E-Z-GO 2007 Annual Report Download

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Annual Report 2007
POWERFUL PERFORMANCE:
POWERFUL FUTURE

Table of contents

  • Page 1
    POWERFUL PERFORMANCE: POWERFUL FUTURE Annual Report 2007

  • Page 2
    ... T HE E V E RY DAY C ON T R IB U T ION S OF INDIVIDUALS ALON G O U R JOU R N E Y T O B E C OM E THE PREM IER MU LT I - I N D U S T RY C OMPA N Y. Textron employees pictured here and throughout the annual report are identified on the last page.

  • Page 3
    POWERFUL PERFORMANCE INCREASE IN EPS FROM C O N T I N U I N G O P E R AT I O N S R E T U R N O N I N V E S T E D C A P I TA L 54% RETURN TO SHAREHOLDERS 1

  • Page 4
    POWERFUL FUTURE IT T R U LY WA S A YEAR OF POWERFUL P E R F OR MA N CE FOR TEXTRON. T H E N U MB E R S SPEAK FOR THEM SELVES, B U T T H E Y D ON'T TELL THE WHOLE STORY. 2

  • Page 5
    ... $18.8 billion aircraft and defense backlog is proof that these investments are paying off. Textron provided owners a total market return of 54 percent in 2007, far surpassing the five percent return of the S&P 500 Index. This performance reï¬,ects the strength of returns for our end markets and...

  • Page 6
    ... been able to expand commercial ship deliveries by a 20 percent compounded annual growth rate (CAGR) over the past two years and overall support... business ramped up production of the new Citation Mustang, with 45 delivered in 2007 and 100 scheduled for delivery in 2008. A game changer in the light ...

  • Page 7
    ...ï¬,uence, developing their infrastructures and opening up more airspace, we expect growing demand for private jets to follow. In fact, 53 percent of 2007 Citation orders came from outside the United States. A year-end backlog of $12.6 billion, with very few delivery slots available until 2010, gives...

  • Page 8
    ..., it allows us to carry on our engineering and research and development efforts essentially around the clock. As we review our powerful performance in 2007, we look ahead to a powerful future. The outlook for 2008 and beyond is solid, with Textron benefiting from continued robust organic growth and...

  • Page 9
    ... four major product lines are: Citation business jets, Caravan single engine turboprops, Cessna single engine piston aircraft and aftermarket services. 2007 sales: $5.0 billion. Bell: The Bell segment is composed of Bell Helicopter, a leader in vertical takeoff and landing aircraft for commercial...

  • Page 10
    ... 80 years. 30% Percentage of general aviation aircraft on the U.S. Civil Aircraft Registry that are Cessnas. 387 Record number of Citation business jets delivered in 2007, which is 70 percent more than its nearest competitor. 8

  • Page 11
    ...outstanding aftermarket service. Cessna Aircraft achieved some major milestones during 2007 - from its 80th anniversary to the delivery of its 5,...to improve its already awardwinning service and support bore even more fruit in 2007. When NetJets opted to add 93 jets to its fractional ownership ï¬,eet...

  • Page 12
    ..., military branches and unified commands. 14 Number of consecutive years Bell has captured top honors in customer service and support from Professional Pilot magazine's annual customer support survey. 10

  • Page 13
    ...lowest voluntary turnover rates in its industry. Textron Systems continued to grow in 2007 with the delivery of a record 576 Armored Security Vehicles (ASV); the ...Sensor Fuzed Weapons starting in 2008. Thanks to the 2007 integration of Overwatch Geospatial Operations and Tactical Operations, Textron ...

  • Page 14
    I N D U S T R I A L : D E S I G N I N G P R O D U C T S T H AT 86% Percentage of automobiles in Europe with plastic fuel tanks, reï¬,ecting the pioneering work of Kautex. 50% Percentage improvement in horsepower delivered by E-Z-GO's RXV gas model over previous models. 100% Percentage of major ...

