Xerox 2004 Annual Report Download - page 52

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50
Note 3 – Receivables, Net
Finance Receivables: Finance receivables result
from installment arrangements and sales-type leases
arising from the marketing of our equipment. These
receivables are typically collateralized by a security
interest in the underlying assets. The components of
Finance receivables, net at December 31, 2004 and
2003follow:
2004 2003
Gross receivables $10,267 $10,599
Unearned income (1,619) (1,651)
Unguaranteed residual values 125 180
Allowance for doubtful accounts (276) (315)
Finance receivables, net 8,497 8,813
Less: Billed portion of finance
receivables, net (377) (461)
Current portion of finance
receivables not billed, net (2,932) (2,981)
Amounts due after one year, net $ 5,188 $ 5,371
Contractual maturities of our gross finance
receivables subsequent to December 31, 2004 follow
(including those already billed of $377):
There-
2005 2006 2007 2008 2009 after Total
$4,045 $2,793 $1,921 $1,097 $377 $34 $10,267
Customer Financing Arrangements
GE Secured Borrowings: In 2002, we completed an
agreement (the “Loan Agreement”) under which GE
Vendor Financial Services, a subsidiary of GE, became
the primary equipment financing provider in the U.S.,
through monthly fundings of our new lease origina-
tions. In March 2003, this agreement was amended to
allow for the inclusion of state and local governmental
contracts in future fundings.
Under this agreement, GE funds a significant
portion of new U.S. lease originations at over-
collateralization rates, which vary over time, but are
expected to approximate 10 percent at the inception of
each funding. The secured loans are subject to interest
Geographic area data was as follows:
Revenues Long-Lived Assets
(1)
2004 2003 2002 2004 2003 2002
United States $ 8,346 $ 8,547 $ 9,096 $1,427 $ 1,477 $1,524
Europe 5,281 4,863 4,425 585 616 718
Other Areas 2,095 2,291 2,328 434 460 379
Total $15,722 $15,701 $15,849 $2,446 $ 2,553 $ 2,621
(1) Long-lived assets are comprised of (i) land, buildings and equipment, net, (ii) equipment on operating leases, net, (iii) internal use software, net and (iv)
capitalized software costs, net.
The following is a reconciliation of segment profit
to total company pre-tax income:
Years ended December 31,
2004 2003 2002
Total segment profit $1,200 $ 988 $ 833
Unallocated items:
Restructuring and asset
impairment charges (86) (176) (670)
2002 credit facility fee write-off (1) —(73) —
Other unallocated expenses, net (2) 2(245) (5)
Allocated item:
Equity in net income of
unconsolidated affiliates (151) (58) (54)
Pre-tax income $965 $ 436 $ 104
(1) The $73 loss associated with extinguishment of debt on the 2002 Credit
Facility, previously reflected in Other segment profit (loss), has been
reclassified in the current year presentation.
(2) 2003 unallocated expenses include a $239 provision for litigation related
to the court approved settlement of the Berger v.RIGP litigation
discussed in Note 12.