Intel 2007 Annual Report Download - page 52

Table of Contents
To assess the market price sensitivity of our marketable equity investments, we analyzed the historical movements over the
past several years of high-technology stock indices that we considered appropriate. For our investments in companies that
have been publicly traded for only a limited time, we analyzed the implied volatility of the related company based on freely
traded options. Our marketable equity method investment is excluded from our analysis, as the carrying value does not
fluctuate based on market price changes. Therefore, the potential fair value decline would not be indicative of the impact on
our financial statements, unless an other-than-temporary impairment was deemed necessary. Based on our sensitivity analysis,
we estimated that it was reasonably possible that the prices of the stocks of our marketable equity securities could experience a
loss of 55% in the near term (30% as of December 30, 2006). Assuming a loss of 55% in market prices, and after reflecting the
impact of hedges and offsetting positions, the aggregate value of our marketable equity investments could decrease by
approximately $565 million, based on the value as of December 29, 2007 (a decrease in value of $134 million, based on the
value as of December 30, 2006 using an assumed loss of 30%). This estimate is not necessarily indicative of future
performance, and actual results may differ materially. The increase in exposure from December 30, 2006 to December 29,
2007 is due to our purchase of VMware during 2007, its stock price volatility, and the weight of our investment in VMware in
relation to our total marketable equity securities.
Many of the same factors that could result in an adverse movement of equity market prices affect our non-marketable equity
investments, although we cannot quantify the impact directly. Such a movement and the underlying economic conditions
would negatively affect the prospects of the companies we invest in, their ability to raise additional capital, and the likelihood
of our being able to realize value in our investments through liquidity events such as initial public offerings, mergers, and
private sales. These types of investments involve a great deal of risk, and there can be no assurance that any specific company
will grow or become successful; consequently, we could lose all or part of our investment. Our non-marketable equity
investments, excluding investments accounted for under the equity method, had a carrying amount of $805 million as of
December 29, 2007 ($733 million as of December 30, 2006). The carrying amount of these investments approximated fair
value as of December 29, 2007 and December 30, 2006. As of December 29, 2007, the carrying amount of our non-
marketable
equity method investments was $2.6 billion ($2.0 billion as of December 30, 2006) and consisted primarily of our investment
in IMFT of $2.2 billion ($1.3 billion as of December 30, 2006).
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