  • Page 15
    ... car (left) and Jacobsen's Eclipse Hybrid Walking Greens Mower in 2007. Textron's other industrial businesses-Greenlee, Kautex and the Fluid & ...segment. Innovation was alive and well in Textron's Industrial segment in 2007. E-Z-GO's breakthrough golf car, Kautex's next generation fuel system and...

  • Page 16
    FINANCE: PROVIDING FINANCING SOLUTIONS 182,000 Number of aircraft that Textron Financial has financed throughout the world. 45 Number of years Textron Financial has been providing financing to help dealers stock high-end goods. $1.5 billion Loans outstanding to timeshare and hotel customers. ...

  • Page 17
    ...on the capital challenges of a broad range of industries. Textron Financial Corporation's portfolio of managed receivables grew to $11 billion in 2007 as the business expanded existing customer relationships on several fronts. With many companies turning their focus to global opportunities, Textron...

  • Page 18
    Board of Directors Lewis B. Campbell H. Jesse Arnelle Kathleen M. Bader R. Kerry Clark Ivor J. Evans Lawrence K. Fish Joe T. Ford Paul E. Gagné Dain M. Hancock Lord Powell of Bayswater KCMG Thomas B. Wheeler James L. Ziemer Lewis B. Campbell (1) Chairman, President and Chief Executive ...

  • Page 19
    Management Committee Lewis B. Campbell Chairman, President and Chief Executive Officer Kenneth C. Bohlen Executive Vice President and Chief Innovation Officer John D. Butler Executive Vice President Administration and Chief Human Resources Officer Ted R. French Executive Vice President and Chief ...

  • Page 20
    .... At the end of the year, we typically adjust ending invested capital for significant events unrelated to our normal operations for the year. In 2007 and 2006, we adjusted invested capital to eliminate the net cash used by the Manufacturing group for acquisitions. In 2006, we also adjusted invested...

  • Page 21
    UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 29, 2007 Commission File Number 1-5480 Textron Inc. (Exact name of registrant as specified...

  • Page 22
    ... Inc.," the "Company," "we," "our" and "us" in this Annual Report on Form 10-K refer to Textron Inc. and its consolidated subsidiaries. We ... and eight AH-1Z aircraft, of which 10 were delivered by the end of 2007. Phase II of the H-1 Operational Evaluation ("OPEVAL") is scheduled to commence in ...

  • Page 23
    ...piston aircraft, and aftermarket services. Revenues in the Cessna segment accounted for approximately 38%, 36% and 35% of our total revenues in 2007, 2006 and 2005, respectively. The family of business jets currently produced by Cessna includes the Mustang, Citation CJ1+, Citation CJ2+, Citation CJ3...

  • Page 24
    ...the all-terrain vehicle and watercraft markets and tanks for selective catalytic reduction systems used to reduce emissions from diesel engines. In 2007, Kautex announced that it has received the first production order for fuel systems using its new next generation fuel system manufacturing process...

  • Page 25
    ...the plumbing and mechanical industries in North America. In December 2007, Greenlee acquired Paladin Tools, a provider of tools and ...utility vehicles under the E-Z-GO and Cushman brand names. In the fourth quarter of 2007, E-Z-GO introduced its new energy-efficient RXV golf car, which it expects...

  • Page 26
    ... upon the customer entering into a definitive purchase order and receipt of required deposits. Approximately 56% of our total backlog at December 29, 2007 represents orders that are not expected to be filled in 2008, including $1.2 billion in orders for the new Citation CJ4 aircraft with first...

  • Page 27
    ... environmental matters is contained in Note 15 to the Consolidated Financial Statements on pages 69 and 70 of this Annual Report on Form 10-K. Employees At December 29, 2007, we had approximately 44,000 employees. Available Information We make available free of charge on our Internet website (www...

