-
EPS from continuing operations of $1.02; adjusted EPS of $1.15
-
Segment profit of $397 million up 10.3% from prior year
-
Operating margin of 10.6%, up from 9.0% a year ago
-
$400 million returned to shareholders through share repurchases
-
2019 full-year EPS outlook of $3.55 - $3.75
PROVIDENCE, R.I.--(BUSINESS WIRE)--
Textron Inc. (NYSE: TXT) today reported fourth quarter 2018 income from
continuing operations of $1.02 per share. Adjusted income from
continuing operations, a non-GAAP measure that is defined and reconciled
to GAAP in an attachment to this release, was $1.15 per share for the
fourth quarter of 2018. Adjusted income from continuing operations
excludes $73 million of pre-tax special charges recorded in the fourth
quarter ($0.23 per share, after-tax), and other favorable one-time
adjustments ($0.10 per share, after-tax).
Full-year income from continuing operations was $4.83 per share.
Full-year adjusted income from continuing operations, a non-GAAP
measure, was $3.34 per share, up from $2.45 in 2017.
“We had strong execution in both the quarter and full year with
significant margin improvements at Aviation, Bell, and Systems” said
Textron Chairman and CEO Scott C. Donnelly. “We were also encouraged by
the continued strength in new aircraft demand at Aviation.”
Cash Flow
Net cash provided by operating activities of continuing operations of
the manufacturing group for the full year was $1,127 million, compared
to $930 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 $784 million compared to $872
million last year.
In the quarter, Textron returned $400 million to shareholders through
share repurchases, compared to $131 million in the fourth quarter of
2017. For the full year, Textron returned $1.8 billion to shareholders
through share repurchases, including $797 million of proceeds from the
sale of our Tools & Test businesses, compared to $582 million in 2017.
Outlook
Textron is forecasting 2019 revenues of approximately $14 billion, about
flat with last year. Textron expects full-year 2019 earnings per share
from continuing operations will be in the range of $3.55 to $3.75.
The company is estimating net cash provided by operating activities of
continuing operations of the manufacturing group will be between $1,020
million and $1,120 million and manufacturing cash flow before pension
contributions (a non-GAAP measure) will be between $700 million and $800
million, with planned pension contributions of about $50 million.
Donnelly continued, “Our outlook reflects the continued improvement in
our operations to drive earnings growth and margin expansion. As we look
to the future, we are investing for long-term growth to generate
increases in shareholder value.”
Fourth Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation of $1.6 billion were up 12%, due to higher
volume and mix across the jet and commercial turboprop product lines, as
well as favorable pricing.
Textron Aviation delivered 63 jets, up from 58 last year, and 67
commercial turboprops, up from 45 last year.
Segment profit was $170 million in the fourth quarter, up from $120
million a year ago, due to the higher volumes and favorable pricing.
Textron Aviation backlog at the end of the fourth quarter was $1.8
billion.
Bell
Bell revenues were $827 million, down from $983 million last year,
primarily on lower military volume.
Bell delivered 46 commercial helicopters in the quarter, up from 45 last
year.
Segment profit of $108 million was down $6 million, largely on the lower
military volume, partially offset by favorable performance.
Bell backlog at the end of the fourth quarter was $5.8 billion.
Textron Systems
Revenues at Textron Systems were $345 million, down from $489 million
last year, reflecting lower TAPV deliveries at Textron Marine & Land
Systems and lower Unmanned Systems volume.
Segment profit was flat with last year’s fourth quarter at $37 million,
with lower volume and mix, offset by favorable performance.
Textron Systems’ backlog at the end of the fourth quarter was $1.5
billion.
Industrial
Industrial revenues decreased $131 million largely related to the
disposition of our Tools & Test product line.
Segment profit was down $10 million from the fourth quarter of 2017,
largely due to the impact from the disposition. Favorable performance,
reflecting a positive impact of $17 million related to a patent
infringement matter, was offset by unfavorable inflation and mix.
Finance
Finance segment revenues were up $3 million, and profit was up $3
million from last year’s fourth quarter.
Conference Call Information
Textron will host its conference call today, January 24, 2019 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 Thursday, January 24, 2019 by
dialing (320) 365-3844; Access Code: 431863.
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, 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.
|
TEXTRON INC.
