Ladies and gentlemen, thank you for standing by. Welcome to the Textron second quarter earnings conference call. At this time all participants are in a listen-only mode. Later we’ll conduct a question-and-answer session. (Operator Instructions) As a reminder this conference is being recorded. I would now like to turn the conference over to our host, Doug Wilburne, Vice President of Investor Relations, please go ahead.

Thanks Teddy and good morning everyone. Before we begin I’d like to mention our discussion today will include remarks about future estimates and expectations. These forward-looking statements are subject to various risk factors, which are detailed in our filings and also into today’s press release. You can also find an earnings call presentation slide deck containing key data items from today’s call in the Investor Relations section of our website. We will be referring to those slides during the process of the call so be sure to pull those down. On the call today we have Lewis Campbell, Textron’s Chairman and CEO and Scott Donnelly, Textron’s, President and Chief Operating Officer. Moving now to second quarter results, revenues in the quarter were $2.6 billion, down 29% from a year ago, which yield-to-date GAAP loss of $0.22 per share. Adjusted earnings from continuing operations excluding restructuring charges were $0.08 per share, down $0.90 from a year ago. Textron recorded second quarter pre-tax special charges of $129 million associated with the company’s restructuring program. This included $43 million in non-cash impairment related to the cancellation of the Citation Columbus development program, and $25 million of non-cash charges associated with recognition of pension related prior service cost triggered by headcount reduction. Manufacturing operations provided $27 million of positive cash flow during the second quarter. This positive cash flow was achieved despite incurring cash payments of $77 million in return customer deposit at Cessna and $39 million for enterprise restructuring. Now let’s examine the major drivers that drove over the $0.90 year-over-year reduction in adjust EPS, which are outlined on slide four of the earnings call presentation. As you would expect, the largest driver was lower manufacturing volume which drove $0.86 of the reduction. TFCs lower earnings contributed $0.29 to the decline in EPS and used aircraft valuation adjustments at Cessna cost $0.10. We achieved positive pricing of 1.4%, which added $0.09 per share. This is partially offset by $0.06 of inflation, reflecting an inflation rate of .8%. Overall cost performance including selling, general and administrative benefited the quarter by $0.29. Tax rate changes contributed $0.02 and miscellaneous items provided a penny. With that I’ll turn the call over to Lewis.

Looking on the positive side though we generate manufacturing cash flow, that was positive this quarter which reflected our efforts to improve working capital productivity and lower cost. This is a specially noteworthy considering the significant volume decline experienced at Cessna and industrial. So, I think it’s a job well done on the second quarter on cash. Finally, we made a significant progress liquidating non-GAAP refinance receivables at TFC once again. We had a gross reduction of about $1.3 billion during the second quarter and cash conversion even better than what we expected. So, this brings us to a year-to-date reduction of $2.2 billion, which is nearly half of our original two year target of $4.5 billion. So, as you might expect with that success that we just demonstrated in Q2 we now increased our two year reduction target from $4.5 billion all the way up to $5.2 billion. With this in mind, let’s take a look at our updated 2010 liquidity plan. I’ll take a minute here to gets you turning over to slide five and that’s our cash summary slide. If you then start on the second line labeled TFC receivable liquidation, there you see that we’ve recorded the actual second quarter amount of $1.28 billion and reflected our higher two year goal in the full year 2009 and 2010 calls. On the next line, we’ve reduced the ‘09 manufacturing cash flow projection by $50 million to $350 million reflecting lower expected jet deliveries, which we’ll discuss later. We’ve added the $775 million in proceeds from the equity and convert offerings we completed in May and moving down to the term debt payments line, the annual amounts are higher than in previous version as we’ve been opportunistically retiring debt that is coming due in the next three years…

