TEXTRON INC, 10-Q filed on 4/28/2022
Quarterly Report
v3.22.1
Cover - shares
3 Months Ended
Apr. 02, 2022
Apr. 15, 2022
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Apr. 02, 2022  
Document Transition Report false  
Entity File Number 1-5480  
Entity Registrant Name Textron Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 05-0315468  
Entity Address, Address Line One 40 Westminster Street  
Entity Address, City or Town Providence  
Entity Address, State or Province RI  
Entity Address, Postal Zip Code 02903  
City Area Code 401  
Local Phone Number 421-2800  
Title of 12(b) Security Common stock, $0.125 par value  
Trading Symbol TXT  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   215,083,317
Entity Central Index Key 0000217346  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q1  
Amendment Flag false  
v3.22.1
Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended
Apr. 02, 2022
Apr. 03, 2021
Revenues    
Total revenues $ 3,001,000,000 $ 2,879,000,000
Costs, expenses and other    
Selling and administrative expense 305,000,000 298,000,000
Interest expense 33,000,000 40,000,000
Non-service components of pension and postretirement income, net (61,000,000) (40,000,000)
Special charges 0 6,000,000
Gain on business disposition 0 (15,000,000)
Total costs, expenses and other 2,769,000,000 2,689,000,000
Income before income taxes 232,000,000 190,000,000
Income tax expense 39,000,000 19,000,000
Net income $ 193,000,000 $ 171,000,000
Earnings per share    
Basic (in dollars per share) $ 0.89 $ 0.75
Diluted (in dollars per share) $ 0.88 $ 0.75
Manufacturing group    
Costs, expenses and other    
Gain on business disposition $ 0 $ (15,000,000)
Net income 185,000,000 177,000,000
Finance group    
Revenues    
Total revenues 16,000,000 15,000,000
Costs, expenses and other    
Gain on business disposition 0 0
Net income 8,000,000 (6,000,000)
Product    
Costs, expenses and other    
Cost of products/services sold 2,069,000,000 2,061,000,000
Product | Manufacturing group    
Revenues    
Total revenues 2,448,000,000 2,403,000,000
Service    
Costs, expenses and other    
Cost of products/services sold 423,000,000 339,000,000
Service | Manufacturing group    
Revenues    
Total revenues $ 537,000,000 $ 461,000,000
v3.22.1
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
$ in Millions
3 Months Ended
Apr. 02, 2022
Apr. 03, 2021
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
v3.22.1
Consolidated Balance Sheets (Unaudited) - USD ($)
shares in Thousands, $ in Millions
Apr. 02, 2022
Jan. 01, 2022
Assets    
Inventories $ 3,663 $ 3,468
Finance receivables, net 578 605
Total assets 15,911 15,827
Liabilities    
Total liabilities 8,994 9,012
Shareholders’ equity    
Common stock 28 28
Capital surplus 1,924 1,863
Treasury stock (314) (157)
Retained earnings 6,058 5,870
Accumulated other comprehensive loss (779) (789)
Total shareholders’ equity 6,917 6,815
Total liabilities and shareholders’ equity $ 15,911 $ 15,827
Common shares outstanding (in shares) 215,751 216,935
Manufacturing group    
Assets    
Cash and equivalents $ 1,978 $ 1,922
Accounts receivable, net 800 838
Inventories 3,663 3,468
Other current assets 1,055 1,018
Total current assets 7,496 7,246
Property, plant and equipment, less accumulated depreciation and amortization of $4,914 and $4,888, respectively 2,488 2,538
Goodwill 2,147 2,149
Other assets 3,025 3,027
Total assets 15,156 14,960
Liabilities    
Current portion of long-term debt 7 6
Accounts payable 823 786
Other current liabilities 2,507 2,344
Total current liabilities 3,337 3,136
Other liabilities 1,912 2,005
Long-term debt 3,178 3,179
Total liabilities 8,427 8,320
Finance group    
Assets    
Cash and equivalents 148 195
Finance receivables, net 578 605
Other assets 29 67
Total assets 755 867
Liabilities    
Other liabilities 97 110
Debt 470 582
Total liabilities $ 567 $ 692
v3.22.1
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Millions
Apr. 02, 2022
Jan. 01, 2022
Statement of Financial Position [Abstract]    
Accumulated depreciation and amortization $ 4,914 $ 4,888
v3.22.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
3 Months Ended
Apr. 02, 2022
Apr. 03, 2021
Cash flows from operating activities    
Net income $ 193 $ 171
Non-cash items:    
Depreciation and amortization 93 90
Deferred income taxes (52) 11
Gain on business disposition 0 (15)
Other, net 36 38
Changes in assets and liabilities:    
Accounts receivable, net 37 (103)
Inventories (176) (178)
Other assets (4) (17)
Accounts payable 38 259
Other liabilities 26 (105)
Income taxes, net 71 (11)
Pension, net (41) (23)
Captive finance receivables, net 18 69
Other operating activities, net 2 (5)
Net cash provided by (used in) operating activities 241 181
Cash flows from investing activities    
Capital expenditures (48) (53)
Proceeds from sale of property, plant and equipment 18 0
Net proceeds from business disposition 0 39
Finance receivables repaid 13 13
Other investing activities, net 45 6
Net cash provided by (used in) investing activities 28 5
Cash flows from financing activities    
Principal payments on long-term debt and nonrecourse debt (121) (287)
Purchases of Textron common stock (157) (91)
Dividends paid (5) (5)
Proceeds from options exercised 28 27
Other financing activities, net (3) (3)
Net cash used in financing activities (258) (359)
Effect of exchange rate changes on cash and equivalents (2) (3)
Net increase (decrease) in cash and equivalents 9 (176)
Cash and equivalents at beginning of period 2,117 2,254
Cash and equivalents at end of period $ 2,126 $ 2,078
v3.22.1
Consolidated Statements of Cash Flows (Unaudited) - Manufacturing Group and Finance Group - USD ($)
$ in Millions
3 Months Ended
Apr. 02, 2022
Apr. 03, 2021
Cash flows from operating activities    
Net income $ 193 $ 171
Non-cash items:    
Depreciation and amortization 93 90
Deferred income taxes (52) 11
Gain on business disposition 0 (15)
Other, net 36 38
Changes in assets and liabilities:    
Accounts receivable, net 37 (103)
Inventories (176) (178)
Other assets (4) (17)
Accounts payable 38 259
Other liabilities 26 (105)
Income taxes, net 71 (11)
Pension, net (41) (23)
Other operating activities, net 2 (5)
Net cash provided by (used in) operating activities 241 181
Cash flows from investing activities    
Capital expenditures (48) (53)
Proceeds from sale of property, plant and equipment 18 0
Net proceeds from business disposition 0 39
Finance receivables repaid 13 13
Other investing activities, net 45 6
Net cash provided by (used in) investing activities 28 5
Cash flows from financing activities    
Principal payments on long-term debt and nonrecourse debt (121) (287)
Purchases of Textron common stock (157) (91)
