TEXTRON INC, 10-K filed on 2/19/2021
Annual Report
v3.20.4
Cover - USD ($)
$ in Billions
12 Months Ended
Jan. 02, 2021
Feb. 06, 2021
Jul. 04, 2020
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Current Fiscal Year End Date --01-02    
Document Period End Date Jan. 02, 2021    
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 — par value $0.125    
Trading Symbol TXT    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
ICFR Auditor Attestation Flag true    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Public Float     $ 7.4
Entity Common Stock, Shares Outstanding   226,284,488  
Documents Incorporated by Reference Part III of this Report incorporates information from certain portions of the registrant’s Definitive Proxy Statement for its Annual Meeting of Shareholders to be held on April 28, 2021.    
Entity Central Index Key 0000217346    
Document Fiscal Year Focus 2020    
Document Fiscal Period Focus FY    
Amendment Flag false    
v3.20.4
Consolidated Statements of Operations - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Revenues      
Total revenues $ 11,651 $ 13,630 $ 13,972
Costs, expenses and other      
Cost of sales 10,094 11,406 11,594
Selling and administrative expense 1,045 1,152 1,275
Interest expense 166 171 166
Special charges 147 72 73
Non-service components of pension and postretirement income, net (83) (113) (76)
Gain on business disposition 0 0 (444)
Total costs, expenses and other 11,369 12,688 12,588
Income before income taxes 282 942 1,384
Income tax expense (benefit) (27) 127 162
Net income $ 309 $ 815 $ 1,222
Earnings Per Share [Abstract]      
Basic (in dollars per share) $ 1.35 $ 3.52 $ 4.88
Diluted (in dollars per share) $ 1.35 $ 3.50 $ 4.83
Manufacturing revenues      
Revenues      
Total revenues $ 11,596 $ 13,564 $ 13,906
Finance revenues      
Revenues      
Total revenues $ 55 $ 66 $ 66
v3.20.4
Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Statement of Comprehensive Income [Abstract]      
Net income $ 309 $ 815 $ 1,222
Other comprehensive income (loss), net of tax      
Pension and postretirement benefits adjustments, net of reclassifications 31 (84) (74)
Foreign currency translation adjustments, net of reclassifications 78 (4) (43)
Deferred gains (losses) on hedge contracts, net of reclassifications (1) 3 (13)
Total other comprehensive income (loss), net of tax 108 (85) (130)
Comprehensive income $ 417 $ 730 $ 1,092
v3.20.4
Consolidated Balance Sheets - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Assets    
Inventories $ 3,513 $ 4,069
Property, plant and equipment, net 2,516 2,527
Total finance receivables, net 744 682
Assets 15,443 15,018
Liabilities    
Total liabilities 9,598 9,500
Shareholders' equity    
Common stock (231.0 million and 228.4 million shares issued, respectively, and 226.4 million and 228.0 million shares outstanding, respectively) 29 29
Capital surplus 1,785 1,674
Treasury stock (203) (20)
Retained earnings 5,973 5,682
Accumulated other comprehensive loss (1,739) (1,847)
Total shareholders’ equity 5,845 5,518
Total liabilities and shareholders’ equity 15,443 15,018
Manufacturing group    
Assets    
Cash and equivalents 2,146 1,181
Accounts receivable, net 787 921
Inventories 3,513 4,069
Other current assets 950 894
Total current assets 7,396 7,065
Property, plant and equipment, net 2,516 2,527
Goodwill 2,157 2,150
Other assets 2,436 2,312
Assets 14,505 14,054
Liabilities    
Current portion of long-term debt 509 561
Accounts payable 776 1,378
Other current liabilities 1,985 1,907
Total current liabilities 3,270 3,846
Other liabilities 2,357 2,288
Long-term debt 3,707 3,124
Long-term debt 3,198 2,563
Total liabilities 8,825 8,697
Finance group    
Assets    
Cash and equivalents 108 176
Total finance receivables, net 744 682
Other assets 86 106
Assets 938 964
Liabilities    
Other liabilities 111 117
Long-term debt 662 686
Total liabilities $ 773 $ 803
v3.20.4
Consolidated Balance Sheets (Parenthetical) - shares
shares in Thousands
Jan. 02, 2021
Jan. 04, 2020
Statement of Financial Position [Abstract]    
Common stock, issued (in shares) 231,000 228,400
Common stock, outstanding (in shares) 226,444 227,956
v3.20.4
Consolidated Statements of Shareholders' Equity - USD ($)
$ in Millions
Total
Cumulative Effect, Period of Adoption, Adjustment
Common Stock
Capital Surplus
Treasury Stock
Retained Earnings
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
Cumulative Effect, Period of Adoption, Adjustment
Beginning Balance at Dec. 30, 2017 $ 5,647   $ 33 $ 1,669 $ (48) $ 5,368   $ (1,375)  
Beginning Balance (ASC 606) at Dec. 30, 2017   $ 90         $ 90    
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Net income 1,222         1,222      
Other comprehensive income (loss) (130)             (130)  
Reclassification of stranded tax effects 0                
Reclassification of stranded tax effects | Reclassification of stranded tax effects             $ 257   $ (257)
Dividends declared (20)         (20)      
Share-based compensation activity 166     166          
Purchases of common stock (1,783)       (1,783)        
Retirement of treasury stock 0   (3) (189) 1,702 (1,510)      
Ending Balance at Dec. 29, 2018 5,192   30 1,646 (129) 5,407   (1,762)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Net income 815         815      
Other comprehensive income (loss) (85)             (85)  
Dividends declared (18)         (18)      
Share-based compensation activity 117     117          
Purchases of common stock (503)       (503)        
Retirement of treasury stock 0   (1) (89) 612 (522)      
Ending Balance at Jan. 04, 2020 5,518   29 1,674 (20) 5,682   (1,847)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Net income 309         309      
Other comprehensive income (loss) 108             108  
Dividends declared (18)         (18)      
Share-based compensation activity 111     111          
Purchases of common stock (183)       (183)        
Ending Balance at Jan. 02, 2021 $ 5,845   $ 29 $ 1,785 $ (203) $ 5,973   $ (1,739)  
v3.20.4
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Statement of Stockholders' Equity [Abstract]      
Dividends (in dollars per share) $ 0.08 $ 0.08 $ 0.08
v3.20.4
Consolidated Statements of Cash Flows - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Cash flows from operating activities      
Net income $ 309 $ 815 $ 1,222
Non-cash items:      
Depreciation and amortization 391 416 437
Deferred income taxes (7) 89 49
Asset impairments and TRU inventory charge 116 15 48
Gain on business disposition 0 0 (444)
Other, net 79 79 102
Changes in assets and liabilities:      
Accounts receivable, net 149 99 50
Inventories 434 (292) 41
Other assets 66 (37) (88)
Accounts payable (613) 280 (63)
Other liabilities (5) (348) (223)
Income taxes, net (62) (83) (33)
Pension, net (15) (62) (14)
Captive finance receivables, net (89) 45 22
Other operating activities, net 16 0 3
Net cash provided by operating activities of continuing operations 769 1,016 1,109
Net cash used in operating activities of discontinued operations (1) (2) (2)
Net cash provided by operating activities 768 1,014 1,107
Cash flows from investing activities      
Capital expenditures (317) (339) (369)
Proceeds from an insurance recovery and sale of property, plant and equipment 33 9 14
Net proceeds from corporate-owned life insurance policies 22 2 110
Net proceeds from business disposition 0 0 807
Net cash used in acquisitions (15) (2) (23)
Finance receivables repaid 22 48 27
Other investing activities, net 7 16 54
Net cash provided by (used in) investing activities (248) (266) 620
Cash flows from financing activities      
Net proceeds from long-term debt 1,137 301 0
Proceeds from borrowings against corporate-owned life insurance policies 377 0 0
Payments on borrowings against corporate-owned life insurance policies (377) 0 0
Principal payments on long-term debt and nonrecourse debt (593) (303) (131)
Purchases of Textron common stock (183) (503) (1,783)
Proceeds from exercise of stock options 22 24 74
Dividends paid (18) (18) (20)
Other financing activities, net (5) (3) (4)
Net cash provided by (used in) financing activities 360 (502) (1,864)
Effect of exchange rate changes on cash and equivalents 17 4 (18)
Net increase (decrease) in cash and equivalents 897 250 (155)
Cash and equivalents at beginning of year 1,357 1,107 1,262
Cash and equivalents at end of year 2,254 1,357 1,107
Manufacturing group      
Cash flows from operating activities      
Net income 301 793 1,198
Non-cash items:      
Depreciation and amortization 386 410 429
Deferred income taxes (2) 91 54
Asset impairments and TRU inventory charge 116 15 48
Gain on business disposition 0 0 (444)
Other, net 69 79 97
Changes in assets and liabilities:      
Accounts receivable, net 149 99 50
Inventories 434 (319) 45
Other assets 68 (34) (87)
Accounts payable (613) 280 (63)
Other liabilities (15) (352) (219)
Income taxes, net (61) (90) (20)
Pension, net (15) (62) (14)
Dividends received from Finance group 0 50 50
Other operating activities, net 16 0 3
Net cash provided by operating activities of continuing operations 833 960 1,127
Net cash used in operating activities of discontinued operations (1) (2) (2)
Net cash provided by operating activities 832 958 1,125
Cash flows from investing activities      
Capital expenditures (317) (339) (369)
Net proceeds from corporate-owned life insurance policies 22 2 110
Net proceeds from business disposition 0 0 807
Net cash used in acquisitions (15) (2) (23)
Finance receivables repaid 0 0 0
Finance receivables originated 0 0 0
Other investing activities, net 0 1 0
Net cash provided by (used in) investing activities (277) (329) 539
Cash flows from financing activities      
Net proceeds from long-term debt 1,137 301 0
Proceeds from borrowings against corporate-owned life insurance policies 377 0 0
Payments on borrowings against corporate-owned life insurance policies (377) 0 0
Principal payments on long-term debt and nonrecourse debt (548) (252) (5)
Purchases of Textron common stock (183) (503) (1,783)
Proceeds from exercise of stock options 22 24 74
Dividends paid (18) (18) (20)
Other financing activities, net (17) 9 (4)
Net cash provided by (used in) financing activities 393 (439) (1,738)
Effect of exchange rate changes on cash and equivalents 17 4 (18)
Net increase (decrease) in cash and equivalents 965 194 (92)
Cash and equivalents at beginning of year 1,181 987 1,079
Cash and equivalents at end of year 2,146 1,181 987
Finance group      
Cash flows from operating activities      
Net income 8 22 24
Non-cash items:      
Depreciation and amortization 5 6 8
Deferred income taxes (5) (2) (5)
Asset impairments and TRU inventory charge 0 0 0
Gain on business disposition 0 0 0
Other, net 10 0 5
Changes in assets and liabilities:      
Accounts receivable, net 0 0 0
Inventories 0 0 0
Other assets (2) (3) (1)
Accounts payable 0 0 0
Other liabilities (2) 4 (4)
Income taxes, net (1) 7 (13)
Pension, net 0 0 0
Dividends received from Finance group 0 0 0
Other operating activities, net 0 0 0
Net cash provided by operating activities of continuing operations 13 34 14
Net cash used in operating activities of discontinued operations 0 0 0
Net cash provided by operating activities 13 34 14
Cash flows from investing activities      
Capital expenditures 0 0 0
Proceeds from an insurance recovery and sale of property, plant and equipment 0 0 0
Net proceeds from corporate-owned life insurance policies 0 0 0
Net proceeds from business disposition 0 0 0
Net cash used in acquisitions 0 0 0
Finance receivables repaid 128 277 226
Finance receivables originated (195) (184) (177)
Other investing activities, net 19 42 50
Net cash provided by (used in) investing activities (48) 135 99
Cash flows from financing activities      
Net proceeds from long-term debt 0 0 0
Proceeds from borrowings against corporate-owned life insurance policies 0 0 0
Payments on borrowings against corporate-owned life insurance policies 0 0 0
Principal payments on long-term debt and nonrecourse debt (45) (51) (126)
Purchases of Textron common stock 0 0 0
Proceeds from exercise of stock options 0 0 0
Dividends paid 0 (50) (50)
Other financing activities, net 12 (12) 0
Net cash provided by (used in) financing activities (33) (113) (176)
Effect of exchange rate changes on cash and equivalents 0 0 0
Net increase (decrease) in cash and equivalents (68) 56 (63)
Cash and equivalents at beginning of year 176 120 183
Cash and equivalents at end of year $ 108 $ 176 $ 120
v3.20.4
Summary of Significant Accounting Policies
12 Months Ended
Jan. 02, 2021
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Principles of Consolidation and Financial Statement Presentation
Our Consolidated Financial Statements include the accounts of Textron Inc. and its majority-owned subsidiaries. Our financings are conducted through two separate borrowing groups. The Manufacturing group consists of Textron Inc. 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 (TFC) 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.
Our Finance group provides financing primarily to purchasers of new and pre-owned Textron Aviation aircraft and Bell helicopters manufactured by our Manufacturing group, otherwise known as captive financing. In the Consolidated Statements of Cash Flows, cash received from customers is reflected as operating activities when received from third parties. However, in the cash flow information provided for the separate borrowing groups, cash flows related to captive financing activities are reflected based on the operations of each group. For example, when product is sold by our Manufacturing group to a customer and is financed by the Finance group, the origination of the finance receivable is recorded within investing activities as a cash outflow in the Finance group’s statement of cash flows. Meanwhile, in the Manufacturing group’s statement of cash flows, the cash received from the Finance group on the customer’s behalf is recorded within operating cash flows as a cash inflow. Although cash is transferred between the two borrowing groups, there is no cash transaction reported in the consolidated cash flows at the time of the original financing. These captive financing activities, along with all significant intercompany transactions, are reclassified or eliminated in consolidation.
At the beginning of 2020, we adopted Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses. This standard changed the prior incurred loss model to a forward-looking current expected credit loss model for most financial assets, such as trade and finance receivables, contract assets and other instruments. There was no significant impact on our Consolidated Financial Statements upon adoption of the standard.
Collaborative Arrangements
Our Bell segment has a strategic alliance agreement with The Boeing Company (Boeing) to provide engineering, development and test services related to the V-22 aircraft, as well as to produce the V-22 aircraft, under a number of separate contracts with the U.S. Government (V-22 Contracts). The alliance created by this agreement is not a legal entity and has no employees, no assets and no true operations. This agreement creates contractual rights and does not represent an entity in which we have an equity interest. We account for this alliance as a collaborative arrangement with Bell and Boeing reporting costs incurred and revenues generated from transactions with the U.S. Government in each company’s respective income statement. Neither Bell nor Boeing is considered to be the principal participant for the transactions recorded under this agreement. Profits on cost-plus contracts are allocated between Bell and Boeing on a 50%-50% basis. Negotiated profits on fixed-price contracts are also allocated 50%-50%; however, Bell and Boeing are each responsible for their own cost overruns and are entitled to retain any cost underruns. Based on the contractual arrangement established under the alliance, Bell accounts for its rights and obligations under the specific requirements of the V-22 Contracts allocated to Bell under the work breakdown structure. We account for all of our rights and obligations, including warranty, product and any contingent liabilities, under the specific requirements of the V-22 Contracts allocated to us under the agreement. Revenues and cost of sales reflect our performance under the V-22 Contracts with revenues recognized using the cost-to-cost method. We include all assets used in performance of the V-22 Contracts that we own and all liabilities arising from our obligations under the V-22 Contracts in our Consolidated Balance Sheets.
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.
Revenue Recognition
Revenue is recognized when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. Contracts are reviewed to determine whether there is one or
multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, the expected consideration, or the transaction price, is allocated to each performance obligation identified in the contract based on the relative standalone selling price of each performance obligation. Revenue is then recognized for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred. Contract consideration is not adjusted for the effects of a significant financing component when, at contract inception, the period between when control transfers and when the customer will pay for that good or service is one year or less.
Commercial Contracts
The majority of our contracts with commercial customers have a single performance obligation as there is only one good or service promised or the promise to transfer the goods or services is not distinct or separately identifiable from other promises in the contract. Revenue is primarily recognized at a point in time, which is generally when the customer obtains control of the asset upon delivery and customer acceptance.  Contract modifications that provide for additional distinct goods or services at the standalone selling price are treated as separate contracts.
For commercial aircraft, we contract with our customers to sell fully outfitted fixed-wing aircraft, which may include configuration options. The aircraft typically represents a single performance obligation and revenue is recognized upon customer acceptance and delivery. For commercial helicopters, our customers generally contract with us for fully functional basic configuration aircraft and control is transferred upon customer acceptance and delivery. At times, customers may separately contract with us for the installation of accessories and customization to the basic aircraft. If these contracts are entered into at or near the same time of the basic aircraft contract, we assess whether the contracts meet the criteria to be combined. For contracts that are combined, the basic aircraft and the accessories and customization, are typically considered to be distinct, and therefore, are separate performance obligations. For these contracts, revenue is recognized on the basic aircraft upon customer acceptance and transfer of title and risk of loss, and on the accessories and customization, upon delivery and customer acceptance. We utilize observable prices to determine the standalone selling prices when allocating the transaction price to these performance obligations.
The transaction price for our commercial contracts reflects our estimate of returns, rebates and discounts, which are based on historical, current and forecasted information. Amounts billed to customers for shipping and handling are included in the transaction price and generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer. Taxes collected from customers and remitted to government authorities are recorded on a net basis.
We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one year to five years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation.
U.S. Government Contracts
Our contracts with the U.S. Government generally include the design, development, manufacture or modification of aerospace and defense products as well as related parts and services. These contracts, which also include those under the U.S. Government-sponsored foreign military sales program, accounted for approximately 30% of total revenues in 2020.  The customer typically contracts with us to provide a significant service of integrating a complex set of tasks and components into a single project or capability, which often results in the delivery of multiple units. Accordingly, the entire contract is accounted for as one performance obligation. In certain circumstances, a contract may include both production and support services, such as logistics and parts plans, which are considered to be distinct in the context of the contract and represent separate performance obligations. When a contract is separated into more than one performance obligation, we generally utilize the expected cost plus a margin approach to determine the standalone selling prices when allocating the transaction price.
Our contracts are frequently modified for changes in contract specifications and requirements. Most of our contract modifications with the U.S. Government are for goods and services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as part of that existing contract. The effect of these contract modifications on our estimates is recognized using the cumulative catch-up method of accounting.
Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract. Selecting the method to measure progress towards completion requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts.  Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred.  
The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Certain of our long-term contracts contain incentive fees or other provisions that can either increase or decrease the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance, historical performance, and all other information that is reasonably available to us.
Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several years, and the estimation of these costs requires substantial judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change.  
Approximately 75% of our 2020 revenues with the U.S. Government were under fixed-price and fixed-price incentive contracts. Under the typical payment terms of these contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments of up to 90% of the contract price based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of up to 80% of costs incurred as the work progresses. Because the customer retains a small portion of the contract price until completion of the contract, these contracts generally result in revenue recognized in excess of billings, which we present as contract assets in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. The portion of the payments retained by the customer until final contract settlement is not considered a significant financing component because the intent is to protect the customer. For cost-type contracts, we are generally paid for our actual costs incurred within a short period of time.
Finance Revenues
Finance revenues primarily include interest on finance receivables, finance lease earnings and portfolio gains/losses. Portfolio gains/losses include impairment charges related to repossessed assets and properties and gains/losses on the sale or early termination of finance assets. We recognize interest using the interest method, which provides a constant rate of return over the terms of the receivables. Accrual of interest income is suspended if credit quality indicators suggest full collection of principal and interest is doubtful. In addition, we automatically suspend the accrual of interest income for accounts that are contractually delinquent by more than three months unless collection is not doubtful. Cash payments on nonaccrual accounts, including finance charges, generally are applied to reduce the net investment balance. Once we conclude that the collection of all principal and interest is no longer doubtful, we resume the accrual of interest and recognize previously suspended interest income at the time either a) the loan becomes contractually current through payment according to the original terms of the loan, or b) if the loan has been modified, following a period of performance under the terms of the modification.
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 2020, 2019 and 2018, our cumulative catch-up adjustments increased segment profit by $72 million, $91 million and $196 million, respectively, and net income by $55 million, $69 million and $149 million, respectively ($0.24, $0.30 and $0.59 per diluted share, respectively). In 2020, 2019 and 2018, we recognized revenue from performance obligations satisfied in prior periods of $77 million, $97 million and $190 million, which related to changes in profit booking rates that impacted revenue.
For 2020, 2019 and 2018, gross favorable adjustments totaled $148 million, $173 million and $249 million, respectively. The 2018 favorable adjustments included $145 million, largely related to overhead rate improvements and risk retirements associated with contracts in the Bell segment. In 2020, 2019 and 2018, gross unfavorable adjustments totaled $76 million, $82 million and $53 million, respectively.
Contract Assets and Liabilities
Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time and are included in Other current assets in the Consolidated Balance Sheet. Contract liabilities, which are primarily included in Other current liabilities, include deposits, largely from our commercial aviation customers, and billings in excess of revenue recognized.  
The incremental costs of obtaining a contract with a customer that is expected to be recovered is expensed as incurred when the period to be benefitted is one year or less.
Accounts Receivable, Net
Accounts receivable, net includes amounts billed to customers where the right to payment is unconditional. We maintain an allowance for credit losses for our commercial accounts receivable to provide for the estimated amount that will not be collected, even when the risk of loss is remote. The allowance is measured on a collective pool basis when similar risk characteristics exists and is established as a percentage of accounts receivable. We have identified pools with similar risk characteristics, based on customer and industry type and geographic location. The percentage is based on all available and relevant information including age of outstanding receivables and collateral value, if any, historical payment experience and loss history, current economic conditions, and, when reasonable and supportable factors exist, management’s expectation of future economic conditions. For amounts due from the U.S. Government, we have not established an allowance for credit losses as we have zero loss expectation based on a long history of no credit losses and the explicit guarantee of a sovereign entity.
Cash and Equivalents
Cash and equivalents consist of cash and short-term, highly liquid investments with original maturities of three months or less.
Inventories
Inventories are stated at the lower of cost or estimated net realizable value.  We value our inventories generally using the first-in, first-out (FIFO) method or the last-in, first-out (LIFO) method for certain qualifying inventories where LIFO provides a better matching of costs and revenues. We determine costs for our commercial helicopters on an average cost basis by model considering the expended and estimated costs for the current production release.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and are depreciated primarily using the straight-line method.  We capitalize expenditures for improvements that increase asset values and extend useful lives.  Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the carrying value of the asset exceeds the sum of the undiscounted expected future cash flows, the asset is written down to fair value.
Goodwill and Intangible Assets
Goodwill represents the excess of the consideration paid for the acquisition of a business over the fair values assigned to intangible and other net assets of the acquired business. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to an annual impairment test. We evaluate the recoverability of these assets in the fourth quarter of each year or more frequently if events or changes in circumstances, such as declines in sales, earnings or cash flows, or material adverse changes in the business climate, indicate a potential impairment.
For our goodwill impairment test, we calculate the fair value of each reporting unit using discounted cash flows.  A reporting unit represents the operating segment unless discrete financial information is prepared and reviewed by segment management for businesses one level below that operating segment, in which case such component is the reporting unit.  In certain instances, we have aggregated components of an operating segment into a single reporting unit based on similar economic characteristics. The discounted cash flows incorporate assumptions for revenue growth rates, operating margins and discount rates that represent our best estimates of current and forecasted market conditions, cost structure, anticipated net cost reductions, and the implied rate of return that we believe a market participant would require for an investment in a business having similar risks and characteristics to the reporting unit being assessed. The fair value of our indefinite-lived intangible assets is primarily determined using the relief of royalty method based on forecasted revenues and royalty rates. If the estimated fair value of the reporting unit or indefinite-lived intangible asset exceeds the carrying value, there is no impairment. Otherwise, an impairment loss is recognized for the amount by which the carrying value exceeds the estimated fair value.
Acquired intangible assets with finite lives are subject to amortization. These assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.  Amortization of these intangible assets is recognized over their estimated useful lives using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. Approximately 86% of our gross intangible assets are amortized based on the cash flow streams used to value the assets, with the remaining assets amortized using the straight-line method.
Finance Receivables
Finance receivables primarily include loans provided to purchasers of new and pre-owned Textron Aviation aircraft and Bell helicopters. Finance receivables are generally recorded at the amount of outstanding principal less allowance for losses.
We establish an allowance for credit losses to cover probable but specifically unknown losses existing in the portfolio. This allowance is established as a percentage of finance receivables categorized by pools with similar risk characteristics, such as collateral or customer type and geographic location. The percentage is based on a combination of factors, including historical loss experience, current delinquency and default trends, collateral values, current economic conditions, and, when reasonable and supportable factors exist, management’s expectation of future economic conditions.
For those finance receivables that do not have similar risk characteristics, including larger balance accounts specifically identified as impaired, a reserve is established based on comparing the expected future cash flows, discounted at the finance receivable's effective interest rate, or the fair value of the underlying collateral if the finance receivable is collateral dependent, to its carrying amount. The expected future cash flows consider collateral value; financial performance and liquidity of our borrower; existence and financial strength of guarantors; estimated recovery costs, including legal expenses; and costs associated with the repossession and eventual disposal of collateral. When there is a range of potential outcomes, we perform multiple discounted cash flow analyses and weight the potential outcomes based on their relative likelihood of occurrence. The evaluation of our portfolio is inherently subjective, as it requires estimates, including the amount and timing of future cash flows expected to be received on impaired finance receivables and the estimated fair value of the underlying collateral, which may differ from actual results. While our analysis is specific to each individual account, critical factors included in this analysis include industry valuation guides, age and physical condition of the collateral, payment history, and existence and financial strength of guarantors.
Finance receivables are charged off at the earlier of the date the collateral is repossessed or when management no longer deems the receivable collectible.  Repossessed assets are recorded at their fair value, less estimated cost to sell.
Pension and Postretirement Benefit Obligations
We maintain various pension and postretirement plans for our employees globally. Our pension plans include significant benefit obligations, which are calculated based on actuarial valuations. Key assumptions used in determining these obligations and related expenses include expected long-term rates of return on plan assets, discount rates and healthcare cost projections.  We evaluate and update these assumptions annually in consultation with third-party actuaries and investment advisors. We also make assumptions regarding employee demographic factors such as retirement patterns, mortality, turnover and rate of compensation increases.
For our year-end measurement, our defined benefit plan assets and obligations are measured as of the month-end date closest to our fiscal year-end. We recognize the overfunded or underfunded status of our pension and postretirement plans in the Consolidated Balance Sheets and recognize changes in the funded status of our defined benefit plans in comprehensive income (loss) in the year in which they occur. To the extent actuarial gains and losses exceed 10% of the higher of the market-related value of assets or the benefit obligation in a year, the excess is recognized as a component of accumulated other comprehensive income (loss) and is amortized into net periodic pension cost over the remaining service period of the active participants. For plans in which all or almost all of the plan’s participants are inactive, the amortization period is the remaining life expectancy of the inactive participants. This determination is made on a plan-by-plan basis.
Derivatives and Hedging Activities
We are exposed to market risk primarily from changes in currency exchange rates and interest rates.  We do not hold or issue derivative financial instruments for trading or speculative purposes.  To manage the volatility relating to our exposures, we net these exposures on a consolidated basis to take advantage of natural offsets.  For the residual portion, we enter into various derivative transactions pursuant to our policies in areas such as counterparty exposure and hedging practices.  Credit risk related to derivative financial instruments is considered minimal and is managed by requiring high credit standards for counterparties and through periodic settlements of positions.
All derivative instruments are reported at fair value in the Consolidated Balance Sheets.  Designation to support hedge accounting is performed on a specific exposure basis.  For financial instruments qualifying as cash flow hedges, we record changes in the fair value of derivatives (to the extent they are effective as hedges) in other comprehensive income (loss), net of deferred taxes. Changes in fair value of derivatives not qualifying as hedges are recorded in earnings.
