QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip code) |
Title of each class | Trading Symbol (s) | Name of each exchange on which registered | ||||||
New York Stock Exchange ( |
þ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||
Smaller reporting company | Emerging growth company |
Page | ||||||||
Three Months Ended | ||||||||
(In millions, except per share amounts) | March 30, 2024 | April 1, 2023 | ||||||
Revenues | ||||||||
Manufacturing product revenues | $ | $ | ||||||
Manufacturing service revenues | ||||||||
Finance revenues | ||||||||
Total revenues | ||||||||
Costs, expenses and other | ||||||||
Cost of products sold | ||||||||
Cost of services sold | ||||||||
Selling and administrative expense | ||||||||
Interest expense, net | ||||||||
Special charges | ||||||||
Non-service components of pension and postretirement income, net | ( | ( | ||||||
Total costs, expenses and other | ||||||||
Income before income taxes | ||||||||
Income tax expense | ||||||||
Net income | $ | $ | ||||||
Earnings per share | ||||||||
Basic | $ | $ | ||||||
Diluted | $ | $ | ||||||
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Net income | $ | $ | ||||||
Other comprehensive income (loss), net of tax | ||||||||
Pension and postretirement benefits adjustments, net of reclassifications | ||||||||
Foreign currency translation adjustments | ( | |||||||
Deferred losses on hedge contracts, net of reclassifications | ( | ( | ||||||
Other comprehensive income (loss) | ( | |||||||
Comprehensive income | $ | $ |
(Dollars in millions) | March 30, 2024 | December 30, 2023 | ||||||
Assets | ||||||||
Manufacturing group | ||||||||
Cash and equivalents | $ | $ | ||||||
Accounts receivable, net | ||||||||
Inventories | ||||||||
Other current assets | ||||||||
Total current assets | ||||||||
Property, plant and equipment, less accumulated depreciation and amortization of $ | ||||||||
Goodwill | ||||||||
Other assets | ||||||||
Total Manufacturing group assets | ||||||||
Finance group | ||||||||
Cash and equivalents | ||||||||
Finance receivables, net | ||||||||
Other assets | ||||||||
Total Finance group assets | ||||||||
Total assets | $ | $ | ||||||
Liabilities and shareholders’ equity | ||||||||
Liabilities | ||||||||
Manufacturing group | ||||||||
Current portion of long-term debt | $ | $ | ||||||
Accounts payable | ||||||||
Other current liabilities | ||||||||
Total current liabilities | ||||||||
Other liabilities | ||||||||
Long-term debt | ||||||||
Total Manufacturing group liabilities | ||||||||
Finance group | ||||||||
Other liabilities | ||||||||
Debt | ||||||||
Total Finance group liabilities | ||||||||
Total liabilities | ||||||||
Shareholders’ equity | ||||||||
Common stock | ||||||||
Capital surplus | ||||||||
Treasury stock | ( | ( | ||||||
Retained earnings | ||||||||
Accumulated other comprehensive loss | ( | ( | ||||||
Total shareholders’ equity | ||||||||
Total liabilities and shareholders’ equity | $ | $ | ||||||
Common shares outstanding (in thousands) |
Consolidated | ||||||||
(In millions) | 2024 | 2023 | ||||||
Cash flows from operating activities | ||||||||
Net income | $ | $ | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Non-cash items: | ||||||||
Depreciation and amortization | ||||||||
Deferred income taxes | ( | ( | ||||||
Other, net | ||||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable, net | ( | ( | ||||||
Inventories | ( | ( | ||||||
Other assets | ||||||||
Accounts payable | ||||||||
Other liabilities | ( | ( | ||||||
Income taxes, net | ||||||||
Pension, net | ( | ( | ||||||
Captive finance receivables, net | ||||||||
Other operating activities, net | ||||||||
Net cash provided by (used in) operating activities | ( | |||||||
Cash flows from investing activities | ||||||||
Capital expenditures | ( | ( | ||||||
Net proceeds from corporate-owned life insurance policies | ||||||||
Proceeds from sale of property, plant and equipment | ||||||||
Finance receivables repaid | ||||||||
Finance receivables originated | ( | |||||||
Other investing activities, net | ||||||||
Net cash used in investing activities | ( | ( | ||||||
Cash flows from financing activities | ||||||||
Principal payments on long-term debt and nonrecourse debt | ( | ( | ||||||
Purchases of Textron common stock | ( | ( | ||||||
Dividends paid | ( | ( | ||||||
Proceeds from options exercised | ||||||||
Other financing activities, net | ( | ( | ||||||
Net cash used in financing activities | ( | ( | ||||||
Effect of exchange rate changes on cash and equivalents | ( | |||||||
Net decrease in cash and equivalents | ( | ( | ||||||
Cash and equivalents at beginning of period | ||||||||
Cash and equivalents at end of period | $ | $ |
Manufacturing Group | Finance Group | |||||||||||||
(In millions) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||
Non-cash items: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Deferred income taxes | ( | ( | ||||||||||||
Other, net | ( | ( | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Accounts receivable, net | ( | ( | ||||||||||||
Inventories | ( | ( | ||||||||||||
Other assets | ||||||||||||||
Accounts payable | ||||||||||||||
Other liabilities | ( | ( | ( | ( | ||||||||||
Income taxes, net | ||||||||||||||
Pension, net | ( | ( | ||||||||||||
Other operating activities, net | ||||||||||||||
Net cash provided by (used in) operating activities | ( | |||||||||||||
Cash flows from investing activities | ||||||||||||||
Capital expenditures | ( | ( | ||||||||||||
Net proceeds from corporate-owned life insurance policies | ||||||||||||||
Proceeds from sale of property, plant and equipment | ||||||||||||||
Finance receivables repaid | ||||||||||||||
Finance receivables originated | ( | ( | ||||||||||||
Other investing activities, net | ||||||||||||||
Net cash provided by (used in) investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Principal payments on long-term debt and nonrecourse debt | ( | ( | ( | ( | ||||||||||
