TEXTRON INC. |
|||||||||||||||||||||
Revenues by Segment and Reconciliation of Segment Profit to Net Income |
|||||||||||||||||||||
(Dollars in millions, except per share amounts) |
|||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||||||
|
January 1,
|
January 2,
|
|
January 1,
|
January 2,
|
||||||||||||||||
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
MANUFACTURING: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Textron Aviation |
|
$ |
1,359 |
|
|
|
$ |
1,560 |
|
|
|
|
$ |
4,566 |
|
|
|
$ |
3,974 |
|
|
Bell |
|
|
858 |
|
|
|
|
871 |
|
|
|
|
|
3,364 |
|
|
|
|
3,309 |
|
|
Textron Systems |
|
|
313 |
|
|
|
|
357 |
|
|
|
|
|
1,273 |
|
|
|
|
1,313 |
|
|
Industrial |
|
|
781 |
|
|
|
|
866 |
|
|
|
|
|
3,130 |
|
|
|
|
3,000 |
|
|
|
|
|
3,311 |
|
|
|
|
3,654 |
|
|
|
|
|
12,333 |
|
|
|
|
11,596 |
|
|
FINANCE |
|
|
11 |
|
|
|
|
13 |
|
|
|
|
|
49 |
|
|
|
|
55 |
|
|
Total revenues |
|
$ |
3,322 |
|
|
|
$ |
3,667 |
|
|
|
|
$ |
12,382 |
|
|
|
$ |
11,651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
SEGMENT PROFIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
MANUFACTURING: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Textron Aviation |
|
$ |
137 |
|
|
|
$ |
108 |
|
|
|
|
$ |
378 |
|
|
|
$ |
16 |
|
|
Bell |
|
|
88 |
|
|
|
|
110 |
|
|
|
|
|
408 |
|
|
|
|
462 |
|
|
Textron Systems |
|
|
45 |
|
|
|
|
49 |
|
|
|
|
|
189 |
|
|
|
|
152 |
|
|
Industrial |
|
|
38 |
|
|
|
|
55 |
|
|
|
|
|
140 |
|
|
|
|
111 |
|
|
|
|
|
308 |
|
|
|
|
322 |
|
|
|
|
|
1,115 |
|
|
|
|
741 |
|
|
FINANCE |
|
|
2 |
|
|
|
|
2 |
|
|
|
|
|
19 |
|
|
|
|
10 |
|
|
Segment profit |
|
|
310 |
|
|
|
|
324 |
|
|
|
|
|
1,134 |
|
|
|
|
751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate expenses and other, net |
|
|
(29 |
) |
|
|
|
(50 |
) |
|
|
|
|
(129 |
) |
|
|
|
(122 |
) |
|
Interest expense, net for Manufacturing group |
|
|
(29 |
) |
|
|
|
(36 |
) |
|
|
|
|
(124 |
) |
|
|
|
(145 |
) |
|
Special charges (a) |
|
|
(5 |
) |
|
|
|
(23 |
) |
|
|
|
|
(25 |
) |
|
|
|
(147 |
) |
|
Gain on business disposition (b) |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
17 |
|
|
|
|
— |
|
|
Inventory charge (c) |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
(55 |
) |
|
Income from continuing operations before income taxes |
|
|
247 |
|
|
|
|
215 |
|
|
|
|
|
873 |
|
|
|
|
282 |
|
|
Income tax benefit (expense) |
|
|
(40 |
) |
|
|
|
21 |
|
|
|
|
|
(126 |
) |
|
|
|
27 |
|
|
Income from continuing operations |
|
$ |
207 |
|
|
|
$ |
236 |
|
|
|
|
$ |
747 |
|
|
|
$ |
309 |
|
|
Discontinued operations, net of income taxes |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
(1 |
) |
|
|
|
— |
|
|
Net income |
|
$ |
207 |
|
|
|
$ |
236 |
|
|
|
|
$ |
746 |
|
|
|
$ |
309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations |
|
$ |
0.93 |
|
|
|
$ |
1.03 |
|
|
|
|
$ |
3.30 |
|
|
|
$ |
1.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted average shares outstanding |
|
|
222,860,000 |
|
|
|
|
229,365,000 |
|
|
|
|
|
226,520,000 |
|
|
|
|
228,979,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations and Diluted earnings per share (EPS) GAAP to Non-GAAP Reconciliation: |
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||||||
