Wilburne – 401-457-2288
Pitts – 401-457-2288
Gordon Quintal – 401-457-2362
Reports Fourth Quarter and Full-Year Financial
Providence, Rhode Island – January
29, 2009 – Textron Inc. (NYSE: TXT) today reported fourth quarter 2008
income from continuing operations, excluding special charges, of $0.40 per
share, consistent with its December 22, 2008 press release. Revenues
in the quarter were $3.6 billion, up slightly compared to the fourth quarter of
On a GAAP
basis, Textron reported a loss from continuing operations for the quarter of
$348 million or $1.44 per share, as compared to fourth quarter 2007 income from
continuing operations of $247 million or $0.97 per share. Including discontinued
operations, Textron’s fourth quarter 2008 net loss was $209 million or $0.87 per
share, compared with fourth quarter 2007 net income of $256 million or $1.00 per
December 22, 2008, the company announced a plan to exit all non-captive
financial business. As a consequence, in the quarter, Textron recorded a number
of special charges including a $293 million pre-tax mark-to-market adjustment
against finance receivables held for sale, a $169 million pre-tax impairment
charge to eliminate Textron Financial Corporation’s (TFC) goodwill and a $31
million tax charge related to the change in investment status of TFC’s Canadian
subsidiary. Textron also recorded a pre-tax restructuring charge of $64 million
related to cost-saving initiatives across the enterprise.
full year, Textron’s Manufacturing group generated net cash from operating
activities before capital contributions to and net dividends from TFC of $899
million and incurred capital expenditures of $542 million.
Textron net dividends of $142 million during the year. During the fourth quarter
Textron made a $625 million capital contribution into TFC to maintain the
earnings to fixed charge coverage ratio under the support agreement between
Textron and TFC. Cash flow from operations for the Manufacturing group under a
GAAP basis totaled $416 million as compare to $1.2 billion for
conditions continued to weaken during the fourth quarter, significantly
impacting our Industrial and TFC businesses,” said Textron Chairman and CEO
Lewis B. Campbell. “However, for the year, we had strong performance
at Bell, Cessna and Textron Systems,” Campbell added.
backlog at Cessna, Bell and Textron Systems was $23.2 billion at the end of the
fourth quarter, up $4.4 billion from the end of last year.
from continuing operations, excluding special charges, and net cash provided by
operating activities for the Manufacturing group before capital contribution and
net dividends from TFC are Non-GAAP measures that are defined in the attachments
to this release.
to 2009, the company expects the economy will continue to impact results at TFC
and result in lower volumes at Cessna and Industrial. On this basis, the company
estimates 2009 revenues will be approximately $12.5 billion, free cash flow from
continuing operations of the manufacturing group will be about $450 million and
earnings per share from continuing operations will be in the range of $1.00 to
$1.50, excluding expected pre-tax restructuring charges of about $40
continued, “Our priorities this year are clear – maximize cash flow and
operating performance in our manufacturing businesses and aggressively convert
finance receivables at TFC to cash. We’re aligning production to match expected
lower commercial demand, reducing non-essential capital spending, freezing
salaries, curtailing most discretionary spending, including reductions in
non-critical product development, and reducing working capital.”
believe that we are taking the right actions and will emerge from this recession
leaner and more focused. We fully expect that growth in our strong defense
businesses will sustain us over the next several years. After world economies
recover, this growth will be augmented by expansion at Cessna as well as the
remainder of our commercial businesses,” Campbell concluded.
fourth quarter revenues and segment profit decreased $64 million and $90
million, respectively, compared with the fourth quarter of
2007. Revenues decreased in spite of the sale of more jet units,
primarily reflecting a higher proportion of Mustang sales. This decrease was
partially offset by higher pricing and the benefit from the acquisition of the
Columbia single engine product lines.
profit decreased due to used aircraft valuation adjustments, the impact from
lower revenue mix, higher product development expense and overhead
backlog at the end of the fourth quarter was $14.5 billion, up $1.9 billion from
the end of last year.
