American Express 2002 Annual Report Download - page 79

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I77 AXP INOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The components of the net pension cost for all defined benefit plans accounted for under SFAS No. 87, “Employers’ Accounting
for Pensions,” are as follows:
(Millions) 2002 2001 2000
Service cost $ 106 $ 102 $95
Interest cost 112 106 98
Expected return on plan assets (127) (122) (102)
Amortization of:
Prior service cost (9) (10) (9)
Transition obligation (1) (1) 3
Reversion gain ——(4)
Recognized net actuarial loss (gain) 6(1) 5
Settlement/curtailment loss (gain) 12 (1) (22)
Net periodic pension benefit cost $99 $73 $64
The funded status of the company’s pension plans is based on valuations as of September 30. The following tables provide
a reconciliation of the changes in the plans’ benefit obligation and fair value of assets for all plans accounted for under
SFAS No. 87:
RECONCILIATION OF CHANGE IN BENEFIT OBLIGATION
(Millions) 2002 2001
Benefit obligation, October 1 prior year $ 1,541 $ 1,403
Service cost 106 102
Interest cost 112 106
Benefits paid (52) (43)
Actuarial loss 141 31
Settlements/curtailments (66) (42)
Foreign currency exchange rate changes 63 (16)
Benefit obligation at September 30, $ 1,845 $ 1,541
RECONCILIATION OF CHANGE IN FAIR VALUE OF PLAN ASSETS
(Millions) 2002 2001
Fair value of plan assets, October 1 prior year $ 1,190 $ 1,480
Actual loss on plan assets (78) (239)
Employer contributions 306 47
Benefits paid (52) (43)
Settlements (65) (42)
Foreign currency exchange rate changes 51 (13)
Fair value of plan assets at September 30, $ 1,352 $ 1,190
The following table reconciles the plans’ funded status to the amounts recognized on the Consolidated Balance Sheets:
FUNDED STATUS
(Millions) 2002 2001
Funded status at September 30, $ (493) $ (351)
Unrecognized net actuarial loss 563 209
Unrecognized prior service cost (28) (42)
Unrecognized net transition obligation —(2)
Fourth quarter contributions (net of benefit payments) 64
Net amount recognized at December 31, $48 $ (182)