KENNAMETAL INC.  / AR 2002 49 The components of other postretirement cost include the following: (in thousands) 2002 2001 2000 Service cost $ 1,291 $ 1,130 $ 1,168  Interest cost 2,950 2,744 2,536  Amortization of prior service cost 406 406 406  Recognition of actuarial gains (247) (753) (465)  Net cost $ 4,400 $ 3,527 $ 3,645 Accrued postretirement benefit obligations of $42.1 million and $41.1 million at June 30, 2002 and 2001, respectively, are included in other long-term liabilities. The discount rate used to determine the present value of the other postretirement benefit obligation was 7.3%, 7.5% and 8.0% in 2002, 2001 and 2000, respectively. The annual assumed rate of increase in the per capita cost of covered benefits (the health care cost trend rate) for health care plans was 10.0% in 2002 and was assumed to decrease gradually to 5.0% in 2007 and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the cost components and obligation for the health care plans. A change of one percentage point in the assumed health care cost trend rates would have the following effects on the total service and interest cost components of other postretirement cost and the other postretirement benefit obligation at June 30, 2002: In addition we maintain a supplemental early retirement plan for various eligible executives. The accrued benefit obligation of $13.9 million related to this plan, is included as a component of other long-term liabilities at June 30, 2002. We do not maintain any assets to fund the obligations under this plan. We also sponsor several defined contribution pension plans. Pension costs for defined contribution plans were $9.1 million, $12.1 million and $9.8 million in 2002, 2001 and 2000, respectively. Effective October 1, 1999, company contributions to U.S. defined contribution pension plans are made primarily in our capital stock, resulting in the issuance of 102,013 and 247,860 shares during 2002 and 2001, respectively, with a market value of $3.8 million and $6.9 million, respectively. We temporarily suspended all company contributions to the defined contribution plans effective January 1, 2002. We provide for postemployment benefits pursuant to SFAS No. 112, “Employers’ Accounting for Postemployment Benefits.” We accrue the cost of separation and other benefits provided to former or inactive employees after employment but before retirement. Postemployment benefit costs were not significant in 2002, 2001 and 2000. Note 11 Accumulated Other Comprehensive Loss The components of accumulated other compre- hensive loss consist of the following: (in thousands) 1% Increase 1% Decrease Effect on total of service and interest cost components $ 190 $ (170)  Effect on other postretirement benefit obligation 1,750 (1,540)  As of June 30, 2002  (in thousands)  Pre-tax Tax After-tax  Unrealized loss on marketable equity securities available-for-sale $ (791) $ (301) $ (490)  Unrealized loss on derivatives designated and qualified  as cash flow hedges (9,339) (3,543) (5,796)  Minimum pension liability adjustment (7,195) (2,730) (4,465)  Foreign currency translation adjustments (47,520) (3,492) (44,028)  Total accumulated other comprehensive loss $ (64,845) $ (10,066) $ (54,779) As of June 30, 2001 (in thousands) Pre-tax Tax After-tax  Unrealized gain on marketable equity securities available-for-sale $ 2,104 $ 820 $ 1,284  Unrealized loss on derivatives designated and qualified  as cash flow hedges (4,203) (1,681) (2,522)  Minimum pension liability adjustment (5,819) (2,299) (3,520)  Foreign currency translation adjustments (62,602) 4,530 (67,132)  Total accumulated other comprehensive loss $ (70,520) $ 1,370 $ (71,890)