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2011 ANNUAL REPORT

Table of contents

  • Page 1
    2011 ANNUAL REPORT

  • Page 2
    ...-capital KEY PERFORMANCE METRICS Net cash provided by operating activities of continuing operations for Manufacturing group-GAAP Manufacturing cash ï¬,ow before pension contributions-Non-GAAP 1 1 2011 $ 11,275 $ 591 242 2010 10,525 553 92 $ $ 28.87 $ 14.66 18.49 0.79 25.30 15.88 23.64 0.30 307...

  • Page 3
    ... and introductions of the 407GX and 407AH. Cessna returned to profitability in 2011 with a total of 183 business jet deliveries for the year and announced two... four segments comprising our manufacturing businesses exceeded $11 billion in 2011, an $865 million increase over 2010. Segment profit for...

  • Page 4
    ... We also took steps to further our reach across the globe in 2011. For example, Bell and Cessna aggressively grew their in-country sales teams ...we see excellent prospects to grow the business and we look forward to reporting on our shared success. Sincerely, SCOTT C. DONNELLY Chairman and Chief ...

  • Page 5
    ...built to meet demanding missions such as those in the offshore oil and gas industry. While great energy was directed toward new products in 2011, Bell also steadfastly defended its top ranking for customer support. For the 18th consecutive year, Bell was ranked first in customer support and service...

  • Page 6
    ...up to 784 ASVs as they return from active duty over a three-year period. Textron Systems continued to produce smarter weapons and systems in 2011, in line with defense customers' increasing need for stealth, speed and precision. Throughout the year, the team delivered a stream of improvements to its...

  • Page 7
    ... worldwide, continuing Citation's legacy as the industry's best-selling line of business jets. The power of the Citation brand is clearly reï¬,ected in 2011's sales activity. Cessna delivered 183 Citations during the year, up from 179 in the previous year. In total, Cessna revenues climbed to nearly...

  • Page 8
    ... for its fuel systems, as the global automotive market strengthened in 2011. Revenues grew by 11 percent and Kautex won several highly competitive ...contracts from top automakers-including contracts to produce 550,000 fuel tanks annually for General Motors' Chevrolet and Buick models, and with BMW to...

  • Page 9
    ... exit plan was initiated. Proceeds from these liquidations continue to be used to reduce the company's debt. For the Captive Finance business, 2011 results were the best since 2008. Key to this improvement was the stabilization of aircraft values and stronger portfolio performance. During the year...

  • Page 10
    9 BOARD OF DIRECTORS Scott C. Donnelly (1) Chairman, President and Chief Executive Officer, Textron Inc. Kathleen M. Bader (2,3) President and Chief Executive Officer (Retired), NatureWorks LLC R. Kerry Clark (3,4) Chairman and Chief Executive Officer (Retired), Cardinal Health, Inc. James T. ...

  • Page 11
    ...ow measure may not be comparable with similarly titled measures reported by other companies, as there is no definitive ... calculation of net debt is provided below: (In millions) December 31, 2011 January 1, 2011 Debt - Manufacturing group Debt - Finance group Less: Total cash and equivalents...

  • Page 12
    UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K [ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2011 or ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ...

  • Page 13
    ...Resul ts of Operations" on pages 19 through 40 of this Annual Report on Form 10-K. Information included in this Annual Report on Form 10-K refers to our continuing businesses unless otherwise ..., product quality and reliability, product support and reputation. 22 Textron Inc. Annual Report • 2011

  • Page 14
    ...total revenues in 2011, 2010 and 2009, respectively. Revenues ...of business were as follows: (In millions) 2011 2010 2009 Military: V-22 Program Other Military Commercial...18% of Textron's revenues in 2011, 2010 and 2009, respectively. ... as follows: (In millions) 2011 2010 2009 Unmanned Aircraft Systems Land...

