Annual Report • 2013
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TEXTRON 40 WESTMINSTER STREET PROVIDENCE, RI 02903 (401) 421-2800 WWW.TEXTRON.COM 2013 ANNUAL REPORT © 2014 TEXTRON INC. 44496 Cover.indd 1 2/27/14 4:51 PM TEXTRON’S DIVERSE PRODUCT PORTFOLIO 2013 Textron is known around the world for its powerful brands of aircraft, defense and industrial products that provide customers with groundbreaking technologies, innovative solutions and fi rst-class service. PATH OF INNOVATION BELL HELICOPTER CESSNA INDUSTRIAL TEXTRON SYSTEMS Innovation Born Innovation Realized It starts with an idea. A group of It ends with a product. With talent, talented people then take this idea January hard work and commitment, we to places that most of us can’t put new products in the hands of imagine. Here are some of the our customers. Here are some major innovations we February of the innovative products we announced in 2013: delivered in 2013: BELL-BOEING V-22 OSPREY CESSNA CITATION X+ KAUTEX GENERATION II SCR SYSTEM™ COMMANDO ™ ELITE March Kautex Next Generation Carbon Canister™ meets the challenges April of more stringent environmental regulations. BellB Helicopter’s V-280 ValorV is next generation tiltrotor technology May BELL 429™ CESSNA CJ4 CUSHMAN TITAN HD™ SHIP-TO-SHORE CONNECTOR that offers the defense Cessna TTx is the world’s industry unparalleled fastest commercially speed and agility for produced fi xed-gear tomorrow’s missions. piston aircraft, made from all-composite materials June and delivering advanced technology and comfort. Bell Helicopter’s 505 Jet Ranger X TM reclaims a market the July ccocompany pioneered nearly 550 years ago, delivering a ® nnew design and features BELL 412™ CESSNA CITATION LATITUDE GREENLEE G3 TUGGER™ AEROSONDE that customers want. Cushman Hauler Citation Sovereign+ August PRO™ is a silent, is a visionary midsize zero-emissions jet featuring state-of- electric vehicle with the-art cockpit, all-new the range and power interior and extended once exclusive to gas- range. September powered machines. Scorpion pushes the performance envelope and redefi nes what October BELL 407™ CESSNA TTX E-Z-GO TXT™ MAST it takes to own and operate a military tactical jet. November DecemberD BELL AH-1Z CESSNA TURBO STATIONAIR JACOBSEN LF510™ G-CLAW™ Bell Helicopter’s 412EPITM, announced in Citation M2 is the upgrade March and delivered in December, offers every jet-aspiring aviator dreams greater situational awareness and improved of—with exceptional power and beauty in performance in hot temperatures and at an effi cient, entry-level jet. TEXTRON AIRLAND SCORPION JET higher altitudes. The Textron AirLand Scorpion Jet was introduced in 2013 by Textron AirLand, LLC, the joint venture of Textron Inc. and AirLand Enterprises, LLC. Scorpion is designed to be a highly-affordable twin-jet tactical aircraft for intelligence, surveillance and reconnaissance missions, including precision strike capabilities. TEXTRON AIRLAND SCORPION JET 44496 Cover.indd 2 2/28/14 1:06 PM TEXTRON’S GLOBAL NETWORK OF BUSINESSES BELL HELICOPTER TEXTRON SYSTEMS CESSNA INDUSTRIAL FINANCE Bell Helicopter is one of the Textron Systems provides With the world’s largest installed Our Industrial segment offers Our Finance segment, operated leading suppliers of helicopters innovative solutions to the base, Cessna continues to lead three main product lines: by Textron Financial Corporation, and related spare parts and defense, aerospace, homeland general aviation through two fuel systems and functional is a commercial fi nance business services in the world and is the security and general aviation principal lines of business: components produced by that provides fi nancing solutions markets with product lines pioneer of the revolutionary aircraft sales and aftermarket Kautex; golf, turf care and primarily for purchasers of that include unmanned aircraft tiltrotor aircraft. Bell Helicopter systems, marine and land services. Aircraft sales include light transportation vehicles Cessna aircraft and Bell has delivered more than 35,000 systems, weapons and sensors, Citation jets, Caravan single- and equipment manufactured Helicopter rotorcraft. aircraft to customers around the and defense and aviation mission engine utility turboprops and by E-Z-GO and Jacobsen; world. Greater than one-third of support products and services. single-engine utility and high- and manual and powered all helicopters in operation today Textron Systems includes AAI performance piston aircraft. professional tools, testing and carry the Bell Helicopter brand, Logistics & Technical Services, Aftermarket services include measurement equipment made including both military and AAI Test & Training, AAI parts, scheduled maintenance, by Greenlee. Unmanned Aircraft Systems, commercial applications. inspection, and repair