E-Z-GO 2007 Annual Report Download - page 86

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Textron Inc.
For U.S. plan assets, comprising the majority of plan assets, asset allocation target ranges were established consistent with the investment
objectives, and the assets are rebalanced periodically. The expected long-term rate of return on plan assets was determined based on a variety of
considerations, including the established asset allocation targets and expectations for those asset classes, historical returns of the plans’ assets
and other market considerations. At December 29, 2007, the target allocation range is 44% to 70% for equity securities, 13% to 33% for debt
securities, and 7% to 13% for each of real estate and other alternative assets. For foreign plan assets, allocations are based on expected cash fl ow
needs and assessments of the local practices and markets. The percentages of the fair value of total U.S. pension plan assets by major category
are as follows:
December 29, December 30,
Asset Category 2007 2006
Equity securities 57% 59%
Debt securities 26 22
Real estate 10 10
Other 7 9
Total 100% 100%
Estimated Future Cash Flow Impact
Defi ned benefi ts under salaried plans are based on salary and years of service. Hourly plans generally provide benefi ts based on stated amounts
for each year of service. Our funding policy is consistent with applicable laws and regulations. In 2008, we expect to contribute in the range of
$53 million to $57 million to fund our qualifi ed pension plans and foreign plans. We do not expect to contribute to our other postretirement
benefi t plans. The benefi t payments provided below refl ect expected future employee service, as appropriate, that are expected to be paid, net of
estimated participant contributions, but do not include the Medicare Part D subsidy we expect to receive. The benefi t payments are based on the
same assumptions used to measure our benefi t obligation at the end of fi scal 2007. While pension benefi t payments primarily will be paid out of
qualifi ed pension trusts, we will pay postretirement benefi ts other than pensions out of our general corporate assets as follows:
Post-
retirement Expected
Benefi ts Medicare
Pension Other than Part D
(In millions) Benefi ts Pensions Subsidy
2008 $ 317 $ 79 $ (6)
2009 323 80 (7)
2010 329 80 (7)
2011 340 80 (8)
2012 351 78 (8)
2013 - 2017 1,894 360 (36)
Note 13. Income Taxes
We conduct business globally and, as a result, fi le numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and
various state and foreign jurisdictions. For all of our U.S. subsidiaries, we fi le a consolidated federal income tax return. Income from continuing
operations before income taxes is as follows:
(In millions) 2007 2006 2005
United States $ 1,105 $ 796 $ 574
Foreign 195 179 165
Total $ 1,300 $ 975 $ 739
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