Thanks, Lewis. Good morning, I’d like to start talking about our manufacturing businesses as Lewis referenced, we did generate $27 million in free cash flow in the quarter, again ahead of our plan. I think this reflects the improvements we continue to make in working capital and overall operational efficiencies. In fact our inventory programs in particular are getting traction as we’ve reduced inventory in the quarter by about $300 million. If you look at Cessna; Cessna revenue was down 42% driven by lower volumes. Profits down also, again primarily driven by lower volume, but also we incurred $38 million charge for lower our used aircraft values. These were partially offset by $38 million benefit from forfeited customer deposits. I believe that used valuations appear to be stabilizing in June, so we would expect that number in terms of lost to moderate through the balance of the year. Similarly, we would expect a fewer benefits forfeited customer deposits again through the balance of this year. As we discussed in the first quarter call, Cessna consumed a considerable amount of cash in both the first and second quarter, as we continued at an accelerated production rate. We now expect Cessna will generate a significant amount of cash in the third and fourth quarter as we burn off that inventory particularly through finished goods. Later cash flow obviously will depend on the actual number of new and used aircrafts that are delivered. Again we expect a significant improvement over the first couple of quarters. We did take two major actions in the quarter at Cessna. As previously announced, we have elected to cancel the Columbus program. This is very unfortunate, but the realities of the marketplace create an uncertainty around that aircraft, we felt it this time in this market. We were…

Thanks Scott. We’ll wrap up today. I just want to point out that everybody that we have three additional slides. Slide number nine is the chart that lays out segment revenue and profitability forecast associated with our EPS guidance. Slide 10 contains our forecast for corporate items and then finally on slide 11 we have our quarter organic sales growth breakdown. So, Teddy with that, we’re pleased to take calls at this time.

Your first question comes from Steve Tusa - JP Morgan.

Just a quick question; on the longer term Cessna outlook, what would you expect under the assumption of a very muted recovery. I guess I’m wonder what your longer term margin target would be for Cessna. Where would you be under a reasonable volume scenario? Where would you be kind of happy with the normalized type of margin number at Cessna?

Steve, I think the recovery question is a tough one. We’re still predicting that we’ll have lover deliveries next year than we had this year, and that would be the bottom of the cycle and then you will start to see a recovery which obviously is going to be very hardly dependent on what the economy recovery look like. We think the margin rate for the total of this year is going to be somewhere in that 5% kind of range. Obviously our expectations are to try to sustain that or even grow that as we go into 2010 given somewhat lower volumes and then continue to see that growth and we get better leverage as volumes return to business going forward. Steve Tusa - JP Morgan : I guess my question, you’re making these cost reductions, you must have some sort of view on even at lower volume levels what you want to do. I’m trying to get a sense. Is it modestly above where it is today, is it double-digit. How should we think about a longer term? You guys must have that at the top of your mind, as you are making all theses moves on the cost side.

Longer term, obviously we would expect this business to get back up into the mid teens where we’ve seen it before where we had higher volumes. I think our expectations here in the next couple of years, again obviously this is highly volume dependent as things start to turn, but I have to say that we want to achieve better margins, but we are making substantial investment in the R&D of this business over the next couple of years. So, we have a lot of work yet to do frankly in terms of how we make sure that leveraging the base cost, the fix cost that we have in this business in terms of our manufacturing footprint and we’ll need to continue to take more action there I believe, but we’ll also have to be sensitive to the fact that we are at a unusually low volumes. We can’t let that influence our R&D investment or we won’t have the right products in the right places when the thing covers. So I would expect Steve, you’d see this thing come from the 5% and slowly grow back up towards those mid teens are we’ve been in the past. Steve Tusa - JP Morgan : How many jets in the backlog now and what is the pricing like in that backlog? Is there any movement on the price of those jets?

We haven’t moved anything on the pricing, obviously as customers have come up with their deliveries. There’s been discussion and we’ve been trying to help some folks in terms of service something like that. We are trying to stay away from, much in the way of pricing. Obviously the Aircraft in the backlog were priced at the time the deals were done. So, we have contracts for that. Pricing is still up somewhat this year and we are going to try to hold that. I don’t think this is a market where this is all about pricing. This is really more about, where is the demand in the economic recovery and I think as we look at June, we actually saw some customers come in at reasonable price points even for 2009 deliveries for guys that went even in the backlog.

