E-Z-GO 2000 Annual Report Download

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Compelling Growth
Enterprise Excellence
Powerful Brands
2000 ANNUAL REPORT

Table of contents

  • Page 1
    Powerful Brands Enterprise Excellence Compelling Growth 2000 ANNUAL REPORT

  • Page 2
    ... Cessna Aircraft 10 AUTOMOTIVE 12 FASTENING SYSTEMS 14 INDUSTRIAL PRODUCTS 16 FINANCE 18 MANAGEMENT TEAM 20 FINANCIAL REPORT Financial Highlights (Dollars in millions) 2000 1999 change Operating Results Revenues Segment profit Segment profit margin $13,090 $ 1,410* 10.8%* $11,854 $ 1,201...

  • Page 3
    ...Industrial Products segment, our Data-Signal-Voice (DSV) business grew to over $150 million in annualized sales as a result of acquisition and internal investment. This group is emerging as a strong... industry-setting standards for credit quality in our portfolio. 1 TEXTRON 2000 ANNUAL REPORT

  • Page 4
    ...-core units and outsource noncore production. When the restructuring is complete, it will generate annual savings of approximately $100 million to $120 million. A New Strategic Framework to Drive... new efforts will foster organic growth while dramatically reducing costs. TEXTRON 2000 ANNUAL REPORT 2

  • Page 5
    ... Other key financial objectives through 2005 include: Organic revenue growth of approximately five percent annually; Segment profit margins in excess of 13 percent; and Earnings per share growth averaging..., Lewis B. Campbell Chairman and Chief Executive Officer 3 TEXTRON 2000 ANNUAL REPORT

  • Page 6
    ...In today's economy, however, we recognize that being consistent is not enough. That's why in 2000, we made a commitment to deliver compelling growth - long-term, sustainable growth that makes Textron ...the-box ideas and bring a passion for excellence to everything we do. TEXTRON 2000 ANNUAL REPORT 4

  • Page 7
    ... the following financial goals: ROIC of 400 basis points above our weighted average cost of capital Organic revenue growth of approximately five percent annually Segment profit margins in excess of 13 percent by 2005 Earnings per share growth averaging 10 percent per year Debt to capital ratio of...

  • Page 8
    Bell Helicopter: Leading the Way in Everything We Do. Combining the flexibility of a helicopter with the speed and range of a fixed-wing aircraft, the Bell Boeing V-22 provides military services with capabilities never before attainable. TEXTRON 2000 ANNUAL REPORT 6

  • Page 9
    ... the military Bell Boeing V-22 Tiltrotor, with seven aircraft delivered to the U.S. Marines in 2000, and 346 additional deliveries expected through 2016. We've earned our customers' trust by producing... to facilitate supply chain management and electronic commerce. 7 TEXTRON 2000 ANNUAL REPORT

  • Page 10
    ...customers. Delivering on that commitment means offering our customers aircraft designed to meet their needs. In 2000, with the certification and delivery of three new Citation business jet models - the Citation CJ1,... of customer service - all for a fraction of the cost! TEXTRON 2000 ANNUAL REPORT 8

  • Page 11
    ... customers, CitationShares was created to offer an affordable alternative for people who want to enjoy the convenience and flexibility of owning a Citation business jet. 9 TEXTRON 2000 ANNUAL REPORT

  • Page 12
    Textron Automotive: Driving Growth through Integration and Innovation. At our new Advanced Design and Integration Center, Textron Automotive employees work side by side with customers to develop inspired solutions, long-term concepts and cost-reduction ideas. TEXTRON 2000 ANNUAL REPORT 10

  • Page 13
    ... an entirely new revenue source for our company. The first step: licensing our proprietary IntelliMold injection molding technology to companies in other industries. 11 TEXTRON 2000 ANNUAL REPORT

  • Page 14
    ... continuously upgrade our capabilities and performance for our customers. We will meet our goals through a focus on agility, innovation, operational excellence and worldwide teamwork. TEXTRON 2000 ANNUAL REPORT 12

  • Page 15
    ... directly back to the consumer. TFS also creates micro fasteners (left) that meet critical requirements for the assembly of computer hard-diskdrive components. 13 TEXTRON 2000 ANNUAL REPORT

