TEXTRON INC. Revenues by Segment and Reconciliation of Segment Profit to Net Income (Loss) (Dollars in millions, except per share amounts) (Unaudited) |
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|
Three Months Ended |
|
Six Months Ended |
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|
July 3,
|
July 4,
|
|
July 3,
|
July 4,
|
||||||||||||||||
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
MANUFACTURING: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Textron Aviation |
|
$ |
1,161 |
|
|
|
$ |
747 |
|
|
|
|
$ |
2,026 |
|
|
|
$ |
1,619 |
|
|
Bell |
|
891 |
|
|
|
822 |
|
|
|
|
1,737 |
|
|
|
1,645 |
|
|
||||
Textron Systems |
|
333 |
|
|
|
326 |
|
|
|
|
661 |
|
|
|
654 |
|
|
||||
Industrial |
|
794 |
|
|
|
562 |
|
|
|
|
1,619 |
|
|
|
1,302 |
|
|
||||
|
|
3,179 |
|
|
|
2,457 |
|
|
|
|
6,043 |
|
|
|
5,220 |
|
|
||||
FINANCE |
|
12 |
|
|
|
15 |
|
|
|
|
27 |
|
|
|
29 |
|
|
||||
Total Revenues |
|
$ |
3,191 |
|
|
|
$ |
2,472 |
|
|
|
|
$ |
6,070 |
|
|
|
$ |
5,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
SEGMENT PROFIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
MANUFACTURING: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Textron Aviation |
|
$ |
96 |
|
|
|
$ |
(66 |
) |
|
|
|
$ |
143 |
|
|
|
$ |
(63 |
) |
|
Bell |
|
110 |
|
|
|
118 |
|
|
|
|
215 |
|
|
|
233 |
|
|
||||
Textron Systems |
|
48 |
|
|
|
37 |
|
|
|
|
99 |
|
|
|
63 |
|
|
||||
Industrial |
|
32 |
|
|
|
(11 |
) |
|
|
|
79 |
|
|
|
(2 |
) |
|
||||
|
|
286 |
|
|
|
78 |
|
|
|
|
536 |
|
|
|
231 |
|
|
||||
FINANCE |
|
3 |
|
|
|
4 |
|
|
|
|
9 |
|
|
|
7 |
|
|
||||
Segment Profit |
|
289 |
|
|
|
82 |
|
|
|
|
545 |
|
|
|
238 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate expenses and other, net |
|
(37 |
) |
|
|
(30 |
) |
|
|
|
(77 |
) |
|
|
(44 |
) |
|
||||
Interest expense, net for Manufacturing group |
|
(32 |
) |
|
|
(37 |
) |
|
|
|
(67 |
) |
|
|
(71 |
) |
|
||||
Special charges (a) |
|
(4 |
) |
|
|
(78 |
) |
|
|
|
(10 |
) |
|
|
(117 |
) |
|
||||
Gain on business disposition (b) |
|
2 |
|
|
|
— |
|
|
|
|
17 |
|
|
|
— |
|
|
||||
Inventory charge (c) |
|
— |
|
|
|
(55 |
) |
|
|
|
— |
|
|
|
(55 |
) |
|
||||
Income (loss) from continuing operations before income taxes |
|
218 |
|
|
|
(118 |
) |
|
|
|
408 |
|
|
|
(49 |
) |
|
||||
Income tax (expense) benefit |
|
(34 |
) |
|
|
26 |
|
|
|
|
(53 |
) |
|
|
7 |
|
|
||||
Income (loss) from continuing operations |
|
$ |
184 |
|
|
|
$ |
(92 |
) |
|
|
|
$ |
355 |
|
|
|
$ |
(42 |
) |
|
Discontinued operations, net of income taxes |
|
(1 |
) |
|
|
— |
|
|
|
|
(1 |
) |
|
|
— |
|
|
||||
Net Income (Loss) |
|
$ |
183 |
|
|
|
$ |
(92 |
) |
|
|
|
$ |
354 |
|
|
|
$ |
(42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (Loss) Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations |
|
$ |
0.81 |
|
|
|
$ |
(0.40 |
) |
|
|
|
$ |
1.56 |
|
|
|
$ |
(0.18 |
) |
|
Discontinued operations, net of income taxes |
|
(0.01 |
) |
|
|
— |
|
|
|
|
(0.01 |
) |
|
|
— |
|
|
||||
Earnings (Loss) Per Share |
|
$ |
0.80 |
|
|
|
$ |
(0.40 |
) |
|
|
|
$ |
1.55 |
|
|
|
$ |
(0.18 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted average shares outstanding (d) |
