E-Z-GO 2004 Annual Report Download - page 83

62
Notes to Consolidated Financial Statements
At January 1, 2005 and January 3, 2004, Textron had non-U.S. net operating loss carryforwards for income tax purposes of $165
million and $162 million, respectively, of which $148 million and $140 million, respectively, can be carried forward indefinitely.
The balance expires at various dates through 2013. At January 1, 2005, Textron had U.S. federal net operating loss carryforwards
for income tax purposes of $64 million that expire in 2025.
A valuation allowance at January 1, 2005 and January 3, 2004 of $155 million and $74 million, respectively, has been recognized
to offset the related deferred tax assets due to the uncertainty of realizing the benefits of the deferred tax assets. The increase in the
valuation allowance was primarily related to deferred tax assets resulting from minimum pension liability adjustments recorded in
other comprehensive (loss) income in certain foreign jurisdictions.
The undistributed earnings of Textron’s foreign subsidiaries on which tax is not provided, which approximated $910 million at the
end of 2004, are considered to be indefinitely reinvested. If the earnings of foreign subsidiaries were distributed, taxes, net of for-
eign tax credits, would be increased by approximately $219 million in 2004.
On October 22, 2004, the American Jobs Creation Act (“AJCA”) was signed into law and includes a deduction of 85% of certain
foreign earnings that are repatriated, as defined in the AJCA. Textron intends to repatriate approximately $200 million in non-U.S.
cash and has recognized a related tax expense of $11 million in the fourth quarter of 2004. Textron is continuing to evaluate the
effects of the AJCA and expects to complete this evaluation in 2005. It is possible that Textron may repatriate an additional amount
within the range of zero to $200 million in 2005, resulting in an income tax expense within the range of zero to $11 million.
Cash payments for taxes, net of tax refunds received, for Textron Manufacturing including discontinued operations totaled $(32)
million in 2004, $(158) million in 2003 and $42 million in 2002. Cash payments for taxes, net of tax refunds, for Textron Finance
totaled $61 million in 2004, $(6) million in 2003 and $(31) million in 2002.
Note 14 Special Charges
Special charges are summarized below for the applicable segments:
Restructuring Expense
Other Total
Severance Contract Fixed Asset Associated Other Special
(In millions) Costs Terminations Impairments Costs Total Charges Charges
2004
Bell $ — $ — $ (1) $ — $ (1) $ — $ (1)
Cessna ———————
Fastening Systems 37 7 9 19 72 — 72
Industrial 28 37 1 6 72 — 72
Finance ———————
Corporate —————(12) (12)
$ 65 $ 44 $ 9 $ 25 $ 143 $ (12) $ 131
2003
Bell $ 2 $ — $ — $ — $ 2 $ — $ 2
Cessna 8 — 1 — 9 — 9
Fastening Systems 34 — 34 7 75 — 75
Industrial 17 2 10 13 42 — 42
Finance 4 — 2 — 6 — 6
Corporate 3 — — — 3 15 18
$68 $ 2 $47 $20 $137 $15 $152
2002
Bell $ 4 $ — $1$1$6$—$6
Cessna 23 — 2 4 29 — 29
Fastening Systems 12 2 4 4 22 — 22
Industrial 14 2 6 13 35 — 35
Finance ———————
Corporate 1 — — — 1 38 39
$54 $ 4 $13 $22 $93 $38 $131