RAYTHEON COMPANY 333 Notes to Consolidated Financial Statements (Continued) 33333333333333333333333333333333333333333333 Funded Status – amounts recognized on the Balance Sheet  Change in Benefit Obligation Change in Plan Assets Weighted-Average Year-End Benefit Obligation Assumptions  Components of Net Periodic Benefit Cost Funded Status – unrecognized components Pension Benefits Other Benefits (In millions) 2003 2002 2003 2002 Benefit obligation at  beginning of year $12,023 $11,460 $1,579 $1,547 Service cost 271 279 15 21 Interest cost 799 792 106 105 Plan participants’  contributions 29 27 — — Amendments 6 3 (46) (348) Actuarial loss  1,225 315 122 430 Curtailments — — — (41) Foreign exchange 52 32 — — Benefits paid (909) (885) (119) (135) Benefit obligation at  end of year $13,496 $12,023 $1,657 $1,579 Pension Benefits Other Benefits (In millions) 2003 2002 2003 2002 Fair value of plan assets at  beginning of year $9,156 $10,429 $ 353 $ 410 Actual return on plan assets 1,629 (487) 25 (22) Divestitures (10) — — — Company contributions 69 51 133 100 Plan participants’  contributions 29 27 — — Transfers between plans (10) — 8 — Foreign exchange 32 21 — — Benefits paid (909) (885) (119) (135) Fair value of plan assets at  end of year $9,986 $ 9,156 $400 $ 353 Pension Benefits Other Benefits (In millions)  December 31:  2003 2002 2003 2002 Funded status $(3,510) $(2,867) $(1,257) $(1,226) Unrecognized actuarial loss  5,265 4,859 797 723 Unrecognized transition  (asset) obligation — (1) 160 185 Contributions — — — — Unrecognized prior  service cost 170 184 (348) (347) Prepaid (accrued)  benefit cost $ 1,925 $2,175 $( 6 4 8 ) $ (665) Pension Benefits (In millions) 2003 2002 2001 Service cost $271 $ 279 $ 258 Interest cost 799 792 797 Expected return on plan assets (970) (1,194) (1,249) Amortization of transition asset — (4) (5) Amortization of prior service cost 19 20 19 Recognized net actuarial loss (gain) 196 20 (113) Loss due to curtailments/settlements — 9 9 Net periodic benefit cost (income) $ 315 $ (78) $ (284) Pension Benefits Other Benefits December 31: 2003 2002 2003 2002 Discount rate 6.22% 6.95% 6.25% 7.00% Rate of compensation increase 4.49% 4.46% 4.50% 4.50% Health care trend rate in  the next year 13.50% 13.50% Gradually declining to a trend  rate of  5.75% 5.75% In the years beyond 2014 2013 Pension Benefits Other Benefits (In millions)  December 31:  2003 2002 2003 2002 Prepaid benefit cost $ 669 $ 661 $ 34 $ 15 Accrued benefit liability (2,384) (1,963) (682) (680) Intangible asset 199 217 — — Employer contributions 6 6 — — Accumulated other  comprehensive income 3,435 3,254 — — Prepaid (accrued)  benefit cost $ 1,925 $ 2,175 $(648) $(665) The table above reconciles the difference between the benefit obli- gation and the fair value of plan assets to the amounts recorded on the Company’s balance sheet due to certain items that are amortized over future periods rather than recognized in the current period. In 2002, the Company recorded a $41 million Other Benefits curtailment gain, which is included in discontinued operations, as a result of the sale of AIS. The fair value of plan assets for the Company’s domestic and foreign plans was $9,661 million and $325 million, respectively, at December 31, 2003 and $8,898 million and $258 million, respec- tively, at December 31, 2002. The Company’s foreign pension plan assumptions have been included in the table above.  The tables below outline the components of net periodic benefit cost and related actuarial assumptions of the Company’s domestic and foreign Pension Benefits and Other Benefits plans.