v3.25.4

Special Charges | 12 Months Ended
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Jan. 03, 2026
Restructuring and Related Activities [Abstract] |
Special Charges | Special Charges Special charges by segment and type of cost (income) are as follows:
(In millions) | Severance Costs | Contract Termination and Other Costs | Asset Impairments | Other | Total |  |  |
2025 |  |  |  |  |  |  |  |
Industrial | $ | — |  | $ | — |  | $ | — |  | $ | (4) |  | $ | (4) |  |  |  |
Textron Systems | 5 |  | 3 |  | — |  | — |  | 8 |  |  |  |
Total special charges | $ | 5 |  | $ | 3 |  | $ | — |  | $ | (4) |  | $ | 4 |  |  |  |
2024 |  |  |  |  |  |  |  |
Industrial | $ | 37 |  | $ | 32 |  | $ | 3 |  | $ | — |  | $ | 72 |  |  |  |
Bell | 1 |  | — |  | — |  | — |  | 1 |  |  |  |
Textron Systems | 5 |  | — |  | — |  | — |  | 5 |  |  |  |
Total special charges | $ | 43 |  | $ | 32 |  | $ | 3 |  | $ | — |  | $ | 78 |  |  |  |
2023 |  |  |  |  |  |  |  |
Industrial | $ | 21 |  | $ | — |  | $ | 87 |  | $ | — |  | $ | 108 |  |  |  |
Bell | 13 |  | — |  | — |  | — |  | 13 |  |  |  |
Textron Systems | 5 |  | — |  | — |  | — |  | 5 |  |  |  |
Total special charges | $ | 39 |  | $ | — |  | $ | 87 |  | $ | — |  | $ | 126 |  |  |  |
2025 Restructuring and Other Actions In connection with the termination of certain U.S. Government development programs, we initiated restructuring actions in the second quarter of 2025 to reduce operating expenses through headcount reductions and other actions at the Textron Systems segment. As a result, we recorded special charges of $8 million, which included severance costs of $5 million and contract termination costs of $3 million. Headcount reductions totaled approximately 85 positions, representing less than 1% of our global workforce. The restructuring actions were substantially completed in the third quarter of 2025. In the second quarter of 2025, we completed the strategic review of the Powersports product line discussed below, and on April 23, 2025, we closed on the sale of the Powersports business, including the Arctic Cat brand and its operations. Net cash proceeds from the sale were $16 million and we recorded a pre-tax gain of $4 million, which is included in special charges. 2023 Restructuring Plan In the fourth quarter of 2023, we initiated a restructuring plan to reduce operating expenses through headcount reductions at the Industrial, Bell and Textron Systems segments. In the Industrial segment, the plan included headcount reductions at Textron Specialized Vehicles, resulting from lower demand for certain of our powersports products, and at Kautex, due to reduced demand for fuel systems from European automotive manufacturers. In the Bell and Textron Systems segments, the plan included targeted headcount reductions to improve the segments’ cost structures and realign their workforces as these segments transition from legacy production contracts to more development, engineering focused contracts. In April 2024, the plan was expanded for the Bell and Textron Systems segments to include headcount reductions resulting from the cancellations of the Future Attack Reconnaissance Aircraft and Shadow programs in 2024. In December 2024, we approved additional actions under the 2023 plan at Textron Specialized Vehicles related to an indefinite pause in production of its powersports products. During 2024, the consumer end market demand for powersports products continued to remain soft. As a result, and in conjunction with its annual operating plan process, Textron Specialized Vehicles began to pause production of powersports products as Textron's management reviewed strategic alternatives for the business. In 2024, we recorded special charges totaling $78 million as a result of the above restructuring actions. Since inception of the 2023 plan, we have incurred $204 million in special charges including severance costs of $82 million, which included $58 million at the Industrial segment, $14 million at the Bell segment and $10 million at the Textron Systems segment; and contract termination and other costs of $32 million and asset impairment charges of $90 million at the Industrial segment. Headcount reductions since inception of the plan totaled approximately 1,800 positions, representing 5% of our global workforce. The plan was substantially completed in the first half of 2025. In the fourth quarter of 2024 and in connection with the actions taken under the restructuring plan at Textron Specialized Vehicles, we recorded an inventory valuation charge of $38 million, which is recorded in Cost of products sold, to write down production-related powersports inventory to its net realizable value. In 2023, as a result of the lower demand described above, we recognized asset impairment charges of $75 million at Textron Specialized Vehicles related to both fixed and intangible assets and $12 million of fixed asset impairment charges at Kautex. Restructuring Reserve Our restructuring reserve activity is summarized below:
(In millions) | Severance Costs | Contract Termination and Other Costs | Total
Balance at December 30, 2023 | $ | 42 |  | $ | 5 |  | $ | 47 |
Provision for 2023 restructuring plan | 49 |  | 32 |  | 81 |
Cash paid | (46) |  | (3) |  | (49) |
Reversals | (6) |  | — |  | (6) |
Foreign currency translation | (2) |  | — |  | (2) |
Balance at December 28, 2024 | $ | 37 |  | $ | 34 |  | $ | 71 |
Provision | 5 |  | 3 |  | 8 |
Cash paid | (23) |  | (18) |  | (41) |
Business disposition | (7) |  | (15) |  | (22) |
Foreign currency translation | 3 |  | — |  | 3 |
Balance at January 3, 2026 | $ | 15 |  | $ | 4 |  | $ | 19 |

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