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21
Textron Inc.
end of the first quarter of 2009, which will be primarily payable in a six-year note. We recorded an after-tax gain of $111 million for this sale. After
taxes and other deal-related expenses are paid, we expect total net after-tax proceeds for the sale to be approximately $380 million, excluding any
payments due to us related to the 2008 operating results.
In August 2006, we completed the sale of our Fastening Systems business to Platinum Equity, a private equity investment firm, for
approximately $613 million in cash and the assumption of $16 million of net indebtedness and certain liabilities. There was no gain or loss
recorded upon completion of the sale. Prior to the consummation of the sale of the Fastening Systems business, we recorded an impairment
charge of $120 million in 2006 to record the business at the estimated fair value less cost to sell.
The Fluid & Power and Fastening Systems businesses met the discontinued operations criteria and have been included in discontinued
operations for all periods presented in our Consolidated Financial Statements. The results of the Fluid & Power business were previously
reported in the Industrial segment.
Revenue, results of operations and gains on disposal for our discontinued businesses are as follows:
(In millions) 2008 2007 2006
Revenue $ 560 $ 610 $ 1,618
Income (loss) from discontinued operations before income taxes 34 51 (76)
Income taxes 3 15 16
Operating income (loss) from discontinued operations, net of income taxes 31 36 (92)
Gains on disposal, net of income taxes 111 2 —
Income (loss) from discontinued operations, net of income taxes $ 142 $38 $ (92)
Segment Analysis
Effective at the beginning of fiscal 2008, we operate in, and report financial information for, the following five business segments: Cessna, Bell,
Textron Systems, Industrial and Finance. Prior to 2008, we reported segment financial results within four segments: Bell, Cessna, Industrial and
Finance. We changed our segment reporting to separate Textron Systems into a new segment, initially named “Defense & Intelligence,” and to
report Bell Helicopter as its own segment, Bell, to reflect the manner in which we now manage these businesses. All periods presented herein
have been recast to reflect the 2008 segment reporting structure.
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 and special charges. The measurement for the Finance segment includes interest
income and expense and excludes special charges.
Cessna
(Dollars in millions) 2008 2007 2006
Revenues $ 5,662 $ 5,000 $ 4,156
Segment profit $ 905 $ 865 $ 645
Profit margin 16% 17% 16%
Backlog $ 14,530 $ 12,583 $ 8,467
Cessna Revenues
Cessna’s revenues increased $662 million in 2008, compared with 2007, due to higher volume of $341 million, higher pricing of $252 million
and a benefit from a newly acquired business of $69 million. The higher volume primarily reflects higher jet and Caravan deliveries of
$481 million, partially offset by lower used aircraft sales of $98 million and lower single engine sales of $56 million. Citation business jets are the
largest component of Cessna’s revenues. We delivered 467, 387 and 307 Citation business jets in 2008, 2007 and 2006, respectively. However,
we do not expect the level of revenue growth we have experienced over the last three years to continue in the near future. Due to recent deferrals