[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934
For
the fiscal quarter ended June 30, 2007
|
OR
|
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
(State
or other jurisdiction of
incorporation
or organization)
|
05-0315468
(I.R.S.
Employer Identification No.)
|
Page
|
||
PART
I.
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
||
3
|
||
4
|
||
5
|
||
7
|
||
Item
2.
|
14
|
|
Item
3.
|
23
|
|
Item
4.
|
23
|
|
PART
II.
|
OTHER
INFORMATION
|
|
Item
2.
|
24
|
|
Item
4.
|
25
|
|
Item
5.
|
26
|
|
Item
6.
|
26
|
|
27
|
||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
|||||||||||||
Revenues
|
||||||||||||||||
Manufacturing
revenues
|
$ |
2,996
|
$ |
2,628
|
$ |
5,750
|
$ |
5,078
|
||||||||
Finance
revenues
|
239
|
192
|
449
|
374
|
||||||||||||
Total
revenues
|
3,235
|
2,820
|
6,199
|
5,452
|
||||||||||||
Costs,
expenses and other
|
||||||||||||||||
Cost
of sales
|
2,374
|
2,081
|
4,554
|
4,036
|
||||||||||||
Selling
and administrative
|
429
|
376
|
801
|
737
|
||||||||||||
Interest
expense, net
|
124
|
109
|
247
|
203
|
||||||||||||
Provision
for losses on finance receivables
|
11
|
(1 | ) |
16
|
8
|
|||||||||||
Total
costs, expenses and
other
|
2,938
|
2,565
|
5,618
|
4,984
|
||||||||||||
Income
from continuing operations before income taxes
|
297
|
255
|
581
|
468
|
||||||||||||
Income
taxes
|
(82 | ) | (78 | ) | (168 | ) | (133 | ) | ||||||||
Income
from continuing operations
|
215
|
177
|
413
|
335
|
||||||||||||
Loss
from discontinued operations, net of income taxes
|
(5 | ) | (108 | ) | (7 | ) | (98 | ) | ||||||||
Net
income
|
$ |
210
|
$ |
69
|
$ |
406
|
$ |
237
|
||||||||
Basic
earnings per share:
|
||||||||||||||||
Continuing
operations
|
$ |
1.72
|
$ |
1.38
|
$ |
3.30
|
$ |
2.59
|
||||||||
Discontinued
operations, net of
income taxes
|
(0.03 | ) | (0.84 | ) | (0.05 | ) | (0.76 | ) | ||||||||
Basic
earnings per share
|
$ |
1.69
|
$ |
0.54
|
$ |
3.25
|
$ |
1.83
|
||||||||
Diluted
earnings per share:
|
||||||||||||||||
Continuing
operations
|
$ |
1.69
|
$ |
1.34
|
$ |
3.24
|
$ |
2.53
|
||||||||
Discontinued
operations, net of
income taxes
|
(0.03 | ) | (0.81 | ) | (0.05 | ) | (0.74 | ) | ||||||||
Diluted
earnings per share
|
$ |
1.66
|
$ |
0.53
|
$ |
3.19
|
$ |
1.79
|
||||||||
Dividends
per share:
|
||||||||||||||||
$2.08
Preferred stock, Series
A
|
$ |
0.52
|
$ |
0.52
|
$ |
1.04
|
$ |
1.04
|
||||||||
$1.40
Preferred stock, Series
B
|
$ |
0.35
|
$ |
0.35
|
$ |
0.70
|
$ |
0.70
|
||||||||
Common
stock
|
$ |
0.3875
|
$ |
0.3875
|
$ |
0.775
|
$ |
0.775
|
June
30,
2007
|
December
30,
2006
|
|||||||
Assets
|
||||||||
Manufacturing
group
|
||||||||
Cash
and cash equivalents
|
$ |
631
|
$ |
733
|
||||
Accounts
receivable, less allowance for doubtful accounts of $34 and
$34
|
1,075
|
964
|
||||||
Inventories
|
2,518
|
2,069
|
||||||
Other
current assets
|
510
|
521
|
||||||
Total
current
assets
|
4,734
|
4,287
|
||||||
Property,
plant and equipment, less accumulated
depreciation
and amortization
of $2,258 and $2,147
|
1,807
|
1,773
|
||||||
Goodwill
|
1,262
|
1,257
|
||||||
Other
assets
|
1,264
|
1,233
|
||||||
Total
