Textron

SELECTED FINANCIAL STATISTICS 2018-2014

(Dollars in millions, except where noted and per share amounts)	2018	2017	2016	2015	2014
Income Statement Data
Revenues	$13,972	$14,198	$13,788	$13,423	$13,878
Segment profit	1,267	1,169	1,309	1,255	1,214
Corporate expenses and other, net	(119)	(132)	(172)	(154)	(161)
Interest expense, net for Manufacturing group	(135)	(145)	(138)	(130)	(148)
Special charges	(73)	(130)	(123)	—	(52)
Gain on business disposition	444	—	—	—	—
Income tax expense	(162)	(456)	(33)	(273)	(248)
Effective tax rate	11.7%	59.8%	3.8%	28.1%	29.1%

Income from continuing operations	$1,222	$306	$843	$698	$605

Diluted EPS from continuing operations	$4.83	$1.14	$3.09	$2.50	$2.15

Balance Sheet Data—Manufacturing Group
Cash and equivalents	$987	$1,079	$1,137	$946	$731
Accounts receivable, net	1,024	1,363	1,064	1,047	1,035
Inventories	3,818	4,150	4,464	4,144	3,928
Property, plant and equipment, net	2,615	2,721	2,581	2,492	2,497
Goodwill	2,218	2,364	2,113	2,023	2,027
Total assets	13,247	14,171	14,078	13,392	13,076
Total debt	3,066	3,088	2,777	2,697	2,811
Total liabilities	8,246	8,740	8,661	8,603	9,028
Total Company shareholders' equity	5,192	5,647	5,574	4,964	4,272

Non-GAAP Cash Flow Calculations—Manufacturing Group
Net cash from operating activities of continuing operations—GAAP¹	$1,127	$930	$901	$1,030	$1,095
Less: Capital expenditures	(369)	(423)	(446)	(420)	(429)
Dividends received from TFC	(50)	—	(29)	(63)	—
Plus: Total pension contributions	52	358	50	68	76
Proceeds from the sale of property, plant and equipment	14	7	10	8	9
Taxes paid on gain on business disposition	10	—	—	—	—

Manufacturing cash flow before pension contributions—Non-GAAP^1,2	$784	$872	$486	$623	$751

Cash Flow Items—Manufacturing Group
Depreciation and amortization	$429	$435	$437	$449	$446
Net cash used in acquisitions	(23)	(331)	(186)	(81)	(1,628)
Net proceeds from business disposition	807	—	—	—	—
Net change in debt	(5)	288	91	(100)	880
Dividends paid	(20)	(21)	(22)	(22)	(28)
Purchases of Textron common stock	(1,783)	(582)	(241)	(219)	(340)
Total number of shares purchased (in thousands)	29,094	11,918	6,898	5,197	8,921

Key Ratios
Segment profit margin	9.1%	8.2%	9.5%	9.3%	8.7%
Selling and administrative expense as % of sales	9.1%	9.4%	9.6%	9.7%	9.8%
Inventory turns (based on FIFO)	2.8x	2.4x	2.3x	2.4x	2.7x
Ratio of income to fixed charges—Manufacturing group	9.16x	4.98x	5.92x	7.05x	5.43x
Debt-to-capital (net of cash)—Manufacturing group	29%	26%	23%	26%	33%

Stock-Related Information
Stock price at year-end	$45.65	$56.59	$48.56	$42.01	$42.17
Dividend payout ratio	2%	7%	3%	3%	4%
Dividends declared per share	$0.08	$0.08	$0.08	$0.08	$0.08

Other Statistics
Number of employees at year-end	35,000	37,000	36,000	35,000	34,000
Average revenues per employee (in thousands)	399	384	383	384	408

For the years 2017, 2016, 2015 and 2014, $17 million, $87 million, $8 million and $2 million, respectively, of net proceeds from the settlement of corporate-owned life insurance policies were reclassified from operating activities to investing activities as a result of the adoption of a new accounting standard at the beginning of 2018.

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.