Providence, RI - January 23, 2001 - Textron Inc. (NYSE: TXT) today reported fourth-quarter earnings per share from continuing operations before special charges of $1.28, up 14% from $1.12 in the prior year. Income from continuing operations before special charges was $185 million versus $170 million reported in 1999.

For the year, earnings per share from continuing operations before special charges rose 15% to $4.65 per share from $4.05 in 1999. Income from continuing operations before special charges was $680 million versus $623 million reported in 1999.

The special charges are composed of $366 million in charges related to a previously announced restructuring program and $117 million in write-downs of e-business investments. After the effect of these charges, the company reported a net loss of $218 million for the fourth quarter and net income of $218 million for the full year.

Textron Chairman and Chief Executive Officer Lewis B. Campbell said, "During the quarter, we met our earnings objectives, overcoming the negative impact of a rapid decline in automotive production and general weakness in the economy. In addition to solid earnings growth in our Aircraft, Industrial Products and Finance segments, we were able to meet our target through cost reduction and other actions." Earnings during the quarter benefited from gains of $8 million on the sale of non-core assets in the Automotive and Industrial Products segments, and a lower tax rate.

"We are pleased that we made progress in our top areas of strategic focus for the future. We improved return on invested capital, our priority metric for creating shareholder value, by 50 basis points. We have moved forward with a major restructuring program to support enterprise excellence. And we continued to invest in and build our leading brands," said Campbell.

For the quarter, revenues were up 2% before the impact of foreign exchange and the reclassification of revenues following the adoption of EITF 99-19, for which a substantial portion of the reclassifications are related to the inclusion of used aircraft sales (see footnote (a) in press release tables). Reported revenues were $3.3 billion versus $3.4 billion in 1999. Segment income improved 8% to $369 million from $341 million the prior year. Segment margin was 11.1% versus 10.1% last year.

For the year, revenues were up 13% before the impact of foreign exchange and the reclassification of revenues as a result of the adoption of EITF 99-19. Organic sales growth for the year was 4%, before a negative 2% impact from foreign exchange. Reported revenues increased to $13.1 billion, up 10% from $11.9 billion. Segment income improved 17% to $1.4 billion from $1.2 billion, resulting in a segment margin of 10.8%, up 70 basis points from 1999.

2000 Financial Highlights

• Strong free cash flow of $463 million
• EPS growth before special charges of 15% - the eleventh consecutive year of earnings improvement
• Return on invested capital improvement of 50 basis points to 13.1%
• Operating margin expansion of 70 basis points to 10.8%
• Revenue growth of 10%
• Repurchase of 6.6 million of Textron's common shares, including 1.8 million shares in the fourth quarter
• Maintained a strong balance sheet, ending the year with a debt to capital ratio of 32%

Segment Highlights

In the fourth quarter, Textron reorganized its management reporting structure into five segments, separately reporting Fastening Systems and Industrial Products, which previously comprised the Industrial segment.

During the quarter, the Aircraft segment's backlog increased to a record level of $8.1 billion. During the year, Cessna booked a record 415 new jet orders, up 24% from 335 orders in 1999. Cessna also successfully launched delivery of the CJ2 in the fourth quarter, its third new product and the fourth new product for the Aircraft segment in 2000.

• Bell Helicopter continued to see improvement to commercial helicopter sales and orders, increasing its backlog for commercial helicopters by approximately $100 million a year ago.
• In 2000, Textron's Automotive segment was awarded new business totaling $829 million and increased its full-year operating margin by 60 basis points.
• In Industrial Products, Textron continued to expand its Data-Signal-Voice test and installation equipment business at Greenlee with the announced acquisition of Tempo Research Corporation. The acquisition will increase Greenlee's annualized revenues to over $350 million.
• The Fastening Systems segment continued to make operating performance improvements, increasing its operating margin by 70 basis points in the fourth quarter despite lower automotive volume.
• Finally, Textron Financial achieved its 22nd consecutive year of net income improvement, while maintaining strong credit quality across its portfolio.

Restructuring Plan

To strengthen operating efficiencies and better align its operations with current economic and market conditions, restructuring actions are being taken in Textron's Automotive, Fastening Systems and Industrial Products segments. Through this program, Textron is modernizing and consolidating manufacturing facilities and processes, rationalizing product lines, divesting non-core units, outsourcing non-core production and streamlining sales and administrative overhead.

