UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  January 25, 2012
 
TEXTRON INC.
 (Exact name of Registrant as specified in its charter)

Delaware	 	1-5480	 	05-0315468	
(State of	 	(Commission File Number)	 	(IRS Employer	
Incorporation)	 	 	 	Identification Number)	
 
40 Westminster Street, Providence, Rhode Island  02903 
(Address of principal executive offices)
 
Registrant’s telephone number, including area code:  (401) 421-2800
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
 
o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o             Pre-commencement communications pursuant to Rule 13e-4(c)) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
Item 2.02         Results of Operations and Financial Condition
 
On January 25, 2012, Textron Inc. (“Textron”) issued a press release announcing its financial results for the fiscal quarter and year ended December 31, 2011.  This press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
 
A discussion of the reasons why management believes that the presentation of non-GAAP financial measures provides useful information to investors regarding Textron’s financial condition and results of operations is included in attachments to the press release attached hereto as Exhibit 99.1.
 
Item 9.01         Financial Statements and Exhibits
 
(d) Exhibits
 
The following exhibit is filed herewith:

Exhibit	 	 	
Number	 	Description	
 	 	 	
99.1	 	Press release dated January 25, 2012 related to earnings.	
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	TEXTRON INC.	
 	(Registrant)	

 	By:	/s/ Richard L. Yates	
 	 	Richard L. Yates	
 	 	Senior Vice President and Corporate Controller	

Date:  January 25, 2012
 
3 

 
EXHIBIT INDEX

Exhibit No.	 	Description	
 	 	 	
99.1	 	Press release dated January 25, 2012 related to earnings.	
 
4 

Exhibit 99.1

	 	
 	Corporate Communications	
 	Department	
 	 	
 	NEWS Release	

Investor Contacts:
Doug Wilburne – 401-457-2288
Becky Rosenbaum – 401-457-2288	 	FOR IMMEDIATE RELEASE	
 	 	 	
Media Contact:
David Sylvestre – 401-457-2362	 	 	
 
Textron Reports Strong Fourth Quarter
Manufacturing Operating Results and Cash Flow
 
Records Mark-to-Market Adjustment for Golf Mortgage Receivables and
Charge for Organizational Streamlining at Textron Systems
 
Initiates 2012 EPS Outlook at $1.80 - $2.00
 
Providence, Rhode Island — January 25, 2012 — Textron Inc. (NYSE: TXT) today reported a fourth quarter 2011 loss from continuing operations of $0.06 per share, compared to income of $0.20 per share in the fourth quarter of 2010. Last year’s fourth quarter result included $0.13 per share in special charges.
 
This year’s fourth quarter result included $0.55 in charges, consisting of a $0.41 per share mark-to-market adjustment at the Finance Segment to reflect the transfer to the held for sale classification of the remainder of the Golf Mortgage portfolio, a $0.14 per share loss associated with convertible note repurchases, $0.13 per share in the Textron Systems segment for intangible asset impairment and severance costs and a $0.13 per share gain related to the payment of a note receivable from the 2008 sale of the company’s Fluid & Power business.
 
Excluding the items described above, fourth quarter 2011 adjusted earnings per share from continuing operations were $0.49 per share and full-year 2011 earnings per share from continuing operations were $1.31 per share.
 
Total revenues in the quarter were $3.3 billion, up 4.1% from the fourth quarter of 2010, led by manufacturing revenues, which were up 4.6%.
 
Full-year manufacturing cash flow before pension contributions was $1.0 billion compared to $759 million last year.  The company contributed $421 million to its pension plans during the fourth quarter, bringing full-year contributions to $642 million. Textron’s consolidated net debt ended the year at $3.5 billion, down $1.5 billion from the end of last year.
 
At the end of the fourth quarter, as part of its continuing strategy to orderly liquidate its non-captive finance business, the company transferred the remainder of its Golf Mortgage portfolio to held for sale status and recorded a pretax charge of $186 million to reflect the current fair value of

 
these assets. Finance receivables ended the year at $2.9 billion, of which $950 million are non-captive.
 
“Fourth quarter operating results reflected outstanding performance at Bell, continued improvement at Cessna, good performance in our Industrial segment, and actions we’re taking to strengthen our competitive position at Systems in a difficult defense environment,” said Textron Chairman and CEO Scott C. Donnelly.
 
