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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per-share data and unless otherwise indicated)
60
The following table shows finance receivables and related secured debt as of December 31, 2005 and 2004:
December 31, 2005 December 31, 2004
Maximum
Facility Facility Finance Secured Finance Secured
(in millions, unless otherwise indicated) Amount Amount(1) Receivables Debt Receivables Debt
Finance Receivables Encumbered by Loans:
GE secured loans:
GE Loans – U.S. $5 billion $8 billion $ 1,888 $ 1,701 $ 2,711 $ 2,486
GE Loans – U.K. £400 million £600 million 637 581 771 685
(U.S. $690) (U.S. $1.0 billion)
GE Loans – Canada Cdn. $850 million Cdn. $2 billion
(U.S. $730) (U.S. $1.7 billion) 258 174 486 426
Total GE Encumbered
finance receivables, net 2,783 2,456 3,968 3,597
Merrill Lynch Loan – France €420 million €420 million 430 342 368 287
(U.S. $497) (U.S. $497)
Asset-backed notes – France N/A N/A – – 225 148
DLL – Netherlands N/A N/A 216 184 436 404
Total Encumbered finance receivables, net 3,429 $ 2,982 4,997 $ 4,436
Unencumbered finance receivables, net 4,420 3,500
Total Finance receivables, net (2) $7,849 $8,497
(1) Subject to mutual agreement by the parties.
(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 Consolidated Balance
Sheets as of December 31, 2005 and 2004.
Accounts Receivable Funding Arrangement: In 2004, we
completed a transaction with GE for a three-year $400 revolving
credit facility secured by our U.S. accounts receivable. This
arrangement is being accounted for as a secured borrowing
within our Consolidated Balance Sheets. Secured accounts
receivables and related debt associated with this arrangement
as of December 31, 2005 and 2004 were as follows (in millions):
2005 2004
Secured accounts receivable, net $313 $354
Secured debt $178 $200
As of December 31, 2005, $3,429 of Finance receivables,
net are held as collateral in various entities, as security for the
borrowings noted above. Total outstanding debt secured by
these receivables at December 31, 2005 was $2,982. The
entities are consolidated in our financial statements. Although
the transferred assets areincluded in our total assets, the
assets of the entities are not available to satisfy any of our other
obligations. We also have arrangements in Germany, Italy, the
Nordic countries, Brazil and Mexico in which third-party financial
institutions originate lease contracts directly with our customers.
In these transactions, we sell and transfer title of the equipment
to these financial institutions and have no continuing ownership
rights in the leased equipment subsequent to its sale.
Xerox Annual Report 2005