Textron (TXT) 10-Q 27 Apr 23 2023 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Apr. 01, 2023	Apr. 14, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Apr. 01, 2023
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		201,679,524
Entity Central Index Key	0000217346
Current Fiscal Year End Date	--12-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Revenues
Total revenues	$ 3,024	$ 3,001
Costs, expenses and other
Selling and administrative expense	305	305
Interest expense, net	20	32
Non-service components of pension and postretirement income, net	(59)	(60)
Total costs, expenses and other	2,797	2,769
Income before income taxes	227	232
Income tax expense	36	39
Net income	$ 191	$ 193
Earnings per share
Basic (in dollars per share)	$ 0.93	$ 0.89
Diluted (in dollars per share)	$ 0.92	$ 0.88
Manufacturing group
Costs, expenses and other
Net income	$ 185	$ 185
Finance group
Revenues
Total revenues	12	16
Costs, expenses and other
Net income	6	8
Product
Costs, expenses and other
Cost of products/services sold	2,176	2,069
Product | Manufacturing group
Revenues
Total revenues	2,550	2,448
Service
Costs, expenses and other
Cost of products/services sold	355	423
Service | Manufacturing group
Revenues
Total revenues	$ 462	$ 537

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 191	$ 193
Other comprehensive income, net of tax
Pension and postretirement benefits adjustments, net of reclassifications	0	17
Foreign currency translation adjustments	28	(14)
Deferred gains (losses) on hedge contracts, net of reclassifications	(2)	7
Other comprehensive income	26	10
Comprehensive income	$ 217	$ 203

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) shares in Thousands, $ in Millions	Apr. 01, 2023	Dec. 31, 2022
Assets
Inventories	$ 3,934	$ 3,550
Finance receivables, net	555	563
Total assets	16,393	16,293
Liabilities
Total liabilities	9,385	9,180
Shareholders’ equity
Common stock	26	26
Capital surplus	1,942	1,880
Treasury stock	(464)	(84)
Retained earnings	6,090	5,903
Accumulated other comprehensive loss	(586)	(612)
Total shareholders’ equity	7,008	7,113
Total liabilities and shareholders’ equity	$ 16,393	$ 16,293
Common shares outstanding (in shares)	201,980	206,161
Manufacturing group
Assets
Cash and equivalents	$ 1,719	$ 1,963
Accounts receivable, net	928	855
Inventories	3,934	3,550
Other current assets	949	1,033
Total current assets	7,530	7,401
Property, plant and equipment, less accumulated depreciation and amortization of $5,168 and $5,084, respectively	2,505	2,523
Goodwill	2,289	2,283
Other assets	3,416	3,422
Total assets	15,740	15,629
Liabilities
Current portion of long-term debt	357	7
Accounts payable	1,281	1,018
Other current liabilities	2,651	2,645
Total current liabilities	4,289	3,670
Other liabilities	1,829	1,879
Long-term debt	2,826	3,175
Total liabilities	8,944	8,724
Finance group
Assets
Cash and equivalents	80	72
Finance receivables, net	555	563
Other assets	18	29
Total assets	653	664
Liabilities
Other liabilities	74	81
Debt	367	375
Total liabilities	$ 441	$ 456

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions	Apr. 01, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accumulated depreciation and amortization	$ 5,168	$ 5,084

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Cash flows from operating activities
Net income	$ 191	$ 193
Non-cash items:
Depreciation and amortization	92	93
Deferred income taxes	(32)	(52)
Other, net	39	36
Changes in assets and liabilities:
Accounts receivable, net	(69)	37
Inventories	(380)	(176)
Other assets	128	(4)
Accounts payable	261	38
Other liabilities	(74)	26
Income taxes, net	50	71
Pension, net	(51)	(41)
Captive finance receivables, net	6	18
Other operating activities, net	2	2
Net cash provided by (used in) operating activities	163	241
Cash flows from investing activities
Capital expenditures	(62)	(48)
Net proceeds from corporate-owned life insurance policies	20	2
Proceeds from sale of property, plant and equipment	0	18
Finance receivables repaid	12	13
Other investing activities, net	1	43
Net cash provided by (used in) investing activities	(29)	28
Cash flows from financing activities
Principal payments on long-term debt and nonrecourse debt	(17)	(121)
Purchases of Textron common stock	(377)	(157)
Dividends paid	(4)	(5)
Proceeds from options exercised	27	28
Other financing activities, net	(5)	(3)
Net cash used in financing activities	(376)	(258)
Effect of exchange rate changes on cash and equivalents	6	(2)
Net increase (decrease) in cash and equivalents	(236)	9
Cash and equivalents at beginning of period	2,035	2,117
Cash and equivalents at end of period	$ 1,799	$ 2,126

Consolidated Statements of Ca_2

Consolidated Statements of Cash Flows (Unaudited) - Manufacturing Group and Finance Group - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Cash flows from operating activities
Net income	$ 191	$ 193
Non-cash items:
Depreciation and amortization	92	93
Deferred income taxes	(32)	(52)
Other, net	39	36
Changes in assets and liabilities:
Accounts receivable, net	(69)	37
Inventories	(380)	(176)
Other assets	128	(4)
Accounts payable	261	38
Other liabilities	(74)	26
Income taxes, net	50	71
Pension, net	(51)	(41)
Other operating activities, net	2	2
Net cash provided by (used in) operating activities	163	241
Cash flows from investing activities
Capital expenditures	(62)	(48)
Net proceeds from corporate-owned life insurance policies	20	2
Proceeds from sale of property, plant and equipment	0	18
Finance receivables repaid	12	13
Other investing activities, net	1	43
Net cash provided by (used in) investing activities	(29)	28
Cash flows from financing activities
Principal payments on long-term debt and nonrecourse debt	(17)	(121)
Purchases of Textron common stock	(377)	(157)
Dividends paid	(4)	(5)
Proceeds from options exercised	27	28
Other financing activities, net	(5)	(3)
Net cash used in financing activities	(376)	(258)
Effect of exchange rate changes on cash and equivalents	6	(2)
Net increase (decrease) in cash and equivalents	(236)	9
Cash and equivalents at beginning of period	2,035	2,117
Cash and equivalents at end of period	1,799	2,126
Manufacturing group
Cash flows from operating activities
Net income	185	185
Non-cash items:
Depreciation and amortization	92	93
Deferred income taxes	(32)	(45)
Other, net	41	37
Changes in assets and liabilities:
Accounts receivable, net	(69)	37
Inventories	(380)	(176)
Other assets	121	(4)
Accounts payable	261	38
Other liabilities	(65)	37
Income taxes, net	48	62
Pension, net	(51)	(41)
Other operating activities, net	2	2
Net cash provided by (used in) operating activities	153	225
Cash flows from investing activities
Capital expenditures	(62)	(48)
Net proceeds from corporate-owned life insurance policies	20	2
Proceeds from sale of property, plant and equipment	0	18
Finance receivables repaid	0	0
Finance receivables originated	0	0
Other investing activities, net	0	0
Net cash provided by (used in) investing activities	(42)	(28)
Cash flows from financing activities
Principal payments on long-term debt and nonrecourse debt	(2)	(2)
Purchases of Textron common stock	(377)	(157)
Dividends paid	(4)	(5)
Proceeds from options exercised	27	28
Other financing activities, net	(5)	(3)
Net cash used in financing activities	(361)	(139)
Effect of exchange rate changes on cash and equivalents	6	(2)
Net increase (decrease) in cash and equivalents	(244)	56
Cash and equivalents at beginning of period	1,963	1,922
Cash and equivalents at end of period	1,719	1,978
Finance group
Cash flows from operating activities
Net income	6	8
Non-cash items:
Depreciation and amortization	0	0
Deferred income taxes	0	(7)
Other, net	(2)	(1)
Changes in assets and liabilities:
Accounts receivable, net	0	0
Inventories	0	0
Other assets	7	0
Accounts payable	0	0
Other liabilities	(9)	(11)
Income taxes, net	2	9
Pension, net	0	0
Other operating activities, net	0	0
Net cash provided by (used in) operating activities	4	(2)
Cash flows from investing activities
Capital expenditures	0	0
Net proceeds from corporate-owned life insurance policies	0	0
Proceeds from sale of property, plant and equipment	0	0
Finance receivables repaid	35	40
Finance receivables originated	(17)	(9)
Other investing activities, net	1	43
Net cash provided by (used in) investing activities	19	74
Cash flows from financing activities
Principal payments on long-term debt and nonrecourse debt	(15)	(119)
Purchases of Textron common stock	0	0
Dividends paid	0	0
Proceeds from options exercised	0	0
Other financing activities, net	0	0
Net cash used in financing activities	(15)	(119)
Effect of exchange rate changes on cash and equivalents	0	0
Net increase (decrease) in cash and equivalents	8	(47)
Cash and equivalents at beginning of period	72	195
Cash and equivalents at end of period	$ 80	$ 148

Basis of Presentation

Basis of Presentation	3 Months Ended
	Apr. 01, 2023
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 December 31, 2022. In the opinion of management, the interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair presentation of our consolidated financial position, results of operations and cash flows for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Our financings are conducted through two separate borrowing groups. The Manufacturing group consists of Textron consolidated with its majority-owned subsidiaries that operate in the Textron Aviation, Bell, Textron Systems, Industrial and Textron eAviation 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.

