Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 13, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 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, $0.125 par value | |
Trading Symbol | TXT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 196,005,457 | |
Entity Central Index Key | 0000217346 | |
Current Fiscal Year End Date | --12-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Revenues | ||||
Total revenues | $ 3,343 | $ 3,078 | $ 9,791 | $ 9,233 |
Costs, expenses and other | ||||
Selling and administrative expense | 303 | 266 | 897 | 850 |
Interest expense, net | 19 | 24 | 58 | 87 |
Non-service components of pension and postretirement income, net | (59) | (60) | (177) | (180) |
Total costs, expenses and other | 3,042 | 2,814 | 8,934 | 8,474 |
Income from continuing operations before income taxes | 301 | 264 | 857 | 759 |
Income tax expense | 32 | 39 | 134 | 123 |
Income from continuing operations | 269 | 225 | 723 | 636 |
Loss from discontinued operations | 0 | 0 | 0 | (1) |
Net income | $ 269 | $ 225 | $ 723 | $ 635 |
Basic earnings per share | ||||
Continuing operations (in dollars per share) | $ 1.36 | $ 1.06 | $ 3.59 | $ 2.96 |
Diluted earnings per share | ||||
Continuing operations (in dollars per share) | $ 1.35 | $ 1.06 | $ 3.56 | $ 2.94 |
Manufacturing group | ||||
Costs, expenses and other | ||||
Income from continuing operations | $ 690 | $ 615 | ||
Finance group | ||||
Revenues | ||||
Total revenues | $ 13 | $ 11 | 43 | 41 |
Costs, expenses and other | ||||
Income from continuing operations | 33 | 21 | ||
Product | ||||
Costs, expenses and other | ||||
Cost of products/services sold | 2,355 | 2,243 | 6,996 | 6,616 |
Product | Manufacturing group | ||||
Revenues | ||||
Total revenues | 2,791 | 2,608 | 8,258 | 7,745 |
Service | ||||
Costs, expenses and other | ||||
Cost of products/services sold | 424 | 341 | 1,160 | 1,101 |
Service | Manufacturing group | ||||
Revenues | ||||
Total revenues | $ 539 | $ 459 | $ 1,490 | $ 1,447 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 269 | $ 225 | $ 723 | $ 635 |
Other comprehensive loss, net of tax | ||||
Pension and postretirement benefits adjustments, net of reclassifications | 0 | 18 | 0 | 52 |
Foreign currency translation adjustments | (51) | (97) | (19) | (201) |
Deferred gains (losses) on hedge contracts, net of reclassifications | (3) | (8) | 3 | (4) |
Other comprehensive loss | (54) | (87) | (16) | (153) |
Comprehensive income | $ 215 | $ 138 | $ 707 | $ 482 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) shares in Thousands, $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Inventories | $ 4,207 | $ 3,550 |
Finance receivables, net | 599 | 563 |
Total assets | 16,492 | 16,293 |
Liabilities | ||
Total liabilities | 9,425 | 9,180 |
Shareholders’ equity | ||
Common stock | 26 | 26 |
Capital surplus | 2,031 | 1,880 |
Treasury stock | (976) | (84) |
Retained earnings | 6,614 | 5,903 |
Accumulated other comprehensive loss | (628) | (612) |
Total shareholders’ equity | 7,067 | 7,113 |
Total liabilities and shareholders’ equity | $ 16,492 | $ 16,293 |
Common shares outstanding (in shares) | 196,191 | 206,161 |
Manufacturing group | ||
Assets | ||
Cash and equivalents | $ 1,671 | $ 1,963 |
Accounts receivable, net | 892 | 855 |
Inventories | 4,207 | 3,550 |
Other current assets | 815 | 1,033 |
Total current assets | 7,585 | 7,401 |
Property, plant and equipment, less accumulated depreciation and amortization of $5,261 and $5,084, respectively | 2,451 | 2,523 |
Goodwill | 2,281 | 2,283 |
Other assets | 3,508 | 3,422 |
Total assets | 15,825 | 15,629 |
Liabilities | ||
Current portion of long-term debt | 357 | 7 |
Accounts payable | 1,216 | 1,018 |
Other current liabilities | 2,814 | 2,645 |
Total current liabilities | 4,387 | 3,670 |
Other liabilities | 1,789 | 1,879 |
Long-term debt | 2,824 | 3,175 |
Total liabilities | 9,000 | 8,724 |
Finance group | ||
Assets | ||
Cash and equivalents | 45 | 72 |
Finance receivables, net | 599 | 563 |
Other assets | 23 | 29 |
Total assets | 667 | 664 |
Liabilities | ||
Other liabilities | 75 | 81 |
Debt | 350 | 375 |
Total liabilities | $ 425 | $ 456 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization | $ 5,261 | $ 5,084 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Cash flows from operating activities | ||
Income from continuing operations | $ 723 | $ 636 |
Non-cash items: | ||
Depreciation and amortization | 292 | 288 |
Deferred income taxes | (113) | (183) |
Other, net | 74 | 77 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (45) | (23) |
Inventories | (659) | (353) |
Other assets | 267 | 105 |
Accounts payable | 202 | 116 |
Other liabilities | 120 | 344 |
Income taxes, net | 37 | 44 |
Pension, net | (152) | (123) |
Captive finance receivables, net | (32) | 29 |
Other operating activities, net | 4 | 6 |
Net cash provided by (used in) operating activities of continuing operations | 718 | 963 |
Net cash used in operating activities of discontinued operations | (1) | (2) |
Net cash provided by (used in) operating activities | 717 | 961 |
Cash flows from investing activities | ||
Capital expenditures | (224) | (192) |
Net cash used in business acquisitions | (1) | (201) |
Net proceeds from corporate-owned life insurance policies | 39 | 23 |
Proceeds from sale of property, plant and equipment | 4 | 21 |
Finance receivables repaid | 26 | 21 |
Other investing activities, net | 2 | 44 |
Net cash provided by (used in) investing activities | (154) | (284) |
Cash flows from financing activities | ||
Decrease in short-term debt | 0 | (15) |
Principal payments on long-term debt and nonrecourse debt | (41) | (227) |
Purchases of Textron common stock | (885) | (639) |
Dividends paid | (12) | (13) |
Proceeds from options exercised | 66 | 36 |
Other financing activities, net | (5) | (3) |
Net cash used in financing activities | (877) | (861) |
Effect of exchange rate changes on cash and equivalents | (5) | (49) |
Net decrease in cash and equivalents | (319) | (233) |
Cash and equivalents at beginning of period | 2,035 | 2,117 |
Cash and equivalents at end of period | $ 1,716 | $ 1,884 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Unaudited) - Manufacturing Group and Finance Group - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Cash flows from operating activities | ||
Income from continuing operations | $ 723 | $ 636 |
Non-cash items: | ||
Depreciation and amortization | 292 | 288 |
Deferred income taxes | (113) | (183) |
Other, net | 74 | 77 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (45) | (23) |
Inventories | (659) | (353) |
Other assets | 267 | 105 |
Accounts payable | 202 | 116 |
Other liabilities | 120 | 344 |
Income taxes, net | 37 | 44 |
Pension, net | (152) | (123) |
Other operating activities, net | 4 | 6 |
Net cash provided by (used in) operating activities of continuing operations | 718 | 963 |
Net cash used in operating activities of discontinued operations | (1) | (2) |
Net cash provided by (used in) operating activities | 717 | 961 |
Cash flows from investing activities | ||
Capital expenditures | (224) | (192) |
Net cash used in business acquisitions | (1) | (201) |
Net proceeds from corporate-owned life insurance policies | 39 | 23 |
Proceeds from sale of property, plant and equipment | 4 | 21 |
Finance receivables repaid | 26 | 21 |
Other investing activities, net | 2 | 44 |
Net cash provided by (used in) investing activities | (154) | (284) |
Cash flows from financing activities | ||
Decrease in short-term debt | 0 | (15) |
Principal payments on long-term debt and nonrecourse debt | (41) | (227) |
Purchases of Textron common stock | (885) | (639) |
Dividends paid | (12) | (13) |
Proceeds from options exercised | 66 | 36 |
Other financing activities, net | (5) | (3) |
