PROVIDENCE, R.I.--(BUSINESS WIRE)--
Textron Inc. (NYSE: TXT) today reported fourth quarter 2016 income from
continuing operations of $0.78 per share compared to $0.81 per share in
the fourth quarter of 2015. During this year’s fourth quarter, the
company recorded an $8 million pre-tax restructuring charge ($0.02 per
share, after-tax). Excluding this item, adjusted income from continuing
operations, a non-GAAP measure that is defined and reconciled to GAAP in
an attachment to this release, was $0.80 per share for the fourth
quarter of 2016.
Revenues in the quarter were $3.8 billion, down 2.5 percent from the
fourth quarter of 2015. Textron segment profit in the quarter was $391
million, up $13 million from the fourth quarter of 2015.
“Overall, revenues were down in the quarter but we were encouraged by
increasing demand at Industrial and strong operating performance at
Bell,” said Textron Chairman and CEO Scott C. Donnelly. “We also
completed the first flight of our production Scorpion jet as we
continued to ramp investment in this program to position us to compete
for opportunities in 2017.”
Full-year income from continuing operations was $3.09 per share compared
to $2.50 per share last year. Full-year adjusted income from continuing
operations, a non-GAAP measure that is defined and reconciled to GAAP in
an attachment to this release, was $2.62 per share, compared to $2.50 in
2015.
Cash Flow
Net cash provided by operating activities of continuing operations of
the manufacturing group for the full year was $988 million, compared to
$1,038 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 $573 million compared to $631
million last year.
Acquisition
Today, Textron announced that it has reached a definitive agreement to
acquire Arctic Cat Inc. (NASDAQ: ACAT) in a cash transaction valued at
approximately $247 million, plus the assumption of existing debt. Arctic
Cat is a leader in the recreational vehicle industry. The company
manufactures and markets all-terrain vehicles (ATVs), side-by-sides and
snowmobiles, in addition to related parts, garments and accessories
under the Arctic Cat® and Motorfist® brand names.
“Arctic Cat is a superb strategic fit for Textron,” said Donnelly. “With
our recent product introductions in the outdoor recreational vehicle
market under the Stampede name, we believe Arctic Cat, one of the most
recognized brands in the industry, provides an excellent platform to
expand our portfolio, increase our distribution and create growth within
our Specialized Vehicles business.”
Textron has agreed to make a cash tender offer for all outstanding
shares of Arctic Cat common stock at a price of $18.50 per share. The
tender offer is expected to commence no later than February 7, 2017. The
completion of the acquisition is subject to customary conditions and
regulatory approvals.
Share Repurchase Plan
On January 24, 2017, Textron’s Board of Directors approved a new
authorization for the repurchase of up to 25 million shares, under which
the company intends to purchase shares to offset the impact of dilution
from stock-based compensation and benefit plans and for opportunistic
capital management purposes.
Outlook
Textron is forecasting 2017 revenues of approximately $14.3 billion, up
four percent. Textron expects full-year 2017 GAAP earnings per share
from continuing operations will be in the range of $2.40 to $2.65, or
$2.50 to $2.70 on an adjusted basis (non-GAAP), which is reconciled to
GAAP in an attachment to this release. The company is estimating net
cash provided by operating activities of continuing operations of the
manufacturing group will be between $1,035 million and $1,135 million
and manufacturing cash flow before pension contributions (the non-GAAP
measure) will be between $650 and $750 million with planned pension
contributions of about $55 million. Textron intends to update its 2017
outlook to include Arctic Cat following the completion of the
transaction.
Donnelly continued, “Our outlook reflects the continuation of our
strategy around organic growth through new product investments amid
challenging end markets. As we transition our product portfolios to
comprise a greater percentage of these new offerings, we’ll expect
improvement in our growth rate and margins over the longer term.”
Fourth Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation were down $52 million, primarily due to
lower defense and turboprop volumes partially offset by higher pre-owned
volume.
Textron Aviation delivered 58 new Citation jets and 28 King Air
turboprops in the quarter, compared to 60 jets and 33 King Airs in last
year’s fourth quarter.
