|
þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
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For the quarterly period ended March 28, 2015.
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Delaware
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94-1672743
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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|
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2200 Mission College Boulevard, Santa Clara, California
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95054-1549
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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|
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(Do not check if a smaller reporting company)
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Class
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|
Outstanding as of April 17, 2015
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Common stock, $0.001 par value
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4,744 million
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ITEM 1.
|
FINANCIAL STATEMENTS
|
|
|
Three Months Ended
|
||||||
(In Millions, Except Per Share Amounts)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Net revenue
|
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$
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12,781
|
|
|
$
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12,764
|
|
Cost of sales
|
|
5,051
|
|
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5,151
|
|
||
Gross margin
|
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7,730
|
|
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7,613
|
|
||
Research and development
|
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2,995
|
|
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2,846
|
|
||
Marketing, general and administrative
|
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1,953
|
|
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2,047
|
|
||
Restructuring and asset impairment charges
|
|
105
|
|
|
137
|
|
||
Amortization of acquisition-related intangibles
|
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62
|
|
|
73
|
|
||
Operating expenses
|
|
5,115
|
|
|
5,103
|
|
||
Operating income
|
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2,615
|
|
|
2,510
|
|
||
Gains (losses) on equity investments, net
|
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32
|
|
|
48
|
|
||
Interest and other, net
|
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26
|
|
|
112
|
|
||
Income before taxes
|
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2,673
|
|
|
2,670
|
|
||
Provision for taxes
|
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681
|
|
|
740
|
|
||
Net income
|
|
$
|
1,992
|
|
|
$
|
1,930
|
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Basic earnings per share of common stock
|
|
$
|
0.42
|
|
|
$
|
0.39
|
|
Diluted earnings per share of common stock
|
|
$
|
0.41
|
|
|
$
|
0.38
|
|
Cash dividends declared per share of common stock
|
|
$
|
0.48
|
|
|
$
|
0.45
|
|
Weighted average shares of common stock outstanding:
|
|
|
|
|
||||
Basic
|
|
4,741
|
|
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4,974
|
|
||
Diluted
|
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4,914
|
|
|
5,117
|
|
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Three Months Ended
|
||||||
(In Millions)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Net income
|
|
$
|
1,992
|
|
|
$
|
1,930
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
||||
Change in net unrealized holding gains (losses) on available-for-sale investments
|
|
(342
|
)
|
|
(77
|
)
|
||
Change in deferred tax asset valuation allowance
|
|
(3
|
)
|
|
(2
|
)
|
||
Change in net unrealized holding gains (losses) on derivatives
|
|
(89
|
)
|
|
14
|
|
||
Change in net prior service (costs) credits
|
|
2
|
|
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(42
|
)
|
||
Change in actuarial valuation
|
|
12
|
|
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(2
|
)
|
||
Change in net foreign currency translation adjustment
|
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(178
|
)
|
|
22
|
|
||
Other comprehensive income (loss)
|
|
(598
|
)
|
|
(87
|
)
|
||
Total comprehensive income
|
|
$
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1,394
|
|
|
$
|
1,843
|
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(In Millions)
|
|
Mar 28,
2015 |
|
Dec 27,
2014 |
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
4,244
|
|
|
$
|
2,561
|
|
Short-term investments
|
|
1,864
|
|
|
2,430
|
|
||
Trading assets
|
|
8,010
|
|
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9,063
|
|
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Accounts receivable, net
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3,246
|
|
|
4,427
|
|
||
Inventories
|
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4,418
|
|
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4,273
|
|
||
Deferred tax assets
|
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2,048
|
|
|
1,958
|
|
||
Other current assets
|
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2,636
|
|
|
3,018
|
|
||
Total current assets
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26,466
|
|
|
27,730
|
|
||
|
|
|
|
|
||||
Property, plant and equipment, net of accumulated depreciation of $47,990 ($46,471 as of December 27, 2014)
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33,296
|
|
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33,238
|
|
||
Marketable equity securities
|
|
6,549
|
|
|
7,097
|
|
||
Other long-term investments
|
|
1,675
|
|
|
2,023
|
|
||
Goodwill
|
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10,766
|
|
|
10,861
|
|
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Identified intangible assets, net
|
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4,211
|
|
|
4,446
|
|
||
Other long-term assets
|
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6,603
|
|
|
6,561
|
|
||
Total assets
|
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$
|
89,566
|
|
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$
|
91,956
|
|
|
|
|
|
|
||||
Liabilities, temporary equity, and stockholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Short-term debt
|
|
$
|
1,121
|
|
|
$
|
1,604
|
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Accounts payable
|
|
2,775
|
|
|
2,748
|
|
||
Accrued compensation and benefits
|
|
2,011
|
|
|
3,475
|
|
||
Accrued advertising
|
|
1,014
|
|
|
1,092
|
|
||
Deferred income
|
|
2,196
|
|
|
2,205
|
|
||
Other accrued liabilities
|
|
5,918
|
|
|
4,895
|
|
||
Total current liabilities
|
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15,035
|
|
|
16,019
|
|
||
|
|
|
|
|
||||
Long-term debt
|
|
12,112
|
|
|
12,107
|
|
||
Long-term deferred tax liabilities
|
|
3,462
|
|
|
3,775
|
|
||
Other long-term liabilities
|
|
3,125
|
|
|
3,278
|
|
||
Contingencies (Note 19)
|
|
|
|
|
||||
Temporary equity
|
|
908
|
|
|
912
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock
|
|
—
|
|
|
—
|
|
||
Common stock and capital in excess of par value, 4,742 shares issued and outstanding (4,752 issued and 4,748 outstanding as of December 27, 2014)
|
|
22,395
|
|
|
21,781
|
|
||
Accumulated other comprehensive income (loss)
|
|
68
|
|
|
666
|
|
||
Retained earnings
|
|
32,461
|
|
|
33,418
|
|
||
Total stockholders’ equity
|
|
54,924
|
|
|
55,865
|
|
||
Total liabilities, temporary equity, and stockholders’ equity
|
|
$
|
89,566
|
|
|
$
|
91,956
|
|
|
|
Three Months Ended
|
||||||
(In Millions)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Cash and cash equivalents, beginning of period
|
|
$
|
2,561
|
|
|
$
|
5,674
|
|
Cash flows provided by (used for) operating activities:
|
|
|
|
|
||||
Net income
|
|
1,992
|
|
|
1,930
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation
|
|
1,848
|
|
|
1,720
|
|
||
Share-based compensation
|
|
368
|
|
|
283
|
|
||
Restructuring and asset impairment charges
|
|
105
|
|
|
137
|
|
||
Excess tax benefit from share-based payment arrangements
|
|
(22
|
)
|
|
(7
|
)
|
||
Amortization of intangibles
|
|
251
|
|
|
287
|
|
||
(Gains) losses on equity investments, net
|
|
(32
|
)
|
|
(48
|
)
|
||
Deferred taxes
|
|
(171
|
)
|
|
(25
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
1,167
|
|
|
78
|
|
||
Inventories
|
|
(137
|
)
|
|
405
|
|
||
Accounts payable
|
|
(71
|
)
|
|
(95
|
)
|
||
Accrued compensation and benefits
|
|
(1,659
|
)
|
|
(1,229
|
)
|
||
Income taxes payable and receivable
|
|
221
|
|
|
200
|
|
||
Other assets and liabilities
|
|
555
|
|
|
(135
|
)
|
||
Total adjustments
|
|
2,423
|
|
|
1,571
|
|
||
Net cash provided by operating activities
|
|
4,415
|
|
|
3,501
|
|
||
|
|
|
|
|
||||
Cash flows provided by (used for) investing activities:
|
|
|
|
|
||||
Additions to property, plant and equipment
|
|
(2,025
|
)
|
|
(2,689
|
)
|
||
Acquisitions, net of cash acquired
|
|
(57
|
)
|
|
(108
|
)
|
||
Purchases of available-for-sale investments
|
|
(139
|
)
|
|
(2,509
|
)
|
||
Sales of available-for-sale investments
|
|
43
|
|
|
174
|
|
||
Maturities of available-for-sale investments
|
|
1,079
|
|
|
2,913
|
|
||
Purchases of trading assets
|
|
(2,475
|
)
|
|
(3,225
|
)
|
||
Maturities and sales of trading assets
|
|
3,398
|
|
|
2,693
|
|
||
Investments in non-marketable equity investments
|
|
(278
|
)
|
|
(144
|
