Textron Reports Third Quarter 2023 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

 

Nine Months Ended

 

September 30,
2023

October 1,
2022

 

September 30,
2023

October 1,
2022

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

MANUFACTURING:

 

 

 

 

 

 

 

 

 

 

 

 

 

Textron Aviation

 

$

1,338

 

 

 

$

1,167

 

 

 

 

$

3,849

 

 

 

$

3,491

 

 

Bell

 

 

754

 

 

 

 

754

 

 

 

 

 

2,076

 

 

 

 

2,275

 

 

Textron Systems

 

 

309

 

 

 

 

292

 

 

 

 

 

921

 

 

 

 

858

 

 

Industrial

 

 

922

 

 

 

 

849

 

 

 

 

 

2,880

 

 

 

 

2,558

 

 

Textron eAviation

 

 

7

 

 

 

 

5

 

 

 

 

 

22

 

 

 

 

10

 

 

 

 

 

3,330

 

 

 

 

3,067

 

 

 

 

 

9,748

 

 

 

 

9,192

 

 

FINANCE

 

 

13

 

 

 

 

11

 

 

 

 

 

43

 

 

 

 

41

 

 

Total revenues

 

$

3,343

 

 

 

$

3,078

 

 

 

 

$

9,791

 

 

 

$

9,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEGMENT PROFIT

 

 

 

 

 

 

 

 

 

 

 

 

 

MANUFACTURING:

 

 

 

 

 

 

 

 

 

 

 

 

 

Textron Aviation

 

$

160

 

 

 

$

131

 

 

 

 

$

456

 

 

 

$

390

 

 

Bell

 

 

77

 

 

 

 

74

 

 

 

 

 

202

 

 

 

 

219

 

 

Textron Systems

 

 

41

 

 

 

 

31

 

 

 

 

 

112

 

 

 

 

97

 

 

Industrial

 

 

51

 

 

 

 

36

 

 

 

 

 

171

 

 

 

 

112

 

 

Textron eAviation

 

 

(19

)

 

 

 

(7

)

 

 

 

 

(40

)

 

 

 

(14

)

 

 

 

 

310

 

 

 

 

265

 

 

 

 

 

901

 

 

 

 

804

 

 

FINANCE

 

 

22

 

 

 

 

7

 

 

 

 

 

42

 

 

 

 

26

 

 

Segment profit (a)

 

 

332

 

 

 

 

272

 

 

 

 

 

943

 

 

 

 

830

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate expenses and other, net

 

 

(38

)

 

 

 

(21

)

 

 

 

 

(98

)

 

 

 

(93

)

 

Interest expense, net for Manufacturing group

 

 

(16

)

 

 

 

(21

)

 

 

 

 

(49

)

 

 

 

(77

)

 

LIFO inventory provision

 

 

(26

)

 

 

 

(13

)

 

 

 

 

(86

)

 

 

 

(42

)

 

Intangible asset amortization

 

 

(10

)

 

 

 

(13

)

 

 

 

 

(30

)

 

 

 

(39

)

 

Non-service components of pension and postretirement income, net

 

 

59

 

 

 

 

60

 

 

 

 

 

177

 

 

 

 

180

 

 

Income from continuing operations before income taxes

 

 

301

 

 

 

 

264

 

 

 

 

 

857

 

 

 

 

759

 

 

Income tax expense

 

 

(32

)

 

 

 

(39

)

 

 

 

 

(134

)

 

 

 

(123

)

 

Income from continuing operations

 

$

269

 

 

 

$

225

 

 

 

 

$

723

 

 

 

$

636

 

 

Discontinued operations, net of income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

Net income

 

$

269

 

 

 

$

225

 

 

 

 

$

723

 

 

 

$

635

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.35

 

 

 

$

1.06

 

 

 

 

$

3.56

 

 

 

$

2.94

 

 

Discontinued operations, net of income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

1.35

 

 

 

$

1.06

 

 

 

 

$

3.56

 

 

 

$

2.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted average shares outstanding

 

 

199,992,000

 

 

 

 

213,140,000

 

 

 

 

 

203,170,000

 

 

 

 

216,468,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,
2023

 

October 1,
2022

 

 

September 30,
2023

 

October 1,
2022

 

Income from continuing operations - GAAP

 

$

269

 

 

 

$

225

 

 

 

 

$

723

 

 

 

$

636

 

 

Add: LIFO inventory provision, net of tax

 

 

20

 

 

 

 

10

 

 

 

 

 

65

 

 

 

 

32

 

 

Intangible asset amortization, net of tax

 

 

8

 

 

 

 

11

 

 

 

 

 

23

 

 

 

 

30

 

 

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

 

$

297

 

 

 

$

246

 

 

 

 

$

811

 

 

 

$

698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations - GAAP

 

$

1.35

 

 

 

$

1.06

 

 

 

 

$

3.56

 

 

 

$

2.94

 

 

Add: LIFO inventory provision, net of tax

 

 

0.10

 

 

 

 

0.04

 

 

 

 

 

0.32

 

 

 

 

0.14

 

 

Intangible asset amortization, net of tax

 

 

0.04

 

 

 

 

0.05

 

 

 

 

 

0.11

 

 

 

 

0.14

 

 

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

 

$

1.49

 

 

 

$

1.15

 

 

 

 

$

3.99

 

 

 

$

3.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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" attached to this release.

