AMD 2007 Annual Report Download - page 271

Spansion Inc.
Notes to Consolidated Financial Statements—(Continued)
The below table summarizes the weighted average assumptions used for purposes of calculating the net periodic pension expense for the period ended
December 31, 2006:
Dec. 31,
2006
Dec. 25,
2005
Discount rate 2.00% 1.50%
Expected long-term return on plan assets 4.40% 2.50%
Average rate of compensation increase 2.70% 2.70%
Cash balance interest crediting rate 2.00% 1.50%
The pension plan’s investment policy is to invest in assets to best match liabilities and minimize underfunding and risks to the employer related to
additional pension contributions. The Company is not currently anticipating investing in non-traditional investments. The long-term rate of return assumption
was determined using the building block approach based upon the best estimate range of equity securities (both foreign and domestic) earning 5.0 to 8.0 percent
and debt securities (both foreign and domestic) earning 0.5 to 6.0 percent as summarized below:
Asset Category
Target
Allocation of
Plan Assets
Expected
Return by
Asset Class
Equity Securities 40% 6.30%
Debt Securities 57% 3.40%
Cash 3%
Total 100%
The weighted-average asset allocations by asset category at December 31, 2006 and December 25, 2005 are as follows:
Dec. 31,
2006
Dec. 25,
2005
Asset Category
Equity Securities 42% 46%
Debt Securities 55% 51%
Cash 3% 3%
Total 100% 100%
No plan assets are invested in employer securities and no future benefits are currently covered by insurance contracts issued by the insurer or related
parties.
The Company expects to contribute $8.2 million to the Spansion Japan pension plan during the fiscal year ending December 30, 2007.
Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008