Textron (TXT) 10-Q 28 Oct 21 2021 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Oct. 02, 2021	Oct. 15, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Oct. 2, 2021
Document Transition Report	false
Entity File Number	1-5480
Entity Registrant Name	Textron Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	05-0315468
Entity Address, Address Line One	40 Westminster Street
Entity Address, City or Town	Providence
Entity Address, State or Province	RI
Entity Address, Postal Zip Code	02903
City Area Code	401
Local Phone Number	421-2800
Title of 12(b) Security	Common stock, $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		220,425,217
Entity Central Index Key	0000217346
Current Fiscal Year End Date	--01-01
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020
Revenues
Total revenues	$ 2,990	$ 2,735	$ 9,060	$ 7,984
Costs, expenses and other
Cost of sales	2,486	2,332	7,546	6,970
Selling and administrative expense	283	258	895	760
Interest expense	33	43	109	125
Special charges	10	7	20	124
Non-service components of pension and post-retirement income, net	(40)	(21)	(119)	(62)
Gain on business disposition	0	0	(17)	0
Total costs, expenses and other	2,772	2,619	8,434	7,917
Income from continuing operations before income taxes	218	116	626	67
Income tax expense (benefit)	33	1	86	(6)
Income from continuing operations	185	115	540	73
Loss from discontinued operations	0	0	(1)	0
Net income	$ 185	$ 115	$ 539	$ 73
Basic Earnings per share
Continuing operations (in dollars per share)	$ 0.83	$ 0.50	$ 2.39	$ 0.32
Diluted Earnings per share
Continuing operations (in dollars per share)	$ 0.82	$ 0.50	$ 2.37	$ 0.32
Manufacturing revenues
Revenues
Total revenues	$ 2,979	$ 2,722	$ 9,022	$ 7,942
Finance revenues
Revenues
Total revenues	$ 11	$ 13	$ 38	$ 42

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 185	$ 115	$ 539	$ 73
Other comprehensive income, net of tax
Pension and postretirement benefits adjustments, net of reclassifications	30	37	90	110
Foreign currency translation adjustments, net of reclassifications	(19)	35	(22)	25
Deferred gains (losses) on hedge contracts, net of reclassifications	(5)	2	1	(5)
Other comprehensive income	6	74	69	130
Comprehensive income	$ 191	$ 189	$ 608	$ 203

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) shares in Thousands, $ in Millions	Oct. 02, 2021	Jan. 02, 2021
Assets
Inventories	$ 3,670	$ 3,513
Finance receivables, net	596	744
Total assets	15,269	15,443
Liabilities
Total liabilities	9,232	9,598
Shareholders’ equity
Common stock	29	29
Capital surplus	1,969	1,785
Treasury stock	(789)	(203)
Retained earnings	6,498	5,973
Accumulated other comprehensive loss	(1,670)	(1,739)
Total shareholders’ equity	6,037	5,845
Total liabilities and shareholders’ equity	$ 15,269	$ 15,443
Common shares outstanding (in shares)	221,031	226,444
Manufacturing group
Assets
Cash and equivalents	$ 1,969	$ 2,146
Accounts receivable, net	773	787
Inventories	3,670	3,513
Other current assets	890	950
Total current assets	7,302	7,396
Property, plant and equipment, less accumulated depreciation and amortization of $4,855 and $4,696, respectively	2,469	2,516
Goodwill	2,152	2,157
Other assets	2,468	2,436
Total assets	14,391	14,505
Liabilities
Current portion of long-term debt	7	509
Accounts payable	775	776
Other current liabilities	2,270	1,985
Total current liabilities	3,052	3,270
Other liabilities	2,292	2,357
Long-term debt	3,180	3,198
Total liabilities	8,524	8,825
Finance group
Assets
Cash and equivalents	213	108
Finance receivables, net	596	744
Other assets	69	86
Total assets	878	938
Liabilities
Other liabilities	123	111
Debt	585	662
Total liabilities	$ 708	$ 773

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions	Oct. 02, 2021	Jan. 02, 2021
Statement of Financial Position [Abstract]
Accumulated depreciation and amortization	$ 4,855	$ 4,696

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020
Cash flows from operating activities
Income from continuing operations	$ 540	$ 73
Non-cash items:
Depreciation and amortization	285	283
Gain on business disposition	(17)	0
Deferred income taxes	7	(31)
Asset impairments and TRU inventory charge	11	111
Other, net	74	81
Changes in assets and liabilities:
Accounts receivable, net	8	59
Inventories	(164)	(258)
Other assets	(11)	114
Accounts payable	1	(267)
Other liabilities	323	60
Income taxes, net	26	(4)
Pension, net	(62)	(11)
Captive finance receivables, net	152	(25)
Other operating activities, net	1	15
Net cash provided by operating activities of continuing operations	1,174	200
Net cash used in operating activities of discontinued operations	(1)	(1)
Net cash provided by operating activities	1,173	199
Cash flows from investing activities
Capital expenditures	(204)	(151)
Net proceeds from business disposition	38	0
Proceeds from an insurance recovery and sale of property, plant and equipment	3	25
Net proceeds from corporate-owned life insurance policies	0	21
Net cash used in acquisitions	0	(11)
Finance receivables repaid	19	21
Other investing activities, net	17	3
Net cash provided by (used in) investing activities	(127)	(92)
Cash flows from financing activities
Decrease in short-term debt	0	(2)
Net proceeds from long-term debt	0	1,137
Proceeds from borrowings against corporate-owned life insurance policies	0	377
Payment on borrowings against corporate-owned life insurance policies	0	(15)
Principal payments on long-term debt and nonrecourse debt	(615)	(235)
Purchases of Textron common stock	(586)	(54)
Dividends paid	(14)	(14)
Proceeds from options exercised	105	16
Other financing activities, net	(2)	(2)
Net cash provided by (used in) financing activities	(1,112)	1,208
Effect of exchange rate changes on cash and equivalents	(6)	(2)
Net increase (decrease) in cash and equivalents	(72)	1,313
Cash and equivalents at beginning of period	2,254	1,357
Cash and equivalents at end of period	2,182	2,670
Manufacturing group
Cash flows from operating activities
Income from continuing operations	537	67
Non-cash items:
Depreciation and amortization	277	279
Gain on business disposition	(17)	0
Deferred income taxes	9	(30)
Asset impairments and TRU inventory charge	11	111
Other, net	82	74
Changes in assets and liabilities:
Accounts receivable, net	8	59
Inventories	(164)	(258)
Other assets	(10)	114
Accounts payable	1	(267)
Other liabilities	323	66
Income taxes, net	16	1
Pension, net	(62)	(11)
Other operating activities, net	1	15
Net cash provided by operating activities of continuing operations	1,012	220
Net cash used in operating activities of discontinued operations	(1)	(1)
Net cash provided by operating activities	1,011	219
Cash flows from investing activities
Capital expenditures	(204)	(151)
Net proceeds from business disposition	38	0
Proceeds from an insurance recovery and sale of property, plant and equipment	3	25
Net proceeds from corporate-owned life insurance policies	0	21
Net cash used in acquisitions	0	(11)
Finance receivables repaid	0	0
Finance receivables originated	0	0
Other investing activities, net	0	0
Net cash provided by (used in) investing activities	(163)	(116)
Cash flows from financing activities
Decrease in short-term debt	0	(2)
Net proceeds from long-term debt	0	1,137
Proceeds from borrowings against corporate-owned life insurance policies	0	377
Payment on borrowings against corporate-owned life insurance policies	0	(15)
Principal payments on long-term debt and nonrecourse debt	(522)	(195)
Purchases of Textron common stock	(586)	(54)
Dividends paid	(14)	(14)
Proceeds from options exercised	105	16
Other financing activities, net	(2)	(14)
Net cash provided by (used in) financing activities	(1,019)	1,236
Effect of exchange rate changes on cash and equivalents	(6)	(2)
Net increase (decrease) in cash and equivalents	(177)	1,337
Cash and equivalents at beginning of period	2,146	1,181
Cash and equivalents at end of period	1,969	2,518
Finance group
Cash flows from operating activities
Income from continuing operations	3	6
Non-cash items:
Depreciation and amortization	8	4
Gain on business disposition	0	0
Deferred income taxes	(2)	(1)
Asset impairments and TRU inventory charge	0	0
Other, net	(8)	7
Changes in assets and liabilities:
Accounts receivable, net	0	0
Inventories	0	0
Other assets	(1)	0
Accounts payable	0	0
Other liabilities	0	(6)
Income taxes, net	10	(5)
Pension, net	0	0
Other operating activities, net	0	0
Net cash provided by operating activities of continuing operations	10	5
Net cash used in operating activities of discontinued operations	0	0
Net cash provided by operating activities	10	5
Cash flows from investing activities
Capital expenditures	0	0
Net proceeds from business disposition	0	0
Proceeds from an insurance recovery and sale of property, plant and equipment	0	0
Net proceeds from corporate-owned life insurance policies	0	0
Net cash used in acquisitions	0	0
Finance receivables repaid	205	90
Finance receivables originated	(34)	(94)
Other investing activities, net	17	3
Net cash provided by (used in) investing activities	188	(1)
Cash flows from financing activities
Decrease 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
Payment on borrowings against corporate-owned life insurance policies	0	0
Principal payments on long-term debt and nonrecourse debt	(93)	(40)
Purchases of Textron common stock	0	0
Dividends paid	0	0
Proceeds from options exercised	0	0
Other financing activities, net	0	12
Net cash provided by (used in) financing activities	(93)	(28)
Effect of exchange rate changes on cash and equivalents	0	0
Net increase (decrease) in cash and equivalents	105	(24)
Cash and equivalents at beginning of period	108	176
Cash and equivalents at end of period	$ 213	$ 152

Basis of Presentation

Basis of Presentation	9 Months Ended
	Oct. 02, 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 third quarter of 2021 and 2020, our cumulative catch-up adjustments increased segment profit by $25 million and $22 million, respectively, and increased net income by $19 million and $17 million, respectively ($0.08 and $0.07 per diluted share, respectively). Gross favorable profit adjustments totaled $43 million and $31 million in the third quarter of 2021 and 2020, respectively, and the gross unfavorable profit adjustments totaled $18 million and $9 million, respectively. We recognized revenues of $27 million and $22 million in the third quarter of 2021 and 2020, respectively, from performance obligations satisfied in prior periods that related to changes in profit booking rates.

