American Airlines 2008 Annual Report Download - page 81

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78
10. Retirement Benefits (Continued)
At December 31, 2008 and 2007, pension benefit plan assets of $460 million and $127 million, respectively, and
retiree medical and other benefit plan assets of $158 million and $220 million, respectively, were invested in
shares of certain mutual funds.
The following tables provide the components of net periodic benefit cost for the years ended December 31, 2008,
2007 and 2006 (in millions):
Pension Benefits
2008
2007
2006
Components of net periodic benefit cost
Defined benefit plans:
Service cost
$ 324
$ 370
$ 399
Interest cost
684
672
641
Expected return on assets
(789)
(747)
(669)
Amortization of:
Transition asset
-
-
(1)
Prior service cost
16
16
16
Settlement
103
-
-
Unrecognized net loss
3
25
81
Net periodic benefit cost for
defined benefit plans
341
336
467
Defined contribution plans
170
166
164
$ 511
$ 502
$ 631
Retiree Medical and Other Benefits
2008
2007
2006
Components of net periodic benefit cost
Service cost
$ 54
$ 70
$ 78
Interest cost
172
194
194
Expected return on assets
(20)
(18)
(15)
Amortization of:
Prior service cost
(13)
(13)
(10)
Unrecognized net loss (gain)
(22)
(7)
1
Net periodic benefit cost
$ 171
$ 226
$ 248
The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized from
Accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $145 million
and $8 million, respectively. The estimated net gain and prior service credit for the retiree medical and other
postretirement plans that will be amortized from Accumulated other comprehensive income into net periodic
benefit cost over the next fiscal year are $14 million and $8 million, respectively.
Pension Benefits
Retiree Medical and Other
Benefits
2008
2007
2008
2007
Weighted-average assumptions used to
determine benefit obligations as of
December 31
Discount rate
6.50%
6.50%
6.50%
6.50%
Salary scale (ultimate)
3.78
3.78
-
-