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• | Level 1. Quoted prices in active markets for identical assets or liabilities. We evaluate security-specific market data when determining whether a market is active. |
• | Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in less active markets, or model-derived valuations. All significant inputs used in our valuations, such as discounted cash flows, are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. We use LIBOR-based yield curves, currency spot and forward rates, and credit ratings as significant inputs in our valuations. Level 2 inputs also include non-binding market consensus prices as well as quoted prices that were adjusted for security-specific restrictions. When we use non-binding market consensus prices, we corroborate them with quoted market prices for similar instruments or compare them to output from internally developed pricing models such as discounted cash flow models. |
• | Level 3. Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. We monitor and review the inputs and results of these valuation models to help ensure the fair value measurements are reasonable and consistent with market experience in similar asset classes. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data. |
• | Marketable debt instruments when the interest rate and foreign currency risks are not hedged at the inception of the investment or when our criteria for designation as trading assets are not met. We record the interest income and realized gains or losses on the sale of these instruments in interest and other, net. |
• | Marketable equity securities when there is no plan to sell or hedge the investment at the time of original classification. We acquire these equity securities to promote business and strategic objectives. We record the realized gains or losses on the sale or exchange of marketable equity securities in gains (losses) on equity investments, net. |
• | For available-for-sale debt securities, we consider whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, or whether recovery of the entire amortized cost basis of the security is unlikely because a credit loss exists. When we do not expect to recover the entire amortized cost basis of the security, we separate other-than-temporary impairments into amounts representing credit losses, which are recognized in interest and other, net, and amounts not related to credit losses, which are recognized in other comprehensive income (loss). |
• | For marketable equity securities, we consider the severity and duration of the decline in fair value below cost and our ability and intent to hold the security for a sufficient period of time to allow for recovery of value in the foreseeable future based on the financial health of, and business outlook for, the investee. |
• | For non-marketable equity investments, we consider the severity and duration of the impairment, the investee's financial condition and business outlook, industry and sector performance, market for technology, operational and financing cash flow factors, and changes in the investee's credit rating, among other qualitative and quantitative criteria. Impairments of non-marketable equity investments were $555 million in 2017 ($184 million in 2016 and $166 million in 2015). |
• | Variability in the U.S.-dollar equivalent of non-U.S.-dollar-denominated cash flows associated with our forecasted operating and capital purchases spending; and |
• | Coupon and principal payments for our non-U.S.-dollar-denominated indebtedness. |
• | intangible assets, including the valuation methodology, estimations of future cash flows, discount rates, market segment growth rates, our assumed market segment share, as well as the estimated useful life of intangible assets; |
• | deferred tax assets and liabilities, uncertain tax positions, and tax-related valuation allowances, which are initially estimated as of the acquisition date; |
• | inventory; property, plant and equipment; pre-existing liabilities or legal claims; deferred revenue; and contingent consideration, each as may be applicable; and |
• | goodwill as measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. |
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ACCOUNTING STANDARDS ADOPTED | ||
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. |
ACCOUNTING STANDARDS NOT YET ADOPTED | ||
Standard/Description | Effective Date and Adoption Considerations | Effect on Financial Statements or Other Significant Matters |
Revenue Recognition - Contracts with Customers. This standard was issued to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by all companies. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. | Effective in the first quarter of 2018. We plan to adopt the standard retrospectively with the cumulative effect of initially applying it recognized at the date of initial application ("modified retrospective" approach). | Our assessment has identified a change in revenue recognition timing on our component sales made to distributors. We expect to recognize revenue when we deliver to the distributor rather than deferring recognition until the distributor sells the components. On the date of initial application, we will remove the deferred income and related receivables on component sales made to distributors through a cumulative adjustment to retained earnings. We expect the revenue deferral, historically recognized in the following period, to be offset by the acceleration of revenue recognition as control of the product transfers to our customer. Our assessment has also identified a change in expense recognition timing related to payments we make to our customers for distinct services they perform as part of cooperative advertising programs, which were previously recorded as operating expenses. We expect to recognize the expense for cooperative advertising in the period the marketing activities occur. We currently recognize the expense in the period the customer is entitled to participate in the program, which coincides with the period of sale. On the date of initial adoption, we will capitalize the expense of cooperative advertising not performed through a cumulative adjustment to retained earnings. We have completed our assessment and implemented policies, processes, and controls to support the standards measurement and disclosure requirements. Refer to the table below, which summarizes the anticipated impacts of the changes discussed above to Intel's financial statements. This will be an adjustment to opening balances for the fiscal year beginning December 31, 2017. |