Manufacturing group
assets
|
9,067
|
8,550
|
||||||
Finance
group
|
||||||||
Cash
|
66
|
47
|
||||||
Finance
receivables, less allowance for losses of $86 and $93
|
8,253
|
8,217
|
||||||
Goodwill
|
169
|
169
|
||||||
Other
assets
|
568
|
567
|
||||||
Total
Finance group
assets
|
9,056
|
9,000
|
||||||
Total
assets
|
$ |
18,123
|
$ |
17,550
|
||||
Liabilities
and shareholders’ equity
|
||||||||
Liabilities
|
||||||||
Manufacturing
group
|
||||||||
Current
portion of long-term debt and short-term debt
|
$ |
86
|
$ |
80
|
||||
Accounts
payable
|
936
|
814
|
||||||
Accrued
liabilities
|
2,135
|
2,100
|
||||||
Total
current
liabilities
|
3,157
|
2,994
|
||||||
Other
liabilities
|
2,328
|
2,329
|
||||||
Long-term
debt
|
1,709
|
1,720
|
||||||
Total
Manufacturing group
liabilities
|
7,194
|
7,043
|
||||||
Finance
group
|
||||||||
Other
liabilities
|
567
|
499
|
||||||
Deferred
income taxes
|
492
|
497
|
||||||
Debt
|
6,937
|
6,862
|
||||||
Total
Finance group
liabilities
|
7,996
|
7,858
|
||||||
Total
liabilities
|
15,190
|
14,901
|
||||||
Shareholders’
equity
|
||||||||
Capital
stock:
|
||||||||
Preferred
stock
|
10
|
10
|
||||||
Common
stock
|
26
|
26
|
||||||
Capital
surplus
|
1,893
|
1,786
|
||||||
Retained
earnings
|
6,509
|
6,211
|
||||||
Accumulated
other comprehensive loss
|
(564 | ) | (644 | ) | ||||
7,874
|
7,389
|
|||||||
Less
cost of treasury shares
|
4,941
|
4,740
|
||||||
Total
shareholders’ equity
|
2,933
|
2,649
|
||||||
Total
liabilities and shareholders’ equity
|
$ |
18,123
|
$ |
17,550
|
||||
Common
shares outstanding (in thousands)
|
124,855
|
125,596
|
|
See
Notes to the consolidated financial
statements.
|
Consolidated
|
||||||||
2007
|
2006
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ |
406
|
$ |
237
|
||||
Loss
from discontinued operations
|
7
|
98
|
||||||
Income
from continuing operations
|
413
|
335
|
||||||
Adjustments
to reconcile income from continuing operations to net cash provided
by
operating activities:
|
||||||||
Earnings
of Finance group, net
of distributions
|
-
|
-
|
||||||
Depreciation
and
amortization
|
153
|
138
|
||||||
Provision
for losses on
finance receivables
|
16
|
8
|
||||||
Share-based
compensation
|
18
|
17
|
||||||
Deferred
income
taxes
|
10
|
2
|
||||||
Changes
in assets and
liabilities excluding those related to acquisitions and
divestitures:
|
||||||||
Accounts
receivable,
net
|
(103 | ) | (109 | ) | ||||
Inventories
|
(447 | ) | (398 | ) | ||||
Other
assets
|
49
|
25
|
||||||
Accounts
payable
|
118
|
257
|
||||||
Accrued
and other
liabilities
|
36
|
58
|
||||||
Captive
finance receivables,
net
|
(171 | ) | (205 | ) | ||||
Other
operating activities,
net
|
31
|
32
|
||||||
Net
cash provided by operating
activities of continuing operations
|
123
|
160
|
||||||
Net
cash (used in) provided by
operating activities of discontinued operations
|
(3 | ) |
65
|
|||||
Net
cash provided by operating
activities
|
120
|
225
|
||||||
Cash
flows from investing activities:
|
||||||||
Finance
receivables:
|
||||||||
Originated
or
purchased
|
(5,964 | ) | (5,475 | ) | ||||
Repaid
|
5,463
|
4,658