Business Disposition

Business Disposition	9 Months Ended
	Oct. 02, 2021
Discontinued Operations and Disposal Groups [Abstract]
Business Disposition	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 $38 million and recorded an after-tax gain of $17 million.

Accounts Receivable and Finance

Accounts Receivable and Finance Receivables	9 Months Ended
	Oct. 02, 2021
Receivables [Abstract]
Accounts Receivable and Finance Receivables	Accounts Receivable and Finance Receivables Accounts Receivable Accounts receivable is composed of the following: (In millions) October 2, January 2, Commercial $ 671 $ 668 U.S. Government contracts 131 155 802 823 Allowance for credit losses (29) (36) Total accounts receivable, net $ 773 $ 787 Finance Receivables Finance receivables are presented in the following table: (In millions) October 2, January 2, Finance receivables $ 621 $ 779 Allowance for credit losses (25) (35) Total finance receivables, net $ 596 $ 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. The majority of these modified loans have returned to paying principal and interest. 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 nine months of 2021, we modified finance receivable contracts for 21 customers with an outstanding balance at October 2, 2021 totaling $76 million, which were all categorized as troubled debt restructurings. Of these modifications, $71 million were previously modified in 2020. Due to the nature of these restructurings, the financial effects were not significant. We had no customer defaults during the last twelve months related to finance receivables previously modified as a troubled debt restructuring. 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) October 2, January 2, Performing $ 511 $ 612 Watchlist — 74 Nonaccrual 110 93 Nonaccrual as a percentage of finance receivables 17.71% 11.94% Current and less than 31 days past due $ 604 $ 738 31-60 days past due 5 12 61-90 days past due 3 11 Over 90 days past due 9 18 60+ days contractual delinquency as a percentage of finance receivables 1.93% 3.72% At October 2, 2021, 30% of our performing finance receivables were originated since the beginning of 2020 and 32% were originated from 2017 to 2019. For finance receivables categorized as nonaccrual, 63% 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) October 2, January 2, Finance receivables evaluated collectively $ 416 $ 521 Finance receivables evaluated individually 110 163 Allowance for credit losses based on collective evaluation 21 28 Allowance for credit losses based on individual evaluation 4 7 Impaired finance receivables with specific allowance for credit losses $ 34 $ 46 Impaired finance receivables with no specific allowance for credit losses 76 117 Unpaid principal balance of impaired finance receivables 124 175 Allowance for credit losses on impaired finance receivables 4 7 Average recorded investment of impaired finance receivables 123 126

Inventories

Inventories	9 Months Ended
	Oct. 02, 2021
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories are composed of the following: (In millions) October 2, January 2, Finished goods $ 1,085 $ 1,228 Work in process 1,741 1,455 Raw materials and components 844 830 Total inventories $ 3,670 $ 3,513

Warranty Liability

Warranty Liability	9 Months Ended
	Oct. 02, 2021
Payables and Accruals [Abstract]
Warranty Liability	Warranty Liability Changes in our warranty liability are as follows: Nine Months Ended (In millions) October 2, October 3, Beginning of period $ 119 $ 141 Provision 49 35 Settlements (52) (46) Adjustments* 5 (13) End of period $ 121 $ 117 * Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.

Leases

Leases	9 Months Ended
	Oct. 02, 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. Operating lease cost totaled $17 million and $15 million in the third quarter of 2021 and 2020, respectively, and $49 million and $45 million in the first nine months of 2021 and 2020, respectively. Cash paid for operating leases totaled $49 million and $45 million in the first nine months of 2021 and 2020, respectively, and is classified in cash flows from operating activities. Noncash transactions totaled $81 million and $33 million in the first nine months 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) October 2, January 2, Other assets $ 388 $ 349 Other current liabilities 58 47 Other liabilities 336 306 Weighted-average remaining lease term (in years) 10.5 11.6 Weighted-average discount rate 3.34% 4.17% At October 2, 2021, maturities of our operating lease liabilities on an undiscounted basis totaled $20 million for the remainder of 2021, $69 million for 2022, $59 million for 2023, $51 million for 2024, $45 million for 2025 and $247 million thereafter.

Derivative Instruments and Fair

Derivative Instruments and Fair Value Measurements	9 Months Ended
	Oct. 02, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Fair Value Measurements	Derivative Instruments and Fair Value Measurements We measure fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We prioritize the assumptions that market participants would use in pricing the asset or liability into a three-tier fair value hierarchy. This fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs in which little or no market data exist, requiring companies to develop their own assumptions. Observable inputs that do not meet the criteria of Level 1, which include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets and liabilities in markets that are not active, are categorized as Level 2. Level 3 inputs are those that reflect our estimates about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are utilized only to the extent that observable inputs are not available or cost effective to obtain. Assets and Liabilities Recorded at Fair Value on a Recurring Basis We manufacture and sell our products in a number of countries throughout the world, and, therefore, we are exposed to movements in foreign currency exchange rates. We primarily utilize foreign currency exchange contracts with maturities of no more than three years to manage this volatility. These contracts qualify as cash flow hedges and are intended to offset the effect of exchange rate fluctuations on forecasted sales, inventory purchases and overhead expenses. Net gains and losses recognized in earnings and Accumulated other comprehensive loss on cash flow hedges, including gains and losses related to hedge ineffectiveness, were not significant in the periods presented. Our foreign currency exchange contracts are measured at fair value using the market method valuation technique. The inputs to this technique utilize current foreign currency exchange forward market rates published by third-party leading financial news and data providers. These are observable data that represent the rates that the financial institution uses for contracts entered into at that date; however, they are not based on actual transactions, so they are classified as Level 2. At October 2, 2021 and January 2, 2021, we had foreign currency exchange contracts with notional amounts upon which the contracts were based of $341 million and $318 million, respectively. At October 2, 2021, the fair value amounts of our foreign currency exchange contracts were a $5 million asset and a $2 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 certain exposures to fluctuations in interest rates. By using these contracts, we are able to convert floating-rate cash flows to fixed-rate cash flows. These agreements are designated as cash flow hedges. At October 2, 2021, we had a swap agreement for a notional amount of $289 million with a maturity of August 2023 and a fair value of a $3 million liability. At January 2, 2021, we had a swap agreement for a notional amount of $294 million with a maturity of February 2022 and a fair value of a $4 million liability. 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: October 2, 2021 January 2, 2021 Carrying Estimated Carrying Estimated (In millions) Value Fair Value Value Fair Value Manufacturing group Debt, excluding leases $ (3,183) $ (3,413) $ (3,690) $ (3,986) Finance group Finance receivables, excluding leases 404 438 549 599 Debt (585) (552) (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	9 Months Ended
	Oct. 02, 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 October 2, 2021 Beginning of period $ 29 $ 1,920 $ (490) $ 6,318 $ (1,676) $ 6,101 Net income — — — 185 — 185 Other comprehensive income — — — — 6 6 Share-based compensation activity — 49 — — — 49 Dividends declared — — — (5) — (5) Purchases of common stock — — (299) — — (299) End of period $ 29 $ 1,969 $ (789) $ 6,498 $ (1,670) $ 6,037 Three months ended October 3, 2020 Beginning of period $ 29 $ 1,732 $ (74) $ 5,631 $ (1,791) $ 5,527 Net income — — — 115 — 115 Other comprehensive income — — — — 74 74 Share-based compensation activity — 30 — — — 30 Dividends declared — — — (5) — (5) End of period $ 29 $ 1,762 $ (74) $ 5,741 $ (1,717) $ 5,741 Nine months ended October 2, 2021 Beginning of period $ 29 $ 1,785 $ (203) $ 5,973 $ (1,739) $ 5,845 Net income — — — 539 — 539 Other comprehensive income — — — — 69 69 Share-based compensation activity — 184 — — — 184 Dividends declared — — — (14) — (14) Purchases of common stock — — (586) — — (586) End of period $ 29 $ 1,969 $ (789) $ 6,498 $ (1,670) $ 6,037 Nine months ended October 3, 2020 Beginning of period $ 29 $ 1,674 $ (20) $ 5,682 $ (1,847) $ 5,518 Net income — — — 73 — 73 Other comprehensive income — — — — 130 130 Share-based compensation activity — 88 — — — 88 Dividends declared — — — (14) — (14) Purchases of common stock — — (54) — — (54) End of period $ 29 $ 1,762 $ (74) $ 5,741 $ (1,717) $ 5,741 Dividends per share of common stock were $0.02 for both the third quarter of 2021 and 2020 and $0.06 for both the first nine months 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 Nine Months Ended (In thousands) October 2, October 3, October 2, October 3, Basic weighted-average shares outstanding 223,663 228,918 225,545 228,492 Dilutive effect of stock options 2,827 361 2,250 345 Diluted weighted-average shares outstanding 226,490 229,279 227,795 228,837 For the first nine months of 2021, stock options to purchase 1.4 million shares of common stock were excluded from the calculation of diluted weighted-average shares outstanding as their effect would have been anti-dilutive. Stock options to purchase 7.5 million and 7.9 million shares of common stock were excluded from the calculation of diluted weighted-average shares outstanding for the third quarter and first nine months of 2020, respectively, as their effect would have been anti-dilutive. Accumulated Other Comprehensive Loss and Other Comprehensive Income The components of Accumulated other comprehensive loss are presented below: (In millions) Pension and Foreign Deferred Accumulated Balance at January 2, 2021 $ (1,780) $ 42 $ (1) $ (1,739) Other comprehensive loss before reclassifications — (36) 2 (34) Reclassified from Accumulated other comprehensive loss 90 14 (1) 103 Balance at October 2, 2021 $ (1,690) $ 20 $ — $ (1,670) Balance at January 4, 2020 $ (1,811) $ (36) $ — $ (1,847) Other comprehensive income before reclassifications — 25 (2) 23 Reclassified from Accumulated other comprehensive loss 110 — (3) 107 Balance at October 3, 2020 $ (1,701) $ (11) $ (5) $ (1,717) The before and after-tax components of Other comprehensive income are presented below: October 2, 2021 October 3, 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 $ (11) $ 35 Amortization of prior service cost* 2 (1) 1 2 — 2 Pension and postretirement benefits adjustments, net 40 (10) 30 48 (11) 37 Foreign currency translation adjustments (19) — (19) 35 — 35 Deferred gains (losses) on hedge contracts: Current deferrals (6) 2 (4) 3 — 3 Reclassification adjustments (1) — (1) (2) 1 (1) Deferred gains (losses) on hedge contracts, net (7) 2 (5) 1 1 2 Total $ 14 $ (8) $ 6 $ 84 $ (10) $ 74 Nine Months Ended Pension and postretirement benefits adjustments: Amortization of net actuarial loss* $ 114 $ (27) $ 87 $ 138 $ (32) $ 106 Amortization of prior service cost* 6 (3) 3 5 (1) 4 Pension and postretirement benefits adjustments, net 120 (30) 90 143 (33) 110 Foreign currency translation adjustments: Foreign currency translation adjustments (36) — (36) 28 (3) 25 Business disposition 14 — 14 — — — Foreign currency translation adjustments, net (22) — (22) 28 (3) 25 Deferred gains (losses) on hedge contracts: Current deferrals 1 1 2 (2) — (2) Reclassification adjustments (1) — (1) (5) 2 (3) Deferred gains (losses) on hedge contracts, net — 1 1 (7) 2 (5) Total $ 98 $ (29) $ 69 $ 164 $ (34) $ 130 *These components of other comprehensive income 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	9 Months Ended
	Oct. 02, 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 from continuing operations before income taxes, are included in the table below: Three Months Ended Nine Months Ended (In millions) October 2, October 3, October 2, October 3, Revenues Textron Aviation $ 1,181 $ 795 $ 3,207 $ 2,414 Bell 769 793 2,506 2,438 Textron Systems 299 302 960 956 Industrial 730 832 2,349 2,134 Finance 11 13 38 42 Total revenues $ 2,990 $ 2,735 $ 9,060 $ 7,984 Segment Profit Textron Aviation $ 98 $ (29) $ 241 $ (92) Bell 105 119 320 352 Textron Systems 45 40 144 103 Industrial 23 58 102 56 Finance 8 1 17 8 Segment profit 279 189 824 427 Corporate expenses and other, net (23) (28) (100) (72) Interest expense, net for Manufacturing group (28) (38) (95) (109) Special charges* (10) (7) (20) (124) Gain on business disposition — — 17 — Inventory charge* — — — (55) Income from continuing operations before income taxes $ 218 $ 116 $ 626 $ 67 * See Note 12 for additional information.

