E-Z-GO 2009 Annual Report Download

Download and view the complete annual report

Please find the complete 2009 E-Z-GO annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

Annual Report

Table of contents

  • Page 1
    Annual Report

  • Page 2
    ... Finance segment, we achieved the orderly liquidation of $3.8 billion of managed finance receivables more than 500 aircraft to fewer than 300 planes shipped in 2009 forced us to take a close look at all aspects of how we think, how we operate, how we move forward." "With significant operational...

  • Page 3
    ... exemplary manufacturing efficiency at work. A Southern California Edison study reported E-Z-GO's RXV golf car is up to 39 percent more energy... debt2 from $11.9 billion at the end of 2008 to $7.4 billion in 2009. For our executive team, 2009 was also a year of transition with a new CEO, a new CFO, ...

  • Page 4
    ... and support," explained John Garrison, Bell's new President and Chief Executive Officer. On the military side, 2009 saw deployment of the first V-22 Ospreys and UH-1Ys in Afghanistan. Initial reports from the military have been very positive. Bell is contracted to deliver 28 V-22s in 2010 and is...

  • Page 5
    ... 25 years old, the future market for commercial growth looks bright. For rotorcraft operators, Bell continued to deliver superior customer service. In 2009 - for the 16th year in a row - Bell earned Professional Pilot magazine's top customer support award. As well, for the fourth consecutive year...

  • Page 6
    ... who were able to shift their focus from portfolio growth to cash conversion. The results of their efforts far surpassed expectations." At the start of 2009, the goal for the Finance segment was to liquidate $2.6 billion of managed receivables for the year. By year end, the team had reduced the...

  • Page 7
    BOARD OF DIRECTORS Lewis B. Campbell (1) Chairman of the Board Textron Inc. Kathleen M. Bader (2,3) President and Chief Executive Officer (Retired) NatureWorks LLC R. Kerry Clark Chairman and Chief Executive Officer (Retired) Cardinal Health, Inc. (2,4) Scott C. Donnelly (1) President and Chief ...

  • Page 8
    ...cash ï¬,ow measure may not be comparable with similarly titled measures reported by other companies, as there is no definitive accounting standard...less cash and cash equivalents. Our calculation of net debt for 2008 and 2009 is provided below: (In millions) On-balance sheet debt Borrowings on offi...

  • Page 9
    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 January 2, 2010 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT ...

  • Page 10
    ...to the Consolidated Financial Statements on pages 86 and 87 of this Annual Report on Form 10-K. The following description of our business should be...accounted for approximately 32%, 40% and 40% of our total revenues in 2009, 2008 and 2007, respectively. The family of business jets currently produced ...

  • Page 11
    ... production Lot 16, of which 116 have been delivered as of the end of 2009. The U.S. Government's program of record for the V-22 calls for a total...We have delivered a combined total of 31 of these aircraft as of the end of 2009. In August 2008, the UH-1Y was approved for full-rate production, and the...

  • Page 12
    ... for food, household, laboratory and industrial uses. Revenues of Kautex accounted for approximately 12%, 13% and 14% of our total revenues in 2009, 2008 and 2007, respectively. Kautex's automotive product lines have a limited number of competitors worldwide, some of which are affiliated with the...

  • Page 13
    ...Import Bank of the United States through a credit facility provided to a wholly-owned finance subsidiary of Textron and guaranteed by TFC. In 2009, 2008 and 2007, our Finance group paid our Manufacturing group $0.6 billion, $1.0 billion and $1.2 billion, respectively, related to the sale of Textron...

  • Page 14
    ... our backlog with the U.S. Government was unfunded. U.S. Government Contracts In 2009, approximately 31% of our consolidated revenues were generated by or resulted from... 17 to the Consolidated Financial Statements on page 84 of this Annual Report on Form 10-K. Patents and Trademarks We own, or are ...

  • Page 15
    ... we electronically file such material with, or furnish it to, the Securities and Exchange Commission. Forward-Looking Information Certain statements in this Annual Report on Form 10-K and other oral and written statements made by us from time to time are forward-looking statements, including those...

  • Page 16
    Textron Inc. Item 1A. Risk Factors Our business, financial condition and results of operations are subject to various risks, including those discussed below, which may affect the value of our securities. The risks discussed below are those that we believe currently are the most significant, ...

