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Previous: NEW PARAHO CORP, 10-Q, 1995-05-12 |
Next: XTRA CORP /DE/, 10-Q, 1995-05-12 |
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_______________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended April 1, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Commission file number 1-5480
_______________
TEXTRON INC.
(Exact name of registrant as specified in its charter)
_______________
Delaware 05-0315468
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
40 Westminster Street, Providence, RI 02903
401-421-2800
(Address and telephone number of principal executive offices)
_______________
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Common stock outstanding at April 29, 1995 - 85,087,000 shares
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<TABLE>
TEXTRON INC.
Consolidated Statement of Income (unaudited)
(Dollars in millions except per share amounts)
<CAPTION>
Three months ended
April 1, April 2,
1995 1994
<S> <C> <C>
Revenues
Sales $ 1,554 $ 1,688
Interest, discount and service charges 379 324
Insurance premiums 335 290
Investment income (including net realized investment gains) 119 106
Total revenues 2,387 2,408
Costs and expenses
Cost of sales 1,273 1,426
Selling and administrative 378 361
Interest 202 158
Provision for losses on collection of finance receivables, less
recoveries 39 43
Insurance benefits and increase in policy liabilities 276 225
Amortization of insurance policy acquisition costs 34 26
Total costs and expenses 2,202 2,239
Income before income taxes 185 169
Income taxes (73) (65)
Elimination of minority interest in net income of Paul Revere (3) (4)
Net income $ 109 $ 100
Net income per common share $ 1.25 $ 1.10
Average shares outstanding* 87,055,000 90,588,000
Dividends per share:
$2.08 Preferred stock, Series A $ .52 $ .52
$1.40 Preferred stock, Series B $ .35 $ .35
Common stock $ .39 $ .35
* Average shares outstanding assume full conversion of preferred stock and
exercise of options.
See notes to consolidated financial statements.
</TABLE>
Item 1. FINANCIAL STATEMENTS (Continued)
<TABLE>
TEXTRON INC.
Consolidated Balance Sheet (unaudited)
(In millions)
<CAPTION>
April 1, December 31,
1995 1994
<S> <C> <C>
Assets
Cash $ 52 $ 49
Investments 5,620 5,294
Receivables - net:
Finance 9,199 8,583
Commercial and U.S. Government 722 702
9,921 9,285
Inventories 1,267 1,211
Property, plant and equipment, less accumulated
depreciation of $1,554 and $1,450 1,268 1,253
Insurance policy acquisition costs 936 911
Goodwill, less accumulated amortization of $395 and
$381 1,505 1,512
Other assets (including net prepaid income taxes) 1,398 1,410
Total assets $ 21,967 $ 20,925
Liabilities and shareholders' equity
Liabilities
Accounts payable $ 669 $ 619
Accrued postretirement benefits other than pensions 954 951
Other accrued liabilities (including income taxes) 2,324 2,424
Insurance reserves and claims 4,863 4,685
Debt:
Textron Parent Company Borrowing Group 1,720 1,582
Finance and insurance subsidiaries 8,457 7,782
10,177 9,364
Total liabilities 18,987 18,043
Shareholders' equity
Capital stock:
Preferred stock 16 16
Common stock* 12 12
Capital surplus 709 702
Retained earnings 2,594 2,518
Other (56) (108)
3,275 3,140
Less cost of treasury shares 295 258
Total shareholders' equity 2,980 2,882
Total liabilities and shareholders' equity $ 21,967 $ 20,925
*Common shares outstanding 85,011,000 85,497,000
See notes to consolidated financial statements.
</TABLE>
Item 1. FINANCIAL STATEMENTS (Continued)
<TABLE>
TEXTRON INC.
