|
☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the quarterly period ended
|
September 28, 2019
|
|
☐
|
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
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock, $0.001 par value
|
INTC
|
Nasdaq Global Select Market
|
Large Accelerated Filer
|
Accelerated filer
|
Non-accelerated filer
|
Smaller reporting company
|
Emerging growth company
|
☑
|
¨
|
¨
|
☐
|
☐
|
|
|
|
Page
|
FORWARD-LOOKING STATEMENTS
|
|||
A QUARTER IN REVIEW
|
|||
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS AND SUPPLEMENTAL DETAILS
|
|
||
|
Consolidated Condensed Statements of Income
|
||
|
Consolidated Condensed Statements of Comprehensive Income
|
||
|
Consolidated Condensed Balance Sheets
|
||
|
Consolidated Condensed Statements of Cash Flows
|
||
|
Consolidated Condensed Statements of Stockholders' Equity
|
||
|
Notes to Consolidated Condensed Financial Statements
|
||
|
|
|
|
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)
|
|
||
|
Overview
|
||
|
Revenue, Gross Margin, and Operating Expenses
|
||
|
Business Unit Trends and Results
|
||
|
Other Consolidated Results of Operations
|
||
|
Liquidity and Capital Resources
|
||
|
Quantitative and Qualitative Disclosures about Market Risk
|
||
|
|
|
|
OTHER KEY INFORMATION
|
|
||
|
Risk Factors
|
||
|
Controls and Procedures
|
||
|
Non-GAAP Financial Measures
|
||
|
Issuer Purchases of Equity Securities
|
||
|
Exhibits
|
||
|
Form 10-Q Cross-Reference Index
|
PLATFORM PRODUCTS
|
|
A microprocessor (processor or central processing unit (CPU)) and chipset, a stand-alone System-on-Chip (SoC), or a multichip package, based on Intel® architecture. Platform products, or platforms, are primarily used in solutions sold through the Client Computing Group (CCG), Data Center Group (DCG), and Internet of Things Group (IOTG) segments.
|
|
|
|
ADJACENT PRODUCTS
|
|
All of our non-platform products for CCG, DCG, and IOTG, such as modem, Ethernet and silicon photonics, as well as Mobileye, Non-Volatile Memory Solutions Group (NSG), and Programmable Solutions Group (PSG) products. Combined with our platform products, adjacent products form comprehensive platform solutions to meet customer needs.
|
|
|
|
PC-CENTRIC BUSINESS
|
|
Our CCG business, including both platform and adjacent products.
|
|
|
|
DATA-CENTRIC BUSINESSES
|
|
Our DCG, Internet of Things (IOTG and Mobileye), NSG, PSG, and all other businesses.
|
|
|
1
|
A QUARTER IN REVIEW
|
REVENUE
|
|
OPERATING INCOME
|
|
DILUTED EPS
|
■ PC-CENTRIC $B ■ DATA-CENTRIC $B
|
|
■ GAAP $B ■ NON-GAAP $B
|
|
■ GAAP ■ NON-GAAP
|
|
|
|
|
|
||||||
$19.2B
|
|
|
|
$6.4B
|
|
$6.9B
|
|
$1.35
|
|
$1.42
|
GAAP
|
|
|
|
GAAP
|
|
non-GAAP1
|
|
GAAP
|
|
non-GAAP1
|
flat in comparison to Q3 2018
|
|
down $902M or 12% from Q3 2018
|
|
down $714M or 9% from Q3 2018
|
|
down $0.03 or 2% from Q3 2018
|
|
up $0.02 or 1% from Q3 2018
|
||
|
|
|
|
|
|
|
|
|
||
Growth in data-centric businesses with record revenue from DCG, NSG, IOTG and Mobileye, offset by decline in PC-centric business
|
|
Lower gross margin from decrease in platform unit sales and lower NAND market pricing, partially offset by platform ASP strength
|
|
Impact from lower platform volume and lower NAND market pricing, partially offset by lower shares outstanding and ASP strength
|
•
|
We launched the first wave of 10th generation Intel® Core™ processors, with 11 new 10 nanometer (nm)-based Ice Lake processors that integrate artificial intelligence, graphics, Wi-Fi 6 and Thunderbolt™ 3 all on the SoC. We began shipping our 10nm Intel® Agilex® field programmable gate arrays (FPGAs) to early access program customers.
|
•
|
We experienced growth across all data-centric businesses. DCG grew across all segments, with the cloud and enterprise and government market segments returning to growth. NSG grew with NAND and Intel® Optane™ bit growth, partially offset by lower NAND market pricing. Demand for edge compute drove double digit revenue growth for Mobileye and high single digit growth for IOTG.
|
•
|
PC-centric decline was driven by lower product shipments compared to Q3 2018, when internal inventory was drawn on to meet demand, partially offset by adjacencies growth and ASP strength. We continued to be supply constrained in Q3, particularly at the value-end of the market, as higher than expected PC demand strength continues to outpace our supply despite capacity additions we have made this year.
|
•
|
In July, we signed an agreement to divest the majority of our smartphone modem business, including certain employees, intellectual property, equipment and leases. The transaction enables us to increase the focus of our 5G efforts on the broader opportunity to modernize network and edge infrastructure, and is expected to close in the fourth quarter of 2019.
|
A QUARTER IN REVIEW
|
|
2
|
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions, Except Per Share Amounts; Unaudited)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||||||
Net revenue
|
|
$
|
19,190
|
|
|
$
|
19,163
|
|
|
$
|
51,756
|
|
|
$
|
52,191
|
|
Cost of sales
|
|
7,895
|
|
|
6,803
|
|
|
21,494
|
|
|
19,681
|
|
||||
Gross margin
|
|
11,295
|
|
|
12,360
|
|
|
30,262
|
|
|
32,510
|
|
||||
Research and development
|
|
3,208
|
|
|
3,428
|
|
|
9,978
|
|
|
10,110
|
|
||||
Marketing, general and administrative
|
|
1,486
|
|
|
1,605
|
|
|
4,608
|
|
|
5,230
|
|
||||
Restructuring and other charges
|
|
104
|
|
|
(72
|
)
|
|
288
|
|
|
(72
|
)
|
||||
Amortization of acquisition-related intangibles
|
|
50
|
|
|
50
|
|
|
150
|
|
|
150
|
|
||||
Operating expenses
|
|
4,848
|
|
|
5,011
|
|
|
15,024
|
|
|
15,418
|
|
||||
Operating income
|
|
6,447
|
|
|
7,349
|
|
|
15,238
|
|
|
17,092
|
|
||||
Gains (losses) on equity investments, net
|
|
318
|
|
|
(75
|
)
|
|
922
|
|
|
365
|
|
||||
Interest and other, net
|
|
(46
