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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 2000
Commission File Number 1-5480
TEXTRON INC.
(Exact name of registrant as specified in charter)
Delaware 05-0315468
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 Westminster Street, Providence, R.I. 02903
(401) 421-2800
(Address and telephone number of principal executive offices)
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Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Class Which Registered
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Common Stock - par value 12 1/2(cent) New York Stock Exchange
(140,723,761 shares outstanding at March 3, 2001); Pacific Stock Exchange
Preferred Stock Purchase Rights Chicago Stock Exchange
$2.08 Cumulative Convertible Preferred Stock, New York Stock Exchange
Series A - no par value
$1.40 Convertible Preferred Dividend Stock, Series B New York Stock Exchange
(preferred only as to dividends) - no par value
8 3/4% Debentures due July 1, 2022 New York Stock Exchange
7.92% Trust Preferred Securities of Subsidiary Trust New York Stock Exchange
(and Textron Guaranty with respect thereto)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| . No [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant is $7,574,922,778 as of March 3, 2001.
Portions of Textron's Annual Report to Shareholders for the fiscal year
ended December 30, 2000, are incorporated by reference in Parts I and II of this
Report. Portions of Textron's Proxy Statement for its Annual Meeting of
Shareholders to be held on April 25, 2001, are incorporated by reference in Part
III of this Report.
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PART I
ITEM 1. BUSINESS OF TEXTRON
We are a global multi-industry company with operations in five business
segments - Aircraft, Automotive, Fastening Systems, Industrial Products and
Finance. Our business segments include operations that are unincorporated
divisions of Textron Inc. or its subsidiaries and others that are separately
incorporated subsidiaries.
BUSINESS SEGMENTS
This section contains a description of the business of each of our
segments. Financial information by business segment and geographic area appears
on pages 20, 57 and 58 of our 2000 Annual Report to Shareholders. Those pages of
our Annual Report to Shareholders are incorporated by reference into this Annual
Report on Form 10-K.
AIRCRAFT SEGMENT. Our Aircraft segment consists of Bell Helicopter Textron
and Cessna Aircraft Company.
Bell Helicopter Textron
Bell is one of the largest supplier of helicopters, spare parts and
helicopter-related services in the world. Founded in 1946, Bell has delivered
over 34,000 aircraft to military and civilian customers. Bell currently
manufactures four military and six civilian helicopter models. Bell's revenues
accounted for approximately 12%, 13% and 14% of our total revenues in 2000, 1999
and 1998.
Bell supplies advanced military helicopters, spare parts and product
support to the U.S. Government and to military customers outside the U.S. There
are more helicopters manufactured by Bell in the inventory of the U.S.
Government than are manufactured by any other helicopter company. Bell makes
military sales to non-U.S. customers only with the concurrence of the U.S.
Government.
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Bell is also a leading supplier of commercially certified helicopters to
charter, offshore, utility, corporate, police, fire, rescue and emergency
medical helicopter operators. Bell's non-U.S. Government business (including
non-U.S. military customers) typically represents 50% to 65% of its annual
sales.
Bell is teamed with The Boeing Company in the development and production of
the V-22 Osprey tiltrotor aircraft for the U.S. Department of Defense. Tiltrotor
aircraft are designed to utilize the benefits of both helicopters and fixed-wing
aircraft. Through the end of 2000, 19 complete V-22 aircraft have been
manufactured under contract with the Department of Defense. The decision on full
rate production of the V-22 is under consideration at the Department of Defense.
Bell is also teamed with Agusta, Italy's leading helicopter manufacturer, for
the design, manufacture, sale and customer support of a commercial tiltrotor,
the BA609, and a new medium twin-engine helicopter, the AB139.
Bell has developed a new light twin-engine helicopter, designated the Model
427, in collaboration with Korean Aerospace Industries, LTD of South Korea. Bell
is currently manufacturing the Model 427 and began deliveries in 2000.
In the light and medium helicopter market segments, Bell has two major U.S.
competitors and one major European competitor. Some of its competitors are
substantially larger and more diversified aircraft manufacturers. Bell markets
its products around the world through its own sales force and through
independent representatives. Price, financing terms, aircraft performance,
reliability and product support are significant factors in the sale of
helicopters. Bell has developed the world's largest distribution system to sell
and support helicopters, serving customers in over 100 countries.
Cessna Aircraft Company
Based on unit sales, Cessna is the world's largest manufacturer of light
and mid-size business jets, single engine utility turboprop aircraft, and single
engine piston aircraft. Cessna currently has three major aircraft product lines:
Citation business jets, single engine turboprop Caravans and Cessna single
engine piston aircraft. Cessna's revenues accounted for approximately 21%, 21%
and 20% of our total revenues in 2000, 1999 and 1998.
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The family of business jets currently produced by Cessna includes the
Citation CJ1, Citation CJ2, the Citation Bravo, the Citation Encore, the
Citation Excel, and the Citation X. The Citation X is the world's fastest
business jet with a maximum operating speed of Mach .92. In 2000, Cessna
delivered its 3200th business jet. Under development is the mid-size Citation
Sovereign. First customer delivery of this model is scheduled for early 2004.
The Cessna Caravan is the world's best selling utility turboprop. More than
1,200 Caravans have been sold by Cessna since the first Caravan was delivered in
1985. Caravans are offered in four models: the Grand Caravan, the Super
Cargomaster, the Caravan Floatplane and the Caravan 675. Caravans are used in
the U.S. primarily to carry overnight express package shipments. International
uses of Caravans include commuter flights, humanitarian flights, tourism and
freight.
Cessna now has six models in its single engine piston product line: the
four-place 172 Skyhawk, 172 Skyhawk SP, 182 Skylane and Turbo 182 Skylane, and
the six-place 206 Stationair and T206 Turbo Stationair. In 2000, Cessna
delivered its 3000th single engine piston aircraft since production was
restarted in 1997.
Cessna markets its products worldwide primarily through its own sales force
as well as through a network of authorized independent sales representatives.
Cessna has one U.S. and three major foreign competitors for its business jet
products. Cessna's aircraft compete with other aircraft that vary in size,
speed, range, capacity, handling characteristics, and price. Reliability and
product support are significant factors in the sale of these aircraft. The
Citation family of aircraft is supported by ten Citation Service Centers owned
and operated by Cessna, along with authorized independent service stations and
centers in more than 15 countries throughout the world.
Cessna provides its business jet operators with factory-direct customer
support offering 24 hour a day service and maintenance. Cessna Caravan and
single-engine piston customers receive product support through independently
owned service stations and 24 hour a day spare parts support through Cessna.
In 2000, Cessna entered the business jet fractional ownership market
through a Joint Venture Agreement with TAG Aviation S.A., a worldwide aircraft
management and charter
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enterprise. This program, called CitationShares, offers shares of Citation
aircraft in the eastern United States.
AUTOMOTIVE SEGMENT. Our Automotive segment, organized under an umbrella
organization called Textron Automotive Company Inc., consists of Textron
Automotive Trim, CWC Textron and Kautex Textron. Some of our Automotive
operations are unincorporated divisions of Textron Inc. or its subsidiaries and
others are separately incorporated subsidiaries. These operations sell primarily
to automotive original equipment manufacturers and their suppliers operating in
North America and Europe, and, to a lesser extent, South America and Asia.