Accounts Receivable and Finance

Accounts Receivable and Finance Receivables	3 Months Ended
	Apr. 01, 2023
Receivables [Abstract]
Accounts Receivable and Finance Receivables	Accounts Receivable and Finance Receivables Accounts Receivable Accounts receivable is composed of the following: (In millions) April 1, December 31, Commercial $ 824 $ 755 U.S. Government contracts 126 124 950 879 Allowance for credit losses (22) (24) Total accounts receivable, net $ 928 $ 855 Finance Receivables Finance receivables are presented in the following table: (In millions) April 1, December 31, Finance receivables $ 577 $ 587 Allowance for credit losses (22) (24) Total finance receivables, net $ 555 $ 563 Finance Receivable Portfolio Quality We internally assess the quality of our finance receivables based on a number of key credit quality indicators and statistics such as delinquency, loan balance to estimated collateral value and the financial strength of individual borrowers and guarantors. Because many of these indicators are difficult to apply across an entire class of receivables, we evaluate individual loans on a quarterly basis and classify these loans into three categories based on the key credit quality indicators for the individual loan. These three categories are performing, watchlist and nonaccrual. We classify finance receivables as nonaccrual if credit quality indicators suggest full collection of principal and interest is doubtful. In addition, we automatically classify accounts as nonaccrual once they are contractually delinquent by more than three months unless collection of principal and interest is not doubtful. Accounts are classified as watchlist when credit quality indicators have deteriorated as compared with typical underwriting criteria, and we believe collection of full principal and interest is probable but not certain. All other finance receivables that do not meet the watchlist or nonaccrual categories are classified as performing. We measure delinquency based on the contractual payment terms of our finance receivables. In determining the delinquency aging category of an account, any/all principal and interest received is applied to the most past-due principal and/or interest amounts due. If a significant portion of the contractually due payment is delinquent, the entire finance receivable balance is reported in accordance with the most past-due delinquency aging category. Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows: (Dollars in millions) April 1, December 31, Performing $ 512 $ 515 Watchlist 26 26 Nonaccrual 39 46 Nonaccrual as a percentage of finance receivables 6.76% 7.84% Current and less than 31 days past due $ 570 $ 579 31-60 days past due 5 7 61-90 days past due 2 — Over 90 days past due — 1 60+ days contractual delinquency as a percentage of finance receivables 0.35% 0.17% At April 1, 2023, 33% of our performing finance receivables were originated since the beginning of 2021 and 30% were originated from 2018 to 2020. For finance receivables categorized as watchlist 94% were originated since the beginning of 2020 and for nonaccrual, 65% were originated from 2018 to 2020. On a quarterly basis, we evaluate individual larger balance accounts for impairment. A finance receivable is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement based on our review of the credit quality indicators described above. Impaired finance receivables include both nonaccrual accounts and accounts for which full collection of principal and interest remains probable, but the account’s original terms have been, or are expected to be, significantly modified. If the modification specifies an interest rate equal to or greater than a market rate for a finance receivable with comparable risk, the account is not considered impaired in years subsequent to the modification. A summary of finance receivables and the allowance for credit losses, based on the results of our impairment evaluation, is provided below. The finance receivables included in this table specifically exclude leveraged leases in accordance with U.S. generally accepted accounting principles. (In millions) April 1, December 31, Finance receivables evaluated collectively $ 451 $ 450 Finance receivables evaluated individually 39 46 Allowance for credit losses based on collective evaluation 19 21 Allowance for credit losses based on individual evaluation 3 3 Impaired finance receivables with specific allowance for credit losses $ 12 $ 15 Impaired finance receivables with no specific allowance for credit losses 27 31 Unpaid principal balance of impaired finance receivables 53 60 Allowance for credit losses on impaired finance receivables 3 3 Average recorded investment of impaired finance receivables 43 67

Inventories

Inventories	3 Months Ended
	Apr. 01, 2023
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories are composed of the following: (In millions) April 1, December 31, Finished goods $ 1,059 $ 991 Work in process 1,753 1,540 Raw materials and components 1,122 1,019 Total inventories $ 3,934 $ 3,550

Warranty Liability

Warranty Liability	3 Months Ended
	Apr. 01, 2023
Payables and Accruals [Abstract]
Warranty Liability	Warranty Liability Changes in our warranty liability are as follows: Three Months Ended (In millions) April 1, April 2, Beginning of period $ 149 $ 127 Provision 15 16 Settlements (18) (19) Adjustments* 3 6 End of period $ 149 $ 130 * Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.

Leases

Leases	3 Months Ended
	Apr. 01, 2023
Leases [Abstract]
Leases	Leases We primarily lease certain manufacturing plants, offices, warehouses, training and service centers at various locations worldwide through operating leases. Our operating leases have remaining lease terms up to 26 years, which include options to extend the lease term for periods up to 25 years when it is reasonably certain the option will be exercised. Operating lease cost totaled $17 million in both the first quarter of 2023 and 2022. Variable and short-term lease costs were not significant. Cash paid for operating leases totaled $17 million in both the first quarter of 2023 and 2022, and is classified in cash flows from operating activities. Noncash transactions totaled $15 million and $7 million in the first quarter of 2023 and 2022, respectively, reflecting the recognition of operating lease assets and liabilities for new or extended leases. Balance sheet and other information related to our operating leases is as follows: (Dollars in millions) April 1, December 31, Other assets $ 375 $ 372 Other current liabilities 55 54 Other liabilities 328 326 Weighted-average remaining lease term (in years) 10.4 10.4 Weighted-average discount rate 4.29% 4.14%

Derivative Instruments and Fair

Derivative Instruments and Fair Value Measurements	3 Months Ended
	Apr. 01, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Fair Value Measurements	Derivative Instruments and Fair Value Measurements We measure fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We prioritize the assumptions that market participants would use in pricing the asset or liability into a three-tier fair value hierarchy. This fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs in which little or no market data exist, requiring companies to develop their own assumptions. Observable inputs that do not meet the criteria of Level 1, which include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets and liabilities in markets that are not active, are categorized as Level 2. Level 3 inputs are those that reflect our estimates about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are utilized only to the extent that observable inputs are not available or cost effective to obtain. Assets and Liabilities Recorded at Fair Value on a Recurring Basis We manufacture and sell our products in a number of countries throughout the world, and, therefore, we are exposed to movements in foreign currency exchange rates. We primarily utilize foreign currency exchange contracts with maturities of no more than three years to manage this volatility. These contracts qualify as cash flow hedges and are intended to offset the effect of exchange rate fluctuations on forecasted sales, inventory purchases and overhead expenses. Net gains and losses recognized in earnings and Accumulated other comprehensive loss on cash flow hedges, including gains and losses related to hedge ineffectiveness, were not significant in the periods presented. Our foreign currency exchange contracts are measured at fair value using the market method valuation technique. The inputs to this technique utilize current foreign currency exchange forward market rates published by third-party leading financial news and data providers. These are observable data that represent the rates that the financial institution uses for contracts entered into at that date; however, they are not based on actual transactions, so they are classified as Level 2. At April 1, 2023 and December 31, 2022, we had foreign currency exchange contracts with notional amounts upon which the contracts were based of $623 million and $354 million, respectively. At April 1, 2023, the fair value amounts of our foreign currency exchange contracts were a $2 million asset and a $11 million liability. At December 31, 2022, the fair value amount of our foreign currency exchange contracts was an $11 million liability. Our Finance group enters into interest rate swap agreements to mitigate certain exposures to fluctuations in interest rates. By using these contracts, we are able to convert floating-rate cash flows to fixed-rate cash flows. These agreements are designated as cash flow hedges. At April 1, 2023 and December 31, 2022, we had a swap agreement for a notional amount of $272 million that matures in August 2023, and a swap agreement for a notional amount of $25 million that matures in June 2025. The fair value of these swap agreements was a $5 million asset at April 1, 2023 and an $8 million asset at December 31, 2022. The fair value of these swap agreements is determined using values published by third-party leading financial news and data providers. These values are observable data that represent the value that financial institutions use for contracts entered into at that date, but are not based on actual transactions, so they are classified as Level 2. Assets and Liabilities Not Recorded at Fair Value The carrying value and estimated fair value of our financial instruments that are not reflected in the financial statements at fair value are as follows: April 1, 2023 December 31, 2022 Carrying Estimated Carrying Estimated (In millions) Value Fair Value Value Fair Value Manufacturing group Debt, excluding leases $ (3,175) $ (2,960) $ (3,175) $ (2,872) Finance group Finance receivables, excluding leases 388 381 390 369 Debt (367) (298) (375) (294)

