E-Z-GO 2001 Annual Report Download - page 45

Acquisitions
During 2001, Textron M anufacturing acquired four companies at a total cost of $209 million. Textron
Manufacturing also made a $40 million capital contribution to Textron Finance in support of its acquisition
of a $387 million loan portfolio. The largest of Textron M anufacturing’s acquisitions w as Tempo Research
Corporation which expanded Textron’s grow ing presence in the data-signal-voice test and installation
equipment market in the Industrial Products segment.
During 2000, Textron M anufacturing acquired 11 companies and the minority interests of tw o entities and
entered into one joint venture at a total cost of $121 million, including debt assumed of $36 million. One
of the larger acquisitions w as Advantage M olding and Decorating – a leading supplier of injection molded
parts, tooling and pad-printed designs.
During 1999, Textron M anufacturing acquired 14 companies and entered into tw o joint ventures. The
largest of these acquisitions w ere Flexalloy Inc. – a provider of vendor-managed inventory services for the
North American fastener markets; OmniQuip International, Inc. – a manufacturer of light construction
equipment, and InteSys Technologies Inc. – a provider of plastics and metal engineered assemblies. The
total cost of the acquisitions and investments in joint ventures w as approximately $1.2 billion, including
treasury stock issued for $32 million and debt assumed of $308 million. In addition, Textron Finance had
acquisitions totaling $1.3 billion, including debt assumed of $547 million. The largest of these acquisitions
were Litchfield Financial Corporation, a commercial finance company specializing in the vacation
ow nership timeshare industry and the aircraft and franchise finance divisions of GreenTree Financial
Servicing Corporation. Capital contributions made by Textron M anufacturing to Textron Finance in support
of these acquisitions were $337 million.
The purchase method of accounting has been used for all acquisitions during the past three years.
Dispositions
On December 20, 2001, Textron completed the sale of its Automotive Trim business to Collins & Aikman
Products Company, a subsidiary of Collins & Aikman Corporation, for $668 million in cash, non-marketable
preferred shares of Collins & Aikman valued at $147 million, 18 million shares of Collins & Aikman common
stock valued at $90 million and a transfer of $60 million in indebtedness. In addition, Textron Automotive
Trim entered into an $87 million lease agreement w hereby equipment used by the Automotive Trim
business w as retained by Textron and leased back to the business through Textron Financial Corporation.
Textron also retained a 50% interest in the Italian operating company, which Textron w ill have the right to
sell to Collins & Aikman for $23 million at a future date. Textron recognized a $339 million gain on the sale,
and received after-tax proceeds of approximately $582 million, including the transfer of indebtedness.
Textron intends to repurchase shares and reduce debt with these proceeds. The agreement also includes
a provision that entitles Textron to an additional cash payment of up to $125 million to be calculated based
on Collins & Aikman’s operating results for the five-year period ending 2006.
In January 1999, Textron completed the sale of Avco Financial Services (AFS) to Associates First Capital
Corporation for $3.9 billion in cash. Net after-tax proceeds were approximately $2.9 billion, resulting in an
after-tax gain of $1.65 billion.
Finance Receivables
Textron Finance provides financial services primarily to the aircraft, golf, vacation interval resort, dealer floorplan
and middle market industries under a variety of financing vehicles w ith various contractual maturities.
Installment contracts and finance leases have initial terms ranging from one to 15 years, and are generally
secured by the financed equipment. Floorplan and revolving receivables generally mature w ithin one to
three years. Floorplan receivables are generally secured by the inventory at the financed distributor, w hile
revolving loans are secured by trade receivables, inventory, plant and equipment, and pools of vacation
interval notes receivables and the underlying real property. Golf course mortgages have initial terms
ranging from three to seven years w ith amortization periods from 15 to 25 years. Resort mortgages
generally represent construction and inventory loans w ith terms up to 24 months. Golf course and resort
mortgages are secured by real property and are generally limited to 75% or less of the property’s appraised
market value at loan origination. Leveraged leases are secured by the ow nership of the leased equipment
or real property and have initial terms up to 30 years.
3. Finance
Receivables and
Securitizations
2. Acquisitions
and
Dispositions
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