Textron Reports Second Quarter 2019 Results; Raises Full-Year

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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