Purchases of Textron common stock | ( | ( | ||||||||||||
Dividends paid | ( | ( | ||||||||||||
Proceeds from options exercised | ||||||||||||||
Other financing activities, net | ( | ( | ||||||||||||
Net cash used in financing activities | ( | ( | ( | ( | ||||||||||
Effect of exchange rate changes on cash and equivalents | ( | |||||||||||||
Net increase (decrease) in cash and equivalents | ( | ( | ||||||||||||
Cash and equivalents at beginning of period | ||||||||||||||
Cash and equivalents at end of period | $ | $ | $ | $ |
(In millions) | March 30, 2024 | December 30, 2023 | ||||||
Commercial | $ | $ | ||||||
U.S. Government contracts | ||||||||
Allowance for credit losses | ( | ( | ||||||
Total accounts receivable, net | $ | $ |
(In millions) | March 30, 2024 | December 30, 2023 | ||||||
Finance receivables | $ | $ | ||||||
Allowance for credit losses | ( | ( | ||||||
Total finance receivables, net | $ | $ |
(Dollars in millions) | March 30, 2024 | December 30, 2023 | ||||||
Performing | $ | $ | ||||||
Watchlist | ||||||||
Nonaccrual | ||||||||
Nonaccrual as a percentage of finance receivables | ||||||||
Current and less than 31 days past due | $ | $ | ||||||
31-60 days past due | ||||||||
61-90 days past due | ||||||||
Over 90 days past due | ||||||||
60+ days contractual delinquency as a percentage of finance receivables |
(In millions) | March 30, 2024 | December 30, 2023 | ||||||
Finance receivables evaluated collectively | $ | $ | ||||||
Finance receivables evaluated individually | ||||||||
Allowance for credit losses based on collective evaluation | ||||||||
Allowance for credit losses based on individual evaluation | ||||||||
Impaired finance receivables with specific allowance for credit losses | $ | $ | ||||||
Impaired finance receivables with no specific allowance for credit losses | ||||||||
Unpaid principal balance of impaired finance receivables | ||||||||
Allowance for credit losses on impaired finance receivables | ||||||||
Average recorded investment of impaired finance receivables |
(In millions) | March 30, 2024 | December 30, 2023 | ||||||
Finished goods | $ | $ | ||||||
Work in process | ||||||||
Raw materials and components | ||||||||
Total inventories | $ | $ |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Beginning of period | $ | $ | ||||||
Provision | ||||||||
Settlements | ( | ( | ||||||
Adjustments* | ( | |||||||
End of period | $ | $ |
(Dollars in millions) | March 30, 2024 | December 30, 2023 | ||||||
$ | $ | |||||||
Weighted-average remaining lease term (in years) | ||||||||
Weighted-average discount rate |
March 30, 2024 | December 30, 2023 | |||||||||||||
Carrying | Estimated | Carrying | Estimated | |||||||||||
(In millions) | Value | Fair Value | Value | Fair Value | ||||||||||
Manufacturing group | ||||||||||||||
Debt, excluding leases | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Finance group | ||||||||||||||
Finance receivables, excluding leases | ||||||||||||||
Debt | ( | ( | ( | ( |
(In millions) | Common Stock | Capital Surplus | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||
Three months ended March 30, 2024 | ||||||||||||||||||||
Beginning of period | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||
Share-based compensation activity | — | — | — | |||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | ||||||||||||||
Purchases of common stock, including excise tax* | — | — | ( | — | — | ( | ||||||||||||||
End of period | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Three months ended April 1, 2023 | ||||||||||||||||||||
Beginning of period | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||
Share-based compensation activity | — | — | — | — | ||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | ||||||||||||||
Purchases of common stock, including excise tax* | — | — | ( | — | — | ( | ||||||||||||||
End of period | $ | $ | $ | ( | $ | $ | ( | $ |
Three Months Ended | ||||||||
(In thousands) | March 30, 2024 | April 1, 2023 | ||||||
Basic weighted-average shares outstanding | ||||||||
Dilutive effect of stock options | ||||||||
Diluted weighted-average shares outstanding |
(In millions) | Pension and Postretirement Benefits Adjustments | Foreign Currency Translation Adjustments | Deferred Gains (Losses) on Hedge Contracts | Accumulated Other Comprehensive Loss | ||||||||||
Balance at December 30, 2023 | $ | ( | $ | ( | $ | $ | ( | |||||||
Other comprehensive loss before reclassifications | ( | ( | ( | |||||||||||
Reclassified from Accumulated other comprehensive loss | ||||||||||||||
Balance at March 30, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Balance at December 31, 2022 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Other comprehensive income before reclassifications | ( | |||||||||||||
Reclassified from Accumulated other comprehensive loss | ||||||||||||||
Balance at April 1, 2023 | $ | ( | $ | ( | $ | ( | $ | ( |
March 30, 2024 | April 1, 2023 | |||||||||||||||||||
(In millions) | Pre-Tax Amount | Tax (Expense) Benefit | After-tax Amount | Pre-Tax Amount | Tax (Expense) Benefit | After-tax Amount | ||||||||||||||
Three Months Ended | ||||||||||||||||||||
Pension and postretirement benefits adjustments: | ||||||||||||||||||||
Amortization of net actuarial gain* | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | ||||||||||
Amortization of prior service cost* | ( | |||||||||||||||||||
Pension and postretirement benefits adjustments, net | ||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ||||||||||||||||||
Deferred losses on hedge contracts: | ||||||||||||||||||||
Current deferrals | ( | ( | ( | ( | ||||||||||||||||
Reclassification adjustments | ( | ( | ||||||||||||||||||
Deferred losses on hedge contracts, net | ( | ( | ( | ( | ||||||||||||||||
Total | $ | ( | $ | $ | ( | $ | $ | $ |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Revenues | ||||||||