Revenues

Revenues	9 Months Ended
	Oct. 02, 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 Nine Months Ended (In millions) October 2, October 3, October 2, October 3, Aircraft $ 814 $ 486 $ 2,146 $ 1,479 Aftermarket parts and services 367 309 1,061 935 Textron Aviation 1,181 795 3,207 2,414 Military aircraft and support programs 488 515 1,637 1,737 Commercial helicopters, parts and services 281 278 869 701 Bell 769 793 2,506 2,438 Air systems* 99 138 339 423 Land and sea systems* 53 54 174 177 Other* 147 110 447 356 Textron Systems 299 302 960 956 Fuel systems and functional components 382 497 1,319 1,233 Specialized vehicles 348 335 1,030 901 Industrial 730 832 2,349 2,134 Finance 11 13 38 42 Total revenues $ 2,990 $ 2,735 $ 9,060 $ 7,984 * Due to a reorganization of certain products within Textron Systems, prior year amounts have been reclassified to conform to the current year presentation for Air Systems, formerly referred to as “Unmanned Systems”, and Land and Sea Systems, formerly referred to as “Marine and Land Systems”. Other includes the following operating units and businesses: Electronic Systems, Weapons Systems, Lycoming, Airborne Tactical Advantage Company and, prior to its disposition, TRU Simulation + Training Canada Inc. 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 October 2, 2021 Customer type: Commercial $ 1,149 $ 278 $ 62 $ 730 $ 11 $ 2,230 U.S. Government 32 491 237 — — 760 Total revenues $ 1,181 $ 769 $ 299 $ 730 $ 11 $ 2,990 Geographic location: United States $ 915 $ 569 $ 266 $ 377 $ 7 $ 2,134 Europe 97 48 10 160 — 315 Asia and Australia 58 90 16 88 1 253 Other international 111 62 7 105 3 288 Total revenues $ 1,181 $ 769 $ 299 $ 730 $ 11 $ 2,990 Three months ended October 3, 2020 Customer type: Commercial $ 758 $ 273 $ 54 $ 830 $ 13 $ 1,928 U.S. Government 37 520 248 2 — 807 Total revenues $ 795 $ 793 $ 302 $ 832 $ 13 $ 2,735 Geographic location: United States $ 562 $ 608 $ 263 $ 401 $ 7 $ 1,841 Europe 65 43 10 203 — 321 Asia and Australia 68 67 15 92 — 242 Other international 100 75 14 136 6 331 Total revenues $ 795 $ 793 $ 302 $ 832 $ 13 $ 2,735 Nine months ended October 2, 2021 Customer type: Commercial $ 3,122 $ 894 $ 187 $ 2,337 $ 38 $ 6,578 U.S. Government 85 1,612 773 12 — 2,482 Total revenues $ 3,207 $ 2,506 $ 960 $ 2,349 $ 38 $ 9,060 Geographic location: United States $ 2,409 $ 1,862 $ 852 $ 1,161 $ 21 $ 6,305 Europe 303 131 29 588 1 1,052 Asia and Australia 209 276 52 267 4 808 Other international 286 237 27 333 12 895 Total revenues $ 3,207 $ 2,506 $ 960 $ 2,349 $ 38 $ 9,060 Nine months ended October 3, 2020 Customer type: Commercial $ 2,322 $ 687 $ 182 $ 2,128 $ 42 $ 5,361 U.S. Government 92 1,751 774 6 — 2,623 Total revenues $ 2,414 $ 2,438 $ 956 $ 2,134 $ 42 $ 7,984 Geographic location: United States $ 1,677 $ 1,979 $ 825 $ 1,017 $ 21 $ 5,519 Europe 219 88 33 558 1 899 Asia and Australia 241 183 50 221 1 696 Other international 277 188 48 338 19 870 Total revenues $ 2,414 $ 2,438 $ 956 $ 2,134 $ 42 $ 7,984 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 October 2, 2021, we had $9.8 billion in remaining performance obligations of which we expect to recognize revenues of approximately 70% through 2022, an additional 25% through 2024, and the balance thereafter. Contract Assets and Liabilities

Retirement Plans

Retirement Plans	9 Months Ended
	Oct. 02, 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 Nine Months Ended (In millions) October 2, October 3, October 2, October 3, Pension Benefits Service cost $ 29 $ 27 $ 87 $ 79 Interest cost 62 73 188 220 Expected return on plan assets (143) (144) (431) (431) Amortization of net actuarial loss 39 47 116 139 Amortization of prior service cost 4 3 10 9 Net periodic benefit cost (credit)* $ (9) $ 6 $ (30) $ 16 Postretirement Benefits Other Than Pensions Service cost $ 1 $ — $ 2 $ 2 Interest cost 1 2 4 6 Amortization of net actuarial gain (1) (1) (2) (1) Amortization of prior service credit (2) (1) (4) (4) Net periodic benefit cost (credit) $ (1) $ — $ — $ 3 * Excludes the cost associated with the defined contribution component, included in certain of our U.S.-based defined benefit pension plans, that totaled $2 million and $8 million for the third quarter and first nine months of 2021, respectively, and $2 million and $8 million for the third quarter and first nine months of 2020, respectively.

