Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
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Apr. 02, 2022 |
Apr. 03, 2021 |
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Statement of Comprehensive Income [Abstract] | ||
Net income | $ 193 | $ 171 |
Other comprehensive income, net of tax | ||
Pension and postretirement benefits adjustments, net of reclassifications | 17 | 30 |
Foreign currency translation adjustments, net of reclassifications | (14) | (18) |
Deferred gains on hedge contracts, net of reclassifications | 7 | 4 |
Other comprehensive income | 10 | 16 |
Comprehensive income | $ 203 | $ 187 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Apr. 02, 2022 |
Jan. 01, 2022 |
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Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization | $ 4,914 | $ 4,888 |
Basis of Presentation |
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Apr. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 January 1, 2022. 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 and Industrial 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 2022, our cumulative catch-up adjustments decreased segment profit by $17 million and net income by $13 million, $0.06 per diluted share. In the first quarter of 2021, our cumulative catch-up adjustments increased segment profit by $14 million and net income by $11 million, $0.05 per diluted share. Gross favorable profit adjustments totaled $16 million and $36 million in the first quarter of 2022 and 2021, respectively, and gross unfavorable profit adjustments totaled $33 million and $22 million, respectively. We reduced revenues by $12 million and recognized revenues of $18 million in the first quarter of 2022 and 2021, respectively, from performance obligations satisfied in prior periods that related to changes in profit booking rates.
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Business Acquisition |
3 Months Ended |
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Apr. 02, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisition | Business AcquisitionOn April 15, 2022, we acquired Pipistrel, a manufacturer of electrically powered aircraft, for a cash purchase price of approximately $240 million. Beginning with the second quarter of 2022, this business will be included in a new reporting segment, Textron eAviation, which will be focused on the development of sustainable aircraft. |
Accounts Receivable and Finance Receivables |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Finance Receivables | Accounts Receivable and Finance Receivables Accounts Receivable Accounts receivable is composed of the following:
Finance Receivables Finance receivables are presented in the following table:
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:
At April 2, 2022, 39% of our performing finance receivables were originated since the beginning of 2020 and 27% were originated from 2017 to 2019. For finance receivables categorized as nonaccrual, 71% were originated from 2017 to 2019. 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. 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.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories are composed of the following:
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Warranty Liability |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty Liability | Warranty Liability Changes in our warranty liability are as follows:
* Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LeasesWe 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 27 years, which include options to extend the lease term for periods up to 25 years when it is reasonably certain the option will be exercised. Operating lease cost totaled $17 million and $16 million in the first quarter of 2022 and 2021, respectively. Variable and short-term lease costs were not significant. Cash paid for operating leases totaled $17 million and $16 million in the first quarter of 2022 and 2021, respectively, and is classified in cash flows from operating activities. Noncash transactions totaled $7 million and $45 million in the first quarter of 2022 and 2021, respectively, reflecting the recognition of operating lease assets and liabilities for new or extended leases. Balance sheet and other information related to our operating leases is as follows:
At April 2, 2022, maturities of our operating lease liabilities on an undiscounted basis totaled $52 million for the remainder of 2022, $62 million for 2023, $53 million for 2024, $46 million for 2025, $35 million for 2026 and $216 million thereafter.
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Derivative Instruments and Fair Value Measurements |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Fair Value Measurements | 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 April 2, 2022 and January 1, 2022, we had foreign currency exchange contracts with notional amounts upon which the contracts were based of $345 million and $272 million, respectively. At April 2, 2022, the fair value amounts of our foreign currency exchange contracts were a $7 million asset and a $2 million liability. At January 1, 2022, the fair value amounts 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. At April 2, 2022, we had a swap agreement for a notional amount of $280 million with a maturity of August 2023 and a fair value of a $5 million asset. At January 1, 2022, we had a swap agreement for a notional amount of $289 million with a maturity of August 2023 and an insignificant fair value. The fair value of these 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. 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:
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.