)
|
||
Other investing
|
|
5
|
|
|
146
|
|
||
Net cash used for investing activities
|
|
(449
|
)
|
|
(2,749
|
)
|
||
|
|
|
|
|
||||
Cash flows provided by (used for) financing activities:
|
|
|
|
|
||||
Increase (decrease) in short-term debt, net
|
|
(486
|
)
|
|
(245
|
)
|
||
Excess tax benefit from share-based payment arrangements
|
|
22
|
|
|
7
|
|
||
Proceeds from sales of common stock through employee equity incentive plans
|
|
341
|
|
|
479
|
|
||
Repurchase of common stock
|
|
(750
|
)
|
|
(545
|
)
|
||
Restricted stock unit withholdings
|
|
(51
|
)
|
|
(27
|
)
|
||
Payment of dividends to stockholders
|
|
(1,137
|
)
|
|
(1,119
|
)
|
||
Collateral associated with repurchase of common stock
|
|
325
|
|
|
—
|
|
||
Decrease in liability due to return of collateral associated with repurchase of common stock
|
|
(325
|
)
|
|
—
|
|
||
Other financing
|
|
(213
|
)
|
|
(200
|
)
|
||
Net cash used for financing activities
|
|
(2,274
|
)
|
|
(1,650
|
)
|
||
|
|
|
|
|
||||
Effect of exchange rate fluctuations on cash and cash equivalents
|
|
(9
|
)
|
|
1
|
|
||
|
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
1,683
|
|
|
(897
|
)
|
||
|
|
|
|
|
||||
Cash and cash equivalents, end of period
|
|
$
|
4,244
|
|
|
$
|
4,777
|
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
|
||||
Income taxes, net of refunds
|
|
$
|
596
|
|
|
$
|
571
|
|
|
|
March 28, 2015
|
|
December 27, 2014
|
||||||||||||||||||||||||||||
|
|
Fair Value Measured and Recorded at Reporting Date Using
|
|
|
|
Fair Value Measured and Recorded at Reporting Date Using
|
|
|
||||||||||||||||||||||||
(In Millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
$
|
—
|
|
|
$
|
742
|
|
|
$
|
—
|
|
|
$
|
742
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
48
|
|
Financial institution instruments
|
|
226
|
|
|
2,172
|
|
|
—
|
|
|
2,398
|
|
|
321
|
|
|
1,119
|
|
|
—
|
|
|
1,440
|
|
||||||||
Government debt
|
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Reverse repurchase agreements
|
|
—
|
|
|
238
|
|
|
—
|
|
|
238
|
|
|
—
|
|
|
268
|
|
|
—
|
|
|
268
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
262
|
|
|
509
|
|
|
32
|
|
|
803
|
|
|
363
|
|
|
412
|
|
|
31
|
|
|
806
|
|
||||||||
Financial institution instruments
|
|
100
|
|
|
502
|
|
|
—
|
|
|
602
|
|
|
149
|
|
|
1,050
|
|
|
—
|
|
|
1,199
|
|
||||||||
Government debt
|
|
108
|
|
|
351
|
|
|
—
|
|
|
459
|
|
|
252
|
|
|
173
|
|
|
—
|
|
|
425
|
|
||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities
|
|
—
|
|
|
668
|
|
|
40
|
|
|
708
|
|
|
—
|
|
|
766
|
|
|
58
|
|
|
824
|
|
||||||||
Corporate debt
|
|
1,922
|
|
|
576
|
|
|
—
|
|
|
2,498
|
|
|
2,625
|
|
|
339
|
|
|
—
|
|
|
2,964
|
|
||||||||
Financial institution instruments
|
|
950
|
|
|
615
|
|
|
—
|
|
|
1,565
|
|
|
1,146
|
|
|
613
|
|
|
—
|
|
|
1,759
|
|
||||||||
Government debt
|
|
1,077
|
|
|
2,162
|
|
|
—
|
|
|
3,239
|
|
|
1,295
|
|
|
2,221
|
|
|
—
|
|
|
3,516
|
|
||||||||
Other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets
|
|
—
|
|
|
776
|
|
|
2
|
|
|
778
|
|
|
—
|
|
|
559
|
|
|
2
|
|
|
561
|
|
||||||||
Loans receivable
|
|
—
|
|
|
332
|
|
|
—
|
|
|
332
|
|
|
—
|
|
|
505
|
|
|
—
|
|
|
505
|
|
||||||||
Marketable equity securities
|
|
6,487
|
|
|
—
|
|
|
62
|
|
|
6,549
|
|
|
7,097
|
|
|
—
|
|
|
—
|
|
|
7,097
|
|
||||||||
Other long-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities
|
|
—
|
|
|
2
|
|
|
4
|
|
|
6
|
|
|
—
|
|
|
2
|
|
|
4
|
|
|
6
|
|
||||||||
Corporate debt
|
|
542
|
|
|
519
|
|
|
13
|
|
|
1,074
|
|
|
453
|
|
|
728
|
|
|
13
|
|
|
1,194
|
|
||||||||
Financial institution instruments
|
|
197
|
|
|
255
|
|
|
—
|
|
|
452
|
|
|
189
|
|
|
319
|
|
|
—
|
|
|
508
|
|
||||||||
Government debt
|
|
68
|
|
|
75
|
|
|
—
|
|
|
143
|
|
|
75
|
|
|
240
|
|
|
—
|
|
|
315
|
|
||||||||
Other long-term assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets
|
|
—
|
|
|
68
|
|
|
16
|
|
|
84
|
|
|
—
|
|
|
35
|
|
|
22
|
|
|
57
|
|
||||||||
Loans receivable
|
|
—
|
|
|
316
|
|
|
—
|
|
|
316
|
|
|
—
|
|
|
216
|
|
|
—
|
|
|
216
|
|
||||||||
Total assets measured and recorded at fair value
|
|
11,939
|
|
|
10,928
|
|
|
169
|
|
|
23,036
|
|
|
13,965
|
|
|
9,613
|
|
|
130
|
|
|
23,708
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other accrued liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
—
|
|
|
596
|
|
|
2
|
|
|
598
|
|
|
—
|
|
|
563
|
|
|
—
|
|
|
563
|
|
||||||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||||||
Total liabilities measured and recorded at fair value
|
|
$
|
—
|
|
|
$
|
609
|
|
|
$
|
2
|
|
|
$
|
611
|
|
|
$
|
—
|
|
|
$
|
580
|
|
|
$
|
—
|
|
|
$
|
580
|
|
|
|
March 28, 2015
|
||||||||||||||||||
(In Millions)
|
|
Carrying
Amount
|
|
Fair Value Measured Using
|
|
Fair Value
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||||||
Grants receivable
|
|
$
|
660
|
|
|
$
|
—
|
|
|
$
|
662
|
|
|
$
|
—
|
|
|
$
|
662
|
|
Loans receivable
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
250
|
|
Non-marketable cost method investments
|
|
$
|
1,800
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,690
|
|
|
$
|
2,690
|
|
Reverse repurchase agreements
|
|
$
|
450
|
|
|
$
|
—
|
|
|
$
|
450
|
|
|
$
|
—
|
|
|
$
|
450
|
|
Short-term debt
|
|
$
|
1,092
|
|
|
$
|
—
|
|
|
$
|
1,734
|
|
|
$
|
—
|
|
|
$
|
1,734
|
|
Long-term debt
|
|
$
|
12,112
|
|
|
$
|
10,825
|
|
|
$
|
2,138
|
|
|
$
|
—
|
|
|
$
|
12,963
|
|
NVIDIA Corporation cross-license agreement liability
|
|
$
|
196
|
|
|
$
|
—
|
|
|
$
|
199
|
|
|
$
|
—
|
|
|
$
|
199
|
|
|
|
December 27, 2014
|
||||||||||||||||||
(In Millions)
|
|
Carrying
Amount
|
|
Fair Value Measured Using
|
|
Fair Value
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||||||
Grants receivable
|
|
$
|
676
|
|
|
$
|
—
|
|
|
$
|
679
|
|
|
$
|
—
|
|
|
$
|
679
|
|
Loans receivable
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
250
|
|
Non-marketable cost method investments
|
|
$
|
1,769
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,599
|
|
|
$
|
2,599
|
|
Reverse repurchase agreements
|
|
$
|
450
|
|
|
$
|
—
|
|
|
$
|
450
|
|
|
$
|
—
|
|
|
$
|
450
|
|
Short-term debt
|
|
$
|
1,588
|
|
|
$
|
—
|
|
|
$
|
2,145
|
|
|
$
|
—
|
|
|
$
|
2,145
|
|
Long-term debt
|
|
$
|
12,107
|
|
|
$
|
11,467
|
|
|
$
|
1,309
|
|
|
$
|
—
|
|
|
$
|
12,776
|
|
NVIDIA Corporation cross-license agreement liability
|
|
$
|
395
|
|
|
$
|
—
|
|
|
$
|
399
|
|
|
$
|
—
|
|
|
$
|
399
|
|
(In Millions)
|
|
Mar 28,
2015 |
|
Dec 27,
2014 |
||||
Available-for-sale investments
|
|
$
|
13,278
|
|
|
$
|
13,038
|
|
Cash
|
|
816
|
|
|
805
|
|
||
Equity method investments
|
|
1,574
|
|
|
1,446
|
|
||
Loans receivable
|
|
898
|
|
|
971
|
|
||
Non-marketable cost method investments
|
|
1,800
|
|
|
1,769
|
|
||
Reverse repurchase agreements
|
|
688
|
|
|
718
|
|
||
Trading assets
|
|
8,010
|
|
|
9,063
|
|
||
Total cash and investments
|
|
$
|
27,064
|
|
|
$
|
27,810
|
|
|
|
March 28, 2015
|
|
December 27, 2014
|
||||||||||||||||||||||||||||
(In Millions)
|
|
Adjusted Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Adjusted Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||||||||||
Asset-backed securities
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
6
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
6
|
|
Corporate debt
|
|
2,609
|
|
|
15
|
|
|
(5
|
)
|
|
2,619
|
|
|
2,040
|
|
|
13
|
|
|
(5
|
)
|
|
2,048
|
|
||||||||
Financial institution instruments
|
|
3,452
|
|
|
1
|
|
|
(1
|
)
|
|
3,452
|
|
|
3,146
|
|
|
2
|
|
|
(1
|
)
|
|
3,147
|
|
||||||||
Government debt
|
|
651
|
|
|
1
|
|
|
—
|
|
|
652
|
|
|
741
|
|
|
—
|
|
|
(1
|
)
|
|
740
|
|
||||||||
Marketable equity securities
|
|
3,300
|
|
|
3,255
|
|
|
(6
|
)
|
|
6,549
|
|
|
3,318
|
|
|
3,779
|
|
|
—
|
|
|
7,097
|
|
||||||||
Total available-for-sale investments
|
|
$
|
10,020
|
|
|
$
|
3,272
|
|
|
$
|
(14
|
)
|
|
$
|
13,278
|
|
|
$
|
9,253
|
|
|
$
|
3,794
|
|
|
$
|
(9
|
)
|
|
$
|
13,038
|
|
(In Millions)
|
|
Cost
|
|
Fair Value
|
||||
Due in 1 year or less
|
|
$
|
4,697
|
|
|
$
|
4,707
|
|
Due in 1–2 years
|
|
864
|
|
|
865
|
|
||
Due in 2–5 years
|
|
779
|
|
|
778
|
|
||
Instruments not due at a single maturity date
|
|
380
|
|
|
379
|
|
||
Total
|
|
$
|
6,720
|
|
|
$
|
6,729
|
|
(In Millions)
|
|
Mar 28,
2015 |
|
Dec 27,
2014 |
||||
Raw materials
|
|
$
|
528
|
|
|
$
|
462
|
|
Work in process
|
|
2,190
|
|
|
2,375
|
|
||
Finished goods
|
|
1,700
|
|
|
1,436
|
|
||
Total inventories
|
|
$
|
4,418
|
|
|
$
|
4,273
|
|
•
|
Currency derivatives with cash flow hedge accounting designation
that utilize currency forward contracts and currency options to hedge exposures to the variability in the U.S.-dollar equivalent of anticipated non-U.S.-dollar-denominated cash flows.
These instruments generally mature within
12 months
. For these derivatives, we report the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive income (loss), and we reclassify it into earnings in the same period or periods in which the hedged transaction affects earnings, and in the same line item on the consolidated condensed statements of income as the impact of the hedged transaction.
|
•
|
Currency derivatives without hedge accounting designation
that utilize currency forward contracts or currency interest rate swaps to economically hedge the functional currency equivalent cash flows of recognized monetary assets and liabilities, non-U.S.-dollar-denominated debt instruments classified as trading assets, and hedges of non-U.S.-dollar-denominated loans receivable are recognized at fair value.
