E-Z-GO 2005 Annual Report Download - page 74

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Hypothetical adverse changes of 10% and 20% to either the prepayment speed, expected credit losses or residual cash flows discount rates
assumptions would not have a material impact on the current fair value of the residual cash flows associated with the retained interests. These
hypothetical sensitivities should be used with caution, as the effect of a variation in a particular assumption on the fair value of the retained interest
is calculated without changing any other assumption. In reality, a change in one factor may result in a change in another factor that may magnify
or counteract the sensitivities losses. For example, increases in market interest rates may result in lower prepayments and increased credit losses.
Note 6. Inventories
Inventories are composed of the following:
December 31, January 1,
(In millions)
2005 2005
Finished goods $ 527 $ 523
Work in process 1,410 1,141
Raw materials 267 210
2,204 1,874
Less progress/milestone payments 492 338
$ 1,712 $ 1,536
Inventories aggregating $1.3 billion and $1.1 billion at the end of 2005 and 2004, respectively, were valued by the LIFO method. Had such LIFO
inventories been valued at current costs, their carrying values would have been approximately $251 million and $221 million higher at those
respective dates. The remaining inventories, other than those related to certain long-term contracts, are valued primarily by the FIFO method. Inven-
tories related to long-term contracts, net of progress/milestone payments were $350 million at the end of 2005 and $259 million at the end of 2004.
Note 7. Property, Plant and Equipment, net
Property, plant and equipment, net for Textron Manufacturing is composed of the following:
December 31, January 1,
(In millions)
2005 2005
Land and buildings $ 1,008 $ 1,001
Machinery and equipment 2,565 2,356
3,573 3,357
Less accumulated depreciation and amortization 1,999 1,844
$ 1,574 $ 1,513
Note 8. Goodwill and Other Intangible Assets
Changes in goodwill are summarized below:
(In millions)
Bell Cessna Industrial Finance Total
Balance at December 28, 2002 $ 101 $ 306 $ 556 $ 169 $ 1,132
Foreign currency translation — — 37 — 37
Balance at January 3, 2004 $ 101 $ 306 $ 593 $ 169 $ 1,169
Acquisitions/dispositions — 16 (20) — (4)
Foreign currency translation — — 20 — 20
Other — — (14) — (14)
Balance at January 1, 2005 $ 101 $ 322 $ 579 $ 169 $ 1,171
Acquisitions 1 — 4 — 5
Foreign currency translation — — (22) — (22)
Other — — (6) — (6)
Balance at December 31, 2005 $ 102 $ 322 $ 555 $ 169 $ 1,148
54
Textron Inc.