 
 

TEXTRON INC.

Condensed Consolidated Balance Sheets

(In millions)

(Unaudited)

 

 

 

 

September 30,
2023

December 31,
2022

Assets

 

 

Cash and equivalents

$

1,671

 

$

1,963

 

Accounts receivable, net

 

892

 

 

855

 

Inventories

 

4,207

 

 

3,550

 

Other current assets

 

815

 

 

1,033

 

Net property, plant and equipment

 

2,451

 

 

2,523

 

Goodwill

 

2,281

 

 

2,283

 

Other assets

 

3,508

 

 

3,422

 

Finance group assets

 

667

 

 

664

 

Total Assets

$

16,492

 

$

16,293

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

Current portion of long-term debt

$

357

 

$

7

 

Accounts payable

 

1,216

 

 

1,018

 

Other current liabilities

 

2,814

 

 

2,645

 

Other liabilities

 

1,789

 

 

1,879

 

Long-term debt

 

2,824

 

 

3,175

 

Finance group liabilities

 

425

 

456

Total Liabilities

 

9,425

 

 

9,180

 

 

 

 

Total Shareholders' Equity

 

7,067

 

 

7,113

 

Total Liabilities and Shareholders' Equity

$

16,492

 

$

16,293

 

 
 

TEXTRON INC.

MANUFACTURING GROUP

Condensed Schedule of Cash Flows

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

September 30,
2023

 

 

October 1,
2022

 

 

 

September 30,
2023

 

 

October 1,
2022

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

252

 

 

 

$

220

 

 

 

 

$

690

 

 

 

$

615

 

 

Depreciation and amortization

 

 

99

 

 

 

 

96

 

 

 

 

 

292

 

 

 

 

287

 

 

Deferred income taxes and income taxes receivable/payable

 

 

(16

)

 

 

 

(48

)

 

 

 

 

(77

)

 

 

 

(126

)

 

Pension, net

 

 

(50

)

 

 

 

(40

)

 

 

 

 

(152

)

 

 

 

(123

)

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

52

 

 

 

 

25

 

 

 

 

 

(45

)

 

 

 

(23

)

 

Inventories

 

 

(106

)

 

 

 

(107

)

 

 

 

 

(659

)

 

 

 

(353

)

 

Accounts payable

 

 

(5

)

 

 

 

92

 

 

 

 

 

202

 

 

 

 

116

 

 

Other, net

 

 

44

 

 

 

 

118

 

 

 

 

 

486

 

 

 

 

552

 

 

Net cash from operating activities

 

 

270

 

 

 

 

356

 

 

 

 

 

737

 

 

 

 

945

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(79

)

 

 

 

(78

)

 

 

 

 

(224

)

 

 

 

(192

)

 

Net cash used in business acquisitions

 

 

(1

)

 

 

 

(3

)

 

 

 

 

(1

)

 

 

 

(201

)

 

Net proceeds from corporate-owned life insurance policies

 

 

1

 

 

 

 

(2

)

 

 

 

 

39

 

 

 

 

23

 

 

Proceeds from sale of property, plant and equipment

 

 

4

 

 

 

 

3

 

 

 

 

 

4

 

 

 

 

21

 

 

Net cash from investing activities

 

 

(75

)

 

 

 

(80

)

 

 

 

 

(182

)

 

 

 

(349

)

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Decrease in short-term debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15

)

 

Principal payments on long-term debt and nonrecourse debt

 

 

(2

)

 

 

 

(2

)

 

 

 

 

(5

)

 

 

 

(16

)

 

Purchases of Textron common stock

 

 

(235

)

 

 

 

(200

)

 

 

 

 

(885

)

 

 

 

(639

)

 

Dividends paid

 

 

(4

)

 

 

 

(4

)

 

 

 

 

(12

)

 

 

 

(13

)

 

Other financing activities, net

 

 

35

 

 

 

 

5

 

 

 

 

 

61

 

 

 

 

33

 

 

Net cash from financing activities

 

 

(206

)

 

 

 

(201

)

 

 

 

 

(841

)

 

 

 

(650

)

 

Total cash flows from continuing operations

 

 

(11

)

 

 

 

75

 

 

 

 

 

(286

)

 

 

 

(54

)

 

Total cash flows from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

(2

)

 

Effect of exchange rate changes on cash and equivalents

 

 

(13

)

 

 

 

(22

)

 

 

 

 

(5

)

 

 

 

(49

)

 

Net change in cash and equivalents

 

 

(24

)

 

 

 

53

 

 

 

 

 

(292

)

 

 

 

(105

)

 

Cash and equivalents at beginning of period

 

 

1,695

 

 

 