Donnelly continued, “We also liquidated another $386 million from our finance receivables during the quarter. With the mark-to-market adjustment, we’ve reached a notable milestone with our liquidation strategy, ending the year with less than $1 billion in non-captive finance receivables.”
 
Convertible Notes
 
During the fourth quarter, the company repurchased approximately $384 million in face value or 64% of its outstanding convertible notes at an overall cash cost of about $580 million.  This included $225 million in face value of notes purchased pursuant to its recent tender offer and an additional $159 million of notes purchased subsequent to the tender.
 
Outlook
 
Textron is forecasting 2012 revenues of approximately $12.5 billion, up about 11%.  Earnings per share from continuing operations are expected to be in the range of $1.80 to $2.00. Cash flow from continuing operations of the manufacturing group before pension contributions is estimated to be between $700 and $750 million with planned pension contributions of about $200 million.
 
Donnelly continued, “In 2012, we see relatively flat revenues at Textron Systems, modest growth at Industrial, and double digit growth at both Cessna and Bell.  We expect Bell’s commercial business to be particularly robust next year, as our investment in product development is driving strong order flow.”
 
Fourth Quarter Segment Results and Actions
 
Cessna
 
Revenues increased $51 million, reflecting the delivery of 67 new Citation jets in the quarter, compared with 79 in last year’s fourth quarter, more than offset by higher volumes of used jets, single engine aircraft and Caravans.
 
Segment profit increased $37 million primarily due to favorable performance, higher non-jet volume and a beneficial mix of jets.
 
Cessna backlog at the end of the fourth quarter was $1.9 billion, down $275 million from the end of the third quarter 2011.
 
Bell
 
Revenues increased $35 million in the fourth quarter from the same period in the prior year.   Bell delivered 7 V-22’s, 6 H-1’s and 62 commercial aircraft in the quarter compared to 7 V-22’s, 7 H-1’s and 71 commercial units in last year’s fourth quarter.
 
Segment profit increased $29 million, reflecting improved performance.
 
Textron Inc. 40 Westminster Street Providence, RI 02903-2596 (401) 421-2800
 
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Bell backlog at the end of the fourth quarter was $7.3 billion, up $981 million from the end of the third quarter 2011.
 
Textron Systems
 
Revenues at Textron Systems decreased $14 million. Segment profit decreased $63 million, primarily due to intangible asset impairment and severance charges.
 
Textron Systems’ backlog at the end of the fourth quarter was $1.3 billion, down $191 million from the end of the third quarter 2011.
 
Industrial
 
Industrial revenues increased $70 million, primarily due to higher overall volumes. Segment profit increased $24 million reflecting improved performance and the higher volume.
 
Finance
 
Finance segment revenues decreased $15 million compared to the fourth quarter of 2010, primarily due to reduced earnings on lower finance receivables.
 
Finance segment loss increased $175 million, primarily the result of the Golf Mortgage portfolio mark-to-market adjustment.
 
Since the end of the third quarter 2011, nonaccrual finance receivables decreased from $606 million to $321 million and sixty-day plus delinquencies decreased from $275 million to $166 million, both measures reflecting the impact of the transfer of the Golf Mortgage portfolio into the held for sale classification.
 
Finance receivables ended the quarter at $2.9 billion, down $652 million from the end of the third quarter 2011, reflecting liquidations of $386 million during the quarter, the $186 million mark-to-market adjustment and the transfer of $80 million of allowances for losses related to the classification of the Golf Mortgage portfolio to held for sale.
 
Conference Call Information
 
Textron will host its conference call today, January 25, 2012 at 8:00 a.m. (Eastern) to discuss its results and outlook.  The call will be available via webcast at www.textron.com or by direct dial at (877) 209-9920 in the U.S. or (612) 332-7488 outside of the U.S. (request the Textron Earnings Call).
 
In addition, the call will be recorded and available for playback beginning at 10:30 a.m. (Eastern) on Wednesday, January 25, 2012 by dialing (320) 365-3844; Access Code: 186401.
 
A package containing key data that will be covered on today’s call can be found in the Investor Relations section of the company’s website at www.textron.com.
 
About Textron Inc.
 
Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell Helicopter, Cessna Aircraft Company, Jacobsen, Kautex, Lycoming, E-Z-GO, Greenlee, and Textron Systems. More information is available at www.textron.com.
 
3 

 
###
 
Non-GAAP Measures
 
Adjusted earnings per share from continuing operations and manufacturing cash flow before pension contributions are non-GAAP measures that are defined and reconciled to GAAP in an attachment to this release.
 
