Intel 2007 Annual Report Download - page 50

Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION (Continued)
Business Outlook
Our future results of operations and the topics of other forward-looking statements contained in this Form 10-K, including this
MD&A, involve a number of risks and uncertainties—in particular, our goals and strategies; new product introductions; plans
to cultivate new businesses; pending divestitures; future economic conditions; revenue; pricing; gross margin and costs; capital
spending; depreciation; R&D expenses; marketing, general and administrative expenses; potential impairment of investments;
our effective tax rate; pending legal proceedings; net gains (losses) from equity investments; and interest and other, net. Our
future results of operations may also be affected by the amount, type, and valuation of share-based awards granted as well as
the amount of awards cancelled due to employee turnover and the timing of award exercises by employees. We are focusing
on efforts to improve operational efficiency and reduce spending that may result in several actions that could have an impact
on expense levels and gross margin. In addition to the various important factors discussed above, a number of other important
factors could cause actual results to differ materially from our expectations. See the risks described in “Risk Factors” in Part I,
Item 1A of this Form 10-K.
Our expectations for 2008 are as follows:
Status of Business Outlook
We expect that our corporate representatives will, from time to time, meet privately with investors, investment analysts, the
media, and others, and may reiterate the forward-looking statements contained in the “Business Outlook” section and
elsewhere in this Form 10-K, including any such statements that are incorporated by reference in this Form 10-K. At the same
time, we will keep this Form 10-K
and our most current business outlook publicly available on our Investor Relations web site
at www.intc.com . The public can continue to rely on the business outlook published on the web site as representing our
current expectations on matters covered, unless we publish a notice stating otherwise. The statements in the “Business
Outlook” and other forward-looking statements in this Form 10-K are subject to revision during the course of the year in our
quarterly earnings releases and SEC filings and at other times.
From the close of business on March 7, 2008 until our quarterly earnings release is published, presently scheduled for
April 15, 2008, we will observe a “quiet period.” During the quiet period, the “Business Outlook” and other forward-looking
statements first published in our Form 8-K filed on January 15, 2008, as reiterated or updated as applicable, in this
should be considered historical, speaking as of prior to the quiet period only and not subject to update. During the quiet period,
our representatives will not comment on our business outlook or our financial results or expectations. The exact timing and
duration of the routine quiet period, and any others that we utilize from time to time, may vary at our discretion.
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• Gross margin: 57% plus or minus a few points. The 57% midpoint is higher than our 2007 gross margin of 51.9%,
primarily due to expected lower unit costs and lower start-up costs, and to a lesser extent, the divestiture of lower
margin businesses.
•
Capital spending:
approximately $5.2 billion, plus or minus $200 million, compared to $5.0 billion in 2007.
•
Depreciation:
approximately $4.4 billion, plus or minus $100 million, compared to $4.5 billion in 2007.
• Total spending: spending on R&D, plus marketing, general and administrative expenses in 2008 is expected to be
approximately $11.4 billion. The expectation for total spending in 2008 is higher than our 2007 spending of
$11.2 billion, as process development engineers transition from 45nm start-up
activities to 32nm development, causing
a movement of spending from cost of sales to R&D.
•
Research and development spending:
approximately $5.9 billion.
• Tax rate: approximately 31%. The estimated effective tax rate is based on tax law in effect at December 29, 2007 and
current expected income.