Textron Reports Third 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 Nine Months Ended
September 28,
2019
September 29,
2018
September 28,
2019
September 29,
2018
REVENUES
MANUFACTURING:
Textron Aviation

$

1,201

 

$

1,133

 

$

3,458

 

$

3,419

 

Bell

 

783

 

 

770

 

 

2,293

 

 

2,353

 

Textron Systems

 

311

 

 

352

 

 

926

 

 

1,119

 

Industrial

 

950

 

 

930

 

 

2,871

 

 

3,283

 

 

3,245

 

 

3,185

 

 

9,548

 

 

10,174

 

 
FINANCE

 

14

 

 

15

 

 

47

 

 

48

 

Total revenues

$

3,259

 

$

3,200

 

$

9,595

 

$

10,222

 

 
SEGMENT PROFIT
MANUFACTURING:
Textron Aviation

$

104

 

$

99

 

$

315

 

$

275

 

Bell

 

110

 

 

113

 

 

317

 

 

317

 

Textron Systems

 

31

 

 

29

 

 

108

 

 

119

 

Industrial

 

47

 

 

1

 

 

173

 

 

145

 

 

292

 

 

242

 

 

913

 

 

856

 

 
FINANCE

 

5

 

 

3

 

 

17

 

 

14

 

Segment Profit

 

297

 

 

245

 

 

930

 

 

870

 

 
Corporate expenses and other, net

 

(17

)

 

(29

)

 

(88

)

 

(107

)

Interest expense, net for Manufacturing group

 

(39

)

 

(32

)

 

(110

)

 

(101

)

Gain on business disposition (a)

 

-

 

 

444

 

 

-

 

 

444

 

Income before income taxes

 

241

 

 

628

 

 

732

 

 

1,106

 

Income tax expense

 

(21

)

 

(65

)

 

(116

)

 

(130

)

Net Income

$

220

 

$

563

 

$

616

 

$

976

 

 
Earnings Per Share (EPS)

$

0.95

 

$

2.26

 

$

2.64

 

$

3.80

 

 
Diluted average shares outstanding

 

231,097,000

 

 

249,378,000

 

 

233,689,000

 

 

256,780,000

 

 
Net Income and Diluted Earnings Per Share GAAP to Non-GAAP Reconciliation:
 
Three Months Ended
September 29,
2018
Nine Months Ended
September 29,
2018
Diluted EPS Diluted EPS
Net income - GAAP

$

563

 

$

2.26

 

$

976

 

$

3.80

 

Gain on business disposition, net of taxes of $34 million

 

(410

)

 

(1.65

)

 

(410

)

 

(1.60

)

Adjusted net income - Non-GAAP (b)

$

153

 

$

0.61

 

$

566

 

$

2.20

 

 
 
(a) On July 2, 2018, Textron completed the sale of the Tools & Test Equipment product line and recorded an after-tax gain of $410 million, subject to post-closing adjustments.

(b)

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)
 
 
September 28,
2019
December 29,
2018
Assets
Cash and equivalents

$

931

 

$

987

 

Accounts receivable, net

1,018

 

1,024

 

Inventories

4,436

 

3,818

 

Other current assets

856

 

785

 

Net property, plant and equipment

2,497

 

2,615

 

Goodwill

2,142

 

2,218

 

Other assets

2,225

 

1,800

 

Finance group assets

957

 

1,017

 

Total Assets

$

15,062

 

$

14,264

 

 
 
Liabilities and Shareholders' Equity
Short-term debt and current portion of long-term debt

$

568

 

$

258

 

Current liabilities

3,198

 

3,248

 

Other liabilities

2,130

 

1,932

 

Long-term debt

2,909

 

2,808

 

Finance group liabilities

805

 

826

 

Total Liabilities

9,610

 

9,072

 

 
Total Shareholders' Equity

5,452

 

5,192

 

Total Liabilities and Shareholders' Equity

$

15,062

$

14,264

 

TEXTRON INC.

MANUFACTURING GROUP

Condensed Schedule of Cash Flows

(In millions)

(Unaudited)

 

Three Months Ended

 

Nine Months Ended

September 28,
2019

September 29,
2018

 

September 28,
2019

September 29,
2018

Cash flows from operating activities:
Net income

$

216

 

$

561

 

$

603

 

$

959

 

Depreciation and amortization

 

98

 

 

104

 

 

297

 

 

316

 

Changes in working capital

 

(124

)

 

74

 

 

(840

)

 

(204

)

Changes in other assets and liabilities and non-cash items

 

48

 

 

24

 

 

95

 

 

57

 

Gain on business disposition

 

-

 

 

(444

)

 

-

 

 

(444

)

Dividends received from TFC

 

-

 

 

-

 

 

50

 

 

50

 

Net cash from operating activities of continuing operations

 

238

 

 

319

 

 

205

 

 

734

 

Cash flows from investing activities:
Capital expenditures

 

(81

)

 

(74

)

 

(216

)

 

(233

)

Net proceeds from business disposition

 