  • Page 16
    ... qualities as a competitive edge, we are able to develop new products like our rough-terrain vehicle which serves the rural sportsman and agriculture markets. TEXTRON 2000 ANNUAL REPORT 14

  • Page 17
    ... R&D programs - growing the Data-Signal-Voice business to over $150 million in annualized sales. We are also bringing our brands into attractive niche markets and developing strategic ... and castings; consolidating underutilized facilities and reducing cycle times. 15 TEXTRON 2000 ANNUAL REPORT

  • Page 18
    ... disposition of excess assets. Our success continues to leverage a solid foundation of disciplined risk management, a diversified portfolio mix and an outstanding team of employees. TEXTRON 2000 ANNUAL REPORT 16

  • Page 19
    ... OmniFitness store manager - rely on Textron Financial to provide unique and comprehensive commercial lending solutions to meet their needs - with speed and precision. 17 TEXTRON 2000 ANNUAL REPORT

  • Page 20
    ... Executive Officer, Textron Automotive Company Terry D. Stinson, Chairman and Chief Executive Officer, Bell Helicopter * Corporate Officer and member of the Management Committee ** Corporate Officer TEXTRON 2000 ANNUAL REPORT 18

  • Page 21
    ...: Chairman, Lewis B. Campbell Audit Committee: Chairman, Paul E. Gagné Nominating and Board Affairs Committee: Chairman, R. Stuart Dickson Organization and Compensation Committee: Chairman, John D. Macomber (2) (3) (4) 19 TEXTRON 2000 ANNUAL REPORT

  • Page 22
    .... 2000 Revenues 2000 Segment Profit 34% Aircraft $4,394 22% Automotive $2,924 16% Fastening Systems $2,137 23% Industrial Products $2,944 5% Finance $691 32% Aircraft $451 17% Automotive $244 13% Fastening Systems $182 24% Industrial Products $343 14% Finance $190 TEXTRON 2000 ANNUAL REPORT 20

  • Page 23
    ... Related to Long Term Supply Arrangements. " As a result of this, in the first quarter 2000, Textron reported a cumulative effect of change in accounting principle of $59 million (net of tax), or approximately...Net income (including the cumulative effect of the change 21 TEXTRON 2000 ANNUAL REPORT

  • Page 24
    ...to a higher level of average debt as a result of acquisitions and share repurchases. Interest income for 2000 of $6 million was related to the settlement of a note receivable compared to income of $27 million ... engineering expense related to the Sovereign business jet. TEXTRON 2000 ANNUAL REPORT 22

  • Page 25
    ... in 1998 on the formation of the BA609 program. Product development expense for 2000 increased slightly as higher spending on the BA609 commercial tiltrotor aircraft (net of...and higher petroleum-based resin prices. 23 TEXTRON 2000 ANNUAL REPORT 98 14% 99 22% 00 2% Segment Profit $244 $220 $171 98 21...

  • Page 26
    ...and improved operating performance at Kautex. Fastening Systems Revenues $2,082 $2,137 $1,758 Fastening Systems 2000 vs. 1999 The Fastening Systems segment's revenues increased $55 million (3%), while profit decreased... and Textron Systems. This 98 16% 99 20% 00 22% TEXTRON 2000 ANNUAL REPORT 24

  • Page 27
    ... were depressed by a one-month strike at a Golf and Turf plant. Finance Revenues $691 Finance 2000 vs.1999 The Finance segment's revenues increased $228 million (49%) while profit increased $62 million (48...49% Segment Profit $190 $128 $113 98 5% 99 13% 00 48% 25 TEXTRON 2000 ANNUAL REPORT

  • Page 28
    ...the carrying amount of goodwill exceeded its fair value. During the last several months of 2000, the value of Textron's e-business investment portfolio has fallen substantially. The Company has ...tangible goods and services. Textron Finance consists of Textron's whollyTEXTRON 2000 ANNUAL REPORT 26

  • Page 29
    ...of these notes were used to reduce existing short-term debt and for general corporate purposes. During 2000, Textron Finance increased its medium-term note facility by $300 million and issued $415 million ..., Textron Finance terminated $300 million notional interest 27 TEXTRON 2000 ANNUAL REPORT

  • Page 30
    ...securitizations during 2000 was $22...year-end 2000, Textron ... Also at year-end 2000, Textron Finance had ... assumed. In December 2000, Textron agreed to acquire...of 2000. As a result, Textron has taken a charge in December 2000 of ... its current value. At year-end 2000, Textron's equity investments in its e-...