Textron Automotive is headquartered in Troy, Michigan and has over sixty
manufacturing facilities located in Argentina, Belgium, Brazil, Canada, China,
the Czech Republic, Germany, India, Italy, Mexico, the Netherlands, Portugal,
Spain, the United Kingdom and the U.S.
Through its Textron Automotive Trim operations, Textron Automotive is a
leading worldwide supplier of automotive interior and exterior plastic
components and systems. Interior trim products include instrument panels, door
and sidewall trim, airbag doors, consoles, armrests, package trays and other
trim components. In addition, Textron Automotive's Trim facilities manufacture
exterior decorative components including painted bumpers, fascia, body side
moldings and claddings, fender liners, signal lighting and structural composite
bumper beams. Many of these products are shipped just-in-time as fully
integrated systems. Revenues of Textron Automotive Trim operations accounted for
14%, 15%, and 15% of our total revenues in 2000, 1999 and 1998.
In June 2000, we acquired a 56.6% interest in Plascar Industria e Comerico
Ltda. and integrated it into our Textron Automotive Trim operations. Plascar,
based in Brazil, is the leading supplier of instrument panels and automotive
trim products to global automotive manufacturers producing vehicles in South
America. The remaining 43.3% of Plascar's equity continues to be publicly traded
on Brazilian stock exchanges in the form of preferential shares.
In September 2000, Textron Automotive purchased the interest of Gallino
Plasturgia S.r.l., a subsidiary of Breed Technologies, Inc., in Textron Breed
Automotive S.r.l., a joint venture Textron Automotive formed in Italy in 1999
with Gallino and Magneti Marelli S.p.A. This purchase increased Textron's
ownership in the joint venture to 90%. The joint venture, which was subsequently
renamed Textron Automotive Italia S.r.l., has six manufacturing and
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administrative facilities in Italy and manufactures automotive plastic parts,
including instrument panels, bumpers, and exterior and interior trim parts for
sale to original equipment manufacturers such as Fiat Auto.
CWC Textron designs and manufactures engine camshafts and vibration damper
components for original equipment manufacturers and the aftermarket. Through its
Kaywood Products operation, CWC manufactures precision machined parts and
components for assembled camshafts.
Kautex Textron is a leading manufacturer of blow-molded plastic fuel tank
systems and other blow-molded parts for original equipment manufacturers
throughout Europe, North America, South America and parts of Asia. Kautex
supplies Volkswagen in China through a joint venture with Changchun Junzilan
Industrial Group. Kautex's manufacturing plant in Puebla, Mexico supplies all of
Volkswagen's and DaimlerChrysler's plastic fuel tank requirements for their
Mexican production. Kautex produces plastic fuel tanks and metal fuel filler
systems in its North American operations.
Kautex's McCord Winn Textron operation manufactures windshield and headlamp
washer systems and continues to expand applications of its RITec (Reservoir
Integrated Technology) product, an innovative integration of automotive cooling
system components including the fan shroud and windshield washer and coolant
reservoirs. McCord Winn launched a RITec production program with DaimlerChrysler
in 1999, and other RITec development programs are in progress. We sold McCord
Winn's seating comfort business in December 2000.
More than 100 models currently contain parts made by Textron Automotive
including DaimlerChrysler's Jeep Grand Cherokee and Voyager and Caravan
mini-vans; Ford's Mondeo, Lincoln Town Car and Windstar mini-van; General
Motors' Cadillac Seville and De Ville, Chevrolet Malibu, Monte Carlo, Corvette
and Impala, and the Venture, Transport and Silhouette mini-vans; BMW's 5 series
and 8 series; Toyota's Camry and Avalon; Mitsubishi's Galant and Eclipse; Fiat's
Punto and Bravo/Brava; and VW/Audi's Golf, Passat, Polo, T4, Beetle and A4.
Textron Automotive continues its strong position on DaimlerChrysler's LH series
of cars.
Textron Automotive's manufacturing operations are supported by a staff of
research and design specialists at its Automotive Technology Center. These
specialists have developed new
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processes and products, many of which are patented, that allow Textron
Automotive to offer its customers technology-driven products and processes. In
the plastics and coatings area, Textron Automotive is a recognized leader in
interior surface material (including Textron Automotive's proprietary PVC-free
thermoplastic polyurethane product line), seamless passenger airbag door
technology, structural molded instrument panel systems, integrated modular
assemblies, and molded-in-color interior and exterior components. CWC Castings
is a leader in the design and manufacture of automotive castings. It has
developed a selective austempering heat treatment process for ductile camshafts.
In the automotive business, there is often a long lead time from the time a
supplier is selected to supply components on a new model to the time the
supplier can begin shipping production parts. During this period, the supplier
incurs engineering and development costs. The original equipment manufacturer
reimburses the supplier for these costs as incurred or in the piece prices
charged by the suppliers as the goods are shipped. In addition, automotive
original equipment manufacturers often demand just-in-time delivery, requiring
the supplier to plan shipments in advance and hold inventory.
Automotive original equipment manufacturers and their suppliers are the
principal customers of Textron Automotive. The loss of U.S. and Europe-based
automotive original equipment manufacturers and their first-tier suppliers would
have a material adverse effect on Textron Automotive. However, because of the
broad range of products sold to such customers, it is unlikely that they would
cease all purchases from Textron Automotive.
Each of Textron Automotive's businesses faces competition from a number of
other manufacturers based primarily on price, quality, reputation and delivery.
Although Textron Automotive is one of the largest manufacturers offering its
range of products and services, it faces strong competition in all of its market
segments. Because of the diversity of products and services offered, no single
company is a competitor in all market segments. In certain markets, Textron
Automotive also competes for business with the original equipment manufacturers'
own operations. Textron Automotive is under continual pressure from the original
equipment manufacturers to reduce costs and prices on an annual basis.
FASTENING SYSTEMS SEGMENT. Our Fastening Systems segment, Textron Fastening
Systems (TFS), manufactures and sells fasteners, fastening systems, engineered
assemblies and
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installation tools to the aerospace, automotive, business equipment,
construction, consumer goods, electronics, electrical equipment, industrial
equipment, medical, non-automotive transportation, and telecommunications
markets. TFS consists of three groups: Automotive Solutions, Commercial
Solutions and Advanced Solutions. Some of our TFS operations are unincorporated
divisions of Textron Inc. or its subsidiaries and others are separately
incorporated subsidiaries. TFS also has non-controlling ownership interests in a
number of other companies. TFS is headquartered in Troy, Michigan, and has
facilities located in the following 19 countries: Australia, Austria, Brazil,
Canada, China, France, Germany, Hong Kong, Ireland, Italy, Japan, Korea,
Malaysia, Mexico, Singapore, Spain, Taiwan, the U.K. and the U.S.
TFS sells to a wide range of customers throughout the world, including
original equipment manufacturers, contract producers, component manufacturers,
distributors and retail stores. Products manufactured by TFS include rivets,
threaded and non-threaded fasteners, cold-formed components, metal stampings,
clips, cage nuts, plastic components, and engineered and laser weld assemblies
that incorporate such products. TFS provides value-added products, services and
solutions that simplify manufacturing processes and maximize efficiencies
resulting in lower total system costs to the customer. Revenues of TFS accounted
for approximately 16%, 18% and 18% of our total revenues in 2000, 1999 and 1998.