Shareholders' Equity

Shareholders' Equity	3 Months Ended
	Apr. 01, 2023
Equity [Abstract]
Shareholders' Equity	Shareholders’ Equity A reconciliation of Shareholders’ equity is presented below: (In millions) Common Capital Treasury Retained Accumulated Total Three months ended April 1, 2023 Beginning of period $ 26 $ 1,880 $ (84) $ 5,903 $ (612) $ 7,113 Net income — — — 191 — 191 Other comprehensive income — — — — 26 26 Share-based compensation activity — 62 — — — 62 Dividends declared — — — (4) — (4) Purchases of common stock, including excise tax* — — (380) — — (380) End of period $ 26 $ 1,942 $ (464) $ 6,090 $ (586) $ 7,008 Three months ended April 2, 2022 Beginning of period $ 28 $ 1,863 $ (157) $ 5,870 $ (789) $ 6,815 Net income — — — 193 — 193 Other comprehensive income — — — — 10 10 Share-based compensation activity — 61 — — — 61 Dividends declared — — — (5) — (5) Purchases of common stock — — (157) — — (157) End of period $ 28 $ 1,924 $ (314) $ 6,058 $ (779) $ 6,917 *Includes $3 million accrued for the excise tax imposed on common share repurchases beginning on January 1, 2023 as part of the Inflation Reduction Act. Dividends per share of common stock were $0.02 for both the first quarter of 2023 and 2022. Earnings Per Share We calculate basic and diluted earnings per share (EPS) based on net income, which approximates income available to common shareholders for each period. Basic EPS is calculated using the two-class method, which includes the weighted-average number of common shares outstanding during the period and restricted stock units to be paid in stock that are deemed participating securities as they provide nonforfeitable rights to dividends. Diluted EPS considers the dilutive effect of all potential future common stock, including stock options. The weighted-average shares outstanding for basic and diluted EPS are as follows: Three Months Ended (In thousands) April 1, April 2, Basic weighted-average shares outstanding 204,835 217,010 Dilutive effect of stock options 2,176 2,597 Diluted weighted-average shares outstanding 207,011 219,607 Stock options to purchase 2.0 million and 1.0 million shares of common stock were excluded from the calculation of diluted weighted-average shares outstanding for the first quarter of 2023 and 2022, 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 December 31, 2022 $ (516) $ (94) $ (2) $ (612) Other comprehensive income before reclassifications — 28 (3) 25 Reclassified from Accumulated other comprehensive loss — — 1 1 Balance at April 1, 2023 $ (516) $ (66) $ (4) $ (586) Balance at January 1, 2022 $ (799) $ 9 $ 1 $ (789) Other comprehensive loss before reclassifications — (14) 7 (7) Reclassified from Accumulated other comprehensive loss 17 — — 17 Balance at April 2, 2022 $ (782) $ (5) $ 8 $ (779) The before and after-tax components of Other comprehensive income are presented below: April 1, 2023 April 2, 2022 (In millions) Pre-Tax Tax After-tax Pre-Tax Tax After-tax Three Months Ended Pension and postretirement benefits adjustments: Amortization of net actuarial (gain) loss* $ (2) $ 1 $ (1) $ 21 $ (5) $ 16 Amortization of prior service cost* 2 (1) 1 2 (1) 1 Pension and postretirement benefits adjustments, net — — — 23 (6) 17 Foreign currency translation adjustments 28 — 28 (14) — (14) Deferred gains (losses) on hedge contracts: Current deferrals (4) 1 (3) 10 (3) 7 Reclassification adjustments 2 (1) 1 — — — Deferred gains (losses) on hedge contracts, net (2) — (2) 10 (3) 7 Total $ 26 $ — $ 26 $ 19 $ (9) $ 10 *These components of other comprehensive income are included in the computation of net periodic pension cost (income). See Note 15 of our 2022 Annual Report on Form 10-K for additional information.

Segment Information

Segment Information	3 Months Ended
	Apr. 01, 2023
Segment Reporting [Abstract]
Segment Information	Segment Information We operate in, and reported financial information for, the following six business segments: Textron Aviation, Bell, Textron Systems, Industrial, Textron eAviation and Finance. Segment profit is an important measure used for evaluating performance and for decision-making purposes. Beginning in 2023, we changed how we measure our manufacturing segment operating results to exclude the non-service components of pension and postretirement income, net; LIFO inventory provision; and intangible asset amortization. This measure also continues to exclude interest expense, net for Manufacturing group; certain corporate expenses; gains/losses on major business dispositions; and special charges. The prior period has been recast to conform to this presentation. The measurement for the Finance segment includes interest income and expense along with intercompany interest income and expense. Our revenues by segment, along with a reconciliation of segment profit to income before income taxes, are included in the table below: Three Months Ended (In millions) April 1, April 2, Revenues Textron Aviation $ 1,149 $ 1,040 Bell 621 834 Textron Systems 306 273 Industrial 932 838 Textron eAviation 4 — Finance 12 16 Total revenues $ 3,024 $ 3,001 Segment Profit Textron Aviation $ 125 $ 110 Bell 60 91 Textron Systems 34 28 Industrial 41 39 Textron eAviation (9) — Finance 8 9 Segment profit 259 277 Corporate expenses and other, net (39) (52) Interest expense, net for Manufacturing group (17) (28) LIFO inventory provision (25) (12) Intangible asset amortization (10) (13) Non-service components of pension and postretirement income, net 59 60 Income before income taxes $ 227 $ 232

Revenues

Revenues	3 Months Ended
	Apr. 01, 2023
Revenue from Contract with Customer [Abstract]
Revenues	Revenues Disaggregation of Revenues Our revenues disaggregated by major product type are presented below: Three Months Ended (In millions) April 1, April 2, Aircraft $ 718 $ 646 Aftermarket parts and services 431 394 Textron Aviation 1,149 1,040 Military aircraft and support programs 385 597 Commercial helicopters, parts and services 236 237 Bell 621 834 Textron Systems 306 273 Fuel systems and functional components 488 464 Specialized vehicles 444 374 Industrial 932 838 Textron eAviation 4 — Finance 12 16 Total revenues $ 3,024 $ 3,001 Our revenues for our segments by customer type and geographic location are presented below: (In millions) Textron Bell Textron Industrial Textron eAviation Finance Total Three months ended April 1, 2023 Customer type: Commercial $ 1,107 $ 232 $ 74 $ 927 $ 4 $ 12 $ 2,356 U.S. Government 42 389 232 5 — — 668 Total revenues $ 1,149 $ 621 $ 306 $ 932 $ 4 $ 12 $ 3,024 Geographic location: United States $ 836 $ 460 $ 275 $ 494 $ 1 $ 4 $ 2,070 Europe 66 19 14 204 2 — 305 Other international 247 142 17 234 1 8 649 Total revenues $ 1,149 $ 621 $ 306 $ 932 $ 4 $ 12 $ 3,024 Three months ended April 2, 2022 Customer type: Commercial $ 1,021 $ 234 $ 65 $ 835 $ — $ 16 $ 2,171 U.S. Government 19 600 208 3 — — 830 Total revenues $ 1,040 $ 834 $ 273 $ 838 $ — $ 16 $ 3,001 Geographic location: United States $ 732 $ 670 $ 246 $ 426 $ — $ 5 $ 2,079 Europe 119 28 8 190 — 1 346 Other international 189 136 19 222 — 10 576 Total revenues $ 1,040 $ 834 $ 273 $ 838 $ — $ 16 $ 3,001 Remaining Performance Obligations Our remaining performance obligations, which is the equivalent of our backlog, represent the expected transaction price allocated to our contracts that we expect to recognize as revenues in future periods when we perform under the contracts. These remaining obligations exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery, Indefinite Quantity contracts. At April 1, 2023, we had $13.1 billion in remaining performance obligations of which we expect to recognize revenues of approximately 85% through 2024, an additional 12% through 2026, and the balance thereafter.