  • Page 15
    ...Revenues of Kautex accounted for approximately 16%, 16% and 12% of our total revenues in 2011, 2010 and 2009, respectively. Our automotive products have a limited number of competitors worldwide, ...product quality and reliability, product support and reputation. 44 Textron Inc. Annual Report • 2011

  • Page 16
    ...have had difficulty in accessing other sources of financing for the purchase of Textronmanufactured products. In 2011, 2010 and 2009, our Finance group paid our Manufacturing group $284 million, $416 million... discussion of the credit quality of this portfolio. Textron Inc. Annual Report • 2011 55

  • Page 17
    ...039 *As disclosed in our Form 10-Q for the third quarter of 2011, backlog at January 1, 2011 has been revised from the amount previously reported, primarily to correct an error made in 2009 when the full value ...procuring undelivered items from another source. 66 Textron Inc. Annual Report • 2011

  • Page 18
    ...whole. Some of these trademarks, trade names and service marks are used in this Annual Report on Form 10-K and other reports, including: AAI; AH-1Z; Bad Boy Buggies; Bell Helicopter; Bravo; Cadillac Gage... positions since joining General Electric in 1989. Textron Inc. Annual Report • 2011 77

  • Page 19
    ... it to, the Securities and Exchange Commission. Forward-Looking Information Certain statements in this Annual Report on Form 10-K and other oral and written statements made by us from time to... established to address contingent liabilities, unrecognized tax 8 8 Textron Inc. Annual Report • 2011

  • Page 20
    ...Afghanistan adds to the pressure to reduce defense spending. In August 2011, Congress passed the Budget Control Act of 2011 which committed the U.S. Government to significantly reduce the federal deficit... prohibit the export of our products, services and Textron Inc. Annual Report • 2011 99

  • Page 21
    ... value and/or marketability of our assets. Valuations of the types of collateral securing our Golf Mortgage portfolio, which we are 10 10 Textron Inc. Annual Report • 2011

  • Page 22
    ... third-party service providers. Any disruption of such outsourced processes or functions also could have a material adverse impact on our results of operations. Textron Inc. Annual Report • 2011 11

  • Page 23
    ... representatives, consultants, subcontractors or suppliers, even if prohibited by our policies, could have an adverse effect on our business and reputation. 12 12 Textron Inc. Annual Report • 2011

  • Page 24
    ... Likewise, pursuant to the requirements of the Dodd-Frank Act, we will be required to report on our use of "conflict minerals" originating from the Democratic Republic of Congo and surrounding ..., create liens, sell assets, or effect a consolidation or merger. Textron Inc. Annual Report • 2011 13

  • Page 25
    ...future payment obligations and the rates of future cost growth. Additionally, as part of our annual evaluation of these plans, significant changes in our assumptions, due to changes in economic, legislative... rates are established. Accordingly, fluctuations in 14 14 Textron Inc. Annual Report • 2011

  • Page 26
    ...they are being put and are substantially in regular use. Item 3. Legal Proceedings As previously reported in Textron's Annual Report on Form 10 -K for the fiscal year ended January 2, 2010, on August 13, ... causes of action in the amended complaint. On April 9, Textron Inc. Annual Report • 2011 15

  • Page 27
    ... the Amended Complaint. On December 5, 2011, the Court denied the motion for partial reconsideration without rendering a decision on the merits of the issues raised therein, and the parties are currently engaged in discovery. As previously reported in Textron's Annual Report on Form 10 -K for the...

  • Page 28
    ... per share of our common stock as reported on the New York Stock Exchange and the dividends paid per share are provided in the following table: 2011 High Low Dividends per Share High 2010 Low... 2010 $ 53.38 96.71 108.64 66.17 2011 $ 41.92 98.76 114.37 66.64 Textron Inc. Annual Report • 2011 17

  • Page 29
    ...$ $ 545 331 $ 15,282 $ 2,302 $ 3,660 $ 2,972 32% 44% $ $ 270 334 (a) For 2011, segment profit includes a $186 million initial mark-to-market adjustment for remaining finance receivables in the Golf Mortgage portfolio that were ...from continuing operations. 18 18 Textron Inc. Annual Report • 2011

