Transamerica Finance Corporation has entered into securitization arrangements under which it sells designated pools of net finance receivables to qualified special purpose entities (QSPEs). Under the terms of the securitization arrangements, TFC retains the servicing of the securitized assets and generally receives a servicing fee on the outstanding balance of the securitized assets along with rights to future residual cash flows.  Transamerica Finance Corporation maintains a provision for losses on net finance receivables at an amount that it believes is sufficient to provide adequate protection against losses in its loan portfolios. The allowance is provided through charges against current income and is adjusted for specific accounts as well as losses inherent in the portfolio.  Transamerica Finance Corporation determines its allowance for losses by taking into account expected losses in each business, the ratio of the provision for losses to net finance receivables outstanding and the ratio of net credit losses to average net finance receivables outstanding. A specific provision is established for impaired receivables when it is deemed probable that not all future principal and interest payments will be collected in accordance with the applicable contractual terms. This provision is reviewed and updated quarterly.  Equipment is shown at cost less depreciation over the estimated useful life. Equipment held for lease is shown at cost less depreciation over the estimated useful life. Assets held for sale consists primarily of retail finance receivables, certain off-lease equipment and repossessed assets. Long-term borrowings include intercompany loans for an amount of EUR 1,989 million (2002: EUR 2,342 million). The weighted average interest rate on long-term borrowings at December 31, 2003, and 2002 was 4.2% and 6.32% respectively. AEGON GROUP ANNUAL REPORT 2003 123 2003 2002 LONG-TERM BORROWINGS The contractual maturity is: Less than three months 371 218 Between three months and one year 437 318 Between one and five years 1,494 2,478 Over five years 170 537 TOTAL 2,472 3,551 2003 2002 OTHER ASSETS Equipment held for lease 1,220 1,551 Assets held for sale 22 113 Other 410 644 TOTAL 1,652 2,308 2003 2002 EQUIPMENT Balance at January 1 97 129 Investments 5 29 Depreciation (5) (10) Disposals and other changes 4 (12) Currency exchange rate differences (16) (39) BALANCE AT DECEMBER 31 85 97 Accumulated depreciation 51 87 Total cost of equipment 136 184