Textron (TXT) 10-Q 29 Apr 21 2021 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Apr. 03, 2021	Apr. 16, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Apr. 3, 2021
Document Transition Report	false
Entity File Number	1-5480
Entity Registrant Name	Textron Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	05-0315468
Entity Address, State or Province	RI
Entity Address, City or Town	Providence
Entity Address, Address Line One	40 Westminster Street
Entity Address, Postal Zip Code	02903
City Area Code	401
Local Phone Number	421-2800
Title of 12(b) Security	Common stock, $0.125 par value
Trading Symbol	TXT
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		225,708,875
Entity Central Index Key	0000217346
Current Fiscal Year End Date	--01-01
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Revenues
Total revenues	$ 2,879	$ 2,777
Costs, expenses and other
Cost of sales	2,400	2,387
Selling and administrative expense	298	263
Interest expense	40	40
Special charges	6	39
Non-service components of pension and post-retirement income, net	(40)	(21)
Gain on business disposition	(15)	0
Total costs, expenses and other	2,689	2,708
Income before income taxes	190	69
Income tax expense	19	19
Net income	$ 171	$ 50
Earnings per share
Basic (in dollars per share)	$ 0.75	$ 0.22
Diluted (in dollars per share)	$ 0.75	$ 0.22
Manufacturing revenues
Revenues
Total revenues	$ 2,864	$ 2,763
Finance revenues
Revenues
Total revenues	$ 15	$ 14

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 171	$ 50
Other comprehensive income (loss), net of tax
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	30	37
Foreign currency translation adjustments, net of reclassifications	(18)	(40)
Deferred gains (losses) on hedge contracts, net of reclassifications	4	(9)
Other comprehensive income (loss)	16	(12)
Comprehensive income	$ 187	$ 38

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) shares in Thousands, $ in Millions	Apr. 03, 2021	Jan. 02, 2021
Assets
Inventories	$ 3,705	$ 3,513
Finance receivables, net	672	744
Total assets	15,414	15,443
Liabilities
Total liabilities	9,418	9,598
Shareholders’ equity
Common stock	29	29
Capital surplus	1,845	1,785
Treasury stock	(294)	(203)
Retained earnings	6,139	5,973
Accumulated other comprehensive loss	(1,723)	(1,739)
Total shareholders’ equity	5,996	5,845
Total liabilities and shareholders’ equity	$ 15,414	$ 15,443
Common shares outstanding (in shares)	225,898	226,444
Manufacturing group
Assets
Cash and equivalents	$ 1,897	$ 2,146
Accounts receivable, net	883	787
Inventories	3,705	3,513
Other current assets	899	950
Total current assets	7,384	7,396
Property, plant and equipment, less accumulated depreciation and amortization of $4,737 and $4,696, respectively	2,478	2,516
Goodwill	2,152	2,157
Other assets	2,468	2,436
Total assets	14,482	14,505
Liabilities
Current portion of long-term debt	257	509
Accounts payable	1,033	776
Other current liabilities	1,833	1,985
Total current liabilities	3,123	3,270
Other liabilities	2,340	2,357
Long-term debt	3,183	3,198
Total liabilities	8,646	8,825
Finance group
Assets
Cash and equivalents	181	108
Finance receivables, net	672	744
Other assets	79	86
Total assets	932	938
Liabilities
Other liabilities	119	111
Debt	653	662
Total liabilities	$ 772	$ 773

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions	Apr. 03, 2021	Jan. 02, 2021
Statement of Financial Position [Abstract]
Accumulated depreciation and amortization	$ 4,737	$ 4,696

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Cash flows from operating activities
Net income	$ 171	$ 50
Non-cash items:
Depreciation and amortization	90	90
Gain on business disposition	(15)	0
Deferred income taxes	11	(10)
Asset impairments	3	39
Other, net	35	33
Changes in assets and liabilities:
Accounts receivable, net	(103)	47
Inventories	(178)	(368)
Other assets	(17)	(41)
Accounts payable	259	(49)
Other liabilities	(105)	(203)
Income taxes, net	(11)	20
Pension, net	(23)	(5)
Captive finance receivables, net	69	0
Other operating activities, net	(5)	3
Net cash provided by (used in) operating activities of continuing operations	181	(394)
Net cash used in operating activities of discontinued operations	0	(1)
Net cash provided by (used in) operating activities	181	(395)
Cash flows from investing activities
Capital expenditures	(53)	(50)
Net proceeds from business disposition	39	0
Finance receivables repaid	13	13
Other investing activities, net	6	(6)
Net cash provided by (used in) investing activities	5	(43)
Cash flows from financing activities
Increase in short-term debt	0	603
Net proceeds from long-term debt	0	643
Proceeds from borrowings against corporate-owned life insurance policies	0	377
Principal payments on long-term debt and nonrecourse debt	(287)	(24)
Purchases of Textron common stock	(91)	(54)
Dividends paid	(5)	(5)
Other financing activities, net	24	3
Net cash provided by (used in) financing activities	(359)	1,543
Effect of exchange rate changes on cash and equivalents	(3)	(16)
Net increase (decrease) in cash and equivalents	(176)	1,089
Cash and equivalents at beginning of period	2,254	1,357
Cash and equivalents at end of period	2,078	2,446
Manufacturing group
Cash flows from operating activities
Net income	177	48
Non-cash items:
Depreciation and amortization	88	89
Gain on business disposition	(15)	0
Deferred income taxes	11	(11)
Asset impairments	3	39
Other, net	36	33
Changes in assets and liabilities:
Accounts receivable, net	(103)	47
Inventories	(178)	(368)
Other assets	(17)	(41)
Accounts payable	259	(49)
Other liabilities	(103)	(198)
Income taxes, net	(23)	20
Pension, net	(23)	(5)
Other operating activities, net	(5)	3
Net cash provided by (used in) operating activities of continuing operations	107	(393)
Net cash used in operating activities of discontinued operations	0	(1)
Net cash provided by (used in) operating activities	107	(394)
Cash flows from investing activities
Capital expenditures	(53)	(50)
Net proceeds from business disposition	39	0
Finance receivables repaid	0	0
Finance receivables originated	0	0
Other investing activities, net	0	(6)
Net cash provided by (used in) investing activities	(14)	(56)
Cash flows from financing activities
Increase in short-term debt	0	603
Net proceeds from long-term debt	0	643
Proceeds from borrowings against corporate-owned life insurance policies	0	377
Principal payments on long-term debt and nonrecourse debt	(267)	(7)
Purchases of Textron common stock	(91)	(54)
Dividends paid	(5)	(5)
Other financing activities, net	24	(9)
Net cash provided by (used in) financing activities	(339)	1,548
Effect of exchange rate changes on cash and equivalents	(3)	(16)
Net increase (decrease) in cash and equivalents	(249)	1,082
Cash and equivalents at beginning of period	2,146	1,181
Cash and equivalents at end of period	1,897	2,263
Finance group
Cash flows from operating activities
Net income	(6)	2
Non-cash items:
Depreciation and amortization	2	1
Gain on business disposition	0	0
Deferred income taxes	0	1
Asset impairments	0	0
Other, net	(1)	0
Changes in assets and liabilities:
Accounts receivable, net	0	0
Inventories	0	0
Other assets	0	0
Accounts payable	0	0
Other liabilities	(2)	(5)
Income taxes, net	12	0
Pension, net	0	0
Other operating activities, net	0	0
Net cash provided by (used in) operating activities of continuing operations	5	(1)
Net cash used in operating activities of discontinued operations	0	0
Net cash provided by (used in) operating activities	5	(1)
Cash flows from investing activities
Capital expenditures	0	0
Net proceeds from business disposition	0	0
Finance receivables repaid	89	46
Finance receivables originated	(7)	(33)
Other investing activities, net	6	0
Net cash provided by (used in) investing activities	88	13
Cash flows from financing activities
Increase in short-term debt	0	0
Net proceeds from long-term debt	0	0
Proceeds from borrowings against corporate-owned life insurance policies	0	0
Principal payments on long-term debt and nonrecourse debt	(20)	(17)
Purchases of Textron common stock	0	0
Dividends paid	0	0
Other financing activities, net	0	12
Net cash provided by (used in) financing activities	(20)	(5)
Effect of exchange rate changes on cash and equivalents	0	0
Net increase (decrease) in cash and equivalents	73	7
Cash and equivalents at beginning of period	108	176
Cash and equivalents at end of period	$ 181	$ 183

Basis of Presentation

Basis of Presentation	3 Months Ended
	Apr. 03, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation Our Consolidated Financial Statements include the accounts of Textron Inc. (Textron) and its majority-owned subsidiaries. We have prepared these unaudited consolidated financial statements in accordance with accounting principles generally accepted in the U.S. for interim financial information. Accordingly, these interim financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements. The consolidated interim financial statements included in this quarterly report should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 2, 2021. In the opinion of management, the interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair presentation of our consolidated financial position, results of operations and cash flows for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Our financings are conducted through two separate borrowing groups. The Manufacturing group consists of Textron consolidated with its majority-owned subsidiaries that operate in the Textron Aviation, Bell, Textron Systems and Industrial segments. The Finance group, which also is the Finance segment, consists of Textron Financial Corporation and its consolidated subsidiaries. We designed this framework to enhance our borrowing power by separating the Finance group. Our Manufacturing group operations include the development, production and delivery of tangible goods and services, while our Finance group provides financial services. Due to the fundamental differences between each borrowing group’s activities, investors, rating agencies and analysts use different measures to evaluate each group’s performance. To support those evaluations, we present balance sheet and cash flow information for each borrowing group within the Consolidated Financial Statements. All significant intercompany transactions are eliminated from the Consolidated Financial Statements, including retail financing activities for inventory sold by our Manufacturing group and financed by our Finance group. Use of Estimates We prepare our financial statements in conformity with generally accepted accounting principles, which require us to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Our estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the Consolidated Statements of Operations in the period that they are determined. Contract Estimates For contracts where revenue is recognized over time, we recognize changes in estimated contract revenues, costs and profits using the cumulative catch-up method of accounting. This method recognizes the cumulative effect of changes on current and prior periods with the impact of the change from inception-to-date recorded in the current period. Anticipated losses on contracts are recognized in full in the period in which the losses become probable and estimable. In the first quarter of 2021 and 2020, our cumulative catch-up adjustments increased segment profit by $14 million and $2 million, respectively, and net income by $11 million and $1 million, respectively ($0.05 and $0.01 per diluted share, respectively). In the first quarter of 2021 and 2020, we recognized revenues from performance obligations satisfied in prior periods of $18 million and $4 million, which related to changes in profit booking rates that impacted revenue. In the first quarter of 2021 and 2020, gross favorable adjustments totaled $36 million and $27 million, respectively, and the gross unfavorable adjustments totaled $22 million and $25 million, respectively.