Consolidated Statement of Cash Flows (unaudited)
(In millions)
<CAPTION>
Three Months Ended
April 1, April 2,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 109 $ 100
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 102 98
Provision for losses on receivables 51 51
Increase in insurance policy liabilities 148 91
Deferred income taxes 11 17
Changes in assets and liabilities excluding those related to the
acquisition of a business:
Increase in commercial and U.S. Government receivables (23) (125)
Increase in inventories (56) (26)
Additions to insurance policy acquisition costs (64) (49)
Increase in other assets (23) (25)
Increase in accounts payable 51 29
Increase (decrease) in accrued liabilities (123) 64
Other - net 13 (19)
Net cash provided by operating activities 196 206
Cash flows from investing activities:
Purchases of investments (346) (471)
Proceeds from disposition of securities:
Sales of:
Securities available for sale 75 144
Securities held to maturity - 10
Maturities and calls 45 213
Finance receivables:
Originated or purchased (1,486) (1,298)
Repaid or sold 1,255 1,165
Cash used in acquisition of a business (40) -
Capital expenditures (61) (60)
Other investing activities - net (5) 13
Net cash used by investing activities (563) (284)
Cash flows from financing activities:
Decrease in short-term debt (91) (123)
Proceeds from issuance of long-term debt 1,018 638
Principal payments on long-term debt (536) (419)
Interest-sensitive insurance products:
Receipts 88 49
Return of account balances (45) (31)
Proceeds from exercise of stock options 7 6
Purchases of Textron common stock (37) -
Dividends paid (33) (31)
Net cash provided by financing activities 371 89
Effect of foreign exchange rate changes on cash (1) (11)
Net increase in cash 3 -
Cash at beginning of period 49 26
Cash at end of period $ 52 $ 26
See notes to consolidated financial statements.
</TABLE>
TEXTRON INC.
Notes to Consolidated Financial Statements (unaudited)
Note 1: Summary of significant accounting policies
The financial statements should be read in conjunction with the
financial statements included in Textron's Form 10-K for the year
ended December 31, 1994. The financial statements reflect all
adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation
of Textron's consolidated financial position at April 1, 1995 and
December 31, 1994, and its consolidated results of operations and cash
flows for each of the respective three month periods ended April 1,
1995 and April 2, 1994. The results of operations for the three
months ended April 1, 1995 are not necessarily indicative of results
for the full year.
Note 2: Acquisitions
In January 1995, AFS purchased the stock of HFC of Australia Ltd. and
its Australian subsidiaries (HFCA), subsidiaries of Household
International, Inc. AFS paid $40 million in cash and assumed
liabilities of approximately $435 million. This acquisition added
approximately $436 million to AFS' finance receivable portfolio.
Note 3: Investments
<TABLE>
<CAPTION>
April 1, December 31,
1995 1994
(In millions)
<S> <C> <C>
Debt and marketable equity securities
available for sale at estimated fair value
(amortized cost: $2,514 and $2,610) $ 2,775 $ 2,511
Debt securities to be held to maturity, at amortized
cost (estimated fair value: $2,468 and $2,294) 2,545 2,470
Other 300 313
$ 5,620 $ 5,294
</TABLE>
In the first quarter of 1994, an investment in the held to maturity
category with an amortized cost of $10 million was sold due to
significant deterioration in the issuer's creditworthiness.
Note 4: Finance receivables - net
<TABLE>
<CAPTION>
April 1, December 31,
1995 1994
(In millions)
<S> <C> <C>
Finance receivables $ 9,715 $ 9,084
Less allowance for credit losses 265 250
Less finance-related insurance reserves and
claims 251 251
$ 9,199 $ 8,583
</TABLE>
Note 5: Inventories
<TABLE>
<CAPTION>
April 1, December 31,
1995 1994
(In millions)
<S> <C> <C>
Finished goods $ 338 $ 288
Work in process 1,038 948
Raw materials 154 212
1,530 1,448
Less progress and advance payments 263 237
$ 1,267 $ 1,211
</TABLE>
Note 6: Insurance reserves and claims
<TABLE>
<CAPTION>
April 1, December 31,
1995 1994
(In millions)
<S> <C> <C>
Paul Revere:
Future policy benefits $ 1,224 $ 1,193
Unpaid claims and claim expenses 1,651 1,576
Other policyholder funds 1,781 1,714
Other 207 202
$ 4,863 $ 4,685
</TABLE>
Note 7: Contingencies
There are pending or threatened against Textron and its subsidiaries
lawsuits and other proceedings, some of which allege violations of
federal government procurement regulations, involve environmental
matters, or are or purport to be class actions. Among these suits and
proceedings are some which seek compensatory, treble or punitive
damages in substantial amounts; fines, penalties or restitution; the
cleanup of allegedly hazardous wastes; or, under federal government
procurement regulations, could result in suspension or debarment of
Textron or its subsidiaries from U.S. Government contracting for a
period of time. These suits and proceedings are being defended or
contested on behalf of Textron and its subsidiaries. On the basis of
information presently available, Textron believes that any such
liability or the impact of the application of relevant government
regulations would not have a material effect on Textron's net income
or financial condition.