  • Page 31
    ... quarter of fiscal 2001. The net impact of these agreements was immaterial in 2000 and increased reported interest expense by $2 million in both 1999 and 1998. Foreign Exchange Risks ... was approximately $841 million at year-end 2000 and $1 .3 billion at year-end 1999. 29 TEXTRON 2000 ANNUAL REPORT

  • Page 32
    ... likely not indicative of actual results in the future. 2000 Carrying Value Hypothetical Fair Change In Value Fair Value Carrying... - 50 - 1 111 (15) - - 5 (2) 1 285 - (21) - - - - 286 (6) (25) 1 - - - 23 (22) 88 - - - - 16 (26) 16 (26) (2) (8) - 5 - 5 - (12) TEXTRON 2000 ANNUAL REPORT 30

  • Page 33
    ...fiscal quarters of years beginning after June 15, 2000. In June 2000, the FASB issued SFAS 138 which amended accounting and reporting standards and addressed issues causing implementation difficulties with ... results of operations or financial position of the Company. 31 TEXTRON 2000 ANNUAL REPORT

  • Page 34
    ... increases and pricing pressure brought by OEM customers, and (k) Textron Financial Corporation's ability to maintain credit quality and control costs when entering new markets. TEXTRON 2000 ANNUAL REPORT 32

  • Page 35
    ...and objectivity of the financial data presented in this Annual Report. The consolidated financial statements have been prepared in ...accompanying consolidated balance sheets of Textron Inc. as of December 30, 2000 and January 1, 2000, and the related consolidated statements of income, cash flows and ...

  • Page 36
    ...Income For each of the years in the three-year period ended December 30, 2000 (In millions except per share amounts) 2000 $12,399 691 13,090 10,028 1,445 486 37 483 - 12,479...77 2.68 1.00 - - $ 3.68 $ $ 1.51 1.90 - - (.41) $ 14.80 4.05 10.70 (.27) - $ 14.48 $ 1.49 TEXTRON 2000 ANNUAL REPORT 34

  • Page 37
    ... Commercial and U.S. Government receivables (less allowance for doubtful accounts of $58 in 2000 and 1999) Inventories Other current assets Total current assets Property, plant, and equipment...7 24 1,009 5,817 (98) 6,764 2,387 4,377 $16,393 6,738 2,744 3,994 $16,370 35 TEXTRON 2000 ANNUAL REPORT

  • Page 38
    ...Supplemental information: Cash paid during the year for interest Cash paid during the year for income taxes (includes $9 and $912 in 2000 and 1999, respectively, for AFS disposal) - - 382 112 41 - 483 9 - - 349 91 34 - (1) 63...to the consolidated financial statements. TEXTRON 2000 ANNUAL REPORT 36

  • Page 39
    ...$ 277 $ 1999 623 $ 1998 443 2000 $ 118 Textron Finance 1999 $ 79 $ 1998 70 (36) - 365 97 4 - 483 (9) (43) - 337 84 2 - (1) 68 (8) 187 282 66 1 (54) 87...) - - - (62) 59 434 9 13 $ $ $ 22 153 30 $ 325 $ 78 $ 1,132 See notes to the consolidated financial statements. 37 TEXTRON 2000 ANNUAL REPORT

  • Page 40
    ... (33) - (1) (34) $ (96) $2,226 (2) $2,224 $ 608 (34) $ 574 *Shares issued at the end of 2000, 1999, 1998 and 1997 , were as follows (in thousands): $2.08 Preferred - 212; 228; 247; and 270 shares, respectively; ... See notes to the consolidated financial statements. TEXTRON 2000 ANNUAL REPORT 38

  • Page 41
    ... of a wide variety of products • Light construction equipment: commercial customers, national rental fleets, and the U.S. Government Finance • Commercial loans and leases • North America 39 TEXTRON 2000 ANNUAL REPORT

