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Standard/Description | Effective Date and Adoption Considerations | Effect on Financial Statements or Other Significant Matters |
Intangibles - Goodwill and Other - Simplifying the Test for Goodwill Impairment. This accounting standard update eliminates Step 2 from the existing guidance to simplify how goodwill impairment tests are performed. With the elimination of this step, a goodwill impairment test is performed by comparing the fair value of a reporting unit to its carrying value. An impairment charge is recognized for the amount by which the reporting unit's carrying value exceeds its fair value. | We elected to early adopt this accounting standard update in the second quarter of 2017 on a prospective basis. | We expect the adoption of this update to simplify our annual goodwill impairment testing process, by eliminating the need to estimate the implied fair value of a reporting unit’s goodwill, if its respective carrying value exceeds fair value. |
Standard/Description | Effective Date and Adoption Considerations | Effect on Financial Statements or Other Significant Matters |
Compensation - Retirement Benefits - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This amended standard was issued to provide additional guidance on the presentation of net benefit cost in the income statement and on the components eligible for capitalization in assets. The service cost component of the net periodic benefit cost will continue to be reported within operating income on the consolidated income statement. All other non-service components are required to be presented separately outside operating income and only service costs will be eligible for inventory capitalization. | Effective in the first quarter of 2018. Changes to the presentation of benefit costs are required to be adopted retrospectively while changes to the capitalization of service costs into inventories are required to be adopted prospectively. The standard permits, as a practical expedient, to use the amounts disclosed in the Retirement Benefit Plans footnote for the prior comparative periods as the estimation basis for applying the retrospective presentation requirement. | We expect the adoption of the amended standard to result in the reclassification of approximately $260 million from non-service components above the subtotal of operating income to interest and other, net, for the year ended December 31, 2016. We are continuing to assess the impacts of adoption to our 2017 financial statements. |
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Client Computing Group (CCG) |
Includes platforms designed for notebooks, 2 in 1 systems, desktops (including all-in-ones and high-end enthusiast PCs), tablets, phones, wireless and wired connectivity products, and mobile communication components. |
Data Center Group (DCG) |
Includes workload-optimized platforms for compute, storage, and network functions and related products designed for enterprise, cloud, and communication infrastructure market segments. |
Internet of Things Group (IOTG) |
Includes platforms designed for Internet of Things market segments, including retail, transportation, industrial, video, buildings and smart cities, along with a broad range of other market segments. |
Non-Volatile Memory Solutions Group (NSG) |
Includes Intel® Optane™ SSD products and NAND flash memory products primarily used in solid-state drives. |
Programmable Solutions Group (PSG) |
Includes programmable semiconductors primarily field-programmable gate array (FPGAs) and related products for a broad range of market segments, including communications, data center, industrial, military, and automotive. |
All other |
Includes results from our other non-reportable segments and corporate-related charges. |
• | results of operations from non-reportable segments; |
• | amounts included within restructuring and other charges; |
• | a portion of profit-dependent compensation and other expenses not allocated to the operating segments; |
• | divested businesses for which discrete operating results are not regularly reviewed by our Chief Operating Decision Maker (CODM), who is our Chief Executive Officer; |
• | results of operations of start-up businesses that support our initiatives, including our foundry business; and |
• | acquisition-related costs, including amortization and any impairment of acquisition-related intangibles and goodwill. |
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
Net revenue: | ||||||||||||||||
Client Computing Group | ||||||||||||||||
Platform | $ | 7,634 | $ | 6,938 | $ | 15,031 | $ | 14,137 | ||||||||
Other | 579 | 400 | 1,158 | 750 | ||||||||||||
8,213 | 7,338 | 16,189 | 14,887 | |||||||||||||
Data Center Group | ||||||||||||||||
Platform | 4,026 | 3,718 | 7,905 | 7,425 | ||||||||||||
Other | 346 | 309 | 699 | 601 | ||||||||||||
4,372 | 4,027 | 8,604 | 8,026 | |||||||||||||
Internet of Things Group | ||||||||||||||||
Platform | 614 | 497 | 1,246 | 1,068 | ||||||||||||
Other | 106 | 75 | 195 | 155 | ||||||||||||
720 | 572 | 1,441 | 1,223 | |||||||||||||
Non-Volatile Memory Solutions Group | 874 | 554 | 1,740 | 1,111 | ||||||||||||
Programmable Solutions Group | 440 | 465 | 865 | 824 | ||||||||||||
All other | 144 | 577 | 720 | 1,164 | ||||||||||||
Total net revenue | $ | 14,763 | $ | 13,533 | $ | 29,559 | $ | 27,235 | ||||||||
Operating income (loss): | ||||||||||||||||
Client Computing Group | $ | 3,025 | $ | 1,911 | $ | 6,056 | $ | 3,796 | ||||||||
Data Center Group | 1,661 | 1,765 | 3,148 | 3,529 | ||||||||||||
Internet of Things Group | 139 | 89 | 244 | 212 | ||||||||||||
Non-Volatile Memory Solutions Group | (110 | ) | (224 | ) | (239 | ) | (319 | ) | ||||||||
Programmable Solutions Group | 97 | (62 | ) | 189 | (262 | ) | ||||||||||
All other | (985 | ) | (2,161 | ) | (1,972 | ) | (3,070 | ) | ||||||||
Total operating income | $ | 3,827 | $ | 1,318 | $ | 7,426 | $ | 3,886 |
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(In Millions) | Jul 1, 2017 | Dec 31, 2016 | ||||||