Note 8: Financial information by borrowing group
Textron consists of two borrowing groups - the Textron Parent Company
Borrowing Group and its finance and insurance subsidiaries.
The Textron Parent Company Borrowing Group is comprised of all
entities of Textron other than its finance and insurance subsidiaries.
The financial statements of this group as set forth below reflect
Textron's investments in its finance and insurance subsidiaries on the
equity basis. Its sources of cash flow include dividends paid by the
finance and insurance subsidiaries, as well as cash generated by other
operating units.
The finance and insurance subsidiaries finance their respective
operations by borrowing from their own group of external creditors.
Item 1 FINANCIAL STATEMENTS (Continued)
Note 8: Financial information by borrowing group (continued)
TEXTRON PARENT COMPANY BORROWING GROUP
(unaudited) (In millions)
<TABLE>
<CAPTION>
Three Months Ended
April 1, April 2,
Statement of Income 1995 1994
<S> <C> <C>
Revenues $ 1,554 $ 1,688
Costs and expenses
Cost of sales 1,273 1,426
Selling and administrative 162 160
Interest 50 53
Total costs and expenses 1,485 1,639
69 49
Pretax income of finance and insurance subsidiaries 116 120
Income before income taxes 185 169
Income taxes (73) (65)
Elimination of minority interest in net income of Paul Revere (3) (4)
Net income $ 109 $ 100
</TABLE>
<TABLE>
<CAPTION>
April 1, December 31,
Balance Sheet 1995 1994
<S> <C> <C>
Assets
Cash $ 32 $ 20
Receivables - net 722 702
Inventories 1,267 1,211
Investments in finance and insurance subsidiaries 2,329 2,246
Property, plant and equipment - net 1,158 1,146
Goodwill, less accumulated amortization of $203 and $194 1,222 1,231
Other assets (including net prepaid income taxes) 1,244 1,262
Total assets $ 7,974 $ 7,818
Liabilities and shareholders' equity
Accounts payable and accrued liabilities (including income taxes) $ 3,274 $ 3,354
Debt 1,720 1,582
Shareholders' equity 2,980 2,882
Total liabilities and shareholders' equity $ 7,974 $ 7,818
</TABLE>
Item 1. FINANCIAL STATEMENTS (Continued)
Note 8: Financial information by borrowing group (continued)
TEXTRON PARENT COMPANY BORROWING GROUP (continued)
(unaudited) (In millions)
<TABLE>
<CAPTION>
Three Months Ended
April 1, April 2,
Statement of Cash Flows 1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 109 $ 100
Adjustments to reconcile net income to net cash provided by
operating
activities:
Undistributed earnings of finance and insurance subsidiaries (36) (44)
Depreciation and amortization 54 59
Interest accretion 12 10
Changes in assets and liabilities:
Increase in receivables (23) (135)
Increase in inventories (56) (26)
Decrease (increase) in other assets 19 (46)
Increase (decrease) in accounts payable and accrued (61) 119
liabilities
Other - net 13 (3)
Net cash provided by operating activities 31 34
Cash flows from investing activities:
Capital expenditures (57) (54)
Other investing activities - net (36) 6
Net cash used by investing activities (93) (48)
Cash flows from financing activities:
Increase (decrease) in short-term debt 16 (15)
Proceeds from issuance of long-term debt 279 307
Principal payments on long-term debt (158) (255)
Proceeds from exercise of stock options 7 6
Purchases of Textron common stock (37) -
Dividends paid (33) (31)
Net cash provided by financing activities 74 12
Net increase (decrease) in cash 12 (2)
Cash at beginning of period 20 12
Cash at end of period $ 32 $ 10
</TABLE>
Item 1 FINANCIAL STATEMENTS (Continued)
Note 8: Financial information by borrowing group (continued)
FINANCE AND INSURANCE SUBSIDIARIES
(unaudited) (In millions)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
Statement of Income 1995 1994
<S> <C> <C>
Revenues
Interest, discount and service charges $ 379 $ 324
Credit life, credit disability and casualty insurance premiums 81 63
Non-cancellable disability income, life and group insurance
premiums 254 227
Investment income (including net realized investment gains) 119 106
Total revenues 833 720
Costs and expenses
Selling and administrative 216 201
Interest 152 105
Provision for losses on collection of finance receivables, less
recoveries 39 43
Credit life, credit disability and casualty insurance losses and
adjustment expenses, less recoveries 33 31
Death and other insurance benefits 119 107