  • Page 42
    ...and Industrial Products business segments. During 2000, Textron reorganized its management reporting structure into five segments, separately reporting the financial results of Fastening Systems ... has been used for all acquisitions during the past three years. TEXTRON 2000 ANNUAL REPORT 40

  • Page 43
    ... At the end of 2000 and 1999, Textron Finance... 2000 and 1999. The average recorded investment in impaired loans during 2000 ...finance receivables was 0.7% in 2000, and 0.5% in both 1999...$3.8 billion in 2000 and 1999, ...) (97) (4) (278) $(531) 2000 $1,985 894 1,305 361 683 361 5,589 116 $5,473 1999 ...

  • Page 44
    ... flows discount rates assumptions would not have a material impact on the current fair value of the residual cash flows associated with the retained interests. TEXTRON 2000 ANNUAL REPORT 42

  • Page 45
    ... net of progress payments and customer deposits, were $161 million at year-end 2000 and $181 million at year-end 1999. 5 Long-Term Contracts Revenues under fixed... of $17 million at year-end 2000 with no unrealized gain or loss in accumulated other comprehensive loss. 43 TEXTRON 2000 ANNUAL REPORT

  • Page 46
    ...1998 $ 443 $ 430 $2.68 $2.60 $ 608 $ 595 $3.68 $3.60 Income from continuing operations As reported Pro forma Income from continuing operations per diluted share As reported Pro forma Net income As reported Pro forma Net income per diluted share As reported Pro forma TEXTRON 2000 ANNUAL REPORT 44

  • Page 47
    ...for commercial paper or bank borrowings. (In millions) December 30, January 1, 2000 2000 Textron Finance: Senior: Borrowings under or supported by credit facilities* 6.89%... were necessary in 2000, 1999, or 1998 for Textron Finance to meet these standards. 45 TEXTRON 2000 ANNUAL REPORT

  • Page 48
    ... 6.52% 8.14% 6.77% 7.31% 2.0 12.6 0.8 7.6 $300 $ - $125 $ - 5.76% -% 5.84% -% 0.8 - 0.4 - *Amounts at December 30, 2000 and January 1, 2000 require United States Prime Rate-based payments as stated above and LIBOR-based receipts of 6.77% and 6.07%, respectively. TEXTRON 2000 ANNUAL REPORT 46

  • Page 49
    ... difficulties with SFAS 133 for certain derivative instruments and hedging activities. These statements became effective for the Company on December 31, 2000. The Company will record the effect of the transition to these new accounting requirements in the first 47 TEXTRON 2000 ANNUAL REPORT

  • Page 50
    ... authorized by the 1999 Plan are: (a) 8,000,000 options to purchase Textron shares; (b) 1,000,000 performance units and (c) 500,000 shares of restricted stock. TEXTRON 2000 ANNUAL REPORT 48

  • Page 51
    ....42 2,238 1,195 3,579 $28.37 $45.71 $71.01 Reserved Shares of Common Stock At year-end 2000, common stock reserved for the subsequent conversion of preferred stock and shares reserved for the exercise of stock options were ... be redeemed earlier for $.05 per right. 49 TEXTRON 2000 ANNUAL REPORT

  • Page 52
    ...years ended (Dollars in millions, shares in thousands) December 30, 2000 Average Income Shares January 1, 2000 Average Income Shares January 2, 1999 Average Income Shares Income from ... which is recoverable from the U.S. Government through overhead cost allowances. TEXTRON 2000 ANNUAL REPORT 50

  • Page 53
    ... December 30, January 1, December 30, January 1, 2000 2000 2000 2000 (In millions) Change in benefit obligation Benefit obligation at...) - - $ 603 603) (122) (16) - $(741) $ $ 621 (156) 2 2 $ 469 $ 508 (144) 7 2 373 $ - (715) - - $(715) $ - (741) - - $ $(741) 51 TEXTRON 2000 ANNUAL REPORT

  • Page 54
    ... by Textron's defined benefit pension plans. The 2000 health care cost trend rate, which is the weighted average annual assumed rate of increase in the per capita... deferred income taxes for temporary differences between the financial reporting basis and income tax basis of assets and liabilities ...

