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 |
||||||||||||||||||||||
|
October 3,
|
September 28,
|
|
October 3,
|
September 28,
|
||||||||||||||||||||
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
MANUFACTURING: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Textron Aviation |
|
$ |
795 |
|
|
|
|
$ |
1,201 |
|
|
|
|
|
$ |
2,414 |
|
|
|
|
$ |
3,458 |
|
|
|
Bell |
|
793 |
|
|
|
|
783 |
|
|
|
|
|
2,438 |
|
|
|
|
2,293 |
|
|
|
||||
Textron Systems |
|
302 |
|
|
|
|
311 |
|
|
|
|
|
956 |
|
|
|
|
926 |
|
|
|
||||
| Industrial |
|
832 |
|
|
|
|
950 |
|
|
|
|
|
2,134 |
|
|
|
|
2,871 |
|
|
|
||||
|
|
|
2,722 |
|
|
|
|
3,245 |
|
|
|
|
|
7,942 |
|
|
|
|
9,548 |
|
|
|
||||
| FINANCE |
|
13 |
|
|
|
|
14 |
|
|
|
|
|
42 |
|
|
|
|
47 |
|
|
|
||||
| Total Revenues |
|
$ |
2,735 |
|
|
|
|
$ |
3,259 |
|
|
|
|
|
$ |
7,984 |
|
|
|
|
$ |
9,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| SEGMENT PROFIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| MANUFACTURING: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Textron Aviation |
|
$ |
(29 |
) |
|
|
|
$ |
104 |
|
|
|
|
|
$ |
(92 |
) |
|
|
|
$ |
315 |
|
|
|
| Bell |
|
119 |
|
|
|
|
110 |
|
|
|
|
|
352 |
|
|
|
|
317 |
|
|
|
||||
| Textron Systems |
|
40 |
|
|
|
|
31 |
|
|
|
|
|
103 |
|
|
|
|
108 |
|
|
|
||||
| Industrial |
|
58 |
|
|
|
|
47 |
|
|
|
|
|
56 |
|
|
|
|
173 |
|
|
|
||||
|
|
|
188 |
|
|
|
|
292 |
|
|
|
|
|
419 |
|
|
|
|
913 |
|
|
|
||||
| FINANCE |
|
1 |
|
|
|
|
5 |
|
|
|
|
|
8 |
|
|
|
|
17 |
|
|
|
||||
| Segment Profit |
|
189 |
|
|
|
|
297 |
|
|
|
|
|
427 |
|
|
|
|
930 |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Corporate expenses and other, net |
|
(28 |
) |
|
|
|
(17 |
) |
|
|
|
|
(72 |
) |
|
|
|
(88 |
) |
|
|
||||
| Interest expense, net for Manufacturing group |
|
(38 |
) |
|
|
|
(39 |
) |
|
|
|
|
(109 |
) |
|
|
|
(110 |
) |
|
|
||||
| Special charges (a) |
|
(7 |
) |
|
|
|
— |
|
|
|
|
|
(124 |
) |
|
|
|
— |
|
|
|
||||
| Inventory charge (b) |
|
— |
|
|
|
|
— |
|
|
|
|
|
(55 |
) |
|
|
|
— |
|
|
|
||||
| Income before income taxes |
|
116 |
|
|
|
|
241 |
|
|
|
|
|
67 |
|
|
|
|
732 |
|
|
|
||||
| Income tax expense |
|
(1 |
) |
|
|
|
(21 |
) |
|
|
|
|
6 |
|
|
|
|
(116 |
) |
|
|
||||
| Net Income |
|
$ |
115 |
|
|
|
|
$ |
220 |
|
|
|
|
|
$ |
73 |
|
|
|
|
$ |
616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Earnings Per Share |
|
$ |
0.50 |
|
|
|
|
$ |
0.95 |
|
|
|
|
|
$ |
0.32 |
|
|
|
|
$ |
2.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Diluted average shares outstanding |
|
229,279,000 |
|
|
|
|
231,097,000 |
|
|
|
|
|
228,837,000 |
|
|
|
|
233,689,000 |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Net Income and Diluted Earnings Per Share (EPS) GAAP to Non-GAAP Reconciliation: |
