Intel 2006 Annual Report Download - page 92

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Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
U.S. Plan Assets
In general, the investment strategy followed for U.S. plan assets is designed to assure that the pension assets are available to
pay benefits as they come due and minimize market risk. When deemed appropriate, a portion of the fund may be invested in
futures contracts for the purpose of acting as a temporary substitute for an investment in a particular equity security. The fund
does not engage in speculative futures transactions. The expected long-term rate of return for the U.S. plan assets is 5.6%.
The asset allocation for the company’s U.S. Pension Plan at the end of fiscal years 2006 and 2005, and the target allocation
rate for 2007, by asset category, are as follows:
Non
-U.S. Plan Assets
The non-U.S. plans’ investments are managed by insurance companies, third-party trustees, or pension funds consistent with
regulations or market practice of the country where the assets are invested. The investment manager makes investment
decisions within the guidelines set by Intel or local regulations. Performance is evaluated by comparing the actual rate of
return to the return on other similar assets. Investments that are managed by qualified insurance companies or pension funds
under standard contracts follow local regulations, and Intel is not actively involved in the investment strategy. In general, the
investment strategy followed is designed to accumulate a diversified portfolio among markets, asset classes, or individual
securities in order to reduce market risk and assure that the pension assets are available to pay benefits as they come due. The
average expected long-term rate of return for the non-U.S. plan assets is 6.0%.
The asset allocation for the company’s non-U.S.
plans, excluding assets managed by qualified insurance companies, at the end
of fiscal years 2006 and 2005, and the target allocation rate for 2007, by asset category, are as follows:
Investment assets that are managed by qualified insurance companies are invested as part of the insurance companies’ general
fund. Intel does not have control over the target allocation of these investments. These investments made up 31% of total
non-U.S. plan assets in 2006 (30% in 2005).
Funding Expectations
No contributions are required during 2007 under applicable law for the U.S. Pension Plan. The company intends to make
voluntary contributions so that assets are not less than the accumulated benefit obligation at the end of the year. Expected
funding for the non-U.S. plans during 2007 is approximately $58 million. Employer contributions to the postretirement
medical benefits plan are expected to be approximately $10 million during 2007.
Estimated Future Benefit Payments
The total benefits to be paid from the U.S. and non-U.S. pension plans and other postretirement benefit plans are not expected
to exceed $90 million in any year through 2016.
80
Percentage of Plan Assets
Asset Category
Target Allocation
2006
2005
Equity securities
10%
–
20%
14.0%
15.0%
Debt securities
80%
–
90%
86.0%
85.0%
Percentage of Plan Assets
Asset Category
Target Allocation
2006
2005
Equity securities
68.0%
68.0%
67.0%
Debt securities
8.0%
8.0%
21.0%
Other
24.0%
24.0%
12.0%