Financial Instruments - Recognition and Measurement. Requires changes to the accounting for financial instruments that primarily affect equity investments, financial liabilities measured using the fair value option, and the presentation and disclosure requirements for such instruments. | Effective in the first quarter of 2018. Changes to our marketable equity securities are required to be adopted using a modified retrospective approach through a cumulative effect adjustment to retained earnings for the fiscal year beginning December 31, 2017. Since management has elected to apply the measurement alternative to non-marketable equity securities, changes to these securities are being adopted prospectively. | Marketable equity securities previously classified as available-for-sale equity investments will be measured and recorded at fair value with changes in fair value recorded through the income statement. All non-marketable equity securities formerly classified as cost method investments will be measured and recorded using the measurement alternative upon adoption. Equity securities measured and recorded using the measurement alternative are recorded at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. Adjustments resulting from impairments and observable price changes will be recorded in the income statement. Beginning in the first quarter of 2018, in accordance with the standard, fair value disclosures will no longer be provided for equity securities measured using the measurement alternative. In addition, the existing impairment model will be replaced with a new one-step qualitative impairment model. No initial adoption adjustment will be recorded for these instruments since the standard is required to be applied prospectively for securities measured using the measurement alternative. We have completed our assessment and implemented policies, processes, and controls to support the standard's measurement and disclosure requirements. Refer to the table below, which summarizes the anticipated impacts, net of tax, of the changes discussed above to Intel's financial statements. This will be an adjustment to opening balances for the fiscal year beginning December 31, 2017. |
ACCOUNTING STANDARDS NOT YET ADOPTED | ||
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, use of the amounts disclosed in the Retirement Benefit Plans footnote for the prior comparative periods as the estimation basis for applying the retrospective presentation requirement. | We expect the adoption of the amended standard to result in the reclassification of approximately $115 million from non-service components above the subtotal of operating income to interest and other, net, for the year ended December 30, 2017 ($260 million for the year ended December 31, 2016). |
Leases. This new lease accounting standard requires that we recognize leased assets and corresponding liabilities on the balance sheet and provide enhanced disclosure of lease activity. | Effective in the first quarter of 2019. We plan to adopt the new standard using a modified retrospective transition approach. | We expect the valuation of our right-of-use assets and lease liabilities, previously described as operating leases, to approximate the present value of our forecasted future lease commitments. We are currently implementing process and system changes in order to comply with the measurement and disclosure requirements. |
Adjustments from | ||||||||||||||||
Fiscal Year Beginning (In Millions) | Dec 30, 2017 | Revenue Standard | Financial Instruments Update | Dec 31, 2017 As Adjusted | ||||||||||||
Assets: | ||||||||||||||||
Accounts receivable, net | $ | 5,607 | $ | (530 | ) | $ | — | $ | 5,077 | |||||||
Inventories | $ | 6,983 | $ | 47 | $ | — | $ | 7,030 | ||||||||
Other current assets | $ | 2,908 | $ | 64 | $ | — | $ | 2,972 | ||||||||
Equity investments | $ | — | $ | — | $ | 8,579 | $ | 8,579 | ||||||||
Marketable equity securities | $ | 4,192 | $ | — | $ | (4,192 | ) | $ | — | |||||||
Other long-term assets | $ | 7,602 | $ | — | $ | (4,387 | ) | $ | 3,215 | |||||||
Liabilities: | ||||||||||||||||
Accounts payable | $ | 2,928 | $ | 55 | $ | — | $ | 2,983 | ||||||||
Deferred income | $ | 1,656 | $ | (1,356 | ) | $ | — | $ | 300 | |||||||
Other accrued liabilities | $ | 7,535 | $ | 26 | $ | — | $ | 7,561 | ||||||||
Long-term deferred tax liabilities | $ | 3,046 | $ | 191 | $ | — | $ | 3,237 | ||||||||
Stockholders' equity: | ||||||||||||||||
Accumulated other comprehensive income (loss) | $ | 862 | $ | — | $ | (1,745 | ) | $ | (883 | ) | ||||||
Retained earnings | $ | 42,083 | $ | 665 | $ | 1,745 | $ | 44,493 | ||||||||
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• Client Computing Group (CCG) |
• Data Center Group (DCG) |
• Internet of Things Group (IOTG) |
• Non-Volatile Memory Solutions Group (NSG) |
• Programmable Solutions Group (PSG) |
• All other |
• | results of operations from non-reportable segments not otherwise presented; |
• | historical results of operations from divested businesses; |
• | results of operations of start-up businesses that support our initiatives, including our foundry business; |
• | amounts included within restructuring and other charges; |
• | a portion of employee benefits, compensation, and other expenses not allocated to the operating segments; and |
• | acquisition-related costs, including amortization and any impairment of acquisition-related intangibles and goodwill. |
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Net revenue: | ||||||||||||
Client Computing Group | ||||||||||||
Platform | $ | 31,226 | $ | 30,751 | $ | 30,680 | ||||||
Adjacent | 2,777 | 2,157 | 1,539 | |||||||||
34,003 | 32,908 | 32,219 | ||||||||||
Data Center Group | ||||||||||||
Platform | 17,439 | 15,895 | 14,856 | |||||||||
Adjacent | 1,625 | 1,341 | 1,125 | |||||||||
19,064 | 17,236 | 15,981 | ||||||||||
Internet of Things Group | ||||||||||||
Platform | 2,645 | 2,290 | 1,976 | |||||||||
Adjacent | 524 | 348 | 322 | |||||||||
3,169 | 2,638 | 2,298 | ||||||||||
Non-Volatile Memory Solutions Group | 3,520 | 2,576 | 2,597 | |||||||||
Programmable Solutions Group | 1,902 | 1,669 | — | |||||||||
All other | 1,103 | 2,360 | 2,260 | |||||||||
Total net revenue | $ | 62,761 | $ | 59,387 | $ | 55,355 | ||||||
Operating income (loss): | ||||||||||||
Client Computing Group | $ | 12,919 | $ | 10,646 | $ | 8,166 | ||||||
Data Center Group | 8,395 | 7,520 | 7,847 | |||||||||
Internet of Things Group | 650 | 585 | 515 | |||||||||
Non-Volatile Memory Solutions Group | (260 | ) | (544 | ) | 239 | |||||||
Programmable Solutions Group | 458 | (104 | ) | — | ||||||||
All other | (4,226 | ) | (5,229 | ) | (2,765 | ) | ||||||
Total operating income | $ | 17,936 | $ | 12,874 | $ | 14,002 | ||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Platform revenue | ||||||||||||
Desktop platform | $ | 11,647 | $ | 12,371 | $ | 12,754 | ||||||
Notebook platform | 19,414 | 18,203 | 17,945 | |||||||||
DCG platform | 17,439 | 15,895 | 14,856 | |||||||||
Other platform1 | 2,810 | 2,467 | 1,957 | |||||||||
51,310 | 48,936 | 47,512 | ||||||||||
