E-Z-GO 2007 Annual Report Download - page 32

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Textron Inc.
may adversely affect our fi nancial results of operations or damage our reputation and relationships with our customers. The risk of these adverse
effects may be greater in circumstances where we rely on only one or two subcontractors or suppliers for a particular product or service.
The increasing costs of certain employee and retiree benefi ts could adversely affect our results.
Our earnings and cash fl ow may be impacted by the amount of income or expense we expend or record for employee benefi t plans. This is
particularly true for our pension plans, which are dependent on actual plan asset returns and factors used to determine the value and current costs
of plan benefi t obligations.
In addition, medical costs are rising at a rate faster than the general infl ation rate. Continued medical cost infl ation in excess of the general
infl ation rate increases the risk that we will not be able to mitigate the rising costs of medical benefi ts. Increases to the costs of pension and
medical benefi ts could have an adverse effect on our fi nancial results of operations.
Unanticipated changes in our tax rates or exposure to additional income tax liabilities could affect our profi tability.
We are subject to income taxes in both the U.S. and various foreign jurisdictions, and our domestic and international tax liabilities are subject to
the allocation of income among these different jurisdictions. Our effective tax rates could be adversely affected by changes in the mix of earnings
in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities or changes in tax laws, which could
affect our profi tability. In particular, the carrying value of deferred tax assets is dependent on our ability to generate future taxable income. In
addition, the amount of income taxes we pay is subject to audits in various jurisdictions, and a material assessment by a tax authority could affect
our profi tability.
Item 1B. Unresolved Staff Comments
None
Item 2. Properties
On December 29, 2007, we operated a total of 77 plants located throughout the U.S. and 56 plants outside the U.S. We own 68 plants and lease
the remainder for a total manufacturing space of approximately 22.2 million square feet.
We also own or lease offi ces, warehouse and other space at various locations. We consider the productive capacity of the plants operated by each
of our business segments to be adequate. In general, our facilities are in good condition, are considered to be adequate for the uses to which they
are being put and are substantially in regular use.
Item 3. Legal Proceedings
We are subject to actual and threatened legal proceedings and other claims arising out of the conduct of our business. These proceedings include
claims relating to private transactions, government contracts, lack of compliance with applicable laws and regulations, production partners, prod-
uct liability, employment, and environmental, safety and health matters. Some of these legal proceedings seek damages, fi nes or penalties in sub-
stantial amounts or remediation of environmental contamination. Under federal government procurement regulations, certain claims brought by
the U.S. Government could result in our suspension or debarment from U.S. Government contracting for a period of time. On the basis of informa-
tion presently available, we do not believe that existing proceedings and claims will have a material effect on our fi nancial position or results of
operations.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of our security holders during the last quarter of the period covered by this Annual Report on Form 10-K.