E-Z-GO 2007 Annual Report Download - page 91

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Notes to the Consolidated Financial Statements
70
Based upon information currently available, we estimate that our potential environmental liabilities are within the range of $42 million to
$156 million. At the end of 2007, environmental reserves of approximately $87 million, of which $10 million are classifi ed as current liabilities,
have been established to address these specifi c estimated potential liabilities. We estimate that we will likely pay our accrued environmental
remediation liabilities over the next fi ve to 10 years. Expenditures to evaluate and remediate contaminated sites approximated $7 million,
$7 million and $6 million in 2007, 2006 and 2005, respectively.
Leases
Rental expense approximated $107 million for 2007 and $89 million for each year in 2006 and 2005. Future minimum rental commitments
for noncancelable operating leases in effect at the end of 2007 approximated $66 million for 2008, $57 million for 2009, $47 million for 2010,
$36 million for 2011, $28 million for 2012 and a total of $173 million thereafter.
Loan Commitments
At December 29, 2007, our Finance group had unused commitments to fund new and existing customers under $1.6 billion of committed
revolving lines of credit, compared with $1.3 billion at December 30, 2006. These loan commitments generally have an original duration of
less than three years and do not necessarily represent future cash requirements since many of the agreements will not be used to the extent
committed or will expire unused. We are not exposed to interest rate changes on these commitments since the interest rates are not set until
the loans are funded.
Note 16. Research and Development
Company-funded and customer-funded research and development costs are as follows:
(In millions) 2007 2006 2005
Company-funded $ 365 $ 351 $ 326
Customer-funded 449 435 366
Total research and development $ 814 $ 786 $ 692
Our customer-funded research and development costs primarily are related to U.S. Government contracts, including the ARH, V-22, VH-71 and
H-1 development contracts.
As part of the realignment of Bell/Agusta Aerospace Company LLC (“BAAC”) (see Note 18), Bell Helicopter, Agusta S.p.A. and two of its affi liated
companies (collectively, “Agusta”) agreed to share certain Model BA609 development costs. On behalf of BAAC, Agusta will incur development
costs to enhance its investment in BAAC. Agusta also may make cash contributions to reimburse portions of our development costs incurred on
behalf of BAAC. Based on development costs incurred, we received $11 million, $19 million and $43 million in cash contributions from Agusta,
which were recorded in income in 2007, 2006 and 2005, respectively.
During 2005, Bell Helicopter entered into four separate risk-sharing arrangements. Two of the arrangements are with commercial participants
in the development of the Bell Model 429 aircraft. In 2007, one agreement was modifi ed to reduce the amount of cash and in-kind development
efforts required from the participant, with corresponding reductions in the entitlements the participant may obtain upon future Model 429
production and sales. The arrangements require contributions from the participants totaling $14 million, which are due once the development
effort reaches certain predetermined milestones, as well as in-kind development contributions from one participant. The other two arrangements
are with Canadian governmental organizations. These arrangements, which currently include the Model 429 aircraft and may potentially include
certain future aircraft, each require cash contributions of up to CAD 115 million from the participants, based on a percentage of qualifying
research and development costs incurred.
Each of the participants under these arrangements is entitled to payments from Bell Helicopter, with the commercial participants also entitled to
discounts, based on future sales of the Model 429 aircraft. In addition, there are certain requirements related to production of future Model 429
aircraft in Canada. Based on the development activities completed and costs incurred, we have recorded income of $22 million, $22 million and
$35 million in 2007, 2006 and 2005, respectively, related to these arrangements.
In 2007, 2006 and 2005, we received, or were due to receive, $33 million, $41 million and $78 million, respectively, in cost reimbursements of
company-funded amounts from our risk-sharing partners. Based on these reimbursements, our net company-funded costs totaled $332 million,
$310 million and $248 million in 2007, 2006 and 2005, respectively.