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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Intel Corporation | NASDAQ:INTC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 34.46 | 34.51 | 34.59 | 0 | 01:00:00 |
☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||
For the quarterly period ended | April 1, 2023 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||
For the transition period from to |
Delaware | 94-1672743 | |||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
2200 Mission College Boulevard, | Santa Clara, | California | 95054-1549 | |||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
Common stock, $0.001 par value | INTC | Nasdaq Global Select Market |
Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company | Emerging growth company | ||||||||||
☑ | ¨ | ¨ | ☐ | ☐ | ||||||||||
Page | |||||||||||
Forward-Looking Statements | |||||||||||
Availability of Company Information | |||||||||||
A Quarter in Review | |||||||||||
Consolidated Condensed Financial Statements and Supplemental Details | |||||||||||
Consolidated Condensed Statements of Income | |||||||||||
Consolidated Condensed Statements of Comprehensive Income | |||||||||||
Consolidated Condensed Balance Sheets | |||||||||||
Consolidated Condensed Statements of Cash Flows | |||||||||||
Consolidated Condensed Statements of Stockholders' Equity | |||||||||||
Notes to Consolidated Condensed Financial Statements | |||||||||||
Key Terms | |||||||||||
Management's Discussion and Analysis (MD&A) | |||||||||||
Segment Trends and Results | |||||||||||
Consolidated Condensed Results of Operations | |||||||||||
Liquidity and Capital Resources | |||||||||||
Non-GAAP Financial Measures | |||||||||||
Other Key Information | |||||||||||
Quantitative and Qualitative Disclosures About Market Risk | |||||||||||
Risk Factors | |||||||||||
Controls and Procedures | |||||||||||
Issuer Purchases of Equity Securities | |||||||||||
Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934 | |||||||||||
Exhibits | |||||||||||
Form 10-Q Cross-Reference Index |
![]() | 1 |
![]() | 2 |
A Quarter in Review |
Revenue | Gross Margin | Diluted EPS attributable to Intel | Cash Flows | |||||||||||||||||
■ GAAP $B | ■ GAAP ■ Non-GAAP | ■ GAAP ■ Non-GAAP | ■ Operating Cash Flow $B ■ Adjusted Free Cash Flow $B |
$11.7B | 34.2% | 38.4% | $(0.66) | $(0.04) | $(1.8)B | $(8.8)B | ||||||||||||||||||||||||||||||||||||||
GAAP | GAAP | non-GAAP1 | GAAP | non-GAAP1 | GAAP | non-GAAP1 | ||||||||||||||||||||||||||||||||||||||
Revenue down $6.6B or 36% from Q1 2022 | Gross margin down 16.2 ppts from Q1 2022 | Gross margin down 14.7 ppts from Q1 2022 | Diluted EPS down $2.64 or 133% from Q1 2022 | Diluted EPS down $0.91 or 105% from Q1 2022 | Operating cash flow down $7.7B or 131% from Q1 2022 | Adjusted free cash flow down $14.4B or 257% from Q1 2022 | ||||||||||||||||||||||||||||||||||||||
Lower revenue in CCG, DCAI, and NEX. | Lower GAAP gross margin from lower revenue, higher unit cost, and higher excess capacity charges, partially offset by a decrease in product ramp costs. | Lower GAAP EPS from lower gross margin, and lack of one-time benefits recognized in Q1 2022 (gains on the sale of McAfee and the NAND divestiture, and the benefit from the EC fine reversal). | Lower operating cash flow driven primarily by a net operating loss. |
![]() | A Quarter in Review | 3 |
Consolidated Condensed Statements of Income | |||||
Three Months Ended | ||||||||||||||
(In Millions, Except Per Share Amounts; Unaudited) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Net revenue | $ | 11,715 | $ | 18,353 | ||||||||||
Cost of sales | 7,707 | 9,109 | ||||||||||||
Gross margin | 4,008 | 9,244 | ||||||||||||
Research and development | 4,109 | 4,362 | ||||||||||||
Marketing, general, and administrative | 1,303 | 1,752 | ||||||||||||
Restructuring and other charges | 64 | (1,211) | ||||||||||||
Operating expenses | 5,476 | 4,903 | ||||||||||||
Operating income (loss) | (1,468) | 4,341 | ||||||||||||
Gains (losses) on equity investments, net | 169 | 4,323 | ||||||||||||
Interest and other, net | 141 | 997 | ||||||||||||
Income (loss) before taxes | (1,158) | 9,661 | ||||||||||||
Provision for taxes | 1,610 | 1,548 | ||||||||||||
Net income (loss) | (2,768) | 8,113 | ||||||||||||
Less: Net income (loss) attributable to non-controlling interests | (10) | — | ||||||||||||
Net income (loss) attributable to Intel | $ | (2,758) | $ | 8,113 | ||||||||||
Earnings (loss) per share attributable to Intel—basic | $ | (0.66) | $ | 1.99 | ||||||||||
Earnings (loss) per share attributable to Intel—diluted | $ | (0.66) | $ | 1.98 | ||||||||||
Weighted average shares of common stock outstanding: | ||||||||||||||
Basic | 4,154 | 4,079 | ||||||||||||
Diluted | 4,154 | 4,107 |
![]() | Financial Statements | Consolidated Condensed Statements of Income | 4 |