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Shareholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity A reconciliation of Shareholders’ equity is presented below:
Dividends per share of common stock were $0.02 for both the first quarter of 2022 and 2021. 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:
Stock options to purchase 1.0 million and 4.3 million shares of common stock were excluded from the calculation of diluted weighted-average shares outstanding for the first quarter of 2022 and 2021, respectively, as their effect would have been anti-dilutive. Accumulated Other Comprehensive Loss and Other Comprehensive Income The components of Accumulated other comprehensive loss are presented below:
The before and after-tax components of Other comprehensive income are presented below:
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Segment Information |
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Segment Information | Segment Information We operate in, and report financial information for, the following five business segments: Textron Aviation, Bell, Textron Systems, Industrial and Finance. Segment profit is an important measure used for evaluating performance and for decision-making purposes. Segment profit for the manufacturing segments excludes interest expense, 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:
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Revenues |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Disaggregation of Revenues Our revenues disaggregated by major product type are presented below:
Our revenues for our segments by customer type and geographic location are presented below:
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 April 2, 2022, we had $12.1 billion in remaining performance obligations of which we expect to recognize revenues of approximately 78% through 2023, an additional 19% through 2025, 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 April 2, 2022 and January 1, 2022, contract assets totaled $754 million and $717 million, respectively, and contract liabilities totaled $1.5 billion and $1.2 billion, respectively, reflecting timing differences between revenues recognized, billings and payments from customers. In the first quarter of 2022 and 2021, we recognized revenues of $206 million and $278 million, respectively, that were included in the contract liability balance at the beginning of each year.
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Share-Based Compensation |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | 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:
Compensation expense included stock option expense of $12 million in both the first quarter of 2022 and 2021. 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:
The stock option activity during the first quarter of 2022 is provided below:
At April 2, 2022, our outstanding options had an aggregate intrinsic value of $199 million and a weighted-average remaining contractual life of 6.5 years. Our exercisable options had an aggregate intrinsic value of $153 million and a weighted-average remaining contractual life of 5.3 years at April 2, 2022. The total intrinsic value of options exercised during the first quarter of 2022 and 2021 was $23 million and $15 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. The fair value of these units is 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 2022 is provided below:
The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows:
Performance Share Units The activity for our performance share units during the first quarter of 2022 is as follows:
Cash paid under these awards totaled $15 million and $6 million in the first quarter of 2022 and 2021, respectively.
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Retirement Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans | Retirement PlansWe 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:
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Special Charges |
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Special Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Charges | Special Charges In the first quarter of 2021, we recognized special charges of $6 million related to a restructuring plan initiated in 2020 in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic. There were no special charges recorded in the first quarter of 2022. Our restructuring reserve activity is summarized below:
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Income Taxes |
3 Months Ended |
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Apr. 02, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesOur effective tax rate for the first quarter of 2022 and 2021 was 16.8% and 10.0%, respectively. In the first quarter of 2022, 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. In the first quarter of 2021, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to a $12 million benefit recognized for additional research and development credits related to prior years. |
Commitments and Contingencies |
3 Months Ended |
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Apr. 02, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesWe are subject to 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; production partners; product liability; patent and trademark infringement; employment disputes; and environmental, safety and health 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. |
Basis of Presentation (Policies) |
3 Months Ended |
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Apr. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | 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.
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Accounts Receivable and Finance Receivables (Tables) |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | Accounts receivable is composed of the following:
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Finance Receivables | Finance receivables are presented in the following table:
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Finance Receivables Categorized Based On Credit Quality Indicators | Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows:
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Finance Receivables By Delinquency Aging Category | Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows:
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Finance Receivables and Allowance For Credit Losses Based on Impairment Evaluation | 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.
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories are composed of the following:
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Warranty Liability (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Warranty Liability | Changes in our warranty liability are as follows:
* Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.
