Delaware
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I-5480
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05-0315468
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(State of
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(Commission File Number)
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(IRS Employer
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Incorporation)
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Identification Number)
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TEXTRON
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Exhibit 99.1
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Corporate Communications
Department
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NEWS Release
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Investor Contacts:
Doug Wilburne – 401-457-2288
Becky Rosenbaum – 401-457-2288
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FOR IMMEDIATE RELEASE
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Media Contact:
Michael Maynard – 401-457-2474
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Textron Reports First Quarter Results
Reiterates 2011 Guidance
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·
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Changing priorities or reductions in the U.S. Government defense budget, including those related to military operations in foreign countries;
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Changes in worldwide economic or political conditions that impact demand for our products, interest rates or foreign exchange rates;
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·
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Our ability to perform as anticipated and to control costs under contracts with the U.S. Government;
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·
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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 suspend or debar us as a contractor eligible to receive future contract awards;
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·
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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;
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·
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Our Finance segment’s ability to maintain portfolio credit quality or to realize full value of receivables and of assets acquired upon foreclosure of receivables;
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·
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Textron Financial Corporation’s (“TFC”) ability to maintain certain minimum levels of financial performance required under its committed bank line of credit and under Textron’s support agreement with TFC;
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Our ability to access the capital markets at reasonable rates;
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Performance issues with key suppliers, subcontractors or business partners;
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Legislative or regulatory actions impacting our operations or demand for our products;
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·
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Our ability to control costs and successfully implement various cost-reduction activities;
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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;
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The timing of our new product launches or certifications of our new aircraft products;
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Our ability to keep pace with our competitors in the introduction of new products and upgrades with features and technologies desired by our customers;
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The extent to which we are able to pass raw material price increases through to customers or offset such price increases by reducing other costs;
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Increases in pension expenses or employee and retiree medical benefits;
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·
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Uncertainty in estimating reserves, including reserves established to address contingent liabilities, unrecognized tax benefits, or potential losses on TFC’s receivables;
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·
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Difficult conditions in the financial markets which may adversely impact our customers’ ability to fund or finance purchases of our products; and
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·
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Continued volatility in the economy resulting in a prolonged downturn in the markets in which we do business.
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Three Months Ended
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April 2, 2011
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April 3, 2010
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REVENUES
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MANUFACTURING:
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Cessna
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$ | 556 | $ | 433 | |||||
Bell
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749 | 618 | |||||||
Textron Systems
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445 | 458 | |||||||
Industrial
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703 | 625 | |||||||
2,453 | 2,134 | ||||||||
FINANCE
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26 | 76 | |||||||
Total revenues
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$ | 2,479 | $ | 2,210 | |||||
SEGMENT PROFIT
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MANUFACTURING:
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Cessna
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$ | (38 | ) | $ | (24 | ) | |||
Bell
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91 | 74 | |||||||
Textron Systems
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53 | 55 | |||||||
Industrial
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61 | 49 | |||||||
167 | 154 | ||||||||
FINANCE
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(44 | ) | (58 | ) | |||||
Segment profit
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123 | 96 | |||||||
Corporate expenses and other, net
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(39 | ) | (37 | ) | |||||
Interest expense, net for Manufacturing group
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(38 | ) | (36 | ) | |||||
Special charges (a)
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- | (12 | ) | ||||||
Income from continuing operations
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before income taxes
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46 | 11 | |||||||
Income tax expense (a)
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(15 | ) | (15 | ) | |||||
Income (loss) from continuing operations
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31 | (4 | ) | ||||||
Discontinued operations, net of income taxes
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(2 | ) | (4 | ) | |||||
Net income (loss)
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$ | 29 | $ | (8 | ) | ||||
Earnings per share (b):
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Income (loss) from continuing operations
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$ | 0.10 | $ | (0.01 | ) | ||||
Discontinued operations, net of income taxes
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(0.01 | ) | (0.02 | ) | |||||
Net income (loss)
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$ | 0.09 | $ | (0.03 | ) | ||||
Average shares outstanding (b)
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319,119,000 | 273,174,000 |
(a)
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Special charges for the three months ended April 3, 2010 include two items: pre-tax restructuring costs of $12 million primarily for severance, reflected in Special charges expense; as well as an $11 million discrete tax charge related to the federal health-care legislation enacted in 2010 recorded in Income tax expense.
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(b)
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For the three months ended April 2, 2011, fully diluted shares were used to calculate EPS. For the three months ended April 3, 2010, the potential dilutive effect of stock options, restricted stock units and the shares that could be issued upon the conversion of our 4.50% Convertible Senior Notes and upon the exercise of the related warrants was excluded from the computation of diluted weighted-average shares outstanding as the shares would have an anti-dilutive effect on the loss from continuing operations.