Hi Steve its Lewis. Let me add just one more point to Scott’s points. Out strategy at Cessna is rock solid and I think its very sound. Remember it’s under core or underpinning in two areas. One, to keep the Mustang selling at above 100 if you can, because what that does, is brings people into the fleet and our customer’s fab numbers have never been better. So we know that once we get someone into Cessna, they’re probably going to buy another one. Remember, our numbers used to be seven out of ten or repeat customers. So we’ve got a flock of people now getting into the Cessna family, that’s number one. As Scott said, we’re continuing to invest in new products and improved products so when this market comes back, I think we’re going to be particularly well positioned to ride it up at a pretty good rate. So, I’m not happy with the volume and where it is, but it is where it is and we just have to manage it carefully till the starts come back.

Your next question comes from David Strauss - UBS.

Based on your manufacturing free cash flow forecast, it looks like you’re expecting the second half to generate about $600 million. How does that break out between Q3 and Q4?

Yes, it’s always a little bit back-end loaded, but you’re probably somewhere in the one-third, two-thirds or 40/60 kind of range, David.

Could you give us an update of exactly what you’re expecting in terms of debt pay down and the securitization in Q3 and Q4?

David, I’ll follow-up with you if you want to breakdown on the quarterly. I mean, we’ll give you what’s coming due contractually, but in terms of what we might do opportunistically, of course we’re not going to discuss that publicly.

Then any additional color as far as you said the production rate, you’re looking at lower deliveries in 2010, any additional color. It looks like on the ex Mustang, you’re going to be down like the 150 range for 2009; is that going much lower in 2010 or just a little lower? Could you just help a little bit there?

No Dave, I think it’s probably too early to start calling the numbers on 2010. We’ll know an awful lot more here in the next four, five months as this goes through what appears to be at least here in June and continues in July. Sort of stabilizing and seeing some customers coming back into the market, more customers taking delivery of their aircrafts. So I think we’re seeing some positive trends, but I think we can be a lot more accurate in terms of our views of what’s going in the market here in the coming few months.

Last one, on the used aircraft side, could you just tell us what you’re holding in terms of inventory on the used aircraft side?

In terms of numbers?

Yes, numbers and value or whatever detail you can give us?

Right now we’ve got about 48 aircrafts. We have about 38 that are Cessna inventory and about 10 that are citation share used aircraft inventory and that actually in terms of units went down a few in the second quarter as we were able to sell more used aircraft than we took in trade and so again, hopefully that’s a trend that we’ll see continue through the balance of the year.

Dave, we’re carrying them at just a little over $200 million, which represents a net of about $100 million in write-offs that we’ve taken so far this cycle, so that’s one of the reasons that we’re expecting less of an impact from used in the second half of the year.

Your next question comes from Jeff Sprague - Citigroup.

Scott, understanding that the non-accruals don’t necessarily come through the charge-offs, would you expect charge-offs to be moving up in the back half of the year regardless and into next year?

Yes, I think there’s going to be a general trend Jeff, as we work our way through this, that we’ll see increased charge-offs and I think what we’re doing right now is appropriate. We take the loss provisions and reserve is up consistent with our expectation, we still will start to see higher charge-offs somewhere in the third and fourth quarter and frankly going forward.

You’d also had indicated on the run-off you’re actually trying to focus on some of the tougher stuff first, but the cash conversion actually looks pretty decent. What is it about what you see in the pipeline that might make you a little more cautious on the cash conversion looking out say six or 12 months?

