Textron Reports Second Quarter 2017 Results; Reaffirms 2017 Financial Outlook

In addition, the call will be recorded and available for playback beginning at 10:30 a.m. (Eastern) on Wednesday, July 19, 2017 by dialing (320) 365-3844; Access Code: 408727.

A package containing key data that will be covered on today’s call can be found in the Investor Relations section of the company’s website at www.textron.com.

About Textron Inc.

Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell Helicopter, Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, Greenlee, Textron Off Road, Arctic Cat, Textron Systems, and TRU Simulation + Training. For more information visit: www.textron.com.

Forward-looking Information

Certain statements in this release and other oral and written statements made by us from time to time are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which may describe strategies, goals, outlook or other non-historical matters, or project revenues, income, returns or other financial measures, often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “guidance,” “project,” “target,” “potential,” “will,” “should,” “could,” “likely” or “may” and similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. In addition to those factors described in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under “Risk Factors”, among the factors that could cause actual results to differ materially from past and projected future results are the following: Interruptions in the U.S. Government’s ability to fund its activities and/or pay its obligations; changing priorities or reductions in the U.S. Government defense budget, including those related to military operations in foreign countries; our ability to perform as anticipated and to control costs under contracts with the U.S. Government; the U.S. Government’s ability to unilaterally modify or terminate its contracts with us for the U.S. Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, or, under certain circumstances, to withhold payment or suspend or debar us as a contractor eligible to receive future contract awards; changes in foreign military funding priorities or budget constraints and determinations, or changes in government regulations or policies on the export and import of military and commercial products; volatility in the global economy or changes in worldwide political conditions that adversely impact demand for our products; volatility in interest rates or foreign exchange rates; risks related to our international business, including establishing and maintaining facilities in locations around the world and relying on joint venture partners, subcontractors, suppliers, representatives, consultants and other business partners in connection with international business, including in emerging market countries; our Finance segment’s ability to maintain portfolio credit quality or to realize full value of receivables; performance issues with key suppliers or subcontractors; legislative or regulatory actions, both domestic and foreign, impacting our operations or demand for our products; our ability to control costs and successfully implement various cost-reduction activities; the efficacy of research and development investments to develop new products or unanticipated expenses in connection with the launching of significant new products or programs; the timing of our new product launches or certifications of our new aircraft products; our ability to keep pace with our competitors in the introduction of new products and upgrades with features and technologies desired by our customers; pension plan assumptions and future contributions; demand softness or volatility in the markets in which we do business; cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or, operational disruption; difficulty or unanticipated expenses in connection with integrating acquired businesses; and the risk that acquisitions do not perform as planned, including, for example, the risk that acquired businesses will not achieve revenue and profit projections.

 
TEXTRON INC.

Revenues by Segment and Reconciliation of Segment Profit to Net Income

Three and Six Months Ended July 1, 2017 and July 2, 2016

(Dollars in millions, except per share amounts)

(Unaudited)

               
Three Months Ended

Six Months Ended

July 1, 2017

      July 2, 2016

July 1, 2017

      July 2, 2016

REVENUES

           
MANUFACTURING:
Textron Aviation $ 1,171 $ 1,196 $ 2,141 $ 2,287
Bell 825 804 1,522 1,618
Textron Systems 477 487 893 811
Industrial   1,113     1,004     2,105     1,956  
3,586 3,491 6,661 6,672
 
FINANCE   18     20     36     40  
Total revenues $ 3,604   $ 3,511   $ 6,697   $ 6,712  
 

SEGMENT PROFIT

MANUFACTURING:
Textron Aviation $ 54 $ 81 $ 90 $ 154
Bell 112 81 195 163
Textron Systems 42 60 62 89
Industrial   82     99     158     190  
290 321 505 596
 
FINANCE   5     7     9     12  
Segment Profit 295 328 514 608
 
Corporate expenses and other, net (31 ) (31 ) (58 ) (63 )
Interest expense, net for Manufacturing group (36 ) (37 ) (70 ) (70 )
Special charges (a)   (13 )   -     (50 )   -  
 
Income from continuing operations before income taxes 215 260 336 475
Income tax expense   (62 )   (82 )   (83 )   (146 )
 
Income from continuing operations 153 178 253 329
Discontinued operations, net of income taxes   -     (1 )   1     (2 )
Net income $ 153   $ 177   $ 254   $ 327  
 
Earnings per share:
Income from continuing operations $ 0.57 $ 0.66 $ 0.94 $ 1.21
Discontinued operations, net of income taxes   -     (0.01 )   -     (0.01 )
Net income $ 0.57   $ 0.65   $ 0.94   $ 1.20  
 
Diluted average shares outstanding   269,299,000           271,316,000     271,076,000           272,172,000  
 

Income from Continuing Operations and Diluted Earnings Per Share (EPS) GAAP to Non-GAAP Reconciliation:

                   
Three Months Ended

July 1, 2017

Six Months Ended

July 1, 2017

        Diluted EPS         Diluted EPS
Income from continuing operations - GAAP $ 153 $ 0.57 $ 253 $ 0.94
Restructuring, net of taxes of $4 million and $9 million, respectively 8 0.03 18 0.07
Arctic Cat restructuring, integration and transaction costs,

net of taxes of $0 million and $7 million, respectively

  1     -     16     0.05  
Total Special charges, net of income taxes   9     0.03     34     0.12  

Adjusted income from continuing operations - Non-GAAP (b)

$ 162   $ 0.60   $ 287   $ 1.06  
 

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