Textron Aviation | $ | $ | ||||||
Bell | ||||||||
Textron Systems | ||||||||
Industrial | ||||||||
Textron eAviation | ||||||||
Finance | ||||||||
Total revenues | $ | $ | ||||||
Segment Profit | ||||||||
Textron Aviation | $ | $ | ||||||
Bell | ||||||||
Textron Systems | ||||||||
Industrial | ||||||||
Textron eAviation | ( | ( | ||||||
Finance | ||||||||
Segment profit | ||||||||
Corporate expenses and other, net | ( | ( | ||||||
Interest expense, net for Manufacturing group | ( | ( | ||||||
LIFO inventory provision | ( | ( | ||||||
Intangible asset amortization | ( | ( | ||||||
Special charges | ( | |||||||
Non-service components of pension and postretirement income, net | ||||||||
Income before income taxes | $ | $ |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Aircraft | $ | $ | ||||||
Aftermarket parts and services | ||||||||
Textron Aviation | $ | $ | ||||||
Military aircraft and support programs | ||||||||
Commercial helicopters, parts and services | ||||||||
Bell | $ | $ | ||||||
Textron Systems | $ | $ | ||||||
Fuel systems and functional components | ||||||||
Specialized vehicles | ||||||||
Industrial | $ | $ | ||||||
Textron eAviation | $ | $ | ||||||
Finance | $ | $ | ||||||
Total revenues | $ | $ |
(In millions) | Textron Aviation | Bell | Textron Systems | Industrial | Textron eAviation | Finance | Total | ||||||||||||||||
Three months ended March 30, 2024 | |||||||||||||||||||||||
Customer type: | |||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
U.S. Government | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Geographic location: | |||||||||||||||||||||||
United States | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Europe | |||||||||||||||||||||||
Other international | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Three months ended April 1, 2023 | |||||||||||||||||||||||
Customer type: | |||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
U.S. Government | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Geographic location: | |||||||||||||||||||||||
United States | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Europe | |||||||||||||||||||||||
Other international | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | $ |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Compensation expense | $ | $ | ||||||
Income tax benefit | ( | ( | ||||||
Total compensation expense included in net income | $ | $ |
March 1, 2024 | March 1, 2023 | |||||||
Fair value of options at grant date | $ | $ | ||||||
Dividend yield | ||||||||
Expected volatility | ||||||||
Risk-free interest rate | ||||||||
Expected term (in years) |
(Options in thousands) | Number of Options | Weighted- Average Exercise Price | ||||||
Outstanding at December 30, 2023 | $ | |||||||
Granted | ||||||||
Exercised | ( | ( | ||||||
Forfeited or expired | ( | ( | ||||||
Outstanding at March 30, 2024 | $ | |||||||
Exercisable at March 30, 2024 | $ |
Units Payable in Stock | Units Payable in Cash | ||||||||||||||||
(Shares/Units in thousands) | Number of Shares | Weighted- Average Grant Date Fair Value | Number of Units | Weighted- Average Grant Date Fair Value | |||||||||||||
Outstanding at December 30, 2023, nonvested | $ | $ | |||||||||||||||
Granted | |||||||||||||||||
Vested | ( | ( | ( | ( | |||||||||||||
Forfeited | ( | ( | |||||||||||||||
Outstanding at March 30, 2024, nonvested | $ | $ |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Fair value of awards vested | $ | $ | ||||||
Cash paid |
(Units in thousands) | Number of Units | Weighted- Average Grant Date Fair Value | ||||||
Outstanding at December 30, 2023, nonvested | $ | |||||||
Granted | ||||||||
Outstanding at March 30, 2024, nonvested | $ |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Pension Benefits | ||||||||
Service cost | $ | $ | ||||||
Interest cost | ||||||||
Expected return on plan assets | ( | ( | ||||||
Amortization of net actuarial loss | ||||||||
Amortization of prior service cost | ||||||||
Net periodic benefit income* | $ | ( | $ | ( | ||||
Postretirement Benefits Other Than Pensions | ||||||||
Interest cost | $ | $ | ||||||
Amortization of net actuarial gain | ( | ( | ||||||
Amortization of prior service credit | ( | |||||||
Net periodic benefit income | $ | $ | ( |
(In millions) | Severance Costs | Contract Terminations and Other | Total | ||||||||
Balance at December 30, 2023 | $ | $ | $ | ||||||||
Provision for 2023 Restructuring Plan | |||||||||||
Cash paid | ( | ( | |||||||||
Foreign currency translation | ( | ( | |||||||||
Balance at March 30, 2024 | $ | $ | $ |
Three Months Ended | |||||||||||
(Dollars in millions) | March 30, 2024 | April 1, 2023 | % Change | ||||||||
Revenues | $ | 3,135 | $ | 3,024 | 4% | ||||||
Cost of sales | 2,614 | 2,531 | 3% | ||||||||
Gross margin as a % of Manufacturing revenues | 16.2% | 16.0% | |||||||||
Selling and administrative expense | 316 | 305 | 4% | ||||||||
Interest expense, net | 20 | 20 | —% | ||||||||
Special charges | 14 | — | 100% | ||||||||
Non-service components of pension and postretirement income, net | 66 | 59 | 12% |
(In millions) | March 30, 2024 | December 30, 2023 | ||||||
Textron Aviation | $ | 7,346 | $ | 7,169 | ||||
Bell | 4,549 | 4,780 | ||||||
Textron Systems | 1,822 | 1,950 | ||||||
Total backlog | $ | 13,717 | $ | 13,899 |
Three Months Ended | |||||||||||
(Dollars in millions) | March 30, 2024 | April 1, 2023 | % Change | ||||||||
Revenues: | |||||||||||
Aircraft | $ | 732 | $ | 718 | 2% | ||||||
Aftermarket parts and services | 456 | 431 | 6% | ||||||||
Total revenues | 1,188 | 1,149 | 3% | ||||||||
Operating expenses | 1,045 | 1,024 | 2% | ||||||||
Segment profit | $ | 143 | $ | 125 | 14% | ||||||
Profit margin | 12.0% | 10.9% |
(In millions) | Q1 2024 versus Q1 2023 | ||||
Pricing | $ | 48 | |||
Volume and mix | (9) | ||||
Total change | $ | 39 |
(In millions) | Q1 2024 versus Q1 2023 | ||||
