Intel 2003 Annual Report Download - page 45

Table of Contents
Index to Financial Statements
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Contractual Obligations
The following table summarizes our significant contractual obligations at December 27, 2003, and the effect such obligations are
expected to have on our liquidity and cash flows in future periods. This table excludes amounts already recorded on our balance sheet as
current liabilities at December 27, 2003.
Payments Due by Period
(In Millions)
Total
Less than
1 year
1–3
years
3–5
years
More than
5 years
Operating lease obligations
$
503
$
101
$
135
$
64
$
203
Capital purchase obligations
1
1,474
1,368
106
—
—
Other purchase obligations and commitments
2
317
173
144
—
—
Long
-
term debt obligations
1,017
81
102
198
636
Total
3
$
3,311
$
1,723
$
487
$
262
$
839
1
Capital purchase obligations represent commitments for construction or purchase of property, plant and equipment. They are not
recorded as liabilities on our balance sheet as of December 27, 2003, as we have not yet received the related goods or taken title to
the property.
2
Other purchase obligations and commitments include payments due under various types of licenses and non-contingent joint funding
obligations. Joint funding obligations are agreements to fund various projects with other companies, such as co-marketing and co-
development initiatives.
Purchase orders or contracts for the purchase of raw materials and other goods and services are not included in the table above. We are
not able to determine the aggregate amount of such purchase orders that represent contractual obligations, as purchase orders may represent
authorizations to purchase rather than binding agreements. For the purposes of this table, contractual obligations for purchase of goods or
services are defined as agreements that are enforceable and legally binding on Intel and that specify all significant terms, including: fixed or
minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Our purchase
orders are based on our current manufacturing needs and are fulfilled by our vendors within short time horizons. We do not have significant
agreements for the purchase of raw materials or other goods specifying minimum quantities or set prices that exceed our expected requirements
for three months. We also enter into contracts for outsourced services; however, the obligations under these contracts were not significant and
the contracts generally contain clauses allowing for cancellation without significant penalty.
Contractual obligations that are contingent upon the achievement of certain milestones are not included in the table above. These include
contingent joint funding obligations, milestone-based equity investment funding, and acquisition-related deferred cash compensation
contingent on future employment. These arrangements are not considered contractual obligations until the milestone is met by the third party.
As of December 27, 2003, assuming all future milestones were met, additional required payments would be approximately $60 million.
The expected timing of payment of the obligations discussed above is estimated based on current information. Timing of payments and
actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some
obligations. Amounts disclosed as contingent or milestone-based obligations are dependent on the achievement of the milestones or the
occurrence of the contingent events and can vary significantly.
Off-Balance-Sheet Arrangements
As of December 27, 2003, we did not have any significant off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC
Regulation S-K.
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3
Total does not include contractual obligations recorded on the balance sheet as current liabilities, or certain purchase obligations as
discussed below.