|
)
|
|
(132
|
)
|
|
(170
|
)
|
|
225
|
|
||||
Income before taxes
|
|
6,719
|
|
|
7,142
|
|
|
15,990
|
|
|
17,682
|
|
||||
Provision for taxes
|
|
729
|
|
|
744
|
|
|
1,847
|
|
|
1,824
|
|
||||
Net income
|
|
$
|
5,990
|
|
|
$
|
6,398
|
|
|
$
|
14,143
|
|
|
$
|
15,858
|
|
Earnings per share – basic
|
|
$
|
1.36
|
|
|
$
|
1.40
|
|
|
$
|
3.18
|
|
|
$
|
3.42
|
|
Earnings per share – diluted
|
|
$
|
1.35
|
|
|
$
|
1.38
|
|
|
$
|
3.14
|
|
|
$
|
3.35
|
|
Weighted average shares of common stock outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
4,391
|
|
|
4,574
|
|
|
4,450
|
|
|
4,632
|
|
||||
Diluted
|
|
4,433
|
|
|
4,648
|
|
|
4,507
|
|
|
4,728
|
|
FINANCIAL STATEMENTS
|
Consolidated Condensed Statements of Income
|
3
|
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions; Unaudited)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||||||
Net income
|
|
$
|
5,990
|
|
|
$
|
6,398
|
|
|
$
|
14,143
|
|
|
$
|
15,858
|
|
Changes in other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized holding gains (losses) on derivatives
|
|
(115
|
)
|
|
(25
|
)
|
|
138
|
|
|
(199
|
)
|
||||
Actuarial valuation and other pension benefits (expenses), net
|
|
9
|
|
|
13
|
|
|
26
|
|
|
39
|
|
||||
Translation adjustments and other
|
|
6
|
|
|
(2
|
)
|
|
88
|
|
|
(15
|
)
|
||||
Other comprehensive income (loss)
|
|
(100
|
)
|
|
(14
|
)
|
|
252
|
|
|
(175
|
)
|
||||
Total comprehensive income
|
|
$
|
5,890
|
|
|
$
|
6,384
|
|
|
$
|
14,395
|
|
|
$
|
15,683
|
|
FINANCIAL STATEMENTS
|
Consolidated Condensed Statements of Comprehensive Income
|
4
|
CONSOLIDATED CONDENSED BALANCE SHEETS
|
(In Millions)
|
|
Sep 28,
2019 |
|
Dec 29,
2018 |
||||
|
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
3,935
|
|
|
$
|
3,019
|
|
Short-term investments
|
|
1,849
|
|
|
2,788
|
|
||
Trading assets
|
|
6,241
|
|
|
5,843
|
|
||
Accounts receivable
|
|
6,880
|
|
|
6,722
|
|
||
Inventories
|
|
8,638
|
|
|
7,253
|
|
||
Other current assets
|
|
2,414
|
|
|
3,162
|
|
||
Total current assets
|
|
29,957
|
|
|
28,787
|
|
||
Property, plant and equipment, net of accumulated depreciation of $71,183 ($65,342 as of December 29, 2018)
|
|
53,563
|
|
|
48,976
|
|
||
Equity investments
|
|
4,819
|
|
|
6,042
|
|
||
Other long-term investments
|
|
3,428
|
|
|
3,388
|
|
||
Goodwill
|
|
24,727
|
|
|
24,513
|
|
||
Identified intangible assets, net
|
|
11,019
|
|
|
11,836
|
|
||
Other long-term assets
|
|
6,255
|
|
|
4,421
|
|
||
Total assets
|
|
$
|
133,768
|
|
|
$
|
127,963
|
|
|
|
|
|
|
||||
Liabilities, temporary equity, and stockholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Short-term debt
|
|
$
|
5,200
|
|
|
$
|
1,261
|
|
Accounts payable
|
|
4,809
|
|
|
3,824
|
|
||
Accrued compensation and benefits
|
|
3,220
|
|
|
3,622
|
|
||
Other accrued liabilities
|
|
11,835
|
|
|
7,919
|
|
||
Total current liabilities
|
|
25,064
|
|
|
16,626
|
|
||
Debt
|
|
23,707
|
|
|
25,098
|
|
||
Contract liabilities
|
|
1,413
|
|
|
2,049
|
|
||
Income taxes payable, non-current
|
|
4,974
|
|
|
4,897
|
|
||
Deferred income taxes
|
|
1,696
|
|
|
1,665
|
|
||
Other long-term liabilities
|
|
2,506
|
|
|
2,646
|
|
||
Contingencies (Note 12)
|
|
|
|
|
||||
Temporary equity
|
|
166
|
|
|
419
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock
|
|
—
|
|
|
—
|
|
||
Common stock and capital in excess of par value, 4,350 issued and outstanding (4,516 issued and outstanding as of December 29, 2018)
|
|
25,290
|
|
|
25,365
|
|
||
Accumulated other comprehensive income (loss)
|
|
(722
|
)
|
|
(974
|
)
|
||
Retained earnings
|
|
49,674
|
|
|
50,172
|
|
||
Total stockholders’ equity
|
|
74,242
|
|
|
74,563
|
|
||
Total liabilities, temporary equity, and stockholders’ equity
|
|
$
|
133,768
|
|
|
$
|
127,963
|
|
FINANCIAL STATEMENTS
|
Consolidated Condensed Balance Sheets
|
5
|
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
|
|
|
Nine Months Ended
|
||||||
(In Millions; Unaudited)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||
|
|
|
|
|
||||
Cash and cash equivalents, beginning of period
|
|
$
|
3,019
|
|
|
$
|
3,433
|
|
Cash flows provided by (used for) operating activities:
|
|
|
|
|
||||
Net income
|
|
14,143
|
|
|
15,858
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation
|
|
6,647
|
|
|
5,420
|
|
||
Share-based compensation
|
|
1,290
|
|
|
1,203
|
|
||
Amortization of intangibles
|
|
1,211
|
|
|
1,172
|
|
||
(Gains) losses on equity investments, net
|
|
(395
|
)
|
|
(329
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(156
|
)
|
|
(449
|
)
|
||
Inventories
|
|
(1,376
|
)
|
|
(362
|
)
|
||
Accounts payable
|
|
728
|
|
|
430
|
|
||
Accrued compensation and benefits
|
|
(365
|
)
|
|
(801
|
)
|
||
Customer deposits and prepaid supply agreements
|
|
(674
|
)
|
|
1,472
|
|
||
Income taxes
|
|
435
|
|
|
(1,057
|
)
|
||
Other assets and liabilities
|
|
1,769
|
|
|
(25
|
)
|
||
Total adjustments
|
|
9,114
|
|
|
6,674
|
|
||
Net cash provided by operating activities
|
|
23,257
|
|
|
22,532
|
|
||
Cash flows provided by (used for) investing activities:
|
|
|
|
|
||||
Additions to property, plant and equipment
|
|
(11,547
|
)
|
|
(11,291
|
)
|
||
Purchases of available-for-sale debt investments
|
|
(2,028
|
)
|
|
(3,090
|
)
|
||
Sales of available-for-sale debt investments
|
|
1,198
|
|
|
135
|
|
||
Maturities of available-for-sale debt investments
|
|
1,920
|
|
|
2,232
|
|
||
Purchases of trading assets
|
|
(5,769
|
)
|
|
(8,316
|
)
|
||
Maturities and sales of trading assets
|
|
5,467
|
|
|
9,705
|
|
||
Sales of equity investments
|
|
1,414
|
|
|
1,646
|
|
||
Other investing
|
|
(575
|
)
|
|
(440
|
)
|
||
Net cash used for investing activities
|
|
(9,920
|
)
|
|
(9,419
|
)
|
||
Cash flows provided by (used for) financing activities:
|
|
|
|
|
||||
Increase (decrease) in short-term debt, net
|
|
835
|
|
|
1,707
|
|
||
Issuance of long-term debt, net of issuance costs
