E-Z-GO 2000 Annual Report Download - page 53

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Research and development costs for which Textron is responsible are expensed as incurred. These
Company funded costs include amounts for Company initiated programs, the cost sharing portions of
customer initiated programs, and losses incurred on customer initiated programs. The Company funded
and customer funded research and development costs for 2000, 1999 and 1998 were as follows:
(In millions) 2000 1999 1998
Company funded $307 $257 $219
Customer funded 414 413 394
Total research and development $721 $670 $613
Textron has defined benefit and defined contribution pension plans that together cover substantially
all employees. The costs of the defined contribution plans amounted to approximately $51 million in
2000 and $40 million in both 1999 and 1998. Defined benefits under salaried plans are based on
salary and years of service. Hourly plans generally provide benefits based on stated amounts for
each year of service. Textron’s funding policy is consistent with federal law and regulations. Pension
plan assets consist principally of corporate and government bonds and common stocks. Textron
offers health care and life insurance benefits for certain retired employees.
The following summarizes the change in the benefit obligation; the change in plan assets; the
funded status; and reconciliation to the amount recognized in the balance sheet for the pension
and postretirement benefit plans:
Postretirement Benefits
Pension Benefits Other than Pensions
December 30, January 1, December 30, January 1,
(In millions)2000 2000 2000 2000
Change in benefit obligation
Benefit obligation at beginning of year $3,665 $ 3,836 $ 603 $ 665
Service cost 101 109 67
Interest cost 265 252 45 41
Amendments 110 9(5) –
Effects of acquisitions 510 –5
Effects of dispositions (1) (6) ––
Plan participants’ contributions 4454
Actuarial (gains)/losses 80 (299) 27 (54)
Benefits paid (249) (227) (68) (65)
Foreign exchange rate changes (39) (23) ––
Curtailments ––(1) –
Benefit obligation at end of year $3,941 $ 3,665 $ 612 $ 603
Change in plan assets
Fair value of plan assets at beginning of year $5,342 $ 4,824 $ – $–
Actual return on plan assets 77 74 0 ––
Employer contributions 41 21 ––
Plan participants’ contributions 44––
Effects of acquisitions 412 ––
Effects of dispositions (1) (5) ––
Benefits paid (249) (227) ––
Foreign exchange rate changes (48) (27) ––
Fair value of plan assets at end of year $5,170 $ 5,342 $ – $–
Funded status of the plan $1,229 $ 1,677 $(612) $(603)
Unrecognized actuarial gain (871) (1,331) (88) (122)
Unrecognized prior service cost 154 88 (15) (16)
Unrecognized transition net asset (43) (61) ––
Net amount recognized in the
consolidated balance sheet $ 469 $ 373 $(715) $(741)
Amounts recognized in the consolidated
balance sheet consists of:
Prepaid benefit cost $ 621 $ 508 $ – $–
Accrued benefit liability (156) (144) (715) (741)
Intangible asset 27––
Accumulated other comprehensive loss 22––
Net amount recognized in the
consolidated balance sheet $ 469 $ 373 $(715) $(741)
Pension Benefits and Postretirement Benefits Other Than Pensions15
51 TEXTRON 2000 ANNUAL REPORT