| Debt
|
|
|
|
|
|
|
Severance | Curtailment | Contract | Asset | Total | ||||||||||||||||
(In millions) | Costs | Charges, Net | Terminations | Impairments | Restructuring | |||||||||||||||
Three Months Ended July 4, 2009
|
||||||||||||||||||||
Cessna
|
$ | 38 | $ | 26 | $ | 1 | $ | 52 | $ | 117 | ||||||||||
Industrial
|
4 | (4 | ) | 1 | — | 1 | ||||||||||||||
Finance
|
4 | 1 | — | — | 5 | |||||||||||||||
Corporate
|
3 | — | — | — | 3 | |||||||||||||||
Textron Systems
|
1 | 2 | — | — | 3 | |||||||||||||||
|
$ | 50 | $ | 25 | $ | 2 | $ | 52 | $ | 129 | ||||||||||
|
||||||||||||||||||||
Six Months Ended July 4, 2009
|
||||||||||||||||||||
Cessna
|
$ | 64 | $ | 26 | $ | 1 | $ | 52 | $ | 143 | ||||||||||
Industrial
|
5 | (4 | ) | 1 | — | 2 | ||||||||||||||
Finance
|
6 | 1 | 1 | — | 8 | |||||||||||||||
Corporate
|
5 | — | — | — | 5 | |||||||||||||||
Textron Systems
|
1 | 2 | — | — | 3 | |||||||||||||||
|
$ | 81 | $ | 25 | $ | 3 | $ | 52 | $ | 161 | ||||||||||
Severance | Curtailment | Contract | Asset | |||||||||||||||||
(In millions) | Costs | Charges, Net | Terminations | Impairment | Total | |||||||||||||||
Balance at January 3, 2009
|
$ | 36 | $ | — | $ | 1 | $ | — | $ | 37 | ||||||||||
Provisions
|
81 | 25 | 3 | 52 | 161 | |||||||||||||||
Non-cash settlement
|
— | (25 | ) | — | (52 | ) | (77 | ) | ||||||||||||
Cash paid
|
(65 | ) | — | (1 | ) | — | (66 | ) | ||||||||||||
Balance at July 4, 2009
|
$ | 52 | $ | — | $ | 3 | $ | — | $ | 55 | ||||||||||
|
Postretirement Benefits | ||||||||||||||||
Pension Benefits | Other Than Pensions | |||||||||||||||
July 4, | June 28, | July 4, | June 28, | |||||||||||||
(In millions) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Three Months Ended
|
||||||||||||||||
Service cost
|
$ | 30 | $ | 35 | $ | 2 | $ | 3 | ||||||||
Interest cost
|
79 | 76 | 10 | 10 | ||||||||||||
Expected return on plan assets
|
(98 | ) | (101 | ) | — | — | ||||||||||
Amortization of prior service cost (credit)
|
4 | 5 | (2 | ) | (2 | ) | ||||||||||
Amortization of net loss
|
2 | 5 | 2 | 4 | ||||||||||||
Net periodic benefit cost
|
$ | 17 | $ | 20 | $ | 12 | $ | 15 | ||||||||
|
||||||||||||||||
Six Months Ended
|
||||||||||||||||
Service cost
|
$ | 63 | $ | 71 | $ | 4 | $ | 5 | ||||||||
Interest cost
|
155 | 152 | 19 | 21 | ||||||||||||
Expected return on plan assets
|
(195 | ) | (203 | ) | — | — | ||||||||||
Amortization of prior service cost (credit)
|
9 | 10 | (3 | ) | (3 | ) | ||||||||||
Amortization of net loss
|
8 | 9 | 4 | 8 | ||||||||||||
Net periodic benefit cost
|
$ | 40 | $ | 39 | $ | 24 | $ | 31 | ||||||||
|
Three Months Ended | Six Months Ended | |||||||||||||||
July 4, | June 28, | July 4, | June 28, | |||||||||||||
(In millions) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Revenue
|
$ | — | $ | 236 | $ | 48 | $ | 447 | ||||||||
Income (loss) from discontinued operations
before income taxes
|
$ | — | $ | 14 | $ | (1 | ) | $ | 25 | |||||||
Income tax expense (benefit)
|
(4 | ) | 6 | (41 | ) | 11 | ||||||||||
|
||||||||||||||||
|
4 | 8 | 40 | 14 | ||||||||||||
Gain on sale, net of income taxes
|
— | — | 7 | — | ||||||||||||
Income from discontinued operations, net of
income taxes
|
$ | 4 | $ | 8 | $ | 47 | $ | 14 | ||||||||