|
|
650
|
|
|
423
|
|
||
Repayment of debt and debt conversion
|
|
(1,478
|
)
|
|
(1,928
|
)
|
||
Proceeds from sales of common stock through employee equity incentive plans
|
|
797
|
|
|
545
|
|
||
Repurchase of common stock
|
|
(10,100
|
)
|
|
(8,464
|
)
|
||
Payment of dividends to stockholders
|
|
(4,214
|
)
|
|
(4,173
|
)
|
||
Other financing
|
|
1,089
|
|
|
(1,249
|
)
|
||
Net cash provided by (used for) financing activities
|
|
(12,421
|
)
|
|
(13,139
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
916
|
|
|
(26
|
)
|
||
Cash and cash equivalents, end of period
|
|
$
|
3,935
|
|
|
$
|
3,407
|
|
|
|
|
|
|
||||
Supplemental disclosures of noncash investing activities and cash flow information:
|
|
|
|
|
||||
Acquisition of property, plant, and equipment included in accounts payable and accrued liabilities
|
|
$
|
2,376
|
|
|
$
|
1,988
|
|
Cash paid during the period for:
|
|
|
|
|
||||
Interest, net of capitalized interest
|
|
$
|
312
|
|
|
$
|
316
|
|
Income taxes, net of refunds
|
|
$
|
1,334
|
|
|
$
|
2,854
|
|
FINANCIAL STATEMENTS
|
Consolidated Condensed Statements of Cash Flows
|
6
|
CONSOLIDATED CONDENSED 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)
|
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance as of June 29, 2019
|
|
4,430
|
|
|
$
|
25,140
|
|
|
$
|
(622
|
)
|
|
$
|
50,429
|
|
|
$
|
74,947
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,990
|
|
|
5,990
|
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
—
|
|
|
(100
|
)
|
||||
Employee equity incentive plans and other
|
|
13
|
|
|
466
|
|
|
—
|
|
|
—
|
|
|
466
|
|
||||
Share-based compensation
|
|
—
|
|
|
427
|
|
|
—
|
|
|
—
|
|
|
427
|
|
||||
Temporary equity reduction
|
|
—
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
|
||||
Convertible debt
|
|
—
|
|
|
(278
|
)
|
|
—
|
|
|
—
|
|
|
(278
|
)
|
||||
Repurchase of common stock
|
|
(92
|
)
|
|
(523
|
)
|
|
—
|
|
|
(3,966
|
)
|
|
(4,489
|
)
|
||||
Restricted stock unit withholdings
|
|
(1
|
)
|
|
(22
|
)
|
|
—
|
|
|
(6
|
)
|
|
(28
|
)
|
||||
Cash dividends declared ($0.63 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,773
|
)
|
|
(2,773
|
)
|
||||
Balance as of September 28, 2019
|
|
4,350
|
|
|
$
|
25,290
|
|
|
$
|
(722
|
)
|
|
$
|
49,674
|
|
|
$
|
74,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance as of June 30, 2018
|
|
4,607
|
|
|
$
|
25,470
|
|
|
$
|
(1,089
|
)
|
|
$
|
45,666
|
|
|
$
|
70,047
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,398
|
|
|
6,398
|
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
||||
Employee equity incentive plans and other
|
|
8
|
|
|
300
|
|
|
—
|
|
|
—
|
|
|
300
|
|
||||
Share-based compensation
|
|
—
|
|
|
377
|
|
|
—
|
|
|
—
|
|
|
377
|
|
||||
Temporary equity reduction
|
|
—
|
|
|
139
|
|
|
—
|
|
|
—
|
|
|
139
|
|
||||
Convertible debt
|
|
—
|
|
|
(497
|
)
|
|
—
|
|
|
—
|
|
|
(497
|
)
|
||||
Repurchase of common stock
|
|
(50
|
)
|
|
(275
|
)
|
|
—
|
|
|
(2,219
|
)
|
|
(2,494
|
)
|
||||
Restricted stock unit withholdings
|
|
(1
|
)
|
|
(22
|
)
|
|
—
|
|
|
(6
|
)
|
|
(28
|
)
|
||||
Cash dividends declared ($0.60 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,745
|
)
|
|
(2,745
|
)
|
||||
Balance as of September 29, 2018
|
|
4,564
|
|
|
$
|
25,492
|
|
|
$
|
(1,103
|
)
|
|
$
|
47,094
|
|
|
$
|
71,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance as of December 29, 2018
|
|
4,516
|
|
|
$
|
25,365
|
|
|
$
|
(974
|
)
|
|
$
|
50,172
|
|
|
$
|
74,563
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,143
|
|
|
14,143
|
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
252
|
|
|
—
|
|
|
252
|
|
||||
Employee equity incentive plans and other
|
|
52
|
|
|
869
|
|
|
—
|
|
|
—
|
|
|
869
|
|
||||
Share-based compensation
|
|
—
|
|
|
1,287
|
|
|
—
|
|
|
—
|
|
|
1,287
|
|
||||
Temporary equity reduction
|
|
—
|
|
|
253
|
|
|
—
|
|
|
—
|
|
|
253
|
|
||||
Convertible debt
|
|
—
|
|
|
(990
|
)
|
|
—
|
|
|
—
|
|
|
(990
|
)
|
||||
Repurchase of common stock
|
|
(209
|
)
|
|
(1,182
|
)
|
|
—
|
|
|
(8,902
|
)
|
|
(10,084
|
)
|
||||
Restricted stock unit withholdings
|
|
(9
|
)
|
|
(312
|
)
|
|
—
|
|
|
(137
|
)
|
|
(449
|
)
|
||||
Cash dividends declared ($1.26 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,602
|
)
|
|
(5,602
|
)
|
||||
Balance as of September 28, 2019
|
|
4,350
|
|
|
$
|
25,290
|
|
|
$
|
(722
|
)
|
|
$
|
49,674
|
|
|
$
|
74,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance as of December 30, 2017
|
|
4,687
|
|
|
$
|
26,074
|
|
|
$
|
862
|
|
|
$
|
42,083
|
|
|
$
|
69,019
|
|
Adjustment for change in accounting principle
|
|
—
|
|
|
—
|
|
|
(1,790
|
)
|
|
2,424
|
|
|
634
|
|
||||
Opening balance as of December 31, 2017
|
|
4,687
|
|
|
26,074
|
|
|
(928
|
)
|
|
44,507
|
|
|
69,653
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,858
|
|
|
15,858
|
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
(175
|
)
|
|
—
|
|
|
(175
|
)
|
||||
Employee equity incentive plans and other¹
|
|
54
|
|
|
358
|
|
|
—
|
|
|
—
|
|
|
358
|
|
||||
Share-based compensation
|
|
—
|
|
|
1,202
|
|
|
—
|
|
|
—
|
|
|
1,202
|
|
||||
Temporary equity reduction
|
|
—
|
|
|
351
|
|
|
—
|
|
|
—
|
|
|
351
|
|
||||
Convertible debt
|
|
—
|
|
|
(1,267
|
)
|
|
—
|
|
|
—
|
|
|
(1,267
|
)
|
||||
Repurchase of common stock
|
|
(167
|
)
|
|
(924
|
)
|
|
—
|
|
|
(7,538
|
)
|
|
(8,462
|
)
|
||||
Restricted stock unit withholdings
|
|
(10
|
)
|
|
(302
|
)
|
|
—
|
|
|
(187
|
)
|
|
(489
|
)
|
||||
Cash dividends declared ($1.20 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,546
|
)
|
|
(5,546
|
)
|
||||
Balance as of September 29, 2018
|
|
4,564
|
|
|
$
|
25,492
|
|
|
$
|
(1,103
|
)
|
|
$
|
47,094
|
|
|
$
|
71,483
|
|
1
|
Includes approximately $375 million of non-controlling interest activity due to our acquisition of Mobileye in 2017, which was eliminated in 2018 due to the purchase of remaining shares.