Well, I think we get into some of the asset classes, which when you look at resort, when you look at golf, again, I think not so much in the next quarter or two, but as you get further out, these are some of the larger accounts. There’s not as much liquidity, let’s say in some of those industries. So, I think a lot what we’ll do in distribution finance and ABL as capital is returning to the market. We see other financial institutions that are willing to take some of those accounts and we saw that for instance in a couple of those private brand accounts. So this is generally relatively good business and so I just think it’s the first place that capital is returning. Now, we don’t know yet exactly what’s going to happen with some of these longer tail resorts. Obviously, the economy continues to strengthen, money keeps coming back into the market. We are hopeful that more capital will returns into some of those markets. If they do, then obviously we’ll incur lower losses. As we go through this and have to release some of those assets, if we don’t have as much liquidity for instance, securitization and the timeshare resort kind of businesses, then we’ll expect to see higher losses and therefore lower cash conversion rates than we’ve seen on the shorter cycle, shorter tail receivables that we’ve been running off so far.

Understanding you don’t want to go out on a lim on 2010 yet, I just wonder what the complexion of the conversations are maybe as you reach out to customers and it’s time to start paying progress payment on 2010 perhaps. Are you seeing some slippage out there as people reconsider?

The trend has been positive. Again, I try to couch this in saying this is a sort of a June and now into July phenomena that we are seeing more customers that are making their payment, that are taking their delivery of their aircraft as opposed to canceling it the last minute, but again it’s a full month of June. The trend, it says continuing in July, but I think we still have some time here to play out to see whether truly it has stabilized and we’ll start to see that kind of a trend going forward.

But we are taking orders for delivery in 2010.

Absolutely. The good news of what we’ve seen is sort of interesting Jeff. It’s almost like a spot market has sort of started. Actually, we have customers that were not in the backlog. These are guys that have sort of been on the sidelines that are now looking and saying, “Okay, is this time the time to make the move.”

Your next question comes from Scott Kincaid - Davidson Kempner.

Hi, it’s actually [Scott Brugle]. Can you guys just help me reconcile slide number five, the $1.282 billion of receivable liquidations? With the cash flow statement in the 8-K that was filed, it looks like you generated about $500 million in cash.

Can you do that one again, Scott?

Sure, the $1.3 billion of managed receivables decreasing with the cash flow statement for the second quarter that was filed in the 8-K, that showed 1.1 of receivables repaid, 745 of receivables originated.

The primary difference is the difference between managed receivables and owned receivables. We present the managed receivables number here because we have to look at this from a total liquidity point of view, whereas the Q presents it on an owned basis. So those numbers will not match, but they do reconcile.

So is the right way to think about that, you had about $700 million or so of receivables that were managed but not owned?

Yes, 648 is the right number. We paid down $648 million of securitization debt in the quarter that came out of that $1.282 billion.

Then my second question is, if you look at the golf balances, it looks like that decreased pretty significantly in the quarter.

Golf, did you say?

Golf, yes.

We did have 12 payoffs and we did sell one, well, it’s in other assets, because it was a known golf course. I’d say we are seeing a fairly positive trend in the golf portfolio and I’d say there’s a number of customers out there. People are interested in picking up golf courses, in the case those that we own and a positive trend I would say in folks that we talked to and said “Look, when you come due or even as a prepayment, we’d like to discount you to redo your mortgage somewhere else” and people are doing it, at reasonable discounts.

Your next question comes from Cai von Rumohr - Cowen & Co. Cai von Rumohr - Cowen & Co.: So the pre-owned losses equaled to the forfeitures in the second quarter, what was that number in the first quarter and can you also comment on the trend in R&D in the second quarter? Where was it relative to the first and where do you expect it to be for the year?

Give us the first question again. Cai von Rumohr - Cowen & Co.: The first question is I guess you indicated that pre-owned losses were $38 million and that was the same as forfeiture gains in the second quarter. Where was the net of those two numbers in the first quarter, that’s the first part of that question?

The pre-owned was about $13 million in the first quarter and the forfeitures I think was around the same number; I’m looking that up. What was your second half of your question as we’re looking at it? Cai von Rumohr - Cowen & Co.: The second half is R&D; where was it in the first and second quarter and where do you expect it to be for the year?