Consolidated Condensed Statements of Comprehensive Income | |||||
Three Months Ended | ||||||||||||||
(In Millions; Unaudited) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Net income (loss) | $ | (2,768) | $ | 8,113 | ||||||||||
Changes in other comprehensive income, net of tax: | ||||||||||||||
Net unrealized holding gains (losses) on derivatives | 142 | (115) | ||||||||||||
Actuarial valuation and other pension benefits (expenses), net | 1 | 18 | ||||||||||||
Translation adjustments and other | — | (25) | ||||||||||||
Other comprehensive income (loss) | 143 | (122) | ||||||||||||
Total comprehensive income (loss) | (2,625) | 7,991 | ||||||||||||
Less: comprehensive income (loss) attributable to non-controlling interests | (10) | — | ||||||||||||
Total comprehensive income (loss) attributable to Intel | $ | (2,615) | $ | 7,991 |
![]() | Financial Statements | Consolidated Condensed Statements of Comprehensive Income | 5 |
Consolidated Condensed Balance Sheets | |||||
(In Millions; Unaudited) | Apr 1, 2023 | Dec 31, 2022 | ||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 8,232 | $ | 11,144 | ||||||||||
Short-term investments | 19,302 | 17,194 | ||||||||||||
Accounts receivable, net | 3,847 | 4,133 | ||||||||||||
Inventories | 12,993 | 13,224 | ||||||||||||
Other current assets | 3,940 | 4,712 | ||||||||||||
Total current assets | 48,314 | 50,407 | ||||||||||||
Property, plant and equipment, net of accumulated depreciation of $94,550 ($93,386 as of December 31, 2022) | 85,734 | 80,860 | ||||||||||||
Equity investments | 6,029 | 5,912 | ||||||||||||
Goodwill | 27,591 | 27,591 | ||||||||||||
Identified intangible assets, net | 5,567 | 6,018 | ||||||||||||
Other long-term assets | 12,068 | 11,315 | ||||||||||||
Total assets | $ | 185,303 | $ | 182,103 | ||||||||||
Liabilities and stockholders’ equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Short-term debt | $ | 1,437 | $ | 4,367 | ||||||||||
Accounts payable | 8,083 | 9,595 | ||||||||||||
Accrued compensation and benefits | 2,497 | 4,084 | ||||||||||||
Income taxes payable | 4,046 | 2,251 | ||||||||||||
Other accrued liabilities | 11,330 | 11,858 | ||||||||||||
Total current liabilities | 27,393 | 32,155 | ||||||||||||
Debt | 48,836 | 37,684 | ||||||||||||
Long-term income taxes payable | 3,831 | 3,796 | ||||||||||||
Other long-term liabilities | 4,840 | 5,182 | ||||||||||||
Contingencies (Note 12) | ||||||||||||||
Stockholders’ equity: | ||||||||||||||
Common stock and capital in excess of par value, 4,171 issued and outstanding (4,137 issued and outstanding as of December 31, 2022) | 32,829 | 31,580 | ||||||||||||
Accumulated other comprehensive income (loss) | (419) | (562) | ||||||||||||
Retained earnings | 65,649 | 70,405 | ||||||||||||
Total Intel stockholders' equity | 98,059 | 101,423 | ||||||||||||
Non-controlling interests | 2,344 | 1,863 | ||||||||||||
Total stockholders' equity | 100,403 | 103,286 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 185,303 | $ | 182,103 |
![]() | Financial Statements | Consolidated Condensed Balance Sheets | 6 |
Consolidated Condensed Statements of Cash Flows | |||||
Three Months Ended | ||||||||||||||
(In Millions; Unaudited) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Cash and cash equivalents, beginning of period | $ | 11,144 | $ | 4,827 | ||||||||||
Cash flows provided by (used for) operating activities: | ||||||||||||||
Net income (loss) | (2,768) | 8,113 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation | 1,901 | 2,847 | ||||||||||||
Share-based compensation | 739 | 707 | ||||||||||||
Restructuring and other charges | 55 | 17 | ||||||||||||
Amortization of intangibles | 465 | 501 | ||||||||||||
(Gains) losses on equity investments, net | (167) | (4,325) | ||||||||||||
(Gains) losses on divestitures | — | (1,121) | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Accounts receivable | 286 | 2,384 | ||||||||||||
Inventories | 231 | (1,147) | ||||||||||||
Accounts payable | (771) | (128) | ||||||||||||
Accrued compensation and benefits | (1,560) | (1,884) | ||||||||||||
Income taxes | 1,344 | 1,219 | ||||||||||||
Other assets and liabilities | (1,540) | (1,292) | ||||||||||||
Total adjustments | 983 | (2,222) | ||||||||||||
Net cash provided by (used for) operating activities | (1,785) | 5,891 | ||||||||||||
Cash flows provided by (used for) investing activities: | ||||||||||||||
Additions to property, plant and equipment | (7,413) | (4,604) | ||||||||||||
Purchases of short-term investments | (16,132) | (19,091) | ||||||||||||
Maturities and sales of short-term investments | 14,173 | 10,490 | ||||||||||||
Sales of equity investments | 116 | 4,682 | ||||||||||||
Proceeds from divestitures | — | 6,544 | ||||||||||||
Other investing | 735 | (660) | ||||||||||||
Net cash used for investing activities | (8,521) | (2,639) | ||||||||||||
Cash flows provided by (used for) financing activities: | ||||||||||||||