Increase in insurance policy liabilities 124 87
Amortization of insurance policy acquisition costs 34 26
Total costs and expenses 717 600
Income before income taxes 116 120
Income taxes (46) (46)
Net income 70 74
Minority interest in net income (3) (4)
Textron's equity in net income $ 67 $ 70
</TABLE>
Item 1. FINANCIAL STATEMENTS (Continued)
Note 8: Financial information by borrowing group (continued)
FINANCE AND INSURANCE SUBSIDIARIES
(unaudited) (In millions)
<TABLE>
<CAPTION>
March 31, December 31,
Balance Sheet 1995 1994
<S> <C> <C>
Assets
Cash $ 20 $ 29
Investments 5,585 5,265
Finance receivables - net 9,239 8,622
Property, plant and equipment - net 110 107
Insurance policy acquisition costs 936 911
Goodwill, less accumulated amortization of $192 and $187 283 281
Other assets 631 633
Total assets $ 16,804 $ 15,848
Liabilities and equity
Accounts payable and accrued liabilities (including income
taxes) $ 962 $ 953
Insurance reserves and claims 4,863 4,685
Debt 8,457 7,782
Equity:
Textron 2,329 2,246
Minority interest 193 182
Total liabilities and equity $ 16,804 $ 15,848
</TABLE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
<TABLE>
TEXTRON INC.
Revenues and Income by Business Segment
(In millions)
<CAPTION>
Three Months Ended
April 1, April 2,
1995 1994
<S> <C> <C>
REVENUES
MANUFACTURING:
Aircraft $ 542 $ 508
Automotive 424 401
Industrial 349 334
Systems and Components 239 445
1,554 1,688
FINANCIAL SERVICES:
Finance 475 400
Paul Revere 358 320
833 720
Total revenues $ 2,387 $ 2,408
INCOME
MANUFACTURING:
Aircraft $ 41 $ 36
Automotive 37 36
Industrial 43 35
Systems and Components 19 12
140 119
FINANCIAL SERVICES:
Finance 88 78
Paul Revere 28 42
116 120
Segment operating income 256 239
Corporate expenses and other - net (21) (17)
Interest expense - net (50) (53)
Income before income taxes $ 185 $ 169
</TABLE>
Financial Condition
Textron Parent Company Borrowing Group: During the three months ended April 1,
1995, the Textron Parent Company Borrowing Group's operating activities provided
cash of $31 million versus $34 million during the corresponding period of 1994.
Such cash flows approximated last year's level as increased income was offset by
increased tax payments in 1995. The Group's debt increased by $138 million
principally as a result of cash used for capital expenditures, payments of
dividends and purchases of Textron common stock in excess of cash provided by
operations. Its ratio of debt to total capital was 37% at April 1, 1995, up
from 35% at December 31, 1994.
During the three months ended April 2, 1994, the Group's operating activities
provided cash of $34 million versus $37 million during the corresponding period
of 1993. Such cash flows approximated the prior year's level as increased
income and customer deposits for 1994 were offset by higher receivables, due
primarily to strong first quarter 1994 sales. Its ratio of debt to total
capital was 42%, unchanged from year end 1993.
The Textron Parent Company Borrowing Group's credit facilities not used or
reserved as support for outstanding commercial paper or bank borrowings at
April 1, 1995 were $917 million. Textron had $236 million available at April 1,
1995 for unsecured debt securities under its shelf registration statement filed
with the Securities and Exchange Commission.
In 1994, Textron reactivated its program to purchase up to five million shares
of its common stock from time to time in the open market as conditions warrant.
As of April 29, 1995, 4.1 million shares had been purchased at an aggregate cost
of $204 million.
In February 1995, Textron announced that it may purchase up to an additional
five million of its common shares under the program.
Management believes that the Textron Parent Company Borrowing Group will
continue to have adequate access to credit markets and that its credit
facilities and cash flows from operations --including dividends received from
Textron's finance and insurance operations-- will continue to be more than
sufficient to meet its operating needs and to finance growth.
Finance and insurance subsidiaries: The finance and insurance subsidiaries paid
dividends of $31 million and $26 million to the Textron Parent Company Borrowing
Group during the three month periods ended April 1, 1995 and April 2, 1994,
respectively.
