US Airways 2003 Annual Report Download - page 46

Table of Contents
The Company believes that its long-term asset allocation on average will approximate the targeted allocation. The Company regularly reviews its actual
asset allocation and periodically rebalances its investments to its targeted allocation when considered appropriate.
Pension expense increases as the expected rate of return on plan assets decreases. Lowering the expected long-term rate of return on plan assets by one-
half of a percentage point (from 8.00% to 7.50%) would increase US Airways' 2004 pension expense by approximately $8 million.
US Airways discounted both its future pension obligations and its other postretirement benefit obligations using a rate of 6.00% at September 30, 2003,
compared to 6.75% at September 30, 2002. The assumed discount rate is based on the current rates earned on long-term bonds that receive one of the two
highest ratings given by a recognized rating agency. Both liabilities and future expense increase as the discount rate is reduced. Lowering the discount rate by
one-half of a percentage point would have increased US Airways' pension and other postretirement liabilities at September 30, 2003 by approximately $189
million and $124 million, respectively. Lowering the discount rate used to calculate US Airways' pension and post-retirement benefit expenses by one-half of
a percentage point would increase 2004 expenses by approximately $3 million and $6 million, respectively.
At September 30, 2003, US Airways assumed a health care cost trend rate of 9% in 2004 decreasing to 5% in 2009 and thereafter when computing its
other postretirement benefit liabilities and expenses. This compares to a health care cost trend rate of 10% in 2003 decreasing to 5% in 2008 and thereafter.
Both the liability and future expense increase as the health care cost trend rate is increased. Increasing the health care cost trend rate by one percentage point
would increase the Company's other postretirement liabilities and service and interest costs as of September 30, 2003 by approximately $258 million and $27
million, respectively.
Future changes in plan asset returns, assumed discount rates, assumed health care trend rates and various other factors related to the participants in the
Company's pension and other postretirement benefit plans will impact future expenses and liabilities. The Company cannot predict with certainty what these
factors will be in the future.
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