TEXTRON
 
Exhibit 99.1
   
Corporate Communications
Department
 
 
NEWS Release
 
Investor Contacts:
Doug Wilburne – 401-457-2288
Bill Pitts – 401-457-2288
 
 
FOR IMMEDIATE RELEASE
Media Contact:
Michael Maynard – 401-457-2474
 
 
Textron Reports Fourth Quarter GAAP Loss of $0.23 per share;
$0.15 EPS from Continuing Operations before Special Charges

Reduces Finance Managed Receivables in 2009 by $3.8 Billion

Generates $424 Million in 2009 Manufacturing Free Cash Flow

Providence, Rhode Island – January 28, 2010
– Textron Inc. (NYSE: TXT) today reported a fourth quarter 2009 net loss of $0.23 per share. Excluding special charges, the company reported income from continuing operations of $0.15 per share.  Revenues were $2.8 billion, down 21 percent from the fourth quarter of 2008. Manufacturing free cash flow from continuing operations for the year was $424 million.

Managed receivables at the company’s finance business ended the year at $7.1 billion, down $3.8 billion from the end of last year.

The company recorded pre-tax, special charges of $114 million in the quarter, which included $80 million in goodwill impairment charges associated with its golf and turfcare businesses and restructuring charges of $34 million.

“Solid cash generation was the highlight of the year, as we had excellent success in liquidating non-captive finance receivables at Textron Financial and significant cost productivity and working capital improvements in our manufacturing businesses,” said Textron President and CEO Scott C. Donnelly.

Outlook

Textron estimates 2010 revenues will be approximately $10.8 billion, reflecting top-line growth in its Bell, Textron Systems and Industrial segments, partially offset by decreases in revenue at Cessna and Finance. Free cash flow from continuing operations of the manufacturing group is expected to be between $500 - $550 million and earnings per share from continuing operations, excluding special charges, are expected to be in the range of $0.30 to $0.50. Pre-tax restructuring charges are expected to be about $30 million in 2010.

Donnelly continued, “In 2010, we will remain focused on manufacturing cost productivity, working capital improvements and further liquidation of finance receivables.  The actions we took last year coupled with those we will take this year will position us for enhanced performance as our markets rebound.”


Fourth Quarter Segment Results
 
Cessna
 
Cessna’s revenues decreased $642 million in the fourth quarter of 2009 compared with the corresponding period of 2008, due to lower volumes.
 
Cessna’s segment profit decreased $170 million due to the impact from lower sales volume, partially offset by favorable cost performance.  The favorable cost performance included lower selling and administrative expenses, largely due to workforce reductions in 2009, the benefit of forfeiture income from order cancellations, and a decrease in write-downs of pre-owned aircraft inventory.
 
Cessna backlog at the end of the fourth quarter was $4.9 billion, a decline of $2.0 billion from the third quarter.
 
 
Bell
 
Bell’s revenues decreased $51 million in the fourth quarter due to lower sales volume, partially offset by higher pricing.
 
Bell’s segment profit decreased $10 million due to lower volume and a change in commercial helicopter product mix, partially offset by higher pricing.
 
Bell backlog at the end of the fourth quarter was $6.9 billion, up $1.3 billion from the end of last quarter primarily driven by the V-22 program.
 
 
Textron Systems
 
 
Revenues at Textron Systems increased $49 million due to higher defense volumes, partially offset by lower aircraft engine volumes.
 
Segment profit at Textron Systems increased $8 million due to higher defense volumes, partially offset by higher inflation net of pricing and lower aircraft engine volume.
 
Backlog at the end of the fourth quarter was $1.7 billion, down $183 million from the third quarter.
 
 
Industrial
 
Revenue in the Industrial segment decreased $26 million due to lower volume and lower pricing, partially offset by a favorable foreign exchange impact.
 
Industrial segment profit increased $42 million due to improved cost performance, partially offset by lower volume.  Cost performance improved due to workforce reductions, employee furloughs, temporary plant shutdowns and lower selling and administrative expenses.
 
 
Finance
 
Finance revenues decreased $66 million compared to fourth quarter 2008 largely due to higher portfolio losses, and the revenue impact of lower average finance receivables, lower other income and suspended earnings on nonaccrual finance receivables.  These items were partially offset by the accretion from previous mark-to-market adjustments, lower securitization impairments (net of gains) and gains on early debt extinguishment.

Finance segment loss improved $58 million primarily reflecting lower loan loss provisions due to large provisions taken in the fourth quarter of 2008 and the accretion from previous mark-to-market adjustments, partially offset by higher portfolio losses.