  • Page 28
    ...impact our business, financial condition or results of operations, perhaps materially. We have customer concentration with the U.S. Government. During 2007, we derived approximately 19% of our revenues from sales to a variety of U.S. Government entities. Our U.S. Government revenues have continued...

  • Page 29
    Item 1A. Risk Factors on those contracts for which we are teamed with others and are not the prime contractor, the U.S. Government could terminate a prime contract under which we are a subcontractor, irrespective of the quality of our products and services as a subcontractor. As a U.S. Government ...

  • Page 30
    Textron Inc. We have entered, and expect to continue to enter, into joint venture, teaming and other arrangements, and these activities involve risks and uncertainties. We have entered, and expect to continue to enter, into joint venture, teaming and other arrangements, and these activities ...

  • Page 31
    Item 1A. Risk Factors commercial paper borrowings, issuances of medium-term notes and other term debt securities, and syndication and securitization of receivables. Additional liquidity is provided to our Finance group through bank lines of credit. Much of the capital markets funding is made ...

  • Page 32
    ...could affect our profitability. Item 1B. Unresolved Staff Comments None Item 2. Properties On December 29, 2007, we operated a total of 77 plants located throughout the U.S. and 56 plants outside the U.S. We... during the last quarter of the period covered by this Annual Report on Form 10-K. 11

  • Page 33
    ... Exchange. At December 29, 2007, there were approximately 15,000 record holders of Textron common stock. On July 18, 2007, our Board of Directors approved... the stock split were distributed on August 24, 2007 to shareholders of record on August 3, 2007. Prior period per share data has been restated to...

  • Page 34
    ...shares we received as payment for the exercise price of employee stock options, which are not included in the publicly announced plan. ** On July 18, 2007, our Board of Directors approved a new plan authorizing the repurchase of up to 24 million shares of our common stock. The plan has no expiration...

  • Page 35
    Item 6. Selected Financial Data (Dollars in millions, except per share amounts and where otherwise noted) 2007 $ 3,915 5,000 3,435 875 $ 13,225 $ 335 865 218 222 1,640 - - (253) (87) (385 915 3.66 ...** All prior periods presented have been restated to reï¬,ect a two-for-one stock split in 2007. 14

  • Page 36
    ... approved a two-for-one stock split of our common stock and increased our annual dividend by 19% to $0.92 per share. We have continued to repurchase our common stock, spending $295 million in 2007 to acquire approximately 6 million shares. With a 30% increase in income from continuing operations...

  • Page 37
    ... and higher revenues in the Finance segment of $170 million. Segment Profit Segment profit increased $373 million, or 29%, to $1.6 billion in 2007, compared with 2006. This increase is primarily due to the following factors, which were partially offset by inï¬,ation of $256 million: • Higher...

  • Page 38
    ... tax benefit recorded upon the sale of InteSys. Segment Analysis Our four reportable segments are: Bell, Cessna, Industrial and Finance. These segments reï¬,ect ... of consolidated revenues and profit are provided below: 2007 Revenues - $13.2 Billion 2007 Segment Profit - $1.6 Billion 20% 53% 14...

  • Page 39
    ..., the H-1 and the ARH. Bell Helicopter's commercial business has invested in the commercial version of the tiltrotor aircraft and the new Model 429 during 2007; we expect to receive FAA certification of the Model 429 in the 2008-2009 time-frame. Major programs at Textron Systems include the ASV ...

  • Page 40
    ... for the first LRIP lot expired in 2006, while the option for the second lot (for 18-36 aircraft) was set to expire in December 2007. At that time, we were in discussions with the U.S. Government related to the possible reinstatement of the first option, extension of the second option, delivery...

  • Page 41
    ... profit Profit margin Backlog Demand in the business jet market continued to strengthen in 2007, which was reï¬,ected in a 49% increase in our backlog, in addition to.... Over the past three years, Cessna has increased its annual production rate and has continued to focus on improving margins ...