Raw materials | $ | 1,014 | $ | 695 | ||||
Work in process | 3,775 | 3,190 | ||||||
Finished goods | 1,535 | 1,668 | ||||||
Total inventories | $ | 6,324 | $ | 5,553 |
(In Millions) | Jul 1, 2017 | Dec 31, 2016 | ||||||
Deferred income on shipments of components to distributors | $ | 1,416 | $ | 1,475 | ||||
Deferred income from software, services and other | 171 | 243 | ||||||
Current deferred income | $ | 1,587 | $ | 1,718 |
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
Share of equity method investee losses, net | $ | (8 | ) | $ | (12 | ) | $ | (19 | ) | $ | (20 | ) | ||||
Impairments | (555 | ) | (60 | ) | (603 | ) | (89 | ) | ||||||||
Gains on sales, net | 802 | 419 | 1,076 | 515 | ||||||||||||
Dividends | 66 | 74 | 68 | 74 | ||||||||||||
Other, net | 37 | 57 | 72 | 20 | ||||||||||||
Total gains (losses) on equity investments, net | $ | 342 | $ | 478 | $ | 594 | $ | 500 |
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
Interest income | $ | 136 | $ | 51 | $ | 212 | $ | 103 | ||||||||
Interest expense | (156 | ) | (187 | ) | (302 | ) | (395 | ) | ||||||||
Other, net | 423 | 10 | 457 | 84 | ||||||||||||
Total interest and other, net | $ | 403 | $ | (126 | ) | $ | 367 | $ | (208 | ) |
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Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
2016 Restructuring Program | $ | (42 | ) | $ | 1,414 | $ | (53 | ) | $ | 1,414 | ||||||
Other charges | 147 | — | 238 | — | ||||||||||||
Total restructuring and other charges | $ | 105 | $ | 1,414 | $ | 185 | $ | 1,414 |
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
Employee severance and benefit arrangements | $ | (49 | ) | $ | 1,414 | $ | (70 | ) | $ | 1,414 | ||||||
Asset impairment and other charges | 7 | — | 17 | — | ||||||||||||
Total restructuring and other charges | $ | (42 | ) | $ | 1,414 | $ | (53 | ) | $ | 1,414 |
(In Millions) | Employee Severance and Benefits | Asset Impairments and Other | Total | |||||||||
Accrued restructuring balance as of December 31, 2016 | $ | 585 | $ | 10 | $ | 595 | ||||||
Additional accruals | — | 17 | 17 | |||||||||
Adjustments | (70 | ) | — | (70 | ) | |||||||
Cash payments | (217 | ) | (16 | ) | (233 | ) | ||||||
Non-cash settlements | — | (1 | ) | (1 | ) | |||||||
Accrued restructuring balance as of July 1, 2017 | $ | 298 | $ | 10 | $ | 308 |
Three Months Ended | Six Months Ended | |||||||
(In Millions) | Jul 1, 2017 | Jul 1, 2017 | ||||||
ISecG separation costs | $ | 70 | $ | 143 | ||||
Other | 77 | 95 | ||||||
Total other charges | $ | 147 | $ | 238 |
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July 1, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||
(In Millions) | Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||
Corporate debt | $ | 6,115 | $ | 13 | $ | (7 | ) | $ | 6,121 | $ | 3,847 | $ | 4 | $ | (14 | ) | $ | 3,837 | ||||||||||||||
Financial institution instruments | 8,011 | 7 | (6 | ) | 8,012 | 6,098 | 5 | (11 | ) | 6,092 | ||||||||||||||||||||||
Government debt | 1,778 | 3 | (5 | ) | 1,776 | 1,581 | — | (8 | ) | 1,573 | ||||||||||||||||||||||
Marketable equity securities | 2,560 | 3,344 | — | 5,904 | 2,818 | 3,363 | (1 | ) | 6,180 | |||||||||||||||||||||||
Total available-for-sale investments | $ | 18,464 | $ | 3,367 | $ | (18 | ) | $ | 21,813 | $ | 14,344 | $ | 3,372 | $ | (34 | ) | $ | 17,682 |
(In Millions) | Fair Value | |||
Due in 1 year or less | $ | 8,408 | ||
Due in 1–2 years | 1,434 | |||
Due in 2–5 years | 2,976 | |||
Due after 5 years | 71 | |||
Instruments not due at a single maturity date | 3,020 | |||
Total | $ | 15,909 |
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(In Millions) | Apr 3, 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 |
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July 1, 2017 | ||||||||||||
(In Millions) | Gross Assets | Accumulated Amortization | Net | |||||||||
Acquisition-related developed technology | $ | 6,591 | $ | (1,441 | ) | $ | 5,150 | |||||
Acquisition-related customer relationships | 1,340 | (224 | ) | 1,116 | ||||||||
Acquisition-related brands | 79 | (19 | ) | 60 | ||||||||
Licensed technology and patents | 3,184 | (1,451 | ) | 1,733 | ||||||||
Identified intangible assets subject to amortization | 11,194 | (3,135 | ) | 8,059 | ||||||||
In-process research and development | 808 | — | 808 | |||||||||
Identified intangible assets not subject to amortization | 808 | — | 808 | |||||||||
Total identified intangible assets | $ | 12,002 | $ | (3,135 | ) | $ | 8,867 |
December 31, 2016 | ||||||||||||
(In Millions) | Gross Assets | Accumulated Amortization | Net | |||||||||
Acquisition-related developed technology | $ | 7,405 | $ | (1,836 | ) | $ | 5,569 | |||||
Acquisition-related customer relationships | 1,449 | (260 | ) | 1,189 | ||||||||
Acquisition-related brands | 87 | (21 | ) | 66 | ||||||||
Licensed technology and patents | 3,285 | (1,423 | ) | 1,862 | ||||||||
Identified intangible assets subject to amortization | 12,226 | (3,540 | ) | 8,686 | ||||||||
In-process research and development | 808 | — | 808 | |||||||||
Identified intangible assets not subject to amortization | 808 | — | 808 | |||||||||
Total identified intangible assets | $ | 13,034 | $ | (3,540 | ) | $ | 9,494 |
Three Months Ended | Six Months Ended | |||||||||||||||||
(In Millions) | Location | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | |||||||||||||
Acquisition-related developed technology | Cost of sales | $ | 198 | $ | 235 | $ | 407 | $ | 470 | |||||||||
Acquisition-related customer relationships | Amortization of acquisition-related intangibles | 33 | 82 | 68 | 165 | |||||||||||||
Acquisition-related brands | Amortization of acquisition-related intangibles | 4 | 7 | 7 | 14 | |||||||||||||
Licensed technology and patents | Cost of sales | 78 | 71 | 152 | 142 | |||||||||||||
Total amortization expense | $ | 313 | $ | 395 | $ | 634 | $ | 791 |
(In Millions) | Remainder of 2017 | 2018 | 2019 | 2020 | 2021 | |||||||||||||||
