Intel 2006 Annual Report Download - page 51

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Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Continued)
Liquidity
During 2006, our level of cash declined, as our cash provided by operations was less than our cash used for investing and
financing activities. Cash generated by operations is used as our primary source of liquidity. Another potential source of
liquidity is authorized borrowings, including commercial paper, of $3.0 billion. There were no borrowings under our
commercial paper program during 2006. We also have an automatic shelf registration on file with the SEC pursuant to which
we may offer an indeterminate amount of debt, equity, and other securities.
We believe that we have the financial resources needed to meet business requirements for the next 12 months, including
capital expenditures for the expansion or upgrading of worldwide manufacturing and assembly and test capacity, working
capital requirements, the dividend program, potential stock repurchases, potential future acquisitions or strategic investments,
and cash payments associated with our structure and efficiency program.
Contractual Obligations
The following table summarizes our significant contractual obligations at December 30, 2006:
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.
41
Payments Due by Period
Less than
More than
(In Millions)
Total
1 year
1
–
3 years
3
–
5 years
5 years
Operating lease obligations
$
384
$
114
$
138
$
57
$
75
Capital purchase obligations
1
3,276
3,152
124
—
—
Other purchase obligations and commitments
2
1,778
1,122
520
136
—
Long
-
term debt obligations
3
3,377
66
132
282
2,897
Other long
-
term liabilities
3
1,041
71
330
214
426
Total
4
$
9,856
$
4,525
$
1,244
$
689
$
3,398
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 30, 2006, as we had not yet
received the related goods or taken title to the property. Capital purchase obligations increased from $2.7 billion at
December 31, 2005 to $3.3 billion at December 30, 2006, primarily due to purchase obligations for capital equipment
related to our next
-
generation
45
-
nanometer
process technology.
2
Other purchase obligations and commitments include agreements to purchase raw materials or other goods as well as
payments due under various types of licenses and 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
Total does not include contractual obligations already recorded on the consolidated balance sheet as current liabilities
(except for the short-term portion of the long-term debt and other long-term liabilities) or certain purchase obligations,
which are discussed below.