PROVIDENCE, R.I.--(BUSINESS WIRE)--
Textron Inc. (NYSE: TXT) today announced financial results for the
fourth quarter and full year of 2017, and provided guidance for its 2018
financial outlook.
Net earnings for the quarter were reduced by a provisional tax charge of
$1.00 per share resulting from the enactment of the Tax Cuts and Jobs
Act (“the Tax Act”), and $0.14 per share of restructuring charges. With
these items that were disclosed in an 8-K filing earlier this month, the
company reported a loss from continuing operations of $0.40 per share in
the quarter, compared to income from continuing operations of $0.78 per
share in the fourth quarter of 2016. Adjusted income from continuing
operations, a non-GAAP measure that is defined and reconciled to GAAP in
an attachment to this release, was $0.74 per share for the fourth
quarter of 2017 compared to $0.80 per share in the fourth quarter of
2016.
Revenues in the quarter were $4.0 billion, up 5.0 percent from the
fourth quarter of 2016. Textron segment profit in the quarter was $360
million, down $31 million from the fourth quarter of 2016.
For the full year, net earnings were reduced by a provisional tax charge
of $0.99 per share resulting from the Tax Act, and $0.32 per share of
restructuring charges. Including these items, full-year income from
continuing operations was $1.14 per share compared to $3.09 per share
last year. Full-year adjusted income from continuing operations, the
non-GAAP measure, was $2.45 per share, compared to $2.62 in 2016.
Cash Flow
Net cash provided by operating activities of continuing operations of
the manufacturing group for the full year was $947 million, compared to
$988 million last year. Manufacturing cash flow before pension
contributions, a non-GAAP measure that is defined and reconciled to GAAP
in an attachment to this release, was $889 million compared to $573
million last year.
“We delivered strong cash performance throughout the year and returned
$603 million to shareholders through share repurchases and dividends,”
said Textron Chairman and CEO Scott C. Donnelly.
Outlook
Textron is forecasting 2018 revenues of approximately $14.6 billion, up
3.0 percent from the prior year. Textron expects full-year 2018 earnings
per share from continuing operations will be in the range of $2.95 to
$3.15. The company will benefit from the Tax Act and expects an
effective tax rate of 22.5% for 2018.
The company is estimating net cash provided by operating activities of
continuing operations of the manufacturing group will be between $1,170
million and $1,270 million and manufacturing cash flow before pension
contributions (the non-GAAP measure) will be between $700 and $800
million, with planned pension contributions of about $55 million.
Donnelly continued, “Our outlook reflects the continuation of our
strategy around growth through new product investments and acquisitions
to drive increases in long-term shareholder value. In 2018, we expect
these investments to drive increasing organic sales along with margin
expansion and strong cash generation.”
Fourth Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation of $1.4 billion were down 3 percent,
primarily due to lower military volume.
Textron Aviation delivered 58 new Citation jets, flat with last year, 31
King Air turboprops up from 28 in last year’s fourth quarter, and 2
Beechcraft T-6 trainers, down from 8 last year.
Segment profit was $120 million in the fourth quarter, down from $135
million a year ago, primarily due to higher research and development
expense.
Textron Aviation backlog at the end of the fourth quarter was $1.2
billion, up $15 million from the end of the third quarter.
Bell
Bell revenues were $983 million, up 11 percent on higher military
volumes, partially offset by lower commercial volumes.
Segment profit of $114 million was down $12 million despite the increase
in revenues, primarily related to a change in commercial mix.
Bell backlog at the end of the fourth quarter was $4.6 billion, down
$407 million from the end of the third quarter.
Textron Systems
Revenues at Textron Systems were $489 million, down from $532 million
last year largely on lower volume at Weapons and Sensors.
Segment profit of $37 million was down from $53 million, primarily
reflecting the lower volume at Weapons and Sensors.
Textron Systems’ backlog at the end of the fourth quarter was $1.4
billion, down $67 million from the end of the third quarter.
Industrial
Industrial revenues were $1.1 billion, up 20 percent largely related to
Arctic Cat.
Segment profit was up $10 million from the fourth quarter of 2016 due to
favorable performance.
Finance
Finance segment revenues decreased $3 million and segment profit
increased $2 million.