We’d really rather not talk about specific R&D at Cessna that’s competitively sensitive, but that’s through the year.

Let me trace the year out for you Cai. R&D last year was 553; this is total company. Cessna is always as a percentage of sales higher than anybody else, but that’s just another point. In January we thought that number should be a little bit south of 500 and we’ve now firmed up everything, which take a lot of work actually to know where to invest to get the most bang for the buck and so we basically let Cessna kind of free flow back to us on where they thought they ought to invest in order to keep our products, not only new ones coming but also fresh in the fleet. We’ve now settled on total company R&D of 450. So, if you compare about 550 to 450 it’s down about 20% which I think is about right, but keep in mind, don’t under estimate my point, we didn’t say “Okay Cessna, instead of $10 you get $5.” We said “Free flow back to us. What do you need to freshen the fleet to make sure that we’re as competitive as we need to be when the market comes back” and we put that number in. Bell is the same way, Bell has got a good future there too from a competitive standpoint.

You mentioned the other seven orders in June went into the deliveries in 2009. If we get orders in July and August, presumably we will, will they go into 2009 or will they go into 2010?

There’s a mix. So we already have some that we are talking in July that would be 2009 aircraft and we have a number that want to slot 2010 deliveries. So really, the mix here is if you have a customer that really wants to take a 2009 delivery, they are willing to take the aircraft as configured or with minor modifications which is what’s happening, we’ll do that, but there are some customers that want to do a full custom configuration to their exact requirements and specifications and those are largely folks that will take a 2010 delivery.

So if some are going into 2009, should we take the 275 as the number that has upside?

If you want to Cai, that’s up to you. It’s going to go up and down Cai. I mean we really choose our words, I did, choose my words on how to talk about this and I know Scott did too. Look, for the first month in I don’t know how long, nine months or thereabout, we’re seeing a positive sign. They are not flashing green lights, but they are certainly a lot better than they’ve been in months and months and we are basically sold out to deliver a little more than 275. We can get some more cancellations which would take the 275 down, but we could have net plus orders going forward and if we do that we would do more than 275, which we would love to do.

Last one, you hired an investment banker as a CFO as opposed to kind of a financial operating guy. Why did you make that decision?

I’m sitting across the table from a great financial operating guy. That’s I think if you look at what’s going on in the last six or nine months. Dick has done a phenomenal job and always has. He has a control over the company and really running the finance and working the numbers and working with the business CFO on a day-in day-out basis. So I think we have an outstanding talent in the company to run that day-in day-out finance operation. We came across Frank and here’s a guy that’s got a lot of expertise and experience in both capital market kind of work and also in M&A kind of work. So I look at a guy like Frank and say “This is having the complimentary talents of what both already have and a very solid great operating financial arm in being able to bring in a talent,” because obviously we still have work to do going forward in terms of the capital structure of the company. Ultimately, once we get all the stuff behind us and markets kind of get back to normal and the world moves on, having a Chief Financial Officer that’s experienced and a savvy M&A kind of guy I think is the right talent to have in the company. So really that was an opportunity to bring somebody in that had very complimentary skills with the skills we already had in the company.

Your next question comes from Noah Poponak - Goldman Sachs.

Was the cancellation number in the second quarter excluding Columbus, if we add up everything you gave us, was it 169?

We got the exact number, 243 minus 76.

Yes, it’s 243 minus 76 where the number is, that’s what it was.

So I guess I’m kind of struggling; if there was over 150 legacy cancellations in the quarter, I’m kind of struggling with how the ‘09 number is only coming down by 20 aircrafts. If that kind of implies that they’re not coming out of ‘09, you said you had order activity, but it’s pretty modest. So, I know you guys are kind of reluctant to talk about ten, but does that imply that 2010 is at least what a bit worse than you had previously talked about with the down kind of 15%?

