E-Z-GO 1999 Annual Report Download - page 39

Year 2000 Disclosure
Year 2000 Program
In early 1997, Textron began a company-wide program (the “Program”) to assess the
possible vulnerability of Textron to the Year 2000 problem and to minimize the effect
of the problem on Textron’s operations. The Program was centrally directed from the
Year 2000 Program Office at Textron’s corporate headquarters and was executed at each
Textron business unit. The Program addressed five “Major Elements” at the corporate
headquarters and each business unit:
• Business Systems: management information systems and personal computer
applications, including the computing environments that support them.
• Factory and Facilities Equipment: equipment that uses a computer to control its
operation either for producing an end-product or providing services.
• End-Products: software products, delivered either alone or as a component of
another product, that are supplied to Textron customers.
• Suppliers: assurance that those who sell goods and services to Textron will not
interrupt Textron operations due to the Year 2000 problem.
• Customers: assurance that those who buy goods and services from Textron will
not interrupt Textron operations due to the Year 2000 problem.
As of January 1, 2000, the Program is complete for all systems critical to operations.
Subsequent to January 1, 2000, there have been no system failures or significant incidents
reported at any Textron location. Certain activities remain to be completed relating to
further enhancements to or replacement of non-critical systems. These are not expected
to have an adverse impact on the operations of Textron.
Year 2000 Costs
The total cost of the Year 2000 Program for continuing operations is estimated to be
approximately $115 million. Approximately $58 million is for modifications to existing
items and other program expenses and $57 million is for replacement systems which have
been or are expected to be capitalized in accordance with Company policy. Through
January 1, 2000, total expenditures were $111 million. The estimated future cost to com-
plete the Program is expected to be approximately $4 million including approximately
$1 million for replacement systems. The Year 2000 Program has delayed certain other
Textron information management projects. Delay of these projects has not had an adverse
impact on Textron.
Backlog
Textron’s commercial backlog was $7.2 billion and $5.6 billion at the end of 1999 and
1998, respectively, and U.S. Government backlog was $2.0 billion at the end of 1999 and
$2.1 billion at the end of 1998. Backlog for the Aircraft segment was approximately 81%
and 78% of Textron’s commercial backlog at the end of 1999 and 1998, respectively, and
80% and 73% of Textron’s U.S. Government backlog at the end of 1999 and 1998,
respectively.
Foreign Military Sales
Certain Company products are sold through the Department of Defense’s Foreign
Military Sales Program. In addition, Textron sells directly to select foreign military organi-
zations. Sales under these programs totaled approximately 1.8% of Textron’s consolidated
revenue in 1999 (0.6% in the case of foreign military sales and 1.2% in the case of direct
sales) and 1.6% in 1998 (0.3% and 1.3%, respectively). Such sales include military and
commercial helicopters, armored vehicles, turrets, and spare parts and in 1999 were made
primarily to the countries of Venezuela (41%), Taiwan (34%), Japan (4%), Jamaica (4%),
Bulgaria (3%), Israel (2%), and Germany (2%). All sales are made in full compliance with
all applicable laws and in accordance with Textron’s code of conduct.
1999 Textron Annual Report 37