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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 29, 2018.
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Delaware
|
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94-1672743
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(State or other jurisdiction of incorporation or organization)
|
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(I.R.S. Employer Identification No.)
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2200 Mission College Boulevard, Santa Clara, California
|
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95054-1549
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Emerging growth company
¨
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Class
|
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Outstanding as of September 29, 2018
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Common stock, $0.001 par value
|
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4,564 million
|
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Page
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FORWARD-LOOKING STATEMENTS
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A QUARTER IN REVIEW
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CONSOLIDATED CONDENSED FINANCIAL STATEMENTS AND SUPPLEMENTAL DETAILS
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Consolidated Condensed Statements of Income
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Consolidated Condensed Statements of Comprehensive Income
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Consolidated Condensed Balance Sheets
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Consolidated Condensed Statements of Cash Flows
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Notes to Consolidated Condensed Financial Statements
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MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - RESULTS OF OPERATIONS
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Overview
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Revenue, Gross Margin, and Operating Expenses
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Business Unit Trends and Results
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Other Consolidated Results of Operations
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Liquidity and Capital Resources
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Quantitative and Qualitative Disclosures about Market Risk
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OTHER KEY INFORMATION
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Risk Factors
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Controls and Procedures
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Non-GAAP Financial Measures
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Issuer Purchases of Equity Securities
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Exhibits
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Form 10-Q Cross-Reference Index
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PLATFORM PRODUCTS
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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 Client Computing Group (CCG), Data Center Group (DCG), and Internet of Things Group (IOTG) segments.
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ADJACENT PRODUCTS
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All of our non-platform products, for CCG, DCG, and IOTG like modem, ethernet and silicon photonics, as well as Non-Volatile Memory Solutions Group (NSG), Programmable Solutions Group (PSG), and Mobileye products. Combined with our platform products, adjacent products form comprehensive platform solutions to meet customer needs.
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PC-CENTRIC BUSINESS
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Is made up of our CCG business, both platform and adjacent products.
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DATA-CENTRIC BUSINESSES
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Includes our DCG, IOTG, NSG, PSG, and all other businesses, which includes Mobileye
|
|
|
1
|
A QUARTER IN REVIEW
|
•
|
Five years ago, we set a course to transform to a data-centric company. Today our strategy, products, and employees are delivering on that ambition with strong growth, record results, and new opportunities. We are gaining share in an expanded total addressable market (TAM) opportunity, which is now expected to be over $300 billion
2
as our transformation accelerates.
|
•
|
Our data-centric businesses collectively grew
22%
led by the growth in the cloud and communication service provider market segments. To extend the growth momentum, we are now shipping Intel
®
Optane™
data center persistent memor
y, which combines the speed of traditional memory with the capacity and native persistence of storage.
|
•
|
Our focus on performance leadership and differentiation in client computing is producing outstanding results. In addition, we expect modest PC TAM
2
growth this year and continued share gain in modems. To extend product leadership and to deliver more value to customers, we launched new 9th Gen Intel
®
Core™ processors, targeting the growing gaming market segment.
|
•
|
The return to PC TAM growth put pressure on our factory network. In addition to prioritizing production to serve server and high-performance PC market segments, we are investing additional capital expenditure to increase our supply, working with customers to align demand with available supply, and making good progress to improve 10nm yields.
|
•
|
30 years ago, in September, 1988, Gordon Moore helped establish the Intel Foundation, a public charity funded by our company. From investing in science, technology, engineering, and mathematics (STEM) programs, providing disaster relief, and amplifying the philanthropy of Intel employees, the Intel Foundation has been committed to improving lives around the world.
|
A QUARTER IN REVIEW
|
|
2
|
INTEL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions, Except Per Share Amounts; Unaudited)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Net revenue
|
|
$
|
19,163
|
|
|
$
|
16,149
|
|
|
$
|
52,191
|
|
|
$
|
45,708
|
|
Cost of sales
|
|
6,803
|
|
|
6,085
|
|
|
19,681
|
|
|
17,388
|
|
||||
Gross margin
|
|
12,360
|
|
|
10,064
|
|
|
32,510
|
|
|
28,320
|
|
||||
Research and development
|
|
3,428
|
|
|
3,209
|
|
|
10,110
|
|
|
9,782
|
|
||||
Marketing, general and administrative
|
|
1,605
|
|
|
1,661
|
|
|
5,230
|
|
|
5,610
|
|
||||
Restructuring and other charges
|
|
(72
|
)
|
|
4
|
|
|
(72
|
)
|
|
189
|
|
||||
Amortization of acquisition-related intangibles
|
|
50
|
|
|
49
|
|
|
150
|
|
|
124
|
|
||||
Operating expenses
|
|
5,011
|
|
|
4,923
|
|
|
15,418
|
|
|
15,705
|
|
||||
Operating income
|
|
7,349
|
|
|
5,141
|
|
|
17,092
|
|
|
12,615
|
|
||||
Gains (losses) on equity investments, net
|
|
(75
|
)
|
|
846
|
|
|
365
|
|
|
1,440
|
|
||||
Interest and other, net
|
|
(132
|
)
|
|
(57
|
)
|
|
225
|
|
|
262
|
|
||||
Income before taxes
|
|
7,142
|
|
|
5,930
|
|
|
17,682
|
|
|
14,317
|
|
||||
Provision for taxes
|
|
744
|
|
|
1,414
|
|
|
1,824
|
|
|
4,029
|
|
||||
Net income
|
|
$
|
6,398
|
|
|
$
|
4,516
|
|
|
$
|
15,858
|
|
|
$
|
10,288
|
|
Earnings per share – Basic
|
|
$
|
1.40
|
|
|
$
|
0.96
|
|
|
$
|
3.42
|
|
|
$
|
2.19
|
|
Earnings per share – Diluted
|
|
$
|
1.38
|
|
|
$
|
0.94
|
|
|
$
|
3.35
|
|
|
$
|
2.12
|
|
Cash dividends declared per share of common stock
|
|
$
|
0.60
|
|
|
$
|
0.5450
|
|
|
$
|
1.20
|
|
|
$
|
1.0775
|
|
Weighted average shares of common stock outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
4,574
|
|
|
4,688
|
|
|
4,632
|
|
|
4,707
|
|
||||
Diluted
|
|
4,648
|
|
|
4,821
|
|
|
4,728
|
|
|
4,849
|
|
FINANCIAL STATEMENTS
|
Consolidated Condensed Statements of Income
|
3
|
INTEL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions; Unaudited)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Net income
|
|
$
|
6,398
|
|
|
$
|
4,516
|
|
|
$
|
15,858
|
|
|
$
|
10,288
|
|
Changes in other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized holding gains (losses) on available-for-sale equity investments
|
|
—
|
|
|
399
|
|
|
—
|
|
|
408
|
|
||||
Net unrealized holding gains (losses) on derivatives
|
|
(25
|
)
|
|
19
|
|
|
(199
|
)
|
|
350
|
|
||||
Actuarial valuation and other pension benefits (expenses), net
|
|
13
|
|
|
13
|
|
|
39
|
|
|
233
|
|
||||
Translation adjustments and other
|
|
(2
|
)
|
|
5
|
|
|
(15
|
)
|
|
513
|
|
||||
Other comprehensive income (loss)
|
|
(14
|
)
|
|
436
|
|
|
(175
|
)
|
|
1,504
|
|
||||
Total comprehensive income
|
|
$
|
6,384
|
|
|
$
|
4,952
|
|
|
$
|
15,683
|
|
|
$
|
11,792
|
|
FINANCIAL STATEMENTS
|
