E-Z-GO 2001 Annual Report Download - page 46

At the end of 2001 and 2000, Textron Finance had nonaccrual finance receivables, excluding receivables
with recourse to the M anufacturing group, totaling $114 million and $102 million, respectively. Approximately
$54 million and $76 million of these respective amounts were considered impaired, which excludes
finance leases and homogeneous loan portfolios. The allow ance for losses on finance receivables related
to impaired loans w as $11 million and $34 million at the end of 2001 and 2000, respectively. The average
recorded investment in impaired loans during 2001 and 2000 w as $51 million and $76 million, respectively.
The following table displays the contractual maturity of the finance receivables. It does not necessarily
reflect future cash collections because of various factors including the repayment or refinancing of receiv-
ables prior to maturity. Cash collections from finance receivables, excluding finance charges and proceeds
from receivable sales or securitizations, w ere $5.8 billion and $5.2 billion in 2001 and 2000, respectively.
In the same periods, the ratio of cash collections (net of finance charges) to average net receivables,
excluding floorplan receivables and revolving loans, was approximately 65% and 59% , respectively.
Finance Receivables
Contractual M aturities Outstanding
(In millions) 2002 2003 2004 2005 Thereafter 2001 2000
Installment contracts $ 359 $210 $181 $ 174 $1,123 $2,047 $1,985
Floorplan receivables 327 92 3 11 41 474 894
Revolving loans 691 249 90 266 283 1,579 1,305
Finance leases 42 37 44 126 70 319 361
Golf course and
resort mortgages 102 95 101 121 394 813 683
Leveraged leases (16) (14) 27 18 389 404 361
$1,505 $ 669 $ 446 $716 $2,300 5,636 5,589
Less allowance for credit losses 144 116
$5,492 $5,473
The net investment in finance leases and leveraged leases were as follow s:
(In millions) 2001 2000
Finance and leveraged lease receivables $490 $508
Estimated residual values on leased assets 589 589
1,079 1,097
Unearned income (356) (375)
Investment in leases 723 722
Deferred income taxes (258) (265)
Net investment in leases $465 $457
The activity in the allow ance for credit losses on finance receivables is as follows:
(In millions) 2001 2000 1999
Balance at the beginning of the year $116 $113 $ 84
Provision for losses 82 37 32
Charge-offs (82) (45) (28)
Recoveries 875
Acquisitions and other 20 420
Balance at the end of the year $144 $116 $ 113
At year-end 2001, Textron Finance had unused commitments to fund new and existing customers under
$1.3 billion and $599 million of committed and uncommitted, respectively, revolving lines of credit.
Generally, interest rates on these commitments are not set until the loans are funded; therefore, Textron
Finance is not exposed to interest rate changes.
Textron Finance manages finance receivables for a variety of investors, participants and third-party portfolio
ow ners. The total managed finance receivable portfolio, including ow ned finance receivables, w as $9.3
billion at year-end 2001, and $8.0 billion at year-end 2000.
Ow ned and securitized finance receivables are primarily diversified geographically across the United
States, along w ith 12% held internationally. At December 29, 2001, Textron Finance’s most significant
collateral concentration was aircraft, w hich accounted for 23% of owned and securitized receivables.
Textron Finance has industry concentrations in the golf and vacation interval industries, w hich accounted
for 17% and 11% , respectively.
44 Textron Annual Report