Adjacent revenue2 | 10,917 | 8,290 | 5,858 | |||||||||
ISecG divested business | 534 | 2,161 | 1,985 | |||||||||
Total revenue | $ | 62,761 | $ | 59,387 | $ | 55,355 | ||||||
1 | Includes our tablet, phone, service provider, and IOTG platform revenue. |
2 | Includes all of our non-platform products for CCG, DCG, and IOTG like modem, ethernet, and silicon photonic, as well as NSG, PSG, and Mobileye products. |
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
China (including Hong Kong) | $ | 14,796 | $ | 13,977 | $ | 11,679 | ||||||
Singapore | 14,285 | 12,780 | 11,544 | |||||||||
United States | 12,543 | 12,957 | 11,121 | |||||||||
Taiwan | 10,518 | 9,953 | 10,661 | |||||||||
Other countries | 10,619 | 9,720 | 10,350 | |||||||||
Total net revenue | $ | 62,761 | $ | 59,387 | $ | 55,355 | ||||||
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(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Raw materials | $ | 1,098 | $ | 695 | ||||
Work in process | 3,893 | 3,190 | ||||||
Finished goods | 1,992 | 1,668 | ||||||
Total inventories | $ | 6,983 | $ | 5,553 | ||||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Land and buildings | $ | 27,391 | $ | 26,627 | ||||
Machinery and equipment | 57,192 | 52,608 | ||||||
Construction in progress | 15,812 | 10,870 | ||||||
Total property, plant and equipment, gross | 100,395 | 90,105 | ||||||
Less: accumulated depreciation | 59,286 | 53,934 | ||||||
Total property, plant and equipment, net | $ | 41,109 | $ | 36,171 | ||||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
United States | $ | 24,459 | $ | 23,598 | $ | 22,611 | ||||||
Israel | 6,501 | 3,923 | 1,661 | |||||||||
China | 4,275 | 2,306 | 537 | |||||||||
Ireland | 3,938 | 4,865 | 5,789 | |||||||||
Other countries | 1,936 | 1,479 | 1,260 | |||||||||
Total property, plant and equipment, net | $ | 41,109 | $ | 36,171 | $ | 31,858 | ||||||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Deferred income on shipments of components to distributors | $ | 1,320 | $ | 1,475 | ||||
Deferred income from software, services, and other | 336 | 243 | ||||||
Current deferred income | $ | 1,656 | $ | 1,718 | ||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Share of equity method investee losses, net | $ | (232 | ) | $ | (38 | ) | $ | (95 | ) | |||
Impairments | (833 | ) | (187 | ) | (185 | ) | ||||||
Gains on sales, net | 3,499 | 562 | 145 | |||||||||
Dividends | 68 | 74 | 52 | |||||||||
Other, net | 149 | 95 | 398 | |||||||||
Total gains (losses) on equity investments, net | $ | 2,651 | $ | 506 | $ | 315 | ||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Interest income | $ | 441 | $ | 222 | $ | 124 | ||||||
Interest expense | (646 | ) | (733 | ) | (337 | ) | ||||||
Other, net | (30 | ) | 67 | 108 | ||||||||
Total interest and other, net | $ | (235 | ) | $ | (444 | ) | $ | (105 | ) | |||
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Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
2016 Restructuring Program | $ | 135 | $ | 1,823 | $ | — | ||||||
2015 and 2013 Restructuring Programs | — | — | 354 | |||||||||
ISecG separation costs and other charges | 249 | 63 | — | |||||||||
Total restructuring and other charges | $ | 384 | $ | 1,886 | $ | 354 | ||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Employee severance and benefit arrangements | $ | 70 | $ | 1,737 | ||||
Pension settlement charges | 25 | 57 | ||||||
Asset impairment and other charges | 40 | 29 | ||||||
Total restructuring and other charges | $ | 135 | $ | 1,823 | ||||
(In Millions) | Employee Severance and Benefits | Asset Impairments and Other | Total | |||||||||
Accrued restructuring balance as of December 26, 2015 | $ | — | $ | — | $ | — | ||||||
Additional accruals | 1,556 | 29 | 1,585 | |||||||||
Adjustments | 92 | — | 92 | |||||||||
Cash payments | (1,063 | ) | — | (1,063 | ) | |||||||
Non-cash settlements | — | (19 | ) | (19 | ) | |||||||
Accrued restructuring balance as of December 31, 2016 | 585 | 10 | 595 | |||||||||
Additional accruals | — | 40 | 40 | |||||||||
Adjustments | 70 | — | 70 | |||||||||
Cash payments | (352 | ) | (25 | ) | (377 | ) | ||||||
Non-cash settlements | — | (3 | ) | (3 | ) | |||||||
Accrued restructuring balance as of December 30, 2017 | $ | 303 | $ | 22 | $ | 325 | ||||||
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• | Recognition of the transition tax imposed on undistributed earnings from non-U.S. subsidiaries. We have previously asserted an intent to indefinitely reinvest our earnings and other basis differences in operations outside the U.S., and have not recognized U.S. deferred income taxes. Tax Reform imposes a one-time transition tax on all of our previously untaxed historical non-U.S. earnings and profits at various tax rates. We recognized a provisional tax expense of $6.1 billion in the fourth quarter of 2017. The move to a participation exemption system allows us to make distributions of non-U.S. earnings to the U.S. without incurring additional U.S. tax, however these distributions may be subject to applicable non-U.S. taxation. |
• | Remeasurement of deferred income taxes using the newly enacted statutory tax rate of 21.0%. The new statutory U.S. federal income tax rate is effective for the 2018 tax year. We remeasured our deferred tax assets and liabilities, including associated valuation allowances, with the new tax rate. We have recognized a provisional tax benefit of $676 million in the fourth quarter of 2017. |
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Income before taxes: | ||||||||||||
U.S. | $ | 11,141 | $ | 6,957 | $ | 8,800 | ||||||
Non-U.S. | 9,211 | 5,979 | 5,412 | |||||||||
Total income before taxes | 20,352 | 12,936 | 14,212 | |||||||||
Provision for taxes: | ||||||||||||
Current: | ||||||||||||
Federal | 10,207 | 1,319 | 2,828 | |||||||||
State | 27 | 13 | 40 | |||||||||
Non-U.S. | 899 | 756 | 842 | |||||||||
Total current provision for taxes | 11,133 | 2,088 | 3,710 | |||||||||
Deferred: | ||||||||||||
Federal | (220 | ) | 658 | (862 | ) | |||||||
Other | (162 | ) | (126 | ) | (56 | ) | ||||||
Total deferred provision for taxes | (382 | ) | 532 | (918 | ) | |||||||
Total provision for taxes | $ | 10,751 | $ | 2,620 | $ | 2,792 | ||||||
Effective tax rate | 52.8 | % | 20.3 | % | 19.6 | % | ||||||
Years Ended | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | ||||||
Statutory federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
Increase (reduction) in rate resulting from: | |||||||||
Non-U.S. income taxed at different rates | (7.6 | ) | (11.7 | ) | (7.9 | ) | |||
Research and development tax credits | (2.3 | ) | (2.3 | ) | (1.7 | ) | |||
Domestic manufacturing deduction benefit | (1.3 | ) | (1.4 | ) | (2.0 | ) | |||
Settlements, effective settlements, and related remeasurements | — | (0.1 | ) | (2.9 | ) | ||||
Tax Reform | 26.8 | — | — | ||||||
ISecG divestiture | 3.3 | — | — | ||||||
Other | (1.1 | ) | 0.8 | (0.9 | ) | ||||
Effective tax rate | 52.8 | % | 20.3 | % | 19.6 | % | |||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Deferred tax assets: | ||||||||
Accrued compensation and other benefits | $ | 711 | $ | 1,182 | ||||
Share-based compensation | 241 | 373 | ||||||
Deferred income | 211 | 596 | ||||||
Inventory | 675 | 1,044 | ||||||
State credits and net operating losses | 1,081 | 846 | ||||||
Other, net | 887 | 1,187 | ||||||
Gross deferred tax assets | 3,806 | 5,228 | ||||||
Valuation allowance | (1,171 | ) | (953 | ) | ||||
Total deferred tax assets | 2,635 | 4,275 | ||||||
Deferred tax liabilities: | ||||||||
Property, plant and equipment | (943 | ) | (1,574 | ) | ||||
Licenses and intangibles | (881 | ) | (1,036 | ) | ||||
Convertible debt | (374 | ) | (1,098 | ) | ||||
Unrealized gains on investments and derivatives | (421 | ) | (940 | ) | ||||
Transition tax | (1,850 | ) | — | |||||
Other, net | (373 | ) | (450 | ) | ||||
Total deferred tax liabilities | (4,842 | ) | (5,098 | ) | ||||
Net deferred tax assets (liabilities) | (2,207 | ) | (823 | ) | ||||
Reported as: | ||||||||
Deferred tax assets | 840 | 907 | ||||||
Deferred tax liabilities | (3,046 | ) | (1,730 | ) | ||||
Net deferred tax assets (liabilities) | $ | (2,207 | ) | $ | (823 | ) | ||
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December 30, 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 | $ | 2,294 | $ | 4 | $ | (13 | ) | $ | 2,285 | $ | 3,847 | $ | 4 | $ | (14 | ) | $ | 3,837 | ||||||||||||||
Financial institution instruments | 3,387 | 3 | (9 | ) | 3,381 | 6,098 | 5 | (11 | ) | 6,092 | ||||||||||||||||||||||
Government debt | 961 | — | (6 | ) | 955 | 1,581 | — | (8 | ) | 1,573 | ||||||||||||||||||||||
Marketable equity securities | 1,507 | 2,686 | (1 | ) | 4,192 | 2,818 | 3,363 | (1 | ) | 6,180 | ||||||||||||||||||||||
Total available-for-sale investments | $ | 8,149 | $ | 2,693 | $ | (29 | ) | $ | 10,813 | $ | 14,344 | $ | 3,372 | $ | (34 | ) | $ | 17,682 | ||||||||||||||
(In Millions) | Fair Value | |||
Due in 1 year or less | $ | 2,573 | ||
Due in 1–2 years | 1,776 | |||
Due in 2–5 years | 1,866 | |||
Due after 5 years | 71 | |||
Instruments not due at a single maturity date | 335 | |||
Total | $ | 6,621 | ||
December 30, 2017 | December 31, 2016 | |||||||||||||
(Dollars In Millions) | Carrying Value | Ownership Percentage | Carrying Value | Ownership Percentage | ||||||||||
IM Flash Technologies, LLC | $ | 1,505 | 49 | % | $ | 849 | 49 | % | ||||||
McAfee | 153 | 49 | % | n/a | n/a | |||||||||
Cloudera, Inc. | n/a | n/a | 225 | 16 | % | |||||||||
Other equity method investments | 229 | 254 | ||||||||||||
Total | $ | 1,887 | $ | 1,328 | ||||||||||
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(In Millions) | ||||
Short-term investments and marketable securities | $ | 370 | ||
Tangible assets | 227 | |||
Goodwill | 10,278 | |||
Identified intangible assets | 4,482 | |||
Current liabilities | (69 | ) | ||
Deferred tax liabilities and other | (418 | ) | ||
Noncontrolling interest | (375 | ) | ||
Total | $ | 14,495 | ||
Fair Value (In Millions) | Weighted Average Estimated Useful Life (In Years) | |||||
Developed technology | $ | 2,346 | 9 | |||
Customer relationships | 713 | 12 | ||||
Brands | 64 | 10 | ||||
Identified intangible assets subject to amortization | 3,123 | |||||
In-process research and development | 1,359 | |||||
Identified intangible assets not subject to amortization | 1,359 | |||||
Total identified intangible assets | $ | 4,482 | ||||
(In Millions) | ||||
Short-term investments | $ | 182 | ||
Receivables | 368 | |||
Inventory | 555 | |||
Other current assets | 123 | |||
Property, plant and equipment | 312 | |||
Goodwill | 5,448 | |||
Identified intangible assets | 7,566 | |||
Other long-term investments and assets | 2,515 | |||
Deferred income | (351 | ) | ||
Other liabilities | (283 | ) | ||
Long-term debt | (1,535 | ) | ||
Deferred tax liabilities | (449 | ) | ||
Total | $ | 14,451 | ||
Fair Value (In Millions) | Weighted Average Estimated Useful Life (In Years) | |||||
Developed technology | $ | 5,757 | 9 | |||
Customer relationships | 1,121 | 12 | ||||
Brands | 87 | 6 | ||||
Identified intangible assets subject to amortization | 6,965 | |||||
In-process research and development | 601 | |||||
Identified intangible assets not subject to amortization | 601 | |||||
Total identified intangible assets | $ | 7,566 | ||||
(In Millions) | Apr 1, 2017 | |||
Accounts receivable | $ | 317 | ||
Goodwill | 3,601 | |||
Identified intangible assets | 965 | |||
Other assets | 276 | |||
Total assets | $ | 5,159 | ||
Deferred income | $ | 1,553 | ||
Other liabilities | 276 | |||
Total liabilities | $ | 1,829 | ||
|
|||
(In Millions) | Dec 31, 2016 | Acquisitions | Transfers | Other | Dec 30, 2017 | |||||||||||||||
Client Computing Group | $ | 4,356 | $ | — | $ | — | $ | — | $ | 4,356 | ||||||||||
Data Center Group | 5,412 | 9 | — | — | 5,421 | |||||||||||||||
Internet of Things Group | 1,123 | 3 | — | — | 1,126 | |||||||||||||||
Programmable Solutions Group | 2,490 | — | — | — | 2,490 | |||||||||||||||
All other | 718 | 10,278 | — | — | 10,996 | |||||||||||||||
Total | $ | 14,099 | $ | 10,290 | $ | — | $ | — | $ | 24,389 | ||||||||||
(In Millions) | Dec 26, 2015 | Acquisitions | Transfers | Other | Dec 31, 2016 | |||||||||||||||
Client Computing Group | $ | 4,078 | $ | 65 | $ | 213 | $ | — | $ | 4,356 | ||||||||||
Data Center Group | 2,404 | 2,831 | 177 | — | 5,412 | |||||||||||||||
Internet of Things Group | 428 | 659 | 36 | — | 1,123 | |||||||||||||||
Intel Security Group | 3,599 | — | — | (3,599 | ) | — | ||||||||||||||
Software and Services Group | 441 | — | (441 | ) | — | — | ||||||||||||||
Programmable Solutions Group | — | 2,490 | — | — | 2,490 | |||||||||||||||
All other | 382 | 321 | 15 | — | 718 | |||||||||||||||
Total | $ | 11,332 | $ | 6,366 | $ | — | $ | (3,599 | ) | $ | 14,099 | |||||||||
|
|||
December 30, 2017 | ||||||||||||
(In Millions) | Gross Assets | Accumulated Amortization | Net | |||||||||
Acquisition-related developed technology | $ | 8,912 | $ | (1,922 | ) | $ | 6,990 | |||||
Acquisition-related customer relationships | 2,052 | (313 | ) | 1,739 | ||||||||
Acquisition-related brands | 143 | (29 | ) | 114 | ||||||||
Licensed technology and patents | 3,104 | (1,370 | ) | 1,734 | ||||||||
Identified intangible assets subject to amortization | 14,211 | (3,634 | ) | 10,577 | ||||||||
In-process research and development | 2,168 | — | 2,168 | |||||||||
Identified intangible assets not subject to amortization | 2,168 | — | 2,168 | |||||||||
Total identified intangible assets | $ | 16,379 | $ | (3,634 | ) | $ | 12,745 | |||||
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 | |||||
December 30, 2017 | December 31, 2016 | |||||||||||
