UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
(Mark One):
 
	x	Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934	
 
		For the fiscal year ended December 31, 2019	
 
OR
 
	¨	Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934	
 
		For the transition period from _______________ to ___________________	
 
		Commission File Number 1-5480	
 
		A.  Full title of the plan and the address of the plan, if different from that of the issuer named below:	
 
TEXTRON SAVINGS PLAN
40 Westminster Street
Providence, Rhode Island 02903
 
		B.  Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:	

TEXTRON INC.
40 Westminster Street
Providence, Rhode Island 02903

 

 
 
REQUIRED INFORMATION
 
Financial Statements and Exhibits
 
The following Plan financial statements and schedules prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974 are filed herewith, as permitted by Item 4 of Form 11-K:
 
Report of Independent Registered Public Accounting Firm
 
Statements of Net Assets Available for Benefits
 
Statements of Changes in Net Assets Available for Benefits
 
Notes to financial statements
 
Supplemental Schedule:
 
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
 
Exhibits:
 
23.1 - Consent of Independent Auditors

 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, Textron Inc., as Plan Administrator, has duly caused this Annual Report on Form 11-K to be signed by the undersigned hereunto duly authorized.
 
 	TEXTRON INC., as Plan Administrator for	
 	 	the Textron Savings Plan	

 	By:	/s/Mark S. Bamford	
 	 	Mark S. Bamford	
 	 	Vice President and Corporate Controller	
 	 	
 	Date: June 24, 2020	

3

 	Financial Statements and Supplemental Schedule	
 	 	
 	Textron Savings Plan	
 	Years Ended December 31, 2019 and 2018	
 	With Report of Independent Registered Public Firm	

 

Textron Savings Plan
Financial Statements and
Supplemental Schedule
 
Years Ended December 31, 2019 and 2018
 
Contents
 
Report of Independent Registered Public Accounting Firm	3	
 	 	
Audited Financial Statements:	 	
 	 	
Statements of Net Assets Available for Benefits	5	
Statements of Changes in Net Assets Available for Benefits	6	
Notes to Financial Statements	7	
 	 	
Supplemental Schedule:	 	
 	 	
Schedule H, Line 4i, Schedule of Assets (Held at End of Year)	20	
 	 	
Exhibits:	 	
23.1- Consent of Independent Registered Public Accounting Firm	 	

2

Report of Independent Registered Public Accounting Firm
 
To the Plan Participants and the Plan Administrator of Textron Savings Plan
 
Opinion on the Financial Statements
 
We have audited the accompanying statements of net assets available for benefits of Textron Savings Plan (the Plan) as of December 31, 2019 and 2018, and the related statements of changes in net assets available for benefits for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2019 and 2018, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.
 
Basis for Opinion
 
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.
 
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

3

Supplemental Schedule
 
The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2019, has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The information in the supplemental schedule is the responsibility of the Plan’s management. Our audit procedures included determining whether the information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the information, we evaluated whether such information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.
 
/s/ Ernst & Young LLP
 
We have served as the Plan’s auditor since at least 1994, but we are unable to determine the specific year.
 
Boston, Massachusetts
 
June 24, 2020

4

Textron Savings Plan
Statements of Net Assets Available for Benefits
(In thousands)
 
 	 	Year Ended
December 31, 	 	
 	 	2019	 	 	2018	 	
Assets	 	 	 	 	 	 	
Investments, at fair value	 	$	3,983,815	 	 	$	3,398,240	 	
Investment contracts, at contract value	 	 	325,175	 	 	 	342,792	 	
Total investments	 	 	4,308,990	 	 	 	3,741,032	 	
 	 	 	 	 	 	 	 	 	
Accrued investment income	 	 	378	 	 	 	377	 	
 	 	 	 	 	 	 	 	 	
Receivables:	 	 	 	 	 	 	 	 	
   Employer contributions	 	 	42,011	 	 	 	38,900	 	
   Employee contributions	 	 	1,857	 	 	 	5,747	 	
   Notes receivable from participants	 	 	81,582	 	 	 	81,901	 	
 	 	 	125,450	 	 	 	126,548	 	
Total assets	 	 	4,434,818	 	 	 	3,867,957	 	
 	 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	 	
Accrued expenses	 	 	239	 	 	 	166	 	
 	 	 	 	 	 	 	 	 	
Net assets available for benefits	 	$	4,434,579	 	 	$	3,867,791	 	
 
See accompanying notes.