Business Dispositions

Business Dispositions	3 Months Ended
	Apr. 03, 2021
Business Combinations [Abstract]
Business Dispositions	Business DispositionOn January 25, 2021, we completed the sale of TRU Simulation + Training Canada Inc. within our Textron Systems segment for net cash proceeds of $39 million and recorded an after-tax gain of $15 million.

Accounts Receivable and Finance

Accounts Receivable and Finance Receivables	3 Months Ended
	Apr. 03, 2021
Receivables [Abstract]
Accounts Receivable and Finance Receivables	Accounts Receivable and Finance Receivables Accounts Receivable Accounts receivable is composed of the following: (In millions) April 3, January 2, Commercial $ 732 $ 668 U.S. Government contracts 184 155 916 823 Allowance for credit losses (33) (36) Total accounts receivable, net $ 883 $ 787 Finance Receivables Finance receivables are presented in the following table: (In millions) April 3, January 2, Finance receivables $ 705 $ 779 Allowance for credit losses (33) (35) Total finance receivables, net $ 672 $ 744 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. Since the first quarter of 2020, the Finance segment has worked with certain customers impacted by the pandemic to provide payment relief through loan modifications. The types of temporary payment relief we offered to these customers included delays in the timing of required principal payments, deferrals of interest payments and/or interest-only payments. For loan modifications that cover payment-relief periods in excess of six months, even if the loan was previously current, the loan is deemed a troubled debt restructuring and considered impaired. These impaired loans are classified as either nonaccrual or watchlist based on a review of the credit quality indicators as discussed above. During the first quarter of 2021, we modified finance receivable contracts for 12 customers with an outstanding balance at April 3, 2021 totaling $29 million, of which $25 million was categorized as troubled debt restructurings. Due to the nature of these restructurings, the financial effects were not significant. We had four customer defaults related to finance receivables previously modified as a troubled debt restructuring that had an insignificant outstanding balance. We believe our allowance for credit losses adequately covers our exposure on these loans as our estimated collateral values largely exceed the outstanding loan amounts. Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows: (Dollars in millions) April 3, January 2, Performing $ 591 $ 612 Watchlist 2 74 Nonaccrual 112 93 Nonaccrual as a percentage of finance receivables 15.89% 11.94% Current and less than 31 days past due $ 676 $ 738 31-60 days past due 3 12 61-90 days past due 6 11 Over 90 days past due 20 18 60+ days contractual delinquency as a percentage of finance receivables 3.69% 3.72% At April 3, 2021, 27% of our performing finance receivables were originated since the beginning of 2020 and 33% were originated from 2017 to 2019. For finance receivables categorized as nonaccrual, 68% were originated from 2017 to 2019. On a quarterly basis, we evaluate individual larger balance accounts for impairment. A finance receivable is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement based on our review of the credit quality indicators described above. Impaired finance receivables include both nonaccrual accounts and accounts for which full collection of principal and interest remains probable, but the account’s original terms have been, or are expected to be, significantly modified. If the modification specifies an interest rate equal to or greater than a market rate for a finance receivable with comparable risk, the account is not considered impaired in years subsequent to the modification. A summary of finance receivables and the allowance for credit losses, based on the results of our impairment evaluation, is provided below. The finance receivables included in this table specifically exclude leveraged leases in accordance with U.S. generally accepted accounting principles. (In millions) April 3, January 2, Finance receivables evaluated collectively $ 498 $ 521 Finance receivables evaluated individually 113 163 Allowance for credit losses based on collective evaluation 26 28 Allowance for credit losses based on individual evaluation 7 7 Impaired finance receivables with specific allowance for losses $ 42 $ 46 Impaired finance receivables with no specific allowance for losses 71 117 Unpaid principal balance of impaired finance receivables 122 175 Allowance for credit losses on impaired finance receivables 7 7 Average recorded investment of impaired finance receivables 138 126

Inventories

Inventories	3 Months Ended
	Apr. 03, 2021
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories are composed of the following: (In millions) April 3, January 2, Finished goods $ 1,222 $ 1,228 Work in process 1,663 1,455 Raw materials and components 820 830 Total inventories $ 3,705 $ 3,513

Warranty Liability

Warranty Liability	3 Months Ended
	Apr. 03, 2021
Payables and Accruals [Abstract]
Warranty Liability	Warranty Liability Changes in our warranty liability are as follows: Three Months Ended (In millions) April 3, April 4, Beginning of period $ 119 $ 141 Provision 14 13 Settlements (20) (19) Adjustments* 3 (2) End of period $ 116 $ 133 * Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.

Leases

Leases	3 Months Ended
	Apr. 03, 2021
Leases [Abstract]
Leases	Leases We primarily lease certain manufacturing plants, offices, warehouses, training and service centers at various locations worldwide. Our operating leases have remaining lease terms up to 28 years, which include options to extend the lease term for periods up to 25 years when it is reasonably certain the option will be exercised. In the first quarter of 2021 and 2020, operating lease cost totaled $16 million and $15 million, respectively. Cash paid for operating leases totaled $16 million and $15 million in the first quarter of 2021 and 2020, respectively, which is classified in cash flows from operating activities. Noncash transactions totaled $45 million and $3 million in the first quarter of 2021 and 2020, respectively, reflecting the recognition of operating lease assets and liabilities for new or extended leases. Variable and short-term lease costs were not significant. Balance sheet and other information related to our operating leases is as follows: (Dollars in millions) April 3, January 2, Other assets $ 384 $ 349 Other current liabilities 54 47 Other liabilities 336 306 Weighted-average remaining lease term (in years) 10.9 11.6 Weighted-average discount rate 3.52% 4.17% At April 3, 2021, maturities of our operating lease liabilities on an undiscounted basis totaled $50 million for the remainder of 2021, $63 million for 2022, $54 million for 2023, $45 million for 2024, $41 million for 2025 and $240 million thereafter.

Derivative Instruments and Fair

Derivative Instruments and Fair Value Measurements	3 Months Ended
	Apr. 03, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Fair Value Measurements	Derivative Instruments and Fair Value Measurements We measure fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We prioritize the assumptions that market participants would use in pricing the asset or liability into a three-tier fair value hierarchy. This fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs in which little or no market data exist, requiring companies to develop their own assumptions. Observable inputs that do not meet the criteria of Level 1, which include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets and liabilities in markets that are not active, are categorized as Level 2. Level 3 inputs are those that reflect our estimates about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are utilized only to the extent that observable inputs are not available or cost effective to obtain. Assets and Liabilities Recorded at Fair Value on a Recurring Basis We manufacture and sell our products in a number of countries throughout the world, and, therefore, we are exposed to movements in foreign currency exchange rates. We primarily utilize foreign currency exchange contracts with maturities of no more than three years to manage this volatility. These contracts qualify as cash flow hedges and are intended to offset the effect of exchange rate fluctuations on forecasted sales, inventory purchases and overhead expenses. Net gains and losses recognized in earnings and Accumulated other comprehensive loss on cash flow hedges, including gains and losses related to hedge ineffectiveness, were not significant in the periods presented. Our foreign currency exchange contracts are measured at fair value using the market method valuation technique. The inputs to this technique utilize current foreign currency exchange forward market rates published by third-party leading financial news and data providers. These are observable data that represent the rates that the financial institution uses for contracts entered into at that date; however, they are not based on actual transactions, so they are classified as Level 2. At April 3, 2021 and January 2, 2021, we had foreign currency exchange contracts with notional amounts upon which the contracts were based of $423 million and $318 million, respectively. At April 3, 2021, the fair value amounts of our foreign currency exchange contracts were a $9 million asset and a $1 million liability. At January 2, 2021, the fair value amounts of our foreign currency exchange contracts were a $5 million asset and a $2 million liability. Our Finance group enters into interest rate swap agreements to mitigate exposure to fluctuations in interest rates. By using these contracts, we are able to convert floating-rate cash flows to fixed-rate cash flows. These agreements are designated as cash flow hedges. At April 3, 2021 and January 2, 2021, we had one swap agreement that matures in February 2022 with a notional amount of $289 million and $294 million, respectively, and a fair value of a $3 million and $4 million liability, respectively. Assets and Liabilities Not Recorded at Fair Value The carrying value and estimated fair value of our financial instruments that are not reflected in the financial statements at fair value are as follows: April 3, 2021 January 2, 2021 Carrying Estimated Carrying Estimated (In millions) Value Fair Value Value Fair Value Manufacturing group Debt, excluding leases $ (3,438) $ (3,615) $ (3,690) $ (3,986) Finance group Finance receivables, excluding leases 482 525 549 599 Debt (653) (599) (662) (587) 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.

