National Oilwell Varco 2002 Annual Report Download - page 38

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secured by a guarantee, contain financial covenants and expire in 2006. These instruments carry
interest at a pre-agreed upon percentage point spread from either the prime interest rate or
NIBOR. Borrowings against these additional credit facilities totaled $93 million at December 31,
2002 and an additional $39 million had been used for letters of credit and guarantees.
6. Pension Plans
National Oilwell and its consolidated subsidiaries have pension plans covering substantially all of
its employees. Defined-contribution pension plans cover most of the U.S. and Canadian
employees and are based on years of service, a percentage of current earnings and matching of
employee contributions. For the years ended December 31, 2002, 2001 and 2000, pension
expense for defined-contribution plans was $9.1 million, $6.0 million and $4.2 million, and all
funding is current.
Certain retired or terminated employees of predecessor or acquired companies also participate in
defined benefit plans in the United States which have been retained by National Oilwell
subsidiaries but which no longer accrue benefits. Active employees are ineligible to participate in
any of these defined benefit plans. Our subsidiaries in the United Kingdom have a defined benefit
pension plan whose participants are primarily retired and terminated employees who are no
longer accruing benefits. In addition, approximately 160 U.S. retirees and spouses participate in
defined benefit health care plans of predecessor or acquired companies that provide
postretirement medical and life insurance benefits. Pension assets are principally invested in a
fixed income bond fund, equity securities, United Kingdom government securities and cash
deposits.
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