E-Z-GO 2003 Annual Report Download - page 75

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(1) During 2003, Textron sold its remaining OmniQuip business and the small business direct portfolio and has reclassified the
financial results of these businesses as discontinued operations for accounting purposes.
(2) Segment profit represents the measurement used by Textron to evaluate performance for decision-making purposes. Segment
profit does not include interest expense of the manufacturing segments, certain corporate expenses, special charges and
gains and losses from the disposition of significant business units. Special charges in 2003 include $144 million of restructuring
expenses and a $15 million charge for unamortized issuance costs related to the redemption of preferred securities. Special
charges in 2002 include $97 million in restructuring expenses and a $38 million write-down of C&A common stock.
(3) Before income taxes, distributions on preferred securities of subsidiary trusts and the 2002 cumulative effect of change in
accounting principle.
(4) Free cash flow in 2003 includes Textron Manufacturing's net cash flow from operations of $681 million, after-tax cash used for
restructuring activities of $57 million and proceeds on sale of fixed assets of $55 million, less capital expenditures of $310 mil-
lion. Free cash flow in 2002 includes Textron Manufacturing's net cash flow from operations of $495 million, after-tax cash used
for restructuring activities of $58 million and proceeds on sale of fixed assets of $62 million, less capital expenditures of $301
million.
(5) Textron’s calculation of ROIC is as follows:
The following notes and calculation pertain to the table on page 3:
(Dollars in millions) 2003 2002
ROIC Income
Income before cumulative effect of change in accounting principle $ 259 $ 364
Special charges 159 135
Gain on sale of businesses (15) (25)
Tax impact of special charges and gains on sale of businesses (44) (28)
Loss from discontinued operations, net of income taxes 22 3
Operating income (loss) from discontinued operations,
net of income taxes 2(27)
Distribution on preferred securities of subsidiary trusts,
net of income taxes 13 26
Amortization of intangible assets, net of income taxes 6 7
Interest expense, net of income taxes 61 67
Interest cost on accrued postretirement benefits
other than pensions, net of income taxes 25 28
ROIC Income $488 $550
Invested Capital (Average)
Total shareholders’ equity $ 3,548 $ 3,670
Total Textron Manufacturing debt 1,868 1,823
Cash and cash equivalents for Textron Manufacturing (386) (264)
Due from Textron Finance — (255)
Textron Manufacturing mandatorily redeemable preferred
securities 243 485
Accrued postretirement benefits other than pensions,
net of income taxes 375 387
Average Invested Capital $ 5,648 $ 5,846
Return on Invested Capital 8.6% 9.4%
2003
Income from continuing operations (GAAP) $ 2.05 $ 2.62
Special Items:
Restructuring charges .75 .48
Unamortized issuance costs written off upon redemption
of preferred securities .07 —
Write-down of C&A common stock — .16
Gain on sale of businesses (.09) (.06)
Income from continuing operations before special items $ 2.78 $ 3.20
(6) A reconciliation of diluted EPS from continuing operations is as follows:
(7) Before the 2002 cumulative effect of change in accounting principle.
2002