|
FINANCIAL STATEMENTS
|
Consolidated Condensed Statements of Stockholders' Equity
|
7
|
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
|
NOTE 1 :
|
BASIS OF PRESENTATION
|
NOTE 2 :
|
RECENT ACCOUNTING STANDARDS AND ACCOUNTING POLICIES
|
(In Millions)
|
|
Remainder of 2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024 and Thereafter
|
|
Total
|
||||||||||||||
Lease payments
|
|
$
|
44
|
|
|
$
|
178
|
|
|
$
|
125
|
|
|
$
|
96
|
|
|
$
|
71
|
|
|
$
|
108
|
|
|
$
|
622
|
|
Present value of lease payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
573
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
8
|
(In Millions)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024 and Thereafter
|
|
Total
|
||||||||||||||
Minimum rental commitments under all non-cancelable leases
|
|
$
|
229
|
|
|
$
|
181
|
|
|
$
|
133
|
|
|
$
|
101
|
|
|
$
|
70
|
|
|
$
|
121
|
|
|
$
|
835
|
|
NOTE 3 :
|
OPERATING SEGMENTS
|
•
|
Client Computing Group (CCG)
|
•
|
Data Center Group (DCG)
|
•
|
Internet of Things Group (IOTG)
|
•
|
Mobileye
|
•
|
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
|
9
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
||||||||
Client Computing Group
|
|
|
|
|
|
|
|
|
||||||||
Platform
|
|
$
|
8,379
|
|
|
$
|
9,023
|
|
|
$
|
24,128
|
|
|
$
|
24,703
|
|
Adjacent
|
|
1,330
|
|
|
1,211
|
|
|
3,008
|
|
|
2,479
|
|
||||
|
|
9,709
|
|
|
10,234
|
|
|
27,136
|
|
|
27,182
|
|
||||
Data Center Group
|
|
|
|
|
|
|
|
|
||||||||
Platform
|
|
5,819
|
|
|
5,637
|
|
|
14,854
|
|
|
15,561
|
|
||||
Adjacent
|
|
564
|
|
|
502
|
|
|
1,414
|
|
|
1,361
|
|
||||
|
|
6,383
|
|
|
6,139
|
|
|
16,268
|
|
|
16,922
|
|
||||
Internet of Things
|
|
|
|
|
|
|
|
|
||||||||
IOTG
|
|
1,005
|
|
|
919
|
|
|
2,901
|
|
|
2,639
|
|
||||
Mobileye
|
|
229
|
|
|
191
|
|
|
639
|
|
|
515
|
|
||||
|
|
1,234
|
|
|
1,110
|
|
|
3,540
|
|
|
3,154
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Non-Volatile Memory Solutions Group
|
|
1,290
|
|
|
1,081
|
|
|
3,145
|
|
|
3,200
|
|
||||
Programmable Solutions Group
|
|
507
|
|
|
496
|
|
|
1,482
|
|
|
1,511
|
|
||||
All other
|
|
67
|
|
|
103
|
|
|
185
|
|
|
222
|
|
||||
Total net revenue
|
|
$
|
19,190
|
|
|
$
|
19,163
|
|
|
$
|
51,756
|
|
|
$
|
52,191
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Client Computing Group
|
|
$
|
4,305
|
|
|
$
|
4,532
|
|
|
$
|
11,114
|
|
|
$
|
10,557
|
|
Data Center Group
|
|
3,115
|
|
|
3,082
|
|
|
6,756
|
|
|
8,421
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Internet of Things
|
|
|
|
|
|
|
|
|
||||||||
IOTG
|
|
309
|
|
|
321
|
|
|
854
|
|
|
791
|
|
||||
Mobileye
|
|
67
|
|
|
52
|
|
|
188
|
|
|
106
|
|
||||
|
|
376
|
|
|
373
|
|
|
1,042
|
|
|
897
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Non-Volatile Memory Solutions Group
|
|
(499
|
)
|
|
160
|
|
|
(1,080
|
)
|
|
14
|
|
||||
Programmable Solutions Group
|
|
92
|
|
|
106
|
|
|
233
|
|
|
304
|
|
||||
All other
|
|
(942
|
)
|
|
(904
|
)
|
|
(2,827
|
)
|
|
(3,101
|
)
|
||||
Total operating income
|
|
$
|
6,447
|
|
|
$
|
7,349
|
|
|
$
|
15,238
|
|
|
$
|
17,092
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
10
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||||||
Platform revenue
|
|
|
|
|
|
|
|
|
||||||||
Desktop platform
|
|
$
|
2,968
|
|
|
$
|
3,225
|
|
|
$
|
8,621
|
|
|
$
|
9,087
|
|
Notebook platform
|
|
5,393
|
|
|
5,774
|
|
|
15,456
|
|
|
15,549
|
|
||||
DCG platform
|
|
5,819
|
|
|
5,637
|
|
|
14,854
|
|
|
15,561
|
|
||||
IOTG platform
|
|
923
|
|
|
855
|
|
|
2,639
|
|
|
2,319
|
|
||||
Other platform1
|
|
18
|
|
|
24
|
|
|
51
|
|
|
67
|
|
||||
|
|
15,121
|
|
|
15,515
|
|
|
41,621
|
|
|
42,583
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Adjacent revenue2
|
|
4,069
|
|
|
3,648
|
|
|
10,135
|
|
|
9,608
|
|
||||
Total revenue
|
|
$
|
19,190
|
|
|
$
|
19,163
|
|
|
$
|
51,756
|
|
|
$
|
52,191
|
|
1
|
Includes our tablet and service provider revenue.
|
2
|
Includes all of our non-platform products for CCG, DCG, and IOTG such as modem, Ethernet, and silicon photonics, as well as Mobileye, NSG, and PSG products.
