TEXTRON INC, 10-K filed on 2/16/2023
Annual Report
v3.22.4
Cover - USD ($)
$ in Billions
12 Months Ended
Dec. 31, 2022
Feb. 04, 2023
Jul. 02, 2022
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Current Fiscal Year End Date --12-31    
Document Period End Date Dec. 31, 2022    
Document Transition Report false    
Entity File Number 1-5480    
Entity Registrant Name Textron Inc.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 05-0315468    
Entity Address, Address Line One 40 Westminster Street    
Entity Address, City or Town Providence    
Entity Address, State or Province RI    
Entity Address, Postal Zip Code 02903    
City Area Code 401    
Local Phone Number 421-2800    
Title of 12(b) Security Common Stock — 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    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Public Float     $ 12.9
Entity Common Stock, Shares Outstanding   205,216,698  
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 26, 2023.    
Entity Central Index Key 0000217346    
Document Fiscal Year Focus 2022    
Document Fiscal Period Focus FY    
Amendment Flag false    
v3.22.4
Audit Information
12 Months Ended
Dec. 31, 2022
Audit Information [Abstract]  
Auditor Name Ernst & Young LLP
Auditor Location Boston, Massachusetts
Auditor Firm ID 42
v3.22.4
Consolidated Statements of Operations - USD ($)
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Revenues      
Total revenues $ 12,869,000,000 $ 12,382,000,000 $ 11,651,000,000
Costs, expenses and other      
Selling and administrative expense 1,186,000,000 1,221,000,000 1,045,000,000
Interest expense, net 107,000,000 142,000,000 166,000,000
Special charges 0 25,000,000 147,000,000
Non-service components of pension and postretirement income, net (240,000,000) (159,000,000) (83,000,000)
Gain on business disposition 0 (17,000,000) 0
Total costs, expenses and other 11,853,000,000 11,509,000,000 11,369,000,000
Income from continuing operations before income taxes 1,016,000,000 873,000,000 282,000,000
Income tax expense (benefit) 154,000,000 126,000,000 (27,000,000)
Income from continuing operations 862,000,000 747,000,000 309,000,000
Loss from discontinued operations (1,000,000) (1,000,000) 0
Net income $ 861,000,000 $ 746,000,000 $ 309,000,000
Basic Earnings per share      
Continuing operations (in dollars per share) $ 4.05 $ 3.33 $ 1.35
Diluted Earnings per share      
Continuing operations (in dollars per share) $ 4.01 $ 3.30 $ 1.35
Manufacturing group      
Costs, expenses and other      
Income from continuing operations $ 835,000,000 $ 740,000,000 $ 301,000,000
Finance group      
Revenues      
Total revenues 52,000,000 49,000,000 55,000,000
Costs, expenses and other      
Income from continuing operations 27,000,000 7,000,000 8,000,000
Product      
Costs, expenses and other      
Total cost of sales 9,380,000,000 8,955,000,000 8,715,000,000
Product | Manufacturing group      
Revenues      
Total revenues 10,945,000,000 10,541,000,000 9,720,000,000
Service      
Costs, expenses and other      
Total cost of sales 1,420,000,000 1,342,000,000 1,379,000,000
Service | Manufacturing group      
Revenues      
Total revenues $ 1,872,000,000 $ 1,792,000,000 $ 1,876,000,000
v3.22.4
Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Statement of Comprehensive Income [Abstract]      
Net income $ 861 $ 746 $ 309
Other comprehensive income, net of tax      
Pension and postretirement benefits adjustments, net of reclassifications 283 981 31
Foreign currency translation adjustments, net of reclassifications (103) (37) 78
Deferred gains (losses) on hedge contracts, net of reclassifications (3) 2 (1)
Total other comprehensive income, net of tax 177 946 108
Comprehensive income $ 1,038 $ 1,692 $ 417
v3.22.4
Consolidated Balance Sheets - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Assets    
Inventories $ 3,550 $ 3,468
Property, plant and equipment, net 2,523 2,538
Finance receivables, net 563 605
Assets 16,293 15,827
Liabilities    
Total liabilities 9,180 9,012
Shareholders' equity    
Common stock (207.4 million and 219.2 million shares issued, respectively, and 206.2 million and 216.9 million shares outstanding, respectively) 26 28
Capital surplus 1,880 1,863
Treasury stock (84) (157)
Retained earnings 5,903 5,870
Accumulated other comprehensive loss (612) (789)
Total shareholders’ equity 7,113 6,815
Total liabilities and shareholders’ equity 16,293 15,827
Manufacturing group    
Assets    
Cash and equivalents 1,963 1,922
Accounts receivable, net 855 838
Inventories 3,550 3,468
Other current assets 1,033 1,018
Total current assets 7,401 7,246
Property, plant and equipment, net 2,523 2,538
Goodwill 2,283 2,149
Other assets 3,422 3,027
Assets 15,629 14,960
Liabilities    
Current portion of long-term debt 7 6
Accounts payable 1,018 786
Other current liabilities 2,645 2,344
Total current liabilities 3,670 3,136
Other liabilities 1,879 2,005
Long-term debt 3,175 3,179
Debt 3,182 3,185
Total liabilities 8,724 8,320
Finance group    
Assets    
Cash and equivalents 72 195
Finance receivables, net 563 605
Other assets 29 67
Assets 664 867
Liabilities    
Other liabilities 81 110
Debt 375 582
Total liabilities $ 456 $ 692
v3.22.4
Consolidated Balance Sheets (Parenthetical) - shares
shares in Thousands
Dec. 31, 2022
Jan. 01, 2022
Statement of Financial Position [Abstract]    
Common stock, issued (in shares) 207,400 219,200
Common stock, outstanding (in shares) 206,161 216,935
v3.22.4
Consolidated Statements of Shareholders' Equity - USD ($)
$ in Millions
Total
Common Stock
Capital Surplus
Treasury Stock
Retained Earnings
Accumulated Other Comprehensive Loss
Beginning 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 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)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 746       746  
Other comprehensive income 946         946
Dividends declared (18)       (18)  
Share-based compensation activity 213 1 212      
Purchases of common stock (921)     (921)    
Retirement of treasury stock 0 (2) (134) 967 (831)  
Other 4         4
Ending Balance at Jan. 01, 2022 6,815 28 1,863 (157) 5,870 (789)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 861       861  
Other comprehensive income 177         177
Dividends declared (17)       (17)  
Share-based compensation activity 144   144      
Purchases of common stock (867)     (867)    
Retirement of treasury stock 0 (2) (127) 940 (811)  
Ending Balance at Dec. 31, 2022 $ 7,113 $ 26 $ 1,880 $ (84) $ 5,903 $ (612)
v3.22.4
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Statement of Stockholders' Equity [Abstract]      
Dividends declared (in dollars per share) $ 0.08 $ 0.08 $ 0.08
v3.22.4
Consolidated Statements of Cash Flows - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Cash flows from operating activities      
Income from continuing operations $ 862 $ 747 $ 309
Non-cash items:      
Depreciation and amortization 397 390 391
Deferred income taxes (220) 23 (7)
Asset impairments and TRU inventory charge 2 13 116
Gain on business disposition 0 (17) 0
Other, net 94 88 79
Changes in assets and liabilities:      
Accounts receivable, net (26) (58) 149
Inventories (55) 45 434
Other assets 35 (112) 66
Accounts payable 235 13 (613)
Other liabilities 270 405 (5)
Income taxes, net 18 11 (62)
Pension, net (165) (82) (15)
Captive finance receivables, net 35 131 (89)
Other operating activities, net 8 2 16
Net cash provided by (used in) operating activities of continuing operations 1,490 1,599 769
Net cash used in operating activities of discontinued operations (2) (1) (1)
Net cash provided by (used in) operating activities 1,488 1,598 768
Cash flows from investing activities      
Capital expenditures (354) (375) (317)
Net cash used in acquisitions (202) 0 (15)
Net proceeds (payments) from corporate-owned life insurance policies 23 (2) 22
Proceeds from sale of property, plant and equipment and an insurance recovery 22 3 33
Net proceeds from business disposition 0 38 0
Finance receivables repaid 20 19 22
Other investing activities, net 44 36 7
Net cash used in investing activities (447) (281) (248)
Cash flows from financing activities      
Decrease in short-term debt (14) (1) 0
Net proceeds from long-term debt 0 0 1,137
Principal payments on long-term debt and nonrecourse debt (234) (621) (593)
Proceeds from borrowings against corporate-owned life insurance policies 0 0 377
Payments on borrowings against corporate-owned life insurance policies 0 0 (377)
Purchases of Textron common stock (867) (921) (183)
Proceeds from exercise of stock options 44 116 22
Dividends paid (17) (18) (18)
Other financing activities, net (3) (1) (5)
Net cash provided by (used in) financing activities (1,091) (1,446) 360
Effect of exchange rate changes on cash and equivalents (32) (8) 17
Net increase (decrease) in cash and equivalents (82) (137) 897
Cash and equivalents at beginning of year 2,117 2,254 1,357
Cash and equivalents at end of year $ 2,035 $ 2,117 $ 2,254
v3.22.4
Consolidated Statements of Cash Flows - Manufacturing Group and Finance Group - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Cash flows from operating activities      
Income from continuing operations $ 862 $ 747 $ 309
Non-cash items:      
Depreciation and amortization 397 390 391
Deferred income taxes (220) 23 (7)
Asset impairments and TRU inventory charge 2 13 116
Gain on business disposition 0 (17) 0
Other, net 94 88 79
Changes in assets and liabilities:      
Accounts receivable, net (26) (58) 149
Inventories (55) 45 434
Other assets 35 (112) 66
Accounts payable 235 13 (613)
Other liabilities 270 405 (5)
Income taxes, net 18 11 (62)
Pension, net (165) (82) (15)
Other operating activities, net 8 2 16
Net cash provided by (used in) operating activities of continuing operations 1,490 1,599 769
Net cash used in operating activities of discontinued operations (2) (1) (1)
Net cash provided by (used in) operating activities 1,488 1,598 768
Cash flows from investing activities      
Capital expenditures (354) (375) (317)
Net cash used in acquisitions (202) 0 (15)
Net proceeds (payments) from corporate-owned life insurance policies 23 (2) 22
Proceeds from sale of property, plant and equipment and an insurance recovery 22 3 33
Net proceeds from business disposition 0 38 0
Finance receivables repaid 20 19 22
Other investing activities, net 44 36 7
Net cash used in investing activities (447) (281) (248)
Cash flows from financing activities      
Net proceeds from long-term debt 0 0 1,137
Principal payments on long-term debt and nonrecourse debt (234) (621) (593)
Proceeds from borrowings against corporate-owned life insurance policies 0 0 377
Payments on borrowings against corporate-owned life insurance policies 0 0 (377)
Purchases of Textron common stock (867) (921) (183)
Proceeds from exercise of stock options 44 116 22
Dividends paid (17) (18) (18)
Other financing activities, net (3) (1) (5)
Net cash provided by (used in) financing activities (1,091) (1,446) 360
Effect of exchange rate changes on cash and equivalents (32) (8) 17
Net increase (decrease) in cash and equivalents (82) (137) 897
Cash and equivalents at beginning of year 2,117 2,254 1,357
Cash and equivalents at end of year 2,035 2,117 2,254
Decrease in short-term debt (14) (1) 0
Manufacturing group      
Cash flows from operating activities      
Income from continuing operations 835 740 301
Non-cash items:      
Depreciation and amortization 396 380 386
Deferred income taxes (200) 27 (2)
Asset impairments and TRU inventory charge 2 13 116
Gain on business disposition 0 (17) 0
Other, net 103 97 69
Changes in assets and liabilities:      
Accounts receivable, net (26) (58) 149
Inventories (55) 45 434
Other assets 34 (111) 68
Accounts payable 235 13 (613)
Other liabilities 277 404 (15)
Income taxes, net 18 16 (61)
Pension, net (165) (82) (15)
Other operating activities, net 7 2 16
Net cash provided by (used in) operating activities of continuing operations 1,461 1,469 833
Net cash used in operating activities of discontinued operations (2) (1) (1)
Net cash provided by (used in) operating activities 1,459 1,468 832
Cash flows from investing activities      
Capital expenditures (354) (375) (317)
Net cash used in acquisitions (202) 0 (15)
Net proceeds (payments) from corporate-owned life insurance policies 23 (2) 22
Proceeds from sale of property, plant and equipment and an insurance recovery 22 3 33
Net proceeds from business disposition 0 38 0
Finance receivables repaid 0 0 0
Finance receivables originated 0 0 0
Other investing activities, net 0 1 0
Net cash used in investing activities (511) (335) (277)
Cash flows from financing activities      
Net proceeds from long-term debt 0 0 1,137
Principal payments on long-term debt and nonrecourse debt (18) (524) (548)
Proceeds from borrowings against corporate-owned life insurance policies 0 0 377
Payments on borrowings against corporate-owned life insurance policies 0 0 (377)
Purchases of Textron common stock (867) (921) (183)
Proceeds from exercise of stock options 44 116 22
Dividends paid (17) (18) (18)
Other financing activities, net (3) (1) (17)
Net cash provided by (used in) financing activities (875) (1,349) 393
Effect of exchange rate changes on cash and equivalents (32) (8) 17
Net increase (decrease) in cash and equivalents 41 (224) 965
Cash and equivalents at beginning of year 1,922 2,146 1,181
Cash and equivalents at end of year 1,963 1,922 2,146
Decrease in short-term debt (14) (1) 0
Finance group      
Cash flows from operating activities      
Income from continuing operations 27 7 8
Non-cash items:      
Depreciation and amortization 1 10 5
Deferred income taxes (20) (4) (5)
Asset impairments and TRU inventory charge 0 0 0
Gain on business disposition 0 0 0
Other, net (9) (9) 10
Changes in assets and liabilities:      
Accounts receivable, net 0 0 0
Inventories 0 0 0
Other assets 1 (1) (2)
Accounts payable 0 0 0
Other liabilities (7) 1 (2)
Income taxes, net 0 (5) (1)
Pension, net 0 0 0
Other operating activities, net 0 0 0
Net cash provided by (used in) operating activities of continuing operations (7) (1) 13
Net cash used in operating activities of discontinued operations 0 0 0
Net cash provided by (used in) operating activities (7) (1) 13
Cash flows from investing activities      
Capital expenditures 0 0 0
Net cash used in acquisitions 0 0 0
Net proceeds (payments) from corporate-owned life insurance policies 0 0 0
Proceeds from sale of property, plant and equipment and an insurance recovery 0 0 0
Net proceeds from business disposition 0 0 0
Finance receivables repaid 147 250 128
Finance receivables originated (92) (100) (195)
Other investing activities, net 45 35 19
Net cash used in investing activities 100 185 (48)
Cash flows from financing activities      
Net proceeds from long-term debt 0 0 0
Principal payments on long-term debt and nonrecourse debt (216) (97) (45)
Proceeds from borrowings against corporate-owned life insurance policies 0 0 0
Payments on borrowings against corporate-owned life insurance policies 0 0 0
Purchases of Textron common stock 0 0 0
Proceeds from exercise of stock options 0 0 0
Dividends paid 0 0 0
Other financing activities, net 0 0 12
Net cash provided by (used in) financing activities (216) (97) (33)
Effect of exchange rate changes on cash and equivalents 0 0 0
Net increase (decrease) in cash and equivalents (123) 87 (68)
Cash and equivalents at beginning of year 195 108 176
Cash and equivalents at end of year 72 195 108
Decrease in short-term debt $ 0 $ 0 $ 0
v3.22.4
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2022
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, and the Textron eAviation segment, which was formed in the second quarter of 2022 upon the acquisition of Pipistrel, a manufacturer of electrically powered aircraft as discussed in Note 2. 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.
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 product or service 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 product 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 product or service 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.
Revenue is classified as product or service revenue based on the predominant attributes of each performance obligation.
Commercial Contracts
The majority of our contracts with commercial customers have a single performance obligation as there is only one product or service promised or the promise to transfer the product or service 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 products 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 services. These contracts, which also include those under the U.S. Government-sponsored foreign military sales program, accounted for approximately 22% of total revenues in 2022.  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 products 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 73% of our 2022 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 2022, our cumulative catch-up adjustments decreased segment profit by $16 million and net income by $12 million, ($0.06 per diluted share). In 2021 and 2020, our cumulative catch-up adjustments increased segment profit by $81 million and $72 million, respectively, and net income by $62 million and $55 million, respectively ($0.27 and $0.24 per diluted share, respectively). Revenue was reduced by $25 million in 2022 and increased by $93 million and $77 million in 2021 and 2020, respectively, related to changes in profit booking rates for performance obligations satisfied in prior periods.
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 Sheets. 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 exist 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 realizable value. The majority of our inventories are valued using the last-in, first-out (LIFO) method, while the remaining inventories are generally valued using the first-in, first-out (FIFO) method.
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 81% 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 credit 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 or 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 $601 million, $619 million and $549 million in 2022, 2021 and 2020, 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.
v3.22.4
Business Acquisition and Disposition
12 Months Ended
Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]  
Business Acquisition and Disposition Business Acquisition and Disposition
2022 Business Acquisition
On April 15, 2022, we acquired Pipistrel, a manufacturer of electrically powered aircraft, for a cash purchase price of $239 million, which included the assumption of $35 million of debt and other contractual obligations under the agreement and a final fixed payment of $21 million due in 2024. Beginning in the second quarter of 2022, this business is included in a new reporting segment, Textron eAviation, which combines the operating results of Pipistrel along with other research and development initiatives related to sustainable aviation solutions.
We allocated the purchase price for this business to the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date and recorded $141 million in goodwill, related to expected synergies and the value of the assembled workforce, and $76 million in intangible assets, primarily developed technologies. The intangible assets were primarily valued using the relief-from-royalty method. This method utilizes significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy and requires us to make estimates and assumptions about sales, growth rates, royalty rates and discount rates based on marketplace data.
