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Textron Inc
Textron Reports Fourth Quarter 2021 Results; Announces 2022 Financial Outlook (Businesswire)

2022-01-27 12:30

Textron Inc. (NYSE: TXT) today reported fourth quarter 2021 income from continuing operations of $0.93 per share. Adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $0.94 per share for the fourth quarter of 2021, compared to $1.06 per share in the fourth quarter of 2020.

Full year 2021 income from continuing operations was $3.30 per share. Full year 2021 adjusted income from continuing operations, a non-GAAP measure, was also $3.30 per share, up from $2.07 in 2020.

“2021 was a solid year for Textron with strong order flow and execution at Aviation, continued progress on Future Vertical Lift programs at Bell, strong execution and margin performance at Systems, and higher revenues and operating profit at Industrial,” said Textron Chairman and CEO Scott C. Donnelly.

Cash Flow

Net cash provided by operating activities of continuing operations of the manufacturing group for the full year was $1.5 billion. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, totaled $1.1 billion for the full year, up from $596 million in 2020.

In the quarter, Textron returned $335 million to shareholders through share repurchases. Full year 2021 share repurchases totaled $921 million.

Share Repurchase Plan

On January 25, 2022, Textron’s Board of Directors approved a new authorization for the repurchase of up to 25 million shares, under which the company intends to purchase shares to offset the impact of dilution from stock-based compensation and benefit plans and for opportunistic capital management purposes.

Outlook

Textron is forecasting 2022 revenues of approximately $13.3 billion, up from $12.4 billion. Textron expects full-year 2022 earnings per share will be in the range of $3.80 to $4.00.

The company is estimating net cash provided by operating activities of continuing operations of the manufacturing group will be between $1.1 billion and $1.2 billion and manufacturing cash flow before pension contributions, a non-GAAP measure, will be between $700 million and $800 million, with planned pension contributions of about $50 million.

"Our outlook reflects continued momentum in our commercial businesses and ongoing investment in new products to increase long-term shareholder value," Donnelly concludes.

Fourth Quarter Segment Results

Textron Aviation

Revenues at Textron Aviation of $1.4 billion were down $201 million from the fourth quarter of 2020, largely due to lower aircraft volume, partially offset by higher aftermarket volume.

Textron Aviation delivered 46 jets in the quarter, down from 61 last year, and 43 commercial turboprops, down from 61 last year.

Segment profit was $137 million in the fourth quarter, up $29 million from a year ago, largely due to favorable pricing, net of inflation, of $21 million and improved manufacturing performance.

Textron Aviation backlog at the end of the fourth quarter was $4.1 billion.

Bell

Bell revenues were $858 million, down $13 million from last year, reflecting lower military revenues partially offset by higher commercial revenues.

Bell delivered 59 commercial helicopters in the quarter, up from 57 last year.

Segment profit of $88 million was down $22 million, primarily due to lower military volume and mix.

Bell backlog at the end of the fourth quarter was $3.9 billion.

Textron Systems

Revenues at Textron Systems were $313 million, down $44 million from last year's fourth quarter due to lower volume, which included the impact from the U.S. Army’s withdrawal from Afghanistan on the segment's fee-for-service contracts.

Segment profit of $45 million was down $4 million from a year ago, largely due to the lower volume.

Textron Systems’ backlog at the end of the fourth quarter was $2.1 billion.

Industrial

Industrial revenues were $781 million, down $85 million from last year, reflecting lower volume and mix of $133 million, largely in the Fuel Systems and Functional Components product line reflecting order disruptions related to the global auto OEM supply chain shortages, partially offset by a favorable impact of $50 million from pricing, largely in the Specialized Vehicles product line.

Segment profit of $38 million was down $17 million from the fourth quarter of 2020, primarily due to the lower volume and mix, partially offset by a favorable impact from performance of $15 million.

Finance

Finance segment revenues were $11 million, and profit was $2 million.

Conference Call Information

Textron will host its conference call today, January 27, 2022 at 8:00 a.m. (Eastern) to discuss its results and outlook. The call will be available via webcast at www.textron.com or by direct dial at (844) 867-6169 in the U.S. or (409) 207-6955 outside of the U.S.; Access Code: 6069432.

In addition, the call will be recorded and available for playback beginning at 11:00 a.m. (Eastern) on Thursday, January 27, 2022 by dialing (402) 970-0847; Access Code: 9339579.

