E-Z-GO 2011 Annual Report Download - page 66

Income Taxes
Deferred income tax balances reflect the effects of temporary differences between the financial reporting carrying amounts of
assets and liabilities and their tax bases, as well as from net operating losses and tax credit carryforwards, and are stated at enacted
tax rates in effect for the year taxes are expected to be paid or recovered. Deferred income tax assets represent amounts available
to reduce income taxes payable on taxable income in future years. We evaluate the recoverability of these future tax deductions
and credits by assessing the adequacy of future expected taxable income from all sources, including the future reversal of existing
taxable temporary differences, taxable income in carryback years, available tax planning strategies and estimated future taxable
income. We recognize net tax-related interest and penalties for continuing operations in income tax expense.
Note 2. Discontinued Operations
In pursuing our business strategies, we have periodically divested certain non-core businesses. For several previously-disposed
businesses, we have retained certain assets and liabilities. All residual activity relating to our previously-disposed businesses that
meet the appropriate criteria are included in discontinued operations.
In connection with the 2008 sale of the Fluid & Power business unit, we received a six-year note with a face value of $28 million
and a five-year note with a face value of $30 million, which were both recorded in the Consolidated Balance Sheet net of a
valuation allowance. In the fourth quarter of 2011, we received full payment of both of these notes plus interest, resulting in a gain
of $52 million that was recorded in Other losses (gains), net.
On April 3, 2009, we sold HR Textron, an operating unit previously reported within the Textron Systems segment. In connection
with this sale, we recorded an after-tax gain of $8 million and net cash proceeds of approximately $376 million in 2009.
Note 3. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill by segment are as follows:
(In millions)
Cessna
Bell
Textron
Systems
Industrial
Total
Balance at January 3, 2009
$ 322
$ 30
$ 956
$ 390
$ 1,698
Impairment
—
—
—
(80)
(80)
Foreign currency translation
—
—
—
2
2
Other
—
—
2
—
2
Balance at January 2, 2010
322
30
958
312
1,622
Acquisitions
—
1
16
5
22
Foreign currency translation
—
—
—
(12)
(12)
Balance at January 1, 2011
322
31
974
305
1,632
Acquisitions
—
—
—
5
5
Foreign currency translation
—
—
—
(2)
(2)
Balance at December 31, 2011
$ 322
$ 31
$ 974
$ 308
$ 1,635
In 2010, we acquired four companies in the Bell, Textron Systems and Industrial segments for aggregate cost of $57 million and
recorded $22 million in goodwill and $14 million in intangible assets. In 2009, we recorded an $80 million impairment charge in
the Industrial segment’s Golf & Turf Care reporting unit based on lower forecasted revenues and profits related to the effects of
the economic recession.
Our intangible assets are summarized below:
December 31, 2011
January 1, 2011
(Dollars in millions)
Weighted-
Average
Amortization
Period (in years)
Gross
Carrying
Amount
Accumulated
Amortization
Net
Gross
Carrying
Amount
Accumulated
Amortization
Net
Customer agreements and
contractual relationships
15
$ 367
$ (149)
$ 218
$ 412
$ (115)
$ 297
Patents and technology
10
95
(59)
36
101
(53)
48
Trademarks
18
36
(19)
17
35
(16)
19
Other
8
22
(16)
6
22
(15)
7
$ 520
$ (243)
$ 277
$ 570
$ (199)
$ 371
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Textron Inc. Annual Report • 2011 55