E-Z-GO 2008 Annual Report Download - page 20

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Textron Inc.
Operation Enduring Freedom and the Global War on Terrorism; (g) changes in national or international funding priorities, U.S. and foreign
military budget constraints and determinations, and government policies on the export and import of military and commercial products; (h)
legislative or regulatory actions impacting our operations or demand for our products; (i) the ability to control costs and successful
implementation of various cost-reduction programs, including the enterprise-wide restructuring program; (j) the timing of new product launches
and certifications of new aircraft products; (k) the occurrence of slowdowns or downturns in customer markets in which our products are sold or
supplied or where Textron Financial Corporation (TFC) offers financing; (l) changes in aircraft delivery schedules, or cancellation or deferral of
orders; (m) the impact of changes in tax legislation; (n) the extent to which we are able to pass raw material price increases through to customers
or offset such price increases by reducing other costs; (o) our ability to offset, through cost reductions, pricing pressure brought by original
equipment manufacturer customers; (p) our ability to realize full value of receivables; (q) the availability and cost of insurance; (r) increases in
pension expenses and other postretirement employee costs; (s) TFC’s ability to maintain portfolio credit quality and certain minimum levels of
financial performance required under its committed credit facilities and under Textron’s support agreement with TFC; (t) TFC’s access to financing,
including securitizations, at competitive rates; (u) our ability to successfully exit from TFC’s commercial finance business, other than the captive
finance business, including effecting an orderly liquidation or sale of certain TFC portfolios and businesses; (v) uncertainty in estimating market
value of TFC’s receivables held for sale and reserves for TFC’s receivables to be retained; (w) uncertainty in estimating contingent liabilities and
establishing reserves to address such contingencies; (x) risks and uncertainties related to acquisitions and dispositions, including difficulties or
unanticipated expenses in connection with the consummation of acquisitions or dispositions, the disruption of current plans and operations, or
the failure to achieve anticipated synergies and opportunities; (y) the efficacy of research and development investments to develop new products;
(z) the launching of significant new products or programs which could result in unanticipated expenses; (aa) bankruptcy or other financial
problems at major suppliers or customers that could cause disruptions in our supply chain or difficulty in collecting amounts owed by such
customers; and (bb) continued volatility and further deterioration of the capital markets.
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 currently are the most significant, although additional risks not
presently known to us or that we currently deem less significant also may impact our business, financial condition or results of operations,
perhaps materially.
If the current economic uncertainty and capital market turbulence is prolonged, our planned liquidity actions may not be
sufficient to meet our liquidity needs.
We have a significant amount of term debt that matures in early 2010, and we are reliant upon our planned liquidity actions to repay these
obligations. If our plans to maximize cash flow in our Manufacturing businesses through realignment of production levels, cost reduction
activities and reduction of working capital, and our plans to liquidate non-captive finance receivables in our Finance segment, are not successful,
we may not generate enough cash to repay our obligations without obtaining additional financing. We no longer have access to a back-up credit
facility, and we may not be successful in obtaining additional financing on acceptable rates and terms, if at all. In such event, we may need to take
additional cost-cutting or other measures that could adversely impact our business and results of operations.
Measures we are taking to enhance our liquidity position in our Finance segment, including our plan to exit portions of
Textron Financial Corporation’s commercial finance business, may not work in the manner and within the timeframe that
we anticipate or at all.
We have announced a plan to exit all of the commercial finance business of our Finance segment, other than that portion of the business
supporting the financing of customer purchases of Textron-manufactured products. The exit plan will be effected through a combination of orderly
liquidation and selected sales. We cannot be certain that we will be able to accomplish the orderly liquidation or selected sales on a timely or
successful basis or in a manner that will enhance our liquidity position. We may encounter delays and difficulties in effecting an orderly
liquidation of our various receivable portfolios as a result of many factors, including the inability of our customers to find alternative financing,
which could expose us to increased credit losses, as well as existing contractual limitations. We may not be able to accomplish sales of the
receivables that have been designated for sale or transfer at the pricing that we anticipate or in the timeframe that we anticipate. We may be
required to make additional mark-to-market or other adjustments against assets that we intend to sell or to take additional reserves against assets
that we intend to retain. We may change our current strategy based on either our performance and liquidity position or changes in external factors