During the fourth quarter, the company recorded charges of $366 million, of which $349 million was goodwill. The largest portions of these goodwill adjustments are at Turbine Engine Components Textron (TECT) and Flexalloy. TECT is a manufacturer of air and land-based gas turbine engine components and airframe structures within the Industrial Products segment, and Flexalloy is a vendor-managed-inventory company serving primarily the heavy truck industry within Fastening Systems.

Including goodwill write-downs, Textron expects total charges of approximately $550 million, which is consistent with the company's previous estimates of $200 million before goodwill charges.

The cash cost of the program is expected to be between $140 and $160 million ($85 to $100 million after-tax). Ongoing annualized savings are expected to be $100 to $120 million, beginning in 2002, with $50 to $70 million realized in 2001. Substantially, all planned actions will be executed by year-end 2001, with a net reduction in global workforce of over 3,600, representing approximately 7% of the total headcount in these three segments and 5% of Textron's total employees.

Write-down of E-business Investments

Textron has investments in a select group of e-businesses, the largest being Safeguard Scientifics Inc., to accelerate the application of critical new technology across all of the company's businesses. While this remains an important strategic objective for Textron, the value of the company's investments has fallen substantially over the last few months.

As a result, the company has taken a one-time charge in the fourth quarter of $117 million ($76 million after-tax) to write-down its e-business investment portfolio to its current value. The company had been marking its publicly traded investments to market for balance sheet purposes, but had not previously recognized this through the income statement.

2001 Outlook

In 2001, Textron expects earnings per share before restructuring charges to increase approximately 5%. First quarter 2001 results are expected to be approximately $1.00, reflecting a significant level of automotive shutdowns anticipated during the quarter.

Campbell said, "Despite increased demand and improved productivity in many of our businesses, in particular Cessna, Bell Helicopter, E-Z-GO, Greenlee and Textron Financial, our 2001 outlook is influenced by lower industrial growth rates and a decline in automotive production."

This outlook is based on 2001 US GDP growth of about 2.5% and a reduction in the North American full-year automotive production of approximately 10% from 2000 levels. Production levels in the first quarter are expected to be down approximately 17% from a year ago. The company expects restructuring benefits to grow throughout the year, contributing to improved earnings.

Textron Inc. (www.textron.com) is a $13 billion, global, multi-industry company with market-leading businesses in Aircraft, Automotive, Industrial Products, Fastening Systems and Finance. Textron has a workforce of 70,000 employees and major manufacturing facilities in 30 countries. Textron is among Fortune magazine's "Global Most Admired Companies" and Industry Week magazine's "Best Managed Companies."

TEXTRON SEGMENT ANALYSIS

Textron reorganized its management reporting structure into five segments, separately reporting Fastening Systems and Industrial Products, which previously comprised the Industrial segment. Additionally, management responsibility for one division, Micromatic Textron, previously reported in the Automotive segment has been transferred to the Industrial Products segment. Prior periods have been restated to reflect these changes.

Aircraft

For the fourth quarter, the Aircraft segment's revenues decreased 1%, while income increased 8%. Before the reclassification of revenues as a result of the adoption of EITF 99-19 (see footnote (a) in press release tables), quarterly Aircraft revenues were up 4%. Aircraft margins improved by 90 basis points, while backlog increased to a record $8.1 billion compared to $7.3 billion at the end of 1999.

While Cessna's reported revenues decreased, new business jet sales were up 10%, as lower sales of used aircraft, which are now reported as revenues pursuant to Textron's adoption of EITF 99-19, more than offset this increase. Income increased as a result of improved operating performance and lower warranty expense, partially offset by higher engineering expense related to the Sovereign business jet. Cessna's backlog increased to a record $6.6 billion from $6.1 billion at the end of the third quarter.

Bell Helicopter's revenues increased as a result of higher sales of commercial helicopters and spares and higher foreign military sales, partially offset by lower revenues on the Huey and Cobra upgrade contract. Bell's income increased as a result of the higher revenues and higher income related to retirement benefits. Bell's backlog decreased to $1.5 billion from $1.8 billion at the end of the third quarter.