Dividends paid (5) (5)
Proceeds from options exercised 28 27
Other financing activities, net (3) (3)
Net cash used in financing activities (258) (359)
Effect of exchange rate changes on cash and equivalents (2) (3)
Net increase (decrease) in cash and equivalents 9 (176)
Cash and equivalents at beginning of period 2,117 2,254
Cash and equivalents at end of period 2,126 2,078
Manufacturing group    
Cash flows from operating activities    
Net income 185 177
Non-cash items:    
Depreciation and amortization 93 88
Deferred income taxes (45) 11
Gain on business disposition 0 (15)
Other, net 37 39
Changes in assets and liabilities:    
Accounts receivable, net 37 (103)
Inventories (176) (178)
Other assets (4) (17)
Accounts payable 38 259
Other liabilities 37 (103)
Income taxes, net 62 (23)
Pension, net (41) (23)
Other operating activities, net 2 (5)
Net cash provided by (used in) operating activities 225 107
Cash flows from investing activities    
Capital expenditures (48) (53)
Proceeds from sale of property, plant and equipment 18 0
Net proceeds from business disposition 0 39
Finance receivables repaid 0 0
Finance receivables originated 0 0
Other investing activities, net 2 0
Net cash provided by (used in) investing activities (28) (14)
Cash flows from financing activities    
Principal payments on long-term debt and nonrecourse debt (2) (267)
Purchases of Textron common stock (157) (91)
Dividends paid (5) (5)
Proceeds from options exercised 28 27
Other financing activities, net (3) (3)
Net cash used in financing activities (139) (339)
Effect of exchange rate changes on cash and equivalents (2) (3)
Net increase (decrease) in cash and equivalents 56 (249)
Cash and equivalents at beginning of period 1,922 2,146
Cash and equivalents at end of period 1,978 1,897
Finance group    
Cash flows from operating activities    
Net income 8 (6)
Non-cash items:    
Depreciation and amortization 0 2
Deferred income taxes (7) 0
Gain on business disposition 0 0
Other, net (1) (1)
Changes in assets and liabilities:    
Accounts receivable, net 0 0
Inventories 0 0
Other assets 0 0
Accounts payable 0 0
Other liabilities (11) (2)
Income taxes, net 9 12
Pension, net 0 0
Other operating activities, net 0 0
Net cash provided by (used in) operating activities (2) 5
Cash flows from investing activities    
Capital expenditures 0 0
Proceeds from sale of property, plant and equipment 0 0
Net proceeds from business disposition 0 0
Finance receivables repaid 40 89
Finance receivables originated (9) (7)
Other investing activities, net 43 6
Net cash provided by (used in) investing activities 74 88
Cash flows from financing activities    
Principal payments on long-term debt and nonrecourse debt (119) (20)
Purchases of Textron common stock 0 0
Dividends paid 0 0
Proceeds from options exercised 0 0
Other financing activities, net 0 0
Net cash used in financing activities (119) (20)
Effect of exchange rate changes on cash and equivalents 0 0
Net increase (decrease) in cash and equivalents (47) 73
Cash and equivalents at beginning of period 195 108
Cash and equivalents at end of period $ 148 $ 181
v3.22.1
Basis of Presentation
3 Months Ended
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.
v3.22.1
Business Acquisition
3 Months Ended
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.
v3.22.1
Accounts Receivable and Finance Receivables
3 Months Ended
Apr. 02, 2022
Receivables [Abstract]  
Accounts Receivable and Finance Receivables Accounts Receivable and Finance Receivables
Accounts Receivable
Accounts receivable is composed of the following:
(In millions)April 2,
2022
January 1,
2022
Commercial$711 $704 
U.S. Government contracts115 158 
826 862 
Allowance for credit losses(26)(24)
Total accounts receivable, net$800 $838 
Finance Receivables
Finance receivables are presented in the following table:
(In millions)April 2,
2022
January 1,
2022
Finance receivables$603 $630 
Allowance for credit losses(25)(25)
Total finance receivables, net$578 $605 
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:
(Dollars in millions)April 2,
2022
January 1,
2022
Performing$526$536
Nonaccrual7794
Nonaccrual as a percentage of finance receivables12.77%14.92%
Current and less than 31 days past due$599$624
31-60 days past due25
61-90 days past due2
Over 90 days past due1
60+ days contractual delinquency as a percentage of finance receivables0.33%0.16%
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.
(In millions)April 2,
2022
January 1,
2022
Finance receivables evaluated collectively$436 $441 
Finance receivables evaluated individually77 94 
Allowance for credit losses based on collective evaluation21 21 
Allowance for credit losses based on individual evaluation
Impaired finance receivables with specific allowance for credit losses$27 $33 
Impaired finance receivables with no specific allowance for credit losses50 61 
Unpaid principal balance of impaired finance receivables92 109 
Allowance for credit losses on impaired finance receivables
Average recorded investment of impaired finance receivables85 117 
v3.22.1
Inventories
3 Months Ended
Apr. 02, 2022
Inventory Disclosure [Abstract]  
Inventories Inventories
Inventories are composed of the following:
(In millions)April 2,
2022
January 1,
2022
Finished goods$1,100 $1,071 
Work in process1,686 1,548 
Raw materials and components877 849 
Total inventories$3,663 $3,468 
v3.22.1
Warranty Liability
3 Months Ended
Apr. 02, 2022
Payables and Accruals [Abstract]  
Warranty Liability Warranty Liability
Changes in our warranty liability are as follows:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Beginning of period$127 $119 
Provision16 14 
Settlements(19)(20)
Adjustments*
End of period$130 $116 
* Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.
v3.22.1
Leases
3 Months Ended
Apr. 02, 2022
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:
(Dollars in millions)April 2,
2022
January 1,
2022
Other assets$367$374
Other current liabilities5656
Other liabilities317325
Weighted-average remaining lease term (in years)10.310.5
Weighted-average discount rate3.18%3.19%
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.
v3.22.1
Derivative Instruments and Fair Value Measurements
3 Months Ended
Apr. 02, 2022
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 $289 million with a maturity of August 2023 and an insignificant fair value. The fair value of these swap agreements is determined using values published by third-party leading financial news and data providers. These values are observable data that represent the value that financial institutions use for contracts entered into at that date, but are not based on actual transactions, so they are classified as Level 2.
