E-Z-GO 1998 Annual Report Download - page 52

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Reserved shares of common stock
At year-end 1998, 3,150,000 shares of common stock were reserved for the subsequent conver-
sion of preferred stock and 8,342,000 shares were reserved for the exercise of stock options.
Preferred stock purchase rights
Each outstanding share of Textron common stock has attached to it one-half of a preferred
stock purchase right. One preferred stock purchase right entitles the holder to buy one one-
hundredth of a share of Series C Junior Participating Preferred Stock at an exercise price of
$250. The rights become exercisable only under certain circumstances related to a person or
group acquiring or offering to acquire a substantial block of Textron’s common stock. In cer-
tain circumstances, holders may acquire Textron stock, or in some cases the stock of an
acquiring entity, with a value equal to twice the exercise price. The rights expire in
September 2005 but may be redeemed earlier for $.05 per right.
Income per common share
In 1997, Textron adopted FAS 128 “Earnings Per Share.” FAS 128 requires companies to
present basic and diluted income per share amounts. A reconciliation of income from
continuing operations and basic to diluted share amounts is presented below.
For the years ended January 2, 1999 January 3, 1998 December 28, 1996
($ in millions,
Average Average Average
shares in thousands)
Income Shares Income Shares Income Shares
Income from
continuing
operations $443 $372 $306
Less: Preferred
stock dividends (1) (1) (1)
Basic
Available to common
shareholders 442 161,254 371 164,830 305 167,453
Dilutive effect of
convertible preferred
stock and stock options 1 4,120 1 4,673 1 4,199
Diluted
Available to common
shareholders and
assumed conversions $443 165,374 $372 169,503 $306 171,652
Comprehensive Income
In 1998, Textron adopted FAS 130, “Reporting Comprehensive Income.” FAS 130 establishes
new rules for the reporting and display of comprehensive income and its components. The
adoption of this Statement had no impact on Textron’s net income or shareholders’ equity.
FAS 130 requires unrealized gains or losses on the Company’s available-for-sale securities
and foreign currency translation adjustments, which prior to adoption were reported sepa-
rately in shareholders’ equity, to be included in other comprehensive income. Prior year
financial statements have been reclassified to conform to the requirements of FAS 130.
48 1998 TEXTRON ANNUAL REPORT