Intel 2006 Annual Report Download - page 28

Table of Contents
Changes in our decisions with regard to our announced restructuring and efficiency project, and other factors, could affect
our results of operations and financial condition.
Factors that could cause actual results to differ materially from our expectations with regard to our announced restructuring
include:
In order to compete, we must attract, retain, and motivate key employees, and our failure to do so could have an adverse
effect on our results of operations.
In order to compete, we must attract, retain, and motivate executives and other key employees, including those in managerial,
technical, sales, marketing, and support positions. Hiring and retaining qualified executives, scientists, engineers, technical
staff, and sales representatives are critical to our business, and competition for experienced employees in the semiconductor
industry can be intense. To help attract, retain, and motivate qualified employees, we use share-based incentive awards such as
employee stock options and non-vested share units (restricted stock units). If the value of such stock awards does not
appreciate as measured by the performance of the price of our common stock and/or if our other share-based compensation
otherwise ceases to be viewed as a valuable benefit, our ability to attract, retain, and motivate employees could be adversely
impacted, which could negatively affect our results of operations.
Our results of operations could vary as a result of the methods, estimates, and judgments we use in applying our
accounting policies.
The methods, estimates, and judgments we use in applying our accounting policies have a significant impact on our results of
operations (see “Critical Accounting Estimates” in Part II, Item 7 of this Form 10-K). Such methods, estimates, and judgments
are, by their nature, subject to substantial risks, uncertainties, and assumptions, and factors may arise over time that lead us to
change our methods, estimates, and judgments. Changes in those methods, estimates, and judgments could significantly affect
our results of operations. In particular, the calculation of share-based compensation expense under Statement of Financial
Accounting Standards (SFAS) No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123(R)), requires us to use
valuation methodologies (which were not developed for use in valuing employee stock options and restricted stock units) and
a number of assumptions, estimates, and conclusions regarding matters such as expected forfeitures, expected volatility of our
share price, the expected dividend rate with respect to our common stock, and the exercise behavior of our employees.
Furthermore, there are no means, under applicable accounting principles, to compare and adjust our expense if and when we
learn about additional information that may affect the estimates that we previously made, with the exception of changes in
expected forfeitures of share-based awards. Factors may arise over time that lead us to change our estimates and assumptions
with respect to future share-based compensation arrangements, resulting in variability in our share-based compensation
expense over time. Changes in forecasted share-based compensation expense could impact our gross margin percentage;
research and development expenses; marketing, general and administrative expenses; and our tax rate.
Our failure to comply with applicable environmental laws and regulations worldwide could adversely impact our business
and results of operations.
The manufacture and assembly and testing of our products require the use of hazardous materials that are subject to a broad
array of environmental, health, and safety laws and regulations. Our failure to comply with any of these applicable laws or
regulations could result in:
In addition, our failure to properly manage the use, transportation, emission, discharge, storage, recycling, or disposal of
hazardous materials could subject us to increased costs or future liabilities. Existing and future environmental laws and
regulations could also require us to acquire pollution abatement or remediation equipment, modify our product designs, or
incur other expenses associated with such laws and regulations. Many new materials that we are evaluating for use in our
operations may be subject to regulation under existing or future environmental laws and regulations that may restrict our use
of certain materials in our manufacturing, assembly and test processes, or products. Any of these consequences could
adversely impact our business and results of operations by increasing our expenses and/or requiring us to alter our
manufacturing and assembly and test processes.
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timing and execution of plans and programs that may be subject to local labor law requirements, including consultation
with appropriate works councils;
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assumptions related to severance and post
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retirement costs;
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future acquisitions, dispositions, or investments;
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new business initiatives and changes in product roadmap, development, and manufacturing;
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changes in employment levels and turnover rates;
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assumptions related to product demand and the business environment; and/or
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assumptions related to the fair value of certain property, plant and equipment.
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regulatory penalties, fines, and legal liabilities;
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suspension of production;
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alteration of our fabrication and assembly and test processes; and/or
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curtailment of our operations or sales.