PROVIDENCE, R.I.--(BUSINESS WIRE)--
Textron Inc. (NYSE: TXT) today reported third quarter 2017 income from
continuing operations of $0.60 per share or $0.65 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, compared to
$1.10 per share or $0.61 per share (non-GAAP) of adjusted income from
continuing operations in the third quarter of 2016. During this year’s
third quarter, the company recorded $25 million of pre-tax special
charges ($0.05 per share, after-tax).
Revenues in the quarter were $3.5 billion, up 7.2 percent from the third
quarter of 2016. Textron segment profit in the quarter was $295 million,
down $15 million from the third quarter of 2016.
“Growth in the third quarter was the result of strong commercial demand
at Bell, increased deliveries at Textron Systems and higher revenues at
Industrial due to the acquisition of Arctic Cat,” said Textron Chairman
and CEO Scott C. Donnelly.
Cash Flow
Net cash provided by operating activities of continuing operations of
the manufacturing group for the third quarter totaled $100 million,
compared to $178 million in last year’s third 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
$279 million compared to $94 million during last year’s third quarter.
The company contributed $311 million to its pension plans during the
quarter.
The company is increasing its expected full-year manufacturing cash flow
before pension contributions (a non-GAAP measure) by $150 million to a
range of $800 to $900 million. With expected pension contributions of
about $355 million, net cash provided by operating activities of
continuing operations of the manufacturing group is now expected to be
in a range of $895 million to $995 million.
Earnings Outlook
Textron expects full-year 2017 GAAP earnings per share from continuing
operations will be in the range of $2.20 to $2.30, or $2.40 to $2.50 on
an adjusted basis (non-GAAP), which is reconciled to GAAP in an
attachment to this release.
Third Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation were down $44 million, as Textron Aviation
delivered 41 new Citation jets, flat with last year, 24 King Air
turboprops compared to 29 in last year’s third quarter, and 5 Beechcraft
T-6 trainers, down from 8 last year.
Textron Aviation recorded a segment profit of $93 million in the third
quarter compared to $100 million a year ago, due to unfavorable
performance and lower volume and mix, partially offset by a favorable
impact from pricing.
Textron Aviation backlog at the end of the third quarter was $1.2
billion, up $142 million from the end of the second quarter.
Bell
Bell revenues were up $78 million, as Bell delivered 39 commercial
helicopters, up from 25 units last year, 8 H-1’s, flat with last year,
and 5 V-22’s, down from 6 in last year’s third quarter.
Segment profit was up $9 million primarily due to a favorable impact
from performance and other.
Bell backlog at the end of the third quarter was $5.0 billion, down $413
million from the end of the second quarter.
Textron Systems
Revenues at Textron Systems were up $45 million, primarily due to higher
volume in the Marine and Land Systems product line, partially offset by
lower volume in the Weapons and Sensors product line.
Segment profit was down $4 million.
Textron Systems’ backlog at the end of the third quarter was $1.5
billion, down $85 million from the end of the second quarter.
Industrial
Industrial revenues increased $156 million largely due to the impact of
the Arctic Cat acquisition.
Segment profit was down $17 million due to unfavorable volume and mix,
pricing and inflation.
Finance
Finance segment revenues decreased $2 million and segment profit
increased $4 million.
Conference Call Information
Textron will also host a conference call today, October 19, 2017 at 8:00
a.m. (Eastern) to discuss the results and the company’s outlook. The
call will be available via webcast at www.textron.com
or by direct dial at (877) 209-9921 in the U.S. or (612) 332-0107
outside of the U.S. (request the Textron Earnings Call).
In addition, the call will be recorded and available for playback
beginning at 10:30 a.m. (Eastern) on Thursday, October 19, 2017 by
dialing (320) 365-3844; Access Code: 408728.
A package containing key data that will be covered on today’s call can
be found in the Investor Relations section of the company’s website at www.textron.com.
About Textron Inc.
Textron Inc. is a multi-industry company that leverages its global
network of aircraft, defense, industrial and finance businesses to
provide customers with innovative solutions and services. Textron is
known around the world for its powerful brands such as Bell Helicopter,
Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO,
Greenlee, Textron Off Road, Arctic Cat, Textron Systems, and TRU
Simulation + Training. For more information visit: www.textron.com.
Forward-looking Information
Certain statements in this release and other oral and written statements
made by us from time to time are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements, which may describe strategies, goals,
outlook or other non-historical matters, or project revenues, income,
returns or other financial measures, often include words such as
“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,”
“guidance,” “project,” “target,” “potential,” “will,” “should,” “could,”
“likely” or “may” and similar expressions intended to identify
forward-looking statements. These statements are only predictions and
involve known and unknown risks, uncertainties, and other factors that
may cause our actual results to differ materially from those expressed
or implied by such forward-looking statements. Given these
uncertainties, you should not place undue reliance on these
forward-looking statements. Forward-looking statements speak only as of
the date on which they are made, and we undertake no obligation to
update or revise any forward-looking statements. In addition to those
factors described in our Annual Report on Form 10-K and our Quarterly
Reports on Form 10-Q under “Risk Factors”, among the factors that could
cause actual results to differ materially from past and projected future
results are the following: Interruptions in the U.S. Government’s
ability to fund its activities and/or pay its obligations; changing
priorities or reductions in the U.S. Government defense budget,
including those related to military operations in foreign countries; our
ability to perform as anticipated and to control costs under contracts
with the U.S. Government; the U.S. Government’s ability to unilaterally
modify or terminate its contracts with us for the U.S. Government’s
convenience or for our failure to perform, to change applicable
procurement and accounting policies, or, under certain circumstances, to
withhold payment or suspend or debar us as a contractor eligible to
receive future contract awards; changes in foreign military funding
priorities or budget constraints and determinations, or changes in
government regulations or policies on the export and import of military
and commercial products; volatility in the global economy or changes in
worldwide political conditions that adversely impact demand for our
products; volatility in interest rates or foreign exchange rates; risks
related to our international business, including establishing and
maintaining facilities in locations around the world and relying on
joint venture partners, subcontractors, suppliers, representatives,
consultants and other business partners in connection with international
business, including in emerging market countries; our Finance segment’s
ability to maintain portfolio credit quality or to realize full value of
receivables; performance issues with key suppliers or subcontractors;
legislative or regulatory actions, both domestic and foreign, impacting
our operations or demand for our products; our ability to control costs
and successfully implement various cost-reduction activities; the
efficacy of research and development investments to develop new products
or unanticipated expenses in connection with the launching of
significant new products or programs; the timing of our new product
launches or certifications of our new aircraft products; our ability to
keep pace with our competitors in the introduction of new products and
upgrades with features and technologies desired by our customers;
pension plan assumptions and future contributions; demand softness or
volatility in the markets in which we do business; cybersecurity
threats, including the potential misappropriation of assets or sensitive
information, corruption of data or, operational disruption; difficulty
or unanticipated expenses in connection with integrating acquired
businesses; and the risk that acquisitions do not perform as planned,
including, for example, the risk that acquired businesses will not
achieve revenue and profit projections.
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TEXTRON INC.
Revenues by Segment and Reconciliation of Segment Profit to Net
Income
(Dollars in millions, except per share amounts)
(Unaudited)
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Three Months Ended
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Nine Months Ended
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|
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September 30, 2017
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October 1, 2016
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September 30, 2017
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October 1, 2016
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REVENUES
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MANUFACTURING:
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|
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|
|
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Textron Aviation
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|
|
|
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$
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1,154
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|
|
|
$
|
1,198
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|
|
$
|
3,295
|
|
|
|
$
|
3,485
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|
Bell
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|
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|
|
812
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|
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734
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2,334
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|
|
|
2,352
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|
Textron Systems
|
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|
|
458
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|
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413
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1,351
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|
|
|
1,224
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Industrial
|
|
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1,042
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886
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3,147
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|
|
|
|
2,842
|
|
|
|
|
|
|
|
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|
3,466
|
|
|
|
|
3,231
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|
|
|
|
10,127
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|
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|
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9,903
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FINANCE
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|
|
18
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|
|
20
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|
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|
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54
|
|
|
|
|
60
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Total revenues
|
|
|
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$ 3,484
|
|
|
|
$
|
3,251
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|
|
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$
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10,181
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|
|
$
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9,963
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SEGMENT PROFIT
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MANUFACTURING:
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|
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|
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|
|
|
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|
Textron Aviation
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|
$
|
93
|
|
|
|
$
|
100
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|
|
|
$
|
183
|
|
|
|
$
|
254
|
|
|
Bell
|
|
|
|
|
106
|
|
|
|
|
97
|
|
|
|
|
301
|
|
|
|
|
260
|
|
|
Textron Systems
|
|
|
|
|
40
|
|
|
|
|
44
|
|
|
|
|
102
|
|
|
|
|
133
|
|
|
Industrial
|
|
|
|
|
49
|
|
|
|
|
66
|
|
|
|
|
207
|
|
|
|
|
256
|
|
|
|
|
|
|
|
|
|
288
|
|
|
|
307
|
|
|
|
793
|
|
|
|
903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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FINANCE
|
|
|
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|
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7
|
|
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|
|
3
|
|
|
|
|
16
|
|
|
|
|
15
|
|
|
Segment Profit
|
|
|
|
|
295
|
|
|
|
310
|
|
|
|
809
|
|
|
|
918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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Corporate expenses and other, net
|
|
|
(30
|
)
|
|
|
(53
|
)
|
|
|
(88
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)
|
|
|
(116
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)
|
Interest expense, net for Manufacturing group
|
|
|
(37
|
)
|
|