The substantial majority of these instruments mature within
12 months
. Changes in the functional currency equivalent cash flows of the underlying assets and liabilities are approximately offset by the changes in the fair value of the related derivatives. We record net gains or losses in the line item on the consolidated condensed statements of income most closely associated with the related exposures, primarily in interest and other, net, except for equity-related gains or losses, which we primarily record in gains (losses) on equity investments, net.
|
•
|
Interest rate derivatives with cash flow hedge accounting designation
that utilize interest rate swap agreements to modify the interest characteristics of debt instruments. For these derivatives, we report the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive income (loss), and we reclassify it into earnings in the same period or periods in which the hedged transaction affects earnings, and in the same line item on the consolidated condensed statements of income as the impact of the hedged transaction.
|
•
|
Interest rate derivatives without hedge accounting designation
that utilize interest rate swaps and currency interest rate swaps in economic hedging transactions, including hedges of non-U.S.-dollar-denominated debt instruments classified as trading assets and hedges of non-U.S.-dollar-denominated loans receivable recognized at fair value. Floating interest rates on the swaps generally reset on a quarterly basis. Changes in fair value of the debt instruments classified as trading assets and loans receivable recognized at fair value are generally offset by changes in the fair value of the related derivatives, both of which are recorded in interest and other, net.
|
(In Millions)
|
|
Mar 28,
2015 |
|
Dec 27,
2014 |
|
Mar 29,
2014 |
||||||
Currency forwards
|
|
$
|
16,192
|
|
|
$
|
15,578
|
|
|
$
|
11,729
|
|
Currency interest rate swaps
|
|
5,094
|
|
|
5,446
|
|
|
4,795
|
|
|||
Embedded debt derivatives
|
|
3,600
|
|
|
3,600
|
|
|
3,600
|
|
|||
Interest rate swaps
|
|
1,128
|
|
|
1,347
|
|
|
1,311
|
|
|||
Total return swaps
|
|
1,106
|
|
|
1,056
|
|
|
989
|
|
|||
Other
|
|
72
|
|
|
49
|
|
|
60
|
|
|||
Total
|
|
$
|
27,192
|
|
|
$
|
27,076
|
|
|
$
|
22,484
|
|
(In Millions)
|
|
Mar 28,
2015 |
|
Dec 27,
2014 |
|
Mar 29,
2014 |
||||||
British pound sterling
|
|
$
|
314
|
|
|
$
|
410
|
|
|
$
|
487
|
|
Chinese yuan
|
|
4,079
|
|
|
3,097
|
|
|
1,291
|
|
|||
Euro
|
|
7,332
|
|
|
7,486
|
|
|
6,199
|
|
|||
Indian rupee
|
|
420
|
|
|
418
|
|
|
252
|
|
|||
Israeli shekel
|
|
2,010
|
|
|
2,489
|
|
|
1,878
|
|
|||
Japanese yen
|
|
4,206
|
|
|
3,779
|
|
|
3,542
|
|
|||
Malaysian ringgit
|
|
827
|
|
|
902
|
|
|
524
|
|
|||
Swiss franc
|
|
1,146
|
|
|
1,289
|
|
|
1,256
|
|
|||
Other
|
|
952
|
|
|
1,154
|
|
|
1,095
|
|
|||
Total
|
|
$
|
21,286
|
|
|
$
|
21,024
|
|
|
$
|
16,524
|
|
|
|
March 28, 2015
|
|
December 27, 2014
|
||||||||||||||||||||||||||||
(In Millions)
|
|
Other
Current
Assets
|
|
Other
Long-Term
Assets
|
|
Other
Accrued
Liabilities
|
|
Other
Long-Term
Liabilities
|
|
Other
Current
Assets
|
|
Other
Long-Term
Assets
|
|
Other
Accrued
Liabilities
|
|
Other
Long-Term
Liabilities
|
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Currency forwards
|
|
$
|
12
|
|
|
$
|
3
|
|
|
$
|
483
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
497
|
|
|
$
|
9
|
|
Total derivatives designated as hedging instruments
|
|
12
|
|
|
3
|
|
|
483
|
|
|
5
|
|
|
6
|
|
|
1
|
|
|
497
|
|
|
9
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Currency forwards
|
|
253
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
207
|
|
|
—
|
|
|
44
|
|
|
—
|
|
||||||||
Currency interest rate swaps
|
|
510
|
|
|
65
|
|
|
12
|
|
|
—
|
|
|
344
|
|
|
34
|
|
|
7
|
|
|
—
|
|
||||||||
Embedded debt derivatives
|
|
—
|
|
|
—
|
|
|
1
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
8
|
|
||||||||
Interest rate swaps
|
|
1
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||||||
Other
|
|
2
|
|
|
16
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
22
|
|
|
—
|
|
|
—
|
|
||||||||
Total derivatives not designated as hedging instruments
|
|
766
|
|
|
81
|
|
|
115
|
|
|
8
|
|
|
555
|
|
|
56
|
|
|
66
|
|
|
8
|
|
||||||||
Total derivatives
|
|
$
|
778
|
|
|
$
|
84
|
|
|
$
|
598
|
|
|
$
|
13
|
|
|
$
|
561
|
|
|
$
|
57
|
|
|
$
|
563
|
|
|
$
|
17
|
|
|
|
March 28, 2015
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Balance Sheet
|
|
|
||||||||||||||
(In Millions)
|
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Balance Sheet
|
|
Net Amounts Presented in the Balance Sheet
|
|
Financial Instruments
|
|
Cash and Non-Cash Collateral Received or Pledged
|
|
Net Amount
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets subject to master netting arrangements
|
|
$
|
818
|
|
|
$
|
—
|
|
|
$
|
818
|
|
|
$
|
(465
|
)
|
|
$
|
(231
|
)
|
|
$
|
122
|
|
Reverse repurchase agreements
|
|
688
|
|
|
—
|
|
|
688
|
|
|
—
|
|
|
(688
|
)
|
|
—
|
|
||||||
Total assets
|
|
$
|
1,506
|
|
|
$
|
—
|
|
|
$
|
1,506
|
|
|
$
|
(465
|
)
|
|
$
|
(919
|
)
|
|
$
|
122
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities subject to master netting arrangements
|
|
$
|
585
|
|
|
$
|
—
|
|
|
$
|
585
|
|
|
$
|
(465
|
)
|
|
$
|
(49
|
)
|
|
$
|
71
|
|
Total liabilities
|
|
$
|
585
|
|
|
$
|
—
|
|
|
$
|
585
|
|
|
$
|
(465
|
)
|
|
$
|
(49
|
)
|
|
$
|
71
|
|
|
|
December 27, 2014
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Balance Sheet
|
|
|
||||||||||||||
(In Millions)
|
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Balance Sheet
|
|
Net Amounts Presented in the Balance Sheet
|
|
Financial Instruments
|
|
Cash and Non-Cash Collateral Received or Pledged
|
|
Net Amount
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets subject to master netting arrangements
|
|
$
|
559
|
|
|
$
|
—
|
|
|
$
|
559
|
|
|
$
|
(365
|
)
|
|
$
|
(78
|
)
|
|
$
|
116
|
|
Reverse repurchase agreements
|
|
718
|
|
|
—
|
|
|
718
|
|
|
—
|
|
|
(718
|
)
|
|
—
|
|
||||||
Total assets
|
|
$
|
1,277
|
|
|
$
|
—
|
|
|
$
|
1,277
|
|
|
$
|
(365
|
)
|
|
$
|
(796
|
)
|
|
$
|
116
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities subject to master netting arrangements
|
|
$
|
559
|
|
|
$
|
—
|
|
|
$
|
559
|
|
|
$
|
(365
|
)
|
|
$
|
(80
|
)
|
|
$
|
114
|
|
Total liabilities
|
|
$
|
559
|
|
|
$
|
—
|
|
|
$
|
559
|
|
|
$
|
(365
|
)
|
|
$
|
(80
|
)
|
|
$
|
114
|
|
|
|
Three Months Ended
|
||||||
(In Millions)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Currency forwards
|
|
$
|
(229
|
)
|
|
$
|
35
|
|
Other
|
|
—
|
|
|
(2
|
)
|
||
Total
|
|
$
|
(229
|
)
|
|
$
|
33
|
|
|
|
|
|
Three Months Ended
|
||||||
(In Millions)
|
|
Location of Gains (Losses)
Recognized in Income on Derivatives
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Currency forwards
|
|
Interest and other, net
|
|
$
|
(18
|
)
|
|
$
|
(15
|
)
|
Currency interest rate swaps
|
|
Interest and other, net
|
|
253
|
|
|
(54
|
)
|
||
Interest rate swaps
|
|
Interest and other, net
|
|
(6
|
)
|
|
—
|
|
||
Total return swaps
|
|
Various
|
|
31
|
|
|
13
|
|
||
Other
|
|
Gains (losses) on equity investments, net
|
|
(9
|
)
|
|
1
|
|
||
Total
|
|
|
|
$
|
251
|
|
|
$
|
(55
|
)
|
(In Millions)
|
|
Dec 27,
2014 |
|
Acquisitions
|
|
Transfers
|
|
Currency Exchange and Other
|
|
Mar 28,
2015 |
||||||||||
Client Computing Group
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,708
|
|
|
$
|
—
|
|
|
$
|
3,708
|
|
PC Client Group
|
|
3,058
|
|
|
—
|
|
|
(3,058
|
)
|
|
—
|
|
|
—
|
|
|||||
Data Center Group
|
|
2,376
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,376
|
|
|||||
Internet of Things Group
|
|
428
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
428
|
|
|||||
Mobile and Communications Group
|
|
650
|
|
|
—
|
|
|
(650
|
)
|
|
—
|
|
|
—
|
|
|||||
Software and services operating segments
|
|
4,236
|
|
|
—
|
|
|
—
|
|
|
(163
|
)
|
|
4,073
|
|
|||||
All other
|
|
113
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|
181
|
|
|||||
Total
|
|
$
|
10,861
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
(163
|
)
|
|
$
|
10,766
|
|
|
|
March 28, 2015
|
||||||||||
(In Millions)
|
|
Gross Assets
|
|
Accumulated
Amortization |
|
Net
|
||||||
Acquisition-related developed technology
|
|
$
|
2,964
|
|
|
$
|
(2,273
|
)
|
|
$
|
691
|
|
Acquisition-related customer relationships
|
|
1,644
|
|
|
(1,024
|
)
|
|
620
|
|
|||
Acquisition-related trade names
|
|
61
|
|
|
(51
|
)
|
|
10
|
|
|||
Licensed technology and patents
|
|
3,082
|
|
|
(1,159
|
)
|
|
1,923
|
|
|||
Identified intangible assets subject to amortization
|
|
7,751
|
|
|
(4,507
|
)
|
|
3,244
|
|
|||
Acquisition-related trade names
|
|
764
|
|
|
—
|
|
|
764
|
|
|||
Other intangible assets
|
|
203
|
|
|
—
|
|
|
203
|
|
|||
Identified intangible assets not subject to amortization
|
|
967
|
|
|
—
|
|
|
967
|
|
|||
Total identified intangible assets
|
|
$
|
8,718
|
|
|
$
|
