year quarter:
(In millions)Q1 2024
versus
Q1 2023
Pricing, net of inflation$
Volume and mix
Performance
Total change$
Textron Systems’ segment profit increased $4 million, 12%, in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher pricing, net of inflation of $2 million.
22

Industrial
Three Months Ended
(Dollars in millions)March 30,
2024
April 1,
2023
% Change
Revenues:
Kautex$488 $488 —%
Specialized vehicles404 444 (9)%
Total revenues892 932 (4)%
Operating expenses863 891 (3)%
Segment profit$29 $41 (29)%
Profit margin3.3%4.4%
Industrial Revenues and Operating Expenses
The following factors contributed to the change in Industrial’s revenues from the prior year quarter:
(In millions)Q1 2024
versus
Q1 2023
Volume and mix$(51)
Foreign exchange(5)
Pricing16 
Total change$(40)
Industrial segment revenues decreased $40 million, 4%, in the first quarter of 2024, compared with the first quarter of 2023, largely due to lower volume and mix of $51 million, principally in the Specialized Vehicles product line, partially offset by higher pricing of $16 million in the segment.
Industrial's operating expenses decreased $28 million, 3%, in the first quarter of 2024, compared with the first quarter of 2023, principally reflecting the impact of lower volume and mix described above.
Industrial Segment Profit
The following factors contributed to the change in Industrial’s segment profit from the prior year quarter:
(In millions)Q1 2024
versus
Q1 2023
Volume and mix$(14)
Foreign exchange(1)
Pricing, net of inflation
Total change$(12)
Segment profit for the Industrial segment decreased $12 million, 29%, in the first quarter of 2024, compared with the first quarter of 2023, largely due to lower volume and mix of $14 million as described above.
Textron eAviation
Three Months Ended
(Dollars in millions)March 30,
2024
April 1,
2023
%
Change
Revenues$