Revenues by Segment and Reconciliation
of Segment Profit to Net Income (Loss)
(Dollars in
millions, except per share amounts) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MANUFACTURING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textron Aviation
|
|
|
|
|
|
|
$
|
1,552
|
|
|
|
|
$
|
1,391
|
|
|
|
|
|
$
|
4,971
|
|
|
|
|
$
|
4,686
|
|
|
|
Bell
|
|
|
|
|
|
|
|
827
|
|
|
|
|
|
983
|
|
|
|
|
|
|
3,180
|
|
|
|
|
|
3,317
|
|
|
|
Textron Systems
|
|
|
|
|
|
|
|
345
|
|
|
|
|
|
489
|
|
|
|
|
|
|
1,464
|
|
|
|
|
|
1,840
|
|
|
|
Industrial
|
|
|
|
|
|
|
|
1,008
|
|
|
|
|
|
1,139
|
|
|
|
|
|
|
4,291
|
|
|
|
|
|
4,286
|
|
|
|
|
|
|
|
|
|
|
|
3,732
|
|
|
|
|
|
4,002
|
|
|
|
|
|
|
13,906
|
|
|
|
|
|
14,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
15
|
|
|
|
|
|
|
66
|
|
|
|
|
|
69
|
|
|
|
Total revenues
|
|
|
|
|
|
|
$
|
3,750
|
|
|
|
|
$
|
4,017
|
|
|
|
|
|
$
|
13,972
|
|
|
|
|
$
|
14,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MANUFACTURING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textron Aviation
|
|
|
|
|
|
|
$
|
170
|
|
|
|
|
$
|
120
|
|
|
|
|
|
$
|
445
|
|
|
|
|
$
|
303
|
|
|
|
Bell
|
|
|
|
|
|
|
|
108
|
|
|
|
|
|
114
|
|
|
|
|
|
|
425
|
|
|
|
|
|
415
|
|
|
|
Textron Systems
|
|
|
|
|
|
|
|
37
|
|
|
|
|
|
37
|
|
|
|
|
|
|
156
|
|
|
|
|
|
139
|
|
|
|
Industrial
|
|
|
|
|
|
|
|
73
|
|
|
|
|
|
83
|
|
|
|
|
|
|
218
|
|
|
|
|
|
290
|
|
|
|
|
|
|
|
|
|
|
|
388
|
|
|
|
|
|
354
|
|
|
|
|
|
|
1,244
|
|
|
|
|
|
1,147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
6
|
|
|
|
|
|
|
23
|
|
|
|
|
|
22
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
397
|
|
|
|
|
|
360
|
|
|
|
|
|
|
1,267
|
|
|
|
|
|
1,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses and other, net
|
|
|
|
|
|
|
|
(12
|
)
|
|
|
|
|
(44
|
)
|
|
|
|
|
|
(119
|
)
|
|
|
|
|
(132
|
)
|
Interest expense, net for Manufacturing group
|
|
|
|
|
|
|
|
(34
|
)
|
|
|
|
|
(38
|
)
|
|
|
|
|
|
(135
|
)
|
|
|
|
|
(145
|
)
|
Gain on business disposition (a)
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
444
|
|
|
|
|
|
-
|
|
Special charges (b)
|
|
|
|
|
|
|
|
(73
|
)
|
|
|
|
|
(55
|
)
|
|
|
|
|
|
(73
|
)
|
|
|
|
|
(130
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
|
|
|
278
|
|
|
|
|
|
223
|
|
|
|
|
|
|
1,384
|
|
|
|
|
|
762
|
|
Income tax expense (c)
|
|
|
|
|
|
|
|
(32
|
)
|
|
|
|
|
(329
|
)
|
|
|
|
|
|
(162
|
)
|
|
|
|
|
(456
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
|
|
|
|
|
246
|
|
|
|
|
|
(106
|
)
|
|
|
|
|
|
1,222
|
|
|
|
|
|
306
|
|
|
Discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
1
|
|
Net income (loss)
|
|
|
|
|
|
|
$
|
246
|
|
|
|
|
$
|
(106
|
)
|
|
|
|
|
$
|
1,222
|
|
|
|
|
$
|
307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations (d)
|
|
|
|
|
|
|
$
|
1.02
|
|
|
|
|
$
|
(0.40
|
)
|
|
|
|
|
$
|
4.83
|
|
|
|
|
$
|
1.14
|
|
|
Discontinued operations, net of income taxes
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Net income (loss)
|
|
|
|
|
|
|
$
|
1.02
|
|
