E-Z-GO 1998 Annual Report Download - page 50

Buy Contracts Sell Contracts
Contract Unrealized Contract Unrealized
(In millions) Amount Gain/(Loss) Amount Gain/(Loss)
January 2, 1999
British Pound $ 45 $ – $375 $ –
Canadian Dollar 228 (9) 8 –
German Mark 135 – 339 (5)
French Franc 1 – 119 (4)
Other 6 – 43 (1)
Total $415 $ (9) $884 $(10)
January 3, 1998
British Pound $ 39 $ – $ 22 $ –
Canadian Dollar 129 (5) 62 –
German Mark 16 – 150 2
French Franc – – 97 3
Other 2 – 7 –
Total $186 $ (5) $338 $ 5
9. In 1996, a trust sponsored and wholly-owned by Textron issued preferred securities to the
public (for $500 million) and shares of its common securities to Textron (for $15.5 million),
the proceeds of which were invested by the trust in $515.5 million aggregate principal
amount of Textron’s newly issued 7.92% Junior Subordinated Deferrable Interest Debentures,
due 2045. The debentures are the sole asset of the trust. The proceeds from the issuance of
the debentures were used by Textron for the repayment of long-term borrowings and for
general corporate purposes. The amounts due to the trust under the debentures and the
related income statement amounts have been eliminated in Textron’s consolidated financial
statements.
The preferred securities accrue and pay cash distributions quarterly at a rate of 7.92%
per annum. Textron has guaranteed, on a subordinated basis, distributions and other pay-
ments due on the preferred securities. The guarantee, when taken together with Textron’s
obligations under the debentures and in the indenture pursuant to which the debentures
were issued and Textron’s obligations under the Amended and Restated Declaration of
Trust governing the trust, provides a full and unconditional guarantee of amounts due on
the preferred securities. The preferred securities are mandatorily redeemable upon the
maturity of the debentures on March 31, 2045, or earlier to the extent of any redemption
by Textron of any debentures. The redemption price in either such case will be $25 per
share plus accrued and unpaid distributions to the date fixed for redemption.
10. Preferred stock
Textron has authorization for 15,000,000 shares of preferred stock. Each share of $2.08
Preferred Stock ($23.63 approximate stated value) is convertible into 4.4 shares of com-
mon stock and can be redeemed by Textron for $50 per share. Each share of $1.40
Preferred Dividend Stock ($11.82 approximate stated value) is convertible into 3.6 shares
of common stock and can be redeemed by Textron for $45 per share.
Common stock
Textron has authorization for 500,000,000 shares of 12.5 cent per share par value common
stock. New shares in connection with a two-for-one stock split in the form of a stock divi-
dend were issued and distributed on May 30, 1997 to shareholders of record on the close
of business on May 9, 1997. Average shares outstanding, stock options, and per share
amounts were restated for all periods.
Performance share units and stock options
Textron’s 1994 Long-Term Incentive Plan authorizes awards to key employees in two
forms: (a) performance share units and (b) options to purchase Textron common stock.
The total number of shares of common stock for which options may be granted under
the plan is 10,000,000.
Shareholders’
Equity
Textron-obligated
Mandatorily
Redeemable
Preferred
Securities Of
Subsidiary Trust
Holding Solely
Textron Junior
Subordinated
Debt Securities
46 1998 TEXTRON ANNUAL REPORT