Gross Assets (In Millions) | Estimated Useful Life (In Years) | Gross Assets (In Millions) | Estimated Useful Life (In Years) | |||||||||
Acquisition-related developed technology | $ | 2,346 | 9 | $ | 5,842 | 9 | ||||||
Acquisition-related customer relationships | $ | 713 | 12 | $ | 1,148 | 12 | ||||||
Acquisition-related brands | $ | 64 | 10 | $ | 87 | 6 | ||||||
Licensed technology and patents | $ | 162 | 7 | $ | 342 | 12 | ||||||
(In Years) | Estimated Useful Life Range | |||
Acquisition-related developed technology | 5 | – | 9 | |
Acquisition-related customer relationships | 7 | – | 12 | |
Acquisition-related brands | 6 | – | 10 | |
Licensed technology and patents | 2 | – | 17 | |
Years Ended (In Millions) | Location | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | ||||||||||
Acquisition-related developed technology | Cost of sales | $ | 912 | $ | 937 | $ | 343 | |||||||
Acquisition-related customer relationships | Amortization of acquisition-related intangibles | 161 | 270 | 258 | ||||||||||
Acquisition-related brands | Amortization of acquisition-related intangibles | 16 | 24 | 7 | ||||||||||
Licensed technology and patents | Cost of sales | 288 | 293 | 282 | ||||||||||
Total amortization expenses | $ | 1,377 | $ | 1,524 | $ | 890 | ||||||||
(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | |||||||||||||||
Acquisition-related developed technology | $ | 1,045 | $ | 1,043 | $ | 1,011 | $ | 976 | $ | 937 | ||||||||||
Acquisition-related customer relationships | 181 | 180 | 179 | 179 | 171 | |||||||||||||||
Acquisition-related brands | 20 | 20 | 20 | 20 | 6 | |||||||||||||||
Licensed technology and patents | 256 | 243 | 211 | 195 | 190 | |||||||||||||||
Total future amortization expenses | $ | 1,502 | $ | 1,486 | $ | 1,421 | $ | 1,370 | $ | 1,304 | ||||||||||
|
|||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Equity method investments | $ | 1,887 | $ | 1,328 | ||||
Non-marketable cost method investments | 2,613 | 3,098 | ||||||
Non-current deferred tax assets | 840 | 907 | ||||||
Pre-payments for property, plant and equipment | 714 | 347 | ||||||
Loans receivable | 860 | 236 | ||||||
Other | 688 | 1,243 | ||||||
Total other long-term assets | $ | 7,602 | $ | 7,159 | ||||
|
|||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Drafts payable | $ | 37 | $ | 25 | ||||
Current portion of long-term debt | 1,739 | 4,609 | ||||||
Total short-term debt | $ | 1,776 | $ | 4,634 | ||||
December 30, 2017 | December 31, 2016 | |||||||||
(In Millions) | Effective Interest Rate | Amount | Amount | |||||||
Floating-rate senior notes: | ||||||||||
Three-month LIBOR plus 0.08%, due May 2020 | 1.40% | $ | 700 | $ | — | |||||
Three-month LIBOR plus 0.35%, due May 2022 | 1.66% | 800 | — | |||||||
Fixed-rate senior notes: | ||||||||||
1.75%, due May 2017 | n/a | — | 500 | |||||||
1.35%, due December 2017 | n/a | — | 3,000 | |||||||
2.50%, due November 2018 | 2.14% | 600 | 600 | |||||||
3.25%, due December 20191 | 2.19% | 194 | 180 | |||||||
1.85%, due May 2020 | 1.90% | 1,000 | — | |||||||
2.45%, due July 2020 | 2.50% | 1,750 | 1,750 | |||||||
1.70%, due May 2021 | 1.78% | 500 | 500 | |||||||
3.30%, due October 2021 | 2.69% | 2,000 | 2,000 | |||||||
2.35%, due May 2022 | 1.86% | 750 | — | |||||||
3.10%, due July 2022 | 2.50% | 1,000 | 1,000 | |||||||
4.00%, due December 20221 | 2.98% | 428 | 396 | |||||||
2.70%, due December 2022 | 2.08% | 1,500 | 1,500 | |||||||
4.10%, due November 2023 | 3.23% | 400 | 400 | |||||||
2.88%, due May 2024 | 2.36% | 1,250 | — | |||||||
2.70%, due June 2024 | 2.12% | 600 | — | |||||||
3.70%, due July 2025 | 3.20% | 2,250 | 2,250 | |||||||
2.60%, due May 2026 | 1.66% | 1,000 | 1,000 | |||||||
3.15%, due May 2027 | 2.82% | 1,000 | — | |||||||
4.00%, due December 2032 | 4.10% | 750 | 750 | |||||||
4.80%, due October 2041 | 4.86% | 802 | 1,500 | |||||||
4.25%, due December 2042 | 4.39% | 567 | 925 | |||||||
4.90%, due July 2045 | 4.92% | 772 | 2,000 | |||||||
4.90%, due August 2045 | n/a | — | 1,007 | |||||||
4.70%, due December 2045 | 2.49% | 915 | 915 | |||||||
4.10%, due May 2046 | 4.12% | 1,250 | 1,250 | |||||||
4.10%, due May 2047 | 4.13% | 1,000 | — | |||||||
4.10%, due August 2047 | 2.15% | 640 | — | |||||||
3.73%, due December 2047 | 3.74% | 1,967 | — | |||||||
Junior subordinated convertible debentures: | ||||||||||
2.95%, due December 2035 | n/a | — | 1,600 | |||||||
3.25%, due August 20392 | 4.03% | 2,000 | 2,000 | |||||||
Total senior notes and other borrowings | 28,385 | 27,023 | ||||||||
Unamortized premium/discount and issuance costs | (1,357 | ) | (1,581 | ) | ||||||
Hedge accounting fair value adjustments | (252 | ) | (184 | ) | ||||||
Long-term debt | 26,776 | 25,258 | ||||||||
Current portion of long-term debt | (1,739 | ) | (4,609 | ) | ||||||
Total long-term debt | $ | 25,037 | $ | 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 17: Derivative Financial Instruments." Principal and unamortized discount/issuance costs for the Australian-dollar-denominated notes in the table above were calculated using foreign currency exchange rates as of December 30, 2017 and December 31, 2016. |
2 | Effective interest rate for the year ended December 31, 2016 was 4.01%. |
2009 Debentures | ||||||||
(In Millions, Except Per Share Amounts) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Outstanding principal | $ | 2,000 | $ | 2,000 | ||||
Equity component (including temporary equity) carrying amount | $ | 613 | $ | 613 | ||||
Unamortized discount1 | $ | 866 | $ | 882 | ||||
Net debt carrying amount | $ | 1,134 | $ | 1,118 | ||||
Conversion rate (shares of common stock per $1,000 principal amount of debentures) | 48.37 | 47.72 | ||||||
Effective conversion price (per share of common stock) | $ | 20.68 | $ | 20.95 | ||||
1 | The unamortized discounts for the 2009 debentures are amortized over the remaining life of the debt. |
(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 and thereafter | Total | |||||||||||||||||||||
$ | 600 | $ | 194 | $ | 3,450 | $ | 2,500 | $ | 4,478 | $ | 17,163 | $ | 28,385 | |||||||||||||||
Floating-rate senior notes: | ||
Three-month LIBOR plus 0.08%, due May 2020 | 0.08 | % |
Three-month LIBOR plus 0.35%, due May 2022 | 0.35 | % |
Fixed-rate senior notes: | ||
1.75%, due May 2017 | N/A | |
1.35%, due December 2017 | N/A | |
2.50%, due November 2018 | 2.50 | % |
3.25%, due December 20191 | 3.25 | % |
1.85%, due May 2020 | 1.85 | % |
2.45%, due July 2020 | 2.45 | % |
1.70%, due May 2021 | 1.70 | % |
3.30%, due October 2021 | 3.30 | % |
2.35%, due May 2022 | 2.35 | % |
3.10%, due July 2022 | 3.10 | % |
4.00%, due December 20221 | 4.00 | % |
2.70%, due December 2022 | 2.70 | % |
4.10%, due November 2023 | 4.10 | % |
2.88%, due May 2024 | 2.88 | % |
2.70%, due June 2024 | 2.70 | % |
3.70%, due July 2025 | 3.70 | % |
2.60%, due May 2026 | 2.60 | % |
3.15%, due May 2027 | 3.15 | % |
4.00%, due December 2032 | 4.00 | % |