For the year, the Aircraft segment's revenues and income increased 9% and 25%, respectively, achieving a 130 basis point improvement in operating margin. Before the reclassification of revenues as a result of the adoption of EITF 99-19, annual Aircraft revenues were up 11%.

Cessna's revenues increased to a record level due to higher sales of business jets, primarily the Citation Excel and the Citation Bravo, and increased spares and service revenues. Income increased as a result of the higher sales and improved operating performance, partially offset by increased engineering expense related to the Sovereign business jet.

Bell Helicopter's revenues increased as higher foreign military sales, higher commercial spares sales and higher revenues on the V-22 production contract were partially offset by lower sales of other military helicopters. Bell's income increased due to the higher revenues and higher income related to retirement benefits, partially offset by the lower recognition into income of cash received from a joint venture partner in the fourth quarter of 1998 on the formation of the BA609 program.

Automotive

For the fourth quarter, the Automotive segment's revenues and income decreased 10% and 14%, respectively. Revenues decreased primarily due to North American automotive OEM production decreases, the unfavorable impact of foreign exchange at Kautex's European operations and customer price reductions. The lower revenue was partially offset by the contribution from acquisitions, primarily Plascar, and higher sales volume at Kautex. Income decreased, primarily due to the lower sales and higher petroleum-based resin prices. This unfavorable impact was partially offset by improved operating performance at Trim and Kautex and a gain from the sale of the McCord Winn seating comfort product and other non-core assets.

For the year, the Automotive segment's revenues increased 2%, while income increased 11%, resulting in a 60 basis point expansion to the operating margin. These results were achieved despite North American automotive OEM production decreases in the fourth quarter 2000, an unfavorable impact from foreign exchange, the higher petroleum-based resin prices, customer price reductions and higher engineering and design expense. Revenues increased due to the contribution from the acquisitions, primarily Plascar and the Textron Automotive Italia, S.r.l. (formerly referred to as Textron Breed Automotive S.r.l.), major new program launches and increased sales volume at Kautex. Income increased due to improved operating performance at Trim and Kautex, the contribution from acquisitions.

Fastening Systems

For the fourth quarter, the Fastening Systems segment's revenues decreased 9%, while income was unchanged. Revenues decreased, primarily due to North American automotive OEM production decreases, the unfavorable impact of foreign exchange in its European operations, lower volume in the heavy truck industry and customer price reductions. This decrease in revenues was partially offset by the benefit from acquisitions, primarily InteSys Technologies. Despite the lower sales, income was the same as a result of improved operating performance at Commercial Solutions and Automotive Solutions.

For the year, the Fastening Systems segment's revenues increased 3%, while income decreased 4%. Revenues increased due to the contribution from acquisitions, primarily InteSys Technologies and Flexalloy. This increase in revenues was partially offset by the unfavorable impact of foreign exchange in its European operations, lower volume in the heavy truck industry and customer price reductions. Income decreased as improved operating performance at Commercial Solutions and Automotive Solutions and the benefit from acquisitions were offset by the unfavorable impact of customer price reductions, foreign exchange and lower volume in the heavy truck industry.

Industrial Products

For the fourth quarter, the Industrial Products segment's revenues and income both increased 6%. Revenues increased as a result of the contribution from acquisitions and higher organic sales at Golf and Turf, Greenlee and Textron Marine and Land Systems. This increase in revenues was partially offset by lower demand at OmniQuip and Power Transmission Products. Income increased primarily as a result of higher sales at Greenlee, and improved operating performance at Fluid Handling Products, Motion Control Products and Textron Systems, higher income related to retirement benefits and a gain on the sale of fixed assets. This increase in income was partially offset by lower sales and unfavorable operating performance at OmniQuip, Turbine Engine Components, and unfavorable operating performance at Golf and Turf.