|
NOTE 4 :
|
EARNINGS PER SHARE
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions, Except Per Share Amounts)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||||||
Net income available to common stockholders
|
|
$
|
5,990
|
|
|
$
|
6,398
|
|
|
$
|
14,143
|
|
|
$
|
15,858
|
|
Weighted average shares of common stock outstanding – basic
|
|
4,391
|
|
|
4,574
|
|
|
4,450
|
|
|
4,632
|
|
||||
Dilutive effect of employee equity incentive plans
|
|
30
|
|
|
40
|
|
|
41
|
|
|
52
|
|
||||
Dilutive effect of convertible debt
|
|
12
|
|
|
34
|
|
|
16
|
|
|
44
|
|
||||
Weighted average shares of common stock outstanding – diluted
|
|
4,433
|
|
|
4,648
|
|
|
4,507
|
|
|
4,728
|
|
||||
Earnings per share – basic
|
|
$
|
1.36
|
|
|
$
|
1.40
|
|
|
$
|
3.18
|
|
|
$
|
3.42
|
|
Earnings per share – diluted
|
|
$
|
1.35
|
|
|
$
|
1.38
|
|
|
$
|
3.14
|
|
|
$
|
3.35
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
11
|
NOTE 5 :
|
CONTRACT LIABILITIES
|
(In Millions)
|
|
Sep 28,
2019 |
|
Dec 29,
2018 |
||||
Prepaid supply agreements
|
|
$
|
1,913
|
|
|
$
|
2,587
|
|
Other
|
|
180
|
|
|
122
|
|
||
Total contract liabilities
|
|
$
|
2,093
|
|
|
$
|
2,709
|
|
(In Millions)
|
|
|
||
Prepaid supply agreements balance as of December 29, 2018
|
|
$
|
2,587
|
|
Prepaids utilized
|
|
(674
|
)
|
|
Prepaid supply agreements balance as of September 28, 2019
|
|
$
|
1,913
|
|
NOTE 6 :
|
OTHER FINANCIAL STATEMENT DETAILS
|
(In Millions)
|
|
Sep 28,
2019 |
|
Dec 29,
2018 |
||||
Raw materials
|
|
$
|
803
|
|
|
$
|
813
|
|
Work in process
|
|
5,945
|
|
|
4,511
|
|
||
Finished goods
|
|
1,890
|
|
|
1,929
|
|
||
Total inventories
|
|
$
|
8,638
|
|
|
$
|
7,253
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||||||
Interest income
|
|
$
|
114
|
|
|
$
|
109
|
|
|
$
|
374
|
|
|
$
|
308
|
|
Interest expense
|
|
(107
|
)
|
|
(109
|
)
|
|
(381
|
)
|
|
(337
|
)
|
||||
Other, net
|
|
(53
|
)
|
|
(132
|
)
|
|
(163
|
)
|
|
254
|
|
||||
Total interest and other, net
|
|
$
|
(46
|
)
|
|
$
|
(132
|
)
|
|
$
|
(170
|
)
|
|
$
|
225
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
12
|
NOTE 7 :
|
RESTRUCTURING AND OTHER CHARGES
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
(In Millions)
|
|
Sep 28,
2019 |
|
Sep 28,
2019 |
||||
Employee severance and benefit arrangements
|
|
$
|
40
|
|
|
$
|
208
|
|
Asset impairment and other charges
|
|
64
|
|
|
80
|
|
||
Total restructuring and other charges
|
|
$
|
104
|
|
|
$
|
288
|
|
NOTE 8 :
|
INVESTMENTS
|
|
|
September 28, 2019
|
|
December 29, 2018
|
||||||||||||||||||||||||||||
(In Millions)
|
|
Adjusted Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Adjusted Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||||||||||
Corporate debt
|
|
$
|
3,012
|
|
|
$
|
46
|
|
|
$
|
(1
|
)
|
|
$
|
3,057
|
|
|
$
|
3,068
|
|
|
$
|
2
|
|
|
$
|
(28
|
)
|
|
$
|
3,042
|
|
Financial institution
instruments |
|
$
|
3,347
|
|
|
$
|
16
|
|
|
$
|
(1
|
)
|
|
$
|
3,362
|
|
|
$
|
3,076
|
|
|
$
|
3
|
|
|
$
|
(11
|
)
|
|
$
|
3,068
|
|
Government debt
|
|
$
|
743
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
748
|
|
|
$
|
1,069
|
|
|
$
|
1
|
|
|
$
|
(9
|
)
|
|
$
|
1,061
|
|
Total available-for-sale debt investments
|
|
$
|
7,102
|
|
|
$
|
67
|
|
|
$
|
(2
|
)
|
|
$
|
7,167
|
|
|
$
|
7,213
|
|
|
$
|
6
|
|
|
$
|
(48
|
)
|
|
$
|
7,171
|
|
(In Millions)
|
|
Fair Value
|
||
Due in 1 year or less
|
|
$
|
2,638
|
|
Due in 1–2 years
|
|
794
|
|
|
Due in 2–5 years
|
|
2,509
|
|
|
Due after 5 years
|
|
125
|
|
|
Instruments not due at a single maturity date
|
|
1,101
|
|
|
Total
|
|
$
|
7,167
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
13
|
(In Millions)
|
|
Sep 28,
2019 |
|
Dec 29,
2018 |
||||
Marketable equity securities
|
|
$
|
352
|
|
|
$
|
1,440
|
|
Non-marketable equity securities
|
|
3,287
|
|
|
2,978
|
|
||
Equity method investments
|
|
1,180
|
|
|
1,624
|
|
||
Total
|
|
$
|
4,819
|
|
|
$
|
6,042
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||||||
Ongoing mark-to-market adjustments on marketable equity securities
|
|
$
|
114
|
|
|
$
|
8
|
|
|
$
|
188
|
|
|
$
|
379
|
|
Observable price adjustments on non-marketable equity securities
|
|
84
|
|
|
43
|
|
|
100
|
|
|
191
|
|
||||
Impairments
|
|
(17
|
)
|
|
(328
|
)
|
|
(79
|
)
|
|
(372
|
)
|
||||
Sale of equity investments and other¹
|
|
137
|
|
|
202
|
|
|
713
|
|
|
167
|
|
||||
Total gains (losses) on equity investments, net
|
|
$
|
318
|
|
|
$
|
(75
|
)
|
|
$
|
922
|
|
|
$
|
365
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||||||
Net gains (losses) recognized during the period on equity securities
|
|
$
|
281
|
|
|
$
|
215
|
|
|
$
|
366
|
|
|
$
|
808
|
|
Less: Net (gains) losses recognized during the period on equity securities sold during the period
|
|
(54
|
)
|
|
(225
|
)
|
|
(321
|
)
|
|
(463
|
)
|
||||
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date
|
|
$
|
227
|
|
|
$
|
(10
|
)
|
|
$
|
45
|
|
|
$
|
345
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
14
|
NOTE 9 :
|
BORROWINGS
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
15
|
NOTE 10 :
|
FAIR VALUE
|
|
|
September 28, 2019
|
|
December 29, 2018
|
||||||||||||||||||||||||||||
|
|
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
|
|
$
|
—
|
|
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
262
|
|
|
$
|
—
|
|
|
$
|
262
|
|
Financial institution instruments¹
|
|
1,101
|
|
|
460
|
|
|
—
|
|
|
1,561
|
|
|
550
|
|
|
183
|
|
|
—
|
|
|
733
|
|
||||||||
Reverse repurchase agreements
|
|
—
|
|
|
1,495
|
|
|
—
|
|
|
1,495
|
|
|
—
|
|
|
1,850
|
|
|
—
|
|
|
1,850
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
—
|
|
|
828
|
|
|
—
|
|
|
828
|
|
|
—
|
|
|
937
|
|
|
—
|
|
|
937
|
|
||||||||
Financial institution instruments¹
|
|
—
|
|
|
911
|
|
|
—
|
|
|
911
|
|
|
—
|
|
|
1,423
|
|
|
—
|
|
|
1,423
|
|
||||||||
Government debt²
|
|
—
|
|
|
110
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
428
|
|
|
—
|
|
|
428
|
|
||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
—
|
|
|
2,921
|
|
|
—
|
|
|
2,921
|
|
|
—
|
|
|
2,635
|
|
|
—
|
|
|
2,635
|
|
||||||||
Financial institution instruments¹
