US Airways 2007 Annual Report Download - page 159

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
US Airways assumed discount rates for measuring its other postretirement benefit obligations, based on a hypothetical portfolio of
high quality publicly traded U.S. bonds (Aa rated, non-callable or callable with make-whole provisions), for which the timing and cash
outflows approximate the estimated benefit payments of the other postretirement benefit plans.
As of September 30, 2007, the assumed health care cost trend rates are 10% in 2008 and 9% in 2009, decreasing to 5.5% in 2013
and thereafter. As of September 30, 2006, the assumed health care cost trend rates were 10% in 2007 and 9% in 2008, decreasing to 5.5%
in 2012 and thereafter. The assumed health care cost trend rates could have a significant effect on amounts reported for retiree health care
plans. A one-percentage point change in the health care cost trend rates would have the following effects on other postretirement benefits
as of September 30, 2007 (in millions):
1% Increase 1% Decrease
Effect on total service and interest costs $ 1 $ (1)
Effect on postretirement benefit obligation 11 (9)
Weighted average assumptions used to determine net periodic benefit cost were as follows:
Defined Benefit Pension
Plans Other Postretirement Benefits
Predecessor Company Successor Company Predecessor Company
Nine Months Ended Year Ended Year Ended Three Months Ended Nine Months Ended
September 30, December 31, December 31, December 31, September 30,
2005 2007 2006 2005 2005
Discount rate 6.00% 5.67% 5.3% 5.30% 5.80%
Expected return on plan assets 7.33% — — — —
Rate of compensation increase 3.73% — — — —
Components of the net and total periodic cost for pension benefits (in millions):
Predecessor Company
Nine Months Ended
September 30,
2005
Service cost $ 1
Interest cost 6
Expected return on plan assets (5)
Net periodic costs 2
Curtailment/settlement gains (801)
Total periodic costs (benefits) $ (799)
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