Intel 2007 Annual Report Download - page 96

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Commitments for construction or purchase of property, plant and equipment decreased from $3.3 billion at December 30,
2006 to $2.3 billion at December 29, 2007. Other purchase obligations and commitments as of December 29, 2007 totaled
$1.7 billion. Other purchase obligations and commitments include payments due under various types of licenses, agreements
to purchase raw material 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. In addition, we have various
contractual commitments with Micron, IMFT, and IMFS (see “Note 19: Ventures”).
Note 21: Contingencies
Tax Matters
In connection with the regular examination of our tax returns for the years 1999 through 2005, the IRS had formally assessed
adjustments to the amounts that we had recorded on those returns as a tax benefit for export sales. In 2007, we resolved these
matters with the IRS. See “Note 17: Taxes” for further discussion.
Legal Proceedings
We are currently a party to various legal proceedings, including those noted in this section. While management presently
believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm the
company’s financial position, cash flows, or overall trends in results of operations, litigation is subject to inherent
uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include money damages or, in cases for which
injunctive relief is sought, an injunction prohibiting us from selling one or more products at all or in particular ways. Were an
unfavorable ruling to occur, our business or results of operations could be materially harmed.
Advanced Micro Devices, Inc. (AMD) and AMD International Sales & Service, Ltd. v. Intel Corporation and Intel Kabushiki
Kaisha, and Related Consumer Class Actions and Government Investigations
In June 2005, AMD filed a complaint in the United States District Court for the District of Delaware alleging that we and our
Japanese subsidiary engaged in various actions in violation of the Sherman Act and the California Business and Professions
Code, including providing secret and discriminatory discounts and rebates and intentionally interfering with prospective
business advantages of AMD. AMD’s complaint seeks unspecified treble damages, punitive damages, an injunction, and
attorneys’ fees and costs. Subsequently, AMD’s Japanese subsidiary also filed suits in the Tokyo High Court and the Tokyo
District Court against our Japanese subsidiary, asserting violations of Japan’s Antimonopoly Law and alleging damages in
each suit of approximately $55 million, plus various other costs and fees. At least 83 separate class actions have been filed in
the U.S. District Courts for the Northern District of California, Southern District of California, District of Idaho, District of
Nebraska, District of New Mexico, District of Maine, and the District of Delaware, as well as in various California, Kansas,
and Tennessee state courts. These actions generally repeat AMD’s allegations and assert various consumer injuries, including
that consumers in various states have been injured by paying higher prices for computers containing our microprocessors. All
of the federal class actions and the Kansas and Tennessee state court class actions have been or will be consolidated by the
Multidistrict Litigation Panel to the District of Delaware. All California class actions have been consolidated to the Superior
Court of California in Santa Clara County. We dispute AMD’s claims and the class-action claims, and intend to defend the
lawsuits vigorously.
We are also subject to certain antitrust regulatory inquiries. In 2001, the European Commission commenced an investigation
regarding claims by AMD that we used unfair business practices to persuade clients to buy our microprocessors. The European
Commission sent us a Statement of Objections in July 2007 alleging that certain Intel marketing and pricing practices
amounted to an abuse of a dominant position that infringed European law. The Statement recognized that such allegations
were preliminary, not final, conclusions. We responded to those allegations in January 2008. We intend to contest this matter
vigorously in the administrative procedure, which has now begun and, if necessary, in European courts. On February 12, 2008,
the European Commission initiated an inspection of documents at our Feldkirchen, Germany offices, and we are cooperating
with the investigation.
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