E-Z-GO 2005 Annual Report Download - page 54

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34
2005 2004
Sensitivity of Sensitivity of
Fair Value Fair Value
Carrying Fair to a 10% Carrying Fair to a 10%
(In millions)
Value* Value* change Value* Value* change
Interest rate risk
Textron Manufacturing:
Debt $ (1,934) $ (2,012) $ (36) $ (1,770) $ (1,881) $ (34)
Interest rate exchanges (10) (10) 3 (2) (2) 4
Textron Finance:
Finance receivables 5,589 5,515 32 4,793 4,747 42
Interest rate exchanges – receivables 8 8 3 12 12 4
Debt (5,420) (5,423) (92) (4,783) (4,864) (66)
Interest rate exchanges – debt (47) (47) 32 3 3 10
Foreign exchange rate risk
Textron Manufacturing:
Debt (932) (974) (97) (758) (796) (80)
Foreign currency exchange contracts 23 23 56 34 34 36
Equity price risk
Textron Manufacturing:
Marketable security price forward contracts 10 10 (13) 31 31 (14)
* Asset or (liability)
Forward-Looking Information
Certain statements in this Annual Report on Form 10-K and other oral and written statements made by Textron from time to time are forward-look-
ing 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 speak only as of the date on which they are made, and we undertake no obligation to
update or revise any forward-looking statements. 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) changes in worldwide economic and political con-
ditions that impact interest and foreign exchange rates; (b) the interruption of production at Textron facilities or Textron’s customers or suppliers;
(c) Textron’s ability to perform as anticipated and to control costs under contracts with the U.S. Government; (d) the U.S. Government’s ability to
unilaterally modify or terminate its contracts with Textron for the U.S. Government’s convenience or for Textron’s failure to perform, to change
applicable procurement and accounting policies and, under certain circumstances, to suspend or debar Textron as a contractor eligible to receive
future contract awards; (e) changes in national or international funding priorities and government policies on the export and import of military and
commercial products; (f) the adequacy of cost estimates for various customer care programs, including servicing warranties; (g) the ability to
control costs and successful implementation of various cost reduction programs; (h) the timing of certifications of new aircraft products; (i) the
occurrence of slowdowns or downturns in customer markets in which Textron products are sold or supplied or where Textron Financial offers
financing; (j) changes in aircraft delivery schedules or cancellation of orders; (k) the impact of changes in tax legislation; (l) the extent to which
Textron is able to pass raw material price increases through to customers or offset such price increases by reducing other costs; (m) Textron’s
ability to offset, through cost reductions, pricing pressure brought by original equipment manufacturer customers; (n) Textron’s ability to realize
full value of receivables and investments in securities; (o) the availability and cost of insurance; (p) increases in pension expenses related to lower
than expected asset performance or changes in discount rates; (q) Textron Financial’s ability to maintain portfolio credit quality; (r) Textron Finan-
cial’s access to debt financing at competitive rates; (s) uncertainty in estimating contingent liabilities and establishing reserves to address such
contingencies; (t) performance of acquisitions; (u) the efficacy of research and development investments to develop new products; (v) bankruptcy
or other financial problems at major suppliers or customers that could cause disruptions in Textron’s supply chain or difficulty in collecting
amounts owed by such customers; and (w) Textron’s ability to execute planned dispositions.
Textron Inc.