|
|
70
|
|
|
1,477
|
|
|
—
|
|
|
1,547
|
|
|
67
|
|
|
1,273
|
|
|
—
|
|
|
1,340
|
|
||||||||
Government debt²
|
|
—
|
|
|
1,773
|
|
|
—
|
|
|
1,773
|
|
|
—
|
|
|
1,868
|
|
|
—
|
|
|
1,868
|
|
||||||||
Other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets
|
|
62
|
|
|
295
|
|
|
—
|
|
|
357
|
|
|
—
|
|
|
180
|
|
|
—
|
|
|
180
|
|
||||||||
Loans receivable³
|
|
—
|
|
|
55
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
354
|
|
|
—
|
|
|
354
|
|
||||||||
Marketable equity securities
|
|
352
|
|
|
—
|
|
|
—
|
|
|
352
|
|
|
1,440
|
|
|
—
|
|
|
—
|
|
|
1,440
|
|
||||||||
Other long-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
—
|
|
|
1,900
|
|
|
—
|
|
|
1,900
|
|
|
—
|
|
|
1,843
|
|
|
—
|
|
|
1,843
|
|
||||||||
Financial institution instruments¹
|
|
—
|
|
|
890
|
|
|
—
|
|
|
890
|
|
|
—
|
|
|
912
|
|
|
—
|
|
|
912
|
|
||||||||
Government debt²
|
|
—
|
|
|
638
|
|
|
—
|
|
|
638
|
|
|
—
|
|
|
633
|
|
|
—
|
|
|
633
|
|
||||||||
Other long-term assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets
|
|
—
|
|
|
933
|
|
|
23
|
|
|
956
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||||||
Loans receivable³
|
|
—
|
|
|
494
|
|
|
—
|
|
|
494
|
|
|
—
|
|
|
229
|
|
|
—
|
|
|
229
|
|
||||||||
Total assets measured and recorded at fair value
|
|
$
|
1,585
|
|
|
$
|
15,509
|
|
|
$
|
23
|
|
|
$
|
17,117
|
|
|
$
|
2,057
|
|
|
$
|
15,110
|
|
|
$
|
—
|
|
|
$
|
17,167
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other accrued liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
$
|
—
|
|
|
$
|
440
|
|
|
$
|
—
|
|
|
$
|
440
|
|
|
$
|
—
|
|
|
$
|
412
|
|
|
$
|
—
|
|
|
$
|
412
|
|
Other long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
415
|
|
|
68
|
|
|
483
|
|
||||||||
Total liabilities measured and recorded at fair value
|
|
$
|
—
|
|
|
$
|
459
|
|
|
$
|
—
|
|
|
$
|
459
|
|
|
$
|
—
|
|
|
$
|
827
|
|
|
$
|
68
|
|
|
$
|
895
|
|
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 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
|
16
|
NOTE 11 :
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
(In Millions)
|
|
Sep 28,
2019 |
|
Dec 29,
2018 |
||||
Foreign currency contracts
|
|
$
|
23,144
|
|
|
$
|
19,223
|
|
Interest rate contracts
|
|
15,194
|
|
|
22,447
|
|
||
Other
|
|
1,594
|
|
|
1,356
|
|
||
Total
|
|
$
|
39,932
|
|
|
$
|
43,026
|
|
|
|
September 28, 2019
|
|
December 29, 2018
|
||||||||||||
(In Millions)
|
|
Assets1
|
|
Liabilities2
|
|
Assets1
|
|
Liabilities2
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts3
|
|
$
|
84
|
|
|
$
|
259
|
|
|
$
|
44
|
|
|
$
|
244
|
|
Interest rate contracts
|
|
922
|
|
|
—
|
|
|
84
|
|
|
474
|
|
||||
Total derivatives designated as hedging instruments
|
|
1,006
|
|
|
259
|
|
|
128
|
|
|
718
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts3
|
|
236
|
|
|
131
|
|
|
132
|
|
|
155
|
|
||||
Interest rate contracts
|
|
9
|
|
|
69
|
|
|
20
|
|
|
22
|
|
||||
Equity contracts
|
|
62
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total derivatives not designated as hedging instruments
|
|
307
|
|
|
200
|
|
|
152
|
|
|
177
|
|
||||
Total derivatives
|
|
$
|
1,313
|
|
|
$
|
459
|
|
|
$
|
280
|
|
|
$
|
895
|
|
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
|
17
|
|
|
September 28, 2019
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
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
|
|
$
|
1,299
|
|
|
$
|
—
|
|
|
$
|
1,299
|
|
|
$
|
(240
|
)
|
|
$
|
(1,053
|
)
|
|
$
|
6
|
|
Reverse repurchase agreements
|
|
1,845
|
|
|
—
|
|
|
1,845
|
|
|
—
|
|
|
(1,845
|
)
|
|
—
|
|
||||||
Total assets
|
|
3,144
|
|
|
—
|
|
|
3,144
|
|
|
(240
|
)
|
|
(2,898
|
)
|
|
6
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities subject to master netting arrangements
|
|
407
|
|
|
—
|
|
|
407
|
|
|
(240
|
)
|
|
(128
|
)
|
|
39
|
|
||||||
Total liabilities
|
|
$
|
407
|
|
|
$
|
—
|
|
|
$
|
407
|
|
|
$
|
(240
|
)
|
|
$
|
(128
|
)
|
|
$
|
39
|
|
|
|
December 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
|
|
$
|
292
|
|
|
$
|
—
|
|
|
$
|
292
|
|
|
$
|
(220
|
)
|
|
$
|
(72
|
)
|
|
$
|
—
|
|
Reverse repurchase agreements
|
|
2,099
|
|
|
—
|
|
|
2,099
|
|
|
—
|
|
|
(1,999
|
)
|
|
100
|
|
||||||
Total assets
|
|
2,391
|
|
|
—
|
|
|
2,391
|
|
|
(220
|
)
|
|
(2,071
|
)
|
|
100
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities subject to master netting arrangements
|
|
890
|
|
|
—
|
|
|
890
|
|
|
(220
|
)
|
|
(576
|
)
|
|
94
|
|
||||||
Total liabilities
|
|
$
|
890
|
|
|
$
|
—
|
|
|
$
|
890
|
|
|
$
|
(220
|
)
|
|
$
|
(576
|
)
|
|
$
|
94
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
18
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||||||
Interest rate contracts
|
|
$
|
273
|
|
|
$
|
(230
|
)
|
|
$
|
1,312
|
|
|
$
|
(601
|
)
|
Hedged items
|
|
(273
|
)
|
|
230
|
|
|
(1,312
|
)
|
|
601
|
|
||||
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 28,
2019 |
|
Dec 29,
2018 |
|
Sep 28,
2019 |
|
Dec 29,
2018 |
||||||||
Long-term debt
|
|
$
|
(13,834
|
)
|
|
$
|
(19,622
|
)
|
|
$
|
(922
|
)
|
|
$
|
390
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In Millions)
|
|
Location of Gains (Losses)
Recognized in Income on Derivatives
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||||||
Foreign currency contracts
|
|
Interest and other, net
|
|
$
|
150
|
|
|
$
|
(1
|
)
|
|
$
|
187
|
|
|
$
|
268
|
|
Interest rate contracts
|
|
Interest and other, net
|
|
(12
|
)
|
|
3
|
|
|
(51
|
)
|
|
22
|
|
||||
Other
|
|
Various
|
|
17
|
|
|
53
|
|
|
198
|
|
|
49
|
|
||||
Total
|
|
|
|
$
|
155
|
|
|
$
|
55
|
|
|
$
|
334
|
|
|
$
|
339
|
|
NOTE 12 :
|
CONTINGENCIES
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
19
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
20
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
21
|
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)
|
MD&A
|
Consolidated Results & Analysis
|
22
|
|
SEGMENT REVENUE WALKS $B
|
|
||
|
Q3 2019 vs. Q3 2018
|
|
YTD 2019 vs. YTD 2018
|
|
MD&A
|
Consolidated Results & Analysis
|
23
|
GROSS MARGIN $B
|
(In Millions)
|
|
|
||
$
|
11,295
|
|
|
Q3 2019 Gross Margin
|
(855
|
)
|
|