|
|
|
$
|
(0.40
|
)
|
|
|
|
|
$
|
4.83
|
|
|
|
|
$
|
1.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding (d)
|
|
|
|
|
|
|
|
242,569,000
|
|
|
|
|
|
263,295,000
|
|
|
|
|
|
|
253,237,000
|
|
|
|
|
|
268,750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (Loss) from Continuing Operations and Diluted Earnings
Per Share (EPS) GAAP to Non-GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
Income (loss) from continuing operations - GAAP
|
|
|
|
|
$
|
246
|
|
|
|
$
|
(106
|
)
|
|
|
|
$
|
1,222
|
|
|
|
$
|
306
|
Gain on business disposition, net of income tax expense (benefit)
of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(9) million and $25 million, respectively (a)
|
|
|
|
|
|
(9
|
)
|
|
|
|
-
|
|
|
|
|
|
(419
|
)
|
|
|
|
-
|
Special charges, net of income taxes of $17 million, $18 million,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$17 million and $44 million, respectively (b)
|
|
|
|
|
|
56
|
|
|
|
|
37
|
|
|
|
|
|
56
|
|
|
|
|
86
|
Income tax expense (benefit) resulting from the Tax Cuts and Jobs
Act (c)
|
|
|
|
|
|
(14
|
)
|
|
|
|
266
|
|
|
|
|
|
(14
|
)
|
|
|
|
266
|
Adjusted income from continuing operations - Non-GAAP (e)
|
|
|
|
|
$
|
279
|
|
|
|
$
|
197
|
|
|
|
|
$
|
845
|
|
|
|
$
|
658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations - GAAP (d)
|
|
|
|
|
$
|
1.02
|
|
|
|
$
|
(0.40
|
)
|
|
|
|
$
|
4.83
|
|
|
|
$
|
1.14
|
Gain on business disposition, net of taxes
|
|
|
|
|
|
(0.04
|
)
|
|
|
|
-
|
|
|
|
|
|
(1.65
|
)
|
|
|
|
-
|
Special charges, net of taxes
|
|
|
|
|
|
0.23
|
|
|
|
|
0.14
|
|
|
|
|
|
0.22
|
|
|
|
|
0.32
|
Income tax expense (benefit) resulting from the Tax Cuts and Jobs Act
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
1.00
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
0.99
|
Adjusted income from continuing operations - Non-GAAP (e)
|
|
|
|
|
$
|
1.15
|
|
|
|
$
|
0.74
|
|
|
|
|
$
|
3.34
|
|
|
|
$
|
2.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
On July 2, 2018, Textron completed the sale of the Tools & Test
Equipment product line which resulted in an after-tax gain of $419
million.
|
|
|
|
|
(b)
|
|
|
On December 4, 2018, our Board of Directors approved a plan to
restructure the Textron Specialized Vehicles businesses within our
Industrial segment. We incurred special charges of $73 million in
the fourth quarter of 2018 under this plan, which included asset
impairment charges of $47 million, contract termination and other
costs of $18 million and severance and related costs of $8 million.
Special charges for the three and twelve months ended December 30,
2017 included $48 million and $90 million, respectively, related to
a 2016 restructuring plan, and $7 million and $40 million,
respectively, of restructuring, integration and transaction costs
related to the Arctic Cat acquisition.
|
|
|
|
|
(c)
|
|
|
On December 22, 2017, the U.S. Government enacted tax reform
legislation known as the Tax Cuts and Jobs Act (the "Tax Act").