Foreign currency denominated assets and liabilities are translated into U.S. dollars.  Adjustments from currency rate changes are recorded in the cumulative translation adjustment account in shareholders’ equity until the related foreign entity is sold or substantially liquidated.  
Leases
We identify leases by evaluating our contracts to determine if the contract conveys the right to use an identified asset for a stated period of time in exchange for consideration. Specifically, we consider whether we can control the underlying asset and have the right to obtain substantially all of the economic benefits or outputs from the asset.  For our contracts that contain both lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) and non-lease components (e.g., common-area maintenance costs, other goods/services), we allocate the consideration in the contract to each component based on its standalone price.  Leases with terms greater than 12 months are classified as either operating or finance leases at the commencement date.  For these leases, we capitalize the lesser of a) the present value of the minimum lease payments over the lease term, or b) the fair value of the asset, as a right-of-use asset with an offsetting lease liability. The discount rate used to calculate the present value of the minimum lease payments is typically our incremental borrowing rate, as the rate implicit in the lease is generally not known or determinable. The lease term includes any noncancelable period for which we have the right to use the asset and may include options to extend or terminate the lease when it is reasonably certain that we will exercise the option.  Operating leases are recognized as a single lease cost on a straight-line basis over the lease term, while finance lease cost is recognized separately as amortization and interest expense.  
Product Liabilities
We accrue for product liability claims and related defense costs when a loss is probable and reasonably estimable.  Our estimates are generally based on the specifics of each claim or incident and our best estimate of the probable loss using historical experience.
Environmental Liabilities and Asset Retirement Obligations
Liabilities for environmental matters are recorded on a site-by-site basis when it is probable that an obligation has been incurred and the cost can be reasonably estimated.  We estimate our accrued environmental liabilities using currently available facts, existing technology, and presently enacted laws and regulations, all of which are subject to a number of factors and uncertainties. Our environmental liabilities are not discounted and do not take into consideration possible future insurance proceeds or significant amounts from claims against other third parties.
We have incurred asset retirement obligations primarily related to costs to remove and dispose of underground storage tanks and asbestos materials used in insulation, adhesive fillers and floor tiles. Currently, there is no legal requirement to remove these items and there is no plan to remodel the related facilities or otherwise cause the impacted items to require disposal. Since these asset retirement obligations are not probable, there is no related liability recorded in the Consolidated Balance Sheets.
Warranty Liabilities
For our assurance-type warranty programs, we estimate the costs that may be incurred and record a liability in the amount of such costs at the time product revenues are recognized.  Factors that affect this liability include the number of products sold, historical costs per claim, length of warranty period, contractual recoveries from vendors and historical and anticipated rates of warranty claims, including production and warranty patterns for new models.  We assess the adequacy of our recorded warranty liability periodically and adjust the amounts as necessary.  Additionally, we may establish a warranty liability related to the issuance of aircraft service bulletins for aircraft no longer covered under the limited warranty programs.
Research and Development Costs
Our customer-funded research and development costs are charged directly to the related contracts, which primarily consist of U.S. Government contracts.  In accordance with government regulations, we recover a portion of company-funded research and development costs through overhead rate charges on our U.S. Government contracts.  Research and development costs that are not reimbursable under a contract with the U.S. Government or another customer are charged to expense as incurred.  Company-funded research and development costs were $549 million, $647 million and $643 million in 2020, 2019 and 2018, respectively, and are included in cost of sales.
Income Taxes
The provision for income tax expense is calculated on reported income before income taxes based on current tax law and includes, in the current period, the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Tax laws may require items to be included in the determination of taxable income at different times from when the items are reflected in the financial statements. Deferred tax balances reflect the effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and their tax bases, as well as from net operating losses and tax credit carryforwards, and are stated at enacted tax rates in effect for the year taxes are expected to be paid or recovered.
Deferred tax assets represent tax benefits for tax deductions or credits available in future years and require certain estimates and assumptions to determine whether it is more likely than not that all or a portion of the benefit will not be realized.  The recoverability of these future tax deductions and credits is determined by assessing the adequacy of future expected taxable income from all sources, including the future reversal of existing taxable temporary differences, taxable income in carryback
years, estimated future taxable income and available tax planning strategies. Should a change in facts or circumstances lead to a change in judgment about the ultimate recoverability of a deferred tax asset, we record or adjust the related valuation allowance in the period that the change in facts and circumstances occurs, along with a corresponding increase or decrease in income tax expense.  
We record tax benefits for uncertain tax positions based upon management’s evaluation of the information available at the reporting date.  To be recognized in the financial statements, the tax position must meet the more-likely-than-not threshold that the position will be sustained upon examination by the tax authority based on technical merits assuming the tax authority has full knowledge of all relevant information.  For positions meeting this recognition threshold, the benefit is measured as the largest amount of benefit that meets the more-likely-than-not threshold to be sustained. We periodically evaluate these tax positions based on the latest available information.  For tax positions that do not meet the threshold requirement, we recognize net tax-related interest and penalties for continuing operations in income tax expense.
v3.20.4
Business Dispositions
12 Months Ended
Jan. 02, 2021
Business Combinations [Abstract]  
Business Dispositions Business Dispositions
On November 25, 2020, we reached a definitive agreement to sell TRU Simulation + Training Canada Inc. within our Textron Systems segment. At January 2, 2021, the assets and liabilities of this business met the criteria to be classified as held for sale and are recorded at the lower of the carrying value or fair value, less cost to sell. The net carrying amounts classified as held for sale in the Consolidated Balance Sheet included $78 million of assets, primarily inventories, recorded in Other current assets and $77 million of liabilities, primarily contract liabilities, recorded in Other current liabilities. The transaction closed on January 25, 2021, and we expect to record an after-tax gain of approximately $10 million in the first quarter of 2021.
On July 2, 2018, we completed the sale of the businesses that manufacture and sell the products in our Tools and Test Equipment product line within our Industrial segment for net cash proceeds of $807 million. We recorded an after-tax gain of $419 million related to this disposition.
v3.20.4
Goodwill and Intangible Assets
12 Months Ended
Jan. 02, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill by segment are as follows:
(In millions)Textron
Aviation
BellTextron
Systems
IndustrialTotal
Balance at December 29, 2018$614 $31 $1,100 $473 $2,218 
Disposition (a)— — (71)— (71)
Acquisition— — — 
Foreign currency translation— — — (1)(1)
Balance at January 4, 2020614 31 1,033 472 2,150 
Acquisitions— — 
Reclassifications (b)12 — (24)— (12)
Foreign currency translation— — 10 11 
Balance at January 2, 2021$631 $35 $1,009 $482 $2,157 
(a)See Note 7 for additional information.
(b)Reclassifications include $12 million of goodwill classified as held for sale in connection with a business disposition described in Note 2 and amounts transferred between segments.
Intangible Assets
Our intangible assets are summarized below:
January 2, 2021January 4, 2020
(Dollars in millions)Weighted-Average
Amortization
Period (in years)
Gross
Carrying
Amount
Accumulated
Amortization
NetGross
Carrying
Amount
Accumulated
Amortization
Net
Patents and technology14$484 $(263)$221 $501 $(242)$259 
Trade names and trademarks14182 (8)174 223 (8)215 
Customer relationships and
contractual agreements
15412 (318)94 413 (298)115 
Other4(6)— (6)— 
Total$1,084 $(595)$489 $1,143 $(554)$589 
Trade names and trademarks in the table above include $169 million and $208 million of indefinite-lived intangible assets at January 2, 2021 and January 4, 2020, respectively. In 2020, we recognized $47 million of intangible asset impairment charges, primarily related to indefinite-lived assets as discussed in Note 17. Amortization expense totaled $54 million, $59 million and $66 million in 2020, 2019 and 2018, respectively. Amortization expense is estimated to be approximately $51 million, $51 million, $35 million, $32 million and $30 million in 2021, 2022, 2023, 2024 and 2025, respectively.
v3.20.4
Accounts Receivable and Finance Receivables
12 Months Ended
Jan. 02, 2021
Receivables [Abstract]  
Accounts Receivable and Financing Receivables Accounts Receivable and Finance Receivables
Accounts Receivable
Accounts receivable is composed of the following:
(In millions)January 2,
2021
January 4,
2020
Commercial$668 $835 
U.S. Government contracts155 115 
823 950 
Allowance for doubtful accounts(36)(29)
Total$787 $921 
Finance Receivables
Finance receivables are presented in the following table:
(In millions)January 2,
2021
January 4,
2020
Finance receivables$779 $707 
Allowance for losses(35)(25)
Total finance receivables, net$744 $682 
Finance receivables primarily includes loans provided to purchasers of new and pre-owned Textron Aviation aircraft and Bell helicopters. These loans typically have initial terms ranging from five to twelve years, amortization terms ranging from eight to fifteen years and an average balance of $1.6 million at January 2, 2021. Loans generally require the customer to pay a significant down payment, along with periodic scheduled principal payments that reduce the outstanding balance through the term of the loan.
Our finance receivables are diversified across geographic region and borrower industry. At both January 2, 2021 and January 4, 2020, 59% of our finance receivables were distributed internationally and 41% throughout the U.S. At January 2, 2021 and January 4, 2020, finance receivables of $125 million and $148 million, respectively, have been pledged as collateral for TFC’s debt of $68 million and $87 million, respectively.
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.
In March 2020, due to the economic impact of the COVID-19 pandemic and at the request of certain of our customers, we began working with them to provide temporary payment relief through loan modifications. The types of temporary payment relief we offered to these customers included delays in the timing of required principal payments, deferrals of interest payments and/or interest-only payments. For loan modifications that cover payment-relief periods in excess of six months, even if the loan was previously current, the loan is deemed a troubled debt restructuring and considered impaired. These impaired loans are classified as either nonaccrual or watchlist based on a review of the credit quality indicators as discussed above.
During 2020, we modified finance receivable contracts for 94 customers with an outstanding balance totaling $278 million at January 2, 2021. Of the modifications occurring during 2020, contracts for 32 customers, or $129 million of finance receivables, were categorized as troubled debt restructurings. Due to the nature of these restructurings, the financial effects were not significant. We had two customer defaults related to finance receivables previously modified as a troubled debt restructuring that had an insignificant outstanding balance. We believe our allowance for credit losses adequately covers our exposure on these loans as our estimated collateral values largely exceed the outstanding loan amounts.
Finance receivables categorized based on the credit quality indicators and by delinquency aging category are  summarized as follows:
(Dollars in millions)January 2,
2021
January 4,
2020
Performing$612 $664 
Watchlist74 
Nonaccrual93 39 
Nonaccrual as a percentage of finance receivables11.94%5.52%
Less than 31 days past due$738 $637 
31-60 days past due12 53 
61-90 days past due11 
Over 90 days past due18 10 
60+ days contractual delinquency as a percentage of finance receivables3.72%2.40%
At January 2, 2021, 48% of our performing finance receivables were originated since the beginning of 2019 and 26% were originated from 2016 to 2018. For finance receivables categorized as watchlist and nonaccrual, 9% and 25%, respectively, were originated since the beginning of 2019, and 47% and 36%, respectively, from 2016 to 2018. For accounts modified in 2020, the origination date prior to the modification was maintained based on the types of temporary payment relief provided.
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 impaired finance receivables, excluding leveraged leases, and the average recorded investment is provided below:
(In millions)January 2,
2021
January 4,
2020
Recorded investment:
Impaired loans with specific allowance for losses$46 $17 
Impaired loans with no specific allowance for losses117 22 
Total$163 $39 
Unpaid principal balance$175 $50 
Allowance for losses on impaired loans
Average recorded investment126 40 
A summary of the allowance for losses on finance receivables based on how the underlying finance receivables are evaluated for impairment, is provided below.  The finance receivables reported in this table exclude $95 million and $104 million of leveraged leases at January 2, 2021 and January 4, 2020, respectively, in accordance with U.S. generally accepted accounting principles.
(In millions)January 2,
2021
January 4,
2020
Allowance based on collective evaluation$28 $22 
Allowance based on individual evaluation
Finance receivables evaluated collectively521 564 
Finance receivables evaluated individually163 39 
v3.20.4
Inventories
12 Months Ended
Jan. 02, 2021
Inventory Disclosure [Abstract]  
Inventories Inventories
Inventories are composed of the following:
(In millions)January 2,
2021
January 4,
2020
Finished goods$1,228 $1,557 
Work in process1,455 1,616 
Raw materials and components830 896 
Total$3,513 $4,069 
Inventories valued by the LIFO method totaled $2.2 billion and $2.5 billion at January 2, 2021 and January 4, 2020, respectively, and the carrying values of these inventories would have been higher by approximately $507 million and $475 million, respectively, had our LIFO inventories been valued at current costs.
v3.20.4
Property, Plant and Equipment, Net
12 Months Ended
Jan. 02, 2021
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment, Net Property, Plant and Equipment, Net
Our Manufacturing group’s property, plant and equipment, net is composed of the following:
(Dollars in millions)Useful Lives
(in years)
January 2,
2021
January 4,
2020
Land, buildings and improvements2-40$2,031 $1,991 
Machinery and equipment2-205,181 4,941 
7,212 6,932 
Accumulated depreciation and amortization(4,696)(4,405)
Total$2,516 $2,527 
The Manufacturing group’s depreciation expense, which included amortization expense on finance leases, totaled $325 million, $346 million and $358 million in 2020, 2019 and 2018, respectively.
v3.20.4
Other Assets
12 Months Ended
Jan. 02, 2021
Other Assets, Noncurrent Disclosure [Abstract]  
Other Assets Other AssetsOther assets includes the cash surrender value of corporate-owned life insurance policies, net of any borrowings against these policies. During the first quarter of 2020, we borrowed $377 million against the policies as we strengthened our cash position in light of disruptions caused by the COVID-19 pandemic. These borrowings were subsequently repaid and there were no outstanding borrowings against these policies at January 2, 2021. Proceeds from these borrowings and subsequent payments have been classified as financing activities in the consolidated statement of cash flows. Interest expense incurred on borrowings against corporate-owned life insurance policies is recorded as an offset with policy income.In 2019, TRU Simulation + Training Inc., a business within our Textron Systems segment, contributed assets associated with its training business into FlightSafety Textron Aviation Training LLC, a company formed by FlightSafety International Inc. and TRU to provide training solutions for Textron Aviation’s commercial business and general aviation aircraft. We have a 30% interest in this company and our investment is accounted for under the equity method of accounting. We contributed assets with a carrying value of $69 million to the company, which primarily included property, plant and equipment. In addition, $71 million of the Textron Systems segment’s goodwill was allocated to this transaction. Based on the fair value of our share of the business, we recorded a pre-tax net gain of $18 million in 2019 to cost of sales in our Consolidated Statements of Operations.
v3.20.4
Other Current Liabilities
12 Months Ended
Jan. 02, 2021
Other Liabilities Disclosure [Abstract]  
Other Current Liabilities Other Current Liabilities
The other current liabilities of our Manufacturing group are summarized below:
(In millions)January 2,
2021
January 4,
2020
Contract liabilities$758 $715 
Salaries, wages and employer taxes381 362 
Current portion of warranty and product maintenance liabilities133 147 
Other713 683 
Total$1,985 $1,907 
Changes in our warranty liability are as follows:
(In millions)202020192018
Balance at beginning of year$141 $149 $164 
Provision54 68 72 
Settlements(64)(70)(78)
Adjustments*(12)(6)(9)
Balance at end of year$119 $141 $149 
* Adjustments include changes to prior year estimates, new issues on prior year sales, reclassifications to held for sale, business acquisitions/dispositions and currency translation adjustments.
v3.20.4
Leases
12 Months Ended
Jan. 02, 2021
Leases [Abstract]  
Leases Leases
We primarily lease certain manufacturing plants, offices, warehouses, training and service centers at various locations worldwide that are classified as either operating or finance leases. Our leases have remaining lease terms up to 28 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 $61 million and $64 million, in 2020 and 2019, respectively. Finance lease cost and variable and short-term lease costs were not significant. In 2020 and 2019, cash paid for operating lease liabilities totaled $60 million and $62 million, respectively, which is classified as cash flows from operating activities. Noncash transactions totaled $119 million in 2020 and $25 million in 2019, reflecting the recognition of operating lease assets and liabilities for new or extended leases. Balance sheet and other information related to our leases is as follows:
(Dollars in millions)January 2,
2021
January 4,
2020
Operating leases:
Other assets$349 $277 
Other current liabilities47 48 
Other liabilities306 233 
Finance leases:
Property, plant and equipment, net$35 $39 
Current portion of long-term debt
Long-term debt38 40 
Weighted-average remaining lease term (in years)
Operating leases11.610.2
Finance leases16.817.9
Weighted-average discount rate
Operating leases4.17%4.42%
Finance leases4.35%4.37%
Maturities of our lease liabilities at January 2, 2021 are as follows:
(In millions)Operating
Leases
Finance
Leases
2021$59 $
202253 
202344 
202435 
202533 
Thereafter232 42 
Total lease payments456 63 
Less: interest(103)(23)
Total lease liabilities$353 $40 
Leases Leases
We primarily lease certain manufacturing plants, offices, warehouses, training and service centers at various locations worldwide that are classified as either operating or finance leases. Our leases have remaining lease terms up to 28 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 $61 million and $64 million, in 2020 and 2019, respectively. Finance lease cost and variable and short-term lease costs were not significant. In 2020 and 2019, cash paid for operating lease liabilities totaled $60 million and $62 million, respectively, which is classified as cash flows from operating activities. Noncash transactions totaled $119 million in 2020 and $25 million in 2019, reflecting the recognition of operating lease assets and liabilities for new or extended leases. Balance sheet and other information related to our leases is as follows:
(Dollars in millions)January 2,
2021
January 4,
2020
Operating leases:
Other assets$349 $277 
Other current liabilities47 48 
Other liabilities306 233 
Finance leases:
Property, plant and equipment, net$35 $39 
Current portion of long-term debt
Long-term debt38 40 
Weighted-average remaining lease term (in years)
Operating leases11.610.2
Finance leases16.817.9
Weighted-average discount rate
Operating leases4.17%4.42%
Finance leases4.35%4.37%
Maturities of our lease liabilities at January 2, 2021 are as follows:
(In millions)Operating
Leases
Finance
Leases
2021$59 $
202253 
202344 
202435 
202533 
Thereafter232 42 
Total lease payments456 63 
Less: interest(103)(23)
Total lease liabilities$353 $40 
v3.20.4
Debt and Credit Facilities
12 Months Ended
Jan. 02, 2021
Debt Disclosure [Abstract]  
Debt and Credit Facilities Debt and Credit Facilities
Our debt is summarized in the table below:
(In millions)January 2,
2021
January 4,
2020
Manufacturing group
6.625% due 2020
$— $199 
Variable-rate notes due 2020 (2.45%)
— 350 
3.65% due 2021
250 250 
5.95% due 2021
250 250 
4.30% due 2024
350 350 
3.875% due 2025
350 350 
4.00% due 2026
350 350 
3.65% due 2027
350 350 
3.375% due 2028
300 300 
3.90% due 2029
300 300 
3.00% due 2030
650 — 
2.45% due 2031
500 — 
Other (weighted-average rate of 2.60% and 3.01%, respectively)
57 75 
Total Manufacturing group debt$3,707 $3,124 
Less: Current portion of long-term debt(509)(561)
Total Long-term debt$3,198 $2,563 
Finance group
Variable-rate note due 2022 (1.70% and 2.87%, respectively)
$150 $150 
2.88% note due 2022
150 150 
Fixed-rate notes due 2020-2028 (weighted-average rate of 3.25% and 3.20%, respectively)*
51 65 
Variable-rate notes due 2020-2027 (weighted-average rate of 1.73% and  3.31%, respectively)*
17 22 
Fixed-to-Floating Rate Junior Subordinated Notes (1.96% and 3.64%, respectively)
294 299 
Total Finance group debt$662 $686 
* Notes amortize on a monthly basis and are secured by finance receivables as described in Note 4.
The following table shows required payments during the next five years on debt outstanding at January 2, 2021:
(In millions)20212022202320242025
Manufacturing group$509 $$$361 $357 
Finance group13 316 16 15 
Total$522 $324 $24 $376 $362 
Textron has a senior unsecured revolving credit facility for an aggregate principal amount of $1.0 billion, of which up to $100 million is available for the issuance of letters of credit. We may elect to increase the aggregate amount of commitments under the facility to up to $1.3 billion by designating an additional lender or by an existing lender agreeing to increase its commitment. The facility expires in October 2024, subject to up to two one-year extensions at our option with the consent of lenders representing a
majority of the commitments under the facility. At January 2, 2021 and January 4, 2020, there were no amounts borrowed against the facility and there were $9 million and $10 million, respectively, of outstanding letters of credit issued under the facility.
Fixed-to-Floating Rate Junior Subordinated Notes
The Finance group’s $294 million of Fixed-to-Floating Rate Junior Subordinated Notes are unsecured and rank junior to all of its existing and future senior debt. The notes mature on February 15, 2067; however, we have the right to redeem the notes at par at any time and we are obligated to redeem the notes beginning on February 15, 2042.  During 2020, TFC repurchased $5 million of these notes. Interest on the notes was fixed at 6% through February 15, 2017 and is now variable at the three-month London Interbank Offered Rate + 1.735%.
Support Agreement
Under a Support Agreement between Textron and TFC, Textron is required to maintain a controlling interest in TFC. The agreement, as amended in December 2015, also requires Textron to ensure that TFC maintains fixed charge coverage of no less than 125% and consolidated shareholders' equity of no less than $125 million. There were no cash contributions required to be paid to TFC in 2020, 2019 and 2018 to maintain compliance with the support agreement.
v3.20.4
Derivative Instruments and Fair Value Measurements
12 Months Ended
Jan. 02, 2021
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 January 2, 2021 and January 4, 2020, we had foreign currency exchange contracts with notional amounts upon which the contracts were based of $318 million and $342 million, respectively. At January 2, 2021, the fair value amounts of our foreign currency exchange contracts were a $5 million asset and a $2 million liability.  At January 4, 2020, the fair value amounts of our foreign currency exchange contracts were a $2 million asset and a $2 million liability.
Our Finance group enters into interest rate swap agreements to mitigate exposure 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 January 2, 2021, we had one swap agreement that matures in February 2022 for a notional amount of $294 million with a fair value of a $4 million liability.
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:
January 2, 2021January 4, 2020
(In millions)Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Manufacturing group
Debt, excluding leases$(3,690)$(3,986)$(3,097)$(3,249)
Finance group
Finance receivables, excluding leases549 599 493 527 
Debt(662)(587)(686)(634)
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.
v3.20.4
Shareholders' Equity
12 Months Ended
Jan. 02, 2021
Equity [Abstract]  
Shareholders' Equity Shareholders’ Equity
Capital Stock
We have authorization for 15 million shares of preferred stock with a par value of $0.01 and 500 million shares of common stock with a par value of $0.125.  Outstanding common stock activity is presented below:
(In thousands)202020192018
Balance at beginning of year227,956 235,621 261,471 
Share repurchases(4,145)(10,011)(29,094)
Share-based compensation activity2,633 2,346 3,244 
Balance at end of year226,444 227,956 235,621 
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:
(In thousands)202020192018
Basic weighted-average shares outstanding228,536 231,315 250,196 
Dilutive effect of stock options443 1,394 3,041 
Diluted weighted-average shares outstanding228,979 232,709 253,237 
In 2020, 2019 and 2018, stock options to purchase 7.6 million, 4.3 million and 1.3 million shares, respectively, of common stock are excluded from the calculation of diluted weighted-average shares outstanding as their effect would have been anti-dilutive.
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 December 29, 2018$(1,727)$(32)$(3)$(1,762)
Other comprehensive loss before reclassifications(166)(4)(165)
Reclassified from Accumulated other comprehensive loss82 — (2)80 
Balance at January 4, 2020$(1,811)$(36)$— $(1,847)
Other comprehensive loss before reclassifications(115)78 (34)
Reclassified from Accumulated other comprehensive loss146 — (4)142 
Balance at January 2, 2021$(1,780)$42 $(1)$(1,739)
Other comprehensive income (loss)
The before and after-tax components of other comprehensive income (loss) are presented below:
202020192018
(In millions)Pre-Tax
Amount
Tax
(Expense)
Benefit
After-
Tax
Amount
Pre-Tax
Amount
Tax
(Expense)
Benefit
After-
Tax
Amount
Pre-Tax
Amount
Tax
(Expense)
Benefit
After-
Tax
Amount
Pension and postretirement benefits
adjustments:
Unrealized losses$(144)$35 $(109)$(218)$52 $(166)$(248)$58 $(190)
Amortization of net actuarial loss*184 (43)141 99 (23)76 152 (35)117 
Amortization of prior service cost*(1)(2)(2)
Recognition of prior service cost(8)(6)— — — (20)(15)
Business disposition— — — — — — — 
Pension and postretirement benefits
adjustments, net
38 (7)31 (111)27 (84)(100)26 (74)
Foreign currency translation adjustments:
Foreign currency translation adjustments81 (3)78 (6)(4)(46)(3)(49)
Business disposition— — — — — — — 
Foreign currency translation adjustments, net81 (3)78 (6)(4)(40)(3)(43)
Deferred gains (losses) on hedge contracts:
Current deferrals(1)(3)(8)— (8)
Reclassification adjustments(6)(4)(2)— (2)(7)(5)
Deferred gains (losses) on hedge
contracts, net
(2)(1)(3)(15)(13)
Total$117 $(9)$108 $(111)$26 $(85)$(155)$25 $(130)
* These components of other comprehensive income (loss) are included in the computation of net periodic pension cost. See Note 16 for additional information.
v3.20.4
Segment and Geographic Data
12 Months Ended
Jan. 02, 2021
Segment Reporting [Abstract]  
Segment and Geographic Data Segment and Geographic Data
We operate in, and report financial information for, the following five business segments: Textron Aviation, Bell, Textron Systems, Industrial and Finance. The accounting policies of the segments are the same as those described in Note 1.
Textron Aviation products include Citation jets, King Air and Caravan turboprop aircraft, military trainer and defense aircraft, piston engine aircraft, and aftermarket part sales and services sold to a diverse base of corporate and individual buyers, and U.S. and non-U.S. governments.
Bell products include military and commercial helicopters, tiltrotor aircraft and related spare parts and services.  Bell supplies military helicopters and, in association with The Boeing Company, military tiltrotor aircraft, and aftermarket services to the U.S. and non-U.S. governments. Bell also supplies commercial helicopters and aftermarket services to corporate, private, law enforcement, utility and emergency medical helicopter operators, and foreign governments.
Textron Systems products include unmanned aircraft and surface systems, marine craft, armored vehicles and specialty vehicles, and other defense and aviation mission support products and services primarily for U.S. and non-U.S. governments.
Industrial products and markets include the following:
Fuel Systems and Functional Components products consist of blow-molded plastic fuel systems, including conventional plastic fuel tanks and pressurized fuel tanks for hybrid applications, clear-vision systems and plastic tanks for selective catalytic reduction systems that are marketed primarily to automobile OEMs; and
Specialized Vehicles products include golf cars, off-road utility vehicles, recreational side-by-side and all-terrain vehicles, snowmobiles, light transportation vehicles, aviation ground support equipment, professional turf-maintenance equipment and turf-care vehicles that are marketed primarily to golf courses and resorts, government agencies and municipalities, consumers, outdoor enthusiasts, and commercial and industrial users.
The Finance segment provides financing primarily to purchasers of new and pre-owned Textron Aviation aircraft and Bell helicopters.
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, special charges and an inventory charge related to the 2020 COVID-19 restructuring plan, as discussed in Note 17. 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 as follows:
RevenuesSegment Profit
(In millions)202020192018202020192018
Textron Aviation$3,974 $5,187 $4,971 $16 $449 $445 
Bell3,309 3,254 3,180 462 435 425 
Textron Systems1,313 1,325 1,464 152 141 156 
Industrial3,000 3,798 4,291 111 217 218 
Finance55 66 66 10 28 23 
Total$11,651 $13,630 $13,972 $751 $1,270 $1,267 
Corporate expenses and other, net(122)(110)(119)
Interest expense, net for Manufacturing group(145)(146)(135)
Special charges*(147)(72)(73)
Inventory charge*(55)— — 
Gain on business disposition— — 444 
Income before income taxes$282 $942 $1,384 
* See Note 17 for additional information.