5

Textron Savings Plan
Statements of Changes in Net Assets Available for Benefits
(In thousands)
 
 	 	Year Ended
December 31, 	 	
 	 	2019	 	 	2018	 	
Additions	 	 	 	 	 	 	
Interest and dividends	 	$	23,715	 	 	$	22,131	 	
Net appreciation in value of investments	 	 	599,144	 	 	 	-	 	
 	 	 	622,859	 	 	 	22,131	 	
Contributions:	 	 	 	 	 	 	 	 	
Participants	 	 	175,646	 	 	 	169,966	 	
Employer	 	 	113,168	 	 	 	107,826	 	
Participant rollovers	 	 	9,992	 	 	 	6,349	 	
 	 	 	298,806	 	 	 	284,141	 	
 	 	 	 	 	 	 	 	 	
Total additions	 	 	921,665	 	 	 	306,272	 	
 	 	 	 	 	 	 	 	 	
Deductions	 	 	 	 	 	 	 	 	
Net depreciation in value of investments	 	 	-	 	 	 	375,866	 	
Benefit payments	 	 	352,488	 	 	 	388,570	 	
Administrative and other expenses	 	 	2,389	 	 	 	2,798	 	
Total deductions	 	 	354,877	 	 	 	767,234	 	
 	 	 	 	 	 	 	 	 	
Net Increase/(decrease)	 	 	566,788	 	 	 	(460,962	)	
 	 	 	 	 	 	 	 	 	
Net assets available for benefits:	 	 	 	 	 	 	 	 	
Beginning of year	 	 	3,867,791	 	 	 	4,328,753	 	
 	 	 	 	 	 	 	 	 	
End of year	 	$	4,434,579	 	 	$	3,867,791	 	
 
See accompanying notes.

6

 
Textron Savings Plan
 Notes to Financial Statements
December 31, 2019
 
1. Description of Plan
 
General
 
The Textron Savings Plan (the Plan) covers all eligible employees of Textron Inc. (Textron), as defined in the Plan. This Plan description includes provisions covering the majority of Plan participants. Certain business and bargaining units have other provisions. The Plan invests in the Textron Stock Fund along with Guaranteed Investment Contracts, Separate Account Contracts, Synthetic Guaranteed Investment Contracts and Common Collective Trust Funds. The Plan also offers a brokerage feature. The portion that invests in the Textron Stock Fund is an employee stock ownership plan. The remainder of the Plan is a profit-sharing and 401(k) plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and was amended and restated effective January 1, 2019 to reflect recent statutory, regulatory and other plan changes.
 
The Plan is currently administered under the terms of a Trust Agreement, dated December 1, 2004 and amended from time to time, with Fidelity Management Trust Company (the Trustee or Fidelity). Fidelity also serves as the Plan’s recordkeeper.
 
Investment Options
 
Participants may elect to direct their employee contributions to the following funds: Fidelity® Diversified International Commingled Pool, Wellington Core Bond, JPMCB U.S. Active Core Equity Fund CF-C, Wellington SMID Cap Research Equity Portfolio, Vanguard Institutional 500 Index Trust, Vanguard Institutional Small/Mid Cap Index Trust, Vanguard Institutional Total Bond Market Index Trust, Vanguard Institutional Total International Stock Market Index Trust, Textron Stock Fund, Textron Managed Income Fund, State Street Real Asset Non-Lending Series Fund Class C, Vanguard Target Retirement Income Trust Plus and Vanguard Target Retirement Trust Plus (with various targeted retirement dates).
 
Also, the Plan offers a self-directed brokerage feature, called Fidelity BrokerageLink, which gives participants expanded investment choices by enabling them to select from numerous investment and individual securities that are not otherwise available under the Plan. The values of investments purchased through the Fidelity BrokerageLink were $172,945,122  and $134,592,026  as of December 31, 2019 and 2018, respectively.
 