  • Page 42
    ... Tools, and E-Z-GO introduced its new energy-efficient RXV golf car. Industrial Revenues Revenues in the Industrial segment increased $307 million in 2007, compared with 2006, primarily due to higher volume of $148 million, favorable foreign exchange impact of $148 million and higher pricing of $46...

  • Page 43
    .... Managed finance receivables include finance receivables that are owned and reported on our balance sheet, along with securitized or sold finance receivables... The disruption in the credit market during the second half of 2007 had minimal impact on our Finance segment's ability to access the...

  • Page 44
    ... receivables also remain stable and relatively low at 0.45% during 2007 as compared with 0.38% and 0.51% during 2006 and 2005... and as a percentage of the owned finance assets for each business, are as follows: (Dollars in millions) 2007 $ 23 23 21 20 9 27 123 2.31% 1.20% 1.24% 0.89% 0.57% 24.73%...

  • Page 45
    ..., 2007 to shareholders of record on August 3, 2007. Also, on July 18, 2007, our Board of Directors approved a 19% increase in our annualized common...Changes in our working capital components resulted in a $50 million use of cash in 2007, a $206 million source of cash in 2006 and a $21 million use of ...

  • Page 46
    ...into the distribution finance revolving securitization in the first quarter of 2007. In 2006, more cash was used for investing activities resulting in ...is transferred between the two borrowing groups, there is no cash transaction reported in the consolidated cash ï¬,ows at the time of the original ...

  • Page 47
    ... and Results of Operations Reclassification and elimination adjustments included in the Consolidated Statement of Cash Flows are summarized below: (In millions) 2007 $ (1,160) 881 (7) (286) (135) $ (421) $ 2006 $ (1,015) 691 (36) (360) (80) (440) $ $ 2005 (824) 724 11 (89) (100) (189) Reclassi...

  • Page 48
    ... million. Contractual Obligations Manufacturing Group The following table summarizes the known contractual obligations, as defined by reporting regulations, of our Manufacturing group as of December 29, 2007, as well as an estimate of the timing in which these obligations are expected to be satis...

  • Page 49
    ... fees that decline over time and do not exceed $46 million at December 29, 2007. Finance Group The following table summarizes our Finance group's known contractual obligations, as defined by reporting regulations. Due to the nature of finance companies, we also have contractual cash receipts...

  • Page 50
    ... is funded through a commercial paper conduit commitment of a $600 million revolving credit facility which expires in December 2008. As of December 31, 2007, the aviation securitization trust had $433 million outstanding under its facility. The amount of pre-tax gains recorded upon the ongoing sale...

  • Page 51
    ...of an asset might be impaired. We completed our annual impairment test in the fourth quarter of 2007 using the estimates from our long-term strategic plans...conditions, and the profit margin assumptions are projected by each reporting unit based on the current cost structure and anticipated net cost ...

  • Page 52
    ... in 2006. For our qualified domestic plans, the assumed discount rate was 5.66% in 2007, compared with 5.65% for 2006. A 50-basis-point decrease in this discount rate would result in a $34 million annual increase in pension expense for our qualified domestic plans. The trend in healthcare costs is...

  • Page 53
    ...years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions for which it is more likely than not that a tax bene... our effective tax rate may ï¬,uctuate significantly on a quarterly and annual basis. 32

  • Page 54
    ... of increasing interest expense for our Finance group by $25 million in 2007 and $27 million in 2006, and decreasing interest expense by $11 ... using discounted cash ï¬,ow analysis and indicative market pricing as reported by leading financial news and data providers. This sensitivity analysis...

  • Page 55
    ...Annual Report on Form 10-K on the pages indicated below. Page Report of Management Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting Report...29, 2007 Notes to the Consolidated Financial Statements Supplementary Information: Quarterly Data for 2007 and...

  • Page 56
    ... and objectivity of the financial data presented in this Annual Report on Form 10-K. The Consolidated Financial Statements have been ...has issued an attestation report on Textron's internal controls over financial reporting as of December 29, 2007, as stated in its reports, which are included...

