Textron Reports Second Quarter 2019 Results; Raises Full-Year EPS Outlook

TEXTRON INC.
Revenues by Segment and Reconciliation of Segment Profit to Net Income

(Dollars in millions, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018
REVENUES
MANUFACTURING:
Textron Aviation

$

1,123

 

$

1,276

 

$

2,257

 

$

2,286

 

Bell

 

771

 

 

831

 

 

1,510

 

 

1,583

 

Textron Systems

 

308

 

 

380

 

 

615

 

 

767

 

Industrial

 

1,009

 

 

1,222

 

 

1,921

 

 

2,353

 

 

3,211

 

 

3,709

 

 

6,303

 

 

6,989

 

 
FINANCE

 

16

 

 

17

 

 

33

 

 

33

 

Total revenues

$

3,227

 

$

3,726

 

$

6,336

 

$

7,022

 

 
SEGMENT PROFIT
MANUFACTURING:
Textron Aviation

$

105

 

$

104

 

$

211

 

$

176

 

Bell

 

103

 

 

117

 

 

207

 

 

204

 

Textron Systems

 

49

 

 

40

 

 

77

 

 

90

 

Industrial

 

76

 

 

80

 

 

126

 

 

144

 

 

333

 

 

341

 

 

621

 

 

614

 

 
FINANCE

 

6

 

 

5

 

 

12

 

 

11

 

Segment Profit

 

339

 

 

346

 

 

633

 

 

625

 

 
Corporate expenses and other, net

 

(24

)

 

(51

)

 

(71

)

 

(78

)

Interest expense, net for Manufacturing group

 

(36

)

 

(35

)

 

(71

)

 

(69

)

 
Income before income taxes

 

279

 

 

260

 

 

491

 

 

478

 

Income tax expense

 

(62

)

 

(36

)

 

(95

)

 

(65

)

 
Net income

$

217

 

$

224

 

$

396

 

$

413

 

 
Earnings per share:
Net income

$

0.93

 

$

0.87

 

$

1.69

 

$

1.59

 

 
Diluted average shares outstanding

 

233,545,000

 

 

257,177,000

 

 

234,993,000

 

 

260,462,000

 

 
 
Textron Inc.
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)
 
 
June 29,
2019
December 29,
2018
Assets
Cash and equivalents

$

 

775

$

 

987

Accounts receivable, net

989

1,024

Inventories

4,311

3,818

Other current assets

839

785

Net property, plant and equipment

2,517

2,615

Goodwill

2,147

2,218

Other assets

2,255

1,800

Finance group assets

963

1,017

Total Assets

$

 

14,796

$

 

14,264

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

$

 

457

$

 

258

Current liabilities

3,122

3,248

Other liabilities

2,157

1,932

Long-term debt

2,910

2,808

Finance group liabilities

814

826

Total Liabilities

9,460

9,072

 
Total Shareholders' Equity

5,336

5,192

Total Liabilities and Shareholders' Equity

$

 

14,796

$

 

14,264

 
TEXTRON INC.
MANUFACTURING GROUP
Condensed Schedule of Cash Flows
(In millions)
(Unaudited)
 
 
Three Months Ended Six Months Ended
June 29, June 30, June 29, June 30,

2019

2018

2019

2018

Cash flows from operating activities:
Net income

$

212

 

$

219

 

$

387

 

$

398

 

Depreciation and amortization

 

99

 

 

109

 

 

199

 

 

212

 

Changes in working capital

 

(162

)

 

98

 

 

(716

)

 

(278

)

Changes in other assets and liabilities and non-cash items

 

14

 

 

42

 

 

47

 

 

33

 

Dividends received from TFC

 

-

 

 

-

 

 

50

 

 

50

 

Net cash from operating activities of continuing operations

 

163

 

 

468

 

 

(33

)

 

415

 

Cash flows from investing activities:
Capital expenditures

 

(76

)

 

(82

)

 

(135

)

 

(159

)

Net proceeds from corporate-owned life insurance policies

 

2

 

 

40

 

 

4

 

 

98

 

Proceeds from the sale of property, plant and equipment

 

3

 

 

1

 

 

4

 

 

10

 

Net cash from investing activities

 

(71

)

 

(41

)

 