Contributions
 
Participants of the Plan are entitled to elect to contribute up to 40% of their eligible compensation, within the limits prescribed by Section 401(k) of the Internal Revenue Code (the Code). Certain participants may also contribute amounts representing distributions from other qualified employer retirement plans. Participants’ pre-tax and after-tax contributions, which are matched 50% on the first 10% of contributions to a maximum of 5% of eligible compensation by Textron, subject to certain ERISA restrictions and plan limits, are recorded when Textron makes payroll deductions from participants’ wages.

7

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
 
1. Description of Plan (continued)
 
Eligible employees are subject to automatic enrollment on the 60th day after their date of hire, if they have not specifically elected to be excluded from the Plan. The automatic enrollment is for 3% of eligible compensation per pay period. An employee who is automatically enrolled may elect to change or suspend his/her enrollment in the Plan at any time.
 
Since 2009, Textron has closed most of its defined benefit pension plans to new participants. When new hires join Textron locations that were formerly defined benefit pension eligible locations, these employees are eligible to receive an additional retirement cash contribution to their Plan account of either 2% or 4% (depending on employee status) of their eligible compensation. These discretionary contributions vest in accordance with the vesting schedule below. The contributions are deposited in the participant account by the end of the first quarter of the following plan year. The amount of the discretionary funding paid in 2020 for the 2019 plan year was $41,322,904  and the amount paid in 2019 for the 2018 plan year was $36,689,960 . The discretionary contribution is in addition to the matching contribution of 50% on the first 10% up to a maximum of 5%. These contributions are not considered part of the vested balance eligible for participant loans.
 
Participants who are at least age 50 or who will reach age 50 during the year are allowed to make additional employee pre-tax contributions (catch-up contributions), above the otherwise applicable limits. In accordance with limits under the federal tax laws, catch-up contributions cannot exceed $6,000 in each of 2019 and 2018 . After that, the limit may be adjusted from time to time by the U.S. Internal Revenue Service to reflect inflation. Catch-up contributions are not eligible for Company matching contributions.
 
Textron makes contributions to the Plan based on actual contribution levels. All forfeitures arising out of a participant’s termination of employment for reasons other than retirement, disability or death are used to reduce future Textron contributions. At December 31, 2019 and 2018, forfeitures totaled $1,119,503  and $2,963,253 , respectively. Forfeitures used during the years ended December 31, 2019 and 2018 to offset the Company match were $8,354,988  and $6,857,943 , respectively.
 
Employer matching contributions are made in the form of Textron Stock and invested in the Textron Stock Fund. Employees have the ability to subsequently reallocate matching contributions among any of the investment options offered in the Plan with no restrictions.
 
Benefits
 
In the event a participant ceases to be an employee or becomes totally disabled while employed, all of his or her account, to the extent then vested, shall become distributable. Distributions are in the form of cash, unless Textron stock is requested. An account will be distributed in a single payment if the value of the account is less than $5,000 when the account first becomes distributable. If the value of the account is $5,000 or more when the account first becomes distributable, a participant is not required to take a distribution immediately. A participant is always vested in the portions of his or her account attributable to his or her own contributions and compensation deferrals. The Plan provides for full vesting of a participant’s account in the event of his or her termination of employment, other than for cause, within two years after a change in control of Textron.

8

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
 
1. Description of Plan (continued)
 
Vesting
 
Textron’s contributions vest based on the length of service in the Plan, as follows:
 
Months of Service	 	 	Vested
Percentage	 	
24 months but less than 36 months	 	 	 	25	%	
36 months but less than 48 months	 	 	 	50	%	
48 months but less than 60 months	 	 	 	75	%	
60 months or more	 	 	 	100	%	
 
Participant Accounts
 
A separate account is maintained for each participant and is increased by (a) the participant’s contributions and compensation deferrals, (b) Textron’s matching contribution, and any additional discretionary contributions made by Textron, including any retirement supplement contributions and (c) plan income (loss), and is charged with an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. The participant is entitled to the vested amount in the account.
 