Pricing, net of inflation | $ | 14 | |||
Performance | 6 | ||||
Volume and mix | (2) | ||||
Total change | $ | 18 |
Three Months Ended | |||||||||||
(Dollars in millions) | March 30, 2024 | April 1, 2023 | % Change | ||||||||
Revenues: | |||||||||||
Military aircraft and support programs | $ | 480 | $ | 385 | 25% | ||||||
Commercial helicopters, parts and services | 247 | 236 | 5% | ||||||||
Total revenues | 727 | 621 | 17% | ||||||||
Operating expenses | 647 | 561 | 15% | ||||||||
Segment profit | $ | 80 | $ | 60 | 33% | ||||||
Profit margin | 11.0% | 9.7% |
(In millions) | Q1 2024 versus Q1 2023 | ||||
Volume and mix | $ | 89 | |||
Pricing | 17 | ||||
Total change | $ | 106 |
(In millions) | Q1 2024 versus Q1 2023 | ||||
Performance | $ | 30 | |||
Pricing, net of inflation | 4 | ||||
Volume and mix | (14) | ||||
Total change | $ | 20 |
Three Months Ended | |||||||||||
(Dollars in millions) | March 30, 2024 | April 1, 2023 | % Change | ||||||||
Revenues | $ | 306 | $ | 306 | —% | ||||||
Operating expenses | 268 | 272 | (1)% | ||||||||
Segment profit | $ | 38 | $ | 34 | 12% | ||||||
Profit margin | 12.4% | 11.1% |
(In millions) | Q1 2024 versus Q1 2023 | ||||
Pricing | $ | 4 | |||
Volume | (4) | ||||
Total change | $ | — |
(In millions) | Q1 2024 versus Q1 2023 | ||||
Pricing, net of inflation | $ | 2 | |||
Volume and mix | 1 | ||||
Performance | 1 | ||||
Total change | $ | 4 |
Three Months Ended | |||||||||||
(Dollars in millions) | March 30, 2024 | April 1, 2023 | % Change | ||||||||
Revenues: | |||||||||||
Kautex | $ | 488 | $ | 488 | —% | ||||||
Specialized vehicles | 404 | 444 | (9)% | ||||||||
Total revenues | 892 | 932 | (4)% | ||||||||
Operating expenses | 863 | 891 | (3)% | ||||||||
Segment profit | $ | 29 | $ | 41 | (29)% | ||||||
Profit margin | 3.3% | 4.4% |
(In millions) | Q1 2024 versus Q1 2023 | ||||
Volume and mix | $ | (51) | |||
Foreign exchange | (5) | ||||
Pricing | 16 | ||||
Total change | $ | (40) |
(In millions) | Q1 2024 versus Q1 2023 | ||||
Volume and mix | $ | (14) | |||
Foreign exchange | (1) | ||||
Pricing, net of inflation | 3 | ||||
Total change | $ | (12) |
Three Months Ended | |||||||||||
(Dollars in millions) | March 30, 2024 | April 1, 2023 | % Change | ||||||||
Revenues | $ | 7 | $ | 4 | 120% | ||||||
Operating expenses | 25 | 13 | 158% | ||||||||
Segment loss | $ | (18) | $ | (9) | 186% | ||||||
(In millions) | Q1 2024 versus Q1 2023 | ||||
Volume and mix | $ | 2 | |||
Other | 1 | ||||
Total change | $ | 3 |
(In millions) | Q1 2024 versus Q1 2023 | ||||
Performance and other | $ | (10) | |||
Volume and mix | 1 | ||||
Total change | $ | (9) |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Revenues | $ | 15 | $ | 12 | ||||
Segment profit | 18 | 8 |
(Dollars in millions) | March 30, 2024 | December 30, 2023 | ||||||
Finance receivables | $ | 603 | $ | 609 | ||||
Allowance for credit losses | 21 | 24 | ||||||
Ratio of allowance for credit losses to finance receivables | 3.48% | 3.94% | ||||||
Nonaccrual finance receivables | 13 | 15 | ||||||
Ratio of nonaccrual finance receivables to finance receivables | 2.16% | 2.46% | ||||||
60+ days contractual delinquency | 3 | 4 | ||||||
60+ days contractual delinquency as a percentage of finance receivables | 0.50% | 0.66% |
(Dollars in millions) | March 30, 2024 | December 30, 2023 | ||||||
Manufacturing group | ||||||||
Cash and equivalents | $ | 1,388 | $ | 2,121 | ||||
Debt | 3,175 | 3,526 | ||||||
Shareholders’ equity | 6,931 | 6,987 | ||||||
Capital (debt plus shareholders’ equity) | 10,106 | 10,513 | ||||||
Net debt (net of cash and equivalents) to capital | 20% | 17% | ||||||
Debt to capital | 31% | 34% | ||||||
Finance group | ||||||||
Cash and equivalents | $ | 78 | $ | 60 | ||||
Debt | 342 | 348 |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Operating activities | $ | (30) | $ | 153 | ||||
Investing activities | (60) | (42) | ||||||
Financing activities | (635) | (361) |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Operating activities | $ | 1 | $ | 4 | ||||
Investing activities | 19 | 19 | ||||||
Financing activities | (2) | (15) |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Operating activities | $ | (7) | $ | 163 | ||||
Investing activities | (63) | (29) | ||||||
Financing activities | (637) | (376) |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Reclassification adjustments from investing activities to operating activities: | ||||||||
Cash received from customers | $ | 39 | $ | 23 | ||||
Finance receivable originations for Manufacturing group inventory sales | (17) | (17) | ||||||
Total reclassification adjustments from investing activities to operating activities | $ | 22 | $ | 6 |
Three Months Ended | ||||||||
(In millions) | March 30, 2024 | April 1, 2023 | ||||||
Gross favorable | $ | 43 | $ | 25 | ||||
Gross unfavorable | (30) | (17) | ||||||
Net adjustments | $ | 13 | $ | 8 |
Period (shares in thousands) | Total Number of Shares Purchased * | Average Price Paid per Share (excluding commissions) | Total Number of Shares Purchased as part of Publicly Announced Plan * | Maximum Number of Shares that may yet be Purchased under the Plan | ||||||||||
December 31, 2023 – February 3, 2024 | 500 | $ | 85.63 | 500 | 27,976 | |||||||||
February 4, 2024 – March 2, 2024 | 1,625 | 86.34 | 1,625 | 26,351 | ||||||||||
March 3, 2024 – March 30, 2024 | 1,450 | 92.55 | 1,450 | 24,901 | ||||||||||
Total | 3,575 | $ | 88.76 | 3,575 |
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
101 | The following materials from Textron Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2024, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements. | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
TEXTRON INC. | |||||||||||
Date: | April 25, 2024 | /s/ Mark S. Bamford | |||||||||
Mark S. Bamford Vice President and Corporate Controller (principal accounting officer) |
Date: | April 25, 2024 | /s/ Scott C. Donnelly | |||||||||
