E-Z-GO 2009 Annual Report Download - page 94

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Textron Inc.
Warranty and Product Maintenance Contracts
We provide limited warranty and product maintenance programs, including parts and labor, for certain products for periods ranging from one to
five years. We estimate the costs that may be incurred under warranty programs and record a liability in the amount of such costs at the time
product revenue is recognized. Factors that affect this liability include the number of products sold, historical and anticipated rates of warranty
claims, and cost per claim. We assess the adequacy of our recorded warranty and product maintenance liabilities periodically and adjust the
amounts as necessary. Additionally, we may establish warranty liabilities related to the issuance of aircraft service bulletins for aircraft no longer
covered under the limited warranty programs.
Changes in our warranty and product maintenance liability are as follows:
(In millions) 2009 2008 2007
Accrual at beginning of year $ 278 $ 313 $ 308
Provision 174 189 188
Settlements (217) (194) (177)
Adjustments to prior accrual estimates* 28 (26) (15)
Acquisitions and related adjustments — (4) 9
Accrual at end of year $ 263 $ 278 $ 313
* Adjustments include changes to prior year estimates, new issues on prior year sales and currency translation adjustments.
Note 19. Supplemental Cash Flow and Other Information
Supplemental Cash Flow Information
We have made the following cash payments:
(In millions) 2009 2008 2007
Interest paid:
Manufacturing group $ 116 $ 139 $ 114
Finance group 171 310 388
Taxes paid, net of refunds received:
Manufacturing group 49 346 307
Finance group (75) 52 48
Discontinued operations 156 15 (75)
Cash paid for interest by the Manufacturing group includes amounts paid to our Finance group of $1 million and $2 million in 2008 and 2007,
respectively. Cash paid for interest by the Finance group includes amounts paid to the Manufacturing group of $3 million in both 2009 and 2008.
Accrued Liabilities
The accrued liabilities of our Manufacturing group are summarized below:
January 2, January 3,
(In millions) 2010 2009
Customer deposits $ 791 $ 992
Warranty and product maintenance contracts 263 278
Salaries, wages and employer taxes 244 300
Postretirement benefits other than pension 85 82
Deferred revenue 72 140
Forward contract on Textron Inc. stock — 98
Foreign exchange rate forward contracts, net 5 84
Other 567 635
Total accrued liabilities $ 2,027 $ 2,609
85