(4,507
|
)
|
|
$
|
4,211
|
|
|
|
December 27, 2014
|
||||||||||
(In Millions)
|
|
Gross Assets
|
|
Accumulated
Amortization |
|
Net
|
||||||
Acquisition-related developed technology
|
|
$
|
3,009
|
|
|
$
|
(2,192
|
)
|
|
$
|
817
|
|
Acquisition-related customer relationships
|
|
1,698
|
|
|
(1,001
|
)
|
|
697
|
|
|||
Acquisition-related trade names
|
|
61
|
|
|
(49
|
)
|
|
12
|
|
|||
Licensed technology and patents
|
|
3,153
|
|
|
(1,224
|
)
|
|
1,929
|
|
|||
Identified intangible assets subject to amortization
|
|
7,921
|
|
|
(4,466
|
)
|
|
3,455
|
|
|||
Acquisition-related trade names
|
|
788
|
|
|
—
|
|
|
788
|
|
|||
Other intangible assets
|
|
203
|
|
|
—
|
|
|
203
|
|
|||
Identified intangible assets not subject to amortization
|
|
991
|
|
|
—
|
|
|
991
|
|
|||
Total identified intangible assets
|
|
$
|
8,912
|
|
|
$
|
(4,466
|
)
|
|
$
|
4,446
|
|
|
|
|
|
Three Months Ended
|
||||||
(In Millions)
|
|
Location
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Acquisition-related developed technology
|
|
Cost of sales
|
|
$
|
120
|
|
|
$
|
146
|
|
Acquisition-related customer relationships
|
|
Amortization of acquisition-related intangibles
|
|
60
|
|
|
70
|
|
||
Acquisition-related trade names
|
|
Amortization of acquisition-related intangibles
|
|
2
|
|
|
3
|
|
||
Licensed technology and patents
|
|
Cost of sales
|
|
69
|
|
|
68
|
|
||
Total amortization expenses
|
|
|
|
$
|
251
|
|
|
$
|
287
|
|
(In Millions)
|
|
Remainder of 2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||
Acquisition-related developed technology
|
|
$
|
210
|
|
|
$
|
239
|
|
|
$
|
90
|
|
|
$
|
69
|
|
|
$
|
60
|
|
Acquisition-related customer relationships
|
|
179
|
|
|
223
|
|
|
137
|
|
|
34
|
|
|
15
|
|
|||||
Acquisition-related trade names
|
|
7
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Licensed technology and patents
|
|
207
|
|
|
262
|
|
|
219
|
|
|
177
|
|
|
176
|
|
|||||
Total future amortization expenses
|
|
$
|
603
|
|
|
$
|
727
|
|
|
$
|
446
|
|
|
$
|
280
|
|
|
$
|
251
|
|
(In Millions)
|
|
Mar 28,
2015 |
|
Dec 27,
2014 |
||||
Equity method investments
|
|
$
|
1,574
|
|
|
$
|
1,446
|
|
Non-marketable cost method investments
|
|
1,800
|
|
|
1,769
|
|
||
Non-current deferred tax assets
|
|
638
|
|
|
622
|
|
||
Pre-payments for property, plant and equipment
|
|
515
|
|
|
636
|
|
||
Loans receivable
|
|
316
|
|
|
416
|
|
||
Other
|
|
1,760
|
|
|
1,672
|
|
||
Total other long-term assets
|
|
$
|
6,603
|
|
|
$
|
6,561
|
|
|
|
Three Months Ended
|
||||||
(In Millions)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Employee severance and benefit arrangements
|
|
$
|
99
|
|
|
$
|
137
|
|
Asset impairments and other restructuring charges
|
|
6
|
|
|
—
|
|
||
Total restructuring and asset impairment charges
|
|
$
|
105
|
|
|
$
|
137
|
|
(In Millions)
|
|
Employee Severance and Benefits
|
|
Asset Impairments and Other
|
|
Total
|
||||||
Accrued restructuring balance as of December 27, 2014
|
|
$
|
121
|
|
|
$
|
11
|
|
|
$
|
132
|
|
Additional accruals
|
|
99
|
|
|
7
|
|
|
106
|
|
|||
Adjustments
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Cash payments
|
|
(82
|
)
|
|
(4
|
)
|
|
(86
|
)
|
|||
Non-cash settlements
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Accrued restructuring balance as of March 28, 2015
|
|
$
|
138
|
|
|
$
|
11
|
|
|
$
|
149
|
|
(In Millions)
|
|
Mar 28,
2015 |
|
Dec 27,
2014 |
||||
Deferred income on shipments of components to distributors
|
|
$
|
965
|
|
|
$
|
944
|
|
Deferred income from software and services
|
|
1,231
|
|
|
1,261
|
|
||
Current deferred income
|
|
2,196
|
|
|
2,205
|
|
||
Non-current deferred income from software and services
|
|
428
|
|
|
483
|
|
||
Total deferred income
|
|
$
|
2,624
|
|
|
$
|
2,688
|
|
|
|
Number of
RSUs
(In Millions)
|
|
Weighted Average
Grant-Date
Fair Value
|
|||
December 27, 2014
|
|
119.4
|
|
|
$
|
23.89
|
|
Granted
|
|
6.7
|
|
|
$
|
39.05
|
|
Vested
|
|
(3.1
|
)
|
|
$
|
27.52
|
|
Forfeited
|
|
(1.9
|
)
|
|
$
|
23.97
|
|
March 28, 2015
|
|
121.1
|
|
|
$
|
24.63
|
|
|
|
Number of
Options
(In Millions)
|
|
Weighted Average
Exercise Price
|
|||
December 27, 2014
|
|
77.3
|
|
|
$
|
21.30
|
|
Exercised
|
|
(5.2
|
)
|
|
$
|
20.43
|
|
Cancelled and forfeited
|
|
(0.4
|
)
|
|
$
|
23.07
|
|
Expired
|
|
(0.1
|
)
|
|
$
|
21.97
|
|
March 28, 2015
|
|
71.6
|
|
|
$
|
21.35
|
|
Options exercisable as of:
|
|
|
|
|
|||
December 27, 2014
|
|
54.7
|
|
|
$
|
20.29
|
|
March 28, 2015
|
|
53.1
|
|
|
$
|
20.41
|
|
|
|
Three Months Ended
|
||||||
(In Millions)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Share of equity method investee losses, net
|
|
$
|
(48
|
)
|
|
$
|
(11
|
)
|
Impairments
|
|
(38
|
)
|
|
(38
|
)
|
||
Gains on sales, net
|
|
46
|
|
|
71
|
|
||
Other, net
|
|
72
|
|
|
26
|
|
||
Total gains (losses) on equity investments, net
|
|
$
|
32
|
|
|
$
|
48
|
|
|
|
Three Months Ended
|
||||||
(In Millions)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Interest income
|
|
$
|
32
|
|
|
$
|
35
|
|
Interest expense
|
|
(42
|
)
|
|
(37
|
)
|
||
Other, net
|
|
36
|
|
|
114
|
|
||
Total interest and other, net
|
|
$
|
26
|
|
|
$
|
112
|
|
|
|
Three Months Ended
|
||||||
(In Millions, Except Per Share Amounts)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Net income available to common stockholders
|
|
$
|
1,992
|
|
|
$
|
1,930
|
|
Weighted average shares of common stock outstanding—basic
|
|
4,741
|
|
|
4,974
|
|
||
Dilutive effect of employee equity incentive plans
|
|
82
|
|
|
76
|
|
||
Dilutive effect of convertible debt
|
|
91
|
|
|
67
|
|
||
Weighted average shares of common stock outstanding—diluted
|
|
4,914
|
|
|
5,117
|
|
||
Basic earnings per share of common stock
|
|
$
|
0.42
|
|
|
$
|
0.39
|
|
Diluted earnings per share of common stock
|
|
$
|
0.41
|
|
|
$
|
0.38
|
|
(In Millions)
|
|
Unrealized Holding Gains (Losses) on Available-for-Sale Investments
|
|
Deferred Tax Asset Valuation Allowance
|
|
Unrealized Holding Gains (Losses) on Derivatives
|
|
Prior Service Credits (Costs)
|
|
Actuarial Gains (Losses)
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||||||||||||
December 27, 2014
|
|
$
|
2,459
|
|
|
$
|
26
|
|
|
$
|
(423
|
)
|
|
$
|
(47
|
)
|
|
$
|
(1,004
|
)
|
|
$
|
(345
|
)
|
|
$
|
666
|
|
Other comprehensive income (loss) before reclassifications
|
|
(472
|
)
|
|
—
|
|
|
(229
|
)
|
|
—
|
|
|
2
|
|
|
(197
|
)
|
|
(896
|
)
|
|||||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
(54
|
)
|
|
—
|
|
|
99
|
|
|
2
|
|
|
14
|
|
|
—
|
|
|
61
|
|
|||||||
Tax effects
|
|
184
|
|
|
(3
|
)
|
|
41
|
|
|
—
|
|
|
(4
|
)
|
|
19
|
|
|
237
|
|
|||||||
Other comprehensive income (loss)
|
|
(342
|
)
|
|
(3
|
)
|
|
(89
|
)
|
|
2
|
|
|
12
|
|
|
(178
|
)
|
|
(598
|
)
|
|||||||
March 28, 2015
|
|
$
|
2,117
|
|
|
$
|
23
|
|
|
$
|
(512
|
)
|
|
$
|
(45
|
)
|
|
$
|
(992
|
)
|
|
$
|
(523
|
)
|
|
$
|
68
|
|
|
|
Income Before Taxes Impact
(In Millions) |
|
|
||||||
|
|
Three Months Ended
|
|
|
||||||
Comprehensive Income Components
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
|
Location
|
||||
Unrealized holding gains (losses) on available-for-sale investments:
|
|
|
|
|
|
|
||||
|
|
$
|
—
|
|
|
$
|
2
|
|
|
Interest and other, net
|
|
|
54
|
|
|
61
|
|
|
Gains (losses) on equity investments, net
|
||
|
|
54
|
|
|
63
|
|
|
|
||
Unrealized holding gains (losses) on derivatives:
|
|
|
|
|
|
|
||||
Currency forwards
|
|
(43
|
)
|
|
2
|
|
|
Cost of sales
|
||
|
|
(47
|
)
|
|
8
|
|
|
Research and development
|
||
|
|
(9
|
)
|
|
2
|
|
|
Marketing, general and administrative
|
||
|
|
(99
|
)
|
|
12
|
|
|
|
||
Amortization of pension and postretirement benefit components:
|
|
|
|
|
|
|
||||
Prior service credits (costs)
|
|
(2
|
)
|
|
(1
|
)
|
|
|
||
Actuarial gains (losses)
|
|
(14
|
)
|
|
(10
|
)
|
|
|
||
|
|
(16
|
)
|
|
(11
|
)
|
|
|
||
Total amounts reclassified out of accumulated other comprehensive income (loss)
|
|
$
|
(61
|
)
|
|
$
|
64
|
|
|
|
• Client Computing Group
|
|
• All other
|
• Data Center Group
|
|
• Non-Volatile Memory Solutions Group
|
• Internet of Things Group
|
|
• New Devices Group
|
• Software and services operating segments
|
|
|
• McAfee
|
|
|
• Software and Services Group
|
|
|
•
|
Client Computing Group
.
Includes platforms designed for the notebook (including Ultrabook™ devices), 2 in 1 systems, the desktop (including all-in-ones and high-end enthusiast PCs), tablets, and smartphones; wireless and wired connectivity products; as well as mobile communication components.
|
•
|
Data Center Group.
Includes server, network, and storage platforms designed for enterprise, cloud, communications infrastructure, and technical computing segments.
|
•
|
Internet of Things Group.
Includes platforms designed for embedded market segments including retail, transportation, industrial, and buildings and home, along with a broad range of other market segments.
|
•
|
Software and services operating segments.