Notes Receivable from Participants
 
Active participants, not including directors or executive officers as determined by the plan administrator, are permitted to take up to two loans at a time and may borrow a minimum of $1,000 up to a maximum of the lesser of one-half of their vested balance or $50,000, less the participant’s highest outstanding loan balance during the 12-month period preceding the new loan request. Interest is charged at a rate of Reuters Prime Rate plus 1%, as of the first business day of the month. A fee is charged to the participant to cover the cost of administration. The loan terms may range from one to five years and are repaid primarily through automatic payroll deductions.

9

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
 
1. Description of Plan (continued)
 
Plan Termination
 
Textron has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. Textron has not expressed any intent to terminate the Plan. In the event of Plan termination, participants will become 100% vested in their accounts.

10

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
 
2. Significant Accounting Policies
 
Basis of Accounting
 
The financial statements are prepared on the accrual basis of accounting.
 
New Accounting Pronouncements
 
In July 2018, the FASB issued ASU 2018-09, Codification Improvements, which, among other things, amends an illustrative example of a fair value hierarchy disclosure to indicate that a certain type of investment should not always be considered to be eligible to use the net asset value per share practical expedient. Also, it further clarifies that an entity should evaluate whether a readily determinable fair value exists or whether its investments qualify for net asset value per share practical expedient in accordance with ASC 820, Fair Value Measurement. Adoption of the amended guidance, which is to be applied prospectively, affects the fair value disclosures, but does not change the fair value measurement of the investments. The new standard was effective January 1, 2019. In connection with the adoption, the Plan has prospectively included certain investments in the fair value hierarchy disclosure that were previously excluded from such disclosure because those investments previously used the net asset value per share practical expedient. These investments meet the criteria of readily determinable fair value.
 
Fair Values of Assets
 
In accordance with the provisions of ASC 820, Fair Value Measurement, fair value is measured 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. Assumptions that market participants would use in pricing the asset or liability (the “inputs”) are prioritized 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 exists, 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 Plan 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 only utilized to the extent that observable inputs are not available or cost-effective to obtain. There were no transfers between Levels 1, 2 and 3 in 2019 or 2018.

11

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
 
2. Significant Accounting Policies (continued)
 
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
 
The tables below present the assets and liabilities measured at fair value on a recurring basis categorized by the level of inputs used in the valuation of each asset and liability.
 
 	 	December 31, 2019	 	
(In thousands)	 	Level 1	 	 	Level 2	 	 	Level 3	 	 	Not Subject to
Leveling	 	
Textron Stock Fund	 	$	842,495	 	 	$	—	 	 	$	—	 	 	$	—	 	
BrokerageLink	 	 	172,945	 	 	 	—	 	 	 	—	 	 	 	—	 	
Common Collective Trust Funds	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Blended Debt and Equity	 	 	1,509,398	 	 	 	—	 	 	 	—	 	 	 	—	 	
Domestic Equity	 	 	1,152,572	 	 	 	—	 	 	 	—	 	 	 	—	 	
International Equity	 	 	153,470	 	 	 	—	 	 	 	—	 	 	 	—	 	
Debt Securities	 	 	146,362	 	 	 	—	 	 	 	—	 	 	 	—	 	
Domestic Debt held by the Textron Managed Income Fund	 	 	—	 	 	 	—	 	 	 	—	 	 	 	6,573	 	
Total assets	 	$	3,977,242	 	 	$	—	 	 	$	—	 	 	$	6,573	 	
 
 	 	 	December 31, 2018	 	
(In thousands)	 	 	Level 1	 	 	 	Level 2	 	 	 	Level 3	 	 	 	Not Subject to
Leveling	 	
Textron Stock Fund	 	$	866,405	 	 	$	—	 	 	$	—	 	 	$	—	 	
BrokerageLink	 	 	134,592	 	 	 	—	 	 	 	—	 	 	 	—	 	
Common Collective Trust Funds	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Blended Debt and Equity	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,225,566	 	
Domestic Equity	 	 	—	 	 	 	—	 	 	 	—	 	 	 	909,343	 	
International Equity	 	 	—	 	 	 	—	 	 	 	—	 	 	 	121,907	 	
Debt Securities	 	 	—	 	 	 	—	 	 	 	—	 	 	 	126,516	 	
Domestic Debt held by the Textron Managed Income Fund	 	 	—	 	 	 	—	 	 	 	—	 	 	 	13,911	 	
Total assets	 	$	1,000,997	 	 	$	—	 	 	$	—	 	 	$	2,397,243	 	