  • Page 57
    ...policies or procedures may deteriorate. In our opinion, Textron Inc. maintained, in all material respects, effective internal control over financial reporting as of December 29, 2007, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting...

  • Page 58
    ... with the standards of the Public Company Accounting Oversight Board (United States), Textron Inc.'s internal control over financial reporting as of December 29, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the...

  • Page 59
    Consolidated Statements of Operations For each of the years in the three-year period ended December 29, 2007 (In millions, except per share data) 2007 $ 12,350 875 13,225 9,716 1,692 484 33 - 11,925 1,300 (385) 915 2 $ $ $ $ $ 917 3.66 0.01 3.67 3.59 0.01 3.60 $ $ $ $ $ 2006 $ 10,692 798 ...

  • Page 60
    ... and December 30, 2006 (Dollars in millions, except share data) 2007 2006 Assets Manufacturing group Cash and cash equivalents Accounts receivable, net Inventories Other current assets Assets of discontinued operations Total current assets $ 471 1,083 2,724 ...

  • Page 61
    ... per share) Exercise of stock options and stock-based compensation Purchases of common stock Issuance of common stock Balance on December 29, 2007 See Notes to the Consolidated Financial Statements. $ 4 $ 6 $ 25 $ 1,369 $ 5,792 203 $ (3,447) $ (97) $ 3,652 203 (17) 2 34 222 (187) 1 164 (606...

  • Page 62
    Consolidated Statements of Cash Flows For each of the years in the three-year period ended December 29, 2007 Consolidated (In millions) 2007 $ 917 (2) 915 - 336 33 - 41 (13) (42) (490) (23) 52 480 (299) 37 1,027 22 1,049 $ 2006 601 105 706 - 290 26 - 30 37 (14) (...

  • Page 63
    Manufacturing Group* Finance Group* 2007 $ 917 (2) 915 (10) 296 - - 41 (6) (42) (473) (...115 335 - 62 1,119 (35) 1,084 $ 2005 203 313 516 (14) 257 - 118 28 10 (87) (181) (6) 173 42 - 38 894 87 981 $ 2007 145 - 145 - 40 33 - - (7) - - 19 - 36 - (4) 262 - 262 $ 2006 152 1 153 - 39 26 - - 38 - - 8 -...

  • Page 64
    ...is transferred between the two borrowing groups, there is no cash transaction reported in the consolidated cash ï¬,ows at the time of the original fi...intercompany transactions, are reclassified or eliminated in consolidation. In July 2007, our Board of Directors approved a two-for-one split of...

  • Page 65
    Notes to the Consolidated Financial Statements Leases - Certain qualifying noncancelable aircraft and other product lease contracts are accounted for as sales-type leases. Upon delivery, we record the present value of all payments (net of executory costs and any guaranteed residual values) under ...

  • Page 66
    Textron Inc. comparing the fair value of a loan with its carrying amount. Fair value is based on the present value of expected future cash ï¬,ows discounted at the loan's effective interest rate, the loan's observable market price or, if the loan is collateral dependent, at the fair value of the ...

  • Page 67
    ... discounted cash ï¬,ows. Goodwill We evaluate the recoverability of goodwill annually or more frequently if events or changes in circumstances, such as... as counterparty exposure and hedging practices. All derivative instruments are reported on the balance sheets at fair value. Designation to support ...

  • Page 68
    ... liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities, applying enacted tax ... material impact on our financial position or results of operations. In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for ...

  • Page 69
    ... by the respective entity. General corporate overhead previously allocated to the businesses for reporting purposes is excluded from amounts reported as discontinued operations. At December 29, 2007, assets and liabilities of discontinued operations primarily relate to the sale of the Fastening...

  • Page 70
    ...we recorded $259 million in goodwill and $112 million in identifiable intangible assets, primarily in the Bell segment. These amounts were adjusted in 2007 to reï¬,ect the final fair value adjustments, which resulted in a reduction of goodwill of $14 million, net of deferred taxes, and an increase...

