|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended December 30, 2017.
|
|
or
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from
to
.
|
|
Delaware
|
|
94-1672743
|
State or other jurisdiction of
incorporation or organization
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
2200 Mission College Boulevard, Santa Clara, California
|
|
95054-1549
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common stock, $0.001 par value
|
|
The Nasdaq Global Select Market*
|
|
Large accelerated filer
x
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
Emerging growth company
¨
|
|
|
(Do not check if a smaller reporting company)
|
|
|
FUNDAMENTALS OF OUR BUSINESS
|
|
OTHER KEY INFORMATION
|
||
Business Introduction
|
|
Stock Performance Graph
|
||
A Year in Review
|
|
Selected Financial Data
|
||
How We Organize Our Business
|
|
Sales and Marketing
|
||
Capital Allocation
|
|
Competition
|
||
Our Strategy
|
|
Intellectual Property Rights and Licensing
|
||
Research and Development (R&D) and Manufacturing
|
|
Critical Accounting Estimates
|
||
Who Manages Our Business
|
|
Risk Factors
|
||
Human Capital
|
|
Non-GAAP Financial Measures
|
||
Corporate Responsibility and Sustainability
|
|
Properties
|
||
|
|
|
Market for Registrant's Common Equity
|
|
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) -
RESULTS OF OPERATIONS
|
|
Availability of Company Information
|
||
|
|
|
||
Overview
|
|
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL DETAILS
|
||
Revenue, Gross Margin, and Operating Expenses
|
|
|||
|
Business Unit Trends and Results
|
|
Index to Financial Statements and Supplemental Details
|
|
Client Computing Group (CCG)
|
|
Auditor's Report
|
||
Data Center Group (DCG)
|
|
Consolidated Financial Statements
|
||
Internet of Things Group (IOTG)
|
|
Notes to the Consolidated Financial Statements
|
||
Non-Volatile Memory Solutions Group (NSG)
|
|
Financial Information by Quarter
|
||
Programmable Solutions Group (PSG)
|
|
Controls and Procedures
|
||
Other Consolidated Results of Operations
|
|
Exhibits and Financial Statement Schedules
|
||
Liquidity and Capital Resources
|
|
Form 10-K Cross-Reference Index
|
||
Contractual Obligations
|
|
|
|
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PLATFORM PRODUCTS
|
|
A microprocessor (processor or central processing unit (CPU)) and chipset, a stand-alone System-on-Chip (SoC), or a multichip package. Platform products, or platforms, are primarily used in solutions sold through CCG, DCG, and IOTG segments.
|
|
|
|
ADJACENT PRODUCTS
|
|
All of our non-platform products, for CCG, DCG, and IOTG like modem, ethernet and silicon photonics, as well as NSG, PSG, and Mobileye products. Combined with our platform products, adjacent products form comprehensive platform solutions to meet customer needs.
|
|
|
|
PC-CENTRIC BUSINESS
|
|
Is made up of our CCG business, both platform and adjacent products.
|
|
|
|
DATA-CENTRIC BUSINESSES
|
|
Includes our DCG, IOTG, NSG, PSG, and all other businesses.
|
|
|
1
|
|
|
2
|
|
|
3
|
Our Strategy
|
Data is a significant force in society and will be essential in shaping the future of every person on the planet. From large complex applications in the cloud to small low-power mobile devices at the edge, our customers are looking for solutions that can process, analyze, store, and transfer data—turning it into actionable insights, amazing experiences, and competitive advantages.
|
|
|
"Intel's strategy is to provide the technological foundation of the new data world."
—Brian Krzanich,
Intel Chief Executive Officer
|
We strive to unlock the power of data so people can ride in self-driving cars, experience virtual worlds, connect with each other over fast mobile networks, and be touched by computer-assisted intelligence in ways yet unimagined.
|
|
|
|
|
|
|
|
We are well-positioned to be the driving force of this data revolution. Intel technology powers the devices and infrastructure that power the data-centric world, from PCs and the cloud to telecommunications equipment and data centers. Our computing solutions from the cloud to the edge enable a Virtuous Cycle of Growth. Our strategy is to provide the technological foundation of the new data world—a world that is always learning, smarter and faster.
|
COMPUTE PERFORMANCE FROM CLIENT TO CLOUD
|
|
|
|
|
|
|
|
|
The most important trend shaping the future of the data- centric world is the cloud and its connection to billions of smart devices, including PCs, autonomous cars, and virtual reality systems. When smart devices are connected to the cloud, the data can be analyzed real-time, making these devices more useful. Our continuous innovation of client and Internet of Things products, designed to connect even more seamlessly, is shaping this trend.
Our data center products are optimized to deliver industry-leading performance and best-in-class total cost of ownership for cloud workloads. We add new products and features to our portfolio to address emerging, high-growth workloads such as artificial intelligence, virtual reality systems, and the 5G network.
|
|
|
|
|
|
ACCELERANT TECHNOLOGIES
|
|
|
|
|
|
|
|
|
Advancements in memory technology and programmable solutions, such as FPGAs, drive performance in smart devices as well as data centers. Intel's 3D XPoint
™
technology significantly improves access to large amounts of data. FPGAs can efficiently manage the changing demands of next-generation data centers and accelerate the performance in other applications. The combination of memory and FPGAs with client and cloud products enables new solutions such as deep learning acceleration engines.
|
|
|
|
|
|
CONNECTIVITY
|
|
|
|
|
|
|
|
|
With our wireless, computing, and cloud capabilities, we are driving the development of technologies and collaborating on the rapid definition of open standards that will help define the 5G market. Our collaborations shape the connectivity ecosystem and enable new opportunities to meet the diverse connectivity needs of data. From smart devices to network infrastructure to the cloud and back, we aim to offer scale, innovation, and expertise to our customers.
|
|
FUNDAMENTALS OF OUR BUSINESS
|
Our Strategy
|
8
|
STRATEGIC ENABLERS
|
|
•
|
Shared architecture and intellectual property.
We have developed a common architecture and intellectual property across our platforms. We continue to invest in improving our architecture and product platforms that deliver increasing value to our customers. Our proprietary technologies make it possible to integrate products and platforms that address evolving customer needs and expand the markets we serve. Sharing a common architecture and intellectual property enables us to spread our costs over a large manufacturing base of products, which reduces our costs and increases our return on capital.
|
•
|
Silicon manufacturing technologies.
We make significant investments and innovations in our silicon manufacturing technologies. Unlike many semiconductor companies, we primarily develop and manufacture our products in our own facilities using our proprietary process technologies. This competitive advantage enables us to optimize performance, shorten time-to-market for new product introduction, and more quickly scale products in high volume.
|
•
|
Moore's Law.
Intel’s advancement of Moore’s Law has driven significant computing power growth and better economics. Through Moore's Law we enable new devices and capabilities that meet our customers' needs for balancing performance, power efficiency, and cost.
|
CORPORATE TRANSFORMATION
|
|
FUNDAMENTALS OF OUR BUSINESS
|
Our Strategy
|
9
|
Research AND development (R&D) and Manufacturing
|
FUNDAMENTALS OF OUR BUSINESS
|
Research and Development (R&D) and Manufacturing
|
10
|
FUNDAMENTALS OF OUR BUSINESS
|
Research and Development (R&D) and Manufacturing
|
11
|
who manages our business
|
NAME
|
|
AGE
|
|
OFFICE(S)
|
Andy D. Bryant
|
|
67
|
|
Chairman of the Board
|
Brian M. Krzanich
|
|
57
|
|
Chief Executive Officer
|
Dr. Venkata S.M. Renduchintala
|
|
52
|
|
Executive Vice President; President, Client and Internet of Things Businesses and System Architecture Group
|
Navin Shenoy
|
|
44
|
|
Executive Vice President; General Manager, Data Center Group
|
Robert H. Swan
|
|
57
|
|
Executive Vice President, Chief Financial Officer
|
FUNDAMENTALS OF OUR BUSINESS
|
Who Manages Our Business
|
12
|
human capital
|
Given the highly technical nature of our business, our success depends on our ability to attract and retain talented and skilled employees. Our global workforce of 102,700 is highly educated, with approximately 87% of our people working in technical roles.
|
|
|
"Through a focused effort across Intel, we are building diverse and inclusive teams and embedding this capability in all that we do. We believe a more diverse and inclusive Intel provides a better work environment for our employees and enables better business results."
—Leslie Culbertson,
Senior Vice President and Director of Human Resources (2017)
|
We invest in creating a diverse and inclusive environment where our employees can deliver their workplace best every day, and empower them to give back to the communities where we operate.
|
|
|
|
|
|
|
GROWTH AND DEVELOPMENT
|
COMMUNICATION AND ENGAGEMENT
|
COMPENSATION AND BENEFITS
|
HEALTH, SAFETY, AND WELLNESS
|
FUNDAMENTALS OF OUR BUSINESS
|
Human Capital
|
13
|
Corporate responsibility and sustainability
|
|
|
ENVIRONMENTAL SUSTAINABILITY
|
|
|
|
|
|
|
Driving to the lowest environmental footprint possible helps us achieve efficiency, lower costs, and respond to the needs of our customers and community stakeholders. We invest in conservation projects and set company-wide environmental targets, seeking to drive reductions in greenhouse gas emissions, energy use, water use, and waste generation. Since 2012, we have invested more than $185 million in approximately 2,000 energy conservation projects, resulting in annual cost savings of approximately $120 million and cumulative energy savings of more than 3 billion kilowatt hours. We are also working with others to apply Internet of Things technologies to environmental challenges such as climate change and water conservation.
|
||
|
|
|
|
|
|
SUPPLY CHAIN RESPONSIBILITY
|
|
|
|
|
|
|
Actively managing our supply chain creates business value for Intel and our customers by helping us reduce risks, improve product quality, achieve environmental and social goals, and raise the overall performance of our suppliers. Over the past five years, we have completed more than 450 supplier audits using the Responsible Business Alliance Code of Conduct standard and have expanded training and capacity building programs with our suppliers. We actively collaborate with others and lead industry initiatives on key issues such as advancing responsible minerals sourcing, addressing risks of forced and bonded labor, and improving transparency around climate and water impacts in the global electronics supply chain.
|
||
|
|
|
|
|
|
DIVERSITY AND INCLUSION
|
|
|
|
|
|
|
Building an inclusive workforce, industry, and ecosystem is critical to helping us attract and retain the talent needed to advance innovation and drive our business forward. We have committed $300 million to advance diversity and inclusion in our workforce and in the technology industry, and are making progress toward our goal to achieve full representation of women and underrepresented minorities in our U.S. workforce by the end of 2018. We are increasing spending with diverse-owned suppliers with a goal of reaching $1.0 billion by 2020, and are investing in programs to create new career pathways into the technology industry.
|
||
|
|
|
|
|
|
SOCIAL IMPACT
|
|
|
|
|
|
|
Empowering people through technology and advancing social impact initiatives helps build trust with key external stakeholders and engages and supports the interests of our employees. Our employees actively share their expertise and skills through technology-related volunteer initiatives, and over the past 10 years have contributed approximately 10 million hours of service in the communities where we operate.
|
||
|
|
|
FUNDAMENTALS OF OUR BUSINESS
|
Corporate Responsibility and Sustainability
|
14
|
Management's Discussion and analysis (md&A) - results of operations
|
Years Ended
(In Millions, Except Per Share Amounts) |
|
December 30, 2017
|
|
December 31, 2016
|
|
December 26, 2015
|
|||||||||||||||
|
Dollars
|
|
% of Net
Revenue
|
|
Dollars
|
|
% of Net
Revenue
|
|
Dollars
|
|
% of Net
Revenue
|
||||||||||
Net revenue
|
|
$
|
62,761
|
|
|
100.0
|
%
|
|
$
|
59,387
|
|
|
100.0
|
%
|
|
$
|
55,355
|
|
|
100.0
|
%
|
Cost of sales
|
|
23,692
|
|
|
37.7
|
%
|
|
23,196
|
|
|
39.1
|
%
|
|
20,676
|
|
|
37.4
|
%
|
|||
Gross margin
|
|
39,069
|
|
|
62.3
|
%
|
|
36,191
|
|
|
60.9
|
%
|
|
34,679
|
|
|
62.6
|
%
|
|||
Research and development
|
|
13,098
|
|
|
20.9
|
%
|
|
12,740
|
|
|
21.5
|
%
|
|
12,128
|
|
|
21.9
|
%
|
|||
Marketing, general and administrative
|
|
7,474
|
|
|
11.9
|
%
|
|
8,397
|
|
|
14.1
|
%
|
|
7,930
|
|
|
14.3
|
%
|
|||
Restructuring and other charges
|
|
384
|
|
|
0.6
|
%
|
|
1,886
|
|
|
3.2
|
%
|
|
354
|
|
|
0.6
|
%
|
|||
Amortization of acquisition-related intangibles
|
|
177
|
|
|
0.3
|
%
|
|
294
|
|
|
0.5
|
%
|
|
265
|
|
|
0.5
|
%
|
|||
Operating income
|
|
17,936
|
|
|
28.6
|
%
|
|
12,874
|
|
|
21.7
|
%
|
|
14,002
|
|
|
25.3
|
%
|
|||
Gains (losses) on equity investments, net
|
|
2,651
|
|
|
4.2
|
%
|
|
506
|
|
|
0.9
|
%
|
|
315
|
|
|
0.6
|
%
|
|||
Interest and other, net
|
|
(235
|
)
|
|
(0.4
|
)%
|
|
(444
|
)
|
|
(0.8
|
)%
|
|
(105
|
)
|
|
(0.2
|
)%
|
|||
Income before taxes
|
|
20,352
|
|
|
32.4
|
%
|
|
12,936
|
|
|
21.8
|
%
|
|
14,212
|
|
|
25.7
|
%
|
|||
Provision for taxes
|
|
10,751
|
|
|
17.1
|
%
|
|
2,620
|
|
|
4.4
|
%
|
|
2,792
|
|
|
5.1
|
%
|
|||
Net income
|
|
$
|
9,601
|
|
|
15.3
|
%
|
|
$
|
10,316
|
|
|
17.4
|
%
|
|
$
|
11,420
|
|
|
20.6
|
%
|
Earnings per share - Diluted
|
|
$
|
1.99
|
|
|
|
|
$
|
2.12
|
|
|
|
|
$
|
2.33
|
|
|
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
15
|
REVENUE
|
|
SEGMENT REVENUE
|
SEGMENT REVENUE WALK
|
2017 vs. 2016
|
2016 vs. 2015
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
16
|
GROSS MARGIN
|
(In Millions)
|
|
GROSS MARGIN WALK
|
||
$
|
39,069
|
|
|
2017 Gross Margin
|
2,380
|
|
|
Higher gross margin from platform revenue
|
|
1,010
|
|
|
Lower platform unit cost, primarily on 14nm cost improvement
|
|
420
|
|
|
Lower Altera and other acquisition-related charges
|
|
315
|
|
|
Lower period charges associated with product warranty and intellectual property agreements incurred in 2016
|
|
(535
|
)
|
|
Higher factory start-up costs, primarily driven by the ramp of our 10nm process technology
|
|
(390
|
)
|
|
Impact of the ISecG divestiture, offset by higher gross margin from adjacent businesses
|
|
(275
|
)
|
|
Period charges primarily associated with engineering samples and higher initial production costs from our 10nm products
|
|
(47
|
)
|
|
Other
|
|
$
|
36,191
|
|
|
2016 Gross Margin
|
1,830
|
|
|
Higher gross margin from platform revenue
|
|
1,150
|
|
|
PSG gross margin from acquisition of Altera
|
|
935
|
|
|
Lower platform unit cost
|
|
(1,045
|
)
|
|
Altera and other acquisition-related charges
|
|
(690
|
)
|
|
Lower NSG gross margin
|
|
(645
|
)
|
|
Higher factory start-up costs, primarily driven by the ramp of our 10nm process technology
|
|
(315
|
)
|
|
Period charges associated with product warranty and intellectual property agreements
|
|
292
|
|
|
Other
|
|
$
|
34,679
|
|
|
2015 Gross Margin
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
17
|
RESEARCH AND DEVELOPMENT
|
|
MARKETING, GENERAL AND ADMINISTRATIVE
|
2017-2016
|
+
|
Investments in data-centric businesses, including the addition of Mobileye
|
+
|
Profit-dependent compensation due to an increase in net income, excluding Tax Reform impacts
|
-
|
Lower expenses due to the ISecG divestiture
|
-
|
Cost savings from gained efficiencies
|
2016-2015
|
+
|
Addition of PSG expenses from the acquisition of Altera Corporation (Altera)
|
+
|
Higher investment, net of 2016 restructuring program savings, in strategically important areas such as servers, Internet of Things, new devices, and memory
|
+
|
Higher process development costs for our 7nm process technology
|
-
|
Lower depreciation expense due to a change at the beginning of fiscal year 2016 to the estimated useful life of the machinery and equipment in our wafer fabrication facilities
|
2017-2016
|
-
|
Lower expenses due to the ISecG divestiture
|
-
|
Change to the Intel Inside program
|
+
|
Profit-dependent compensation due to an increase in net income, excluding Tax Reform impacts
|
2016-2015
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
18
|
MD&A - RESULTS OF OPERATIONS
|
Client Computing Group
|
20
|
Revenue Summary
|
|
|
2017 vs. 2016
|
|
|
+
|
Growth in notebook (NB) from the strength in commercial and gaming and improving market conditions
|
|
+
|
Higher adjacent revenue, primarily from modem product ramp
|
|
-
|
Continued desktop (DT) market decline and the impact from the change of Intel Inside program, partially offset by higher demand for high-performance processors
|
|
|
|
|
2016 vs. 2015
|
|
|
+
|
Ramp of our adjacent products, primarily modem
|
|
-
|
PC market decline, offset by mix of high-performance processors
|
|
|
|
|
Key Revenue Metrics
|
||||||
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||
Desktop Platform
|
|
|
|
|
|
|
|
Volume
|
down
|
(5)%
|
|
down
|
(6)%
|
|
ASP
|
flat
|
—%
|
|
up
|
2%
|
|
|
|
|
|
|
|
Notebook Platform
|
|
|
|
|
|
|
|
Volume
|
up
|
5%
|
|
down
|
(1)%
|
|
ASP
|
up
|
2%
|
|
up
|
2%
|
|
|
|
|
|
|
|
Adjacent Products
|
|
|
|
|
|
|
|
Revenue
|
up
|
29%
|
|
up
|
40%
|
|
|
|
|
|
|
|
(In Millions)
|
|
CCG Operating Income Walk
|
||
$
|
12,919
|
|
|
2017 Operating Income
|
1,135
|
|
|
Lower CCG platform unit cost, primarily on 14nm cost improvement
|
|
630
|
|
|
Lower CCG spending and share of technology development and MG&A costs
|
|
635
|
|
|
Higher gross margin from CCG platform revenue
|
|
(430
|
)
|
|
Period charges primarily associated with engineering samples and higher initial production costs from our 10nm products
|
|
303
|
|
|
Other
|
|
$
|
10,646
|
|
|
2016 Operating Income
|
1,250
|
|
|
Lower CCG platform unit cost
|
|
905
|
|
|
Lower CCG operating expense
|
|
625
|
|
|
Higher gross margin from CCG platform revenue
|
|
(645
|
)
|
|
Higher factory start-up costs, primarily driven by the ramp of our 10nm process technology
|
|
345
|
|
|
Other
|
|
$
|
8,166
|
|
|
2015 Operating Income
|
MD&A - RESULTS OF OPERATIONS
|
Client Computing Group
|
21
|
|
|
Products and competitiveness
|
|
|
|
|
We offer a broad portfolio of platforms and technologies designed to provide workload-optimized performance across compute, storage, and network. These offerings span the full spectrum from the data center core to the network edge. In addition, DCG focuses on lowering the total cost of ownership and on other specific workload optimizations for the enterprise, cloud service provider, and communications service provider market segments with hardware-enhanced performance, security, and reliability. DCG's platform value can be extended through Intel adjacent products such as FPGAs and SSDs.
|
|
|
In early Q3 2017, we launched the Intel Xeon Scalable processors, formerly code-named Skylake-SP. The new product delivers performance improvement over the prior generation on popular workloads, and was broadly available in more than 200 original equipment manufacturer (OEM) systems as of the end of 2017.
|
MD&A - RESULTS OF OPERATIONS
|
Data Center Group
|
23
|
Market Segment Revenue Growth
1
|
|||||
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||
Cloud Service Provider
|
up
|
28%
|
|
up
|
24%
|
Enterprise and Government
|
down
|
(3)%
|
|
down
|
(3)%
|
Communication Service Provider
|
up
|
15%
|
|
up
|
19%
|
1
DCG platform products are sold across all three market segments.
|
Revenue Summary
|
|
|
2017 vs. 2016
|
|
|
+
|
Growth in server box type, primarily with cloud service providers and increased market share in network box type, and higher mix of our 14nm processors that have higher ASPs
|
|
+
|
Higher revenue across our adjacent products
|
|
|
|
|
2016 vs. 2015
|
|
|
+
|
Growth in cloud and network, offset by mix of processors
|
|
+
|
Higher revenue across our adjacent products
|
|
|
|
|
Key Revenue Metrics
|
||||||
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||
DCG Platform
|
|
|
|
|
|
|
|
Volume
|
up
|
5%
|
|
up
|
8%
|
|
ASP
|
up
|
4%
|
|
down
|
(1)%
|
|
|
|
|
|
|
|
Adjacent Products
|
|
|
|
|
|
|
|
Revenue
|
up
|
21%
|
|
up
|
19%
|
|
|
|
|
|
|
|
(In Millions)
|
|
DCG Operating Income Walk
|
||
$
|
8,395
|
|
|
2017 Operating Income
|
1,450
|
|
|
Higher gross margin from DCG platform revenue
|
|
215
|
|
|
Lower period charges associated with product warranty and intellectual property agreements incurred in 2016
|
|
(585
|
)
|
|
Higher factory start-up costs, primarily driven by the ramp of our 10nm process technology
|
|
(315
|
)
|
|
Higher DCG spending and share of technology development and MG&A costs
|
|
110
|
|
|
Other
|
|
$
|
7,520
|
|
|
2016 Operating Income
|
930
|
|
|
Higher gross margin from DCG platform revenue
|
|
(655
|
)
|
|
Higher DCG operating expense
|
|
(335
|
)
|
|
Higher DCG platform unit costs
|
|
(215
|
)
|
|
Period charges associated with product warranty and intellectual property agreements
|
|
(52
|
)
|
|
Other
|
|
$
|
7,847
|
|
|
2015 Operating Income
|
MD&A - RESULTS OF OPERATIONS
|
Data Center Group
|
24
|
MD&A - RESULTS OF OPERATIONS
|
Internet of Things Group
|
26
|
2017 vs. 2016
|
2016 vs. 2015
|
2017 vs. 2016
|
2016 vs. 2015
|
MD&A - RESULTS OF OPERATIONS
|
Internet of Things Group
|
27
|
|
With data growth expanding, our customers face the challenge of getting critical, or "hot," data close to the CPU for rapid access. Intel's innovations in technology address the need for various storage tiers, based on different usages, while keeping a focus on performance and cost. As customers look to improve the performance of their storage and memory devices, we are seeing and leading a transition to the PCI Express* interface with Non-Volatile Memory Express* for SSDs.