Income tax expense for the three and twelve months ended December
30, 2017 included a $266 million one-time charge to reflect our
provisional estimate of the net impact of the Tax 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 Tax Act’s
transition tax on previously unremitted earnings of non-U.S.
subsidiaries. We completed our analysis of this legislation in the
fourth quarter of 2018 and recorded a $14 million income tax benefit.
|
|
|
|
|
(d)
|
|
|
For the three months ended December 30, 2017, the diluted average
shares used to calculated EPS on a GAAP basis excluded potential
common shares (stock options), due to their antidilutive effect
resulting from the net loss. For the three and twelve months ended
December 29, 2018 and the twelve months ended December 30, 2017,
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 29,
2018
|
|
|
December 30,
2017
|
Assets (a)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
|
|
|
$
|
987
|
|
|
$
|
1,079
|
Accounts receivable, net
|
|
|
|
|
|
|
1,024
|
|
|
|
1,363
|
Inventories
|
|
|
|
|
|
|
3,818
|
|
|
|
4,150
|
Other current assets
|
|
|
|
|
|
|
785
|
|
|
|
435
|
Net property, plant and equipment
|
|
|
|
|
|
|
2,615
|
|
|
|
2,721
|
Goodwill
|
|
|
|
|
|
|
2,218
|
|
|
|
2,364
|
Other assets
|
|
|
|
|
|
|
1,800
|
|
|
|
2,059
|
Finance group assets
|
|
|
|
|
|
|
1,017
|
|
|
|
1,169
|
|
Total Assets
|
|
|
|
|
|
$
|
14,264
|
|
|
$
|
15,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity (a)
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt and current portion of long-term debt
|
|
|
|
|
|
$
|
258
|
|
|
$
|
14
|
Current liabilities
|
|
|
|
|
|
|
3,248
|
|
|
|
3,646
|
Other liabilities
|
|
|
|
|
|
|
1,932
|
|
|
|
2,006
|
Long-term debt
|
|
|
|
|
|
|
2,808
|
|
|
|
3,074
|
Finance group liabilities
|
|
|
|
|
|
|
826
|
|
|
|
953
|
|
Total Liabilities
|
|
|
|
|
|
|
9,072
|
|
|
|
9,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders' Equity
|
|
|
|
|
|
|
5,192
|
|
|
|
5,647
|
|
Total Liabilities and Shareholders' Equity
|
|
|
|
|
|
$
|
14,264
|
|
|
$
|
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.
|
|
|
|
|
TEXTRON INC.
MANUFACTURING GROUP
Condensed
Schedule of Cash Flows
(In millions) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
December 29,
|
|
|
December 30,
|
|
|
|
December 29,
|
|
|
December 30,
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
|
|
|
$
|
239
|
|
|
|
$
|
(152
|
)
|
|
|
|
$
|
1,198
|
|
|
|
$
|
247
|
|
Depreciation and amortization
|
|
|
|
|
|
|
113
|
|
|
|
|
113
|
|
|
|
|
|
429
|
|
|
|
|
435
|
|
Gain on business disposition
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
(444
|
)
|
|
|
|
-
|
|
Changes in working capital (a)
|
|
|
|
|
|
|
1
|
|
|
|
|
364
|
|
|
|
|
|
(203
|
)
|
|
|
|
96
|
|
Changes in other assets and liabilities and non-cash items (a)
|
|
|
|
|
|
|
40
|
|
|
|
|
278
|
|
|
|
|
|
97
|
|
|
|
|
152
|
|
Dividends received from TFC
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
50
|
|
|
|
|
-
|
|
Net cash from operating activities of continuing operations (a)
|
|
|
|
|
|
|
393
|
|
|
|
|
603
|
|
|
|
|
|
1,127
|
|
|
|
|
930
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from business disposition