Through its Automotive Solutions group, TFS is a leading supplier of
engineered fasteners, components and value added services to North American,
South American and European automotive original equipment manufacturers and
their suppliers. TFS Automotive Solutions produces cold formed components,
clips, cage nuts, engineered and laser weld assemblies, metal stampings,
engineered threaded fasteners, blind fastening systems, injection molded plastic
components, and precision fine blanked products under a variety of brand names
including Boesner, BSK, Camcar, Elco, Ring Screw, Sukosim, Valmex and VBF. TFS
Automotive Solutions provides a wide range of design and engineering services
for its global customers. The TFS Automotive Solutions plant provider program
gives manufacturers a single source for the procurement, inventory and delivery
of a broad range of products, including tooling, required for the final assembly
of their products.
TFS Commercial Solutions is a major global manufacturer and distributor of
fasteners and fastening solutions for non-automotive markets. TFS Commercial
Solutions produces engineered threaded fasteners, blind fastening systems and
installations tools, cold formed
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components, aerospace fasteners, construction fasteners and tooling under a
variety of brand names including Avdel, Camcar, Cherry and Elco. TFS Commercial
Solutions provides its customers with supply chain management services through
global vendor managed inventory programs, warehouse and JIT (just-in-time)
programs, and sourcing. TFS Commercial Solutions offers a wide range of design
and engineering services to its customers and is a licensor of various patented
fastening technologies including Torx and Torx Plus.
TFS Advanced Solutions is a major supplier of plastic molded components and
engineered assemblies to wireless telecommunications and computing
manufacturers, as well as the automotive and medical industries. TFS Advanced
Solutions offers its customers a wide range of services including precision
injection molding manufacturing, CAD/CAM tool design and fabrication, high
quality plastic painting, optical quality lens manufacturing, in-mold decorating
and automated assembly. Advanced Solutions' "Internet Manufacturing" process
allows us to produce individualized cell phone covers based on designs
downloaded by consumers to a website and then uploaded to Advanced Solutions for
production.
In May 2000, we acquired the assets of Karl Oelschlager GmbH & Co., a
Stuttgart, Germany based manufacturer of metal stamped parts and engineered
assemblies for automotive and industrial applications. Oehlschlager's
proprietary laser welding technology permits the combination of stamped metal
parts with cold-formed products, thereby increasing an assembly's overall
strength and durability at a lower cost and weight than traditional welding
processes.
In June 2000, we acquired Advantage Molding & Decorating, Inc., an
Illinois-based company, and three affiliated companies. Advantage supplies
injection-molded parts, tooling, and pad-printed designs, and manufactures
highly decorative lenses for use in the wireless telecommunications industry.
In August 2000, we acquired Rego Mold & Tool, Co. Inc., an Illinois
producer of primary tooling and plastic injection molded components for the
wireless telecommunications market and other industries. The Rego acquisition
enhances the mold-making capabilities of TFS Advanced Solutions for both
internal use and external customers.
Although TFS is one of the world's largest providers of fastener products,
engineered assemblies and services, TFS has hundreds of competitors, ranging
from small proprietorships to
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large multi-national companies. Competition is based primarily on price,
quality, reputation and delivery. In addition, larger customers of fastening
systems and engineered assemblies tend to procure products and services from the
larger suppliers, except for "niche" products that may be sourced from smaller
companies. In the wireless telecommunications industry, a major market for
Advanced Solutions, product life cycles are relatively short and subject to
rapid technological change. Only the loss of a customer that is a major original
equipment manufacturer would have a material adverse effect on TFS. However,
because of the broad range of products sold to such customers, it is unlikely
that these customers will cease all purchases from TFS.
INDUSTRIAL PRODUCTS SEGMENT. Our Industrial Products segment, Textron
Industrial Products, is comprised of the following groups: Greenlee Textron;
Textron Golf, Turf & Specialty Products; Textron Fluid and Power Systems;
Textron Systems; OmniQuip Textron; and Textron Industrial Components.
GREENLEE TEXTRON
Our Greenlee Textron group consists of Greenlee Textron and several
operations reporting through Greenlee, including Fairmont Klauke, Progressive
Electronics, Rifocs Corporation, Chesilvale Electronics, and IMAP. These
businesses manufacture powered equipment, electrical test instruments, hand and
hydraulic powered tools, electrical connectors, and certification and
verification products for information technology networks. The products are
principally used in electrical construction and maintenance, telecommunications,
electronics, and plumbing industries.
Our Greenlee Textron group is developing products and services for the
data, signal and voice market to leverage its strong relationship with the
installation services community. Greenlee's entry into this fast-growing market
was facilitated with the acquisitions of Datacom Technologies in 1998 and
Progressive Electronics and Rifocs Corporation in 1999. We further expanded this
business by acquiring IMAP and Chesilvale Electronics in March 2000. IMAP
produces a cable management software solution that incorporates both voice and
data connection management while Chesilvale Electronics manufactures test
equipment and measurement instruments for both digital and analog networks. In
January 2001, we acquired Tempo Research Corporation, which produces advanced
measurement and test equipment for the telecommunications and cable television
industries. Our Greenlee Textron group faces competition from numerous
manufacturers based primarily on price, quality, performance, reliability,
delivery and reputation.
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TEXTRON GOLF, TURF & SPECIALTY PRODUCTS
Our Golf, Turf & Specialty Products group designs, manufactures and sells
golf cars powered by electric and internal combustion engines, multipurpose
utility vehicles, professional turf maintenance equipment, lawn care machinery
and specialized industrial vehicles. Major brand names include E-Z-GO, Ransomes,
Jacobsen, Cushman, Ryan, Steiner, Brouwer, Bunton and Bob-Cat.
The industrial customers of our Golf, Turf and Specialty Products group
consist primarily of golf courses, resort communities and municipalities, as
well as commercial and industrial users such as airports, factories and
professional lawn care services. The group also manufacturers off-road utility
vehicles and golf cars for the consumer market. Sales are made through a network
of distributors and directly to end-users. Many golf and turf-care equipment
sales (both at the distributor and end-user level) are financed through Textron
Financial Corporation as an additional source of revenue to Textron and for
marketing purposes.
Textron's Golf, Turf and Specialty Products business has two major
competitors for golf cars, two major competitors for professional turf
maintenance equipment, and a number of smaller competitors for multipurpose
utility vehicles and professional lawn care machinery. Competition is based
primarily on price, quality, product support, performance, reliability and
reputation.
TEXTRON FLUID AND POWER SYSTEMS
Our Fluid and Power group consists of Textron Motion Control, Textron Power
Transmission and Textron Fluid Handling Products. These operations face
competition from other manufacturers based primarily on price, quality, product
support, performance, delivery and reputation.
Textron's Motion Control business consists of David Brown Hydraulics,
Williams Machine & Tool, Energy Manufacturing, and Micromatic Textron. Textron
Motion Control designs and manufactures control systems, components and tooling
for mobile equipment, automotive, factory and machine automation applications.
In October 2000, we transferred the Micromatic Textron business, which
manufacturers proprietary machine tools, components and assembly systems, from
Textron's Automotive Segment to Textron Motion Control.