Repayment of commercial paper | (2,930) | — | ||||||||||||
Payments on finance leases | (15) | (299) | ||||||||||||
Partner contributions | 449 | — | ||||||||||||
Issuance of long-term debt, net of issuance costs | 10,968 | — | ||||||||||||
Proceeds from sales of common stock through employee equity incentive plans | 659 | 589 | ||||||||||||
Payment of dividends to stockholders | (1,512) | (1,487) | ||||||||||||
Other financing | (225) | (667) | ||||||||||||
Net cash provided by (used for) financing activities | 7,394 | (1,864) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | (2,912) | 1,388 | ||||||||||||
Cash and cash equivalents, end of period | $ | 8,232 | $ | 6,215 | ||||||||||
Supplemental disclosures: | ||||||||||||||
Acquisition of property, plant and equipment included in accounts payable and accrued liabilities | $ | 4,711 | $ | 2,949 | ||||||||||
Cash paid during the period for: | ||||||||||||||
Interest, net of capitalized interest | $ | 313 | $ | 177 | ||||||||||
Income taxes, net of refunds | $ | 267 | $ | 335 | ||||||||||
![]() | Financial Statements | Consolidated Condensed Statements of Cash Flows | 7 |
Consolidated Condensed Statements of Stockholders' Equity | |||||
(In Millions, Except Per Share Amounts; Unaudited) | Common Stock and Capital in Excess of Par Value | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-Controlling Interests | Total | |||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2022 | $ | 4,137 | $ | 31,580 | $ | (562) | $ | 70,405 | $ | 1,863 | $ | 103,286 | ||||||||||||||||||||||||||
Net income (loss) | — | — | — | (2,758) | (10) | (2,768) | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | 143 | — | — | 143 | ||||||||||||||||||||||||||||||||
Net proceeds received from partner contributions | — | — | — | — | — | 449 | 449 | |||||||||||||||||||||||||||||||
Employee equity incentive plans and other | 36 | 659 | — | — | — | 659 | ||||||||||||||||||||||||||||||||
Share-based compensation | — | 697 | — | — | 42 | 739 | ||||||||||||||||||||||||||||||||
Restricted stock unit withholdings | (2) | (107) | — | 38 | — | (69) | ||||||||||||||||||||||||||||||||
Cash dividends declared ($0.49 per share) | — | — | — | (2,036) | — | (2,036) | ||||||||||||||||||||||||||||||||
Balance as of April 1, 2023 | $ | 4,171 | $ | 32,829 | $ | (419) | $ | 65,649 | $ | 2,344 | $ | 100,403 | ||||||||||||||||||||||||||
Balance as of December 25, 2021 | $ | 4,070 | $ | 28,006 | $ | (880) | $ | 68,265 | $ | — | $ | 95,391 | ||||||||||||||||||||||||||
Net income (loss) | — | — | — | 8,113 | — | 8,113 | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | (122) | — | — | (122) | ||||||||||||||||||||||||||||||||
Employee equity incentive plans and other | 20 | 589 | — | — | — | 589 | ||||||||||||||||||||||||||||||||
Share-based compensation | — | 707 | — | — | — | 707 | ||||||||||||||||||||||||||||||||
Restricted stock unit withholdings | (1) | (58) | — | 3 | — | (55) | ||||||||||||||||||||||||||||||||
Cash dividends declared ($0.37 per share) | — | — | — | (1,487) | — | (1,487) | ||||||||||||||||||||||||||||||||
Balance as of April 2, 2022 | $ | 4,089 | $ | 29,244 | $ | (1,002) | $ | 74,894 | $ | — | $ | 103,136 | ||||||||||||||||||||||||||
![]() | Financial Statements | Consolidated Condensed Statements of Stockholders' Equity | 8 |
Notes to Consolidated Condensed Financial Statements | |||||
Note 1 : | Basis of Presentation |
Note 2 : | Operating Segments |
![]() | Financial Statements | Notes to Financial Statements | 9 |
Three Months Ended | |||||||||||||||||
(In Millions) | Apr 1, 2023 | Apr 2, 2022 | |||||||||||||||
Net revenue: | |||||||||||||||||
Client Computing | |||||||||||||||||
Desktop | $ | 1,879 | $ | 2,641 | |||||||||||||
Notebook | 3,407 | 5,959 | |||||||||||||||
Other | 481 | 722 | |||||||||||||||
5,767 | 9,322 | ||||||||||||||||
Data Center and AI | 3,718 | 6,074 | |||||||||||||||
Network and Edge | 1,489 | 2,139 | |||||||||||||||
Mobileye | 458 | 394 | |||||||||||||||
Intel Foundry Services | 118 | 156 | |||||||||||||||
All other | 165 | 268 | |||||||||||||||
Total net revenue | $ | 11,715 | $ | 18,353 | |||||||||||||
Operating income (loss): | |||||||||||||||||
Client Computing | $ | 520 | $ | 2,722 | |||||||||||||
Data Center and AI | (518) | 1,393 | |||||||||||||||
Network and Edge | (300) | 416 | |||||||||||||||
Mobileye | 123 | 148 | |||||||||||||||
Intel Foundry Services | (140) | (23) | |||||||||||||||
All other | (1,153) | (315) | |||||||||||||||
Total operating income (loss) | $ | (1,468) | $ | 4,341 |
Note 3 : | Non-Controlling Interests |
![]() | Financial Statements | Notes to Financial Statements | 10 |
Note 4 : | Earnings (Loss) Per Share |
Three Months Ended | ||||||||||||||
(In Millions, Except Per Share Amounts) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Net income (loss) | $ | (2,768) | $ | 8,113 | ||||||||||
Less: Net income (loss) attributable to non-controlling interests | (10) | — | ||||||||||||
Net income (loss) attributable to Intel | (2,758) | 8,113 | ||||||||||||
Weighted average shares of common stock outstanding—basic | 4,154 | 4,079 | ||||||||||||
Dilutive effect of employee equity incentive plans | — | 28 | ||||||||||||
Weighted average shares of common stock outstanding—diluted | 4,154 | 4,107 | ||||||||||||
Earnings (loss) per share attributable to Intel—basic | $ | (0.66) | $ | 1.99 | ||||||||||
Earnings (loss) per share attributable to Intel—diluted | $ | (0.66) | $ | 1.98 |
Note 5 : | Other Financial Statement Details |
(In Millions) | Apr 1, 2023 | Dec 31, 2022 | ||||||||||||
Raw materials | $ | 1,358 | $ | 1,517 | ||||||||||
Work in process | 7,415 | 7,565 | ||||||||||||
Finished goods | 4,220 | 4,142 | ||||||||||||
Total inventories | $ | 12,993 | $ | 13,224 |
Three Months Ended | ||||||||||||||
(In Millions) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Interest income | $ | 334 | $ | 47 | ||||||||||
Interest expense | (193) | (124) | ||||||||||||
Other, net | — | 1,074 | ||||||||||||
Total interest and other, net | $ | 141 | $ | 997 |
![]() | Financial Statements | Notes to Financial Statements | 11 |
Note 6 : | Restructuring and Other Charges |
Three Months Ended | ||||||||||||||
(In Millions) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Employee severance and benefit arrangements | $ | (39) | $ | 5 | ||||||||||
Litigation charges and other | 77 | (1,216) | ||||||||||||
Asset impairment charges | 26 | — | ||||||||||||
Total restructuring and other charges | $ | 64 | $ | (1,211) |
Note 7 : | Investments |
![]() | Financial Statements | Notes to Financial Statements | 12 |
(In Millions) | Fair Value | |||||||
Due in 1 year or less | $ | 15,874 | ||||||
Due in 1–2 years | 1,805 | |||||||
Due in 2–5 years | 4,850 | |||||||
Due after 5 years | 734 | |||||||
Instruments not due at a single maturity date1 | 1,947 | |||||||
Total | $ | 25,210 |
(In Millions) | Apr 1, 2023 | Dec 31, 2022 | ||||||||||||
Marketable equity securities1 | $ | 1,421 | $ | 1,341 | ||||||||||
Non-marketable equity securities | 4,598 | 4,561 | ||||||||||||
Equity method investments | 10 | 10 | ||||||||||||
Total | $ | 6,029 | $ | 5,912 |
Three Months Ended | ||||||||||||||
(In Millions) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Ongoing mark-to-market adjustments on marketable equity securities | $ | 188 | $ | (430) | ||||||||||
Observable price adjustments on non-marketable equity securities | 10 | 71 | ||||||||||||
Impairment charges | (36) | (23) | ||||||||||||
Sale of equity investments and other1 | 7 | 4,705 | ||||||||||||
Total gains (losses) on equity investments, net | $ | 169 | $ | 4,323 |
Three Months Ended | ||||||||||||||
(In Millions) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Net unrealized gains (losses) recognized during the period on equity securities | $ | 166 | $ | (244) | ||||||||||
Less: Net (gains) losses recognized during the period on equity securities sold during the period | (3) | (17) | ||||||||||||
Net unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date | $ | 163 | $ | (261) |
![]() | Financial Statements | Notes to Financial Statements | 13 |
Note 8 : | Acquisitions and Divestitures |
Note 9 : | Borrowings |
![]() | Financial Statements | Notes to Financial Statements | 14 |
Note 10 : | Fair Value |
Apr 1, 2023 | Dec 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measured and Recorded at Reporting Date Using | Fair Value Measured and Recorded at Reporting Date Using | |||||||||||||||||||||||||||||||||||||||||||||||||
(In Millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate debt | $ | — | $ | 1,395 | $ | — | $ | 1,395 | $ | — | $ | 856 | $ | — | $ | 856 | ||||||||||||||||||||||||||||||||||
Financial institution instruments¹ | 1,806 | 2,177 | — | 3,983 | 6,899 | 1,474 | — | 8,373 | ||||||||||||||||||||||||||||||||||||||||||
Government debt² | 233 | 297 | — | 530 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Reverse repurchase agreements | — | 1,700 | — | 1,700 | — | 1,301 | — | 1,301 | ||||||||||||||||||||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate debt | — | 5,441 | — | 5,441 | — | 5,381 | — | 5,381 | ||||||||||||||||||||||||||||||||||||||||||
Financial institution instruments¹ | 141 | 5,019 | — | 5,160 | 196 | 4,729 | — | 4,925 | ||||||||||||||||||||||||||||||||||||||||||
Government debt² | 49 | 8,652 | — | 8,701 | 48 | 6,840 | — | 6,888 | ||||||||||||||||||||||||||||||||||||||||||
Other current assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets | 78 | 959 | — | 1,037 | — | 1,264 | — | 1,264 | ||||||||||||||||||||||||||||||||||||||||||
Loans receivable³ | — | 54 | — | 54 | — | 53 | — | 53 | ||||||||||||||||||||||||||||||||||||||||||
Marketable equity securities | 1,421 | — | — | 1,421 | 1,341 | — | — | 1,341 | ||||||||||||||||||||||||||||||||||||||||||