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||
|
|
|
|
|
Diluted EPS |
|
|
|
|
Diluted EPS |
||||||||||||||||
| Net Income - GAAP |
|
$ |
115 |
|
|
|
|
$ |
0.50 |
|
|
|
|
|
$ |
73 |
|
|
|
|
$ |
0.32 |
|
|
|
| Add: Special charges, net of taxes |
|
6 |
|
|
|
|
0.03 |
|
|
|
|
|
103 |
|
|
|
|
0.45 |
|
|
|
||||
| Inventory charge, net of taxes |
|
— |
|
|
|
|
— |
|
|
|
|
|
55 |
|
|
|
|
0.24 |
|
|
|
||||
| Adjusted Net Income - Non-GAAP (c) |
|
$ |
121 |
|
|
|
|
$ |
0.53 |
|
|
|
|
|
$ |
231 |
|
|
|
|
$ |
1.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| (a) |
In June 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 impacts the TRU Simulation + Training (TRU) business within the Textron Systems segment, the Textron Aviation segment and the Textron Specialized Vehicles business within the Industrial segment. In connection with this plan, special charges for the three and nine months ended October 3, 2020, includes severance and related costs of $5 million and $56 million, respectively, asset impairment charges of $2 million and $17 million, respectively, and contract termination and other facility closing costs of $0 million and $12 million, respectively. Special charges for the nine months ended October 3, 2020 also includes 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 pandemic. |
|
| (b) |
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. |
|
| (c) |
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) |
||||||||
|
|
|
|
||||||
|
|
October 3,
|
January 4,
|
||||||
| Assets |
|
|
||||||
| Cash and equivalents |
$ |
2,518 |
|
$ |
1,181 |
|
||
| Accounts receivable, net |
872 |
|
921 |
|
||||
| Inventories |
4,252 |
|
4,069 |
|
||||
| Other current assets |
825 |
|
894 |
|
||||
| Net property, plant and equipment |
2,438 |
|
2,527 |
|
||||
| Goodwill |
2,159 |
|
2,150 |
|
||||
| Other assets |
1,863 |
|
2,312 |
|
||||
| Finance group assets |
934 |
|
964 |
|
||||
| Total Assets |
$ |
15,861 |
|
$ |
15,018 |
|
||
|
|
|
|
||||||
|
|
|
|
||||||
| Liabilities and Shareholders' Equity |
|
|
||||||
| Short-term debt and current portion of long-term debt |
$ |
859 |
|
$ |
561 |
|
||
| Accounts payable |
1,121 |
|
1,378 |
|
||||
| Other current liabilities |
2,011 |
|
1,907 |
|
||||
| Other liabilities |
2,159 |
|
2,288 |
|
||||
| Long-term debt |
3,199 |
|
2,563 |
|
||||
| Finance group liabilities |
771 |
|
803 |
|
||||
| Total Liabilities |
10,120 |
|
9,500 |
|
||||
|
|
|
|
||||||
| Total Shareholders' Equity |
5,741 |
|
5,518 |
|
||||
| Total Liabilities and Shareholders' Equity |
$ |
15,861 |
|
$ |
15,018 |
|
||
| TEXTRON INC. MANUFACTURING GROUP Condensed Schedule of Cash Flows (In millions) (Unaudited) |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
