| (Dollars in millions, except per share amounts) | 2018 | 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |
| Revenues1 | ||||||||||
| Textron Aviation | $1,010 | $1,276 | $1,133 | $1,552 | $4,971 | $970 | $1,171 | $1,154 | $1,391 | $4,686 |
| Bell | 752 | 831 | 770 | 827 | 3,180 | 697 | 825 | 812 | 983 | 3,317 |
| Textron Systems | 387 | 380 | 352 | 345 | 1,464 | 416 | 477 | 458 | 489 | 1,840 |
| Industrial | 1,131 | 1,222 | 930 | 1,008 | 4,291 | 992 | 1,113 | 1,042 | 1,139 | 4,286 |
| Finance | 16 | 17 | 15 | 18 | 66 | 18 | 18 | 18 | 15 | 69 |
| Total Revenues | $3,296 | $3,726 | $3,200 | $3,750 | $13,972 | $3,093 | $3,604 | $3,484 | $4,017 | $14,198 |
| Segment Profit2 | ||||||||||
| Textron Aviation | $72 | $104 | $99 | $170 | $445 | $36 | $54 | $93 | $120 | $303 |
| Bell | 87 | 117 | 113 | 108 | 425 | 83 | 112 | 106 | 114 | 415 |
| Textron Systems | 50 | 40 | 29 | 37 | 156 | 20 | 42 | 40 | 37 | 139 |
| Industrial | 64 | 80 | 1 | 73 | 218 | 76 | 82 | 49 | 83 | 290 |
| Finance | 6 | 5 | 3 | 9 | 23 | 4 | 5 | 7 | 6 | 22 |
| Total Segment Profit | $279 | $346 | $245 | $397 | $1,267 | $219 | $295 | $295 | $360 | $1,169 |
| Segment Profit Margins | ||||||||||
| Textron Aviation | 7.1% | 8.2% | 8.7% | 11.0% | 9.0% | 3.7% | 4.6% | 8.1% | 8.6% | 6.5% |
| Bell | 11.6% | 14.1% | 14.7% | 13.1% | 13.4% | 11.9% | 13.6% | 13.1% | 11.6% | 12.5% |
| Textron Systems | 12.9% | 10.5% | 8.2% | 10.7% | 10.7% | 4.8% | 8.8% | 8.7% | 7.6% | 7.6% |
| Industrial | 5.7% | 6.5% | 0.1% | 7.2% | 5.1% | 7.7% | 7.4% | 4.7% | 7.3% | 6.8% |
| Finance | 37.5% | 29.4% | 20.0% | 50.0% | 34.8% | 22.2% | 27.8% | 38.9% | 40.0% | 31.9% |
| Total Profit Margin | 8.5% | 9.3% | 7.7% | 10.6% | 9.1% | 7.1% | 8.2% | 8.5% | 9.0% | 8.2% |
| Corporate expenses and other, net | $(27) | $(51) | $(29) | $(12) | $(119) | $(27) | $(31) | $(30) | $(44) | $(132) |
| Interest expense, net for the Manufacturing group | (34) | (35) | (32) | (34) | (135) | (34) | (36) | (37) | (38) | (145) |
| Special charges3 | — | — | — | (73) | (73) | (37) | (13) | (25) | (55) | (130) |
| Gain on business disposition4 | — | — | 444 | — | 444 | — | — | — | — | — |
| Income tax expense5 | (29) | (36) | (65) | (32) | (162) | (21) | (62) | (44) | (329) | (456) |
| Income (loss) from Continuing Operations — GAAP | $189 | $224 | $563 | $246 | $1,222 | $100 | $153 | $159 | $(106) | $306 |
| Gain on business disposition, net of taxes | — | — | (410) | (9) | (419) | — | — | — | — | — |
| Special charges, net of taxes | — | — | — | 56 | 56 | 25 | 9 | 15 | 37 | 86 |
| Income tax expense (benefit) resulting from the Tax Cuts and Jobs Act |
— | — | — | (14) | (14) | — | — | — | 266 | 266 |
| Adjusted Income from Continuing Operations—Non-GAAP6 | $189 | $224 | $153 | $279 | $845 | $125 | $162 | $174 | $197 | $658 |
| Diluted EPS from Continuing Operations—GAAP7 | $0.72 | $0.87 | $2.26 | $1.02 | $4.83 | $0.37 | $0.57 | $0.60 | $(0.40) | $1.14 |
| Gain on business disposition, net of taxes | $— | $— | $(1.65) | $(0.04) | $(1.65) | — | — | — | — | — |
| Special charges, net of taxes | — | — | — | 0.23 | 0.22 | 0.09 | 0.03 | 0.05 | 0.14 | 0.32 |
| Income tax expense (benefit) resulting from the Tax Cuts and Jobs Act |
— | — | — | (0.06) | (0.06) | — | — | — | 1.00 | 0.99 |
| Adjusted Diluted EPS from Continuing Operations—Non-GAAP6,8 |
$0.72 | $0.87 | $0.61 | $1.15 | $3.34 | $0.46 | $0.60 | $0.65 | $0.74 | $2.45 |
| 1 | At the beginning of 2018, we adopted the new revenue recognition standard using a modified retrospective basis and as a result, the comparative information has not been restated and is reported under the accounting standards in effect for these periods. |
| 2 | Segment profit is an important measure used for evaluating performance and for decision-making purposes. Segment profit for the manufacturing segments excludes interest expense, certain corporate expenses, gains/losses on major business dispositions and special charges. The measurement for the Finance segment includes interest income and expense along with intercompany interest income and expense. |
| 3 | Special charges of $73 million were recorded in the fourth quarter of 2018 under a restructuring plan for the Textron Specialized Vehicles businesses within our Industrial segment that was initiated in December 2018. Special charges related to our 2016 restructuring plan were $15 million, $12 million, $15 million and $48 million in the first, second, third and fourth quarters of 2017, respectively. In addition, we recorded special charges of $22 million, $1 million, $10 million and $7 million in the first, second, third and fourth quarters of 2017, respectively, related to the Arctic Cat acquisition, which included restructuring, integration and transaction costs. |
| 4 | On July 2, 2018, Textron completed the sale of the Tools & Test Equipment product line which resulted in an after-tax gain of $419 million. |
| 5 | Income tax expense for the fourth quarter of 2017 included a $266 million charge to reflect our provisional estimate of the net impact of the Tax Cuts and Jobs Act (the "Tax Act"). We completed our analysis of this legislation in the fourth quarter of 2018 and recorded a $14 million income tax benefit. |
| 6 | 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 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. |
| 7 | For the fourth quarter of 2017, the diluted average shares outstanding excluded potential common shares (stock options) due to their antidilutive effect resulting from the net loss. |
| 8 | The non-GAAP per share information for the fourth quarter of 2017 is calculated using diluted average shares outstanding of 266,099,000. |