E-Z-GO 2010 Annual Report Download - page 26

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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
Not applicable.
Item 2. Properties
On January 1, 2011, we operated a total of 58 plants located throughout the U.S. and 45 plants outside the U.S. We own 53 plants
and lease the remainder for a total manufacturing space of approximately 19.5 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
As previously reported in Textron’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010, 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 TFC. 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 TFC and three of its present and former officers. On April 6,
2010, the court entered a stipulation agreed to by the parties in which plaintiffs voluntarily dismissed, without prejudice, certain causes
of action in the amended complaint. On April 9, 2010, all defendants moved to dismiss the remaining counts of the amended
complaint, and that motion is still pending.
As previously reported in Textron’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010, 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 defendants violated the United States Employee Retirement Income Security Act by imprudently permitting participants
in the Textron Savings Plan to invest in Textron common stock. The complaints seek equitable relief and unspecified compensatory
damages. On February 2, 2010, an amended class action complaint was filed consolidating the seven previous lawsuits into a single
complaint. On March 19, 2010, all defendants moved to dismiss the consolidated amended complaint, and that motion is still pending.
As previously reported in Textron’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010, on November 18, 2009, a
purported derivative lawsuit was filed by John D. Walker in the United States District Court of Rhode Island against certain present
and former officers and directors of Textron. The suit alleges violations of the federal securities laws consistent with the Roseville
action described above, as well as breach of fiduciary duties, waste of corporate assets and unjust enrichment. On February 16, 2010,
all defendants moved to dismiss the derivative complaint, and that motion is still pending.
Textron believes that these lawsuits are without merit and intends to defend them vigorously.
We also are subject to other actual and threatened legal proceedings and other claims arising out of the conduct of our business. These
proceedings include claims relating to commercial and financial transactions; government contracts; lack of compliance with
applicable laws and regulations; production partners; product liability; patent and trademark infringement; employment disputes; and
environmental, health and safety matters. Some of these legal proceedings seek damages, fines or penalties in substantial 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
information presently available, we do not believe that existing proceedings and claims will have a material effect on our financial
position or results of operations.