Net cash used in financing activities | (877) | (861) |
Effect of exchange rate changes on cash and equivalents | (5) | (49) |
Net decrease in cash and equivalents | (319) | (233) |
Cash and equivalents at beginning of period | 2,035 | 2,117 |
Cash and equivalents at end of period | 1,716 | 1,884 |
Manufacturing group | ||
Cash flows from operating activities | ||
Income from continuing operations | 690 | 615 |
Non-cash items: | ||
Depreciation and amortization | 292 | 287 |
Deferred income taxes | (110) | (168) |
Other, net | 93 | 85 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (45) | (23) |
Inventories | (659) | (353) |
Other assets | 260 | 105 |
Accounts payable | 202 | 116 |
Other liabilities | 129 | 356 |
Income taxes, net | 33 | 42 |
Pension, net | (152) | (123) |
Other operating activities, net | 4 | 6 |
Net cash provided by (used in) operating activities of continuing operations | 737 | 945 |
Net cash used in operating activities of discontinued operations | (1) | (2) |
Net cash provided by (used in) operating activities | 736 | 943 |
Cash flows from investing activities | ||
Capital expenditures | (224) | (192) |
Net cash used in business acquisitions | (1) | (201) |
Net proceeds from corporate-owned life insurance policies | 39 | 23 |
Proceeds from sale of property, plant and equipment | 4 | 21 |
Finance receivables repaid | 0 | 0 |
Finance receivables originated | 0 | 0 |
Other investing activities, net | 0 | 0 |
Net cash provided by (used in) investing activities | (182) | (349) |
Cash flows from financing activities | ||
Decrease in short-term debt | 0 | (15) |
Principal payments on long-term debt and nonrecourse debt | (5) | (16) |
Purchases of Textron common stock | (885) | (639) |
Dividends paid | (12) | (13) |
Proceeds from options exercised | 66 | 36 |
Other financing activities, net | (5) | (3) |
Net cash used in financing activities | (841) | (650) |
Effect of exchange rate changes on cash and equivalents | (5) | (49) |
Net decrease in cash and equivalents | (292) | (105) |
Cash and equivalents at beginning of period | 1,963 | 1,922 |
Cash and equivalents at end of period | 1,671 | 1,817 |
Finance group | ||
Cash flows from operating activities | ||
Income from continuing operations | 33 | 21 |
Non-cash items: | ||
Depreciation and amortization | 0 | 1 |
Deferred income taxes | (3) | (15) |
Other, net | (19) | (8) |
Changes in assets and liabilities: | ||
Accounts receivable, net | 0 | 0 |
Inventories | 0 | 0 |
Other assets | 7 | 0 |
Accounts payable | 0 | 0 |
Other liabilities | (9) | (12) |
Income taxes, net | 4 | 2 |
Pension, net | 0 | 0 |
Other operating activities, net | 0 | 0 |
Net cash provided by (used in) operating activities of continuing operations | 13 | (11) |
Net cash used in operating activities of discontinued operations | 0 | 0 |
Net cash provided by (used in) operating activities | 13 | (11) |
Cash flows from investing activities | ||
Capital expenditures | 0 | 0 |
Net cash used in business acquisitions | 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 | 116 | 108 |
Finance receivables originated | (122) | (58) |
Other investing activities, net | 2 | 44 |
Net cash provided by (used in) investing activities | (4) | 94 |
Cash flows from financing activities | ||
Decrease in short-term debt | 0 | 0 |
Principal payments on long-term debt and nonrecourse debt | (36) | (211) |
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 | (36) | (211) |
Effect of exchange rate changes on cash and equivalents | 0 | 0 |
Net decrease in cash and equivalents | (27) | (128) |
Cash and equivalents at beginning of period | 72 | 195 |
Cash and equivalents at end of period | $ 45 | $ 67 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 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. In the third quarter of 2023, our cumulative catch-up adjustments increased segment profit by $18 million and net income by $14 million, $0.07 per diluted share. In the third quarter of 2022, our cumulative catch-up adjustments decreased segment profit by $3 million and net income by $2 million, $0.01 per diluted share. |
Accounts Receivable and Finance
Accounts Receivable and Finance Receivables | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Accounts Receivable and Finance Receivables | Accounts Receivable and Finance Receivables Accounts Receivable Accounts receivable is composed of the following: (In millions) September 30, December 31, Commercial $ 813 $ 755 U.S. Government contracts 100 124 913 879 Allowance for credit losses (21) (24) Total accounts receivable, net $ 892 $ 855 Finance Receivables Finance receivables are presented in the following table: (In millions) September 30, December 31, Finance receivables $ 624 $ 587 Allowance for credit losses (25) (24) Total finance receivables, net $ 599 $ 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) September 30, December 31, Performing $ 585 $ 515 Watchlist 23 26 Nonaccrual 16 46 Nonaccrual as a percentage of finance receivables 2.56% 7.84% Current and less than 31 days past due $ 614 $ 579 31-60 days past due 1 7 61-90 days past due 5 — Over 90 days past due 4 1 60+ days contractual delinquency as a percentage of finance receivables 1.44% 0.17% At September 30, 2023, 43% of our performing finance receivables were originated since the beginning of 2021 and 27% were originated from 2018 to 2020. For finance receivables categorized as watchlist, 100% were originated since the beginning of 2020 and for nonaccrual, 41% were originated from 2018 to 2020 with the remainder prior to 2018. 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) September 30, December 31, Finance receivables evaluated collectively $ 523 $ 450 Finance receivables evaluated individually 16 46 Allowance for credit losses based on collective evaluation 22 21 Allowance for credit losses based on individual evaluation 3 3 Impaired finance receivables with specific allowance for credit losses $ 11 $ 15 Impaired finance receivables with no specific allowance for credit losses 5 31 Unpaid principal balance of impaired finance receivables 26 60 Allowance for credit losses on impaired finance receivables 3 3 Average recorded investment of impaired finance receivables 30 67 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are composed of the following: (In millions) September 30, December 31, Finished goods $ 1,178 $ 991 Work in process 1,877 1,540 Raw materials and components 1,152 1,019 Total inventories $ 4,207 $ 3,550 |
Warranty Liability
Warranty Liability | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Warranty Liability | Warranty Liability Changes in our warranty liability are as follows: Nine Months Ended (In millions) September 30, October 1, Beginning of period $ 149 $ 127 Provision 51 51 Settlements (53) (46) Adjustments* 17 11 End of period $ 164 $ 143 * Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments. |
Leases
Leases | 9 Months Ended |
Sep. 30, 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 25 years, which include options to extend the lease term for periods up to 20 years when it is reasonably certain the option will be exercised. Operating lease cost totaled $18 million and $17 million in the third quarter of 2023 and 2022, respectively, and $52 million and $51 million in the first nine months of 2023 and 2022, respectively. Variable and short-term lease costs were not significant. Cash paid for operating leases totaled $51 million for both the first nine months of 2023 and 2022, and is classified in cash flows from operating activities. Noncash transactions totaled $32 million and $34 million in the first nine months 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) September 30, December 31, Other assets $ 362 $ 372 Other current liabilities 53 54 Other liabilities 319 326 Weighted-average remaining lease term (in years) 10.2 10.4 Weighted-average discount rate 4.41% 4.14% At September 30, 2023, maturities of our operating lease liabilities on an undiscounted basis totaled $19 million for the remainder of 2023, $65 million for 2024, $57 million for 2025, $44 million for 2026, $39 million for 2027 and $249 million thereafter. |