Forward-looking Information
 
Certain statements in this release and other oral and written statements made by us from time to time are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements, which may describe strategies, goals, outlook or other non-historical matters, or project revenues, income, returns or other financial measures, often include words such as “believe,” “expect,” “anticipate,” “intend”, “plan,” “estimate,” “guidance”, “project”, “target”, “potential”, “will”, “should”, “could”, “likely”  or “may” and similar expressions intended to identify forward-looking statements.  These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements.  Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. In addition to those factors described in our Annual Report on Form 10-K under “Risk Factors”, among the factors that could cause actual results to differ materially from past and projected future results are the following:  changing priorities or reductions in the U.S. Government defense budget, including those related to military operations in foreign countries; changes in worldwide economic or political conditions that impact demand for our products, interest rates or foreign exchange rates; our ability to perform as anticipated and to control costs under contracts with the U.S. Government; the U.S. Government’s ability to unilaterally modify or terminate its contracts with us for the U.S. Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, or, under certain circumstances, to withhold payment or suspend or debar us as a contractor eligible to receive future contract awards; changes in foreign military funding priorities or budget constraints and determinations, or changes in government regulations or policies on the export and import of military and commercial products; our Finance segment’s ability to maintain portfolio credit quality or to realize full value of receivables and of assets acquired upon foreclosure of receivables; our ability to access the capital markets at reasonable rates; performance issues with key suppliers, subcontractors or business partners; legislative or regulatory actions impacting our operations or demand for our products; our ability to control costs and successfully implement various cost-reduction activities; the efficacy of research and development investments to develop new products or unanticipated expenses in connection with the launching of significant new products or programs; the timing of our new product launches or certifications of our new aircraft products; our ability to keep pace with our competitors in the introduction of new products and upgrades with features and technologies desired by our customers; the extent to which we are able to pass raw material price increases through to customers or offset such price increases by reducing other costs;  Increases in pension expenses or employee and retiree medical benefits; uncertainty in estimating reserves, including reserves established to address contingent liabilities, unrecognized tax benefits, or potential losses on TFC’s receivables;  difficult conditions in the financial markets which may adversely impact our customers’ ability to fund or finance purchases of our products; and continued volatility in the economy resulting in a prolonged downturn in the markets in which we do business.
 
4 

 
TEXTRON INC.
Revenues by Segment and Reconciliation of Segment Profit to Net Income (Loss)
(Dollars in millions, except per share amounts)
(Unaudited)

 	 	Three Months Ended	 	Twelve Months Ended	 	
 	 	December 31,
2011	 	January 1,
2011	 	December 31,
2011	 	January 1,
2011	 	
REVENUES	 	 	 	 	 	 	 	 	 	
MANUFACTURING:	 	 	 	 	 	 	 	 	 	
Cessna	 	$	1,011	 	$	960	 	$	2,990	 	$	2,563	 	
Bell	 	1,010	 	975	 	3,525	 	3,241	 	
Textron Systems	 	513	 	527	 	1,872	 	1,979	 	
Industrial	 	708	 	638	 	2,785	 	2,524	 	
 	 	3,242	 	3,100	 	11,172	 	10,307	 	
FINANCE	 	12	 	27	 	103	 	218	 	
Total revenues	 	$	3,254	 	$	3,127	 	$	11,275	 	$	10,525	 	
 	 	 	 	 	 	 	 	 	 	
SEGMENT PROFIT	 	 	 	 	 	 	 	 	 	
MANUFACTURING:	 	 	 	 	 	 	 	 	 	
Cessna	 	$	60	 	$	23	 	$	60	 	$	(29	)	
Bell	 	167	 	138	 	521	 	427	 	
Textron Systems (a)	 	(8	)	55	 	141	 	230	 	
Industrial	 	49	 	25	 	202	 	162	 	
 	 	268	 	241	 	924	 	790	 	
FINANCE (b)	 	(232	)	(57	)	(333	)	(237	)	
Segment profit	 	36	 	184	 	591	 	553	 	
 	 	 	 	 	 	 	 	 	 	
