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31 Textron Inc. Annual Report • 2013
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) 2013 2012 2011
Dividends paid by TFC to Textron $ 175 $ 345 $ 179
Capital contributions paid to TFC under Support Agreement — (240) (182)
During 2013, we also made a $1 million capital contribution to TFC to fund the repurchase of a portion of TFC’s 6% Fixed-to-
Floating Rate Junior Subordinated Notes.
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 Statements 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
The cash flows from continuing operations for the Finance group are summarized below:
(In millions) 2013 2012 2011
Operating activities $ 66 $ 5 $ 65
Investing activities 624 934 1,453
Financing activities (677) (918) (1,536)
In 2013 and 2012, the Finance group’s cash flows from operating activities were primarily impacted by changes in net taxes
received/paid and the impact of earnings. Net tax refunds/(payments) were $49 million, $(43) million and $65 million in 2013,
2012 and 2011, respectively. Net tax payments in 2012 included a settlement related to the Internal Revenue Service’s challenge of
tax deductions claimed in prior years for certain leveraged lease transactions.
Cash flows from investing activities primarily included collections on finance receivables and proceeds from sales of finance
receivables and other finance assets totaling $853 million in 2013, $1.3 billion in 2012 and $1.9 billion in 2011, partially offset by
financial receivable originations of $271 million in 2013, $331 million in 2012 and $471 million in 2011.
Cash used in financing activities included principal payments on long-term debt of $743 million, $426 million and $756 million in
2013, 2012 and 2011, respectively. These cash outflows were partially offset by proceeds from long term debt of $298 million,
$106 million and $430 million, respectively. In 2012, the Finance group also made cash payments totaling $493 million to the
Manufacturing group related to intergroup borrowings. In 2011, the Finance group paid $1.4 billion 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) 2013 2012 2011
Operating activities $ 813 $ 935 $ 1,068
Investing activities (264) 378 843
Financing activities (742) (781) (1,951)