Derivative Instruments and Fair
Derivative Instruments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 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 September 30, 2023 and December 31, 2022, we had foreign currency exchange contracts with notional amounts upon which the contracts were based of $487 million and $354 million, respectively. At September 30, 2023, the fair value amounts of our foreign currency exchange contracts were a $1 million asset and a $9 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 the floating-rate cash flows to fixed-rate cash flows on certain debt. These agreements are designated as cash flow hedges. In 2023, we entered into swap agreements related to our Floating Rate Junior Subordinated Notes for an aggregate notional amount of $185 million and a weighted-average fixed rate of 5.17%, with maturities ranging from August 2025 to August 2028. In compliance with the Adjustable Interest Rate (LIBOR) Act of 2022, in the third quarter of 2023, the benchmark interest rate on these Notes changed to the three-month CME Term Secured Overnight Funding Rate + 1.99661%. At December 31, 2022, we had a swap agreement related to these Notes with a notional amount of $272 million that matured in August 2023. We also entered into an interest rate swap agreement in May 2022 with a notional amount of $25 million that matures in June 2025 and effectively converts variable-rate interest on a term loan to a fixed rate of 2.75%. At September 30, 2023 and December 31, 2022, the fair value of our outstanding swap agreements was a $9 million asset and an $8 million asset, respectively. 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: September 30, 2023 December 31, 2022 Carrying Estimated Carrying Estimated (In millions) Value Fair Value Value Fair Value Manufacturing group Debt, excluding leases $ (3,172) $ (2,856) $ (3,175) $ (2,872) Finance group Finance receivables, excluding leases 430 418 390 369 Debt (350) (292) (375) (294) 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 |
Sep. 30, 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 September 30, 2023 Beginning of period $ 26 $ 1,973 $ (740) $ 6,349 $ (574) $ 7,034 Net income — — — 269 — 269 Other comprehensive loss — — — — (54) (54) Share-based compensation activity — 58 — — — 58 Dividends declared — — — (4) — (4) Purchases of common stock, — — (236) — — (236) End of period $ 26 $ 2,031 $ (976) $ 6,614 $ (628) $ 7,067 Three months ended October 1, 2022 Beginning of period $ 28 $ 1,953 $ (596) $ 6,271 $ (855) $ 6,801 Net income — — — 225 — 225 Other comprehensive loss — — — — (87) (87) Share-based compensation activity — 27 — — — 27 Dividends declared — — — (4) — (4) Purchases of common stock — — (200) — — (200) End of period $ 28 $ 1,980 $ (796) $ 6,492 $ (942) $ 6,762 Nine months ended September 30, 2023 Beginning of period $ 26 $ 1,880 $ (84) $ 5,903 $ (612) $ 7,113 Net income — — — 723 — 723 Other comprehensive loss — — — — (16) (16) Share-based compensation activity — 151 — — — 151 Dividends declared — — — (12) — (12) Purchases of common stock, — — (892) — — (892) End of period $ 26 $ 2,031 $ (976) $ 6,614 $ (628) $ 7,067 Nine months ended October 1, 2022 Beginning of period $ 28 $ 1,863 $ (157) $ 5,870 $ (789) $ 6,815 Net income — — — 635 — 635 Other comprehensive loss — — — — (153) (153) Share-based compensation activity — 117 — — — 117 Dividends declared — — — (13) — (13) Purchases of common stock — — (639) — — (639) End of period $ 28 $ 1,980 $ (796) $ 6,492 $ (942) $ 6,762 *Includes amounts accrued for excise tax imposed on common share repurchases beginning on January 1, 2023 as part of the Inflation Reduction Act that totaled $1 million for the third quarter of 2023 and $7 million for first nine months of 2023. Dividends per share of common stock were $0.02 for both the third quarter of 2023 and 2022 and $0.06 for both the first nine months 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 Nine Months Ended (In thousands) September 30, October 1, September 30, October 1, Basic weighted-average shares outstanding 197,947 211,307 201,161 214,301 Dilutive effect of stock options 2,045 1,833 2,009 2,167 Diluted weighted-average shares outstanding 199,992 213,140 203,170 216,468 Stock options to purchase 1.0 million and 1.7 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 2023, respectively, as their effect would have been anti-dilutive. For both the third quarter and first nine months of 2022, stock options to purchase 1.0 million shares of common stock were excluded from the calculation of diluted weighted-average shares outstanding as their effect would have been anti-dilutive. Accumulated Other Comprehensive Loss and Other Comprehensive 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 loss before reclassifications — (19) (1) (20) Reclassified from Accumulated other comprehensive loss — — 4 4 Balance at September 30, 2023 $ (516) $ (113) $ 1 $ (628) Balance at January 1, 2022 $ (799) $ 9 $ 1 $ (789) Other comprehensive loss before reclassifications — (201) (4) (205) Reclassified from Accumulated other comprehensive loss 52 — — 52 Balance at October 1, 2022 $ (747) $ (192) $ (3) $ (942) The before and after-tax components of Other comprehensive loss are presented below: September 30, 2023 October 1, 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 $ (4) $ 17 Amortization of prior service cost* 2 (1) 1 2 (1) 1 Pension and postretirement benefits adjustments, net — — — 23 (5) 18 Foreign currency translation adjustments (51) — (51) (97) — (97) Deferred gains (losses) on hedge contracts: Current deferrals (6) 2 (4) (11) 3 (8) Reclassification adjustments 2 (1) 1 — — — Deferred gains (losses) on hedge contracts, net (4) 1 (3) (11) 3 (8) Total $ (55) $ 1 $ (54) $ (85) $ (2) $ (87) Nine Months Ended Pension and postretirement benefits adjustments: Amortization of net actuarial (gain) loss* $ (5) $ 2 $ (3) $ 63 $ (15) $ 48 Amortization of prior service cost* 6 (3) 3 6 (2) 4 Pension and postretirement benefits adjustments, net 1 (1) — 69 (17) 52 Foreign currency translation adjustments (19) — (19) (201) — (201) Deferred gains (losses) on hedge contracts: Current deferrals (3) 2 (1) (6) 2 (4) Reclassification adjustments 6 (2) 4 — — — Deferred gains (losses) on hedge contracts, net 3 — 3 (6) 2 (4) Total $ (15) $ (1) $ (16) $ (138) $ (15) $ (153) *These components of other comprehensive loss 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 | 9 Months Ended |