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Our Textron Power Transmission business offers products under the brand
names David Brown, Cone Drive, and Benzlers. We design and manufacture
industrial gears, double enveloping worm gear speed reducers, frequency
inverters, mechanical and hydraulic transmission systems, gear motors and gear
sets. These products are sold to a variety of customers, including original
equipment manufacturers (OEMs), distributors and end-users.
Our Textron Fluid Handling Products business, which includes David Brown
Union Pumps, Maag Pump Systems and David Brown Guinard Pumps SAS, designs and
manufactures industrial pumps for oil, gas, petrochemical and polymer
industries. These products are sold to OEMs, distributors and end-users.
TEXTRON SYSTEMS
Textron Systems, a supplier of sensors, software and electronics for
defense, aerospace, and industrial markets, manufactures "smart" weapons,
airborne and ground-based surveillance systems, automatic aircraft landing
systems, and aircraft and missile control actuators and valves. While Textron
Systems sells most of its products directly to customers, it also sells an
increasing number of products through a growing, global network of sales
representatives and distributors. Formerly part of the Fluid and Power Group,
Textron Systems is now managed as a separate business unit, and the defense and
aerospace related product lines of the Textron Industrial Motion Control
business have been merged into Textron Systems.
In 2001, Textron Marine & Land Systems, formerly part of the Textron
Industrial Components group, became part of the Textron Systems group. Textron
Marine & Land Systems designs and manufactures specialty marine and land
systems. Products include high performance hovercraft, such as air cushion
landing craft, search and rescue vessels, and the Cadillac Gage family of
armored vehicles and turrets, which has products operating in over 35 countries.
OMNIQUIP TEXTRON
OmniQuip produces telescopic material handlers, aerial work platforms and
compact construction equipment under the trade names SkyTrak, Lull, Snorkel and
Scat Trak. It has 16 facilities located in the U.S., U.K., Australia and New
Zealand and employs approximately 1,700 people. Large national equipment rental
fleets account for approximately 50 percent of sales. Remaining sales are to
end-users through independent distributors and rental centers. The majority of
our sales occur in the second quarter; the first and fourth quarters are
traditionally soft. End-users are usually construction sub-contractors such as
masons, framers, steel erectors
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and roofers. OmniQuip competes in a fragmented market against a variety of
manufacturers. Competition is based primarily on price, quality, product
support, performance, delivery and reputation.
TEXTRON INDUSTRIAL COMPONENTS
Our Industrial Components group consists of Textron Lycoming and Turbine
Engine Components Textron. The group's product lines are sold to a wide variety
of customers, including OEMs, the U.S. and foreign governments, distributors and
end-users. The principal competitive factors affecting the group's sales include
price, quality, customer service, performance, reliability, reputation and
existing product base.
Textron Lycoming is the world leader in the design, manufacture and
overhaul of reciprocating piston aircraft engines for the global general
aviation market. Textron Lycoming sells new products directly to general
aviation airframe manufacturers, including Piper Aircraft, Robinson Helicopter,
and SOCATA, a division of Aerospatiale. Textron Lycoming is also the exclusive
supplier of engines for Cessna's product line of single-engine aircraft.
Aftermarket sales are made to the more than 180,000 existing owners of Textron
Lycoming products through a worldwide network of independently owned
distributors.
Turbine Engine Components is one of the world's largest independent
suppliers of internal components for aircraft gas turbine engines. Its product
lines include fan and compressor blades, vanes, shafts, disks, rotors, and other
rotating components, and the forgings from which those products are machined.
Turbine Engine Components manufacturers its products to the specifications of
its customers.
FINANCE SEGMENT. Our Finance segment consists of Textron Financial
Corporation and its subsidiaries. Textron Financial is a diversified commercial
finance company with core operations in four segments: small business, middle
markets, specialty finance, and structured capital. The small business segment
is focused in aircraft financing, equipment financing through vendor
relationships, factoring, and SBA (Small Business Administration) financing. The
middle markets segment focuses on dealer inventory financing, asset-based
lending, and franchise finance. The specialty finance segment includes media
finance and inventory and notes receivable financing for developers of vacation
interval resorts, residential homesites (primarily for manufactured housing) and
recreational land lots. The structured capital segment originates
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and manages a portfolio of leveraged lease transactions. The segment also
originates factoring arrangements and working capital loans in the
telecommunications industry, establishes financing programs with specialty
financial services companies, and participates in investment grade and near
investment grade structured secured term and revolving credit facilities.
Textron Financial's other financial services and products include transaction
syndications, equipment appraisal and management, portfolio servicing and
insurance brokerage.
Textron Financial's financing activities are confined almost exclusively to
commercial markets and to lease and secured lending products. Textron
Financial's services are offered primarily in North America. However, Textron
Financial does finance Textron products worldwide, principally Bell helicopters
and Cessna aircraft in South America.
The commercial finance businesses in which Textron Financial operates are
highly fragmented and extremely competitive. Textron Financial is subject to
competition from various types of financing institutions, including banks,
leasing companies, insurance companies, commercial finance companies and finance
operations of equipment vendors. Competition within the commercial finance
industry is primarily focused on price, terms, structure and service.
BACKLOG
Information regarding our backlog of government and commercial orders at
the end of the past two fiscal years is contained on page 31 of our 2000 Annual
Report to Shareholders, which page is incorporated herein by reference.
Approximately 46% of our total backlog of $9.9 billion at December 30,
2000, represents orders which are not expected to be filled within our 2001
fiscal year. At December 30, 2000, approximately 96% of the total government
backlog of $1.4 billion was funded.
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U.S. GOVERNMENT CONTRACTS
In 2000, 20% of the revenues of our Aircraft segment and 13% of the
revenues of our Industrial Products segment, constituting in the aggregate 10%
of our consolidated revenues, were generated by or resulted from contracts with
the U.S. Government. U.S. Government business is subject to competition, changes
in procurement policies and regulations, the continuing availability of
Congressional appropriations, world events, and the size and timing of programs
in which Textron may participate.
Our contracts with the U.S. Government generally may be terminated in whole
or in part at the convenience of the U.S. Government or if we are in default. If
the U.S. Government terminates a contract for convenience, we normally will be
entitled (up to a maximum equal to the contract price) to reimbursement for
allowable costs incurred, increased or decreased by our expected profit or loss
had the contract been completed. If, however, the U.S. Government terminates a
contract for default, generally: (a) we will be paid an agreed-upon amount for
manufacturing materials and partially completed products accepted by the U.S.
Government; (b) the U.S. Government will not be liable for our costs with
respect to unaccepted items and will be entitled to repayment of advance
payments and progress payments related to the terminated portions of the
contract; and (c) we might be liable for excess costs incurred by the U.S.
Government in procuring undelivered items from another source.
RESEARCH AND DEVELOPMENT
Information regarding our research and development expenditures is
contained on pages 50 and 51 of our 2000 Annual Report to Shareholders. This
page is incorporated herein by reference into this Annual Report on Form 10-K.
PATENTS AND TRADEMARKS
We own, or are licensed under, numerous patents throughout the world
relating to products, services and methods of manufacturing. Patents have been
of value in the past and are expected to be of value in the future. However, the
loss of any single patent or group of patents would not, in our opinion,
materially affect the conduct of our business.