2021 Business Disposition
On January 25, 2021, we completed the sale of TRU Simulation + Training Canada Inc. (TRU Canada) within our Textron Systems segment for net cash proceeds of $38 million and recorded an after-tax gain of $17 million.
v3.22.4
Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2022
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
IndustrialTextron eAviationTotal
Balance at January 2, 2021$631 $35 $1,009 $482 $— $2,157 
Foreign currency translation— — (9)— (8)
Balance at January 1, 2022631 35 1,010 473 — 2,149 
Acquisitions— — 141 146 
Foreign currency translation(1)— — (8)(3)(12)
Balance at December 31, 2022$633 $37 $1,010 $465 $138 $2,283 
Intangible Assets
Our intangible assets are summarized below:
December 31, 2022January 1, 2022
(Dollars in millions)Weighted-Average
Amortization
Period (in years)
Gross
Carrying
Amount
Accumulated
Amortization
NetGross
Carrying
Amount
Accumulated
Amortization
Net
Patents and technology15$527 $(319)$208 $481 $(289)$192 
Trade names and trademarks18199 (8)191 181 (8)173 
Customer relationships and
   contractual agreements
15392 (330)62 382 (309)73 
Other— — — (3)— 
Total$1,118 $(657)$461 $1,047 $(609)$438 
Trade names and trademarks in the table above include $169 million of indefinite-lived intangible assets at both December 31, 2022 and January 1, 2022. In 2022, 2021 and 2020, amortization expense totaled $52 million, $51 million and $54 million, respectively. Amortization expense is estimated to be approximately $39 million, $37 million, $34 million, $31 million and $29 million in 2023, 2024, 2025, 2026 and 2027, respectively.
v3.22.4
Accounts Receivable and Finance Receivables
12 Months Ended
Dec. 31, 2022
Receivables [Abstract]  
Accounts Receivable and Financing Receivables Accounts Receivable and Finance Receivables
Accounts Receivable
Accounts receivable is composed of the following:
(In millions)December 31,
2022
January 1,
2022
Commercial$755 $704 
U.S. Government contracts124 158 
879 862 
Allowance for credit losses(24)(24)
Total$855 $838 
Finance Receivables
Finance receivables are presented in the following table:
(In millions)December 31,
2022
January 1,
2022
Finance receivables$587 $630 
Allowance for credit losses(24)(25)
Total finance receivables, net$563 $605 
Finance receivables primarily includes loans provided to purchasers of new and pre-owned Textron Aviation aircraft and Bell helicopters. These loans have initial terms ranging from five years to twelve years, amortization terms ranging from eight years to fifteen years and an average balance of $1.8 million at December 31, 2022. 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 December 31, 2022, 58% of our finance receivables were distributed internationally and 42% throughout the U.S., compared with 56% and 44%, respectively, at January 1, 2022. At December 31, 2022 and January 1, 2022, finance receivables of $73 million and $93 million, respectively, have been pledged as collateral for TFC’s debt of $28 million and $43 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.
Finance receivables categorized based on the credit quality indicators and by delinquency aging category are summarized as follows:
(Dollars in millions)December 31,
2022
January 1,
2022
Performing$515 $536 
Watchlist26 — 
Nonaccrual46 94 
Nonaccrual as a percentage of finance receivables7.84%14.92%
Current and less than 31 days past due$579 $624 
31-60 days past due
61-90 days past due— — 
Over 90 days past due
60+ days contractual delinquency as a percentage of finance receivables0.17%0.16%
At December 31, 2022, 43% of our performing finance receivables were originated since the beginning of 2020 and 24% were originated from 2017 to 2019. For finance receivables categorized as watchlist, 94% were originated since the beginning of 2020 and for nonaccrual, 82% were originated from 2017 to 2019.
On a quarterly basis, we evaluate individual larger balance accounts for impairment.  A finance receivable is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement based on our review of the credit quality indicators described above. Impaired finance receivables include both nonaccrual accounts and accounts for which full collection of principal and interest remains probable, but the account’s original terms have been, or are expected to be, significantly modified.  If the modification specifies an interest rate equal to or greater than a market rate for a finance receivable with comparable risk, the account is not considered impaired in years subsequent to the modification.
A summary of impaired finance receivables, excluding leveraged leases, and the average recorded investment is provided below:
(In millions)December 31,
2022
January 1,
2022
Recorded investment:
Impaired finance receivables with specific allowance for credit losses$15 $33 
Impaired finance receivables with no specific allowance for credit losses31 61 
Total$46 $94 
Unpaid principal balance$60 $109 
Allowance for credit losses on impaired finance receivables
Average recorded investment of impaired finance receivables67 117 
A summary of the allowance for credit 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 $91 million and $95 million of leveraged leases at December 31, 2022 and January 1, 2022, respectively, in accordance with U.S. generally accepted accounting principles.
(In millions)December 31,
2022
January 1,
2022
Allowance for credit losses based on collective evaluation$21 $21 
Allowance for credit losses based on individual evaluation
Finance receivables evaluated collectively450 441 
Finance receivables evaluated individually46 94 
v3.22.4
Inventories
12 Months Ended
Dec. 31, 2022
Inventory Disclosure [Abstract]  
Inventories Inventories
Inventories are composed of the following:
(In millions)December 31,
2022
January 1,
2022
Finished goods$991 $1,071 
Work in process1,540 1,548 
Raw materials and components1,019 849 
Total$3,550 $3,468 
At both December 31, 2022 and January 1, 2022, 71% of inventories were valued using the LIFO method. Inventories valued at LIFO cost would have been higher by approximately $594 million and $523 million, at December 31, 2022 and January 1, 2022, respectively, if they had been valued using the FIFO method.
v3.22.4
Property, Plant and Equipment, Net
12 Months Ended
Dec. 31, 2022
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)
December 31,
2022
January 1,
2022
Land, buildings and improvements2-40$2,140 $2,097 
Machinery and equipment1-205,467 5,329 
7,607 7,426 
Accumulated depreciation and amortization(5,084)(4,888)
Total$2,523 $2,538 
The Manufacturing group’s depreciation expense totaled $340 million, $325 million and $325 million in 2022, 2021 and 2020, respectively.
v3.22.4
Other Current Liabilities
12 Months Ended
Dec. 31, 2022
Other Liabilities Disclosure [Abstract]  
Other Current Liabilities Other Current Liabilities
The other current liabilities of our Manufacturing group are summarized below:
(In millions)December 31,
2022
January 1,
2022
Contract liabilities$1,416 $1,105 
Salaries, wages and employer taxes414 477 
Current portion of warranty and product maintenance liabilities171 142 
Other644 620 
Total$2,645 $2,344 
Changes in our warranty liability are as follows:
(In millions)202220212020
Balance at beginning of year$127 $119 $141 
Provision73 70 54 
Settlements(60)(66)(64)
Adjustments*(12)
Balance at end of year$149 $127 $119 
* Adjustments include changes to prior year estimates, new issues on prior year sales, business acquisitions and dispositions, and currency translation adjustments.
v3.22.4
Leases
12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases Leases
We primarily lease certain manufacturing plants, offices, warehouses, training and service centers at various locations worldwide through operating leases. Our operating leases have remaining lease terms up to 26 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 $69 million, $66 million and $61 million in 2022, 2021 and 2020, respectively. Variable and short-term lease costs were not significant. In 2022, 2021 and 2020, cash paid for operating lease liabilities totaled $68 million, $66 million and $60 million, respectively, and is classified in cash flows from operating activities. Noncash transactions totaled $58 million, $86 million and $119 million in 2022, 2021 and 2020, reflecting the recognition of operating lease assets and liabilities for new or extended leases.
Balance sheet and other information related to our operating leases is as follows:
(Dollars in millions)December 31,
2022
January 1,
2022
Other assets$372 $374 
Other current liabilities54 56 
Other liabilities326 325 
Weighted-average remaining lease term (in years)10.410.5
Weighted-average discount rate4.14%3.19%
At December 31, 2022, maturities of our operating lease liabilities on an undiscounted basis totaled $68 million for 2023, $61 million for 2024, $54 million for 2025, $40 million for 2026, $35 million for 2027 and $230 million thereafter.
v3.22.4
Debt and Credit Facilities
12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt and Credit Facilities Debt and Credit Facilities
Our debt is summarized in the table below:
(In millions)December 31,
2022
January 1,
2022
Manufacturing group
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
650 650 
2.45% due 2031
500 500 
Other (weighted-average rate of 2.20% and 2.04%, respectively)
32 35 
Total Manufacturing group debt$3,182 $3,185 
Less: Current portion of long-term debt(7)(6)
Total Long-term debt$3,175 $3,179 
Finance group
Variable-rate note due 2025 (5.86%) and 2022 (1.65%)
$25 $100 
Fixed-rate note due 2027 (4.40%) and 2022 (2.88%)
50 150 
Variable-rate notes due 2022-2027 (weighted-average rate of 5.81% and  1.57%, respectively)*
Fixed-rate notes due 2022-2028 (weighted-average rate of 3.39% and 3.29%, respectively)*
23 36 
Floating Rate Junior Subordinated Notes due 2067 (6.34% and 1.89%, respectively)
272 289 
Total Finance group debt$375 $582 
* 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 December 31, 2022:
(In millions)20232024202520262027
Manufacturing group$$357 $356 $355 $355 
Finance group13 10 28 51 
Total$20 $367 $384 $356 $406 
On October 21, 2022, Textron entered into a senior unsecured revolving credit facility for an aggregate principal amount of $1.0 billion, of which $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 2027 and provides for two one-year extensions at our option with the consent of lenders representing a majority of the commitments under the facility. This new facility replaces the existing five-year facility, which was scheduled to expire in October 2024. At December 31, 2022 and January 1, 2022, there were no amounts borrowed against either facility. At December 31, 2022, there were $9 million of outstanding letters of credit issued under the new facility, and at January 1, 2022, there were $9 million of outstanding letters of credit issued under the prior facility.
Floating Rate Junior Subordinated Notes
The Finance group’s $272 million of 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.  In 2022 and 2021, TFC repurchased $17 million and $5 million, respectively, of these notes. Interest is 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 2022, 2021 and 2020 to maintain compliance with the support agreement.
v3.22.4
Derivative Instruments and Fair Value Measurements
12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Fair Value Measurements Derivative Instruments and Fair Value Measurements
We measure fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  We prioritize the assumptions that market participants would use in pricing the asset or liability into a three-tier fair value hierarchy.  This fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs in which little or no market data exist, requiring companies to develop their own assumptions.  Observable inputs that do not meet the criteria of Level 1, which include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets and liabilities in markets that are not active, are categorized as Level 2.  Level 3 inputs are those that reflect our estimates about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.  Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data.  These unobservable inputs are utilized only to the extent that observable inputs are not available or cost effective to obtain.
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
We manufacture and sell our products in a number of countries throughout the world, and, therefore, we are exposed to movements in foreign currency exchange rates. We primarily utilize foreign currency exchange contracts with maturities of no more than three years to manage this volatility. These contracts qualify as cash flow hedges and are intended to offset the effect of exchange rate fluctuations on forecasted sales, inventory purchases and overhead expenses. Net gains and losses recognized in earnings and Accumulated other comprehensive loss on cash flow hedges, including gains and losses related to hedge ineffectiveness, were not significant in the periods presented.  
Our foreign currency exchange contracts are measured at fair value using the market method valuation technique.  The inputs to this technique utilize current foreign currency exchange forward market rates published by third-party leading financial news and data providers.  These are observable data that represent the rates that the financial institution uses for contracts entered into at that date; however, they are not based on actual transactions, so they are classified as Level 2. At December 31, 2022 and January 1, 2022, we had foreign currency exchange contracts with notional amounts upon which the contracts were based of $354 million and $272 million, respectively. At December 31, 2022, the fair value amount of our foreign currency exchange contracts was an $11 million liability.  At January 1, 2022, the fair value amounts of our foreign currency exchange contracts were a $4 million asset and a $3 million liability.
Our Finance group enters into interest rate swap agreements to mitigate 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 December 31, 2022, we had a swap agreement for a notional amount of $272 million with a maturity of August 2023 and a swap agreement for a notional amount of $25 million, maturing in June 2025, with a combined fair value of an $8 million asset. At January 1, 2022, we had a swap agreement for a notional amount of $289 million with a maturity of August 2023 and an insignificant fair value. The fair value of these swap agreements is determined using values published by third-party leading financial news and data providers. These values are observable data that represent the value that financial institutions use for contracts entered into at that date, but are not based on actual transactions, so they are classified as Level 2.
Assets and Liabilities Not Recorded at Fair Value
The carrying value and estimated fair value of our financial instruments that are not reflected in the financial statements at fair value are as follows:
December 31, 2022January 1, 2022
(In millions)Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Manufacturing group
Debt, excluding leases$(3,175)$(2,872)$(3,181)$(3,346)
Finance group
Finance receivables, excluding leases390 369 413 444 
Debt(375)(294)(582)(546)
Fair value for the Manufacturing group debt is determined using market observable data for similar transactions (Level 2).  The fair value for the Finance group debt was determined primarily based on discounted cash flow analyses using observable market inputs from debt with similar duration, subordination and credit default expectations (Level 2). Fair value estimates for finance receivables were determined based on internally developed discounted cash flow models primarily utilizing significant unobservable inputs (Level 3), which include estimates of the rate of return, financing cost, capital structure and/or discount rate expectations of current market participants combined with estimated loan cash flows based on credit losses, payment rates and expectations of borrowers’ ability to make payments on a timely basis.
v3.22.4
Shareholders' Equity
12 Months Ended
Dec. 31, 2022
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)202220212020
Balance at beginning of year216,935 226,444 227,956 
Share repurchases(13,075)(13,533)(4,145)
Share-based compensation activity2,301 4,024 2,633 
Balance at end of year206,161 216,935 226,444 
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)202220212020
Basic weighted-average shares outstanding212,809 224,106 228,536 
Dilutive effect of stock options2,164 2,414 443 
Diluted weighted-average shares outstanding214,973 226,520 228,979 
In 2022, 2021 and 2020, stock options to purchase 1.0 million, 1.1 million and 7.6 million shares, respectively, of common stock were 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 January 2, 2021$(1,780)$42 $(1)$(1,739)
Other comprehensive income before reclassifications861 (51)813 
Reclassified from Accumulated other comprehensive loss120 14 (1)133 
Other— — 
Balance at January 1, 2022$(799)$$$(789)
Other comprehensive income before reclassifications214 (103)(3)108 
Reclassified from Accumulated other comprehensive loss69 — — 69 
Balance at December 31, 2022$(516)$(94)$(2)$(612)
Other comprehensive income
The before and after-tax components of other comprehensive income are presented below:
202220212020
(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 gains (losses)$285 $(67)$218 $1,148 $(271)$877 $(144)$35 $(109)
Amortization of net actuarial loss*83 (20)63 150 (34)116 184 (43)141 
Amortization of prior service cost*(2)(3)(1)
Recognition of prior service cost(4)— (4)(20)(16)(8)(6)
Pension and postretirement benefits
  adjustments, net
372 (89)283 1,285 (304)981 38 (7)31 
Foreign currency translation adjustments:
Foreign currency translation adjustments(103)— (103)(51)— (51)81 (3)78 
Business disposition— — — 14 — 14 — — — 
Foreign currency translation adjustments, net(103)— (103)(37)— (37)81 (3)78 
Deferred gains (losses) on hedge contracts:
Current deferrals(7)(3)— (1)
Reclassification adjustments— — — (1)— (1)(6)(4)
Deferred gains (losses) on hedge
  contracts, net
(7)(3)— (2)(1)
Total$262 $(85)$177 $1,250 $(304)$946 $117 $(9)$108 
* These components of other comprehensive income are included in the computation of net periodic pension cost. See Note 15 for additional information.
v3.22.4
Segment and Geographic Data
12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment and Geographic Data Segment and Geographic Data
We operate in, and report financial information for, the following six operating segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation 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, public safety and emergency medical helicopter operators, and U.S. and foreign governments.
Textron Systems products and services include unmanned aircraft systems, electronic systems and solutions, advanced marine craft, piston aircraft engines, live military air-to-air and air-to-ship training, weapons and related components, and armored and specialty vehicles for U.S. and international military, government and commercial customers.
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, plastic tanks for selective catalytic reduction systems and battery housing systems for use in electric vehicles 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 Textron eAviation segment manufactures a family of light aircraft and gliders with both electric and combustion engines, and also performs other research and development initiatives related to sustainable aviation solutions.
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 includes non-service components of net periodic benefit cost/(income) and excludes interest expense, net; 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 16. 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 from continuing operations before income taxes, are as follows:
RevenuesSegment Profit (Loss)
(In millions)202220212020202220212020
Textron Aviation$5,073 $4,566 $3,974 $584 $378 $16 
Bell3,091 3,364 3,309 317 408 462 
Textron Systems1,172 1,273 1,313 152 189 152 
Industrial3,465 3,130 3,000 165 140 111 
Textron eAviation16 — — (26)— — 
Finance52 49 55 31 19 10 
Total$12,869 $12,382 $11,651 $1,223 $1,134 $751 
Corporate expenses and other, net(113)(129)(122)
Interest expense, net for Manufacturing group(94)(124)(145)
Special charges*— (25)(147)
Inventory charge*— — (55)
Gain on business disposition— 17 — 
Income from continuing operations before income taxes$1,016 $873 $282 
* See Note 16 for additional information.