Scott C. Donnelly Chairman, President and Chief Executive Officer |
Date: | April 25, 2024 | /s/ Frank T. Connor | |||||||||
Frank T. Connor Executive Vice President and Chief Financial Officer |
Date: | April 25, 2024 | /s/ Scott C. Donnelly | |||||||||
Scott C. Donnelly Chairman, President and Chief Executive Officer |
Date: | April 25, 2024 | /s/ Frank T. Connor | |||||||||
Frank T. Connor Executive Vice President and Chief Financial Officer |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 30, 2024 |
Apr. 01, 2023 |
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Statement of Comprehensive Income [Abstract] | ||
Net income | $ 201 | $ 191 |
Other comprehensive income (loss), net of tax | ||
Pension and postretirement benefits adjustments, net of reclassifications | 1 | 0 |
Foreign currency translation adjustments | (33) | 28 |
Deferred losses on hedge contracts, net of reclassifications | (5) | (2) |
Other comprehensive income (loss) | (37) | 26 |
Comprehensive income | $ 164 | $ 217 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization | $ 5,286 | $ 5,247 |
Basis of Presentation |
3 Months Ended |
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Mar. 30, 2024 | |
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 30, 2023. 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 first quarter of 2024 and 2023, our cumulative catch-up adjustments increased segment profit by $13 million and $8 million, respectively, and net income by $10 million and $6 million, respectively ($0.05 and $0.03 per diluted share, respectively).
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Accounts Receivable and Finance Receivables |
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Mar. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Finance Receivables | Accounts Receivable and Finance Receivables Accounts Receivable Accounts receivable is composed of the following:
Finance Receivables Finance receivables are presented in the following table:
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:
At March 30, 2024, 35% of our performing finance receivables were originated since the beginning of 2022 and 30% were originated from 2019 to 2021 with the remainder prior to 2019. For finance receivables categorized as watchlist, 100% were originated from 2020 to 2021, and for nonaccrual, 100% were originated prior 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.
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Inventories |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories are composed of the following:
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Accounts Payable and Warranty Liability |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Warranty Liability | Accounts Payable and Warranty Liability Accounts Payable Supplier Financing Arrangement We have a financing arrangement with one of our suppliers for a maximum amount of $175 million that extends payment terms for up to 190 days from the receipt of goods and provides for the supplier to be paid by a financial institution earlier than maturity. This financing arrangement expires in June 2024. As of March 30, 2024 and December 30, 2023, the amount due under this supplier financing arrangement was $135 million and $125 million, respectively. Warranty Liability Changes in our warranty liability are as follows:
* Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.
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Leases |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 first quarter of 2024 and 2023, respectively. Variable and short-term lease costs were not significant. Cash paid for operating leases totaled $18 million and $17 million in the first quarter of 2024 and 2023, respectively, and is classified in cash flows from operating activities. Noncash transactions totaled $25 million and $15 million in the first quarter of 2024 and 2023, 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:
At March 30, 2024, maturities of our operating lease liabilities on an undiscounted basis totaled $55 million for the remainder of 2024, $66 million for 2025, $52 million for 2026, $44 million for 2027, $42 million for 2028 and $242 million thereafter.
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Derivative Instruments and Fair Value Measurements |
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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 March 30, 2024 and December 30, 2023, we had foreign currency exchange contracts with notional amounts upon which the contracts were based of $681 million and $478 million, respectively. At March 30, 2024, the fair value amounts of our foreign currency exchange contracts were a $2 million asset and a $10 million liability. At December 30, 2023, the fair value amount of our foreign currency exchange contracts were a $4 million asset and a $3 million liability. Our Finance group enters into interest rate swap agreements to mitigate 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. The fair value of our interest rate 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. At March 30, 2024 and December 30, 2023, we had interest rate swap agreements related to our Floating Rate Junior Subordinated Notes for an aggregate notional amount of $185 million that effectively converts the variable-rate interest for these Notes to a weighted-average fixed rate of 5.17%; these agreements have maturities ranging from August 2025 to August 2028. At March 30, 2024 and December 30, 2023, we had an interest rate swap agreement 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 4.13%. The fair value of our outstanding interest rate swap agreements was a $6 million asset at March 30, 2024 and a $4 million asset at December 30, 2023. 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:
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.