Conference Call Information
Textron will host its conference call today, January 31, 2018 at 8:00
a.m. (Eastern) to discuss its results and outlook. The call will be
available via webcast at www.textron.com
or by direct dial at (877) 209-9921 in the U.S. or (612) 332-0107
outside of the U.S. (request the Textron Earnings Call).
In addition, the call will be recorded and available for playback
beginning at 10:30 a.m. (Eastern) on Wednesday, January 31, 2018 by
dialing (320) 365-3844; Access Code: 408729.
A package containing key data that will be covered on today’s call can
be found in the Investor Relations section of the company’s website at www.textron.com.
About Textron Inc.
Textron Inc. is a multi-industry company that leverages its global
network of aircraft, defense, industrial and finance businesses to
provide customers with innovative solutions and services. Textron is
known around the world for its powerful brands such as Bell Helicopter,
Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO,
Greenlee, Textron Off Road, Arctic Cat, Textron Systems, and TRU
Simulation + Training. For more information visit: www.textron.com.
Forward-looking Information
Certain statements in this release and other oral and written statements
made by us from time to time are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements, which may describe strategies, goals,
outlook or other non-historical matters, or project revenues, income,
returns or other financial measures, often include words such as
“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,”
“guidance,” “project,” “target,” “potential,” “will,” “should,” “could,”
“likely” or “may” and similar expressions intended to identify
forward-looking statements. These statements are only predictions and
involve known and unknown risks, uncertainties, and other factors that
may cause our actual results to differ materially from those expressed
or implied by such forward-looking statements. Given these
uncertainties, you should not place undue reliance on these
forward-looking statements. Forward-looking statements speak only as of
the date on which they are made, and we undertake no obligation to
update or revise any forward-looking statements. In addition to those
factors described in our Annual Report on Form 10-K and our Quarterly
Reports on Form 10-Q under “Risk Factors”, among the factors that could
cause actual results to differ materially from past and projected future
results are the following: Interruptions in the U.S. Government’s
ability to fund its activities and/or pay its obligations; changing
priorities or reductions in the U.S. Government defense budget,
including those related to military operations in foreign countries; our
ability to perform as anticipated and to control costs under contracts
with the U.S. Government; the U.S. Government’s ability to unilaterally
modify or terminate its contracts with us for the U.S. Government’s
convenience or for our failure to perform, to change applicable
procurement and accounting policies, or, under certain circumstances, to
withhold payment or suspend or debar us as a contractor eligible to
receive future contract awards; changes in foreign military funding
priorities or budget constraints and determinations, or changes in
government regulations or policies on the export and import of military
and commercial products; volatility in the global economy or changes in
worldwide political conditions that adversely impact demand for our
products; volatility in interest rates or foreign exchange rates; risks
related to our international business, including establishing and
maintaining facilities in locations around the world and relying on
joint venture partners, subcontractors, suppliers, representatives,
consultants and other business partners in connection with international
business, including in emerging market countries; our Finance segment’s
ability to maintain portfolio credit quality or to realize full value of
receivables; performance issues with key suppliers or subcontractors;
legislative or regulatory actions, both domestic and foreign, impacting
our operations or demand for our products; our ability to control costs
and successfully implement various cost-reduction activities; the
efficacy of research and development investments to develop new products
or unanticipated expenses in connection with the launching of
significant new products or programs; the timing of our new product
launches or certifications of our new aircraft products; our ability to
keep pace with our competitors in the introduction of new products and
upgrades with features and technologies desired by our customers;
pension plan assumptions and future contributions; demand softness or
volatility in the markets in which we do business; cybersecurity
threats, including the potential misappropriation of assets or sensitive
information, corruption of data or, operational disruption; difficulty
or unanticipated expenses in connection with integrating acquired
businesses; the risk that acquisitions do not perform as planned,
including, for example, the risk that acquired businesses will not
achieve revenue and profit projections; and the impact of changes in tax
legislation (including the recently enacted Tax Cuts and Jobs Act).