Other long-term assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets | — | 5 | — | 5 | — | 10 | — | 10 | ||||||||||||||||||||||||||||||||||||||||||
Total assets measured and recorded at fair value | $ | 3,728 | $ | 25,699 | $ | — | $ | 29,427 | $ | 8,484 | $ | 21,908 | $ | — | $ | 30,392 | ||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other accrued liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | 8 | $ | 350 | $ | 81 | $ | 439 | $ | 111 | $ | 485 | $ | 89 | $ | 685 | ||||||||||||||||||||||||||||||||||
Other long-term liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | — | 515 | — | 515 | — | 699 | — | 699 | ||||||||||||||||||||||||||||||||||||||||||
Total liabilities measured and recorded at fair value | $ | 8 | $ | 865 | $ | 81 | $ | 954 | $ | 111 | $ | 1,184 | $ | 89 | $ | 1,384 |
![]() | Financial Statements | Notes to Financial Statements | 15 |
Note 11 : | Derivative Financial Instruments |
(In Millions) | Apr 1, 2023 | Dec 31, 2022 | ||||||||||||
Foreign currency contracts | $ | 30,847 | $ | 31,603 | ||||||||||
Interest rate contracts | 16,590 | 16,011 | ||||||||||||
Other | 2,058 | 2,094 | ||||||||||||
Total | $ | 49,495 | $ | 49,708 |
Apr 1, 2023 | Dec 31, 2022 | |||||||||||||||||||||||||
(In Millions) | Assets1 | Liabilities2 | Assets1 | Liabilities2 | ||||||||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||||||||
Foreign currency contracts3 | $ | 187 | $ | 185 | $ | 142 | $ | 290 | ||||||||||||||||||
Interest rate contracts | — | 585 | — | 777 | ||||||||||||||||||||||
Total derivatives designated as hedging instruments | 187 | 770 | 142 | 1,067 | ||||||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||
Foreign currency contracts3 | 537 | 156 | 866 | 194 | ||||||||||||||||||||||
Interest rate contracts | 240 | 20 | 266 | 12 | ||||||||||||||||||||||
Equity contracts | 78 | 8 | — | 111 | ||||||||||||||||||||||
Total derivatives not designated as hedging instruments | 855 | 184 | 1,132 | 317 | ||||||||||||||||||||||
Total derivatives | $ | 1,042 | $ | 954 | $ | 1,274 | $ | 1,384 |
![]() | Financial Statements | Notes to Financial Statements | 16 |
Apr 1, 2023 | ||||||||||||||||||||||||||||||||||||||
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 | $ | 966 | $ | — | $ | 966 | $ | (471) | $ | (495) | $ | — | ||||||||||||||||||||||||||
Reverse repurchase agreements | 1,700 | — | 1,700 | — | (1,700) | — | ||||||||||||||||||||||||||||||||
Total assets | 2,666 | — | 2,666 | (471) | (2,195) | — | ||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||
Derivative liabilities subject to master netting arrangements | 935 | — | 935 | (471) | (392) | 72 | ||||||||||||||||||||||||||||||||
Total liabilities | $ | 935 | $ | — | $ | 935 | $ | (471) | $ | (392) | $ | 72 |
Dec 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Gross Amounts Not Offset in the Balance Sheet | ||||||||||||||||||||||||||||||||||||||
(In Millions) | Gross Amounts Recognized | Gross Amounts Offset in the Balance Sheet | Net Amounts Presented in the Balance Sheet | Financial Instruments | Cash and Non-Cash Collateral Received or Pledged | Net Amount | ||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||
Derivative assets subject to master netting arrangements | $ | 1,231 | $ | — | $ | 1,231 | $ | (546) | $ | (682) | $ | 3 | ||||||||||||||||||||||||||
Reverse repurchase agreements | 1,701 | — | 1,701 | — | (1,701) | — | ||||||||||||||||||||||||||||||||
Total assets | 2,932 | — | 2,932 | (546) | (2,383) | 3 | ||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||
Derivative liabilities subject to master netting arrangements | 1,337 | — | 1,337 | (546) | (712) | 79 | ||||||||||||||||||||||||||||||||
Total liabilities | $ | 1,337 | $ | — | $ | 1,337 | $ | (546) | $ | (712) | $ | 79 |
![]() | Financial Statements | Notes to Financial Statements | 17 |
Gains (Losses) Recognized in Consolidated Condensed Statements of Income on Derivatives | ||||||||||||||
Three Months Ended | ||||||||||||||
(In Millions) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Interest rate contracts | $ | 192 | $ | (711) | ||||||||||
Hedged items | (192) | 711 | ||||||||||||
Total | $ | — | $ | — |
Line Item in the Consolidated Condensed Balance Sheets 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) | ||||||||||||||||||||||||
(In Millions) | Apr 1, 2023 | Dec 31, 2022 | Apr 1, 2023 | Dec 31, 2022 | ||||||||||||||||||||||
Long-term debt | $ | (11,413) | $ | (11,221) | $ | 584 | $ | 776 |
Three Months Ended | ||||||||||||||||||||
(In Millions) | Location of Gains (Losses) Recognized in Income on Derivatives | Apr 1, 2023 | Apr 2, 2022 | |||||||||||||||||
Foreign currency contracts | Interest and other, net | $ | 1 | $ | 158 | |||||||||||||||
Interest rate contracts | Interest and other, net | (34) | 94 | |||||||||||||||||
Other | Various | 115 | (134) | |||||||||||||||||
