American Airlines 2000 Annual Report Download - page 31

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Certain employee groups make contributions
toward funding a portion of their retiree health care
benefits during their working lives. AMR funds benefits
as incurred and makes contributions to match employee
prefunding.
The following table provides a reconciliation of
the changes in the plans’ benefit obligations and fair
value of assets for the years ended December 31, 2000
and 1999, and a statement of funded status as of
December 31, 2000 and 1999 (in millions):
Pension Benefits Other Benefits
200 0 1999 2000 1999
Recon ciliation of ben efit
obligation
Obligation at January 1 $5,628 $6,117 $1 ,306 $1,526
Service cost 21 3 236 43 56
Interest cost 467 433 1 08 108
Actuarial loss (gain) 499 (849) 32 8 (311)
Plan amendments –75 ––
Benefit payments (373) (388) (7 7) (70)
Curtailments/Special
termination benefits –4–(3)
Obligation at December 31 $6,434 $5,628 $1 ,708 $1,306
Recon ciliation of fair
value of plan assets
Fair value of plan assets
at January 1 $5,282 $5,564 $72$62
Actual return on plan assets 735 751
Employer contributions 85 100 88 79
Benefit payments (373) (388) (7 7) (70)
Transfers 2(1) ––
Fair value of plan assets
at December 31 $5,731 $5,282 $88$72
Funded status
Accumulated benefit
obligation (ABO) $5,3 06 $4,700 $1 ,70 8 $1,306
Projected benefit
obligation (PBO) 6,434 5,628 ––
Fair value of assets 5,731 5,282 88 72
Funded status at December 31 (7 03) (346) (1 ,620 ) (1,234)
Unrecognized loss (gain) 523 288 (51 ) (395)
Unrecognized prior
service cost 1 29 139 (35) (40)
Unrecognized transition
asset (6) (7) ––
Prepaid (accrued)
benefit cost $(57) $74$(1 ,706) $(1,669)
At December 31, 2000 and 1999, plan assets of
approximately $88 million and $71 million, respectively,
were invested in shares of mutual funds managed by a
subsidiary of AMR.
The following tables provide the components of
net periodic benefit cost for the years ended Decem-
ber 31, 2000, 1999 and 1998 (in millions):
Pension Benefits
200 0 1999 1998
Compon en ts of n et per iodic
benefit cost
Defined benefit plans:
Service cost $21 3 $ 236 $ 213
Interest cost 467 433 418
Expected return on assets (490) (514) (478)
Amortization of:
Transition asset (1 ) (4) (11)
Prior service cost 1 0 54
Unrecognized net loss 1 7 21 22
Settlement loss ––6
Net periodic benefit cost for
defined benefit plans 21 6 177 174
Defined contribution plans 1 74 155 158
Total $390 $ 332 $ 332
Other Benefits
200 0 1999 1998
Compon en ts of n et per iodic
benefit cost
Service cost $43 $56 $52
Interest cost 1 08 108 99
Expected return on assets (7) (6) (5)
Amortization of:
Prior service cost (5) (5) (5)
Unrecognized net gain (1 4) –(2)
Net periodic benefit cost $1 25 $ 153 $ 139
The following table provides the amounts recog-
nized in the consolidated balance sheets as of Decem-
ber 31, 2000 and 1999 (in millions):
Pension Benefits Other Benefits
200 0 1999 2000 1999
Prepaid benefit cost $1 07 $ 244 $–$–
Accrued benefit liability (22 5) (170) (1 ,706 ) (1,669)
Additional minimum liability (21 ) (15) ––
Intangible asset 72 13 ––
Accumulated other
comprehensive income 1 0 2––
Net amount recognized $(57) $74 $(1 ,706 ) $(1,669)
The following assumptions were used by the
Company in the measurement of the benefit obligation
as of December 31:
Pension Benefits Other Benefits
200 0 1999 2000 1999
Weighted-average assum ptions
Discount rate 7.75% 8.25% 7.7 5% 8.25%
Salary scale 4.2 6 4.26 ––
Expected return on plan assets 9.5 0 9.50 9.50 9.50