Includes software and hardware products for endpoint security, network and content security, risk and compliance, and consumer and mobile security from our McAfee business, and software products and services that promote Intel architecture as the platform of choice for software development.
|
•
|
results of operations from our Non-Volatile Memory Solutions Group and New Devices Group;
|
•
|
amounts included within restructuring and asset impairment charges;
|
•
|
a portion of profit-dependent compensation and other expenses not allocated to the operating segments;
|
•
|
divested businesses for which discrete operating results are not regularly reviewed by our CODM;
|
•
|
results of operations of start-up businesses that support our initiatives, including our foundry business; and
|
•
|
acquisition-related costs, including amortization and any impairment of acquisition-related intangibles and goodwill.
|
|
|
Three Months Ended
|
||||||
(In Millions)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Net revenue:
|
|
|
|
|
||||
Client Computing Group
|
|
$
|
7,420
|
|
|
$
|
8,097
|
|
Data Center Group
|
|
3,679
|
|
|
3,087
|
|
||
Internet of Things Group
|
|
533
|
|
|
482
|
|
||
Software and services operating segments
|
|
534
|
|
|
553
|
|
||
All other
|
|
615
|
|
|
545
|
|
||
Total net revenue
|
|
12,781
|
|
|
12,764
|
|
||
Operating income (loss):
|
|
|
|
|
||||
Client Computing Group
|
|
1,410
|
|
|
1,847
|
|
||
Data Center Group
|
|
1,701
|
|
|
1,336
|
|
||
Internet of Things Group
|
|
87
|
|
|
115
|
|
||
Software and services operating segments
|
|
3
|
|
|
8
|
|
||
All other
|
|
(586
|
)
|
|
(796
|
)
|
||
Total operating income
|
|
$
|
2,615
|
|
|
$
|
2,510
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Overview
. Discussion of our business and overall analysis of financial and other highlights affecting the company in order to provide context for the remainder of MD&A.
|
•
|
Results of Operations
. Analysis of our financial results comparing the
three months ended
March 28, 2015
to the
three months ended
March 29, 2014
.
|
•
|
Liquidity and Capital Resources
. Analysis of changes in our balance sheets and cash flows, and discussion of our financial condition and potential sources of liquidity.
|
•
|
Fair Value of Financial Instruments
. Discussion of the methodologies used in the valuation of our financial instruments.
|
(Dollars in Millions, Except Per Share Amounts)
|
|
Q1 2015
|
|
Q4 2014
|
|
Change
|
|
Q1 2015
|
|
Q1 2014
|
|
Change
|
||||||||||||
Net revenue
|
|
$
|
12,781
|
|
|
$
|
14,721
|
|
|
$
|
(1,940
|
)
|
|
$
|
12,781
|
|
|
$
|
12,764
|
|
|
$
|
17
|
|
Gross margin
|
|
$
|
7,730
|
|
|
$
|
9,621
|
|
|
$
|
(1,891
|
)
|
|
$
|
7,730
|
|
|
$
|
7,613
|
|
|
$
|
117
|
|
Gross margin percentage
|
|
60.5
|
%
|
|
65.4
|
%
|
|
(4.9
|
)%
|
|
60.5
|
%
|
|
59.6
|
%
|
|
0.9
|
%
|
||||||
Operating income
|
|
$
|
2,615
|
|
|
$
|
4,453
|
|
|
$
|
(1,838
|
)
|
|
$
|
2,615
|
|
|
$
|
2,510
|
|
|
$
|
105
|
|
Net income
|
|
$
|
1,992
|
|
|
$
|
3,661
|
|
|
$
|
(1,669
|
)
|
|
$
|
1,992
|
|
|
$
|
1,930
|
|
|
$
|
62
|
|
Diluted earnings per common share
|
|
$
|
0.41
|
|
|
$
|
0.74
|
|
|
$
|
(0.33
|
)
|
|
$
|
0.41
|
|
|
$
|
0.38
|
|
|
$
|
0.03
|
|
|
|
Q1 2015
|
|
Q1 2014
|
||||||||||
(Dollars in Millions, Except Per Share Amounts)
|
|
Dollars
|
|
% of Net
Revenue |
|
Dollars
|
|
% of Net
Revenue |
||||||
Net revenue
|
|
$
|
12,781
|
|
|
100.0
|
%
|
|
$
|
12,764
|
|
|
100.0
|
%
|
Cost of sales
|
|
5,051
|
|
|
39.5
|
%
|
|
5,151
|
|
|
40.4
|
%
|
||
Gross margin
|
|
7,730
|
|
|
60.5
|
%
|
|
7,613
|
|
|
59.6
|
%
|
||
Research and development
|
|
2,995
|
|
|
23.4
|
%
|
|
2,846
|
|
|
22.3
|
%
|
||
Marketing, general and administrative
|
|
1,953
|
|
|
15.3
|
%
|
|
2,047
|
|
|
15.9
|
%
|
||
Restructuring and asset impairment charges
|
|
105
|
|
|
0.8
|
%
|
|
137
|
|
|
1.1
|
%
|
||
Amortization of acquisition-related intangibles
|
|
62
|
|
|
0.5
|
%
|
|
73
|
|
|
0.6
|
%
|
||
Operating income
|
|
2,615
|
|
|
20.5
|
%
|
|
2,510
|
|
|
19.7
|
%
|
||
Gains (losses) on equity investments, net
|
|
32
|
|
|
0.2
|
%
|
|
48
|
|
|
0.4
|
%
|
||
Interest and other, net
|
|
26
|
|
|
0.2
|
%
|
|
112
|
|
|
0.8
|
%
|
||
Income before taxes
|
|
2,673
|
|
|
20.9
|
%
|
|
2,670
|
|
|
20.9
|
%
|
||
Provision for taxes
|
|
681
|
|
|
5.3
|
%
|
|
740
|
|
|
5.8
|
%
|
||
Net income
|
|
$
|
1,992
|
|
|
15.6
|
%
|
|
$
|
1,930
|
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings per common share
|
|
$
|
0.41
|
|
|
|
|
$
|
0.38
|
|
|
|
(In Millions)
|
|
Q1 2015
|
|
Q1 2014
|
||||
Net revenue
|
|
$
|
7,420
|
|
|
$
|
8,097
|
|
Operating income
|
|
$
|
1,410
|
|
|
$
|
1,847
|
|
(In Millions)
|
|
Q1 2015
|
|
Q1 2014
|
||||
Net revenue
|
|
$
|
3,679
|
|
|
$
|
3,087
|
|
Operating income
|
|
$
|
1,701
|
|
|
$
|
1,336
|
|
(In Millions)
|
|
Q1 2015
|
|
Q1 2014
|
||||
Net revenue
|
|
$
|
533
|
|
|
$
|
482
|
|
Operating income
|
|
$
|
87
|
|
|
$
|
115
|
|
(In Millions)
|
|
Q1 2015
|
|
Q1 2014
|
||||
Net revenue
|
|
$
|
534
|
|
|
$
|
553
|
|
Operating income (loss)
|
|
$
|
3
|
|
|
$
|
8
|
|
(Dollars in Millions)
|
|
Q1 2015
|
|
Q1 2014
|
||||
Research and development (R&D)
|
|
$
|
2,995
|
|
|
$
|
2,846
|
|
Marketing, general and administrative (MG&A)
|
|
$
|
1,953
|
|
|
$
|
2,047
|
|
R&D and MG&A as percentage of net revenue
|
|
39
|
%
|
|
38
|
%
|
||
Restructuring and asset impairment charges
|
|
$
|
105
|
|
|
$
|
137
|
|
Amortization of acquisition-related intangibles
|
|
$
|
62
|
|
|
$
|
73
|
|
|
|
Three Months Ended
|
||||||
(In Millions)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||
Employee severance and benefit arrangements
|
|
$
|
99
|
|
|
$
|
137
|
|
Asset impairments and other restructuring charges
|
|
6
|
|
|
—
|
|
||
Total restructuring and asset impairment charges
|
|
$
|
105
|
|
|
$
|
137
|
|
(In Millions)
|
|
Employee Severance and Benefits
|
|
Asset Impairments and Other
|
|
Total
|
||||||
Accrued restructuring balance as of December 27, 2014
|
|
$
|
121
|
|
|
$
|
11
|
|
|
$
|
132
|
|
Additional accruals
|
|
99
|
|
|
7
|
|
|
106
|
|
|||
Adjustments
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Cash payments
|
|
(82
|
)
|
|
(4
|
)
|
|
(86
|
)
|
|||
Non-cash settlements
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Accrued restructuring balance as of March 28, 2015
|
|
$
|
138
|
|
|
$
|
11
|
|
|
$
|
149
|
|
(In Millions)
|
|
Q1 2015
|
|
Q1 2014
|
||||
Gains (losses) on equity investments, net
|
|
$
|
32
|
|
|
$
|
48
|
|
Interest and other, net
|
|
$
|
26
|
|
|
$
|
112
|
|
(Dollars in Millions)
|
|
Mar 28,
2015 |
|
Dec 27,
2014 |
||||
Cash and cash equivalents, short-term investments, and trading assets
|
|
$
|
14,118
|
|
|
$
|
14,054
|
|
Other long-term investments
|
|
$
|
1,675
|
|
|
$
|
2,023
|
|
Loans receivable and other
|
|
$
|
1,297
|
|
|
$
|
1,285
|
|
Reverse repurchase agreements with original maturities greater than approximately three months
|
|
$
|
450
|
|
|
$
|
450
|
|
Short-term and long-term debt
|
|
$
|
13,233
|
|
|
$
|
13,711
|
|
Temporary equity
|
|
$
|
908
|
|
|
$
|
912
|
|
Debt as percentage of permanent stockholders’ equity
|
|
24.1
|
%
|
|
24.5
|
%
|
(In Millions)
|
|
Q1 2015
|
|
Q1 2014
|
||||
Net cash provided by operating activities
|
|
$
|
4,415
|
|
|
$
|
3,501
|
|
Net cash used for investing activities
|
|
(449
|
)
|
|
(2,749
|
)
|
||
Net cash used for financing activities
|
|
(2,274
|
)
|
|
(1,650
|
)
|
||
Effect of exchange rate fluctuations on cash and cash equivalents
|
|
(9
|
)
|
|
1
|
|
||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
1,683
|
|
|
$
|
(897
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
Total Number
of Shares Purchased (In Millions) |
|
Average Price
Paid Per Share |
|
Dollar Value of
Shares That May Yet Be Purchased (In Millions) |
|||||
December 28, 2014 – January 24, 2015
|
|
10.6
|
|
|
$
|
36.47
|
|
|
$
|
12,005
|
|
January 25, 2015 – February 21, 2015
|
|
10.7
|
|
|
$
|
33.81
|
|
|
$
|
11,643
|
|
February 22, 2015 – March 28, 2015
|
|
—
|
|
|
$
|
—
|
|
|
$
|
11,643
|
|
Total
|
|
21.3
|
|
|
$
|
35.14
|
|
|
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing
Date
|
|
Filed or
Furnished
Herewith
|
3.1
|
|
Intel Corporation Third Restated Certificate of Incorporation of Intel Corporation dated May 17, 2006
|
|
8-K
|
|
000-06217
|
|
3.1
|
|
5/22/2006
|
|
|
3.2
|
|
Intel Corporation Bylaws, as amended and restated on July 26, 2011
|
|
8-K
|
|
000-06217
|
|
3.1
|
|
7/27/2011
|
|
|
10.1**
|
|
Intel Corporation Non-Employee Director Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted on or after January 23, 2015 under the Director RSU program)
|
|
|
|
|
|
|
|
|
|
X
|
10.2**
|
|
Intel Corporation Non-Employee Director Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted on or after January 23, 2015 under the Director OSU program)
|
|
|
|
|
|
|
|
|
|
X
|
10.3**
|
|
Intel Corporation Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted on or after January 23, 2015 under the Executive RSU program)
|
|
|
|
|
|
|
|
|
|
X
|
10.4**
|
|
Intel Corporation Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted on or after January 23, 2015 under the Executive OSU program)
|
|
|
|
|
|
|
|
|
|
X
|
12.1
|
|
Statement Setting Forth the Computation of Ratios of Earnings to Fixed Charges
|
|
|
|
|
|
|
|
|
|
X
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act)
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Certification of Chief Financial Officer and Principal Accounting Officer pursuant to Rule 13a-14(a) of the Exchange Act
|
|
|
|
|
|
|
|
|
|
X
|
32.1
|
|
Certification of the Chief Executive Officer and the Chief Financial Officer and Principal Accounting Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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X
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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X
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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X
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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X
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INTEL CORPORATION
(Registrant)
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Date:
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April 27, 2015
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By:
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/s/ S
TACY
J. S
MITH
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Stacy J. Smith
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Executive Vice President, Chief Financial Officer, and Principal Accounting Officer
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1.