12

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
 
2. Significant Accounting Policies (continued)
 
The Textron Stock Fund consists solely of Textron stock, which is valued at its quoted market price, and is considered a Level 1 investment. BrokerageLink includes common stock, mutual funds, and cash valued at each company’s quoted market price, and is also considered a Level 1 investment.
 
The Common Collective Trust Funds (CCTs) are groups of investments similar to mutual funds in that they provide diversification by holding various equity and debt securities. The fair value of these investments are quoted at the net asset value per share at each valuation date and they are considered Level 1 investments. 
 
The CCT investments have the following objectives for investees:
 
(a) Blended debt and equity – This category includes securities in a diversified mix of stocks, bonds and short-term investments within one investment option. In general, these funds are age-based and allocate investments between equities and fixed income based on target retirement date. The investment funds provide daily liquidity.
 
(b) Domestic and international equity – This category includes diversified portfolios invested primarily in the common stock of U.S. and international companies.  The objective is to provide capital appreciation and long-term return.  The investment funds provide daily liquidity.
 
(c) Debt Securities – This category includes diversified portfolios invested primarily in U.S. investment grade bonds.  The objective is to provide long-term total return.  The investment funds provide daily liquidity.
 
(d) Domestic debt, held in the Textron Managed Income Fund – This category includes investments in diversified fixed income securities designed to provide capital preservation and income. These securities have an associated wrap contract. The Managed Income Fund includes an equity wash restriction on movement to competing funds for 90 days.
 
Investment Valuation and Income Recognition
 
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

13

 

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
 
2. Significant Accounting Policies (continued)
 
Guaranteed Investment Contracts, Separate Account Contracts, and Synthetic Guaranteed Investment Contracts in the Managed Income Fund
 
The Textron Managed Income Fund (the Fund) invests in a variety of stable value products, including traditional Guaranteed Investment Contracts (GICs), Separate Account Contracts (ISA GICs) and Security-backed Investment Contracts (synthetic GICs,) in addition to CCTs.
 
The GICs, ISA GICs, and Synthetic GICs represent fully benefit-responsive investments and, therefore, are reported at contract value. Contract value is the relevant measure for fully benefit-responsive investment contracts, because this is the amount received by participants if they were to initiate permitted transactions under the terms of the Plan. Contract value represents contributions made under the contract, plus interest at the crediting rate payable under such contract less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. The issuers guarantee that all qualified participant withdrawals will be at contract value (principal, plus accrued interest). There are currently no reserves against contract values for credit risk of the contract issuers or otherwise.
 
Certain events limit the ability of the Plan to transact at contract value with an issuer. In addition to certain Synthetic GIC termination provisions discussed below, such contracts generally provide for withdrawals associated with certain events which are not in the ordinary course of Plan operations. These withdrawals are paid with a market value adjustment applied to the withdrawal, as defined in the investment contract. Each contract issuer specifies the events which may trigger a market value adjustment; however, such events include the following: material amendments to the Fund’s structure or administration; changes to the participating plans’ competing investment options including the elimination of equity wash provisions; complete or partial termination of the Fund, including a merger with another fund; the failure of the Fund to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA; the redemption of all or a portion of the interests in the Fund held by a participating plan at the direction of the participating plan sponsor, including withdrawals due to the removal of a specifically identifiable group of employees from coverage under the participating plan (such as a group layoff or early retirement incentive program), the closing or sale of a subsidiary, employing unit, or affiliate, the bankruptcy or insolvency of a plan sponsor, the merger of the plan with another plan, or the plan sponsor’s establishment of another tax qualified defined contribution plan; any change in law, regulation, ruling, administrative or judicial position, or accounting requirement, applicable to the Fund or participating plans; the delivery of any communication to plan participants designed to influence a participant not to invest in the Fund.
 