Consolidated Condensed Statements of Comprehensive Income
|
4
|
INTEL CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
|
(In Millions)
|
|
Sep 29,
2018 |
|
Dec 30,
2017 |
||||
|
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
3,407
|
|
|
$
|
3,433
|
|
Short-term investments
|
|
2,641
|
|
|
1,814
|
|
||
Trading assets
|
|
7,138
|
|
|
8,755
|
|
||
Accounts receivable
|
|
5,457
|
|
|
5,607
|
|
||
Inventories
|
|
7,401
|
|
|
6,983
|
|
||
Other current assets
|
|
3,546
|
|
|
2,908
|
|
||
Total current assets
|
|
29,590
|
|
|
29,500
|
|
||
Property, plant and equipment, net of accumulated depreciation of $63,684 ($59,286 as of December 30, 2017)
|
|
47,071
|
|
|
41,109
|
|
||
Equity investments
|
|
7,551
|
|
|
8,579
|
|
||
Other long-term investments
|
|
3,562
|
|
|
3,712
|
|
||
Goodwill
|
|
24,506
|
|
|
24,389
|
|
||
Identified intangible assets, net
|
|
12,007
|
|
|
12,745
|
|
||
Other long-term assets
|
|
3,955
|
|
|
3,215
|
|
||
Total assets
|
|
$
|
128,242
|
|
|
$
|
123,249
|
|
Liabilities, temporary equity, and stockholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Short-term debt
|
|
$
|
3,051
|
|
|
$
|
1,776
|
|
Accounts payable
|
|
3,593
|
|
|
2,928
|
|
||
Accrued compensation and benefits
|
|
3,095
|
|
|
3,526
|
|
||
Deferred income
|
|
—
|
|
|
1,656
|
|
||
Other accrued liabilities
|
|
9,835
|
|
|
7,535
|
|
||
Total current liabilities
|
|
19,574
|
|
|
17,421
|
|
||
Debt
|
|
24,823
|
|
|
25,037
|
|
||
Contract liabilities
|
|
2,220
|
|
|
—
|
|
||
Income taxes payable, non-current
|
|
4,879
|
|
|
4,069
|
|
||
Deferred income taxes
|
|
1,485
|
|
|
3,046
|
|
||
Other long-term liabilities
|
|
3,263
|
|
|
3,791
|
|
||
Contingencies (Note 16)
|
|
|
|
|
||||
Temporary equity
|
|
515
|
|
|
866
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock
|
|
—
|
|
|
—
|
|
||
Common stock and capital in excess of par value, 4,564 issued and outstanding (4,687 issued and outstanding as of December 30, 2017)
|
|
25,492
|
|
|
26,074
|
|
||
Accumulated other comprehensive income (loss)
|
|
(1,103
|
)
|
|
862
|
|
||
Retained earnings
|
|
47,094
|
|
|
42,083
|
|
||
Total stockholders’ equity
|
|
71,483
|
|
|
69,019
|
|
||
Total liabilities, temporary equity, and stockholders’ equity
|
|
$
|
128,242
|
|
|
$
|
123,249
|
|
FINANCIAL STATEMENTS
|
Consolidated Condensed Balance Sheets
|
5
|
INTEL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
|
|
|
Nine Months Ended
|
||||||
(In Millions; Unaudited)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||
Cash and cash equivalents, beginning of period
|
|
$
|
3,433
|
|
|
$
|
5,560
|
|
Cash flows provided by (used for) operating activities:
|
|
|
|
|
||||
Net income
|
|
15,858
|
|
|
10,288
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation
|
|
5,420
|
|
|
4,990
|
|
||
Share-based compensation
|
|
1,203
|
|
|
1,051
|
|
||
Amortization of intangibles
|
|
1,172
|
|
|
999
|
|
||
(Gains) losses on equity investments, net
|
|
(329
|
)
|
|
(1,372
|
)
|
||
(Gains) losses on divestitures
|
|
(497
|
)
|
|
(387
|
)
|
||
Loss on debt conversion and extinguishment
|
|
211
|
|
|
—
|
|
||
Deferred taxes
|
|
18
|
|
|
570
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(449
|
)
|
|
(1,128
|
)
|
||
Inventories
|
|
(362
|
)
|
|
(1,245
|
)
|
||
Accounts payable
|
|
430
|
|
|
171
|
|
||
Accrued compensation and benefits
|
|
(801
|
)
|
|
(362
|
)
|
||
Customer deposits and prepaid supply agreements
|
|
1,472
|
|
|
—
|
|
||
Income taxes payable and receivable
|
|
(1,075
|
)
|
|
979
|
|
||
Other assets and liabilities
|
|
261
|
|
|
315
|
|
||
Total adjustments
|
|
6,674
|
|
|
4,581
|
|
||
Net cash provided by operating activities
|
|
22,532
|
|
|
14,869
|
|
||
Cash flows provided by (used for) investing activities:
|
|
|
|
|
||||
Additions to property, plant and equipment
|
|
(11,291
|
)
|
|
(7,709
|
)
|
||
Acquisitions, net of cash acquired
|
|
(183
|
)
|
|
(14,499
|
)
|
||
Purchases of available-for-sale debt investments
|
|
(3,090
|
)
|
|
(1,959
|
)
|
||
Sales of available-for-sale debt investments
|
|
135
|
|
|
1,511
|
|
||
Maturities of available-for-sale debt investments
|
|
2,232
|
|
|
3,488
|
|
||
Purchases of trading assets
|
|
(8,316
|
)
|
|
(9,792
|
)
|
||
Maturities and sales of trading assets
|
|
9,705
|
|
|
11,806
|
|
||
Purchases of equity investments
|
|
(667
|
)
|
|
(744
|
)
|
||
Sales of equity investments
|
|
1,646
|
|
|
3,173
|
|
||
Proceeds from divestitures
|
|
548
|
|
|
3,124
|
|
||
Other investing
|
|
(138
|
)
|
|
1,069
|
|
||
Net cash used for investing activities
|
|
(9,419
|
)
|
|
(10,532
|
)
|
||
Cash flows provided by (used for) financing activities:
|
|
|
|
|
||||
Increase (decrease) in short-term debt, net
|
|
1,707
|
|
|
(5
|
)
|
||
Issuance of long-term debt, net of issuance costs
|
|
423
|
|
|
7,716
|
|
||
Repayment of debt and debt conversion
|
|
(1,928
|
)
|
|
(1,502
|
)
|
||
Proceeds from sales of common stock through employee equity incentive plans
|
|
545
|
|
|
637
|
|
||
Repurchase of common stock
|
|
(8,464
|
)
|
|
(3,611
|
)
|
||
Restricted stock unit withholdings
|
|
(492
|
)
|
|
(424
|
)
|
||
Payment of dividends to stockholders
|
|
(4,173
|
)
|
|
(3,794
|
)
|
||
Other financing
|
|
(757
|
)
|
|
161
|
|
||
Net cash provided by (used for) financing activities
|
|
(13,139
|
)
|
|
(822
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
(26
|
)
|
|
3,515
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
3,407
|
|
|
$
|
9,075
|
|
|
|
|
|
|
||||
Supplemental disclosures of noncash investing activities and cash flow information:
|
|
|
|
|
||||
Acquisition of property, plant, and equipment included in accounts payable and accrued liabilities
|
|
$
|
1,988
|
|
|
$
|
1,736
|
|
Non-marketable equity investment in McAfee from divestiture
|
|
$
|
—
|
|
|
$
|
1,078
|
|
Cash paid during the period for:
|
|
|
|
|
||||
Interest, net of capitalized interest
|
|
$
|
316
|
|
|
$
|
386
|
|
Income taxes, net of refunds
|
|
$
|
2,854
|
|
|
$
|
2,328
|
|
FINANCIAL STATEMENTS
|
Consolidated Condensed Statements of Cash Flows
|
6
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
7
|
•
|
Marketable equity securities
are equity securities with readily determinable fair value (RDFV) that are measured and recorded at fair value. Prior to fiscal 2018, these securities were measured and recorded at fair value and classified as available-for-sale securities.
|
•
|
Non-marketable equity securities
are equity securities without RDFV that are measured and recorded using a measurement alternative which measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. These securities were previously accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment.
|
•
|
Equity method investments
are equity securities in investees we do not control but over which we have the ability to exercise significant influence. Equity method investments are measured at cost minus impairment, if any, plus or minus our share of equity method investee income or loss. Our proportionate share of the income or loss from equity method investments is recognized on a one-quarter lag.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
8
|
|
|
|
|
Adjustments from
|
|
|
||||||||||||||
(In Millions) |
|
Balance as of
Dec 30, 2017 |
|
Revenue Standard
|
|
Financial Instruments Standard
|
|
Other
1
|
|
Opening Balance as of
Dec 31, 2017 |
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable
|
|
$
|
5,607
|
|
|
$
|
(530
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,077
|
|
Inventories
|
|
$
|
6,983
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,030
|
|
Other current assets
|
|
$
|
2,908
|
|
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
2,964
|
|
Equity investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,579
|
|
|
$
|
—
|
|
|
$
|
8,579
|
|
Marketable equity securities
|
|
$
|
4,192
|
|
|
$
|
—
|
|
|
$
|
(4,192
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Other long-term assets
|
|
$
|
7,602
|
|
|
$
|
—
|
|
|
$
|
(4,387
|
)
|
|
$
|
(43
|
)
|
|
$
|
3,172
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred income
|
|
$
|
1,656
|
|
|
$
|
(1,356
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
300
|
|
Other accrued liabilities
|
|
$
|
7,535
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,616
|
|
Deferred income taxes
|
|
$
|
3,046
|
|
|
$
|
191
|
|
|
$
|
—
|
|
|
$
|
(20
|
)
|
|
$
|
3,217
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accumulated other comprehensive income (loss)
|
|
$
|
862
|
|
|
$
|
—
|
|
|
$
|
(1,745
|
)
|
|
$
|
(45
|
)
|
|
$
|
(928
|
)
|
Retained earnings
|
|
$
|
42,083
|
|
|
$
|
665
|
|
|
$
|
1,745
|
|
|
$
|
14
|
|
|
$
|
44,507
|
|
1
|
Includes adjustments from adoption of "Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory" and "Income Statement
—
Reporting Comprehensive Income - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income."