|
228,446,000 |
|
|
|
228,247,000 |
|
|
|
|
228,296,000 |
|
|
|
228,279,000 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||||||
Income (Loss) from continuing operations and Diluted Earnings (Loss) Per Share (EPS) GAAP to Non-GAAP Reconciliation: |
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|
|
|
|
|
|
|
|
|
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|
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|
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|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
|
July 3,
|
July 4,
|
|
|
July 3,
|
|
|
July 4,
|
|
||||||||||||
Income (Loss) from continuing operations - GAAP |
|
$ |
184 |
|
|
|
$ |
(92 |
) |
|
|
|
$ |
355 |
|
|
|
$ |
(42 |
) |
|
Add: Special charges, net of tax (a) |
|
3 |
|
|
|
67 |
|
|
|
|
7 |
|
|
|
97 |
|
|
||||
Inventory charge, net of tax (c) |
|
— |
|
|
|
55 |
|
|
|
|
— |
|
|
|
55 |
|
|
||||
Less: Gain on business disposition, net of tax (b) |
|
(2 |
) |
|
|
— |
|
|
|
|
(17 |
) |
|
|
— |
|
|
||||
Adjusted Income from Continuing Operations - Non-GAAP (e) |
|
$ |
185 |
|
|
|
$ |
30 |
|
|
|
|
$ |
345 |
|
|
|
$ |
110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (Loss) from continuing operations - GAAP |
|
$ |
0.81 |
|
|
|
$ |
(0.40 |
) |
|
|
|
$ |
1.56 |
|
|
|
$ |
(0.18 |
) |
|
Add: Special charges, net of tax (a) |
|
0.01 |
|
|
|
0.29 |
|
|
|
|
0.03 |
|
|
|
0.42 |
|
|
||||
Inventory charge, net of tax (c) |
|
— |
|
|
|
0.24 |
|
|
|
|
— |
|
|
|
0.24 |
|
|
||||
Less: Gain on business disposition, net of tax (b) |
|
(0.01 |
) |
|
|
— |
|
|
|
|
(0.08 |
) |
|
|
— |
|
|
||||
Adjusted Income from Continuing Operations - Non-GAAP (e) |
|
$ |
0.81 |
|
|
|
$ |
0.13 |
|
|
|
|
$ |
1.51 |
|
|
|
$ |
0.48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(a) |
In the second quarter of 2020, we initiated a restructuring plan to reduce operating expenses through headcount reductions, facility consolidations and other actions in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic. The restructuring plan primarily impacted the TRU Simulation + Training business within the Textron Systems segment and the Industrial and Textron Aviation segments. In connection with this plan, we incurred special charges of $4 million and $10 million for the three and six months ended July 3, 2021, respectively, and $78 million for both the three and six months ended July 4, 2020. Special charges for the six months ended July 4, 2020 also included the impairment of indefinite-lived trade name intangible assets totaling $39 million, primarily in the Textron Aviation segment. |
|
(b) |
On January 25, 2021, we completed the sale of TRU Simulation + Training Canada Inc. which resulted in an after-tax gain of $17 million. |
|
(c) |
In connection with the restructuring plan described above, we ceased manufacturing at TRU's facility in Montreal, Canada, resulting in the production suspension of our commercial air transport simulators. As a result of this action and market conditions, we recorded a $55 million charge in the second quarter of 2020 to write-down the related inventory to its net realizable value. |