Other information by segment is provided below:
AssetsCapital ExpendituresDepreciation and Amortization
(In millions)January 2,
2021
January 4,
2020
202020192018202020192018
Textron Aviation$4,380 $4,692 $94 $122 $132 $138 $137 $145 
Bell2,984 2,783 117 81 65 91 107 108 
Textron Systems2,054 2,352 42 38 39 43 48 54 
Industrial2,500 2,781 62 97 132 102 108 112 
Finance938 964 — — — 
Corporate2,587 1,446 12 10 10 
Total$15,443 $15,018 $317 $339 $369 $391 $416 $437 
Geographic Data
Presented below is selected financial information by geographic area:
Revenues*Property, Plant
and Equipment, net**
(In millions)202020192018January 2,
2021
January 4,
2020
United States$7,943 $8,963 $8,667 $2,068 $2,054 
Europe1,336 1,986 2,187 237 244 
Asia and Australia1,106 1,070 1,253 95 97 
Other international1,266 1,611 1,865 116 132 
Total$11,651 $13,630 $13,972 $2,516 $2,527 
* Revenues are attributed to countries based on the location of the customer.
** Property, plant and equipment, net is based on the location of the asset.
v3.20.4
Revenues
12 Months Ended
Jan. 02, 2021
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
Disaggregation of Revenues
Our revenues disaggregated by major product type are presented below:
(In millions)202020192018
Aircraft$2,714 $3,592 $3,435 
Aftermarket parts and services1,260 1,595 1,536 
Textron Aviation3,974 5,187 4,971 
Military aircraft and support programs2,213 1,988 2,030 
Commercial helicopters, parts and services1,096 1,266 1,150 
Bell3,309 3,254 3,180 
Unmanned systems621 572 612 
Marine and land systems179 208 311 
Simulation, training and other513 545 541 
Textron Systems1,313 1,325 1,464 
Fuel systems and functional components1,751 2,237 2,352 
Specialized vehicles1,249 1,561 1,691 
Tools and test equipment— — 248 
Industrial3,000 3,798 4,291 
Finance55 66 66 
Total revenues$11,651 $13,630 $13,972 
Our revenues for our segments by customer type and geographic location are presented below:
(In millions)Textron
Aviation
BellTextron
Systems
IndustrialFinanceTotal
2020
Customer type:
Commercial$3,826 $1,079 $249 $2,993 $55 $8,202 
U.S. Government148 2,230 1,064 — 3,449 
Total revenues$3,974 $3,309 $1,313 $3,000 $55 $11,651 
Geographic location:
United States$2,825 $2,564 $1,129 $1,398 $27 $7,943 
Europe356 148 44 786 1,336 
Asia and Australia379 330 67 328 1,106 
Other international414 267 73 488 24 1,266 
Total revenues$3,974 $3,309 $1,313 $3,000 $55 $11,651 
2019
Customer type:
Commercial$4,956 $1,238 $359 $3,775 $66 $10,394 
U.S. Government231 2,016 966 23 — 3,236 
Total revenues$5,187 $3,254 $1,325 $3,798 $66 $13,630 
Geographic location:
United States$3,708 $2,440 $1,083 $1,698 $34 $8,963 
Europe678 142 73 1,091 1,986 
Asia and Australia244 348 103 374 1,070 
Other international557 324 66 635 29 1,611 
Total revenues$5,187 $3,254 $1,325 $3,798 $66 $13,630 
2018
Customer type:
Commercial$4,734 $1,114 $431 $4,277 $66 $10,622 
U.S. Government237 2,066 1,033 14 — 3,350 
Total revenues$4,971 $3,180 $1,464 $4,291 $66 $13,972 
Geographic location:
United States$3,379 $2,186 $1,118 $1,957 $27 $8,667 
Europe612 162 74 1,333 2,187 
Asia and Australia336 427 127 357 1,253 
Other international644 405 145 644 27 1,865 
Total revenues$4,971 $3,180 $1,464 $4,291 $66 $13,972 
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 revenue 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 January 2, 2021, we had $9.5 billion in remaining performance obligations of which we expect to recognize revenues of approximately 76% through 2022, an additional 20% through 2024, 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 January 2, 2021 and January 4, 2020, contract assets totaled $561 million and $567 million, respectively, and contract liabilities totaled $842 million and $830 million, respectively, reflecting timing differences between revenues recognized, billings and payments from customers. During 2020, 2019 and 2018, we recognized revenues of $506 million, $590 million and $817 million, respectively, that were included in the contract liability balance at the beginning of each year.
v3.20.4
Share-Based Compensation
12 Months Ended
Jan. 02, 2021
Share-based Payment Arrangement [Abstract]  
Share-Based Compensation Share-Based Compensation
Under our 2015 Long-Term Incentive Plan (Plan), which replaced our 2007 Long-Term Incentive Plan in April 2015, 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.  A maximum of 17 million shares is authorized for issuance for all purposes under the Plan plus any shares that become available upon cancellation, forfeiture or expiration of awards granted under the 2007 Long-Term Incentive Plan. No more than 17 million shares may be awarded pursuant to incentive stock options, and no more than 4.25 million shares may be issued pursuant to awards of restricted stock, restricted stock units, performance stock or other awards that are payable in shares. For 2020, 2019 and 2018, the awards granted under this Plan primarily included stock options, restricted stock units and performance share units.
Through our Deferred Income Plan for Textron Executives, we provide certain executives the opportunity to voluntarily defer up to 80% of their base salary, along with incentive compensation.  Elective deferrals may be put into either a stock unit account or an interest-bearing account.  Participants cannot move amounts between the two accounts while actively employed by us and cannot receive distributions until termination of employment. The intrinsic value of amounts paid under this deferred income plan was not significant in 2020, 2019 and 2018.
Share-based compensation costs are reflected primarily in selling and administrative expense.  Compensation expense included in net income for our share-based compensation plans is as follows:
(In millions)202020192018
Compensation expense$57 $52 $35 
Income tax benefit(14)(12)(8)
Total compensation expense included in net income$43 $40 $27 
Compensation cost for awards subject only to service conditions that vest ratably is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. Our awards include continued vesting provisions for retirement eligible employees. Upon reaching retirement eligibility, the service requirement for these individuals is considered to have been satisfied and compensation expense for future awards is recognized on the date of the grant.
As of January 2, 2021, we had not recognized $30 million of total compensation costs associated with unvested awards subject only to service conditions. We expect to recognize compensation expense for these awards over a weighted-average period of approximately two years.
Stock Options
Stock option compensation expense was $20 million, $22 million and $23 million in 2020, 2019 and 2018, respectively. 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:
202020192018
Fair value of options at grant date$10.66$14.62$15.83
Dividend yield0.2%0.2%0.1%
Expected volatility29.3%26.6%26.6%
Risk-free interest rate1.1%2.5%2.6%
Expected term (in years)4.74.74.7
The stock option activity during 2020 is provided below:
(Options in thousands)Number of
Options
Weighted-
Average
Exercise Price
Outstanding at beginning of year8,744 $44.00 
Granted2,003 39.48 
Exercised(723)(29.71)
Forfeited or expired(214)(48.75)
Outstanding at end of year9,810 $44.03 
Exercisable at end of year6,484 $43.02 
At January 2, 2021, our outstanding options had an aggregate intrinsic value of $65 million and a weighted-average remaining contractual life of 5.8 years.  Our exercisable options had an aggregate intrinsic value of $48 million and a weighted-average remaining contractual life of 4.4 years at January 2, 2021.  The total intrinsic value of options exercised during 2020, 2019 and 2018 was $10 million, $22 million and $62 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 2020 activity for restricted stock units 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 beginning of year, nonvested543 $49.44 1,104 $49.61 
Granted179 37.93 360 40.57 
Vested(139)(42.34)(276)(42.34)
Forfeited— — (43)(49.29)
Outstanding at end of year, nonvested583 $47.60 1,145 $48.53 
The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows:
(In millions)202020192018
Fair value of awards vested$17 $23 $25 
Cash paid11 16 18 
Performance Share Units
The fair value of share-based compensation awards accounted for as liabilities includes performance share units, which are paid in cash in the first quarter of the year following vesting.  Beginning with grants made in 2020, performance share units are subject to performance goals set at the beginning of the three-year performance period. Performance share units granted prior to 2020 are subject to performance goals set for each year of the three-year performance period. Performance share units vest at the end of the three-year performance period. The fair value of these units is based on the trading price of our common stock and is remeasured at each reporting period date.
The 2020 activity for our performance share units is as follows:
(Units in thousands)Number of
Units
Weighted-
Average Grant
Date Fair Value
Outstanding at beginning of year, nonvested411 $56.03 
Granted276 40.60 
Vested(173)(58.24)
Outstanding at end of year, nonvested514 $47.02 
The fair value of the performance share units that vested and/or amounts paid under these awards is as follows:
(In millions)202020192018
Fair value of awards vested$$$12 
Cash paid10 11 
v3.20.4
Retirement Plans
12 Months Ended
Jan. 02, 2021
Retirement Benefits [Abstract]  
Retirement Plans Retirement Plans
We provide defined-contribution benefits to eligible employees, as well as some remaining defined-benefit pension and other post-retirement benefits covering certain of our U.S. and Non-U.S. employees. Substantially all of our employees are covered by defined contribution plans. The largest of these plans, the Textron Savings Plan, is a qualified 401(k) plan subject to the Employee Retirement Income Security Act of 1974 (ERISA). Our defined contribution plans cost $128 million, $130 million and $125 million in 2020, 2019 and 2018, respectively. We also provide postretirement benefits other than pensions for certain retired employees in the U.S. that include healthcare, dental care, Medicare Part B reimbursement and life insurance.
A portion of our U.S. employees participate in the legacy defined benefit pension plans which were closed to new participants beginning on January 1, 2010. These plans; the Textron Master Retirement Plan, the Bell Helicopter Textron Master Retirement Plan, and the CWC Castings Division of Textron Inc. Hourly-Rated Employees' Pension Plan, are subject to the provisions of ERISA and provide a minimum guaranteed benefit to participants. The primary factors affecting the benefits earned by participants in our pension plans are employees’ years of service and compensation levels. Employees hired subsequent to the closure of these plans receive an additional annual cash contribution to their Textron Savings Plan account based on their eligible compensation of up to 4%.
Periodic Benefit Cost (Credit)
The components of net periodic benefit cost (credit) and other amounts recognized in other comprehensive income (loss) (OCI) are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
(In millions)202020192018202020192018
Net periodic benefit cost (credit)
Service cost$106 $91 $104 $$$
Interest cost293 326 306 10 10 
Expected return on plan assets(574)(556)(553)— — — 
Amortization of prior service cost (credit)11 14 15 (5)(6)(6)
Amortization of net actuarial loss (gain)185 101 153 (1)(2)(1)
Net periodic benefit cost (credit)*$21 $(24)$25 $$$
Other changes in plan assets and benefit obligations recognized in OCI
Current year actuarial loss (gain)$146 $207 $270 $(2)$11 $(22)
Current year prior service cost— 20 — — — 
Amortization of net actuarial gain (loss)(185)(101)(153)
Amortization of prior service credit (cost)(11)(14)(15)
Business disposition— — (7)— — — 
Total recognized in OCI, before taxes$(42)$92 $115 $$19 $(15)
Total recognized in net periodic benefit cost (credit) and OCI$(21)$68 $140 $$24 $(9)
* Excludes the cost associated with the defined contribution component, included in certain of our U.S.-based defined benefit pension plans, that totaled $11 million in 2020 and $13 million for both 2019 and 2018.
Obligations and Funded Status
All of our plans are measured as of our fiscal year-end.  The changes in the projected benefit obligation and in the fair value of plan assets, along with our funded status, are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
(In millions)January 2, 2021January 4, 2020January 2, 2021January 4, 2020
Change in projected benefit obligation
Projected benefit obligation at beginning of year$8,938 $7,901 $246 $250 
Service cost106 91 
Interest cost293 326 10 
Plan participants’ contributions— — 
Actuarial losses (gains)888 1,001 (2)11 
Benefits paid(429)(421)(29)(33)
Plan amendment— — — 
Foreign exchange rate changes and other29 40 — — 
Projected benefit obligation at end of year$9,833 $8,938 $230 $246 
Change in fair value of plan assets
Fair value of plan assets at beginning of year$8,129 $7,122 
Actual return on plan assets1,312 1,350 
Employer contributions37 38 
Benefits paid(429)(421)
Foreign exchange rate changes and other31 40 
Fair value of plan assets at end of year$9,080 $8,129 
Funded status at end of year$(753)$(809)$(230)$(246)
Actuarial losses (gains) reflected in the table above for both 2020 and 2019 were largely the result of changes in the discount rate utilized.
Amounts recognized in our balance sheets are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
(In millions)January 2, 2021January 4, 2020January 2, 2021January 4, 2020
Non-current assets$216 $152 $— $— 
Current liabilities(28)(27)(23)(26)
Non-current liabilities(941)(934)(207)(220)
Recognized in Accumulated other comprehensive loss, pre-tax:
Net loss (gain)2,238 2,271 (23)(21)
Prior service cost (credit)52 55 (15)(20)
The accumulated benefit obligation for all defined benefit pension plans was $9.3 billion and $8.5 billion at January 2, 2021 and January 4, 2020, respectively, which included $440 million and $404 million, respectively, in accumulated benefit obligations for unfunded plans where funding is not permitted or in foreign environments where funding is not feasible.
Pension plans with accumulated benefit obligation exceeding the fair value of plan assets are as follows:
(In millions)January 2, 2021January 4, 2020
Accumulated benefit obligation$789 $8,050 
Fair value of plan assets282 7,500 
Pension plans with projected benefit obligation exceeding the fair value of plan assets are as follows:
(In millions)January 2, 2021January 4, 2020
Projected benefit obligation$9,333 $8,462 
Fair value of plan assets8,363 7,500 
Assumptions
The weighted-average assumptions we use for our pension and postretirement plans are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
202020192018202020192018
Net periodic benefit cost
Discount rate3.36%4.24%3.67%3.20%4.25%3.50%
Expected long-term rate of return on assets7.55%7.55%7.58%
Rate of compensation increase3.50%3.50%3.50%
Benefit obligations at year-end
Discount rate2.62%3.36%4.24%2.35%3.20%4.25%
Rate of compensation increase3.50%3.50%3.50%
Interest crediting rate for cash balance plans5.25%5.25%5.25%

For 2021, the long-term rate of return on assets for our domestic plans will be reduced from 7.75% to 7.25%, principally reflecting the impact of current expectations of long-term market conditions on certain investment returns. As discussed in Note 1, actuarial gains and losses are amortized into net periodic pension cost based on either the remaining service period of the active participants or the remaining life expectancy of the inactive participants. As of January 2, 2021, almost all of the participants for our largest domestic plan, the TMRP, were considered inactive largely due to actions taken in prior years to close the plan to new entrants. Accordingly, the amortization period for this plan will change to the average remaining life expectancy of the participant; this change from 7 years to 20 years will reduce 2021 pension cost by approximately $85 million.

Our assumed healthcare cost trend rate for both the medical and prescription drug cost was 7.00% in both 2020 and 2019. We expect this rate to gradually decline to 5% by 2024 where we assume it will remain.
Pension Assets
The expected long-term rate of return on plan assets is determined based on a variety of considerations, including the established asset allocation targets and expectations for those asset classes, historical returns of the plans’ assets and other market considerations. We invest our pension assets with the objective of achieving a total rate of return over the long term that will be sufficient to fund future pension obligations and to minimize future pension contributions. We are willing to tolerate a commensurate level of risk to achieve this objective based on the funded status of the plans and the long-term nature of our pension liability. Risk is controlled by maintaining a portfolio of assets that is diversified across a variety of asset classes, investment styles and investment managers. Where possible, investment managers are prohibited from owning our securities in the portfolios that they manage on our behalf.
For U.S. plan assets, which represent the majority of our plan assets, asset allocation target ranges are established consistent with our investment objectives, and the assets are rebalanced periodically.  For Non-U.S. plan assets, allocations are based on expected cash flow needs and assessments of the local practices and markets.  Our target allocation ranges are as follows:
U.S. Plan Assets
Domestic equity securities17 %to33%
International equity securities%to19%
Global equities%to17%
Debt securities27 %to38%
Real estate%to13%
Private investment partnerships%to11%
Non-U.S. Plan Assets
Equity securities55 %to75%
Debt securities25 %to45%
Real estate%to13%
The fair value of our pension plan assets by major category and valuation method is as follows:
January 2, 2021January 4, 2020
(In millions)Level 1Level 2Level 3Not
Subject to
Leveling
Level 1Level 2Level 3Not
Subject to
Leveling
Cash and equivalents$49 $$— $132 $18 $12 $— $174 
Equity securities:
Domestic1,591 — — 1,241 1,257 — — 1,160 
International1,221 — — 735 929 — — 780 
Mutual funds195 — — — 176 — — — 
Debt securities:
National, state and local governments482 306 — 95 414 308 — 56 
Corporate debt69 1,134 — 236 14 1,062 — 240 
Asset-backed securities— — — — — — — 18 
Private investment partnerships— — — 819 — — — 745 
Real estate— — 458 314 — — 473 293 
Total$3,607 $1,443 $458 $3,572 $2,808 $1,382 $473 $3,466 
Cash and equivalents, equity securities and debt securities include comingled funds, which represent investments in funds offered to institutional investors that are similar to mutual funds in that they provide diversification by holding various equity and debt securities.  Since these comingled funds are not quoted on any active market, they are priced based on the relative value of the underlying equity and debt investments and their individual prices at any given time; these funds are not subject to leveling within the fair value hierarchy. Debt securities are valued based on same day actual trading prices, if available.  If such prices are not available, we use a matrix pricing model with historical prices, trends and other factors.
Private investment partnerships represents interests in funds which invest in equity, debt and other financial assets.  These funds are generally not publicly traded so the interests therein are valued using income and market methods that include cash flow projections and market multiples for various comparable investments.  Real estate includes owned properties and limited partnership interests in real estate partnerships.  Owned properties are valued using certified appraisals at least every three years that are updated at least annually by the real estate investment manager based on current market trends and other available information. These appraisals generally use the standard methods for valuing real estate, including forecasting income and identifying current transactions for comparable real estate to arrive at a fair value.  Limited partnership interests in real estate partnerships are valued similarly to private investment partnerships, with the general partner using standard real estate valuation methods to value the real estate properties and securities held within their portfolios.  Neither private investment nor real estate partnerships are subject to leveling within the fair value hierarchy.
The table below presents a reconciliation of the fair value measurements for owned real estate properties, which use significant unobservable inputs (Level 3):
(In millions)20202019
Balance at beginning of year$473 $460 
Unrealized gains (losses), net(18)
Realized gains, net
Purchases, sales and settlements, net(3)
Balance at end of year$458 $473 
Estimated Future Cash Flow Impact
Defined benefits under salaried plans are based on salary and years of service.  Hourly plans generally provide benefits based on stated amounts for each year of service.  Our funding policy is consistent with applicable laws and regulations.  In 2021, we expect to contribute approximately $51 million to our pension plans. Benefit payments provided below reflect expected future employee service, as appropriate, and are expected to be paid, net of estimated participant contributions. These payments are based on the same assumptions used to measure our benefit obligation at the end of 2020. While pension benefit payments primarily will be paid out of qualified pension trusts, we will pay postretirement benefits other than pensions out of our general corporate assets. Benefit payments that we expect to pay on an undiscounted basis are as follows:
(In millions)20212022202320242025
2026-2030
Pension benefits$434 $441 $450 $459 $470 $2,460 
Postretirement benefits other than pensions24 23 22 20 19 77 
v3.20.4
Special Charges
12 Months Ended
Jan. 02, 2021
Restructuring and Related Activities [Abstract]  
Special Charges Special Charges
Special charges recorded by segment and type of cost are as follows:
(In millions)Severance
Costs
Contract
Terminations
and Other
Asset
Impairments
Total Restructuring ChargesOther
Charges
Total
2020
Textron Aviation$31 $— $$33 $32 $65 
Industrial27 34 41 
Textron Systems11 12 14 37 — 37 
Corporate— — — 
Total special charges$73 $13 $22 $108 $39 $147 
2019
Industrial$21 $11 $$38 $— $38 
Textron Aviation25 — 29 — 29 
Corporate— — — — 
Total special charges$46 $11 $10 $67 $$72 
2018
Industrial$$18 $47 $73 $— $73 
Total special charges$$18 $47 $73 $— $73 
2020 COVID-19 Restructuring Plan
In the second quarter of 2020, we initiated a restructuring plan to reduce operating expenses through headcount reductions, facility consolidations and other actions in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic. As a result of ongoing evaluations, this plan was expanded in the third quarter of 2020 to include additional headcount reductions and facility consolidations in the Industrial segment. The plan primarily impacts the TRU business within the Textron Systems segment, and the Industrial and Textron Aviation segments. At TRU, there has been a substantial decline in demand and order cancellations for flight simulators in light of the expected long-term impact of the pandemic on the commercial air transportation business. Accordingly, we ceased manufacturing at TRU’s facility in Montreal, Canada, resulting in a production suspension of its commercial air transport simulators, along with workforce reductions, contract terminations, facility closures and asset impairments. As a result of market conditions and the cessation of manufacturing at this facility, we incurred an inventory valuation charge of $55 million in the second quarter of 2020, which was recorded in Cost of Sales, to write-down TRU’s inventory to its net realizable value. In the fourth quarter of 2020, we reached a definitive agreement to sell TRU Simulation + Training Canada Inc. as described in Note 2.
Through the end of 2020, we recorded pre-tax charges of $108 million since the inception of the plan. In 2021, we expect to incur additional contract termination costs and other charges in the range of $20 million to $30 million, primarily in the Industrial segment. We estimate a total reduction of 2,700 positions, representing 8% of our workforce, and expect the plan to be substantially completed in the first half of 2021.
2020 Other Charges
In the first quarter of 2020, we recognized $39 million of intangible asset impairment charges at the Textron Aviation and Industrial segments. Due to the impact of the COVID-19 pandemic, we experienced decreased demand for our products and services as our customers delayed or ceased orders due to the environment of economic uncertainty. In light of these conditions, Textron Aviation had temporarily shut down most aircraft production, including the King Air turboprop and Beechcraft piston product lines, and had instituted employee furloughs. Based on these events, we performed an interim impairment test of the indefinite-lived Beechcraft and King Air trade name intangible assets at April 4, 2020. Fair value of these assets was determined utilizing the relief of royalty method assuming an increase in the discount rate based on market data to 9.7% and revised expectations of future revenues for the products and services associated with the tradenames. This analysis resulted in an impairment charge of $32 million. At January 2, 2021, these intangible assets totaled $169 million.  In the Industrial segment, we fully impaired the Arctic Cat trade name intangible asset within the Specialized Vehicles product line and recorded a $7 million impairment charge.
Other Restructuring Plans
In 2019, we recorded $67 million of special charges in connection with a restructuring plan that was designed to reduce costs and improve overall operating efficiency through headcount reductions, facility consolidations and other actions in the Industrial and Textron Aviation segments. In the Industrial segment, in connection with the strategic review of our Kautex business, cost reduction and other measures were initiated to maximize its operating margin, and we took further cost cutting actions in our Textron Specialized Vehicles businesses. In the Textron Aviation segment, we conducted a review of our ongoing workforce requirements, resulting in targeted headcount reductions and other actions to realign our cost structure. Headcount reductions totaling approximately 1,000 positions, which included business support and administrative functions within both segments, were completed in 2020. The headcount reductions at Textron Aviation were primarily related to engineering positions, reflecting completion of the Longitude certification activities and reduced requirements for ongoing development programs.
In 2018, we recorded $73 million of special charges in connection with a plan to restructure the Textron Specialized Vehicles businesses within our Industrial segment, which included asset impairment charges of $47 million, primarily intangible assets related to product rationalization, contract termination and other costs of $18 million and severance costs of $8 million. Headcount reductions totaled approximately 400 positions, representing 10% of Textron Specialized Vehicles’ workforce.
Restructuring Reserve
Our restructuring reserve activity is summarized below:
(In millions)Severance
Costs
Contract
Terminations
and Other
Total
Balance at December 29, 2018$$32 $40 
Provision for 2019 plan46 11 57 
Cash paid(8)(23)(31)
Foreign currency translation— (1)(1)
Balance at January 4, 2020$46 $19 $65 
Provision for 2020 COVID-19 restructuring plan73 13 86 
Cash paid(77)(11)(88)
Reclassifications*(1)(12)(13)
Foreign currency translation— 
Balance at January 2, 2021$43 $$52 
* Reclassifications include amounts classified as held for sale in connection with a business disposition described in Note 2.
The majority of the remaining cash outlays of $52 million is expected to be paid in the first half of 2021. Severance costs generally are paid on a lump-sum basis and include outplacement costs, which are paid in accordance with normal payment terms.
v3.20.4
Income Taxes
12 Months Ended
Jan. 02, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We conduct business globally and, as a result, file numerous consolidated and separate income tax returns within and outside the U.S.  For all of our U.S. subsidiaries, we file a consolidated federal income tax return.  Income before income taxes is as follows:
(In millions)202020192018
U.S.$202 $668 $557 
Non-U.S.80 274 827 
Income before income taxes$282 $942 $1,384 
Income tax expense (benefit) is summarized as follows:
(In millions)202020192018
Current expense (benefit):
Federal$(1)$(48)$
State(76)16 
Non-U.S.57 70 101 
(20)38 113 
Deferred expense (benefit):
Federal112 60 
State(20)(5)
Non-U.S.(15)(3)(6)
(7)89 49 
Income tax expense (benefit)$(27)$127 $162 
The following table reconciles the federal statutory income tax rate to our effective income tax rate:
202020192018
U.S. Federal statutory income tax rate21.0%21.0%21.0%
Increase (decrease) resulting from:
State income tax audit settlement (net of federal impact)(18.6)
Research and development tax credits (a)(18.2)(7.6)(2.9)
Outside basis difference in assets held for sale(2.7)
State income taxes (net of federal impact)(1.2)0.3(0.1)
Non-U.S. tax rate differential and foreign tax credits (b)10.81.41.3
U.S. tax reform enactment impact(1.0)
U.S. amended returns tax rate differential(1.2)
Gain on business disposition, primarily in non-U.S. jurisdictions(5.0)
Other, net(0.7)(0.4)(1.6)
Effective income tax rate(9.6)%13.5%11.7%
(a)In 2020, the benefit of research and development tax credits as a percentage of pre-tax income was higher than prior periods primarily due to lower pre-tax income. In 2019, $61 million in benefits were recognized for additional tax credits related to prior years as a result of the completion of a research and development tax analysis.
(b)In 2020, the effective tax rate was unfavorably impacted by a $55 million inventory charge and special charges in a non-U.S. jurisdiction where tax benefits cannot be realized, along with a $10 million tax expense related to a decision to dividend cash back from select non-U.S. jurisdictions to the U.S., partially offset by a $14 million valuation allowance release.
Unrecognized Tax Benefits
Our unrecognized tax benefits represent tax positions for which reserves have been established, with unrecognized  state tax benefits reflected net of applicable federal tax benefits. At the end of 2020, 2019 and 2018, if our unrecognized tax benefits were recognized in future periods, they would favorably impact our effective tax rate. A reconciliation of these unrecognized tax benefits is as follows:
(In millions)202020192018
Balance at beginning of year$221 $141 $182 
Additions for tax positions related to current year11 
Additions for tax positions of prior years21 74 13 
Reductions for settlements and expiration of statute of limitations(69)(1)(22)
Reductions for tax positions of prior years(1)(2)(37)
Balance at end of year$183 $221 $141 
In 2020, certain tax positions related to state tax attributes were reduced by $68 million based on an audit settlement with respect to certain state income tax returns. In 2019, additional tax positions primarily reflect the completion of a research and development tax credit analysis for tax credits related to prior years. In 2018, certain tax positions related to research and development tax credits were reduced by $25 million based on new information, including interactions with the tax authorities and recent audit settlements.