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
9
|
|
|
Three Months Ended September 29, 2018
|
|
Nine Months Ended September 29, 2018
|
||||||||||||||||||||
(In Millions)
|
|
As reported
|
|
Adjustments
|
|
Without new revenue standard
|
|
As reported
|
|
Adjustments
|
|
Without new revenue standard
|
||||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net revenue
|
|
$
|
19,163
|
|
|
$
|
118
|
|
|
$
|
19,281
|
|
|
$
|
52,191
|
|
|
$
|
(266
|
)
|
|
$
|
51,925
|
|
Cost of sales
|
|
6,803
|
|
|
46
|
|
|
6,849
|
|
|
19,681
|
|
|
(136
|
)
|
|
19,545
|
|
||||||
Gross margin
|
|
12,360
|
|
|
72
|
|
|
12,432
|
|
|
32,510
|
|
|
(130
|
)
|
|
32,380
|
|
||||||
Marketing, general and administrative
|
|
1,605
|
|
|
—
|
|
|
1,605
|
|
|
5,230
|
|
|
(70
|
)
|
|
5,160
|
|
||||||
Operating income
|
|
7,349
|
|
|
72
|
|
|
7,421
|
|
|
17,092
|
|
|
(60
|
)
|
|
17,032
|
|
||||||
Income before taxes
|
|
7,142
|
|
|
72
|
|
|
7,214
|
|
|
17,682
|
|
|
(60
|
)
|
|
17,622
|
|
||||||
Provision for taxes
|
|
744
|
|
|
20
|
|
|
764
|
|
|
1,824
|
|
|
(4
|
)
|
|
1,820
|
|
||||||
Net income
|
|
$
|
6,398
|
|
|
$
|
52
|
|
|
$
|
6,450
|
|
|
$
|
15,858
|
|
|
$
|
(56
|
)
|
|
$
|
15,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
As of September 29, 2018
|
||||||||||||||||||||
(In Millions)
|
|
|
|
|
|
|
|
As reported
|
|
Adjustments
|
|
Without new revenue standard
|
||||||||||||
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts receivable
|
|
|
|
|
|
|
|
$
|
5,457
|
|
|
$
|
446
|
|
|
$
|
5,903
|
|
||||||
Inventories
|
|
|
|
|
|
|
|
$
|
7,401
|
|
|
$
|
23
|
|
|
$
|
7,424
|
|
||||||
Other current assets
|
|
|
|
|
|
|
|
$
|
3,546
|
|
|
$
|
4
|
|
|
$
|
3,550
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred income
|
|
|
|
|
|
|
|
$
|
—
|
|
|
$
|
1,668
|
|
|
$
|
1,668
|
|
||||||
Other accrued liabilities
|
|
|
|
|
|
|
|
$
|
9,835
|
|
|
$
|
(334
|
)
|
|
$
|
9,501
|
|
||||||
Deferred income taxes
|
|
|
|
|
|
|
|
$
|
1,485
|
|
|
$
|
(140
|
)
|
|
$
|
1,345
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retained earnings
|
|
|
|
|
|
|
|
$
|
47,094
|
|
|
$
|
(721
|
)
|
|
$
|
46,373
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
10
|
•
|
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, including Mobileye results;
|
•
|
historical results of operations from divested businesses, including Intel Security Group (ISecG) results;
|
•
|
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
|
11
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
||||||||
Client Computing Group
|
|
|
|
|
|
|
|
|
||||||||
Platform
|
|
$
|
9,023
|
|
|
$
|
8,132
|
|
|
$
|
24,703
|
|
|
$
|
23,163
|
|
Adjacent
|
|
1,211
|
|
|
728
|
|
|
2,479
|
|
|
1,886
|
|
||||
|
|
10,234
|
|
|
8,860
|
|
|
27,182
|
|
|
25,049
|
|
||||
Data Center Group
|
|
|
|
|
|
|
|
|
||||||||
Platform
|
|
5,637
|
|
|
4,439
|
|
|
15,561
|
|
|
12,344
|
|
||||
Adjacent
|
|
502
|
|
|
439
|
|
|
1,361
|
|
|
1,138
|
|
||||
|
|
6,139
|
|
|
4,878
|
|
|
16,922
|
|
|
13,482
|
|
||||
Internet of Things Group
|
|
|
|
|
|
|
|
|
||||||||
Platform
|
|
855
|
|
|
680
|
|
|
2,319
|
|
|
1,926
|
|
||||
Adjacent
|
|
64
|
|
|
169
|
|
|
320
|
|
|
364
|
|
||||
|
|
919
|
|
|
849
|
|
|
2,639
|
|
|
2,290
|
|
||||
Non-Volatile Memory Solutions Group
|
|
1,081
|
|
|
891
|
|
|
3,200
|
|
|
2,631
|
|
||||
Programmable Solutions Group
|
|
496
|
|
|
469
|
|
|
1,511
|
|
|
1,334
|
|
||||
All other
|
|
294
|
|
|
202
|
|
|
737
|
|
|
922
|
|
||||
Total net revenue
|
|
$
|
19,163
|
|
|
$
|
16,149
|
|
|
$
|
52,191
|
|
|
$
|
45,708
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Client Computing Group
|
|
$
|
4,532
|
|
|
$
|
3,600
|
|
|
$
|
10,557
|
|
|
$
|
9,656
|
|
Data Center Group
|
|
3,082
|
|
|
2,255
|
|
|
8,421
|
|
|
5,403
|
|
||||
Internet of Things Group
|
|
321
|
|
|
146
|
|
|
791
|
|
|
390
|
|
||||
Non-Volatile Memory Solutions Group
|
|
160
|
|
|
(52
|
)
|
|
14
|
|
|
(291
|
)
|
||||
Programmable Solutions Group
|
|
106
|
|
|
113
|
|
|
304
|
|
|
302
|
|
||||
All other
|
|
(852
|
)
|
|
(921
|
)
|
|
(2,995
|
)
|
|
(2,845
|
)
|
||||
Total operating income
|
|
$
|
7,349
|
|
|
$
|
5,141
|
|
|
$
|
17,092
|
|
|
$
|
12,615
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Platform revenue
|
|
|
|
|
|
|
|
|
||||||||
Desktop platform
|
|
$
|
3,225
|
|
|
$
|
2,967
|
|
|
$
|
9,087
|
|
|
$
|
8,598
|
|
Notebook platform
|
|
5,774
|
|
|
5,123
|
|
|
15,549
|
|
|
14,437
|
|
||||
DCG platform
|
|
5,637
|
|
|
4,439
|
|
|
15,561
|
|
|
12,344
|
|
||||
Other platform
1
|
|
879
|
|
|
722
|
|
|
2,386
|
|
|
2,054
|
|
||||
|
|
15,515
|
|
|
13,251
|
|
|
42,583
|
|
|
37,433
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Adjacent revenue
2
|
|
3,648
|
|
|
2,898
|
|
|
9,608
|
|
|
7,741
|
|
||||
ISecG divested business
|
|
—
|
|
|
—
|
|
|
—
|
|
|
534
|
|
||||
Total revenue
|
|
$
|
19,163
|
|
|
$
|
16,149
|
|
|
$
|
52,191
|
|
|
$
|
45,708
|
|
1
|
Includes our tablet, service provider, and IOTG platform revenue.
|
2
|
Includes 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.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
12
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions, Except Per Share Amounts)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Net income available to common stockholders
|
|
$
|
6,398
|
|
|
$
|
4,516
|
|
|
$
|
15,858
|
|
|
$
|
10,288
|
|
Weighted average shares of common stock outstanding – basic
|
|
4,574
|
|
|
4,688
|
|
|
4,632
|
|
|
4,707
|
|
||||
Dilutive effect of employee equity incentive plans
|
|
40
|
|
|
34
|
|
|
52
|
|
|
43
|
|
||||
Dilutive effect of convertible debt
|
|
34
|
|
|
99
|
|
|
44
|
|
|
99
|
|
||||
Weighted average shares of common stock outstanding – diluted
|
|
4,648
|
|
|
4,821
|
|
|
4,728
|
|
|
4,849
|
|
||||
Earnings per share – Basic
|
|
$
|
1.40
|
|
|
$
|
0.96
|
|
|
$
|
3.42
|
|
|
$
|
2.19
|
|
Earnings per share – Diluted
|
|
$
|
1.38
|
|
|
$
|
0.94
|
|
|
$
|
3.35
|
|
|
$
|
2.12
|
|
(In Millions)
|
|
Sep 29,
2018 |
|
Opening Balance as of Dec 31, 2017
|
||||
Contract liabilities from prepaid supply agreements
|
|
$
|
2,692
|
|
|
$
|
105
|
|
Contract liabilities from software, services and other
|
|
93
|
|
|
195
|
|
||
Total contract liabilities
|
|
$
|
2,785
|
|
|
$
|
300
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
13
|
(In Millions)
|
|
Sep 29,
2018 |
|
Dec 30,
2017 |
||||
Raw materials
|
|
$
|
932
|
|
|
$
|
738
|
|
Work in process
|
|
4,507
|
|
|
4,213
|
|
||
Finished goods
|
|
1,962
|
|
|
2,032
|
|
||
Total inventories
|
|
$
|
7,401
|
|
|
$
|
6,983
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Interest income
|
|
$
|
109
|
|
|
$
|
137
|
|
|
$
|
308
|
|
|
$
|
349
|
|
Interest expense
|
|
(109
|
)
|
|
(191
|
)
|
|
(337
|
)
|
|
(493
|
)
|
||||
Other, net
|
|
(132
|
)
|
|
(3
|
)
|
|
254
|
|
|
406
|
|
||||
Total interest and other, net
|
|
$
|
(132
|
)
|
|
$
|
(57
|
)
|
|
$
|
225
|
|
|
$
|
262
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
14
|
|
|
September 29, 2018
|
|
December 30, 2017
|
||||||||||||||||||||||||||||
(In Millions)
|
|
Adjusted Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Adjusted Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||||||||||
Corporate debt
|
|
$
|
2,647
|
|
|
$
|
2
|
|
|
$
|
(29
|
)
|
|
$
|
2,620
|
|
|
$
|
2,294
|
|
|
$
|
4
|
|
|
$
|
(13
|
)
|
|
$
|
2,285
|
|
Financial institution instruments
|
|
3,647
|
|
|
3
|
|
|
(18
|
)
|
|
3,632
|
|
|
3,387
|
|
|
3
|
|
|
(9
|
)
|
|
3,381
|
|
||||||||
Government debt
|
|
940
|
|
|
—
|
|
|
(14
|
)
|
|
926
|
|
|
961
|
|
|
—
|
|
|
(6
|
)
|
|
955
|
|
||||||||
Total available-for-sale debt investments
|
|
$
|
7,234
|
|
|
$
|
5
|
|
|
$
|
(61
|
)
|
|
$
|
7,178
|
|
|
$
|
6,642
|
|
|
$
|
7
|
|
|
$
|
(28
|
)
|
|
$
|
6,621
|
|
(In Millions)
|
|
Fair Value
|
||
Due in 1 year or less
|
|
$
|
3,138
|
|
Due in 1–2 years
|
|
782
|
|
|
Due in 2–5 years
|
|
2,662
|
|
|
Due after 5 years
|
|
118
|
|
|
Instruments not due at a single maturity date
|
|
478
