VORNADO REALTY TRUST 76 NOTES TO CONSOLIDATED FINANCIAL STA TEMENTS Year Ended December 31, The Company has consistently applied what it believes to be an appr opriate investment strategy for the Mart Plan, by invest- ing in mutual funds and funds held by insurance companies. Mart Plan’ s weighted average asset allocations by asset category are as follows: The Company has consistently applied what it believes to be a conservative investment strategy for the Vornado Plan, investing primarily in cash and cash equivalents and fixed income funds, including money market funds, United States treasury bills, government bonds and mortgage back securities. Vornado Plan’ weighted-average asset allocations by asset category are as follows: The Company periodically reviews its assumptions for the rate of retur n on each Plan’s assets. The assumptions are based primarily on the long-term historical performance of the assets of the Plans. Differences in the rates of return in the near term are recognized as gains or losses in the periods that they occur. (AMOUNTS IN THOUSANDS) 2003 2002 2001 Information for the Company’s plans with  an accumulated benefit obligation in excess  of plans assets: Projected benefit obligation $ 9,186 $ 9,018 $ 7,950 Accumulated benefit obligation 9,186 9,018 7,950 Fair value of plan assets 6,836 5,988 6,055 Components of Net Periodic Benefit Cost: Service cost $ — $ — $ — Interest cost 1,244 1,260 1,226 Expected return on plan assets (1,115) (1,142) (1,194) Amortization of prior service cost — — — Amortization of net (gain) loss 203 114 (5) Net periodic benefit cost $ 332 $ 232 $ 27 Year Ended December 31, 2003 2002 2001 U.S. Treasury Bills 81% — — US Government Securities 14% 17% 17% Money Market Funds 4% 81% 81% Mortgage backed pass-through securities 1% 2% 2% Total 100% 100% 100% Year Ended December 31, 2003 2002 2001 Asset Category Mutual Funds 57% 56% 65% Funds Held By Insurance Companies 42% 43% 34% Other 1% 1% 1% Total 100% 100% 100% Plan Assets Assumptions: Weighted-average assumptions used to determine benefit obligations: Discount rate 6.00%-6.50% 6.25%-6.50% 6.50%-7.25% Rate of compensation increase N/A N/A N/A Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 6.25%-6.50% 6.50%-7.25% 6.50%-7.75% Expected long-term return on plan assets 6.50%-7.00% 6.50%-7.00% 6.50%-7.00% Rate of compensation increase N/A N/A N/A