Research And Development

12 Months Ended

Jul. 01, 2011


*NOTE 16:*	*RESEARCH AND DEVELOPMENT*

Company-sponsored research and product development costs are expensed as incurred. These costs were $335.6 million, $325.8 million and $243.5 million in fiscal 2011, 2010 and 2009, respectively, and are included in the “Engineering, selling and administrative expenses” line item in our Consolidated Statement of Income. Customer-sponsored research and development costs are incurred pursuant to contractual arrangements and are accounted for principally by the cost-to-cost percentage-of-completion method. Customer-sponsored research and development costs incurred under U.S. Government-sponsored contracts require us to provide a product or service meeting certain defined performance or other specifications (such as designs). Customer-sponsored research and development was $647.3 million, $720.9 million and $759.2 million in fiscal 2011, 2010 and 2009, respectively. Customer-sponsored research and development is included in our revenue and cost of product sales and services.

- Definition

Description, amount and terms involving research, development, and computer software activities, including contracts and arrangements to be performed for others and with federal government. Includes costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility and in-process research and development acquired in a business combination consummated during the period.

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