Shareholders' Equity

Shareholders' Equity	3 Months Ended
	Apr. 03, 2021
Equity [Abstract]
Shareholders' Equity	Shareholders’ Equity A reconciliation of Shareholders’ equity is presented below: (In millions) Common Capital Treasury Retained Accumulated Total Three months ended April 3, 2021 Beginning of period $ 29 $ 1,785 $ (203) $ 5,973 $ (1,739) $ 5,845 Net income — — — 171 — 171 Other comprehensive income — — — — 16 16 Share-based compensation activity — 60 — — — 60 Dividends declared — — — (5) — (5) Purchases of common stock — — (91) — — (91) End of period $ 29 $ 1,845 $ (294) $ 6,139 $ (1,723) $ 5,996 Three months ended April 4, 2020 Beginning of period $ 29 $ 1,674 $ (20) $ 5,682 $ (1,847) $ 5,518 Net income — — — 50 — 50 Other comprehensive loss — — — — (12) (12) Share-based compensation activity — 37 — — — 37 Dividends declared — — — (5) — (5) Purchases of common stock — — (54) — — (54) End of period $ 29 $ 1,711 $ (74) $ 5,727 $ (1,859) $ 5,534 Dividends per share of common stock were $0.02 for both the first quarter of 2021 and 2020. Earnings Per Share We calculate basic and diluted earnings per share (EPS) based on net income, which approximates income available to common shareholders for each period. Basic EPS is calculated using the two-class method, which includes the weighted-average number of common shares outstanding during the period and restricted stock units to be paid in stock that are deemed participating securities as they provide nonforfeitable rights to dividends. Diluted EPS considers the dilutive effect of all potential future common stock, including stock options. The weighted-average shares outstanding for basic and diluted EPS are as follows: Three Months Ended (In thousands) April 3, April 4, Basic weighted-average shares outstanding 227,009 228,311 Dilutive effect of stock options 1,275 616 Diluted weighted-average shares outstanding 228,284 228,927 Stock options to purchase 4.3 million and 7.5 million shares of common stock were excluded from the calculation of diluted weighted-average shares outstanding for the first quarter of 2021 and 2020, respectively, as their effect would have been anti-dilutive. Accumulated Other Comprehensive Loss and Other Comprehensive Income (Loss) The components of Accumulated other comprehensive loss are presented below: (In millions) Pension and Foreign Deferred Accumulated Balance at January 2, 2021 $ (1,780) $ 42 $ (1) $ (1,739) Other comprehensive loss before reclassifications — (32) 4 (28) Reclassified from Accumulated other comprehensive loss 30 14 — 44 Balance at April 3, 2021 $ (1,750) $ 24 $ 3 $ (1,723) Balance at January 4, 2020 $ (1,811) $ (36) $ — $ (1,847) Other comprehensive loss before reclassifications — (40) (8) (48) Reclassified from Accumulated other comprehensive loss 37 — (1) 36 Balance at April 4, 2020 $ (1,774) $ (76) $ (9) $ (1,859) The before and after-tax components of Other comprehensive income (loss) are presented below: April 3, 2021 April 4, 2020 (In millions) Pre-Tax Tax After-tax Pre-Tax Tax After-tax Three Months Ended Pension and postretirement benefits adjustments: Amortization of net actuarial loss* $ 38 $ (9) $ 29 $ 46 $ (10) $ 36 Amortization of prior service cost* 2 (1) 1 2 (1) 1 Pension and postretirement benefits adjustments, net 40 (10) 30 48 (11) 37 Foreign currency translation adjustments: Foreign currency translation adjustments (32) — (32) (37) (3) (40) Business disposition 14 — 14 — — — Foreign currency translation adjustments, net (18) — (18) (37) (3) (40) Deferred gains (losses) on hedge contracts: Current deferrals 5 (1) 4 (9) 1 (8) Reclassification adjustments — — — (1) — (1) Deferred gains (losses) on hedge contracts, net 5 (1) 4 (10) 1 (9) Total $ 27 $ (11) $ 16 $ 1 $ (13) $ (12) *These components of other comprehensive income (loss) are included in the computation of net periodic pension cost (credit). See Note 16 of our 2020 Annual Report on Form 10-K for additional information.

Segment Information

Segment Information	3 Months Ended
	Apr. 03, 2021
Segment Reporting [Abstract]
Segment Information	Segment Information We operate in, and report financial information for, the following five business segments: Textron Aviation, Bell, Textron Systems, Industrial and Finance. Segment profit is an important measure used for evaluating performance and for decision-making purposes. Segment profit for the manufacturing segments excludes interest expense, certain corporate expenses, gains/losses on major business dispositions and special charges. The measurement for the Finance segment includes interest income and expense along with intercompany interest income and expense. Our revenues by segment, along with a reconciliation of segment profit to income before income taxes, are included in the table below: Three Months Ended (In millions) April 3, April 4, Revenues Textron Aviation $ 865 $ 872 Bell 846 823 Textron Systems 328 328 Industrial 825 740 Finance 15 14 Total revenues $ 2,879 $ 2,777 Segment Profit Textron Aviation $ 47 $ 3 Bell 105 115 Textron Systems 51 26 Industrial 47 9 Finance 6 3 Segment profit 256 156 Corporate expenses and other, net (40) (14) Interest expense, net for Manufacturing group (35) (34) Special charges (6) (39) Gain on business disposition 15 — Income before income taxes $ 190 $ 69

Revenues

Revenues	3 Months Ended
	Apr. 03, 2021
Revenue from Contract with Customer [Abstract]
Revenues	Revenues Disaggregation of Revenues Our revenues disaggregated by major product type are presented below: Three Months Ended (In millions) April 3, April 4, Aircraft $ 535 $ 515 Aftermarket parts and services 330 357 Textron Aviation 865 872 Military aircraft and support programs 577 620 Commercial helicopters, parts and services 269 203 Bell 846 823 Air systems* 123 136 Land and sea systems* 57 60 Other 148 132 Textron Systems 328 328 Fuel systems and functional components 497 465 Specialized vehicles 328 275 Industrial 825 740 Finance 15 14 Total revenues $ 2,879 $ 2,777 *At the beginning of 2021, Textron Systems began reporting under the Air Systems, Land and Sea Systems and Other product lines to reflect a reorganization and transfer of certain products. Prior period revenues have been reclassified to conform to current period presentation. Our revenues for our segments by customer type and geographic location are presented below: (In millions) Textron Bell Textron Industrial Finance Total Three months ended April 3, 2021 Customer type: Commercial $ 846 $ 266 $ 58 $ 820 $ 15 $ 2,005 U.S. Government 19 580 270 5 — 874 Total revenues $ 865 $ 846 $ 328 $ 825 $ 15 $ 2,879 Geographic location: United States $ 609 $ 616 $ 289 $ 378 $ 8 $ 1,900 Europe 84 36 10 236 — 366 Asia and Australia 76 79 16 94 2 267 Other international 96 115 13 117 5 346 Total revenues $ 865 $ 846 $ 328 $ 825 $ 15 $ 2,879 Three months ended April 4, 2020 Customer type: Commercial $ 848 $ 198 $ 71 $ 739 $ 14 $ 1,870 U.S. Government 24 625 257 1 — 907 Total revenues $ 872 $ 823 $ 328 $ 740 $ 14 $ 2,777 Geographic location: United States $ 597 $ 690 $ 286 $ 329 $ 6 $ 1,908 Europe 84 24 12 228 1 349 Asia and Australia 123 50 20 53 1 247 Other international 68 59 10 130 6 273 Total revenues $ 872 $ 823 $ 328 $ 740 $ 14 $ 2,777 Remaining Performance Obligations Our remaining performance obligations, which is the equivalent of our backlog, represent the expected transaction price allocated to our contracts that we expect to recognize as revenues in future periods when we perform under the contracts. These remaining obligations exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery, Indefinite Quantity contracts. At April 3, 2021, we had $9.6 billion in remaining performance obligations of which we expect to recognize revenues of approximately 73% through 2022, an additional 23% through 2024, and the balance thereafter. Contract Assets and Liabilities Assets and liabilities related to our contracts with customers are reported on a contract-by-contract basis at the end of each reporting period. At April 3, 2021 and January 2, 2021, contract assets totaled $578 million and $561 million, respectively, and contract liabilities totaled $887 million and $842 million, respectively, reflecting timing differences between revenue recognized, billings and payments from customers. During the first quarter of 2021 and 2020, we recognized revenues of $278 million and $231 million, respectively, that were included in the contract liability balance at the beginning of each year.