Share-Based Compensation

Share-Based Compensation	3 Months Ended
	Apr. 01, 2023
Share-Based Payment Arrangement [Abstract]
Share-Based Compensation	Share-Based Compensation Under our share-based compensation plan, we have authorization to provide awards to selected employees and non-employee directors in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, performance stock, performance share units and other awards. Compensation expense included in net income for our share-based compensation plan is as follows: Three Months Ended (In millions) April 1, April 2, Compensation expense $ 45 $ 34 Income tax benefit (11) (8) Total compensation expense included in net income $ 34 $ 26 Compensation expense included stock option expense of $14 million and $12 million in the first quarter of 2023 and 2022, respectively. We typically grant stock appreciation rights to selected non-U.S. employees. At April 1, 2023, outstanding stock appreciation rights totaled 617,074 with a weighted-average exercise price of $54.62 and a weighted-average remaining contractual life of 6.4 years; these units had an intrinsic value of $10 million, compared to $14 million at April 2, 2022. Stock Options Options to purchase our shares have a maximum term of ten years and generally vest ratably over a three-year period. Stock option compensation cost is calculated under the fair value approach using the Black-Scholes option-pricing model to determine the fair value of options granted on the date of grant. The expected volatility used in this model is based on historical volatilities and implied volatilities from traded options on our common stock. The expected term is based on historical option exercise data, which is adjusted to reflect any anticipated changes in expected behavior. We grant options annually on the first day of March. The assumptions used in our option-pricing model for these grants and the weighted-average fair value for these options are as follows: March 1, 2023 March 1, 2022 Fair value of options at grant date $ 23.83 $ 19.95 Dividend yield 0.1% 0.1% Expected volatility 29.4% 29.2% Risk-free interest rate 4.2% 1.9% Expected term (in years) 4.8 4.8 The stock option activity during the first quarter of 2023 is provided below: (Options in thousands) Number of Weighted- Outstanding at December 31, 2022 8,310 $ 50.25 Granted 1,026 73.19 Exercised (630) (42.84) Forfeited or expired (60) (58.90) Outstanding at April 1, 2023 8,646 $ 53.45 Exercisable at April 1, 2023 6,263 $ 48.56 At April 1, 2023, our outstanding options had an aggregate intrinsic value of $152 million and a weighted-average remaining contractual life of 6.2 years. Our exercisable options had an aggregate intrinsic value of $138 million and a weighted-average remaining contractual life of 5.1 years at April 1, 2023. The total intrinsic value of options exercised during the first quarter of 2023 and 2022 was $19 million and $23 million, respectively. Restricted Stock Units We issue restricted stock units that include the right to receive dividend equivalents and are settled in both cash and stock. Beginning in 2020, new grants of restricted stock units will vest in full on the third anniversary of the grant date. Restricted stock units granted prior to 2020 vest one-third each in the third, fourth and fifth year following the year of the grant. Compensation cost is determined using the fair value of these units based on the trading price of our common stock. For units payable in stock, we use the trading price on the grant date, while units payable in cash are remeasured using the price at each reporting period date. The activity for restricted stock units payable in both stock and cash during the first quarter of 2023 is provided below: Units Payable in Stock Units Payable in Cash (Shares/Units in thousands) Number of Weighted- Number of Weighted- Outstanding at December 31, 2022, nonvested 525 $ 52.99 1,086 $ 53.26 Granted 103 73.17 245 73.18 Vested (218) (46.66) (463) (45.92) Forfeited — — (32) (56.94) Outstanding at April 1, 2023, nonvested 410 $ 61.41 836 $ 63.02 The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows: Three Months Ended (In millions) April 1, April 2, Fair value of awards vested $ 44 $ 24 Cash paid 34 17 Performance Share Units The activity for our performance share units during the first quarter of 2023 is as follows: (Units in thousands) Number of Weighted- Outstanding at December 31, 2022, nonvested 427 $ 59.51 Granted 209 73.19 Outstanding at April 1, 2023, nonvested 636 $ 64.01 Cash paid under these awards totaled $27 million and $15 million in the first quarter of 2023 and 2022, respectively.

Retirement Plans

Retirement Plans	3 Months Ended
	Apr. 01, 2023
Retirement Benefits [Abstract]
Retirement Plans	Retirement PlansWe provide defined benefit pension plans and other postretirement benefits to eligible employees. The components of net periodic benefit income for these plans are as follows: Three Months Ended (In millions) April 1, April 2, Pension Benefits Service cost $ 17 $ 26 Interest cost 91 69 Expected return on plan assets (152) (153) Amortization of net actuarial loss — 22 Amortization of prior service cost 3 3 Net periodic benefit income* $ (41) $ (33) Postretirement Benefits Other Than Pensions Service cost $ — $ 1 Interest cost 2 1 Amortization of net actuarial gain (2) (1) Amortization of prior service credit (1) (1) Net periodic benefit income $ (1) $ —

Income Taxes

Income Taxes	3 Months Ended
	Apr. 01, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesOur effective tax rate for the first quarter of 2023 and 2022 was 15.9% and 16.8%, respectively. In the first quarter of 2023, 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 and tax deductions for foreign-derived intangible income. In the first quarter of 2022, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the favorable impact of research and development credits.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Apr. 01, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesWe are subject to actual and threatened legal proceedings and other claims arising out of the conduct of our business, including proceedings and claims relating to commercial and financial transactions; government contracts; alleged lack of compliance with applicable laws and regulations; disputes with suppliers, production partners or other third parties; product liability; patent and trademark infringement; employment disputes; and environmental, health and safety matters. Some of these legal proceedings and claims seek damages, fines or penalties in substantial amounts or remediation of environmental contamination. As a government contractor, we are subject to audits, reviews and investigations to determine whether our operations are being conducted in accordance with applicable regulatory requirements. Under federal government procurement regulations, certain claims brought by the U.S. Government could result in our suspension or debarment from U.S. Government contracting for a period of time. On the basis of information presently available, we do not believe that existing proceedings and claims will have a material effect on our financial position or results of operations.

Basis of Presentation (Policies

Basis of Presentation (Policies)	3 Months Ended
	Apr. 01, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Use of Estimates	Use of Estimates We prepare our financial statements in conformity with generally accepted accounting principles, which require us to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Our estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the Consolidated Statements of Operations in the period that they are determined.

Accounts Receivable and Finan_2

Accounts Receivable and Finance Receivables (Tables)	3 Months Ended
	Apr. 01, 2023
Receivables [Abstract]
Accounts Receivable	Accounts receivable is composed of the following: (In millions) April 1, December 31, Commercial $ 824 $ 755 U.S. Government contracts 126 124 950 879 Allowance for credit losses (22) (24) Total accounts receivable, net $ 928 $ 855
Finance Receivables	Finance receivables are presented in the following table: (In millions) April 1, December 31, Finance receivables $ 577 $ 587 Allowance for credit losses (22) (24) Total finance receivables, net $ 555 $ 563
Finance Receivables Categorized Based On Credit Quality Indicators	Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows: (Dollars in millions) April 1, December 31, Performing $ 512 $ 515 Watchlist 26 26 Nonaccrual 39 46 Nonaccrual as a percentage of finance receivables 6.76% 7.84% Current and less than 31 days past due $ 570 $ 579 31-60 days past due 5 7 61-90 days past due 2 — Over 90 days past due — 1 60+ days contractual delinquency as a percentage of finance receivables 0.35% 0.17%
Finance Receivables By Delinquency Aging Category	Finance receivables categorized based on the credit quality indicators and by the delinquency aging category are summarized as follows: (Dollars in millions) April 1, December 31, Performing $ 512 $ 515 Watchlist 26 26 Nonaccrual 39 46 Nonaccrual as a percentage of finance receivables 6.76% 7.84% Current and less than 31 days past due $ 570 $ 579 31-60 days past due 5 7 61-90 days past due 2 — Over 90 days past due — 1 60+ days contractual delinquency as a percentage of finance receivables 0.35% 0.17%
Finance Receivables and Allowance For Credit Losses Based on Impairment Evaluation	A summary of finance receivables and the allowance for credit losses, based on the results of our impairment evaluation, is provided below. The finance receivables included in this table specifically exclude leveraged leases in accordance with U.S. generally accepted accounting principles. (In millions) April 1, December 31, Finance receivables evaluated collectively $ 451 $ 450 Finance receivables evaluated individually 39 46 Allowance for credit losses based on collective evaluation 19 21 Allowance for credit losses based on individual evaluation 3 3 Impaired finance receivables with specific allowance for credit losses $ 12 $ 15 Impaired finance receivables with no specific allowance for credit losses 27 31 Unpaid principal balance of impaired finance receivables 53 60 Allowance for credit losses on impaired finance receivables 3 3 Average recorded investment of impaired finance receivables 43 67

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Apr. 01, 2023
Inventory Disclosure [Abstract]
Inventories	Inventories are composed of the following: (In millions) April 1, December 31, Finished goods $ 1,059 $ 991 Work in process 1,753 1,540 Raw materials and components 1,122 1,019 Total inventories $ 3,934 $ 3,550

Warranty Liability (Tables)

Warranty Liability (Tables)	3 Months Ended
	Apr. 01, 2023
Payables and Accruals [Abstract]
Changes in Warranty Liability	Changes in our warranty liability are as follows: Three Months Ended (In millions) April 1, April 2, Beginning of period $ 149 $ 127 Provision 15 16 Settlements (18) (19) Adjustments* 3 6 End of period $ 149 $ 130 * Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.