In the normal course of business, we are subject to examination by tax authorities throughout the world. We are generally no longer subject to U.S. federal tax examinations for years before 2014, state and local income tax examinations for years before 2015, and non-U.S. income tax examinations for years before 2011. In 2019, we filed U.S. federal amended returns for 2012 and 2013 for additional research and development tax credits that are subject to examination.
Deferred Taxes
The significant components of our net deferred tax assets/(liabilities) are provided below:
(In millions)January 2,
2021
January 4,
2020
U.S. operating loss and tax credit carryforwards (a)$320 $235 
Obligation for pension and postretirement benefits287 289 
Accrued liabilities (b)202 214 
Deferred compensation100 95 
Operating lease liabilities 97 70 
Non-U.S. operating loss and tax credit carryforwards (c)65 52 
Property, plant and equipment, principally depreciation(199)(153)
Amortization of goodwill and other intangibles(171)(160)
Valuation allowance on deferred tax assets(157)(145)
Operating lease right-of-use assets(95)(68)
Other leasing transactions, principally leveraged leases(79)(80)
Prepaid pension benefits(44)(29)
Other, net16 (51)
Deferred taxes, net$342 $269 
(a)At January 2, 2021, U.S. operating loss and tax credit carryforward benefits of $283 million expire through 2040 if not utilized and $37 million may be carried forward indefinitely.
(b)Accrued liabilities include warranty reserves, self-insured liabilities and interest.
(c)At January 2, 2021, non-U.S. operating loss and tax credit carryforward benefits of $29 million expire through 2040 if not utilized and $36 million may be carried forward indefinitely.
We believe earnings during the period when the temporary differences become deductible will be sufficient to realize the related future income tax benefits. For those jurisdictions where the expiration date of tax carryforwards or the projected operating results indicate that realization is not more than likely, a valuation allowance is provided.
The following table presents the breakdown of our deferred taxes:
(In millions)January 2,
2021
January 4,
2020
Manufacturing group:
Deferred tax assets, net of valuation allowance$423 $341 
Deferred tax liabilities(19)(4)
Finance group – Deferred tax liabilities(62)(68)
Net deferred tax asset$342 $269 
Non-U.S. and U.S. state income taxes have not been provided for on basis differences in certain investments, primarily as a result of unremitted earnings in foreign subsidiaries that are indefinitely reinvested, totaled $1.7 billion at January 2, 2021 and January 4, 2020. Should these earnings be distributed in the future in the form of dividends or otherwise, we would be subject to withholding and income taxes payable to various non-U.S. jurisdictions and U.S. states.  Determination of the deferred tax liability associated with indefinitely reinvested earnings is not practicable due to multiple factors, including the complexity of non-U.S. tax laws and tax treaty interpretations, exchange rate fluctuations, and the uncertainty of available credits or exemptions under U.S. federal and state tax laws.
v3.20.4
Commitments and Contingencies
12 Months Ended
Jan. 02, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
We 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.
In the ordinary course of business, we enter into standby letter of credit agreements and surety bonds with financial institutions to meet various performance and other obligations.  These outstanding letter of credit arrangements and surety bonds aggregated to approximately $216 million and $247 million at January 2, 2021 and January 4, 2020, respectively.
Environmental Remediation
As with other industrial enterprises engaged in similar businesses, we are involved in a number of remedial actions under various federal and state laws and regulations relating to the environment that impose liability on companies to clean up, or contribute to the cost of cleaning up, sites on which hazardous wastes or materials were disposed or released.  Our accrued environmental liabilities relate to installation of remediation systems, disposal costs, U.S. Environmental Protection Agency oversight costs, legal fees, and operating and maintenance costs for both currently and formerly owned or operated facilities.  Circumstances that can affect the reliability and precision of the accruals include the identification of additional sites, environmental regulations, level of cleanup required, technologies available, number and financial condition of other contributors to remediation and the time period over which remediation may occur.  We believe that any changes to the accruals that may result from these factors and uncertainties will not have a material effect on our financial position or results of operations.
Based upon information currently available, we estimate that our potential environmental liabilities are within the range of $40 million to $150 million. At January 2, 2021, environmental reserves of $76 million have been established to address these specific estimated liabilities. We estimate that we will likely pay our accrued environmental remediation liabilities over the next ten years and have classified $15 million as current liabilities. Expenditures to evaluate and remediate contaminated sites were $7 million, $13 million and $13 million in 2020, 2019 and 2018, respectively.
v3.20.4
Supplemental Cash Flow Information
12 Months Ended
Jan. 02, 2021
Supplemental Cash Flow Elements [Abstract]  
Supplemental Cash Flow Information Supplemental Cash Flow Information
Our cash payments and receipts are as follows:
(In millions)202020192018
Interest paid:
Manufacturing group$139 $138 $132 
Finance group20 23 25 
Net taxes paid:
Manufacturing group34 120 129 
Finance group17 
v3.20.4
Quarterly Data
12 Months Ended
Jan. 02, 2021
Quarterly Financial Data [Abstract]  
Quarterly Data
Quarterly Data
(Unaudited)20202019
(Dollars in millions, except per share amounts)Q1Q2Q3Q4Q1Q2Q3Q4
Revenues
Textron Aviation$872 $747 $795 $1,560 $1,134 $1,123 $1,201 $1,729 
Bell823 822 793 871 739 771 783 961 
Textron Systems328 326 302 357 307 308 311 399 
Industrial740 562 832 866 912 1,009 950 927 
Finance14 15 13 13 17 16 14 19 
Total revenues$2,777 $2,472 $2,735 $3,667 $3,109 $3,227 $3,259 $4,035 
Segment profit (loss)
Textron Aviation$$(66)$(29)$108 $106 $105 $104 $134 
Bell115 118 119 110 104 103 110 118 
Textron Systems26 37 40 49 28 49 31 33 
Industrial(11)58 55 50 76 47 44 
Finance11 
Total segment profit156 82 189 324 294 339 297 340 
Corporate expenses and other, net(14)(30)(28)(50)(47)(24)(17)(22)
Interest expense, net for Manufacturing group(34)(37)(38)(36)(35)(36)(39)(36)
Special charges *(39)(78)(7)(23)— — — (72)
Inventory charge *— (55)— — — — — — 
Income tax (expense) benefit(19)26 (1)21 (33)(62)(21)(11)
Net income (loss)$50 $(92)$115 $236 $179 $217 $220 $199 
Earnings per share
Basic$0.22 $(0.40)$0.50 $1.03 $0.76 $0.94 $0.96 $0.87 
Diluted0.22 (0.40)0.50 1.03 0.76 0.93 0.95 0.87 
Basic average shares outstanding (in thousands)228,311 228,247 228,918 228,666 234,839 232,013 229,755 228,653 
Diluted average shares outstanding (in thousands)228,927 228,247 229,279 229,365 236,437 233,545 231,097 229,790 
Segment profit (loss) margins
Textron Aviation0.3%(8.8%)(3.6%)6.9%9.3%9.4%8.7%7.8%
Bell14.014.415.012.614.113.414.012.3
Textron Systems7.911.313.213.79.115.910.08.3
Industrial1.2(2.0)7.06.45.57.54.94.7
Finance21.426.77.715.435.337.535.757.9
Segment profit margin5.6%3.3%6.9%8.8%9.5%10.5%9.1%8.4%

* See Note 17 for additional information.
v3.20.4
Schedule II - Valuation and Qualifying Accounts
12 Months Ended
Jan. 02, 2021
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]  
Schedule II - Valuation and Qualifying Accounts
Schedule II — Valuation and Qualifying Accounts
(In millions)202020192018
Allowance for doubtful accounts
Balance at beginning of year$29 $27 $27 
Charged to costs and expenses25 
Deductions from reserves*(18)(5)(5)
Balance at end of year$36 $29 $27 
Allowance for losses on finance receivables
Balance at beginning of year$25 $29 $31 
Provision (reversal) for losses(6)(3)
Charge-offs— (4)(4)
Recoveries
Balance at end of year$35 $25 $29 
Inventory FIFO reserves
Balance at beginning of year$309 $280 $262 
Charged to costs and expenses105 58 56 
Deductions from reserves*(57)(29)(38)
Balance at end of year$357 $309 $280 
* Deductions primarily include amounts written off on uncollectible accounts (less recoveries), inventory disposals, changes to prior year estimates, reclassifications to held for sale, business dispositions and currency translation adjustments.
v3.20.4
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Jan. 02, 2021
Accounting Policies [Abstract]  
Principles of Consolidation and Financial Statement Presentation
Principles of Consolidation and Financial Statement Presentation
Our Consolidated Financial Statements include the accounts of Textron Inc. and its majority-owned subsidiaries. Our financings are conducted through two separate borrowing groups. The Manufacturing group consists of Textron Inc. 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 (TFC) 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.
Our Finance group provides financing primarily to purchasers of new and pre-owned Textron Aviation aircraft and Bell helicopters manufactured by our Manufacturing group, otherwise known as captive financing. In the Consolidated Statements of Cash Flows, cash received from customers is reflected as operating activities when received from third parties. However, in the cash flow information provided for the separate borrowing groups, cash flows related to captive financing activities are reflected based on the operations of each group. For example, when product is sold by our Manufacturing group to a customer and is financed by the Finance group, the origination of the finance receivable is recorded within investing activities as a cash outflow in the Finance group’s statement of cash flows. Meanwhile, in the Manufacturing group’s statement of cash flows, the cash received from the Finance group on the customer’s behalf is recorded within operating cash flows as a cash inflow. Although cash is transferred between the two borrowing groups, there is no cash transaction reported in the consolidated cash flows at the time of the original financing. These captive financing activities, along with all significant intercompany transactions, are reclassified or eliminated in consolidation.
At the beginning of 2020, we adopted Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses. This standard changed the prior incurred loss model to a forward-looking current expected credit loss model for most financial assets, such as trade and finance receivables, contract assets and other instruments. There was no significant impact on our Consolidated Financial Statements upon adoption of the standard.
Collaborative Arrangements
Collaborative Arrangements
Our Bell segment has a strategic alliance agreement with The Boeing Company (Boeing) to provide engineering, development and test services related to the V-22 aircraft, as well as to produce the V-22 aircraft, under a number of separate contracts with the U.S. Government (V-22 Contracts). The alliance created by this agreement is not a legal entity and has no employees, no assets and no true operations. This agreement creates contractual rights and does not represent an entity in which we have an equity interest. We account for this alliance as a collaborative arrangement with Bell and Boeing reporting costs incurred and revenues generated from transactions with the U.S. Government in each company’s respective income statement. Neither Bell nor Boeing is considered to be the principal participant for the transactions recorded under this agreement. Profits on cost-plus contracts are allocated between Bell and Boeing on a 50%-50% basis. Negotiated profits on fixed-price contracts are also allocated 50%-50%; however, Bell and Boeing are each responsible for their own cost overruns and are entitled to retain any cost underruns. Based on the contractual arrangement established under the alliance, Bell accounts for its rights and obligations under the specific requirements of the V-22 Contracts allocated to Bell under the work breakdown structure. We account for all of our rights and obligations, including warranty, product and any contingent liabilities, under the specific requirements of the V-22 Contracts allocated to us under the agreement. Revenues and cost of sales reflect our performance under the V-22 Contracts with revenues recognized using the cost-to-cost method. We include all assets used in performance of the V-22 Contracts that we own and all liabilities arising from our obligations under the V-22 Contracts in our Consolidated Balance Sheets.
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.
Revenue Recognition
Revenue Recognition
Revenue is recognized when control of the goods or services promised under the contract is transferred to the customer either at a point in time (e.g., upon delivery) or over time (e.g., as we perform under the contract). We account for a contract when it has approval and commitment from both parties, the rights and payment terms of the parties are identified, the contract has commercial substance and collectability of consideration is probable. Contracts are reviewed to determine whether there is one or
multiple performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for revenue recognition. For contracts with multiple performance obligations, the expected consideration, or the transaction price, is allocated to each performance obligation identified in the contract based on the relative standalone selling price of each performance obligation. Revenue is then recognized for the transaction price allocated to the performance obligation when control of the promised goods or services underlying the performance obligation is transferred. Contract consideration is not adjusted for the effects of a significant financing component when, at contract inception, the period between when control transfers and when the customer will pay for that good or service is one year or less.
Commercial Contracts
The majority of our contracts with commercial customers have a single performance obligation as there is only one good or service promised or the promise to transfer the goods or services is not distinct or separately identifiable from other promises in the contract. Revenue is primarily recognized at a point in time, which is generally when the customer obtains control of the asset upon delivery and customer acceptance.  Contract modifications that provide for additional distinct goods or services at the standalone selling price are treated as separate contracts.
For commercial aircraft, we contract with our customers to sell fully outfitted fixed-wing aircraft, which may include configuration options. The aircraft typically represents a single performance obligation and revenue is recognized upon customer acceptance and delivery. For commercial helicopters, our customers generally contract with us for fully functional basic configuration aircraft and control is transferred upon customer acceptance and delivery. At times, customers may separately contract with us for the installation of accessories and customization to the basic aircraft. If these contracts are entered into at or near the same time of the basic aircraft contract, we assess whether the contracts meet the criteria to be combined. For contracts that are combined, the basic aircraft and the accessories and customization, are typically considered to be distinct, and therefore, are separate performance obligations. For these contracts, revenue is recognized on the basic aircraft upon customer acceptance and transfer of title and risk of loss, and on the accessories and customization, upon delivery and customer acceptance. We utilize observable prices to determine the standalone selling prices when allocating the transaction price to these performance obligations.
The transaction price for our commercial contracts reflects our estimate of returns, rebates and discounts, which are based on historical, current and forecasted information. Amounts billed to customers for shipping and handling are included in the transaction price and generally are not treated as separate performance obligations as these costs fulfill a promise to transfer the product to the customer. Taxes collected from customers and remitted to government authorities are recorded on a net basis.
We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one year to five years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation.
U.S. Government Contracts
Our contracts with the U.S. Government generally include the design, development, manufacture or modification of aerospace and defense products as well as related parts and services. These contracts, which also include those under the U.S. Government-sponsored foreign military sales program, accounted for approximately 30% of total revenues in 2020.  The customer typically contracts with us to provide a significant service of integrating a complex set of tasks and components into a single project or capability, which often results in the delivery of multiple units. Accordingly, the entire contract is accounted for as one performance obligation. In certain circumstances, a contract may include both production and support services, such as logistics and parts plans, which are considered to be distinct in the context of the contract and represent separate performance obligations. When a contract is separated into more than one performance obligation, we generally utilize the expected cost plus a margin approach to determine the standalone selling prices when allocating the transaction price.
Our contracts are frequently modified for changes in contract specifications and requirements. Most of our contract modifications with the U.S. Government are for goods and services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as part of that existing contract. The effect of these contract modifications on our estimates is recognized using the cumulative catch-up method of accounting.
Contracts with the U.S. Government generally contain clauses that provide lien rights to work-in-process along with clauses that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work-in-process. Due to the continuous transfer of control to the U.S. Government, we recognize revenue over the time that we perform under the contract. Selecting the method to measure progress towards completion requires judgment and is based on the nature of the products or service to be provided. We generally use the cost-to-cost method to measure progress for our contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts.  Under this measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the estimated costs at completion of the performance obligation, and revenue is recorded proportionally as costs are incurred.  
The transaction price for our contracts represents our best estimate of the consideration we will receive and includes assumptions regarding variable consideration as applicable. Certain of our long-term contracts contain incentive fees or other provisions that can either increase or decrease the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance, historical performance, and all other information that is reasonably available to us.
Total contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several years, and the estimation of these costs requires substantial judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change.  
Approximately 75% of our 2020 revenues with the U.S. Government were under fixed-price and fixed-price incentive contracts. Under the typical payment terms of these contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments of up to 90% of the contract price based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of up to 80% of costs incurred as the work progresses. Because the customer retains a small portion of the contract price until completion of the contract, these contracts generally result in revenue recognized in excess of billings, which we present as contract assets in the Consolidated Balance Sheets. Amounts billed and due from our customers are classified in Accounts receivable, net. The portion of the payments retained by the customer until final contract settlement is not considered a significant financing component because the intent is to protect the customer. For cost-type contracts, we are generally paid for our actual costs incurred within a short period of time.
Finance Revenues
Finance revenues primarily include interest on finance receivables, finance lease earnings and portfolio gains/losses. Portfolio gains/losses include impairment charges related to repossessed assets and properties and gains/losses on the sale or early termination of finance assets. We recognize interest using the interest method, which provides a constant rate of return over the terms of the receivables. Accrual of interest income is suspended if credit quality indicators suggest full collection of principal and interest is doubtful. In addition, we automatically suspend the accrual of interest income for accounts that are contractually delinquent by more than three months unless collection is not doubtful. Cash payments on nonaccrual accounts, including finance charges, generally are applied to reduce the net investment balance. Once we conclude that the collection of all principal and interest is no longer doubtful, we resume the accrual of interest and recognize previously suspended interest income at the time either a) the loan becomes contractually current through payment according to the original terms of the loan, or b) if the loan has been modified, following a period of performance under the terms of the modification.
Contract Assets and Liabilities
Contract Assets and Liabilities
Contract assets arise from contracts when revenue is recognized over time and the amount of revenue recognized exceeds the amount billed to the customer. These amounts are included in contract assets until the right to payment is no longer conditional on events other than the passage of time and are included in Other current assets in the Consolidated Balance Sheet. Contract liabilities, which are primarily included in Other current liabilities, include deposits, largely from our commercial aviation customers, and billings in excess of revenue recognized.  
The incremental costs of obtaining a contract with a customer that is expected to be recovered is expensed as incurred when the period to be benefitted is one year or less.
Accounts Receivable, Net
Accounts Receivable, Net
Accounts receivable, net includes amounts billed to customers where the right to payment is unconditional. We maintain an allowance for credit losses for our commercial accounts receivable to provide for the estimated amount that will not be collected, even when the risk of loss is remote. The allowance is measured on a collective pool basis when similar risk characteristics exists and is established as a percentage of accounts receivable. We have identified pools with similar risk characteristics, based on customer and industry type and geographic location. The percentage is based on all available and relevant information including age of outstanding receivables and collateral value, if any, historical payment experience and loss history, current economic conditions, and, when reasonable and supportable factors exist, management’s expectation of future economic conditions. For amounts due from the U.S. Government, we have not established an allowance for credit losses as we have zero loss expectation based on a long history of no credit losses and the explicit guarantee of a sovereign entity.
Cash and Equivalents
Cash and Equivalents
Cash and equivalents consist of cash and short-term, highly liquid investments with original maturities of three months or less.
Inventories
Inventories
Inventories are stated at the lower of cost or estimated net realizable value.  We value our inventories generally using the first-in, first-out (FIFO) method or the last-in, first-out (LIFO) method for certain qualifying inventories where LIFO provides a better matching of costs and revenues. We determine costs for our commercial helicopters on an average cost basis by model considering the expended and estimated costs for the current production release.
Property, Plant and Equipment Property, Plant and EquipmentProperty, plant and equipment are recorded at cost and are depreciated primarily using the straight-line method.  We capitalize expenditures for improvements that increase asset values and extend useful lives.  Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the carrying value of the asset exceeds the sum of the undiscounted expected future cash flows, the asset is written down to fair value.
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill represents the excess of the consideration paid for the acquisition of a business over the fair values assigned to intangible and other net assets of the acquired business. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to an annual impairment test. We evaluate the recoverability of these assets in the fourth quarter of each year or more frequently if events or changes in circumstances, such as declines in sales, earnings or cash flows, or material adverse changes in the business climate, indicate a potential impairment.
For our goodwill impairment test, we calculate the fair value of each reporting unit using discounted cash flows.  A reporting unit represents the operating segment unless discrete financial information is prepared and reviewed by segment management for businesses one level below that operating segment, in which case such component is the reporting unit.  In certain instances, we have aggregated components of an operating segment into a single reporting unit based on similar economic characteristics. The discounted cash flows incorporate assumptions for revenue growth rates, operating margins and discount rates that represent our best estimates of current and forecasted market conditions, cost structure, anticipated net cost reductions, and the implied rate of return that we believe a market participant would require for an investment in a business having similar risks and characteristics to the reporting unit being assessed. The fair value of our indefinite-lived intangible assets is primarily determined using the relief of royalty method based on forecasted revenues and royalty rates. If the estimated fair value of the reporting unit or indefinite-lived intangible asset exceeds the carrying value, there is no impairment. Otherwise, an impairment loss is recognized for the amount by which the carrying value exceeds the estimated fair value.
Acquired intangible assets with finite lives are subject to amortization. These assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.  Amortization of these intangible assets is recognized over their estimated useful lives using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. Approximately 86% of our gross intangible assets are amortized based on the cash flow streams used to value the assets, with the remaining assets amortized using the straight-line method.
Finance Receivables
Finance Receivables
Finance receivables primarily include loans provided to purchasers of new and pre-owned Textron Aviation aircraft and Bell helicopters. Finance receivables are generally recorded at the amount of outstanding principal less allowance for losses.
We establish an allowance for credit losses to cover probable but specifically unknown losses existing in the portfolio. This allowance is established as a percentage of finance receivables categorized by pools with similar risk characteristics, such as collateral or customer type and geographic location. The percentage is based on a combination of factors, including historical loss experience, current delinquency and default trends, collateral values, current economic conditions, and, when reasonable and supportable factors exist, management’s expectation of future economic conditions.
For those finance receivables that do not have similar risk characteristics, including larger balance accounts specifically identified as impaired, a reserve is established based on comparing the expected future cash flows, discounted at the finance receivable's effective interest rate, or the fair value of the underlying collateral if the finance receivable is collateral dependent, to its carrying amount. The expected future cash flows consider collateral value; financial performance and liquidity of our borrower; existence and financial strength of guarantors; estimated recovery costs, including legal expenses; and costs associated with the repossession and eventual disposal of collateral. When there is a range of potential outcomes, we perform multiple discounted cash flow analyses and weight the potential outcomes based on their relative likelihood of occurrence. The evaluation of our portfolio is inherently subjective, as it requires estimates, including the amount and timing of future cash flows expected to be received on impaired finance receivables and the estimated fair value of the underlying collateral, which may differ from actual results. While our analysis is specific to each individual account, critical factors included in this analysis include industry valuation guides, age and physical condition of the collateral, payment history, and existence and financial strength of guarantors.
Finance receivables are charged off at the earlier of the date the collateral is repossessed or when management no longer deems the receivable collectible.  Repossessed assets are recorded at their fair value, less estimated cost to sell.
Pension and Postretirement Benefit Obligations
Pension and Postretirement Benefit Obligations
We maintain various pension and postretirement plans for our employees globally. Our pension plans include significant benefit obligations, which are calculated based on actuarial valuations. Key assumptions used in determining these obligations and related expenses include expected long-term rates of return on plan assets, discount rates and healthcare cost projections.  We evaluate and update these assumptions annually in consultation with third-party actuaries and investment advisors. We also make assumptions regarding employee demographic factors such as retirement patterns, mortality, turnover and rate of compensation increases.
For our year-end measurement, our defined benefit plan assets and obligations are measured as of the month-end date closest to our fiscal year-end. We recognize the overfunded or underfunded status of our pension and postretirement plans in the Consolidated Balance Sheets and recognize changes in the funded status of our defined benefit plans in comprehensive income (loss) in the year in which they occur. To the extent actuarial gains and losses exceed 10% of the higher of the market-related value of assets or the benefit obligation in a year, the excess is recognized as a component of accumulated other comprehensive income (loss) and is amortized into net periodic pension cost over the remaining service period of the active participants. For plans in which all or almost all of the plan’s participants are inactive, the amortization period is the remaining life expectancy of the inactive participants. This determination is made on a plan-by-plan basis.
Derivatives and Hedging Activities
Derivatives and Hedging Activities
We are exposed to market risk primarily from changes in currency exchange rates and interest rates.  We do not hold or issue derivative financial instruments for trading or speculative purposes.  To manage the volatility relating to our exposures, we net these exposures on a consolidated basis to take advantage of natural offsets.  For the residual portion, we enter into various derivative transactions pursuant to our policies in areas such as counterparty exposure and hedging practices.  Credit risk related to derivative financial instruments is considered minimal and is managed by requiring high credit standards for counterparties and through periodic settlements of positions.
All derivative instruments are reported at fair value in the Consolidated Balance Sheets.  Designation to support hedge accounting is performed on a specific exposure basis.  For financial instruments qualifying as cash flow hedges, we record changes in the fair value of derivatives (to the extent they are effective as hedges) in other comprehensive income (loss), net of deferred taxes. Changes in fair value of derivatives not qualifying as hedges are recorded in earnings.
Foreign currency denominated assets and liabilities are translated into U.S. dollars.  Adjustments from currency rate changes are recorded in the cumulative translation adjustment account in shareholders’ equity until the related foreign entity is sold or substantially liquidated.
Leases LeasesWe identify leases by evaluating our contracts to determine if the contract conveys the right to use an identified asset for a stated period of time in exchange for consideration. Specifically, we consider whether we can control the underlying asset and have the right to obtain substantially all of the economic benefits or outputs from the asset.  For our contracts that contain both lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) and non-lease components (e.g., common-area maintenance costs, other goods/services), we allocate the consideration in the contract to each component based on its standalone price.  Leases with terms greater than 12 months are classified as either operating or finance leases at the commencement date.  For these leases, we capitalize the lesser of a) the present value of the minimum lease payments over the lease term, or b) the fair value of the asset, as a right-of-use asset with an offsetting lease liability. The discount rate used to calculate the present value of the minimum lease payments is typically our incremental borrowing rate, as the rate implicit in the lease is generally not known or determinable. The lease term includes any noncancelable period for which we have the right to use the asset and may include options to extend or terminate the lease when it is reasonably certain that we will exercise the option.  Operating leases are recognized as a single lease cost on a straight-line basis over the lease term, while finance lease cost is recognized separately as amortization and interest expense.
Product Liabilities
Product Liabilities
We accrue for product liability claims and related defense costs when a loss is probable and reasonably estimable.  Our estimates are generally based on the specifics of each claim or incident and our best estimate of the probable loss using historical experience.
Environmental Liabilities and Asset Retirement Obligations
Environmental Liabilities and Asset Retirement Obligations
Liabilities for environmental matters are recorded on a site-by-site basis when it is probable that an obligation has been incurred and the cost can be reasonably estimated.  We estimate our accrued environmental liabilities using currently available facts, existing technology, and presently enacted laws and regulations, all of which are subject to a number of factors and uncertainties. Our environmental liabilities are not discounted and do not take into consideration possible future insurance proceeds or significant amounts from claims against other third parties.
We have incurred asset retirement obligations primarily related to costs to remove and dispose of underground storage tanks and asbestos materials used in insulation, adhesive fillers and floor tiles. Currently, there is no legal requirement to remove these items and there is no plan to remodel the related facilities or otherwise cause the impacted items to require disposal. Since these asset retirement obligations are not probable, there is no related liability recorded in the Consolidated Balance Sheets.
Warranty Liabilities
Warranty Liabilities
For our assurance-type warranty programs, we estimate the costs that may be incurred and record a liability in the amount of such costs at the time product revenues are recognized.  Factors that affect this liability include the number of products sold, historical costs per claim, length of warranty period, contractual recoveries from vendors and historical and anticipated rates of warranty claims, including production and warranty patterns for new models.  We assess the adequacy of our recorded warranty liability periodically and adjust the amounts as necessary.  Additionally, we may establish a warranty liability related to the issuance of aircraft service bulletins for aircraft no longer covered under the limited warranty programs.