  • Page 30
    ...1,183 761 0.79 $ 10,525 8,605 1,231 730 0.30 $ 10,500 8,468 1,338 738 (0.28) 2011 was a solid year for Textron with revenue and segment profit growth of 7% and an increase in diluted EPS from ... finance receivables resulting from the continued liquidation. Textron Inc. Annual Report • 2011 19

  • Page 31
    ...on compensation expense. These decreases were partially offset by higher bid and proposal costs at Textron Systems in 2011. In 2010 and 2009, cost of sales as a percentage of Manufacturing revenues remained flat at 83...convertible notes issued in May 2009. 20 20 Textron Inc. Annual Report • 2011

  • Page 32
    ...- to nine-month period we previously used. Based on this change, in the fourth quarter of 2011, we determined that we no longer had the intent to hold the remaining Golf Mortgage portfolio for investment...% see Note 14 to the Consolidated Financial Statements. Textron Inc. Annual Report • 2011 21

  • Page 33
    ...report.... Cessna (Dollars in millions) 2011 2010 2009 % Change 2011 2010 Revenues Operating expenses Segment profit...to the 2011 year-over-year revenue change are provided below: (In millions) 2011 versus 2010...million, 17%, in 2011, compared with 2010,...2011, compared with 179 jets in 2010. During 2011,...

  • Page 34
    ...favorable benefit related to the last-in, first-out (LIFO) method of accounting for inventories. In 2011, Cessna had a LIFO benefit of $22 million resulting from operational improvements that led to a ...of pricing Total change $ $ (253) 95 (50) (19) (227) Textron Inc. Annual Report • 2011 23

  • Page 35
    ... cancellations in 2010. Cessna Backlog Cessna's backlog decreased $1.0 billion, 35%, in 2011 and $2.0 billion, 40%, in 2010, mainly attributable to deliveries in excess of... Bell delivered 125 commercial aircraft in 2011, compared with 131 aircraft in 2010. 24 24 Textron Inc. Annual Report • 2011

  • Page 36
    ... change $ $ 109 7 (22) 94 Bell's segment profit increased $94 million, 22%, in 2011, compared with 2010, primarily due to improved program performance of $109 million, partially offset by an ...the H-1 and V-22 programs for reimbursement of prior year costs. Textron Inc. Annual Report • 2011 25

  • Page 37
    ... for severance costs related to this action. Textron Systems Revenues and Operating Expenses Factors contributing to the 2011 year-over-year revenue change are provided below: (In millions) 2011 versus 2010 Volume Other Total change 26 26 Textron Inc. Annual Report • 2011 $ $ (112) 5 (107)

  • Page 38
    ... to higher Sensor Fuzed Weapon volume. Textron Systems' operating expenses decreased $18 million, 1%, in 2011, compared with 2010, primarily due to the lower volume, which was partially offset by the $... in inflation, primarily due to higher pension costs. Textron Inc. Annual Report • 2011 27

  • Page 39
    ... change $ $ 138 77 18 28 261 Industrial segment sales increased $261 million, 10%, in 2011 from 2010. Volume increased and mix improved largely due to a $117 million increase in the Fuel...reduce costs through workforce reductions and other initiatives. 28 28 Textron Inc. Annual Report • 2011

  • Page 40
    ...Total change $ $ 31 34 (35) 10 40 Industrial segment profit increased $40 million, 25%, in 2011 from 2010, primarily due to a $34 million impact from improved performance and a $31 million impact ... are subject to operating lease or have been repossessed. Textron Inc. Annual Report • 2011 29

  • Page 41
    ...in an $80 million reduction in the allowance for loan losses. At the end of 2011, finance receivables reported in the above table included $532 million of finance receivables held for investment in the ...the transfer of the remaining Golf Mortgage portfolio. 30 30 Textron Inc. Annual Report • 2011

  • Page 42
    ...December 31, 2011 January 1, 2011 Manufacturing group Cash...to meet our future needs. In 2011, Textron Inc. entered into a senior...of letters of credit. At December 31, 2011, there were no amounts borrowed against the facility... debt and other securities. In September 2011, we issued $250 million in 4....

