Intel 2007 Annual Report Download - page 46

Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION (Continued)
Investing Activities
Investing cash flows consist primarily of capital expenditures and net investment purchases, maturities, and disposals. For
2007 compared to 2006, the increase in cash used for investing activities was primarily due to higher purchases of available-
for-sale investments. Lower capital spending was mostly offset by lower proceeds from divestitures.
During 2007, we purchased more available-for-sale investments, particularly short-term, highly liquid investments, as our
level of cash available to invest increased. We received lower cash from divestitures: $32 million for one divestiture in 2007
compared to $752 million for three divestitures in 2006 (see “Note 13: Divestitures” in Part II, Item 8 of this Form 10-K). Our
capital expenditures were $5.0 billion in 2007 and were primarily for the ramping of our new fabrication facilities. Capital
expenditures for fiscal 2008 are currently expected to be approximately $5.2 billion, plus or minus $200 million. Capital
expenditures during fiscal 2008 are expected to be funded by cash flows from operating activities. Capital expenditures were
$5.9 billion in 2006 and 2005.
The decrease in cash used in investing activities in 2006 compared to 2005 was primarily due to higher net maturities and sales
of available-for-sale investments, cash received from divestitures in 2006, and the sale of a portion of our investment in
Micron for $275 million. Partially offsetting these impacts, in 2006 we paid $600 million in cash for our equity investment in
Clearwire and $615 million in cash for our equity investment in IMFT. In addition to the $615 million paid in cash, our initial
investment in IMFT of $1.2 billion included the issuance of $581 million in notes (reflected as a financing activity) and a
capital contribution of $128 million.
Financing Activities
Financing cash flows consist primarily of repurchases and retirement of common stock, payment of dividends to stockholders,
and proceeds from sales of shares through employee equity incentive plans.
For 2007 compared to 2006, the lower cash used in financing activities was primarily due to an increase in proceeds from sales
of shares through employee equity incentive plans and a decrease in repurchases and retirement of common stock. Proceeds
from sales of shares through employee equity incentive plans totaled $3.1 billion in 2007 compared to $1.0 billion in 2006,
due to a higher volume of exercises of stock options because of our stock price trading at higher levels in 2007 compared to
2006, and a higher weighted average exercise price. During 2007, we repurchased 111 million shares of common stock as part
of our common stock repurchase program at a cost of $2.75 billion (226 million shares at a cost of $4.6 billion during 2006).
As of December 29, 2007, $14.5 billion remained available for repurchase under the existing repurchase authorization of
$25 billion. We base our level of stock repurchases on internal cash management decisions, and this level may fluctuate. Our
dividend payments for 2007 were $2.6 billion. On January 17, 2008, our Board of Directors declared a cash dividend of
$0.1275 per common share for the first quarter of 2008, which represents a 13% increase in our quarterly cash dividend
amount.
The lower cash used in financing activities in 2006 compared to 2005 was primarily due to a decrease in repurchases and
retirement of common stock, partially offset by additions to long-term debt in 2005 of $1.7 billion.
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