E-Z-GO 2004 Annual Report Download - page 44

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Textron Inc.
Borrowings have historically been a secondary source of funds for Textron Manufacturing and, along with the collection of finance
receivables, are a primary source of funds for Textron Finance. Both Textron Manufacturing and Textron Finance utilize a broad
base of financial sources for their respective liquidity and capital needs. Our credit ratings are predominantly a function of our
ability to generate operating cash flow and satisfy certain financial ratios. Since high-quality credit ratings provide us with access
to a broad base of global investors at an attractive cost, we target a long-term A rating from the independent debt-rating agencies.
As of January 1, 2005, our credit ratings are as follows:
Standard &
Fitch Moody’s Poor’s
Long-term:
Textron Manufacturing A- A3 A-
Textron Finance A- A3 A-
Short-term:
Textron Manufacturing F2 P2 A2
Textron Finance F2 P2 A2
For liquidity purposes, Textron Manufacturing and Textron Finance have a policy of maintaining sufficient unused lines of credit
to support their outstanding commercial paper. None of these lines of credit were used at January 1, 2005 or at January 3, 2004.
Textron Manufacturing has primary revolving credit facilities of $1.25 billion, of which $1.0 billion will expire in 2007 and $0.25
billion will expire in March 2005. Textron Manufacturing’s credit facilities permit Textron Finance to borrow under those facilities.
Textron Finance also has bank lines of credit of $1.5 billion, of which $500 million expires in July 2005 and $1.0 billion expires in
2008. The facilities that expire in 2005 both include one-year term out options that effectively extend their expirations into 2006. At
January 1, 2005, the lines of credit not reserved as support for commercial paper and letters of credit were $1.2 billion for Textron
Manufacturing and $187 million for Textron Finance.
Under a shelf registration statement filed with the Securities and Exchange Commission, Textron Finance may issue public debt
securities in one or more offerings up to a total maximum offering of $4.0 billion. Under this registration statement, Textron
Finance issued $370 million of term notes during 2004. The proceeds from these issuances were used to refinance maturing debt.
At January 1, 2005, Textron Finance had $3.3 billion available under this registration statement. Under a shelf registration state-
ment filed with the Securities and Exchange Commission that became effective on August 4, 2004, Textron Manufacturing may
issue public debt and other securities in one or more offerings up to a total maximum offering of $2.0 billion. At January 1, 2005,
Textron Manufacturing had $2.0 billion available under this registration statement.
Contractual Obligations
The following table summarizes Textron Manufacturing’s known contractual obligations to make future payments or other consid-
eration pursuant to certain contracts as of January 1, 2005, as well as an estimate of the timing in which these obligations are
expected to be satisfied:
Payment Due by Period
Less than More than
(In millions) 1 Year 2 Years 3 Years 4 Years 5 Years 5 Years Total
Textron Manufacturing:
Liabilities reflected in balance sheet:
Long-term debt $ 427 $ 4 $ 34 $ 346 $ — $ 848 $ 1,659
Capital lease obligations 64323114132
Pension benefits for
unfunded plans 15 14 13 14 13 150 219
Postretirement benefits other than
pensions 60 61 59 58 54 455 747
Other long-term liabilities 135 74 51 33 30 246 569
Liabilities not reflected in balance sheet:
Operating leases 70 55 37 28 28 127 345
Purchase obligations 1,412 132 35 7 — 12 1,598
Total Textron Manufacturing $ 2,125 $ 344 $ 232 $ 488 $ 128 $ 1,952 $ 5,269
Long-term debt and capital lease obligations included in the table above do not include interest payments.