E-Z-GO 2009 Annual Report Download - page 43

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At January 2, 2010, the Finance group had $350 million of unused commitments to fund new and existing customers under revolving lines of
credit, construction loans and equipment loans and leases. These commitments generally have an original duration of less than three years, and
funding under these facilities is dependent on the availability of eligible collateral and compliance with customary financial covenants. Since
many of the agreements will not be used to the extent committed or will expire unused, the total commitment amount does not necessarily
represent future cash requirements. We also have ongoing customer relationships, including manufacturers and dealers in the distribution
finance product line, which do not contractually obligate us to provide funding; however, we may choose to fund under certain of these
relationships to facilitate an orderly liquidation and mitigate credit losses. Neither of these potential fundings is included as contractual
obligations in the table above.
Manufacturing Group
The following table summarizes the known contractual obligations, as defined by reporting regulations, of our Manufacturing group as of January
2, 2010, as well as an estimate of the timing in which these obligations are expected to be satisfied:
Payments Due by Year
2015
and
(In millions) 2010 2011 2012 2013 2014 Thereafter Total
Liabilities reflected in balance sheet:
Multi-year credit facilities $ — $ — $ 1,167 $ — $ — $ — $ 1,167
Long-term debt 129 13 154 945 — 1,051 2,292
Interest on borrowings 150 143 129 107 80 232 841
Capital lease obligations 5 5 5 5 5 100 125
Pension benefits for unfunded plans 22 23 23 24 25 200 317
Postretirement benefits other than
pensions 67 67 66 65 64 357 686
Other long-term liabilities 98 78 64 81 45 184 550
Liabilities not reflected in balance sheet:
Operating leases 60 47 42 32 26 167 374
Purchase obligations 1,381 553 264 55 27 11 2,291
Total Manufacturing group $ 1,912 $ 929 $ 1,914 $ 1,314 $ 272 $ 2,302 $ 8,643
We maintain defined benefit pension plans and postretirement benefit plans other than pensions as discussed in Note 14 to the Consolidated
Financial Statements. Included in the above table are discounted estimated benefit payments we expect to make 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. Our policy for funding
pension plans is to make contributions annually, consistent with applicable laws and regulations; however, future contributions to our pension
plans are not included in the above table since the future cash outflows are uncertain. We expect to make contributions to our funded pension
plans of approximately $20 million in 2010. Based on our current assumptions, which may change with changes in market conditions, our current
contribution estimates for each of the years from 2011 through 2014 are estimated to be in the range of approximately $200 million to $400
million under the plan provisions in place at this time.
Other long-term liabilities included in the table consist primarily of undiscounted amounts in the Consolidated Balance Sheet as of January 2,
2010, representing obligations under deferred compensation arrangements and estimated environmental remediation costs. Payments under
deferred compensation arrangements have been estimated based on management’s assumptions of expected retirement age, mortality, stock price
and rates of return on participant deferrals. The timing of cash flows associated with environmental remediation costs is largely based on
historical experience. Other long-term liabilities, such as deferred taxes, unrecognized tax benefits and product liability reserves, have been
excluded from the table due to the uncertainty of the timing of payments combined with the absence of historical trends to be used as a predictor
for such payments.
Operating leases represent undiscounted obligations under noncancelable leases. Purchase obligations represent undiscounted obligations for
which we are committed to purchase goods and services as of January 2, 2010. The ultimate liability for these obligations may be reduced based
upon termination provisions included in certain purchase contracts, the costs incurred to date by vendors under these contracts or by recourse
under firm contracts with the U.S. Government under normal termination clauses.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations