Textron Reports First Quarter 2019 Results


TEXTRON INC. Revenues by Segment and Reconciliation of Segment Profit to Net Income (Dollars in millions, except per share amounts) (Unaudited)

			Three Months Ended
			March 30, 2019			March 31, 2018
REVENUES
MANUFACTURING:
		Textron Aviation	$	1,134		$	1,010
		Bell		739			752
		Textron Systems		307			387
		Industrial		912			1,131
				3,092			3,280

FINANCE				17			16
		Total revenues	$	3,109		$	3,296

SEGMENT PROFIT
MANUFACTURING:
		Textron Aviation	$	106		$	72
		Bell		104			87
		Textron Systems		28			50
		Industrial		50			64
				288			273

FINANCE				6			6
		Segment Profit		294			279

Corporate expenses and other, net				(47	)		(27	)
Interest expense, net for Manufacturing group				(35	)		(34	)

Income before income taxes				212			218
Income tax expense				(33	)		(29	)

Net income				179			189

Earnings per share:
	Net income		$	0.76		$	0.72

		Diluted average shares outstanding		236,437,000			263,672,000


Textron Inc. Condensed Consolidated Balance Sheets (In millions) (Unaudited)

		March 30, 2019		December 29, 2018
Assets
Cash and equivalents		$	646	$	987
Accounts receivable, net			1,059		1,024
Inventories			4,047		3,818
Other current assets			835		785
Net property, plant and equipment			2,523		2,615
Goodwill			2,141		2,218
Other assets			2,267		1,800
Finance group assets			962		1,017
	Total Assets	$	14,480	$	14,264


Liabilities and Shareholders' Equity
Short-term debt and current portion of long-term debt		$	363	$	258
Current liabilities			3,069		3,248
Other liabilities			2,186		1,932
Long-term debt			2,812		2,808
Finance group liabilities			817		826
	Total Liabilities		9,247		9,072

Total Shareholders' Equity			5,233		5,192
	Total Liabilities and Shareholders' Equity	$	14,480	$	14,264


TEXTRON INC. MANUFACTURING GROUP Condensed Schedule of Cash Flows (In millions) (Unaudited)

		Three Months Ended
		March 30, 2019			March 31, 2018
Cash flows from operating activities:
Net income		$	175		$	179
Depreciation and amortization			100			103
Changes in working capital			(554	)		(376	)
Changes in other assets and liabilities and non-cash items			33			(9	)
Dividends received from TFC			50			50
Net cash from operating activities			(196	)		(53	)
Cash flows from investing activities:
Capital expenditures			(59	)		(77	)
Net proceeds from corporate-owned life insurance policies			2			58
Proceeds from the sale of property, plant and equipment			1			9
Net cash from investing activities			(56	)		(10	)
Cash flows from financing activities:
Increase in short-term debt			100			2
Purchases of Textron common stock			(202	)		(344	)
Other financing activities, net			4			3
Net cash from financing activities			(98	)		(339	)
Total cash flows			(350	)		(402	)
Effect of exchange rate changes on cash and equivalents			9			11
Net change in cash and equivalents			(341	)		(391	)
Cash and equivalents at beginning of period			987			1,079
Cash and equivalents at end of period		$	646		$	688

Manufacturing Cash Flow Before Pension Contributions GAAP to Non-GAAP Reconciliation:

		Three Months Ended
		March 30, 2019			March 31, 2018
Net cash from operating activities - GAAP		$	(196	)	$	(53	)
Less:	Capital expenditures		(59	)		(77	)
	Dividends received from TFC		(50	)		(50	)
Plus:	Total pension contributions		13			13
	Proceeds from the sale of property, plant and equipment		1			9
Manufacturing cash flow before pension contributions - Non-GAAP (a)		$	(291	)	$	(158	)

(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
	March 30, 2019			March 31, 2018
Cash flows from operating activities:
Net income	$	179		$	189
Depreciation and amortization		102			105
Changes in working capital		(529	)		(369	)
Changes in other assets and liabilities and non-cash items		32			(10	)
Net cash from operating activities		(216	)		(85	)
Cash flows from investing activities:
Capital expenditures		(59	)		(77	)
Net proceeds from corporate-owned life insurance policies		2			58
Finance receivables repaid		12			16
Other investing activities, net		3			9
Net cash from investing activities		(42	)		6
Cash flows from financing activities:
Increase in short-term debt		100			2
Principal payments on long-term debt and nonrecourse debt		(19	)		(19	)
Purchases of Textron common stock		(202	)		(344	)
Other financing activities, net		5			3
Net cash from financing activities		(116	)		(358	)
Total cash flows		(374	)		(437	)
Effect of exchange rate changes on cash and equivalents		9			11
Net change in cash and equivalents		(365	)		(426	)
Cash and equivalents at beginning of period		1,107			1,262
Cash and equivalents at end of period	$	742		$	836

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 definition for the non-GAAP financial measure included in this release:

Manufacturing cash flow before pension contributions

Manufacturing cash flow before pension contributions adjusts net cash from operating activities (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.

• Excludes taxes paid related to the gain realized in 2018 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.


Manufacturing Cash Flow Before Pension Contributions GAAP to Non-GAAP Reconciliation and 2019 Outlook:

		Three Months Ended
		March 30, 2019				March 31, 2018
Net cash from operating activities - GAAP		$	(196	)		$	(53	)
Less:	Capital expenditures		(59	)			(77	)
	Dividends received from TFC		(50	)			(50	)
Plus:	Total pension contributions		13				13
	Proceeds from the sale of property, plant and equipment		1				9
Manufacturing cash flow before pension contributions - Non-GAAP		$	(291	)		$	(158	)

		2019 Outlook
Net cash from operating activities of continuing operations - GAAP		$	1,070		-	$	1,170
Less:	Capital expenditures				(380)
	Dividends received from TFC				(50)
Plus:	Total pension contributions				50
	Taxes paid on gain on business disposition				10
Manufacturing cash flow before pension contributions - Non-GAAP		$	700		-	$	800

« Previous Page 1 | 2 | 3 Next Page »