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Shareholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity A reconciliation of Shareholders’ equity is presented below:
*Includes amounts accrued for excise tax imposed on common share repurchases of $2 million for the first quarter of 2024 and $3 million for the first quarter of 2023. Dividends per share of common stock were $0.02 for both the first quarter of 2024 and 2023. 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:
Stock options to purchase 1.0 million and 2.0 million shares of common stock were excluded from the calculation of diluted weighted-average shares outstanding for the first quarter of 2024 and 2023, respectively, as their effect would have been anti-dilutive. Accumulated Other Comprehensive Loss and Other Comprehensive Income (Loss) The components of Accumulated other comprehensive loss are presented below:
The before and after-tax components of Other comprehensive income (loss) are presented below:
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information We operate in, and reported financial information for, the following six operating 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. Segment profit for the manufacturing segments excludes the non-service components of pension and postretirement income, net; LIFO inventory provision; intangible asset amortization; interest expense, net for Manufacturing group; certain corporate expenses; gains/losses on major business dispositions; and special charges. The measurement for the Finance segment includes interest income and expense along with intercompany interest income and expense. Our revenues by segment, along with a reconciliation of segment profit to income before income taxes, are included in the table below:
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Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Disaggregation of Revenues Our revenues disaggregated by major product type are presented below:
Our revenues for our segments by customer type and geographic location are presented below:
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 March 30, 2024, we had $13.7 billion in remaining performance obligations of which we expect to recognize revenues of approximately 85% through 2025, an additional 14% through 2027, and the balance thereafter. Contract Assets and Liabilities Assets and liabilities related to our contracts with customers are reported on a contract-by-contract basis at the end of each reporting period. At March 30, 2024 and December 30, 2023, contract assets totaled $426 million and $513 million, respectively, and contract liabilities totaled $1.9 billion and $1.8 billion, respectively, reflecting timing differences between revenues recognized, billings and payments from customers. We recognized revenues of $327 million and $316 million in the first quarter of 2024 and 2023, respectively, that were included in the contract liability balance at the beginning of each year.
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Share-Based Compensation |
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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:
Compensation expense included stock option expense of $15 million and $14 million in the first quarter of 2024 and 2023, respectively. We typically grant stock appreciation rights to selected non-U.S. employees. At March 30, 2024, outstanding stock appreciation rights totaled 409,232 with a weighted-average exercise price of $62.60 and a weighted-average remaining contractual life of 6.6 years; these units had an intrinsic value of $14 million, compared to $10 million at April 1, 2023. 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:
The stock option activity during the first quarter of 2024 is provided below:
At March 30, 2024, our outstanding options had an aggregate intrinsic value of $247 million and a weighted-average remaining contractual life of 6.4 years. Our exercisable options had an aggregate intrinsic value of $214 million and a weighted-average remaining contractual life of 5.3 years at March 30, 2024. The total intrinsic value of options exercised during the first quarter of 2024 and 2023 was $60 million and $19 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 2024 is provided below:
The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows:
Performance Share Units The activity for our performance share units during the first quarter of 2024 is as follows:
Cash paid under these awards totaled $35 million and $27 million in the first quarter of 2024 and 2023, respectively.
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Retirement Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans | Retirement Plans We provide defined benefit pension plans and other postretirement benefits to eligible employees. The components of net periodic benefit income for these plans are as follows:
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Special Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Charges | Special Charges On April 24, 2024, the Board of Directors approved the expansion of Textron’s 2023 restructuring plan to further reduce operating expenses through headcount reductions. In the first quarter of 2024, both the Shadow and Future Attack Reconnaissance Aircraft programs were cancelled at the Textron Systems and Bell segments, resulting in additional severance costs under the restructuring plan. Additionally, we increased our planned headcount reduction within the Industrial segment due to lower anticipated consumer demand for certain products at the Specialized Vehicles product line and reduced demand for fuel systems from European automotive manufacturers at Kautex. We now expect to incur additional severance costs in the second quarter of 2024 in the range of $25 million to $30 million, largely related to headcount reductions within the Industrial segment. Since inception of the 2023 restructuring plan, we have incurred $140 million in special charges, including severance costs of $52 million, which included $22 million at the Industrial segment, $18 million at the Bell segment and $12 million at the Textron Systems segment; and asset impairment charges of $88 million at the Industrial segment. Special charges in the first quarter of 2024 totaled $14 million, which included $13 million in severance costs and $1 million in asset impairment charges in connection with this plan; we recorded $7 million of these charges at the Textron Systems segment, $5 million at the Bell segment and $2 million at the Industrial segment. Headcount reductions since inception of the plan are expected to total approximately 1,500 positions, representing 4% of our global workforce. We estimate that remaining future cash outlays under this plan will be in the range of $60 million to $65 million, most of which we expect to pay in 2024. We expect charges under this plan to be substantially completed by the end of the first half of 2024. Our restructuring reserve activity is summarized below:
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Income Taxes |
3 Months Ended |
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Mar. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate for the first quarter of 2024 and 2023 was 15.2% and 15.9%, respectively. In the first quarter of 2024, the effective tax rate was lower than the U.S. federal statutory rate of 21%, largely due to the recognition of excess tax benefits related to share-based compensation, the favorable impact of research and development credits, and tax deductions for foreign-derived intangible income. 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.
