-
Income from continuing operations of $0.87 per share
-
Segment profit $346 million
-
Operating margin of 9.3%, up from 8.2% a year ago
-
$571 million returned to shareholders through share repurchases
-
Full-year EPS guidance increased to $3.15 - $3.35 per share, up $0.20
-
Full-year cash flow guidance increased to $750 - $850 million, up $50
million
PROVIDENCE, R.I.--(BUSINESS WIRE)--
Textron Inc. (NYSE: TXT) today reported second quarter 2018 income from
continuing operations of $0.87 per share. This compares to $0.57 per
share in the second quarter of 2017, or $0.60 per share of adjusted
income from continuing operations, a non-GAAP measure that is defined
and reconciled to GAAP in an attachment to this release.
“Operationally, we saw continued strength in our execution with margin
improvements at Aviation, Systems, and Bell,” said Textron Chairman and
CEO Scott C. Donnelly. “We are encouraged by revenue growth resulting
from improving commercial demand across many of our end markets.”
Cash Flow
Net cash provided by operating activities of continuing operations of
the manufacturing group for the second quarter totaled $468 million,
compared to $413 million in last year’s second quarter. Manufacturing
cash flow before pension contributions, a non-GAAP measure that is
defined and reconciled to GAAP in an attachment to this release, totaled
$399 million compared to $341 million during last year’s second quarter.
In the quarter, Textron returned $571 million to shareholders through
share repurchases, compared to $143 million in the second quarter of
2017.
Outlook
Textron now expects 2018 earnings per share from continuing operations
to be in a range of $3.15 to $3.35, up $0.20 from our previous outlook.
The company also expects full-year 2018 cash flow from continuing
operations of the manufacturing group before pension contributions to be
in a range of $750 to $850 million, up $50 million from its previous
expectation.
Textron expects a one-time gain of approximately $400 million from the
Tools & Test divestiture in the third quarter of 2018, which is not
reflected in this updated outlook.
“Our updated outlook reflects our strong first-half performance and the
continuation of our strategy of growth through new product investments
and acquisitions to increase long-term shareholder value,” Donnelly
concluded.
Second Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation of $1.3 billion were up 9%, primarily due
to higher volume and price.
Textron Aviation delivered 48 jets, up from 46 last year, and 47
commercial turboprops, up from 33 last year.
Segment profit was $104 million in the second quarter, up from $54
million a year ago, due to the favorable volume, mix, and price.
Textron Aviation backlog at the end of the second quarter was $1.6
billion.
Bell
Bell revenues were $831 million, up 1% primarily on higher commercial
volume, partially offset by lower military revenues.
Bell delivered 57 commercial helicopters in the quarter, up from 21 last
year.
Segment profit of $117 million was up $5 million.
Bell backlog at the end of the second quarter was $5.5 billion.
Textron Systems
Revenues at Textron Systems were $380 million, down from $477 million
last year, largely on lower volumes at Weapons & Sensors related to the
discontinuance of SFW production in 2017 and lower TAPV deliveries at
Textron Marine & Land Systems.
Segment profit was down $2 million, primarily reflecting the lower net
volume partially offset by favorable performance.
Textron Systems’ backlog at the end of the second quarter was $1.2
billion.
Industrial
Industrial revenues increased $109 million largely related to higher
volumes across all of our product lines and a favorable impact from
foreign exchange.
Segment profit was down $2 million despite the increase in revenues from
the second quarter of 2017, due to the mix of products sold.
Finance
Finance segment revenues and profit were both flat with last year’s
second quarter.
Conference Call Information
Textron will host its conference call today, July 18, 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 (800) 230-1951 in the U.S. or (612) 288-0340
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, July 18, 2018 by dialing
(320) 365-3844; Access Code: 431861.
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, Cessna,
Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, 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; the impact of changes in tax
legislation (including the recently enacted Tax Cuts and Jobs Act); and
risks related to the timing and scope of future repurchases of our
common stock.
|
TEXTRON INC.
