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☑
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 28, 2019.
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or
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to .
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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,
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Santa Clara,
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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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Title of each class
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Trading symbol
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Name of each exchange on which registered
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Common stock, $0.001 par value
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INTC
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Nasdaq Global Select Market
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Large Accelerated Filer
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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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☑
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☐
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☐
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☐
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☐
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FUNDAMENTALS OF OUR BUSINESS
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PAGE
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Introduction to Our Business
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A Year in Review
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Our Strategy
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Our Capital
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MANAGEMENT'S DISCUSSION AND ANALYSIS
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How We Organize Our Business
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Our Products
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Segment Trends and Results
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Consolidated Results of Operations
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Liquidity and Capital Resources
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Contractual Obligations
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Quantitative and Qualitative Disclosures about Market Risk
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Non-GAAP Financial Measures
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OTHER KEY INFORMATION
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Selected Financial Data
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Sales and Marketing
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Competition
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Intellectual Property Rights and Licensing
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Critical Accounting Estimates
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Risk Factors
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Properties
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Market for Our Common Stock
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Information about Our Executive Officers
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Availability of Company Information
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FINANCIAL STATEMENTS AND SUPPLEMENTAL DETAILS
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Auditor's Reports
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Consolidated Financial Statements
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Notes to the Consolidated Financial Statements
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Key Terms
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Financial Information by Quarter
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Controls and Procedures
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Exhibits
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Form 10-K Cross-Reference Index
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1
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Intel's definition is included in "Key Terms" within the Financial Statements and Supplemental Details.
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*
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Other names and brands may be claimed as the property of others.
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1
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2
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INTRODUCTION TO OUR BUSINESS
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Intel was founded in 1968 and our technology has been at the heart of computing breakthroughs ever since. More than 50 years later, we are a world leader in the design and manufacturing of essential technologies that power the cloud and an increasingly smart, connected world. Intel is transforming from a PC-centric company to a data-centric company, with workload-optimized solutions designed to help a broad set of customers process, move, and store ever-increasing amounts of data. This exponential growth of data is reshaping computing and expanding our opportunity.
We are investing to lead data-driven technology inflections that position us to play a bigger role in the success of our customers. These include: the rise of AI, the transformation of networks, the intelligent edge1 emerging with the Internet of Things, and autonomous driving. Intel’s ambitions have never been greater: to create world-changing technology that enriches the lives of every person on earth.
Our commitment to corporate responsibility and to creating an inclusive environment to support the talent of our amazing people supports our ambitions and makes us stronger. When every employee has a voice and a sense of belonging, Intel can be more innovative, agile, and competitive.
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"We are at a key inflection point with the exponential growth of data creating massive demand for semiconductors. Cloud workloads are diversifying, networks are transforming, and more computing performance is moving to the edge. We have been on a multi-year journey to reposition the company’s portfolio to take advantage of this industry catalyst. Today, we have the product and technology leadership that uniquely positions us to capitalize on these trends, and we are investing in the IP required to help our customers win the inflections of the future."
—Bob Swan, Chief Executive Officer
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1 Intel's definition is included in "Key Terms" within the Financial Statements and Supplemental Details.
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3
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A YEAR IN REVIEW
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Our transformation to a data-centric company continued in 2019, and we experienced strong demand and reached critical product milestones. We achieved record revenue of $72.0 billion, 48% of which was from our data-centric businesses. We invested $13.4 billion in R&D while reducing our spending to 27% of revenue. Additionally, we made capital investments of $16.2 billion, generated $33.1 billion cash from operations and $16.9 billion of free cash flow, and returned $5.6 billion in dividends to stockholders. We continue to focus on improving supply and supporting our customers' growth. We increased our wafer capacity during 2019; however, we did not see a commensurate increase in client CPU unit volume as wafer capacity was largely consumed by increases in modem and chipset volumes, and unit die sizes.
Our 10nm manufacturing process entered full production as we launched our first products from this advanced technology. We are accelerating the pace of process node introductions and moving back to a 2- to 2.5-year cadence. We are on track to deliver our first 7nm-based product, a discrete GPU, at the end of 2021. 5G continues to be a strategic priority, and our exit from the 5G smartphone modem business is enabling us to increase the focus of our 5G efforts on the opportunity to modernize network and edge infrastructure.
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"We achieved record revenue for the fourth consecutive year, exercised discipline to drive spending efficiencies, and returned capital to our stockholders. Our results reflect a relentless commitment to improve execution that benefits our customers and increases shareholder value."
—George Davis, Chief Financial Officer
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REVENUE
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OPERATING INCOME
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DILUTED EPS
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CASH FLOWS
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■ PC-CENTRIC $B
■ DATA-CENTRIC $B
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■ GAAP $B ■ NON-GAAP $B
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■ GAAP ■ NON-GAAP
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■ OPERATING CASH FLOW $B
■ FREE CASH FLOW1 $B
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$72.0B
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$22.0B
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$23.8B
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$4.71
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$4.87
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$33.1B
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$16.9B
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GAAP
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GAAP
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non-GAAP1
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GAAP
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non-GAAP1
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GAAP
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non-GAAP1
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Revenue up 2% from 2018; Data-centric up 3% and PC-centric flat
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Operating income down $1.3B or 5% from 2018; 2019 operating margin at 31%
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Operating income down $797M or 3% from 2018; 2019 operating margin at 33%
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Diluted EPS up $0.23 or 5% from 2018
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Diluted EPS up $0.29 or 6% from 2018
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Operating cash flow up $3.7B or 13%; operating cash flow to net income at 157%
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Free cash flow up $2.7B or 19%; free cash flow to non-GAAP net income at 78%
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High-performance product sales in the second half of 2019, partially offset by NAND pricing pressure and decrease in platform2 unit sales
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Lower gross margin from decrease in NAND market pricing and lower platform unit sales, partially offset by platform ASP strength
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Lower shares outstanding and platform ASP strength, partially offset by a decrease in platform unit sales and lower NAND market pricing
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Working capital changes driven by tax and other assets and liabilities, partially offset by lower memory prepayments and inventory build
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GOAL (2019 - 2021)
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GOAL (2019 - 2021)
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GOAL (2019 - 2021)
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GOAL (2019 - 2021)
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Low single-digit growth over the next three years to $76B-$78B;
data-centric businesses high single- digit growth and PC-centric business approximately flat to slightly down
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Keep non-GAAP operating margin roughly flat at approximately 32% over the next three years
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Grow non-GAAP diluted EPS in line with revenue over the next three years
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Achieve free cash flow of approximately 80% of non-GAAP net income by 2021
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Progress
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Progress
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Progress
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Progress
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Revenue grew 2% from 2018 to 2019, to $72.0B
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Non-GAAP operating margin was 33% in 2019
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Non-GAAP diluted EPS grew 6% from 2018 to 2019; revenue grew 2% over the same period
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Free cash flow was 78% of non-GAAP net income
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See "Non-GAAP Financial Measures" within MD&A.
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See "Our Products" within MD&A.
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FUNDAMENTALS OF OUR BUSINESS
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4
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DATA-CENTRIC BUSINESSES EXPAND WITH NEW OPPORTUNITIES
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PC-CENTRIC BUSINESS INNOVATES
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Data-Centric Portfolio Launch
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10nm-based 10th Generation Intel® CoreTM Shipping
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We introduced a portfolio of data-centric solutions consisting of 2nd generation Intel® Xeon® Scalable processors, Intel® Optane™ DC memory and storage solutions, and software and platform technologies optimized to help our customers extract more value from their data. Our latest data center solutions target a wide range of use cases within cloud computing, network infrastructure, and intelligent edge applications, and support high-growth workloads, including AI and 5G.
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We started shipping our 10nm-based 10th generation Intel® CoreTM processors, previously referred to as Ice Lake. Our 10th generation Intel® CoreTM processor silicon will enable the first wave of PCs with instructions for AI, includes an all-new CPU Core architecture and Gen 11 graphics engine, and is the first client CPU to integrate Wi-Fi 6 and Thunderbolt™ 3 connectivity modules.
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10nm FPGAs Shipping
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We began shipping engineering samples of Intel® Agilex™ FPGAs to customers. The 10nm-based FPGAs are used by our customers to develop advanced solutions for networking, 5G, and accelerated data analytics. The Intel® Agilex™ FPGA family leverages heterogeneous 3D SiP technology to deliver higher performance or higher power efficiency.
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Project Athena Innovation Program
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Project Athena is a new multi-year innovation program to help the PC ecosystem create advanced laptops that meet ambitious key experience indicators in performance, responsiveness, battery life, form factor, and AI. The first laptops verified through the innovation program became
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Habana Labs Acquisition
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We acquired Habana Labs Ltd., an Israel-based developer of programmable deep learning accelerators for the data center, for approximately $1.7 billion. Habana's AI processors provide data scientists and developers with accelerator hardware that improves processing performance and reduces power consumption. Habana's Gaudi* AI training processor is currently sampling with select hyperscale customers. Large-node training systems based on Gaudi* are expected to deliver up to four times increase in throughput versus systems built with the equivalent number of GPUs. The acquisition strengthens our AI portfolio and accelerates our efforts in the nascent, fast-growing AI silicon market.
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available in 2019, identified by the visual marker "Engineered for Mobile Performance."
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BIG BETS UPDATE
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We aim to be at the forefront of the constant technological change in our industry. We will evaluate new and existing big bets based on the following criteria: the "bet" is leading the edge of a technology inflection, it plays a significant role in our customers' success, and it offers a clear path to profitability and attractive returns. Currently, our big bets are memory, autonomous driving, and 5G.
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We exited 5G smartphone modem business to increase the focus of our 5G efforts on the broader opportunity to modernize network and edge infrastructure.
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We continue to make progress in memory and autonomous driving. We launched Intel® Optane™ DC persistent memory for the data center and continue to take steps to improve NAND profitability. Mobileye's EyeQ*5, the vision central computer performing sensor fusion for fully autonomous driving, is operational in Mobileye's autonomous test vehicles.
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"While process and CPU leadership remain fundamentally important, an extraordinary rate of innovation is required across a combination of foundational building blocks, including architecture, memory, interconnect, security, and software, to take full advantage of the opportunities created by the explosion of data."
—Dr. Venkata (Murthy) M. Renduchintala, Group President of the Technology, Systems Architecture and Client Group and Chief Engineering Officer
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FUNDAMENTALS OF OUR BUSINESS
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5
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OUR STRATEGY
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MAKE THE WORLD'S BEST SEMICONDUCTORS
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Product leadership is defined by our ability to optimize across six engineering pillars: process technology and packaging, architecture, memory, interconnect, security, and software. With these six pillars, we are accelerating product innovation with a focus on xPU platforms uniquely able to serve diverse new workload opportunities (e.g., CPU, GPU, AI accelerator and FPGA). These innovation efforts will extend Intel’s opportunities to deliver products beyond the CPU that will contribute to the success of our customers.
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LEAD TECHNOLOGY INFLECTIONS
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FUNDAMENTALS OF OUR BUSINESS
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6
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BE THE LEADING END-TO-END PLATFORM PROVIDER FOR THE NEW DATA WORLD
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Customers look to Intel for our end-to-end capability to deliver solutions that enable customers to move faster, store more, and process everything. We continue to make investments in optimizing our Intel® Xeon® processors in response to our customers’ need for high-performance computing. We continue to develop innovative memory and storage solutions, including Intel® QLC 3D NAND Technology and Intel® Optane™ memory, to provide data center products that are optimized to deliver world-class performance and drive lower total cost of ownership for cloud workloads. Our advancements in FPGAs enable efficient management of the changing demands of next-generation data centers and accelerate the performance of emerging applications.
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RELENTLESS FOCUS ON OPERATIONAL EXCELLENCE AND EFFICIENCY
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Underlying our transformation to a data-centric company is a relentless focus on operational excellence and efficiency. This focus includes the elimination of lower growth investments and activities, and the simplification and automation of routine processes and activities. These efforts also extend to our product design processes, where we are striving to reduce the complexity of our designs to improve our efficiency and enhance quality.
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These improvements enable us to achieve scale in our core operations, providing a stable and cost-effective platform to support additional investments in the design, development, and delivery of new products. Operational excellence helps us fund the expansion of our TAM through big-bet investments.
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CONTINUE TO HIRE, DEVELOP, AND RETAIN THE BEST, MOST DIVERSE AND INCLUSIVE TALENT
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At the core of our organization are highly skilled, diverse, and talented people capable of accelerating as one team in everything we do. We are proud of our past and inspired by how our employees are rising to the challenge to evolve our culture. Inclusion is the foundation of this evolution and runs through each of our culture attributes. These attributes reinforce:
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Customer Obsessed: Our customer’s success is our success. We listen, learn, and anticipate our customers’ needs to deliver on their ambitions.
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One Intel: We are stronger together and commit to team over individual success.
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Fearless: We are bold and innovative. We take risks, fail fast, and learn from mistakes.
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Truth and Transparency: We are committed to being open and honest while bringing clarity to complex challenges.
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Inclusion: We strive to build a culture of belonging and welcome differences, knowing it makes us better.
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Our evolution is a multi-year journey, and one that requires new and different thinking, actions, systems, and processes to ensure that our employees are equipped to innovate for a world where all data needs to be processed, moved, stored, and analyzed.
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1
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Intel's definition is included in "Key Terms" within the Financial Statements and Supplemental Details.
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FUNDAMENTALS OF OUR BUSINESS
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7
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OUR CAPITAL
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We deploy various forms of capital to execute our strategy in a way that seeks to reflect our corporate values, help our customers succeed, and create value for our stakeholders.
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FUNDAMENTALS OF OUR BUSINESS
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8
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FINANCIAL CAPITAL
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CASH FROM OPERATING ACTIVITIES $B
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■ Capital Investment
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■ Free Cash Flow1
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OUR FINANCIAL CAPITAL ALLOCATION DECISIONS ARE DRIVEN BY THREE PRIORITIES
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R&D AND CAPITAL INVESTMENTS $B
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ACQUISITIONS
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CASH TO STOCKHOLDERS $B
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■ R&D
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■ Logic
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■ Memory
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— # of Acquisitions
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■ Total Spent $B
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■ Buyback
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■ Dividend
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1
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See "Non-GAAP Financial Measures" within MD&A.
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FUNDAMENTALS OF OUR BUSINESS
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Our Capital
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INTELLECTUAL CAPITAL
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Every year we make significant investments in R&D and we have intensified our focus on six engineering pillars to advance our product capabilities. Our objective is to improve user experiences and value through advances in performance, power, cost, connectivity, security, form factor, and other features with each new generation of products. We are also focused on reducing our design complexity to improve our efficiency, including a significant reduction of design rules for future process nodes.
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Process. Development of next-generation manufacturing processes remains a critical and fundamental pillar. We announced that we are planning multiple waves of 10nm process, progressively increasing transistor performance. We also announced advances in our next-generation 2.5D (EMIB) and 3D (Foveros) packaging technology which will enable us to mix and match chips made on different processes into a single SiP, enabling new design flexibility and new device form factors. The Intel 10nm product era is underway, as we began shipping our new 10th generation Intel® CoreTM processors, previously referred to as Ice Lake.
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Six Pillars of Product Leadership
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FUNDAMENTALS OF OUR BUSINESS
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Our Capital
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10
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MANUFACTURING CAPITAL
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We improved our 10nm factory production, yield, and volume during 2019, and launched 10th-generation Intel® CoreTM processors, our first 10nm volume product, and Intel® AgilexTM, our first 10nm FPGA. We expect to deliver initial production shipments of our first 10nm-based Intel® Xeon® Scalable product, Ice Lake, in the latter part of 2020.
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"Our technology and innovation pipeline is as full and as strong as it’s ever been. By embracing our ecosystems and delivering new capability on a predictable cadence, we will continue to drive Moore’s Law forward and create compelling products for our customers.”
—Mike Mayberry, Senior Vice President, Chief Technology Officer and General Manager of Technology Development |
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We have nine manufacturing sites—six are wafer fabrication and three are assembly/test facilities. The map marks our manufacturing sites and the countries where we have a significant R&D or sales and marketing presence.
The majority of our logic wafer manufacturing is conducted in the U.S. We incur factory start-up costs as we ramp facilities for new process technologies. We ramped the 10nm process node in Oregon and Israel in 2019, and began production in Arizona in our 2020 fiscal year. We also expanded our memory facilities in Dalian, China.
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FUNDAMENTALS OF OUR BUSINESS
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Our Capital
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11
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HUMAN CAPITAL
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DIVERSITY AND INCLUSION
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To shape the future of technology, we must be representative of that future. A diverse and inclusive workforce is a business imperative and key to our long-term success. We committed $300 million to advance diversity and inclusion in our workforce and in the technology industry. We achieved our goal of full representation in our U.S. workforce two years ahead of schedule, meaning our workforce now reflects the percentage of women and underrepresented minorities available in the skilled labor market in the U.S. This achievement was the result of a comprehensive strategy that considered hiring, retention, and progression. Though we are proud of what we have accomplished to advance diversity in our workforce, we still have work to do, including beyond the walls of Intel. We took action by joining 11 other companies to fund an initiative to double the number of women of color graduating with computing degrees in the U.S. by 2025. We also continue to look for and implement partnerships and programs to increase retention and advancement of women and underrepresented populations within our workplace. The breakout of employees by gender provides our current global gender diversity.
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COMPENSATION AND BENEFITS
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We strive to provide pay, benefits, and services that help meet the varying needs of our employees. Our generous total rewards package includes market-competitive pay, broad-based stock grants and bonuses, an Employee Stock Purchase Plan, healthcare and retirement benefits, paid time off and family leave, parent reintegration, fertility assistance, flexible work schedules, sabbaticals, and on-site services. In 2019, we announced that we achieved gender pay equity globally by closing the gap in average pay between employees of different genders in the same or similar roles after accounting for legitimate business factors that can explain differences, such as performance, time at grade level, and tenure. We also continued to advance transparency in our pay and representation data by publicly releasing our 2017 and 2018 EEO-1 survey pay data mandated by the U.S. Equal Employment Opportunity Commission. The results reflected representation gaps and point to work that lies ahead. However, due to our diversity and inclusion efforts, there is promising growth of our junior female and underrepresented talent from which our future leadership will be drawn. Our challenge now is to create an environment that better helps our female and underrepresented employees develop and progress in their careers, while also ensuring we are expanding our hiring and retention of diverse talent at more senior, higher-paying positions.
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Executives refers to salary grades 12+ and equivalent grades. While we present male and female, we acknowledge this is not fully encompassing of all gender identities.
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FUNDAMENTALS OF OUR BUSINESS
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Our Capital
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12
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GROWTH AND DEVELOPMENT
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We invest significant resources to develop the talent needed to remain at the forefront of innovation and make Intel an employer of choice. We deliver training annually and provide rotational assignment opportunities. We launched a new performance management system to support our culture evolution and increase focus on continuous learning and development. Over the past five years, our undesired voluntary turnover rate has been at or below 5%.
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COMMUNICATION AND ENGAGEMENT
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Our success depends on employees understanding how their work contributes to the company’s overall strategy. We use a variety of channels to facilitate open and direct communication, including open forums with executives; employee experience surveys; and engagement through more than 30 different employee resource groups, including the Women at Intel Network, the Network of Intel African American Employees, the Intel Latino Network, and others.
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HEALTH, SAFETY, AND WELLNESS
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We are committed to the safety of our employees, customers, and communities, from operations to product development to supplier partnerships. Our ultimate goal is to achieve zero serious injuries through continued investment in and focus on our core safety programs and injury-reduction initiatives. We provide access to a variety of innovative, flexible, and convenient health and wellness programs, including on-site health centers.
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SOCIAL AND RELATIONSHIP CAPITAL
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FUNDAMENTALS OF OUR BUSINESS
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Our Capital
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13
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NATURAL CAPITAL
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"At Intel, we have long believed that to truly be a leader in manufacturing, we must also advance environmental sustainability and corporate responsibility. For more than two decades, our sustainability practices have enabled us to create significant value for our customers, investors, employees, and community stakeholders."
—Ann Kelleher, Senior Vice President and General Manager of Manufacturing and Operations
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FUNDAMENTALS OF OUR BUSINESS
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Our Capital
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14
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1
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See "Non-GAAP Financial Measures" within MD&A.
