American Airlines 2006 Annual Report Download - page 82

Download and view the complete annual report

Please find page 82 of the 2006 American Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 113

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113

78
10. Retirement Benefits (Continued)
Pre-65 Individuals Post-65 Individuals
2006 2005 2006 2005
Assumed health care trend rates at
December 31
Health care cost trend rate assumed for
next year
9.0%
4.5%
9.0%
9.0%
Rate to which the cost trend rate is
assumed to decline (the ultimate
trend rate)
4.5%
4.5%
4.5%
4.5%
Year that the rate reaches the ultimate
trend rate
2010
-
2010
2010
A one percentage point change in the assumed health care cost trend rates would have the following effects (in
millions):
One Percent
Increase
One Percent
Decrease
Impact on 2006 service and interest cost $ 26 $ (24)
Impact on postretirement benefit obligation
as of December 31, 2006
$ 243
$ (235)
The Company expects to contribute approximately $364 million to its defined benefit pension plans and $13
million to its postretirement benefit plan in 2007. In addition to making contributions to its postretirement benefit
plan, the Company funds the majority of the benefit payments under this plan. This estimate reflects the
provisions of the Pension Funding Equity Act of 2004 and the Pension Protection Act of 2006.
The following benefit payments, which reflect expected future service as appropriate, are expected to be paid:
Pension Other
2007 $ 543 $ 187
2008 584 196
2009 689 204
2010 681 214
2011 662 223
2012 – 2016 3,843 1,163