American Airlines 2010 Annual Report Download - page 80

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77
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, 2010 and 2009, and a statement of funded
status as of December 31, 2010 and 2009 (in millions):
Pension Benefits
Retiree Medical and Other
Benefits
2010
2009
2010
2009
Reconciliation of benefit obligation
Obligation at January 1
$ 12,003
$ 10,884
$ 2,827
$ 2,779
Service cost
366
333
60
59
Interest cost
737
712
165
179
Actuarial (gain) loss
442
675
263
67
Plan amendments
1
-
(78)
(101)
Benefit payments
(581)
(601)
(140)
(156)
Obligation at December 31
$ 12,968
$ 12,003
$ 3,097
$ 2,827
Reconciliation of fair value of plan assets
Fair value of plan assets at January 1
$ 7,051
$ 6,714
$ 206
$ 161
Actual return on plan assets
837
928
17
34
Employer contributions
466
10
151
167
Benefit payments
(581)
(601)
(140)
(156)
Fair value of plan assets at December 31
$ 7,773
$ 7,051
$ 234
$ 206
Funded status at December 31
$ (5,195)
$ (4,952)
$ (2,863)
$ (2,621)
Amounts recognized in the
consolidated balance sheets
Current liability
$ 8
$ 9
$ 173
$ 167
Noncurrent liability
5,187
4,943
2,690
2,454
$ 5,195
$ 4,952
$ 2,863
$ 2,621
Amounts recognized in
other comprehensive loss
Net actuarial loss (gain)
$ 3,052
$ 3,008
$ (128)
$ (402)
Prior service cost (credit)
81
94
(205)
(147)
$ 3,133
$ 3,102
$ (333)
$ (549)