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TEXTRON INC. Revenues by Segment and Reconciliation
of Segment Profit to Net Income (Loss) (Dollars in
millions, except per share amounts) (Unaudited)
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Three Months Ended
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Twelve Months Ended
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December 30, 2017
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December 31, 2016
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December 30, 2017
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December 31, 2016
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REVENUES
|
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MANUFACTURING:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textron Aviation
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|
$
|
1,391
|
|
|
|
$
|
1,436
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|
|
|
|
$
|
4,686
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|
|
|
$
|
4,921
|
|
|
|
Bell
|
|
|
|
|
983
|
|
|
|
|
|
887
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|
|
|
|
|
|
3,317
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|
|
|
|
|
3,239
|
|
|
|
Textron Systems
|
|
|
|
|
489
|
|
|
|
|
|
532
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|
|
|
|
|
|
1,840
|
|
|
|
|
|
1,756
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|
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|
Industrial
|
|
|
|
1,139
|
|
|
|
|
|
952
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|
|
|
|
|
|
4,286
|
|
|
|
|
|
3,794
|
|
|
|
|
|
|
|
|
4,002
|
|
|
|
|
|
3,807
|
|
|
|
|
|
|
14,129
|
|
|
|
|
|
13,710
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|
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|
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|
|
|
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FINANCE
|
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15
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|
|
18
|
|
|
|
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|
|
69
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|
|
|
|
|
78
|
|
|
|
Total revenues
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$
|
4,017
|
|
|
|
$
|
3,825
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|
|
|
|
$
|
14,198
|
|
|
|
$
|
13,788
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|
|
|
|
|
|
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|
|
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SEGMENT PROFIT
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MANUFACTURING:
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|
|
|
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|
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|
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Textron Aviation
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$
|
120
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|
|
|
$
|
135
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|
|
|
|
$
|
303
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|
|
|
$
|
389
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|
|
|
Bell
|
|
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|
|
114
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|
|
|
|
|
126
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|
|
|
|
|
|
415
|
|
|
|
|
|
386
|
|
|
|
Textron Systems
|
|
|
|
|
37
|
|
|
|
|
|
53
|
|
|
|
|
|
|
139
|
|
|
|
|
|
186
|
|
|
|
Industrial
|
|
|
|
|
83
|
|
|
|
|
|
73
|
|
|
|
|
|
|
290
|
|
|
|
|
|
329
|
|
|
|
|
|
|
|
|
354
|
|
|
|
|
|
387
|
|
|
|
|
|
|
1,147
|
|
|
|
|
|
1,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
|
6
|
|
|
|
|
|
4
|
|
|
|
|
|
|
22
|
|
|
|
|
|
19
|
|
|
|
Segment Profit
|
|
|
|
|
360
|
|
|
|
|
|
391
|
|
|
|
|
|
|
1,169
|
|
|
|
|
|
1,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses and other, net
|
|
|
|
|
(44
|
)
|
|
|
|
|
(56
|
)
|
|
|
|
|
|
(132
|
)
|
|
|
|
|
(172
|
)
|
Interest expense, net for Manufacturing group
|
|
|
|
|
(38
|
)
|
|
|
|
|
(33
|
)
|
|
|
|
|
|
(145
|
)
|
|
|
|
|
(138
|
)
|
Special charges (a)
|
|
