E-Z-GO 2008 Annual Report Download - page 17

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Item 1. Business
and factories. E-Z-GO’s golf cars and utility vehicles also are sold in the consumer market. Sales are made through a network of dealers and
directly to end users. E-Z-GO has two major competitors for golf cars and several other competitors for off-road utility vehicles. Competition is
based primarily on price, product quality and reliability, product support and reputation.
Jacobsen designs and manufactures professional turf-maintenance equipment and specialized turf-care vehicles. Major brand names include
Ransomes, Jacobsen and Cushman. Jacobsen’s commercial customers consist primarily of golf courses, resort communities, sporting venues
and municipalities. Sales are made through a network of distributors and dealers. Jacobsen has two major competitors for professional turf-
maintenance equipment and several other competitors for specialized turf care. Competition is based primarily on price, product quality and
reliability, and product support.
Finance Segment
Our Finance segment consists of Textron Financial Corporation, a diversified commercial finance company with operations in six major divisions:
Asset-Based Lending, Aviation Finance, Distribution Finance, Golf Finance, Resort Finance and Structured Capital.
In October 2008, we announced that, due to market conditions, our Finance segment would be exiting its Asset-Based Lending and Structured
Capital businesses, as well as several additional product lines, representing about $2.0 billion in managed receivables. Then, due to continued
weakness in the economy and in order to address our long-term liquidity position, on December 22, 2008, we announced a plan to exit all of the
commercial finance business of our Finance segment, other than that portion of the business supporting customer purchases of products that we
manufacture. The exit plan will be effected through a combination of orderly liquidation and selected sales and is expected to be substantially
complete over the next two to four years.
Our Finance segment continues to originate new customer relationships and receivables in the Aviation Finance division, which provides
financing for new and used Cessna business jets, single engine turboprops, piston-engine airplanes and Bell helicopters, and the Golf Finance
division, which provides term financing for E-Z-GO golf cars and Jacobsen turf-care equipment. Our Finance segment’s services are offered
primarily in North America. However, our Finance segment finances certain Textron products worldwide, principally Bell helicopters and
Cessna aircraft.
In 2008, 2007 and 2006, our Finance segment paid our manufacturing segments $1.0 billion, $1.2 billion and $1.0 billion, respectively, related
to the sale of Textron-manufactured products that it financed. Our Cessna and Industrial segments also received proceeds in those years of
$18 million, $27 million and $63 million, respectively, from the sale of equipment from their manufacturing operations to our Finance segment
for use under operating lease agreements.
The commercial finance environment in which our Finance segment continues to operate in is highly fragmented and has traditionally been
extremely competitive. Our Finance segment is subject to competition from various types of financing institutions, including banks, leasing
companies, commercial finance companies and finance operations of equipment vendors. Competition within the commercial finance industry is
primarily focused on price, term, structure and service.
Our Finance segment’s largest business risks are continued access to financing through the capital markets and the collectibility of its finance
receivable portfolio. See “Finance Portfolio Quality” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
on page 27 for a discussion of the credit quality of this portfolio.