In the face of these growing volumes of data, Intel took on the exacting needs of data centers for growing capacity, easy serviceability, and thermal efficiency and announced our invention of the innovative "ruler" form factor that will solve customer requirements without the constraints of legacy form factors. The innovative ruler will enable up to one petabyte of storage in a single server rack unit.
|
|
|
"Ruler" form factor
|
MD&A - RESULTS OF OPERATIONS
|
Non-Volatile Memory Solutions Group
|
29
|
2017 vs. 2016
|
2016 vs. 2015
|
2017 vs. 2016
|
2016 vs. 2015
|
MD&A - RESULTS OF OPERATIONS
|
Non-Volatile Memory Solutions Group
|
30
|
MD&A - RESULTS OF OPERATIONS
|
Programmable Solutions Group
|
32
|
2017 vs. 2016
|
2017 vs. 2016
|
MD&A - RESULTS OF OPERATIONS
|
Programmable Solutions Group
|
33
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
2016 Restructuring Program
|
|
$
|
135
|
|
|
$
|
1,823
|
|
|
$
|
—
|
|
2015 and 2013 Restructuring Programs
|
|
—
|
|
|
—
|
|
|
354
|
|
|||
ISecG separation costs and other charges
|
|
249
|
|
|
63
|
|
|
—
|
|
|||
Total restructuring and other charges
|
|
$
|
384
|
|
|
$
|
1,886
|
|
|
$
|
354
|
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Gains (losses) on equity investments, net
|
|
$
|
2,651
|
|
|
$
|
506
|
|
|
$
|
315
|
|
Interest and other, net
|
|
$
|
(235
|
)
|
|
$
|
(444
|
)
|
|
$
|
(105
|
)
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
34
|
Years Ended
(Dollars in Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Income before taxes
|
|
$
|
20,352
|
|
|
$
|
12,936
|
|
|
$
|
14,212
|
|
Provision for taxes
|
|
$
|
10,751
|
|
|
$
|
2,620
|
|
|
$
|
2,792
|
|
Effective tax rate
|
|
52.8
|
%
|
|
20.3
|
%
|
|
19.6
|
%
|
(Dollars in Millions)
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Cash and cash equivalents, short-term investments, and trading assets
|
|
$
|
14,002
|
|
|
$
|
17,099
|
|
Other long-term investments
|
|
$
|
3,712
|
|
|
$
|
4,716
|
|
Loans receivable and other
|
|
$
|
1,097
|
|
|
$
|
996
|
|
Reverse repurchase agreements with original maturities greater than three months
|
|
$
|
250
|
|
|
$
|
250
|
|
Total debt
|
|
$
|
26,813
|
|
|
$
|
25,283
|
|
Temporary equity
|
|
$
|
866
|
|
|
$
|
882
|
|
Debt as a percentage of permanent stockholders’ equity
|
|
38.8
|
%
|
|
38.2
|
%
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
35
|
SOURCES AND USES OF CASH
(In Millions)
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
36
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Net cash provided by operating activities
|
|
$
|
22,110
|
|
|
$
|
21,808
|
|
|
$
|
19,018
|
|
Net cash used for investing activities
|
|
(15,762
|
)
|
|
(25,817
|
)
|
|
(8,183
|
)
|
|||
Net cash provided by (used for) financing activities
|
|
(8,475
|
)
|
|
(5,739
|
)
|
|
1,912
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
(2,127
|
)
|
|
$
|
(9,748
|
)
|
|
$
|
12,747
|
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
37
|
|
|
Payments Due by Period
|
||||||||||||||||||
(In Millions)
|
|
Total
|
|
Less Than
1 Year
|
|
1–3 Years
|
|
3–5 Years
|
|
More Than
5 Years
|
||||||||||
Operating lease obligations
|
|
$
|
1,245
|
|
|
$
|
215
|
|
|
$
|
348
|
|
|
$
|
241
|
|
|
$
|
441
|
|
Capital purchase obligations
1
|
|
12,068
|
|
|
9,689
|
|
|
2,266
|
|
|
113
|
|
|
—
|
|
|||||
Other purchase obligations and commitments
2
|
|
2,692
|
|
|
1,577
|
|
|
1,040
|
|
|
55
|
|
|
20
|
|
|||||
Tax obligations
3
|
|
6,120
|
|
|
490
|
|
|
979
|
|
|
979
|
|
|
3,672
|
|
|||||
Long-term debt obligations
4
|
|
42,278
|
|
|
1,495
|
|
|
5,377
|
|
|
8,489
|
|
|
26,917
|
|
|||||
Other long-term liabilities
5
|
|
1,544
|
|
|
799
|
|
|
422
|
|
|
190
|
|
|
133
|
|
|||||
Total
6
|
|
$
|
65,947
|
|
|
$
|
14,265
|
|
|
$
|
10,432
|
|
|
$
|
10,067
|
|
|
$
|
31,183
|
|
1
|
Capital purchase obligations represent commitments for the construction or purchase of property, plant and equipment. They were not recorded as liabilities on our consolidated balance sheets as of
December 30, 2017
, as we had not yet received the related goods nor taken title to the property.
|
2
|
Other purchase obligations and commitments include payments due under various types of licenses and agreements to purchase goods or services, as well as payments due under non-contingent funding obligations.
|
3
|
Tax obligations represent the future cash payments related to
Tax Reform
enacted in 2017 for the one-time provisional transition tax on our previously untaxed foreign earnings. For further information, see "
Note 8: Income Taxes
" within the Consolidated Financial Statements.
|
4
|
Amounts represent principal and interest cash payments over the life of the debt obligations, including anticipated interest payments that are not recorded on our consolidated balance sheets. Debt obligations are
classified based on their stated maturity date, regardless of their classification on the consolidated balance sheet
s. Any future settlement of convertible debt would impact our cash payments.
|
5
|
Amounts represent future cash payments to satisfy other long-term liabilities recorded on our consolidated balance sheets, including the short-term portion of these long-term liabilities. Derivative instruments are excluded from the preceding table, as they do not represent the amounts that may ultimately be paid.
|
6
|
Total excludes contractual obligations already recorded on our consolidated balance sheets as current liabilities, except for the short-term portions of long-term debt obligations and other long-term liabilities.
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
38
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
39
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results and Analysis
|
40
|
Other key information
|
Years Ended
|
|
Dec 29,
2012 |
|
Dec 28,
2013 |
|
Dec 27,
2014 |
|
Dec 26,
2015 |
|
Dec 31,
2016 |
|
Dec 30,
2017 |
||||||||||||
Intel Corporation
|
|
$
|
100
|
|
|
$
|
132
|
|
|
$
|
199
|
|
|
$
|
191
|
|
|
$
|
205
|
|
|
$
|
268
|
|
Dow Jones U.S. Technology Index
|
|
$
|
100
|
|
|
$
|
129
|
|
|
$
|
160
|
|
|
$
|
163
|
|
|
$
|
185
|
|
|
$
|
254
|
|
S&P 500 Index
|
|
$
|
100
|
|
|
$
|
134
|
|
|
$
|
155
|
|
|
$
|
156
|
|
|
$
|
174
|
|
|
$
|
212
|
|
1
|
The graph and table assume that $100 was invested on the last day of trading for the fiscal year
December 29, 2012
in Intel's common stock, the Dow Jones U.S. Technology Index, and the S&P 500 Index, and that all dividends were reinvested.
|
OTHER KEY INFORMATION
|
|
41
|
Years Ended
(Dollars in Millions, Except Per Share Amounts) |
|
Dec 28,
2013 |
|
Dec 27,
2014 |
|
Dec 26,
2015 |
|
Dec 31,
2016 |
|
Dec 30,
2017 |
||||||||||
Net revenue
|
|
$
|
52,708
|
|
|
$
|
55,870
|
|
|
$
|
55,355
|
|
|
$
|
59,387
|
|
|
$
|
62,761
|
|
Gross margin
|
|
$
|
31,521
|
|
|
$
|
35,609
|
|
|
$
|
34,679
|
|
|
$
|
36,191
|
|
|
$
|
39,069
|
|
Gross margin percentage
|
|
59.8
|
%
|
|
63.7
|
%
|
|
62.6
|
%
|
|
60.9
|
%
|
|
62.3
|
%
|
|||||
Research and development (R&D)
|
|
$
|
10,611
|
|
|
$
|
11,537
|
|
|
$
|
12,128
|
|
|
$
|
12,740
|
|
|
$
|
13,098
|
|
Marketing, general and administrative (MG&A)
|
|
$
|
8,088
|
|
|
$
|
8,136
|
|
|
$
|
7,930
|
|
|
$
|
8,397
|
|
|
$
|
7,474
|
|
R&D and MG&A as a percentage of revenue
|
|
35.5
|
%
|
|
35.2
|
%
|
|
36.2
|
%
|
|
35.6
|
%
|
|
32.8
|
%
|
|||||
Operating income
|
|
$
|
12,291
|
|
|
$
|
15,347
|
|
|
$
|
14,002
|
|
|
$
|
12,874
|
|
|
$
|
17,936
|
|
Net income
1
|
|
$
|
9,620
|
|
|
$
|
11,704
|
|
|
$
|
11,420
|
|
|
$
|
10,316
|
|
|
$
|
9,601
|
|
Effective tax rate
1
|
|
23.7
|
%
|
|
25.9
|
%
|
|
19.6
|
%
|
|
20.3
|
%
|
|
52.8
|
%
|
|||||
Earnings per share
1
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.94
|
|
|
$
|
2.39
|
|
|
$
|
2.41
|
|
|
$
|
2.18
|
|
|
$
|
2.04
|
|
Diluted
|
|
$
|
1.89
|
|
|
$
|
2.31
|
|
|
$
|
2.33
|
|
|
$
|
2.12
|
|
|
$
|
1.99
|
|
Weighted average diluted shares of common stock outstanding
|
|
5,097
|
|
|
5,056
|
|
|
4,894
|
|
|
4,875
|
|
|
4,835
|
|
|||||
Dividends per share of common stock, declared and paid
|
|
$
|
0.90
|
|
|
$
|
0.90
|
|
|
$
|
0.96
|
|
|
$
|
1.04
|
|
|
$
|
1.0775
|
|
Net cash provided by operating activities
|
|
$
|
20,776
|
|
|
$
|
20,418
|
|
|
$
|
19,018
|
|
|
$
|
21,808
|
|
|
$
|
22,110
|
|
Additions to property, plant and equipment
|
|
$
|
10,711
|
|
|
$
|
10,105
|
|
|
$
|
7,326
|
|
|
$
|
9,625
|
|
|
$
|
11,778
|
|
Repurchase of common stock
|
|
$
|
2,147
|
|
|
$
|
10,792
|
|
|
$
|
3,001
|
|
|
$
|
2,587
|
|
|
$
|
3,615
|
|
Payment of dividends to stockholders
|
|
$
|
4,479
|
|
|
$
|
4,409
|
|
|
$
|
4,556
|
|
|
$
|
4,925
|
|
|
$
|
5,072
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Dollars in Millions)
|
|
Dec 28,
2013 |
|
Dec 27,
2014 |
|
Dec 26,
2015 |
|
Dec 31,
2016 |
|
Dec 30,
2017 |
||||||||||
Property, plant and equipment, net
|
|
$
|
31,428
|
|
|
$
|
33,238
|
|
|
$
|
31,858
|
|
|
$
|
36,171
|
|
|
$
|
41,109
|
|
Total assets
|
|
$
|
89,789
|
|
|
$
|
90,012
|
|
|
$
|
101,459
|
|
|
$
|
113,327
|
|
|
$
|
123,249
|
|
Debt
|
|
$
|
13,385
|
|
|
$
|
13,655
|
|
|
$
|
22,670
|
|
|
$
|
25,283
|
|
|
$
|
26,813
|
|
Stockholders’ equity
|
|
$
|
58,256
|
|
|
$
|
55,865
|
|
|
$
|
61,085
|
|
|
$
|
66,226
|
|
|
$
|
69,019
|
|
Employees (in thousands)
|
|
107.6
|
|
|
106.7
|
|
|
107.3
|
|
|
106.0
|
|
|
102.7
|
|
1
|
In Q4 2017, we recognized a
$5.4 billion
higher income tax expense as a result of one-time impacts from Tax Reform.
|
OTHER KEY INFORMATION
|
|
42
|
OTHER KEY INFORMATION
|
|
43
|
OTHER KEY INFORMATION
|
|
44
|
•
|
Well-positioned for growth in smart, connected world.
We offer solutions across every segment of the smart, connected world—from the cloud, to the network, to devices—and believe that we are well-positioned for growth through our strategy of the Virtuous Cycle of Growth. The expansion and proliferation of the cloud and data center, Internet of Things, memory, and FPGAs—all of which are connected—help grow our business. As more devices connect to the cloud, we have increased opportunities for growth. We are uniquely positioned to meet customer needs with platform solutions that leverage our breadth of products. Our range of silicon products and associated software gives us an end-to-end capability supported by our manufacturing expertise and intellectual property.
|
•
|
Transitions to next-generation technologies.
We have a market lead in transitioning to the next-generation process technology and bringing products to market using such technology. In Q4 2017, we began to ship products utilizing our 10nm process technology and we are continuing to work on the development of our next-generation 7nm process technology. We believe that these advancements will offer significant improvements in one or more of the following areas: performance, new features, energy efficiency, and cost.
|
•
|
Combination of our network of manufacturing and assembly and test facilities with our global architecture design teams.
We have made significant capital and R&D investments into our integrated manufacturing network, which enables us to have more direct control over our design, development, and manufacturing processes; quality control; product cost; production timing; performance; power consumption; and manufacturing yield. The increased cost of constructing new fabrication facilities to support smaller transistor geometries and larger wafers has led to a reduced number of companies that can build and equip leading-edge manufacturing facilities. Most of our competitors rely on third-party foundries and subcontractors for manufacturing and assembly and test needs. We provide foundry services as an alternative to such foundries.
|
OTHER KEY INFORMATION
|
|
45
|
•
|
Inventories
-
the transition of manufacturing costs to inventory excluding factory excess capacity costs. Inventoried product reflected at the lower of cost or net realizable value considering future demand and market conditions;
|
•
|
Property, plant and equipment
- the useful life determination and the related timing of when depreciation begins;
|
•
|
Long-lived assets
- the valuation methods and assumptions used in assessing the impairment of property, plant and equipment, identified intangibles, and goodwill, including the determination of asset groupings and the identification and allocation of goodwill to reporting units;
|
•
|
Non-marketable equity investments
- the valuation estimates and assessment of other-than-temporary impairment;
|
•
|
Business combinations
- the assumptions used to allocate the purchase price paid for assets acquired and liabilities assumed in connection with our acquisitions;
|
•
|
Income taxes
-
the identification and measurement of deferred tax assets and liabilities and the provisional estimates associated with Tax Reform; and
|
•
|
Loss contingencies
- the estimation of when a loss is probable and reasonably estimable.
|
•
|
business conditions, including downturns in the market segments in which we operate, or in the global or regional economies;
|
•
|
consumer confidence or income levels caused by changes in market conditions, including changes in government borrowing, taxation, or spending policies; the credit market; or expected inflation, employment, and energy or other commodity prices;
|
•
|
the level of our customers’ inventories;
|
•
|
competitive and pricing pressures, including actions taken by competitors;
|
•
|
customer order patterns, including order cancellations;
|
•
|
failure to timely introduce competitive products; and
|
•
|
market acceptance and industry support of our new and maturing products.
|
OTHER KEY INFORMATION
|
|
46
|
•
|
global and regional economic conditions;
|
•
|
geopolitical and security issues, such as armed conflict and civil or military unrest, political instability (including geopolitical uncertainty on the Korean peninsula), human rights concerns, and terrorist activity;
|
•
|
natural disasters, public health issues, and other catastrophic events;
|
•
|
inefficient infrastructure and other disruptions, such as supply chain interruptions and large-scale outages or unreliable provision of services from utilities, transportation, data hosting, or telecommunications providers;
|
•
|
government restrictions on, or nationalization of our operations in any country, or restrictions on our ability to repatriate earnings from a particular country;
|
•
|
differing employment practices and labor issues;
|
•
|
formal or informal imposition of new or revised export and/or import and doing-business regulations, including trade sanctions and tariffs, which could be changed without notice;
|
•
|
ineffective legal protection of our IP rights in certain countries;
|
•
|
local business and cultural factors that differ from our current standards and practices; and
|
•
|
continuing uncertainty regarding social, political, immigration, and tax and trade policies in the U.S. and abroad, including the United Kingdom's vote to withdraw from the European Union.
|
OTHER KEY INFORMATION
|
|
47
|
OTHER KEY INFORMATION
|
|
48
|
•
|
writing off some or all of the value of inventory;
|
•
|
recalling products that have been shipped;
|
•
|
providing product replacements or modifications;
|
•
|
reimbursing customers for certain costs they incur;
|
•
|
defending against litigation and/or paying resulting damages; and
|
•
|
paying fines imposed by regulatory agencies.
|
•
|
regulatory penalties, fines, and legal liabilities;
|
•
|
suspension of production;
|
•
|
alteration of our manufacturing and assembly and test processes;
|
•
|
damage to our reputation; and
|
•
|
restrictions on our operations or sales.