|
|
|
Total
|
|
$
|
7,178
|
|
(In Millions)
|
|
Sep 29,
2018 |
|
Dec 30,
2017 |
||||
Marketable equity securities
|
|
$
|
3,039
|
|
|
$
|
4,192
|
|
Non-marketable equity securities
|
|
2,878
|
|
|
2,613
|
|
||
Equity method investments
|
|
1,634
|
|
|
1,774
|
|
||
Total
|
|
$
|
7,551
|
|
|
$
|
8,579
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
15
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Initial mark to market adjustments on marketable equity securities
1 2
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46
|
|
|
$
|
—
|
|
Ongoing mark to market adjustments on marketable equity
securities
1 2
|
|
8
|
|
|
—
|
|
|
379
|
|
|
—
|
|
||||
Gains (losses) on sales
2
|
|
57
|
|
|
944
|
|
|
68
|
|
|
2,020
|
|
||||
Observable price adjustments on non-marketable equity securities
2
|
|
43
|
|
|
—
|
|
|
191
|
|
|
—
|
|
||||
Impairments
|
|
(328
|
)
|
|
(10
|
)
|
|
(372
|
)
|
|
(613
|
)
|
||||
Share of equity method investee gains (losses)
|
|
—
|
|
|
(110
|
)
|
|
(152
|
)
|
|
(129
|
)
|
||||
Dividends
|
|
1
|
|
|
—
|
|
|
39
|
|
|
68
|
|
||||
Other
|
|
144
|
|
|
22
|
|
|
166
|
|
|
94
|
|
||||
Total gains (losses) on equity investments, net
|
|
$
|
(75
|
)
|
|
$
|
846
|
|
|
$
|
365
|
|
|
$
|
1,440
|
|
1
|
Initial mark to market adjustments refers to the fair value adjustment recorded upon a security becoming marketable, generally as a result of an initial public offering (IPO), whereas ongoing mark to market adjustments refers to all post-IPO mark to market adjustments.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
(In Millions)
|
|
Sep 29,
2018 |
|
Sep 29,
2018 |
||||
Net gains (losses) recognized during the period on equity securities
|
|
$
|
(75
|
)
|
|
$
|
518
|
|
Less: Net (gains) losses recognized during the period on equity securities sold during the period
|
|
(225
|
)
|
|
(463
|
)
|
||
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date
|
|
$
|
(300
|
)
|
|
$
|
55
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
16
|
|
|
September 29, 2018
|
||||||||||
(In Millions)
|
|
Gross Assets
|
|
Accumulated
Amortization |
|
Net
|
||||||
Acquisition-related developed technology
|
|
$
|
9,611
|
|
|
$
|
(2,742
|
)
|
|
$
|
6,869
|
|
Acquisition-related customer relationships
|
|
2,036
|
|
|
(433
|
)
|
|
1,603
|
|
|||
Acquisition-related brands
|
|
143
|
|
|
(44
|
)
|
|
99
|
|
|||
Licensed technology and patents
|
|
3,052
|
|
|
(1,505
|
)
|
|
1,547
|
|
|||
Identified intangible assets subject to amortization
|
|
14,842
|
|
|
(4,724
|
)
|
|
10,118
|
|
|||
In-process research and development
|
|
1,497
|
|
|
—
|
|
|
1,497
|
|
|||
Other intangible assets
|
|
392
|
|
|
—
|
|
|
392
|
|
|||
Identified intangible assets not subject to amortization
|
|
1,889
|
|
|
—
|
|
|
1,889
|
|
|||
Total identified intangible assets
|
|
$
|
16,731
|
|
|
$
|
(4,724
|
)
|
|
$
|
12,007
|
|
|
|
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
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Location
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Acquisition-related developed technology
|
|
Cost of sales
|
|
$
|
276
|
|
|
$
|
243
|
|
|
$
|
826
|
|
|
$
|
650
|
|
Acquisition-related customer relationships
|
|
Amortization of acquisition-related intangibles
|
|
45
|
|
|
45
|
|
|
135
|
|
|
113
|
|
||||
Acquisition-related brands
|
|
Amortization of acquisition-related intangibles
|
|
5
|
|
|
4
|
|
|
15
|
|
|
11
|
|
||||
Licensed technology and patents
|
|
Cost of sales
|
|
64
|
|
|
73
|
|
|
196
|
|
|
225
|
|
||||
Total amortization expenses
|
|
|
|
$
|
390
|
|
|
$
|
365
|
|
|
$
|
1,172
|
|
|
$
|
999
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
17
|
(In Millions)
|
|
Remainder of 2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
||||||||||
Acquisition-related developed technology
|
|
$
|
279
|
|
|
$
|
1,114
|
|
|
$
|
1,082
|
|
|
$
|
1,047
|
|
|
$
|
1,008
|
|
Acquisition-related customer relationships
|
|
45
|
|
|
180
|
|
|
179
|
|
|
179
|
|
|
171
|
|
|||||
Acquisition-related brands
|
|
5
|
|
|
20
|
|
|
20
|
|
|
20
|
|
|
6
|
|
|||||
Licensed technology and patents
|
|
64
|
|
|
241
|
|
|
210
|
|
|
198
|
|
|
193
|
|
|||||
Total future amortization expenses
|
|
$
|
393
|
|
|
$
|
1,555
|
|
|
$
|
1,491
|
|
|
$
|
1,444
|
|
|
$
|
1,378
|
|
(In Millions)
|
|
Sep 29,
2018 |
|
Dec 30,
2017 |
||||
Non-current deferred tax assets
|
|
$
|
1,011
|
|
|
$
|
840
|
|
Pre-payments for property, plant and equipment
|
|
1,383
|
|
|
714
|
|
||
Loans receivable
|
|
544
|
|
|
860
|
|
||
Other
|
|
1,017
|
|
|
801
|
|
||
Total other long-term assets
|
|
$
|
3,955
|
|
|
$
|
3,215
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
18
|
|
|
September 29, 2018
|
|
December 30, 2017
|
||||||||||||||||||||||||||||
|
|
Fair Value Measured and
Recorded at Reporting Date Using
|
|
|
Fair Value Measured and
Recorded at Reporting Date Using
|
|
||||||||||||||||||||||||||
(In Millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
$
|
—
|
|
|
$
|
179
|
|
|
$
|
—
|
|
|
$
|
179
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
30
|
|
Financial institution instruments
1
|
|
478
|
|
|
318
|
|
|
—
|
|
|
796
|
|
|
335
|
|
|
640
|
|
|
—
|
|
|
975
|
|
||||||||
Government debt
2
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
||||||||
Reverse repurchase agreements
|
|
—
|
|
|
1,949
|
|
|
—
|
|
|
1,949
|
|
|
—
|
|
|
1,399
|
|
|
—
|
|
|
1,399
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
—
|
|
|
573
|
|
|
—
|
|
|
573
|
|
|
—
|
|
|
672
|
|
|
3
|
|
|
675
|
|
||||||||
Financial institution instruments
1
|
|
—
|
|
|
1,740
|
|
|
—
|
|
|
1,740
|
|
|
—
|
|
|
1,009
|
|
|
—
|
|
|
1,009
|
|
||||||||
Government debt
2
|
|
—
|
|
|
328
|
|
|
—
|
|
|
328
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
130
|
|
||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
Corporate debt
|
|
—
|
|
|
2,562
|
|
|
—
|
|
|
2,562
|
|
|
—
|
|
|
2,842
|
|
|
—
|
|
|
2,842
|
|
||||||||
Financial institution instruments
1
|
|
29
|
|
|
1,299
|
|
|
—
|
|
|
1,328
|
|
|
59
|
|
|
1,064
|
|
|
—
|
|
|
1,123
|
|
||||||||
Government debt
2
|
|
28
|
|
|
3,220
|
|
|
—
|
|
|
3,248
|
|
|
30
|
|
|
4,758
|
|
|
—
|
|
|
4,788
|
|
||||||||
Other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets
|
|
—
|
|
|
150
|
|
|
—
|
|
|
150
|
|
|
—
|
|
|
279
|
|
|
—
|
|
|
279
|
|
||||||||
Loans receivable
3
|
|
—
|
|
|
304
|
|
|
—
|
|
|
304
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||||||
Marketable equity securities
|
|
3,039
|
|
|
—
|
|
|
—
|
|
|
3,039
|
|
|
4,148
|
|
|
44
|
|
|
—
|
|
|
4,192
|
|
||||||||
Other long-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
—
|
|
|
1,868
|
|
|
—
|
|
|
1,868
|
|
|
—
|
|
|
1,576
|
|
|
4
|
|
|
1,580
|
|
||||||||
Financial institution instruments
1
|
|
—
|
|
|
1,096
|
|
|
—
|
|
|
1,096
|
|
|
—
|
|
|
1,397
|
|
|
—
|
|
|
1,397
|
|
||||||||
Government debt
2
|
|
—
|
|
|
598
|
|
|
—
|
|
|
598
|
|
|
—
|
|
|
735
|
|
|
—
|
|
|
735
|
|
||||||||
Other long-term assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets
|
|
—
|
|
|
47
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
77
|
|
|
7
|
|
|
84
|
|
||||||||
Loans receivable
3
|
|
—
|
|
|
294
|
|
|
—
|
|
|
294
|
|
|
—
|
|
|
610
|
|
|
—
|
|
|
610
|
|
||||||||
Total assets measured and recorded at fair value
|
|
3,574
|
|
|
16,525
|
|
|
—
|
|
|
20,099
|
|
|
4,572
|
|
|
17,384
|
|
|
14
|
|
|
21,970
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other accrued liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
—
|
|
|
464
|
|
|
—
|
|
|
464
|
|
|
—
|
|
|
454
|
|
|
—
|
|
|
454
|
|
||||||||
Other long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
—
|
|
|
761
|
|
|
106
|
|
|
867
|
|
|
—
|
|
|
297
|
|
|
6
|
|
|
303
|
|
||||||||
Total liabilities measured and recorded at fair value
|
|
$
|
—
|
|
|
$
|
1,225
|
|
|
$
|
106
|
|
|
$
|
1,331
|
|
|
$
|
—
|
|
|
$
|
751
|
|
|
$
|
6
|
|
|
$
|
757
|
|
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.
|
3
|
The fair value of our loans receivable for which we elected the fair value option
did not significantly
differ from the contractual principal balance based on the contractual currency.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
19
|
(In Millions)
|
|
Unrealized Holding Gains (Losses) on Available-for-Sale Equity Investments
|
|
Unrealized Holding Gains (Losses) on Derivatives
|
|
Actuarial Valuation and Other Pension Expenses
|
|
Translation adjustments and other
|
|
Total
|
||||||||||
Balance as of December 30, 2017
|
|
$
|
1,745
|
|
|
$
|
106
|
|
|
$
|
(963
|
)
|
|
$
|
(26
|
)
|
|
$
|
862
|
|
Impact of change in accounting standards
|
|
(1,745
|
)
|
|
24
|
|
|
(65
|
)
|
|
(4
|
)
|
|
(1,790
|
)
|
|||||
Opening Balance as of December 31, 2017
|
|
$
|
—
|
|
|
$
|
130
|
|
|
$
|
(1,028
|
)
|
|
$
|
(30
|
)
|
|
$
|
(928
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
—
|
|
|
(203
|
)
|
|
3
|
|
|
(31
|
)
|
|
(231
|
)
|
|||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
—
|
|
|
(55
|
)
|
|
48
|
|
|
8
|
|
|
1
|
|
|||||
Tax effects
|
|
—
|
|
|
59
|
|
|
(12
|
)
|
|
8
|
|
|
55
|
|
|||||
Other comprehensive income (loss)
|
|
—
|
|
|
(199
|
)
|
|
39
|
|
|
(15
|
)
|
|
(175
|
)
|
|||||
Balance as of September 29, 2018
|
|
$
|
—
|
|
|
$
|
(69
|
)
|
|
$
|
(989
|
)
|
|
$
|
(45
|
)
|
|
$
|
(1,103
|
)
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
20
|
|
|
|
|
Income Before Taxes Impact
(In Millions) |
||||||||||||||
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Comprehensive Income Components
|
|
Location
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Unrealized holding gains (losses) on available-for-sale equity investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Gains (losses) on equity investments, net
|
|
$
|
—
|
|
|
$
|
916
|
|
|
$
|
—
|
|
|
$
|
1,962
|
|
|
|
|
|
—
|
|
|
916
|
|
|
—
|
|
|
1,962
|
|
||||
Unrealized holding gains (losses) on derivatives:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
Cost of sales
|
|
(14
|
)
|
|
(13
|
)
|
|
5
|
|
|
(60
|
)
|
||||
|
|
Research and development
|
|
(11
|
)
|
|
24
|
|
|
60
|
|
|
10
|
|
||||
|
|
Marketing, general and administrative
|
|
(1
|
)
|
|
4
|
|
|
31
|
|
|
(2
|
)
|
||||
|
|
Gains (losses) on equity investments, net
|
|
—
|
|
|
12
|
|
|
—
|
|
|
28
|
|
||||
|
|
Interest and other, net
|
|
(6
|
)
|
|
17
|
|
|
(41
|
)
|
|
52
|
|
||||
|
|
|
|
(32
|
)
|
|
44
|
|
|
55
|
|
|
28
|
|
||||
Amortization of pension and postretirement benefit components:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Actuarial valuation and other pension expenses
|
|
|
|
—
|
|
|
(18
|
)
|
|
(48
|
)
|
|
(46
|
)
|
||||
|
|
|
|
—
|
|
|
(18
|
)
|
|
(48
|
)
|
|
(46
|
)
|
||||
Translation adjustments and other
|
|
Interest and other, net
|
|
(2
|
)
|
|
—
|
|
|
(8
|
)
|
|
(507
|
)
|
||||
Total amounts reclassified out of accumulated other comprehensive income (loss)
|
|
|
|
$
|
(34
|
)
|
|
$
|
942
|
|
|
$
|
(1
|
)
|
|
$
|
1,437
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
21
|
(In Millions)
|
|
Sep 29,
2018 |
|
Dec 30,
2017 |
||||
Foreign currency contracts
|
|
$
|
19,179
|
|
|
$
|
19,958
|
|
Interest rate contracts
|
|
22,936
|
|
|
16,823
|
|
||
Other
|
|
1,539
|
|
|
1,636
|
|
||
Total
|
|
$
|
43,654
|
|
|
$
|
38,417
|
|
|
|
September 29, 2018
|
|
December 30, 2017
|
||||||||||||
(In Millions)
|
|
Assets
1
|
|
Liabilities
2
|
|
Assets
1
|
|
Liabilities
2
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
3
|
|
$
|
59
|
|
|
$
|
221
|
|
|
$
|
283
|
|
|
$
|
32
|
|
Interest rate contracts
|
|
—
|
|
|
853
|
|
|
1
|
|
|
254
|
|
||||
Total derivatives designated as hedging instruments
|
|
59
|
|
|
1,074
|
|
|
284
|
|
|
286
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
3
|
|
105
|
|
|
236
|
|
|
52
|
|
|
447
|
|
||||
Interest rate contracts
|
|
31
|
|
|
21
|
|
|
18
|
|
|
24
|
|
||||
Other
|
|
2
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Total derivatives not designated as hedging instruments
|
|
138
|
|
|
257
|
|
|
79
|
|
|
471
|
|
||||
Total derivatives
|
|
$
|
197
|
|
|
$
|
1,331
|
|
|
$
|
363
|
|
|
$
|
757
|
|
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
|
22
|
|
|
September 29, 2018
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
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
|
|
$
|
193
|
|
|
$
|
—
|
|
|
$
|
193
|
|
|
$
|
(133
|
)
|
|
$
|
(60
|
)
|
|
$
|
—
|
|
Reverse repurchase agreements
|
|
2,199
|
|
|
—
|
|
|
2,199
|
|
|
—
|
|
|
(2,099
|
)
|
|
100
|
|
||||||
Total assets
|
|
2,392
|
|
|
—
|
|
|
2,392
|
|
|
(133
|
)
|
|
(2,159
|
)
|
|
100
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities subject to master netting arrangements
|
|
1,315
|
|
|
—
|
|
|
1,315
|
|
|
(133
|
)
|
|
(1,038
|
)
|
|
144
|
|
||||||
Total liabilities
|
|
$
|
1,315
|
|
|
$
|
—
|
|
|
$
|
1,315
|
|
|
$
|
(133
|
)
|
|
$
|
(1,038
|
)
|
|
$
|
144
|
|
|
|
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
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
23
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Interest rate contracts
|
|
$
|
(230
|
)
|
|
$
|
(15
|
)
|
|
$
|
(601
|
)
|
|
$
|
67
|
|
Hedged items
|
|
230
|
|
|
15
|
|
|
601
|
|
|
(67
|
)
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Line Item in the Consolidated Condensed 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) |
|
Sep 29,
2018 |
|
Dec 30,
2017 |
|
Sep 29,
2018 |
|
Dec 30,
2017 |
||||||||
Long-term debt
|
|
$
|
(19,159
|
)
|
|
$
|
(12,653
|
)
|
|
$
|
853
|
|
|
$
|
252
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Location of Gains (Losses)
Recognized in Income on Derivatives
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||||||
Foreign currency contracts
|
|
Interest and other, net
|
|
$
|
(1
|
)
|
|
$
|
(91
|
)
|
|
$
|
268
|
|
|
$
|
(521
|
)
|
Interest rate contracts
|
|
Interest and other, net
|
|
3
|
|
|
(3
|
)
|
|
22
|
|
|
(4
|
)
|
||||
Other
|
|
Various
|
|
53
|
|
|
40
|
|
|
49
|
|
|
135
|
|
||||
Total
|
|
|
|
$
|
55
|
|
|
$
|
(54
|
)
|
|
$
|
339
|
|
|
$
|
(390
|
)
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
24
|
|
|
Number of
RSUs
(In Millions)
|
|
Weighted Average
Grant-Date
Fair Value
|
|||
December 30, 2017
|
|
100.4
|
|
|
$
|
32.36
|
|
Granted
|
|
33.7
|
|
|
$
|
49.33
|
|
Vested
|
|
(36.4
|
)
|
|
$
|
31.07
|
|
Forfeited
|
|
(6.2
|
)
|
|
$
|
35.60
|
|
September 29, 2018
|
|
91.5
|
|
|
$
|
38.90
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
25
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
26
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
27
|
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) -
RESULTS OF OPERATIONS
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||
|
|
Q3 2018
|
|
Q3 2017
|
|
YTD 2018
|
|
YTD 2017
|
||||||||||||||||||||
(Dollars in Millions, Except Per Share Amounts)
|
|
Dollars
|
|
% of Net
Revenue |
|
Dollars
|
|
% of Net
Revenue |
|
Dollars
|
|
% of Net
Revenue |
|
Dollars
|
|
% of Net
Revenue |
||||||||||||
Net revenue
|
|
$
|
19,163
|
|
|
100.0
|
%
|
|
$
|
16,149
|
|
|
100.0
|
%
|
|
$
|
52,191
|
|
|
100.0
|
%
|
|
$
|
45,708
|
|
|
100.0
|
%
|
Cost of sales
|
|
6,803
|
|
|
35.5
|
%
|
|
6,085
|
|
|
37.7
|
%
|
|
19,681
|
|
|
37.7
|
%
|
|
17,388
|
|
|
38.0
|
%
|
||||
Gross margin
|
|
12,360
|
|
|
64.5
|
%
|
|
10,064
|
|
|
62.3
|
%
|
|
32,510
|
|
|
62.3
|
%
|
|
28,320
|
|
|
62.0
|
%
|
||||
Research and development
|
|
3,428
|
|
|
17.9
|
%
|
|
3,209
|
|
|
19.9
|
%
|
|
10,110
|
|
|
19.4
|
%
|
|
9,782
|
|
|
21.4
|
%
|
||||
Marketing, general and administrative
|
|
1,605
|
|
|
8.4
|
%
|
|
1,661
|
|
|
10.3
|
%
|
|
5,230
|
|
|
10.0
|
%
|
|
5,610
|
|
|
12.3
|
%
|
||||
Restructuring and other charges
|
|
(72
|
)
|
|
(0.4
|
)%
|
|
4
|
|
|
—
|
%
|
|
(72
|
)
|
|
(0.1
|
)%
|
|
189
|
|
|
0.4
|
%
|
||||
Amortization of acquisition-related intangibles
|
|
50
|
|
|
0.3
|
%
|
|
49
|
|
|
0.3
|
%
|
|
150
|
|
|
0.3
|
%
|
|
124
|
|
|
0.3
|
%
|
||||
Operating income
|
|
7,349
|
|
|
38.3
|
%
|
|
5,141
|
|
|
31.8
|
%
|
|
17,092
|
|
|
32.7
|
%
|
|
12,615
|
|
|
27.6
|
%
|
||||
Gains (losses) on equity investments, net
|
|
(75
|
)
|
|
(0.4
|
)%
|
|
846
|
|
|
5.2
|
%
|
|
365
|
|
|
0.7
|
%
|
|
1,440
|
|
|
3.2
|
%
|
||||
Interest and other, net
|
|
(132
|
)
|
|
(0.7
|
)%
|
|
(57
|
)
|
|
(0.4
|
)%
|
|
225
|
|
|
0.4
|
%
|
|
262
|
|
|
0.6
|
%
|
||||
Income before taxes
|
|
7,142
|
|
|
37.3
|
%
|
|
5,930
|
|
|
36.7
|
%
|
|
17,682
|
|
|
33.9
|
%
|
|
14,317
|
|
|
31.3
|
%
|
||||
Provision for taxes
|
|
744
|
|
|
3.9
|
%
|
|
1,414
|
|
|
8.8
|
%
|
|
1,824
|
|
|
3.5
|
%
|
|
4,029
|
|
|
8.8
|
%
|
||||
Net income
|
|
$
|
6,398
|
|
|
33.4
|
%
|
|
$
|
4,516
|
|
|
28.0
|
%
|
|
$
|
15,858
|
|
|
30.4
|
%
|
|
$
|
10,288
|
|
|