|
||||||
Proceeds
on receivables sales
and securitization sales
|
689
|
50
|
||||||
Capital
expenditures
|
(142 | ) | (134 | ) | ||||
Proceeds
on sale of property, plant and equipment
|
3
|
3
|
||||||
Other
investing activities, net
|
12
|
38
|
||||||
Net
cash provided by (used in)
investing activities of continuing operations
|
61
|
(860 | ) | |||||
Net
cash provided by (used in)
investing activities of discontinued operations
|
32
|
(21 | ) | |||||
Net
cash provided by (used in)
investing activities
|
93
|
(881 | ) | |||||
Cash
flows from financing activities:
|
||||||||
(Decrease)
increase in short-term debt
|
(145 | ) |
389
|
|||||
Proceeds
from issuance of long-term debt
|
1,070
|
1,034
|
||||||
Principal
payments and retirements of long-term debt
|
(992 | ) | (655 | ) | ||||
Proceeds
from employee stock ownership plans
|
69
|
143
|
||||||
Purchases
of Textron common stock
|
(221 | ) | (598 | ) | ||||
Dividends
paid
|
(97 | ) | (147 | ) | ||||
Dividends
paid to Manufacturing group
|
-
|
-
|
||||||
Capital
contributions paid to Finance group
|
-
|
-
|
||||||
Excess
tax benefits related to stock option exercises
|
12
|
18
|
||||||
Net
cash (used in) provided by
financing activities of continuing operations
|
(304 | ) |
184
|
|||||
Net
cash used in financing
activities of discontinued operations
|
-
|
(6 | ) | |||||
Net
cash (used in) provided by
financing activities
|
(304 | ) |
178
|
|||||
Effect
of exchange rate changes on cash and cash equivalents
|
8
|
7
|
||||||
Net
decrease in cash and cash equivalents
|
(83 | ) | (471 | ) | ||||
Cash
and cash equivalents at beginning of period
|
780
|
796
|
||||||
Cash
and cash equivalents at end of period
|
$ |
697
|
$ |
325
|
||||
Supplemental
schedule of non-cash investing and financing activities from continuing
operations:
|
||||||||
Capital
expenditures financed through capital leases
|
$ |
22
|
$ |
5
|
Manufacturing
Group*
|
Finance
Group*
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||
Net
income
|
$ |
406
|
$ |
237
|
$ |
76
|
$ |
67
|
||||||||
Loss
from discontinued operations
|
7
|
98
|
-
|
-
|
||||||||||||
Income
from continuing operations
|
413
|
335
|
76
|
67
|
||||||||||||
Adjustments
to reconcile income from continuing operations to net cash provided
by
operating
activities:
|
||||||||||||||||
Earnings
of Finance group, net
of distributions
|
59
|
13
|
-
|
-
|
||||||||||||
Depreciation
and
amortization
|
134
|
119
|
19
|
19
|
||||||||||||
Provision
for losses on
finance receivables
|
-
|
-
|
16
|
8
|
||||||||||||
Share-based
compensation
|
18
|
17
|
-
|
-
|
||||||||||||
Deferred
income
taxes
|
(2 | ) | (3 | ) |
12
|
5
|
||||||||||
Changes
in assets and
liabilities excluding those related to acquisitions and
divestitures:
|
||||||||||||||||
Accounts
receivable,
net
|
(103 | ) | (109 | ) |
-
|
-
|
||||||||||
Inventories
|
(438 | ) | (356 | ) |
-
|
-
|
||||||||||
Other
assets
|
24
|
18
|
20
|
1
|
||||||||||||
Accounts
payable
|
118
|
257
|
-
|
-
|
||||||||||||
Accrued
and other
liabilities
|
24
|
7
|
12
|
51
|
||||||||||||
Captive
finance receivables,
net
|
-
|
-
|
-
|
-