During the three months ended March 31, 1995, Avco Financial Services (AFS)
issued $607 million of unsecured debt securities, including $539 million under
its shelf registration statements. AFS had $347 million and $457 million
available at March 31, 1995 for unsecured debt securities under its shelf
registration statements with the Securities and Exchange Commission and Canadian
provincial security exchanges, respectively.
During the three months ended March 31, 1995, Textron Financial Corporation
(TFC) issued $133 million of medium-term notes under a $500 medium-term note
facility under Rule 144A of the Securities Act of 1933, as amended. TFC had
$367 million available under this facility at March 31, 1995.
During the first quarter of 1995, the finance subsidiaries had $318 million of
interest rate exchange agreements go into effect. Of these, $150 million expire
in 1996 and had the effect of exchanging the indices used to determine interest
expense under certain variable rate borrowings at March 31, 1995 for the purpose
of better matching the rate of interest incurred on the finance subsidiaries'
financing with the rate of interest earned on certain of the finance
subsidiaries' variable rate finance receivables. The balance of the agreements,
which have a weighted average original term of 2.0 years and expire through
1999, had the effect of fixing the rate of interest at approximately 9.5% on
$168 million of variable rate borrowings at March 31, 1995.
Results of Operations - Three months ended April 1, 1995 vs. Three months ended
April 2, 1994
Textron reported first quarter 1995 earnings per share of $1.25 per share, up
14% from 1994 earnings per share of $1.10, reflecting higher net income and a
decreased number of average shares outstanding. Net income in 1995 of $109
million was up from 1994 net income of $100 million. Revenues were unchanged at
$2.4 billion, reflecting the impact of divestitures in 1994. Excluding the
revenues of these divested businesses, revenues in the first quarter increased
9% over 1994.
The Aircraft segment's revenues and income increased $34 million (7%) and $5
million (14%), respectively, related principally to Bell Helicopter. Bell
Helicopter's revenues increased primarily as a result of higher sales under the
V-22 engineering and manufacturing development contract and higher international
aircraft and commercial spare parts sales, partially offset by lower foreign
military aircraft sales. Bell's income increased as a result of the higher
revenues, partially offset by increased product development expenses related to
new helicopter models. Cessna's income increased slightly despite lower sales.
Increased product development costs, principally related to two new Citation
aircraft models, were offset by lower bid and proposal expenses for the JPATS
competition for a new U.S. military trainer.
The Automotive segment's revenues and income increased $23 million (6%) and $1
million (3%), respectively. Margin was affected by higher start-up costs
related to the launch of new products and facilities.
The Industrial segment's revenues and income increased $15 million (4%) and $8
million (23%), respectively, due principally to higher fasteners sales
(including the sales of Avdel, the results of which have been included in
Textron's consolidated results since the second quarter of 1994), partially
offset by the impact of the divestiture of the Homelite division in 1994.
The Systems and Components segment's revenues decreased $206 million (46%),
while income increased $7 million (58%). The decrease in revenues was due to
the 1994 divestiture of the Textron Lycoming Turbine Engine division and to
reduced shipments on certain U.S. Government and commercial aerospace contracts
at other divisions. In addition, 1994 income included provisions aggregating
$15 million for the consolidation of certain manufacturing operations and legal
matters.
The Finance segment's revenues increased $75 million (19%), while income
increased $10 million (13%). AFS' revenues increased, due primarily to (a) a
higher level of finance receivables outstanding, (b) an increase in earned
premiums and (c) an increase in investment income, due to improving yields and a
higher level of invested assets, partially offset by (d) a decline in yields on
finance receivables, reflecting an increased percentage of lower yielding retail
installment contracts. Its income increased, due to (a) those factors and (b) a
decrease in insurance losses in both finance-related and nonfinance-related
insurance operations, partially offset by (c) an increase in the blended cost of
borrowed funds and (d) an increase in loan loss provisions due to growth in
finance receivables outstanding. Revenues at TFC increased slightly, due to a
higher level of finance receivables outstanding, higher yields on finance
receivables, reflecting the higher interest rate environment, partially offset
by higher leveraged lease income in 1994. Its income increased due to (a) those
factors and (b) a decrease in loan loss provisions, reflecting an improvement in
equipment portfolios and a stabilization of nonperforming real estate loans,
partially offset by (c) an increase in the blended cost of borrowed funds.