  • Page 17
    ... affect our access to the capital markets. The major rating agencies regularly evaluate us, including Textron Financial Corporation. Late in 2008 and during 2009, our long- and short-term credit ratings were subject to several downgrades resulting in the ratings disclosed on page 29 in the "Credit...

  • Page 18
    ... events may adversely affect our cash ï¬,ow, profitability and financial condition. We have customer concentration with the U.S. Government. During 2009, we derived approximately 31% of our revenues from sales to a variety of U.S. Government entities. Our U.S. Government revenues have continued to...

  • Page 19
    Item 1A. Risk Factors Cost overruns on U.S. Government contracts could subject us to losses or adversely affect our future business. Contract and program accounting require judgment relative to assessing risks, estimating contract revenues and costs, and making assumptions for schedule and ...

  • Page 20
    Textron Inc. acceptable prices and terms and in a timely manner. We also may underestimate the costs of retained liabilities or indemnification obligations. In addition, unanticipated delays or difficulties in effecting acquisitions or dispositions may divert the attention of our management and ...

  • Page 21
    ...Cessna Finance Export Corporation, a subsidiary of Textron Inc. that is the borrower under the Ex-Im Bank Facility entered into on July 14, 2009, would be included within the cross-default provision of the supplemental indenture for the convertible notes, although not within the similar provision in...

  • Page 22
    ... Court. The amended complaint names as additional defendants Textron Financial Corporation and three of its present and former officers. On August 21, 2009, a purported class action lawsuit was filed in the United States District Court in Rhode Island by Dianne Leach, an alleged participant in the...

  • Page 23
    ... holders during the last quarter of the period covered by this Annual Report on Form 10-K. Executive Officers of the Registrant The following... General Counsel in March 2000 and also was named Corporate Secretary in December 2009 and his title was expanded to reï¬,ect his role as Chief Compliance...

  • Page 24
    ...common stock as reported on the New York Stock Exchange and the dividends paid per share, are provided in the following table: 2009 High First ...S&P 500 A&D S&P 500 IC $200 $250 $150 $100 $50 2004 2005 2006 2007 2008 2009 Textron Inc. S&P 500 S&P 500 A&D S&P 500 IC 15 $100.00 100.00 100.00 100...

  • Page 25
    ...this type of restricted stock unit. Amounts for 2006 and 2005 have been restated to reï¬,ect a two-for-one stock split in 2007. (c) For 2009, the diluted average share base excluded potential common shares (convertible debt and related warrants, stock options and restricted stock units) due to their...

  • Page 26
    ... the capital markets at the time. • Issued $600 million of Convertible Notes and $600 million of senior notes in May and September, respectively. • In May 2009, concurrent with the Convertible Note offering, offered and sold to the public 23,805,000 shares of our common stock for net proceeds of...

  • Page 27
    ... in the Industrial segment. Cost of Sales Cost of sales as a percentage of Manufacturing revenues was 83.5%, 79.6% and 79.0% in 2009, 2008 and 2007, respectively. The increase in 2009 is primarily due to the impact of lower production levels and temporary plant shutdowns in the Cessna and Industrial...

  • Page 28
    ... under this program. We recorded net curtailment charges of $25 million for our pension and other postretirement benefit plans in the second quarter of 2009, as our analysis of the impact of workforce reductions on these plans indicated that curtailments had occurred and that the amounts could be...

  • Page 29
    ..., compared with 2008, primarily due to $38 million in interest on the Convertible Notes issued in the second quarter of 2009, partially offset by lower rates in 2009 due to our borrowings from our bank lines of credit. Interest expense for the Finance segment is included within segment profit. In...

  • Page 30
    ... to each disposition. Segment Analysis We operate in, and report financial information for, the following five business segments: ...69 million. Cessna Segment Profit Cessna's segment profit decreased $707 million in 2009, compared with 2008, primarily due to an $883 million impact from lower ...

  • Page 31
    ... an $80 million increase for the V-22 as we delivered more aircraft under the multi-year program. Backlog at Bell increased $711 million in 2009, primarily due to funding for the V-22 program, partially offset by a decline in commercial aircraft orders largely due to the economic recession. In 2008...

  • Page 32
    ...our reserves related to this program totaled $50 million, which we believe are adequate to cover our exposure. Textron Systems (Dollars in millions) 2009 $ 1,899 $ 240 13% $ 1,664 2008 $ 1,880 $ 251 13% $ 2,190 2007 $ 1,114 $ 174 16% $ 2,144 Revenues Segment profit Profit margin Backlog Textron...

