E-Z-GO 1998 Annual Report Download - page 44

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In 1997, Textron acquired Germany-based Kautex Group, a worldwide supplier of blow-
molded plastic fuel tanks and other automotive components and systems for approxi-
mately $350 million, which includes the assumption of debt. In addition, Textron acquired
Brazil-based Brazaco Mapri Industrias, S.A., South America’s leading maker of fasteners
for a purchase price of $70 million paid in the first quarter of 1998. Smaller acquisitions
made in 1997 aggregated approximately $70 million.
In 1996, Textron acquired Valois Industries (renamed Textron Industries, S.A.S.), a
France-based manufacturer of engineered fastening systems for approximately $240 mil-
lion, which includes the assumption of debt. Other acquisitions made in 1996 aggregated
approximately $130 million.
The acquisitions were accounted for as purchases and accordingly, the results of opera-
tions of each acquired company are included in the statement of income from the date of
acquisition.
Dispositions
On August 11, 1998, Textron announced that it had reached an agreement to sell Avco
Financial Services (AFS) to Associates First Capital Corporation for $3.9 billion in cash.
The sale was completed on January 6, 1999. Net after-tax proceeds will approximate $2.9
billion. Textron has restated its financial statements as presented herein to treat AFS as a
discontinued operation.
The operating results of AFS are summarized below:
For each of the three years ended December 31,
(In millions)
1998 1997 1996
Revenues $1,866 $1,851 $1,758
Costs and expenses 1,600 1,550 1,471
Income before taxes 266 301 287
Income taxes (101) (115) (112)
Net income $ 165 $ 186 $ 175
Presented below is a summary of AFS’ financial position at December 31, 1998 and 1997:
(In millions)
1998 1997
Assets
Investments $ 914 $ 844
Finance receivables – net 7,678 7,234
Other assets 706 654
Total assets $9,298 $8,732
Liabilities
Accounts payable $ 129 $ 123
Other liabilities 418 485
Debt 7,575 6,910
Total liabilities 8,122 7,518
Equity:
Common stock 11
Capital surplus 763 747
Retained earnings 478 509
Other (66) (43)
Total equity 1,176 1,214
Total liabilities and equity $9,298 $8,732
Fuel Systems Textron was sold to Woodward Governor Company for $160 million in
cash in June 1998, at a pretax gain of $97 million ($54 million after-tax). In 1997, Textron
completed the sale of its 83.3% owned subsidiary, the Paul Revere Corporation to
Provident Companies, Inc. Net proceeds to Textron after adjustments and contingent pay-
ments were approximately $800 million (which included the value of shares of Provident
common stock subsequently sold for $245 million). In 1996, Textron sold, for no gain or
loss, its Aerostructures division for $180 million in cash plus a subordinated note.
40 1998 TEXTRON ANNUAL REPORT