48 Prepaid pension benefits are included in other long-term assets. Accrued pension benefit obligations are included in other long-term liabilities. U.S. defined benefit pension plan assets consist principally of common stocks, corporate bonds and U.S. government securities. International defined benefit pension plan assets consist principally of common stocks, corporate bonds and government securities. To the best of our knowledge and belief, the asset portfolios of our defined benefit plans do not contain our capital stock. We do not issue insurance contracts to cover future annual benefits of defined benefit plan participants. Transactions between us and our defined benefit plans include the reimbursement of plan expenditures incurred by us on behalf of the plans. To the best of our knowledge and belief, the reimbursement of cost is permissible under current ERISA or local government law. Included in the above information are international pension plans with accumulated benefit obligations exceeding the fair value of plan assets as follows: The components of net pension (benefit) cost include the following: The significant actuarial assumptions used to determine the present value of net pension obligations were as follows: The funded status of our other postretirement benefit plan and amounts recognized in the consolidated balance sheets were as follows: (in thousands) 2002 2001  Change in benefit obligation: Benefit obligation, beginning of year $ 41,122 $ 36,064  Service cost 1,291 1,130  Interest cost 2,950 2,744  Actuarial losses 165 4,667  Benefits paid (3,408) (3,483) Benefit obligation, end of year $ 42,120 $ 41,122  Funded status of plans $ (42,120) $ (41,122)  Unrecognized prior service cost 1,078 1,484  Unrecognized actuarial gains (4,279) (4,823)  Net accrued obligation $ (45,321) $ (44,461) (in thousands) 2002 2001 2000 Discount rate: U.S. plans 7.3% 7.5% 8.0%  International plans 6.0 – 6.8% 5.5 – 6.8% 5.5 – 7.0%  Rates of future salary increases: U.S. plans 4.5% 4.5% 4.5%  International plans 3.3 – 4.0% 3.0 – 4.3% 3.5 – 4.3%  Rates of return on plan assets: U.S. plans 9.5% 10.0% 10.0%  International plans 6.5 – 7.3% 6.5 – 8.0% 6.5 – 8.0% (in thousands) 2002 2001 2000 Service cost $ 10,706 $ 11,317 $ 13,414  Interest cost 26,286 26,368 25,187 Expected return on plan assets (44,879) (43,526) (39,388)  Amortization of transition obligation (1,998) (2,052) (2,030)  Amortization of prior service cost 477 428 514 Recognition of actuarial gains (2,821) (2,836) (1,662)  Other (488) – – Net benefit $ (12,717) $ (10,301) $ (3,965)  (in thousands) 2002 2001  Projected benefit obligation $ 58,343 $ 54,279  Accumulated benefit obligation 54,534 53,283  Fair value of plan assets 28,709 28,263 