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TERMS OF RESTRICTED STOCK UNIT
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2.
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VESTING OF RSUs
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3.
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CONVERSION INTO COMMON STOCK
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4.
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TERMINATION OF SERVICE AS DIRECTOR
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5.
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DEATH
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6.
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DISABLEMENT
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7.
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RETIREMENT
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8.
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TAX WITHHOLDING
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9.
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ELECTION TO DEFER RECEIPT OF RSU SHARES
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10.
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RIGHTS AS A STOCKHOLDER
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11.
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AMENDMENTS
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12.
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DATA PRIVACY
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13.
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THE 2006 PLAN AND OTHER TERMS; OTHER MATTERS
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(a)
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Certain capitalized terms used in this Agreement are defined in the 2006 Plan. Any prior agreements, commitments or negotiations concerning the RSUs are superseded by this Agreement and your Notice of Grant. You hereby acknowledge that a copy of the 2006 Plan has been made available to you.
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(b)
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To the extent that the grant of RSUs refers to the Common Stock of Intel Corporation, and as required by the laws of your country of residence, only authorized but unissued shares thereof will be utilized for delivery upon vesting in accord with the terms hereof.
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(c)
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Notwithstanding any other provision of this Agreement, if any changes in law or the financial or tax accounting rules applicable to the RSUs covered by this Agreement will occur, the Corporation may, in its sole discretion, (1) modify this Agreement to impose such restrictions or procedures with respect to the RSUs (whether vested or unvested), the shares issued or issuable pursuant to the RSUs and/or any proceeds or payments from or relating to such shares as it determines to be necessary or appropriate to comply with applicable law or to address, comply with or offset the economic effect to the Corporation of any accounting or administrative matters relating thereto, or (2) cancel and cause a forfeiture with respect to any unvested RSUs at the time of such determination.
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(d)
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Because this Agreement relates to terms and conditions under which you may be issued shares of Common Stock of Intel Corporation, a Delaware corporation, an essential term of this Agreement is that it will be governed by the laws of the State of Delaware, without regard to choice of law principles of Delaware or other jurisdictions. Any action, suit, or proceeding relating to this Agreement or the RSUs granted hereunder will be brought in the state or federal courts of competent jurisdiction in the State of California.
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(e)
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Copies of Intel Corporation's Annual Report to Stockholders for its latest fiscal year and Intel Corporation's latest quarterly report are available, without charge, at the Corporation's business office.
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1.
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TERMS OF RESTRICTED STOCK UNIT
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2.
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VESTING OF RSUs
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3.
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CONVERSION OF RSUs
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(a)
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The conversion rate of RSUs into the right to receive a number of shares of Common Stock depends on the Corporation’s Total Stockholder Return (“Intel TSR”) relative to the “Total Stockholder Return” of the Tech 15 (“Tech 15 TSR”) at the end of the “Performance Period,” as those terms are defined in this Section. The conversion rate of RSUs into the right to receive a number of shares of Common Stock will be determined in accordance with following:
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(1)
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If the Intel TSR and Tech 15 TSR are within 1 percentage point, the conversion rate will be 100%.
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(2)
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If the Intel TSR is greater than the Tech 15 TSR, the conversion rate will be 100% plus four times the difference in percentage points between the Intel TSR and the Tech 15 TSR; provided that the maximum conversion rate is 200%.
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(3)
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If the Tech 15 TSR is greater than the Intel TSR, the conversion rate will be 100% minus two times the difference in percentage points between the Intel TSR and the Tech 15 TSR; provided that, if the Tech 15 TSR exceeds the Intel TSR by more than 25 percentage points, then the conversion rate will be 0%.
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(4)
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In the event that the conversion rate results in the right to receive a partial share of Common Stock, the conversion rate will be rounded down so that the RSUs will not convert into the right to receive the partial share.
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•
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If the Intel TSR equals 100.5%, the difference between the Intel TSR and the Tech 15 TSR is within 1 percentage point. As a result, the conversion rate is 100%, such that your RSUs convert into the right to receive 100% of the Target Number of Shares.
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•
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If the Intel TSR is 105%, the difference between the Intel TSR and the Tech 15 TSR is 5 percentage points. As a result, the conversion rate is 120%, such that your RSUs convert into the right to receive 120% of the Target Number of Shares.
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•
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If the Intel TSR is 90%, the difference between the Intel TSR and the Tech 15 TSR is 10 percentage points. As a result, the conversion rate is 80%, such that your RSUs convert into the right to receive 80% of the Target Number of Shares.
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•
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If the Intel TSR is 70%, the difference between the Intel TSR and the Tech 15 TSR is more than 25 percentage points. As a result, the conversion rate is 0%, such that your RSUs convert into the right to receive 0% of the Target Number of Shares.
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(b)
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“Intel TSR” is a percentage (to the third decimal point) derived by:
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(1)
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A numerator that is the difference between the average closing sale price of Common Stock during the 3 months following and including the Grant Date subtracted from the average closing sale price of Common Stock during the 3 months prior to and including the end of the Performance Period, plus any dividends paid or payable with respect to an ex-dividend date that occurs during the Performance Period; and
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(2)
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A denominator that is the average closing sale price of Common Stock during the 3 months following and including the Grant Date.
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(c)
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“Tech 15 TSR” is the median TSR (as defined below) of the fifteen technology companies included in the Corporation’s peer group for determining executive compensation, as determined by the Compensation Committee prior to the Grant Date, and regardless of any subsequent change after the Grant Date.
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(1)
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A numerator that is the difference between the average closing sale price of common stock during the 3 months following and including the Grant Date subtracted from the average closing sale price of common stock during the 3 months prior to and including the end of the Performance Period, plus any dividends paid or payable with respect to an ex-dividend date that occurs during the Performance Period; and
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(2)
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A denominator that is the average closing sale price of common stock during the 3 months following and including the Grant Date.
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(d)
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For purposes of determining the “Total Stockholder Return” or “TSR” of any company (including the Corporation):
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(1)
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Any dividend paid or payable in cash will be valued at its cash amount (without any deemed reinvestment and without any adjustments for applicable taxes or tax withholding). Any dividend paid in securities with a readily ascertainable fair market value will be valued at the market value of the securities as of the ex-dividend date. Any dividend paid in other property will be valued based on the value assigned to such dividend by the paying company for tax purposes.
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(2)
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Any company included in the Tech 15 TSR on the Grant Date that does not have a stock price that is quoted on a national securities exchange at the end of the Performance Period will be factored into the median calculation based on its TSR from the Grant Date until the
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(3)
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The Compensation Committee may equitably adjust a company's TSR for equity restructuring transactions including, but not limited to, a stock split, combination of shares, extraordinary dividend of cash and/or assets, recapitalization or reorganization.
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(4)
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Any company included in the Tech 15 TSR on the Grant Date that has a price of stock or a price of a security backed by stock that is quoted on a national securities exchange in the United States and on a national securities exchange outside the United States will be factored into the median calculation based on its price of stock or a price of a security backed by stock quoted on the national securities exchange in the United States.
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(e)
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Performance Period is the period beginning with the Grant Date and ending three years later on the third anniversary of the Grant Date. If the third anniversary of the Grant Date falls on a weekend or any other day on which the NASDAQ is not open, the Performance Period will end on the next following NASDAQ business day. If for any reason the Corporation (including any successor corporation) ceases to have its stock price quoted on a national securities exchange, the Performance Period will end as of the last date that the stock price is quoted on a national securities exchange.
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4.
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DIVIDEND EQUIVALENTS
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5.
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SETTLEMENT INTO COMMON STOCK
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6.
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TERMINATION OF SERVICE AS DIRECTOR
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7.
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DEATH
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8.
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DISABLEMENT
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9.
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RETIREMENT
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10.
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TAX WITHHOLDING
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11.
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ELECTION TO DEFER RECEIPT OF RSU SHARES
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12.
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RIGHTS AS A STOCKHOLDER
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13.
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AMENDMENTS
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14.
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DATA PRIVACY
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15.
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THE 2006 PLAN AND OTHER TERMS; OTHER MATTERS
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(a)
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Certain capitalized terms used in this Agreement are defined in the 2006 Plan. Any prior agreements, commitments or negotiations concerning the RSUs and dividend equivalents are superseded by this Agreement and your Notice of Grant. You hereby acknowledge that a copy of the 2006 Plan has been made available to you.
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(b)
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To the extent that the grant of RSUs and dividend equivalents refers to the Common Stock of Intel Corporation, and as required by the laws of your country of residence or employment, only authorized but unissued shares thereof will be utilized for delivery upon vesting in accord with the terms hereof.
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(c)
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Notwithstanding any other provision of this Agreement, if any changes in law or the financial or tax accounting rules applicable to the RSUs and dividend equivalents covered by this Agreement will occur, the Corporation may, in its sole discretion, (1) modify this Agreement to impose such restrictions or procedures with respect to the RSUs (whether vested or unvested), the shares issued or issuable pursuant to the RSUs and dividend equivalents and/or any proceeds or payments from or relating to such shares as it determines to be necessary or appropriate to comply with applicable law or to address, comply with or offset the economic effect to the Corporation of any accounting or administrative matters relating thereto, or (2) cancel and cause a forfeiture with respect to any unvested RSUs and dividend equivalents at the time of such determination.