Assets and Liabilities Not Recorded at Fair Value
The carrying value and estimated fair value of our financial instruments that are not reflected in the financial statements at fair value are as follows:
April 2, 2022January 1, 2022
CarryingEstimatedCarryingEstimated
(In millions)ValueFair ValueValueFair Value
Manufacturing group
Debt, excluding leases$(3,180)$(3,118)$(3,181)$(3,346)
Finance group
Finance receivables, excluding leases394 400 413 444 
Debt(470)(414)(582)(546)
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.
v3.22.1
Shareholders' Equity
3 Months Ended
Apr. 02, 2022
Equity [Abstract]  
Shareholders' Equity Shareholders’ Equity
A reconciliation of Shareholders’ equity is presented below:
(In millions)Common
Stock
Capital
Surplus
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shareholders'
Equity
Three months ended April 2, 2022
Beginning of period$28 $1,863 $(157)$5,870 $(789)$6,815 
Net income— — — 193 — 193 
Other comprehensive income— — — — 10 10 
Share-based compensation activity— 61 — — — 61 
Dividends declared— — — (5)— (5)
Purchases of common stock— — (157)— — (157)
End of period$28 $1,924 $(314)$6,058 $(779)$6,917 
Three months ended April 3, 2021
Beginning of period$29 $1,785 $(203)$5,973 $(1,739)$5,845 
Net income— — — 171 — 171 
Other comprehensive income— — — — 16 16 
Share-based compensation activity— 60 — — — 60 
Dividends declared— — — (5)— (5)
Purchases of common stock— — (91)— — (91)
End of period$29 $1,845 $(294)$6,139 $(1,723)$5,996 
Dividends per share of common stock were $0.02 for both the first quarter of 2022 and 2021.
Earnings Per Share
We calculate basic and diluted earnings per share (EPS) based on net income, which approximates income available to common shareholders for each period.  Basic EPS is calculated using the two-class method, which includes the weighted-average number of common shares outstanding during the period and restricted stock units to be paid in stock that are deemed participating securities as they provide nonforfeitable rights to dividends. Diluted EPS considers the dilutive effect of all potential future common stock, including stock options.  
The weighted-average shares outstanding for basic and diluted EPS are as follows:
Three Months Ended
(In thousands)April 2,
2022
April 3,
2021
Basic weighted-average shares outstanding217,010 227,009 
Dilutive effect of stock options2,597 1,275 
Diluted weighted-average shares outstanding219,607 228,284 
Stock options to purchase 1.0 million and 4.3 million shares of common stock were excluded from the calculation of diluted weighted-average shares outstanding for the first quarter of 2022 and 2021, respectively, as their effect would have been anti-dilutive.
Accumulated Other Comprehensive Loss and Other Comprehensive Income
The components of Accumulated other comprehensive loss are presented below:
(In millions)Pension and
Postretirement
Benefits
Adjustments
Foreign
Currency
Translation
Adjustments
Deferred
Gains (Losses)
on Hedge
Contracts
Accumulated
Other
Comprehensive
Loss
Balance at January 1, 2022$(799)$$$(789)
Other comprehensive loss before reclassifications— (14)(7)
Reclassified from Accumulated other comprehensive loss17 — — 17 
Balance at April 2, 2022$(782)$(5)$$(779)
Balance at January 2, 2021$(1,780)$42 $(1)$(1,739)
Other comprehensive loss before reclassifications— (32)(28)
Reclassified from Accumulated other comprehensive loss30 14 — 44 
Balance at April 3, 2021$(1,750)$24 $$(1,723)
The before and after-tax components of Other comprehensive income are presented below:
April 2, 2022April 3, 2021
(In millions)Pre-Tax
Amount
Tax
(Expense)
Benefit
After-tax
Amount
Pre-Tax
Amount
Tax
(Expense)
Benefit
After-tax
Amount
Three Months Ended
Pension and postretirement benefits adjustments:
Amortization of net actuarial loss*$21 $(5)$16 $38 $(9)$29 
Amortization of prior service cost*(1)(1)
Pension and postretirement benefits adjustments, net23 (6)17 40 (10)30 
Foreign currency translation adjustments:
Foreign currency translation adjustments(14)— (14)(32)— (32)
Business disposition— — — 14 — 14 
Foreign currency translation adjustments, net(14)— (14)(18)— (18)
Deferred gains on hedge contracts:
Current deferrals10 (3)(1)
Deferred gains on hedge contracts, net10 (3)(1)
Total$19 $(9)$10 $27 $(11)$16 
*These components of other comprehensive income are included in the computation of net periodic pension cost (income). See Note 15 of our 2021 Annual Report on Form 10-K for additional information.
v3.22.1
Segment Information
3 Months Ended
Apr. 02, 2022
Segment Reporting [Abstract]  
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:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Revenues
Textron Aviation$1,040 $865 
Bell834 846 
Textron Systems273 328 
Industrial838 825 
Finance16 15 
Total revenues$3,001 $2,879 
Segment Profit
Textron Aviation$121 $47 
Bell98 105 
Textron Systems33 51 
Industrial43 47 
Finance
Segment profit304 256 
Corporate expenses and other, net(44)(40)
Interest expense, net for Manufacturing group(28)(35)
Special charges— (6)
Gain on business disposition— 15 
Income before income taxes$232 $190 
v3.22.1
Revenues
3 Months Ended
Apr. 02, 2022
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
Disaggregation of Revenues
Our revenues disaggregated by major product type are presented below:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Aircraft$646 $535 
Aftermarket parts and services394 330 
Textron Aviation1,040 865 
Military aircraft and support programs597 577 
Commercial helicopters, parts and services237 269 
Bell834 846 
Textron Systems273 328 
Fuel systems and functional components464 497 
Specialized vehicles374 328 
Industrial838 825 
Finance16 15 
Total revenues$3,001 $2,879 
Our revenues for our segments by customer type and geographic location are presented below:
(In millions)Textron
Aviation
BellTextron
Systems
IndustrialFinanceTotal
Three months ended April 2, 2022
Customer type:
Commercial$1,021 $234 $19 $835 $16 $2,125 
U.S. Government19 600 254 — 876 
Total revenues$1,040 $834 $273 $838 $16 $3,001 
Geographic location:
United States$732 $670 $246 $426 $$2,079 
Europe119 28 190 346 
Other international189 136 19 222 10 576 
Total revenues$1,040 $834 $273 $838 $16 $3,001 
Three months ended April 3, 2021
Customer type:
Commercial$846 $266 $58 $820 $15 $2,005 
U.S. Government19 580 270 — 874 
Total revenues$865 $846 $328 $825 $15 $2,879 
Geographic location:
United States$609 $616 $289 $378 $$1,900 
Europe84 36 10 236 — 366 
Other international172 194 29 211 613 
Total revenues$865 $846 $328 $825 $15 $2,879 
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.