Corporate expenses and other, net (c)	 	(39	)	(48	)	(114	)	(137	)	
Interest expense, net for Manufacturing group	 	(27	)	(37	)	(140	)	(140	)	
Special charges (d)	 	—	 	(54	)	—	 	(190	)	
Income (loss) from continuing operations before income taxes	 	(30	)	45	 	337	 	86	 	
Income tax (expense) benefit (e)	 	13	 	18	 	(95	)	6	 	
Income (loss) from continuing operations	 	(17	)	63	 	242	 	92	 	
Discontinued operations, net of income taxes	 	(2	)	(3	)	—	 	(6	)	
Net income (loss)	 	$	(19	)	$	60	 	$	242	 	$	86	 	
 	 	 	 	 	 	 	 	 	 	
Earnings per share:	 	 	 	 	 	 	 	 	 	
Continuing operations	 	(0.06	)	0.20	 	0.79	 	0.30	 	
Discontinued operations	 	(0.01	)	(0.01	)	—	 	(0.02	)	
Net Income (Loss)	 	$	(0.07	)	$	0.19	 	$	0.79	 	$	0.28	 	
Average shares outstanding (f)	 	278,881,000	 	308,491,000	 	307,255,000	 	302,555,000	 	

(a)	Fourth quarter of 2011 includes a $41 million non-cash impairment charge to write down certain intangible assets and approximately $19 million in severance costs.	
 	 	
(b)	Fourth quarter of 2011 includes a $186 million non-cash initial mark-to-market adjustment for remaining finance receivables in the Golf Mortgage portfolio that were transferred to the held for sale classification in the quarter.	
 	 	
(c)	Fourth quarter of 2011 includes a $55 million loss on the extinguishment of convertible notes, which was substantially offset by a $52 million gain on collection of notes receivable from the sale of a business in 2008 that were collected in December.	
 	 	
(d)	Fourth quarter and full-year of 2010 includes restructuring costs of $54 million and $99 million, respectively, primarily for severance. Full-year 2010 also includes a $91 million non-cash charge to reclassify a foreign exchange loss from equity to the income statement as a result of substantially liquidating a Finance segment entity.	
 	 	
(e)	Full-year 2010 includes a $17 million tax benefit related to the above foreign exchange reclassification and an $11 million discrete tax charge related to the federal health-care legislation enacted in 2010.	
 	 	
(f)	For the fourth quarter of 2011, the potential dilutive effect of stock options, restricted stock units and the shares that could be issued upon the conversion of our 4.50% Convertible Senior Notes and upon the exercise of the related warrants was excluded from the computation of diluted weighted-average shares outstanding as the shares would have an anti-dilutive effect on the loss from continuing operations. Fully diluted shares were used to calculate earnings per share for the other reported periods.	

 
Textron Inc.
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)

 	 	December 31,
2011	 	January 1,
2011	 	
Assets	 	 	 	 	 	
Cash and equivalents	 	$	871	 	$	898	 	
Accounts receivable, net	 	856	 	892	 	
Inventories	 	2,402	 	2,277	 	
Other current assets	 	1,134	 	980	 	
Net property, plant and equipment	 	1,996	 	1,932	 	
Other assets	 	3,143	 	3,354	 	
Finance group assets	 	3,213	 	4,949	 	
Total Assets	 	$	13,615	 	$	15,282	 	
 	 	 	 	 	 	
Liabilities and Shareholders’ Equity	 	 	 	 	 	
Short-term debt and current portion of long-term debt	 	$	146	 	$	19	 	
Other current liabilities	 	2,785	 	2,638	 	
Other liabilities	 	2,826	 	2,993	 	
Long-term debt	 	2,313	 	2,283	 	
Finance group liabilities	 	2,800	 	4,377	 	
Total Liabilities	 	10,870	 	12,310	 	
 	 	 	 	 	 	
Total Shareholders’ Equity	 	2,745	 	2,972	 	
Total Liabilities and Shareholders’ Equity	 	$	13,615	 	$	15,282	 	

 
TEXTRON INC.
MANUFACTURING GROUP
Condensed Schedule of Cash Flows and Free Cash Flow GAAP to Non-GAAP Reconciliations
(In millions)
(Unaudited)

