E-Z-GO 2012 Annual Report Download - page 44

Download and view the complete annual report

Please find page 44 of the 2012 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 106

  • 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

32 Textron Inc. Annual Report ● 2012
Due to the nature of these contributions, we classify these contributions within cash flows used by operating activities for the
Manufacturing group in the Consolidated Statement of Cash Flows. Capital contributions to support Finance group growth in the
ongoing captive finance business are classified as cash flows from financing activities. The Finance group’s net income (loss) is
excluded from the Manufacturing group’s cash flows, while dividends from the Finance group are included within cash flows from
operating activities for the Manufacturing group as they represent a return on investment.
Finance Group Cash Flows
During 2012, we liquidated $821 million of the Finance group’s finance receivables, net of originations. These finance receivable
reductions occurred in both the non-captive and captive finance portfolios, but were primarily driven by the non-captive portfolio
in connection with our exit plan, including $241 million and $218 million in the Golf Mortgage and Timeshare product lines,
respectively. Depending on market conditions, we expect to liquidate the majority of the remaining $370 million of finance
receivables in the non-captive portfolio over the next two years.
The cash flows from continuing operations for the Finance group are summarized below:
(In millions) 2012 2011 2010
Operating activities $ 5 $ 65 $ (35)
Investing activities 934 1,453 2,305
Financing activities (918) (1,536) (2,383)
Cash flows from operating activities decreased in 2012, primarily due to changes in taxes paid/received, partially offset by higher
earnings. Net tax (payments)/refunds were $(43) million, $65 million and $(101) million in 2012, 2011 and 2010, respectively.
Net tax payments in 2012 and 2010 included settlements related to the IRS’s challenge of tax deductions claimed in prior years for
certain leveraged lease transactions.
Cash receipts from the collection of finance receivables continued to outpace finance receivable originations, which resulted in net
cash inflow from investing activities for the past three years. Finance receivables repaid and proceeds from sales totaled $1.1
billion in 2012, $1.8 billion in 2011 and $3.0 billion in 2010. Cash outflows for originations declined to $331 million in 2012
from $471 million in 2011 and $866 million in 2010. These decreases were largely driven by the wind down of the non-captive
business.
Cash used in financing activities included principal payments on long-term debt of $0.4 billion, $0.8 billion and $2.1 billion in
2012, 2011 and 2010, respectively. These cash outflows were partially offset by proceeds from the issuance of long term debt of
$106 million, $430 million and $231 million, respectively. In 2012, the Finance group also made cash payments totaling $493
million to the Manufacturing group related to intergroup borrowings. In 2011 and 2010, the Finance group paid $1.4 billion and
$0.3 billion, respectively, against the outstanding balance on its bank line of credit.
Consolidated Cash Flows
The consolidated cash flows from continuing operations, after elimination of activity between the borrowing groups, are
summarized below:
(In millions) 2012 2011 2010
Operating activities $ 935 $ 1,068 $ 993
Investing activities 378 843 1,549
Financing activities (781) (1,951) (3,493)
Cash flows from operating activities decreased during 2012 as compared with 2011, as higher earnings were offset by changes in
working capital, which included lower net cash receipts from our captive financing activities of $140 million and an increase in
pre-owned inventory in the Cessna segment largely due to higher trade-in activities, resulting in a cash reduction of $117 million.
Our use of cash for working capital requirements was partially offset by $237 million in lower cash pension contributions made in
2012.
Cash flow from operating activities increased in 2011, compared with 2010, primarily due to higher earnings for the
Manufacturing group, partially offset by higher cash pension contributions made in 2011. In addition, cash payments related to the
restructuring program that we substantially completed at the end of 2010 decreased to $44 million in 2011, from $72 million in
2010.