Intel 2009 Annual Report Download - page 53

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 26, 2009:
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 26, 2009 to be approximately
as follows: less than one year—$364 million; one to three years—$3 million; more than three 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.
45
Payments Due by Period
Less Than
More Than
(In Millions)
Total 1 Year 1–
3 Years
3–
5 Years
5 Years
Operating lease obligations
$
349
$
102
$
149
$
60
$
38
Capital purchase obligations
1
1,836
1,760
76
—
—
Other purchase obligations and commitments
2
866
290
403
48
125
Long
-
term debt obligations
3
7,253
284
238
238
6,493
Other long
-
term liabilities
4, 5
593
230
153
97
113
Total
6
$
10,897
$
2,666
$
1,019
$
443
$
6,769
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 sheets as of December 26, 2009, as we had not yet
received the related goods or taken title to the property. Capital purchase obligations decreased from $2.9 billion as of
December 27, 2008 to $1.8 billion as of December 26, 2009, 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 and 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 principal and interest cash payments over the life of the debt obligations, including anticipated
interest payments that are not recorded on our consolidated balance sheets. Any future settlement of convertible debt
would impact our cash payments.
4
We are unable to reliably estimate the timing of future payments related to uncertain tax positions; therefore, $193
million of long-term income taxes payable has been excluded from the table above. However, long-term income taxes
payable, included on our consolidated balance sheets, included these uncertain tax positions, reduced by the associated
federal deduction for state taxes and U.S. tax credits arising from
non
-
U.S.
income.
5
Amounts represent future cash payments to satisfy other long
-term liabilities recorded on our consolidated balance
sheets, including the short-term portion of these long-term liabilities. Expected contributions to our U.S. and
non-U.S.
pension plans and other postretirement benefit plans of $60 million to be made during 2010 are also included;
however, funding projections beyond 2010 are not practical to estimate.
6
Total generally excludes contractual obligations already recorded on our consolidated balance sheets as current
liabilities.