We also own trademarks, trade names and service marks that are important to
our business. Some of these trademarks, trade names and service marks are used
in this Annual
15
16
Report on Form 10-K: AB139; Advantage Molding & Decorating; ASCTec; Avdel;
BA609; Bell Helicopter Textron; Bell Model 427; Benzlers; Bob-Cat; Boesner;
Brouwer; BSK; Bunton; Cadillac Gage; Cam Tooling; Camcar; Caravan 675; Caravan
Floatplane; Cessna Aircraft Company; Cessna Caravan; Cherry; Chesilvale
Electronics; Citation Bravo; Citation CJ1; Citation CJ2; Citation Encore;
Citation Excel; CitationShares; Citation X; Cone Drive; Cushman; CWC; Datacom;
David Brown Guinard Pumps; David Brown Hydraulics; David Brown Union Pumps;
Elco; E-Z-GO; Fairmont Klauke; Grand Caravan; Greenlee Textron; IMAP; Jacobsen;
Karl Oelschlager GmbH & Co.; Kautex Textron; Kaywood Products, Lull; Maag Pump
Systems; McCord Winn Textron; Micromatic Textron; OmniQuip Textron; Progressive
Electronics; Ransomes; Rego Mold & Tool, Rifocs; Ring Screw; RITec; Ryan; Scat
Trak; 172 Skyhawk; 172 Skyhawk SP; 182 Skylane; Sky Trak; Snorkel; 206
Stationair; Steiner; Sukosim; Super Cargomaster; T206 Turbo Stationair; Tempo
Research Corporation; Textron; Textron Automotive Company; Textron Automotive
Trim; Textron Fastening Systems; Textron Financial Corporation; Textron Fluid
and Power Systems; Textron Fluid Handling Products; Textron Golf, Turf and
Specialty Products; Textron Industrial Components; Textron Industrial Motion
Control; Textron Lycoming; Textron Marine & Land Systems; Textron Power
Transmission; Textron Systems; TFS Advanced Solutions; TFS Automotive Solutions;
TFS Commercial Solutions; Torx; Torx Plus; Turbine Engine Components Textron;
Turbo 182 Skylane; V-22 Osprey; Valmex; VBX; Williams Machine & Tool and their
related trademark designs and logotypes (and variations of the foregoing) are
trademarks, trade names or service marks of Textron Inc., its subsidiaries,
affiliates, or joint ventures.
ENVIRONMENTAL CONSIDERATIONS
Our operations are subject to numerous laws and regulations designed to
protect the environment. Compliance with these laws and expenditures for
environmental control facilities have not had a material effect on our capital
expenditures, earnings or competitive position. Additional information regarding
environmental matters is contained on pages 31 and 56 of our 2000 Annual Report
to Shareholders. These pages are incorporated by reference into this Annual
Report on Form 10-K.
EMPLOYEES
At December 30, 2000, we had approximately 71,000 employees.
16
17
ITEM 2. PROPERTIES
At December 30, 2000, we operated a total of 211 plants located throughout
the U.S. and 128 plants outside the U.S. Of the total of 339 plants, we owned
173 and the balance were leased. In the aggregate, the total manufacturing space
was approximately 41 million square feet.
In addition, we own or lease offices, warehouse and other space at various
locations throughout the U.S. and outside the U.S. We consider the productive
capacity of the plants operated by each of our business segments to be adequate.
In general, our facilities are in good condition, are considered to be adequate
for the uses to which they are being put, and are substantially in regular use.
ITEM 3. LEGAL PROCEEDINGS
On May 12, 2000, the Massachusetts Water Resources Authority (MWRA) issued
a Notice of Violation (NOV) to Textron Systems Corporation (TSC) relating to
industrial discharges to the MWRA sewer system from TSC's Wilmington,
Massachusetts facility. The NOV, which seeks a civil administrative penalty,
alleges a failure to obtain a permit for certain discharges, discharge reporting
violations, and violations of discharge limits. The penalty assessed for the NOV
may exceed $100,000.
We are subject to legal proceedings arising out of the conduct of our
business. These proceedings include claims arising from private transactions,
government contracts, product liability, and environmental, safety and health
matters. Some of these legal proceedings seek damages, fines or penalties in
substantial amounts or remediation of environmental contamination. Under federal
government procurement regulations, certain claims brought by the U.S.
Government could result in our suspension or debarment from U.S. Government
contracting for a period of time. On the basis of information presently
available, we believe that these suits and proceedings will not have a material
effect on our net income or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of our security holders during the last
quarter of the period covered by this Annual Report on Form 10-K.
17
18
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information concerning our executive
officers as of March 15, 2001. Unless otherwise indicated, the employer is
Textron Inc.
Name Age Position
- ---- --- --------
Lewis B. Campbell 54 Chairman and Chief Executive Officer since 1999; formerly
President and Chief Executive Officer, 1998 to 1999; President
and Chief Operating Officer, 1994 to July 1998; Director since
1994.
John A. Janitz 58 President and Chief Operating Officer since 1999; formerly Chairman,
President and Chief Executive Officer, Textron Automotive Company, 1996
to 1999; Executive Vice President and General Manager of TRW Inc.'s
Occupant Restraint Group, 1990 to 1996. Director since 1999.
Kenneth C. Bohlen 48 Executive Vice President and Chief Innovation Officer since April 2000.
Formerly, Senior Vice President and Chief Information Officer, 1999 to
April 2000; Vice President and Chief Information Officer of AlliedSignal
Aerospace, 1999 to 2000; Vice President Supply Chain AlliedSignal
Engines, 1998 to 1999; Vice President SixSigma and Chief Information
Officer AlliedSignal Engines, 1997 to 1998; Director of Supply Chain
Management, AlliedSignal, Inc. 1996 to 1997.
John D. Butler 53 Executive Vice President Administration and Chief Human Resources
Officer since 1999; formerly Executive Vice President and Chief Human
Resources Officer, 1997 to 1998; Vice President Personnel of General
Motors International Operations (Zurich, Switzerland), 1990 to 1997.
Mary L. Howell 48 Executive Vice President Government, Strategy Development and
International, Communications and Investor Relations since October 2000;
formerly Vice President Government, International, Communications and
Investor Relations 1998 to October 2000; formerly Executive Vice
President Government and International, 1995 to July 1998; Senior Vice
President Government and International Relations, 1993 to 1995.
Theodore R. French 46 Executive Vice President and Chief Financial Officer since December
2000. Formerly, President, Financial Services and Chief Financial
Officer, CNH Global N.V. and its predecessor, Case Corporation, 1992 to
December 2000.
Terrence O'Donnell 57 Executive Vice President and General Counsel since March 2000; Partner,
Williams & Connolly, since 1992.
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19
PART II
ITEM 5. MARKETS FOR THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
Our Common Stock is traded on the New York, Chicago and Pacific Stock
Exchanges. At December 30, 2000, there were approximately 21,000 holders of
Textron Common Stock. The information on the price range of Textron's Common
Stock and dividends paid per share appearing under "Common Stock Information" on
page 59 of our 2000 Annual Report to Shareholders is incorporated by reference
into this Annual Report on Form 10-K.
ITEM 6. SELECTED FINANCIAL DATA
The information appearing under "Selected Financial Information" on page 60
of our 2000 Annual Report to Shareholders is incorporated by reference into this
Annual Report on Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
"Management's Discussion and Analysis," appearing on pages 21 through 32 of
our 2000 Annual Report to Shareholders is incorporated by reference into this
Annual Report on Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISKS
"Quantitative Risks Measures," appearing on page 30 of our 2000 Annual
Report to Shareholders is incorporated by reference into this Annual Report on
Form 10-K.