Total | $ | 82 | $ | 118 |
Note 12 : | Contingencies |
![]() | Financial Statements | Notes to Financial Statements | 18 |
![]() | Financial Statements | Notes to Financial Statements | 19 |
![]() | Financial Statements | Notes to Financial Statements | 20 |
Key Terms | |||||
Term | Definition | |||||||||||||
5G | The fifth-generation mobile network, which brings dramatic improvements in network speeds and latency, and which we view as a transformative technology and opportunity for many industries | |||||||||||||
ADAS | Advanced driver-assistance systems | |||||||||||||
ASP | Average selling price | |||||||||||||
AXG | Advanced Computing and Graphics operating segment | |||||||||||||
CCG | Client Computing Group operating segment | |||||||||||||
CODM | Chief operating decision maker | |||||||||||||
CPU | Processor or central processing unit | |||||||||||||
DCAI | Data Center and Artificial Intelligence operating segment | |||||||||||||
EC | European Commission | |||||||||||||
EPS | Earnings per share | |||||||||||||
Form 10-K | Annual Report on Form 10-K for the year ended December 31, 2022 | |||||||||||||
Form 10-Q | Quarterly Report on Form 10-Q for the quarter ended April 1, 2023 | |||||||||||||
FPGA | Field-programmable gate array | |||||||||||||
GPU | Graphics processing unit | |||||||||||||
IDM | Integrated device manufacturer, a semiconductor company that both designs and builds chips | |||||||||||||
IFS | Intel Foundry Services operating segment | |||||||||||||
IP | Intellectual property | |||||||||||||
IPO | Initial public offering | |||||||||||||
MD&A | Management's Discussion and Analysis | |||||||||||||
MG&A | Marketing, general, and administrative | |||||||||||||
MNC | Multinational corporation | |||||||||||||
NAND | NAND flash memory | |||||||||||||
Network Xeon | Part of the Intel Xeon processor family designed for network and edge solutions | |||||||||||||
NEX | Networking and Edge operating segment | |||||||||||||
nm | Nanometer | |||||||||||||
ODM | Original design manufacturer | |||||||||||||
R&D | Research and development | |||||||||||||
RSU | Restricted stock unit | |||||||||||||
SEC | US Securities and Exchange Commission | |||||||||||||
SoC | A 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 products in CCG, DCAI, and NEX. In our DCAI and NEX businesses, we offer SoCs across many market segments for a variety of applications, including products targeted for 5G base stations and network infrastructure | |||||||||||||
SSD | Solid-state drive | |||||||||||||
US | United States | |||||||||||||
US GAAP | US Generally Accepted Accounting Principles | |||||||||||||
VIE | Variable interest entity | |||||||||||||
VLSI | VLSI Technology LLC | |||||||||||||
vRAN | Virtualized radio access network | |||||||||||||
![]() | Financial Statements | Notes to Financial Statements | 21 |
Management's Discussion and Analysis | |||||
CCG Revenue $B | CCG Operating Income $B |
■ Notebook | ■ Desktop | ■ Other |
Revenue Summary |
Q1 2023 vs. Q1 2022 |
![]() | MD&A | 22 |
Operating Income Summary |
(In Millions) | ||||||||
$ | 520 | Q1 2023 CCG Operating Income | ||||||
(2,358) | Lower product margin primarily from notebook and desktop revenue | |||||||
(164) | Higher desktop unit cost primarily from increased mix of Intel 7 products | |||||||
(120) | Higher period charges related to excess capacity charges | |||||||
251 | Lower period charges primarily driven by a decrease in product ramp costs | |||||||
200 | Lower operating expenses driven by various cost-cutting measures | |||||||
(11) | Other | |||||||
$ | 2,722 | Q1 2022 CCG Operating Income |
![]() | MD&A | 23 |
DCAI Revenue $B | DCAI Operating Income (Loss) $B |
Revenue Summary |
Q1 2023 vs. Q1 2022 |
Operating Income (Loss) Summary |
(In Millions) | ||||||||
$ | (518) | Q1 2023 DCAI Operating Income (Loss) | ||||||
(1,935) | Lower server product margin due to lower server revenue, partially offset by an increase in product margin from higher DCAI other product revenue | |||||||
(257) | Higher server unit cost from increased mix of 10nm SuperFin products | |||||||
(154) | Higher period charges related to excess capacity charges | |||||||
199 | Lower operating expenses driven by various cost-cutting measures | |||||||
193 | Lower period charges primarily driven by a decrease in product ramp costs | |||||||
135 | Lower period charges driven by the sell-through of previously reserved inventory | |||||||
(92) | Other | |||||||
$ | 1,393 | Q1 2022 DCAI Operating Income (Loss) |
![]() | MD&A | 24 |
NEX Revenue $B | NEX Operating Income (Loss) $B |
Revenue Summary |
Q1 2023 vs. Q1 2022 |
Operating Income (Loss) Summary |
(In Millions) | ||||||||
$ | (300) | Q1 2023 NEX Operating Income (Loss) | ||||||
(475) | Lower product margin from lower Edge, Network Xeon, and Ethernet revenue | |||||||
(139) | Higher period charges driven by inventory reserves taken in Q1 2023 | |||||||