 	 	Three Months Ended	 	Twelve Months Ended	 	
 	 	December 31,	 	January 1,	 	December 31,	 	January 1,	 	
 	 	2011	 	2011	 	2011	 	2011	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	 	
Income from continuing operations	 	$	134	 	$	102	 	$	464	 	$	320	 	
Dividends received from TFC	 	—	 	150	 	179	 	505	 	
Capital contributions paid to TFC	 	(30	)	(155	)	(182	)	(383	)	
Depreciation and amortization	 	104	 	102	 	371	 	362	 	
Changes in working capital	 	152	 	267	 	54	 	(44	)	
Changes in other assets and liabilities and non-cash items	 	(118	)	(167	)	(125	)	(30	)	
Net cash from operating activities of continuing operations	 	242	 	299	 	761	 	730	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	 	
Capital expenditures	 	(152	)	(136	)	(423	)	(270	)	
Collection on notes receivable from a prior disposition	 	58	 	—	 	58	 	—	 	
Net cash used in acquisitions	 	(11	)	(10	)	(14	)	(57	)	
Other investing activities, net	 	(17	)	—	 	(44	)	(26	)	
Net cash from investing activities of continuing operations	 	(122	)	(146	)	(423	)	(353	)	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	 	
Proceeds from issuance of long-term debt	 	—	 	—	 	496	 	—	 	
Net intergroup borrowings	 	100	 	(52	)	(175	)	98	 	
Decrease in short-term debt	 	(227	)	—	 	—	 	—	 	
Principal payments on long-term debt	 	(16	)	—	 	(29	)	(130	)	
Settlement of a portion of convertible debt	 	(580	)	—	 	(580	)	—	 	
Purchase of capped call	 	(32	)	—	 	(32	)	—	 	
Payments on long-term line of credit facilities	 	—	 	—	 	—	 	(1,167	)	
Dividends paid	 	(5	)	(6	)	(22	)	(22	)	
Other financing activities, net	 	—	 	4	 	(18	)	6	 	
Net cash from financing activities of continuing operations	 	(760	)	(54	)	(360	)	(1,215	)	
Total cash flows from continuing operations	 	(640	)	99	 	(22	)	(838	)	
Total cash flows from discontinued operations	 	(2	)	(1	)	(5	)	(9	)	
Effect of exchange rate changes on cash and equivalents	 	(4	)	(2	)	—	 	(3	)	
Net change in cash and equivalents	 	(646	)	96	 	(27	)	(850	)	
Cash and equivalents at beginning of period	 	1,517	 	802	 	898	 	1,748	 	
Cash and equivalents at end of period	 	$	871	 	$	898	 	$	871	 	$	898	 	
 	 	 	 	 	 	 	 	 	 	
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliations:	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Net cash from operating activities of continuing operations - GAAP	 	$	242	 	$	299	 	$	761	 	$	730	 	
Less:	Capital expenditures	 	(152	)	(136	)	(423	)	(270	)	
 	Dividends received from TFC	 	—	 	(150	)	(179	)	(505	)	
Plus:	Capital contributions paid to TFC	 	30	 	155	 	182	 	383	 	
 	Proceeds on sale of property, plant and equipment	 	4	 	—	 	17	 	4	 	
 	Total pension contributions	 	421	 	365	 	642	 	417	 	
Manufacturing cash flow before pension contributions- Non-GAAP	 	$	545	 	$	533	 	$	1,000	 	$	759	 	

 	 	2012 Outlook	 	
Net cash from operating activities of continuing operations - GAAP	 	$950   -   $1,000	 	
Less:	Capital expenditures	 	(450)	 	
 	Dividends received from TFC	 	(260)	 	
Plus:	Capital contributions paid to TFC	 	260	 	
 	Total pension contributions	 	200	 	
Manufacturing cash flow before pension contributions- Non-GAAP	 	$700   -   $750	 	
 
Free cash flow is a measure generally used by investors, analysts and management to gauge a company’s ability to generate cash from operations in excess of that necessary to be reinvested to sustain and grow the business and fund its obligations.  Our definition of Manufacturing free cash flow adjusts net cash from operating activities of continuing operations for dividends received from TFC, capital contributions provided under the Support Agreement, capital expenditures, proceeds from the sale of property, plant and equipment and contributions to our pension plans.  Beginning in 2011, we changed our basis for projecting and measuring Manufacturing cash flow to adjust for all pension contributions, both mandatory and voluntary, so that the total impact of these contributions can be more clearly understood.  We believe that our calculation provides a relevant measure of liquidity and is a useful basis for assessing our ability to fund operations and obligations.  This measure is not a financial measure under GAAP and should be used in conjunction with GAAP cash measures provided in our Consolidated Statement of Cash Flows.  Prior periods have been recast to conform with this presentation.