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20
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and supplementary information
contained in our 2000 Annual Report to Shareholders and the Financial Statement
Schedules, as listed in the Index to Financial Statements and Financial
Statement Schedules attached to this Annual Report on Form 10-K, are
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information appearing under "Nominees for Director," "Directors
Continuing in Office" and "Section 16(a) Beneficial Ownership Reporting
Compliance" on pages 3 through 6 and page 11 of the Proxy Statement for our
Annual Meeting of Shareholders to be held on April 25, 2001, is incorporated by
reference into this Annual Report on Form 10-K.
Information regarding Textron's executive officers is included on page 18
of Part I of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information appearing under "Report of the Organization and
Compensation Committee on Executive Compensation, Executive Compensation and
Performance Graph" on pages 12 through 16 of the Proxy Statement for our Annual
Meeting of Shareholders to be held on April 25, 2001, is incorporated by
reference into this Annual Report on Form 10-K.
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21
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information appearing under "Security Ownership of Certain Beneficial
Holders" and "Security Ownership of Management," on pages 9 and 10 of the Proxy
Statement for our Annual Meeting of Shareholders to be held on April 25, 2001,
is incorporated by reference into this Annual Report on Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 10-K
(a) FINANCIAL STATEMENTS AND SCHEDULES
The consolidated financial statements, supplementary information and
financial statement schedules listed in the accompanying Index to Financial
Statements and Financial Statement Schedules are filed as part of this Report.
EXHIBITS
3.1 Restated Certificate of Incorporation of Textron as filed
January 29, 1998. Incorporated by reference to Exhibit 3.1
to Textron's Annual Report on Form 10-K for the fiscal year
ended January 3, 1998.
3.2 By-Laws of Textron. Incorporated by reference to Exhibit 3.2
to Textron's Annual Report on Form 10-K for the fiscal year
ended January 1, 2000.
4.1 Indenture dated as of December 9, 1999, between Textron
Financial Corporation and Sun Trust Bank, Atlanta (including
form of debt securities). Incorporated by reference to
Exhibit 4.1 to Amendment No. 2 to Textron Financial
Corporation's Registration Statement on Form S-3 (No.
333-88509).
21
22
4.2 Support Agreement dated as of May 25, 1994, between Textron
Inc. and Textron Financial Corporation. Incorporated by
reference to Exhibit 10.1 to Textron Financial Corporation's
Registration Statement on Form 10.
NOTE: Instruments defining the rights of holders of certain issues
of long-term debt of Textron have not been filed as exhibits
to this Report because the authorized principal amount of
any one of such issues does not exceed 10% of the total
assets of Textron and its subsidiaries on a consolidated
basis. Textron agrees to furnish a copy of each such
instrument to the Commission upon request.
NOTE: Exhibits 10.1 through 10.17 below are management contracts
or compensatory plans, contracts or agreements.
10.1A Annual Incentive Compensation Plan For Textron Employees.
Incorporated by reference to Exhibit 10.1 to Textron's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995.
10.1B Amendment to Annual Incentive Compensation Plan for Textron
Employees. Incorporated by reference to Exhibit 10.1 to
Textron's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 3, 1999.
10.2A Deferred Income Plan for Textron Key Executives.
Incorporated by reference to Exhibit 10.2 to Textron's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995.
10.2B Amendments to Deferred Income Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.2B to
Textron's Annual Report on Form 10-K for the fiscal year
ended January 2, 1999.
10.2C Amendment to Deferred Income Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.2 to
Textron's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 3, 1999.
10.2D Amendment to Deferred Income Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.2D to
Textron's Annual Report on Form 10-K for the fiscal year
ended January 1, 2000.
10.3 Special Benefits for Textron Key Executives. Incorporated by
reference to Exhibit 10.4 to Textron's Annual Report on Form
10-K for the fiscal year ended December 30, 1995.
22
23
10.4 Supplemental Benefits Plan For Textron Key Executives with
Market Square Profit Sharing Plan Schedule.
10.5A Supplemental Retirement Plan for Textron Key Executives.
Incorporated by reference to Exhibit 10.6 to Textron's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995.
10.5B Amendment to Supplemental Retirement Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.5B to
Textron's Annual Report on Form 10-K for the fiscal year
ended January 2, 1999.
10.5C Amendment to Supplemental Retirement Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.4 to
Textron's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 3, 1999.
10.5D Amendment to Supplemental Retirement Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.5D to
Textron's Annual Report on Form 10-K for the fiscal year
ended January 1, 2000.
10.6A Survivor Benefit Plan For Textron Key Executives.
Incorporated by reference to Exhibit 10.7 to Textron's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995.
10.6B Amendment to Survivor Benefit Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.5 to
Textron's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 3, 1999.
10.7A Textron 1990 Long-Term Incentive Plan ("1990 Plan").
Incorporated by reference to Exhibit 10.7 to Textron's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1989.
10.7B First Amendment to 1990 Plan. Incorporated by reference to
Exhibit 10.7(c) to Textron's Annual Report on Form 10-K for
the fiscal year ended December 28, 1991.
10.7C Second Amendment to 1990 Plan. Incorporated by reference to
Exhibit 10.7(c) to Textron's Annual Report on Form 10-K for
the fiscal year ended January 2, 1993.
10.8A Textron 1994 Long-Term Incentive Plan ("1994 Plan").
Incorporated by reference to Exhibit 10 to Textron's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 2, 1994.
23
24
10.8B Amendment to 1994 Plan. Incorporated by reference to Exhibit
10.9B to Textron's Annual Report on Form 10-K for the fiscal
year ended January 2, 1999.
10.8C Amendment to 1994 Plan. Incorporated by reference to Exhibit
10.6 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 3, 1999.
10.8D Amendment to 1994 Plan. Incorporated by reference to Exhibit
10.8D to Textron's Annual Report on Form 10-K for the fiscal
year ended January 1, 2000.
10.9 Textron 1999 Long Term Incentive Plan. Incorporated by
reference to Exhibit 10.9 to Textron's Annual Report on Form
10-K for the fiscal year ended January 1, 2000.
10.10 Form of Indemnity Agreement between Textron and its
directors and executive officers. Incorporated by reference
to Exhibit A to Textron's Proxy Statement for its Annual
Meeting of Shareholders on April 29, 1987.
10.11 Deferred Income Plan for Non-Employee Directors.
Incorporated by reference to Exhibit 10.11 to Textron's
Annual Report on Form 10-K for the fiscal year ended January
1, 2000.
10.12 Employment Agreement between Textron and Kenneth C. Bohlen
dated July 18, 2000. Incorporated by reference to Exhibit
10.2 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 1, 2000.
10.13 Employment Agreement between Textron and John D. Butler
dated July 23, 1998. Incorporated by reference to Exhibit
10.2 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 3, 1998.
10.14A Employment Agreement between Textron and Lewis B. Campbell
dated July 23, 1998. Incorporated by reference to Exhibit
10.3 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 3, 1998.
10.14B Retention Award granted to Lewis B. Campbell on December 14,
1995. Incorporated by reference to Exhibit 10.16B to
Textron's Annual Report on Form 10-K for the fiscal year
ended December 30, 1995.