|
Three Months Ended | Six Months Ended | |||||||||||||||
July 4, | June 28, | July 4, | June 28, | |||||||||||||
(In millions) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Net income (loss)
|
$ | (58 | ) | $ | 258 | $ | 28 | $ | 489 | |||||||
Other comprehensive income, net of income taxes:
|
||||||||||||||||
Unrealized gain on pension, net of income taxes of $48
|
82 | — | 82 | — | ||||||||||||
Pension curtailment, net of income taxes of $10
|
15 | — | 15 | — | ||||||||||||
Recognition of prior service cost and unrealized
losses on pension and postretirement benefits
|
5 | 10 | 12 | 20 | ||||||||||||
Deferred gains (losses) on hedge contracts
|
38 | — | 30 | (17 | ) | |||||||||||
Net deferred loss on retained interests
|
(7 | ) | (1 | ) | (9 | ) | — | |||||||||
Foreign currency translation and other
|
32 | 13 | 34 | (5 | ) | |||||||||||
Comprehensive income
|
$ | 107 | $ | 280 | $ | 192 | $ | 487 | ||||||||
|
July 4, | January 3, | |||||||
(In millions) | 2009 | 2009 | ||||||
Accounts receivable – Commercial
|
$ | 474 | $ | 496 | ||||
Accounts receivable – U.S. Government contracts
|
391 | 422 | ||||||
|
865 | 918 | ||||||
Allowance for doubtful accounts
|
(26 | ) | (24 | ) | ||||
|
$ | 839 | $ | 894 | ||||
July 4, | January 3, | |||||||
(In millions) | 2009 | 2009 | ||||||
Total managed and serviced finance receivables
|
$ | 9,868 | $ | 12,173 | ||||
Less: Nonrecourse participations sold to independent investors
|
(793 | ) | (820 | ) | ||||
Less: Third-party portfolio servicing
|
(430 | ) | (532 | ) | ||||
Total managed finance receivables
|
8,645 | 10,821 | ||||||
Less: Securitized receivables
|
(1,195 | ) | (2,248 | ) | ||||
Owned finance receivables
|
7,450 | 8,573 | ||||||
Less: Finance receivables held for sale
|
(613 | ) | (1,658 | ) | ||||
Finance receivables held for investment
|
6,837 | 6,915 | ||||||
Allowance for loan losses
|
(284 | ) | (191 | ) | ||||
Finance receivables held for investment, net
|
$ | 6,553 | $ | 6,724 | ||||
July 4, | January 3, | |||||||
(In millions) | 2009 | 2009 | ||||||
Impaired nonaccrual loans
|
$ | 629 | $ | 234 | ||||
Impaired accrual loans
|
96 | 19 | ||||||
Total impaired loans
|
$ | 725 | $ | 253 | ||||
|
July 4, | January 3, | |||||||
(In millions) | 2009 | 2009 | ||||||
Finished goods
|
$ | 1,281 | $ | 1,081 | ||||
Work in process
|
1,850 | 1,866 | ||||||
Raw materials
|
623 | 765 | ||||||
|
3,754 | 3,712 | ||||||
Progress/milestone payments
|
(753 | ) | (619 | ) | ||||
|
$ | 3,001 | $ | 3,093 | ||||
|
|
Six Months Ended | ||||||||
July 4, | June 28, | |||||||
(In millions) | 2009 | 2008 | ||||||
Accrual at the beginning of period
|
$ | 278 | $ | 312 | ||||
Provision
|
81 | 95 | ||||||
Settlements
|
(117 | ) | (96 | ) | ||||
Adjustments to prior accrual estimates
|
1 | (8 | ) | |||||
Other adjustments
|
— | (3 | ) | |||||
Accrual at the end of period
|
$ | 243 | $ | 300 | ||||
|
|
July 4, 2009 | January 3, 2009 | |||||||||||||||||||||||
(In millions) | (Level 1) | (Level 2) | (Level 3) | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Manufacturing group
|
||||||||||||||||||||||||
Foreign currency exchange
contracts
|
$ | — | $ | 25 | $ | — | $ | — | $ | 2 | $ | — | ||||||||||||
Finance group