v3.22.1
Share-Based Compensation
3 Months Ended
Apr. 02, 2022
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:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Compensation expense$34 $55 
Income tax expense(8)(13)
Total compensation expense included in net income$26 $42 
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:
March 1, 2022March 1, 2021
Fair value of options at grant date$19.95$15.05
Dividend yield0.1%0.2%
Expected volatility29.2%33.6%
Risk-free interest rate1.9%0.7%
Expected term (in years)4.84.7
The stock option activity during the first quarter of 2022 is provided below:
(Options in thousands)Number of
Options
Weighted-
Average
Exercise Price
Outstanding at January 1, 20228,289 $46.18 
Granted1,049 71.07 
Exercised(705)(38.35)
Forfeited or expired(28)(45.34)
Outstanding at April 2, 20228,605 $49.86 
Exercisable at April 2, 20225,902 $47.13 
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:
Units Payable in StockUnits Payable in Cash
(Shares/Units in thousands)Number of
Shares
Weighted-
Average Grant
Date Fair Value
Number of
Units
Weighted-
Average Grant
Date Fair Value
Outstanding at January 1, 2022, nonvested569 $50.01 1,158 $49.92 
Granted84 71.07 223 71.07 
Vested(126)(53.95)(246)(54.02)
Forfeited— — (10)(49.55)
Outstanding at April 2, 2022, nonvested527 $52.44 1,125 $53.23 
The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Fair value of awards vested$24 $19 
Cash paid17 13 
Performance Share Units
The activity for our performance share units during the first quarter of 2022 is as follows:
(Units in thousands)Number of
Units
Weighted-
Average Grant
Date Fair Value
Outstanding at January 1, 2022, nonvested526 $45.87 
Granted174 71.07 
Outstanding at April 2, 2022, nonvested700 $52.14 
Cash paid under these awards totaled $15 million and $6 million in the first quarter of 2022 and 2021, respectively.
v3.22.1
Retirement Plans
3 Months Ended
Apr. 02, 2022
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:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Pension Benefits
Service cost$27 $29 
Interest cost68 63 
Expected return on plan assets(153)(144)
Amortization of net actuarial loss22 39 
Amortization of prior service cost
Net periodic benefit income*$(33)$(10)
Postretirement Benefits Other Than Pensions
Service cost$$
Interest cost
Amortization of net actuarial gain(1)(1)
Amortization of prior service credit(1)(1)
Net periodic benefit income$— $— 
* Excludes the cost associated with the defined contribution component, included in certain of our U.S.-based defined benefit pension plans, that totaled $4 million and $3 million for the first quarter of 2022 and 2021, respectively.
v3.22.1
Special Charges
3 Months Ended
Apr. 02, 2022
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:
(In millions)Severance
Costs
Contract
Terminations
and Other
Total
Balance at January 1, 2022$19 $$28 
Cash paid(6)— (6)
Balance at April 2, 2022$13 $$22 
The majority of the remaining cash outlays of $22 million is expected to be paid in 2022.
v3.22.1
Income Taxes
3 Months Ended
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.
v3.22.1
Commitments and Contingencies
3 Months Ended
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.
v3.22.1
Basis of Presentation (Policies)
3 Months Ended
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.
v3.22.1
Accounts Receivable and Finance Receivables (Tables)
3 Months Ended
Apr. 02, 2022
Receivables [Abstract]  
Accounts Receivable
Accounts receivable is composed of the following:
(In millions)April 2,
2022
January 1,
2022
Commercial$711 $704 
U.S. Government contracts115 158 
826 862 
Allowance for credit losses(26)(24)
Total accounts receivable, net$800 $838 
Finance Receivables
Finance receivables are presented in the following table:
(In millions)April 2,
2022
January 1,
2022
Finance receivables$603 $630 
Allowance for credit losses(25)(25)
Total finance receivables, net$578 $605 
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:
(Dollars in millions)April 2,
2022
January 1,
2022
Performing$526$536
Nonaccrual7794
Nonaccrual as a percentage of finance receivables12.77%14.92%
Current and less than 31 days past due$599$624
31-60 days past due25
61-90 days past due2
Over 90 days past due1
60+ days contractual delinquency as a percentage of finance receivables0.33%0.16%
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:
(Dollars in millions)April 2,
2022
January 1,
2022
Performing$526$536
Nonaccrual7794
Nonaccrual as a percentage of finance receivables12.77%14.92%
Current and less than 31 days past due$599$624
31-60 days past due25
61-90 days past due2
Over 90 days past due1
60+ days contractual delinquency as a percentage of finance receivables0.33%0.16%
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.
(In millions)April 2,
2022
January 1,
2022
Finance receivables evaluated collectively$436 $441 
Finance receivables evaluated individually77 94 
Allowance for credit losses based on collective evaluation21 21 
Allowance for credit losses based on individual evaluation
Impaired finance receivables with specific allowance for credit losses$27 $33 
Impaired finance receivables with no specific allowance for credit losses50 61 
Unpaid principal balance of impaired finance receivables92 109 
Allowance for credit losses on impaired finance receivables
Average recorded investment of impaired finance receivables85 117 
v3.22.1
Inventories (Tables)
3 Months Ended
Apr. 02, 2022
Inventory Disclosure [Abstract]  
Inventories
Inventories are composed of the following:
(In millions)April 2,
2022
January 1,
2022
Finished goods$1,100 $1,071 
Work in process1,686 1,548 
Raw materials and components877 849 
Total inventories$3,663 $3,468 
v3.22.1
Warranty Liability (Tables)
3 Months Ended
Apr. 02, 2022
Payables and Accruals [Abstract]  
Changes in Warranty Liability
Changes in our warranty liability are as follows:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Beginning of period$127 $119 
Provision16 14 
Settlements(19)(20)
Adjustments*
End of period$130 $116 
* Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.
