E-Z-GO 2001 Annual Report Download - page 21

Textron Inc.
2001 vs. 2000
䊳
Revenues decreased to $12.3 billion in 2001 from $13.1 billion in 2000, primarily due to softening sales
in most short-cycle businesses and pricing pressures, partially offset by higher aircraft sales. Net
income was $166 million for 2001, down from $218 million in 2000. Diluted earnings per share from
continuing operations w ere $1.16 in 2001 and $1.90 in 2000. During 2001, Textron recognized special
charges of $437 million and gains of $342 million on the sale of tw o divisions. In 2000, Textron
recognized $483 million in special charges and recorded a cumulative effect of a change in accounting
principle of $59 million (net of tax) for the adoption of EITF consensus on Issue No. 99-5 “ Accounting
for Pre-Production Costs Related to Long Term Supply Arrangements.”
䊳
Special charges of $437 million in 2001 included goodw ill and intangible asset impairment write-downs
of $319 million, restructuring expense of $81 million, w rite-downs for fixed asset impairments under
the restructuring program of $28 million and e-business investment losses of $9 million.
䊳
Textron recorded $342 million for gains on the sale of tw o divisions in 2001. In December 2001, Textron
recorded a gain of $339 million on the sale of its Automotive Trim business to Collins & Aikman Products
Co., a subsidiary of Collins & Aikman Corporation. Under the terms of the sale, Textron received $625
million in cash along w ith other consideration as disclosed in Note 2 to the consolidated financial
statements. In August 2001, Textron recorded a gain of $3 million on the sale of its Turbine Engine
Components business.
䊳
At year-end 2001, Textron’s reportable segments include Aircraft, Automotive, Fastening Systems,
Industrial Products and Finance. During 2001 and 2000, management responsibility for certain divisions
was reorganized as described in Note 1 to the consolidated financial statements. All prior period data
has been appropriately reclassified. Subsequent to year-end 2001, management responsibility was
reorganized to reflect the sale of the Automotive Trim business, and in 2002, Textron will report under
the follow ing new segments: Aircraft, Fastening Systems, Industrial Products, Industrial Components
and Finance.
䊳
Segment profit of $828 million in 2001 decreased from $1.410 billion in 2000 due to low er sales
volumes and pricing pressures at Automotive, Fastening Systems and Industrial Products; low er profit
at Bell Helicopter due primarily to reduced profitability on certain military contracts and commercial
helicopter programs; manufacturing inefficiencies resulting from reduced production at Fastening
Systems and Industrial Products; and $34 million in additional costs related to restructuring included in
cost of sales. These negative factors w ere partially offset by higher Citation business jet volume at
Cessna Aircraft, the benefit of restructuring and other cost reduction activities and an increase in
syndication and securitization income in the Finance segment.
䊳
Total segment margin decreased to 6.7% in 2001 from 10.8% in 2000 due primarily to lower margins
across the manufacturing segments.
䊳
Corporate expenses and other, net decreased $12 million, due primarily to the impact of organizational
changes made in 2000.
䊳
Net interest expense for Textron M anufacturing increased $10 million. Interest expense increased $4
million due to a higher level of average debt, primarily as a result of low er cash flow from operations during
the first nine months of 2001, partially offset by the benefit of a low er interest rate environment. Interest
income decreased $6 million due to the settlement of a note receivable in the fourth quarter 2000.
䊳
Income Taxes – the effective tax rate for 2001 w as 54.2% primarily due to the impact of the gain on
the sale of the Automotive Trim business in 2001 and the non-tax deductibility of goodw ill w ritten-off in
2001. Excluding the impact of these two items, the effective tax rate for 2001 w as 35.0% . The effective
tax rate for 2000 w as also impacted by the non-tax deductibility of goodw ill w ritten-off during 2000.
Excluding the impact of this goodw ill w rite-off, the effective tax rate for 2000 w as 35.5% . The decrease
in the annual effective tax rate from 35.5% in 2000 to 35.0% in 2001, w as due to the benefit of tax
planning initiatives realized in 2001.
Results of
Operations
Management’s Discussion and Analysis
Textron Annual Report 19
$11,854
$13,090 $12,321
Revenues
99 01
(6)%
00
10%20%
* Income from continuing
operations – diluted
Earnings
per Share*
$4.05
$1.90
$1.16
01
(39)%(53)%
0099
51%