Acquisition-related developed technology | $ | 394 | $ | 784 | $ | 782 | $ | 750 | $ | 715 | ||||||||||
Acquisition-related customer relationships | 67 | 122 | 121 | 119 | 119 | |||||||||||||||
Acquisition-related brands | 7 | 13 | 13 | 13 | 14 | |||||||||||||||
Licensed technology and patents | 132 | 231 | 219 | 194 | 179 | |||||||||||||||
Total future amortization expenses | $ | 600 | $ | 1,150 | $ | 1,135 | $ | 1,076 | $ | 1,027 |
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(In Millions) | Jul 1, 2017 | Dec 31, 2016 | ||||||
Equity method investments | $ | 2,266 | $ | 1,328 | ||||
Non-marketable cost method investments | 2,719 | 3,098 | ||||||
Non-current deferred tax assets | 753 | 907 | ||||||
Pre-payments for property, plant and equipment | 422 | 347 | ||||||
Loans receivable | 2,725 | 236 | ||||||
Reverse repurchase agreements | — | 250 | ||||||
Other | 1,121 | 993 | ||||||
Total other long-term assets | $ | 10,006 | $ | 7,159 |
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(In Millions) | Jul 1, 2017 | Dec 31, 2016 | ||||||
Drafts payable | $ | 13 | $ | 25 | ||||
Current portion of long-term debt | 4,125 | 4,618 | ||||||
Less: debt issuance costs associated with the current portion of long-term debt | (8 | ) | (9 | ) | ||||
Total short-term debt | $ | 4,130 | $ | 4,634 |
(In Millions) | Jul 1, 2017 | Dec 31, 2016 | ||||||
Floating-rate senior notes: | ||||||||
$700, three-month LIBOR plus 0.08%, due May 2020 | $ | 700 | $ | — | ||||
$800, three-month LIBOR plus 0.35%, due May 2022 | 800 | — | ||||||
Fixed-rate senior notes: | ||||||||
$500, 1.75%, due May 2017 | — | 501 | ||||||
$3,000, 1.35%, due December 2017 | 3,000 | 2,999 | ||||||
$600, 2.50%, due November 2018 | 603 | 604 | ||||||
A$250, 3.25%, due December 20191 | 191 | 180 | ||||||
$1,000, 1.85%, due May 2020 | 1,000 | — | ||||||
$1,750, 2.45%, due July 2020 | 1,749 | 1,749 | ||||||
$500, 1.70%, due May 2021 | 499 | 499 | ||||||
$2,000, 3.30%, due October 2021 | 1,999 | 1,988 | ||||||
$750, 2.35%, due May 2022 | 748 | — | ||||||
$1,000, 3.10%, due July 2022 | 995 | 987 | ||||||
A$550, 4.00%, due December 20221 | 419 | 394 | ||||||
$1,500, 2.70%, due December 2022 | 1,493 | 1,480 | ||||||
$400, 4.10%, due November 2023 | 422 | 424 | ||||||
$1,250, 2.88%, due May 2024 | 1,241 | — | ||||||
$600, 2.70%, due June 2024 | 600 | — | ||||||
$2,250, 3.70%, due July 2025 | 2,176 | 2,148 | ||||||
$1,000, 2.60%, due May 2026 | 995 | 983 | ||||||
$1,000, 3.15%, due May 2027 | 997 | — | ||||||
$750, 4.00%, due December 2032 | 745 | 745 | ||||||
$1,500, 4.80%, due October 2041 | 1,491 | 1,491 | ||||||
$925, 4.25%, due December 2042 | 924 | 924 | ||||||
$2,000, 4.90%, due July 2045 | 1,999 | 1,999 | ||||||
$1,007, 4.90%, due August 2045 | 1,005 | 995 | ||||||
$915, 4.70%, due December 2045 | 905 | 894 | ||||||
$1,250, 4.10%, due May 2046 | 1,243 | 1,243 | ||||||
$1,000, 4.10%, due May 2047 | 994 | — | ||||||
Junior subordinated convertible debentures: | ||||||||
$1,600, 2.95%, due December 2035 | 1,000 | 992 | ||||||
$2,000, 3.25%, due August 2039 | 1,126 | 1,118 | ||||||
Long-term debt | 32,059 | 25,337 | ||||||
Less: current portion of long-term debt | (4,125 | ) | (4,618 | ) | ||||
Less: debt issuance costs | (79 | ) | (70 | ) | ||||
Total long-term debt | $ | 27,855 | $ | 20,649 |
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 15: Derivative Financial Instruments." |
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July 1, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||
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 | $ | — | $ | 2,645 | $ | — | $ | 2,645 | $ | — | $ | 498 | $ | — | $ | 498 | ||||||||||||||||
Financial institution instruments 1 | 3,020 | 2,139 | — | 5,159 | 1,920 | 811 | — | 2,731 | ||||||||||||||||||||||||
Government debt 2 | — | 466 | — | 466 | — | 332 | — | 332 | ||||||||||||||||||||||||
Reverse repurchase agreements | — | 2,335 | — | 2,335 | — | 768 | — | 768 | ||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||||||||
Corporate debt | — | 1,654 | 6 | 1,660 | — | 1,332 | 6 | 1,338 | ||||||||||||||||||||||||
Financial institution instruments 1 | — | 1,221 | — | 1,221 | — | 1,603 | — | 1,603 | ||||||||||||||||||||||||
Government debt 2 | — | 277 | — | 277 | — | 284 | — | 284 | ||||||||||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||||||||
Asset-backed securities | — | 22 | — | 22 | — | 87 | — | 87 | ||||||||||||||||||||||||
Corporate debt | — | 2,461 | — | 2,461 | — | 2,847 | — | 2,847 | ||||||||||||||||||||||||
Financial institution instruments 1 | 92 | 1,544 | — | 1,636 | 36 | 1,608 | — | 1,644 | ||||||||||||||||||||||||
Government debt 2 | 31 | 6,934 | — | 6,965 | 32 | 3,704 | — | 3,736 | ||||||||||||||||||||||||
Other current assets: | ||||||||||||||||||||||||||||||||
Derivative assets | — | 326 | — | 326 | — | 382 | — | 382 | ||||||||||||||||||||||||
Loans receivable | — | 86 | — | 86 | — | 326 | — | 326 | ||||||||||||||||||||||||
Marketable equity securities | 5,472 | 432 | — | 5,904 | 6,180 | — | — | 6,180 | ||||||||||||||||||||||||
Other long-term investments: | ||||||||||||||||||||||||||||||||
Corporate debt | — | 1,811 | 5 | 1,816 | — | 1,995 | 6 | 2,001 | ||||||||||||||||||||||||
Financial institution instruments 1 | — | 1,632 | — | 1,632 | — | 1,758 | — | 1,758 | ||||||||||||||||||||||||
Government debt 2 | — | 1,033 | — | 1,033 | — | 957 | — | 957 | ||||||||||||||||||||||||
Other long-term assets: | ||||||||||||||||||||||||||||||||
Derivative assets | — | 64 | 9 | 73 | — | 31 | 9 | 40 | ||||||||||||||||||||||||
Loans receivable | — | 525 | — | 525 | — | 236 | — | 236 | ||||||||||||||||||||||||
Total assets measured and recorded at fair value | 8,615 | 27,607 | 20 | 36,242 | 8,168 | 19,559 | 21 | 27,748 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Other accrued liabilities: | ||||||||||||||||||||||||||||||||
Derivative liabilities | — | 444 | — | 444 | — | 371 | — | 371 | ||||||||||||||||||||||||
Other long-term liabilities: | ||||||||||||||||||||||||||||||||
Derivative liabilities | — | 125 | 12 | 137 | — | 179 | 33 | 212 | ||||||||||||||||||||||||