Sixty-day plus delinquencies of finance receivables held for investment increased to $569 million from $440 million at the end of the third quarter 2009.  Nonaccrual finance receivables increased to $1.04 billion from $838 million last quarter.  Net charge-offs in the fourth quarter decreased to $22 million compared with $23 million in the third quarter.

Managed receivables ended the year at $7.06 billion, down from $10.82 billion at the beginning of the year.


Non-GAAP Measures

Income from continuing operations, excluding special charges and manufacturing free cash flow are non-GAAP measures that are defined and reconciled to GAAP in attachments to this release.
 
Conference Call Information

Textron will host its conference call today, January 28, 2010 at 9:00 a.m., Eastern to discuss its results and outlook.  The call will be available via webcast at www.textron.com or by direct dial at (877) 209-9919 in the U.S. or (612) 332-0636 outside of the U.S. (request the Textron Earnings Call).

In addition, the call will be recorded and available for playback by 11:30 a.m., Eastern time on Thursday, January 28, 2010 by dialing (320) 365-3844; Access Code: 994808.

A package containing key data that will be covered on today’s call can be found in the Investor Relations section of the company’s website at www.textron.com.


About Textron Inc.
Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell Helicopter, Cessna Aircraft Company, Jacobsen, Kautex, Lycoming, E-Z-GO, Greenlee, and Textron Systems. More information is available at www.textron.com.
###

 
 
Forward-looking Information
 
 
Certain statements in this press release and other oral and written statements made by us from time to time are forward-looking statements, including those that discuss strategies, goals, outlook or other non-historical matters, or project revenues, income, returns or other financial measures. These forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements, including the risk factors contained in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and the following: (a) changes in worldwide economic or political conditions that impact demand for our products, interest rates and foreign exchange rates; (b) the interruption of production at our facilities or our customers or suppliers; (c) performance issues with key suppliers, subcontractors and business partners; (d) our ability to perform as anticipated and to control costs under contracts with the U.S. Government; (e) the U.S. Government’s ability to unilaterally modify or terminate its contracts with us for the U.S. Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, and, under certain circumstances, to suspend or debar us as a contractor eligible to receive future contract awards; (f) changing priorities or reductions in the U.S. Government defense budget, including those related to Operation Iraqi Freedom, Operation Enduring Freedom and the Overseas Contingency Operations; (g) changes in national or international funding priorities, U.S. and foreign military budget constraints and determinations, and government policies on the export and import of military and commercial products; (h) legislative or regulatory actions impacting our operations or demand for our products; (i) the ability to control costs and successful implementation of various cost-reduction programs; (j) the timing of new product launches and certifications of new aircraft products; (k) the occurrence of slowdowns or downturns in customer markets in which our products are sold or supplied or in which our Finance segment holds receivables; (l) changes in aircraft delivery schedules, or cancellation or deferral of orders; (m) the impact of changes in tax legislation; (n) the extent to which we are able to pass raw material price increases through to customers or offset such price increases by reducing other costs; (o) our ability to offset, through cost reductions, pricing pressure brought by original equipment manufacturer customers; (p) our ability to realize full value of receivables; (q) the availability and cost of insurance; (r) increases in pension expenses and other postretirement employee costs; (s) our Finance segment’s ability to maintain portfolio credit quality (t) Textron Financial Corporation’s (“TFC”) ability to maintain certain minimum levels of financial performance required under its committed bank lines of credit and under Textron’s support agreement with TFC; (u) our Finance segment’s  access to financing, including securitizations, at competitive rates; (v) our ability to successfully exit from TFC’s commercial finance business, other than the captive finance business, including effecting an orderly liquidation or sale of certain TFC portfolios and businesses; (w) uncertainty in estimating market value of TFC’s receivables held for sale and reserves for TFC’s receivables to be retained; (x) uncertainty in estimating contingent liabilities and establishing reserves to address such contingencies; (y) risks and uncertainties related to acquisitions and dispositions, including difficulties or unanticipated expenses in connection with the consummation of acquisitions or dispositions, the disruption of current plans and operations, or the failure to achieve anticipated synergies and opportunities; (z) the efficacy of research and development investments to develop new products; (aa) the launching of significant new products or programs which could result in unanticipated expenses; (bb) bankruptcy or other financial problems at major suppliers or customers that could cause disruptions in our supply chain or difficulty in collecting amounts owed by such customers; (cc) difficult conditions in the financial markets which may adversely impact our customers’ ability to fund or finance purchases of our products; and (dd) continued volatility in the economy resulting in a prolonged downturn in the markets in which we do business.
 
 
 

 
 

The following information was filed by Textron Inc (TXT) on Thursday, January 28, 2010 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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