Sep. 30, 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 from continuing operations before income taxes, are included in the table below: Three Months Ended Nine Months Ended (In millions) September 30, October 1, September 30, October 1, Revenues Textron Aviation $ 1,338 $ 1,167 $ 3,849 $ 3,491 Bell 754 754 2,076 2,275 Textron Systems 309 292 921 858 Industrial 922 849 2,880 2,558 Textron eAviation 7 5 22 10 Finance 13 11 43 41 Total revenues $ 3,343 $ 3,078 $ 9,791 $ 9,233 Segment Profit Textron Aviation $ 160 $ 131 $ 456 $ 390 Bell 77 74 202 219 Textron Systems 41 31 112 97 Industrial 51 36 171 112 Textron eAviation (19) (7) (40) (14) Finance 22 7 42 26 Segment profit 332 272 943 830 Corporate expenses and other, net (38) (21) (98) (93) Interest expense, net for Manufacturing group (16) (21) (49) (77) LIFO inventory provision (26) (13) (86) (42) Intangible asset amortization (10) (13) (30) (39) Non-service components of pension and postretirement income, net 59 60 177 180 Income from continuing operations before income taxes $ 301 $ 264 $ 857 $ 759 |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Disaggregation of Revenues Our revenues for our segments disaggregated by major product type are presented below: Three Months Ended Nine Months Ended (In millions) September 30, October 1, September 30, October 1, Aircraft $ 891 $ 733 $ 2,529 $ 2,235 Aftermarket parts and services 447 434 1,320 1,256 Textron Aviation 1,338 1,167 3,849 3,491 Military aircraft and support programs 472 376 1,252 1,375 Commercial helicopters, parts and services 282 378 824 900 Bell 754 754 2,076 2,275 Textron Systems 309 292 921 858 Fuel systems and functional components 465 436 1,476 1,335 Specialized vehicles 457 413 1,404 1,223 Industrial 922 849 2,880 2,558 Textron eAviation 7 5 22 10 Finance 13 11 43 41 Total revenues $ 3,343 $ 3,078 $ 9,791 $ 9,233 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 September 30, 2023 Customer type: Commercial $ 1,302 $ 270 $ 66 $ 915 $ 7 $ 13 $ 2,573 U.S. Government 36 484 243 7 — — 770 Total revenues $ 1,338 $ 754 $ 309 $ 922 $ 7 $ 13 $ 3,343 Geographic location: United States $ 906 $ 573 $ 275 $ 488 $ 4 $ 4 $ 2,250 Europe 133 41 10 174 2 — 360 Other international 299 140 24 260 1 9 733 Total revenues $ 1,338 $ 754 $ 309 $ 922 $ 7 $ 13 $ 3,343 Three months ended October 1, 2022 Customer type: Commercial $ 1,134 $ 362 $ 70 $ 849 $ 5 $ 11 $ 2,431 U.S. Government 33 392 222 — — — 647 Total revenues $ 1,167 $ 754 $ 292 $ 849 $ 5 $ 11 $ 3,078 Geographic location: United States $ 872 $ 534 $ 261 $ 470 $ 3 $ 3 $ 2,143 Europe 93 47 10 153 1 1 305 Other international 202 173 21 226 1 7 630 Total revenues $ 1,167 $ 754 $ 292 $ 849 $ 5 $ 11 $ 3,078 Nine months ended September 30, 2023 Customer type: Commercial $ 3,730 $ 803 $ 210 $ 2,866 $ 22 $ 43 $ 7,674 U.S. Government 119 1,273 711 14 — — 2,117 Total revenues $ 3,849 $ 2,076 $ 921 $ 2,880 $ 22 $ 43 $ 9,791 Geographic location: United States $ 2,675 $ 1,567 $ 824 $ 1,548 $ 12 $ 12 $ 6,638 Europe 358 95 41 579 8 1 1,082 Other international 816 414 56 753 2 30 2,071 Total revenues $ 3,849 $ 2,076 $ 921 $ 2,880 $ 22 $ 43 $ 9,791 Nine months ended October 1, 2022 Customer type: Commercial $ 3,408 $ 875 $ 201 $ 2,549 $ 10 $ 41 $ 7,084 U.S. Government 83 1,400 657 9 — — 2,149 Total revenues $ 3,491 $ 2,275 $ 858 $ 2,558 $ 10 $ 41 $ 9,233 Geographic location: United States $ 2,380 $ 1,708 $ 775 $ 1,362 $ 4 $ 13 $ 6,242 Europe 451 118 28 528 4 2 1,131 Other international 660 449 55 668 2 26 1,860 Total revenues $ 3,491 $ 2,275 $ 858 $ 2,558 $ 10 $ 41 $ 9,233 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 September 30, 2023, we had $14.5 billion in remaining performance obligations of which we expect to recognize revenues of approximately 70% through 2024, an additional 26% through 2026, and the balance thereafter. Contract Assets and Liabilities |
Retirement Plans
Retirement Plans | 9 Months Ended |
Sep. 30, 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 Nine Months Ended (In millions) September 30, October 1, September 30, October 1, Pension Benefits Service cost $ 17 $ 28 $ 50 $ 81 Interest cost 91 68 273 205 Expected return on plan assets (152) (152) (457) (458) Amortization of net actuarial loss — 22 1 66 Amortization of prior service cost 3 3 9 9 Net periodic benefit income* $ (41) $ (31) $ (124) $ (97) Postretirement Benefits Other Than Pensions Service cost $ 1 $ 1 $ 2 $ 2 Interest cost 2 1 6 4 Amortization of net actuarial gain (2) (1) (6) (3) Amortization of prior service credit (1) (1) (3) (3) Net periodic benefit income $ — $ — $ (1) $ — |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate for the third quarter and first nine months of 2023 was 10.6% and 15.6%, respectively. In the third quarter and first nine months 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. Our effective tax rate for the third quarter and first nine months of 2022 was 14.8% and 16.2%, respectively. In the third quarter and first nine months 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 and tax deductions for foreign derived intangible income. In the third quarter of 2022, these benefits were partially offset by a $13 million provision for withholding taxes due to the planned repatriation of cash related to a non-U.S. jurisdiction. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 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) | 9 Months Ended |
Sep. 30, 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) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts receivable is composed of the following: (In millions) September 30, December 31, Commercial $ 813 $ 755 U.S. Government contracts 100 124 913 879 Allowance for credit losses (21) (24) Total accounts receivable, net $ 892 $ 855 |
Finance Receivables | Finance receivables are presented in the following table: (In millions) September 30, December 31, Finance receivables $ 624 $ 587 Allowance for credit losses (25) (24) Total finance receivables, net $ 599 $ 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) September 30, December 31, Performing $ 585 $ 515 Watchlist 23 26 Nonaccrual 16 46 Nonaccrual as a percentage of finance receivables 2.56% 7.84% Current and less than 31 days past due $ 614 $ 579 31-60 days past due 1 7 61-90 days past due 5 — Over 90 days past due 4 1 60+ days contractual delinquency as a percentage of finance receivables 1.44% 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) September 30, December 31, Performing $ 585 $ 515 Watchlist 23 26 Nonaccrual 16 46 Nonaccrual as a percentage of finance receivables 2.56% 7.84% Current and less than 31 days past due $ 614 $ 579 31-60 days past due 1 7 61-90 days past due 5 — Over 90 days past due 4 1 60+ days contractual delinquency as a percentage of finance receivables 1.44% 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) September 30, December 31, Finance receivables evaluated collectively $ 523 $ 450 Finance receivables evaluated individually 16 46 Allowance for credit losses based on collective evaluation 22 21 Allowance for credit losses based on individual evaluation 3 3 Impaired finance receivables with specific allowance for credit losses $ 11 $ 15 Impaired finance receivables with no specific allowance for credit losses 5 31 Unpaid principal balance of impaired finance receivables 26 60 Allowance for credit losses on impaired finance receivables 3 3 Average recorded investment of impaired finance receivables 30 67 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories are composed of the following: (In millions) September 30, December 31, Finished goods $ 1,178 $ 991 Work in process 1,877 1,540 Raw materials and components 1,152 1,019 Total inventories $ 4,207 $ 3,550 |
Warranty Liability (Tables)
Warranty Liability (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Changes in Warranty Liability | Changes in our warranty liability are as follows: Nine Months Ended (In millions) September 30, October 1, Beginning of period $ 149 $ 127 Provision 51 51 Settlements (53) (46) Adjustments* 17 11 End of period $ 164 $ 143 * Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 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) September 30, December 31, Other assets $ 362 $ 372 Other current liabilities 53 54 Other liabilities 319 326 Weighted-average remaining lease term (in years) 10.2 10.4 Weighted-average discount rate 4.41% 4.14% |
Derivative Instruments and Fa_2