Total liabilities measured and recorded at fair value | $ | — | $ | 569 | $ | 12 | $ | 581 | $ | — | $ | 550 | $ | 33 | $ | 583 |
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 US Treasury securities. Level 2 investments consist primarily of US Agency notes and non-U.S. government debt. |
July 1, 2017 | ||||||||||||||||||||
(In Millions) | Carrying Amount | Fair Value Measured Using | Fair Value | |||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Grants receivable | $ | 440 | $ | — | $ | 440 | $ | — | $ | 440 | ||||||||||
Loans receivable1 | $ | 2,465 | $ | — | $ | 2,465 | $ | — | $ | 2,465 | ||||||||||
Non-marketable cost method investments | $ | 2,719 | $ | — | $ | — | $ | 3,457 | $ | 3,457 | ||||||||||
Reverse repurchase agreements | $ | 250 | $ | — | $ | 250 | $ | — | $ | 250 | ||||||||||
Short-term debt | $ | 4,117 | $ | — | $ | 4,697 | $ | — | $ | 4,697 | ||||||||||
Long-term debt | $ | 27,855 | $ | 17,980 | $ | 11,630 | $ | — | $ | 29,610 |
1 | Includes a loan receivable of $2.2 billion due from McAfee and TPG. The fair value of this loan receivable approximates its carrying value and we did not obtain or secure collateral against this obligation. For further information, see "Note 9: Acquisitions and Divestitures." |
December 31, 2016 | ||||||||||||||||||||
(In Millions) | Carrying Amount | Fair Value Measured Using | Fair Value | |||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Grants receivable | $ | 361 | $ | — | $ | 362 | $ | — | $ | 362 | ||||||||||
Loans receivable | $ | 265 | $ | — | $ | 265 | $ | — | $ | 265 | ||||||||||
Non-marketable cost method investments | $ | 3,098 | $ | — | $ | — | $ | 3,890 | $ | 3,890 | ||||||||||
Reverse repurchase agreements | $ | 250 | $ | — | $ | 250 | $ | — | $ | 250 | ||||||||||
Short-term debt | $ | 4,609 | $ | 3,006 | $ | 2,114 | $ | — | $ | 5,120 | ||||||||||
Long-term debt | $ | 20,649 | $ | 12,171 | $ | 9,786 | $ | — | $ | 21,957 |
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(In Millions) | Unrealized Holding Gains (Losses) on Available-for-Sale Investments | Unrealized Holding Gains (Losses) on Derivatives | Prior Service Credits (Costs) | Actuarial Gains (Losses) | Foreign Currency Translation Adjustment | Total | ||||||||||||||||||
December 31, 2016 | $ | 2,164 | $ | (259 | ) | $ | (40 | ) | $ | (1,240 | ) | $ | (519 | ) | $ | 106 | ||||||||
Other comprehensive income (loss) before reclassifications1 | 1,059 | 445 | — | 217 | 1 | 1,722 | ||||||||||||||||||
Amounts reclassified out of accumulated other comprehensive income | (1,046 | ) | 16 | (12 | ) | 40 | 507 | (495 | ) | |||||||||||||||
Tax effects | (4 | ) | (130 | ) | 2 | (27 | ) | — | (159 | ) | ||||||||||||||
Other comprehensive income (loss) | 9 | 331 | (10 | ) | 230 | 508 | 1,068 | |||||||||||||||||
July 1, 2017 | $ | 2,173 | $ | 72 | $ | (50 | ) | $ | (1,010 | ) | $ | (11 | ) | $ | 1,174 |
1 | In the second quarter of 2017, we froze future benefit accruals for our Ireland pension plan. |
Income Before Taxes Impact (In Millions) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
Comprehensive Income Components | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | Location | |||||||||||||
Unrealized holding gains (losses)1 on available-for-sale investments: | ||||||||||||||||||
$ | 783 | $ | 403 | $ | 1,046 | $ | 488 | Gains (losses) on equity investments, net | ||||||||||
783 | 403 | 1,046 | 488 | |||||||||||||||
Unrealized holding gains (losses) on derivatives: | ||||||||||||||||||
Foreign currency contracts | (27 | ) | (17 | ) | (47 | ) | (59 | ) | Cost of sales | |||||||||
2 | 7 | (14 | ) | (3 | ) | Research and development | ||||||||||||
(1 | ) | 3 | (6 | ) | (1 | ) | Marketing, general and administrative | |||||||||||
12 | 11 | 16 | 11 | Gains (losses) on equity investments, net | ||||||||||||||
(3 | ) | (17 | ) | 35 | 17 | Interest and other, net | ||||||||||||
(17 | ) | (13 | ) | (16 | ) | (35 | ) | |||||||||||
Amortization of pension and postretirement benefit components: | ||||||||||||||||||
Prior service credits (costs) | 14 | (2 | ) | 12 | (4 | ) | ||||||||||||
Actuarial gains (losses) | (18 | ) | (14 | ) | (40 | ) | (26 | ) | ||||||||||
(4 | ) | (16 | ) | (28 | ) | (30 | ) | |||||||||||
Currency translation adjustment | (507 | ) | — | (507 | ) | — | Interest and other, net | |||||||||||
Total amounts reclassified out of accumulated other comprehensive income (loss) | $ | 255 | $ | 374 | $ | 495 | $ | 423 |
1 | We determine the cost of the investment sold based on an average cost basis at the individual security level. |
|
(In Millions) | Jul 1, 2017 | Dec 31, 2016 | Jul 2, 2016 | |||||||||
Foreign currency contracts | $ | 20,861 | $ | 17,960 | $ | 18,682 | ||||||
Interest rate contracts | 16,781 | 14,228 | 10,039 | |||||||||
Other | 1,396 | 1,340 | 1,307 | |||||||||
Total | $ | 39,038 | $ | 33,528 | $ | 30,028 |
July 1, 2017 | December 31, 2016 | |||||||||||||||
(In Millions) | Assets 1 | Liabilities 2 | Assets 1 | Liabilities 2 | ||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||
Foreign currency contracts 3 | $ | 283 | $ | 23 | $ | 21 | $ | 252 | ||||||||
Interest rate contracts | 12 | 114 | 3 | 187 | ||||||||||||
Total derivatives designated as hedging instruments | 295 | 137 | 24 | 439 | ||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Foreign currency contracts 3 | 83 | 421 | 374 | 114 | ||||||||||||
Interest rate contracts | 12 | 23 | 15 | 30 | ||||||||||||
Other | 9 | — | 9 | — | ||||||||||||
Total derivatives not designated as hedging instruments | 104 | 444 | 398 | 144 | ||||||||||||
Total derivatives | $ | 399 | $ | 581 | $ | 422 | $ | 583 |
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. |
July 1, 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 | $ | 386 | $ | — | $ | 386 | $ | (232 | ) | $ | (135 | ) | $ | 19 | ||||||||||
Reverse repurchase agreements | 2,585 | — | 2,585 | — | (2,585 | ) | — | |||||||||||||||||
