E-Z-GO 2011 Annual Report Download - page 71

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We may foreclose, repossess or receive collateral when a customer no longer has the ability to make payment. These transfers of
assets in full or partial satisfaction of the loan balance are also considered troubled debt restructurings if the fair value of the assets
transferred is less than our recorded investment. Similar to the troubled debt restructurings described above, these loans typically
have been classified as impaired loans prior to the asset transfer; therefore, reserves have already been established related to the
loan. As a result, for 2011, charge-offs of $73 million upon the transfer of such assets were largely offset by previously
established reserves.
Troubled debt restructurings resulting in transfers of assets in satisfaction of the loan balance that occurred in 2011 are as follows:
(Dollars in millions)
Number of
Customers
Pre-
Modification
Recorded
Investment
Post-
Modification
Asset Balance
Aviation
27
$ 53
$ 32
Golf Mortgage
5
59
39
Timeshare
2
96
60
Allowance for Losses
A rollforward of the allowance for losses on finance receivables held for investment is provided below:
(In millions)
Aviation
Golf
Equipment
Golf
Mortgage
Timeshare
Other
Liquidating
Total
Balance at January 2, 2010
$ 114
$ 9
$ 65
$ 79
$ 74
$ 341
Provision for losses
37
14
66
38
(12)
143
Net charge-offs
(44)
(7)
(52)
(7)
(28)
(138)
Transfers
—
—
—
(4)
—
(4)
Balance at January 1, 2011
107
16
79
106
34
342
Provision for losses
18
(3)
25
(26)
(2)
12
Net charge-offs
(30)
(4)
(24)
(40)
(4)
(102)
Transfers
—
(3)
(80)
—
(13)
(96)
Balance at December 31, 2011
$ 95
$ 6
$ —
$ 40
$ 15
$ 156
A summary of the allowance for losses on finance receivables that are evaluated on an individual and on a collective basis is
provided below. The finance receivables reported in this table specifically exclude $208 million and $279 million of leveraged
leases at December 31, 2011 and January 1, 2011, respectively, in accordance with authoritative accounting standards.
December 31, 2011
January 1, 2011
Finance Receivables Evaluated
Allowance
Based on
Individual
Evaluation
Allowance
Based on
Collective
Evaluation
Finance Receivables Evaluated
Allowance
Based on
Individual
Evaluation
Allowance
Based on
Collective
Evaluation
(In millions)
Individually
Collectively
Total
Individually
Collectively
Total
Aviation
$ 139
$ 1,737
$ 1,876
$ 39
$ 56
$ 164
$ 1,956
$ 2,120
$ 45
$ 62
Golf Equipment
2
67
69
1
5
4
208
212
2
14
Timeshare
227
54
281
38
2
424
257
681
102
4
Golf Mortgage
—
—
—
—
—
313
372
685
39
40
Other liquidating
15
28
43
9
6
41
195
236
3
31
Total
$ 383
$ 1,886
$ 2,269
$ 87
$ 69
$ 946
$ 2,988
$ 3,934
$ 191
$ 151
Captive and Other Intercompany Financing
Our Finance group provides financing for retail purchases and leases for new and used aircraft and equipment manufactured by our
Manufacturing group. The captive finance receivables for these inventory sales that are included in the Finance group’s balance
sheets are summarized below:
(In millions)
December 31,
2011
January 1,
2011
Installment contracts
$ 1,488
$ 1,652
Finance leases
121
220
Distribution finance receivables
8
18
Total
$ 1,617
$ 1,890
60
60 Textron Inc. Annual Report • 2011