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, Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, Arctic Cat, and Textron Systems. 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; the risk that acquisitions do not perform as planned, including, for example, the risk that acquired businesses will not achieve revenue and profit projections; the impact of changes in tax legislation; risks and uncertainties related to the impact of the COVID-19 pandemic on our business and operations; and the ability of our businesses to hire and retain the highly skilled personnel necessary for our businesses to succeed.

 

TEXTRON INC.

Revenues by Segment and Reconciliation of Segment Profit to Net Income

(Dollars in millions, except per share amounts)

(Unaudited)

 

 

Three Months Ended

 

Twelve Months Ended

 

January 1,
2022

January 2,
2021

 

January 1,
2022

January 2,
2021

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

MANUFACTURING:

 

 

 

 

 

 

 

 

 

 

 

 

 

Textron Aviation

 

$

1,359

 

 

 

$

1,560

 

 

 

 

$

4,566

 

 

 

$

3,974

 

 

Bell

 

 

858

 

 

 

 

871

 

 

 

 

 

3,364

 

 

 

 

3,309

 

 

Textron Systems

 

 

313

 

 

 

 

357

 

 

 

 

 

1,273

 

 

 

 

1,313

 

 

Industrial

 

 

781

 

 

 

 

866

 

 

 

 

 

3,130

 

 

 

 

3,000

 

 

 

 

 

3,311

 

 

 

 

3,654

 

 

 

 

 

12,333

 

 

 

 

11,596

 

 

FINANCE

 

 

11

 

 

 

 

13

 

 

 

 

 

49

 

 

 

 

55

 

 

Total revenues

 

$

3,322

 

 

 

$

3,667

 

 

 

 

$

12,382

 

 

 

$

11,651

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEGMENT PROFIT

 

 

 

 

 

 

 

 

 

 

 

 

 

MANUFACTURING:

 

 

 

 

 

 

 

 

 

 

 

 

 

Textron Aviation

 

$

137

 

 

 

$

108

 

 

 

 

$

378

 

 

 

$

16

 

 

Bell

 

 

88

 

 

 

 

110

 

 

 

 

 

408

 

 

 

 

462

 

 

Textron Systems

 

 

45

 

 

 

 

49

 

 

 

 

 

189

 

 

 

 

152

 

 

Industrial

 

 

38

 

 

 

 

55

 

 

 

 

 

140

 

 

 

 

111

 

 

 

 

 

308

 

 

 

 

322

 

 

 

 

 

1,115

 

 

 

 

741

 

 

FINANCE

 

 

2

 

 

 

 

2

 

 

 

 

 

19

 

 

 

 

10

 

 

Segment profit

 

 

310

 

 

 

 

324

 

 

 

 

 

1,134

 

 

 

 

751

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate expenses and other, net

 

 

(29

)

 

 

 

(50

)

 

 

 

 

(129

)

 

 

 

(122

)

 

Interest expense, net for Manufacturing group

 

 

(29

)

 

 

 

(36

)

 

 

 

 

(124

)

 

 

 

(145

)

 

Special charges (a)

 

 

(5

)

 

 

 

(23

)

 

 

 

 

(25

)

 

 

 

(147

)

 

Gain on business disposition (b)

 

 

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

Inventory charge (c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(55

)

 

Income from continuing operations before income taxes

 

 

247

 

 

 

 

215

 

 

 

 

 

873

 

 

 

 

282

 

 

Income tax benefit (expense)

 

 

(40

)

 

 

 

21

 

 

 

 

 

(126

)

 

 

 

27

 

 

Income from continuing operations

 

$

207

 

 

 

$

236

 

 

 

 

$

747

 

 

 

$

309

 

 

Discontinued operations, net of income taxes

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

Net income

 

$

207

 

 

 

$

236

 

 

 

 

$

746

 

 

 

$

309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.93

 

 

 

$

1.03

 

 

 

 

$

3.30

 

 

 

$

1.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted average shares outstanding

 

 

222,860,000

 

 

 

 

229,365,000

 

 

 

 

 

226,520,000

 

 

 

 

228,979,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

January 1,
2022

January 2,
2021

 

January 1,
2022

January 2,
2021

Income from continuing operations - GAAP

 

$

207

 

 

 

$

236

 

