Textron Reports Second Quarter 2024 Results

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,
2024

July 1,
2023

 

June 29,
2024

July 1,
2023

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

MANUFACTURING:

 

 

 

 

 

 

 

 

 

 

 

 

 

Textron Aviation

 

$

1,475

 

 

 

$

1,362

 

 

 

 

$

2,663

 

 

 

$

2,511

 

 

Bell

 

 

794

 

 

 

 

701

 

 

 

 

 

1,521

 

 

 

 

1,322

 

 

Textron Systems

 

 

323

 

 

 

 

306

 

 

 

 

 

629

 

 

 

 

612

 

 

Industrial

 

 

914

 

 

 

 

1,026

 

 

 

 

 

1,806

 

 

 

 

1,958

 

 

Textron eAviation

 

 

9

 

 

 

 

11

 

 

 

 

 

16

 

 

 

 

15

 

 

 

 

 

3,515

 

 

 

 

3,406

 

 

 

 

 

6,635

 

 

 

 

6,418

 

 

FINANCE

 

 

12

 

 

 

 

18

 

 

 

 

 

27

 

 

 

 

30

 

 

Total revenues

 

$

3,527

 

 

 

$

3,424

 

 

 

 

$

6,662

 

 

 

$

6,448

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEGMENT PROFIT

 

 

 

 

 

 

 

 

 

 

 

 

 

MANUFACTURING:

 

 

 

 

 

 

 

 

 

 

 

 

 

Textron Aviation

 

$

195

 

 

 

$

171

 

 

 

 

$

338

 

 

 

$

296

 

 

Bell

 

 

82

 

 

 

 

65

 

 

 

 

 

162

 

 

 

 

125

 

 

Textron Systems

 

 

35

 

 

 

 

37

 

 

 

 

 

73

 

 

 

 

71

 

 

Industrial

 

 

42

 

 

 

 

79

 

 

 

 

 

71

 

 

 

 

120

 

 

Textron eAviation

 

 

(18

)

 

 

 

(12

)

 

 

 

 

(36

)

 

 

 

(21

)

 

 

 

 

336

 

 

 

 

340

 

 

 

 

 

608

 

 

 

 

591

 

 

FINANCE

 

 

7

 

 

 

 

12

 

 

 

 

 

25

 

 

 

 

20

 

 

Segment profit (a)

 

 

343

 

 

 

 

352

 

 

 

 

 

633

 

 

 

 

611

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate expenses and other, net

 

 

(17

)

 

 

 

(21

)

 

 

 

 

(79

)

 

 

 

(60

)

 

Interest expense, net for Manufacturing group

 

 

(20

)

 

 

 

(16

)

 

 

 

 

(35

)

 

 

 

(33

)

 

LIFO inventory provision

 

 

(27

)

 

 

 

(35

)

 

 

 

 

(47

)

 

 

 

(60

)

 

Intangible asset amortization

 

 

(9

)

 

 

 

(10

)

 

 

 

 

(17

)

 

 

 

(20

)

 

Special charges (b)

 

 

(13

)

 

 

 

—

 

 

 

 

 

(27

)

 

 

 

—

 

 

Non-service components of pension and postretirement income, net

 

 

66

 

 

 

 

59

 

 

 

 

 

132

 

 

 

 

118

 

 

Income from continuing operations before income taxes

 

 

323

 

 

 

 

329

 

 

 

 

 

560

 

 

 

 

556

 

 

Income tax expense

 

 

(63

)

 

 

 

(66

)

 

 

 

 

(99

)

 

 

 

(102

)

 

Income from continuing operations

 

$

260

 

 

 

$

263

 

 

 

 

$

461

 

 

 

$

454

 

 

Discontinued operations, net of income taxes

 

 

(1

)

 

 

 

—

 

 

 

 

 

(1

)

 

 

 

—

 

 

Net income

 

$

259

 

 

 

$

263

 

 

 

 

$

460

 

 

 

$

454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.35

 

 

 

$

1.30

 

 

 

 

$

2.38

 

 

 

$

2.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted average shares outstanding

 

 

191,855,000

 

 

 

 

202,509,000

 

 

 

 

 

193,358,000

 

 

 

