Intel 2008 Annual Report Download - page 103

Download and view the complete annual report

Please find page 103 of the 2008 Intel annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 143

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
U.S. Plan Assets
In general, the investment strategy for U.S. plan assets is to assure that the pension assets are available to pay benefits as they
come due and to minimize market risk. When deemed appropriate, we may invest a portion of the fund 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 U.S. plan assets are managed to remain within the target allocation ranges listed below.
As of December 27, 2008, our plan assets were not within our target allocation due to market volatility. At times our allocation
will temporarily fall outside the target allocation range, as we re-allocate plan assets due to market conditions, such as
volatility and liquidity concerns, to minimize market risk. The expected long-term rate of return for the U.S. plan assets is
4.5%.
The asset allocation for our U.S. Pension Plan at the end of fiscal years 2008 and 2007, and the target allocation rate for 2009,
by asset category, are as follows:
Non
-U.S. Plan Assets
The investments of the non-U.S. plans 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. The investment manager evaluates performance 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 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 6.6%.
The asset allocation for our non-U.S. plans, excluding assets managed by qualified insurance companies, at the end of fiscal
years 2008 and 2007, and the target allocation rate for 2009, 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 36% of total
assets in 2008 (31% in 2007).
Funding Expectations
Under applicable law for the U.S. Pension Plan, we are not required to make any contributions during 2009. Our expected
funding for the non-U.S. plans during 2009 is approximately $62 million. We expect employer contributions to the
postretirement medical benefits plan to be approximately $5 million during 2009.
94
Percentage of Plan Assets
Asset Category
Target Allocation
2008
2007
Equity securities
10%
–
20%
7.5
%
15.0
%
Debt instruments
80%
–
90%
92.5
%
85.0
%
Percentage of Plan Assets
Asset Category
Target Allocation
2008
2007
Equity securities
64.0%
64.0
%
67.0
%
Debt instruments
12.0%
12.0
%
8.0
%
Other
24.0%
24.0
%
25.0
%