E-Z-GO 2011 Annual Report Download - page 67

Download and view the complete annual report

Please find page 67 of the 2011 E-Z-GO annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 109

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109

In the fourth quarter of 2011, we recorded a $41 million impairment charge to write down $37 million in customer agreements and
contractual relationships and $4 million in patents and technology. See Note 9 for more information on this charge.
Amortization expense totaled $51 million, $52 million and $52 million in 2011, 2010 and 2009, respectively. Amortization
expense is estimated to be approximately $39 million, $37 million, $35 million, $33 million and $28 million in 2012, 2013, 2014,
2015 and 2016, respectively.
Note 4. Accounts Receivable and Finance Receivables
Accounts Receivable
Accounts receivable is composed of the following:
(In millions)
December 31,
2011
January 1,
2011
Commercial
$ 528
$ 496
U.S. Government contracts
346
416
874
912
Allowance for doubtful accounts
(18)
(20)
$ 856
$ 892
We have unbillable receivables on U.S. Government contracts that arise when the revenues we have appropriately recognized
based on performance cannot be billed yet under terms of the contract. Unbillable receivables within accounts receivable totaled
$192 million at December 31, 2011 and $195 million at January 1, 2011.
Finance Receivables
Finance receivables by product line, which includes both finance receivables held for investment and finance receivables held for
sale, are presented in the following table by product line:
(In millions)
December 31,
2011
January 1,
2011
Aviation
$ 1,876
$ 2,120
Golf Equipment
69
212
Golf Mortgage
381
876
Timeshare
318
894
Structured Capital
208
317
Other liquidating
43
207
Total finance receivables
2,895
4,626
Less: Allowance for losses
156
342
Less: Finance receivables held for sale
418
413
Total finance receivables held for investment, net
$ 2,321
$ 3,871
Aviation primarily includes installment contracts and finance leases provided to purchasers of new and used Cessna aircraft and
Bell helicopters and also includes installment contracts and finance leases secured by used aircraft produced by other
manufacturers. These agreements typically have initial terms ranging from five to ten years and amortization terms ranging from
eight to fifteen years. The average balance of installment contracts and finance leases in Aviation was $1 million at December 31,
2011. Installment contracts generally require the customer to pay a significant down payment, along with periodic scheduled
principal payments that reduce the outstanding balance through the term of the loan. Finance leases with no significant residual
value at the end of the contractual term are classified as installment contracts, as their legal and economic substance is more
equivalent to a secured borrowing than a finance lease with a significant residual value. Golf Equipment primarily includes
finance leases provided to purchasers of new E-Z-GO and Jacobsen golf and turf-care equipment.
Golf Mortgage primarily includes golf course mortgages and also includes mortgages secured by hotels and marinas. Mortgages
in this product line are secured by real property and are generally limited to 75% or less of the property's appraised market value at
loan origination. These mortgages typically have initial terms ranging from five to ten years with amortization periods from 20 to
30 years. As of December 31, 2011, loans in Golf Mortgage have an average balance of $6 million and a weighted-average
contractual maturity of three years. All loans in this portfolio have been classified as held for sale as of December 31, 2011.
56
56 Textron Inc. Annual Report • 2011