v3.22.1
Leases (Tables)
3 Months Ended
Apr. 02, 2022
Leases [Abstract]  
Schedule of Balance Sheet and Other Information
Balance sheet and other information related to our operating leases is as follows:
(Dollars in millions)April 2,
2022
January 1,
2022
Other assets$367$374
Other current liabilities5656
Other liabilities317325
Weighted-average remaining lease term (in years)10.310.5
Weighted-average discount rate3.18%3.19%
v3.22.1
Derivative Instruments and Fair Value Measurements (Tables)
3 Months Ended
Apr. 02, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Carrying Value and Estimated and Fair Value of Financial Instruments
The carrying value and estimated fair value of our financial instruments that are not reflected in the financial statements at fair value are as follows:
April 2, 2022January 1, 2022
CarryingEstimatedCarryingEstimated
(In millions)ValueFair ValueValueFair Value
Manufacturing group
Debt, excluding leases$(3,180)$(3,118)$(3,181)$(3,346)
Finance group
Finance receivables, excluding leases394 400 413 444 
Debt(470)(414)(582)(546)
v3.22.1
Shareholders' Equity (Tables)
3 Months Ended
Apr. 02, 2022
Equity [Abstract]  
Schedule of Shareholder's Equity
A reconciliation of Shareholders’ equity is presented below:
(In millions)Common
Stock
Capital
Surplus
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shareholders'
Equity
Three months ended April 2, 2022
Beginning of period$28 $1,863 $(157)$5,870 $(789)$6,815 
Net income— — — 193 — 193 
Other comprehensive income— — — — 10 10 
Share-based compensation activity— 61 — — — 61 
Dividends declared— — — (5)— (5)
Purchases of common stock— — (157)— — (157)
End of period$28 $1,924 $(314)$6,058 $(779)$6,917 
Three months ended April 3, 2021
Beginning of period$29 $1,785 $(203)$5,973 $(1,739)$5,845 
Net income— — — 171 — 171 
Other comprehensive income— — — — 16 16 
Share-based compensation activity— 60 — — — 60 
Dividends declared— — — (5)— (5)
Purchases of common stock— — (91)— — (91)
End of period$29 $1,845 $(294)$6,139 $(1,723)$5,996 
Schedule of Weighted-Average Shares Outstanding for Basic and Diluted EPS
The weighted-average shares outstanding for basic and diluted EPS are as follows:
Three Months Ended
(In thousands)April 2,
2022
April 3,
2021
Basic weighted-average shares outstanding217,010 227,009 
Dilutive effect of stock options2,597 1,275 
Diluted weighted-average shares outstanding219,607 228,284 
Schedule of Components of Accumulated Other Comprehensive Loss
The components of Accumulated other comprehensive loss are presented below:
(In millions)Pension and
Postretirement
Benefits
Adjustments
Foreign
Currency
Translation
Adjustments
Deferred
Gains (Losses)
on Hedge
Contracts
Accumulated
Other
Comprehensive
Loss
Balance at January 1, 2022$(799)$$$(789)
Other comprehensive loss before reclassifications— (14)(7)
Reclassified from Accumulated other comprehensive loss17 — — 17 
Balance at April 2, 2022$(782)$(5)$$(779)
Balance at January 2, 2021$(1,780)$42 $(1)$(1,739)
Other comprehensive loss before reclassifications— (32)(28)
Reclassified from Accumulated other comprehensive loss30 14 — 44 
Balance at April 3, 2021$(1,750)$24 $$(1,723)
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:
April 2, 2022April 3, 2021
(In millions)Pre-Tax
Amount
Tax
(Expense)
Benefit
After-tax
Amount
Pre-Tax
Amount
Tax
(Expense)
Benefit
After-tax
Amount
Three Months Ended
Pension and postretirement benefits adjustments:
Amortization of net actuarial loss*$21 $(5)$16 $38 $(9)$29 
Amortization of prior service cost*(1)(1)
Pension and postretirement benefits adjustments, net23 (6)17 40 (10)30 
Foreign currency translation adjustments:
Foreign currency translation adjustments(14)— (14)(32)— (32)
Business disposition— — — 14 — 14 
Foreign currency translation adjustments, net(14)— (14)(18)— (18)
Deferred gains on hedge contracts:
Current deferrals10 (3)(1)
Deferred gains on hedge contracts, net10 (3)(1)
Total$19 $(9)$10 $27 $(11)$16 
*These components of other comprehensive income are included in the computation of net periodic pension cost (income). See Note 15 of our 2021 Annual Report on Form 10-K for additional information
v3.22.1
Segment Information (Tables)
3 Months Ended
Apr. 02, 2022
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:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Revenues
Textron Aviation$1,040 $865 
Bell834 846 
Textron Systems273 328 
Industrial838 825 
Finance16 15 
Total revenues$3,001 $2,879 
Segment Profit
Textron Aviation$121 $47 
Bell98 105 
Textron Systems33 51 
Industrial43 47 
Finance
Segment profit304 256 
Corporate expenses and other, net(44)(40)
Interest expense, net for Manufacturing group(28)(35)
Special charges— (6)
Gain on business disposition— 15 
Income before income taxes$232 $190 
v3.22.1
Revenues (Tables)
3 Months Ended
Apr. 02, 2022
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
Our revenues disaggregated by major product type are presented below:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Aircraft$646 $535 
Aftermarket parts and services394 330 
Textron Aviation1,040 865 
Military aircraft and support programs597 577 
Commercial helicopters, parts and services237 269 
Bell834 846 
Textron Systems273 328 
Fuel systems and functional components464 497 
Specialized vehicles374 328 
Industrial838 825 
Finance16 15 
Total revenues$3,001 $2,879 
Our revenues for our segments by customer type and geographic location are presented below:
(In millions)Textron
Aviation
BellTextron
Systems
IndustrialFinanceTotal
Three months ended April 2, 2022
Customer type:
Commercial$1,021 $234 $19 $835 $16 $2,125 
U.S. Government19 600 254 — 876 
Total revenues$1,040 $834 $273 $838 $16 $3,001 
Geographic location:
United States$732 $670 $246 $426 $$2,079 
Europe119 28 190 346 
Other international189 136 19 222 10 576 
Total revenues$1,040 $834 $273 $838 $16 $3,001 
Three months ended April 3, 2021
Customer type:
Commercial$846 $266 $58 $820 $15 $2,005 
U.S. Government19 580 270 — 874 
Total revenues$865 $846 $328 $825 $15 $2,879 
Geographic location:
United States$609 $616 $289 $378 $$1,900 
Europe84 36 10 236 — 366 
Other international172 194 29 211 613 
Total revenues$865 $846 $328 $825 $15 $2,879 
v3.22.1
Share-Based Compensation (Tables)
3 Months Ended
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:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Compensation expense$34 $55 
Income tax expense(8)(13)
Total compensation expense included in net income$26 $42 
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:
March 1, 2022March 1, 2021
Fair value of options at grant date$19.95$15.05
