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

We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures. These non-GAAP financial measures exclude certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures may be useful for period-over-period comparisons of underlying business trends and our ongoing business performance, however, they should be used in conjunction with GAAP measures. Our non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define similarly named measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. We utilize the following definitions for the non-GAAP financial measures included in this release and have provided a reconciliation of the GAAP to non-GAAP amounts for each measure:

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Adjusted net income and adjusted diluted earnings per share exclude special charges, net of tax. We consider items recorded in special charges, such as enterprise-wide restructuring, certain asset impairment charges, and acquisition-related restructuring, integration and transaction costs, to be of a non-recurring nature that is not indicative of ongoing operations. The gain on disposition, net of tax is also excluded as it relates to a disposition in connection with our enterprise-wide restructuring plan, which resulted in the sale of the TRU Simulation + Training Canada Inc. business.

	Three Months Ended April 3, 2021
						Diluted EPS
Net income - GAAP		$	171				$	0.75
Add: Special charges, net of tax			4					0.02
Less: Gain on business disposition, net of tax			(15	)				(0.07	)
Adjusted net income - Non-GAAP		$	160				$	0.70

Manufacturing Cash Flow Before Pension Contributions

Manufacturing cash flow before pension contributions adjusts net cash from operating activities (GAAP) for the following:

• Deducts capital expenditures and includes proceeds from insurance recoveries and the sale of property, plant and equipment to arrive at the net capital investment required to support ongoing manufacturing operations;
• Excludes dividends received from Textron Financial Corporation (TFC) and capital contributions to TFC provided under the Support Agreement and debt agreements as these cash flows are not representative of manufacturing operations;
• Adds back pension contributions as we consider our pension obligations to be debt-like liabilities. Additionally, these contributions can fluctuate significantly from period to period and we believe that they are not representative of cash used by our manufacturing operations during the period.

While we believe this measure provides a focus on cash generated from manufacturing operations, before pension contributions, and may be used as an additional relevant measure of liquidity, it does not necessarily provide the amount available for discretionary expenditures since we have certain non-discretionary obligations that are not deducted from the measure.

		Three Months Ended
	April 2, 2022					April 3, 2021
Net cash from operating activities - GAAP		$	225				$	107
Less: Capital expenditures			(48	)				(53	)
Plus: Total pension contributions			14					17
Proceeds from sale of property, plant and equipment			18					—
Manufacturing cash flow before pension contributions - Non-GAAP		$	209				$	71

	2022 Outlook
Net cash from operating activities - GAAP		$	1,057		—		$	1,157
Less: Capital expenditures					(425)
Add: Total pension contributions					50
Proceeds from sale of property, plant and equipment					18
Manufacturing cash flow before pension contributions - Non-GAAP		$	700		—		$	800

« Previous Page 1 | 2 | 3 | 4  Next Page »