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58Textron Inc. Annual Report • 2013
Note 4. Inventories
Inventories are composed of the following:
(In millions)
December 28,
2013
December 29,
2012
Finished goods $ 1,276 $ 1,329
Work in process 2,477 2,247
Raw materials and components 407 437
4,160 4,013
Progress/milestone payments (1,197) (1,301)
Total $ 2,963 $ 2,712
Inventories valued by the LIFO method totaled $1.3 billion and $1.1 billion at the end of 2013 and 2012, respectively, and the
carrying values of these inventories would have been higher by approximately $461 million and $435 million, respectively, had
our LIFO inventories been valued at current costs. Inventories related to long-term contracts, net of progress/milestone payments,
were $359 million and $382 million at the end of 2013 and 2012, respectively.
Note 5. Property, Plant and Equipment, Net
Our Manufacturing group’s property, plant and equipment, net are composed of the following:
(Dollars in millions)
Useful Lives
(in years)
December 28,
2013
December 29,
2012
Land and buildings 3 - 40 $ 1,636 $ 1,604
Machinery and equipment 1 - 20 4,042 3,822
5,678 5,426
Accumulated depreciation and amortization (3,463) (3,277)
Total
$ 2,215 $ 2,149
At the end of 2013 and 2012, assets under capital leases totaled $247 million and $251 million and had accumulated amortization
of $56 million and $51 million, respectively. The Manufacturing group’s depreciation expense, which included amortization
expense on capital leases, totaled $335 million, $315 million and $317 million in 2013, 2012 and 2011, respectively.
Note 6. Accrued Liabilities
The accrued liabilities of our Manufacturing group are summarized below:
(In millions)
December 28,
2013
December 29,
2012
Customer deposits $ 888 $ 725
Salaries, wages and employer taxes 246 282
Current portion of warranty and product maintenance contracts 142 180
Retirement plans 74 80
Other 538 689
Total $ 1,888 $ 1,956
Changes in our warranty and product maintenance contract liability are as follows:
(In millions) 2013 2012 2011
Accrual at beginning of year $ 222 $ 224 $ 242
Provision 299 255 223
Settlements (293) (250) (223)
Adjustments to prior accrual estimates* (5) (7) (18)
Accrual at end of year $ 223 $ 222 $ 224
* Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.