E-Z-GO 2004 Annual Report Download - page 69

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48
Notes to Consolidated Financial Statements
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. Golf course mortgages have initial terms ranging from five to seven years with amortization peri-
ods from 15 to 25 years. Resort mortgages generally represent construction and inventory loans with terms up to two years.
Leveraged leases are secured by the ownership of the leased equipment and real property and have initial terms up to approxi-
mately 30 years.
The following table displays the contractual maturity of the finance receivables. It does not necessarily reflect future cash collec-
tions because of various factors, including the repayment or refinancing of receivables prior to contractual maturity:
Finance Receivables
Contractual Maturities Outstanding
(In millions)
2005 2006 2007 2008 2009 Thereafter 2004 2003
Installment contracts $ 226 $ 176 $ 159 $ 182 $ 142 $ 570 $ 1,455 $ 1,396
Distribution finance 1,020 6 ————1,026 778
Revolving loans 754 201 169 64 70 144 1,402 1,194
Finance leases 140 53 55 59 17 86 410 309
Golf course and resort
mortgages 168 245 152 138 130 172 1,005 945
Leveraged leases (5) 2 (9) 73 38 440 539 513
$ 2,303 $ 683 $ 526 $ 516 $ 397 $ 1,412 5,837 5,135
Less allowance for credit losses 99 119
$ 5,738 $ 5,016
Contractual maturities for finance leases classified as installment contracts include the minimum lease payments, net of the
unearned income to be recognized over the life of the lease. Total minimum lease payments and unearned income related to these
finance leases were $708 million and $136 million, respectively, at January 1, 2005, and $670 million and $99 million, respec-
tively, at January 3, 2004. Minimum lease payments due under these contracts for each of the next five years are as follows: $137
million in 2005, $120 million in 2006, $101 million in 2007, $92 million in 2008 and $92 million in 2009.
Textron Finance’s net investment in finance leases, excluding leases classified as installment contracts, is provided below:
(In millions)
2004 2003
Total minimum lease payments receivable $ 383 $ 287
Estimated residual values of leased equipment 205 188
588 475
Less unearned income (178) (166)
Net investment in finance leases $ 410 $ 309
Minimum lease payments due under finance leases for each of the next five years are as follows: $83 million in 2005, $54 million
in 2006, $47 million in 2007, $29 million in 2008 and $10 million in 2009.
The net investment in leveraged leases was as follows:
(In millions)
2004 2003
Rental receivable, net of nonrecourse debt $ 545 $ 457
Estimated residual values on leased assets 286 389
831 846
Unearned income (292) (333)
Investment in leveraged leases 539 513
Deferred income taxes (358) (353)
Net investment in leveraged leases $ 181 $ 160
Excluding receivables with recourse to Textron Manufacturing, at the end of 2004 and 2003 Textron Finance had nonaccrual
finance receivables totaling $119 million and $152 million, respectively, of which $85 million and $99 million, respectively, were