Intel 1994 Annual Report Download - page 30

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COMMITMENTS
The Company leases a portion of its capital equipment and certain of its facilities under leases which expire at various dates through 2003.
Rental expense was $38 million in 1994, $35 million in 1993 and $39 million in 1992. Minimum rental commitments under all non-cancelable
leases with an initial term in excess of one year are payable as follows: 1995-$16 million; 1996-$14 million; 1997-$11 million; 1998-$8
million; 1999-$5 million; 2000 and beyond- $8 million. Commitments for construction or purchase of property, plant and equipment
approximate $1,406 million at December 31, 1994. In connection with certain contract manufacturing arrangements, Intel has minimum
purchase commitments of approximately $150 million at December 31, 1994 for flash memories intended for sale.
CONTINGENCIES
In 1991, the Company was sued by Advanced Micro Devices, Inc. (AMD) in the U.S. District Court for the Northern District of California,
alleging violations of U.S. antitrust laws and claiming $2 billion damages and requesting treble damages under the antitrust laws. On January
11, 1995, in connection with the settlement of various legal matters between the two companies, the parties agreed to dismiss all claims,
counterclaims and defenses raised in this action.
During late 1994, numerous civil lawsuits were filed in the U.S. District Court for the Northern District of California alleging that Intel failed
to disclose material information relating to the divide problem in the floating point unit in the Pentium(R) processor, thereby committing
violations of various securities laws. In addition, certain officers and directors who sold stock were alleged to have committed acts of insider
trading. All cases were dismissed on February 9, 1995.
During the period from November 29, 1994 through December 19, 1994, numerous civil consumer lawsuits were filed in state courts in various
states against the Company. Although the complaints differ, these actions generally allege that Intel breached express and implied warranties,
engaged in deceptive advertising and otherwise committed consumer fraud by shipping Pentium processors that contained a divide problem in
the floating point unit, and by failing to disclose it. The suits seek compensatory and punitive damages of unspecified amounts. In two of the
pending cases, plaintiffs have filed a motion for a preliminary injunction, seeking to modify and more widely publicize Intel's replacement
policy and other related relief. The Company believes the suits to be without merit and will defend the cases vigorously. Although the ultimate
outcome of these suits cannot be determined at this time, management, including internal counsel, does not believe that the outcome of this
litigation will have a material adverse effect on the Company's financial position or overall trends in results of operations.
The Company has been named to the California and U.S. federal Superfund lists for three of its sites and has completed, along with two other
companies, a Remedial Investigation/Feasibility Study with the U.S. Environmental Protection Agency (EPA) to evaluate the groundwater in a
certain area related to one of its sites. The EPA has issued a Record of Decision with respect to a groundwater cleanup plan at that site,
including expected costs to complete. Under the California and U.S. federal Superfund statutes, liability for cleanup of this site is joint and
several. The Company, however, has reached agreement in principle with those same two companies that significantly limits the Company's
liabilities under the proposed cleanup plan. In addition, the Company has done extensive cleanup and studies of its sites. In the opinion of
management, including internal counsel, the potential losses to the Company in excess of amounts already accrued arising out of these matters
will not have a material adverse effect on the Company's financial position, even if joint and several liability were to be assessed.
The Company is party to various other legal proceedings. In the opinion of management, including internal counsel, these proceedings will not
have a material adverse effect on the financial position or overall trends in results of operations of the Company.
INDUSTRY SEGMENT REPORTING
Intel operates in one dominant industry segment: the design, development, manufacture and sale of microcomputer components and related
products at various levels of integration. No customer exceeded 10% of revenues in 1994. One significant customer accounted for 10% of
revenues in 1993; none did so in 1992. Major operations outside the United States include manufacturing facilities in Ireland, Israel, Malaysia,
and the Philippines, and sales subsidiaries in Japan, Asia-Pacific, and throughout Europe and other parts of the world. Summary balance sheet
information for operations outside the United States at fiscal year-ends is as follows:
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Geographic information for the three years ended December 31, 1994 is presented in the following table. Transfers between geographic areas
are accounted for at amounts that are generally above cost and consistent with the rules and regulations of governing tax authorities. Such
transfers are eliminated in the consolidated financial statements. Operating income by geographic segment does not include an allocation of
general corporate expenses. Identifiable assets are those that can be directly associated with a particular geographic area. Corporate assets
include cash and cash equivalents, short-term investments, deferred tax assets, other current assets, long-term investments and certain other
assets.
(In millions) 1994 1993
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Total assets $2,940 $2,192
Total liabilities $ 962 $ 637
Net property, plant and equipment $1,238 $1,042
Sales to Transfers