Textron Aviation recorded a segment profit of $135 million in the fourth
quarter compared to $138 million a year ago.
Textron Aviation backlog at the end of the fourth quarter was $1.0
billion, down $73 million from the end of the third quarter.
Bell
Bell revenues were down $148 million, as Bell delivered 35 commercial
helicopters, compared to 56 units last year, 4 V-22’s in the quarter,
down from 8 V-22’s in last year’s fourth quarter and, 8 H-1’s compared
to 9 H-1’s last year.
Segment profit was up $2 million despite the decline in revenues,
primarily due to favorable performance.
Bell backlog at the end of the fourth quarter was $5.4 billion, up $416
million from the end of the third quarter.
Textron Systems
Revenues at Textron Systems increased $69 million, primarily due to
higher volume at Marine and Land Systems.
Segment profit was up $12 million, reflecting improved performance.
Textron Systems’ backlog at the end of the fourth quarter was $1.8
billion, down $367 million from the end of the third quarter.
Industrial
Industrial revenues increased $35 million due to higher volumes at
Kautex and Specialized Vehicles.
Segment profit was essentially flat from the fourth quarter of 2015.
Finance
Finance segment revenues decreased $2 million and segment profit
increased $2 million.
Conference Call Information
Textron will host its conference call today, January 25, 2017 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) 288-8960 in the U.S. or (651) 291-0344
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 25, 2017 by
dialing (320) 365-3844; Access Code: 373341.
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 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; and cybersecurity
threats, including the potential misappropriation of assets or sensitive
information, corruption of data, operational disruption or the
occurrence of any event, change or other circumstance that could give
rise to the termination of the Agreement and Plan of Merger; the
inability to complete the transaction due to an insufficient percentage
of shares being tendered in the transaction or due to the failure to
receive required regulatory or other approvals or to satisfy other
conditions to the transaction; the risk that the proposed transaction
disrupts current plans and operations; the risk that anticipated
synergies and opportunities as a result of the transaction will not be
realized; difficulty or unanticipated expenses in connection with
integrating Arctic Cat into Textron; the risk that the acquired business
does not perform as planned; and potential difficulties in employee
retention following the closing of the transaction.
The tender offer described herein has not yet commenced. The description
contained herein is neither an offer to purchase nor a solicitation of
an offer to sell securities of Arctic Cat. At the time the tender offer
is commenced, Textron and its wholly-owned subsidiary intend to file a
Tender Offer Statement on Schedule TO containing an offer to purchase,
forms of letters of transmittal and other documents relating to the
tender offer, and Arctic Cat intends to file a
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to
the tender offer. Textron, its wholly-owned subsidiary and Arctic Cat
intend to mail these documents to the shareholders of Arctic Cat. These
documents will contain important information about the tender offer, and
shareholders of Arctic Cat are urged to read them carefully when they
become available. Shareholders of Arctic Cat will be able to obtain a
free copy of these documents (when they become available) and other
documents filed by Arctic Cat or Textron with the SEC at the website
maintained by the SEC at www.sec.gov.
In addition, shareholders will be able to obtain a free copy of these
documents (when they become available) at Textron’s website at www.textron.com
or by contacting Textron’s Investor Relations department at (401)
457-2288.
TEXTRON INC.