  • Page 55
    ... the rationalization of certain product lines, and the divestiture of non-core businesses. Restructuring costs recorded in earnings during the fourth quarter of 2000 included $16 million of accrued severance-related benefits, outplacement services and certain other exit 53 TEXTRON 2000 ANNUAL REPORT

  • Page 56
    ... the restructuring reserve balance of $15 million is adequate to carry out the restructuring activities formally identified and committed to as of December 30, 2000 and anticipates that all actions related to these liabilities will be completed by December 29, 2001. TEXTRON 2000 ANNUAL REPORT 54

  • Page 57
    ...Other Total Initial charge Utilized Balance at January 2, 1999 Additions Utilized No longer Required Balance at January 1, 2000 Additions Utilized Balance at December 30, 2000 $ 28 (28) - 14 (14 $ 49 (9) 40 28 (22) (24) 22 - (... in a current market exchange. 55 TEXTRON 2000 ANNUAL REPORT

  • Page 58
    ... to be in the range of $70 million to $200 million. As of December 30, 2000, environmental reserves of approximately $133 million, of which $15 million are classified as current liabilities,... remediation liabilities will likely be paid over the next five to ten years. TEXTRON 2000 ANNUAL REPORT 56

  • Page 59
    ... reportable segments...Revenues (In millions) 2000 1999 1998 Aircraft:...$13,721 Property, Plant and Equipment Expenditures 2000 1999 1998 $154 $164 $140 127 132 110 113 103 113 ...527 8 - $532 3 - $475 2000 Aircraft $ 2,551 1,738 Automotive 2,029... Systems Industrial Products Finance Corporate 2000 $ 10 14 22 41 ...

  • Page 60
    ... end of 2000 and 1999 were the following: (In millions) Customer deposits Salary, wages and employer taxes Reserve for warranties Sales rebate Other Total accrued liabilities December 30, 2000 $ 279 260 236 83 513 $1,371 January 1, 2000 $ 253 232 193 76 513 $1,267 TEXTRON 2000 ANNUAL REPORT 58

  • Page 61
    ...Data (Unaudited) (Dollars in millions except per share amounts) 2000 Q4 Q3 Q2 Q1 Q4 Q3 1999 Q2 Q1 Revenues Aircraft ...stock and exercise of options. The average share base for the fourth quarter 2000 excludes potentially dilutive common shares (convertible preferred stock and stock options). These ...

  • Page 62
    ... except where otherwise noted and per share amounts) 2000 1999 1998 1997 1996 1995 1994 1993 1992 Revenues...effect of change in accounting principles in 2000 and 1992. **Assumes full conversion of outstanding preferred stock and exercise of stock options. TEXTRON 2000 ANNUAL REPORT 60

  • Page 63
    ... Rego Mold & Tool. Automotive Solutions Camilla Denison President - Americas Peter Billmann President - Europe Commercial Solutions William R. Barker President Advanced Solutions Leonard Griffin President 61 TEXTRON 2000 ANNUAL REPORT

  • Page 64
    ..., Chesilvale and IMAP . Textron Systems Textron Marine & Land Systems Textron Golf, Turf & Specialty Products Gregory E. Hyland Chairman and CEO Greenlee Textron Barclay S. Olson President TEXTRON 2000 ANNUAL REPORT 62

  • Page 65
    ... designs and logotypes (and variations of the foregoing) are service/trademarks or trade names of Textron Inc., its subsidiaries, affiliates, or joint ventures. 63 TEXTRON 2000 ANNUAL REPORT

  • Page 66
    ..., Rhode Island 02903 (401) 421-2800 www.textron.com Annual Meeting Textron's annual meeting of shareholders will be held on Wednesday, April 25,...To receive a copy of Textron's Forms 10-K and 10-Q, proxy statement, Annual Report or the most recent company news and earnings press releases, call (888) ...

  • Page 67
    Design: Benes Brand Imaging Group, Lexington, MA

  • Page 68
    2000 ANNUAL REPORT Textron Inc. 40 Westminster Street Providence, RI 02903 (401) 421-2800 www.textron.com