Special Charges

Special Charges	9 Months Ended
	Oct. 02, 2021
Special Charges [Abstract]
Special Charges	Special Charges Special charges recorded in the third quarter and first nine months of 2021 and 2020 by segment and type of cost are presented in the table below. (In millions) Severance Contract Asset Total 2020 Other Asset Total Three months ended October 2, 2021 Industrial $ 3 $ 1 $ 6 $ 10 $ — $ 10 Total special charges $ 3 $ 1 $ 6 $ 10 $ — $ 10 Three months ended October 3, 2020 Industrial $ 3 $ — $ 2 $ 5 $ — $ 5 Corporate 2 — — 2 — 2 Total special charges $ 5 $ — $ 2 $ 7 $ — $ 7 Nine months ended October 2, 2021 Industrial $ 3 $ 6 $ 11 $ 20 $ — $ 20 Total special charges $ 3 $ 6 $ 11 $ 20 $ — $ 20 Nine months ended October 3, 2020 Textron Aviation $ 27 $ — $ 1 $ 28 $ 32 $ 60 Textron Systems 14 12 14 40 — 40 Industrial 11 — 2 13 7 20 Corporate 4 — — 4 — 4 Total special charges $ 56 $ 12 $ 17 $ 85 $ 39 $ 124 2020 COVID-19 Restructuring Plan In the second quarter of 2020, we initiated a restructuring plan to reduce operating expenses through headcount reductions, facility consolidations and other actions in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic. This plan 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 $128 million, which included severance costs of $76 million for the termination of approximately 2,800 employees, asset impairment charges of $33 million and contract terminations and other costs of $19 million. Of these amounts, $54 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 $5 million to $10 million, primarily in the Industrial segment, and expect the plan to be substantially completed in the fourth quarter of 2021. In the second quarter of 2020 and in connection with the restructuring plan, we ceased manufacturing at TRU Simulation + Training Canada Inc.’s facility in Montreal, Canada, resulting in a production suspension of our commercial air transport simulators. As a result of this action and market conditions, we incurred an inventory charge of $55 million, which was recorded in Cost of Sales, to write-down the related inventory to its net realizable value. Other Asset Impairments 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: (In millions) Severance Contract Total Balance at January 2, 2021 $ 43 $ 9 $ 52 Provision for 2020 COVID-19 restructuring plan 8 7 15 Cash paid (21) (7) (28) Reversals (5) (1) (6) Foreign currency translation (1) — (1) Balance at October 2, 2021 $ 24 $ 8 $ 32 The majority of the remaining cash outlays of $32 million is expected to be paid by the first quarter of 2022. 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	9 Months Ended
	Oct. 02, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Our effective tax rate for the third quarter and first nine months of 2021 was 15.1% and 13.7%, respectively. In the third quarter and first nine months of 2021, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the favorable impact of research and development credits. In the first nine months of 2021, the effective tax rate also included a $12 million benefit recognized for additional research and development credits related to prior years. Our effective tax rate for the third quarter and first nine months of 2020 was 0.9% and (9.0)%, respectively, compared with the statutory rate of 21%, largely due to the favorable impact of research and development credits. In the first nine months of 2020, we incurred special charges and an inventory charge in a non-U.S. jurisdiction where tax benefits cannot be realized, which were partially offset by a $14 million benefit recognized upon the release of a valuation allowance in a non-U.S. jurisdiction. These items had a more significant impact on the effective tax rate due to the lower income from continuing operations before income taxes for the period.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Oct. 02, 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 Presentation (Policies

Basis of Presentation (Policies)	9 Months Ended
	Oct. 02, 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)	9 Months Ended
	Oct. 02, 2021
Receivables [Abstract]
Accounts Receivable	Accounts receivable is composed of the following: (In millions) October 2, January 2, Commercial $ 671 $ 668 U.S. Government contracts 131 155 802 823 Allowance for credit losses (29) (36) Total accounts receivable, net $ 773 $ 787
Finance Receivables	Finance receivables are presented in the following table: (In millions) October 2, January 2, Finance receivables $ 621 $ 779 Allowance for credit losses (25) (35) Total finance receivables, net $ 596 $ 744
Finance Receivables Categorized Based On Credit Quality Indicators	Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows: (Dollars in millions) October 2, January 2, Performing $ 511 $ 612 Watchlist — 74 Nonaccrual 110 93 Nonaccrual as a percentage of finance receivables 17.71% 11.94% Current and less than 31 days past due $ 604 $ 738 31-60 days past due 5 12 61-90 days past due 3 11 Over 90 days past due 9 18 60+ days contractual delinquency as a percentage of finance receivables 1.93% 3.72%
Finance Receivables By Delinquency Aging Category	Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows: (Dollars in millions) October 2, January 2, Performing $ 511 $ 612 Watchlist — 74 Nonaccrual 110 93 Nonaccrual as a percentage of finance receivables 17.71% 11.94% Current and less than 31 days past due $ 604 $ 738 31-60 days past due 5 12 61-90 days past due 3 11 Over 90 days past due 9 18 60+ days contractual delinquency as a percentage of finance receivables 1.93% 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) October 2, January 2, Finance receivables evaluated collectively $ 416 $ 521 Finance receivables evaluated individually 110 163 Allowance for credit losses based on collective evaluation 21 28 Allowance for credit losses based on individual evaluation 4 7 Impaired finance receivables with specific allowance for credit losses $ 34 $ 46 Impaired finance receivables with no specific allowance for credit losses 76 117 Unpaid principal balance of impaired finance receivables 124 175 Allowance for credit losses on impaired finance receivables 4 7 Average recorded investment of impaired finance receivables 123 126

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Oct. 02, 2021
Inventory Disclosure [Abstract]
Inventories	Inventories are composed of the following: (In millions) October 2, January 2, Finished goods $ 1,085 $ 1,228 Work in process 1,741 1,455 Raw materials and components 844 830 Total inventories $ 3,670 $ 3,513

Warranty Liability (Tables)

Warranty Liability (Tables)	9 Months Ended
	Oct. 02, 2021
Payables and Accruals [Abstract]
Changes in warranty liability	Changes in our warranty liability are as follows: Nine Months Ended (In millions) October 2, October 3, Beginning of period $ 119 $ 141 Provision 49 35 Settlements (52) (46) Adjustments* 5 (13) End of period $ 121 $ 117 * Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.

Leases (Tables)

Leases (Tables)	9 Months Ended
	Oct. 02, 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) October 2, January 2, Other assets $ 388 $ 349 Other current liabilities 58 47 Other liabilities 336 306 Weighted-average remaining lease term (in years) 10.5 11.6 Weighted-average discount rate 3.34% 4.17%

Derivative Instruments and Fa_2

Derivative Instruments and Fair Value Measurements (Tables)	9 Months Ended
	Oct. 02, 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: October 2, 2021 January 2, 2021 Carrying Estimated Carrying Estimated (In millions) Value Fair Value Value Fair Value Manufacturing group Debt, excluding leases $ (3,183) $ (3,413) $ (3,690) $ (3,986) Finance group Finance receivables, excluding leases 404 438 549 599 Debt (585) (552) (662) (587)

Shareholders' Equity (Tables)

Shareholders' Equity (Tables)	9 Months Ended
	Oct. 02, 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 October 2, 2021 Beginning of period $ 29 $ 1,920 $ (490) $ 6,318 $ (1,676) $ 6,101 Net income — — — 185 — 185 Other comprehensive income — — — — 6 6 Share-based compensation activity — 49 — — — 49 Dividends declared — — — (5) — (5) Purchases of common stock — — (299) — — (299) End of period $ 29 $ 1,969 $ (789) $ 6,498 $ (1,670) $ 6,037 Three months ended October 3, 2020 Beginning of period $ 29 $ 1,732 $ (74) $ 5,631 $ (1,791) $ 5,527 Net income — — — 115 — 115 Other comprehensive income — — — — 74 74 Share-based compensation activity — 30 — — — 30 Dividends declared — — — (5) — (5) End of period $ 29 $ 1,762 $ (74) $ 5,741 $ (1,717) $ 5,741 Nine months ended October 2, 2021 Beginning of period $ 29 $ 1,785 $ (203) $ 5,973 $ (1,739) $ 5,845 Net income — — — 539 — 539 Other comprehensive income — — — — 69 69 Share-based compensation activity — 184 — — — 184 Dividends declared — — — (14) — (14) Purchases of common stock — — (586) — — (586) End of period $ 29 $ 1,969 $ (789) $ 6,498 $ (1,670) $ 6,037 Nine months ended October 3, 2020 Beginning of period $ 29 $ 1,674 $ (20) $ 5,682 $ (1,847) $ 5,518 Net income — — — 73 — 73 Other comprehensive income — — — — 130 130 Share-based compensation activity — 88 — — — 88 Dividends declared — — — (14) — (14) Purchases of common stock — — (54) — — (54) End of period $ 29 $ 1,762 $ (74) $ 5,741 $ (1,717) $ 5,741
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 Nine Months Ended (In thousands) October 2, October 3, October 2, October 3, Basic weighted-average shares outstanding 223,663 228,918 225,545 228,492 Dilutive effect of stock options 2,827 361 2,250 345 Diluted weighted-average shares outstanding 226,490 229,279 227,795 228,837
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 — (36) 2 (34) Reclassified from Accumulated other comprehensive loss 90 14 (1) 103 Balance at October 2, 2021 $ (1,690) $ 20 $ — $ (1,670) Balance at January 4, 2020 $ (1,811) $ (36) $ — $ (1,847) Other comprehensive income before reclassifications — 25 (2) 23 Reclassified from Accumulated other comprehensive loss 110 — (3) 107 Balance at October 3, 2020 $ (1,701) $ (11) $ (5) $ (1,717)
Schedule of Before and After-Tax Components of Other Comprehensive Income (Loss)	The before and after-tax components of Other comprehensive income are presented below: October 2, 2021 October 3, 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 $ (11) $ 35 Amortization of prior service cost* 2 (1) 1 2 — 2 Pension and postretirement benefits adjustments, net 40 (10) 30 48 (11) 37 Foreign currency translation adjustments (19) — (19) 35 — 35 Deferred gains (losses) on hedge contracts: Current deferrals (6) 2 (4) 3 — 3 Reclassification adjustments (1) — (1) (2) 1 (1) Deferred gains (losses) on hedge contracts, net (7) 2 (5) 1 1 2 Total $ 14 $ (8) $ 6 $ 84 $ (10) $ 74 Nine Months Ended Pension and postretirement benefits adjustments: Amortization of net actuarial loss* $ 114 $ (27) $ 87 $ 138 $ (32) $ 106 Amortization of prior service cost* 6 (3) 3 5 (1) 4 Pension and postretirement benefits adjustments, net 120 (30) 90 143 (33) 110 Foreign currency translation adjustments: Foreign currency translation adjustments (36) — (36) 28 (3) 25 Business disposition 14 — 14 — — — Foreign currency translation adjustments, net (22) — (22) 28 (3) 25 Deferred gains (losses) on hedge contracts: Current deferrals 1 1 2 (2) — (2) Reclassification adjustments (1) — (1) (5) 2 (3) Deferred gains (losses) on hedge contracts, net — 1 1 (7) 2 (5) Total $ 98 $ (29) $ 69 $ 164 $ (34) $ 130