Leases (Tables)

Leases (Tables)	3 Months Ended
	Apr. 01, 2023
Leases [Abstract]
Schedule of Balance Sheet and Other Information	Balance sheet and other information related to our operating leases is as follows: (Dollars in millions) April 1, December 31, Other assets $ 375 $ 372 Other current liabilities 55 54 Other liabilities 328 326 Weighted-average remaining lease term (in years) 10.4 10.4 Weighted-average discount rate 4.29% 4.14%

Derivative Instruments and Fa_2

Derivative Instruments and Fair Value Measurements (Tables)	3 Months Ended
	Apr. 01, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Carrying Value and Estimated and Fair Value of Financial Instruments	The carrying value and estimated fair value of our financial instruments that are not reflected in the financial statements at fair value are as follows: April 1, 2023 December 31, 2022 Carrying Estimated Carrying Estimated (In millions) Value Fair Value Value Fair Value Manufacturing group Debt, excluding leases $ (3,175) $ (2,960) $ (3,175) $ (2,872) Finance group Finance receivables, excluding leases 388 381 390 369 Debt (367) (298) (375) (294)

Shareholders' Equity (Tables)

Shareholders' Equity (Tables)	3 Months Ended
	Apr. 01, 2023
Equity [Abstract]
Schedule of Shareholder's Equity	A reconciliation of Shareholders’ equity is presented below: (In millions) Common Capital Treasury Retained Accumulated Total Three months ended April 1, 2023 Beginning of period $ 26 $ 1,880 $ (84) $ 5,903 $ (612) $ 7,113 Net income — — — 191 — 191 Other comprehensive income — — — — 26 26 Share-based compensation activity — 62 — — — 62 Dividends declared — — — (4) — (4) Purchases of common stock, including excise tax* — — (380) — — (380) End of period $ 26 $ 1,942 $ (464) $ 6,090 $ (586) $ 7,008 Three months ended April 2, 2022 Beginning of period $ 28 $ 1,863 $ (157) $ 5,870 $ (789) $ 6,815 Net income — — — 193 — 193 Other comprehensive income — — — — 10 10 Share-based compensation activity — 61 — — — 61 Dividends declared — — — (5) — (5) Purchases of common stock — — (157) — — (157) End of period $ 28 $ 1,924 $ (314) $ 6,058 $ (779) $ 6,917 *Includes $3 million accrued for the excise tax imposed on common share repurchases beginning on January 1, 2023 as part of the Inflation Reduction Act.
Schedule of Weighted-Average Shares Outstanding for Basic and Diluted EPS	The weighted-average shares outstanding for basic and diluted EPS are as follows: Three Months Ended (In thousands) April 1, April 2, Basic weighted-average shares outstanding 204,835 217,010 Dilutive effect of stock options 2,176 2,597 Diluted weighted-average shares outstanding 207,011 219,607
Schedule of Components of Accumulated Other Comprehensive Income (Loss)	The components of Accumulated other comprehensive loss are presented below: (In millions) Pension and Foreign Deferred Accumulated Balance at December 31, 2022 $ (516) $ (94) $ (2) $ (612) Other comprehensive income before reclassifications — 28 (3) 25 Reclassified from Accumulated other comprehensive loss — — 1 1 Balance at April 1, 2023 $ (516) $ (66) $ (4) $ (586) Balance at January 1, 2022 $ (799) $ 9 $ 1 $ (789) Other comprehensive loss before reclassifications — (14) 7 (7) Reclassified from Accumulated other comprehensive loss 17 — — 17 Balance at April 2, 2022 $ (782) $ (5) $ 8 $ (779)
Schedule of Before and After-Tax Components of Other Comprehensive Income (Loss)	The before and after-tax components of Other comprehensive income are presented below: April 1, 2023 April 2, 2022 (In millions) Pre-Tax Tax After-tax Pre-Tax Tax After-tax Three Months Ended Pension and postretirement benefits adjustments: Amortization of net actuarial (gain) loss* $ (2) $ 1 $ (1) $ 21 $ (5) $ 16 Amortization of prior service cost* 2 (1) 1 2 (1) 1 Pension and postretirement benefits adjustments, net — — — 23 (6) 17 Foreign currency translation adjustments 28 — 28 (14) — (14) Deferred gains (losses) on hedge contracts: Current deferrals (4) 1 (3) 10 (3) 7 Reclassification adjustments 2 (1) 1 — — — Deferred gains (losses) on hedge contracts, net (2) — (2) 10 (3) 7 Total $ 26 $ — $ 26 $ 19 $ (9) $ 10 *These components of other comprehensive income are included in the computation of net periodic pension cost (income). See Note 15 of our 2022 Annual Report on Form 10-K for additional information.

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Apr. 01, 2023
Segment Reporting [Abstract]
Revenues by Segment and Reconciliation of Segment Profit Income (Loss) Before Income Taxes	Our revenues by segment, along with a reconciliation of segment profit to income before income taxes, are included in the table below: Three Months Ended (In millions) April 1, April 2, Revenues Textron Aviation $ 1,149 $ 1,040 Bell 621 834 Textron Systems 306 273 Industrial 932 838 Textron eAviation 4 — Finance 12 16 Total revenues $ 3,024 $ 3,001 Segment Profit Textron Aviation $ 125 $ 110 Bell 60 91 Textron Systems 34 28 Industrial 41 39 Textron eAviation (9) — Finance 8 9 Segment profit 259 277 Corporate expenses and other, net (39) (52) Interest expense, net for Manufacturing group (17) (28) LIFO inventory provision (25) (12) Intangible asset amortization (10) (13) Non-service components of pension and postretirement income, net 59 60 Income before income taxes $ 227 $ 232

Revenues (Tables)

Revenues (Tables)	3 Months Ended
	Apr. 01, 2023
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	Our revenues disaggregated by major product type are presented below: Three Months Ended (In millions) April 1, April 2, Aircraft $ 718 $ 646 Aftermarket parts and services 431 394 Textron Aviation 1,149 1,040 Military aircraft and support programs 385 597 Commercial helicopters, parts and services 236 237 Bell 621 834 Textron Systems 306 273 Fuel systems and functional components 488 464 Specialized vehicles 444 374 Industrial 932 838 Textron eAviation 4 — Finance 12 16 Total revenues $ 3,024 $ 3,001 Our revenues for our segments by customer type and geographic location are presented below: (In millions) Textron Bell Textron Industrial Textron eAviation Finance Total Three months ended April 1, 2023 Customer type: Commercial $ 1,107 $ 232 $ 74 $ 927 $ 4 $ 12 $ 2,356 U.S. Government 42 389 232 5 — — 668 Total revenues $ 1,149 $ 621 $ 306 $ 932 $ 4 $ 12 $ 3,024 Geographic location: United States $ 836 $ 460 $ 275 $ 494 $ 1 $ 4 $ 2,070 Europe 66 19 14 204 2 — 305 Other international 247 142 17 234 1 8 649 Total revenues $ 1,149 $ 621 $ 306 $ 932 $ 4 $ 12 $ 3,024 Three months ended April 2, 2022 Customer type: Commercial $ 1,021 $ 234 $ 65 $ 835 $ — $ 16 $ 2,171 U.S. Government 19 600 208 3 — — 830 Total revenues $ 1,040 $ 834 $ 273 $ 838 $ — $ 16 $ 3,001 Geographic location: United States $ 732 $ 670 $ 246 $ 426 $ — $ 5 $ 2,079 Europe 119 28 8 190 — 1 346 Other international 189 136 19 222 — 10 576 Total revenues $ 1,040 $ 834 $ 273 $ 838 $ — $ 16 $ 3,001