|
(d) |
For the three and six months ended July 3, 2021, fully dilutive shares were used to calculate EPS. For the three and six months ended July 4, 2020, the diluted average shares used to calculated EPS on a GAAP basis excluded potential common shares (stock options and restricted stock units), due to their antidilutive effect resulting from the net loss. |
|
(e) |
Adjusted net income 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) |
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|
|
|
||||||
|
July 3,
|
January 2,
|
||||||
Assets |
|
|
||||||
Cash and equivalents |
$ |
1,995 |
|
$ |
2,146 |
|
||
Accounts receivable, net |
822 |
|
787 |
|
||||
Inventories |
3,664 |
|
3,513 |
|
||||
Other current assets |
874 |
|
950 |
|
||||
Net property, plant and equipment |
2,488 |
|
2,516 |
|
||||
Goodwill |
2,155 |
|
2,157 |
|
||||
Other assets |
2,456 |
|
2,436 |
|
||||
Finance group assets |
925 |
|
938 |
|
||||
Total Assets |
$ |
15,379 |
|
$ |
15,443 |
|
||
|
|
|
||||||
|
|
|
||||||
Liabilities and Shareholders' Equity |
|
|
||||||
Current portion of long-term debt |
$ |
7 |
|
$ |
509 |
|
||
Accounts payable |
965 |
|
776 |
|
||||
Other current liabilities |
2,035 |
|
1,985 |
|
||||
Other liabilities |
2,327 |
|
2,357 |
|
||||
Long-term debt |
3,182 |
|
3,198 |
|
||||
Finance group liabilities |
762 |
|
773 |
|
||||
Total Liabilities |
9,278 |
|
9,598 |
|
||||
|
|
|
||||||
Total Shareholders' Equity |
6,101 |
|
5,845 |
|
||||
Total Liabilities and Shareholders' Equity |
$ |
15,379 |
|
$ |
15,443 |
|
||
TEXTRON INC. MANUFACTURING GROUP Condensed Schedule of Cash Flows (In millions) (Unaudited) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
||||||||||||||
|
|
July 3,
|
|
|
July 4,
|
|
|
|
July 3,
|
|
|
July 4,
|
|
||||||||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations |
|
$ |
181 |
|
|
|
$ |
(95 |
) |
|
|
|
$ |
358 |
|
|
|
$ |
(47 |
) |
|
Depreciation and amortization |
|
95 |
|
|
|
97 |
|
|
|
|
183 |
|
|
|
186 |
|
|
||||
Gain on business disposition |
|
(2 |
) |
|
|
— |
|
|
|
|
(17 |
) |
|
|
— |
|
|
||||
Deferred income taxes and income taxes receivable/payable |
|
30 |
|
|
|
(49 |
) |
|
|
|
18 |
|
|
|
(40 |
) |
|
||||
Asset impairments and TRU inventory charge |
|
3 |
|
|
|
71 |
|
|
|
|
6 |
|
|
|
110 |
|
|
||||
Pension, net |
|
(19 |
) |
|
|
(3 |
) |
|
|
|
(42 |
) |
|
|
(8 |
) |
|
||||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable, net |
|
65 |
|
|
|
110 |
|
|
|
|
(38 |
) |
|
|
157 |
|
|
||||
Inventories |
|
16 |
|
|
|
124 |
|
|
|
|
(162 |
) |
|
|
(244 |
) |
|
||||
Accounts payable |
|
(71 |
) |
|
|
(351 |
) |
|
|
|
188 |
|
|
|
(400 |
) |
|
||||
Other, net |
|
274 |
|
|
|
341 |
|
|
|
|
185 |
|
|
|
138 |
|
|
||||
Net cash from operating activities |
|
572 |
|
|
|
245 |
|
|
|
|
679 |
|
|
|
(148 |
) |
|
||||
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures |
|
(75 |
) |
|
|
(46 |
) |
|
|
|
(128 |
) |
|
|
(96 |
) |
|
||||
Net proceeds from business disposition |
|
(1 |
) |
|
|
— |
|
|
|
|
38 |
|
|
|
— |
|
|
||||
Net proceeds from corporate-owned life insurance policies |
|
— |
|
|
|
15 |
|
|
|
|
— |
|
|
|
17 |
|
|
||||