Share-Based Compensation

Share-Based Compensation	3 Months Ended
	Apr. 03, 2021
Share-based Payment Arrangement [Abstract]
Share-Based Compensation	Share-Based Compensation Under our share-based compensation plan, we have authorization to provide awards to selected employees and non-employee directors in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, performance stock, performance share units and other awards. Compensation expense, or income in periods of share price depreciation, related to share-based compensation is included in net income as follows: Three Months Ended (In millions) April 3, April 4, Compensation expense (income) $ 55 $ (13) Income tax (benefit) expense (13) 3 Total net compensation expense (income) included in net income $ 42 $ (10) Compensation expense (income) included stock option expense of $12 million in the first quarter of 2021 and $10 million in the first quarter of 2020. Stock Options Options to purchase our shares have a maximum term of ten years and generally vest ratably over a three-year period. Stock option compensation cost is calculated under the fair value approach using the Black-Scholes option-pricing model to determine the fair value of options granted on the date of grant. The expected volatility used in this model is based on historical volatilities and implied volatilities from traded options on our common stock. The expected term is based on historical option exercise data, which is adjusted to reflect any anticipated changes in expected behavior. We grant options annually on the first day of March and the assumptions used in our option-pricing model for these grants and the weighted-average fair value for these options are as follows: March 1, 2021 March 1, 2020 Fair value of options at grant date $ 15.05 $ 10.66 Dividend yield 0.2% 0.2% Expected volatility 33.6% 29.3% Risk-free interest rate 0.7% 1.1% Expected term (in years) 4.7 4.7 The stock option activity during the first quarter of 2021 is provided below: (Options in thousands) Number of Weighted- Outstanding at January 2, 2021 9,810 $ 44.03 Granted 1,480 51.56 Exercised (812) (33.08) Forfeited or expired (59) (45.91) Outstanding at April 3, 2021 10,419 $ 45.94 Exercisable at April 3, 2021 7,062 $ 45.54 At April 3, 2021, our outstanding options had an aggregate intrinsic value of $117 million and a weighted-average remaining contractual life of 6.4 years. Our exercisable options had an aggregate intrinsic value of $83 million and a weighted-average remaining contractual life of 5.1 years at April 3, 2021. The total intrinsic value of options exercised during the first quarter of 2021 and 2020 was $15 million and $3 million, respectively. Restricted Stock Units We issue restricted stock units that include the right to receive dividend equivalents and are settled in both cash and stock. Beginning in 2020, new grants of restricted stock units will vest in full on the third anniversary of the grant date. Restricted stock units granted prior to 2020 vest one-third each in the third, fourth and fifth year following the year of the grant. The fair value of these units is based on the trading price of our common stock. For units payable in stock, we use the trading price on the grant date, while units payable in cash are remeasured using the price at each reporting period date. The activity for restricted stock units payable in both stock and cash during the first quarter of 2021 is provided below: Units Payable in Stock Units Payable in Cash (Shares/Units in thousands) Number of Weighted- Number of Weighted- Outstanding at January 2, 2021, nonvested 583 $ 47.60 1,145 $ 48.53 Granted 124 51.56 333 51.56 Vested (127) (46.14) (251) (46.42) Forfeited — — (23) (48.33) Outstanding at April 3, 2021, nonvested 580 $ 48.77 1,204 $ 49.82 The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows: Three Months Ended (In millions) April 3, April 4, Fair value of awards vested $ 19 $ 17 Cash paid 13 11 Performance Share Units The activity for our performance share units during the first quarter of 2021 is as follows: (Units in thousands) Number of Weighted- Outstanding at January 2, 2021, nonvested 514 $ 47.02 Granted 256 51.56 Outstanding at April 3, 2021, nonvested 770 $ 48.52 Cash paid under these awards totaled $6 million and $7 million in the first quarter of 2021 and 2020, respectively.

Retirement Plans

Retirement Plans	3 Months Ended
	Apr. 03, 2021
Retirement Benefits [Abstract]
Retirement Plans	Retirement Plans We provide defined benefit pension plans and other postretirement benefits to eligible employees. The components of net periodic benefit cost (credit) for these plans are as follows: Three Months Ended (In millions) April 3, April 4, Pension Benefits Service cost $ 29 $ 26 Interest cost 63 73 Expected return on plan assets (144) (144) Amortization of net actuarial loss 39 46 Amortization of prior service cost 3 3 Net periodic benefit cost (credit) $ (10) $ 4 Postretirement Benefits Other Than Pensions Service cost $ 1 $ 1 Interest cost 1 2 Amortization of net actuarial loss (1) — Amortization of prior service credit (1) (1) Net periodic benefit cost $ — $ 2

Special Charges

Special Charges	3 Months Ended
	Apr. 03, 2021
Special Charges [Abstract]
Special Charges	Special Charges First Quarter 2021 Charges In the first quarter of 2021, we recorded special charges of $6 million related to a restructuring plan. This plan was initiated in the second quarter of 2020 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, and was expanded in the third quarter of 2020 to include additional headcount reductions and facility consolidations. Since inception of the plan, we have incurred total charges of $114 million, which included severance costs of $73 million for the termination of approximately 2,700 employees, asset impairment charges of $24 million and contract terminations and other costs of $17 million. Of these amounts, $40 million was incurred at Industrial, $37 million at Textron Systems, $33 million at Textron Aviation, and $4 million at Corporate. We expect to incur additional contract termination costs and other charges in the range of $14 million to $24 million, primarily in the Industrial segment, and expect the plan to be substantially completed in the third quarter of 2021. First Quarter 2020 Charges In the first quarter of 2020, we recognized $39 million of intangible asset impairment charges at the Textron Aviation and Industrial segments. Due to the impact of the COVID-19 pandemic, we experienced decreased demand for our products and services as our customers delayed or ceased orders due to the environment of economic uncertainty. In light of these conditions, Textron Aviation had temporarily shut down most aircraft production, including the King Air turboprop and Beechcraft piston product lines, and had instituted employee furloughs. Based on these events, we performed an interim impairment test of the indefinite-lived Beechcraft and King Air trade name intangible assets and recorded an impairment charge of $32 million. Restructuring Reserve Our restructuring reserve activity is summarized below: Contract Severance Terminations (In millions) Costs and Other Total Balance at January 2, 2021 $ 43 $ 9 $ 52 Provision for 2020 COVID-19 restructuring plan — 4 4 Cash paid (13) (4) (17) Foreign currency translation (1) — (1) Balance at April 3, 2021 $ 29 $ 9 $ 38 The majority of the remaining cash outlays of $38 million is expected to be paid in 2021. Severance costs generally are paid on a lump-sum basis and include outplacement costs, which are paid in accordance with normal payment terms.

Income Taxes

Income Taxes	3 Months Ended
	Apr. 03, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesOur effective tax rate for the first quarter of 2021 and 2020 was 10.0% and 27.5%, respectively. In the first quarter of 2021, the effective tax rate was lower than the U.S. federal statutory rate of 21%, primarily due to a $12 million benefit recognized for additional research and development credits related to prior years. In the first quarter of 2020, the effective tax rate was higher than the U.S. federal statutory rate of 21%, primarily due to a $10 million tax provision established related to a decision to dividend cash back from select non-U.S. jurisdictions to the U.S. in 2020.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Apr. 03, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesWe are subject to legal proceedings and other claims arising out of the conduct of our business, including proceedings and claims relating to commercial and financial transactions; government contracts; alleged lack of compliance with applicable laws and regulations; production partners; product liability; patent and trademark infringement; employment disputes; and environmental, safety and health matters. Some of these legal proceedings and claims seek damages, fines or penalties in substantial amounts or remediation of environmental contamination. As a government contractor, we are subject to audits, reviews and investigations to determine whether our operations are being conducted in accordance with applicable regulatory requirements. Under federal government procurement regulations, certain claims brought by the U.S. Government could result in our suspension or debarment from U.S. Government contracting for a period of time. On the basis of information presently available, we do not believe that existing proceedings and claims will have a material effect on our financial position or results of operations.

Basis of Presenation (Policies)

Basis of Presenation (Policies)	3 Months Ended
	Apr. 03, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Use of Estimates	Use of Estimates We prepare our financial statements in conformity with generally accepted accounting principles, which require us to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Our estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the Consolidated Statements of Operations in the period that they are determined.

Accounts Receivable and Finan_2

Accounts Receivable and Finance Receivables (Tables)	3 Months Ended
	Apr. 03, 2021
Receivables [Abstract]
Accounts Receivable	Accounts receivable is composed of the following: (In millions) April 3, January 2, Commercial $ 732 $ 668 U.S. Government contracts 184 155 916 823 Allowance for credit losses (33) (36) Total accounts receivable, net $ 883 $ 787
Finance Receivables	Finance receivables are presented in the following table: (In millions) April 3, January 2, Finance receivables $ 705 $ 779 Allowance for credit losses (33) (35) Total finance receivables, net $ 672 $ 744
Financing Receivables Categorized Based On Credit Quality Indicators	Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows: (Dollars in millions) April 3, January 2, Performing $ 591 $ 612 Watchlist 2 74 Nonaccrual 112 93 Nonaccrual as a percentage of finance receivables 15.89% 11.94% Current and less than 31 days past due $ 676 $ 738 31-60 days past due 3 12 61-90 days past due 6 11 Over 90 days past due 20 18 60+ days contractual delinquency as a percentage of finance receivables 3.69% 3.72%
Financing Receivable Credit Quality Indicators	Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows: (Dollars in millions) April 3, January 2, Performing $ 591 $ 612 Watchlist 2 74 Nonaccrual 112 93 Nonaccrual as a percentage of finance receivables 15.89% 11.94% Current and less than 31 days past due $ 676 $ 738 31-60 days past due 3 12 61-90 days past due 6 11 Over 90 days past due 20 18 60+ days contractual delinquency as a percentage of finance receivables 3.69% 3.72%
Finance Receivables and Allowance For Credit Losses Based on Impairment Evaluation	A summary of finance receivables and the allowance for credit losses, based on the results of our impairment evaluation, is provided below. The finance receivables included in this table specifically exclude leveraged leases in accordance with U.S. generally accepted accounting principles. (In millions) April 3, January 2, Finance receivables evaluated collectively $ 498 $ 521 Finance receivables evaluated individually 113 163 Allowance for credit losses based on collective evaluation 26 28 Allowance for credit losses based on individual evaluation 7 7 Impaired finance receivables with specific allowance for losses $ 42 $ 46 Impaired finance receivables with no specific allowance for losses 71 117 Unpaid principal balance of impaired finance receivables 122 175 Allowance for credit losses on impaired finance receivables 7 7 Average recorded investment of impaired finance receivables 138 126

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Apr. 03, 2021
Inventory Disclosure [Abstract]
Inventories	Inventories are composed of the following: (In millions) April 3, January 2, Finished goods $ 1,222 $ 1,228 Work in process 1,663 1,455 Raw materials and components 820 830 Total inventories $ 3,705 $ 3,513

Warranty Liability (Tables)

Warranty Liability (Tables)	3 Months Ended
	Apr. 03, 2021
Payables and Accruals [Abstract]
Changes in warranty liability	Changes in our warranty liability are as follows: Three Months Ended (In millions) April 3, April 4, Beginning of period $ 119 $ 141 Provision 14 13 Settlements (20) (19) Adjustments* 3 (2) End of period $ 116 $ 133 * Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.

