Operating expenses for the three years ended December 29, 2007 were as follows:

(In Millions)		2007			2006			2005
Research and development		$	5,755		$	5,873		$	5,145
Marketing, general and administrative		$	5,401		$	6,096		$	5,688
Restructuring and asset impairment charges		$	516		$	555		$	—
Amortization of acquisition-related intangibles and costs		$	16		$	42		$	126

Research and Development. R&D spending decreased $118 million, or 2%, in 2007 compared to 2006, and increased $728 million, or 14%, in 2006 compared to 2005. The decrease in 2007 compared to 2006 was primarily due to lower process development costs as we transitioned from R&D to manufacturing using our 45nm process technology, partially offset by higher profit-dependent compensation. The increase in 2006 compared to 2005 was primarily due to share-based compensation resulting from the implementation of SFAS No. 123(R) in 2006, and to a lesser extent, higher development costs driven by our 45nm process technology.

Marketing, General and Administrative. Marketing, general and administrative expenses decreased $695 million, or 11%, in 2007 compared to 2006, and increased $408 million, or 7%, in 2006 compared to 2005. The decrease in 2007 compared to 2006 was primarily due to lower headcount, lower share-based compensation, and lower cooperative advertising expenses, partially offset by higher profit-dependent compensation. The increase in 2006 compared to 2005 was primarily due to share-based compensation resulting from the implementation of SFAS No. 123(R) in 2006, and to a lesser extent, higher headcount. Partially offsetting these increases were lower marketing program spending and lower profit-dependent compensation.

R&D along with marketing, general and administrative expenses were 29% of net revenue in 2007, 34% of net revenue in 2006, and 28% of net revenue in 2005. Fiscal year 2005 included 53 weeks. The percentage decline in 2007 compared to 2006 is an indication of our progress toward improving our cost structure and efficiency as we grew revenue at a faster rate than operating expenses.

Restructuring and Asset Impairment Charges. In the third quarter of 2006, management approved several actions that were recommended by our structure and efficiency task force as part of a restructuring plan designed to improve operational efficiency and financial results. Some of these activities involve cost savings or other actions that do not result in restructuring charges, such as better utilization of assets, reduced spending, and organizational efficiencies. The efficiency program includes headcount targets for various groups within the company, and these targets are being met through ongoing employee attrition and terminations. In addition, business divestitures further reduce our headcount.

Restructuring and asset impairment charges for the three years ended December 29, 2007 were as follows:

(In Millions)		2007			2006			2005
Employee severance and benefit arrangements		$	289		$	238		$	—
Asset impairments			227			317			—
Total restructuring and asset impairment charges		$	516		$	555		$	—

During 2006, we completed the divestiture of three businesses concurrently with the ongoing execution of our efficiency program. See "Note 13: Divestitures" in Part II, Item 8 of this Form 10-K for further discussion. In connection with the divestiture of certain assets of our communications and application processor business, we recorded impairment charges of $103 million related to the write-down of manufacturing tools to their fair value, less the cost to dispose of the assets. We determined the fair value using a market-based valuation technique. In addition, as a result of both this divestiture and a subsequent assessment of our worldwide manufacturing capacity operations, we placed for sale our fabrication facility in Colorado Springs, Colorado. This plan resulted in an impairment charge of $214 million to write down to fair value the land, building, and equipment asset grouping that has been principally used to support our communications and application processor business. We determined the fair market value of the asset grouping using an average of the results from using the cost approach and market approach valuation techniques.

During 2007, we incurred an additional $54 million in asset impairment charges as a result of softer than anticipated market conditions related to the Colorado Springs facility. Also, we recorded land and building write-downs related to certain facilities in Santa Clara, California. In addition, during the fourth quarter we incurred $85 million in asset impairment charges related to the anticipated divestiture of our NOR flash memory business. The impairment charges were determined using the revised fair value, less selling costs, that we expected to receive upon completion of the divestiture. See "Note 13: Divestitures" in Part II, Item 8 of this Form 10-K for further information on this divestiture, which is expected to be completed during the first quarter of 2008.

The following table summarizes the restructuring and asset impairment activity for 2006 and 2007:

(In Millions)		Employee Severance and Benefits			Asset Impairments			Total
Accrued restructuring balance as of December 31, 2005		$	—		$	—		$	—
Additional accruals			238			317			555
Adjustments			—			—			—
Cash payments			(190)			—			(190)
Non-cash settlements			—			(317)			(317)
Accrued restructuring balance as of December 30, 2006		$	48		$	—		$	48
Additional accruals			299			227			526
Adjustments			(10)			—			(10)
Cash payments			(210)			—			(210)
Non-cash settlements			—			(227)			(227)
Accrued restructuring balance as of December 29, 2007		$	127		$	—		$	127

We recorded the additional accruals, net of adjustments, as restructuring and asset impairment charges on the consolidated statements of income. The remaining accrual as of December 29, 2007 was related to severance benefits that we recorded as a current liability within accrued compensation and benefits on the consolidated balance sheets.

From the third quarter of 2006 through the fourth quarter of 2007, we incurred a total of $1.1 billion in restructuring and asset impairment charges related to this plan. These charges included a total of $527 million related to employee severance and benefit arrangements due to the termination of approximately 9,900 employees, of which 7,700 employees had left the company as of December 29, 2007. A substantial majority of these employee terminations affected employees within manufacturing, information technology, and marketing. Of the employee severance and benefit charges incurred as of December 29, 2007, we had paid $400 million. The restructuring and asset impairment charges also included $544 million in asset impairment charges.

We estimate that employee severance and benefit charges to date will result in gross annual savings of approximately $1.0 billion, a portion of which we began to realize in the third quarter of 2006. We are realizing these savings within marketing, general and administrative expenses, cost of sales, and R&D. Our outlook for the first quarter of 2008 is for additional restructuring and asset impairment charges of $100 million. We may incur additional restructuring charges in the future for employee severance and benefit arrangements, as well as facility-related or other exit activities.

Amortization of Acquisition-Related Intangibles and Costs. Amortization of acquisition-related intangibles and costs was $16 million in 2007 ($42 million in 2006 and $126 million in 2005). The decreased amortization each year compared to the previous year was primarily due to a portion of the intangibles related to prior acquisitions becoming fully amortized.