Other information by segment is provided below:
AssetsCapital ExpendituresDepreciation and Amortization
(In millions)December 31,
2022
January 1,
2022
202220212020202220212020
Textron Aviation$4,496 $4,390 $138 $115 $94 $152 $139 $138 
Bell2,857 3,382 80 92 117 90 87 91 
Textron Systems1,989 1,980 57 80 42 49 45 43 
Industrial2,555 2,529 78 82 62 93 99 102 
Textron eAviation278 — — — — — 
Finance664 867 — — — 10 
Corporate3,454 2,679 — 10 10 12 
Total$16,293 $15,827 $354 $375 $317 $397 $390 $391 
Geographic Data
Presented below is selected financial information by geographic area:
Revenues*Property, Plant
and Equipment, net**
(In millions)202220212020December 31,
2022
January 1,
2022
United States$8,702 $8,572 $7,943 $2,137 $2,121 
Europe1,468 1,369 1,336 188 201 
Other international2,699 2,441 2,372 198 216 
Total$12,869 $12,382 $11,651 $2,523 $2,538 
* 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.
v3.22.4
Revenues
12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
Disaggregation of Revenues
Our revenues disaggregated by major product type are presented below:
(In millions)202220212020
Aircraft$3,387 $3,116 $2,714 
Aftermarket parts and services1,686 1,450 1,260 
Textron Aviation5,073 4,566 3,974 
Military aircraft and support programs1,740 2,073 2,213 
Commercial helicopters, parts and services1,351 1,291 1,096 
Bell3,091 3,364 3,309 
Textron Systems1,172 1,273 1,313 
Fuel systems and functional components1,771 1,735 1,751 
Specialized vehicles1,694 1,395 1,249 
Industrial3,465 3,130 3,000 
Textron eAviation16 — — 
Finance52 49 55 
Total revenues$12,869 $12,382 $11,651 
Our revenues for our segments by customer type and geographic location are presented below:
(In millions)Textron
Aviation
BellTextron
Systems
IndustrialTextron eAviationFinanceTotal
2022
Customer type:
Commercial$4,959 $1,284 $274 $3,450 $16 $52 $10,035 
U.S. Government114 1,807 898 15 — — 2,834 
Total revenues$5,073 $3,091 $1,172 $3,465 $16 $52 $12,869 
Geographic location:
United States$3,520 $2,242 $1,054 $1,862 $$17 $8,702 
Europe579 139 42 699 1,468 
Other international974 710 76 904 32 2,699 
Total revenues$5,073 $3,091 $1,172 $3,465 $16 $52 $12,869 
2021
Customer type:
Commercial$4,435 $1,328 $257 $3,113 $— $49 $9,182 
U.S. Government131 2,036 1,016 17 — — 3,200 
Total revenues$4,566 $3,364 $1,273 $3,130 $— $49 $12,382 
Geographic location:
United States$3,424 $2,425 $1,126 $1,570 $— $27 $8,572 
Europe396 171 44 757 — 1,369 
Other international746 768 103 803 — 21 2,441 
Total revenues$4,566 $3,364 $1,273 $3,130 $— $49 $12,382 
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 
Other international793 597 140 816 — 26 2,372 
Total revenues$3,974 $3,309 $1,313 $3,000 $— $55 $11,651 
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 December 31, 2022, we had $13.3 billion in remaining performance obligations of which we expect to recognize revenues of approximately 86% through 2024, an additional 11% through 2026, 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 December 31, 2022 and January 1, 2022, contract assets totaled $680 million and $717 million, respectively, and contract liabilities totaled $1.5 billion and $1.2 billion, respectively, reflecting timing differences between revenues recognized, billings and payments from customers. During 2022, 2021 and 2020, we recognized revenues of $873 million, $600 million and $506 million, respectively, that were included in the contract liability balance at the beginning of each year.
v3.22.4
Share-Based Compensation
12 Months Ended
Dec. 31, 2022
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, performance share units or other awards that are payable in shares. For 2022, 2021 and 2020, the awards granted under this Plan primarily included stock options, restricted stock units and performance share units.
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)202220212020
Compensation expense$66 $138 $57 
Income tax benefit(16)(33)(14)
Total compensation expense included in net income$50 $105 $43 
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 utilizing an estimated forfeiture rate. 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 December 31, 2022, we had not recognized $27 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. We typically grant stock appreciation rights to selected non-U.S. employees. At December 31, 2022, outstanding stock appreciation rights totaled 574,315 with a weighted-average exercise price of $51.82 and a weighted-average remaining contractual life of 6.2 years; these units had an intrinsic value of $11 million, compared to $18 million at January 1, 2022.
Stock Options
Stock option compensation expense was $22 million, $21 million and $20 million in 2022, 2021 and 2020, 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:
202220212020
Fair value of options at grant date$19.95$15.05$10.66
Dividend yield0.1%0.2%0.2%
Expected volatility29.2%33.6%29.3%
Risk-free interest rate1.9%0.7%1.1%
Expected term (in years)4.84.74.7
The stock option activity during 2022 is provided below:
(Options in thousands)Number of
Options
Weighted-
Average
Exercise Price
Outstanding at beginning of year8,289 $46.18 
Granted1,232 69.55 
Exercised(1,102)(41.00)
Forfeited or expired(109)(52.66)
Outstanding at end of year8,310 $50.25 
Exercisable at end of year5,596 $47.03 
At December 31, 2022, our outstanding options had an aggregate intrinsic value of $171 million and a weighted-average remaining contractual life of 5.8 years.  Our exercisable options had an aggregate intrinsic value of $133 million and a weighted-average remaining contractual life of 4.6 years at December 31, 2022.  The total intrinsic value of options exercised during 2022, 2021 and 2020 was $32 million, $63 million and $10 million, respectively.
Restricted Stock Units
We issue restricted stock units that include the right to receive dividend equivalents and are settled in either cash or stock. Beginning in 2020, new grants of restricted stock units 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. Compensation cost is determined using the fair value of these units 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 2022 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, nonvested569 $50.01 1,158 $49.92 
Granted104 70.25 226 71.05 
Vested(148)(53.68)(248)(53.98)
Forfeited— — (50)(52.48)
Outstanding at end of year, nonvested525 $52.99 1,086 $53.26 
The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows:
(In millions)202220212020
Fair value of awards vested$25 $20 $17 
Cash paid17 13 11 
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. Performance share units are subject to performance goals set at the beginning of the three-year performance period and vest at the end of the performance period. These units are remeasured to fair value at the end of each reporting period based on the trading price of our common stock and the number of units, as adjusted based on assumptions with respect to performance on the relevant metrics.
The 2022 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, nonvested526 $45.87 
Granted174 71.07 
Vested(273)(40.60)
Outstanding at end of year, nonvested427 $59.51 
The fair value of the performance share units that vested and/or amounts paid under these awards is as follows:
(In millions)202220212020
Fair value of awards vested$19 $18 $
Cash paid15 
v3.22.4
Retirement Plans
12 Months Ended
Dec. 31, 2022
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 $140 million, $131 million and $128 million in 2022, 2021 and 2020, 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 legacy plans include the Textron Master Retirement Plan (TMRP), the Bell Helicopter Textron Master Retirement Plan, and the CWC Castings Division of Textron Inc. Hourly-Rated Employees' Pension Plan, which are each 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 (Income)
The components of net periodic benefit cost (income) and other amounts recognized in other comprehensive income (loss) (OCI) are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
(In millions)202220212020202220212020
Net periodic benefit cost (income)
Service cost$108 $116 $106 $$$
Interest cost272 252 293 
Expected return on plan assets(609)(573)(574)— — — 
Amortization of prior service cost (credit)13 12 11 (5)(5)(5)
Amortization of net actuarial loss (gain)87 152 185 (4)(2)(1)
Net periodic benefit cost (income)*$(129)$(41)$21 $(1)$$
Other changes in plan assets and benefit obligations recognized in OCI
Current year actuarial loss (gain)$(246)$(1,135)$146 $(39)$(13)$(2)
Current year prior service cost20 — — — 
Amortization of net actuarial gain (loss)(87)(152)(185)
Amortization of prior service credit (cost)(13)(12)(11)
Total recognized in OCI, before taxes$(342)$(1,279)$(42)$(30)$(6)$
Total recognized in net periodic benefit cost (income) and OCI$(471)$(1,320)$(21)$(31)$(5)$
* Excludes the cost associated with the defined contribution component that is included in certain of our U.S.-based defined benefit pension plans, of $11 million in 2022, 2021 and 2020, respectively.
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)December 31, 2022January 1, 2022December 31, 2022January 1, 2022
Change in projected benefit obligation
Projected benefit obligation at beginning of year$9,339 $9,833 $202 $230 
Service cost108 116 
Interest cost272 252 
Plan participants’ contributions— — 
Actuarial gains(2,373)(436)(40)(13)
Benefits paid(448)(446)(24)(27)
Plan amendment18 — — 
Foreign exchange rate changes and other(51)— — 
Projected benefit obligation at end of year$6,848 $9,339 $150 $202 
Change in fair value of plan assets
Fair value of plan assets at beginning of year$9,947 $9,080 
Actual return on plan assets(1,520)1,273 
Employer contributions37 42 
Benefits paid(448)(446)
Foreign exchange rate changes and other(73)(2)
Fair value of plan assets at end of year$7,943 $9,947 
Funded status at end of year$1,095 $608 $(150)$(202)
Actuarial gains for both 2022 and 2021 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)December 31, 2022January 1, 2022December 31, 2022January 1, 2022
Non-current assets$1,440 $1,129 $— $— 
Current liabilities(28)(29)(19)(21)
Non-current liabilities(317)(492)(131)(181)
Recognized in Accumulated other comprehensive loss, pre-tax:
Net loss (gain)623 953 (70)(34)
Prior service cost (credit)46 58 (6)(10)
The accumulated benefit obligation for all defined benefit pension plans was $6.6 billion and $8.8 billion at December 31, 2022 and January 1, 2022, respectively, which included $326 million and $418 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)December 31, 2022January 1, 2022
Accumulated benefit obligation$326 $741 
Fair value of plan assets— 298 
Pension plans with projected benefit obligation exceeding the fair value of plan assets are as follows:
(In millions)December 31, 2022January 1, 2022
Projected benefit obligation$597 $819 
Fair value of plan assets252 298 
Assumptions
The weighted-average assumptions we use for our pension and postretirement plans are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
202220212020202220212020
Net periodic benefit cost
Discount rate2.99%2.62%3.36%2.80%2.35%3.20%
Expected long-term rate of return on assets7.10%7.10%7.55%
Rate of compensation increase3.95%3.49%3.50%
Benefit obligations at year-end
Discount rate5.51%2.99%2.62%5.70%2.80%2.35%
Rate of compensation increase3.97%3.95%3.50%
Interest crediting rate for cash balance plans5.25%5.25%5.25%
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 changed to the average remaining life expectancy of the participant; this change reduced 2021 pension cost by approximately $85 million.

Our assumed healthcare cost trend rate for both the medical and prescription drug cost was 6.5% and 7.0% in 2022 and 2021, respectively. We expect this rate to gradually decline to 4.75% by 2029 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%to17%
Global equities%to17%
Debt securities27 %to38%
Real estate%to13%
Private investment partnerships%to13%
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:
December 31, 2022January 1, 2022
(In millions)Level 1Level 2Level 3Not
Subject to
Leveling
Level 1Level 2Level 3Not
Subject to
Leveling
Cash and equivalents$378 $$— $— $200 $$— $— 
Equity securities:
Domestic2,304 — — 225 2,774 — — 271 
International1,171 — — 230 1,772 — — 305 
Mutual funds150 — — — 123 — — — 
Debt securities:
National, state and local governments332 239 — 27 677 274 — 98 
Corporate debt58 663 — 129 150 1,055 — 170 
Private investment partnerships— — — 1,070 — — — 1,098 
Real estate— — 569 395 — — 599 375 
Total$4,393 $905 $569 $2,076 $5,696 $1,335 $599 $2,317 
Cash and equivalents, equity securities and debt securities include commingled 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. The fair value of the commingled funds is determined and published by the fund's investment managers and is the basis for current transactions, therefore, they are categorized as Level 1 in the table above; certain of these funds were previously categorized as not subject to leveling and the prior year amounts have been reclassified to conform to the current presentation. 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)20222021
Balance at beginning of year$599 $458 
Unrealized gains (losses), net(10)90 
Realized gains, net11 
Purchases, sales and settlements, net(31)42 
Balance at end of year$569 $599 
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 2023, we expect to contribute approximately $50 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 2022. 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)20232024202520262027
2028-2032
Pension benefits$442 $450 $458 $466 $474 $2,451 
Postretirement benefits other than pensions19 19 18 17 16 63 
v3.22.4
Special Charges
12 Months Ended
Dec. 31, 2022
Restructuring and Related Activities [Abstract]  
Special Charges Special Charges
There were no special charges recorded in 2022. Special charges recorded in 2021 and 2020 by segment and type of cost are as follows:
(In millions)Severance
Costs
Contract
Terminations
and Other
Asset
Impairments
Total Restructuring ChargesOther
Charges
Total
2021
Industrial$$$12 $25 $— $25 
Total special charges$$$12 $25 $— $25 
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 
2020 COVID-19 Restructuring Plan
In 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. Upon completion of this plan, we had incurred total charges of $133 million, which included severance costs of $77 million, asset impairment charges of $34 million and contract terminations and other costs of $22 million. Of these amounts, $59 million was incurred at Industrial, $37 million at Textron Systems, $33 million at Textron Aviation, and $4 million at Corporate.

In connection with this plan, we ceased manufacturing at TRU Canada's facility in Montreal, resulting in a production suspension of our commercial air transport simulators. As a result of this action and market conditions, we incurred an inventory valuation charge of $55 million in 2020 to write-down TRU Canada’s inventory to its net realizable value and recorded the charge in cost of sales.
2020 Other Charges
In 2020, 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. Based on these events, we performed an interim impairment test of the indefinite-lived Beechcraft and King Air trade name intangible assets and recorded an impairment charge of $32 million.
Restructuring Reserve
Our restructuring reserve activity is summarized below:
(In millions)Severance
Costs
Contract
Terminations
and Other
Total
Balance at January 2, 2021$43 $$52 
Provision for 2020 COVID-19 restructuring plan10 19 
Cash paid(27)(9)(36)
Reversals(5)(1)(6)
Foreign currency translation(1)— (1)
Balance at January 1, 2022$19 $$28 
Cash paid(13)(2)(15)
Foreign currency translation(1)— (1)
Balance at December 31, 2022$$$12 
The majority of the remaining cash outlays of $12 million is expected to be paid in the first quarter of 2023.
v3.22.4
Income Taxes
12 Months Ended
Dec. 31, 2022
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 from continuing operations before income taxes is as follows:
(In millions)202220212020
U.S.$810 $699 $202 
Non-U.S.206 174 80 
Income from continuing operations before income taxes$1,016 $873 $282 
Income tax expense (benefit) is summarized as follows:
(In millions)202220212020
Current expense (benefit):
Federal$272 $41 $(1)
State33 15 (76)
Non-U.S.69 47 57 
374 103 (20)
Deferred expense (benefit):
Federal(182)35 
State(29)(10)
Non-U.S.(9)(2)(15)
(220)23 (7)
Income tax expense (benefit)$154 $126 $(27)
The following table reconciles the federal statutory income tax rate to our effective income tax rate:
202220212020
U.S. Federal statutory income tax rate21.0%21.0%21.0%
Increase (decrease) resulting from:
Research and development tax credits (a)(5.0)(7.0)(18.2)
Foreign-derived intangible income deduction (b)(2.5)
State income taxes (net of federal impact)0.30.5(1.2)
Non-U.S. tax rate differential and foreign tax credits (c)1.81.310.8
State income tax audit settlement (net of federal impact)(18.6)
Outside basis difference in assets held for sale(2.7)
Other, net(0.4)(1.4)(0.7)
Effective income tax rate15.2%14.4%(9.6)%
(a)In 2020, the benefit of research and development tax credits as a percentage of pre-tax income was higher than other periods primarily due to lower pre-tax income.
(b)In 2022, the foreign-derived intangible income deduction is primarily due to the impact of capitalizing research and development expenditures for tax-purposes effective on January 1, 2022 as part of the Tax Cuts and Jobs Act of 2017.
(c)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 back cash 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 2022, 2021 and 2020, 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)202220212020
Balance at beginning of year$207 $183 $221 
Additions for tax positions related to current year24 21 11 
Additions for tax positions of prior years— 10 21 
Reductions for settlements and expiration of statute of limitations (a)— (3)(69)
Reductions for tax positions of prior years— (4)(1)
Balance at end of year$231 $207 $183 
(a)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 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 2017, 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)December 31,
2022
January 1,
2022
Capitalized research and development expenditures (a)$319 $— 
U.S. operating loss and tax credit carryforwards (b)257 313 
Accrued liabilities (c)209 191 
Obligation for pension and postretirement benefits117 175 
Deferred compensation108 108 
Operating lease liabilities 102 103 
Non-U.S. operating loss and tax credit carryforwards (d)53 48 
Prepaid pension benefits (e)(348)(269)
Property, plant and equipment, principally depreciation(222)(204)
Amortization of goodwill and other intangibles(194)(183)
Valuation allowance on deferred tax assets(99)(109)
Operating lease right-of-use assets(99)(101)
Other leasing transactions, principally leveraged leases(53)(73)
Other, net(22)20 
Deferred taxes, net$128 $19 
(a)Effective for tax years beginning after December 31, 2021, research and development expenditures must be capitalized and amortized for tax-purposes as part of the Tax Cuts and Jobs Act of 2017.
(b)At December 31, 2022, U.S. operating loss and tax credit carryforward benefits of $218 million expire through 2042 if not utilized and $39 million may be carried forward indefinitely.
(c)Accrued liabilities include warranty reserves, self-insured liabilities and interest.
(d)At December 31, 2022, non-U.S. operating loss and tax credit carryforward benefits of $50 million may be carried forward indefinitely.
(e)Prepaid pension benefits increased due to the annual valuation adjustment.
