E-Z-GO 2004 Annual Report Download - page 26

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Textron Inc.
Fluid & Power
Fluid & Power consists of four business units: Engineered Products, Hydrocarbon Processing Products, Polymer Systems and
Standard Products. Engineered Products designs and manufactures industrial gears, mechanical transmission systems, gear
motors, and gear sets under the David Brown brand name. Hydrocarbon Processing Products designs and manufactures industrial
pumps for the oil, gas, petrochemical and desalinization industries under the David Brown Union Pump and David Brown Guinard
Pump brands. Polymer Systems designs and manufactures industrial pumps, extrusion equipment and screen changers for the
polymer industry under the Maag brand name. Standard Products designs and manufactures industrial gears and gear sets, dou-
ble enveloping worm gear speed reducers, screwjacks and hydraulic products under the Benzlers, Cone Drive, Radicon and David
Brown Hydraulics brands. These products are sold to a variety of customers, including original equipment manufacturers, govern-
ments, distributors and end users. Fluid & Power faces competition from other manufacturers based primarily on price, quality,
product support, performance, reliability, delivery and reputation.
Finance Segment Our Finance segment consists of Textron Financial Corporation and its subsidiaries. Textron Financial Corporation is a diversified
commercial finance company with core operations in six markets:
• Aircraft Finance provides financing for new and used Cessna business jets, Caravans and piston-engine airplanes, Bell heli-
copters and other general aviation aircraft;
•
Asset-Based Lending provides asset-based loans to middle-market companies that manufacture or distribute finished goods and
provides factoring arrangements for freight companies;
•
Distribution Finance offers inventory finance programs for dealers of Textron manufactured products and for dealers of a variety of
other household, housing, leisure, agricultural and technology products;
• Golf Finance makes mortgage loans for the acquisition and refinancing of golf courses and provides term financing for E-Z-GO
golf cars and Jacobsen turf-care equipment;
•
Resort Finance extends loans to developers of vacation interval resorts, secured primarily by notes receivable and interval inven-
tory; and
•
Structured Capital engages in tax-oriented, long-term leases of large-ticket equipment and real estate, primarily with investment
grade lessees.
Textron Financial Corporation’s other financial services and products include transaction syndication, equipment appraisal and
disposition, and portfolio servicing offered through TBS Business Services, Inc.
Textron Financial Corporation’s financing activities are confined almost exclusively to secured lending and leasing to commercial
markets. Textron Financial Corporation’s services are offered primarily in the United States and Canada. However, Textron Finan-
cial Corporation finances Textron products worldwide, principally Bell helicopters and Cessna aircraft.
In 2004, 2003 and 2002, Textron Financial Corporation paid Textron $0.9 billion, $0.9 billion and $1.0 billion, respectively, relat-
ing to the sale of manufactured products to third parties that were financed by Textron Financial Corporation. Textron also received
proceeds in those years of $77 million, $56 million and $104 million from the sale of equipment from its manufacturing operations
to Textron Financial for use under operating lease agreements.
The commercial finance environment in which Textron Financial Corporation operates is highly fragmented and extremely compet-
itive. Textron Financial Corporation is subject to competition from various types of financing institutions, including banks, leasing
companies, insurance companies, commercial finance companies and finance operations of equipment vendors. Competition
within the commercial finance industry is primarily focused on price, terms, structure and service.
Textron Financial Corporation’s largest business risk is the collectibility of its finance receivable portfolio. See “Finance Portfolio
Quality” in Management’s Discussion and Analysis of Financial Condition and Results of Operations on page 19 for a detailed dis-
cussion of the credit quality of this portfolio.