Dividend yield0.1%0.2%
Expected volatility29.2%33.6%
Risk-free interest rate1.9%0.7%
Expected term (in years)4.84.7
Stock Option Activity
The stock option activity during the first quarter of 2022 is provided below:
(Options in thousands)Number of
Options
Weighted-
Average
Exercise Price
Outstanding at January 1, 20228,289 $46.18 
Granted1,049 71.07 
Exercised(705)(38.35)
Forfeited or expired(28)(45.34)
Outstanding at April 2, 20228,605 $49.86 
Exercisable at April 2, 20225,902 $47.13 
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:
Units Payable in StockUnits Payable in Cash
(Shares/Units in thousands)Number of
Shares
Weighted-
Average Grant
Date Fair Value
Number of
Units
Weighted-
Average Grant
Date Fair Value
Outstanding at January 1, 2022, nonvested569 $50.01 1,158 $49.92 
Granted84 71.07 223 71.07 
Vested(126)(53.95)(246)(54.02)
Forfeited— — (10)(49.55)
Outstanding at April 2, 2022, nonvested527 $52.44 1,125 $53.23 
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:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Fair value of awards vested$24 $19 
Cash paid17 13 
Performance Share Units Activity
The activity for our performance share units during the first quarter of 2022 is as follows:
(Units in thousands)Number of
Units
Weighted-
Average Grant
Date Fair Value
Outstanding at January 1, 2022, nonvested526 $45.87 
Granted174 71.07 
Outstanding at April 2, 2022, nonvested700 $52.14 
v3.22.1
Retirement Plans (Tables)
3 Months Ended
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:
Three Months Ended
(In millions)April 2,
2022
April 3,
2021
Pension Benefits
Service cost$27 $29 
Interest cost68 63 
Expected return on plan assets(153)(144)
Amortization of net actuarial loss22 39 
Amortization of prior service cost
Net periodic benefit income*$(33)$(10)
Postretirement Benefits Other Than Pensions
Service cost$$
Interest cost
Amortization of net actuarial gain(1)(1)
Amortization of prior service credit(1)(1)
Net periodic benefit income$— $— 
* Excludes the cost associated with the defined contribution component, included in certain of our U.S.-based defined benefit pension plans, that totaled $4 million and $3 million for the first quarter of 2022 and 2021, respectively.
v3.22.1
Special Charges (Tables)
3 Months Ended
Apr. 02, 2022
Special Charges [Abstract]  
Schedule of Restructuring Reserve Activity
Our restructuring reserve activity is summarized below:
(In millions)Severance
Costs
Contract
Terminations
and Other
Total
Balance at January 1, 2022$19 $$28 
Cash paid(6)— (6)
Balance at April 2, 2022$13 $$22 
v3.22.1
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
v3.22.1
Business Acquisition (Details)
$ in Millions
Apr. 15, 2022
USD ($)
Pipistrel | Subsequent Event  
Business Acquisition [Line Items]  
Cash purchase price $ 240
v3.22.1
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
v3.22.1
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
v3.22.1
Accounts Receivable and Finance Receivables - Finance Receivable Portfolio Quality (Details) - USD ($)
$ in Millions
3 Months Ended
Apr. 02, 2022
Jan. 01, 2022
Finance Receivable Portfolio Quality    
Finance receivables $ 603 $ 630
60+ days contractual delinquency as a percentage of finance receivables 0.33% 0.16%
Current and less than 31 days past due    
Finance Receivable Portfolio Quality    
Finance receivables $ 599 $ 624
31-60 days past due    
Finance Receivable Portfolio Quality    
Finance receivables 2 5
61-90 days past due    
Finance Receivable Portfolio Quality    
Finance receivables 2 0
Over 90 days past due    
Finance Receivable Portfolio Quality    
Finance receivables $ 0 $ 1
Performing    
Finance Receivable Portfolio Quality    
Financing receivable originating since the beginning of 2020 39.00%  
Financing receivable originating from 2017 to 2019 27.00%  
Nonperforming    
Finance Receivable Portfolio Quality    
Nonaccrual as a percentage of finance receivables 12.77% 14.92%
Nonperforming | Nonaccrual    
Finance Receivable Portfolio Quality    
Finance receivables $ 77 $ 94
Financing receivable originating from 2017 to 2019 71.00%  
Nonperforming | Minimum    
Finance Receivable Portfolio Quality    
Number of months of contractual delinquency to classify accounts as nonaccrual unless such collection is not doubtful 3 months  
Performing    
Finance Receivable Portfolio Quality    
Finance receivables $ 526 $ 536
v3.22.1
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
v3.22.1
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
v3.22.1
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
v3.22.1
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
v3.22.1
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%
v3.22.1
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
v3.22.1
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  
v3.22.1
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
v3.22.1
Shareholders' Equity - Reconciliation of Shareholders' Equity (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended
Apr. 02, 2022
Apr. 03, 2021
Increase (Decrease) in Stockholders' Equity    
Balance at beginning of period $ 6,815 $ 5,845
Net income 193 171
Other comprehensive income 10 16
Share-based compensation activity 61 60
Dividends declared (5) (5)
Purchases of common stock (157) (91)
Balance at end of period $ 6,917 $ 5,996
Dividends per share of common stock (in dollars per share) $ 0.02 $ 0.02
Common Stock    
Increase (Decrease) in Stockholders' Equity    
Balance at beginning of period $ 28 $ 29
Balance at end of period 28 29
Capital Surplus    
Increase (Decrease) in Stockholders' Equity    
Balance at beginning of period 1,863 1,785
Share-based compensation activity 61 60
Balance at end of period 1,924 1,845
Treasury Stock    
Increase (Decrease) in Stockholders' Equity    
Balance at beginning of period (157) (203)
Purchases of common stock (157) (91)
Balance at end of period (314) (294)
Retained Earnings    
Increase (Decrease) in Stockholders' Equity    
Balance at beginning of period 5,870 5,973
Net income 193 171
Dividends declared (5) (5)
Balance at end of period 6,058 6,139
Accumulated Other Comprehensive Loss    
Increase (Decrease) in Stockholders' Equity    
Balance at beginning of period (789) (1,739)
Other comprehensive income 10 16
Balance at end of period $ (779) $ (1,723)
v3.22.1
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
v3.22.1
Shareholders' Equity - Accumulated Other Comprehensive Loss and Other Comprehensive Income (Details) - USD ($)
$ in Millions
3 Months Ended
Apr. 02, 2022
Apr. 03, 2021