  • Page 43
    ... 13, 2011 settlement date...2011. By the end of 2011...31, 2011, ..., 2011,...2011...millions) 2011 2010 ... in 2011, compared...38 million in 2011, from $...2011, compared with $417 million in contributions in 2010. Investing cash flows in 2011...2011... million in 2011, 2010 and... (In millions) 2011 2010 2009 Dividends paid...

  • Page 44
    ...balance on TFC's bank line of credit that we had drawn down in 2009. In October 2011, we paid off and elected to terminate this bank line of credit. As we liquidate the...$642 million in contributions in 2011, compared with $417 million in contributions in 2010. Textron Inc. Annual Report • 2011 33

  • Page 45
    ...Although cash is transferred between the two borrowing groups, there is no cash transaction reported in the consolidated cash flows at the time of the original financing. These captive ... Financial Statements for details concerning these dispositions. 34 34 Textron Inc. Annual Report • 2011

  • Page 46
    ... table summarizes the known contractual obligations, as defined by reporting regulations, of our Manufacturing group as of December 31, 2011: Payments Due by Period (In millions) Total Less ... have full recourse under customary contract termination clauses. Textron Inc. Annual Report • 2011 35

  • Page 47
    ... The following table summarizes the known contractual obligations, as defined by reporting regulations, of our Finance group as of December 31, 2011: Payments Due by Period (In millions) Total Less than 1 ...in Note 4 to the Consolidated Financial Statements. 36 36 Textron Inc. Annual Report • 2011

  • Page 48
    ... and a valuation allowance would be established at that time, if necessary. At December 31, 2011, if we had classified additional finance receivables as held for sale, a valuation allowance would likely ... or (d) we are unable to meet contract milestones. Textron Inc. Annual Report • 2011 37

  • Page 49
    ... assessed. Based on our annual review, the fair value of all of our reporting units exceeded their carrying values, and we do not believe that there is a reasonable possibility that any units might fail the Step 1 impairment test in the foreseeable future. 38 38 Textron Inc. Annual Report • 2011

  • Page 50
    ... recognized. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities due to settlement of income tax examinations, Textron Inc. Annual Report • 2011 39

  • Page 51
    ... instruments using discounted cash flow analysis and indicative market pricing as reported by leading financial news and data providers. This sensitivity analysis is...81) $ $ 90 (24) 66 $ 3,758 (3,975) $ (217) $ 3,544 (3,843) $ (299) $ $ 114 (47) 67 40 40 Textron Inc. Annual Report • 2011

  • Page 52
    ... accounting firm thereon are included in this Annual Report on Form 10-K on the pages indicated below: Page Report of Management Reports of Independent Registered Public Accounting Firm Consolidated ... included in the financial statements or notes thereto. Textron Inc. Annual Report • 2011 41

  • Page 53
    ... for the integrity and objectivity of the financial data presented in this Annual Report on Form 10-K. The Consolidated Financial Statements have been prepared in conformity... Connor Frank T. Connor Executive Vice President and Chief Financial Officer 42 42 Textron Inc. Annual Report • 2011

  • Page 54
    ...reporting as of December 31, 2011,...over financial reporting based ...financial reporting ...financial reporting, ...reporting...reporting...control over financial reporting may not ...financial reporting as of December 31, 2011, ... 31, 2011 and January 1, 2011, and ... 31, 2011 of Textron Inc. and our report dated February...