Research and Development Costs
Research and Development Costs
Our customer-funded research and development costs are charged directly to the related contracts, which primarily consist of U.S. Government contracts.  In accordance with government regulations, we recover a portion of company-funded research and development costs through overhead rate charges on our U.S. Government contracts.  Research and development costs that are not reimbursable under a contract with the U.S. Government or another customer are charged to expense as incurred.  Company-funded research and development costs were $549 million, $647 million and $643 million in 2020, 2019 and 2018, respectively, and are included in cost of sales.
Income Taxes
Income Taxes
The provision for income tax expense is calculated on reported income before income taxes based on current tax law and includes, in the current period, the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Tax laws may require items to be included in the determination of taxable income at different times from when the items are reflected in the financial statements. Deferred tax balances reflect the effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and their tax bases, as well as from net operating losses and tax credit carryforwards, and are stated at enacted tax rates in effect for the year taxes are expected to be paid or recovered.
Deferred tax assets represent tax benefits for tax deductions or credits available in future years and require certain estimates and assumptions to determine whether it is more likely than not that all or a portion of the benefit will not be realized.  The recoverability of these future tax deductions and credits is determined by assessing the adequacy of future expected taxable income from all sources, including the future reversal of existing taxable temporary differences, taxable income in carryback
years, estimated future taxable income and available tax planning strategies. Should a change in facts or circumstances lead to a change in judgment about the ultimate recoverability of a deferred tax asset, we record or adjust the related valuation allowance in the period that the change in facts and circumstances occurs, along with a corresponding increase or decrease in income tax expense.  
We record tax benefits for uncertain tax positions based upon management’s evaluation of the information available at the reporting date.  To be recognized in the financial statements, the tax position must meet the more-likely-than-not threshold that the position will be sustained upon examination by the tax authority based on technical merits assuming the tax authority has full knowledge of all relevant information.  For positions meeting this recognition threshold, the benefit is measured as the largest amount of benefit that meets the more-likely-than-not threshold to be sustained. We periodically evaluate these tax positions based on the latest available information.  For tax positions that do not meet the threshold requirement, we recognize net tax-related interest and penalties for continuing operations in income tax expense.
v3.20.4
Goodwill and Intangible Assets (Tables)
12 Months Ended
Jan. 02, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Change in Carrying Amount of Goodwill by Segment
The changes in the carrying amount of goodwill by segment are as follows:
(In millions)Textron
Aviation
BellTextron
Systems
IndustrialTotal
Balance at December 29, 2018$614 $31 $1,100 $473 $2,218 
Disposition (a)— — (71)— (71)
Acquisition— — — 
Foreign currency translation— — — (1)(1)
Balance at January 4, 2020614 31 1,033 472 2,150 
Acquisitions— — 
Reclassifications (b)12 — (24)— (12)
Foreign currency translation— — 10 11 
Balance at January 2, 2021$631 $35 $1,009 $482 $2,157 
(a)See Note 7 for additional information.
(b)Reclassifications include $12 million of goodwill classified as held for sale in connection with a business disposition described in Note 2 and amounts transferred between segments.
Schedule of Intangible Assets
Our intangible assets are summarized below:
January 2, 2021January 4, 2020
(Dollars in millions)Weighted-Average
Amortization
Period (in years)
Gross
Carrying
Amount
Accumulated
Amortization
NetGross
Carrying
Amount
Accumulated
Amortization
Net
Patents and technology14$484 $(263)$221 $501 $(242)$259 
Trade names and trademarks14182 (8)174 223 (8)215 
Customer relationships and
contractual agreements
15412 (318)94 413 (298)115 
Other4(6)— (6)— 
Total$1,084 $(595)$489 $1,143 $(554)$589 
Schedule of Intangible Assets
Our intangible assets are summarized below:
January 2, 2021January 4, 2020
(Dollars in millions)Weighted-Average
Amortization
Period (in years)
Gross
Carrying
Amount
Accumulated
Amortization
NetGross
Carrying
Amount
Accumulated
Amortization
Net
Patents and technology14$484 $(263)$221 $501 $(242)$259 
Trade names and trademarks14182 (8)174 223 (8)215 
Customer relationships and
contractual agreements
15412 (318)94 413 (298)115 
Other4(6)— (6)— 
Total$1,084 $(595)$489 $1,143 $(554)$589 
v3.20.4
Accounts Receivable and Finance Receivables (Tables)
12 Months Ended
Jan. 02, 2021
Receivables [Abstract]  
Accounts Receivable
Accounts receivable is composed of the following:
(In millions)January 2,
2021
January 4,
2020
Commercial$668 $835 
U.S. Government contracts155 115 
823 950 
Allowance for doubtful accounts(36)(29)
Total$787 $921 
Finance Receivables
Finance receivables are presented in the following table:
(In millions)January 2,
2021
January 4,
2020
Finance receivables$779 $707 
Allowance for losses(35)(25)
Total finance receivables, net$744 $682 
Financing Receivables Categorized Based on Credit Quality Indicators
Finance receivables categorized based on the credit quality indicators and by delinquency aging category are  summarized as follows:
(Dollars in millions)January 2,
2021
January 4,
2020
Performing$612 $664 
Watchlist74 
Nonaccrual93 39 
Nonaccrual as a percentage of finance receivables11.94%5.52%
Less than 31 days past due$738 $637 
31-60 days past due12 53 
61-90 days past due11 
Over 90 days past due18 10 
60+ days contractual delinquency as a percentage of finance receivables3.72%2.40%
Financing Receivables Categorized Based on Credit Quality Indicators
Finance receivables categorized based on the credit quality indicators and by delinquency aging category are  summarized as follows:
(Dollars in millions)January 2,
2021
January 4,
2020
Performing$612 $664 
Watchlist74 
Nonaccrual93 39 
Nonaccrual as a percentage of finance receivables11.94%5.52%
Less than 31 days past due$738 $637 
31-60 days past due12 53 
61-90 days past due11 
Over 90 days past due18 10 
60+ days contractual delinquency as a percentage of finance receivables3.72%2.40%
Summary of impaired finance receivables, excluding leveraged leases, and the average recorded investment
A summary of impaired finance receivables, excluding leveraged leases, and the average recorded investment is provided below:
(In millions)January 2,
2021
January 4,
2020
Recorded investment:
Impaired loans with specific allowance for losses$46 $17 
Impaired loans with no specific allowance for losses117 22 
Total$163 $39 
Unpaid principal balance$175 $50 
Allowance for losses on impaired loans
Average recorded investment126 40 
Summary of finance receivables and allowance for loan losses based on impairment evaluation, excluding leveraged leases
A summary of the allowance for losses on finance receivables based on how the underlying finance receivables are evaluated for impairment, is provided below.  The finance receivables reported in this table exclude $95 million and $104 million of leveraged leases at January 2, 2021 and January 4, 2020, respectively, in accordance with U.S. generally accepted accounting principles.
(In millions)January 2,
2021
January 4,
2020
Allowance based on collective evaluation$28 $22 
Allowance based on individual evaluation
Finance receivables evaluated collectively521 564 
Finance receivables evaluated individually163 39 
v3.20.4
Inventories (Tables)
12 Months Ended
Jan. 02, 2021
Inventory Disclosure [Abstract]  
Inventories
Inventories are composed of the following:
(In millions)January 2,
2021
January 4,
2020
Finished goods$1,228 $1,557 
Work in process1,455 1,616 
Raw materials and components830 896 
Total$3,513 $4,069 
v3.20.4
Property, Plant and Equipment, Net (Tables)
12 Months Ended
Jan. 02, 2021
Property, Plant and Equipment [Abstract]  
Manufacturing group's property, plant and equipment, net
Our Manufacturing group’s property, plant and equipment, net is composed of the following:
(Dollars in millions)Useful Lives
(in years)
January 2,
2021
January 4,
2020
Land, buildings and improvements2-40$2,031 $1,991 
Machinery and equipment2-205,181 4,941 
7,212 6,932 
Accumulated depreciation and amortization(4,696)(4,405)
Total$2,516 $2,527 
v3.20.4
Other Current Liabilities (Tables)
12 Months Ended
Jan. 02, 2021
Other Liabilities Disclosure [Abstract]  
Schedule of Other Current Liabilities of Manufacturing group
The other current liabilities of our Manufacturing group are summarized below:
(In millions)January 2,
2021
January 4,
2020
Contract liabilities$758 $715 
Salaries, wages and employer taxes381 362 
Current portion of warranty and product maintenance liabilities133 147 
Other713 683 
Total$1,985 $1,907 
Changes in Warranty Liability
Changes in our warranty liability are as follows:
(In millions)202020192018
Balance at beginning of year$141 $149 $164 
Provision54 68 72 
Settlements(64)(70)(78)
Adjustments*(12)(6)(9)
Balance at end of year$119 $141 $149 
* Adjustments include changes to prior year estimates, new issues on prior year sales, reclassifications to held for sale, business acquisitions/dispositions and currency translation adjustments.
v3.20.4
Leases (Tables)
12 Months Ended
Jan. 02, 2021
Leases [Abstract]  
Schedule of Balance Sheet and Other Information Balance sheet and other information related to our leases is as follows:
(Dollars in millions)January 2,
2021
January 4,
2020
Operating leases:
Other assets$349 $277 
Other current liabilities47 48 
Other liabilities306 233 
Finance leases:
Property, plant and equipment, net$35 $39 
Current portion of long-term debt
Long-term debt38 40 
Weighted-average remaining lease term (in years)
Operating leases11.610.2
Finance leases16.817.9
Weighted-average discount rate
Operating leases4.17%4.42%
Finance leases4.35%4.37%
Summary of Maturities of Operating Lease Liabilities
Maturities of our lease liabilities at January 2, 2021 are as follows:
(In millions)Operating
Leases
Finance
Leases
2021$59 $
202253 
202344 
202435 
202533 
Thereafter232 42 
Total lease payments456 63 
Less: interest(103)(23)
Total lease liabilities$353 $40 
Summary of Maturities of Finance Lease Liabilities
Maturities of our lease liabilities at January 2, 2021 are as follows:
(In millions)Operating
Leases
Finance
Leases
2021$59 $
202253 
202344 
202435 
202533 
Thereafter232 42 
Total lease payments456 63 
Less: interest(103)(23)
Total lease liabilities$353 $40 
v3.20.4
Debt and Credit Facilities (Tables)
12 Months Ended
Jan. 02, 2021
Debt Disclosure [Abstract]  
Debt Summary
Our debt is summarized in the table below:
(In millions)January 2,
2021
January 4,
2020
Manufacturing group
6.625% due 2020
$— $199 
Variable-rate notes due 2020 (2.45%)
— 350 
3.65% due 2021
250 250 
5.95% due 2021
250 250 
4.30% due 2024
350 350 
3.875% due 2025
350 350 
4.00% due 2026
350 350 
3.65% due 2027
350 350 
3.375% due 2028
300 300 
3.90% due 2029
300 300 
3.00% due 2030
650 — 
2.45% due 2031
500 — 
Other (weighted-average rate of 2.60% and 3.01%, respectively)
57 75 
Total Manufacturing group debt$3,707 $3,124 
Less: Current portion of long-term debt(509)(561)
Total Long-term debt$3,198 $2,563 
Finance group
Variable-rate note due 2022 (1.70% and 2.87%, respectively)
$150 $150 
2.88% note due 2022
150 150 
Fixed-rate notes due 2020-2028 (weighted-average rate of 3.25% and 3.20%, respectively)*
51 65 
Variable-rate notes due 2020-2027 (weighted-average rate of 1.73% and  3.31%, respectively)*
17 22 
Fixed-to-Floating Rate Junior Subordinated Notes (1.96% and 3.64%, respectively)
294 299 
Total Finance group debt$662 $686 
* Notes amortize on a monthly basis and are secured by finance receivables as described in Note 4.
Schedule of Required Payments
The following table shows required payments during the next five years on debt outstanding at January 2, 2021:
(In millions)20212022202320242025
Manufacturing group$509 $$$361 $357 
Finance group13 316 16 15 
Total$522 $324 $24 $376 $362 
v3.20.4
Derivative Instruments and Fair Value Measurements (Tables)
12 Months Ended
Jan. 02, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Carrying Value and Estimated 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:
January 2, 2021January 4, 2020
(In millions)Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Manufacturing group
Debt, excluding leases$(3,690)$(3,986)$(3,097)$(3,249)
Finance group
Finance receivables, excluding leases549 599 493 527 
Debt(662)(587)(686)(634)
v3.20.4
Shareholders' Equity (Tables)
12 Months Ended
Jan. 02, 2021
Equity [Abstract]  
Capital Stock Outstanding common stock activity is presented below:
(In thousands)202020192018
Balance at beginning of year227,956 235,621 261,471 
Share repurchases(4,145)(10,011)(29,094)
Share-based compensation activity2,633 2,346 3,244 
Balance at end of year226,444 227,956 235,621 
Schedule of Weighted-Average Shares Outstanding for Basic and Diluted EPS
The weighted-average shares outstanding for basic and diluted EPS are as follows:
(In thousands)202020192018
Basic weighted-average shares outstanding228,536 231,315 250,196 
Dilutive effect of stock options443 1,394 3,041 
Diluted weighted-average shares outstanding228,979 232,709 253,237 
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 December 29, 2018$(1,727)$(32)$(3)$(1,762)
Other comprehensive loss before reclassifications(166)(4)(165)
Reclassified from Accumulated other comprehensive loss82 — (2)80 
Balance at January 4, 2020$(1,811)$(36)$— $(1,847)
Other comprehensive loss before reclassifications(115)78 (34)
Reclassified from Accumulated other comprehensive loss146 — (4)142 
Balance at January 2, 2021$(1,780)$42 $(1)$(1,739)
Schedule of Before and After Tax Components of Other Comprehensive Income (Loss)
The before and after-tax components of other comprehensive income (loss) are presented below:
202020192018
(In millions)Pre-Tax
Amount
Tax
(Expense)
Benefit
After-
Tax
Amount
Pre-Tax
Amount
Tax
(Expense)
Benefit
After-
Tax
Amount
Pre-Tax
Amount
Tax
(Expense)
Benefit
After-
Tax
Amount
Pension and postretirement benefits
adjustments:
Unrealized losses$(144)$35 $(109)$(218)$52 $(166)$(248)$58 $(190)
Amortization of net actuarial loss*184 (43)141 99 (23)76 152 (35)117 
Amortization of prior service cost*(1)(2)(2)
Recognition of prior service cost(8)(6)— — — (20)(15)
Business disposition— — — — — — — 
Pension and postretirement benefits
adjustments, net
38 (7)31 (111)27 (84)(100)26 (74)
Foreign currency translation adjustments:
Foreign currency translation adjustments81 (3)78 (6)(4)(46)(3)(49)
Business disposition— — — — — — — 
Foreign currency translation adjustments, net81 (3)78 (6)(4)(40)(3)(43)
Deferred gains (losses) on hedge contracts:
Current deferrals(1)(3)(8)— (8)
Reclassification adjustments(6)(4)(2)— (2)(7)(5)
Deferred gains (losses) on hedge
contracts, net
(2)(1)(3)(15)(13)
Total$117 $(9)$108 $(111)$26 $(85)$(155)$25 $(130)
* These components of other comprehensive income (loss) are included in the computation of net periodic pension cost. See Note 16 for additional information.
v3.20.4
Segment and Geographic Data (Tables)
12 Months Ended
Jan. 02, 2021
Segment Reporting [Abstract]  
Revenues by Segment and Reconciliation of Segment Profit to Income Before Income Taxes
Our revenues by segment, along with a reconciliation of segment profit to income before income taxes, are as follows:
RevenuesSegment Profit
(In millions)202020192018202020192018
Textron Aviation$3,974 $5,187 $4,971 $16 $449 $445 
Bell3,309 3,254 3,180 462 435 425 
Textron Systems1,313 1,325 1,464 152 141 156 
Industrial3,000 3,798 4,291 111 217 218 
Finance55 66 66 10 28 23 
Total$11,651 $13,630 $13,972 $751 $1,270 $1,267 
Corporate expenses and other, net(122)(110)(119)
Interest expense, net for Manufacturing group(145)(146)(135)
Special charges*(147)(72)(73)
Inventory charge*(55)— — 
Gain on business disposition— — 444 
Income before income taxes$282 $942 $1,384 
* See Note 17 for additional information.
Other Information by Segment
Other information by segment is provided below:
AssetsCapital ExpendituresDepreciation and Amortization
(In millions)January 2,
2021
January 4,
2020
202020192018202020192018
Textron Aviation$4,380 $4,692 $94 $122 $132 $138 $137 $145 
Bell2,984 2,783 117 81 65 91 107 108 
Textron Systems2,054 2,352 42 38 39 43 48 54 
Industrial2,500 2,781 62 97 132 102 108 112 
Finance938 964 — — — 
Corporate2,587 1,446 12 10 10 
Total$15,443 $15,018 $317 $339 $369 $391 $416 $437 
Financial Information of Continuing Operations by Geographic Area
Presented below is selected financial information by geographic area:
Revenues*Property, Plant
and Equipment, net**
(In millions)202020192018January 2,
2021
January 4,
2020
United States$7,943 $8,963 $8,667 $2,068 $2,054 
Europe1,336 1,986 2,187 237 244 
Asia and Australia1,106 1,070 1,253 95 97 
Other international1,266 1,611 1,865 116 132 
Total$11,651 $13,630 $13,972 $2,516 $2,527 
* Revenues are attributed to countries based on the location of the customer.
** Property, plant and equipment, net is based on the location of the asset.
v3.20.4
Revenues (Tables)
12 Months Ended
Jan. 02, 2021
Revenue from Contract with Customer [Abstract]  
Schedule of revenue by major product type, customer type and geographic location
Our revenues disaggregated by major product type are presented below:
(In millions)202020192018
Aircraft$2,714 $3,592 $3,435 
Aftermarket parts and services1,260 1,595 1,536 
Textron Aviation3,974 5,187 4,971 
Military aircraft and support programs2,213 1,988 2,030 
Commercial helicopters, parts and services1,096 1,266 1,150 
Bell3,309 3,254 3,180 
Unmanned systems621 572 612 
Marine and land systems179 208 311 
Simulation, training and other513 545 541 
Textron Systems1,313 1,325 1,464 
Fuel systems and functional components1,751 2,237 2,352 
Specialized vehicles1,249 1,561 1,691 
Tools and test equipment— — 248 
Industrial3,000 3,798 4,291 
Finance55 66 66 
Total revenues$11,651 $13,630 $13,972 
Our revenues for our segments by customer type and geographic location are presented below:
(In millions)Textron
Aviation
BellTextron
Systems
IndustrialFinanceTotal
2020
Customer type:
Commercial$3,826 $1,079 $249 $2,993 $55 $8,202 
U.S. Government148 2,230 1,064 — 3,449 
Total revenues$3,974 $3,309 $1,313 $3,000 $55 $11,651 
Geographic location:
United States$2,825 $2,564 $1,129 $1,398 $27 $7,943 
Europe356 148 44 786 1,336 
Asia and Australia379 330 67 328 1,106 
Other international414 267 73 488 24 1,266 
Total revenues$3,974 $3,309 $1,313 $3,000 $55 $11,651 
2019
Customer type:
Commercial$4,956 $1,238 $359 $3,775 $66 $10,394 
U.S. Government231 2,016 966 23 — 3,236 
Total revenues$5,187 $3,254 $1,325 $3,798 $66 $13,630 
Geographic location:
United States$3,708 $2,440 $1,083 $1,698 $34 $8,963 
Europe678 142 73 1,091 1,986 
Asia and Australia244 348 103 374 1,070 
Other international557 324 66 635 29 1,611 
Total revenues$5,187 $3,254 $1,325 $3,798 $66 $13,630 
2018
Customer type:
Commercial$4,734 $1,114 $431 $4,277 $66 $10,622 
U.S. Government237 2,066 1,033 14 — 3,350 
Total revenues$4,971 $3,180 $1,464 $4,291 $66 $13,972 
Geographic location:
United States$3,379 $2,186 $1,118 $1,957 $27 $8,667 
Europe612 162 74 1,333 2,187 
Asia and Australia336 427 127 357 1,253 
Other international644 405 145 644 27 1,865 
Total revenues$4,971 $3,180 $1,464 $4,291 $66 $13,972 
v3.20.4
Share-Based Compensation (Tables)
12 Months Ended
Jan. 02, 2021
Share-based Payment Arrangement [Abstract]  
Compensation expense included in net income Compensation expense included in net income for our share-based compensation plans is as follows:
(In millions)202020192018
Compensation expense$57 $52 $35 
Income tax benefit(14)(12)(8)
Total compensation expense included in net income$43 $40 $27 
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:
202020192018
Fair value of options at grant date$10.66$14.62$15.83
Dividend yield0.2%0.2%0.1%
Expected volatility29.3%26.6%26.6%
Risk-free interest rate1.1%2.5%2.6%
Expected term (in years)4.74.74.7
Stock option activity
The stock option activity during 2020 is provided below:
(Options in thousands)Number of
Options
Weighted-
Average
Exercise Price
Outstanding at beginning of year8,744 $44.00 
Granted2,003 39.48 
Exercised(723)(29.71)
Forfeited or expired(214)(48.75)
Outstanding at end of year9,810 $44.03 
Exercisable at end of year6,484 $43.02 
Activity for Restricted Stock Units
The 2020 activity for restricted stock units 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 beginning of year, nonvested543 $49.44 1,104 $49.61 
Granted179 37.93 360 40.57 
Vested(139)(42.34)(276)(42.34)
Forfeited— — (43)(49.29)
Outstanding at end of year, nonvested583 $47.60 1,145 $48.53 
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:
(In millions)202020192018
Fair value of awards vested$17 $23 $25 
Cash paid11 16 18 
The fair value of the performance share units that vested and/or amounts paid under these awards is as follows:
(In millions)202020192018
Fair value of awards vested$$$12 
Cash paid10 11 
Activity for Performance Share Units
The 2020 activity for our performance share units is as follows:
(Units in thousands)Number of
Units
Weighted-
Average Grant
Date Fair Value
Outstanding at beginning of year, nonvested411 $56.03 
Granted276 40.60 
Vested(173)(58.24)
Outstanding at end of year, nonvested514 $47.02 
v3.20.4
Retirement Plans (Tables)
12 Months Ended
Jan. 02, 2021
Retirement Benefits [Abstract]  
Components of Net Periodic Benefit Cost (Credit)
The components of net periodic benefit cost (credit) and other amounts recognized in other comprehensive income (loss) (OCI) are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
(In millions)202020192018202020192018
Net periodic benefit cost (credit)
Service cost$106 $91 $104 $$$
Interest cost293 326 306 10 10 
Expected return on plan assets(574)(556)(553)— — — 
Amortization of prior service cost (credit)11 14 15 (5)(6)(6)
Amortization of net actuarial loss (gain)185 101 153 (1)(2)(1)
Net periodic benefit cost (credit)*$21 $(24)$25 $$$
Other changes in plan assets and benefit obligations recognized in OCI
Current year actuarial loss (gain)$146 $207 $270 $(2)$11 $(22)
Current year prior service cost— 20 — — — 
Amortization of net actuarial gain (loss)(185)(101)(153)
Amortization of prior service credit (cost)(11)(14)(15)
Business disposition— — (7)— — — 
Total recognized in OCI, before taxes$(42)$92 $115 $$19 $(15)
Total recognized in net periodic benefit cost (credit) and OCI$(21)$68 $140 $$24 $(9)
* Excludes the cost associated with the defined contribution component, included in certain of our U.S.-based defined benefit pension plans, that totaled $11 million in 2020 and $13 million for both 2019 and 2018.
Changes In The Projected Benefit Obligation And In The Fair Value of Plan Assets The changes in the projected benefit obligation and in the fair value of plan assets, along with our funded status, are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
(In millions)January 2, 2021January 4, 2020January 2, 2021January 4, 2020
Change in projected benefit obligation
Projected benefit obligation at beginning of year$8,938 $7,901 $246 $250 
Service cost106 91 
Interest cost293 326 10 
Plan participants’ contributions— — 
Actuarial losses (gains)888 1,001 (2)11 
Benefits paid(429)(421)(29)(33)
Plan amendment— — — 
Foreign exchange rate changes and other29 40 — — 
Projected benefit obligation at end of year$9,833 $8,938 $230 $246 
Change in fair value of plan assets
Fair value of plan assets at beginning of year$8,129 $7,122 
Actual return on plan assets1,312 1,350 
Employer contributions37 38 
Benefits paid(429)(421)
Foreign exchange rate changes and other31 40 
Fair value of plan assets at end of year$9,080 $8,129 
Funded status at end of year$(753)$(809)$(230)$(246)
Amounts Recognized In Our Balance Sheets
Amounts recognized in our balance sheets are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
(In millions)January 2, 2021January 4, 2020January 2, 2021January 4, 2020
Non-current assets$216 $152 $— $— 
Current liabilities(28)(27)(23)(26)
Non-current liabilities(941)(934)(207)(220)
Recognized in Accumulated other comprehensive loss, pre-tax:
Net loss (gain)2,238 2,271 (23)(21)
Prior service cost (credit)52 55 (15)(20)
Pension Plans With Accumulated Benefit Obligations Exceeding The Fair Value Of Plan Assets
Pension plans with accumulated benefit obligation exceeding the fair value of plan assets are as follows:
(In millions)January 2, 2021January 4, 2020
Accumulated benefit obligation$789 $8,050 
Fair value of plan assets282 7,500 
Pension Plans With Projected Benefit Obligations Exceeding The Fair Value of Plan Assets
Pension plans with projected benefit obligation exceeding the fair value of plan assets are as follows:
(In millions)January 2, 2021January 4, 2020
Projected benefit obligation$9,333 $8,462 
Fair value of plan assets8,363 7,500 
Weighted-average Assumptions Used For Pension and Postretirement Plans
The weighted-average assumptions we use for our pension and postretirement plans are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
202020192018202020192018
Net periodic benefit cost
Discount rate3.36%4.24%3.67%3.20%4.25%3.50%
Expected long-term rate of return on assets7.55%7.55%7.58%
Rate of compensation increase3.50%3.50%3.50%
Benefit obligations at year-end
Discount rate2.62%3.36%4.24%2.35%3.20%4.25%
Rate of compensation increase3.50%3.50%3.50%
Interest crediting rate for cash balance plans5.25%5.25%5.25%
Target Allocation Ranges Our target allocation ranges are as follows:
U.S. Plan Assets
Domestic equity securities17 %to33%
International equity securities%to19%
Global equities%to17%
Debt securities27 %to38%
Real estate%to13%
Private investment partnerships%to11%
Non-U.S. Plan Assets
Equity securities55 %to75%
Debt securities25 %to45%
Real estate%to13%
Fair Value of Total Pension Plan Assets
The fair value of our pension plan assets by major category and valuation method is as follows:
January 2, 2021January 4, 2020
(In millions)Level 1Level 2Level 3Not
Subject to
Leveling
Level 1Level 2Level 3Not
Subject to
Leveling
Cash and equivalents$49 $$— $132 $18 $12 $— $174 
Equity securities:
Domestic1,591 — — 1,241 1,257 — — 1,160 
International1,221 — — 735 929 — — 780 
Mutual funds195 — — — 176 — — — 
Debt securities:
National, state and local governments482 306 — 95 414 308 — 56 
Corporate debt69 1,134 — 236 14 1,062 — 240 
Asset-backed securities— — — — — — — 18 
Private investment partnerships— — — 819 — — — 745 
Real estate— — 458 314 — — 473 293 
Total$3,607 $1,443 $458 $3,572 $2,808 $1,382 $473 $3,466 
Reconciliation for Fair Value Measurements That Use Significant Unobservable Inputs
The table below presents a reconciliation of the fair value measurements for owned real estate properties, which use significant unobservable inputs (Level 3):
(In millions)20202019
Balance at beginning of year$473 $460 
Unrealized gains (losses), net(18)
Realized gains, net
Purchases, sales and settlements, net(3)
Balance at end of year$458 $473 
Estimated Future Benefit Payments Which Reflect Expected Future Service To Be Paid By The Plans Benefit payments that we expect to pay on an undiscounted basis are as follows:
(In millions)20212022202320242025
2026-2030
Pension benefits$434 $441 $450 $459 $470 $2,460 
Postretirement benefits other than pensions24 23 22 20 19 77 
v3.20.4
Special Charges (Tables)
12 Months Ended
Jan. 02, 2021
Restructuring and Related Activities [Abstract]  
Schedule of Special Charges
Special charges recorded by segment and type of cost are as follows:
(In millions)Severance
Costs
Contract
Terminations
and Other
Asset
Impairments
Total Restructuring ChargesOther
Charges
Total
2020
Textron Aviation$31 $— $$33 $32 $65 
Industrial27 34 41 
Textron Systems11 12 14 37 — 37 
Corporate— — — 
Total special charges$73 $13 $22 $108 $39 $147 
2019
Industrial$21 $11 $$38 $— $38 
Textron Aviation25 — 29 — 29 
Corporate— — — — 
Total special charges$46 $11 $10 $67 $$72 
2018
Industrial$$18 $47 $73 $— $73 
Total special charges$$18 $47 $73 $— $73 
Schedule of Restructuring Reserve Activity
Our restructuring reserve activity is summarized below:
(In millions)Severance
Costs
Contract
Terminations
and Other
Total
Balance at December 29, 2018$$32 $40 
Provision for 2019 plan46 11 57 
Cash paid(8)(23)(31)
Foreign currency translation— (1)(1)
Balance at January 4, 2020$46 $19 $65 
Provision for 2020 COVID-19 restructuring plan73 13 86 
Cash paid(77)(11)(88)
Reclassifications*(1)(12)(13)
Foreign currency translation— 
Balance at January 2, 2021$43 $$52 
* Reclassifications include amounts classified as held for sale in connection with a business disposition described in Note 2.
v3.20.4
Income Taxes (Tables)
12 Months Ended
Jan. 02, 2021
Income Tax Disclosure [Abstract]  
Income Before Income Taxes Income before income taxes is as follows:
(In millions)202020192018
U.S.$202 $668 $557 
Non-U.S.80 274 827 
Income before income taxes$282 $942 $1,384 
Income Tax Expense For Continuing Operations
Income tax expense (benefit) is summarized as follows:
(In millions)202020192018
Current expense (benefit):
Federal$(1)$(48)$
State(76)16 
Non-U.S.57 70 101 
(20)38 113 
Deferred expense (benefit):
Federal112 60 
State(20)(5)
Non-U.S.(15)(3)(6)
(7)89 49 
Income tax expense (benefit)$(27)$127 $162 
Federal Statutory Income Tax Rate To Effective Income Tax Rate For Continuing Operations
The following table reconciles the federal statutory income tax rate to our effective income tax rate:
202020192018
U.S. Federal statutory income tax rate21.0%21.0%21.0%
Increase (decrease) resulting from:
State income tax audit settlement (net of federal impact)(18.6)
Research and development tax credits (a)(18.2)(7.6)(2.9)
Outside basis difference in assets held for sale(2.7)
State income taxes (net of federal impact)(1.2)0.3(0.1)
Non-U.S. tax rate differential and foreign tax credits (b)10.81.41.3
U.S. tax reform enactment impact(1.0)
U.S. amended returns tax rate differential(1.2)
Gain on business disposition, primarily in non-U.S. jurisdictions(5.0)
Other, net(0.7)(0.4)(1.6)
Effective income tax rate(9.6)%13.5%11.7%
(a)In 2020, the benefit of research and development tax credits as a percentage of pre-tax income was higher than prior periods primarily due to lower pre-tax income. In 2019, $61 million in benefits were recognized for additional tax credits related to prior years as a result of the completion of a research and development tax analysis.
