UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
þ


☑		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 29, 2018.25, 2021.
or
¨


☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to.
Commission File Number 000-06217
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INTEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware94-1672743
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
Delaware94-1672743
State or other jurisdiction of
incorporation or organization
(I.R.S. Employer
Identification No.)
2200 Mission College Boulevard,Santa Clara, CaliforniaCalifornia95054-1549
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code (408) 765-8080
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Common stock, $0.001 par valueThe INTCNasdaq Global Select Market*Market
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes þ☑�� No ¨☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes ¨☐  No þ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes þ☑  No ¨☐
Indicate by check mark whether the registrant has submitted electronically every interactive data file required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes þ☑  No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  þ
Accelerated Filer
Accelerated filer  ¨Filer  
Non-accelerated filer  ¨
Non-Accelerated Filer  
Smaller reporting company  ¨Reporting Company  
Emerging growth company  ¨
Growth Company  
☑☐☐☐☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☑
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes ¨☐  No þ☑
Aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of June 29, 2018,25, 2021, based upon the closing price of the common stock as reported by the Nasdaq Global Select Market on such date, was $229.2$226.8 billion. 4,4974,072 million shares of common stock were outstanding as of January 26, 2019.21, 2022.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s proxy statement related to its 20192022 Annual Stockholders’Stockholders' Meeting to be filed subsequently are incorporated by reference into Part III of this Annual Report on Form 10-K. Except as expressly incorporated by reference, the registrant’sregistrant's proxy statement shall not be deemed to be part of this report.




Table of Contents
TABLE OF CONTENTS
ORGANIZATION OF OUR ANNUAL REPORT ON FORMOrganization of Our Form 10-K
The order and presentation of content in our Annual Report on Form 10-K (Form 10-K) differs from the traditional U.S. Securities and Exchange Commission (SEC)SEC Form 10-K format. We believe that ourOur format improvesis designed to improve readability and better presentspresent how we organize and manage our business. See "Form 10-K Cross-Reference Index" within the Financial Statements and Supplemental Details for a cross-reference index to the traditional SEC Form 10-K format.
We have defined certain terms and abbreviations used throughout our Form 10-K in "Key Terms" within the Financial Statements and Supplemental Details.
The preparation of consolidated financial statementsour Consolidated Financial Statements is in conformity with U.S. generally accepted accounting principles (GAAP). We have includedUS GAAP. Our Form 10-K includes key metrics that we use to measure our business, some of which are non-GAAP measures. See these "Non-GAAP Financial Measures" within Other Key Information.
MD&A for an explanation of these measures and why management uses them and believes they provide investors with useful supplemental information.
Fundamentals of Our BusinessPage
Introduction to Our Business
2
A Year in Review
4
Our Strategy
6
Our Capital
8
FUNDAMENTALS OF OUR BUSINESSManagement's Discussion and AnalysisPAGE
Introduction to Our Business
3
A Year in Review
4
Our StrategyProducts
618
How We Organize Our Business
819
Our Products
9
Our Capital
10
Who Manages Our Business
18
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)
Overview
19
Revenue, Gross Margin, and Operating Expenses
20
Segment Trends and Results
2320
Other Consolidated Results of Operations
3837
Liquidity and Capital Resources
3942
Contractual Obligations
Critical Accounting Estimates
4244
Quantitative and Qualitative Disclosures about Market RiskNon-GAAP Financial Measures
4345
OTHER KEY INFORMATIONOther Key Information
Selected Financial Data
45
Sales and Marketing
4648
Competition
47
Intellectual Property Rights and Licensing
48
Critical Accounting Estimates
Quantitative and Qualitative Disclosures About Market Risk
49
Risk Factors
4950
Non-GAAP Financial Measures
58
Properties
6064
Market for Our Common Stock
6064
Information About Our Executive Officers
66
Availability of Company Information
6166
Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934
FINANCIAL STATEMENTS AND SUPPLEMENTAL DETAILS
Auditor's Reports
6367
Financial Statements and Supplemental Details
Auditor's Reports
69
Consolidated Financial Statements
6572
Notes to the Consolidated Financial Statements
7077
Financial Information by QuarterKey Terms
111
Controls and Procedures
112114
Exhibits and Financial Statement Schedules
113115
Form 10-K Cross-Reference Index
118120







Table of Contents


FORWARD-LOOKING STATEMENTSForward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “would,” “should,” “could,”"anticipate," "expect," "intend," "aim," "strive," "objective," "goals," "plans," "ambitions," "opportunity," "outlook," "forecast," "predict," "future," "to be," "pending," "roadmap," "achieve," "grow," "committed," "believe," "seek," "targets," "milestones," "estimated," "continue," "likely," "possible," "may," "might," "potentially," "will," "would," "should," "could," "accelerate," "upcoming," "positioned," "next generation," "progress," "on track," and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to Intel’s strategy and the anticipated benefits of our strategy; manufacturing expansion plans; investment plans and impacts of investment plans; business plans; internal and external manufacturing plans, including future internal manufacturing volumes and external foundry usage; future responses to and effects of COVID-19; projections of our future financial performance, including future revenue, gross margins, capital expenditures, and cash flows; future business, social, and environmental performance, goals, measures, and strategies; our anticipated growth, future market share, and trends in our businesses and operations; projected growth and trends in markets relevant to our businesses,businesses; future technology trends; plans and goals related to Intel’s foundry business, including with respect to future manufacturing capacity and foundry service offerings, including technology and IP offerings; future products and technology, and the expected regulation, availability, and benefits of such products and technology, including future process nodes and technology, product roadmaps, future product architectures, expectations regarding process performance per watt parity and leadership, and expectations regarding product leadership; projected cost and yield trends; expected timing and impact of acquisitions, divestitures, and other significant transactions, including statements relating to the divestiture of our NAND memory business to SK hynix Inc. (SK hynix) and our expected use of proceeds; the proposed IPO of Mobileye; future cash requirements; availability, uses, sufficiency, and cost of capital of capital resources and sources of funding, including future capital and R&D investments, and expected returns to stockholders such as dividends and share repurchases; expectations regarding government incentives; future production capacity and product supply; anticipated trends and impacts related to industry component, substrate, and foundry capacity shortages and constraints; the future purchase, use, and availability of products, components, and services supplied by third parties, including third-party IP and foundry services; tax- and accounting-related expectations; LIBOR-related expectations; our role in the Rapid Assured Microelectronics Prototypes - Commercial program; expectations regarding our relationships with certain sanctioned parties; uncertain events or assumptions, including statements relating to total addressableTAM, market (TAM)opportunity, or market opportunity,projections of future demand; and other characterizations of future events or circumstances are forward-looking statements. Such statements are based on management's expectations as of the date of this filing, unless an earlier date is specified, and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include those described throughout this report and particularly in “Risk Factors”"Risk Factors" within Other Key Information. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this Form 10-K and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business. TheUnless specifically indicated otherwise, the forward-looking statements in this Form 10-K do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that hadhave not been completed as of the date of this filing. In addition, the forward-looking statements in this Form 10-K are made as of the date of this filing, unless an earlier date is specified, including expectations based on third-party information and projections that management believes to be reputable, and Intel does not undertake, and expressly disclaims any duty, to update such statements, whether as a result of new information, new developments, or otherwise, except to the extent that disclosure may be required by law.
NOTE REGARDING THIRD-PARTY INFORMATIONNote Regarding Third-Party Information
This Annual Report on Form 10-K includes market data and certain other statistical information and estimates that are based on reports and other publications from industry analysts, market research firms, and other independent sources, as well as management��smanagement's own good faith estimates and analyses. Intel believes these third-party reports to be reputable, but has not independently verified the underlying data sources, methodologies, or assumptions. The reports and other publications referenced are generally available to the public and were not commissioned by Intel. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances reflected in this information.
INTEL UNIQUE TERMS
We use specific terms throughout this document to describe our business




Intel, 3D XPoint, Arc, Arria, Barefoot Networks, Barefoot logo, Celeron, Intel Agilex, Intel Atom, Intel Core, eASIC, the Footsie logo, Intel Evo, Intel Inside, the Intel logo, the Intel Inside logo, Intel Optane, Iris, Itanium, Killer, Movidius, Myriad, OpenVINO, OpenVINO logo, Pentium, Quark, Stratix, Thunderbolt and results. Belowthe Thunderbolt logo, Tofino, Intel vPro, and Xeon are key terms and how we define them:trademarks of Intel Corporation or its subsidiaries.

PLATFORM PRODUCTS
A microprocessor (processor or central processing unit (CPU)) and chipset, a stand-alone System-on-Chip (SoC), or a multichip package, based on Intel® architecture. Platform products are primarily used in solutions sold through the Client Computing Group (CCG), Data Center Group (DCG), and Internet of Things Group (IOTG) segments.
ADJACENT PRODUCTSAll of our non-platform products for CCG, DCG, and IOTG, such as modem, Ethernet and silicon photonics, as well as Non-Volatile Memory Solutions Group (NSG), Programmable Solutions Group (PSG), and Mobileye products. Combined with our platform products, adjacent products form comprehensive platform solutions to meet customer needs.
PC-CENTRIC BUSINESSOur CCG business, including both platform and adjacent products.
DATA-CENTRIC BUSINESSESOur DCG, IOTG, NSG, PSG, and all other businesses, including Mobileye.





* Other names and brands may be claimed as the property of others.

The Bluetooth® word mark and logos are registered trademarks owned by Bluetooth SIG, Inc. and any use of such marks by Intel Corporation is under license.


Intel,*    Other names and brands may be claimed as the Intel logo, 3D XPoint, Arria, Celeron, Intel Atom, Intel Core, Intel Inside, the Intel Inside logo, Intel Nervana, Intel Optane, Intel Xeon Phi, Itanium, Movidius, Myriad, OpenVINO, Pentium, Quark, Stratix, Thunderbolt, Xeon, and XMM are trademarksproperty of Intel Corporation or its subsidiaries in the U.S. and/or other countries.

others.
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INTRODUCTION TO OUR BUSINESS
We are a world leader in the design and manufacturing of essential technologies that power the cloud and an increasingly smart, connected world. We offer computing, networking, data storage, and communications solutions to a broad set of customers spanning multiple industries. In 1968, Intel was incorporated in California (reincorporated in Delaware in 1989), in what became known as Silicon Valley, and our technology has been at the heart of computing breakthroughs ever since.
We're now in the midst of a corporate transformation as we grow beyond our traditional PC and server businesses into data-rich markets addressing the explosive demands to process, analyze, store, and transfer data. The transformation is well underway, with our data-centric businesses representing an increasing share of our overall revenue.
Our vision is to build a smart and connected world that runs on Intel® solutions. This vision is supported by our commitment to corporate responsibility, our relentless pursuit of Moore's Law, and the talent of our amazing employees.

"Don’t be encumbered by history. Go off and do
something wonderful."
– Bob Noyce, Intel Co-Founder


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A YEAR IN REVIEW
Five years ago, we set out a strategy to transform from a PC-centric to a data-centric company. Our 2018 results serve as a strong proof point that our strategy is working and our transformation is well underway. We achieved record revenue and earnings per share (EPS), driven by strong business performance, continued operating leverage, and a lower tax rate. Revenue from our data-centric businesses collectively increased by double digits. Our PC-centric business grew above our expectations and continued to be a source of profit, cash flow, scale, and intellectual property (IP). While we have had delays in implementing our 10 nanometer (nm) manufacturing process technology, we have continued to innovate in our 14nm products, introducing leadership products that deliver more value to our customers. We've expanded beyond PC and server businesses with significant growth in adjacent products, and gained share in an expanded $300 billion TAM1. Our employees are executing to our strategy by developing compelling technology and delivering innovative products to our customers, enabling strong financial growth.
"The investments in technology and talent we have made in our transformation to a data-centric company position Intel to serve a broader set of customers in an expanded market for silicon."

—Bob Swan, Intel Chief Executive Officer
REVENUEOPERATING INCOMEDILUTED EPS
■PC-CENTRIC $B ■DATA-CENTRIC $Bintc-20211225_g2.jpg
■ GAAP $B ■NON-GAAP $B
■ GAAP■NON-GAAP
1
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$70.8B  $23.3B $24.5B $4.48 $4.58
   
GAAP  GAAP 
non-GAAP2
 GAAP 
non-GAAP2
Revenue up $8.1B or 13% from 2017; data-centric up 18% and PC-centric up 9% Operating income up $5.3B or 29% from 2017 Operating income up $4.9B or 25% from 2017 Diluted EPS up $2.49 or 126% from 2017 Diluted EPS up $1.11 or 32% from 2017
         
Strong growth with record revenue across the business. Top-line growth and continued operating margin leverage while investing in key opportunities such as artificial intelligence (AI) and autonomous driving. 
Demand for high-performance products, adjacency growth, disciplined spending focus, and lower tax rate from Tax Reform3.
          

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A Year in Review
GOALGOALGOAL
Achieve at least low double-digit growth
Total revenue of data-centric businesses$79.0 billion was up year over year, with CCG revenue up 1% and limit PC-centric business declineDCG revenue down 1%, both amid the effects of industry-wide supply constraints. We experienced strength in notebook demand and recovery in desktop demand, partially offset by lower notebook ASPs due to low single digits.
Grow non-GAAP operating income faster than revenue.Grow non-GAAP diluted EPS faster than non-GAAP operating income.
RESULT ✓ACHIEVEDstrength in the consumer and education market segments. DCG was down on lower ASPs driven by product mix and a competitive environment, partially offset by higher platform1 volume from recovery in the enterprise and government market segment. IOTG and Mobileye both achieved strong results on higher demand amid recovery from the economic impacts of COVID-19. We invested $15.2 billion in R&D, made capital investments of $18.7 billion, and generated $30.0 billion in cash from operations and $11.3 billion of free cash flow.
RESULT ✓ACHIEVED
RESULT ✓ACHIEVEDintc-20211225_g5.jpg
Exceeded our goal on both fronts with 18% data-centric businesses growth and 9% PC-centric business growth. Total revenue was approximately $6.0 billion higher than our expectation at the beginning of 2018.On a non-GAAP basis, operating income grew faster than revenue two years in a row. From 2017 to 2018, non-GAAP operating income grew 25%, compared to 13% revenue growth.On a non-GAAP basis, diluted EPS grew faster than operating income two years in a row. From 2017 to 2018, non-GAAP diluted EPS grew 32%, compared to 25% non-GAAP operating income growth.


1
Source: Intel calculated 2022 TAM derived from industry analyst reports.
2
See "Non-GAAP Financial Measures" within Other Key Information.
3
Tax Reform refers to the U.S. Tax Cuts and Jobs Act enacted in December 2017.

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"We achieved solid results amid a highly constrained industry-wide supply environment while continuing to maintain a strong balance sheet and liquidity position. With our IDM 2.0 strategy, we enter a phase of significant investment, positioning us for product leadership and long-term growth."
—David Zinsner, Chief Financial Officer
DATA-CENTRIC BUSINESSES EXPAND WITH NEW OPPORTUNITIESPC-CENTRIC BUSINESS THRIVES
Our data-centric businesses have grown significantly over the last two years. To extend the momentum of this growth, we continue to offer innovative new products that provide higher performance and better value for our customers. We expect that our leadership products such as the second generation Intel® Xeon® Scalable processors and Intel® Stratix®10 SX FPGA will further advance our opportunity in AI and help our customers process and analyze the flood of data implicit in big bets.
Our focus on product segmentation, innovation, and performance in PCs continued. To extend product leadership and deliver more value to customers, we launched our 9th generation Intel® Core™ i9 processors, which target the growing gaming market segment.
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BIG BETS MAKE PROGRESSRevenueBOB SWAN OUR NEW CEOOperating IncomeDiluted EPSCash Flows
a007bigbetsa01.jpg■GAAP $B ■Non-GAAP $B
Our big bets are memory, autonomous driving, and 5G, and we have made progress on all fronts to expand and compete in the data-centric world. We are shipping Intel® Optane™ DC persistent memory for data centers. We also announced our first 5G new radio (NR) multi-mode modem for 2019 and our plan to commercialize Mobility-as-a-Service (MaaS) with autonomous vehicles through a joint venture starting 2019.■GAAP $B■Non-GAAP $B
On January 30, 2019, our Board of Directors appointed Bob Swan as our Chief Executive Officer, the seventh CEO in Intel’s 50-year history. Mr. Swan joined Intel as our Chief Financial Officer in October 2016.
a061intelbobswan2.jpg■GAAP■ Non-GAAP
■Operating Cash Flow $B
■Free Cash Flow2 $B
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WE ARE PROUD OF OUR HERITAGE
$79.0B$74.7B$19.5B$22.2B$4.86$5.47$30.0B$11.3B
GAAP
non-GAAP2
GAAP
non-GAAP2
GAAP
non-GAAP2
GAAP
non-GAAP2
Revenue up 1% from 2020Revenue up 2% from 2020Operating income down $4.2B or 18% from 2020; 2021 operating margin at 25%Operating income down $2.2B or 9% from 2020; 2021 operating margin at 30%Diluted EPS down $0.08 or 2% from 2020Diluted EPS up $0.37 or 7% from 2020Operating cash flow down $5.4B or 15%Free cash flow down $9.9B or 47%
Higher revenue in CCG, IOTG, Mobileye, and PSG, partially offset by declines in DCG and NSG. Non-GAAP revenue excludes NSG.
Higher gross margin from higher platform and adjacent1 revenue and Corporate revenue from a prepaid customer supply agreement, partially offset by a Corporate charge related to VLSI litigation, higher period charges from ramp of process technology, and higher operating expenses on increased R&D investment. Non-GAAP operating income incrementally excludes, amortization of acquisition-related intangibles, restructuring and the charge related to VLSI litigation.
Lower operating income partially offset by equity investment gains, lower effective tax rate, and lower shares. Non-GAAP results incrementally exclude ongoing mark-to-market adjustments and tax impacts of non-GAAP adjustments.Lower operating cash flow driven by a decrease in net working capital
contributions and cash paid to settle a prepaid customer supply agreement in Q1 2021, partially offset by a McAfee special dividend received in Q3 2021. Free cash flow decreased due to lower operating cash flow and higher capital expenditures.
Fifty years ago, Robert NoyceInvesting in our IDM 2.0 strategy for the long term
To support our IDM 2.0 strategy, we are making significant capital investments to increase our manufacturing capacity and Gordon Moore founded Intel. In honoraccelerate our process technology roadmap, as well as increasing our investments in R&D. We believe these investments will position us for accelerating long-term revenue growth. We expect our long-term revenue outlook to accelerate to a 10% to 12% year-over-year growth rate by the end of our golden anniversary, we are embracing Noyce’s inspiring challenge, "Don'tfive-year horizon as supply normalizes and our investments add capacity and drive leadership products. We expect gross margins to be encumberedimpacted by history. Go off and do something wonderful.” We celebrated our heritageinvestments in capacity and the wonderful things we are doingacceleration of our process technology, resulting in expected non-GAAP gross margins percentages between 51% and 53%2 over the next several years before moving upward. We also expect our capital expenditures to create a bright futureincrease above historical levels for Intel and the world. Two years ahead of schedule, we announced that we have achievednext several years. We expect our goal of a U.S. workforce that reflectscash from operations to be strong, but our capital investments to pressure our free cash flow in the diversity of the available skilled labor market.short term.
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1 See "Our Products" within MD&A.
2 See "Non-GAAP Financial Measures" within MD&A.
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OUR STRATEGY
We are in the midst of one of the most significant transformations in our corporate history. Over the last five years, we’ve made key investments and decisions to enter data-rich markets and deploy our IP and manufacturing technologies to redefine and expand our target market. We have evolved from a PC-centric company with a server business, to a data-centric company with an expanding portfolio of technology solutions that address customer needs across platform, storage, connectivity, and software. This transformation is evidenced by our 2018 revenue, of which roughly half was earned from data-centric businesses, and the expansion of our TAM, which we last estimated at more than $300 billion1.
Our customers are looking for solutions that can process, analyze, store, and transfer data—turning it into actionable insights, amazing experiences, and competitive advantages. The Intel® architecture platform provides the foundation for new solutions that take advantage of this growth of data.
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MAKE THE WORLD'S BEST SEMICONDUCTORS
We make significant investments and innovations in our silicon manufacturing technologies and platforms. Our proprietary technologies make it possible to integrate products and platforms that address evolving customer needs and expand the markets we serve. Our innovation strategy includes investments in advanced manufacturing processes and packaging, architecture, interconnects, and embedded security features, as part of our efforts to be the leading end-to-end platform provider.
Realizing the economics of Moore’s Law has been and will continue to be a strategic priority, making possible the innovation of new high-performance products and improving user experience at exponential rates while balancing performance, cost, and power to meet our customers' needs. Unlike many semiconductor companies, we primarily develop and manufacture our products in our own facilities using our proprietary process technologies. We have the scale and expertise necessary to enable deep engagement with our customers, which provides us with a competitive advantage. Our manufacturing capital enables us to optimize performance, shorten time-to-market for new product introduction, and control essential elements of our supply chain. Sharing architectural innovation and IP enables us to spread our investments over a large manufacturing base of products, which reduces our costs and increases our return on capital.
LEAD THE AI AND AUTONOMOUS REVOLUTION
We are positioned to be a driving force of the AI and autonomous revolution. By striving to build the world’s best AI platform, our strategy is to meet the needs of our most innovative customers, to advance and accelerate the AI industry’s open software stacks, to deliver the best AI products, and to seed and drive the AI ecosystem. Mobileye’s EyeQ* family of SoCs is already the automobile industry’s leading solution for advanced driver assistance systems (ADAS). Mobileye is building on that leadership as the industry pursues higher levels of autonomy, developing Road Experience Management for real-time crowdsourced mapping, and the Responsibility Sensitive Safety model for autonomous vehicle safety. Customers use Intel® Xeon® processors for workloads such as image recognition, enhanced public security, and natural language processing, the foundation of the AI revolution. Intel® Nervana™ Neural Network Processors and Intel® Movidius™ Myriad™ Vision Processing Units (VPUs) provide a comprehensive suite of hardware and software technologies that deliver broad capabilities and support diverse approaches for AI, enabling our customers to infuse AI into everything they do.








1 Source: Intel calculated 2022 TAM derived from industry analyst reports and internal estimates.

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BE THE LEADING END-TO-END PLATFORM PROVIDER FOR THE NEW DATA WORLD
Growth in processing power and breakthroughs in connectivity, storage, memory, and algorithms have led to a new era of data-centric computing. We have an unparalleled product portfolio that spans the entire data-centric market and we are inventing new solutions in the highest growth areas by investing across six engineering pillars:
advanced manufacturing processes and packaging;
new architectures to speed up specialized tasks like AI and graphics;
super-fast memory;
interconnects;
embedded security features; and
common software to unify and simplify programming for developers across our compute roadmap.

We are making significant investments and pursuing innovations in these areas to drive leaps forward in technology and user experience, and meet our customers’ data needs.
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Enabling our customers to move faster, store more, and process everything is at the core of our strategy. Our customers’ appetite for high-performance computing is greater than ever and, in response, we continue to make investments in optimizing our Intel® Xeon® processors. 5G connectivity will transform industries from all business sectors, initiating ripples of impact that spur market growth and the global economy. We are collaborating with ecosystem and vertical industry partners to define, prototype, test, and deliver 5G standards and solutions. We are also unveiling innovative memory and storage solutions, including Intel® QLC 3D NAND and Intel® Optane™ memory, and providing data center products that are optimized to deliver world-class performance and drive lower total cost of ownership for cloud workloads. Our advancements in programmable solutions, such as FPGAs, can efficiently manage the changing demands of next-generation data centers and accelerate the performance of emerging applications.  
From end-to-end, our solutions help our customers stay ahead of their growing infrastructure demands by offering scale, innovation, and expertise from the edge to the cloud and back.
RELENTLESS FOCUS ON OPERATIONAL EXCELLENCE AND EFFICIENCY
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 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 production of products that delight our customers. Operational excellence helps us fund the expansion of our TAM through big-bet investments such as memory, 5G technology, and autonomous driving.

CONTINUE TO HIRE, DEVELOP AND RETAIN THE BEST, MOST DIVERSE AND INCLUSIVE TALENT
Andy Grove, former Intel CEO and Chairman, once said, “A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation.” At the core of our organization are highly skilled, diverse, and talented people capable of accelerating, as one team, in everything we do. Our rich and powerful culture sets a solid foundation based upon 50 years of invention; product leadership; purposeful leadership in corporate governance practices; and partnership with suppliers, customers, regulators, and local communities in the development and deployment of sustainable business practices. We are proud of our past and inspired by our employees who are rising to the challenge to transform our methods, focus, and values in a way that helps each person achieve their personal best in delighting our customers with compelling products, winning in dynamic and competitive markets, and making a positive impact on our communities.

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HOW WE ORGANIZE OUR BUSINESS
DATA-CENTRIC BUSINESSES1
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KEY PRODUCTS AND MARKETSFundamentals of Our Business
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KEY PRODUCTS AND MARKETS
Includes workload-optimized platforms and related products designed for cloud, enterprise, and communication infrastructure market segments.
Includes Intel® Optane™ technology and 3D NAND flash memory, primarily used in solid-state drives (SSDs).
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KEY PRODUCTS AND MARKETS
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KEY PRODUCTS AND MARKETS
Includes high-performance compute solutions for targeted verticals and embedded applications in market segments such as retail, manufacturing, health care, energy, automotive, and government.Includes programmable semiconductors, primarily field-programmable gate arrays (FPGAs), and related products for a broad range of markets, such as communications, data center, industrial, and military.
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HIGHLIGHTS
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New CEO and leadership team changes
Our data-centric businesses collectively grew 18% led bynew CEO Pat Gelsinger joined Intel on February 15, 2021 and made several senior leadership changes throughout the growthyear. We also named our new CFO David Zinsner in DCG, due in part to customer transitionJanuary 2022. Mr. Gelsinger returns to Intel,® Xeon® Scalable processors where he previously spent 30 years of his career, learned at the feet of Intel’s founders, and higher demand across cloudserved as our first Chief Technology Officer.
IDM 2.0
On March 23, 2021, we announced our "IDM 2.0" strategy, the next evolution of our IDM model. Our IDM 2.0 strategy combines our internal factory network, strategic use of external foundries, and communication service providers.our new IFS business to position us to drive technology and product leadership. To extend the growth,accelerate this strategy, we have new products, such as the Intel® Programmable Acceleration Card (Intel® PAC) with Intel® Stratix® 10 SX FPGA, and are now shipping the second generation Intel Xeon Scalable processor and Intel® Optane™ DC persistent memory, which combines the speed of traditional memory with the capacity and native persistence of storage. In addition, Mobileye continued to secure new design wins at major U.S. and global automakers and announced plans to commercialize MaaS.invest $20 billion to build two new fabs in Arizona, which we broke ground on in September, and we recently announced plans to invest more than $20 billion in the construction of two new leading-edge fabs in Ohio. We also announced approximately $10.5 billion total investment to equip our Rio Rancho, New Mexico and Malaysia sites for advanced packaging manufacturing. In August, the US Department of Defense announced that IFS will lead the first phase of its multi-phase RAMP-C program to facilitate the use of a domestic commercial foundry infrastructure.
OPPORTUNITIESProcess and packaging technology roadmaps
At the Intel Accelerated event in July 2021, we provided an update on our manufacturing process and packaging technology roadmaps. We have expandedintroduced future nodes, including Intel 3 and Intel 20A, and discussed future process and packaging technologies, such as our data-centric TAM to $200 billion2 with acquisitionsPowerVia, RibbonFET, Foveros Omni, and product innovations. Our broadened portfolio enablesFoveros Direct technologies. As part of the update, we also introduced a new opportunities for us and creates better synergistic valuenaming structure for our customers. For example, our product offerings for AI workloads reach frommanufacturing process nodes, which includes the cloudname changes summarized in "Key Terms" within Notes to the edge, and we are developing CPU, graphics processing unit (GPU), FPGA, and AI accelerator products to span inference and training AI workloads, while also pursuing ongoing software optimizations for AI.
CHALLENGES
Our 2018 revenue growth exceeded our expectation and put pressure on our factory network. We prioritized production on server and higher performance PC market segments, which consequently constrained supply in other areas, including IOTG. In addition, due to challenging market conditions, as well as continued investments in new memory products and in manufacturing capacity, the profitability of our memory business improved more slowly than expected in 2018. Our data center business was impacted by weakness in China demand and cloud market segment deceleration in Q4 2018.
Consolidated Financial Statements.
PC-CENTRIC
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KEY PRODUCTS AND MARKETSHIGHLIGHTS
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 WiFi and modem.
CCG had record revenue and operating income with three years of growth in a row by executing to our strategy. We announced additions to our 8th generation Intel® Core™ mobile processors, the first Intel® Core™ i9 processor for laptops, and the first 9th generation Intel® Core™ processor, i9-9900K, targeting the growing gaming market segment.
OPPORTUNITIES
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We are targeting an expanded $60 billion revenue TAM2, which is $25 billion higher than our traditional CPU TAM. This expanded opportunity includes markets such as memory, graphics, and connectivity, and is in addition to a $40 billion modem market where we are gaining share.
CHALLENGES
We are operating in an increasingly competitive environment and are focused on executing an annual cadence of leadership products. Strong demand across our product lines has resulted in tight supply, particularly in the entry-level PC market. We are making additional investments in our 14nm factory network and working with customers to align demand with available supply.

112th Gen Intel® Core™ processors
Data-centric businesses include DCG, IOTG, NSG, PSG, and all other businesses, including Mobileye.
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Source:We announced the 12th Gen Intel calculated 2022 TAM derived from industry analyst reports.Core processor family (Alder Lake), the first on the Intel 7 process, with real-world performance for enthusiast gamers and professional creators. Alder Lake is the first processor based on our performance hybrid architecture featuring a combination of Performance-cores, the highest performing CPU cores Intel has built, and Efficient-cores designed for scalable multi-threaded workload performance.

Ice Lake Server processors
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We launched the 3rd Gen Intel® Xeon® Scalable CPU (Ice Lake), which boasts up to 40 cores and delivers a significant increase in performance, on average, compared to the previous generation. The chips include a set of built-in security features, cryptographic acceleration, and AI.
5G network products
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We also introduced a broad, data-centric portfolio for 5G network infrastructure, including an SoC for wireless base stations, structured ASICs for 5G network acceleration, and a 5G network-optimized Ethernet NIC.
Intel® Arc™ graphics
  How
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We Organizerevealed the brand for our upcoming consumer high-performance graphics products: Intel Arc. The Arc brand will cover hardware, software, and services, and will span multiple hardware generations, with the first generation discrete GPU (Alchemist) based on the Xe HPG microarchitecture and shipping to OEMs in Q1 2022.
First closing of divestiture of NAND memory business
On December 29, 2021, subsequent to our fiscal 2021 year-end, we completed the first closing of the divestiture of our NAND memory business to SK hynix, Inc. (SK hynix). We intend to invest transaction proceeds to deliver leadership products and advance our long-term growth priorities.
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Our Strategy
The world is becoming more digital, and computing more pervasive. Semiconductors are the underlying technology powering the digitization of everything, which is being accelerated by four superpowers: ubiquitous compute, cloud-to-edge infrastructure, pervasive connectivity, and AI. Together these superpowers reinforce and amplify one another, and will exponentially increase the world’s need for computing by packing even more processing capability onto ever-smaller microchips. We intend to lead the industry by harnessing these superpowers for our customers’ growth and our own.
We are uniquely positioned with the depth and breadth of our software, silicon and platforms, and packaging and process technology with at-scale manufacturing. With these strengths and the tailwinds of the superpowers, our strategy to win is focused on three key themes: product leadership, open platforms, and manufacturing at scale.
Our Priorities
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OUR PRODUCTSProduct Leadership

Lead and democratize compute with Intel x86 and xPU. Our product offerings provide end-to-end solutions, scaling from edge computing to 5G networks, the cloud, and the emerging fields of AI and autonomous driving, to serve an increasingly smart and connected world.
At our core is the x86 computing ecosystem, which supports an extensive and deep universe of software applications, with billions of lines of code written and optimized for x86 CPUs. We continue to advance this ecosystem with x86 microarchitectures focused on performance, which push the limits of low latency and single-threaded application performance, and microarchitectures focused on efficiency, which are designed for computing throughput efficiency to enable scalable multithreaded performance. Our innovative new 12th Gen client processors (Alder Lake) combine both performance cores and efficient cores in a performance hybrid architecture that can direct workloads to the right core depending on whether they require higher performance or power efficiency. We can also combine these architectural advances with our innovations in process and packaging technology, as in our next-generation Intel Xeon data center CPU (Sapphire Rapids), which will utilize performance cores on multiple compute tiles connected through our EMIB packaging technology in a scalable design, rather than being built on a monolithic silicon die.
Beyond the CPU, we are delivering a growing family of xPU products, which encompass client and data center GPUs, IPUs, FPGAs, and other accelerators. The xPU approach recognizes that different workloads benefit from different computing architectures, and our broad portfolio helps meet our customers' increasingly diverse computing needs. As part of our strategy, we seek to develop and offer leading products across each of these architectural categories. Our vision is that our products will help enable a future in which every human can have one petaflop of computing power and one petabyte of data less than one millisecond away.
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Open Platforms
We aim to deliver open software and hardware platforms with industry-defining standards. Around the globe, companies are building their networks, systems, and solutions on open standards-based platforms. Intel has helped set the stage for this movement, with our historic contributions in developing standards such as CXL, ThunderboltTM, and PCle. We also contributed to the design, build, and validation of new open-source products in the industry such as Linux, Android, and others. The world's developers constantly innovate and expand the capabilities of these open platforms while increasing their stability, reliability, and security. In addition, microservices have enabled the development of flexible, loosely coupled services that are connected via APIs to create end-to-end processes. We use industry collaboration, co-engineering, and open-source contributions to accelerate software innovation. Through our oneAPI initiative, developers use a unified language across CPUs, GPUs, and FPGAs to cut down on development time and to enhance productivity. We also deliver a steady stream of open-source code and optimizations for projects across virtually every platform and usage model. We are committed to co-engineering and jointly designing, building, and validating new products with software industry leaders to accelerate mutual technology advancements and help new software and hardware work better together. Our commitment extends to developers through our developer-first approach based on openness, choice, and trust.
Manufacturing at Scale
In March 2021, we introduced IDM 2.0, the next evolution and expansion of our IDM model. IDM 2.0 is a differentiated strategy that combines three capabilities:
Internal factory network. Our global, internal factory network has been foundational to our success, enabling product optimization, improved economics, and supply resilience. We intend to remain a leading developer of process technology and a major manufacturer of semiconductors and will continue to build the majority of our products in our factories.
Strategic use of foundry capacity. We expect to expand our use of third-party foundry manufacturing capacity, which will provide us with increased flexibility and scale to optimize our product roadmaps for cost, performance, schedule, and supply. Our use of foundry capacity will include manufacturing for a range of modular tiles on advanced process technologies.
Foundry services.We intend to build a world-class foundry business to meet the growing global demand for semiconductors. We plan to differentiate our foundry offerings from those of others through a combination of leading-edge packaging and process technology, committed capacity in the US and Europe available for customers globally, and a world-class IP portfolio that will include x86 cores, as well as other ecosystem IP.
We believe our IDM 2.0 strategy will enable us to deliver leading process technology and products to meet growing demand, while providing superior capacity and supply resilience and an advantageous cost structure.
Delivering on our IDM 2.0 strategy and growth ambitions requires attracting, developing, and retaining top talent from across the world.
Fostering a culture of empowerment, inclusion, and accountability is also core to our strategy. We are committed to creating an inclusive workplace where the world’s best engineers and technologists can fulfill their dreams and create technology that improves the life of every person on the planet.

Growth Imperative
We are investing to position the company for accelerated long-term growth, focusing on both our core businesses and our growth businesses. In our client and server businesses, our strategy is to invest to strengthen the competitiveness of our product roadmap and to explore opportunities in both client and data center adjacencies. We believe we have significant opportunities to grow and gain share in graphics; mobility, including autonomous driving; networking and edge; and foundry services.
Focus on Innovation and Execution
We are focused on executing our product and process roadmap and accelerating our cadence of innovation. We have set a detailed process and packaging technology roadmap and announced key architectural innovations to further our goal of delivering leadership products in every area in which we compete. We are seeking to return our culture to its roots in innovation and execution, drawing on principles established by our former CEO Andy Grove that emphasize discipline and accountability.










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Our Capital
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.
CapitalStrategyValue
Financial
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Leverage financial capital to invest in ourselves and drive our IDM 2.0 strategy, supplement and strengthen our capabilities through acquisitions, and provide returns to stockholders.We strategically invest financial capital to create long-term value and provide returns to our stockholders.
Intellectual
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Invest significantly in R&D and IP to enable us to deliver on our accelerated process technology roadmap, introduce leading x86 and xPU products, and develop new businesses and capabilities.We develop IP to enable next-generation products, create synergies across our businesses, expand into new markets, and establish and support our brands.
Manufacturing
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Aligned with our IDM 2.0 strategy, invest to efficiently build manufacturing capacity to address growing global demand for semiconductors.Our geographically balanced manufacturing scope and scale enable us to provide our customers and consumers with a broad range of leading-edge products.
Human
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Continue to build a diverse, inclusive, and safe work environment to attract, develop, and retain top talent needed to build transformative products.Our talented employees enable the development of solutions and enhance the intellectual and manufacturing capital critical to helping our customers win the technology inflections of the future.
Social and Relationship
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Build trusted relationships for both Intel and our stakeholders, including employees, suppliers, customers, local communities, and governments.We collaborate with stakeholders on programs to empower underserved communities through education and technology, and on initiatives to advance accountability and capabilities across our global supply chain, including accountability for the respect of human rights.
Natural
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Continually strive to reduce our environmental footprint through efficient and responsible use of natural resources and materials used to create our products.With our proactive efforts, we seek to mitigate climate and water impacts, achieve efficiencies, and lower costs, and position us to respond to the expectations of our stakeholders.
2030 RISE Strategy and Corporate Responsibility Goals
Our commitment to corporate responsibility and sustainability leadership is deeply integrated throughout our business. We strive to create an inclusive and positive work environment where every employee has a voice and a sense of belonging, and we are proactive in our efforts to reduce our environmental footprint through efficient and responsible use of natural resources and materials.
We continue to raise the bar for ourselves and leverage our leadership position in the global technology ecosystem to make greater strides in corporate responsibility and apply technology to address social and environmental challenges. Through our RISE strategy and 2030 goals, we aim to create a more responsible, inclusive, and sustainable world, enabled through our technology and the expertise and passion of our employees. Our corporate responsibility strategy is designed to increase the scale of our work through collaboration with our stakeholders and other organizations; we know that acting alone, we cannot achieve the broad social impact to which we aspire. More information about our 2030 goals, including progress we have made toward achieving them, is included in our Corporate Responsibility Report1.








1 The contents of our Corporate Responsibility Report are referenced for general information only and are not incorporated by reference in this Form 10-K.

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Financial Capital
Our financial capital allocation strategy focuses on building stockholder value. Our allocation decisions are driven by our priorities to invest in the business, acquire and integrate businesses that complement our strategic objectives, and return cash to stockholders. As we invest in our IDM 2.0 strategy, our allocation priorities will shift more heavily toward investing in the business and away from share repurchases, as we plan our next phase of capacity expansions and the acceleration of our process technology roadmap. We will continue to look for opportunities to further our strategy through acquisitions and intend to maintain our dividend.
Cash from Operating Activities $B
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■ Capital Investment
■ Free Cash Flow1
Our Financial Capital Allocation Decisions Are Driven by Three Priorities
Invest in the Business
Our first allocation priority is to invest in R&D and capital spending to capitalize on the opportunity presented by the world's demand for semiconductors. We expect to increase our R&D investment and our capital investments in support of our IDM 2.0 strategy.
Acquire and Integrate
Our second allocation priority is to invest in and acquire companies that complement our strategic objectives. We look for acquisitions that supplement and strengthen our capital and R&D investments. Our key acquisitions over the last three years include our 2020 acquisition of Moovit to accelerate Mobileye’s mobility-as-a-service offering and our 2019 acquisition of Habana Labs to strengthen and extend the reach of our AI portfolio.
We take action when investments do not strategically align to our key priorities, and subsequent to our fiscal 2021 year-end, we completed the first closing of the divestiture of our NAND memory business. Additionally, in 2020 we completed the divestiture of the majority of Home Gateway Platform, a division of CCG, and in 2019 we divested the majority of our smartphone modem business.
Return Cash to Stockholders
Our third allocation priority is to return cash to stockholders. We achieve this through our dividend and share repurchase programs. We expect our future stock repurchases to be significantly below our levels from the last few years.
R&D and Capital Investments $BCash to Stockholders $B
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■ R&D
■ Logic
■ Memory2
■ Buyback
■ Dividend



1 See "Non-GAAP Financial Measures" within MD&A.
2 2021 capital investments in Memory are not presented due to the divestiture of the NAND memory business announced in October 2020. 2017-2020 capital investments presented include Memory.

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Intellectual Capital
Research and Development
R&D investment is critical to enable us to deliver on our accelerated process technology roadmap, introduce leading products, and develop new businesses and capabilities in the future. We seek to protect our R&D efforts through our IP rights and may augment R&D initiatives by acquiring or investing in companies, entering into R&D agreements, and directly purchasing or licensing technology.
Areas Key to Product Leadership
Every year we make significant investments in R&D and we have intensified our focus on areas key to product leadership. Our objective with each new generation of products is to improve user experiences and value through advances in performance, power, cost, connectivity, security, form factor, and other features. We also focus on reducing our design complexity, re-using IP, and increasing ecosystem collaboration to improve our efficiency.
Process and packaging. At our Intel Accelerated event in July 2021, we provided an update on our manufacturing process and packaging technology roadmaps. As part of the update, we also introduced a new naming structure for our manufacturing process nodes, which includes the name changes summarized in "Key Terms". In addition, we introduced future nodes and discussed future process and packaging technologies on our roadmap. Our updates included the following:
▪We introduced further optimizations to our Intel 7 process node, which is now in production for our 12th Gen Intel Core (Alder Lake) processors.
▪Intel 4 will make use of EUV to print incredibly small features using ultra-short wavelength light. Intel 4 will be used for our future Meteor Lake client processors.
▪Intel 3 will leverage further FinFET optimizations and increased EUV to deliver additional performance-per-watt and area improvements over Intel 4.
▪Intel 20A will follow Intel 3 and will introduce two breakthrough technologies: Ribbon FET and PowerVia. RibbonFET, Intel’s implementation of a gate-all-around transistor, will be our first new transistor architecture since we pioneered FinFET in 2011. The technology is expected to deliver faster transistor switching speeds while achieving the same drive current as multiple fins in a smaller footprint. PowerVia will be our unique industry-first implementation of backside power delivery, optimizing signal transmission by eliminating the need for power routing on the front side of the wafer.
▪Beyond Intel 20A, we are developing our Intel 18A node, with expected refinements to RibbonFET to deliver additional transistor performance improvements. We are also working to define, build, and deploy next-generation High Numerical Aperture EUV in our process technology roadmap.
▪Our future Foveros Omni advanced packaging technology will usher in the next generation of our 3D stacking Foveros technology, enabling us to mix multiple top die tiles with multiple base tiles across mixed fab nodes and giving us greater flexibility for disaggregated chip designs. With our future Foveros Direct technology, we will move to direct copper-to-copper bonding for low-resistance interconnects and blur the boundary between where the wafer ends and the package begins.


xPU architecture. The future is a diverse mix of scalar, vector, matrix, and spatial architectures deployed in CPU, GPU, accelerator, and FPGA sockets, enabled by a scalable software stack and integrated into systems by advanced packaging technology. We are building processors that span several major computing architectures, moving toward an era of heterogeneous computing:
▪CPU. We started shipping our 3rd Gen Xeon Scalable processors (Ice Lake) with the new Sunny Cove core, built-in AI acceleration, cryptographic acceleration, and advanced security capabilities. We also launched our 12th Gen Intel Core processors (Alder Lake), which will scale from thin and light laptops to enthusiast desktop and notebook platforms. They utilize the new breakthrough Performance-core (Golden Cove) and Efficient-core (Gracemont) microarchitectures and work with Intel® Thread Director for scheduling optimization.
▪GPU. We announced Alchemist, our first Intel Arc branded high-performance discrete GPU family of products focused on gaming and content creation, which began shipping to OEMs in Q1 2022. We also powered on Ponte Vecchio, our discrete GPU focused on high-performance computing applications, which delivers leading floating-point operations per second (FLOPS) and compute density to accelerate AI, high-performance computing, and advanced analytics workloads. Ponte Vecchio will be released in 2022 for HPC and AI markets.
▪Interconnect. Mount Evans, Intel’s first ASIC IPU, is designed to address the complexity of diverse and dispersed data centers. An IPU is designed to enable cloud and communication service providers to reduce overhead and free up performance for CPUs.
▪Matrix Accelerator. Habana Gaudi accelerators are at the forefront of AI solutions for data centers. Amazon Web Services launched the EC2 DL1 instance featuring Habana Gaudi in Amazon Elastic Compute Cloud for training deep learning models.




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Software.Software unleashes the potential of our hardware platforms across all workloads, domains, and architectures.
▪In 2021, oneAPI adoption expanded across the industry. oneAPI enables developers to build cross-architecture applications using a single code base across xPUs that take advantage of unique hardware features and lower software development and maintenance costs. Developers can choose the best architecture for the problem at hand without rewriting their entire code base, accelerating their time to value.
▪We seek to accelerate adoption of oneAPI and Intel software developer tools through diverse ecosystem activities including developer trainings, summits, centers of excellence, and access to Intel hardware and software through a developer cloud. The Intel® DevCloud for oneAPI hosts global users spanning AI, data science, high-performance computing, and media & graphics and other accelerated computing workloads.
▪We believe AI will be ubiquitous, and with our tools and the broad open software ecosystem, we are well-positioned to scale AI. We optimize for the most widely used AI frameworks and libraries, including TensorFlow, Pytorch, Scikit-learn, NumPy, XGBoost, and Spark, with certain optimizations delivering up to 10 to 100 times performance improvements to support end-to-end AI, as well as OpenVINOTM and oneAPI AI Analytics toolkits.
▪We seek to continually improve our BIOS and firmware in support of our client, data center, networking, and graphics products, including delivering simplified and cloud-optimized open firmware for data center customers through our Firmware Support Package and Minimum Platform Architecture.
IP Rights
We own and develop significant IP and related IP rights around the world that support our products, services, R&D, and other activities and assets. Our IP portfolio includes patents, copyrights, trade secrets, trademarks, mask works, and other rights. We actively seek to protect our global IP rights and to deter unauthorized use of our IP and other assets.
We have obtained patents in the US and other countries. Because of the fast pace of innovation and product development, our products are often obsolete before the patents related to them expire, and in some cases may be obsolete before the patents are granted. As we expand our product offerings into new areas, we also seek to extend our patent development efforts to patent such products. In addition to developing new technologiespatents based on our own R&D efforts, we may purchase or license patents from third parties.
The software that we distribute, including software embedded in our products, is entitled to copyright and other IP protection. To distinguish our products from our competitors' products, we have obtained trademarks and trade names for our products, and we maintain cooperative advertising programs with customers to promote our brands and to identify products containing genuine Intel components. We also protect details about our processes, products, and strategies as trade secrets, keeping confidential the information that we believe provides us with a competitive advantage.
Efforts to protect our IP can be difficult, particularly in countries that provide less protection to IP rights and in the absence of harmonized international IP standards. Competitors and others may already have IP rights covering similar products. There is no assurance that we will be able to obtain IP rights covering our own products, or that we will be able to obtain IP licenses from other companies on favorable terms or at all. For a discussion of IP-related risks, see "Risk Factors" within Other Key Information. While our IP rights are important to our success, our business as a whole is not significantly dependent on any single patent, copyright, or other IP right.
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"Here at Intel, we take pride in attracting some of the world’s best engineers, technologists, and innovators. We are advocates for a patent system that eliminates abuse by hedge funds and others who exploit weaknesses in the system to drive their profits at the expense of those of us who actually invent, create, and produce products that are central to the modern economy."

—Steve Rodgers, Executive Vice President and General Counsel
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Manufacturing Capital
Inspired by Moore's Law, a law of economics put forth by our co-founder Gordon Moore more than 50 years ago, we continuously work to advance the design and manufacturing of semiconductors to help address our customers' greatest challenges. This makes possible the innovation of new products as building blockswith higher performance while balancing power efficiency, cost, and size. We continue to work across our supply chain to minimize disruptions, improve productivity, and increase overall capacity and output to meet customer expectations. In 2021, our factories performed well in a highly dynamic environment, where we adapted to rapid demand shifts and industry component shortages affecting us and our customers.
Our IDM 2.0 strategy allows us to deliver leadership products through the use of internal and external capacity while leveraging our core strengths for growth via providing foundry services to others. IDM 2.0 combines three factors. First, we will continue to build the increasingly smartmajority of our products in Intel fabs. Second, we expect our use of third party foundry capacity to grow and connected world. These technologies and products are utilized as integrated solutionsto include manufacturing for a broad spectrumrange of markets.modular tiles on advanced process technologies. Third, we intend to build a world-class foundry business with IFS, which will combine leading-edge process and packaging technology, committed capacity in the US and Europe, and a world-class IP portfolio for customers, including x86 cores. During the year we began shipping packaging units for our first IFS customer, Amazon Web Services.
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“In alignment with our IDM 2.0 strategy, we are repositioning Intel for growth by increasing our investment in internal manufacturing, expanding our global capacity for supply chain resiliency, and delivering on world class manufacturing execution.”

—Keyvan Esfarjani, Senior Vice President and General Manager of Manufacturing, Supply Chain, and Operations
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"Process and packaging are at the very heart of Intel’s heritage and are the foundation of everything we build. With the roadmaps we unveiled this year, we plan to accelerate our rate of innovation to reach process performance-per-watt parity by 2024 and leadership by 2025, and to maintain advanced packaging leadership."

—Dr. Ann Kelleher, Executive Vice President and General Manager of Technology Development
Network and Supply Chain
Our global supply chain supports internal partners across architecture, product design, technology development, manufacturing and operations, sales and marketing, and business units, and our supply ecosystem comprises thousands of suppliers globally. Our mission is to enable product and process leadership, industry-leading total cost of ownership, and uninterrupted supply for our customers. In addition to our own manufacturing capacity, we continue to expand our use of third-party foundries.
The majority of our logic wafer manufacturing is conducted in the US. As of our fiscal 2021 year-end, we had ten manufacturing sites — six are wafer fabrication and four are assembly/test facilities. The following map shows these factory sites and the countries where we have a significant R&D and/or sales presence. In response to COVID-19, we maintained operational changes and measures to enable a continued safe environment for our employees and operation of our manufacturing sites.
Our manufacturing facilities are primarily used for silicon wafer manufacturing, assembling, and testing of our platform products. We operate in a network of manufacturing facilities integrated as one factory to provide the most flexible supply capacity, allowing us to better analyze our production costs and adapt to changes in capacity needs. Our new process technologies are transferred identically from a central development fab to each manufacturing facility. After transfer, the network of factories and the development fab collaborate to continue driving operational improvements. This enables fast ramp of the operation, fast learning, and quality control. We are expanding manufacturing capacity across multiple sites, including Arizona, Ireland, Israel, and Oregon. To accelerate our IDM 2.0 strategy, we announced plans to invest $20 billion to build two new fabs in Arizona, which we broke ground on in September, and we recently announced plans to invest more than $20 billion in the construction of two new leading-edge fabs in Ohio, while actively searching for additional manufacturing locations in Europe. Our plans include utilizing a "smart capital" strategy in which we focus first on aggressively building out fab shells, which are the smaller portion of the overall cost of a fab but have the longest lead time, giving us flexibility in how and when we bring additional capacity and tools online. We also announced approximately $10.5 billion total investment to equip our Rio Rancho, New Mexico and Malaysia sites for advanced packaging manufacturing.
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Note: The Dalian factory, presented above, was sold subsequent to year-end as part of the first closing of the divestiture of our NAND Memory business. See Note 10 : Acquisitions and Divestitures.
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Human Capital
Our human capital strategy is grounded in our belief that our people are fundamental to our success. Delivering on our IDM 2.0 strategy and growth ambitions requires attracting, developing, and retaining top talent from across the world. We are committed to creating an inclusive workplace where the world’s best engineers and technologists can fulfill their dreams and create technology that improves the life of every person on the planet. We invest in our highly skilled workforce of 121,100 people through creating practices, programs and benefits that support the evolving world of work and our employees’ needs.
Fostering a culture of empowerment, inclusion, and accountability is also core to our IDM 2.0 strategy. We are focused on reinvigorating our culture to strengthen our execution and accelerate our cadence of innovation. Our values—customer first, fearless innovation, results driven, one Intel, inclusion, quality, and integrity—inspire us and are key to delivering on our purpose. This year, we added a new value—results driven—as we seek to return to our roots of innovation and execution, making data-driven decisions quickly and setting disciplined goals that drive business results. All employees are responsible for upholding these values, the Intel Code of Conduct, and Intel's Global Human Rights Principles, which form the foundation of our policies and practices and ethical business culture.
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"At Intel we tackle hard problems, think boldly, and create technology that improves the life of every person on the planet. Our culture unleashes the diverse perspectives, experiences, and potential of our employees to drive innovation and business results for Intel and our customers."

—Christy Pambianchi, Executive Vice President and Chief People Officer
Talent Management
The digitization of everything is driving growth and global demand for semiconductors. Combined with the tightening labor market and economic recovery from COVID-19, this has driven a significant increase in competition throughout the industry to attract and retain talent – especially technical talent. In 2021, we intensified our efforts to continue to attract and retain talent, including introducing new employee referral programs, expanding wellness benefits and time off, heightening our focus on revitalizing our culture, and increasing mentoring in our technical community. In 2021, our undesired turnover rate1 was 5.6%, compared to 4.0% in 2020.
We invest significant resources to develop the talent needed to remain at the forefront of innovation and make Intel an employer of choice. We offer extensive training programs and provide rotational assignment opportunities. We evolved our performance management system to support our culture evolution and increase our focus on disciplined goal setting and results. Through our annual Employee Experience Surveys and Manager Development Feedback Surveys, employees can voice their perceptions of the company, their managers, their work experience, and learning and development opportunities.
Inclusion
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Diversity and inclusion are core to Intel's values and instrumental to driving innovation and positioning us for growth. Over the past decade, we have taken actions to integrate diversity and inclusion expectations into our culture, performance and management systems, leadership expectations, and annual bonus metrics. We are proud of what we have accomplished to advance diversity and inclusion, but we recognize we still have work to do, including beyond the walls of Intel. We also recognize the additional challenges that COVID-19 has presented to our employees, including women and individuals with disabilities. Our RISE strategy and 2030 goals set our global ambitions for the rest of the decade, including doubling the number of women in senior leadership; doubling the number of underrepresented minorities in US senior leadership; and embedding inclusive leadership practices across our business. Our goals also include increasing the percentage of employees who self-identify as having a disability to 10%; and exceeding 40% representation of women in technical roles, including engineering positions and other roles with technical job requirements. To drive accountability, we continue to link a portion of our executive and employee compensation to diversity and inclusion metrics.
We have committed our scale, expertise, and reach through our comprehensive RISE strategy to work with customers and other stakeholders to accelerate the adoption of inclusive business practices across industries. In 2021, we partnered with other technology companies to launch the Alliance for Global Inclusion to create and implement an Inclusion Index with unified goals and metrics. This collective effort will allow the industry to more clearly identify actions needed to advance progress on closing persistent gaps and advancing more inclusive practices in workplaces, industry, and society. We will also continue to collaborate on initiatives that expand the diverse pipeline of talent for our industry, advance social equity, make technology fully inclusive, and expand digital readiness for millions of people around the world.
PRODUCT LEADERSHIP CREATES ESSENTIAL VALUE FOR OUR CUSTOMERS
We focus on providing compelling user experiences by developing our next generation of products based on customer needs and expectations. We invest in product and process technologies to deliver higher performance and lower total cost of ownership by closely working with our customers and partners. By continuing to improve our products and expanding our product portfolio—including in adjacent products such as modem and memory, where we had significant growth this year—we were able to deliver more value to our customers.
WE HAVE A BROAD PRODUCT PORTFOLIO
From processing
1 Undesired turnover includes all regular Intel employees who voluntarily left Intel, but do not include Intel contract employees, interns, or employees who separated from Intel due to transferring, storing,divestiture, retirement, voluntary separation packages, death, job elimination, or redeployment.
2 Senior leadership refers to salary grades 10+ and analyzingequivalent grades. While we present male and female, we acknowledge this is not fully encompassing of all gender identities.
3 The term underrepresented minority (URM) is used to describe diverse populations, including Black/African American, Hispanic, and Native American employees in the US.
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Compensation and Benefits
We structure pay, benefits, and services to meet the varying needs of our employees. Our 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. Since 2019, we have achieved gender pay equity globally and we continue to maintain race/ethnicity pay equity in the US. We achieve pay equity by closing the gap in average pay between employees of different genders or race/ethnicity in the same or similar roles after accounting for legitimate business factors that can explain differences, such as location, time at grade level, and tenure. We have also advanced transparency in our pay and representation data by publicly releasing our broad product portfolio offers innovative solutionsEEO-1 survey pay data since 2019. We believe that our holistic approach toward pay equity, representation, and creating an inclusive culture enables us to cultivate a workplace that helps employees develop and progress in their careers at all levels. Though flexible work schedules are part of our existing total rewards package, the COVID-19 pandemic provided an opportunity to further reimagine how our employees work and collaborate. In designing the future of our workplace, we surveyed employees around the globe to inform our “hybrid-first” approach, where the majority of our employees will split their time between working remotely and in the office, with no company-wide mandate on the number of days per week employees should be on-site or how they should collaborate. Our goal is to enable remote and on-site work where it drives the best output, while ensuring our employees have equitable access to systems, resources, and opportunities that allow them to succeed.
Health, Safety, and Wellness
Our commitment in Intel's Environmental, Health, and Safety Policy is to provide a safe and injury-free workplace. We continually invest in programs designed to improve physical, mental, and social well-being. We provide access to a wide arrayvariety of customers.innovative, flexible, and convenient health and wellness programs, including on-site health centers. Throughout our response to COVID-19, our priority has remained protecting the health and safety of our employees. This includes mental health, as we aim to increase awareness of and support for mental and behavioral health. In support of our 2030 goals, we will continue to build our strong safety culture and drive global expansion of our corporate wellness program through employee education and engagement activities.
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Social and Relationship Capital
We are committed to engaging in corporate responsibility and sustainability initiatives that support our communities and help us develop trusted relationships with our stakeholders. Proactive engagement with our stakeholders and investments in social impact initiatives, including those aligned with the United Nations Sustainable Development Goals, advance our position as a leading corporate citizen and create shared value for Intel, our global supply chain, and our communities.
Economic and social. The health of our business and local economies depends on continued investments in innovation. We provide high-skill, high-paying jobs around the world. Many of these are manufacturing and R&D jobs located in our own domestic and international factories. We also benefit economies through our R&D ecosystem spending, sourcing activities, consumer spending by our employees, and tax payments. We make sizable capital investments and provide leadership in public-private partnerships to spur economic growth and innovation. We engage third-party organizations to conduct analyses of the economic impact of our operations, including a US impact study in 2021 that found that for every US Intel job, Intel's economic activity in the US indirectly supports an additional 13 jobs.
We stand at the forefront of new technologies that are increasingly being used to empower individuals, companies, and governments around the world to solve global challenges. We also aim to empower people through education and advance social initiatives to create career pathways into the technology industry. This has included our global Intel Digital Readiness Programs, such as AI for Youth and AI for Workforce, scaled in partnership with governments and institutions to empower individuals with digital readiness and AI skills. Additionally, we have invested in multi-year partnerships with historically Black colleges and universities in the US to increase the number of Black/African Americans who pursue electrical engineering, computer engineering, and computer science fields. Our employees and retirees share their expertise through volunteer initiatives in the communities where we operate, volunteering more than 1.71 million hours over the past two years. These efforts contribute to the 2030 goal we established last year to volunteer 10 million hours over a decade. COVID-19 presented challenges over the last two years for in-person volunteering, but we continued to see an outpouring of support from employees in 2021 for virtual volunteering, donations, and innovative technology projects to support our communities. In 2020 we announced the Pandemic Response Technology Initiative to combat COVID-19. We expanded the initiative in 2021 and renamed it the RISE Technology Initiative to reflect a broader platform for action. It provides an expanded channel to build deeper relationships with our customers and partners aligned with our corporate purpose and work to create shared value through our 2030 RISE strategy. Specifically, we are funding projects in areas that include using technology to improve health and safety; making technology more inclusive while expanding digital readiness; and carbon neutral computing to help address climate change.

Human rights commitment. We are committed to maintaining and improving processes to avoid complicity in human rights violations related to our operations, supply chain, and products. We have established an integrated approach to managing human rights across our business, including board-level oversight and the involvement of senior-level Management Review Committees. We also meet throughout the year with external stakeholders and experts on human rights to continue to inform and evolve our human rights policies and oversight processes. While we do not always know nor can we control what products our customers create or the applications end users may develop, we do not tolerate our products being used to violate human rights. Where we become aware of a concern that our products are being used by a business partner in connection with abuses of human rights, we restrict or cease business with the third party until we have high confidence that our products are not being used to violate human rights.

1 This is a preliminary estimate. The final number will be reported in our 2021-22 Corporate Responsibility Report, to be issued later in 2022.
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Supply Chain Responsibility
We actively manage our supply chain to help reduce risk, improve product quality, achieve environmental and social goals, and improve overall performance and value creation for Intel, our customers, and our suppliers. To drive responsible and sustainable practices throughout our supply chain, we have robust programs to educate and engage suppliers that support our global manufacturing operations. We actively collaborate with other companies and lead industry initiatives on key issues such as improving transparency around climate and water impacts in the global electronics supply chain and, as part of our RISE strategy, we are advancing collaboration across our industry on responsible minerals sourcing. Through these efforts we help set electronics industry-wide standards, develop audit processes, and conduct training.
Over the past decade, we have directly engaged with our suppliers to verify compliance and build capacity to address risks of forced and bonded labor and other human rights issues. We perform supplier audits and identify critical direct suppliers to engage through capability-building programs, which help suppliers build sustainability acumen and verify compliance with the Responsible Business Alliance and our Code of Conduct. We also engage with indirect suppliers through our programs on forced and bonded labor, responsible minerals, and supplier diversity. To achieve our 2030 RISE goals, we will significantly expand the number of suppliers covered by our engagement activities.
Our commitment to diversity and inclusion also extends to our suppliers. We believe a diverse supply chain supports greater innovation and value for our business. We have set additional spending targets with women-owned suppliers outside the US and with minority-owned suppliers globally to accelerate progress toward our goal to increase global annual spending with diverse suppliers by 100% to reach $2 billion in annual spending by 2030. Continuing in 2022, we will only retain or use outside law firms in the US that are above average on diversity for their equity partners. We are applying a similar rule to firms used by our tax department, including non-legal firms.
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Natural Capital
Driving to the lowest possible environmental footprint as we grow helps us create efficiencies, lower costs, and respond to the needs of our stakeholders. We invest in conservation projects and set company-wide environmental targets to drive reductions in greenhouse gas emissions, energy use, water use, and waste generation. We build energy efficiency into our products to help our customers lower their own emissions and energy costs, and we collaborate with policymakers and other stakeholders to use technology to address environmental challenges. Through our 2030 goals we will continue to drive to higher levels of operational efficiency, including a goal of a further 10% reduction in our carbon emissions on an absolute basis even as we continue to grow. In 2021, we continued to take action on emissions reduction strategies focused on emissions abatement, additional investments in renewable electricity, process and equipment optimization, and energy conservation. Our 2030 strategy and goals also focus on improving product energy efficiency and increasing our "handprint"—the ways in which Intel technologies can help others reduce their footprints, including Internet of Things solutions that enable intelligence in machines, buildings, supply chains, and factories, and make electrical grids smarter, safer, and more efficient.
Climate and Energy
We focus on reducing our own climate impact, and over the past two decades have reduced our direct emissions and indirect emissions associated with energy consumption. Through our 2030 goals we have committed to conserve an additional 4 billion kWh of energy over 10 years. We have conserved more than 310 million kWh1 of energy since 2020. We also continue to link a portion of our executive and employee performance bonus to our corporate sustainability metrics. In 2021, this included our target to save 125 million kWh of energy during the year. We also invest in green power and on-site alternative energy projects in support of our 2030 goal to achieve 100% renewable energy use across our global manufacturing operations. We have reached 81%1 renewable energy globally. We are committed to transparency around our carbon footprint and climate risk and use the framework developed by the TCFD to inform our disclosure on climate governance, strategy, risk management, and metrics and targets. For governance and strategy, we follow an integrated approach to address climate change, with multiple teams responsible for managing climate-related activities, initiatives, and policies. Strategies and progress toward goals are reviewed with senior executives and the Intel Board of Directors' Corporate Governance and Nominating Committee. We describe our overall risk management processes in our Proxy Statement, and describe our climate-related risks and opportunities in our annual Corporate Responsibility Report, the Intel Climate Change Policy, and "Risk Factors" within this Form 10-K. In addition to what is included within this Form 10-K, information about and progress toward our 2030 goals is included in our Corporate Responsibility Report. Our Corporate Responsibility Report also includes a mapping of our disclosure to the TCFD, the Sustainability Accounting Standards Board framework, and our CDP Climate Change Survey, all of which are available on our website.2









1 This is a preliminary estimate. The final number will be reported in our 2021-22 Corporate Responsibility Report, to be issued later in 2022.
2 The contents of our website and our Corporate Responsibility Report, Climate Change Policy, and CDP Climate Change Survey are referenced for general information only and are not incorporated by reference in this Form 10-K.
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Water Stewardship
Water is essential to the semiconductor manufacturing process. We use ultrapure water to remove impurities from our silicon wafers, and we use fresh and reclaimed water to run our manufacturing facility systems. Through our 2030 goals, we have committed to conserve an additional 60 billion gallons in this decade. As part of this commitment, we plan to achieve net positive water use globally. We have conserved 15.4 billion gallons1 of water and enabled restoration of 3.5 billion gallons1 of water since 2020. In 2021, we linked a portion of our executive and employee performance bonus to our targets to conserve 7.5 billion gallons of water in our operations and complete projects to restore more than 1.5 billion gallons to local watersheds.
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Circular Economy and Waste Management
We have long been committed to waste management, recycling, and circular economy strategiesthat enable the recovery and productive re-use of waste streams. Our 2030 goals include a target of zero total waste2 to landfill, as well as implementation of circular economy strategies for 60% of our manufacturing waste streams in partnership with our suppliers. This can include reuse of waste streams directly in our own operations or enabling reuse of our waste streams by other industries. Our 2030 goal of 60% will be challenging, given our projected operational growth and new waste streams, suppliers, and locations that will require new circular economy strategies. We continue to focus on opportunities to upcycle waste by working further on waste segregation practices and collaborating with our suppliers to evaluate new technologies for waste recovery.