 

 

 

$

747

 

 

 

$

309

 

 

Add: Special charges, net of tax (a)

 

 

3

 

 

 

 

16

 

 

 

 

 

18

 

 

 

 

119

 

 

Inventory charge, net of tax (c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

55

 

 

Tax benefit – TRU assets held for sale (c)

 

 

 

 

 

 

(8

)

 

 

 

 

 

 

 

 

(8

)

 

Less: Gain on business disposition, net of tax (b)

 

 

 

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

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

 

$

210

 

 

 

$

244

 

 

 

 

$

748

 

 

 

$

475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations - GAAP

 

$

0.93

 

 

 

$

1.03

 

 

 

 

$

3.30

 

 

 

$

1.35

 

 

Add: Special charges, net of tax (a)

 

 

0.01

 

 

 

 

0.07

 

 

 

 

 

0.08

 

 

 

 

0.52

 

 

Inventory charge, net of tax (c)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.24

 

 

Tax benefit – TRU assets held for sale (c)

 

 

 

 

 

 

(0.04

)

 

 

 

 

 

 

 

 

(0.04

)

 

Less: Gain on business disposition, net of tax (b)

 

 

 

 

 

 

 

 

 

 

 

(0.08

)

 

 

 

 

 

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

 

$

0.94

 

 

 

$

1.06

 

 

 

 

$

3.30

 

 

 

$

2.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TEXTRON INC.

Revenues by Segment and Reconciliation of Segment Profit to Net Income (Continued)

(Dollars in millions, except per share amounts)

(Unaudited)

 

(a)

 

In 2020, we initiated a restructuring plan to reduce operating expenses through headcount reductions, facility consolidations and other actions in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic. The restructuring plan primarily impacted the TRU Simulation + Training business within the Textron Systems segment and the Industrial and Textron Aviation segments. In connection with this plan, we incurred special charges of $5 million and $25 million for the three and twelve months ended January 1, 2022, and $23 million and $108 million for the three and twelve months ended January 2, 2021. Special charges for the twelve months ended January 2, 2021 also included the impairment of indefinite-lived trade name intangible assets totaling $39 million, primarily in the Textron Aviation segment.

 

(b)

 

On January 25, 2021, we completed the sale of TRU Simulation + Training Canada Inc. which resulted in an after-tax gain of $17 million.

 

(c)

 

In connection with the restructuring plan described above, we ceased manufacturing at TRU's facility in Montreal, Canada, resulting in the production suspension of our commercial air transport simulators. As a result of this action and market conditions, we recorded a $55 million charge in the second quarter of 2020 to write-down the related inventory to its net realizable value. In the fourth quarter of 2020, we reached a definitive agreement to sell TRU Simulation + Training Canada Inc. which resulted in the recognition of an $8 million tax benefit.

 

(d)

 

Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures as defined in "Non-GAAP Financial Measures" attached to this release.

 
 

Textron Inc.

Condensed Consolidated Balance Sheets

(In millions)

(Unaudited)

 

 

 

 

January 1,
2022

January 2,
2021

Assets

 

 

Cash and equivalents

$

1,922

$

2,146

Accounts receivable, net

 

838

 

787

Inventories

 

3,468

 

3,513

Other current assets

 

1,018

 

950

Net property, plant and equipment

 

2,538

 

2,516

Goodwill

 

2,149

 

2,157

Other assets

 

3,027

 

2,436

Finance group assets

 

867

 

938

Total Assets

$

15,827

$

15,443

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

Current portion of long-term debt

$

6

$

509

Accounts payable

 

786

 

776

Other current liabilities

 

2,344

 

1,985

Other liabilities

 

2,005

 

2,357

Long-term debt

 

3,179

 

3,198

Finance group liabilities

 

692

 

773

Total Liabilities

 

9,012

 

9,598

 

 

 

Total Shareholders' Equity

 

6,815

 

5,845

Total Liabilities and Shareholders' Equity

$

15,827

$

15,443

 

TEXTRON INC.