Total assets | 2,971 | — | 2,971 | (232 | ) | (2,720 | ) | 19 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative liabilities subject to master netting arrangements | 563 | — | 563 | (232 | ) | (303 | ) | 28 | ||||||||||||||||
Total liabilities | $ | 563 | $ | — | $ | 563 | $ | (232 | ) | $ | (303 | ) | $ | 28 |
December 31, 2016 | ||||||||||||||||||||||||
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 | $ | 433 | $ | — | $ | 433 | $ | (368 | ) | $ | (42 | ) | $ | 23 | ||||||||||
Reverse repurchase agreements | 1,018 | — | 1,018 | — | (1,018 | ) | — | |||||||||||||||||
Total assets | 1,451 | — | 1,451 | (368 | ) | (1,060 | ) | 23 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative liabilities subject to master netting arrangements | 588 | — | 588 | (368 | ) | (201 | ) | 19 | ||||||||||||||||
Total liabilities | $ | 588 | $ | — | $ | 588 | $ | (368 | ) | $ | (201 | ) | $ | 19 |
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
Interest rate contracts | $ | 96 | $ | 60 | $ | 82 | $ | 222 | ||||||||
Hedged items | (96 | ) | (60 | ) | (82 | ) | (222 | ) | ||||||||
Total | $ | — | $ | — | $ | — | $ | — |
Three Months Ended | Six Months Ended | |||||||||||||||||
(In Millions) | Location of Gains (Losses) Recognized in Income on Derivatives | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | |||||||||||||
Foreign currency contracts | Interest and other, net | $ | (271 | ) | $ | 64 | $ | (430 | ) | $ | (174 | ) | ||||||
Interest rate contracts | Interest and other, net | 1 | (8 | ) | (1 | ) | (15 | ) | ||||||||||
Other | Various | 38 | 6 | 95 | 18 | |||||||||||||
Total | $ | (232 | ) | $ | 62 | $ | (336 | ) | $ | (171 | ) |
|
Number of RSUs (In Millions) | Weighted Average Grant-Date Fair Value | ||||||
December 31, 2016 | 106.8 | $ | 28.99 | ||||
Granted | 39.8 | $ | 34.51 | ||||
Vested | (36.6 | ) | $ | 27.15 | |||
Forfeited | (9.3 | ) | $ | 29.82 | |||
July 1, 2017 | 100.7 | $ | 31.76 |
|
|
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
Net revenue: | ||||||||||||||||
Client Computing Group | ||||||||||||||||
Platform | $ | 7,634 | $ | 6,938 | $ | 15,031 | $ | 14,137 | ||||||||
Other | 579 | 400 | 1,158 | 750 | ||||||||||||
8,213 | 7,338 | 16,189 | 14,887 | |||||||||||||
Data Center Group | ||||||||||||||||
Platform | 4,026 | 3,718 | 7,905 | 7,425 | ||||||||||||
Other | 346 | 309 | 699 | 601 | ||||||||||||
4,372 | 4,027 | 8,604 | 8,026 | |||||||||||||
Internet of Things Group | ||||||||||||||||
Platform | 614 | 497 | 1,246 | 1,068 | ||||||||||||
Other | 106 | 75 | 195 | 155 | ||||||||||||
720 | 572 | 1,441 | 1,223 | |||||||||||||
Non-Volatile Memory Solutions Group | 874 | 554 | 1,740 | 1,111 | ||||||||||||
Programmable Solutions Group | 440 | 465 | 865 | 824 | ||||||||||||
All other | 144 | 577 | 720 | 1,164 | ||||||||||||
Total net revenue | $ | 14,763 | $ | 13,533 | $ | 29,559 | $ | 27,235 | ||||||||
Operating income (loss): | ||||||||||||||||
Client Computing Group | $ | 3,025 | $ | 1,911 | $ | 6,056 | $ | 3,796 | ||||||||
Data Center Group | 1,661 | 1,765 | 3,148 | 3,529 | ||||||||||||
Internet of Things Group | 139 | 89 | 244 | 212 | ||||||||||||
Non-Volatile Memory Solutions Group | (110 | ) | (224 | ) | (239 | ) | (319 | ) | ||||||||
Programmable Solutions Group | 97 | (62 | ) | 189 | (262 | ) | ||||||||||
All other | (985 | ) | (2,161 | ) | (1,972 | ) | (3,070 | ) | ||||||||
Total operating income | $ | 3,827 | $ | 1,318 | $ | 7,426 | $ | 3,886 |
|
(In Millions) | Jul 1, 2017 | Dec 31, 2016 | ||||||
Raw materials | $ | 1,014 | $ | 695 | ||||
Work in process | 3,775 | 3,190 | ||||||
Finished goods | 1,535 | 1,668 | ||||||
Total inventories | $ | 6,324 | $ | 5,553 |
(In Millions) | Jul 1, 2017 | Dec 31, 2016 | ||||||
Deferred income on shipments of components to distributors | $ | 1,416 | $ | 1,475 | ||||
Deferred income from software, services and other | 171 | 243 | ||||||
Current deferred income | $ | 1,587 | $ | 1,718 |
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
Share of equity method investee losses, net | $ | (8 | ) | $ | (12 | ) | $ | (19 | ) | $ | (20 | ) | ||||
Impairments | (555 | ) | (60 | ) | (603 | ) | (89 | ) | ||||||||
Gains on sales, net | 802 | 419 | 1,076 | 515 | ||||||||||||
Dividends | 66 | 74 | 68 | 74 | ||||||||||||
Other, net | 37 | 57 | 72 | 20 | ||||||||||||
Total gains (losses) on equity investments, net | $ | 342 | $ | 478 | $ | 594 | $ | 500 |
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
Interest income | $ | 136 | $ | 51 | $ | 212 | $ | 103 | ||||||||
Interest expense | (156 | ) | (187 | ) | (302 | ) | (395 | ) | ||||||||
Other, net | 423 | 10 | 457 | 84 | ||||||||||||
Total interest and other, net | $ | 403 | $ | (126 | ) | $ | 367 | $ | (208 | ) |
|
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
2016 Restructuring Program | $ | (42 | ) | $ | 1,414 | $ | (53 | ) | $ | 1,414 | ||||||
Other charges | 147 | — | 238 | — | ||||||||||||
Total restructuring and other charges | $ | 105 | $ | 1,414 | $ | 185 | $ | 1,414 |
Three Months Ended | Six Months Ended | |||||||
(In Millions) | Jul 1, 2017 | Jul 1, 2017 | ||||||
ISecG separation costs | $ | 70 | $ | 143 | ||||
Other | 77 | 95 | ||||||
Total other charges | $ | 147 | $ | 238 |
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
Employee severance and benefit arrangements | $ | (49 | ) | $ | 1,414 | $ | (70 | ) | $ | 1,414 | ||||||
Asset impairment and other charges | 7 | — | 17 | — | ||||||||||||
Total restructuring and other charges | $ | (42 | ) | $ | 1,414 | $ | (53 | ) | $ | 1,414 |
(In Millions) | Employee Severance and Benefits | Asset Impairments and Other | Total | |||||||||
Accrued restructuring balance as of December 31, 2016 | $ | 585 | $ | 10 | $ | 595 | ||||||
Additional accruals | — | 17 | 17 | |||||||||
Adjustments | (70 | ) | — | (70 | ) | |||||||
Cash payments | (217 | ) | (16 | ) | (233 | ) | ||||||
Non-cash settlements | — | (1 | ) | (1 | ) | |||||||
Accrued restructuring balance as of July 1, 2017 | $ | 298 | $ | 10 | $ | 308 |
|
July 1, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||
(In Millions) | Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||