||||||||||||||||||
|
|
|
October 3,
|
|
|
|
September 28,
|
|
|
|
October 3,
|
|
|
September 28,
|
|
|||||||||||
| Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Net income |
|
$ |
114 |
|
|
|
|
$ |
216 |
|
|
|
|
|
$ |
67 |
|
|
|
|
$ |
603 |
|
|
|
| Depreciation and amortization |
|
93 |
|
|
|
|
98 |
|
|
|
|
|
279 |
|
|
|
|
297 |
|
|
|
||||
| Deferred income taxes and income taxes receivable/payable |
|
11 |
|
|
|
|
(32 |
) |
|
|
|
|
(29 |
) |
|
|
|
11 |
|
|
|
||||
| Pension, net |
|
(3 |
) |
|
|
|
(15 |
) |
|
|
|
|
(11 |
) |
|
|
|
(44 |
) |
|
|
||||
| Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Accounts receivable, net |
|
(98 |
) |
|
|
|
(43 |
) |
|
|
|
|
59 |
|
|
|
|
(7 |
) |
|
|
||||
| Inventories |
|
(14 |
) |
|
|
|
(147 |
) |
|
|
|
|
(258 |
) |
|
|
|
(679 |
) |
|
|
||||
| Accounts payable |
|
133 |
|
|
|
|
2 |
|
|
|
|
|
(267 |
) |
|
|
|
134 |
|
|
|
||||
| Dividends received from Finance group |
|
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
50 |
|
|
|
||||
| Other, net |
|
132 |
|
|
|
|
159 |
|
|
|
|
|
380 |
|
|
|
|
(160 |
) |
|
|
||||
| Net cash from operating activities |
|
368 |
|
|
|
|
238 |
|
|
|
|
|
220 |
|
|
|
|
205 |
|
|
|
||||
| Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Capital expenditures |
|
(55 |
) |
|
|
|
(81 |
) |
|
|
|
|
(151 |
) |
|
|
|
(216 |
) |
|
|
||||
| Proceeds from an insurance recovery and sale of property, plant and equipment |
|
20 |
|
|
|
|
2 |
|
|
|
|
|
25 |
|
|
|
|
6 |
|
|
|
||||
| Net proceeds from corporate-owned life insurance policies |
|
4 |
|
|
|
|
— |
|
|
|
|
|
21 |
|
|
|
|
4 |
|
|
|
||||
| Other investing activities, net |
|
— |
|
|
|
— |
|
|
|
|
|
(11 |
) |
|
|
|
— |
|
|
|
|||||
| Net cash from investing activities |
|
(31 |
) |
|
|
|
(79 |
) |
|
|
|
|
(116 |
) |
|
|
|
(206 |
) |
|
|
||||
| Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Increase (decrease) in short-term debt |
|
(501 |
) |
|
|
|
118 |
|
|
|
|
|
(2 |
) |
|
|
|
118 |
|
|
|
||||
| Net proceeds from long-term debt |
|
495 |
|
|
|
|
— |
|
|
|
|
|
1,137 |
|
|
|
|
297 |
|
|
|
||||
| Net borrowings against corporate-owned insurance policies |
|
— |
|
|
|
|
— |
|
|
|
|
|
362 |
|
|
|
|
— |
|
|
|
||||
| Principal payments on long-term debt and nonrecourse debt |
|
(1 |
) |
|
|
|
— |
|
|
|
|
|
(195 |
) |
|
|
|
(1 |
) |
|
|
||||
| Purchases of Textron common stock |
|
— |
|
|
|
|
(109 |
) |
|
|
|
|
(54 |
) |
|
|
|
(470 |
) |
|
|
||||
| Dividends paid |
|
(5 |
) |
|
|
|
— |
|
|
|
|
|
(14 |
) |
|
|
|
(9 |
) |
|
|
||||
| Other financing activities, net |
|
10 |
|
|
|
|
(1 |
) |
|
|
|
|
2 |
|
|
|
|
18 |
|
|
|
||||
| Net cash from financing activities |
|
(2 |
) |
|
|
|
8 |
|
|
|
|
|