|
January 1,
|
January 2,
|
|
January 1,
|
January 2,
|
||||||||||||||||
Income from continuing operations - GAAP |
|
$ |
207 |
|
|
|
$ |
236 |
|
|
|
|
$ |
747 |
|
|
|
$ |
309 |
|
|
Add: Special charges, net of tax (a) |
|
|
3 |
|
|
|
|
16 |
|
|
|
|
|
18 |
|
|
|
|
119 |
|
|
Inventory charge, net of tax (c) |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
55 |
|
|
Tax benefit – TRU assets held for sale (c) |
|
|
— |
|
|
|
|
(8 |
) |
|
|
|
|
— |
|
|
|
|
(8 |
) |
|
Less: Gain on business disposition, net of tax (b) |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
(17 |
) |
|
|
|
— |
|
|
Adjusted income from continuing operations - Non-GAAP (d) |
|
$ |
210 |
|
|
|
$ |
244 |
|
|
|
|
$ |
748 |
|
|
|
$ |
475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations - GAAP |
|
$ |
0.93 |
|
|
|
$ |
1.03 |
|
|
|
|
$ |
3.30 |
|
|
|
$ |
1.35 |
|
|
Add: Special charges, net of tax (a) |
|
|
0.01 |
|
|
|
|
0.07 |
|
|
|
|
|
0.08 |
|
|
|
|
0.52 |
|
|
Inventory charge, net of tax (c) |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
0.24 |
|
|
Tax benefit – TRU assets held for sale (c) |
|
|
— |
|
|
|
|
(0.04 |
) |
|
|
|
|
— |
|
|
|
|
(0.04 |
) |
|
Less: Gain on business disposition, net of tax (b) |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
(0.08 |
) |
|
|
|
— |
|
|
Adjusted income from continuing operations - Non-GAAP (d) |
|
$ |
0.94 |
|
|
|
$ |
1.06 |
|
|
|
|
$ |
3.30 |
|
|
|
$ |
2.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
TEXTRON INC. |
||
Revenues by Segment and Reconciliation of Segment Profit to Net Income (Continued) |
||
(Dollars in millions, except per share amounts) |
||
(Unaudited) |
||
(a) |
|
In 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 $5 million and $25 million for the three and twelve months ended January 1, 2022, and $23 million and $108 million for the three and twelve months ended January 2, 2021. Special charges for the twelve months ended January 2, 2021 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. In the fourth quarter of 2020, we reached a definitive agreement to sell TRU Simulation + Training Canada Inc. which resulted in the recognition of an $8 million tax benefit. |
(d) |
|
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) |
||||||
|
|
|
||||
|
January 1,
|
January 2,
|
||||
Assets |
|
|
||||
Cash and equivalents |
$ |
1,922 |
$ |
2,146 |
||
Accounts receivable, net |
|
838 |
|
787 |
||
Inventories |
|
3,468 |
|
3,513 |
||
Other current assets |
|
1,018 |
|
950 |
||
Net property, plant and equipment |
|
2,538 |
|
2,516 |
||
Goodwill |
|
2,149 |
|
2,157 |
||
Other assets |
|
3,027 |
|
2,436 |
||
Finance group assets |
|
867 |
|
938 |
||
Total Assets |
$ |
15,827 |
$ |
15,443 |
||
|
|
|
||||
|
|
|
||||
Liabilities and Shareholders' Equity |
|
|
||||
Current portion of long-term debt |
$ |
6 |
$ |
509 |
||
Accounts payable |
|
786 |
|
776 |
||
Other current liabilities |
|
2,344 |
|
1,985 |
||
Other liabilities |
|
2,005 |
|
2,357 |
||
Long-term debt |
|
3,179 |
|
3,198 |
||
Finance group liabilities |
|
692 |
|
773 |
||
Total Liabilities |
|
9,012 |
|
9,598 |
||
|
|
|
||||
Total Shareholders' Equity |