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Oct. 02, 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 from continuing operations before income taxes, are included in the table below: Three Months Ended Nine Months Ended (In millions) October 2, October 3, October 2, October 3, Revenues Textron Aviation $ 1,181 $ 795 $ 3,207 $ 2,414 Bell 769 793 2,506 2,438 Textron Systems 299 302 960 956 Industrial 730 832 2,349 2,134 Finance 11 13 38 42 Total revenues $ 2,990 $ 2,735 $ 9,060 $ 7,984 Segment Profit Textron Aviation $ 98 $ (29) $ 241 $ (92) Bell 105 119 320 352 Textron Systems 45 40 144 103 Industrial 23 58 102 56 Finance 8 1 17 8 Segment profit 279 189 824 427 Corporate expenses and other, net (23) (28) (100) (72) Interest expense, net for Manufacturing group (28) (38) (95) (109) Special charges* (10) (7) (20) (124) Gain on business disposition — — 17 — Inventory charge* — — — (55) Income from continuing operations before income taxes $ 218 $ 116 $ 626 $ 67 * See Note 12 for additional information.

Revenues (Tables)

Revenues (Tables)	9 Months Ended
	Oct. 02, 2021
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	Our revenues disaggregated by major product type are presented below: Three Months Ended Nine Months Ended (In millions) October 2, October 3, October 2, October 3, Aircraft $ 814 $ 486 $ 2,146 $ 1,479 Aftermarket parts and services 367 309 1,061 935 Textron Aviation 1,181 795 3,207 2,414 Military aircraft and support programs 488 515 1,637 1,737 Commercial helicopters, parts and services 281 278 869 701 Bell 769 793 2,506 2,438 Air systems* 99 138 339 423 Land and sea systems* 53 54 174 177 Other* 147 110 447 356 Textron Systems 299 302 960 956 Fuel systems and functional components 382 497 1,319 1,233 Specialized vehicles 348 335 1,030 901 Industrial 730 832 2,349 2,134 Finance 11 13 38 42 Total revenues $ 2,990 $ 2,735 $ 9,060 $ 7,984 * Due to a reorganization of certain products within Textron Systems, prior year amounts have been reclassified to conform to the current year presentation for Air Systems, formerly referred to as “Unmanned Systems”, and Land and Sea Systems, formerly referred to as “Marine and Land Systems”. Other includes the following operating units and businesses: Electronic Systems, Weapons Systems, Lycoming, Airborne Tactical Advantage Company and, prior to its disposition, TRU Simulation + Training Canada Inc. 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 October 2, 2021 Customer type: Commercial $ 1,149 $ 278 $ 62 $ 730 $ 11 $ 2,230 U.S. Government 32 491 237 — — 760 Total revenues $ 1,181 $ 769 $ 299 $ 730 $ 11 $ 2,990 Geographic location: United States $ 915 $ 569 $ 266 $ 377 $ 7 $ 2,134 Europe 97 48 10 160 — 315 Asia and Australia 58 90 16 88 1 253 Other international 111 62 7 105 3 288 Total revenues $ 1,181 $ 769 $ 299 $ 730 $ 11 $ 2,990 Three months ended October 3, 2020 Customer type: Commercial $ 758 $ 273 $ 54 $ 830 $ 13 $ 1,928 U.S. Government 37 520 248 2 — 807 Total revenues $ 795 $ 793 $ 302 $ 832 $ 13 $ 2,735 Geographic location: United States $ 562 $ 608 $ 263 $ 401 $ 7 $ 1,841 Europe 65 43 10 203 — 321 Asia and Australia 68 67 15 92 — 242 Other international 100 75 14 136 6 331 Total revenues $ 795 $ 793 $ 302 $ 832 $ 13 $ 2,735 Nine months ended October 2, 2021 Customer type: Commercial $ 3,122 $ 894 $ 187 $ 2,337 $ 38 $ 6,578 U.S. Government 85 1,612 773 12 — 2,482 Total revenues $ 3,207 $ 2,506 $ 960 $ 2,349 $ 38 $ 9,060 Geographic location: United States $ 2,409 $ 1,862 $ 852 $ 1,161 $ 21 $ 6,305 Europe 303 131 29 588 1 1,052 Asia and Australia 209 276 52 267 4 808 Other international 286 237 27 333 12 895 Total revenues $ 3,207 $ 2,506 $ 960 $ 2,349 $ 38 $ 9,060 Nine months ended October 3, 2020 Customer type: Commercial $ 2,322 $ 687 $ 182 $ 2,128 $ 42 $ 5,361 U.S. Government 92 1,751 774 6 — 2,623 Total revenues $ 2,414 $ 2,438 $ 956 $ 2,134 $ 42 $ 7,984 Geographic location: United States $ 1,677 $ 1,979 $ 825 $ 1,017 $ 21 $ 5,519 Europe 219 88 33 558 1 899 Asia and Australia 241 183 50 221 1 696 Other international 277 188 48 338 19 870 Total revenues $ 2,414 $ 2,438 $ 956 $ 2,134 $ 42 $ 7,984

Retirement Plans (Tables)

Retirement Plans (Tables)	9 Months Ended
	Oct. 02, 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 Nine Months Ended (In millions) October 2, October 3, October 2, October 3, Pension Benefits Service cost $ 29 $ 27 $ 87 $ 79 Interest cost 62 73 188 220 Expected return on plan assets (143) (144) (431) (431) Amortization of net actuarial loss 39 47 116 139 Amortization of prior service cost 4 3 10 9 Net periodic benefit cost (credit)* $ (9) $ 6 $ (30) $ 16 Postretirement Benefits Other Than Pensions Service cost $ 1 $ — $ 2 $ 2 Interest cost 1 2 4 6 Amortization of net actuarial gain (1) (1) (2) (1) Amortization of prior service credit (2) (1) (4) (4) Net periodic benefit cost (credit) $ (1) $ — $ — $ 3 * Excludes the cost associated with the defined contribution component, included in certain of our U.S.-based defined benefit pension plans, that totaled $2 million and $8 million for the third quarter and first nine months of 2021, respectively, and $2 million and $8 million for the third quarter and first nine months of 2020, respectively.

Special Charges (Tables)

Special Charges (Tables)	9 Months Ended
	Oct. 02, 2021
Special Charges [Abstract]
Schedule of Special Charges	Special charges recorded in the third quarter and first nine months of 2021 and 2020 by segment and type of cost are presented in the table below. (In millions) Severance Contract Asset Total 2020 Other Asset Total Three months ended October 2, 2021 Industrial $ 3 $ 1 $ 6 $ 10 $ — $ 10 Total special charges $ 3 $ 1 $ 6 $ 10 $ — $ 10 Three months ended October 3, 2020 Industrial $ 3 $ — $ 2 $ 5 $ — $ 5 Corporate 2 — — 2 — 2 Total special charges $ 5 $ — $ 2 $ 7 $ — $ 7 Nine months ended October 2, 2021 Industrial $ 3 $ 6 $ 11 $ 20 $ — $ 20 Total special charges $ 3 $ 6 $ 11 $ 20 $ — $ 20 Nine months ended October 3, 2020 Textron Aviation $ 27 $ — $ 1 $ 28 $ 32 $ 60 Textron Systems 14 12 14 40 — 40 Industrial 11 — 2 13 7 20 Corporate 4 — — 4 — 4 Total special charges $ 56 $ 12 $ 17 $ 85 $ 39 $ 124
Schedule of Restructuring Reserve Activity	Our restructuring reserve activity is summarized below: (In millions) Severance Contract Total Balance at January 2, 2021 $ 43 $ 9 $ 52 Provision for 2020 COVID-19 restructuring plan 8 7 15 Cash paid (21) (7) (28) Reversals (5) (1) (6) Foreign currency translation (1) — (1) Balance at October 2, 2021 $ 24 $ 8 $ 32

Basis of Presentation (Details)