Share-Based Compensation (Table

Share-Based Compensation (Tables)	3 Months Ended
	Apr. 01, 2023
Share-Based Payment Arrangement [Abstract]
Compensation Expense Included in Net Income	Compensation expense included in net income for our share-based compensation plan is as follows: Three Months Ended (In millions) April 1, April 2, Compensation expense $ 45 $ 34 Income tax benefit (11) (8) Total compensation expense included in net income $ 34 $ 26
Weighted-Average Fair Value of Stock Options and Assumptions Used in Option-Pricing Model	The assumptions used in our option-pricing model for these grants and the weighted-average fair value for these options are as follows: March 1, 2023 March 1, 2022 Fair value of options at grant date $ 23.83 $ 19.95 Dividend yield 0.1% 0.1% Expected volatility 29.4% 29.2% Risk-free interest rate 4.2% 1.9% Expected term (in years) 4.8 4.8
Stock Option Activity	The stock option activity during the first quarter of 2023 is provided below: (Options in thousands) Number of Weighted- Outstanding at December 31, 2022 8,310 $ 50.25 Granted 1,026 73.19 Exercised (630) (42.84) Forfeited or expired (60) (58.90) Outstanding at April 1, 2023 8,646 $ 53.45 Exercisable at April 1, 2023 6,263 $ 48.56
Restricted Stock Units Activity	The activity for restricted stock units payable in both stock and cash during the first quarter of 2023 is provided below: Units Payable in Stock Units Payable in Cash (Shares/Units in thousands) Number of Weighted- Number of Weighted- Outstanding at December 31, 2022, nonvested 525 $ 52.99 1,086 $ 53.26 Granted 103 73.17 245 73.18 Vested (218) (46.66) (463) (45.92) Forfeited — — (32) (56.94) Outstanding at April 1, 2023, nonvested 410 $ 61.41 836 $ 63.02
Fair Value of Awards Vested and Cash Paid During Respective Periods	The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows: Three Months Ended (In millions) April 1, April 2, Fair value of awards vested $ 44 $ 24 Cash paid 34 17
Performance Share Units Activity	The activity for our performance share units during the first quarter of 2023 is as follows: (Units in thousands) Number of Weighted- Outstanding at December 31, 2022, nonvested 427 $ 59.51 Granted 209 73.19 Outstanding at April 1, 2023, nonvested 636 $ 64.01

Retirement Plans (Tables)

Retirement Plans (Tables)	3 Months Ended
	Apr. 01, 2023
Retirement Benefits [Abstract]
Schedule of Components of Net Periodic Benefit Income	The components of net periodic benefit income for these plans are as follows: Three Months Ended (In millions) April 1, April 2, Pension Benefits Service cost $ 17 $ 26 Interest cost 91 69 Expected return on plan assets (152) (153) Amortization of net actuarial loss — 22 Amortization of prior service cost 3 3 Net periodic benefit income* $ (41) $ (33) Postretirement Benefits Other Than Pensions Service cost $ — $ 1 Interest cost 2 1 Amortization of net actuarial gain (2) (1) Amortization of prior service credit (1) (1) Net periodic benefit income $ (1) $ —

Basis of Presentation (Details)

Basis of Presentation (Details) $ / shares in Units, $ in Millions	3 Months Ended
	Apr. 01, 2023 USD ($) borrowing_group $ / shares	Apr. 02, 2022 USD ($) $ / shares
Basis of Presentation
Number of borrowing groups | borrowing_group	2
Cumulative catch-up method
Basis of Presentation
Cumulative catch up adjustments, increase (decease) in segment profit	$ 8	$ (17)
Change in accounting estimate financial effect, increase (decrease) in net income	$ 6	$ (13)
Change in accounting estimate financial effect increase (decrease) in earnings per diluted share (in dollars per share) | $ / shares	$ 0.03	$ (0.06)

Accounts Receivable and Finan_3

Accounts Receivable and Finance Receivables - Accounts Receivable (Details) - Manufacturing group - USD ($) $ in Millions	Apr. 01, 2023	Dec. 31, 2022
Accounts Receivable
Accounts receivable, gross	$ 950	$ 879
Allowance for credit losses	(22)	(24)
Total accounts receivable, net	928	855
Commercial
Accounts Receivable
Accounts receivable, gross	824	755
U.S. Government
Accounts Receivable
Accounts receivable, gross	$ 126	$ 124

Accounts Receivable and Finan_4

Accounts Receivable and Finance Receivables - Finance Receivables (Details) - USD ($) $ in Millions	Apr. 01, 2023	Dec. 31, 2022
Finance Receivables
Finance receivables	$ 577	$ 587
Allowance for credit losses	(22)	(24)
Total finance receivables, net	$ 555	$ 563

Accounts Receivable and Finan_5

Accounts Receivable and Finance Receivables - Finance Receivable Portfolio Quality (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Dec. 31, 2022
Finance Receivable Portfolio Quality
Finance receivables	$ 577	$ 587
60+ days contractual delinquency as a percentage of finance receivables	0.35%	0.17%
Current and less than 31 days past due
Finance Receivable Portfolio Quality
Finance receivables	$ 570	$ 579
31-60 days past due
Finance Receivable Portfolio Quality
Finance receivables	5	7
61-90 days past due
Finance Receivable Portfolio Quality
Finance receivables	2	0
Over 90 days past due
Finance Receivable Portfolio Quality
Finance receivables	$ 0	$ 1
Performing
Finance Receivable Portfolio Quality
Financing percentage receivable originating since the beginning of 2021	33%
Financing receivable percentage originating from 2018 to 2020	30%
Nonperforming
Finance Receivable Portfolio Quality
Nonaccrual as a percentage of finance receivables	6.76%	7.84%
Nonperforming | Watchlist
Finance Receivable Portfolio Quality
Finance receivables	$ 26	$ 26
Financing receivable percentage originating since the beginning of 2020	94%
Nonperforming | Nonaccrual
Finance Receivable Portfolio Quality
Finance receivables	$ 39	46
Financing receivable percentage originating from 2018 to 2020	65%
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	$ 512	$ 515

Accounts Receivable and Finan_6

Accounts Receivable and Finance Receivables - Finance Receivables and Allowance for Losses Based on the Results of Impairment Evaluation (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Apr. 01, 2023	Dec. 31, 2022
Receivables [Abstract]
Finance receivables evaluated collectively	$ 451	$ 450
Finance receivables evaluated individually	39	46
Allowance for credit losses based on collective evaluation	19	21
Allowance for credit losses based on individual evaluation	3	3
Impaired finance receivables with specific allowance for credit losses	12	15
Impaired finance receivables with no specific allowance for credit losses	27	31
Unpaid principal balance of impaired finance receivables	53	60
Allowance for credit losses on impaired finance receivables	3	3
Average recorded investment of impaired finance receivables	$ 43	$ 67

Inventories (Details)

Inventories (Details) - USD ($) $ in Millions	Apr. 01, 2023	Dec. 31, 2022
Inventories
Finished goods	$ 1,059	$ 991
Work in process	1,753	1,540
Raw materials and components	1,122	1,019
Total inventories	$ 3,934	$ 3,550

Warranty Liability (Details)

Warranty Liability (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Changes in warranty liability
Beginning of period	$ 149	$ 127
Provision	15	16
Settlements	(18)	(19)
Adjustments	3	6
End of period	$ 149	$ 130

Leases - Narrative (Details)

Leases - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Leases [Abstract]
Remaining lease terms	26 years
Operating lease - option to extend	true
Operating lease - option to extend the lease, term	25 years
Operating lease cost	$ 17	$ 17
Cash paid for operating lease liabilities	17	17
Noncash lease transactions	$ 15	$ 7

Leases - Balance Sheet and Othe

Leases - Balance Sheet and Other Information (Details) - USD ($) $ in Millions	Apr. 01, 2023	Dec. 31, 2022
Operating leases:
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other assets	Other assets
Other assets	$ 375	$ 372
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other current liabilities	Other current liabilities
Other current liabilities	$ 55	$ 54
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities
Other liabilities	$ 328	$ 326
Weighted-average remaining lease term (in years)
Weighted-average remaining lease term (in years)	10 years 4 months 24 days	10 years 4 months 24 days
Weighted-average discount rate
Weighted-average discount rate	4.29%	4.14%

Leases - Maturity of Lease Liab

Leases - Maturity of Lease Liabilities (Details) $ in Millions	Apr. 01, 2023 USD ($)
Operating Leases
Remainder of 2023	$ 53
2024	63
2025	55
2026	42
2027	37
Thereafter	$ 237

Derivative Instruments and Fa_3

Derivative Instruments and Fair Value Measurements - Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Dec. 31, 2022
Manufacturing group
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
Forward exchange contracts maximum maturity period	3 years
Manufacturing group | Foreign currency exchange contracts | Cash Flow Hedging
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
Notional amounts	$ 623	$ 354
Manufacturing group | Foreign currency exchange contracts | Cash Flow Hedging | Level 2
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
Derivative asset, fair value	2
Derivative liability, fair value	11	11
Finance group | Interest rate swap | Cash Flow Hedging
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
Derivative asset, fair value	5	8
Finance group | Interest rate swap, maturing in August 2023 | Cash Flow Hedging
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
Notional amounts	272	272
Finance group | Interest rate swap, maturing in June 2025 | Cash Flow Hedging
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
Notional amounts	$ 25	$ 25