|
6,815 |
|
5,845 |
||
Total Liabilities and Shareholders' Equity |
$ |
15,827 |
$ |
15,443 |
||
TEXTRON INC. |
|||||||||||||||||||||
MANUFACTURING GROUP |
|||||||||||||||||||||
Condensed Schedule of Cash Flows |
|||||||||||||||||||||
(In millions) |
|||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
|
|
Twelve Months Ended |
|
||||||||||||||
|
|
January 1,
|
|
|
January 2,
|
|
|
|
January 1,
|
|
|
January 2,
|
|
||||||||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations |
|
$ |
203 |
|
|
|
$ |
234 |
|
|
|
|
$ |
740 |
|
|
|
$ |
301 |
|
|
Depreciation and amortization |
|
|
103 |
|
|
|
|
107 |
|
|
|
|
|
380 |
|
|
|
|
386 |
|
|
Deferred income taxes and income taxes receivable/payable |
|
|
18 |
|
|
|
|
(34 |
) |
|
|
|
|
43 |
|
|
|
|
(63 |
) |
|
Pension, net |
|
|
(20 |
) |
|
|
|
(4 |
) |
|
|
|
|
(82 |
) |
|
|
|
(15 |
) |
|
Gain on business disposition |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
(17 |
) |
|
|
|
— |
|
|
Asset impairments and TRU inventory charge |
|
|
2 |
|
|
|
|
5 |
|
|
|
|
|
13 |
|
|
|
|
116 |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable, net |
|
|
(66 |
) |
|
|
|
90 |
|
|
|
|
|
(58 |
) |
|
|
|
149 |
|
|
Inventories |
|
|
209 |
|
|
|
|
692 |
|
|
|
|
|
45 |
|
|
|
|
434 |
|
|
Accounts payable |
|
|
12 |
|
|
|
|
(346 |
) |
|
|
|
|
13 |
|
|
|
|
(613 |
) |
|
Other, net |
|
|
(4 |
) |
|
|
|
(131 |
) |
|
|
|
|
392 |
|
|
|
|
138 |
|
|
Net cash from operating activities |
|
|
457 |
|
|
|
|
613 |
|
|
|
|
|
1,469 |
|
|
|
|
833 |
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures |
|
|
(171 |
) |
|
|
|
(166 |
) |
|
|
|
|
(375 |
) |
|
|
|
(317 |
) |
|
Net proceeds from business disposition |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
38 |
|
|
|
|
— |
|
|
Proceeds from an insurance recovery and sale of property, plant and equipment |
|
|
— |
|
|
|
|
8 |
|
|
|
|
|
3 |
|
|
|
|
33 |
|
|
Other investing activities, net |
|
|
(1 |
) |
|
|
|
(3 |
) |
|
|
|
|
(1 |
) |
|
|
|
7 |
|
|
Net cash from investing activities |
|
|
(172 |
) |
|
|
|
(161 |
) |
|
|
|
|
(335 |
) |
|
|
|
(277 |
) |
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net proceeds from long-term debt |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
1,137 |
|
|
Principal payments on long-term debt and nonrecourse debt |
|
|
(2 |
) |
|
|
|
(353 |
) |
|
|
|
|
(524 |
) |
|
|
|
(548 |
) |
|
Payments net of borrowings against corporate-owned insurance policies |
|
|
— |
|
|
|
|
(362 |
) |
|
|
|
|
— |
|
|
|
|
— |
|
|
Purchases of Textron common stock |
|
|
(335 |
) |
|
|
|
(129 |
) |
|
|
|
|
(921 |
) |
|
|
|
(183 |
) |
|
Dividends paid |
|
|
(4 |
) |
|
|
|
(4 |
) |
|
|
|
|
(18 |
) |
|
|
|
(18 |
) |
|
Other financing activities, net |
|
|
11 |
|
|
|
|
5 |
|
|
|
|
|
114 |
|
|
|
|
5 |
|
|
Net cash from financing activities |
|
|
(330 |
) |
|
|
|
(843 |
) |
|
|
|
|
(1,349 |
) |
|
|
|
393 |
|
|
Total cash flows from continuing operations |
|
|
(45 |
) |
|
|
|
(391 |
) |
|
|
|
|
(215 |
) |
|
|
|
949 |
|
|
Total cash flows from discontinued operations |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
(1 |
) |
|
|
|
(1 |
) |
|
Effect of exchange rate changes on cash and equivalents |
