SELECTED YEAR-OVER-YEAR FINANCIAL DATA

(Dollars in Millions, Except Per Share Amounts) 2018 2017
Total Revenues $13,972 $14,198
Total Segment Profit 1,267 1,169
Income from Continuing Operations—GAAP 1,222 306
Adjusted Income from Continuing Operations—Non-GAAP1 845 658

Per Share of Common Stock
Common Stock Price at Year-End $ 45.65 $ 56.59
Diluted Earnings from Continuing Operations—GAAP 4.83 1.14
Adjusted Diluted Earnings from Continuing Operations—Non-GAAP1 3.34 2.45
     

COMMON SHARES OUTSTANDING (In Thousands)
Diluted Average 253,237 268,750
Year-End 235,621 261,471

FINANCIAL POSITION
Total Assets $14,264 $15,340
Manufacturing Group Debt 3,066 3,088
Finance Group Debt 718 824
Shareholders’ Equity 5,192 5,647
Manufacturing Group Debt-to-Capital (Net of Cash) 29% 26%
Manufacturing Group Debt-to-Capital 37% 35%

KEY PERFORMANCE METRICS
Net Cash Provided by Operating Activities of Continuing Operations for Manufacturing Group—GAAP $1,127 $930
Manufacturing Cash Flow Before Pension Contributions—Non-GAAP1 784 872

1. Adjusted Income from Continuing Operations, Adjusted Diluted Earnings Per Share from Continuing Operations and Manufacturing Cash Flow Before Pension Contributions are Non-GAAP Measures. See page 7 for a Reconciliation to GAAP.

FOOTNOTE TO SELECTED YEAR-OVER-YEAR FINANCIAL DATA

ADJUSTED INCOME FROM CONTINUING OPERATIONS AND ADJUSTED DILUTED EARNINGS PER SHARE

Adjusted income from continuing operations and adjusted diluted earnings per share both exclude Gain on business disposition, net of taxes, Special charges, net of taxes, and the income tax expense (benefit) resulting from the Tax Cuts and Jobs Act (the “Tax Act”). The Gain on business disposition is not considered indicative of ongoing operations as it is a significant one-time transaction. We consider items recorded in Special charges such as enterprise-wide restructuring and acquisition-related restructuring, integration and transaction costs, to be of a non-recurring nature that is not indicative of ongoing operations. In addition, the impact from the Tax Act is not considered to be indicative of ongoing operations since it represents a one-time adjustment related to a significant tax reform of a non-recurring nature.

INCOME FROM CONTINUING OPERATIONS AND EARNINGS PER SHARE GAAP TO NON-GAAP RECONCILIATION

(Dollars in Millions, Except Per Share Amounts) 2018 2017
Income from continuing operations—GAAP $1,222 $306
Gain on business disposition, net of taxes (419) —
Special charges, net of taxes 56 86
Income tax expense (benefit) resulting from Tax Act (14) 266
Adjusted income from continuing operations—Non-GAAP $845 $658
Diluted earnings per share:
Income from continuing operations—GAAP $ 4.83 $1.14
Gain on business disposition, net of taxes (1.65) —
Special charges, net of taxes 0.22 0.32
Income tax expense (benefit) resulting from Tax Act (0.06) 0.99
Adjusted income from continuing operations—Non-GAAP $3.34 $2.45

MANUFACTURING CASH FLOW BEFORE PENSION CONTRIBUTIONS

Manufacturing cash flow before pension contributions adjusts net cash from operating activities of continuing operations (GAAP) for the following:

  • Deducts capital expenditures and includes proceeds from 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.
  • Adds back taxes paid on gain on business disposition as these cash outflows are not representative of 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.

MANUFACTURING CASH FLOW BEFORE PENSION CONTRIBUTIONS GAAP TO NON-GAAP RECONCILIATION

(In Millions) 2018      2017
Net cash provided by operating activities of continuing operations—GAAP $1,127 $930
Less: Capital expenditures (369) (423)
Plus: Dividends received from TFC (50) —
Total pension contributions 52 358
Taxes paid on gain on business disposition 10 —
Proceeds from the sale of property, plant and equipment 14 7
Manufacturing cash flow before pension contributions—Non-GAAP $784 $872