|
OTHER KEY INFORMATION
|
|
49
|
OTHER KEY INFORMATION
|
|
50
|
•
|
pay monetary damages, including payments to satisfy indemnification obligations;
|
•
|
stop manufacturing, using, selling, offering to sell, or importing products or technology subject to claims;
|
•
|
need to develop other products or technology not subject to claims, which could be time-consuming or costly; and/or
|
•
|
enter into settlement and license agreements, which agreements may not be available on commercially reasonable terms.
|
•
|
the transaction may not advance our business strategy and its anticipated benefits may never materialize;
|
•
|
we may experience disruption of our ongoing operations and our management’s attention may be diverted;
|
•
|
we may not realize a satisfactory return on our investment, potentially resulting in an impairment;
|
•
|
we may be unable to retain key personnel of acquired businesses or may have difficulty integrating employees, business systems, and technology;
|
OTHER KEY INFORMATION
|
|
51
|
•
|
we may not be able to identify opportunities in a timely manner or on terms acceptable to us;
|
•
|
controls, processes, and procedures of acquired businesses may not adequately ensure compliance with laws and regulations, and we may fail to identify compliance issues or liabilities;
|
•
|
we may be unable to effectively enter new market segments through our strategic transactions or retain customers and partners of acquired businesses;
|
•
|
we may fail to identify the existence of unknown, underestimated, and/or undisclosed commitments or liabilities; and/or
|
•
|
we may fail to complete a transaction in a timely manner, if at all, due to our inability to obtain required government or other approvals, IP disputes or other litigation, difficulty in obtaining financing on terms acceptable to us, or other unforeseen factors.
|
•
|
changes in jurisdictions in which our profits are determined to be earned and taxed;
|
•
|
the resolution of issues arising from tax audits;
|
•
|
changes in the valuation of our deferred tax assets and liabilities, and in deferred tax valuation allowances;
|
•
|
adjustments to income taxes upon finalization of tax returns;
|
•
|
increases in expenses not deductible for tax purposes, including impairments of goodwill;
|
•
|
changes in available tax credits;
|
•
|
changes in our ability to secure new or renew existing tax holidays and incentives;
|
•
|
changes in U.S. federal, state, or foreign tax laws or their interpretation, including changes in the U.S. to the taxation of manufacturing enterprises and of non-U.S. income and expenses;
|
•
|
changes in accounting standards; and
|
•
|
our decision to repatriate non-U.S. earnings for which we have not previously provided for local country withholding taxes incurred upon repatriation.
|
OTHER KEY INFORMATION
|
|
52
|
•
|
Revenue and gross margin:
Non-GAAP financial measures exclude the impact of the deferred revenue write-down, amortization of acquisition-related intangible assets that impact cost of sales, and the inventory valuation adjustment.
|
OTHER KEY INFORMATION
|
|
53
|
◦
|
Deferred revenue write-down:
Sales to distributors are made under agreements allowing for subsequent price adjustments and returns, and are deferred until the products are resold by the distributor. Business combination accounting principles require us to write down to fair value the deferred revenue assumed in our acquisitions as we have limited performance obligations associated with this deferred revenue. Our GAAP revenues and related cost of sales for the subsequent reselling by distributors to end customers after an acquisition do not reflect the full amounts that would have been reported if the acquired deferred revenue was not written down to fair value. The non-GAAP adjustments made in Q1 2016 eliminate the effect of the deferred revenue write-down associated with our acquisition of Altera. We believe these adjustments are useful to investors as an additional means to reflect revenue and gross margin trends of our business.
|
◦
|
Inventory valuation adjustment:
Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of inventory reflects the acquired company’s cost of manufacturing plus a portion of the expected profit margin. The non-GAAP adjustments to our cost of sales exclude the expected profit margin component that is recorded under business combination accounting principles associated with our acquisitions of Mobileye and Altera. We believe the adjustments are useful to investors as an additional means to reflect cost of sales and gross margin trends of our business.
|
•
|
Amortization of acquisition-related intangible assets:
Amortization of acquisition-related intangible assets consists of amortization of intangible assets such as developed technology, brands, and customer relationships acquired in connection with business combinations. We record charges related to the amortization of these intangibles within both cost of sales and operating expenses in our GAAP financial statements. Amortization charges for our acquisition-related intangible assets are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. Consequently, our non-GAAP adjustments exclude these charges to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
|
•
|
Other acquisition-related charges:
Other acquisition-related charges exclude the impact of other charges associated with the acquisitions of Mobileye and Altera. These charges primarily include bankers' fees, compensation-related costs, and valuation charges for stock-based compensation incurred related to the acquisitions. We believe these adjustments are useful to investors as an additional means to reflect the spending trends of our business.
|
(In Millions)
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Operating income
|
|
$
|
17,936
|
|
|
$
|
12,874
|
|
|
$
|
14,002
|
|
Deferred revenue write-down, net of cost of sales
|
|
—
|
|
|
64
|
|
|
—
|
|
|||
Inventory valuation
|
|
55
|
|
|
387
|
|
|
—
|
|
|||
Amortization of acquisition-related intangibles
|
|
1,089
|
|
|
1,231
|
|
|
608
|
|
|||
Restructuring and other charges
|
|
384
|
|
|
1,886
|
|
|
354
|
|
|||
Other acquisition-related charges
|
|
113
|
|
|
100
|
|
|
—
|
|
|||
Non-GAAP operating income
|
|
$
|
19,577
|
|
|
$
|
16,542
|
|
|
$
|
14,964
|
|
OTHER KEY INFORMATION
|
|
54
|
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Earnings per share - Diluted
|
|
$
|
1.99
|
|
|
$
|
2.12
|
|
|
$
|
2.33
|
|
Deferred revenue write-down, net of cost of sales
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|||
Inventory valuation
|
|
0.01
|
|
|
0.08
|
|
|
—
|
|
|||
Amortization of acquisition-related intangibles
|
|
0.22
|
|
|
0.25
|
|
|
0.13
|
|
|||
Restructuring and other charges
|
|
0.08
|
|
|
0.39
|
|
|
0.07
|
|
|||
Other acquisition-related charges
|
|
0.02
|
|
|
0.02
|
|
|
—
|
|
|||
(Gains)/Losses from divestiture
|
|
(0.08
|
)
|
|
—
|
|
|
—
|
|
|||
Tax Reform
|
|
1.13
|
|
|
—
|
|
|
—
|
|
|||
Income tax effect
|
|
0.09
|
|
|
(0.15
|
)
|
|
(0.04
|
)
|
|||
Non-GAAP Earnings per share - Diluted
|
|
$
|
3.46
|
|
|
$
|
2.72
|
|
|
$
|
2.49
|
|
(Square Feet in Millions)
|
|
United
States
|
|
Other
Countries
|
|
Total
|
|||
Owned facilities
|
|
31.3
|
|
|
17.9
|
|
|
49.2
|
|
Leased facilities
|
|
1.6
|
|
|
6.3
|
|
|
7.9
|
|
Total facilities
|
|
32.9
|
|
|
24.2
|
|
|
57.1
|
|
OTHER KEY INFORMATION
|
|
55
|
Period
|
|
Total Number of
Shares Purchased
(In Millions)
|
|
Average Price
Paid Per Share
|
|
Dollar Value of
Shares That May
Yet Be Purchased Under the Plans
(In Millions)
|
|||||
January 1, 2017 - April 1, 2017
|
|
35.1
|
|
|
$
|
35.94
|
|
|
$
|
5,538
|
|
April 2, 2017 - July 1, 2017
|
|
37.6
|
|
|
$
|
35.66
|
|
|
$
|
14,198
|
|
July 2, 2017 - September 30, 2017
|
|
28.6
|
|
|
$
|
35.19
|
|
|
$
|
13,191
|
|
October 1, 2017 - December 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
$
|
13,191
|
|
Total
|
|
101.3
|
|
|
|
|
|
|
OTHER KEY INFORMATION
|
|
56
|
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
Page
|
Reports of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Statements of Income
|
|
Consolidated Statements of Comprehensive Income
|
|
Consolidated Balance Sheets
|
|
Consolidated Statements of Cash Flows
|
|
Consolidated Statements of Stockholders’ Equity
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Basis
|
|
Note 1: Basis of Presentation
|
|
Note 2: Accounting Policies
|
|
Note 3: Recent Accounting Standards
|
|
Performance & Operations
|
|
Note 4: Operating Segments
|
|
Note 5: Earnings Per Share
|
|
Note 6: Other Financial Statement Details
|
|
Note 7: Restructuring and Other Charges
|
|
Note 8: Income Taxes
|
|
Investments, Long-term Assets & Debt
|
|
Note 9: Investments
|
|
Note 10: Acquisitions and Divestitures
|
|
Note 11: Goodwill
|
|
Note 12: Identified Intangible Assets
|
|
Note 13: Other Long-Term Assets
|
|
Note 14: Borrowings
|
|
Note 15: Fair Value
|
|
Risk Management & Other
|
|
Note 16: Other Comprehensive Income (Loss)
|
|
Note 17: Derivative Financial Instruments
|
|
Note 18: Retirement Benefit Plans
|
|
Note 19: Employee Equity Incentive Plans
|
|
Note 20: Commitments and Contingencies
|
|
|
|
INDEX TO SUPPLEMENTAL DETAILS
|
|
Financial Information by Quarter
|
|
Controls and Procedures
|
|
Exhibits and Financial Statement Schedules
|
|
Form 10-K Cross-Reference Index
|
|
|
57
|
report of independent registered public accounting firm
|
AUDITOR'S REPORT
|
|
58
|
report of independent registered public accounting firm
|
AUDITOR'S REPORT
|
|
59
|
intel corporation
consolidated statements of income
|
Years Ended
(In Millions, Except Per Share Amounts) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Net revenue
|
|
$
|
62,761
|
|
|
$
|
59,387
|
|
|
$
|
55,355
|
|
Cost of sales
|
|
23,692
|
|
|
23,196
|
|
|
20,676
|
|
|||
Gross margin
|
|
39,069
|
|
|
36,191
|
|
|
34,679
|
|
|||
Research and development
|
|
13,098
|
|
|
12,740
|
|
|
12,128
|
|
|||
Marketing, general and administrative
|
|
7,474
|
|
|
8,397
|
|
|
7,930
|
|
|||
Restructuring and other charges
|
|
384
|
|
|
1,886
|
|
|
354
|
|
|||
Amortization of acquisition-related intangibles
|
|
177
|
|
|
294
|
|
|
265
|
|
|||
Operating expenses
|
|
21,133
|
|
|
23,317
|
|
|
20,677
|
|
|||
Operating income
|
|
17,936
|
|
|
12,874
|
|
|
14,002
|
|
|||
Gains (losses) on equity investments, net
|
|
2,651
|
|
|
506
|
|
|
315
|
|
|||
Interest and other, net
|
|
(235
|
)
|
|
(444
|
)
|
|
(105
|
)
|
|||
Income before taxes
|
|
20,352
|
|
|
12,936
|
|
|
14,212
|
|
|||
Provision for taxes
|
|
10,751
|
|
|
2,620
|
|
|
2,792
|
|
|||
Net income
|
|
$
|
9,601
|
|
|
$
|
10,316
|
|
|
$
|
11,420
|
|
Earnings per share - Basic
|
|
$
|
2.04
|
|
|
$
|
2.18
|
|
|
$
|
2.41
|
|
Earnings per share - Diluted
|
|
$
|
1.99
|
|
|
$
|
2.12
|
|
|
$
|
2.33
|
|
Weighted average shares of common stock outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
4,701
|
|
|
4,730
|
|
|
4,742
|
|
|||
Diluted
|
|
4,835
|
|
|
4,875
|
|
|
4,894
|
|
FINANCIAL STATEMENTS
|
Consolidated Statements of Income
|
60
|
Intel corporation
consolidated statements of comprehensive income
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Net income
|
|
$
|
9,601
|
|
|
$
|
10,316
|
|
|
$
|
11,420
|
|
Changes in other comprehensive income, net of tax:
|
|
|
|
|
|
|
||||||
Net unrealized holding gains (losses) on available-for-sale investments
|
|
(436
|
)
|
|
415
|
|
|
(710
|
)
|
|||
Deferred tax asset valuation allowance
|
|
—
|
|
|
(8
|
)
|
|
(18
|
)
|
|||
Net unrealized holding gains (losses) on derivatives
|
|
365
|
|
|
7
|
|
|
157
|
|
|||
Actuarial valuation and other pension expenses
|
|
317
|
|
|
(364
|
)
|
|
135
|
|
|||
Net foreign currency translation adjustment
|
|
510
|
|
|
(4
|
)
|
|
(170
|
)
|
|||
Other comprehensive income (loss)
|
|
756
|
|
|
46
|
|
|
(606
|
)
|
|||
Total comprehensive income
|
|
$
|
10,357
|
|
|
$
|
10,362
|
|
|
$
|
10,814
|
|
FINANCIAL STATEMENTS
|
Consolidated Statements of Comprehensive Income
|
61
|
intel corporation
Consolidated balance sheets
|
(In Millions, Except Par Value) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
3,433
|
|
|
$
|
5,560
|
|
Short-term investments
|
|
1,814
|
|
|
3,225
|
|
||
Trading assets
|
|
8,755
|
|
|
8,314
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $25 ($37 in 2016)
|
|
5,607
|
|
|
4,690
|
|
||
Inventories
|
|
6,983
|
|
|
5,553
|
|
||
Assets held for sale
|
|
—
|
|
|
5,210
|
|
||
Other current assets
|
|
2,908
|
|
|
2,956
|
|
||
Total current assets
|
|
29,500
|
|
|
35,508
|
|
||
|
|
|
|
|
||||
Property, plant and equipment, net
|
|
41,109
|
|
|
36,171
|
|
||
Marketable equity securities
|
|
4,192
|
|
|
6,180
|
|
||
Other long-term investments
|
|
3,712
|
|
|
4,716
|
|
||
Goodwill
|
|
24,389
|
|
|
14,099
|
|
||
Identified intangible assets, net
|
|
12,745
|
|
|
9,494
|
|
||
Other long-term assets
|
|
7,602
|
|
|
7,159
|
|
||
Total assets
|
|
$
|
123,249
|
|
|
$
|
113,327
|
|
|
|
|
|
|
||||
Liabilities, temporary equity, and stockholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Short-term debt
|
|
$
|
1,776
|
|
|
$
|
4,634
|
|
Accounts payable
|
|
2,928
|
|
|
2,475
|
|
||
Accrued compensation and benefits
|
|
3,526
|
|
|
3,465
|
|
||
Deferred income
|
|
1,656
|
|
|
1,718
|
|
||
Liabilities held for sale
|
|
—
|
|
|
1,920
|
|
||
Other accrued liabilities
|
|
7,535
|
|
|
6,090
|
|
||
Total current liabilities
|
|
17,421
|
|
|
20,302
|
|
||
|
|
|
|
|
||||
Long-term debt
|
|
25,037
|
|
|
20,649
|
|
||
Long-term deferred tax liabilities
|
|
3,046
|
|
|
1,730
|
|
||
Other long-term liabilities
|
|
7,860
|
|
|
3,538
|
|
||
Commitments and Contingencies (Note 20)
|
|
|
|
|
||||
Temporary equity
|
|
866
|
|
|
882
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.001 par value, 50 shares authorized; none issued
|
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 10,000 shares authorized; 4,687 shares issued and outstanding (4,730 issued and outstanding in 2016) and capital in excess of par value
|
|
26,074
|
|
|
25,373
|
|
||
Accumulated other comprehensive income (loss)
|
|
862
|
|
|
106
|
|
||
Retained earnings
|
|
42,083
|
|
|
40,747
|
|
||
Total stockholders’ equity
|
|
69,019
|
|
|
66,226
|
|
||
Total liabilities, temporary equity, and stockholders’ equity
|
|
$
|
123,249
|
|
|
$
|
113,327
|
|
FINANCIAL STATEMENTS
|
Consolidated Balance Sheets
|
62
|
intel corporation
consolidated statements of cash flows
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Cash and cash equivalents, beginning of period
|
|
$
|
5,560
|
|
|
$
|
15,308
|
|
|
$
|
2,561
|
|
Cash flows provided by (used for) operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
9,601
|
|
|
10,316
|
|
|
11,420
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation
|
|
6,752
|
|
|
6,266
|
|
|
7,821
|
|
|||
Share-based compensation
|
|
1,358
|
|
|
1,444
|
|
|
1,305
|
|
|||
Restructuring and other charges
|
|
384
|
|
|
1,886
|
|
|
354
|
|
|||
Amortization of intangibles
|
|
1,377
|
|
|
1,524
|
|
|
890
|
|
|||
(Gains) losses on equity investments, net
|
|
(2,583
|
)
|
|
(432
|
)
|
|
(263
|
)
|
|||
Loss on debt conversion and extinguishment
|
|
476
|
|
|
—
|
|
|
—
|
|
|||
(Gains) losses on divestitures
|
|
(387
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred taxes
|
|
1,548
|
|
|
257
|
|
|
(1,270
|
)
|
|||
Changes in assets and liabilities:
1
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(781
|
)
|
|
65
|
|
|
(355
|
)
|
|||
Inventories
|
|
(1,300
|
)
|
|
119
|
|
|
(764
|
)
|
|||
Accounts payable
|
|
191
|
|
|
182
|
|
|
(312
|
)
|
|||
Accrued compensation and benefits
|
|
(73
|
)
|
|
(1,595
|
)
|
|
(711
|
)
|
|||
Income taxes payable and receivable
|
|
5,230
|
|
|
1,382
|
|
|
386
|
|
|||
Other assets and liabilities
|
|
317
|
|
|
394
|
|
|
517
|
|
|||
Total adjustments
|
|
12,509
|
|
|
11,492
|
|
|
7,598
|
|
|||
Net cash provided by operating activities
|
|
22,110
|
|
|
21,808
|
|
|
19,018
|
|
|||
Cash flows provided by (used for) investing activities:
|
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
|
(11,778
|
)
|
|
(9,625
|
)
|
|
(7,326
|
)
|
|||
Acquisitions, net of cash acquired
|
|
(14,499
|
)
|
|
(15,470
|
)
|
|
(913
|
)
|
|||
Purchases of available-for-sale investments
|
|
(2,764
|
)
|
|
(9,269
|
)
|
|
(8,259
|
)
|
|||
Sales of available-for-sale investments
|
|
6,978
|
|
|
3,852
|
|
|
2,090
|
|
|||
Maturities of available-for-sale investments
|
|
3,687
|
|
|
5,654
|
|
|
6,168
|
|
|||
Purchases of trading assets
|
|
(13,700
|
)
|
|
(12,237
|
)
|
|
(11,485
|
)
|
|||
Maturities and sales of trading assets
|
|
13,975
|
|
|
10,907
|
|
|
13,372
|
|
|||
Investments in non-marketable equity investments
|
|
(1,601
|
)
|
|
(963
|
)
|
|
(2,011
|
)
|
|||
Proceeds from divestitures
|
|
3,124
|
|
|
—
|
|
|
—
|
|
|||
Other investing
|
|
816
|
|
|
1,334
|
|
|
181
|
|
|||
Net cash used for investing activities
|
|
(15,762
|
)
|
|
(25,817
|
)
|
|
(8,183
|
)
|
|||
Cash flows provided by (used for) financing activities:
|
|
|
|
|
|
|
||||||
Issuance of long-term debt, net of issuance costs
|
|
7,716
|
|
|
2,734
|
|
|
9,476
|
|
|||
Repayment of debt and debt conversion
|
|
(8,080
|
)
|
|
(1,500
|
)
|
|
—
|
|
|||
Proceeds from sales of common stock through employee equity incentive plans
|
|
770
|
|
|
1,108
|
|
|
866
|
|
|||
Repurchase of common stock
|
|
(3,615
|
)
|
|
(2,587
|
)
|
|
(3,001
|
)
|
|||
Payment of dividends to stockholders
|
|
(5,072
|
)
|
|
(4,925
|
)
|
|
(4,556
|
)
|
|||
Other financing
|
|
(194
|
)
|
|
(569
|
)
|
|
(873
|
)
|
|||
Net cash provided by (used for) financing activities
|
|
(8,475
|
)
|
|
(5,739
|
)
|
|
1,912
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
(2,127
|
)
|
|
(9,748
|
)
|
|
12,747
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
3,433
|
|
|
$
|
5,560
|
|
|
$
|
15,308
|
|
Supplemental disclosures:
|
|
|
|
|
|
|
||||||
Acquisition of property, plant and equipment included in accounts payable and accrued liabilities
|
|
$
|
1,417
|
|
|
$
|
979
|
|
|
$
|
392
|
|
Non-marketable equity investment in McAfee from divestiture
|
|
$
|
1,078
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid during the year for:
|
|
|
|
|
|
|
||||||
Interest, net of capitalized interest and interest rate swap payments/receipts
|
|
$
|
624
|
|
|
$
|
682
|
|
|
$
|
186
|
|
Income taxes, net of refunds
|
|
$
|
3,824
|
|
|
$
|
877
|
|
|
$
|
3,439
|
|
1
|
The impact of assets and liabilities reclassified as held for sale was not considered in the changes in assets and liabilities within cash flows from operating activities. See "
Note 10: Acquisitions and Divestitures
" for additional information.
|
FINANCIAL STATEMENTS
|
Consolidated Statements of Cash Flows
|
63
|
intel corporation
consolidated statements of stockholders' equity
|
|
|
Common Stock and Capital
in Excess of Par Value |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings |
|
Total
|
|||||||||||
(In Millions, Except Per Share Amounts) |
|
Number of
Shares |
|
Amount
|
|
||||||||||||||
Balance as of December 27, 2014
|
|
4,748
|
|
|
$
|
21,781
|
|
|
$
|
666
|
|
|
$
|
33,418
|
|
|
$
|
55,865
|
|
Components of comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,420
|
|
|
11,420
|
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
(606
|
)
|
|
—
|
|
|
(606
|
)
|
||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
10,814
|
|
||||||||
Proceeds from sales of common stock through employee equity incentive plans, net tax benefit, and other
|
|
87
|
|
|
1,091
|
|
|
—
|
|
|
—
|
|
|
1,091
|
|
||||
Share-based compensation
|
|
—
|
|
|
1,314
|
|
|
—
|
|
|
—
|
|
|
1,314
|
|
||||
Repurchase of common stock
|
|
(96
|
)
|
|
(453
|
)
|
|
—
|
|
|
(2,548
|
)
|
|
(3,001
|
)
|
||||
Restricted stock unit withholdings
|
|
(14
|
)
|
|
(322
|
)
|
|
—
|
|
|
(120
|
)
|
|
(442
|
)
|
||||
Cash dividends declared ($0.96 per share of common stock)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,556
|
)
|
|
(4,556
|
)
|
||||
Balance as of December 26, 2015
|
|
4,725
|
|
|
23,411
|
|
|
60
|
|
|
37,614
|
|
|
61,085
|
|
||||
Components of comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,316
|
|
|
10,316
|
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
46
|
|
||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
10,362
|
|
||||||||
Proceeds from sales of common stock through employee equity incentive plans, net excess tax benefit, and other
|
|
101
|
|
|
1,322
|
|
|
—
|
|
|
—
|
|
|
1,322
|
|
||||
Share-based compensation
|
|
—
|
|
|
1,438
|
|
|
—
|
|
|
—
|
|
|
1,438
|
|
||||
Repurchase of common stock
|
|
(81
|
)
|
|
(412
|
)
|
|
—
|
|
|
(2,180
|
)
|
|
(2,592
|
)
|
||||
Restricted stock unit withholdings
|
|
(15
|
)
|
|
(386
|
)
|
|
—
|
|
|
(78
|
)
|
|
(464
|
)
|
||||
Cash dividends declared ($1.04 per share of common stock)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,925
|
)
|
|
(4,925
|
)
|
||||
Balance as of December 31, 2016
|
|
4,730
|
|
|
25,373
|
|
|
106
|
|
|
40,747
|
|
|
66,226
|
|
||||
Components of comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,601
|
|
|
9,601
|
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
756
|
|
|
—
|
|
|
756
|
|
||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
10,357
|
|
||||||||
Proceeds from sales of common stock through employee equity incentive plans, net excess tax benefit, and other
1
|
|
70
|
|
|
1,172
|
|
|
—
|
|
|
(1
|
)
|
|
1,171
|
|
||||
Share-based compensation
|
|
—
|
|
|
1,296
|
|
|
—
|
|
|
—
|
|
|
1,296
|
|
||||
Convertible debt
|
|
—
|
|
|
(894
|
)
|
|
—
|
|
|
—
|
|
|
(894
|
)
|
||||
Repurchase of common stock
|
|
(101
|
)
|
|
(552
|
)
|
|
—
|
|
|
(3,057
|
)
|
|
(3,609
|
)
|
||||
Restricted stock unit withholdings
|
|
(12
|
)
|
|
(321
|
)
|
|
—
|
|
|
(135
|
)
|
|
(456
|
)
|
||||
Cash dividends declared ($1.0775 per share of common stock)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,072
|
)
|
|
(5,072
|
)
|
||||
Balance as of December 30, 2017
|
|
4,687
|
|
|
$
|
26,074
|
|
|
$
|
862
|
|
|
$
|
42,083
|
|
|
$
|
69,019
|
|
1
|
Includes approximately $
375 million
of noncontrolling interest activity due to our acquisition of Mobileye.
|
FINANCIAL STATEMENTS
|
Consolidated Statements of Stockholders' Equity
|
64
|
intel corporation
notes to consolidated financial statements
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
65
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
66
|
•
|
Level 1.
Quoted prices in active markets for identical assets or liabilities. We evaluate security-specific market data when determining whether a market is active.
|
•
|
Level 2.
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in less active markets, or model-derived valuations. All significant inputs used in our valuations, such as discounted cash flows, are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. We use LIBOR-based yield curves, currency spot and forward rates, and credit ratings as significant inputs in our valuations. Level 2 inputs also include non-binding market consensus prices as well as quoted prices that were adjusted for security-specific restrictions. When we use non-binding market consensus prices, we corroborate them with quoted market prices for similar instruments or compare them to output from internally developed pricing models such as discounted cash flow models.
|
•
|
Level 3.
Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. We monitor and review the inputs and results of these valuation models to help ensure the fair value measurements are reasonable and consistent with market experience in similar asset classes. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data.
|
•
|
Marketable debt instruments
when the interest rate and foreign currency risks are not hedged at the inception of the investment or when our criteria for designation as trading assets are not met. We record the interest income and realized gains or losses on the sale of these instruments in interest and other, net.
|
•
|
Marketable equity securities
when there is no plan to sell or hedge the investment at the time of original classification. We acquire these equity securities to promote business and strategic objectives. We record the realized gains or losses on the sale or exchange of marketable equity securities in gains (losses) on equity investments, net.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
67
|
•
|
For available-for-sale debt securities
, we consider whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, or whether recovery of the entire amortized cost basis of the security is unlikely because a credit loss exists. When we do not expect to recover the entire amortized cost basis of the security, we separate other-than-temporary impairments into amounts representing credit losses, which are recognized in interest and other, net, and amounts not related to credit losses, which are recognized in other comprehensive income (loss).
|
•
|
For marketable equity securities
, we consider the severity and duration of the decline in fair value below cost and our ability and intent to hold the security for a sufficient period of time to allow for recovery of value in the foreseeable future based on the financial health of, and business outlook for, the investee.
|
•
|
For non-marketable equity investments
, we consider the severity and duration of the impairment, the investee's financial condition and business outlook, industry and sector performance, market for technology, operational and financing cash flow factors, and changes in the investee's credit rating, among other qualitative and quantitative criteria. Impairments of non-marketable equity investments were
$555 million
in
2017
(
$184 million
in
2016
and
$166 million
in
2015
).
|
•
|
Variability in the U.S.-dollar equivalent of non-U.S.-dollar-denominated cash flows associated with our forecasted operating and capital purchases spending; and
|
•
|
Coupon and principal payments for our non-U.S.-dollar-denominated indebtedness.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
68
|
•
|
intangible assets, including the valuation methodology, estimations of future cash flows, discount rates, market segment growth rates, our assumed market segment share, as well as the estimated useful life of intangible assets;
|
•
|
deferred tax assets and liabilities, uncertain tax positions, and tax-related valuation allowances, which are initially estimated as of the acquisition date;
|
•
|
inventory; property, plant and equipment; pre-existing liabilities or legal claims; deferred revenue; and contingent consideration, each as may be applicable; and
|
•
|
goodwill as measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
69
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
70
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
71
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
72
|
ACCOUNTING STANDARDS NOT YET ADOPTED
|
||
Standard/Description
|
Effective Date and Adoption Considerations
|
Effect on Financial Statements or Other Significant Matters
|
Compensation - Retirement Benefits
- Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
. This amended standard was issued to provide additional guidance on the presentation of net benefit cost in the income statement and on the components eligible for capitalization in assets. The service cost component of the net periodic benefit cost will continue to be reported within operating income on the consolidated income statement. All other non-service components are required to be presented separately outside operating income, and only service costs will be eligible for inventory capitalization.
|
Effective in the first quarter of 2018.
Changes to the presentation of benefit costs are required to be adopted retrospectively, while changes to the capitalization of service costs into inventories are required to be adopted prospectively. The standard permits, as a practical expedient, use of the amounts disclosed in the Retirement Benefit Plans footnote for the prior comparative periods as the estimation basis for applying the retrospective presentation requirement.
|
We expect the adoption of the amended standard to result in the reclassification of approximately $115 million from non-service components above the subtotal of operating income to interest and other, net, for the year ended December 30, 2017 ($260 million for the year ended December 31, 2016).
|
Leases
. This new lease accounting standard requires that we recognize leased assets and corresponding liabilities on the balance sheet and provide enhanced disclosure of lease activity.
|
Effective in the first quarter of 2019.
We plan to adopt the new standard using a modified retrospective transition approach.
|
We expect the valuation of our right-of-use assets and lease liabilities, previously described as operating leases, to approximate the present value of our forecasted future lease commitments. We are currently implementing process and system changes in order to comply with the measurement and disclosure requirements.
|
|
|
|
|
Adjustments from
|
|
|
||||||||||
Fiscal Year Beginning
(In Millions)
|
|
Dec 30, 2017
|
|
Revenue Standard
|
|
Financial Instruments Update
|
|
Dec 31, 2017
As Adjusted
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable, net
|
|
$
|
5,607
|
|
|
$
|
(530
|
)
|
|
$
|
—
|
|
|
$
|
5,077
|
|
Inventories
|
|
$
|
6,983
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
7,030
|
|
Other current assets
|
|
$
|
2,908
|
|
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
2,972
|
|
Equity investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,579
|
|
|
$
|
8,579
|
|
Marketable equity securities
|
|
$
|
4,192
|
|
|
$
|
—
|
|
|
$
|
(4,192
|
)
|
|
$
|
—
|
|
Other long-term assets
|
|
$
|
7,602
|
|
|
$
|
—
|
|
|
$
|
(4,387
|
)
|
|
$
|
3,215
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
|
$
|
2,928
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
2,983
|
|
Deferred income
|
|
$
|
1,656
|
|
|
$
|
(1,356
|
)
|
|
$
|
—
|
|
|
$
|
300
|
|
Other accrued liabilities
|
|
$
|
7,535
|
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
7,561
|
|
Long-term deferred tax liabilities
|
|
$
|
3,046
|
|
|
$
|
191
|
|
|
$
|
—
|
|
|
$
|
3,237
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive income (loss)
|
|
$
|
862
|
|
|
$
|
—
|
|
|
$
|
(1,745
|
)
|
|
$
|
(883
|
)
|
Retained earnings
|
|
$
|
42,083
|
|
|
$
|
665
|
|
|
$
|
1,745
|
|
|
$
|
44,493
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
73
|
•
Client Computing Group (CCG)
|
•
Data Center Group (DCG)
|
•
Internet of Things Group (IOTG)
|
•
Non-Volatile Memory Solutions Group (NSG)
|
•
Programmable Solutions Group (PSG)
|
•
All other
|
•
|
results of operations from non-reportable segments not otherwise presented;
|
•
|
historical results of operations from divested businesses;
|
•
|
results of operations of start-up businesses that support our initiatives, including our foundry business;
|
•
|
amounts included within restructuring and other charges;
|
•
|
a portion of employee benefits, compensation, and other expenses not allocated to the operating segments; and
|
•
|
acquisition-related costs, including amortization and any impairment of acquisition-related intangibles and goodwill.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
74
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Net revenue:
|
|
|
|
|
|
|
||||||
Client Computing Group
|
|
|
|
|
|
|
||||||
Platform
|
|
$
|
31,226
|
|
|
$
|
30,751
|
|
|
$
|
30,680
|
|
Adjacent
|
|
2,777
|
|
|
2,157
|
|
|
1,539
|
|
|||
|
|
34,003
|
|
|
32,908
|
|
|
32,219
|
|
|||
Data Center Group
|
|
|
|
|
|
|
||||||
Platform
|
|
17,439
|
|
|
15,895
|
|
|
14,856
|
|
|||
Adjacent
|
|
1,625
|
|
|
1,341
|
|
|
1,125
|
|
|||
|
|
19,064
|
|
|
17,236
|
|
|
15,981
|
|
|||
Internet of Things Group
|
|
|
|
|
|
|
||||||
Platform
|
|
2,645
|
|
|
2,290
|
|
|
1,976
|
|
|||
Adjacent
|
|
524
|
|
|
348
|
|
|
322
|
|
|||
|
|
3,169
|
|
|
2,638
|
|
|
2,298
|
|
|||
Non-Volatile Memory Solutions Group
|
|
3,520
|
|
|
2,576
|
|
|
2,597
|
|
|||
Programmable Solutions Group
|
|
1,902
|
|
|
1,669
|
|
|
—
|
|
|||
All other
|
|
1,103
|
|
|
2,360
|
|
|
2,260
|
|
|||
Total net revenue
|
|
$
|
62,761
|
|
|
$
|
59,387
|
|
|
$
|
55,355
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
|
||||||
Client Computing Group
|
|
$
|
12,919
|
|
|
$
|
10,646
|
|
|
$
|
8,166
|
|
Data Center Group
|
|
8,395
|
|
|
7,520
|
|
|
7,847
|
|
|||
Internet of Things Group
|
|
650
|
|
|
585
|
|
|
515
|
|
|||
Non-Volatile Memory Solutions Group
|
|
(260
|
)
|
|
(544
|
)
|
|
239
|
|
|||
Programmable Solutions Group
|
|
458
|
|
|
(104
|
)
|
|
—
|
|
|||
All other
|
|
(4,226
|
)
|
|
(5,229
|
)
|
|
(2,765
|
)
|
|||
Total operating income
|
|
$
|
17,936
|
|
|
$
|
12,874
|
|
|
$
|
14,002
|
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Platform revenue
|
|
|
|
|
|
|
||||||
Desktop platform
|
|
$
|
11,647
|
|
|
$
|
12,371
|
|
|
$
|
12,754
|
|
Notebook platform
|
|
19,414
|
|
|
18,203
|
|
|
17,945
|
|
|||
DCG platform
|
|
17,439
|
|
|
15,895
|
|
|
14,856
|
|
|||
Other platform
1
|
|
2,810
|
|
|
2,467
|
|
|
1,957
|
|
|||
|
|
51,310
|
|
|
48,936
|
|
|
47,512
|
|
|||
|
|
|
|
|
|
|
||||||
Adjacent revenue
2
|
|
10,917
|
|
|
8,290
|
|
|
5,858
|
|
|||
ISecG divested business
|
|
534
|
|
|
2,161
|
|
|
1,985
|
|
|||
Total revenue
|
|
$
|
62,761
|
|
|
$
|
59,387
|
|
|
$
|
55,355
|
|
1
|
Includes our tablet, phone, service provider, and IOTG platform revenue.
|
2
|
Includes all of our non-platform products for CCG, DCG, and IOTG like modem, ethernet, and silicon photonic, as well as NSG, PSG, and Mobileye products.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
75
|
Years Ended
(In Millions)
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
China (including Hong Kong)
|
|
$
|
14,796
|
|
|
$
|
13,977
|
|
|
$
|
11,679
|
|
Singapore
|
|
14,285
|
|
|
12,780
|
|
|
11,544
|
|
|||
United States
|
|
12,543
|
|
|
12,957
|
|
|
11,121
|
|
|||
Taiwan
|
|
10,518
|
|
|
9,953
|
|
|
10,661
|
|
|||
Other countries
|
|
10,619
|
|
|
9,720
|
|
|
10,350
|
|
|||
Total net revenue
|
|
$
|
62,761
|
|
|
$
|
59,387
|
|
|
$
|
55,355
|
|
Years Ended
(In Millions, Except Per Share Amounts) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Net income available to common stockholders
|
|
$
|
9,601
|
|
|
$
|
10,316
|
|
|
$
|
11,420
|
|
Weighted average shares of common stock outstanding—basic
|
|
4,701
|
|
|
4,730
|
|
|
4,742
|
|
|||
Dilutive effect of employee incentive plans
|
|
47
|
|
|
53
|
|
|
64
|
|
|||
Dilutive effect of convertible debt
|
|
87
|
|
|
92
|
|
|
88
|
|
|||
Weighted average shares of common stock outstanding—diluted
|
|
4,835
|
|
|
4,875
|
|
|
4,894
|
|
|||
Earnings per share - Basic
|
|
$
|
2.04
|
|
|
$
|
2.18
|
|
|
$
|
2.41
|
|
Earnings per share - Diluted
|
|
$
|
1.99
|
|
|
$
|
2.12
|
|
|
$
|
2.33
|
|
(In Millions)
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Raw materials
|
|
$
|
1,098
|
|
|
$
|
695
|
|
Work in process
|
|
3,893
|
|
|
3,190
|
|
||
Finished goods
|
|
1,992
|
|
|
1,668
|
|
||
Total inventories
|
|
$
|
6,983
|
|
|
$
|
5,553
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
76
|
(In Millions)
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Land and buildings
|
|
$
|
27,391
|
|
|
$
|
26,627
|
|
Machinery and equipment
|
|
57,192
|
|
|
52,608
|
|
||
Construction in progress
|
|
15,812
|
|
|
10,870
|
|
||
Total property, plant and equipment, gross
|
|
100,395
|
|
|
90,105
|
|
||
Less:
accumulated depreciation
|
|
59,286
|
|
|
53,934
|
|
||
Total property, plant and equipment, net
|
|
$
|
41,109
|
|
|
$
|
36,171
|
|
(In Millions)
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
United States
|
|
$
|
24,459
|
|
|
$
|
23,598
|
|
|
$
|
22,611
|
|
Israel
|
|
6,501
|
|
|
3,923
|
|
|
1,661
|
|
|||
China
|
|
4,275
|
|
|
2,306
|
|
|
537
|
|
|||
Ireland
|
|
3,938
|
|
|
4,865
|
|
|
5,789
|
|
|||
Other countries
|
|
1,936
|
|
|
1,479
|
|
|
1,260
|
|
|||
Total property, plant and equipment, net
|
|
$
|
41,109
|
|
|
$
|
36,171
|
|
|
$
|
31,858
|
|
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Deferred income on shipments of components to distributors
|
|
$
|
1,320
|
|
|
$
|
1,475
|
|
Deferred income from software, services, and other
|
|
336
|
|
|
243
|
|
||
Current deferred income
|
|
$
|
1,656
|
|
|
$
|
1,718
|
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Share of equity method investee losses, net
|
|
$
|
(232
|
)
|
|
$
|
(38
|
)
|
|
$
|
(95
|
)
|
Impairments
|
|
(833
|
)
|
|
(187
|
)
|
|
(185
|
)
|
|||
Gains on sales, net
|
|
3,499
|
|
|
562
|
|
|
145
|
|
|||
Dividends
|
|
68
|
|
|
74
|
|
|
52
|
|
|||
Other, net
|
|
149
|
|
|
95
|
|
|
398
|
|
|||
Total gains (losses) on equity investments, net
|
|
$
|
2,651
|
|
|
$
|
506
|
|
|
$
|
315
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
77
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Interest income
|
|
$
|
441
|
|
|
$
|
222
|
|
|
$
|
124
|
|
Interest expense
|
|
(646
|
)
|
|
(733
|
)
|
|
(337
|
)
|
|||
Other, net
|
|
(30
|
)
|
|
67
|
|
|
108
|
|
|||
Total interest and other, net
|
|
$
|
(235
|
)
|
|
$
|
(444
|
)
|
|
$
|
(105
|
)
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
2016 Restructuring Program
|
|
$
|
135
|
|
|
$
|
1,823
|
|
|
$
|
—
|
|
2015 and 2013 Restructuring Programs
|
|
—
|
|
|
—
|
|
|
354
|
|
|||
ISecG separation costs and other charges
|
|
249
|
|
|
63
|
|
|
—
|
|
|||
Total restructuring and other charges
|
|
$
|
384
|
|
|
$
|
1,886
|
|
|
$
|
354
|
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Employee severance and benefit arrangements
|
|
$
|
70
|
|
|
$
|
1,737
|
|
Pension settlement charges
|
|
25
|
|
|
57
|
|
||
Asset impairment and other charges
|
|
40
|
|
|
29
|
|
||
Total restructuring and other charges
|
|
$
|
135
|
|
|
$
|
1,823
|
|
(In Millions)
|
|
Employee Severance and Benefits
|
|
Asset Impairments and Other
|
|
Total
|
||||||
Accrued restructuring balance as of December 26, 2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additional accruals
|
|
1,556
|
|
|
29
|
|
|
1,585
|
|
|||
Adjustments
|
|
92
|
|
|
—
|
|
|
92
|
|
|||
Cash payments
|
|
(1,063
|
)
|
|
—
|
|
|
(1,063
|
)
|
|||
Non-cash settlements
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|||
Accrued restructuring balance as of December 31, 2016
|
|
585
|
|
|
10
|
|
|
595
|
|
|||
Additional accruals
|
|
—
|
|
|
40
|
|
|
40
|
|
|||
Adjustments
|
|
70
|
|
|
—
|
|
|
70
|
|
|||
Cash payments
|
|
(352
|
)
|
|
(25
|
)
|
|
(377
|
)
|
|||
Non-cash settlements
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||
Accrued restructuring balance as of December 30, 2017
|
|
$
|
303
|
|
|
$
|
22
|
|
|
$
|
325
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
78
|
•
|
Recognition of the transition tax imposed on undistributed earnings from non-U.S. subsidiaries.
