E-Z-GO 2005 Annual Report Download - page 9

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7
our global IT sourcing partnership with Computer Sciences
Corporation (CSC). Notably, we also achieved our initial savings goal
in the first year of our relationship with CSC.
Through our shared services in Human Resources, we’re also
improving the effectiveness and efficiency of employee recruitment.
For example, through the use of Lean tools, we were able to reduce
the time to fill open positions by 15 percent in 2005 alone.
Portfolio Management
In 2005, we made notable progress in the management of our
portfolio. In addition to further cultivating our competencies to
become more value-driven, we took decisive actions to drive even
better shareholder returns. Perhaps most significant was our
strategic evaluation and subsequent decision to sell Textron
Fastening Systems. This action will allow us to reinvest in our more
strategic, value-creating opportunities moving forward.
Throughout transformation, we have divested numerous
manufacturing businesses that were not core to our strategy, and
have liquidated more than $1.4 billion of non-core finance assets.
At the same time, we have continued to enhance the capabilities of
our existing businesses with complementary acquisitions to inspire
growth in attractive, adjacent market segments. For example, in 2005
we purchased US Helicopter to advance Bell’s government
aftermarket business, and acquired the remaining interest in our
Kautex/Keylex Japanese joint venture in order to get closer to
customers and increase our presence in an important growth region.
Growing Opportunity
Certainly, it is evident that momentum is building within Textron – with
every corner we turn and with every opportunity we uncover … for
our customers, our employees and our shareholders. Indeed, this
opportunity is ours for the taking – and through the growth foundation
we’ve put into place throughout transformation, we have earned the
right to capture this growing opportunity.
The following pages contain some very powerful examples of how
our businesses are seizing opportunities for valuable growth and
expansion – now and into the future. We have also increased our
internal five-year target for real value creation. When combined with
our continued focus on transformation initiatives, this expansion and
focus on value growth will generate strong double digit earnings
growth over the next five years, with further improvements in cash
flow, higher returns and increased shareholder value.
Reflecting on the past year, I would like to acknowledge our Board of
Directors – which is amongst the strongest we’ve ever had. And I
would like to thank distinguished director, Brian Rowe, who is retiring
after many years of service to our company. In turn, I am pleased to
welcome our newest director, Dain Hancock, former President of
Lockheed Martin Aeronautics, who joined our Board in 2005 and
brings a wealth of knowledge and experience in all facets of aircraft
and defense operations.
Finally, as I enumerate our many successes in 2005, I am reminded
that this was also a year of great challenge for our more than 1,200
Louisiana-based employees at Textron Marine & Land Systems, as
Hurricane Katrina destroyed many of their homes and briefly stalled
production at our two New Orleans facilities. The Textron enterprise
united to offer our employees and their families a helping hand.
They pulled together to get our business up and running in record
time – their efforts were simply inspiring.
Never before has the power of our networked enterprise been more
evident, and never before have I been prouder of our incredibly
talented and dedicated workforce … for each and every contribution
that helped to make 2005 such a remarkable year.
Thank you for your continued support.
Lewis B. Campbell
Green Belt, February 2006
Financial Highlights
(Dollars in millions, except per share amounts) 2005 2004
Operating Results(1)
Revenues $ 10,043 $ 8,318
Segment profit(2) $ 1,146 $ 850
Segment profit margin 11% 10%
Income from continuing operations $ 516 $ 375
Free cash flow(3) $ 546 $ 729
Return on Invested Capital (ROIC) 13.2% 10.6%
Common Share Data
Diluted earnings per share from continuing operations $ 3.78 $ 2.68
Dividends per share $ 1.40 $ 1.33
Footnotes to this table can be found on the inside back cover of this annual report.