(b) On December 22, 2017, the U.S. Government enacted tax reform legislation known as the Tax Cuts and Jobs Act (the "Act"). Income tax expense for the three and twelve months ended December 30, 2017 includes a $266 million one-time charge to reflect our provisional estimate of the net impact of the Act. The charge is primarily related to remeasurement of U.S. federal net deferred tax assets due to the lower enacted tax rate and the Act’s transition tax on previously unremitted earnings of non-U.S. subsidiaries. Textron is continuing its analysis of this legislation and this provisional estimate is subject to change.
(c) The twelve months ended December 31, 2016 include an income tax benefit of $319 million, inclusive of interest, of which $206 million is attributable to continuing operations and $113 million is attributable to discontinued operations. This benefit is a result of the final settlement with the Internal Revenue Service Office of Appeals for our 1998 to 2008 tax years.
(d) For the three months ended December 30, 2017, the diluted average shares used to calculate EPS on a GAAP basis excludes potential common shares (stock options and restricted stock units), due to their antidilutive effect resulting from the net loss. For the twelve months ended December 30, 2017, and the three and twelve months ended December 31, 2016, fully dilutive shares were used to calculate EPS.
(e) Adjusted income from continuing operations and adjusted diluted earnings per share are non-GAAP financial measures as defined in "Non-GAAP Financial Measures" attached to this release. The non-GAAP per share information for the three months ended December 30, 2017 is calculated using diluted average shares outstanding of 266,099,000.
Textron Inc. | |||||||||
Condensed Consolidated Balance Sheets | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
December 30,
|
December 31,
|
||||||||
Assets | |||||||||
Cash and equivalents | $ | 1,079 | $ | 1,137 | |||||
Accounts receivable, net | 1,363 | 1,064 | |||||||
Inventories | 4,150 | 4,464 | |||||||
Other current assets | 435 | 388 | |||||||
Net property, plant and equipment | 2,721 | 2,581 | |||||||
Goodwill | 2,364 | 2,113 | |||||||
Other assets | 2,059 | 2,331 | |||||||
Finance group assets | 1,169 | 1,280 | |||||||
Total Assets | $ | 15,340 | $ | 15,358 | |||||
Liabilities and Shareholders' Equity | |||||||||
Short-term debt and current portion of long-term debt | $ | 14 | $ | 363 | |||||
Current liabilities | 3,646 | 3,530 | |||||||
Other liabilities | 2,006 | 2,354 | |||||||
Long-term debt | 3,074 | 2,414 | |||||||
Finance group liabilities | 953 | 1,123 | |||||||
Total Liabilities | 9,693 | 9,784 | |||||||
Total Shareholders' Equity | 5,647 | 5,574 | |||||||
Total Liabilities and Shareholders' Equity | $ | 15,340 | $ | 15,358 | |||||
TEXTRON INC. | |||||||||||||||||||||
MANUFACTURING GROUP | |||||||||||||||||||||
Condensed Schedule of Cash Flows | |||||||||||||||||||||
(In millions) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
December 30, | December 31, | December 30, | December 31, | ||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Income (loss) from continuing operations | $ | (152 | ) | $ | 219 | $ | 247 | $ | 832 | ||||||||||||
Depreciation and amortization | 113 | 115 | 435 | 437 | |||||||||||||||||
Changes in working capital | 364 | 468 | 120 | (399 | ) | ||||||||||||||||
Changes in other assets and liabilities and non-cash items | 275 | 49 | 145 | 89 | |||||||||||||||||
Dividends received from TFC | - | - | - | 29 | |||||||||||||||||
Net cash from operating activities of continuing operations | 600 | 851 | 947 | 988 | |||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Capital expenditures | (147 | ) | (140 | ) | (423 | ) | (446 | ) | |||||||||||||
Net cash used in acquisitions | (1 | ) | (7 | ) | (331 | ) | (186 | ) | |||||||||||||
Proceeds from the sale of property, plant and equipment | 1 | 2 | 7 | 10 | |||||||||||||||||
Other investing activities, net | 1 | 4 | 2 | 1 | |||||||||||||||||
Net cash from investing activities | (146 | ) | (141 | ) | (745 | ) | (621 | ) | |||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Proceeds from long-term debt | 347 | - | 992 | 345 | |||||||||||||||||
Principal payments on long-term debt | (701 | ) | (1 | ) | (704 | ) | (254 | ) | |||||||||||||
Increase (decrease) in short-term debt | - | (113 | ) | 2 | (3 | ) | |||||||||||||||
Purchases of Textron common stock | (131 | ) | (26 | ) | (582 | ) | (241 | ) | |||||||||||||
Other financing activities, net | 5 | 3 | 26 | 7 | |||||||||||||||||
Net cash from financing activities | (480 | ) | (137 | ) | (266 | ) | (146 | ) | |||||||||||||
Total cash flows from continuing operations | (26 | ) | 573 | (64 | ) | 221 | |||||||||||||||
Total cash flows from discontinued operations | (3 | ) | - | (27 | ) | (2 | ) | ||||||||||||||
Effect of exchange rate changes on cash and equivalents | 4 | (25 | ) | 33 | (28 | ) | |||||||||||||||
Net change in cash and equivalents | (25 | ) | 548 | (58 | ) | 191 | |||||||||||||||
Cash and equivalents at beginning of period | 1,104 | 589 | 1,137 | 946 | |||||||||||||||||
Cash and equivalents at end of period | $ | 1,079 | $ | 1,137 | $ | 1,079 | $ | 1,137 | |||||||||||||
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation: |
|||||||||||||||||||||
|
|||||||||||||||||||||
Net cash from operating activities of continuing operations - GAAP |
$ |
600 |
$ |
851 |
$ |
947 |
$ |
988 |
|||||||||||||
Less: Capital expenditures |
(147 |
) |
|
(140 |
) |
(423 |
) |
(446 |
) |
||||||||||||
Dividends received from TFC |
- |
- |
- |
(29 |
) |
||||||||||||||||
Plus: Total pension contributions |
20 |
14 |
358 |
50 |
|||||||||||||||||
Proceeds from the sale of property, plant and equipment |
1 |
2 |
7 |
10 |
|||||||||||||||||
Manufacturing cash flow before pension contributions- Non-GAAP (a) |
$ |
474 |
$ |
727 |
$ |
889 |
$ |
573 |
|||||||||||||