E-Z-GO 2003 Annual Report Download - page 27

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Cash used by financing activities for Textron Manufacturing totaled $469 million in 2003, $803 million in
2002 and $329 million in 2001. During 2003, Textron Manufacturing issued $250 million in term notes
under Textron Inc.’s existing shelf registration filed with the Securities and Exchange Commission. The
proceeds were utilized in the redemption of $500 million in mandatorily redeemable preferred securities
in July 2003.
Cash provided (used) by financing activities for Textron Finance totaled $(354) million in 2003, $786 mil-
lion in 2002 and $(405) million in 2001. These changes are largely due to issuances of term notes and
principal payments on debt. The cash used in 2003 primarily relates to the paydown of commercial
paper and other short-term debt at year-end from the proceeds received from receivable sales in the
fourth quarter. In addition, in 2003, under new and existing shelf registration statements, Textron Finance
issued $1.2 billion of term notes, primarily in U.S. and Canadian markets. In 2002, Textron Finance
issued $2.0 billion of term notes to refinance maturing term debt and to repay the 2001 advance of $510
million from Textron Manufacturing. In 2001, $0.9 billion of term notes were issued to refinance maturing
commercial paper and long-term debt.
In 2003, 2002 and 2001, Textron Manufacturing made principal payments of $508 million, $544 million
and $62 million, respectively. In 2003, these payments include the $500 million payment to redeem the
mandatorily redeemable preferred securities discussed above. The increase in 2002 was primarily due
to the payment of a $500 million note that matured.
In 2003, 2002 and 2001, Textron Finance made principal payments on long-term debt of $1.4 billion,
$1.7 billion and $1.3 billion, respectively.
In 2003, 2002 and 2001, Textron repurchased 1,951,000, 5,734,000 and 738,000 shares of common
stock, respectively, under its Board authorized share repurchase program for an aggregate cost of $66
million, $248 million and $47 million, respectively. The increase in 2002 primarily reflects the utilization of
proceeds from the sale of Automotive Trim.
Textron’s Board of Directors approved the annual dividend per common share of $1.30 in 2003, 2002
and 2001. Dividend payments to shareholders totaled $222 million, $182 million and $184 million in
2003, 2002 and 2001, respectively. The increase in 2003 is due to an additional payment made in fiscal
2003 when the fourth quarter dividend, that is typically paid in the following year, was paid within fiscal
2003 on January 1, 2004.
Net cash provided by (used in) discontinued operations for Textron Manufacturing represents the
OmniQuip business and totaled $171 million in 2003, $16 million in 2002 and $(32) million in 2001. In
August 2003, Textron Manufacturing received a $90 million cash payment upon the sale of its remaining
OmniQuip business to JLG Industries, Inc., and in the first quarter of 2003, a $108 million tax refund was
received related to the sale of the Snorkel product line and the capital stock of the OmniQuip Textron
Inc. holding company in December 2001.
Net cash provided by (used in) discontinued operations for Textron Finance represents the small busi-
ness finance operation and totaled $175 million in 2003, $27 million in 2002 and $21 million in 2001. In
the fourth quarter of 2003, Textron Finance sold substantially all of its small business finance operation
to MBNA America Bank, N.A. for $421 million in cash.
Textron Manufacturing’s debt (net of cash) to total capital ratio as of January 3, 2004 was 29.5%, com-
pared with 35.9% at December 28, 2002 with the mandatorily redeemable preferred securities included
as debt. Textron Manufacturing has established a target debt-to-capital ratio in the mid-thirties. Consis-
tent with the methodology used by members of the financial community, leverage of the manufacturing
operations excludes the debt of Textron Finance. In turn, Textron Finance limits its borrowings to an
amount, taking into account the risk profile of its assets, consistent with a single A credit rating. Surplus
capital of Textron Finance is returned to Textron.
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