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Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We may incur additional restructuring charges in the future for employee severance and benefit arrangements, and facility-
related or other exit activities. Subsequent to the end of 2008, management approved plans to restructure some of our
manufacturing and assembly and test operations, and align our manufacturing and assembly and test capacity to current market
conditions. These actions, which are expected to take place beginning in 2009, include closing two assembly and test facilities
in Malaysia, one facility in the Philippines, and one facility in China; stopping production at a 200mm wafer fabrication
facility in Oregon; and ending production at our 200mm wafer fabrication facility in California.
2008 NAND Plan
In the fourth quarter of 2008, management approved a plan with Micron to discontinue the supply of NAND flash memory
from the 200mm facility within the IMFT manufacturing network. The agreement resulted in a $215 million restructuring
charge, primarily related to the IMFT 200mm supply agreement. The restructuring charge resulted in a reduction of our
investment in IMFT of $184 million, a cash payment to Micron of $24 million, and other cash payments of $7 million.
2006 Efficiency Program
The following table summarizes charges for the 2006 efficiency program for the three years ended December 27, 2008:
In the third quarter of 2006, management approved several actions recommended by our structure and efficiency task force as
part of a restructuring plan designed to improve operational efficiency and financial results. Some of these activities have
involved cost savings or other actions that did not result in restructuring charges, such as better utilization of assets, reduced
spending, and organizational efficiencies. The efficiency program has included targeted headcount reductions for various
groups within the company, which we have met through employee attrition and terminations. Business divestures have further
reduced our headcount.
During 2006, we completed the divestiture of three businesses. For further discussion, see “Note 12: Divestitures.” In
connection with the divestiture of certain assets of our communications and application processor business, we recorded
impairment charges of $103 million related to the write-
down of manufacturing tools to their fair value, less the cost to dispose
of the assets. We determined the fair value using a market-based valuation technique. In addition, as a result of both this
divestiture and a subsequent assessment of our worldwide manufacturing capacity operations, we placed for sale our
fabrication facility in Colorado Springs, Colorado. This plan resulted in an impairment charge of $214 million to write down
to fair value the land, building, and equipment asset grouping that has been principally used to support our communications
and application processor business. We determined the fair market value of the asset grouping using an average of the results
from using the cost approach and market approach valuation techniques.
During 2007, we incurred an additional $54 million in asset impairment charges as a result of market conditions related to the
Colorado Springs facility. Also, we recorded land and building write-downs related to certain facilities in Santa Clara,
California. In addition, we incurred $85 million in asset impairment charges related to assets that we sold in conjunction with
the divestiture of our NOR flash memory business. We determined the impairment charges based on the fair value, less selling
costs, that we expected to receive upon completion of the divestiture.
During 2008, we incurred additional asset impairment charges related to the Colorado Springs facility, based on market
conditions. Also, we incurred $275 million in additional asset impairment charges related to assets that we sold in conjunction
with the divestiture of our NOR flash memory business. We determined the impairment charges using the revised fair value of
the equity and note receivable that we received upon completion of the divestiture, less selling costs. The lower fair value was
primarily a result of a decline in the outlook for the flash memory market segment. For further information on this divestiture,
see “Note 12: Divestitures.”
87
(In Millions)
2008
2007
2006
Employee severance and benefit arrangements
$
151
$
289
$
238
Asset impairments
344
227
317
Total
$
495
$
516
$
555