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Leases (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Balance Sheet and Other Information | Balance sheet and other information related to our operating leases is as follows:
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Derivative Instruments and Fair Value Measurements (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value and Estimated and Fair Value of Financial Instruments | 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:
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Shareholders' Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Shareholder's Equity | A reconciliation of Shareholders’ equity is presented below:
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Schedule of Weighted-Average Shares Outstanding for Basic and Diluted EPS | The weighted-average shares outstanding for basic and diluted EPS are as follows:
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Schedule of Components of Accumulated Other Comprehensive Loss | The components of Accumulated other comprehensive loss are presented below:
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Schedule of Before and After-Tax Components of Other Comprehensive Income (Loss) | The before and after-tax components of Other comprehensive income are presented below:
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues by Segment and Reconciliation of Segment Profit Income (Loss) Before Income Taxes | Our revenues by segment, along with a reconciliation of segment profit to income before income taxes, are included in the table below:
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Revenues (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Our revenues disaggregated by major product type are presented below:
Our revenues for our segments by customer type and geographic location are presented below:
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Share-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Expense Included in Net Income | Compensation expense included in net income for our share-based compensation plan is as follows:
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Weighted-Average Fair Value of Stock Options and Assumptions Used in Option-Pricing Model | The assumptions used in our option-pricing model for these grants and the weighted-average fair value for these options are as follows:
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Stock Option Activity | The stock option activity during the first quarter of 2022 is provided below:
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Restricted Stock Units Activity | The activity for restricted stock units payable in both stock and cash during the first quarter of 2022 is provided below:
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Fair Value of Awards Vested and Cash Paid During Respective Periods | The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows:
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Performance Share Units Activity | The activity for our performance share units during the first quarter of 2022 is as follows:
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Retirement Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Net Periodic Benefit Income | The components of net periodic benefit income for these plans are as follows:
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Special Charges (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 02, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve Activity | Our restructuring reserve activity is summarized below:
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Basis of Presentation (Details) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 02, 2022
USD ($)
borrowingGroup
$ / shares
|
Apr. 03, 2021
USD ($)
$ / shares
|
|
Basis of Presentation | ||
Number of borrowing groups | borrowingGroup | 2 | |
Cumulative catch-up method | ||
Basis of Presentation | ||
Cumulative catch up adjustments, increase (decease) in segment profit | $ (17) | $ 14 |
Change in accounting estimate financial effect, increase (decrease) in net income | $ (13) | $ 11 |
Change in accounting estimate financial effect increase (decrease) in earnings per diluted share (in dollars per share) | $ / shares | $ (0.06) | $ 0.05 |
Gross favorable adjustments | $ 16 | $ 36 |
Gross unfavorable adjustments | 33 | 22 |
Revenue (reduced) recognized from performance obligations satisfied in prior periods | $ (12) | $ 18 |
