E-Z-GO 2002 Annual Report Download - page 36

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation - Tran-
sition and Disclosure” which amended SFAS No. 123, “Accounting for Stock-Based Compensation”.
This Statement provides alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based compensation. It also amends the disclosure provisions to
require prominent disclosure about the effects on reported net income of an entity’s accounting policy
decisions with respect to stock-based employee compensation. The provisions of this Statement are to
be applied to financial statements for fiscal years ending after December 15, 2002. As permitted by the
Statement, Textron does not plan to adopt the fair value recognition provisions at this time. Textron has
adopted the disclosure provisions of this Statement as of December 28, 2002.
In January 2003, the FASB issued Interpretation No. 46 “Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51” (FIN 46). FIN 46 requires certain variable interest entities to be consolidat-
ed by the primary beneficiary of the entity if the equity investors in the entity do not have the characteris-
tics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other parties. FIN 46 is effective for all
new variable interest entities created or acquired after January 31, 2003. For variable interest entities
created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first inter-
im or annual period beginning after June 15, 2003. Management is currently evaluating the impact of the
adoption of FIN 46 and does not anticipate that it will have a material effect on Textron’s results of opera-
tions or financial position.
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Forward-looking Information: Certain statements in this Annual Report and other oral and written state-
ments made by Textron from time to time are forward-looking statements, including those that discuss
strategies, goals, outlook or other non-historical matters; or project revenues, income, returns or other
financial measures. These forward-looking statements are subject to risks and uncertainties that may
cause actual results to differ materially from those contained in the statements, including the following:
(a) the extent to which Textron is able to achieve savings from its restructuring plans, (b) uncertainty in
estimating the amount and timing of restructuring charges and related costs, (c) changes in worldwide
economic and political conditions that impact interest and foreign exchange rates, (d) the occurrence of
work stoppages and strikes at key facilities of Textron or Textron’s customers or suppliers, (e) govern-
ment funding and program approvals affecting products being developed or sold under government
programs, (f) cost and delivery performance under various program and development contracts, (g) the
adequacy of cost estimates for various customer care programs including servicing warranties, (h) the
ability to control costs and successful implementation of various cost reduction programs, (i) the timing
of certifications of new aircraft products, (j) the occurrence of further downturns in customer markets to
which Textron products are sold or supplied or where Textron Financial offers financing, (k) Textron’s
ability to offset, through cost reductions, raw material price increases and pricing pressure brought by
original equipment manufacturer customers, (l) the availability and cost of insurance, (m) pension plan
income falling below current forecasts, (n) Textron Financial’s ability to maintain portfolio credit quality,
(o) Textron Financial’s access to debt financing at competitive rates; and (p) uncertainty in estimating
contingent liabilities and establishing reserves tailored to address such contingencies.
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