Revenues by Segment and Reconciliation
of Segment Profit to Net Income
(Dollars in millions,
except per share amounts) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
|
July 1, 2017
|
|
|
|
June 30, 2018
|
|
|
July 1, 2017
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MANUFACTURING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textron Aviation
|
|
|
|
|
|
|
$
|
1,276
|
|
|
|
|
$
|
1,171
|
|
|
|
|
|
$
|
2,286
|
|
|
|
|
$
|
2,141
|
|
|
|
Bell
|
|
|
|
|
|
|
|
831
|
|
|
|
|
|
825
|
|
|
|
|
|
|
1,583
|
|
|
|
|
|
1,522
|
|
|
|
Textron Systems
|
|
|
|
|
|
|
|
380
|
|
|
|
|
|
477
|
|
|
|
|
|
|
767
|
|
|
|
|
|
893
|
|
|
|
Industrial
|
|
|
|
|
|
|
|
1,222
|
|
|
|
|
|
1,113
|
|
|
|
|
|
|
2,353
|
|
|
|
|
|
2,105
|
|
|
|
|
|
|
|
|
|
|
|
3,709
|
|
|
|
|
|
3,586
|
|
|
|
|
|
|
6,989
|
|
|
|
|
|
6,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
18
|
|
|
|
|
|
|
33
|
|
|
|
|
|
36
|
|
|
|
Total revenues
|
|
|
|
|
|
|
$
|
3,726
|
|
|
|
|
$
|
3,604
|
|
|
|
|
|
$
|
7,022
|
|
|
|
|
$
|
6,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MANUFACTURING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textron Aviation
|
|
|
|
|
|
|
$
|
104
|
|
|
|
|
$
|
54
|
|
|
|
|
|
$
|
176
|
|
|
|
|
$
|
90
|
|
|
|
Bell
|
|
|
|
|
|
|
|
117
|
|
|
|
|
|
112
|
|
|
|
|
|
|
204
|
|
|
|
|
|
195
|
|
|
|
Textron Systems
|
|
|
|
|
|
|
|
40
|
|
|
|
|
|
42
|
|
|
|
|
|
|
90
|
|
|
|
|
|
62
|
|
|
|
Industrial
|
|
|
|
|
|
|
|
80
|
|
|
|
|
|
82
|
|
|
|
|
|
|
144
|
|
|
|
|
|
158
|
|
|
|
|
|
|
|
|
|
|
|
341
|
|
|
|
|
|
290
|
|
|
|
|
|
|
614
|
|
|
|
|
|
505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
5
|
|
|
|
|
|
|
11
|
|
|
|
|
|
9
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
346
|
|
|
|
|
|
295
|
|
|
|
|
|
|
625
|
|
|
|
|
|
514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses and other, net
|
|
|
|
|
|
|
|
(51
|
)
|
|
|
|
|
(31
|
)
|
|
|
|
|
|
(78
|
)
|
|
|
|
|
(58
|
)
|
Interest expense, net for Manufacturing group
|
|
|
|
|
|
|
|
(35
|
)
|
|
|
|
|
(36
|
)
|
|
|
|
|
|
(69
|
)
|
|
|
|
|
(70
|
)
|
Special charges (a)
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
(13
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
(50
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
|
|
260
|
|
|
|
|
|
215
|
|
|
|
|
|
|
478
|
|
|
|
|
|
336
|
|
Income tax expense
|
|
|
|
|
|
|
|
(36
|
)
|
|
|
|
|
(62
|
)
|
|
|
|
|
|
(65
|
)
|
|
|
|
|
(83
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
|
|
|
224
|
|
|
|
|
|
153
|
|
|
|
|
|
|
413
|
|
|
|
|
|
253
|
|
|
Discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
1
|
|
Net income
|
|
|
|
|
|
|
$
|
224
|
|
|
|
|
$
|
153
|
|
|
|
|
|
$
|
413
|
|
|
|
|
$
|
254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
|
|
$
|
0.87
|
|
|
|
|
$
|
0.57
|
|
|
|
|
|
$
|
1.59
|
|
|
|
|
$
|
0.94
|
|
|
Discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Net income
|
|
|
|
|
|
|
$
|
0.87
|
|
|
|
|
$
|
0.57
|
|
|
|
|
|
$
|
1.59
|
|
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted average shares outstanding
|
|
|
|
|
|
|
|
257,177,000
|
|
|
|
|
|
269,299,000
|
|
|
|
|
|
|
260,462,000
|
|
|
|
|
|
271,076,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At the beginning of 2018, we adopted the new revenue recognition
accounting standard using a modified retrospective transition method
applied to contracts that were not substantially complete at the end
of 2017. We recorded a $90 million adjustment to increase retained
earnings to reflect the cumulative impact of adopting this standard
at the beginning of 2018, primarily related to long-term contracts
with the U.S. Government. Revenues associated with these contracts
in 2018 are primarily recognized as costs are incurred, while
revenues for 2017 were primarily recognized as units were delivered.
