Intel 2008 Annual Report Download - page 57

Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Continued)
Contractual Obligations
The following table summarizes our significant contractual obligations as of December 27, 2008:
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 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 27, 2008 to be approximately
as follows: less than one year—$309 million; one to three years—$315 million; three to five years—zero; 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.
50
Payments Due by Period
Less Than
More Than
(In Millions)
Total 1 Year 1–
3 Years
3–
5 Years
5 Years
Operating lease obligations
$
350
$
106
$
130
$
68
$
46
Capital purchase obligations
1
2,862
2,782
80
—
—
Other purchase obligations and commitments
2
1,180
492
554
9
125
Long
-
term debt obligations
3
3,382
80
272
108
2,922
Other long
-
term liabilities
3, 4, 5
645
260
157
98
130
Total
6
$
8,419
$
3,720
$
1,193
$
283
$
3,223
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 27, 2008, as we had not yet
received the related goods or taken title to the property.
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
We are unable to reliably estimate the timing of future payments related to uncertain tax positions; therefore,
$736 million of income taxes payable has been excluded from the table above. However, long-term income taxes
payable, included on our consolidated balance sheet, includes these uncertain tax positions, reduced by the associated
federal deduction for state taxes and
non
-
U.S.
tax credits.
5
Other long-term liabilities in the table above include the short-term portion of other long-term liabilities. Expected
contributions to our U.S. and non-U.S. pension plans and other postretirement benefit plans of $67 million to be made
during 2009 are also included; however, funding projections beyond 2009 are not practical to estimate.
6
Total generally excludes contractual obligations already recorded on the consolidated balance sheet as current
liabilities.