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(d)
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Because this Agreement relates to terms and conditions under which you may be issued shares of Common Stock of Intel Corporation, a Delaware corporation, an essential term of this Agreement is that it will be governed by the laws of the State of Delaware, without regard to choice of law principles of Delaware or other jurisdictions. Any action, suit, or proceeding relating to this Agreement or the RSUs and dividend equivalents granted hereunder will be brought in the state or federal courts of competent jurisdiction in the State of California.
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(e)
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Copies of Intel Corporation's Annual Report to Stockholders for its latest fiscal year and Intel Corporation's latest quarterly report are available, without charge, at the Corporation's business office.
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1.
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TERMS OF RESTRICTED STOCK UNIT
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2.
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SIGNATURE
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3.
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VESTING OF RSUs
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4.
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CONVERSION INTO COMMON STOCK
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5.
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SUSPENSION OR TERMINATION OF RSU FOR MISCONDUCT
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6.
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TERMINATION OF EMPLOYMENT
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7.
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DEATH
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8.
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DISABLEMENT
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9.
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RETIREMENT
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(a)
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If you retire at or after age 60 (“Standard Retirement”), then all RSUs that were scheduled to vest within a number of whole years from the date of your Retirement determined by dividing the number of years that you have been employed by the Corporation and its Subsidiaries (measured in complete, whole years) by five (5), rounded down to the nearest whole number of years, will vest as of the date of your Retirement. No vesting acceleration will occur for any periods of employment of less than five (5) years; or
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(b)
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If, when you terminate employment with the Corporation and its Subsidiaries, your age plus years of service (in each case measured in complete, whole years) equals or exceeds 75 (“Rule of 75”), then all RSUs that were scheduled to vest within one year of the date of your Retirement will vest as of the date of your Retirement.
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10.
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TAX WITHHOLDING
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11.
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RIGHTS AS A STOCKHOLDER
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12.
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DISPUTES
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13.
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AMENDMENTS
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14.
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DATA PRIVACY
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15.
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THE 2006 PLAN AND OTHER TERMS; OTHER MATTERS
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(a)
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Certain capitalized terms used in this Agreement are defined in the 2006 Plan. Any prior agreements, commitments or negotiations concerning the RSUs are superseded by this Agreement and your Notice of Grant. You hereby acknowledge that a copy of the 2006 Plan has been made available to you.
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(b)
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To the extent that the grant of RSUs refers to the Common Stock of Intel Corporation, and as required by the laws of your country of residence or employment, only authorized but unissued shares thereof will be utilized for delivery upon vesting in accord with the terms hereof.
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(c)
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Notwithstanding any other provision of this Agreement, if any changes in law or the financial or tax accounting rules applicable to the RSUs covered by this Agreement will occur, the Corporation may, in its sole discretion, (1) modify this Agreement to impose such restrictions or procedures with respect to the RSUs (whether vested or unvested), the shares issued or issuable pursuant to the RSUs and/or any proceeds or payments from or relating to such shares as it determines to be necessary or appropriate to comply with applicable law or to address, comply with or offset the economic effect to the Corporation of any accounting or administrative matters relating thereto, or (2) cancel and cause a forfeiture with respect to any unvested RSUs at the time of such determination.
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(d)
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Nothing contained in this Agreement creates or implies an employment contract or term of employment upon which you may rely.
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(e)
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Because this Agreement relates to terms and conditions under which you may be issued shares of Common Stock of Intel Corporation, a Delaware corporation, an essential term of this Agreement is that it will be governed by the laws of the State of Delaware, without regard to choice of law principles of Delaware or other jurisdictions. Any action, suit, or proceeding relating to this Agreement or the RSUs granted hereunder will be brought in the state or federal courts of competent jurisdiction in the State of California.
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(f)
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Notwithstanding anything to the contrary in this Agreement or the applicable Notice of Grant, your RSUs are subject to reduction by the Corporation if you change your employment classification from a full-time employee to a part-time employee.
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(g)
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RSUs are not part of your employment contract (if any) with the Corporation or any Subsidiary, your salary, your normal or expected compensation, or other remuneration for any purposes, including for purposes of computing severance pay or other termination compensation or indemnity.
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(h)
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In consideration of the grant of RSUs, no claim or entitlement to compensation or damages will arise from termination of your RSUs or diminution in value of the RSUs or Common Stock acquired through vested RSUs resulting from termination of your active employment by the Corporation (for any reason whatsoever and whether or not in breach of local labor laws) and you hereby release the Corporation from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a
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(i)
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Notwithstanding any terms or conditions of the 2006 Plan to the contrary, in the event of involuntary termination of your employment (whether or not in breach of local labor laws), your right to receive the RSUs and vest in RSUs under the 2006 Plan, if any, will terminate effective as of the date that you are no longer actively employed and will not be extended by any notice period mandated under local law (
e.g
., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of involuntary termination of employment (whether or not in breach of local labor laws), your right to sell shares of Common Stock that converted from vested RSUs after termination of employment, if any, will be measured by the date of termination of your active employment and will not be extended by any notice period mandated under local law.
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(j)
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Notwithstanding any provision of this Agreement, the Notice of Grant or the 2006 Plan to the contrary, if, at the time of your termination of employment with the Corporation, you are a “specified employee” as defined in Section 409A of the Internal Revenue Code ("Code"), and one or more of the payments or benefits received or to be received by you pursuant to the RSUs would constitute deferred compensation subject to Section 409A, no such payment or benefit will be provided under the RSUs until the earliest of (A) the date which is six (6) months after your "separation from service” for any reason, other than death or “disability” (as such terms are used in Section 409A(a)(2) of the Code), (B) the date of your death or “disability” (as such term is used in Section 409A(a)(2)(C) of the Code) or (C) the effective date of a “change in the ownership or effective control” of the Corporation (as such term is used in Section 409A(a)(2)(A)(v) of the Code). The provisions of this Section 14(e) will only apply to the extent required to avoid your incurrence of any penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder. In addition, if any provision of the RSUs would cause you to incur any penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Corporation may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code.
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(k)
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Copies of Intel Corporation's Annual Report to Stockholders for its latest fiscal year and Intel Corporation's latest quarterly report are available, without charge, at the Corporation's business office.
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(l)
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Chile
. If you are employed in or a resident of Chile, please note: NEITHER INTEL CORPORATION NOR ANY OF ITS SHARES ARE REGISTERED WITH THE
SUPERINTENDENCIA DE VALORES Y SEGUROS
(THE "SVS") NOR SUBJECT TO THE CONTROL OF THE SVS.
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(m)
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France
. If you are employed in or a resident of the France, you will not be required to hold the shares of Common Stock issued to you for the vest of these RSUs for the minimum required holding period of the ‘
régime fiscal de faveur’
.
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(n)
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The People’s Republic of China
. If you are employed in and a citizen of the People’s Republic of China, you authorize the Corporation to instruct UBS Financial Services Inc., or any successor plan administrator, to sell all of your shares of Common Stock that are issued under these RSUs, and are in your brokerage account established with UBS Financial Services Inc., or any successor plan administrator on the 90th day following your termination of employment or as soon as administratively feasible after the 90th day, including termination of employment due to death, Disablement or Retirement. Furthermore, you authorize UBS Financial Services Inc., or any successor plan administrator to send the net proceeds from such sale (after the payment of any tax withholding amounts and expenses of sale) to the Corporation on your behalf for payment through payroll, unless the Corporation's counsel determines that local laws do not necessitate such payments through payroll. The shares may be sold as part of a block trade with other participants in which all participants receive an average price.
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(o)
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Vietnam
. If you are employed in or a resident of Vietnam, you authorize UBS Financial Services Inc., E*TRADE Financial Corporate Services, Inc. or any successor plan administrator, to sell all of your shares of Common Stock that are issued under the RSUs, and are in your brokerage account
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1.
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TERMS OF RESTRICTED STOCK UNIT
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2.
|
SIGNATURE
|
3.
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VESTING OF RSUs
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4.
|
CONVERSION OF RSUs
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(a)
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The conversion rate of RSUs into the right to receive a number of shares of Common Stock depends on the Corporation’s Total Stockholder Return (“Intel TSR”) relative to the “Total Stockholder Return” of the Tech 15 (“Tech 15 TSR”) at the end of the “Performance Period,” as those terms are defined in this Section 4. The conversion rate of RSUs into the right to receive a number of shares of Common Stock will be determined in accordance with following:
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(1)
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If the Intel TSR and Tech 15 TSR are within 1 percentage point, the conversion rate will be 100%.
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(2)
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If the Intel TSR is greater than the Tech 15 TSR, the conversion rate will be 100% plus four times the difference in percentage points between the Intel TSR and the Tech 15 TSR; provided that the maximum conversion rate is 200%.
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(3)
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If the Tech 15 TSR is greater than the Intel TSR, the conversion rate will be 100% minus two times the difference in percentage points between the Intel TSR and the Tech 15 TSR; provided that, if the Tech 15 TSR exceeds the Intel TSR by more than 25 percentage points, then the conversion rate will be 0%.
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(4)
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In the event that the conversion rate results in the right to receive a partial share of Common Stock, the conversion rate will be rounded down so that the RSUs will not convert into the right to receive the partial share.
|
•
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If the Intel TSR equals 100.5%, the difference between the Intel TSR and the Tech 15 TSR is within 1 percentage point. As a result, the conversion rate is 100%, such that your RSUs convert into the right to receive 100% of the Target Number of Shares.
|
•
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If the Intel TSR is 105%, the difference between the Intel TSR and the Tech 15 TSR is 5 percentage points. As a result, the conversion rate is 120%, such that your RSUs convert into the right to receive 120% of the Target Number of Shares.
|
•
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If the Intel TSR is 90%, the difference between the Intel TSR and the Tech 15 TSR is 10 percentage points. As a result, the conversion rate is 80%, such that your RSUs convert into the right to receive 80% of the Target Number of Shares.
|
•
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If the Intel TSR is 70%, the difference between the Intel TSR and the Tech 15 TSR is more than 25 percentage points. As a result, the conversion rate is 0%, such that your RSUs convert into the right to receive 0% of the Target Number of Shares.
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(b)
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“Intel TSR” is a percentage (to the third decimal point) derived by:
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(1)
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A numerator that is the difference between the average closing sale price of Common Stock during the 3 months following and including the Grant Date subtracted from the average closing sale price of Common Stock during the 3 months prior to and including the end of the Performance Period, plus any dividends paid or payable with respect to an ex-dividend date that occurs during the Performance Period; and
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(2)
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A denominator that is the average closing sale price of Common Stock during the 3 months following and including the Grant Date.
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(c)
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“Tech 15 TSR” is the median TSR (as defined below) of the fifteen technology companies included in the Corporation’s peer group for determining executive compensation, as determined by the Compensation Committee prior to the Grant Date, and regardless of any subsequent change after the Grant Date.
