E-Z-GO 2005 Annual Report Download - page 27

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7
Item 1. Business of Textron
tems; Textron Financial Corporation; Textron Fluid & Power; Textron Marine & Land Systems; Textron Six Sigma; Textron Systems; Turbo 182
Skylane; UH-1Y; US Helicopter; V-22 Osprey; Vector; and Vector Jetcard. These marks 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 infor-
mation regarding environmental matters is contained in Note 17 to the Consolidated Financial Statements on page 71 of this Annual Report on
Form 10-K.
Employees
At December 31, 2005, we had approximately 37,000 employees in our continuing operations and approximately 9,000 employees in the discon-
tinued operations of our Textron Fastening Systems business.
Available Information
We make available free of charge on our Internet website (http://www.textron.com) our Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange
Commission.
Item 1A. Risk Factors
Our business, financial condition and results of operations are subject to various risks, including those discussed below, which may affect the
value of our securities. The risks discussed below are those that we believe are currently the most significant, although additional risks not
presently known to us or that we currently deem less significant may also impact our business, financial condition and results of operations,
perhaps materially.
We may be unable to effectively mitigate pricing pressures.
In some markets, particularly where we deliver component products and services to original equipment manufacturers, we face ongoing customer
demands for price reductions, which are sometimes contractually obligated. In some cases, we are able to offset these reductions through techno-
logical advances or by lowering our cost base through improved operating and supply chain efficiencies. However, if we are unable to effectively
mitigate future pricing pressures, our financial results of operations could be adversely affected.
Delays in aircraft delivery schedules or cancellation of orders may adversely affect our financial results.
Aircraft customers, including sellers of fractional share interests, may respond to weak economic conditions by delaying delivery of orders or
canceling orders. Weakness in the economy may also result in fewer hours flown on existing aircraft and, consequently, lower demand for spare
parts and maintenance. Weak economic conditions may also cause reduced demand for used business jets. We may accept used aircraft on trade-
in that would be subject to fluctuations in the fair market value of the aircraft while in inventory. Reduced demand for new and used business jets,
spare parts and maintenance can have an adverse effect on our financial results of operations.
Developing new products and technologies entails significant risks and uncertainties.
Delays or cost overruns in the development and acceptance of new products, or certification of new aircraft products and other products, could
affect our financial results of operations. These delays could be caused by unanticipated technological hurdles, production changes to meet cus-
tomer demands, coordination with joint venture partners or failure on the part of our suppliers to deliver components as agreed. We also could be
adversely affected if the general efficacy of our research and development investments to develop products is less than expected.
We have customer concentration with the U.S. Government.
During 2005, we derived approximately 18% of our revenue from sales to a variety of U.S. Government entities. Our ability to compete success-
fully for and retain this business is highly dependent on technical excellence, management proficiency, strategic alliances, cost-effective perfor-
mance and the ability to recruit and retain key personnel. U.S. Government programs are subject to uncertain future funding levels, which can