Derivative Instruments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2023 December 31, 2022 Carrying Estimated Carrying Estimated (In millions) Value Fair Value Value Fair Value Manufacturing group Debt, excluding leases $ (3,172) $ (2,856) $ (3,175) $ (2,872) Finance group Finance receivables, excluding leases 430 418 390 369 Debt (350) (292) (375) (294) |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2023 Beginning of period $ 26 $ 1,973 $ (740) $ 6,349 $ (574) $ 7,034 Net income — — — 269 — 269 Other comprehensive loss — — — — (54) (54) Share-based compensation activity — 58 — — — 58 Dividends declared — — — (4) — (4) Purchases of common stock, — — (236) — — (236) End of period $ 26 $ 2,031 $ (976) $ 6,614 $ (628) $ 7,067 Three months ended October 1, 2022 Beginning of period $ 28 $ 1,953 $ (596) $ 6,271 $ (855) $ 6,801 Net income — — — 225 — 225 Other comprehensive loss — — — — (87) (87) Share-based compensation activity — 27 — — — 27 Dividends declared — — — (4) — (4) Purchases of common stock — — (200) — — (200) End of period $ 28 $ 1,980 $ (796) $ 6,492 $ (942) $ 6,762 Nine months ended September 30, 2023 Beginning of period $ 26 $ 1,880 $ (84) $ 5,903 $ (612) $ 7,113 Net income — — — 723 — 723 Other comprehensive loss — — — — (16) (16) Share-based compensation activity — 151 — — — 151 Dividends declared — — — (12) — (12) Purchases of common stock, — — (892) — — (892) End of period $ 26 $ 2,031 $ (976) $ 6,614 $ (628) $ 7,067 Nine months ended October 1, 2022 Beginning of period $ 28 $ 1,863 $ (157) $ 5,870 $ (789) $ 6,815 Net income — — — 635 — 635 Other comprehensive loss — — — — (153) (153) Share-based compensation activity — 117 — — — 117 Dividends declared — — — (13) — (13) Purchases of common stock — — (639) — — (639) End of period $ 28 $ 1,980 $ (796) $ 6,492 $ (942) $ 6,762 |
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) September 30, October 1, September 30, October 1, Basic weighted-average shares outstanding 197,947 211,307 201,161 214,301 Dilutive effect of stock options 2,045 1,833 2,009 2,167 Diluted weighted-average shares outstanding 199,992 213,140 203,170 216,468 |
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 loss before reclassifications — (19) (1) (20) Reclassified from Accumulated other comprehensive loss — — 4 4 Balance at September 30, 2023 $ (516) $ (113) $ 1 $ (628) Balance at January 1, 2022 $ (799) $ 9 $ 1 $ (789) Other comprehensive loss before reclassifications — (201) (4) (205) Reclassified from Accumulated other comprehensive loss 52 — — 52 Balance at October 1, 2022 $ (747) $ (192) $ (3) $ (942) |
Schedule of Before and After-Tax Components of Other Comprehensive Income (Loss) | The before and after-tax components of Other comprehensive loss are presented below: September 30, 2023 October 1, 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 $ (4) $ 17 Amortization of prior service cost* 2 (1) 1 2 (1) 1 Pension and postretirement benefits adjustments, net — — — 23 (5) 18 Foreign currency translation adjustments (51) — (51) (97) — (97) Deferred gains (losses) on hedge contracts: Current deferrals (6) 2 (4) (11) 3 (8) Reclassification adjustments 2 (1) 1 — — — Deferred gains (losses) on hedge contracts, net (4) 1 (3) (11) 3 (8) Total $ (55) $ 1 $ (54) $ (85) $ (2) $ (87) Nine Months Ended Pension and postretirement benefits adjustments: Amortization of net actuarial (gain) loss* $ (5) $ 2 $ (3) $ 63 $ (15) $ 48 Amortization of prior service cost* 6 (3) 3 6 (2) 4 Pension and postretirement benefits adjustments, net 1 (1) — 69 (17) 52 Foreign currency translation adjustments (19) — (19) (201) — (201) Deferred gains (losses) on hedge contracts: Current deferrals (3) 2 (1) (6) 2 (4) Reclassification adjustments 6 (2) 4 — — — Deferred gains (losses) on hedge contracts, net 3 — 3 (6) 2 (4) Total $ (15) $ (1) $ (16) $ (138) $ (15) $ (153) *These components of other comprehensive loss 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) | 9 Months Ended |
Sep. 30, 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 from continuing operations before income taxes, are included in the table below: Three Months Ended Nine Months Ended (In millions) September 30, October 1, September 30, October 1, Revenues Textron Aviation $ 1,338 $ 1,167 $ 3,849 $ 3,491 Bell 754 754 2,076 2,275 Textron Systems 309 292 921 858 Industrial 922 849 2,880 2,558 Textron eAviation 7 5 22 10 Finance 13 11 43 41 Total revenues $ 3,343 $ 3,078 $ 9,791 $ 9,233 Segment Profit Textron Aviation $ 160 $ 131 $ 456 $ 390 Bell 77 74 202 219 Textron Systems 41 31 112 97 Industrial 51 36 171 112 Textron eAviation (19) (7) (40) (14) Finance 22 7 42 26 Segment profit 332 272 943 830 Corporate expenses and other, net (38) (21) (98) (93) Interest expense, net for Manufacturing group (16) (21) (49) (77) LIFO inventory provision (26) (13) (86) (42) Intangible asset amortization (10) (13) (30) (39) Non-service components of pension and postretirement income, net 59 60 177 180 Income from continuing operations before income taxes $ 301 $ 264 $ 857 $ 759 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Our revenues for our segments disaggregated by major product type are presented below: Three Months Ended Nine Months Ended (In millions) September 30, October 1, September 30, October 1, Aircraft $ 891 $ 733 $ 2,529 $ 2,235 Aftermarket parts and services 447 434 1,320 1,256 Textron Aviation 1,338 1,167 3,849 3,491 Military aircraft and support programs 472 376 1,252 1,375 Commercial helicopters, parts and services 282 378 824 900 Bell 754 754 2,076 2,275 Textron Systems 309 292 921 858 Fuel systems and functional components 465 436 1,476 1,335 Specialized vehicles 457 413 1,404 1,223 Industrial 922 849 2,880 2,558 Textron eAviation 7 5 22 10 Finance 13 11 43 41 Total revenues $ 3,343 $ 3,078 $ 9,791 $ 9,233 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 September 30, 2023 Customer type: Commercial $ 1,302 $ 270 $ 66 $ 915 $ 7 $ 13 $ 2,573 U.S. Government 36 484 243 7 — — 770 Total revenues $ 1,338 $ 754 $ 309 $ 922 $ 7 $ 13 $ 3,343 Geographic location: United States $ 906 $ 573 $ 275 $ 488 $ 4 $ 4 $ 2,250 Europe 133 41 10 174 2 — 360 Other international 299 140 24 260 1 9 733 Total revenues $ 1,338 $ 754 $ 309 $ 922 $ 7 $ 13 $ 3,343 Three months ended October 1, 2022 Customer type: Commercial $ 1,134 $ 362 $ 70 $ 849 $ 5 $ 11 $ 2,431 U.S. Government 33 392 222 — — — 647 Total revenues $ 1,167 $ 754 $ 292 $ 849 $ 5 $ 11 $ 3,078 Geographic location: United States $ 872 $ 534 $ 261 $ 470 $ 3 $ 3 $ 2,143 Europe 93 47 10 153 1 1 305 Other international 202 173 21 226 1 7 630 Total revenues $ 1,167 $ 754 $ 292 $ 849 $ 5 $ 11 $ 3,078 Nine months ended September 30, 2023 Customer type: Commercial $ 3,730 $ 803 $ 210 $ 2,866 $ 22 $ 43 $ 7,674 U.S. Government 119 1,273 711 14 — — 2,117 Total revenues $ 3,849 $ 2,076 $ 921 $ 2,880 $ 22 $ 43 $ 9,791 Geographic location: United States $ 2,675 $ 1,567 $ 824 $ 1,548 $ 12 $ 12 $ 6,638 Europe 358 95 41 579 8 1 1,082 Other international 816 414 56 753 2 30 2,071 Total revenues $ 3,849 $ 2,076 $ 921 $ 2,880 $ 22 $ 43 $ 9,791 Nine months ended October 1, 2022 Customer type: Commercial $ 3,408 $ 875 $ 201 $ 2,549 $ 10 $ 41 $ 7,084 U.S. Government 83 1,400 657 9 — — 2,149 Total revenues $ 3,491 $ 2,275 $ 858 $ 2,558 $ 10 $ 41 $ 9,233 Geographic location: United States $ 2,380 $ 1,708 $ 775 $ 1,362 $ 4 $ 13 $ 6,242 Europe 451 118 28 528 4 2 1,131 Other international 660 449 55 668 2 26 1,860 Total revenues $ 3,491 $ 2,275 $ 858 $ 2,558 $ 10 $ 41 $ 9,233 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Sep. 30, 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 Nine Months Ended (In millions) September 30, October 1, September 30, October 1, Pension Benefits Service cost $ 17 $ 28 $ 50 $ 81 Interest cost 91 68 273 205 Expected return on plan assets (152) (152) (457) (458) Amortization of net actuarial loss — 22 1 66 Amortization of prior service cost 3 3 9 9 Net periodic benefit income* $ (41) $ (31) $ (124) $ (97) Postretirement Benefits Other Than Pensions Service cost $ 1 $ 1 $ 2 $ 2 Interest cost 2 1 6 4 Amortization of net actuarial gain (2) (1) (6) (3) Amortization of prior service credit (1) (1) (3) (3) Net periodic benefit income $ — $ — $ (1) $ — |