The comparative information has not been restated and is reported
under the accounting standards in effect for those periods.
|
|
Income from Continuing Operations and Diluted Earnings Per Share
(EPS) GAAP to Non-GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
July 1, 2017
|
|
|
|
Six Months Ended
July 1, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
|
|
|
|
|
|
Diluted EPS
|
Income from continuing operations - GAAP
|
|
|
|
|
|
$
|
|
|
|
|
153
|
|
|
|
|
$
|
0.57
|
|
|
|
$
|
|
|
|
|
253
|
|
|
|
|
$
|
0.94
|
Restructuring, net of taxes of $4 million and $9 million,
respectively
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
0.07
|
Arctic Cat restructuring, integration and transaction costs, net
of taxes of $0 million and $7 million, respectively
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
0.05
|
|
Total Special charges, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
34
|
|
|
|
|
|
0.12
|
Adjusted income from continuing operations - Non-GAAP (b)
|
|
|
|
|
|
$
|
|
|
|
|
162
|
|
|
|
|
$
|
0.60
|
|
|
|
$
|
|
|
|
|
287
|
|
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
Special charges for the three and six months ended July 1, 2017
include $12 million and $27 million, respectively, related to a 2016
restructuring plan and $1 million and $23 million, respectively, of
restructuring and transaction costs related to the Arctic Cat
acquisition.
|
|
|
|
|
(b)
|
|
|
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.
|
|
|
|
|
|
Textron Inc.
Condensed Consolidated Balance Sheets
(In
millions) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
|
December 30,
2017
|
Assets (a)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
|
|
|
$
|
554
|
|
|
$
|
1,079
|
Accounts receivable, net
|
|
|
|
|
|
|
1,121
|
|
|
|
1,363
|
Inventories
|
|
|
|
|
|
|
3,925
|
|
|
|
4,150
|
Assets of businesses held for sale (b)
|
|
|
|
|
|
|
407
|
|
|
|
-
|
Other current assets
|
|
|
|
|
|
|
763
|
|
|
|
435
|
Net property, plant and equipment
|
|
|
|
|
|
|
2,608
|
|
|
|
2,721
|
Goodwill
|
|
|
|
|
|
|
2,207
|
|
|
|
2,364
|
Other assets
|
|
|
|
|
|
|
1,869
|
|
|
|
2,059
|
Finance group assets
|
|
|
|
|
|
|
1,104
|
|
|
|
1,169
|
|
Total Assets
|
|
|
|
|
|
$
|
14,558
|
|
|
$
|
15,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity (a)
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt and current portion of long-term debt
|
|
|
|
|
|
$
|
9
|
|
|
$
|
14
|
Current liabilities
|
|
|
|
|
|
|
3,322
|
|
|
|
3,646
|
Liabilities of businesses held for sale (b)
|
|
|
|
|
|
|
66
|
|
|
|
-
|
Other liabilities
|
|
|
|
|
|
|
1,809
|
|
|
|
2,006
|
Long-term debt
|
|
|
|
|
|
|
3,070
|
|
|
|
3,074
|
Finance group liabilities
|
|
|
|
|
|
|
920
|
|
|
|
953
|
|
Total Liabilities
|
|
|
|
|
|
|
9,196
|
|
|
|
9,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders' Equity
|
|
|
|
|
|
|
5,362
|
|
|
|
5,647
|
|
Total Liabilities and Shareholders' Equity
|
|
|
|
|
|
$
|
14,558
|
|
|
$
|
15,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
At the beginning of 2018, we adopted the new revenue recognition
accounting standard using a modified retrospective transition method
applied to contracts that were not substantially complete at the end
of 2017. We recorded a $90 million adjustment to increase retained
earnings to reflect the cumulative impact of adopting this standard
at the beginning of 2018, primarily related to long-term contracts
with the U.S. Government. Revenues associated with these contracts
in 2018 are primarily recognized as costs are incurred, while
revenues for 2017 were primarily recognized as units were delivered.