|
||||||||||||
Other
operating activities,
net
|
33
|
28
|
(2 | ) |
4
|
|||||||||||
Net
cash provided by operating
activities of continuing operations
|
280
|
326
|
153
|
155
|
||||||||||||
Net
cash (used in) provided by
operating activities of discontinued operations
|
(3 | ) |
69
|
-
|
(4 | ) | ||||||||||
Net
cash provided by operating
activities
|
277
|
395
|
153
|
151
|
||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||
Finance
receivables:
|
||||||||||||||||
Originated
or
purchased
|
-
|
-
|
(6,489 | ) | (5,996 | ) | ||||||||||
Repaid
|
-
|
-
|
5,795
|
4,974
|
||||||||||||
Proceeds
on receivables sales
and securitization sales
|
-
|
-
|
711
|
50
|
||||||||||||
Capital
expenditures
|
(138 | ) | (129 | ) | (4 | ) | (5 | ) | ||||||||
Proceeds
on sale of property, plant and equipment
|
3
|
3
|
-
|
-
|
||||||||||||
Other
investing activities, net
|
(2 | ) | (4 | ) |
10
|
6
|
||||||||||
Net
cash (used in) provided by
investing activities of continuing operations
|
(137 | ) | (130 | ) |
23
|
(971 | ) | |||||||||
Net
cash provided by (used in)
investing activities of discontinued operations
|
32
|
(21 | ) |
-
|
-
|
|||||||||||
Net
cash (used in) provided by
investing activities
|
(105 | ) | (151 | ) |
23
|
(971 | ) | |||||||||
Cash
flows from financing activities:
|
||||||||||||||||
(Decrease)
increase in short-term debt
|
(44 | ) | (123 | ) | (101 | ) |
512
|
|||||||||
Proceeds
from issuance of long-term debt
|
1
|
-
|
1,069
|
1,034
|
||||||||||||
Principal
payments and retirements of long-term debt
|
(3 | ) | (3 | ) | (989 | ) | (652 | ) | ||||||||
Proceeds
from employee stock ownership plans
|
69
|
143
|
-
|
-
|
||||||||||||
Purchases
of Textron common stock
|
(221 | ) | (598 | ) |
-
|
-
|
||||||||||
Dividends
paid
|
(97 | ) | (147 | ) |
-
|
-
|
||||||||||
Dividends
paid to Manufacturing group
|
-
|
-
|
(135 | ) | (80 | ) | ||||||||||
Capital
contributions paid to Finance Group
|
-
|
(18 | ) |
-
|
18
|
|||||||||||
Excess
tax benefits related to stock option exercises
|
12
|
18
|
-
|
-
|
||||||||||||
Net
cash (used in) provided by
financing activities of continuing operations
|
(283 | ) | (728 | ) | (156 | ) |
832
|
|||||||||
Net
cash used in financing
activities of discontinued operations
|
-
|
(6 | ) |
-
|
-
|
|||||||||||
Net
cash (used in) provided by
financing activities
|
(283 | ) | (734 | ) | (156 | ) |
832
|
|||||||||
Effect
of exchange rate changes on cash and cash equivalents
|
9
|
6
|
(1 | ) |
1
|
|||||||||||
Net
(decrease) increase in cash and cash equivalents
|
(102 | ) | (484 | ) |
19
|
13
|
||||||||||
Cash
and cash equivalents at beginning of period
|
733
|
786
|
47
|
10
|
||||||||||||
Cash
and cash equivalents at end of period
|
$ |
631
|
$ |
302
|
$ |
66
|
$ |
23
|
||||||||
Supplemental
schedule of non-cash investing and financing activities from continuing
operations:
|
||||||||||||||||
Capital
expenditures financed through capital leases
|
$ |
22
|
$ |
5
|
$ |
-
|
$ |
-
|
(In
millions)
|
June
30,
2007
|
December
30,
2006
|
||||||
Finished
goods
|
$ |
785
|
$ |
665
|
||||
Work
in process
|
1,794
|
1,562
|
||||||