Basis of Presentation (Details) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2021USD ($)$ / shares	Oct. 03, 2020USD ($)$ / shares	Oct. 02, 2021USD ($)borrowingGroup$ / shares	Oct. 03, 2020USD ($)$ / shares
Basis of Presentation
Number of borrowing groups | borrowingGroup			2
Cumulative catch-up method
Basis of Presentation
Cumulative catch up adjustments	$ 25	$ 22	$ 54	$ 41
Change in accounting estimate financial effect, increase in net income	$ 19	$ 17	$ 41	$ 31
Change in accounting estimate financial effect increase in earnings per diluted share (in dollars per share) | $ / shares	$ 0.08	$ 0.07	$ 0.18	$ 0.14
Gross favorable adjustments	$ 43	$ 31	$ 119	$ 104
Gross unfavorable adjustments	18	9	65	63
Recognized revenue form performance obligations satisfied in prior periods	$ 27	$ 22	$ 65	$ 48

Business Disposition (Details)

Business Disposition (Details) - USD ($) $ in Millions	Jan. 25, 2021	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from business disposition				$ 38	$ 0
After-tax gain		$ 0	$ 0	$ 17	$ 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	$ 38
After-tax gain	$ 17

Accounts Receivable and Finan_3

Accounts Receivable and Finance Receivables - Accounts Receivable (Details) - Manufacturing group - USD ($) $ in Millions	Oct. 02, 2021	Jan. 02, 2021
Accounts Receivable
Accounts receivable, gross	$ 802	$ 823
Allowance for credit losses	(29)	(36)
Total accounts receivable, net	773	787
Commercial
Accounts Receivable
Accounts receivable, gross	671	668
U.S. Government
Accounts Receivable
Accounts receivable, gross	$ 131	$ 155

Accounts Receivable and Finan_4

Accounts Receivable and Finance Receivables - Finance Receivables (Details) - USD ($) $ in Millions	Oct. 02, 2021	Jan. 02, 2021
Finance Receivables
Finance receivables	$ 621	$ 779
Allowance for credit losses	(25)	(35)
Total finance receivables, net	$ 596	$ 744

Accounts Receivable and Finan_5

Accounts Receivable and Finance Receivables - Finance Receivable Portfolio Quality (Details) $ in Millions	9 Months Ended
	Oct. 02, 2021USD ($)customer	Jan. 02, 2021USD ($)
Finance Receivable Portfolio Quality
Number of customers finance receivable contracts modified | customer	21
Finance receivables categorized as troubled debt restructurings	$ 76
Finance receivables categorized as troubled debt restructurings that were previously modified	$ 71
Customer default related to finance receivables previously modified as a troubled debt restructuring that had an insignificant outstanding balance | customer	0
Finance receivables	$ 621	$ 779
60+ days contractual delinquency as a percentage of finance receivables	1.93%	3.72%
Current and less than 31 days past due
Finance Receivable Portfolio Quality
Finance receivables	$ 604	$ 738
31-60 days past due
Finance Receivable Portfolio Quality
Finance receivables	5	12
61-90 days past due
Finance Receivable Portfolio Quality
Finance receivables	3	11
Over 90 days past due
Finance Receivable Portfolio Quality
Finance receivables	$ 9	$ 18
Performing
Finance Receivable Portfolio Quality
Financing receivable originating since the beginning 2020	30.00%
Financing receivable originating from 2017 to 2019	32.00%
Nonperforming
Finance Receivable Portfolio Quality
Nonaccrual as a percentage of finance receivables	17.71%	11.94%
Nonperforming
Finance Receivable Portfolio Quality
Payment relief period over which loan is considered impaired	6 months
Nonperforming | Watchlist
Finance Receivable Portfolio Quality
Finance receivables	$ 0	$ 74
Nonperforming | Nonaccrual
Finance Receivable Portfolio Quality
Finance receivables	$ 110	93
Financing receivable originating from 2017 to 2019	63.00%
Nonperforming | Minimum
Finance Receivable Portfolio Quality
Number of months of contractual delinquency to classify accounts as nonaccrual unless such collection is not doubtful	3 months
Performing
Finance Receivable Portfolio Quality
Finance receivables	$ 511	$ 612

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	9 Months Ended	12 Months Ended
	Oct. 02, 2021	Jan. 02, 2021
Finance receivables
Finance receivables evaluated collectively	$ 416	$ 521
Finance receivables evaluated individually	110	163
Allowance for credit losses based on collective evaluation	21	28
Allowance for credit losses based on individual evaluation	4	7
Impaired finance receivables with specific allowance for credit losses	34	46
Impaired finance receivables with no specific allowance for credit losses	76	117
Unpaid principal balance of impaired finance receivables	124	175
Allowance for credit losses on impaired finance receivables	4	7
Average recorded investment of impaired finance receivables	$ 123	$ 126

Inventories (Details)

Inventories (Details) - USD ($) $ in Millions	Oct. 02, 2021	Jan. 02, 2021
Inventories
Finished goods	$ 1,085	$ 1,228
Work in process	1,741	1,455
Raw materials and components	844	830
Total inventories	$ 3,670	$ 3,513

Warranty Liability (Details)

Warranty Liability (Details) - USD ($) $ in Millions	9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020
Changes in warranty liability
Beginning of period	$ 119	$ 141
Provision	49	35
Settlements	(52)	(46)
Adjustments	5	(13)
End of period	$ 121	$ 117

Leases - Narrative (Details)

Leases - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020
Leases [Abstract]
Remaining lease terms	28 years		28 years
Operating lease - option to extend the lease, term	25 years		25 years
Operating lease - option to extend			true
Operating lease cost	$ 17	$ 15	$ 49	$ 45
Cash paid for operating lease liabilities			49	45
Noncash lease transactions			$ 81	$ 33

Leases - Balance Sheet and Othe

Leases - Balance Sheet and Other Information (Details) - USD ($) $ in Millions	Oct. 02, 2021	Jan. 02, 2021
Operating leases:
Other assets	$ 388	$ 349
Other current liabilities	58	47
Other liabilities	$ 336	$ 306
Weighted-average remaining lease term (in years)
Weighted-average remaining lease term (in years)	10 years 6 months	11 years 7 months 6 days
Weighted-average discount rate
Weighted-average discount rate	3.34%	4.17%
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other assets
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other current liabilities
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other liabilities

Leases - Maturity of Lease Liab

Leases - Maturity of Lease Liabilities (Details) $ in Millions	Oct. 02, 2021USD ($)
Operating Leases
Remainder of 2021	$ 20
2022	69
2023	59
2024	51
2025	45
Thereafter	$ 247

Derivative Instruments and Fa_3

Derivative Instruments and Fair Value Measurements - Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Details) - USD ($)	9 Months Ended
	Oct. 02, 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	$ 341,000,000	$ 318,000,000
Manufacturing group | Foreign currency exchange contracts | Cash Flow Hedging | Level 2
Fair value of derivative instruments
Fair value of foreign currency exchange contracts, asset	5,000,000	5,000,000
Fair value of foreign currency exchange contracts, liability	2,000,000	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	Oct. 02, 2021	Jan. 02, 2021
Manufacturing group | Carrying Value
Financial instruments not reflected at fair value
Debt, excluding leases	$ (3,183)	$ (3,690)
Manufacturing group | Estimated Fair value
Financial instruments not reflected at fair value
Debt, excluding leases	(3,413)	(3,986)
Finance group | Carrying Value
Financial instruments not reflected at fair value
Finance receivables, excluding leases	404	549
Debt, carrying value	(585)	(662)
Finance group | Estimated Fair value
Financial instruments not reflected at fair value
Finance receivables, excluding leases	438	599
Debt, estimated fair value	$ (552)	$ (587)

Shareholders' Equity - Reconcil

Shareholders' Equity - Reconciliation of Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	$ 6,101	$ 5,527	$ 5,845	$ 5,518
Net income	185	115	539	73
Other comprehensive income	6	74	69	130
Share-based compensation activity	49	30	184	88
Dividends declared	(5)	(5)	(14)	(14)
Purchases of common stock	(299)		(586)	(54)
Balance at end of period	$ 6,037	$ 5,741	$ 6,037	$ 5,741
Dividends per share of common stock (in dollars per share)	$ 0.02	$ 0.02	$ 0.06	$ 0.06
Common Stock
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	$ 29	$ 29	$ 29	$ 29
Balance at end of period	29	29	29	29
Capital Surplus
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	1,920	1,732	1,785	1,674
Share-based compensation activity	49	30	184	88
Balance at end of period	1,969	1,762	1,969	1,762
Treasury Stock
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	(490)	(74)	(203)	(20)
Purchases of common stock	(299)		(586)	(54)
Balance at end of period	(789)	(74)	(789)	(74)
Retained Earnings
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	6,318	5,631	5,973	5,682
Net income	185	115	539	73
Dividends declared	(5)	(5)	(14)	(14)
Balance at end of period	6,498	5,741	6,498	5,741
Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	(1,676)	(1,791)	(1,739)	(1,847)
Other comprehensive income	6	74	69	130
Balance at end of period	$ (1,670)	$ (1,717)	$ (1,670)	$ (1,717)

Shareholders' Equity - Earnings

Shareholders' Equity - Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020
Weighted-average shares outstanding for basic and diluted EPS
Basic weighted-average shares outstanding (in shares)	223,663	228,918	225,545	228,492
Dilutive effect of stock options (in shares)	2,827	361	2,250	345
Diluted weighted-average shares outstanding (in shares)	226,490	229,279	227,795	228,837
Stock options
Weighted-average shares outstanding for basic and diluted EPS
Anti-dilutive effect of weighted average shares (in shares)		7,500	1,400	7,900