(102) | Other, including lower operating expenses driven by various cost-cutting measures | |||||||
$ | 416 | Q1 2022 NEX Operating Income (Loss) |
![]() | MD&A | 25 |
Mobileye Revenue $B | Mobileye Operating Income $B |
Revenue and Operating Income Summary |
Q1 2023 vs. Q1 2022 |
![]() | MD&A | 26 |
IFS Revenue $B | IFS Operating Income (Loss) $B |
Revenue and Operating Income (Loss) Summary |
Q1 2023 vs. Q1 2022 |
![]() | MD&A | 27 |
Consolidated Condensed Results of Operations | |||||
Three Months Ended | ||||||||||||||||||||||||||
Q1 2023 | Q1 2022 | |||||||||||||||||||||||||
(In Millions, Except Per Share Amounts) | Amount | % of Net Revenue | Amount | % of Net Revenue | ||||||||||||||||||||||
Net revenue | $ | 11,715 | 100.0 | % | $ | 18,353 | 100.0 | % | ||||||||||||||||||
Cost of sales | 7,707 | 65.8 | % | 9,109 | 49.6 | % | ||||||||||||||||||||
Gross margin | 4,008 | 34.2 | % | 9,244 | 50.4 | % | ||||||||||||||||||||
Research and development | 4,109 | 35.1 | % | 4,362 | 23.8 | % | ||||||||||||||||||||
Marketing, general, and administrative | 1,303 | 11.1 | % | 1,752 | 9.5 | % | ||||||||||||||||||||
Restructuring and other charges | 64 | 0.5 | % | (1,211) | (6.6) | % | ||||||||||||||||||||
Operating income (loss) | (1,468) | (12.5) | % | 4,341 | 23.7 | % | ||||||||||||||||||||
Gains (losses) on equity investments, net | 169 | 1.4 | % | 4,323 | 23.6 | % | ||||||||||||||||||||
Interest and other, net | 141 | 1.2 | % | 997 | 5.4 | % | ||||||||||||||||||||
Income (loss) before taxes | (1,158) | (9.9) | % | 9,661 | 52.6 | % | ||||||||||||||||||||
Provision for taxes | 1,610 | 13.7 | % | 1,548 | 8.4 | % | ||||||||||||||||||||
Net income (loss) | (2,768) | (23.6) | % | 8,113 | 44.2 | % | ||||||||||||||||||||
Less: Net income (loss) attributable to non-controlling interests | (10) | (0.1) | % | — | — | % | ||||||||||||||||||||
Net income (loss) attributable to Intel | $ | (2,758) | (23.5) | % | $ | 8,113 | 44.2 | % | ||||||||||||||||||
Earnings (loss) per share attributable to Intel—diluted | $ | (0.66) | $ | 1.98 | ||||||||||||||||||||||
![]() | MD&A | 28 |
Segment Revenue Walk $B | |||||
![]() | MD&A | 29 |
Gross Margin $B | ||
(In Millions) | ||||||||
$ | 4,008 | Q1 2023 Gross Margin | ||||||
(2,358) | Lower product margin primarily from lower notebook and desktop revenue | |||||||
(1,935) | Lower server product margin due to lower revenue, partially offset by an increase in product margin from higher DCAI other product revenue | |||||||
(475) | Lower product margin from lower Edge, Network Xeon, and Ethernet revenue | |||||||
(421) | Higher unit cost primarily from increased mix of Intel 7 and 10nm SuperFin products | |||||||
(352) | Higher period charges related to excess capacity charges | |||||||
444 | Lower period charges primarily driven by a decrease in product ramp costs | |||||||
(139) | Other | |||||||
$ | 9,244 | Q1 2022 Gross Margin |
![]() | MD&A | 30 |
Research and Development $B | Marketing, General, and Administrative $B | ||||||||||
Research and Development |
R&D decreased by $253 million, or 6%, driven by the following: | |||||
- | Lower incentive-based cash compensation | ||||
+ | Increased investments in our process technology roadmap and additional corporate spending to drive strategic growth, partially offset by the effects of various cost-cutting measures | ||||
Marketing, General, and Administrative |
MG&A decreased by $449 million, or 26%, driven by the following: | |||||
- | Lower corporate spending as a result of various cost-cutting measures | ||||
- | Lower incentive-based cash compensation | ||||
![]() | MD&A | 31 |
(In Millions) | Q1 2023 | Q1 2022 | ||||||||||||
Employee severance and benefit arrangements | $ | (39) | $ | 5 | ||||||||||
Litigation charges and other | 77 | (1,216) | ||||||||||||
Asset impairment charges | 26 | — | ||||||||||||
Total restructuring and other charges | $ | 64 | $ | (1,211) |
(In Millions) | Q1 2023 | Q1 2022 | |||||||||||||||
Ongoing mark-to-market adjustments on marketable equity securities | $ | 188 | $ | (430) | |||||||||||||
Observable price adjustments on non-marketable equity securities | 10 | 71 | |||||||||||||||
Impairment charges | (36) | (23) | |||||||||||||||
Sale of equity investments and other | 7 | 4,705 | |||||||||||||||
Total gains (losses) on equity investments, net | $ | 169 | $ | 4,323 | |||||||||||||
Interest and other, net | $ | 141 | $ | 997 |
(In Millions) | Q1 2023 | Q1 2022 | ||||||||||||
Income (loss) before taxes | $ | (1,158) | $ | 9,661 | ||||||||||
Provision for taxes | $ | 1,610 | $ | 1,548 | ||||||||||
Effective tax rate | (139.0) | % | 16.0 | % |
![]() | MD&A | 32 |
(In Millions) | Apr 1, 2023 | Dec 31, 2022 | ||||||||||||
Cash and cash equivalents | $ | 8,232 | $ | 11,144 | ||||||||||
Short-term investments | 19,302 | 17,194 | ||||||||||||