  • Page 71
    ...89 24 13 512 $ 35 54 46 32 167 $ (1) (10) (8) (11) (30) $ 34 44 38 21 137 $ $ $ $ $ $ Amortization expense totaled $23 million in 2007, $7 million in 2006 and $4 million in 2005. Amortization expense is estimated to be approximately $67 million, $65 million, $60 million, $53 million and...

  • Page 72
    ...15 645 $ 2012 38 290 63 277 28 (10) 686 Thereafter $ 37 814 37 330 95 444 2007 $ 2,254 2,052 1,900 1,240 613 544 8,603 89 $ 8,514 2006 $ 1,948 1,674 2,...contracts were $1.0 billion and $315 million, respectively, at December 29, 2007 and $719 million and $222 million, respectively, at December 30,...

  • Page 73
    .... The impact of any estimated change in projected cash ï¬,ows must be reported as an adjustment to the net leveraged lease investment and retained earnings at... aviation, which accounted for 22% of managed receivables at the end of 2007 and 19% at the end of 2006. Industry concentrations in the golf ...

  • Page 74
    ... and $41 million, respectively, from the sale of equipment to the Finance group for use under operating lease agreements. At the end of 2007 and 2006, the amounts guaranteed by the Manufacturing group totaled $254 million and $335 million, respectively. The Manufacturing group has total reserves for...

  • Page 75
    ...: Distribution Finance Assumptions at Date of Sale Assumptions at December 29, 2007 Aviation Finance Assumptions at Date of Sale Assumptions at December 29, 2007 Weighted-average life (in years) Expected credit losses (annual rate) Residual cash ï¬,ows discount rate Monthly payment rate Prepayment...

  • Page 76
    ...719 60 1,118 966 1,562 833 442 209 - (47) $ 6,862 Commercial paper* Other short-term debt Medium-term fixed-rate and variable-rate notes**: Due 2007 (weighted-average rate of 5.57%) Due 2008 (weighted-average rate of 4.58% and 4.61%, respectively) Due 2009 (weighted-average rate of 5.33% and 5.55...

  • Page 77
    ... coverage ratio (no less than 125%). The following table shows required payments during the next five years on debt outstanding at the end of 2007. The payment schedule excludes amounts that are payable under or supported by the primary revolving credit facilities or revolving lines of credit: (In...

  • Page 78
    .... The fair value of these instruments was a $40 million and $13 million asset at the end of 2007 and 2006, respectively. At year-end 2007, $34 million in after-tax income was reported in accumulated other comprehensive loss from qualifying cash ï¬,ow hedges. This income generally is expected to be...

  • Page 79
    ... value; $11.00 liquidation value) is convertible into 8.8 shares of common stock, and we can redeem it for $50 per share. At the end of 2007, 2006 and 2005, we had approximately 72,000; 147,000 and 153,000 shares, respectively, of $2.08 Cumulative Convertible Preferred Stock, Series A issued with...

  • Page 80
    ...$ $ $ (644) 206 38 $ (400) $ $ Note 11. Share-Based Compensation Our 2007 Long-Term Incentive Plan (the "Plan") supersedes the 1999 Long-Term Incentive Plan and authorizes awards to... their base salary and up to 100% of annual and long-term incentive compensation and other compensation. Elective...

  • Page 81
    ... recognized over the vesting period of the stock options. The weighted-average fair value of options granted per share was $14, $12 and $10 for 2007, 2006 and 2005, respectively. We estimate the fair value of options granted on the date of grant using the Black-Scholes option-pricing model. Expected...