24
25
10.14C Retention Award granted to Lewis B. Campbell on June 1,
1999. Incorporated by Reference to Exhibit 10.13C to
Textron's Annual Report on Form 10-K for the fiscal year
ended January 1, 2000.
10.14D Retention Award granted to Lewis B. Campbell on January 1,
2001, and revision of vesting schedule for the Retention
Award granted on June 1, 1999.
10.15A Employment Agreement between Textron and Theodore R. French
dated December 21, 2000.
10.15B Retention Award granted to Theodore R. French on January 1,
2001.
10.16 Employment Agreement between Textron and Mary L. Howell
dated July 23, 1998. Incorporated by reference to Exhibit
10.5 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 3, 1998.
10.17 Employment Agreement between Textron and John A. Janitz
dated May 25, 1999. Incorporated by reference to Exhibit
10.15 to Textron's Annual Report on Form 10-K for the fiscal
year ended January 1, 2000.
10.18 5-Year Credit Agreement dated as of April, 1998, among
Textron, the Banks listed therein and Morgan Guaranty Trust
Company of New York as Administrative Agent. Incorporated by
reference to Exhibit 10.2 to Textron's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 4, 1998.
10.18A Employment Agreement between Textron and Stephen L. Key
dated July 23, 1998. Incorporated by reference to Exhibit
10.7 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 3, 1998.
10.18B Amendment dated December 21, 2000, to Employment Agreement
between Textron and Stephen L. Key.
10.19 Employment Agreement between Textron and Terrence O'Donnell
dated March 10, 2000. Incorporated by reference to Exhibit
10.1 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 1, 2000.
12.1 Computation of ratio of income to combined fixed charges and
preferred stock dividends of Textron Manufacturing.
12.2 Computation of ratio of income to combined fixed charges and
preferred stock dividends of Textron Inc. including all
majority-owned subsidiaries.
25
26
13 A portion (pages 20 through 60) of Textron's 2000 Annual
Report to Shareholders.
21 Certain subsidiaries of Textron. Other subsidiaries, which
considered in the aggregate do not constitute a significant
subsidiary, are omitted from such list.
23 Consent of Independent Auditors.
24.1 Power of attorney.
24.2 Certified copy of a resolution of the Board of Directors of
Textron.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter ended December
30, 2000.
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Annual Report on Form
10-K to be signed on its behalf by the undersigned, thereunto duly authorized on
this 14th day of March 2001.
TEXTRON INC.
Registrant
By: /s/ Michael D. Cahn
------------------------------
Michael D. Cahn
Attorney-in-fact
27
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below on this 14th day of March 2001, by the following
persons on behalf of the registrant and in the capacities indicated:
Name Title
---- -----
* Chairman and Chief Executive Officer, Director
- ----------------------------
Lewis B. Campbell
* President and Chief Operating Officer, Director
- ----------------------------
John A. Janitz
* Director
- ----------------------------
H. Jesse Arnelle
* Director
- ----------------------------
Teresa Beck
* Director
- ----------------------------
R. Stuart Dickson
* Director
- ----------------------------
Lawrence K. Fish
* Director
- ----------------------------
Joe T. Ford
27
28
* Director
- ----------------------------
Paul E. Gagne
* Director
- ----------------------------
John D. Macomber
* Director
- ----------------------------
Lord Powell of Bayswater KCMG
* Director
- ----------------------------
Brian H. Rowe
* Director
- ----------------------------
Sam F. Segnar
* Director
- ----------------------------
Martin D. Walker
* Director
- ----------------------------
Thomas B. Wheeler
* Executive Vice President and
- ---------------------------- Chief Financial Officer
Theodore R. French (principal financial officer)
28
29
* Vice President and Controller
- ---------------------------- (principal accounting officer)
Richard L. Yates
*By: /s/ Michael D. Cahn
- ----------------------------
Michael D. Cahn
Attorney-in-fact
29
30
TEXTRON INC.
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
ITEM 14(a)
Form Annual Report to
Textron Inc. 10-K Shareholders
- ------------ ---- ------------
Report of Independent Auditors 33
Consolidated Statements of Income for each of the years in 34
the three-year period ended December 30, 2000
Consolidated Balance Sheets at December 30, 2000 and January 35
1, 2000
Statements of Cash Flows for each of the years 36
in the three-year period ended December 30, 2000
Consolidated Statements of Changes in Shareholders' Equity 38
for each of the years in the three-year period ended
December 30, 2000
Notes to Consolidated Financial Statements 39-58
Revenues and Profit by Business Segment 20
Supplementary Information (Unaudited):
Quarterly Financial Information 2000 and 1999 59
Financial Statement Schedule for each of the years in the
three-year period ended December 30, 2000
I Condensed financial information of registrant 31
All other schedules are omitted because the conditions requiring the filing
thereof do not exist or because the information required is included in the
financial statements and notes thereto.
30
31
TEXTRON INC.
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
For each of the years in the three-year period ended December 30, 2000
Financial information of the Registrant is omitted because condensed
financial information of Textron Manufacturing, which includes the Registrant
and all of its majority-owned subsidiaries other than its finance subsidiaries
(Textron Finance), is shown on pages 34 through 38 of Textron's 2000 Annual
Report to Shareholders. Management believes that the disclosure of financial
information on the basis of Textron Manufacturing results in a more meaningful
presentation, since this group constitutes the Registrant's basic borrowing
entity and the only restrictions on net assets of Textron's subsidiaries relate
to Textron Finance. The Registrant's investment in Textron Finance is $910
million in 2000 and $868 million in 1999.
Textron Manufacturing received dividends of $82 million, $36 million and
$62 million from Textron Finance in 2000, 1999, and 1998, respectively. Lending
agreements limit Textron Finance's net assets available for cash dividends and
other payments to Textron Manufacturing to approximately $351 million of Textron
Finance's net assets of $910 million at year-end 2000.
Textron Manufacturing's credit agreements contain provisions requiring it
to maintain a minimum level of shareholders' equity and a minimum interest
coverage ratio. For additional information concerning Textron Manufacturing's
long-term debt, see Note 8 to the consolidated financial statements appearing on
pages 45 and 46 of Textron's 2000 Annual Report to Shareholders.
For information concerning Textron-Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust Holding Solely Textron Junior
Subordinated Debt Securities, see Note 11 to the consolidated financial
statements appearing on page 48 of Textron's 2000 Annual Report to Shareholders.
31
32
EXHIBITS
3.1 Restated Certificate of Incorporation of Textron as filed
January 29, 1998. Incorporated by reference to Exhibit 3.1
to Textron's Annual Report on Form 10-K for the fiscal year
ended January 3, 1998.
3.2 By-Laws of Textron. Incorporated by reference to Exhibit 3.2
to Textron's Annual Report on Form 10-K for the fiscal year
ended January 1, 2000.
4.1 Indenture dated as of December 9, 1999, between Textron
Financial Corporation and Sun Trust Bank, Atlanta (including
form of debt securities). Incorporated by reference to
Exhibit 4.1 to Amendment No. 2 to Textron Financial
Corporation's Registration Statement on Form S-3 (No.
333-88509).