|
|
(2 |
) |
|
|
|
19 |
|
|
|
|
|
(8 |
) |
|
|
|
17 |
|
|
Net change in cash and equivalents |
|
|
(47 |
) |
|
|
|
(372 |
) |
|
|
|
|
(224 |
) |
|
|
|
965 |
|
|
Cash and equivalents at beginning of period |
|
|
1,969 |
|
|
|
|
2,518 |
|
|
|
|
|
2,146 |
|
|
|
|
1,181 |
|
|
Cash and equivalents at end of period |
|
$ |
1,922 |
|
|
|
$ |
2,146 |
|
|
|
|
$ |
1,922 |
|
|
|
$ |
2,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation: |
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
|
|
Twelve Months Ended |
|||||||||||||||
|
|
January 1,
|
|
|
January 2,
|
|
|
|
January 1,
|
|
|
January 2,
|
|
||||||||
Net cash from operating activities - GAAP |
|
$ |
457 |
|
|
|
$ |
613 |
|
|
|
|
$ |
1,469 |
|
|
|
$ |
833 |
|
|
Less: Capital expenditures |
|
|
(171 |
) |
|
|
|
(166 |
) |
|
|
|
|
(375 |
) |
|
|
|
(317 |
) |
|
Plus: Total pension contribution |
|
|
12 |
|
|
|
|
12 |
|
|
|
|
|
52 |
|
|
|
|
47 |
|
|
Proceeds from an insurance recovery and sale of property, plant and equipment |
|
|
— |
|
|
|
|
8 |
|
|
|
|
|
3 |
|
|
|
|
33 |
|
|
Manufacturing cash flow before pension contributions - Non-GAAP (a) |
|
$ |
298 |
|
|
|
$ |
467 |
|
|
|
|
$ |
1,149 |
|
|
|
$ |
596 |
|
|
(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 |
|
Twelve Months Ended |
||||||||||||||||||
|
|
January 1,
|
|
|
January 2,
|
|
|
|
January 1,
|
|
|
January 2,
|
|
||||||||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations |
|
$ |
207 |
|
|
|
$ |
236 |
|
|
|
|
$ |
747 |
|
|
|
$ |
309 |
|
|
Depreciation and amortization |
|
|
105 |
|
|
|
|
108 |
|
|
|
|
|
390 |
|
|
|
|
391 |
|
|
Deferred income taxes and income taxes receivable/payable |
|
|
1 |
|
|
|
|
(34 |
) |
|
|
|
|
34 |
|
|
|
|
(69 |
) |
|
Pension, net |
|
|
(20 |
) |
|
|
|
(4 |
) |
|
|
|
|
(82 |
) |
|
|
|
(15 |
) |
|
Gain on business disposition |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
(17 |
) |
|
|
|
— |
|
|
Asset impairments and TRU inventory charge |
|
|
2 |
|
|
|
|
5 |
|
|
|
|
|
13 |
|
|
|
|
116 |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable, net |
|
|
(66 |
) |
|
|
|
90 |
|
|
|
|
|
(58 |
) |
|
|
|
149 |
|
|
Inventories |
|
|
209 |
|
|
|
|
692 |
|
|
|
|
|
45 |
|
|
|
|
434 |
|
|
Accounts payable |
|
|
12 |
|
|
|
|
(346 |
) |
|
|
|
|
13 |
|
|
|
|
(613 |
) |
|
Captive finance receivables, net |
|
|
(21 |
) |
|
|
|
(64 |
) |
|
|
|
|
131 |
|
|
|
|
(89 |
) |
|
Other, net |
|
|
(4 |
) |
|
|
|
(114 |
) |
|
|
|
|
383 |
|
|
|
|
156 |
|
|
Net cash from operating activities |
|
|
425 |
|
|
|
|
569 |
|
|
|
|
|
1,599 |
|
|
|
|
769 |
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures |
|
|
(171 |
) |
|
|
|
(166 |
) |
|
|
|
|
(375 |
) |
|
|
|
(317 |
) |
|
Net proceeds from business disposition |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
38 |
|
|
|
|
— |
|
|
Proceeds from an insurance recovery and sale of property, plant and equipment |
|
|
— |
|
|
|
|
8 |
|
|
|
|
|
3 |
|
|
|
|
33 |
|
|
Finance receivables repaid |
|
|
— |
|
|
|
|
1 |
|
|
|
|
|
19 |
|
|
|
|
22 |
|
|
Other investing activities, net |
|
|
17 |
|
|
|
|
1 |
|
|
|
|
|
34 |
|
|
|
|
14 |
|
|
Net cash from investing activities |
|
|
(154 |
) |
|
|
|
(156 |
) |
|
|
|
|
(281 |