No. I don’t think so. I think what you’re getting at is absolutely right. If you look at the cancellations that came out, again forget Columbus, which is obviously out in the 14, 15, 16 kind of timeframe, but the bulk of the other cancellations that we brought out in the quarter was really kind of going through and looking at large fleet/fractional customers. So when you look at the nature of those kinds of orders that we took out in the order book, they do spread out in 10, 11, 12 and beyond. So we had one case with one large fraction guy, which actually normally wouldn’t have been cancellation, but it’s a model aircraft that we’re just not going to be building in that timeframe, so we obviously took those out. Then we had a couple of other fractional customers that we just don’t believe they’re going to be taking aircraft in the near future and we didn’t think it was appropriate to have those orders sitting in the book. When we don’t think there is a probability, we’re going to realize them, so we worked with those customers and took them out of the book.

So, either cancellations coming out of the next three or four years?

Exactly, but there’s a lot that are 11, 12 and beyond.

Noah, if we’re going to plan on getting our margins up, you have to have some kind of stability in predictable orders. So for example, if we’re having a discussion with a large guy, who’s got 24 jets on order, which was the one we did and we basically say “Hey guy, if you’ve got a big doubt right now, we’ll just soon pull you out. So we can plan on making whatever volume of that plane we want to plan on making.” If he wants to comeback in later, great, but we’re trying to get the book as predictable as possible. Whenever the market comes back, the orders will come back and they’ll comeback to us. So, it’s not to our benefit to have a big order number that is not strong. So I think orders are less orders than we had, but I believe they are more certain than they were before so.

How many Mustangs in the 275 number?

125. That spreads over the long period of time.

One more question on systems. The full year guidance implies that the second half growth really takes off, but the margin guidance kind of also implies that the second half margin is a lot weaker than the first half. Can you guys just walk through the puts and takes on that business for the rest of the year?

We had kind of a big first quarter, but the third and the fourth quarters are pretty consistent with the second quarter Noah, nothing remarkable going on there.

I don’t see a lot of movement in terms of the margin ratio in the balance of the year.

They vary between 10 and a little over 12 depending on the quarter, which ebbs and flows depending on what we’re delivering as far as ASVs and what contracts expiring and VACs you book and which ones you don’t. So the margins vary slightly, because of that fact, but I believe you’ll see systems, probably at the end of the year end up in a very good place margin wise. Not quite as strong as last year, but pretty darn good.

Your next question comes from Shannon O’Callaghan - Barclays. Shannon O’Callaghan - Barclays: Can you give us a feel for what do you think has enabled you to really track so far ahead on the liquidation plan and where are people finding alternative financing? Give us a little color on that.

I think that the nature of the assets that we’re talking about, specifically in the distribution finance business; in fact the matter is people are actually buying boats and RVs and stuff like that. So that business is obviously as well collateralized, so we have the collateral of that asset that’s been financed with the deal and dealer who sells it, and we get our money back. We put a lot of feet on the street in terms of people checking accounts and make sure that when an asset is sold, that we do get our money back. Again, I think the fact that other folks have been stepping into that and picking up some of these accounts and financing these dealers, by and large has allowed them to stay whole. Obviously, some dealers have gone bankrupt. When they do that, we’re frequently debt re-possessing those assets, but again, I think we saw that re-possessing kick-in in the first quarter and it continues in the second quarter, but we’ve actually been able to take those assets and mark them, turnaround and sell through alternative distribution channels and actually get them sold off. So we actually saw a net reduction in that class in the quarter. So, I don’t think there’s anything pretty good magic about it. It’s just blocking and tackling and out there letting dealers know that we’re not financing any more and in the case of the private brand’s customers, we’ve been working with those customers to jointly go help find them; someone to take over that relationship and we’ve been successful in a number of cases of doing that. Shannon O’Callaghan - Barclays: Obviously, I don’t think RV sales or boat sales were probably better than your internal plan, so if maybe, were you pleasantly surprised that all by your ability that find other people to lend to these customers?