'

1 This is a preliminary estimate. The final number will be reported in our 2021-22 Corporate Responsibility Report, to be issued later in 2022.
2 Intel defines zero waste as less than 1%.
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Value We Create
Each of our six forms of capital plays a critical role in our long-term value creation. We consider numerous indicators in determining the success of our capital deployment in creating value. Highlights of value created are as follows:
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1 This is a preliminary estimate. The final number will be reported in our 2021-22 Corporate Responsibility Report, to be issued later in 2022.
2 See "Non-GAAP Financial Measures" within MD&A.
Note: The Dalian factory was sold subsequent to year-end as part of the first closing of the divestiture of our NAND Memory business. See Note 10 : Acquisitions and Divestitures.
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Management's Discussion and Analysis
Our Products
Our product offerings provide end-to-end solutions, scaling from edge computing to 5G networks, the cloud, and the emerging fields of AI and autonomous driving. Products, such as our gaming CPUs, may be sold directly to end consumers, or they may be further integrated by our customers into end products such as notebooks and storage servers. Combining some of these products—for example, integrating FPGAFPGAs and memory with Intel® Xeon® processors in a data-centerdata center solution—enables incremental synergistic value and performance. We launched new products in 2021, such as the 12th Gen Intel Coreprocessors (Alder Lake), the first on the Intel 7 process, and 3rd Gen Intel Xeon Scalable processors (Ice Lake).
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Platform Products: Our platform products can be a CPU and chipset, an SoC, or a multichip package based on Intel® architecture that processes data and controls other devices in a system. The primary CPU products in CCG are our Intel Core and Intel Atom® processors, which include Intel Core processors designed specifically for notebook and desktop applications. We introduced our 12th Gen Intel Core desktop processors and additional 11th Gen Intel Core processors (Tiger Lake) this year. The primary CPU product in DCG is our Intel Xeon processor, which includes solutions for data center compute, networking, and the intelligent edge. Our latest Xeon processor, the 3rd Gen Xeon, launched this year. We sell Xeon, Intel Core, and Intel Atom processor products as part of our IOTG offerings.
Adjacent Products:Our non-platform, or adjacent, products can be combined with platform products to form comprehensive platform solutions to meet customer needs. These products are used in solutions sold through each of our businesses and include the following:
▪Accelerators—Silicon products that can operate alone or accompany our processors in a system, such as Habana Gaudi for DCG, FPGAs for PSG, VPUs for IOTG, and Mobileye EyeQ SoCs
▪Boards and Systems—Server boards and small form factor systems such as Intel® NUCs for CCG
▪Connectivity Products—Ethernet controllers and silicon photonics for DCG; and cellular modems, Wi-Fi, and Bluetooth® for CCG
▪Graphics— Discrete graphics products for CCG and DCG
▪Memory and Storage Products—NAND SSD products for NSG and Intel® OptaneTM memory products sold through DCG
OUR PRODUCTS PROVIDE END-TO-END SOLUTIONS
As the company transforms beyond a PC-centric company to address the needs of the new data-centric world, we have expanded our product offerings to provide end-to-end solutions, scaling from edge computing to the network, the cloud, and the emerging field of AI and autonomous driving. In 2018 we introduced the Intel® Neural Compute Stick 2 and new Mobileye EyeQ* SoC. Meanwhile, we continue to push the boundary of client computing with innovations, including new form factors (e.g., dual-screen 2-in-1s), new functionalities (e.g., cellular connectivities), and performance enhancements (e.g., Intel® Optane™ memory).
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“At Intel our customer first mindset means that we put customer needs at the center of our business. We are committed to our customers' success by delivering a portfolio of high quality products, performance, and experiences to solve the world’s most challenging problems."

—Michelle Johnston Holthaus, Executive Vice President and General Manager of the Sales, Marketing, and Communications Group
OUR CAPITAL

We deploy various forms of capital to execute our transformation strategy in a way that seeks to reflect our corporate values, delight our customers, and create value for our stockholders.

Our commitment to corporate responsibility creates value for Intel and our stockholders by helping us mitigate risks, reduce costs, build brand value, and identify new market opportunities. We set ambitious goals for our company and make strategic investments to advance progress in the areas of environmental sustainability, supply chain responsibility, diversity and inclusion, and social impact that benefit the environment and society.

We empower and invest in attracting and retaining talented employees who enable the development of solutions and enhance our intellectual and manufactured capital. Our effective utilization of natural resources and focus on corporate responsibility result in trusted relationships that support the growth of our business. Through these activities, we strive to develop the world's best semiconductors, deliver great customer experiences, efficiently manage our supply chain, improve the communities in which we operate, and, ultimately, generate financial capital that is reinvested in our business and returned to stockholders.
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DRIVERSSTRATEGYVALUE
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Cash flow and capital allocation strategy
Leverage financial capital to invest in the business, acquire and integrate strategic investments, and provide returns to stockholders in the forms of dividends and share repurchases.

We strategically invest financial capital to create value for our stockholders. Over the last five years, we:
- Generated $113 billion cash from operating activities
- Generated $59 billion in free cash flow1
- Returned $55 billion to stockholders.

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Research and development (R&D) and IP rightsInvest significantly in R&D to ensure our process and product technologies compete successfully as we pursue our strategy to make the world’s best semiconductors and realize new data-centric opportunities.We develop IP for our platforms to enable next-generation products, create synergies across our businesses, provide a higher return as we expand into new markets, and establish and support our brands.
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Capital assets and strategic supply chain investmentsInvest timely and at a level sufficient to meet customer demand for current technologies and prepare for future technologies.Our world-wide manufacturing scope and scale enable innovations to provide our customers and consumers with a broad range of leading-edge products in high volume.
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Employees and culture
Develop the talent needed to keep the company at the forefront of innovation and create a diverse, inclusive, and safe workplace.

We attract and retain talented and engaged employees who can deliver their workplace best every day and who create the intellectual capital we rely on to develop and advance our technologies and manufacturing.
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Supply chain responsibility and positive social impact
Build trusted relationships for both Intel and our stakeholders, including local communities, governments, suppliers, customers, and employees.

We collaborate on programs to empower underserved communities through education and technology, and on initiatives to advance accountability and capabilities across our global supply chain, including advancing respect for human rights.

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Resource efficiencyContinually strive to reduce our environmental footprint through efficient and responsible use of natural resources and materials used to create our products.
Our proactive efforts help us mitigate climate and water risk, achieve efficiencies, lower costs, and position us to respond to the needs and expectations of our stakeholders.
1
See "Non-GAAP Financial Measures" within Other Key Information.


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FINANCIAL CAPITAL18
Our financial capital allocation strategy focuses on building stockholder value. We do this by first investing in ourselves and growing our capabilities. We then look to supplement and strengthen our capabilities through acquisitions and strategic investments. And finally, we provide the return realized by these investments to our stockholders.
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CASH FROM OPERATING ACTIVITIES $B
How We Organize Our Business
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■Capital Investment
■Free Cash Flow1
OUR FINANCIAL CAPITAL ALLOCATION DECISIONS ARE DRIVEN BY THREE PRIORITIES
INVEST IN THE BUSINESS ACQUIRE AND INTEGRATE RETURN CASH TO STOCKHOLDERS
Our first priority is to invest in R&D and capital spending to strengthen our competitive position. We shifted our R&D focus as we transformed to a data-centric company, while efficiently maintaining our investment at approximately 20% of revenue. Our capital investment in logic (silicon wafer manufacturing of our platform products) and memory both increased in 2018 as we looked to improve supply of platform products and continued to ramp production capacity in our memory fab (Fab 68). We obtained customer prepayments of over $1.6 billion in 2018 and $1.1 billion in 2017, which helped to offset our investment in memory. Our second financial capital allocation priority is to invest in companies around the world that will complement our strategic objectives and stimulate growth of data-centric opportunities. We look for acquisitions that further leverage and strengthen our capital and R&D investments. In 2018, we completed various small acquisitions, while leveraging Altera and Movidius to partner with customers and expand the markets we serve. Mobileye achieved record revenue, various design wins, and announced the ability to retrofit existing vehicles to deliver full autonomy. Intel Capital investments also support our strategic objectives. Our third financial capital allocation priority is to return cash to stockholders. We achieve this through our dividend and share repurchase programs. During 2018, we paid $5.5 billion in dividends and increased our quarterly cash dividends by 10% from 2017. We also repurchased $10.7 billion in shares, up from 2017, and have reduced the level of diluted shares outstanding over time.
  Dividends Per Share  
Diluted Shares Outstanding
(In Millions)
       
  2018$1.20  
7%
CAGR		4,701
  2017$1.0775 4,835
  2016$1.04 4,875
         
R&D AND CAPITAL INVESTMENTS $BACQUISITIONSCASH TO STOCKHOLDERS $B
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% Intel RevenueKey Markets and Products
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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 and graphics.
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Includes workload-optimized platforms and related products designed for cloud service providers, enterprise and government, and communications service providers market segments.
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Includes high-performance compute solutions for targeted verticals and embedded applications in market segments such as retail, industrial, and healthcare.
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■ R&Dintc-20211225_g46.jpg
■Logic
■ Memory
— # of Acquisitions
■ Total Spent $B
■ Buyback
■Dividend
1
See "Non-GAAP Financial Measures" within Other Key Information.

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INTELLECTUAL CAPITAL
RESEARCH AND DEVELOPMENT
Every year we make a significant investment in R&D, as it is a critical factor in achieving our strategic objectives to make the world's best semiconductors, lead the AI and autonomous revolution, and provide leading end-to-end platform solutions. Successful R&D efforts can lead to new products and technologies, or improvements to existing ones, which we seek to protect through our IP rights. We may augment our R&D initiatives by investing in or acquiring companies or entering into R&D agreements with other companies, as well as by directly purchasing or licensing technology.
We have increased our investments in R&D in each of the last five years and intensified our focus on key priorities in product technology while exiting non-core businesses, such as our divestiture of Wind River Systems, Inc. (Wind River) during 2018.
Includes comprehensive solutions required for autonomous driving, including compute platforms, computer vision, and machine learning-based sensing, mapping and localization, driving policy, and active sensors in development, utilized for both Robotaxi and consumer level autonomy.
PRODUCT TECHNOLOGY
We are focusing our R&D activities on six areas of engineering to advance our product capabilities. Our goal is to improve user experiences and value at the pace of Moore's Law through advances in performance, power, cost, connectivity, security features, form factor, and other features with each new generation of products.
Process technology.While development of next-generation manufacturing processes remains a critical and fundamental area of research, we are also pursuing innovations in packaging technology to enable new approaches to chip design. In 2018, we announced a new 3D packaging technology called "Foveros" that allows for stacking of logic chips, enabling products where input/output (I/O), static random-access memory (SRAM), and power delivery circuits can be fabricated in a base die and high-performance logic "chiplets" can be stacked on top. Together with our Embedded Multi-die Interconnect Bridge (EMIB) technology, advanced packaging allows for new hybrid chip designs that can "mix and match" different technology IP blocks, which may be manufactured on different process nodes, into a single system-in-package, enabling new design flexibility and new device form factors.intc-20211225_g47.jpg
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“Foveros” 3D packaging technology
Architecture.We are designing products for four major computing architectures—scalar (CPU products), vector (GPU products), matrix (AI accelerator products), and spatial (FPGA products)—as we move toward a model of providing multiple "xPU" compute platforms for a more diverse era of computing. In 2018, we announced "Sunny Cove," our next-generation CPU microarchitecture, with architectural extensions designed for special-purpose computing tasks such as AI and cryptography, among other features. We are also continuing development on our first discrete GPU.
Memory.With our Intel® 3D NAND and Intel® Optane™ technologies, we are developing products to disrupt the memory and storage hierarchy. We are shipping our Intel® Optane™ DC Persistent Memory, which combines memory-like performance with the larger capacity and persistence of storage, bringing more data closer to the CPU to help improve processing of big data sets like those used in AI and large databases. Our QLC 3D NAND technology allows users to move more data from hard disks to SSDs, giving them faster access to their data.
Interconnect.We have a broad portfolio of interconnect solutions, ranging from silicon to the data center to wireless. Our silicon photonics technology integrates lasers into silicon to create high-speed optical connections that can help remove networking bottlenecks in the data center. We are driving the 5G transition by offering products that communications service providers use to transform their networks for 5G, as well as through development of 5G modems.
Security technologies.We have made significant investments in security technologies, and built-in security features are integrated into our design process and roadmap. In the first half of 2018, we created the Intel Product Assurance and Security Group to serve as a center for security research across our products and businesses, not only to address the security issues of today, but also to monitor the evolving threat landscape and seek to continuously improve our product security in the years ahead.
Software.Software plays a critical role in unlocking the performance potential of our hardware products. Our vision is to unify our software abstractions across all of our xPU platforms. We are developing a project called OneAPI to simplify programming for developers across our CPU, GPU, FPGA, AI and other accelerator products, providing a unified portfolio of developer tools for mapping software to the hardware that can best accelerate the code.
IP RIGHTS
We own and develop significant IP and related IP rights around the world that relate to our products, services, R&D, and other activities and assets. Our IP portfolio includes patents, copyrights, trade secrets, trademarks, maskwork, and other rights. We actively seek to protect our global IP rights and to deter unauthorized use of our IP and other assets. For a detailed discussion of our IP rights, see "Intellectual Property Rights and Licensing" within Other Key Information.

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MANUFACTURED CAPITAL
We are an integrated device manufacturer (IDM). Unlike many other semiconductor companies, we primarily design and manufacture our products in our own manufacturing facilities. We see our in-house manufacturing as one of our most critical forms of capital and an important advantage.
MANUFACTURING PROCESS TECHNOLOGY
We continue to develop new generations of manufacturing process technology as we seek to realize the benefits from Moore’s Law, a law of economics predicted by Intel’s co-founder Gordon Moore more than 50 years ago. Realizing Moore’s Law results in economic benefits as we are able to either reduce a chip's cost as we shrink its size or increase functionality and performance of a chip while maintaining the same cost with higher density. This makes possible the innovation of new products with higher performance while balancing power efficiency, cost, and size to meet customers' needs.
As of the end of 2018, our platform products were manufactured on 300mm wafers, with the majority manufactured using our 14nm process node, and we are currently ramping our next-generation 10nm process node. We have lengthened our utilization of our 14nm process to meet an annual cadence of product introductions while developing 10nm process technology. Over the course of our 14nm process generation, we have achieved significant product performance improvement. We expect the same trend of utilizing a process node for multiple waves of products to continue as we ramp 10nm.
With our 10nm process technology, we are striving for an aggressive density improvement target, beyond the density scaling we delivered with 14nm. We have experienced challenges associated with 10nm development and implementation, and announced in 2018 that volume production on our 10nm products would be delayed from the second half of 2018 into 2019. We have made good progress on improving 10nm yields in 2018, and we continue to expect volume client systems on retail shelves for the 2019 holiday season, with data center products to follow in 2020.
FACTORY NETWORK AND SUPPLY CHAIN
The map marks our manufacturing facilities and their primary functions, as well as the countries where we have a significant R&D or sales and marketing presence.

Approximately half of our wafer manufacturing is conducted within the U.S. We incur factory start-up costs as we ramp our facilities for new process technologies. We continued to ramp the 10nm process node in our Oregon and Israel locations and to expand our memory fab, Fab 68. Memory investments represented approximately 20% of total capital spending for 2018.


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Our manufacturing facilities are primarily used for silicon wafer manufacturing of our platform and memory products. These facilities are built following a “copy exactly” methodology, whereby new process technologies are transferred identically from a central development fab to each manufacturing facility. This enables fast ramp of the operation as well as better quality control. These wafer fabs operate in a network of manufacturing facilities integrated as one factory to provide the most flexible supply capacity, allowing us to better analyze our production costs and adapt to changes in capacity needs.
We use a multi-source strategy for our memory business to enable a robust and flexible supply chain. Throughout 2018, we increased the memory capacity in Fab 68, where we ramped 3D NAND production. In addition, we have a supplemental supply agreement with Micron Technology, Inc. (Micron), as well as capacity from our joint venture, IM Flash Technologies, LLC (IMFT) factory in Lehi, Utah. In January 2019, Micron called our interest in IMFT. The IMFT agreement provides for supply for up to one year after the close of the transaction.
We use third-party foundries to manufacture wafers for certain components and leverage subcontractors to augment capacity to perform assembly and test in addition to our in-house manufacturing, primarily for chipsets and adjacent products.

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HUMAN CAPITAL
Given the highly technical nature of our business, our success depends on our ability to attract and retain talented and skilled employees to create the technology of the future and delight our customers. Our global workforce of 107,400 is highly educated, with approximately 85% of our people working in technical roles. We invest in creating a diverse, inclusive, and safe work environment where our employees can deliver their workplace best every day. This environment fosters a rich and powerful culture that allows us to make a profound impact on the world.
"In 2018, we met our U.S. diversity and inclusion goal—two years ahead of schedule. We are proud of our progress but not satisfied. We view diversity and inclusion as a business imperative that drives innovation and future growth. Every voice matters."

—Barbara Whye, Intel’s Chief Diversity and Inclusion Officer and Vice President of Human Resources
All employees are responsible for upholding the Intel Values, Intel Code of Conduct, and Intel Global Human Rights Principles, which form the foundation of our policies and practices. We also place value on providing a wide range of opportunities to support the ongoing career development of employees. For over a decade, we have tracked and publicly reported on key human capital metrics, including workforce demographics, diversity and inclusion data, turnover, and training data.
DIVERSITY AND INCLUSION
Building an inclusive workforce, industry, and ecosystem is critical to helping us drive our business forward. We committed $300 million to advance diversity and inclusion in our workforce and in the technology industry, and met our goal to achieve full representation of women and underrepresented minorities in our U.S. workforce in 2018—two years ahead of schedule. We have a long-standing commitment to inclusive workplace policies. For example, to help ensure employee concerns are openly and transparently resolved, Intel does not seek arbitration of sexual harassment and other employment claims.
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GROWTH AND DEVELOPMENT
We invest significant resources to develop the talent needed to keep the company at the forefront of innovation and make Intel an employer of choice. We deliver training annually and provide rotational assignment opportunities. During 2017 and 2018, we trained our managers in inclusive management practices. Over the past five years, our undesired voluntary turnover rate has been below 5%.
COMMUNICATION AND ENGAGEMENT
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; quarterly Organizational Health Polls; 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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COMPENSATION AND BENEFITS
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, a popular Employee Stock Purchase Plan, healthcare and retirement benefits, paid time off, flexible work schedules, sabbaticals, fertility assistance, and on-site services. For more than a decade, we’ve performed an annual compensation analysis in the U.S. to ensure pay equity by gender and race/ethnicity. In 2018, we began globalizing our analytics and recently announced that we’ve achieved gender pay equity globally.
HEALTH, SAFETY, AND WELLNESS
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 employee health and wellness programs, including on-site health centers.

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SOCIAL AND RELATIONSHIP CAPITAL
We are committed to operating with transparency, and through open and direct communication, we work to develop trusted relationships with all stakeholders, including employees, customers, suppliers, governments, and communities. We also empower our employees to give back to the communities where we operate and engage them in corporate responsibility and sustainability initiatives. Our commitment to stakeholder collaboration and investments in social impact initiatives, including support of the United Nations Sustainable Development Goals, has resulted in our reputation as a leading corporate citizen, which has created value for Intel in terms of social license to operate and a positive operating environment. Each year, we receive third-party recognitions for our corporate responsibility leadership and ethical business practices. In 2018, recognitions included the Fortune 2018 Change the World List, Ethisphere’s World’s Most Ethical Companies, and Forbes/Just Capital’s America’s Most “Just” Companies.
ECONOMIC IMPACT


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The health of our company and local economies depend on continued investments in innovation. We provide high-skill, high-paying jobs at Intel sites around the world and also impact economies through our R&D ecosystem spending, sourcing activities, consumer spending by our employees, and tax revenue. Many of these are manufacturing and R&D jobs located in our own domestic and international factories. In addition, we make sizable capital investments and provide leadership in public-private partnerships to spur economic growth and innovation.
SOCIAL IMPACT
We are at the forefront of new technologies—such as AI, autonomous driving, and 5G wireless broadband—that are increasingly being used to empower individuals, companies, and governments around the world to solve major societal challenges. Simultaneously, we are empowering people through education and advancing social impact initiatives, helping us build trust with key external stakeholders and support the interests of our employees. Through the Intel® She Will Connect program, we have collaborated with global and local partners to empower millions of women and girls through technology skills training. Our employees actively share their expertise and skills through technology-related volunteer initiatives, and over the past 10 years have contributed more than 10 million hours of service in the communities where we operate. In celebration of our 50th anniversary, we set a goal to have 50,000 employees donate 1 million volunteer hours during 2018. We exceeded the goal with more than 68,000 employees contributing approximately 1.5 million hours.
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SUPPLY CHAIN RESPONSIBILITY
Actively managing our supply chain creates business value for Intel and our customers by helping us reduce risks, improve product quality, achieve environmental and social goals, and raise the overall performance of our suppliers. Over the past five years, we have completed more than 500 supplier audits using the Responsible Business Alliance Code of Conduct standard and have expanded training and capacity-building programs with our suppliers. We actively collaborate with others and lead industry initiatives on key issues such as advancing responsible minerals sourcing, addressing risks of forced and bonded labor, and improving transparency around climate and water impacts in the global electronics supply chain. We also continue to work toward our goal of reaching $1 billion in annual spending with diverse-owned suppliers by 2020, and are investing in programs to create new career pathways into the technology industry.


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Includes memory and storage products like Intel 3D NAND technology, primarily used in SSDs.
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NATURAL CAPITAL
Driving to the lowest environmental footprint possible helps us achieve efficiency, lower costs, and respond to the needs of our customers and community stakeholders. We invest in conservation projects and set company-wide environmental targets, seeking to drive reductions in greenhouse gas emissions, energy use, water use, and waste generation. We focus on building energy efficiency into our products to help our customers lower their own emissions and energy costs. We also collaborate with policymakers and other stakeholders to identify opportunities to apply technology to environmental challenges such as climate change and water conservation.

CLIMATE AND ENERGY
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We focus on reducing our own direct climate “footprint” and over the past two decades have reduced our direct emissions and electricity generated emissions. We also continue to be one of the largest voluntary corporate purchasers of green power. Since 2012, we have invested more than $200 million in energy conservation projects in our global operations, resulting in cumulative savings of more than 4 billion kilowatt hours and cost savings of approximately $500 million through the end of 2018. We also focus on increasing our “handprint”—the ways in which Intel technologies can help others reduce their footprints, and collaborate on shaping public policy responses to climate change, both at the international level and in the countries and regions where we operate.
GREENER BUILDINGS
Our engineers have long incorporated green design standards and concepts into the new construction and renovation of our facilities. We continue to be on track to meet our goal to design all new buildings to a minimum Leadership in Energy and Environmental Design (LEED) Gold certification, and to date have achieved LEED certification for more than 17 million square feet, or approximately 26% of our total operational space. The Internet of Things is also expanding opportunities in the area of green buildings, including smart building energy management systems. Working with ecosystem partners, we are advancing solutions in this area, as well as incorporating these technologies into our own green building strategies. For example, one of our newest buildings, an office building in Bangalore, India that received LEED Platinum certification, is equipped with more than 9,000 sensors and has 50% lower energy demand compared to most traditional office buildings in the area.
WASTE MANAGEMENT AND RECYCLING
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In each of the past five years, we have recycled more than 84% of the non-hazardous waste generated in our global operations and continue to work toward our 2020 goals of recycling 90% of our non-hazardous waste and sending zero hazardous waste to landfills. Our aim is to continue to invest in reducing the amount of waste we generate while increasing the amount recycled.

WATER STEWARDSHIP
Water is essential to the semiconductor manufacturing process. We use ultrapure water to remove impurities from our silicon wafers, and we use industrial and reclaimed water to run our manufacturing facility systems. Over the last two decades, our sustainable water management efforts and partnerships have enabled us to conserve billions of gallons of water and we return approximately 80% of our water back to our communities. In 2018, we continued to make progress toward our goal to restore 100% of our global water use by 2025 through funding collaborative community-based projects that will restore water in amounts equivalent to what our business consumes.
SUPPLIER ENVIRONMENTAL IMPACT
We also partner with our suppliers to manage their environmental impact, which in turn reduces our own environmental impact, lowers supply chain risk, and can decrease costs. In 2018, we again attained a Leadership “A” rating on Supplier Engagement from CDP (which evaluates global companies on their environmental disclosure) for our work to encourage our suppliers to increase the level of transparency on their climate and water footprints.

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STOCKHOLDER RETURN
Through attention to constant improvement, we strive for our capital to work together in a manner consistent with our focus on long-term value creation. Long-term total stockholder return provides one measure of value creation, though we also consider other indicators of success for our deployment of capital, such as diversity advancement for our human capital. The stock performance graph and table that follow compare the cumulative total stockholder return on Intel's common stock with the cumulative total return of the Dow Jones U.S. Technology Index*, the Standard & Poor’s 100 Stock Index (S&P 100 Index*), the Standard & Poor’s 500 Stock Index (S&P 500 Index*), the Standard & Poor’s 500 IT Stock Index (S&P 500 IT Index*), and the PHLX Semiconductor Sector Index (SOX Index*)1 for the five years ended December 29, 2018. The cumulative returns shown on the graph are based on Intel's fiscal year.

Comparison of Five-Year Cumulative Return for Intel,
the Dow Jones U.S. Technology Index, S&P 100 Index, S&P 500 Index, S&P 500 IT Index, and SOX Index
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Years Ended Dec 28,
2013		 Dec 27,
2014		 Dec 26,
2015		 Dec 31,
2016		 Dec 30,
2017		 Dec 29,
2018
Intel Corporation $100
 $151
 $145
 $156
 $204
 $211
Dow Jones U.S. Technology Index $100
 $123
 $126
 $143
 $196
 $193
S&P 100 Index $100
 $114
 $117
 $129
 $157
 $150
S&P 500 Index $100
 $116
 $117
 $130
 $158
 $150
S&P 500 IT Index $100
 $123
 $128
 $145
 $201
 $199
SOX Index $100
 $133
 $131
 $179
 $252
 $235
1
The graph and table assume that $100 was invested on the last day of trading for the fiscal year ended December 28, 2013 in Intel's common stock, the Dow Jones U.S. Technology Index, S&P 100 Index, S&P 500 Index, S&P 500 IT Index, and SOX Index, and that all dividends were reinvested. The Dow Jones U.S. Technology Index was presented as a comparison in the 2017 Form 10-K stock performance graph as a peer index. We have added three indices that we consider more representative than the Dow Jones U.S. Technology Index: the S&P 100 Index, which includes a more diversified group of companies across major industrial sectors; the S&P 500 IT Index, which represents large capitalization IT industry performance; and the SOX Index, which more precisely represents overall semiconductor industry performance.



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WHO MANAGES OUR BUSINESS
EXECUTIVE OFFICERS OF THE REGISTRANT
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AGEIncludes programmable semiconductors, primarily FPGAs and structured ASICs, and related products for communications, cloud and enterprise, and embedded market segments.OFFICE(S)
Andy D. Bryant
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68Chairman of the Board
Dr. Venkata S.M. Renduchintala53Group President, Technology, Systems Architecture and Client Group; Chief Engineering Officer
Steven R. Rodgers53Executive Vice President; General Counsel
Navin Shenoy45Executive Vice President; General Manager, Data Center Group
Robert H. Swan58Chief Executive Officer
Todd M. Underwood49Interim Chief Financial Officer; Vice President of Finance and Director, Corporate Planning and Reporting
Andy D. Bryanthas been Chairman of our Board of Directors since May 2012. Mr. Bryant served as Vice Chairman of the Board of Directors of Intel from July 2011 to May 2012. From 2007 to 2012, Mr. Bryant served as Chief Administrative Officer. Mr. Bryant joined Intel in 1981 and served in a number of executive roles at the company. He was Executive Vice President, Technology, Manufacturing, and Enterprise Services from 2009 to 2012. Mr. Bryant previously served as Executive Vice President, Finance and Enterprise Services from 2007 to 2009; Executive Vice President, Chief Financial and Enterprise Services Officer from 2001 to 2007; Senior Vice President, Chief Financial and Enterprise Services Officer from 1999 to 2001; Senior Vice President, Chief Financial Officer from January 1999 to December 1999; and Vice President, Chief Financial Officer from 1994 to 1999. Mr. Bryant also serves on the board of directors of Columbia Sportswear Company and McKesson Corporation.
Dr. Venkata S.M. (“Murthy”) Renduchintala joined Intel in November 2015 and serves as Group President of our Technology, Systems Architecture and Client Group (TCSG) and Chief Engineering Officer. In this role, Dr. Renduchintala oversees Intel's labs, technology development, manufacturing, and systems architecture engineering teams, as well as our client computing and connectivity business. His TCSG organization is responsible for aligning technology, engineering, product design, and process development across all our businesses and for providing business and strategic direction for our client and connectivity offerings. Dr. Renduchintala joined Intel as Executive Vice President and President, Client and Internet of Things Businesses and System Architecture Group, which expanded into the TSCG organization in 2018, and was named Group President and Chief Engineering Officer in April 2017. From 2004 to 2015, Dr. Renduchintala held various senior positions at Qualcomm Incorporated, most recently as Co-President of Qualcomm CDMA Technologies from June 2012 to November 2015 and Executive Vice President of Qualcomm Technologies Inc. from October 2012 to November 2015. Before joining Qualcomm, Dr. Renduchintala served as Vice President and General Manager of the Cellular Systems Division of Skyworks Solutions Inc./Conexant Systems Inc. and he spent a decade with Philips Electronics, where he held various positions, including Vice President of Engineering for its consumer communications business. Dr. Renduchintala also serves on the board of directors of Accenture plc.
Steven R. Rodgershas been our Executive Vice President and General Counsel since January 2017 and oversees our legal, government, human resources, and China groups. He previously led our legal and government groups as Senior Vice President and General Counsel from January 2015 to January 2017 and as Corporate Vice President and General Counsel from June 2014 to January 2015. Mr. Rodgers joined Intel in 2000 and has held a number of roles in our legal department, including as Corporate Vice President and Deputy General Counsel from January 2014 until his appointment as Intel's fifth General Counsel in June 2014. Prior to joining Intel, Mr. Rodgers was a litigation partner at the firm of Brown & Bain, P.A.
Navin Shenoyhas been Executive Vice President and General Manager of the Data Center Group since May 2017. In this role, he oversees our Data Center Group, Internet of Things Group, and Programmable Solutions Group and leads strategy and product development for many of our data-centric offerings, including server, network, storage, AI, Internet of Things, and FPGA products, across a range of use cases that include cloud computing, virtualization of network infrastructure, and AI adoption. From May 2016 to May 2017, Mr. Shenoy was Senior Vice President and General Manager of the Client Computing Group. From April 2012 to April 2016, he served as General Manager of the Mobility Client Platform Division, as Vice President from April 2012 until December 2014 and Corporate Vice President from January 2015 to May 2016. From October 2007 to April 2012, Mr. Shenoy served as Vice President and General Manager of our Asia-Pacific business. Mr. Shenoy joined Intel in 1995.
Robert ("Bob") H. Swan was appointed our Chief Executive Officer and a member of our Board of Directors on January 30, 2019. Mr. Swan had served as our interim Chief Executive Officer since June 2018 and has been our Executive Vice President, Chief Financial Officer since joining Intel in October 2016. As CFO, he oversees Intel’s global finance organization—including finance, accounting and reporting, tax, treasury, internal audit, and investor relations—IT, Intel Capital, and our corporate strategy office. From September 2015 to September 2016, Mr. Swan served as an Operating Partner at General Atlantic LLC, a private equity firm. He served as Senior Vice President, Finance and Chief Financial Officer of eBay Inc. from March 2006 to July 2015. Previously, Mr. Swan served as Executive Vice President, Chief Financial Officer of Electronic Data Systems Corporation, Executive Vice President, Chief Financial Officer of TRW Inc., as well as Chief Financial Officer, Chief Operating Officer, and Chief Executive Officer of Webvan Group, Inc. Mr. Swan began his career in 1985 at General Electric, serving for 15 years in numerous senior finance roles. Mr. Swan also serves on the board of directors of eBay.
Todd M. Underwood was appointed our interim Chief Financial Officer as of January 31, 2019. Since August 2016, Mr. Underwood has been our Vice President of Finance and Director, Corporate Planning and Reporting, with responsibility for leading our financial planning processes, management reporting, and quarterly earnings process. From June 2015 to August 2016, he served as Vice President of Finance and Co-Executive-in-Residence with responsibility for integration activities of Intel’s acquisition of Altera. Mr. Underwood served as Vice President of Finance for the Mobile and Communications Group from January 2012 to June 2015. Prior to that, he served as Director of Finance for Intel Capital from June 2008 to January 2012. Mr. Underwood joined Intel in 1992.








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MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)
Five years ago, we set out a strategy to transform from a PC-centric to a data-centric company. Our 2018 results serve as a strong proof point that our strategy is working and our transformation is well underway. We achieved record revenue and earnings per share (EPS), driven by strong business performance, continued operating leverage, and a lower tax rate. Revenue from our data-centric businesses collectively increased by double digits. Our PC-centric business grew above our expectations and continued to be a source of profit, cash flow, scale, and intellectual property (IP). While we have had delays in implementing our 10 nanometer (nm) manufacturing process technology, we have continued to innovate in our 14nm products, introducing leadership products that deliver more value to our customers. We've expanded beyond PC and server businesses with significant growth in adjacent products, and gained share in an expanded $300 billion TAM1. Our employees are executing to our strategy by developing compelling technology and delivering innovative products to our customers, enabling strong financial growth. For key highlights of the results of our operations, see "A Year in Review" within Fundamentals of Our Business.
Years Ended
(In Millions, Except Per Share Amounts)		 December 29, 2018 December 30, 2017 December 31, 2016
 Amount 
% of Net
Revenue
 Amount 
% of Net
Revenue
 Amount 
% of Net
Revenue
Net revenue $70,848
 100.0 % $62,761
 100.0 % $59,387
 100.0 %
Cost of sales 27,111
 38.3 % 23,663
 37.7 % 23,154
 39.0 %
Gross margin 43,737
 61.7 % 39,098
 62.3 % 36,233
 61.0 %
Research and development 13,543
 19.1 % 13,035
 20.8 % 12,685
 21.4 %
Marketing, general and administrative 6,750
 9.5 % 7,452
 11.9 % 8,377
 14.1 %
Restructuring and other charges (72) (0.1)% 384
 0.6 % 1,744
 2.9 %
Amortization of acquisition-related intangibles 200
 0.3 % 177
 0.3 % 294
 0.5 %
Operating income 23,316
 32.9 % 18,050
 28.8 % 13,133
 22.1 %
Gains (losses) on equity investments, net (125) (0.2)% 2,651
 4.2 % 506
 0.9 %
Interest and other, net 126
 0.2 % (349) (0.6)% (703) (1.2)%
Income before taxes 23,317
 32.9 % 20,352
 32.4 % 12,936
 21.8 %
Provision for taxes 2,264
 3.2 % 10,751
 17.1 % 2,620
 4.4 %
Net income $21,053
 29.7 % $9,601
 15.3 % $10,316
 17.4 %
Earnings per share - Diluted $4.48
   $1.99
   $2.12
  















1
Source: Intel calculated 2022 TAM derived from industry analyst reports.

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REVENUE
We have achieved our third year in a row of record revenue, demonstrating that our strategy and transformation from a PC to a data-centric company is paying off. Our total revenue grew from $55.9 billion in 2014 to $70.8 billion in 2018, representing 6% compound annual growth rate (CAGR). Data-centric businesses collectively grew faster than Intel as a whole at 13% CAGR over the last five years and are approaching 50% of our revenue.
PC TO DATA-CENTRIC TRANSFORMATION OVER THE LAST 5 YEARS
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■ PC-centric $Bintc-20211225_g2.jpg
■ Data-centric $B
MD&A
— Data-centric as a % of total Intel revenue

19


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SEGMENT REVENUE WALK $BOverview
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2018 – 2017
In 2018, revenue was $70.8 billion, up $8.1 billion, or 13%, from 2017. The increase in revenue was primarily driven by strong performance across our data-centric businesses, which collectively grew 18% year over year and made up nearly half of our total revenue in 2018. Our recently acquired Mobileye business had revenue of $698 million. Our PC-centric business grew 9%, above our expectations, due to PC TAM1 growth and demand for our leadership products. The increase in 2018 revenue was partially offset by the loss of revenue from businesses that were divested, specifically $534 million from the divestiture of the Intel Security Group (ISecG) and approximately $165 million from the divestiture of Wind River.
2017 – 2016
2017 revenue of $62.8 billion was up $3.4 billion, or 6%, from 2016. After adjusting for the Q2 2017 divestiture of ISecG, revenue grew 9% from 2016. The increase in revenue was primarily driven by strong performance across our data-centric businesses, which collectively grew 16% year over year after adjusting for ISecG. We saw revenue growth across our DCG, IOTG, NSG, and PSG businesses, and 2017 revenue included $210 million from our Mobileye business. The increase in 2017 revenue was partially offset by $1.6 billion from the divestiture of ISecG and by approximately $500 million from a change to the Intel Inside® program.



We are committed to advancing PC experiences by delivering an annual cadence of leadership products and deepening our relationships with industry partners to co-engineer and deliver leading platform innovation. We engage in an intentional effort focused on long-term operating system, system architecture, hardware, and application integration that enables industry-leading PC experiences. We will embrace these opportunities by investing more heavily in the PC, ramping its capabilities even more aggressively, and designing the PC experience even more deliberately. By doing this, we will continue to fuel innovation across Intel, providing a growing source of IP, scale, and cash flow.
1
Key Developments
■We delivered our sixth consecutive year of revenue growth, to $40.5 billion, as the PC continues to be more essential than ever.
Source:"The PC is one of the most essential tools of modern times. This makes Intel's role more critical than ever. You can count on us to boldly innovate and deliver industry-leading PC experiences that connect people globally to what matters most to them."
—Jim Johnson, Interim General Manager, CCG
■We launched our 11th Gen Intel calculated PC TAM derived fromCore H-series processors and introduced our 12th Gen Intel Core processor family, our all-new performance hybrid architecture built on Intel 7 process technology.
■
We launched the world's first Wi-Fi 6E certified product for PCs, enabling Intel Wi-Fi based PCs to access as much as 1200 MHz of new Wi-Fi spectrum – the first new spectrum for Wi-Fi in over a decade. In May, we launched the Intel 5G Solution 5000 modem for PCs, delivering speeds that significantly exceed those of our Intel Gigabit LTE. We also introduced our new high-performance discrete graphics products: Intel® Arc™, with our first generation (Alchemist) GPU shipping to OEMs in Q1 2022.
■
We worked with industry analyst reports.partners to co-engineer and deliver more than 100 verified Intel® Evo™ designs and grew the commercial market segment with the launch of our 11th Gen Intel Core vPro platform.

5-Year Trends
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■ Revenue $B
■ Op Income $B
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MD&A20
Table of Contents

Market and Business Overview
Market Trends and Strategy
Since the onset of the COVID-19 pandemic, time spent on PCs has increased dramatically across all major usage categories—as did PCs per household—reinforcing the importance of bringing innovative platforms and form factors to market that unlock real-world experiences. This trend is expected to remain in a post-pandemic world, driving a year over year growth in revenue TAM1. The ecosystem is shipping over one million PC units a day and we believe there is sustained strength in PC demand. In addition, the COVID-19 pandemic has driven significant behavior changes that have positioned the PC as an essential tool in people's lives.
PC density, or PCs per household, is increasing as COVID-19 has irreversibly changed the way we focus, create, connect, and care for each other. In addition, we continue to see an increase in PCs per student. There is a significant opportunity in the commercial segment, driven by refresh of older Windows devices. Currently, there are approximately 140 million devices that are more than four years old2. The experience and capabilities delivered on new PCs are dramatically better today, reinforcing the opportunity to drive a refresh cycle among enterprise customers.
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Products and Competition
We operate in a particularly competitive market. In processors, we compete with AMD and vendors who design applications processors based on ARM* architecture, such as Qualcomm Inc. (Qualcomm), and, increasingly, Apple Inc., (Apple) with its most recent launch of M1 Max and M1 Pro. We expect this competitive environment to intensify in 2022.
Our role as a technology leader is more important than ever, and our commitment to creating an open ecosystem is critical to delivering on our ambition. That is why we embrace and collaborate with a vibrant ecosystem of OEM partners to identify innovation vectors. The breadth of a robust ecosystem like Windows/x86 is an incredibly powerful combination, bringing together hundreds of companies and creative and innovative advancements that are not possible for one company alone to deliver.
We launched our 12th Gen Intel Core desktop processors based on our first performance hybrid architecture, which combines two all-new core microarchitectures instead of one and can scale across PC segments and out to the edge. The 12th Gen processor family is set to deliver superior computing performance for every PC segment and out to the edge. In total, we expect to deliver more than 60 processors and 500 desktop and mobile designs from partners across major multinational corporations and leading manufacturers.
Unique to Intel, we innovate beyond the CPU to deliver premium PC experiences with Intel Evo and Intel vPro platforms. More than 100 advanced laptop designs have been built on the Intel Evo platform, which signals they are tested and verified in Intel labs. This ensures they deliver key experience indicators defined by real-world usage models and innovation across areas like responsiveness, battery life, instant wake, and connectivity. Intel vPro is designed for enterprise needs and delivers increased productivity improvements, connectivity, security features, and remote manageability.
We are leading Intel as we embark on our new IDM 2.0 strategy to develop more competitive products and more capabilities for customers. As a result, we are designing our product roadmap to drive product leadership grounded in a philosophy of openness and choice. We deliver value to our customers by leveraging our engineering capabilities and working with our partners across an open, innovative ecosystem to deliver technology that drives every major vector of the computing experience, including performance, battery life, connectivity, graphics, and form factors to create the most advanced PC platforms.
We continue to face industry-wide supply constraints, which are expected to persist into 2022. Given our unique position in the industry, we have taken major actions along the supply chain to eliminate bottlenecks—increasing substrate capacity, removing third-party component bottlenecks, increasing our own internal capacity, and obtaining more external capacity. We are also working with the industry to provide TAM forecasts that help our suppliers better deliver on industry needs.




1 Source: Intel calculated 2022 TAM derived from industry analyst reports.
2Source: Intel calculated the volume of devices over four years old from industry analyst reports and internal data.
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MD&A21
Table of Contents

Financial Performance
CCG Revenue $BCCG Operating Income $B
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■Platform
■Adjacent
Revenue Summary
▪Increased unit sales driven by continued strength in notebook demand and recovery in desktop demand driven by consumer and commercial recovery from COVID-19 lows.
▪Lower notebook ASPs due to strength in the consumer and education market segments, partially offset by higher desktop ASPs driven by commercial recovery from COVID-19.
▪Decrease in adjacent revenue primarily driven by the continued ramp down from the exit of our 5G smartphone modem and Home Gateway Platform businesses, partially offset by strength in wireless and connectivity.
2021 vs. 20202020 vs. 2019
(In Millions)%$ Impact%$ Impact
Desktop platform volumeup8%$851 down(11)%$(1,316)
Desktop platform ASPup3%292 up2%186 
Notebook platform volumeup8%2,102 up28%5,770 
Notebook platform ASPdown(6)%(1,530)down(6)%(1,646)
Adjacent products and other(1,261)(83)
Total change in revenue$454 $2,911 
Operating Income Summary
Operating income decreased 3% year over year, and operating margin was 36% in 2021.
(In Millions)
$14,6722021 Operating Income
(850)Higher operating expenses driven by increased investment in leadership products
(565)Higher period charges primarily associated with the ramp up of Intel 4
(240)Higher period charges primarily associated with the ramp down of 14nm
(185)Lower adjacent product margin primarily driven by the exit of our 5G smartphone modem business
(140)Higher period charges driven by less sell-through of reserves on non-qualified platform products in 2021 as compared to in 2020, and other reserves taken in 2021
710 Higher gross margin from platform revenue
655 Lower platform unit cost primarily due to cost improvements in 10nm SuperFin
165 Lower period charges primarily driven by a decrease in engineering samples
(7)Other
$15,1292020 Operating Income
(3,025)Higher platform unit cost primarily from increased mix of 10nm products
(125)Primarily driven by higher logistic expenses due to COVID-19
1,715 Higher gross margin from platform revenue
640 Lower operating expenses
420 Lower period charges due to lower start-up cost associated with 10nm products and sell-through of previously reserved platform products related to our 10nm process technology
300 Higher CCG adjacent product margin
2 Other
$15,2022019 Operating Income
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MD&A22

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Overview
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DCG develops workload-optimized platforms for compute, storage, and network functions. With unmatched scale, hardware and software portfolio breadth, and expansive partner ecosystem support, we are uniquely positioned to enable the world to unleash the potential of data, unlocking value for people, business, and society on a global scale. Market segments include cloud service providers, enterprise and government, and communications service providers. We serve the global appetite for cloud computing and enable digital transformation from edge to cloud.
Key Developments
"Intel has the breadth and depth of leadership products to solve our customers' most complex problems in a world where the digitization of everything is accelerating the need for high-performance computing."
—Sandra Rivera, Executive Vice President and General Manager, Data Center and AI Group
■We introduced multiple products and continued to invest in our leadership roadmap throughout the year. Amid effects of industry component supply constraints and a competitive environment, revenue decreased 1% year over year.
■
We launched the 3rd Gen IntelXeon Scalable processors (Ice Lake), the only x86 data center processors with built-in AI acceleration. We also announced the IPU, a platform that enables superior security capabilities and enables our cloud customers to handle infrastructure tasks more efficiently.
■We expanded our broad, data-centric portfolio for 5G network infrastructure including the 3rd Gen Intel Xeon Scalable processor "N-SKUs", a 5G network-optimized Ethernet NIC, and the Intel Network Platform. We also began sampling the next-generation Intel Xeon D processors, which are built for the edge.
5-year Trends
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■ Revenue $B
■ Op Income $B


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MD&A23
Table of Contents
Market and Business Overview
Market Trends and Strategy
Data is a significant force in society and is being generated at an unprecedented pace. In the context of the data center, four superpowers are shaping the future of technology:
▪Ubiquitous Compute: Businesses are demanding compute at the edge to drive insights more quickly from growing amounts of data as everything consumers interact with involves computer technology.
▪Pervasive Connectivity:Increased connectivity is enabling a universal reach with more data movement than ever before, connecting billions of devices and putting more powerful compute resources in the hands of consumers.
▪Cloud to Edge:The proliferation of cloud architectures, which started inside the data center to deliver new levels of efficiency and scale, is now the core of the data infrastructure. The growth and prevalence of the cloud is leading to the democratization of high-performance computing, which opens new frontiers of knowledge in areas like precision medicine and numerical weather prediction. Rapid adoption of 5G is enabling increased bandwidth and fueling continued transformation of the network. The evolution of the networks is creating unlimited scale and giving rise to the intelligent edge.
▪AI: AI is fundamental and becoming pervasive in all applications, creating intelligence everywhere, and enabling powerful new uses of compute across all fields.
Data centers—whether servicing compute, networking, or edge workloads—will go through a massive architectural transformation, leveraging heterogeneous computing with different types of processor architectures optimized for different workloads. With unmatched scale, hardware and software portfolio breadth, and ecosystem support, we are uniquely positioned to unlock the value of data for people, business, and society on a global scale.
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The on-premise enterprise market segment revenue grew as customers demonstrated strong recovery from COVID-19. Cloud market segment revenue decreased in 2021 driven by an increasingly competitive environment, and industry component supply constraints. The communications service provider segment continued to see strong growth with the build-out of 5G, and we collaborated with operators on the next wave of virtualization in the radio access network and build-out of the intelligent edge.
Products and Competition
We offer customers a broad portfolio of silicon and software designed to provide workload-optimized performance across computing, storage, and networking. As a leading provider of data center platforms, we have competitors such as Advanced Micro Devices, Inc. (AMD), providers of GPU products such as NVIDIA Corporation (NVIDIA), companies using ARM architecture, new entrants developing products customized for specific data center workloads, and internally developed solutions by cloud service providers and others. We expect the competitive environment to continue in 2022.
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In 2021, we launched our 3rd Gen Intel Xeon Scalable processors (Ice Lake), and we shipped 1 million units faster than the previous Xeon generations. All of our OEM partners are currently shipping 3rd Gen Intel Xeon enabled systems and all major cloud service provider customers have deployed services using 3rd Gen Intel Xeon processors. In 2021, we also introduced the IntelOptane Persistent Memory 200 Series and Optane SSD P5800X and began sampling the next generation of Intel Xeon D processors, which are built for the edge.
In 2021, we also announced the IPU, a platform that enables superior security capabilities and lets our cloud customers handle infrastructure tasks more efficiently, enabling the Intel Xeon CPU to focus on the tenant software. Intel announced two types of IPUs, an FPGA-based IPU (Oak Springs Canyon) and an ASIC-based IPU co-developed with Google (Mount Evans).
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MD&A24
Table of Contents
Financial Performance
DCG Revenue $BDCG Operating Income $B
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■Platform
■Adjacent
Revenue Summary
▪Lower platform ASP driven by product mix and a competitive environment, partially offset by recovery in the enterprise and government market segment, compared to COVID-driven lows in 2020.
▪Higher platform volume driven by recovery in the enterprise and government market segment (up 21% from 2020) and growth in the communications service providers market segment (up 9% from 2020), partially offset by a decline in the cloud service providers market segment (down 19% from 2020). (2020 compared to 2019, the cloud service providers market segment was up 20% and communications service providers market segment up 17%, partially offset by enterprise and government market segment down 8%).
▪Adjacent revenue grew primarily due to the inclusion of the Intel Optane memory business and growth in Ethernet, partially offset by a reduction in the 5G networking volume from elevated levels in 2020.
2021 vs. 20202020 vs. 2019
(In Millions)% Growth$ Impact% Growth$ Impact
Platform ASPdown(4)%$(924)down(3)%$(701)
Platform volumeup2%571 up11%2,316 
Adjacent productsup2%71 up49%1,007 
Total change in revenue$(282)$2,622 
Operating Income Summary
Operating income decreased 34% year over year, and operating margin was 27% in 2021.
(In Millions)
$6,9972021 Operating Income
(1,185)Higher operating expenses driven by investment in leadership products
(840)Higher platform unit cost primarily from increased mix of 10nm SuperFin products
(685)Higher period charges primarily associated with ramp up of Intel 4
(435)Lower gross margin from platform revenue
(250)Higher period charges primarily associated with ramp down of 14nm
(160)Higher period charges driven by increased engineering samples
(155)Lower adjacent product margin
145 Lower period charges driven by absence of other reserves taken in 2020, partially offset by reserves recorded in 2021
(9)Other
$10,5712020 Operating Income
1,325 Higher gross margin from platform revenue
235 Lower period charges due to lower factory start-up costs associated with the initial ramp of 10nm, partially offset by lower platform product reserves
(425)Higher operating expenses
(375)Lower DCG adjacent product margin
(295)Higher platform unit cost
(125)Primarily driven by higher logistic expenses due to COVID-19
4 Other
$10,2272019 Operating Income

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MD&A25

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More industries are harnessing the power of data to create business value, innovate, and grow. This requires that intelligence move closer to the edge, allowing data to be acted on where it is created. Working with our partners and developers, we use our architecture, accelerators, and software to develop and scale a growing Internet of Things portfolio and ecosystem. Our Internet of Things portfolio is comprised of our IOTG and Mobileye businesses.
Internet of Things Group
Overview
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IOTG develops high-performance compute platforms that solve the technology needs for business use cases that scale across vertical industries and embedded markets. Our customers include retailers, manufacturers, health and life sciences providers, researchers, governments, and education providers. We reduce complexity in the ecosystem with common silicon architectures and software to help enable our customers to create, store, and process data at the edge.
Key Developments
"The market continues to validate the strategic direction we began several years ago; for operational workloads, compute will move closer to where the data is created and AI inference will be the dominant technology driver."

—Tom Lantzsch, IOTG
General Manager
■Revenue was up 33%, driven by increased demand for IOTG platform products due to recovery from the economic impacts of COVID-19 across all key market segments. Most notably, we saw strength in our retail, industrial, and healthcare market segments.
■We announced enhanced product capabilities, which include the 11th Gen Intel Core processors and 3rd Gen Intel Xeon Scalable processors, both bring new AI and operational technology features to customers. These products are a response to needs across the verticals we serve to reduce edge complexity, add capabilities to developers, lower the cost of ownership, and support a range of environmental conditions.
■
We continue to update solutions to improve developers' digital strategies and to accelerate market adoption of AI applications at the edge. This includes advancing the OpenVINO toolkit for AI inference model deployment. It is supported by Intel DevCloud for the Edge, which allows users to prototype and experiment with AI workloads on Intel hardware prior to deployment. In addition, the Intel® Edge Software Hub provides access to software packages from Intel and our partners to deliver proven business outcomes.
■
We continue to work with our ecosystem partners to expand the portfolio of Intel® MRS and Intel® IoT RFP Ready Kit products—scalable, end-to-end solutions that provide solid business results today and lay the foundation for the future. Currently, IOTG has approved over 600 Intel MRS and Intel IoT RFP Ready Kit offerings, with approximately 50,000 new deployments across 160 countries.
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MD&A26
Table of Contents

5-Year Trends
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■ Revenue $B
■ Op Income $B
Market and Business Overview
Market Trends and Strategy
We are at the center of a global digital transformation. Through our broad portfolio of technology, solutions, and tools, we are transforming the way businesses create products, deliver services, and conduct operations—across schools, hospitals, retailers, governments, utilities, and manufacturers. Driving business benefits requires solving customer challenges in a highly fragmented global market with scalable horizontal technologies. Additionally, it requires building relevant ecosystems and scaling developers specific to diverse verticals. Our vertical market segments include the following:
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Retail—Retailers produce mountains of data that can be used to proactively address evolving customer demands and improve operations. We provide 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 and to achieve their full potential. The result is greater efficiency, reduced complexity, increased sales, and a more personalized customer experience.
Industrial—We are transforming manufacturing today and expanding what is possible for tomorrow's autonomous operations. We are driving the realization of Industry 4.0 and, together with our ecosystem partners, addressing industry challenges like the convergence of information technology with operational technology, while bringing AI and analytics to operations. This enables customers to make informed decisions that lower maintenance costs, create new service opportunities, and increase productivity.

Healthcare—We are advancing technologies to enable healthcare providers to focus on patients and their care. Technologies like AI, robotics, and 5G are making healthcare and life sciences more connected, personalized, and intelligent. Our technology innovations give researchers powerful tools to make breakthrough discoveries and solve some of the world's largest healthcare and life science challenges in lab and research environments. By working together with solution providers and end users in the healthcare community, we will continue to develop transformative technologies for the future of healthcare and life sciences.
Products and Competition
IOTG utilizes Intel's technology portfolio to provide horizontal platforms while making additional investments needed to adapt products to the specific requirements for our vertical segments. We offer end-to-end solutions with our wide spectrum of products, including IntelAtom, Intel Core, Intel Xeon, VPU accelerators, and developer toolkits such as OpenVINO. IOTG product development focuses on addressing the key challenges businesses face, including interoperability, connectivity, safety, and security, to implement transformative edge solutions. We invest heavily in developing the tools to service operational technology developers and independent software vendors.
We have a long-standing position as a supplier of components and software for embedded products. As businesses continue to create a deluge of data from more and more smart and connected devices across industries, the demand for high-performance computing at the edge has expanded exponentially. The installed base of Intel architecture-based hardware, and applications that run natively on them, helps us to offer compelling solutions in these markets. As this marketplace evolves, we face numerous large and small incumbent processor competitors, as well as new entrants that use the ARM architecture. The solutions require a broad range of connectivity solutions and we face competition from semiconductor companies providing traditional wireless solutions such as cellular, Wi-Fi, and Bluetooth, as well as several new entrants who are taking advantage of new focused communications protocols with the goal of expanding into computational silicon. The market is fragmented and complex, requiring interoperability, standard-based approaches, software, developer tools, and the ecosystem working together to accelerate time to value with commercial solutions at scale.





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MD&A27
Table of Contents

Mobileye
Overview
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Mobileye is a global leader in driving assistance and self-driving solutions. Our product portfolio covers the entire stack required for assisted and autonomous driving, including compute platforms, computer vision and machine learning-based sensing, mapping and localization, driving policy, and active sensors in development. Mobileye's unique assets in ADAS allow for building a scalable self-driving stack that meets the requirements for both Robotaxi and consumer level autonomy. Our customers and strategic partners include major global OEMs, Tier 1 automotive system integrators, and public transportation operators.
Key Developments
■We achieved record revenue in 2021 as global vehicle production improved amid recovery from the economic impacts of COVID-19. Our EyeQ SoC volume grew 42% and we expect to see additional growth in the adoption of enhanced ADAS technologies. We have shipped over 100 million chips to date, including 28 million EyeQ SoCs in 2021.
"The future of autonomous driving will be driven by the expansion of Robotaxis, followed by the proliferation of consumer level AVs. While it is too early to determine which realm will dominate, Mobileye is uniquely positioned to become a leader in both spaces."

—Prof. Amnon Shashua, President and Chief Executive Officer, Mobileye
■
We secured a record 41 new ADAS design wins, including deals with major OEMs such as Toyota, VW, BMW, Nissan, Honda, and PSA Group. We are currently active in 71 production programs1 across over 30 OEMs.
■We launched our SAE L4 SDS, Mobileye Drive™, and secured multiple collaborations for commercial use, including with Udelv for autonomous cargo delivery, and with Transdev for self-driving mobility services. We also achieved our first consumer L4 design win with Geely.
■We unveiled the Mobileye Robotaxi, a production-grade self-driving electric vehicle, with mobility rider services and MaaS platform, as well as mobility intelligence, tele-operations and data services by Moovit. Through the partnership with SIXT, Robotaxi services will begin in Germany in 2022, along with the already announced Robotaxi services in Tel Aviv.
■In December 2021, we announced our intention to take Mobileye public in the US via an IPO of newly issued Mobileye stock. Intel expects to retain majority ownership of Mobileye following the completion of the IPO.
5-Year Trends2
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■ Revenue $B
■ Op Income $B
Market and Business Overview
Market Trends and Strategy
While the vehicle industry shows recovery from the COVID-19 pandemic with approximately 2%3 growth year over year, production is still roughly 15% below 2019 levels. We expect ADAS volume to overcome the COVID-19 effects faster than overall global vehicle production, given the significant growth shown in 2021. We anticipate long-term ADAS growth from a strong build-up in L1-L2 ADAS fitment rates, increasing the number of vehicles that will have basic ADAS features from the factory. In addition, we expect increased demand for new generations of cloud-enhanced ADAS as OEMs continue to look to boost current L2 solutions by improving system fidelity, availability, and performance. A crucial building block for L4 autonomy, our REM high-definition maps with constant updates, global coverage, and crowd-based semantics provide a unique value proposition for enhanced L2 systems. We see great traction from leading OEMs (including VW and Ford, as recently announced) as REM-based enhancements can be achieved based on economical configuration.
We believe the future of autonomous driving will unfold in two phases: commercial services like Robotaxi and cargo, followed by series-production passenger car consumer AVs. We expect consumer AVs 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, regulatory framework, public acceptance, and the ability to scale geographically. Thus, we see the Robotaxi phase as a necessary corridor to consumer AV. Because of our scalable approach, Mobileye is well-positioned to play a significant role in both the Robotaxi market and the future consumer AV market. This is driven by three elements in our strategy: lean compute enabled by the tight co-design of hardware and software, REM crowdsourced maps that provide unparalleled global coverage and constant updates, and development of high-resolution imaging radars to reduce the use of costly LiDAR sensors.
1 This refers to the total number of production programs with active project managers. Intel's definition of program is included in "Key Terms" within the Financial Statements and Supplemental Details.
2 Mobileye was acquired in Q3 2017; 2017 results do not represent the full year.
3 Source: IHS Markit.
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MD&A28
Table of Contents

In Robotaxi, Mobileye is active via two major business models: First, we are positioning ourselves to be an end-to-end service provider together with Moovit's complementary go-to-market assets and service layers. Second, we are also engaging with various public transportation operators, goods delivery, and mobility providers via a Vehicle-as-a-Service business model in which we provide a fully integrated self-driving platform.
Regulatory approval and framework are a prerequisite for AV proliferation. In 2021, Germany became the first country in the world to allow autonomous vehicles onto public roads without requiring a human backup safety driver behind the wheel. We anticipate one or more additional countries will soon provide similar regulation, enabling regular deployment and operation of MaaS fleets with self-driving vehicles starting in 2022.
Products and Competition
Our offering for ADAS and AV is propelled by our computer vision, AI expertise, and software assets, deployed on our EyeQ SoC family. The tight co-design of hardware and software gives the EyeQ SoC the ability to support complex and computationally intense tasks and sets it apart from competition because it is purpose-fit for high-compute, low-power, automotive-compliant mission profiles. Our 5th Gen EyeQ5 SoC is designed to act as the core building block of central compute for fully autonomous driving vehicles. We have been able to achieve power, performance, and cost targets by employing proprietary computational cores that are optimized for a wide variety of computer vision, signal processing, and machine learning tasks, including deep neural networks. Starting with EyeQ5, we are supporting an automotive-grade standard operating system and providing a complete software development kit to allow customers to differentiate their solutions by deploying their algorithms on EyeQ5. The EyeQ5 SoC is already available for commercial vehicles and is already operational in our autonomous test vehicles.
EyeQ5 serves as the computational foundation for our scalable camera-only surround sensing system. The system consists of multiple independent computer vision engines and deep networks for algorithmic redundancy. The result is a robust and comprehensive model of the environment that allows end-to-end autonomous driving. The surround computer vision system is the backbone of Mobileye's AV architecture and the flagship offering for next-generation ADAS.
We recently introduced EyeQ6L and EyeQ6H, which are designed to provide a scalable solution from entry level ADAS to L2+ and L4 systems. The EyeQ6 platform opens Mobileye to host and process parking and DMS data. EyeQ6L is expected to be deployed in 2023, while EyeQ6H will start production in 2024.
We also introduced the EyeQ® Ultra™, our most advanced, highest performing SoC purpose-built for autonomous driving. EyeQ Ultra maximizes both performance and efficiency at 176 tera operations per second. This efficiently designed SoC builds on six generations of proven EyeQ architecture and four classes of proprietary accelerator cores to deliver the power and performance needed for AVs. The first silicon for the EyeQ Ultra SoC is expected at the end of 2023, with full automotive-grade production in 2025.
The next significant building block in our complete offering is REM mapping technology, which compiles crowdsourced mapping data from EyeQSoC-equipped vehicles. Together with our OEM partners, we are utilizing our strong presence in ADAS to gain crowd knowledge that is required for building AV maps. After five years of intense development, the REM technology is fully functional for L2/L2+ applications and provides a variety of advanced features, including predictive adaptive cruise control, lane-level localization in all weather and road conditions, hands-free driving application, and real-time alerts. REM also provides intelligent speed adaptation functionality for regulation required by GSR and EUNCAP starting in 2022. REM technology is one of our key differentiators.
The third building block in our full stack offering is our unique formal model for AV safety (RSS). At its core, RSS is a pragmatic method to design and then efficiently validate the safety of an AV, serving as the governing safety layer for the decision-making system. RSS formalizes human decision making for safe driving. It acknowledges the need to balance safety with useful driving by making plausible worst-case scenario assumptions for other road users. By using induction and analytical calculations, the RSS model allows for a lean driving policy with high computational efficiency.
The fourth building block is True Redundancy™, which manifests our approach to AV sensing. True Redundancy combines two independent perception sub-systems—one powered by cameras, and another by radar and LiDAR—and supports full end-to-end autonomous capabilities. Our Level 4 self-driving system, Mobileye Drive, incorporates both systems.
Our last building block is active sensors development. Mobileye and Intel's combined competencies put us in a unique position to advance with the development of a software-defined imaging radar designed to deliver rich point cloud modeling capabilities to enable sensing-state and driving decisions solely on radar. Our imaging radars would replace most of the field of view covered by today's costly LiDARs. LiDAR would be retained only for the front-facing field of view, where it would operate in three-way redundancy with cameras and radar, enabling a major cost reduction for the entire sensor configuration. The proof of concept and modelling using this new radar technology has already been demonstrated. We are also developing a unique Frequency-Modulated Continuous Wave LiDAR designed to provide high point density with relative speed measurement and superior immunity for additional safety in time-critical decisions.
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MD&A29
Table of Contents

Financial Performance
Internet of Things Revenue $BInternet of Things Op Income $B
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■ IOTG
■ Mobileye
Revenue Summary
2021 vs. 2020
IOTG revenue increased $991 million, primarily driven by $1.1 billion related to higher demand for IOTG platform products amid recovery from the economic impacts of COVID-19, partially offset by $115 million due to lower ASPs.
Mobileye revenue increased $419 million, driven by improvement in global vehicle production, recovery from the economic impacts of COVID-19, and increasing adoption of ADAS compared to 2020.
2020 vs. 2019
IOTG revenue decreased $814 million, or 21%, primarily driven by the economic impacts of COVID-19 with $470 million in lower ASPs driven by weaker core mix and $265 million driven by weaker demand for IOTG platform products. Revenue was also negatively affected by considerations related to the US government Entity List.
Mobileye revenue was $967 million, up $88 million, driven by higher demand from improved global vehicle production in the second half of 2020, offsetting the decline in production experienced in the first half of the year due to the effects of the COVID-19 pandemic.
Operating Income Summary
2021 vs. 2020
IOTG operating income increased $548 million, primarily due to higher platform revenue.
Mobileye operating income increased $219 million, due to higher revenue driven by improvement in global vehicle production, recovery from the economic impacts of COVID-19, and increasing adoption of ADAS compared to 2020.
2020 vs. 2019
IOTG operating income decreased $600 million, primarily due to lower platform revenue.
Mobileye operating income was $241 million, down $4 million, due to higher spending primarily driven by the Moovit acquisition, partially offset by growth in revenue.













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MD&A30

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Overview
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NSG provides next-generation memory and storage products based on innovative Intel 3D NAND technology. NSG is disrupting the memory and storage hierarchy with new tiers that balance capacity, performance, and cost. Our products are available in innovative form factors and densities to address the memory and storage challenges our customers face in a rapidly evolving technological landscape. Our customers include enterprise and cloud-based data centers, and users of business and consumer desktops and laptops.
Key Developments
"Storage technologies help drive the computing experience. Put simply, in today’s data-driven world, advances in both data center and client computing need to be matched by cutting-edge innovation in the memory-and-storage space."

—Rob Crooke, NSG General Manager
■Revenue was lower in 2021, driven by market softness and pricing pressure. NAND profitability improved due to the absence of depreciation expense from NAND property, plant and equipment that was held for sale throughout 2021.
■
We launched the Intel® SSD D5-P5316, our first 144-layer QLC NAND SSD for the Data Center, which is available up to 30.72TB in both the U.2 and efficient E1.L form factors. An upgrade of our SATA drive, the Intel® SSD D3-S4520 and D3-S4620, also launched with Intel’s latest-gen 144-layer TLC NAND and is available in 2.5” and M.2 form factors up to 7.68TB capacity. For our consumer market, the Intel® SSD 670p with 144-layer QLC NAND launched with improved performance, storage responsiveness, and endurance with high capacity (up to 2TB).
■In October 2020, we signed an agreement with SK hynix to divest our NAND memory business. The NAND memory business makes up our NSG segment. The transaction will occur over two closings, the first of which was completed on December 29, 2021, subsequent to our fiscal 2021 year-end. We will fully deconsolidate our ongoing interests in the NAND OpCo Business in the first quarter of 2022. Refer to "Note 10 : Acquisitions and Divestitures" within Notes to Consolidated Financial Statements for further information on the divestiture.
5-Year Trends
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■ Revenue $B
■ Op Income $B
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Market and Business Overview
Market Trends and Strategy
The combination of ever-exploding growth in data and the desire to analyze data for actionable insights requires our customers to balance performance, real-time access, and cost. Our 3D NAND TLC and QLC technology innovations enable our customers to have access to efficient, cost-effective capacity storage.
In October of 2020, we signed an agreement with SK hynix to divest our NAND memory business, including our NAND memory fabrication facility in Dalian, China and certain related equipment and tangible assets (the Fab Assets), our NAND SSD Business (the NAND SSD Business), and our NAND memory technology and manufacturing business (the NAND OpCo Business). The first closing was completed on December 29, 2021, subsequent to our fiscal 2021 year-end. At first closing, we sold to SK hynix the Fab Assets and the NAND SSD Business. In connection with the first closing, we and certain affiliates of SK hynix also entered into a NAND wafer manufacturing and sale agreement, pursuant to which we will manufacture and sell to SK hynix NAND memory wafers to be manufactured using the Fab Assets in Dalian, China until the second closing.
Products and Competitiveness
We compete against other providers of NAND products. We offer 96-layer and 64-layer TLC NAND high-capacity SSDs, and 144-layer QLC NAND high-capacity SSDs. We focus our efforts primarily on incorporating NAND into solution products.
The acceleration in data growth across our customer base requires significant innovation in storage technology. Our storage roadmap led the way in re-imagining usages and architecting innovative solutions that have disrupted the industry with 96-layer and 144-layer 3D NAND TLC and QLC solutions. We launched four new products with multiple densities to keep up with the evolving business needs of our customers.
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Financial Performance
NSG Revenue $BNSG Operating Income $B
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Revenue Summary
2021 vs. 2020
Revenue decreased $1.1 billion, driven by $712 million lower ASPs due to market softness and pricing pressure and $392 million due to the transfer of the Intel Optane memory business to DCG.
2020 vs. 2019
Revenue increased $996 million, driven by $716 million higher ASP from improved NAND pricing and $280 million from improved overall demand.
Operating Income Summary
2021 vs. 2020
NSG had an operating profit of $1.4 billion, up from an operating profit of $361 million in 2020. The operating profit was driven by $1.4 billion of improvements in unit cost, primarily driven by the absence of depreciation expense from NAND property, plant and equipment that was held for sale, $366 million of lower period charges, and $220 million of lower operating expenses, partially offset by $929 million of lower revenue primarily on ASP decline. Operating income also benefited from the transfer of the Intel Optane memory business from 2021 NSG results (a loss of $576 million in 2020).
2020 vs. 2019
NSG had an operating profit of $361 million, up from an operating loss of $1.2 billion in 2019. The operating profit was driven by $716 million higher ASPs from market pricing recovery and $741 million due to continued improvements in unit cost.