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
807
|
|
|
|
|
-
|
|
Capital expenditures
|
|
|
|
|
|
|
(136
|
)
|
|
|
|
(147
|
)
|
|
|
|
|
(369
|
)
|
|
|
|
(423
|
)
|
Net proceeds from corporate-owned life insurance policies (a)
|
|
|
|
|
|
|
12
|
|
|
|
|
(3
|
)
|
|
|
|
|
110
|
|
|
|
|
17
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
|
|
2
|
|
|
|
|
1
|
|
|
|
|
|
14
|
|
|
|
|
7
|
|
Net cash used in acquisitions
|
|
|
|
|
|
|
(20
|
)
|
|
|
|
(1
|
)
|
|
|
|
|
(23
|
)
|
|
|
|
(331
|
)
|
Other investing activities, net
|
|
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
|
-
|
|
|
|
|
2
|
|
Net cash from investing activities (a)
|
|
|
|
|
|
|
(142
|
)
|
|
|
|
(149
|
)
|
|
|
|
|
539
|
|
|
|
|
(728
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
|
|
|
-
|
|
|
|
|
347
|
|
|
|
|
|
-
|
|
|
|
|
992
|
|
Principal payments on long-term debt
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
(701
|
)
|
|
|
|
|
(5
|
)
|
|
|
|
(704
|
)
|
Purchases of Textron common stock
|
|
|
|
|
|
|
(400
|
)
|
|
|
|
(131
|
)
|
|
|
|
|
(1,783
|
)
|
|
|
|
(582
|
)
|
Other financing activities, net
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
5
|
|
|
|
|
|
50
|
|
|
|
|
28
|
|
Net cash from financing activities
|
|
|
|
|
|
|
(404
|
)
|
|
|
|
(480
|
)
|
|
|
|
|
(1,738
|
)
|
|
|
|
(266
|
)
|
Total cash flows from continuing operations
|
|
|
|
|
|
|
(153
|
)
|
|
|
|
(26
|
)
|
|
|
|
|
(72
|
)
|
|
|
|
(64
|
)
|
Total cash flows from discontinued operations
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
(3
|
)
|
|
|
|
|
(2
|
)
|
|
|
|
(27
|
)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
|
|
|
(9
|
)
|
|
|
|
4
|
|
|
|
|
|
(18
|
)
|
|
|
|
33
|
|
Net change in cash and equivalents
|
|
|
|
|
|
|
(163
|
)
|
|
|
|
(25
|
)
|
|
|
|
|
(92
|
)
|
|
|
|
(58
|
)
|
Cash and equivalents at beginning of period
|
|
|
|
|
|
|
1,150
|
|
|
|
|
1,104
|
|
|
|
|
|
1,079
|
|
|
|
|
1,137
|
|
Cash and equivalents at end of period
|
|
|
|
|
|
$
|
987
|
|
|
|
$
|
1,079
|
|
|
|
|
$
|
987
|
|
|
|
$
|
1,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from operating activities of continuing operations -
GAAP (a)
|
|
|
|
|
|
$
|
393
|
|
|
|
$
|
603
|
|
|
|
|
$
|
1,127
|
|
|
|
$
|
930
|
|
Less:
|
Capital expenditures
|
|
|
|
|
|
|
(136
|
)
|
|
|
|
(147
|
)
|
|
|
|
|
(369
|
)
|
|
|
|
(423
|
)
|
|
|
Dividends received from TFC
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
(50
|
)
|
|
|
|
-
|
|
Plus:
|
Total pension contributions
|
|
|
|
|
|
|
15
|
|
|
|
|
20
|
|
|
|
|
|
52
|
|
|
|
|
358
|
|
|
|
Taxes paid on gain on business disposition
|
|
|
|
|
|
|
10
|
|
|
|
|
-
|
|
|
|
|
|
10
|
|
|
|
|
-
|
|
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
|
|
2
|
|
|
|
|
1
|
|
|
|
|
|
14
|
|
|
|
|
7
|
|
Manufacturing cash flow before pension contributions - Non-GAAP
(a) (b)
|
|
|
|
|
|
$
|
284
|
|
|
|
$
|
477
|
|
|
|
|
$
|
784
|
|
|
|
$
|
872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
For the three and twelve months ended December 30, 2017, $(3)
million and $17 million, respectively, of net proceeds 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
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
December 29,
|
|
|
December 30,
|
|
|
|