Business Acquisition (Details) $ in Millions |
Apr. 15, 2022
USD ($)
|
---|---|
Pipistrel | Subsequent Event | |
Business Acquisition [Line Items] | |
Cash purchase price | $ 240 |
Accounts Receivable and Finance Receivables - Accounts Receivable (Details) - Manufacturing group - USD ($) $ in Millions |
Apr. 02, 2022 |
Jan. 01, 2022 |
---|---|---|
Accounts Receivable | ||
Accounts receivable, gross | $ 826 | $ 862 |
Allowance for credit losses | (26) | (24) |
Total accounts receivable, net | 800 | 838 |
Commercial | ||
Accounts Receivable | ||
Accounts receivable, gross | 711 | 704 |
U.S. Government | ||
Accounts Receivable | ||
Accounts receivable, gross | $ 115 | $ 158 |
Accounts Receivable and Finance Receivables - Finance Receivables (Details) - USD ($) $ in Millions |
Apr. 02, 2022 |
Jan. 01, 2022 |
---|---|---|
Finance Receivables | ||
Finance receivables | $ 603 | $ 630 |
Allowance for credit losses | (25) | (25) |
Total finance receivables, net | $ 578 | $ 605 |
Accounts Receivable and Finance Receivables - Finance Receivables and Allowance for Losses Based on the Results of Impairment Evaluation (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Apr. 02, 2022 |
Jan. 01, 2022 |
|
Finance receivables | ||
Finance receivables evaluated collectively | $ 436 | $ 441 |
Finance receivables evaluated individually | 77 | 94 |
Allowance for credit losses based on collective evaluation | 21 | 21 |
Allowance for credit losses based on individual evaluation | 4 | 4 |
Impaired finance receivables with specific allowance for credit losses | 27 | 33 |
Impaired finance receivables with no specific allowance for credit losses | 50 | 61 |
Unpaid principal balance of impaired finance receivables | 92 | 109 |
Allowance for credit losses on impaired finance receivables | 4 | 4 |
Average recorded investment of impaired finance receivables | $ 85 | $ 117 |
Inventories (Details) - USD ($) $ in Millions |
Apr. 02, 2022 |
Jan. 01, 2022 |
---|---|---|
Inventories | ||
Finished goods | $ 1,100 | $ 1,071 |
Work in process | 1,686 | 1,548 |
Raw materials and components | 877 | 849 |
Total inventories | $ 3,663 | $ 3,468 |
Warranty Liability (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 02, 2022 |
Apr. 03, 2021 |
|
Changes in warranty liability | ||
Beginning of period | $ 127 | $ 119 |
Provision | 16 | 14 |
Settlements | (19) | (20) |
Adjustments | 6 | 3 |
End of period | $ 130 | $ 116 |
Leases - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 02, 2022 |
Apr. 03, 2021 |
|
Leases [Abstract] | ||
Remaining lease terms | 27 years | |
Operating lease - option to extend | true | |
Operating lease - option to extend the lease, term | 25 years | |
Operating lease cost | $ 17 | $ 16 |
Cash paid for operating lease liabilities | 17 | 16 |
Noncash lease transactions | $ 7 | $ 45 |
Leases - Balance Sheet and Other Information (Details) - USD ($) $ in Millions |
Apr. 02, 2022 |
Jan. 01, 2022 |
---|---|---|
Operating leases: | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Other assets | $ 367 | $ 374 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Other current liabilities | $ 56 | $ 56 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Other liabilities | $ 317 | $ 325 |
Weighted-average remaining lease term (in years) | ||
Weighted-average remaining lease term (in years) | 10 years 3 months 18 days | 10 years 6 months |
Weighted-average discount rate | ||
Weighted-average discount rate | 3.18% | 3.19% |
Leases - Maturity of Lease Liabilities (Details) $ in Millions |
Apr. 02, 2022
USD ($)
|
---|---|
Operating Leases | |
Remainder of 2022 | $ 52 |
2023 | 62 |
2024 | 53 |
2025 | 46 |
2026 | 35 |
Thereafter | $ 216 |
Derivative Instruments and Fair Value Measurements - Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 02, 2022 |
Jan. 01, 2022 |
|
Manufacturing group | ||
Fair value of derivative instruments | ||
Forward exchange contracts maximum maturity period | 3 years | |
Manufacturing group | Foreign currency exchange contracts | Cash Flow Hedging | ||
Fair value of derivative instruments | ||
Notional amounts | $ 345 | $ 272 |
Manufacturing group | Foreign currency exchange contracts | Cash Flow Hedging | Level 2 | ||
Fair value of derivative instruments | ||
Derivative asset, fair value | 7 | 4 |
Derivative liability, fair value | 2 | 3 |
Finance group | Interest Rate Swap | Cash Flow Hedging | ||
Fair value of derivative instruments | ||
Notional amounts | 280 | $ 289 |
Derivative asset, fair value | $ 5 |
