E-Z-GO 2001 Annual Report Download - page 41

Nature of Operations and Principles of Consolidation
Textron is a global, multi-industry company w ith manufacturing and finance operations. Its principal
markets (listed w ithin segments in order of the amount of 2001 revenues) and the major locations of such
markets are as follow s:
Segment Principal Markets Major Locations
Aircraft • Business jets • North America
• Commercial and military helicopters • Western Europe
• General aviation • South America
• Overnight express package carriers • Asia and Australia
• Commuter airlines, relief flights, tourism and freight
Automotive • Automotive original equipment manufacturers • North America
and their suppliers • Western Europe
• South America
Fastening • Automotive • North America
Systems • Industrial • Western Europe
• Non-Auto Transportation • Asia and Australia
• Aerospace • South America
• Electronics
• Construction
Industrial Products • Industrial components: commercial aerospace • North America
and defense • Western Europe
• Golf and turf-care products: golf courses, resort • Asia and Australia
communities, and commercial and industrial users
• Fluid and power systems: original equipment
manufacturers, distributors and end-users of a w ide
variety of products
• Light construction equipment: commercial customers,
national rental fleets and the U.S. Government
Finance • Commercial loans and leases • North America
The consolidated financial statements include the accounts of Textron and all of its majority- and w holly
ow ned subsidiaries. Investments in w hich Textron does not have control, but has the ability to exercise
significant influence over the operating and financial policies, are accounted for under the equity method.
Textron’s share of net earnings and losses from these investments is included in the consolidated
statement of income.
Textron’s financings are conducted through tw o borrowing groups, Textron Finance and Textron
Manufacturing. This framew ork is designed to enhance Textron’s borrow ing power by separating the
Finance segment. Textron Finance consists of Textron Financial Corporation consolidated w ith its
subsidiaries, which are the entities through which Textron operates its Finance segment. Textron Finance
finances its operations by borrow ing from its ow n group of external creditors. Certain intercompany
transactions betw een borrow ing groups have not been eliminated in the consolidated financial statements.
See “ Due to Textron M anufacturing” in Note 7 for further details. All other significant intercompany transac-
tions are eliminated.
Textron Manufacturing is Textron Inc., the parent company, consolidated with the entities w hich operated
in the Aircraft, Automotive, Fastening Systems and Industrial Products business segments during 2001.
In 2001, management responsibility for a division previously reported in the Fastening Systems segment
was transferred to the Industrial Products segment. Prior period data show n in the financial statements
and related notes have been reclassified, as appropriate.
The preparation of these financial statements in conformity w ith generally accepted accounting principles
requires management to make estimates and assumptions that affect these statements and accompa-
nying notes. Some of the more significant estimates include inventory valuation, residual values of leased
assets, allow ance for credit losses on receivables, product liability, w orkers compensation, actuarial
assumptions for the pension and postretirement plans, estimates of future cash flow s associated w ith
long-lived assets, environmental and warranty reserves and amounts reported under long-term contracts.
Management’s estimates are based on the facts and circumstances available at the time estimates are
1. Summary of
Significant
Accounting
Policies
Notes to Consolidated Financial Statements
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