December 29,
|
|
|
December 30,
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
|
|
|
$
|
246
|
|
|
|
$
|
(106
|
)
|
|
|
|
$
|
1,222
|
|
|
|
$
|
306
|
|
Depreciation and amortization
|
|
|
|
|
|
|
115
|
|
|
|
|
115
|
|
|
|
|
|
437
|
|
|
|
|
447
|
|
Gain on business disposition
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
(444
|
)
|
|
|
|
-
|
|
Changes in working capital (a)
|
|
|
|
|
|
|
12
|
|
|
|
|
352
|
|
|
|
|
|
(202
|
)
|
|
|
|
107
|
|
Changes in other assets and liabilities and non-cash items (a)
|
|
|
|
|
|
|
39
|
|
|
|
|
237
|
|
|
|
|
|
96
|
|
|
|
|
103
|
|
Net cash from operating activities of continuing operations (a)
|
|
|
|
|
|
|
412
|
|
|
|
|
598
|
|
|
|
|
|
1,109
|
|
|
|
|
963
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from business disposition
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
807
|
|
|
|
|
-
|
|
Capital expenditures
|
|
|
|
|
|
|
(136
|
)
|
|
|
|
(147
|
)
|
|
|
|
|
(369
|
)
|
|
|
|
(423
|
)
|
Net proceeds from corporate-owned life insurance policies (a)
|
|
|
|
|
|
|
12
|
|
|
|
|
(3
|
)
|
|
|
|
|
110
|
|
|
|
|
17
|
|
Finance receivables repaid
|
|
|
|
|
|
|
2
|
|
|
|
|
5
|
|
|
|
|
|
27
|
|
|
|
|
32
|
|
Net cash used in acquisitions
|
|
|
|
|
|
|
(20
|
)
|
|
|
|
(1
|
)
|
|
|
|
|
(23
|
)
|
|
|
|
(331
|
)
|
Other investing activities, net
|
|
|
|
|
|
|
28
|
|
|
|
|
12
|
|
|
|
|
|
68
|
|
|
|
|
60
|
|
Net cash from investing activities (a)
|
|
|
|
|
|
|
(114
|
)
|
|
|
|
(134
|
)
|
|
|
|
|
620
|
|
|
|
|
(645
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
|
|
|
-
|
|
|
|
|
354
|
|
|
|
|
|
-
|
|
|
|
|
1,036
|
|
Principal payments on long-term debt and nonrecourse debt
|
|
|
|
|
|
|
(71
|
)
|
|
|
|
(725
|
)
|
|
|
|
|
(131
|
)
|
|
|
|
(841
|
)
|
Purchases of Textron common stock
|
|
|
|
|
|
|
(400
|
)
|
|
|
|
(131
|
)
|
|
|
|
|
(1,783
|
)
|
|
|
|
(582
|
)
|
Other financing activities, net
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
5
|
|
|
|
|
|
50
|
|
|
|
|
27
|
|
Net cash from financing activities
|
|
|
|
|
|
|
(474
|
)
|
|
|
|
(497
|
)
|
|
|
|
|
(1,864
|
)
|
|
|
|
(360
|
)
|
Total cash flows from continuing operations
|
|
|
|
|
|
|
(176
|
)
|
|
|
|
(33
|
)
|
|
|
|
|
(135
|
)
|
|
|
|
(42
|
)
|
Total cash flows from discontinued operations
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
(3
|
)
|
|
|
|
|
(2
|
)
|
|
|
|
(27
|
)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
|
|
|
(9
|
)
|
|
|
|
4
|
|
|
|
|
|
(18
|
)
|
|
|
|
33
|
|
Net change in cash and equivalents
|
|
|
|
|
|
|
(186
|
)
|
|
|
|
(32
|
)
|
|
|
|
|
(155
|
)
|
|
|
|
(36
|
)
|
Cash and equivalents at beginning of period
|
|
|
|
|
|
|
1,293
|
|
|
|
|
1,294
|
|
|
|
|
|
1,262
|
|
|
|
|
1,298
|
|
Cash and equivalents at end of period
|
|
|
|
|
|
$
|
1,107
|
|
|
|
$
|
1,262
|
|
|
|
|
$
|
1,107
|
|
|
|
$
|
1,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
For the three and twelve months ended December 30, 2017, $(3)
million and $17 million, respectively, of net proceeds 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 Gain on business disposition, net of
taxes, Special charges, net of taxes, and the income tax expense
(benefit) resulting from the Tax Cuts and Jobs Act (the "Tax Act").