  • Page 55
    ... Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2012 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Boston, Massachusetts February 23, 2012 44 44 Textron Inc. Annual Report • 2011

  • Page 56
    ...in the three-year period ended December 31, 2011 (In millions, except per share data) 2011 2010 2009 Revenues Manufacturing revenues Finance revenues Total...0.79 - 0.79 $ $ $ $ 0.33 (0.02) 0.31 0.30 (0.02) 0.28 $ $ $ $ (0.28) 0.16 (0.12) (0.28) 0.16 (0.12) Textron Inc. Annual Report • 2011 45

  • Page 57
    Consolidated Balance Sheets (In millions, except share data) December 31, 2011 January 1, 2011 Assets Manufacturing group Cash and equivalents Accounts receivable, net Inventories Other ...745 $ 13,615 35 1,301 3,037 (1,316) 3,057 85 2,972 $ 15,282 46 46 Textron Inc. Annual Report • 2011

  • Page 58
    ...compensation Issuance of common stock for employee stock plans Balance at December 31, 2011 Preferred Stock $ 2 Common Stock $ 32 Capital Surplus $ 1,229 ... - $ 35 $ 3,257 $ 85 (3) $ (1,625) See Notes to the Consolidated Financial Statements. Textron Inc. Annual Report • 2011 47

  • Page 59
    ...and equivalents at beginning of year Cash and equivalents at end of year See Notes to the Consolidated Financial Statements. 2011 $ 242 - 242 2009 (31) 42 (73) - - 403 12 102 202 59 81 166 36 ... (1,637) (412) - - (21) - (1,633) 24 1,345 547 1,892 $ $ $ 48 48 Textron Inc. Annual Report • 2011

  • Page 60
    ... 2010 $ 464 - 464 $ 314 (6) 320 $ 2009 175 42 133 $ 2011 (222) - (222) Finance Group 2010 $ (228) - (228) $ 2009 (206) - (206) 179 (182) 371 - - - 57 197 166 36...740 - 323 (3,771) 280 - - - - - (768) - 270 40 (349) - (2,235) 14 128 16 144 $ $ $ $ $ $ Textron Inc. Annual Report • 2011 49

  • Page 61
    ... taxes in 2011 and 2010 ...2011 and 2010, the gross favorable program profit adjustments totaled $83 million and $98 million, respectively. For 2011 and 2010, the gross unfavorable program profit adjustments totaled $29 million and $20 million, respectively. 50 50 Textron Inc. Annual Report • 2011

  • Page 62
    ... to, contractual duration, type of collateral, credit strength of the borrowers, interest rates and perceived marketability of the receivables. On an ongoing basis, Textron Inc. Annual Report • 2011 51

  • Page 63
    ... the related collateral when the collateral is repossessed, and are charged off when the remaining balance is deemed to be uncollectable. 52 52 Textron Inc. Annual Report • 2011

  • Page 64
    ... and related expenses include expected long-term rates of return on plan assets, discount rates and healthcare cost projections. We evaluate and update these assumptions annually in consultation with third-party actuaries and investment Textron Inc. Annual Report • 2011 53

  • Page 65
    ... as counterparty exposure and hedging practices. All derivative instruments are reported at fair value in the Consolidated Balance Sheets. Designation to...$403 million, and $401 million in 2011, 2010 and 2009, respectively, and are included in cost of sales. 54 54 Textron Inc. Annual Report • 2011

  • Page 66
    ... (gains), net. On April 3, 2009, we sold HR Textron, an operating unit previously reported within the Textron Systems segment. In connection with this sale, we recorded an after-tax gain...412 101 35 22 570 $ $ (115) (53) (16) (15) (199) $ 297 48 19 7 $ 371 Textron Inc. Annual Report • 2011 55

  • Page 67
    ...2011...52 million and $52 million in 2011, 2010 and 2009, respectively. Amortization...) December 31, 2011 January 1, 2011 Commercial U.S. Government...2011 and $195 million at January 1, 2011... 2011 January 1, 2011 ...December 31, 2011. Installment ...years. As of December 31, 2011, loans in Golf Mortgage have...

