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Textron Inc. Annual Report ● 2012 39
Presented below is a sensitivity analysis of the fair value of financial instruments outstanding at year-end. We estimate the fair
value of the financial instruments using discounted cash flow analysis and indicative market pricing as reported by leading
financial news and data providers. This sensitivity analysis is most likely not indicative of actual results in the future. The
following table illustrates the sensitivity to a hypothetical change in the fair value of the financial instruments assuming a 10%
decrease in interest rates and a 10% strengthening in exchange rates against the U.S. dollar:
2012 2011
(In millions)
Carrying
Value*
Fair
Value*
Sensitivity of
Fair Value
to a 10%
Change
Carrying
Value*
Fair
Value*
Sensitivity of
Fair Value
to a 10%
Change
Manufacturing group
F
oreign exchange rate ris
k
Debt $ (564) $ (598) $ (60) $ (543) $ (564) $ (56)
Foreign currency exchange contracts 6 6 34 5 5 46
$ (558) $ (592) $ (26) $ (538) $ (559) $ (10)
I
nterest rate ris
k
Debt $ (2,225) $ (2,636) $ (9) $ (2,328) $ (2,561) $ (14)
Finance group
I
nterest rate ris
k
Finance receivables $ 1,766 $ 1,793 $ 36 $ 2,415 $ 2,266 $ 90
Debt, including intergroup (1,687) (1,678) (13) (2,467) (2,347) (24)
$ 79 $ 115 $ 23 $ (52) $ (81) $ 66
* The value represents an asset or (liability).