Lower gross margin from adjacent businesses primarily due to NAND, modem, and the absence of government grants recognized in Q3 2018
|
|
(500
|
)
|
|
Higher platform unit cost primarily from increased mix of performance products
|
|
(140
|
)
|
|
Lower gross margin from platform revenue
|
|
455
|
|
|
Lower period charges primarily due to lower factory start-up costs and sell-through of previously reserved non-qualified platform product, offset by higher initial production costs associated with our 10nm process technology
|
|
(25
|
)
|
|
Other
|
|
$
|
12,360
|
|
|
Q3 2018 Gross Margin
|
|
|
|
||
$
|
30,262
|
|
|
YTD 2019 Gross Margin
|
(1,300
|
)
|
|
Lower gross margin from adjacent businesses primarily due to NAND, the absence of government grants recognized in Q3 2018, modem, and IOTG
|
|
(695
|
)
|
|
Higher platform unit cost primarily from increased mix of performance products
|
|
(370
|
)
|
|
Lower gross margin from platform revenue
|
|
105
|
|
|
Lower period charges primarily due to lower factory start-up costs and sell-through of previously reserved non-qualified platform product, offset by higher initial production costs associated with our 10nm process technology
|
|
12
|
|
|
Other
|
|
$
|
32,510
|
|
|
YTD 2018 Gross Margin
|
MD&A
|
Consolidated Results & Analysis
|
24
|
|
RESEARCH AND DEVELOPMENT $B
|
|
MARKETING, GENERAL AND ADMINISTRATIVE $B
|
RESEARCH AND DEVELOPMENT
|
R&D decreased by $220 million, or 6.4%, driven by the following:
|
|
|
|
-
|
Ramp down of 5G smartphone modem business
|
-
|
Profit dependent compensation due to a decrease in net income
|
+
|
Investments in data-centric businesses
|
R&D decreased by $132 million, or 1.3%, driven by the following:
|
|
|
|
-
|
Ramp down of 5G smartphone modem business and other projects
|
-
|
Corporate spending efficiencies
|
-
|
Profit dependent compensation due to a decrease in net income
|
+
|
Investments in data-centric businesses
|
+
|
Investments in process technology
|
MARKETING, GENERAL AND ADMINISTRATIVE
|
MG&A decreased by $119 million, or 7.4%, driven by the following:
|
|
|
|
-
|
Corporate spending efficiencies
|
-
|
Profit dependent compensation due to a decrease in net income
|
MG&A decreased by $622 million, or 11.9%, driven by the following:
|
|
|
|
-
|
Corporate spending efficiencies
|
-
|
Profit dependent compensation due to a decrease in net income
|
-
|
Lack of expenses due to the Wind River Divestiture
|
MD&A
|
Consolidated Results & Analysis
|
25
|
|
CCG REVENUE $B
|
|
CCG OPERATING INCOME $B
|
|
■ Platform
|
■ Adjacent
|
REVENUE SUMMARY
|
|
|
Q3 2019 vs. Q3 2018
|
|
YTD 2019 vs. YTD 2018
|
||||||||||
(Dollars in Millions)
|
|
%
|
|
$ Impact
|
|
%
|
|
$ Impact
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||
Desktop platform volume
|
|
down
|
(11)%
|
|
$
|
(362
|
)
|
|
down
|
(10)%
|
|
$
|
(890
|
)
|
Desktop platform ASP
|
|
up
|
3%
|
|
105
|
|
|
up
|
5%
|
|
425
|
|
||
Notebook platform volume
|
|
down
|
(10)%
|
|
(568
|
)
|
|
down
|
(6)%
|
|
(998
|
)
|
||
Notebook platform ASP
|
|
up
|
4%
|
|
187
|
|
|
up
|
6%
|
|
905
|
|
||
Adjacent products and other
|
|
|
|
|
113
|
|
|
|
|
|
512
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Total change in revenue
|
|
|
|
|
$
|
(525
|
)
|
|
|
|
|
$
|
(46
|
)
|
MD&A
|
Segment Results & Analysis
|
26
|
OPERATING INCOME SUMMARY
|
(In Millions)
|
|
|
||
$
|
4,305
|
|
|
Q3 2019 CCG Operating Income
|
(515
|
)
|
|
Higher platform unit cost
|
|
(435
|
)
|
|
Lower gross margin from platform revenue
|
|
(225
|
)
|
|
Lower gross margin from adjacent businesses
|
|
690
|
|
|
Lower period charges primarily due to lower factory start-up costs and sell-through of previously reserved non-qualified platform product, offset by higher initial production costs associated with our 10nm process technology
|
|
265
|
|
|
Lower operating expenses primarily driven by lower investments in modem
|
|
(7
|
)
|
|
Other
|
|
$
|
4,532
|
|
|
Q3 2018 CCG Operating Income
|
|
|
|
||
$
|
11,114
|
|
|
YTD 2019 CCG Operating Income
|
820
|
|
|
Lower period charges primarily due to lower factory start-up costs and sell-through of previously reserved non-qualified platform product, offset by higher initial production costs associated with our 10nm process technology
|
|
550
|
|
|
Lower operating expenses primarily driven by lower investments in modem
|
|
(595
|
)
|
|
Higher platform unit cost
|
|
(130
|
)
|
|
Lower gross margin from platform revenue
|
|
(110
|
)
|
|
Lower gross margin from adjacent businesses
|
|
22
|
|
|
Other
|
|
$
|
10,557
|
|
|
YTD 2018 CCG Operating Income
|
MD&A
|
Segment Results & Analysis
|
27
|
|
DCG REVENUE $B
|
|
DCG OPERATING INCOME $B
|
|
■ Platform
|
■ Adjacent
|
REVENUE SUMMARY
|
|
Q3 2019 vs. Q3 2018
|
|
YTD 2019 vs. YTD 2018
|
||||||||||
(Dollars in Millions)
|
%
|
|
$ Impact
|
|
%
|
|
$ Impact
|
||||||
|
|
|
|
|
|
|
|
|
|
||||
Platform volume
|
down
|
(6)%
|
|
$
|
(315
|
)
|
|
down
|
(8)%
|
|
$
|
(1,306
|
)
|
Platform ASP
|
up
|
9%
|
|
497
|
|
|
up
|
4%
|
|
599
|
|
||
Adjacent products
|
up
|
12%
|
|
62
|
|
|
up
|
4%
|
|
53
|
|
||
|
|
|
|
|
|
|
|
|
|
||||
Total change in revenue
|
|
|
|
$
|
244
|
|
|
|
|
|
$
|
(654
|
)
|
OPERATING INCOME SUMMARY
|
(In Millions)
|
|
|
||
$
|
3,115
|
|
|
Q3 2019 DCG Operating Income
|
225
|
|
|
Higher gross margin from platform revenue
|
|
(165
|
)
|
|
Higher period charges, primarily associated with the initial ramp of 10nm
|
|
(27
|
)
|
|
Other
|
|
$
|
3,082
|
|
|
Q3 2018 DCG Operating Income
|
|
|
|
||
$
|
6,756
|
|
|
YTD 2019 DCG Operating Income
|
(610
|
)
|
|
Higher period charges, primarily associated with the initial ramp of 10nm
|
|
(540
|
)
|
|
Lower gross margin from platform revenue
|
|
(425
|
)
|
|
Higher DCG operating expenses
|
|
(90
|
)
|
|
Lower gross margin from adjacent businesses and other
|
|
$
|
8,421
|
|
|
YTD 2018 DCG Operating Income
|
MD&A
|
Segment Results & Analysis
|
28
|
|
INTERNET OF THINGS REVENUE $B
|
|
INTERNET OF THINGS OPERATING INCOME $B
|
|
■ IOTG
|
■ Mobileye
|
|
|
■ IOTG
|
■ Mobileye
|
|
REVENUE AND OPERATING INCOME SUMMARY
|
Q3 2019 vs. Q3 2018
|
YTD 2019 vs. YTD 2018
|