Proceeds from the sale of property, plant and equipment |
|
— |
|
|
|
4 |
|
|
|
|
— |
|
|
|
5 |
|
|
||||
Other investing activities, net |
|
— |
|
|
|
(2 |
) |
|
|
|
— |
|
|
|
(11 |
) |
|
||||
Net cash from investing activities |
|
(76 |
) |
|
|
(29 |
) |
|
|
|
(90 |
) |
|
|
(85 |
) |
|
||||
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Increase (decrease) in short-term debt |
|
— |
|
|
|
(104 |
) |
|
|
|
— |
|
|
|
499 |
|
|
||||
Net proceeds from long-term debt |
|
— |
|
|
|
(1 |
) |
|
|
|
— |
|
|
|
642 |
|
|
||||
Principal payments on long-term debt and nonrecourse debt |
|
(252 |
) |
|
|
(187 |
) |
|
|
|
(519 |
) |
|
|
(194 |
) |
|
||||
Proceeds from borrowings against corporate-owned life insurance policies |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
377 |
|
|
||||
Payment on borrowings against corporate-owned life insurance policies |
|
— |
|
|
|
(15 |
) |
|
|
|
— |
|
|
|
(15 |
) |
|
||||
Purchases of Textron common stock |
|
(196 |
) |
|
|
— |
|
|
|
|
(287 |
) |
|
|
(54 |
) |
|
||||
Dividends paid |
|
(4 |
) |
|
|
(4 |
) |
|
|
|
(9 |
) |
|
|
(9 |
) |
|
||||
Other financing activities, net |
|
51 |
|
|
|
1 |
|
|
|
|
75 |
|
|
|
(8 |
) |
|
||||
Net cash from financing activities |
|
(401 |
) |
|
|
(310 |
) |
|
|
|
(740 |
) |
|
|
1,238 |
|
|
||||
Total cash flows from continuing operations |
|
95 |
|
|
|
(94 |
) |
|
|
|
(151 |
) |
|
|
1,005 |
|
|
||||
Total cash flows from discontinued operations |
|
(1 |
) |
|
|
1 |
|
|
|
|
(1 |
) |
|
|
— |
|
|
||||
Effect of exchange rate changes on cash and equivalents |
|
4 |
|
|
|
6 |
|
|
|
|
1 |
|
|
|
(10 |
) |
|
||||
Net Change in Cash and Equivalents |
|
98 |
|
|
|
(87 |
) |
|
|
|
(151 |
) |
|
|
995 |
|
|
||||
Cash and Equivalents at Beginning of Period |
|
1,897 |
|
|
|
2,263 |
|
|
|
|
2,146 |
|
|
|
1,181 |
|
|
||||
Cash and Equivalents at End of Period |
|
$ |
1,995 |
|
|
|
$ |
2,176 |
|
|
|
|
$ |
1,995 |
|
|
|
$ |
2,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation: |
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|||||||||||||||
|
|
July 3,
|
|
|
July 4,
|
|
|
|
July 3,
|
|
|
July 4,
|
|
||||||||
Net Cash from Operating Activities - GAAP |
|
$ |
572 |
|
|
|
$ |
245 |
|
|
|
|
$ |
679 |
|
|
|
$ |
(148 |
) |
|
Less: Capital expenditures |
|
(75 |
) |
|
|
(46 |
) |
|
|
|
(128 |
) |
|
|
(96 |
) |
|
||||
Plus: Total pension contributions |
|
12 |
|
|
|
12 |
|
|
|
|
29 |
|
|
|
24 |
|
|
||||
Proceeds from the sale of property, plant and equipment |
|
— |
|
|
|
4 |
|
|
|
|
— |
|
|
|
5 |
|
|
||||
Manufacturing Cash Flow Before Pension Contributions - Non-GAAP (a) |
|
$ |
509 |
|
|
|
$ |
215 |
|
|
|
|
$ |
580 |
|
|
|
$ |
(215 |
) |
|
(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 |
|
|
Six Months Ended |
||||||||||||||||
|
|
July 3,
|
|
|
July 4,
|
|
|
|
July 3,
|
|
|
July 4,
|
|
||||||||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations |
|
$ |
184 |
|
|
|
$ |
(92 |
) |
|
|
|
$ |
355 |
|
|
|
$ |
(42 |
) |
|
Depreciation and amortization |
|
98 |
|
|
|
98 |
|
|
|
|
188 |
|
|
|
188 |
|
|
||||
Gain on business disposition |
|
(2 |
) |
|
|
— |
|
|
|
|
(17 |
) |
|
|
— |
|
|
||||