  • Page 33
    ... offset by $32 million in lower Sensor Fused Weapon volume. Textron Systems Segment Profit Segment profit at Textron Systems decreased $11 million in 2009, compared with 2008, primarily due to the impact of lower aircraft engine volume of $38 million, partially offset by a $29 million impact from...

  • Page 34
    ... the finance business in the fourth quarter of 2008, which we believe will negatively impact credit losses over the duration of our portfolio. In 2009, the increase was primarily due to an increase in both the rate and severity of defaults resulting from the economic recession and due to declining...

  • Page 35
    ...'s Discussion and Analysis of Financial Condition and Results of Operations portfolio largely due to the liquidation of 68% of its managed finance receivables in 2009. In 2008, the increase in provision for loan losses was primarily a result of an $81 million increase in defaults in the marine and...

  • Page 36
    ... group within the Consolidated Financial Statements. Key information that is utilized in assessing our liquidity is summarized below: (Dollars in millions) 2009 $ $ $ $ 1,748 3,584 2,826 6,410 39.4% 55.9% $ 424 $ 144 $ 31 $ 5,667 2008 $ 531 $ 2,569 $ 2,366 $ 4,935 46.3% 52.1% $ 362 $ 16 $ 2,067...

  • Page 37
    ...managed finance receivable and other finance asset reductions converted to cash. In 2009, we had a cash conversion ratio of 94%. We expect the cash... lengthen the maturity profile of our indebtedness, on September 14, 2009, we issued $600 million of senior notes under our registration statement,...

  • Page 38
    ...cash ï¬,ow measure may not be comparable with similarly titled measures reported by other companies as there is no definitive accounting standard... Our Manufacturing group's free cash ï¬,ow improved by $62 million in 2009, compared with 2008, as lower capital expenditures of $299 million and working...

  • Page 39
    ... our quarterly dividend to $0.02 per share for the first quarter of 2009 in an effort to increase our liquidity in the long-term interest of our shareholders. Accordingly, the annual dividend decreased to $0.08 in 2009 from $0.92 in 2008. Dividend payments to shareholders totaled $21 million, $284...

  • Page 40
    ... charge coverage ratio required by the Support Agreement. In addition, the Finance group paid $207 million more in dividends to the Manufacturing group in 2009, compared with 2008. More cash was used for financing activities in 2008, compared with 2007, primarily due to an increase in debt payments...

  • Page 41
    ...between the two borrowing groups, there is no cash transaction reported in the consolidated cash ï¬,ows at the time of ... and elimination adjustments included in the Consolidated Statement of Cash Flows are summarized below: (In millions) 2009 $ (654) 831 (40) - 137 270 (349) 40 (39) $ 98 $ 2008...

  • Page 42
    Textron Inc. Contractual Obligations Finance Group Due to the nature of finance companies, we believe that it is meaningful to include contractual cash receipts that we expect to receive in the future. The following table summarizes the Finance group's liquidity position, including all managed fi...

  • Page 43
    ... table summarizes the known contractual obligations, as defined by reporting regulations, of our Manufacturing group as of January 2, 2010,.... Our policy for funding pension plans is to make contributions annually, consistent with applicable laws and regulations; however, future contributions to...

  • Page 44
    Textron Inc. Critical Accounting Estimates To prepare our Consolidated Financial Statements to be in conformity with generally accepted accounting principles, we must make complex and subjective judgments in the selection and application of accounting policies. The accounting policies that we ...

  • Page 45
    ... to meet contract milestones. Goodwill We evaluate the recoverability of goodwill annually in the fourth quarter or more frequently if events or changes in...ows. If its estimated fair value exceeds its carrying value, the reporting unit is not impaired, and no further analysis is performed. Otherwise...

  • Page 46
    ... discussed in Note 10 to the Consolidated Financial Statements, our annual test in the fourth quarter of 2009 resulted in an impairment charge of $80 million in the Golf & Turf reporting unit. The fair value of all the other reporting units exceeded their carrying values, and we do not believe...

