PERFORMANCE ANALYSIS WHICH COMPANIES DOES THE COMMITTEE USE TO COMPARE OUR PERFORMANCE? The table below shows the list of performance peer group companies; checkmarks in the columns under Textron’s manufacturing segments mean that the peer company competes in some way, or operates in similar industries, with that segment. 2015 Performance Peer Group 2014 Revenue Company Name ($ in billions) Bell Aviation Industrial Systems The Boeing Company $90.8 3 3 3 United Technologies Corporation 65.1 3 3 3 3 Lockheed Martin Corporation 45.6 3 3 Johnson Controls Inc. 42.8 3 Honeywell International Inc. 40.3 3 3 3 3 Deere & Company 36.1 3 General Dynamics Corporation 30.9 3 3 3 Northrop Grumman Corporation 24.0 3 Raytheon Company 22.8 3 Eaton Corporation Plc 22.6 3 3 3 3 Ingersoll-Rand Plc 12.9 3 L-3 Communications Holdings Inc. 12.1 3 3 Spirit AeroSystems Holdings, Inc. 6.8 3 3 Harris Corporation 5.0 3 Rockwell Collins Inc. 5.0 3 3 3 Textron Inc. 13.9 Three companies were removed from the 2014 performance peer group due to corporate transactions or lack of publicly available information: Alliant Techsystems Inc., Exelis Inc., and Kubota Corp. The Committee added Harris Corporation, the acquirer of Exelis Inc., to the performance peer group for 2015. The 2014 performance peer group was used for the Committee’s annual incentive compensation and performance analysis. WHAT WERE OUR PERFORMANCE GOALS? Performance goals for the 2015 annual incentive compensation program and PSUs under the long-term incentive compensation program largely focused on profitability and cash flow with an additional goal related to workforce diversity. The profitability target focused executives on delivery of segment profit in each of our segments.The cash flow target focused executives on improving operational efficiency and sustaining the strength of the balance sheet.The diversity metric focused management on having a diverse employee profile. In addition, PSUs are subject to a discretionaryTSR modifier that can decrease, but not increase, the payout by as much as 40% based on how Textron’s 3-year TSR compares to our performance peer group. 27 TEXTRON 2016 PROXY STATEMENT.