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(1)
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A numerator that is the difference between the average closing sale price of common stock during the 3 months following and including the Grant Date subtracted from the average closing sale price of common stock during the 3 months prior to and including the end of the Performance Period, plus any dividends paid or payable with respect to an ex-dividend date that occurs during the Performance Period; and
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(2)
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A denominator that is the average closing sale price of common stock during the 3 months following and including the Grant Date; and
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(d)
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For purposes of determining the “Total Stockholder Return” or “TSR” of any company (including the Corporation):
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(1)
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Any dividend paid or payable in cash will be valued at its cash amount (without any deemed reinvestment and without any adjustments for applicable taxes or tax withholding). Any dividend paid in securities with a readily ascertainable fair market value will be valued at the market value of the securities as of the dividend ex-dividend date. Any dividend paid
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(2)
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Any company included in the Tech 15 TSR on the Grant Date that does not have a stock price that is quoted on a national securities exchange at the end of the Performance Period will be factored into the median calculation based on its TSR from the Grant Date until the last date on which its stock price was last quoted on a national securities exchange in the United States.
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(3)
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The Compensation Committee may equitably adjust a company's TSR for equity restructuring transactions including, but not limited to, a stock split, combination of shares, extraordinary dividend of cash and/or assets, recapitalization or reorganization.
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(4)
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Any company included in the Tech 15 TSR on the Grant Date that has a price of stock or a price of a security backed by stock that is quoted on a national securities exchange in the United States and on a national securities exchange outside the United States will be factored into the median calculation based on its price of stock or a price of a security backed by stock quoted on the national securities exchange in the United States.
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(e)
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Performance Period is the period beginning with the Grant Date and ending three years later on the third anniversary of the Grant Date. If the third anniversary of the Grant Date falls on a weekend or any other day on which the NASDAQ is not open, the Performance Period will end on the next following NASDAQ business day. If for any reason the Corporation (including any successor corporation) ceases to have its stock price quoted on a national securities exchange, the Performance Period will end as of the last date that the stock price is quoted on a national securities exchange.
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5.
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DIVIDEND EQUIVALENTS
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6.
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SETTLEMENT INTO COMMON STOCK
|
7.
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SUSPENSION OR TERMINATION OF RSU FOR MISCONDUCT
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8.
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TERMINATION OF EMPLOYMENT
|
9.
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DEATH
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10.
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DISABLEMENT
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11.
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RETIREMENT
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(a)
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You terminate employment with the Corporation at or after age 60 (“Standard Retirement”); or
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(b)
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You terminate employment with the Corporation and as of the termination date your age plus years of service (in each case measured in complete, whole years) equals or exceeds 75 (“Rule of 75”).
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12.
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TAX WITHHOLDING
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13.
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RIGHTS AS A STOCKHOLDER
|
14.
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DISPUTES
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15.
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AMENDMENTS
|
16.
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DATA PRIVACY
|
17.
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THE 2006 PLAN AND OTHER TERMS; OTHER MATTERS
|
(a)
|
Certain capitalized terms used in this Agreement are defined in the 2006 Plan. Any prior agreements, commitments or negotiations concerning the RSUs and dividend equivalents are superseded by this Agreement and your Notice of Grant. You hereby acknowledge that a copy of the 2006 Plan has been made available to you.
|
(b)
|
To the extent that the grant of RSUs and dividend equivalents refers to the Common Stock of Intel Corporation, and as required by the laws of your country of residence or employment, only authorized but unissued shares thereof will be utilized for delivery upon vesting in accord with the terms hereof.
|
(c)
|
Notwithstanding any other provision of this Agreement, if any changes in law or the financial or tax accounting rules applicable to the RSUs and dividend equivalents covered by this Agreement will occur, the Corporation may, in its sole discretion, (1) modify this Agreement to impose such restrictions or procedures with respect to the RSUs (whether vested or unvested), the shares issued or issuable pursuant to the RSUs and dividend equivalents and/or any proceeds or payments from or relating to such shares as it determines to be necessary or appropriate to comply with applicable law or to address, comply with or offset the economic effect to the Corporation of any accounting or administrative matters relating thereto, or (2) cancel and cause a forfeiture with respect to any unvested RSUs and dividend equivalents at the time of such determination.
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(d)
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Nothing contained in this Agreement creates or implies an employment contract or term of employment upon which you may rely.
|
(e)
|
Because this Agreement relates to terms and conditions under which you may be issued shares of Common Stock of Intel Corporation, a Delaware corporation, an essential term of this Agreement is that it will be governed by the laws of the State of Delaware, without regard to choice of law principles of Delaware or other jurisdictions. Any action, suit, or proceeding relating to this Agreement or the RSUs and dividend equivalents granted hereunder will be brought in the state or federal courts of competent jurisdiction in the State of California.
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(f)
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Notwithstanding anything to the contrary in this Agreement or the applicable Notice of Grant, your RSUs and dividend equivalents are subject to reduction by the Corporation if you change your employment classification from a full-time employee to a part-time employee.
|
(g)
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RSUs and dividend equivalents are not part of your employment contract (if any) with the Corporation or any Subsidiary, your salary, your normal or expected compensation, or other remuneration for any purposes, including for purposes of computing severance pay or other termination compensation or indemnity.
|
(h)
|
In consideration of the grant of RSUs and dividend equivalents, no claim or entitlement to compensation or damages will arise from termination of your RSUs and dividend equivalents or diminution in value of the RSUs and dividend equivalents or Common Stock acquired through vested RSUs and dividend equivalents resulting from termination of your active employment by the Corporation (for any reason whatsoever and whether or not in breach of local labor laws) and you hereby release the Corporation from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then you will be deemed irrevocably to have waived your entitlement to pursue such claim.
|
(i)
|
Notwithstanding any terms or conditions of the 2006 Plan to the contrary, in the event of involuntary termination of your employment (whether or not in breach of local labor laws), your right to receive the RSUs and dividend equivalents and vest in RSUs and dividend equivalents under the 2006 Plan, if any, will terminate effective as of the date that you are no longer actively employed and will not be extended by any notice period mandated under local law (
e.g
., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of involuntary termination of employment (whether or not in breach of local labor laws), your right to sell shares of Common Stock that converted from vested RSUs and dividend equivalents after termination of employment, if any, will be measured by the date of termination of your active employment and will not be extended by any notice period mandated under local law.
|
(j)
|
Notwithstanding any provision of this Agreement, the Notice of Grant or the 2006 Plan to the contrary, if, at the time of your termination of employment with the Corporation, you are a “specified employee” as defined in Section 409A of the Internal Revenue Code ("Code"), and one or more of the payments or benefits received or to be received by you pursuant to the RSUs and dividend equivalents would constitute deferred compensation subject to Section 409A, no such payment or benefit will be provided under the RSUs and dividend equivalents until the earliest of (A) the date which is six (6) months after your "separation from service” for any reason, other than death or “disability” (as such terms are used in Section 409A(a)(2) of the Code), (B) the date of your death or “disability” (as such term is used in Section 409A(a)(2)(C) of the Code) or (C) the effective date of a “change in the ownership or effective control” of the Corporation (as such term is used in Section 409A(a)(2)(A)(v) of the Code). The provisions of this Section 17(j) will only apply to the extent required to avoid your incurrence of any penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder. In addition, if any provision of the RSUs would cause you to incur any penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Corporation may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code.
|
(k)
|
Copies of Intel Corporation's Annual Report to Stockholders for its latest fiscal year and Intel Corporation's latest quarterly report are available, without charge, at the Corporation's business office.
|
(l)
|
Chile
. If you are employed in or a resident of Chile, please note: NEITHER INTEL CORPORATION NOR ANY OF ITS SHARES ARE REGISTERED WITH THE
SUPERINTENDENCIA DE VALORES Y SEGUROS
(THE "SVS") NOR SUBJECT TO THE CONTROL OF THE SVS.
|
(m)
|
France
. If you are employed in or a resident of the France, you will not be required to hold the shares of Common Stock issued to you for the vest of these RSUs for the minimum required holding period of the ‘
régime fiscal de faveur’
.
|
(n)
|
The People’s Republic of China
. If you are employed in and a citizen of the People’s Republic of China, you authorize the Corporation to instruct UBS Financial Services Inc., or any successor plan administrator, to sell all of your shares of Common Stock that are issued under these RSUs, and are in your brokerage account established with UBS Financial Services Inc., or any successor plan administrator on the 90th day following your termination of employment or as soon as administratively feasible after the 90th day, including termination of employment due to death, Disablement or Retirement. Furthermore, you authorize UBS Financial Services Inc., or any successor plan administrator to send the net proceeds from such sale (after the payment of any tax withholding amounts and expenses of sale) to the Corporation on your behalf for payment through payroll, unless the Corporation's counsel determines that local laws do not necessitate such payments through payroll. The shares may be sold as part of a block trade with other participants in which all participants receive an average price.
|
(o)
|
Vietnam
. If you are employed in or a resident of Vietnam, you authorize UBS Financial Services Inc., E*TRADE Financial Corporate Services, Inc. or any successor plan administrator, to sell all of your shares of Common Stock that are issued under the RSUs, and are in your brokerage account established with UBS Financial Services Inc., E*TRADE Financial Corporate Services, Inc. or any successor plan administrator, as soon as administratively feasible after your termination of employment, death, Disablement or Retirement.
|
|
|
|
|
Three Months Ended
|
||||||
(Dollars in Millions)
|
|
Mar 28,
2015 |
|
Mar 29,
2014 |
||||||
Earnings
1
|
|
$
|
2,766
|
|
|
$
|
2,718
|
|
||
Adjustments:
|
|
|
|
|
||||||
|
Add - Fixed charges
|
|
131
|
|
|
124
|
|
|||
|
Subtract - Capitalized interest
|
|
(81
|
)
|
|
(77
|
)
|
|||
Earnings and fixed charges (net of capitalized interest)
|
|
$
|
2,816
|
|
|
$
|
2,765
|
|
||
|
|
|
|
|
|
|
||||
Fixed charges:
|
|
|
|
|
||||||
|
Interest
2
|
|
$
|
42
|
|
|
$
|
37
|
|
|
|
Capitalized interest
|
|
81
|
|
|
77
|
|
|||
|
Estimated interest component of rental expense
|
|
8
|
|
|
10
|
|
|||
Total
|
|
$
|
131
|
|
|
$
|
124
|
|
||
|
|
|
|
|
|
|
||||
Ratio of earnings before taxes and fixed charges, to fixed charges
|
|
21x
|
|
|
22x
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Intel Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 27, 2015
|
|
By:
|
|
/s/ B
RIAN
M. K
RZANICH
|
|
|
|
|
|
Brian M. Krzanich
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Intel Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 27, 2015
|
|
By:
|
|
/s/ S
TACY
J. S
MITH
|
|
|
|
|
|
Stacy J. Smith
Executive Vice President, Chief Financial Officer, and Principal Accounting Officer
|
Date:
|
April 27, 2015
|
|
By:
|
|
/s/ BRIAN M. KRZANICH
|
|
|
|
|
|
Brian M. Krzanich
Chief Executive Officer |
|
|
|
|
|
|
Date:
|
April 27, 2015
|
|
By:
|
|
/s/ STACY J. SMITH
|
|
|
|
|
|
Stacy J. Smith
Executive Vice President, Chief Financial Officer, and Principal Accounting Officer |