4.80%, due October 2041 | 4.80 | % |
4.25%, due December 2042 | 4.25 | % |
4.90%, due July 2045 | 4.90 | % |
4.90%, due August 2045 | N/A | |
4.70%, due December 2045 | 4.70 | % |
4.10%, due May 2046 | 4.10 | % |
4.10%, due May 2047 | 4.10 | % |
4.10%, due August 2047 | 4.10 | % |
3.73%, due December 2047 | 3.73 | % |
Junior subordinated convertible debentures: | ||
2.95%, due December 2035 | N/A | |
3.25%, due August 20392 | 3.25 | % |
|
|||
December 30, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||
Fair Value Measured and Recorded at Reporting Date Using | Total | Fair Value Measured and Recorded at Reporting Date Using | Total | |||||||||||||||||||||||||||||
(In Millions) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||||||||
Corporate debt | $ | — | $ | 30 | $ | — | $ | 30 | $ | — | $ | 498 | $ | — | $ | 498 | ||||||||||||||||
Financial institution instruments 1 | 335 | 640 | — | 975 | 1,920 | 811 | — | 2,731 | ||||||||||||||||||||||||
Government debt 2 | — | 90 | — | 90 | — | 332 | — | 332 | ||||||||||||||||||||||||
Reverse repurchase agreements | — | 1,399 | — | 1,399 | — | 768 | — | 768 | ||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||||||||
Corporate debt | — | 672 | 3 | 675 | — | 1,332 | 6 | 1,338 | ||||||||||||||||||||||||
Financial institution instruments 1 | — | 1,009 | — | 1,009 | — | 1,603 | — | 1,603 | ||||||||||||||||||||||||
Government debt 2 | — | 130 | — | 130 | — | 284 | — | 284 | ||||||||||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||||||||
Asset-backed securities | — | 2 | — | 2 | — | 87 | — | 87 | ||||||||||||||||||||||||
Corporate debt | — | 2,842 | — | 2,842 | — | 2,847 | — | 2,847 | ||||||||||||||||||||||||
Financial institution instruments 1 | 59 | 1,064 | — | 1,123 | 36 | 1,608 | — | 1,644 | ||||||||||||||||||||||||
Government debt 2 | 30 | 4,758 | — | 4,788 | 32 | 3,704 | — | 3,736 | ||||||||||||||||||||||||
Other current assets: | ||||||||||||||||||||||||||||||||
Derivative assets | 2 | 277 | — | 279 | — | 382 | — | 382 | ||||||||||||||||||||||||
Loans receivable | — | 30 | — | 30 | — | 326 | — | 326 | ||||||||||||||||||||||||
Marketable equity securities | 4,148 | 44 | — | 4,192 | 6,180 | — | — | 6,180 | ||||||||||||||||||||||||
Other long-term investments: | ||||||||||||||||||||||||||||||||
Corporate debt | — | 1,576 | 4 | 1,580 | — | 1,995 | 6 | 2,001 | ||||||||||||||||||||||||
Financial institution instruments 1 | — | 1,397 | — | 1,397 | — | 1,758 | — | 1,758 | ||||||||||||||||||||||||
Government debt 2 | — | 735 | — | 735 | — | 957 | — | 957 | ||||||||||||||||||||||||
Other long-term assets: | ||||||||||||||||||||||||||||||||
Derivative assets | — | 77 | 7 | 84 | — | 31 | 9 | 40 | ||||||||||||||||||||||||
Loans receivable | — | 610 | — | 610 | — | 236 | — | 236 | ||||||||||||||||||||||||
Total assets measured and recorded at fair value | 4,574 | 17,382 | 14 | 21,970 | 8,168 | 19,559 | 21 | 27,748 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Other accrued liabilities: | ||||||||||||||||||||||||||||||||
Derivative liabilities | — | 454 | — | 454 | — | 371 | — | 371 | ||||||||||||||||||||||||
Other long-term liabilities: | ||||||||||||||||||||||||||||||||
Derivative liabilities | — | 297 | 6 | 303 | — | 179 | 33 | 212 | ||||||||||||||||||||||||
Total liabilities measured and recorded at fair value | $ | — | $ | 751 | $ | 6 | $ | 757 | $ | — | $ | 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 U.S. Treasury securities. Level 2 investments consist primarily of U.S. Agency notes and non-U.S. government debt. |
|
|||
(In Millions) | Unrealized Holding Gains (Losses) on Available-for-Sale Investments | Deferred Tax Asset Valuation Allowance | Unrealized Holding Gains (Losses) on Derivatives | Actuarial Valuation and Other Pension Expenses | Foreign Currency Translation Adjustment | Total | ||||||||||||||||||
December 26, 2015 | $ | 1,749 | $ | 8 | $ | (266 | ) | $ | (916 | ) | $ | (515 | ) | $ | 60 | |||||||||
Other comprehensive income (loss) before reclassifications | 1,170 | — | (26 | ) | (680 | ) | (4 | ) | 460 | |||||||||||||||
Amounts reclassified out of accumulated other comprehensive income (loss) | (530 | ) | — | 38 | 170 | — | (322 | ) | ||||||||||||||||
Tax effects | (225 | ) | (8 | ) | (5 | ) | 146 | — | (92 | ) | ||||||||||||||
Other comprehensive income (loss) | 415 | (8 | ) | 7 | (364 | ) | (4 | ) | 46 | |||||||||||||||
December 31, 2016 | 2,164 | — | (259 | ) | (1,280 | ) | (519 | ) | 106 | |||||||||||||||
Other comprehensive income (loss) before reclassifications | 2,760 | — | 605 | 275 | 3 | 3,643 | ||||||||||||||||||
Amounts reclassified out of accumulated other comprehensive income (loss) | (3,431 | ) | — | (69 | ) | 103 | 507 | (2,890 | ) | |||||||||||||||
Tax effects | 235 | — | (171 | ) | (61 | ) | — | 3 | ||||||||||||||||
Other comprehensive income (loss) | (436 | ) | — | 365 | 317 | 510 | 756 | |||||||||||||||||
December 30, 2017 | $ | 1,728 | $ | — | $ | 106 | $ | (963 | ) | $ | (9 | ) | $ | 862 | ||||||||||
Income Before Taxes Impact for Years Ended (In Millions) | ||||||||||||||
Comprehensive Income Components | Location | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | ||||||||||
Unrealized holding gains (losses)1 on available-for-sale investments: | ||||||||||||||
Gains (losses) on equity investments, net | $ | 3,431 | $ | 530 | $ | 93 | ||||||||
3,431 | 530 | 93 | ||||||||||||
Unrealized holding gains (losses) on derivatives: | ||||||||||||||
Foreign currency contracts | Cost of sales | (65 | ) | (65 | ) | (290 | ) | |||||||
Research and development | 45 | 7 | (177 | ) | ||||||||||
Marketing, general and administrative | 7 | 5 | (46 | ) | ||||||||||
Gains (losses) on equity investments, net | 57 | 11 | — | |||||||||||
Interest and other, net | 25 | 4 | (9 | ) | ||||||||||
69 | (38 | ) | (522 | ) | ||||||||||
Amortization of pension and postretirement benefit components: | ||||||||||||||
Actuarial valuation and other pension expenses | (103 | ) | (170 | ) | (77 | ) | ||||||||
(103 | ) | (170 | ) | (77 | ) | |||||||||
Currency translation adjustment | Interest and other, net | (507 | ) | — | — | |||||||||
Total amounts reclassified out of accumulated other comprehensive income (loss) | $ | 2,890 | $ | 322 | $ | (506 | ) | |||||||
1 | We determine the cost of the investment sold based on an average cost basis at the individual security level. |
|
|||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Foreign currency contracts | $ | 19,958 | $ | 17,960 | $ | 16,721 | ||||||
Interest rate contracts | 16,823 | 14,228 | 8,812 | |||||||||
Other | 1,636 | 1,340 | 1,122 | |||||||||
Total | $ | 38,417 | $ | 33,528 | $ | 26,655 | ||||||
December 30, 2017 | December 31, 2016 | |||||||||||||||
(In Millions) | Assets1 | Liabilities2 | Assets1 | Liabilities2 | ||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Foreign currency contracts3 | $ | 283 | $ | 32 | $ | 21 | $ | 252 | ||||||||
