E-Z-GO 2011 Annual Report Download - page 26

foreign currency rates could adversely affect our profitability in future periods. We monitor and manage these exposures as an
integral part of our overall risk management program. In some cases, we purchase derivatives or enter into contracts to insulate our
financial results of operations from these fluctuations. Nevertheless, changes in currency exchange rates, raw material prices and
interest rates can have substantial adverse effects on our financial results of operations.
We may be unable to effectively mitigate pricing pressures.
In some markets, particularly where we deliver component products and services to original equipment manufacturers, we face
ongoing customer demands for price reductions, which sometimes are contractually obligated. However, if we are unable to
effectively mitigate future pricing pressures through technological advances or by lowering our cost base through improved
operating and supply chain efficiencies, our financial results of operations could be adversely affected.
The levels of our reserves are subject to many uncertainties and may not be adequate to cover write-downs or losses.
We establish reserves to cover uncollectable finance receivables and accounts receivable, excess or obsolete inventory, fair market
value write-downs on used aircraft and golf cars, recall campaigns, environmental remediation, warranty costs and litigation.
These reserves are subject to adjustment from time to time depending on actual experience and/or current market conditions and
are subject to many uncertainties, including bankruptcy or other financial problems at key customers, as well as changing market
conditions.
Due to the nature of our manufacturing 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, driver or user 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.
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, as well as
changes to applicable statutory tax rates. 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 December 31, 2011, we operated a total of 59 plants located throughout the U.S. and 48 plants outside the U.S. We own 55
plants and lease the remainder for a total manufacturing space of approximately 20.7 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 then
Chairman and former Chief Executive Officer and its former Chief Financial Officer. The suit, filed by the City of Roseville
Employees’ Retirement System, alleged that the defendants violated the federal securities laws by making material
misrepresentations or omissions related to Cessna and Textron Financial Corporation (TFC). The complaint sought 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 named 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,
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