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FUNDAMENTALS OF OUR BUSINESS
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Our Capital
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15
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MANAGEMENT'S DISCUSSION AND ANALYSIS
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% INTEL REVENUE
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KEY PRODUCTS AND MARKETS
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HIGHLIGHTS
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DCG
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Includes workload-optimized platforms and related products designed for cloud, enterprise, and communication infrastructure market segments.
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Revenue for our data-centric businesses was up 3% year over year. Growth in DCG, IOTG, Mobileye, and NSG was offset by decline in PSG. We introduced new data-centric products, such as the Intel® AgilexTM FPGA, 2nd generation Intel® Xeon® Scalable processor, and Intel® Optane™ DC persistent memory. In addition, Mobileye continued to secure new design wins at major U.S. and global automakers and announced plans to commercialize MaaS.
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IOTG
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Includes high-performance compute solutions for targeted verticals and embedded applications in market segments such as retail, industrial, smart infrastructure, and vision.
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OPPORTUNITIES
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MOBILEYE
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Includes development of computer vision and machine learning-based sensing, data analysis, localization, mapping, and driving policy technology for ADAS and autonomous driving.
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We have expanded our data-centric TAM to approximately $230 billion1 with acquisitions and product innovations. Our broadened portfolio enables new opportunities for us and creates better synergistic value for our customers. For example, our product offerings for AI workloads reach from the cloud to the edge, and we are developing CPU, GPU, FPGA, and AI accelerator products to span inference and training AI workloads, while also pursuing ongoing software optimizations for AI.
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NSG
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Includes memory and storage products like Intel® Optane™ technology and Intel® 3D NAND technology, primarily used in SSDs.
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CHALLENGES
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DCG growth slowed as major cloud service providers and enterprise OEMs worked through inventory after a historic platform refresh in 2018. As we enter 2020, we expect to face an increasingly competitive market. In addition, challenging market conditions resulted in margin compression on memory products.
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PSG
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Includes programmable semiconductors, primarily FPGAs and structured ASICs, and related products for communications, cloud and enterprise, and embedded market segments.
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% INTEL REVENUE
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KEY PRODUCTS AND MARKETS
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CCG
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Includes platforms designed for end-user form factors, focusing on higher growth segments of 2-in-1, thin-and-light, commercial and gaming, and growing adjacencies such as connectivity, graphics, and memory.
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HIGHLIGHTS
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OPPORTUNITIES
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CHALLENGES
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Our PC-centric business revenue remained flat year over year. We began shipping our 10nm-based 10th generation Intel® CoreTM processors, previously referred to as Ice Lake. These processors feature a new core architecture and are expected to deliver increased graphics performance, AI, and new levels of integrated connectivity for thin-and-light laptops and 2-in-1s. We divested the majority of our 5G smartphone modem business to increase the focus of 5G efforts on the broader opportunity to modernize network and edge infrastructure while retaining critical IP and modem technology.
|
|
We are targeting an approximately $70 billion PC-centric revenue TAM1. This expanded portfolio includes markets such as connectivity, graphics, and memory, which enables new opportunities as we innovate through the platform. We launched Project Athena, a multi-year innovation program designed to deliver advanced laptops that meet ambitious key experience indicators in performance, responsiveness, battery life, form factor, and AI.
|
|
Our PC-centric business is operating in an increasingly competitive environment and we are focused on executing an annual cadence of leadership products. Strong demand across our product lines, combined with increased capacity consumed by offsetting factors, contributed to tight supply, particularly at the value end of the PC market. We are making additional investments in our manufacturing facilities and working with customers to align demand with available supply.
|
MD&A
|
|
16
|
OUR PRODUCTS
|
OUR PRODUCTS PROVIDE END-TO-END SOLUTIONS
|
WE HAVE A BROAD PRODUCT PORTFOLIO
|
•
|
Accelerators - Silicon products that can operate alone or accompany our processors in a system, such as FPGAs, VPUs, and Mobileye EyeQ* SoC
|
•
|
Boards and systems - Server boards and small form factor systems such as Intel® NUCs
|
•
|
Connectivity products - Cellular modems, Ethernet controllers, silicon photonics, Wi-Fi, and Bluetooth®
|
•
|
Memory and storage products - SSD, persistent memory, and memory components
|
MD&A
|
|
17
|
5-YEAR TRENDS
|
|
■ Revenue $B
|
— Year over Year Growth
|
|
■ Op Income $B
|
— Year over Year Growth
|
|
MD&A
|
|
18
|
MD&A
|
|
19
|
|
DCG REVENUE $B
|
|
DCG OPERATING INCOME $B
|
|
|
■ Platform
|
■ Adjacent
|
REVENUE SUMMARY
|
•
|
Higher platform ASPs from stronger core mix was partially offset by platform volume decline primarily from TAM contraction in the enterprise and government market segment.
|
•
|
Adjacent growth driven by the continued expansion of Intel® Silicon Photonics in 2019.
|
•
|
Comparing 2019 to 2018, revenue from cloud service providers was up 13%, enterprise and government was down 14%, and communications service providers was up 6% (up 40%, up 2%, and up 25%, respectively, comparing 2018 to 2017).
|
|
2019 – 2018
|
|
2018 – 2017
|
||||||||||
(Dollars in Millions)
|
% Growth
|
|
$ Impact
|
|
% Growth
|
|
$ Impact
|
||||||
|
|
|
|
|
|
|
|
|
|
||||
Platform volume
|
down
|
(3)%
|
|
$
|
(654
|
)
|
|
up
|
13%
|
|
$
|
2,334
|
|
Platform ASP
|
up
|
5%
|
|
940
|
|
|
up
|
7%
|
|
1,382
|
|
||
Adjacent products
|
up
|
11%
|
|
204
|
|
|
up
|
13%
|
|
211
|
|
||
|
|
|
|
|
|
|
|
|
|
||||
Total change in revenue
|
|
|
|
$
|
490
|
|
|
|
|
|
$
|
3,927
|
|
OPERATING INCOME SUMMARY
|
(In Millions)
|
|
|
||
$
|
10,227
|
|
|
2019 Operating Income
|
(805
|
)
|
|
Higher period charges, primarily associated with the initial ramp of 10nm
|
|
(510
|
)
|
|
Higher operating expenses primarily related to R&D
|
|
(140
|
)
|
|
Lower gross margin from adjacent businesses
|
|
(80
|
)
|
|
Higher platform unit cost
|
|
370
|
|
|
Higher gross margin from platform revenue
|
|
(84
|
)
|
|
Other
|
|
$
|
11,476
|
|
|
2018 Operating Income
|
3,445
|
|
|
Higher gross margin from platform revenue
|
|
(350
|
)
|
|
Higher platform unit cost
|
|
(14
|
)
|
|
Other
|
|
$
|
8,395
|
|
|
2017 Operating Income
|
MD&A
|
20
|
INTERNET OF THINGS GROUP
|
MD&A
|
|
21
|
5-YEAR TRENDS
|
|
■ Revenue $B
|
— Year over Year Growth
|
|
|
■ Op Income $B
|
— Year over Year Growth
|
|
|
|
|
Many retailers are sitting on mountains of data that can be used to proactively address evolving customer demands. IOTG provides solutions that enable retailers to extract the right insights from their data, in the right place, at the right time, allowing them to use intelligence to transform their businesses to achieve their full potential. The result is greater efficiency, reduced complexity, increased sales, and a more personalized customer experience.
|
||||
|
As a result of consumer preference for more customization and higher-quality manufactured goods, a new kind of factory is emerging—one that is cloud connected and data driven. It is an “intelligent factory” marked by hyper-agility, autonomous production, and the use of data as a transformative force for the business.
|
|||||
|
We help cities and infrastructure providers turn data into actionable insights to enable smarter, safer, and more efficient solutions. Infrastructure providers and cities are seeking the best ways to use Internet of Things technology to enhance the quality of services, improve public safety, reduce congestion, and achieve new levels of efficiency.
|
|||||
|
By 2022, we expect approximately 82% of data traffic will be video1. Processing high-quality video requires the ability to rapidly analyze vast streams of data near the source and to respond to that data in real time, moving only relevant insights to the cloud. Rather than a one-size-fits-all solution, Intel offers a powerful portfolio of scalable hardware and software solutions, including the OpenVINO™ toolkit and the new Intel® Vision Accelerator Design products, to move into an intelligent, data-powered future and to meet the various performance, power, and price requirements of any business, in any industry.
|
|||||
MD&A
|
|
22
|
MOBILEYE
|
We believe the future of autonomous driving will unfold in two phases: commercial Robotaxi and series-production passenger car Consumer AV. We expect Consumer AV to materialize only after the Robotaxi industry deploys and matures. The main inhibitors of a mass market product offering of Consumer AV are the cost of AV technology, ability to scale at a low cost, regulation structure, and public acceptance. Thus, we see the Robotaxi phase as a necessary corridor to Consumer AV. Mobileye is well positioned to play a significant role in the broader MaaS market with the commercialization of Robotaxi and the future Consumer AV market. Our full-stack self-driving system—geared with our camera-centric backbone and vast experience in productizing cutting-edge technology in the automotive industry—is the foundation for developing an economically competitive AV solution. Proliferation of data-collection vehicles alongside REM technology will allow for low-cost geographic expansion and coverage. Thus, Mobileye is entering the MaaS market segment as an end-to-end service provider at scale.
|
|
MD&A
|
|
23
|
MD&A
|
|
24
|
|
INTERNET OF THINGS REVENUE $B
|
|
INTERNET OF THINGS OP INCOME $B
|
|
|
■ IOTG
|
■ Mobileye1
|
REVENUE SUMMARY
|
OPERATING INCOME SUMMARY
|
MD&A
|
|
25
|
5-YEAR TRENDS
|
|
■ Revenue $B
|
— Year over Year Growth
|
|
■ Op Income $B
|
|
|
MD&A
|
|
26
|
MD&A
|
|
27
|
|
NSG REVENUE $B
|
|
NSG OPERATING INCOME $B
|
|
REVENUE SUMMARY
|
OPERATING INCOME SUMMARY
|
MD&A
|
|
28
|
4-YEAR TRENDS
|
|
■ Revenue $B
|
— Year over Year Growth
|
|
■ Op Income $B
|
|
|
MD&A
|
|
29
|
PSG expanded its FPGA silicon portfolio by offering additional capability with the Intel® Stratix® 10 FPGA family and by introducing the brand-new Intel® Agilex™ FPGA family. The Intel® Agilex™ FPGA family combines FPGA fabric built on Intel’s 10nm process with innovative heterogeneous 3D SiP technology, which provides the capability to integrate analog, memory, custom computing, custom I/O, and Intel® eASIC™ device tiles into a single package with the FPGA fabric. Intel® Agilex™ FPGAs began shipping to early access program customers.
PSG also expanded its Intel® PAC portfolio with the introduction of the Intel® PAC N3000 and Intel® PAC D5005. The Intel® PAC portfolio, complete with an acceleration software stack, enables customers to plug cards directly into an Intel® Xeon® processor-based server for application accelerations in markets such as 5G, finance, genomics, video transcoding, and database acceleration.
|
|
MD&A
|
|
30
|
|
PSG REVENUE $B
|
|
PSG OPERATING INCOME $B
|
|
REVENUE SUMMARY
|
OPERATING INCOME SUMMARY
|
MD&A
|
31
|
OVERVIEW
|
|
|
As we evolve to deliver leading end-to-end products across architectures and workloads for the data explosion, CCG’s contribution is the human touchpoint of this new data-centric era—the PC. As the largest business unit at Intel, CCG deploys platforms that connect people to data, allowing each person to focus, create, and engage in ways that unlock their individual potential. The PC market remains a critical facet of our business, providing an important source of IP, scale, and cash flow. Our mission is to continue to deliver leadership products in our PC business as well as our adjacent businesses.
|
||
|
|
|
HIGHLIGHTS AND SEGMENT IMPERATIVES
|
||
|
|
|
●
|
We delivered our fourth consecutive year of revenue growth and record operating profit as we managed through supply constraints. We maintained focus on high-growth segments and disciplined portfolio management. Since 2015, we have increased profitability by 86%.
|
"I believe we can transform the PC into a platform that powers every person's greatest contribution by enabling them to focus, create, and engage in more meaningful ways."
—Gregory Bryant, CCG General Manager |
●
|
Delivering an annual cadence of leadership products is foundational to our business. This year, we introduced our 10th Gen Intel® Core™ processor-based systems built on 10nm process technology and launched our new 9th Gen Intel® Core™ vPro® processors.
|
|
●
|
We are accelerating the pace of innovation to deliver new experiences and form factors. We launched Project Athena, a multi-year innovation program, designed to deliver advanced laptops.
|
|
●
|
We exited the 5G smartphone modem business, while continuing to meet current customer commitments for our existing 4G modem product lines. We are also assisting OEM partners in the development, certification, and support of 5G modem solutions for PCs.
|
5-YEAR TRENDS
|
|
■ Revenue $B
|
— Year over Year Growth
|
|
■ Op Income $B
|
— Year over Year Growth
|
|
MD&A
|
32
|
|
|
|
MD&A
|
33
|
|
CCG REVENUE $B
|
|
CCG OPERATING INCOME $B
|
|
|
■ Platform
|
■ Adjacent
|
REVENUE SUMMARY
|
•
|
Decreased unit sales due to supply constraints particularly at the value-end of the market, and lower market share.
|
•
|
Increased demand for performance products drove strong product mix and higher ASP as the commercial market segment remained strong.
|
•
|
Strength in modem drove higher adjacent revenue.
|
|
|
2019 – 2018
|
|
2018 – 2017
|
||||||||||
(Dollars in Millions)
|
|
%
|
|
$ Impact
|
|
%
|
|
$ Impact
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||
Desktop platform volume
|
|
down
|
(6)%
|
|
$
|
(705
|
)
|
|
down
|
(6)%
|
|
$
|
(608
|
)
|
Desktop platform ASP
|
|
up
|
3%
|
|
307
|
|
|
up
|
11%
|
|
1,181
|
|
||
Notebook platform volume
|
|
down
|
(5)%
|
|
(1,080
|
)
|
|
up
|
4%
|
|
839
|
|
||
Notebook platform ASP
|
|
up
|
5%
|
|
929
|
|
|
up
|
3%
|
|
677
|
|
||
Adjacent products and other
|
|
|
|
|
691
|
|
|
|
|
|
912
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Total change in revenue
|
|
|
|
|
$
|
142
|
|
|
|
|
|
$
|
3,001
|
|
OPERATING INCOME SUMMARY
|
(In Millions)
|
|
|
||
$
|
15,202
|
|
|
2019 Operating Income
|
1,425
|
|
|
Lower period charges primarily due to lower factory start-up costs and sell-through of previously reserved non-qualified platform product associated with our 10nm process technology
|
|
725
|
|
|
Lower operating expenses primarily driven by lower investment in modem
|
|
(1,170
|
)
|
|
Higher platform unit cost
|
|
(145
|
)
|
|
Lower gross margin from platform revenue
|
|
145
|
|
|
Other
|
|
$
|
14,222
|
|
|
2018 Operating Income
|
2,080
|
|
|
Higher gross margin from platform revenue
|
|
235
|
|
|
Lower operating expenses
|
|
(690
|
)
|
|
Higher platform unit cost due to increased mix to performance products
|
|
(225
|
)
|
|
Higher period charges, primarily due to reserved non-qualified platform product as we ramp 10nm
|
|
(97
|
)
|
|
Other
|
|
$
|
12,919
|
|
|
2017 Operating Income
|
MD&A
|
34
|
CONSOLIDATED RESULTS OF OPERATIONS
|
Years Ended
(In Millions, Except Per Share Amounts) |
|
December 28, 2019
|
|
December 29, 2018
|
|
December 30, 2017
|
|||||||||||||||
|
Amount
|
|
% of Net
Revenue
|
|
Amount
|
|
% of Net
Revenue
|
|
Amount
|
|
% of Net
Revenue
|
||||||||||
Net revenue
|
|
$
|
71,965
|
|
|
100.0
|
%
|
|
$
|
70,848
|
|
|
100.0
|
%
|
|
$
|
62,761
|
|
|
100.0
|
%
|
Cost of sales
|
|
29,825
|
|
|
41.4
|
%
|
|
27,111
|
|
|
38.3
|
%
|
|
23,663
|
|
|
37.7
|
%
|
|||
Gross margin
|
|
42,140
|
|
|
58.6
|
%
|
|
43,737
|
|
|
61.7
|
%
|
|
39,098
|
|
|
62.3
|
%
|
|||
Research and development
|
|
13,362
|
|
|
18.6
|
%
|
|
13,543
|
|
|
19.1
|
%
|
|
13,035
|
|
|
20.8
|
%
|
|||
Marketing, general and administrative
|
|
6,150
|
|
|
8.5
|
%
|
|
6,750
|
|
|
9.5
|
%
|
|
7,452
|
|
|
11.9
|
%
|
|||
Restructuring and other charges
|
|
393
|
|
|
0.5
|
%
|
|
(72
|
)
|
|
(0.1
|
)%
|
|
384
|
|
|
0.6
|
%
|
|||
Amortization of acquisition-related intangibles
|
|
200
|
|
|
0.3
|
%
|
|
200
|
|
|
0.3
|
%
|
|
177
|
|
|
0.3
|
%
|
|||
Operating income
|
|
22,035
|
|
|
30.6
|
%
|
|
23,316
|
|
|
32.9
|
%
|
|
18,050
|
|
|
28.8
|
%
|
|||
Gains (losses) on equity investments, net
|
|
1,539
|
|
|
2.1
|
%
|
|
(125
|
)
|
|
(0.2
|
)%
|
|
2,651
|
|
|
4.2
|
%
|
|||
Interest and other, net
|
|
484
|
|
|
0.7
|
%
|
|
126
|
|
|
0.2
|
%
|
|
(349
|
)
|
|
(0.6
|
)%
|
|||
Income before taxes
|
|
24,058
|
|
|
33.4
|
%
|
|
23,317
|
|
|
32.9
|
%
|
|
20,352
|
|
|
32.4
|
%
|
|||
Provision for taxes
|
|
3,010
|
|
|
4.2
|
%
|
|
2,264
|
|
|
3.2
|
%
|
|
10,751
|
|
|
17.1
|
%
|
|||
Net income
|
|
$
|
21,048
|
|
|
29.2
|
%
|
|
$
|
21,053
|
|
|
29.7
|
%
|
|
$
|
9,601
|
|
|
15.3
|
%
|
Earnings per share - Diluted
|
|
$
|
4.71
|
|
|
|
|
$
|
4.48
|
|
|
|
|
$
|
1.99
|
|
|
|
MD&A
|
|
35
|
PC TO DATA-CENTRIC TRANSFORMATION OVER THE LAST 5 YEARS
|
|
■ PC-centric $B
|
■ Data-centric $B
|
— Data-centric as a % of total Intel revenue
|
|
SEGMENT REVENUE WALK $B
|
MD&A
|
|
36
|
GROSS MARGIN $B
|
(Percentages in chart indicate gross margin as a percentage of total revenue)
|
(In Millions)
|
|
|
||
$
|
42,140
|
|
|
2019 Gross Margin
|
(1,360
|
)
|
|
Lower gross margin from adjacent businesses primarily due to NAND, DCG adjacencies, and PSG offset by higher gross margin on Mobileye
|
|
(1,300
|
)
|
|
Higher platform unit cost primarily from increased mix of performance products
|
|
580
|
|
|
Higher gross margin from platform revenue
|
|
490
|
|
|
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
|
|
(7
|
)
|
|
Other
|
|
$
|
43,737
|
|
|
2018 Gross Margin
|
5,810
|
|
|
Higher gross margin from platform revenue
|
|
(1,085
|
)
|
|
Higher platform unit cost, primarily from increased mix of performance products
|
|
(86
|
)
|
|
Other, primarily due to impact from divestitures, offset by higher gross margin from adjacent businesses
|
|
$
|
39,098
|
|
|
2017 Gross Margin
|
MD&A
|
|
37
|
RESEARCH AND DEVELOPMENT $B
|
|
MARKETING, GENERAL AND ADMINISTRATIVE $B
|
(Percentages indicate expenses as a percentage of total revenue)
|
RESEARCH AND DEVELOPMENT
|
2019 – 2018
|
|
|
|
R&D spending decreased by $181 million, or 1%, driven by the following:
|
|
|
|
-
|
Ramp down of 5G smartphone modem business and other projects
|
-
|
Profit-dependent compensation
|
-
|
Corporate spending efficiencies
|
+
|
Investments in our data-centric businesses
|
+
|
Investments in process technology
|
|
|
2018 – 2017
|
|
|
|
R&D spending increased by $508 million, or 4%, driven by the following:
|
|
|
|
+
|
Investments in our data-centric businesses
|
+
|
Investments in 10nm process technology
|
+
|
Profit-dependent compensation due to an increase in net income
|
-
|
Lower expenses due to the divestiture of ISecG in Q2 2017 and Wind River in Q2 2018
|
MARKETING, GENERAL AND ADMINISTRATIVE
|
2019 – 2018
|
|
|
|
MG&A spending decreased by $600 million, or 9%, driven by the following:
|
|
|
|
-
|
Corporate spending efficiencies
|
-
|
Reduction in marketing programs
|
-
|
Profit-dependent compensation
|
-
|
Lower expenses due to the Wind River divestiture in Q2 2018
|
|
|
2018 – 2017
|
|
|
|
MG&A spending decreased by $702 million, or 9%, driven by the following:
|
|
|
|
-
|
Reduction in marketing programs
|
-
|
Lower acquisition costs due to our 2017 acquisition of Mobileye
|
-
|
Lower expenses due to the divestiture of ISecG in Q2 2017 and Wind River in Q2 2018
|
-
|
Change to the Intel Inside® Program in 2017
|
+
|
Olympics* sponsorship in 2018
|
+
|
Profit-dependent compensation due to an increase in net income
|
MD&A
|
|
38
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Ongoing mark-to-market adjustments on marketable equity securities
|
|
$
|
277
|
|
|
$
|
(129
|
)
|
|
$
|
—
|
|
Observable price adjustments on non-marketable equity securities
|
|
293
|
|
|
202
|
|
|
—
|
|
|||
Impairment charges
|
|
(122
|
)
|
|
(424
|
)
|
|
(833
|
)
|
|||
Sale of equity investments and other
|
|
1,091
|
|
|
226
|
|
|
3,484
|
|
|||
Gains (losses) on equity investments, net
|
|
$
|
1,539
|
|
|
$
|
(125
|
)
|
|
$
|
2,651
|
|
|
|
|
|
|
|
|
||||||
Interest and other, net
|
|
$
|
484
|
|
|
$
|
126
|
|
|
$
|
(349
|
)
|
MD&A
|
|
39
|
(Dollars in Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Cash and cash equivalents, short-term investments, and trading assets
|
|
$
|
13,123
|
|
|
$
|
11,650
|
|
Other long-term investments
|
|
$
|
3,276
|
|
|
$
|
3,388
|
|
Loans receivable and other
|
|
$
|
1,239
|
|
|
$
|
1,550
|
|
Reverse repurchase agreements with original maturities greater than three months
|
|
$
|
350
|
|
|
$
|
250
|
|
Total debt
|
|
$
|
29,001
|
|
|
$
|
26,359
|
|
Temporary equity
|
|
$
|
155
|
|
|
$
|
419
|
|
Debt as a percentage of permanent stockholders’ equity
|
|
37.4
|
%
|
|
35.4
|
%
|
|
|
"Our finance team plays a fundamental role in partnering with the business to ensure we have the capital and financial resources available to fund our global operations and future growth initiatives."
