Intel 2014 Annual Report Download - page 22

We operate globally and are subject to significant risks in many jurisdictions.
Global or regional conditions may harm our financial results.
We have manufacturing, assembly and test, R&D, sales, and other operations in many countries, and some of our business
activities may be concentrated in one or more geographic areas. Moreover, sales outside the U.S. accounted for approximately
82% of our revenue for the fiscal year ended December 27, 2014. As a result, our operations and our financial results, including
our ability to manufacture, assemble and test, design, develop, or sell products, may be adversely affected by a number of factors
outside of our control, including:
•global and local economic conditions;
•geopolitical and security issues, such as armed conflict and civil or military unrest, crime, political instability, and terrorist
activity;
•natural disasters, public health issues, and other catastrophic events;
•inefficient infrastructure and other disruptions, such as supply chain interruptions and large-scale outages or unreliable
provision of services from utilities, transportation, data hosting, or telecommunications providers;
•government restrictions on, or nationalization of our operations in any country, or restrictions on our ability to repatriate
earnings from a particular country;
•differing employment practices and labor issues;
•formal or informal imposition of new or revised export and/or import and doing-business regulations, which could be changed
without notice;
•ineffective legal protection of our IP rights in certain countries; and
•local business and cultural factors that differ from our normal standards and practices. We are subject to laws and
regulations worldwide affecting our operations in areas including, but not limited to, IP ownership and infringement, tax,
import and export requirements, anti-corruption, foreign exchange controls and cash repatriation restrictions, data privacy
requirements, anti-competition, employment, environment, health, and safety. Compliance with these laws and regulations
may be onerous and expensive and such requirements may differ among jurisdictions.
Although we have policies, controls, and procedures designed to ensure compliance with applicable laws, there can be no
assurance that our employees, contractors, suppliers, and/or agents will not violate such laws or our policies. Violations of these
laws and regulations could result in fines; criminal sanctions against us, our officers, or our employees; prohibitions on the
conduct of our business; and damage to our reputation.
We may be affected by fluctuations in currency exchange rates.
We are potentially exposed to adverse as well as beneficial movements in currency exchange rates. Although most of our sales
occur in U.S. dollars, expenses may be paid in local currencies. An increase in the value of the dollar could increase the real cost
to our customers of our products in those markets outside the U.S. where we sell in dollars, and a weakened dollar could increase
the cost of expenses such as payroll, utilities, tax, and marketing expenses, as well as overseas capital expenditures. We also
conduct certain investing and financing activities in local currencies. Our hedging programs reduce, but do not eliminate, the
impact of currency exchange rate movements; therefore, changes in exchange rates could harm our results of operations and
financial condition.
Catastrophic events or geopolitical conditions could have a material adverse effect on our operations and financial
results.
Our operations or systems could be disrupted by natural disasters; geopolitical conditions; terrorist activity; public health issues;
cybersecurity incidents; interruptions of service from utilities, transportation or telecommunications providers; or other catastrophic
events. Such events could make it difficult or impossible to manufacture or deliver products to our customers, receive production
materials from our suppliers, or perform critical functions, which could adversely affect our revenue and require significant
recovery time and expenditures to resume operations. While we maintain business recovery plans that are intended to allow us to
recover from natural disasters or other events that can be disruptive to our business, some of our systems are not fully redundant
and we cannot be sure that our plans will fully protect us from all such disruptions.
We maintain a program of insurance coverage for a variety of property, casualty, and other risks. We place our insurance
coverage with multiple carriers in numerous jurisdictions. However, one or more of our insurance providers may be unable or
unwilling to pay a claim. The types and amounts of insurance we obtain vary depending on availability, cost, and decisions with
respect to risk retention. The policies have deductibles and exclusions that result in us retaining a level of self-insurance. Losses
not covered by insurance may be large, which could harm our results of operations and financial condition.
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