|
||||||||||||||||||||||||
Derivative financial
instruments, net
|
— | 60 | — | — | 112 | — | ||||||||||||||||||
Interest-only securities
|
— | — | 3 | — | — | 12 | ||||||||||||||||||
Total assets
|
$ | — | $ | 85 | $ | 3 | $ | — | $ | 114 | $ | 12 | ||||||||||||
Liabilities
|
||||||||||||||||||||||||
Manufacturing group
|
||||||||||||||||||||||||
Forward contracts for
Textron Inc. stock
|
$ | 7 | $ | — | $ | — | $ | 98 | $ | — | $ | — | ||||||||||||
Foreign currency exchange
contracts
|
— | 8 | — | — | 84 | — | ||||||||||||||||||
Total liabilities
|
$ | 7 | $ | 8 | $ | — | $ | 98 | $ | 84 | $ | — | ||||||||||||
Three | Six | |||||||||||||||
Months Ended | Months Ended | |||||||||||||||
July 4, | June 28, | July 4, | June 28, | |||||||||||||
(In millions) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Balance, beginning of period
|
$ | 3 | $ | 52 | $ | 12 | $ | 43 | ||||||||
Net gains for the period:
|
||||||||||||||||
Increase due to securitization gains on sale of finance receivables
|
— | 21 | — | 42 | ||||||||||||
Change in value recognized in Finance revenues
|
— | — | — | 1 | ||||||||||||
Change in value recognized in other comprehensive income
|
2 | (2 | ) | (1 | ) | — | ||||||||||
Impairments recognized in earnings
|
(2 | ) | — | (8 | ) | — | ||||||||||
Collections
|
— | (18 | ) | — | (33 | ) | ||||||||||
Balance, end of period
|
$ | 3 | $ | 53 | $ | 3 | $ | 53 | ||||||||
(In millions) | ||||
Finance group
|
||||
Finance receivables held for sale
|
$ | 613 | ||
Impaired loans
|
451 | |||
Retained interests in securitizations, excluding interest-only securities
|
110 | |||
Other assets
|
75 | |||
July 4, 2009 | January 3, 2009 | |||||||||||||||
Carrying | Estimated | Carrying | Estimated | |||||||||||||
(In millions) | Value | Fair Value | Value | Fair Value | ||||||||||||
Manufacturing group
|
||||||||||||||||
Debt
|
$ | (3,265 | ) | $ | (2,954 | ) | $ | (2,438 | ) | $ | (2,074 | ) | ||||
Finance group
|
||||||||||||||||
Finance receivables held for investment
|
5,615 | 4,747 | 5,665 | 4,828 | ||||||||||||
Retained interest in securitizations,
excluding interest only securities
|
6 | 6 | 188 | 178 | ||||||||||||
Investment in other marketable securities
|
80 | 60 | 95 | 78 | ||||||||||||
Debt
|
(7,057 | ) | (6,087 | ) | (7,388 | ) | (6,507 | ) | ||||||||
|
Assets | Liabilities | |||||||||||||||
July 4, | January 3, | July 4, | January 3, | |||||||||||||
(In millions) | 2009 | 2009 | 2009 | 2009 | ||||||||||||
Derivatives designated as hedging instruments
|
||||||||||||||||
Fair value hedges
|
||||||||||||||||
Finance group
|
||||||||||||||||
Interest rate exchange contracts
|
$ | 65 | $ | 112 | $ | (12 | ) | $ | (7 | ) | ||||||
Total fair value hedges
|
65 | 112 | (12 | ) | (7 | ) | ||||||||||
Cash flow hedges
|
||||||||||||||||
Manufacturing group
|
||||||||||||||||
Foreign currency exchange contracts
|
18 | 2 | (8 | ) | (41 | ) | ||||||||||
Forward contracts for Textron Inc. stock
|
— | — | (7 | ) | (98 | ) | ||||||||||
Finance group
|
||||||||||||||||
Cross-currency interest rate exchange contracts
|
12 | 21 | (1 | ) | (1 | ) | ||||||||||
Total cash flow hedges
|
30 | 23 | (16 | ) | (140 | ) | ||||||||||
Total derivatives designated as hedging instruments
