E-Z-GO 2007 Annual Report Download - page 38

Download and view the complete annual report

Please find page 38 of the 2007 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

17
Textron Inc.
In 2005, the $112 million in special charges that were incurred in connection with the disposition of Trim included $91 million in impairment
charges to write down preferred stock acquired in the disposition and $21 million to cover exposures related to certain guarantees for leases,
environmental and workers’ compensation matters.
Income Taxes
Our effective tax rate increased to 29.6% in 2007 from 27.6% in 2006. In comparison with the Federal statutory rate, in 2007 we had a 1.7% less
favorable impact attributed to our foreign tax rate differential, a 1.2% favorable impact on the 2006 rate related to the adoption of the Canadian
dollar as the functional currency for U.S. tax purposes of one of our Canadian subsidiaries, and a 1.3% less favorable impact from tax settlements
in 2007, compared with settlements in 2006, partially offset by a 1.3% impact from lower state income taxes and a 1% benefi t related to the
manufacturing deduction. The effective tax rate decreased to 27.6% in 2006 from 30.2% in 2005, largely due to the impact of these items on the
2006 effective tax rate.
Discontinued Operations
Discontinued operations primarily refl ect after-tax results of the Fastening Systems business, which was sold in 2006. Operating results of our
discontinued businesses are summarized in Note 2 to the Consolidated Financial Statements.
In 2006, the loss from discontinued operations primarily includes a $120 million after-tax impairment charge for the Fastening Systems business
based on the estimated fair value less cost to sell at the time according to offers received from potential purchasers. In 2005, the loss from
discontinued operations includes a $335 million goodwill impairment charge related to the Fastening Systems business. In addition, we recorded
an after-tax charge of approximately $52 million, which included $37 million related to previously deferred foreign currency translation losses
and $7 million in curtailment losses for employee retirement plans. The gain on disposal, net of income taxes, of $46 million in 2005 primarily
related to a tax benefi t recorded upon the sale of InteSys.
Segment Analysis
Our four reportable segments are: Bell, Cessna, Industrial and Finance. These segments refl ect the manner in which we manage our operations.
Segment profi t is an important measure used for evaluating performance and for decision-making purposes. Segment profi t for the manufacturing
segments excludes interest expense, certain corporate expenses and special charges. The measurement for the Finance segment includes interest
income and expense and excludes special charges.
Each segment’s revenues and profi t as a percentage of consolidated revenues and profi t are provided below:
Bell
(Dollars in millions) 2007 2006 2005
Revenues $ 3,915 $ 3,408 $ 2,881
Segment profi t $ 335 $ 249 $ 368
Profi t margin 9% 7% 13%
Backlog at Bell Helicopter $ 3,809 $ 3,119 $ 2,812
Backlog at Textron Systems $ 2,379 $ 1,335 $ 1,169
2007 Revenues – $13.2 Billion 2007 Segment Profi t – $1.6 Billion
29%
26%
38%
7%
Industrial
Bell
Cessna
Finance
20%
13%53%
14%
Industrial
Bell
Cessna
Finance