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MD&A33

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Overview
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PSG offers programmable semiconductors, primarily FPGAs, structured ASICs, and related products, for a broad range of applications across our embedded, communications, and cloud and enterprise market segments. Our product portfolio delivers FPGA acceleration in tandem with Intel microprocessors, which enables us to combine the benefits of our broad portfolio of technologies to allow more flexibility for systems to operate with increased efficiency and higher performance.


Key Developments
■Revenue was up 4% year over year, driven by recovery in the embedded and communications market segments from COVID-19 lows. Revenue was limited by ongoing industry component, substrate, and foundry capacity shortages.
a001intellogocolor.jpg  MD&A"Intel FPGAs and Structured ASICs, unleashed with software, platform and workload innovations, are accelerating a smart and connected world."

—Shannon Poulin, PSG General Manager
 Consolidated Results■
We are shipping our Intel® Agilex™ FPGA family, featuring industry-leading FPGA fabric performance, power efficiency, and Analysistransceiver performance. We released our Intel® eASIC™ N5X device family (Diamond Mesa) for low-latency 5G network acceleration, cloud acceleration, and storage, AI, and edge applications.
20■We announced Arrow Creek, an FPGA-based Acceleration Development Platform SmartNIC adapter for high-performance 100G networking acceleration, and RedHat support for our Intel Open FPGA Stack scalable, source-accessible FPGA hardware and software infrastructure.
■
We announced that Intel® FPGA-based IPU platforms are currently deployed at multiple cloud service providers. We also announced Oak Springs Canyon, an IPU platform built with the Intel® Xeon® D processor and the Intel Agilex FPGA.
5-Year Trends
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■ Revenue $B
■ Op Income $B

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MD&A34
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Market and Business Overview
GROSS MARGINMarket Trends and Strategy
With the rise of pervasive connectivity and autonomous transactions, vast networks of devices and systems are linked from the edge through infrastructure to the cloud. Our FPGA and structured ASIC technologies enhance Intel's ability to meet the needs of customers in the data center, across the network, and at the edge by extending platform capabilities, intercepting evolving requirements when standards are still changing, and enabling customers to validate next-generation technology proof points early in the market transition. The Intel FPGA portfolio enables this transformation with discrete FPGAs and software-defined, hardware-based, multi-function acceleration cards and IPUs that allow faster development times, high performance, and power efficiency with lower overall total cost of ownership.
We enable a broad range of solutions targeting applications across our embedded, communications, and cloud and enterprise market segments. The configurability and efficiency of FPGAs provide advantages to enable transformative applications such as 5G wireless, network function virtualization acceleration, and edge acceleration for video analytics and Industry 4.0. At the edge, where systems ingest large amounts of data, Intel FPGAs are ideal for pre-processing data to accelerate Intel processors. In the network, where data traffic is increasing and network functions are being virtualized to improve transport efficiency, Intel FPGAs are built to deliver high-bandwidth aggregation and processing. In the cloud, where workloads shift dynamically and algorithms change, Intel FPGAs are the ideal solution for adapting to new demands through reconfigurability and enabling the offload of infrastructure processing tasks from CPUs as part of an IPU platform.
Products and Competition
We deliver solutions in the PLD market, primarily FPGAs and structured ASICs, to accelerate applications that help secure, power, and connect billions of devices and the infrastructure of the smart, connected, data-centric world. We face competition from other programmable logic companies, as well as companies that make other types of semiconductor products, such as ASICs, application-specific standard products, GPUs, digital signal processors, and CPUs. Targeted growth areas for our programmable solutions include 5G, AI, intelligent edge, and cloud applications. The FPGA life cycle generally takes three or more years from the time that a design win is secured before a customer starts volume production and we receive the associated revenue.
We continue to leverage our heterogeneous architecture on advanced nodes to deliver innovative products at an accelerated pace, allowing the integration of analog, memory, custom computing, custom I/O, and Intel eASIC chiplets into a single package. Our Intel Agilex FPGA family, built on Intel 10nm SuperFin technology, is now shipping. The Agilex family delivers leading performance and power efficiency for diverse workloads.
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We continue to invest in our Intel eASIC portfolio. Our Intel eASIC N5X, the next-generation Intel eASIC device, is now in production. Structured ASIC products serve as an intermediary technology between FPGAs and standard-cell ASICs that provides lower unit cost and lower power compared to FPGAs, and faster time-to-market and lower non-recurring engineering cost compared to standard-cell ASICs. Intel eASIC products have growth opportunities through adoption in 5G applications and scale across a wide range of markets.
We continue to execute to our developer-first strategy with oneAPI support for several Intel FPGA families and the Intel® FPGA Programmable Acceleration Card. The oneAPI programming model allows users to save significant development time and enhance productivity while using a single, unified language for CPUs, GPUs, and FPGAs.
We introduced several new platforms, solutions, and partnerships during the year. We announced Arrow Creek, an FPGA-based Acceleration Development Platform SmartNIC adapter that can flexibly accelerate several infrastructure workloads and enable high-performance 100G connectivity by combining Intel’s Agilex FPGA and the Intel Ethernet 800 Series controller. We introduced RedHat support for Intel Open FPGA Stack, further enabling solution and board providers to build their own differentiated FPGA platforms for servers with Intel Xeon CPUs. We also announced with the US Defense Advanced Research Projects Agency a three-year partnership to advance the development of domestically manufactured structured ASIC platforms.
Intel FPGAs play a critical role in Intel’s announced IPU vision, enabling cloud and communications service providers to reduce overhead and free up performance for CPUs. Intel FPGA-based IPU platforms are currently deployed at multiple cloud service providers. We also announced Oak Springs Canyon, an IPU reference platform built with our Intel Xeon D processor and our Intel Agilex FPGA.

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Financial Performance
PSG Revenue $BPSG Operating Income $B
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Revenue Summary
2021 vs. 2020
Revenue increased$81 million, driven by recovery in the embedded and communications market segments from COVID-19 lows, partially offset by customer inventory digestion in the cloud market segment.
2020 vs. 2019
Revenue decreased $134 million, driven by a decline in our communications market segment due to customer transition to 5G ASICs that benefited DCG adjacencies, and decline in our embedded market segment. The decline was partially offset by strength in the cloud and enterprise market segment.
Operating Income Summary
2021 vs. 2020
Operating income increased $37 million, driven by higher revenue due to recovery in the embedded and communications market segments from COVID-19 lows, partially offset by a decrease in the cloud market segment.
2020 vs. 2019
Operating income decreased $58 million, driven by lower revenue in our embedded and communications market segments, partially offset by strength in the cloud and enterprise market segment

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Consolidated Results of Operations
For additional key highlights of our results of operations, see "A Year in Review."
Years Ended
(In Millions, Except Per Share Amounts)		December 25, 2021December 26, 2020December 28, 2019
Amount% of Net
Revenue		Amount% of Net
Revenue		Amount% of Net
Revenue
Net revenue$79,024 100.0 %$77,867 100.0 %$71,965 100.0 %
Cost of sales35,209 44.6 %34,255 44.0 %29,825 41.4 %
Gross margin43,815 55.4 %43,612 56.0 %42,140 58.6 %
Research and development15,190 19.2 %13,556 17.4 %13,362 18.6 %
Marketing, general and administrative6,543 8.3 %6,180 7.9 %6,350 8.8 %
Restructuring and other charges2,626 3.3 %198 0.3 %393 0.5 %
Operating income19,456 24.6 %23,678 30.4 %22,035 30.6 %
Gains (losses) on equity investments, net2,729 3.5 %1,904 2.4 %1,539 2.1 %
Interest and other, net(482)(0.6)%(504)(0.6)%484 0.7 %
Income before taxes21,703 27.5 %25,078 32.2 %24,058 33.4 %
Provision for taxes1,835 2.3 %4,179 5.4 %3,010 4.2 %
Net income$19,868 25.1 %$20,899 26.8 %$21,048 29.2 %
Earnings per share—diluted$4.86 $4.94 $4.71 
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Revenue
Our total revenue grew from $62.8 billion in 2017 to $79.0 billion in 2021, representing 6% CAGR.
5-year Revenue Trend
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Segment Revenue Walk $B
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2021 vs. 2020
In 2021, revenue was $79.0 billion, up $1.2 billion, or 1%, from 2020. CCG revenue grew 1% due to continued strength in notebook demand and recovery in desktop demand, partially offset by lower notebook ASPs due to strength in the consumer and education market segments. CCG adjacent revenue decreased primarily due to the continued ramp down from the exit of our 5G smartphone modem and Home Gateway Platform businesses. IOTG and Mobileye were both up 33% and 43%, respectively, on higher demand amid recovery from the economic impacts of COVID-19. DCG revenue decreased 1% primarily due to lower ASPs driven by product mix and a competitive environment, partially offset by higher platform volume from recovery in the enterprise and government market segment. NSG revenue decreased primarily driven by lower ASPs due to market softness and pricing pressure. Our "all other" revenue increased primarily due to $584 million from a prepaid customer supply agreement settled in Q1 2021 for which we recognized related revenue for completing performance.
We saw impacts from ongoing industry component, substrate, and foundry silicon shortages across a majority of our businesses and we expect these constraints to continue.

2020 vs. 2019
In 2020, revenue was $77.9 billion, up $5.9 billion, or 8%, from 2019. Our DCG revenue grew 11% due to increased platform volume as cloud service providers increased capacity to serve customer demand. We also saw continued growth in DCG communications service providers, partially offset by enterprise and government decline. We saw growth in DCG adjacencies driven by 5G networking deployment and saw improved NAND pricing and higher demand in NSG, partially offset by weaker core mix and higher demand in IOTG platform products due to COVID-19. Our CCG revenue was up8% year over year driven by strength in notebook and Wi-Fi sales. That growth was slightly offset by lower desktop volume and lower notebook ASPs resulting from higher demand for consumer and education PCs, and volume decline in LTE modem and connected home following the exit of those businesses.


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Gross Margin
We derived mosta substantial majority of our overall gross margin dollars from the sale of platform products in the CCG and DCG operating segments. Our overall gross margin dollars in 20182021 increased by $4.6$203 million, or approximately flat compared to 2020, and in 2020 increased by $1.5 billion, or 12%3%, compared to 2017, and in 2017 increased by $2.9 billion, or 8%, compared to 2016. In 2018, our adjacent products continued to grow, primarily due to memory and modem products, which have a lower2019. Our gross margin percentage than our overall average. Adjacent products represented a larger proportion of our overall business in 2018, which positively impacted our gross margin dollars but substantially offsetwas down as the increase in gross margin percentage from platform products.
revenue was offset by higher period charges and higher unit cost.
GROSS MARGINGross Margin $B
(Percentages in chart indicate gross margin as a percentage of total revenue)
c011grossmargin.jpg
(In Millions)  
$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
2,380
 Higher gross margin from platform revenue
1,010
 Lower platform unit cost, primarily on 14nm cost improvement
420
 Lower Altera and other acquisition-related charges
315
 Lower period charges associated with product warranty and IP agreements incurred in 2016
(535) Higher factory start-up costs, primarily driven by the ramp of our 10nm process technology
(390) Impact of the ISecG divestiture, offset by higher gross margin from adjacent businesses
(275) Period charges primarily associated with engineering samples and higher initial production costs from our 10nm products
(60) Other
$36,233
 2016 Gross Margin

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(In Millions)
$43,8152021 Gross Margin
1,010 Higher gross margin from platform revenue
680 Higher gross margin from adjacent businesses primarily due to the absence of depreciation expense from NAND property, plant and equipment that was held for sale, increased Mobileye volume and higher margins on wireless and connectivity
585 Prepaid customer supply agreement settled and recognized to revenue in Q1 2021
75 Lower period charges driven by a decrease in engineering samples and lower reserves taken on non-qualified platform products compared to 2020, partially offset by 2020 sell-through of other reserves and other reserves taken in 2021
(1,325)Higher period charges primarily associated with the ramp up of Intel 4
(515)Higher period charges primarily associated with the ramp down of 14nm
(235)Higher platform unit cost primarily from increased mix of 10nm SuperFin products
(72)Other
$43,6122020 Gross Margin
2,360 Higher gross margin from platform revenue
1,855 Higher gross margin from adjacent businesses primarily due to higher margins on NAND, modem, and WIFI, partially offset by lower margins on DCG adjacencies
630 Lower factory start-up costs associated with our 10nm process technology
155 Lower period charges
(3,285)Higher platform unit cost primarily from increased mix of 10nm products
(255)Primarily driven by higher logistic expenses due to COVID-19
12 Other
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 Consolidated Results and Analysis21
$42,1402019 Gross Margin



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OPERATING EXPENSESOperating Expenses
Total R&D and marketing, general and administrative (MG&A)MG&A expenses for 20182021 were $20.3$21.7 billion, down 1% from 2017.up 10% compared to 2020. These expenses represented 28.6%27.5% of revenue for 20182021 and 32.6%25.3% of revenue for 2017. In 2018, we met our goal to have annual R&D and MG&A be 30% of revenue, two years ahead of our 2020 target.
2020. We continue to invest in R&D to accelerate our growth and profitability while driving operational efficiencies to reduce our MG&A spending.
growth.
RESEARCH AND DEVELOPMENTResearch and Development $BMARKETING, GENERAL AND ADMINISTRATIVEMarketing, General and Administrative $B
(Percentages indicate expenses as a percentage of total revenue)
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RESEARCH AND DEVELOPMENT
2018 – 2017
R&D spending increased by $508 million, or 4%, driven by the following:
+Investments in data-centric businesses
+Investments in 10nm process technology
+Profit-dependent compensation due to an increase in net income
-Lack of expenses due to the divestitures of ISecG in Q2 2017 and Wind River in Q2 2018
2017 – 2016
R&D spending increased by $350 million, or 3%, driven by the following:
+Investments in data-centric businesses, including the addition of Mobileye
+Process development costs for our 7nm process technology
+Profit-dependent compensation due to an increase in net income, excluding Tax Reform impacts
-Lack of expenses due to the 2017 divestiture of ISecG
-Cost savings from gained efficiencies
MARKETING, GENERAL AND ADMINISTRATIVE
2018 – 2017
MG&A expenses decreased by $702 million, or 9%, driven by the following:
-Reduction in marketing programs in 2018
-Lack of acquisition costs due to our 2017 acquisition of Mobileye
-Lack of expenses due to the divestitures 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
2017 – 2016
MG&A expenses decreased by $925 million, or 11%, driven by the following:
-Lack of expenses due to the 2017 divestiture of ISecG
-Change to the Intel Inside program in 2017
+Profit-dependent compensation due to an increase in net income, excluding Tax Reform impacts



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 Consolidated ResultsResearch and Analysis22Development

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OVERVIEW
CCG is our largest business unit, delivering 52% of our revenue. The PC market remains a critical facet of our business, providing an important source of IP, scale, and cash flow. CCG is dedicated to delivering client computing end-user solutions, focusing on higher growth segments of 2-in-1, thin-and-light, commercial, and gaming, as well as growing adjacencies such as WiFi and modem. CCG is the human touchpoint in a data-centric world. We deploy platforms that connect people to data and analytics, allowing each person to focus, create, and connect in ways that unlock their individual potential.
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HIGHLIGHTS AND SEGMENT IMPERATIVES
•
Since 2014, the PC TAM has decreased by approximately 16%1, while CCG profitability has improved by over 37%, with focus on higher growth segments and innovative form factors.
"The PC is the human touchpoint of our data-centric strategy. We are committed to making the PC the platform that powers everyone’s greatest contribution."

—Gregory Bryant, CCG General Manager
•
Delivering an annual cadence of leadership products is foundational to our business. In 2019 we will begin transitioning to 10nm products, which are expected to be on shelves for the 2019 holiday season.
•
Leveraging our engineering capabilities and working with our customers and partners, we drive innovation across key vectors of performance, battery life, connectivity (e.g., WiFi, 5G), graphics, form factors, and AI.
•

As a critical facet of Intel's business, CCG is transforming the PC into the platform that powers every person’s greatest contribution and fundamentally supports Intel's data-centric vision of the future.
5-YEAR TRENDS
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■ Revenue $B
— Year over Year Growth
■ Op Income $B
— Year over Year Growth

2021 vs. 2020
1
Source: Intel calculated TAM derived from industry analyst reports

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Table of Contents


MARKET AND BUSINESS OVERVIEW
Market trends and strategy
Overall market conditions have improved and we saw a modest growth in the PC TAM1 this year for the first time since 2011. Our revenue in 2018 increased due to strong demand in commercial and gaming market segments, and higher demand for our high-performance processors, which more than offset declines in desktop volume. We are operating in an increasingly competitive market, particularly in desktop. We continue to invest in product and process technology and in partnerships with our customers to deliver platform innovation and an annual cadence of leadership products. As we move to being a data-centric company, the PC is the connection between people, data, and analytics. It is the bridge between people and the cloud, allowing individuals to focus, create, and connect in new ways.
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Products and competitiveness
With a focus on an annual cadence of leadership products, we seek to deliver security-enhanced solutions that continue to open the doors for new technologies, new use cases, and new categories. We expanded our 8th generation Intel® Core™ mobile processor U-series and Y-series families, which are optimized for mobility. These new processors have integrated Gigabit WiFi and enable faster connectivity speeds, better performance, more intuitive voice experiences, and longer battery life for 2-in-1s and thin-and-light laptops. 
We introduced the first Intel® Core™ i9 processor for laptops, an Intel Core platform extension that brings together the benefits of 8th generation Intel Core processors with Intel® Optane™ memory, and high-performance desktop CPUs and chipsets that deliver modern standby and ambient computing capabilities. We also announced the first 9th generation Intel® Core™ desktop processors, including the i9-9900K gaming processor, which significantly improves performance and platform features to meet a range of consumer needs. Additionally, we are investing in AI usages to make the client smarter, more adaptable, and more responsive.
Our platform products continue to be enhanced by new adjacent technologies. We introduced our 6th generation LTE* modem, the Intel® XMM™ 7660 modem, built on Intel's 14nm process technology. We also announced our first 5G NR multi-mode product, the Intel XMM 8160 modem, in our Intel XMM 8000 series product family. In addition, we introduced an Intel® NUC family of products based on 8th generation Intel® Core™ processors. These mainstream products can power home theater systems, drive content creation solutions, and serve as personal voice assistants. We also launched new Thunderbolt™ products, increasing the presence of fast and simple connectivity in premium PCs and universal docking solutions.



























1
Source: Intel calculated PC shipment estimate derived from industry analyst reports.

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 Segment Trends and Results24
Table of Contents


FINANCIAL PERFORMANCE
CCG REVENUE $BCCG OPERATING INCOME $B
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R&D spending increased by $1.6 billion, or 12.1%, driven by the following:
■Platform
■Adjacent
REVENUE SUMMARY
•
First year over year PC TAM1 growth since 2011 drove an increase in notebook platform volume in 2018. We are operating in an increasingly competitive environment, especially in desktop.
Increased demand for performance products, and segmentation drove strong product mix and higher ASP.
Strong demand for commercial, 2-in-1, and gaming market segments, along with higher modem share.
  2018 – 2017 2017 – 2016
(Dollars in millions) % $ Impact % $ Impact
           
Desktop platform volume down(6)% $(608) down(5)% $(686)
Desktop platform ASP up11% 1,181
 flat—% (38)
Notebook platform volume up4% 839
 up5% 885
Notebook platform ASP up3% 677
 up2% 326
Adjacent products and other    912
    608
           
Total change in revenue    $3,001
    $1,095
OPERATING INCOME SUMMARY
Operating income increased 10% from 2017 to 2018, primarily due to higher gross margin from platform products. CCG achieved better operating efficiency with lower spending while continuing to invest in growth areas.
(In Millions)  
$14,222
 2018 Operating Income
2,080
 Higher gross margin from CCG 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
1,135
 Lower platform unit cost, primarily on 14nm cost improvement
635
 Higher gross margin from platform revenue
630
 Lower operating expenses and share of technology development and MG&A costs
(430) Period charges primarily associated with engineering samples and higher initial production costs from 10nm products
303
 Other
$10,646
 2016 Operating Income
1 Source: Intel calculated PC TAM derived from industry analyst reports and internal estimates.


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 Segment Trends and Results25

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OVERVIEW
DCG develops workload-optimized platforms for compute, storage, and network functions. Customers include cloud service providers, enterprise and government, and communications service providers. In 2018, DCG continued to grow faster than Intel as a whole, generating over 30% of our total revenue. Growth was fueled by strong demand in key workloads like AI and network function virtualization in the cloud service provider and communications service provider market segments.
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+Investments in DCG, CCG, and Mobileye
HIGHLIGHTS AND SEGMENT IMPERATIVES+Investments in our process technology
+Incentive-based cash compensation
●
DCG had record revenue and operating income in 2018. Customer transition to Intel® Xeon® Scalable processors and higher demand across cloud and communication service providers contributed to the growth.
"Our workload-optimized, broad portfolio strategy uniquely positions us to enable the global appetite to move, store and process data."

—Navin Shenoy, DCG General Manager
●Adjacent products collectively grew revenue at double digits. Silicon photonics led the adjacencies with significant revenue growth year over year.
●
We see significant opportunities in cloud, networking, AI, and data analytics. As we broadened our product offerings and continued to innovate, the data center market TAM1 expanded to over $70 billion in 2018 and is expected to grow to over $90 billion by 2022.
●2020 vs. 2019
We shipped
R&D spending increased by $194 million, or 1%, driven by the second generation Intel® Xeon® Scalable processorsfollowing:
+Investments in our process technology
+Investments in CCG and Intel® Optane™ DC persistent memory for the data center.DCG
-Ramp down of 5G smartphone modem business
-Incentive-based cash compensation
5-YEAR TRENDSMarketing, General and Administrative
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2021 vs. 2020
■ Revenue $B
— Year over Year Growth
■ Op Income $B
— Year over Year Growth

MG&A spending increased by $363 million, or 5.9%, driven by the following:
+Increase in corporate spending
+Incentive-based cash compensation
2020 vs. 2019
MG&A spending decreased by $170 million, or 3%, driven by the following:
-Corporate spending efficiencies
-Incentive-based cash compensation
1 Source: Intel calculated 2018 and 2022 TAM derived from industry analyst reports.


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Table of Contents


MARKET AND BUSINESS OVERVIEW
Market trends and strategy
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Data is a significant force in society today, and data is generated by intelligent and connected devices and infrastructures, such as phones and automated factories. Data is transmitted through network infrastructure, processed, and analyzed to become real-time information. This real-time information enables actionable insights and is the lifeblood for the future of technology innovation in areas such as AI.
Our thesis is that the massive growth of data worldwide will increase demand to process, analyze, store, and move data. We are one of the few companies that touches every part of the data revolution, and we've invested both organically and acquisitively to capitalize on these demands. We expect the growth momentum in DCG and the other data-centric businesses to continue in the long term.
DCG focuses on three market segments: cloud service providers, enterprise and government, and communication service providers. In 2018, cloud revenue grew as service providers continued to invest in infrastructure to meet the explosive demand for digital services, AI, and data analytics. Enterprise and government revenue was stable, driven by macro environment strength and increased deployment of hybrid cloud solutions and data-intensive workloads. Compared to 2017, where we saw workload migration as the main force of cloud growth, we now see new services as the primary drivers to public cloud demand while enterprise increased on-premises investments, including hybrid and private cloud deployments. In the communication service provider segment, we gained market segment share as customers chose to virtualize and transform their networks and prepare for the 5G transition using Intel® architecture.
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Products and competitiveness
We offer a broad portfolio of platforms and technologies designed to provide workload-optimized performance across compute, storage, and network. These offerings span the full spectrum from the data center core to the network edge. In addition, DCG focuses on lowering the total cost of ownership and on other specific workload optimizations for the enterprise, cloud service provider, and communications service provider market segments, with hardware-enhanced performance, security features, and reliability. DCG's platform value can be extended through Intel adjacent products such as FPGAs and SSDs.
In 2018, we began shipping for revenue the second generation Intel Xeon Scalable processors, formerly code-named Cascade Lake, and they will launch in 2019. The new product delivers performance improvement over the prior generation on popular workloads, includes hardware-based mitigations for certain side-channel vulnerabilities, and introduces new capabilities with support for Intel Optane DC persistent memory. The combination of Intel Xeon processors and Intel Optane memory significantly boosted overall system performance and reduced total cost of ownership compared to the prior generation.

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FINANCIAL PERFORMANCE
DCG REVENUE $BDCG OPERATING INCOME $B
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■Platform
■Adjacent
REVENUE SUMMARY
•
Platform volume growth primarily from cloud and communication service provider market segments, with higher platform ASPs from the adoption of 14nm Intel® Xeon® Scalable processors.
Adjacent growth driven by the continued expansion of silicon photonics and Intel Optane memory technology in 2018.
When comparing 2018 to 2017, revenue from cloud service providers was up 40%, enterprise and government was up 2%, and communication service providers was up 25% (up 28%, down 3%, and up 15%, respectively, when comparing 2017 to 2016). In Q4 2018, we saw all DCG market segments were impacted by weakness in China demand and some cloud customers absorbing existing capacity.
 2018 – 2017 2017 – 2016
(Dollars in millions)% Growth $ Impact % Growth $ Impact
          
Platform volume1
up13% $2,334
 up5% $801
Platform ASPup7% 1,382
 up4% 743
Adjacent Productsup13% 211
 up21% 284
          
Total change in revenue   $3,927
    $1,828
OPERATING INCOME SUMMARY
Operating income increased 37% year over year, reaching an operating margin of 50% in 2018.
(In Millions)  
$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
1,450
 Higher gross margin from DCG platform revenue
215
 Lower period charges associated with product warranty and IP agreements incurred in 2016
(585) Higher factory start-up costs, primarily driven by the ramp of our 10nm process technology
(315) Higher DCG spending and share of technology development and MG&A costs
110
 Other
$7,520
 2016 Operating Income
1 DCG platform products are sold across the cloud service provider, communication service provider, and enterprise and government market segments.    


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 Segment Trends and Results28

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OVERVIEW
IOTG develops high-performance compute for targeted verticals and embedded markets. Our customers include retailers, manufacturers, health care providers, energy companies, automakers, and governments. We facilitate our customers creating, storing, and processing data generated by connected devices to accelerate business transformations.
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HIGHLIGHTS AND SEGMENT IMPERATIVES
●IOTG achieved record revenue and operating income in 2018 on broad business strength and growing demand for edge computing and computer vision-based applications.
"Industries are undergoing data-driven digital transformations fueled by the Internet of Things. We work with our partners' ecosystems to build end-to-end solutions that provide solid business results today and lay the foundation for a more autonomous tomorrow."

—Tom Lantzsch, IOTG General Manager
●
Since 2014, IOTG has had average revenue growth of 14% and operating income growth of 15% per year. As we broaden our product offerings to meet market demand for Internet of Things solutions, our TAM is expected to reach approximately $30 billion by 20221.
●We see significant opportunity for growth driven by an architectural shift toward edge computing, which extends applications, data, and compute from centralized points to be closer to the source inputs, enabling compute-hungry Internet of Things applications.
●
In 2018, we launched hardware solutions such as the Intel® Vision Accelerator Design Products and software solutions like the Intel® Distribution of OpenVINO™ toolkit to accelerate market adoption of computer vision and AI applications.
5-YEAR TRENDS
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■ Revenue $Bintc-20211225_g2.jpg
— Year over Year Growth
MD&A
■ Op Income $B
— Year over Year Growth

40
1
Source: Intel calculated TAM derived from industry analyst reports.

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Restructuring and Other Charges
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020
Employee severance and benefit arrangements$48 $124 
Litigation charges and other2,291 67 
Asset impairment charges287 7 
Total restructuring and other charges$2,626 $198 
Litigation charges and other includes a charge of $2.2 billion in the first quarter of 2021 related to the VLSI Technology LLC (VLSI) litigation, which is recorded as a corporate charge in the "all other" category presented in "Note 3: Operating Segments" within Notes to Consolidated Financial Statements. Refer to "Note 19: Commitments and Contingencies" within Notes to Consolidated Financial Statements for further information on legal proceedings related to the VLSI litigation.
Asset impairment charges includes impairments related to the shutdown in the second quarter of 2021 of two of our non-strategic businesses, the results of which are included in the "all other" category presented in "Note 3: Operating Segments" within Notes to Consolidated Financial Statements. The goodwill related to these businesses was impaired, resulting in a charge of $238 million recognized in the second quarter of 2021 in the "all other" category along with other impairment charges related to these businesses.
Gains (Losses) on Equity Investments and Interest and Other, Net
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Ongoing mark-to-market adjustments on marketable equity securities$(130)$(133)$277 
Observable price adjustments on non-marketable equity securities750 176 293 
Impairment charges(154)(303)(122)
Sale of equity investments and other
2,263 2,164 1,091 
Gains (losses) on equity investments, net$2,729 $1,904 $1,539 
Interest and other, net$(482)$(504)$484 
Gains (Losses) on Equity Investments, Net
Ongoing mark-to-market net gains and losses reported during 2021 were primarily driven by Montage Technology, Co. Ltd. (Montage); 2020 and 2019 net gains and losses were primarily driven by Montage and Cloudera. We sold our interest in Cloudera in 2020.
In the first quarter of 2021, we recognized $471 million in observable price adjustments in our investment in Beijing Unisoc Technology Ltd.
In sale of equity investments and other, we recognized $447 million of initial fair value adjustments related to four companies that went public in 2021; in 2020 we recognized $1.1 billion from Montage becoming marketable and $606 million related to four other equity investments that went public. During 2021, we recognized McAfee Corp. (McAfee) dividends of $1.3 billion, which included a special dividend of $1.1 billion paid in connection with the sale of McAfee's Enterprise Business to Symphony Technology Group, and recognized $228 million related to the partial sale of our investment in McAfee. We recognized McAfee dividends of $126 million in 2020 and $632 million in 2019. In November 2021, McAfee announced an agreement to be acquired by an investor group, which is subject to closing conditions.
Interest and Other, Net
The net loss in interest and other, net in 2021 was relatively flat compared to 2020.
We recognized a net loss in interest and other, net in 2020 compared to a net gain in 2019, primarily due to lower divestiture gains in 2020 compared to 2019.
Provision for Taxes
Years Ended (Dollars in Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Income before taxes$21,703 $25,078 $24,058 
Provision for taxes$1,835 $4,179 $3,010 
Effective tax rate8.5 %16.7 %12.5 %
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MARKET AND BUSINESS OVERVIEW
Market trends and strategy
The world is becoming smarter, more connected, and more data driven, and the Internet of Things sits at the center of this global digital transformation. Through a robust network of devices, software, networks, and sensors, the Internet of Things is transforming the way businesses create products, deliver services, and conduct operations—from schools and hospitals, to retailers and smart factories. Internet of Things-based solutions represent one of the fastest growing segments within the semiconductor industry, with 10% CAGR forecast from 2018 to 20221. However, the Internet of Things is a highly fragmented market with a diverse collection of competitors, products, and vertical segments. As such, IOTG specifically focuses on market sectors such as retail, industrial, and smart infrastructure/cities that align well with Intel’s ability to provide high-performance computing solutions.
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Retailers are under tremendous pressure to compete in the age of accelerated digital disruption brought on by connected consumers and online shopping. We are helping retailers turn their data into powerful new insights. The results are highly curated experiences, improved inventory and supply chain efficiencies, and precision marketing.

The industrial Internet of Things involves making operations smarter, more connected, and, ultimately, autonomous. We enhance collaboration between humans, machines, and enterprise systems from the supply chain to the factory floor. Example use cases include predictive maintenance, machine vision, robotics, quality control, and defect detection.

Infrastructure providers and cities are seeking the best ways to use Internet of Things technology to enhance quality of services, improve public safety, reduce congestion, and achieve new levels of efficiency. We help cities and service providers turn data into actionable insights to enable smarter, safer and more efficient solutions.
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By 2021, we expect approximately 80% of data traffic will be video². Processing high-quality video requires the ability to rapidly analyze vast streams of data near the source and respond in real time, moving only relevant insights to the cloud. To process video data efficiently, our customers need the right solution for the job. We offer a broad range of hardware, software tools, and ecosystem programs to help scale vision technology across Internet of Things verticals and match specific needs with the right performance, cost, and power efficiency at every point in an Internet of Things architecture. Use cases include machine vision, industrial automation, and intelligent traffic management and pedestrian safety.
Products and competitiveness
IOTG utilizes adjacent products across Intel while making the investments needed to adapt products to the specific requirements for our vertical segments. We offer end-to-end solutions with our wide spectrum of products, including Intel Atom® and Intel® Xeon® processor-based computing, wireless connectivity, FPGAs, Movidius VPUs, and developer tools such as the OpenVINO™ software toolkit. IOTG product development focuses on addressing the key challenges businesses face when implementing Internet of Things solutions, including interoperability, connectivity, safety, security, industrial use conditions, and long life support.
IOTG enables a global ecosystem of industry partners, developers, and innovators to create solutions based on our products that accelerate return on investment and time-to-value for end customers. These Intel® Internet of Things Market Ready Solutions are vetted and tested in the market, scalable, repeatable, commercially available, and fully supported through our ecosystem partners. These solutions can help streamline operations, automate manual tasks, provide insights from data, and more.





1
Source:Intel calculated Internet of Things TAM CAGR derived from industry analyst reports.
²
Source: Cisco Visual Networking Index: Forecast and Trends, 2017-2022, updated November 26, 2018.

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FINANCIAL PERFORMANCE
IOTG REVENUE $BIOTG OPERATING INCOME $B
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■Platform
■Adjacent
REVENUE SUMMARY
2018 – 2017
Net revenue increased $286 million, or 9%, driven by $632 million higher IOTG platform unit sales, offset by $212 million mix of platform products sold and $134 million lower adjacent revenue due to the divestiture of Wind River in June 2018. After adjusting for Wind River, IOTG revenue grew $447 million, or 16%, year over year. Revenue grew due to strength across the retail, industrial, video, and other market segments.
2017 – 2016
Net revenue increased $531 million, driven by $329 million higher IOTG platform unit sales and $176 million growth in IOTG adjacent products, including $74 million from milestone-based revenue. Revenue grew across the retail, industrial, and smart video market segments.
OPERATING INCOME SUMMARY
2018 – 2017
Operating income increased $330 million due to higher revenue and lower spending as we reprioritized investments within the automotive business and Wind River.
2017 – 2016
Operating income increased $65 million due to higher revenue offset by higher investment in growth areas such as automotive, and by increased share of technology development and MG&A costs.



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 Segment Trends and Results31

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OVERVIEW
NSG's core offerings include Intel® Optane™ and Intel® 3D NAND technologies, driving innovation in SSDs and next-generation memory and storage products. Our customers include enterprise and cloud-based data centers, users of business and consumer desktops and laptops, and a variety of Internet of Things application providers. We are ramping 64-layer (64L) triple-level cell (TLC) and quad-level cell (QLC) NAND technologies, and Intel Optane technology in innovative new form factors and densities to address the challenges our customers face in a rapidly evolving technological landscape.
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HIGHLIGHTS AND SEGMENT IMPERATIVES
●
Achieved more than 20% revenue growth in 2018 and drove improvements in operating margins by approximately $250 million to approximately break even for 2018.

“Our Optane™ technology products are critical to helping our customers analyze valuable data in ways that allow real time business impact and our Intel QLC 3D NAND products enable them to store more data for cost effective analysis.”  

—Rob Crooke, NSG General Manager
●
Introduced the industry's first PCIe*-based QLC SSD and grew our Intel® Optane™ and NAND product lines with a focus on new densities and innovative form factors in 2018, resulting in 64L QLC products making up more than half of our sales volume.
●
Announced the release of Intel® Optane™ DC Persistent memory, available on next-generation Intel® Xeon® processors for datacenters—which is redefining the memory/storage hierarchy and bringing persistent, large-scale, memory closer to the processor.
●During 2018, Intel and Micron announced they will independently develop future generations of 3D NAND and 3D XPoint technology and in January 2019, Micron called our interest in IMFT. The IMFT agreement provides for supply for up to one year after the close of the transaction.
5-YEAR TRENDS
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■ Revenue $Bintc-20211225_g2.jpg
— Year over Year Growth
MD&A
■ Op Income $B
41

Table of Contents

Our effective tax rate decreased in 2021 compared to 2020, primarily driven by one-time tax benefits due to the restructuring of certain non-US subsidiaries as well as a higher proportion of our income in non-US jurisdictions. As a result of the restructuring, we established deferred tax assets and released the valuation allowances of certain foreign deferred tax assets. The majority of these deferred tax assets established in 2021 fully offset the deferred tax liabilities recognized in 2020 driven by a change in our permanent reinvestment assertion with respect to undistributed earnings in China, as a result of our planned divestiture of our NAND memory business.
Our effective tax rate increased in 2020 compared to 2019, primarily driven by a change in our permanent reinvestment assertion with respect to undistributed earnings in China, as a result of our planned divestiture of our NAND memory business. It also increased due to the reduction in our foreign derived intangible income benefit in 2020.

Liquidity and Capital Resources
We believe we have sufficient sources of funding to meet our business requirements for the next 12 months and in the longer term. Cash generated by operations, supplemented by our total cash and investments1, is our primary source of liquidity for funding our strategic business requirements. Our short-term requirements include capital expenditures for worldwide manufacturing and assembly and test, including investments in our process technology roadmap; working capital requirements; and potential acquisitions, strategic investments, and dividends. Our long-term requirements incrementally contemplate additional investments in the significant manufacturing expansion plans we announced as part of our IDM 2.0 strategy and additional investments to accelerate our process technology. These plans include investment to build two new fabs in Arizona as well as plans for a next phase of capacity expansions in Ohio, Europe, and other global locations. Our plans include utilizing a "smart capital" strategy in which we focus first on aggressively building out fab shells, which are the smaller portion of the overall cost of a fab but have the longest lead time, giving us flexibility in how and when we bring additional capacity and tools online. Additionally, as we have faced industry shortages of substrates and other components, we have increasingly entered into long-term agreements with suppliers and foundry service providers, some of which involve prepayments that will help us secure future supply.
As we invest in these expansions and in the acceleration of our process technology roadmap, we expect our capital expenditures to increase above historical levels for the next several years. The prepayments for future supply of substrates and other components accelerate cash outflows into the near term, and we expect to apply the prepayments to future purchases, resulting in a positive impact on our liquidity in subsequent periods.
We expect our capital expenditures to increase above historical levels for the next several years. As of December 25, 2021 we had commitments for capital expenditures of $22.3 billion for 2022, and we expect our total capital expenditures for 2022 to be above that amount. We also had $4.6 billion in capital expenditures committed in the long term. As of December 25, 2021, other purchase obligations and commitments in 2022 under our binding commitments for purchases of goods and services were $3.1 billion with an additional $9.3 billion committed in the long term.
We have additional obligations as part of our ordinary course of business, beyond those committed for capital expenditures and other purchase obligations and commitments for purchases of goods and services. For example, see "Note 19: Commitments and Contingencies" within Consolidated Financial Statements for information about our lease obligations, which include supply agreements structured as leases, "Note 8: Income Taxes" within Consolidated Financial Statements for information about our tax obligations related to Tax Reform enacted in 2017 for the one-time transition tax on previously untaxed foreign earnings, and "Note 13: Borrowings" within Consolidated Financial Statements for information about our long-term debt obligations. The expected timing of payments of our obligations is estimated based on current information. Timing of payments and actual amounts paid may be different, depending on the timing of receipt of goods or services, or changes to agreed-upon amounts for some obligations. In addition, some of our purchasing requirements are not current obligations and are therefore not included in the amounts above. For example, some of these requirements are not handled through binding contracts or are fulfilled by vendors on a purchase order basis within short time horizons.
We anticipate that we will continue to primarily rely on operating cash flows, supplemented by our total cash and investments1, to fund IDM 2.0 and other cash requirements in the ordinary course of business. We also expect to benefit from government incentives under pending legislation, and any incentives above our current expectations would enable us to increase the pace and size of our IDM 2.0 investments. Conversely, incentives below our expectations would increase our anticipated cash requirements. We expect our increased capital investments to pressure our free cash flow in the short term. When assessing our current sources of liquidity, we include our total cash and investments1 as shown in the following table:
(In Millions)Dec 25, 2021Dec 26, 2020
Cash and cash equivalents$4,827 $5,865 
Short-term investments2,103 2,292 
Trading assets21,483 15,738 
Other long-term investments840 2,192 
Loans receivable and other240 947 
Total cash and investments1
$29,493 $27,034 
Total debt$38,101 $36,401 
1 See "Non-GAAP Financial Measures" within MD&A.
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MARKET AND BUSINESS OVERVIEW
Market trends and strategy
As technology penetration continues to grow worldwide, the amount of data that is produced has grown exponentially. Audio, video, and sensory data is produced and collected by a vast array of devices that require a significant increase in storage and memory technology. This has resulted in the storage and memory TAM growing to approximately $180 billion in 2018, a 25% increase from 20171. Our focus continues to be within the high-performance compute, financial services, cloud service provider, and Internet usage markets. NSG delivered over 20% annual revenue growth and improved profitability to break even for 2018.
With data growth expanding, our customers face the challenge of ensuring that critical, or "hot," data is close to the CPU for rapid access. Our innovations in technology address the need for various storage tiers, based on different usages, while keeping a focus on performance and cost. As customers look to improve the performance of their storage and memory devices, NSG is seeing and leading a transition to the PCIe* interface with Non-Volatile Memory Express* for SSDs, as well as efficiency and game-changing form factors like the "ruler" based on EDSFF.
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Products and competitiveness
The acceleration in data growth across our customer base requires significant innovation in storage and memory technology. Our storage and memory roadmap has led the way in reimagining usages and architecting innovative solutions that have disrupted the industry with 64L 3D NAND TLC and QLC solutions, as well as Intel® Optane™ technology. We have launched over 15 new products in 2018 to keep up with the evolving business needs of our customers. These new products have driven our 64L products to be more than half of 2018 NSG volume and a meaningful ramp in the Optane business.
A key highlight in 2018 was the announcement of Intel® Optane™ DC Persistent Memory, available on next-generation Intel® Xeon® processor platforms for data center usages. This technology redefines the memory storage hierarchy and offers the performance of memory with the large capacities and persistence characteristics of storage. We are also leading the way in the NAND industry with the announcement of the first PCIe* QLC 3D NAND SSD for the Data Center and Client markets. This new technology will enable innovative new form factors and higher capacity drives. With the addition of these new NAND and Optane product lines, we have strengthened our commitment to driving customer value through platform-connected features and solutions.
INTEL® OPTANE™ TECHNOLOGY
INTEL® 3D NAND TECHNOLOGY
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1
Source: Gartner, Inc., Forecast: DRAM Market Statistics, Worldwide, 2014-2021, 3Q18 Update, Gartner, Inc., Forecast: Hard-Disk Drives, Worldwide, 2014-2022, 2Q18 Update, Gartner, Inc., Forecast: NAND Flash Supply and Demand, Worldwide, 1Q16-4Q18, 2Q18 Update.

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FINANCIAL PERFORMANCE
NSG REVENUE $BNSG OPERATING INCOME $B

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REVENUE SUMMARY
2018 – 2017
Net revenue increased $787 million, driven by $2.6 billion increase in unit sales due to strong demand in data center and client SSD and the ramp of Intel Optane technology products, partially offset by $1.8 billion lower ASP due to NAND market pricing weakness and mix of products sold.
2017 – 2016
Net revenue increased $944 million, driven by $1.6 billion from higher unit sales due to strong demand in data center, partially offset by $655 million lower ASP due to market conditions and the ramp of our new TLC 3D NAND product line, which has a lower cost and ASP compared to our primary multi-level cell 3D NAND.
OPERATING INCOME SUMMARY
2018 – 2017
Operating income improved $255 million as our sales mix shifted to our latest 64L NAND and we continued to see the cost ramp at Fab 68. The improved unit costs and higher unit sales more than offset the decline in ASP. In addition, we had a total of $160 million earned government grants benefiting 2018.
2017 – 2016
Operating income increased $284 million, driven primarily by $725 million unit cost reductions due to the cost improvements associated with Fab 68 and lower costs from the ramp of the Intel® 3D NAND product line compared to prior generation NAND products. The lower unit cost impact was offset by $380 million lower gross margin from NSG revenue.


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OVERVIEW
PSG offers programmable semiconductors, primarily FPGAs and related products for a broad range of market segments, including communications, data center, industrial, and military. PSG collaborates with the other Intel businesses to deliver FPGA acceleration in tandem with Intel microprocessors. This "better together" integration broadens the use of FPGAs and combines the benefits of both technologies to allow more flexibility for systems to operate with increased efficiency and higher performance.
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HIGHLIGHTS AND SEGMENT IMPERATIVES
●
PSG achieved a record design win year in 2018, driven by Intel® Arria® 10 and Intel® Stratix® 10 device families.
"The increased adoption of FPGA and eASIC solutions across data center, networking, and IoT is driving value to our data-centric businesses."

—Dan McNamara, PSG General Manager
●
In 2018 we announced the Intel® Programmable Acceleration Card (Intel® PAC) with Intel® Stratix®10 SX FPGA, which operates seamlessly with Intel Xeon processors and an acceleration software stack, extending our portfolio of FPGA acceleration platforms.
●In 2018, we acquired eASIC, a leading provider of structured application-specific integrated circuits (ASICs). These products expand PSG’s chip portfolio to better meet customers’ needs to further optimize cost and power. Customers have more choices and can achieve faster time-to-market and lower development costs—including a low-cost conversion process from FPGA to structured ASICs.
●In 2019, PSG will continue to focus on becoming the multi-function acceleration solution of choice for continuously evolving technologies from the edge to the cloud.
3-YEAR TRENDS
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■ Revenue $Bintc-20211225_g2.jpg
— Year over Year Growth
MD&A
■ Op Income $B

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Table of Contents



MARKET AND BUSINESS OVERVIEW
Market trends and strategy
PSG delivers solutions in the programmable logic device (PLD) market, primarily FPGAs, to accelerate applications that help secure, power, and connect billions of devices and the infrastructure of the smart, connected, data-centric world. PSG enables a broad range of solutions targeting the data center, wireless, networking, military, medical, and industrial markets. The configurability and efficiency of FPGAs provide advantages to enable transformative applications such as 5G wireless, network function virtualization offload, and edge acceleration for video analytics and Industry 4.0. PSG has expanded its product portfolio by providing Intel® PAC, complete with an acceleration software stack, enabling new customers to plug cards directly into an Intel® Xeon® processor-based server for application accelerations in markets such as finance, genomics, video transcoding, and database acceleration.
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Products and competitiveness
With the rise of pervasive connectivity and autonomous transactions, vast networks of devices and systems are linked from the edge through infrastructure to the cloud. The Intel® FPGA portfolio enables this transformation with discrete FPGAs and software-defined, hardware-based, multi-function acceleration cards that allow faster development times, high performance, and power efficiency with lower overall total cost of ownership. In the cloud, where workloads shift dynamically and algorithms change, Intel FPGAs are the ideal solution for adapting to new demands through reconfigurability.

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FINANCIAL PERFORMANCE
PSG REVENUE $BPSG OPERATING INCOME $B
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REVENUE SUMMARY
2018 – 2017
Revenue increased$221 million, driven by growth in the data center market segment and our advanced products (28nm, 20nm, and 14nm process technologies), which grew approximately 60% from 2017.
2017 – 2016
Revenue increased $233 million, driven by growth in industrial, military, and automotive market segments, as well as in our advanced products and last-time buys of our legacy products. Also, a one-time $99 million deferred revenue write-down due to the acquisition of Altera negatively impacted 2016 PSG revenue.
OPERATING INCOME SUMMARY
2018 – 2017
Operating income was flat year over year, at$466 million. Revenue increased from the growth in the data center and advanced products, but was offset by higher costs from an unfavorable product mix and increased investments.
2017 – 2016
Operating income increased $562 million. Higher revenue and operational synergies contributed $111 million of the year over year increase. The remainder was due to one-time acquisition-related charges, including a $99 million deferred revenue write-down with a $64 million operating income impact and an inventory valuation adjustment of approximately $387 million.

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RESTRUCTURING AND OTHER CHARGES
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
2016 Restructuring Program $(72) $135
 $1,681
ISecG separation costs and other charges —
 249
 63
Total restructuring and other charges $(72) $384
 $1,744
We commenced the 2016 Restructuring Program in the second quarter of 2016 and the program was completed in 2017. Other charges consist primarily of expenses associated with the divestiture of ISecG that was completed in Q2 2017. For further information, see "Note 8: Restructuring and Other Charges" within the Consolidated Financial Statements.
GAINS (LOSSES) ON EQUITY INVESTMENTS AND INTEREST AND OTHER, NET
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Gains (losses) on equity investments, net $(125) $2,651
 $506
Interest and other, net $126
 $(349) $(703)
GAINS (LOSSES) ON EQUITY INVESTMENTS, NET
We recognized ongoing mark-to-market net losses on our marketable equity securities of $129 million in 2018, primarily related to changes in value of our interests in ASML Holding N.V. (ASML) and Cloudera, Inc. In addition to the mark-to-market losses, we also recognized impairment charges, including a $290 million impairment charge to our equity method investment in IMFT. These losses were partially offset by $202 million of upward observable price adjustments.
We recognized $3.5 billion of net realized gains on sales in 2017, primarily related to sales of a portion of our interest in ASML. The higher net realized gains were partially offset by $833 million of impairment charges and our share of equity method investee losses in 2017. We recognized higher reported gains in 2017 compared to 2016, primarily related to sales of a portion of our interest in ASML.
INTEREST AND OTHER, NET
We recognized a net gain in interest and other in 2018 compared to a net loss in 2017, primarily due to lower losses on debt conversions, higher assets under construction resulting in more capitalized interest, and larger divestiture gains in 2018 compared to 2017.
We recognized a lower net loss in interest and other in 2017 compared to 2016, primarily due to higher interest income in 2017.
PROVISION FOR TAXES
Years Ended
(Dollars in Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Income before taxes $23,317
 $20,352
 $12,936
Provision for taxes $2,264
 $10,751
 $2,620
Effective tax rate 9.7% 52.8% 20.3%
The majority of the decrease in our effective tax rate in 2018 compared to 2017 resulted from initial tax expense from the U.S. Tax Cuts and Jobs Act (Tax Reform) and the tax impacts from the ISecG divestiture that we had in 2017, but not in 2018. The reduction of the U.S. statutory rate, combined with the net impact of the enactment or repeal of specific tax law provisions through the Tax Reform, drove the remaining decrease in our effective tax rate in 2018. For further information on Tax Reform and its impacts, see "Note 9: Income Taxes" within the Consolidated Financial Statements.
Substantially all of the increase in our effective tax rate in 2017 compared to 2016 was driven by the one-time provisional impacts from the Tax Reform enacted on December 22, 2017, the 2017 ISecG divestiture, and a higher proportion of our income in higher tax rate jurisdictions.

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LIQUIDITY AND CAPITAL RESOURCES
We consider the following when assessing our liquidity and capital resources:
(Dollars in Millions) Dec 29,
2018		 Dec 30,
2017
Cash and cash equivalents, short-term investments, and trading assets $11,650
 $14,002
Other long-term investments $3,388
 $3,712
Loans receivable and other $1,550
 $1,097
Reverse repurchase agreements with original maturities greater than three months $250
 $250
Total debt $26,359
 $26,813
Temporary equity $419
 $866
Debt as a percentage of permanent stockholders’ equity 35.4% 38.8%
Cash generated by operations is our primary source of liquidity. We maintain a diverse investment portfolio that we continually analyze based on issuer, industry, and country. When assessing our sources of liquidity, we include investments as shown in the preceding table. Substantially all of our investments in debt instruments and financing receivables are in investment-grade securities.
Other potential sources of liquidity include our commercial paper program and our automatic shelf registration statement on file with the SEC, pursuant to which we may offer an unspecified amount of debt, equity, and other securities. Under our commercial paper program, we have an ongoing authorization from our Board of Directors to borrow up to $10.0 billion. As of December 29, 2018, $480 million of commercial paper remained outstanding. During 2018,2021, we remarketedissued a total of $423 million$5.0 billion aggregate principal amount of bonds issued by the Industrial Development Authority of the City of Chandler, Arizonasenior notes, and the State of Oregon Business Development Commission.entered into a $5.0 billion variable-rate revolving credit facility that matures in March 2026. We also repaid $600$500 million of our 2.50%1.70% senior notes that matured in November 2018May 2021 and paid$2.0 billion of our 3.30% senior notes that matured in October 2021. As of December 25, 2021, we had no outstanding commercial paper or borrowing on the revolving credit facility.
We maintain a diverse investment portfolio that we continually analyze based on issuer, industry, and country. Substantially all of our investments in debt instruments are in investment-grade securities.
In the first quarter of 2021, we repurchased the remaining $2.4 billion in cash to satisfy conversion requests for a portionshares of our $2.0planned $20.0 billion 3.25% junior subordinated convertible debentures due 2039.
The enactment of Tax Reformshare repurchases announced in December 2017 imposed a tax on all previously untaxed earnings of non-U.S. subsidiaries of U.S. corporations. Future distributions of non-U.S. assets to the U.S. are no longer subject to U.S. taxation in most cases. As a result, in Q4 2017 we recognized a one-time provisional transition tax expense of $6.1 billion, which was adjusted to $5.9 billion in 2018.October 2019. We expect our future stock repurchases to paybe significantly below our levels from the tax in annual installments from 2019 through 2026. We believe that our current U.S. sources of cash and liquidity are sufficient to meet our tax liability.last few years.
During Q3 2017, we acquired 97.3% of Mobileye's outstanding ordinary shares for $14.5 billion net cash. We funded the acquisition of shares with cash held by our non-U.S. subsidiaries. During Q2 2018, we acquired the remaining outstanding ordinary shares for $380 million.
Sources and Uses of Cash
(In Millions)
We believe we have sufficient financial resources to meet our business requirements in the next 12 months, including capital expenditures for worldwide manufacturing and assembly and test; working capital requirements; and potential acquisitions, strategic investments, dividends, and common stock repurchases.

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SOURCES AND USES OF CASH
(In Millions)
a060cashflow2.jpg
In summary, our cash flows for each period were as follows:
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Net cash provided by operating activities $29,432
 $22,110
 $21,808
Net cash provided by operating activities$29,991 $35,384 $33,145 
Net cash used for investing activities (11,239) (15,762) (25,817)Net cash used for investing activities(25,167)(20,796)(14,405)
Net cash provided by (used for) financing activities (18,607) (8,475) (5,739)Net cash provided by (used for) financing activities(5,862)(12,917)(17,565)
Net increase (decrease) in cash and cash equivalents $(414) $(2,127) $(9,748)Net increase (decrease) in cash and cash equivalents$(1,038)$1,671 $1,175 

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OPERATING ACTIVITIESOperating Activities
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities.
For 20182021 compared to 2017,2020, the $7.3$5.4 billion decrease in cash provided by operating activities was primarily driven by a decrease in net working capital contributions and cash paid to settle a prepaid customer supply agreement in Q1 2021, partially offset by a McAfee special dividend received in Q3 2021.
For 2020 compared to 2019, the $2.2 billion increase in cash provided by operating activities was primarily due to higher net income, offset by changes in working capital. Changes in working capital were driven by taxesaccounts receivable, inventory, and accounts receivables,income taxes, offset by relatively flat inventory levels. Income taxes paid, net of refunds, in 2018 compared to 2017 were flat as the benefit of a lower U.S. corporate tax rate was offset by the payment related to the 2017 U.S. Tax Reform transition tax. We received $1.4 billion of customer depositsother assets and prepaid supply agreements in 2018, net of customer utilization, compared to $1.1 billion in 2017.liabilities.
For 2017 compared to 2016, the $302 million increase in cash provided by operating activities was due to changes to working capital partially offset by adjustments for non-cash items and lower net income. Tax Reform did not have an impact on our 2017 cash provided by operating activities. The increase in cash provided by operating activities was driven by increased income before taxes and $1.1 billion receipts of customer deposits and prepaid supply agreements. These increases were partially offset by increased inventory and accounts receivable. Income taxes paid, net of refunds, in 2017 compared to 2016 were $2.9 billion higher due to higher income before taxes, taxable gains on sales of ASML, and taxes on the ISecG divestiture.
INVESTING ACTIVITIESInvesting Activities
Investing cash flows consist primarily of capital expenditures;expenditures, investment purchases, sales, maturities, and disposals;disposals, and proceeds from divestitures and cash used for acquisitions. Our capital expenditures were $15.2$18.7 billion in 20182021 ($11.814.3 billion in 20172020 and $9.6$16.2 billion in 2016)2019).
The decreaseincrease in cash used for investing activities in 20182021 compared to 20172020 was primarily due to lower cash paid on acquisitions and increased cash from net trading asset activity. This wasan increase in capital expenditures, partially offset by increased capital expenditures, neta decrease in purchases of available-for-sale debt investments activity, decreased proceeds from divestitures, and decreased sales of equity investments (substantially all from ASML sales).investments.
The decreaseincrease in cash used for investing activities in 20172020 compared to 20162019 was primarily due to higher net activityan increase in purchases of available-for-sale debt investments in 2017, proceeds from our divestiture of ISecG in 2017, and highertrading assets, offset by an increase in maturities and sales of available-for-sale debt investments and trading assets, and a decrease in 2017. This activity was partially offset by higher capital expenditures in 2017.and cash paid for acquisitions.
FINANCING ACTIVITIESFinancing Activities
Financing cash flows consist primarily of repurchases of common stock, payment of dividends to stockholders, issuance and repayment of short-term and long-term debt, repurchases of common stock, and proceeds from the sale of shares of common stock through employee equity incentive plans.
The increasedecrease in cash used for financing activities in 20182021 compared to 20172020 was primarily due to decreased long-term debt issuance and increaseda decrease in repurchases of common stock. stock and a decrease in repayments of debt and debt conversions, partially offset by a decrease in cash provided by long-term debt issuances.
During 2018,2021, we repurchased $10.7$2.4 billion of common stock under our authorized common stock repurchase program, compared to $3.6$14.2 billion in 2017. In 2018, the Board approved a $15.0 billion increase in our authorized stock repurchase program. As of December 29, 2018, $17.3 billion remained available for repurchasing common stock under the repurchase authorization limit. We base our level of common stock repurchases on internal cash management decisions, and this level may fluctuate.2020. Our total dividend payments were $5.5$5.6 billion in 20182021 compared to $5.1$5.6 billion in 2017.2020. We have paid a cash dividend in each of the past 105117 quarters. In Q1 2019, the Board declared a quarterly cash dividend of $0.315 per share of common stock, payable on March 1, 2019 to stockholders of record on February 7, 2019.
The increasedecrease in cash used for financing activities in 20172020 compared to 20162019 was primarily due to netan increase in cash provided by long-term debt activity, whichissuances, offset by an increase in repayments of debt and debt conversions and an increase in repurchases of common stock.
Critical Accounting Estimates
The methods, assumptions, and estimates that we use in applying our accounting policies may require us to apply judgments regarding matters that are inherently uncertain. We consider an accounting policy to be a critical estimate if: (1) we must make assumptions that were uncertain when the judgment was made, and (2) changes in the estimate assumptions, or selection of a use of cashdifferent estimate methodology, could have a significant impact on our financial position and the results that we report in 2017 compared to a source of cash in 2016. Additionally, cash used for common stock repurchasesour Consolidated Financial Statements. While we believe that our estimates, assumptions, and judgments are reasonable, they are based on information available when the estimate was higher in 2017 compared to 2016.


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CONTRACTUAL OBLIGATIONS
Significant contractual obligations as of December 29, 2018 wereRefer to "Note 2: Accounting Policies" within the Consolidated Financial Statements for further information on our critical accounting estimates and policies, which are as follows:
▪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.
Non-GAAP Financial Measures
   Payments Due by Period
(In Millions) Total 
Less Than
1 Year
 1–3 Years 3–5 Years 
More Than
5 Years
Operating lease obligations $835
 $229
 $314
 $171
 $121
Capital purchase obligations1 
 9,029
 7,888
 795
 345
 1
Other purchase obligations and commitments2 
 3,249
 1,272
 1,781
 178
 18
Tax obligations3
 4,732
 143
 426
 1,234
 2,929
Long-term debt obligations4
 40,187
 1,518
 7,583
 6,173
 24,913
Other long-term liabilities5
 1,626
 722
 708
 95
 101
Total6
 $59,658
 $11,772
 $11,607
 $8,196
 $28,083
In addition to disclosing financial results in accordance with US GAAP, this document contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance. Certain of these non-GAAP financial measures are used in our performance-based RSUs and our annual cash bonus plan.
1
Capital purchase obligations represent commitments for the construction or purchase of property, plant
Long-term gross margin outlook range is provided on a non-GAAP basis and excludes the impact of amortization of acquisition-related intangible assets and share-based compensation expense. We are unable to provide a full reconciliation of this measure to the corresponding GAAP measure without unreasonable efforts, as the amount and equipment. They were not recorded as liabilities on our consolidated balance sheets as of December 29, 2018, as we had not yet received the related goods nor taken title to the property.
2
Other purchase obligations and commitments include payments due under various types of licenses and agreements to purchase goods or services, as well as payments due under non-contingent funding obligations.
3
Tax obligations represent the future cash payments related to Tax Reform enacted in 2017 for the one-time transition tax on our previously untaxed foreign earnings. For further information, see "Note 9: Income Taxes" within the Consolidated Financial Statements.
4
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. Any future settlement of convertible debt would impact our cash payments.
5
Amounts represent future cash payments to satisfy other long-term liabilities recorded on our consolidated balance sheets, including the short-term portion of these long-term liabilities. Derivative instruments are excluded from the preceding table, as they do not represent the amounts that may ultimately be paid.
6
Total excludes contractual obligations already recorded on our consolidated balance sheets as current liabilities, except for the short-term portions of long-term debt obligations and other long-term liabilities.
The expected timing of paymentssuch adjustments on a long-term basis are subject to considerable uncertainty. We believe such a reconciliation would also imply a degree of precision that is inappropriate for this forward-looking measure.
Our non-GAAP financial measures reflect adjustments based on one or more of the obligations in the preceding table is estimated based on current information. Timing of payments and actual amounts paid may be different, depending on the time of receipt of goods or services, or changes to agreed-upon amounts for some obligations.
Contractual obligations for purchases of goods or services included in "Other purchase obligations and commitments" in the preceding table include agreements that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. For obligations with cancellation provisions, the amounts included in the preceding table were limited to the non-cancelable portion of the agreement terms or the minimum cancellation fee.
For the purchase of raw materials, we have entered into certain agreements that specify minimum prices and quantities based on a percentage of the total available market or based on a percentage of our future purchasing requirements. Due to the uncertainty of the future market and our future purchasing requirements,following items, as well as the non-binding nature of these agreements, obligations under these agreementsrelated income tax effects where applicable. Income tax effects have been excludedcalculated using an appropriate tax rate for each adjustment. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with US GAAP, and the financial results calculated in accordance with US GAAP and reconciliations from the preceding table. Our purchase orders for other products are based on our current manufacturing needs and are fulfilled by our vendors within short time horizons. In addition, some of our purchase orders represent authorizations to purchase rather than binding agreements.these results should be carefully evaluated.
Contractual obligations that are contingent upon the achievement of certain milestones have been excluded from the preceding table. Most of our milestone-based contracts are tooling related for the purchase of capital equipment. These arrangements are not considered contractual obligations until the milestone is met by the counterparty.As of December 29, 2018, assuming that all future milestones are met, the additional required payments would be approximately $688 million.
For the majority of restricted stock units (RSUs) granted, the number of shares of common stock issued on the date the RSUs vest is net of the minimum statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. The obligation to pay the relevant taxing authority is excluded from the preceding table, as the amount is contingent upon continued employment. In addition, the amount of the obligation is unknown, as it is based in part on the market price of our common stock when the awards vest.

