American Airlines 2002 Annual Report Download - page 82
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80
12. Retirement Benefits (Continued)
Pension Benefits Other Benefits
2002 2001 2002 2001
Weighted-average assumptions as of
December 31
Discount rate 6.75% 7.50% 6.75% 7.50%
Salary scale 3.78 3.93 - -
Expected return on plan assets 9.25 9.50 9.25 9.50
The assumed health care cost trend rate was six percent in 2003, decreasing gradually to an ultimate rate
of 4.5 percent by 2005 for pre-65 individuals and twelve percent in 2003, decreasing gradually to an ultimate rate
of 4.5 percent by 2010 for post-65 individuals. The previously assumed health care cost trend rate was six
percent in 2002, decreasing gradually to an ultimate rate of 4.5 percent by 2004.
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 2002 service and interest cost $ 29 $ (27)
Impact on postretirement benefit obligation
as of December 31, 2002 $ 230 $ (218)