EMC 2004 Annual Report Download - page 90

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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The effects of a one percent change in the assumed health care cost trend rates are as follows (table in thousands):
1% increase 1% decrease
Effect on total service and interest cost components for 2004 $ 3 $ (3)
Effect on year-end post retirement obligation 56 (50)
The expected long-term rate of return on plan assets considers the current level of expected returns on risk free investments (primarily government bonds),
the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each
asset class. The expected return for each asset class was weighted based on the target asset allocation to develop the expected long-term rate of return on
assets.
The actual asset allocations are as follows:
December 31, December 31,
2004 2003
Equity securities 71% 75%
Debt securities 29 25
Total 100% 100%
The target allocation of the assets in the plan as of December 31, 2004 was 70% equity securities and 30% debt securities.
The plan assets are managed by outside investment managers. Our investment strategy with respect to the plan is to maximize returns while preserving
principal.
The benefit payments are expected to be paid in the following years (table in thousands):
2005 $ 485
2006 475
2007 474
2008 440
2009 407
2010–2014 1,821
M. Commitments and Contingencies
Operating Lease Commitments
We lease office and warehouse facilities and equipment under various operating leases. Facility leases generally include renewal options. Rent expense for
2004, 2003, and 2002 was as follows (table in thousands):
2004 2003 2002
Rent expense $ 207,111 $ 207,357 $ 214,708
Sublease proceeds (7,195) (4,088) (3,490)
Net rent expense $ 199,916 $ 203,269 $ 211,218
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