 

1,764

 

 

 

 

 

1,963

 

 

 

 

1,922

 

 

Cash and equivalents at end of period

 

$

1,671

 

 

 

$

1,817

 

 

 

 

$

1,671

 

 

 

$

1,817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing cash flow GAAP to Non-GAAP reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

September 30,
2023

 

 

October 1,
2022

 

 

 

September 30,
2023

 

 

October 1,
2022

 

Net cash from operating activities - GAAP

 

$

270

 

 

 

$

356

 

 

 

 

$

737

 

 

 

$

945

 

 

Less: Capital expenditures

 

 

(79

)

 

 

 

(78

)

 

 

 

 

(224

)

 

 

 

(192

)

 

Add: Total pension contributions

 

 

10

 

 

 

 

11

 

 

 

 

 

34

 

 

 

 

36

 

 

Proceeds from sale of property, plant and equipment

 

 

4

 

 

 

 

3

 

 

 

 

 

4

 

 

 

 

21

 

 

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

 

$

205

 

 

 

$

292

 

 

 

 

$

551

 

 

 

$

810

 

 

(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

 

 

Nine Months Ended

 

 

September 30,
2023

 

 

October 1,
2022

 

 

 

September 30,
2023

 

 

October 1,
2022

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

269

 

 

 

$

225

 

 

 

 

$

723

 

 

 

$

636

 

 

Depreciation and amortization

 

 

99

 

 

 

 

97

 

 

 

 

 

292

 

 

 

 

288

 

 

Deferred income taxes and income taxes receivable/payable

 

 

(13

)

 

 

 

(53

)

 

 

 

 

(76

)

 

 

 

(139

)

 

Pension, net

 

 

(50

)

 

 

 

(40

)

 

 

 

 

(152

)

 

 

 

(123

)

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

52

 

 

 

 

25

 

 

 

 

 

(45

)

 

 

 

(23

)

 

Inventories

 

 

(106

)

 

 

 

(107

)

 

 

 

 

(659

)

 

 

 

(353

)

 

Accounts payable

 

 

(5

)

 

 

 

92

 

 

 

 

 

202

 

 

 

 

116

 

 

Captive finance receivables, net

 

 

(17

)

 

 

 

(6

)

 

 

 

 

(32

)

 

 

 

29

 

 

Other, net

 

 

29

 

 

 

 

115

 

 

 

 

 

465

 

 

 

 

532

 

 

Net cash from operating activities

 

 

258

 

 

 

 

348

 

 

 

 

 

718

 

 

 

 

963

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(79

)

 

 

 

(78

)

 

 

 

 

(224

)

 

 

 

(192

)

 

Net cash used in business acquisitions

 

 

(1

)

 

 

 

(3

)

 

 

 

 

(1

)

 

 

 

(201

)

 

Net proceeds from corporate-owned life insurance policies

 

 

1

 

 

 

 

(2

)

 

 

 

 

39

 

 

 

 

23

 

 

Proceeds from sale of property, plant and equipment

 

 

4

 

 

 

 

3

 

 

 

 

 

4

 

 

 

 

21

 

 

Finance receivables repaid

 

 

7

 

 

 

 

 

 

 

 

 

26

 

 

 

 

21

 

 

Other investing activities, net

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

44

 

 

Net cash from investing activities

 

 

(68

)

 

 

 

(80

)

 

 

 

 

(154

)

 

 

 

(284

)

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Decrease in short-term debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15

)

 

Principal payments on long-term debt and nonrecourse debt

 

 

(7

)

 

 

 

(4

)

 

 

 

 

(41

)

 

 

 

(227

)

 

Purchases of Textron common stock

 

 

(235

)

 

 

 

(200

)

 

 

 

 

(885

)

 

 

 

(639

)

 

Dividends paid

 

 

(4

)

 

 

 

(4

)

 

 

 

 

(12

)

 

 

 

(13

)

 

Other financing activities, net

 

 

35

 

 

 

 

5

 

 

 

 

 

61

 

 

 

 

33

 

 

Net cash from financing activities

 

 

(211

)

 

 

 

(203

)

 

 

 

 

(877

)

 

 

 

(861

)

 

Total cash flows from continuing operations

 

 

(21

)

 

 

 

65

 

 

 

 

 

(313

)

 

 

 

(182

)

 

Total cash flows from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

(2

)

 

Effect of exchange rate changes on cash and equivalents

 

 

(13

)

 

 

 

(22

)

 

 

 

 

(5

)

 

 

 

(49

)

 

Net change in cash and equivalents

 

 

(34

)

 

 

 

43

 

 

 

 

 

(319

)

 

 

 

(233

)

 

Cash and equivalents at beginning of period

 

 

1,750

 

 

 

 

1,841

 

 

 

 

 

2,035

 

 

 

 

2,117

 

 

Cash and equivalents at end of period

 

$

1,716

 

 

 

$

1,884

 

 

 

 

$

1,716

 

 

 

$

1,884

 

 

 
 

TEXTRON INC.

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