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Textron Inc. Annual Report ● 2012 31
Textron has a senior unsecured revolving credit facility that expires in March 2015 for an aggregate principal amount of $1.0
billion, up to $200 million of which is available for the issuance of letters of credit. At December 29, 2012, there were no amounts
borrowed against the facility, and there were $37 million of letters of credits issued against it. We also maintain an effective shelf
registration statement filed with the Securities and Exchange Commission that allows us to issue an unlimited amount of public
debt and other securities.
At December 29, 2012, the principal amount of our convertible notes outstanding was $215 million. Under the terms of the
Indenture that governs the notes, the notes are currently convertible at the holder’s option through April 29, 2013, the second
trading day preceding their May 1, 2013 maturity date. We may deliver shares of common stock, cash or a combination of cash
and shares of common stock in satisfaction of our obligations upon conversion of the convertible notes. We intend to settle the
face value of the convertible notes in cash.
Manufacturing Group Cash Flows
Cash flows from continuing operations for the Manufacturing group as presented in our Consolidated Statement of Cash Flows are
summarized below:
(In millions) 2012 2011 2010
Operating activities $ 958 $ 761 $ 730
Investing activities (476) (423) (353)
Financing activities 29 (360) (1,215)
We generated $958 million in cash from operating activities in 2012 on $1.1 billion in Manufacturing group segment profit and
$534 million of Manufacturing group net income. The 26% increase in cash flows from operating activities from 2011 was largely
due to lower cash contributions made to our pension plans in 2012. Within working capital, we had a $117 million reduction in
cash resulting from an increase in pre-owned inventory in the Cessna segment primarily due to higher trade-in activities, which
was largely offset by a reduction in net taxes paid. We made pension contributions of $405 million, $642 million and $417 million
in 2012, 2011 and 2010, respectively. Cash flows from operating activities increased in 2011, compared with 2010, largely due to
higher earnings for the Manufacturing group, partially offset by higher cash pension contributions.
Investing cash flows in 2012, 2011 and 2010 primarily included capital expenditures of $480 million, $423 million, and $270
million, respectively, in support of our new product development and cost improvement strategies.
We generated cash from financing activities in 2012, largely due to the receipt of $490 million from the Finance group in payment
of its intergroup borrowing, partially offset by share repurchases in the fourth quarter of 2012 and $189 million in payments on our
outstanding debt. In 2011, financing activities primarily consisted of $580 million in payments related to the purchase and
cancellation of convertible notes and $175 million in intergroup financing for our Finance group, partially offset by $496 million
in proceeds from the issuance of notes. In 2010, we repaid $1.2 billion of our bank credit lines.
Share Repurchases
In the fourth quarter of 2012, under a 2007 share repurchase authorization, we repurchased 11.1 million shares of our common
stock for a total cost of $272 million which fully utilized our available repurchase authorization. On January 22, 2013, our Board
of Directors approved a new authorization program for 25 million shares under which we intend to purchase shares of common
stock to offset the impact of dilution from share-based compensation plans and for opportunistic capital management purposes.
Dividends
Dividend payments to shareholders totaled $17 million, $22 million and $22 million in 2012, 2011 and 2010, respectively.
Capital Contributions Paid To and Dividends Received From the Finance Group
Under a Support Agreement between Textron Inc. and TFC, Textron Inc. is required to maintain a controlling interest in TFC. The
agreement also requires Textron Inc. to ensure that TFC maintains fixed charge coverage of no less than 125% and consolidated
shareholder’s equity of no less than $200 million. Cash contributions paid to TFC to maintain compliance with the Support
Agreement and dividends paid by TFC to Textron Inc. are detailed below:
(In millions) 2012 2011 2010
Dividends paid by TFC to Textron Inc. $ 345 $ 179 $ 505
Capital contributions paid to TFC under Support Agreement (240) (182) (383)