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)December 31,
2022
January 1,
2022
Manufacturing group:
Deferred tax assets, net of valuation allowance$223 $129 
Deferred tax liabilities(52)(49)
Finance group – Deferred tax liabilities(43)(61)
Net deferred tax asset$128 $19 
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, totaling $1.6 billion at December 31, 2022 and $1.8 billion at January 1, 2022. Should these earnings be distributed in the future in the form of dividends or otherwise, we would be subject to withholding and local taxes 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.
v3.22.4
Commitments and Contingencies
12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
We are subject to actual and threatened 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; disputes with suppliers, production partners or other third parties; product liability; patent and trademark infringement; employment disputes; and environmental, health and safety 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 $285 million and $213 million at December 31, 2022 and January 1, 2022, 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 $145 million. At December 31, 2022, environmental reserves of $74 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 $13 million as current liabilities. In 2022, 2021 and 2020, to evaluate and remediate contaminated sites, we incurred expense, net of recoveries received, of $9 million, $6 million and $7 million, respectively.
v3.22.4
Supplemental Cash Flow Information
12 Months Ended
Dec. 31, 2022
Supplemental Cash Flow Elements [Abstract]  
Supplemental Cash Flow Information Supplemental Cash Flow Information
Our cash payments and receipts are as follows:
(In millions)202220212020
Interest paid:
Manufacturing group$110 $128 $139 
Finance group13 17 20 
Net taxes paid:
Manufacturing group332 72 34 
Finance group24 21 
v3.22.4
Schedule II - Valuation and Qualifying Accounts
12 Months Ended
Dec. 31, 2022
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]  
Schedule II - Valuation and Qualifying Accounts
Schedule II — Valuation and Qualifying Accounts
(In millions)202220212020
Allowance for credit losses on accounts receivable
Balance at beginning of year$24 $36 $29 
Provision (reversal) for credit losses(1)25 
Deductions from reserves*(2)(11)(18)
Balance at end of year$24 $24 $36 
Allowance for credit losses on finance receivables
Balance at beginning of year$25 $35 $25 
Provision (reversal) for credit losses(4)(9)
Charge-offs— (3)— 
Recoveries
Balance at end of year$24 $25 $35 
Inventory FIFO reserves
Balance at beginning of year$370 $357 $309 
Charged to costs and expenses21 40 105 
Deductions from reserves*(41)(27)(57)
Balance at end of year$350 $370 $357 
* Deductions primarily include amounts written off on uncollectible accounts (less recoveries), inventory disposals, changes to prior year estimates, business dispositions and currency translation adjustments.
v3.22.4
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2022
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, and the Textron eAviation segment, which was formed in the second quarter of 2022 upon the acquisition of Pipistrel, a manufacturer of electrically powered aircraft as discussed in Note 2. 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.
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 product or service 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 product 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 product or service 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.
Revenue is classified as product or service revenue based on the predominant attributes of each performance obligation.
Commercial Contracts
The majority of our contracts with commercial customers have a single performance obligation as there is only one product or service promised or the promise to transfer the product or service 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 products 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 services. These contracts, which also include those under the U.S. Government-sponsored foreign military sales program, accounted for approximately 22% of total revenues in 2022.  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 products 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 73% of our 2022 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 Sheets. 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 exist 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 realizable value. The majority of our inventories are valued using the last-in, first-out (LIFO) method, while the remaining inventories are generally valued using the first-in, first-out (FIFO) method.
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 81% 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 credit 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
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 or 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 $601 million, $619 million and $549 million in 2022, 2021 and 2020, 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.
v3.22.4
Goodwill and Intangible Assets (Tables)
12 Months Ended
Dec. 31, 2022
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
IndustrialTextron eAviationTotal
Balance at January 2, 2021$631 $35 $1,009 $482 $— $2,157 
Foreign currency translation— — (9)— (8)
Balance at January 1, 2022631 35 1,010 473 — 2,149 
Acquisitions— — 141 146 
Foreign currency translation(1)— — (8)(3)(12)
Balance at December 31, 2022$633 $37 $1,010 $465 $138 $2,283 
Schedule of Intangible Assets
Our intangible assets are summarized below:
December 31, 2022January 1, 2022
(Dollars in millions)Weighted-Average
Amortization
Period (in years)
Gross
Carrying
Amount
Accumulated
Amortization
NetGross
Carrying
Amount
Accumulated
Amortization
Net
Patents and technology15$527 $(319)$208 $481 $(289)$192 
Trade names and trademarks18199 (8)191 181 (8)173 
Customer relationships and
   contractual agreements
15392 (330)62 382 (309)73 
Other— — — (3)— 
Total$1,118 $(657)$461 $1,047 $(609)$438 
Schedule of Intangible Assets
Our intangible assets are summarized below:
December 31, 2022January 1, 2022
(Dollars in millions)Weighted-Average
Amortization
Period (in years)
Gross
Carrying
Amount
Accumulated
Amortization
NetGross
Carrying
Amount
Accumulated
Amortization
Net
Patents and technology15$527 $(319)$208 $481 $(289)$192 
Trade names and trademarks18199 (8)191 181 (8)173 
Customer relationships and
   contractual agreements
15392 (330)62 382 (309)73 
Other— — — (3)— 
Total$1,118 $(657)$461 $1,047 $(609)$438 
v3.22.4
Accounts Receivable and Finance Receivables (Tables)
12 Months Ended
Dec. 31, 2022
Receivables [Abstract]  
Accounts Receivable
Accounts receivable is composed of the following:
(In millions)December 31,
2022
January 1,
2022
Commercial$755 $704 
U.S. Government contracts124 158 
879 862 
Allowance for credit losses(24)(24)
Total$855 $838 
Finance Receivables
Finance receivables are presented in the following table:
(In millions)December 31,
2022
January 1,
2022
Finance receivables$587 $630 
Allowance for credit losses(24)(25)
Total finance receivables, net$563 $605 
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)December 31,
2022
January 1,
2022
Performing$515 $536 
Watchlist26 — 
Nonaccrual46 94 
Nonaccrual as a percentage of finance receivables7.84%14.92%
Current and less than 31 days past due$579 $624 
31-60 days past due
61-90 days past due— — 
Over 90 days past due
60+ days contractual delinquency as a percentage of finance receivables0.17%0.16%
Finance Receivables By Delinquency Aging Category
Finance receivables categorized based on the credit quality indicators and by delinquency aging category are summarized as follows:
(Dollars in millions)December 31,
2022
January 1,
2022
Performing$515 $536 
Watchlist26 — 
Nonaccrual46 94 
Nonaccrual as a percentage of finance receivables7.84%14.92%
Current and less than 31 days past due$579 $624 
31-60 days past due
61-90 days past due— — 
Over 90 days past due
60+ days contractual delinquency as a percentage of finance receivables0.17%0.16%
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)December 31,
2022
January 1,
2022
Recorded investment:
Impaired finance receivables with specific allowance for credit losses$15 $33 
Impaired finance receivables with no specific allowance for credit losses31 61 
Total$46 $94 
Unpaid principal balance$60 $109 
Allowance for credit losses on impaired finance receivables
Average recorded investment of impaired finance receivables67 117 
Finance Receivables and Allowance For Credit Losses Based on Impairment Evaluation
A summary of the allowance for credit 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 $91 million and $95 million of leveraged leases at December 31, 2022 and January 1, 2022, respectively, in accordance with U.S. generally accepted accounting principles.
(In millions)December 31,
2022
January 1,
2022
Allowance for credit losses based on collective evaluation$21 $21 
Allowance for credit losses based on individual evaluation
Finance receivables evaluated collectively450 441 
Finance receivables evaluated individually46 94 
v3.22.4
Inventories (Tables)
12 Months Ended
Dec. 31, 2022
Inventory Disclosure [Abstract]  
Inventories
Inventories are composed of the following:
(In millions)December 31,
2022
January 1,
2022
Finished goods$991 $1,071 
Work in process1,540 1,548 
Raw materials and components1,019 849 
Total$3,550 $3,468 
v3.22.4
Property, Plant and Equipment, Net (Tables)
12 Months Ended
Dec. 31, 2022
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)
December 31,
2022
January 1,
2022
Land, buildings and improvements2-40$2,140 $2,097 
Machinery and equipment1-205,467 5,329 
7,607 7,426 
Accumulated depreciation and amortization(5,084)(4,888)
Total$2,523 $2,538 
v3.22.4
Other Current Liabilities (Tables)
12 Months Ended
Dec. 31, 2022
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)December 31,
2022
January 1,
2022
Contract liabilities$1,416 $1,105 
Salaries, wages and employer taxes414 477 
Current portion of warranty and product maintenance liabilities171 142 
Other644 620 
Total$2,645 $2,344 
Changes in Warranty Liability
Changes in our warranty liability are as follows:
(In millions)202220212020
Balance at beginning of year$127 $119 $141 
Provision73 70 54 
Settlements(60)(66)(64)
Adjustments*(12)
Balance at end of year$149 $127 $119 
* Adjustments include changes to prior year estimates, new issues on prior year sales, business acquisitions and dispositions, and currency translation adjustments.
v3.22.4
Leases (Tables)
12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Schedule of Balance Sheet and Other Information
Balance sheet and other information related to our operating leases is as follows:
(Dollars in millions)December 31,
2022
January 1,
2022
Other assets$372 $374 
Other current liabilities54 56 
Other liabilities326 325 
Weighted-average remaining lease term (in years)10.410.5
Weighted-average discount rate4.14%3.19%
v3.22.4
Debt and Credit Facilities (Tables)
12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt Summary
Our debt is summarized in the table below:
(In millions)December 31,
2022
January 1,
2022
Manufacturing group
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
650 650 
2.45% due 2031
500 500 
Other (weighted-average rate of 2.20% and 2.04%, respectively)
32 35 
Total Manufacturing group debt$3,182 $3,185 
Less: Current portion of long-term debt(7)(6)
Total Long-term debt$3,175 $3,179 
Finance group
Variable-rate note due 2025 (5.86%) and 2022 (1.65%)
$25 $100 
Fixed-rate note due 2027 (4.40%) and 2022 (2.88%)
50 150 
Variable-rate notes due 2022-2027 (weighted-average rate of 5.81% and  1.57%, respectively)*
Fixed-rate notes due 2022-2028 (weighted-average rate of 3.39% and 3.29%, respectively)*
23 36 
Floating Rate Junior Subordinated Notes due 2067 (6.34% and 1.89%, respectively)
272 289 
Total Finance group debt$375 $582 
* 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 December 31, 2022:
(In millions)20232024202520262027
Manufacturing group$$357 $356 $355 $355 
Finance group13 10 28 51 
Total$20 $367 $384 $356 $406 
v3.22.4
Derivative Instruments and Fair Value Measurements (Tables)
12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Carrying Value and Estimated Fair Value of Financial Instruments Not Reflected in The Financial Statements 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:
December 31, 2022January 1, 2022
(In millions)Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Manufacturing group
Debt, excluding leases$(3,175)$(2,872)$(3,181)$(3,346)
Finance group
Finance receivables, excluding leases390 369 413 444 
Debt(375)(294)(582)(546)
v3.22.4
Shareholders' Equity (Tables)
12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Capital Stock Outstanding common stock activity is presented below:
(In thousands)202220212020
Balance at beginning of year216,935 226,444 227,956 
Share repurchases(13,075)(13,533)(4,145)
Share-based compensation activity2,301 4,024 2,633 
Balance at end of year206,161 216,935 226,444 
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)202220212020
Basic weighted-average shares outstanding212,809 224,106 228,536 
Dilutive effect of stock options2,164 2,414 443 
Diluted weighted-average shares outstanding214,973 226,520 228,979 
Schedule of Components of Accumulated Other Comprehensive Loss
The components of Accumulated other comprehensive loss are presented below:
(In millions)Pension and
Postretirement
Benefits
Adjustments
Foreign
Currency
Translation
Adjustments
Deferred
Gains (Losses)
on Hedge
Contracts
Accumulated
Other
Comprehensive
Loss
Balance at January 2, 2021$(1,780)$42 $(1)$(1,739)
Other comprehensive income before reclassifications861 (51)813 
Reclassified from Accumulated other comprehensive loss120 14 (1)133 
Other— — 
Balance at January 1, 2022$(799)$$$(789)
Other comprehensive income before reclassifications214 (103)(3)108 
Reclassified from Accumulated other comprehensive loss69 — — 69 
Balance at December 31, 2022$(516)$(94)$(2)$(612)
Schedule of Before and After Tax Components of Other Comprehensive Income
The before and after-tax components of other comprehensive income are presented below:
202220212020
(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 gains (losses)$285 $(67)$218 $1,148 $(271)$877 $(144)$35 $(109)
Amortization of net actuarial loss*83 (20)63 150 (34)116 184 (43)141 
Amortization of prior service cost*(2)(3)(1)
Recognition of prior service cost(4)— (4)(20)(16)(8)(6)
Pension and postretirement benefits
  adjustments, net
372 (89)283 1,285 (304)981 38 (7)31 
Foreign currency translation adjustments:
Foreign currency translation adjustments(103)— (103)(51)— (51)81 (3)78 
Business disposition— — — 14 — 14 — — — 
Foreign currency translation adjustments, net(103)— (103)(37)— (37)81 (3)78 
Deferred gains (losses) on hedge contracts:
Current deferrals(7)(3)— (1)
Reclassification adjustments— — — (1)— (1)(6)(4)
Deferred gains (losses) on hedge
  contracts, net
(7)(3)— (2)(1)
Total$262 $(85)$177 $1,250 $(304)$946 $117 $(9)$108 
* These components of other comprehensive income are included in the computation of net periodic pension cost. See Note 15 for additional information.
v3.22.4
Segment and Geographic Data (Tables)
12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Revenues by Segment and Reconciliation of Segment Profit to Income From Continuing Operations Before Income Taxes
Our revenues by segment, along with a reconciliation of segment profit to income from continuing operations before income taxes, are as follows:
RevenuesSegment Profit (Loss)
(In millions)202220212020202220212020
Textron Aviation$5,073 $4,566 $3,974 $584 $378 $16 
Bell3,091 3,364 3,309 317 408 462 
Textron Systems1,172 1,273 1,313 152 189 152 
Industrial3,465 3,130 3,000 165 140 111 
Textron eAviation16 — — (26)— — 
Finance52 49 55 31 19 10 
Total$12,869 $12,382 $11,651 $1,223 $1,134 $751 
Corporate expenses and other, net(113)(129)(122)
Interest expense, net for Manufacturing group(94)(124)(145)
Special charges*— (25)(147)
Inventory charge*— — (55)
Gain on business disposition— 17 — 
Income from continuing operations before income taxes$1,016 $873 $282 
* See Note 16 for additional information.
Other Information by Segment
Other information by segment is provided below:
AssetsCapital ExpendituresDepreciation and Amortization
(In millions)December 31,
2022
January 1,
2022
202220212020202220212020
Textron Aviation$4,496 $4,390 $138 $115 $94 $152 $139 $138 
Bell2,857 3,382 80 92 117 90 87 91 
Textron Systems1,989 1,980 57 80 42 49 45 43 
Industrial2,555 2,529 78 82 62 93 99 102 
Textron eAviation278 — — — — — 
Finance664 867 — — — 10 
Corporate3,454 2,679 — 10 10 12 
Total$16,293 $15,827 $354 $375 $317 $397 $390 $391 
Selected Financial Information of by Geographic Area
Presented below is selected financial information by geographic area:
Revenues*Property, Plant
and Equipment, net**
(In millions)202220212020December 31,
2022
January 1,
2022
United States$8,702 $8,572 $7,943 $2,137 $2,121 
Europe1,468 1,369 1,336 188 201 
Other international2,699 2,441 2,372 198 216 
Total$12,869 $12,382 $11,651 $2,523 $2,538 
* 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.
v3.22.4
Revenues (Tables)
12 Months Ended
Dec. 31, 2022
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)202220212020
Aircraft$3,387 $3,116 $2,714 
Aftermarket parts and services1,686 1,450 1,260 
Textron Aviation5,073 4,566 3,974 
Military aircraft and support programs1,740 2,073 2,213 
Commercial helicopters, parts and services1,351 1,291 1,096 
Bell3,091 3,364 3,309 
Textron Systems1,172 1,273 1,313 
Fuel systems and functional components1,771 1,735 1,751 
Specialized vehicles1,694 1,395 1,249 
Industrial3,465 3,130 3,000 
Textron eAviation16 — — 
Finance52 49 55 
Total revenues$12,869 $12,382 $11,651 
Our revenues for our segments by customer type and geographic location are presented below:
(In millions)Textron
Aviation
BellTextron
Systems
IndustrialTextron eAviationFinanceTotal
2022
Customer type:
Commercial$4,959 $1,284 $274 $3,450 $16 $52 $10,035 
U.S. Government114 1,807 898 15 — — 2,834 
Total revenues$5,073 $3,091 $1,172 $3,465 $16 $52 $12,869 
Geographic location:
United States$3,520 $2,242 $1,054 $1,862 $$17 $8,702 
Europe579 139 42 699 1,468 
Other international974 710 76 904 32 2,699 
Total revenues$5,073 $3,091 $1,172 $3,465 $16 $52 $12,869 
2021
Customer type:
Commercial$4,435 $1,328 $257 $3,113 $— $49 $9,182 
U.S. Government131 2,036 1,016 17 — — 3,200 
Total revenues$4,566 $3,364 $1,273 $3,130 $— $49 $12,382 
Geographic location:
United States$3,424 $2,425 $1,126 $1,570 $— $27 $8,572 
Europe396 171 44 757 — 1,369 
Other international746 768 103 803 — 21 2,441 
Total revenues$4,566 $3,364 $1,273 $3,130 $— $49 $12,382 
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 
Other international793 597 140 816 — 26 2,372 
Total revenues$3,974 $3,309 $1,313 $3,000 $— $55 $11,651 
v3.22.4
Share-Based Compensation (Tables)
12 Months Ended
Dec. 31, 2022
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)202220212020
Compensation expense$66 $138 $57 
Income tax benefit(16)(33)(14)
Total compensation expense included in net income$50 $105 $43 
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:
202220212020
Fair value of options at grant date$19.95$15.05$10.66
Dividend yield0.1%0.2%0.2%
Expected volatility29.2%33.6%29.3%
Risk-free interest rate1.9%0.7%1.1%
Expected term (in years)4.84.74.7
Stock option activity
The stock option activity during 2022 is provided below:
(Options in thousands)Number of
Options
Weighted-
Average
Exercise Price
Outstanding at beginning of year8,289 $46.18 
Granted1,232 69.55 
Exercised(1,102)(41.00)
Forfeited or expired(109)(52.66)
Outstanding at end of year8,310 $50.25 
Exercisable at end of year5,596 $47.03 
Activity for Restricted Stock Units
The 2022 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, nonvested569 $50.01 1,158 $49.92 
Granted104 70.25 226 71.05 
Vested(148)(53.68)(248)(53.98)
Forfeited— — (50)(52.48)
Outstanding at end of year, nonvested525 $52.99 1,086 $53.26 
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)202220212020
Fair value of awards vested$25 $20 $17 
Cash paid17 13 11 
The fair value of the performance share units that vested and/or amounts paid under these awards is as follows:
(In millions)202220212020
Fair value of awards vested$19 $18 $
Cash paid15 
Activity for Performance Share Units
The 2022 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, nonvested526 $45.87 
Granted174 71.07 
Vested(273)(40.60)
Outstanding at end of year, nonvested427 $59.51 
v3.22.4
Retirement Plans (Tables)
12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Components of Net Periodic Benefit Cost (Income)
The components of net periodic benefit cost (income) and other amounts recognized in other comprehensive income (loss) (OCI) are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
(In millions)202220212020202220212020
Net periodic benefit cost (income)
Service cost$108 $116 $106 $$$
Interest cost272 252 293 
Expected return on plan assets(609)(573)(574)— — — 
Amortization of prior service cost (credit)13 12 11 (5)(5)(5)
Amortization of net actuarial loss (gain)87 152 185 (4)(2)(1)
Net periodic benefit cost (income)*$(129)$(41)$21 $(1)$$
Other changes in plan assets and benefit obligations recognized in OCI
Current year actuarial loss (gain)$(246)$(1,135)$146 $(39)$(13)$(2)
Current year prior service cost20 — — — 
Amortization of net actuarial gain (loss)(87)(152)(185)
Amortization of prior service credit (cost)(13)(12)(11)
Total recognized in OCI, before taxes$(342)$(1,279)$(42)$(30)$(6)$
Total recognized in net periodic benefit cost (income) and OCI$(471)$(1,320)$(21)$(31)$(5)$
* Excludes the cost associated with the defined contribution component that is included in certain of our U.S.-based defined benefit pension plans, of $11 million in 2022, 2021 and 2020, respectively.