22.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share – Diluted
|
|
$
|
1.38
|
|
|
|
|
$
|
0.94
|
|
|
|
|
$
|
3.35
|
|
|
|
|
$
|
2.12
|
|
|
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results & Analysis
|
28
|
|
SEGMENT REVENUE WALKS
|
||
|
Q3 2018 vs. Q3 2017
|
|
YTD 2018 vs. YTD 2017
|
Q3 2018 vs. Q3 2017
|
YTD 2018 vs. YTD 2017
|
|
GROSS MARGIN
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results & Analysis
|
29
|
(In Millions)
|
|
Gross Margin Walk
|
||
$
|
12,360
|
|
|
Q3 2018 Gross Margin
|
2,100
|
|
|
Higher gross margin from platform revenue
|
|
315
|
|
|
Higher gross margin from adjacent businesses primarily from memory and modem
|
|
305
|
|
|
Higher margin primarily from sell-through of previously reserved and non-qualified platform products
|
|
(390
|
)
|
|
Higher platform unit costs, primarily from increased mix to performance products
|
|
(34
|
)
|
|
Other
|
|
$
|
10,064
|
|
|
Q3 2017 Gross Margin
|
|
|
|
||
$
|
32,510
|
|
|
YTD 2018 Gross Margin
|
4,800
|
|
|
Higher gross margin from platform revenue
|
|
230
|
|
|
Higher margin primarily from sell-through of previously reserved and non-qualified platform products
|
|
(835
|
)
|
|
Higher platform unit cost primarily from increased mix to performance products
|
|
(5
|
)
|
|
Other
|
|
$
|
28,320
|
|
|
YTD 2017 Gross Margin
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results & Analysis
|
30
|
|
RESEARCH AND DEVELOPMENT
|
|
MARKETING, GENERAL AND ADMINISTRATIVE
|
Q3 2018 vs. Q3 2017
|
YTD 2018 vs. YTD 2017
|
Q3 2018 vs. Q3 2017
|
YTD 2018 vs. YTD 2017
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results & Analysis
|
31
|
|
CCG REVENUE
|
|
CCG OPERATING INCOME
|
|
■
Platform
|
■
Adjacent
|
(In Millions)
|
|
CCG Revenue Walk
|
||
$
|
10,234
|
|
|
Q3 2018 CCG Revenue
|
483
|
|
|
Higher adjacent revenue, primarily from modem products
|
|
430
|
|
|
Higher notebook platform volume
|
|
300
|
|
|
Higher desktop platform ASP
|
|
221
|
|
|
Higher notebook platform ASP
|
|
(60
|
)
|
|
Other
|
|
$
|
8,860
|
|
|
Q3 2017 CCG Revenue
|
|
|
|
||
$
|
27,182
|
|
|
YTD 2018 CCG Revenue
|
805
|
|
|
Higher desktop platform ASP
|
|
755
|
|
|
Higher notebook platform volume
|
|
593
|
|
|
Higher adjacent revenue, primarily from modem products
|
|
357
|
|
|
Higher notebook platform ASP
|
|
(316
|
)
|
|
Lower desktop platform volume
|
|
(60
|
)
|
|
Other
|
|
$
|
25,049
|
|
|
YTD 2017 CCG Revenue
|
MD&A - RESULTS OF OPERATIONS
|
Segment Results & Analysis
|
32
|
Key Revenue Metrics
|
|
|
|
|
|||
|
|
|
Q3 2018 vs. Q3 2017
|
|
YTD 2018 vs. YTD 2017
|
||
Desktop Platform
|
|
|
|
|
|
|
|
|
Volume
|
|
up
|
1%
|
|
down
|
(5)%
|
|
ASP
|
|
up
|
10%
|
|
up
|
10%
|
|
|
|
|
|
|
|
|
Notebook Platform
|
|
|
|
|
|
|
|
|
Volume
|
|
up
|
8%
|
|
up
|
5%
|
|
ASP
|
|
up
|
4%
|
|
up
|
2%
|
|
|
|
|
|
|
|
|
Adjacent Products
|
|
|
|
|
|
|
|
|
Revenue
|
|
up
|
66%
|
|
up
|
31%
|
(In Millions)
|
|
CCG Operating Income Walk
|
||
$
|
4,532
|
|
|
Q3 2018 CCG Operating Income
|
840
|
|
|
Higher gross margin from CCG platform revenue
|
|
240
|
|
|
Higher margin primarily from sell-through of previously reserved and non-qualified platform products
|
|
205
|
|
|
Higher CCG adjacent product margin, primarily from sell-through of previously non-qualified modem
|
|
(215
|
)
|
|
Higher CCG platform unit cost primarily from increased mix to performance products
|
|
(140
|
)
|
|
Higher period charges primarily associated with factory startup costs as we continue to ramp 10nm process technology
|
|
2
|
|
|
Other
|
|
$
|
3,600
|
|
|
Q3 2017 CCG Operating Income
|
|
|
|
||
$
|
10,557
|
|
|
YTD 2018 CCG Operating Income
|
1,540
|
|
|
Higher gross margin from CCG platform revenue
|
|
(505
|
)
|
|
Higher CCG platform unit cost due to increased mix to performance products
|
|
(400
|
)
|
|
Higher period charges primarily associated with factory startup costs and engineering samples as we continue to ramp 10nm process technology
|
|
266
|
|
|
Other
|
|
$
|
9,656
|
|
|
YTD 2017 CCG Operating Income
|
|
DCG REVENUE
|
|
DCG OPERATING INCOME
|
|
■
Platform
|
■
Adjacent
|
MD&A - RESULTS OF OPERATIONS
|
Segment Results & Analysis
|
33
|
(In Millions)
|
|
DCG Revenue Walk
|
||
$
|
6,139
|
|
|
Q3 2018 DCG Revenue
|
673
|
|
|
Higher DCG platform volume
|
|
525
|
|
|
Higher DCG platform ASP
|
|
63
|
|
|
Adjacent revenue
|
|
$
|
4,878
|
|
|
Q3 2017 DCG Revenue
|
|
|
|
||
$
|
16,922
|
|
|
YTD 2018 DCG Revenue
|
1,854
|
|
|
Higher DCG platform volume
|
|
1,363
|
|
|
Higher DCG platform ASP
|
|
223
|
|
|
Adjacent revenue
|
|
$
|
13,482
|
|
|
YTD 2017 DCG Revenue
|
(In Millions)
|
|
DCG Operating Income Walk
|
||
$
|
3,082
|
|
|
Q3 2018 DCG Operating Income
|
1,120
|
|
|
Higher gross margin from DCG platform revenue
|
|
(145
|
)
|
|
Higher DCG platform unit cost
|
|
(130
|
)
|
|
Higher DCG operating expenses
|
|
(18
|
)
|
|
Other
|
|
$
|
2,255
|
|
|
Q3 2017 DCG Operating Income
|
|
|
|
||
$
|
8,421
|
|
|
YTD 2018 DCG Operating Income
|
2,995
|
|
|
Higher gross margin from DCG platform revenue
|
|
230
|
|
|
Lower factory start-up costs, primarily associated with our 10nm process technology
|
|
(320
|
)
|
|
Higher DCG platform unit cost
|
|
113
|
|
|
Other
|
|
$
|
5,403
|
|
|
YTD 2017 DCG Operating Income
|
MD&A - RESULTS OF OPERATIONS
|
Segment Results & Analysis
|
34
|
|
IOTG REVENUE
|
|
IOTG OPERATING INCOME
|
|
■
Platform
|
■
Adjacent
|
Q3 2018 vs. Q3 2017
|
YTD 2018 vs. YTD 2017
|
MD&A - RESULTS OF OPERATIONS
|
Segment Results & Analysis
|
35
|
|
NSG REVENUE
|
|
NSG OPERATING INCOME
|
Q3 2018 vs. Q3 2017
|
YTD 2018 vs. YTD 2017
|
|
PSG REVENUE
|
|
PSG OPERATING INCOME
|
MD&A - RESULTS OF OPERATIONS
|
Segment Results & Analysis
|
36
|
Q3 2018 vs. Q3 2017
|
YTD 2018 vs. YTD 2017
|
(In Millions)
|
|
Q3 2018
|
|
Q3 2017
|
|
YTD 2018
|
|
YTD 2017
|
||||||||
Gains (losses) on equity investments, net
|
|
$
|
(75
|
)
|
|
$
|
846
|
|
|
$
|
365
|
|
|
$
|
1,440
|
|
Interest and other, net
|
|
$
|
(132
|
)
|
|
$
|
(57
|
)
|
|
$
|
225
|
|
|
$
|
262
|
|
(Dollars in Millions)
|
|
Q3 2018
|
|
Q3 2017
|
|
YTD 2018
|
|
YTD 2017
|
||||||||
Income before taxes
|
|
$
|
7,142
|
|
|
$
|
5,930
|
|
|
$
|
17,682
|
|
|
$
|
14,317
|
|
Provision for taxes
|
|
$
|
744
|
|
|
$
|
1,414
|
|
|
$
|
1,824
|
|
|
$
|
4,029
|
|
Effective tax rate
|
|
10.4
|
%
|
|
23.8
|
%
|
|
10.3
|
%
|
|
28.1
|
%
|
MD&A - RESULTS OF OPERATIONS
|
Segment Results & Analysis
|
37
|
(Dollars in Millions)
|
|
Sep 29,
2018 |
|
Dec 30,
2017 |
||||
Cash and cash equivalents, short-term investments, and trading assets
|
|
$
|
13,186
|
|
|
$
|
14,002
|
|
Other long-term investments
|
|
$
|
3,562
|
|
|
$
|
3,712
|
|
Loans receivable and other
|
|
$
|
1,404
|
|
|
$
|
1,097
|
|
Reverse repurchase agreements with original maturities greater than three months
|
|
$
|
250
|
|
|
$
|
250
|
|
Total debt
|
|
$
|
27,874
|
|
|
$
|
26,813
|
|
Temporary equity
|
|
$
|
515
|
|
|
$
|
866
|
|
Debt as percentage of permanent stockholders’ equity
|
|
39.0
|
%
|
|
38.8
|
%
|
|
CASH FROM OPERATIONS $B
|
|
CAPITAL EXPENDITURES $B
|
|
CASH TO STOCKHOLDERS $B
|
|
|
|
|
■
Dividends
■
Buybacks
|
|
|
Nine Months Ended
|
||||||
(In Millions)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||
Net cash provided by operating activities
|
|
$
|
22,532
|
|
|
$
|
14,869
|
|
Net cash used for investing activities
|
|
(9,419
|
)
|
|
(10,532
|
)
|
||
Net cash provided by (used for) financing activities
|
|
(13,139
|
)
|
|
(822
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
(26
|
)
|
|
$
|
3,515
|
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results & Analysis
|
38
|
MD&A - RESULTS OF OPERATIONS
|
Consolidated Results & Analysis
|
39
|
OTHER KEY INFORMATION
|
OTHER KEY INFORMATION
|
|
40
|
|
|
Three Months Ended
|
||||||
(In Millions)
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||
Operating income
|
|
$
|
7,349
|
|
|
$
|
5,141
|
|
Inventory valuation adjustments
|
|
—
|
|
|
27
|
|
||
Amortization of acquisition-related intangible assets
|
|
326
|
|
|
292
|
|
||
Other acquisition-related charges
|
|
—
|
|
|
113
|
|
||
Restructuring and other charges
|
|
(72
|
)
|
|
4
|
|
||
Non-GAAP Operating income
|
|
$
|
7,603
|
|
|
$
|
5,577
|
|
|
|
Three Months Ended
|
||||||
|
|
Sep 29,
2018 |
|
Sep 30,
2017 |
||||
Earnings per share - Diluted
|
|
$
|
1.38
|
|
|
$
|
0.94
|
|
Inventory valuation adjustments
|
|
—
|
|
|
0.01
|
|
||
Amortization of acquisition-related intangible assets
|
|
0.07
|
|
|
0.06
|
|
||
Restructuring and other charges
|
|
(0.02
|
)
|
|
—
|
|
||
Other acquisition-related charges
|
|
—
|
|
|
0.02
|
|
||
Ongoing mark to market on marketable equity securities
|
|
—
|
|
|
—
|
|
||
Tax Reform
|
|