|
|
|
(55
|
)
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
(130
|
)
|
|
|
|
|
(123
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
223
|
|
|
|
|
|
294
|
|
|
|
|
|
|
762
|
|
|
|
|
|
876
|
|
Income tax expense (b) (c)
|
|
|
|
|
(329
|
)
|
|
|
|
|
(79
|
)
|
|
|
|
|
|
(456
|
)
|
|
|
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
|
|
(106
|
)
|
|
|
|
|
215
|
|
|
|
|
|
|
306
|
|
|
|
|
|
843
|
|
|
Discontinued operations, net of income taxes (c)
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|
|
|
|
-
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
1
|
|
|
|
|
|
119
|
|
Net income (loss)
|
|
|
$
|
(106
|
)
|
|
|
$
|
214
|
|
|
|
|
$
|
307
|
|
|
|
$
|
962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations (d)
|
|
|
$
|
(0.40
|
)
|
|
|
$
|
0.78
|
|
|
|
|
$
|
1.14
|
|
|
|
$
|
3.09
|
|
|
Discontinued operations, net of income taxes
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
0.44
|
|
|
Net income (loss)
|
|
|
$
|
(0.40
|
)
|
|
|
$
|
0.78
|
|
|
|
|
$
|
1.14
|
|
|
|
$
|
3.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding (d)
|
|
|
|
|
263,295,000
|
|
|
|
|
|
273,114,000
|
|
|
|
|
|
|
268,750,000
|
|
|
|
|
|
272,365,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations and Diluted Earnings Per
Share (EPS) GAAP to Non-GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 30, 2017
|
|
|
December 31, 2016
|
|
|
|
December 30, 2017
|
|
|
December 31, 2016
|
|
Income (loss) from continuing operations - GAAP
|
|
|
$
|
(106
|
)
|
|
|
$
|
215
|
|
|
|
|
$
|
306
|
|
|
|
$
|
843
|
|
|
Restructuring, net of taxes of $16 million, $3 million,
$31 million and $45 million, respectively
|
|
|
|
|
32
|
|
|
|
|
|
5
|
|
|
|
|
|
|
59
|
|
|
|
|
|
78
|
|
|
Arctic Cat restructuring, integration and transaction costs,
net of taxes of $2 million and $13 million, respectively
|
|
|
|
|
5
|
|
|
|
|
|
-
|
|
|
|
|
|
|
27
|
|
|
|
|
|
-
|
|
|
|
Total Special charges, net of income taxes
|
|
|
|
|
37
|
|
|
|
|
|
5
|
|
|
|
|
|
|
86
|
|
|
|
|
|
78
|
|
|
Income tax expense resulting from the Tax Cuts and Jobs Act
|
|
|
|
|
266
|
|
|
|
|
|
-
|
|
|
|
|
|
|
266
|
|
|
|
|
|
-
|
|
|
Income tax settlement
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
(206
|
)
|
|
Adjusted income from continuing operations - Non-GAAP (e)
|
|
|
$
|
197
|
|
|
|
$
|
220
|
|
|
|
|
$
|
658
|
|
|
|
$
|
715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations - GAAP (d)
|
|
|
$
|
(0.40
|
)
|
|
|
$
|
0.78
|
|
|
|
|
$
|
1.14
|
|
|
|
$
|
3.09
|
|
|
Restructuring, net of taxes
|
|
|
|
|
0.12
|
|
|
|
|
|
0.02
|
|
|
|
|
|
|
0.22
|
|
|
|
|
|
0.29
|
|
|
Arctic Cat restructuring, integration and transaction costs, net of
taxes
|
|
|
|
|
0.02
|
|
|
|
|
|
-
|
|
|
|
|
|
|
0.10
|
|
|
|
|
|
-
|
|
|
|
Total Special charges, net of income taxes
|
|
|
|
|
0.14
|
|
|
|
|
|
0.02
|
|
|
|
|
|
|
0.32
|
|
|
|
|
|
0.29
|
|
|
Income tax expense resulting from the Tax Cuts and Jobs Act
|
|
|
|
|
1.00
|
|
|
|
|
|
-
|
|
|
|
|
|
|
0.99
|
|
|
|
|
|
-
|
|
|
Income tax settlement
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
(0.76
|
)
|
|
Adjusted income from continuing operations - Non-GAAP (e)
|
|
|
$
|
0.74
|
|
|
|
$
|
0.80
|
|
|
|
|
$
|
2.45
|
|
|
|
$
|
2.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) During 2016, we initiated a plan to restructure and realign our
businesses by implementing headcount reductions, facility consolidations
and other actions in order to improve overall operating efficiency
across Textron. As disclosed in our Current Report on Form 8-K filed on
January 5, 2018, we decided to take additional restructuring actions to
further consolidate operating facilities and streamline product lines.
Special charges related to this plan were $48 million and $90 million in
the three and twelve months ended December 30, 2017, respectively, and
$8 million and $123 million in the three and twelve months ended
December 31, 2016, respectively. In addition, we recorded Special
charges of $7 million and $40 million in the three and twelve months
ended December 30, 2017, respectively, related to the Arctic Cat
acquisition, which included restructuring, integration and transaction
costs.