—Sharon Heck, Corporate Vice President, Treasurer, and Chief Tax Officer
|
MD&A
|
|
40
|
SOURCES AND USES OF CASH
(In Millions)
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Net cash provided by operating activities
|
|
$
|
33,145
|
|
|
$
|
29,432
|
|
|
$
|
22,110
|
|
Net cash used for investing activities
|
|
(14,405
|
)
|
|
(11,239
|
)
|
|
(15,762
|
)
|
|||
Net cash provided by (used for) financing activities
|
|
(17,565
|
)
|
|
(18,607
|
)
|
|
(8,475
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
1,175
|
|
|
$
|
(414
|
)
|
|
$
|
(2,127
|
)
|
MD&A
|
|
41
|
MD&A
|
|
42
|
|
|
Payments Due by Period
|
||||||||||||||||||
(In Millions)
|
|
Total
|
|
Less Than
1 Year
|
|
1–3 Years
|
|
3–5 Years
|
|
More Than
5 Years
|
||||||||||
Operating lease obligations1
|
|
$
|
595
|
|
|
$
|
178
|
|
|
$
|
232
|
|
|
$
|
128
|
|
|
$
|
57
|
|
Capital purchase obligations2
|
|
10,918
|
|
|
9,300
|
|
|
1,595
|
|
|
14
|
|
|
9
|
|
|||||
Other purchase obligations and commitments3
|
|
2,757
|
|
|
1,636
|
|
|
947
|
|
|
147
|
|
|
27
|
|
|||||
Tax obligations4
|
|
4,442
|
|
|
10
|
|
|
746
|
|
|
1,853
|
|
|
1,833
|
|
|||||
Long-term debt obligations5
|
|
41,328
|
|
|
4,706
|
|
|
8,510
|
|
|
3,508
|
|
|
24,604
|
|
|||||
Other long-term liabilities6
|
|
1,692
|
|
|
898
|
|
|
640
|
|
|
40
|
|
|
114
|
|
|||||
Total7
|
|
$
|
61,732
|
|
|
$
|
16,728
|
|
|
$
|
12,670
|
|
|
$
|
5,690
|
|
|
$
|
26,644
|
|
1
|
Operating lease obligations represent the undiscounted lease payments under non-cancelable leases, but exclude non-lease components.
|
2
|
Capital purchase obligations represent commitments for the construction or purchase of property, plant and equipment. They were not recorded as liabilities on our Consolidated Balance Sheets as of December 28, 2019, as we had not yet received the related goods nor taken title to the property.
|
3
|
Other purchase obligations and commitments include payments due under various types of licenses and agreements to purchase goods or services.
|
4
|
Tax obligations represent the future cash payments related to Tax Reform enacted in 2017 for the one-time transition tax on our previously untaxed foreign earnings. For further information, see "Note 9: Income Taxes" within the Consolidated Financial Statements.
|
5
|
Amounts represent principal payments for all debt obligations and interest payments for fixed-rate debt obligations. Interest payments on floating-rate debt obligations, as well as the impact of fixed-rate to floating-rate debt swaps, are excluded. Debt obligations are classified based on their stated maturity date, regardless of their classification on the Consolidated Balance Sheets.
|
6
|
Amounts represent future cash payments to satisfy other long-term liabilities recorded on our Consolidated Balance Sheets, including the short-term portion of these long-term liabilities. Derivative instruments are excluded from the preceding table, because they do not represent the amounts that may ultimately be paid.
|
7
|
Total excludes contractual obligations already recorded on our Consolidated Balance Sheets as current liabilities, except for the short-term portions of long-term debt obligations and other long-term liabilities.
|
MD&A
|
|
43
|
MD&A
|
|
44
|
MD&A
|
|
45
|
Years Ended (In Millions, Except Per Share Amounts)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Operating income
|
|
$
|
22,035
|
|
|
$
|
23,316
|
|
|
$
|
18,050
|
|
Acquisition-related adjustments
|
|
1,324
|
|
|
1,305
|
|
|
1,257
|
|
|||
Restructuring and other charges
|
|
393
|
|
|
(72
|
)
|
|
384
|
|
|||
Non-GAAP operating income
|
|
$
|
23,752
|
|
|
$
|
24,549
|
|
|
$
|
19,691
|
|
|
|
|
|
|
|
|
||||||
Operating margin
|
|
30.6
|
%
|
|
32.9
|
%
|
|
28.8
|
%
|
|||
Acquisition-related adjustments
|
|
1.8
|
%
|
|
1.8
|
%
|
|
2.0
|
%
|
|||
Restructuring and other charges
|
|
0.5
|
%
|
|
(0.1
|
)%
|
|
0.6
|
%
|
|||
Non-GAAP operating margin
|
|
33.0
|
%
|
|
34.7
|
%
|
|
31.4
|
%
|
|||
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
21,048
|
|
|
$
|
21,053
|
|
|
$
|
9,601
|
|
Acquisition-related adjustments
|
|
1,324
|
|
|
1,305
|
|
|
1,257
|
|
|||
Restructuring and other charges
|
|
393
|
|
|
(72
|
)
|
|
384
|
|
|||
(Gains) losses from divestiture
|
|
(690
|
)
|
|
(494
|
)
|
|
(387
|
)
|
|||
Ongoing mark-to-market on marketable equity securities
|
|
(277
|
)
|
|
129
|
|
|
—
|
|
|||
Tax Reform
|
|
—
|
|
|
(294
|
)
|
|
5,444
|
|
|||
Income tax effect
|
|
(14
|
)
|
|
(102
|
)
|
|
454
|
|
|||
Non-GAAP net income
|
|
$
|
21,784
|
|
|
$
|
21,525
|
|
|
$
|
16,753
|
|
|
|
|
|
|
|
|
||||||
Earnings per share—Diluted
|
|
$
|
4.71
|
|
|
$
|
4.48
|
|
|
$
|
1.99
|
|
Acquisition-related adjustments
|
|
0.29
|
|
|
0.28
|
|
|
0.25
|
|
|||
Restructuring and other charges
|
|
0.09
|
|
|
(0.02
|
)
|
|
0.08
|
|
|||
(Gains) losses from divestiture
|
|
(0.16
|
)
|
|
(0.11
|
)
|
|
(0.08
|
)
|
|||
Ongoing mark-to-market on marketable equity securities
|
|
(0.06
|
)
|
|
0.03
|
|
|
—
|
|
|||
Tax Reform
|
|
—
|
|
|
(0.06
|
)
|
|
1.13
|
|
|||
Income tax effect
|
|
—
|
|
|
(0.02
|
)
|
|
0.09
|
|
|||
Non-GAAP earnings per share—Diluted
|
|
$
|
4.87
|
|
|
$
|
4.58
|
|
|
$
|
3.46
|
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||||||
Net cash provided by operating activities
|
|
$
|
33,145
|
|
|
$
|
29,432
|
|
|
$
|
22,110
|
|
|
$
|
21,808
|
|
|
$
|
19,018
|
|
Additions to property, plant and equipment
|
|
(16,213
|
)
|
|
(15,181
|
)
|
|
(11,778
|
)
|
|
(9,625
|
)
|
|
(7,326
|
)
|
|||||
Free cash flow
|
|
$
|
16,932
|
|
|
$
|
14,251
|
|
|
$
|
10,332
|
|
|
$
|
12,183
|
|
|
$
|
11,692
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash used for investing activities
|
|
$
|
(14,405
|
)
|
|
$
|
(11,239
|
)
|
|
$
|
(15,762
|
)
|
|
$
|
(25,817
|
)
|
|
$
|
(8,183
|
)
|
Net cash provided by (used for) financing activities
|
|
$
|
(17,565
|
)
|
|
$
|
(18,607
|
)
|
|
$
|
(8,475
|
)
|
|
$
|
(5,739
|
)
|
|
$
|
1,912
|
|
OTHER KEY INFORMATION
|
|
46
|
OTHER KEY INFORMATION
|
Years Ended
(Dollars in Millions, Except Per Share Amounts) |
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||||||
Net revenue
|
|
$
|
71,965
|
|
|
$
|
70,848
|
|
|
$
|
62,761
|
|
|
$
|
59,387
|
|
|
$
|
55,355
|
|
Gross margin1
|
|
$
|
42,140
|
|
|
$
|
43,737
|
|
|
$
|
39,098
|
|
|
$
|
36,233
|
|
|
$
|
34,679
|
|
Gross margin percentage1
|
|
58.6
|
%
|
|
61.7
|
%
|
|
62.3
|
%
|
|
61.0
|
%
|
|
62.6
|
%
|
|||||
Research and development1
|
|
$
|
13,362
|
|
|
$
|
13,543
|
|
|
$
|
13,035
|
|
|
$
|
12,685
|
|
|
$
|
12,128
|
|
Marketing, general and administrative1
|
|
$
|
6,150
|
|
|
$
|
6,750
|
|
|
$
|
7,452
|
|
|
$
|
8,377
|
|
|
$
|
7,930
|
|
R&D and MG&A as a percentage of revenue1
|
|
27.1
|
%
|
|
28.6
|
%
|
|
32.6
|
%
|
|
35.5
|
%
|
|
36.2
|
%
|
|||||
Operating income1
|
|
$
|
22,035
|
|
|
$
|
23,316
|
|
|
$
|
18,050
|
|
|
$
|
13,133
|
|
|
$
|
14,002
|
|
Net income2
|
|
$
|
21,048
|
|
|
$
|
21,053
|
|
|
$
|
9,601
|
|
|
$
|
10,316
|
|
|
$
|
11,420
|
|
Effective tax rate2
|
|
12.5
|
%
|
|
9.7
|
%
|
|
52.8
|
%
|
|
20.3
|
%
|
|
19.6
|
%
|
|||||
Earnings per share2
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
4.77
|
|
|
$
|
4.57
|
|
|
$
|
2.04
|
|
|
$
|
2.18
|
|
|
$
|
2.41
|
|
Diluted
|
|
$
|
4.71
|
|
|
$
|
4.48
|
|
|
$
|
1.99
|
|
|
$
|
2.12
|
|
|
$
|
2.33
|
|
Weighted average diluted shares of common stock outstanding
|
|
4,473
|
|
|
4,701
|
|
|
4,835
|
|
|
4,875
|
|
|
4,894
|
|
|||||
Dividends per share of common stock, declared and paid
|
|
$
|
1.26
|
|
|
$
|
1.20
|
|
|
$
|
1.0775
|
|
|
$
|
1.04
|
|
|
$
|
0.96
|
|
Net cash provided by operating activities
|
|
$
|
33,145
|
|
|
$
|
29,432
|
|
|
$
|
22,110
|
|
|
$
|
21,808
|
|
|
$
|
19,018
|
|
Additions to property, plant and equipment
|
|
$
|
16,213
|
|
|
$
|
15,181
|
|
|
$
|
11,778
|
|
|
$
|
9,625
|
|
|
$
|
7,326
|
|
Repurchase of common stock
|
|
$
|
13,576
|
|
|
$
|
10,730
|
|
|
$
|
3,615
|
|
|
$
|
2,587
|
|
|
$
|
3,001
|
|
Payment of dividends to stockholders
|
|
$
|
5,576
|
|
|
$
|
5,541
|
|
|
$
|
5,072
|
|
|
$
|
4,925
|
|
|
$
|
4,556
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Dollars in Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
|
Dec 31,
2016 |
|
Dec 26,
2015 |
||||||||||
Property, plant and equipment, net
|
|
$
|
55,386
|
|
|
$
|
48,976
|
|
|
$
|
41,109
|
|
|
$
|
36,171
|
|
|
$
|
31,858
|
|
Total assets
|
|
$
|
136,524
|
|
|
$
|
127,963
|
|
|
$
|
123,249
|
|
|
$
|
113,327
|
|
|
$
|
101,459
|
|
Debt
|
|
$
|
29,001
|
|
|
$
|
26,359
|
|
|
$
|
26,813
|
|
|
$
|
25,283
|
|
|
$
|
22,670
|
|
Stockholders’ equity
|
|
$
|
77,504
|
|
|
$
|
74,563
|
|
|
$
|
69,019
|
|
|
$
|
66,226
|
|
|
$
|
61,085
|
|
Employees (in thousands)
|
|
110.8
|
|
|
107.4
|
|
|
102.7
|
|
|
106.0
|
|
|
107.3
|
|
1
|
In Q1 2018, we adopted "Retirement Benefits - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" on a retrospective basis. As a result of the adoption of this standard, cost of sales, operating expenses, and interest and other, net for periods 2017 and 2016 in the preceding table have been restated.
|
2
|
In Q4 2017, we recognized a $5.4 billion higher income tax expense as a result of one-time impacts from Tax Reform. In 2018, our effective tax rate benefited from the reduction of the U.S. statutory federal tax rate.
|
OTHER KEY INFORMATION
|
|
47
|
OTHER KEY INFORMATION
|
|
48
|
|
|
"Intel carefully protects its innovations, and we have a long history of vigilantly enforcing our IP rights against infringement. Strong IP protections make it possible for Intel to continue to invest the enormous resources required to innovate and advance our strategic goals to make the world’s best semiconductors, lead technology inflections, and be the leading end-to-end platform provider for the new data world."
—Steve Rodgers, Executive Vice President and General Counsel
|
OTHER KEY INFORMATION
|
|
49
|
•
|
Inventories—the transition of manufacturing costs to inventory, excluding factory excess capacity costs. Inventory reflected at the lower of cost or net realizable value considering future demand and market conditions;
|
•
|
Long-lived assets—the valuation methods and assumptions used in assessing the impairment of property, plant and equipment, identified intangibles, and goodwill, including the determination of asset groupings and the identification and allocation of goodwill to reporting units;
|
•
|
Non-marketable equity investments—the valuation estimates and assessment of impairment and observable price adjustments; and
|
•
|
Loss contingencies—the estimation of when a loss is probable and reasonably estimable.
|
•
|
business conditions, including downturns in the market segments in which we operate, or in the global or regional economies;
|
•
|
consumer confidence or income levels, and the levels of customer capital spending, which may be impacted by changes in market conditions, including changes in government borrowing, taxation, or spending policies; the credit market; or expected inflation, employment, and energy or other commodity prices;
|
•
|
our ability to timely introduce competitive products;
|
•
|
competitive and pricing pressures, including new product introductions and other actions taken by competitors;
|
•
|
the level of our customers’ inventories and computing capacity;
|
•
|
customer order patterns, including order cancellations, which can be affected by maturing product cycles for our products, customers’ products, and related products such as operating system upgrade cycles; disruptions affecting customers; and other factors;
|
•
|
market acceptance and industry support of our new and maturing products, including the introduction and availability of products used together with our products; and
|
•
|
customer product needs and emerging technology trends, including changes in the levels and nature of customer and end-user computing workloads.
|
OTHER KEY INFORMATION
|
|
50
|
OTHER KEY INFORMATION
|
|
51
|
OTHER KEY INFORMATION
|
|
52
|
•
|
geopolitical and security issues, such as armed conflict and civil or military unrest, political instability, human rights concerns, and terrorist activity, including, for example, geopolitical tensions and conflict affecting Israel, where our Mobileye business headquarters and certain of our fabrication facilities are located;
|
•
|
natural disasters, public health issues, and other catastrophic events;
|
•
|
inefficient infrastructure and other disruptions, such as supply chain interruptions and large-scale outages or unreliable provision of services from utilities, transportation, data hosting, or telecommunications providers;
|
•
|
formal or informal imposition of new or revised export, import, or doing-business regulations, including trade sanctions, tariffs, and changes in the ability to obtain export licenses, which could be changed without notice;
|
•
|
government restrictions on, or nationalization of, our operations in any country, or restrictions on our ability to repatriate earnings from a particular country;
|
•
|
adverse changes relating to government grants, tax credits, or other government incentives;
|
•
|
differing employment practices and labor issues;
|
•
|
ineffective legal protection of our IP rights in certain countries;
|
•
|
local business and cultural factors that differ from our current standards and practices;
|
•
|
continuing uncertainty regarding social, political, immigration, and tax and trade policies in the U.S. and abroad, including as a result of the United Kingdom's vote to withdraw from the European Union;
|
•
|
fluctuations in the market values of our domestic and international investments, which can be negatively affected by liquidity, credit deterioration or losses, interest rate changes, financial results, political risk, sovereign risk, or other factors; and
|
•
|
uncertainty regarding LIBOR—certain of our interest rate derivatives and investments are based on LIBOR, and a portion of our indebtedness bears interest at variable interest rates, primarily based on LIBOR: LIBOR is the subject of recent national, international and other regulatory guidance and proposals for reform, which may cause LIBOR to disappear entirely after 2021 or to perform differently than in the past, and while we expect that reasonable alternatives to LIBOR will be implemented prior to the 2021 target date, we cannot predict the consequences and timing of these developments, and they could include an increase in our interest expense and/or a reduction in our interest income.