Leases (Tables)

Leases (Tables)	3 Months Ended
	Apr. 03, 2021
Leases [Abstract]
Schedule of Balance Sheet and Other Information	Balance sheet and other information related to our operating leases is as follows: (Dollars in millions) April 3, January 2, Other assets $ 384 $ 349 Other current liabilities 54 47 Other liabilities 336 306 Weighted-average remaining lease term (in years) 10.9 11.6 Weighted-average discount rate 3.52% 4.17%

Derivative Instruments and Fa_2

Derivative Instruments and Fair Value Measurements (Tables)	3 Months Ended
	Apr. 03, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Carrying Value and Estimated and Fair Value of Financial Instruments	The carrying value and estimated fair value of our financial instruments that are not reflected in the financial statements at fair value are as follows: April 3, 2021 January 2, 2021 Carrying Estimated Carrying Estimated (In millions) Value Fair Value Value Fair Value Manufacturing group Debt, excluding leases $ (3,438) $ (3,615) $ (3,690) $ (3,986) Finance group Finance receivables, excluding leases 482 525 549 599 Debt (653) (599) (662) (587)

Shareholders' Equity (Tables)

Shareholders' Equity (Tables)	3 Months Ended
	Apr. 03, 2021
Equity [Abstract]
Schedule of Shareholder's equity	A reconciliation of Shareholders’ equity is presented below: (In millions) Common Capital Treasury Retained Accumulated Total Three months ended April 3, 2021 Beginning of period $ 29 $ 1,785 $ (203) $ 5,973 $ (1,739) $ 5,845 Net income — — — 171 — 171 Other comprehensive income — — — — 16 16 Share-based compensation activity — 60 — — — 60 Dividends declared — — — (5) — (5) Purchases of common stock — — (91) — — (91) End of period $ 29 $ 1,845 $ (294) $ 6,139 $ (1,723) $ 5,996 Three months ended April 4, 2020 Beginning of period $ 29 $ 1,674 $ (20) $ 5,682 $ (1,847) $ 5,518 Net income — — — 50 — 50 Other comprehensive loss — — — — (12) (12) Share-based compensation activity — 37 — — — 37 Dividends declared — — — (5) — (5) Purchases of common stock — — (54) — — (54) End of period $ 29 $ 1,711 $ (74) $ 5,727 $ (1,859) $ 5,534
Schedule of Weighted-Average Shares Outstanding for Basic and Diluted EPS	The weighted-average shares outstanding for basic and diluted EPS are as follows: Three Months Ended (In thousands) April 3, April 4, Basic weighted-average shares outstanding 227,009 228,311 Dilutive effect of stock options 1,275 616 Diluted weighted-average shares outstanding 228,284 228,927
Schedule of Components of Accumulated Other Comprehensive Loss	The components of Accumulated other comprehensive loss are presented below: (In millions) Pension and Foreign Deferred Accumulated Balance at January 2, 2021 $ (1,780) $ 42 $ (1) $ (1,739) Other comprehensive loss before reclassifications — (32) 4 (28) Reclassified from Accumulated other comprehensive loss 30 14 — 44 Balance at April 3, 2021 $ (1,750) $ 24 $ 3 $ (1,723) Balance at January 4, 2020 $ (1,811) $ (36) $ — $ (1,847) Other comprehensive loss before reclassifications — (40) (8) (48) Reclassified from Accumulated other comprehensive loss 37 — (1) 36 Balance at April 4, 2020 $ (1,774) $ (76) $ (9) $ (1,859)
Schedule of Before and After-Tax Components of Other Comprehensive Income (Loss)	The before and after-tax components of Other comprehensive income (loss) are presented below: April 3, 2021 April 4, 2020 (In millions) Pre-Tax Tax After-tax Pre-Tax Tax After-tax Three Months Ended Pension and postretirement benefits adjustments: Amortization of net actuarial loss* $ 38 $ (9) $ 29 $ 46 $ (10) $ 36 Amortization of prior service cost* 2 (1) 1 2 (1) 1 Pension and postretirement benefits adjustments, net 40 (10) 30 48 (11) 37 Foreign currency translation adjustments: Foreign currency translation adjustments (32) — (32) (37) (3) (40) Business disposition 14 — 14 — — — Foreign currency translation adjustments, net (18) — (18) (37) (3) (40) Deferred gains (losses) on hedge contracts: Current deferrals 5 (1) 4 (9) 1 (8) Reclassification adjustments — — — (1) — (1) Deferred gains (losses) on hedge contracts, net 5 (1) 4 (10) 1 (9) Total $ 27 $ (11) $ 16 $ 1 $ (13) $ (12)

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Apr. 03, 2021
Segment Reporting [Abstract]
Revenues by Segment and Reconciliation of Segment Profit Income (Loss) Before Income Taxes	Our revenues by segment, along with a reconciliation of segment profit to income before income taxes, are included in the table below: Three Months Ended (In millions) April 3, April 4, Revenues Textron Aviation $ 865 $ 872 Bell 846 823 Textron Systems 328 328 Industrial 825 740 Finance 15 14 Total revenues $ 2,879 $ 2,777 Segment Profit Textron Aviation $ 47 $ 3 Bell 105 115 Textron Systems 51 26 Industrial 47 9 Finance 6 3 Segment profit 256 156 Corporate expenses and other, net (40) (14) Interest expense, net for Manufacturing group (35) (34) Special charges (6) (39) Gain on business disposition 15 — Income before income taxes $ 190 $ 69

Revenues (Tables)

Revenues (Tables)	3 Months Ended
	Apr. 03, 2021
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	Our revenues disaggregated by major product type are presented below: Three Months Ended (In millions) April 3, April 4, Aircraft $ 535 $ 515 Aftermarket parts and services 330 357 Textron Aviation 865 872 Military aircraft and support programs 577 620 Commercial helicopters, parts and services 269 203 Bell 846 823 Air systems* 123 136 Land and sea systems* 57 60 Other 148 132 Textron Systems 328 328 Fuel systems and functional components 497 465 Specialized vehicles 328 275 Industrial 825 740 Finance 15 14 Total revenues $ 2,879 $ 2,777 *At the beginning of 2021, Textron Systems began reporting under the Air Systems, Land and Sea Systems and Other product lines to reflect a reorganization and transfer of certain products. Prior period revenues have been reclassified to conform to current period presentation. Our revenues for our segments by customer type and geographic location are presented below: (In millions) Textron Bell Textron Industrial Finance Total Three months ended April 3, 2021 Customer type: Commercial $ 846 $ 266 $ 58 $ 820 $ 15 $ 2,005 U.S. Government 19 580 270 5 — 874 Total revenues $ 865 $ 846 $ 328 $ 825 $ 15 $ 2,879 Geographic location: United States $ 609 $ 616 $ 289 $ 378 $ 8 $ 1,900 Europe 84 36 10 236 — 366 Asia and Australia 76 79 16 94 2 267 Other international 96 115 13 117 5 346 Total revenues $ 865 $ 846 $ 328 $ 825 $ 15 $ 2,879 Three months ended April 4, 2020 Customer type: Commercial $ 848 $ 198 $ 71 $ 739 $ 14 $ 1,870 U.S. Government 24 625 257 1 — 907 Total revenues $ 872 $ 823 $ 328 $ 740 $ 14 $ 2,777 Geographic location: United States $ 597 $ 690 $ 286 $ 329 $ 6 $ 1,908 Europe 84 24 12 228 1 349 Asia and Australia 123 50 20 53 1 247 Other international 68 59 10 130 6 273 Total revenues $ 872 $ 823 $ 328 $ 740 $ 14 $ 2,777