Revenues by Segment and Reconciliation of Segment Profit to Net
Income
Three and Twelve Months Ended December 31, 2016 and January 2,
2016
(Dollars in millions, except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
January 2, 2016
|
|
|
December 31, 2016
|
|
|
January 2, 2016
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MANUFACTURING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textron Aviation
|
|
|
|
|
|
$
|
1,436
|
|
|
|
|
$
|
1,488
|
|
|
|
|
|
$
|
4,921
|
|
|
|
|
$
|
4,822
|
|
|
|
Bell
|
|
|
|
|
|
|
|
|
887
|
|
|
|
|
|
1,035
|
|
|
|
|
|
|
3,239
|
|
|
|
|
|
3,454
|
|
|
|
Textron Systems
|
|
|
|
|
|
|
532
|
|
|
|
|
|
463
|
|
|
|
|
|
|
1,756
|
|
|
|
|
|
1,520
|
|
|
|
Industrial
|
|
|
|
|
|
|
|
952
|
|
|
|
|
|
917
|
|
|
|
|
|
|
3,794
|
|
|
|
|
|
3,544
|
|
|
|
|
|
|
|
|
|
|
|
|
3,807
|
|
|
|
|
|
3,903
|
|
|
|
|
|
|
13,710
|
|
|
|
|
|
13,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
20
|
|
|
|
|
|
|
78
|
|
|
|
|
|
83
|
|
|
|
Total revenues
|
|
|
|
|
|
|
$
|
3,825
|
|
|
|
|
$
|
3,923
|
|
|
|
|
|
$
|
13,788
|
|
|
|
|
$
|
13,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MANUFACTURING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textron Aviation
|
|
|
|
|
|
$
|
135
|
|
|
|
|
$
|
138
|
|
|
|
|
|
$
|
389
|
|
|
|
|
$
|
400
|
|
|
|
Bell
|
|
|
|
|
|
|
|
|
126
|
|
|
|
|
|
124
|
|
|
|
|
|
|
386
|
|
|
|
|
|
400
|
|
|
|
Textron Systems
|
|
|
|
|
|
|
53
|
|
|
|
|
|
41
|
|
|
|
|
|
|
186
|
|
|
|
|
|
129
|
|
|
|
Industrial
|
|
|
|
|
|
|
|
73
|
|
|
|
|
|
73
|
|
|
|
|
|
|
329
|
|
|
|
|
|
302
|
|
|
|
|
|
|
|
|
|
|
|
|
387
|
|
|
|
|
|
376
|
|
|
|
|
|
|
1,290
|
|
|
|
|
|
1,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
2
|
|
|
|
|
|
|
19
|
|
|
|
|
|
24
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
391
|
|
|
|
|
|
378
|
|
|
|
|
|
|
1,309
|
|
|
|
|
|
1,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses and other, net
|
|
|
|
|
(56
|
)
|
|
|
|
|
(52
|
)
|
|
|
|
|
|
(172
|
)
|
|
|
|
|
(154
|
)
|
Interest expense, net for Manufacturing group
|
|
|
|
|
(33
|
)
|
|
|
|
|
(32
|
)
|
|
|
|
|
|
(138
|
)
|
|
|
|
|
(130
|
)
|
Special charges (a)
|
|
|
|
|
|
|
(8
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
(123
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
|
294
|
|
|
|
|
|
294
|
|
|
|
|
|
|
876
|
|
|
|
|
|
971
|
|
Income tax expense (b)
|
|
|
|
|
|
|
(79
|
)
|
|
|
|
|
(69
|
)
|
|
|
|
|
|
(33
|
)
|
|
|
|
|
(273
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
|
215
|
|
|
|
|
|
225
|
|
|
|
|
|
|
843
|
|
|
|
|
|
698
|
|
|
Discontinued operations, net of income taxes (b)
|
|
|
|
|
(1
|
)
|
|
|
|
|
1
|
|
|
|
|
|
|
119
|
|
|
|
|
|
(1
|
)
|
Net income
|
|
|
|
|
|
|
$
|
214
|
|
|
|
|
$
|
226
|
|
|
|
|
|
$
|
962
|
|
|
|
|
$
|
697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
0.78
|
|
|
|
|
$
|
0.81
|
|
|
|
|
|
$
|
3.09
|
|
|
|
|
$
|
2.50
|
|
|
Discontinued operations, net of income taxes
|
|
|
|
|
-
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
0.44
|
|
|
|
|
|
-
|
|
|
Net income
|
|
|
|
|
|
|
$
|
0.78
|
|
|
|
|
$
|
0.82
|
|
|
|
|
|
$
|
3.53
|
|
|
|
|
$
|
2.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted average shares outstanding
|
|
|
|
|
273,114,000
|
|
|
|
|
|
276,653,000
|
|
|
|
|
|
|
272,365,000
|
|
|
|
|
|
278,727,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) During 2016, our Board of Directors approved 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. Special charges for the three and
twelve months ended December 31, 2016 include restructuring charges for
this plan, which primarily consists of severance costs of $4 million and
$70 million, respectively, and asset impairments of $2 million and $38
million, respectively.