|
OTHER KEY INFORMATION
|
|
53
|
OTHER KEY INFORMATION
|
|
54
|
•
|
writing off some or all of the value of inventory;
|
•
|
recalling products that have been shipped;
|
•
|
providing product replacements or modifications;
|
•
|
reimbursing customers for certain costs they incur;
|
•
|
defending against litigation and/or paying resulting damages; and
|
•
|
paying fines imposed by regulatory agencies.
|
OTHER KEY INFORMATION
|
|
55
|
•
|
regulatory penalties, fines, and legal liabilities;
|
•
|
suspension of production;
|
•
|
alteration of our manufacturing and assembly and test processes;
|
•
|
damage to our reputation; and
|
•
|
restrictions on our operations or sales.
|
OTHER KEY INFORMATION
|
|
56
|
OTHER KEY INFORMATION
|
|
57
|
•
|
pay monetary damages, including payments to satisfy indemnification obligations, or royalties;
|
•
|
stop manufacturing, using, selling, offering to sell, or importing products or technology subject to claims;
|
•
|
need to develop other products or technology not subject to claims, which could be time-consuming or costly; and/or
|
•
|
enter into settlement or license agreements, which agreements may not be available on commercially reasonable terms.
|
OTHER KEY INFORMATION
|
|
58
|
•
|
our inability to identify opportunities in a timely manner or on terms acceptable to us;
|
•
|
failure of the transaction to advance our business strategy and of its anticipated benefits to materialize;
|
•
|
disruption of our ongoing operations and diversion of our management’s attention;
|
•
|
failure to complete a transaction in a timely manner, if at all, due to our inability to obtain required government or other approvals at all or without materially burdensome conditions, IP disputes or other litigation, difficulty in obtaining financing on terms acceptable to us, or other unforeseen factors;
|
•
|
our failure to realize a satisfactory return on our investment, potentially resulting in an impairment of goodwill and other assets, and restructuring charges;
|
•
|
our inability to effectively enter new market segments through our strategic transactions or retain customers and partners of acquired businesses;
|
•
|
our inability to retain key personnel of acquired businesses or our difficulty in integrating employees, business systems, and technology;
|
•
|
controls, processes, and procedures of acquired businesses that do not adequately ensure compliance with laws and regulations, and our failure to identify compliance issues or liabilities;
|
•
|
our failure to identify, or our underestimation of, commitments, liabilities, and other risks associated with acquired businesses or assets; and
|
•
|
the potential for our acquisitions to result in dilutive issuances of our equity securities or significant additional debt.
|
OTHER KEY INFORMATION
|
|
59
|
•
|
changes in the volume and mix of profits earned across jurisdictions with varying tax rates;
|
•
|
the resolution of issues arising from tax audits, including payment of interest and penalties;
|
•
|
changes in the valuation of our deferred tax assets and liabilities, and in deferred tax valuation allowances;
|
•
|
adjustments to income taxes upon finalization of tax returns;
|
•
|
increases in expenses not deductible for tax purposes, including impairments of goodwill;
|
•
|
changes in available tax credits;
|
•
|
changes in our ability to secure new, or renew existing, tax holidays and incentives;
|
•
|
changes in U.S. federal, state, or foreign tax laws or their interpretation, including changes in the U.S. to the taxation of manufacturing enterprises and of non-U.S. income and expenses and changes resulting from the adoption by countries of OECD recommendations or other legislative actions;
|
•
|
changes in accounting standards; and
|
•
|
our decision to repatriate non-U.S. earnings for which we have not previously provided for local country withholding taxes incurred upon repatriation.
|
OTHER KEY INFORMATION
|
|
60
|
(Square Feet in Millions)
|
|
United
States
|
|
Other
Countries
|
|
Total
|
|||
Owned facilities
|
|
31.3
|
|
|
22.3
|
|
|
53.6
|
|
Leased facilities
|
|
0.8
|
|
|
5.4
|
|
|
6.2
|
|
Total facilities
|
|
32.1
|
|
|
27.7
|
|
|
59.8
|
|
OTHER KEY INFORMATION
|
|
61
|
Years Ended
|
|
Dec 27,
2014 |
|
Dec 26,
2015 |
|
Dec 31,
2016 |
|
Dec 30,
2017 |
|
Dec 29,
2018 |
|
Dec 28,
2019 |
||||||||||||
Intel Corporation
|
|
$
|
100
|
|
|
$
|
96
|
|
|
$
|
103
|
|
|
$
|
135
|
|
|
$
|
140
|
|
|
$
|
184
|
|
S&P 100 Index
|
|
$
|
100
|
|
|
$
|
102
|
|
|
$
|
113
|
|
|
$
|
137
|
|
|
$
|
131
|
|
|
$
|
175
|
|
S&P 500 Index
|
|
$
|
100
|
|
|
$
|
101
|
|
|
$
|
112
|
|
|
$
|
136
|
|
|
$
|
129
|
|
|
$
|
172
|
|
S&P 500 IT Index
|
|
$
|
100
|
|
|
$
|
104
|
|
|
$
|
118
|
|
|
$
|
163
|
|
|
$
|
161
|
|
|
$
|
246
|
|
SOX Index
|
|
$
|
100
|
|
|
$
|
99
|
|
|
$
|
135
|
|
|
$
|
190
|
|
|
$
|
177
|
|
|
$
|
293
|
|
1
|
The graph and table assume that $100 was invested on the last day of trading for the fiscal year ended December 27, 2014 in Intel's common stock, the S&P 100 Index, S&P 500 Index, S&P 500 IT Index, and PHLX Semiconductor Sector Index (SOX), and that all dividends were reinvested.
|
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)
|
|||||
December 30, 2018 - March 30, 2019
|
|
49.5
|
|
|
$
|
49.49
|
|
|
$
|
14,883
|
|
March 31, 2019 - June 29, 2019
|
|
67.2
|
|
|
$
|
46.78
|
|
|
$
|
11,739
|
|
June 30, 2019 - September 28, 2019
|
|
92.0
|
|
|
$
|
48.78
|
|
|
$
|
7,249
|
|
September 29, 2019 - December 28, 2019
|
|
63.0
|
|
|
$
|
55.32
|
|
|
$
|
23,768
|
|
Total
|
|
271.7
|
|
|
|
|
|
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) |
|||||
September 29, 2019 - October 26, 2019
|
|
24.0
|
|
|
$
|
51.37
|
|
|
$
|
26,021
|
|
October 27, 2019 - November 23, 2019
|
|
16.2
|
|
|
$
|
57.67
|
|
|
$
|
25,088
|
|
November 24, 2019 - December 28, 2019
|
|
22.8
|
|
|
$
|
57.79
|
|
|
$
|
23,768
|
|
Total
|
|
63.0
|
|
|
|
|
|
OTHER KEY INFORMATION
|
|
62
|
EXECUTIVE OFFICERS (as of January 23, 2020)
|
|
AGE
|
|
OFFICE(S)
|
Gregory M. Bryant
|
|
51
|
|
Executive Vice President; General Manager, Client Computing Group
|
George S. Davis
|
|
62
|
|
Chief Financial Officer
|
Dr. Venkata S.M. Renduchintala
|
|
54
|
|
Executive Vice President; Group President, Technology, Systems Architecture and Client Group; Chief Engineering Officer
|
Steven R. Rodgers
|
|
54
|
|
Executive Vice President; General Counsel
|
Navin Shenoy
|
|
46
|
|
Executive Vice President; General Manager, Data Platforms Group
|
Robert H. Swan
|
|
59
|
|
Chief Executive Officer
|
OTHER KEY INFORMATION
|
|
63
|
OTHER KEY INFORMATION
|
|
64
|
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
Page
|
Reports of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Statements of Income
|
|
Consolidated Statements of Comprehensive Income
|
|
Consolidated Balance Sheets
|
|
Consolidated Statements of Cash Flows
|
|
Consolidated Statements of Stockholders’ Equity
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Basis
|
|
Note 1: Basis of Presentation
|
|
Note 2: Accounting Policies
|
|
Note 3: Recent Accounting Standards
|
|
Performance and Operations
|
|
Note 4: Operating Segments
|
|
Note 5: Earnings Per Share
|
|
Note 6: Contract Liabilities
|
|
Note 7: Other Financial Statement Details
|
|
Note 8: Restructuring and Other Charges
|
|
Note 9: Income Taxes
|
|
Investments, Long-term Assets and Debt
|
|
Note 10: Investments
|
|
Note 11: Acquisitions and Divestitures
|
|
Note 12: Goodwill
|
|
Note 13: Identified Intangible Assets
|
|
Note 14: Borrowings
|
|
Note 15: Fair Value
|
|
Risk Management and Other
|
|
Note 16: Other Comprehensive Income (Loss)
|
|
Note 17: Derivative Financial Instruments
|
|
Note 18: Retirement Benefit Plans
|
|
Note 19: Employee Equity Incentive Plans
|
|
Note 20: Commitments and Contingencies
|
|
Key Terms
|
|
|
|
INDEX TO SUPPLEMENTAL DETAILS
|
|
Financial Information by Quarter
|
|
Controls and Procedures
|
|
Exhibits
|
|
Form 10-K Cross-Reference Index
|
|
|
65
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
AUDITOR'S REPORTS
|
|
66
|
|
|
Inventory Valuation
|
|
|
|
Description of the Matter
|
|
The Company’s net inventory totaled $8.7 billion as of December 28, 2019, representing 6.4% of total assets. As explained in "Note 2: Accounting Policies" within the Consolidated Financial Statements, the Company computes inventory cost on a first-in, first-out basis, and applies judgment in determining saleability of products and the valuation of inventories. The Company assesses inventory at each reporting date in order to assert that it is recorded at net realizable value, giving consideration to, among other factors: whether the products have achieved the substantive engineering milestones to qualify for sale to customers; the determination of normal capacity levels in its manufacturing process to determine which manufacturing overhead costs can be included in the valuation of inventory; whether the product is valued at the lower of cost or net realizable value; and the estimation of excess and obsolete inventory or that which is not of saleable quality.
|
|
|
|
|
Auditing management’s assessment of net realizable value for inventory was challenging because the determination of lower of cost or net realizable value and excess and obsolete inventory reserves is highly judgmental and considers a number of factors that are affected by market and economic conditions, such as customer forecasts, dynamic pricing environments, and industry supply and demand. Additionally, for certain new product launches there is limited historical data with which to evaluate forecasts.
|
|
|
|
|
How We Addressed
the Matter in Our Audit
|
|
We evaluated and tested the design and operating effectiveness of the Company’s internal controls over the costing of inventory, the determination of whether inventory is of salable quality, the calculation of lower of cost or net realizable value reserves including related estimated costs and selling prices, and the determination of demand forecasts and related application against on hand inventory.
|
|
|
|
|
Our audit procedures included, among others, testing the significant assumptions (e.g., estimated product costs and selling prices, and product demand forecasts) and the underlying data used in management’s inventory valuation assessment. We compared the significant assumptions used by management to current industry and economic trends. We assessed whether there were any potential sources of contrary information, including historical forecast accuracy or history of significant revisions to previously recorded inventory valuation adjustments, and performed sensitivity analyses over significant assumptions to evaluate the changes in inventory valuation that would result from changes in the assumptions.
|
AUDITOR'S REPORTS
|
|
67
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
AUDITOR'S REPORTS
|
|
68
|
CONSOLIDATED STATEMENTS OF INCOME
|
Years Ended (In Millions, Except Per Share Amounts)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Net revenue
|
|
$
|
71,965
|
|
|
$
|
70,848
|
|
|
$
|
62,761
|
|
Cost of sales
|
|
29,825
|
|
|
27,111
|
|
|
23,663
|
|
|||
Gross margin
|
|
42,140
|
|
|
43,737
|
|
|
39,098
|
|
|||
Research and development
|
|
13,362
|
|
|
13,543
|
|
|
13,035
|
|
|||
Marketing, general and administrative
|
|
6,150
|
|
|
6,750
|
|
|
7,452
|
|
|||
Restructuring and other charges
|
|
393
|
|
|
(72
|
)
|
|
384
|
|
|||
Amortization of acquisition-related intangibles
|
|
200
|
|
|
200
|
|
|
177
|
|
|||
Operating expenses
|
|
20,105
|
|
|
20,421
|
|
|
21,048
|
|
|||
Operating income
|
|
22,035
|
|
|
23,316
|
|
|
18,050
|
|
|||
Gains (losses) on equity investments, net
|
|
1,539
|
|
|
(125
|
)
|
|
2,651
|
|
|||
Interest and other, net
|
|
484
|
|
|
126
|
|
|
(349
|
)
|
|||
Income before taxes
|
|
24,058
|
|
|
23,317
|
|
|
20,352
|
|
|||
Provision for taxes
|
|
3,010
|
|
|
2,264
|
|
|
10,751
|
|
|||
Net income
|
|
$
|
21,048
|
|
|
$
|
21,053
|
|
|
$
|
9,601
|
|
Earnings per share—Basic
|
|
$
|
4.77
|
|
|
$
|
4.57
|
|
|
$
|
2.04
|
|
Earnings per share—Diluted
|
|
$
|
4.71
|
|
|
$
|
4.48
|
|
|
$
|
1.99
|
|
Weighted average shares of common stock outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
4,417
|
|
|
4,611
|
|
|
4,701
|
|
|||
Diluted
|
|
4,473
|
|
|
4,701
|
|
|
4,835
|
|
FINANCIAL STATEMENTS
|
Consolidated Statements of Income
|
69
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Net income
|
|
$
|
21,048
|
|
|
$
|
21,053
|
|
|
$
|
9,601
|
|
Changes in other comprehensive income, net of tax:
|
|
|
|
|
|
|
||||||
Net unrealized holding gains (losses) on available-for-sale equity investments
|
|
—
|
|
|
—
|
|
|
(434
|
)
|
|||
Net unrealized holding gains (losses) on derivatives
|
|
177
|
|
|
(253
|
)
|
|
365
|
|
|||
Actuarial valuation and other pension benefits (expenses), net
|
|
(564
|
)
|
|
210
|
|
|
317
|
|
|||
Translation adjustments and other
|
|
81
|
|
|
(3
|
)
|
|
508
|
|
|||
Other comprehensive income (loss)
|
|
(306
|
)
|
|
(46
|
)
|
|
756
|
|
|||
Total comprehensive income
|
|
$
|
20,742
|
|
|
$
|
21,007
|
|
|
$
|
10,357
|
|
FINANCIAL STATEMENTS
|
Consolidated Statements of Comprehensive Income
|
70
|
CONSOLIDATED BALANCE SHEETS
|
(In Millions, Except Par Value)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
4,194
|
|
|
$
|
3,019
|
|
Short-term investments
|
|
1,082
|
|
|
2,788
|
|
||
Trading assets
|
|
7,847
|
|
|
5,843
|
|
||
Accounts receivable, net of allowance for doubtful accounts
|
|
7,659
|
|
|
6,722
|
|
||
Inventories
|
|
8,744
|
|
|
7,253
|
|
||
Other current assets
|
|
1,713
|
|
|
3,162
|
|
||
Total current assets
|
|
31,239
|
|
|
28,787
|
|
||
|
|
|
|
|
||||
Property, plant and equipment, net
|
|
55,386
|
|
|
48,976
|
|
||
Equity investments
|
|
3,967
|
|
|
6,042
|
|
||
Other long-term investments
|
|
3,276
|
|
|
3,388
|
|
||
Goodwill
|
|
26,276
|
|
|
24,513
|
|
||
Identified intangible assets, net
|
|
10,827
|
|
|
11,836
|
|
||
Other long-term assets
|
|
5,553
|
|
|
4,421
|
|
||
Total assets
|
|
$
|
136,524
|
|
|
$
|
127,963
|
|
|
|
|
|
|
||||
Liabilities, temporary equity, and stockholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Short-term debt
|
|
$
|
3,693
|
|
|
$
|
1,261
|
|
Accounts payable
|
|
4,128
|
|
|
3,824
|
|
||
Accrued compensation and benefits
|
|
3,853
|
|
|
3,622
|
|
||
Other accrued liabilities
|
|
10,636
|
|
|
7,919
|
|
||
Total current liabilities
|
|
22,310
|
|
|
16,626
|
|
||
|
|
|
|
|
||||
Debt
|
|
25,308
|
|
|
25,098
|
|
||
Contract liabilities
|
|
1,368
|
|
|
2,049
|
|
||
Income taxes payable, non-current
|
|
4,919
|
|
|
4,897
|
|
||
Deferred income taxes
|
|
2,044
|
|
|
1,665
|
|
||
Other long-term liabilities
|
|
2,916
|
|
|
2,646
|
|
||
Commitments and Contingencies (Note 20)
|
|
|
|
|
||||
Temporary equity
|
|
155
|
|
|
419
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.001 par value, 50 shares authorized; none issued
|
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 10,000 shares authorized; 4,290 shares issued and outstanding (4,516 issued and outstanding in 2018) and capital in excess of par value
|
|
25,261
|
|
|
25,365
|
|
||
Accumulated other comprehensive income (loss)
|
|
(1,280
|
)
|
|
(974
|
)
|
||
Retained earnings
|
|
53,523
|
|
|
50,172
|
|
||
Total stockholders’ equity
|
|
77,504
|
|
|
74,563
|
|
||
Total liabilities, temporary equity, and stockholders’ equity
|
|
$
|
136,524
|
|
|
$
|
127,963
|
|
FINANCIAL STATEMENTS
|
Consolidated Balance Sheets
|
71
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Cash and cash equivalents, beginning of period
|
|
$
|
3,019
|
|
|
$
|
3,433
|
|
|
$
|
5,560
|
|
Cash flows provided by (used for) operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
21,048
|
|
|
21,053
|
|
|
9,601
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation
|
|
9,204
|
|
|
7,520
|
|
|
6,752
|
|
|||
Share-based compensation
|
|
1,705
|
|
|
1,546
|
|
|
1,358
|
|
|||
Amortization of intangibles
|
|
1,622
|
|
|
1,565
|
|
|
1,377
|
|
|||
(Gains) losses on equity investments, net
|
|
(892
|
)
|
|
155
|
|
|
(2,583
|
)
|
|||
(Gains) losses on divestitures
|
|
(690
|
)
|
|
(497
|
)
|
|
(387
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(935
|
)
|
|
(1,714
|
)
|
|
(781
|
)
|
|||
Inventories
|
|
(1,481
|
)
|
|
(214
|
)
|
|
(1,300
|
)
|
|||
Accounts payable
|
|
696
|
|
|
211
|
|
|
191
|
|
|||
Accrued compensation and benefits
|
|
91
|
|
|
(260
|
)
|
|
311
|
|
|||
Customer deposits and prepaid supply agreements
|
|
(782
|
)
|
|
1,367
|
|
|
1,105
|
|
|||
Income taxes
|
|
885
|
|
|
(1,601
|
)
|
|
6,778
|
|
|||
Other assets and liabilities
|
|
2,674
|
|
|
301
|
|
|
(312
|
)
|
|||
Total adjustments
|
|
12,097
|
|
|
8,379
|
|
|
12,509
|
|
|||
Net cash provided by operating activities
|
|
33,145
|
|
|
29,432
|
|
|
22,110
|
|
|||
Cash flows provided by (used for) investing activities:
|
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
|
(16,213
|
)
|
|
(15,181
|
)
|
|
(11,778
|
)
|
|||
Acquisitions, net of cash acquired
|
|
(1,958
|
)
|
|
(190
|
)
|
|
(14,499
|
)
|
|||
Purchases of available-for-sale debt investments
|
|
(2,268
|
)
|
|
(3,843
|
)
|
|
(2,746
|
)
|
|||
Sales of available-for-sale debt investments
|
|
238
|
|
|
195
|
|
|
1,833
|
|
|||