At this time, the Fund does not believe that the occurrence of any such market value event, which would limit the Fund’s ability to transact at contract value with participants, is probable.

14

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
 
2. Significant Accounting Policies (continued)
 
In addition, Synthetic GICs and ISA GICs typically provide for an adjustment to contract value if a security that is part of the underlying assets defaults or otherwise becomes impaired as defined in the wrap contract. In the event of an impairment, generally contract value is decreased by the amortized cost of the impaired security and, if such security is subsequently sold, contract value is increased by the amount of such sales proceeds.
 
GICs generally do not permit issuers to terminate the agreement prior to the scheduled maturity date. Synthetic GICs generally are evergreen contracts that contain termination provisions. The termination provisions of Synthetic GICs permit the fund’s investment manager or issuer to terminate upon notice at any time at market value and provide for automatic termination of the Synthetic GIC if the contract value or market value of the contract equals zero. The issuer is not excused from paying the excess contract value when the market value equals zero. Synthetic GICs that permit the issuer to terminate at market value generally provide that the fund may elect to convert such termination to an Amortization Election, as described below. In addition, if the fund defaults in its obligations or representations under the agreement (including non-compliance with investment guidelines governing the underlying assets, or the issuer’s determination that the agreement constitutes a nonexempt prohibited transaction as defined under ERISA) and such default is not cured within any applicable cure period, then the Synthetic GIC may be terminated by the issuer and the fund will receive the market value as of the date of termination. Also, generally, Synthetic GICs permit the issuer or investment manager to elect at any time to convert the wrapped portfolio to a declining duration strategy, whereby the contract would terminate at a date which corresponds to the duration of the underlying fixed income portfolio on the date of the Amortization Election. After the effective date of an amortization election, the fixed income portfolio must conform to the guidelines agreed upon by the wrap issuer and the investment manager for the Amortization Election period. Such guidelines are intended to result in contract value equaling market value of the wrapped portfolio by such termination date. Synthetic GICs and ISA GICs also define certain other termination events that permit the issuer to terminate the contract at market value.
 
Termination events typically include the following:
 
(i) termination or replacement of the investment adviser without the issuer’s consent, (ii) the Plan or its trust is fully or partially terminated or fails to be exempt from federal income taxation, (iii) the plan merges with another plan, (iv) if a security is sold or subject to a lien other than as permitted under the contract, (v) the contract holder engages in fraud or other action that materially and adversely affects the risk profile of the contract, (vi) if there is any change in law, regulation, ruling, or accounting requirement applicable to the Plan or Fund that could cause substantial withdrawals from the Fund, (vii) performance of the issuer’s obligations under the contract becomes illegal, (viii) the bankruptcy of the Fund, Textron Savings Plan Trust or investment advisor, or (ix) the level of impaired securities as defined in the contract exceeds an agreed upon amount of the portfolio.

15

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
  
2. Significant Accounting Policies (continued)
 
Total contract value of each type of investment contract is as follows:
 
 	 	Year Ended
December 31,	 	
(In thousands)	 	2019	 	 	2018	 	
Guaranteed Investment Contracts	 	$	—	 	 	$	2,599	 	
Separate Account Contracts	 	 	84,777	 	 	 	88,682	 	
Security-backed investment contracts (synthetic GICs)	 	 	240,398	 	 	 	251,511	 	
 	 	$	325,175	 	 	$	342,792	 	
 
Notes Receivable from Participants
 
Notes receivable from participants represent participant loans that are recorded at their unpaid principal balance, plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2019 or 2018. If a participant ceases to make loan repayments and the plan administrator deems the participant loan to be a distribution, the participant loan balance is reduced and a benefit payment is recorded.
 
Benefit Payments
 
Benefit Payments are recorded upon payment.
 
Administrative Expenses
 
Administrative and other fees paid by the Plan are allocated as follows:
 
	•	Fees associated with in-service withdrawals, distributions and loans are charged directly to the associated participant account.	
 
	•	Fees with respect to each investment fund are charged against the investment returns of those investment funds and allocated on a pro-rata basis to participants who invest in those investment funds.	
 