-

 

 

807

 

 

-

 

 

807

 

Net proceeds from corporate-owned life insurance policies

 

-

 

 

-

 

 

4

 

 

98

 

Proceeds from the sale of property, plant and equipment

 

2

 

 

2

 

 

6

 

 

12

 

Other investing activities, net

 

-

 

 

(3

)

 

-

 

 

(3

)

Net cash from investing activities

 

(79

)

 

732

 

 

(206

)

 

681

 

Cash flows from financing activities:
Increase in short-term debt

 

118

 

 

-

 

 

118

 

 

-

 

Net proceeds from issuance of long-term debt

 

-

 

 

-

 

 

297

 

 

-

 

Purchases of Textron common stock

 

(109

)

 

(468

)

 

(470

)

 

(1,383

)

Other financing activities, net

 

(1

)

 

16

 

 

8

 

 

49

 

Net cash from financing activities

 

8

 

 

(452

)

 

(47

)

 

(1,334

)

Total cash flows from continuing operations

 

167

 

 

599

 

 

(48

)

 

81

 

Total cash flows from discontinued operations

 

(1

)

 

-

 

 

(2

)

 

(1

)

Effect of exchange rate changes on cash and equivalents

 

(10

)

 

(3

)

 

(6

)

 

(9

)

Net change in cash and equivalents

 

156

 

 

596

 

 

(56

)

 

71

 

Cash and equivalents at beginning of period

 

775

 

 

554

 

 

987

 

 

1,079

 

Cash and equivalents at end of period

$

931

 

$

1,150

 

$

931

 

$

1,150

 

 
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation:

Three Months Ended

 

Nine Months Ended

September 28,
2019

September 29,
2018

 

September 28,
2019

September 29,
2018

Net cash from operating activities of continuing operations - GAAP

$

238

 

$

319

 

$

205

 

$

734

 

Less: Capital expenditures

 

(81

)

 

(74

)

 

(216

)

 

(233

)

Dividends received from TFC

 

-

 

 

-

 

 

(50

)

 

(50

)

Plus: Total pension contributions

 

11

 

 

12

 

 

36

 

 

37

 

Taxes paid on gain on business disposition

 

11

 

 

-

 

 

11

 

 

-

 

Proceeds from the sale of property, plant and equipment

 

2

 

 

2

 

 

6

 

 

12

 

Manufacturing cash flow before pension contributions - Non-GAAP (a)

$

181

 

$

259

 

$

(8

)

$

500

 

 

(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 28,
2019

September 29,
2018

 

September 28,
2019

September 29,
2018

Cash flows from operating activities:
Net Income

$

220

 

$

563

 

$

616

 

$

976

 

Depreciation and amortization

 

100

 

 

106

 

 

302

 

 

322

 

Changes in working capital

 

(84

)

 

50

 

 

(787

)

 

(214

)

Changes in other assets and liabilities and non-cash items

 

49

 

 

24

 

 

94

 

 

57

 

Gain on business disposition

 

-

 

 

(444

)

 

-

 

 

(444

)

Net cash from operating activities of continuing operations

 

285

 

 

299

 

 

225

 

 

697

 

Cash flows from investing activities:
Capital expenditures

 

(81

)

 

(74

)

 

(216

)

 

(233

)

Net proceeds from business disposition

 

-

 

 

807

 

 

-

 

 

807

 

Net proceeds from corporate-owned life insurance policies

 

-

 

 

-

 

 

4

 

 

98

 

Finance receivables repaid

 

-

 

 

-

 

 

20

 

 

25

 

Other investing activities, net

 

2

 

 

7

 

 

9

 

 

37

 

Net cash from investing activities

 

(79

)

 

740

 

 

(183

)

 

734

 

Cash flows from financing activities:
Increase in short-term debt

 

118

 

 

-

 

 

118

 

 

-

 

Net proceeds from issuance of long-term debt

 

-

 

 

-

 

 

297

 

 

-

 

Principal payments on long-term debt and nonrecourse debt

 

(7

)

 

(23

)

 

(42

)

 

(60

)

Purchases of Textron common stock

 

(109

)

 

(468

)

 

(470

)

 

(1,383

)

Other financing activities, net

 

(1

)

 

17

 

 

9

 

 

53

 

Net cash from financing activities

 

1

 

 

(474

)

 

(88

)

 

(1,390

)

Total cash flows from continuing operations

 

207

 

 

565

 

 

(46

)

 

41

 

Total cash flows from discontinued operations

 

(1

)

 

-

 

 

(2

)

 

(1

)

Effect of exchange rate changes on cash and equivalents

 

(10

)

 

(3

)

 

(6

)

 

(9

)

Net change in cash and equivalents

 

196

 

 

562

 

 

(54

)

 

31

 

Cash and equivalents at beginning of period

 

857

 

 

731

 

 

1,107

 

 

1,262

 

Cash and equivalents at end of period

$

1,053

 

$

1,293

 

$

1,053

 

$

1,293

 

 

TEXTRON INC.

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