 

204,760,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations and Diluted earnings per share (EPS) GAAP to Non-GAAP reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 29,
2024

 

July 1,
2023

 

 

June 29,
2024

July 1,
2023

Income from continuing operations - GAAP

 

$

260

 

 

 

$

263

 

 

 

 

$

461

 

 

 

$

454

 

 

Add: LIFO inventory provision, net of tax

 

 

20

 

 

 

 

26

 

 

 

 

 

35

 

 

 

 

45

 

 

Intangible asset amortization, net of tax

 

 

7

 

 

 

 

7

 

 

 

 

 

13

 

 

 

 

15

 

 

Special charges, net of tax

 

 

9

 

 

 

 

—

 

 

 

 

 

20

 

 

 

 

—

 

 

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

 

$

296

 

 

 

$

296

 

 

 

 

$

529

 

 

 

$

514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations - GAAP

 

$

1.35

 

 

 

$

1.30

 

 

 

 

$

2.38

 

 

 

$

2.22

 

 

Add: LIFO inventory provision, net of tax

 

 

0.10

 

 

 

 

0.13

 

 

 

 

 

0.18

 

 

 

 

0.22

 

 

Intangible asset amortization, net of tax

 

 

0.04

 

 

 

 

0.03

 

 

 

 

 

0.07

 

 

 

 

0.07

 

 

Special charges, net of tax

 

 

0.05

 

 

 

 

—

 

 

 

 

 

0.11

 

 

 

 

—

 

 

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

 

$

1.54

 

 

 

$

1.46

 

 

 

 

$

2.74

 

 

 

$

2.51

 

 

 
(a)

Segment profit, adjusted income from continuing operations and adjusted diluted earnings per share are non-GAAP financial measures as defined in "Non-GAAP Financial Measures and Outlook" attached to this release.

(b)

In the second quarter and first half of 2024, we recorded special charges of $13 million and $27 million, respectively, in connection with the restructuring plan announced at the end of 2023. These charges were largely related to headcount reductions in the Industrial, Textron Systems and Bell segments.

 

TEXTRON INC.

Condensed Consolidated Balance Sheets

(In millions)

(Unaudited)

 

 

 

 

   

 

 

 

 

June 29,
2024

   

December 30,
2023

 

Assets

 

 

   

 

 

Cash and equivalents

 

$

1,345

   

$

2,121

 

Accounts receivable, net

 

 

847

   

 

868

 

Inventories

 

 

4,381

   

 

3,914

 

Other current assets

 

 

749

   

 

857

 

Net property, plant and equipment

 

 

2,500

   

 

2,477

 

Goodwill

 

 

2,295

   

 

2,295

 

Other assets

 

 

3,639

   

 

3,663

 

Finance group assets

 

 

671

   

 

661

 

Total Assets

 

$

16,427

   

$

16,856

 

 

 

 

   

 

 

 

 

 

   

 

 

Liabilities and Shareholders' Equity

 

 

   

 

 

Current portion of long-term debt

 

$

357

   

$

357

 

Accounts payable

 

 

1,120

   

 

1,023

 

Other current liabilities

 

 

2,979

   

 

2,998

 

Other liabilities

 

 

1,828

   

 

1,904

 

Long-term debt

 

 

2,884

   

 

3,169

 

Finance group liabilities

 

 

407

   

 

418

 

Total Liabilities

 

 

9,575

   

 

9,869

 

 

 

 

   

 

 

Total Shareholders' Equity

 

 

6,852

   

 

6,987

 

Total Liabilities and Shareholders' Equity

 

$

16,427

   

$

16,856

 
         

TEXTRON INC.