) |
|
|
|
(248 |
) |
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net proceeds from long-term debt |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
1,137 |
|
|
Principal payments on long-term debt and nonrecourse debt |
|
|
(6 |
) |
|
|
|
(358 |
) |
|
|
|
|
(621 |
) |
|
|
|
(593 |
) |
|
Payments net of borrowings against corporate-owned insurance policies |
|
|
— |
|
|
|
|
(362 |
) |
|
|
|
|
— |
|
|
|
|
— |
|
|
Purchases of Textron common stock |
|
|
(335 |
) |
|
|
|
(129 |
) |
|
|
|
|
(921 |
) |
|
|
|
(183 |
) |
|
Dividends paid |
|
|
(4 |
) |
|
|
|
(4 |
) |
|
|
|
|
(18 |
) |
|
|
|
(18 |
) |
|
Other financing activities, net |
|
|
11 |
|
|
|
|
5 |
|
|
|
|
|
114 |
|
|
|
|
17 |
|
|
Net cash from financing activities |
|
|
(334 |
) |
|
|
|
(848 |
) |
|
|
|
|
(1,446 |
) |
|
|
|
360 |
|
|
Total cash flows from continuing operations |
|
|
(63 |
) |
|
|
|
(435 |
) |
|
|
|
|
(128 |
) |
|
|
|
881 |
|
|
Total cash flows from discontinued operations |
|
|
— |
|
|
|
|
— |
|
|
|
|
|
(1 |
) |
|
|
|
(1 |
) |
|
Effect of exchange rate changes on cash and equivalents |
|
|
(2 |
) |
|
|
|
19 |
|
|
|
|
|
(8 |
) |
|
|
|
17 |
|
|
Net change in cash and equivalents |
|
|
(65 |
) |
|
|
|
(416 |
) |
|
|
|
|
(137 |
) |
|
|
|
897 |
|
|
Cash and equivalents at beginning of period |
|
|
2,182 |
|
|
|
|
2,670 |
|
|
|
|
|
2,254 |
|
|
|
|
1,357 |
|
|
Cash and equivalents at end of period |
|
$ |
2,117 |
|
|
|
$ |
2,254 |
|
|
|
|
$ |
2,117 |
|
|
|
$ |
2,254 |
|
|
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 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 and have provided a reconciliation of the GAAP to non-GAAP amounts for each measure: |
|
Adjusted Income from Continuing Operations and Adjusted Diluted Earnings Per Share |
Adjusted income from continuing operations and adjusted diluted earnings per share exclude special charges, net of tax. We consider items recorded in special charges, such as enterprise-wide restructuring, certain asset impairment charges, and acquisition-related restructuring, integration and transaction costs, to be of a non-recurring nature that is not indicative of ongoing operations. In addition, we have excluded certain impacts of the enterprise-wide restructuring plan on TRU Simulation + Training Canada Inc. (TRU Canada) that are not included within special charges, but are of a non-recurring nature and are not indicative of ongoing operations. At TRU Canada, an inventory charge is excluded as it relates to the write-down of inventory in connection with an action taken under the restructuring plan. Due to the substantial decline in demand and order cancellations for flight simulators resulting from the impact of the pandemic on the commercial air transportation business, we ceased manufacturing at TRU Canada’s Montreal facility, resulting in the production suspension of its commercial air transport simulators. As a result of this action and market conditions, the related inventory was written down to its net realizable value in the second quarter of 2020. In the fourth quarter of 2020, we reached a definitive agreement to sell TRU Canada, which resulted in the recognition of an $8 million tax benefit, and in the first quarter of 2021, TRU Canada was sold. The tax benefit and the after-tax gain are both excluded as they were incurred in connection with the enterprise-wide restructuring plan. |
