North Face 2001 Annual Report Download - page 59

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The following provides a reconciliation of the changes in fair value of the pension plans’ assets and benefit
obligations, based on a September 30 valuation date, plus the funded status at the end of each year:
In thousands 2001 2000
Fair value of plan assets, beginning of year $ 728,389 $ 667,295
Actual return on plan assets (129,402) 80,443
Company contributions 22,038 1,445
Acquired company plan –5,647
Benefits paid (29,194) (26,441)
Fair value of plan assets, end of year 591,831 728,389
Projected benefit obligations, beginning of year 623,822 585,850
Service cost 19,627 20,863
Interest cost 50,261 47,630
Plan amendments 1,755 19,277
Acquired company plan –4,917
Partial plan curtailment (38,434) –
Actuarial (gain) loss 60,732 (28,274)
Benefits paid (29,194) (26,441)
Projected benefit obligations, end of year 688,569 623,822
Funded status, end of year (96,738) 104,567
Unrecognized net actuarial (gain) loss 82,432 (137,164)
Unrecognized prior service cost 27,187 43,729
Pension asset, net $ 12,881 $ 11,132
Amount included in balance sheets:
Other assets $ 56,993 $ 42,516
Other liabilities (46,616) (31,384)
Accumulated other comprehensive income 2,504 –
$ 12,881 $ 11,132
The projected benefit obligation was determined using an assumed discount rate of 7.5% in 2001, 8.0% in
2000 and 7.8% in 1999. The assumption for compensation increases w as 4.0% in each year, and the assumption
for return on plan assets w as 8.8% in each year.
For the unfunded supplemental defined benefit pension plan, the projected benefit obligation and the accu-
mulated benefit obligation were $60.3 million and $46.6 million, respectively, at the end of 2001 and $50.5 million
and $39.3 million, respectively, at the end of 2000. To support these benefit liabilities, the Company has purchased
life insurance contracts and marketable securities. The cash value of life insurance and the market value of
other investments was $21.7 million in 2001 and $25.3 million in 2000. These securities are held in irrevocable
trusts and are included in other assets.
The Company sponsors an Employee Stock Ow nership Plan (ESOP) as part of a 401(k) savings plan covering
most domestic salaried employees. Contributions made by the Company to the 401(k) plan are based on a speci-
fied percentage of employee contributions. Cash contributions by the Company were $7.1 million in 2001, $7.2 mil-
lion in 2000 and $6.9 million in 1999. Plan expense was $3.8 million in 2001, $4.7 million in 2000 and $5.2 million
in 1999, after giving effect to dividends on the Series B Convertible Preferred Stock of $3.2 million in 2001,
$3.3 million in 2000 and $3.5 million in 1999.
The Company also sponsors other savings and retirement plans for certain domestic and foreign employees.
Expense for these plans totaled $5.8 million in 2001, $5.2 million in 2000 and $6.2 million in 1999.
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