SELECTED YEAR-OVER-YEAR FINANCIAL DATA

(Dollars in Millions, Except Per Share Amounts) 2019 2018
Total Revenues $13,630 $13,972
Total Segment Profit 1,270 1,267
Net Income—GAAP 815 1,222
Adjusted Net Income—Non-GAAP1 870 845

Per Share of Common Stock
Common Stock Price at Year-End $  44.74 $  45.65
Diluted Net Income—GAAP 3.50 4.83
Adjusted Diluted Net Income—Non-GAAP1 3.74 3.34
     

COMMON SHARES OUTSTANDING (In Thousands)
Diluted Average 232,709 253,237
Year-End 227,956 235,621

FINANCIAL POSITION
Total Assets $15,018 $14,264
Manufacturing Group Debt 3,124 3,066
Finance Group Debt 686 718
Shareholders’ Equity 5,518 5,192
Manufacturing Group Debt-to-Capital (Net of Cash) 26% 29%
Manufacturing Group Debt-to-Capital 36% 37%

KEY PERFORMANCE METRICS
Net Cash Provided by Operating Activities of Continuing Operations for Manufacturing Group—GAAP $     960 $  1,127
Manufacturing Cash Flow Before Pension Contributions—Non-GAAP1 642 784

1. Adjusted Net Income, Adjusted Diluted Earnings Per Share and Manufacturing Cash Flow Before Pension Contributions are Non-GAAP Measures.

FOOTNOTE TO SELECTED YEAR-OVER-YEAR FINANCIAL DATA

ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE

Adjusted net income and adjusted diluted earnings per share both exclude Special charges, net of taxes, Gain on business disposition, net of taxes, and the income tax benefit resulting from the Tax Cuts and Jobs Act (the “Tax Act”). 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. The Gain on business disposition is not considered indicative of ongoing operations as it is a significant one-time transaction related to the sale of our Tools and Test product line. 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.

NET INCOME AND DILUTED EARNINGS PER SHARE GAAP TO NON-GAAP RECONCILIATION

(Dollars in Millions, Except Per Share Amounts) 2019 2018
Net income—GAAP $ 815 $1,222
Special charges, net of taxes 55 56
Gain on business disposition, net of taxes — (419)
Income tax benefit resulting from Tax Act — (14)
Adjusted net income—Non-GAAP $ 870 $   845
Diluted earnings per share:
Net income—GAAP $3.50 $  4.83
Special charges, net of taxes 0.24 0.22
Gain on business disposition, net of taxes — (1.65)
Income tax benefit resulting from Tax Act — (0.06)
Adjusted net income—Non-GAAP $3.74 $  3.34

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) 2019 2018
Net cash provided by operating activities of continuing operations—GAAP $960 $1,127
Less: Capital expenditures (339) (369)
Dividends received from TFC (50) (50)
Plus: Total pension contributions 51 52
Taxes paid on gain on business disposition 11 10
Proceeds from the sale of property, plant and equipment 9 14
Manufacturing cash flow before pension contributions—Non-GAAP $642 $   784