Share-Based Compensation (Table

Share-Based Compensation (Tables)	3 Months Ended
	Apr. 03, 2021
Share-based Payment Arrangement [Abstract]
Compensation expense included in net income	Compensation expense, or income in periods of share price depreciation, related to share-based compensation is included in net income as follows: Three Months Ended (In millions) April 3, April 4, Compensation expense (income) $ 55 $ (13) Income tax (benefit) expense (13) 3 Total net compensation expense (income) included in net income $ 42 $ (10)
Weighted-average fair value of stock options and assumptions used in option-pricing model	We grant options annually on the first day of March and the assumptions used in our option-pricing model for these grants and the weighted-average fair value for these options are as follows: March 1, 2021 March 1, 2020 Fair value of options at grant date $ 15.05 $ 10.66 Dividend yield 0.2% 0.2% Expected volatility 33.6% 29.3% Risk-free interest rate 0.7% 1.1% Expected term (in years) 4.7 4.7
Stock option activity	The stock option activity during the first quarter of 2021 is provided below: (Options in thousands) Number of Weighted- Outstanding at January 2, 2021 9,810 $ 44.03 Granted 1,480 51.56 Exercised (812) (33.08) Forfeited or expired (59) (45.91) Outstanding at April 3, 2021 10,419 $ 45.94 Exercisable at April 3, 2021 7,062 $ 45.54
Activity for Restricted Stock Units	The activity for restricted stock units payable in both stock and cash during the first quarter of 2021 is provided below: Units Payable in Stock Units Payable in Cash (Shares/Units in thousands) Number of Weighted- Number of Weighted- Outstanding at January 2, 2021, nonvested 583 $ 47.60 1,145 $ 48.53 Granted 124 51.56 333 51.56 Vested (127) (46.14) (251) (46.42) Forfeited — — (23) (48.33) Outstanding at April 3, 2021, nonvested 580 $ 48.77 1,204 $ 49.82
Fair value of awards vested and cash paid during respective periods	The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows: Three Months Ended (In millions) April 3, April 4, Fair value of awards vested $ 19 $ 17 Cash paid 13 11
Activity for Performance Share Units	The activity for our performance share units during the first quarter of 2021 is as follows: (Units in thousands) Number of Weighted- Outstanding at January 2, 2021, nonvested 514 $ 47.02 Granted 256 51.56 Outstanding at April 3, 2021, nonvested 770 $ 48.52

Retirement Plans (Tables)

Retirement Plans (Tables)	3 Months Ended
	Apr. 03, 2021
Retirement Benefits [Abstract]
Schedule of Components of Net Periodic Benefit Cost (Credit)	The components of net periodic benefit cost (credit) for these plans are as follows: Three Months Ended (In millions) April 3, April 4, Pension Benefits Service cost $ 29 $ 26 Interest cost 63 73 Expected return on plan assets (144) (144) Amortization of net actuarial loss 39 46 Amortization of prior service cost 3 3 Net periodic benefit cost (credit) $ (10) $ 4 Postretirement Benefits Other Than Pensions Service cost $ 1 $ 1 Interest cost 1 2 Amortization of net actuarial loss (1) — Amortization of prior service credit (1) (1) Net periodic benefit cost $ — $ 2

Special Charges (Tables)

Special Charges (Tables)	3 Months Ended
	Apr. 03, 2021
Special Charges [Abstract]
Schedule of Restructuring Reserve Activity	Our restructuring reserve activity is summarized below: Contract Severance Terminations (In millions) Costs and Other Total Balance at January 2, 2021 $ 43 $ 9 $ 52 Provision for 2020 COVID-19 restructuring plan — 4 4 Cash paid (13) (4) (17) Foreign currency translation (1) — (1) Balance at April 3, 2021 $ 29 $ 9 $ 38

Basis of Presentation (Details)

Basis of Presentation (Details) $ / shares in Units, $ in Millions	3 Months Ended
	Apr. 03, 2021USD ($)borrowingGroup$ / shares	Apr. 04, 2020USD ($)$ / shares
Number of borrowing groups | borrowingGroup	2
Cumulative catch-up method
Cumulative catch up adjustments	$ 14	$ 2
Change in accounting estimate financial effect, increase in net income or decrease in net loss	$ 11	$ 1
Change in accounting estimate financial effect increase in earnings per share diluted or decrease in earnings per share diluted | $ / shares	$ 0.05	$ 0.01
Recognized revenue form performance obligations satisfied in prior periods	$ 18	$ 4
Gross favorable adjustments	36	27
Gross unfavorable adjustments	$ 22	$ 25

Business Dispositions (Details)

Business Dispositions (Details) - USD ($) $ in Millions	Jan. 25, 2021	Apr. 03, 2021	Apr. 04, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from business disposition		$ 39	$ 0
After tax gain		$ 15	$ 0
Disposition of businesses | TRU Non-US
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from business disposition	$ 39
After tax gain	$ 15

Accounts Receivable and Finan_3

Accounts Receivable and Finance Receivables - Accounts Receivable (Details) - Manufacturing group - USD ($) $ in Millions	Apr. 03, 2021	Jan. 02, 2021
Accounts Receivable
Accounts receivable, gross	$ 916	$ 823
Allowance for credit losses	(33)	(36)
Total accounts receivable, net	883	787
Commercial
Accounts Receivable
Accounts receivable, gross	732	668
U.S. Government
Accounts Receivable
Accounts receivable, gross	$ 184	$ 155

Accounts Receivable and Finan_4

Accounts Receivable and Finance Receivables - Finance Receivables (Details) - USD ($) $ in Millions	Apr. 03, 2021	Jan. 02, 2021
Finance Receivables
Finance receivables	$ 705	$ 779
Allowance for credit losses	(33)	(35)
Total finance receivables, net	$ 672	$ 744

Accounts Receivable and Finan_5

Accounts Receivable and Finance Receivables - Finance Receivables Portfolio Quality (Details) $ in Millions	3 Months Ended
	Apr. 03, 2021USD ($)customer	Jan. 02, 2021USD ($)
Finance receivables categorized based on the internally assigned credit quality
Number of customers finance receivable contracts modified | customer	12
Modified finance receivable outstanding balance	$ 29
Finance receivables categorized as troubled debt restructurings	$ 25
Customer default related to finance receivables previously modified as a troubled debt restructuring that had an insignificant outstanding balance | customer	4
Finance receivables	$ 705	$ 779
60+ days contractual delinquency as a percentage of finance receivables	3.69%	3.72%
Performing
Finance receivables categorized based on the internally assigned credit quality
Finance receivables	$ 591	$ 612
Nonperforming
Finance receivables categorized based on the internally assigned credit quality
Payment relief period over which loan is considered impaired	6 months
Current and less than 31 days past due
Finance receivables categorized based on the internally assigned credit quality
Finance receivables	$ 676	738
31-60 days past due
Finance receivables categorized based on the internally assigned credit quality
Finance receivables	3	12
61-90 days past due
Finance receivables categorized based on the internally assigned credit quality
Finance receivables	6	11
Over 90 days past due
Finance receivables categorized based on the internally assigned credit quality
Finance receivables	$ 20	18
Performing
Finance receivables categorized based on the internally assigned credit quality
Financing receivable originating since the beginning 2020	27.00%
Financing receivable originating from 2017 to 2019	33.00%
Watchlist | Nonperforming
Finance receivables categorized based on the internally assigned credit quality
Finance receivables	$ 2	74
Nonaccrual | Nonperforming
Finance receivables categorized based on the internally assigned credit quality
Finance receivables	$ 112	$ 93
Financing receivable originating from 2017 to 2019	68.00%
Nonperforming
Finance receivables categorized based on the internally assigned credit quality
Nonaccrual as a percentage of finance receivables	15.89%	11.94%
Minimum | Nonperforming
Finance receivables categorized based on the internally assigned credit quality
Number of months of contractual delinquency to classify accounts as nonaccrual unless such collection is not doubtful	3 months

Accounts Receivable and Finan_6

Accounts Receivable and Finance Receivables - Finance Receivables and Allowance for Losses Based on the Results of Impairment Evaluation (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Apr. 03, 2021	Jan. 02, 2021
Finance receivables
Finance receivables evaluated collectively	$ 498	$ 521
Finance receivables evaluated individually	113	163
Allowance for credit losses based on collective evaluation	26	28
Allowance for credit losses based on individual evaluation	7	7
Allowance for credit losses based on individual evaluation	42	46
Impaired finance receivables with no specific allowance for losses	71	117
Unpaid principal balance of impaired finance receivables	122	175
Allowance for credit losses on impaired finance receivables	7	7
Average recorded investment of impaired finance receivables	$ 138	$ 126

Inventories (Details)

Inventories (Details) - USD ($) $ in Millions	Apr. 03, 2021	Jan. 02, 2021
Inventories
Finished goods	$ 1,222	$ 1,228
Work in process	1,663	1,455
Raw materials and components	820	830
Total inventories	$ 3,705	$ 3,513

Warranty Liability (Details)

Warranty Liability (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Changes in warranty liability
Beginning of period	$ 119	$ 141
Provision	14	13
Settlements	(20)	(19)
Adjustments	3	(2)
End of period	$ 116	$ 133

Leases - Narrative (Details)

Leases - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Leases [Abstract]
Remaining lease terms	28 years
Operating lease - option to extend the lease, term	25 years
Operating lease - option to extend	true
Operating lease cost	$ 16	$ 15
Cash paid for operating lease liabilities	16	15
Noncash lease transactions	$ 45	$ 3

Leases - Balance Sheet and Othe

Leases - Balance Sheet and Other Information (Details) - USD ($) $ in Millions	Apr. 03, 2021	Jan. 02, 2021
Operating leases:
Other assets	$ 384	$ 349
Other current liabilities	54	47
Other liabilities	$ 336	$ 306
Weighted-average remaining lease term (in years)
Weighted-average remaining lease term (in years)	10 years 10 months 24 days	11 years 7 months 6 days
Weighted-average discount rate
Weighted-average discount rate	3.52%	4.17%

Leases - Maturity of Lease Liab

Leases - Maturity of Lease Liabilities (Details) $ in Millions	Apr. 03, 2021USD ($)
Operating Leases
2021	$ 50
2022	63
2023	54
2024	45
2025	41
Thereafter	$ 240

Derivative Instruments and Fa_3

Derivative Instruments and Fair Value Measurements - Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Details) - USD ($)	3 Months Ended
	Apr. 03, 2021	Jan. 02, 2021
Manufacturing group
Fair value of derivative instruments
Forward exchange contracts maximum maturity period	3 years
Manufacturing group | Foreign currency exchange contracts | Cash Flow Hedging
Fair value of derivative instruments
Notional amounts	$ 423,000,000	$ 318,000,000
Manufacturing group | Level 2 | Foreign currency exchange contracts | Cash Flow Hedging
Fair value of derivative instruments
Fair value of foreign currency exchange contracts, asset	9,000,000	5,000,000
Fair value of foreign currency exchange contracts, liability	1,000,000	2,000,000
Finance group | Interest Rate Swap | Cash Flow Hedging
Fair value of derivative instruments
Notional amounts	289,000,000	294,000,000
Fair value of foreign currency exchange contracts, liability	$ 3,000,000	$ 4,000,000