(b) On December 22, 2017, the U.S. Government enacted tax reform
legislation known as the Tax Cuts and Jobs Act (the "Act"). Income tax
expense for the three and twelve months ended December 30, 2017 includes
a $266 million one-time charge to reflect our provisional estimate of
the net impact of the Act. The charge is primarily related to
remeasurement of U.S. federal net deferred tax assets due to the lower
enacted tax rate and the Act’s transition tax on previously unremitted
earnings of non-U.S. subsidiaries. Textron is continuing its analysis of
this legislation and this provisional estimate is subject to change.
(c) The twelve months ended December 31, 2016 include an income tax
benefit of $319 million, inclusive of interest, of which $206 million is
attributable to continuing operations and $113 million is attributable
to discontinued operations. This benefit is a result of the final
settlement with the Internal Revenue Service Office of Appeals for our
1998 to 2008 tax years.
(d) For the three months ended December 30, 2017, the diluted average
shares used to calculate EPS on a GAAP basis excludes potential common
shares (stock options and restricted stock units), due to their
antidilutive effect resulting from the net loss. For the twelve months
ended December 30, 2017, and the three and twelve months ended December
31, 2016, fully dilutive shares were used to calculate EPS.
(e) Adjusted income from continuing operations and adjusted diluted
earnings per share are non-GAAP financial measures as defined in
"Non-GAAP Financial Measures" attached to this release. The non-GAAP per
share information for the three months ended December 30, 2017 is
calculated using diluted average shares outstanding of 266,099,000.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textron Inc.
|
Condensed Consolidated Balance Sheets
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 30, 2017
|
|
|
December 31, 2016
|
Assets
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
$
|
1,079
|
|
|
$
|
1,137
|
Accounts receivable, net
|
|
|
|
1,363
|
|
|
|
1,064
|
Inventories
|
|
|
|
4,150
|
|
|
|
4,464
|
Other current assets
|
|
|
|
435
|
|
|
|
388
|
Net property, plant and equipment
|
|
|
|
2,721
|
|
|
|
2,581
|
Goodwill
|
|
|
|
2,364
|
|
|
|
2,113
|
Other assets
|
|
|
|
2,059
|
|
|
|
2,331
|
Finance group assets
|
|
|
|
1,169
|
|
|
|
1,280
|
|
Total Assets
|
|
|
$
|
15,340
|
|
|
$
|
15,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
Short-term debt and current portion of long-term debt
|
|
|
$
|
14
|
|
|
$
|
363
|
Current liabilities
|
|
|
|
3,646
|
|
|
|
3,530
|
Other liabilities
|
|
|
|
2,006
|
|
|
|
2,354
|
Long-term debt
|
|
|
|
3,074
|
|
|
|
2,414
|
Finance group liabilities
|
|
|
|
953
|
|
|
|
1,123
|
|
Total Liabilities
|
|
|
|
9,693
|
|
|
|
9,784
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders' Equity
|
|
|
|
5,647
|
|
|
|
5,574
|
|
Total Liabilities and Shareholders' Equity
|
|
|
$
|
15,340
|
|
|
$
|
15,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEXTRON INC.