Non-GAAP adjustment or measureDefinitionUsefulness to management and investors
NAND memory businessOur NAND memory business is subject to a pending sale to SK hynix, as announced in October 2020. While the second closing of the sale is still pending, we completed the first closing on December 29, 2021, subsequent to our fiscal 2021 year-end. We will fully deconsolidate our ongoing interests in the NAND OpCo Business in the first quarter of 2022.We exclude the impact of our NAND memory business in certain non-GAAP measures. While the second closing of the sale is still pending and subject to closing conditions, management does not currently view the business as part of the company’s core operations or its long-term strategic direction. We believe these adjustments provide investors with a useful view, through the eyes of management, of the company’s core business model and how management currently evaluates core operational performance. We believe they also provide investors with an additional means to understand the potential impact of the divestiture over time. In making these adjustments, we have not made any changes to our methods for measuring and calculating revenue or other financial statement amounts.
Acquisition-related adjustmentsAmortization of acquisition-related intangible assets consists of amortization of intangible assets such as developed technology, brands, and customer relationships acquired in connection with business combinations. Charges related to the amortization of these intangibles are recorded within both cost of sales and MG&A in our US GAAP financial statements. Amortization charges are recorded over the estimated useful life of the related acquired intangible asset, and thus are generally recorded over multiple years.We exclude amortization charges for our acquisition-related intangible assets for purposes of calculating certain non-GAAP measures because these charges are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. These adjustments facilitate a useful evaluation of our current operating performance and comparison to our past operating performance and provide investors with additional means to evaluate cost and expense trends.
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Non-GAAP adjustment or measureDefinitionUsefulness to management and investors
Restructuring and other chargesRestructuring charges are costs associated with a formal restructuring plan and are primarily related to employee severance and benefit arrangements. Other charges include a charge related to the VLSI litigation, goodwill and asset impairments, pension charges, and costs associated with restructuring activity.We exclude restructuring and other charges, including any adjustments to charges recorded in prior periods, for purposes of calculating certain non-GAAP measures because these costs do not reflect our core operating performance. These adjustments facilitate a useful evaluation of our core operating performance and comparisons to past operating results and provide investors with additional means to evaluate expense trends.
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(Gains) losses from divestiture		 Consolidated ResultsGains or losses are recognized in connection with a divestiture.We exclude gains or losses resulting from divestitures for purposes of calculating certain non-GAAP measures because they do not reflect our current operating performance. These adjustments facilitate a useful evaluation of our current operating performance and Analysiscomparisons to past operating results.
Ongoing mark-to-market on marketable equity securities42After the initial mark-to-market adjustment is recorded upon a security becoming marketable, gains and losses are recognized from ongoing mark-to-market adjustments of our marketable equity securities.We exclude these ongoing gains and losses for purposes of calculating certain non-GAAP measures because we do not believe this volatility correlates to our core operational performance. These adjustments facilitate a useful evaluation of our current operating performance and comparisons to past operating results.
Free cash flowWe reference a non-GAAP financial measure of free cash flow, which is used by management when assessing our sources of liquidity, capital resources, and quality of earnings. Free cash flow is operating cash flow adjusted to exclude additions to property, plant and equipment.This non-GAAP financial measure is helpful in understanding our capital requirements and provides an additional means to evaluate the cash flow trends of our business. We exclude additions to held for sale NAND property, plant and equipment because the additions are not representative of our long-term capital requirements and these assets were sold upon the first closing of the transaction that occurred on December 29, 2021, subsequent to our fiscal 2021 year-end.
Total cash and investmentsTotal cash and investments is used by management when assessing our sources of liquidity, which includes cash and cash equivalents, short-term investments, trading assets, other long-term investments, and loans receivable and other.This non-GAAP measure is helpful in understanding our capital resources and liquidity position.
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During 2014, we entered into a series of agreements with Tsinghua Unigroup Ltd. (Tsinghua Unigroup), an operating subsidiary of Tsinghua Holdings Co. Ltd., to, among other things, jointly develop Intel architecture and communications-based solutions for phones. Subject to regulatory approvals and other closing conditions, we have agreed to invest up to $9.0 billion Chinese yuan (approximately $1.5 billion as of the date of the agreement) for a minority stake of Beijing Unisoc Technology Ltd. (Unisoc), formally Beijing UniSpreadtrum Technology Ltd. During 2015, we invested $966 million to complete the first phase of the equity investment, and the second phase of the investment will require additional funding of approximately $500 million; however, as our obligation is contingent upon regulatory approvals and other closing conditions, it has been excluded from the preceding table.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are affected by changes in currency exchange and interest rates, as well as equity and commodity prices. Our risk management programs reduce, but may not entirely eliminate, the impacts of these risks. All of the following potential changes are based on sensitivity analyses performed on our financial positions as of December 29, 2018 and December 30, 2017. Actual results may differ materially.
CURRENCY EXCHANGE RATES
We are exposed to currency exchange risks of non-U.S.-dollar-denominated investments in debt instruments and loans receivable, and may economically hedge this risk with foreign currency contracts, such as currency forward contracts or currency interest rate swaps. Gains or losses on these non-U.S.-currency investments are generally offset by corresponding losses or gains on the related hedging instruments. We are exposed to currency exchange risks from our non-U.S.-dollar-denominated debt indebtedness and may use foreign currency contracts designated as cash flow hedges to manage this risk.
Substantially all of our revenue is transacted in U.S. dollars. However, a significant portion of our operating expenditures and capital purchases are incurred in other currencies, primarily the euro, the Japanese yen, the Israeli shekel, and the Chinese yuan. We have established currency risk management programs to protect against currency exchange rate risks associated with non-U.S. dollar forecasted future cash flows and existing non-U.S. dollar monetary assets and liabilities. We may also hedge currency risk arising from funding of foreign currency-denominated future investments. We may utilize foreign currency contracts, such as currency forwards or option contracts in these hedging programs. We considered the historical trends in currency exchange rates and determined that it was reasonably possible that a weighted average adverse change of 20% in currency exchange rates could be experienced in the near term. Such an adverse change, after taking into account balance sheet hedges only and offsetting recorded monetary asset and liability positions outstanding as of December 29, 2018 and December 30, 2017, would result in an adverse impact on income before taxes of less than $46 million and less than $95 million, respectively.
INTEREST RATES
We are exposed to interest rate risk related to our fixed-rate investment portfolio and outstanding debt. The primary objective of our investment policy is to preserve principal and the financial flexibility to fund our business while maximizing yields, which generally track the U.S. dollar three-month LIBOR. We generally enter into interest rate contracts to convert the returns on our fixed-rate debt investment with remaining maturities longer than six months into U.S. dollar three-month LIBOR-based returns. We also enter into swaps to convert fixed-rate coupon payments into floating-rate coupon payments for our existing indebtedness. Gains or losses on these instruments are generally offset by corresponding losses or gains on the related hedging instruments.
A hypothetical increase in benchmark interest rates of up to 1.0%, after taking into account investment hedges, would have resulted in a decrease in the fair value of our investment portfolio of approximately $110 million as of December 29, 2018 (a hypothetical decrease of 1.0% would have resulted in an increase of approximately $100 million as of December 30, 2017).
Taking into account floating-rate debt, and fixed-rate debt that is swapped to floating-rate debt, a hypothetical increase in interest rates of up to 1.0% would result in an increase in annual interest expense on our indebtedness of approximately $215 million from debt outstanding as of December 29, 2018 (an increase of approximately $140 million from debt outstanding as of December 30, 2017). We have changed our presentation from the prior year to show the impact of interest rate changes on interest expense rather than on fair value of debt in order to present information that could hypothetically impact our net income and cash flows.
EQUITY PRICES
Our investments include marketable equity securities and equity derivative instruments. We typically do not attempt to reduce or eliminate our equity market exposure through hedging activities at the inception of our investments. In the event we do decide to enter into hedge arrangements, before doing so we evaluate legal, market, and economic factors, as well as the expected timing of disposal, to determine whether hedging is appropriate. Our equity market risk management program may include equity derivatives with or without hedge accounting designation that utilize warrants, equity options, or other equity derivatives.
We also utilize total return swaps to offset changes in liabilities related to the equity market risks of certain deferred compensation arrangements. Gains or losses from changes in fair value of these total return swaps are generally offset by the losses or gains on the related liabilities.

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As of December 29, 2018,Following are the fair valuereconciliations of our marketable equity investments andmost comparable US GAAP measures to our equity derivative instruments, including hedging positions, was $1.4 billion ($4.2 billion as of December 30, 2017). A substantial majority of our marketable equity investments portfolio as of December 29, 2018 was concentrated in our investment in ASML of $1.1 billion ($3.6 billion as of December 30, 2017). To determine reasonably possible decreases in the market value of our marketable equity investments, we have analyzed the historical market price sensitivity of our marketable equity investment portfolio. Assuming a decline of 40% in market prices, and after reflecting the impact of hedges and offsetting positions, the aggregate value of our marketable equity investments could decrease by approximately $0.6 billion, based on the value as of December 29, 2018 (a decrease in value of approximately $1.1 billion, based on the value as of December 30, 2017 using an assumed decline of 25%). Beginning in 2018, as explained in "Note 3: Recent Accounting Standards" within the Consolidated Financial Statements, changes in the fair value of our marketable equity securities will be measured and recorded at fair value with changes in fair value recorded through the income statement.non-GAAP measures presented:
Many of the same factors that could result in an adverse movement of equity market prices affect our non-marketable equity investments, although we cannot always quantify the impacts directly. Financial markets are volatile, which could negatively affect the prospects of the companies we invest in, their ability to raise additional capital, and the likelihood of our ability to realize value in our investments through liquidity events such as initial public offerings, mergers, and private sales. These types of investments involve a great deal of risk, and there can be no assurance that any specific company will grow or become successful; consequently, we could lose all or part of our investment. Our non-marketable equity securities had a carrying amount of $3.0 billion as of December 29, 2018 ($2.6 billion as of December 30, 2017) and included our investment in Unisoc of $658 million ($658 million for Unisoc as of December 30, 2017). The carrying amount of our equity method investments was $1.6 billion as of December 29, 2018 ($1.8 billion as of December 30, 2017). Substantially all of our equity method investments balance as of December 29, 2018 was concentrated in our IMFT investment of $1.6 billion ($1.5 billion for IMFT as of December 30, 2017).
Years Ended (In Millions, Except Per Share Amounts)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Net revenue$79,024 $77,867 $71,965 
NAND memory business(4,306)(4,967)(4,059)
Non-GAAP net revenue$74,718 $72,900 $67,906 
Operating income$19,456 $23,678 $22,035 
Acquisition-related adjustments1,492 1,416 1,324 
Restructuring and other charges2,626 198 393 
NAND memory business(1,369)(937)600 
Non-GAAP operating income$22,205 $24,355 $24,352 
Operating margin24.6 %30.4 %30.6 %
Acquisition-related adjustments1.9 %1.8 %1.8 %
Restructuring and other charges3.3 %0.3 %0.5 %
NAND memory business(0.1)%0.9 %2.9 %
Non-GAAP operating margin29.7 %33.4 %35.9 %
Earnings per share—diluted$4.86 $4.94 $4.71 
Acquisition-related adjustments0.36 0.33 0.29 
Restructuring and other charges0.65 0.05 0.09 
(Gains) losses from divestiture— — (0.16)
Ongoing mark-to-market on marketable equity securities0.03 0.03 (0.06)
NAND memory business(0.33)(0.22)0.13 
Income tax effects(0.10)(0.03)(0.03)
Non-GAAP earnings per share—diluted$5.47 $5.10 $4.97 
COMMODITY PRICE RISK
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019Dec 29, 2018Dec 30, 2017
Net cash provided by operating activities$29,991 $35,384 $33,145 $29,432 $22,110 
Additions to property, plant and equipment(18,733)(14,259)(16,213)(15,181)(11,778)
Free cash flow$11,258 $21,125 $16,932 $14,251 $10,332 
Net cash used for investing activities$(25,167)$(20,796)$(14,405)$(11,239)$(15,762)
Net cash provided by (used for) financing activities$(5,862)$(12,917)$(17,565)$(18,607)$(8,475)
Although we operate facilities that consume commodities, we are not directly affected by commodity price risk to a material degree. We have established forecasted transaction risk management programs to protect against fluctuations in commodity prices. We may use commodity derivatives contracts, such as commodity swaps, in these hedging programs. In addition, we have sourcing plans in place that mitigate the risk of a potential supplier concentration for our key commodities.


























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OTHER KEY INFORMATION
SELECTED FINANCIAL DATA
Years Ended
(Dollars in Millions, Except Per Share Amounts)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		 Dec 26,
2015		 Dec 27,
2014
Net revenue $70,848
 $62,761
 $59,387
 $55,355
 $55,870
Gross margin1
 $43,737
 $39,098
 $36,233
 $34,679
 $35,609
Gross margin percentage1
 61.7% 62.3% 61.0% 62.6% 63.7%
Research and development1
 $13,543
 $13,035
 $12,685
 $12,128
 $11,537
Marketing, general and administrative1
 $6,750
 $7,452
 $8,377
 $7,930
 $8,136
R&D and MG&A as a percentage of revenue1
 28.6% 32.6% 35.5% 36.2% 35.2%
Operating income1
 $23,316
 $18,050
 $13,133
 $14,002
 $15,347
Net income2
 $21,053
 $9,601
 $10,316
 $11,420
 $11,704
Effective tax rate2
 9.7% 52.8% 20.3% 19.6% 25.9%
Earnings per share2
          
Basic $4.57
 $2.04
 $2.18
 $2.41
 $2.39
Diluted $4.48
 $1.99
 $2.12
 $2.33
 $2.31
Weighted average diluted shares of common stock outstanding 4,701
 4,835
 4,875
 4,894
 5,056
Dividends per share of common stock, declared and paid $1.20
 $1.0775
 $1.04
 $0.96
 $0.90
Net cash provided by operating activities $29,432
 $22,110
 $21,808
 $19,018
 $20,418
Additions to property, plant and equipment $15,181
 $11,778
 $9,625
 $7,326
 $10,105
Repurchase of common stock $10,730
 $3,615
 $2,587
 $3,001
 $10,792
Payment of dividends to stockholders $5,541
 $5,072
 $4,925
 $4,556
 $4,409
           
(Dollars in Millions) Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		 Dec 26,
2015		 Dec 27,
2014
Property, plant and equipment, net $48,976
 $41,109
 $36,171
 $31,858
 $33,238
Total assets $127,963
 $123,249
 $113,327
 $101,459
 $90,012
Debt $26,359
 $26,813
 $25,283
 $22,670
 $13,655
Stockholders’ equity $74,563
 $69,019
 $66,226
 $61,085
 $55,865
Employees (in thousands) 107.4
 102.7
 106.0
 107.3
 106.7
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.



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SALES AND MARKETING
CUSTOMERSCustomers
We sell our products primarily to original equipment manufacturers (OEMs)OEMs, ODMs, and original design manufacturers (ODMs).cloud service providers. ODMs provide design and manufacturing services to branded and unbranded private-label resellers. In addition, our customers include other manufacturers and service providers, such as industrial and communication equipment manufacturers and other cloud service providers, who buy our products through distributor, reseller, retail, and OEM channels throughout the world. For more information about our customers, including customers who accounted for greater than 10% of our net consolidated revenue, see "Note 4:3: Operating Segments" within the Consolidated Financial Statements.
Our worldwide reseller sales channel consists of thousands of indirect customers—customers; systems builders that purchase Intel® processors and other products from our distributors. We have incentive programs that allow distributors to sell our microprocessors and other products in small quantities to customers of systems builders.integrators. Our microprocessors and other products are also available in direct retail outlets.
SALES ARRANGEMENTSSales Arrangements
Our products are sold through sales officesdistribution channels throughout the world. Sales of our products are frequently made via purchase order acknowledgments that contain standard terms and conditions covering matters such as pricing, payment terms, and warranties, as well as indemnities for issues specific to our products, such as patent and copyright indemnities. Because our customers generally order from us on a purchase order basis, they can typically cancel, change, or delay product purchase commitments with little or no notice to us and without penalty. From time to time, we may enter into additional agreements with customers covering, for example, changes from our standard terms and conditions, new product development and marketing, and private-label branding. Our sales are routinely made using electronic and web-based processes that allow the customer to review inventory availability and track the progress of specific goods ordered. Pricing on particular products may vary based on volumes ordered and other factors. We also offer discounts, rebates, and other incentives to customers to increase acceptance of our products and technology.
In accordance with contract terms, revenue for product sales is recognized at the time of product shipment from our facilities or delivery to the customer location, as determined by the agreed-uponagreed upon shipping terms. Our standard terms and conditions of sale typically provide that payment is due at a later date, usually 30 days after shipment or delivery. We assess credit risk through quantitative and qualitative analysis. From this analysis, we establish shipping and credit limits, and determine whether we will seek to use one or more credit support protection devices, such as obtaining a parent guarantee, standby letter of credit, or credit insurance. Credit losses may still be incurred due to bankruptcy, fraud, or other failure of the customer to pay.
Our sales to distributors are typically made under agreements allowing for price protection on unsold merchandise and a right of return on stipulated quantities of unsold merchandise. Under the price protection program, we give distributors credits for the difference between the original price paid and the current price that we offer. Our products typically have no contractual limit on the amount of price protection, nor is there a limit on the time horizon under which price protection is granted. The right of return granted generally consists of a stock rotation program in which distributors are able tocan exchange certain products based on the number of qualified purchases made by the distributor.
DISTRIBUTIONDistribution
Distributors typically handle a wide variety of products, including those that compete with our products, and fill orders for many customers. Customers may place orders directly with us or through distributors. We have several distribution warehouses that are located in proximity to key customers.
SEASONAL TRENDSSeasonal Trends
Historically, our net revenue has typically been higher in the second half of the year than in the first half of the year, accelerating in the third quarter and peaking in the fourth quarter. In 2021, continued strong COVID-driven notebook demand in the first half of the year contributed to a flatter trend than we historically observe.
MARKETINGMarketing
Our global marketing objectives are to build a strong, well-known, differentiated, and meaningful Intel corporate brand that drives preference with businesses and consumers, and to offer a limited number of meaningful and valuable brands in our portfolio to aid businesses and consumers in making informed choices about technology purchases. The Intel Core processor family and the Intel Atom, Celeron® Quark™, Intel AtomPentium®, Intel® Celeron®, Intel® Pentium®, Intel® Xeon®, Intel® Xeon Phi™, and Intel® Itanium® Xeontrademarks make up our processorkey CPU brands. This year, we introduced the Intel Arc brand for our upcoming high-performance graphics products.
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We promote brand awareness and preference, and generate demand through our own direct marketing, as well as through co-marketing programs. Our direct marketing activities primarily include advertising through digital and social media and television, as well as consumer and trade events, industry and consumer communications, and press relations. We market to consumer and business audiences and focus on building awareness and generating demand for our performance leadership products. Our key messaging focuses on increased performance, improved energy efficiency, and other capabilities such as connectivity and communications.connectivity.

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Certain customers participate in cooperative advertising and marketing programs such as the Intel Inside program.programs. These cooperative advertising and marketing programs broaden the reach of our brands beyond the scope of our own direct marketing. Certain customers are licensed to place Intel® logos on computing devices containing our microprocessors and processor technologies, and to use our brands in their marketing activities. The program partially reimburses customers for marketing activities for products featuring Intel® brands, subject to customers meeting defined criteria. These marketing activities primarily include advertising through digital and social media and television, as well as press relations. We have also entered into joint marketing arrangements with certain customers.
COMPETITION
The computing industry is continuously evolving. New
Quantitative and existing technology providers regularly introduce newQualitative Disclosures About Market Risk
We are affected by changes in currency exchange and enhanced technologies and products. The marketplace can change quickly in response to such technologies and products,interest rates, as well as equity and commodity prices. Our risk management programs are designed to reduce, but may not eliminate, the impacts of these risks. All of the following potential changes are based on sensitivity analyses performed on our financial positions as of December 25, 2021 and December 26, 2020. Actual results may differ materially.
Currency Exchange Rates
We are exposed to currency exchange risks of non-US-dollar-denominated investments in customerdebt and end-user requirements, expectations,equity instruments and preferences. As technologies evolveloans receivable, and new market segments emerge,may economically hedge this risk with foreign currency contracts, such as currency forward contracts or currency interest rate swaps. Gains or losses on these non-US-currency investments are generally offset by corresponding losses or gains on the boundaries between the market segments that we compete inrelated hedging instruments. We are exposed to currency exchange risks from our non-US-dollar-denominated debt indebtedness and may also change. We face significant competition in the development and market acceptanceuse foreign currency contracts designated as cash flow hedges to manage this risk.
Substantially all of our productsrevenue is transacted in this environment.
In addition,US dollars. However, a significant portion of our operating expenditures and capital purchases are incurred in connectionother currencies, primarily the European Union euro, the Israeli shekel, the Malaysian ringgit, the Japanese yen, and the Chinese yuan. We have established currency risk management programs to protect against currency exchange rate risks associated with our strategic transformation to a data-centric company, we have pursued a broader market opportunity by entering new areasnon-US dollar forecasted future cash flows and introducing adjacent products. We face new sources of competition in these market segments, including from incumbent competitors with well-established technologiesexisting non-US dollar monetary assets and customer bases, more industry experience, significant financial resources, and greater brand recognition.
COMPETITORS
Our broad product portfolio offers end-to-end solutions to help our customers process, analyze, store, and transfer data, including platform products that range from high-performance platforms for cloud computing workloads to low-power platforms for edge computing devices. We face intense competition across each part of this portfolio from other companies that offer platform products, such as Advanced Micro Devices, Inc. (AMD); accelerator products such as GPUs, including NVIDIA Corporation (NVIDIA), as well as accelerator products such as ASICs, application-specific standard products, and FPGAs; memory and storage products; or connectivity products such as cellular modems. Some of these competitors have developed or utilize competing computing architectures for specific market segments or applications, such as low-power applications or emerging AI workloads. We also compete with internally developed semiconductors from OEMs, cloud service providers, and others, including customers. These companies may choose to vertically integrate their own proprietary semiconductor designs with their software assets, to offer greater product differentiation or increase product margins, or to customize such designs for their specific computing workloads.liabilities. We may also face new sourceshedge currency risk arising from funding of competitionforeign currency-denominated future investments. We may utilize foreign currency contracts, such as currency forwards or option contracts in these hedging programs. We considered the historical trends in currency exchange rates and determined that it was reasonably possible that a weighted average adverse change of 10% in currency exchange rates could be experienced in the near term. Such an adverse change, after taking into account balance sheet hedges only and offsetting recorded monetary asset and liability positions outstanding as of December 25, 2021 and December 26, 2020, would result of changes in industry participants through, for example, acquisitions or business collaborations, as well as new entrants, which could have a significantan adverse impact on our competitive position.income before taxes of less than $38 million and less than $61 million, respectively.
Interest Rates
CCG.We are exposed to interest rate risk related to our fixed-rate investment portfolio and outstanding debt. The primary objective of our investment policy is to preserve principal and provide financial flexibility to fund our business while maximizing yields, which generally track the US dollar three-month LIBOR. We generally enter into interest rate contracts to convert the returns on our fixed-rate debt investment with remaining maturities longer than six months into US dollar three-month LIBOR-based returns. We also enter into swaps to convert fixed-rate coupon payments into floating-rate coupon payments for our existing indebtedness. Gains or losses on these instruments are generally offset by corresponding losses or gains on the related hedging instruments.
A hypothetical increase in benchmark interest rates of 1%, after taking into account investment hedges, would have resulted in a leading provider of platforms for notebooks, 2-in-1 systems, and desktops, including high-end enthusiast PCs. We face existing and emerging competition in these product areas. Tablets, phones, and other mobile devices offered by numerous vendors are significant competitors to traditional PCs for many usages, and considerable blurring of system form factors currently existsdecrease in the marketplace. We face strong competitionfair value of our investment portfolio of approximately $68 million as of December 25, 2021 (a hypothetical decrease of 1% would have resulted in an increase in the fair value of our investment portfolio of approximately $75 million as of December 26, 2020).
Taking into account floating-rate debt and fixed-rate debt that is swapped to floating-rate debt, a hypothetical increase in interest rates of 1% would result in an increase in annual interest expense of approximately $132 million from AMDdebt outstanding as wellof December 25, 2021 (a hypothetical increase of 1% would have resulted in an increase in annual interest expense of approximately $132 million from debt outstanding as from vendors who use applications processors that are based on the ARM* architecture, feature low-power or long battery-life operation, and are built in SoC formats that integrate numerous functions on one chip. of December 26, 2020).
Equity Prices
We are competing with a number of large companiesexposed to equity market risk through our investments in the development of 5G cellular modems.
DCG.We are a leading provider of data center platforms, and face competition from incumbent competitors such as AMD, providers of accelerator products such as NVIDIA, and companies using ARM architecture, as well as from new entrants developing products customized for specific data center workloads and from internally developed solutions by cloud service providers and others. We see cloud computing, storage, and networking as areas of significant opportunity in our DCG business, asmarketable equity securities, which we seektypically do not attempt to help our customers process, analyze, store, and transfer increasing amounts of data in connection with AI, autonomous driving, and other applications. We face strong competition in these areas.
•
IOTG.We have a long-standing position as a supplier of components and software for embedded products. This marketplace continues to expand significantly, with increasing types and numbers of smart and connected devices for retail, industrial, and consumer uses, including smart video. As this market segment evolves, we face numerous large and small incumbent processor competitors, as well as new entrants that use ARM architecture and other operating systems and software. In addition, the Internet of Things requires a broad range of connectivity solutions and we face competition from companies providing traditional wireless solutions such as cellular, WiFi, and Bluetooth®, as well as several new entrants who are taking advantage of new focused communications protocols.
NSG.We compete against other providers of NAND flash memory products. We focus our efforts primarily on incorporating NAND flash memory into solution products, such as SSDs supporting enterprise and consumer applications. Our innovative Intel Optane technology offers a unique combination of performance, density, power, non-volatility, and cost advantages that redefines the memory storage hierarchy between conventional DRAM memory and NAND. We believe that our memory offerings, including our Intel Optane technology, complement our product offerings in our other segments.

reduce or eliminate through hedging activities.
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As of December 25, 2021, the fair value of our marketable equity securities was $2.2 billion ($1.8 billion as of December 26, 2020). The substantial majority of our marketable equity securities portfolio as of December 25, 2021 was concentrated in securities traded on the Chinese Shanghai Stock Exchange Science and Technology Innovation Board. To determine reasonably possible decreases in the market value of our marketable equity securities, we have analyzed the historical market price sensitivity of our portfolio. Assuming a decline of 60% in market prices, the aggregate value of our marketable equity securities could decrease by approximately $1.3 billion, based on the value as of December 25, 2021 (a decrease in value of approximately $1.1 billion, based on the value as of December 26, 2020 using an assumed decline of 60%).
PSG.We utilize total return swaps to offset changes in liabilities related to the equity market risks of certain deferred compensation arrangements. Gains or losses from changes in fair value of these total return swaps are a leading providergenerally offset by the losses or gains on the related liabilities.
Many of programmable semiconductorsthe same factors that could result in an adverse movement of equity market prices affect our non-marketable equity investments, although we cannot always quantify the impacts directly. Financial markets are volatile, which could negatively affect the prospects of the companies we invest in, their ability to raise additional capital, and related products, including FPGAsthe likelihood of our ability to realize value in our investments through liquidity events such as initial public offerings, mergers, and SoC FPGAs. We face competition from other programmable logic companies, as well as companies that make otherprivate sales. These types of semiconductor products, such as ASICs, application-specific standard products, GPUs, digital signal processors,investments involve a great deal of risk, and CPUs. Targeted growth areas for our programmable solutions include communications, data center, industrial, and military applications. The FPGA life cycle is long relative to other Intel products—from the time that a design win is secured, it generally takes three or more years before a customer starts volume production and we receive the associated revenue from such design win.
COMPETITIVE FACTORS
Our products primarily compete based on performance, energy efficiency, integration, ease-of-use, innovative design, features, price, quality, reliability, security features, software ecosystem and developer support, time-to-market, brand recognition, customer support and customization, and availability. The importance of these factors varies by the type of end system for the products. For example, performance might be among the most important factors for our products for data center servers, while energy efficiency and price, as well as density and non-volatility, might be among the most important factors for our memory products.
Our key competitive advantages include:
Well-positioned for growth in a new era of data-centric computing.The proliferation of data from the cloud, to the network, and out to the edge; the impending transition to 5G; and the growth of AI and analytics have driven a profound shift in computing, creating massive amounts of largely untapped data and a significant opportunity. We believe we are one of the few companies with a product portfolio that spans this new data-centric world. With products to help our customers process, analyze, store, and transfer large amounts of data, we have the opportunity to be the leading end-to-end platform provider for our customers.
Combination of our network of manufacturing and assembly and test facilities with our global architecture design teams. We have made significant capital and R&D investments in our integrated manufacturing network, which enables us to have more direct control over our design, development, and manufacturing processes; quality control; product cost; production timing; performance; power consumption; and manufacturing yield. We also have the scale and expertise necessary to enable deep engagement with our customers on their product needs. The increased cost of constructing new fabrication facilities to support smaller transistor geometries and larger wafers has led to a reduced number of companies that can build and equip leading-edge manufacturing facilities. Most of our competitors rely on third-party foundries, such as Taiwan Semiconductor Manufacturing Company, Ltd. or Samsung Electronics Co., Ltd., and subcontractors for manufacturing and assembly and test needs.
We also face competitive challenges associated with the development and implementation of our next-generation process technology. We announced earlier in 2018 that volume production on our 10nm process technology was being delayed from the second half of 2018 into 2019. We have made progress on improving 10nm yields during 2018, and we expect 10nm-based volume client systems on retail shelves for the 2019 holiday season. However, the delays in our transition to next-generation process technology may allow competitors to take advantage of potential improvements in performance, energy efficiency, cost and/or other features that may be offered by new process technologies developed by third-party foundries. While we believe we derive significant competitive advantages from being an integrated device manufacturer as discussed above, we are also subject to the inherent risks of next-generation process development.
INTELLECTUAL PROPERTY RIGHTS AND LICENSING
Intel owns and develops significant IP and related IP rights around the world that relate to our products, services, R&D, and other activities and assets. Our IP portfolio includes patents, copyrights, trade secrets, trademarks, trade dress rights, and maskwork rights. We actively seek to protect our global IP rights and to deter unauthorized use of our IP and other assets. Such effortsthere can be difficult, however, particularly in countries that provide less protection to IP rights and in the absence of harmonized international IP standards. For a discussion of the risks related to IP and our IP rights, please see “We are subject to IP risks and risks associated with litigation and regulatory proceedings” in “Risk Factors” within Other Key Information. While our IP rights are important to our success, our business as a whole is not significantly dependent on any single patent, copyright, or other IP right.  
We have obtained patents in the U.S. and other countries. Because of the fast pace of innovation and product development, and the comparative pace of governments’ patenting processes, our products are often obsolete before the patents related to them expire; in some cases, our products may be obsolete before the patents related to them are granted. As we expand our product offerings into new industries, we also seek to extend our patent development efforts to patent such products. In addition to developing patents based on our own R&D efforts, we may purchase or license patents from third parties. Established competitors in existing and new industries, as well as companies that purchase and enforce patents and other IP, may already have patents covering similar products. There is no assurance that any specific company will grow or become successful; consequently, we will be ablecould lose all or part of our investment. Our non-marketable equity securities had a carrying amount of $4.1 billion as of December 25, 2021 ($3.3 billion as of December 26, 2020) and includes our investment in Beijing Unisoc Technology Ltd. of $1.1 billion ($658 million as of December 26, 2020).
Commodity Price Risk
Although we operate facilities that consume commodities, we are not directly affected by commodity price risk to obtain patents covering our own products, or that we will be ablea material degree. We have established forecasted transaction risk management programs to obtain licenses from other companies on favorable terms or at all.
The software that we distribute, including software embeddedprotect against fluctuations in our component-level and platform products, is entitled to copyright and other IP protection. To distinguish our products from our competitors’ products,commodity prices. We may use commodity derivatives contracts, such as commodity swaps, in these hedging programs. In addition, we have obtained trademarks and trade namessourcing plans in place that are designed to mitigate the risk of a potential supplier concentration for our products, and we maintain cooperative advertising programs with customers to promote our brands and to identify products containing genuine Intel components. We also protect details about our processes, products, and strategies as trade secrets, keeping confidentialkey commodities.
Risk Factors
When any one or more of the information that we believe provides us with a competitive advantage.

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CRITICAL ACCOUNTING ESTIMATES
The methods, assumptions, and estimates that we use in applying our accounting policies may require us to apply judgments regarding matters that are inherently uncertain. We consider an accounting policy to be a critical estimate if: (1) we must make assumptions that were uncertain when the judgment was made, and (2) changes in the estimate assumptions, or selection of a different estimate methodology could have a significant impact on our financial position and the results that we report in our consolidated financial statements. While we believe that our estimates, assumptions, and judgments are reasonable, they are based on information available when the estimate was made.
Refer to "Note 2: Accounting Policies" within the Consolidated Financial Statements for further information on our critical accounting estimates and policies, which are as follows:
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;
Property, plant and equipment - the useful life determination and the related timing of when depreciation begins;
Long-lived assets - the valuation methods and assumptions used in assessing the impairment of property, plant and equipment, identified intangibles, and goodwill, including the determination of asset groupings and the identification and allocation of goodwill to reporting units;
Non-marketable equity investments - the valuation estimates and assessment of impairment and observable price adjustments;
Business combinations - the assumptions used to allocate the purchase price paid for assets acquired and liabilities assumed in connection with our acquisitions;
Income taxes - the identification and measurement of deferred tax assets and liabilities, and estimates associated with Tax Reform; and
Loss contingencies - the estimation of when a loss is probable and reasonably estimable.
RISK FACTORS
The following risks could materially and adversely affectmaterialize from time to time, our business, reputation, financial condition, cash flows, and results of operations can be materially and adversely affected, and the trading price of our common stock could decline. These risk factors do not identify all risks that we face; our operations couldcan also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. Refer also to the other information set forth in this Annual Report on Form 10-K, including in the MD&A and Financial Statements and Supplemental Details sections.
Changes in product demand can adversely affect our financial statements and the related notes.results.
CHANGES IN PRODUCT DEMAND CAN ADVERSELY AFFECT OUR FINANCIAL RESULTS.
Demand for our products is variable and hard to predict.Our products are used in different market segments, and demand for our products may varyvaries within or among the market segments served by our PC-centric and data-centric businesses.them. It is difficult to forecast these changes and their impact. For example, demand for our platform productswe expect the PC TAM to grow over time driven by factors such as a larger installed base, new platforms, shorter replacement cycles, and adoption in new markets; however, the PC industry has been highly cyclical in the past, and these growth expectations may increase in onenot materialize or more market segments while decreasing in others.we may fail to capitalize on them. Changes in the demand for our products, particularly our CCG and DCG platform products, maycan reduce our revenue, lower our gross margin, or require us to write down the value of our assets.
Important factors that could lead to variation in the demand for our products include:
▪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 maycan be impacted by changes in market conditions, including changes in government borrowing taxation, or spending, policies;taxation, interest rates, the credit market;market, current or expected inflation, employment, and energy or other commodity prices;
▪geopolitical conditions, including trade policies;
▪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;customers' inventories and computing capacity;
▪customer order patterns includingand order cancellations, which may be affected byincluding as a result of maturing product cycles for our products, customers' products, and related products such as operating system upgrade cycles; and disruptions affecting customers, such as the ongoing industry substrate and other factors;component shortages that negatively impacted demand across several of our businesses in 2021;
▪market acceptance and industry support of our new and maturing products, including the introduction and availability of software and other 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.

workloads, such as work- and learn-from-home trends.
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Due to the complexity of our manufacturing operations, we may be unableare not always able to timely respond to fluctuations in demand and we may incur significant charges and costs.Because we own and operate high-tech fabrication facilities, our operations have high costs that are fixed or difficult to reduce in the short term, including our costs related to utilization of existing facilities, facility construction and equipment, R&D, and the employment and training of a highly skilled workforce. IfTo the extent product demand decreases or we fail to forecast demand accurately, we could be required to write off inventory or record excess capacity charges, which would lower our gross margin. IfTo the extent the demand decrease is prolonged, our manufacturing or assembly and test capacity could be underutilized, and we may be required to write down our long-lived assets, which would increase our expenses. We may also be required to shorten the useful lives of under-used facilities and equipment and accelerate depreciation. As we make substantial investments in increasing our manufacturing capacity as part of our IDM 2.0 strategy, these underutilization risks may be heightened. Conversely, if productat times demand increases or we may befail to forecast accurately or produce the mix of products demanded. To the extent we are unable to add capacity or increase production fast enough, we are at times required to make production decisions and/or are unable to fully meet market demand, which couldcan result in a loss of revenue opportunities or market share, legal claims, and/or damage to customer relationships.
Our IDM 2.0 investments in capacity and our process technology roadmap will require capital expenditures above our historical levels, and if demand for our IFS business grows rapidly, we anticipate that we would need to accelerate our planned investments to meet that demand. To the extent we do not generate expected cash flows, we may be required to increase our use of external funding sources to fund our investments and operations, which may not be available on favorable terms or at all. There is legislation under consideration in the US and EU to provide government funding for semiconductor manufacturing expansions in those regions, but there can be no assurance that such funding will be enacted, and there is uncertainty as to the amounts and timing of funding we may receive and as to any restrictions on recipients. To the extent such funding is below our expectations, our anticipated cash requirements would increase. Our construction projects to expand capacity require available sources of labor, materials, and equipment. Increasing demand for such sources, including from other foundries; supply constraints, labor shortages, and other adverse market conditions; issues with permits or approvals; and other construction issues arise from time to time and can result in significant delays and increased costs for our projects.
We face significant competition.competition.The industry in which we operate is highly competitive and subject to rapid technological and market developments,developments; changes in industry standards,standards; changes in customer and end-user needs, expectations, and preferences; and frequent product introductions and improvements. IfWhen we do not anticipate andor respond to these developments, our competitive position maycan weaken, and our products or technologies might becan become uncompetitive or become obsolete. Our competitive environment has intensified, and we expect it to continue to do so in the future.
Our products primarily compete based on performance, energy efficiency, integration, ease-of-use, innovative design, features, workload optimization, price, quality, reliability, security, features, software ecosystem and developer support, time-to-market, reliable product roadmap execution, brand recognition, customer support and customization, and availability. The importance of these factors may varyvaries by product—forproduct and market segment. For example, if we do not continue to introduceour competitors have introduced data center and client platform products with performance leadership,improvements and additional processor core counts that have contributed to an increasingly competitive environment. In our IOTG business, for example, interoperability, connectivity, safety, security, industrial use conditions, and long-life support are among the key competitive position and market segment share in our DCG business may be adversely affected. We will not realize our strategic goal to becomefactors. To the leading end-to-end provider for the new data-centric era of computing ifextent our products do not meet our customers’ needscustomers' requirements across these factors in an increasingly competitive landscape.landscape, our business and results of operation can be harmed.
We face intense competition across our product portfolio from companies offering platform products;products, such as AMD and Qualcomm; accelerator products such as GPUs, including those offered by NVIDIA; other accelerator products such as ASICs, application-specific standard products, and FPGAs; memory and storage products; connectivity products such as cellular modems;and networking products; and other semiconductor products. Some of these competitors have developed or utilize competing computing architectures for specific market segments or applications,and platforms, such as the ARM architecture, and these architectures and platforms can produce beneficial network effects for competitors ifwhen an ecosystem of customers and application developers for such architectures and platforms grows at scale. For example, ARM-based products are being used in PCs and servers, which could lead to further development and growth of the ARM ecosystem. We also compete with internally developed semiconductors from OEMs, cloud service providers, and others, some of whom are customers. Some of these customers vertically integrate their own semiconductor designs with their software assets and/or customize their designs for specific computing workloads. For example, in 2020, Apple introduced PC products utilizing its own internally developed ARM-based semiconductor designs in place of our client CPUs, and we face increasing competition from Apple's products and ecosystem.
Most of our competitors rely on third-party foundries, such as Taiwan Semiconductor Manufacturing Company, Ltd. (TSMC) or Samsung Electronics Co., Ltd., and subcontractors for manufacture and assembly and test of their semiconductor components and products. Manufacturing process improvements introduced by TSMC have contributed, and may continue to contribute, to increasingly competitive offerings by our competitors. While we have set out a process technology roadmap to attain future process performance-per-watt parity and leadership relative to TSMC, our plans are subject to a number of risks and we could fail to realize our goals, including customers,due to changes in competitor technology roadmaps, changes affecting our projections regarding our technology or competing technology, and withthe risks described in the section "We are vulnerable to product and manufacturing-related risks." As an IDM, we have higher capital expenditures and R&D spending than many of our "fabless" competitors. We also face new entrants. sources of competition as a result of changes in industry participants through, for example, acquisitions or business collaborations, as well as new entrants, including in China, which could have a significant impact on our competitive position. For example, we could face increased competition as a result of China's programs to promote a domestic semiconductor industry and supply chains.
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Introduction of competitive new products and technologies, aggressive pricing, and other actions taken by competitors couldcan harm demand for our products, exert downward pricing pressure on our products, and adversely affect our business. For example, our DCG revenue and platform ASPs were negatively impacted by the competitive environment during 2021. Additionally, a number of business combinations and strategic partnerships in the semiconductor industry have occurred over the last several years, and more could occur in the future. For example, in 2020, NVIDIA announced an agreement to acquire ARM Holdings plc, and AMD announced an agreement to acquire Xilinx, Inc. Consolidation could also lead to fewer customers, partners, or suppliers, any of which could negatively affect our financial results.
To compete successfully, we must maintain a successful R&D effort, develop new products and production processes, and improve our existing products and processes ahead of competitors. For example, we invest substantially in our network of manufacturing and assembly and test facilities, including the construction of new fabrication facilities to support smaller transistor geometries, and in the development of the advanced manufacturing technologies to produce such transistors. We do not expect all of our R&D investments to be successful. We may be unable to develop and market new products successfully, and the products and technologies we invest in and develop may not be well received by customers. Our R&D investments may not contribute to our future operating results for several years, if at all, and such contributions may not meet our expectations or even cover the costs of such investments. Additionally, the products and technologies offered by others may affect demand for, or pricing of, our products.
If we are not able to compete effectively, our financial results will be adversely affected, including reduced revenue and gross margin, and we may be required to accelerate the write-down of the value of certain assets.
We invest significantly in R&D, and to the extent our R&D efforts are unsuccessful, our competitive position can be harmed and we may not realize a return on our investments.To compete successfully, we must maintain an effective R&D program, develop new products and manufacturing processes, and improve our existing products and processes, all ahead of competitors. We are focusing our R&D efforts across several key areas, including process and packaging technology, our xPU products and features, and software. These include ambitious initiatives, such as our unified oneAPI portfolio of developer tools. We cannot guarantee that all of these efforts will deliver the benefits we anticipate. For example, we previously experienced significant delays in the implementation of our 10nm process technology, and during 2020, we announced that our Intel 4 process technology (formerly 7nm) would be delayed relative to our prior expectations. To the extent we do not timely introduce new manufacturing process technologies that improve performance, performance per watt, and/or transistor density with sufficient manufacturing yields and operational efficiency, relative to competing foundry processes, we can face cost, product performance, and time-to-market disadvantages. In addition, we are not always able to timely or successfully develop new products, including as a result of bugs, late changes to features due to customer requests, or other design challenges. To the extent our R&D efforts do not develop new products on schedule with improvements in areas like performance, performance per watt, die utilization, and core counts, and/or with new features such as optimizations for AI and other workloads, our competitive position can be harmed. We have adopted a disaggregated design approach for some of our future products, in which different processors and components can be manufactured on different processes and connected by advanced packaging technology into a single package. This approach introduces new areas of complexity in design and manufacturability, particularly in the deployment of advanced packaging technologies, several of which are novel, have a limited manufacturing history, and/or have increased costs. Delays or failures in implementing disaggregated designs could adversely affect our ability to timely introduce competitive products. For example, adapting a processor or component design for a new or different manufacturing process involves additional R&D expense and can result in delays in the development of the associated product.
We do not expect all of our R&D investments to be successful. Some of our efforts to develop and market new products and technologies fail or fall short of our expectations, or are not well-received by customers, who may adopt competing technologies. We make significant investments in R&D, and we expect our investments to grow as we pursue our IDM 2.0 strategy. Our investments at times do not contribute to our future operating results for several years, if at all, and such contributions at times do not meet our expectations or even cover the costs of such investments.
Our investments in new businesses, products, and technologies are inherently risky and maydo not succeed. In recent years, in connection with our strategic transformation to a data-centric company, wealways succeed. We have entered new areas and introduced adjacentnew products in programmable solutions, AI, and autonomous driving. Weservices as we seek to capitalize on the opportunities presented by ubiquitous computing, cloud to edge infrastructure, pervasive connectivity, and AI. In recent years, we have also expanded our adjacent product offerings in client computing, the data center, the Internet of Things, and memory, with offeringsareas such as modems,discrete GPUs, mobility solutions, AI accelerators, IPU products, silicon photonics solutions, and Intel Optane technology products. As part of our IDM 2.0 strategy, we have announced plans to become a result,major provider of foundry capacity to manufacture semiconductors for others, establishing IFS. IFS faces competition from well-established competitors such as TSMC and Samsung, and to succeed, we facewill need to compete effectively across factors such as availability and time-to-market of manufacturing technology; advances in manufacturing processes in areas such as performance, performance per watt, and density; manufacturing capacity; price; ease of use; quality; yields; customer satisfaction; and ecosystem support. Our "big bets" are inherently risky and are not always successful. For example, in 2019, we exited the 5G smartphone modem business, one of our prior big bets, based on our determination that there was no clear path to profitability for the business.
These new and developing areas and products represent a significant portion of our revenue growth opportunity, and they also introduce new sources of competition, including, in certain of these market segments, fromsome cases, incumbent competitors with established technologies, ecosystems, and customer bases, lower prices or costs, and greater brand recognition. These developing products and market segments may require significant investment, maydo not always grow as significantly as projected or at all, or may utilizesometimes adopt competing technologies, that are different from the ones that we develop and manufacture, and we may not realize an adequate return on our investments. For example, AI and machine learning are increasingly driving innovations in technology, but if theywe fail to deliver the benefits anticipated,develop leading products for these workloads, or if our customers use competing technologies, for these workloads, we may not realize a return on our investments in these areas. Similarly, while we see significant opportunity in networking infrastructure and the distribution of computing to the network edge, we expect intense competition for this opportunity and may not succeed in our efforts. To be successful, we need to cultivate new industry relationships with customers and partners in these market segments. In addition, we must continuallysegments and continue to improve the cost, performance, integration, and energy efficiency of our products, as well as expand our software capabilities to provide customers with comprehensive computing solutions.offerings. Despite our ongoing efforts, there is no guarantee that we will achieve or maintain market demand or acceptance for our products and services in these various market segments.segments or realize an adequate return on our investments, which could lead to impairment of assets and restructuring charges, as well as opportunity costs.
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Changes in the mix of products sold maycan materially impact our financial results. results. Our pricing and margins vary across our products and market segments due in part to marketability of our products and differences in their features or manufacturing costs. For example, our platform product offerings range from lower-priced and entry-level platforms, such as those based on Intel Atom processors, to higher-end platforms based on Intel Xeon processors. Our adjacent products also typically have significantly lower margins than our higher-priced platform products. Ifproducts, and at times are not profitable. To the extent demand shifts from our higher-priced to lower-priced platform products in any of our market segments, or if our adjacent products represent an increasinglya greater share of our mix of products sold, our gross margin percentage may decrease.

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WE OPERATE GLOBALLY AND ARE SUBJECT TO SIGNIFICANT RISKS IN MANY JURISDICTIONS.
Global or regional conditions may harm our financial results. We have manufacturing, assembly and test, R&D, sales, and other operations in many countries, and some of our business activities may be concentrated in one or more geographic areas. Moreover, sales outside the U.S. accounted for approximately 84% of our revenue for the fiscal year ended December 29, 2018. As a result, our operations and our financial results, including our ability to manufacture, assemble and test, design, develop, or sell products, and the demand for our products, may be adversely affected by a number of global and regional factors outside of our control.
Adverse changes in global or regional economic conditions, including recession or slowing growth, changes or uncertainty in fiscal or monetary policy, higher interest rates, tighter credit, inflation, lower capital expenditures by businesses including on IT infrastructure, increases in unemployment, and lower consumer confidence and spending, could significantly harm demand for our products and make it more challenging to forecast our operating results and make business decisions, including regarding prioritization of investments in our business. An economic downturn or increased uncertainty may also lead to increased credit and collectibility risks, higher borrowing costs or limits on our access to capital markets, reduced liquidity, adverse impacts on our suppliers, failures of counterparties and other financial institutions, and declines in the value of our financial instruments.
International trade disputes may result in increased tariffs, trade barriers, and other protectionist measures that could increase our manufacturing costs, make our products less competitive, reduce consumer demand, or impede or slow the movement of our goods across borders. Increasing protectionism and economic nationalism may lead to further changes in trade policy, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in some markets.
We may be adversely affected by other global and regional factors, including:
geopolitical and security issues, such as armed conflict and civil or military unrest, political instability, human rights concerns, and terrorist activity;
natural disasters, public health issues, and other catastrophic events;
inefficient infrastructure and other disruptions, such as supply chain interruptions and large-scale outages or unreliable provision of services from utilities, transportation, data hosting, or telecommunications providers;
formal or informal imposition of new or revised export, import, or doing-business regulations, including trade sanctions and tariffs, 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;
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; and
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.
We are subjectvulnerable to lawsproduct and regulations worldwide that may differ among jurisdictions, affecting our operations in areas including, but not limited to: IP ownership and infringement; tax; import and export requirements; anti-corruption; foreign exchange controls and cash repatriation restrictions; data privacy requirements; competition; advertising; employment; product regulations; environment, health, and safety requirements; and consumer laws. Compliance with such requirements may be onerous and expensive, and may otherwise impact our business operations negatively. For example, unfavorable developments with evolving laws and regulations worldwide related to 5G or autonomous driving technology may limit global adoption, impede our strategy, and negatively impact our long-term expectations for our investments in these areas. Although we have policies, controls, and procedures designed to help ensure compliance with applicable laws, there can be no assurance that our employees, contractors, suppliers, and/or agents will not violate such laws or our policies. Violations of these laws and regulations could result in fines; criminal sanctions against us, our officers, or our employees; prohibitions on the conduct of our business; and damage to our reputation.manufacturing-related risks.
We may be affected by fluctuations in currency exchange rates.We are potentially exposed to adverse as well as beneficial movements in currency exchange rates. Although most of our sales occur in U.S. dollars, expenses may be paid in local currencies. An increase in the value of the dollar could increase the real cost to our customers of our products in those markets outside the U.S. where we sell in dollars, and a weakened dollar could increase the cost of expenses such as payroll, utilities, tax, and marketing expenses, as well as overseas capital expenditures. We also conduct certain investing and financing activities in local currencies. Our hedging programs may not be effective to offset any, or more than a portion, of the adverse impact of currency exchange rate movements; therefore, changes in exchange rates could harm our results of operations and financial condition.

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Catastrophic events could have a material adverse effect on our operations and financial results.Our operations and business, and those of our customers and suppliers, could be disrupted by natural disasters; industrial accidents; public health issues; cybersecurity incidents; interruptions of service from utilities, transportation, telecommunications, or IT systems providers; or other catastrophic events. Our headquarters and many of our operations and facilities are in locations that are prone to earthquakes and other natural disasters. Global climate change may result in certain natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storms, sea-level rise, and flooding, and could disrupt the availability of water necessary for the operation of our fabrication facilities located in semi-arid regions. Catastrophic events could make it difficult or impossible to manufacture or deliver products to our customers, receive production materials from our suppliers, or perform critical functions, which could adversely affect our revenue and require significant recovery time and expenditures to resume operations. While we maintain business recovery plans that are intended to enable us to recover from natural disasters or other events that can be disruptive to our business, some of our systems are not fully redundant and we cannot be sure that our plans will fully protect us from all such disruptions. Furthermore, even if our operations are unaffected or recover quickly, if our customers cannot timely resume their own operations due to a catastrophic event, they may reduce or cancel their orders, which may adversely affect our results of operations.
We maintain a program of insurance coverage for a variety of property, casualty, and other risks. The types and amounts of insurance we obtain vary depending on availability, cost, and decisions with respect to risk retention. Some of our policies have large deductibles and broad exclusions. In addition, one or more of our insurance providers may be unable or unwilling to pay a claim. Losses not covered by insurance may be large, which could harm our results of operations and financial condition.
Damage to our reputation could damage our business. Our reputation is a critical factor in our relationships with customers, employees, governments, suppliers, and other stakeholders. If we fail to address, or appear to fail to address, issues that give rise to reputational risk, including those described throughout this "Risk Factors" section, we could significantly harm our reputation and our brands. Our reputation may also be damaged by how we respond to corporate crises. Corporate crises can arise from catastrophic events as well as from incidents involving unethical behavior or misconduct; product quality, security, or safety issues; allegations of legal noncompliance; internal control failures; corporate governance issues; data breaches; workplace safety incidents; environmental incidents; the use of our products for illegal or objectionable applications; marketing practices; media statements; the conduct of our suppliers or representatives; and other issues or incidents that, whether actual or perceived, result in adverse publicity. If we fail to respond quickly and effectively to address such crises, the ensuing negative public reaction could significantly harm our reputation and our brands and could lead to increases in litigation claims and asserted damages or subject us to regulatory actions or restrictions.
Damage to our reputation could reduce demand for our products and adversely affect our business and operating environment. It could reduce investor confidence in us, adversely affecting our stock price. It may also limit our ability to be seen as an employer of choice when competing for highly skilled employees. Moreover, repairing our reputation and brands may be difficult, time-consuming, and expensive.
WE ARE VULNERABLE TO PRODUCT AND MANUFACTURING-RELATED RISKS.
We are subject to risks associated with the development and implementation of new manufacturing process technology. technologies.Production of integrated circuits is a complex process. Realizing the economics of Moore’s Law is a strategic priority, and weWe are continually engaged in the development of next-generation process technologies at increasingly advanced nodes. nodes as we seek to realize the benefits of Moore's Law. Forecasting our progress and schedule for developing advanced nodes is challenging, and at times we encounter unexpected delays due to the complexity of interactions among steps in the manufacturing process, challenges in using new materials or new production equipment, and other issues. Diagnosing defects in our manufacturing processes often takes a long time, as manufacturing throughput times can delay our receipt of data about defects and the effectiveness of fixes, and defects can be more serious and difficult to resolve than initially understood.
We mayare not bealways successful or efficient in developing or implementing new process nodes and productionmanufacturing processes. We experienced significant delays in implementing our 10nm process technology, and in 2020, we encountered a defect mode in the development of our Intel 4 process technology (formerly 7nm) that resulted in delays relative to our prior expectations. These delays have allowed competitors using third-party foundries such as TSMC to benefit from advancements in manufacturing processes introduced ahead of us by foundries, including improvements in performance, energy efficiency, and other features, which have helped increase the competitiveness of their products. Because of these prior delays in our process technologies, we may experience greater adverse competitive impacts in the event of delays in the development of future manufacturing process technologies and products.
Our efforts to innovate involve significant expense and carry inherent risks, including difficulties in designing and developing such next-generation process technologies, failures to realize the expected benefits of next-generation processand packaging technologies, and investments in manufacturing assets and facilities that are made years in advance of the technology introduction. We cannot guarantee that we will realize the expected benefits of next-generation process node introduction.technologies, including the expected cost, performance, power, and density advantages, or that we will achieve an adequate return on our capital and R&D investments, particularly as development of new nodes has grown increasingly expensive. In such circumstances, we may be required to write down the value of some of our manufacturing assets and facilities, increasing our expenses.
Risks inherent in the development of next-generation process technologies include production timing delays, lower-than-anticipated manufacturing yields, longer manufacturing throughput times, failure to achieve expected performance, power, and area improvements, and product defects and errata. For example, we announced earlierProduction timing delays have at times caused us to miss customer product design windows, which can result in 2018 that volume production onlost revenue opportunities and damage to our 10nm process technology was being delayed fromcustomer relationships. Furthermore, when the second half of 2018 into 2019. We have made progress on improving 10nm yields during 2018, and we expect 10nm-based volume client systems on retail shelves for the 2019 holiday season. However, the delays in our transition to next-generation process technology may allow competitors to take advantage of potential improvements in performance, energy efficiency, cost and/or other features that may be offered by new process technologies developed by third-party foundries. Furthermore, without the benefitintroduction of next-generation process nodes including additionalis delayed, adding cores or other competitive features onto our products maycan result in larger die size products, manufacturing supply constraints, and increased product costs. Lower manufacturing yields and longer manufacturing throughput times, compared to previous process nodes, can increase our product costs and adversely affect our gross margins, and can contribute to manufacturing supply constraints. A new process node typically has higher costs compared to a mature node due to factors that include higher depreciation costs and lower yields, and costs and yields at times do not improve at the same rate as on prior nodes. As the die size of our products has increased and our manufacturing process nodes have shrunk, our products and manufacturing processes have grown increasingly complex and more susceptible to product defects and errata, which at times also contribute to production timing delays and lower yields.
DisruptionsFrom time to time, disruptions in the production process can also result from errors, defects in materials, delays in obtaining or revising operating permits and licenses, interruptions in our supply of materials, resources, or resources,production equipment, adverse changes in equipment productivity, and disruptions at our fabrication and assembly and test facilities due to accidents, maintenance issues, power interruptions, equipment malfunctions, or unsafe working conditions—all of which could affect the timing of production ramps and yields.
Production issues canperiodically lead to increased costs and may affect our ability to meet product demand, which couldcan adversely impact our business and the results of operations. In addition, if we face delays in the timing of our product introductions we couldcan cause us to become less competitive and lose revenue opportunities, and our gross margin could be adversely affected because we incur significant costs up front in the product development stage and earn revenue to offset these costs over time.

We face supply chain risks. We have a highly complex global supply chain composed of thousands of suppliers. These suppliers provide direct materials for our production processes; supply tools, equipment, and IP for our factories; deliver logistics and packaging services; and supply software, lab and office equipment, and other goods and services used in our business. We also rely on suppliers to provide certain components for our products and to manufacture and assemble and test some of our components and products. From time to time we are negatively impacted by supply chain issues, including the following:
▪suppliers extending lead times, experiencing capacity constraints, limiting or canceling supply, allocating supply to other customers including competitors, delaying or canceling deliveries, or increasing prices;
▪supplier quality issues;
▪cybersecurity events, IP or other litigation, manmade or natural disasters, operational failures, or other events that disrupt suppliers;
▪long lead times to qualify alternate or additional suppliers, or the unavailability of qualified alternate suppliers; and
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▪increased regulation or stakeholder expectations regarding responsible sourcing practices, or supplier conduct that does not meet such standards, which can cause our compliance costs to increase or result in publicity that negatively affects our reputation.
We faceThese and other supply chain risks. Thousandsissues can increase our costs, disrupt or reduce our production, delay our product shipments, prevent us from meeting customer demand, and damage our customer relationships. They may keep us from successfully implementing our business strategy and can materially harm our business, competitive position, results of suppliers provideoperation, and financial condition. From time to time, our customers experience disruptions or shortages in their own supply chains that constrain their demand for our products. During 2021, the semiconductor industry experienced widespread shortages of substrates and other components and available foundry manufacturing capacity, and we anticipate that such shortages will continue in 2022. These shortages have limited our ability to supply customer demand in certain of our businesses, such as for our PSG products, and have adversely affected customer demand for our products, including in our CCG and DCG businesses, as some customers have been unable to procure sufficient quantities of third-party components used together with our products to produce finished systems. It is difficult to predict the future impact of these ongoing shortages.
To obtain future supply of certain materials and equipmentcomponents, particularly substrates, and third-party foundry manufacturing capacity, we have increasingly entered into arrangements with some of our suppliers that involve long-term purchase commitments and/or large prepayments. These arrangements could still prove inadequate to meet our requirements, or our suppliers may fail to deliver committed volumes on time or at all, or their financial condition may deteriorate. If future customer demand over the horizon of these arrangements falls below our expectations, we could have excess or obsolete inventory, unneeded capacity, and increased costs, and our prepayments may not be fully utilized, and in some cases may not be fully recoverable.
We utilize third-party foundries and component suppliers to manufacture or supply certain components and products for areas such asnetworking, communications, graphics, programmable semiconductor solutions, and memory. As part of our IDM 2.0 strategy, we expect to increase our use of third-party foundries for manufacturing, which will include modular tiles manufactured on advanced foundry process technologies for use in productionour core computing offerings. Delays in the development of foundries’ future manufacturing processes could delay the introduction of products or components we design for such processes, and other aspects of our business. insufficient foundry capacity could prevent us from meeting customer demand. We typically have less control over delivery schedules, design and manufacturing co-optimization, manufacturing yields, quality, product quantities, and costs for components and products that are manufactured by third parties.
Where possible, we seek to have several sources of supply. However, for certain components, services, materials, and equipment, including photolithography tools, we may rely on a single or a limited number of suppliers, or upon suppliers in a single location. In addition,For example, ASML is currently the sole supplier of EUV photolithography tools that we will be deploying in our Intel 4 and other future manufacturing process nodes. These tools are highly complex to develop and produce, and increasingly costly, and from time to time there are increases in lead times or delays in their development and availability, which could delay the development or ramp of our future process nodes. As a further example, a limited number of third-party foundries offer leading-edge manufacturing processes, and these providers are geographically concentrated in Asia. Supplier consolidation or business failures couldcan also reduce the pool of qualified suppliers. Sole- or limited-source suppliers can impact the nature, quality, availability, and pricing of the products and services available to us. The inabilityus and intensify the other risks described in this risk factor.
Our disaggregated design strategy introduces additional production risks. Our disaggregated design strategy poses increased logistical risks and challenges, particularly where we decide to manufacture different product components on different process technologies, including third-party foundries' process technologies. To combine components in a single package, they need to be manufactured on a timely basis and in sufficient quantities, while the manufacturing processes we utilize may have differing yields, throughput times, and capacity constraints. We may be required to safely store some components pending the manufacture of suppliers to deliver necessary production materialsothers. Delays or equipmentquality issues with one component could disruptlimit our production processes and make it more difficult for us to implement our business strategy. Production could be disrupted by the unavailability of resources, such as water, silicon, electricity, gases, and other materials. The unavailability or reduced availability of materials or resources may require us to reduce production or incur additional costs, which could harm our business and results of operations. Our manufacturing operations and ability to meet product demand may also be impacted by IP or other litigation betweenmanufacture the entire completed product. In addition, the packaging technologies used to combine these components can increase our suppliers, where an injunction against Intel or a supplier could interrupt the availability of goods or services supplied to Intel by others.
We also rely on third-party providers to manufacture and assemble and test certain components or products. These have included components and products related to networking, communications, programmable semiconductor solutions, and memory,costs and may include theseintroduce additional complexity and other components and products inquality issues. To the future. If any of these third partiesextent we are unable to performmanage these services on arisks, our ability to timely or cost-effective basis, in sufficient volumes, or at all, we may encounter supply delays or disruptions or incur additionalcompetitive products can be harmed and our costs that could adversely affect our business and financial results. For example, while we have an agreement providing for the supply of 3D XPoint memory from IMFT for a period following the close of Micron’s purchase of our interest in IMFT, we will need to fund and develop internal manufacturing options to continue 3D XPoint memory supply in the longer term.increase.
In addition, increased regulation or stakeholder expectations regarding responsible sourcing practices could cause our compliance costs to increase or result in publicity that negatively affects our reputation. Moreover, given that we use many materials in the manufacturing of our products and rely on many suppliers to provide these materials, but do not directly control the procurement or employment practices of such suppliers, we could be subject to similar financial or reputational risks as a result of our suppliers' conduct.
We are subject to the risks of product defects, errata, or other product issues.ProductFrom time to time, we identify product defects, and errata (deviations from published specifications) may, and other product issues, which can result from problems in our product design or our manufacturing and assembly and test processes. Components and products we purchase or license from third-party suppliers, or attaingain through acquisitions, maycan also contain defects. Product issues also sometimes result from the interaction between our products and third-party products and software. We could face risks if products that we design, manufacture, or sell, or that include our technology, cause personal injury or property damage, even where the cause is unrelated to product defects or errata. These risks may increase as our products are introduced into new devices, market segments, technologies, or applications, including transportation, and autonomous driving, healthcare, communications, and financial services, and other industrial, critical infrastructure, and consumer uses.
Costs from defects, errata, or other product issues could include:
▪writing off some or all of the value of inventory;
▪recalling products that have been shipped;
▪providing product replacements or modifications;
reimbursing▪providing consideration to customers, including reimbursement for certain costs they incur;
▪defending against litigation and/or paying resulting damages; and
▪paying fines imposed by regulatory agencies.
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These costs could be large and may increase expenses and lower gross margin, andand/or result in delay or loss of revenue. AnyMitigation techniques designed to address product issues, including software and firmware updates, are not always available on a timely basis—or at all—and do not always operate as intended or effectively resolve such issues for all applications. We and third parties, such as hardware and software vendors, make prioritization decisions about which product issues to address, which can delay, limit, or prevent development or deployment of a mitigation and harm our reputation and result in costs. Product defects, errata, or other product issues could alsoand/or mitigation techniques can result in product failures, adverse performance and power effects, reboots, system instability or unavailability, loss of functionality, data loss or corruption, unpredictable system behavior, decisions by customers and end users to limit or change the applications in which they use our products or product features, and other issues. Product issues can damage our reputation, negatively affect product demand, delay product releases or deployment, result in legal liability. The announcement of product defectsliability, or errata could cause customers to purchasemake our products from competitors. Any of these occurrencesless competitive, which could harm our business and financial results. Subsequent events or new information can develop that changes our assessment of the impact of a product issue. In addition, although we maintainour liability insurance our coverage has certain exclusions and/or may not adequately cover liabilities incurred. Our insurance providers may be unable or unwilling to pay a claim, and losses not covered by insurance could be large, which could harm our financial condition.
We are subject to risks associated with environmental, health, and safety regulations. The manufacturing and assembly and test of our products require the use of hazardous materials that are subject to a broad array of environmental, health, and safety laws and regulations. Our failure to comply with these laws or regulations could result in:
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.
Our failure to manage the use, transportation, emissions, discharge, storage, recycling, or disposal of hazardous materials could lead to increased costs or future liabilities. Our ability to expand or modify our manufacturing capability in the future may be impeded by environmental regulations, such as air quality and wastewater requirements. Environmental laws and regulations could also require us to acquire additional pollution abatement or remediation equipment, modify product designs, or incur other expenses. Regulations in response to climate change could result in increased manufacturing costs associated with air pollution requirements, and increased compliance and energy costs. Many new materials that we are evaluating for use in our operations may be subject to regulation under environmental laws and regulations. These restrictions could harm our business and results of operations by increasing our expenses or requiring us to alter manufacturing and assembly and test processes.

