E-Z-GO 1998 Annual Report Download - page 27

Management’s Discussion and Analysis
Textron Inc.
1998 vs. 1997
PDiluted earnings per share from continuing operations for 1998 were $2.68 per
share, up 22% from the 1997 amount of $2.19. Income from continuing operations in
1998 of $443 million was up 19% from $372 million for 1997. Revenues increased 12%
to $9.7 billion in 1998 from $8.7 billion in 1997. Net income including the results of
AFS which is a discontinued operation was $608 million vs. $558 million in 1997.
POperating income of Textron’s four business segments aggregated $1.040 billion in
1998, up 13% from 1997, as a result of continued improved financial results across all
business segments.
PTotal segment margins increased to 10.7% in 1998 from 10.6% in 1997.
P Corporate expenses and other – net decreased $13 million due primarily to 1997 costs
associated with the termination of interest rate swap agreements no longer qualifying as
accounting hedges and 1997 litigation expenses related to a divested operation.
PThe higher Textron manufacturing interest expense – net – $160 million in 1998 vs.
$129 million in 1997 – was due to higher average debt resulting from the incremental debt
associated with acquisitions and share repurchases, partially offset by the payment of
debt with proceeds in 1997 from the divestiture of Paul Revere.
1997 vs. 1996
PDiluted earnings per share from continuing operations for 1997 were $2.19, up 23% from
the 1996 amount of $1.78. Income from continuing operations in 1997 of $372 million was
up 22% from $306 million for 1996. Revenues increased 16% to $8.7 billion in 1997 from
$7.5 billion in 1996. Net income in 1997 was $558 million versus $253 million in 1996,
which reflected the impact of a $245 million loss from a discontinued operation (Paul
Revere) that was disposed of early in 1997.
POperating income of Textron’s four business segments aggregated $917 million in 1997,
up 14% from 1996, as a result of continued improved financial results in the Aircraft,
Industrial and Finance segments. Operating income in the Automotive segment was
essentially unchanged.
PTotal segment margins decreased to 10.6% in 1997 from 10.7% in 1996, due primarily to
lower margins associated with the Kautex acquisition.
PCorporate expenses and other – net increased in 1997 by $25 million due to 1997 litiga-
tion expenses related to a divested operation, higher 1997 expenses related to organiza-
tional changes and higher support costs related to international expansion, and 1997
costs associated with the termination of interest rate swap agreements no longer qualify-
ing as accounting hedges.
PThe lower Textron manufacturing interest – $129 million in 1997 vs. $148 million in 1996 –
was due to lower average debt, resulting from the payment of debt with proceeds from
the divestiture of Paul Revere, partially offset by the incremental debt associated with
acquisitions.
Aircraft
1998 vs. 1997
The Aircraft segment’s revenues increased $164 million (5%) and income before special
charges increased $25 million (8%) due to higher results at Cessna Aircraft.
PCessna Aircraft’s revenues increased $301 million, primarily as a result of higher sales
of business jets, single-engine aircraft and Caravans. Income increased as a result of the
higher sales combined with improved results in the single-engine piston aircraft business.
Results of Operations
1998 TEXTRON ANNUAL REPORT 23
$9,683
$8,683
$7,506
989796
12%16%11%
Revenues
$2.68
$2.19
$1.78
989796
22%23%24%
Earnings
per Share*
*Income from continuing operations - diluted
$3,189
$3,025
$2,593
989796
5%17%7%
Aircraft
Revenues