1,236 |
|
|
|
|
(47 |
) |
|
|
||||
| Total cash flows from continuing operations |
|
335 |
|
|
|
|
167 |
|
|
|
|
|
1,340 |
|
|
|
|
(48 |
) |
|
|
||||
| Total cash flows from discontinued operations |
|
(1 |
) |
|
|
|
(1 |
) |
|
|
|
|
(1 |
) |
|
|
|
(2 |
) |
|
|
||||
| Effect of exchange rate changes on cash and equivalents |
|
8 |
|
|
|
|
(10 |
) |
|
|
|
|
(2 |
) |
|
|
|
(6 |
) |
|
|
||||
| Net Change in Cash and Equivalents |
|
342 |
|
|
|
|
156 |
|
|
|
|
|
1,337 |
|
|
|
|
(56 |
) |
|
|
||||
| Cash and Equivalents at Beginning of Period |
|
2,176 |
|
|
|
|
775 |
|
|
|
|
|
1,181 |
|
|
|
|
987 |
|
|
|
||||
| Cash and Equivalents at End of Period |
|
$ |
2,518 |
|
|
|
|
$ |
931 |
|
|
|
|
|
$ |
2,518 |
|
|
|
|
$ |
931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation: |
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|||||||||||||||||||
|
|
|
October 3,
|
|
|
September 28,
|
|
|
|
October 3,
|
|
|
September 28,
|
|
||||||||||||
| Net Cash from Operating Activities - GAAP |
|
$ |
368 |
|
|
|
|
$ |
238 |
|
|
|
|
|
$ |
220 |
|
|
|
|
$ |
205 |
|
|
|
| Less: Capital expenditures |
|
(55 |
) |
|
|
|
(81 |
) |
|
|
|
|
(151 |
) |
|
|
|
(216 |
) |
|
|
||||
| Dividends received from TFC |
|
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
(50 |
) |
|
|
||||
| Plus: Total pension contribution |
|
11 |
|
|
|
|
11 |
|
|
|
|
|
35 |
|
|
|
|
36 |
|
|
|
||||
| Proceeds from an insurance recovery and sale of property, plant and equipment |
|
20 |
|
|
|
|
2 |
|
|
|
|
|
25 |
|
|
|
|
6 |
|
|
|
||||
| Taxes paid on gain on business disposition |
|
— |
|
|
|
|
11 |
|
|
|
|
|
— |
|
|
|
|
11 |
|
|
|
||||
| Manufacturing Cash Flow Before Pension Contributions - Non-GAAP (a) |
|
$ |
344 |
|
|
|
|
$ |
181 |
|
|
|
|
|
$ |
129 |
|
|
|
|
$ |
(8 |
) |
|
|
| (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) |
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|
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||||||||||||||||||
|
|
|
October 3,
|
|
|
September 28,
|
|
|
|
October 3,
|
|
|
September 28,
|
|
||||||||||||
| Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Net income |
|
$ |
115 |
|
|
|
|
$ |
220 |
|
|
|
|
|
$ |
73 |
|
|
|
|
$ |
616 |
|
|
|
| Depreciation and amortization |
|
95 |
|
|
|
|
100 |
|
|
|
|
|
283 |
|
|
|
|
302 |
|
|
|
||||
| Deferred income taxes and income taxes receivable/payable |
|
3 |
|
|
|
|
(31 |
) |
|
|
|
|
(35 |
) |
|
|
|
15 |
|
|
|
||||
| Pension, net |
|
(3 |
) |
|
|
|
(15 |
) |
|
|
|
|
(11 |
) |
|
|
|
(44 |
) |
|
|
||||
| Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Accounts receivable, net |
|
(98 |
) |
|
|
|
(43 |
) |
|
|
|
|
59 |
|
|
|
|
(7 |
) |
|
|
||||
| Inventories |
|
(14 |
) |
|
|
|
(147 |
) |
|
|
|
|
(258 |
) |
|
|
|