MANUFACTURING GROUP

Condensed Schedule of Cash Flows

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Twelve Months Ended

 

 

 

January 1,
2022

 

 

January 2,
2021

 

 

 

January 1,
2022

 

 

January 2,
2021

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

203

 

 

 

$

234

 

 

 

 

$

740

 

 

 

$

301

 

 

Depreciation and amortization

 

 

103

 

 

 

 

107

 

 

 

 

 

380

 

 

 

 

386

 

 

Deferred income taxes and income taxes receivable/payable

 

 

18

 

 

 

 

(34

)

 

 

 

 

43

 

 

 

 

(63

)

 

Pension, net

 

 

(20

)

 

 

 

(4

)

 

 

 

 

(82

)

 

 

 

(15

)

 

Gain on business disposition

 

 

 

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

Asset impairments and TRU inventory charge

 

 

2

 

 

 

 

5

 

 

 

 

 

13

 

 

 

 

116

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(66

)

 

 

 

90

 

 

 

 

 

(58

)

 

 

 

149

 

 

Inventories

 

 

209

 

 

 

 

692

 

 

 

 

 

45

 

 

 

 

434

 

 

Accounts payable

 

 

12

 

 

 

 

(346

)

 

 

 

 

13

 

 

 

 

(613

)

 

Other, net

 

 

(4

)

 

 

 

(131

)

 

 

 

 

392

 

 

 

 

138

 

 

Net cash from operating activities

 

 

457

 

 

 

 

613

 

 

 

 

 

1,469

 

 

 

 

833

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(171

)

 

 

 

(166

)

 

 

 

 

(375

)

 

 

 

(317

)

 

Net proceeds from business disposition

 

 

 

 

 

 

 

 

 

 

 

38

 

 

 

 

 

 

Proceeds from an insurance recovery and sale of property, plant and equipment

 

 

 

 

 

 

8

 

 

 

 

 

3

 

 

 

 

33

 

 

Other investing activities, net

 

 

(1

)

 

 

 

(3

)

 

 

 

 

(1

)

 

 

 

7

 

 

Net cash from investing activities

 

 

(172

)

 

 

 

(161

)

 

 

 

 

(335

)

 

 

 

(277

)

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net proceeds from long-term debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,137

 

 

Principal payments on long-term debt and nonrecourse debt

 

 

(2

)

 

 

 

(353

)

 

 

 

 

(524

)

 

 

 

(548

)

 

Payments net of borrowings against corporate-owned insurance policies

 

 

 

 

 

 

(362

)

 

 

 

 

 

 

 

 

 

 

Purchases of Textron common stock

 

 

(335

)

 

 

 

(129

)

 

 

 

 

(921

)

 

 

 

(183

)

 

Dividends paid

 

 

(4

)

 

 

 

(4

)

 

 

 

 

(18

)

 

 

 

(18

)

 

Other financing activities, net

 

 

11

 

 

 

 

5

 

 

 

 

 

114

 

 

 

 

5

 

 

Net cash from financing activities

 

 

(330

)

 

 

 

(843

)

 

 

 

 

(1,349

)

 

 

 

393

 

 

Total cash flows from continuing operations

 

 

(45

)

 

 

 

(391

)

 

 

 

 

(215

)

 

 

 

949

 

 

Total cash flows from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

(1

)

 

Effect of exchange rate changes on cash and equivalents

 

 

(2

)

 

 

 

19

 

 

 

 

 

(8

)

 

 

 

17

 

 

Net change in cash and equivalents

 

 

(47

)

 

 

 

(372

)

 

 

 

 

(224

)

 

 

 

965

 

 

Cash and equivalents at beginning of period

 

 

1,969

 

 

 

 

2,518

 

 

 

 

 

2,146

 

 

 

 

1,181

 

 

Cash and equivalents at end of period

 

$

1,922

 

 

 

$

2,146

 

 

 

 

$

1,922

 

 

 

$

2,146

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Twelve Months Ended

 

 

January 1,
2022

 

 

January 2,
2021

 

 

 

January 1,
2022

 

 

January 2,
2021

 

Net cash from operating activities - GAAP

 

$

457

 

 

 

$

613

 

 

 

 

$

1,469

 

 

 

$

833

 

 

Less: Capital expenditures

 

 

(171

)

 

 

 

(166

)

 

 

 

 

(375

)

 

 

 

(317

)

 

Plus: Total pension contribution

 

 

12

 

 

 

 

12

 

 

 

 

 

52

 

 

 

 

47

 

 

Proceeds from an insurance recovery and sale of property, plant and equipment

 

 

 

 

 

 

8

 

 

 

 