MD&A
|
Segment Results & Analysis
|
29
|
|
NSG REVENUE $B
|
|
NSG OPERATING INCOME $B
|
REVENUE AND OPERATING INCOME SUMMARY
|
Q3 2019 vs. Q3 2018
|
YTD 2019 vs. YTD 2018
|
MD&A
|
Segment Results & Analysis
|
30
|
|
PSG REVENUE $B
|
|
PSG OPERATING INCOME $B
|
REVENUE AND OPERATING INCOME SUMMARY
|
Q3 2019 vs. Q3 2018
|
YTD 2019 vs. YTD 2018
|
MD&A
|
Segment Results & Analysis
|
31
|
(In Millions)
|
|
Q3 2019
|
|
Q3 2018
|
|
YTD 2019
|
|
YTD 2018
|
||||||||
Gains (losses) on equity investments, net
|
|
$
|
318
|
|
|
$
|
(75
|
)
|
|
$
|
922
|
|
|
$
|
365
|
|
Interest and other, net
|
|
$
|
(46
|
)
|
|
$
|
(132
|
)
|
|
$
|
(170
|
)
|
|
$
|
225
|
|
(Dollars in Millions)
|
|
Q3 2019
|
|
Q3 2018
|
|
YTD 2019
|
|
YTD 2018
|
||||||||
Income before taxes
|
|
$
|
6,719
|
|
|
$
|
7,142
|
|
|
$
|
15,990
|
|
|
$
|
17,682
|
|
Provision for taxes
|
|
$
|
729
|
|
|
$
|
744
|
|
|
$
|
1,847
|
|
|
$
|
1,824
|
|
Effective tax rate
|
|
10.8
|
%
|
|
10.4
|
%
|
|
11.6
|
%
|
|
10.3
|
%
|
MD&A
|
Consolidated Results & Analysis
|
32
|
(Dollars in Millions)
|
|
Sep 28,
2019 |
|
Dec 29,
2018 |
||||
Cash and cash equivalents, short-term investments, and trading assets
|
|
$
|
12,025
|
|
|
$
|
11,650
|
|
Other long-term investments
|
|
$
|
3,428
|
|
|
$
|
3,388
|
|
Loans receivable and other
|
|
$
|
1,693
|
|
|
$
|
1,550
|
|
Reverse repurchase agreements with original maturities greater than three months
|
|
$
|
350
|
|
|
$
|
250
|
|
Total debt
|
|
$
|
28,907
|
|
|
$
|
26,359
|
|
Temporary equity
|
|
$
|
166
|
|
|
$
|
419
|
|
Debt as percentage of permanent stockholders’ equity
|
|
38.9
|
%
|
|
35.4
|
%
|
|
CASH FROM OPERATIONS $B
|
|
CAPITAL EXPENDITURES $B
|
|
CASH TO STOCKHOLDERS $B
|
|
|
|
|
■ Dividends ■ Buybacks
|
|
|
Nine Months Ended
|
||||||
(In Millions)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||
Net cash provided by operating activities
|
|
$
|
23,257
|
|
|
$
|
22,532
|
|
Net cash used for investing activities
|
|
(9,920
|
)
|
|
(9,419
|
)
|
||
Net cash provided by (used for) financing activities
|
|
(12,421
|
)
|
|
(13,139
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
916
|
|
|
$
|
(26
|
)
|
MD&A
|
Consolidated Results & Analysis
|
33
|
MD&A
|
Consolidated Results & Analysis
|
34
|
OTHER KEY INFORMATION
|
OTHER KEY INFORMATION
|
|
35
|
|
|
Three Months Ended
|
||||||
(In Millions, Except Per Share Amounts)
|
|
Sep 28,
2019 |
|
Sep 29,
2018 |
||||
Operating income
|
|
$
|
6,447
|
|
|
$
|
7,349
|
|
Amortization of acquisition-related intangible assets
|
|
338
|
|
|
326
|
|
||
Restructuring and other charges
|
|
104
|
|
|
(72
|
)
|
||
Non-GAAP operating income
|
|
$
|
6,889
|
|
|
$
|
7,603
|
|
Earnings per share - diluted
|
|
$
|
1.35
|
|
|
$
|
1.38
|
|
Amortization of acquisition-related intangible assets
|
|
0.08
|
|
|
0.07
|
|
||
Restructuring and other charges
|
|
0.02
|
|
|
(0.02
|
)
|
||
Ongoing mark-to-market on marketable equity securities
|
|
(0.02
|
)
|
|
—
|
|
||
Tax Reform
|
|
—
|
|
|
(0.02
|
)
|
||
Income tax effect
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||
Non-GAAP earnings per share - diluted
|
|
$
|
1.42
|
|
|
$
|
1.40
|
|
OTHER KEY INFORMATION
|
|
36
|
Period
|
|
Total Number
of Shares Purchased (In Millions) |
|
Average Price
Paid Per Share |
|
Dollar Value of
Shares That May Yet Be Purchased Under the Program (In Millions) |
|||||
June 30, 2019 - July 27, 2019
|
|
22.5
|
|
|
$
|
49.63
|
|
|
$
|
10,621
|
|
July 28, 2019 - August 24, 2019
|
|
36.8
|
|
|
$
|
47.36
|
|
|
$
|
8,877
|
|
August 25, 2019 - September 28, 2019
|
|
32.7
|
|
|
$
|
49.81
|
|
|
$
|
7,249
|
|
Total
|
|
92.0
|
|
|
|
|
|
OTHER KEY INFORMATION
|
|
37
|
|
|
|
|
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
|
|
1/17/2019
|
|
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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
|
104
|
|
Cover Page Interactive Data File - formatted in Inline XBRL and included as Exhibit 101
|
|
|
|
|
|
|
|
|
|
X
|
OTHER KEY INFORMATION
|
|
38
|
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 34
|
Item 4.
|
Controls and Procedures
|
Page 35
|
|
|
|
Part II - Other Information
|
|
|
Item 1.
|
Legal Proceedings
|
|
Item 1A.
|
Risk Factors
|
Page 35
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Page 37
|
Item 3.
|
Defaults Upon Senior Securities
|
Not applicable
|
Item 4.
|
Mine Safety Disclosures
|
Not applicable
|
Item 5.
|
Other Information
|
Not applicable
|
Item 6.
|
Exhibits
|
|
|
|
|
Signatures
|
|
Page 40
|
(a)
|
As of September 28, 2019, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
|
(b)
|
There were no material changes to our significant contractual obligations from those disclosed in our 2018 Form 10-K.
|
OTHER KEY INFORMATION
|
|
39
|
|
|
|
INTEL CORPORATION
(Registrant) |
||
|
|
|
|
|
|
Date:
|
October 24, 2019
|
|
By:
|
|
/s/ GEORGE S. DAVIS
|
|
|
|
|
|
George S. Davis
|
|
|
|
|
|
Executive Vice President, Chief Financial Officer and Principal Financial Officer
|
|
|
|
|
|
|
Date:
|
October 24, 2019
|
|
By:
|
|
/s/ KEVIN T. MCBRIDE
|
|
|
|
|
|
Kevin T. McBride
|
|
|
|
|
|
Vice President of Finance, Corporate Controller and Principal Accounting Officer
|
|
|
40
|
By: /s/Ravi Jacob
|
Name: Ravi Jacob
|
By: /s/Maddy Hughes
|
Name: Maddy Hughes
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Intel Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
October 24, 2019
|
|
By:
|
/s/ ROBERT H. SWAN
|
|
|
|
|
Robert H. Swan
|
|
|
|
|
Chief Executive Officer, Director and Principal Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Intel Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
October 24, 2019
|
|
By:
|
/s/ GEORGE S. DAVIS
|
|
|
|
|
George S. Davis
|
|
|
|
|
Executive Vice President, Chief Financial Officer and Principal Financial Officer
|
Date:
|
October 24, 2019
|
|
By:
|
/s/ ROBERT H. SWAN
|
|
|
|
|
Robert H. Swan
|
|
|
|
|
Chief Executive Officer, Director and Principal Executive Officer
|
|
|
|
|
|
Date:
|
October 24, 2019
|
|
By:
|
/s/ GEORGE S. DAVIS
|
|
|
|
|
George S. Davis
|
|
|
|
|
Executive Vice President, Chief Financial Officer and Principal Financial Officer
|