  • Page 68
    ...received total proceeds of $476 million and $655 million from the sale of finance receivables in 2011 and 2010, respectively, resulting in total gains of $4 million and $31 million, respectively....watchlist or nonaccrual categories are classified as performing. Textron Inc. Annual Report • 2011 57

  • Page 69
    ...of the contractually due payment is delinquent, the entire finance receivable balance is reported in accordance with the most past-due delinquency aging category. Finance receivables ... interest income recognized on impaired loans in either 2011 or 2010. 58 58 Textron Inc. Annual Report • 2011

  • Page 70
    ...Allowance Principal For Losses On Balance Impaired Loans Average Recorded Investment Aviation Timeshare Golf Mortgage Other liquidating Total January 1, 2011 $ $ $ 47 170 - 3 220 17 - 69 138 30 254 $ $ $ 92 57 ... doubtful accounts, at the end of 2011. Textron Inc. Annual Report • 2011 59

  • Page 71
    ... sales that are included in the Finance group's balance sheets are summarized below: (In millions) December 31, 2011 January 1, 2011 Installment contracts Finance leases Distribution finance receivables Total 60 60 Textron Inc. Annual Report • 2011 $ 1,488 121 8 $ 1,617 $ 1,652 220 18 $ 1,890

  • Page 72
    ... to nine-month period we previously used. Based on this change, in the fourth quarter of 2011, we determined that we no longer had the intent to hold the remaining Golf Mortgage portfolio for... million and $322 million at the end of 2011 and 2010, respectively. Textron Inc. Annual Report • 2011 61

  • Page 73
    ...Other Total accrued liabilities Changes in our warranty and product maintenance contract liability are as follows: (In millions) 2011 729 282 198 169 80 494 $ 1,952 $ 715 275 242 161 82 541 $ 2,016 $... translation adjustments. $ $ 278 174 (217) 28 263 62 62 Textron Inc. Annual Report • 2011

  • Page 74
    ...2011 January 1, 2011 Manufacturing group Long-term senior debt: Medium-term notes due 2011...-rate notes*: Due 2011 (weighted-average rate... December 31, 2011 and January 1, 2011, respectively. -... 300 34 3,660 In 2011, Textron Inc. entered into...2011, there were ...2011... at December 31, 2011: (In millions)...

  • Page 75
    ...notes for each day in the measurement period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate, (3) if specified distributions to holders of...options from 45.7 million shares to 28.6 million 64 64 Textron Inc. Annual Report • 2011

  • Page 76
    ... of 2011 would have been convertible. At the end of 2011, the... Capped Call Transactions On October 25, 2011, we entered into capped call transactions ... discussed above. At December 31, 2011, the capped calls covered an aggregate... of no less than $200 million. In 2011, 20 10 and 2009, cash payments of ...

  • Page 77
    ... on actual transactions so they are classified as Level 2. At December 31, 2011 and January 1, 2011, we had foreign currency exchange contracts with notional amounts upon which the contracts ... Statements of Operations were both insignificant in 2011 and 2010. 66 66 Textron Inc. Annual Report • 2011

  • Page 78
    ...At December 31, 2011, we had a ...not material in 2011 and 2010....2011, resulting in an accumulated net gain balance of $18 million at December 31, 2011...of 2011 is... adjustments during 2011 and 2010...2011 2011 Gain (Loss) 2011...At December 31, 2011, the finance receivables ... fourth quarter of 2011, and a portion...

  • Page 79
    ... Manufacturing group debt is determined using market observable data for similar transactions. At December 31, 2011 and January 1, 2011, approximately 53% and 33%, respectively, of the fair value of term debt for the... for finance receivables held for sale. 68 68 Textron Inc. Annual Report • 2011

  • Page 80
    ...,041 10 556 5,460 23,805 400 272,272 Reserved Shares of Common Stock At the end of 2011, common stock reserved for the conversion of convertible notes, the exercise of outstanding stock options and warrants, ... effect on the loss from continuing operations. Textron Inc. Annual Report • 2011 69

  • Page 81
    ... 27 $ (1,316) There were no amounts recorded within special charges in 2011. In 2010 and 2009, special charges included restructuring charges related to a ...80 million in connection with our annual goodwill impairment test for the Golf and Turf Care reporting unit, which is part of our Industrial ...