(b) 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.
|
|
|
|
|
|
|
|
|
|
Textron Inc.
|
Condensed Consolidated Balance Sheets
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
|
January 2, 2016
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
|
$
|
1,137
|
|
|
$
|
946
|
Accounts receivable, net
|
|
|
|
|
1,064
|
|
|
|
1,047
|
Inventories
|
|
|
|
|
4,464
|
|
|
|
4,144
|
Other current assets
|
|
|
|
|
388
|
|
|
|
341
|
Net property, plant and equipment
|
|
|
|
|
2,581
|
|
|
|
2,492
|
Goodwill
|
|
|
|
|
2,113
|
|
|
|
2,023
|
Other assets
|
|
|
|
|
2,331
|
|
|
|
2,399
|
Finance group assets
|
|
|
|
|
1,280
|
|
|
|
1,316
|
Total Assets
|
|
|
|
$
|
15,358
|
|
|
$
|
14,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Short-term debt and current portion of long-term debt
|
|
|
|
$
|
363
|
|
|
$
|
262
|
Other current liabilities
|
|
|
|
|
3,530
|
|
|
|
3,530
|
Other liabilities
|
|
|
|
|
2,354
|
|
|
|
2,376
|
Long-term debt
|
|
|
|
|
2,414
|
|
|
|
2,435
|
Finance group liabilities
|
|
|
|
|
1,123
|
|
|
|
1,141
|
Total Liabilities
|
|
|
|
|
9,784
|
|
|
|
9,744
|
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders' Equity
|
|
|
|
|
5,574
|
|
|
|
4,964
|
Total Liabilities and Shareholders' Equity
|
|
|
|
$
|
15,358
|
|
|
$
|
14,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEXTRON INC.
|
MANUFACTURING GROUP
|
Condensed Schedule of Cash Flows and Manufacturing Cash Flow GAAP
to Non-GAAP Reconciliations
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31,
|
|
|
January 2,
|
|
|
December 31,
|
|
|
January 2,
|
|
|
|
|
|
|
2016
|
|
|
2016
|
|
|
2016
|
|
|
2016
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
|
$
|
219
|
|
|
|
|
$
|
224
|
|
|
|
$
|
832
|
|
|
|
|
$
|
684
|
|
Depreciation and amortization
|
|
|
|
|
|
|
115
|
|
|
|
|
|
125
|
|
|
|
|
437
|
|
|
|
|
|
449
|
|
Changes in working capital
|
|
|
|
|
|
|
468
|
|
|
|
|
|
258
|
|
|
|
|
(399
|
)
|
|
|
|
|
(297
|
)
|
Changes in other assets and liabilities and non-cash items
|
|
|
|
|
49
|
|
|
|
|
|
41
|
|
|
|
|
89
|
|
|
|
|
|
139
|
|
Dividends received from TFC
|
|
|
|
|
|
|
-
|
|
|
|
|
|
43
|
|
|
|
|
29
|
|
|
|
|
|
63
|
|
Net cash from operating activities of continuing operations
|
|
|
|
|
851
|
|
|
|
|
|
691
|
|
|
|
|
988
|
|
|
|
|
|
1,038
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
|
|
(140
|
)
|
|
|
|
|
(134
|
)
|
|
|
|
(446
|
)
|
|
|
|
|
(420
|
)
|
Net cash used in acquisitions
|
|
|
|
|
|
|
(7
|
)
|
|
|
|
|
-
|
|
|
|
|
(186
|
)
|
|
|
|
|
(81
|
)
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
2
|
|
|
|
|
|
2
|
|
|
|
|
10
|
|
|
|
|
|
8
|
|
Other investing activities, net
|
|
|
|
|
|
|
4
|
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
|
(3
|
)
|
Net cash from investing activities
|
|
|
|
|
|
|
(141
|
)
|
|
|
|
|
(131
|
)
|
|
|
|
(621
|
)
|
|
|
|
|
(496
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
345
|
|
|
|
|
|
-
|
|
Principal payments on long-term debt
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
(100
|
)
|
|
|
|
(254
|
)
|
|
|
|
|
(100
|
)
|
Decrease in short-term debt
|
|
|
|
|
|
|
(113
|
)
|
|
|
|
|
-
|
|
|
|
|
(3
|
)
|
|
|
|
|
-
|
|
Purchases of Textron common stock
|
|
|
|
|
|
|
(26
|
)
|
|
|
|
|
(8
|
)
|
|
|
|
(241
|
)
|
|
|
|
|
(219
|
)
|
Other financing activities, net
|
|
|
|
|
|
|
