Textron Reports Fourth Quarter 2021 Results; Announces 2022 Financial Outlook

 

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,
2022

January 2,
2021

 

January 1,
2022

January 2,
2021

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,
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 (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,
2022

January 2,
2021

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,
2022

 

 

January 2,
2021

 

 

 

January 1,
2022

 

 

January 2,
2021

 

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,
2022

 

 

January 2,
2021

 

 

 

January 1,
2022

 

 

January 2,
2021

 

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,
2022

 

 

January 2,
2021

 

 

 

January 1,
2022

 

 

January 2,
2021

 

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:

  • Deducts capital expenditures and includes proceeds from insurance recoveries and 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.

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,
2022

 

 

January 2,
2021

 

 

January 1,
2022

 

 

January 2,
2021

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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