E-Z-GO 1998 Annual Report Download - page 5

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To Our Shareholders:
1998 was a defining year for Textron. Against a backdrop of
significant global economic volatility and industry consolidations,
we continued to position the company for long-term success while
delivering on our promise of consistent growth. We achieved:
P 22 percent increase in earnings per share – our sixth consecutive
year of double-digit increases, and our ninth consecutive year of
income growth
P 12 percent increase in revenue – our third successive year of
double-digit growth
P Return on equity of 19.6 percent
P 13.7 percent return on invested capital
P Free cash flow of $348 million, up from $234 million in 1997
Most importantly, our shareholders realized total returns of
24 percent. Over the past nine years, total annual returns to Textron
shareholders have averaged 26 percent, compared to 18 percent for
the S&P 500.
These financial achievements are especially impressive when you
consider that in 1998, we acquired and integrated nine companies,
announced two divestitures and put in place the leadership team to
guide our company into the 21st century.
Textron’s outstanding performance was driven by the underlying
strengths of our businesses combined with strategic actions that
demonstrate our discipline in making tough decisions in the best
interests of our shareholders. Most significant among these was
the decision to sell Avco Financial Services, which enables us to
redeploy capital to higher-growth opportunities.
Strategic Divestiture —
Managing the Mix for Higher Growth
In early 1999, we completed the sale of Avco to The Associates First
Capital Corporation for $3.9 billion, arguably one of the most impor-
tant strategic moves in Textron’s 75-year history. Driving this critical
decision was the continued consolidation of the consumer finance
industry, the high premiums placed on successful consumer finance
franchises, and our realization that significant capital investment would
have been needed to generate the required returns from Avco.
Accomplishments
$.70
$2.68
Textron has reported
nine consecutive
years of earnings
growth, including
double-digit gains
in each of the
last six years.
89 90 91 92 93 94 95 96 97 98
EPS From Continuing Operations