 

3

 

 

 

 

33

 

 

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

 

$

298

 

 

 

$

467

 

 

 

 

$

1,149

 

 

 

$

596

 

 

         

(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

 

Twelve Months Ended

 

 

January 1,
2022

 

 

January 2,
2021

 

 

 

January 1,
2022

 

 

January 2,
2021

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

207

 

 

 

$

236

 

 

 

 

$

747

 

 

 

$

309

 

 

Depreciation and amortization

 

 

105

 

 

 

 

108

 

 

 

 

 

390

 

 

 

 

391

 

 

Deferred income taxes and income taxes receivable/payable

 

 

1

 

 

 

 

(34

)

 

 

 

 

34

 

 

 

 

(69

)

 

Pension, net

 

 

(20

)

 

 

 

(4

)

 

 

 

 

(82

)

 

 

 

(15

)

 

Gain on business disposition

 

 

 

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

Asset impairments and TRU inventory charge

 

 

2

 

 

 

 

5

 

 

 

 

 

13

 

 

 

 

116

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(66

)

 

 

 

90

 

 

 

 

 

(58

)

 

 

 

149

 

 

Inventories

 

 

209

 

 

 

 

692

 

 

 

 

 

45

 

 

 

 

434

 

 

Accounts payable

 

 

12

 

 

 

 

(346

)

 

 

 

 

13

 

 

 

 

(613

)

 

Captive finance receivables, net

 

 

(21

)

 

 

 

(64

)

 

 

 

 

131

 

 

 

 

(89

)

 

Other, net

 

 

(4

)

 

 

 

(114

)

 

 

 

 

383

 

 

 

 

156

 

 

Net cash from operating activities

 

 

425

 

 

 

 

569

 

 

 

 

 

1,599

 

 

 

 

769

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(171

)

 

 

 

(166

)

 

 

 

 

(375

)

 

 

 

(317

)

 

Net proceeds from business disposition

 

 

 

 

 

 

 

 

 

 

 

38

 

 

 

 

 

 

Proceeds from an insurance recovery and sale of property, plant and equipment

 

 

 

 

 

 

8

 

 

 

 

 

3

 

 

 

 

33

 

 

Finance receivables repaid

 

 

 

 

 

 

1

 

 

 

 

 

19

 

 

 

 

22

 

 

Other investing activities, net

 

 

17

 

 

 

 

1

 

 

 

 

 

34

 

 

 

 

14

 

 

Net cash from investing activities

 

 

(154

)

 

 

 

(156

)

 

 

 

 

(281

)

 

 

 

(248

)

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net proceeds from long-term debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,137

 

 

Principal payments on long-term debt and nonrecourse debt

 

 

(6

)

 

 

 

(358

)

 

 

 

 

(621

)

 

 

 

(593

)

 

Payments net of borrowings against corporate-owned insurance policies

 

 

 

 

 

 

(362

)

 

 

 

 

 

 

 

 

 

 

Purchases of Textron common stock

 

 

(335

)

 

 

 

(129

)

 

 

 

 

(921

)

 

 

 

(183

)

 

Dividends paid

 

 

(4

)

 

 

 

(4

)

 

 

 

 

(18

)

 

 

 

(18

)

 

Other financing activities, net

 

 

11

 

 

 

 

5

 

 

 

 

 

114

 

 

 

 

17

 

 

Net cash from financing activities

 

 

(334

)

 

 

 

(848

)

 

 

 

 

(1,446

)

 

 

 

360

 

 

Total cash flows from continuing operations

 

 

(63

)

 

 

 

(435

)

 

 

 

 

(128

)

 

 

 

881

 

 

Total cash flows from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

(1

)

 

Effect of exchange rate changes on cash and equivalents

 

 

(2

)

 

 

 

19

 

 

 

 

 

(8

)

 

 

 

17

 

 

Net change in cash and equivalents

 

 

(65

)

 

 

 

(416

)

 

 

 

 

(137

)

 

 

 

897

 

 

Cash and equivalents at beginning of period

 

 

2,182

 

 

 

 

2,670

 

 

 

 

 

2,254

 

 

 

 

1,357

 

 

Cash and equivalents at end of period

 

$

2,117

 

 

 

$

2,254

 

 

 

 

$

2,117

 

 

 

$

2,254

 

 

 

TEXTRON INC.