Derivative Instruments and Fa_4

Derivative Instruments and Fair Value Measurements - Assets and Liabilities not Recorded at Fair Value (Details) - USD ($) $ in Millions	Apr. 03, 2021	Jan. 02, 2021
Manufacturing group | Carrying Value
Financial instruments not reflected at fair value
Debt, excluding leases	$ (3,438)	$ (3,690)
Manufacturing group | Estimated Fair value
Financial instruments not reflected at fair value
Debt, excluding leases	(3,615)	(3,986)
Finance group | Carrying Value
Financial instruments not reflected at fair value
Finance receivables, excluding leases	482	549
Debt, carrying value	(653)	(662)
Finance group | Estimated Fair value
Financial instruments not reflected at fair value
Finance receivables, excluding leases	525	599
Debt, estimated fair value	$ (599)	$ (587)

Shareholders' Equity - Reconcil

Shareholders' Equity - Reconciliation of Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	$ 5,845	$ 5,518
Net income (loss)	171	50
Other comprehensive income (loss)	16	(12)
Share-based compensation activity	60	37
Dividends declared	(5)	(5)
Purchases of common stock	(91)	(54)
Balance at end of period	$ 5,996	$ 5,534
Dividends per share of common stock (in dollars per share)	$ 0.02	$ 0.02
Common Stock
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	$ 29	$ 29
Balance at end of period	29	29
Capital Surplus
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	1,785	1,674
Share-based compensation activity	60	37
Balance at end of period	1,845	1,711
Treasury Stock
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	(203)	(20)
Purchases of common stock	(91)	(54)
Balance at end of period	(294)	(74)
Retained Earnings
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	5,973	5,682
Net income (loss)	171	50
Dividends declared	(5)	(5)
Balance at end of period	6,139	5,727
Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	(1,739)	(1,847)
Other comprehensive income (loss)	16	(12)
Balance at end of period	$ (1,723)	$ (1,859)

Shareholders' Equity - Earnings

Shareholders' Equity - Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Weighted-average shares outstanding for basic and diluted EPS
Basic weighted-average shares outstanding (in shares)	227,009	228,311
Dilutive effect stock options (in shares)	1,275	616
Diluted weighted-average shares outstanding (in shares)	228,284	228,927
Stock options
Weighted-average shares outstanding for basic and diluted EPS
Anti-dilutive effect of weighted average shares (in shares)	4,300	7,500

Shareholders' Equity - Accumula

Shareholders' Equity - Accumulated Other Comprehensive Loss and Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning of period	$ (1,739)
End of period	(1,723)
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning of period	(1,739)	$ (1,847)
Other comprehensive loss before reclassifications	(28)	(48)
Reclassified from Accumulated other comprehensive loss	44	36
End of period	(1,723)	(1,859)
Pensions and Postretirement Benefits Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning of period	(1,780)	(1,811)
Other comprehensive loss before reclassifications	0	0
Reclassified from Accumulated other comprehensive loss	30	37
End of period	(1,750)	(1,774)
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning of period	42	(36)
Other comprehensive loss before reclassifications	(32)	(40)
Reclassified from Accumulated other comprehensive loss	14	0
End of period	24	(76)
Deferred Gains (Losses) on Hedge Contracts
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning of period	(1)	0
Other comprehensive loss before reclassifications	4	(8)
Reclassified from Accumulated other comprehensive loss	0	(1)
End of period	$ 3	$ (9)

Shareholders' Equity - Before a

Shareholders' Equity - Before and After Tax Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Pension and postretirement benefits adjustments, pre-tax:
Amortization of net actuarial loss, pre-tax	$ 38	$ 46
Amortization of prior service cost, pre-tax	2	2
Pension and postretirement benefits adjustments, net, pre-tax	40	48
Pension and postretirement benefits adjustments, tax:
Amortization of net actuarial loss, tax (expense) benefit	(9)	(10)
Amortization of prior service cost, tax (expense) benefit	(1)	(1)
Pension and postretirement benefits adjustments, net, tax (expense) benefit	(10)	(11)
Pension and postretirement benefits adjustments, after-tax:
Amortization of net actuarial loss, after tax	29	36
Amortization of prior period service cost, after tax	1	1
Pension and postretirement benefits adjustments, net, after-tax	30	37
Foreign currency translation adjustments, pre-tax:
Foreign currency translation adjustments, pre-tax	(32)	(37)
Business disposition, Pre-Tax Amount	14	0
Foreign currency translation adjustments, net, pre-tax	(18)	(37)
Foreign currency translation adjustments, tax:
Foreign currency translation adjustments, tax (expense) benefit	0	(3)
Business disposition, Tax (Expense) Benefit	0	0
Foreign currency translation adjustments, net, tax (expense) benefit	0	(3)
Foreign currency translation adjustments, after-tax:
Foreign currency translation adjustments, after tax	(32)	(40)
Business disposition, After Tax Amount	14	0
Foreign currency translation adjustments, net of reclassifications	(18)	(40)
Deferred gains (losses) on hedge contracts, pre-tax:
Current deferrals, pre-tax	5	(9)
Reclassification adjustments, pre-tax	0	(1)
Deferred gains (losses) on hedge contracts, net, pre-tax	5	(10)
Other comprehensive income (loss), pre-tax	27	1
Deferred gains (losses) on hedge contracts, tax:
Current deferrals, tax (expense) benefit	(1)	1
Reclassification adjustments, tax (expense) benefit	0	0
Deferred gains (losses) on hedge contracts, net, tax (expense) benefit	(1)	1
Other comprehensive income (loss), tax (expense) benefit	(11)	(13)
Deferred gains (losses) on hedge contracts, after-tax:
Current deferrals, after-tax	4	(8)
Reclassification adjustments, after-tax	0	1
Deferred gains (losses) on hedge contracts, net, after-tax	4	(9)
Other comprehensive income (loss)	$ 16	$ (12)

Segment Information - Operating

Segment Information - Operating and Reportable Segments (Details)	3 Months Ended
	Apr. 03, 2021businessSegment
Operating and reportable business segments
Number of business operating segments	5
Number of reportable business segments	5

Segment Information - Revenue b

Segment Information - Revenue by Segment and Reconciliation of Segment Profit to Income Before Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Revenues
Total revenues	$ 2,879	$ 2,777
Reconciliation of segment profit to income from continuing operations before income taxes
Special charges	(6)	(39)
Gain on business disposition	15	0
Income before income taxes	190	69
Operating Segment
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	256	156
Reconciling Items
Reconciliation of segment profit to income from continuing operations before income taxes
Corporate expenses and other, net	(40)	(14)
Special charges	(6)	(39)
Gain on business disposition	15	0
Textron Aviation
Revenues
Total revenues	865	872
Bell
Revenues
Total revenues	846	823
Textron Systems
Revenues
Total revenues	328	328
Industrial
Revenues
Total revenues	825	740
Finance
Revenues
Total revenues	15	14
Finance | Operating Segment
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	6	3
Manufacturing group
Reconciliation of segment profit to income from continuing operations before income taxes
Gain on business disposition	15	0
Manufacturing group | Reconciling Items
Reconciliation of segment profit to income from continuing operations before income taxes
Interest expense, net for Manufacturing group	(35)	(34)
Manufacturing group | Textron Aviation | Operating Segment
Revenues
Total revenues	865	872
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	47	3
Manufacturing group | Bell | Operating Segment
Revenues
Total revenues	846	823
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	105	115
Manufacturing group | Textron Systems | Operating Segment
Revenues
Total revenues	328	328
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	51	26
Manufacturing group | Industrial | Operating Segment
Revenues
Total revenues	825	740
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	47	9
Finance group
Reconciliation of segment profit to income from continuing operations before income taxes
Gain on business disposition	0	0
Finance group | Finance | Operating Segment
Revenues
Total revenues	$ 15	$ 14