  • Page 47
    ... 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. 38

  • Page 48
    ...debt decreased interest expense for our Finance group by $56 million in 2009 and by $25 million in 2008 and increased interest expense by $25... using discounted cash ï¬,ow analysis and indicative market pricing as reported by leading financial news and data providers. This sensitivity analysis...

  • Page 49
    ... included in this Annual Report on Form 10-K on the pages indicated below. Page Report of Management Reports of Independent Registered ... to the Consolidated Financial Statements Supplementary Information: Quarterly Data for 2009 and 2008 (Unaudited) Schedule II - Valuation and Qualifying Accounts...

  • Page 50
    ... of Management Management is responsible for the integrity and objectivity of the financial data presented in this Annual Report on Form 10-K. The Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles and include amounts based on...

  • Page 51
    ... maintained, in all material respects, effective internal control over financial reporting as of January 2, 2010, based on the COSO criteria. We ...the Consolidated Balance Sheets as of January 2, 2010 and January 3, 2009, and the related Consolidated Statements of Operations, Shareholders' Equity and...

  • Page 52
    Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders of Textron Inc. We have audited the accompanying Consolidated Balance Sheets of Textron Inc. as of January 2, 2010 and January 3, 2009, and the related Consolidated Statements of Operations, Shareholders...

  • Page 53
    Consolidated Statements of Operations For each of the years in the three-year period ended January 2, 2010 (In millions, except per share data) 2009 $ 10,139 361 10,500 8,468 1,344 317 267 309 (6) (50) 10,649 (149) (76) (73) 42 $ $ $ $ $ (31) (0.28) 0.16 (0.12) (0.28) 0.16 (0.12) $ $ $ $ $ 2008 ...

  • Page 54
    Consolidated Balance Sheets (Dollars in millions, except share data) January 2, 2010 January 3, 2009 Assets Manufacturing group Cash and cash equivalents Accounts receivable, net Inventories Other current assets Assets of discontinued operations Total current assets $ 1,748 894 2,273 960 ...

  • Page 55
    ... stock Issuance of common stock under employee stock plans Income tax impact of employee stock transactions Balance at January 3, 2009 Net loss Other comprehensive income: Foreign currency translation adjustment Deferred gains on hedge contracts Pension adjustments Reclassification adjustments...

  • Page 56
    Consolidated Statements of Cash Flows For each of the years in the three-year period ended January 2, 2010 Consolidated (In millions) 2009 $ (31) 42 (73) - - 409 267 162 (15) 144 82 (265) 17 803 (152) (535) (20) 177 31 1,032 (17) 1,015 (3,005) 4,011 594 - - (238) 236 ...

  • Page 57
    ... 9 1,144 64 1,208 - - - (1,092) (14) (369) - - - 6 (1,469) 58 (1,411) (42) - - 348 (50) - - - - - 103 24 (304) - - (154) (75) (2) (77) 18 (262) 733 $ 471 2009 $ (206) - (206) - - 36 267 162 (15) - (30) (204) - - (5) - 166 - 25 196 - 196 (3,659) 4,804 644 - - - 236 117 - 11 2,153 - 2,153 (768) 1,740...

  • Page 58
    ...and its majority-owned subsidiaries. As discussed in Note 2, on April 3, 2009, we sold HR Textron, and in November 2008, we completed the sale... 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 financing...

  • Page 59
    Notes to the Consolidated Financial Statements Long-Term Contracts - Revenues under long-term contracts are accounted for under the percentage-of-completion method of accounting. Under this method, we estimate profit as the difference between the total estimated revenues and cost of a contract. We...

  • Page 60
    Notes to the Consolidated Financial Statements believe that unanticipated changes in both internal and external factors affecting our financial performance, liquidity position or the value and/or marketability of our finance receivables could result in a modification of this assessment. Finance ...

  • Page 61
    ... discounted cash ï¬,ows. Goodwill We evaluate the recoverability of goodwill annually in the fourth quarter or more frequently if events or changes ...as counterparty exposure and hedging practices. All derivative instruments are reported at fair value in the Consolidated Balance Sheets. Designation to...

  • Page 62
    ... tax-related interest and penalties for continuing operations in income tax expense. Note 2. Discontinued Operations On April 3, 2009, we sold HR Textron, an operating unit previously reported within the Textron Systems segment, for $376 million in cash proceeds. The sale resulted in an after-tax...