Paul Revere's revenues increased $38 million (12%), due to continued premium
growth in its individual disability insurance and group insurance lines of
business and higher net investment income. Its income decreased $14 million
(33%), primarily as a result of a higher individual disability insurance benefit
ratio, partially offset by lower benefit ratios in the group insurance line of
business, increased premium volume and improved expense ratios across all lines
of business. The higher benefit ratio in the individual disability insurance
business was the result of adverse claims experience from the block of policies
issued between 1985 and 1989, especially in Florida and California. In
addition, business issued to physicians has performed below expectations. The
ratio was 89.4%, up from 75.6% in the first quarter of 1994 and down from 92.3%
in the fourth quarter of 1994. Paul Revere continued its program to improve
operating results through new products, pricing and underwriting adjustments, as
well as a continued emphasis on claims management. Paul Revere continues to
expect a gradual improvement in the individual disability insurance benefit
ratio throughout 1995.
Corporate expenses and other - net for the three months ended April 1, 1995 were
higher than the corresponding level in 1994 as a result of (a) increased
compensation expense resulting from appreciation in the market value of
Textron's common stock and (b) foreign exchange losses in 1995 compared to
foreign exchange gains in 1994. Lower interest expense of the Textron Parent
Company Borrowing Group reflected a lower level of average borrowing, partially
offset by an increased average cost of borrowing. The quarter's results
reflected a slightly higher effective income tax rate than the corresponding
prior year rate.
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
12.1 Computation of ratio of income to fixed charges of the Textron
Parent Company Borrowing Group.
12.2 Computation of ratio of income to fixed charges of Textron
Inc.including all majority-owned subsidiaries.
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the first quarter
ended April 1, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TEXTRON INC.
Date: May 12, 1995 s/W. P. Janovitz
W. P. Janovitz
Vice President and
Controller
(principal accounting
officer)
LIST OF EXHIBITS
The following exhibits are filed as part of this report on Form 10-Q:
Name of Exhibit
12.1 Computation of ratio of income to fixed charges of the Textron Parent
Company Borrowing Group
12.2 Computation of ratio of income to fixed charges of Textron Inc.
including all majority-owned subsidiaries
27 Financial Data Schedule
EXHIBIT 12.1
<TABLE>
TEXTRON PARENT COMPANY BORROWING GROUP
COMPUTATION OF RATIO OF INCOME TO FIXED CHARGES
(unaudited)
(In millions except ratio)
<CAPTION>
Three Months
Ended
April 1, 1995
<S> <C>
Fixed charges:
Interest expense (1) $ 50
Estimated interest portion of rents 5
Total fixed charges $ 55
Income:
Income before income taxes $ 185
Fixed charges 55
Eliminate equity in undistributed pretax income of finance and insurance
subsidiaries (85)
Adjusted income $ 155
Ratio of income to fixed charges 2.82
(1) Includes interest unrelated to borrowings of $12 million (primarily
interest accretion).
</TABLE>
EXHIBIT 12.2
<TABLE>
TEXTRON INC. INCLUDING ALL MAJORITY-OWNED SUBSIDIARIES
COMPUTATION OF RATIO OF INCOME TO FIXED CHARGES
(unaudited)
(In millions except ratio)
<CAPTION>
Three Months
Ended
April 1, 1995
<S> <C>
Fixed charges:
Interest expense (1) $ 202
Estimated interest portion of rents 10
Total fixed charges $ 212
Income:
Income before income taxes $ 185
Elimination of minority interest in pretax income of Paul Revere (5)
Fixed charges 212
Adjusted income $ 392
Ratio of income to fixed charges 1.85
(1) Includes interest unrelated to borrowings of $12 million (primarily
interest accretion).
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Textron
Inc.'s Consolidated Balance Sheet as of April 1, 1995 and Consolidated Statement
of Income for the three months ended April 1, 1995 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> APR-01-1995
<CASH> 52
<SECURITIES> 0
<RECEIVABLES> 10437
<ALLOWANCES> 265
<INVENTORY> 1267
<CURRENT-ASSETS> 0
<PP&E> 2822
<DEPRECIATION> 1554
<TOTAL-ASSETS> 21967
<CURRENT-LIABILITIES> 0
<BONDS> 10177
<COMMON> 12
0
16
<OTHER-SE> 2952
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<SALES> 1554
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<OTHER-EXPENSES> 0
<LOSS-PROVISION> 39
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<INCOME-PRETAX> 185
<INCOME-TAX> 73
<INCOME-CONTINUING> 109
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 109
<EPS-PRIMARY> 1.25
<EPS-DILUTED> 1.25
</TABLE>
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