Xerox 2004 Annual Report Download - page 54

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52
The following table shows finance receivables
and related secured debt as of December 31, 2004
and 2003:
December 31, 2004 December 31, 2003
Finance Finance
Receivables, Secured Receivables, Secured
Net Debt Net Debt
GE secured loans:
United States $2,711 $2,486 $2,939 $2,598
Canada 486 426 528 440
United Kingdom 771 685 719 570
Germany — — 114 84
Total GE encumbered finance receivables, net 3,968 3,597 4,300 3,692
Merrill Lynch Loan – France 368 287 138 92
Asset-backed notes – France 225 148 429 364
DLL – Netherlands, Spain, and Belgium (1) 436 404 335 277
Total encumbered finance receivables, net 4,997 $4,436 5,202 $4,425
Unencumbered finance receivables, net 3,500 3,611
Total finance receivables, net (2) $8,497 $8,813
(1)These represent the loans received by our consolidated joint venture with DLL. De Lage Landen Ireland Company is the lender of record.
(2) Includes (i) Billed portion of finance receivables, net (ii) Finance receivables, net and (iii) Finance receivables due after one year,net as included in the
condensed consolidated balance sheets as of December 31, 2004 and 2003.
As of December 31, 2004, $4,997 of Finance receiv-
ables, net are held as collateral in various entities, as
security for the borrowings noted above. Total outstand-
ing debt secured by these receivables at December 31,
2004 was $4,436. The entities are consolidated in our
financial statements. Although the transferred assets
are included in our total assets, the assets of the entities
are not available to satisfy any of our other obligations.
We also have arrangements in Italy, The Nordic
countries, Brazil and Mexico in which third party
financial institutions originate lease contracts directly
with our customers. In these transactions, wesell and
transfer title to the equipment to these financial insti-
tutions and haveno continuing ownership rights in
the leased equipment subsequent to its sale.
Accounts Receivable Funding Arrangement: In
June 2004, wecompleted a transaction with GEfor a
three-year $400 revolving credit facility secured by
our U.S.accounts receivable. As of December 31, 2004,
approximately $200 was drawn, secured by$354 of
our accounts receivable. This arrangement is being
accounted for as a secured borrowing in our
Consolidated Balance Sheets.
Note 4 – Inventories and Equipment
on Operating Leases, Net
The components of inventories at December 31, 2004
and 2003 were as follows:
20042003
Finished goods $900 $911
Work in process 69 74
Raw materials 174 167
Total inventories $1,143 $1,152
Equipment on operating leases and similar
arrangements consists of our equipment rented to cus-
tomers and depreciated to estimated salvage value at
the end of the lease term. The transfer of equipment
on operating leases from our inventories is presented
in our Consolidated Statements of Cash Flowsin the
operating activities section as a non-cash adjustment.
Equipment on operating leases and the related accu-
mulated depreciation at December 31, 2004and 2003
were as follows:
20042003
Equipment on operating leases $ 1,649 $ 1,795
Less: Accumulated depreciation (1,251) (1,431)
Equipment on operating leases, net $ 398 $364