Loans receivable and other | 64 | 463 | ||||||||||||
Total cash and investments1 | $ | 27,598 | $ | 28,801 | ||||||||||
Total debt | $ | 50,273 | $ | 42,051 |
Cash from (used for) Operations $B | Capital Expenditures $B | Dividends $B |
![]() | MD&A | 33 |
Three Months Ended | ||||||||||||||
(In Millions) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Net cash provided by (used for) operating activities | $ | (1,785) | $ | 5,891 | ||||||||||
Net cash used for investing activities | (8,521) | (2,639) | ||||||||||||
Net cash provided by (used for) financing activities | 7,394 | (1,864) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | (2,912) | $ | 1,388 |
![]() | MD&A | 34 |
![]() | MD&A | 35 |
Three Months Ended | ||||||||||||||
Apr 1, 2023 | Apr 2, 2022 | |||||||||||||
Gross margin percentage | 34.2 | % | 50.4 | % | ||||||||||
Acquisition-related adjustments | 2.8 | % | 1.9 | % | ||||||||||
Share-based compensation | 1.4 | % | 0.8 | % | ||||||||||
Non-GAAP gross margin percentage | 38.4 | % | 53.1 | % | ||||||||||
Earnings (loss) per share attributable to Intel—diluted | $ | (0.66) | $ | 1.98 | ||||||||||
Acquisition-related adjustments | 0.09 | 0.10 | ||||||||||||
Share-based compensation | 0.18 | 0.17 | ||||||||||||
Restructuring and other charges | 0.01 | (0.30) | ||||||||||||
(Gains) losses on equity investments, net | (0.04) | (1.05) | ||||||||||||
(Gains) losses from divestiture | (0.01) | (0.27) | ||||||||||||
Total adjustments attributable to non-controlling interest | — | — | ||||||||||||
Income tax effects | 0.39 | 0.24 | ||||||||||||
Non-GAAP earnings (loss) per share attributable to Intel—diluted | $ | (0.04) | $ | 0.87 | ||||||||||
Three Months Ended | ||||||||||||||
(In Millions) | Apr 1, 2023 | Apr 2, 2022 | ||||||||||||
Net cash provided by (used for) operating activities | $ | (1,785) | $ | 5,891 | ||||||||||
Net additions to property, plant and equipment | (6,964) | (4,603) | ||||||||||||
Payments on finance leases | (15) | (299) | ||||||||||||
Sale of equity investment | — | 4,561 | ||||||||||||
Adjusted free cash flow | $ | (8,764) | $ | 5,550 | ||||||||||
Net cash used for investing activities | $ | (8,521) | $ | (2,639) | ||||||||||
Net cash provided by (used for) financing activities | $ | 7,394 | $ | (1,864) | ||||||||||
![]() | MD&A | 36 |
Other Key Information | |||||
![]() | Other Key Information | 37 |
![]() | Other Key Information | 38 |
Incorporated by Reference | ||||||||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | File Number | Exhibit | Filing Date | Filed or Furnished Herewith | ||||||||||||||||||||||||||||||||
3.1 | 8-K | 000-06217 | 3.1 | 5/22/2006 | ||||||||||||||||||||||||||||||||||
3.2 | 8-K | 000-06217 | 3.2 | 3/16/2021 | ||||||||||||||||||||||||||||||||||
4.1 | 8-K | 000-06217 | 4.1 | 2/10/2023 | ||||||||||||||||||||||||||||||||||
10.1† | 10-K | 000-6217 | 10.5 | 1/27/2023 | ||||||||||||||||||||||||||||||||||
10.2† | X | |||||||||||||||||||||||||||||||||||||
31.1 | X | |||||||||||||||||||||||||||||||||||||
31.2 | X | |||||||||||||||||||||||||||||||||||||
32.1 | X | |||||||||||||||||||||||||||||||||||||
101 | Inline XBRL Document Set for the consolidated condensed financial statements and accompanying notes in Consolidated Condensed Financial Statements and Supplemental Details | X | ||||||||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File - formatted in Inline XBRL and included as Exhibit 101 | X |
![]() | Other Key Information | 39 |
Item Number | Item | |||||||
Part I - Financial Information | ||||||||
Item 1. | Financial Statements | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations: | |||||||
Liquidity and capital resources | ||||||||
Results of operations | ||||||||
Critical accounting estimates | ||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | Page 37 | ||||||
Item 4. | Controls and Procedures | Page 37 | ||||||
Part II - Other Information | ||||||||
Item 1. | Legal Proceedings | |||||||
Item 1A. | Risk Factors | Page 37 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | Page 37 | ||||||
Item 3. | Defaults Upon Senior Securities | Not applicable | ||||||
Item 4. | Mine Safety Disclosures | Not applicable | ||||||
Item 5. | Other Information | |||||||
Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934 | Page 38 | |||||||
Item 6. | Exhibits | |||||||
Signatures | Page 41 |
![]() | Other Key Information | 40 |
INTEL CORPORATION (Registrant) | |||||||||||||||||
Date: | April 27, 2023 | By: | /s/ DAVID ZINSNER | ||||||||||||||
David Zinsner | |||||||||||||||||
Executive Vice President, Chief Financial Officer, and Principal Financial Officer | |||||||||||||||||
Date: | April 27, 2023 | By: | /s/ SCOTT GAWEL | ||||||||||||||
Scott Gawel | |||||||||||||||||
Corporate Vice President, Chief Accounting Officer, and Principal Accounting Officer |
![]() | 41 |
1 Year Intel Chart |
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