|
(35
|
)
|
|
|
(107
|
)
|
|
|
(105
|
)
|
Special charges (a)
|
|
|
|
|
(25
|
)
|
|
|
|
(115
|
)
|
|
|
|
(75
|
)
|
|
|
|
(115
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
203
|
|
|
|
107
|
|
|
|
539
|
|
|
|
582
|
|
Income tax benefit (expense) (b)
|
|
|
|
(44
|
)
|
|
|
|
192
|
|
|
|
|
(127
|
)
|
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
159
|
|
|
|
|
299
|
|
|
|
|
412
|
|
|
|
|
628
|
|
|
Discontinued operations, net of income taxes (b)
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|
|
|
-
|
|
|
|
|
122
|
|
|
|
|
1
|
|
|
|
|
120
|
|
|
Net income
|
|
|
|
|
|
$
|
159
|
|
|
|
$
|
421
|
|
|
|
$
|
413
|
|
|
|
$
|
748
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
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|
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|
|
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|
|
|
|
|
|
Earnings per share:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
$
|
0.60
|
|
|
|
$
|
1.10
|
|
|
|
$
|
1.53
|
|
|
|
$
|
2.31
|
|
|
Discontinued operations, net of income taxes
|
|
|
|
-
|
|
|
|
|
0.45
|
|
|
|
|
-
|
|
|
|
|
0.44
|
|
|
Net income
|
|
|
|
|
|
$
|
0.60
|
|
|
|
$
|
1.55
|
|
|
|
$
|
1.53
|
|
|
|
$
|
2.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted average shares outstanding
|
|
|
|
266,989,000
|
|
|
|
|
272,099,000
|
|
|
|
|
269,734,000
|
|
|
|
|
272,051,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations and Diluted Earnings Per Share
(EPS) GAAP to Non-GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
|
|
October 1, 2016
|
|
|
|
September 30, 2017
|
|
|
|
October 1, 2016
|
|
|
Income from continuing operations - GAAP
|
|
|
$
|
159
|
|
|
|
$
|
299
|
|
|
|
$
|
412
|
|
|
|
$
|
628
|
|
|
Restructuring, net of taxes of $6 million, $42 million,
$15 million and $42 million, respectively
|
|
|
|
9
|
|
|
|
|
73
|
|
|
|
|
27
|
|
|
|
|
73
|
|
|
Arctic Cat restructuring, integration and transaction costs,
net of taxes of $4 million and $11 million, respectively
|
|
|
|
6
|
|
|
|
|
-
|
|
|
|
|
22
|
|
|
|
|
-
|
|
|
Income tax settlement
|
|
|
|
|
-
|
|
|
|
|
(206
|
)
|
|
|
|
-
|
|
|
|
|
(206
|
)
|
|
Total Special charges, net of income taxes
|
|
|
|
15
|
|
|
|
|
(133
|
)
|
|
|
|
49
|
|
|
|
|
(133
|
)
|
|
Adjusted income from continuing operations - Non-GAAP (c)
|
|
|
$
|
174
|
|
|
|
$
|
166
|
|
|
|
$
|
461
|
|
|
|
$
|
495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations - GAAP
|
|
|
$
|
0.60
|
|
|
|
$
|
1.10
|
|
|
|
$
|
1.53
|
|
|
|
$
|
2.31
|
|
|
Restructuring, net of taxes
|
|
|
|
|
0.03
|
|
|
|
|
0.27
|
|
|
|
|
0.10
|
|
|
|
|
0.27
|
|
|
Arctic Cat restructuring, integration and transaction costs, net of
taxes
|
|
|
|
0.02
|
|
|
|
|
-
|
|
|
|
|
0.08
|
|
|
|
|
-
|
|
|
Income tax settlement
|
|
|
|
|
-
|
|
|
|
|
(0.76
|
)
|
|
|
|
-
|
|
|
|
|
(0.76
|
)
|
|
Total Special charges, net of income taxes
|
|
|
|
0.05
|
|
|
|
|
(0.49
|
)
|
|
|
|
0.18
|
|
|
|
|
(0.49
|
)
|
|
Adjusted income from continuing operations - Non-GAAP (c)
|
|
|
$
|
0.65
|
|
|
|
$
|
0.61
|
|
|
|
$
|
1.71
|
|
|
|
$
|
1.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(a) During 2016, we initiated a plan to restructure and realign our
businesses by implementing headcount reductions, facility consolidations
and other actions in order to improve overall operating efficiency
across Textron. In connection with this plan, we recorded Special
charges of $15 million and $42 million in the three and nine months
ended September 30, 2017, respectively, and $115 million in both the
three and nine months ended October 1, 2016. In addition, we recorded
Special charges of $10 million and $33 million in the three and nine
months ended September 30, 2017, respectively, related to the Arctic Cat
acquisition, which included restructuring and integration and
transaction costs.
(b) The three and nine months ended October 1, 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.
(c) 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
|
December 31, 2016
|
Assets
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
$
|
1,104
|
|
|
$
|
1,137
|
Accounts receivable, net
|
|
|
|
1,344
|
|
|
|
1,064
|
Inventories
|
|
|
|
4,518
|
|
|
|
4,464
|
Other current assets
|
|
|
|
408
|
|
|
|
388
|
Net property, plant and equipment
|
|
|
|
2,701
|
|
|
|
2,581
|
Goodwill
|
|
|
|
2,354
|
|
|
|
2,113
|
Other assets
|
|
|
|
2,269
|
|
|
|
2,331
|
Finance group assets
|
|
|
|
1,177
|
|
|
|
1,280
|
Total Assets
|
|
|
$
|
15,875
|
|
|
$
|
15,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
Short-term debt and current portion of long-term debt
|
|
|
$
|
364
|
|
|
$
|
363
|
Current liabilities
|
|
|
|
3,677
|
|
|
|
3,530
|
Other liabilities
|
|
|
|
1,931
|
|
|
|
2,354
|
Long-term debt
|
|
|
|
3,078
|
|
|
|
2,414
|
Finance group liabilities
|
|
|
|
1,007
|
|
|
|
1,123
|
Total Liabilities
|
|
|
|
10,057
|
|
|
|
9,784
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders' Equity
|
|
|
|
5,818
|
|
|
|
5,574
|
Total Liabilities and Shareholders' Equity
|
|
|
$
|
15,875
|
|
|
$
|
15,358
|
|
|
|
|
|
|
|
|
|
TEXTRON INC.
