Memorex 2007 Annual Report Download - page 99

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Weighted-average assumptions used to determine benefit obligations as of December 31, 2007 and 2006 were as
follows:
2007 2006 2007 2006
As of December 31, As of December 31,
United States International
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.00% 5.75% 5.40% 4.60%
Rate of compensation increase. . . . . . . . . . . . . . . . . . . . . . . 4.75% 4.75% 3.70% 3.75%
Weighted-average assumptions used to determine net periodic benefit costs for the years ended December 31, 2007,
2006 and 2005, were as follows:
2007 2006 2005 2007 2006 2005
As of December 31, As of December 31,
United States International
Discount rate. . . . . . . . . . . . . . . . . . . . . . . 5.90% 5.50% 5.75% 4.75% 4.45% 5.00%
Expected return on plan assets . . . . . . . . . . 8.00% 8.00% 8.00% 5.75% 5.70% 5.70%
Rate of compensation increase . . . . . . . . . . 4.75% 4.75% 4.75% 3.75% 3.40% 3.30%
The expected long-term rate of return on plan assets is chosen from the range of likely results of compounded
average annual returns over a 10-year time horizon based on the plans’ current investment policy. The expected return
and volatility for each asset class is based on historical equity, bond and cash market returns. While this approach
considers recent fund performance and historical returns, the assumption is primarily a long-term, prospective rate.
The plans’ weighted average asset allocations as of December 31, 2007 and 2006, by asset category were as
follows:
2007 2006 2007 2006
As of December 31, As of December 31,
United States International
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59% 65% 38% 39%
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19% 17% 36% 35%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22% 18% 26% 26%
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100% 100%
In the United States, we maintain target allocation percentages among various asset classes based on an investment
policy established for the plan, which is designed to achieve long-term objectives of return, while mitigating against
downside risk, and considering expected cash flows. The current target asset allocation includes equity securities at 50 to
80 percent, debt securities at 15 to 25 percent and other investments at 10 to 25 percent. Management reviews our
U.S. investment policy for the plan at least annually. Outside the United States, the investment objectives are similar to the
United States, subject to local regulations. In some countries, a higher percentage allocation to fixed income securities is
required.
70
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)