We have previously asserted an intent to indefinitely reinvest our earnings and other basis differences in operations outside the U.S., and have not recognized U.S. deferred income taxes. Tax Reform imposes a one-time transition tax on all of our previously untaxed historical non-U.S. earnings and profits at various tax rates. We recognized a provisional tax expense of
$6.1 billion
in the fourth quarter of 2017. The move to a participation exemption system allows us to make distributions of non-U.S. earnings to the U.S. without incurring additional U.S. tax, however these distributions may be subject to applicable non-U.S. taxation.
|
•
|
Remeasurement of deferred income taxes using the newly enacted statutory tax rate of
21.0%
.
The new statutory U.S. federal income tax rate is effective for the 2018 tax year. We remeasured our deferred tax assets and liabilities, including associated valuation allowances, with the new tax rate. We have recognized a provisional tax benefit of
$676 million
in the fourth quarter of 2017.
|
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Income before taxes:
|
|
|
|
|
|
|
||||||
U.S.
|
|
$
|
11,141
|
|
|
$
|
6,957
|
|
|
$
|
8,800
|
|
Non-U.S.
|
|
9,211
|
|
|
5,979
|
|
|
5,412
|
|
|||
Total income before taxes
|
|
20,352
|
|
|
12,936
|
|
|
14,212
|
|
|||
Provision for taxes:
|
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
10,207
|
|
|
1,319
|
|
|
2,828
|
|
|||
State
|
|
27
|
|
|
13
|
|
|
40
|
|
|||
Non-U.S.
|
|
899
|
|
|
756
|
|
|
842
|
|
|||
Total current provision for taxes
|
|
11,133
|
|
|
2,088
|
|
|
3,710
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(220
|
)
|
|
658
|
|
|
(862
|
)
|
|||
Other
|
|
(162
|
)
|
|
(126
|
)
|
|
(56
|
)
|
|||
Total deferred provision for taxes
|
|
(382
|
)
|
|
532
|
|
|
(918
|
)
|
|||
Total provision for taxes
|
|
$
|
10,751
|
|
|
$
|
2,620
|
|
|
$
|
2,792
|
|
Effective tax rate
|
|
52.8
|
%
|
|
20.3
|
%
|
|
19.6
|
%
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
79
|
Years Ended
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
|||
Statutory federal income tax rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increase (reduction) in rate resulting from:
|
|
|
|
|
|
|
|||
Non-U.S. income taxed at different rates
|
|
(7.6
|
)
|
|
(11.7
|
)
|
|
(7.9
|
)
|
Research and development tax credits
|
|
(2.3
|
)
|
|
(2.3
|
)
|
|
(1.7
|
)
|
Domestic manufacturing deduction benefit
|
|
(1.3
|
)
|
|
(1.4
|
)
|
|
(2.0
|
)
|
Settlements, effective settlements, and related remeasurements
|
|
—
|
|
|
(0.1
|
)
|
|
(2.9
|
)
|
Tax Reform
|
|
26.8
|
|
|
—
|
|
|
—
|
|
ISecG divestiture
|
|
3.3
|
|
|
—
|
|
|
—
|
|
Other
|
|
(1.1
|
)
|
|
0.8
|
|
|
(0.9
|
)
|
Effective tax rate
|
|
52.8
|
%
|
|
20.3
|
%
|
|
19.6
|
%
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
80
|
(In Millions)
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Deferred tax assets:
|
|
|
|
|
||||
Accrued compensation and other benefits
|
|
$
|
711
|
|
|
$
|
1,182
|
|
Share-based compensation
|
|
241
|
|
|
373
|
|
||
Deferred income
|
|
211
|
|
|
596
|
|
||
Inventory
|
|
675
|
|
|
1,044
|
|
||
State credits and net operating losses
|
|
1,081
|
|
|
846
|
|
||
Other, net
|
|
887
|
|
|
1,187
|
|
||
Gross deferred tax assets
|
|
3,806
|
|
|
5,228
|
|
||
Valuation allowance
|
|
(1,171
|
)
|
|
(953
|
)
|
||
Total deferred tax assets
|
|
2,635
|
|
|
4,275
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Property, plant and equipment
|
|
(943
|
)
|
|
(1,574
|
)
|
||
Licenses and intangibles
|
|
(881
|
)
|
|
(1,036
|
)
|
||
Convertible debt
|
|
(374
|
)
|
|
(1,098
|
)
|
||
Unrealized gains on investments and derivatives
|
|
(421
|
)
|
|
(940
|
)
|
||
Transition tax
|
|
(1,850
|
)
|
|
—
|
|
||
Other, net
|
|
(373
|
)
|
|
(450
|
)
|
||
Total deferred tax liabilities
|
|
(4,842
|
)
|
|
(5,098
|
)
|
||
Net deferred tax assets (liabilities)
|
|
(2,207
|
)
|
|
(823
|
)
|
||
|
|
|
|
|
||||
Reported as:
|
|
|
|
|
||||
Deferred tax assets
|
|
840
|
|
|
907
|
|
||
Deferred tax liabilities
|
|
(3,046
|
)
|
|
(1,730
|
)
|
||
Net deferred tax assets (liabilities)
|
|
$
|
(2,207
|
)
|
|
$
|
(823
|
)
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
81
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
(In Millions) |
|
Adjusted
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Adjusted
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||||||||||
Corporate debt
|
|
$
|
2,294
|
|
|
$
|
4
|
|
|
$
|
(13
|
)
|
|
$
|
2,285
|
|
|
$
|
3,847
|
|
|
$
|
4
|
|
|
$
|
(14
|
)
|
|
$
|
3,837
|
|
Financial institution instruments
|
|
3,387
|
|
|
3
|
|
|
(9
|
)
|
|
3,381
|
|
|
6,098
|
|
|
5
|
|
|
(11
|
)
|
|
6,092
|
|
||||||||
Government debt
|
|
961
|
|
|
—
|
|
|
(6
|
)
|
|
955
|
|
|
1,581
|
|
|
—
|
|
|
(8
|
)
|
|
1,573
|
|
||||||||
Marketable equity securities
|
|
1,507
|
|
|
2,686
|
|
|
(1
|
)
|
|
4,192
|
|
|
2,818
|
|
|
3,363
|
|
|
(1
|
)
|
|
6,180
|
|
||||||||
Total available-for-sale investments
|
|
$
|
8,149
|
|
|
$
|
2,693
|
|
|
$
|
(29
|
)
|
|
$
|
10,813
|
|
|
$
|
14,344
|
|
|
$
|
3,372
|
|
|
$
|
(34
|
)
|
|
$
|
17,682
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
82
|
(In Millions)
|
|
Fair Value
|
||
Due in 1 year or less
|
|
$
|
2,573
|
|
Due in 1–2 years
|
|
1,776
|
|
|
Due in 2–5 years
|
|
1,866
|
|
|
Due after 5 years
|
|
71
|
|
|
Instruments not due at a single maturity date
|
|
335
|
|
|
Total
|
|
$
|
6,621
|
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||||
(Dollars In Millions)
|
|
Carrying
Value
|
|
Ownership
Percentage
|
|
Carrying
Value
|
|
Ownership
Percentage
|
||||||
IM Flash Technologies, LLC
|
|
$
|
1,505
|
|
|
49
|
%
|
|
$
|
849
|
|
|
49
|
%
|
McAfee
|
|
153
|
|
|
49
|
%
|
|
n/a
|
|
|
n/a
|
|
||
Cloudera, Inc.
|
|
n/a
|
|
|
n/a
|
|
|
225
|
|
|
16
|
%
|
||
Other equity method investments
|
|
229
|
|
|
|
|
254
|
|
|
|
||||
Total
|
|
$
|
1,887
|
|
|
|
|
$
|
1,328
|
|
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
83
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
84
|
|
|
Fair Value
(In Millions) |
|
Weighted Average
Estimated Useful Life (In Years) |
||
Developed technology
|
|
$
|
2,346
|
|
|
9
|
Customer relationships
|
|
713
|
|
|
12
|
|
Brands
|
|
64
|
|
|
10
|
|
Identified intangible assets subject to amortization
|
|
3,123
|
|
|
|
|
In-process research and development
|
|
1,359
|
|
|
|
|
Identified intangible assets not subject to amortization
|
|
1,359
|
|
|
|
|
Total identified intangible assets
|
|
$
|
4,482
|
|
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
85
|
|
|
Fair Value
(In Millions)
|
|
Weighted Average Estimated Useful Life
(In Years)
|
||
Developed technology
|
|
$
|
5,757
|
|
|
9
|
Customer relationships
|
|
1,121
|
|
|
12
|
|
Brands
|
|
87
|
|
|
6
|
|
Identified intangible assets subject to amortization
|
|
6,965
|
|
|
|
|
In-process research and development
|
|
601
|
|
|
|
|
Identified intangible assets not subject to amortization
|
|
601
|
|
|
|
|
Total identified intangible assets
|
|
$
|
7,566
|
|
|
|
(In Millions)
|
|
Apr 1,
2017 |
||
Accounts receivable
|
|
$
|
317
|
|
Goodwill
|
|
3,601
|
|
|
Identified intangible assets
|
|
965
|
|
|
Other assets
|
|
276
|
|
|
Total assets
|
|
$
|
5,159
|
|
|
|
|
||
|
|
|
||
Deferred income
|
|
$
|
1,553
|
|
Other liabilities
|
|
276
|
|
|
Total liabilities
|
|
$
|
1,829
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
86
|
(In Millions) |
|
Dec 31,
2016 |
|
Acquisitions
|
|
Transfers
|
|
Other
|
|
Dec 30,
2017 |
||||||||||
Client Computing Group
|
|
$
|
4,356
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,356
|
|
Data Center Group
|
|
5,412
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
5,421
|
|
|||||
Internet of Things Group
|
|
1,123
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
1,126
|
|
|||||
Programmable Solutions Group
|
|
2,490
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,490
|
|
|||||
All other
|
|
718
|
|
|
10,278
|
|
|
—
|
|
|
—
|
|
|
10,996
|
|
|||||
Total
|
|
$
|
14,099
|
|
|
$
|
10,290
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,389
|
|
(In Millions) |
|
Dec 26,
2015 |
|
Acquisitions
|
|
Transfers
|
|
Other
|
|
Dec 31,
2016 |
||||||||||
Client Computing Group
|
|
$
|
4,078
|
|
|
$
|
65
|
|
|
$
|
213
|
|
|
$
|
—
|
|
|
$
|
4,356
|
|
Data Center Group
|
|
2,404
|
|
|
2,831
|
|
|
177
|
|
|
—
|
|
|
5,412
|
|
|||||
Internet of Things Group
|
|
428
|
|
|
659
|
|
|
36
|
|
|
—
|
|
|
1,123
|
|
|||||
Intel Security Group
|
|
3,599
|
|
|
—
|
|
|
—
|
|
|
(3,599
|
)
|
|
—
|
|
|||||
Software and Services Group
|
|
441
|
|
|
—
|
|
|
(441
|
)
|
|
—
|
|
|
—
|
|
|||||
Programmable Solutions Group
|
|
—
|
|
|
2,490
|
|
|
—
|
|
|
—
|
|
|
2,490
|
|
|||||
All other
|
|
382
|
|
|
321
|
|
|
15
|
|
|
—
|
|
|
718
|
|
|||||
Total
|
|
$
|
11,332
|
|
|
$
|
6,366
|
|
|
$
|
—
|
|
|
$
|
(3,599
|
)
|
|
$
|
14,099
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
87
|
|
|
December 30, 2017
|
||||||||||
(In Millions)
|
|
Gross
Assets
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Acquisition-related developed technology
|
|
$
|
8,912
|
|
|
$
|
(1,922
|
)
|
|
$
|
6,990
|
|
Acquisition-related customer relationships
|
|
2,052
|
|
|
(313
|
)
|
|
1,739
|
|
|||
Acquisition-related brands
|
|
143
|
|
|
(29
|
)
|
|
114
|
|
|||
Licensed technology and patents
|
|
3,104
|
|
|
(1,370
|
)
|
|
1,734
|
|
|||
Identified intangible assets subject to amortization
|
|
14,211
|
|
|
(3,634
|
)
|
|
10,577
|
|
|||
In-process research and development
|
|
2,168
|
|
|
—
|
|
|
2,168
|
|
|||
Identified intangible assets not subject to amortization
|
|
2,168
|
|
|
—
|
|
|
2,168
|
|
|||
Total identified intangible assets
|
|
$
|
16,379
|
|
|
$
|
(3,634
|
)
|
|
$
|
12,745
|
|
|
|
December 31, 2016
|
||||||||||
(In Millions)
|
|
Gross
Assets
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Acquisition-related developed technology
|
|
$
|
7,405
|
|
|
$
|
(1,836
|
)
|
|
$
|
5,569
|
|
Acquisition-related customer relationships
|
|
1,449
|
|
|
(260
|
)
|
|
1,189
|
|
|||
Acquisition-related brands
|
|
87
|
|
|
(21
|
)
|
|
66
|
|
|||
Licensed technology and patents
|
|
3,285
|
|
|
(1,423
|
)
|
|
1,862
|
|
|||
Identified intangible assets subject to amortization
|
|
12,226
|
|
|
(3,540
|
)
|
|
8,686
|
|
|||
In-process research and development
|
|
808
|
|
|
—
|
|
|
808
|
|
|||
Identified intangible assets not subject to amortization
|
|
808
|
|
|
—
|
|
|
808
|
|
|||
Total identified intangible assets
|
|
$
|
13,034
|
|
|
$
|
(3,540
|
)
|
|
$
|
9,494
|
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||
|
|
Gross
Assets
(In Millions)
|
|
Estimated Useful Life
(In Years)
|
|
Gross
Assets
(In Millions)
|
|
Estimated Useful Life
(In Years)
|
||||
Acquisition-related developed technology
|
|
$
|
2,346
|
|
|
9
|
|
$
|
5,842
|
|
|
9
|
Acquisition-related customer relationships
|
|
$
|
713
|
|
|
12
|
|
$
|
1,148
|
|
|
12
|
Acquisition-related brands
|
|
$
|
64
|
|
|
10
|
|
$
|
87
|
|
|
6
|
Licensed technology and patents
|
|
$
|
162
|
|
|
7
|
|
$
|
342
|
|
|
12
|
(In Years)
|
|
Estimated
Useful Life Range
|
||
Acquisition-related developed technology
|
|
5
|
–
|
9
|
Acquisition-related customer relationships
|
|
7
|
–
|
12
|
Acquisition-related brands
|
|
6
|
–
|
10
|
Licensed technology and patents
|
|
2
|
–
|
17
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
88
|
Years Ended
(In Millions) |
|
Location
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Acquisition-related developed technology
|
|
Cost of sales
|
|
$
|
912
|
|
|
$
|
937
|
|
|
$
|
343
|
|
Acquisition-related customer relationships
|
|
Amortization of acquisition-related intangibles
|
|
161
|
|
|
270
|
|
|
258
|
|
|||
Acquisition-related brands
|
|
Amortization of acquisition-related intangibles
|
|
16
|
|
|
24
|
|
|
7
|
|
|||
Licensed technology and patents
|
|
Cost of sales
|
|
288
|
|
|
293
|
|
|
282
|
|
|||
Total amortization expenses
|
|
|
|
$
|
1,377
|
|
|
$
|
1,524
|
|
|
$
|
890
|
|
(In Millions)
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
||||||||||
Acquisition-related developed technology
|
|
$
|
1,045
|
|
|
$
|
1,043
|
|
|
$
|
1,011
|
|
|
$
|
976
|
|
|
$
|
937
|
|
Acquisition-related customer relationships
|
|
181
|
|
|
180
|
|
|
179
|
|
|
179
|
|
|
171
|
|
|||||
Acquisition-related brands
|
|
20
|
|
|
20
|
|
|
20
|
|
|
20
|
|
|
6
|
|
|||||
Licensed technology and patents
|
|
256
|
|
|
243
|
|
|
211
|
|
|
195
|
|
|
190
|
|
|||||
Total future amortization expenses
|
|
$
|
1,502
|
|
|
$
|
1,486
|
|
|
$
|
1,421
|
|
|
$
|
1,370
|
|
|
$
|
1,304
|
|
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Equity method investments
|
|
$
|
1,887
|
|
|
$
|
1,328
|
|
Non-marketable cost method investments
|
|
2,613
|
|
|
3,098
|
|
||
Non-current deferred tax assets
|
|
840
|
|
|
907
|
|
||
Pre-payments for property, plant and equipment
|
|
714
|
|
|
347
|
|
||
Loans receivable
|
|
860
|
|
|
236
|
|
||
Other
|
|
688
|
|
|
1,243
|
|
||
Total other long-term assets
|
|
$
|
7,602
|
|
|
$
|
7,159
|
|
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Drafts payable
|
|
$
|
37
|
|
|
$
|
25
|
|
Current portion of long-term debt
|
|
1,739
|
|
|
4,609
|
|
||
Total short-term debt
|
|
$
|
1,776
|
|
|
$
|
4,634
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
89
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
(In Millions)
|
|
Effective Interest Rate
|
|
Amount
|
|
Amount
|
||||
Floating-rate senior notes:
|
|
|
|
|
|
|
||||
Three-month LIBOR plus 0.08%, due May 2020
|
|
1.40%
|
|
$
|
700
|
|
|
$
|
—
|
|
Three-month LIBOR plus 0.35%, due May 2022
|
|
1.66%
|
|
800
|
|
|
—
|
|
||
Fixed-rate senior notes:
|
|
|
|
|
|
|
||||
1.75%, due May 2017
|
|
n/a
|
|
—
|
|
|
500
|
|
||
1.35%, due December 2017
|
|
n/a
|
|
—
|
|
|
3,000
|
|
||
2.50%, due November 2018
|
|
2.14%
|
|
600
|
|
|
600
|
|
||
3.25%, due December 2019
1
|
|
2.19%
|
|
194
|
|
|
180
|
|
||
1.85%, due May 2020
|
|
1.90%
|
|
1,000
|
|
|
—
|
|
||
2.45%, due July 2020
|
|
2.50%
|
|
1,750
|
|
|
1,750
|
|
||
1.70%, due May 2021
|
|
1.78%
|
|
500
|
|
|
500
|
|
||
3.30%, due October 2021
|
|
2.69%
|
|
2,000
|
|
|
2,000
|
|
||
2.35%, due May 2022
|
|
1.86%
|
|
750
|
|
|
—
|
|
||
3.10%, due July 2022
|
|
2.50%
|
|
1,000
|
|
|
1,000
|
|
||
4.00%, due December 2022
1
|
|
2.98%
|
|
428
|
|
|
396
|
|
||
2.70%, due December 2022
|
|
2.08%
|
|
1,500
|
|
|
1,500
|
|
||
4.10%, due November 2023
|
|
3.23%
|
|
400
|
|
|
400
|
|
||
2.88%, due May 2024
|
|
2.36%
|
|
1,250
|
|
|
—
|
|
||
2.70%, due June 2024
|
|
2.12%
|
|
600
|
|
|
—
|
|
||
3.70%, due July 2025
|
|
3.20%
|
|
2,250
|
|
|
2,250
|
|
||
2.60%, due May 2026
|
|
1.66%
|
|
1,000
|
|
|
1,000
|
|
||
3.15%, due May 2027
|
|
2.82%
|
|
1,000
|
|
|
—
|
|
||
4.00%, due December 2032
|
|
4.10%
|
|
750
|
|
|
750
|
|
||
4.80%, due October 2041
|
|
4.86%
|
|
802
|
|
|
1,500
|
|
||
4.25%, due December 2042
|
|
4.39%
|
|
567
|
|
|
925
|
|
||
4.90%, due July 2045
|
|
4.92%
|
|
772
|
|
|
2,000
|
|
||
4.90%, due August 2045
|
|
n/a
|
|
—
|
|
|
1,007
|
|
||
4.70%, due December 2045
|
|
2.49%
|
|
915
|
|
|
915
|
|
||
4.10%, due May 2046
|
|
4.12%
|
|
1,250
|
|
|
1,250
|
|
||
4.10%, due May 2047
|
|
4.13%
|
|
1,000
|
|
|
—
|
|
||
4.10%, due August 2047
|
|
2.15%
|
|
640
|
|
|
—
|
|
||
3.73%, due December 2047
|
|
3.74%
|
|
1,967
|
|
|
—
|
|
||
Junior subordinated convertible debentures:
|
|
|
|
|
|
|
||||
2.95%, due December 2035
|
|
n/a
|
|
—
|
|
|
1,600
|
|
||
3.25%, due August 2039
2
|
|
4.03%
|
|
2,000
|
|
|
2,000
|
|
||
Total senior notes and other borrowings
|
|
|
|
28,385
|
|
|
27,023
|
|
||
Unamortized premium/discount and issuance costs
|
|
|
|
(1,357
|
)
|
|
(1,581
|
)
|
||
Hedge accounting fair value adjustments
|
|
|
|
(252
|
)
|
|
(184
|
)
|
||
Long-term debt
|
|
|
|
26,776
|
|
|
25,258
|
|
||
Current portion of long-term debt
|
|
|
|
(1,739
|
)
|
|
(4,609
|
)
|
||
Total long-term debt
|
|
|
|
$
|
25,037
|
|
|
$
|
20,649
|
|
1
|
To manage foreign currency risk associated with the Australian-dollar-denominated notes issued in 2015, we entered into currency interest rate swaps with an aggregate notional amount of
$577 million
, which effectively converted these notes to U.S.-dollar-denominated notes. For further discussion on our currency interest rate swaps, see "
Note 17: Derivative Financial Instruments
." Principal and unamortized discount/issuance costs for the Australian-dollar-denominated notes in the table above were calculated using foreign currency exchange rates as of
December 30, 2017
and
December 31, 2016
.
