E-Z-GO 2004 Annual Report Download - page 67

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The assets and liabilities of the InteSys discontinued business are as follows:
January 1, January 3,
(In millions) 2005 2004
Accounts receivable, net $ 12 $ 11
Inventories 29
Property, plant and equipment, net — 24
Other assets 15 28
Total assets $29$72
Accounts payable and accrued liabilities $ 4 $ 14
Other liabilities 17
Total liabilities $ 5 $ 21
Discontinued operations also include the results of OmniQuip and the small business direct portfolio which were both sold in
2003. Operating results of the discontinued businesses are as follows:
(In millions) 2004 2003 2002
Revenue $ 70 $ 236 $ 386
Income (loss) from discontinued operations before special charges 12 (6) (66)
Special charges (19) (36) (19)
Loss from discontinued operations (7) (42) (85)
Income tax (expense) benefit (1) 9 75
Loss from discontinued operations, net of income taxes $ (8) $ (33) $ (10)
Discontinued operations include a second quarter 2004 pre-tax gain of $7 million from the sale of InteSys’ interest in two
Brazilian-based joint ventures. Prior to the disposition of these businesses, approximately $32 million and $27 million in restruc-
turing costs related to InteSys and OmniQuip, respectively, were recorded in special charges since the inception of Textron’s
restructuring program.
On August 1, 2003, Textron consummated the sale of its remaining OmniQuip business to JLG Industries, Inc. for $90 million in
cash and a $10 million promissory note that was paid in full in February 2004. In the second quarter of 2003, Textron recorded $30
million in special charges for the impairment of $15 million in intangible assets and $15 million in goodwill based on the fair value
implied by the sale price of OmniQuip under negotiation at that time. There was no further gain or loss recorded upon the consum-
mation of the sale.
Textron Manufacturing has retained certain non-operating assets and liabilities of the OmniQuip business. These remaining assets
and liabilities are included in the consolidated balance sheet as of January 1, 2005 and are composed of assets of approximately
$3 million and liabilities of approximately $27 million. The liabilities retained include $22 million in reserves related to a recourse
liability to cover potential losses on approximately $52 million in finance receivables held by Textron Finance. See Note 4 for fur-
ther discussion on transactions between Textron’s Manufacturing and Finance borrowing groups.
Other Dispositions
During 2004, Textron sold its Energy Manufacturing and Williams Machine and Tool business in the Industrial segment. There was
no gain or loss on the sale as the proceeds received approximated book value, including goodwill. During 2003, Textron sold its
remaining 50% interest in an Italian joint venture to Collins & Aikman Corporation for a $12 million after-tax gain.
On December 19, 2003, Textron Finance sold its small business direct portfolio for $421 million in cash. Based upon the terms of
the transaction, no gain or loss was recorded. Textron Finance entered into a loss sharing agreement related to the sale, which
requires Textron Finance to reimburse the purchaser for a portion of losses incurred on the portfolio above a predetermined level.
Textron Finance originally recorded a liability of $14 million representing the estimated fair value of the guarantee, which expires
in 2008. At January 1, 2005, the estimated fair value of the guarantee was a $13 million liability.
Notes to Consolidated Financial Statements