E-Z-GO 2014 Annual Report Download - page 36

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favorably impacted by an increase of $226 million in customer deposits, primarily at Textron Aviation, and a $174 million
increase in cash from accounts receivable, largely at Bell, partially offset by an increase in net tax payments of $43 million. Net
tax payments were $266 million and $223 million in 2014 and 2013, respectively.
We generated $658 million in cash from operating activities in 2013 on $914 million in Manufacturing group segment profit and
$470 million of income from continuing operations. The $300 million decrease in cash flows from operating activities from 2012
was largely due to a $429 million impact related to working capital requirements and $64 million in lower income from continuing
operations, which were partially offset by $211 million in lower contributions to our pension plans in 2013. The most significant
change within working capital was a $230 million unfavorable impact resulting from net tax payments of $223 million in 2013,
compared to net tax refunds of $7 million in 2012. In addition, we had $165 million in cash inflows related to changes in
inventory levels, largely at Textron Aviation, which was more than offset by $264 million of cash outflows from changes in
accounts receivable and accounts payable. The change in inventory levels at Textron Aviation was primarily related to lower pre-
owned inventory, partially offset by higher inventory in support of new sales.
Pension contributions were $76 million, $194 million and $405 million in 2014, 2013 and 2012, respectively.
In 2014, cash flows from investing activities included a $1.6 billion aggregate cash payment for Beechcraft and seven other
acquisitions within our Industrial and Textron Systems segments. Cash flows from investing activities in 2013 included $196
million of cash used for acquisitions of businesses within our Industrial and Textron Systems segments and two service centers in
our Textron Aviation segment. Cash flows from investing activities also included capital expenditures of $429 million, $444
million and $480 million in 2014, 2013 and 2012, respectively.
Cash flows from financing activities in 2014 included proceeds from long-term debt of $1.4 billion, most of which was used to
finance a portion of the Beechcraft acquisition, partially offset by the repayment of $559 million of outstanding debt. In 2013, cash
flows used in financing activities primarily consisted of the repayment of $528 million of outstanding debt, including the
settlement of our convertible notes, which was partially offset by proceeds from long-term debt of $150 million. In 2012, we
generated cash from financing activities, largely due to the receipt of $490 million from the Finance group in payment of its
intergroup borrowing, partially offset by $272 million in share repurchases and $189 million in payments on our outstanding debt.
Dividends
Dividend payments to shareholders totaled $28 million, $22 million and $17 million in 2014, 2013 and 2012, respectively.
Share Repurchases
During 2014, under a 2013 share repurchase authorization, we repurchased an aggregate of 8.9 million shares of our outstanding
common stock for $340 million. In 2012, under a 2007 share repurchase authorization, we repurchased 11.1 million shares of our
outstanding common stock for $272 million.
Capital Contributions Paid To and Dividends Received From the Finance Group
Under a Support Agreement between Textron and TFC, Textron is required to maintain a controlling interest in TFC. The
agreement also requires Textron to ensure that TFC maintains fixed charge coverage of no less than 125% and consolidated
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)
2014
2013
2012
Dividends paid by TFC to Textron
$ —
$ 175
$ 345
Capital contributions paid to TFC under Support Agreement
—
—
(240)
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 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.
30 Textron Inc. Annual Report • 2014