|
2
|
Effective interest rate for the year ended
December 31, 2016
was
4.01%
.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
90
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
91
|
|
|
2009 Debentures
|
||||||
(In Millions, Except Per Share Amounts)
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Outstanding principal
|
|
$
|
2,000
|
|
|
$
|
2,000
|
|
Equity component (including temporary equity) carrying amount
|
|
$
|
613
|
|
|
$
|
613
|
|
Unamortized discount
1
|
|
$
|
866
|
|
|
$
|
882
|
|
Net debt carrying amount
|
|
$
|
1,134
|
|
|
$
|
1,118
|
|
Conversion rate (shares of common stock per $1,000 principal amount of debentures)
|
|
48.37
|
|
|
47.72
|
|
||
Effective conversion price (per share of common stock)
|
|
$
|
20.68
|
|
|
$
|
20.95
|
|
1
|
The unamortized discounts for the 2009 debentures are amortized over the remaining life of the debt.
|
(In Millions)
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023 and thereafter
|
|
Total
|
||||||||||||||
|
|
$
|
600
|
|
|
$
|
194
|
|
|
$
|
3,450
|
|
|
$
|
2,500
|
|
|
$
|
4,478
|
|
|
$
|
17,163
|
|
|
$
|
28,385
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
92
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
|
Fair Value Measured and
Recorded at Reporting Date Using
|
|
Total
|
|
Fair Value Measured and
Recorded at Reporting Date Using
|
|
Total
|
||||||||||||||||||||||||
(In Millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
498
|
|
|
$
|
—
|
|
|
$
|
498
|
|
Financial institution instruments
1
|
|
335
|
|
|
640
|
|
|
—
|
|
|
975
|
|
|
1,920
|
|
|
811
|
|
|
—
|
|
|
2,731
|
|
||||||||
Government debt
2
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
332
|
|
|
—
|
|
|
332
|
|
||||||||
Reverse repurchase agreements
|
|
—
|
|
|
1,399
|
|
|
—
|
|
|
1,399
|
|
|
—
|
|
|
768
|
|
|
—
|
|
|
768
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
—
|
|
|
672
|
|
|
3
|
|
|
675
|
|
|
—
|
|
|
1,332
|
|
|
6
|
|
|
1,338
|
|
||||||||
Financial institution instruments
1
|
|
—
|
|
|
1,009
|
|
|
—
|
|
|
1,009
|
|
|
—
|
|
|
1,603
|
|
|
—
|
|
|
1,603
|
|
||||||||
Government debt
2
|
|
—
|
|
|
130
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
284
|
|
|
—
|
|
|
284
|
|
||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
87
|
|
||||||||
Corporate debt
|
|
—
|
|
|
2,842
|
|
|
—
|
|
|
2,842
|
|
|
—
|
|
|
2,847
|
|
|
—
|
|
|
2,847
|
|
||||||||
Financial institution instruments
1
|
|
59
|
|
|
1,064
|
|
|
—
|
|
|
1,123
|
|
|
36
|
|
|
1,608
|
|
|
—
|
|
|
1,644
|
|
||||||||
Government debt
2
|
|
30
|
|
|
4,758
|
|
|
—
|
|
|
4,788
|
|
|
32
|
|
|
3,704
|
|
|
—
|
|
|
3,736
|
|
||||||||
Other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets
|
|
2
|
|
|
277
|
|
|
—
|
|
|
279
|
|
|
—
|
|
|
382
|
|
|
—
|
|
|
382
|
|
||||||||
Loans receivable
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
326
|
|
|
—
|
|
|
326
|
|
||||||||
Marketable equity securities
|
|
4,148
|
|
|
44
|
|
|
—
|
|
|
4,192
|
|
|
6,180
|
|
|
—
|
|
|
—
|
|
|
6,180
|
|
||||||||
Other long-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
—
|
|
|
1,576
|
|
|
4
|
|
|
1,580
|
|
|
—
|
|
|
1,995
|
|
|
6
|
|
|
2,001
|
|
||||||||
Financial institution instruments
1
|
|
—
|
|
|
1,397
|
|
|
—
|
|
|
1,397
|
|
|
—
|
|
|
1,758
|
|
|
—
|
|
|
1,758
|
|
||||||||
Government debt
2
|
|
—
|
|
|
735
|
|
|
—
|
|
|
735
|
|
|
—
|
|
|
957
|
|
|
—
|
|
|
957
|
|
||||||||
Other long-term assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets
|
|
—
|
|
|
77
|
|
|
7
|
|
|
84
|
|
|
—
|
|
|
31
|
|
|
9
|
|
|
40
|
|
||||||||
Loans receivable
|
|
—
|
|
|
610
|
|
|
—
|
|
|
610
|
|
|
—
|
|
|
236
|
|
|
—
|
|
|
236
|
|
||||||||
Total assets measured and recorded at fair value
|
|
4,574
|
|
|
17,382
|
|
|
14
|
|
|
21,970
|
|
|
8,168
|
|
|
19,559
|
|
|
21
|
|
|
27,748
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other accrued liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
—
|
|
|
454
|
|
|
—
|
|
|
454
|
|
|
—
|
|
|
371
|
|
|
—
|
|
|
371
|
|
||||||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
—
|
|
|
297
|
|
|
6
|
|
|
303
|
|
|
—
|
|
|
179
|
|
|
33
|
|
|
212
|
|
||||||||
Total liabilities measured and recorded at fair value
|
|
$
|
—
|
|
|
$
|
751
|
|
|
$
|
6
|
|
|
$
|
757
|
|
|
$
|
—
|
|
|
$
|
550
|
|
|
$
|
33
|
|
|
$
|
583
|
|
1
|
Level 1 investments consist of money market funds. Level 2 investments consist primarily of commercial paper, certificates of deposit, time deposits, and notes and bonds issued by financial institutions.
|
2
|
Level 1 investments consist primarily of U.S. Treasury securities. Level 2 investments consist primarily of U.S. Agency notes and non-U.S. government debt.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
93
|
(In Millions)
|
|
Unrealized Holding Gains (Losses) on Available-for-Sale Investments
|
|
Deferred Tax Asset Valuation Allowance
|
|
Unrealized Holding Gains (Losses) on Derivatives
|
|
Actuarial Valuation and Other Pension Expenses
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||||||||||
December 26, 2015
|
|
$
|
1,749
|
|
|
$
|
8
|
|
|
$
|
(266
|
)
|
|
$
|
(916
|
)
|
|
$
|
(515
|
)
|
|
$
|
60
|
|
Other comprehensive income (loss) before reclassifications
|
|
1,170
|
|
|
—
|
|
|
(26
|
)
|
|
(680
|
)
|
|
(4
|
)
|
|
460
|
|
||||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
(530
|
)
|
|
—
|
|
|
38
|
|
|
170
|
|
|
—
|
|
|
(322
|
)
|
||||||
Tax effects
|
|
(225
|
)
|
|
(8
|
)
|
|
(5
|
)
|
|
146
|
|
|
—
|
|
|
(92
|
)
|
||||||
Other comprehensive income (loss)
|
|
415
|
|
|
(8
|
)
|
|
7
|
|
|
(364
|
)
|
|
(4
|
)
|
|
46
|
|
||||||
December 31, 2016
|
|
2,164
|
|
|
—
|
|
|
(259
|
)
|
|
(1,280
|
)
|
|
(519
|
)
|
|
106
|
|
||||||
Other comprehensive income (loss) before reclassifications
|
|
2,760
|
|
|
—
|
|
|
605
|
|
|
275
|
|
|
3
|
|
|
3,643
|
|
||||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
(3,431
|
)
|
|
—
|
|
|
(69
|
)
|
|
103
|
|
|
507
|
|
|
(2,890
|
)
|
||||||
Tax effects
|
|
235
|
|
|
—
|
|
|
(171
|
)
|
|
(61
|
)
|
|
—
|
|
|
3
|
|
||||||
Other comprehensive income (loss)
|
|
(436
|
)
|
|
—
|
|
|
365
|
|
|
317
|
|
|
510
|
|
|
756
|
|
||||||
December 30, 2017
|
|
$
|
1,728
|
|
|
$
|
—
|
|
|
$
|
106
|
|
|
$
|
(963
|
)
|
|
$
|
(9
|
)
|
|
$
|
862
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
94
|
|
|
|
|
Income Before Taxes Impact for Years Ended
(In Millions)
|
||||||||||
Comprehensive Income Components
|
|
Location
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Unrealized holding gains (losses)
1
on available-for-sale investments:
|
|
|
|
|
|
|
|
|
||||||
|
|
Gains (losses) on equity investments, net
|
|
$
|
3,431
|
|
|
$
|
530
|
|
|
$
|
93
|
|
|
|
|
|
3,431
|
|
|
530
|
|
|
93
|
|
|||
Unrealized holding gains (losses) on derivatives:
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
|
Cost of sales
|
|
(65
|
)
|
|
(65
|
)
|
|
(290
|
)
|
|||
|
|
Research and development
|
|
45
|
|
|
7
|
|
|
(177
|
)
|
|||
|
|
Marketing, general and administrative
|
|
7
|
|
|
5
|
|
|
(46
|
)
|
|||
|
|
Gains (losses) on equity investments, net
|
|
57
|
|
|
11
|
|
|
—
|
|
|||
|
|
Interest and other, net
|
|
25
|
|
|
4
|
|
|
(9
|
)
|
|||
|
|
|
|
69
|
|
|
(38
|
)
|
|
(522
|
)
|
|||
Amortization of pension and postretirement benefit components:
|
|
|
|
|
|
|
|
|
||||||
Actuarial valuation and other pension expenses
|
|
|
|
(103
|
)
|
|
(170
|
)
|
|
(77
|
)
|
|||
|
|
|
|
(103
|
)
|
|
(170
|
)
|
|
(77
|
)
|
|||
Currency translation adjustment
|
|
Interest and other, net
|
|
(507
|
)
|
|
—
|
|
|
—
|
|
|||
Total amounts reclassified out of accumulated other comprehensive income (loss)
|
|
|
|
$
|
2,890
|
|
|
$
|
322
|
|
|
$
|
(506
|
)
|
1
|
We determine the cost of the investment sold based on an average cost basis at the individual security level.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
95
|
(In Millions)
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Foreign currency contracts
|
|
$
|
19,958
|
|
|
$
|
17,960
|
|
|
$
|
16,721
|
|
Interest rate contracts
|
|
16,823
|
|
|
14,228
|
|
|
8,812
|
|
|||
Other
|
|
1,636
|
|
|
1,340
|
|
|
1,122
|
|
|||
Total
|
|
$
|
38,417
|
|
|
$
|
33,528
|
|
|
$
|
26,655
|
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||||||
(In Millions)
|
|
Assets
1
|
|
Liabilities
2
|
|
Assets
1
|
|
Liabilities
2
|
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
3
|
|
$
|
283
|
|
|
$
|
32
|
|
|
$
|
21
|
|
|
$
|
252
|
|
Interest rate contracts
|
|
1
|
|
|
254
|
|
|
3
|
|
|
187
|
|
||||
Total derivatives designated as hedging instruments
|
|
284
|
|
|
286
|
|
|
24
|
|
|
439
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
3
|
|
52
|
|
|
447
|
|
|
374
|
|
|
114
|
|
||||
Interest rate contracts
|
|
18
|
|
|
24
|
|
|
15
|
|
|
30
|
|
||||
Other
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Total derivatives not designated as hedging instruments
|
|
79
|
|
|
471
|
|
|
398
|
|
|
144
|
|
||||
Total derivatives
|
|
$
|
363
|
|
|
$
|
757
|
|
|
$
|
422
|
|
|
$
|
583
|
|
1
|
Derivative assets are recorded as other assets, current and non-current.
|
2
|
Derivative liabilities are recorded as other liabilities, current and non-current.
|
3
|
The majority of these instruments mature within
12 months
.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
96
|
|
|
December 30, 2017
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
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
|
|
$
|
350
|
|
|
$
|
—
|
|
|
$
|
350
|
|
|
$
|
(206
|
)
|
|
$
|
(130
|
)
|
|
$
|
14
|
|
Reverse repurchase agreements
|
|
1,649
|
|
|
—
|
|
|
1,649
|
|
|
—
|
|
|
(1,649
|
)
|
|
—
|
|
||||||
Total assets
|
|
1,999
|
|
|
—
|
|
|
1,999
|
|
|
(206
|
)
|
|
(1,779
|
)
|
|
14
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities subject to master netting arrangements
|
|
745
|
|
|
—
|
|
|
745
|
|
|
(206
|
)
|
|
(504
|
)
|
|
35
|
|
||||||
Total liabilities
|
|
$
|
745
|
|
|
$
|
—
|
|
|
$
|
745
|
|
|
$
|
(206
|
)
|
|
$
|
(504
|
)
|
|
$
|
35
|
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
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
|
|
$
|
433
|
|
|
$
|
—
|
|
|
$
|
433
|
|
|
$
|
(368
|
)
|
|
$
|
(42
|
)
|
|
$
|
23
|
|
Reverse repurchase agreements
|
|
1,018
|
|
|
—
|
|
|
1,018
|
|
|
—
|
|
|
(1,018
|
)
|
|
—
|
|
||||||
Total assets
|
|
1,451
|
|
|
—
|
|
|
1,451
|
|
|
(368
|
)
|
|
(1,060
|
)
|
|
23
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities subject to master netting arrangements
|
|
588
|
|
|
—
|
|
|
588
|
|
|
(368
|
)
|
|
(201
|
)
|
|
19
|
|
||||||
Total liabilities
|
|
$
|
588
|
|
|
$
|
—
|
|
|
$
|
588
|
|
|
$
|
(368
|
)
|
|
$
|
(201
|
)
|
|
$
|
19
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
97
|
|
|
Gains (Losses)
Recognized in Statement of Income on
Derivatives
|
||||||||||
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Interest rate contracts
|
|
$
|
(68
|
)
|
|
$
|
(171
|
)
|
|
$
|
(13
|
)
|
Hedged items
|
|
68
|
|
|
171
|
|
|
13
|
|
|||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Line Item in the Consolidated Balance Sheet in Which the Hedged Item Is Included
|
|
Carrying Amount of the Hedged Item Asset/(Liabilities)
|
|
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities)
|
||||||||||||
Years Ended
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||||||
Long-Term Debt
|
|
$
|
(12,653
|
)
|
|
$
|
(8,879
|
)
|
|
$
|
252
|
|
|
$
|
184
|
|
Years Ended
(In Millions) |
|
Location of Gains (Losses)
Recognized in Income on Derivatives
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||
Foreign currency contracts
|
|
Interest and other, net
|
|
$
|
(547
|
)
|
|
$
|
388
|
|
|
$
|
296
|
|
Interest rate contracts
|
|
Interest and other, net
|
|
9
|
|
|
8
|
|
|
(8
|
)
|
|||
Other
|
|
Various
|
|
203
|
|
|
113
|
|
|
(38
|
)
|
|||
Total
|
|
$
|
(335
|
)
|
|
$
|
509
|
|
|
$
|
250
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
98
|
(In Millions)
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023-2027
|
||||||||||||
Postretirement Medical Benefits
|
|
$
|
28
|
|
|
$
|
29
|
|
|
$
|
30
|
|
|
$
|
31
|
|
|
$
|
32
|
|
|
$
|
179
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
99
|
(In Millions) |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||||
Changes in projected benefit obligation:
|
|
|
|
|
||||
Beginning projected benefit obligation
|
|
$
|
3,640
|
|
|
$
|
3,130
|
|
Service cost
|
|
84
|
|
|
130
|
|
||
Interest cost
|
|
117
|
|
|
106
|
|
||
Actuarial (gain) loss
|
|
24
|
|
|
575
|
|
||
Currency exchange rate changes
|
|
281
|
|
|
(80
|
)
|
||
Plan curtailments
|
|
(162
|
)
|
|
17
|
|
||
Plan settlements
|
|
(101
|
)
|
|
(202
|
)
|
||
Other
|
|
(41
|
)
|
|
(36
|
)
|
||
Ending projected benefit obligation
1
|
|
3,842
|
|
|
3,640
|
|
||
|
|
|
|
|
||||
Changes in fair value of plan assets:
|
|
|
|
|
||||
Beginning fair value of plan assets
|
|
1,696
|
|
|
1,638
|
|
||
Actual return on plan assets
|
|
136
|
|
|
81
|
|
||
Employer contributions
|
|
471
|
|
|
416
|
|
||
Currency exchange rate changes
|
|
124
|
|
|
(26
|
)
|
||
Plan settlements
|
|
(101
|
)
|
|
(202
|
)
|
||
Benefits paid to plan participants
|
|
(42
|
)
|
|
(84
|
)
|
||
Other
|
|
3
|
|
|
(127
|
)
|
||
Ending fair value of plan assets
2
|
|
2,287
|
|
|
1,696
|
|
||
|
|
|
|
|
||||
Amounts recognized in the consolidated balance sheet
3
|
|
$
|
1,555
|
|
|
$
|
1,944
|
|
|
|
|
|
|
||||
Accumulated other comprehensive loss (income), before tax
4
|
|
$
|
1,257
|
|
|
$
|
1,603
|
|
|
|
|
|
|
||||
Accumulated benefit obligation
5
|
|
$
|
3,423
|
|
|
$
|
2,976
|
|
1
|
The split between U.S. and non-U.S. in the projected benefit obligation was
38%
and
62%
, respectively, as of December 30, 2017 and December 31, 2016.
|
2
|
The split between the U.S. and non-U.S. in the fair value of plan assets was
49%
and
51%
, respectively, as of December 30, 2017 and
46%
and
54%
, respectively, as of December 31, 2016.
|
3
|
Substantially all
amounts recognized in the consolidated balance sheet are recorded in other long-term liabilities for all periods presented.
|
4
|
The split between U.S. and non-U.S. in the accumulated other comprehensive loss (income), before tax, was
38%
and
62%
, respectively, as of December 30, 2017 and
34%
and
66%
, respectively, as of December 31, 2016.