(b)In 2020, the effective tax rate was unfavorably impacted by a $55 million inventory charge and special charges in a non-U.S. jurisdiction where tax benefits cannot be realized, along with a $10 million tax expense related to a decision to dividend cash back from select non-U.S. jurisdictions to the U.S., partially offset by a $14 million valuation allowance release.
Reconciliation of Unrecognized Tax Benefits A reconciliation of these unrecognized tax benefits is as follows:
(In millions)202020192018
Balance at beginning of year$221 $141 $182 
Additions for tax positions related to current year11 
Additions for tax positions of prior years21 74 13 
Reductions for settlements and expiration of statute of limitations(69)(1)(22)
Reductions for tax positions of prior years(1)(2)(37)
Balance at end of year$183 $221 $141 
Deferred Tax Assets and Liabilities
The significant components of our net deferred tax assets/(liabilities) are provided below:
(In millions)January 2,
2021
January 4,
2020
U.S. operating loss and tax credit carryforwards (a)$320 $235 
Obligation for pension and postretirement benefits287 289 
Accrued liabilities (b)202 214 
Deferred compensation100 95 
Operating lease liabilities 97 70 
Non-U.S. operating loss and tax credit carryforwards (c)65 52 
Property, plant and equipment, principally depreciation(199)(153)
Amortization of goodwill and other intangibles(171)(160)
Valuation allowance on deferred tax assets(157)(145)
Operating lease right-of-use assets(95)(68)
Other leasing transactions, principally leveraged leases(79)(80)
Prepaid pension benefits(44)(29)
Other, net16 (51)
Deferred taxes, net$342 $269 
(a)At January 2, 2021, U.S. operating loss and tax credit carryforward benefits of $283 million expire through 2040 if not utilized and $37 million may be carried forward indefinitely.
(b)Accrued liabilities include warranty reserves, self-insured liabilities and interest.
(c)At January 2, 2021, non-U.S. operating loss and tax credit carryforward benefits of $29 million expire through 2040 if not utilized and $36 million may be carried forward indefinitely.
The following table presents the breakdown of our deferred taxes:
(In millions)January 2,
2021
January 4,
2020
Manufacturing group:
Deferred tax assets, net of valuation allowance$423 $341 
Deferred tax liabilities(19)(4)
Finance group – Deferred tax liabilities(62)(68)
Net deferred tax asset$342 $269 
v3.20.4
Supplemental Cash Flow Information (Tables)
12 Months Ended
Jan. 02, 2021
Supplemental Cash Flow Elements [Abstract]  
Cash payments and receipts
Our cash payments and receipts are as follows:
(In millions)202020192018
Interest paid:
Manufacturing group$139 $138 $132 
Finance group20 23 25 
Net taxes paid:
Manufacturing group34 120 129 
Finance group17 
v3.20.4
Summary of Significant Accounting Policies - Principle of Consolidation and Financial Statement Presentation (Details)
12 Months Ended
Jan. 02, 2021
borrowingGroup
Accounting Policies [Abstract]  
Number of borrowing groups 2
v3.20.4
Summary of Significant Accounting Policies - Revenue Recognition (Details)
12 Months Ended
Jan. 02, 2021
U. S. Government  
Revenue Recognition  
Contract with U.S. Government, percent of total revenues 30.00%
Fixed-price and fixed-price incentive contracts | U. S. Government  
Revenue Recognition  
Percentage of revenue under fixed-price and fixed-price incentive contracts 75.00%
Maximum | Performance-based | U. S. Government  
Revenue Recognition  
Percentage of contract price received for performance based payments on US Government Contracts 90.00%
Maximum | Progress payments | U. S. Government  
Revenue Recognition  
Percentage of costs incurred representing progress payments on US Government Contracts 80.00%
Commercial Contract | Minimum  
Revenue Recognition  
Period of warranty programs 1 year
Commercial Contract | Maximum  
Revenue Recognition  
Period of warranty programs 5 years
v3.20.4
Summary of Significant Accounting Policies - Finance Revenues (Details)
12 Months Ended
Jan. 02, 2021
Minimum | Nonperforming  
Revenue Recognition  
Number of months of contractual delinquency to classify accounts as nonaccrual unless such collection is not doubtful 3 months
v3.20.4
Summary of Significant Accounting Policies - Contracts Estimates (Details) - Cumulative catch-up method - USD ($)
$ / shares in Units, $ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Use of Estimates      
Cumulative catch-up adjustments $ 72 $ 91 $ 196
Change in accounting estimate financial effect increase in net income $ 55 $ 69 $ 149
Change in accounting estimate financial effect increase in income, per share (in dollars per share) $ 0.24 $ 0.30 $ 0.59
Revenue recognized from performance obligations satisfied in prior periods $ 77 $ 97 $ 190
Gross favorable adjustments 148 173 249
Gross favorable adjustment related to Bell segment   145  
Gross unfavorable adjustments $ (76) $ (82) $ (53)
v3.20.4
Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details)
12 Months Ended
Jan. 02, 2021
Goodwill and Intangible Assets  
Gross intangible assets amortized based on the cash flow streams 86.00%
v3.20.4
Summary of Significant Accounting Policies - Environmental Liabilities and Asset Retirement Obligations (Details)
$ in Millions
Jan. 02, 2021
USD ($)
Environmental Liabilities and Asset Retirement Obligations  
Asset retirement obligations $ 0
v3.20.4
Summary of Significant Accounting Policies - Research and Development Costs (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Research and Development Costs      
Research and development costs $ 549.0 $ 647.0 $ 643.0
v3.20.4
Business Dispositions (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Jul. 02, 2018
Apr. 04, 2021
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Net proceeds from business disposition     $ 0.0 $ 0.0 $ 807.0
Disposal Group, Held-for-sale, Not Discontinued Operations | TRU Non-US          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Other current assets classified as held for sale     78.0    
Other current liabilities classified as held for sale     $ 77.0    
Disposal Group, Held-for-sale, Not Discontinued Operations | TRU Non-US | Subsequent Event | Forecast          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
After tax gain   $ 10.0      
Disposition of businesses | Tools and Test Equipment          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Net proceeds from business disposition $ 807.0        
After tax gain $ 419.0        
v3.20.4
Goodwill and Intangible Assets - Goodwill (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Disposal Group, Held-for-sale, Not Discontinued Operations    
Changes in the carrying amount of goodwill    
Goodwill classified as held for sale $ 12  
Manufacturing group    
Changes in the carrying amount of goodwill    
Beginning Balance 2,150 $ 2,218
Disposition   (71)
Acquisition 8 4
Reclassifications (12)  
Foreign currency translation 11 (1)
Ending Balance 2,157 2,150
Manufacturing group | Textron Aviation    
Changes in the carrying amount of goodwill    
Beginning Balance 614 614
Disposition   0
Acquisition 4 0
Reclassifications 12  
Foreign currency translation 1 0
Ending Balance 631 614
Manufacturing group | Bell    
Changes in the carrying amount of goodwill    
Beginning Balance 31 31
Disposition   0
Acquisition 4 0
Reclassifications 0  
Foreign currency translation 0 0
Ending Balance 35 31
Manufacturing group | Textron Systems    
Changes in the carrying amount of goodwill    
Beginning Balance 1,033 1,100
Disposition   (71)
Acquisition 0 4
Reclassifications (24)  
Foreign currency translation 0 0
Ending Balance 1,009 1,033
Manufacturing group | Industrial    
Changes in the carrying amount of goodwill    
Beginning Balance 472 473
Disposition   0
Acquisition 0 0
Reclassifications 0  
Foreign currency translation 10 (1)
Ending Balance $ 482 $ 472
v3.20.4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Intangible assets    
Gross Carrying Amount $ 1,084 $ 1,143
Accumulated Amortization (595) (554)
Net 489 589
Indefinite-lived intangible assets    
Impairment charge $ 47  
Patents and technology    
Intangible assets    
Weighted-Average Amortization Period (in years) 14 years  
Gross Carrying Amount $ 484 501
Accumulated Amortization (263) (242)
Net $ 221 259
Trade names and trademarks    
Intangible assets    
Weighted-Average Amortization Period (in years) 14 years  
Gross Carrying Amount $ 182 223
Accumulated Amortization (8) (8)
Net $ 174 215
Customer relationships and contractual agreements    
Intangible assets    
Weighted-Average Amortization Period (in years) 15 years  
Gross Carrying Amount $ 412 413
Accumulated Amortization (318) (298)
Net $ 94 115
Other    
Intangible assets    
Weighted-Average Amortization Period (in years) 4 years  
Gross Carrying Amount $ 6 6
Accumulated Amortization (6) (6)
Net 0 0
Trade names and trademarks    
Indefinite-lived intangible assets    
Indefinite-lived intangible assets $ 169 $ 208
v3.20.4
Goodwill and Intangible Assets - Amortization expense (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Goodwill and Intangible Assets Disclosure [Abstract]      
Total amortization expense $ 54 $ 59 $ 66
2021 51    
2022 51    
2023 35    
2024 32    
2025 $ 30    
v3.20.4
Accounts Receivable and Finance Receivables - Accounts Receivable (Details) - Manufacturing group - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Accounts Receivable    
Accounts receivable, gross $ 823 $ 950
Allowance for doubtful accounts (36) (29)
Total accounts receivable, net 787 921
Commerical    
Accounts Receivable    
Accounts receivable, gross 668 835
U. S. Government    
Accounts Receivable    
Accounts receivable, gross $ 155 $ 115
v3.20.4
Accounts Receivable and Finance Receivables - Finance Receivables (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Finance Receivables    
Finance receivables $ 779 $ 707
Allowance for losses (35) (25)
Total finance receivables, net $ 744 $ 682
v3.20.4
Accounts Receivable and Finance Receivables - Finance Receivables, Narrative (Details)
$ in Millions
12 Months Ended
Jan. 02, 2021
USD ($)
customer
Jan. 04, 2020
USD ($)
Financing Receivable, Allowance for Credit Loss [Line Items]    
Average balance of finance receivables $ 1.6  
Percentage of internationally based finance receivables 59.00%  
Percentage of US based finance receivables 41.00%  
Pledged assets finance receivable pledged as collateral $ 125.0 $ 148.0
Value of debt collateralized $ 68.0 $ 87.0
Number customers with modified finance receivable contracts | customer 94  
Outstanding balance $ 278.0  
Number of customers with modified contracts | customer 32  
Finance receivable categorized as troubled debt restructuring $ 129.0  
Number of customer defaults related to finance receivables | customer 2  
Performing    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Financing receivables originated since the beginning of 2019 48.00%  
Financing receivables originated from 2016 to 2018 26.00%  
Watchlist    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Financing receivables originated since the beginning of 2019 9.00%  
Financing receivables originated from 2016 to 2018 47.00%  
Nonperforming    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Payment relief periods 6 months  
Nonperforming | Nonaccrual    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Financing receivables originated since the beginning of 2019 25.00%  
Financing receivables originated from 2016 to 2018 36.00%  
Minimum    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Contractual terms 5 years  
Amortization period 8 years  
Minimum | Nonperforming    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Number of months of contractual delinquency to classify accounts as nonaccrual unless such collection is not doubtful 3 months  
Maximum    
Financing Receivable, Allowance for Credit Loss [Line Items]    
Contractual terms 12 years  
Amortization period 15 years  
v3.20.4
Accounts Receivable and Finance Receivables - Finance Receivables By Delinquency Aging Category (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Finance receivables held for investment by delinquency aging    
Finance receivables $ 779 $ 707
60+ days contractual delinquency as a percentage of finance receivables 3.72% 2.40%
Less than 31 days past due    
Finance receivables held for investment by delinquency aging    
Finance receivables $ 738 $ 637
31-60 days past due    
Finance receivables held for investment by delinquency aging    
Finance receivables 12 53
61-90 days past due    
Finance receivables held for investment by delinquency aging    
Finance receivables 11 7
Over 90 days past due    
Finance receivables held for investment by delinquency aging    
Finance receivables 18 10
Performing    
Finance receivables held for investment by delinquency aging    
Finance receivables $ 612 $ 664
Nonperforming    
Finance receivables held for investment by delinquency aging    
Nonaccrual as a percentage of finance receivables 11.94% 5.52%
Nonperforming | Watchlist    
Finance receivables held for investment by delinquency aging    
Finance receivables $ 74 $ 4
Nonperforming | Nonaccrual    
Finance receivables held for investment by delinquency aging    
Finance receivables $ 93 $ 39
v3.20.4
Accounts Receivable and Finance Receivables - Summary of Impaired Finance Receivables, Excluding Leveraged Leases, and The Average Recorded investment (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Summary of impaired finance receivables, excluding leveraged leases, and the average recorded investment    
Impaired loans with specific allowance for losses $ 46 $ 17
Impaired loans with no specific allowance for losses 117 22
Total 163 39
Unpaid principal balance 175 50
Allowance for losses on impaired loans 7 3
Average recorded investment $ 126 $ 40
v3.20.4
Accounts Receivable and Finance Receivables - Allowance for Losses On Finance Receivables On An Individual And An A Collective Basis And Rollforward of The Allowance For Losses on Finance Receivables (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Finance receivables    
Leveraged leases $ 95 $ 104
Allowance for losses    
Allowance based on collective evaluation 28 22
Allowance based on individual evaluation 7 3
Finance receivables evaluated collectively 521 564
Finance receivables evaluated individually $ 163 $ 39
v3.20.4
Inventories (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Inventories    
Finished goods $ 1,228 $ 1,557
Work in process 1,455 1,616
Raw materials and components 830 896
Total 3,513 4,069
Inventories by LIFO method 2,200 2,500
LIFO carrying value at current cost $ 507 $ 475
v3.20.4
Property, Plant and Equipment, Net (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Manufacturing group's property, plant and equipment, net      
Total $ 2,516 $ 2,527  
Manufacturing group      
Manufacturing group's property, plant and equipment, net      
Property, plant and equipment, gross 7,212 6,932  
Accumulated depreciation and amortization (4,696) (4,405)  
Total 2,516 2,527  
Property plant and equipment net      
Depreciation expense 325 346 $ 358
Manufacturing group | Land, buildings and improvements      
Manufacturing group's property, plant and equipment, net      
Property, plant and equipment, gross $ 2,031 1,991  
Manufacturing group | Land, buildings and improvements | Minimum      
Manufacturing group's property, plant and equipment, net      
Useful Lives (in years) 2 years    
Manufacturing group | Land, buildings and improvements | Maximum      
Manufacturing group's property, plant and equipment, net      
Useful Lives (in years) 40 years    
Manufacturing group | Machinery and equipment      
Manufacturing group's property, plant and equipment, net      
Property, plant and equipment, gross $ 5,181 $ 4,941  
Manufacturing group | Machinery and equipment | Minimum      
Manufacturing group's property, plant and equipment, net      
Useful Lives (in years) 2 years    
Manufacturing group | Machinery and equipment | Maximum      
Manufacturing group's property, plant and equipment, net      
Useful Lives (in years) 20 years    
v3.20.4
Other Assets (Details) - USD ($)
3 Months Ended 12 Months Ended
Apr. 04, 2020
Jan. 04, 2020
Jan. 02, 2021
Equity method investment      
Proceeds from borrowings against corporate owned life insurance $ 377,000,000    
Life insurance borrowings against corporate or bank owned     $ 0
FlightSafety Textron Aviation Training LLC | Textron Systems      
Equity method investment      
Investment (in percentage)   30.00%  
Contributed assets   $ 69,000,000  
Allocated goodwill   71,000,000  
Amount of net pre-tax gain subject to post-closing adjustments   $ 18,000,000  
v3.20.4
Other Current Liabilities - Accrued liabilities of Manufacturing group (Details) - Manufacturing group - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Other Liabilities    
Contract liabilities $ 758 $ 715
Salaries, wages and employer taxes 381 362
Current portion of warranty and product maintenance liabilities 133 147
Other 713 683
Total $ 1,985 $ 1,907
v3.20.4
Other Current Liabilities - Changes in warranty liability (Details) - Manufacturing group - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]      
Balance at beginning of year $ 141 $ 149 $ 164
Provision 54 68 72
Settlements (64) (70) (78)
Adjustments (12) (6) (9)
Balance at end of year $ 119 $ 141 $ 149
v3.20.4
Leases - Narrative (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Leases [Abstract]    
Remaining lease term 28 years  
Renewal term 25 years  
Operating lease cost $ 61 $ 64
Cash paid for operating lease liabilities $ 60 62
Operating lease - option to extend true  
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability $ 119 $ 25
v3.20.4
Leases - Balance Sheet and Other Information (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Operating leases:    
Other assets $ 349 $ 277
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] us-gaap:OtherAssets us-gaap:OtherAssets
Other current liabilities $ 47 $ 48
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] us-gaap:OtherLiabilitiesCurrent us-gaap:OtherLiabilitiesCurrent
Other liabilities $ 306 $ 233
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] us-gaap:OtherLiabilitiesNoncurrent us-gaap:OtherLiabilitiesNoncurrent
Finance leases:    
Property, plant and equipment, net $ 35 $ 39
Current portion of long-term debt $ 2 $ 2
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] us-gaap:LongTermDebtCurrent us-gaap:LongTermDebtCurrent
Long-term debt $ 38 $ 40
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] us-gaap:LongTermDebtNoncurrent us-gaap:LongTermDebtNoncurrent
Weighted-average remaining lease term (in years)    
Operating leases 11 years 7 months 6 days 10 years 2 months 12 days
Finance leases 16 years 9 months 18 days 17 years 10 months 24 days
Weighted-average discount rate    
Operating leases 4.17% 4.42%
Finance leases 4.35% 4.37%
v3.20.4
Leases - Maturity of Lease Liabilities (Details)
$ in Millions
Jan. 02, 2021
USD ($)
Operating Leases  
2021 $ 59
2022 53
2023 44
2024 35
2025 33
Thereafter 232
Total lease payments 456
Less: interest (103)
Total lease liabilities 353
Finance Leases  
2021 4
2022 4
2023 4
2024 4
2025 5
Thereafter 42
Total lease payments 63
Total lease liabilities (23)
Total lease liabilities $ 40
v3.20.4
Debt and Credit Facilities - Summary of Debt (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Manufacturing group    
Debt    
Long-term debt $ 3,707 $ 3,124
Less: Current portion of long-term debt (509) (561)
Total Long-term debt $ 3,198 $ 2,563
Manufacturing group | 6.625% due 2020    
Debt    
Interest rate 6.625%  
Manufacturing group | Variable-rate notes due 2020 (2.45%)    
Debt    
Weighted-average interest rate   2.45%
Manufacturing group | 3.65% due 2021    
Debt    
Interest rate 3.65%  
Manufacturing group | 4.30% due 2024    
Debt    
Interest rate 4.30%  
Manufacturing group | 3.875% due 2025    
Debt    
Interest rate 3.875%  
Manufacturing group | 4.00% due 2026    
Debt    
Interest rate 4.00%  
Manufacturing group | 3.65% due 2027    
Debt    
Interest rate 3.65%  
Manufacturing group | 3.375% due 2028    
Debt    
Interest rate 3.375%  
Manufacturing group | 3.90% due 2029    
Debt    
Interest rate 3.90%  
Manufacturing group | 3.00% due 2030    
Debt    
Interest rate 3.00%  
Manufacturing group | 2.45% due 2031    
Debt    
Interest rate 2.45%  
Manufacturing group | Other (weighted-average rate of 2.60% and 3.01%, respectively)    
Debt    
Long-term debt $ 57 $ 75
Weighted-average interest rate 2.60% 3.01%
Manufacturing group | Medium-term Notes | 6.625% due 2020    
Debt    
Long-term debt $ 0 $ 199
Manufacturing group | Medium-term Notes | Variable-rate notes due 2020 (2.45%)    
Debt    
Long-term debt 0 350
Manufacturing group | Medium-term Notes | 3.65% due 2021    
Debt    
Long-term debt 250 250
Manufacturing group | Medium-term Notes | 5.95% due 2021    
Debt    
Long-term debt 250 250
Manufacturing group | Medium-term Notes | 4.30% due 2024    
Debt    
Long-term debt 350 350
Manufacturing group | Medium-term Notes | 3.875% due 2025    
Debt    
Long-term debt 350 350
Manufacturing group | Medium-term Notes | 4.00% due 2026    
Debt    
Long-term debt 350 350
Manufacturing group | Medium-term Notes | 3.65% due 2027    
Debt    
Long-term debt 350 350
Manufacturing group | Medium-term Notes | 3.375% due 2028    
Debt    
Long-term debt 300 300
Manufacturing group | Medium-term Notes | 3.90% due 2029    
Debt    
Long-term debt 300 300
Manufacturing group | Medium-term Notes | 3.00% due 2030    
Debt    
Long-term debt 650 0
Manufacturing group | Medium-term Notes | 2.45% due 2031    
Debt    
Long-term debt 500 0
Finance group    
Debt    
Long-term debt $ 662 686
Finance group | 5.95% due 2021    
Debt    
Interest rate 5.95%  
Finance group | 2.88% note due 2022    
Debt    
Long-term debt $ 150 150
Interest rate 2.88%  
Finance group | Fixed-rate notes due 2020-2028 (weighted-average rate of 3.25% and 3.20%, respectively)*    
Debt    
Long-term debt $ 51 $ 65
Weighted-average interest rate 3.25% 3.20%
Finance group | Variable-rate notes due 2020-2027 (weighted-average rate of 1.73% and  3.31%, respectively)*    
Debt    
Long-term debt $ 17 $ 22
Weighted-average interest rate 1.73% 3.31%
Finance group | Fixed-to-Floating Rate Junior Subordinated Notes (1.96% and 3.64%, respectively)    
Debt    
Long-term debt $ 294 $ 299
Weighted-average interest rate 1.96% 3.64%
v3.20.4
Debt and Credit Facilities - Future Required Payments on Debt (Details)
$ in Millions
Jan. 02, 2021
USD ($)
Required payments during the next five years on debt outstanding  
2021 $ 522
2022 324
2023 24
2024 376
2025 362
Manufacturing group  
Required payments during the next five years on debt outstanding  
2021 509
2022 8
2023 8
2024 361
2025 357
Finance group  
Required payments during the next five years on debt outstanding  
2021 13
2022 316
2023 16
2024 15
2025 $ 5
v3.20.4
Debt and Credit Facilities - Additional Information (Details)
12 Months Ended
Oct. 18, 2019
USD ($)
borrowingGroup
Jan. 02, 2021
USD ($)
Jan. 04, 2020
USD ($)
Dec. 29, 2018
USD ($)
Debt        
Minimum fixed charge coverage required to be maintained by subsidiary   125.00%    
Minimum shareholders equity required to be maintained by subsidiary   $ 125,000,000    
Cash paid to TFC to maintain compliance with covenants   $ 0 $ 0 $ 0
Finance group | Fixed-to-Floating Rate Junior Subordinated Notes (1.96% and 3.64%, respectively)        
Debt        
Weighted-average interest rate   1.96% 3.64%  
Finance group | Variable-rate note due 2022 (1.70% and 2.87%, respectively)        
Debt        
Weighted-average interest rate   1.70% 2.87%  
Fixed-to-Floating Rate Junior Subordinated Notes | Finance group | Fixed-to-Floating Rate Junior Subordinated Notes (1.96% and 3.64%, respectively)        
Debt        
Debt instrument, face amount   $ 294,000,000    
Debt instrument, maturity date   Feb. 15, 2067    
Debt Instrument call date latest   Feb. 15, 2042    
Repurchase amount   $ 5,000,000    
Interest rate   6.00%    
Debt instrument duration   February 15, 2017    
Debt instrument description of variable rate basis after specified term at fixed rate   three-month London Interbank Offered Rate    
Fixed-to-Floating Rate Junior Subordinated Notes | Finance group | Fixed-to-Floating Rate Junior Subordinated Notes (1.96% and 3.64%, respectively) | London Interbank Offered Rate (LIBOR)        
Debt        
Variable base rate   1.735%    
Senior Unsecured Revolving Credit Facility, Expiring October 2024 | Line of Credit        
Debt        
Maximum borrowing capacity $ 1,000,000,000.0      
Portion available for issuance of letters of credit against facility 100,000,000      
Borrowing capacity Textron may elect to increase to $ 1,300,000,000      
Number of one-year extensions | borrowingGroup 2      
Extension period (in years) 1 year      
Amount borrowed against facility   $ 0 $ 0  
Letter of Credit | Line of Credit        
Debt        
Outstanding letters of credit   $ 9,000,000 $ 10,000,000  
v3.20.4
Derivative Instruments and Fair Value Measurements - Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Manufacturing group    
Fair value of derivative instruments    
Forward exchange contracts maximum maturity period 3 years  
Manufacturing group | Foreign currency exchange contracts | Cash flow hedge    
Fair value of derivative instruments    
Notional amounts $ 318 $ 342
Manufacturing group | Foreign currency exchange contracts | Level 2 | Cash flow hedge    
Fair value of derivative instruments    
Derivative asset, fair value 5 2
Derivative liability, fair value 2 $ 2
Finance group | Interest rate swap | Cash flow hedge    
Fair value of derivative instruments    
Notional amounts 294  
Derivative liability, fair value $ 4  
v3.20.4
Derivative Instruments and Fair Value Measurements - Assets and Liabilities Not Recorded at Fair Value (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Manufacturing group | Carrying Value    
Financial instruments not reflected at fair value    
Debt $ (3,690) $ (3,097)
Manufacturing group | Estimated Fair Value    
Financial instruments not reflected at fair value    
Debt (3,986) (3,249)
Finance group | Carrying Value    
Financial instruments not reflected at fair value    
Debt (662) (686)
Finance receivables, excluding leases 549 493
Finance group | Estimated Fair Value    
Financial instruments not reflected at fair value    
Debt (587) (634)
Finance receivables, excluding leases $ 599 $ 527
v3.20.4
Shareholders' Equity - Capital Stock (Details) - $ / shares
shares in Thousands
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Equity [Abstract]      
Preferred stock shares authorized (in shares) 15,000    
Preferred stock par value (in dollars per share) $ 0.01    
Common stock (in shares) 500,000    
Common stock par value (in dollars per share) $ 0.125    
Increase (Decrease) in Stockholders' Equity [Roll Forward]      
Balance at beginning of year (in shares) 227,956 235,621 261,471
Share repurchases (in shares) (4,145) (10,011) (29,094)
Share-based compensation activity (in shares) 2,633 2,346 3,244
Balance at end of year (in shares) 226,444 227,956 235,621
v3.20.4
Shareholders' Equity - Earnings Per Share (Details) - shares
shares in Thousands
3 Months Ended 12 Months Ended
Jan. 02, 2021
Oct. 03, 2020
Jul. 04, 2020
Apr. 04, 2020
Jan. 04, 2020
Sep. 28, 2019
Jun. 29, 2019
Mar. 30, 2019
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Equity [Abstract]                      
Basic weighted-average shares outstanding (in shares) 228,666 228,918 228,247 228,311 228,653 229,755 232,013 234,839 228,536 231,315 250,196
Dilutive effect of stock options (in shares)                 443 1,394 3,041
Diluted weighted-average shares outstanding (in shares) 229,365 229,279 228,247 228,927 229,790 231,097 233,545 236,437 228,979 232,709 253,237
Anti-dilutive effect of weighted average shares (in shares)                 7,600 4,300 1,300
v3.20.4
Shareholders' Equity - Components of Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Components of Accumulated Other Comprehensive Loss    
Beginning Balance $ 5,518 $ 5,192
Ending Balance 5,845 5,518
Pension and Postretirement Benefits Adjustments    
Components of Accumulated Other Comprehensive Loss    
Beginning Balance (1,811) (1,727)
Other comprehensive loss before reclassifications (115) (166)
Reclassified from Accumulated other comprehensive loss 146 82
Ending Balance (1,780) (1,811)
Foreign Currency Translation Adjustments    
Components of Accumulated Other Comprehensive Loss    
Beginning Balance (36) (32)
Other comprehensive loss before reclassifications 78 (4)
Reclassified from Accumulated other comprehensive loss 0 0
Ending Balance 42 (36)
Deferred Gains (Losses) on Hedge Contracts    
Components of Accumulated Other Comprehensive Loss    
Beginning Balance 0 (3)
Other comprehensive loss before reclassifications 3 5
Reclassified from Accumulated other comprehensive loss (4) (2)
Ending Balance (1) 0
Accumulated Other Comprehensive Loss    
Components of Accumulated Other Comprehensive Loss    
Beginning Balance (1,847) (1,762)
Other comprehensive loss before reclassifications (34) (165)