Maturities of available-for-sale debt investments
|
|
3,988
|
|
|
2,968
|
|
|
3,687
|
|
|||
Purchases of trading assets
|
|
(9,162
|
)
|
|
(9,503
|
)
|
|
(13,700
|
)
|
|||
Maturities and sales of trading assets
|
|
7,178
|
|
|
12,111
|
|
|
13,970
|
|
|||
Purchases of equity investments
|
|
(522
|
)
|
|
(874
|
)
|
|
(1,619
|
)
|
|||
Sales of equity investments
|
|
2,688
|
|
|
2,802
|
|
|
5,236
|
|
|||
Proceeds from divestitures
|
|
911
|
|
|
548
|
|
|
3,124
|
|
|||
Other investing
|
|
715
|
|
|
(272
|
)
|
|
730
|
|
|||
Net cash used for investing activities
|
|
(14,405
|
)
|
|
(11,239
|
)
|
|
(15,762
|
)
|
|||
Cash flows provided by (used for) financing activities:
|
|
|
|
|
|
|
||||||
Issuance of long-term debt, net of issuance costs
|
|
3,392
|
|
|
423
|
|
|
7,716
|
|
|||
Repayment of debt and debt conversion
|
|
(2,627
|
)
|
|
(3,026
|
)
|
|
(8,080
|
)
|
|||
Proceeds from sales of common stock through employee equity incentive plans
|
|
750
|
|
|
555
|
|
|
770
|
|
|||
Repurchase of common stock
|
|
(13,576
|
)
|
|
(10,730
|
)
|
|
(3,615
|
)
|
|||
Payment of dividends to stockholders
|
|
(5,576
|
)
|
|
(5,541
|
)
|
|
(5,072
|
)
|
|||
Other financing
|
|
72
|
|
|
(288
|
)
|
|
(194
|
)
|
|||
Net cash provided by (used for) financing activities
|
|
(17,565
|
)
|
|
(18,607
|
)
|
|
(8,475
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
1,175
|
|
|
(414
|
)
|
|
(2,127
|
)
|
|||
Cash and cash equivalents, end of period
|
|
$
|
4,194
|
|
|
$
|
3,019
|
|
|
$
|
3,433
|
|
Supplemental disclosures:
|
|
|
|
|
|
|
||||||
Acquisition of property, plant and equipment included in accounts payable and accrued liabilities
|
|
$
|
1,761
|
|
|
$
|
2,340
|
|
|
$
|
1,417
|
|
Cash paid during the year for:
|
|
|
|
|
|
|
||||||
Interest, net of capitalized interest
|
|
$
|
469
|
|
|
$
|
448
|
|
|
$
|
624
|
|
Income taxes, net of refunds
|
|
$
|
2,110
|
|
|
$
|
3,813
|
|
|
$
|
3,824
|
|
FINANCIAL STATEMENTS
|
Consolidated Statements of Cash Flows
|
72
|
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
|
|
|
Common Stock and Capital
in Excess of Par Value |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Retained
Earnings |
|
Total
|
|||||||||||
(In Millions, Except Per Share Amounts)
|
|
Number of
Shares |
|
Amount
|
|
||||||||||||||
Balance as of December 31, 2016
|
|
4,730
|
|
|
$
|
25,373
|
|
|
$
|
106
|
|
|
$
|
40,747
|
|
|
$
|
66,226
|
|
Components of comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,601
|
|
|
9,601
|
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
756
|
|
|
—
|
|
|
756
|
|
||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
10,357
|
|
||||||||
Employee equity incentive plans and other ¹
|
|
70
|
|
|
1,172
|
|
|
—
|
|
|
(1
|
)
|
|
1,171
|
|
||||
Share-based compensation
|
|
—
|
|
|
1,296
|
|
|
—
|
|
|
—
|
|
|
1,296
|
|
||||
Convertible debt
|
|
—
|
|
|
(894
|
)
|
|
—
|
|
|
—
|
|
|
(894
|
)
|
||||
Repurchase of common stock
|
|
(101
|
)
|
|
(552
|
)
|
|
—
|
|
|
(3,057
|
)
|
|
(3,609
|
)
|
||||
Restricted stock unit withholdings
|
|
(12
|
)
|
|
(321
|
)
|
|
—
|
|
|
(135
|
)
|
|
(456
|
)
|
||||
Cash dividends declared ($1.0775 per share of common stock)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,072
|
)
|
|
(5,072
|
)
|
||||
Balance as of December 30, 2017
|
|
4,687
|
|
|
26,074
|
|
|
862
|
|
|
42,083
|
|
|
69,019
|
|
||||
Adjustment to opening balance 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
|
|
||||
Components of comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,053
|
|
|
21,053
|
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
21,007
|
|
||||||||
Employee equity incentive plans and other ¹
|
|
56
|
|
|
424
|
|
|
—
|
|
|
—
|
|
|
424
|
|
||||
Share-based compensation
|
|
—
|
|
|
1,548
|
|
|
—
|
|
|
—
|
|
|
1,548
|
|
||||
Temporary equity reduction
|
|
—
|
|
|
447
|
|
|
|
|
—
|
|
|
447
|
|
|||||
Convertible debt
|
|
—
|
|
|
(1,591
|
)
|
|
—
|
|
|
—
|
|
|
(1,591
|
)
|
||||
Repurchase of common stock
|
|
(217
|
)
|
|
(1,208
|
)
|
|
—
|
|
|
(9,650
|
)
|
|
(10,858
|
)
|
||||
Restricted stock unit withholdings
|
|
(10
|
)
|
|
(329
|
)
|
|
—
|
|
|
(197
|
)
|
|
(526
|
)
|
||||
Cash dividends declared ($1.20 per share of common stock)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,541
|
)
|
|
(5,541
|
)
|
||||
Balance as of December 29, 2018
|
|
4,516
|
|
|
25,365
|
|
|
(974
|
)
|
|
50,172
|
|
|
74,563
|
|
||||
Components of comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,048
|
|
|
21,048
|
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
(306
|
)
|
|
—
|
|
|
(306
|
)
|
||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
20,742
|
|
||||||||
Employee equity incentive plans and other
|
|
55
|
|
|
892
|
|
|
—
|
|
|
—
|
|
|
892
|
|
||||
Share-based compensation
|
|
—
|
|
|
1,705
|
|
|
—
|
|
|
—
|
|
|
1,705
|
|
||||
Temporary equity reduction
|
|
—
|
|
|
265
|
|
|
—
|
|
|
—
|
|
|
265
|
|
||||
Convertible debt
|
|
—
|
|
|
(1,032
|
)
|
|
—
|
|
|
—
|
|
|
(1,032
|
)
|
||||
Repurchase of common stock
|
|
(272
|
)
|
|
(1,592
|
)
|
|
—
|
|
|
(11,973
|
)
|
|
(13,565
|
)
|
||||
Restricted stock unit withholdings
|
|
(9
|
)
|
|
(342
|
)
|
|
—
|
|
|
(146
|
)
|
|
(488
|
)
|
||||
Cash dividends declared ($1.26 per share of common stock)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,578
|
)
|
|
(5,578
|
)
|
||||
Balance as of December 28, 2019
|
|
4,290
|
|
|
$
|
25,261
|
|
|
$
|
(1,280
|
)
|
|
$
|
53,523
|
|
|
$
|
77,504
|
|
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 purchase of remaining shares.
|
FINANCIAL STATEMENTS
|
Consolidated Statements of Stockholders' Equity
|
73
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE 1 :
|
BASIS OF PRESENTATION
|
NOTE 2 :
|
ACCOUNTING POLICIES
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
74
|
•
|
Level 1. Quoted prices in active markets for identical assets or liabilities. We evaluate security-specific market data when determining whether a market is active.
|
•
|
Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in less active markets, or model-derived valuations. All significant inputs used in our valuations, such as discounted cash flows, are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. We use LIBOR-based yield curves, overnight indexed swap curve, currency spot and forward rates, and credit ratings as significant inputs in our valuations. Level 2 inputs also include non-binding market consensus prices, as well as quoted prices that were adjusted for security-specific restrictions. When we use non-binding market consensus prices, we corroborate them with quoted market prices for similar instruments or compare them to output from internally developed pricing models such as discounted cash flow models.
|
•
|
Level 3. Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. We monitor and review the inputs and results of these valuation models to help ensure the fair value measurements are reasonable and consistent with market experience in similar asset classes. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
75
|
•
|
Marketable equity securities are equity securities with RDFV that are measured and recorded at fair value on a recurring basis with changes in fair value, whether realized or unrealized, recorded through the income statement. Prior to 2018, these securities were classified as available-for-sale securities and measured and recorded at fair value with unrealized changes in fair value recorded through other comprehensive income.
|
•
|
Non-marketable equity securities are equity securities without RDFV that are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. Prior to fiscal 2018, these securities were 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
|
76
|
•
|
Non-marketable equity securities are tested for impairment using a qualitative model similar to the model used for goodwill and long-lived assets. Upon determining that an impairment may exist, the security's fair value is calculated and compared to its carrying value and an impairment is recognized immediately if the carrying value exceeds the fair value. Prior to 2018, non-marketable equity securities were tested for impairment using the other-than-temporary impairment model.
|
•
|
Equity method investments are subject to periodic impairment reviews using the other-than-temporary impairment model, which considers the severity and duration of a decline in fair value below cost and our ability and intent to hold the investment for a sufficient period of time to allow for recovery.
|
•
|
variability in the U.S.-dollar equivalent of non-U.S.-dollar-denominated cash flows associated with our forecasted operating and capital purchases spending; and
|
•
|
coupon and principal payments for our non-U.S.-dollar-denominated indebtedness.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
77
|
•
|
intangible assets, including the valuation methodology, estimations of future cash flows, discount rates, market segment growth rates, and our assumed market segment share, as well as the estimated useful life of intangible assets;
|
•
|
deferred tax assets and liabilities, uncertain tax positions, and tax-related valuation allowances, which are initially estimated as of the acquisition date;
|
•
|
inventory; property, plant and equipment; pre-existing liabilities or legal claims; deferred revenue; and contingent consideration, each as may be applicable; and
|
•
|
goodwill as measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
78
|
NOTE 3 :
|
RECENT ACCOUNTING STANDARDS
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
79
|
(In Millions)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and Thereafter
|
|
Total
|
||||||||||||||
Lease payments
|
|
$
|
178
|
|
|
$
|
135
|
|
|
$
|
97
|
|
|
$
|
74
|
|
|
$
|
54
|
|
|
$
|
57
|
|
|
$
|
595
|
|
Present value of lease payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
549
|
|
(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
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
80
|
NOTE 4 :
|
OPERATING SEGMENTS
|
•
|
DCG
|
•
|
IOTG
|
•
|
Mobileye
|
•
|
NSG
|
•
|
PSG
|
•
|
CCG
|
•
|
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
|
81
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Net revenue:
|
|
|
|
|
|
|
||||||
Data Center Group
|
|
|
|
|
|
|
||||||
Platform
|
|
$
|
21,441
|
|
|
$
|
21,155
|
|
|
$
|
17,439
|
|
Adjacent
|
|
2,040
|
|
|
1,836
|
|
|
1,625
|
|
|||
|
|
23,481
|
|
|
22,991
|
|
|
19,064
|
|
|||
Internet of Things
|
|
|
|
|
|
|
||||||
IOTG
|
|
3,821
|
|
|
3,455
|
|
|
3,169
|
|
|||
Mobileye
|
|
879
|
|
|
698
|
|
|
210
|
|
|||
|
|
4,700
|
|
|
4,153
|
|
|
3,379
|
|
|||
|
|
|
|
|
|
|
||||||
Non-Volatile Memory Solutions Group
|
|
4,362
|
|
|
4,307
|
|
|
3,520
|
|
|||
Programmable Solutions Group
|
|
1,987
|
|
|
2,123
|
|
|
1,902
|
|
|||
Client Computing Group
|
|
|
|
|
|
|
||||||
Platform
|
|
32,681
|
|
|
33,234
|
|
|
31,226
|
|
|||
Adjacent
|
|
4,465
|
|
|
3,770
|
|
|
2,777
|
|
|||
|
|
37,146
|
|
|
37,004
|
|
|
34,003
|
|
|||
All other
|
|
289
|
|
|
270
|
|
|
893
|
|
|||
Total net revenue
|
|
$
|
71,965
|
|
|
$
|
70,848
|
|
|
$
|
62,761
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
|
||||||
Data Center Group
|
|
$
|
10,227
|
|
|
$
|
11,476
|
|
|
$
|
8,395
|
|
|
|
|
|
|
|
|
||||||
Internet of Things
|
|
|
|
|
|
|
||||||
IOTG
|
|
1,097
|
|
|
980
|
|
|
650
|
|
|||
Mobileye
|
|
245
|
|
|
143
|
|
|
(28
|
)
|
|||
|
|
1,342
|
|
|
1,123
|
|
|
622
|
|
|||
|
|
|
|
|
|
|
||||||
Non-Volatile Memory Solutions Group
|
|
(1,176
|
)
|
|
(5
|
)
|
|
(260
|
)
|
|||
Programmable Solutions Group
|
|
318
|
|
|
466
|
|
|
458
|
|
|||
Client Computing Group
|
|
15,202
|
|
|
14,222
|
|
|
12,919
|
|
|||
All other
|
|
(3,878
|
)
|
|
(3,966
|
)
|
|
(4,084
|
)
|
|||
Total operating income
|
|
$
|
22,035
|
|
|
$
|
23,316
|
|
|
$
|
18,050
|
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Platform revenue
|
|
|
|
|
|
|
||||||
DCG platform
|
|
$
|
21,441
|
|
|
$
|
21,155
|
|
|
$
|
17,439
|
|
IOTG platform
|
|
3,440
|
|
|
3,065
|
|
|
2,645
|
|
|||
CCG desktop platform
|
|
11,822
|
|
|
12,220
|
|
|
11,647
|
|
|||
CCG notebook platform
|
|
20,779
|
|
|
20,930
|
|
|
19,414
|
|
|||
Other platform1
|
|
80
|
|
|
84
|
|
|
165
|
|
|||
|
|
57,562
|
|
|
57,454
|
|
|
51,310
|
|
|||
|
|
|
|
|
|
|
||||||
Adjacent revenue2
|
|
14,403
|
|
|
13,394
|
|
|
10,917
|
|
|||
ISecG divested business
|
|
—
|
|
|
—
|
|
|
534
|
|
|||
Total revenue
|
|
$
|
71,965
|
|
|
$
|
70,848
|
|
|
$
|
62,761
|
|
1
|
Includes our tablet and service provider revenue.
|
2
|
Includes all of our non-platform products for DCG, IOTG, and CCG, such as modem, Ethernet, and silicon photonics, as well as Mobileye, NSG, and PSG products.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
82
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
China (including Hong Kong)
|
|
$
|
20,026
|
|
|
$
|
18,824
|
|
|
$
|
14,796
|
|
Singapore
|
|
15,650
|
|
|
15,409
|
|
|
14,285
|
|
|||
United States
|
|
15,617
|
|
|
14,303
|
|
|
12,543
|
|
|||
Taiwan
|
|
10,058
|
|
|
10,646
|
|
|
10,518
|
|
|||
Other countries
|
|
10,614
|
|
|
11,666
|
|
|
10,619
|
|
|||
Total net revenue
|
|
$
|
71,965
|
|
|
$
|
70,848
|
|
|
$
|
62,761
|
|
NOTE 5 :
|
EARNINGS PER SHARE
|
Years Ended (In Millions, Except Per Share Amounts)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Net income available to common stockholders
|
|
$
|
21,048
|
|
|
$
|
21,053
|
|
|
$
|
9,601
|
|
Weighted average shares of common stock outstanding—Basic
|
|
4,417
|
|
|
4,611
|
|
|
4,701
|
|
|||
Dilutive effect of employee incentive plans
|
|
41
|
|
|
50
|
|
|
47
|
|
|||
Dilutive effect of convertible debt
|
|
15
|
|
|
40
|
|
|
87
|
|
|||
Weighted average shares of common stock outstanding—Diluted
|
|
4,473
|
|
|
4,701
|
|
|
4,835
|
|
|||
Earnings per share—Basic
|
|
$
|
4.77
|
|
|
$
|
4.57
|
|
|
$
|
2.04
|
|
Earnings per share—Diluted
|
|
$
|
4.71
|
|
|
$
|
4.48
|
|
|
$
|
1.99
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
83
|
NOTE 6 :
|
CONTRACT LIABILITIES
|
(In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Prepaid supply agreements
|
|
$
|
1,805
|
|
|
$
|
2,587
|
|
Other
|
|
236
|
|
|
122
|
|
||
Total contract liabilities
|
|
$
|
2,041
|
|
|
$
|
2,709
|
|
(In Millions)
|
|
|
||
Prepaid supply agreements balance as of December 29, 2018
|
|
$
|
2,587
|
|
Prepaids utilized
|
|
(782
|
)
|
|
Prepaid supply agreements balance as of December 28, 2019
|
|
$
|
1,805
|
|
NOTE 7 :
|
OTHER FINANCIAL STATEMENT DETAILS
|
(In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Raw materials
|
|
$
|
840
|
|
|
$
|
813
|
|
Work in process
|
|
6,225
|
|
|
4,511
|
|
||
Finished goods
|
|
1,679
|
|
|
1,929
|
|
||
Total inventories
|
|
$
|
8,744
|
|
|
$
|
7,253
|
|
(In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Land and buildings
|
|
$
|
37,743
|
|
|
$
|
30,954
|
|
Machinery and equipment
|
|
74,901
|
|
|
66,721
|
|
||
Construction in progress
|
|
16,063
|
|
|
16,643
|
|
||
Total property, plant and equipment, gross
|
|
128,707
|
|
|
114,318
|
|
||
Less: accumulated depreciation
|
|
(73,321
|
)
|
|
(65,342
|
)
|
||
Total property, plant and equipment, net
|
|
$
|
55,386
|
|
|
$
|
48,976
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
84
|
(In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
United States
|
|
$
|
35,262
|
|
|
$
|
27,512
|
|
Israel
|
|
8,463
|
|
|
8,861
|
|
||
China
|
|
5,315
|
|
|
6,417
|
|
||
Ireland
|
|
3,854
|
|
|
3,947
|
|
||
Other countries
|
|
2,492
|
|
|
2,239
|
|
||
Total property, plant and equipment, net
|
|
$
|
55,386
|
|
|
$
|
48,976
|
|
(In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Non-current deferred tax assets
|
|
$
|
1,209
|
|
|
$
|
1,122
|
|
Pre-payments for property, plant and equipment
|
|
1,641
|
|
|
1,507
|
|
||
Loans receivable
|
|
554
|
|
|
479
|
|
||
Other
|
|
2,149
|
|
|
1,313
|
|
||
Total other long-term assets
|
|
$
|
5,553
|
|
|
$
|
4,421
|
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Interest income
|
|
$
|
483
|
|
|
$
|
438
|
|
|
$
|
441
|
|
Interest expense
|
|
(489
|
)
|
|
(468
|
)
|
|
(646
|
)
|
|||
Other, net
|
|
490
|
|
|
156
|
|
|
(144
|
)
|
|||
Total interest and other, net
|
|
$
|
484
|
|
|
$
|
126
|
|
|
$
|
(349
|
)
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
85
|
NOTE 8 :
|
RESTRUCTURING AND OTHER CHARGES
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
2019 Restructuring Program
|
|
$
|
393
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2016 Restructuring Program
|
|
—
|
|
|
(72
|
)
|
|
135
|
|
|||
ISecG separation costs and other charges
|
|
—
|
|
|
—
|
|
|
249
|
|
|||
Total restructuring and other charges
|
|
$
|
393
|
|
|
$
|
(72
|
)
|
|
$
|
384
|
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
||
Employee severance and benefit arrangements
|
|
$
|
280
|
|
Asset impairment and other charges
|
|
113
|
|
|
Total restructuring and other charges
|
|
$
|
393
|
|
NOTE 9 :
|
INCOME TAXES
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Income before taxes:
|
|
|
|
|
|
|
||||||
U.S.
|
|
$
|
13,729
|
|
|
$
|
14,753
|
|
|
$
|
11,141
|
|
Non-U.S.
|
|
10,329
|
|
|
8,564
|
|
|
9,211
|
|
|||
Total income before taxes
|
|
24,058
|
|
|
23,317
|
|
|
20,352
|
|
|||
Provision for taxes:
|
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
1,391
|
|
|
2,786
|
|
|
8,307
|
|
|||
State
|
|
37
|
|
|
(11
|
)
|
|
27
|
|
|||
Non-U.S.