3
|
|
|
|
|
|
3
|
|
|
|
|
7
|
|
|
|
|
|
11
|
|
Net cash from financing activities
|
|
|
|
|
|
|
(137
|
)
|
|
|
|
|
(105
|
)
|
|
|
|
(146
|
)
|
|
|
|
|
(308
|
)
|
Total cash flows from continuing operations
|
|
|
|
|
|
|
573
|
|
|
|
|
|
455
|
|
|
|
|
221
|
|
|
|
|
|
234
|
|
Total cash flows from discontinued operations
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
(2
|
)
|
|
|
|
|
(4
|
)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
|
(25
|
)
|
|
|
|
|
(6
|
)
|
|
|
|
(28
|
)
|
|
|
|
|
(15
|
)
|
Net change in cash and equivalents
|
|
|
|
|
|
|
548
|
|
|
|
|
|
449
|
|
|
|
|
191
|
|
|
|
|
|
215
|
|
Cash and equivalents at beginning of period
|
|
|
|
|
|
|
589
|
|
|
|
|
|
497
|
|
|
|
|
946
|
|
|
|
|
|
731
|
|
Cash and equivalents at end of period
|
|
|
|
|
|
$
|
1,137
|
|
|
|
|
$
|
946
|
|
|
|
$
|
1,137
|
|
|
|
|
$
|
946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
|
$
|
851
|
|
|
|
|
$
|
691
|
|
|
|
$
|
988
|
|
|
|
|
$
|
1,038
|
|
Less: Capital expenditures
|
|
|
|
|
|
|
(140
|
)
|
|
|
|
|
(134
|
)
|
|
|
|
(446
|
)
|
|
|
|
|
(420
|
)
|
Dividends received from TFC
|
|
|
|
|
|
|
-
|
|
|
|
|
|
(43
|
)
|
|
|
|
(29
|
)
|
|
|
|
|
(63
|
)
|
Plus: Total pension contributions
|
|
|
|
|
|
|
14
|
|
|
|
|
|
18
|
|
|
|
|
50
|
|
|
|
|
|
68
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
2
|
|
|
|
|
|
2
|
|
|
|
|
10
|
|
|
|
|
|
8
|
|
Manufacturing cash flow before pension contributions- Non-GAAP*
|
|
|
|
$
|
727
|
|
|
|
|
$
|
534
|
|
|
|
$
|
573
|
|
|
|
|
$
|
631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Outlook
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
|
|
|
$ 1,035 - $ 1,135
|
Less: Capital expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
(440)
|
Plus: Total pension contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
55
|
Manufacturing cash flow before pension contributions- Non-GAAP*
|
|
|
|
|
|
|
|
|
|
$ 650 - $ 750
|
|
*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 31,
|
|
|
January 2,
|
|
|
December 31,
|
|
|
January 2,
|
|
|
|
|
2016
|
|
|
2016
|
|
|
2016
|
|
|
2016
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$ 215
|
|
|
|
$ 225
|
|
|
$ 843
|
|
|
|
$ 698
|
Depreciation and amortization
|
|
|
|
118
|
|
|
|
129
|
|
|
449
|
|
|
|
461
|
Changes in working capital
|
|
|
|
473
|
|
|
|
285
|
|
|
(375)
|
|
|
|
(207)
|
Changes in other assets and liabilities and non-cash items
|
|
|
|
63
|
|
|
|
36
|
|
|
97
|
|
|
|
142
|
Net cash from operating activities of continuing operations
|
|
|
|
869
|
|
|
|
675
|
|
|
1,014
|
|
|
|
1,094
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(140)
|
|
|
|
(134)
|
|
|
(446)
|
|
|
|
(420)
|
Net cash used in acquisitions
|
|
|
|
(7)
|
|
|
|
-
|
|
|
(186)
|
|
|
|
(81)
|
Finance receivables repaid
|
|
|
|
4
|
|
|
|
1
|
|
|
44
|
|
|
|
67
|
Other investing activities, net
|
|
|
|
12
|
|
|
|
15
|
|
|
65
|
|
|
|
46
|
Net cash from investing activities
|
|
|
|
(131)
|
|
|
|
(118)
|
|
|
(523)
|
|
|
|
(388)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
5
|
|
|
|
6
|
|
|
525
|
|
|
|
61
|
Principal payments on long-term debt and nonrecourse debt
|
|
|
|
(24)
|
|
|
|
(160)
|
|
|
(457)
|
|
|
|
(356)
|
Decrease in short-term debt
|
|
|
|
(113)
|
|
|
|
-
|
|
|
(3)
|
|
|
|
-
|
Purchases of Textron common stock
|
|
|
|
(26)
|
|