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Commitments and Contingencies |
3 Months Ended |
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Mar. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to actual and threatened legal proceedings and other claims arising out of the conduct of our business, including proceedings and claims relating to commercial and financial transactions; government contracts; alleged lack of compliance with applicable laws and regulations; disputes with suppliers, production partners or other third parties; product liability; patent and trademark infringement; employment disputes; and environmental, health and safety matters. Some of these legal proceedings and claims seek damages, fines or penalties in substantial amounts or remediation of environmental contamination. As a government contractor, we are subject to audits, reviews and investigations to determine whether our operations are being conducted in accordance with applicable regulatory requirements. Under federal government procurement regulations, certain claims brought by the U.S. Government could result in our suspension or debarment from U.S. Government contracting for a period of time. On the basis of information presently available, we do not believe that existing proceedings and claims will have a material effect on our financial position or results of operations.
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Pay vs Performance Disclosure - USD ($) $ in Millions |
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Mar. 30, 2024 |
Apr. 01, 2023 |
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Pay vs Performance Disclosure | ||
Net income | $ 201 | $ 191 |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation (Policies) |
3 Months Ended |
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Mar. 30, 2024 | |
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.
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Accounts Receivable and Finance Receivables (Tables) |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | Accounts receivable is composed of the following:
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Finance Receivables | Finance receivables are presented in the following table:
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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:
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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:
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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.
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Inventories (Tables) |
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Mar. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories are composed of the following:
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Accounts Payable and Warranty Liability (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Warranty Liability | Changes in our warranty liability are as follows:
* Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.
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Leases (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Balance Sheet and Other Information | Balance sheet and other information related to our operating leases is as follows:
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Derivative Instruments and Fair Value Measurements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Shareholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Shareholder's Equity | A reconciliation of Shareholders’ equity is presented below:
*Includes amounts accrued for excise tax imposed on common share repurchases of $2 million for the first quarter of 2024 and $3 million for the first quarter of 2023.
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Schedule of Weighted-Average Shares Outstanding for Basic and Diluted EPS | The weighted-average shares outstanding for basic and diluted EPS are as follows:
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Schedule of Components of Accumulated Other Comprehensive Income (Loss) | The components of Accumulated other comprehensive loss are presented below:
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Schedule of Before and After-Tax Components of Other Comprehensive Income (Loss) | The before and after-tax components of Other comprehensive income (loss) are presented below:
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Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Revenues by Segment | Our revenues by segment, along with a reconciliation of segment profit to income before income taxes, are included in the table below:
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Reconciliation of Segment Profit to Income 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:
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Revenues (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Our revenues disaggregated by major product type are presented below:
Our revenues for our segments by customer type and geographic location are presented below:
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Share-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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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:
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Stock Option Activity | The stock option activity during the first quarter of 2024 is provided below:
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Restricted Stock Units Activity | The activity for restricted stock units payable in both stock and cash during the first quarter of 2024 is provided below:
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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:
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Performance Share Units Activity | The activity for our performance share units during the first quarter of 2024 is as follows:
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Retirement Plans (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Net Periodic Benefit Income | The components of net periodic benefit income for these plans are as follows:
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Special Charges (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve Activity | Our restructuring reserve activity is summarized below:
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Basis of Presentation (Details) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2024
USD ($)
borrowing_group
$ / shares
|
Apr. 01, 2023
USD ($)
$ / shares
|
|
Change in Accounting Estimate [Line Items] | ||
Number of borrowing groups | borrowing_group | 2 | |
Cumulative catch-up method | ||
Change in Accounting Estimate [Line Items] | ||
Cumulative catch up adjustments, increase in segment profit | $ 13 | $ 8 |
Change in accounting estimate financial effect, increase in net income | $ 10 | $ 6 |
Change in accounting estimate financial effect increase in earnings per diluted share (in dollars per share) | $ / shares | $ 0.05 | $ 0.03 |
Accounts Receivable and Finance Receivables - Accounts Receivable (Details) - Manufacturing group - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
---|---|---|
Accounts Receivable | ||
Accounts receivable, gross | $ 918 | $ 894 |
Allowance for credit losses | (24) | (26) |
Total accounts receivable, net | 894 | 868 |
Commercial | ||
Accounts Receivable | ||
Accounts receivable, gross | 816 | 831 |
U.S. Government | ||
Accounts Receivable | ||
Accounts receivable, gross | $ 102 | $ 63 |
Accounts Receivable and Finance Receivables - Finance Receivables (Details) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