|
|
1,060
|
|
|
1,097
|
|
|
899
|
|
|||
Total current provision for taxes
|
|
2,488
|
|
|
3,872
|
|
|
9,233
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
597
|
|
|
(1,389
|
)
|
|
1,680
|
|
|||
Other
|
|
(75
|
)
|
|
(219
|
)
|
|
(162
|
)
|
|||
Total deferred provision for taxes
|
|
522
|
|
|
(1,608
|
)
|
|
1,518
|
|
|||
Total provision for taxes
|
|
$
|
3,010
|
|
|
$
|
2,264
|
|
|
$
|
10,751
|
|
Effective tax rate
|
|
12.5
|
%
|
|
9.7
|
%
|
|
52.8
|
%
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
86
|
Years Ended
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
|||
Statutory federal income tax rate
|
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
Increase (reduction) in rate resulting from:
|
|
|
|
|
|
|
|||
Non-U.S. income taxed at different rates
|
|
(3.7
|
)
|
|
(3.6
|
)
|
|
(7.6
|
)
|
Research and development tax credits
|
|
(2.3
|
)
|
|
(2.7
|
)
|
|
(2.3
|
)
|
Domestic manufacturing deduction benefit
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
Foreign derived intangible income benefit
|
|
(3.2
|
)
|
|
(3.7
|
)
|
|
—
|
|
Tax Reform
|
|
—
|
|
|
(1.3
|
)
|
|
26.8
|
|
ISecG divestiture
|
|
—
|
|
|
—
|
|
|
3.3
|
|
Other
|
|
0.7
|
|
|
(0.1
|
)
|
|
(1.1
|
)
|
Effective tax rate
|
|
12.5
|
%
|
|
9.7
|
%
|
|
52.8
|
%
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
87
|
(In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Deferred tax assets:
|
|
|
|
|
||||
Accrued compensation and other benefits
|
|
$
|
740
|
|
|
$
|
570
|
|
Share-based compensation
|
|
294
|
|
|
273
|
|
||
Inventory
|
|
760
|
|
|
517
|
|
||
State credits and net operating losses
|
|
1,511
|
|
|
1,297
|
|
||
Other, net
|
|
515
|
|
|
512
|
|
||
Gross deferred tax assets
|
|
3,820
|
|
|
3,169
|
|
||
Valuation allowance
|
|
(1,534
|
)
|
|
(1,302
|
)
|
||
Total deferred tax assets
|
|
2,286
|
|
|
1,867
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Property, plant and equipment
|
|
(1,807
|
)
|
|
(878
|
)
|
||
Licenses and intangibles
|
|
(720
|
)
|
|
(744
|
)
|
||
Convertible debt
|
|
(88
|
)
|
|
(204
|
)
|
||
Unrealized gains on investments and derivatives
|
|
(292
|
)
|
|
(266
|
)
|
||
Other, net
|
|
(214
|
)
|
|
(318
|
)
|
||
Total deferred tax liabilities
|
|
(3,121
|
)
|
|
(2,410
|
)
|
||
Net deferred tax assets (liabilities)
|
|
$
|
(835
|
)
|
|
$
|
(543
|
)
|
|
|
|
|
|
||||
Reported as:
|
|
|
|
|
||||
Deferred tax assets
|
|
1,209
|
|
|
1,122
|
|
||
Deferred tax liabilities
|
|
(2,044
|
)
|
|
(1,665
|
)
|
||
Net deferred tax assets (liabilities)
|
|
$
|
(835
|
)
|
|
$
|
(543
|
)
|
Years Ended (In Millions)
|
|
Balance at Beginning of Year
|
|
Additions Charged to Expenses/
Other Accounts
|
|
Net
(Deductions)
Recoveries
|
|
Balance at
End of Year
|
||||||||
Valuation allowance for deferred tax assets
|
|
|
|
|
|
|
|
|
||||||||
December 28, 2019
|
|
$
|
1,302
|
|
|
$
|
239
|
|
|
$
|
(7
|
)
|
|
$
|
1,534
|
|
December 29, 2018
|
|
$
|
1,171
|
|
|
$
|
185
|
|
|
$
|
(54
|
)
|
|
$
|
1,302
|
|
December 30, 2017
|
|
$
|
953
|
|
|
$
|
237
|
|
|
$
|
(19
|
)
|
|
$
|
1,171
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
88
|
NOTE 10 :
|
INVESTMENTS
|
|
|
December 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
|
|
$
|
2,914
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
2,958
|
|
|
$
|
3,068
|
|
|
$
|
2
|
|
|
$
|
(28
|
)
|
|
$
|
3,042
|
|
Financial institution instruments
|
|
3,007
|
|
|
15
|
|
|
(1
|
)
|
|
3,021
|
|
|
3,076
|
|
|
3
|
|
|
(11
|
)
|
|
3,068
|
|
||||||||
Government debt
|
|
560
|
|
|
4
|
|
|
—
|
|
|
564
|
|
|
1,069
|
|
|
1
|
|
|
(9
|
)
|
|
1,061
|
|
||||||||
Total available-for-sale debt investments
|
|
$
|
6,481
|
|
|
$
|
63
|
|
|
$
|
(1
|
)
|
|
$
|
6,543
|
|
|
$
|
7,213
|
|
|
$
|
6
|
|
|
$
|
(48
|
)
|
|
$
|
7,171
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
89
|
(In Millions)
|
|
Fair Value
|
||
Due in 1 year or less
|
|
$
|
2,203
|
|
Due in 1–2 years
|
|
1,065
|
|
|
Due in 2–5 years
|
|
2,171
|
|
|
Due after 5 years
|
|
40
|
|
|
Instruments not due at a single maturity date
|
|
1,064
|
|
|
Total
|
|
$
|
6,543
|
|
(In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Marketable equity securities
|
|
$
|
450
|
|
|
$
|
1,440
|
|
Non-marketable equity securities
|
|
3,480
|
|
|
2,978
|
|
||
Equity method investments
|
|
37
|
|
|
1,624
|
|
||
Total
|
|
$
|
3,967
|
|
|
$
|
6,042
|
|
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Ongoing mark-to-market adjustments on marketable equity securities1
|
|
$
|
277
|
|
|
$
|
(129
|
)
|
|
—
|
|
|
Observable price adjustments on non-marketable equity securities1
|
|
293
|
|
|
202
|
|
|
—
|
|
|||
Impairment charges
|
|
(122
|
)
|
|
(424
|
)
|
|
(833
|
)
|
|||
Sale of equity investments and other 2
|
|
1,091
|
|
|
226
|
|
|
3,484
|
|
|||
Total gains (losses) on equity investments, net
|
|
$
|
1,539
|
|
|
$
|
(125
|
)
|
|
$
|
2,651
|
|
1
|
Ongoing mark-to-market adjustments and observable price adjustments relate to the new financial instruments standard adopted in the first quarter of 2018, and are not applicable in prior periods.
|
2
|
Sale of equity investments and other includes realized gains (losses) on sales of non-marketable equity investments, our share of equity method investee gains (losses), and initial fair value adjustments recorded upon a security becoming marketable. In 2017, sales of equity investments and other also included realized gains (losses) on sales of available-for-sale equity securities, which are reflected in ongoing mark-to-market adjustments on marketable equity securities subsequent to 2017.
|
(In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Net gains (losses) recognized during the period on equity securities
|
|
$
|
734
|
|
|
$
|
298
|
|
Less: Net (gains) losses recognized during the period on equity securities sold during the period
|
|
(424
|
)
|
|
(445
|
)
|
||
Unrealized gains (losses) recognized during the period on equity securities still held at the reporting date
|
|
$
|
310
|
|
|
$
|
(147
|
)
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
90
|
NOTE 11 :
|
ACQUISITIONS AND DIVESTITURES
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
91
|
NOTE 12 :
|
GOODWILL
|
(In Millions) |
|
Dec 29,
2018 |
|
Acquisitions
|
|
Transfers
|
|
Other
|
|
Dec 28,
2019 |
||||||||||
Data Center Group
|
|
$
|
5,424
|
|
|
$
|
1,758
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,155
|
|
Internet of Things Group
|
|
1,579
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,579
|
|
|||||
Mobileye
|
|
10,290
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,290
|
|
|||||
Programmable Solutions Group
|
|
2,579
|
|
|
67
|
|
|
—
|
|
|
8
|
|
|
2,681
|
|
|||||
Client Computing Group
|
|
4,403
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
4,333
|
|
|||||
All other
|
|
238
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
238
|
|
|||||
Total
|
|
$
|
24,513
|
|
|
$
|
1,825
|
|
|
$
|
—
|
|
|
$
|
(62
|
)
|
|
$
|
26,276
|
|
(In Millions)
|
|
Dec 30,
2017 |
|
Acquisitions
|
|
Transfers
|
|
Other
|
|
Dec 29,
2018 |
||||||||||
Data Center Group
|
|
$
|
5,421
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,424
|
|
Internet of Things Group
|
|
1,126
|
|
|
16
|
|
480
|
|
|
(43
|
)
|
|
1,579
|
|||||||
Mobileye
|
|
10,278
|
|
|
7
|
|
—
|
|
|
5
|
|
|
10,290
|
|||||||
Programmable Solutions Group
|
|
2,490
|
|
|
89
|
|
—
|
|
|
—
|
|
|
2,579
|
|||||||
Client Computing Group
|
|
4,356
|
|
|
47
|
|
—
|
|
|
—
|
|
|
4,403
|
|||||||
All other
|
|
718
|
|
|
—
|
|
|
(480)
|
|
—
|
|
|
238
|
|||||||
Total
|
|
$
|
24,389
|
|
|
$
|
162
|
|
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
$
|
24,513
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
92
|
NOTE 13 :
|
IDENTIFIED INTANGIBLE ASSETS
|
|
|
December 28, 2019
|
|
December 29, 2018
|
||||||||||||||||||||
(In Millions)
|
|
Gross Assets
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Assets
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Developed technology
|
|
$
|
9,407
|
|
|
$
|
(3,801
|
)
|
|
$
|
5,606
|
|
|
$
|
9,611
|
|
|
$
|
(3,021
|
)
|
|
$
|
6,590
|
|
Customer relationships and brands
|
|
2,160
|
|
|
(708
|
)
|
|
1,452
|
|
|
2,179
|
|
|
(527
|
)
|
|
1,652
|
|
||||||
Licensed technology and patents
|
|
2,975
|
|
|
(1,455
|
)
|
|
1,520
|
|
|
2,932
|
|
|
(1,406
|
)
|
|
1,526
|
|
||||||
In-process R&D
|
|
1,664
|
|
|
—
|
|
|
1,664
|
|
|
1,497
|
|
|
—
|
|
|
1,497
|
|
||||||
Other non-amortizing intangibles
|
|
585
|
|
|
—
|
|
|
585
|
|
|
571
|
|
|
—
|
|
|
571
|
|
||||||
Total identified intangible assets
|
|
$
|
16,791
|
|
|
$
|
(5,964
|
)
|
|
$
|
10,827
|
|
|
$
|
16,790
|
|
|
$
|
(4,954
|
)
|
|
$
|
11,836
|
|
Years Ended (In Millions)
|
|
Location
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
|
Weighted Average Useful Life1
|
||||||
Developed technology
|
|
Cost of sales
|
|
$
|
1,124
|
|
|
$
|
1,105
|
|
|
$
|
912
|
|
|
9 years
|
Customer relationships and brands
|
|
Amortization of acquisition-related intangibles
|
|
200
|
|
|
200
|
|
|
177
|
|
|
11 years
|
|||
Licensed technology and patents
|
|
Cost of sales
|
|
298
|
|
|
260
|
|
|
288
|
|
|
12 years
|
|||
Total amortization expenses
|
|
|
|
$
|
1,622
|
|
|
$
|
1,565
|
|
|
$
|
1,377
|
|
|
|
1
|
Represents weighted average useful life in years of intangible assets during 2019.
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Future amortization expenses
|
|
$
|
1,652
|
|
|
$
|
1,567
|
|
|
$
|
1,443
|
|
|
$
|
1,344
|
|
|
$
|
996
|
|
|
$
|
1,576
|
|
|
$
|
8,578
|
|
NOTE 14 :
|
BORROWINGS
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
93
|
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||||
(In Millions)
|
|
Effective Interest Rate
|
|
Amount
|
|
Amount
|
||||
Floating-rate senior notes:
|
|
|
|
|
|
|
||||
Three-month LIBOR plus 0.08%, due May 2020
|
|
2.56%
|
|
$
|
700
|
|
|
$
|
700
|
|
Three-month LIBOR plus 0.35%, due May 2022
|
|
2.82%
|
|
800
|
|
|
800
|
|
||
Fixed-rate senior notes:
|
|
|
|
|
|
|
||||
3.25%, due December 20191
|
|
—%
|
|
—
|
|
|
177
|
|
||
1.85%, due May 2020
|
|
1.89%
|
|
1,000
|
|
|
1,000
|
|
||
2.45%, due July 2020
|
|
2.49%
|
|
1,750
|
|
|
1,750
|
|
||
1.70%, due May 2021
|
|
1.79%
|
|
500
|
|
|
500
|
|
||
3.30%, due October 2021
|
|
3.71%
|
|
2,000
|
|
|
2,000
|
|
||
2.35%, due May 2022
|
|
2.74%
|
|
750
|
|
|
750
|
|
||
3.10%, due July 2022
|
|
3.50%
|
|
1,000
|
|
|
1,000
|
|
||
4.00%, due December 20221
|
|
2.97%
|
|
382
|
|
|
389
|
|
||
2.70%, due December 2022
|
|
3.09%
|
|
1,500
|
|
|
1,500
|
|
||
4.10%, due November 2023
|
|
3.22%
|
|
400
|
|
|
400
|
|
||
2.88%, due May 2024
|
|
3.07%
|
|
1,250
|
|
|
1,250
|
|
||
2.70%, due June 2024
|
|
2.84%
|
|
600
|
|
|
600
|
|
||
3.70%, due July 2025
|
|
4.44%
|
|
2,250
|
|
|
2,250
|
|
||
2.60%, due May 2026
|
|
2.91%
|
|
1,000
|
|
|
1,000
|
|
||
3.15%, due May 2027
|
|
3.48%
|
|
1,000
|
|
|
1,000
|
|
||
2.45%, due November 2029
|
|
2.48%
|
|
1,250
|
|
|
—
|
|
||
4.00%, due December 2032
|
|
3.56%
|
|
750
|
|
|
750
|
|
||
4.80%, due October 2041
|
|
4.31%
|
|
802
|
|
|
802
|
|
||
4.25%, due December 2042
|
|
3.74%
|
|
567
|
|
|
567
|
|
||
4.90%, due July 2045
|
|
4.41%
|
|
772
|
|
|
772
|
|
||
4.70%, due December 2045
|
|
—%
|
|
—
|
|
|
915
|
|
||
4.10%, due May 2046
|
|
3.68%
|
|
1,250
|
|
|
1,250
|
|
||
4.10%, due May 2047
|
|
3.64%
|
|
1,000
|
|
|
1,000
|
|
||
4.10%, due August 2047
|
|
3.20%
|
|
640
|
|
|
640
|
|
||
3.73%, due December 2047
|
|
4.07%
|
|
1,967
|
|
|
1,967
|
|
||
3.25%, due November 2049
|
|
3.26%
|
|
1,500
|
|
|
—
|
|
||
Oregon and Arizona bonds:
|
|
|
|
|
|
|
||||
2.40% - 2.70%, due December 2035 - 2040
|
|
2.48%
|
|
423
|
|
|
423
|
|
||
5.00%, due March 2049
|
|
2.88%
|
|
138
|
|
|
—
|
|
||
5.00%, due June 2049
|
|
2.48%
|
|
438
|
|
|
—
|
|
||
Junior subordinated convertible debentures:
|
|
|
|
|
|
|
||||
3.25%, due August 20392
|
|
3.37%
|
|
372
|
|
|
988
|
|
||
Total senior notes and other borrowings
|
|
|
|
28,751
|
|
|
27,140
|
|
||
Unamortized premium/discount and issuance costs
|
|
|
|
(529
|
)
|
|
(891
|
)
|
||
Hedge accounting fair value adjustments
|
|
|
|
781
|
|
|
(390
|
)
|
||
Long-term debt
|
|
|
|
29,003
|
|
|
25,859
|
|
||
Current portion of long-term debt
|
|
|
|
(3,695
|
)
|
|
(761
|
)
|
||
Total long-term debt
|
|
|
|
$
|
25,308
|
|
|
$
|
25,098
|
|
1
|
To manage foreign currency risk associated with the Australian-dollar-denominated notes issued in 2015, we entered into currency interest rate swaps with an aggregate notional amount of $577 million, which effectively converted these notes to U.S.-dollar-denominated notes. For further discussion on our currency interest rate swaps, see "Note 17: Derivative Financial Instruments." Principal and unamortized discount/issuance costs for the Australian-dollar-denominated notes in the table above were calculated using foreign currency exchange rates as of December 28, 2019 and December 29, 2018.
|
2
|
Effective interest rate for the year ended December 29, 2018 was 3.42%.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
94
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
95
|
|
|
2009 Debentures
|
||||||
(In Millions, Except Per Share Amounts)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Outstanding principal
|
|
$
|
372
|
|
|
$
|
988
|
|
Unamortized discount1
|
|
$
|
155
|
|
|
$
|
419
|
|
Net debt carrying amount
|
|
$
|
217
|
|
|
$
|
569
|
|
Conversion rate (shares of common stock per $1,000 principal amount of debentures)
|
|
49.69
|
|
|
49.01
|
|
||
Effective conversion price (per share of common stock)
|
|
$
|
20.13
|
|
|
$
|
20.40
|
|
1
|
The unamortized discounts for the 2009 Debentures are amortized over the remaining life of the debt.
