E-Z-GO 2009 Annual Report Download - page 22

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Due to the nature of our business, we may be subject to liability claims arising from accidents involving our products, including claims for
serious personal injuries or death caused by climatic factors or by pilot or driver error. In the case of litigation matters for which reserves have not
been established because the loss is not deemed probable, it is reasonably possible that such matters could be decided against us and could
require us to pay damages or make other expenditures in amounts that are not presently estimable. In addition, we cannot be certain that our
reserves are adequate and that our insurance coverage will be sufficient to cover one or more substantial claims. Furthermore, there can be no
assurance that we will be able to obtain insurance coverage at acceptable levels and costs in the future.
The increasing costs of certain employee and retiree benefits could adversely affect our results.
Our earnings and cash flow may be impacted by the amount of income or expense we expend or record for employee benefit plans. This is
particularly true for our defined benefit pension plans, where the contributions to those plans are driven by, among other things, our assumptions
of the rate of return on plan assets, the discount rate used for future payment obligations and the rates of future cost growth. If the actual
investment return and rates prove materially different from our assumptions, this could adversely impact the amount of pension expense and
require larger contributions to the plans. Also, changing pension legislation and regulations could increase the cost associated with our defined
benefit pension plans. In addition, medical costs are rising at a rate faster than the general inflation rate. Continued medical cost inflation in
excess of the general inflation rate increases the risk that we will not be able to mitigate the rising costs of medical benefits. Increases to the costs
of pension and medical benefits could have an adverse effect on our financial results of operations.
Unanticipated changes in our tax rates or exposure to additional income tax liabilities could affect our profitability.
We are subject to income taxes in both the U.S. and various non-U.S. jurisdictions, and our domestic and international tax liabilities are subject
to the allocation of income among these different jurisdictions. Our effective tax rate 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, changes to unrecognized tax benefits
or changes in tax laws, which could affect our profitability. 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 profitability.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
On January 2, 2010, we operated a total of 66 plants located throughout the U.S. and 44 plants outside the U.S. We own 55 plants and lease the
remainder for a total manufacturing space of approximately 19.8 million square feet.
We also own or lease offices, warehouses 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
On August 13, 2009, a purported shareholder class action lawsuit was filed in the United States District Court in Rhode Island against Textron, its
Chairman and former Chief Executive Officer and its former Chief Financial Officer. The suit, filed by the City of Roseville Employees’ Retirement
System, alleges that the defendants violated the federal securities laws by making material misrepresentations or omissions related to Cessna and
Textron Financial Corporation. The complaint seeks unspecified compensatory damages. In December 2009, the Automotive Industries Pension
Trust Fund was appointed lead plaintiff in the case. On February 8, 2010, an amended class action complaint was filed with the Court. The
amended complaint names as additional defendants Textron Financial Corporation and three of its present and former officers.
On August 21, 2009, a purported class action lawsuit was filed in the United States District Court in Rhode Island by Dianne Leach, an alleged
participant in the Textron Savings Plan. Six additional substantially similar class action lawsuits were subsequently filed by other individuals. The
complaints varyingly name Textron and certain present and former employees, officers and directors as defendants. These lawsuits allege that the
Textron Inc.