American Airlines 2009 Annual Report Download - page 76

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73
10. Retirement Benefits (Continued)
In addition to pension benefits, retiree medical and other postretirement benefits, including certain health care and
life insurance benefits (which provide secondary coverage to Medicare), are provided to retired employees. The
amount of health care benefits is limited to lifetime maximums as outlined in the plan. Certain employees of
American and employees of certain other subsidiaries may become eligible for these benefits if they satisfy
eligibility requirements during their working lives.
Certain employee groups make contributions toward funding a portion of their retiree health care benefits during
their working lives. The Company funds benefits as incurred and makes contributions to match employee
prefunding.
The following table provides a reconciliation of the changes in the pension and retiree medical and other benefit
obligations and fair value of assets for the years ended December 31, 2009 and 2008, and a statement of funded
status as of December 31, 2009 and 2008 (in millions):
Pension Benefits
Retiree Medical and Other
Benefits
2009
2008
2009
2008
Reconciliation of benefit obligation
Obligation at January 1
$ 10,884
$ 10,451
$ 2,779
$ 2,672
Service cost
333
324
59
54
Interest cost
712
684
179
172
Actuarial (gain) loss
675
254
67
22
Plan amendments
-
(14)
(101)
-
Benefit payments
(601)
(815)
(156)
(141)
Obligation at December 31
$ 12,003
$ 10,884
$ 2,827
$ 2,779
Reconciliation of fair value of plan assets
Fair value of plan assets at January 1
$ 6,714
$ 9,099
$ 161
$ 224
Actual return on plan assets
928
(1,659)
34
(75)
Employer contributions
10
89
167
153
Benefit payments
(601)
(815)
(156)
(141)
Fair value of plan assets at December 31
$ 7,051
$ 6,714
$ 206
$ 161
Funded status at December 31
$ (4,952)
$ (4,170)
$ (2,621)
$ (2,618)
Amounts recognized in the
consolidated balance sheets
Current liability
$ 9
$ 11
$ 167
$ 163
Noncurrent liability
4,943
4,159
2,454
2,455
$ 4,952
$ 4,170
$ 2,621
$ 2,618
Amounts recognized in
other comprehensive loss
Net actuarial loss (gain)
$ 3,008
$ 2,839
$ (402)
$ (458)
Prior service cost (credit)
94
108
(147)
(53)
$ 3,102
$ 2,947
$ (549)
$ (511)