The comparative information has not been restated and is reported
under the accounting standards in effect for those periods.
|
|
|
|
|
(b)
|
|
|
On April 18, 2018, we entered into a definitive agreement to sell
the businesses that manufacture and sell the products in our Tools
and Test Equipment product line within our Industrial segment. The
assets and liabilities of these businesses have been classified as
held for sale at June 30, 2018. We completed this disposition on
July 2, 2018.
|
|
|
|
|
|
TEXTRON INC.
MANUFACTURING GROUP
Condensed
Schedule of Cash Flows
(In millions) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
July 1,
|
|
|
|
|
June 30,
|
|
|
July 1,
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
2018
|
|
|
2017
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
|
$
|
219
|
|
|
|
$
|
150
|
|
|
|
|
|
$
|
398
|
|
|
|
$
|
244
|
|
Depreciation and amortization
|
|
|
|
|
|
|
109
|
|
|
|
|
108
|
|
|
|
|
|
|
212
|
|
|
|
|
211
|
|
Changes in working capital (a)
|
|
|
|
|
|
|
98
|
|
|
|
|
88
|
|
|
|
|
|
|
(278
|
)
|
|
|
|
(249
|
)
|
Changes in other assets and liabilities and non-cash items (a)
|
|
|
|
|
|
|
42
|
|
|
|
|
67
|
|
|
|
|
|
|
33
|
|
|
|
|
42
|
|
Dividends received from TFC
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
50
|
|
|
|
|
-
|
|
Net cash from operating activities of continuing operations (a)
|
|
|
|
|
|
|
468
|
|
|
|
|
413
|
|
|
|
|
|
|
415
|
|
|
|
|
248
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
|
|
(82
|
)
|
|
|
|
(85
|
)
|
|
|
|
|
|
(159
|
)
|
|
|
|
(161
|
)
|
Net proceeds from corporate-owned life insurance policies (a)
|
|
|
|
|
|
|
40
|
|
|
|
|
-
|
|
|
|
|
|
|
98
|
|
|
|
|
22
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
|
|
10
|
|
|
|
|
-
|
|
Net cash used in acquisitions
|
|
|
|
|
|
|
-
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
-
|
|
|
|
|
(329
|
)
|
Other investing activities, net
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
1
|
|
Net cash from investing activities (a)
|
|
|
|
|
|
|
(41
|
)
|
|
|
|
(96
|
)
|
|
|
|
|
|
(51
|
)
|
|
|
|
(467
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in short-term debt
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
(100
|
)
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Proceeds from long-term debt
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
347
|
|
Purchases of Textron common stock
|
|
|
|
|
|
|
(571
|
)
|
|
|
|
(143
|
)
|
|
|
|
|
|
(915
|
)
|
|
|
|
(329
|
)
|
Other financing activities, net
|
|
|
|
|
|
|
30
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
33
|
|
|
|
|
10
|
|
Net cash from financing activities
|
|
|
|
|
|
|
(543
|
)
|
|
|
|
(246
|
)
|
|
|
|
|
|
(882
|
)
|
|
|
|
28
|
|
Total cash flows from continuing operations
|
|
|
|
|
|
|
(116
|
)
|
|
|
|
71
|
|
|
|
|
|
|
(518
|
)
|
|
|
|
(191
|
)
|
Total cash flows from discontinued operations
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
2
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
(23
|
)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
|
|
|
(17
|
)
|
|
|
|
7
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
15
|
|
Net change in cash and equivalents
|
|
|
|
|
|
|
(134
|
)
|
|
|
|
80
|
|
|
|
|
|
|
(525
|
)
|
|
|
|
(199
|
)
|
Cash and equivalents at beginning of period
|
|
|
|
|
|
|
688
|
|
|
|
|
858
|
|
|
|
|
|
|
1,079
|
|
|
|
|
1,137
|
|
Cash and equivalents at end of period
|
|
|
|
|
|
$
|
554
|
|
|
|
$
|
938
|
|
|
|
|
|
$
|
554
|
|
|
|
$
|
938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
|
|
|
$
|
468
|
|
|
|
$
|
413
|
|
|
|
|
|
$
|
415
|
|
|
|
$
|
248
|
|
Less:
|
Capital expenditures
|
|
|
|
|
|
|
(82
|
)
|
|
|
|
(85
|
)
|
|
|
|
|
|
(159
|
)
|
|
|
|
(161
|
)
|
|
|
Dividends received from TFC
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
(50
|
)
|
|
|
|
-
|
|
Plus:
|
Total pension contributions
|
|
|
|
|
|
|
12
|
|
|
|
|
13
|
|
|
|
|
|
|
25
|
|
|
|
|
27
|
|
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
|
|
10
|
|
|
|
|
-
|
|
Manufacturing cash flow before pension contributions- Non-GAAP (a)
|
|
|
|
|
|
$
|
399
|
|
|
|
$
|
341
|
|
|
|
|
|
$
|
241
|
|
|
|
$
|
114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
For the six months ended July 1, 2017, $22 million of net cash
proceeds received from the settlement of corporate-owned life
insurance policies were reclassified from operating activities to
investing activities as a result of the adoption of a new accounting
standard at the beginning of 2018.