MANUFACTURING GROUP

Condensed Schedule of Cash Flows

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

June 29,
2024

 

 

July 1,
2023

 

 

 

June 29,
2024

 

 

July 1,
2023

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

254

 

 

 

$

253

 

 

 

 

$

441

 

 

 

$

438

 

 

Depreciation and amortization

 

 

90

 

 

 

 

101

 

 

 

 

 

178

 

 

 

 

193

 

 

Deferred income taxes and income taxes receivable/payable

 

 

(41

)

 

 

 

(77

)

 

 

 

 

(22

)

 

 

 

(61

)

 

Pension, net

 

 

(56

)

 

 

 

(51

)

 

 

 

 

(112

)

 

 

 

(102

)

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

44

 

 

 

 

(28

)

 

 

 

 

10

 

 

 

 

(97

)

 

Inventories

 

 

(117

)

 

 

 

(173

)

 

 

 

 

(467

)

 

 

 

(553

)

 

Accounts payable

 

 

(14

)

 

 

 

(54

)

 

 

 

 

107

 

 

 

 

207

 

 

Other, net

 

 

223

 

 

 

 

343

 

 

 

 

 

218

 

 

 

 

442

 

 

Net cash from operating activities

 

 

383

 

 

 

 

314

 

 

 

 

 

353

 

 

 

 

467

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(74

)

 

 

 

(83

)

 

 

 

 

(140

)

 

 

 

(145

)

 

Net cash used in business acquisitions

 

 

(13

)

 

 

 

—

 

 

 

 

 

(13

)

 

 

 

—

 

 

Net proceeds from corporate-owned life insurance policies

 

 

23

 

 

 

 

18

 

 

 

 

 

26

 

 

 

 

38

 

 

Proceeds from sale of property, plant and equipment

 

 

—

 

 

 

 

—

 

 

 

 

 

3

 

 

 

 

—

 

 

Net cash from investing activities

 

 

(64

)

 

 

 

(65

)

 

 

 

 

(124

)

 

 

 

(107

)

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal payments on long-term debt and nonrecourse debt

 

 

(7

)

 

 

 

(1

)

 

 

 

 

(359

)

 

 

 

(3

)

 

Purchases of Textron common stock

 

 

(358

)

 

 

 

(273

)

 

 

 

 

(675

)

 

 

 

(650

)

 

Dividends paid

 

 

(4

)

 

 

 

(4

)

 

 

 

 

(8

)

 

 

 

(8

)

 

Other financing activities, net

 

 

10

 

 

 

 

4

 

 

 

 

 

48

 

 

 

 

26

 

 

Net cash from financing activities

 

 

(359

)

 

 

 

(274

)

 

 

 

 

(994

)

 

 

 

(635

)

 

Total cash flows from continuing operations

 

 

(40

)

 

 

 

(25

)

 

 

 

 

(765

)

 

 

 

(275

)

 

Total cash flows from discontinued operations

 

 

(1

)

 

 

 

(1

)

 

 

 

 

(1

)

 

 

 

(1

)

 

Effect of exchange rate changes on cash and equivalents

 

 

(2

)

 

 

 

2

 

 

 

 

 

(10

)

 

 

 

8

 

 

Net change in cash and equivalents

 

 

(43

)

 

 

 

(24

)

 

 

 

 

(776

)

 

 

 

(268

)

 

Cash and equivalents at beginning of period

 

 

1,388

 

 

 

 

1,719

 

 

 

 

 

2,121

 

 

 

 

1,963

 

 

Cash and equivalents at end of period

 

$

1,345

 

 

 

$

1,695

 

 

 

 

$

1,345

 

 

 

$

1,695

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing cash flow GAAP to Non-GAAP reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

June 29,
2024

 

 

July 1,
2023

 

 

 

June 29,
2024

 

 

July 1,
2023

 

Net cash from operating activities - GAAP

 

$

383

 

 

 

$

314

 

 

 

 

$

353

 

 

 

$

467

 

 

Less: Capital expenditures

 

 

(74

)

 

 

 

(83

)

 

 

 

 

(140

)

 

 

 

(145

)

 

Add: Total pension contributions

 

 

11

 

 

 

 

11

 

 

 

 

 

23

 

 

 

 

24

 

 

Proceeds from sale of property, plant and equipment

 

 

—

 

 

 

 

—

 

 

 

 

 

3

 

 

 

 

—

 

 

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

 

$

320

 

 

 

$

242

 

 

 

 

$

239

 

 

 

$

346

 

 

(a)

Manufacturing cash flow before pension contributions is a non-GAAP financial measure as defined in "Non-GAAP Financial Measures and Outlook" attached to this release.

 

TEXTRON INC.

