Our competitive position is the strongest it has been in years. Demand for our industry-leading products and manufacturing technologies helped drive strong revenue and earnings growth in 2007, and our efforts to increase operational efficiencies resulted in substantial savings. We repurchased more than 111 million shares of stock, reported a record cash dividend payout, and announced a 13% increase in our cash dividend.

Despite these positive results and an approximate 32% increase in our stock price during 2007, we saw our stock price fall subsequent to year-end, due in part to market concerns about a slowdown in the U.S. economy and a potential slowing computer marketplace. We have an increasingly international business profile—with about 70% of our products going to non-U.S. markets—but our stock price continues to be closely coupled to the U.S. economic outlook.

Our strategy has been, and continues to be, to invest in new products, technologies, and business efficiencies regardless of the ups and downs of economic cycles. Currently, we are investing to further expand our business in emerging markets and to develop products for market segments that we believe offer growth opportunities, such as mobile Internet devices, consumer electronics, advanced graphics, and low-cost PCs.

Looking back on 2007, I am reminded of the profound effects that our industry has on people across the globe. Through the Intel World Ahead Program, we are seeing examples of these effects. This program integrates and extends our efforts to provide people in emerging markets with technology training and access to affordable, connected PCs to improve education, healthcare, and economic development. On a recent trip to Baramati, a village in western India, I saw how technology is changing communities. The schools have few computers, but the villagers' desire for technology is strong. Local authorities have turned school buses into traveling computer labs, bringing technology to different schools on various days. I asked a 10-year-old girl what her favorite subject was, and she responded, "Tuesday." She said Tuesday was the day the PC bus came to her school, and it was the highlight of her week.

We also collaborate with business and government organizations, such as the World Economic Forum and the United Nations, to help expand the positive impact that technology can have globally. Together, we are not only working to improve lives, but also sowing the seeds for our future business—a true win-win proposition.

I believe we are well-positioned to continue to lead our industry in both business and corporate responsibility. We entered 2008 with what I believe is the best combination of products, silicon technology, and manufacturing leadership in our history. Our investments should allow us to take advantage of new growth opportunities worldwide.

Craig R. Barrett, Chairman of the Board