Raw
materials
|
463
|
435
|
||||||
3,042
|
2,662
|
|||||||
Less
progress/milestone payments
|
524
|
593
|
||||||
$ |
2,518
|
$ |
2,069
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
(In
millions)
|
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
||||||||||||
Net
income
|
$ |
210
|
$ |
69
|
$ |
406
|
$ |
237
|
||||||||
Other
comprehensive income:
|
||||||||||||||||
Currency
translation
adjustment
|
27
|
-
|
29
|
(3 | ) | |||||||||||
Net
deferred gain on hedge
contracts
|
27
|
12
|
22
|
14
|
||||||||||||
Recognition
of prior service
cost and unrealized losses on
pension
and postretirement
benefits
|
14
|
-
|
29
|
-
|
||||||||||||
Other
|
(1 | ) | (4 | ) |
-
|
(2 | ) | |||||||||
Comprehensive
income
|
$ |
277
|
$ |
77
|
$ |
486
|
$ |
246
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
(In
thousands)
|
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
||||||||||||
Basic
weighted-average shares outstanding
|
124,851
|
128,453
|
125,013
|
129,185
|
||||||||||||
Dilutive
effect of convertible preferred shares, stock options
and
restricted
stock
|
2,285
|
2,841
|
2,357
|
2,817
|
||||||||||||
Diluted
weighted-average shares outstanding
|
127,136
|
131,294
|
127,370
|
132,002
|
Three
Months Ended
|
Six
Month Ended
|
|||||||||||||||
(In
millions)
|
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
||||||||||||
Compensation
expense, net of hedge income or expense
|
$ |
28
|
$ |
18
|
$ |
41
|
$ |
40
|
||||||||
Income
tax benefit
|
(17 | ) | (5 | ) | (19 | ) | (18 | ) | ||||||||
Total
net compensation cost included in net income
|
$ |
11
|
$ |
13
|
$ |
22
|
$ |
22
|
||||||||
Net
compensation costs included in discontinued operations
|
$ |
-
|
$ |
1
|
$ |
-
|
$ |
2
|
||||||||
Net
compensation costs included in continuing operations
|
$ |
11
|
$ |
12
|
$ |
22
|
$ |
20
|
Number
of
Options
(In
thousands)
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Life
(In
years)
|
Aggregate
Intrinsic
Value
(In
millions)
|
|||||||||||||
Outstanding
at beginning of year
|
5,420
|
$ |
63.77
|
|||||||||||||
Granted
|
929
|
91.70
|
||||||||||||||
Exercised
|
(1,159 | ) |
59.25
|
|||||||||||||
Canceled,
expired or forfeited
|
(65 | ) |
78.25
|
|||||||||||||
Outstanding
at end of period
|
5,125
|
$ |
69.67
|
6.52
|
$ |
104
|
||||||||||
Exercisable
at end of period
|
3,275
|
$ |
59.49
|
5.12
|
$ |
99
|
Pension
Benefits
|
Postretirement
Benefits
Other
Than Pensions
|
|||||||||||||||
(In
millions)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Service
cost
|
$ |
34
|
$ |
36
|
$ |
2
|
$ |
3
|
||||||||
Interest
cost
|
73
|
69
|
11
|
10
|
||||||||||||
Expected
return on plan assets
|
(99 | ) | (96 | ) |
-
|
-
|
||||||||||
Amortization
of prior service cost (credit)
|
5
|
4
|
(1 | ) | (2 | ) | ||||||||||
Amortization
of net loss
|
12
|
12
|
5
|
5
|
||||||||||||
Net
periodic benefit cost
|
$ |
25
|
$ |
25
|
$ |
17
|
$ |
16
|
Pension
Benefits
|
Postretirement
Benefits
Other
Than Pensions
|
|||||||||||||||
(In
millions)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Service
cost
|
$ |
67
|
$ |
71
|
$ |
4
|
$ |
5
|
||||||||
Interest
cost
|