  • Page 63
    ... 322 $ 30 $ 958 $ 312 $ - We recorded an impairment charge of $80 million in 2009 based on lower forecasted revenues and profits related to the effects of the economic recession on the Golf & Turfcare reporting unit. In 2008, based on current market conditions and the plan to downsize the...

  • Page 64
    ... to finance receivables held for investment, net is provided below: January 2, 2010 $ 8,283 765 463 7,055 30 7,025 819 6,206 (341) $ 5,865 January 3, 2009 $ 12,173 820 532 10,821 2,248 8,573 1,658 6,915 (191) $ 6,724 (In millions) Total managed and serviced finance receivables Less: Nonrecourse...

  • Page 65
    ...end of 2008. The most significant collateral concentration was in general aviation, which accounted for 35% of managed receivables at the end of 2009 and 26% at the end of 2008. Industry concentrations in the resort and golf industries accounted for 19% and 18%, respectively, of managed receivables...

  • Page 66
    ... contracts, and leveraged leases are provided below: January 2, 2010 $ 395 183 578 (175) $ $ 403 378 152 530 (217) 313 (238) $ 75 $ $ $ January 3, 2009 $ 557 259 816 (208) 608 493 229 722 (263) 459 (350) 109 (In millions) Finance leases: Total minimum lease payments receivable Estimated residual...

  • Page 67
    ...143 million in 2008 and $53 million in 2007. The average recorded investment in impaired accrual finance receivables amounted to $136 million in 2009, $34 million in 2008 and $31 million in 2007. Nonaccrual finance receivables resulted in the Finance segment's revenues being reduced by $53 million...

  • Page 68
    ...commercial paper borrowings to lend cash to the Finance group, and in 2009, the Manufacturing group agreed to lend the Finance group, with interest,...finance receivables were classified as held for sale in December 2008. During 2009, we reclassified $878 million of finance receivables, net of a $...

  • Page 69
    ...$1.3 billion and $2.0 billion at January 2, 2010 and January 3, 2009, respectively. Had our LIFO inventories been valued at current costs, ... were $366 million at January 2, 2010 and $741 million at January 3, 2009. Note 7. Property, Plant and Equipment, Net Our Manufacturing group's property, plant ...

  • Page 70
    ...853 300 109 $ 7,388 Commercial paper (weighted-average rate of 5.64%) Other short-term debt Medium-term fixed-rate and variable-rate notes*: Due 2009 (weighted-average rate of 4.07%) Due 2010 (weighted-average rate of 2.09% and 3.85%, respectively) Due 2011 (weighted-average rate of 2.94% and 4.42...

  • Page 71
    ... Notes are convertible only under the following certain circumstances: (1) during any calendar quarter commencing after June 30, 2009 and only during such calendar quarter if the last reported sale price of our common stock for at least 20 trading days during the 30 consecutive trading days ending...

  • Page 72
    ...which was recorded as an increase to additional paid-in capital. We incurred cash and non-cash interest expense of $38 million in 2009 for these Convertible Notes. As of January 2, 2010, the unamortized discount amount, including issuance costs totaled $129 million, resulting in a net carrying value...

  • Page 73
    ... Statements These are intended to offset the effect of exchange rate ï¬,uctuations on forecasted sales, inventory purchases and overhead expenses. At the end of 2009, we had a net deferred gain of $27 million in OCI related to these cash ï¬,ow hedges. As the underlying transactions occur, we expect...

  • Page 74
    ... to intercompany financing transactions. For these instruments, the Manufacturing group reported in selling and administrative expenses a gain of $14 million in 2009 and a loss of $49 million in 2008. Our Finance group reported a loss of $107 million and $6 million in selling and administrative...

  • Page 75
    ... 2010 (In millions) Level 1 Level 2 Level 3 Level 1 January 3, 2009 Level 2 Level 3 Assets Manufacturing group Foreign currency exchange contracts Forward contracts for ... had no significant impact on the valuation at the end of 2009 and 2008 as most of our counterparties are AA-rated, and the vast...

  • Page 76
    ...797 Goodwill - In the fourth quarter of 2009, we performed our annual goodwill impairment test using the annual operating plan for 2010 along with its long...the required Step 2 calculation to determine the fair value of the reporting unit's assets and liabilities in order to perform a purchase price ...

  • Page 77
    ... at cost. The estimate of fair value was based on observable market inputs for similar securitization interests in markets that currently are inactive. In 2009 and 2008, approximately 54% and 82%, respectively, of the fair value of term debt for the Finance group was determined based on observable...