The Gain on business disposition is not considered indicative of
ongoing operations as it is a significant one-time transaction. 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. In addition, the impact from the
Tax Act is not considered to be indicative of ongoing operations
since it represents a one-time adjustment related to a significant
tax reform of a non-recurring nature.
|
|
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.
|
• For the 2018 periods presented, Manufacturing cash flow before
pension contributions excludes taxes paid related to the gain
realized on the Tools and Test business disposition. We have made
this adjustment to the non-GAAP measure because we believe this
use of cash is not representative of cash used by our
manufacturing operations.
|
|
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 (loss) from Continuing Operations and Earnings Per Share
(EPS) GAAP to Non-GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
|
|
|
December 29, 2018
|
|
December 30, 2017
|
Income (loss) from continuing operations - GAAP
|
|
|
|
|
|
$
|
246
|
|
|
|
$
|
(106
|
)
|
|
|
|
$
|
1,222
|
|
|
$
|
306
|
|
Gain on business disposition, net of income tax expense (benefit)
of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(9) million and $25 million, respectively
|
|
|
|
|
|
|
(9
|
)
|
|
|
|
-
|
|
|
|
|
|
(419
|
)
|
|
|
-
|
|
Special charges, net of income taxes of $17 million, $18 million,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$17 million and $44 million, respectively
|
|
|
|
|
|
|
56
|
|
|
|
|
37
|
|
|
|
|
|
56
|
|
|
|
86
|
|
Income tax expense (benefit) resulting from the Tax Cuts and Jobs Act
|
|
|
|
|
|
|
(14
|
)
|
|
|
|
266
|
|
|
|
|
|
(14
|
)
|
|
|
266
|
|
Adjusted income from continuing operations - Non-GAAP
|
|
|
|
|
|
$
|
279
|
|
|
|
$
|
197
|
|
|
|
|
$
|
845
|
|
|
$
|
658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations - GAAP
|
|
|
|
|
|
$
|
1.02
|
|
|
|
$
|
(0.40
|
)
|
|
|
|
$
|
4.83
|
|
|
$
|
1.14
|
|
Gain on business disposition, net of taxes
|
|
|
|
|
|
|
(0.04
|
)
|
|
|
|
-
|
|
|
|
|
|
(1.65
|
)
|
|
|
-
|
|
Special charges, net of income taxes
|
|
|
|
|
|
|
0.23
|
|
|
|
|
0.14
|
|
|
|
|
|
0.22
|
|
|
|
0.32
|
|
Income tax expense (benefit) resulting from the Tax Cuts and Jobs Act
|
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
1.00
|
|
|
|
|
|
(0.06
|
)
|
|
|
0.99
|
|
Adjusted income from continuing operations - Non-GAAP
|
|
|
|
|
|
$
|
1.15
|
|
|
|
$
|
0.74
|
|
|
|
|
$
|
3.34
|
|
|
$
|
2.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing Cash Flow Before Pension Contributions GAAP to
Non-GAAP Reconciliation and 2019 Outlook:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
|
|
|
December 29, 2018
|
|
December 30, 2017
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
|
|
|
$
|
393
|
|
|
|
$
|
603
|
|
|
|
|
$
|
1,127
|
|
|
$
|
930
|
|
Less:
|
Capital expenditures
|
|
|
|
|
|
|
(136
|
)
|
|
|
|
(147
|
)
|
|
|
|
|
(369
|
)
|
|
|
(423
|
)
|
|
Dividends received from TFC
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
(50
|
)
|
|
|
-
|
|
Plus:
|
Total pension contributions
|
|
|
|
|
|
|
15
|
|
|
|
|
20
|
|
|
|
|
|
52
|
|
|
|
358
|
|
|
Taxes paid on gain on business disposition
|
|
|
|
|
|
|
10
|
|
|
|
|
-
|
|
|
|
|
|
10
|
|
|
|
-
|
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
|
|
2
|
|
|
|
|
1
|
|
|
|
|
|
14
|
|
|
|
7
|
|
Manufacturing cash flow before pension contributions - Non-GAAP
|
|
|
|
|
|
$
|
284
|
|
|
|
$
|
477
|
|
|
|
|
$
|
784
|
|
|
$
|
872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Outlook
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,020
|
|
-
|
$
|
1,120
|
|
Less:
|
Capital expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(380)
|
|
Plus:
|
Total pension contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
Taxes paid on gain on business disposition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
Manufacturing cash flow before pension contributions - Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
700
|
|
-
|
$
|
800
|
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190124005148/en/
Investor Contacts:
Eric Salander – 401-457-2288
Jeffrey
Trivella – 401-457-2288
Media Contact:
David
Sylvestre – 401-457-2362
Source: Textron