Basis of Presentation (Details)
Basis of Presentation (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) $ / shares | Oct. 01, 2022 USD ($) $ / shares | Sep. 30, 2023 USD ($) borrowing_group $ / shares | Oct. 01, 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 (decrease) in segment profit | $ 18 | $ (3) | $ 36 | $ (24) |
Change in accounting estimate financial effect, increase (decrease) in net income | $ 14 | $ (2) | $ 28 | $ (18) |
Change in accounting estimate financial effect increase (decrease) in earnings per diluted share (in dollars per share) | $ / shares | $ 0.07 | $ (0.01) | $ 0.14 | $ (0.08) |
Accounts Receivable and Finan_3
Accounts Receivable and Finance Receivables - Accounts Receivable (Details) - Manufacturing group - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts Receivable | ||
Accounts receivable | $ 913 | $ 879 |
Allowance for credit losses | (21) | (24) |
Total accounts receivable, net | 892 | 855 |
Commercial | ||
Accounts Receivable | ||
Accounts receivable | 813 | 755 |
U.S. Government | ||
Accounts Receivable | ||
Accounts receivable | $ 100 | $ 124 |
Accounts Receivable and Finan_4
Accounts Receivable and Finance Receivables - Finance Receivables (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Finance Receivables | ||
Finance receivables | $ 624 | $ 587 |
Allowance for credit losses | (25) | (24) |
Total finance receivables, net | $ 599 | $ 563 |
Accounts Receivable and Finan_5
Accounts Receivable and Finance Receivables - Finance Receivable Portfolio Quality (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | $ 624 | $ 587 |
60+ days contractual delinquency as a percentage of finance receivables | 1.44% | 0.17% |
Current and less than 31 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | $ 614 | $ 579 |
31-60 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | 1 | 7 |
61-90 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | 5 | 0 |
Over 90 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | $ 4 | $ 1 |
Performing | ||
Financing Receivable, Past Due [Line Items] | ||
Financing percentage receivable originating since the beginning of 2021 | 43% | |
Financing receivable percentage originating from 2018 to 2020 | 27% | |
Nonperforming | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual as a percentage of finance receivables | 2.56% | 7.84% |
Nonperforming | Watchlist | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | $ 23 | $ 26 |
Financing receivable percentage originating since the beginning of 2020 | 100% | |
Nonperforming | Nonaccrual | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | $ 16 | 46 |
Financing receivable percentage originating from 2018 to 2020 | 41% | |
Nonperforming | Minimum | ||
Financing Receivable, Past Due [Line Items] | ||
Number of months of contractual delinquency to classify accounts as nonaccrual unless such collection is not doubtful | 3 months | |
Performing | ||
Financing Receivable, Past Due [Line Items] | ||
Finance receivables | $ 585 | $ 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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Receivables [Abstract] | ||
Finance receivables evaluated collectively | $ 523 | $ 450 |
Finance receivables evaluated individually | 16 | 46 |
Allowance for credit losses based on collective evaluation | 22 | 21 |
Allowance for credit losses based on individual evaluation | 3 | 3 |
Impaired finance receivables with specific allowance for credit losses | 11 | 15 |
Impaired finance receivables with no specific allowance for credit losses | 5 | 31 |
Unpaid principal balance of impaired finance receivables | 26 | 60 |
Allowance for credit losses on impaired finance receivables | 3 | 3 |
Average recorded investment of impaired finance receivables | $ 30 | $ 67 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Inventories | ||
Finished goods | $ 1,178 | $ 991 |
Work in process | 1,877 | 1,540 |
Raw materials and components | 1,152 | 1,019 |
Total inventories | $ 4,207 | $ 3,550 |
Warranty Liability (Details)
Warranty Liability (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Changes in warranty liability | ||
Beginning of period | $ 149 | $ 127 |
Provision | 51 | 51 |
Settlements | (53) | (46) |
Adjustments | 17 | 11 |
End of period | $ 164 | $ 143 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Leases [Abstract] | ||||
Remaining lease terms | 25 years | 25 years | ||
Operating lease - option to extend | true | |||
Operating lease - option to extend the lease, term | 20 years | 20 years | ||
Operating lease cost | $ 18 | $ 17 | $ 52 | $ 51 |
Cash paid for operating lease liabilities | 51 | 51 | ||
Noncash lease transactions | $ 32 | $ 34 |
Leases - Balance Sheet and Othe
Leases - Balance Sheet and Other Information (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Operating leases: | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Other assets | $ 362 | $ 372 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Other current liabilities | $ 53 | $ 54 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Other liabilities | $ 319 | $ 326 |
Weighted-average remaining lease term (in years) | ||
Weighted-average remaining lease term (in years) | 10 years 2 months 12 days | 10 years 4 months 24 days |
Weighted-average discount rate | ||
Weighted-average discount rate | 4.41% | 4.14% |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Operating Leases | |
Remainder of 2023 | $ 19 |
2024 | 65 |
2025 | 57 |
2026 | 44 |
2027 | 39 |
Thereafter | $ 249 |
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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | May 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 | $ 487 | $ 487 | $ 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 | 1 | 1 | ||
Derivative liability, fair value | $ 9 | 9 | 11 | |
Finance group | CME Term Secured Overnight Funding Rate | Floating Rate Junior Subordinated Notes | Junior Subordinated Debt | ||||
Assets and Liabilities Recorded at Fair Value on a Recurring Basis | ||||
Debt instrument description of variable rate basis after specified term at fixed rate | three-month CME Term Secured Overnight Funding Rate | |||
Interest rate spread | 1.99661% | |||
Finance group | Interest rate swap | Cash Flow Hedging | ||||
Assets and Liabilities Recorded at Fair Value on a Recurring Basis | ||||
Derivative asset, fair value | $ 9 | 9 | 8 | |
Finance group | Interest Rate Swap, Maturing in August 2025 to August 2028 | Cash Flow Hedging | ||||
Assets and Liabilities Recorded at Fair Value on a Recurring Basis | ||||
Notional amounts | $ 185 | $ 185 | ||
Derivative, weighted-average fixed interest rate | 5.17% | 5.17% | ||
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 | |||
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 | |||
Derivative, fixed interest rate | 2.75% |
Derivative Instruments and Fa_4
Derivative Instruments and Fair Value Measurements - Assets and Liabilities not Recorded at Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Manufacturing group | Carrying Value | ||
Financial instruments not reflected at fair value | ||
Debt | $ (3,172) | $ (3,175) |
Manufacturing group | Estimated Fair value | ||
Financial instruments not reflected at fair value | ||
Debt | (2,856) | (2,872) |
Finance group | Carrying Value | ||
Financial instruments not reflected at fair value | ||
Debt | (350) | (375) |
Finance receivables, excluding leases | 430 | 390 |
Finance group | Estimated Fair value | ||
Financial instruments not reflected at fair value | ||
Debt | (292) | (294) |