Corporate debt | $ | 6,115 | $ | 13 | $ | (7 | ) | $ | 6,121 | $ | 3,847 | $ | 4 | $ | (14 | ) | $ | 3,837 | ||||||||||||||
Financial institution instruments | 8,011 | 7 | (6 | ) | 8,012 | 6,098 | 5 | (11 | ) | 6,092 | ||||||||||||||||||||||
Government debt | 1,778 | 3 | (5 | ) | 1,776 | 1,581 | — | (8 | ) | 1,573 | ||||||||||||||||||||||
Marketable equity securities | 2,560 | 3,344 | — | 5,904 | 2,818 | 3,363 | (1 | ) | 6,180 | |||||||||||||||||||||||
Total available-for-sale investments | $ | 18,464 | $ | 3,367 | $ | (18 | ) | $ | 21,813 | $ | 14,344 | $ | 3,372 | $ | (34 | ) | $ | 17,682 |
(In Millions) | Fair Value | |||
Due in 1 year or less | $ | 8,408 | ||
Due in 1–2 years | 1,434 | |||
Due in 2–5 years | 2,976 | |||
Due after 5 years | 71 | |||
Instruments not due at a single maturity date | 3,020 | |||
Total | $ | 15,909 |
|
(In Millions) | Apr 3, 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 |
|
July 1, 2017 | ||||||||||||
(In Millions) | Gross Assets | Accumulated Amortization | Net | |||||||||
Acquisition-related developed technology | $ | 6,591 | $ | (1,441 | ) | $ | 5,150 | |||||
Acquisition-related customer relationships | 1,340 | (224 | ) | 1,116 | ||||||||
Acquisition-related brands | 79 | (19 | ) | 60 | ||||||||
Licensed technology and patents | 3,184 | (1,451 | ) | 1,733 | ||||||||
Identified intangible assets subject to amortization | 11,194 | (3,135 | ) | 8,059 | ||||||||
In-process research and development | 808 | — | 808 | |||||||||
Identified intangible assets not subject to amortization | 808 | — | 808 | |||||||||
Total identified intangible assets | $ | 12,002 | $ | (3,135 | ) | $ | 8,867 |
December 31, 2016 | ||||||||||||
(In Millions) | Gross Assets | Accumulated Amortization | Net | |||||||||
Acquisition-related developed technology | $ | 7,405 | $ | (1,836 | ) | $ | 5,569 | |||||
Acquisition-related customer relationships | 1,449 | (260 | ) | 1,189 | ||||||||
Acquisition-related brands | 87 | (21 | ) | 66 | ||||||||
Licensed technology and patents | 3,285 | (1,423 | ) | 1,862 | ||||||||
Identified intangible assets subject to amortization | 12,226 | (3,540 | ) | 8,686 | ||||||||
In-process research and development | 808 | — | 808 | |||||||||
Identified intangible assets not subject to amortization | 808 | — | 808 | |||||||||
Total identified intangible assets | $ | 13,034 | $ | (3,540 | ) | $ | 9,494 |
July 1, 2017 | ||||||||||||
(In Millions) | Gross Assets | Accumulated Amortization | Net | |||||||||
Acquisition-related developed technology | $ | 6,591 | $ | (1,441 | ) | $ | 5,150 | |||||
Acquisition-related customer relationships | 1,340 | (224 | ) | 1,116 | ||||||||
Acquisition-related brands | 79 | (19 | ) | 60 | ||||||||
Licensed technology and patents | 3,184 | (1,451 | ) | 1,733 | ||||||||
Identified intangible assets subject to amortization | 11,194 | (3,135 | ) | 8,059 | ||||||||
In-process research and development | 808 | — | 808 | |||||||||
Identified intangible assets not subject to amortization | 808 | — | 808 | |||||||||
Total identified intangible assets | $ | 12,002 | $ | (3,135 | ) | $ | 8,867 |
December 31, 2016 | ||||||||||||
(In Millions) | Gross Assets | Accumulated Amortization | Net | |||||||||
Acquisition-related developed technology | $ | 7,405 | $ | (1,836 | ) | $ | 5,569 | |||||
Acquisition-related customer relationships | 1,449 | (260 | ) | 1,189 | ||||||||
Acquisition-related brands | 87 | (21 | ) | 66 | ||||||||
Licensed technology and patents | 3,285 | (1,423 | ) | 1,862 | ||||||||
Identified intangible assets subject to amortization | 12,226 | (3,540 | ) | 8,686 | ||||||||
In-process research and development | 808 | — | 808 | |||||||||
Identified intangible assets not subject to amortization | 808 | — | 808 | |||||||||
Total identified intangible assets | $ | 13,034 | $ | (3,540 | ) | $ | 9,494 |
Three Months Ended | Six Months Ended | |||||||||||||||||
(In Millions) | Location | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | |||||||||||||
Acquisition-related developed technology | Cost of sales | $ | 198 | $ | 235 | $ | 407 | $ | 470 | |||||||||
Acquisition-related customer relationships | Amortization of acquisition-related intangibles | 33 | 82 | 68 | 165 | |||||||||||||
Acquisition-related brands | Amortization of acquisition-related intangibles | 4 | 7 | 7 | 14 | |||||||||||||
Licensed technology and patents | Cost of sales | 78 | 71 | 152 | 142 | |||||||||||||
Total amortization expense | $ | 313 | $ | 395 | $ | 634 | $ | 791 |
(In Millions) | Remainder of 2017 | 2018 | 2019 | 2020 | 2021 | |||||||||||||||
Acquisition-related developed technology | $ | 394 | $ | 784 | $ | 782 | $ | 750 | $ | 715 | ||||||||||
Acquisition-related customer relationships | 67 | 122 | 121 | 119 | 119 | |||||||||||||||
Acquisition-related brands | 7 | 13 | 13 | 13 | 14 | |||||||||||||||
Licensed technology and patents | 132 | 231 | 219 | 194 | 179 | |||||||||||||||
Total future amortization expenses | $ | 600 | $ | 1,150 | $ | 1,135 | $ | 1,076 | $ | 1,027 |
|
(In Millions) | Jul 1, 2017 | Dec 31, 2016 | ||||||
Equity method investments | $ | 2,266 | $ | 1,328 | ||||
Non-marketable cost method investments | 2,719 | 3,098 | ||||||
Non-current deferred tax assets | 753 | 907 | ||||||
Pre-payments for property, plant and equipment | 422 | 347 | ||||||
Loans receivable | 2,725 | 236 | ||||||
Reverse repurchase agreements | — | 250 | ||||||
Other | 1,121 | 993 | ||||||
Total other long-term assets | $ | 10,006 | $ | 7,159 |
|
(In Millions) | Jul 1, 2017 | Dec 31, 2016 | ||||||
Drafts payable | $ | 13 | $ | 25 | ||||
Current portion of long-term debt | 4,125 | 4,618 | ||||||
Less: debt issuance costs associated with the current portion of long-term debt | (8 | ) | (9 | ) | ||||
Total short-term debt | $ | 4,130 | $ | 4,634 |
(In Millions) | Jul 1, 2017 | Dec 31, 2016 | ||||||
Floating-rate senior notes: | ||||||||
$700, three-month LIBOR plus 0.08%, due May 2020 | $ | 700 | $ | — | ||||
$800, three-month LIBOR plus 0.35%, due May 2022 | 800 | — | ||||||