(652 |
) |
|
|
||||
| Accounts payable |
|
133 |
|
|
|
|
2 |
|
|
|
|
|
(267 |
) |
|
|
|
134 |
|
|
|
||||
| Captive finance receivables, net |
|
(11 |
) |
|
|
|
41 |
|
|
|
|
|
(25 |
) |
|
|
|
22 |
|
|
|
||||
| Other, net |
|
132 |
|
|
|
|
158 |
|
|
|
|
|
381 |
|
|
|
|
(161 |
) |
|
|
||||
| Net cash from operating activities |
|
352 |
|
|
|
|
285 |
|
|
|
|
|
200 |
|
|
|
|
225 |
|
|
|
||||
| Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Capital expenditures |
|
(55 |
) |
|
|
|
(81 |
) |
|
|
|
|
(151 |
) |
|
|
|
(216 |
) |
|
|
||||
| Proceeds from an insurance recovery and sale of property, plant and equipment |
|
20 |
|
|
|
|
2 |
|
|
|
|
|
25 |
|
|
|
|
6 |
|
|
|
||||
| Finance receivables repaid |
|
1 |
|
|
|
|
— |
|
|
|
|
|
21 |
|
|
|
|
20 |
|
|
|
||||
| Net proceeds from corporate-owned life insurance policies |
|
4 |
|
|
|
|
— |
|
|
|
|
|
21 |
|
|
|
|
4 |
|
|
|
||||
| Other investing activities, net |
|
2 |
|
|
|
|
— |
|
|
|
|
|
(8 |
) |
|
|
|
3 |
|
|
|
||||
| Net cash from investing activities |
|
(28 |
) |
|
|
|
(79 |
) |
|
|
|
|
(92 |
) |
|
|
|
(183 |
) |
|
|
||||
| Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Increase (decrease) in short-term debt |
|
(501 |
) |
|
|
|
118 |
|
|
|
|
|
(2 |
) |
|
|
|
118 |
|
|
|
||||
| Net proceeds from long-term debt |
|
495 |
|
|
|
|
— |
|
|
|
|
|
1,137 |
|
|
|
|
297 |
|
|
|
||||
| Net borrowings against corporate-owned insurance policies |
|
— |
|
|
|
|
— |
|
|
|
|
|
362 |
|
|
|
|
— |
|
|
|
||||
| Principal payments on long-term debt and nonrecourse debt |
|
(6 |
) |
|
|
|
(7 |
) |
|
|
|
|
(235 |
) |
|
|
|
(42 |
) |
|
|
||||
| Purchases of Textron common stock |
|
— |
|
|
|
|
(109 |
) |
|
|
|
|
(54 |
) |
|
|
|
(470 |
) |
|
|
||||
| Dividends paid |
|
(5 |
) |
|
|
|
— |
|
|
|
|
|
(14 |
) |
|
|
|
(9 |
) |
|
|
||||
| Other financing activities, net |
|
10 |
|
|
|
|
(1 |
) |
|
|
|
|
14 |
|
|
|
|
18 |
|
|
|
||||
| Net cash from financing activities |
|
(7 |
) |
|
|
|
1 |
|
|
|
|
|
1,208 |
|
|
|
|
(88 |
) |
|
|
||||
| Total cash flows from continuing operations |
|
317 |
|
|
|
|
207 |
|
|
|
|
|
1,316 |
|
|
|
|
(46 |
) |
|
|
||||
| Total cash flows from discontinued operations |
|
(1 |
) |
|
|
|
(1 |
) |
|
|
|
|
(1 |
) |
|
|
|
(2 |
) |
|
|
||||
| Effect of exchange rate changes on cash and equivalents |
|
8 |
|
|
|
|
(10 |
) |
|
|
|
|
(2 |
) |
|
|
|
(6 |
) |
|
|
||||
| Net Change in Cash and Equivalents |
|
324 |
|
|
|
|
196 |
|
|
|
|
|
1,313 |
|
|
|
|
(54 |
) |
|
|
||||
| Cash and Equivalents at Beginning of Period |
|
2,346 |
|
|
|
|
857 |
|
|
|
|
|
1,357 |
|
|
|
|
1,107 |
|
|
|
||||
| Cash and Equivalents at End of Period |
|
$ |
2,670 |
|
|
|
|
$ |
1,053 |
|
|
|
|
|
$ |
2,670 |
|
|
|
|
$ |
1,053 |
|
|
|
TEXTRON INC.