146
|
138
|
21
|
20
|
||||||||||||
Expected
return on plan assets
|
(198 | ) | (192 | ) |
-
|
-
|
||||||||||
Amortization
of prior service cost (credit)
|
9
|
9
|
(2 | ) | (3 | ) | ||||||||||
Amortization
of net loss
|
25
|
24
|
11
|
11
|
||||||||||||
Net
periodic benefit cost
|
$ |
49
|
$ |
50
|
$ |
34
|
$ |
33
|
Six
Months Ended
|
||||||||
(In
millions)
|
June
30,
2007
|
July
1,
2006
|
||||||
Accrual
at the beginning of period
|
$ |
315
|
$ |
318
|
||||
Provision
|
93
|
95
|
||||||
Settlements
|
(89 | ) | (73 | ) | ||||
Adjustments
to prior accrual estimates
|
2
|
(19 | ) | |||||
Accrual
at the end of period
|
$ |
321
|
$ |
321
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
(In
millions)
|
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
||||||||||||
REVENUES
|
||||||||||||||||
MANUFACTURING:
|
||||||||||||||||
Bell
|
$ |
915
|
$ |
805
|
$ |
1,854
|
$ |
1,588
|
||||||||
Cessna
|
1,203
|
1,005
|
2,171
|
1,874
|
||||||||||||
Industrial
|
878
|
818
|
1,725
|
1,616
|
||||||||||||
2,996
|
2,628
|
5,750
|
5,078
|
|||||||||||||
FINANCE
|
239
|
192
|
449
|
374
|
||||||||||||
Total
revenues
|
$ |
3,235
|
$ |
2,820
|
$ |
6,199
|
$ |
5,452
|
||||||||
SEGMENT
OPERATING PROFIT
|
||||||||||||||||
MANUFACTURING:
|
||||||||||||||||
Bell
|
$ |
59
|
$ |
65
|
$ |
150
|
$ |
134
|
||||||||
Cessna
|
200
|
153
|
355
|
270
|
||||||||||||
Industrial
|
59
|
54
|
119
|
103
|
||||||||||||
318
|
272
|
624
|
507
|
|||||||||||||
FINANCE
|
68
|
56
|
120
|
105
|
||||||||||||
Segment
profit
|
386
|
328
|
744
|
612
|
||||||||||||
Corporate
expenses and other, net
|
(66 | ) | (48 | ) | (116 | ) | (97 | ) | ||||||||
Interest
expense, net
|
(23 | ) | (25 | ) | (47 | ) | (47 | ) | ||||||||
Income
from continuing operations before
income
taxes
|
$ |
297
|
$ |
255
|
$ |
581
|
$ |
468
|
2006
|
2005
|
2004
|
||||||||||
Basic
|
||||||||||||
As
reported
|
$ |
5.53
|
$ |
3.86
|
$ |
2.73
|
||||||
Pro
forma
(unaudited)
|
$ |
2.76
|
$ |
1.93
|
$ |
1.37
|
||||||
Diluted
|
||||||||||||
As
reported
|
$ |
5.43
|
$ |
3.78
|
$ |
2.68
|
||||||
Pro
forma
(unaudited)
|
$ |
2.71
|
$ |
1.89
|
$ |
1.34
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
|||||||||||||
Basic
|
||||||||||||||||
As
reported
|
$ |
1.72
|
$ |
1.38
|
$ |
3.30
|
$ |
2.59
|
||||||||
Pro
forma
|
$ |
0.86
|
$ |
0.69
|
$ |
1.65
|
$ |
1.30
|
||||||||
Diluted
|
||||||||||||||||
As
reported
|
$ |
1.69
|
$ |
1.34
|
$ |
3.24
|
$ |
2.53
|
||||||||
Pro
forma
|
$ |
0.85
|
$ |
0.67
|
$ |
1.62
|
$ |
1.27
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
|||||||||||||
Federal
statutory income tax rate
|
35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | ||||||||
Increase
(decrease) in taxes resulting from:
|
||||||||||||||||
State
income
taxes
|
1.4
|
1.6
|
1.3
|
1.6
|
||||||||||||
Foreign
tax rate
differential
|
(1.6 | ) | (3.7 | ) | (1.6 | ) | (3.7 | ) | ||||||||
Manufacturing
deduction
|
(1.6 | ) | (0.6 | ) | (1.6 | ) | (0.6 | ) | ||||||||
Equity
hedge
income
|
(1.9 | ) | (1.0 | ) | (1.0 | ) | (0.9 | ) | ||||||||
Export
sales
benefit
|
-
|
(1.1 | ) |
-
|
(1.1 | ) | ||||||||||
Canadian
functional
currency
