E-Z-GO 2014 Annual Report Download - page 77

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Note 13. Contingencies and Commitments
We are subject to legal proceedings and other claims arising out of the conduct of our business, including proceedings and claims
relating to commercial and financial transactions; government contracts; alleged lack of compliance with applicable laws and
regulations; production partners; product liability; patent and trademark infringement; employment disputes; and environmental,
safety and health matters. Some of these legal proceedings and claims seek damages, fines or penalties in substantial amounts or
remediation of environmental contamination. As a government contractor, we are subject to audits, reviews and investigations to
determine whether our operations are being conducted in accordance with applicable regulatory requirements. 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.
In the ordinary course of business, we enter into standby letter of credit agreements and surety bonds with financial institutions to
meet various performance and other obligations. These outstanding letter of credit arrangements and surety bonds aggregated to
approximately $790 million and $298 million at January 3, 2015 and December 28, 2013, respectively.
Environmental Remediation
As with other industrial enterprises engaged in similar businesses, we are involved in a number of remedial actions under various
federal and state laws and regulations relating to the environment that impose liability on companies to clean up, or contribute to
the cost of cleaning up, sites on which hazardous wastes or materials were disposed or released. Our accrued environmental
liabilities relate to installation of remediation systems, disposal costs, U.S. Environmental Protection Agency oversight costs, legal
fees, and operating and maintenance costs for both currently and formerly owned or operated facilities. Circumstances that can
affect the reliability and precision of the accruals include the identification of additional sites, environmental regulations, level of
cleanup required, technologies available, number and financial condition of other contributors to remediation and the time period
over which remediation may occur. We believe that any changes to the accruals that may result from these factors and
uncertainties will not have a material effect on our financial position or results of operations.
Based upon information currently available, we estimate that our potential environmental liabilities are within the range of $40
million to $160 million. At January 3, 2015, environmental reserves of approximately $80 million have been established to address
these specific estimated liabilities. We estimate that we will likely pay our accrued environmental remediation liabilities over the
next ten years and have classified $24 million as current liabilities. Expenditures to evaluate and remediate contaminated sites
approximated $13 million, $12 million and $15 million in 2014, 2013 and 2012, respectively.
Leases
Rental expense approximated $121 million, $95 million and $97 million in 2014, 2013 and 2012, respectively. Future minimum
rental commitments for noncancelable operating leases in effect at January 3, 2015 approximated $73 million for 2015, $57
million for 2016, $47 million for 2017, $37 million for 2018, $31 million for 2019 and $193 million thereafter. The total future
minimum rental receipts under noncancelable subleases at January 3, 2015 approximated $23 million.
Note 14. Supplemental Cash Flow Information
We have made the following cash payments:
(In millions)
2014
2013
2012
Interest paid:
Manufacturing group
$ 134
$ 124
$ 135
Finance group
41
46
64
Net taxes paid /(received):
Manufacturing group
266
223
(7)
Finance group
23
(49)
43
Cash paid for interest by the Finance group included amounts paid to the Manufacturing group of $11 million in 2012. Cash paid
for interest by the Finance group to the Manufacturing group was not significant in 2014 and 2013.
71 Textron Inc. Annual Report • 2014