Derivative Instruments and Fair Value Measurements - Assets and Liabilities not Recorded at Fair Value (Details) - USD ($) $ in Millions |
Apr. 02, 2022 |
Jan. 01, 2022 |
---|---|---|
Manufacturing group | Carrying Value | ||
Financial instruments not reflected at fair value | ||
Debt | $ (3,180) | $ (3,181) |
Manufacturing group | Estimated Fair value | ||
Financial instruments not reflected at fair value | ||
Debt | (3,118) | (3,346) |
Finance group | Carrying Value | ||
Financial instruments not reflected at fair value | ||
Debt | (470) | (582) |
Finance receivables, excluding leases | 394 | 413 |
Finance group | Estimated Fair value | ||
Financial instruments not reflected at fair value | ||
Debt | (414) | (546) |
Finance receivables, excluding leases | $ 400 | $ 444 |
Shareholders' Equity - Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Apr. 02, 2022 |
Apr. 03, 2021 |
|
Weighted-average shares outstanding for basic and diluted EPS | ||
Basic weighted-average shares outstanding (in shares) | 217,010 | 227,009 |
Dilutive effect of stock options (in shares) | 2,597 | 1,275 |
Diluted weighted-average shares outstanding (in shares) | 219,607 | 228,284 |
Stock options | ||
Weighted-average shares outstanding for basic and diluted EPS | ||
Anti-dilutive effect of weighted average shares (in shares) | 1,000 | 4,300 |
Segment Information - Operating and Reportable Segments (Details) |
3 Months Ended |
---|---|
Apr. 02, 2022
businessSegment
| |
Operating and reportable business segments | |
Number of business operating segments | 5 |
Number of reportable business segments | 5 |
Revenues - Contract Assets and Liabilities (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 02, 2022 |
Apr. 03, 2021 |
Jan. 01, 2022 |
|
Contract Assets and Liabilities | |||
Contract assets | $ 754 | $ 717 | |
Contract liabilities | 1,500 | $ 1,200 | |
Revenue recognized included in contract liabilities | $ 206 | $ 278 |
Share-Based Compensation - Compensation Expense (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 02, 2022 |
Apr. 03, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 34 | $ 55 |
Income tax expense | (8) | (13) |
Total compensation expense included in net income | 26 | 42 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 12 | $ 12 |
Share-Based Compensation - Performance Share Units (Details) - Performance Share Units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 02, 2022 |
Apr. 03, 2021 |
|
Number of Units | ||
Outstanding at beginning of period, nonvested (in shares) | 526 | |
Granted (in shares) | 174 | |
Outstanding at end of period, nonvested (in shares) | 700 | |
Weighted- Average Grant Date Fair Value | ||
Outstanding at beginning of period, nonvested (in dollars per share) | $ 45.87 | |
Granted (in dollars per share) | 71.07 | |
Outstanding at end of period, nonvested (in dollars per share) | $ 52.14 | |
Fair value | ||
Cash paid | $ 15 | $ 6 |
Retirement Plans (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 02, 2022 |
Apr. 03, 2021 |
|
Pension Benefits | ||
Net periodic benefit cost (credit) | ||
Service cost | $ 27 | $ 29 |
Interest cost | 68 | 63 |
Expected return on plan assets | (153) | (144) |
Amortization of net actuarial loss | 22 | 39 |
Amortization of prior service cost | 3 | 3 |
Net periodic benefit income | (33) | (10) |
Pension Benefits | United States | ||
Net periodic benefit cost (credit) | ||
Defined contribution component | 4 | 3 |
Postretirement Benefits Other Than Pensions | ||
Net periodic benefit cost (credit) | ||
Service cost | 1 | 1 |
Interest cost | 1 | 1 |
Amortization of net actuarial loss | (1) | (1) |
Amortization of prior service cost | (1) | (1) |
Net periodic benefit income | $ 0 | $ 0 |
Special Charges (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Apr. 02, 2022 |
Apr. 03, 2021 |
|
Special Charges [Abstract] | ||
Special charges | $ 0 | $ 6,000,000 |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 28,000,000 | |
Cash paid | (6,000,000) | |
Ending balance | 22,000,000 | |
Severance Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 19,000,000 | |
Cash paid | (6,000,000) | |
Ending balance | 13,000,000 | |
Contract Terminations and Other | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 9,000,000 | |
Cash paid | 0 | |
Ending balance | $ 9,000,000 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 02, 2022 |
Apr. 03, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 16.80% | 10.00% |
U.S. federal statutory income tax rate | 21.00% | 21.00% |
Tax benefit recognized for additional research and development credits | $ 12 |