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WE ARE SUBJECT TO CYBERSECURITY AND PRIVACY RISKS.
We face risks related to cybersecurity threats and incidents. We regularly face attempts by others to gain unauthorized access through the Internet, or to introduce malicious software, to our IT systems. Additionally, individuals or organizations, including malicious hackers, state-sponsored organizations, insider threats including employees and third-party service providers, or intruders into our physical facilities, may attempt to gain unauthorized access and corrupt the processes of hardware and software products that we manufacture and services we provide. Due to the widespread use of our products, we are a frequent target of computer hackers and organizations that intend to sabotage, take control of, or otherwise corrupt our manufacturing or other processes, products, and services. We are also a target of malicious attackers who attempt to gain access to our network or data centers or those of our customers or end users; steal proprietary information related to our business, products, employees, and customers; or interrupt our systems and services or those of our customers or others. Such attempts are increasing in number and in technical sophistication, and if successful, could expose us and the affected parties to risk of loss or misuse of proprietary or confidential information or disruptions of our business operations. Our IT infrastructure also includes products and services provided by third parties, and these providers may experience breaches of their systems and products that impact the security of our systems and our proprietary or confidential information.
From time to time, we encounter intrusions or unauthorized access to our network, products, services, or infrastructure. To date, none have resulted in any material adverse impact to our business or operations. Such incidents, whether or not successful, could result in our incurring significant costs related to, for example, rebuilding internal systems, writing down inventory value, implementing additional threat protection measures, providing modifications to our products and services, defending against litigation, responding to regulatory inquiries or actions, paying damages, providing customers with incentives to maintain the business relationship, or taking other remedial steps with respect to third parties, as well as reputational harm. In addition, these threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate preventative measures. While we seek to detect and investigate all unauthorized attempts and attacks against our network, products, and services, and to prevent their recurrence where practicable through changes to our internal processes and tools and/or changes or updates to our products and services, we remain potentially vulnerable to additional known or unknown threats. In some instances, we, our customers, and the users of our products and services may be unaware of an incident or its magnitude and effects.
We face risks related to security vulnerabilities in our products.We or third parties regularly identify security vulnerabilities with respect to our processors and other products, as well as the operating systems and workloads runningthat run on them and the components that interact with them. AsComponents and IP we have become a more data-centric company,purchase or license from third parties for use in our products, as well as industry-standard specifications we implement in our products, are also regularly subject to security vulnerabilities. Our processors and other products are being used in more and different critical application areas that create new or increased cybersecurity and privacy risks, including applications that gather and process large amounts of data, such as the cloud or Internet of Things, and critical infrastructure and automotive applications. The security vulnerabilities identified in our processors include a category known as side-channel exploits,vulnerabilities, such as the variants referred to as “Spectre”"Spectre" and “Meltdown.”"Meltdown." Additional categories and variants have been identified and mayare expected to continue to be identified. Publicity about these and other security vulnerabilities has resulted in, and attempted or successful exploits, whether accurate or inaccurate, mayis expected to continue to result in, increased attempts by third parties to identify additional vulnerabilities. AlthoughSecurity and manageability features in our products cannot make our products absolutely secure, and these features themselves are subject to vulnerabilities have often been discovered and mitigated in advance of being exploited, it is possible that vulnerabilities mayattempts by third parties to identify additional vulnerabilities. Vulnerabilities are not bealways mitigated before they become known. We, our customers, and the users of our products maydo not always promptly learn of or be ablehave the ability to fully assess the magnitude or effects of a vulnerability, including the extent, if any, to which a vulnerability has been exploited. Subsequent events or new information couldcan develop that changes our assessment of the impact of a security vulnerability, including additional information learned as we develop and deploy mitigations or updates, become aware of additional variants, evaluate the competitiveness of existing and new products, and address future warranty or other claims or customer satisfaction considerations, as well as developments in the course of any litigation or regulatory inquiries or actions over these matters.
Mitigation techniques designed to address security vulnerabilities, including software and firmware updates or other preventative measures, mayare not bealways available on a timely basis—or at all—or mayand at times do not operate as intended or effectively resolve vulnerabilities for all applications. In addition, we may beare often required to rely on third parties, including hardware, software, and services vendors, as well as our customers and end users, to develop andand/or deploy mitigation techniques, and the availability, effectiveness, and performance impact of mitigation techniques maycan depend solely or in part on the actions of these third parties in determining whether, when, and how to develop and deploy mitigations. We and such third parties may make prioritization decisions about which vulnerabilities to address, which couldcan delay, limit, or limitprevent development or deployment of a mitigation and harm our reputation. Security vulnerabilities and/or mitigation techniques maycan result in adverse performance or power effects, reboots, system instability or unavailability, loss of functionality, data loss or corruption, unpredictable system behavior, decisions by customers and end users to limit or change the applications in which they use our products or product features, and/or the misappropriation of data by third parties.
Security vulnerabilities and any limitations of, or adverse effects resulting from,of mitigation techniques can adversely affect our results of operations, financial condition, customer relationships, prospects, and reputation in a number of ways, any of which may be material. For example, whether or not theyvulnerabilities involve attempted or successful exploits, they may result in our incurring significant costs related to developing and deploying updates and mitigations, writing down inventory value, defending against product claims and litigation, responding to regulatory inquiries or actions, paying damages, addressing customer satisfaction considerations, providing product replacements or modifications, or taking other remedial steps with respect to third parties. Adverse publicity about security vulnerabilities or mitigations could damage our reputation with customers or users and reduce demand for our products and services. These effects may be greater to the extent that competing products are not susceptible to the same vulnerabilities or if vulnerabilities can be more effectively mitigated in competing products. Moreover, third parties maycan release information regarding potential vulnerabilities of our products before mitigations are available, which, in turn, could lead to attempted or successful exploits, adversely affect our ability to introduce mitigations, or otherwise harm our business and reputation. For example, information
We are subject to risks associated with environmental, health, and safety regulations. The manufacturing and assembly and test of our products require the use of hazardous materials that are subject to a broad array of environmental, health, and safety laws and regulations. Our failure to comply with these laws or regulations can result in 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 the “Spectre” and “Meltdown” side-channel variants was prematurely reported publicly before mitigation techniquesour operations or sales. In addition, failure to address all vulnerabilities were made widely available, and certaincomply by our suppliers of the mitigation techniques did not operate as intended.

these materials can require us to suspend or alter our production processes.
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Our failure to manage the use, transportation, emissions, discharge, storage, recycling, or disposal of hazardous materials can lead to increased costs or future liabilities. Environmental regulations, such as air quality and wastewater requirements, may impede our ability to expand or modify our manufacturing capability in the future. Environmental laws and regulations sometimes require us to acquire additional pollution abatement or remediation equipment, modify product designs, or incur other expenses. Regulations in response to climate change could result in increased manufacturing costs associated with air pollution requirements. For example, semiconductor manufacturing uses perfluorocarbons, which have historically made up a large portion of our direct greenhouse gas emissions. New or increased regulations limiting the use of such compounds, or other greenhouse gas emissions, could require us to install additional abatement equipment, purchase carbon offsets, and/or alter our production processes. In addition, new or increased climate change regulation could increase our energy costs, for example as a result of carbon pricing impacts on electrical utilities. As we expand our manufacturing capacity as part of our IDM 2.0 strategy, the impacts of future regulation could be magnified. Many new materials that we are evaluating for use in our operations are subject to regulation under environmental laws and regulations. These restrictions could harm our business and results of operations by increasing our expenses or requiring us to alter manufacturing and assembly and test processes.
The COVID-19 pandemic could materially adversely affect our financial condition and results of operations.
The COVID-19 pandemic has previously adversely affected significant portions of our business and could have a material adverse effect on our financial condition and results of operations. Authorities have imposed, and businesses and individuals have implemented, numerous measures to try to contain the virus or treat its impact, such as travel bans and restrictions, quarantines, shelter-in-place/stay-at-home and social distancing orders, shutdowns, and vaccine requirements. These measures have impacted and may further impact our workforce and operations, the operations of our customers, and those of our respective suppliers and partners. We have experienced, and could in the future experience, reduced workforce availability at some of our sites, construction delays, and reduced capacity at some of our suppliers. We have significant manufacturing operations in the US, Ireland, Israel, China, Malaysia, and Vietnam, and each of these countries is taking measures in response to the pandemic. Restrictions on our manufacturing or support operations or workforce, similar limitations for our suppliers, and transportation restrictions or disruptions can limit our ability to meet customer demand and could have a material adverse effect on our financial condition and results of operations. Our customers have experienced, and may in the future experience, disruptions in their operations and supply chains, which can result in delayed, reduced, or cancelled orders, or collection risks, and which may adversely affect our results of operations.
The pandemic has caused us to modify our business practices, including with respect to employee travel; employee work locations; cancellation of physical participation in meetings, events, and conferences; and social distancing measures. As a US federal government contractor, we are subject to a federal executive order requiring our US employees to be vaccinated unless they qualify for medical or religious exemptions. The order has been challenged in court and its ultimate status, and the impact on our business, is uncertain. However, this requirement or other future vaccine mandates could adversely affect our workforce retention and hiring. Similarly, this requirement would apply to our suppliers working at our US sites, and to the extent such suppliers refuse to comply or decline to work with us based on the requirement or other future vaccine mandates, our business may be adversely affected, including higher costs or delays for our construction projects. We may take further actions as required by government authorities or others, or that we determine are in the best interests of our employees, customers, suppliers, and partners. Work-from-home and other measures introduce additional operational risks, including cybersecurity risks, and have affected the way we conduct our product development, validation, and qualification, customer support, and other activities, which could have a material adverse effect on our operations. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus, and illness and workforce disruptions could lead to unavailability of key personnel and harm our ability to perform critical functions.
The pandemic has significantly increased economic and demand uncertainty, and has led to volatility in capital markets and credit markets. Risks related to adverse changes in global economic conditions are described in our risk factor titled "Global or regional conditions can harm our financial results," and include the risk that demand for our products will be significantly harmed. Given the continued and substantial economic uncertainty and volatility created by the pandemic, it is difficult to predict the nature and extent of impacts on demand for our products. For example, the increased demand for notebook products as a result of work- and learn-from-home dynamics may not continue as the pandemic progresses.
The degree to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including the duration and severity of the pandemic; the actions taken to contain the virus or treat its impact; other actions taken by governments, businesses, and individuals in response to the virus and resulting economic disruption; and how quickly and to what extent normal economic and operating conditions can resume. Additional impacts and risks may arise that we are not aware of or able to respond to effectively. We are similarly unable to predict the extent of the impact of the pandemic on our customers, suppliers, and other partners, but a material effect on these parties could also materially adversely affect us. The impact of COVID-19 can also exacerbate other risks discussed in this Risk Factors section and throughout this report.
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We operate globally and are subject to theft,significant risks in many jurisdictions.
Global or regional conditions can harm our financial results.We have manufacturing, assembly and test, R&D, sales, and other operations in many countries, and some of our business activities are concentrated in one or more geographic areas. Moreover, sales outside the US accounted for 82% of our revenue for the fiscal year ended December 25, 2021, with revenue from billings to China contributing 27% of our total revenue. As a result, our operations and our financial results, including our ability to manufacture, assemble and test, design, develop, or sell products, and the demand for our products, are at times adversely affected by a number of global and regional factors outside of our control.
Adverse changes in global or regional economic conditions periodically occur, including recession or slowing growth, changes or uncertainty in fiscal, monetary, or trade policy, higher interest rates, tighter credit, inflation, lower capital expenditures by businesses including on IT infrastructure, increases in unemployment, and lower consumer confidence and spending. Adverse changes in economic conditions, including those related to the COVID-19 pandemic, can significantly harm demand for our products and make it more challenging to forecast our operating results and make business decisions, including regarding prioritization of investments in our business. An economic downturn or increased uncertainty may also lead to increased credit and collectability risks, higher borrowing costs or reduced availability of capital and credit markets, reduced liquidity, adverse impacts on our suppliers, failures of counterparties including financial institutions and insurers, asset impairments, and declines in the value of our financial instruments.
We can be adversely affected by other global and regional factors that periodically occur, including:
▪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 (including the COVID-19 pandemic), 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, including more favorable incentives provided to competitors;
▪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 US and abroad; and
▪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.
We are also subject to risks related to the cessation of US dollar LIBOR. Certain of our derivatives and floating-rate investments reference US dollar LIBOR, and a portion of our indebtedness bears interest at variable interest rates, primarily based on US dollar LIBOR. No new US dollar LIBOR-based activity should be conducted after 2021, and US dollar LIBOR will be unavailable for use in our existing contracts and financial instruments beyond June 30, 2023. While reasonable alternatives to LIBOR have been introduced into markets, our transition from LIBOR to alternative reference rates could result in an increase in our interest expense and/or a reduction in our interest income.
We are subject to risks related to trade policies and regulations. Trade policies and disputes at times result in increased tariffs, trade barriers, and other protectionist measures, which can increase our manufacturing costs, make our products less competitive, reduce demand for our products, limit our ability to sell to certain customers, limit our ability to procure components or raw materials, or impede or slow the movement of our goods across borders. Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to, some markets.
In particular, trade tensions between the US and China have led to increased tariffs and trade restrictions, including tariffs applicable to some of our products, and have affected customer ordering patterns. The US has imposed restrictions on the export of US-regulated products and technology to certain Chinese technology companies, including certain of our customers. These restrictions have reduced our sales, and continuing or future restrictions could adversely affect our financial performance, result in reputational harm to us, or lead such companies to develop or adopt technologies that compete with our products. It is difficult to predict what further trade-related actions governments may take, which may include trade restrictions and additional or increased tariffs and export controls imposed on short notice, and we may be unable to quickly and effectively react to or mitigate such actions.
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Trade disputes and protectionist measures, or continued uncertainty about such matters, could result in declining consumer confidence and slowing economic growth or recession, and could cause our customers to reduce, cancel, or alter the timing of their purchases with us. Sustained geopolitical tensions could lead to long-term changes in global trade and technology supply chains, and decoupling of global trade networks, which could have a material adverse effect on our business and growth prospects.
Laws and regulations can have a negative impact on our business. We are subject to laws and regulations worldwide that differ among jurisdictions, affecting our operations in areas including, but not limited to: IP ownership and infringement; tax; import and export requirements; anti-corruption; foreign exchange controls and cash repatriation restrictions; data privacy and localization requirements; competition; advertising; employment; product regulations; environment, health, and safety requirements; and consumer laws. Compliance with such requirements can be onerous and expensive, and may otherwise impact our business operations negatively. For example, unfavorable developments with evolving laws and regulations worldwide related to 5G or autonomous driving technology and MaaS may limit global adoption, impede our strategy, or negatively impact our long-term expectations for our investments in these areas. Expanding privacy legislation and compliance costs of privacy-related and data protection measures could adversely affect our customers and their products and services, particularly in cloud, Internet of Things, and AI applications, which could in turn reduce demand for our products used for those workloads.
Although we have policies, controls, and procedures designed to help ensure compliance with applicable laws, there can be no assurance that our employees, contractors, suppliers, or agents will not violate such laws or our policies. Violations of these laws and regulations can result in fines; criminal sanctions against us, our officers, or our employees; prohibitions on the conduct of our business; and damage to our reputation. The technology industry is subject to intense media, political, and regulatory scrutiny, which can increase our exposure to government investigations, legal actions, and penalties.
We are affected by fluctuations in currency exchange rates.We are exposed to adverse as well as beneficial movements in currency exchange rates. Although most of our sales occur in US dollars, expenses may be paid in local currencies. An increase in the value of the dollar can increase the real cost to our customers of our products in those markets outside the US where we sell in dollars, and a weakened dollar can increase the cost of expenses such as payroll, utilities, tax, and marketing expenses, as well as overseas capital expenditures. We also conduct certain investing and financing activities in local currencies. Our hedging programs may not be effective to offset any, or more than a portion, of the adverse impact of currency exchange rate movements; therefore, changes in exchange rates can harm our results of operations and financial condition.
Catastrophic events can have a material adverse effect on our operations and financial results.Our operations and business, and those of our customers and suppliers, can be disrupted by natural disasters; industrial accidents; public health issues (including the COVID-19 pandemic); cybersecurity incidents; interruptions of service from utilities, transportation, telecommunications, or IT systems providers; manufacturing equipment failures; or other catastrophic events. For example, we have at times experienced disruptions in our manufacturing processes as a result of power outages, improperly functioning equipment, and disruptions in supply of raw materials or components, including due to cybersecurity incidents affecting our suppliers. Our headquarters and many of our operations and facilities are in locations that are prone to earthquakes and other natural disasters. Global climate change can result in certain natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storms, sea-level rise, and flooding, and could disrupt the availability of water necessary for the operation of our fabrication facilities, including facilities located in water-sensitive regions such as Arizona and Israel. In addition, to the extent we are unable to successfully manage and conserve water resources, our reputation could be harmed. In recent years, the west coast of the US has experienced significant wildfires, including in Oregon, where we have major manufacturing facilities. The long-term effects of climate change on the global economy and the technology industry in particular are unclear, but could be severe.
Catastrophic events could make it difficult or impossible to manufacture or deliver products to our customers, receive production materials from our suppliers, or perform critical functions, which could adversely affect our revenue and require significant recovery time and expenditures to resume operations. While we maintain business recovery plans, some of our systems are not fully redundant and we cannot be sure that our plans will fully protect us from such disruptions. Furthermore, even if our operations are unaffected or recover quickly, if our customers or suppliers cannot timely resume their own operations due to a catastrophic event, we may experience reduced or cancelled orders or disruptions to our supply chain that may adversely affect our results of operations.
We maintain a program of insurance coverage for a variety of property, casualty, and other risks. The types and amounts of insurance we obtain vary depending on availability, cost, and decisions with respect to risk retention. Some of our policies have large deductibles and broad exclusions. In addition, one or more of our insurance providers may be unable or unwilling to pay a claim. Losses not covered by insurance may be large, which could harm our results of operations and financial condition.
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Damage to our reputation can damage our business. Our reputation is a critical factor in our relationships with customers, employees, governments, suppliers, and other stakeholders. Our failure to address, or the appearance of our failure to address, issues that give rise to reputational risk, including those described throughout this Risk Factors section, could significantly harm our reputation and our brands. Our reputation can be impacted by catastrophic events (including our response to the COVID-19 pandemic); incidents involving unethical behavior or misconduct; product quality, security, or safety issues; allegations of legal noncompliance; internal control failures; corporate governance issues; data breaches; workplace safety incidents; environmental incidents; our response to climate change, including our greenhouse gas emission levels; the use of our products for illegal or objectionable applications, including AI and machine learning applications that present ethical, regulatory, or other issues; marketing practices; media statements; the conduct of our suppliers or representatives; and other issues, incidents, or statements that, whether actual or perceived, result in adverse publicity. To the extent we fail to respond quickly and effectively to address corporate crises, the ensuing negative public reaction could significantly harm our reputation and our brands and could lead to increases in litigation claims and asserted damages or subject us to regulatory actions or restrictions.
Damage to our reputation could reduce demand for our products and adversely affect our business and operating environment. It could reduce investor confidence in us, adversely affecting our stock price. It may also limit our ability to be seen as an employer of choice when competing for highly skilled employees. Moreover, repairing our reputation and brands may be difficult, time-consuming, and expensive.
We are subject to cybersecurity and privacy risks.
We face risks related to cybersecurity threats and incidents. We regularly face attempts by others to gain unauthorized access through the Internet, or to introduce malicious software, to our IT systems. Individuals or organizations, including malicious hackers, state-sponsored organizations, insider threats including employees and third-party service providers, or intruders into our physical facilities, at times attempt to gain unauthorized access and/or corrupt the processes used to design and manufacture our hardware products and our associated software and services. Due to the widespread use of our products, we are a frequent target of computer hackers and organizations that intend to sabotage, compromise, take control of, or otherwise corrupt our manufacturing or other processes, products, and services. We are also a target of malicious attackers who attempt to gain access to our network or data centers or those of our suppliers, customers, partners, or end users; steal proprietary information related to our business, products, employees, suppliers, and customers; interrupt our systems and services or those of our suppliers, customers, or others; or demand ransom to return control of such systems and services. Such attempts are increasing in number and in technical sophistication, and if successful, expose us and the affected parties to risk of loss or misuse of proprietary or confidential information or disruptions of our business operations, including our manufacturing operations. Our IT infrastructure also includes products and services provided by third parties, and these providers can experience breaches of their systems and products, or provide inadequate updates or support, which can impact the security of our systems and our proprietary or confidential information.
From time to time, we encounter intrusions or unauthorized access to our network, products, services, or infrastructure, as well as those of third parties who provide products and services to us. For example, in the fourth quarter of 2020, our Habana Labs subsidiary’s network was breached, resulting in unauthorized third-party access of certain confidential information, in connection with a suspected unsuccessful ransomware attack. The breach was confined to our subsidiary's network and has not had a material impact on Habana Labs’ business. We are also subject to risks associated with attacks involving our supply chain, such as the compromise of IT infrastructure management software provided by SolarWinds Corporation, reported in the fourth quarter of 2020. During 2021, we have observed an increase in ransomware attacks in our supply chain. In December 2021, a vulnerability named “Log4Shell” was reported for the widely used Java logging library, Apache Log4j 2. We have reviewed the use of this library within our software product portfolio and in our IT environment and have taken steps to mitigate the vulnerability. To date, cybersecurity incidents have not resulted in a material adverse impact to our business or operations, but there can be no guarantee we will not experience such an impact. Such incidents, whether or not successful, could result in our incurring significant costs related to, for example, rebuilding internal systems, writing down inventory value, implementing additional threat protection measures, providing modifications to our products and services, defending against litigation, responding to regulatory inquiries or actions, paying damages, providing customers with incentives to maintain the business relationship, or taking other remedial steps with respect to third parties, as well as reputational harm. In addition, these threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate preventative measures. As a result of the COVID-19 pandemic, remote work and remote access to our systems has increased significantly, which also increases our cybersecurity attack surface. We have also seen an increase in cyberattack volume, frequency, and sophistication driven by the global enablement of remote workforces. We seek to detect and investigate unauthorized attempts and attacks against our network, products, and services, and to prevent their recurrence where practicable through changes or updates to our internal processes and tools and changes or updates to our products and services; however, we remain potentially vulnerable to additional known or unknown threats. In some instances, we, our suppliers, our customers, and the users of our products and services can be unaware of an incident or its magnitude and effects. There is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm.
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Theft, loss, or misuse of personal data about our employees, customers, or other third parties which could increase our expenses, damage our reputation, or result in legal or regulatory proceedings.The theft, loss, or misuse of personal data collected, used, stored, or transferred by us to run our business, including data stored with vendors or other third parties, could result in significantly increased business and security costs or costs related to defending legal claims. We anticipate that our collection of such personal data will increase as we enter into the MaaS market in our Mobileye business, and it may increase as we enter into other new or adjacent businesses. Global privacy legislation, enforcement, and policy activity in this area are rapidly expanding and creating a complex regulatory compliance environment. Costs to comply with and implement these privacy-related and data protection measures could be significant, and noncompliance could expose us to significant monetary penalties, damage to our reputation, suspension of online services or sites in certain countries, and even criminal sanctions.sanctions. Even our inadvertent failure to comply with federal, state, or international privacy-related or data protectiondata-protection laws and regulations could result in audits, regulatory inquiries, or proceedings against us by governmental entities or other third parties.parties.
WE ARE SUBJECT TOWe are subject to IP RISKS AND RISKS ASSOCIATED WITH LITIGATION AND REGULATORY PROCEEDINGS.risks and risks associated with litigation and regulatory proceedings.
We may be unable to enforce orcannot always protect our IP or enforce our IP rights.We regard our patents, copyrights, trade secrets, and other IP rights as important to the success of our business. We rely on IP law—as well as confidentiality and licensing agreements with our customers, employees, technology development partners, and others—to protect our IP and IP rights. Our ability to enforce these rights is subject to general litigation risks, as well as uncertainty as to the enforceability of our IP rights in various countries. We are not always able to obtain protection for our IP or enforce or protect our IP rights. Enforcement may beis costly and time-consuming and maycan divert management attention. When we seek to enforce our rights, we may be subject to claims that our IP rights are invalid, not enforceable, or licensed to an opposing party. Our assertion of IP rights may result in another party seeking to assert claims against us, which could harm our business. Governments mayFrom time to time, governments adopt regulations—and governments or courts may render decisions—requiring compulsory licensing of IP rights, or governments may require products to meet standards that favor local companies. Our inability to enforce our IP rights under any of these circumstances maycan harm our competitive position and business. In some cases, our IP rights can offer inadequate protection for our innovations. In addition, the theft or unauthorized use or publication of our trade secrets and other confidential business information could harm our competitive position and reduce acceptance of our products; as a result, the value of our investment in R&D, product development, and marketing could be reduced. This risk is heightened as competitors for technical talent increasingly seek to hire our employees.
Our licenses with other companies and participation in industry initiatives mayat times allow competitors to use some of our patent rights. Technology companies often bilaterally license patents between each other to settle disputes or as part of business agreements. OurSome of our competitors have in the past had, and may in the future have, licenses to some of our patents, and under current case law, some of the licenses maycan exhaust our patent rights as to licensed product sales under some circumstances. Our participation in industry standards organizations or with other industry initiatives may requireat times requires us to offer to license our patents to companies that adopt industry-standard specifications. Depending on the rules of the organization, government regulations, or court decisions, we mightsometimes have to grant licenses to some of our patents for little or no cost, and as a result, we may be unable to enforce certain patents against others, our costs of enforcing our licenses or protecting our patents may increase, and the value of our IP rights may be impaired.
Third parties may assert claims based on IP rights against us orand our products, which could harm our business.We may face claims based on IP rights from individuals, companies, non-practicing entities, academic and companies,research institutions, and other parties, including claims from those who have aggregated patents acquired from multiple sources to form a new, larger portfolio to assert claims against us and other companies. Additionally, large patent portfolio owners maysometimes divest portions of their portfolios to more than one individual or company, increasing the number of parties who own IP rights previously all held by a single party. We have seen an increase in patent assertions and lawsuits initiated by well-funded non-practicing entities, including entities funded by investment firms and other third parties. In some instances, these entities have filed multi-jurisdiction litigation seeking large monetary damages and/or injunctions against us. These lawsuits can increase our cost of doing business and could disrupt our operations if they succeed in blocking the trade of our products. For example, in the multi-jurisdiction litigation brought against us by VLSI, a jury in one of the pending US federal court cases returned a verdict in February 2021 awarding approximately $2.2 billion in damages to VLSI, as discussed in Note 19: Commitments and Contingencies within the Consolidated Financial Statements. The patent litigation environment has also become more challenging due to the emergence of venues adopting procedural and substantive rules that make them more favorable for patent asserters, including the availability of injunctive relief for non-practicing entities, and the US Patent and Trademark Office’s reduction of inter partes patent review under the America Invents Act. As a result, we believe we are facing a more hostile IP litigation environment.
We are typically engaged in a number of disputes involving IP rights. Claims that our products, technologies, or processes infringe the IP rights of others, regardless of their merits, could cause us to incur large costs to respond to, defend, and resolve the claims, and they may divert the efforts and attention of our management and technical personnel from our business and operations. In addition, we may face claims based on the alleged theft or unauthorized use or disclosure of third-party trade secrets, or confidential information, or end-user data that we obtain in conducting our business. Any such incidents and claims could severely disrupt our business, and we could suffer losses, including the cost of product recalls and returns, and reputational harm. Furthermore, we have agreed to indemnify customers for certain IP rights claims against them. IP rights claims against our customers could also limit demand for our products or disrupt our customers’customers' businesses, which could in turn adversely affect our results of operations.
As a result of IP rights claims, we could:
▪pay monetary damages, including payments to satisfy indemnification obligations, royalties, fines, or royalties;penalties;
▪stop manufacturing, using, selling, offering to sell, or importing products or technology subject to claims;    
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▪need to develop other products or technology not subject to claims, which could be time-consuming or costly; and/or
▪enter into settlement andor license agreements, which agreements may not be available on commercially reasonable terms.terms and may be costly.
These IP rights claims could harm our competitive position, result in expenses, or require us to impair our assets. If we alter or stop production of affected items, our revenue could be harmed.
We rely on access to third-party IP, which may not be available to us on commercially reasonable terms or at all.Many of our products are designed to include third-party technology and/or implement industry standards, andwhich may require licenses from third parties. Based on past experience and industry practice,In addition, from time to time, third parties notify us that they believe we believeare using their IP. There is no assurance that necessary licenses to such licenses generallythird-party IP can be obtained on commercially reasonable terms. However, there is no assuranceterms or at all, or that the necessaryour existing licenses canto third-party IP will continue to be obtainedavailable on acceptablecommercially reasonable terms or at all. Failure to obtain the right to use third-party technology, or to license IP on commercially reasonable terms, could preclude us from selling certain products or otherwise have a material adverse impact on our financial condition and operating results. To the extent our products include software that contains or is derived from open-source software, we may be required to make the software's source code publicly available and/or license the software under open-source licensing terms.

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We are subject to risks associated with litigation and regulatory proceedings.We maymatters. From time to time,we face legal claims or regulatory matters involving stockholder, consumer, competition, commercial, IP, labor and employment, compliance, and other issues on a global basis. As described in "Note 20:19: Commitments and Contingencies" within the Consolidated Financial Statements, we are engaged in a number of litigation and regulatory matters. Litigation and regulatory proceedings are inherently uncertain, and adverse rulings, excessive verdicts, or other events could occur, including monetary damages, fines, penalties, or an injunction stopping us from manufacturing or selling certain products, engaging in certain business practices, or requiring other remedies, such as compulsory licensing of patents. An unfavorable outcome maycan result in a material adverse impact on our business, financial condition, and results of operations. In addition, regardlessRegardless of the outcome, litigation and regulatory proceedings can be costly, time-consuming, disruptive to our operations, harmful to our reputation, and distracting to management.
WE MUST ATTRACT, RETAIN, AND MOTIVATE KEY EMPLOYEES.
To be competitive, weWe must attract, retain, and motivate executives and other key employees.
Hiring and retaining qualified executives, scientists, engineers, technical staff, and sales representatives are critical to our business, andbusiness. The competition for highly skilled employees in our industry can beis increasingly intense. Competitors for technical talent increasingly seek to hire our employees, and the increased availability of work-from-home arrangements, accelerated by the COVID-19 pandemic, has both intensified and expanded competition. In addition, changes in immigration policies may further limit the pool of available talent and impair our ability to recruit and hire technical and professional talent. We have intensified our efforts to recruit and retain talent. These efforts have increased our expenses, and they may not be successful in attracting, retaining, and motivating the workforce necessary to deliver on our strategy. Changes in the interpretation and application of employment-related laws applicable to our workforce practices may also result in increased operating costsexpenses and less flexibility in how we meet our changing workforce needs. To help attract, retain, and motivate qualified employees, we use share-based awards, such as RSUs, and performance-based cash incentive awards. Sustained declines in our stock price, or lower stock price performance relative to competitors, can reduce the retention value of our share-based awards. Our employee hiring and retention also depend on our ability to build and maintain a diverse and inclusive workplace culture and be viewed as an employer of choice. IfTo the extent our share-based or other compensation programs and workplace culture cease to beare not viewed as competitive, our ability to attract, retain, and motivate employees couldcan be weakened, which could harm our results of operations. Furthermore, changes
Changes in our management team maycan also disrupt our business,business. For example, we appointed a new CEO effective in February 2021 and a new CFO in January 2022 and made several other changes to our senior leadership during the past year. The failure to successfully transition and assimilate key employees could adversely affect our results of operations. To the extent we do not effectively hire, onboard, retain, and motivate key employees, our business can be harmed.
WE ARE SUBJECT TO RISKS ASSOCIATED WITH OUR STRATEGIC TRANSACTIONS.We are subject to risks associated with our strategic transactions.
Our acquisitions, divestitures, and other strategic transactions could fail to achieve our financial or strategic objectives, disrupt our ongoing business, and adversely impact our results of operations. In furtherance Strategic transactions are an important component of our business strategy, wefinancial capital allocation strategy. We routinely evaluate opportunities and enter into agreements for possible acquisitions, divestitures, and other strategic transactions. These transactions involve numerous risks, including:
we may not be able▪our inability to identify opportunities in a timely manner or on terms acceptable to us;
▪failure of the transaction may notto advance our business strategy and failure of its anticipated benefits may neverto materialize;
we may experience ▪disruption of our ongoing operations and diversion of our management’s attention may be diverted;management's attention;
we may fail▪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;
we may not▪our failure to realize a satisfactory return on our investment, potentially resulting in an impairment of goodwill and other assets, and restructuring charges;
we may be unable▪our inability to effectively enter new market segments through our strategic transactions or retain customers and partners of acquired businesses;
we may be unable▪our inability to retain key personnel of acquired businesses or may haveour difficulty in integrating employees, business systems, and technology;
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▪controls, processes, and procedures of acquired businesses maythat do not adequately ensure compliance with laws and regulations, and we may failour failure to identify compliance issues or liabilities;
we may fail▪our failure to identify, or may underestimate,our underestimation of, commitments, liabilities, and other risks associated with acquired businesses or assets; and/orand
▪the potential for our acquisitions mayto result in dilutive issuances of our equity securities or significant additional debt.
Moreover, our resources are limited and our decision to pursue a transaction has opportunity costs; accordingly, if we pursue a particular transaction, we may need to forgo the prospect of entering into other transactions that could help us achieve our financial or strategic objectives.
Any of these risks could have a material adverse effect on our business, results of operations, financial condition, or cash flows, particularly in the case of a large acquisition or several concurrent acquisitions. Moreover, our resources are limited and our decision to pursue a transaction has opportunity costs; accordingly, if we pursue a particular transaction, we at times need to forgo the prospect of entering into other transactions that could help us achieve our financial or strategic objectives.
Where an existing investment does not strategically align to our key priorities, we routinely evaluate opportunities for possible divestitures and other options. We may not realize the anticipated benefits of divestitures due to risks that include unfavorable prices and terms; changes in market conditions or geopolitical conditions affecting the regions or industries in which we or counterparties operate; failure to receive regulatory or governmental approvals; limitations or restrictions due to regulatory or governmental approvals, litigation, contractual terms, or other conditions; delays in closing; lack of support by third parties; actions by competitors; adverse effects on our business relationships, operating results, or business due to the announcement and pendency of such transactions; and continued financial obligations, unanticipated liabilities, or transition costs associated with such transactions. In some cases, we are not able to divest investments on acceptable terms or at all.
We invest in public and private companies and maydo not always realize a return on our investments.We make investments in public and private companies around the world to further our strategic and financial objectives and to support certain key business initiatives. Companies in which we invest range fromThese companies can include early-stage companies still defining their strategic direction to mature companies with established revenue streams and business models.direction. Many of the instruments in which we invest are non-marketable and illiquid at the time of our initial investment, and we mayare not bealways able to achieve a return if any, in a timely fashion.fashion, if at all. Our ability to realize a return on our investment in a private company, if any, is typically dependent on the company participating in a liquidity event, such as a public offering or acquisition. To the extent our investments are in marketable equity securities, as is typically the case for our public company investments, fluctuations in the fair value of those securities are recognized as gains or losses in our income statement, and consequently, declines in the fair value of these investments can reduce our net income. If any of the companies in which we invest are not successful, which may include failures to achieve business objectives as well asat times includes bankruptcy, filings, we could recognize an impairment and/or lose all or part of our investment.

There are risks associated with our previously-announced proposed IPO of Mobileye. We announced that we intend to take Mobileye public in the US via an IPO of newly issued Mobileye stock, and that we expect to retain majority ownership of Mobileye following the completion of the IPO. The IPO may not be completed in our expected timeframe, or at all, due to factors that include adverse changes in economic or market conditions or in our business; delays in regulatory, stock exchange, or other approvals; loss of Mobileye key employees, and changes in our business strategy. If we do not complete the IPO, our ability to retain and attract Mobileye employees could be adversely affected, and we will have incurred expenses that we will be unable to recover, and for which we will not receive any benefit. If completed, the IPO may not produce any increase for our stockholders in the market value of their holdings in our company. In addition, the market price of our common stock could be more volatile after the IPO.
We are subject to sales-related risks.
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WE ARE SUBJECT TO SALES-RELATED RISKS.
We face risks related to sales through distributors and other third parties.We sell a significant portion of our products through third parties such as distributors, value-added resellers, and channel partners (collectively referred to as distributors), as well as OEMs and ODMs. We depend on many distributors to help us create end-customer demand, provide technical support and other value-added services to customers, fill customer orders, and stock our products. We mayAt times, we rely on one or more key distributors for a product, and a material change in our relationship with one or more of these distributors or their failure to perform as expected could reduce our revenue. Our ability to add or replace distributors for some of our products may beis limited. In addition, our distributors' expertise in the determination and stocking of acceptable inventory levels for some of our products mayis not bealways easily transferable to a new distributor; as a result, end customers may be hesitant to accept the addition or replacement of a distributor. Using third parties for distribution exposes us to many risks, including competitive pressure and concentration, credit, and compliance risks. Distributors and other third parties may sell products that compete with our products, and we maysometimes need to provide financial and other incentives to focus them on the sale of our products. They mayFrom time to time, they face financial difficulties, including bankruptcy, which could harm our collection of accounts receivable and financial results. Violations of the Foreign Corrupt Practices Act or similar laws by distributors or other third-party intermediaries could have a material impact on our business. Failure to manage risks related to our use of distributors and other third parties may reduce sales, increase expenses, and weaken our competitive position.
From time to time, our products are resold by third parties in an unauthorized "gray market." Gray market products can distort demand and pricing dynamics in our distribution channel and certain geographies, which at times adversely affects our revenue opportunities. Gray market activity is difficult to monitor and can make forecasting demand more challenging. Gray market products also sometimes include parts that have been altered or damaged, and our reputation may be harmed when these products fail or are found to be substandard.
We receive a significant portion of our revenue from a limited number of customers. Collectively, our three largest customers accounted for approximately43% of our net revenue in 2021 and 39% of our net revenue in 2018 and 40% of our net revenue in 2017.2020. We expect a small number of customers will continue to account for a significant portion of our revenue in the foreseeable future.
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Industry trends, such as the increasing shift of data center workloads to the public cloud, may increase customer concentration forhave increased the significance and purchasing power of certain customers, particularly cloud service providers, in some of our data-centricdata center-focused businesses. If oneThe cloud and cloud applications represent a new and increasingly demanding computing environment. The further consolidation of computing workloads in the cloud, and consolidation among cloud service providers, can heighten the competitive importance of factors such as collaboration and customization with cloud service provider customers to optimize products for their environments; optimization for cloud services and applications; product performance; energy efficiency; feature differentiation; product quality, reliability, and factors affecting server uptime; and product security and security features. Our competitive position can be eroded to the extent we do not execute effectively across these factors. We are operating in an increasingly competitive environment, including in serving cloud service provider customers, and the competitive environment adversely affected our keyresults in DCG in 2021.
Some cloud service provider customers stops purchasing from us, materially reduces its demandhave also internally developed, and may continue to develop, their own semiconductors, including designs customized for their specific computing workloads. In addition, cloud services can be marketed to end users based on service levels or features rather than hardware specifications, or they can abstract hardware under layers of software, which can make it more difficult to differentiate our products or delays its orders for our products, weto customers and end users. The shift of data center workloads to the cloud has also adversely affected, and may experience a reduction in revenue, which could harm our results of operationscontinue to affect, sales to enterprise and financial condition.government market segment customers when end users have elected to migrate workloads. To the extent we differentiate our products through customization to meet cloud customer specifications, order changes, delays, or cancellations may result in non-recoverable costs.
The loss of a key customer, a substantial reduction in sales to them, or changes in the timing of their orders can lead to a reduction in our revenue, increase the volatility of our results, and harm our results of operations and financial condition. For more information about our customers, including customers who accounted for greater than 10% of our net consolidated revenue, see "Note 4:3: Operating Segments" within the Consolidated Financial Statements.
We face risks related to business transactions with U.S. government entities.We receive proceeds from servicesUS federal, state, local, and foreign government entities associated with grants, incentives, and sales of our products we provide to the U.S. government. U.S. governmentand services. Government demand and payment may beare often affected by public sector budgetary cycles and funding authorizations. U.S.authorizations, including, with respect to US government contracts, congressional approval of appropriations. Government contracts are subject to procurement laws and regulations relating to the award, administration, and performance of those contracts, as well as oversight includingand penalties for violations. For example, certain agreements with the US government are subject to special rules on accounting, IP rights, expenses, reviews, information handling, security, and/or employees, and security. Failurefailure to comply with these rules could result in civil and criminal penalties and sanctions, including termination of contracts, fines, and suspensions,suspension or debarment from future business with the U.S.US government.
CHANGES IN OUR EFFECTIVE TAX RATE MAY REDUCE OUR NET INCOME.Changes in our effective tax rate may reduce our net income.
A number of factors maycan increase our effective tax rates,rate, which could reduce our net income, including:    
▪changes in the volume and mix of profits earned and location of assets 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.US federal, state, or foreign tax laws or their interpretation, including changes in the U.S.US to the taxation of manufacturing enterprises and of non-U.S.non-US income and expenses;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.non-US earnings for which we have not previously provided for local country withholding taxes incurred upon repatriation.
WE MAY HAVE FLUCTUATIONS IN THE AMOUNT AND FREQUENCY OF OUR STOCK REPURCHASES.We have fluctuations in the amount and frequency of our stock repurchases.
We are not obligated to make repurchases under our stock repurchase program, and theprogram. The amount, timing, and execution of our repurchases may fluctuate based on our priorities for the use offactors that include prioritizing cash for other purposes—purposes, such as investing in our business, including operational spending, capital spending, and acquisitions, and returning cash to our stockholders as dividend payments—and because of changes in cash flows, tax laws, andpayments. Our stock repurchase program may be suspended or terminated at any time. Moreover, we cannot guarantee that repurchases will enhance long-term stockholder value. We expect our future stock repurchases to be significantly below our levels from the market price of our common stock.last few years.




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Properties
NON-GAAP FINANCIAL MEASURES
In addition to disclosing financial results in accordance with GAAP, this document contains references to the non-GAAP financial measures described below. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance.
Our non-GAAP operating income and diluted earnings per share reflect adjustments for the following items, as well as the related income tax effects. Income tax effects have been calculated using an appropriate tax rate for each adjustment. We also provide a non-GAAP financial measure of free cash flow, as described below. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated.
ACQUISITION-RELATED ADJUSTMENTS
Deferred revenue write-down:Sales to distributors are made under agreements allowing for subsequent price adjustments and returns, and prior to 2018, were deferred until the products were resold by the distributor. Business combination accounting principles require us to write down to fair value the deferred revenue assumed in our acquisitions, as we have limited performance obligations associated with this deferred revenue. Our GAAP revenue and related cost of sales for the subsequent reselling by distributors to end customers after an acquisition do not reflect the full amounts that would have been reported if the acquired deferred revenue was not written down to fair value. The non-GAAP adjustments made in Q1 2016 eliminated the effect of the deferred revenue write-down associated with our acquisition of Altera. We believe these adjustments are useful to investors as an additional means to reflect revenue and gross margin trends of our business.
Inventory valuation adjustments: Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of inventory reflects the acquired company’s cost of manufacturing plus a portion of the expected profit margin. The non-GAAP adjustments to our cost of sales exclude the expected profit margin component that is recorded under business combination accounting principles associated with our acquisitions of Mobileye and Altera. We believe the adjustments are useful to investors as an additional means to reflect cost of sales and gross margin trends of our business.
Amortization of acquisition-related intangible assets:Amortization of acquisition-related intangible assets consists of amortization of intangible assets such as developed technology, brands, and customer relationships acquired in connection with business combinations. We record charges related to the amortization of these intangibles within both cost of sales and operating expenses in our GAAP financial statements. Amortization charges for our acquisition-related intangible assets are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. Consequently, our non-GAAP adjustments exclude these charges to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
Other acquisition-related charges: Other acquisition-related charges exclude the impact of other charges associated with the acquisitions of Mobileye and Altera. These charges primarily include bankers' fees, compensation-related costs, and valuation charges for stock-based compensation incurred related to the acquisitions. We believe these adjustments are useful to investors as an additional means to reflect the spending trends of our business.
RESTRUCTURING AND OTHER CHARGES
Restructuring charges are costs associated with a formal restructuring plan and are primarily related to employee severance and benefit arrangements. Other charges include asset impairments, pension charges, and costs associated with the ISecG divestiture. We exclude restructuring and other charges, including any adjustments to charges recorded in prior periods, for purposes of calculating certain non-GAAP measures. We believe that these costs do not reflect our current operating performance. Consequently, our non-GAAP adjustments exclude these charges to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
ONGOING MARK-TO-MARKET ON MARKETABLE EQUITY SECURITIES
We exclude gains and losses resulting from ongoing mark-to-market adjustments of our marketable equity securities, after the initial mark-to-market adjustment is recorded upon a security becoming marketable, when calculating certain non-GAAP measures, as we do not believe this volatility correlates to our core operational performance. Consequently, our non-GAAP earnings per share figures exclude these impacts to facilitate an evaluation of our current performance and comparisons to our past operating performance.
GAINS OR LOSSES FROM DIVESTITURE
We divested ISecG in Q2 2017 and Wind River in Q2 2018. We exclude gains or losses and related tax impacts resulting from divestitures when calculating certain non-GAAP measures. We believe making these adjustments facilitates a better evaluation of our current operating performance and comparisons to our past operating performance.

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TAX REFORM ADJUSTMENT
We recognized a higher income tax expense in Q4 2017 as a result of Tax Reform and have made adjustments to the original estimate in 2018. We exclude the Q4 2017 provisional tax estimate and 2018 provisional tax adjustments relating to the transition tax on our previously untaxed foreign earnings and the remeasurement of our deferred income taxes to the new U.S. statutory tax rate for purposes of calculating certain non-GAAP measures. We believe making this adjustment facilitates a better evaluation of our current operating performance and comparisons to past operating results.
FREE CASH FLOW
We reference a non-GAAP financial measure of free cash flow, which is used by management when assessing our sources of liquidity, capital resources, and quality of earnings. We believe this non-GAAP financial measure is helpful to investors in understanding our capital requirements and provides an additional means to reflect the cash flow trends of our business.
Following are the reconciliations of our most comparable GAAP measures to our non-GAAP measures presented:
Years Ended
(In Millions, Except Per Share Amounts)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Operating income $23,316
 $18,050
 $13,133
Deferred revenue write-down, net of cost of sales —
 —
 64
Inventory valuation adjustments —
 55
 387
Amortization of acquisition-related intangible assets 1,305
 1,089
 1,231
Other acquisition-related charges —
 113
 100
Restructuring and other charges (72) 384
 1,744
Non-GAAP operating income $24,549
 $19,691
 $16,659
Earnings per share - Diluted $4.48
 $1.99
 $2.12
Deferred revenue write-down, net of cost of sales —
 —
 0.01
Inventory valuation adjustments —
 0.01
 0.08
Amortization of acquisition-related intangible assets 0.28
 0.22
 0.25
Other acquisition-related charges —
 0.02
 0.02
Restructuring and other charges (0.02) 0.08
 0.39
(Gains) losses from divestitures (0.11) (0.08) —
Ongoing mark-to-market on marketable equity securities 0.03
 —
 —
Tax Reform (0.06) 1.13
 —
Income tax effect (0.02) 0.09
 (0.15)
Non-GAAP earnings per share - Diluted $4.58
 $3.46
 $2.72
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		 Dec 26,
2015		 Dec 27,
2014
Net cash provided by operating activities $29,432
 $22,110
 $21,808
 $19,018
 $20,418
Additions to property, plant and equipment (15,181) (11,778) (9,625) (7,326) (10,105)
Free cash flow $14,251
 $10,332
 $12,183
 $11,692
 $10,313
           
Net cash used for investing activities $(11,239) $(15,762) $(25,817) $(8,183) $(9,905)
Net cash provided by (used for) financing activities $(18,607) $(8,475) $(5,739) $1,912
 $(13,611)

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PROPERTIES
As of December 29, 2018,25, 2021, our major facilities consisted of:
(Square Feet in Millions) 
United
States
 
Other
Countries
 Total(Square Feet in Millions)United
States		Other
Countries		Total
Owned facilities 30.5
 22.2
 52.7
Owned facilities31 24 55 
Leased facilities 1.0
 6.6
 7.6
Leased facilities1 5 6 
Total facilities 31.5
 28.8
 60.3
Total facilities32 29 61 
Our principal executive offices are located in the U.S. and approximately half of our wafer manufacturing activities in 2018 were also located in the U.S.US. For more information on our wafer fabrication and our assembly and test facilities, see "Manufactured"Manufacturing Capital" within Fundamentals of Our Business.
We believe that theThe facilities described above are suitable and adequate for our present purposes, and that the productive capacity in our facilities is being utilized or in the process of being prepared for utilization as we continue to invest capitalmake investments to meet demand.expand our manufacturing capacity.
We do not identify or allocate assets by operating segment, as they are interchangeable in nature and used by multiple operating segments. For information on net property, plant and equipment by country, see "Note 7:6: Other Financial Statement Details" within the Consolidated Financial Statements.Statements and Supplemental Details.
MARKET FOR OUR COMMON STOCKMarket for Our Common Stock
The principal U.S.US market on which Intel’sIntel's common stock (symbol INTC) is traded is the Nasdaq Global Select Market. For dividend information, see "Financial Information by Quarter (Unaudited)" within the Consolidated Financial Statements.
As of January 26, 2019,21, 2022, there were approximately 116,000102,962 registered holders of record of Intel’sIntel's common stock. A substantially greater number of holders of Intel common stock are "street name" or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
ISSUER PURCHASES OF EQUITY SECURITIES
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Stock Performance Graph
The graph and table that follow compare the cumulative TSR of Intel's common stock with the cumulative total return of the S&P 100 Index*, the S&P 500 Index*, the S&P 500 IT Index*, and the SOX Index*1 for the five years ended December 25, 2021. The cumulative returns shown on the graph are based on Intel's fiscal year.
Comparison of Five-Year Cumulative Return for
Intel, S&P 100 Index, S&P 500 Index, S&P 500 IT Index, and SOX Index
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Years EndedDec 31, 2016Dec 30, 2017Dec 29, 2018Dec 28, 2019Dec 26, 2020Dec 25, 2021
Intel Corporation$100 $131 $136 $179 $144 $161 
S&P 100 Index$100 $122 $116 $156 $186 $242 
S&P 500 Index$100 $122 $115 $154 $179 $231 
S&P 500 IT Index$100 $139 $137 $209 $297 $401 
SOX Index$100 $141 $131 $217 $326 $472 
1 The graph and table assume that $100 was invested on the last day of trading for the fiscal year ended December 31, 2016 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.
Issuer Purchases of Equity Securities
We have an ongoing authorization, originally approved by our Board of Directors in 2005 and subsequently amended, to repurchase shares of our common stock in open market or negotiated transactions. As of December 29, 2018,25, 2021, we were authorized to repurchase up to $90.0$110.0 billion, of which $17.3$7.2 billion remained available. This amount includes an increase of $15.0 billion in the authorization limit approved by our Board of Directors in November 2018.
Common stock repurchase activity under our publicly announced stock repurchase program during each quarter of 2018 was as follows:
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 31, 2017 - March 31, 2018 40.8
 $47.93
 $11,237
April 1, 2018 - June 30, 2018 75.9
 $52.87
 $7,224
July 1, 2018 - September 29, 2018 50.1
 $49.83
 $4,728
September 30, 2018 - December 29, 2018 50.6
 $47.38
 $17,333
Total 217.3
 

  
Common stock repurchase activity under our stock repurchase program during Q4 20182021 was as follows:
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 30, 2018 - October 27, 2018 —
 $—
 $19,728
October 28, 2018 - November 24, 2018 21.3
 $47.71
 $18,714
November 25, 2018 - December 29, 2018 29.3
 $47.15
 $17,333
Total 50.6
    

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PeriodTotal 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 27, 2020 - March 27, 202139.5 $61.12 $7,243 
Total39.5 
We issue RSUs as part of our equity incentive plans. In our consolidated financial statements,Consolidated Financial Statements, we treat shares of common stock withheld for tax purposes on behalf of our employees in connection with the vesting of RSUs as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase plan,program and accordingly are not included in the common stock repurchase totals inexcluded from the preceding table.
AVAILABILITY OF COMPANY INFORMATION
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Information About Our Executive Officers
Name
Current Title
AgeExperience
Patrick P. Gelsinger60Mr. Gelsinger has been our Chief Executive Officer and a member of our Board of Directors since February 2021. He joined Intel from VMware, Inc., a provider of cloud computing and virtualization software and services, where he served as Chief Executive Officer from September 2012 to February 2021. Prior to joining VMware, Mr. Gelsinger served as President and Chief Operating Officer, EMC Information Infrastructure Products at EMC Corp., a data storage, information security and cloud computing company, from September 2009 to August 2012. Mr. Gelsinger’s career began at Intel, where he spent 30 years before joining EMC Corp. During his initial tenure at Intel, Mr. Gelsinger served in a number of roles, including Senior Vice President and Co-General Manager of the Digital Enterprise Group from 2005 to September 2009, Senior Vice President, Chief Technology Officer from 2002 to 2005, and leader of Desktop Products Group prior to that.
Chief Executive Officer
Sandra L. Rivera57Ms. Rivera has served as our Executive Vice President and General Manager of the Data Center and AI Group since July 2021. In this role, she leads strategy and product development for our data center products, including Intel Xeon and FPGA products, and leads our overall AI strategy and product roadmap. Before her current role, Ms. Rivera served as our Chief People Officer from June 2019 to July 2021. Prior to that, she oversaw strategy and product development for network infrastructure solutions as the General Manager of our Network Platforms Group from January 2015 to June 2019, most recently as Senior Vice President and General Manager. Ms. Rivera joined Intel in 2000 and has served in a variety of marketing and business development positions. Before joining Intel, she held management positions with Dialogic Corporation and Catalyst Telecom, Inc. and was co-founder and president of The CTI Authority, Inc. She is a member of the board of directors of Equinix, Inc.
Executive Vice President and General Manager, Data Center and AI Group
Steven R. Rodgers56Mr. Rodgers has been our Executive Vice President and General Counsel since January 2017 and oversees our legal, government, and trade groups. He previously led our legal and government groups as Senior Vice President and General Counsel from January 2015 to January 2017 and as Corporate Vice President and General Counsel from June 2014 to January 2015. Mr. Rodgers joined Intel in 2000 and has held a number of roles in our legal department, including Corporate Vice President and Deputy General Counsel from January 2014 until his appointment as Intel's fifth General Counsel in June 2014. Prior to joining Intel, he was a litigation partner at the firm of Brown & Bain, P.A.
Executive Vice President and General Counsel
David Zinsner53Mr. Zinsner joined Intel in January 2022 as our Executive Vice President and Chief Financial Officer, overseeing our global finance organization. He joined Intel from Micron Technology, Inc., a manufacturer of memory and storage products, where he most recently served as Executive Vice President and Chief Financial Officer. From February 2018 to October 2021, he served as Senior Vice President and Chief Financial Officer of Micron. Previously, from April 2017 to February 2018, he served as the President and Chief Operating Officer of Affirmed Networks, Inc. From January 2009 to April 2017, he served as Senior Vice President of Finance and Chief Financial Officer of Analog Devices, Inc. From July 2005 to January 2009, Mr. Zinsner served as Senior Vice President and Chief Financial Officer of Intersil Corporation.
Executive Vice President and Chief Financial Officer
Availability of Company Information
Our Internet address is www.intel.com. We publish voluntary reports on our website that outline our performance with respect to corporate responsibility, including environmental, health, and safety compliance.
We use our Investor Relations website, www.intc.com, as a routine channel for distribution of important information, including news releases, information about upcoming webcasts, analyst presentations, financial information, corporate governance practices, and corporate responsibility information. We post our filings at www.intc.com/secwww.intc.com the same day they are electronically filed with, or furnished to, the SEC, including our annual and quarterly reports on Forms 10-K and 10-Q and current reports on Form 8-K; our proxy statements; and any amendments to those reports or statements. We post our quarterly and annual earnings results at www.intc.com/results.cfmwww.intc.com, and do not distribute our financial results via a news wire service. All such postings and filings are available on our Investor Relations website free of charge. In addition, our Investor Relations website allows interested persons to sign up to automatically receive e-mail alerts when we post financial information. The SEC’s website, www.sec.gov, contains reports, proxyinformation and issue press releases, and to receive information statements, and other information regarding issuers that file electronically with the SEC. about upcoming events.
The content on any website referred to in this Form 10-K is not incorporated by reference in this Form 10-K unless expressly noted.

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Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934
FINANCIAL STATEMENTS AND SUPPLEMENTAL DETAILSSection 13(r) of the Exchange Act requires an issuer to disclose certain information in its periodic reports if it or any of its affiliates knowingly engaged in certain activities, transactions, or dealings with individuals or entities subject to specific US economic sanctions during the reporting period, even when the activities, transactions, or dealings are conducted in compliance with applicable law. On March 2, 2021, the US Secretary of State designated the Federal Security Service of the Russian Federation (FSB) as a party subject to one such sanction. From time to time, our local subsidiary is required to engage with the FSB as a licensing authority and file documents in order to conduct business within the Russian Federation. All such dealings are explicitly authorized by General License 1B issued by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), and there are no gross revenues or net profits directly associated with any such dealings by us with the FSB. We plan to continue these activities as required to conduct business in the Russian Federation to the extent permitted by applicable law.
On April 15, 2021, the US Department of the Treasury designated Pozitiv Teknolodzhiz, AO (Positive Technologies), a Russian IT security firm, as a party subject to one of the sanctions specified in Section 13(r). Prior to the designation, we communicated with Positive Technologies regarding its IT security research and coordinated disclosure of security vulnerabilities identified by the firm. Based on a license issued by OFAC, we resumed such communications. There are no gross revenues or net profits directly associated with any such activities. We plan to continue these communications in accordance with the terms and conditions of the OFAC license.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
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Financial Statements and Supplemental Details
We have defined certain terms and abbreviations used throughout our Form 10-K in "Key Terms" within this section.
Index to Consolidated Financial StatementsPage
Reports of Independent Registered Public Accounting Firm(PCAOB ID: 42)
6369
Consolidated Statements of Income
6572
Consolidated Statements of Comprehensive Income
6673
Consolidated Balance Sheets
6774
Consolidated Statements of Cash Flows
6875
Consolidated Statements of Stockholders’Stockholders' Equity
6976
Notes to Consolidated Financial Statements
7077
Basis
Note 1: Basis of Presentation
7077
Note 2: Accounting Policies
7077
Performance and Operations
Note 3: Recent Accounting StandardsOperating Segments
7682
Performance and Operations
Note 4: Operating SegmentsEarnings Per Share
7985
Note 5: Earnings Per ShareContract Liabilities
8185
Note 6: Contract Liabilities
82
Note 7: Other Financial Statement Details
8286
Note 8:7: Restructuring and Other Charges
8487
Note 9:8: Income Taxes
8487
Investments, Long-term Assets, and Debt
Note 10:9: Investments
8790
Note 11:10: Acquisitions and Divestitures
8991
Note 12:11: Goodwill
9193
Note 13:12: Identified Intangible Assets
9293
Note 14: Other Long-Term Assets13: Borrowings
9394
Note 15: Borrowings14: Fair Value
9397
Note 16: Fair Value
97
Risk Management and Other
Note 17:15: Other Comprehensive Income (Loss)
98
Note 18:16: Derivative Financial Instruments
10099
Note 19:17: Retirement Benefit Plans
103101
Note 20:18: Employee Equity Incentive Plans
106104
Note 21:19: Commitments and Contingencies
108105
INDEX TO SUPPLEMENTAL DETAILS
Financial Information by QuarterKey Terms
111
Index to Supplemental Details
Controls and Procedures
112114
Exhibits and Financial Statement Schedules
113115
Form 10-K Cross-Reference Index
118120

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm
TO THE STOCKHOLDERS AND THE BOARD OF DIRECTORS OF INTEL CORPORATIONTo the Stockholders and the Board of Directors of Intel Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheetsConsolidated Balance Sheets of Intel Corporation (the Company) as of December 29, 201825, 2021 and December 30, 2017,26, 2020, the related consolidated statementsConsolidated Statements of income, comprehensive income, cash flowsIncome, Comprehensive Income, Cash Flows and stockholders' equityStockholders' Equity for each of the three years in the period ended December 29, 2018,25, 2021, and the related notes and Schedule II - Valuation and Qualifying Accounts (collectively referred to as the "consolidated financial statements""Consolidated Financial Statements"). In our opinion, the consolidated financial statementsConsolidated Financial Statements present fairly, in all material respects, the financial position of the Company at December 29, 201825, 2021 and December 30, 2017,26, 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 29, 2018,25, 2021, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’sCompany's internal control over financial reporting as of December 29, 2018,25, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 1, 2019January 26, 2022 expressed an unqualified opinion thereon.

Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the Consolidated Financial Statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Inventory Valuation
Description of the MatterThe Company's net inventory totaled $10.8 billion as of December 25, 2021, 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 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 saleable 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.

/s/ Ernst & Young LLP
We have served as the Company's auditor since 1968.

San Jose, California
February 1, 2019January 26, 2022


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm
TO THE STOCKHOLDERS AND THE BOARD OF DIRECTORS OF INTEL CORPORATIONTo the Stockholders and the Board of Directors of Intel Corporation
Opinion on Internal Control Over Financial Reporting
We have audited Intel Corporation’sCorporation's internal control over financial reporting as of December 29, 2018,25, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria). In our opinion, Intel Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 29, 2018,25, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2018 consolidated financial statements2021 Consolidated Financial Statements of the Company and our report dated February 1, 2019January 26, 2022 expressed an unqualified opinion thereon.

Basis for Opinion
The Company’sCompany's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting
A company‘scompany's internal control over financial reporting is a process designed 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. A company’scompany's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ Ernst & Young LLP

San Jose, California
February 1, 2019

January 26, 2022
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CONSOLIDATED STATEMENTS OF INCOMEConsolidated Statements of Income
Years Ended
(In Millions, Except Per Share Amounts)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		Years Ended (In Millions, Except Per Share Amounts)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Net revenue $70,848
 $62,761
 $59,387
Net revenue$79,024 $77,867 $71,965 
Cost of sales 27,111
 23,663
 23,154
Cost of sales35,209 34,255 29,825 
Gross margin 43,737
 39,098
 36,233
Gross margin43,815 43,612 42,140 
Research and development 13,543
 13,035
 12,685
Research and development15,190 13,556 13,362 
Marketing, general and administrative 6,750
 7,452
 8,377
Marketing, general and administrative6,543 6,180 6,350 
Restructuring and other charges (72) 384
 1,744
Restructuring and other charges2,626 198 393 
Amortization of acquisition-related intangibles 200
 177
 294
Operating expenses 20,421
 21,048
 23,100
Operating expenses24,359 19,934 20,105 
Operating income 23,316
 18,050
 13,133
Operating income19,456 23,678 22,035 
Gains (losses) on equity investments, net (125) 2,651
 506
Gains (losses) on equity investments, net2,729 1,904 1,539 
Interest and other, net 126
 (349) (703)Interest and other, net(482)(504)484 
Income before taxes 23,317
 20,352
 12,936
Income before taxes21,703 25,078 24,058 
Provision for taxes 2,264
 10,751
 2,620
Provision for taxes1,835 4,179 3,010 
Net income $21,053
 $9,601
 $10,316
Net income$19,868 $20,899 $21,048 
Earnings per share - Basic $4.57
 $2.04
 $2.18
Earnings per share - Diluted $4.48
 $1.99
 $2.12
Earnings per share—basicEarnings per share—basic$4.89 $4.98 $4.77 
Earnings per share—dilutedEarnings per share—diluted$4.86 $4.94 $4.71 
Weighted average shares of common stock outstanding:      Weighted average shares of common stock outstanding:
Basic 4,611
 4,701
 4,730
Basic4,059 4,199 4,417 
Diluted 4,701
 4,835
 4,875
Diluted4,090 4,232 4,473 
See accompanying notes.


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Consolidated Statements of Comprehensive Income
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Net income$19,868 $20,899 $21,048 
Changes in other comprehensive income, net of tax:
Net unrealized holding gains (losses) on derivatives(520)677 177 
Actuarial valuation and other pension benefits (expenses), net451 (183)(564)
Translation adjustments and other(60)35 81 
Other comprehensive income (loss)(129)529 (306)
Total comprehensive income$19,739 $21,428 $20,742 
See accompanying notes.
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Consolidated Balance Sheets
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Net income $21,053
 $9,601
 $10,316
Changes in other comprehensive income, net of tax:
      
Net unrealized holding gains (losses) on available-for-sale equity investments —
 (434) 415
Net unrealized holding gains (losses) on derivatives (253) 365
 7
Actuarial valuation and other pension benefits (expenses), net 210
 317
 (364)
Translation adjustments and other (3) 508
 (12)
Other comprehensive income (loss) (46) 756
 46
Total comprehensive income $21,007
 $10,357
 $10,362
(In Millions, Except Par Value)Dec 25, 2021Dec 26, 2020
Assets
Current assets:
Cash and cash equivalents$4,827 $5,865 
Short-term investments2,103 2,292 
Trading assets21,483 15,738 
Accounts receivable, net of allowance for doubtful accounts9,457 6,782 
Inventories10,776 8,427 
Assets held for sale6,942 5,400 
Other current assets2,130 2,745 
Total current assets57,718 47,249 
Property, plant and equipment, net63,245 56,584 
Equity investments6,298 5,152 
Other long-term investments840 2,192 
Goodwill26,963 26,971 
Identified intangible assets, net7,270 9,026 
Other long-term assets6,072 5,917 
Total assets$168,406 $153,091 
Liabilities and stockholders' equity
Current liabilities:
Short-term debt$4,591 $2,504 
Accounts payable5,747 5,581 
Accrued compensation and benefits4,535 3,999 
Other accrued liabilities12,589 12,670 
Total current liabilities27,462 24,754 
Debt33,510 33,897 
Contract liabilities185 1,367 
Income taxes payable4,305 4,578 
Deferred income taxes2,667 3,843 
Other long-term liabilities4,886 3,614 
Commitments and Contingencies (Note 19)00
Stockholders' equity:
Preferred stock, $0.001 par value, 50 shares authorized; none issued— — 
Common stock, $0.001 par value, 10,000 shares authorized; 4,070 shares issued and outstanding (4,062 issued and outstanding in 2020) and capital in excess of par value28,006 25,556 
Accumulated other comprehensive income (loss)(880)(751)
Retained earnings68,265 56,233 
Total stockholders' equity95,391 81,038 
Total liabilities and stockholders' equity$168,406 $153,091 
See accompanying notes.

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CONSOLIDATED BALANCE SHEETSConsolidated Statements of Cash Flows

(In Millions, Except Par Value)		 Dec 29,
2018		 Dec 30,
2017
Assets    
Current assets:    
Cash and cash equivalents $3,019
 $3,433
Short-term investments 2,788
 1,814
Trading assets 5,843
 8,755
Accounts receivable, net of allowance for doubtful accounts of $33 ($25 in 2017) 6,722
 5,607
Inventories 7,253
 6,983
Other current assets 3,162
 2,908
Total current assets 28,787
 29,500
     
Property, plant and equipment, net 48,976
 41,109
Equity investments 6,042
 8,579
Other long-term investments 3,388
 3,712
Goodwill 24,513
 24,389
Identified intangible assets, net 11,836
 12,745
Other long-term assets 4,421
 3,215
Total assets $127,963
 $123,249
     
Liabilities, temporary equity, and stockholders’ equity    
Current liabilities:    
Short-term debt $1,261
 $1,776
Accounts payable 3,824
 2,928
Accrued compensation and benefits 3,622
 3,526
Deferred income —
 1,656
Other accrued liabilities 7,919
 7,535
Total current liabilities 16,626
 17,421
     
Debt 25,098
 25,037
Contract liabilities 2,049
 —
Income taxes payable, non-current 4,897
 4,069
Deferred income taxes 1,665
 3,046
Other long-term liabilities 2,646
 3,791
Commitments and Contingencies (Note 21) 
 
Temporary equity 419
 866
Stockholders’ equity:    
Preferred stock, $0.001 par value, 50 shares authorized; none issued —
 —
Common stock, $0.001 par value, 10,000 shares authorized; 4,516 shares issued and outstanding (4,687 issued and outstanding in 2017) and capital in excess of par value 25,365
 26,074
Accumulated other comprehensive income (loss) (974) 862
Retained earnings 50,172
 42,083
Total stockholders’ equity 74,563
 69,019
Total liabilities, temporary equity, and stockholders’ equity $127,963
 $123,249
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Cash and cash equivalents, beginning of period$5,865 $4,194 $3,019 
Cash flows provided by (used for) operating activities:
Net income19,868 20,899 21,048 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation9,953 10,482 9,204 
Share-based compensation2,036 1,854 1,705 
Restructuring and other charges2,626 198 393 
Amortization of intangibles1,839 1,757 1,622 
(Gains) losses on equity investments, net(1,458)(1,757)(892)
Changes in assets and liabilities:
Accounts receivable(2,674)883 (935)
Inventories(2,339)(687)(1,481)
Accounts payable1,190 405 696 
Accrued compensation and benefits515 348 (260)
Prepaid customer supply agreements(1,583)(181)(782)
Income taxes(441)1,620 885 
Other assets and liabilities459 (437)1,942 
Total adjustments10,123 14,485 12,097 
Net cash provided by operating activities29,991 35,384 33,145 
Cash flows provided by (used for) investing activities:
Additions to property, plant and equipment(18,733)(14,259)(16,213)
Additions to held for sale NAND property, plant and equipment(1,596)(194)— 
Acquisitions, net of cash acquired(209)(837)(1,958)
Purchases of available-for-sale debt investments(5,051)(6,862)(2,268)
Maturities and sales of available-for-sale debt investments6,467 6,781 4,226 
Purchases of trading assets(35,503)(22,377)(9,162)
Maturities and sales of trading assets28,832 15,377 7,178 
Purchases of equity investments(613)(720)(522)
Sales of equity investments581 910 2,688 
Other investing658 1,385 1,626 
Net cash used for investing activities(25,167)(20,796)(14,405)
Cash flows provided by (used for) financing activities:
Issuance of term debt, net of issuance costs4,974 10,247 3,392 
Repayment of term debt and debt conversions(2,500)(4,525)(2,627)
Proceeds from sales of common stock through employee equity incentive plans1,020 897 750 
Repurchase of common stock(2,415)(14,229)(13,576)
Payment of dividends to stockholders(5,644)(5,568)(5,576)
Other financing(1,297)261 72 
Net cash provided by (used for) financing activities(5,862)(12,917)(17,565)
Net increase (decrease) in cash and cash equivalents(1,038)1,671 1,175 
Cash and cash equivalents, end of period$4,827 $5,865 $4,194 
Supplemental disclosures:
Acquisition of property, plant and equipment included in accounts payable and accrued liabilities1,619 $2,973 $1,761 
Cash paid during the year for:
Interest, net of capitalized interest545 $594 $469 
Income taxes, net of refunds2,263 $2,436 $2,110 
See accompanying notes.