Fixed-rate senior notes: | ||||||||
$500, 1.75%, due May 2017 | — | 501 | ||||||
$3,000, 1.35%, due December 2017 | 3,000 | 2,999 | ||||||
$600, 2.50%, due November 2018 | 603 | 604 | ||||||
A$250, 3.25%, due December 20191 | 191 | 180 | ||||||
$1,000, 1.85%, due May 2020 | 1,000 | — | ||||||
$1,750, 2.45%, due July 2020 | 1,749 | 1,749 | ||||||
$500, 1.70%, due May 2021 | 499 | 499 | ||||||
$2,000, 3.30%, due October 2021 | 1,999 | 1,988 | ||||||
$750, 2.35%, due May 2022 | 748 | — | ||||||
$1,000, 3.10%, due July 2022 | 995 | 987 | ||||||
A$550, 4.00%, due December 20221 | 419 | 394 | ||||||
$1,500, 2.70%, due December 2022 | 1,493 | 1,480 | ||||||
$400, 4.10%, due November 2023 | 422 | 424 | ||||||
$1,250, 2.88%, due May 2024 | 1,241 | — | ||||||
$600, 2.70%, due June 2024 | 600 | — | ||||||
$2,250, 3.70%, due July 2025 | 2,176 | 2,148 | ||||||
$1,000, 2.60%, due May 2026 | 995 | 983 | ||||||
$1,000, 3.15%, due May 2027 | 997 | — | ||||||
$750, 4.00%, due December 2032 | 745 | 745 | ||||||
$1,500, 4.80%, due October 2041 | 1,491 | 1,491 | ||||||
$925, 4.25%, due December 2042 | 924 | 924 | ||||||
$2,000, 4.90%, due July 2045 | 1,999 | 1,999 | ||||||
$1,007, 4.90%, due August 2045 | 1,005 | 995 | ||||||
$915, 4.70%, due December 2045 | 905 | 894 | ||||||
$1,250, 4.10%, due May 2046 | 1,243 | 1,243 | ||||||
$1,000, 4.10%, due May 2047 | 994 | — | ||||||
Junior subordinated convertible debentures: | ||||||||
$1,600, 2.95%, due December 2035 | 1,000 | 992 | ||||||
$2,000, 3.25%, due August 2039 | 1,126 | 1,118 | ||||||
Long-term debt | 32,059 | 25,337 | ||||||
Less: current portion of long-term debt | (4,125 | ) | (4,618 | ) | ||||
Less: debt issuance costs | (79 | ) | (70 | ) | ||||
Total long-term debt | $ | 27,855 | $ | 20,649 |
|
July 1, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||
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 | $ | — | $ | 2,645 | $ | — | $ | 2,645 | $ | — | $ | 498 | $ | — | $ | 498 | ||||||||||||||||
Financial institution instruments 1 | 3,020 | 2,139 | — | 5,159 | 1,920 | 811 | — | 2,731 | ||||||||||||||||||||||||
Government debt 2 | — | 466 | — | 466 | — | 332 | — | 332 | ||||||||||||||||||||||||
Reverse repurchase agreements | — | 2,335 | — | 2,335 | — | 768 | — | 768 | ||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||||||||
Corporate debt | — | 1,654 | 6 | 1,660 | — | 1,332 | 6 | 1,338 | ||||||||||||||||||||||||
Financial institution instruments 1 | — | 1,221 | — | 1,221 | — | 1,603 | — | 1,603 | ||||||||||||||||||||||||
Government debt 2 | — | 277 | — | 277 | — | 284 | — | 284 | ||||||||||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||||||||
Asset-backed securities | — | 22 | — | 22 | — | 87 | — | 87 | ||||||||||||||||||||||||
Corporate debt | — | 2,461 | — | 2,461 | — | 2,847 | — | 2,847 | ||||||||||||||||||||||||
Financial institution instruments 1 | 92 | 1,544 | — | 1,636 | 36 | 1,608 | — | 1,644 | ||||||||||||||||||||||||
Government debt 2 | 31 | 6,934 | — | 6,965 | 32 | 3,704 | — | 3,736 | ||||||||||||||||||||||||
Other current assets: | ||||||||||||||||||||||||||||||||
Derivative assets | — | 326 | — | 326 | — | 382 | — | 382 | ||||||||||||||||||||||||
Loans receivable | — | 86 | — | 86 | — | 326 | — | 326 | ||||||||||||||||||||||||
Marketable equity securities | 5,472 | 432 | — | 5,904 | 6,180 | — | — | 6,180 | ||||||||||||||||||||||||
Other long-term investments: | ||||||||||||||||||||||||||||||||
Corporate debt | — | 1,811 | 5 | 1,816 | — | 1,995 | 6 | 2,001 | ||||||||||||||||||||||||
Financial institution instruments 1 | — | 1,632 | — | 1,632 | — | 1,758 | — | 1,758 | ||||||||||||||||||||||||
Government debt 2 | — | 1,033 | — | 1,033 | — | 957 | — | 957 | ||||||||||||||||||||||||
Other long-term assets: | ||||||||||||||||||||||||||||||||
Derivative assets | — | 64 | 9 | 73 | — | 31 | 9 | 40 | ||||||||||||||||||||||||
Loans receivable | — | 525 | — | 525 | — | 236 | — | 236 | ||||||||||||||||||||||||
Total assets measured and recorded at fair value | 8,615 | 27,607 | 20 | 36,242 | 8,168 | 19,559 | 21 | 27,748 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Other accrued liabilities: | ||||||||||||||||||||||||||||||||
Derivative liabilities | — | 444 | — | 444 | — | 371 | — | 371 | ||||||||||||||||||||||||
Other long-term liabilities: | ||||||||||||||||||||||||||||||||
Derivative liabilities | — | 125 | 12 | 137 | — | 179 | 33 | 212 | ||||||||||||||||||||||||
Total liabilities measured and recorded at fair value | $ | — | $ | 569 | $ | 12 | $ | 581 | $ | — | $ | 550 | $ | 33 | $ | 583 |
July 1, 2017 | ||||||||||||||||||||
(In Millions) | Carrying Amount | Fair Value Measured Using | Fair Value | |||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Grants receivable | $ | 440 | $ | — | $ | 440 | $ | — | $ | 440 | ||||||||||
Loans receivable1 | $ | 2,465 | $ | — | $ | 2,465 | $ | — | $ | 2,465 | ||||||||||
Non-marketable cost method investments | $ | 2,719 | $ | — | $ | — | $ | 3,457 | $ | 3,457 | ||||||||||
Reverse repurchase agreements | $ | 250 | $ | — | $ | 250 | $ | — | $ | 250 | ||||||||||
Short-term debt | $ | 4,117 | $ | — | $ | 4,697 | $ | — | $ | 4,697 | ||||||||||
Long-term debt | $ | 27,855 | $ | 17,980 | $ | 11,630 | $ | — | $ | 29,610 |
1 | Includes a loan receivable of $2.2 billion due from McAfee and TPG. The fair value of this loan receivable approximates its carrying value and we did not obtain or secure collateral against this obligation. For further information, see "Note 9: Acquisitions and Divestitures." |
December 31, 2016 | ||||||||||||||||||||
(In Millions) | Carrying Amount | Fair Value Measured Using | Fair Value | |||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Grants receivable | $ | 361 | $ | — | $ | 362 | $ | — | $ | 362 | ||||||||||
Loans receivable | $ | 265 | $ | — | $ | 265 | $ | — | $ | 265 | ||||||||||
Non-marketable cost method investments | $ | 3,098 | $ | — | $ | — | $ | 3,890 | $ | 3,890 | ||||||||||
Reverse repurchase agreements | $ | 250 | $ | — | $ | 250 | $ | — | $ | 250 | ||||||||||
