E-Z-GO 2005 Annual Report Download - page 38

Download and view the complete annual report

Please find page 38 of the 2005 E-Z-GO annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

18
Textron Inc.
Discontinued operations include Textron Fastening Systems and the InteSys, OmniQuip and small business direct businesses as discontinued
operations, net of applicable income taxes, for all periods presented in accordance with SFAS. No. 144, “Accounting for the Impairment or Dis-
posal of Long-Lived Assets.” See Note 2 to the Consolidated Financial Statements for additional discussion of these divestiture activities.
Operating results of the discontinued businesses are as follows:
(In millions)
2005 2004 2003
Revenue $ 1,936 $ 1,994 $ 1,973
(Loss) income from discontinued operations before special charges (388) 72 61
Special charges (11) (91) (111)
Loss from discontinued operations (399) (19) (50)
Income tax benefit 40 9 7
Operating loss from discontinued operations, net of income taxes (359) (10) (43)
Gain on disposal, net of income taxes 46 — —
Loss from discontinued operations, net of income taxes $ (313) $ (10) $ (43)
In 2005, the loss from discontinued operations includes a $335 million goodwill impairment charge related to the Textron Fastening Systems
business. In addition, we recorded an after-tax charge of approximately $52 million in the fourth quarter of 2005, which includes $37 million
related to previously deferred foreign currency translation losses and $2 million of tax charges, both related to the non-U.S.-based business, as
well as $7 million related to curtailment losses for employee retirement plans. After these charges, management assessed the estimated fair value
of the business and determined that no further adjustment to the carrying value was required. In addition, approximately $6 million in after-tax
deal-related costs primarily for professional services and advisory fees were incurred during the fourth quarter. In 2003, the loss from discontin-
ued operations includes a $30 million goodwill and intangible asset impairment charge related to the OmniQuip business.
In 2005, Textron recorded a net $46 million gain on disposal, primarily related to a tax benefit recorded upon the sale of InteSys. There was no
gain or loss on the sale of OmniQuip and the small business direct businesses in 2003.
Special charges represent restructuring costs incurred by Textron Fastening Systems, InteSys and OmniQuip in connection with the company-
wide restructuring program.
Outlook
We expect higher revenues in 2006 as a result of revenue increases at Bell, Cessna and Finance, while the Industrial businesses are expected to
be down slightly. At Bell, revenues are expected to increase primarily due to higher commercial helicopter deliveries. At Cessna, we expect an
increase in revenue due to higher sales of jets based on our current delivery schedule.
Textron’s commercial backlog from unaffiliated customers was $7.4 billion and $6.3 billion at the end of 2005 and 2004, respectively, and is pri-
marily related to Cessna. U.S. Government backlog was $3.3 billion at the end of 2005 and 2004, which was substantially all in the Bell segment.
See “Backlog” in Item 1. Business of Textron on page 6 for more information.
Segment Analysis
Bell
(Dollars in millions)
2005 2004 2003
Revenues $ 2,881 $ 2,254 $ 2,348
Segment profit $ 368 $ 250 $ 234
Profit margin 13% 11% 10%
Backlog at Bell Helicopter $ 2,812 $ 2,842 $ 1,438