FORM 10-K

42 Consolidated Statements of Cash Flows continued For each of the years in the three-year period ended December 30, 2017 Manufacturing Group Finance Group (In millions) 2017 2016 2015 2017 2016 2015 Cash flows from operating activities Net income $ 248 $ 951 $ 683 $ 59 $ 11 $ 14 Less: Income (loss) from discontinued operations 1 119 (1) — — — Income from continuing operations 247 832 684 59 11 14 Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities: Non-cash items: Depreciation and amortization 435 437 449 12 12 12 Asset impairments 47 40 7 — — — Deferred income taxes 390 36 14 (44) 12 (10) Other, net 94 90 90 (4) 2 9 Changes in assets and liabilities: Accounts receivable, net (236) (33) (14) — — — Inventories 422 (347) (241) — — — Other assets (26) 104 (40) (1) (6) 4 Accounts payable (156) 215 43 — — — Accrued and other liabilities (108) (276) (144) (5) (5) (8) Income taxes, net 119 (174) 62 (41) (15) 9 Pension, net (277) 25 69 — — — Dividends received from Finance group — 29 63 — — — Other operating activities, net (4) 10 (4) — — — Net cash provided by (used in) operating activities of continuing operations 947 988 1,038 (24) 11 30 Net cash used in operating activities of discontinued operations (27) (2) (4) — — — Net cash provided by (used in) operating activities 920 986 1,034 (24) 11 30 Cash flows from investing activities Capital expenditures (423) (446) (420) — — — Net cash used in acquisitions (331) (186) (81) — — — Finance receivables repaid — — — 273 292 351 Finance receivables originated — — — (174) (173) (194) Other investing activities, net 9 11 5 41 23 40 Net cash provided by (used in) investing activities (745) (621) (496) 140 142 197 Cash flows from financing activities Proceeds from long-term debt 992 345 — 44 180 61 Principal payments on long-term debt and nonrecourse debt (704) (254) (100) (137) (203) (256) Purchases of Textron common stock (582) (241) (219) — — — Proceeds from exercise of stock options 52 36 32 — — — Dividends paid (21) (22) (22) — (29) (63) Other financing activities, net (3) (10) 1 (1) 1 (1) Net cash used in financing activities (266) (146) (308) (94) (51) (259) Effect of exchange rate changes on cash and equivalents 33 (28) (15) — — — Net increase (decrease) in cash and equivalents (58) 191 215 22 102 (32) Cash and equivalents at beginning of year 1,137 946 731 161 59 91 Cash and equivalents at end of year $ 1,079 $ 1,137 $ 946 $ 183 $ 161 $ 59 See Notes to the Consolidated Financial Statements.