  • Page 82
    ... 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... cannot receive distributions until termination of employment. Textron Inc. Annual Report • 2011 71

  • Page 83
    ... 5,091 $ $ $ 28.15 25.84 15.35 27.94 27.68 30.14 At December 31, 2011, our outstanding options had an aggregate intrinsic value of $8 million and a weighted-average remaining contractual life of six... contractual life of three years at December 31, 2011. 72 72 Textron Inc. Annual Report • 2011

  • Page 84
    ... installments over five years). In 2011, we issued restricted stock units ...on the grant date. The 2011 activity for restricted stock units is... at each reporting period date. The 2011 activity for ...as follows: (In millions) 2011 2010 2009 Subject only to...As of December 31, 2011, we had not recognized ...

  • Page 85
    ...was closed to new participants, and employees hired after that date receive an additional 4% annual cash contribution to their Textron Savings Plan account based on their eligible compensation. We also...service cost (credit) $ $ 117 16 133 $ $ 7 (11) (4) 74 74 Textron Inc. Annual Report • 2011

  • Page 86
    ...2011 2010 (In millions) Pension Benefits 2011... (In millions) Pension Benefits 2011 2010 Postretirement Benefits Other than Pensions 2011 2010 Non-current assets Current ... 31, 2011 and January 1, 2011, respectively,...follows: (In millions) 2011 2010 Projected benefit obligation Accumulated...

  • Page 87
    ... 6.61% 8.58% 4.36% 6.19% 4.00% 5.50% 5.50% 6.25% 4.75% 5.50% 5.50% 2011 2010 Medical cost trend rate Prescription drug cost trend rate Rate to which medical and prescription drug cost trend rates will gradually ... 25% to 70% 30% to 60% 3% to 17% 76 76 Textron Inc. Annual Report • 2011

  • Page 88
    ...9 is as follows: December 31, 2011 Level 1 Level 2 January 1, 2011 Level 2 (In millions) Level 3 ...which then are updated at least annually by the real estate investment ... return on plan assets: Related to assets still held at reporting date Related to assets sold during the period Purchases, sales ...

  • Page 89
    ...payments are based on the same assumptions used to measure our benefit obligation at the end of fiscal 2011. While pension benefit payments primarily will be paid out of qualified pension trusts, we will pay ... of the $85 million was paid in 2010. 78 78 Textron Inc. Annual Report • 2011

  • Page 90
    ...to examination based upon management's evaluati on of the facts, circumstances and information available at the reporting date. For those tax positions for which it is more likely than not that a tax benefit... in our major jurisdictions for years before 2005. Textron Inc. Annual Report • 2011 79

  • Page 91
    ... net deferred tax asset (liability) Net deferred tax asset Our net operating loss and credit carryforwards at December 31, 2011 are as follows: (In millions) $ $ 288 532 820 8 828 $ $ 290 571 861 (108) ... they no longer are indefinitely reinvested. 80 80 Textron Inc. Annual Report • 2011

  • Page 92
    ...at the end of 2011 and 2010, respectively.... At December 31, 2011, environmental reserves of ...2011, 2010 and 2009, respectively. Leases Rental expense approximated $93 million in 2011...for noncancelable operating leases in effect at December 31, 2011 approximated $58 million for 2012, $46 million ...

  • Page 93
    ...group includes amounts paid to the Manufacturing group of $26 million, $32 million and $3 million in 2011, 2010 and 2009, respectively. In 2010, taxes paid, net of refunds received for the Finance group... sporting venues, and commercial and industrial users. 82 82 Textron Inc. Annual Report • 2011

  • Page 94
    ...86 $ 198 304 240 27 (294) 475 (317) (164) (143) (149) (In millions) 2011 Revenues 2010 2009 Fixed-wing aircraft Rotor aircraft Unmanned aircraft systems, armored security vehicles, precision weapons and other Fuel ...31 11 393 $ $ 115 83 85 76 36 14 409 Textron Inc. Annual Report • 2011 83

  • Page 95
    ...of our continuing operations by geographic area: Revenues* (In millions) 2011 2010 2009 Property, Plant and Equipment, net** December 31, January 1, 2011 2011 7,138 $ 6,688 1,577 1,448 289 347 820 815 ... 100 36 76 - 2,005 $ $ 1,565 220 89 22 52 - 1,948 84 84 Textron Inc. Annual Report • 2011