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period $ 6,815 $ 5,845
Other comprehensive loss before reclassifications (7) (28)
Reclassified from Accumulated other comprehensive loss 17 44
Balance at end of period 6,917 5,996
Accumulated Other Comprehensive Loss    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period (789) (1,739)
Balance at end of period (779) (1,723)
Pension and Postretirement Benefits Adjustments    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period (799) (1,780)
Other comprehensive loss before reclassifications 0 0
Reclassified from Accumulated other comprehensive loss 17 30
Balance at end of period (782) (1,750)
Foreign Currency Translation Adjustments    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period 9 42
Other comprehensive loss before reclassifications (14) (32)
Reclassified from Accumulated other comprehensive loss 0 14
Balance at end of period (5) 24
Deferred Gains (Losses) on Hedge Contracts    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance at beginning of period 1 (1)
Other comprehensive loss before reclassifications 7 4
Reclassified from Accumulated other comprehensive loss 0 0
Balance at end of period $ 8 $ 3
v3.22.1
Shareholders' Equity - Before and After Tax Components of Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Millions
3 Months Ended
Apr. 02, 2022
Apr. 03, 2021
Pension and postretirement benefits adjustments, pre-tax:    
Amortization of net actuarial loss, pre-tax $ 21 $ 38
Amortization of prior service cost, pre-tax 2 2
Pension and postretirement benefits adjustments, net, pre-tax 23 40
Pension and postretirement benefits adjustments, tax:    
Amortization of net actuarial loss, tax (expense) benefit (5) (9)
Amortization of prior service cost, tax (expense) benefit (1) (1)
Pension and postretirement benefits adjustments, net, tax (expense) benefit (6) (10)
Pension and postretirement benefits adjustments, after-tax:    
Amortization of net actuarial loss, after-tax 16 29
Amortization of prior period service cost, after-tax 1 1
Pension and postretirement benefits adjustments, net, after-tax 17 30
Foreign currency translation adjustments, pre-tax:    
Foreign currency translation adjustments, pre-tax (14) (32)
Business disposition, pre-tax 0 14
Foreign currency translation adjustments, net, pre-tax (14) (18)
Foreign currency translation adjustments, tax:    
Foreign currency translation adjustments, tax (expense) benefit 0 0
Business disposition, tax (expense) benefit 0 0
Foreign currency translation adjustments, net, tax (expense) benefit 0 0
Foreign currency translation adjustments, after-tax:    
Foreign currency translation adjustments, after-tax (14) (32)
Business disposition, after-tax 0 14
Foreign currency translation adjustments, net, after-tax (14) (18)
Deferred gains (losses) on hedge contracts, pre-tax:    
Current deferrals, pre-tax 10 5
Deferred gains on hedge contracts, net, pre-tax 10 5
Deferred gains (losses) on hedge contracts, tax:    
Current deferrals, tax (expense) benefit (3) (1)
Deferred gains on hedge contracts, net, tax (expense) benefit (3) (1)
Deferred gains (losses) on hedge contracts, after-tax:    
Current deferrals, after-tax 7 4
Deferred gains on hedge contracts, net, after-tax 7 4
Other comprehensive income (loss), pre-tax 19 27
Other comprehensive income (loss), tax (expense) benefit (9) (11)
Other comprehensive income $ 10 $ 16
v3.22.1
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
v3.22.1
Segment Information - Revenue by Segment and Reconciliation of Segment Profit to Income Before Income Taxes (Details) - USD ($)
3 Months Ended
Apr. 02, 2022
Apr. 03, 2021
Revenues    
Total revenues $ 3,001,000,000 $ 2,879,000,000
Reconciliation of segment profit to income from continuing operations before income taxes    
Special charges 0 (6,000,000)
Gain on business disposition 0 15,000,000
Income before income taxes 232,000,000 190,000,000
Operating Segment    
Reconciliation of segment profit to income from continuing operations before income taxes    
Segment profit 304,000,000 256,000,000
Reconciling Items    
Reconciliation of segment profit to income from continuing operations before income taxes    
Corporate expenses and other, net (44,000,000) (40,000,000)
Special charges 0 (6,000,000)
Gain on business disposition 0 15,000,000
Textron Aviation    
Revenues    
Total revenues 1,040,000,000 865,000,000
Bell    
Revenues    
Total revenues 834,000,000 846,000,000
Textron Systems    
Revenues    
Total revenues 273,000,000 328,000,000
Industrial    
Revenues    
Total revenues 838,000,000 825,000,000
Finance    
Revenues    
Total revenues 16,000,000 15,000,000
Manufacturing group    
Reconciliation of segment profit to income from continuing operations before income taxes    
Gain on business disposition 0 15,000,000
Manufacturing group | Reconciling Items    
Reconciliation of segment profit to income from continuing operations before income taxes    
Interest expense, net for Manufacturing group (28,000,000) (35,000,000)
Manufacturing group | Textron Aviation | Operating Segment    
Revenues    
Total revenues 1,040,000,000 865,000,000
Reconciliation of segment profit to income from continuing operations before income taxes    
Segment profit 121,000,000 47,000,000
Manufacturing group | Bell | Operating Segment    
Revenues    
Total revenues 834,000,000 846,000,000
Reconciliation of segment profit to income from continuing operations before income taxes    
Segment profit 98,000,000 105,000,000
Manufacturing group | Textron Systems | Operating Segment    
Revenues    
Total revenues 273,000,000 328,000,000
Reconciliation of segment profit to income from continuing operations before income taxes    
Segment profit 33,000,000 51,000,000
Manufacturing group | Industrial | Operating Segment    
Revenues    
Total revenues 838,000,000 825,000,000
Reconciliation of segment profit to income from continuing operations before income taxes    
Segment profit 43,000,000 47,000,000
Finance group    
Revenues    
Total revenues 16,000,000 15,000,000
Reconciliation of segment profit to income from continuing operations before income taxes    
Gain on business disposition 0 0
Finance group | Finance | Operating Segment    
Revenues    
Total revenues 16,000,000 15,000,000
Reconciliation of segment profit to income from continuing operations before income taxes    
Segment profit $ 9,000,000 $ 6,000,000
v3.22.1
Revenues - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
3 Months Ended
Apr. 02, 2022
Apr. 03, 2021
Revenues    
Revenues $ 3,001 $ 2,879
United States    
Revenues    
