E-Z-GO 2012 Annual Report Download - page 81

Textron Inc. Annual Report ● 2012 69
Note 11. Special Charges
There were no amounts recorded within special charges in 2012 and 2011. In 2010, special charges included restructuring charges
related to a global restructuring program that totaled $99 million, including $76 million of severance costs. In 2008, we initiated a
global restructuring program to reduce overhead costs and improve productivity across the company and announced the exit of
portions of our commercial finance business. We record restructuring costs in special charges as these costs are generally of a
nonrecurring nature and are not included in segment profit, which is our measure used for evaluating performance and for
decision-making purposes.
In 2010, we substantially liquidated the assets held by a Canadian entity within the Finance segment. Accordingly, we recorded a
non-cash charge of $91 million ($74 million after-tax) within special charges to reclassify the entity’s cumulative currency
translation adjustment amount within other comprehensive income to the Statement of Operations. The reclassification of this
amount had no impact on shareholders’ equity.
An analysis of our restructuring reserve activity is summarized below:
(In millions)
Severance
Costs
Asset
Impairment
Contract
Terminations Total
Balance at January 2, 2010 $ 48 $ — $ 3 $ 51
Provision in 2010 79 16 7 102
Reversals (3) — — (3)
N
on-cash settlement — (16) — (16)
Cash paid (67) — (5) (72)
Balance at January 1, 2011 57 —
5 62
Cash paid (42) — (2) (44)
Balance at December 31, 2011 15 — 3 18
Cash paid (10) — (1) (11)
Balance at December 29, 2012 $ 5 $ — $ 2 $ 7
Note 12. Share-Based Compensation
Our 2007 Long-Term Incentive Plan (Plan) supersedes the 1999 Long-Term Incentive Plan and authorizes awards to our key
employees in the form of options to purchase our shares, restricted stock, restricted stock units, stock appreciation rights,
performance stock awards and other awards. A maximum of 12 million shares is authorized for issuance for all purposes under the
Plan plus any shares that become available upon cancellation, forfeiture or expiration of awards granted under the 1999 Long-
Term Incentive Plan. No more than 12 million shares may be awarded pursuant to incentive stock options, and no more than 3
million shares may be awarded pursuant to restricted stock units or other awards intended to be paid in shares. The Plan also
authorizes performance share units to be paid in cash based upon the value of our common stock.
Through our Deferred Income Plan for Textron Executives (DIP), we provide certain executives the opportunity to voluntarily
defer up to 25% of their base salary and up to 80% of annual, long-term incentive and other compensation. Elective deferrals may
be put into either a stock unit account or an interest-bearing account. We generally contribute a 10% premium on amounts
deferred into the stock unit account. Executives who are eligible to participate in the DIP and have not achieved and/or maintained
the required minimum stock ownership level are required to defer part of each subsequent long-term incentive compensation cash
payout into the DIP stock unit account until the ownership requirements are satisfied; these deferrals are not entitled to the 10%
premium contribution on the amount deferred. Participants cannot move amounts between the two accounts while actively
employed by us and cannot receive distributions until termination of employment. The intrinsic value of amounts paid under the
DIP in 2012, 2011 and 2010 totaled to $1 million, $1 million and $9 million, respectively.
Share-based compensation costs are reflected primarily in selling and administrative expenses. The compensation expense that has
been recorded in net income for our share-based compensation plans is as follows:
(In millions) 2012 2011 2010
Compensation expense $ 71 $ 50 $ 85
Income tax benefit (26) (18) (32)
Total net compensation cost included in net income $ 45 $ 32 $ 53