EMC 2008 Annual Report Download - page 94
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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
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 2008 $ 5 $ (5)
Effect on year-end post retirement obligation 40 (36)
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,
2008 December 31,
2007
Equity securities 58% 70%
Debt securities 41 30
Cash 1 0
Total 100% 100%
The target allocation of the assets in the plan as of December 31, 2008 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):
2009 $ 548
2010 460
2011 429
2012 339
2013 286
2014-2018 1,181
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
was as follows (table in thousands):
2008 2007 2006
Rent expense $299,481 $277,602 $234,341
Sublease proceeds (10,740) (12,811) (9,430)
Net rent expense $288,741 $264,791 $224,911
88