Intel 2008 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2008 Intel annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 143

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143

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 milestone-based co-marketing agreements, contingent funding/payment 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 27, 2008, assuming that all future milestones are met, additional required payments would be
approximately $150 million.
For the majority of restricted stock units granted, the number of shares issued on the date the restricted stock units vest is net
of the statutory withholding requirements paid by Intel on behalf of our employees. The obligation to pay the relative taxing
authority is not included in the table above, as the amount is contingent upon continued employment. In addition, the amount
of the obligation is unknown, as it is based in part on the market price of our common stock when the awards vest.
The expected timing of payments of the obligations above are estimates 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.
We have a contractual obligation to purchase the output of IMFT and IMFS in proportion to our investments, currently 49% in
each of these ventures. However, IMFS is in its construction phase and has had no production to date. See “Note 6: Equity
Method and Cost Method Investments” in Part II, Item 8 of this Form 10-K. Additionally, we have entered into various
contractual commitments in relation to our investments in IMFT and IMFS. Some of these commitments are with Micron, and
some are directly with IMFT or IMFS. The following are the significant contractual commitments:
Off-Balance-Sheet Arrangements
As of December 27, 2008, with the exception of a guarantee for the repayment of $275 million in principal of the payment
obligations of Numonyx under its senior credit facility, as well as accrued unpaid interest, expenses of the lenders, and
penalties, we did not have any significant off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC
Regulation S-K. See “Note 6: Equity Method and Cost Method Investments” in Part II, Item 8 of this Form 10-K.
51
• Subject to certain conditions, Intel and Micron each agreed to contribute up to approximately $1.7 billion for IMFS in
the three years following the initial capital contribution. Of that amount, as of December 27, 2008, our remaining
commitment was approximately $1.3 billion. However, the construction of the IMFS fabrication facility has been
placed on hold.
• We also have several agreements with Micron related to intellectual property rights, and R&D funding related to
NAND flash manufacturing and IMFT. See
“Note 6: Equity Method and Cost Method Investments” in Part II, Item 8
of this
Form 10
-
K.