Shareholders' Equity - Accumula

Shareholders' Equity - Accumulated Other Comprehensive Loss and Other Comprehensive Income (Details) - USD ($) $ in Millions	9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning of period	$ (1,739)
Other comprehensive income (loss) before reclassifications	(34)	$ 23
Reclassified from Accumulated other comprehensive loss	103	107
End of period	(1,670)
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning of period	(1,739)	(1,847)
End of period	(1,670)	(1,717)
Pension and Postretirement Benefits Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning of period	(1,780)	(1,811)
Other comprehensive income (loss) before reclassifications	0	0
Reclassified from Accumulated other comprehensive loss	90	110
End of period	(1,690)	(1,701)
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning of period	42	(36)
Other comprehensive income (loss) before reclassifications	(36)	25
Reclassified from Accumulated other comprehensive loss	14	0
End of period	20	(11)
Deferred Gains (Losses) on Hedge Contracts
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning of period	(1)	0
Other comprehensive income (loss) before reclassifications	2	(2)
Reclassified from Accumulated other comprehensive loss	(1)	(3)
End of period	$ 0	$ (5)

Shareholders' Equity - Before a

Shareholders' Equity - Before and After Tax Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020
Pension and postretirement benefits adjustments, pre-tax:
Amortization of net actuarial loss, pre-tax	$ 38	$ 46	$ 114	$ 138
Amortization of prior service cost, pre-tax	2	2	6	5
Pension and postretirement benefits adjustments, net, pre-tax	40	48	120	143
Pension and postretirement benefits adjustments, tax:
Amortization of net actuarial loss, tax (expense) benefit	(9)	(11)	(27)	(32)
Amortization of prior service cost, tax (expense) benefit	(1)	0	(3)	(1)
Pension and postretirement benefits adjustments, net, tax (expense) benefit	(10)	(11)	(30)	(33)
Pension and postretirement benefits adjustments, after-tax:
Amortization of net actuarial loss, after-tax	29	35	87	106
Amortization of prior period service cost, after-tax	1	2	3	4
Pension and postretirement benefits adjustments, net, after-tax	30	37	90	110
Foreign currency translation adjustments, pre-tax:
Foreign currency translation adjustments, pre-tax			(36)	28
Business disposition, pre-tax			14	0
Foreign currency translation adjustments, net, pre-tax	(19)	35	(22)	28
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	0	0	(3)
Foreign currency translation adjustments, after-tax:
Foreign currency translation adjustments, after-tax			(36)	25
Business disposition, after-tax			14	0
Foreign currency translation adjustments, net, after-tax	(19)	35	(22)	25
Deferred gains (losses) on hedge contracts, pre-tax:
Current deferrals, pre-tax	(6)	3	1	(2)
Reclassification adjustments, pre-tax	(1)	(2)	(1)	(5)
Deferred gains (losses) on hedge contracts, net, pre-tax	(7)	1	0	(7)
Other comprehensive income (loss), pre-tax	14	84	98	164
Deferred gains (losses) on hedge contracts, tax:
Current deferrals, tax (expense) benefit	2	0	1	0
Reclassification adjustments, tax (expense) benefit	0	1	0	2
Deferred gains (losses) on hedge contracts, net, tax (expense) benefit	2	1	1	2
Other comprehensive income (loss), tax (expense) benefit	(8)	(10)	(29)	(34)
Deferred gains (losses) on hedge contracts, after-tax:
Current deferrals, after-tax	(4)	3	2	(2)
Reclassification adjustments, after-tax	(1)	(1)	(1)	(3)
Deferred gains (losses) on hedge contracts, net, after-tax	(5)	2	1	(5)
Other comprehensive income	$ 6	$ 74	$ 69	$ 130

Segment Information - Operating

Segment Information - Operating and Reportable Segments (Details)	9 Months Ended
	Oct. 02, 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			9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Jul. 04, 2020	Oct. 02, 2021	Oct. 03, 2020
Revenues
Total revenues	$ 2,990	$ 2,735		$ 9,060	$ 7,984
Reconciliation of segment profit to income from continuing operations before income taxes
Special charges	(10)	(7)		(20)	(124)
Gain on business disposition	0	0		17	0
Income from continuing operations before income taxes	218	116		626	67
Operating Segment
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	279	189		824	427
Reconciling Items
Reconciliation of segment profit to income from continuing operations before income taxes
Corporate expenses and other, net	(23)	(28)		(100)	(72)
Special charges	(10)	(7)		(20)	(124)
Gain on business disposition	0	0		17	0
Inventory charge	0	0	$ (55)	0	(55)
Textron Aviation
Revenues
Total revenues	1,181	795		3,207	2,414
Textron Aviation | Operating Segment
Reconciliation of segment profit to income from continuing operations before income taxes
Special charges					(60)
Bell
Revenues
Total revenues	769	793		2,506	2,438
Textron Systems
Revenues
Total revenues	299	302		960	956
Textron Systems | Operating Segment
Reconciliation of segment profit to income from continuing operations before income taxes
Special charges					(40)
Industrial
Revenues
Total revenues	730	832		2,349	2,134
Industrial | Operating Segment
Reconciliation of segment profit to income from continuing operations before income taxes
Special charges	(10)	(5)		(20)	(20)
Finance
Revenues
Total revenues	11	13		38	42
Finance | Operating Segment
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	8	1		17	8
Manufacturing group
Reconciliation of segment profit to income from continuing operations before income taxes
Gain on business disposition				17	0
Manufacturing group | Reconciling Items
Reconciliation of segment profit to income from continuing operations before income taxes
Interest expense, net for Manufacturing group	(28)	(38)		(95)	(109)
Manufacturing group | Textron Aviation | Operating Segment
Revenues
Total revenues	1,181	795		3,207	2,414
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	98	(29)		241	(92)
Manufacturing group | Bell | Operating Segment
Revenues
Total revenues	769	793		2,506	2,438
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	105	119		320	352
Manufacturing group | Textron Systems | Operating Segment
Revenues
Total revenues	299	302		960	956
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	45	40		144	103
Manufacturing group | Industrial | Operating Segment
Revenues
Total revenues	730	832		2,349	2,134
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	23	58		102	56
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	$ 11	$ 13		$ 38	$ 42

Revenues - Disaggregation of Re

Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020
Revenues
Revenues	$ 2,990	$ 2,735	$ 9,060	$ 7,984
United States
Revenues
Revenues	2,134	1,841	6,305	5,519
Europe
Revenues
Revenues	315	321	1,052	899
Asia and Australia
Revenues
Revenues	253	242	808	696
Other international
Revenues
Revenues	288	331	895	870
Commercial
Revenues
Revenues	2,230	1,928	6,578	5,361
U.S. Government
Revenues
Revenues	760	807	2,482	2,623
Textron Aviation
Revenues
Revenues	1,181	795	3,207	2,414
Textron Aviation | United States
Revenues
Revenues	915	562	2,409	1,677
Textron Aviation | Europe
Revenues
Revenues	97	65	303	219
Textron Aviation | Asia and Australia
Revenues
Revenues	58	68	209	241
Textron Aviation | Other international
Revenues
Revenues	111	100	286	277
Textron Aviation | Commercial
Revenues
Revenues	1,149	758	3,122	2,322
Textron Aviation | U.S. Government
Revenues
Revenues	32	37	85	92
Textron Aviation | Aircraft
Revenues
Revenues	814	486	2,146	1,479
Textron Aviation | Aftermarket parts and services
Revenues
Revenues	367	309	1,061	935
Bell
Revenues
Revenues	769	793	2,506	2,438
Bell | United States
Revenues
Revenues	569	608	1,862	1,979
Bell | Europe
Revenues
Revenues	48	43	131	88
Bell | Asia and Australia
Revenues
Revenues	90	67	276	183
Bell | Other international
Revenues
Revenues	62	75	237	188
Bell | Commercial
Revenues
Revenues	278	273	894	687
Bell | U.S. Government
Revenues
Revenues	491	520	1,612	1,751
Bell | Military aircraft and support programs
Revenues
Revenues	488	515	1,637	1,737
Bell | Commercial helicopters, parts and services
Revenues
Revenues	281	278	869	701
Textron Systems
Revenues
Revenues	299	302	960	956
Textron Systems | United States
Revenues
Revenues	266	263	852	825
Textron Systems | Europe
Revenues
Revenues	10	10	29	33
Textron Systems | Asia and Australia
Revenues
Revenues	16	15	52	50
Textron Systems | Other international
Revenues
Revenues	7	14	27	48
Textron Systems | Commercial
Revenues
Revenues	62	54	187	182
Textron Systems | U.S. Government
Revenues
Revenues	237	248	773	774
Textron Systems | Air systems
Revenues
Revenues	99	138	339	423
Textron Systems | Land and sea systems
Revenues
Revenues	53	54	174	177
Textron Systems | Other
Revenues
Revenues	147	110	447	356
Industrial
Revenues
Revenues	730	832	2,349	2,134
Industrial | United States
Revenues
Revenues	377	401	1,161	1,017
Industrial | Europe
Revenues
Revenues	160	203	588	558
Industrial | Asia and Australia
Revenues
Revenues	88	92	267	221
Industrial | Other international
Revenues
Revenues	105	136	333	338
Industrial | Commercial
Revenues
Revenues	730	830	2,337	2,128
Industrial | U.S. Government
Revenues
Revenues	0	2	12	6
Industrial | Fuel systems and functional components
Revenues
Revenues	382	497	1,319	1,233
Industrial | Specialized vehicles
Revenues
Revenues	348	335	1,030	901
Finance
Revenues
Revenues	11	13	38	42
Finance | United States
Revenues
Revenues	7	7	21	21
Finance | Europe
Revenues
Revenues	0	0	1	1
Finance | Asia and Australia
Revenues
Revenues	1	0	4	1
Finance | Other international
Revenues
Revenues	3	6	12	19
Finance | Commercial
Revenues
Revenues	11	13	38	42
Finance | U.S. Government
Revenues
Revenues	$ 0	$ 0	$ 0	$ 0