  • Page 78
    ... 36,000 shares, respectively, of Series B issued and outstanding. Outstanding common stock activity for the three years ended January 2, 2010 is presented below: (In thousands) 2009 242,041 - 10 556 5,460 23,805 400 272,272 2008 250,061 (11,649) 1,147 60 2,060 - 362 242,041 2007 251,192 (5,902...

  • Page 79
    ...Reclassification adjustments Other comprehensive loss 2009 Foreign currency translation adjustment Deferred gains... to sale of Fluid & Power Reclassification adjustments Balance at January 3, 2009 Other comprehensive income (loss) Pension curtailment Reclassification adjustments Balance at January ...

  • Page 80
    ...completion date. We recorded net curtailment charges of $25 million for our pension and other postretirement benefit plans in the second quarter of 2009, as our analysis of the impact of workforce reductions on these plans indicated that curtailments had occurred and the amounts could be reasonably...

  • Page 81
    ...million, primarily attributable to severance and retention benefits. Other Charges In the fourth quarter of 2009, we recorded a goodwill impairment charge of $80 million for the Golf & Turfcare reporting unit, which is part of our Industrial segment. See Note 10 for more information on this charge...

  • Page 82
    ... level are required to defer annual incentive compensation in excess of 100% of the executive's annual target into a deferred stock unit...that has been recorded in net income for our share-based compensation plans is as follows: (In millions) 2009 $ 81 2 (30) 53 - $ 53 $ $ 2008 (78) 100 29 51 - 51...

  • Page 83
    ...awards issued during the respective periods are as follows: 2009 Dividend yield Expected volatility Risk-free interest rate Expected term... units until the restricted stock units vest. For restricted stock units issued in 2009 and 2008, cash dividends are paid on a quarterly basis prior to vesting....

  • Page 84
    ... (In millions) 2,441 (962) (329) 1,150 $ 43.83 39.87 45.24 $ 46.74 2009 $ 42 1 21 10 1 $ 2008 47 10 10 40 3 $ 2007 38 10 46 42 4 ... dividends are not paid or accrued until vested, and is remeasured at each reporting period date. Note 14. Retirement Plans Our defined benefit and defined...

  • Page 85
    ...subject to ERISA in which a significant number of our U.S.-based employees participate. Our defined contribution plans cost approximately $96 million in 2009, $110 million in 2008 and $82 million in 2007. We also provide postretirement benefits other than pensions for certain retired employees in...

  • Page 86
    ... fair value of plan assets, along with our funded status, are as follows: Pension Benefits (In millions) Postretirement Benefits Other than Pensions 2009 $ 5,088 116 310 26 - (42) (300) 29 (1) $ 5,226 $ 3,574 473 51 (300) (40) 25 $ 3,783 $ (1,443) 2008 $ 5,202 141 302 8 - (205) (295) (52) (13...

  • Page 87
    ...initial prescription drug cost trend rate, we have estimated a rate of 10% in 2009, which we assume will decrease to 5% by 2019 and then remain at that ... cost trend rates have a significant effect on the amounts reported for the postretirement benefits other than pensions. A one-percentage...

  • Page 88
    ... every three years, which then are updated at least annually by the real estate investment manager, who considers current... beginning of year Actual return on plan assets Related to assets still held at reporting date Related to assets sold during the period Purchases, sales and settlements, net ...

  • Page 89
    ... subsidy we expect to receive. Benefit payments are based on the same assumptions used to measure our benefit obligation at the end of fiscal 2009. While pension benefit payments primarily will be paid out of qualified pension trusts, we will pay postretirement benefits other than pensions out...

  • Page 90
    ... facts, circumstances and information available at the reporting date. For those tax positions for which ...significantly on a quarterly and annual basis. Our unrecognized tax benefits...discontinued operations. Unrecognized tax benefits were reduced in 2009 and 2008 primarily due to the sale of CESCOM...

  • Page 91
    ... 197 146 71 60 41 225 1,726 (210) $ 1,516 Deferred tax liabilities: (In millions) January 3, 2009 $ 826 217 194 90 135 63 31 156 1,712 (175) $ 1,537 $ (601) (157) (... January 2, 2010 $ 315 600 915 (136) $ 779 $ January 3, 2009 $ 266 698 964 (337) 627 (In millions) Current Non-current Finance group...

