Intel 2007 Annual Report Download - page 94

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 us or local regulations. Performance is evaluated by comparing the actual rate of return
to the return on other similar assets. Investments managed by qualified insurance companies or pension funds under standard
contracts follow local regulations, and we are not actively involved in their investment strategies. 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 6.7%.
The asset allocation for our non-U.S. plans, excluding assets managed by qualified insurance companies, at the end of fiscal
years 2007 and 2006, and the target allocation rate for 2008, by asset category, are as follows:
Investment assets managed by qualified insurance companies are invested as part of the insurance companies’ general fund.
We do not have control over the target allocation of those investments. Those investments made up 31% of total non-U.S.
plan
assets in 2007 and 2006.
Funding Expectations
Under applicable law for the U.S. Pension Plan, we are not required to make any contributions during 2008. We intend to
make voluntary contributions if the plan assets are less than the accumulated benefit obligation at the end of the year. Our
expected funding for the non-U.S. plans during 2008 is approximately $64 million. We expect employer contributions to the
postretirement medical benefits plan to be approximately $12 million during 2008.
Estimated Future Benefit Payments
We expect the benefits to be paid through 2017 from the U.S. and non-U.S. pension plans and other postretirement benefit
plans to be approximately $100 million annually.
Note 19: Ventures
In January 2006, Micron and Intel formed IM Flash Technologies, LLC (IMFT) and in February 2007 formed IM Flash
Singapore, LLP (IMFS). We established these joint ventures to manufacture NAND flash memory products for Micron and
Intel. We own a 49% interest in each of these ventures. Initial production from IMFT began in early 2006; IMFS is in its
construction phase and has had no production to date. Our investments were $2.2 billion in IMFT and $146 million in IMFS as
of December 29, 2007 ($1.3 billion in IMFT as of December 30, 2006), which represents our maximum exposure to loss. Our
investments in these ventures are classified within other long-term assets.
As part of the initial capital contribution to IMFT, we paid $615 million in cash and issued $581 million in non-interest-
bearing notes. During 2006, we paid the entire balance of $581 million to settle the non-interest-bearing notes, which has been
reflected as a financing activity on the consolidated statements of cash flows. At inception, in exchange for a 51% interest,
Micron contributed assets valued at $995 million and $250 million in cash.
85
Percentage of Plan Assets
Asset Category
Target Allocation
2007
2006
Equity securities
67.0%
67.0%
68.0%
Debt instruments
8.0%
8.0%
8.0%
Other
25.0%
25.0%
24.0%