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)December 31, 2022January 1, 2022December 31, 2022January 1, 2022
Change in projected benefit obligation
Projected benefit obligation at beginning of year$9,339 $9,833 $202 $230 
Service cost108 116 
Interest cost272 252 
Plan participants’ contributions— — 
Actuarial gains(2,373)(436)(40)(13)
Benefits paid(448)(446)(24)(27)
Plan amendment18 — — 
Foreign exchange rate changes and other(51)— — 
Projected benefit obligation at end of year$6,848 $9,339 $150 $202 
Change in fair value of plan assets
Fair value of plan assets at beginning of year$9,947 $9,080 
Actual return on plan assets(1,520)1,273 
Employer contributions37 42 
Benefits paid(448)(446)
Foreign exchange rate changes and other(73)(2)
Fair value of plan assets at end of year$7,943 $9,947 
Funded status at end of year$1,095 $608 $(150)$(202)
Amounts Recognized In Our Balance Sheets
Amounts recognized in our balance sheets are as follows:
Pension BenefitsPostretirement Benefits
Other than Pensions
(In millions)December 31, 2022January 1, 2022December 31, 2022January 1, 2022
Non-current assets$1,440 $1,129 $— $— 
Current liabilities(28)(29)(19)(21)
Non-current liabilities(317)(492)(131)(181)
Recognized in Accumulated other comprehensive loss, pre-tax:
Net loss (gain)623 953 (70)(34)
Prior service cost (credit)46 58 (6)(10)
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)December 31, 2022January 1, 2022
Accumulated benefit obligation$326 $741 
Fair value of plan assets— 298 
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)December 31, 2022January 1, 2022
Projected benefit obligation$597 $819 
Fair value of plan assets252 298 
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
202220212020202220212020
Net periodic benefit cost
Discount rate2.99%2.62%3.36%2.80%2.35%3.20%
Expected long-term rate of return on assets7.10%7.10%7.55%
Rate of compensation increase3.95%3.49%3.50%
Benefit obligations at year-end
Discount rate5.51%2.99%2.62%5.70%2.80%2.35%
Rate of compensation increase3.97%3.95%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%to17%
Global equities%to17%
Debt securities27 %to38%
Real estate%to13%
Private investment partnerships%to13%
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:
December 31, 2022January 1, 2022
(In millions)Level 1Level 2Level 3Not
Subject to
Leveling
Level 1Level 2Level 3Not
Subject to
Leveling
Cash and equivalents$378 $$— $— $200 $$— $— 
Equity securities:
Domestic2,304 — — 225 2,774 — — 271 
International1,171 — — 230 1,772 — — 305 
Mutual funds150 — — — 123 — — — 
Debt securities:
National, state and local governments332 239 — 27 677 274 — 98 
Corporate debt58 663 — 129 150 1,055 — 170 
Private investment partnerships— — — 1,070 — — — 1,098 
Real estate— — 569 395 — — 599 375 
Total$4,393 $905 $569 $2,076 $5,696 $1,335 $599 $2,317 
Reconciliation for Fair Value Measurements That Use Significant Unobservable Inputs
The table below presents a reconciliation of the fair value measurements for owned real estate properties, which use significant unobservable inputs (Level 3):
(In millions)20222021
Balance at beginning of year$599 $458 
Unrealized gains (losses), net(10)90 
Realized gains, net11 
Purchases, sales and settlements, net(31)42 
Balance at end of year$569 $599 
Estimated Future Benefit Payments Which Reflect Expected Future Service To Be Paid By The Plans Benefit payments that we expect to pay on an undiscounted basis are as follows:
(In millions)20232024202520262027
2028-2032
Pension benefits$442 $450 $458 $466 $474 $2,451 
Postretirement benefits other than pensions19 19 18 17 16 63 
v3.22.4
Special Charges (Tables)
12 Months Ended
Dec. 31, 2022
Restructuring and Related Activities [Abstract]  
Schedule of Special Charges Special charges recorded in 2021 and 2020 by segment and type of cost are as follows:
(In millions)Severance
Costs
Contract
Terminations
and Other
Asset
Impairments
Total Restructuring ChargesOther
Charges
Total
2021
Industrial$$$12 $25 $— $25 
Total special charges$$$12 $25 $— $25 
2020
Textron Aviation$31 $— $$33 $32 $65 
Industrial27 34 41 
Textron Systems11 12 14 37 — 37 
Corporate— — — 
Total special charges$73 $13 $22 $108 $39 $147 
Schedule of Restructuring Reserve Activity
Our restructuring reserve activity is summarized below:
(In millions)Severance
Costs
Contract
Terminations
and Other
Total
Balance at January 2, 2021$43 $$52 
Provision for 2020 COVID-19 restructuring plan10 19 
Cash paid(27)(9)(36)
Reversals(5)(1)(6)
Foreign currency translation(1)— (1)
Balance at January 1, 2022$19 $$28 
Cash paid(13)(2)(15)
Foreign currency translation(1)— (1)
Balance at December 31, 2022$$$12 
v3.22.4
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Before Income Taxes Income from continuing operations before income taxes is as follows:
(In millions)202220212020
U.S.$810 $699 $202 
Non-U.S.206 174 80 
Income from continuing operations before income taxes$1,016 $873 $282 
Income Tax Expense For Continuing Operations
Income tax expense (benefit) is summarized as follows:
(In millions)202220212020
Current expense (benefit):
Federal$272 $41 $(1)
State33 15 (76)
Non-U.S.69 47 57 
374 103 (20)
Deferred expense (benefit):
Federal(182)35 
State(29)(10)
Non-U.S.(9)(2)(15)
(220)23 (7)
Income tax expense (benefit)$154 $126 $(27)
Federal Statutory Income Tax Rate To Effective Income Tax Rate
The following table reconciles the federal statutory income tax rate to our effective income tax rate:
202220212020
U.S. Federal statutory income tax rate21.0%21.0%21.0%
Increase (decrease) resulting from:
Research and development tax credits (a)(5.0)(7.0)(18.2)
Foreign-derived intangible income deduction (b)(2.5)
State income taxes (net of federal impact)0.30.5(1.2)
Non-U.S. tax rate differential and foreign tax credits (c)1.81.310.8
State income tax audit settlement (net of federal impact)(18.6)
Outside basis difference in assets held for sale(2.7)
Other, net(0.4)(1.4)(0.7)
Effective income tax rate15.2%14.4%(9.6)%
(a)In 2020, the benefit of research and development tax credits as a percentage of pre-tax income was higher than other periods primarily due to lower pre-tax income.
(b)In 2022, the foreign-derived intangible income deduction is primarily due to the impact of capitalizing research and development expenditures for tax-purposes effective on January 1, 2022 as part of the Tax Cuts and Jobs Act of 2017.
(c)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 back cash 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)202220212020
Balance at beginning of year$207 $183 $221 
Additions for tax positions related to current year24 21 11 
Additions for tax positions of prior years— 10 21 
Reductions for settlements and expiration of statute of limitations (a)— (3)(69)
Reductions for tax positions of prior years— (4)(1)
Balance at end of year$231 $207 $183 
(a)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.
Deferred Tax Assets and Liabilities
The significant components of our net deferred tax assets/(liabilities) are provided below:
(In millions)December 31,
2022
January 1,
2022
Capitalized research and development expenditures (a)$319 $— 
U.S. operating loss and tax credit carryforwards (b)257 313 
Accrued liabilities (c)209 191 
Obligation for pension and postretirement benefits117 175 
Deferred compensation108 108 
Operating lease liabilities 102 103 
Non-U.S. operating loss and tax credit carryforwards (d)53 48 
Prepaid pension benefits (e)(348)(269)
Property, plant and equipment, principally depreciation(222)(204)
Amortization of goodwill and other intangibles(194)(183)
Valuation allowance on deferred tax assets(99)(109)
Operating lease right-of-use assets(99)(101)
Other leasing transactions, principally leveraged leases(53)(73)
Other, net(22)20 
Deferred taxes, net$128 $19 
(a)Effective for tax years beginning after December 31, 2021, research and development expenditures must be capitalized and amortized for tax-purposes as part of the Tax Cuts and Jobs Act of 2017.
(b)At December 31, 2022, U.S. operating loss and tax credit carryforward benefits of $218 million expire through 2042 if not utilized and $39 million may be carried forward indefinitely.
(c)Accrued liabilities include warranty reserves, self-insured liabilities and interest.
(d)At December 31, 2022, non-U.S. operating loss and tax credit carryforward benefits of $50 million may be carried forward indefinitely.
(e)Prepaid pension benefits increased due to the annual valuation adjustment.
The following table presents the breakdown of our deferred taxes:
(In millions)December 31,
2022
January 1,
2022
Manufacturing group:
Deferred tax assets, net of valuation allowance$223 $129 
Deferred tax liabilities(52)(49)
Finance group – Deferred tax liabilities(43)(61)
Net deferred tax asset$128 $19 
v3.22.4
Supplemental Cash Flow Information (Tables)
12 Months Ended
Dec. 31, 2022
Supplemental Cash Flow Elements [Abstract]  
Cash payments and receipts
Our cash payments and receipts are as follows:
(In millions)202220212020
Interest paid:
Manufacturing group$110 $128 $139 
Finance group13 17 20 
Net taxes paid:
Manufacturing group332 72 34 
Finance group24 21 
v3.22.4
Summary of Significant Accounting Policies - Principle of Consolidation and Financial Statement Presentation (Details)
12 Months Ended
Dec. 31, 2022
borrowing_group
Accounting Policies [Abstract]  
Number of borrowing groups 2
v3.22.4
Summary of Significant Accounting Policies - Collaborative Arrangements (Details) - Collaborative Arrangement, Transaction with Party to Collaborative Arrangement
12 Months Ended
Dec. 31, 2022
Cost -plus contract  
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]  
Profit allocation percentage 50.00%
Fixed-price contract  
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]  
Profit allocation percentage 50.00%
v3.22.4
Summary of Significant Accounting Policies - Revenue Recognition (Details)
12 Months Ended
Dec. 31, 2022
U. S. Government  
Revenues  
Contract with U.S. Government, percent of total revenues 22.00%
U. S. Government | Fixed-price and fixed-price incentive contracts  
Revenues  
Percentage of revenue under fixed-price and fixed-price incentive contracts 73.00%
Maximum | U. S. Government | Performance-based  
Revenues  
Percentage of contract price received for performance based payments on US Government Contracts 90.00%
Maximum | U. S. Government | Progress payments  
Revenues  
Percentage of costs incurred representing progress payments on US Government Contracts 80.00%
Commercial Contract | Minimum  
Revenues  
Period of warranty programs 1 year
Commercial Contract | Maximum  
Revenues  
Period of warranty programs 5 years
v3.22.4
Summary of Significant Accounting Policies - Finance Revenues (Details)
12 Months Ended
Dec. 31, 2022
Minimum | Nonperforming  
Revenues  
Number of months of contractual delinquency to classify accounts as nonaccrual unless such collection is not doubtful 3 months
v3.22.4
Summary of Significant Accounting Policies - Contracts Estimates (Details) - Cumulative catch-up method - USD ($)
$ / shares in Units, $ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Use of Estimates      
Cumulative catch-up adjustments increase (decrease) $ (16) $ 81 $ 72
Change in accounting estimate financial effect increase (decrease) in net income $ (12) $ 62 $ 55
Change in accounting estimate financial effect increase (decrease) in income, per share (in dollars per share) $ (0.06) $ 0.27 $ 0.24
Revenue increased (reduced) from performance obligations satisfied in prior periods $ (25) $ 93 $ 77
v3.22.4
Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details)
12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets  
Gross intangible assets amortized based on the cash flow streams 81.00%
v3.22.4
Summary of Significant Accounting Policies - Environmental Liabilities and Asset Retirement Obligations (Details)
Dec. 31, 2022
USD ($)
Environmental Liabilities and Asset Retirement Obligations  
Asset retirement obligations $ 0
v3.22.4
Summary of Significant Accounting Policies - Research and Development Costs (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Research and Development Costs      
Research and development costs $ 601 $ 619 $ 549
v3.22.4
Business Acquisition and Disposition (Details) - USD ($)
$ in Millions
12 Months Ended
Apr. 15, 2022
Jan. 25, 2021
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Net proceeds from business disposition     $ 0 $ 38 $ 0
After tax gain     $ 0 $ 17 $ 0
Disposition of businesses | TRU Canada          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Net proceeds from business disposition   $ 38      
After tax gain   $ 17      
Pipistrel          
Business Acquisition [Line Items]          
Purchase price $ 239        
Assumption of debt and other contractual obligations 35        
Final fixed purchase price payment 21        
Purchase price allocated to goodwill 141        
Purchase price allocated to intangible assets $ 76        
v3.22.4
Goodwill and Intangible Assets - Goodwill (Details) - Manufacturing group - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Changes in the carrying amount of goodwill    
Beginning Balance $ 2,149 $ 2,157
Acquisitions 146  
Foreign currency translation (12) (8)
Ending Balance 2,283 2,149
Textron Aviation    
Changes in the carrying amount of goodwill    
Beginning Balance 631 631
Acquisitions 3  
Foreign currency translation (1) 0
Ending Balance 633 631
Bell    
Changes in the carrying amount of goodwill    
Beginning Balance 35 35
Acquisitions 2  
Foreign currency translation 0 0
Ending Balance 37 35
Textron Systems    
Changes in the carrying amount of goodwill    
Beginning Balance 1,010 1,009
Acquisitions 0  
Foreign currency translation 0 1
Ending Balance 1,010 1,010
Industrial    
Changes in the carrying amount of goodwill    
Beginning Balance 473 482
Acquisitions 0  
Foreign currency translation (8) (9)
Ending Balance 465 473
Textron eAviation    
Changes in the carrying amount of goodwill    
Beginning Balance 0 0
Acquisitions 141  
Foreign currency translation (3) 0
Ending Balance $ 138 $ 0
v3.22.4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Intangible assets    
Gross Carrying Amount $ 1,118 $ 1,047
Accumulated Amortization (657) (609)
Net $ 461 438
Patents and technology    
Intangible assets    
Weighted-Average Amortization Period (in years) 15 years  
Gross Carrying Amount $ 527 481
Accumulated Amortization (319) (289)
Net $ 208 192
Trade names and trademarks    
Intangible assets    
Weighted-Average Amortization Period (in years) 18 years  
Gross Carrying Amount $ 199 181
Accumulated Amortization (8) (8)
Net $ 191 173
Customer relationships and contractual agreements    
Intangible assets    
Weighted-Average Amortization Period (in years) 15 years  
Gross Carrying Amount $ 392 382
Accumulated Amortization (330) (309)
Net 62 73
Other    
Intangible assets    
Gross Carrying Amount 0 3
Accumulated Amortization 0 (3)
Net $ 0 $ 0
v3.22.4
Goodwill and Intangible Assets - Narrative (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Intangible assets      
Total amortization expense $ 52 $ 51 $ 54
2023 39    
2024 37    
2025 34    
2026 31    
2027 29    
Trade names and trademarks      
Intangible assets      
Indefinite-lived intangible assets $ 169 $ 169  
v3.22.4
Accounts Receivable and Finance Receivables - Accounts Receivable (Details) - Manufacturing group - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Accounts Receivable    
Accounts receivable, gross $ 879 $ 862
Allowance for credit losses (24) (24)
Total 855 838
Commerical    
Accounts Receivable    
Accounts receivable, gross 755 704
U. S. Government    
Accounts Receivable    
Accounts receivable, gross $ 124 $ 158
v3.22.4
Accounts Receivable and Finance Receivables - Finance Receivables (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Finance Receivables    
Finance receivables $ 587 $ 630
Allowance for credit losses (24) (25)
Total finance receivables, net $ 563 $ 605
v3.22.4
Accounts Receivable and Finance Receivables - Finance Receivables, Narrative (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Financing receivable, credit quality indicator    
Average balance of finance receivables $ 1.8  
Percentage of internationally based finance receivables 58.00% 56.00%
Percentage of US based finance receivables 42.00% 44.00%
Pledged assets finance receivable pledged as collateral $ 73.0 $ 93.0
Value of debt collateralized $ 28.0 $ 43.0
Performing    
Financing receivable, credit quality indicator    
Financing receivables originated since the beginning of 2020 43.00%  
Financing receivables originated from 2017 to 2019 24.00%  
Nonperforming | Watchlist    
Financing receivable, credit quality indicator    
Financing receivables originated since the beginning of 2020 94.00%  
Nonperforming | Nonaccrual    
Financing receivable, credit quality indicator    
Financing receivables originated from 2017 to 2019 82.00%  
Minimum    
Financing receivable, credit quality indicator    
Contractual terms 5 years  
Amortization period 8 years  
Minimum | Nonperforming    
Financing receivable, credit quality indicator    
Number of months of contractual delinquency to classify accounts as nonaccrual unless such collection is not doubtful 3 months  
Maximum    
Financing receivable, credit quality indicator    
Contractual terms 12 years  
Amortization period 15 years  
v3.22.4
Accounts Receivable and Finance Receivables - Finance Receivables By Delinquency Aging Category (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Finance receivables held for investment by delinquency aging    
Finance receivables $ 587 $ 630
60+ days contractual delinquency as a percentage of finance receivables 0.17% 0.16%
Current and less than 31 days past due    
Finance receivables held for investment by delinquency aging    
Finance receivables $ 579 $ 624
31-60 days past due    
Finance receivables held for investment by delinquency aging    
Finance receivables 7 5
61-90 days past due    
Finance receivables held for investment by delinquency aging    
Finance receivables 0 0
Over 90 days past due    
Finance receivables held for investment by delinquency aging    
Finance receivables 1 1
Performing    
Finance receivables held for investment by delinquency aging    
Finance receivables $ 515 $ 536
Nonperforming    
Finance receivables held for investment by delinquency aging    
Nonaccrual as a percentage of finance receivables 7.84% 14.92%
Nonperforming | Watchlist    
Finance receivables held for investment by delinquency aging    
Finance receivables $ 26 $ 0
Nonperforming | Nonaccrual    
Finance receivables held for investment by delinquency aging    