Revenues 2,079 1,900
Europe    
Revenues    
Revenues 346 366
Other international    
Revenues    
Revenues 576 613
Commercial    
Revenues    
Revenues 2,125 2,005
U.S. Government    
Revenues    
Revenues 876 874
Textron Aviation    
Revenues    
Revenues 1,040 865
Textron Aviation | United States    
Revenues    
Revenues 732 609
Textron Aviation | Europe    
Revenues    
Revenues 119 84
Textron Aviation | Other international    
Revenues    
Revenues 189 172
Textron Aviation | Commercial    
Revenues    
Revenues 1,021 846
Textron Aviation | U.S. Government    
Revenues    
Revenues 19 19
Textron Aviation | Aircraft    
Revenues    
Revenues 646 535
Textron Aviation | Aftermarket parts and services    
Revenues    
Revenues 394 330
Bell    
Revenues    
Revenues 834 846
Bell | United States    
Revenues    
Revenues 670 616
Bell | Europe    
Revenues    
Revenues 28 36
Bell | Other international    
Revenues    
Revenues 136 194
Bell | Commercial    
Revenues    
Revenues 234 266
Bell | U.S. Government    
Revenues    
Revenues 600 580
Bell | Military aircraft and support programs    
Revenues    
Revenues 597 577
Bell | Commercial helicopters, parts and services    
Revenues    
Revenues 237 269
Textron Systems    
Revenues    
Revenues 273 328
Textron Systems | United States    
Revenues    
Revenues 246 289
Textron Systems | Europe    
Revenues    
Revenues 8 10
Textron Systems | Other international    
Revenues    
Revenues 19 29
Textron Systems | Commercial    
Revenues    
Revenues 19 58
Textron Systems | U.S. Government    
Revenues    
Revenues 254 270
Industrial    
Revenues    
Revenues 838 825
Industrial | United States    
Revenues    
Revenues 426 378
Industrial | Europe    
Revenues    
Revenues 190 236
Industrial | Other international    
Revenues    
Revenues 222 211
Industrial | Commercial    
Revenues    
Revenues 835 820
Industrial | U.S. Government    
Revenues    
Revenues 3 5
Industrial | Fuel systems and functional components    
Revenues    
Revenues 464 497
Industrial | Specialized vehicles    
Revenues    
Revenues 374 328
Finance    
Revenues    
Revenues 16 15
Finance | United States    
Revenues    
Revenues 5 8
Finance | Europe    
Revenues    
Revenues 1 0
Finance | Other international    
Revenues    
Revenues 10 7
Finance | Commercial    
Revenues    
Revenues 16 15
Finance | U.S. Government    
Revenues    
Revenues $ 0 $ 0
v3.22.1
Revenues - Remaining Performance Obligations (Details)
$ in Billions
Apr. 02, 2022
USD ($)
Remaining Performance Obligation, Expected Timing of Satisfaction  
Remaining performance obligation $ 12.1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-03  
Remaining Performance Obligation, Expected Timing of Satisfaction  
Remaining performance obligation, percent 78.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 21 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-12-31  
Remaining Performance Obligation, Expected Timing of Satisfaction  
Remaining performance obligation, percent 19.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 24 months
v3.22.1
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  
v3.22.1
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
v3.22.1
Share-Based Compensation - Stock Options (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
3 Months Ended
Mar. 01, 2022
Mar. 01, 2021
Apr. 02, 2022
Apr. 03, 2021
Additional general disclosures        
Aggregate intrinsic value of outstanding options     $ 199  
Weighted-average remaining contractual life of outstanding stock options     6 years 6 months  
Aggregate intrinsic value of exercisable options     $ 153  
Weighted-average remaining contractual life of exercisable options     5 years 3 months 18 days  
Total intrinsic value of options exercised     $ 23 $ 15
Stock options        
Share-Based Compensation        
Maximum term of options     10 years  
Performance share units vesting period     3 years  
Weighted-average assumptions used in Black-Scholes option-pricing model        
Fair value of options at grant date (in dollars per share) $ 19.95 $ 15.05    
Dividend yield 0.10% 0.20%    
Expected volatility 29.20% 33.60%    
Risk-free interest rate 1.90% 0.70%    
Expected term (in years) 4 years 9 months 18 days 4 years 8 months 12 days    
Number of Options        
Outstanding at beginning of period (in shares)     8,289  
Granted (in shares)     1,049  
Exercised (in shares)     (705)  
Forfeited or expired (in shares)     (28)  
Outstanding at end of period (in shares)     8,605  
Exercisable at end of period (in shares)     5,902  
Weighted-Average Exercise Price        
Outstanding at beginning of period (in dollars per share)     $ 46.18  
Granted (in dollars per share)     71.07  
Exercised (in dollars per share)     (38.35)  
Forfeited or expired (in dollars per share)     (45.34)  
Outstanding at end of period (in dollars per share)     49.86  
Exercisable at end of period (in dollars per share)     $ 47.13  
v3.22.1
Share-Based Compensation - Restricted Stock Units (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
3 Months Ended
Apr. 02, 2022
Apr. 03, 2021
Units Payable in Stock    
Number of Units    
Outstanding at beginning of period, nonvested (in shares) 569  
Granted (in shares) 84  
Vested (in shares) (126)  
Forfeited (in shares) 0  
Outstanding at end of period, nonvested (in shares) 527  
Weighted- Average Grant Date Fair Value    
Outstanding at beginning of period, nonvested (in dollars per share) $ 50.01  
Granted (in dollars per share) 71.07  
Vested (in dollars per share) (53.95)  
Forfeited (in dollars per share) 0  
Outstanding at end of period, nonvested (in dollars per share) $ 52.44  
Units Payable in Cash    
Number of Units    
Outstanding at beginning of period, nonvested (in shares) 1,158  
Granted (in shares) 223  
Vested (in shares) (246)  
Forfeited (in shares) (10)  
Outstanding at end of period, nonvested (in shares) 1,125  
Weighted- Average Grant Date Fair Value    
Outstanding at beginning of period, nonvested (in dollars per share) $ 49.92  
Granted (in dollars per share) 71.07  
Vested (in dollars per share) (54.02)  
Forfeited (in dollars per share) (49.55)  
Outstanding at end of period, nonvested (in dollars per share) $ 53.23  
Restricted Stock Units    
Fair value    
Fair value of awards vested $ 24 $ 19
Cash paid $ 17 $ 13
v3.22.1
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
v3.22.1
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
v3.22.1
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  
v3.22.1
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