---|---|---|
Finance Receivables | ||
Finance receivables | $ 603 | $ 609 |
Allowance for credit losses | (21) | (24) |
Total finance receivables, net | $ 582 | $ 585 |
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 |
---|---|---|
Mar. 30, 2024 |
Dec. 30, 2023 |
|
Receivables [Abstract] | ||
Finance receivables evaluated collectively | $ 505 | $ 508 |
Finance receivables evaluated individually | 13 | 15 |
Allowance for credit losses based on collective evaluation | 18 | 21 |
Allowance for credit losses based on individual evaluation | 3 | 3 |
Impaired finance receivables with specific allowance for credit losses | 9 | 11 |
Impaired finance receivables with no specific allowance for credit losses | 4 | 4 |
Unpaid principal balance of impaired finance receivables | 20 | 25 |
Allowance for credit losses on impaired finance receivables | 3 | 3 |
Average recorded investment of impaired finance receivables | $ 14 | $ 27 |
Inventories (Details) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
---|---|---|
Inventories | ||
Finished goods | $ 1,148 | $ 1,072 |
Work in process | 1,976 | 1,736 |
Raw materials and components | 1,143 | 1,106 |
Total inventories | $ 4,267 | $ 3,914 |
Accounts Payable and Warranty Liability - Narrative (Details) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
---|---|---|
Supplier Finance Program [Line Items] | ||
Supplier financing maximum commitment | $ 175 | |
Payable under supplier financing arrangement | $ 135 | $ 125 |
Maximum | ||
Supplier Finance Program [Line Items] | ||
Payment terms period under supplier financing arrangement | 190 days |
Accounts Payable and Warranty Liability - Warranty Liability (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
Changes in warranty liability | ||
Beginning of period | $ 172 | $ 149 |
Provision | 17 | 15 |
Settlements | (18) | (18) |
Adjustments | (1) | 3 |
End of period | $ 170 | $ 149 |
Leases - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
Leases [Abstract] | ||
Remaining lease terms | 25 years | |
Operating lease - option to extend | true | |
Operating lease - option to extend the lease, term | 20 years | |
Operating lease cost | $ 18 | $ 17 |
Cash paid for operating lease liabilities | 18 | 17 |
Noncash lease transactions | $ 25 | $ 15 |
Leases - Balance Sheet and Other Information (Details) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
---|---|---|
Operating leases: | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Other assets | $ 382 | $ 371 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Other current liabilities | $ 57 | $ 55 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Other liabilities | $ 334 | $ 326 |
Weighted-average remaining lease term (in years) | ||
Weighted-average remaining lease term (in years) | 10 years 1 month 6 days | 10 years 3 months 18 days |
Weighted-average discount rate | ||
Weighted-average discount rate | 4.69% | 4.70% |
Leases - Maturity of Lease Liabilities (Details) $ in Millions |
Mar. 30, 2024
USD ($)
|
---|---|
Operating Leases | |
Remainder of 2024 | $ 55 |
2025 | 66 |
2026 | 52 |
2027 | 44 |
2028 | 42 |
Thereafter | $ 242 |
Derivative Instruments and Fair Value Measurements - Assets and Liabilities not Recorded at Fair Value (Details) - USD ($) $ in Millions |
Mar. 30, 2024 |
Dec. 30, 2023 |
---|---|---|
Manufacturing group | Carrying Value | ||
Financial instruments not reflected at fair value | ||
Debt | $ (3,168) | $ (3,520) |
Manufacturing group | Estimated Fair value | ||
Financial instruments not reflected at fair value | ||
Debt | (2,965) | (3,342) |
Finance group | Carrying Value | ||
Financial instruments not reflected at fair value | ||
Debt | (342) | (348) |
Finance receivables, excluding leases | 416 | 417 |
Finance group | Estimated Fair value | ||
Financial instruments not reflected at fair value | ||
Debt | (305) | (293) |
Finance receivables, excluding leases | $ 422 | $ 423 |
Shareholders' Equity - Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
Equity [Abstract] | ||
Basic weighted-average shares outstanding (in shares) | 192,800 | 204,835 |
Dilutive effect of stock options (in shares) | 2,060 | 2,176 |
Diluted weighted-average shares outstanding (in shares) | 194,860 | 207,011 |
Anti-dilutive effect of weighted average shares (in shares) | 1,000 | 2,000 |
Segment Information - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 30, 2024
segment
| |
Operating and reportable business segments | |
Number of operating business segments | 6 |
Number of reportable business segments | 6 |
Revenues - Contract Assets and Liabilities (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
Dec. 30, 2023 |
|
Contract Assets and Liabilities | |||
Contract assets | $ 426 | $ 513 | |
Contract liabilities | 1,900 | $ 1,800 | |
Revenue recognized included in contract liabilities | $ 327 | $ 316 |
Share-Based Compensation - Compensation Expense (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Compensation expense | $ 77 | $ 45 |
Income tax benefit | (19) | (11) |
Total compensation expense included in net income | 58 | 34 |
Stock options | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Compensation expense | $ 15 | $ 14 |
Share-Based Compensation - Stock Appreciation Rights (Details) - Stock appreciation rights - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Awards outstanding (in shares) | 409,232 | |
Weighted-average exercise price (in dollars per share) | $ 62.60 | |
Weighted-average remaining contractual life | 6 years 7 months 6 days | |
Intrinsic value | $ 14 | $ 10 |
Share-Based Compensation - Performance Share Units (Details) - Performance Share Units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
Number of Units | ||
Outstanding at beginning of period, nonvested (in shares) | 366 | |
Granted (in shares) | 194 | |
Outstanding at end of period, nonvested (in shares) | 560 | |
Weighted- Average Grant Date Fair Value | ||
Outstanding at beginning of period, nonvested (in dollars per share) | $ 72.23 | |
Granted (in dollars per share) | 88.68 | |
Outstanding at end of period, nonvested (in dollars per share) | $ 77.92 | |
Fair value | ||
Cash paid | $ 35 | $ 27 |
Retirement Plans (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
Pension Benefits | ||
Net periodic benefit income | ||
Service cost | $ 17 | $ 17 |
Interest cost | 90 | 91 |
Expected return on plan assets | (159) | (152) |
Amortization of net actuarial loss | 1 | 0 |
Amortization of prior service cost | 2 | 3 |
Net periodic benefit income | (49) | (41) |
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 | ||
Interest cost | 2 | 2 |
Amortization of net actuarial loss | (2) | (2) |
Amortization of prior service cost | 0 | (1) |
Net periodic benefit income | $ 0 | $ (1) |
Special Charges - Restructuring Reserve Activity (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 30, 2024
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 47 |
Restructuring charges | 13 |
Cash paid | (18) |
Foreign currency translation | (1) |
Ending balance | 41 |
Severance Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 42 |
Restructuring charges | 13 |
Cash paid | (18) |
Foreign currency translation | (1) |
Ending balance | 36 |
Contract Terminations and Other | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 5 |
Restructuring charges | 0 |
Cash paid | 0 |
Foreign currency translation | 0 |
Ending balance | $ 5 |
Income Taxes (Details) |
3 Months Ended | |
---|---|---|
Mar. 30, 2024 |
Apr. 01, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 15.20% | 15.90% |
U.S. federal statutory income tax rate | 21.00% | 21.00% |
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