Condensed Consolidated Schedule of Cash Flows

(In millions)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 29,
2024

 

 

July 1,
2023

 

 

 

June 29,
2024

 

 

July 1,
2023

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

260

 

 

 

$

263

 

 

 

 

$

461

 

 

 

$

454

 

 

Depreciation and amortization

 

 

90

 

 

 

 

101

 

 

 

 

 

178

 

 

 

 

193

 

 

Deferred income taxes and income taxes receivable/payable

 

 

(47

)

 

 

 

(81

)

 

 

 

 

(24

)

 

 

 

(63

)

 

Pension, net

 

 

(56

)

 

 

 

(51

)

 

 

 

 

(112

)

 

 

 

(102

)

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

44

 

 

 

 

(28

)

 

 

 

 

10

 

 

 

 

(97

)

 

Inventories

 

 

(117

)

 

 

 

(173

)

 

 

 

 

(467

)

 

 

 

(553

)

 

Accounts payable

 

 

(14

)

 

 

 

(54

)

 

 

 

 

107

 

 

 

 

207

 

 

Captive finance receivables, net

 

 

(15

 

 

 

(21

)

 

 

 

 

7

 

 

 

 

(15

)

 

Other, net

 

 

223

 

 

 

 

341

 

 

 

 

 

201

 

 

 

 

436

 

 

Net cash from operating activities

 

 

368

 

 

 

 

297

 

 

 

 

 

361

 

 

 

 

460

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(74

)

 

 

 

(83

)

 

 

 

 

(140

)

 

 

 

(145

)

 

Net cash used in business acquisitions

 

 

(13

)

 

 

 

—

 

 

 

 

 

(13

)

 

 

 

—

 

 

Net proceeds from corporate-owned life insurance policies

 

 

23

 

 

 

 

18

 

 

 

 

 

26

 

 

 

 

38

 

 

Proceeds from sale of property, plant and equipment

 

 

—

 

 

 

 

—

 

 

 

 

 

3

 

 

 

 

—

 

 

Finance receivables repaid

 

 

23

 

 

 

 

7

 

 

 

 

 

31

 

 

 

 

19

 

 

Finance receivables originated

 

 

(7

)

 

 

 

—

 

 

 

 

 

(18

)

 

 

 

—

 

 

Other investing activities, net

 

 

—

 

 

 

 

1

 

 

 

 

 

—

 

 

 

 

2

 

 

Net cash from investing activities

 

 

(48

)

 

 

 

(57

)

 

 

 

 

(111

)

 

 

 

(86

)

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal payments on long-term debt and nonrecourse debt

 

 

(9

)

 

 

 

(17

)

 

 

 

 

(374

)

 

 

 

(34

)

 

Purchases of Textron common stock

 

 

(358

)

 

 

 

(273

)

 

 

 

 

(675

)

 

 

 

(650

)

 

Dividends paid

 

 

(4

)

 

 

 

(4

)

 

 

 

 

(8

)

 

 

 

(8

)

 

Other financing activities, net

 

 

(1

)

 

 

 

4

 

 

 

 

 

48

 

 

 

 

26

 

 

Net cash from financing activities

 

 

(372

)

 

 

 

(290

)

 

 

 

 

(1,009

)

 

 

 

(666

)

 

Total cash flows from continuing operations

 

 

(52

)

 

 

 

(50

)

 

 

 

 

(759

)

 

 

 

(292

)

 

Total cash flows from discontinued operations

 

 

(1

)

 

 

 

(1

)

 

 

 

 

(1

)

 

 

 

(1

)

 

Effect of exchange rate changes on cash and equivalents

 

 

(2

)

 

 

 

2

 

 

 

 

 

(10

)

 

 

 

8

 

 

Net change in cash and equivalents

 

 

(55

)

 

 

 

(49

)

 

 

 

 

(770

)

 

 

 

(285

)

 

Cash and equivalents at beginning of period

 

 

1,466

 

 

 

 

1,799

 

 

 

 

 

2,181

 

 

 

 

2,035

 

 

Cash and equivalents at end of period

 

$

1,411

 

 

 

$

1,750

 

 

 

 

$

1,411

 

 

 

$

1,750

 

 

 

TEXTRON INC.

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