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CONSOLIDATED STATEMENTS OF CASH FLOWSConsolidated Statements of Stockholders' Equity
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Cash and cash equivalents, beginning of period $3,433
 $5,560
 $15,308
Cash flows provided by (used for) operating activities:      
Net income 21,053
 9,601
 10,316
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation 7,520
 6,752
 6,266
Share-based compensation 1,546
 1,358
 1,444
Amortization of intangibles 1,565
 1,377
 1,524
(Gains) losses on equity investments, net 155
 (2,583) (432)
Loss on debt conversion and extinguishment 260
 476
 —
(Gains) losses on divestitures (497) (387) —
Deferred taxes (1,749) 1,548
 257
Changes in assets and liabilities:      
Accounts receivable (1,714) (781) 65
Inventories (214) (1,300) 119
Accounts payable 211
 191
 182
Accrued compensation and benefits (260) 311
 291
Customer deposits and prepaid supply agreements 1,367
 1,105
 —
Income taxes payable and receivable 148
 5,230
 1,382
Other assets and liabilities 41
 (788) 394
Total adjustments 8,379
 12,509
 11,492
Net cash provided by operating activities 29,432
 22,110
 21,808
Cash flows provided by (used for) investing activities:      
Additions to property, plant and equipment (15,181) (11,778) (9,625)
Acquisitions, net of cash acquired (190) (14,499) (15,470)
Purchases of available-for-sale debt investments (3,843) (2,746) (9,269)
Sales of available-for-sale debt investments 195
 1,833
 2,847
Maturities of available-for-sale debt investments 2,968
 3,687
 5,654
Purchases of trading assets (9,503) (13,700) (12,237)
Maturities and sales of trading assets 12,111
 13,970
 10,898
Purchases of equity investments (874) (1,619) (963)
Sales of equity investments 2,802
 5,236
 1,080
Proceeds from divestitures 548
 3,124
 —
Other investing (272) 730
 1,268
Net cash used for investing activities (11,239) (15,762) (25,817)
Cash flows provided by (used for) financing activities:      
Increase (decrease) in short-term debt, net 460
 12
 (15)
Issuance of long-term debt, net of issuance costs 423
 7,716
 2,734
Repayment of debt and debt conversion (3,026) (8,080) (1,500)
Proceeds from sales of common stock through employee equity incentive plans 555
 770
 1,108
Repurchase of common stock (10,730) (3,615) (2,587)
Payment of dividends to stockholders (5,541) (5,072) (4,925)
Other financing (748) (206) (554)
Net cash provided by (used for) financing activities (18,607) (8,475) (5,739)
Net increase (decrease) in cash and cash equivalents (414) (2,127) (9,748)
Cash and cash equivalents, end of period $3,019
 $3,433
 $5,560
Supplemental disclosures: 
    
Acquisition of property, plant and equipment included in accounts payable and accrued liabilities $2,340
 $1,417
 $979
Non-marketable equity investment in McAfee from divestiture $—
 $1,078
 $—
Cash paid during the year for:      
Interest, net of capitalized interest $448
 $624
 $682
Income taxes, net of refunds $3,813
 $3,824
 $877
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 29, 20184,516 $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 income20,742 
Employee equity incentive plans and other55 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, 20194,290 25,261 (1,280)53,523 77,504 
Components of comprehensive income, net of tax:
Net income— — —20,899 20,899 
Other comprehensive income (loss)— —529 —529 
Total comprehensive income21,428 
Employee equity incentive plans and other55 1,018  —— 1,018 
Share-based compensation— 1,854  ——1,854 
Temporary equity reduction— 155 — —155 
Convertible debt— (750) ——(750)
Repurchase of common stock(275)(1,628) —(12,481)(14,109)
Restricted stock unit withholdings(8)(354) —(140)(494)
Cash dividends declared ($1.32 per share of common stock)— — —(5,568)(5,568)
Balance as of December 26, 20204,062 25,556 (751)56,233 81,038 
Adjustment to opening balance for change in accounting principle35 35 
Opening balance as of December 27, 20204,062 25,556 (751)56,268 81,073 
Components of comprehensive income, net of tax:
Net income— ——19,868 19,868 
Other comprehensive income (loss)— —(129)—(129)
Total comprehensive income19,739 
Employee equity incentive plans and other54 1,022 —— 1,022 
Share-based compensation— 2,036 ——2,036 
Temporary equity reduction— — ——— 
Convertible debt— — ——— 
Repurchase of common stock(40)(249)—(2,166)(2,415)
Restricted stock unit withholdings(6)(359)—(61)(420)
Cash dividends declared ($1.39 per share of common stock)— ——(5,644)(5,644)
Balance as of December 25, 20214,070 $28,006 $(880)$68,265 $95,391 
See accompanying notes.

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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 26, 2015 4,725
 $23,411
 $60
 $37,614
 $61,085
Components of comprehensive income, net of tax:          
Net income —
 —
 —
 10,316
 10,316
Other comprehensive income (loss) —
 —
 46
 —
 46
Total comprehensive income         10,362
Proceeds from sales of common stock through employee equity incentive plans, net tax benefit, and other 101
 1,322
 —
 —
 1,322
Share-based compensation —
 1,438
 —
 —
 1,438
Repurchase of common stock (81) (412) —
 (2,180) (2,592)
Restricted stock unit withholdings (15) (386) —
 (78) (464)
Cash dividends declared ($1.04 per share of common stock) —
 —
 —
 (4,925) (4,925)
Balance as of December 31, 2016 4,730
 25,373
 106
 40,747
 66,226
Components of comprehensive income, net of tax:          
Net income —
 —
 —
 9,601
 9,601
Other comprehensive income (loss) —
 —
 756
 —
 756
Total comprehensive income         10,357
Proceeds from sales of common stock through employee equity incentive plans, net excess tax benefit, and other 1
 70
 1,172
 —
 (1) 1,171
Share-based compensation —
 1,296
 —
 —
 1,296
Convertible debt —
 (894) —
 —
 (894)
Repurchase of common stock (101) (552) —
 (3,057) (3,609)
Restricted stock unit withholdings (12) (321) —
 (135) (456)
Cash dividends declared ($1.0775 per share of common stock) —
 —
 —
 (5,072) (5,072)
Balance as of December 30, 2017 4,687
 26,074
 862
 42,083
 69,019
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
Proceeds from sales of common stock through employee equity incentive plans, net excess tax benefit, 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
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.
See accompanying notes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
Note 1 :BASIS OF PRESENTATIONBasis of Presentation
We have a 52- or 53-week fiscal year that ends on the last Saturday in December. Fiscal years 20182021, 2020, and 20172019 were 52-week fiscal years. Fiscal year 2016 wasyears; 2022is a 53-week year with the first quarter of 2016 being a 14-week quarter.fiscal year. Our consolidated financial statementsConsolidated Financial Statements include the accounts of Intel Corporation (Intel) and our subsidiaries. We have eliminated intercompany accounts and transactions. We have reclassified certain prior period amounts to conform to current period presentation.
USE OF ESTIMATESUse of Estimates
The preparation of consolidated financial statementsConsolidated Financial Statements in conformity with U.S. generally accepted accounting principles (GAAP)US GAAP requires us to make estimates and judgments that affect the amounts reported in our consolidated financial statementsConsolidated Financial Statements and the accompanying notes. The actual results that we experience may differ materially from our estimates.
NOTENote 2 :ACCOUNTING POLICIESAccounting Policies
REVENUE RECOGNITIONRevenue Recognition
We recognize net product revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. Substantially all of our revenue is derived from product sales. In accordance with contract terms, revenue for product sales is recognized at the time of product shipment from our facilities or delivery to the customer location, as determined by the agreed upon shipping terms. Prior to 2018, on sales made to distributors that allowed for price protections or right of return until the distributor sold through the merchandise, we deferred product revenue and related costs of sales. We include shipping charges billed to customers in net revenue, and include the related shipping costs in cost of sales.
We measure revenue based on the amount of consideration we expect to be entitled to in exchange for products or services. Variable consideration is estimated and reflected as an adjustment to the transaction price. We determine variable consideration, which consists primarily of various sales price concessions, by estimating the most likely amount of consideration we expect to receive from the customer based on historical analysis of customer purchase volumes. Sales rebates earned by customers are offset against their receivable balances. Rebates earned by customers when they do not have outstanding receivable balances are recorded within other accrued liabilities. The impacts of distributor sales price reductions resulting from price protection agreements are also estimated based on historical analysis of such activity and are reflected as a reduction in net revenue.
We make payments to our customers through cooperative advertising programs for marketing activities for certainsome of our products. We generally record the payment as a reduction in revenue in the period that the revenue is earned, unless the payment is for a distinct service, which we record as expense when the marketing activities occur. During the second half of 2017, we transitioned customers from previous offerings under the Intel Inside® program to cooperative advertising offerings more tailored to customers and their marketing audiences. These cooperative advertising costs are recorded as a reduction of revenue beginning in the second half of 2017, as we no longer meet the criteria for recording these as expense.
INVENTORIESInventories
We compute inventory cost on a first-in, first-out basis. Our process and product development life cycle corresponds with substantive engineering milestones. These engineering milestones are regularly and consistently applied in assessing the point at which our activities and associated costs change in nature from research and development (R&D)R&D to cost of sales, and when cost of sales can be capitalized as inventory.
For a product to be manufactured in high volumes and sold to our customers under our standard warranty, it must meet our rigorous technical quality specifications. This milestone is known as product release qualification (PRQ).PRQ. We have identified PRQ as the point at which the costs incurred to manufacture our products are included in the valuation of inventory. A single PRQ has previously valued inventory up to $870 million in the quarter the PRQ milestone was achieved. Prior to PRQ, costs that do not meet the criteria for R&D are included in cost of sales in the period incurred. If the point at which we estimate that inventory meets PRQ criteria changes in the future, the timing and recognition of costs would shift between R&D, inventory, and costs of sales. A single PRQ has previously ranged up to $770 million and is dependent on product type.
The valuation of inventory includes determining which fixed production overhead costs can be included in inventory based on the normal capacity of our manufacturing and assembly and test facilities. We apply our historical loadings compared to our total available capacity in a statistical model to determine our normal capacity level. If the factory loadings are below the established normal capacity level, a portion of our fixed production overhead costs would not be included in the cost of inventory; instead, it would be recognized as cost of sales in that period. We refer to these costs as excess capacity charges. Excess capacity charges are insignificant in the years presented. Charges in certainyears prior yearsto those presented have ranged from $46 millionup to $1.1 billion. The high end of the range would be $540 million when excluding the $1.1 billion charge taken in connection with the 2009 economic recession.

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Inventory is valued at the lower of cost or net realizable value, based upon assumptions about future demand and market conditions. Product-specific facts and circumstances reviewed in the inventory valuation process include a review of our customer base, the stage of the product life cycle, variations in market pricing, and an assessment of selling price in relation to product cost. InventoryLower of cost or net realizable value inventory reserves increasedfluctuate as we ramp new process technologies, with costs improving over time due to scale and improved yields. Additionally, inventory valuation is impacted by approximately $295 millioncyclical changes in 2018 compared to 2017.market conditions and the associated pricing environment.
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The valuation of inventory also requires us to estimate obsolete and excess inventory, as well as inventory that is not of saleable quality. We use the demand forecast to develop our short-term manufacturing plans to enable consistency between inventory valuations and build decisions. For certain new products, we have limited historical data when developing these demand forecasts. We compare the estimate of future demand to work in process and finished goods inventory levels to determine the amount, if any, of obsolete or excess inventory. IfWhen our demand forecast for specific products is greater than actual demand and we fail to reduce manufacturing output accordingly, we could be required to write off amounts considered to be excess inventory.
PROPERTY, PLANT AND EQUIPMENTProperty, Plant and Equipment
We compute depreciation using the straight-line method over the estimated useful life of assets. We also capitalize interest on borrowings related to eligible capital expenditures. Capitalized interest is added to the cost of qualified assets and depreciated together with that asset cost. We record capital-related government grants earned as a reduction to property, plant and equipment.
Annually, weWe evaluate the period over which we expect to recover the economic value of our property, plant and equipment, considering factors such as the process technology cadence between node transitions, changes in machinery and equipment technology, and re-use of machinery and tools across each generation of process technology. As we make manufacturing process conversions and other factory planning decisions, we use assumptions involving the use of management judgments regarding the remaining useful lives of assets, primarily process-specific semiconductor manufacturing tools and building improvements. When we determine that the useful lives of assets are shorter or longer than we had originally estimated, we adjust the rate of depreciation to reflect the assets’assets' revised useful lives.
Assets are “grouped”categorized and evaluated for impairment at the lowest level of identifiable cash flows. We assess property, plant and equipment for impairment when events or changes in circumstances indicate that the carrying value of the assets or the asset grouping may not be recoverable. Factors that we consider in deciding when to perform an impairment review include significant under-performance of a business or product line in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in our use and fungibility of the assets. We measure the recoverability of assets that we will continue to use in our operations by comparing the carrying value of the asset grouping to our estimate of the related total future undiscounted net cash flows arising from the use of that asset grouping. If an asset grouping carrying value is not recoverable through the related undiscounted cash flows, the asset grouping is considered to be impaired. We measure the impairment by comparing the difference between the asset grouping carrying value and its fair value.
We may have certain facilities, included within construction in progress, being held in a safe state and not currently in use that we plan to place into service at a future date. The time at which these assets are placed into service depends on our existing manufacturing capacity, market demand for our products, and where we are in the transition of products on our roadmap. Management makes judgments about the timing of when these facilities will be readied for their intended use and placed into service for the manufacturing of our products. Depreciation is not recognized on these assets and they are not eligible for capitalized interest when construction is on hold.
FAIR VALUEFair Value
When determining fair value, we consider the principal or most advantageous market in which we would transact, as well as assumptions that market participants would use when pricing the asset or liability. Our financial assets are measured and recorded at fair value on a recurring basis, except for equity securities measured using the measurement alternative, equity method investments, cost method loans receivable,and grants receivable, and reverse repurchase agreements with original maturities greater than three months.receivable. We assess fair value hierarchy levels for our issued debt and fixed-income investment portfolio based on the underlying instrument type.
The three levels of inputs that may be used to measure fair value are:
▪Level 1.1.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 curves, currency spot and forward rates, and credit ratings as significant inputs in our valuations. Level 2 inputs also include non-binding market consensus prices, as well as quoted prices that were adjusted for security-specific restrictions. When we use non-binding market consensus prices, we corroborate them with quoted market prices for similar instruments or compare them to output from internally developed pricing models such as discounted cash flow models.
▪Level 3.Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. We monitor and review the inputs and results of these valuation models to help ensure the fair value measurements are reasonable and consistent with market experience in similar asset classes. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data.

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DEBT INVESTMENTSDebt Investments
We consider all highly liquid debt investments with original maturities from the date of purchase of three months or less as cash equivalents. Cash equivalents can include investments such as corporate debt, financial institution instruments, government debt, and reverse repurchase agreements.
Marketable debt investments are generally designated as trading assets when a market risk is economically hedged at inception with a related derivative instrument, or when the marketable debt investment itself is used to economically hedge currency exchange rate risk from remeasurement. Investments designated as trading assets are reported at fair value. Gains or losses on these investments arising from changes in fair value due to interest rate and currency market fluctuations and credit market volatility, largely offset by losses or gains on the related derivative instruments and balance sheet remeasurement, are recorded in interest and other, net.
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Marketable debt investments are considered available-for-sale investments when the interest rate and foreign currency risks are not hedged at the inception of the investment or when our criteria for designation as trading assets are not met. Available-for-sale debt investments with original maturities of approximately three months or less from the date of purchase are classified within cash and cash equivalents. Available-for-sale debt investments with original maturities at the date of purchase greater than approximately three months and remaining maturities of less than one year are classified as short-term investments. Available-for-sale debt investments with remaining maturities beyond one year are classified as other long-term investments. Available-for-sale debt investments are reported at fair value, with unrealized gains or losses, net of tax, recorded in accumulated other comprehensive income (loss). We determine the cost of the investment sold based on an average cost basis at the individual security level, and record the interest income and realized gains or losses on the sale of these investments in interest and other, net.
Our available-for-sale debt investments are subject to periodic impairment reviews. For these investments in an unrealized loss position, we considerdetermine whether a credit loss exists by considering information about the collectability of the instrument, current market conditions, and reasonable and supportable forecasts of economic conditions. We recognize an allowance for credit losses, up to the amount of the unrealized loss when appropriate, and write down the amortized cost basis of the investment if it is more likely than not that we will be required or we intend to sell the investment before recovery of its amortized cost basis, or whether recovery of the entire amortized cost basis of the investment is unlikely because a credit loss exists. When we do not expect to recover the entire amortized cost basis of the investment, we separate other-than-temporary impairments into amounts representingbasis. Allowances for credit losses whichand write-downs are recognized in interest and other, net, and amountsunrealized losses not related to credit losses which are recognized in other comprehensive income (loss).
EQUITY INVESTMENTSEquity Investments
We regularly invest in equity securities of public and private companies to promote business and strategic objectives. Equity investments are measured and recorded as follows:
▪Marketable equity securities are equity securities with readily determinable fair value (RDFV)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 securitiesare 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 investmentsare 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.
Realized and unrealized gains and losses resulting from changes in fair value or the sale of our equity investments are recorded in gains (losses) on equity investments, net. Prior to 2018, we recorded unrealized gains and losses through other comprehensive income (loss) and realized gains and losses on the sale, exchange, or impairment of these equity investments through gains (losses) on equity investments, net. The carrying value of our non-marketable equity securities is adjusted for qualifying observable price changes resulting from the issuance of similar or identical securities in an orderly transaction by the same issuer. Determining whether an observed transaction is similar to a security within our portfolio requires judgment based on the rights and preferences of the securities. Recording upward and downward adjustments to the carrying value of our equity securities as a result of observable price changes requires quantitative assessments of the fair value of our securities using various valuation methodologies and involves the use of estimates.
Non-marketable equity securities and equity method investments (collectively referred to as non-marketable equity investments) are also subject to periodic impairment reviews. Our quarterly impairment analysis considers both qualitative and quantitative factors that may have a significant impact on the investee's fair value. Qualitative factors considered include the investee's financial condition and business outlook, industry and sector performance, market for technology, operational and financing cash flow activities, and other relevant events and factors affecting the investee. When indicators of impairment exist, we prepare quantitative assessments of the fair value of our non-marketable equity investments using both the market and income approaches, which require judgment and the use of estimates, including discount rates, investee revenue and costs, and comparable market data of private and public companies, among others.

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▪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 investmentsare 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.
Impairments of equity investments are recorded in gains (losses) on equity investments, net.
DERIVATIVE FINANCIAL INSTRUMENTS
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Derivative Financial Instruments
Our primary objective for holding derivative financial instruments is to manage currency exchange rate risk and interest rate risk, and, to a lesser extent, equity market risk, commodity price risk, and credit risk. We enter into master netting arrangements to mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty. A master netting arrangement allows counterparties to net settle amounts owed to each other as a result of multiple, separate derivative transactions. We also enter into collateral security arrangements with certain of our counterparties to exchange cash collateral when the net fair value of certain derivative instruments fluctuates from contractually established thresholds. We record the collateral within current other assets and long-term other assets with a corresponding liability. For presentation on our consolidated balance sheets,Consolidated Balance Sheets, we do not offset fair value amounts recognized for derivative instruments under master netting arrangements. Our derivative financial instruments, including related collateral amounts, are presented at fair value on a gross basis and are included in other current assets, other long-term assets, other accrued liabilities, or other long-term liabilities.
Cash flow hedges use foreign currency contracts, such as currency forwards and currency interest rate swaps, to hedge exposures for the following items:
variability in the U.S.-dollarUS-dollar equivalent of non-U.S.-dollar-denominatednon-US-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.spending.
The after-tax gains or losses from the effective portion of a cash flow hedge is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods in which the hedged transaction affects earnings, and in the same line item on the consolidated statementsConsolidated Statements of incomeIncome as the impact of the hedge transaction. For foreign currency contracts hedging our capital purchases, forward points are excluded from the hedge effectiveness assessment. Ineffective portions of cash flow hedges, as well as amounts excluded from the hedge effectiveness assessment, and are recognized in earnings in interest and other, net.the same income statement line item used to present the earnings effect of the hedged item. If the cash flow hedge transactions become probable not to occur,improbable, the corresponding amounts deferred in accumulated other comprehensive income (loss) would be immediately reclassified to interest and other, net. These derivatives are classified in the consolidated statementsConsolidated Statements of cash flowsCash Flows in the same section as the underlying item.
Fair value hedges use interest rate contracts, such as interest rate swaps, to hedge against changes in the fair value on certain of our fixed-rate indebtedness attributable to changes in the benchmark interest rate. The gains or losses on these hedges, as well as the offsetting losses or gains related to the changes in the fair value of the underlying hedged item attributable to the hedged risk, are recognized in earnings in the current period, primarily in interest and other, net. These derivatives are classified in the consolidated statementsConsolidated Statements of cash flowsCash Flows in the same section as the underlying item, primarily within cash flows from financing activities.
Non-designated hedges use foreign currency contracts to economically hedge the functional currency equivalent cash flows of recognized monetary assets and liabilities, non-U.S.-dollar-denominatednon-US-dollar-denominated debt instruments classified as trading assets, and non-U.S.-dollar-denominatednon-US-dollar-denominated loans receivablesreceivable recognized at fair value. We also use interest rate contracts to hedge interest rate risk related to our U.S.-dollar-denominatedUS-dollar-denominated fixed-rate debt instrumentsinvestments classified as trading assets.
The change in fair value of these derivatives is recorded through earnings in the line item on the consolidated statementsConsolidated Statements of incomeIncome to which the derivatives most closely relate, primarily in interest and other, net. Changes in the fair value of the underlying assets and liabilities associated with the hedged risk are generally offset by the changes in the fair value of the related derivatives.
LOANS RECEIVABLELoans Receivable
We elect the fair value option when the interest rate or foreign currency exchange rate risk is economically hedged at the inception of the loan with a related derivative instrument. When the fair value option is not elected, the loans are carried at amortized cost. We measure interest income for all loans receivable using the interest method, which is based on the effective yield of the loans rather than the stated coupon rate. We classify our loans within other current and long-term assets.

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CREDIT RISKCredit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist principally of investments in debt instruments, derivative financial instruments, loans receivable, reverse repurchase agreements, and trade receivables. We enter into master netting arrangements to mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty.
We generally place investments with high-credit-quality counterparties and, by policy, we limit the amount of credit exposure to any one counterparty based on our analysis of that counterparty’scounterparty's relative credit standing. As required per our investment policy, substantially all of our investments in debt instruments and financing receivables are in investment-grade instruments. Credit-rating criteria for derivative instruments are similar to those for other investments.
We enter into master netting arrangements to mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty. Due to master netting arrangements, the amounts subject to credit risk related to derivative instruments are generally limited to the amounts, if any, by which the counterparty’scounterparty's obligations exceed our obligations with that counterparty. As of December 29, 2018,25, 2021, our total credit exposure to any single counterparty, excluding money market funds invested in U.S.US treasury and U.S.US agency securities and reverse repurchase agreements collateralized by treasury and agency securities, did not exceed $750 million.$2.6 billion. To further reduce credit risk, we enter into collateral security arrangements with certain of our derivative counterparties and obtain and secure available collateral from counterparties against obligations, including securities lending transactions when we deem it appropriate. Cash collateral exchanged under our collateral security arrangements are included in other current assets, other long-term assets, other accrued liabilities, or other long-term liabilities. For reverse repurchase agreements collateralized by other securities, we do not record the collateral as an asset or a liability unless the collateral is repledged.
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A substantial majorityof our trade receivables are derived from sales to original equipment manufacturers (OEMs)OEMs and original design manufacturers (ODMs).ODMs. We also have accounts receivable derived from sales to industrial and communications equipment manufacturers in the computing and communications industries. We believe that the net accounts receivable balances from our three largest customers (45%(42% as of December 29, 2018)25, 2021) do not represent a significant credit risk, based on cash flow forecasts, balance sheet analysis, and past collection experience. For more information about the customers that represent our accounts receivable balance, see "Note 4: Operating Segments."
We have adopted credit policies and standards intended to accommodate industry growth and inherent risk. We believe that credit risks are moderated by the financial stability of our major customers. We assess credit risk through quantitative and qualitative analysis. From this analysis, we establish shipping and credit limits, and determine whether we will seek to use one or more credit support protection devices, such as obtaining a parent guarantee, standby letter of credit, or credit insurance.
BUSINESS COMBINATIONSBusiness Combinations
We allocate the purchase price paid for assets acquired and liabilities assumed in connection with our acquisitions based on their estimated fair values at the time of acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our financial statements. The most subjective areas include determining the fair value of the following:
▪inventory; property, plant and equipment; pre-existing liabilities or legal claims; and contingent consideration, each as may be applicable;
▪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; and
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.
Our assumptions and estimates are based upon comparable market data and information obtained from our management and the management of the acquired companies. We allocate goodwill to the reporting units of the business that are expected to benefit from the business combination.
GOODWILLGoodwill
We perform an annual impairment assessment of goodwill at the reporting unit level in the fourth quarter of each year, or more frequently if indicators of potential impairment exist. The analysis may include both qualitative and quantitative factors to assess the likelihood of an impairment. The reporting unit’sunit's carrying value used in an impairment test represents the assignment of various assets and liabilities, excluding certain corporate assets and liabilities, such as cash, investments, and debt.
Qualitative factors include industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit. Additionally, as part of this assessment, we may perform a quantitative analysis to support the qualitative factors above by applying sensitivities to assumptions and inputs used in measuring a reporting unit’sunit's fair value.
Our quantitative impairment test considers both the income approach and the market approach to estimate a reporting unit’sunit's fair value. Significant estimates include market segment growth rates, our assumed market segment share, estimated costs,gross margins, operating expenses, and discount rates based on a reporting unit's weighted average cost of capital.
We test the reasonableness of the inputs and outcomes of our discounted cash flow analysis against available market data. In the current year, the fair value for all of our reporting units substantially exceeds their carrying value, and our annual qualitative assessment did not indicate that a more detailed quantitative analysis was necessary.

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IDENTIFIED INTANGIBLE ASSETSIdentified Intangible Assets
We amortize acquisition-related intangible assets that are subject to amortization over their estimated useful life. Acquisition-related in-process R&D assets represent the fair value of incomplete R&D projects that had not reached technological feasibility as of the date of acquisition; initially, these are classified as in-process R&D and are not subject to amortization. Once these R&D projects are completed, the asset balances are transferred from in-process R&D to acquisition-related developed technology and are subject to amortization from thisthat point forward. The asset balances relating to projects that are abandoned after acquisition are impaired and expensed to R&D.
We perform a quarterly review of significant finite-lived identified intangible assets to determine whether facts and circumstances indicate that the carrying amount may not be recoverable. These reviews can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our forecasts for specific product lines.
EMPLOYEE EQUITY INCENTIVE PLANSEmployee Equity Incentive Plans
We use the straight-line amortization method to recognize share-based compensation expense over the service period of the award, net of estimated forfeitures. Upon exercise, cancellation, forfeiture, or expiration of stock options, or upon vesting or forfeiture of restricted stock units (RSUs),RSUs, we eliminate deferred tax assets for options and RSUs with multiple vesting dates for each vesting period on a first-in, first-out basis as if each vesting period were a separate award.
INCOME TAXES
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For the majority of RSUs granted, the number of shares of common stock issued on the date the RSUs vest is net of the minimum statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. The obligation to pay the relevant taxing authority is contingent upon continued employment. In addition, the amount of the obligation is unknown, as it is based in part on the market price of our common stock when the awards vest.
Income Taxes
We compute the provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. We measure deferred tax assets and liabilities using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled.
We assess the likelihood that we will be able to recover our deferred tax assets. If recovery is not likely, we must increase our provision for taxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable. We believe that we will ultimately recover the deferred tax assets recorded on our consolidated balance sheets.Consolidated Balance Sheets. Recovery of a portion of our deferred tax assets is affected by management’smanagement's plans with respect to holding or disposing of certain investments; therefore, such changes could also affect our future provision for taxes.
We recognize tax benefits from uncertain tax positions only if (based on the technical merits of the position) it is more likely than not that the tax positions will be sustained on examination by the tax authority. The tax benefits recognized in the financial statements from such positions are measured based on the largest amount that is more than 50% likely to be realized upon ultimate settlement. We recognize interest and penalties related to unrecognized tax benefits within the provision for taxes on the consolidated statementsConsolidated Statements of income.
We have completed the accounting associated with the December 22, 2017 enactment of the U.S. Tax Cuts and Jobs Act (Tax Reform). The U.S. Securities and Exchange Commission (SEC) had provided accounting and reporting guidance that allowed us to report provisional amounts within a measurement period up to one year from the enactment date. Complexities inherent in adopting the changes included additional guidance, interpretations of the law, and further analysis of data and tax positions. During 2018, as part of completing our accounting, we recognized approximately $300 million reduction to our one-time net tax charge related to the transition tax and the remeasurement of deferred income taxes. For more information about Tax Reform impacts, see “Note 9: Income Taxes.”

Income.
We recognize the tax impact of including certain foreign earnings in U.S.US taxable income as a period cost. We have recognized deferred income taxes for local country income and withholding taxes that could be incurred on distributions of certain non-U.S.non-US earnings or for outside basis differences in our subsidiaries, because we do not plan to indefinitely reinvest such earnings and basis differences. Remittances of non-U.S.non-US earnings are based on estimates and judgments of projected cash flow needs, as well as the working capital and investment requirements of our non-U.S.non-US and U.S.US operations. Material changes in our estimates of cash, working capital, and investment needs in various jurisdictions could require repatriation of indefinitely reinvested non-U.S.non-US earnings, which could be subject to applicable non-U.S.non-US income and withholding taxes.
LOSS CONTINGENCIESLeases
Leases consist of real property and machinery and equipment. Our lease terms may include options to extend when it is reasonably certain that we will exercise that option. We have lease agreements with lease and non-lease components, and the non-lease components are accounted for separately and not included in our leased assets and corresponding liabilities. Payments on leases may be fixed or variable, and variable lease payments are based on output of the underlying leased assets.
Loss Contingencies
We are subject to loss contingencies, including various legal and regulatory proceedings, asserted and potential claims, liabilities related to repair or replacement of parts in connection with product defects, as well as product warranties and potential asset impairments that arise in the ordinary course of business. An estimated loss from such contingencies is recognized as a charge to income if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We evaluate developments that could affect the amount of liability that has been previously accrued and reasonably possible losses disclosed, and make adjustments as appropriate. Significant judgment is required to determine both likelihood of there being, and the estimated amount of, a loss related to such matters.


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NOTENote 3 :RECENT ACCOUNTING STANDARDS
ACCOUNTING STANDARDS ADOPTED
Retirement Benefits - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
Standard/Description:This amended standard was issued to provide additional guidance on the presentation of net periodic benefit cost in the income statement and on the components eligible for capitalization in assets. In accordance with the revised standard, we have separated the different components of net periodic benefit cost, presenting service cost components within operating income and other non-service components separately outside of operating income on the income statement. In addition, only service costs are now eligible for inventory capitalization.
Effective Date and Adoption Considerations:Effective in the first quarter of 2018. Changes to the presentation of benefit costs were required to be adopted retrospectively, while changes to the capitalization of service costs into inventories were required to be adopted prospectively. The standard permits, as a practical expedient, use of the amounts disclosed in the Retirement Benefit Plans footnote for the prior comparative periods as the estimation basis for applying the retrospective presentation requirement.
Effect on Financial Statements or Other Significant Matters:Adoption of the amended standard resulted in the reclassification of non-service net periodic benefit costs from line items within operating income to interest and other, net, of approximately $114 million for the year ended December 30, 2017 ($259 million for the year ended December 31, 2016).
Revenue Recognition - Contracts with Customers
Standard/Description:This standard was issued to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by all companies. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.
Effective Date and Adoption Considerations:Effective in the first quarter of 2018. This standard was adopted using a modified retrospective approach through a cumulative adjustment to retained earnings for the fiscal year beginning December 31, 2017.
Effect on Financial Statements or Other Significant Matters:Our adoption assessments identified a change in revenue recognition timing on our component sales made to distributors. Under the new standard, we now recognize revenue when we deliver to the distributor rather than deferring recognition until the distributor sells the components.
On the date of initial application, we removed the deferred income and related receivables on component sales made to distributors through a cumulative adjustment to retained earnings. The revenue deferral that was historically recognized in the following period is expected to be primarily offset by the acceleration of revenue recognition in the current period as control of the product transfers to our customer.
Our assessment also identified a change in expense recognition timing related to payments we make to our customers for distinct services they perform as part of cooperative advertising programs, which were previously recorded as operating expenses. We now recognize the expense for cooperative advertising in the period the marketing activities occur. Previously we recognized the expense in the period the customer was entitled to participate in the program, which coincided with the period of sale. On the date of initial adoption, we capitalized the expense of cooperative advertising not performed through a cumulative adjustment to retained earnings.
We have completed our adoption and implemented policies, processes, and controls to support the standard's measurement and disclosure requirements. Refer to the tables below, which summarize the impacts of the changes discussed above to our financial statements recorded as an adjustment to opening balances for the fiscal year beginning December 31, 2017, and also provide comparative reporting of the impacts of adopting the standard.
Financial Instruments - Recognition and Measurement
Standard/Description:Requires changes to the accounting for financial instruments that primarily affect equity securities, financial liabilities measured using the fair value option, and the presentation and disclosure requirements for such instruments.
Effective Date and Adoption Considerations:Effective in the first quarter of 2018. Changes to our marketable equity securities were required to be adopted using a modified retrospective approach through a cumulative effect adjustment to retained earnings for the fiscal year beginning December 31, 2017. Since management has elected to apply the measurement alternative to non-marketable equity securities, changes to these securities were adopted prospectively.

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Effect on Financial Statements or Other Significant Matters:Marketable equity securities previously classified as available-for-sale equity investments are now measured and recorded at fair value with changes in fair value recorded through the income statement.
All non-marketable equity securities formerly classified as cost method investments are measured and recorded using the measurement alternative. Equity securities measured and recorded using the measurement alternative are recorded at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. Adjustments resulting from impairments and qualifying observable price changes are recorded in the income statement.
Beginning in the first quarter of 2018, in accordance with the standard, recurring fair value disclosures are no longer provided for equity securities measured using the measurement alternative. In addition, the previous impairment model has been replaced with a simplified qualitative impairment model. No initial adoption adjustment was recorded for these instruments since the standard was required to be applied prospectively for securities measured using the measurement alternative.
We have completed our adoption and implemented policies, processes, and controls to support the standard's measurement and disclosure requirements. Refer to the table below, which summarizes impacts, net of tax, of the changes discussed above to our financial statements. This reflects an adjustment to opening balances for the fiscal year beginning December 31, 2017.
Opening Balance Adjustments
The following table summarizes the effects of adopting Revenue Recognition - Contracts with Customers and Financial Instruments - Recognition and Measurement on our financial statements for the fiscal year beginning December 31, 2017 as an adjustment to the opening balance:
    Adjustments from    

(In Millions)
 Balance as of Dec 30, 2017 Revenue Standard Financial Instruments Update 
Other1
 Opening Balance as of Dec 31, 2017
Assets:          
Accounts receivable, net $5,607
 $(530) $—
 $—
 $5,077
Inventories $6,983
 $47
 $—
 $—
 $7,030
Other current assets $2,908
 $64
 $—
 $(8) $2,964
Equity investments $—
 $—
 $8,579
 $—
 $8,579
Marketable equity securities $4,192
 $—
 $(4,192) $—
 $—
Other long-term assets $7,602
 $—
 $(4,387) $(43) $3,172
           
Liabilities:          
Deferred income $1,656
 $(1,356) $—
 $—
 $300
Other accrued liabilities $7,535
 $81
 $—
 $—
 $7,616
Long-term deferred tax liabilities $3,046
 $191
 $—
 $(20) $3,217
           
Stockholders' equity:          
Accumulated other comprehensive income (loss) $862
 $—
 $(1,745) $(45) $(928)
Retained earnings $42,083
 $665
 $1,745
 $14
 $44,507
1
Includes adjustments from the adoption of "Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory" and "Income Statement—Reporting Comprehensive Income - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income."

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The following table summarizes the impacts of adopting the new revenue standard on our consolidated statements of income and balance sheets:
  For the fiscal year ended December 29, 2018
(In Millions) As reported Adjustments Without new revenue standard
       
Net revenue $70,848
 $(616) $70,232
Cost of sales 27,111
 (206) 26,905
Gross margin 43,737
 (410) 43,327
Marketing, general and administrative 6,750
 (70) 6,680
Operating income 23,316
 (340) 22,976
Income before taxes 23,317
 (340) 22,977
Provision for taxes 2,264
 (64) 2,200
Net income $21,053
 $(276) $20,777
       
       
Assets:      
Accounts receivable $6,722
 $216
 $6,938
Inventories $7,253
 $62
 $7,315
Other current assets $3,162
 $4
 $3,166
       
Liabilities:      
Deferred income $—
 $1,846
 $1,846
Other accrued liabilities $7,919
 $(514) $7,405
Deferred income taxes $1,665
 $(109) $1,556
       
Equity:      
Retained earnings $50,172
 $(941) $49,231
ACCOUNTING STANDARDS NOT YET ADOPTED
Leases
Standard/Description:This new lease accounting standard requires that we recognize operating leased assets and corresponding liabilities on the balance sheet and provide enhanced disclosure of lease activity.
Effective Date and Adoption Considerations:Effective in the first quarter of 2019. The standard requires a modified retrospective adoption. We can choose to apply the provisions at the beginning of the earliest comparative period presented in the financial statements or at the beginning of the period of adoption. We have elected to apply the guidance at the beginning of the period of adoption. Our leased assets and corresponding liabilities will exclude non-lease components.
Effect on Financial Statements or Other Significant Matters:We expect to record right-of-use leased assets and corresponding liabilities of approximately $625 million at the beginning of first quarter 2019.
Cloud Computing Implementation Costs
Standard/Description:The standard requires implementation costs incurred in cloud computing (i.e., hosting) arrangements that are service contracts to be assessed under existing guidance to determine which costs to capitalize as assets or expense as incurred.
Effective Date and Adoption Considerations:Effective in the first quarter of 2020. The standard requires adoption either retrospectively or prospectively.
Effect on Financial Statements or Other Significant Matters:We have not yet determined the impact of this standard on our financial statements.

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NOTE 4 :OPERATING SEGMENTSOperating Segments
We manage our business through the following operating segments:
▪CCG
•   Client Computing Group (CCG)
•    Data Center Group (DCG)
•    Internet of Things Group (IOTG)
•    Non-Volatile Memory Solutions Group (NSG)
•    Programmable Solutions Group (PSG)
•    All other
▪DCG
We offer platform products that incorporate various components and technologies, including a microprocessor and chipset, a stand-alone System-on-Chip (SoC), or a multichip package. A platform product may be enhanced by additional hardware, software, and services offered by Intel. Platform products are used in various form factors across our CCG, DCG, and ▪IOTG operating segments.
▪Mobileye
▪NSG
▪PSG
We derive a substantial majority of our revenue from platform products, which are our principal products and considered as one class of product. We offer platform products that incorporate various components and technologies, including a microprocessor and chipset, a stand-alone SoC, or a multichip package, based on Intel architecture. Platform products are used in various form factors across our CCG, DCG, and IOTG operating segments. Our non-platform, or adjacent, products can be combined with platform products to form comprehensive platform solutions to meet customer needs.
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CCG and DCG are our reportable operating segments. IOTG, Mobileye, NSG, and PSG do not meet the quantitative thresholds to qualify as reportable operating segments; however, we have elected to disclose the results of these non-reportable operating segments. Our Internet of Things portfolio, presented as Internet of Things, is comprised of the IOTG and Mobileye operating segments. For 2021, the results of our Intel Optane memory business are included in our DCG operating segment, and our NSG segment is comprised of our NAND memory business to align to the pending divestiture of our NAND memory business. Refer to "Note 10 : Acquisitions and Divestitures" within Notes to Consolidated Financial Statements for further information on the divestiture.
We have sales and marketing, manufacturing, engineering, finance, and administration groups. Expenses for these groups are generally allocated to the operating segments.
TheWe have an "all other" category that includes revenue, expenses, and expensescharges such as:
▪results of operations from non-reportable segments not otherwise presented, including Mobileye results;
presented;
▪historical results of operations from divested businesses, including Intel Security Group (ISecG) results;
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.
The Chief Operating Decision Maker (CODM), whichCODM, who is our Chief Executive Officer (CEO),CEO, allocates resources to and assesses the performance of each operating segment using information about itsthe operating segment's revenue and operating income (loss). The CODM does not evaluate operating segments using discrete asset information and we do not identify or allocate assets by operating segments. Based on the interchangeable nature of our manufacturing and assembly and test assets, most of the related depreciation expense is not directly identifiable within our operating segments, as it is included in overhead cost pools and subsequently absorbed into inventory as each product passes through our manufacturing process. AsBecause our products are then sold across multiple operating segments, it is impracticable to determine the total depreciation expense included as a component of each operating segment’ssegment's operating income (loss) results. Operating segments do not record inter-segment revenue. We do not allocate gains and losses from equity investments, interest and other income, or taxes to operating segments. Although the CODM uses operating income to evaluate the segments, operating costs included in one segment may benefit other segments. Except for these differences, theThe accounting policies for segment reporting are the same as for Intel as a whole.

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Net revenue and operating income (loss) for each period were as follows:
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Net revenue:      Net revenue:
Client Computing Group      Client Computing Group
Platform
$33,234

$31,226

$30,751
Platform$37,376 $35,642 $32,681 
Adjacent
3,770

2,777

2,157
Adjacent3,135 4,415 4,465 
 37,004
 34,003
 32,908
40,511 40,057 37,146 
Data Center Group      Data Center Group
Platform 21,155
 17,439
 15,895
Platform22,703 23,056 21,441 
Adjacent 1,836
 1,625
 1,341
Adjacent3,118 3,047 2,040 
 22,991
 19,064
 17,236
25,821 26,103 23,481 
Internet of Things Group      
Platform 3,065
 2,645
 2,290
Adjacent 390
 524
 348
Internet of ThingsInternet of Things
IOTGIOTG3,998 3,007 3,821 
MobileyeMobileye1,386 967 879 
5,384 3,974 4,700 
 3,455
 3,169
 2,638
Non-Volatile Memory Solutions Group 4,307
 3,520
 2,576
Non-Volatile Memory Solutions Group4,306 5,358 4,362 
Programmable Solutions Group 2,123
 1,902
 1,669
Programmable Solutions Group1,934 1,853 1,987 
All other 968
 1,103
 2,360
All other1,068 522 289 
Total net revenue $70,848
 $62,761
 $59,387
Total net revenue$79,024 $77,867 $71,965 
      
Operating income (loss):      Operating income (loss):
Client Computing Group $14,222
 $12,919
 $10,646
Client Computing Group$14,672 $15,129 $15,202 
Data Center Group 11,476
 8,395
 7,520
Data Center Group6,997 10,571 10,227 
Internet of Things Group 980
 650
 585
Internet of ThingsInternet of Things
IOTGIOTG1,045 497 1,097 
MobileyeMobileye460 241 245 
1,505 738 1,342 
Non-Volatile Memory Solutions Group (5) (260) (544)Non-Volatile Memory Solutions Group1,369 361 (1,176)
Programmable Solutions Group 466
 458
 (104)Programmable Solutions Group297 260 318 
All other (3,823) (4,112) (4,970)All other(5,384)(3,381)(3,878)
Total operating income $23,316
 $18,050
 $13,133
Total operating income$19,456 $23,678 $22,035 
Disaggregated net revenue for each period was as follows:
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Platform revenue
CCG notebook platform$25,475 $24,903 $20,779 
CCG desktop platform11,835 10,692 11,822 
CCG other platform1
66 47 80 
DCG platform22,703 23,056 21,441 
IOTG platform3,658 2,705 3,440 
63,737 61,403 57,562 
Adjacent revenue2
15,287 16,464 14,403 
Total revenue$79,024 $77,867 $71,965 
1 Includes our tablet and service provider revenue.
2 Includes all of our non-platform products for CCG, DCG, and IOTG, such as modem, Ethernet, and silicon photonics, as well as Mobileye, NSG, and PSG products.
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Platform revenue      
Desktop platform $12,220
 $11,647
 $12,371
Notebook platform 20,930
 19,414
 18,203
DCG platform 21,155
 17,439
 15,895
Other platform1
 3,149
 2,810
 2,467
  57,454
 51,310
 48,936
       
Adjacent revenue2
 13,394
 10,917
 8,290
ISecG divested business —
 534
 2,161
Total revenue $70,848
 $62,761
 $59,387
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Includes our tablet, service provider, and IOTG platform revenue.Financial StatementsNotes to Consolidated Financial Statements84
2
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Includes all of our non-platform products for CCG, DCG, and IOTG, such as modem, Ethernet, and silicon photonics, as well as NSG, PSG, and Mobileye products.
In 2018,2021, our three largest customers accounted for 39%43% of our net revenue (40%(39% in 2017, 38%2020 and 41% in 2016)2019), with Dell Inc. accounting for 16% (16%21% (17% in 2017, 15%2020 and 17% in 2016)2019), Lenovo Group Limited accounting for 12% (13%(12% in 2017,2020 and 13% in 2016)2019), and HP Inc. accounting for 10% (10% in 2020 and 11% (11% in 2017, 10% in 2016)2019). These three customers accounted for 45%42% of our accounts receivable as of December 29, 2018 (36%25, 2021 (43% as of December 30, 2017)26, 2020). Substantially all of the revenue from these customers was from the sale of platforms and other components by the CCG and DCG operating segments.



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Net revenue by country as presented below isregion, based on the billing location of the customer. Revenue from unaffiliated customers for each periodcustomer, was as follows:
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
China$21,141 $20,257 $20,026 
Singapore14,254 17,845 15,650 
United States14,107 16,573 15,617 
Taiwan13,461 11,605 10,058 
Other regions16,061 11,587 10,614 
Total net revenue$79,024 $77,867 $71,965 
Years Ended
(In Millions)
 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
China (including Hong Kong) $18,824
 $14,796
 $13,977
Singapore 15,409
 14,285
 12,780
United States 14,303
 12,543
 12,957
Taiwan 10,646
 10,518
 9,953
Other countries 11,666
 10,619
 9,720
Total net revenue $70,848
 $62,761
 $59,387
NOTE 5Note 4 :EARNINGS PER SHAREEarnings Per Share
We computed basic earnings per share of common stock based on the weighted average number of shares of common stock outstanding during the period.
Years Ended (In Millions, Except Per Share Amounts)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Net income available to common stockholders$19,868 $20,899 $21,048 
Weighted average shares of common stock outstanding—basic4,059 4,199 4,417 
Dilutive effect of employee incentive plans31 33 41 
Dilutive effect of convertible debt— — 15 
Weighted average shares of common stock outstanding—diluted4,090 4,232 4,473 
Earnings per share—basic$4.89 $4.98 $4.77 
Earnings per share—diluted$4.86 $4.94 $4.71 
We computed diluted earnings per share of common stock based on the weighted average number of shares of common stock outstanding plus potentially dilutive shares of common stock outstanding during the period.
Years Ended
(In Millions, Except Per Share Amounts)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Net income available to common stockholders $21,053
 $9,601
 $10,316
Weighted average shares of common stock outstanding—basic 4,611
 4,701
 4,730
Dilutive effect of employee incentive plans 50
 47
 53
Dilutive effect of convertible debt 40
 87
 92
Weighted average shares of common stock outstanding—diluted 4,701
 4,835
 4,875
Earnings per share - Basic $4.57
 $2.04
 $2.18
Earnings per share - Diluted $4.48
 $1.99
 $2.12
Potentially dilutive shares of common stock from employee incentive plans are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, the assumed vesting of outstanding RSUs, and the assumed issuance of common stock under the stock purchase plan.2006 ESPP. In December 2017,January 2020, we paid cash to satisfyfully redeemed the conversionremaining principal of our convertible debentures due 2035, which we excluded from2009 Debentures. We included our 2009 Debentures in the calculation of diluted earnings per share computation starting in the fourth quarter of 2017 and are no longer dilutive. Our convertible debentures due 2039 (2009 debentures) require settlement of the principal amount of the debt in cash upon conversion. Since the conversion premium is paid in cash or stock at our option, we determined the potentially dilutive shares of common stock in 2019 by applying the treasury stock method. During 2018, we paid cash to satisfymethod because the average market price was above the conversion of a portion of our 2009 debentures. The potentially dilutive shares associated with the converted portion were excluded from our diluted earnings per share computation in the quarter when conversions were tendered.price.
In all years presented, potentially dilutive securitiesSecurities that would have been anti-dilutive are insignificant and are excluded from the computation of diluted earnings per share. Inshare in all years presented, we included our 2009 debentures in the calculation of diluted earnings per share of common stock because the average market price was above the conversion price. We could potentially exclude the 2009 debentures in the future if the average market price is below the conversion price.periods presented.


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Note 5 :		 Notes to Financial Statements81Contract Liabilities
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NOTE 6 :CONTRACT LIABILITIES
(In Millions) Dec 29,
2018		 Opening Balance as of Dec 31, 2017
Prepaid supply agreements
 $2,587
 $105
Other 122
 195
Total contract liabilities $2,709
 $300
Contract liabilities are primarily related to partialconsist of prepayments received from customers on long-term prepaid customer supply agreements toward future NSG product delivery. As new prepaid supply agreements are entered intodelivery and performance obligations are negotiated, this componentother revenue deferrals from regular ongoing business activity. Contract liabilities were $498 million as of the contract liability balance will increase, andDecember 25, 2021 ($1.9 billion as customers purchase product and utilize their prepaid balances, the balance will decrease. The short-term portion of prepayments from supply agreements is reported on the consolidated balance sheets within other accrued liabilities.December 26, 2020).

The following table shows the changes in contract liability balances relating to long-term prepaid customer supply agreements during 2018:
(In Millions)  
Prepaid supply agreements balance as of December 31, 2017 $105
Additions and adjustments
 2,753
Prepaids utilized (271)
Prepaid supply agreements balance as of December 29, 2018 $2,587
Additions and adjustments in 2018 include a$1.0 billion reclassification from customer deposits previously included in other long-term liabilities. The long-term supply agreements represent $4.6 billion in future anticipated revenues to be recognized ratably over the next five years.
2021:
NOTE 7 :(In Millions)OTHER FINANCIAL STATEMENT DETAILS
INVENTORIES
(In Millions) Dec 29,
2018		 Dec 30,
2017
Raw materials $813
 $738
Work in process 4,511
 4,213
Finished goods 1,929
 2,032
Total inventories $7,253
 $6,983

Prepaid customer supply agreements balance as of December 26, 2020$1,625
Concession payment(950)
Prepaids utilized(633)
Prepaid customer supply agreements balance as of December 25, 2021$42
During the first quarter of 2021, we settled an agreement with our largest prepaid customer, whose prepayment balance made up $1.6 billion of our contract liability balance as of December 26, 2020. We returned $950 million to the customer and recognized $584 million in revenue for having completed performance of the prepaid customer supply agreement. The prepaid customer supply agreement is excluded from the NAND memory business and is recorded as Corporate revenue in 2021 in the "all other" category presented in "Note 3: Operating Segments" within the Consolidated Financial Statements.
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Note 6 :Other Financial Statement Details
PROPERTY, PLANT AND EQUIPMENT
Inventories
(In Millions)Dec 25, 2021Dec 26, 2020
Raw materials$1,441 $908 
Work in process6,656 5,693 
Finished goods2,679 1,826 
Total inventories$10,776 $8,427 
Property, Plant and Equipment
(In Millions) Dec 29,
2018		 Dec 30,
2017		(In Millions)Dec 25, 2021Dec 26, 2020
Land and buildings $30,954
 $27,391
Land and buildings$40,039 $37,536 
Machinery and equipment 66,721
 57,192
Machinery and equipment86,955 79,384 
Construction in progress 16,643
 15,812
Construction in progress21,545 17,309 
Total property, plant and equipment, gross 114,318
 100,395
Total property, plant and equipment, gross148,539 134,229 
Less: accumulated depreciation
 65,342
 59,286
Less: accumulated depreciation(85,294)(77,645)
Total property, plant and equipment, net $48,976
 $41,109
Total property, plant and equipment, net$63,245 $56,584 
Substantially all of ourOur depreciable property, plant and equipment assets wereare depreciated over the following estimated useful lives: machinery and equipment, 2 to 5 years,years; and buildings, 10 to 3025 years.
Net property, plant and equipment by country at the end of each period was as follows:
(In Millions)Dec 25, 2021Dec 26, 2020
United States$43,428 $38,829 
Israel7,754 7,837 
Ireland7,503 5,828 
Other countries4,560 4,090 
Total property, plant and equipment, net$63,245 $56,584 
(In Millions) Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
United States $27,512
 $24,459
 $23,598
Israel 8,861
 6,501
 3,923
China 6,417
 4,275
 2,306
Ireland 3,947
 3,938
 4,865
Other countries 2,239
 1,936
 1,479
Total property, plant and equipment, net $48,976
 $41,109
 $36,171
OTHER ACCRUED LIABILITIESOther Accrued Liabilities
Other accrued liabilities include deferred compensation of $1.7$2.8 billion as of December 29, 201825, 2021 ($1.72.5 billion as of December 30, 2017)26, 2020) and collateral received for derivatives under credit support annex agreements of $1.0 billion as of December 25, 2021 ($2.0 billion as of December 26, 2020).
ADVERTISINGAdvertising
Advertising costs, including direct marketing, are expensed as incurred and recorded within marketing, general and administrative (MG&A) expensesMG&A expenses. Advertising costs were $1.2$1.1 billion in 20182021 ($1.4 billion763 million in 20172020 and $1.8 billion$832 million in 2016)2019).
INTEREST AND OTHER, NETInterest and Other, Net
The components of interest and other, net for each period were as follows:
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Interest income$144 $272 $483 
Interest expense(597)(629)(489)
Other, net(29)(147)490 
Total interest and other, net$(482)$(504)$484 
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Interest income $438
 $441
 $222
Interest expense (468) (646) (733)
Other, net 156
 (144) (192)
Total interest and other, net $126

$(349)
$(703)
Interest expense in the preceding table is net of$496398 million of interest capitalized in 20182021 ($313338 million in 20172020 and $135$472 million in 2016)2019).

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NOTE 8Note 7 :RESTRUCTURING AND OTHER CHARGESRestructuring and Other Charges
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
2016 Restructuring Program $(72) $135
 $1,681
ISecG separation costs and other charges —
 249
 63
Total restructuring and other charges $(72) $384
 $1,744
2016 RESTRUCTURING PROGRAM
In the second quarter of 2016, management approved and commenced the 2016 Restructuring Program to accelerate our transformation from a PC company to one that powers the cloud and billions of smart, connected computing devices. Under this program, we closed certain facilities and reduced headcount globally to align our operations with evolving business needs by investing in our growth businesses and improving efficiencies. This program was completed in 2017.
Restructuring and other charges (benefits) by type for the 2016 Restructuring Program wereare as follows:
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Employee severance and benefit arrangements $(72) $70
 $1,652
Pension settlement charges —
 25
 —
Asset impairment and other charges —
 40
 29
Total restructuring and other charges $(72) $135
 $1,681
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020
Employee severance and benefit arrangements$48 $124 
Litigation charges and other2,291 67 
Asset impairment charges287 7 
Total restructuring and other charges$2,626 $198 
A restructuring program was approved in the first quarter of 2020 to further align our workforce with our continuing investments in the business and to execute the planned divestiture of Home Gateway Platform, a division of CCG. These actions were substantially complete as of September 25, 2021.
Litigation charges and other includes a charge of $2.2 billion in the first quarter of 2021 related to the VLSI Technology LLC (VLSI) litigation, which is recorded as a Corporate charge in the "all other" category presented in "Note 3: Operating Segments" within Notes to Consolidated Financial Statements. Refer to "Note 19: Commitments and Contingencies" within Notes to Consolidated Financial Statements for further information on legal proceedings related to the VLSI litigation.
Asset impairment charges includes impairments related to the shutdown in the second quarter of 2021 of two of our non-strategic businesses, the results of which are included in the "all other" category presented in "Note 3: Operating Segments" within Notes to Consolidated Financial Statements. The goodwill related to these businesses was impaired, resulting in a charge of $238 million recognized in the second quarter of 2021 in the "all other" category along with other impairment charges related to these businesses.
NOTE 9Note 8 :INCOME TAXESIncome Taxes
TheIncome Tax Reform enacted in December 2017 reduced the U.S. federal corporate tax rate from 35.0% to 21.0% starting in 2018, assessed a one-time transition tax on earnings of non-U.S. subsidiaries that have not been taxed previously in the U.S., and created new taxes on certain future foreign sourced earnings. We recorded a provisional income tax expense of $5.4 billion, net within our 2017 results related to Tax Reform. We completed our accounting for Tax Reform in the fourth quarter of 2018. Our final tax charge for Tax Reform was $5.1 billion, net and was made up of the recognition of the transition tax imposed on undistributed earnings from non-U.S. subsidiaries and remeasurement of deferred income taxes using the newly enacted statutory tax rate of 21.0%.Provision
INCOME TAX PROVISION
Income before taxes and the provision for taxes consisted of the following:
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Income before taxes:      Income before taxes:
U.S. $14,753
 $11,141
 $6,957
Non-U.S. 8,564
 9,211
 5,979
USUS$9,361 $15,452 $13,729 
Non-USNon-US12,342 9,626 10,329 
Total income before taxes 23,317
 20,352
 12,936
Total income before taxes21,703 25,078 24,058 
Provision for taxes:      Provision for taxes:
Current:      Current:
Federal 2,786
 8,307
 1,319
Federal1,304 1,120 1,391 
State (11) 27
 13
State75 46 37 
Non-U.S. 1,097
 899
 756
Non-USNon-US1,198 1,244 1,060 
Total current provision for taxes 3,872
 9,233
 2,088
Total current provision for taxes2,577 2,410 2,488 
Deferred:      Deferred:
Federal (1,389) 1,680
 658
Federal(863)1,369 597 
Other (219) (162) (126)
StateState(25)25 1 
Non-USNon-US146 375 (76)
Total deferred provision for taxes (1,608) 1,518
 532
Total deferred provision for taxes(742)1,769 522 
Total provision for taxes $2,264
 $10,751
 $2,620
Total provision for taxes$1,835 $4,179 $3,010 
Effective tax rate 9.7% 52.8% 20.3%Effective tax rate8.5 %16.7 %12.5 %
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The difference between the tax provision at the statutory federal income tax rate and the tax provision as a percentage of income before income taxes (effective tax rate) for each period was as follows:
Years Ended Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		Years EndedDec 25, 2021Dec 26, 2020Dec 28, 2019
Statutory federal income tax rate 21.0 % 35.0 % 35.0 %Statutory federal income tax rate21.0 %21.0 %21.0 %
Increase (reduction) in rate resulting from:      Increase (reduction) in rate resulting from:
Non-U.S. income taxed at different rates (3.6) (7.6) (11.7)
Non-US income taxed at different ratesNon-US income taxed at different rates(5.9)(3.7)(3.7)
Research and development tax credits (2.7) (2.3) (2.3)Research and development tax credits(2.4)(2.1)(2.3)
Domestic manufacturing deduction benefit —
 (1.3) (1.4)
Restructuring of certain non-U.S. subsidiariesRestructuring of certain non-U.S. subsidiaries(3.4)— — 
Foreign derived intangible income benefit (3.7) —
 —
Foreign derived intangible income benefit(2.2)(1.9)(3.2)
Tax Reform (1.3) 26.8
 —
ISecG divestiture —
 3.3
 —
Change in permanent reinvestment assertionChange in permanent reinvestment assertion— 1.6 — 
Other (0.1) (1.1) 0.7
Other1.4 1.8 0.7 
Effective tax rate 9.7 % 52.8 % 20.3 %Effective tax rate8.5 %16.7 %12.5 %
The majority of the decrease in ourOur effective tax rate decreased in 20182021 compared to 2017 was2020, primarily driven by non-recurring impacts in 2017 from Tax Reform andone-time tax benefits due to the ISecG divestiture. The reductionrestructuring of the U.S. statutory rate combined with the net impact of the enactment or repeal of specific tax law provisions through Tax Reform drove the remaining decrease in our effective tax rate in 2018.
Substantially all of the increase in our effective tax rate in 2017 compared to 2016 was driven by the one-time impacts from Tax Reform enacted on December 22, 2017, the 2017 ISecG divestiture, andcertain non-US subsidiaries as well as a higher proportion of our income in highernon-US jurisdictions. As a result of the restructuring, we established deferred tax assets and released the valuation allowances of certain foreign deferred tax assets. The majority of these deferred tax assets established in 2021 fully offset the deferred tax liabilities recognized in 2020 driven by a change in our permanent reinvestment assertion with respect to undistributed earnings in China, as a result of the planned divestiture of our NAND memory business.
Our effective tax rate jurisdictions.increased in 2020 compared to 2019, primarily driven by a change in our permanent reinvestment assertion with respect to undistributed earnings in China, as a result of the planned divestiture of our NAND memory business. It also increased due to the reduction in our foreign derived intangible income benefit in 2020.
We derive the effective tax rate benefit attributed to non-U.S.non-US income taxed at different rates primarily from our operations in China, Hong Kong, Ireland, Israel, and Israel.Malaysia. The statutory tax rates in these jurisdictions range from 12.5% to 25.0%24.0%. In addition, weWe are subject to reduced tax rates in ChinaIsrael and IsraelMalaysia as long as we conduct certain eligible activities and make certain capital investments. TheseWe have conditional reduced tax rates that expire at various dates through 20262056 and we expect to apply for renewals upon expiration.

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Deferred and Current Income Taxes
DEFERRED AND CURRENT INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of our deferred tax assets and liabilities at the end of each period were as follows:
(In Millions) Dec 29,
2018		 Dec 30,
2017		(In Millions)Dec 25, 2021Dec 26, 2020
Deferred tax assets:    Deferred tax assets:
Accrued compensation and other benefits $570
 $711
Accrued compensation and other benefits$1,019 $865 
Share-based compensation 273
 241
Share-based compensation477 324 
Deferred income —
 211
Litigation chargeLitigation charge467 — 
Inventory 517
 675
Inventory914 835 
R&D expenditures capitalizationR&D expenditures capitalization519 — 
State credits and net operating losses 1,297
 1,081
State credits and net operating losses2,010 1,829 
Other, net 512
 887
Other, net819 617 
Gross deferred tax assets 3,169
 3,806
Gross deferred tax assets6,225 4,470 
Valuation allowance (1,302) (1,171)Valuation allowance(2,259)(1,963)
Total deferred tax assets 1,867
 2,635
Total deferred tax assets3,966 2,507 
Deferred tax liabilities:    Deferred tax liabilities:
Property, plant and equipment (878) (943)Property, plant and equipment(4,213)(3,109)
Licenses and intangibles (744) (881)Licenses and intangibles(486)(725)
Convertible debt (204) (374)
Unrealized gains on investments and derivatives (266) (421)Unrealized gains on investments and derivatives(819)(735)
Transition tax —
 (1,850)
Unremitted earnings of non-US subsidiariesUnremitted earnings of non-US subsidiaries— (403)
Other, net (318) (373)Other, net(241)(146)
Total deferred tax liabilities (2,410) (4,842)Total deferred tax liabilities(5,759)(5,118)
Net deferred tax assets (liabilities) $(543) $(2,207)Net deferred tax assets (liabilities)$(1,793)$(2,611)
    
Reported as:    Reported as:
Deferred tax assets 1,122
 840
Deferred tax assets874 1,232 
Deferred tax liabilities (1,665) (3,046)Deferred tax liabilities(2,667)(3,843)
Net deferred tax assets (liabilities) $(543) $(2,207)Net deferred tax assets (liabilities)$(1,793)$(2,611)
Change in valuation allowance for deferred tax assets were as follows:
Years Ended (In Millions)Balance at Beginning of YearAdditions Charged to Expenses/
Other Accounts		Net
(Deductions)
Recoveries		Balance at
End of Year
Valuation allowance for deferred tax assets
December 25, 2021$1,963 $442 $(146)$2,259 
December 26, 2020$1,534 $378 $51 $1,963 
December 28, 2019$1,302 $239 $(7)$1,534 
Deferred tax assets are included within other long-term assets on the consolidated balance sheets.Consolidated Balance Sheets.
The valuation allowance as of December 29, 201825, 2021 included allowances primarily related to unrealized state credit carryforwards of $1.3$2.0 billion.
As of December 29, 2018,25, 2021, our federal and non-U.S.non-US net operating loss carryforwards for income tax purposes were $246$644 million and $414 million,$1.1 billion, respectively. Most of the non-U.S.non-US net operating loss carryforwards have no expiration date. The remaining non-U.S.non-US and U.S.US federal and state net operating loss carryforwards expire at various dates through 2039.2040. A significant amount of the net operating loss carryforwards in the U.S.US relates to acquisitions and, as a result, is limited in the amount that can be recognized in any one year. The non-U.S.federal and non-US net operating loss carryforwards include $39$357 million and $860 million, respectively, that is not likely to be recovered and has been reduced by a valuation allowance.
At December 29, 2018,25, 2021, we have undistributed earnings of certain foreign subsidiaries of approximately $18.0$18.9 billion that we have indefinitely invested, and on which we have not recognized deferred taxes. Estimating the amount of potential tax is not practicable because of the complexity and variety of assumptions necessary to compute the tax.
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Current income taxes receivable of $162$23 million as of December 29, 201825, 2021 ($71131 million as of December 30, 2017)26, 2020) are included in other current assets. Current income taxes payable of $366$1.1 billion as of December 25, 2021 ($756 million as of December 29, 2018 ($1.4 billion as of December 30, 2017)26, 2020) are included in other accrued liabilities.
Long-term income taxes payable of $4.9$4.3 billion as of December 29, 201825, 2021 ($4.14.6 billion as of December 30, 2017) includes uncertain tax positions, reduced by the associated federal deduction for state taxes and non-U.S. tax credits. Long-term income taxes payable may also include other long-term tax liabilities that are not uncertain but have not yet been paid, including the substantial majority26, 2020) is primarily comprised of the transition tax from the Tax Reform, which is payable over eight years beginning in 2018.2018, as well as amounts for uncertain tax positions, reduced by the associated deduction for state taxes and non-US tax credits.