services. Lycoming, Overwatch Geospatial Solutions, Overwatch Intelligence Solutions, Textron Defense Systems, Textron Marine & Land Systems and Textron Simulation & Training Systems. SELECTED YEAR-OVER-YEAR FINANCIAL DATA (Dollars in Millions, Except Per Share Amounts) 2013 2012 Total Revenues $12,104$12,237 Total Segment Profi t 963 1,132 Income from Continuing Operations 498 581 PER SHARE OF COMMON STOCK Common Stock Price: Low $23.94$18.37 High 37.43 29.18 Year-End 36.61 24.12 Diluted EPS from Continuing Operations 1.75 1.97 COMMON SHARES OUTSTANDING (In Thousands) Diluted Average 284,428 294,663 Year-End 282,059 271,263 FINANCIAL POSITION Total Assets $12,944$13,033 Manufacturing Group Debt 1,931 2,301 Finance Group Debt 1,256 1,686 Shareholders’ Equity 4,384 2,991 Manufacturing Group Debt-to-Capital (Net of Cash) 15% 24% Manufacturing Group Debt-to-Capital 31% 44% KEY PERFORMANCE METRICS Net Cash Provided by Operating Activities of Continuing Operations for Manufacturing Group—GAAP $658$958 Manufacturing Cash Flow Before Pension Contributions—Non-GAAP1 256 793 1 Manufacturing Cash Flow Before Pension Contributions is a Non-GAAP Measure. See Page 10 for Reconciliation to GAAP. Textron’s Global Network of Businesses | Selected Year-Over-Year Financial Data | 1 44496 Text.indd 1 2/28/14 10:45 AM Fellow Shareholders, For Textron, 2013 was a pivotal year. We realized $12.1 billion in total revenues and saw an operating profi t of $963 million. In our Industrial segment, acquisition and product innovation led to a four percent increase in revenues compared to 2012. At Bell Helicopter, the delivery of 41 V-22s and a double-digit rise in commercial deliveries contributed to a six percent increase in revenues over last year. The certifi cation of three new Cessna models in 2013 positioned us for future growth as global markets gain momentum. At Textron Systems, we steadily grew our international customer base, capturing signifi cant contracts from new customers in the Middle East and Asia Pacifi c regions. Innovation to Drive Growth For commercial customers, Bell Helicopter announced plans to return to the short-light single-engine cross all of our businesses, innovation matters— helicopter market with a modern version of its popular and this was the year we set out to prove it. JetRanger™. Also in 2013, Bell Helicopter made Anticipating the military’s next generation enhancements to several products in its lineup, offering rotorcraft needs, Bell Helicopter presented customers improved situational awareness and safety; Athe V-280 Valor as the ready contender for the U.S. greater landing and taxiing maneuverability; and Department of Defense’s future vertical lift program increased speed, range and load capacities. In addition and a viable option for foreign military applications. to certifying new models for delivery in 2013, Cessna Upgrades to our unmanned aircraft systems introduced advanced diagnostic service technology in allowed for broader, more strategic missions while new Citations and continued to hit major production enhancements to our intelligence-gathering software milestones for the Citation X+ and Latitude. Across improved analysts’ ability to view and customize our Industrial segment, we introduced more than 30 critical data. We introduced our expanded family of new products for our warehousing, industrial transport, COMMANDO™ armored vehicles to equip soldiers turf care, utility and electrician customers; upgraded with a greater range of fi repower, as well as a vehicle several of our most popular golf cars and rugged for safe to-and-from-base transport. Additionally, for outdoor sporting vehicles for a more comfortable and global military customers, Textron AirLand launched quieter ride; and saw innovation deliver value in the the successful fi rst fl ight of our Scorpion intelligence, form of major contracts for Kautex carbon canisters surveillance and reconnaissance aircraft, making it and catalytic reduction systems for some of the world’s one of the fastest-developed, American-made, tactical largest automakers. jets—progressing from initial design to fi rst fl ight in less than 24 months. Letter To Shareholders | 2 44496 Text.indd 2 2/27/14 4:29 PM Extended Reach to Capture More Business our global service center network. In a move that complements our aerospace business, we signed Our focus on strengthening customer relationships an agreement to acquire Beech Holdings, the parent led to several important expansions in 2013. In our company of Beechcraft—a name well known for its Industrial segment, we increased our international business, special mission, light attack, and trainer sales capacity at Jacobsen and Greenlee; added aircraft. more than 130 new E-Z-GO dealers to our domestic distribution network; and opened new Klauke Confi dence