Short-term debt | $ | 4,609 | $ | 3,006 | $ | 2,114 | $ | — | $ | 5,120 | ||||||||||
Long-term debt | $ | 20,649 | $ | 12,171 | $ | 9,786 | $ | — | $ | 21,957 |
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(In Millions) | Unrealized Holding Gains (Losses) on Available-for-Sale Investments | Unrealized Holding Gains (Losses) on Derivatives | Prior Service Credits (Costs) | Actuarial Gains (Losses) | Foreign Currency Translation Adjustment | Total | ||||||||||||||||||
December 31, 2016 | $ | 2,164 | $ | (259 | ) | $ | (40 | ) | $ | (1,240 | ) | $ | (519 | ) | $ | 106 | ||||||||
Other comprehensive income (loss) before reclassifications1 | 1,059 | 445 | — | 217 | 1 | 1,722 | ||||||||||||||||||
Amounts reclassified out of accumulated other comprehensive income | (1,046 | ) | 16 | (12 | ) | 40 | 507 | (495 | ) | |||||||||||||||
Tax effects | (4 | ) | (130 | ) | 2 | (27 | ) | — | (159 | ) | ||||||||||||||
Other comprehensive income (loss) | 9 | 331 | (10 | ) | 230 | 508 | 1,068 | |||||||||||||||||
July 1, 2017 | $ | 2,173 | $ | 72 | $ | (50 | ) | $ | (1,010 | ) | $ | (11 | ) | $ | 1,174 |
Income Before Taxes Impact (In Millions) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
Comprehensive Income Components | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | Location | |||||||||||||
Unrealized holding gains (losses)1 on available-for-sale investments: | ||||||||||||||||||
$ | 783 | $ | 403 | $ | 1,046 | $ | 488 | Gains (losses) on equity investments, net | ||||||||||
783 | 403 | 1,046 | 488 | |||||||||||||||
Unrealized holding gains (losses) on derivatives: | ||||||||||||||||||
Foreign currency contracts | (27 | ) | (17 | ) | (47 | ) | (59 | ) | Cost of sales | |||||||||
2 | 7 | (14 | ) | (3 | ) | Research and development | ||||||||||||
(1 | ) | 3 | (6 | ) | (1 | ) | Marketing, general and administrative | |||||||||||
12 | 11 | 16 | 11 | Gains (losses) on equity investments, net | ||||||||||||||
(3 | ) | (17 | ) | 35 | 17 | Interest and other, net | ||||||||||||
(17 | ) | (13 | ) | (16 | ) | (35 | ) | |||||||||||
Amortization of pension and postretirement benefit components: | ||||||||||||||||||
Prior service credits (costs) | 14 | (2 | ) | 12 | (4 | ) | ||||||||||||
Actuarial gains (losses) | (18 | ) | (14 | ) | (40 | ) | (26 | ) | ||||||||||
(4 | ) | (16 | ) | (28 | ) | (30 | ) | |||||||||||
Currency translation adjustment | (507 | ) | — | (507 | ) | — | Interest and other, net | |||||||||||
Total amounts reclassified out of accumulated other comprehensive income (loss) | $ | 255 | $ | 374 | $ | 495 | $ | 423 |
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(In Millions) | Jul 1, 2017 | Dec 31, 2016 | Jul 2, 2016 | |||||||||
Foreign currency contracts | $ | 20,861 | $ | 17,960 | $ | 18,682 | ||||||
Interest rate contracts | 16,781 | 14,228 | 10,039 | |||||||||
Other | 1,396 | 1,340 | 1,307 | |||||||||
Total | $ | 39,038 | $ | 33,528 | $ | 30,028 |
July 1, 2017 | December 31, 2016 | |||||||||||||||
(In Millions) | Assets 1 | Liabilities 2 | Assets 1 | Liabilities 2 | ||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||
Foreign currency contracts 3 | $ | 283 | $ | 23 | $ | 21 | $ | 252 | ||||||||
Interest rate contracts | 12 | 114 | 3 | 187 | ||||||||||||
Total derivatives designated as hedging instruments | 295 | 137 | 24 | 439 | ||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Foreign currency contracts 3 | 83 | 421 | 374 | 114 | ||||||||||||
Interest rate contracts | 12 | 23 | 15 | 30 | ||||||||||||
Other | 9 | — | 9 | — | ||||||||||||
Total derivatives not designated as hedging instruments | 104 | 444 | 398 | 144 | ||||||||||||
Total derivatives | $ | 399 | $ | 581 | $ | 422 | $ | 583 |
July 1, 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 | $ | 386 | $ | — | $ | 386 | $ | (232 | ) | $ | (135 | ) | $ | 19 | ||||||||||
Reverse repurchase agreements | 2,585 | — | 2,585 | — | (2,585 | ) | — | |||||||||||||||||
Total assets | 2,971 | — | 2,971 | (232 | ) | (2,720 | ) | 19 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative liabilities subject to master netting arrangements | 563 | — | 563 | (232 | ) | (303 | ) | 28 | ||||||||||||||||
Total liabilities | $ | 563 | $ | — | $ | 563 | $ | (232 | ) | $ | (303 | ) | $ | 28 |
December 31, 2016 | ||||||||||||||||||||||||
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 | $ | 433 | $ | — | $ | 433 | $ | (368 | ) | $ | (42 | ) | $ | 23 | ||||||||||
Reverse repurchase agreements | 1,018 | — | 1,018 | — | (1,018 | ) | — | |||||||||||||||||
Total assets | 1,451 | — | 1,451 | (368 | ) | (1,060 | ) | 23 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative liabilities subject to master netting arrangements | 588 | — | 588 | (368 | ) | (201 | ) | 19 | ||||||||||||||||
Total liabilities | $ | 588 | $ | — | $ | 588 | $ | (368 | ) | $ | (201 | ) | $ | 19 |
Three Months Ended | Six Months Ended | |||||||||||||||||
(In Millions) | Location of Gains (Losses) Recognized in Income on Derivatives | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | |||||||||||||
Foreign currency contracts | Interest and other, net | $ | (271 | ) | $ | 64 | $ | (430 | ) | $ | (174 | ) | ||||||
Interest rate contracts | Interest and other, net | 1 | (8 | ) | (1 | ) | (15 | ) | ||||||||||
Other | Various | 38 | 6 | 95 | 18 | |||||||||||||
Total | $ | (232 | ) | $ | 62 | $ | (336 | ) | $ | (171 | ) |
Three Months Ended | Six Months Ended | |||||||||||||||
(In Millions) | Jul 1, 2017 | Jul 2, 2016 | Jul 1, 2017 | Jul 2, 2016 | ||||||||||||
Interest rate contracts | $ | 96 | $ | 60 | $ | 82 | $ | 222 | ||||||||
Hedged items | (96 | ) | (60 | ) | (82 | ) | (222 | ) | ||||||||
Total | $ | — | $ | — | $ | — | $ | — |
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Number of RSUs (In Millions) | Weighted Average Grant-Date Fair Value | ||||||
December 31, 2016 | 106.8 | $ | 28.99 | ||||
Granted | 39.8 | $ | 34.51 | ||||
Vested | (36.6 | ) | $ | 27.15 | |||
Forfeited | (9.3 | ) | $ | 29.82 | |||
July 1, 2017 | 100.7 | $ | 31.76 |
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