  • Page 92
    ... that the LRIP contracts would be awarded. We have since terminated these vendor contracts and are negotiating to settle our termination obligations. In October 2009, we filed a claim with the U.S. Government to request reimbursement of costs expended in support of the LRIP program. On December 17...

  • Page 93
    ... liabilities related to such obligations. The risk that we will be required to perform on any of these indemnifications is low. In June 2009, we received notification that the VH-71 helicopter program was terminated for convenience by the U.S. Government, and the related performance guarantee was...

  • Page 94
    .... Changes in our warranty and product maintenance liability are as follows: (In millions) 2009 $ 278 174 (217) 28 - 263 $ 2008 313 189 (194) (26...amounts paid to the Manufacturing group of $3 million in both 2009 and 2008. Accrued Liabilities The accrued liabilities of our Manufacturing group...

  • Page 95
    .... Segment and Geographic Data We operate in, and report financial information for, the following five business segments... continuing operations before income taxes, are as follows: Revenues (In millions) Segment Profit (Loss) 2009 $ 3,320 2,842 1,899 2,078 361 $ 10,500 2008 $ 5,662 2,827 1,880...

  • Page 96
    ...and Textron Systems segments. Other information by segment is provided below: Assets (In millions) 2009 $ 2,427 2,059 1,973 1,623 7,512 3,288 58 $ 18,940 2008 $ ... 1,131 753 485 $ 14,010 2007 $ 7,710 2,361 434 845 622 423 $ 12,395 2009 $ 1,594 238 82 19 56 - $ 1,989 2008 $ 1,701 246 82 18 65 - ...

  • Page 97
    ....43 $ 10.09 $ 0.23 $ 0.23 $ 0.23 $ 0.23 (a) In the first quarter of 2009, we sold HR Textron, and in the third quarter of 2008, we completed the sale of our Fluid & Power...of $293 million. (c) For the second and fourth quarters of 2009 and the fourth quarter of 2008, the diluted earnings per share ...

  • Page 98
    ... - Valuation and Qualifying Accounts (In millions) 2009 2008 2007 Manufacturing Group Allowance for doubtful accounts ... amended (the "Act")) as of the end of the fiscal year covered by this report. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures...

  • Page 99
    ... to materially affect, our internal control over financial reporting. Item 9B. Other Information On February 23, 2010, the Organization and Compensation Committee of the Board of Directors of Textron Inc. approved the design of the annual and long-term incentive compensation program for 2010 with...

  • Page 100
    ... of Shareholders to be held on April 28, 2010 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 101
    ...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... by reference to Exhibit 3.1 to Textron's Current Report on Form 8-K filed December 4, 2009. Indenture dated as of December 9, 1999, between...

  • Page 102
    ... Plan Provisions (As in effect before January 1, 2008). Incorporated by reference to Exhibit 10.9 to Textron's Annual Report on Form 10-K for the fiscal year ended January 3, 2009. Survivor Benefit Plan for Textron Key Executives (As amended and restated effective July 25, 2007). Incorporated by...

  • Page 103
    ...thereto, dated December 23, 2008. Incorporated by reference to Exhibit 10.15B to Textron's Annual Report on Form 10-K for the fiscal year ended January 3, 2009. Agreement between Textron and Scott C. Donnelly, dated May 1, 2009, related to Mr. Donnelly's personal use of a portion of hangar space at...

  • Page 104
    ... of this agreement. 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...Incorporated by reference to Exhibit 10.10 to Textron's Current Report on Form 8-K filed May 5, 2009. 10.23B 10.23C 10.23D 10.24A 10.24B...

  • Page 105
    ... reference to Exhibit 10.12 to Textron's Current Report on Form 8-K filed May 5, 2009. Computation of ratio of income to fixed charges...(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...

  • 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 25th day of February 2010 by the following persons on behalf of the registrant and in ...

  • Page 107
    ... our web site at www.textron.com. Company Publications and General Information To receive a copy of Textron's Forms 10-K and 10-Q, Proxy Statement or Annual Report without charge, visit our web site at www.textron.com, call (888) TXT-LINE or send a written request to Textron Investor Relations at...

  • Page 108
    Textron Inc. 40 Westminster Street Providence, RI 02903 (401) 421-2800 www.textron.com