|
(In Millions)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and thereafter
|
|
Total
|
||||||||||||||
|
|
$
|
3,450
|
|
|
$
|
2,500
|
|
|
$
|
4,432
|
|
|
$
|
400
|
|
|
$
|
1,850
|
|
|
$
|
16,119
|
|
|
$
|
28,751
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
96
|
NOTE 15 :
|
FAIR VALUE
|
|
|
December 28, 2019
|
|
December 29, 2018
|
||||||||||||||||||||||||||||
|
|
Fair Value Measured and
Recorded at Reporting Date Using
|
|
Total
|
|
Fair Value Measured and
Recorded at Reporting Date Using
|
|
Total
|
||||||||||||||||||||||||
(In Millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
$
|
—
|
|
|
$
|
713
|
|
|
$
|
—
|
|
|
$
|
713
|
|
|
$
|
—
|
|
|
$
|
262
|
|
|
$
|
—
|
|
|
$
|
262
|
|
Financial institution instruments1
|
|
1,064
|
|
|
408
|
|
|
—
|
|
|
1,472
|
|
|
550
|
|
|
183
|
|
|
—
|
|
|
733
|
|
||||||||
Reverse repurchase agreements
|
|
—
|
|
|
1,500
|
|
|
—
|
|
|
1,500
|
|
|
—
|
|
|
1,850
|
|
|
—
|
|
|
1,850
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
—
|
|
|
347
|
|
|
—
|
|
|
347
|
|
|
—
|
|
|
937
|
|
|
—
|
|
|
937
|
|
||||||||
Financial institution instruments1
|
|
—
|
|
|
724
|
|
|
—
|
|
|
724
|
|
|
—
|
|
|
1,423
|
|
|
—
|
|
|
1,423
|
|
||||||||
Government debt2
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
428
|
|
|
—
|
|
|
428
|
|
||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
—
|
|
|
2,848
|
|
|
—
|
|
|
2,848
|
|
|
—
|
|
|
2,635
|
|
|
—
|
|
|
2,635
|
|
||||||||
Financial institution instruments1
|
|
87
|
|
|
1,578
|
|
|
—
|
|
|
1,665
|
|
|
67
|
|
|
1,273
|
|
|
—
|
|
|
1,340
|
|
||||||||
Government debt2
|
|
—
|
|
|
3,334
|
|
|
—
|
|
|
3,334
|
|
|
—
|
|
|
1,868
|
|
|
—
|
|
|
1,868
|
|
||||||||
Other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets
|
|
50
|
|
|
230
|
|
|
—
|
|
|
280
|
|
|
—
|
|
|
180
|
|
|
—
|
|
|
180
|
|
||||||||
Loans receivable3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
354
|
|
|
—
|
|
|
354
|
|
||||||||
Marketable equity securities
|
|
450
|
|
|
—
|
|
|
—
|
|
|
450
|
|
|
1,440
|
|
|
—
|
|
|
—
|
|
|
1,440
|
|
||||||||
Other long-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt
|
|
—
|
|
|
1,898
|
|
|
—
|
|
|
1,898
|
|
|
—
|
|
|
1,843
|
|
|
—
|
|
|
1,843
|
|
||||||||
Financial institution instruments1
|
|
—
|
|
|
825
|
|
|
—
|
|
|
825
|
|
|
—
|
|
|
912
|
|
|
—
|
|
|
912
|
|
||||||||
Government debt2
|
|
—
|
|
|
553
|
|
|
—
|
|
|
553
|
|
|
—
|
|
|
633
|
|
|
—
|
|
|
633
|
|
||||||||
Other long-term assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative assets
|
|
—
|
|
|
690
|
|
|
16
|
|
|
706
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||||||
Loans receivable3
|
|
—
|
|
|
554
|
|
|
—
|
|
|
554
|
|
|
—
|
|
|
229
|
|
|
—
|
|
|
229
|
|
||||||||
Total assets measured and recorded at fair value
|
|
$
|
1,651
|
|
|
$
|
16,213
|
|
|
$
|
16
|
|
|
$
|
17,880
|
|
|
$
|
2,057
|
|
|
$
|
15,110
|
|
|
$
|
—
|
|
|
$
|
17,167
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other accrued liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
$
|
3
|
|
|
$
|
287
|
|
|
$
|
—
|
|
|
$
|
290
|
|
|
$
|
—
|
|
|
$
|
412
|
|
|
$
|
—
|
|
|
$
|
412
|
|
Other long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
415
|
|
|
68
|
|
|
483
|
|
||||||||
Total liabilities measured and recorded at fair value
|
|
$
|
3
|
|
|
$
|
300
|
|
|
$
|
—
|
|
|
$
|
303
|
|
|
$
|
—
|
|
|
$
|
827
|
|
|
$
|
68
|
|
|
$
|
895
|
|
1
|
Level 1 investments in financial institution instruments 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 in government debt 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
|
97
|
NOTE 16 :
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
(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
|
||||||||||
December 31, 2016
|
|
$
|
2,179
|
|
|
$
|
(259
|
)
|
|
$
|
(1,280
|
)
|
|
$
|
(534
|
)
|
|
$
|
106
|
|
Other comprehensive income (loss) before reclassifications
|
|
2,765
|
|
|
605
|
|
|
275
|
|
|
(2
|
)
|
|
3,643
|
|
|||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
(3,433
|
)
|
|
(69
|
)
|
|
103
|
|
|
509
|
|
|
(2,890
|
)
|
|||||
Tax effects
|
|
234
|
|
|
(171
|
)
|
|
(61
|
)
|
|
1
|
|
|
3
|
|
|||||
Other comprehensive income (loss)
|
|
(434
|
)
|
|
365
|
|
|
317
|
|
|
508
|
|
|
756
|
|
|||||
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
|
|
—
|
|
|
(310
|
)
|
|
157
|
|
|
(16
|
)
|
|
(169
|
)
|
|||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
—
|
|
|
9
|
|
|
109
|
|
|
8
|
|
|
126
|
|
|||||
Tax effects
|
|
—
|
|
|
48
|
|
|
(56
|
)
|
|
5
|
|
|
(3
|
)
|
|||||
Other comprehensive income (loss)
|
|
—
|
|
|
(253
|
)
|
|
210
|
|
|
(3
|
)
|
|
(46
|
)
|
|||||
December 29, 2018
|
|
—
|
|
|
(123
|
)
|
|
(818
|
)
|
|
(33
|
)
|
|
(974
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
|
—
|
|
|
(11
|
)
|
|
(753
|
)
|
|
109
|
|
|
(655
|
)
|
|||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
—
|
|
|
195
|
|
|
67
|
|
|
(6
|
)
|
|
256
|
|
|||||
Tax effects
|
|
—
|
|
|
(7
|
)
|
|
122
|
|
|
(22
|
)
|
|
93
|
|
|||||
Other comprehensive income (loss)
|
|
—
|
|
|
177
|
|
|
(564
|
)
|
|
81
|
|
|
(306
|
)
|
|||||
December 28, 2019
|
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
(1,382
|
)
|
|
$
|
48
|
|
|
$
|
(1,280
|
)
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
98
|
NOTE 17 :
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
(In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Foreign currency contracts
|
|
$
|
23,981
|
|
|
$
|
19,223
|
|
|
$
|
19,958
|
|
Interest rate contracts
|
|
14,302
|
|
|
22,447
|
|
|
16,823
|
|
|||
Other
|
|
1,753
|
|
|
1,356
|
|
|
1,636
|
|
|||
Total
|
|
$
|
40,036
|
|
|
$
|
43,026
|
|
|
$
|
38,417
|
|
|
|
December 28, 2019
|
|
December 29, 2018
|
||||||||||||
(In Millions)
|
|
Assets1
|
|
Liabilities2
|
|
Assets1
|
|
Liabilities2
|
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts3
|
|
$
|
56
|
|
|
$
|
159
|
|
|
$
|
44
|
|
|
$
|
244
|
|
Interest rate contracts
|
|
690
|
|
|
9
|
|
|
84
|
|
|
474
|
|
||||
Total derivatives designated as hedging instruments
|
|
746
|
|
|
168
|
|
|
128
|
|
|
718
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts3
|
|
179
|
|
|
78
|
|
|
132
|
|
|
155
|
|
||||
Interest rate contracts
|
|
11
|
|
|
54
|
|
|
20
|
|
|
22
|
|
||||
Equity contracts
|
|
50
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||
Total derivatives not designated as hedging instruments
|
|
240
|
|
|
135
|
|
|
152
|
|
|
177
|
|
||||
Total derivatives
|
|
$
|
986
|
|
|
$
|
303
|
|
|
$
|
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
|
99
|
|
|
December 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
|
|
$
|
974
|
|
|
$
|
—
|
|
|
$
|
974
|
|
|
$
|
(144
|
)
|
|
$
|
(808
|
)
|
|
$
|
22
|
|
Reverse repurchase agreements
|
|
1,850
|
|
|
—
|
|
|
1,850
|
|
|
—
|
|
|
(1,850
|
)
|
|
—
|
|
||||||
Total assets
|
|
2,824
|
|
|
—
|
|
|
2,824
|
|
|
(144
|
)
|
|
(2,658
|
)
|
|
22
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities subject to master netting arrangements
|
|
262
|
|
|
—
|
|
|
262
|
|
|
(144
|
)
|
|
(72
|
)
|
|
46
|
|
||||||
Total liabilities
|
|
$
|
262
|
|
|
$
|
—
|
|
|
$
|
262
|
|
|
$
|
(144
|
)
|
|
$
|
(72
|
)
|
|
$
|
46
|
|
|
|
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
|
100
|
|
|
Gains (Losses)
Recognized in Statement of Income on
Derivatives
|
||||||||||
Years Ended (In Millions)
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Interest rate contracts
|
|
$
|
1,071
|
|
|
$
|
(138
|
)
|
|
$
|
(68
|
)
|
Hedged items
|
|
(1,071
|
)
|
|
138
|
|
|
68
|
|
|||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Line Item in the Consolidated Balance Sheet in Which the Hedged Item Is Included
|
|
Carrying Amount of the Hedged Item Asset/(Liabilities)
|
|
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities)
|
||||||||||||
Years Ended
(In Millions) |
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||||||
Long-term debt
|
|
$
|
(12,678
|
)
|
|
$
|
(19,622
|
)
|
|
$
|
(681
|
)
|
|
$
|
390
|
|
Years Ended (In Millions)
|
|
Location of Gains (Losses)
Recognized in Income on Derivatives
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Foreign currency contracts
|
|
Interest and other, net
|
|
$
|
204
|
|
|
$
|
372
|
|
|
$
|
(547
|
)
|
Interest rate contracts
|
|
Interest and other, net
|
|
(32
|
)
|
|
9
|
|
|
9
|
|
|||
Other
|
|
Various
|
|
297
|
|
|
(147
|
)
|
|
203
|
|
|||
Total
|
|
$
|
469
|
|
|
$
|
234
|
|
|
$
|
(335
|
)
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
101
|
NOTE 18 :
|
RETIREMENT BENEFIT PLANS
|
(In Millions)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025-2029
|
||||||||||||
Postretirement Medical Benefits
|
|
$
|
28
|
|
|
$
|
30
|
|
|
$
|
31
|
|
|
$
|
32
|
|
|
$
|
34
|
|
|
$
|
183
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
102
|
(In Millions) |
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Changes in projected benefit obligation:
|
|
|
|
|
||||
Beginning projected benefit obligation
|
|
$
|
3,433
|
|
|
$
|
3,842
|
|
Service cost
|
|
54
|
|
|
65
|
|
||
Interest cost
|
|
113
|
|
|
113
|
|
||
Actuarial (gain) loss
|
|
829
|
|
|
(204
|
)
|
||
Currency exchange rate changes
|
|
(2
|
)
|
|
(121
|
)
|
||
Plan curtailments
|
|
—
|
|
|
(150
|
)
|
||
Plan settlements
|
|
(57
|
)
|
|
(74
|
)
|
||
Other
|
|
(86
|
)
|
|
(38
|
)
|
||
Ending projected benefit obligation1
|
|
4,284
|
|
|
3,433
|
|
||
|
|
|
|
|
||||
Changes in fair value of plan assets:
|
|
|
|
|
||||
Beginning fair value of plan assets
|
|
2,551
|
|
|
2,287
|
|
||
Actual return on plan assets
|
|
193
|
|
|
(38
|
)
|
||
Employer contributions
|
|
30
|
|
|
480
|
|
||
Currency exchange rate changes
|
|
3
|
|
|
(62
|
)
|
||
Plan settlements
|
|
(57
|
)
|
|
(74
|
)
|
||
Other
|
|
(66
|
)
|
|
(42
|
)
|
||
Ending fair value of plan assets2
|
|
2,654
|
|
|
2,551
|
|
||
|
|
|
|
|
||||
Net funded status
|
|
$
|
1,630
|
|
|
$
|
882
|
|
|
|
|
|
|
||||
Amounts recognized in the Consolidated Balance Sheets
|
|
|
|
|
||||
Other long-term assets
|
|
$
|
—
|
|
|
$
|
244
|
|
Other long-term liabilities
|
|
$
|
1,630
|
|
|
$
|
1,126
|
|
Accumulated other comprehensive loss (income), before tax3
|
|
$
|
1,730
|
|
|
$
|
1,038
|
|
1
|
The projected benefit obligation was approximately 35% in the U.S. and 65% outside of the U.S. as of December 28, 2019 and December 29, 2018.
|
2
|
The fair value of plan assets was approximately 55% in the U.S. and 45% outside of the U.S. as of December 28, 2019 and December 29, 2018.
|
3
|
The accumulated other comprehensive loss (income), before tax, was approximately 35% in the U.S. and 65% outside of the U.S. as of December 28, 2019 and December 29, 2018.
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
103
|
(In Millions) |
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||||
Plans with accumulated benefit obligation in excess of plan assets
|
|
|
|
|
||||
Accumulated benefit obligation
|
|
$
|
3,862
|
|
|
$
|
1,965
|
|
Plan assets
|
|
$
|
2,654
|
|
|
$
|
1,106
|
|
|
|
|
|
|
||||
Plans with projected benefit obligation in excess of plan assets
|
|
|
|
|
||||
Projected benefit obligation
|
|
$
|
4,284
|
|
|
$
|
2,232
|
|
Plan assets
|
|
$
|
2,654
|
|
|
$
|
1,106
|
|
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
||
Weighted average actuarial assumptions used to determine benefit obligations
|
|
|
|
|
||
Discount rate
|
|
2.3
|
%
|
|
3.3
|
%
|
Rate of compensation increase
|
|
3.5
|
%
|
|
3.5
|
%
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Weighted average actuarial assumptions used to determine costs
|
|
|
|
|
|
|
|||
Discount rate
|
|
3.4
|
%
|
|
3.0
|
%
|
|
3.2
|
%
|
Expected long-term rate of return on plan assets
|
|
4.7
|
%
|
|
4.7
|
%
|
|
4.6
|
%
|
Rate of compensation increase
|
|
3.5
|
%
|
|
3.3
|
%
|
|
3.6
|
%
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
104
|
|
|
December 28, 2019
|
|
Dec 29,
2018 |
||||||||||||||||
|
|
Fair Value Measured at Reporting Date Using
|
|
|
|
|
||||||||||||||
(In Millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Total
|
||||||||||
Equity securities
|
|
$
|
—
|
|
|
$
|
278
|
|
|
$
|
—
|
|
|
$
|
278
|
|
|
$
|
261
|
|
Fixed income
|
|
—
|
|
|
99
|
|
|
20
|
|
|
119
|
|
|
111
|
|
|||||
Assets measured by fair value hierarchy
|
|
$
|
—
|
|
|
$
|
377
|
|
|
$
|
20
|
|
|
$
|
397
|
|
|
$
|
372
|
|
Assets measured at net asset value
|
|
|
|
|
|
|
|
2,236
|
|
|
2,138
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
21
|
|
|
41
|
|
||||||||
Total pension plan assets at fair value
|
|
|
|
|
|
|
|
$
|
2,654
|
|
|
$
|
2,551
|
|
(In Millions)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025-2029
|
||||||||||||
Pension benefits
|
|
$
|
151
|
|
|
$
|
145
|
|
|
$
|
139
|
|
|
$
|
135
|
|
|
$
|
132
|
|
|
$
|
694
|
|
NOTE 19 :
|
EMPLOYEE EQUITY INCENTIVE PLANS
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
105
|
|
|
Dec 28,
2019 |
|
Dec 29,
2018 |
|
Dec 30,
2017 |
||||||
Estimated values
|
|
$
|
48.06
|
|
|
$
|
48.95
|
|
|
$
|
35.30
|
|
Risk-free interest rate
|
|
2.3
|
%
|
|
2.4
|
%
|
|
1.4
|
%
|
|||
Dividend yield
|
|
2.5
|
%
|
|
2.4
|
%
|
|
2.9
|
%
|
|||
Volatility
|
|
25
|
%
|
|
22
|
%
|
|
23
|
%
|
|
|
Number of
Stock Units
(In Millions)
|
|
Weighted
Average
Grant-Date
Fair Value
|
|||
December 29, 2018
|
|
89.9
|
|
|
$
|
39.07
|
|
Granted
|
|
37.6
|
|
|
$
|
48.06
|
|
Vested
|
|
(35.2
|
)
|
|
$
|
36.51
|
|
Forfeited
|
|
(8.2
|
)
|
|
$
|
42.20
|
|
December 28, 2019
|
|
84.1
|
|
|
$
|
43.86
|
|
Expected to vest
|
79.8
|
|
|
$
|
43.72
|
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
106
|
NOTE 20 :
|
COMMITMENTS AND CONTINGENCIES
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
107
|
FINANCIAL STATEMENTS
|
Notes to Financial Statements
|
108
|
KEY TERMS
|
TERM
|
|
DEFINITION
|
|
|
|
2006 Plan
|
|
2006 Equity Incentive Plan
|
2006 ESPP
|
|
2006 Employee Stock Purchase Plan
|
2009 Debentures
|
|
3.25% junior subordinated convertible debentures due 2039
|
2018 Arizona Bonds
|
|
Bonds remarketed in 2018, which were issued by the Industrial Development Authority of the City of Chandler, Arizona and which are our unsecured obligations
|
2018 Oregon Bonds
|
|
Bonds remarketed in 2018, which were issued by the State of Oregon Business Development Commission and which are our unsecured obligations
|
2019 Arizona Bonds
|
|
Bonds issued in 2019 by the Industrial Development Authority of the City of Chandler, Arizona that are our unsecured obligations
|
2019 Oregon Bonds
|
|
Bonds issued in 2019 by the State of Oregon Business Development Commission that are our unsecured obligations
|
5G
|
|
The next-generation mobile network, which is expected to bring dramatic improvements in network speeds and latency, and which we view as a transformative technology and opportunity for many industries
|
ADAS
|
|
Advanced driver-assistance systems
|
ASIC
|
|
Application-specific integrated circuit
|
AV
|
|
Autonomous vehicle
|
CAGR
|
|
Compound annual growth rate
|
CDP
|
|
A nonprofit organization that runs a global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts
|
CODM
|
|
Chief operating decision maker
|
Cloudification
|
|
Refers to the application of cloud technologies and business practices to infrastructure outside the centralized cloud data center—bringing the same programmability, flexibility, and economies of scale to the network and edge.
|
CPU
|
|
Processor or central processing unit
|
Data-centric businesses
|
|
Includes our Data Center Group (DCG), Internet of Things Group (IOTG), Mobileye, Non-Volatile Memory Solutions Group (NSG), Programmable Solutions Group (PSG), and all other businesses
|
EC
|
|
European Commission
|
Edge (or intelligent edge)
|
|
Allocated resources that move, store, and process data closer to the source or point of service delivery
|
ERISA
|
|
Employee Retirement Income Security Act
|
Form 10-K
|
|
Annual Report on Form 10-K
|
FPGA
|
|
Field-programmable gate array
|
GHG
|
|
Greenhouse gas
|
GPU
|
|
Graphics processing unit
|
IDM
|
|
Integrated device manufacturer
|
IMFT
|
|
IM Flash Technologies, LLC
|
Internet of Things
|
|
Refers to the Internet of Things market in which we sell our IOTG and Mobileye products
|
I/O
|
|
Input/output
|
IP
|
|
Intellectual property
|
ISecG
|
|
Intel Security Group (divested in Q2 2017)
|
LEED*
|
|
Leadership in Energy and Environmental Design, which is the most widely used green building rating system in the world
|
Levels of autonomous driving:
|
|
|
(L1) Level 1
|
|
Most functions are controlled by a human driver; certain functions (parking assist, acceleration, and limited steering) can be done automatically by the vehicle
|
SUPPLEMENTAL DETAILS
|
|
109
|
(L2) Level 2
|
|
The system controls both steering and acceleration using information about the driving environment (e.g., lane centering and cruise control), but with the expectation that a human will perform all remaining aspects of driving; the driver can have his or her hands off the steering wheel, but must monitor the “dynamic driving task” at all times
|
(L2+) Level 2+
|
|
The system controls both steering and acceleration using multi camera sensor suite and/ or high definition maps to enhance and solidify L2 capabilities.