Finance receivables, excluding leases | $ 418 | $ 369 |
Shareholders' Equity - Reconcil
Shareholders' Equity - Reconciliation of Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | $ 7,034 | $ 6,801 | $ 7,113 | $ 6,815 |
Net income | 269 | 225 | 723 | 635 |
Other comprehensive loss | (54) | (87) | (16) | (153) |
Share-based compensation activity | 58 | 27 | 151 | 117 |
Dividends declared | (4) | (4) | (12) | (13) |
Purchases of common stock, including excise tax | (236) | (200) | (892) | (639) |
Balance at end of period | 7,067 | $ 6,762 | 7,067 | $ 6,762 |
Excise taxes on common share repurchases | $ 1 | $ 7 | ||
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 | $ 26 | $ 28 | $ 26 | $ 28 |
Balance at end of period | 26 | 28 | 26 | 28 |
Capital Surplus | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | 1,973 | 1,953 | 1,880 | 1,863 |
Share-based compensation activity | 58 | 27 | 151 | 117 |
Balance at end of period | 2,031 | 1,980 | 2,031 | 1,980 |
Treasury Stock | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | (740) | (596) | (84) | (157) |
Purchases of common stock, including excise tax | (236) | (200) | (892) | (639) |
Balance at end of period | (976) | (796) | (976) | (796) |
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | 6,349 | 6,271 | 5,903 | 5,870 |
Net income | 269 | 225 | 723 | 635 |
Dividends declared | (4) | (4) | (12) | (13) |
Balance at end of period | 6,614 | 6,492 | 6,614 | 6,492 |
Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | (574) | (855) | (612) | (789) |
Other comprehensive loss | (54) | (87) | (16) | (153) |
Balance at end of period | $ (628) | $ (942) | $ (628) | $ (942) |
Shareholders' Equity - Earnings
Shareholders' Equity - Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Weighted-average shares outstanding for basic and diluted EPS | ||||
Basic weighted-average shares outstanding (in shares) | 197,947 | 211,307 | 201,161 | 214,301 |
Dilutive effect of stock options (in shares) | 2,045 | 1,833 | 2,009 | 2,167 |
Diluted weighted-average shares outstanding (in shares) | 199,992 | 213,140 | 203,170 | 216,468 |
Stock options | ||||
Weighted-average shares outstanding for basic and diluted EPS | ||||
Anti-dilutive effect of weighted average shares (in shares) | 1,000 | 1,000 | 1,700 | 1,000 |
Shareholders' Equity - Accumula
Shareholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 7,113 | $ 6,815 |
Other comprehensive loss before reclassifications | (20) | (205) |
Reclassified from Accumulated other comprehensive loss | 4 | 52 |
Balance at end of period | 7,067 | 6,762 |
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 | (628) | (942) |
Pension and Postretirement Benefits Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (516) | (799) |
Other comprehensive loss before reclassifications | 0 | 0 |
Reclassified from Accumulated other comprehensive loss | 0 | 52 |
Balance at end of period | (516) | (747) |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (94) | 9 |
Other comprehensive loss before reclassifications | (19) | (201) |
Reclassified from Accumulated other comprehensive loss | 0 | 0 |
Balance at end of period | (113) | (192) |
Deferred Gains (Losses) on Hedge Contracts | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (2) | 1 |
Other comprehensive loss before reclassifications | (1) | (4) |
Reclassified from Accumulated other comprehensive loss | 4 | 0 |
Balance at end of period | $ 1 | $ (3) |
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 | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Pension and postretirement benefits adjustments, pre-tax: | ||||
Amortization of net actuarial (gain) loss, pre-tax | $ (2) | $ 21 | $ (5) | $ 63 |
Amortization of prior service cost, pre-tax | 2 | 2 | 6 | 6 |
Pension and postretirement benefits adjustments, net, pre-tax | 0 | 23 | 1 | 69 |
Pension and postretirement benefits adjustments, tax: | ||||
Amortization of net actuarial (gain) loss, tax (expense) benefit | 1 | (4) | 2 | (15) |
Amortization of prior service cost, tax (expense) benefit | (1) | (1) | (3) | (2) |
Pension and postretirement benefits adjustments, net, tax (expense) benefit | 0 | (5) | (1) | (17) |
Pension and postretirement benefits adjustments, after-tax: | ||||
Amortization of net actuarial (gain) loss, after-tax | (1) | 17 | (3) | 48 |
Amortization of prior period service cost, after-tax | 1 | 1 | 3 | 4 |
Pension and postretirement benefits adjustments, net, after-tax | 0 | 18 | 0 | 52 |
Foreign currency translation adjustments, pre-tax: | ||||
Foreign currency translation adjustments, pre-tax | (51) | (97) | (19) | (201) |
Foreign currency translation adjustments, tax: | ||||
Foreign currency translation adjustments, tax (expense) benefit | 0 | 0 | 0 | 0 |
Foreign currency translation adjustments, after-tax: | ||||
Foreign currency translation adjustments, after-tax | (51) | (97) | (19) | (201) |
Deferred gains (losses) on hedge contracts, pre-tax: | ||||
Current deferrals, pre-tax | (6) | (11) | (3) | (6) |
Reclassification adjustments, pre-tax | 2 | 0 | 6 | 0 |
Deferred gains (losses) on hedge contracts, net, pre-tax | (4) | (11) | 3 | (6) |
Deferred gains (losses) on hedge contracts, tax: | ||||
Current deferrals, tax (expense) benefit | 2 | 3 | 2 | 2 |
Reclassification adjustments, tax (expense) benefit | (1) | 0 | (2) | 0 |
Deferred gains (losses) on hedge contracts, net, tax (expense) benefit | 1 | 3 | 0 | 2 |
Deferred gains (losses) on hedge contracts, after-tax: | ||||
Current deferrals, after-tax | (4) | (8) | (1) | (4) |
Reclassification adjustments, after-tax | 1 | 0 | 4 | 0 |
Deferred gains (losses) on hedge contracts, net, after-tax | (3) | (8) | 3 | (4) |
Other comprehensive income (loss), pre-tax | (55) | (85) | (15) | (138) |
Other comprehensive income (loss), tax (expense) benefit | 1 | (2) | (1) | (15) |
Other comprehensive loss | $ (54) | $ (87) | $ (16) | $ (153) |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Revenues | ||||
Total revenues | $ 3,343 | $ 3,078 | $ 9,791 | $ 9,233 |
Reconciliation of segment profit to income from continuing operations before income taxes | ||||
Interest expense, net for Manufacturing group | (19) | (24) | (58) | (87) |
Non-service components of pension and postretirement income, net | 59 | 60 | 177 | 180 |
Income from continuing operations before income taxes | 301 | 264 | 857 | 759 |
Operating Segment | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||
Segment profit | 332 | 272 | 943 | 830 |
Reconciling Items | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||
Corporate expenses and other, net | (38) | (21) | (98) | (93) |
LIFO inventory provision | (26) | (13) | (86) | (42) |
Intangible asset amortization | (10) | (13) | (30) | (39) |
Non-service components of pension and postretirement income, net | 59 | 60 | 177 | 180 |
Textron Aviation | ||||
Revenues | ||||
Total revenues | 1,338 | 1,167 | 3,849 | 3,491 |
Bell | ||||
Revenues | ||||
Total revenues | 754 | 754 | 2,076 | 2,275 |
Textron Systems | ||||
Revenues | ||||
Total revenues | 309 | 292 | 921 | 858 |
Industrial | ||||
Revenues | ||||
Total revenues | 922 | 849 | 2,880 | 2,558 |
Textron eAviation | ||||
Revenues | ||||
Total revenues | 7 | 5 | 22 | 10 |
Finance | ||||
Revenues | ||||
Total revenues | 13 | 11 | 43 | 41 |
Manufacturing group | Reconciling Items | ||||
Reconciliation of segment profit to income from continuing operations before income taxes | ||||
Interest expense, net for Manufacturing group | (16) | (21) | (49) | (77) |
Manufacturing group | Textron Aviation | Operating Segment | ||||
Revenues | ||||
Total revenues | 1,338 | 1,167 | 3,849 | 3,491 |
Reconciliation of segment profit to income from continuing operations before income taxes | ||||
Segment profit | 160 | 131 | 456 | 390 |
Manufacturing group | Bell | Operating Segment | ||||