  • Page 96
    ...14.66 0.02 21.52 $ 24.18 16.02 $ 19.92 0.02 $ 0.02 (a) The fourth quarter of 2011 includes a $41 million impairment charge to write down certain intangible assets and approximately $19 million in severance costs related to... loss from continuing operations. Textron Inc. Annual Report • 2011 85

  • Page 97
    Schedule II - Valuation and Qualifying Accounts (In millions) 2011 2010 2009 Allowance for doubtful accounts Balance at beginning of year $ 20 $ 23 $ 24 Charged to... accounts (less recoveries), inventory disposals and currency translation adjustments. 86 86 Textron Inc. Annual Report • 2011

  • Page 98
    ... been no changes in our internal control over financial reporting during the fourth quarter of the fiscal year covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Textron Inc. Annual Report • 2011 87

  • Page 99
    ... OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - Fees to Independent Auditors" in the Proxy Statement for our Annual Meeting of Shareholders to be held on April 25, 2012 is incorporated by reference into this Annual Report on Form 10-K. 88 88 Textron Inc. Annual Report • 2011

  • Page 100
    ... 2011. Incorporated by reference to Exhibit 3.1 to Textron's Quarterly Report on Form 10Q for the fiscal quarter ended April 2, 2011.... Share Unit Grant Agreement. Incorporated by reference to Exhibit 10.1H to Textron's Annual Report on Form 10-K for the fiscal year ended January 3, 2009. 3.1B 3.2...

  • Page 101
    ... Textron Key Executives, dated October 26, 2010. Incorporated by reference to Exhibit 10.10B to Textron's Annual Report on Form 10 -K for the fiscal year ended January 1, 2011. Form of Indemnity Agreement between Textron and its executive officers. Incorporated by reference to Exhibit A to Textron...

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    ... on Form 10-Q for the fiscal quarter ended April 2, 2011. Letter Agreement between Textron and E. Robert Lupone, dated December 22, 2011. Director Compensation. Incorporated by reference to Exhibit 10.21 to Textron's Annual Report on Form 10 -K for the fiscal year ended December 29, 2007. Form of...

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    ... Sciences Corporation, dated as of June 17, 2009. Incorporated by reference to Exhibit 10.22D to Textron's Annual Report on Form 10-K for the fiscal year ended January 1, 2011. Amendment No. 7 to Master Services Agreement between Textron Inc. and Computer Sciences Corporation, dated as of September...

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    ... of the Sarbanes-Oxley Act of 2002. The following materials from Textron Inc.'s Annual Report on Form 10 -K for the year ended December 31, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the...

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    Signatures Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on this 23rd day of February 2012. TEXTRON INC. Registrant ...

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    Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below on this 23rd day of... Corporate Controller (principal accounting officer) *By: /s/ Jayne M. Donegan Jayne M. Donegan, Attorney-in-fact Textron Inc. Annual Report • 2011 95

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    ... and General Information To receive a copy of Textron's Forms 10-K and 10-Q, Proxy Statement or Annual Report without charge, visit our web site at www.textron.com, call (888) TXT-LINE or send...2269; or send an e-mail to [email protected]. 96 Textron Inc. Annual Report • 2011

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    TEXTRON'S DIVERSE PRODUCT PORTFOLIO INCLUDES GLOBALLY RECOGNIZED BRANDS SUCH AS BELL HELICOPTER, CESSNA AIRCRAFT, CUSHMAN, E-Z-GO, GREENLEE, JACOBSEN, KAUTEX, KLAUKE, LYCOMING AND MORE. BELL CESSNA INDUSTRIAL TEXTRON SYSTEMS BELL-BOEING V-22 OSPREY CESSNA CITATION LATITUDE GREENLEE PROVLâ„¢ POWER...

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    Textron Inc. • 40 Westminster Street • Providence, RI 02903 • (401) 421-2800 • www.textron.com