Revenues - Disaggregation of Re

Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Revenues
Revenues	$ 2,879	$ 2,777
United States
Revenues
Revenues	1,900	1,908
Europe
Revenues
Revenues	366	349
Asia and Australia
Revenues
Revenues	267	247
Other international
Revenues
Revenues	346	273
Commercial
Revenues
Revenues	2,005	1,870
U.S. Government
Revenues
Revenues	874	907
Textron Aviation
Revenues
Revenues	865	872
Textron Aviation | United States
Revenues
Revenues	609	597
Textron Aviation | Europe
Revenues
Revenues	84	84
Textron Aviation | Asia and Australia
Revenues
Revenues	76	123
Textron Aviation | Other international
Revenues
Revenues	96	68
Textron Aviation | Commercial
Revenues
Revenues	846	848
Textron Aviation | U.S. Government
Revenues
Revenues	19	24
Textron Aviation | Aircraft
Revenues
Revenues	535	515
Textron Aviation | Aftermarket parts and services
Revenues
Revenues	330	357
Bell
Revenues
Revenues	846	823
Bell | United States
Revenues
Revenues	616	690
Bell | Europe
Revenues
Revenues	36	24
Bell | Asia and Australia
Revenues
Revenues	79	50
Bell | Other international
Revenues
Revenues	115	59
Bell | Commercial
Revenues
Revenues	266	198
Bell | U.S. Government
Revenues
Revenues	580	625
Bell | Military aircraft and support programs
Revenues
Revenues	577	620
Bell | Commercial helicopters, parts and services
Revenues
Revenues	269	203
Textron Systems
Revenues
Revenues	328	328
Textron Systems | United States
Revenues
Revenues	289	286
Textron Systems | Europe
Revenues
Revenues	10	12
Textron Systems | Asia and Australia
Revenues
Revenues	16	20
Textron Systems | Other international
Revenues
Revenues	13	10
Textron Systems | Commercial
Revenues
Revenues	58	71
Textron Systems | U.S. Government
Revenues
Revenues	270	257
Textron Systems | Air systems
Revenues
Revenues	123	136
Textron Systems | Land and sea systems
Revenues
Revenues	57	60
Textron Systems | Other
Revenues
Revenues	148	132
Industrial
Revenues
Revenues	825	740
Industrial | United States
Revenues
Revenues	378	329
Industrial | Europe
Revenues
Revenues	236	228
Industrial | Asia and Australia
Revenues
Revenues	94	53
Industrial | Other international
Revenues
Revenues	117	130
Industrial | Commercial
Revenues
Revenues	820	739
Industrial | U.S. Government
Revenues
Revenues	5	1
Industrial | Fuel systems and functional components
Revenues
Revenues	497	465
Industrial | Specialized vehicles
Revenues
Revenues	328	275
Finance
Revenues
Revenues	15	14
Finance | United States
Revenues
Revenues	8	6
Finance | Europe
Revenues
Revenues	0	1
Finance | Asia and Australia
Revenues
Revenues	2	1
Finance | Other international
Revenues
Revenues	5	6
Finance | Commercial
Revenues
Revenues	15	14
Finance | U.S. Government
Revenues
Revenues	$ 0	$ 0

Revenues - Remaining Performanc

Revenues - Remaining Performance Obligations (Details) $ in Billions	Apr. 03, 2021USD ($)
Remaining Performance Obligation, Expected Timing of Satisfaction
Remaining performance obligation	$ 9.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-04
Remaining Performance Obligation, Expected Timing of Satisfaction
Remaining performance obligation, percent	73.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	21 months
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	23.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	24 months

Revenues - Contract Assets and

Revenues - Contract Assets and Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020	Jan. 02, 2021
Contract Assets and Liabilities
Contract assets	$ 578		$ 561
Contract liabilities	887		$ 842
Revenue recognized included in contract liabilities	$ 278	$ 231

Share-Based Compensation - Comp

Share-Based Compensation - Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense (income)	$ 55	$ (13)
Income tax (benefit) expense	(13)	3
Total net compensation expense (income) included in net income	42	(10)
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense (income)	$ 12	$ 10

Share-Based Compensation - Stoc

Share-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	Mar. 01, 2021	Mar. 01, 2020	Apr. 03, 2021	Apr. 04, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract]
Aggregate intrinsic value of outstanding options			$ 117
Weighted-average remaining contractual life of outstanding stock options			6 years 4 months 24 days
Aggregate intrinsic value of exercisable options			$ 83
Weighted-average remaining contractual life of exercisable options			5 years 1 month 6 days
Aggregate intrinsic value of options exercised			$ 15	$ 3
Stock options
Share-Based Compensation
Maximum term of options			10 years
Performance share units vesting period			3 years
Weighted-average assumptions used in Black-Scholes option-pricing model
Fair value of options at grant date (in dollars per share)	$ 15.05	$ 10.66
Dividend yield	0.20%	0.20%
Expected volatility	33.60%	29.30%
Risk-free interest rate	0.70%	1.10%
Expected term (in years)	4 years 8 months 12 days	4 years 8 months 12 days
Number of Options
Outstanding at beginning of period (in shares)			9,810
Granted (in shares)			1,480
Exercised (in shares)			(812)
Forfeited or expired (in shares)			(59)
Outstanding at end of period (in shares)			10,419
Exercisable at end of period (in shares)			7,062
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share)			$ 44.03
Granted (in dollars per share)			51.56
Exercised (in dollars per share)			(33.08)
Forfeited or expired (in dollars per share)			(45.91)
Outstanding at end of period (in dollars per share)			45.94
Exercisable at end of period (in dollars per share)			$ 45.54

Share-Based Compensation - Rest

Share-Based Compensation - Restricted Stock Units (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Fair value
Cash paid	$ 6	$ 7
Units Payable in Stock
Number of Units
Outstanding at beginning of period, nonvested (in shares)	583
Granted (in shares)	124
Vested (in shares)	(127)
Forfeited (in shares)	0
Outstanding at end of period, nonvested (in shares)	580
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Outstanding at beginning of period, nonvested (in dollars per share)	$ 47.60
Granted (in dollars per share)	51.56
Vested (in dollars per share)	(46.14)
Forfeited (in dollars per share)	0
Outstanding at end of period, nonvested (in dollars per share)	$ 48.77
Units Payable in Cash
Number of Units
Outstanding at beginning of period, nonvested (in shares)	1,145
Granted (in shares)	333
Vested (in shares)	(251)
Forfeited (in shares)	(23)
Outstanding at end of period, nonvested (in shares)	1,204
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Outstanding at beginning of period, nonvested (in dollars per share)	$ 48.53
Granted (in dollars per share)	51.56
Vested (in dollars per share)	(46.42)
Forfeited (in dollars per share)	(48.33)
Outstanding at end of period, nonvested (in dollars per share)	$ 49.82
Restricted Stock Units
Fair value
Fair value of awards vested	$ 19	17
Cash paid	$ 13	$ 11

Share-Based Compensation - Perf

Share-Based Compensation - Performance Share Units (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Fair value
Cash paid	$ 6	$ 7
Performance Share Units
Number of Units
Outstanding at beginning of period, nonvested (in shares)	514
Granted (in shares)	256
Outstanding at end of period, nonvested (in shares)	770
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Outstanding at beginning of period, nonvested (in dollars per share)	$ 47.02
Granted (in dollars per share)	51.56
Outstanding at end of period, nonvested (in dollars per share)	$ 48.52

Retirement Plans (Details)

Retirement Plans (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Pension Benefits
Net periodic benefit cost (credit)
Service cost	$ 29	$ 26
Interest cost	63	73
Expected return on plan assets	(144)	(144)
Amortization of net actuarial loss	39	46
Amortization of prior service cost	3	3
Net periodic benefit cost (credit)	(10)	4
Postretirement Benefits Other Than Pensions
Net periodic benefit cost (credit)
Service cost	1	1
Interest cost	1	2
Amortization of net actuarial loss	(1)	0
Amortization of prior service cost	(1)	(1)
Net periodic benefit cost (credit)	$ 0	$ 2

Special Charges - First Quarter

Special Charges - First Quarter 2021 (Details) $ in Millions	3 Months Ended		15 Months Ended
	Apr. 03, 2021USD ($)borrowingGroup	Apr. 04, 2020USD ($)	Apr. 03, 2021USD ($)
2020 Restructuring Plan
Special charges	$ 6	$ 39
Asset impairments	3	$ 39
2020 COVID-19 Restructuring Plan
2020 Restructuring Plan
Special charges	6		$ 114
Asset impairments	$ 24
Number of positions eliminated | borrowingGroup	2,700
2020 COVID-19 Restructuring Plan | Corporate
2020 Restructuring Plan
Special charges	$ 4
2020 COVID-19 Restructuring Plan | Textron Systems | Operating Segment
2020 Restructuring Plan
Special charges	37
2020 COVID-19 Restructuring Plan | Industrial | Operating Segment
2020 Restructuring Plan
Special charges	40
2020 COVID-19 Restructuring Plan | Textron Aviation | Operating Segment
2020 Restructuring Plan
Special charges	33
2020 COVID-19 Restructuring Plan | Severance Costs
2020 Restructuring Plan
Restructuring costs	73
2020 COVID-19 Restructuring Plan | Contract Terminations and Others
2020 Restructuring Plan
Restructuring costs	17
Minimum | 2020 COVID-19 Restructuring Plan
2020 Restructuring Plan
Total expected restructuring plan cost	14		14
Maximum | 2020 COVID-19 Restructuring Plan
2020 Restructuring Plan
Total expected restructuring plan cost	$ 24		$ 24

Special Charges - First Quart_2

Special Charges - First Quarter 2020 (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Special Charges
Asset impairments	$ 3	$ 39
Beechcraft and King Air trade name intangible assets
Special Charges
Impairment charge		32
Textron Aviation and Industrial segments
Special Charges
Asset impairments		$ 39

Special Charges - Restructuring

Special Charges - Restructuring Reserve (Details) $ in Millions	3 Months Ended
	Apr. 03, 2021USD ($)
Restructuring Reserve [Roll Forward]
Beginning balance	$ 52
Provision for 2020 COVID-19 restructuring plan	4
Cash paid	(17)
Foreign currency translation	(1)
Ending balance	38
Severance Costs
Restructuring Reserve [Roll Forward]
Beginning balance	43
Provision for 2020 COVID-19 restructuring plan	0
Cash paid	(13)
Foreign currency translation	(1)
Ending balance	29
Contract Terminations and Others
Restructuring Reserve [Roll Forward]
Beginning balance	9
Provision for 2020 COVID-19 restructuring plan	4
Cash paid	(4)
Foreign currency translation	0
Ending balance	$ 9

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Income Tax Disclosure [Abstract]
Effective income tax rate	10.00%	27.50%
U.S. federal statutory income tax rate	21.00%	21.00%
Tax benefit recognized for additional research and development credits	$ 12
Tax provision related to dividend cash back from select non-U.S jurisdictions		$ 10