(0.02
|
)
|
|
—
|
|
||
Income tax effect
|
|
(0.01
|
)
|
|
(0.02
|
)
|
||
Non-GAAP Earnings per share - Diluted
|
|
$
|
1.40
|
|
|
$
|
1.01
|
|
OTHER KEY INFORMATION
|
|
41
|
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) |
|||||
July 1, 2018 - July 28, 2018
|
|
19.6
|
|
|
$
|
50.86
|
|
|
$
|
6,228
|
|
July 29, 2018 - August 25, 2018
|
|
30.5
|
|
|
$
|
49.17
|
|
|
$
|
4,728
|
|
August 26, 2018 - September 29, 2018
|
|
—
|
|
|
$
|
—
|
|
|
$
|
4,728
|
|
Total
|
|
50.1
|
|
|
$
|
49.83
|
|
|
|
OTHER KEY INFORMATION
|
|
42
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing
Date
|
|
Filed or
Furnished
Herewith
|
3.1
|
|
|
8-K
|
|
000-06217
|
|
3.1
|
|
5/22/2006
|
|
|
|
3.2
|
|
|
8-K
|
|
000-06217
|
|
3.2
|
|
3/19/2018
|
|
|
|
10.1
†
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.2
†
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.3
†
|
|
|
|
|
|
|
|
|
|
|
X
|
|
12.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
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
|
†
|
Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.
|
OTHER KEY INFORMATION
|
|
43
|
Item Number
|
Item
|
|
Part I - Financial Information
|
|
|
Item 1.
|
Financial Statements
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations:
|
|
|
Results of operations
|
|
|
Liquidity and capital resources
|
|
|
Off-balance sheet arrangements
|
(a)
|
|
Contractual obligations
|
(b)
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Page
39
|
Item 4.
|
Controls and Procedures
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Page
40
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Part II - Other Information
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Page
40
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Page
42
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Item 3.
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Defaults Upon Senior Securities
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Not applicable
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Item 4.
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Mine Safety Disclosures
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Not applicable
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Item 5.
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Other Information
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Not applicable
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Item 6.
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Exhibits
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Page
43
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Signatures
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Page
45
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(a)
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As of
September 29, 2018
, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
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(b)
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There were no material changes to our significant contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 30, 2017.
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OTHER KEY INFORMATION
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44
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INTEL CORPORATION
(Registrant) |
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Date:
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October 25, 2018
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By:
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/s/ ROBERT H. SWAN
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Robert H. Swan
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Interim Chief Executive Officer and Principal Executive Officer;
Executive Vice President, Chief Financial Officer and Principal Financial Officer
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Date:
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October 25, 2018
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By:
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/s/ KEVIN T. MCBRIDE
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Kevin T. McBride
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Vice President of Finance, Corporate Controller and Principal Accounting Officer
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45
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A.
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NON-U.S. PROVISIONS
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EMPLOYER STATEMENT
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ARBEJDSGIVERERKLÆRING
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Pursuant to Section 3(1) of the Act on Stock Options in employment relations (the “Stock Option Act”), you are entitled to receive the following information regarding the Intel Corporation (the “Corporation”) 2006 Equity Incentive Plan, as amended (the “Plan”) in a separate written statement.
This statement contains only the information mentioned in the Stock Option Act, while the other terms and conditions of your grant of restricted stock units (“RSUs”) are described in detail in the Plan, the Plan prospectus and the Restricted Stock Unit Agreement (the “Agreement”), which have been made available to you. In the event of a conflict between a provision contained in this Employer Statement and provisions contained in the Plan Documents, this Employer Statement shall prevail. Capitalized terms used but not defined herein shall have the same meaning ascribed to them in the Plan or the Agreement.
It is stated in Section 1 of the Stock Option Act that the Stock Option Act only applies to employees. Employees are defined in Section 2
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I henhold til § 3, stk. 1, i lov om brug af køberet eller tegningsret mv. i ansættelsesforhold (“Aktieoptionsloven”) er du berettiget til i en særskilt skriftlig erklæring at modtage følgende oplysninger om den for Intel Corporation (“Selskabet”) gældende 2006 Equity Incentive Plan, med senere ændringer (“Planen”).
Denne erklæring indeholder kun de oplysninger, der er nævnt i Aktieoptionsloven, mens de øvrige vilkår og betingelser for din tildeling af “restricted stock units” (“RSU’er”) er nærmere beskrevet i Planen, i prospektet og i Restricted Stock Unit Agreement (“Aftalen”), som du har fået udleveret. I tilfælde af uoverensstemmelser mellem en bestemmelse i denne Arbejdsgivererklæring og bestemmelserne i Plandokumenterne har denne Arbejdsgivererklæring forrang. Begreber, der står med stort begyndelsesbogstav i denne arbejdsgivererklæring, men som ikke er defineret heri, har samme betydning som i Planen eller Aftalen.
Det fremgår af Aktieoptionslovens § 1, at loven kun gælder for lønmodtagere. Lønmodtagere er defineret i Aktieoptionslovens § 2 som personer,
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1.
Exercise Price
No exercise price is payable upon the conversion of your RSUs into shares in accordance with the vesting and settlement schedule described in the Agreement.
2.
Your Rights upon Termination of Employment
Pursuant to the Stock Option Act, the treatment of your RSUs upon termination of employment will be determined under Sections 4 and 5 of the Stock Option Act unless the terms contained in the Plan and the Agreement are more favorable to you than Sections 4 and 5 of the Stock Option Act. If the terms contained in the Plan and the Agreement are more favorable to you, then such terms will govern the treatment of your RSUs upon termination of employment.
3.
Financial Aspects of Participating in the Plan
The grant of RSUs has no immediate financial consequences for you. The value of the RSUs is not taken into account when calculating holiday allowances, pension contributions or other statutory consideration calculated on the basis of salary.
Shares in the capital of a company are financial instruments and investing in shares will always have financial risk. The possibility of profit when you sell your shares will depend not only on the Company’s financial performance, but also on the general performance of the stock market, among other factors. Accordingly, there can be no assurance that the trading price of the shares will not decrease in the future, including below any applicable exercise price.
Intel Corporation
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1.
Udnyttelseskurs
Der skal ikke betales nogen udnyttelseskurs i forbindelse med konverteringen af dine RSU’er til aktier i overensstemmelse med den i Aftalen beskrevne modningsplan.
