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 in the second quarter of 2025, 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 previously announced strategic review of the Powersports product line 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.

In the third quarter and first nine months of 2024, special charges included a reversal of $2 million and charges of $25 million, respectively, related to a 2023 restructuring plan.

Our restructuring reserve activity, which includes the restructuring actions discussed above and the 2023 plan, is summarized below:


(In millions)	Severance Costs		Contract Terminations and Other		Total
Balance at December 28, 2024	$	37	$	34	$	71
Provision	5		3		8
Cash paid	(18)		(17)		(35)
Business disposition	(7)		(15)		(22)

Foreign currency translation	3		—		3
Balance at September 27, 2025	$	20	$	5	$	25