E-Z-GO 2005 Annual Report Download - page 47

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 was used at December 31, 2005 or January 1, 2005. Textron Manufacturing has pri-
mary revolving credit facilities of $1.3 billion that expire in 2010. Textron Manufacturing’s credit facilities permit Textron Finance to borrow under
those facilities. Textron Finance also has $1.5 billion in bank lines of credit, of which $500 million expires in July 2006 and $1.0 billion expires in
2010. Textron Finance’s facility that expires in 2006 includes a one-year term out option that effectively extends its expiration into 2007. At
December 31, 2005, the lines of credit not reserved as support for commercial paper and letters of credit were $1.2 billion for Textron Manufactur-
ing and $300 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 $1.4 billion of term
debt and CAD 0.1 billion of term debt during 2005. The proceeds from these issuances were used to fund receivable growth and repay short-term
debt. At December 31, 2005, Textron Finance had $1.8 billion available under this registration statement. Textron Manufacturing may issue public
debt and other securities in one or more offerings up to a total maximum offering of $2.0 billion under its shelf registration statement filed with the
Securities and Exchange Commission. At December 31, 2005, Textron Manufacturing had $1.6 billion available under this registration statement.
Contractual Obligations
The following table summarizes Textron Manufacturing’s known contractual obligations to make future payments or other consideration pursuant
to certain contracts as of December 31, 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 $ 272 $ 34 $ 341 $ — $ 252 $ 913 $ 1,812
Capital lease obligations 33232109122
Pension benefits for
unfunded plans 13 12 14 15 15 142 211
Postretirement benefits
other than pensions 67 66 64 61 58 503 819
Other long-term liabilities 101 74 50 33 27 272 557
Liabilities not reflected in balance sheet:
Operating leases 51 37 28 27 25 119 287
Purchase obligations 1,682 401 144 28 4 25 2,284
Total Textron Manufacturing $ 2,189 $ 627 $ 643 $ 167 $ 383 $ 2,083 $ 6,092
Long-term debt and capital lease obligations included in the table above do not include interest payments. Operating leases represent undis-
counted obligations under noncancelable leases.
Textron maintains defined benefit pension plans and postretirement benefit plans other than pensions as discussed in Note 14 to the Consolidated
Financial Statements. Included in the table above are discounted estimated benefit payments to be made by Textron related to unfunded pension
and other postretirement benefit plans. Actual benefit payments are dependent on a number of factors, including mortality assumptions, expected
retirement age, rate of compensation increases and medical trend rates, which are subject to change in future years. Textron also expects to make
contributions to its funded pension plans in the range of $25 million to $30 million per year over the next five years, which are not reflected in
this table.