Reclassified from Accumulated other comprehensive loss 142 80
Ending Balance $ (1,739) $ (1,847)
v3.20.4
Shareholders' Equity - Before and After Tax Components of Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Pension and postretirement benefits adjustments, pre-tax:      
Unrealized gains (losses), pre-tax $ (144) $ (218) $ (248)
Amortization of net actuarial loss, pre-tax 184 99 152
Amortization of prior service cost, pre-tax 6 8 9
Recognition of prior service credit cost, pre-tax (8) 0 (20)
Business disposition, pre-tax 0 0 7
Pension and postretirement benefits adjustments, net, pre-tax 38 (111) (100)
Pension and postretirement benefits adjustments, tax:      
Unrealized gains (losses), tax (expense) benefit 35 52 58
Amortization of net actuarial loss, tax (expense) benefit (43) (23) (35)
Amortization of prior service cost, tax (expense) benefit (1) (2) (2)
Recognition of prior service credit, tax (expense) benefit 2 0 5
Business disposition, tax (expense) benefit 0 0 0
Pension and postretirement benefits adjustments, net, tax (expense) benefit (7) 27 26
Pension and postretirement benefits adjustments, after-tax:      
Unrealized gains (losses), after-tax 109 166 190
Amortization of net actuarial loss, after-tax 141 76 117
Amortization of prior service cost, after-tax 5 6 7
Recognition of prior service credit, after-tax (6) 0 (15)
Business disposition, after-tax 0 0 7
Pension and postretirement benefits adjustments, net, after-tax 31 (84) (74)
Foreign currency translation adjustments, pre-tax:      
Foreign currency translation adjustments, pre-tax 81 (6) (46)
Business disposition, pre-tax 0 0 6
Foreign currency translation adjustments, net, pre-tax 81 (6) (40)
Foreign currency translation adjustments, tax:      
Foreign currency translation adjustments, tax (expense) benefit (3) 2 (3)
Business disposition, tax (expense) benefit 0 0 0
Foreign currency translation adjustments, net, tax (expense) benefit (3) 2 (3)
Foreign currency translation adjustments, after-tax:      
Foreign currency translation adjustments, after-tax 78 (4) (49)
Business disposition, after-tax 0 0 6
Foreign currency translation adjustments, net of reclassifications 78 (4) (43)
Deferred gains (losses) on hedge contracts, pre-tax:      
Current deferrals, pre-tax 4 8 (8)
Reclassification adjustments, pre-tax (6) (2) (7)
Deferred gains (losses) on hedge contracts, net, pre-tax (2) 6 (15)
Other comprehensive income (loss), pre-tax 117 (111) (155)
Deferred gains (losses) on hedge contracts, tax:      
Current deferrals, tax (expense) benefit (1) (3) 0
Reclassification adjustments, tax (expense) benefit 2 0 2
Deferred gains (losses) on hedge contracts, net, tax (expense) benefit 1 (3) 2
Other comprehensive income (loss), tax (expense) benefit (9) 26 25
Deferred gains (losses) on hedge contracts, after-tax:      
Current deferrals, after-tax 3 5 (8)
Reclassification adjustments, after-tax 4 2 5
Deferred gains (losses) on hedge contracts, net, after-tax (1) 3 (13)
Total other comprehensive income (loss), net of tax $ 108 $ (85) $ (130)
v3.20.4
Segment and Geographic Data (Details)
12 Months Ended
Jan. 02, 2021
businessSegment
Operating and reportable business segments  
Number of business operating segments 5
Number of reportable business segments 5
v3.20.4
Segment and Geographic Data - Revenue by Segments And Reconciliation Of Segment Profit To Income Before Income Taxes (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Jan. 02, 2021
Oct. 03, 2020
Jul. 04, 2020
Apr. 04, 2020
Jan. 04, 2020
Sep. 28, 2019
Jun. 29, 2019
Mar. 30, 2019
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Revenues                      
Total revenues $ 3,667 $ 2,735 $ 2,472 $ 2,777 $ 4,035 $ 3,259 $ 3,227 $ 3,109 $ 11,651 $ 13,630 $ 13,972
Reconciliation of segment profit to income from continuing operations before income taxes                      
Special charges (23) (7) (78) (39) (72) 0 0 0 (147) (72) (73)
Inventory Charge 0 0 (55) 0 0 0 0 0      
Income before income taxes                 282 942 1,384
Operating Segment                      
Revenues                      
Total revenues                 11,651 13,630 13,972
Segment Profit                      
Segment (Profit)                 751 1,270 1,267
Reconciling Items                      
Reconciliation of segment profit to income from continuing operations before income taxes                      
Corporate expenses and other, net                 (122) (110) (119)
Special charges         (72)       (147)   (73)
Inventory Charge                 (55) 0 0
Gain on business disposition                 0 0 444
Manufacturing group | Reconciling Items                      
Reconciliation of segment profit to income from continuing operations before income taxes                      
Interest expense, net for Manufacturing group (36) (38) (37) (34) (36) (39) (36) (35) (145) (146) (135)
Textron Aviation                      
Revenues                      
Total revenues                 3,974 5,187 4,971
Textron Aviation | Operating Segment                      
Reconciliation of segment profit to income from continuing operations before income taxes                      
Special charges                 (65) (29)  
Textron Aviation | Manufacturing group                      
Revenues                      
Total revenues 1,560 795 747 872 1,729 1,201 1,123 1,134      
Textron Aviation | Manufacturing group | Operating Segment                      
Revenues                      
Total revenues                 3,974 5,187 4,971
Segment Profit                      
Segment (Profit)                 16 449 445
Bell                      
Revenues                      
Total revenues                 3,309 3,254 3,180
Bell | Manufacturing group                      
Revenues                      
Total revenues 871 793 822 823 961 783 771 739      
Bell | Manufacturing group | Operating Segment                      
Revenues                      
Total revenues                 3,309 3,254 3,180
Segment Profit                      
Segment (Profit)                 462 435 425
Textron Systems                      
Revenues                      
Total revenues                 1,313 1,325 1,464
Textron Systems | Operating Segment                      
Reconciliation of segment profit to income from continuing operations before income taxes                      
Special charges                 (37)    
Textron Systems | Manufacturing group                      
Revenues                      
Total revenues 357 302 326 328 399 311 308 307      
Textron Systems | Manufacturing group | Operating Segment                      
Revenues                      
Total revenues                 1,313 1,325 1,464
Segment Profit                      
Segment (Profit)                 152 141 156
Industrial                      
Revenues                      
Total revenues                 3,000 3,798 4,291
Industrial | Operating Segment                      
Reconciliation of segment profit to income from continuing operations before income taxes                      
Special charges                 (41) (38) (73)
Industrial | Manufacturing group                      
Revenues                      
Total revenues $ 866 $ 832 $ 562 $ 740 $ 927 $ 950 $ 1,009 $ 912      
Industrial | Manufacturing group | Operating Segment                      
Revenues                      
Total revenues                 3,000 3,798 4,291
Segment Profit                      
Segment (Profit)                 111 217 218
Finance                      
Revenues                      
Total revenues                 55 66 66
Finance | Finance group | Operating Segment                      
Revenues                      
Total revenues                 55 66 66
Segment Profit                      
Segment (Profit)                 $ 10 $ 28 $ 23
v3.20.4
Segment and Geographic Data - Assets, Capital Expenditures and Depreciation and Amortization by Segment (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Other Information by Segment      
Assets $ 15,443 $ 15,018  
Capital Expenditures 317 339 $ 369
Depreciation and Amortization 391 416 437
Manufacturing group      
Other Information by Segment      
Assets 14,505 14,054  
Capital Expenditures 317 339 369
Depreciation and Amortization 386 410 429
Corporate      
Other Information by Segment      
Assets 2,587 1,446  
Capital Expenditures 2 1 1
Depreciation and Amortization 12 10 10
Textron Aviation | Operating Segment | Manufacturing group      
Other Information by Segment      
Assets 4,380 4,692  
Capital Expenditures 94 122 132
Depreciation and Amortization 138 137 145
Bell | Operating Segment | Manufacturing group      
Other Information by Segment      
Assets 2,984 2,783  
Capital Expenditures 117 81 65
Depreciation and Amortization 91 107 108
Textron Systems | Operating Segment | Manufacturing group      
Other Information by Segment      
Assets 2,054 2,352  
Capital Expenditures 42 38 39
Depreciation and Amortization 43 48 54
Industrial | Operating Segment | Manufacturing group      
Other Information by Segment      
Assets 2,500 2,781  
Capital Expenditures 62 97 132
Depreciation and Amortization 102 108 112
Finance | Operating Segment      
Other Information by Segment      
Assets 938 964  
Capital Expenditures 0 0 0
Depreciation and Amortization $ 5 $ 6 $ 8
v3.20.4
Segment and Geographic Data - Selected Financial Information by Geographic Area (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Jan. 02, 2021
Oct. 03, 2020
Jul. 04, 2020
Apr. 04, 2020
Jan. 04, 2020
Sep. 28, 2019
Jun. 29, 2019
Mar. 30, 2019
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Revenues from External Customers and Long-Lived Assets                      
Revenues $ 3,667 $ 2,735 $ 2,472 $ 2,777 $ 4,035 $ 3,259 $ 3,227 $ 3,109 $ 11,651 $ 13,630 $ 13,972
Property, plant and equipment, net 2,516       2,527       2,516 2,527  
United States                      
Revenues from External Customers and Long-Lived Assets                      
Revenues                 7,943 8,963 8,667
Property, plant and equipment, net 2,068       2,054       2,068 2,054  
Europe                      
Revenues from External Customers and Long-Lived Assets                      
Revenues                 1,336 1,986 2,187
Property, plant and equipment, net 237       244       237 244  
Asia and Australia                      
Revenues from External Customers and Long-Lived Assets                      
Revenues                 1,106 1,070 1,253
Property, plant and equipment, net 95       97       95 97  
Other international                      
Revenues from External Customers and Long-Lived Assets                      
Revenues                 1,266 1,611 $ 1,865
Property, plant and equipment, net $ 116       $ 132       $ 116 $ 132  
v3.20.4
Revenues - Disaggregation of Revenues (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Jan. 02, 2021
Oct. 03, 2020
Jul. 04, 2020
Apr. 04, 2020
Jan. 04, 2020
Sep. 28, 2019
Jun. 29, 2019
Mar. 30, 2019
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Revenues                      
Revenues $ 3,667 $ 2,735 $ 2,472 $ 2,777 $ 4,035 $ 3,259 $ 3,227 $ 3,109 $ 11,651 $ 13,630 $ 13,972
United States                      
Revenues                      
Revenues                 7,943 8,963 8,667
Europe                      
Revenues                      
Revenues                 1,336 1,986 2,187
Asia and Australia                      
Revenues                      
Revenues                 1,106 1,070 1,253
Other international                      
Revenues                      
Revenues                 1,266 1,611 1,865
Commercial                      
Revenues                      
Revenues                 8,202 10,394 10,622
U.S. Government                      
Revenues                      
Revenues                 3,449 3,236 3,350
Textron Aviation                      
Revenues                      
Revenues                 3,974 5,187 4,971
Textron Aviation | United States                      
Revenues                      
Revenues                 2,825 3,708 3,379
Textron Aviation | Europe                      
Revenues                      
Revenues                 356 678 612
Textron Aviation | Asia and Australia                      
Revenues                      
Revenues                 379 244 336
Textron Aviation | Other international                      
Revenues                      
Revenues                 414 557 644
Textron Aviation | Commercial                      
Revenues                      
Revenues                 3,826 4,956 4,734
Textron Aviation | U.S. Government                      
Revenues                      
Revenues                 148 231 237
Textron Aviation | Aircraft                      
Revenues                      
Revenues                 2,714 3,592 3,435
Textron Aviation | Aftermarket parts and services                      
Revenues                      
Revenues                 1,260 1,595 1,536
Bell                      
Revenues                      
Revenues                 3,309 3,254 3,180
Bell | United States                      
Revenues                      
Revenues                 2,564 2,440 2,186
Bell | Europe                      
Revenues                      
Revenues                 148 142 162
Bell | Asia and Australia                      
Revenues                      
Revenues                 330 348 427
Bell | Other international                      
Revenues                      
Revenues                 267 324 405
Bell | Commercial                      
Revenues                      
Revenues                 1,079 1,238 1,114
Bell | U.S. Government                      
Revenues                      
Revenues                 2,230 2,016 2,066
Bell | Military aircraft and support programs                      
Revenues                      
Revenues                 2,213 1,988 2,030
Bell | Commercial helicopters, parts and services                      
Revenues                      
Revenues                 1,096 1,266 1,150
Textron Systems                      
Revenues                      
Revenues                 1,313 1,325 1,464
Textron Systems | United States                      
Revenues                      
Revenues                 1,129 1,083 1,118
Textron Systems | Europe                      
Revenues                      
Revenues                 44 73 74
Textron Systems | Asia and Australia                      
Revenues                      
Revenues                 67 103 127
Textron Systems | Other international                      
Revenues                      
Revenues                 73 66 145
Textron Systems | Commercial                      
Revenues                      
Revenues                 249 359 431
Textron Systems | U.S. Government                      
Revenues                      
Revenues                 1,064 966 1,033
Textron Systems | Unmanned systems                      
Revenues                      
Revenues                 621 572 612
Textron Systems | Marine and land systems                      
Revenues                      
Revenues                 179 208 311
Textron Systems | Simulation, training and other                      
Revenues                      
Revenues                 513 545 541
Industrial                      
Revenues                      
Revenues                 3,000 3,798 4,291
Industrial | United States                      
Revenues                      
Revenues                 1,398 1,698 1,957
Industrial | Europe                      
Revenues                      
Revenues                 786 1,091 1,333
Industrial | Asia and Australia                      
Revenues                      
Revenues                 328 374 357
Industrial | Other international                      
Revenues                      
Revenues                 488 635 644
Industrial | Commercial                      
Revenues                      
Revenues                 2,993 3,775 4,277
Industrial | U.S. Government                      
Revenues                      
Revenues                 7 23 14
Industrial | Fuel systems and functional components                      
Revenues                      
Revenues                 1,751 2,237 2,352
Industrial | Specialized vehicles                      
Revenues                      
Revenues                 1,249 1,561 1,691
Industrial | Tools and test equipment                      
Revenues                      
Revenues                 0 0 248
Finance                      
Revenues                      
Revenues                 55 66 66
Finance | United States                      
Revenues                      
Revenues                 27 34 27
Finance | Europe                      
Revenues                      
Revenues                 2 2 6
Finance | Asia and Australia                      
Revenues                      
Revenues                 2 1 6
Finance | Other international                      
Revenues                      
Revenues                 24 29 27
Finance | Commercial                      
Revenues                      
Revenues                 55 66 66
Finance | U.S. Government                      
Revenues                      
Revenues                 $ 0 $ 0 $ 0
v3.20.4
Revenues - Remaining Performance Obligations (Details)
$ in Billions
Jan. 02, 2021
USD ($)
Remaining Performance Obligation, Expected Timing of Satisfaction  
Remaining performance obligation $ 9.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-03  
Remaining Performance Obligation, Expected Timing of Satisfaction  
Expected remaining performance obligation 76.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 24 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01  
Remaining Performance Obligation, Expected Timing of Satisfaction  
Expected remaining performance obligation 20.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 24 months
v3.20.4
Revenues - Contract Assets and Liabilities (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Contract Assets and Liabilities      
Contract assets $ 561 $ 567  
Contract liabilities 842 830  
Revenue recognized included in contract liabilities $ 506 $ 590 $ 817
v3.20.4
Share-Based Compensation - Narrative (Details)
$ in Millions
12 Months Ended
Jan. 02, 2021
USD ($)
shares
Share-Based Compensation  
Compensation costs associated with unvested awards not recognized | $ $ 30
Recognize compensation expense for unvested awards subject only to service conditions over a weighted average period 2 years
2015 Long Term Incentive Plan  
Share-Based Compensation  
Maximum shares awarded for issuance 17,000,000
Deferred Income Plan  
Share-Based Compensation  
Maximum percentage of annual long term incentive and other compensation of executives 80.00%
Stock Options | 2015 Long Term Incentive Plan  
Share-Based Compensation  
Maximum shares awarded for issuance 17,000,000
Restricted stock, restricted stock units, performance stock and other awards | 2015 Long Term Incentive Plan  
Share-Based Compensation  
Maximum shares awarded for issuance 4,250,000
v3.20.4
Share-Based Compensation - Compensation Expense (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Share-based Payment Arrangement [Abstract]      
Compensation expense $ 57 $ 52 $ 35
Income tax benefit (14) (12) (8)
Total compensation expense included in net income $ 43 $ 40 $ 27
v3.20.4
Share-Based Compensation - Stock Options (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Share-Based Compensation      
Compensation expense $ 57.0 $ 52.0 $ 35.0
Stock Options      
Share-Based Compensation      
Compensation expense $ 20.0 $ 22.0 $ 23.0
Maximum term of options 10 years    
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) $ 10.66 $ 14.62 $ 15.83
Dividend yield 0.20% 0.20% 0.10%
Expected volatility 29.30% 26.60% 26.60%
Risk-free interest rate 1.10% 2.50% 2.60%
Expected term (in years) 4 years 8 months 12 days 4 years 8 months 12 days 4 years 8 months 12 days
Number of Options      
Outstanding at beginning of period (in shares) 8,744    
Granted (in shares) 2,003    
Exercised (in shares) (723)    
Forfeited or expired (in shares) (214)    
Outstanding at end of period (in shares) 9,810 8,744  
Exercisable at end of period (in shares) 6,484    
Weighted-Average Exercise Price      
Outstanding at beginning of period (in dollars per share) $ 44.00    
Granted (in dollars per share) 39.48    
Exercised (in dollars per share) (29.71)    
Forfeited or expired (in dollars per share) (48.75)    
Outstanding at end of period (in dollars per share) 44.03 $ 44.00  
Exercisable at end of period (in dollars per share) $ 43.02    
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract]      
Aggregate intrinsic value of outstanding options $ 65.0    
Weighted-average remaining contractual life of outstanding stock options 5 years 9 months 18 days    
Aggregate intrinsic value of exercisable options $ 48.0    
Weighted-average remaining contractual life of exercisable options 4 years 4 months 24 days    
Aggregate intrinsic value of options exercised $ 10.0 $ 22.0 $ 62.0
v3.20.4
Share-Based Compensation - Restricted Stock Units (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Units Payable in Stock      
Number of Units      
Outstanding at beginning of period, nonvested (in shares) 543    
Granted (in shares) 179    
Vested (in shares) (139)    
Forfeited (in shares) 0    
Outstanding at end of period, nonvested (in shares) 583 543  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]      
Outstanding at beginning of period, nonvested (in dollars per share) $ 49.44    
Granted (in dollars per share) 37.93    
Vested (in dollars per share) (42.34)    
Forfeited (in dollars per share) 0    
Outstanding at end of period, nonvested (in dollars per share) $ 47.60 $ 49.44  
Units Payable in Cash      
Number of Units      
Outstanding at beginning of period, nonvested (in shares) 1,104    
Granted (in shares) 360    
Vested (in shares) (276)    
Forfeited (in shares) (43)    
Outstanding at end of period, nonvested (in shares) 1,145 1,104  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]      
Outstanding at beginning of period, nonvested (in dollars per share) $ 49.61    
Granted (in dollars per share) 40.57    
Vested (in dollars per share) (42.34)    
Forfeited (in dollars per share) (49.29)    
Outstanding at end of period, nonvested (in dollars per share) $ 48.53 $ 49.61  
Restricted Stock Units      
Fair value      
Fair value of awards vested $ 17 $ 23 $ 25
Cash paid $ 11 $ 16 $ 18
v3.20.4
Share-Based Compensation - Performance Share Units (Details) - Performance Share Units - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Share-Based Compensation      
Performance share units measurement period 3 years    
Number of Units      
Outstanding at beginning of period, nonvested (in shares) 411    
Granted (in shares) 276    
Vested (in shares) (173)    
Outstanding at end of period, nonvested (in shares) 514 411  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]      
Outstanding at beginning of period, nonvested (in dollars per share) $ 56.03    
Granted (in dollars per share) 40.60    
Vested (in dollars per share) (58.24)    
Outstanding at end of period, nonvested (in dollars per share) $ 47.02 $ 56.03  
Fair value      
Fair value of awards vested $ 8 $ 9 $ 12
Cash paid $ 7 $ 10 $ 11
v3.20.4
Retirement Plans - Narrative (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 03, 2021
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Retirement Plans        
Cost recognized for defined contribution plans   $ 128 $ 130 $ 125
Additional percentage of eligible compensation contributed annually by employer to defined contribution plan for employees hired after January 1, 2010   4.00%    
Accumulated benefit obligation   $ 9,300 $ 8,500  
Trend rate for medical and prescription drug cost   7.00% 7.00%  
Rate to which medical and prescription drug cost trend rates will gradually decline   5.00%    
Year that the rates reach the rate where we assume they will remain   2024    
Pension Benefits        
Retirement Plans        
Expected long-term rate of return on assets   7.55% 7.55% 7.58%
Pension Benefits | TMRP        
Retirement Plans        
Remaining life expectancy of participants   7 years    
Pension Benefits | Forecast        
Retirement Plans        
Expected long-term rate of return on assets 7.75%      
Pension Benefits | Forecast | Subsequent Event        
Retirement Plans        
Expected long-term rate of return on assets 7.25%      
Pension Benefits | Forecast | TMRP | Subsequent Event        
Retirement Plans        
Remaining life expectancy of participants 20 years      
Decrease in pension cost $ 85      
Unfunded        
Retirement Plans        
Accumulated benefit obligation   $ 440 $ 404  
v3.20.4
Retirement Plans - Net Periodic Benefit Cost (Credit) (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Other changes in plan assets and benefit obligations recognized in OCI      
Current year actuarial loss (gain) $ 144 $ 218 $ 248
Amortization of net actuarial gain (loss) (184) (99) (152)
Amortization of prior service credit (cost) (6) (8) (9)
Cost associated with defined contribution 128 130 125
Pension Benefits      
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]      
Service cost 106 91 104
Interest cost 293 326 306
Expected return on plan assets (574) (556) (553)
Amortization of prior service cost (credit) 11 14 15
Amortization of net actuarial loss (gain) 185 101 153
Net periodic benefit cost (credit)* 21 (24) 25
Other changes in plan assets and benefit obligations recognized in OCI      
Current year actuarial loss (gain) 146 207 270
Current year prior service cost 8 0 20
Amortization of net actuarial gain (loss) (185) (101) (153)
Amortization of prior service credit (cost) (11) (14) (15)
Business disposition 0 0 (7)
Total recognized in OCI, before taxes (42) 92 115
Total recognized in net periodic benefit cost (credit) and OCI (21) 68 140
Pension Benefits | United States      
Other changes in plan assets and benefit obligations recognized in OCI      
Cost associated with defined contribution 11 13 13
Postretirement Benefits Other than Pensions      
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]      
Service cost 2 3 3
Interest cost 8 10 10
Expected return on plan assets 0 0 0
Amortization of prior service cost (credit) (5) (6) (6)
Amortization of net actuarial loss (gain) (1) (2) (1)
Net periodic benefit cost (credit)* 4 5 6
Other changes in plan assets and benefit obligations recognized in OCI      
Current year actuarial loss (gain) (2) 11 (22)
Current year prior service cost 0 0 0
Amortization of net actuarial gain (loss) 1 2 1
Amortization of prior service credit (cost) 5 6 6
Business disposition 0 0 0
Total recognized in OCI, before taxes 4 19 (15)
Total recognized in net periodic benefit cost (credit) and OCI $ 8 $ 24 $ (9)
v3.20.4
Retirement Plans - Obligations and Funded Status (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Pension Benefits      
Change in projected benefit obligation      
Projected benefit obligation at beginning of year $ 8,938 $ 7,901  
Service cost 106 91 $ 104
Interest cost 293 326 306
Plan participants’ contributions 0 0  
Actuarial losses (gains) 888 1,001  
Benefits paid (429) (421)  
Plan amendment 8 0  
Foreign exchange rate changes and other 29 40  
Projected benefit obligation at end of year 9,833 8,938 7,901
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Balance at beginning of year 8,129 7,122  
Actual return on plan assets 1,312 1,350  
Employer contributions 37 38  
Benefits paid (429) (421)  
Foreign exchange rate changes and other 31 40  
Balance at end of year 9,080 8,129 7,122
Funded status at end of year (753) (809)  
Postretirement Benefits Other than Pensions      
Change in projected benefit obligation      
Projected benefit obligation at beginning of year 246 250  
Service cost 2 3 3
Interest cost 8 10 10
Plan participants’ contributions 5 5  
Actuarial losses (gains) (2) 11  
Benefits paid (29) (33)  
Plan amendment 0 0  
Foreign exchange rate changes and other 0 0  
Projected benefit obligation at end of year 230 246 250
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Balance at beginning of year  
Actual return on plan assets  
Employer contributions  
Benefits paid  
Foreign exchange rate changes and other  
Balance at end of year
Funded status at end of year $ (230) $ (246)  
v3.20.4
Retirement Plans - Amounts Recognized In The Balance Sheets (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Pension Benefits    
Amounts recognized in our balance sheets    
Non-current assets $ 216 $ 152
Current liabilities (28) (27)
Non-current liabilities (941) (934)
Recognized in Accumulated other comprehensive loss, pre-tax:    
Net loss (gain) 2,238 2,271
Prior service cost (credit) 52 55
Postretirement Benefits Other than Pensions    
Amounts recognized in our balance sheets    
Non-current assets 0 0
Current liabilities (23) (26)
Non-current liabilities (207) (220)
Recognized in Accumulated other comprehensive loss, pre-tax:    
Net loss (gain) (23) (21)
Prior service cost (credit) $ (15) $ (20)
v3.20.4