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 Income from Continuing Operations and Adjusted Diluted Earnings Per Share

Adjusted income from continuing operations 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. In addition, we have excluded certain impacts of the enterprise-wide restructuring plan on TRU Simulation + Training Canada Inc. (TRU Canada) that are not included within special charges, but are of a non-recurring nature and are not indicative of ongoing operations. At TRU Canada, an inventory charge is excluded as it relates to the write-down of inventory in connection with an action taken under the restructuring plan. Due to the substantial decline in demand and order cancellations for flight simulators resulting from the impact of the pandemic on the commercial air transportation business, we ceased manufacturing at TRU Canada’s Montreal facility, resulting in the production suspension of its commercial air transport simulators. As a result of this action and market conditions, the related inventory was written down to its net realizable value in the second quarter of 2020. In the fourth quarter of 2020, we reached a definitive agreement to sell TRU Canada, which resulted in the recognition of an $8 million tax benefit, and in the first quarter of 2021, TRU Canada was sold. The tax benefit and the after-tax gain are both excluded as they were incurred in connection with the enterprise-wide restructuring plan.

 

 

Three Months Ended

 

Twelve Months Ended

 

 

January 1,

2022

 

 

January 2,

2021

 

 

 

January 1,

2022

 

 

January 2,

2021

 

Income from continuing operations - GAAP

 

$

207

 

 

$

236

 

 

 

 

$

747

 

 

 

$

309

 

 

Add: Special charges, net of tax

 

 

3

 

 

 

16

 

 

 

 

 

18

 

 

 

 

119

 

 

Inventory charge, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

55

 

 

Tax benefit – TRU assets held for sale

 

 

 

 

 

(8

)

 

 

 

 

 

 

 

 

(8

)

 

Less: Gain on business disposition, net of tax

 

 

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

Adjusted income from continuing operations - Non-GAAP

 

$

210

 

 

$

244

 

 

 

 

$

748

 

 

 

$

475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations - GAAP

 

$

0.93

 

 

$

1.03

 

 

 

 

$

3.30

 

 

 

$

1.35

 

 

Add: Special charges, net of tax

 

 

0.01

 

 

 

0.07

 

 

 

 

 

0.08

 

 

 

 

0.52

 

 

Inventory charge, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.24

 

 

Tax benefit – TRU assets held for sale

 

 

 

 

 

(0.04

)

 

 

 

 

 

 

 

 

(0.04

)

 

Less: Gain on business disposition, net of tax

 

 

 

 

 

 

 

 

 

 

(0.08

)

 

 

 

 

 

Adjusted income from continuing operations - Non-GAAP

 

$

0.94

 

 

$

1.06

 

 

 

 

$

3.30

 

 

 

$

2.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TEXTRON INC.

Non-GAAP Financial Measures (Continued)

(Dollars in millions, except per share amounts)

 

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

 

 

Twelve Months Ended

 

 

 

January 1,
2022

 

 

January 2,
2021

 

 

January 1,
2022

 

 

January 2,
2021

 

Net cash from operating activities - GAAP

 

$

457

 

 

 

$

613

 

 

 

$

1,469

 

 

 

$

833

 

 

Less: Capital expenditures

 

 

(171

)

 

 

 

(166

)

 

 

 

(375

)

 

 

 

(317

)

 

Plus: Total pension contribution

 

 

12

 

 

 

 

12

 

 

 

 

52

 

 

 

 

47

 

 

Proceeds from an insurance recovery and sale of property, plant and equipment

 

 

 

 

 

 

8

 

 

 

 

3

 

 

 

 

33

 

 

Manufacturing cash flow before pension contributions - Non-GAAP

 

$

298

 

 

 

$

467

 

 

 

$

1,149

 

 

 

$

596

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

2022 Outlook

Net cash from operating activities - GAAP

 

$

1,075

 

 

$

1,175

 

Less: Capital expenditures

 

 

 

(425

)

 

 

Plus: Total pension contribution

 

 

 

50

 

 

 

Manufacturing cash flow before pension contributions - Non-GAAP

 

$

700

 

 

$

800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220127005033/en/


Investor Contacts:
Eric Salander – 401-457-2288
Cameron Vollmuth – 401-457-2288

Media Contact:
Mike Maynard – 401-457-2362

Copyright Business Wire 2022

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