 
TEXTRON INC.
Condensed Consolidated Schedule of Cash Flows
(In millions)
(Unaudited)

 	 	Three Months Ended	 	Twelve Months Ended	 	
 	 	December 31,	 	January 1,	 	December 31,	 	January 1,	 	
 	 	2011	 	2011	 	2011	 	2011	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	 	
Income (loss) from continuing operations	 	$	(17	)	$	63	 	$	242	 	$	92	 	
Depreciation and amortization	 	114	 	111	 	403	 	393	 	
Provision for losses on finance receivables	 	(15	)	15	 	12	 	143	 	
Changes in working capital	 	292	 	203	 	336	 	337	 	
Changes in other assets and liabilities and non-cash items	 	31	 	(166	)	75	 	28	 	
Net cash from operating activities of continuing operations	 	405	 	226	 	1,068	 	993	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	 	
Finance receivables originated or purchased	 	(38	)	(72	)	(187	)	(450	)	
Finance receivables repaid	 	159	 	370	 	824	 	1,635	 	
Proceeds on receivable sales	 	145	 	27	 	421	 	528	 	
Collection on notes receivable from a prior disposition	 	58	 	—	 	58	 	—	 	
Capital expenditures	 	(152	)	(136	)	(423	)	(270	)	
Net cash used in acquisitions	 	(11	)	(10	)	(14	)	(57	)	
Proceeds from sale of repossessed assets and properties	 	32	 	37	 	109	 	129	 	
Other investing activities, net	 	2	 	(5	)	55	 	34	 	
Net cash from investing activities of continuing operations	 	195	 	211	 	843	 	1,549	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	 	
Proceeds from issuance of long-term debt	 	135	 	184	 	926	 	231	 	
Decrease in short-term debt	 	(227	)	—	 	—	 	—	 	
Settlement of a portion of convertible debt	 	(580	)	—	 	(580	)	—	 	
Purchase of capped call	 	(32	)	—	 	(32	)	—	 	
Principal payments on long-term debt	 	(142	)	(378	)	(785	)	(2,241	)	
Payments on long-term line of credit facilities	 	(400	)	(300	)	(1,440	)	(1,467	)	
Dividends paid	 	(5	)	(6	)	(22	)	(22	)	
Other financing activities, net	 	—	 	4	 	(18	)	6	 	
Net cash from financing activities of continuing operations	 	(1,251	)	(496	)	(1,951	)	(3,493	)	
Total cash flows from continuing operations	 	(651	)	(59	)	(40	)	(951	)	
Total cash flows from discontinued operations	 	(2	)	(1	)	(5	)	(9	)	
Effect of exchange rate changes on cash and equivalents	 	(4	)	—	 	(1	)	(1	)	
Net change in cash and equivalents	 	(657	)	(60	)	(46	)	(961	)	
Cash and equivalents at beginning of period	 	1,542	 	991	 	931	 	1,892	 	
Cash and equivalents at end of period	 	$	885	 	$	931	 	$	885	 	$	931	 	

 
TEXTRON INC.
GAAP to Non-GAAP Reconciliation
Adjusted Income/Earnings Per Share from Continuing Operations
(In millions, except share data)
 
A reconciliation of income/(loss) from continuing operations in accordance with GAAP (Generally Accepted Accounting Principles) to adjusted income from continuing operations on a non-GAAP basis is provided below.

 	 	Q4 2011	 	Full Year 2011	 	
 	 	Pre-Tax	 	EPS	 	Pre-Tax	 	EPS	 	
Loss from continuing operations — GAAP	 	(30	)	(0.06	)	337	 	0.79	 	
Valuation allowance on transfer of Golf Mortgage portfolio to held for sale	 	186	 	0.41	 	186	 	0.39	 	
Loss on extinguishment of convertible notes	 	55	 	0.14	 	55	 	0.13	 	
Textron Systems intangible asset impairment and severance costs	 	60	 	0.13	 	60	 	0.12	 	
Gain on collection of notes receivable from a prior disposition	 	(59	)	(0.13	)	(59	)	(0.12	)	
Adjusted income from continuing operations - Non-GAAP	 	$	212	 	$	0.49	 	$	579	 	$	1.31	 	
 	 	 	 	 	 	 	 	 	 	
Diluted average shares outstanding (in thousands)	 	 	 	292,492	 	 	 	307,255	 	

Adjusted income from continuing operations is a non-GAAP financial measure. This measure is disclosed by management as additional information to investors in order to provide them with an alternative method for assessing our operating results. This measure is not in accordance with, or a substitute for, GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies.
 
Per share information for the fourth quarter is calculated using fully diluted shares outstanding.