Retirement Plans - Accumulated and Projected Benefit Obligations (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Pension plans with accumulated benefit obligations exceeding the fair value of plan assets    
Accumulated benefit obligation $ 789 $ 8,050
Fair value of plan assets 282 7,500
Pension plans with projected benefit obligation exceeding the fair value of plan assets    
Projected benefit obligation 9,333 8,462
Fair value of plan assets $ 8,363 $ 7,500
v3.20.4
Retirement Plans - Weighted-average Assumptions (Details)
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Pension Benefits      
Net periodic benefit cost      
Discount rate 3.36% 4.24% 3.67%
Expected long-term rate of return on assets 7.55% 7.55% 7.58%
Rate of compensation increase 3.50% 3.50% 3.50%
Benefit obligations at year-end      
Discount rate 2.62% 3.36% 4.24%
Rate of compensation increase 3.50% 3.50% 3.50%
Interest crediting rate for cash balance plans 0.0525 0.0525 0.0525
Postretirement Benefits Other than Pensions      
Net periodic benefit cost      
Discount rate 3.20% 4.25% 3.50%
Benefit obligations at year-end      
Discount rate 2.35% 3.20% 4.25%
v3.20.4
Retirement Plans - Target Allocation Ranges (Details) - Pension Benefits
Jan. 02, 2021
Minimum | Domestic equity securities | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 17.00%
Minimum | International equity securities | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 8.00%
Minimum | Global equities | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 5.00%
Minimum | Debt securities | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 27.00%
Minimum | Debt securities | Non-U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 25.00%
Minimum | Real estate | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 7.00%
Minimum | Real estate | Non-U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 0.00%
Minimum | Private investment partnerships | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 5.00%
Minimum | Equity securities | Non-U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 55.00%
Maximum | Domestic equity securities | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 33.00%
Maximum | International equity securities | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 19.00%
Maximum | Global equities | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 17.00%
Maximum | Debt securities | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 38.00%
Maximum | Debt securities | Non-U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 45.00%
Maximum | Real estate | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 13.00%
Maximum | Real estate | Non-U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 13.00%
Maximum | Private investment partnerships | U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 11.00%
Maximum | Equity securities | Non-U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 75.00%
v3.20.4
Retirement Plans - Fair Value of Pension Plan Assets (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Valuation of owned properties period 3 years    
Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets $ 9,080 $ 8,129 $ 7,122
Level 1 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 3,607 2,808  
Level 2 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 1,443 1,382  
Level 3 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 458 473  
Not Subject to Leveling | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 3,572 3,466  
Cash and equivalents | Level 1 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 49 18  
Cash and equivalents | Level 2 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 3 12  
Cash and equivalents | Level 3 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Cash and equivalents | Not Subject to Leveling | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 132 174  
Domestic equity securities | Level 1 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 1,591 1,257  
Domestic equity securities | Level 2 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Domestic equity securities | Level 3 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Domestic equity securities | Not Subject to Leveling | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 1,241 1,160  
International equity securities | Level 1 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 1,221 929  
International equity securities | Level 2 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
International equity securities | Level 3 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
International equity securities | Not Subject to Leveling | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 735 780  
Mutual funds | Level 1 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 195 176  
Mutual funds | Level 2 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Mutual funds | Level 3 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
National, state and local governments | Level 1 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 482 414  
National, state and local governments | Level 2 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 306 308  
National, state and local governments | Level 3 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
National, state and local governments | Not Subject to Leveling | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 95 56  
Corporate debt | Level 1 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 69 14  
Corporate debt | Level 2 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 1,134 1,062  
Corporate debt | Level 3 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Corporate debt | Not Subject to Leveling | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 236 240  
Asset-backed securities | Level 1 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Asset-backed securities | Level 2 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Asset-backed securities | Level 3 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Asset-backed securities | Not Subject to Leveling | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets   18  
Private investment partnerships | Level 1 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Private investment partnerships | Level 2 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Private investment partnerships | Level 3 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Private investment partnerships | Not Subject to Leveling | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 819 745  
Real estate | Level 1 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Real estate | Level 2 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 0 0  
Real estate | Level 3      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 458 473 $ 460
Real estate | Level 3 | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets 458 473  
Real estate | Not Subject to Leveling | Pension Benefits      
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of total pension plan assets $ 314 $ 293  
v3.20.4
Retirement Plans - Reconciliation of Fair Value Measurements of Level 3 Valuation (Details) - Real estate - Level 3 - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Reconciliation for fair value measurements that use significant unobservable inputs (Level 3)    
Balance at beginning of year $ 473 $ 460
Unrealized gains (losses), net (18) 7
Realized gains, net 6 5
Purchases, sales and settlements, net (3) 1
Balance at end of year $ 458 $ 473
v3.20.4
Retirement Plans - Estimated Future Cash Flow Impact (Details)
$ in Millions
Jan. 02, 2021
USD ($)
Retirement Plans  
Expected contributions to our non-qualified plans and foreign plans $ 51
Pension Benefits  
Estimated future benefit payments  
2021 434
2022 441
2023 450
2024 459
2025 470
2026-2030 2,460
Postretirement Benefits Other than Pensions  
Estimated future benefit payments  
2021 24
2022 23
2023 22
2024 20
2025 19
2026-2030 $ 77
v3.20.4
Special Charges - Special Charges by Segment (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Jan. 02, 2021
Oct. 03, 2020
Jul. 04, 2020
Apr. 04, 2020
Jan. 04, 2020
Sep. 28, 2019
Jun. 29, 2019
Mar. 30, 2019
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Restructuring Cost and Reserve [Line Items]                      
Asset Impairments                 $ 39 $ 5 $ 0
Special charges $ 23 $ 7 $ 78 $ 39 $ 72 $ 0 $ 0 $ 0 147 72 73
Operating Segment | Textron Aviation                      
Restructuring Cost and Reserve [Line Items]                      
Asset Impairments                 32 0  
Special charges                 65 29  
Operating Segment | Industrial                      
Restructuring Cost and Reserve [Line Items]                      
Asset Impairments                 7 0 0
Special charges                 41 38 73
Operating Segment | Textron Systems                      
Restructuring Cost and Reserve [Line Items]                      
Asset Impairments                 0    
Special charges                 37    
Corporate                      
Restructuring Cost and Reserve [Line Items]                      
Asset Impairments                 0 5  
Special charges                 4 5  
Covid19 Restructuring Plan                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 86    
Asset Impairments                 22 10 47
Special charges                 108 67 73
Covid19 Restructuring Plan | Severance Costs                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 73 46 8
Covid19 Restructuring Plan | Contract Terminations and Other                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 13 11 18
Covid19 Restructuring Plan | Operating Segment | Textron Aviation                      
Restructuring Cost and Reserve [Line Items]                      
Asset Impairments                 2 4  
Special charges                 33 29  
Covid19 Restructuring Plan | Operating Segment | Textron Aviation | Severance Costs                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 31 25  
Covid19 Restructuring Plan | Operating Segment | Textron Aviation | Contract Terminations and Other                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 0 0  
Covid19 Restructuring Plan | Operating Segment | Industrial                      
Restructuring Cost and Reserve [Line Items]                      
Asset Impairments                 6 6 47
Special charges                 34 38 73
Covid19 Restructuring Plan | Operating Segment | Industrial | Severance Costs                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 27 21 8
Covid19 Restructuring Plan | Operating Segment | Industrial | Contract Terminations and Other                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 1 11 $ 18
Covid19 Restructuring Plan | Operating Segment | Textron Systems                      
Restructuring Cost and Reserve [Line Items]                      
Asset Impairments                 14    
Special charges                 37    
Covid19 Restructuring Plan | Operating Segment | Textron Systems | Severance Costs                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 11    
Covid19 Restructuring Plan | Operating Segment | Textron Systems | Contract Terminations and Other                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 12    
Covid19 Restructuring Plan | Corporate                      
Restructuring Cost and Reserve [Line Items]                      
Asset Impairments                 0 0  
Special charges                 4 0  
Covid19 Restructuring Plan | Corporate | Severance Costs                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 4 0  
Covid19 Restructuring Plan | Corporate | Contract Terminations and Other                      
Restructuring Cost and Reserve [Line Items]                      
Restructuring charges                 $ 0 $ 0  
v3.20.4
Special Charges - 2020 Covid 19 Restructuring Plan (Details)
$ in Millions
3 Months Ended 12 Months Ended
Jan. 02, 2021
USD ($)
Oct. 03, 2020
USD ($)
borrowingGroup
Jul. 04, 2020
USD ($)
Apr. 04, 2020
USD ($)
Jan. 04, 2020
USD ($)
Sep. 28, 2019
USD ($)
Jun. 29, 2019
USD ($)
Mar. 30, 2019
USD ($)
Jan. 02, 2021
USD ($)
Jan. 04, 2020
USD ($)
Dec. 29, 2018
USD ($)
Restructuring Cost and Reserve [Line Items]                      
TRU inventory valuation charge $ 0 $ 0 $ 55 $ 0 $ 0 $ 0 $ 0 $ 0      
Special charges 23 $ 7 $ 78 $ 39 72 $ 0 $ 0 $ 0 $ 147 $ 72 $ 73
Reconciling Items                      
Restructuring Cost and Reserve [Line Items]                      
TRU inventory valuation charge                 55 0 0
Special charges         $ 72       147   73
Covid19 Restructuring Plan                      
Restructuring Cost and Reserve [Line Items]                      
Special charges                 108 $ 67 $ 73
Percentage of workforce reduction   8.00%                  
Number of positions eliminated | borrowingGroup   2,700                  
Covid19 Restructuring Plan | Contract Terminations and Other | Minimum                      
Restructuring Cost and Reserve [Line Items]                      
Expected restructuring plan cost 20               20    
Covid19 Restructuring Plan | Contract Terminations and Other | Maximum                      
Restructuring Cost and Reserve [Line Items]                      
Expected restructuring plan cost $ 30               $ 30    
v3.20.4
Special Charges - Additional Information (Details)
$ in Millions
3 Months Ended 12 Months Ended
Jan. 02, 2021
USD ($)
Oct. 03, 2020
USD ($)
Jul. 04, 2020
USD ($)
Apr. 04, 2020
USD ($)
Jan. 04, 2020
USD ($)
position
Sep. 28, 2019
USD ($)
Jun. 29, 2019
USD ($)
Mar. 30, 2019
USD ($)
Jan. 02, 2021
USD ($)
Jan. 04, 2020
USD ($)
position
Dec. 29, 2018
USD ($)
Special Charges                      
Asset Impairments                 $ 39 $ 5 $ 0
Special charges $ 23 $ 7 $ 78 $ 39 $ 72 $ 0 $ 0 $ 0 147 $ 72 $ 73
2019 Restructuring Plan                      
Special Charges                      
Number of positions eliminated | position                   1,000  
2018 Restructuring Plan                      
Special Charges                      
Number of positions eliminated | position         400            
2018 Restructuring Plan | Specialized vehicles                      
Special Charges                      
Positions eliminated as percentage of total workforce         10.00%            
Beechcraft and King Air trade name intangible assets                      
Special Charges                      
Discount rate to determine fair value       9.70%              
Intangible assets $ 169               $ 169    
v3.20.4
Special Charges - Restructuring reserve activity and total expected cash outlay (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Restructuring reserve activity      
Balance at beginning of period $ 65 $ 40  
Cash paid (88) (31)  
Reclassification (13)    
Foreign currency translation 2 1  
Balance at end of period 52 65 $ 40
Severance Costs      
Restructuring reserve activity      
Balance at beginning of period 46 8  
Cash paid (77) (8)  
Reclassification (1)    
Foreign currency translation 2 0  
Balance at end of period 43 46 8
Contract Terminations and Other      
Restructuring reserve activity      
Balance at beginning of period 19 32  
Cash paid (11) (23)  
Reclassification (12)    
Foreign currency translation 0 1  
Balance at end of period 9 19 32
2019 Restructuring Plan      
Restructuring reserve activity      
Provision for plan   57  
2019 Restructuring Plan | Severance Costs      
Restructuring reserve activity      
Provision for plan   46  
2019 Restructuring Plan | Contract Terminations and Other      
Restructuring reserve activity      
Provision for plan   11  
Covid19 Restructuring Plan      
Restructuring reserve activity      
Provision for plan 86    
Covid19 Restructuring Plan | Severance Costs      
Restructuring reserve activity      
Provision for plan 73 $ 46 $ 8
Covid19 Restructuring Plan | Contract Terminations and Other      
Restructuring reserve activity      
Provision for plan $ 13    
v3.20.4
Income Taxes - Income from continuing operations before income taxes (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Income Tax Disclosure [Abstract]      
U.S. $ 202 $ 668 $ 557
Non-U.S. 80 274 827
Income before income taxes $ 282 $ 942 $ 1,384
v3.20.4
Income Taxes - Current and Deferred Income Tax Expense For Continuing Operations (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Jan. 02, 2021
Oct. 03, 2020
Jul. 04, 2020
Apr. 04, 2020
Jan. 04, 2020
Sep. 28, 2019
Jun. 29, 2019
Mar. 30, 2019
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Current expense (benefit):                      
Federal                 $ (1) $ (48) $ 3
State                 (76) 16 9
Non-U.S.                 57 70 101
Current income tax expense, total                 (20) 38 113
Deferred expense (benefit):                      
Federal                 3 112 60
State                 5 (20) (5)
Non-U.S.                 (15) (3) (6)
Deferred income tax expense, total                 (7) 89 49
Income tax expense (benefit) $ (21) $ 1 $ (26) $ 19 $ 11 $ 21 $ 62 $ 33 $ (27) $ 127 $ 162
v3.20.4
Income Taxes - Reconciliation of Federal Statutory Income Tax Rate To Effective Income Tax Rate For Continuing Operations (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Jan. 02, 2021
Oct. 03, 2020
Jul. 04, 2020
Apr. 04, 2020
Jan. 04, 2020
Sep. 28, 2019
Jun. 29, 2019
Mar. 30, 2019
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Federal statutory income tax rate to effective income tax rate for continuing operations                      
U.S. Federal statutory income tax rate                 21.00% 21.00% 21.00%
Increase (decrease) resulting from:                      
State income tax audit settlement (net of federal impact)                 (18.60%) 0.00% 0.00%
Research and developments tax credits                 (18.20%) (7.60%) (2.90%)
Effective Income Tax Rate Reconciliation, Disposition of Asset, Percent                 (2.70%) 0.00% 0.00%
U.S. amended returns tax rate differential                 0.00% (1.20%) 0.00%
State income taxes (net of federal impact)                 (1.20%) 0.30% (0.10%)
Non-U.S. tax rate differential and foreign tax credits (b)                 10.80% 1.40% 1.30%
U.S. tax reform enactment impact                 0.00% 0.00% (1.00%)
Gain on business disposition, primarily in non-U.S. jurisdictions                 0.00% 0.00% (5.00%)
Other, net                 (0.70%) (0.40%) (1.60%)
Effective income tax rate                 (9.60%) 13.50% 11.70%
Inventory Charge $ 0 $ 0 $ (55) $ 0 $ 0 $ 0 $ 0 $ 0      
Tax expense related to dividend cash back from non-U.S. jurisdiction to the U.S.                 $ 10    
Valuation allowance release                 $ 14    
v3.20.4
Income Taxes - Narrative (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Income Tax Disclosure [Abstract]      
Research credits related to prior years   $ 61.0  
Unremitted earnings in foreign subsidiaries $ 1,700.0    
Certain tax position related to research credits $ 68.0   $ 25.0
v3.20.4
Income Taxes - Unrecognized Tax Benefits Rollforward and Various Tax Information (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance at beginning of year $ 221.0 $ 141.0 $ 182.0
Additions for tax positions related to current year 11.0 9.0 5.0
Additions for tax positions of prior years 21.0 74.0 13.0
Reductions for settlements and expiration of statute of limitations (69.0) (1.0) (22.0)
Reductions for tax positions of prior years (1.0) (2.0) (37.0)
Balance at end of year 183.0 $ 221.0 141.0
Certain tax position related to research credits $ (68.0)   $ (25.0)
v3.20.4
Income Taxes - Net Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Income Tax Examination [Line Items]    
Obligation for pension and postretirement benefits $ 287 $ 289
U.S. operating loss and tax credit carryforwards 320 235
Accrued liabilities 202 214
Deferred compensation 100 95
Operating lease liabilities 97 70
Non-U.S. operating loss and tax credit carryforwards 65 52
Valuation allowance on deferred tax assets (157) (145)
Amortization of goodwill and other intangibles (171) (160)
Property, plant and equipment, principally depreciation (199) (153)
Operating lease right-of-use assets (95) (68)
Other leasing transactions, principally leveraged leases (79) (80)
Prepaid pension benefits (44) (29)
Other, net 16 (51)
Deferred taxes, net 342 $ 269
U.S.    
Income Tax Examination [Line Items]    
Operating loss and tax credit carryforward benefits through expiration 283  
Operating loss and tax indefinite credit carryforward benefit 37  
Non-U.S.    
Income Tax Examination [Line Items]    
Operating loss and tax credit carryforward benefits through expiration 29  
Operating loss and tax indefinite credit carryforward benefit $ 36  
v3.20.4
Income Taxes - Breakdown of Net Deferred Tax Assets (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Breakdown of net deferred tax assets    
Deferred taxes, net $ 342 $ 269
Manufacturing group    
Breakdown of net deferred tax assets    
Deferred tax assets, net of valuation allowance 423 341
Deferred tax liabilities (19) (4)
Finance group    
Breakdown of net deferred tax assets    
Deferred tax liabilities $ (62) $ (68)
v3.20.4
Commitments and Contingencies - Letter of Credit (Details) - USD ($)
$ in Millions
Jan. 02, 2021
Jan. 04, 2020
Commitments and Contingencies Disclosure [Abstract]    
Aggregate amount of outstanding letter of credit arrangements and surety bonds $ 216 $ 247
v3.20.4
Commitments and Contingencies - Environmental Remediation (Details) - Environmental liabilities - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Environmental Remediation      
Environmental reserves $ 76    
Estimated period over which accrued environmental remediation liabilities are likely to be paid 10 years    
Accrued environmental remediation liabilities classified as current liabilities $ 15    
Expenditures to evaluate and remediate contaminated sites 7 $ 13 $ 13
Minimum      
Environmental Remediation      
Potential environmental liabilities 40    
Maximum      
Environmental Remediation      
Potential environmental liabilities $ 150    
v3.20.4
Supplemental Cash Flow Information (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Manufacturing group      
Supplemental Cash Flow Information      
Cash paid for interest $ 139 $ 138 $ 132
Net taxes paid /(received) 34 120 129
Finance group      
Supplemental Cash Flow Information      
Cash paid for interest 20 23 25
Net taxes paid /(received) $ 8 $ 1 $ 17
v3.20.4
Quarterly Data (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
3 Months Ended 12 Months Ended
Jan. 02, 2021
Oct. 03, 2020
Jul. 04, 2020
Apr. 04, 2020
Jan. 04, 2020
Sep. 28, 2019
Jun. 29, 2019
Mar. 30, 2019
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Summary of quarterly data                      
Total revenues $ 3,667 $ 2,735 $ 2,472 $ 2,777 $ 4,035 $ 3,259 $ 3,227 $ 3,109 $ 11,651 $ 13,630 $ 13,972
Special charges (23) (7) (78) (39) (72) 0 0 0 (147) (72) (73)
Inventory charge 0 0 (55) 0 0 0 0 0      
Income tax benefit (expense) 21 (1) 26 (19) (11) (21) (62) (33) $ 27 $ (127) $ (162)
Net income (loss) $ 236 $ 115 $ (92) $ 50 $ 199 $ 220 $ 217 $ 179      
Earnings Per Share [Abstract]                      
Basic earnings per share - continuing operations (in dollars per share) $ 1.03 $ 0.50 $ (0.40) $ 0.22 $ 0.87 $ 0.96 $ 0.94 $ 0.76 $ 1.35 $ 3.52 $ 4.88
Diluted earnings per share - continuing operations (in dollars per share) $ 1.03 $ 0.50 $ (0.40) $ 0.22 $ 0.87 $ 0.95 $ 0.93 $ 0.76 $ 1.35 $ 3.50 $ 4.83
Basic average shares outstanding (in shares) 228,666 228,918 228,247 228,311 228,653 229,755 232,013 234,839 228,536 231,315 250,196
Diluted weighted-average shares outstanding (in shares) 229,365 229,279 228,247 228,927 229,790 231,097 233,545 236,437 228,979 232,709 253,237
Segment profit margins                      
Segment profit (loss) margins 8.80% 6.90% 3.30% 5.60% 8.40% 9.10% 10.50% 9.50%      
Operating Segment                      
Summary of quarterly data                      
Total revenues                 $ 11,651 $ 13,630 $ 13,972
Segment Profit $ 324 $ 189 $ 82 $ 156 $ 340 $ 297 $ 339 $ 294      
Corporate                      
Summary of quarterly data                      
Corporate expenses and other, net (50) (28) (30) (14) (22) (17) (24) (47)      
Special charges                 (4) (5)  
Reconciling Items                      
Summary of quarterly data                      
Corporate expenses and other, net                 (122) (110) (119)
Special charges         (72)       (147)   (73)
Inventory charge                 (55) 0 0
Manufacturing group | Reconciling Items                      
Summary of quarterly data                      
Interest expense, net for Manufacturing group (36) (38) (37) (34) (36) (39) (36) (35) (145) (146) (135)
Textron Aviation                      
Summary of quarterly data                      
Total revenues                 3,974 5,187 4,971
Textron Aviation | Operating Segment                      
Summary of quarterly data                      
Special charges                 (65) (29)  
Textron Aviation | Manufacturing group                      
Summary of quarterly data                      
Total revenues $ 1,560 $ 795 $ 747 $ 872 $ 1,729 $ 1,201 $ 1,123 $ 1,134      
Segment profit margins                      
Segment profit (loss) margins 6.90% (3.60%) (8.80%) 0.30% 7.80% 8.70% 9.40% 9.30%      
Textron Aviation | Manufacturing group | Operating Segment                      
Summary of quarterly data                      
Total revenues                 3,974 5,187 4,971
Segment Profit $ 108 $ (29) $ (66) $ 3 $ 134 $ 104 $ 105 $ 106      
Bell                      
Summary of quarterly data                      
Total revenues                 3,309 3,254 3,180
Bell | Manufacturing group                      
Summary of quarterly data                      
Total revenues $ 871 $ 793 $ 822 $ 823 $ 961 $ 783 $ 771 $ 739      
Segment profit margins                      
Segment profit (loss) margins 12.60% 15.00% 14.40% 14.00% 12.30% 14.00% 13.40% 14.10%      
Bell | Manufacturing group | Operating Segment                      
Summary of quarterly data                      
Total revenues                 3,309 3,254 3,180
Segment Profit $ 110 $ 119 $ 118 $ 115 $ 118 $ 110 $ 103 $ 104      
Textron Systems                      
Summary of quarterly data                      
Total revenues                 1,313 1,325 1,464
Textron Systems | Operating Segment                      
Summary of quarterly data                      
Special charges                 (37)    
Textron Systems | Manufacturing group                      
Summary of quarterly data                      
Total revenues $ 357 $ 302 $ 326 $ 328 $ 399 $ 311 $ 308 $ 307      
Segment profit margins                      
Segment profit (loss) margins 13.70% 13.20% 11.30% 7.90% 8.30% 10.00% 15.90% 9.10%      
Textron Systems | Manufacturing group | Operating Segment                      
Summary of quarterly data                      
Total revenues                 1,313 1,325 1,464
Segment Profit $ 49 $ 40 $ 37 $ 26 $ 33 $ 31 $ 49 $ 28      
Industrial                      
Summary of quarterly data                      
Total revenues                 3,000 3,798 4,291
Industrial | Operating Segment                      
Summary of quarterly data                      
Special charges                 (41) (38) (73)
Industrial | Manufacturing group                      
Summary of quarterly data                      
Total revenues $ 866 $ 832 $ 562 $ 740 $ 927 $ 950 $ 1,009 $ 912      
Segment profit margins                      
Segment profit (loss) margins 6.40% 7.00% (2.00%) 1.20% 4.70% 4.90% 7.50% 5.50%      
Industrial | Manufacturing group | Operating Segment                      
Summary of quarterly data                      
Total revenues                 3,000 3,798 4,291
Segment Profit $ 55 $ 58 $ (11) $ 9 $ 44 $ 47 $ 76 $ 50      
Finance                      
Summary of quarterly data                      
Finance Revenue $ 13 $ 13 $ 15 $ 14 $ 19 $ 14 $ 16 $ 17      
Total revenues                 $ 55 $ 66 $ 66
Segment profit margins                      
Segment profit (loss) margins 15.40% 7.70% 26.70% 21.40% 57.90% 35.70% 37.50% 35.30%      
Finance | Operating Segment                      
Summary of quarterly data                      
Segment Profit $ 2 $ 1 $ 4 $ 3 $ 11 $ 5 $ 6 $ 6      
v3.20.4
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 02, 2021
Jan. 04, 2020
Dec. 29, 2018
Allowance for doubtful accounts      
Valuation and Qualifying Accounts      
Balance at beginning of year $ 29 $ 27 $ 27
Charged to costs and expenses 25 7 5
Deductions from reserves (18) (5) (5)
Balance at end of year 36 29 27
Allowance for losses on finance receivables      
Valuation and Qualifying Accounts      
Balance at beginning of year 25 29 31
Reversal of the provision for losses 7 (6) (3)
Charge-offs 0 (4) (4)
Recoveries 3 6 5
Balance at end of year 35 25 29
Inventory FIFO reserves      
Valuation and Qualifying Accounts      
Balance at beginning of year 309 280 262
Charged to costs and expenses 105 58 56
Deductions from reserves (57) (29) (38)
Balance at end of year $ 357 $ 309 $ 280