E-Z-GO 2003 Annual Report Download - page 18

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Textron Inc. is a multi-industry company that leverages its global network of businesses to provide cus-
tomers with innovative solutions and services in five business segments: Bell, Cessna, Fastening Sys-
tems, Industrial and Finance. Textron is known around the world for its powerful brands spanning the
business jet, aerospace and defense, fastening systems, plastic fuel systems and golf car and turf-care
markets, among others. The economic downturn that has affected these markets in recent years contin-
ued to provide a challenging business environment in 2003. Several of Textron’s primary markets have
been adversely affected – most notably business jets and golf car and turf-care equipment. As a result,
customer demand has decreased, contributing to lower revenue and profit. Additionally, the Finance
segment continued to incur a high level of loan loss provisions, although lower than in 2002, due to the
weak financial stability experienced by many of its commercial finance customers.
Other factors affecting operating results in 2003 included a decline in pension income of $61 million pri-
marily due to the negative return on pension assets in 2001 and 2002 and a lower discount rate, and
higher healthcare costs of approximately $40 million.
During 2003, Textron was able to significantly mitigate the impact of the lower revenue and the above
factors primarily through its transformation initiatives, including integrated supply chain and restructur-
ing. Management has continued to execute its transformation strategy by reducing costs and strength-
ening its portfolio through the divestiture of non-core businesses to position Textron to benefit when the
economy recovers.
Revenues were $9.9 billion in 2003, compared with $10.4 billion in 2002 and $12.0 billion in 2001. The
decrease in 2003 was primarily due to lower Citation business jet volume of $876 million at Cessna, due
to a depressed market and the reduction of 2003 deliveries by a major fractional jet customer, and lower
sales volume of $123 million at E-Z-GO and Jacobsen due to a depressed golf market. These decreases
were partially offset by a favorable foreign exchange impact of $313 million in the Industrial and Fasten-
ing Systems segments and increased volume of $131 million at Kautex.
Revenues decreased in 2002 primarily due to the divestitures of Automotive Trim (Trim), Turbine Engine
Components Textron (TECT) and a number of smaller businesses that contributed $1.7 billion to the
decrease.
Segment profit was $762 million in 2003, compared with $898 million in 2002 and $990 million in 2001.
The decrease of $136 million in 2003 was primarily due to lower profit of $177 million at Cessna and $52
million at E-Z-GO and Jacobsen largely due to lower sales. These decreases were partially offset by
higher profit of $65 million at Bell primarily in its aircraft engine and commercial helicopter businesses
due to certain costs incurred in 2002, as described in the Bell segment section.
Segment profit decreased $92 million in 2002 primarily due to divestitures, principally in the Industrial
segment, which contributed $95 million to the decrease.
Textron recorded special charges of $159 million in 2003, $135 million in 2002 and $143 million in 2001.
These charges are summarized below:
2002 2001
Restructuring $ 144 $ 97 $ 132
Unamortized issuance costs on preferred securities 15 — —
Write-down of C&A common stock — 38 —
E-business investment charges — — 9
Other —— 2
Total special charges $ 159 $ 135 $ 143