Revenues | ||||
Total revenues | 754 | 754 | 2,076 | 2,275 |
Reconciliation of segment profit to income from continuing operations before income taxes | ||||
Segment profit | 77 | 74 | 202 | 219 |
Manufacturing group | Textron Systems | Operating Segment | ||||
Revenues | ||||
Total revenues | 309 | 292 | 921 | 858 |
Reconciliation of segment profit to income from continuing operations before income taxes | ||||
Segment profit | 41 | 31 | 112 | 97 |
Manufacturing group | Industrial | Operating Segment | ||||
Revenues | ||||
Total revenues | 922 | 849 | 2,880 | 2,558 |
Reconciliation of segment profit to income from continuing operations before income taxes | ||||
Segment profit | 51 | 36 | 171 | 112 |
Manufacturing group | Textron eAviation | Operating Segment | ||||
Revenues | ||||
Total revenues | 7 | 5 | 22 | 10 |
Reconciliation of segment profit to income from continuing operations before income taxes | ||||
Segment profit | (19) | (7) | (40) | (14) |
Finance group | ||||
Revenues | ||||
Total revenues | 13 | 11 | 43 | 41 |
Finance group | Finance | Operating Segment | ||||
Revenues | ||||
Total revenues | 13 | 11 | 43 | 41 |
Reconciliation of segment profit to income from continuing operations before income taxes | ||||
Segment profit | $ 22 | $ 7 | $ 42 | $ 26 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 3,343 | $ 3,078 | $ 9,791 | $ 9,233 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,250 | 2,143 | 6,638 | 6,242 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 360 | 305 | 1,082 | 1,131 |
Other international | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 733 | 630 | 2,071 | 1,860 |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,573 | 2,431 | 7,674 | 7,084 |
U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 770 | 647 | 2,117 | 2,149 |
Textron Aviation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,338 | 1,167 | 3,849 | 3,491 |
Textron Aviation | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 906 | 872 | 2,675 | 2,380 |
Textron Aviation | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 133 | 93 | 358 | 451 |
Textron Aviation | Other international | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 299 | 202 | 816 | 660 |
Textron Aviation | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,302 | 1,134 | 3,730 | 3,408 |
Textron Aviation | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 36 | 33 | 119 | 83 |
Textron Aviation | Aircraft | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 891 | 733 | 2,529 | 2,235 |
Textron Aviation | Aftermarket parts and services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 447 | 434 | 1,320 | 1,256 |
Bell | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 754 | 754 | 2,076 | 2,275 |
Bell | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 573 | 534 | 1,567 | 1,708 |
Bell | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 41 | 47 | 95 | 118 |
Bell | Other international | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 140 | 173 | 414 | 449 |
Bell | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 270 | 362 | 803 | 875 |
Bell | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 484 | 392 | 1,273 | 1,400 |
Bell | Military aircraft and support programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 472 | 376 | 1,252 | 1,375 |
Bell | Commercial helicopters, parts and services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 282 | 378 | 824 | 900 |
Textron Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 309 | 292 | 921 | 858 |
Textron Systems | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 275 | 261 | 824 | 775 |
Textron Systems | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 10 | 10 | 41 | 28 |
Textron Systems | Other international | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 24 | 21 | 56 | 55 |
Textron Systems | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 66 | 70 | 210 | 201 |
Textron Systems | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 243 | 222 | 711 | 657 |
Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 922 | 849 | 2,880 | 2,558 |
Industrial | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 488 | 470 | 1,548 | 1,362 |
Industrial | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 174 | 153 | 579 | 528 |
Industrial | Other international | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 260 | 226 | 753 | 668 |
Industrial | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 915 | 849 | 2,866 | 2,549 |
Industrial | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 7 | 0 | 14 | 9 |
Industrial | Fuel systems and functional components | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 465 | 436 | 1,476 | 1,335 |
Industrial | Specialized vehicles | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 457 | 413 | 1,404 | 1,223 |
Textron eAviation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 7 | 5 | 22 | 10 |
Textron eAviation | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4 | 3 | 12 | 4 |
Textron eAviation | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2 | 1 | 8 | 4 |
Textron eAviation | Other international | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1 | 1 | 2 | 2 |
Textron eAviation | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 7 | 5 | 22 | 10 |
Textron eAviation | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Finance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 13 | 11 | 43 | 41 |
Finance | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4 | 3 | 12 | 13 |
Finance | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 1 | 1 | 2 |
Finance | Other international | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 9 | 7 | 30 | 26 |
Finance | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 13 | 11 | 43 | 41 |
Finance | U.S. Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Revenues - Remaining Performanc
Revenues - Remaining Performance Obligations (Details) $ in Billions | Sep. 30, 2023 USD ($) |
Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligation | $ 14.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligation, percent | 70% |
Remaining performance obligation, expected timing of satisfaction | 15 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 | 26% |
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 | 9 Months Ended | |||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | Dec. 31, 2022 | |
Contract Assets and Liabilities | |||||
Contract assets | $ 513 | $ 513 | $ 680 | ||
Contract liabilities | 1,700 | 1,700 | $ 1,500 | ||
Revenue recognized included in contract liabilities | $ 70 | $ 130 | $ 766 | $ 629 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Pension Benefits | ||||
Net periodic benefit income | ||||
Service cost | $ 17 | $ 28 | $ 50 | $ 81 |
Interest cost | 91 | 68 | 273 | 205 |
Expected return on plan assets | (152) | (152) | (457) | (458) |
Amortization of net actuarial loss | 0 | 22 | 1 | 66 |
Amortization of prior service cost | 3 | 3 | 9 | 9 |
Net periodic benefit income | (41) | (31) | (124) | (97) |
Pension Benefits | United States | ||||
Net periodic benefit income | ||||
Cost associated with the defined contribution component | 2 | 2 | 8 | 9 |
Postretirement Benefits Other Than Pensions | ||||
Net periodic benefit income | ||||
Service cost | 1 | 1 | 2 | 2 |
Interest cost | 2 | 1 | 6 | 4 |
Amortization of net actuarial loss | (2) | (1) | (6) | (3) |
Amortization of prior service cost | (1) | (1) | (3) | (3) |
Net periodic benefit income | $ 0 | $ 0 | $ (1) | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 10.60% | 14.80% | 15.60% | 16.20% |
U.S. federal statutory income tax rate | 21% | 21% | 21% | 21% |
Impact of withholding taxes due to the repatriation of cash related to a non-US jurisdiction. | $ 13 |