|
MANUFACTURING GROUP
|
Condensed Schedule of Cash Flows
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
October 1,
|
|
|
|
September 30,
|
|
October 1,
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
$
|
155
|
|
|
$
|
291
|
|
|
|
|
$
|
399
|
|
|
$
|
613
|
|
|
Depreciation and amortization
|
|
|
|
122
|
|
|
|
105
|
|
|
|
|
|
333
|
|
|
|
322
|
|
|
Changes in working capital
|
|
|
|
(19
|
)
|
|
|
(266
|
)
|
|
|
|
|
(244
|
)
|
|
|
(867
|
)
|
|
Changes in other assets and liabilities and non-cash items
|
|
|
|
(158
|
)
|
|
|
48
|
|
|
|
|
|
(118
|
)
|
|
|
40
|
|
|
Dividends Received from TFC
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
29
|
|
|
Net cash from operating activities of continuing operations
|
|
|
|
100
|
|
|
|
178
|
|
|
|
|
|
370
|
|
|
|
137
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in acquisitions
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
|
(330
|
)
|
|
|
(179
|
)
|
|
Capital expenditures
|
|
|
|
(138
|
)
|
|
|
(99
|
)
|
|
|
|
|
(299
|
)
|
|
|
(306
|
)
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
6
|
|
|
|
3
|
|
|
|
|
|
6
|
|
|
|
8
|
|
|
Other investing activities, net
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
|
|
1
|
|
|
|
(3
|
)
|
|
Net cash from investing activities
|
|
|
|
(133
|
)
|
|
|
(97
|
)
|
|
|
|
|
(622
|
)
|
|
|
(480
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
298
|
|
|
|
-
|
|
|
|
|
|
645
|
|
|
|
345
|
|
|
Principal payments on long-term debt
|
|
|
|
-
|
|
|
|
(251
|
)
|
|
|
|
|
(3
|
)
|
|
|
(253
|
)
|
|
Increase in short-term debt
|
|
|
|
2
|
|
|
|
98
|
|
|
|
|
|
2
|
|
|
|
110
|
|
|
Purchases of Textron common stock
|
|
|
|
(122
|
)
|
|
|
-
|
|
|
|
|
|
(451
|
)
|
|
|
(215
|
)
|
|
Other financing activities, net
|
|
|
|
8
|
|
|
|
3
|
|
|
|
|
|
21
|
|
|
|
4
|
|
|
Net cash from financing activities
|
|
|
|
186
|
|
|
|
(150
|
)
|
|
|
|
|
214
|
|
|
|
(9
|
)
|
|
Total cash flows from continuing operations
|
|
|
|
153
|
|
|
|
(69
|
)
|
|
|
|
|
(38
|
)
|
|
|
(352
|
)
|
|
Total cash flows from discontinued operations
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
|
(24
|
)
|
|
|
(2
|
)
|
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
14
|
|
|
|
(2
|
)
|
|
|
|
|
29
|
|
|
|
(3
|
)
|
|
Net change in cash and equivalents
|
|
|
|
166
|
|
|
|
(72
|
)
|
|
|
|
|
(33
|
)
|
|
|
(357
|
)
|
|
Cash and equivalents at beginning of period
|
|
|
|
938
|
|
|
|
661
|
|
|
|
|
|
1,137
|
|
|
|
946
|
|
|
Cash and equivalents at end of period
|
|
|
$
|
1,104
|
|
|
$
|
589
|
|
|
|
|
$
|
1,104
|
|
|
$
|
589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
$
|
100
|
|
|
$
|
178
|
|
|
|
|
$
|
370
|
|
|
$
|
137
|
|
|
Less: Capital expenditures
|
|
|
|
(138
|
)
|
|
|
(99
|
)
|
|
|
|
|
(299
|
)
|
|
|
(306
|
)
|
|
Dividends received from TFC
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
(29
|
)
|
|
Plus: Total pension contributions
|
|
|
|
311
|
|
|
|
12
|
|
|
|
|
|
338
|
|
|
|
36
|
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
6
|
|
|
|
3
|
|
|
|
|
|
6
|
|
|
|
8
|
|
|
Manufacturing cash flow before pension contributions- Non-GAAP (a)
|
|
|
$
|
279
|
|
|
$
|
94
|
|
|
|
|
$
|
415
|
|
|
$
|
(154
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)Manufacturing cash flow before pension contributions is a
non-GAAP financial measure as defined in "Non-GAAP Financial
Measures" attached to this release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEXTRON INC.