|
|
|
|
|
(b)
|
|
|
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
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
July 1,
|
|
|
|
June 30,
|
|
|
July 1,
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
|
$
|
224
|
|
|
|
$
|
153
|
|
|
|
|
$
|
413
|
|
|
|
$
|
253
|
|
Depreciation and amortization
|
|
|
|
|
|
|
111
|
|
|
|
|
112
|
|
|
|
|
|
216
|
|
|
|
|
218
|
|
Changes in working capital (a)
|
|
|
|
|
|
|
105
|
|
|
|
|
128
|
|
|
|
|
|
(264
|
)
|
|
|
|
(243
|
)
|
Changes in other assets and liabilities and non-cash items (a)
|
|
|
|
|
|
|
43
|
|
|
|
|
65
|
|
|
|
|
|
33
|
|
|
|
|
39
|
|
Net cash from operating activities of continuing operations (a)
|
|
|
|
|
|
|
483
|
|
|
|
|
458
|
|
|
|
|
|
398
|
|
|
|
|
267
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
|
|
(82
|
)
|
|
|
|
(85
|
)
|
|
|
|
|
(159
|
)
|
|
|
|
(161
|
)
|
Net proceeds from corporate-owned life insurance policies (a)
|
|
|
|
|
|
|
40
|
|
|
|
|
-
|
|
|
|
|
|
98
|
|
|
|
|
22
|
|
Finance receivables repaid
|
|
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
|
25
|
|
|
|
|
24
|
|
Net cash used in acquisitions
|
|
|
|
|
|
|
-
|
|
|
|
|
(11
|
)
|
|
|
|
|
-
|
|
|
|
|
(329
|
)
|
Other investing activities, net
|
|
|
|
|
|
|
21
|
|
|
|
|
21
|
|
|
|
|
|
30
|
|
|
|
|
34
|
|
Net cash from investing activities (a)
|
|
|
|
|
|
|
(12
|
)
|
|
|
|
(66
|
)
|
|
|
|
|
(6
|
)
|
|
|
|
(410
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in short-term debt
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
(100
|
)
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Principal payments on long-term debt and nonrecourse debt
|
|
|
|
|
|
|
(15
|
)
|
|
|
|
(36
|
)
|
|
|
|
|
(34
|
)
|
|
|
|
(74
|
)
|
Proceeds from long-term debt
|
|
|
|
|
|
|
-
|
|
|
|
|
13
|
|
|
|
|
|
-
|
|
|
|
|
375
|
|
Purchases of Textron common stock
|
|
|
|
|
|
|
(571
|
)
|
|
|
|
(143
|
)
|
|
|
|
|
(915
|
)
|
|
|
|
(329
|
)
|
Other financing activities, net
|
|
|
|
|
|
|
30
|
|
|
|
|
(3
|
)
|
|
|
|
|
33
|
|
|
|
|
10
|
|
Net cash from financing activities
|
|
|
|
|
|
|
(558
|
)
|
|
|
|
(269
|
)
|
|
|
|
|
(916
|
)
|
|
|
|
(18
|
)
|
Total cash flows from continuing operations
|
|
|
|
|
|
|
(87
|
)
|
|
|
|
123
|
|
|
|
|
|
(524
|
)
|
|
|
|
(161
|
)
|
Total cash flows from discontinued operations
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
2
|
|
|
|
|
|
(1
|
)
|
|
|
|
(23
|
)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
|
|
|
(17
|
)
|
|
|
|
7
|
|
|
|
|
|
(6
|
)
|
|
|
|
15
|
|
Net change in cash and equivalents
|
|
|
|
|
|
|
(105
|
)
|
|
|
|
132
|
|
|
|
|
|
(531
|
)
|
|
|
|
(169
|
)
|
Cash and equivalents at beginning of period
|
|
|
|
|
|
|
836
|
|
|
|
|
997
|
|
|
|
|
|
1,262
|
|
|
|
|
1,298
|
|
Cash and equivalents at end of period
|
|
|
|
|
|
$
|
731
|
|
|
|
$
|
1,129
|
|
|
|
|
$
|
731
|
|
|
|
$
|
1,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
For the six months ended July 1, 2017, $22 million of net cash
proceeds received from the settlement of corporate-owned life
insurance policies were reclassified from operating activities to
investing activities as a result of the adoption of a new accounting
standard at the beginning of 2018.