|
|
MANUFACTURING GROUP
|
|
Condensed Schedule of Cash Flows
|
|
(In millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
December 30,
|
|
|
December 31,
|
|
|
December 30,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
$
|
(152
|
)
|
|
|
$
|
219
|
|
|
|
$
|
247
|
|
|
|
$
|
832
|
|
Depreciation and amortization
|
|
|
|
113
|
|
|
|
|
115
|
|
|
|
|
435
|
|
|
|
|
437
|
|
Changes in working capital
|
|
|
|
364
|
|
|
|
|
468
|
|
|
|
|
120
|
|
|
|
|
(399
|
)
|
Changes in other assets and liabilities and non-cash items
|
|
|
|
275
|
|
|
|
|
49
|
|
|
|
|
145
|
|
|
|
|
89
|
|
Dividends received from TFC
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
29
|
|
Net cash from operating activities of continuing operations
|
|
|
|
600
|
|
|
|
|
851
|
|
|
|
|
947
|
|
|
|
|
988
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(147
|
)
|
|
|
|
(140
|
)
|
|
|
|
(423
|
)
|
|
|
|
(446
|
)
|
Net cash used in acquisitions
|
|
|
|
(1
|
)
|
|
|
|
(7
|
)
|
|
|
|
(331
|
)
|
|
|
|
(186
|
)
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
7
|
|
|
|
|
10
|
|
Other investing activities, net
|
|
|
|
1
|
|
|
|
|
4
|
|
|
|
|
2
|
|
|
|
|
1
|
|
Net cash from investing activities
|
|
|
|
(146
|
)
|
|
|
|
(141
|
)
|
|
|
|
(745
|
)
|
|
|
|
(621
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
347
|
|
|
|
|
-
|
|
|
|
|
992
|
|
|
|
|
345
|
|
Principal payments on long-term debt
|
|
|
|
(701
|
)
|
|
|
|
(1
|
)
|
|
|
|
(704
|
)
|
|
|
|
(254
|
)
|
Increase (decrease) in short-term debt
|
|
|
|
-
|
|
|
|
|
(113
|
)
|
|
|
|
2
|
|
|
|
|
(3
|
)
|
Purchases of Textron common stock
|
|
|
|
(131
|
)
|
|
|
|
(26
|
)
|
|
|
|
(582
|
)
|
|
|
|
(241
|
)
|
Other financing activities, net
|
|
|
|
5
|
|
|
|
|
3
|
|
|
|
|
26
|
|
|
|
|
7
|
|
Net cash from financing activities
|
|
|
|
(480
|
)
|
|
|
|
(137
|
)
|
|
|
|
(266
|
)
|
|
|
|
(146
|
)
|
Total cash flows from continuing operations
|
|
|
|
(26
|
)
|
|
|
|
573
|
|
|
|
|
(64
|
)
|
|
|
|
221
|
|
Total cash flows from discontinued operations
|
|
|
|
(3
|
)
|
|
|
|
-
|
|
|
|
|
(27
|
)
|
|
|
|
(2
|
)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
4
|
|
|
|
|
(25
|
)
|
|
|
|
33
|
|
|
|
|
(28
|
)
|
Net change in cash and equivalents
|
|
|
|
(25
|
)
|
|
|
|
548
|
|
|
|
|
(58
|
)
|
|
|
|
191
|
|
Cash and equivalents at beginning of period
|
|
|
|
1,104
|
|
|
|
|
589
|
|
|
|
|
1,137
|
|
|
|
|
946
|
|
Cash and equivalents at end of period
|
|
|
$
|
1,079
|
|
|
|
$
|
1,137
|
|
|
|
$
|
1,079
|
|
|
|
$
|
1,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
$
|
600
|
|
|
|
$
|
851
|
|
|
|
$
|
947
|
|
|
|
$
|
988
|
|
Less: Capital expenditures
|
|
|
|
(147
|
)
|
|
|
|
(140
|
)
|
|
|
|
(423
|
)
|
|
|
|
(446
|
)
|
Dividends received from TFC
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(29
|
)
|
Plus: Total pension contributions
|
|
|
|
20
|
|
|
|
|
14
|
|
|
|
|
358
|
|
|
|
|
50
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
7
|
|
|
|
|
10
|
|
Manufacturing cash flow before pension contributions- Non-GAAP (a)
|
|
|
$
|
474
|
|
|
|
$
|
727
|
|
|
|
$
|
889
|
|
|
|
$
|
573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Manufacturing cash flow before pension contributions is a non-GAAP
financial measure as defined in "Non-GAAP Financial Measures" attached
to this release.
TEXTRON INC.