Substantially all
amounts recognized in accumulated other comprehensive loss (income) are attributable to net actuarial gain or loss.
|
5
|
All
plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets for all periods presented.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
100
|
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
||
Weighted average actuarial assumptions used to determine benefit obligations
|
|
|
|
|
||
Discount rate
|
|
3.0
|
%
|
|
3.2
|
%
|
Rate of compensation increase
|
|
3.3
|
%
|
|
3.6
|
%
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Weighted average actuarial assumptions used to determine costs
|
|
|
|
|
|
|
|||
Discount rate
|
|
3.2
|
%
|
|
3.3
|
%
|
|
3.1
|
%
|
Expected long-term rate of return on plan assets
|
|
4.6
|
%
|
|
5.5
|
%
|
|
5.9
|
%
|
Rate of compensation increase
|
|
3.6
|
%
|
|
3.8
|
%
|
|
3.9
|
%
|
|
|
December 30, 2017
|
|
Dec 31,
2016 |
||||||||||||||||
|
|
Fair Value Measured at Reporting Date Using
|
|
|
|
|
||||||||||||||
(In Millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Total
|
||||||||||
Equity securities
|
|
$
|
451
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
473
|
|
|
$
|
328
|
|
Fixed income
|
|
45
|
|
|
326
|
|
|
94
|
|
|
465
|
|
|
304
|
|
|||||
Other investments
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|||||
Assets measured by fair value hierarchy
|
|
$
|
515
|
|
|
$
|
326
|
|
|
$
|
116
|
|
|
$
|
957
|
|
|
$
|
632
|
|
Assets measured at net asset value
|
|
|
|
|
|
|
|
1,208
|
|
|
1,044
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
122
|
|
|
20
|
|
||||||||
Total pension plan assets at fair value
|
|
|
|
|
|
|
|
$
|
2,287
|
|
|
$
|
1,696
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
101
|
(In Millions)
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023-2027
|
||||||||||||
Pension benefits
|
|
$
|
125
|
|
|
$
|
117
|
|
|
$
|
115
|
|
|
$
|
121
|
|
|
$
|
124
|
|
|
$
|
673
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
102
|
|
|
RSUs and OSUs
|
|
Stock Purchase Plan
|
||||||||||||||||||||
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||||||||
Estimated values
|
|
$
|
35.30
|
|
|
$
|
29.76
|
|
|
$
|
31.63
|
|
|
$
|
7.20
|
|
|
$
|
6.70
|
|
|
$
|
6.56
|
|
Risk-free interest rate
|
|
1.4
|
%
|
|
0.9
|
%
|
|
0.6
|
%
|
|
1.0
|
%
|
|
0.5
|
%
|
|
0.1
|
%
|
||||||
Dividend yield
|
|
2.9
|
%
|
|
3.3
|
%
|
|
2.9
|
%
|
|
2.9
|
%
|
|
3.2
|
%
|
|
3.1
|
%
|
||||||
Volatility
|
|
23
|
%
|
|
23
|
%
|
|
27
|
%
|
|
19
|
%
|
|
22
|
%
|
|
25
|
%
|
||||||
Expected life (in years)
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
|
Number of
RSUs
(In Millions)
|
|
Weighted
Average
Grant-Date
Fair Value
|
|||
December 31, 2016
|
|
106.8
|
|
|
$
|
28.99
|
|
Granted
|
|
45.2
|
|
|
$
|
35.30
|
|
Assumed in acquisition
|
|
1.1
|
|
|
$
|
34.90
|
|
Vested
|
|
(40.5
|
)
|
|
$
|
27.52
|
|
Forfeited
|
|
(12.2
|
)
|
|
$
|
30.08
|
|
December 30, 2017
|
|
100.4
|
|
|
$
|
32.36
|
|
Expected to vest as of December 30, 2017
|
96.5
|
|
|
$
|
32.36
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
103
|
(In Millions)
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
and thereafter
|
|
Total
|
||||||||||||||
Minimum rental commitments under all non-cancelable leases
1
|
|
$
|
215
|
|
|
$
|
186
|
|
|
$
|
162
|
|
|
$
|
136
|
|
|
$
|
105
|
|
|
$
|
441
|
|
|
$
|
1,245
|
|
1
|
Includes leases with initial term in excess of one year.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
104
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
105
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
106
|
Intel Corporation
Financial Information by Quarter (unaudited)
|
2017 for Quarter Ended
(In Millions, Except Per Share Amounts) |
|
December 30
|
|
September 30
|
|
July 1
|
|
April 1
|
||||||||
Net revenue
|
|
$
|
17,053
|
|
|
$
|
16,149
|
|
|
$
|
14,763
|
|
|
$
|
14,796
|
|
Gross margin
|
|
$
|
10,767
|
|
|
$
|
10,057
|
|
|
$
|
9,098
|
|
|
$
|
9,147
|
|
Net income (loss)
1
|
|
$
|
(687
|
)
|
|
$
|
4,516
|
|
|
$
|
2,808
|
|
|
$
|
2,964
|
|
Earnings per share - Basic
|
|
$
|
(0.15
|
)
|
|
$
|
0.96
|
|
|
$
|
0.60
|
|
|
$
|
0.63
|
|
Earnings per share - Diluted
|
|
$
|
(0.15
|
)
|
|
$
|
0.94
|
|
|
$
|
0.58
|
|
|
$
|
0.61
|
|
Dividends per share of common stock:
|
|
|
|
|
|
|
|
|
||||||||
Declared
|
|
$
|
—
|
|
|
$
|
0.5450
|
|
|
$
|
—
|
|
|
$
|
0.5325
|
|
Paid
|
|
$
|
0.2725
|
|
|
$
|
0.2725
|
|
|
$
|
0.2725
|
|
|
$
|
0.2600
|
|
Market price range common stock
2
:
|
|
|
|
|
|
|
|
|
||||||||
High
|
|
$
|
47.56
|
|
|
$
|
38.08
|
|
|
$
|
37.43
|
|
|
$
|
37.98
|
|
Low
|
|
$
|
39.04
|
|
|
$
|
33.46
|
|
|
$
|
33.54
|
|
|
$
|
35.04
|
|
2016 for Quarter Ended
(In Millions, Except Per Share Amounts) |
|
December 31
|
|
October 1
|
|
July 2
|
|
April 2
|
||||||||
Net revenue
|
|
$
|
16,374
|
|
|
$
|
15,778
|
|
|
$
|
13,533
|
|
|
$
|
13,702
|
|
Gross margin
|
|
$
|
10,105
|
|
|
$
|
9,983
|
|
|
$
|
7,973
|
|
|
$
|
8,130
|
|
Net income
|
|
$
|
3,562
|
|
|
$
|
3,378
|
|
|
$
|
1,330
|
|
|
$
|
2,046
|
|
Basic earnings per share of common stock
|
|
$
|
0.75
|
|
|
$
|
0.71
|
|
|
$
|
0.28
|
|
|
$
|
0.43
|
|
Diluted earnings per share of common stock
|
|
$
|
0.73
|
|
|
$
|
0.69
|
|
|
$
|
0.27
|
|
|
$
|
0.42
|
|
Dividends per share of common stock:
|
|
|
|
|
|
|
|
|
||||||||
Declared
|
|
$
|
—
|
|
|
$
|
0.52
|
|
|
$
|
—
|
|
|
$
|
0.52
|
|
Paid
|
|
$
|
0.26
|
|
|
$
|
0.26
|
|
|
$
|
0.26
|
|
|
$
|
0.26
|
|
Market price range common stock
1
:
|
|
|
|
|
|
|
|
|
||||||||
High
|
|
$
|
38.10
|
|
|
$
|
37.75
|
|
|
$
|
32.99
|
|
|
$
|
35.44
|
|
Low
|
|
$
|
33.61
|
|
|
$
|
32.68
|
|
|
$
|
29.63
|
|
|
$
|
28.22
|
|
1
|
In Q4 2017, we recognized a
$5.4 billion
higher income tax expense as a result of one-time impacts from Tax Reform.
|
2
|
All stock prices are closing prices per the Nasdaq Global Select Market.
|
SUPPLEMENTAL DETAILS
|
|
107
|
controls and procedures
|
SUPPLEMENTAL DETAILS
|
|
108
|
exhibits and financial statement schedules
|
1.
|
Financial Statements: See "Index to Consolidated Financial Statements" within the Consolidated Financial Statements.
|
2.
|
Financial Statement Schedule: See "Schedule II—Valuation and Qualifying Accounts" in this section of this Form 10-K.
|
3.
|
Exhibits: The exhibits listed in the accompanying index to exhibits are filed, furnished, or incorporated by reference as part of this Form 10-K.
|
•
|
may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;
|
•
|
may apply standards of materiality that differ from those of a reasonable investor; and
|
•
|
were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.
|
SUPPLEMENTAL DETAILS
|
|
109
|
Years Ended
(In Millions) |
|
Balance at Beginning of Year
|
|
Additions Charged to Expenses/
Other Accounts
|
|
Net
(Deductions)
Recoveries
|
|
Balance at
End of Year
|
||||||||
Valuation allowance for deferred tax assets
|
|
|
|
|
|
|
|
|
||||||||
December 30, 2017
|
|
$
|
953
|
|
|
$
|
237
|
|
|
$
|
(19
|
)
|
|
$
|
1,171
|
|
December 31, 2016
|
|
$
|
701
|
|
|
$
|
261
|
|
|
$
|
(9
|
)
|
|
$
|
953
|
|
December 26, 2015
|
|
$
|
595
|
|
|
$
|
190
|
|
|
$
|
(84
|
)
|
|
$
|
701
|
|
SUPPLEMENTAL DETAILS
|
|
110
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|
Filed or
Furnished
Herewith
|
|||||||
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing
Date
|
|
||||
2.1
†
|
|
|
8-K
|
|
000-06217
|
|
2.1
|
|
|
6/1/2015
|
|
|
|
2.2
†
|
|
|
|
8-K
|
|
000-06217
|
|
2.1
|
|
|
3/13/2017
|
|
|
3.1
|
|
|
8-K
|
|
000-06217
|
|
3.1
|
|
|
5/22/2006
|
|
|
|
3.2
|
|
|
8-K
|
|
000-06217
|
|
3.2
|
|
|
1/26/2016
|
|
|
|
4.2.1
|
|
|
S-3ASR
|
|
333-132865
|
|
4.4
|
|
|
3/30/2006
|
|
|
|
4.2.2
|
|
|
10-K
|
|
000-06217
|
|
4.2.4
|
|
|
2/20/2008
|
|
|
|
4.2.3
|
|
|
10-Q
|
|
000-06217
|
|
4.1
|
|
|
11/2/2009
|
|
|
|
4.2.4
|
|
|
8-K
|
|
000-06217
|
|
4.01
|
|
|
9/19/2011
|
|
|
|
4.2.5
|
|
|
8-K
|
|
000-06217
|
|
4.01
|
|
|
12/11/2012
|
|
|
|
4.2.6
|
|
|
8-K
|
|
000-06217
|
|
4.01
|
|
|
12/14/2012
|
|
|
|
4.2.7
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
7/29/2015
|
|
|
|
4.2.8
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
12/14/2015
|
|
|
|
4.2.9
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
5/19/2016
|
|
|
|
4.2.10
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
5/11/2017
|
|
|
|
4.2.11
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
6/16/2017
|
|
|
|
4.2.12
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
8/14/2017
|
|
|
SUPPLEMENTAL DETAILS
|
|
111
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|
Filed or
Furnished
Herewith
|
|||||||
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing
Date
|
|
||||
4.2.13
|
|
|
|
|
|
|
|
|
|
|
X
|
||
4.2.14
|
|
|
8-K
|
|
000-06217
|
|
99.2
|
|
|
12/28/2015
|
|
|
|
|
|
Certain instruments defining the rights of holders of long-term debt of Intel Corporation are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. Intel Corporation hereby agrees to furnish to the Securities and Exchange Commission, upon request, copies of such instruments.
|
|
|
|
|
|
|
|
|
|
|
|
10.1
††
|
|
|
10-Q
|
|
000-06217
|
|
10.1
|
|
|
7/27/2017
|
|
|
|
10.1.2
††
|
|
|
10-Q
|
|
000-06217
|
|
10.3
|
|
|
8/3/2009
|
|
|
|
10.1.3
††
|
|
|
|
|
|
|
|
|
|
|
X
|
||
10.1.4
††
|
|
|
10-Q
|
|
000-06217
|
|
10.3
|
|
|
4/27/2015
|
|
|
|
10.1.5
††
|
|
|
|
10-K
|
|
000-06217
|
|
10.1.27
|
|
|
2/17/2017
|
|
|
10.1.6
††
|
|
|
|
|
|
|
|
|
|
|
X
|
||
10.1.7
††
|
|
|
10-Q
|
|
000-06217
|
|
10.4
|
|
|
4/27/2015
|
|
|
|
10.1.8
††
|
|
|
10-Q
|
|
000-06217
|
|
10.1
|
|
|
4/27/2017
|
|
|
|
10.1.9
††
|
|
|
10-Q
|
|
000-06217
|
|
10.1
|
|
|
4/27/2015
|
|
|
|
10.1.10
††
|
|
|
10-Q
|
|
000-06217
|
|
10.2
|
|
|
4/27/2015
|
|
|
|
10.1.11
††
|
|
|
10-Q
|
|
000-06217
|
|
10.2
|
|
|
4/27/2017
|
|
|
|
10.2
††
|
|
|
10-K
|
|
000-06217
|
|
10.7.5
|
|
|
2/17/2017
|
|
|
|
10.3
††
|
|
|
10-K
|
|
000-06217
|
|
10.9.2
|
|
|
2/14/2014
|
|
|
|
10.4
††
|
|
|
10-K
|
|
000-06217
|
|
10.15
|
|
|
2/22/2005
|
|
|
SUPPLEMENTAL DETAILS
|
|
112
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|
Filed or
Furnished
Herewith
|
|||||||
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing
Date
|
|
||||
10.5
††
|
|
|
10-Q
|
|
000-06217
|
|
10.2
|
|
|
10/31/2016
|
|
|
|
10.6
††
|
|
|
S-8
|
|
333-172024
|
|
99.1
|
|
|
2/2/2011
|
|
|
|
10.7
††
|
|
|
10-K
|
|
000-06217
|
|
10.41
|
|
|
2/26/2007
|
|
|
|
10.8
|
|
|
8-K
|
|
000-06217
|
|
10.1
|
|
|
11/12/2009
|
|
|
|
10.9
†††
|
|
|
8-K
|
|
000-06217
|
|
10.1
|
|
|
1/10/2011
|
|
|
|
10.10
††
|
|
|
10-K
|
|
000-06217
|
|
10.14
|
|
|
2/12/2016
|
|
|
|
10.11
††
|
|
|
10-Q
|
|
000-06217
|
|
10.1
|
|
|
10/31/2016
|
|
|
|
10.12
††
|
|
|
|
|
|
|
|
|
|
|
X
|
||
10.13
††
|
|
|
|
|
|
|
|
|
|
|
X
|
||
12.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
21.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
23.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
||
32.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
99.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
†
|
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Intel agrees to furnish supplementally a copy of any such schedule or exhibit to the SEC upon request.
|
††
|
Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.
|
SUPPLEMENTAL DETAILS
|
|
113
|
FORM 10-k cross-reference index
|
(a)
|
As of December 30, 2017, we did not have any significant off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
|
(b)
|
Incorporated by reference to "Proposal 1: Election of Directors," "Corporate Governance," "Code of Conduct," and "Other Matters-Section 16(a) Beneficial Ownership Reporting Compliance" in the 2018 Proxy Statement. The information under the heading "Executive Officers of the Registrant" within Fundamentals of Our Business is also incorporated by reference in this section.
|
(c)
|
Incorporated by reference to "Director Compensation," "Compensation Discussion and Analysis," "Report of the Compensation Committee," and "Executive Compensation" in the 2018 Proxy Statement.
|
(d)
|
Incorporated by reference to "Security Ownership of Certain Beneficial Owners and Management" and “Equity Compensation Plan Information” in the 2018 Proxy Statement.
|
(e)
|
Incorporated by reference to "Corporate Governance" and "Certain Relationships and Related Transactions" in the 2018 Proxy Statement.
|
(f)
|
Incorporated by reference to "Report of the Audit Committee" and "Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm" in the 2018 Proxy Statement.
|
SUPPLEMENTAL DETAILS
|
|
114
|
signatures
|
|
INTEL CORPORATION
Registrant
|
||
|
|
|
|
|
By:
|
|
/s/
R
OBERT
H
.
S
WAN
|
|
|
|
Robert H. Swan
|
|
|
|
Executive Vice President, Chief Financial Officer and Principal Financial Officer
|
|
|
|
February 16, 2018
|
|
/
s
/
B
RIAN
M
.
K
RZANICH
|
|
|
/s/ R
OBERT
H. S
WAN
|
|
Brian M. Krzanich
|
|
|
Robert H. Swan
|
|
Chief Executive Officer, Director and Principal Executive Officer
|
|
|
Executive Vice President, Chief Financial Officer and Principal Financial Officer
|
|
|
|
||
|
February 16, 2018
|
|
|
February 16, 2018
|
|
|
|
|
|
|
/s/ K
EVIN
T. M
C
B
RIDE
|
|
|
|
|
Kevin T. McBride
|
|
|
|
|
Vice President of Finance, Corporate Controller and Principal Accounting Officer
|
|
|
|
|
|
|
|
|
|
February 16, 2018
|
|
|
|
|
/
s
/ C
HARLENE
B
ARSHEFSKY
|
|
|
/
s
/
D
AVID
S
.
P
OTTRUCK
|
|
Charlene Barshefsky
|
|
|
David S. Pottruck
|
|
Director
|
|
|
Director
|
|
February 16, 2018
|
|
|
February 16, 2018
|
|
|
|
|
|
|
/
s
/
A
NEEL
B
HUSRI
|
|
|
/
s
/
G
REGORY
D
.
S
MITH
|
|
Aneel Bhusri
|
|
|
Gregory D. Smith
|
|
Director
|
|
|
Director
|
|
February 16, 2018
|
|
|
February 16, 2018
|
|
|
|
|
|
|
/s/
A
NDY
D
.
B
RYANT
|
|
|
/
s
/
A
NDREW
W
ILSON
|
|
Andy D. Bryant
|
|
|
Andrew Wilson
|
|
Chairman of the Board and Director
|
|
|
Director
|
|
February 16, 2018
|
|
|
February 16, 2018
|
|
|
|
|
|
|
/
s
/
R
EED
E
.
H
UNDT
|
|
|
/
s
/
F
RANK
D
.
Y
EARY
|
|
Reed E. Hundt
|
|
|
Frank D. Yeary
|
|
Director
|
|
|
Director
|
|
February 16, 2018
|
|
|
February 16, 2018
|
|
|
|
|
|
|
/
s
/
O
MAR
I
SHRAK
|
|
|
/
s
/
D
AVID
B
.
Y
OFFIE
|
|
Omar Ishrak
|
|
|
David B. Yoffie
|
|
Director
|
|
|
Director
|
|
February 16, 2018
|
|
|
February 16, 2018
|
|
|
|
|
|
|
/
s
/
D
R.
T
SU-
J
AE
K
ING
L
IU
|
|
|
|
|
Dr. Tsu-Jae King Liu
|
|
|
|
|
Director
|
|
|
|
|
February 16, 2018
|
|
|
|
SUPPLEMENTAL DETAILS
|
|
115
|
Section 5.03.