Interest rate contracts | 1 | 254 | 3 | 187 | ||||||||||||
Total derivatives designated as hedging instruments | 284 | 286 | 24 | 439 | ||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Foreign currency contracts3 | 52 | 447 | 374 | 114 | ||||||||||||
Interest rate contracts | 18 | 24 | 15 | 30 | ||||||||||||
Other | 9 | — | 9 | — | ||||||||||||
Total derivatives not designated as hedging instruments | 79 | 471 | 398 | 144 | ||||||||||||
Total derivatives | $ | 363 | $ | 757 | $ | 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. |
December 30, 2017 | ||||||||||||||||||||||||
Gross Amounts Not Offset in the Balance Sheet | ||||||||||||||||||||||||
(In Millions) | Gross Amounts Recognized | Gross Amounts Offset in the Balance Sheet | Net Amounts Presented in the Balance Sheet | Financial Instruments | Cash and Non-Cash Collateral Received or Pledged | Net Amount | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Derivative assets subject to master netting arrangements | $ | 350 | $ | — | $ | 350 | $ | (206 | ) | $ | (130 | ) | $ | 14 | ||||||||||
Reverse repurchase agreements | 1,649 | — | 1,649 | — | (1,649 | ) | — | |||||||||||||||||
Total assets | 1,999 | — | 1,999 | (206 | ) | (1,779 | ) | 14 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative liabilities subject to master netting arrangements | 745 | — | 745 | (206 | ) | (504 | ) | 35 | ||||||||||||||||
Total liabilities | $ | 745 | $ | — | $ | 745 | $ | (206 | ) | $ | (504 | ) | $ | 35 | ||||||||||
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 | ||||||||||
Gains (Losses) Recognized in Statement of Income on Derivatives | ||||||||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Interest rate contracts | $ | (68 | ) | $ | (171 | ) | $ | (13 | ) | |||
Hedged items | 68 | 171 | 13 | |||||||||
Total | $ | — | $ | — | $ | — | ||||||
Line Item in the Consolidated Balance Sheet in Which the Hedged Item Is Included | Carrying Amount of the Hedged Item Asset/(Liabilities) | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities) | ||||||||||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 30, 2017 | Dec 31, 2016 | ||||||||||||
Long-Term Debt | $ | (12,653 | ) | $ | (8,879 | ) | $ | 252 | $ | 184 | ||||||
Years Ended (In Millions) | Location of Gains (Losses) Recognized in Income on Derivatives | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | ||||||||||
Foreign currency contracts | Interest and other, net | $ | (547 | ) | $ | 388 | $ | 296 | ||||||
Interest rate contracts | Interest and other, net | 9 | 8 | (8 | ) | |||||||||
Other | Various | 203 | 113 | (38 | ) | |||||||||
Total | $ | (335 | ) | $ | 509 | $ | 250 | |||||||
|
|||
(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023-2027 | ||||||||||||||||||
Postretirement Medical Benefits | $ | 28 | $ | 29 | $ | 30 | $ | 31 | $ | 32 | $ | 179 | ||||||||||||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Changes in projected benefit obligation: | ||||||||
Beginning projected benefit obligation | $ | 3,640 | $ | 3,130 | ||||
Service cost | 84 | 130 | ||||||
Interest cost | 117 | 106 | ||||||
Actuarial (gain) loss | 24 | 575 | ||||||
Currency exchange rate changes | 281 | (80 | ) | |||||
Plan curtailments | (162 | ) | 17 | |||||
Plan settlements | (101 | ) | (202 | ) | ||||
Other | (41 | ) | (36 | ) | ||||
Ending projected benefit obligation1 | 3,842 | 3,640 | ||||||
Changes in fair value of plan assets: | ||||||||
Beginning fair value of plan assets | 1,696 | 1,638 | ||||||
Actual return on plan assets | 136 | 81 | ||||||
Employer contributions | 471 | 416 | ||||||
Currency exchange rate changes | 124 | (26 | ) | |||||
Plan settlements | (101 | ) | (202 | ) | ||||
Benefits paid to plan participants | (42 | ) | (84 | ) | ||||
Other | 3 | (127 | ) | |||||
Ending fair value of plan assets2 | 2,287 | 1,696 | ||||||
Amounts recognized in the consolidated balance sheet3 | $ | 1,555 | $ | 1,944 | ||||
Accumulated other comprehensive loss (income), before tax4 | $ | 1,257 | $ | 1,603 | ||||
Accumulated benefit obligation5 | $ | 3,423 | $ | 2,976 | ||||
1 | The split between U.S. and non-U.S. in the projected benefit obligation was 38% and 62%, respectively, as of December 30, 2017 and December 31, 2016. |
2 | The split between the U.S. and non-U.S. in the fair value of plan assets was 49% and 51%, respectively, as of December 30, 2017 and 46% and 54%, respectively, as of December 31, 2016. |
3 | Substantially all amounts recognized in the consolidated balance sheet are recorded in other long-term liabilities for all periods presented. |
4 | The split between U.S. and non-U.S. in the accumulated other comprehensive loss (income), before tax, was 38% and 62%, respectively, as of December 30, 2017 and 34% and 66%, respectively, as of December 31, 2016. Substantially all amounts recognized in accumulated other comprehensive loss (income) are attributable to net actuarial gain or loss. |
5 | All plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets for all periods presented. |
Dec 30, 2017 | Dec 31, 2016 | |||||
Weighted average actuarial assumptions used to determine benefit obligations | ||||||
Discount rate | 3.0 | % | 3.2 | % | ||
Rate of compensation increase | 3.3 | % | 3.6 | % | ||
2017 | 2016 | 2015 | |||||||
Weighted average actuarial assumptions used to determine costs | |||||||||
Discount rate | 3.2 | % | 3.3 | % | 3.1 | % | |||
Expected long-term rate of return on plan assets | 4.6 | % | 5.5 | % | 5.9 | % | |||
Rate of compensation increase | 3.6 | % | 3.8 | % | 3.9 | % | |||
December 30, 2017 | Dec 31, 2016 | |||||||||||||||||||
Fair Value Measured at Reporting Date Using | ||||||||||||||||||||
(In Millions) | Level 1 | Level 2 | Level 3 | Total | Total | |||||||||||||||
Equity securities | $ | 451 | $ | — | $ | 22 | $ | 473 | $ | 328 | ||||||||||
Fixed income | 45 | 326 | 94 | 465 | 304 | |||||||||||||||
Other investments | 19 | — | — | 19 | — | |||||||||||||||
Assets measured by fair value hierarchy | $ | 515 | $ | 326 | $ | 116 | $ | 957 | $ | 632 | ||||||||||
Assets measured at net asset value | 1,208 | 1,044 | ||||||||||||||||||
Cash and cash equivalents | 122 | 20 | ||||||||||||||||||
Total pension plan assets at fair value | $ | 2,287 | $ | 1,696 | ||||||||||||||||
(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023-2027 | ||||||||||||||||||
Pension benefits | $ | 125 | $ | 117 | $ | 115 | $ | 121 | $ | 124 | $ | 673 | ||||||||||||
|
|||
RSUs and OSUs | Stock Purchase Plan | |||||||||||||||||||||||
Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||||||||||||
Estimated values | $ | 35.30 | $ | 29.76 | $ | 31.63 | $ | 7.20 | $ | 6.70 | $ | 6.56 | ||||||||||||
Risk-free interest rate | 1.4 | % | 0.9 | % | 0.6 | % | 1.0 | % | 0.5 | % | 0.1 | % | ||||||||||||
Dividend yield | 2.9 | % | 3.3 | % | 2.9 | % | 2.9 | % | 3.2 | % | 3.1 | % | ||||||||||||
