US Airways 2011 Annual Report Download - page 100

Table of Contents
As of December 31, 2011, the assumed health care cost trend rates are 8.5% in 2012 and 8% in 2013, decreasing to 5% in 2019 and thereafter. As of
December 31, 2010, the assumed health care cost trend rates were 9% in 2011 and 8.5% in 2012, decreasing to 5% in 2019 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 December 31, 2011 (in millions):
1% Increase 1% Decrease
Effect on total service and interest costs $ 1 $ (1)
Effect on postretirement benefit obligation 16 (12)
Weighted average assumptions used to determine net periodic benefit cost were as follows:
Defined Benefit Pension Plans Other Postretirement Benefits
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31, December 31,
2011 2010 2009 2011 2010 2009
Discount rate 5.25% 5.5% 5.5% 4.93% 5.51% 5.98%
Expected return on plan assets 7.5% 7.5% 8% — — —
Rate of compensation increase 4% 4% 4% — — —
Components of the net and total periodic cost for pension and other postretirement benefits are as follows (in millions):
Defined Benefit Pension Plans Other Postretirement Benefits
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31, December 31,
2011 2010 2009 2011 2010 2009
Service cost $ 1 $ 1 $ 1 $ 3 $ 3 $ 2
Interest cost 3 3 3 8 8 9
Expected return on plan assets (3) (3) (3) — — —
Amortization of actuarial loss (gain) (1) — — 1 (3) (4) (6)
Total periodic costs $ 1 $ 1 $ 2 $ 8 $ 7 $ 5
(1) The estimated net actuarial loss for defined benefit and other postretirement benefit plans that will be amortized from accumulated other comprehensive
income into net periodic benefit cost in 2012 is less than $1 million.
In 2012, the Company expects to contribute $13 million to its other postretirement plans. No contributions are expected in 2012 for the Company's
defined benefit plans. The following benefits, which reflect expected future service, as appropriate, are expected to be paid from the defined benefit and other
postretirement plans (in millions):
Other
Postretirement
Defined Benefit Benefits before
Pension Plans Medicare Subsidy Medicare Subsidy
2012 $ 2 $ 13 $ —
2013 2 13 —
2014 2 12 —
2015 3 12 —
2016 3 12 —
2017 to 2021 17 66 (2)
The Company assumed that its pension plans' assets would generate a long-term rate of return of 7.5% at December 31, 2011. The expected long-term
rate of return assumption was developed by evaluating input from the plans' investment consultants, including their review of asset class return expectations
and long-term inflation assumptions.
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