E-Z-GO 1998 Annual Report Download - page 47

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Long-term contract receivables at year-end 1998 and year-end 1997 totaled $166 million
and $146 million, respectively. This includes $102 million and $111 million, respectively, of
unbilled costs and accrued profits that had not yet met the contractual billing criteria.
Long-term contract receivables do not include significant amounts (a) billed but unpaid
due to contractual retainage provisions or (b) subject to collection uncertainty.
6. The cost of property, plant, and equipment is depreciated based on the assets’ estimated
useful lives.
January 2, January 3,
(In millions)
1999 1998
At cost:
Land and buildings $ 942 $ 808
Machinery and equipment 3,150 2,647
4,092 3,455
Less accumulated depreciation 1,887 1,685
$2,205 $1,770
Goodwill is amortized on the straight-line method over 20 to 40 years. Accumulated
amortization of goodwill totaled $388 million at January 2, 1999 and $329 million at
January 3, 1998.
Goodwill is periodically reviewed for impairment by comparing the carrying
amount to the estimated future undiscounted cash flows of the businesses acquired. If
this review indicates that goodwill is not recoverable, the carrying amount would be
reduced to fair value.
Customer engineering and tooling project costs for which customer reimbursement is
anticipated are capitalized and classified in other assets.
7. At the end of 1998 and 1997, debt consisted of the following:
January 2, January 3,
(In millions)
1999 1998
Textron Manufacturing:
Short-term debt:
Borrowings under or supported by long-term credit facilities* $1,671 $ 375
Current portion of long-term debt 64 101
Total short-term debt 1,735 476
Long-term senior debt:
Medium-term notes due 1999-2011 (average rate – 9.54%) 230 230
8.75% due 2022 200 200
6.63% due 2007 200 200
Other long-term debt (average rate 7.53%) 314 216
944 846
Current portion of long-term debt (64) (101)
Total long-term debt 880 745
Total Textron Manufacturing 2,615 1,221
Textron Finance:
Senior:
Borrowings under or supported by credit facilities** 1,425 1,074
6.76% average rate debt; due 1999 to 2001 472 392
5.79% average rate variable notes; due 1999 to 2001 932 899
Total Textron Finance 2,829 2,365
Total debt $5,444 $3,586
*The weighted average interest rates on these borrowings, before the effect of interest rate exchange agreements, were 5.8%,
4.8%, and 5.0% at year-end 1998, 1997, and 1996, respectively. Comparable rates during the years 1998, 1997, and 1996 were
5.4%, 4.8%, and 5.0%, respectively.
**The weighted average interest rates on these borrowings, before the effect of interest rate exchange agreements, were 6.3%,
6.1%, and 5.7% at year-end 1998, 1997, and 1996, respectively. Comparable rates during the years 1998, 1997, and 1996 were
5.8%, 5.8%, 5.7%, respectively.
Debt and
Credit Facilities
Long-term
Assets
1998 TEXTRON ANNUAL REPORT 43