E-Z-GO 2003 Annual Report Download - page 63

Download and view the complete annual report

Please find page 63 of the 2003 E-Z-GO annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 76

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76

61
Textron files a consolidated federal income tax return for all U.S. subsidiaries and separate returns for
foreign subsidiaries. Income from continuing operations before income taxes and distributions on pre-
ferred securities of subsidiary trusts is as follows:
(In millions) 2002 2001
United States $ 240 $ 469 $ 816
Foreign 161 97 (32)
Total $ 401 $ 566 $ 784
Income tax expense for continuing operations is summarized as follows:
(In millions) 2002 2001
Federal:
Current $ 34 $ 53 $ 152
Deferred 9 80 90
State 15 15 25
Foreign 49 25 17
Income tax expense $ 107 $ 173 $ 284
The following reconciles the federal statutory income tax rate to the effective income tax rate reflected in
the consolidated statements of operations:
2002 2001
Federal statutory income tax rate 35.0% 35.0% 35.0%
Increase (decrease) in taxes resulting from:
State income taxes 2.4 1.8 1.4
Goodwill — — 2.9
Permanent items from Trim divestiture — 1.3 1.4
Favorable tax settlements (3.2) (2.2) —
ESOP dividends (2.3) (3.2) —
Foreign tax rate differential (1.6) (0.2) (0.5)
Export sales benefit (1.4) (1.5) (1.5)
Other, net (2.2) (0.4) (2.5)
Effective income tax rate 26.7% 30.6% 36.2%
The tax effects of temporary differences that give rise to significant portions of Textron’s net deferred tax
assets and liabilities were as follows:
December 28,
(In millions) 2002
Deferred tax assets:
Warranty and product maintenance reserves $ 110 $ 102
Self-insured liabilities, including environmental 91 91
Deferred compensation 156 139
Obligation for postretirement benefits 31 57
Investment securities 20 24
Allowance for credit losses 77 50
Amortization of goodwill and other intangibles 47 55
Non-U.S. net operating loss carryforwards 53 45
Other, principally timing of other expense deductions 54 66
Total deferred tax assets 639 629
Valuation allowance for deferred tax assets (75) (69)
$564 $560
Deferred tax liabilities:
Textron Finance transactions, principally leasing $ (412) $ (390)
Property, plant and equipment, principally depreciation (111) (126)
Inventory (24) (38)
Currency translation adjustment (6) (21)
Total deferred tax liabilities (553) (575)
Net deferred tax asset (liability) $ 11 $ (15)