|
Condensed Consolidated Schedule of Cash Flows
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
October 1,
|
|
|
|
September 30,
|
|
October 1,
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
$
|
159
|
|
|
$
|
299
|
|
|
|
|
$
|
412
|
|
|
$
|
628
|
|
|
Depreciation and amortization
|
|
|
|
125
|
|
|
|
108
|
|
|
|
|
|
343
|
|
|
|
331
|
|
|
Changes in working capital
|
|
|
|
(2
|
)
|
|
|
(280
|
)
|
|
|
|
|
(221
|
)
|
|
|
(848
|
)
|
|
Changes in other assets and liabilities and non-cash items
|
|
|
|
(163
|
)
|
|
|
48
|
|
|
|
|
|
(126
|
)
|
|
|
34
|
|
|
Net cash from operating activities of continuing operations
|
|
|
|
119
|
|
|
|
175
|
|
|
|
|
|
408
|
|
|
|
145
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in acquisitions
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
|
(330
|
)
|
|
|
(179
|
)
|
|
Capital expenditures
|
|
|
|
(138
|
)
|
|
|
(99
|
)
|
|
|
|
|
(299
|
)
|
|
|
(306
|
)
|
|
Finance receivables repaid
|
|
|
|
3
|
|
|
|
4
|
|
|
|
|
|
27
|
|
|
|
40
|
|
|
Other investing activities, net
|
|
|
|
14
|
|
|
|
1
|
|
|
|
|
|
48
|
|
|
|
53
|
|
|
Net cash from investing activities
|
|
|
|
(122
|
)
|
|
|
(94
|
)
|
|
|
|
|
(554
|
)
|
|
|
(392
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
307
|
|
|
|
158
|
|
|
|
|
|
682
|
|
|
|
520
|
|
|
Increase in short-term debt
|
|
|
|
2
|
|
|
|
98
|
|
|
|
|
|
2
|
|
|
|
110
|
|
|
Principal payments on long-term debt and nonrecourse debt
|
|
|
|
(39
|
)
|
|
|
(341
|
)
|
|
|
|
|
(116
|
)
|
|
|
(433
|
)
|
|
Purchases of Textron common stock
|
|
|
|
(122
|
)
|
|
|
-
|
|
|
|
|
|
(451
|
)
|
|
|
(215
|
)
|
|
Other financing activities, net
|
|
|
|
7
|
|
|
|
3
|
|
|
|
|
|
20
|
|
|
|
4
|
|
|
Net cash from financing activities
|
|
|
|
155
|
|
|
|
(82
|
)
|
|
|
|
|
137
|
|
|
|
(14
|
)
|
|
Total cash flows from continuing operations
|
|
|
|
152
|
|
|
|
(1
|
)
|
|
|
|
|
(9
|
)
|
|
|
(261
|
)
|
|
Total cash flows from discontinued operations
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
|
(24
|
)
|
|
|
(2
|
)
|
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
14
|
|
|
|
(2
|
)
|
|
|
|
|
29
|
|
|
|
(3
|
)
|
|
Net change in cash and equivalents
|
|
|
|
165
|
|
|
|
(4
|
)
|
|
|
|
|
(4
|
)
|
|
|
(266
|
)
|
|
Cash and equivalents at beginning of period
|
|
|
|
1,129
|
|
|
|
743
|
|
|
|
|
|
1,298
|
|
|
|
1,005
|
|
|
Cash and equivalents at end of period
|
|
|
$
|
1,294
|
|
|
$
|
739
|
|
|
|
|
$
|
1,294
|
|
|
$
|
739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, net of income taxes, such as enterprise-wide
restructuring and acquisition-related restructuring, integration and
transaction costs, to be of a non-recurring nature that is not
indicative of ongoing operations.
