Intel 2008 Annual Report Download - page 61

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Table of Contents
The marketable equity securities included in trading assets are held to generate returns that seek to offset changes in liabilities
related to the equity and other market risks of certain deferred compensation arrangements. The gains and losses from changes
in fair value of these equity securities are offset by the gains and losses on the related liabilities. Assuming a decline in market
prices of approximately 25%, our net exposure to loss was approximately $40 million as of December 27, 2008 and
approximately $20 million as of December 29, 2007.
As of December 27, 2008, the fair value of our available-for-sale marketable equity securities and our equity derivative
instruments, including hedging positions, was $362 million ($1.0 billion as of December 29, 2007). Our investments in the
new Clearwire Corporation, VMware, and Micron constituted 90% of our marketable equity securities as of December 27,
2008, and were carried at a fair market value of $148 million, $137 million, and $42 million, respectively. The current equity
markets are extremely volatile. Assuming a loss of 60% in market prices, and after reflecting the impact of hedges and
offsetting positions, the aggregate value of our marketable equity investments could decrease by approximately $220 million,
based on the value as of December 27, 2008 (a decrease in value of $565 million, based on the value as of December 29, 2007
using an assumed loss of 55%). The increase in the assumed loss percentage from December 29, 2007 to December 27, 2008
is due to a higher relative weighting of more volatile investments.
Many of the same factors that could result in an adverse movement of equity market prices affect our non-marketable equity
investments, although we cannot always quantify the impact directly. The current financial markets are extremely volatile and
there has been a tightening of the credit markets, which could negatively affect the prospects of the companies we invest in,
their ability to raise additional capital, and the likelihood of our being able to realize value in our investments through liquidity
events such as initial public offerings, mergers, and private sales. These types of investments involve a great deal of risk, and
there can be no assurance that any specific company will grow or become successful; consequently, we could lose all or part
of our investment. Our non-marketable equity investments, excluding investments accounted for under the equity method, had
a carrying amount of $1.0 billion as of December 27, 2008 ($805 million as of December 29, 2007). As of December 27,
2008, the carrying amount of our non-
marketable equity method investments was $3.0 billion ($2.6 billion as of December 29,
2007). Most of the balance as of December 27, 2008 was concentrated in companies in the flash memory market segment and
wireless connectivity market segment. Our flash memory market segment investments include our investment of $1.7 billion
in IMFT ($2.2 billion as of December 29, 2007), $329 million in IMFS ($146 million as of December 29, 2007), and
$484 million in Numonyx. Our wireless connectivity market segment investments include our non-marketable equity method
investment in Clearwire LLC of $238 million. See “Note 6: Equity Method and Cost Method Investments”
in Part II, Item 8 of
this Form 10-K.
54