The components of the net pension cost for all defined benefit plans accounted for under SFAS No. 87, “Employers’ Accounting for Pensions,” are as follows: The funded status of the company’s pension plans is based on valuations as of September 30. The following tables provide a reconciliation of the changes in the plans’ benefit obligation and fair value of assets for all plans accounted for under SFAS No. 87: The following table reconciles the plans’ funded status to the amounts recognized on the Consolidated Balance Sheets: I 77 AXP I NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FUNDED STATUS (Millions) 2002 2001 Funded status at September 30, $ (493) $ (351) Unrecognized net actuarial loss  563 209 Unrecognized prior service cost (28) (42) Unrecognized net transition obligation — (2) Fourth quarter contributions (net of benefit payments) 6 4 Net amount recognized at December 31, $ 48 $ (182) RECONCILIATION OF CHANGE IN FAIR VALUE OF PLAN ASSETS RECONCILIATION OF CHANGE IN BENEFIT OBLIGATION (Millions) 2002 2001 Benefit obligation, October 1 prior year $ 1,541 $ 1,403 Service cost 106 102 Interest cost 112 106 Benefits paid (52) (43) Actuarial loss 141 31 Settlements/curtailments (66) (42) Foreign currency exchange rate changes 63 (16) Benefit obligation at September 30, $ 1,845 $ 1,541 (Millions) 2002 2001 Fair value of plan assets, October 1 prior year $ 1,190 $ 1,480 Actual loss on plan assets (78) (239) Employer contributions 306 47 Benefits paid (52) (43) Settlements (65) (42) Foreign currency exchange rate changes 51 (13) Fair value of plan assets at September 30, $ 1,352 $ 1,190 (Millions) 2002 2001 2000 Service cost $ 106 $ 102 $ 95 Interest cost 112 106 98 Expected return on plan assets (127) (122) (102) Amortization of: Prior service cost (9) (10) (9) Transition obligation (1) (1) 3 Reversion gain — — (4) Recognized net actuarial loss (gain) 6 (1) 5 Settlement/curtailment loss (gain) 12 (1) (22) Net periodic pension benefit cost $9 9 $7 3 $6 4