|
Condensed Consolidated Schedule of Cash Flows
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 30,
|
|
|
December 31,
|
|
|
December 30,
|
|
|
December 31,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
$
|
(106
|
)
|
|
|
$
|
215
|
|
|
|
$
|
306
|
|
|
|
$
|
843
|
|
|
Depreciation and amortization
|
|
|
|
115
|
|
|
|
|
118
|
|
|
|
|
447
|
|
|
|
|
449
|
|
|
Changes in working capital
|
|
|
|
352
|
|
|
|
|
473
|
|
|
|
|
131
|
|
|
|
|
(375
|
)
|
|
Changes in other assets and liabilities and non-cash items
|
|
|
|
234
|
|
|
|
|
63
|
|
|
|
|
96
|
|
|
|
|
97
|
|
|
Net cash from operating activities of continuing operations
|
|
|
|
595
|
|
|
|
|
869
|
|
|
|
|
980
|
|
|
|
|
1,014
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(147
|
)
|
|
|
|
(140
|
)
|
|
|
|
(423
|
)
|
|
|
|
(446
|
)
|
|
Net cash used in acquisitions
|
|
|
|
(1
|
)
|
|
|
|
(7
|
)
|
|
|
|
(331
|
)
|
|
|
|
(186
|
)
|
|
Finance receivables repaid
|
|
|
|
5
|
|
|
|
|
4
|
|
|
|
|
32
|
|
|
|
|
44
|
|
|
Other investing activities, net
|
|
|
|
12
|
|
|
|
|
12
|
|
|
|
|
60
|
|
|
|
|
65
|
|
|
Net cash from investing activities
|
|
|
|
(131
|
)
|
|
|
|
(131
|
)
|
|
|
|
(662
|
)
|
|
|
|
(523
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
354
|
|
|
|
|
5
|
|
|
|
|
1,036
|
|
|
|
|
525
|
|
|
Principal payments on long-term debt and nonrecourse debt
|
|
|
|
(725
|
)
|
|
|
|
(24
|
)
|
|
|
|
(841
|
)
|
|
|
|
(457
|
)
|
|
Increase (decrease) in short-term debt
|
|
|
|
-
|
|
|
|
|
(113
|
)
|
|
|
|
2
|
|
|
|
|
(3
|
)
|
|
Purchases of Textron common stock
|
|
|
|
(131
|
)
|
|
|
|
(26
|
)
|
|
|
|
(582
|
)
|
|
|
|
(241
|
)
|
|
Other financing activities, net
|
|
|
|
5
|
|
|
|
|
4
|
|
|
|
|
25
|
|
|
|
|
8
|
|
|
Net cash from financing activities
|
|
|
|
(497
|
)
|
|
|
|
(154
|
)
|
|
|
|
(360
|
)
|
|
|
|
(168
|
)
|
|
Total cash flows from continuing operations
|
|
|
|
(33
|
)
|
|
|
|
584
|
|
|
|
|
(42
|
)
|
|
|
|
323
|
|
|
Total cash flows from discontinued operations
|
|
|
|
(3
|
)
|
|
|
|
-
|
|
|
|
|
(27
|
)
|
|
|
|
(2
|
)
|
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
4
|
|
|
|
|
(25
|
)
|
|
|
|
33
|
|
|
|
|
(28
|
)
|
|
Net change in cash and equivalents
|
|
|
|
(32
|
)
|
|
|
|
559
|
|
|
|
|
(36
|
)
|
|
|
|
293
|
|
|
Cash and equivalents at beginning of period
|
|
|
|
1,294
|
|
|
|
|
739
|
|
|
|
|
1,298
|
|
|
|
|
1,005
|
|
|
Cash and equivalents at end of period
|
|
|
$
|
1,262
|
|
|
|
$
|
1,298
|
|
|
|
$
|
1,262
|
|
|
|
$
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1,298
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TEXTRON INC.
Non-GAAP Financial Measures
(Dollars
in millions, except per share amounts)
We supplement the reporting of our financial information determined
under U.S. generally accepted accounting principles (GAAP) with certain
non-GAAP financial measures. These non-GAAP financial measures exclude
certain significant items that may not be indicative of, or are
unrelated to, results from our ongoing business operations. We believe
that these non-GAAP measures may be useful for period-over-period
comparisons of underlying business trends and our ongoing business
performance, however, they should be used in conjunction with GAAP
measures. Our non-GAAP measures should not be considered in isolation or
as a substitute for the related GAAP measures, and other companies may
define similarly named measures differently. We encourage investors to
review our financial statements and publicly-filed reports in the
entirety and not to rely on any single financial measure. We utilize the
following definitions for the non-GAAP financial measures included in
this release:
Adjusted income from continuing operations and
adjusted diluted earnings per share
Adjusted income from
continuing operations and adjusted diluted earnings per share both
exclude Special charges, net of income taxes, the income tax impact from
the enactment of the Tax Cuts and Jobs Act (the "Tax Act") and a
significant multi-year income tax settlement. We consider items recorded
in Special charges, net of income taxes, such as enterprise-wide
restructuring and acquisition-related restructuring, integration and
transaction costs, to be of a non-recurring nature that is not
indicative of ongoing operations. In addition, both the impact from the
Tax Act and the income tax settlement are not considered to be
indicative of ongoing operations, since they represent significant
one-time adjustments.