	•	Expenses associated with qualified domestic relations orders are charged directly to the related participant account.	
 
	•	Expenses associated with operating the Plan, such as recordkeeping fees, legal fees, consulting fees, transfer fees, annuity fees, annual reporting fees, claims processing fees, cost of supplies and similar fees, are charged directly or allocated on a pro rata basis to the participant accounts.	

16

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
 
2. Significant Accounting Policies (continued)
 
Use of Estimates
 
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
 
3. Related Party and Party in Interest Transactions
 
The Plan holds shares of a fund managed by Fidelity Management Trust Company, the trustee of the plan. At December 31, 2019 and 2018, 9,882,192  shares and 10,428,901  shares, respectively, of the Fidelity Fund were held by the Plan, with a fair value of $141,809,450  and $115,343,645 , respectively. The Plan also invests in shares of Textron’s common stock. At December 31, 2019 and 2018, 18,890,024  shares and 18,838,996  shares, respectively, of Textron’s common stock were held by the Plan, with a fair value of $842,495,062  and $866,405,448 , respectively. Dividend income recorded by the Plan for Textron’s common stock for the years ended December 31, 2019 and 2018 was $1,519,223  and $1,524,936 , respectively. These transactions qualify as party-in-interest transactions; however, they are exempt from the prohibited transaction rules under ERISA.
 
4. Subsequent Events
 
Subsequent to year end, the COVID-19 pandemic has resulted in substantial volatility in the global financial markets. As a result, the Plan’s investments have incurred a significant decline in their fair value since December 31, 2019. Because the value of the Plan’s investments have and will fluctuate in response to changing market conditions, the amount of losses, if any, that will be recognized in subsequent periods, cannot be determined.
 
5. Risks and Uncertainties
 
The Plan invests in various investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.
 
6. Income Tax Status
 
The Plan has received a determination letter from the Internal Revenue Service (IRS) dated December 5, 2014, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the IRS, the Plan was amended and restated. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualified status. The plan administrator believes the Plan, as amended and restated, is being operated in compliance with the applicable requirements of the Code and, therefore, believes the Plan is qualified and the related trust is tax-exempt.

17

Textron Savings Plan
Notes to Financial Statements
December 31, 2019
 
6. Income Tax Status (continued)
 
Accounting principles generally accepted in the United States require plan management to evaluate uncertain tax positions taken by the Plan. The financial statement impact of a tax position is recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that, as of December 31, 2019 and 2018, there are no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions.
 
The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.

18

Supplemental Schedule

19

 
Textron Savings Plan
Employer Identification Number 05-0315468
Plan Number 030
 
Schedule H, Line 4i, Schedule of Assets
(Held at End of Year)
December 31, 2019
(In thousands)
 