Uncertain Tax Positions
(In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Beginning gross unrecognized tax benefits$828 $548 $283 
Settlements and effective settlements with tax authorities(25)(142)(4)
Changes in balances related to tax position taken during prior periods(26)165122 
Changes in balances related to tax position taken during current period243257147
Ending gross unrecognized tax benefits$1,020 $828 $548 
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UNCERTAIN TAX POSITIONS
Unrecognized tax benefits were $283 million as of December 29, 2018 ($211 million as of December 30, 2017 and $154 million as of December 31, 2016). If the remaining balance of unrecognized tax benefits were recognized in a future period, it would result in a tax benefit of $178$721 million as of December 29, 201825, 2021 ($139550 million as of December 30, 2017)26, 2020) and a reduction in the effective tax rate. The tax benefit for settlements, effective settlements, and remeasurements was insignificant in all periods presented. Interest, penalties, and accrued interest related to unrecognized tax benefits were insignificant in the periods presented.
We comply with the laws, regulations, and filing requirements of all jurisdictions in which we conduct business. We regularly engage in discussions and negotiations with tax authorities regarding tax matters in the various jurisdictions.jurisdictions in which we conduct business. Although the timing of the resolutions and/or closures of audits is highly uncertain, it is reasonably possible that certain U.S.US federal and non-U.S.non-US tax audits may be concluded within the next 12 months, which could increase or decrease the balance of our gross unrecognized tax benefits. We estimate that the unrecognized tax benefits as of December 25, 2021 could decrease by as much as $327 million in the next 12 months.
We file federal, state, and non-U.S.non-US tax returns. For U.S. federal and non-U.S.Excluding pre-acquisition Altera tax returns,years, we are generally no longer subject to US federal and non-US tax examinations for years prior to 2004.2013. For U.S.US state tax returns, we are no longer subject to tax examination for years prior to 2010. We have filed petitions before the U.S. Tax Court relating to the treatment of stock-based compensation expense in an inter-company cost-sharing transaction for certain pre-acquisition Altera tax years. The U.S. Tax Court ruled in favor of Altera and the U.S. Internal Revenue Service appealed the ruling to the U.S. Court of Appeals for the Ninth Circuit. During 2018, the U.S. Court of Appeals heard oral arguments and the outcome of those appeals is pending.2014.
NOTE 10Note 9 :INVESTMENTSInvestments
DEBT INVESTMENTSDebt Investments
Trading Assets
Net losses related toFor trading assets still held at the reporting date, were $188we recorded net losses of $606 million in 20182021 (net gains of $414$694 million in 20172020 and net lossesgains of $295$26 million in 2016)2019). Net gains on the related derivatives were $163$609 million in 20182021 (net losses of $422$667 million in 20172020 and net gains of $300$22 million in 2016)2019).
Available-for-Sale Debt Investments
  December 29, 2018 December 30, 2017

(In Millions)		 
Adjusted
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
 
Adjusted
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Corporate debt $3,068
 $2
 $(28) $3,042
 $2,294
 $4
 $(13) $2,285
Financial institution instruments 3,076
 3
 (11) 3,068
 3,387
 3
 (9) 3,381
Government debt 1,069
 1
 (9) 1,061
 961
 —
 (6) 955
Total available-for-sale debt investments $7,213
 $6
 $(48) $7,171
 $6,642
 $7
 $(28) $6,621
Available-for-sale investments include corporate debt, government debt, and financial institution instruments. Government debt includes instruments such as non-U.S.non-US government bonds and U.S.US agency securities. Financial institution instruments include instruments issued or managed by financial institutions in various forms, such as commercial paper, fixed- and floating-rate bonds, money market fund deposits, and time deposits. SubstantiallyAs of December 25, 2021 and December 26, 2020, substantially all time deposits were issued by institutions outside the U.S.US. The adjusted cost of our available-for-sale investments was $5.0 billion as of December 29, 2018and25, 2021 ($7.8 billion as of December 30, 2017.26, 2020). The adjusted cost of our available-for-sale investments approximated the fair value for these periods.
The fair values of available-for-sale debt investments by contractual maturity as of December 29, 201825, 2021 were as follows:
(In Millions) Fair Value
Due in 1 year or less $3,233
Due in 1–2 years 404
Due in 2–5 years 2,776
Due after 5 years 208
Instruments not due at a single maturity date 550
Total $7,171

(In Millions)Fair Value
Due in 1 year or less$2,931 
Due in 1–2 years559 
Due in 2–5 years281 
Due after 5 years— 
Instruments not due at a single maturity date1,216 
Total$4,987
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Equity Investments
EQUITY INVESTMENTS
(In Millions)Dec 25, 2021Dec 26, 2020
Marketable equity securities$2,171 $1,830 
Non-marketable equity securities4,111 3,304 
Equity method investments16 18 
Total$6,298 $5,152 
(In Millions) Dec 29,
2018		 Dec 30,
2017
Marketable equity securities $1,440
 $4,192
Non-marketable equity securities 2,978
 2,613
Equity method investments 1,624
 1,774
Total $6,042
 $8,579
The components of gains (losses) on equity investments, net for each period were as follows:
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Ongoing mark-to-market adjustments on marketable equity securities1
 $(129) $—
 $—
Observable price adjustments on non-marketable equity securities1
 202
 —
 —
Impairment charges (424) (833) (187)
Sale of equity investments and other 2
 226
 3,484
 693
Total gains (losses) on equity investments, net $(125)
$2,651

$506
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Ongoing mark-to-market adjustments on marketable equity securities$(130)$(133)$277 
Observable price adjustments on non-marketable equity securities750 176 293 
Impairment charges(154)(303)(122)
Sale of equity investments and other 1
2,263 2,164 1,091 
Total gains (losses) on equity investments, net$2,729 $1,904 $1,539 
1
1    Sale of equity investments and other includes initial fair value adjustments recorded upon a security becoming marketable, realized gains (losses) on sales of non-marketable equity investments, and our share of equity method investee gains (losses) and distributions.
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 and 2016, sales of equity investments and other also includes realized gains (losses) on sales of available-for-sale equity securities, which are now reflected in ongoing mark-to-market adjustments on marketable equity securities.
In 2018,2021, we recognized $202 million in upward observable price adjustments and there were no downward adjustments. Observable price adjustments are not applicable to prior periods. We also recognized impairments of $132$154 million on non-marketable equity securities ($555290 million in 20172020 and $184$122 million in 2016)2019).
In 2018, we recognized $153 million inAs of December 25, 2021 the cumulative amount of impairments for equity method investee losses ($223 million in 2017 and $38 million in 2016).
In 2017 and 2016, we recognized $3.4 billion and $407 million, respectively, in realized gains on sales of a portion of our interest in ASML Holding N.V. (ASML). During the second quarter of 2017, we determined we had an other-than-temporary decline in thesecurities without readily determinable fair value of our investment in Cloudera, Inc.is $916 million and recognized an impairment charge of $278 million.upward observable price adjustments were $1.1 billion.
GainsNet unrealized gains and losses for our marketable and non-marketable equity securities during the period were as follows:
(In Millions) Dec 29,
2018
Net gains (losses) recognized during the period on equity securities $298
Less: Net (gains) losses recognized during the period on equity securities sold during the period (445)
Unrealized gains (losses) recognized during the period on equity securities still held at the reporting date $(147)
Equity method investments at the end of each period were as follows:
(In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Net gains (losses) recognized during the period on equity securities$1,210 $1,679 $734 
Less: Net (gains) losses recognized during the period on equity securities sold during the period(259)(254)(424)
Net unrealized gains (losses) recognized during the period on equity securities still held at the reporting date$951 $1,425 $310 
  December 29, 2018 December 30, 2017
(Dollars In Millions) 
Carrying
Value
 
Ownership
Percentage
 
Carrying
Value
 
Ownership
Percentage
IM Flash Technologies, LLC $1,574
 49% $1,505
 49%
McAfee —
 49% 153
 49%
Other equity method investments 50
   116
  
Total $1,624
   $1,774
  
McAfee Corp.

IM Flash Technologies, LLC
IM Flash Technologies, LLC (IMFT) was formedMcAfee completed its initial public offering in 2006 by Micron Technology, Inc. (Micron)October 2020. Due to our 41% ownership and Intel to jointly develop NAND flash memorysignificant influence as of December 25, 2021, we account for it as an equity method investment. We had no accounting carrying value as of December 25, 2021 and 3D XPoint™ technology products. IMFT is an unconsolidated variable interest entity and all costsas of IMFT are passed on to Micron and Intel throughDecember 26, 2020. During 2021, we recognized McAfee dividends of $1.3 billion, which includes a special dividend of $1.1 billion paid in connection with the sale of products or services in proportional share of ownership. As of December 29, 2018, we own a 49% interest in IMFT. Our portion of IMFT costs was approximately $494McAfee's Enterprise Business to Symphony Technology Group and $228 million in 2018 (approximately $415 million in 2017 and $400 million in 2016).

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IMFT depends on Micron and Intel for any additional cash needs to be provided in the form of cash calls or member debt financing (MDF). Extensions of MDF may be converted to a capital contribution at the lender's request, or may be repaid upon availability of funds.
In July 2018, Intel and Micron announced that they agreed to complete joint development for the second generation of 3D XPoint technology, which is expected to occur in the first half of 2019 and technology development beyond that generation will be pursued independently by the two companies to optimize the technology for their respective product and business needs. We recognized an impairment charge of $290 million million during the third quarter of 2018. This reduced the carrying value of our equity method investment in IMFT to $1.6 billion in line with our expectation of future cash flows. In January 2019, Micron exercised its right to call our interest in IMFT. The call transaction will close between six and twelve months from the date Micron exercised the call option. We will continue to purchase product manufactured at the IMFT facility for a period of up to one year following the close date.
McAfee
During the second quarter of 2017, we closed our divestiture of the ISecG business and retained a49% interest in McAfee as partial consideration. Our investment is accounted for under the equity method of accounting. During the third quarter of 2017, we received a $735 million dividend from McAfee. For further information related to the divestiturepartial sale of the ISecG business, see "Note 11: Acquisitionsour investment in McAfee. We recognized McAfee dividends of $126 million in 2020 and Divestitures."$632 million in 2019.
In November 2021, McAfee announced an agreement to be acquired by an investor group, which is subject to closing conditions.
Beijing Unisoc Technology Ltd. (Unisoc)
During 2014, we entered into an agreement with Tsinghua Unigroup Ltd. (Tsinghua Unigroup), an operating subsidiary of Tsinghua Holdings Co. Ltd., to jointly develop Intel® architecture- and communications-based solutions for phones. During 2015, we invested $966 million for a minority stake of Beijing UniSpreadtrum Technology Ltd, a holding company under Tsinghua Unigroup. During 2017, we reduced our expectation of the company's future operating performance due to competitive pressures, which resulted in an impairment charge of $308 million. During 2018, Beijing UniSpreadtrum Technology Ltd and RDA Microelectronics merged and rebranded themselves as Beijing Unisoc Technology Ltd. (Unisoc). We account for our interest in Beijing Unisoc Technology Ltd. (Unisoc) as a non-marketable equity security. In the first quarter of 2021, we recognized $471 million in observable price adjustments in our investment in Unisoc and as of December 25, 2021, the net book value of the investment was $1.1 billion ($658 million as of December 26, 2020).
NOTE 11Note 10 :ACQUISITIONS AND DIVESTITURESAcquisitions and Divestitures
ACQUISITIONSAcquisitions
During 2018, weWe completed five4 acquisitions qualifying as business combinations that were not material to our operations. During 2017, in addition to the Mobileye acquisition shown below, we completed two2021 and 6 acquisitions qualifyingin 2020, all of which qualified as business combinations. During 2016, we acquired AlteraThe consideration for $14.5 billion,the acquisitions in 2021 and in addition, completed 11 acquisitions qualifying as business combinations for aggregate consideration of $1.1 billion.
Other acquisitions completed in 2018, 2017, and 2016, both individually and in the aggregate, were not significant to our results of operations, and substantially all of the consideration, which2020 primarily consisted of cash and was allocated to goodwill and identifiableidentified intangible assets. For information on the assignment of goodwill to our operating segments, see "Note 12:11: Goodwill," and for information on the classification of intangible assets, see "Note 13:12: Identified Intangible Assets."
Mobileye
As
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Table of August 21, 2017, upon the completion of our tender offer,Contents

Moovit
On May 4, 2020, we acquired 97.3%Moovit, a MaaS solutions company, for total consideration of the outstanding ordinary shares of Mobileye, a global leader in the development of computer vision and machine learning, data analysis, localization, and mapping for advanced driver- assistance systems and autonomous driving. This acquisition combines Mobileye's leading computer vision expertise with Intel’s high-performance computing and connectivity expertise to create automated driving solutions from car to cloud. The combination is expected to accelerate innovation for the automotive industry and position Intel as a leading technology provider in the fast-growing market for highly and fully autonomous vehicles. The transaction also extends Intel’s strategy to invest in data-intensive market opportunities that build on our strengths in computing and connectivity from the cloud, through the network, to the device. We acquired the remaining 2.7% of Mobileye shares in April 2018.
Total consideration to acquire Mobileye was $14.9 billion (net of $366 million of cash and cash equivalents acquired), of which $14.5 billion was paid in 2017 and the remainder in 2018.
$915 million. The fair values of the assets acquired relate to goodwill of $638 million and liabilities assumed in the acquisitionintangible assets of Mobileye, by major class, were recognized as follows:
(In Millions)  
Short-term investments and marketable securities $370
Tangible assets 227
Goodwill 10,283
Identified intangible assets 4,482
Current liabilities (69)
Deferred tax liabilities and other (418)
Total $14,875

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We assumed outstanding unvested Mobileye stock options and RSUs granted under two Mobileye equity plans. We will not grant additional equity awards under these two Mobileye equity plans. In connection with the acquisition, we recognized share-based compensation expense of $71 million for cash-settled awards.
Goodwill of $10.3 billion$331 million. The goodwill arising from the acquisition is attributed to the expected synergies and other benefits that will be generated from the combination of Intel and Mobileye.Moovit. Substantially all of the goodwill recognized iswill not be deductible for local tax purposes. The acquisition-related intangible assets are primarily related to Moovit's monthly active user base and application platform. The goodwill and operating results of Moovit are included in our Mobileye operating segment.
Divestitures
NAND Memory Business
In October 2020, we signed an agreement with SK hynix Inc. (SK hynix) to divest our NAND memory business for $9.0 billion in cash. The NAND memory business includes our NAND memory fabrication facility in Dalian, China and certain related equipment and tangible assets (the Fab Assets), our NAND SSD business (the NAND SSD Business), and our NAND memory technology and manufacturing business (the NAND OpCo Business). The transaction will be completed in two closings.
The first closing was completed on December 29, 2021, subsequent to our fiscal 2021 year-end. At first closing, SK hynix paid $7.0 billion of consideration, with the remaining $2.0 billion to be received at the second closing of the transaction, expected to be deductible for tax purposes. The goodwill recognized fromno earlier than March 2025. In connection with the acquisition is included within "all other."
The identified intangible assets assumed in the acquisition of Mobileye were recognized as follows:
  Fair Value
(In Millions)		 Weighted Average
Estimated Useful Life
(In Years)
Developed technology $2,346
 9
Customer relationships and brands 777
 12
Identified intangible assets subject to amortization 3,123
  
In-process research and development 1,359
  
Identified intangible assets not subject to amortization 1,359
  
Total identified intangible assets $4,482
  
DIVESTITURES
Wind River Systems, Inc. (Wind River)
During the second quarter of 2018,first closing, we completed the divestiture of Wind River and recognizedexpect to recognize a pre-tax gain of $494approximately $1.0 billion within interest and other, net, and tax expense of approximately $450 million. Based on our ongoing obligation under the NAND wafer manufacturing and sale agreement, approximately $600 million of the initial closing consideration will be deferred and recognized between first and second closing within interest and other, net.
Intel Security Group
On April 3, 2017,At the first closing, we closedsold to SK hynix the Fab Assets and the NAND SSD Business and transferred certain employees, IP, and other assets related to the NAND OpCo Business to separately created wholly owned subsidiaries of Intel. The equity interest of the NAND OpCo Business will transfer to SK hynix at the second closing. In connection with the first closing, we and certain affiliates of SK hynix also entered into a NAND wafer manufacturing and sale agreement, pursuant to which we will manufacture and sell to SK hynix NAND memory wafers to be manufactured using the Fab Assets in Dalian, China until the second closing. We have concluded based on the terms of the transaction agreements that the subsidiaries will be variable interest entities for which we are not the primary beneficiary, because the governance structure of these entities does not allow us to direct the activities that would most significantly impact their economic performance. In line with TPG VII Manta Holdings, L.P., now known as Manta Holdings, L.P. (TPG), transferring certain assets and liabilities relating to ISecG to a newly formed, jointly owned, separate cybersecurity company called McAfee.
Total consideration received was $4.2 billion, consisting of $924 million in cash proceeds, $1.1 billionthis conclusion, we will fully deconsolidate our ongoing interests in the form of equity representing a 49% ownership interest in McAfee, and $2.2 billionNAND OpCo Business in the form of promissory notes issued by McAfee and TPG. During the thirdfirst quarter of 2017, McAfee2022, and TPG repaidwill record a receivable for the $2.2 billionsecond closing proceeds of promissory notes, which are included within proceeds from divestiture.$1.9 billion.
The carrying amounts of the major classes of ISecGNAND assets held for sale included the following:
(In Millions)Dec 25, 2021Dec 26, 2020
Inventories$953 $962 
Property, plant and equipment, net5,989 4,363 
Total assets$6,942 $5,325 
We ceased recording depreciation on property, plant and liabilitiesequipment as of the transaction close date the assets triggered held for sale accounting. The agreement provided for continued capital purchases through first closing and we invested $1.6 billion in 2021, which is classified as assets held for sale at period end and sold at first closing.
Home Gateway Platform Division
On July 31, 2020, we completed the divestiture of the majority of Home Gateway Platform, a division of CCG, for proceeds of $150 million. The divestiture included the following:
transfer of certain employees, equipment, and an ongoing supply agreement for future units.
(In Millions) Apr 1,
2017
Accounts receivable $317
Goodwill 3,601
Identified intangible assets 965
Other assets 276
Total assets $5,159
   
Deferred income $1,553
Other liabilities 276
Total liabilities $1,829
Smartphone Modem Business
AsOn December 2, 2019, we completed the divestiture of the transaction close date, wemajority of our smartphone modem business, including certain employees, IP, equipment, and leases. Net assets sold were $267 million. We recognized a pre-tax gain of $387$690 million within "Interest and other, net," which is net of $507 million of currency translation adjustment losses reclassified from accumulated other comprehensive income (loss) associated with currency charges on the carrying values of ISecG goodwill and identified intangible assets. In addition, we recognized a tax expense of $822 million.

divestiture.
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NOTE 12Note 11 :GOODWILLGoodwill
Goodwill activity for each period was as follows:

(In Millions)		Dec 26, 2020AcquisitionsOtherDec 25, 2021
Client Computing Group$4,360 $73 $— $4,433 
Data Center Group7,232 123 — 7,355 
Internet of Things Group1,591 — — 1,591 
Mobileye10,928 — — 10,928 
Programmable Solutions Group2,622 — 34 2,656 
All other238 — (238)— 
Total$26,971 $196 $(204)$26,963 

(In Millions)		 Dec 30,
2017		 Acquisitions Transfers Other Dec 29,
2018
Client Computing Group $4,356
 $47
 $—
 $—
 $4,403
Data Center Group 5,421
 3
 —
 —
 5,424
Internet of Things Group 1,126
 16
 480
 (43) 1,579
Programmable Solutions Group 2,490
 89
 —
 —
 2,579
All other 10,996
 7
 (480) 5
 10,528
Total $24,389
 $162
 $—
 $(38) $24,513

(In Millions)		 Dec 31,
2016		 Acquisitions Transfers Other Dec 30,
2017		(In Millions)Dec 28, 2019AcquisitionsOtherDec 26, 2020
Client Computing Group $4,356
 $—
 $—
 $—
 $4,356
Client Computing Group$4,333 $27 $— $4,360 
Data Center Group 5,412
 9
 —
 —
 5,421
Data Center Group7,182 50 — 7,232 
Internet of Things Group 1,123
 3
 —
 —
 1,126
Internet of Things Group1,579 12— 1,591
MobileyeMobileye10,290 638— 10,928
Programmable Solutions Group 2,490
 —
 —
 —
 2,490
Programmable Solutions Group2,654 2(34)2,622
All other 718
 10,278
 —
 —
 10,996
All other238 — — 238
Total $14,099
 $10,290
 $—
 $—
 $24,389
Total$26,276 $729 $(34)$26,971 
During the thirdsecond quarter of 2018,2021, we made an organizational changerecognized a goodwill impairment loss of $238 million related to combinetwo non-strategic businesses that we exited, recorded within our artificial intelligence investments in edge computing with IOTG; accordingly, approximately $480 million of goodwill was reallocated from "all other" to the IOTG operating segment.
category. During the fourth quarters of 2018, 2017,2021 and 2016,2020, we completed our annual impairment assessments and we concluded that goodwill was not impaired in any of these years.impaired. The accumulated impairment lossesloss as of December 29, 2018 were $71925, 2021 was $957 million: $365 million associated with CCG, $275 million associated with DCG, and $79 million associated with IOTG.IOTG, and the remainder associated with non-reportable segments.

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NOTE 13 :IDENTIFIED INTANGIBLE ASSETSIdentified Intangible Assets
December 25, 2021December 26, 2020
(In Millions)Gross AssetsAccumulated AmortizationNetGross AssetsAccumulated AmortizationNet
Developed technology$11,102 $(6,026)$5,076 $10,188 $(4,880)$5,308 
Customer relationships and brands2,110 (1,063)1,047 2,110 (854)1,256 
Licensed technology and patents2,893 (1,746)1,147 2,836 (1,629)1,207 
In-process R&D— — — 954 — 954 
Other non-amortizing intangibles— — — 301 — 301 
Total identified intangible assets$16,105 $(8,835)$7,270 $16,389 $(7,363)$9,026 
  December 29, 2018
(In Millions) 
Gross
Assets
 
Accumulated
Amortization
 Net
Acquisition-related developed technology $9,611
 $(3,021) $6,590
Acquisition-related customer relationships and brands 2,179
 (527) 1,652
Licensed technology and patents 2,932
 (1,406) 1,526
Identified intangible assets subject to amortization 14,722
 (4,954) 9,768
In-process research and development 1,497
 —
 1,497
Other intangible assets 571
 —
 571
Identified intangible assets not subject to amortization 2,068
 —
 2,068
Total identified intangible assets $16,790
 $(4,954) $11,836
  December 30, 2017
(In Millions) 
Gross
Assets
 
Accumulated
Amortization
 Net
Acquisition-related developed technology $8,912
 $(1,922) $6,990
Acquisition-related customer relationships and brands 2,195
 (342) 1,853
Licensed technology and patents 3,104
 (1,370) 1,734
Identified intangible assets subject to amortization 14,211
 (3,634) 10,577
In-process research and development 2,168
 —
 2,168
Identified intangible assets not subject to amortization 2,168
 —
 2,168
Total identified intangible assets $16,379
 $(3,634) $12,745
Identified intangible assets subject to amortization recorded for each period and their respective estimated weighted average useful lives were as follows:
  December 29, 2018 December 30, 2017
  
Gross
Assets
(In Millions)
 
Estimated Useful Life
(In Years)
 
Gross
Assets
(In Millions)
 
Estimated Useful Life
(In Years)
Acquisition-related developed technology $35
 7 $2,346
 9
Acquisition-related customer relationships and brands $—
 0 $777
 12
Licensed technology and patents $66
 6 $162
 7
Amortization expenses recorded for identified intangible assets in the consolidated statementsConsolidated Statements of incomeIncome for each period and the estimatedweighted average useful life ranges were as follows:
Years Ended
(In Millions)		 Location Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		 
Estimated
Useful Life Range
(In Years)
Acquisition-related developed technology Cost of sales $1,105
 $912
 $937
 5–11
Acquisition-related customer relationships and brands Amortization of acquisition-related intangibles 200
 177
 294
 6–12
Licensed technology and patents Cost of sales 260
 288
 293
 2–17
Total amortization expenses   $1,565
 $1,377
 $1,524
    
Years Ended (In Millions)LocationDec 25, 2021Dec 26, 2020Dec 28, 2019
Weighted Average Useful Life1
Developed technologyCost of sales$1,283 $1,211 $1,124 9 years
Customer relationships and brandsMarketing, general and administrative209 205 200 11 years
Licensed technology and patentsCost of sales347 341 298 13 years
Total amortization expenses$1,839 $1,757 $1,622 

1 Represents weighted average useful life in years of intangible assets during 2021.
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We expect future amortization expense for the next five years and thereafter to be as follows:
(In Millions) 2019 2020 2021 2022 2023
Acquisition-related developed technology $1,114
 $1,082
 $1,047
 $1,008
 $1,005
Acquisition-related customer relationships and brands 200
 199
 199
 177
 173
Licensed technology and patents 249
 218
 204
 196
 139
Total future amortization expenses $1,563
 $1,499
 $1,450
 $1,381
 $1,317
(In Millions)20222023202420252026ThereafterTotal
Future amortization expenses$1,854 $1,622 $1,188 $779 $598 $1,229 $7,270 
NOTE 14 :
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(In Millions)		 Dec 29,
2018		 Dec 30,
2017
Non-current deferred tax assets $1,122
 $840
Pre-payments for property, plant and equipment 1,507
 714
Loans receivable 479
 860
Other 1,313
 801
Total other long-term assets $4,421
 $3,215

NOTE 15Note 13 :BORROWINGSBorrowings
SHORT-TERM DEBTShort-Term Debt
Short-term debt, which primarily includes the current portion of long-term debt, was $4.6 billion as of December 25, 2021 and $2.5 billion as of December 26, 2020.

(In Millions)		 Dec 29,
2018		 Dec 30,
2017
Commercial paper and drafts payable $500
 $37
Current portion of long-term debt 761
 1,739
Total short-term debt $1,261
 $1,776
OurThe current portion of long-term debt includes our 2009 junior subordinated convertible debentures due 2039, as well as debt classified as short-termshort term based on contractualtime remaining until maturity.
We have an ongoing authorization from our Board of Directors to borrow up to $10.0 billion under our commercial paper program.





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LONG-TERM DEBT
  December 29, 2018 December 30, 2017
(In Millions) Effective Interest Rate Amount Amount
Floating-rate senior notes:      
   Three-month LIBOR plus 0.08%, due May 2020 2.29% $700
 $700
   Three-month LIBOR plus 0.35%, due May 2022 2.56% 800
 800
Fixed-rate senior notes:      
   2.50%, due November 2018 —% —
 600
   3.25%, due December 20191
 2.11% 177
 194
   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 3.67% 2,000
 2,000
   2.35%, due May 2022 2.67% 750
 750
   3.10%, due July 2022 3.47% 1,000
 1,000
   4.00%, due December 20221
 2.89% 389
 428
   2.70%, due December 2022 3.06% 1,500
 1,500
   4.10%, due November 2023 3.22% 400
 400
   2.88%, due May 2024 3.03% 1,250
 1,250
   2.70%, due June 2024 2.79% 600
 600
   3.70%, due July 2025 4.16% 2,250
 2,250
   2.60%, due May 2026 2.62% 1,000
 1,000
   3.15%, due May 2027 3.21% 1,000
 1,000
   4.00%, due December 2032 3.70% 750
 750
   4.80%, due October 2041 4.49% 802
 802
   4.25%, due December 2042 3.87% 567
 567
   4.90%, due July 2045 4.56% 772
 772
   4.70%, due December 2045 3.45% 915
 915
   4.10%, due May 2046 3.72% 1,250
 1,250
   4.10%, due May 2047 3.59% 1,000
 1,000
   4.10%, due August 2047 2.91% 640
 640
   3.73%, due December 2047 3.90% 1,967
 1,967
Oregon and Arizona bonds:      
   2.40% - 2.70%, due December 2035 - 2040 2.49% 423
 —
Junior subordinated convertible debentures:      
   3.25%, due August 20392
 3.42% 988
 2,000
Total senior notes and other borrowings   27,140
 28,385
   Unamortized premium/discount and issuance costs   (891) (1,357)
   Hedge accounting fair value adjustments   (390) (252)
Long-term debt   25,859
 26,776
   Current portion of long-term debt   (761) (1,739)
Total long-term debt   $25,098
 $25,037
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 18: 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 29, 2018 and December 30, 2017.
2
Effective interest rate for the year ended December 30, 2017 was 4.03%.


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Long-Term Debt
The fair value
Dec 25, 2021Dec 26, 2020
(In Millions)Effective Interest RateAmountAmount
Floating-rate senior note:
Three-month LIBOR plus 0.35%, due May 20220.55%$800 $800 
Fixed-rate senior notes:
1.70%, due May 2021—%— 500 
3.30%, due October 2021—%— 2,000 
2.35%, due May 20221.96%750 750 
3.10%, due July 20222.70%1,000 1,000 
4.00%, due December 20221
2.96%398 417 
2.70%, due December 20222.28%1,500 1,500 
4.10%, due November 20233.22%400 400 
2.88%, due May 20242.31%1,250 1,250 
2.70%, due June 20242.14%600 600 
3.40%, due March 20253.45%1,500 1,500 
3.70%, due July 20252.16%2,250 2,250 
2.60%, due May 20260.63%1,000 1,000 
3.75%, due March 20273.79%1,000 1,000 
3.15%, due May 20271.21%1,000 1,000 
1.60%, due August 20281.68%1,000 — 
2.45%, due November 20292.39%2,000 2,000 
3.90%, due March 20303.93%1,500 1,500 
2.00%, due August 20312.04%1,250 — 
4.00%, due December 20321.24%750 750 
4.60%, due March 20404.61%750 750 
2.80%, due August 20412.82%750 — 
4.80%, due October 20412.01%802 802 
4.25%, due December 20421.42%567 567 
4.90%, due July 20452.13%772 772 
4.10%, due May 20461.40%1,250 1,250 
4.10%, due May 20471.37%1,000 1,000 
4.10%, due August 20470.92%640 640 
3.73%, due December 20471.77%1,967 1,967 
3.25%, due November 20493.20%2,000 2,000 
4.75%, due March 20504.74%2,250 2,250 
3.05%, due August 20513.07%1,250 — 
3.10%, due February 20603.11%1,000 1,000 
4.95%, due March 20604.99%1,000 1,000 
3.20%, due August 20613.22%750 — 
Oregon and Arizona bonds:
2.40% - 2.70%, due December 2035 - 20402.49%423 423 
5.00%, due March 20492.13%138 138 
5.00%, due June 20492.15%438 438 
Total senior notes and other borrowings37,695 35,214 
Unamortized premium/discount and issuance costs(405)(378)
Hedge accounting fair value adjustments811 1,565 
Long-term debt38,101 36,401 
Current portion of long-term debt(4,591)(2,504)
Total long-term debt$33,510 $33,897 
1To 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 our convertible debentures is determined using discounted$396 million at December 25, 2021, which effectively converted these notes to US-dollar-denominated notes. For further discussion on derivatives in cash flow models with observable market inputs,hedging relationships, see "Note 16: Derivative Financial Instruments." Principal and takes into consideration variables suchunamortized discount/issuance costs for the Australian-dollar-denominated notes in the table above were calculated using foreign currency exchange rates as interest rate changes, comparable instruments, subordination discount, and credit-rating changes. As of December 29, 201825, 2021 and December 30, 2017, the fair value26, 2020.
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Table of short- and long-term debt (excluding commercial paper and drafts payable) was $27.1 billion and $29.4 billion, respectively. These liabilities are classified as Level 2 within the fair value hierarchy, based on the nature of the fair value inputs.Contents

Senior Notes
During 2017,In 2021, we issued a total of $7.7$5.0 billion aggregate principal amount of senior notes. Net proceeds from the offerings are being used for general corporate purposes, which may include refinancing outstanding debt, funding for working capital, and capital expenditures. During 2021, we repaid $500 million of our 1.70% senior notes that matured in May 2021 and $2.0 billion of our 3.30% senior notes that matured in October 2021.
In 2020, we issued a total of $10.3 billion aggregate principal amount of senior notes which excludes the private placement of $2.0and repaid $1.0 billion of our 1.85% senior notes issuedthat matured in December 2017, as discussed in the following paragraph. We used the net proceeds from the offerings of the notes for general corporate purposes, which included refinancing of outstanding debtMay 2020 and repurchase of shares$1.8 billion of our common stock. Additionally, we redeemed our $1.0 billion, 4.90%2.45% senior notes due August 2045.
In December 2017, we completed exchange and cash offers for our outstanding 4.80%that matured in July 2020. We also repaid $700 million in floating-rate senior notes due 2041, 4.25% senior notes due 2042, and 4.90% senior notes due 2045 (Old Notes). As a result of the exchange offer, we issuedthat matured in a private placement $2.0 billion principal amount of 3.73% senior notes due 2047 and paid $293 million cash in exchange for $1.9 billion aggregate principal amount of the Old Notes. As a result of the cash offer, we paid $518 million to repurchase $425 million aggregate principal amount and recognized a $93 million loss on the extinguishment of the Old Notes.May 2020.
Our floating-rate senior notes paynote pays interest quarterly and our fixed-rate senior notes pay interest semiannually. As of December 29, 2018 and December 30, 2017, the total principal amount of our fixed-rate senior notes that was converted to variable-rate indebtedness using interest rate swaps was $20.0 billion and $12.9 billion, respectively. We may redeem the fixed-rate notes prior to their maturity at our option at specified redemption prices and subject to certain restrictions. The obligations under the notes rank equally in right of payment with all of our other existing and future senior unsecured indebtedness and will effectively rank junior to all liabilities of our subsidiaries.
Oregon and Arizona BondsRevolving Credit Facility
During the third quarter of 2018, we remarketed $423 million principal of bonds issued by the Industrial Development Authority of the City of Chandler, Arizona (the Arizona bonds) and the State of Oregon Business Development Commission (the Oregon bonds). The bonds are our unsecured general obligations in accordance with loan agreementsIn 2021, we entered into with the Industrial Development Authoritya $5.0 billion variable-rate revolving credit facility that, if drawn, is expected to be used for general corporate purposes. The revolving credit facility matures in March 2026 and had no borrowings outstanding as of the City of Chandler, Arizona and the State of Oregon Business Development Commission. The bonds mature between 2035 and 2040 and carry interest rates of 2.40% - 2.70%. Each series of the Arizona bonds and the Oregon bonds is subject to mandatory tender in August 2023, at which time we can remarket the bonds as either fixed-rate bonds for a specified period, or as variable-rate bonds until another fixed-rate period is selected or their final maturity date.December 25, 2021.
Convertible Debentures
In 2009, we issued junior subordinatedthe 2009 Debentures, which were convertible, debentures due 2039 (2009 debentures), which paysubject to certain conditions, into shares of our common stock and paid a fixed rate of interest semiannually. In 2018,2020, we paid $2.4$1.1 billion in cash to satisfy conversion obligations for $1.0 billionsettle our remaining $372 million in principal, resulting in a cumulative loss of $260$109 million in interest and other, net and $1.6 billion$750 million as a reduction toin stockholders' equity related to the conversion feature.
The 2009 debentures have a contingent interest component that requires us to pay interest based on certain thresholds or for certain events, commencing on August 1, 2019. After such date, if the 10-day average trading price of $1,000 principal amount of the bond immediately preceding any six-month interest period is less than or equal to $650 or greater than or equal to $1,500, we are required to pay contingent 0.25% or 0.50% annual interest, respectively.
The 2009 debentures are convertible, subject to certain conditions. Holders can surrender the 2009 debentures for conversion if the closing price of Intel common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during the 30 consecutive trading-day period ending on the last trading day of the preceding fiscal quarter. We will settle any conversion of the 2009 debentures in cash up to the face value, and any amount in excess of face value will be settled in cash or stock at our option. On or after August 5, 2019, we can redeem, for cash, all or part of the 2009 debentures for the principal amount, plus any accrued and unpaid interest, if the closing price of Intel common stock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading-day period. In addition, if certain events occur in the future, the indenture governing the 2009 debentures provides that each holder of the debentures can, for a pre-defined period of time, require us to repurchase the holder’s debentures for the principal amount plus any accrued and unpaid interest. The 2009 debentures are subordinated in right of payment to any existing and future senior debt and to the other liabilities of our subsidiaries. We have concluded that the 2009 debentures are not conventional convertible debt instruments and that the embedded stock conversion options qualify as derivatives. In addition, we have concluded that the embedded conversion options would be classified in stockholders’ equity if they were freestanding derivative instruments and are not accounted for separately as derivative liabilities.

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During the fourth quarter of 2018, the closing stock price conversion right condition of the 2009 debentures continued to be met and the debentures will be convertible at the option of the holders during the first quarter of 2019. As a result, the $569 million carrying amount of the 2009 debentures was classified as short-term debt on our consolidated balance sheet as of December 29, 2018 ($1.1 billion as of December 30, 2017). The excess of the amount required to be settled in cash if converted over the carrying amount of the 2009 debentures of $419 million has been classified as temporary equity on our consolidated balance sheet as of December 29, 2018 ($866 million as of December 30, 2017). In future periods, if the closing stock price conversion right condition is no longer met, all outstanding 2009 debentures would be reclassified to long-term debt and the temporary equity would be reclassified to stockholders’ equity on our consolidated balance sheet.
  2009 Debentures
(In Millions, Except Per Share Amounts) Dec 29,
2018		 Dec 30,
2017
Outstanding principal $988
 $2,000
Unamortized discount1
 $419
 $866
Net debt carrying amount $569
 $1,134
Conversion rate (shares of common stock per $1,000 principal amount of debentures) 49.01
 48.37
Effective conversion price (per share of common stock) $20.40
 $20.68
1
The unamortized discounts for the 2009 debentures are amortized over the remaining life of the debt.
The conversion rate adjusts for certain events outlined in the indentures governing the 2009 debentures, such as quarterly dividend distributions in excess of $0.14 per share, but it does not adjust for accrued interest. In addition, the conversion rate will increase for a holder of the 2009 debentures who elects to convert the debentures in connection with certain share exchanges, mergers, or consolidations involving Intel.
Debt Maturities
Our aggregate debt maturities, excluding commercial paper and drafts payable, based on outstanding principal as of December 29, 2018,25, 2021, by year payable, wereare as follows:
(In Millions) 2019 2020 2021 2022 2023 2024 and thereafter Total
  $177
 $3,450
 $2,500
 $4,439
 $400
 $16,174
 $27,140
(In Millions)202220232024202520262027 and thereafterTotal
$4,586 $400 $1,850 $3,750 $1,000 $26,109 $37,695 
In the preceding table, the 2009 debentures are classified based on their stated maturity date, regardless of their classification on the consolidated balance sheet.


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NOTE 16Note 14 :FAIR VALUEFair Value
ASSETS AND LIABILITIES MEASURED AND RECORDED AT FAIR VALUE ON A RECURRING BASISAssets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
December 25, 2021December 26, 2020
Fair Value Measured and
Recorded at Reporting Date Using
TotalFair Value Measured and
Recorded at Reporting Date Using		Total
(In Millions)Level 1Level 2Level 3Level 1Level 2Level 3
Assets
Cash equivalents:
Corporate debt$— $65 $— $65 $—$50 $—$50 
Financial institution instruments1
1,216 763 — 1,979 2,781 636 —3,417 
Reverse repurchase
    agreements		— 1,595 — 1,595 —1,900 —1,900 
Short-term investments:
Corporate debt— 648 — 648 —428 —428 
Financial institution instruments1
— 1,243 — 1,243 —1,179 —1,179 
Government debt2
— 212 — 212 —685 —685 
Trading assets:
Corporate debt— 5,143 — 5,143 —3,815 —3,815 
Financial institution instruments1
154 3,729 — 3,883 131 2,847 —2,978 
Government debt2
— 12,457 — 12,457 —8,945 —8,945 
Other current assets:
Derivative assets80 576 — 656 48 644 —692 
Loans receivable3
— 152 — 152 —439 —439 
Marketable equity securities1,854 317 — 2,171 136 1,694 —1,830 
Other long-term investments:
Corporate debt— 576 — 576 —1,520 —1,520 
Financial institution instruments1
— 190 — 190 —257 —257 
Government debt2
50 24 — 74 —415 —415 
Other long-term assets:
Derivative assets— 772 7 779 —1,520 30 1,550 
Loans receivable3
— 57 — 57 —157 —157 
Total assets measured and recorded at fair value$3,354 $28,519 $7 $31,880 $3,096 $27,131 $30 $30,257 
Liabilities
Other accrued liabilities:
Derivative liabilities$4 $516 $— $520 $—$810 $—$810 
Other long-term liabilities:
Derivative liabilities— 9 — 9 —5 —5 
Total liabilities measured and recorded at fair value$4 $525 $— $529 $—$815 $—$815 
  December 29, 2018 December 30, 2017
  
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 $—
 $262
 $—
 $262
 $—
 $30
 $—
 $30
Financial institution instruments 1
 550
 183
 —
 733
 335
 640
 —
 975
Government debt 2
 —
 —
 —
 —
 —
 90
 —
 90
Reverse repurchase agreements —
 1,850
 —
 1,850
 —
 1,399
 —
 1,399
Short-term investments:                
Corporate debt —
 937
 —
 937
 —
 672
 3
 675
Financial institution instruments 1
 —
 1,423
 —
 1,423
 —
 1,009
 —
 1,009
Government debt 2
 —
 428
 —
 428
 —
 130
 —
 130
Trading assets:                
Asset-backed securities —
 —
 —
 —
 —
 2
 —
 2
Corporate debt —
 2,635
 —
 2,635
 —
 2,842
 —
 2,842
Financial institution instruments 1
 67
 1,273
 —
 1,340
 59
 1,064
 —
 1,123
Government debt 2
 —
 1,868
 —
 1,868
 30
 4,758
 —
 4,788
Other current assets:                
Derivative assets —
 180
 —
 180
 —
 279
 —
 279
Loans receivable —
 354
 —
 354
 —
 30
 —
 30
Marketable equity securities 1,440
 —
 —
 1,440
 4,148
 44
 —
 4,192
Other long-term investments:                
Corporate debt —
 1,843
 —
 1,843
 —
 1,576
 4
 1,580
Financial institution instruments 1
 —
 912
 —
 912
 —
 1,397
 —
 1,397
Government debt 2
 —
 633
 —
 633
 —
 735
 —
 735
Other long-term assets:                
Derivative assets —
 100
 —
 100
 —
 77
 7
 84
Loans receivable —
 229
 —
 229
 —
 610
 —
 610
Total assets measured and recorded at fair value $2,057
 $15,110
 $—
 $17,167
 $4,572
 $17,384
 $14
 $21,970
Liabilities                
Other accrued liabilities:                
Derivative liabilities $—
 $412
 $—
 $412
 $—
 $454
 $—
 $454
Other long-term liabilities:                
Derivative liabilities —
 415
 68
 483
 —
 297
 6
 303
Total liabilities measured and recorded at fair value $—
 $827
 $68
 $895
 $—
 $751
 $6
 $757
1
Level 1 investments consist of money market funds. Level 2 investments consist primarily of commercial paper, certificates of deposit, time deposits, and notes and bonds issued by financial institutions.
2
Level 1 investments consist primarily of U.S. Treasury securities. Level 2 investments consist primarily of U.S. agency notes and non-U.S. government debt.

1Level 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.

2Level 1 investments consist primarily of US Treasury securities. Level 2 investments in government debt consist primarily of non-US government debt, as well as marketable equity securities subject to security-specific restrictions.
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.
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ASSETS MEASURED AND RECORDED AT FAIR VALUE ON A NON-RECURRING BASISAssets Measured and Recorded at Fair Value on a Non-Recurring Basis
Our non-marketable equity securities, equity method investments, and certain non-financial assets, such as intangible assets and property, plant and equipment, are recorded at fair value only if an impairment or observable price adjustment is recognized in the current period. If an impairment or observable price adjustment is recognized on our non-marketable equity securities during the period, we classify these assets as Level 3 within the fair value hierarchy based on the nature of the fair value inputs.3.
We classifiedclassify non-marketable equity securities and non-marketable equity method investments as Level 3. Impairments recognized on these investments held as of December 29, 201825, 2021 were $416$138 million ($537266 million on investments held as of December 30, 201726, 2020 and $153$113 million on investments held as of December 31, 2016)28, 2019).
FINANCIAL INSTRUMENTS NOT RECORDED AT FAIR VALUE ON A RECURRING BASISFinancial Instruments Not Recorded at Fair Value on a Recurring Basis
Financial instruments not recorded at fair value on a recurring basis include non-marketable equity securities and equity method investments that have not been remeasured or impaired in the current period, grants receivable, loans receivable, reverse repurchase agreements, and our short-term and long-termissued debt.
Prior toWe classify the adoption of the new financial instrument standard, our non-marketable cost method investments were disclosed at fair value on a recurring basis. The carrying amount and fair value of our non-marketable cost method investments as of December 30, 2017 were $2.6 billion and $3.6 billion, respectively. These measures are classified as Level 3 within the fair value hierarchy based on the nature of the fair value inputs.
As of December 29, 2018, the aggregate carrying value of grants receivable loans receivable, and reverse repurchase agreements was $833 million (the aggregate carrying amount as of December 30, 2017 was $935 million).Level 2. The estimated fair value of these financial instruments approximates their carrying value. The aggregate carrying value and is categorizedof grants receivable as Level 2 within the fairof December 25, 2021 was $317 million (the aggregate carrying value hierarchy based on the nature of the fair value inputs.grants receivable as of December 26, 2020 was $139 million).
For information related toWe classify the fair value of our short-termissued debt (excluding commercial paper and long-term debt, see "Note 15: Borrowings."drafts payable) as Level 2. The fair value of these instruments was $41.5 billion as of December 25, 2021 ($40.9 billion as of December 26, 2020).
NOTE 17Note 15 :OTHER COMPREHENSIVE INCOME (LOSS)Other Comprehensive Income (Loss)
The changes in accumulated other comprehensive income (loss) by component and related tax effects for each period were as follows:
(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)

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The amounts reclassified out of accumulated other comprehensive income (loss) into the consolidated statements of income for each period were as follows:
    
Income Before Taxes Impact for Years Ended
(In Millions)
Comprehensive Income Components Location Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Unrealized holding gains (losses) on available-for-sale investments:        
  Gains (losses) on equity investments, net $—
 $3,433
 $530
    —
 3,433
 530
Unrealized holding gains (losses) on derivatives:        
Foreign currency contracts Cost of sales (16) (65) (65)
  Research and development 41
 45
 7
  Marketing, general and administrative 22
 7
 5
  Gains (losses) on equity investments, net —
 57
 11
  Interest and other, net (56) 25
 4
    (9) 69
 (38)
Amortization of pension and postretirement benefit components:        
Actuarial valuation and other pension expenses   (109) (103) (170)
    (109) (103) (170)
Translation adjustments and other Interest and other, net (8) (509) —
Total amounts reclassified out of accumulated other comprehensive income (loss)   $(126) $2,890
 $322
The amortization of pension and postretirement benefit components is included in the computation of net periodic benefit cost. For more information, see "Note 19: Retirement Benefit Plans."
(In Millions)Unrealized Holding Gains (Losses) on DerivativesActuarial Valuation and Other Pension ExpensesTranslation Adjustments and OtherTotal
December 29, 2018$(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, 201954 (1,382)48 (1,280)
Other comprehensive income (loss) before reclassifications806 (323)55 538 
Amounts reclassified out of accumulated other comprehensive income (loss)(8)89 (11)70 
Tax effects(121)51 (9)(79)
Other comprehensive income (loss)677 (183)35 529 
December 26, 2020731 (1,565)83 (751)
Other comprehensive income (loss) before reclassifications(434)476 (58)(16)
Amounts reclassified out of accumulated other comprehensive income (loss)(226)101 (19)(144)
Tax effects140 (126)17 31 
Other comprehensive income (loss)(520)451 (60)(129)
December 25, 2021$211 $(1,114)$23 $(880)
We estimate that we will reclassify approximately $202$8 million (before taxes) of net derivative losses included ingains from accumulated other comprehensive income (loss) into earnings within the next 12 months.
During the second quarter of 2017, we reclassified $507 million (before taxes) of currency translation adjustment losses included in accumulated other comprehensive income (loss) into earnings as a result of our divestiture of ISecG. For more information, see "Note 11: Acquisitions and Divestitures."

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NOTE 18Note 16 :DERIVATIVE FINANCIAL INSTRUMENTSDerivative Financial Instruments
VOLUME OF DERIVATIVE ACTIVITYVolume of Derivative Activity
Total gross notional amounts for outstanding derivatives (recorded at fair value) at the end of each period were as follows:
(In Millions) Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		(In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Foreign currency contracts $19,223
 $19,958
 $17,960
Foreign currency contracts$38,024 $31,209 $23,981 
Interest rate contracts 22,447
 16,823
 14,228
Interest rate contracts15,209 14,461 14,302 
Other 1,356
 1,636
 1,340
Other2,517 2,026 1,753 
Total $43,026

$38,417

$33,528
Total$55,750 $47,696 $40,036 
During 2018, 2017,2021 and 2016,2020, we entereddid not enter into $7.1 billion, $4.8 billion, and $4.7 billion, respectively, ofany new pay-variable, receive-fixed interest rate swaps to hedge against changes in the fair value attributable to the benchmark interest rates related to our outstanding senior notes. These hedges were designatedThe total notional amount of outstanding pay-variable, receive-fixed interest rate swaps was $12.0 billion as fair value hedges.of December 25, 2021 and $12.0 billion as of December 26, 2020. In 2019, we unwound $7.1 billion of these swaps, resulting in a $111 million gain to be amortized over the remaining life of the debt.
FAIR VALUE OF DERIVATIVE INSTRUMENTS IN THE CONSOLIDATED BALANCE SHEETSFair Value of Derivative Instruments in the Consolidated Balance Sheets
December 25, 2021December 26, 2020
(In Millions)
Assets1
Liabilities2
Assets1
Liabilities2
Derivatives designated as hedging instruments:
Foreign currency contracts3
$80 $163 $551 $2 
Interest rate contracts774 — 1,498 — 
Total derivatives designated as hedging instruments854 163 2,049 2 
Derivatives not designated as hedging instruments:
Foreign currency contracts3
475 297 142 685 
Interest rate contracts26 65 3 128 
Equity contracts80 4 48 — 
Total derivatives not designated as hedging instruments581 366 193 813 
Total derivatives$1,435 $529 $2,242 $815 
  December 29, 2018 December 30, 2017
(In Millions) 
Assets1
 
Liabilities2
 
Assets1
 
Liabilities2
Derivatives designated as hedging instruments        
Foreign currency contracts3
 $44
 $244
 $283
 $32
Interest rate contracts 84
 474
 1
 254
Total derivatives designated as hedging instruments 128

718

284

286
Derivatives not designated as hedging instruments        
Foreign currency contracts3
 132
 155
 52
 447
Interest rate contracts 20
 22
 18
 24
Other —
 —
 9
 —
Total derivatives not designated as hedging instruments 152

177

79

471
Total derivatives $280

$895

$363

$757
1
Derivative assets are recorded as other assets, current and non-current.
2
Derivative liabilities are recorded as other liabilities, current and non-current.
3
The majority of these instruments mature within 12 months.

1Derivative assets are recorded as other assets, current and long-term.

2Derivative liabilities are recorded as other liabilities, current and long-term.

3The majority of these instruments mature within 12 months.
Amounts Offset in the Consolidated Balance Sheets
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AMOUNTS OFFSET IN THE CONSOLIDATED BALANCE SHEETS
The gross amounts of our derivative instruments and reverse repurchase agreementsAgreements subject to master netting arrangements with various counterparties, and cash and non-cash collateral posted under such agreements at the end of each period were as follows:
December 25, 2021
Gross Amounts Not Offset in the Balance Sheet
(In Millions)Gross Amounts RecognizedGross Amounts Offset in the Balance SheetNet Amounts Presented in the Balance SheetFinancial InstrumentsCash and Non-Cash Collateral Received or PledgedNet Amount
Assets:
Derivative assets subject to master netting arrangements$1,427 $— $1,427 $(332)$(986)$109 
Reverse repurchase agreements1,595 — 1,595 — (1,595)— 
Total assets3,022 — 3,022 (332)(2,581)109 
Liabilities:
Derivative liabilities subject to master netting arrangements392 — 392 (332)(60)— 
Total liabilities$392 $— $392 $(332)$(60)$— 
  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
  December 30, 2017
        Gross Amounts Not Offset in the Balance Sheet  
(In Millions) Gross Amounts Recognized Gross Amounts Offset in the Balance Sheet Net Amounts Presented in the Balance Sheet Financial Instruments Cash and Non-Cash Collateral Received or Pledged Net Amount
Assets:            
Derivative assets subject to master netting arrangements $350
 $—
 $350
 $(206) $(130) $14
Reverse repurchase agreements 1,649
 —
 1,649
 —
 (1,649) —
Total assets 1,999

—

1,999

(206)
(1,779)
14
Liabilities:            
Derivative liabilities subject to master netting arrangements 745
 —
 745
 (206) (504) 35
Total liabilities $745

$—

$745

$(206)
$(504)
$35
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December 26, 2020
Gross Amounts Not Offset in the Balance Sheet
(In Millions)Gross Amounts RecognizedGross Amounts Offset in the Balance SheetNet Amounts Presented in the Balance SheetFinancial InstrumentsCash and Non-Cash Collateral Received or PledgedNet Amount
Assets:
Derivative assets subject to master netting arrangements$2,235 $— $2,235 $(264)$(1,904)$67 
Reverse repurchase agreements1,900 — 1,900 — (1,900)— 
Total assets4,135 — 4,135 (264)(3,804)67 
Liabilities:
Derivative liabilities subject to master netting arrangements711 — 711 (264)(447)— 
Total liabilities$711 $— $711 $(264)$(447)$— 
We obtain and secure available collateral from counterparties against obligations, including securities lending transactions and reverse repurchase agreements, when we deem it appropriate.


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DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPSDerivatives in Cash Flow Hedging Relationships
The before-tax net gains or losses attributed to the effective portion of cash flow hedges recognized in other comprehensive income (loss), were $310$434 million net losses in 20182021 ($605806 million net gains in 20172020 and $26$11 million net losses in 2016)2019). Substantially all of our cash flow hedges are foreign currency contracts for all periods presented.
Hedge ineffectiveness and amountsAmounts excluded from effectiveness testing were insignificant during all periods presented.
For information on the unrealized holding gains (losses) on derivatives reclassified out of accumulated other comprehensive income into the consolidated statementsConsolidated Statements of income,Income, see "Note 17:15: Other Comprehensive Income (Loss)."
DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPSDerivatives in Fair Value Hedging Relationships
The effects of derivative instruments designated as fair value hedges, recognized in interest and other, net for each period were as follows:
Gains (Losses) Recognized in Statement of Income on Derivatives
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 28, 2019
Interest rate contracts$(723)$817 $1,071 
Hedged items723 (817)(1,071)
Total$— $— $— 
  
Gains (Losses)
Recognized in Statement of Income on
Derivatives
Years Ended
(In Millions)		 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Interest rate contracts $(138) $(68) $(171)
Hedged items 138
 68
 171
Total $—
 $—
 $—
There was no ineffectiveness duringall periods presented in the preceding table.
The amounts recorded on the consolidated balance sheetConsolidated Balance Sheet related to cumulative basis adjustments for fair value hedges for each period were as follows:
Line Item in the Consolidated Balance Sheet in Which the Hedged Item Is IncludedCarrying Amount of the Hedged Item Assets/(Liabilities)Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities)
Years Ended (In Millions)Dec 25, 2021Dec 26, 2020Dec 25, 2021Dec 26, 2020
Long-term debt$(12,772)$(13,495)$(775)$(1,498)
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 29,
2018		 Dec 30,
2017		 Dec 29,
2018		 Dec 30,
2017
Long-term debt $(19,622) $(12,653) $390
 $252
As
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Table of December 29, 2018 and December 30, 2017, the total notional amount of pay variable/receive fixed-interest rate swaps was $20.0 billion and $12.9 billion, respectively.Contents
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Derivatives Not Designated as Hedging Instruments
The effects of derivative instruments not designated as hedging instruments on the consolidated statementsConsolidated Statements of incomeIncome for each period were as follows:
Years Ended (In Millions)Location of Gains (Losses)
Recognized in Income on Derivatives		Dec 25, 2021Dec 26, 2020Dec 28, 2019
Foreign currency contractsInterest and other, net$677 $(572)$204 
Interest rate contractsInterest and other, net31 (90)(32)
OtherVarious360 284 297 
Total$1,068 $(378)$469 
Years Ended
(In Millions)		 
Location of Gains (Losses)
Recognized in Income on Derivatives
 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016
Foreign currency contracts Interest and other, net $372
 $(547) $388
Interest rate contracts Interest and other, net 9
 9
 8
Other Various (147) 203
 113
Total $234

$(335)
$509


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NOTE 19 :RETIREMENT BENEFIT PLANSRetirement Benefit Plans
DEFINED CONTRIBUTION PLANSDefined Contribution Plans
We provide tax-qualified defined contribution plans for the benefit of eligible employees, former employees, and retirees in the U.S.US and certain other countries. The plans are designed to provide employees with an accumulation of funds for retirement on a tax-deferred basis. For the benefit of eligible U.S.US employees, we also provide an unfunded non-tax-qualified supplemental deferred compensation plan for certain highly compensated employees.
We expensed $372$444 million in 2021 and $398 million in 2020 for discretionarymatching contributions tobased on the U.S.amount of employee contributions under the US qualified defined contribution and non-qualified deferred compensation plans in 2018 ($346plans. Prior to 2020, the contributions were discretionary and we expensed $379 million in 2017 and $326 million in 2016).2019.
U.S. POSTRETIREMENT MEDICAL BENEFITS PLANUS Retiree Medical Plan
Upon retirement, we provide certain benefits to eligible U.S.US employees who were hired prior to 2014 under the U.S. PostretirementUS Retiree Medical Benefits Plan. The benefits can be used to pay all or a portion of the cost to purchase eligible coverage in a medical plan.
As of December 29, 201825, 2021 and December 30, 2017,26, 2020, the projected benefit obligation was $547$682 million and $567$741 million, respectively, which used the discount rate of 4.4%2.8% and 3.8%, respectively.2.4%. The December 29, 201825, 2021 and December 30, 201726, 2020 corresponding fair value of plan assets was $476$669 million and $563 million, respectively.$600 million.
The investment strategy for U.S. PostretirementUS Retiree Medical Benefits Plan assets is to invest primarily in liquid assets, due to the level of expected future benefit payments. The assets are invested solely in a tax-aware global equity portfolio, which isand fixed-income long credit portfolios. Both portfolios are actively managed by an external investment manager.managers. The tax-aware global equity portfolio is composed of a diversified mix of equities in developed countries. The tax-aware fixed-income long credit portfolio is composed of domestic securities. The allocation to each asset class will fluctuate with market conditions, such as volatility and liquidity concerns, and will typically be rebalanced when outside the target ranges, which are 65% equity and 35% fixed income investments. As of December 29, 2018, substantially all25, 2021, the majority of the U.S. PostretirementUS Retiree Medical Benefits Plan assets were invested in exchange-traded equity securities and were measured at fair value using Level 1 inputs. The remaining US Retiree Medical Plan assets were invested in fixed income investments and were measured at fair value using Level 2 inputs.

The estimated benefit payments for this plan over the next 10 years are as follows:
(In Millions) 2019 2020 2021 2022 2023 2024-2028(In Millions)202220232024202520262027-2031
Postretirement Medical Benefits $28
 $30
 $31
 $32
 $33
 $181
Postretirement Medical Benefits$37 $38 $39 $41 $42 $219 
PENSION BENEFIT PLANSPension Benefit Plans
We provide defined-benefit pension plans in certain countries, most significantly Ireland, the U.S., Ireland, Germany,US, Israel, and Israel.Germany. The substantial majority of the plans' benefits have been frozenfrozen.
Benefit Obligation and beginning on January 1, 2020, future benefit accrualsPlan Assets for the U.S. plan will be frozen to remaining eligible employees, reducing our projected benefit obligation by $150 million at December 29, 2018.Pension Benefit Plans



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BENEFIT OBLIGATION AND PLAN ASSETS FOR PENSION BENEFIT PLANS
The vested benefit obligation for a defined-benefit pension plan is the actuarial present value of the vested benefits to which the employee is currently entitled based on the employee's expected date of separation or retirement.
 
(In Millions)		 Dec 29,
2018		 Dec 30,
2017
Changes in projected benefit obligation:    
Beginning projected benefit obligation $3,842
 $3,640
Service cost 65
 84
Interest cost 113
 117
Actuarial (gain) loss (204) 24
Currency exchange rate changes (121) 281
Plan curtailments (150) (162)
Plan settlements (74) (101)
Other (38) (41)
Ending projected benefit obligation1
 3,433
 3,842
     
Changes in fair value of plan assets:    
Beginning fair value of plan assets 2,287
 1,696
Actual return on plan assets (38) 136
Employer contributions 480
 471
Currency exchange rate changes (62) 124
Plan settlements (74) (101)
Other (42) (39)
Ending fair value of plan assets2
 2,551
 2,287
     
Net funded status $882
 $1,555
     
Amounts recognized in the consolidated balance sheets    
Other long-term assets $244
 $—
Other long-term liabilities $1,126
 $1,555
Accumulated other comprehensive loss (income), before tax3
 $1,038
 $1,257
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The split between U.S. and non-U.S. in the projected benefit obligation was approximately 35% and 65%, respectively, as of December 29, 2018 and 40% and 60%, respectively, as of December 30, 2017.Financial StatementsNotes to Consolidated Financial Statements101
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(In Millions)		Dec 25, 2021Dec 26, 2020
Changes in projected benefit obligation:
Beginning projected benefit obligation$4,929 $4,284 
Service cost54 49 
Interest cost91 97 
Actuarial (gain) loss(284)373 
Currency exchange rate changes(150)261 
Plan settlements(126)(79)
Other(58)(56)
Ending projected benefit obligation1
4,456 4,929 
Changes in fair value of plan assets:
Beginning fair value of plan assets2,878 2,654 
Actual return on plan assets145 203 
Currency exchange rate changes(63)113
Plan settlements(126)(79)
Other(17)(13)
Ending fair value of plan assets2
2,817 2,878 
Net unfunded status$1,639 $2,051 
Amounts recognized in the Consolidated Balance Sheets
Other long-term liabilities$1,639 $2,051 
Accumulated other comprehensive loss (income), before tax3
$1,445 $1,911 
Accumulated benefit obligation4
$4,086 $4,429 
1    The projected benefit obligation was approximately 30% in the US and 70% outside of the US as of December 25, 2021 and approximately 35% in the US and 65% outside of the US as of December 26, 2020.
2    The fair value of plan assets was approximately 50% in the US and 50% outside of the US as of December 25, 2021 and approximately 55% in the US and 45% outside of the US as of December 26, 2020.
3    The accumulated other comprehensive loss (income), before tax, was approximately 30% in the US and 70% outside of the US as of December 25, 2021 and approximately 35% in the US and 65% outside of the US as of December 26, 2020.
4    All plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets for all periods presented.
The split between the U.S. and non-U.S. in the fair value of plan assets was approximately 55% and 45%, respectively, as of December 29, 2018 and 50% and 50%, respectively, as of December 30, 2017.
3
The split between U.S. and non-U.S. in the accumulated other comprehensive loss (income), before tax, was approximately 35% and 65%, respectively, as of December 29, 2018 and 40% and 60%, respectively, as of December 30, 2017.
Changes in actuarial gains and losses in the projected benefit obligation are generally driven by discount rate movement. We use the corridor approach to amortize actuarial gains and losses. Under this approach, net actuarial gains or losses in excess of 10% of the larger of the projected benefit obligation or the fair value of plan assets are amortized on a straight-line basis.
As of December 29, 2018, the accumulated benefit obligations were $1.2 billion and $2.0 billionAssumptions for the U.S. plan and non-U.S. plans, respectively. In 2018, the U.S. plan was in the net asset position and all non-U.S. plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets. As of December 30, 2017, the accumulated benefit obligations were $1.3 billion and $2.1 billion for the U.S. plan and non-U.S. plans, respectively, and all plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets.Pension Benefit Plans

Dec 25, 2021Dec 26, 2020
Weighted average actuarial assumptions used to determine benefit obligations
Discount rate2.2 %1.9 %
Rate of compensation increase3.2 %3.2 %
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(In Millions)		 Dec 29,
2018		 Dec 30,
2017
Plans with accumulated benefit obligation in excess of plan assets    
Accumulated benefit obligation $1,965
 $3,423
Plan assets $1,106
 $2,287
     
Plans with projected benefit obligation in excess of plan assets    
Projected benefit obligation $2,232
 $3,842
Plan assets $1,106
 $2,287
ASSUMPTIONS FOR PENSION BENEFIT PLANS
  Dec 29,
2018		 Dec 30,
2017
Weighted average actuarial assumptions used to determine benefit obligations    
Discount rate 3.3% 3.0%
Rate of compensation increase 3.5% 3.3%
 2018 2017 2016202120202019
Weighted average actuarial assumptions used to determine costs      Weighted average actuarial assumptions used to determine costs
Discount rate 3.0% 3.2% 3.3%Discount rate1.9 %2.3 %3.4 %
Expected long-term rate of return on plan assets 4.7% 4.6% 5.5%Expected long-term rate of return on plan assets2.7 %3.3 %4.7 %
Rate of compensation increase 3.3% 3.6% 3.8%Rate of compensation increase3.2 %3.2 %3.5 %
We establish the discount rate for each pension plan by analyzing current market long-term bond rates and matching the bond maturity with the average duration of the pension liabilities.
We establish the long-term expected rate of return by developing a forward-looking, long-term return assumption for each pension fund asset class, taking into account factors such as the expected real return for the specific asset class and inflation. A single, long-term rate of return is then calculated as the weighted average of the target asset allocation percentages and the long-term return assumption for each asset class.
FUNDING
Policy.
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Funding
Our practice is to fund the various pension plans in amounts sufficient to meet the minimum requirements of applicable local laws and regulations. Additional funding may be provided as deemed appropriate. Funding for the U.S. PostretirementUS Retiree Medical Benefits Plan is discretionary under applicable laws and regulations; additional funding may be provided as deemed appropriate.
Funding Status.On a worldwide basis, our pension and postretirement benefitretiree medical plans were 76%68% funded as of December 29, 2018.25, 2021. The U.S. Intel MinimumUS Pension Plan, which accounts for 30%28% of the worldwide pension and postretirementretiree medical benefit obligations, was 120%99% funded. Funded status is not indicative of our ability to pay ongoing pension benefits or of our obligation to fund retirement trusts. Required pension funding for U.S.US retirement plans is determined in accordance with the Employee Retirement Income Security Act (ERISA),ERISA, which sets required minimum contributions. Cumulative company funding to the U.S. Intel MinimumUS Pension Plan currently exceeds the minimum ERISA funding requirements.

NET PERIODIC BENEFIT COSTNet Periodic Benefit Cost
The net periodic benefit cost for pension benefits and U.S. postretirementUS retiree medical benefits was $197$162 million in 20182021 ($243164 million in 20172020 and $415$135 million in 2016)2019). The decrease in the net periodic pension benefit cost in 2017 compared to 2016 was primarily attributed to plan settlements and remeasurement in conjunction with our 2016 Restructuring Program. See "Note 8: Restructuring and Other Charges."

Pension Plan Assets

December 25, 2021Dec 26, 2020
Fair Value Measured at Reporting Date Using
(In Millions)Level 1Level 2Level 3TotalTotal
Equity securities$— $342 $— $342 $320 
Fixed income— 122 20 142 135 
Assets measured by fair value hierarchy$— $464 $20 $484 $455 
Assets measured at net asset value2,311 2,401 
Cash and cash equivalents22 22 
Total pension plan assets at fair value$2,817 $2,878 
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PENSION PLAN ASSETS
  December 29, 2018 Dec 30,
2017
  Fair Value Measured at Reporting Date Using    
(In Millions) Level 1 Level 2 Level 3 Total Total
Equity securities $—
 $261
 $—
 $261
 $473
Fixed income —
 93
 18
 111
 465
Other investments —
 —
 —
 —
 19
Assets measured by fair value hierarchy $—
 $354
 $18
 $372
 $957
Assets measured at net asset value       2,138
 1,208
Cash and cash equivalents       41
 122
Total pension plan assets at fair value       $2,551
 $2,287
U.S.US Plan Assets
The investment strategy for U.S. Intel MinimumUS Pension Plan assets is to maximize risk-adjusted returns,manage the funded status volatility, taking into consideration the investment horizon and expected volatility to help ensure that sufficient assets are available to pay pension benefits as they come due. The allocation to each asset class will fluctuate with market conditions, such as volatility and liquidity concerns, and will typically be rebalanced when outside the target ranges, which were 45%are 90% fixed income 30% hedge funds, and 25%10% equity investments in 2018.investments. During 2018,2021, the U.S. Intel MinimumUS Pension Plan assets were invested in collective investment trust funds, which are measured at net asset value.
Non-U.S.Non-US Plan Assets
The investments of the non-U.S.non-US plans are managed by insurance companies, pension funds, or third-party trustees, consistent with regulations or market practice of the country where the assets are invested. The investment manager makes investment decisions within the guidelines set by Intel or local regulations. Investments managed by qualified insurance companies or pension funds under standard contracts follow local regulations, and we are not actively involved in their investment strategies. For the assets that we have discretion to set investment guidelines, the assets are invested in developed country equity investments and fixed-income investments, either through index funds or direct investment. In general, the investment strategy is designed to accumulate a diversified portfolio among markets, asset classes, or individual securities to reduce market risk and to help ensure that the pension assets are available to pay benefits as they come due. The target allocation of the non-U.S.non-US plan assets that we have control over was approximately 45% fixed income, 35% equity, and 20% hedge fund investments in 2018.2021.
The equity investments in the non-U.S.non-US plan assets are invested in a diversified mix of equities of developed countries, including the U.S.,US, and emerging markets throughout the world.
We have control over the investment strategy related to the majority of the assets measured at net asset value, which are invested in hedge funds, bond index funds, and equity index funds.
ESTIMATED FUTURE BENEFIT PAYMENTS FOR PENSION BENEFIT PLANSEstimated Future Benefit Payments for Pension Benefit Plans
Estimated benefit payments over the next 10 years are as follows:
(In Millions) 2019 2020 2021 2022 2023 2024-2028
Pension benefits $117
 $111
 $113
 $115
 $115
 $603
(In Millions)202220232024202520262027-2031
Pension benefits$147 $144 $141 $142 $146 $765 
NOTE 20
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Note 18 :EMPLOYEE EQUITY INCENTIVE PLANSEmployee Equity Incentive Plans
Our equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests. Our plans include our 2006 Equity Incentive Plan (2006 Plan) and our 2006 Employee Stock Purchase Plan (2006 ESPP).ESPP.
Under the 2006 Plan, 786866 million shares of common stock have been authorized for issuance as equity awards to employees and non-employee directors through June 2020.2023. As of December 29, 2018, 18525, 2021, 128 million shares of common stock remained available for future grants.