Derivative Instruments and Fa_4

Derivative Instruments and Fair Value Measurements - Assets and Liabilities not Recorded at Fair Value (Details) - USD ($) $ in Millions	Apr. 01, 2023	Dec. 31, 2022
Manufacturing group | Carrying Value
Financial instruments not reflected at fair value
Debt	$ (3,175)	$ (3,175)
Manufacturing group | Estimated Fair value
Financial instruments not reflected at fair value
Debt	(2,960)	(2,872)
Finance group | Carrying Value
Financial instruments not reflected at fair value
Debt	(367)	(375)
Finance receivables, excluding leases	388	390
Finance group | Estimated Fair value
Financial instruments not reflected at fair value
Debt	(298)	(294)
Finance receivables, excluding leases	$ 381	$ 369

Shareholders' Equity - Reconcil

Shareholders' Equity - Reconciliation of Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	$ 7,113	$ 6,815
Net income	191	193
Other comprehensive income	26	10
Share-based compensation activity	62	61
Dividends declared	(4)	(5)
Purchases of common stock, including excise tax	(380)	(157)
Balance at end of period	7,008	$ 6,917
Excise taxes on common share repurchases	$ 3
Dividends per share of common stock (in dollars per share)	$ 0.02	$ 0.02
Common Stock
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	$ 26	$ 28
Balance at end of period	26	28
Capital Surplus
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	1,880	1,863
Share-based compensation activity	62	61
Balance at end of period	1,942	1,924
Treasury Stock
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	(84)	(157)
Purchases of common stock, including excise tax	(380)	(157)
Balance at end of period	(464)	(314)
Retained Earnings
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	5,903	5,870
Net income	191	193
Dividends declared	(4)	(5)
Balance at end of period	6,090	6,058
Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity
Balance at beginning of period	(612)	(789)
Other comprehensive income	26	10
Balance at end of period	$ (586)	$ (779)

Shareholders' Equity - Earnings

Shareholders' Equity - Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Weighted-average shares outstanding for basic and diluted EPS
Basic weighted-average shares outstanding (in shares)	204,835	217,010
Dilutive effect of stock options (in shares)	2,176	2,597
Diluted weighted-average shares outstanding (in shares)	207,011	219,607
Stock options
Weighted-average shares outstanding for basic and diluted EPS
Anti-dilutive effect of weighted average shares (in shares)	2,000	1,000

Shareholders' Equity - Accumula

Shareholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	$ 7,113	$ 6,815
Other comprehensive income (loss) before reclassifications	25	(7)
Reclassified from Accumulated other comprehensive loss	1	17
Balance at end of period	7,008	6,917
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(612)	(789)
Balance at end of period	(586)	(779)
Pension and Postretirement Benefits Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(516)	(799)
Other comprehensive income (loss) before reclassifications	0	0
Reclassified from Accumulated other comprehensive loss	0	17
Balance at end of period	(516)	(782)
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(94)	9
Other comprehensive income (loss) before reclassifications	28	(14)
Reclassified from Accumulated other comprehensive loss	0	0
Balance at end of period	(66)	(5)
Deferred Gains (Losses) on Hedge Contracts
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at beginning of period	(2)	1
Other comprehensive income (loss) before reclassifications	(3)	7
Reclassified from Accumulated other comprehensive loss	1	0
Balance at end of period	$ (4)	$ 8

Shareholders' Equity - Before a

Shareholders' Equity - Before and After Tax Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Pension and postretirement benefits adjustments, pre-tax:
Amortization of net actuarial (gain) loss, pre-tax	$ (2)	$ 21
Amortization of prior service cost, pre-tax	2	2
Pension and postretirement benefits adjustments, net, pre-tax	0	23
Pension and postretirement benefits adjustments, tax:
Amortization of net actuarial (gain) loss, tax (expense) benefit	1	(5)
Amortization of prior service cost, tax (expense) benefit	(1)	(1)
Pension and postretirement benefits adjustments, net, tax (expense) benefit	0	(6)
Pension and postretirement benefits adjustments, after-tax:
Amortization of net actuarial (gain) loss, after-tax	(1)	16
Amortization of prior period service cost, after-tax	1	1
Pension and postretirement benefits adjustments, net, after-tax	0	17
Foreign currency translation adjustments, pre-tax:
Foreign currency translation adjustments	28	(14)
Foreign currency translation adjustments, tax:
Foreign currency translation adjustments	0	0
Foreign currency translation adjustments, after-tax:
Foreign currency translation adjustments	28	(14)
Deferred gains (losses) on hedge contracts, pre-tax:
Current deferrals, pre-tax	(4)	10
Reclassification adjustments, pre-tax	2	0
Deferred gains (losses) on hedge contracts, net, pre-tax	(2)	10
Deferred gains (losses) on hedge contracts, tax:
Current deferrals, tax (expense) benefit	1	(3)
Reclassification adjustments, tax (expense) benefit	(1)	0
Deferred gains (losses) on hedge contracts, net, tax (expense) benefit	0	(3)
Deferred gains (losses) on hedge contracts, after-tax:
Current deferrals, after-tax	(3)	7
Reclassification adjustments, after tax	1	0
Deferred gains (losses) on hedge contracts, net, after-tax	(2)	7
Other comprehensive income (loss), pre-tax	26	19
Other comprehensive income (loss), tax (expense) benefit	0	(9)
Other comprehensive income	$ 26	$ 10

Segment Information - Narrative

Segment Information - Narrative (Details)	3 Months Ended
	Apr. 01, 2023 segment
Operating and reportable business segments
Number of operating business segments	6
Number of reportable business segments	6

Segment Information - Revenue b

Segment Information - Revenue by Segment and Reconciliation of Segment Profit to Income Before Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Revenues
Total revenues	$ 3,024	$ 3,001
Reconciliation of segment profit to income from continuing operations before income taxes
Interest expense, net for Manufacturing group	(20)	(32)
Non-service components of pension and postretirement income, net	59	60
Income before income taxes	227	232
Operating Segment
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	259	277
Reconciling Items
Reconciliation of segment profit to income from continuing operations before income taxes
Corporate expenses and other, net	(39)	(52)
LIFO inventory provision	(25)	(12)
Intangible asset amortization	(10)	(13)
Non-service components of pension and postretirement income, net	59	60
Textron Aviation
Revenues
Total revenues	1,149	1,040
Bell
Revenues
Total revenues	621	834
Textron Systems
Revenues
Total revenues	306	273
Industrial
Revenues
Total revenues	932	838
Textron eAviation
Revenues
Total revenues	4	0
Finance
Revenues
Total revenues	12	16
Manufacturing group | Reconciling Items
Reconciliation of segment profit to income from continuing operations before income taxes
Interest expense, net for Manufacturing group	(17)	(28)
Manufacturing group | Textron Aviation | Operating Segment
Revenues
Total revenues	1,149	1,040
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	125	110
Manufacturing group | Bell | Operating Segment
Revenues
Total revenues	621	834
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	60	91
Manufacturing group | Textron Systems | Operating Segment
Revenues
Total revenues	306	273
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	34	28
Manufacturing group | Industrial | Operating Segment
Revenues
Total revenues	932	838
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	41	39
Manufacturing group | Textron eAviation | Operating Segment
Revenues
Total revenues	4	0
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	(9)	0
Finance group
Revenues
Total revenues	12	16
Finance group | Finance | Operating Segment
Revenues
Total revenues	12	16
Reconciliation of segment profit to income from continuing operations before income taxes
Segment profit	$ 8	$ 9

