Kodak 2002 Annual Report Download - page 69

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Financials
69
NOTE 17: OTHER POSTRETIREMENT BENEFITS
The Company provides healthcare, dental and life insurance
benefits to U.S. eligible retirees and eligible survivors of retirees.
In general, these benefits are provided to U.S. retirees that are
covered by the Company’s KRIP plan. Additionally, these benefits
are funded from the general assets of the Company as they are
incurred. The Company’s subsidiaries in the United Kingdom and
Canada offer similar healthcare benefits.
Changes in the Company’s benefit obligation and funded
status are as follows:
(in millions) 2002 2001
Net benefit obligation at beginning
of year $ 3,110 $ 2,659
Service cost 16 15
Interest cost 213 199
Plan participants’ contributions 43
Plan amendments 31 —
Actuarial loss 549 453
Benefit payments (239) (216)
Currency adjustments 3(3)
Net benefit obligation at end of year $ 3,687 $ 3,110
Funded status at end of year $ (3,687) $ (3,110)
Unamortized net actuarial loss 1,600 1,109
Unamortized prior service cost (360) (451)
Net amount recognized and recorded
at end of year $ (2,447) $ (2,452)
The U.S. plan represents approximately 98% of the total
other postretirement net benefit obligation and, therefore, the
weighted-average assumptions used to compute the other
postretirement benefit amounts approximate the U.S. assumptions,
which were as follows:
2002 2001
Discount rate 6.50% 7.25%
Salary increase rate 4.25% 4.25%
Healthcare cost trend (a) 12.00% 10.00%
(a) decreasing to 5.00% by 2010
(in millions) 2002 2001 2000
Components of net
postretirement benefit cost
Service cost $16 $15 $14
Interest cost 213 199 172
Amortization of:
Prior service cost (60) (60) (67)
Actuarial loss 58 39 17
227 193 136
Curtailments —— (6)
Total net postretirement
benefit cost $ 227 $ 193 $ 130
The Company will no longer fund healthcare and dental
benefits for employees who elected to participate in the
Company’s Cash Balance Plus plan, effective January 1, 2000.
This change is not expected to have a material impact on the
Company’s future postretirement benefit cost.
Assumed healthcare cost trend rates have a significant effect
on the amounts reported for the healthcare plans. A one
percentage point change in assumed healthcare cost trend rates
would have the following effects:
1% 1%
increase decrease
Effect on total service and
interest cost components $ 1 $ (7)
Effect on postretirement
benefit obligation 29 (114)