2.
Din retsstilling i forbindelse med fratræden
I henhold til Aktieoptionsloven vil dine RSU’er i tilfælde af din fratræden blive behandlet i overensstemmelse med Aktieoptionslovens §§ 4 og 5, medmindre bestemmelserne i Planen og Aftalen er mere fordelagtige for dig end Aktieoptionslovens §§ 4 og 5. Hvis bestemmelserne i Planen og Aftalen er mere fordelagtige for dig, vil det være disse bestemmelser, der er gældende for, hvordan dine RSU’er behandles i forbindelse med din fratræden.
3.
Økonomiske aspekter ved at deltage i Planen
Tildelingen af RSU’er har ingen umiddelbare økonomiske konsekvenser for dig. Værdien af RSU’erne indgår ikke i beregningen af feriepenge, pensionsbidrag eller andre lovpligtige vederlag beregnet på baggrund af lønnen.
Aktier i en virksomhed er finansielle instrumenter, og investering i aktier vil altid være forbundet med en økonomisk risiko. Muligheden for at opnå en gevinst, når du sælger dine aktier, afhænger ikke kun af Selskabets økonomiske resultater, men blandt andet også af den generelle udvikling på aktiemarkedet. Der kan således ikke gives nogen garanti for, at handelskursen for aktierne ikke vil kunne falde, endda til under den til enhver tid gældende udnyttelseskurs.
Intel Corporation
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(2)
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The 2006 Plan and your participation in it are offered by the Corporation on a wholly discretionary basis;
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(4)
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None of the Corporation, the Employer or any Subsidiary is responsible for any decrease in the value of any shares of Common Stock acquired at vesting of the RSUs.
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(2)
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El 2006 Plan y su participación en el 2006 Plan se ofrecen por la Compañía de manera totalmente discrecional;
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(4)
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Ninguna de las empresas subsidiarias de la Compañía ni su Patrón son responsables de ninguna disminución en el valor de las Acciones adquiridas al momento de tener el derecho respecto a las Unidades de Acciones Restringidas.
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•
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If the Intel TSR equals 100.5%, the difference between the Intel TSR and the S&P 500 IT TSR is within 1 percentage point. As a result, the conversion rate is 100%, such that your RSUs convert into the right to receive 100% of the Target Number of Shares.
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•
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If the Intel TSR is 105%, the difference between the Intel TSR and the S&P 500 IT TSR is 5 percentage points. As a result, the conversion rate is 120%, such that your RSUs convert into the right to receive 120% of the Target Number of Shares.
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•
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If the Intel TSR is 90%, the difference between the Intel TSR and the S&P 500 IT TSR is 10 percentage points. As a result, the conversion rate is 60%, such that your RSUs convert into the right to receive 60% of the Target Number of Shares.
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•
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If the Intel TSR is 70%, the difference between the Intel TSR and the S&P 500 IT TSR is more than 25 percentage points. As a result, the conversion rate is 0%, such that your RSUs convert into the right to receive 0% of the Target Number of Shares.
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A.
|
NON-U.S. PROVISIONS
|
EMPLOYER STATEMENT
|
ARBEJDSGIVERERKLÆRING
|
Pursuant to Section 3(1) of the Act on Stock Options in employment relations (the “Stock Option Act”), you are entitled to receive the following information regarding the Intel Corporation (the “Corporation”) 2006 Equity Incentive Plan, as amended (the “Plan”) in a separate written statement.
This statement contains only the information mentioned in the Stock Option Act, while the other terms and conditions of your grant of restricted stock units (“RSUs”) are described in detail in the Plan, the Plan prospectus and the Restricted Stock Unit Agreement (the “Agreement”), which have been made available to you. In the event of a conflict between a provision contained in this Employer Statement and provisions contained in the Plan Documents, this Employer Statement shall prevail. Capitalized terms used but not defined herein shall have the same meaning ascribed to them in the Plan or the Agreement.
It is stated in Section 1 of the Stock Option Act that the Stock Option Act only applies to employees. Employees are defined in Section 2
|
I henhold til § 3, stk. 1, i lov om brug af køberet eller tegningsret mv. i ansættelsesforhold (“Aktieoptionsloven”) er du berettiget til i en særskilt skriftlig erklæring at modtage følgende oplysninger om den for Intel Corporation (“Selskabet”) gældende 2006 Equity Incentive Plan, med senere ændringer (“Planen”).
Denne erklæring indeholder kun de oplysninger, der er nævnt i Aktieoptionsloven, mens de øvrige vilkår og betingelser for din tildeling af “restricted stock units” (“RSU’er”) er nærmere beskrevet i Planen, i prospektet og i Restricted Stock Unit Agreement (“Aftalen”), som du har fået udleveret. I tilfælde af uoverensstemmelser mellem en bestemmelse i denne Arbejdsgivererklæring og bestemmelserne i Plandokumenterne har denne Arbejdsgivererklæring forrang. Begreber, der står med stort begyndelsesbogstav i denne arbejdsgivererklæring, men som ikke er defineret heri, har samme betydning som i Planen eller Aftalen.
Det fremgår af Aktieoptionslovens § 1, at loven kun gælder for lønmodtagere. Lønmodtagere er defineret i Aktieoptionslovens § 2 som personer,
|
1.
Exercise Price
No exercise price is payable upon the conversion of your RSUs into shares in accordance with the vesting and settlement schedule described in the Agreement.
2.
Your Rights upon Termination of Employment
Pursuant to the Stock Option Act, the treatment of your RSUs upon termination of employment will be determined under Sections 4 and 5 of the Stock Option Act unless the terms contained in the Plan and the Agreement are more favorable to you than Sections 4 and 5 of the Stock Option Act. If the terms contained in the Plan and the Agreement are more favorable to you, then such terms will govern the treatment of your RSUs upon termination of employment.
3.
Financial Aspects of Participating in the Plan
The grant of RSUs has no immediate financial consequences for you. The value of the RSUs is not taken into account when calculating holiday allowances, pension contributions or other statutory consideration calculated on the basis of salary.
Shares in the capital of a company are financial instruments and investing in shares will always have financial risk. The possibility of profit when you sell your shares will depend not only on the Company’s financial performance, but also on the general performance of the stock market, among other factors. Accordingly, there can be no assurance that the trading price of the shares will not decrease in the future, including below any applicable exercise price.
Intel Corporation
|
1.
Udnyttelseskurs
Der skal ikke betales nogen udnyttelseskurs i forbindelse med konverteringen af dine RSU’er til aktier i overensstemmelse med den i Aftalen beskrevne modningsplan.
2.
Din retsstilling i forbindelse med fratræden
I henhold til Aktieoptionsloven vil dine RSU’er i tilfælde af din fratræden blive behandlet i overensstemmelse med Aktieoptionslovens §§ 4 og 5, medmindre bestemmelserne i Planen og Aftalen er mere fordelagtige for dig end Aktieoptionslovens §§ 4 og 5. Hvis bestemmelserne i Planen og Aftalen er mere fordelagtige for dig, vil det være disse bestemmelser, der er gældende for, hvordan dine RSU’er behandles i forbindelse med din fratræden.
3.
Økonomiske aspekter ved at deltage i Planen
Tildelingen af RSU’er har ingen umiddelbare økonomiske konsekvenser for dig. Værdien af RSU’erne indgår ikke i beregningen af feriepenge, pensionsbidrag eller andre lovpligtige vederlag beregnet på baggrund af lønnen.
Aktier i en virksomhed er finansielle instrumenter, og investering i aktier vil altid være forbundet med en økonomisk risiko. Muligheden for at opnå en gevinst, når du sælger dine aktier, afhænger ikke kun af Selskabets økonomiske resultater, men blandt andet også af den generelle udvikling på aktiemarkedet. Der kan således ikke gives nogen garanti for, at handelskursen for aktierne ikke vil kunne falde, endda til under den til enhver tid gældende udnyttelseskurs.
Intel Corporation
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(2)
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The 2006 Plan and your participation in it are offered by the Corporation on a wholly discretionary basis;
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(4)
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None of the Corporation, the Employer or any Subsidiary is responsible for any decrease in the value of any shares of Common Stock acquired at vesting of the RSUs.
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(2)
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El 2006 Plan y su participación en el 2006 Plan se ofrecen por la Compañía de manera totalmente discrecional;
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(4)
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Ninguna de las empresas subsidiarias de la Compañía ni su Patrón son responsables de ninguna disminución en el valor de las Acciones adquiridas al momento de tener el derecho respecto a las Unidades de Acciones Restringidas.
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Nine Months Ended
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||||||
(Dollars in Millions)
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Sep 29,
2018 |
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Sep 30,
2017 |
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Earnings
1
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$
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18,025
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$
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14,557
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Adjustments:
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||||||
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Add - Fixed charges
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742
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733
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Subtract - Capitalized interest
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(381
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)
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(212
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)
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Earnings and fixed charges (net of capitalized interest)
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$
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18,386
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$
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15,078
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Fixed charges:
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Interest
2
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$
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337
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$
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493
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Capitalized interest
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381
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212
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Estimated interest component of rental expense
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24
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28
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Total
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$
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742
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$
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733
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Ratio of earnings before taxes and fixed charges, to fixed charges
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25x
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21x
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1
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After adjustments required by Item 503(d) of Regulation S-K.
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2
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Interest within provision for taxes on the consolidated condensed statements of income is not included.
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1.
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I have reviewed this quarterly report on Form 10-Q of Intel Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date:
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October 25, 2018
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By:
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/s/ ROBERT H. SWAN
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Robert H. Swan
Interim Chief Executive Officer and Principal Executive Officer; Executive Vice President, Chief Financial Officer and Principal Financial Officer |
Date:
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October 25, 2018
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By:
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/s/ ROBERT H. SWAN
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Robert H. Swan
Interim Chief Executive Officer and Principal Executive Officer;
Executive Vice President, Chief Financial Officer and Principal Financial Officer
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