Deferred income taxes and income taxes receivable/payable |
|
24 |
|
|
|
(48 |
) |
|
|
|
24 |
|
|
|
(38 |
) |
|
||||
Asset impairments and TRU inventory charge |
|
3 |
|
|
|
71 |
|
|
|
|
6 |
|
|
|
110 |
|
|
||||
Pension, net |
|
(19 |
) |
|
|
(3 |
) |
|
|
|
(42 |
) |
|
|
(8 |
) |
|
||||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable, net |
|
65 |
|
|
|
110 |
|
|
|
|
(38 |
) |
|
|
157 |
|
|
||||
Inventories |
|
16 |
|
|
|
124 |
|
|
|
|
(162 |
) |
|
|
(244 |
) |
|
||||
Accounts payable |
|
(71 |
) |
|
|
(351 |
) |
|
|
|
188 |
|
|
|
(400 |
) |
|
||||
Captive finance receivables, net |
|
20 |
|
|
|
(14 |
) |
|
|
|
89 |
|
|
|
(14 |
) |
|
||||
Other, net |
|
274 |
|
|
|
347 |
|
|
|
|
182 |
|
|
|
139 |
|
|
||||
Net cash from operating activities |
|
592 |
|
|
|
242 |
|
|
|
|
773 |
|
|
|
(152 |
) |
|
||||
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures |
|
(75 |
) |
|
|
(46 |
) |
|
|
|
(128 |
) |
|
|
(96 |
) |
|
||||
Net proceeds from business disposition |
|
(1 |
) |
|
|
— |
|
|
|
|
38 |
|
|
|
— |
|
|
||||
Finance receivables repaid |
|
6 |
|
|
|
7 |
|
|
|
|
19 |
|
|
|
20 |
|
|
||||
Net proceeds from corporate-owned life insurance policies |
|
— |
|
|
|
15 |
|
|
|
|
— |
|
|
|
17 |
|
|
||||
Proceeds from sale of property, plant and equipment |
|
— |
|
|
|
4 |
|
|
|
|
— |
|
|
|
5 |
|
|
||||
Other investing activities, net |
|
— |
|
|
|
(1 |
) |
|
|
|
6 |
|
|
|
(10 |
) |
|
||||
Net cash from investing activities |
|
(70 |
) |
|
|
(21 |
) |
|
|
|
(65 |
) |
|
|
(64 |
) |
|
||||
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Increase (decrease) in short-term debt |
|
— |
|
|
|
(104 |
) |
|
|
|
— |
|
|
|
499 |
|
|
||||
Net proceeds from long-term debt |
|
— |
|
|
|
(1 |
) |
|
|
|
— |
|
|
|
642 |
|
|
||||
Principal payments on long-term debt and nonrecourse debt |
|
(266 |
) |
|
|
(205 |
) |
|
|
|
(553 |
) |
|
|
(229 |
) |
|
||||
Proceeds from borrowings against corporate-owned life insurance policies |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
377 |
|
|
||||
Payment on borrowings against corporate-owned life insurance policies |
|
— |
|
|
|
(15 |
) |
|
|
|
— |
|
|
|
(15 |
) |
|
||||
Purchases of Textron common stock |
|
(196 |
) |
|
|
— |
|
|
|
|
(287 |
) |
|
|
(54 |
) |
|
||||
Dividends paid |
|
(4 |
) |
|
|
(4 |
) |
|
|
|
(9 |
) |
|
|
(9 |
) |
|
||||
Other financing activities, net |
|
51 |
|
|
|
1 |
|
|
|
|
75 |
|
|
|
4 |
|
|
||||
Net cash from financing activities |
|
(415 |
) |
|
|
(328 |
) |
|
|
|
(774 |
) |
|
|
1,215 |
|
|
||||
Total cash flows from continuing operations |
|
107 |
|
|
|
(107 |
) |
|
|
|
(66 |
) |
|
|
999 |
|
|
||||
Total cash flows from discontinued operations |
|
(1 |
) |
|
|
1 |
|
|
|
|
(1 |
) |
|
|
— |
|
|
||||
Effect of exchange rate changes on cash and equivalents |
|
4 |
|
|
|
6 |
|
|
|
|
1 |
|
|
|
(10 |
) |
|
||||
Net Change in Cash and Equivalents |
|
110 |
|
|
|
(100 |
) |
|
|
|
(66 |
) |
|
|
989 |
|
|
||||
Cash and Equivalents at Beginning of Period |
|
2,078 |
|
|
|
2,446 |
|
|
|
|
2,254 |
|
|
|
1,357 |
|
|
||||
Cash and Equivalents at End of Period |
|
$ |
2,188 |
|
|
|
$ |
2,346 |
|
|
|
|
$ |
2,188 |
|
|
|
$ |
2,346 |
|
|
TEXTRON INC.