revenues and segment profit increased $98 million and $40 million in the fourth
quarter. The increase in revenues was due to higher volume and
pricing. The increased volume relates to higher V-22 revenues,
partially offset by lower commercial helicopter revenues and the absence of
Armed Reconnaissance Helicopter revenues.
profit increased due to favorable cost performance, higher volume and pricing in
excess of inflation, partially offset by unfavorable mix. The cost
performance reflects the non-recurrence of program charges recorded in the
fourth quarter of 2007 in both military and commercial programs, and higher
backlog at the end of the fourth quarter was $6.2 billion, up $2.4 billion from
the end of last year.
Textron Systems (formerly
Defense & Intelligence)
and segment profit for Textron Systems increased $180 million and $37 million,
respectively. The increase in revenues is due to the benefit of our
acquired AAI business and higher volume for ASV spares and logistics,
Intelligent Battlefield Systems and Sensor Fused Weapons.
profit increased due to favorable cost performance, higher volume and the
benefit from the acquisition.
quarter ending backlog at Textron Systems was $2.5 billion, compared to $2.4
billion at the end of 2007.
and segment profit decreased $135 million and $59 million, respectively, in the
fourth quarter of 2008. Revenues decreased due to lower volumes and
an unfavorable foreign exchange impact, partially offset by higher pricing and
the favorable impact of the Paladin Tools acquisition at Greenlee.
profit decreased due to the impact of the lower volume and mix, inflation in
excess of higher pricing, and the unfavorable foreign exchange rate
revenues decreased $64 million in the fourth quarter due to lower market
interest rates, and lower securitization gains which were partially offset by
the benefit of interest rate floors.
profit decreased $171 million as a result of increased loan loss provisions,
higher borrowing costs and lower securitization gains, partially offset by the
benefit of interest rate floors.
loan loss provisions reflected weakening general market conditions, declining
collateral values and the lack of liquidity available to our borrowers and their
customers. These provisions also incorporated estimates for an
increase in expected credit losses resulting from TFC’s exit plan.
plus delinquencies increased to 2.59% from 1.06% at the end of the third
quarter. Nonperforming assets increased to 4.72% compared to 2.67% in the third
receivables ended the year at $10.8 billion, versus $11.4 billion at the end of
the third quarter.
will host a conference call today, January 29, 2009 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 (800) 288-8975 in the U.S. or
(612) 332-0418 outside of the U.S. (request the Textron Earnings
addition, the call will be recorded and available for playback beginning at
12:30 p.m. Eastern time on Thursday, January 29, 2009 by dialing (320) 365-3844;
Access Code: 896349.
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.
Inc. is a $14.2 billion multi-industry company operating in 28 countries with
approximately 42,000 employees. The company leverages its global
network of aircraft, defense and intelligence, 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, Textron Systems
and Textron Financial Corporation. More information is available at
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 most recent Quarterly Report on Form
10-Q and the following: (a) changes in worldwide economic and 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 Global War on Terrorism; (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 defense
operations; (i) the ability to control costs and successful implementation of
various cost-reduction programs, including the enterprise-wide restructuring
program; (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 where Textron Financial
Corporation (TFC) offers financing; (l) changes in aircraft delivery schedules
or cancellation 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) TFC’s ability to
maintain portfolio credit quality and certain minimum levels of financial
performance required under its committed credit facilities and under Textron’s
support agreement with TFC; (t) TFC’s access to financing, including
securitizations, at competitive rates; (u) 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; (v) uncertainty in estimating market value of TFC’s receivables held
for sale and reserves for TFC’s receivables to be retained; (w) uncertainty in
estimating contingent liabilities and establishing reserves to address such
contingencies; (x) 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; (y) the efficacy of research and development investments to
develop new products; (z) the launching of significant new products or programs
which could result in unanticipated expenses; (aa) 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; and
(bb) continued volatility and further deterioration of the capital
The following information was filed by Textron Inc (TXT) on Thursday, January 29, 2009 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.