Textron Reports First Quarter 2020 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

April 4,

2020

March 30,

2019

REVENUES
MANUFACTURING:
Textron Aviation

$

872

 

$

1,134

 

Bell

 

823

 

 

739

 

Textron Systems

 

328

 

 

307

 

Industrial

 

740

 

 

912

 

 

2,763

 

 

3,092

 

 
FINANCE

 

14

 

 

17

 

Total revenues

$

2,777

 

$

3,109

 

 
SEGMENT PROFIT
MANUFACTURING:
Textron Aviation

$

3

 

$

106

 

Bell

 

115

 

 

104

 

Textron Systems

 

26

 

 

28

 

Industrial

 

9

 

 

50

 

 

153

 

 

288

 

 
FINANCE

 

3

 

 

6

 

Segment Profit

 

156

 

 

294

 

 
Corporate expenses and other, net

 

(14

)

 

(47

)

Interest expense, net for Manufacturing group

 

(34

)

 

(35

)

Special charges (a)

 

(39

)

 

-

 

Income before income taxes

 

69

 

 

212

 

Income tax expense

 

(19

)

 

(33

)

Net Income

$

50

 

$

179

 

 
Earnings Per Share

$

0.22

 

$

0.76

 

 
Diluted average shares outstanding

 

228,927,000

 

 

236,437,000

 

 
 
Net Income and Diluted Earnings Per Share (EPS) GAAP to Non-GAAP Reconciliation:
 
Three Months Ended
April 4, 2020
Diluted EPS
Net income - GAAP

$

50

 

$

0.22

 

Add: Special charges, net of taxes (a)

 

30

 

 

0.13

 

Adjusted net income - Non-GAAP (b)

$

80

 

$

0.35

 

 

(a)

Special charges included the impairment of indefinite-lived trade name intangible assets totaling $32 million in the Textron Aviation segment and $7 million in the Industrial segment resulting from changes in valuation assumptions related to the economic and business disruptions caused by the COVID-19 pandemic.
(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)
 
 
April 4,
2020
January 4,
2020
Assets
Cash and equivalents

$

2,263

$

1,181

Accounts receivable, net

870

921

Inventories

4,385

4,069

Other current assets

984

894

Net property, plant and equipment

2,483

2,527

Goodwill

2,150

2,150

Other assets

1,854

2,312

Finance group assets

957

964

Total Assets

$

15,946

$

15,018

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

$

1,396

$

561

Accounts payable

1,322

1,378

Other current liabilities

1,797

1,907

Other liabilities

2,143

2,288

Long-term debt

2,956

2,563

Finance group liabilities

798

803

Total Liabilities

10,412

9,500

 
Total Shareholders' Equity

5,534

5,518

Total Liabilities and Shareholders' Equity

$

15,946

$

15,018

 

 

TEXTRON INC.
MANUFACTURING GROUP
Condensed Schedule of Cash Flows
(In millions)
(Unaudited)
 
Three Months Ended
April 4, March 30,

2020

2019

Cash flows from operating activities:
Net income

$

48

 

$

175

 

Depreciation and amortization

 

89

 

 

100

 

Deferred income taxes and income taxes receivable/payable

 

9

 

 

6

 

Pension, net

 

(5

)

 

(14

)

Changes in assets and liabilities:
Accounts receivable, net

 

47

 

 

(33

)

Inventories

 

(368

)

 

(241

)

Accounts payable

 

(49

)

 

47

 

Dividends received from Finance group

 

-

 

 

50

 

Other, net

 

(164

)

 

(286

)

Net cash from operating activities

 

(393

)

 

(196

)

Cash flows from investing activities:
Capital expenditures

 

(50

)

 

(59

)

Other investing activities, net

 

(6

)

 

3

 

Net cash from investing activities

 

(56

)

 

(56

)

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

 

603

 

 

100

 

Proceeds from long-term debt

 

643

 

 

-

 

Proceeds from borrowings against corporate-owned insurance policies

 

377

 

 

-

 

Principal payments on long-term debt and nonrecourse debt

 

(7

)

 

-

 

Purchases of Textron common stock

 

(54

)

 

(202

)

Dividends paid

 

(5

)

 

(5

)

Other financing activities, net

 

(9

)

 

9

 

Net cash from financing activities

 

1,548

 

 

(98

)

Total cash flows from continuing operations

 

1,099

 

 

(350

)

Total cash flows from discontinued operations

 

(1

)

 

-

 

Effect of exchange rate changes on cash and equivalents

 

(16

)

 

9

 

Net change in cash and equivalents

 

1,082

 

 

(341

)

Cash and equivalents at beginning of period

 

1,181

 

 

987

 

Cash and equivalents at end of period

$

2,263

 

$

646

 

 
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation:
 
Three Months Ended

April 4,

March 30,

2020

2019

Net cash from operating activities - GAAP

$

(393

)

$

(196

)

Less: Capital expenditures

 

(50

)

 

(59

)

Dividends received from TFC

 

-

 

 

(50

)

Plus: Total pension contributions

 

12

 

 

13

 

Proceeds from the sale of property, plant and equipment

 

1

 

 

1

 

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

$

(430

)

$

(291

)

(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  

April 4,

March 30,

2020

2019

Cash flows from operating activities:  
Net income

$

50

 

$

179

 

Depreciation and amortization

 

90

 

 

102

 

Deferred income taxes and income taxes receivable/payable

 

10

 

 

8

 

Pension, net

 

(5

)

 

(14

)

Changes in assets and liabilities:  
Accounts receivable, net

 

47

 

 

(33

)

Inventories

 

(368

)

 

(215

)

Accounts payable

 

(49

)

 

47

 

Captive finance receivables, net

 

-

 

 

(1

)

Other, net

 

(169

)

 

(289

)

Net cash from operating activities

 

(394

)

 

(216

)

Cash flows from investing activities:  
Capital expenditures

 

(50

)

 

(59

)

Finance receivables repaid

 

13

 

 

12

 

Other investing activities, net

 

(6

)

 

5

 

Net cash from investing activities

 

(43

)

 

(42

)

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

 

603

 

 

100

 

Proceeds from long-term debt

 

643

 

 

-

 

Proceeds from borrowings against corporate-owned insurance policies

 

377

 

 

-

 

Principal payments on long-term debt and nonrecourse debt

 

(24

)

 

(19

)

Purchases of Textron common stock

 

(54

)

 

(202

)

Dividends paid

 

(5

)

 

(5

)

Other financing activities, net

 

3

 

 

10

 

Net cash from financing activities

 

1,543

 

 

(116

)

Total cash flows from continuing operations

 

1,106

 

 

(374

)

Total cash flows from discontinued operations

 

(16

)

-

 
Effect of exchange rate changes on cash and equivalents

 

(1

)

 

9

 

Net change in cash and equivalents

 

1,089

 

 

(365

)

Cash and equivalents at beginning of period

 

1,357

 

 

1,107

 

Cash and equivalents at end of period

$

2,446

 

$

742

 

 
TEXTRON INC.
Non-GAAP Financial Measures
(Dollars in millions, except per share amounts)

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