For the year, the Industrial Products segment's revenues and income increased 22% and 14%, respectively. Revenues increased as a result of the contribution from acquisitions, primarily OmniQuip, and higher organic sales at Golf and Turf, Textron Marine and Land Systems, Greenlee, Motion Control Products and Textron Lycoming. This increase in revenues was partially offset by lower revenues at Textron Systems due to a change in contract mix, and lower demand at Power Transmission Products, Fluid Handling Products and Turbine Engine Components. Income increased primarily as a result of improved margins at Motion Control Products and Textron Systems, the contribution from acquisitions, higher income related to retirement benefits. This increase in income was partially offset by lower margins at OmniQuip, Turbine Engine Components and Fluid Handling Products.

Finance

For the quarter, the Finance segment's revenues increased 31% due to a higher level of average receivables, a higher yield on receivables, and higher syndication and securitization income. Income increased 65% as the benefit of the higher revenues was partially offset by higher expenses related to the growth in managed receivables.

For the year, the Finance segment's revenues increased 49% due to a higher level of average receivables, reflecting a balance of both acquisitive and organic growth, a higher yield on receivables, and higher syndication and securitization income. Income increased 48% as the benefit of the higher revenues was partially offset by higher expenses related to managed receivables and a higher provision for loan losses.

Corporate Expenses and Other

For the quarter, corporate expenses and other increased $10 million due primarily to the impact of organizational changes and costs associated with e-business initiatives, partially offset by higher income related to retirement benefits.

For the year, corporate expenses and other increased $21 million due primarily to the impact of organizational changes in the first and fourth quarters and costs associated with strategic and e-business initiatives in 2000, partially offset by higher income related to retirement benefits.

Interest Income and Expense

For the quarter, Interest expense for Textron manufacturing increased $13 million from the fourth quarter 1999, due to the re-leveraging that occurred following the divestiture of Avco Financial Services (AFS). Interest income of $6 million in the fourth quarter reflects interest related to the settlement of a note receivable.

For the year, Interest expense for Textron manufacturing increased $102 million from 1999, due to the re-leveraging that occurred following the divestiture of AFS.

Income Taxes

For the quarter, the income tax rate was impacted by the non-tax deductibility of goodwill written-off in the quarter. Excluding the tax impact of the special charges, the tax rate was 34.1% compared to 36.8% in the fourth quarter 1999. This reduction is due to a change in the annual effective tax rate from 36.0% as of the third quarter to 35.5%.

For the year, the effective income tax rate for 2000 was impacted by the non-tax deductibility of goodwill written off in the fourth quarter. Excluding the tax impact of the special charges, the effective tax rate for 2000 was 35.5% compared to 37.0% in 1999. This reduction is primarily due to the benefit of tax planning initiatives being realized in 2000.

                             TEXTRON INC.
                REVENUES AND INCOME BY BUSINESS SEGMENT
                        FOURTH QUARTER AND YEAR
                (In millions except per share amounts)


                        Fourth Quarter                  Year
               December 30,   January 1,    December 30,   January 1,
                  2000          2000           2000          2000

REVENUES

MANUFACTURING:
 Aircraft(a)   $      1,251  $      1,267  $      4,394  $      4,019
 Automotive(b)          671           747         2,924         2,868
 Fastening
  Systems(b)            487           535         2,137         2,082
 Industrial
  Products(b)           718           678         2,944         2,422

                      3,127         3,227        12,399        11,391

FINANCE                 185           141           691           463

  Total
   revenues    $      3,312  $      3,368  $     13,090  $     11,854

INCOME

MANUFACTURING:
 Aircraft      $        139  $        129  $        451  $        362
 Automotive(b)           54            63           244           220
 Fastening
  Systems(b)             37            37           182           190
 Industrial
  Products(b)            83            78           343           301

                        313           307         1,220         1,073

FINANCE                  56            34           190           128

Segment income          369           341         1,410         1,201
Special
 (charges)
 credits(c)(d)         (483)         --            (483)            1
Corporate
 expenses and
 other -
 net(d)                 (43)          (33)         (164)         (143)
Interest
 income                   6             1             6            27
Interest
 expense                (42)          (29)         (158)          (56)

Income (loss)
 before income
 taxes         $       (193) $        280  $        611  $      1,030

Income taxes            (18)         (103)         (308)         (381)
Distribution
 on preferred
 securities of
 manufacturing
 subsidiary
 trust, net of
 income taxes            (7)           (7)          (26)          (26)

Income (loss)
 from
 continuing
 operations            (218)          170           277           623