Identity of Issue	 	Description of
Investments,
Including Rate of
Interest or Number
of Shares/Units	 	 	 Current 
Value 	 	
Textron Stock Fund*	 	 	18,890	 	 	$	842,495	 	
Common Collective Trust Funds (outside of Textron Managed Income Fund):	 	 	 	 	 	 	 	 	
Fidelity® Diversified International Commingled Pool*	 	 	9,882	 	 	 	141,809	 	
Wellington Core Bond	 	 	12,475	 	 	 	130,119	 	
JPMCB U.S. Active Core Equity Fund CF-C	 	 	6,551	 	 	 	291,794	 	
Wellington SMID Cap Research Equity Portfolio	 	 	19,820	 	 	 	249,733	 	
Vanguard Institutional Small/Mid Cap Index Trust	 	 	162	 	 	 	19,376	 	
Vanguard Institutional Total Bond Market Index Trust	 	 	149	 	 	 	16,243	 	
Vanguard Institutional Total International Stock Market Index Trust	 	 	110	 	 	 	11,661	 	
Vanguard Institutional 500 Index Trust	 	 	4,539	 	 	 	591,669	 	
Vanguard Target Retirement Income Trust Plus	 	 	868	 	 	 	40,710	 	
Vanguard Target Retirement 2015 Trust Plus	 	 	840	 	 	 	45,316	 	
Vanguard Target Retirement 2020 Trust Plus	 	 	2,794	 	 	 	162,891	 	
Vanguard Target Retirement 2025 Trust Plus	 	 	4,568	 	 	 	281,090	 	
Vanguard Target Retirement 2030 Trust Plus	 	 	3,854	 	 	 	248,450	 	
Vanguard Target Retirement 2035 Trust Plus	 	 	3,034	 	 	 	204,513	 	
Vanguard Target Retirement 2040 Trust Plus	 	 	2,779	 	 	 	193,445	 	
Vanguard Target Retirement 2045 Trust Plus	 	 	1,676	 	 	 	117,815	 	
Vanguard Target Retirement 2050 Trust Plus	 	 	1,402	 	 	 	98,584	 	
Vanguard Target Retirement 2055 Trust Plus	 	 	1,021	 	 	 	71,732	 	
Vanguard Target Retirement 2060 Trust Plus	 	 	879	 	 	 	37,148	 	
Vanguard Target Retirement 2065 Trust Plus	 	 	201	 	 	 	5,263	 	
State Street Real Asset Non-Lending Series Fund Class C	 	 	193	 	 	 	2,441	 	
Total Common Collective Trust Funds (outside Textron Managed Income Fund)	 	 	 	 	 	$	2,961,802	 	
 
*Indicates party-in-interest to the Plan

20

 
Textron Savings Plan
Employer Identification Number 05-0315468
Plan Number 030
 
Schedule H, Line 4i, Schedule of Assets
(Held at End of Year) (continued)
December 31, 2019
(In thousands)
 
Identity of Issue	 	Description of
Investments,
Including Rate of
Interest or Number of
Shares/Units	 	 	Current
Value	 	
Separate Account Contracts (in Managed Income Fund):	 	 	 	 	 	 	 	 	
   Metropolitan Life Insurance Co (Account # 771)	 	 	2.85	%	 	 	46,599	 	
   Metropolitan Life Insurance Co (Account # 690)	 	 	2.85	%	 	 	38,178	 	
Total Separate Account Contracts (in Managed Income Fund)	 	 	 	 	 	 	84,777	 	
Security-backed (Synthetic) Investment Contracts (in Managed Income Fund):	 	 	 	 	 	 	 	 	
  Prudential Insurance Company (Contract # 062428)	 	 	2.51	%	 	 	81,177	 	
  Voya Retirement Insurance and Annuity Co (Fixed Income Fund F)	 	 	2.82	%	 	 	32,495	 	
  Voya Retirement Insurance and Annuity Co (Fixed Income Fund E)	 	 	2.82	%	 	 	45,467	 	
  Voya Retirement Insurance and Annuity Co (Fixed Income Fund L)	 	 	2.82	%	 	 	2,316	 	
  Pacific Life Insurance Company (Contract # G-027810.01.0001)	 	 	2.91	%	 	 	78,943	 	
Total Security-backed (Synthetic) Investment Contracts Fund (in Managed Income Fund):	 	 	 	 	 	 	240,398	 	
Common Collective Trust Funds (in Managed Income Fund):	 	 	 	 	 	 	 	 	
  Wells Fargo/BlackRock Short Term Investment Fund	 	 	1.81	%	 	 	6,573	 	
Total Common Collective Trust Funds (in Managed Income Fund)	 	 	 	 	 	 	6,573	 	
Self-directed brokerage accounts	 	 	 	 	 	 	172,781	 	
Cash (in self-directed brokerage account)	 	 	 	 	 	 	164	 	
Notes receivable from participants	 	 	3.25% to 11	%	 	 	81,582	 	
 	 	 	 	 	 	$	4,390,572	 	

Note: Cost information has not been provided, because all investments are participant directed.

21

 
Exhibit 23.1 

Consent of Independent Registered Public Accounting Firm
 
We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-197690) pertaining to the Textron Savings Plan of Textron Inc. of our report dated June 24, 2020, with respect to the financial statements and schedule of the Textron Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2019.
 
/s/ Ernst & Young LLP
 
Boston, Massachusetts
June 24, 2020