Let’s Be Clear Intel Corporate Responsibility Report 2005 www.intel.com/go/responsibility www.intel.com/go/responsibility Overview At Intel, we challenge the status quo in everything we do. Over the past year, we have worked to be more clear about what corporate responsibility means to us—by being clear about our priorities and the way we commu- nicate them. This year, you will see a new focus in our reporting, a better forum for presenting our efforts, and hopefully a new level of clarity. Read Executive Perspective, page 3. Environment 5 Education 20 Community 28 Our Business 43 Building environmental performance Increasing our impact and reaching Reinforcing community commitment Intel Values help guide our actions into every facet of our work. more students. every day. in all areas. Global Climate Change 7 Teaching and Learning 22 Intel Involved 29 Corporate Performance 44 Addressing the threat of with Technology Volunteer efforts in support Organizational Profile global warming. Helping elementary and of our local communities. Economic Performance secondary students develop Stakeholder Engagement Water 9 critical skills. Intel Technology 33 Performance Scorecard Making water management and Expertise in Challenges and Opportunities a part of everyday operations. Advancing Mathematics, 24 Our Communities Goal Summary Science and Engineering Addressing community Awards and Other Recognition Resource Conservation 11 Intel programs supporting the challenges with core Reducing our global footprint essential building blocks Intel capabilities. Supply-Chain Management 64 through reduction, reuse of technology and innovation. Commitment and Scope and recycling. Middle East Initiative 37 Assessment and Training Advocating and 26 A multi-year program to Performance Indicators 14 Celebrating 21st Century enhance technology use The Intel Workplace 68 Charting the key indicators Educational Excellence and understanding. Intel Values that we use to manage EHS Advancing the future of Employees by Region performance. Disaster Relief 39 education around the world and Turnover Responding to the needs with global collaboration. Compensation and Benefits of those touched by disaster. Workforce Diversity Employee Development Community Giving 41 Health and Safety The financial commitments Work/Life Balance made by Intel and our employees. Corporate Governance 83 Governance and Ethics Litigation Resources 87 The content in this printable version of Intel’s 2005 Corporate Responsibility Report is as of May 10, 2006. Changes made to the web site after that date are not reflected here. Intel Corporate Responsibility Report 2005 • Overview www.intel.com/go/responsibility 2 The Case for Clarity A new approach to corporate responsibility at Intel. Executive Perspective 2005 was a year of significant change for Intel. In addition to evolving our business strategy and reinvigorating our brand, we have taken a more focused approach to corporate responsibility. We have worked to more clearly define A New Focus what corporate responsibility means to Intel, and we met with stakeholders in For us, corporate responsibility formal and informal feedback sessions to clarify the key corporate responsibil- means a further opportunity to challenge, inspire, enrich and ity issues for the company. enable. We are driven to make a difference in the areas of environ- ment, education and community. Defining Corporate Responsibility We look for concrete ways to lead others to new and better ways to After taking a hard look at what we believe in, we confirmed that at Intel, live and work. corporate responsibility means achieving business success in ways that honor our ethical values and demonstrate respect for people and the planet. Our actions follow certain guiding principles: • Operate with integrity and transparency • Strengthen our communities Paul S. Otellini President and CEO • Improve people’s lives through technology We also clarified the way we communicate both our commitment and our performance. In transitioning from the previous title of Global Citizen- ship Report to Corporate Responsibility Report, we better reflect both our approach to business and the way we interact with our many stakeholders around the world. Our dialogues with stakeholders also offered important feedback on the way Craig R. Barrett we approach the report’s format. As a result of their input, we dove deeper Chairman of the Board in many content areas by expanding our report information online. This year, our report focuses on three areas most material to Intel’s corporate responsi- bility efforts: the environment, education and community. Environment. Environmental excellence has long been a hallmark in Intel’s leading-edge manufactur- ing and assembly facilities worldwide. We have made progress in reducing our environmental footprint in both our operations and our products. In our operations, we reduced our emissions of perfluorocom- pounds (climate change gases) by 13% in 2005 and reduced our energy consumption per production unit by 15%. We design products with the environment in mind throughout the product life cycle. Intel Corporate Responsibility Report 2005 • Executive Perspective www.intel.com/go/responsibility 3 We are bringing new energy-efficient technologies to market and are helping drive environmentally responsible end-of-life solutions for electronics. Education. Education has been the cornerstone of our strategic global philanthropic efforts since Intel was founded. Since that time, we have invested more than $1 billion worldwide. We believe that educa- tion is critical to inspire creativity and innovation. Working with educators, governments and industry, we design and deliver innovative and unique programs in more than 50 countries on six continents. Our efforts in education grow stronger each year. In 2005, we again contributed more than $100 million to improve education and provide technology access worldwide. Community. Intel employees worldwide demonstrate a passion for community involvement. We view community leadership as our responsibility, and as a critical component of our global business success. From giving back through local volunteer efforts to our relief work following the tsunami in Southeast Asia, Hurricane Katrina in the U.S., the earthquake in Pakistan, and Hurricane Stan in Mexico and Central America, we reinforce our community commitment every day. In 2005, more than 30,000 Intel employees from around the world committed their time to make their communities better places to live and work. In addition to these focus areas, this report details the full scope of our corporate responsibility efforts, from employee development and diversity to governance, ethics and supply-chain responsibility. We attempt to offer a balanced presentation of our organization’s economic, environmental and social perfor- mance in 2005, and outline our priorities for the future. We continue to publish the report in accordance with the Global Reporting Initiative* (GRI) 2002 Sustainability Reporting Guidelines. Corporate responsibility is about good management and a commitment to doing things right. We trust that you will see ongoing progress in our performance and recognize the commitment that all of our employees have to facing future challenges head on. Paul S. Otellini Craig R. Barrett President and Chief Executive Officer Chairman of the Board Intel Corporate Responsibility Report 2005 • Executive Perspective www.intel.com/go/responsibility 4 Clear About the Environment Building environmental performance into every facet of our work. Environment 2005 Highlights At Intel, we want to achieve the highest standards of environmental con- In 2005, we: sciousness, and environmental performance goals are part of every aspect • Began to publish quarterly environmental, health and safety of our work. We consider all facets of conservation—from the platforms we (EHS) performance indicators. develop to the way we manufacture the ingredients in those platforms, • Announced that energy from resource usage to renewable materials and waste recovery. efficiency will be a key focus in our product development. For example, the Intel® Core™ Duo Environmental Challenges processor is 35% more energy efficient than the Intel® Pentium® We encourage every employee to apply the same level of brain power to M processor. the environmental challenges in design and production as they do to solv- • Worked with our industry peers to reduce the energy consump- ing the problems of new technology. We involve environmental engineers tion of notebook LCD screens by in our platform and product development process, as well as in designing approximately 40%. and establishing environmental budgets for buildings, technology produc- • Reduced our energy consump- tion, tools and processes. tion by 15% per production unit from 2004. To bolster this effort, in 2005 we took an aggressive position by announcing the quarterly release of our environmental, health and safety (EHS) performance indicators. By providing our stakeholders with a • Further reduced hazardous materials such as lead in our more relevant and timely gauge of information about air emissions, water usage, employee injuries and products, and recycled 57% of waste generation, we have raised the bar in public reporting. our chemical waste and 75% of our solid waste. Our efforts to conserve natural resources and reduce the environmental burden of waste generation and emissions to the air, water and land are applied around the world. Over the last decade, we have