|
|
(8)
|
|
|
(241)
|
|
|
|
(219)
|
Other financing activities, net
|
|
|
|
4
|
|
|
|
2
|
|
|
8
|
|
|
|
10
|
Net cash from financing activities
|
|
|
|
(154)
|
|
|
|
(160)
|
|
|
(168)
|
|
|
|
(504)
|
Total cash flows from continuing operations
|
|
|
|
584
|
|
|
|
397
|
|
|
323
|
|
|
|
202
|
Total cash flows from discontinued operations
|
|
|
|
-
|
|
|
|
-
|
|
|
(2)
|
|
|
|
(4)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
(25)
|
|
|
|
(6)
|
|
|
(28)
|
|
|
|
(15)
|
Net change in cash and equivalents
|
|
|
|
559
|
|
|
|
391
|
|
|
293
|
|
|
|
183
|
Cash and equivalents at beginning of period
|
|
|
|
739
|
|
|
|
614
|
|
|
1,005
|
|
|
|
822
|
Cash and equivalents at end of period
|
|
|
|
$ 1,298
|
|
|
|
$ 1,005
|
|
|
$ 1,298
|
|
|
|
$ 1,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEXTRON INC.
Non-GAAP Financial Measures
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 their
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, and a significant
multi-year income tax settlement. We consider items recorded in Special
charges, net of income taxes, such as enterprise-wide restructuring, to
be of a non-recurring nature that is not indicative of ongoing
operations. In addition, the income tax settlement is not considered to
be indicative of ongoing operations since it represents a significant
one-time favorable settlement of our 1998 to 2008 tax years.
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.
|
Income from Continuing Operations and Diluted Earnings Per Share
(EPS) GAAP to Non-GAAP Reconciliations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended December 31, 2016
|
|
|
Twelve
Months Ended December 31, 2016
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
|
|
|
Diluted EPS
|
Income from continuing operations - GAAP
|
|
|
|
$
|
215
|
|
|
|
$
|
0.78
|
|
|
|
$
|
843
|
|
|
|
|
$
|
3.09
|
|
Special charges, net of taxes of $3 million and $45 million,
respectively
|
|
|
|
|
5
|
|
|
|
|
0.02
|
|
|
|
|
78
|
|
|
|
|
|
0.29
|
|
Income tax settlement
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(206
|
)
|
|
|
|
|
(0.76
|
)
|
Adjusted income from continuing operations - Non-GAAP
|
|
|
|
$
|
220
|
|
|
|
$
|
0.80
|
|
|
|
$
|
715
|
|
|
|
|
$
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2.62
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2017 Outlook
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Diluted EPS
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Income from continuing operations - GAAP
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$ 647 - $ 716
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$ 2.40 - $ 2.65
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Special charges, net of taxes of $16 million to $8 million
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28 - 14
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0.10 - 0.05
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Adjusted income from continuing operations - Non-GAAP
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$ 675 - $ 730
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$ 2.50 - $ 2.70
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View source version on businesswire.com: http://www.businesswire.com/news/home/20170125005218/en/
Source: Textron