4.2 Support Agreement dated as of May 25, 1994, between Textron
Inc. and Textron Financial Corporation. Incorporated by
reference to Exhibit 10.1 to Textron Financial Corporation's
Registration Statement on Form 10.
NOTE: Instruments defining the rights of holders of certain issues
of long-term debt of Textron have not been filed as exhibits
to this Report because the authorized principal amount of
any one of such issues does not exceed 10% of the total
assets of Textron and its subsidiaries on a consolidated
basis. Textron agrees to furnish a copy of each such
instrument to the Commission upon request.
NOTE: Exhibits 10.1 through 10.17 below are management contracts
or compensatory plans, contracts or agreements.
10.1A Annual Incentive Compensation Plan For Textron Employees.
Incorporated by reference to Exhibit 10.1 to Textron's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995.
10.1B Amendment to Annual Incentive Compensation Plan for Textron
Employees. Incorporated by reference to Exhibit 10.1 to
Textron's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 3, 1999.
10.2A Deferred Income Plan for Textron Key Executives.
Incorporated by reference to Exhibit 10.2 to Textron's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995.
10.2B Amendments to Deferred Income Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.2B to
Textron's Annual Report on Form 10-K for the fiscal year
ended January 2, 1999.
10.2C Amendment to Deferred Income Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.2 to
Textron's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 3, 1999.
10.2D Amendment to Deferred Income Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.2D to
Textron's Annual Report on Form 10-K for the fiscal year
ended January 1, 2000.
33
10.3 Special Benefits for Textron Key Executives. Incorporated by
reference to Exhibit 10.4 to Textron's Annual Report on Form
10-K for the fiscal year ended December 30, 1995.
10.4 Supplemental Benefits Plan For Textron Key Executives with
Market Square Profit Sharing Plan Schedule.
10.5A Supplemental Retirement Plan for Textron Key Executives.
Incorporated by reference to Exhibit 10.6 to Textron's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995.
10.5B Amendment to Supplemental Retirement Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.5B to
Textron's Annual Report on Form 10-K for the fiscal year
ended January 2, 1999.
10.5C Amendment to Supplemental Retirement Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.4 to
Textron's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 3, 1999.
10.5D Amendment to Supplemental Retirement Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.5D to
Textron's Annual Report on Form 10-K for the fiscal year
ended January 1, 2000.
10.6A Survivor Benefit Plan For Textron Key Executives.
Incorporated by reference to Exhibit 10.7 to Textron's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995.
10.6B Amendment to Survivor Benefit Plan for Textron Key
Executives. Incorporated by reference to Exhibit 10.5 to
Textron's Quarterly Report on Form 10-Q for the fiscal
quarter ended July 3, 1999.
10.7A Textron 1990 Long-Term Incentive Plan ("1990 Plan").
Incorporated by reference to Exhibit 10.7 to Textron's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1989.
10.7B First Amendment to 1990 Plan. Incorporated by reference to
Exhibit 10.7(c) to Textron's Annual Report on Form 10-K for
the fiscal year ended December 28, 1991.
10.7C Second Amendment to 1990 Plan. Incorporated by reference to
Exhibit 10.7(c) to Textron's Annual Report on Form 10-K for
the fiscal year ended January 2, 1993.
10.8A Textron 1994 Long-Term Incentive Plan ("1994 Plan").
Incorporated by reference to Exhibit 10 to Textron's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 2, 1994.
34
10.8B Amendment to 1994 Plan. Incorporated by reference to Exhibit
10.9B to Textron's Annual Report on Form 10-K for the fiscal
year ended January 2, 1999.
10.8C Amendment to 1994 Plan. Incorporated by reference to Exhibit
10.6 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 3, 1999.
10.8D Amendment to 1994 Plan. Incorporated by reference to Exhibit
10.8D to Textron's Annual Report on Form 10-K for the fiscal
year ended January 1, 2000.
10.9 Textron 1999 Long Term Incentive Plan. Incorporated by
reference to Exhibit 10.9 to Textron's Annual Report on Form
10-K for the fiscal year ended January 1, 2000.
10.10 Form of Indemnity Agreement between Textron and its
directors and executive officers. Incorporated by reference
to Exhibit A to Textron's Proxy Statement for its Annual
Meeting of Shareholders on April 29, 1987.
10.11 Deferred Income Plan for Non-Employee Directors.
Incorporated by reference to Exhibit 10.11 to Textron's
Annual Report on Form 10-K for the fiscal year ended January
1, 2000.
10.12 Employment Agreement between Textron and Kenneth C. Bohlen
dated July 18, 2000. Incorporated by reference to Exhibit
10.2 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 1, 2000.
10.13 Employment Agreement between Textron and John D. Butler
dated July 23, 1998. Incorporated by reference to Exhibit
10.2 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 3, 1998.
10.14A Employment Agreement between Textron and Lewis B. Campbell
dated July 23, 1998. Incorporated by reference to Exhibit
10.3 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 3, 1998.
10.14B Retention Award granted to Lewis B. Campbell on December 14,
1995. Incorporated by reference to Exhibit 10.16B to
Textron's Annual Report on Form 10-K for the fiscal year
ended December 30, 1995.
35
10.14C Retention Award granted to Lewis B. Campbell on June 1,
1999. Incorporated by Reference to Exhibit 10.13C to
Textron's Annual Report on Form 10-K for the fiscal year
ended January 1, 2000.
10.14D Retention Award granted to Lewis B. Campbell on January 1,
2001, and revision of vesting schedule for the Retention
Award granted on June 1, 1999.
10.15A Employment Agreement between Textron and Theodore R. French
dated December 21, 2000.
10.15B Retention Award granted to Theodore R. French on January 1,
2001.
10.16 Employment Agreement between Textron and Mary L. Howell
dated July 23, 1998. Incorporated by reference to Exhibit
10.5 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 3, 1998.
10.17 Employment Agreement between Textron and John A. Janitz
dated May 25, 1999. Incorporated by reference to Exhibit
10.15 to Textron's Annual Report on Form 10-K for the fiscal
year ended January 1, 2000.
10.18 5-Year Credit Agreement dated as of April, 1998, among
Textron, the Banks listed therein and Morgan Guaranty Trust
Company of New York as Administrative Agent. Incorporated by
reference to Exhibit 10.2 to Textron's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 4, 1998.
10.18A Employment Agreement between Textron and Stephen L. Key
dated July 23, 1998. Incorporated by reference to Exhibit
10.7 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 3, 1998.
10.18B Amendment dated December 21, 2000, to Employment Agreement
between Textron and Stephen L. Key.
10.19 Employment Agreement between Textron and Terrence O'Donnell
dated March 10, 2000. Incorporated by reference to Exhibit
10.1 to Textron's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 1, 2000.
12.1 Computation of ratio of income to combined fixed charges and
preferred stock dividends of Textron Manufacturing.
12.2 Computation of ratio of income to combined fixed charges and
preferred stock dividends of Textron Inc. including all
majority-owned subsidiaries.
36
13 A portion (pages 20 through 60) of Textron's 2000 Annual
Report to Shareholders.
21 Certain subsidiaries of Textron. Other subsidiaries, which
considered in the aggregate do not constitute a significant
subsidiary, are omitted from such list.
23 Consent of Independent Auditors.
24.1 Power of attorney.
24.2 Certified copy of a resolution of the Board of Directors of
Textron.