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((In millions)
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April 2,
2011
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January 1,
2011
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Assets
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Cash and equivalents
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$ | 986 | $ | 898 | ||||
Accounts receivable, net
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910 | 892 | ||||||
Inventories
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2,453 | 2,277 | ||||||
Other current assets
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1,050 | 980 | ||||||
Net property, plant and equipment
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1,950 | 1,932 | ||||||
Other assets
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3,302 | 3,354 | ||||||
Textron Finance assets
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4,408 | 4,949 | ||||||
Total Assets
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$ | 15,059 | $ | 15,282 | ||||
Liabilities and Shareholders' Equity
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Short-term debt and current portion of long-term debt
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$ | 216 | $ | 19 | ||||
Other current liabilities
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2,577 | 2,638 | ||||||
Other liabilities
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2,986 | 2,993 | ||||||
Long-term debt
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2,333 | 2,283 | ||||||
Textron Finance liabilities
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3,895 | 4,377 | ||||||
Total Liabilities
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12,007 | 12,310 | ||||||
Total Shareholders’ Equity
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3,052 | 2,972 | ||||||
Total Liabilities and Shareholders’ Equity
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$ | 15,059 | $ | 15,282 |
For the Three
Months Ended
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(In millions)
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April 2,
2011
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April 3,
2010
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Cash flows from operating activities:
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Income from continuing operations
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$ | 62 | $ | 35 | ||||
Dividends received from TFC
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130 | 125 | ||||||
Capital contributions paid to TFC
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(63 | ) | (75 | ) | ||||
Depreciation and amortization
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87 | 82 | ||||||
Changes in working capital
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(243 | ) | (270 | ) | ||||
Changes in other assets and liabilities and non-cash items
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100 | 37 | ||||||
Net cash from operating activities of continuing operations
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73 | (66 | ) | |||||
Cash flows from investing activities:
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Capital expenditures
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(78 | ) | (38 | ) | ||||
Other investing activities, net
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(43 | ) | (37 | ) | ||||
Net cash from investing activities of continuing operations
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(121 | ) | (75 | ) | ||||
Cash flows from financing activities:
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Increase in short-term debt
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203 | — | ||||||
Principal payments on long-term debt
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(7 | ) | (11 | ) | ||||
Net intergroup borrowings
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(60 | ) | (150 | ) | ||||
Proceeds on option exercises
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3 | — | ||||||
Dividends paid
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(5 | ) | (5 | ) | ||||
Other financing activities, net
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(5 | ) | — | |||||
Net cash from financing activities of continuing operations
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129 | (166 | ) | |||||
Total cash flows from continuing operations
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81 | (307 | ) | |||||
Total cash flows from discontinued operations
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(1 | ) | 1 | |||||
Effect of exchange rate changes on cash and equivalents
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8 | (12 | ) | |||||
Net change in cash and equivalents
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88 | (318 | ) | |||||
Cash and equivalents at beginning of period
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898 | 1,748 | ||||||
Cash and equivalents at end of period
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$ | 986 | $ | 1,430 |
Net cash from operating activities of continuing operations – GAAP
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$ | 73 | $ | (66 | ) | |||
Less: Capital expenditures
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(78 | ) | (38 | ) | ||||
Dividends received from TFC
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(130 | ) | (125 | ) | ||||
Plus: Capital contributions paid to TFC
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63 | 75 | ||||||
Proceeds on sale of property, plant and equipment
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1 | 1 | ||||||
Total pension contributions
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16 | 19 | ||||||
Manufacturing cash flow before pension contributions – Non-GAAP
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$ | (55 | ) | $ | (134 | ) |
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2011 Outlook
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Net cash from operating activities of continuing operations - GAAP
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$
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1,000
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-
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$
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1,050
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Less: Capital expenditures
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(430)
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Dividends received from TFC
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(210)
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Plus: Capital contributions paid to TFC
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190
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Total pension contributions
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250
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Manufacturing cash flow before pension contributions – Non-GAAP
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$
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800
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-
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$
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850
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For the Three
Months Ended
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(In millions)
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April 2, 2011
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April 3, 2010
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Cash flows from operating activities:
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Income (loss) from continuing operations
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$ | 31 | $ | (4 | ) | |||
Depreciation and amortization
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95 | 90 | ||||||
Provision for losses on finance receivables
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12 | 55 | ||||||
Changes in working capital
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(208 | ) | (270 | ) | ||||
Changes in other assets and liabilities and non-cash items
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125 | 40 | ||||||
Net cash from operating activities of continuing operations
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55 | (89 | ) | |||||
Cash flows from investing activities:
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Finance receivables originated or purchased
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(76 | ) | (145 | ) | ||||
Finance receivables repaid
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290 | 501 | ||||||
Proceeds on receivables, including securitizations
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168 | 277 | ||||||
Capital expenditures
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(78 | ) | (38 | ) | ||||
Proceeds from sale of repossessed assets and properties
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28 | 32 | ||||||
Other investing activities, net
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23 | 12 | ||||||
Net cash from investing activities of continuing operations
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355 | 639 | ||||||
Cash flows from financing activities:
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Increase in short-term debt
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203 | — | ||||||
Net borrowings under line of credit facilities
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(250 | ) | — | |||||
Principal payments on long-term debt
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(417 | ) | (936 | ) | ||||
Proceeds from issuance of long-term debt
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144 | 20 | ||||||
Proceeds on option exercises
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3 | — | ||||||
Dividends paid
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(5 | ) | (5 | ) | ||||
Other financing activities, net
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(5 | ) | — | |||||
Net cash from financing activities of continuing operations
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(327 | ) | (921 | ) | ||||
Total cash flows from continuing operations
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83 | (371 | ) | |||||
Total cash flows from discontinued operations
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(1 | ) | 1 | |||||
Effect of exchange rate changes on cash and equivalents
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9 | (13 | ) | |||||
Net change in cash and equivalents
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91 | (383 | ) | |||||
Cash and equivalents at beginning of period
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931 | 1,892 | ||||||
Cash and equivalents at end of period
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$ | 1,022 | $ | 1,509 |