Revenues - Disaggregation of Re

Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 3,024	$ 3,001
United States
Disaggregation of Revenue [Line Items]
Revenues	2,070	2,079
Europe
Disaggregation of Revenue [Line Items]
Revenues	305	346
Other international
Disaggregation of Revenue [Line Items]
Revenues	649	576
Commercial
Disaggregation of Revenue [Line Items]
Revenues	2,356	2,171
U.S. Government
Disaggregation of Revenue [Line Items]
Revenues	668	830
Textron Aviation
Disaggregation of Revenue [Line Items]
Revenues	1,149	1,040
Textron Aviation | United States
Disaggregation of Revenue [Line Items]
Revenues	836	732
Textron Aviation | Europe
Disaggregation of Revenue [Line Items]
Revenues	66	119
Textron Aviation | Other international
Disaggregation of Revenue [Line Items]
Revenues	247	189
Textron Aviation | Commercial
Disaggregation of Revenue [Line Items]
Revenues	1,107	1,021
Textron Aviation | U.S. Government
Disaggregation of Revenue [Line Items]
Revenues	42	19
Textron Aviation | Aircraft
Disaggregation of Revenue [Line Items]
Revenues	718	646
Textron Aviation | Aftermarket parts and services
Disaggregation of Revenue [Line Items]
Revenues	431	394
Bell
Disaggregation of Revenue [Line Items]
Revenues	621	834
Bell | United States
Disaggregation of Revenue [Line Items]
Revenues	460	670
Bell | Europe
Disaggregation of Revenue [Line Items]
Revenues	19	28
Bell | Other international
Disaggregation of Revenue [Line Items]
Revenues	142	136
Bell | Commercial
Disaggregation of Revenue [Line Items]
Revenues	232	234
Bell | U.S. Government
Disaggregation of Revenue [Line Items]
Revenues	389	600
Bell | Military aircraft and support programs
Disaggregation of Revenue [Line Items]
Revenues	385	597
Bell | Commercial helicopters, parts and services
Disaggregation of Revenue [Line Items]
Revenues	236	237
Textron Systems
Disaggregation of Revenue [Line Items]
Revenues	306	273
Textron Systems | United States
Disaggregation of Revenue [Line Items]
Revenues	275	246
Textron Systems | Europe
Disaggregation of Revenue [Line Items]
Revenues	14	8
Textron Systems | Other international
Disaggregation of Revenue [Line Items]
Revenues	17	19
Textron Systems | Commercial
Disaggregation of Revenue [Line Items]
Revenues	74	65
Textron Systems | U.S. Government
Disaggregation of Revenue [Line Items]
Revenues	232	208
Industrial
Disaggregation of Revenue [Line Items]
Revenues	932	838
Industrial | United States
Disaggregation of Revenue [Line Items]
Revenues	494	426
Industrial | Europe
Disaggregation of Revenue [Line Items]
Revenues	204	190
Industrial | Other international
Disaggregation of Revenue [Line Items]
Revenues	234	222
Industrial | Commercial
Disaggregation of Revenue [Line Items]
Revenues	927	835
Industrial | U.S. Government
Disaggregation of Revenue [Line Items]
Revenues	5	3
Industrial | Fuel systems and functional components
Disaggregation of Revenue [Line Items]
Revenues	488	464
Industrial | Specialized vehicles
Disaggregation of Revenue [Line Items]
Revenues	444	374
Textron eAviation
Disaggregation of Revenue [Line Items]
Revenues	4	0
Textron eAviation | United States
Disaggregation of Revenue [Line Items]
Revenues	1	0
Textron eAviation | Europe
Disaggregation of Revenue [Line Items]
Revenues	2	0
Textron eAviation | Other international
Disaggregation of Revenue [Line Items]
Revenues	1	0
Textron eAviation | Commercial
Disaggregation of Revenue [Line Items]
Revenues	4	0
Textron eAviation | U.S. Government
Disaggregation of Revenue [Line Items]
Revenues	0	0
Finance
Disaggregation of Revenue [Line Items]
Revenues	12	16
Finance | United States
Disaggregation of Revenue [Line Items]
Revenues	4	5
Finance | Europe
Disaggregation of Revenue [Line Items]
Revenues	0	1
Finance | Other international
Disaggregation of Revenue [Line Items]
Revenues	8	10
Finance | Commercial
Disaggregation of Revenue [Line Items]
Revenues	12	16
Finance | U.S. Government
Disaggregation of Revenue [Line Items]
Revenues	$ 0	$ 0

Revenues - Remaining Performanc

Revenues - Remaining Performance Obligations (Details) $ in Billions	Apr. 01, 2023 USD ($)
Remaining Performance Obligation, Expected Timing of Satisfaction
Remaining performance obligation	$ 13.1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-02
Remaining Performance Obligation, Expected Timing of Satisfaction
Remaining performance obligation, percent	85%
Remaining performance obligation, expected timing of satisfaction	21 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-29
Remaining Performance Obligation, Expected Timing of Satisfaction
Remaining performance obligation, percent	12%
Remaining performance obligation, expected timing of satisfaction	24 months

Revenues - Contract Assets and

Revenues - Contract Assets and Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022	Dec. 31, 2022
Contract Assets and Liabilities
Contract assets	$ 621		$ 680
Contract liabilities	1,700		$ 1,500
Revenue recognized included in contract liabilities	$ 316	$ 206

Share-Based Compensation - Comp

Share-Based Compensation - Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 45	$ 34
Income tax benefit	(11)	(8)
Total compensation expense included in net income	34	26
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 14	$ 12

Share-Based Compensation - Stoc

Share-Based Compensation - Stock Appreciation Rights (Details) - Stock appreciation rights - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards outstanding (in shares)	617,074
Weighted-average exercise price (in dollars per share)	$ 54.62
Weighted-average remaining contractual life	6 years 4 months 24 days
Intrinsic value	$ 10	$ 14

Share-Based Compensation - St_2

Share-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions			3 Months Ended
	Mar. 01, 2023	Mar. 01, 2022	Apr. 01, 2023	Apr. 02, 2022
Additional general disclosures
Aggregate intrinsic value of outstanding options			$ 152
Weighted-average remaining contractual life of outstanding stock options			6 years 2 months 12 days
Aggregate intrinsic value of exercisable options			$ 138
Weighted-average remaining contractual life of exercisable options			5 years 1 month 6 days
Total intrinsic value of options exercised			$ 19	$ 23
Stock options
Share-Based Compensation
Maximum term of options			10 years
Performance share units vesting period			3 years
Weighted-average assumptions used in Black-Scholes option-pricing model
Fair value of options at grant date (in dollars per share)	$ 23.83	$ 19.95
Dividend yield	0.10%	0.10%
Expected volatility	29.40%	29.20%
Risk-free interest rate	4.20%	1.90%
Expected term (in years)	4 years 9 months 18 days	4 years 9 months 18 days
Number of Options
Outstanding at beginning of period (in shares)			8,310
Granted (in shares)			1,026
Exercised (in shares)			(630)
Forfeited or expired (in shares)			(60)
Outstanding at end of period (in shares)			8,646
Exercisable at end of period (in shares)			6,263
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share)			$ 50.25
Granted (in dollars per share)			73.19
Exercised (in dollars per share)			(42.84)
Forfeited or expired (in dollars per share)			(58.90)
Outstanding at end of period (in dollars per share)			53.45
Exercisable at end of period (in dollars per share)			$ 48.56

Share-Based Compensation - Rest

Share-Based Compensation - Restricted Stock Units (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Restricted Stock Units
Fair value
Fair value of awards vested	$ 44	$ 24
Cash paid	$ 34	$ 17
Units Payable in Stock
Number of Units
Outstanding at beginning of period, nonvested (in shares)	525
Granted (in shares)	103
Vested (in shares)	(218)
Forfeited (in shares)	0
Outstanding at end of period, nonvested (in shares)	410
Weighted- Average Grant Date Fair Value
Outstanding at beginning of period, nonvested (in dollars per share)	$ 52.99
Granted (in dollars per share)	73.17
Vested (in dollars per share)	(46.66)
Forfeited (in dollars per share)	0
Outstanding at end of period, nonvested (in dollars per share)	$ 61.41
Units Payable in Cash
Number of Units
Outstanding at beginning of period, nonvested (in shares)	1,086
Granted (in shares)	245
Vested (in shares)	(463)
Forfeited (in shares)	(32)
Outstanding at end of period, nonvested (in shares)	836
Weighted- Average Grant Date Fair Value
Outstanding at beginning of period, nonvested (in dollars per share)	$ 53.26
Granted (in dollars per share)	73.18
Vested (in dollars per share)	(45.92)
Forfeited (in dollars per share)	(56.94)
Outstanding at end of period, nonvested (in dollars per share)	$ 63.02

Share-Based Compensation - Perf

Share-Based Compensation - Performance Share Units (Details) - Performance Share Units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Number of Units
Outstanding at beginning of period, nonvested (in shares)	427
Granted (in shares)	209
Outstanding at end of period, nonvested (in shares)	636
Weighted- Average Grant Date Fair Value
Outstanding at beginning of period, nonvested (in dollars per share)	$ 59.51
Granted (in dollars per share)	73.19
Outstanding at end of period, nonvested (in dollars per share)	$ 64.01
Fair value
Cash paid	$ 27	$ 15

Retirement Plans (Details)

Retirement Plans (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Pension Benefits
Net periodic benefit income
Service cost	$ 17	$ 26
Interest cost	91	69
Expected return on plan assets	(152)	(153)
Amortization of net actuarial loss	0	22
Amortization of prior service cost	3	3
Net periodic benefit income	(41)	(33)
Pension Benefits | United States
Net periodic benefit income
Cost associated with the defined contribution component	4	4
Postretirement Benefits Other Than Pensions
Net periodic benefit income
Service cost	0	1
Interest cost	2	1
Amortization of net actuarial loss	(2)	(1)
Amortization of prior service cost	(1)	(1)
Net periodic benefit income	$ (1)	$ 0

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended
	Apr. 01, 2023	Apr. 02, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate	15.90%	16.80%
U.S. federal statutory income tax rate	21%	21%