E-Z-GO 1999 Annual Report Download - page 61

The following table summarizes the activity associated with 1998 and 1999 programs:
Asset Severance &
(In millions) impairments other Total
Initial charge $ 28 $ 49 $ 77
Utilized in 1998 (28) (9) (37)
Balance January 2, 1999 $ – $ 40 $ 40
Additional programs 14 28 42
Utilized in 1999 (14) (22) (36)
No longer required –(24) (24)
Balance January 1, 2000 $ – $ 22 $ 22
Included in special (credits)/charges, net is a gain of $19 million as a result of shares
granted to Textron from Manulife Financial Corporation’s initial public offering on their
demutualization of the Manufacturers Life Insurance Company.
17. The estimated fair value amounts shown below were determined from available market
information and valuation methodologies. Because considerable judgment is required in
interpreting market data, the estimates are not necessarily indicative of the amounts
that could be realized in a current market exchange.
January 1, 2000 January 2, 1999
Estimated Estimated
Carrying fair Carrying fair
(In millions) value value value value
Assets:
Textron Finance:
Finance receivables $4,647 $4,665 $2,774 $2,837
Other 46 46 46 46
Liabilities:
Textron Manufacturing:
Debt 1,745 1,740 2,615 2,706
Interest rate exchange agreements – 7 –(11)
Textron Finance:
Debt 4,551 4,535 2,829 2,836
Interest rate exchange agreements –(2) – 1
Foreign exchange contracts –(6) – 9
Currency swaps (21) (25) 14 10
(i) Finance receivables – The estimated fair values of real estate loans and commercial installment contracts were based on dis-
counted cash flow analyses. The estimated fair values of variable-rate receivables approximated the net carrying value. The
estimated fair values of nonperforming loans were based on discounted cash flow analyses using risk-adjusted interest rates or
the fair value of the related collateral.
(ii) Debt, interest rate exchange agreements, foreign exchange contracts and currency swaps – The estimated fair value of fixed-rate
debt was determined by independent investment bankers or discounted cash flow analyses. The estimated fair values of
variable-rate debt approximated their carrying values. The estimated fair values of interest rate exchange agreements were
determined by independent investment bankers and represent the estimated amounts that Textron or its counterparty would be
required to pay to assume the other party’s obligations under the agreements. The estimated fair values of the foreign exchange
contracts and currency swaps were determined by Textron’s foreign exchange banks.
18. Contingencies
Textron is subject to a number of lawsuits, investigations and claims arising out of the
conduct of its business, including those relating to commercial transactions, government
contracts, product liability, and environmental, safety and health matters. Some seek
damages, fines or penalties in substantial amounts or remediation of environmental
contamination, and some are class actions. Under federal government procurement
regulations, certain claims could result in suspension or debarment of Textron or its
subsidiaries from U.S. government contracting for a period of time. On the basis of
information presently available, Textron believes that any liability for these suits and
proceedings would not have a material effect on Textron’s net income or financial condition.
Contingencies
and
Environmental
Remediation
Fair Value of
Financial
Instruments
1999 Textron Annual Report 59