  • Page 82
    ...16,292 12,412 $ 26.03 38.34 24.31 35.05 $ 28.12 $ 26.12 At December 29, 2007, our outstanding options had an aggregate intrinsic value of $316 million and a weighted-average remaining contractual life of 6.3 years.... paid or accrued until vested, and is remeasured at each reporting period date. 61

  • Page 83
    ... Plan ("RAP"), which covers a portion of participants in the TMRP and BHTMRP, and was created in 2007. Under the RAP, participants are eligible to receive 2% of their annual compensation in contributions from Textron. Participants in the RAP may not make contributions to the plan. Participants in...

  • Page 84
    ...status, are as follows: Pension Benefits (In millions) Postretirement Benefits Other than Pensions 2007 $ 5,382 134 294 44 3 (146) (293) 198 28 $ 5,644 $ ...39 (288) - 66 $ 5,382 $ 4,746 595 33 3 (288) - 58 $ 5,147 $ (235) $ 2007 750 9 41 (5) 4 7 (70) 16 - 752 752) $ 2006 744 10 40 6 5 12 (67) -...

  • Page 85
    ... We estimate an initial prescription drug rate of 12% in 2007, which we assume will decrease by 5% by 2015 and then remain at that level. Assumed healthcare cost trend rates have a significant effect on the amounts reported for the postretirement benefits other than pensions. A onepercentage-point...

  • Page 86
    ... we expect to receive. The benefit payments are based on the same assumptions used to measure our benefit obligation at the end of fiscal 2007. While pension benefit payments primarily will be paid out of qualified pension trusts, we will pay postretirement benefits other than pensions out of...

  • Page 87
    ... the facts, circumstances and information available at the reporting date. For those tax positions for which it ...uctuate significantly on a quarterly and annual basis. We adopted the provisions of ...109" ("FIN 48"), at the beginning of fiscal 2007, which resulted in an increase of approximately $22 ...

  • Page 88
    ...income tax examinations for years before 1997 in these major jurisdictions. During 2007, 2006 and 2005, we recognized approximately $28 million, $23 million...portions of our net deferred tax assets and liabilities were as follows: December 29, 2007 $ 13 109 90 225 46 85 373 26 186 1,153 (192) $ Deferred...

  • Page 89
    ...nitely reinvested; therefore, tax is not provided on these earnings. If the earnings on which tax has not been provided had been distributed in 2007, our taxes, net of foreign tax credits, would have increased by approximately $32 million. Note 14. Special Charges There were no special charges in...

  • Page 90
    ... for the first LRIP lot expired in 2006, while the option for the second lot (for 18-36 aircraft) was set to expire in December 2007. At that time, we were in discussions with the U.S. Government related to the possible reinstatement of the first option, extension of the second option, delivery...

  • Page 91
    ... 2009, $47 million for 2010, $36 million for 2011, $28 million for 2012 and a total of $173 million thereafter. Loan Commitments At December 29, 2007, our Finance group had unused commitments to fund new and existing customers under $1.6 billion of committed revolving lines of credit, compared with...

  • Page 92
    ... value, which equates to $613 million, for a maximum amount of our liability under the guarantee of $300 million at December 29, 2007 through completion. Guaranteed Minimum Resale Contracts We have a number of guaranteed minimum resale value contracts associated with certain past aircraft sales. If...

  • Page 93
    ...We enter into a forward contract in our common stock on an annual basis. The contract is intended to hedge the earnings and cash volatility... the strike price and the prevailing common stock price. As of December 29, 2007, the contract was for approximately 2.5 million shares with a strike price of $...

  • Page 94
    ...recorded into income prospectively as the future sales occur. At the end of 2007 and 2006, Agusta's profit interest in the Model BA609 was approximately 32... $ 1,958 Note 20. Segment and Geographic Data Our four reportable segments are: Bell, Cessna, Industrial and Finance. These segments re...

  • Page 95
    ..., net Interest expense, net Income from continuing operations before income taxes Revenues by product type within each segment are summarized below: Revenues (In millions) 2007 $ 2,581 1,334 5,000 1,723 610 426 676 875 $ 13,225 2006 $ 2,347 1,061 4,156 1,542 517 373 696 798 $ 11,490 2005 $ 2,075...

