Textron Inc. Annual Report • 2013 32
Cash flows from operating activities decreased $122 million during 2013 as compared with 2012, largely due to a $133 million
impact related toworking capital requirements and lower earnings, whichwere partially offset by a $206million impact of lower
contributions to our pension plans in 2013. Significant changes within working capital included a $138 million unfavorable
impact resulting fromnet taxes paid between the periods as net tax paymentswere $174million and $36million in 2013 and 2012,
respectively, and $264 million of cash outflows related to changes in accounts receivable and accounts payable. These cash
outflowswere partially offset by $198million of cash inflows related to changes in inventory levels, largely at Cessna, and a $141
million impact from lower captive finance receivables.
Cash flows from operating activities decreased during 2012 as comparedwith 2011, as higher earnings were offset by changes in
working capital, which included lower net cash receipts from our captive financing activities of $140 million and an increase in
pre-owned inventory in the Cessna segment largely due to higher trade-in activities, resulting in a cash reduction of $117million.
Our use of cash forworking capital requirementswas partially offset by $237million in lower cash pension contributionsmade in
2012.
Cash flows from investing activities included capital expenditures of $444million, $480million, and $423million in 2013, 2012
and 2011, respectively. Collections on finance receivables and proceeds from sales of finance receivables and other finance assets
totaled $368 million in 2013, $848 million in 2012 and $1.4 billion in 2011. Cash flows from investing activities also included
$196million of cash used in 2013 for acquisitions of four businesseswithin our Textron Systems and Industrial segments and two
service centers inour Cessna segment.
Financing activities primarily consisted of the repayment of outstanding long-term debt of $1.3 billion, $0.6 billion and $1.4
billion in 2013, 2012 and 2011, respectively, partially offset by proceeds from the issuance of long-term debt of $448 million,
$106million and $926million, in 2013, 2012 and 2011, respectively. Cash used in financing activities also included $272million
of share repurchases in2012 and repayments of $1.4billion against the outstanding balance onour bank credit lines in2011.
CaptiveFinancingandOther IntercompanyTransactions
The Finance group finances retail purchases and leases for new and used aircraft and equipment manufactured by our
Manufacturing group, otherwise known as captive financing. In the Consolidated Statements of Cash Flows, cash received from
customers or from the sale of receivables is reflected as operating activities when received from third parties. However, in the
cash flow information provided for the separate borrowing groups, cash flows related to captive financing activities are reflected
based on the operations of each group. For example, when product is sold by our Manufacturing group to a customer and is
financed by the Finance group, the origination of the finance receivable is recordedwithin investing activities as a cash outflow in
the Finance group’s statement of cash flows. Meanwhile, in theManufacturing group’s statement of cash flows, the cash received
from the Finance group on the customer’s behalf is recorded within operating cash flows as a cash inflow. Although cash is
transferred between the two borrowing groups, there is no cash transaction reported in the consolidated cash flows at the time of
the original financing. These captive financing activities, alongwith all significant intercompany transactions, are reclassified or
eliminated from theConsolidatedStatements of CashFlows.
Reclassification and elimination adjustments included in theConsolidatedStatement ofCashFlows are summarized below:
(Inmillions)
2013
2012
2011
Reclassifications from investing activities:
Finance receivable originations forManufacturinggroup inventory sales
$
(248) $
(309) $
(284)
Cash received from customers and the sale of receivables
485
405
520
Other capital contributionsmade toFinance group
—
—
(60)
Other
27
(16)
11
Total reclassifications from investing activities
264
80
187
Reclassifications from financing activities:
Capital contribution paidbyManufacturing group toFinance group
1
240
182
Dividends receivedbyManufacturinggroup fromFinance group
(175)
(345)
(179)
Other capital contributionsmade toFinance group
—
—
60
Other
(1)
(3)
(8)
Total reclassifications from financing activities
(175)
(108)
55
Total reclassifications and adjustments to cash flow fromoperating activities
$
89 $
(28) $
242