Manufacturing cash flow before pension
contributions
Manufacturing cash flow before pension
contributions adjusts net cash from operating activities of continuing
operations (GAAP) for the following:
-
Excludes dividends received from Textron Financial Corporation (TFC)
and capital contributions to TFC provided under the Support Agreement
and debt agreements as these cash flows are not representative of
manufacturing operations;
-
Deducts capital expenditures and includes proceeds from the sale of
property, plant and equipment to arrive at the net capital investment
required to support ongoing manufacturing operations;
-
Adds back pension contributions as we consider our pension obligations
to be debt-like liabilities. Additionally, these contributions can
fluctuate significantly from period to period and we believe that they
are not representative of cash used by our manufacturing operations
during the period.
While we believe this measure provides a focus on cash generated from
manufacturing operations, before pension contributions, and may be used
as an additional relevant measure of liquidity, it does not necessarily
provide the amount available for discretionary expenditures since we
have certain non-discretionary obligations that are not deducted from
the measure.
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Income (Loss) from Continuing Operations and Diluted Earnings Per
Share (EPS) GAAP to Non-GAAP Reconciliation:
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Three Months Ended
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Twelve Months Ended
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December 30, 2017
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December 31, 2016
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December 30, 2017
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December 31, 2016
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Income (loss) from continuing operations - GAAP
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$
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(106
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)
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$
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215
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$
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306
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$
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843
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Restructuring, net of taxes of $16 million, $3 million,
$31 million and $45 million, respectively
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32
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5
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59
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78
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Arctic Cat restructuring, integration and transaction costs,
net of taxes of $2 million and $13 million, respectively
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5
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-
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27
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-
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Total Special charges, net of income taxes
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37
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5
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86
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78
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Income tax expense resulting from the Tax Cuts and Jobs Act
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266
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-
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266
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-
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Income tax settlement
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-
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-
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(206
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)
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Adjusted income from continuing operations - Non-GAAP
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$
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197
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$
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220
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$
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658
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$
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715
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Earnings per share:
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Income (loss) from continuing operations - GAAP (a)
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$
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(0.40
|
)
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$
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0.78
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$
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1.14
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$
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3.09
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Restructuring, net of taxes
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0.12
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0.02
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0.22
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0.29
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|
Arctic Cat restructuring, integration and transaction costs, net of
taxes
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0.02
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-
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0.10
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-
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Total Special charges, net of income taxes
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0.14
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0.02
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0.32
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0.29
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Income tax expense resulting from the Tax Cuts and Jobs Act
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1.00
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|
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-
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0.99
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-
|
|
Income tax settlement
|
|
|
|
|
-
|
|
|
|
|
|
-
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|
|
|
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-
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(0.76
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)
|
Adjusted income from continuing operations - Non-GAAP (b)
|
|
|
$
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0.74
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|
|
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$
|
0.80
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|
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$
|
2.45
|
|
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$
|
2.62
|
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(a) For the three months ended December 30, 2017, the diluted average
shares used to calculate EPS on a GAAP basis excludes potential common
shares (stock options and restricted stock units), due to their
antidilutive effect resulting from the net loss. For the twelve months
ended December 30, 2017, and the three and twelve months ended December
31, 2016, fully dilutive shares were used to calculate EPS.
(b) The non-GAAP per share information for the three months ended
December 30, 2017 is calculated using diluted average shares outstanding
of 266,099,000.
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Manufacturing Cash Flow Before Pension Contributions GAAP to
Non-GAAP Outlook:
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|
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2018 Outlook
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
$ 1,170 - $ 1,270
|
Less: Capital expenditures
|
|
|
(525)
|
Plus: Total pension contributions
|
|
|
55
|
Manufacturing cash flow before pension contributions- Non-GAAP
|
|
|
|
|
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|
$ 700 - $ 800
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180131005331/en/
Source: Textron