E-Z-GO 2014 Annual Report Download - page 62

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Allowance for Losses
A rollforward of the allowance for losses on finance receivables and a summary of its composition, based on how the underlying
finance receivables are evaluated for impairment, is provided below. The finance receivables reported in this table specifically
exclude $121 million and $120 million of leveraged leases at January 3, 2015 and December 28, 2013, respectively, in accordance
with generally accepted accounting principles.
(In millions)
January 3,
2015
December 28,
2013
Balance at the beginning of year
$ 55
$ 84
Provision for losses
6
(23)
Charge-offs
(17)
(17)
Recoveries
7
12
Transfers
—
(1)
Balance at the end of year
$ 51
$ 55
Allowance based on collective evaluation
31
41
Allowance based on individual evaluation
20
14
Finance receivables evaluated collectively
1,023
1,226
Finance receivables evaluated individually
110
137
Note 4. Inventories
Inventories are composed of the following:
(In millions)
January 3,
2015
December 28,
2013
Finished goods
$ 1,582
$ 1,276
Work in process
2,683
2,477
Raw materials and components
546
407
4,811
4,160
Progress/milestone payments
(883)
(1,197)
Total
$ 3,928
$ 2,963
Inventories valued by the LIFO method totaled $1.4 billion and $1.3 billion at January 3, 2015 and December 28, 2013,
respectively, and the carrying values of these inventories would have been higher by approximately $468 million and $461 million,
respectively, had our LIFO inventories been valued at current costs. Inventories related to long-term contracts, net of
progress/milestone payments, were $447 million and $359 million at January 3, 2015 and December 28, 2013, respectively.
Note 5. Property, Plant and Equipment, Net
Our Manufacturing group’s property, plant and equipment, net are composed of the following:
(Dollars in millions)
Useful Lives
(in years)
January 3,
2015
December 28,
2013
Land and buildings
3 - 40
$ 1,818
$ 1,636
Machinery and equipment
1 - 20
4,364
4,042
6,182
5,678
Accumulated depreciation and amortization
(3,685)
(3,463)
Total
$ 2,497
$ 2,215
At January 3, 2015 and December 28, 2013, assets under capital leases totaled $279 million and $247 million and had accumulated
amortization of $68 million and $56 million, respectively. The Manufacturing group’s depreciation expense, which included
amortization expense on capital leases, totaled $379 million, $335 million and $315 million in 2014, 2013 and 2012, respectively.
56 Textron Inc. Annual Report • 2014