Finance receivables $ 46 $ 94
v3.22.4
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
Dec. 31, 2022
Jan. 01, 2022
Summary of impaired finance receivables, excluding leveraged leases, and the average recorded investment    
Impaired finance receivables with specific allowance for credit losses $ 15 $ 33
Impaired finance receivables with no specific allowance for credit losses 31 61
Total 46 94
Unpaid principal balance 60 109
Allowance for credit losses on impaired finance receivables 3 4
Average recorded investment of impaired finance receivables $ 67 $ 117
v3.22.4
Accounts Receivable and Finance Receivables - Allowance for Losses On Finance Receivables Based on How The Finance Receivables are Evaluated For Impairment (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Finance receivables    
Leveraged leases $ 91 $ 95
Allowance for losses    
Allowance for credit losses based on collective evaluation 21 21
Allowance for credit losses based on individual evaluation 3 4
Finance receivables evaluated collectively 450 441
Finance receivables evaluated individually $ 46 $ 94
v3.22.4
Inventories (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Inventories    
Finished goods $ 991 $ 1,071
Work in process 1,540 1,548
Raw materials and components 1,019 849
Total $ 3,550 $ 3,468
Percentage of inventories valued using LIFO 71.00% 71.00%
Amount LIFO inventory would be higher by had it been valued using the FIFO method $ 594 $ 523
v3.22.4
Property, Plant and Equipment, Net (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Property, Plant and Equipment [Line Items]      
Total $ 2,523 $ 2,538  
Manufacturing group      
Property, Plant and Equipment [Line Items]      
Property, plant and equipment, gross 7,607 7,426  
Accumulated depreciation and amortization (5,084) (4,888)  
Total 2,523 2,538  
Depreciation expense 340 325 $ 325
Manufacturing group | Land, buildings and improvements      
Property, Plant and Equipment [Line Items]      
Property, plant and equipment, gross $ 2,140 2,097  
Manufacturing group | Land, buildings and improvements | Minimum      
Property, Plant and Equipment [Line Items]      
Useful Lives (in years) 2 years    
Manufacturing group | Land, buildings and improvements | Maximum      
Property, Plant and Equipment [Line Items]      
Useful Lives (in years) 40 years    
Manufacturing group | Machinery and equipment      
Property, Plant and Equipment [Line Items]      
Property, plant and equipment, gross $ 5,467 $ 5,329  
Manufacturing group | Machinery and equipment | Minimum      
Property, Plant and Equipment [Line Items]      
Useful Lives (in years) 1 year    
Manufacturing group | Machinery and equipment | Maximum      
Property, Plant and Equipment [Line Items]      
Useful Lives (in years) 20 years    
v3.22.4
Other Current Liabilities - Accrued liabilities of Manufacturing group (Details) - Manufacturing group - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Other Liabilities [Line Items]    
Contract liabilities $ 1,416 $ 1,105
Salaries, wages and employer taxes 414 477
Current portion of warranty and product maintenance liabilities 171 142
Other 644 620
Total $ 2,645 $ 2,344
v3.22.4
Other Current Liabilities - Changes in warranty liability (Details) - Manufacturing group - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]      
Balance at beginning of year $ 127 $ 119 $ 141
Provision 73 70 54
Settlements (60) (66) (64)
Adjustments 9 4 (12)
Balance at end of year $ 149 $ 127 $ 119
v3.22.4
Leases - Narrative (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Leases [Abstract]      
Remaining lease term 26 years    
Option to extend the lease true    
Option to extend the lease, term 25 years    
Operating lease cost $ 69 $ 66 $ 61
Cash paid for operating lease liabilities 68 66 60
Operating lease assets and liabilities recognized for new or extended leases $ 58 $ 86 $ 119
v3.22.4
Leases - Balance Sheet and Other Information (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Leases [Abstract]    
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Other assets Other assets
Other assets $ 372 $ 374
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Other current liabilities Other current liabilities
Other current liabilities $ 54 $ 56
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] Other liabilities Other liabilities
Other liabilities $ 326 $ 325
Weighted-average remaining lease term (in years)    
Weighted-average remaining lease term (in years) 10 years 4 months 24 days 10 years 6 months
Weighted-average discount rate    
Weighted-average discount rate 4.14% 3.19%
v3.22.4
Leases - Maturity of Lease Liabilities (Details)
$ in Millions
Dec. 31, 2022
USD ($)
Leases [Abstract]  
2023 $ 68
2024 61
2025 54
2026 40
2027 35
Thereafter $ 230
v3.22.4
Debt and Credit Facilities - Summary of Debt (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Manufacturing group    
Debt    
Total debt $ 3,182 $ 3,185
Less: Current portion of long-term debt (7) (6)
Total Long-term debt $ 3,175 3,179
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 2.20% and 2.04%, respectively)    
Debt    
Total debt $ 32 $ 35
Weighted-average interest rate 2.20% 2.04%
Manufacturing group | Medium-term Notes | 4.30% due 2024    
Debt    
Total debt $ 350 $ 350
Manufacturing group | Medium-term Notes | 3.875% due 2025    
Debt    
Total debt 350 350
Manufacturing group | Medium-term Notes | 4.00% due 2026    
Debt    
Total debt 350 350
Manufacturing group | Medium-term Notes | 3.65% due 2027    
Debt    
Total debt 350 350
Manufacturing group | Medium-term Notes | 3.375% due 2028    
Debt    
Total debt 300 300
Manufacturing group | Medium-term Notes | 3.90% due 2029    
Debt    
Total debt 300 300
Manufacturing group | Medium-term Notes | 3.00% due 2030    
Debt    
Total debt 650 650
Manufacturing group | Medium-term Notes | 2.45% due 2031    
Debt    
Total debt 500 500
Finance group    
Debt    
Total debt 375 582
Finance group | Variable-rate note due 2025 (5.86%)    
Debt    
Total debt $ 25  
Weighted-average interest rate 5.86%  
Finance group | Variable-rate note due 2022 (1.65%)    
Debt    
Total debt   $ 100
Weighted-average interest rate   1.65%
Finance group | Fixed-rate note due 2027 (4.40%)    
Debt    
Total debt $ 50  
Interest rate 4.40%  
Finance group | Fixed-rate note due 2022 (2.88%)    
Debt    
Total debt   $ 150
Interest rate   2.88%
Finance group | Variable-rate notes due 2022-2027 (weighted-average rate of 5.81% and  1.57%, respectively)    
Debt    
Total debt $ 5 $ 7
Weighted-average interest rate 5.81% 1.57%
Finance group | Fixed-rate notes due 2022-2028 (weighted-average rate of 3.39% and 3.29%, respectively)    
Debt    
Total debt $ 23 $ 36
Weighted-average interest rate 3.39% 3.29%
Finance group | Floating Rate Junior Subordinated Notes due 2067 (6.34% and 1.89%, respectively)    
Debt    
Total debt $ 272 $ 289
Weighted-average interest rate 6.34% 1.89%
v3.22.4
Debt and Credit Facilities - Future Required Payments on Debt (Details)
$ in Millions
Dec. 31, 2022
USD ($)
Required payments during the next five years on debt outstanding  
2023 $ 20
2024 367
2025 384
2026 356
2027 406
Manufacturing group  
Required payments during the next five years on debt outstanding  
2023 7
2024 357
2025 356
2026 355
2027 355
Finance group  
Required payments during the next five years on debt outstanding  
2023 13
2024 10
2025 28
2026 1
2027 $ 51
v3.22.4
Debt and Credit Facilities - Narrative (Details)
12 Months Ended
Oct. 21, 2022
USD ($)
extension_option
Oct. 20, 2022
Dec. 31, 2022
USD ($)
Jan. 01, 2022
USD ($)
Jan. 02, 2021
USD ($)
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
Fixed-to-Floating Rate Junior Subordinated Notes | Finance group | Floating Rate Junior Subordinated Notes          
Debt          
Debt instrument, face amount     $ 272,000,000    
Debt instrument, maturity date     Feb. 15, 2067    
Debt Instrument call date latest     Feb. 15, 2042    
Repurchase amount     $ 17,000,000 5,000,000  
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 | Floating Rate Junior Subordinated Notes | London Interbank Offered Rate (LIBOR)          
Debt          
Variable base rate     1.735%    
Senior Unsecured Revolving Credit Facility Expires October2027 | Line of Credit          
Debt          
Maximum borrowing capacity $ 1,000,000,000        
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 | extension_option 2        
Extension period (in years) 1 year        
Amount borrowed against facility     $ 0    
Senior Unsecured Revolving Credit Facility, Expiring October 2024 | Line of Credit          
Debt          
Debt instrument, term   5 years      
Amount borrowed against facility       0  
Letter of Credit | Line of Credit          
Debt          
Outstanding letters of credit     $ 9,000,000 $ 9,000,000  
v3.22.4
Derivative Instruments and Fair Value Measurements - Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Manufacturing group    
Fair value of derivative instruments    
Forward exchange contracts maximum maturity period 3 years  
Manufacturing group | Foreign currency exchange contracts | Cash flow hedge    
Fair value of derivative instruments    
Notional amounts $ 354 $ 272
Manufacturing group | Foreign currency exchange contracts | Level 2 | Cash flow hedge    
Fair value of derivative instruments    
Derivative liability, fair value 11 3
Derivative asset, fair value   4
Finance group | Interest rate swap | Cash flow hedge    
Fair value of derivative instruments    
Derivative asset, fair value 8  
Finance group | Interest rate swap, maturing in August 2023 | Cash flow hedge    
Fair value of derivative instruments    
Notional amounts 272 $ 289
Finance group | Interest rate swap, maturing in June 2025 | Cash flow hedge    
Fair value of derivative instruments    
Notional amounts $ 25  
v3.22.4
Derivative Instruments and Fair Value Measurements - Assets and Liabilities Not Recorded at Fair Value (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Manufacturing group | Carrying Value    
Financial instruments not reflected at fair value    
Debt $ (3,175) $ (3,181)
Manufacturing group | Estimated Fair Value    
Financial instruments not reflected at fair value    
Debt (2,872) (3,346)
Finance group | Carrying Value    
Financial instruments not reflected at fair value    
Debt (375) (582)
Finance receivables, excluding leases 390 413
Finance group | Estimated Fair Value    
Financial instruments not reflected at fair value    
Debt (294) (546)
Finance receivables, excluding leases $ 369 $ 444
v3.22.4
Shareholders' Equity - Capital Stock (Details) - $ / shares
shares in Thousands
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
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) 216,935 226,444 227,956
Share repurchases (in shares) (13,075) (13,533) (4,145)
Share-based compensation activity (in shares) 2,301 4,024 2,633
Balance at end of year (in shares) 206,161 216,935 226,444
v3.22.4
Shareholders' Equity - Earnings Per Share (Details) - shares
shares in Thousands
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Equity [Abstract]      
Basic weighted-average shares outstanding (in shares) 212,809 224,106 228,536
Dilutive effect of stock options (in shares) 2,164 2,414 443
Diluted weighted-average shares outstanding (in shares) 214,973 226,520 228,979
Anti-dilutive effect of weighted average shares (in shares) 1,000 1,100 7,600
v3.22.4
Shareholders' Equity - Components of Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Components of Accumulated Other Comprehensive Loss    
Beginning Balance $ 6,815 $ 5,845
Other   4
Ending Balance 7,113 6,815
Accumulated Other Comprehensive Loss    
Components of Accumulated Other Comprehensive Loss    
Beginning Balance (789) (1,739)
Other comprehensive income before reclassifications 108 813
Reclassified from Accumulated other comprehensive loss 69 133
Other   4
Ending Balance (612) (789)
Pension and Postretirement Benefits Adjustments    
Components of Accumulated Other Comprehensive Loss    
Beginning Balance (799) (1,780)
Other comprehensive income before reclassifications 214 861
Reclassified from Accumulated other comprehensive loss 69 120
Other   0
Ending Balance (516) (799)
Foreign Currency Translation Adjustments    
Components of Accumulated Other Comprehensive Loss    
Beginning Balance 9 42
Other comprehensive income before reclassifications (103) (51)
Reclassified from Accumulated other comprehensive loss 0 14
Other   4
Ending Balance (94) 9
Deferred Gains (Losses) on Hedge Contracts    
Components of Accumulated Other Comprehensive Loss    
Beginning Balance 1 (1)
Other comprehensive income before reclassifications (3) 3
Reclassified from Accumulated other comprehensive loss 0 (1)
Other   0
Ending Balance $ (2) $ 1
v3.22.4
Shareholders' Equity - Before and After Tax Components of Other Comprehensive Income (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Pension and postretirement benefits adjustments, pre-tax:      
Unrealized gains (losses), pre-tax $ 285 $ 1,148 $ (144)
Amortization of net actuarial loss, pre-tax 83 150 184
Amortization of prior service cost, pre-tax 8 7 6
Recognition of prior service credit cost, pre-tax (4) (20) (8)
Pension and postretirement benefits adjustments, net, pre-tax 372 1,285 38
Pension and postretirement benefits adjustments, tax:      
Unrealized gains (losses), tax (expense) benefit (67) (271) 35
Amortization of net actuarial loss, tax (expense) benefit (20) (34) (43)
Amortization of prior service cost, tax (expense) benefit (2) (3) (1)
Recognition of prior service credit, tax (expense) benefit 0 4 2
Pension and postretirement benefits adjustments, net, tax (expense) benefit (89) (304) (7)
Pension and postretirement benefits adjustments, after-tax:      
Unrealized gains (losses), after-tax 218 877 (109)
Amortization of net actuarial loss, after-tax 63 116 141
Amortization of prior service cost, after-tax 6 4 5
Recognition of prior service credit, after-tax (4) (16) (6)
Pension and postretirement benefits adjustments, net, after-tax 283 981 31
Foreign currency translation adjustments, pre-tax:      
Foreign currency translation adjustments, pre-tax (103) (51) 81
Business disposition, pre-tax 0 14 0
Foreign currency translation adjustments, net, pre-tax (103) (37) 81
Foreign currency translation adjustments, tax:      
Foreign currency translation adjustments, tax (expense) benefit 0 0 (3)
Business disposition, tax (expense) benefit 0 0 0
Foreign currency translation adjustments, net, tax (expense) benefit 0 0 (3)
Foreign currency translation adjustments, after-tax:      
Foreign currency translation adjustments, after-tax (103) (51) 78
Business disposition, after-tax 0 14 0
Foreign currency translation adjustments, net, after-tax (103) (37) 78
Deferred gains (losses) on hedge contracts, pre-tax:      
Current deferrals, pre-tax (7) 3 4
Reclassification adjustments, pre-tax 0 (1) (6)
Deferred gains (losses) on hedge contracts, net, pre-tax (7) 2 (2)
Deferred gains (losses) on hedge contracts, tax:      
Current deferrals, tax (expense) benefit 4 0 (1)
Reclassification adjustments, tax (expense) benefit 0 0 2
Deferred gains (losses) on hedge contracts, net, tax (expense) benefit 4 0 1
Deferred gains (losses) on hedge contracts, after-tax:      
Current deferrals, after-tax (3) 3 3
Reclassification adjustments, after-tax 0 (1) (4)
Deferred gains (losses) on hedge contracts, net, after-tax (3) 2 (1)
Other comprehensive income (loss), pre-tax 262 1,250 117
Other comprehensive income (loss), tax (expense) benefit (85) (304) (9)
Total other comprehensive income, net of tax $ 177 $ 946 $ 108
v3.22.4
Segment and Geographic Data - Narrative (Details)
12 Months Ended
Dec. 31, 2022
segment
Operating and reportable business segments  
Number of operating segments 6
Number of reportable segments 6
v3.22.4
Segment and Geographic Data - Revenue by Segments And Reconciliation Of Segment Profit To Income From Continuing Operations Before Income Taxes (Details) - USD ($)
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Revenues      
Revenues $ 12,869,000,000 $ 12,382,000,000 $ 11,651,000,000
Reconciliation of segment profit to income from continuing operations before income taxes      
Interest expense, net for Manufacturing group (107,000,000) (142,000,000) (166,000,000)
Special charges 0 (25,000,000) (147,000,000)
Gain on business disposition 0 17,000,000 0
Income from continuing operations before income taxes 1,016,000,000 873,000,000 282,000,000
Operating Segment      
Revenues      
Revenues 12,869,000,000 12,382,000,000 11,651,000,000
Segment Profit      
Segment Profit (Loss) 1,223,000,000 1,134,000,000 751,000,000
Reconciling Items      
Reconciliation of segment profit to income from continuing operations before income taxes      
Corporate expenses and other, net (113,000,000) (129,000,000) (122,000,000)
Special charges 0 (25,000,000) (147,000,000)
Inventory Charge 0 0 (55,000,000)
Gain on business disposition 0 17,000,000 0
Manufacturing group | Reconciling Items      
Reconciliation of segment profit to income from continuing operations before income taxes      
Interest expense, net for Manufacturing group (94,000,000) (124,000,000) (145,000,000)
Finance group      
Revenues      
Revenues 52,000,000 49,000,000 55,000,000
Textron Aviation      
Revenues      
Revenues 5,073,000,000 4,566,000,000 3,974,000,000
Textron Aviation | Operating Segment      
Reconciliation of segment profit to income from continuing operations before income taxes      
Special charges     (65,000,000)
Textron Aviation | Manufacturing group | Operating Segment      
Revenues      
Revenues 5,073,000,000 4,566,000,000 3,974,000,000
Segment Profit      
Segment Profit (Loss) 584,000,000 378,000,000 16,000,000
Bell      
Revenues      
Revenues 3,091,000,000 3,364,000,000 3,309,000,000
Bell | Manufacturing group | Operating Segment      
Revenues      
Revenues 3,091,000,000 3,364,000,000 3,309,000,000
Segment Profit      
Segment Profit (Loss) 317,000,000 408,000,000 462,000,000
Textron Systems      
Revenues      
Revenues 1,172,000,000 1,273,000,000 1,313,000,000
Textron Systems | Operating Segment      
Reconciliation of segment profit to income from continuing operations before income taxes      
Special charges     (37,000,000)
Textron Systems | Manufacturing group | Operating Segment      
Revenues      
Revenues 1,172,000,000 1,273,000,000 1,313,000,000
Segment Profit      
Segment Profit (Loss) 152,000,000 189,000,000 152,000,000
Industrial      
Revenues      
Revenues 3,465,000,000 3,130,000,000 3,000,000,000
Industrial | Operating Segment      
Reconciliation of segment profit to income from continuing operations before income taxes      
Special charges   (25,000,000) (41,000,000)
Industrial | Manufacturing group | Operating Segment      
Revenues      
Revenues 3,465,000,000 3,130,000,000 3,000,000,000
Segment Profit      
Segment Profit (Loss) 165,000,000 140,000,000 111,000,000
Textron eAviation      
Revenues      
Revenues 16,000,000 0 0
Textron eAviation | Manufacturing group | Operating Segment      
Revenues      
Revenues 16,000,000 0 0
Segment Profit      
Segment Profit (Loss) (26,000,000) 0 0
Finance      
Revenues      
Revenues 52,000,000 49,000,000 55,000,000
Finance | Finance group | Operating Segment      
Revenues      
Revenues 52,000,000 49,000,000 55,000,000
Segment Profit      
Segment Profit (Loss) $ 31,000,000 $ 19,000,000 $ 10,000,000
v3.22.4
Segment and Geographic Data - Assets, Capital Expenditures and Depreciation and Amortization by Segment (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Other Information by Segment      
Assets $ 16,293 $ 15,827  
Capital Expenditures 354 375 $ 317
Depreciation and Amortization 397 390 391
Manufacturing group      
Other Information by Segment      
Assets 15,629 14,960  
Capital Expenditures 354 375 317
Depreciation and Amortization 396 380 386
Corporate      
Other Information by Segment      
Assets 3,454 2,679  
Capital Expenditures 0 6 2
Depreciation and Amortization 10 10 12
Textron Aviation | Operating Segment | Manufacturing group      
Other Information by Segment      
Assets 4,496 4,390  
Capital Expenditures 138 115 94
Depreciation and Amortization 152 139 138
Bell | Operating Segment | Manufacturing group      
Other Information by Segment      
Assets 2,857 3,382  
Capital Expenditures 80 92 117
Depreciation and Amortization 90 87 91
Textron Systems | Operating Segment | Manufacturing group      
Other Information by Segment      
Assets 1,989 1,980  
Capital Expenditures 57 80 42
Depreciation and Amortization 49 45 43
Industrial | Operating Segment | Manufacturing group      
Other Information by Segment      
Assets 2,555 2,529  
Capital Expenditures 78 82 62
Depreciation and Amortization 93 99 102
Textron eAviation | Operating Segment | Manufacturing group      
Other Information by Segment      
Assets 278 0  
Capital Expenditures 1 0 0
Depreciation and Amortization 2 0 0
Finance | Operating Segment      
Other Information by Segment      
Assets 664 867  
Capital Expenditures 0 0 0
Depreciation and Amortization $ 1 $ 10 $ 5
v3.22.4
Segment and Geographic Data - Selected Financial Information by Geographic Area (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Revenues from External Customers and Long-Lived Assets      
Revenues $ 12,869 $ 12,382 $ 11,651
Property, plant and equipment, net 2,523 2,538  
United States      
Revenues from External Customers and Long-Lived Assets      
Revenues 8,702 8,572 7,943
Property, plant and equipment, net 2,137 2,121  
Europe      
Revenues from External Customers and Long-Lived Assets      
Revenues 1,468 1,369 1,336
Property, plant and equipment, net 188 201  
Other international      
Revenues from External Customers and Long-Lived Assets      
Revenues 2,699 2,441 $ 2,372
Property, plant and equipment, net $ 198 $ 216  
v3.22.4
Revenues - Disaggregation of Revenues (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Revenues      
Revenues $ 12,869 $ 12,382 $ 11,651
United States      
Revenues      
Revenues 8,702 8,572 7,943
Europe      
Revenues      
Revenues 1,468 1,369 1,336
Other international      
Revenues      
Revenues 2,699 2,441 2,372
Commercial      
Revenues      
Revenues 10,035 9,182 8,202
U.S. Government      
Revenues      
Revenues 2,834 3,200 3,449
Textron Aviation      
Revenues      
Revenues 5,073 4,566 3,974
Textron Aviation | United States      
Revenues      
Revenues 3,520 3,424 2,825
Textron Aviation | Europe      
Revenues      
Revenues 579 396 356
Textron Aviation | Other international      
Revenues      
Revenues 974 746 793
Textron Aviation | Commercial      
Revenues      
Revenues 4,959 4,435 3,826
Textron Aviation | U.S. Government      
Revenues      
Revenues 114 131 148
Textron Aviation | Aircraft      
Revenues      
Revenues 3,387 3,116 2,714
Textron Aviation | Aftermarket parts and services      
Revenues      
Revenues 1,686 1,450 1,260
Bell      
Revenues      
Revenues 3,091 3,364 3,309
Bell | United States      
Revenues      
Revenues 2,242 2,425 2,564
Bell | Europe      
Revenues      
Revenues 139 171 148
Bell | Other international      
Revenues      
Revenues 710 768 597
Bell | Commercial      
Revenues      
Revenues 1,284 1,328 1,079
Bell | U.S. Government      
Revenues      
Revenues 1,807 2,036 2,230
Bell | Military aircraft and support programs      
Revenues      
Revenues 1,740 2,073 2,213
Bell | Commercial helicopters, parts and services      
Revenues      
Revenues 1,351 1,291 1,096
Textron Systems      
Revenues      
Revenues 1,172 1,273 1,313
Textron Systems | United States      
Revenues      
Revenues 1,054 1,126 1,129
Textron Systems | Europe      
Revenues      
Revenues 42 44 44
Textron Systems | Other international      
Revenues      
Revenues 76 103 140
Textron Systems | Commercial      
Revenues      
Revenues 274 257 249
Textron Systems | U.S. Government      
Revenues      
Revenues 898 1,016 1,064
Industrial      
Revenues      
Revenues 3,465 3,130 3,000
Industrial | United States      
Revenues      
Revenues 1,862 1,570 1,398
Industrial | Europe      
Revenues      
Revenues 699 757 786
Industrial | Other international      
Revenues      
Revenues 904 803 816
Industrial | Commercial      
Revenues      
Revenues 3,450 3,113 2,993
Industrial | U.S. Government      
Revenues      
Revenues 15 17 7
Industrial | Fuel systems and functional components      
Revenues      
Revenues 1,771 1,735 1,751
Industrial | Specialized vehicles      
Revenues      
Revenues 1,694 1,395 1,249
Textron eAviation      
Revenues      
Revenues 16 0 0
Textron eAviation | United States      
Revenues      
Revenues 7 0 0
Textron eAviation | Europe      
Revenues      
Revenues 6 0 0
Textron eAviation | Other international      
Revenues      
Revenues 3 0 0
Textron eAviation | Commercial      
Revenues      
Revenues 16 0 0
Textron eAviation | U.S. Government      
Revenues      
Revenues 0 0 0
Finance      
Revenues      
Revenues 52 49 55
Finance | United States      
Revenues      
Revenues 17 27 27
Finance | Europe      
Revenues      
Revenues 3 1 2
Finance | Other international      
Revenues      
Revenues 32 21 26
Finance | Commercial      
Revenues      
Revenues 52 49 55
Finance | U.S. Government      
Revenues      
Revenues $ 0 $ 0 $ 0
v3.22.4
Revenues - Remaining Performance Obligations (Details)
$ in Billions
Dec. 31, 2022
USD ($)
Remaining Performance Obligation, Expected Timing of Satisfaction  
Remaining performance obligation $ 13.3
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01  
Remaining Performance Obligation, Expected Timing of Satisfaction  
Remaining performance obligation percent 86.00%
Remaining performance obligation, expected timing of satisfaction, period 24 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-29  
Remaining Performance Obligation, Expected Timing of Satisfaction  
Remaining performance obligation percent 11.00%
Remaining performance obligation, expected timing of satisfaction, period 24 months
v3.22.4
Revenues - Contract Assets and Liabilities (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Contract Assets and Liabilities      
Contract assets $ 680 $ 717  
Contract liabilities 1,500 1,200  
Revenue recognized included in contract liabilities $ 873 $ 600 $ 506
v3.22.4
Share-Based Compensation - Narrative (Details) - USD ($)
$ / shares in Units, $ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Share-Based Compensation    
Compensation costs associated with unvested awards not recognized $ 27  
Recognize compensation expense for unvested awards subject only to service conditions over a weighted average period 2 years  
Stock appreciation rights    
Share-Based Compensation    
Awards outstanding (in shares) 574,315  
Weighted-average exercise price (in dollars per share) $ 51.82  
Weighted-average remaining contractual life 6 years 2 months 12 days  
Intrinsic value $ 11 $ 18
2015 Long Term Incentive Plan    
Share-Based Compensation    
Maximum shares awarded for issuance 17,000,000  
2015 Long Term Incentive Plan | Stock options    
Share-Based Compensation    
Maximum shares awarded for issuance 17,000,000  
2015 Long Term Incentive Plan | Restricted stock, restricted stock units, performance stock, performance share units and other awards    
Share-Based Compensation    
Maximum shares awarded for issuance 4,250,000  
v3.22.4
Share-Based Compensation - Compensation Expense (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Share-Based Payment Arrangement [Abstract]      
Compensation expense $ 66 $ 138 $ 57
Income tax benefit (16) (33) (14)
Total compensation expense included in net income $ 50 $ 105 $ 43
v3.22.4
Share-Based Compensation - Stock Options (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Share-Based Compensation      
Compensation expense $ 66 $ 138 $ 57
Stock options      
Share-Based Compensation      
Compensation expense $ 22 $ 21 $ 20
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) $ 19.95 $ 15.05 $ 10.66
Dividend yield 0.10% 0.20% 0.20%
Expected volatility 29.20% 33.60% 29.30%
Risk-free interest rate 1.90% 0.70% 1.10%
Expected term (in years) 4 years 9 months 18 days 4 years 8 months 12 days 4 years 8 months 12 days
Number of Options      
Outstanding at beginning of period (in shares) 8,289    
Granted (in shares) 1,232    
Exercised (in shares) (1,102)    
Forfeited or expired (in shares) (109)    
Outstanding at end of period (in shares) 8,310 8,289  
Exercisable at end of period (in shares) 5,596    
Weighted-Average Exercise Price      
Outstanding at beginning of period (in dollars per share) $ 46.18    
Granted (in dollars per share) 69.55    
Exercised (in dollars per share) (41.00)    
Forfeited or expired (in dollars per share) (52.66)    
Outstanding at end of period (in dollars per share) 50.25 $ 46.18  
Exercisable at end of period (in dollars per share) $ 47.03    
Additional general disclosures      
Aggregate intrinsic value of outstanding options $ 171    
Weighted-average remaining contractual life of outstanding options 5 years 9 months 18 days    
Aggregate intrinsic value of exercisable options $ 133    
Weighted-average remaining contractual life of exercisable options 4 years 7 months 6 days    
Total intrinsic value of options exercised $ 32 $ 63 $ 10
v3.22.4
Share-Based Compensation - Restricted Stock Units (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Units Payable in Stock      
Number of Shares/Units      
Outstanding at beginning of period, nonvested (in shares) 569    
Granted (in shares) 104    
Vested (in shares) (148)    
Forfeited (in shares) 0    
Outstanding at end of period, nonvested (in shares) 525 569  
Weighted- Average Grant Date Fair Value      
Outstanding at beginning of period, nonvested (in dollars per share) $ 50.01    
Granted (in dollars per share) 70.25    
Vested (in dollars per share) (53.68)    
Forfeited (in dollars per share) 0    
Outstanding at end of period, nonvested (in dollars per share) $ 52.99 $ 50.01  
Units Payable in Cash      
Number of Shares/Units      
Outstanding at beginning of period, nonvested (in shares) 1,158    
Granted (in shares) 226    
Vested (in shares) (248)    
Forfeited (in shares) (50)    
Outstanding at end of period, nonvested (in shares) 1,086 1,158  
Weighted- Average Grant Date Fair Value      
Outstanding at beginning of period, nonvested (in dollars per share) $ 49.92    
Granted (in dollars per share) 71.05    
Vested (in dollars per share) (53.98)    
Forfeited (in dollars per share) (52.48)    
Outstanding at end of period, nonvested (in dollars per share) $ 53.26 $ 49.92  
Restricted Stock Units      
Fair value      
Fair value of awards vested $ 25 $ 20 $ 17
Cash paid $ 17 $ 13 $ 11
v3.22.4
Share-Based Compensation - Performance Share Units (Details) - Performance Share Units - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Share-Based Compensation      
Performance share units performance period 3 years    
Number of Units      
Outstanding at beginning of period, nonvested (in shares) 526    
Granted (in shares) 174    
Vested (in shares) (273)    
Outstanding at end of period, nonvested (in shares) 427 526  
Weighted- Average Grant Date Fair Value      
Outstanding at beginning of period, nonvested (in dollars per share) $ 45.87    
Granted (in dollars per share) 71.07    
Vested (in dollars per share) (40.60)    
Outstanding at end of period, nonvested (in dollars per share) $ 59.51 $ 45.87  
Fair value      
Fair value of awards vested $ 19 $ 18 $ 8
Cash paid $ 15 $ 6 $ 7
v3.22.4
Retirement Plans - Narrative (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Retirement Plans      
Cost recognized for defined contribution plans $ 140 $ 131 $ 128
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 $ 6,600 $ 8,800  
Trend rate for medical and prescription drug cost 6.50% 7.00%  
Rate to which medical and prescription drug cost trend rates will gradually decline 4.75%    
Year that the rates reach the rate where we assume they will remain 2029    
Pension Benefits | United States      
Retirement Plans      
Cost recognized for defined contribution plans $ 11 $ 11 $ 11
Pension Benefits | United States | TMRP      
Retirement Plans      
Decrease in pension cost   85  
Unfunded      
Retirement Plans      
Accumulated benefit obligation $ 326 $ 418  
v3.22.4
Retirement Plans - Net Periodic Benefit Cost (Income) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Other changes in plan assets and benefit obligations recognized in OCI      
Current year actuarial loss (gain) $ (285) $ (1,148) $ 144
Amortization of net actuarial gain (loss) (83) (150) (184)
Amortization of prior service credit (cost) (8) (7) (6)
Cost associated with defined the defined contribution component 140 131 128
Pension Benefits      
Net periodic benefit cost (income)      
Service cost 108 116 106
Interest cost 272 252 293
Expected return on plan assets (609) (573) (574)
Amortization of prior service cost (credit) 13 12 11
Amortization of net actuarial loss (gain) 87 152 185
Net periodic benefit cost (income) (129) (41) 21
Other changes in plan assets and benefit obligations recognized in OCI      
Current year actuarial loss (gain) (246) (1,135) 146
Current year prior service cost 4 20 8
Amortization of net actuarial gain (loss) (87) (152) (185)
Amortization of prior service credit (cost) (13) (12) (11)
Total recognized in OCI, before taxes (342) (1,279) (42)
Total recognized in net periodic benefit cost (income) and OCI (471) (1,320) (21)
Pension Benefits | United States      
Other changes in plan assets and benefit obligations recognized in OCI      
Cost associated with defined the defined contribution component 11 11 11
Postretirement Benefits Other than Pensions      
Net periodic benefit cost (income)      
Service cost 2 3 2
Interest cost 6 5 8
Expected return on plan assets 0 0 0
Amortization of prior service cost (credit) (5) (5) (5)
Amortization of net actuarial loss (gain) (4) (2) (1)
Net periodic benefit cost (income) (1) 1 4
Other changes in plan assets and benefit obligations recognized in OCI      
Current year actuarial loss (gain) (39) (13) (2)
Current year prior service cost 0 0 0
Amortization of net actuarial gain (loss) 4 2 1
Amortization of prior service credit (cost) 5 5 5
Total recognized in OCI, before taxes (30) (6) 4
Total recognized in net periodic benefit cost (income) and OCI $ (31) $ (5) $ 8
v3.22.4
Retirement Plans - Obligations and Funded Status (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Pension Benefits      
Change in projected benefit obligation      
Projected benefit obligation at beginning of year $ 9,339 $ 9,833  
Service cost 108 116 $ 106
Interest cost 272 252 293
Plan participants’ contributions 0 0  
Actuarial gains (2,373) (436)  
Benefits paid (448) (446)  
Plan amendment 1 18  
Foreign exchange rate changes and other (51) 2  
Projected benefit obligation at end of year 6,848 9,339 9,833
Change in fair value of plan assets      
Balance at beginning of year 9,947 9,080  
Actual return on plan assets (1,520) 1,273  
Employer contributions 37 42  
Benefits paid (448) (446)  
Foreign exchange rate changes and other (73) (2)  
Balance at end of year 7,943 9,947 9,080
Funded status at end of year 1,095 608  
Postretirement Benefits Other than Pensions      
Change in projected benefit obligation      
Projected benefit obligation at beginning of year 202 230  
Service cost 2 3 2
Interest cost 6 5 8
Plan participants’ contributions 4 4  
Actuarial gains (40) (13)  
Benefits paid (24) (27)  
Plan amendment 0 0  
Foreign exchange rate changes and other 0 0  
Projected benefit obligation at end of year 150 202 $ 230
Change in fair value of plan assets      
Funded status at end of year $ (150) $ (202)  
v3.22.4
Retirement Plans - Amounts Recognized In The Balance Sheets (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Pension Benefits    
Amounts recognized in our balance sheets    
Non-current assets $ 1,440 $ 1,129
Current liabilities (28) (29)
Non-current liabilities (317) (492)
Recognized in Accumulated other comprehensive loss, pre-tax:    
Net loss (gain) 623 953
Prior service cost (credit) 46 58
Postretirement Benefits Other than Pensions    
Amounts recognized in our balance sheets    
Non-current assets 0 0
Current liabilities (19) (21)
Non-current liabilities (131) (181)
Recognized in Accumulated other comprehensive loss, pre-tax:    
Net loss (gain) (70) (34)
Prior service cost (credit) $ (6) $ (10)
v3.22.4
Retirement Plans - Plans with Accumulated/Projected Benefit Obligations Exceeding Fair Value of Plan Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Pension plans with accumulated benefit obligations exceeding the fair value of plan assets    
Accumulated benefit obligation $ 326 $ 741
Fair value of plan assets 0 298
Pension plans with projected benefit obligation exceeding the fair value of plan assets    
Projected benefit obligation 597 819
Fair value of plan assets $ 252 $ 298
v3.22.4
Retirement Plans - Weighted-average Assumptions (Details)
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Pension Benefits      
Net periodic benefit cost      
Discount rate 2.99% 2.62% 3.36%
Expected long-term rate of return on assets 7.10% 7.10% 7.55%