References In Base Indenture ........................................................................................
|
9
|
INTEL CORPORATION
|
|
By:
|
/s/ Ravi Jacob
|
Name: Ravi Jacob
|
|
Title: Vice President and Treasurer
|
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
|
|
By:
|
/s/ Maddy Hughes
|
Name: Maddy Hughes
|
|
Title: Vice President
|
Term
:
|
Defined in Appendix Section
:
|
|
|
“Agent Members”
|
2.1(d)
|
“ERISA Legend”
|
2.2(h)
|
“Global Security”
|
1.1(a)
|
“Global Securities Legend”
|
2.2(h)
|
“Regulation S Global Security”
|
2.1(b)
|
“Regulation S Notes”
|
2.1(a)
|
“Restricted Notes Legend”
|
2.2(h)
|
“Rule 144A Global Security”
|
2.1(c)
|
“Rule 144A Notes”
|
2.1(b)
|
INTEL CORPORATION
|
|
By:
|
|
Name: Ravi Jacob
|
|
Title: Vice President and Treasurer
|
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
|
|
By:
|
|
|
Authorized Signatory
|
|
|
Signature
|
Signature Guarantee:
|
|
|
|
|
|
Signature must be guaranteed
|
|
Signature
|
Date of Exchange
|
|
Amount of decrease
in principal amount
of this Global Security
|
|
Amount of increase
in principal amount
of this Global Security
|
|
Principal amount of
this Global Security
following such
decrease (or
increase)
|
|
Signature of
authorized officer of
Trustee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[Insert Name of Transferor]
|
|
|
|
By:
|
|
Name:
|
|
Title:
|
Date of Exchange
|
|
Amount of decrease
in principal amount
of this Global Security
|
|
Amount of increase
in principal amount
of this Global Security
|
|
Principal amount of
this Global Security
following such
decrease (or
increase)
|
|
Signature of
authorized officer of
Trustee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
Non-Solicitation.
You agree that for a period of twelve (12) months after the Retirement Date, you will not, directly or indirectly, solicit, induce or attempt to solicit or induce any Restricted Person to leave employment with Intel, violate the terms of any employment agreement or similar arrangement with Intel or otherwise interfere in any way with the relationship between the Restricted Person and Intel. You further agree that you will not use or disclose Confidential Information (as defined below) at any time to aid any third party to target, identify, and/or solicit Restricted Persons to leave employment or engagement by Intel. For purposes of this Agreement, “Restricted Person” means any person employed or otherwise engaged as a service provider by Intel as of the Retirement Date and with whom you had business contact or about whom you had access to Confidential Information during the two-year period prior to the Retirement Date.
|
b.
|
Non-Disparagement.
You promise not to make any statements or remarks, verbally or in writing, that negatively affect the reputation of Intel or its officers, directors, and employees, whether current or former, in any manner to its or their detriment. However, you may respond accurately and fully to any question or request for information when required to do so by law.
|
c.
|
Confidentiality/Trade Secrets.
You acknowledge you have acquired knowledge of or had access to Confidential Information or other proprietary information of Intel, its customers and/or third parties during the course of your employment at Intel. For purposes of this Agreement, “Confidential Information” includes, without limitation: technical information (e.g., roadmaps, schematics, source code, specifications), business information (e.g., product information, marketing strategies, markets, sales, customers, customer lists or phone books), personnel information (e.g., organizational charts, employee lists, skill sets, employee health information, names, phone numbers, email addresses, personnel files, employee compensation (except where the disclosure of such personnel information is permissible under local labor law such as the right of employees to discuss compensation and working conditions under the US National Labor Relations Act), and other non-public Intel data and information of a similar nature. You acknowledge your ongoing obligation to protect such information, during and after your employment with Intel. Notwithstanding any provision to the contrary in your original Intel Employment Agreement, you agree that your obligations of non-disclosure with respect to the Confidential Information survive termination of your employment with Intel and continue indefinitely thereafter (until such information becomes lawfully and publicly known outside Intel, or an Intel officer expressly authorizes such disclosure or use in advance and in writing). You agree to execute the Trade Secret Acknowledgment Form and to participate in an exit interview with Intel's General Counsel or his designee.
|
d.
|
Understanding of Covenants; Consideration
.
You hereby represent that you (i) are familiar with the foregoing non-solicitation, non-disparagement, and confidentiality covenants (ii) are fully aware of your obligations hereunder, (iii) agree to the reasonableness of the length of time and scope of the foregoing covenants, and (iv) agree that such covenants are necessary to protect Intel’s confidential and proprietary information, good will, stable workforce, and customer relations.
|
e.
|
Remedy for Breach
.
You hereby agree that if you breach any provision of this paragraph 9, the damage to Intel may be substantial and money damages will not afford Intel an adequate remedy, and (ii) if you are in breach of any provision of this paragraph 9, or threatens such a breach (by initiating a course of action that would reasonably be expected to lead to a breach), Intel shall be entitled, in addition to all other rights and remedies as may be provided by law, to seek specific performance and injunctive and other equitable relief, without bond or other security, to prevent or restrain a breach of any provision of this paragraph 9.
|
1.
|
TERMS OF RESTRICTED STOCK UNIT
|
2.
|
VESTING OF RSUs
|
3.
|
CONVERSION INTO COMMON STOCK
|
4.
|
SUSPENSION OR TERMINATION OF RSU FOR MISCONDUCT
|
5.
|
TERMINATION OF EMPLOYMENT
|
6.
|
DEATH
|
7.
|
DISABILITY
|
8.
|
RETIREMENT
|
(a)
|
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, shall vest as of the date of your Retirement. No vesting acceleration shall occur for any periods of employment of less than five (5) years; or
|
(b)
|
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 shall vest as of the date of your Retirement.
|
9.
|
TAX WITHHOLDING
|
10.
|
RIGHTS AS A STOCKHOLDER AND RESTRICTIONS
|
11.
|
DISPUTES
|
12.
|
AMENDMENTS
|
13.
|
THE 2006 PLAN AND OTHER TERMS; OTHER MATTERS
|
(a)
|
Certain capitalized terms used in these Standard Terms are defined in the 2006 Plan. Any prior agreements, commitments or negotiations concerning the RSUs are superseded by these Standard Terms 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 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 shall be utilized for delivery upon vesting in accord with the terms hereof.
|
(c)
|
Notwithstanding any other provision of these Standard Terms, if any changes in the financial or tax accounting rules applicable to the RSUs covered by these Standard Terms shall occur which, in the sole judgment of the Committee, may have an adverse effect on the reported earnings, assets or liabilities of the Corporation, the Committee may, in its sole discretion, modify these Standard Terms or cancel and cause a forfeiture with respect to any unvested RSUs at the time of such determination.
|
(d)
|
Nothing contained in these Standard Terms creates or implies an employment contract or term of employment upon which you may rely.
|
(e)
|
Notwithstanding any provision of these Standard Terms, 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 13(e) shall 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.
|
(f)
|
Because these Standard Terms relate to terms and conditions under which you may be issued shares of Common Stock of Intel Corporation, a Delaware corporation, an essential term of these Standard Terms is that it shall 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 these Standard Terms or the RSUs granted hereunder shall be brought in the state or federal courts of competent jurisdiction in the State of California.
|
(g)
|
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.
|
(h)
|
Notwithstanding any other provision of these Standard Terms, if any changes in law or the financial or tax accounting rules applicable to the RSUs covered by these Standard Terms shall occur, the Corporation may, in its sole discretion, (1) modify these Standard Terms 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.
|
1.
|
TERMS OF RESTRICTED STOCK UNIT
|
2.
|
SIGNATURE
|
3.
|
VESTING OF RSUs
|
4.
|
CONVERSION INTO COMMON STOCK
|
5.
|
SUSPENSION OR TERMINATION OF RSU FOR MISCONDUCT
|
6.
|
TERMINATION OF EMPLOYMENT
|
7.
|
DEATH
|
8.
|
DISABLEMENT
|
9.
|
TAX WITHHOLDING
|
10.
|
RIGHTS AS A STOCKHOLDER
|
11.
|
DISPUTES
|
12.
|
AMENDMENTS
|
13.
|
DATA PRIVACY
|
14.
|
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 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 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 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.
|
(d)
|
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 granted hereunder will be brought in the state or federal courts of competent jurisdiction in the State of California.
|
(f)
|
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.
|
(g)
|
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.
|
(h)
|
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 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 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.
|
(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 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(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.
|
15.
|
COUNTRY SPECIFIC TERMS AND CONDITIONS
|
(a)
|
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.
|
(b)
|
Denmark
. If you are employed in or a citizen of Denmark:
|
(c)
|
France
. If you are employed in or a citizen of France:
|
(d)
|
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.
|
(e)
|
Vietnam
. If you are employed in or a resident of Vietnam:
|
|
|
Years Ended
|
||||||||||||||||||
(Dollars in Millions, Except Ratios)
|
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
|
Dec 27,
2014 |
|
Dec 28,
2013 |
||||||||||
Earnings
1
|
|
$
|
20,739
|
|
|
$
|
13,007
|
|
|
$
|
14,495
|
|
|
$
|
16,031
|
|
|
$
|
12,814
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Add - Fixed charges
|
|
996
|
|
|
907
|
|
|
629
|
|
|
499
|
|
|
529
|
|
|||||
Subtract - Capitalized interest
|
|
(313
|
)
|
|
(135
|
)
|
|
(258
|
)
|
|
(276
|
)
|
|
(246
|
)
|
|||||
Earnings and fixed charges (net of capitalized interest)
|
|
$
|
21,422
|
|
|
$
|
13,779
|
|
|
$
|
14,866
|
|
|
$
|
16,254
|
|
|
$
|
13,097
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest
2
|
|
$
|
646
|
|
|
$
|
733
|
|
|
$
|
337
|
|
|
$
|
192
|
|
|
$
|
244
|
|
Capitalized interest
|
|
313
|
|
|
135
|
|
|
258
|
|
|
276
|
|
|
246
|
|
|||||
Estimated interest component of rental expense
|
|
37
|
|
|
39
|
|
|
34
|
|
|
31
|
|
|
39
|
|
|||||
Total
|
|
$
|
996
|
|
|
$
|
907
|
|
|
$
|
629
|
|
|
$
|
499
|
|
|
$
|
529
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings before taxes and fixed charges, to fixed charges
|
|
22x
|
|
|
15x
|
|
|
24x
|
|
|
33x
|
|
|
25x
|
|
Subsidiaries of the Registrant
|
|
State or Other Jurisdiction of Incorporation
|
Intel Electronics Finance Limited
|
|
Cayman Islands
|
Intel International, Inc.
|
|
California, U.S.
|
Intel Commodities Limited
|
|
Cayman Islands
|
Intel Phils. Holding LLC
|
|
California, U.S.
|
Intel European Finance Corporation
|
|
Cayman Islands
|
Intel Capital Corporation
|
|
Delaware, U.S.
|
McAfee Suomi Funding LLC
|
|
Delaware, U.S.
|
Intel Overseas Funding Corporation
|
|
Cayman Islands
|
Mission College Investments Ltd.
|
|
Cayman Islands
|
Cyclops Holdings, LLC
|
|
Delaware, U.S.
|
Intel Americas, Inc.
|
|
Delaware, U.S.
|
Intel Technology (US), LLC
|
|
California, U.S.
|
Altera Corporation
|
|
Delaware, U.S.
|
Intel International Finance CVBA
|
|
Belgium
|
Intel Deutschland GmbH
|
|
Germany
|
Intel Benelux B.V.
|
|
Netherlands
|
Intel Holdings B.V.
|
|
Netherlands
|
Altera International, Inc.
|
|
Cayman Islands
|
Intel Finance B.V.
|
|
Netherlands
|
Intel Corporation (UK) Ltd.
|
|
United Kingdom
|
Intel Technologies, Inc.
|
|
Delaware, U.S.
|
Intel Ireland Limited
|
|
Cayman Islands
|
Intel Electronics Ltd.
|
|
Israel
|
Mobileye Vision Technologies Ltd.
|
|
Israel
|
Intel Tools and Equipment Ltd.
|
|
Israel
|
Intel Semi Conductors Ltd.
|
|
Israel
|
Intel Semiconductor (Dalian) Ltd.
|
|
China
|
Intel Malaysia Sdn. Berhad
|
|
Malaysia
|
Intel Technology Sdn. Berhad
|
|
Malaysia
|
Intel Semiconductor (US) LLC
|
|
Delaware, U.S.
|
Intel Asia Holding Limited
|
|
Hong Kong
|
Intel China Ltd.
|
|
China
|
Intel China Finance Holding (HK) Limited
|
|
Hong Kong
|
Intel China Finance I (HK) Limited
|
|
Hong Kong
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
As of December 30, 2017.
|
(1)
|
Registration Statement (Form S-3 No. 333-207633) of Intel Corporation,
|
|
|
(2)
|
Registration Statement (Form S-4 No. 333-158222) of Intel Corporation, and
|
|
|
(3)
|
Registration Statements (Form S-8 Nos. 333-172024, 333-45395, 333-49696, 333-124805, 333-135178, 333-135177, 333-143932, 333-141905, 333-160272, 333-160824, 333-172454, 333-172937, 333-175123, 333-190236, 333-191956, 333-205904, 333-208920, and 333-221555) of Intel Corporation;
|
1.
|
I have reviewed this annual report on Form 10-K 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:
|
February 16, 2018
|
|
|
By:
|
/s/ B
RIAN
M. K
RZANICH
|
|
|
|
|
|
Brian M. Krzanich
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K 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:
|
February 16, 2018
|
|
|
By:
|
/s/ R
OBERT
H. S
WAN
|
|
|
|
|
|
Robert H. Swan
Executive Vice President, Chief Financial Officer
|
Date:
|
February 16, 2018
|
|
|
By:
|
/s/ B
RIAN
M. K
RZANICH
|
|
|
|
|
|
Brian M. Krzanich
Chief Executive Officer
|
|
|
|
|
|
|
Date:
|
February 16, 2018
|
|
|
By:
|
/s/ R
OBERT
H. S
WAN
|
|
|
|
|
|
Robert H. Swan
Executive Vice President, Chief Financial Officer
|
Intel Worldwide Headquarters:
|
|
•
|
Santa Clara, California
|
|
|
Wafer Fabs:
|
|
•
|
Oregon - 10nm, 14nm, 22nm
|
•
|
Arizona - 14nm, 22nm
|
•
|
New Mexico - 32nm, 45nm
|
•
|
Ireland - 14nm
|
•
|
Israel - 22nm
|
•
|
Dalian Memory Fab
|
|
|
Assembly and Test:
|
|
•
|
Chengdu
|
•
|
Vietnam
|
•
|
Malaysia
|
Overview
|
|
CCG is our largest business unit, delivering 54% of our revenue. CCG is responsible for all aspects of the client computing continuum, which includes platforms and connectivity technologies that are incorporated in a wide range of consumer and commercial products. In 2017, we released the 8th generation Intel® Core™ processor family for use in notebooks and desktops, as well as our first Intel® Core™ i9 processors. These processors use 14nm transistors and new-generation Tri-Gate transistor technology.
|
|
|
|
Highlights and Segment Imperatives
|
|
•
|
CCG is foundational to the Virtuous Cycle of Growth. CCG's scale enables investment in critical intellectual property and Moore's Law for Intel. Continued innovation in client computing drives growth in the cloud and data center.
|
•
|
Strategic imperatives include delivering predictable annual cadence of leadership products, focusing on high growth segments of 2-in-1, thin-and-light, commercial and gaming, and growing close adjacencies and modem.
|
•
|
Since 2013 the PC total TAM has decreased approximately 18%
1
, while CCG profitability has improved over 45% as we have focused on high-growth segments and innovative form factors.
|
•
|
CCG operating income was $12.9 billion, up 21% year over year on continued strength of Intel® Core™ processors and improved 14nm costs. The 2017 Intel® Core™ processor brand mix reached an all-time high.
|
1
Source: Intel calculated TAM derived from industry analyst reports.
|
Overview
|
|
DCG develops workload-optimized platforms for compute, storage, and network functions. Customers include enterprise and government, as well as cloud and communications service providers. In 2017, DCG continued to grow faster than Intel as a whole, generated roughly 30% of our total revenue, and contributed over 40% of our total operating income.
|
|
|
|
Highlights and Segment Imperatives
|
|
•
|
We exceeded our commitment of high single-digit revenue growth and >40% operating margin for 2017.
|
•
|
We continue to see strong growth in our cloud and communications market segments.
|
•
|
The data center TAM
1
is expected to be >$70 billion by 2022, of which we currently have less than a 40% market share.
|
•
|
We see significant opportunities in cloud, networking, and analytics/artificial intelligence, with the chance to drive higher growth as we expand our product offerings in the data center with our adjacent products.
|
•
|
During 2017, we launched the Intel® Xeon® Scalable processors, delivering the largest advancements in platform capabilities in a decade and achieving over 110 world performance records.
|
1
Source: Intel calculated TAM derived from industry analyst reports.
|
Overview
|
|
IOTG develops and sells high-performance Internet of Things compute solutions for retail, automotive, industrial, and video surveillance, along with a broad range of other embedded applications. These market-driven solutions utilize silicon and software assets from our data center and client businesses to expand our compute footprint into Internet of Things markets. Smart and connected things accelerate the Virtuous Cycle of Growth by creating large amounts of data that flow through enhanced networks to the cloud.
|
|
|
|
Highlights and Segment Imperatives
|
|
•
|
IOTG is a rapidly growing business within Intel, with a 15% annual growth rate from 2013 - 2017.
|
•
|
2017 was a record year for the IOTG business segment, with record revenue, unit sales, and operating income.
|
•
|
We continue to execute on our strategy, with new design wins and product launches such as Huawei Internet of Things
gateway
*
based on Intel® Xeon® processor and Siemens human machine interface technology
*
for industrial Internet of Things based on Intel Atom® processor.
|
Overview
|
|
NSG offers Intel® Optane™ and Intel® 3D NAND technologies, which drive innovation in solid-state drives (SSDs). The primary customers are enterprise and cloud-based data centers, users of business and consumer desktops and laptops, and a variety of embedded and Internet of Things application providers. In 2017, we released our first
Intel
Optane technology-based products, with 3D XPoint™ memory media as a building block, and were first to deliver products based on 64-layer, triple-level cell (TLC) 3D NAND.
|
|
|
|
Highlights and Segment Imperatives
|
|
•
|
NSG delivers platform-connected solutions for Intel by partnering with and helping to accelerate the CCG and DCG business units.
|
•
|
Transitioned our manufacturing capacity from 2D NAND to 3D NAND, reaching 100% 3D NAND production at the end of 2017.
|
•
|
NSG led the industry with the first SSDs based on 64-layer, TLC 3D NAND for client, embedded, and data center segments.
|
•
|
Achieved production volume with Intel® Optane™ technology-based products, designed for the data center and client computing segments.
|
Overview
|
|
PSG offers programmable semiconductors, primarily FPGAs and related products for a broad range of market segments, including communications, data center, industrial, military, and automotive. PSG accelerates the Virtuous Cycle of Growth through collaborating with our other businesses and integrating FPGAs with microprocessors. This integration broadens the use of FPGAs and combines the benefits of both technologies to allow more flexibility for systems to operate with increased efficiency and higher performance.
|
|
|
|
Highlights and Segment Imperatives
|
|
•
|
In 2017, we introduced the FPGA-based Programmable Acceleration Card, which operates seamlessly with Intel Xeon processors and an acceleration software stack; began shipping the
Intel®
Stratix
®
10 SX monolithic FPGA, which tackles the design challenges of next-generation, high-performance systems; and announced availability of the
Intel
Stratix
10 MX device, the industry’s first FPGA integrated with HBM DRAM, which will help speed up mass data movements and stream data pipeline frameworks.
|
•
|
Throughout 2017, PSG accelerated design wins and its opportunity pipeline, driven mainly by FPGAs built on Intel’s 14nm process technology. These FPGAs, now in production, accelerate workloads in data-centric applications like 5G, Network Function Virtualization (NFV), cyber analytics, and artificial intelligence.
|
•
|
Intel FPGAs, a key platform technology, are driving our growth in transformational markets. We anticipate accelerated revenue, operating margin growth, and increased market share by 2022, primarily driven by data center, network infrastructure, intelligent edge, and embedded markets.
|
•
|
In 2018, PSG will focus on becoming the multi-function acceleration solution of choice for continuously changing workloads, when CPUs need an offload engine and applications like deep learning inference need low latency.
|