8. [Analysis of pension plan disclosures] Exhibit 12P-3 con- tairs pension plan data from the financial statement footnotes of AMR Corporation [AMR].

a. The PBO reconciliation shows a large actuarial gain (loss) in 1999 (2000) Explain why.

b. Calculate the following measures of pension cost for 1998-2000: (i) Recurring cost (ii) Gross pension cost (iii) Nonsmoothed pension cost

c. Calculate the rate of return on plan assets for 1999 and 2000 and discuss the effect of variations in that return on pension cost.

d. Forecast the 2001 pension cost for AMR, stating any assumptions.

e. Calculate and justify the adjustments you would make to AMR's balance sheer at December 31, 1999 and 2000 to re- flect the economic position of its pension plans.

f. State the principal reason for the difference between the ad- justments in part e for 1999 and 2000.