|
$ | 95 | $ | 135 | $ | (28 | ) | $ | (147 | ) | ||||||
Derivatives not designated as hedging instruments
|
||||||||||||||||
Manufacturing group
|
||||||||||||||||
Foreign currency exchange contracts
|
$ | 7 | $ | — | $ | — | $ | (43 | ) | |||||||
Finance group
|
||||||||||||||||
Foreign currency exchange contracts
|
— | — | (7 | ) | — | |||||||||||
Interest rate exchange contracts
|
— | — | — | (13 | ) | |||||||||||
Total derivatives not designated as hedging instruments
|
$ | 7 | $ | — | $ | (7 | ) | $ | (56 | ) | ||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
July 4, | June 28, | July 4, | June 28, | |||||||||||||||||
(In millions) | Gain (Loss) Location | 2009 | 2008 | 2009 | 2008 | |||||||||||||||
Finance group
|
||||||||||||||||||||
Interest rate exchange contracts
|
Interest expense, net | $ | (19 | ) | $ | (37 | ) | $ | (15 | ) | $ | 13 | ||||||||
Interest rate exchange contracts
|
Finance charges | 8 | 1 | 6 | (1 | ) | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
(In millions) | Gain (Loss) Location | July 4, 2009 |
June 28, 2008 |
July 4, 2009 |
June 28, 2008 |
|||||||||||||||
Manufacturing group
|
||||||||||||||||||||
Foreign currency exchange contracts
|
Cost of sales | $ | (4 | ) | $ | 1 | $ | (9 | ) | $ | 4 | |||||||||
Forward contracts for Textron Inc. stock
|
Selling and administrative | (2 | ) | 2 | (4 | ) | 6 | |||||||||||||
July 4, | June 28, | |||||||
(In millions) | 2009 | 2008 | ||||||
Manufacturing group
|
||||||||
Foreign currency exchange contracts
|
$ | 8 | $ | 21 | ||||
Forward contracts for Textron Inc. stock
|
(4 | ) | — | |||||
|
|
Three Months Ended | Six Months Ended | |||||||||||||||
July 4, | June 28, | July 4, | June 28, | |||||||||||||
(In millions) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
REVENUES
|
||||||||||||||||
MANUFACTURING:
|
||||||||||||||||
Cessna
|
$ | 871 | $ | 1,501 | $ | 1,640 | $ | 2,747 | ||||||||
Bell
|
670 | 698 | 1,412 | 1,272 | ||||||||||||
Textron Systems
|
477 | 467 | 895 | 986 | ||||||||||||
Industrial
|
508 | 841 | 983 | 1,594 | ||||||||||||
|
2,526 | 3,507 | 4,930 | 6,599 | ||||||||||||
FINANCE
|
86 | 177 | 208 | 391 | ||||||||||||
Total revenues
|
$ | 2,612 | $ | 3,684 | $ | 5,138 | $ | 6,990 | ||||||||
SEGMENT OPERATING PROFIT
|
||||||||||||||||
MANUFACTURING:
|
||||||||||||||||
Cessna (a)
|
$ | 48 | $ | 262 | $ | 138 | $ | 469 | ||||||||
Bell
|
72 | 68 | 141 | 121 | ||||||||||||
Textron Systems
|
55 | 60 | 107 | 127 | ||||||||||||
Industrial
|
12 | 44 | 3 | 85 | ||||||||||||
|
187 | 434 | 389 | 802 | ||||||||||||
FINANCE
|
(99 | ) | 13 | (165 | ) | 55 | ||||||||||
Segment profit
|
88 | 447 | 224 | 857 | ||||||||||||
Special charges
|
(129 | ) | — | (161 | ) | — | ||||||||||
Corporate expenses and other, net
|
(45 | ) | (43 | ) | (80 | ) | (84 | ) | ||||||||
Interest expense, net for Manufacturing group
|
(34 | ) | (29 | ) | (62 | ) | (59 | ) | ||||||||
Income (loss) from continuing operations before income taxes
|
$ | (120 | ) | $ | 375 | $ | (79 | ) | $ | 714 | ||||||
(a) | During the first quarter of 2009, we sold the assets of CESCOM, Cessna’s aircraft maintenance tracking service line, resulting in a pre-tax gain of $50 million. |