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Under the 2006 Plan, we grant RSUs and previously granted stock options. We grant RSUs with a service condition as well as RSUs with both a market condition, performance condition, and a service condition, which we call outperformance stock units (OSUs), and have beenPSUs. PSUs are granted to a group of senior officers employees, and non-employee directors.employees. For OSUsPSUs granted in 2018,2021, the number of shares of our common stock to be received at vesting will range from 0% to 200% of the target grant amount, equally based on total stockholder return (TSR)two metrics: our three-year cumulative non-GAAP EPS growth relative to a target rate and TSR of our common stock measured against the benchmark TSR of the S&P 500 IT Sector Index over a three-year period. TSR is a measure of stock price appreciation plus any dividends paid in this performance period. As of December 29, 2018, 1125, 2021, 15 million OSUsPSUs were outstanding. These OSUs generallyPSUs vest three years and one month from the grant date, and OSUs granted prior to 2017 accrue dividend equivalents.date. Other RSU awards and option awards generally vest over four years from the grant date. Stock options generally expire seven10 years from the date of grant.
SHARE-BASED COMPENSATIONShare-Based Compensation
Share-based compensation recognized in 20182021 was $1.5$2.0 billion ($1.41.9 billion in 20172020 and $1.4$1.7 billion in 2016)2019). During 2018,2021, the tax benefit that we realized for the tax deduction from share-based awards totaled $399$377 million ($520380 million in 20172020 and $616$359 million in 2016)2019).
We estimate the fair value of RSUs with a service condition or performance condition using the value of our common stock on the date of grant, reduced by the present value of dividends expected to be paid on our shares of common stock prior to vesting. We estimate the fair value of OSUsRSUs with a market condition using a Monte Carlo simulation model onas of the date of grant. We base expected volatility for OSUs ongrant using historical volatility. 
We based the weighted average estimated value of RSU and OSU grants on the weightedRestricted Stock Units
Weighted average assumptions for each periodused in estimating grant values were as follows:
 RSUs and OSUs
 Dec 29,
2018		 Dec 30,
2017		 Dec 31,
2016		Dec 25, 2021Dec 26, 2020Dec 28, 2019
Estimated values $48.95
 $35.30
 $29.76
Estimated values$50.82 $54.82 $48.06 
Risk-free interest rate 2.4% 1.4% 0.9%Risk-free interest rate0.2 %0.4 %2.3 %
Dividend yield 2.4% 2.9% 3.3%Dividend yield2.6 %2.3 %2.5 %
Volatility 22% 23% 23%Volatility37 %30 %25 %
RESTRICTED STOCK UNIT AWARDSSummary of activities:
RSU activity in 2018 was as follows:
Number of
Stock Units
(In Millions)
Weighted Average Grant-Date Fair Value
 
Number of
RSUs
(In Millions)
 
Weighted
Average
Grant-Date
Fair Value
December 30, 2017 100.4
 $32.36
December 26, 2020December 26, 202082.7 $50.14 
Granted 36.4
 $48.95
Granted76.8 $50.82 
Vested (39.5) $31.64
Vested(30.2)$47.64 
Forfeited (7.4) $36.23
Forfeited(11.3)$49.48 
December 29, 2018 89.9
 $39.07
Expected to vest as of December 29, 201885.3
 $38.92
December 25, 2021December 25, 2021118.0 $51.29 
Expected to vestExpected to vest105.9 $51.47 
The aggregate fair value of awards that vested in 20182021 was $2.0$1.7 billion ($1.61.9 billion in 20172020 and $1.6$1.9 billion in 2016)2019), which represents the market value of our common stock on the date that the RSUs vested. The grant-date fair value of awards that vested in 20182021 was $1.2$1.4 billion ($1.11.3 billion in 20172020 and $1.3 billion in 2016)2019). The number of RSUs vested includes shares of common stock that we withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. RSUs that are expected to vest are net of estimated future forfeitures.
As of December 29, 2018,25, 2021, unrecognized compensation costs related to RSUs granted under our equity incentive plans were $2.1$3.8 billion. We expect to recognize those costs over a weighted average period of 1.31.5 years.
STOCK PURCHASE PLANStock Purchase Plan
The 2006 ESPP allows eligible employees to purchase shares of our common stock at 85% of the value of our common stock on specific dates. Under the 2006 ESPP, 373523 million shares of common stock are authorized for issuance through August 2021.2026. As of December 29, 2018, 13725, 2021, 227 million shares of common stock remained available for issuance.
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Employees purchased 13.722 million shares of common stock in 20182021 for $468$925 million under the 2006 ESPP (14.5(21 million shares of common stock for $432$876 million in 20172020 and 16.517 million shares of common stock for $415$688 million in 2016)2019). As of December 29, 2018,25, 2021, unrecognized share-based compensation costs related to rights to acquire shares of common stock under the 2006 ESPP totaled $20$48 million. We expect to recognize those costs over a period of approximately two months.

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NOTE 21 :COMMITMENTS AND CONTINGENCIESCommitments and Contingencies
COMMITMENTS
Leases
PortionsWe recognized operating leased assets in other long-term assets of our real property$549 million and equipment are undercorresponding accrued liabilities of $180 million, and other long-term liabilities of $295 million as of December 25, 2021. Our operating leases that expire at various dates through 2028. Rentalhave remaining terms of 1 to 14 years and may include options to extend the leases for up to 37 years. The weighted average remaining lease term was 3.8 years, and the weighted average discount rate was 2.5% as of December 25, 2021 for our operating leases.
Operating lease expense was $231$798 million in 20182021 ($264416 million in 20172020 and $282$185 million in 2016).2019), including $620 million in variable lease expense in 2021.
(In Millions) 2019 2020 2021 2022 2023 
2024
and Thereafter
 Total
Minimum rental commitments under all non-cancelable leases1
 $229
 $181
 $133
 $101
 $70
 $121
 $835
1
Includes leases with initial termIn 2021, we signed finance leases for supplier capacity extending over approximately eight years. The leases will commence upon start of supplier production expected in 2023 with prepayments totaling approximately $980 million in 2022 and 2023. These prepayments will be recognized in excess of one year.
Other Commitments
Commitments for construction or purchase of property, plant and equipment upon payment.
Discounted and undiscounted lease payments under non-cancelable leases as of December 25, 2021, excluding non-lease components, were as follows:
(In Millions)20222023202420252026 ThereafterTotal
Operating lease payments$183 $139 $79 $55 $16 $27 $499 
Finance lease payments$451 $529 $980 
Present value of lease payments$1,455 
Commitments
Commitments for capital expenditures totaled $9.0$27.0 billion as of December 29, 201825, 2021 ($12.18.6 billion as of December 30, 2017)26, 2020), a substantial majority of which will be due within the next 12 months. Other purchase obligations and commitments totaled approximately $3.2$12.4 billion as of December 29, 201825, 2021 (approximately $2.7$2.6 billion as of December 30, 2017)26, 2020). Other purchase obligations and commitments include payments due under supply agreements and various types of licenses and agreements to purchase goods or services. Contractual obligations for purchases of goods or services as well as payments duerelate to agreements that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities, fixed, minimum, or variable price provisions, and the approximate timing of the transaction. For obligations with cancellation provisions, amounts are limited to the non-cancelable portion or the minimum cancellation fee under non-contingent funding obligations. In addition, we have various contractual commitments with IMFT. For further information on these contractual commitments, see "Note 10: Investments."the agreement.
LEGAL PROCEEDINGSLegal Proceedings
We are aregularly party to various legalongoing claims, litigation, and other proceedings, including those noted in this section. AlthoughIn the first quarter of 2021, we accrued a charge of $2.2 billion related to litigation involving VLSI, described below. Excluding this charge, management at present believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, results of operations, cash flows, or overall trends,trends; however, legal proceedings and related government investigations are subject to inherent uncertainties, and unfavorable rulings, excessive verdicts, or other events could occur. Unfavorable resolutions could include substantial monetary damages.damages, fines, or penalties. Certain of these outstanding matters include speculative, substantial or indeterminate monetary awards. In addition, in matters for which injunctive relief or other conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices, or requiring other remedies. An unfavorable outcome may result in a material adverse impact on our business, results of operations, financial position, and overall trends. We might also conclude that settling one or more such matters is in the best interests of our stockholders, employees, and customers, and any such settlement could include substantial payments. Except as specifically described below, we have not concluded that settlement of any of the legal proceedings noted in this section is appropriate at this time.
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European Commission Competition Matter
In 2001, the European Commission (EC)EC commenced an investigation regarding claims by Advanced Micro Devices, Inc. (AMD) that we used unfair business practices to persuade customers to buy our microprocessors. We received numerous requests for information and documents from the EC and we responded to each of those requests. The EC issued a Statement of Objections in July 2007 and held a hearing on that Statement in March 2008. The EC issued a Supplemental Statement of Objections in July 2008. In May 2009, the EC issued a decision finding that we had violated Article 82 of the EC Treaty and Article 54 of the European Economic Area Agreement. In general, the EC found that we violated Article 82 (later renumbered as Article 102 by a new treaty) by offering alleged "conditional rebates and payments" that required our customers to purchase all or most of their x86 microprocessors from us. The EC also found that we violated Article 82 by making alleged "payments to prevent sales of specific rival products." The EC imposed a fine in the amount of €1.1 billion ($1.4 billion as of May 2009), which we subsequently paid during the third quarter of 2009, and ordered us to "immediately bring to an end the infringement referred to in" the EC decision.
The EC decision contained no specific direction on whether or how we should modify our business practices. Instead, the decision stated that we should "cease and desist" from further conduct that, in the EC's opinion, would violate applicable law. We took steps, which are subject to the EC's ongoing review, to comply with that decision pending appeal. We had discussions with the EC to better understand the decision and to explain changes to our business practices.

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We appealed the EC decision to the Court of First Instance (which has been renamed the General Court) in July 2009. The hearing of our appeal took place in July 2012. In June 2014, the General Court rejected our appeal in its entirety. In August 2014, we filed an appeal with the European Court of Justice. In November 2014, Intervener Association for Competitive Technologies filed comments in support of Intel’sIntel's grounds of appeal. The EC and interveners filed briefs in November 2014, we filed a reply in February 2015, and the EC filed a rejoinder in April 2015. The Court of Justice held oral argument in June 2016. In October 2016, Advocate General Wahl, an advisor to the Court of Justice, issued a non-binding advisory opinion that favored Intel on a number of grounds. The Court of Justice issued its decision in September 2017, setting aside the judgment of the General Court and sending the case back to the General Court to examine whether the rebates at issue were capable of restricting competition. The General Court has appointed a panel of five judges to consider our appeal of the EC’sEC's 2009 decision in light of the Court of Justice’sJustice's clarifications of the law. In November 2017, the parties filed initial “Observations”"Observations" about the Court of Justice’sJustice's decision and the appeal and were invited by the General Court to offer supplemental comments to each other’s “Observations,”other's "Observations," which the parties submitted in March 2018. Responses to other questions posed by the General Court were filed in May and June 2018. We are now awaiting notice as to whether theThe General Court will hold a management conference before it conducts oral argument at some future date. Pending the final decision in this matter, the fine paid by Intel has been placed by the EC in commercial bank accounts where it accrues interest.
McAfee, Inc. Shareholder Litigation
On August 19, 2010, we announced that we had agreed to acquire all of the common stock of McAfee, Inc. (McAfee) for $48.00 per share. Four McAfee shareholders filed putative class-action lawsuits in Santa Clara County, California Superior Court challenging the proposed transaction. The cases were ordered consolidated in September 2010. Plaintiffs filed an amended complaint that named former McAfee board members, McAfee, and Intel as defendants, and alleged that the McAfee board members breached their fiduciary duties and that McAfee and Intel aided and abetted those breaches of duty. The complaint requested rescission of the merger agreement, such other equitable relief as the court may deem proper, and an award of damages in an unspecified amount. In June 2012, the plaintiffs’ damages expert asserted that the value of a McAfee share for the purposes of assessing damages should be $62.08.
In January 2012, the court certified the action as a class action, appointed the Central Pension Laborers’ Fund to act as the class representative, and scheduled trial to begin in January 2013. In March 2012, defendants filed a petition with the California Court of Appeal for a writ of mandate to reverse the class certification order; the petition was denied in June 2012. In March 2012, at defendants’ request, the court held that plaintiffs were not entitled to a jury trial and ordered a bench trial. In April 2012, plaintiffs filed a petition with the California Court of Appeal for a writ of mandate to reverse that order, which the court of appeal denied in July 2012. In August 2012, defendants filed a motion for summary judgment. The trial court granted that motion in November 2012, and entered final judgment in the case in February 2013. In April 2013, plaintiffs appealed the final judgment. The California Court of Appeal heard oral argument in October 2017,March 2020, and in November 2017, affirmedon January 26, 2022 issued a decision annulling the judgmentEC’s finding against Intel regarding rebates as to McAfee's nine outside directors, reversedwell as the judgment as to former McAfee director and chief executive officer David DeWalt, Intel, and McAfee, and affirmed the trial court's ruling that the plaintiffs are not entitled to a jury trial. At a June 2018 case management conference following remand, the Superior Court set an October hearing date for any additional summary judgment motions that may be filed, and set trial to begin in December 2018. In July 2018, plaintiffs filed a motion for leave to amend the complaint, which the court denied in September 2018. Also in July 2018, McAfee and Intel filed a motion for summary judgmentfine on the aiding and abetting claims asserted against them; in October 2018, the court granted the motion as to McAfee and denied the motion as to Intel.
In late October 2018, the parties agreed in principal to settle the case for an aggregate payment by defendants of $11.7 million. Intel’s contribution to the settlement will be immaterial to its financial statements. The parties will seek court approval Any appeal of the settlement after they have completed documentingGeneral Court’s decision must be brought before the agreement.Court of Justice by early April 2022.
Litigation Related to Security Vulnerabilities
In June 2017, a Google research team notified us and other companies that it had identified security vulnerabilities (now commonly referred to as “Spectre”"Spectre" and “Meltdown”"Meltdown") that affect many types of microprocessors, including our products. As is standard when findings like these are presented, we worked together with other companies in the industry to verify the research and develop and validate software and firmware updates for impacted technologies. On January 3, 2018, information on the security vulnerabilities was publicly reported, before software and firmware updates to address the vulnerabilities were made widely available.
Numerous lawsuits have been filed against Intel and, in certain cases, our current and former executives and directors, in U.S.US federal and state courts and in certain courts in other countries relating to the Spectre and Meltdown security vulnerabilities, as well as another variantother variants of these vulnerabilities (“Foreshadow”) that hashave since been identified.

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As of January 31, 2019, 4825, 2022, consumer class action lawsuits relating to the above class of security vulnerabilities publicly disclosed since 2018 were pending in the United States, Canada, and three securities class action lawsuits have been filed.Israel. The consumer class action plaintiffs, who purport to represent various classes of end userspurchasers of our products, generally claim to have been harmed by Intel's actions and/or omissions in connection with the security vulnerabilities and assert a variety of common law and statutory claims seeking monetary damages and equitable relief. OfIn the consumerUnited States, numerous individual class action lawsuits, 44 have beensuits filed in the U.S., two of which have been dismissed; two have been filedvarious jurisdictions were consolidated in Canada; and two have been filed in Israel. In April 2018 the U.S. Judicial Panel on Multidistrict Litigation ordered the U.S. consumer class action lawsuits consolidated for all pretrial proceedings in the U.S.US District Court for the District of Oregon. Intel filed aIn March 2020, the court granted Intel's motion to dismiss the complaint in that consolidated action but granted plaintiffs leave to amend. In March 2021, the court granted Intel's motion to dismiss the amended complaint but granted plaintiffs leave to further amend in October 2018, andpart. Plaintiffs filed a hearing on that motion has been scheduled for February 2019.further amended complaint in May 2021, which Intel moved to dismiss in July 2021. In theCanada, in one case pending in the Superior Court of Justice of Ontario, an initial status conference has not yet been scheduled. In thea second case pending in the Superior Court of Justice of Quebec, a stay of the court entered an ordercase was in October 2018, staying that caseeffect until December 2021, and the parties' joint request for one year.a further stay to May 2022 is pending with the court. In Israel, bothtwo consumer class action lawsuits were filed in the District Court of Haifa. The District Court denied the parties' joint request for a stay inplaintiff voluntarily dismissed the first case.lawsuit in July 2021. Intel filed a motion to stay the second case pending resolution of the consolidated proceeding in the US, and a hearing on that motion has been scheduled for April 2019. In the securities class action litigation, the lead securities class action plaintiffs, who purport to represent classes of acquirers of Intel stock between October 27, 2017 and January 9, 2018, generally allege that Intel and certain officers violated securities laws by making statements about Intel's products that were revealed to be false or misleading by the disclosure of the security vulnerabilities. The securities class actions have been consolidated and are pending in the U.S. District Court for the Northern District of California. Defendants moved to dismiss those actions on various grounds; a hearing on that motion was scheduled for November 2018, but was taken off calendar by the court and has not been rescheduled.2022. Additional lawsuits and claims may be asserted on behalf of customers and shareholders seeking monetary damages or other related relief. We dispute the pending claims described above and intend to defend thethose lawsuits vigorously. Given the procedural posture and the nature of thesethose cases, including that the pending proceedings are in the early stages, that alleged damages have not been specified, that uncertainty exists as to the likelihood of a class or classes being certified or the ultimate size of any class or classes if certified, and that there are significant factual and legal issues to be resolved, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from thesethose matters.
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In addition to these lawsuits, Intel stockholders have filed sevenmultiple shareholder derivative lawsuits since January 2018 against certain current and former members of our Board of Directors and certain current and former officers, alleging that the defendants breached their duties to Intel in connection with the disclosure of the security vulnerabilities and the failure to take action in relation to alleged insider trading. The complaints seeksought to recover damages from the defendants on behalf of Intel. ThreeSome of the derivative actions were filed in the U.S.US District Court for the Northern District of California and have beenwere consolidated, and the other fourothers were filed in the Superior Court of the State of California in San Mateo County and have beenwere consolidated. In August 2018, theThe federal court granted defendants' motion to dismiss the consolidated complaintin August 2018 on the ground that plaintiffs failed to plead facts sufficient to show they were excused from making a pre-lawsuit demand on the Board. The federal court granted plaintiffs leave to amend their complaint, but in September 2018, plaintiffs instead requested thatsubsequently dismissed the action be dismissed. The federal court ordered the case dismissed without prejudicecases in January 2019. In August 2018, the2019 at plaintiffs' request. The California Superior Court grantedentered judgment in defendants' motionfavor in August 2020 after granting defendants' motions to dismiss theplaintiffs' consolidated complaint in the action on the ground that plaintiffs failedand three successive amended complaints, all for failure to plead facts sufficient to show theyplaintiffs were excused from making a pre-lawsuit demand on the Board. Plaintiffs filed a notice of appeal of the California court's judgment in October 2020. In January 2021, another Intel stockholder filed a derivative lawsuit in the Superior Court in San Mateo County against certain current and former officers and members of our Board of Directors. The statelawsuit asserts claims similar to those dismissed in August 2020, except that it alleges that the stockholder made a pre-lawsuit demand on our Board of Directors and that the demand was wrongfully refused. In May 2021, the court granted defendants' motion to stay the action pending the outcome of any litigation plaintiff may choose to file in Delaware where Intel's bylaws require such claims to be filed.
Litigation Related to 7nm Product Delay Announcement
Starting in July 2020, five securities class action lawsuits were filed in the United States District Court for the Northern District of California against Intel and certain current and former officers based on Intel’s July 2020 announcement of 7nm product delays. The plaintiffs, leavewho purport to amend theirrepresent classes of acquirers of Intel stock between October 2019 and July 2020, generally allege that the defendants violated securities laws by making false or misleading statements about the timeline for 7nm products in light of subsequently announced delays. In October 2020, the court consolidated the lawsuits and appointed lead plaintiffs, and in January 2021 the lead plaintiffs filed a consolidated complaint. Defendants moved to dismiss the consolidated complaint in March 2021. We dispute the claims described above and intend to defend the lawsuits vigorously. Given the procedural posture and the partiesnature of those cases, including that the pending proceedings are in the early stages, that alleged damages have stipulatednot been specified, that plaintiffs must fileuncertainty exists as to the likelihood of a class or classes being certified or the ultimate size of any amendedclass or classes if certified, and that there are significant factual and legal issues to be resolved, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from those matters. In July 2021, Intel introduced a new process node naming structure, and the 7nm process is now Intel 4.
Litigation Related to Patent and IP Claims
We have had IP infringement lawsuits filed against us, including but not limited to those discussed below. Most involve claims that certain of our products, services, and technologies infringe others' IP rights. Adverse results in these lawsuits may include awards of substantial fines and penalties, costly royalty or licensing agreements, or orders preventing us from offering certain features, functionalities, products, or services. As a result, we may have to change our business practices, and develop non-infringing products or technologies, which could result in a loss of revenues for us and otherwise harm our business. In addition, certain agreements with our customers require us to indemnify them against certain IP infringement claims, which can increase our costs as a result of defending such claims, and may require that we pay significant damages, accept product returns, or supply our customers with non-infringing products if there were an adverse ruling in any such claims. In addition, our customers and partners may discontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could result in loss of revenues and adversely affect our business.
Institute of Microelectronics, Chinese Academy of Sciences v. Intel China, Ltd., et al.
In February 2018, the Institute of Microelectronics of the Chinese Academy of Sciences (IMECAS) sued Intel China, Ltd., Dell China, Ltd. (Dell), and Beijing Jingdong Century Information Technology, Ltd. (JD) for patent infringement in the Beijing Higher People's Court. IMECAS alleges that Intel's Core series processors infringe Chinese patent CN 102956457 ('457 Patent). The complaint bydemands an injunction and damages of at least RMB 200 million plus the cost of litigation. Intel is indemnifying Dell and JD. The Beijing Higher People's Court held a final trial hearing in September 2021. No ruling has been issued. In March 2018, Intel filed an invalidation request on the '457 patent with the China National Intellectual Property Administration (CNIPA). The CNIPA held an oral hearing in September 2018 and in February 2019.


2019 upheld the validity of the challenged claims. Intel filed a complaint in April 2019 with the Beijing Intellectual Property (IP) Court challenging the February 2019 CNIPA ruling. The Beijing IP Court held oral arguments in July and October 2021 and in November 2021 affirmed the CNIPA ruling. In December 2021, Intel filed an appeal with the Supreme People's Court challenging the Beijing IP Court's affirmance of the CNIPA ruling. In January 2020, Intel filed a second invalidation request on the '457 patent with the CNIPA, for which the CNIPA heard oral argument in July 2020 and in November 2020 held the challenged apparatus claims invalid. IMECAS filed a complaint in February 2021 with the Beijing IP Court challenging the November 2020 CNIPA ruling. In December 2020, Intel filed a third invalidation request on the '457 patent with the CNIPA. The CNIPA held an oral hearing in June 2021 and in September 2021 upheld the validity of the challenged claims. Intel filed a complaint in December 2021 with the Beijing IP Court challenging the September 2021 CNIPA ruling. In September 2018 and March 2019, Intel filed petitions with the US Patent and Trademark Office (USPTO) requesting institution of inter partes review (IPR) of US Patent No. 9,070,719, the US counterpart to the '457 patent. The USPTO denied institution of Intel's petitions in March and October 2019, respectively. In April 2019, Intel filed a request for rehearing and a petition for a Precedential Opinion Panel (POP) in the USPTO to challenge the denial of its first IPR petition, and in November 2019 Intel filed a request for rehearing on the second IPR petition. In January 2020, the USPTO denied the POP petition on the first IPR petition. In June 2020, the Patent Trial and Appeal Board (PTAB) denied Intel's rehearing requests on both petitions.
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In October 2019, IMECAS filed second and third lawsuits in the Beijing IP Court, alleging infringement of Chinese Patent No. CN 102386226 ('226 Patent) based on the manufacturing and sale of Intel® Core i3 microprocessors. Defendants in the second case are Lenovo (Beijing) Co., Ltd. (Lenovo) and Beijing Jiayun Huitong Technology Development Co. Ltd. (BJHT). Defendants in the third case are Intel Corp., Intel China Co., Ltd., the Intel China Beijing Branch, Beijing Digital China Co., Ltd. (Digital China), and JD. The complaint in the second lawsuit demands an injunction plus litigation costs and reserves the right to claim damages in unspecified amounts. Intel is indemnifying Lenovo in the second lawsuit. The Beijing IP Court held a trial hearing in the second lawsuit in November 2021, but no ruling has been issued. The complaint in the third lawsuit demands an injunction plus litigation costs and claims damages of RMB 10 million. Intel China's jurisdictional challenge in the third lawsuit was denied in June 2021 by the Beijing IP Court and in November 2021 by the Supreme People's Court. A trial hearing in the third lawsuit was held in January 2022, but no ruling has been issued. In July 2020, Intel and Lenovo filed invalidation requests on the '226 patent with the CNIPA. The CNIPA heard oral arguments in December 2020, during which IMECAS proposed amendments to two claims. In April 2021, the CNIPA upheld the validity of the challenged and amended claims on both invalidation requests. Intel and Lenovo filed complaints in July 2021 with the Beijing IP Court challenging the April 2021 CNIPA rulings; the Beijing IP Court held oral arguments in October 2021.
Given the procedural posture and the nature of these cases, the unspecified nature and extent of damages claimed by IMECAS, and uncertainty regarding the availability of injunctive relief under applicable law, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, arising from these matters. We dispute IMECAS's claims and intend to vigorously defend against them.
VLSI Technology LLC v. Intel
In October 2017, VLSI filed a complaint against Intel in the US District Court for the Northern District of California alleging infringement of eight patents acquired from NXP Semiconductors, N.V. (NXP). The patents, which originated at Freescale Semiconductor, Inc. and NXP B.V., are US Patent Nos. 7,268,588; 7,675,806; 7,706,207; 7,709,303; 8,004,922; 8,020,014; 8,268,672; and 8,566,836. VLSI accuses various FPGA and processor products of infringement. VLSI estimated its damages to be at least $5.5 billion, and its complaint further sought enhanced damages, future royalties, attorneys' fees, costs, and interest. In May, June, September, and October 2018, Intel filed IPR petitions challenging the patentability of certain claims in all eight of the patents in-suit. The PTAB instituted review of six patents and denied institution on two patents. As a result of the institution decisions, the parties stipulated to stay the District Court action in March 2019. In December 2019 and February 2020, the PTAB found all claims of the '588 and '303 patents, and some claims of the '922 patent, to be unpatentable. The PTAB found the challenged claims of the '014, '672 and '207 patents to be patentable. Intel appealed the PTAB’s decision as to ‘014, ‘672 and ‘207 patents. The Federal Circuit affirmed the PTAB’s decision as to the ‘672 and ‘207 patents, but reversed and remanded as to the ‘014 patent. Intel moved for a continuation of the stay in March 2020 pending the appeal. In June 2020, the District Court issued an order continuing the stay through August 2021. The court lifted the stay in September 2021 and scheduled a trial for March 2024.
In June 2018, VLSI filed a second suit against Intel, in US District Court for the District of Delaware, alleging infringement by various Intel processors of five additional patents acquired from NXP: US Patent Nos. 6,212,663; 7,246,027; 7,247,552; 7,523,331; and 8,081,026. VLSI accused Intel of willful infringement and seeks an injunction or, in the alternative, ongoing royalties, enhanced damages, attorneys' fees and costs, and interest. In March 2019, the District Court dismissed VLSI's claims for willful infringement as to all the patents-in-suit except the '027 patent, and also dismissed VLSI's allegations of indirect infringement as to the '633, '331, and '026 patents. In June 2019, Intel filed IPR petitions challenging the patentability of certain claims in all five patents-in-suit. In January 2020, VLSI said that it was no longer asserting any claims of the '633 patent. In January and February 2020, the PTAB instituted review of the '552, '633, '331 and '026 patents, but declined to institute review of the '027 patent. As a result, the District Court stayed the case as to the '026 and '552 patents but allowed the case to proceed on the '027 and '331 patents. In January 2021, the PTAB invalidated certain asserted claims of the '026 patent, and in February the PTAB invalidated all asserted claims of the '552 patent. Both parties filed notices of appeal regarding the PTAB's decision as to the '026 patent in March 2021, and in April 2021, VLSI filed a notice of appeal of the PTAB's decision as to the '552 patent. The case remains stayed as to both of those patents. For the '027 and '331 patents, VLSI is seeking damages of approximately $4.13 billion plus enhanced damages for the '027 patent. Intel is filing summary judgment motions and challenges to expert witnesses in accordance with the court's January 2022 deadline.
In March 2019, VLSI filed a third suit against Intel, also in US District Court for the District of Delaware, alleging infringement of six more patents acquired from NXP: US Patent Nos. 6,366,522; 6,663,187; 7,292,485; 7,606,983; 7,725,759; and 7,793,025. In April 2019, VLSI voluntarily dismissed this Delaware case without prejudice. In April 2019, VLSI filed three new infringement suits against Intel in the US District Court for the Western District of Texas (WDTX) accusing various Intel processors of infringement. The three suits collectively assert the same six patents from the voluntarily dismissed Delaware case plus two additional patents acquired from NXP, US Patent Nos. 7,523,373 and 8,156,357. VLSI accuses Intel of willful infringement and seeks an injunction or, in the alternative, ongoing royalties, enhanced damages, attorneys' fees and costs, and interest. In the first Texas case, VLSI asserted the '373 and '759 patents (in December 2020, the court granted Intel summary judgment of non-infringement on the '357 patent, which had also been assertedin the first Texas case). That case went to trial in February 2021, and the jury awarded a “lump sum” to VLSI of $1.5 billion for literal infringement of the ‘373 patent and $675 million for infringement under the doctrine of equivalents of the ‘759 patent. The jury found that Intel had not willfully infringed either patent. Intel has challenged the verdict with post-trial motions, including filing in May 2021 a motion for a new trial and a motion for judgment as a matter of law that the ‘373 and ‘759 patents are not infringed and the ‘759 patent is invalid. The court denied the motion for new trial in August 2021, but other post-trial motions, including the motion for judgment as a matter of law, remain pending. If the court does not vacate the verdict, Intel will challenge it on appeal.
The second Texas case went to trial in April 2021, and the jury found that Intel does not infringe the ‘522 and ‘187 patents. VLSI had sought approximately $3.0 billion for alleged infringement of those patents, plus enhanced damages for willful infringement. The court has not yet entered a judgment following the first or second trials in Texas.
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The third Texas case has been postponed and is not currently set for trial. In that case, VLSI seeks approximately $2.2 billion to $2.4 billion for alleged infringement of the ‘983, ‘025 and ‘485 patents, plus enhanced damages for willful infringement. In October and November 2019 and in February 2020, Intel filed IPR petitions on certain asserted claims across six of the patents-in-suit in WDTX. Between May and October 2020, the PTAB denied all of these petitions on a discretionary basis and without reviewing the merits. Intel requested a rehearing, as well as review from the POP, as to all petitions. All requests for POP review and rehearing were denied. Intel filed notices of appeal regarding the discretionary denials for all petitions in February and March of 2021. The Federal Circuit dismissed the appeals in May 2021 for lack of jurisdiction. The Federal Circuit denied Intel's petition for hearing en banc in August 2021. In December 2021, Intel petitioned the Supreme Court to hear its appeal as to whether the Federal Circuit has jurisdiction to review the PTAB’s discretionary denials of Intel’s IPRs.
In May 2019, VLSI filed a case in Shenzhen Intermediate People’s Court against Intel, Intel (China) Co., Ltd., Intel Trading (Shanghai) Co., Ltd., and Intel Products (Chengdu) Co., Ltd. VLSI asserts Chinese Patent 201410094015.9, accusing certain Intel Core processors of infringement. VLSI requests an injunction as well as RMB 1 million in damages and RMB 300 thousand in expenses. Defendants filed an invalidation petition in October 2019 with the CNIPA, which held a hearing in September 2021. In May 2020, defendants filed a motion to stay the trial court proceedings pending a determination on invalidity. The court held the first evidentiary hearing in November 2020 and the second in July 2021. The court also held trial proceedings in the hearing in July 2021 and concluded that further trial proceedings were needed but indicated those would be stayed pending the outcome of defendants’ invalidity challenge at the CNIPA. In July 2021, VLSI dismissed its case, but refiled it in August 2021. In November 2021, Intel moved for a stay of the August 2021 action pending a ruling on invalidity. The court has not yet ruled on that motion.
In May 2019, VLSI filed a second case in Shanghai Intellectual Property Court against Intel (China) Co., Ltd., Intel Trading (Shanghai) Co., Ltd., and Intel Products (Chengdu) Co., Ltd. VLSI asserts Chinese Patent 201080024173.7. VLSI accuses certain Intel Core processors and seeks an injunction, as well as RMB 1 million in damages and RMB 300 thousand in expenses. Defendants filed with the CNIPA an invalidation petition in October 2019 and the CNIPA held a hearing in September 2021, but has not yet issued a decision. In June 2020, defendants filed a motion to stay the trial court proceedings pending a determination on invalidity. The court held its first evidentiary hearing in September 2020. The court held a second evidentiary hearing in December 2020, and a trial the same month. At trial, VLSI dropped its monetary damages claim, but still requested expenses (RMB 300 thousand) and an injunction. The court has not yet issued a decision following the trial. Rather, the court stayed the case in December 2020 pending a determination on invalidity by the CNIPA.
In November 2019, Intel, along with Apple Inc., filed a complaint against Fortress Investment Group LLC, Fortress Credit Co. LLC, Uniloc 2017 LLC, Uniloc USA, Inc., Uniloc Luxembourg S.A.R.L., VLSI, INVT SPE LLC, Inventergy Global, Inc., DSS Technology Management, Inc., IXI IP, LLC, and Seven Networks, LLC. Plaintiffs allege violations of Section 1 of the Sherman Act by certain defendants, Section 7 of the Clayton Act by certain defendants, and California Business and Professions Code section 17200 by all defendants based on defendants' unlawful aggregation of patents. In 2020 and 2021, the court twice dismissed plaintiffs' complaint with leave to amend. In December 2020, the court granted a joint motion by Apple and Seven Networks to dismiss with prejudice Apple’s claims against Seven Networks. Plaintiffs filed a second amended complaint in March 2021. Defendants moved to dismiss the Second Amended Complaint in May 2021. Apple withdrew from the case and dismissed its claims in June 2021. The court heard defendants’ motion to dismiss the Second Amended Complaint in September 2021, and dismissed Intel’s claims with prejudice that same month, entering judgment in favor of defendants. Intel filed a notice of appeal in December 2021.
In June 2020, affiliates controlled by Fortress Investment Group, which also controls VLSI, acquired Finjan Holdings, Inc. Intel had signed a "Settlement, Release and Patent License Agreement" with Finjan in 2012, acquiring a license to the patents of Finjan and its affiliates, current or future, through a capture period of November 20, 2022. The agreement also contains covenants wherein Finjan agrees to cause its affiliates to comply with the agreement. As such, Intel maintains that it now has a license to the patents of VLSI, which has become a Finjan affiliate, and that Finjan must cause VLSI to dismiss its suits against Intel. In August 2020, Intel started dispute resolution proceedings under the agreement. As a part of this dispute resolution process, Intel and Finjan held a mediation in December 2020, but failed to resolve their differences. Intel filed suit to enforce its rights under the License Agreement with Finjan in January 2021 in Delaware Chancery Court. In March 2021, defendants filed motions to dismiss the Chancery Court proceedings. The court heard those motions in May 2021, and dismissed all of Intel’s claims—except the breach of contract claim—with prejudice in September 2021 for lack of jurisdiction because, the court reasoned, Intel’s license defense has been raised in the other US suits between Intel and VLSI and could be adjudicated in one of those actions. The court stayed Intel’s breach of contract claim pending a determination on whether Intel is licensed to VLSI’s patents. In September 2020, Intel filed motions to stay the Texas, Delaware, and Shanghai matters pending resolution of its dispute with Finjan. In November 2020, Intel filed a motion to stay the Shenzhen matter pending resolution of its dispute with Finjan. In November 2020, the Delaware court denied Intel's motion to stay. The other stay motions remain pending. Finally, Intel filed a motion to amend its answer in the Texas matters to add a license defense in November 2020, and filed a motion to amend its answer in the Delaware matter to add a license defense in February 2021. The Texas court has not yet ruled on Intel’s motion to amend, but the Delaware court granted Intel’s motion in July 2021.
In June 2021, OpenSky Industries LLC (OpenSky) requested IPR of certain claims of the ‘373 and ‘759 patents, including the ones a jury said Intel infringes. Both petitions copied Intel’s earlier petitions, and used the expert declarations previously submitted by Intel. Another entity named Patent Quality Assurance LLC (PQA) also petitioned for IPR of certain claims of the ’373 patent, including ones a jury said Intel infringes. PQA also largely copied Intel’s petition, but added a challenge to an additional claim and included newly signed declarations from Intel’s experts. In December 2021, the PTAB instituted OpenSky’s petition on the ‘759 patent, but declined to institute on the ‘373 patent. In December 2021, Intel filed a motion to join OpenSky’s ‘759 IPR. A decision on PQA’s IPR petition is expected in January 2022.
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After consideration of the verdicts in the WDTX cases and the additional pending lawsuits filed by VLSI, Intel accrued a charge of $2.2 billion in the first quarter of 2021. We dispute VLSI's claims and intend to vigorously defend against them.

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Key Terms
We use terms throughout our document that are specific to Intel or that are abbreviations that may not be commonly known or used. Below is a list of these terms used in our document.
TermDefinition
2006 Plan2006 Equity Incentive Plan
2006 ESPP2006 Employee Stock Purchase Plan
2009 Debentures3.25% junior subordinated convertible debentures due 2039
5GThe fifth-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
ADASAdvanced driver-assistance systems
Adjacent productsAll of our non-platform products for CCG, DCG, and IOTG, such as modem, Ethernet and silicon photonics, as well as Mobileye, NSG, and PSG products. Combined with our platform products, adjacent products form comprehensive platform solutions to meet customer needs
AIArtificial intelligence
ASICApplication-specific integrated circuit
ASPAverage selling price
AVAutonomous vehicle
CAGRCompound annual growth rate
CCGClient Computing Group operating segment
CDPA nonprofit organization that runs a global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts
CODMChief operating decision maker
COVID-19The infectious disease caused by the most recently discovered coronavirus (aka SARS-CoV-2), which was declared a global pandemic by the World Health Organization
CPUProcessor or central processing unit
CXLCompute Express Link; an open standard for high-speed CPU-to-device and CPU-to-memory connections
DCGData Center Group operating segment
eASICAn Intel line of structured ASICs that are an intermediary technology between FPGAs and standard-cell ASICs
ECEuropean Commission
Edge computing or intelligent edgePlacing resources to move, store, and process data closer to where data is generated and consumed
EEO-1EEO-1 Component 1 report; a mandatory annual data collection that requires employers meeting certain criteria to submit demographic workforce data, including data by race/ethnicity, sex and job categories.
EMIBEmbedded multi-die interconnect bridge, a form of "2.5D" packaging technology developed by Intel that enables high-density interconnect of heterogeneous chips
ERISAEmployee Retirement Income Security Act
EUNCAPEuropean New Car Assessment Programme
EVElectric vehicle
EUVExtreme ultraviolet lithography
Exchange ActSecurities Exchange Act of 1934
Form 10-KAnnual Report on Form 10-K
FoverosIntel's high-performance, three-dimensional stacked chip packaging technology
FPGAField-programmable gate array
GPUGraphics processing unit
GSRThe EU-General Safety Regulation for motor vehicles
IDMIntegrated device manufacturer, a semiconductor company that both designs and builds chips
IFSIntel Foundry Services
IMECASInstitute of Microelectronics, Chinese Academy of Sciences
IMRSInternet of Things Market Ready Solutions
Internet of ThingsThe Internet of Things market in which we sell our IOTG and Mobileye products
I/OInput/output
IOTGInternet of Things Group operating segment
IPIntellectual property
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IPO
FINANCIAL INFORMATION BY QUARTER (UNAUDITED)Initial public offering
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 $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
2017 for Quarter Ended
(In Millions, Except Per Share Amounts)		 December 30 September 30 July 1 April 1
Net revenue $17,053
 $16,149
 $14,763
 $14,796
Gross margin1
 $10,778
 $10,064
 $9,096
 $9,160
Net income (loss)2
 $(687) $4,516
 $2,808
 $2,964
Earnings per share - Basic $(0.15) $0.96
 $0.60
 $0.63
Earnings per share - Diluted $(0.15) $0.94
 $0.58
 $0.61
Dividends per share of common stock:        
Declared $—
 $0.5450
 $—
 $0.5325
Paid $0.2725
 $0.2725
 $0.2725
 $0.2600
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 the quarterly periods in 2017 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.

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IPUInfrastructure Processing Unit, a programmable networking device designed to enable cloud and communication service providers to reduce overhead and free up performance for CPUs
L1Level 1 of autonomous driving; most functions are controlled by a human driver; certain functions (parking assist, acceleration, and limited steering) can be done automatically by the vehicle
L2Level 2 of autonomous driving; the system controls both steering and acceleration using information about the driving environment, 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+ of autonomous driving; the system controls both steering and acceleration using a multi-camera sensor suite and/or high-definition maps to enhance and solidify L2 capabilities
L4Level 4 of autonomous driving; 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, no driver intervention is required at all.
MaaSMobility-as-a-Service
MD&AManagement's Discussion & Analysis
MG&AMarketing, general and administrative
NANDNAND flash memory
NICNetwork interface controller
nmNanometer
NSGNon-Volatile Memory Solutions Group operating segment
ODMOriginal design manufacturer
OEMOriginal equipment manufacturer
Platform productsA microprocessor (CPU) and chipset, a stand-alone SoC, or a multichip package, based on Intel architecture. Platform products are primarily used in solutions sold through the CCG, DCG, and IOTG segments
PLDProgrammable 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
PRQProduct release qualification, which is the milestone when costs to manufacture a product are included in inventory valuation
PSGProgrammable Solutions Group operating segment
PSUPerformance stock unit
QLCQuad-level cell
RAMP-CRapid Assured Microelectronics Prototypes-Commercial, a program from the US Department of Defense to facilitate the use of a domestic commercial foundry infrastructure
R&DResearch and development
RDFVReadily determinable fair value
REMRoad Experience Management
RSURestricted stock unit
SDSSelf-driving system
SECUS Securities and Exchange Commission
SoCA System-on-a-Chip, which integrates most of the components of a computer or other electronic system into a single silicon chip. We offer a range of SoC platform products in CCG, DCG, and IOTG
SSDSolid-state drive
TAMTotal addressable market
Tax ReformUS Tax Cuts and Jobs Act
TCFDTask Force on Climate-Related Financial Disclosures
TLCTriple-level cell
TSRTotal stockholder return
US GAAPUS Generally Accepted Accounting Principles
US Pension PlanUS Intel Minimum Pension Plan
US Retiree Medical PlanUS Postretirement Medical Benefits Plan
VPUVision processing unit
xPUA term for processors that are designed for one of four major computing architectures: CPU, GPU, accelerators, and FPGA
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On July 26, 2021, we provided an update on our manufacturing process and packaging technology roadmaps. As part of this update, we introduced a new naming structure for our manufacturing process nodes, which includes the name changes summarized below:
Previous Process Node NameNew Process Node Name
10nm SuperFin10nm SuperFin (unchanged)
10nm Enhanced SuperFinIntel 7
Intel 7nmIntel 4

CONTROLS AND PROCEDURES
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Controls and Procedures
Inherent Limitations on Effectiveness of Controls
Our management, including the principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.
Evaluation of Disclosure Controls and Procedures
Based on management’smanagement's evaluation (with the participation of our principal executive officer and principal financial officer), as of the end of the period covered by this report, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 29, 201825, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Management Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of consolidated financial statementsConsolidated Financial Statements for external purposes in accordance with US GAAP.
Management assessed our internal control over financial reporting as of December 29, 2018.25, 2021. Management based its assessment on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Management’sManagement's assessment included evaluation of elements such as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment.
Based on this assessment, management has concluded that our internal control over financial reporting was effective as of the end of the fiscal year to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statementsConsolidated Financial Statements for external reporting purposes in accordance with US GAAP. We reviewed the results of management’smanagement's assessment with the Audit Committee of our Board of Directors.
Our independent registered public accounting firm, Ernst & Young LLP, independently assessed the effectiveness of the company’scompany's internal control over financial reporting, as stated in the firm’sfirm's attestation report, which is included within the Consolidated Financial Statements.
Inherent Limitations on Effectiveness of Controls
Our management, including the principal executive officerStatements and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

Supplemental Details.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1.ExhibitsFinancial Statements: See "Index to Consolidated Financial Statements" within the Consolidated Financial Statements.
2.Financial Statement Schedule: See "Schedule II—Valuation and Qualifying Accounts" in this section of this Form 10-K.
3.Exhibits: The exhibits listed in the accompanying index to exhibits are filed, furnished, or incorporated by reference as part of this Form 10-K.
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.
Certain of the agreements filed as exhibits to this Form 10-K contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the agreement. These representations and warranties:
▪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.
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or at any other time. Investors should not rely on them as statements of fact.















































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Exhibit Index
Schedule II—Valuation and Qualifying Accounts
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 29, 2018 $1,171
 $185
 $(54) $1,302
December 30, 2017 $953
 $237
 $(19) $1,171
December 31, 2016 $701
 $261
 $(9) $953


Exhibit
Number
Incorporated by ReferenceFiled or
Furnished
Herewith
Exhibit DescriptionFormFile NumberExhibitFiling
Date
2.1

8-K000-062172.1 10/20/2020
3.18-K000-062173.1 5/22/2006
3.28-K000-062173.2 3/16/2021
4.1S-3ASR333-1328654.4 3/30/2006
4.210-K000-062174.2.42/20/2008
4.38-K000-062174.01 9/19/2011
4.48-K000-062174.01 12/11/2012
4.58-K000-062174.01 12/14/2012
4.68-K000-06217

4.1 7/29/2015
4.78-K000-062174.1 5/19/2016
4.8
Ninth Supplemental Indenture to Open-Ended Indenture, dated as of May 11, 2017, between Intel Corporation and Wells Fargo Bank, National Association, as successor trustee
8-K000-062174.1 5/11/2017
4.9
Tenth Supplemental Indenture to Open-Ended Indenture, dated as of June 16, 2017, between Intel Corporation and Wells Fargo Bank, National Association, as successor trustee
8-K000-062174.1 6/16/2017
4.108-K000-062174.1 8/14/2017
4.11
Twelfth Supplemental Indenture to Open-Ended Indenture, dated as of December 8, 2017, between Intel Corporation and Wells Fargo Bank, National Association, as successor trustee
10-K000-062174.2.132/16/2018
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Exhibit Index
Exhibit
Number
   Incorporated by Reference 
Filed or
Furnished
Herewith
Exhibit Description Form File Number Exhibit 
Filing
Date
 
2.1†
 
Agreement and Plan of Merger among Intel Corporation, 615 Corporation and Altera Corporation, dated as of May 31, 2015
 8-K 000-06217 2.1
 6/1/2015  
2.2†
 
Purchase Agreement, dated as of March 12, 2017, by and among Intel Corporation, Cyclops Holdings, Inc. and Mobileye N.V.

 8-K 000-06217 2.1
 3/13/2017  
3.1 
Intel Corporation Third Restated Certificate of Incorporation of Intel Corporation dated May 17, 2006
 8-K 000-06217 3.1
 5/22/2006  
3.2 
Intel Corporation Bylaws, as amended and restated on January 16, 2019
 8-K 000-06217 3.2
 1/17/2019  
4.1 
Indenture dated as of March 29, 2006 between Intel Corporation and Wells Fargo Bank, National Association (as successor to Citibank N.A.) (the "Open-Ended Indenture")
 S-3ASR 333-132865 4.4
 3/30/2006  
4.2 
First Supplemental Indenture to Open-Ended Indenture, dated as of December 3, 2007
 10-K 000-06217 4.2.4
 2/20/2008  
4.3 
Indenture for the Registrant’s 3.25% Junior Subordinated Convertible Debentures due 2039 between Intel Corporation and Wells Fargo Bank, National Association, dated as of July 27, 2009
 10-Q 000-06217 4.1
 11/2/2009  
4.4 
Second Supplemental Indenture to Open-Ended Indenture for the Registrant’s 1.95% Senior Notes due 2016, 3.30% Senior Notes due 2021, and 4.80% Senior Notes due 2041, dated as of September 19, 2011
 8-K 000-06217 4.01
 9/19/2011  
4.5 
Third Supplemental Indenture to Open-Ended Indenture for the Registrant’s 1.35% Senior Notes due 2017, 2.70% Senior Notes due 2022, 4.00% Senior Notes due 2032, and 4.25% Senior Notes due 2042, dated as of December 11, 2012
 8-K 000-06217 4.01
 12/11/2012  
4.6 
Fourth Supplemental Indenture to Open-Ended Indenture for the Registrant’s 4.25% Senior Notes due 2042, dated as of December 14, 2012
 8-K 000-06217 4.01
 12/14/2012  
4.7 
Fifth Supplemental Indenture to Open-Ended Indenture, dated as of July 29, 2015, between Intel Corporation and Wells Fargo Bank, National Association, as successor trustee
 8-K 
000-06217


 4.1
 7/29/2015  
4.8 
Seventh Supplemental Indenture to Open-Ended Indenture, dated as of December 14, 2015, among Intel Corporation, Wells Fargo Bank, National Association, as successor trustee, and Elavon Financial Services Limited, UK Branch, as paying agent
 8-K 000-06217 4.1
 12/14/2015  
4.9 
Eighth Supplemental Indenture to Open-Ended Indenture, dated as of May 19, 2016, between Intel Corporation and Wells Fargo Bank, National Association, as successor trustee
 8-K 000-06217 4.1
 5/19/2016  
4.10 
Ninth Supplemental Indenture to Open-Ended Indenture, dated as of May 11, 2017, between Intel Corporation and Wells Fargo Bank, National Association, as successor trustee
 8-K 000-06217 4.1
 5/11/2017  
4.11 
Tenth Supplemental Indenture to Open-Ended Indenture, dated as of June 16, 2017, between Intel Corporation and Wells Fargo Bank, National Association, as successor trustee
 8-K 000-06217 4.1
 6/16/2017  
4.12 
Eleventh Supplemental Indenture to Open-Ended Indenture, dated as of August 14, 2017, among Intel Corporation, Wells Fargo Bank, National Association, as successor trustee, and Elavon Financial Services DAC, UK Branch, as paying agent
 8-K 000-06217 4.1
 8/14/2017  

Exhibit
Number
Incorporated by ReferenceFiled or
Furnished
Herewith
Exhibit DescriptionFormFile NumberExhibitFiling
Date
4.128-K000-062174.1 11/21/2019
4.138-K000-062174.12/13/2020
4.148-K000-062174.2 2/13/2020
4.158-K000-062174.1 3/25/2020
4.168-K000-062174.1 8/12/2021
4.178-K000-0621799.2 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.
4.18X
10.1†
Intel Corporation 2006 Equity Incentive Plan, as amended and restated, effective May 16, 2019
10-Q000-0621710.1 7/26/2019
10.1.2†

10-Q000-0621710.1 10/25/2018
10.1.3†

10-Q000-0621710.3 4/26/2019
10.1.4†

10-Q000-0621710.4 4/26/2019
10.1.5†

10-Q000-0621710.5 4/26/2019
10.1.6†

10-Q000-0621710.14/24/2020
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Exhibit
Number
   Incorporated by Reference 
Filed or
Furnished
Herewith
Exhibit Description Form File Number Exhibit 
Filing
Date
 
4.13 
Twelfth Supplemental Indenture to Open-Ended Indenture, dated as of December 8, 2017, between Intel Corporation and Wells Fargo Bank, National Association, as successor trustee
 10-K 000-06217 4.2.13
 2/16/2018  
4.14 
Guarantee dated December 28, 2015 by Intel Corporation in favor of U.S. Bank, National Association, as Trustee for the holders of Altera’s 1.750% Senior Notes due 2017, 2.500% Senior Notes due 2018 and 4.100% Senior Notes due 2023                                                               
 8-K 000-06217 99.2
 12/28/2015  
  Certain instruments defining the rights of holders of long-term debt of Intel Corporation are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. Intel Corporation hereby agrees to furnish to the Securities and Exchange Commission, upon request, copies of such instruments.          
10.1††
 
Intel Corporation 2006 Equity Incentive Plan, as amended and restated, effective May 18, 2017
 10-Q 000-06217 10.1
 7/27/2017  
10.1.2††

 
Form of Notice of Grant - Restricted Stock Units
 10-Q 000-06217 10.3
 8/3/2009  
10.1.3††

 
Intel Corporation Form of Notice of Grant - Restricted Stock Units
 10-Q 000-06217 10.1
 10/25/2018  
10.1.5††

 
Intel Corporation Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted on or after January 23, 2015 under the Executive RSU program)
 10-Q 000-06217 10.3
 
4/27/2015

  
10.1.6††

 
Intel Corporation Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted to executives with annual vesting over 3 years)

 10-K 000-06217 10.1.27
 2/17/2017  
10.1.7††

 
Intel Corporation Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted to executives with quarterly vesting over 2 years)
 10-K 000-06217 10.1.6
 2/16/2018  
10.1.8††

 
Intel Corporation Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for time-based RSUs granted to Robert Swan as interim CEO on August 15, 2018)

 10-Q 000-06217 10.2
 10/25/2018  
10.1.9††

 
Intel Corporation Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted on or after January 23, 2015 under the Executive OSU program)
 10-Q 000-06217 10.4
 4/27/2015  
10.1.10††

 
Intel Corporation Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted on or after February 1, 2017 under the Executive OSU program)
 10-Q 000-06217 10.1
 4/27/2017  
10.1.11††

 
Intel Corporation Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for performance-based RSUs granted to Robert Swan as interim CEO on August 15, 2018)
 10-Q 000-06217 10.3
 10/25/2018  
10.1.12††

 
Intel Corporation Non-Employee Director Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted on or after January 23, 2015 under the Director RSU program)
 10-Q 000-06217 10.1
 4/27/2015  
10.1.13††

 
Intel Corporation Non-Employee Director Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted on or after January 23, 2015 under the Director OSU program)
 
10-Q

 000-06217 10.2
 4/27/2015  
10.1.14††

 
Intel Corporation Non-Employee Director Restricted Stock Unit Agreement under the 2006 Equity Incentive Plan (for RSUs granted on or after February 1, 2017 under the Director OSU program)
 10-Q 000-06217 10.2
 4/27/2017  
10.2††
 
Intel Corporation 2006 Employee Stock Purchase Plan, as amended and restated, effective January 1, 2019
 10-K       X

Exhibit
Number
Incorporated by ReferenceFiled or
Furnished
Herewith
Exhibit DescriptionFormFile NumberExhibitFiling
Date
10.1.7†

10-Q000-0621710.6 4/26/2019
10.1.8†

10-Q000-0621710.9 4/26/2019
10.1.9†

10-Q000-0621710.7 4/26/2019
10.1.10†

10-Q000-0621710.11 4/26/2019
10.1.11†
S-8333-25307799.1 2/12/2021
10.1.12†
10-Q000-0621710.3 4/23/2021
10.1.13†
10-Q000-0621710.4 4/23/2021
10.1.14†
10-Q000-0621710.5 4/23/2021
10.1.15†
10-Q000-0621710.6 4/23/2021
10.1.16†
10-Q000-0621710.7 4/23/2021
10.1.17†
10-Q000-0621710.8 4/23/2021
10.2†
8-K000-0621710.1 1/22/2020
10.3†
10-Q000-0621710.34/24/2020
10.4†
10-Q000-0621710.1 7/24/2020
10.5†
10-K000-0621710.41 2/26/2007
10.6†
10-K000-0621710.15 2/22/2005
10.7†
Form of Indemnification Agreement with Directors and Executive Officers (for Directors and Executive Officers who joined Intel after July 1, 2016)
10-Q000-0621710.2 10/31/2016
10.88-K000-0621710.1 11/12/2009
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Exhibit
Number
   Incorporated by Reference 
Filed or
Furnished
Herewith
Exhibit Description Form File Number Exhibit 
Filing
Date
 
10.3††
 
Intel Corporation 2014 Annual Performance Bonus Plan (amended and restated, effective January 1, 2014)
 10-K 000-06217 10.9.2
 2/14/2014  
10.4††
 
Form of Indemnification Agreement with Directors and Executive Officers
 10-K 000-06217 10.15
 2/22/2005  
10.5††
 
Form of Indemnification Agreement with Directors and Executive Officers (for Directors and Executive Officers who joined Intel after July 1, 2016)
 10-Q 000-06217 10.2
 10/31/2016  
10.6††
 
Intel Corporation Sheltered Employee Retirement Plan Plus, as amended and restated, effective January 1, 2009
 S-8 333-172024 99.1
 2/2/2011  
10.7††
 
Intel Corporation 2006 Deferral Plan for Outside Directors, effective November 15, 2006
 10-K 000-06217 10.41
 2/26/2007  
10.8 
Settlement Agreement Between Advanced Micro Devices, Inc. and Intel Corporation, dated November 11, 2009
 8-K 000-06217 10.1
 11/12/2009  
10.9†††
 
Patent Cross License Agreement between NVIDIA Corporation and Intel Corporation, dated January 10, 2011
 8-K 000-06217 10.1
 1/10/2011  
10.10††
 
Offer Letter by and between Intel Corporation and Dr. Venkata S.M. "Murthy" Renduchintala dated November 17, 2015
 10-K 000-06217 10.14
 2/12/2016  
10.11††
 
Offer Letter between Intel Corporation and Robert H. Swan, dated January 30, 2019
 8-K 000-06217 10.1
 1/31/2019  
10.12††
 
Confidential Retirement Agreement and General Release of Claims between Intel Corporation and Diane M. Bryant dated November 29, 2017
 10-K 000-06217 10.12
 2/16/2018  
10.13††
 
Retention Letter between Intel Corporation and Navin Shenoy dated December 12, 2017
 10-K 000-06217 10.13
 2/16/2018  
21.1 
Intel Corporation Subsidiaries
         X
23.1 
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
         X
31.1 
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act
         X
31.2 
Certification of interim Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act
         X
32.1 
Certification of the Chief Executive Officer and interim Chief Financial Officer pursuant to Rule13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350
         X
99.1 
Supplement to Present Required Information in Searchable Format
         X
101.INS XBRL Instance Document         X
101.SCH XBRL Taxonomy Extension Schema Document         X
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document         X
101.DEF XBRL Taxonomy Extension Definition Linkbase Document         X
101.LAB XBRL Taxonomy Extension Label Linkbase Document         X
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document         X
†Exhibit
Number
SchedulesIncorporated by ReferenceFiled or
Furnished
Herewith
Exhibit DescriptionFormFile NumberExhibitFiling
Date
10.9††
Patent Cross License Agreement between NVIDIA Corporation and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Intel agrees to furnish supplementally a copy of any such schedule or exhibit to the SEC upon request.Corporation, dated January 10, 2011
8-K000-0621710.1 1/10/2011
10.10††
Management contracts or compensation plans or arrangements
Offer Letter between Intel Corporation and Sandra Rivera, dated June 21, 2021
10-Q000-0621710.1 7/23/2021
10.11†
Offer Letter between Intel Corporation andPatrick Gelsinger, dated January 13, 2021
8-K000-0621710.1 1/14/2021
10.12†
Lease Agreement between Intel Corporation and Steven R. Rodgers††
10-Q000-0621710.12 4/26/2019
10.13†
Offer Letter between Intel Corporation and George S. Davis, dated April 2, 2019
8-K000-0621710.14/3/2019
21.1
Intel Corporation Subsidiaries
X
23.1
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
X
31.1
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act
X
31.2
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act
X
32.1
Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Rule13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350
X
99.1
Supplement to Present Required Information in which directors or executive officers are eligible to participate.Searchable Format
X
101Inline XBRL Document Set for the consolidated financial statements and accompanying notes in Financial Statements and Supplemental DetailsX
104Cover 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.
†††Portions of this exhibit have been omitted pursuant to an order granting confidential treatment.





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FORMForm 10-K CROSS-REFERENCE INDEXCross-Reference Index
Item NumberItem
Part I
Item 1.Business:
General development of business
 Pages 2-7, 19
Item NumberItem
Part I
Item 1.Business:
General developmentDescription of business
Pages 32-836, 48-49, 66, 82-85
Narrative description of business
Available information
Pages Page 366-19, 23-37, 46-48, 79-81
Item 1A.Available informationRisk Factors
Page Pages 6150-63
Item 1A.1B.Risk FactorsUnresolved Staff CommentsNot applicable
Item 2.Properties
Pages 4912-, 5764
Item 1B.3.Unresolved Staff CommentsNot applicable
Item 2.PropertiesLegal Proceedings
Pages 13105, -60110
Item 3.Legal Proceedings
Pages 108-110
Item 4.Mine Safety DisclosuresNot applicable
Part II
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Pages 119, 1764, -6065-61
Item 6.Selected Financial Data[Reserved]
Page 45
Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations:
Results of operations
Pages 194-385, 18-42, 45-47
Liquidity and capital resources
Pages 394-415, 42-44, 45-47
Capital resources
Pages 39-41
Off balance sheet arrangements(a)
Contractual obligations
Pages 42-43
Critical accounting estimates and policies
Pages 4944, 7077-7582
Item 7A.Quantitative and Qualitative Disclosures About Market Risk
Pages Page 4349-44
Item 8.
Financial Statements and Supplementary Data

Pages 6268-111113
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNot applicable
Item 9A.Controls and Procedures
Page 112114
Item 9B.Other InformationNot applicable
Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934
Page 67
Part IIIItem 9C.Disclosure Regarding Foreign Jurisdictions that Prevent InspectionsNot applicable
Part III
Item 10.Directors, Executive Officers, and Corporate Governance
Page 1866, (b)(a)
Item 11.Executive Compensation(c)(b)
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters(d)(c)
Item 13.Certain Relationships and Related Transactions, and Director Independence(e)(d)
Item 14.Principal Accounting Fees and Services
(f)

(e)
Part IV
Item 15.Exhibits and Financial Statement Schedules
Pages 113115-117119
Item 16.Form 10-K SummaryNot applicable
Signatures
Page 119
(a)SignaturesAs of December 29, 2018, we did not have any significant off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
Page 121
(b)Incorporated by reference to "Proposal 1: Election of Directors," "Corporate Governance," "Code of Conduct," and "Other Matters-Section 16(a) Beneficial Ownership Reporting Compliance" in the 2019
(a)    Incorporated by reference to "Proposal 1: Election of Directors," "Corporate Governance," "Code of Conduct," and "Other Matters-Delinquent Section 16(a) Reports" in the 2022 Proxy Statement. The information under the heading "Information about Our Executive Officers" within Other Key Information is also incorporated by reference in this section.
(b)    Incorporated by reference to "Director Compensation," "Compensation Discussion and Analysis," "Report of the Compensation Committee," and "Executive Compensation" in the 2022 Proxy Statement.
(c)    Incorporated by reference to "Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information" in the 2022 Proxy Statement.
(d)    Incorporated by reference to "Corporate Governance" and "Certain Relationships and Related Transactions" in the 2022 Proxy Statement.
(e)    Incorporated by reference to "Report of the Audit Committee" and "Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm" in the 2022 Proxy Statement. The information under the heading "Executive Officers of the Registrant" within Fundamentals of Our Business is also incorporated by reference in this section.
(c)Incorporated by reference to "Director Compensation," "Compensation Discussion and Analysis," "Report of the Compensation Committee," and "Executive Compensation" in the 2019 Proxy Statement.
(d)Incorporated by reference to "Security Ownership of Certain Beneficial Owners and Management" and “Equity Compensation Plan Information” in the 2019 Proxy Statement.
(e)Incorporated by reference to "Corporate Governance" and "Certain Relationships and Related Transactions" in the 2019 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 2019 Proxy Statement.

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SIGNATURESSignatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
INTEL CORPORATION
Registrant
INTEL CORPORATION
Registrant
By:		/s/ PATRICK P. GELSINGER
Patrick P. Gelsinger
By:/s/    ROBERT H. SWAN        
Robert H. Swan
Chief Executive Officer, Director, and Principal Executive Officer
February 1, 2019January 26, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
/s/ PATRICK P. GELSINGER/s/    DAVID ZINSNER
Patrick P. GelsingerDavid Zinsner
Chief Executive Officer, Director, and Principal Executive OfficerExecutive Vice President, Chief Financial Officer, Principal
January 26, 2022Financial Officer, and Principal Accounting Officer
January 26, 2022
/s/    ROBERT H. SWAN        /s/    TODD M. UNDERWOOD      
Robert H. SwanTodd M. Underwood
Chief Executive Officer, Director, and Principal Executive OfficerInterim Chief Financial Officer and Principal Financial Officer;
February 1, 2019Vice President of Finance and Director, Corporate Planning and Reporting
February 1, 2019
/s/    KEVIN T. MCBRIDE      
Kevin T. McBride
Vice President of Finance, Corporate Controller and Principal Accounting Officer
February 1, 2019
/s/    ANEEL BHUSRI JAMES J. GOETZ/s/    DR. TSU-JAE KING LIU
Aneel BhusriJames J. GoetzDr. Tsu-Jae King Liu
DirectorDirector
February 1, 2019January 26, 2022February 1, 2019January 26, 2022
/s/    ANDY D. BRYANT        DR. ANDREA J. GOLDSMITH/s/    GREGORY D. SMITH
Andy D. BryantAndrea J. GoldsmithGregory D. Smith
DirectorDirector
January 26, 2022January 26, 2022
/s/    ALYSSA HENRY       /s/    DION J. WEISLER
Alyssa HenryDion J. Weisler
DirectorDirector
January 26, 2022January 26, 2022
/s/    DR. OMAR ISHRAK/s/    FRANK D. YEARY
Dr. Omar IshrakFrank D. Yeary
Chairman of the Board and DirectorDirector
February 1, 2019January 26, 2022February 1, 2019January 26, 2022
/s/    REED E. HUNDT        /s/    ANDREW WILSON
Reed E. HundtAndrew Wilson
DirectorDirector
February 1, 2019February 1, 2019
/s/    DR. OMAR ISHRAK        RISA LAVIZZO-MOUREY/s/    FRANK D. YEARY        
Dr. Omar IshrakFrank D. Yeary
DirectorDirector
February 1, 2019February 1, 2019
/s/  DR. RISA LAVIZZO-MOUREY  ��    
Dr. Risa Lavizzo-Mourey
Director
February 1, 2019January 26, 2022

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