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 Reconciliation and Outlook:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30, 2017
|
|
October 1, 2016
|
|
|
September 30, 2017
|
|
October 1, 2016
|
|
|
Income from continuing operations - GAAP
|
|
|
|
$
|
159
|
|
|
$
|
299
|
|
|
|
|
|
|
$
|
412
|
|
|
$
|
628
|
|
|
Restructuring, net of taxes of $6 million, $42 million,
$15 million and $42 million, respectively
|
|
|
|
|
9
|
|
|
|
73
|
|
|
|
|
|
|
|
27
|
|
|
|
73
|
|
|
Arctic Cat restructuring, integration and transaction costs,
net of taxes of $4 million and $11 million, respectively
|
|
|
|
|
6
|
|
|
|
-
|
|
|
|
|
|
|
|
22
|
|
|
|
-
|
|
|
Income tax settlement
|
|
|
|
|
-
|
|
|
|
(206
|
)
|
|
|
|
|
|
|
-
|
|
|
|
(206
|
)
|
|
Total Special charges, net of income taxes
|
|
|
|
|
15
|
|
|
|
(133
|
)
|
|
|
|
|
|
|
49
|
|
|
|
(133
|
)
|
|
Adjusted income from continuing operations - Non-GAAP
|
|
|
|
$
|
174
|
|
|
$
|
166
|
|
|
|
|
|
|
$
|
461
|
|
|
$
|
495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations - GAAP
|
|
|
|
$
|
0.60
|
|
|
$
|
1.10
|
|
|
|
|
|
|
$
|
1.53
|
|
|
$
|
2.31
|
|
|
Restructuring, net of taxes
|
|
|
|
|
0.03
|
|
|
|
0.27
|
|
|
|
|
|
|
|
0.10
|
|
|
|
0.27
|
|
|
Arctic Cat restructuring, integration and transaction costs, net of
taxes
|
|
|
|
|
0.02
|
|
|
|
-
|
|
|
|
|
|
|
|
0.08
|
|
|
|
-
|
|
|
Income tax settlement
|
|
|
|
|
-
|
|
|
|
(0.76
|
)
|
|
|
|
|
|
|
-
|
|
|
|
(0.76
|
)
|
|
Total Special charges, net of income taxes
|
|
|
|
|
0.05
|
|
|
|
(0.49
|
)
|
|
|
|
|
|
|
0.18
|
|
|
|
(0.49
|
)
|
|
Adjusted income from continuing operations - Non-GAAP
|
|
|
|
$
|
0.65
|
|
|
$
|
0.61
|
|
|
|
|
|
|
$
|
1.71
|
|
|
$
|
1.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Outlook
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
Income from continuing operations - GAAP
|
|
|
$ 590 - $ 620
|
|
|
$ 2.20 - $ 2.30
|
|
Restructuring, net of taxes of $17 million
|
|
|
31
|
|
|
0.11
|
|
Arctic Cat restructuring, integration and transaction costs,
net of taxes of $12 million
|
|
|
24
|
|
|
0.09
|
|
Total Special charges, net of income taxes
|
|
|
55
|
|
|
0.20
|
|
Adjusted income from continuing operations - Non-GAAP
|
|
|
$ 645 - $ 675
|
|
|
$ 2.40 - $ 2.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing Cash Flow Before Pension Contributions GAAP to
Non-GAAP Outlook:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Outlook
|
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
|
|
|
$ 895 - $ 995
|
|
Less: Capital expenditures
|
|
|
|
|
|
(450)
|
|
Plus: Total pension contributions
|
|
|
|
|
|
355
|
|
Manufacturing cash flow before pension contributions- Non-GAAP
|
|
|
|
|
|
$ 800 - $ 900
|
|
|
|
|
|
|
|
|
|
|

View source version on businesswire.com: http://www.businesswire.com/news/home/20171019005389/en/
Source: Textron