Revenues - Remaining Performanc

Revenues - Remaining Performance Obligations (Details) $ in Billions	Oct. 02, 2021USD ($)
Remaining Performance Obligation, Expected Timing of Satisfaction
Remaining performance obligation	$ 9.8
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-03
Remaining Performance Obligation, Expected Timing of Satisfaction
Remaining performance obligation, percent	70.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	15 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	25.00%
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		9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020	Jan. 02, 2021
Contract Assets and Liabilities
Contract assets	$ 624		$ 624		$ 561
Contract liabilities	1,100		1,100		$ 842
Revenue recognized included in contract liabilities	$ 51	$ 44	$ 499	$ 396

Retirement Plans (Details)

Retirement Plans (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020
Pension Benefits
Net periodic benefit cost (credit)
Service cost	$ 29	$ 27	$ 87	$ 79
Interest cost	62	73	188	220
Expected return on plan assets	(143)	(144)	(431)	(431)
Amortization of net actuarial loss	39	47	116	139
Amortization of prior service cost	4	3	10	9
Net periodic benefit cost (credit)	(9)	6	(30)	16
Pension Benefits | United States
Net periodic benefit cost (credit)
Defined contribution component	2	2	8	8
Postretirement Benefits Other Than Pensions
Net periodic benefit cost (credit)
Service cost	1	0	2	2
Interest cost	1	2	4	6
Amortization of net actuarial loss	(1)	(1)	(2)	(1)
Amortization of prior service cost	(2)	(1)	(4)	(4)
Net periodic benefit cost (credit)	$ (1)	$ 0	$ 0	$ 3

Special Charges - Special Charg

Special Charges - Special Charges by Segment (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		18 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021
Special Charges
Restructuring charges			$ 15
Asset and Other Asset Impairments	$ 0	$ 0	0	$ 39
Special charges	10	7	20	124
Severance Costs
Special Charges
Restructuring charges			8
Contract Termination and Other
Special Charges
Restructuring charges			7
2020 COVID-19 Restructuring Plan
Special Charges
Asset and Other Asset Impairments	6	2	11	17	$ 33
Special charges	10	7	20	85	128
2020 COVID-19 Restructuring Plan | Severance Costs
Special Charges
Restructuring charges	3	5	3	56
2020 COVID-19 Restructuring Plan | Contract Termination and Other
Special Charges
Restructuring charges	1	0	6	12
Corporate
Special Charges
Asset and Other Asset Impairments		0		0
Special charges		2		4
Corporate | 2020 COVID-19 Restructuring Plan
Special Charges
Asset and Other Asset Impairments		0		0
Special charges		2		4	4
Corporate | 2020 COVID-19 Restructuring Plan | Severance Costs
Special Charges
Restructuring charges		2		4
Corporate | 2020 COVID-19 Restructuring Plan | Contract Termination and Other
Special Charges
Restructuring charges		0		0
Industrial | Operating Segment
Special Charges
Asset and Other Asset Impairments	0	0	0	7
Special charges	10	5	20	20
Industrial | Operating Segment | 2020 COVID-19 Restructuring Plan
Special Charges
Asset and Other Asset Impairments	6	2	11	2
Special charges	10	5	20	13	54
Industrial | Operating Segment | 2020 COVID-19 Restructuring Plan | Severance Costs
Special Charges
Restructuring charges	3	3	3	11
Industrial | Operating Segment | 2020 COVID-19 Restructuring Plan | Contract Termination and Other
Special Charges
Restructuring charges	$ 1	$ 0	$ 6	0
Textron Aviation | Operating Segment
Special Charges
Asset and Other Asset Impairments				32
Special charges				60
Textron Aviation | Operating Segment | 2020 COVID-19 Restructuring Plan
Special Charges
Asset and Other Asset Impairments				1
Special charges				28	33
Textron Aviation | Operating Segment | 2020 COVID-19 Restructuring Plan | Severance Costs
Special Charges
Restructuring charges				27
Textron Aviation | Operating Segment | 2020 COVID-19 Restructuring Plan | Contract Termination and Other
Special Charges
Restructuring charges				0
Textron Systems | Operating Segment
Special Charges
Asset and Other Asset Impairments				0
Special charges				40
Textron Systems | Operating Segment | 2020 COVID-19 Restructuring Plan
Special Charges
Asset and Other Asset Impairments				14
Special charges				40	$ 37
Textron Systems | Operating Segment | 2020 COVID-19 Restructuring Plan | Severance Costs
Special Charges
Restructuring charges				14
Textron Systems | Operating Segment | 2020 COVID-19 Restructuring Plan | Contract Termination and Other
Special Charges
Restructuring charges				$ 12

Special Charges - 2020 Covid-19

Special Charges - 2020 Covid-19 Restructuring Plan (Details) $ in Millions	3 Months Ended			9 Months Ended		18 Months Ended
	Oct. 02, 2021USD ($)	Oct. 03, 2020USD ($)	Jul. 04, 2020USD ($)	Oct. 02, 2021USD ($)	Oct. 03, 2020USD ($)	Oct. 02, 2021USD ($)employee
2020 Restructuring Plan
Special charges	$ 10	$ 7		$ 20	$ 124
Asset and Other Asset Impairments	0	0		0	39
Corporate
2020 Restructuring Plan
Special charges		2			4
Asset and Other Asset Impairments		0			0
Reconciling Items
2020 Restructuring Plan
Special charges	10	7		20	124
TRU inventory valuation charge	0	0	$ 55	0	55
Industrial | Operating Segment
2020 Restructuring Plan
Special charges	10	5		20	20
Asset and Other Asset Impairments	0	0		0	7
Textron Systems | Operating Segment
2020 Restructuring Plan
Special charges					40
Asset and Other Asset Impairments					0
Textron Aviation | Operating Segment
2020 Restructuring Plan
Special charges					60
Asset and Other Asset Impairments					32
2020 COVID-19 Restructuring Plan
2020 Restructuring Plan
Special charges	10	7		20	85	$ 128
Number of positions eliminated | employee						2,800
Asset and Other Asset Impairments	6	2		11	17	$ 33
2020 COVID-19 Restructuring Plan | Minimum
2020 Restructuring Plan
Total expected restructuring plan cost	5			5		5
2020 COVID-19 Restructuring Plan | Maximum
2020 Restructuring Plan
Total expected restructuring plan cost	10			10		10
2020 COVID-19 Restructuring Plan | Corporate
2020 Restructuring Plan
Special charges		2			4	4
Asset and Other Asset Impairments		0			0
2020 COVID-19 Restructuring Plan | Industrial | Operating Segment
2020 Restructuring Plan
Special charges	10	5		20	13	54
Asset and Other Asset Impairments	$ 6	$ 2		$ 11	2
2020 COVID-19 Restructuring Plan | Textron Systems | Operating Segment
2020 Restructuring Plan
Special charges					40	37
Asset and Other Asset Impairments					14
2020 COVID-19 Restructuring Plan | Textron Aviation | Operating Segment
2020 Restructuring Plan
Special charges					28	33
Asset and Other Asset Impairments					$ 1
2020 COVID-19 Restructuring Plan | Severance Costs
2020 Restructuring Plan
Restructuring costs						76
2020 COVID-19 Restructuring Plan | Contract Termination and Other
2020 Restructuring Plan
Restructuring costs						$ 19

Special Charges - First Quarter

Special Charges - First Quarter 2020 (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Apr. 04, 2020	Oct. 02, 2021	Oct. 03, 2020
Special Charges
Asset and Other Asset Impairments	$ 0	$ 0		$ 0	$ 39
Beechcraft and King Air trade name intangible assets
Special Charges
Impairment charge			$ 32
Textron Aviation and Industrial segments
Special Charges
Asset and Other Asset Impairments			$ 39

Special Charges - Restructuring

Special Charges - Restructuring Reserve (Details) $ in Millions	9 Months Ended
	Oct. 02, 2021USD ($)
Restructuring Reserve [Roll Forward]
Beginning balance	$ 52
Provision for 2020 COVID-19 restructuring plan	15
Cash paid	(28)
Reversals	(6)
Foreign currency translation	(1)
Ending balance	32
Severance Costs
Restructuring Reserve [Roll Forward]
Beginning balance	43
Provision for 2020 COVID-19 restructuring plan	8
Cash paid	(21)
Reversals	(5)
Foreign currency translation	(1)
Ending balance	24
Contract Termination and Other
Restructuring Reserve [Roll Forward]
Beginning balance	9
Provision for 2020 COVID-19 restructuring plan	7
Cash paid	(7)
Reversals	(1)
Foreign currency translation	0
Ending balance	$ 8

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2021	Oct. 03, 2020	Oct. 02, 2021	Oct. 03, 2020
Income Tax Disclosure [Abstract]
Effective income tax rate	15.10%	0.90%	13.70%	(9.00%)
U.S. federal statutory income tax rate			21.00%	21.00%
Tax benefit recognized for additional research and development credits			$ 12
Tax benefit recognized upon release of valuation allowance				$ 14