Not really. I mean actually if you look at classes like boats and RV, it actually has been ahead of our plan. So I mean though the number of turns in these deals of inventories, is lower than it has historically been, but they are still moving assets. Again, in terms of these private brand relationships, these typically are relationships where not only do you have the collateral of the value of the asset, but in many occasions you have manufacturing take-back provisions and these are good manufacturers, they’re creditable companies. So they are historically accounts that do pretty well. So even in distressed time, as people are looking to put capital to work, we see people coming into this space. Shannon O’Callaghan - Barclays: Then on the jumps in the non-accruals, can you flush that out a little bit more about the recovery dynamics and what you’re expecting to happen there?

Well, the class of asset that exists the most and again these judgments in terms of non-accrual, where we have a belief that we may not get our full principal interest back as we look at the resort class, that’s the one that added the most to the non-accrual, because it’s the one that for us is most uncertain in terms of how that industry plays out. Again I would say, that’s reflective of the fact that unlike some of these other assets where we do see our capital coming back into these areas, we remain concern on areas like time shares that have historically been dependent on doing a lot of securitization to finance their operations. Until that securitization market comes back, we’re going to need to hold and manage our way through some of these customers. So I think that’s where we’re seeing the biggest add in the quarter in terms of non-accruals and frankly that’s where I would expect to see. Going forward, most of our increases in non-accrual will come from that portfolio.

Your next question comes from Ron Epstein - BOA.

Just a couple of quick ones; one for Scott, you mentioned that you guys have laid-off about 10,000 employees. How far do you think that deep enough is? I just what I’m trying to say is, when the economy does turn, how can you be prepared that you maybe didn’t let too many people go or you’re not prepared when things turn?

Just a couple of quick ones; one for Scott, you mentioned that you guys have laid-off about 10,000 employees. How far do you think that deep enough is? I just what I’m trying to say is, when the economy does turn, how can you be prepared that you maybe didn’t let too many people go or you’re not prepared when things turn?

That is something we try to be very helpful about as we look at all the businesses. We have tried where possible and a number of our industrial businesses, Cessna is another good example and we’ve done some with Bell. When we reach that point, where we worry that if went leaner than that, we would have a hard time responding as the market starts to come back. In a number of those businesses we’ve actually used furloughs. So instead of taking a further reduction in the permanent number of employees, we actually shut Cessna for instance for a month. Furloughed all of our workforce and basically shut the factory. Obviously we’re doing customer deliveries and support, but we basically shut the production lines down for a month, because we felt like that was a more prudent thing to do to protect our capability as things start to come back. We’ve done similar things in Bell and across and virtually all of our industrial businesses and we’ll continue to try to do that frankly to modulate demand going forward with furloughs to the extent that we can, but I think we had to be realistic about some of the businesses like Cessna, in terms of what’s the relate of recovery and when you think it’s going to be a longer, flatter recovery, then we’ve had to take those permanent actions in terms of [Inaudible].

Then I guess another one on Cessna, if I can. I don’t think anybody asked this one yet. When we look at whitetails, what’s the outlook on whitetails for this year going into next; how’s that gone? You had some I think last quarter and how does it look now?

Then I guess another one on Cessna, if I can. I don’t think anybody asked this one yet. When we look at whitetails, what’s the outlook on whitetails for this year going into next; how’s that gone? You had some I think last quarter and how does it look now?

Well we have been accumulating. As we said before, the first quarter and second quarter we did build at let’s say an accelerated pace, because we had all the material coming in. We had the workforce in place and the most optimal thing in our view is to go ahead and build the aircraft. So we’ve been doing that. So, I think if you look at classification, of inventory, even though Cessna has been going up, we actually moved that inventory. We went from rolling and process to work to now moving into finished goods and that manifest itself as these whitetails, which now we expect start to believe that number back over the third quarter and the fourth quarter. How far that goes, it kind of goes back to our earlier discussions we had around how many customers do step-up to place 2009 orders and how many people stay in the backlog that are current in 2009 deliveries. When we get do that, the 275 kind of number, that’s the base plan that we are working around and that assumes obviously that we are working down the number of whitetails that came out of the second quarter versus what we have at the end of the year.