|
|
|
|
|
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. We consider items recorded in Special charges 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.
|
|
|
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:
|
|
• 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;
|
• 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;
|
• 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.
|
|
Income from Continuing Operations and Diluted Earnings Per Share
(EPS) GAAP to Non-GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
July 1, 2017
|
|
|
|
Six Months Ended
July 1, 2017
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
|
|
|
|
Diluted EPS
|
Income from continuing operations - GAAP
|
|
|
|
|
|
$
|
153
|
|
|
|
|
$
|
0.57
|
|
|
|
|
$
|
253
|
|
|
|
|
$
|
0.94
|
|
Restructuring, net of taxes of $4 million and $9 million,
respectively
|
|
|
|
|
|
|
8
|
|
|
|
|
|
0.03
|
|
|
|
|
|
18
|
|
|
|
|
|
0.07
|
|
Arctic Cat restructuring, integration and transaction costs,
net of taxes of $0 million and $7 million, respectively
|
|
|
|
|
|
|
1
|
|
|
|
|
|
-
|
|
|
|
|
|
16
|
|
|
|
|
|
0.05
|
|
|
Total Special charges, net of income taxes
|
|
|
|
|
|
|
9
|
|
|
|
|
|
0.03
|
|
|
|
|
|
34
|
|
|
|
|
|
0.12
|
|
Adjusted income from continuing operations - Non-GAAP
|
|
|
|
|
|
$
|
162
|
|
|
|
|
$
|
0.60
|
|
|
|
|
$
|
287
|
|
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing Cash Flow Before Pension Contributions GAAP to
Non-GAAP Reconciliation and Outlook:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
June 30, 2018
|
|
|
July 1, 2017
|
|
|
|
June 30, 2018
|
|
|
July 1, 2017
|
Net cash from operating activities of continuing operations -
GAAP (a)
|
|
|
|
|
|
$
|
468
|
|
|
|
|
$
|
413
|
|
|
|
|
$
|
415
|
|
|
|
|
$
|
248
|
|
Less:
|
Capital expenditures
|
|
|
|
|
|
|
(82
|
)
|
|
|
|
|
(85
|
)
|
|
|
|
|
(159
|
)
|
|
|
|
|
(161
|
)
|
|
Dividends received from TFC
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(50
|
)
|
|
|
|
|
-
|
|
Plus:
|
Total pension contributions
|
|
|
|
|
|
|
12
|
|
|
|
|
|
13
|
|
|
|
|
|
25
|
|
|
|
|
|
27
|
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
|
|
1
|
|
|
|
|
|
-
|
|
|
|
|
|
10
|
|
|
|
|
|
-
|
|
Manufacturing cash flow before pension contributions - Non-GAAP
(a)
|
|
|
|
|
|
$
|
399
|
|
|
|
|
$
|
341
|
|
|
|
|
$
|
241
|
|
|
|
|
$
|
114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 Outlook
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,235
|
|
|
-
|
|
$
|
1,335
|
|
Less:
|
Capital expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(500)
|
|
|
|
Dividends received from TFC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(50)
|
|
|
Plus:
|
Total pension contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55
|
|
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
Manufacturing cash flow before pension contributions - Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
750
|
|
|
-
|
|
$
|
850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
For the six months ended July 1, 2017, $22 million of net cash
proceeds received from the settlement of corporate-owned life
insurance policies were reclassified from operating activities to
investing activities as a result of the adoption of a new accounting
standard at the beginning of 2018.
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20180718005140/en/
Textron Inc.
Investor Contacts:
Eric Salander,
401-457-2288
or
Jeffrey Trivella, 401-457-2288
or
Media
Contact:
David Sylvestre, 401-457-2362
Source: Textron