Intel 2007 Annual Report Download - page 48

Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION (Continued)
Contractual Obligations
The following table summarizes our significant contractual obligations at December 29, 2007:
Contractual obligations for purchases of goods or services generally include 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. The table above also includes agreements to
purchase raw materials that have cancellation provisions requiring little or no payment. The amounts under such contracts are
included in the table above because management believes that cancellation of these contracts is unlikely and expects to make
future cash payments according to the contract terms or in similar amounts for similar materials. For other obligations with
cancellation provisions, the amounts included in the table above were limited to the non-cancelable portion of the agreement
terms, and/or the minimum cancellation fee.
We have entered into certain agreements for the purchase of raw materials or other goods that specify minimum prices and
quantities that are based on a percentage of the total available market or based on a percentage of our future purchasing
requirements. Due to the uncertainty of the future market and our future purchasing requirements, obligations under these
agreements are not included in the table above. We estimate our obligation under these agreements as of December 29, 2007
to be approximately as follows: less than one year—$331 million; one to three years—$377 million; three to five years—
$2 million; more than five years—zero. Our purchase orders for other products are based on our current manufacturing needs
and are fulfilled by our vendors within short time horizons. In addition, some of our purchase orders represent authorizations
to purchase rather than binding agreements.
41
Payments Due by Period
Less than More than
(In Millions)
Total 1 Year 1–3 years 3–5 years 5 Years
Operating lease obligations
$
320
$
95
$
117
$
56
$
52
Capital purchase obligations
1
2,289
2,283
6
—
—
Other purchase obligations and commitments
2
1,662
600
925
137
—
Long
-
term debt obligations
3
3,653
73
305
133
3,142
Other long
-
term liabilities
3, 4
1,444
308
345
187
604
Total
5
$
9,368
$
3,359
$
1,698
$
513
$
3,798
1
Capital purchase obligations represent commitments for the construction or purchase of property, plant and equipment.
They were not recorded as liabilities on our consolidated balance sheet as of December 29, 2007, as we had not yet
received the related goods or taken title to the property. Capital purchase obligations decreased from $3.3 billion at
December 30, 2006 to $2.3 billion at December 29, 2007, primarily due to the timing of the ramp of our latest silicon
process technology.
2
Other purchase obligations and commitments include payments due under various types of licenses, agreements to
purchase raw materials or other goods, as well as payments due under non
-contingent funding obligations. Funding
obligations include, for example, agreements to fund various projects with other companies.
3
Amounts represent total anticipated cash payments, including anticipated interest payments that are not recorded on the
consolidated balance sheets and the short-term portion of the obligation. Any future settlement of convertible debt
would reduce anticipated interest and/or principal payments. Amounts exclude fair value adjustments such as discounts
or premiums that affect the amount recorded on the consolidated balance sheets.
4
Other long-term liabilities includes income taxes payable. Long-term income taxes payable include uncertain tax
positions, reduced by the associated federal deduction for state taxes and
non-U.S. tax credits, and may also include
other long-term tax liabilities that are not uncertain but have not yet been paid. We are unable to reliably estimate the
timing of future payments related to uncertain tax positions; therefore, $785 million of income taxes payable has been
excluded from the table above.
5
Total excludes contractual obligations already recorded on the consolidated balance sheet as current liabilities (except
for the
short-term portion of the long-term debt and other long-term liabilities) and certain purchase obligations, which
are discussed below.