|
Three Months Ended |
|
Twelve Months Ended |
|||||||||||||||||
|
|
January 1, 2022 |
|
|
January 2, 2021 |
|
|
|
January 1, 2022 |
|
|
January 2, 2021 |
|
|||||||
Income from continuing operations - GAAP |
|
$ |
207 |
|
|
$ |
236 |
|
|
|
|
$ |
747 |
|
|
|
$ |
309 |
|
|
Add: Special charges, net of tax |
|
|
3 |
|
|
|
16 |
|
|
|
|
|
18 |
|
|
|
|
119 |
|
|
Inventory charge, net of tax |
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
55 |
|
|
Tax benefit – TRU assets held for sale |
|
|
— |
|
|
|
(8 |
) |
|
|
|
|
— |
|
|
|
|
(8 |
) |
|
Less: Gain on business disposition, net of tax |
|
|
— |
|
|
|
— |
|
|
|
|
|
(17 |
) |
|
|
|
— |
|
|
Adjusted income from continuing operations - Non-GAAP |
|
$ |
210 |
|
|
$ |
244 |
|
|
|
|
$ |
748 |
|
|
|
$ |
475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Income from continuing operations - GAAP |
|
$ |
0.93 |
|
|
$ |
1.03 |
|
|
|
|
$ |
3.30 |
|
|
|
$ |
1.35 |
|
|
Add: Special charges, net of tax |
|
|
0.01 |
|
|
|
0.07 |
|
|
|
|
|
0.08 |
|
|
|
|
0.52 |
|
|
Inventory charge, net of tax |
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
0.24 |
|
|
Tax benefit – TRU assets held for sale |
|
|
— |
|
|
|
(0.04 |
) |
|
|
|
|
— |
|
|
|
|
(0.04 |
) |
|
Less: Gain on business disposition, net of tax |
|
|
— |
|
|
|
— |
|
|
|
|
|
(0.08 |
) |
|
|
|
— |
|
|
Adjusted income from continuing operations - Non-GAAP |
|
$ |
0.94 |
|
|
$ |
1.06 |
|
|
|
|
$ |
3.30 |
|
|
|
$ |
2.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TEXTRON INC. |
Non-GAAP Financial Measures (Continued) |
(Dollars in millions, except per share amounts) |
Manufacturing Cash Flow Before Pension Contributions |
Manufacturing cash flow before pension contributions adjusts net cash from operating activities (GAAP) for the following: |
|
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. |
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||||||
|
|
January 1,
|
|
|
January 2,
|
|
|
January 1,
|
|
|
January 2,
|
|
||||||||
Net cash from operating activities - GAAP |
|
$ |
457 |
|
|
|
$ |
613 |
|
|
|
$ |
1,469 |
|
|
|
$ |
833 |
|
|
Less: Capital expenditures |
|
|
(171 |
) |
|
|
|
(166 |
) |
|
|
|
(375 |
) |
|
|
|
(317 |
) |
|
Plus: Total pension contribution |
|
|
12 |
|
|
|
|
12 |
|
|
|
|
52 |
|
|
|
|
47 |
|
|
Proceeds from an insurance recovery and sale of property, plant and equipment |
|
|
— |
|
|
|
|
8 |
|
|
|
|
3 |
|
|
|
|
33 |
|
|
Manufacturing cash flow before pension contributions - Non-GAAP |
|
$ |
298 |
|
|
|
$ |
467 |
|
|
|
$ |
1,149 |
|
|
|
$ |
596 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2022 Outlook |
||||||||
Net cash from operating activities - GAAP |
|
$ |
1,075 |
|
— |
|
$ |
1,175 |
|
Less: Capital expenditures |
|
|
|
(425 |
) |
|
|
||
Plus: Total pension contribution |
|
|
|
50 |
|
|
|
||
Manufacturing cash flow before pension contributions - Non-GAAP |
|
$ |
700 |
|
— |
|
$ |
800 |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|