Discontinued
 operation,
 net of income
 taxes(e)              --              31          --           1,646
Extraordinary
 loss on
 retirement of
 debt, net of
 income taxes          --            --            --             (43)
Cumulative
 effect of
 change in
 accounting
 principle,
 net of income
 taxes (f)             --            --             (59)         --

Net income
 (loss)        $       (218) $        201  $        218  $      2,226

Income from
 continuing
 operations
 before
 special
 charges       $        185  $        170  $        680  $        623

EPS from
 continuing
 operations
 before
 special
 charges
 - diluted     $       1.28  $       1.12  $       4.65  $       4.05

Average
 diluted
 shares
 outstanding    143,846,000   151,267,000   146,150,000   153,754,000


                             TEXTRON INC.
                          EARNINGS PER SHARE
                        FOURTH QUARTER AND YEAR
                (In millions except per share amounts)

                       Fourth Quarter                 Year
               December 30,   January 1,   December 30,   January 1,
                  2000          2000          2000          2000

Earnings per
 share (g):
Income (loss)
 from
 continuing
 operations    $      (1.53) $       1.12  $       1.90  $       4.05

Discontinued
 operation,
 net of income
 taxes (e)             --            0.21           --          10.70
Extraordinary
 loss on
 retirement of
 debt, net of
 income taxes          --             --            --          (0.27)
Cumulative
 effect of
 change in
 accounting
 principle,
 net of income
 taxes (f)             --             --          (0.41)          --

Net income
 (loss)        $      (1.53) $       1.33  $       1.49  $      14.48

Average
 diluted
 shares
 outstanding    143,846,000   151,267,000   146,150,000   153,754,000

Average shares
 outstanding(g) 141,969,000   151,267,000   146,150,000   153,754,000

(a) Effective in the fourth quarter 2000, Textron reclassified certain
items in its income statement and restated revenues and costs for
prior periods. A substantial portion of the reclassifications related
to the implementation of EITF 99-19 "Reporting Revenue Gross as a
Principal versus Net as an Agent", whereby used aircraft sales are now
reported as revenues versus previously they were netted against costs.
The result of the reclassifications was to increase revenue and cost
by $254 million and $275 million for 2000 and 1999, respectively ($69
and $135 million for the fourth quarter 2000 and 1999, respectively).
There was no effect on segment operating income or net income.

(b) Textron reorganized its management reporting structure into five
segments, separately reporting the financial results of Fastening
Systems and Industrial Products, which previously comprised the
Industrial segment. Additionally, management responsibility for one
division previously in the Automotive segment, has been transferred to
the Industrial Products segment. Prior periods have been restated to
reflect these changes

(c) The fourth quarter 2000 results include (a) a goodwill write-off
of $349 million, (b) a write-down of e-business investments of $117
million, and (c ) accruable restructuring expense of $16 million and
asset impairment write-downs of $1 million associated with closing and
consolidating manufacturing facilities in the Automotive and
Industrial Products segments.

(d) The 1999 results reflected a gain of $19 million as a result of
shares granted to Textron from Manulife Financial Corp.'s initial
public offering on their demutualization of Manufacturers Life
Insurance Company. This benefit was offset by restructuring reserves
for Industrial Products ($11 million) and Fastening Systems ($7
million), and a contribution of Manulife shares to the Textron
Charitable Trust ($3 million), which is reflected in Corporate
expenses and other - net.

(e) A gain of $1.615 billion on the sale of Avco Financial Services,
Inc. (AFS) which was sold to Associates First Capital Corporation on
January 6, 1999 was recorded in the Q1 1999 results. In Q4 1999, the
gain on the sale of AFS was increased by $31 million as a result of
finalizing all activities associated with the sale.

(f) In January 2000, Textron adopted the Emerging Issues Task Force
consensus EITF 99-5 which requires certain pre-production engineering
costs to be expensed as incurred. Textron recorded the cumulative
effect of this accounting change in January, 2000.

(g) The average share base for the fourth quarter excludes potentially
dilutive common shares (convertible preferred stock and stock
options). These shares are excluded due to their antidilutive effect
resulting from the fourth quarter 2000 loss from continuing
operations.