(127

)

 

(51

)

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

 

(100

)

 

(2

)

 

-

 

 

-

 

Net proceeds from issuance of long-term debt

 

297

 

 

-

 

 

297

 

 

-

 

Purchases of Textron common stock

 

(159

)

 

(571

)

 

(361

)

 

(915

)

Other financing activities, net

 

5

 

 

30

 

 

9

 

 

33

 

Net cash from financing activities

 

43

 

 

(543

)

 

(55

)

 

(882

)

Total cash flows from continuing operations

 

135

 

 

(116

)

 

(215

)

 

(518

)

Total cash flows from discontinued operations

 

(1

)

 

(1

)

 

(1

)

 

(1

)

Effect of exchange rate changes on cash and equivalents

 

(5

)

 

(17

)

 

4

 

 

(6

)

Net change in cash and equivalents

 

129

 

 

(134

)

 

(212

)

 

(525

)

Cash and equivalents at beginning of period

 

646

 

 

688

 

 

987

 

 

1,079

 

Cash and equivalents at end of period

$

775

 

$

554

 

$

775

 

$

554

 

 
Manufacturing Cash Flow Before Pension Contributions GAAP to Non-GAAP Reconciliation:
 
Three Months Ended Six Months Ended
June 29, June 30, June 29, June 30,

2019

2018

2019

2018

Net cash from operating activities of continuing operations - GAAP

$

163

 

$

468

 

 

(33

)

$

415

 

Less: Capital expenditures

 

(76

)

 

(82

)

 

(135

)

 

(159

)

Dividends received from TFC

 

-

 

 

-

 

 

(50

)

 

(50

)

Plus: Total pension contributions

 

12

 

 

12

 

 

25

 

 

25

 

Proceeds from the sale of property, plant and equipment

 

3

 

 

1

 

 

4

 

 

10

 

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

$

102

 

$

399

 

 

(189

)

$

241

 

 
(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 Six Months Ended
June 29, June 30, June 29, June 30,

2019

2018

2019

2018

Cash flows from operating activities:
Net income

$

217

 

$

224

 

$

396

 

$

413

 

Depreciation and amortization

 

100

 

 

111

 

 

202

 

 

216

 

Changes in working capital

 

(174

)

 

105

 

 

(703

)

 

(264

)

Changes in other assets and liabilities and non-cash items

 

13

 

 

43

 

 

45

 

 

33

 

Net cash from operating activities of continuing operations

 

156

 

 

483

 

 

(60

)

 

398

 

Cash flows from investing activities:
Capital expenditures

 

(76

)

 

(82

)

 

(135

)

 

(159

)

Net proceeds from corporate-owned life insurance policies

 

2

 

 

40

 

 

4

 

 

98

 

Finance receivables repaid

 

8

 

 

9

 

 

20

 

 

25

 

Other investing activities, net

 

4

 

 

21

 

 

7

 

 

30

 

Net cash from investing activities

 

(62

)

 

(12

)

 

(104

)

 

(6

)

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

 

(100

)

 

(2

)

 

-

 

 

-

 

Net proceeds from issuance of long-term debt

 

297

 

 

-

 

 

297

 

 

-

 

Principal payments on long-term debt and nonrecourse debt

 

(16

)

 

(15

)

 

(35

)

 

(34

)

Purchases of Textron common stock

 

(159

)

 

(571

)

 

(361

)

 

(915

)

Other financing activities, net

 

5

 

 

30

 

 

10

 

 

33

 

Net cash from financing activities

 

27

 

 

(558

)

 

(89

)

 

(916

)

Total cash flows from continuing operations

 

121

 

 

(87

)

 

(253

)

 

(524

)

Total cash flows from discontinued operations

 

(1

)

 

(1

)

 

(1

)

 

(1

)

Effect of exchange rate changes on cash and equivalents

 

(5

)

 

(17

)

 

4

 

 

(6

)

Net change in cash and equivalents

 

115

 

 

(105

)

 

(250

)

 

(531

)

Cash and equivalents at beginning of period

 

742

 

 

836

 

 

1,107

 

 

1,262

 

Cash and equivalents at end of period

$

857

 

$

731

 

$

857

 

$

731

 

 

TEXTRON INC.

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