The way to think about it is not so much where we are now, where are we at the end of ’09, but where are we at the end of 2010? And our plan is to have none by the end of 2010. We are basically managing a two year demand window here as well.

Right, absolutely. To Doug’s point, when I say we stabilized our production rate for ‘09 and ’10, when we look at deliveries in ’09 and ’10, we take into consideration those whitetails that we would assume we have at the end of ‘09. Those all sell off.

How many do you have today?

How many do you have today?

I don’t think we want to put that information out there, just from a competitive standpoint.

Then I have a question for Lewis. Having lived through this horrible economy, and you look at how you’ve been leading Textron, what have you learned? When you kind of look forward, what have you learned on how you would run the company different, having lived through this?

Then I have a question for Lewis. Having lived through this horrible economy, and you look at how you’ve been leading Textron, what have you learned? When you kind of look forward, what have you learned on how you would run the company different, having lived through this?

That’s a tough question. When we went through 2001, 2002 and 2003, remember our stock went down to 26 and if you do a [Inaudible] which was just a very dramatic thing for the company, we launched a very significant transformation effort which was uncertain as to whether or not it was going to work, but we felt it was the only thing that we could do and a chance of working it and it really did work. Now, so we have the benefits of that. We are network enterprise. We do so many things better than we did. So one thing we’ve learned is that what we’ve put in place in the one, two, three, that first part of this decade, is really saving our bacon, even though when you look at our EPS and cash flow you say “Gosh, you could be doing better.” You take a little cash flow for example and I think we’ve demonstrated that we are now doing a much better job of turning in manufacturing free cash flow; thanks to Scott and Dick and all the guys working on that. I wish we made the cut sooner. It’s so tricky based on the question that just got asked, how do you know you’re not cutting too far? We should have done these cuts six months ago, but in hindsight that’s crystal clear and I guess everybody that’s ever had to make cut out, we cut over 8,000 people this year already. I wish we would have done it sooner, but we just did it in chunks. So, I learned that the hard way again. I don’t know whether I’ll ever learn it permanently, maybe Scott will learn it from me and the next time it happens he’ll move more quickly than we both did. On the positive side I’ve learned that people will do unbelievably heroic things that are very contrary to what you think they’d do. You take TFC, they’re making money for decades and decades and then grow, grow, grow, grow and basically have the same outlet for the same people primarily inline, are now totally focused on running off the very businesses they put in place and what motivated people to do that is just amazing. So, I think the fact that people are aligned to drive Textron profitability ahead of their own unique side of the businesses is quite testimony. I wish we’ve been smart enough not to have such a big TFC, I sure learned that, but that’s something you can’t really know until you get into this financial crisis.

Your last question comes from Robert Stallard – Macquarie Robert Stallard – Macquarie: I was wondering if you could just comment quickly on what this co-line is all about, $410 million seems like a significant amount of money.

What was your question about it? Robert Stallard – Macquarie: What is it all about; it seems like a very large amount of money.

In the fourth quarter we borrowed against insurance policies, corporate owned life insurance policies that we had in place, which are available and I say borrowed it. It’s technically an advance on an asset and you have to pay an interest on the advance, and so given that we’ve improved our liquidity so significantly we were able to pay that down and as Lewis mentioned, that’s still available to us where we had to get into a situation where we need to tap back into it. Robert Stallard – Macquarie: What was the interest rate on that?

Like around 7%, 6% or so. It was 6% non-tax deductible. Robert Stallard – Macquarie: Right. And that’s now caved down to zero?

I believe so. Okay, thank you very much ladies and gentlemen.

Thank you everyone. Have a good day.

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