Intel 2005 Annual Report Download - page 44

Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Contractual obligations that are contingent upon the achievement of certain milestones are not included in the table above. These obligations include
contingent funding obligations and milestone-
based equity investment funding. These arrangements are not considered contractual obligations until the
milestone is met by the third party. As of December 31, 2005, assuming that all future milestones are met, additional required payments would be
approximately $39 million. Obligations to employees and non-employee directors related to our equity incentive plans are not included in the table
above, as these arrangements do not result in a future cash outflow.
The expected timing of payments of the obligations above is estimated based on current information. Timing of payments and actual amounts paid
may be different, depending on the time of receipt of goods or services, or changes to agreed-upon amounts for some obligations. Amounts disclosed
as contingent or milestone-based obligations are dependent on the achievement of the milestones or the occurrence of the contingent events and can
vary significantly.
In January 2006, we entered into various contractual commitments in relation to our investment in IMFT. Some of these commitments are with
Micron, and some are with the newly formed company, IMFT. The following are the significant contractual commitments entered into in January
2006:
Off-Balance-Sheet Arrangements
As of December 31, 2005, we did not have any significant off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
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•
As part of the initial capital contribution to IMFT, we paid $500 million in cash in January 2006, issued $581 million in notes, and owe an
additional $115 million in cash. Subject to certain conditions, Intel and Micron will each contribute approximately an additional $1.4 billion
over the next three years.
• As part of our agreement with Micron related to IMFT, subject to our approval and the approval of Micron, we may be required to make
additional capital contributions to IMFT for new fabrication facilities. The actual amount and likelihood of required funding is not known, and
is contingent upon the fabrication facilities capacity requirements of IMFT in the future.
• We also have several agreements with Micron related to intellectual property rights, and research and development funding related to NAND
flash manufacturing and IMFT. See
“
Note 16: Venture
”
in Part II, Item 8 of this Form
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K.