  • Page 96
    ... by geographic area: Revenues* (In millions) Property, Plant and Equipment, net** 2007 $ 8,046 2,638 457 853 730 501 $ 13,225 2006 $ 7,006 ...2,099 462 631 636 656 $ 11,490 2005 $ 6,390 1,737 323 533 617 443 $ 10,043 2007 $ 1,565 295 81 18 66 7 $ 2,032 2006 $ 1,381 259 75 21 65 6 $ 1,807...

  • Page 97
    Quarterly Data Quarterly Data (Unaudited) 2007 Q4 Q3 Q2 Q1 Q4 Q3 2006 Q2 Q1 (Dollars in millions, except per share amounts) Revenues Bell Cessna Industrial ...0.194 $ 0.194 $ 0.194 * Prior period amounts have been restated to reï¬,ect a two-for-one stock split in the third quarter of 2007. 76

  • Page 98
    ... II - Valuation and Qualifying Accounts (In millions) 2007 2006 2005 Manufacturing Group Allowance for Doubtful Accounts Balance ... adjustments. ** These reserves exclude discontinued operations liabilities of $3 million in 2007, $6 million in 2006 and $18 million in 2005. The decline in...

  • Page 99
    ... of Shareholders to be held on April 23, 2008, is incorporated by reference into this Annual Report on Form 10-K. Information regarding our executive officers is contained in Part I of this Annual Report on Form 10-K. Item 11. Executive Compensation The information appearing under "ELECTION OF...

  • Page 100
    ...filed January 29, 1998. Incorporated by reference to Exhibit 3.1 to Textron's Annual Report on Form 10-K for the fiscal year ended January 3, 1998. Amended... to Exhibit 3.1 to Textron's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2007. Indenture dated as of December 9, ...

  • Page 101
    ...Financial Corporation, as servicer. Incorporated herein by reference to Exhibit 4.1 of Textron Financial Corporation's Current Report on Form 8-K filed April 24, 2006. Series 2007-A Supplement, dated as of March 29, 2007, to the Amended and Restated Indenture, dated as of May 26, 2005, by and among...

  • Page 102
    ... on Form 10-Q for the fiscal quarter ended September 29, 2007. Performance Factors for Executive Officers for Performance Share Units. Incorporated by reference to Exhibit 10.8B to Textron's Annual Report on Form 10-K for the fiscal year ended December 30, 2006. Textron Spillover Savings Plan...

  • Page 103
    ..., 2007 to 5-Year Credit Agreement. Incorporated by reference to Exhibit 10.1 to Textron's Current Report on Form 8-K filed April 24, 2007. ...Day Credit Agreement. Incorporated by reference to Exhibit 10.19 to Textron's Annual Report on Form 10-K for the fiscal year ended January 3, 2004. Amendment...

  • Page 104
    ...Incorporated by reference to Exhibit 10.26 to Textron's Annual Report on Form 10-K for the fiscal year ended January 1, 2005. Amendment No. 4 to Master Services Agreement between Textron Inc. and Computer Services Corporation, dated July 1, 2007. Incorporated by reference to Exhibit 10.1 to Textron...

  • Page 105
    Signatures Signatures Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on this 20th day of February 2008. TEXTRON INC. ...

  • Page 106
    Textron Inc. Pursuant to the requirements of the Securities and Exchange Act of 1934, this Annual Report on Form 10-K has been signed below on this 20th day of February 2008, by the following persons on behalf of the registrant and in ...

  • Page 107
    ... www.textron.com or call (888) TXT-LINE. Textron has included as Exhibits 31.1, 31.2, 32.1 and 32.2 to its Annual Report on Form 10-K for the fiscal year ended December 29, 2007, filed with the Securities and Exchange Commission, certificates of its Chief Executive Officer and Chief Financial Of...

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    Textron Inc. 40 Westminster Street Providence, RI 02903 (401) 421-2800 www.textron.com