Rate of compensation increase 3.95% 3.49% 3.50%
Benefit obligations at year-end      
Discount rate 5.51% 2.99% 2.62%
Rate of compensation increase 3.97% 3.95% 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 2.80% 2.35% 3.20%
Benefit obligations at year-end      
Discount rate 5.70% 2.80% 2.35%
v3.22.4
Retirement Plans - Target Allocation Ranges (Details) - Pension Benefits
Dec. 31, 2022
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 6.00%
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 7.00%
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 17.00%
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 13.00%
Maximum | Equity securities | Non-U.S. Plan Assets  
Target allocation ranges  
Target plan asset allocations 75.00%
v3.22.4
Retirement Plans - Fair Value of Pension Plan Assets (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Change in fair value of plan assets      
Valuation of owned properties period 3 years    
Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets $ 7,943 $ 9,947 $ 9,080
Level 1 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 4,393 5,696  
Level 2 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 905 1,335  
Level 3 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 569 599  
Not Subject to Leveling | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 2,076 2,317  
Cash and equivalents | Level 1 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 378 200  
Cash and equivalents | Level 2 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 3 6  
Cash and equivalents | Level 3 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Cash and equivalents | Not Subject to Leveling | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Domestic equity securities | Level 1 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 2,304 2,774  
Domestic equity securities | Level 2 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Domestic equity securities | Level 3 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Domestic equity securities | Not Subject to Leveling | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 225 271  
International equity securities | Level 1 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 1,171 1,772  
International equity securities | Level 2 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
International equity securities | Level 3 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
International equity securities | Not Subject to Leveling | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 230 305  
Mutual funds | Level 1 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 150 123  
Mutual funds | Level 2 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Mutual funds | Level 3 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
National, state and local governments | Level 1 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 332 677  
National, state and local governments | Level 2 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 239 274  
National, state and local governments | Level 3 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
National, state and local governments | Not Subject to Leveling | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 27 98  
Corporate debt | Level 1 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 58 150  
Corporate debt | Level 2 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 663 1,055  
Corporate debt | Level 3 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Corporate debt | Not Subject to Leveling | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 129 170  
Private investment partnerships | Level 1 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Private investment partnerships | Level 2 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Private investment partnerships | Level 3 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Private investment partnerships | Not Subject to Leveling | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 1,070 1,098  
Real estate | Level 1 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Real estate | Level 2 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 0 0  
Real estate | Level 3      
Change in fair value of plan assets      
Fair value of total pension plan assets 569 599 $ 458
Real estate | Level 3 | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets 569 599  
Real estate | Not Subject to Leveling | Pension Benefits      
Change in fair value of plan assets      
Fair value of total pension plan assets $ 395 $ 375  
v3.22.4
Retirement Plans - Reconciliation of Fair Value Measurements of Level 3 Valuation (Details) - Real estate - Level 3 - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Reconciliation for fair value measurements that use significant unobservable inputs (Level 3)    
Balance at beginning of year $ 599 $ 458
Unrealized gains (losses), net (10) 90
Realized gains, net 11 9
Purchases, sales and settlements, net (31) 42
Balance at end of year $ 569 $ 599
v3.22.4
Retirement Plans - Estimated Future Cash Flow Impact (Details)
$ in Millions
Dec. 31, 2022
USD ($)
Retirement Plans  
Expected contributions to our non-qualified plans and foreign plans $ 50
Pension Benefits  
Estimated future benefit payments  
2023 442
2024 450
2025 458
2026 466
2027 474
2028-2032 2,451
Postretirement Benefits Other than Pensions  
Estimated future benefit payments  
2023 19
2024 19
2025 18
2026 17
2027 16
2028-2032 $ 63
v3.22.4
Special Charges - Special Charges by Segment (Details) - USD ($)
12 Months Ended 21 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Jan. 01, 2022
Restructuring Cost and Reserve [Line Items]        
Asset Impairments   $ 0 $ 39,000,000  
Special charges $ 0 25,000,000 147,000,000  
Operating Segment | Textron Aviation        
Restructuring Cost and Reserve [Line Items]        
Asset Impairments     32,000,000  
Special charges     65,000,000  
Operating Segment | Industrial        
Restructuring Cost and Reserve [Line Items]        
Asset Impairments   0 7,000,000  
Special charges   25,000,000 41,000,000  
Operating Segment | Textron Systems        
Restructuring Cost and Reserve [Line Items]        
Asset Impairments     0  
Special charges     37,000,000  
Corporate        
Restructuring Cost and Reserve [Line Items]        
Asset Impairments     0  
Special charges     4,000,000  
COVID-19 Restructuring Plan        
Restructuring Cost and Reserve [Line Items]        
Asset Impairments   12,000,000 22,000,000 $ 34,000,000
Special charges   25,000,000 108,000,000 133,000,000
COVID-19 Restructuring Plan | Severance Costs        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges   4,000,000 73,000,000  
COVID-19 Restructuring Plan | Contract Terminations and Other        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges   9,000,000 13,000,000  
COVID-19 Restructuring Plan | Operating Segment | Textron Aviation        
Restructuring Cost and Reserve [Line Items]        
Asset Impairments     2,000,000  
Special charges     33,000,000 33,000,000
COVID-19 Restructuring Plan | Operating Segment | Textron Aviation | Severance Costs        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges     31,000,000  
COVID-19 Restructuring Plan | Operating Segment | Textron Aviation | Contract Terminations and Other        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges     0  
COVID-19 Restructuring Plan | Operating Segment | Industrial        
Restructuring Cost and Reserve [Line Items]        
Asset Impairments   12,000,000 6,000,000  
Special charges   25,000,000 34,000,000 59,000,000
COVID-19 Restructuring Plan | Operating Segment | Industrial | Severance Costs        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges   4,000,000 27,000,000  
COVID-19 Restructuring Plan | Operating Segment | Industrial | Contract Terminations and Other        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges   $ 9,000,000 1,000,000  
COVID-19 Restructuring Plan | Operating Segment | Textron Systems        
Restructuring Cost and Reserve [Line Items]        
Asset Impairments     14,000,000  
Special charges     37,000,000 37,000,000
COVID-19 Restructuring Plan | Operating Segment | Textron Systems | Severance Costs        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges     11,000,000  
COVID-19 Restructuring Plan | Operating Segment | Textron Systems | Contract Terminations and Other        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges     12,000,000  
COVID-19 Restructuring Plan | Corporate        
Restructuring Cost and Reserve [Line Items]        
Asset Impairments     0  
Special charges     4,000,000 $ 4,000,000
COVID-19 Restructuring Plan | Corporate | Severance Costs        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges     4,000,000  
COVID-19 Restructuring Plan | Corporate | Contract Terminations and Other        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges     $ 0  
v3.22.4
Special Charges - Narrative (Details) - USD ($)
3 Months Ended 12 Months Ended 21 Months Ended
Apr. 04, 2020
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Jan. 01, 2022
Special Charges          
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration]         Special charges
Special charges   $ 0 $ 25,000,000 $ 147,000,000  
Asset Impairments     0 39,000,000  
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] Special charges        
Beechcraft and King Air trade name intangible assets          
Special Charges          
Impairment charge $ 32,000,000        
Operating Segment | Industrial          
Special Charges          
Special charges     25,000,000 41,000,000  
Asset Impairments     0 7,000,000  
Operating Segment | Textron Systems          
Special Charges          
Special charges       37,000,000  
Asset Impairments       0  
Operating Segment | Textron Aviation          
Special Charges          
Special charges       65,000,000  
Asset Impairments       32,000,000  
Corporate          
Special Charges          
Special charges       4,000,000  
Asset Impairments       0  
Reconciling Items          
Special Charges          
Special charges   0 25,000,000 147,000,000  
Inventory Charge   $ 0 0 55,000,000  
COVID-19 Restructuring Plan          
Special Charges          
Special charges     25,000,000 108,000,000 $ 133,000,000
Asset Impairments     12,000,000 22,000,000 34,000,000
COVID-19 Restructuring Plan | Operating Segment | Industrial          
Special Charges          
Special charges     25,000,000 34,000,000 59,000,000
Asset Impairments     $ 12,000,000 6,000,000  
COVID-19 Restructuring Plan | Operating Segment | Textron Systems          
Special Charges          
Special charges       37,000,000 37,000,000
Asset Impairments       14,000,000  
COVID-19 Restructuring Plan | Operating Segment | Textron Aviation          
Special Charges          
Special charges       33,000,000 33,000,000
Asset Impairments       2,000,000  
COVID-19 Restructuring Plan | Corporate          
Special Charges          
Special charges       4,000,000 4,000,000
Asset Impairments       $ 0  
COVID-19 Restructuring Plan | Severance Costs          
Special Charges          
Restructuring costs         77,000,000
COVID-19 Restructuring Plan | Contract Terminations and Other          
Special Charges          
Restructuring costs         $ 22,000,000
v3.22.4
Special Charges - Restructuring reserve activity and total expected cash outlay (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Restructuring reserve activity    
Balance at beginning of period $ 28 $ 52
Cash paid (15) (36)
Reversals   (6)
Foreign currency translation (1) (1)
Balance at end of period 12 28
COVID-19 Restructuring Plan    
Restructuring reserve activity    
Provision for plan   19
Severance Costs    
Restructuring reserve activity    
Balance at beginning of period 19 43
Cash paid (13) (27)
Reversals   (5)
Foreign currency translation (1) (1)
Balance at end of period 5 19
Severance Costs | COVID-19 Restructuring Plan    
Restructuring reserve activity    
Provision for plan   9
Contract Terminations and Other    
Restructuring reserve activity    
Balance at beginning of period 9 9
Cash paid (2) (9)
Reversals   (1)
Foreign currency translation 0 0
Balance at end of period $ 7 9
Contract Terminations and Other | COVID-19 Restructuring Plan    
Restructuring reserve activity    
Provision for plan   $ 10
v3.22.4
Income Taxes - Income Before Income Taxes (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Income Tax Disclosure [Abstract]      
U.S. $ 810 $ 699 $ 202
Non-U.S. 206 174 80
Income from continuing operations before income taxes $ 1,016 $ 873 $ 282
v3.22.4
Income Taxes - Current and Deferred Income Tax Expense For Continuing Operations (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Current expense (benefit):      
Federal $ 272 $ 41 $ (1)
State 33 15 (76)
Non-U.S. 69 47 57
Current income tax expense, total 374 103 (20)
Deferred expense (benefit):      
Federal (182) 35 3
State (29) (10) 5
Non-U.S. (9) (2) (15)
Deferred income tax expense, total (220) 23 (7)
Income tax expense (benefit) $ 154 $ 126 $ (27)
v3.22.4
Income Taxes - Reconciliation of Federal Statutory Income Tax Rate To Effective Income Tax Rate For Continuing Operations (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
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:      
Research and developments tax credits (5.00%) (7.00%) (18.20%)
Foreign-derived intangible income deduction (2.50%) 0.00% 0.00%
State income taxes (net of federal impact) 0.30% 0.50% (1.20%)
Non-U.S. tax rate differential and foreign tax credits 1.80% 1.30% 10.80%
State income tax audit settlement (net of federal impact) 0.00% 0.00% (18.60%)
Outside basis difference in assets held for sale 0.00% 0.00% (2.70%)
Other, net (0.40%) (1.40%) (0.70%)
Effective income tax rate 15.20% 14.40% (9.60%)
Segment Reporting Information      
Tax expense related to dividend cash back from non-U.S. jurisdiction to the U.S.     $ 10
Valuation allowance release     14
Reconciling Items      
Segment Reporting Information      
Inventory Charge $ 0 $ 0 $ 55
v3.22.4
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance at beginning of year $ 207 $ 183 $ 221
Additions for tax positions related to current year 24 21 11
Additions for tax positions of prior years 0 10 21
Reductions for settlements and expiration of statute of limitations 0 (3) (69)
Reductions for tax positions of prior years 0 (4) (1)
Balance at end of year $ 231 $ 207 183
Certain tax position reduced related to research credits     $ 68
v3.22.4
Income Taxes - Narrative (Details) - USD ($)
$ in Billions
Dec. 31, 2022
Jan. 01, 2022
Income Tax Disclosure [Abstract]    
Unremitted earnings in foreign subsidiaries $ 1.6 $ 1.8
v3.22.4
Income Taxes - Net Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Income Tax Examination [Line Items]    
Capitalized research and development expenditures $ 319 $ 0
U.S. operating loss and tax credit carryforwards 257 313
Accrued liabilities 209 191
Obligation for pension and postretirement benefits 117 175
Deferred compensation 108 108
Operating lease liabilities 102 103
Prepaid pension benefits 53 48
Deferred Tax Liabilities Prepaid Pension Costs Benefits (348) (269)
Property, plant and equipment, principally depreciation (222) (204)
Amortization of goodwill and other intangibles (194) (183)
Valuation allowance on deferred tax assets (99) (109)
Operating lease right-of-use assets (99) (101)
Other leasing transactions, principally leveraged leases (53) (73)
Other, net (22)  
Other, net   20
Deferred taxes, net 128 $ 19
U.S.    
Income Tax Examination [Line Items]    
Operating loss and tax credit carryforward benefits through expiration 218  
Operating loss and tax indefinite credit carryforward benefit 39  
Non-U.S.    
Income Tax Examination [Line Items]    
Operating loss and tax indefinite credit carryforward benefit $ 50  
v3.22.4
Income Taxes - Breakdown of Net Deferred Tax Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Breakdown of deferred taxes    
Deferred taxes, net $ 128 $ 19
Manufacturing group    
Breakdown of deferred taxes    
Deferred tax assets, net of valuation allowance 223 129
Deferred tax liabilities (52) (49)
Finance group    
Breakdown of deferred taxes    
Deferred tax liabilities $ (43) $ (61)
v3.22.4
Commitments and Contingencies - Letter of Credit (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jan. 01, 2022
Commitments and Contingencies Disclosure [Abstract]    
Aggregate amount of outstanding letter of credit arrangements and surety bonds $ 285 $ 213
v3.22.4
Commitments and Contingencies - Environmental Remediation (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Environmental Remediation      
Environmental Loss Contingency, Statement Of Financial Position, Extensible Enumeration, Not Disclosed Flag environmental reserves    
Environmental liabilities      
Environmental Remediation      
Environmental reserves $ 74    
Estimated period over which accrued environmental remediation liabilities are likely to be paid 10 years    
Accrued environmental remediation liabilities classified as current liabilities $ 13    
Expense, net of recoveries received, to evaluate and remediate contaminated sites 9 $ 6 $ 7
Environmental liabilities | Minimum      
Environmental Remediation      
Potential environmental liabilities 40    
Environmental liabilities | Maximum      
Environmental Remediation      
Potential environmental liabilities $ 145    
v3.22.4
Supplemental Cash Flow Information (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Manufacturing group      
Supplemental Cash Flow Information      
Interest paid $ 110 $ 128 $ 139
Net taxes paid 332 72 34
Finance group      
Supplemental Cash Flow Information      
Interest paid 13 17 20
Net taxes paid $ 24 $ 21 $ 8
v3.22.4
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2022
Jan. 01, 2022
Jan. 02, 2021
Allowance for credit losses on accounts receivable      
Valuation and Qualifying Accounts      
Balance at beginning of year $ 24 $ 36 $ 29
Provision (reversal) for credit losses 2 (1) 25
Deductions from reserves (2) (11) (18)
Balance at end of year 24 24 36
Allowance for credit losses on finance receivables      
Valuation and Qualifying Accounts      
Balance at beginning of year 25 35 25
Provision (reversal) for credit losses (4) (9) 7
Charge-offs 0 (3) 0
Recoveries 3 2 3
Balance at end of year 24 25 35
Inventory FIFO reserves      
Valuation and Qualifying Accounts      
Balance at beginning of year 370 357 309
Deductions from reserves (41) (27) (57)
Charged to costs and expenses 21 40 105
Balance at end of year $ 350 $ 370 $ 357