|
(L3) Level 3
|
|
The system performs all aspects of the driving task with the expectation that a human will respond appropriately if intervention is necessary. The vehicle transfers control to the driver when necessary; the driver must be ready to retake control at all times, but does not need to continuously monitor conditions
|
(L4) Level 4
|
|
The system performs all aspects of the driving task even if the driver does not respond appropriately to a request for intervention, including all safety-critical driving
functions and monitoring roadway conditions for an entire trip. For a defined use case (e.g., urban driving), no driver intervention is required at all |
(L5) Level 5
|
|
The system performs all aspects of the driving task under all roadway and environmental conditions. System performance is equal to a human driver in every scenario, including extreme environments
|
MaaS
|
|
Mobility-as-a-Service
|
McAfee
|
|
Business, post divestiture of ISecG in Q2 2017, which we retained an interest in as part of our investment strategy
|
MD&A
|
|
Management's Discussion & Analysis
|
MDF
|
|
Member debt financing
|
MG&A
|
|
Marketing, general and administrative
|
NAND
|
|
NAND flash memory
|
nm
|
|
Nanometer
|
ODM
|
|
Original design manufacturer
|
OEM
|
|
Original equipment manufacturer
|
PC-centric business
|
|
Our Client Computing Group (CCG) business, including both platform and adjacent products
|
PLD
|
|
Programmable logic device
|
Program (specific to Mobileye business)
|
|
A process that takes two to three years of intense activity with the carmaker and Tier 1 after a design win until Mobileye technology is launched into production
|
PRQ
|
|
Product Release Qualification, which is the milestone when costs to manufacture a product are included in inventory valuation
|
QLC
|
|
Quad-level cell
|
R&D
|
|
Research and development
|
RDFV
|
|
Readily determinable fair value
|
REM
|
|
Road Experience Management
|
RSU
|
|
Restricted stock unit
|
SEC
|
|
U.S. Securities and Exchange Commission
|
SiP
|
|
System-in-package, a number of integrated circuits enclosed in a single chip carrier package
|
SoC
|
|
System-on-Chip
|
SSD
|
|
Solid-state drive
|
TAM
|
|
Total addressable market
|
Tax Reform
|
|
U.S. Tax Cuts and Jobs Act
|
TCFD
|
|
Task Force on Climate-Related Financial Disclosures
|
TLC
|
|
Triple-level cell
|
TSR
|
|
Total stockholder return
|
U.S. GAAP
|
|
U.S. Generally Accepted Accounting Principles
|
U.S. Pension Plan
|
|
U.S. Intel Minimum Pension Plan
|
U.S. Retiree Medical Plan
|
|
U.S. Postretirement Medical Benefits Plan
|
VPU
|
|
Vision processing unit
|
Wind River
|
|
Wind River Systems, Inc. (divested in Q2 2018)
|
xPU
|
|
A term for processors that are designed for one of four major computing architectures: CPU, GPU, AI accelerator, and FPGA
|
SUPPLEMENTAL DETAILS
|
|
110
|
FINANCIAL INFORMATION BY QUARTER (UNAUDITED)
|
2019 for Quarter Ended
(In Millions, Except Per Share Amounts) |
|
December 28
|
|
September 28
|
|
June 29
|
|
March 30
|
||||||||
Net revenue
|
|
$
|
20,209
|
|
|
$
|
19,190
|
|
|
$
|
16,505
|
|
|
$
|
16,061
|
|
Gross margin
|
|
$
|
11,878
|
|
|
$
|
11,295
|
|
|
$
|
9,878
|
|
|
$
|
9,089
|
|
Net income
|
|
$
|
6,905
|
|
|
$
|
5,990
|
|
|
$
|
4,179
|
|
|
$
|
3,974
|
|
Earnings per share—Basic
|
|
$
|
1.60
|
|
|
$
|
1.36
|
|
|
$
|
0.94
|
|
|
$
|
0.88
|
|
Earnings per share—Diluted
|
|
$
|
1.58
|
|
|
$
|
1.35
|
|
|
$
|
0.92
|
|
|
$
|
0.87
|
|
Dividends per share of common stock:
|
|
|
|
|
|
|
|
|
||||||||
Declared
|
|
$
|
—
|
|
|
$
|
0.63
|
|
|
$
|
—
|
|
|
$
|
0.63
|
|
Paid
|
|
$
|
0.315
|
|
|
$
|
0.315
|
|
|
$
|
0.315
|
|
|
$
|
0.315
|
|
2018 for Quarter Ended
(In Millions, Except Per Share Amounts) |
|
December 29
|
|
September 29
|
|
June 30
|
|
March 31
|
||||||||
Net revenue
|
|
$
|
18,657
|
|
|
$
|
19,163
|
|
|
$
|
16,962
|
|
|
$
|
16,066
|
|
Gross margin
|
|
$
|
11,227
|
|
|
$
|
12,360
|
|
|
$
|
10,419
|
|
|
$
|
9,731
|
|
Net income (loss)
|
|
$
|
5,195
|
|
|
$
|
6,398
|
|
|
$
|
5,006
|
|
|
$
|
4,454
|
|
Earnings per share—Basic
|
|
$
|
1.14
|
|
|
$
|
1.40
|
|
|
$
|
1.08
|
|
|
$
|
0.95
|
|
Earnings per share—Diluted
|
|
$
|
1.12
|
|
|
$
|
1.38
|
|
|
$
|
1.05
|
|
|
$
|
0.93
|
|
Dividends per share of common stock:
|
|
|
|
|
|
|
|
|
||||||||
Declared
|
|
$
|
—
|
|
|
$
|
0.60
|
|
|
$
|
—
|
|
|
$
|
0.60
|
|
Paid
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
SUPPLEMENTAL DETAILS
|
|
111
|
CONTROLS AND PROCEDURES
|
SUPPLEMENTAL DETAILS
|
|
112
|
EXHIBITS
|
1.
|
Financial Statements: See "Index to Consolidated Financial Statements" within the Consolidated Financial Statements.
|
2.
|
Financial Statement Schedules; not applicable or the required information is otherwise included in the Consolidated Financial Statements and accompanying notes.
|
3.
|
Exhibits: The exhibits listed in the accompanying index to exhibits are filed, furnished, or incorporated by reference as part of this Form 10-K.
|
•
|
may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;
|
•
|
may apply standards of materiality that differ from those of a reasonable investor; and
|
•
|
were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.
|
SUPPLEMENTAL DETAILS
|
|
113
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|
Filed or
Furnished
Herewith
|
|||||||
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing
Date
|
|
||||
2.1
|
|
|
|
8-K
|
|
000-06217
|
|
2.1
|
|
|
3/13/2017
|
|
|
3.1
|
|
|
8-K
|
|
000-06217
|
|
3.1
|
|
|
5/22/2006
|
|
|
|
3.2
|
|
|
8-K
|
|
000-06217
|
|
3.2
|
|
|
1/17/2019
|
|
|
|
4.1
|
|
|
S-3ASR
|
|
333-132865
|
|
4.4
|
|
|
3/30/2006
|
|
|
|
4.2
|
|
|
10-K
|
|
000-06217
|
|
4.2.4
|
|
|
2/20/2008
|
|
|
|
4.3
|
|
|
10-Q
|
|
000-06217
|
|
4.1
|
|
|
11/2/2009
|
|
|
|
4.4
|
|
|
8-K
|
|
000-06217
|
|
4.01
|
|
|
9/19/2011
|
|
|
|
4.5
|
|
|
8-K
|
|
000-06217
|
|
4.01
|
|
|
12/11/2012
|
|
|
|
4.6
|
|
|
8-K
|
|
000-06217
|
|
4.01
|
|
|
12/14/2012
|
|
|
|
4.7
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
7/29/2015
|
|
|
|
4.8
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
5/19/2016
|
|
|
|
4.9
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
5/11/2017
|
|
|
|
4.10
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
6/16/2017
|
|
|
|
4.11
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
8/14/2017
|
|
|
|
4.12
|
|
|
10-K
|
|
000-06217
|
|
4.2.13
|
|
|
2/16/2018
|
|
|
|
4.13
|
|
|
8-K
|
|
000-06217
|
|
4.1
|
|
|
11/21/2019
|
|
|
SUPPLEMENTAL DETAILS
|
|
114
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|
Filed or
Furnished
Herewith
|
|||||||
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing
Date
|
|
||||
4.14
|
|
|
10-Q
|
|
000-06217
|
|
4.1
|
|
|
10/24/2019
|
|
|
|
4.15
|
|
|
8-K
|
|
000-06217
|
|
99.2
|
|
|
12/28/2015
|
|
|
|
|
|
Certain instruments defining the rights of holders of long-term debt of Intel Corporation are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. Intel Corporation hereby agrees to furnish to the Securities and Exchange Commission, upon request, copies of such instruments.
|
|
|
|
|
|
|
|
|
|
|
|
4.16
|
|
|
|
|
|
|
|
|
|
|
X
|
||
10.1†
|
|
|
10-Q
|
|
000-06217
|
|
10.1
|
|
|
7/26/2019
|
|
|
|
10.1.2†
|
|
|
10-Q
|
|
000-06217
|
|
10.3
|
|
|
8/3/2009
|
|
|
|
10.1.3†
|
|
|
10-Q
|
|
000-06217
|
|
10.1
|
|
|
10/25/2018
|
|
|
|
10.1.4†
|
|
|
10-Q
|
|
000-06217
|
|
10.3
|
|
|
4/27/2015
|
|
|
|
10.1.5†
|
|
|
10-Q
|
|
000-06217
|
|
10.3
|
|
|
4/26/2019
|
|
|
|
10.1.6†
|
|
|
10-Q
|
|
000-06217
|
|
10.4
|
|
|
4/26/2019
|
|
|
|
10.1.7†
|
|
|
10-K
|
|
000-06217
|
|
10.1.6
|
|
|
2/16/2018
|
|
|
|
10.1.8†
|
|
|
|
10-Q
|
|
000-06217
|
|
10.2
|
|
|
10/25/2018
|
|
|
10.1.9†
|
|
|
|
10-Q
|
|
000-06217
|
|
10.8
|
|
|
4/26/2019
|
|
|
10.1.10†
|
|
|
10-Q
|
|
000-06217
|
|
10.1
|
|
|
4/27/2017
|
|
|
|
10.1.11†
|
|
|
10-Q
|
|
000-06217
|
|
10.3
|
|
|
10/25/2018
|
|
|
|
10.1.12†
|
|
|
10-Q
|
|
000-06217
|
|
10.5
|
|
|
4/26/2019
|
|
|
|
10.1.13†
|
|
|
10-Q
|
|
000-06217
|
|
10.6
|
|
|
4/26/2019
|
|
|
SUPPLEMENTAL DETAILS
|
|
115
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|
Filed or
Furnished
Herewith
|
|||||||
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing
Date
|
|
||||
10.1.14†
|
|
|
10-Q
|
|
000-06217
|
|
10.9
|
|
|
4/26/2019
|
|
|
|
10.1.15†
|
|
|
10-Q
|
|
000-06217
|
|
10.10
|
|
|
4/26/2019
|
|
|
|
10.1.16†
|
|
|
10-Q
|
|
000-06217
|
|
10.7
|
|
|
4/26/2019
|
|
|
|
10.1.17†
|
|
|
10-Q
|
|
000-06217
|
|
10.1
|
|
|
4/27/2015
|
|
|
|
10.1.18†
|
|
|
10-Q
|
|
000-06217
|
|
10.11
|
|
|
4/26/2019
|
|
|
|
10.1.19†
|
|
|
10-Q
|
|
000-06217
|
|
10.2
|
|
|
4/27/2017
|
|
|
|
10.2†
|
|
|
10-K
|
|
000-06217
|
|
10.2
|
|
|
2/1/2019
|
|
|
|
10.3†
|
|
|
10-K
|
|
000-06217
|
|
10.9.2
|
|
|
2/14/2014
|
|
|
|
10.4†
|
|
|
10-K
|
|
000-06217
|
|
10.15
|
|
|
2/22/2005
|
|
|
|
10.5†
|
|
|
10-Q
|
|
000-06217
|
|
10.2
|
|
|
10/31/2016
|
|
|
|
10.6†
|
|
|
S-8
|
|
333-172024
|
|
99.1
|
|
|
2/2/2011
|
|
|
|
10.7†
|
|
|
10-K
|
|
000-06217
|
|
10.41
|
|
|
2/26/2007
|
|
|
|
10.8
|
|
|
8-K
|
|
000-06217
|
|
10.1
|
|
|
11/12/2009
|
|
|
|
10.9††
|
|
|
8-K
|
|
000-06217
|
|
10.1
|
|
|
1/10/2011
|
|
|
|
10.10†
|
|
|
10-K
|
|
000-06217
|
|
10.14
|
|
|
2/12/2016
|
|
|
|
10.11†
|
|
|
8-K
|
|
000-06217
|
|
10.1
|
|
|
1/31/2019
|
|
|
|
10.12†
|
|
|
8-K
|
|
000-06217
|
|
10.1
|
|
|
4/3/2019
|
|
|
|
10.13†
|
|
|
10-K
|
|
000-06217
|
|
10.13
|
|
|
2/16/2018
|
|
|
|
10.14†
|
|
|
10-Q
|
|
000-06217
|
|
10.12
|
|
|
4/26/2019
|
|
|
|
21.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
23.1
|
|
|
|
|
|
|
|
|
|
|
X
|
SUPPLEMENTAL DETAILS
|
|
116
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
|
Filed or
Furnished
Herewith
|
|||||||
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing
Date
|
|
||||
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
||
32.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
99.1
|
|
|
|
|
|
|
|
|
|
|
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
|
†
|
Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.
|
SUPPLEMENTAL DETAILS
|
|
117
|
FORM 10-K CROSS-REFERENCE INDEX
|
Item Number
|
Item
|
|
Part I
|
|
|
Item 1.
|
Business:
|
|
|
General development of business
|
|
|
Narrative description of business
|
|
|
Available information
|
Page 64
|
Item 1A.
|
Risk Factors
|
|
Item 1B.
|
Unresolved Staff Comments
|
Not applicable
|
Item 2.
|
Properties
|
|
Item 3.
|
Legal Proceedings
|
|
Item 4.
|
Mine Safety Disclosures
|
Not applicable
|
|
|
|
Part II
|
|
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Item 6.
|
Selected Financial Data
|
Page 47
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations:
|
|
|
Results of operations
|
|
|
Liquidity
|
|
|
Capital resources
|
|
|
Off balance sheet arrangements
|
(a)
|
|
Contractual obligations
|
Page 43
|
|
Critical accounting estimates and policies
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Not applicable
|
Item 9A.
|
Controls and Procedures
|
Page 112
|
Item 9B.
|
Other Information
|
Not applicable
|
|
|
|
Part III
|
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
|
Item 11.
|
Executive Compensation
|
(c)
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
(d)
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
(e)
|
Item 14.
|
Principal Accounting Fees and Services
|
(f)
|
|
|
|
Part IV
|
|
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
|
Item 16.
|
Form 10-K Summary
|
Not applicable
|
|
|
|
Signatures
|
|
Page 119
|
(a)
|
As of December 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)
|
Incorporated by reference to "Proposal 1: Election of Directors," "Corporate Governance," "Code of Conduct," and "Other Matters-Delinquent Section 16(a) Reports" in the 2020 Proxy Statement. The information under the heading "Information about Our Executive Officers" within Other Key Information is also incorporated by reference in this section.
|
(c)
|
Incorporated by reference to "Director Compensation," "Compensation Discussion and Analysis," "Report of the Compensation Committee," and "Executive Compensation" in the 2020 Proxy Statement.
|
(d)
|
Incorporated by reference to "Security Ownership of Certain Beneficial Owners and Management" and “Equity Compensation Plan Information” in the 2020 Proxy Statement.
|
(e)
|
Incorporated by reference to "Corporate Governance" and "Certain Relationships and Related Transactions" in the 2020 Proxy Statement.
|
(f)
|
Incorporated by reference to "Report of the Audit Committee" and "Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm" in the 2020 Proxy Statement.
|
SUPPLEMENTAL DETAILS
|
|
118
|
SIGNATURES
|
|
INTEL CORPORATION
Registrant
|
||
|
|
|
|
|
By:
|
|
/s/ ROBERT H. SWAN
|
|
|
|
Robert H. Swan
|
|
|
|
Chief Executive Officer, Director, and Principal Executive Officer
|
|
|
|
January 23, 2020
|
|
/s/ ROBERT H. SWAN
|
|
|
/s/ GEORGE S. DAVIS
|
|
Robert H. Swan
|
|
|
George S. Davis
|
|
Chief Executive Officer, Director, and Principal Executive Officer
|
|
|
Executive Vice President,
|
|
January 23, 2020
|
|
|
Chief Financial Officer and Principal Financial Officer
|
|
|
|
|
January 23, 2020
|
|
|
|
|
|
|
/s/ KEVIN T. MCBRIDE
|
|
|
|
|
Kevin T. McBride
|
|
|
|
|
Vice President of Finance, Corporate Controller and Principal Accounting Officer
|
|
|
|
|
January 23, 2020
|
|
|
|
|
/s/ ANDY D. BRYANT
|
|
|
/s/ DR. RISA LAVIZZO-MOUREY
|
|
Andy D. Bryant
|
|
|
Dr. Risa Lavizzo-Mourey
|
|
Director
|
|
|
Director
|
|
January 23, 2020
|
|
|
January 23, 2020
|
|
|
|
|
|
|
/s/ JAMES J. GOETZ
|
|
|
/s/ DR. TSU-JAE KING LIU
|
|
James J. Goetz
|
|
|
Dr. Tsu-Jae King Liu
|
|
Director
|
|
|
Director
|
|
January 23, 2020
|
|
|
January 23, 2020
|
|
|
|
|
|
|
/s/ ALYSSA HENRY
|
|
|
/s/ GREGORY D. SMITH
|
|
Alyssa Henry
|
|
|
Gregory D. Smith
|
|
Director
|
|
|
Director
|
|
January 23, 2020
|
|
|
January 23, 2020
|
|
|
|
|
|
|
/s/ REED E. HUNDT
|
|
|
/s/ ANDREW WILSON
|
|
Reed E. Hundt
|
|
|
Andrew Wilson
|
|
Director
|
|
|
Director
|
|
January 23, 2020
|
|
|
January 23, 2020
|
|
|
|
|
|
|
/s/ DR. OMAR ISHRAK
|
|
|
/s/ FRANK D. YEARY
|
|
Dr. Omar Ishrak
|
|
|
Frank D. Yeary
|
|
Chairman of the Board and Director
|
|
|
Director
|
|
January 23, 2020
|
|
|
January 23, 2020
|
|
|
|
|
|
SUPPLEMENTAL DETAILS
|
|
119
|
Subsidiaries of the Registrant
|
|
State or Other Jurisdiction of Incorporation
|
Intel International, Inc.
|
|
California, U.S.
|
Intel Commodities Limited
|
|
Cayman Islands
|
Intel Capital Corporation
|
|
Delaware, U.S.
|
Intel Overseas Funding Corporation
|
|
Cayman Islands
|
Cyclops Holdings, LLC
|
|
Delaware, U.S.
|
Intel Americas, Inc.
|
|
Delaware, U.S.
|
Intel Technology (US), LLC
|
|
California, U.S.
|
Altera Corporation
|
|
Delaware, U.S.
|
Intel Benelux B.V.
|
|
Netherlands
|
Intel Holdings B.V.
|
|
Netherlands
|
Intel Finance B.V.
|
|
Netherlands
|
Intel Corporation (UK) Ltd.
|
|
United Kingdom
|
Intel Technologies, Inc.
|
|
Delaware, U.S.
|
Intel Ireland Limited
|
|
Cayman Islands
|
Intel Electronics Ltd.
|
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Israel
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Mobileye Vision Technologies Ltd.
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Israel
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Habana Labs Ltd.
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Israel
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Intel Semi Conductors Ltd.
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Israel
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Intel Semiconductor (Dalian) Ltd.
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China
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Intel Semiconductor (US) LLC
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Delaware, U.S.
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Intel Products (Chengdu) Ltd.
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China
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1
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As of December 28, 2019. Pursuant to Item 601(b)(21)(ii) of Regulation S-K, the names of other Intel Corporation subsidiaries are omitted because, considered in the aggregate, they would not constitute a significant subsidiary as of December 28, 2019.
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(1)
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Registration Statements (Form S-3 No. 333-224472) of Intel Corporation,
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(2)
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Registration Statements (Form S-4 No. 333-158222) of Intel Corporation, and
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(3)
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Registration Statements (Form S-8 Nos. 333-172024, 333-45395, 333-49696, 333-124805, 333-135178, 333-135177, 333-143932, 333-141905, 333-160272, 333-160824, 333-172454, 333-172937, 333-175123, 333-190236, 333-191956, 333-205904, 333-208920, 333-221555, and 333-232093) of Intel Corporation;
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1.
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I have reviewed this annual report on Form 10-K 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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January 23, 2020
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By:
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/s/ ROBERT H. SWAN
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Robert H. Swan
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Chief Executive Officer, Director and Principal Executive Officer
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1.
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I have reviewed this annual report on Form 10-K 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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January 23, 2020
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By:
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/s/ GEORGE S. DAVIS
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George S. Davis
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Executive Vice President,
Chief Financial Officer and Principal Financial Officer |
Date:
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January 23, 2020
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By:
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/s/ ROBERT H. SWAN
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Robert H. Swan
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Chief Executive Officer, Director and Principal Executive Officer
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Date:
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January 23, 2020
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By:
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/s/ GEORGE S. DAVIS
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George S. Davis
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Executive Vice President,
Chief Financial Officer and Principal Financial Officer |