|
-
|
-
|
(0.3 | ) |
-
|
|||||||||||
Favorable
tax
settlements
|
(3.3 | ) |
-
|
(1.7 | ) | (2.6 | ) | |||||||||
Other,
net
|
(0.4 | ) |
0.4
|
(1.2 | ) |
0.7
|
||||||||||
Effective
income tax rate
|
27.6 | % | 30.6 | % | 28.9 | % | 28.4 | % |
Bell
|
||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
(In
millions)
|
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
||||||||||||
Revenues
|
$ |
915
|
$ |
805
|
$ |
1,854
|
$ |
1,588
|
||||||||
Segment
profit
|
59
|
65
|
150
|
134
|
Cessna
|
||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
(In
millions)
|
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
||||||||||||
Revenues
|
$ |
1,203
|
$ |
1,005
|
$ |
2,171
|
$ |
1,874
|
||||||||
Segment
profit
|
200
|
153
|
355
|
270
|
Industrial
|
||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
(In
millions)
|
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
||||||||||||
Revenues
|
$ |
878
|
$ |
818
|
$ |
1,725
|
$ |
1,616
|
||||||||
Segment
profit
|
59
|
54
|
119
|
103
|
Finance
|
||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
(In
millions)
|
June
30,
2007
|
July
1,
2006
|
June
30,
2007
|
July
1,
2006
|
||||||||||||
Revenues
|
$ |
239
|
$ |
192
|
$ |
449
|
$ |
374
|
||||||||
Segment
profit
|
68
|
56
|
120
|
105
|
June
30,
|
December
30,
|
|||||||
(Dollars
in millions)
|
2007
|
2006
|
||||||
Nonperforming
assets
|
$ |
89
|
$ |
113
|
||||
Nonaccrual
finance receivables
|
$ |
51
|
$ |
75
|
||||
Allowance
for losses
|
$ |
86
|
$ |
93
|
||||
Ratio
of nonperforming assets to total finance assets
|
1.00 | % | 1.28 | % | ||||
Ratio
of allowance for losses on receivables to nonaccrual finance
receivables
|
171.3 | % | 123.1 | % | ||||
60+
days contractual delinquency as a percentage of finance
receivables
|
0.56 | % | 0.77 | % |
(In
millions)
|
Facility
Amount
|
Commercial
Paper
Outstanding
|
Letters
of Credit
Outstanding
|
Amount
Not Reserved as Support for Commercial Paper and Letters of
Credit
|
||||||||||||
Manufacturing
group – multi-year
facility
expiring in
2012*
|
$ |
1,250
|
$ |
-
|
$ |
20
|
$ |
1,230
|
||||||||
Finance
group - multi-year
facility
expiring in 2012
|
$ |
1,750
|
$ |
1,624
|
$ |
12
|
$ |
114
|
Operating Cash Flows
of Continuing Operations
|
||||||||
Six
Months Ended
|
||||||||
(In
millions)
|
June
30, 2007
|
July
1, 2006
|
||||||
Manufacturing
group
|
$ |
280
|
$ |
326
|
||||
Finance
group
|
153
|
155
|
||||||
Reclassifications
and elimination adjustments
|
(310 | ) | (321 | ) | ||||
Consolidated
|
$ |
123
|
$ |
160
|
Six
Months Ended
|
||||||||
(In
millions)
|
June
30, 2007
|
July
1, 2006
|
||||||
Reclassifications
from investing activities:
|
||||||||
Finance
receivable originations
for Manufacturing group
inventory
sales
|
$ | (525 | ) | $ | (521 | ) | ||
Cash
received from customers and
securitizations for
captive
financing
|
354
|
316
|
||||||
Other
|
(4 | ) | (36 | ) | ||||
Total
reclassifications from investing activities
|
(175 | ) | (241 | ) | ||||
Dividends
paid by Finance group to Manufacturing group
|
(135 | ) | (80 | ) | ||||
Total
reclassifications and adjustments
|
$ | (310 | ) |