Note 7

NOTES RECEIVABLE AND LEASED ASSETS

Notes receivable and leased assets consist of:

(in millions)
	Feb 25, 2000	Feb 26, 1999
Notes receivable:
Project financing	$ 14.8)	$ 19.3)
Asset-based lending	85.2)	63.4)
Ownership transition financing	43.7)	41.2)
Other	3.5)	4.2)
Net investment in leased assets:
Direct financing leases	259.6)	187.6)
Net operating leases	89.5)	41.3)
Allowance for losses	(13.2)	(7.5)
	483.1)	349.5)
Current portion	189.0)	140.4)
Long-term portion	$ 294.1)	$ 209.1)

Notes receivable include three distinct programs of dealer financing: project financing; asset-based lending; and ownership transition financing. Through these programs, the Company helps dealers secure interim financing, establish working capital lines of credit, finance ownership changes and restructure debt.

The terms of notes receivable range from a few months for project financing to 15 years for certain ownership transition financing. Interest rates are both floating and fixed, reaching up to 11% as of February 25, 2000. The loans are generally secured by certain dealer assets and, in some cases, the common stock of the dealership. Unused asset-based lending credit lines approximated $37.2 million as of February 25, 2000, subject to available collateral. These commitments generally expire in one year and are reviewed periodically for renewal.

The following summarizes future minimum lease payments receivable as of February 25, 2000:

(in millions)
Year ending February		Direct financing leases	Operating leases
2001		$ 80.0	$ 25.3
2002		66.4	23.5
2003		52.6	20.7
2004		40.2	14.0
2005 and thereafter		47.6	4.3
		$ 286.8	$ 87.8

Approximately 34% of direct financing leases call for transfer of ownership to customers at lease-end. The original equipment cost at lease inception for leases in effect as of February 25, 2000 is $375.2 million for direct financing leases and $112.7 million for operating leases.