(In thousands of dollars except per share amounts) We also discontinued certain interest rate swaps that were previously designated as fair value hedges of long- term debt. This action resulted in a gain that will be recognized as a reduction of interest expense over the term of the associated hedged debt using the interest rate method of amortization. The unrecognized portion of the gain is presented as an adjustment to long-term debt. The revolving line of credit facility involves uncollateralized financing arrangements with a syndicate of U.S. banks. A maximum amount of $150,000 is available under the revolving line of credit facility, which expires June 15, 2003. Interest rates on borrowings under the line vary with LIBOR, the money market rate, or the prime rate. Similar financing arrangements were associated with the term note, which was repaid in 2002. Provisions of the debt agreements include covenants customary to such agreements that require us to maintain specified minimum or maximum financial measures and place limitations on various investing and financing activities. The agreements also permit the lenders to accelerate repayment requirements in the event of a material adverse event. Our most restrictive covenants require us to maintain a minimum consolidated net worth and a maximum consolidated debt to consolidated operating cash flow ratio, as defined in the agreements. At September 30, 2002, we had the ability to pay dividends and purchase the company’s common stock up to $109,220. Among the changes in the retirement pension benefit obligation and plan assets are increases due to a business acquisition that occurred in 2001. In the table that follows, these increases are reflected in 2002, which is the year the amounts were determined. Plan amendments to retirement healthcare benefits in 2002 relate to changes in cost-sharing provisions. We provide various benefits to eligible members of our company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, and retirement healthcare benefits. The amount of expense associated with defined contribution plans totaled $11,927 in 2002, $11,239 in 2001, and $11,062 in 2000. Information regarding our retirement pension benefits and retirement healthcare benefits are provided in the tables that follow. Certain key management members may elect to defer the payment of a portion of their compensation to future periods. These deferrals are recorded as deferred compensation, and individual member balances are increased or decreased as if they were held in specified investments, including common stock of the company. Deferred compensation balances are payable upon the retirement or other termination of a participating member, or as otherwise specified by plan documents. Engine Systems incurred $4,013 for 202 members. Both cost of goods sold and selling, general, and administrative expense were affected. We paid $6,656 of these expenses in 2002, and the remaining accrual is expected to be paid predominantly in the first quarter of 2003. For retirement healthcare benefits, we assumed net healthcare cost trend rates of 10.00% in 2003, decreasing gradually to 4.50% in 2008, and remaining at 4.50% thereafter. A 1.00% increase in assumed healthcare cost trend rates would have increased the total of the service and interest cost components by $1,137 and increased the benefit obligation at the end of the year by $9,862 in 2002. Likewise, a 1.00% decrease in the assumed rates would have decreased the total of service and interest cost components by $863 and decreased the benefit obligation by $8,522 in 2002. Included in salaries and other member benefits are accrued termination benefits for 36 members totaling $1,389 at September 30, 2002. Termination benefits were provided in connection with workforce management programs to better align our workforce with expected demand. Expenses for these termination benefits totaled $8,045 in 2002, of which Industrial Controls incurred $4,032 for 233 members and Aircraft L. Retirement benefits: K. Accounts payable and accrued expenses: At September 30, 2002 2001 Accounts payable $22,739 $27,613 Salaries and other member benefits 19,846 31,872 Deferred compensation 7,701 7,481 Taxes, other than on income 4,058 4,586 Other items—net 20,651 19,628 $74,995 $91,180 38 Notes to Consolidated Financial Statements