Volatility | 23 | % | 23 | % | 27 | % | 19 | % | 22 | % | 25 | % | ||||||||||||
Expected life (in years) | n/a | n/a | n/a | 0.5 | 0.5 | 0.5 | ||||||||||||||||||
Number of RSUs (In Millions) | Weighted Average Grant-Date Fair Value | ||||||
December 31, 2016 | 106.8 | $ | 28.99 | ||||
Granted | 45.2 | $ | 35.30 | ||||
Assumed in acquisition | 1.1 | $ | 34.90 | ||||
Vested | (40.5 | ) | $ | 27.52 | |||
Forfeited | (12.2 | ) | $ | 30.08 | |||
December 30, 2017 | 100.4 | $ | 32.36 | ||||
Expected to vest as of December 30, 2017 | 96.5 | $ | 32.36 | ||||
|
|||
(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 and thereafter | Total | |||||||||||||||||||||
Minimum rental commitments under all non-cancelable leases1 | $ | 215 | $ | 186 | $ | 162 | $ | 136 | $ | 105 | $ | 441 | $ | 1,245 | ||||||||||||||
1 | Includes leases with initial term in excess of one year. |
|
|||
Years Ended (In Millions) | Balance at Beginning of Year | Additions Charged to Expenses/ Other Accounts | Net (Deductions) Recoveries | Balance at End of Year | ||||||||||||
Valuation allowance for deferred tax assets | ||||||||||||||||
December 30, 2017 | $ | 953 | $ | 237 | $ | (19 | ) | $ | 1,171 | |||||||
December 31, 2016 | $ | 701 | $ | 261 | $ | (9 | ) | $ | 953 | |||||||
December 26, 2015 | $ | 595 | $ | 190 | $ | (84 | ) | $ | 701 | |||||||
|
|||
• | Level 1. Quoted prices in active markets for identical assets or liabilities. We evaluate security-specific market data when determining whether a market is active. |
• | Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in less active markets, or model-derived valuations. All significant inputs used in our valuations, such as discounted cash flows, are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. We use LIBOR-based yield curves, currency spot and forward rates, and credit ratings as significant inputs in our valuations. Level 2 inputs also include non-binding market consensus prices as well as quoted prices that were adjusted for security-specific restrictions. When we use non-binding market consensus prices, we corroborate them with quoted market prices for similar instruments or compare them to output from internally developed pricing models such as discounted cash flow models. |
• | Level 3. Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. We monitor and review the inputs and results of these valuation models to help ensure the fair value measurements are reasonable and consistent with market experience in similar asset classes. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data. |
• | Marketable debt instruments when the interest rate and foreign currency risks are not hedged at the inception of the investment or when our criteria for designation as trading assets are not met. We record the interest income and realized gains or losses on the sale of these instruments in interest and other, net. |
• | Marketable equity securities when there is no plan to sell or hedge the investment at the time of original classification. We acquire these equity securities to promote business and strategic objectives. We record the realized gains or losses on the sale or exchange of marketable equity securities in gains (losses) on equity investments, net. |
• | For available-for-sale debt securities, we consider whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, or whether recovery of the entire amortized cost basis of the security is unlikely because a credit loss exists. When we do not expect to recover the entire amortized cost basis of the security, we separate other-than-temporary impairments into amounts representing credit losses, which are recognized in interest and other, net, and amounts not related to credit losses, which are recognized in other comprehensive income (loss). |
• | For marketable equity securities, we consider the severity and duration of the decline in fair value below cost and our ability and intent to hold the security for a sufficient period of time to allow for recovery of value in the foreseeable future based on the financial health of, and business outlook for, the investee. |
• | For non-marketable equity investments, we consider the severity and duration of the impairment, the investee's financial condition and business outlook, industry and sector performance, market for technology, operational and financing cash flow factors, and changes in the investee's credit rating, among other qualitative and quantitative criteria. Impairments of non-marketable equity investments were $555 million in 2017 ($184 million in 2016 and $166 million in 2015). |
• | Variability in the U.S.-dollar equivalent of non-U.S.-dollar-denominated cash flows associated with our forecasted operating and capital purchases spending; and |
• | Coupon and principal payments for our non-U.S.-dollar-denominated indebtedness. |
• | intangible assets, including the valuation methodology, estimations of future cash flows, discount rates, market segment growth rates, our assumed market segment share, as well as the estimated useful life of intangible assets; |
• | deferred tax assets and liabilities, uncertain tax positions, and tax-related valuation allowances, which are initially estimated as of the acquisition date; |
• | inventory; property, plant and equipment; pre-existing liabilities or legal claims; deferred revenue; and contingent consideration, each as may be applicable; and |
• | goodwill as measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. |
|
|||
Adjustments from | ||||||||||||||||
Fiscal Year Beginning (In Millions) | Dec 30, 2017 | Revenue Standard | Financial Instruments Update | Dec 31, 2017 As Adjusted | ||||||||||||
Assets: | ||||||||||||||||
Accounts receivable, net | $ | 5,607 | $ | (530 | ) | $ | — | $ | 5,077 | |||||||
Inventories | $ | 6,983 | $ | 47 | $ | — | $ | 7,030 | ||||||||
Other current assets | $ | 2,908 | $ | 64 | $ | — | $ | 2,972 | ||||||||
Equity investments | $ | — | $ | — | $ | 8,579 | $ | 8,579 | ||||||||
Marketable equity securities | $ | 4,192 | $ | — | $ | (4,192 | ) | $ | — | |||||||
Other long-term assets | $ | 7,602 | $ | — | $ | (4,387 | ) | $ | 3,215 | |||||||
Liabilities: | ||||||||||||||||
Accounts payable | $ | 2,928 | $ | 55 | $ | — | $ | 2,983 | ||||||||
Deferred income | $ | 1,656 | $ | (1,356 | ) | $ | — | $ | 300 | |||||||
Other accrued liabilities | $ | 7,535 | $ | 26 | $ | — | $ | 7,561 | ||||||||
Long-term deferred tax liabilities | $ | 3,046 | $ | 191 | $ | — | $ | 3,237 | ||||||||
Stockholders' equity: | ||||||||||||||||
Accumulated other comprehensive income (loss) | $ | 862 | $ | — | $ | (1,745 | ) | $ | (883 | ) | ||||||
Retained earnings | $ | 42,083 | $ | 665 | $ | 1,745 | $ | 44,493 | ||||||||
|
|||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Net revenue: | ||||||||||||
Client Computing Group | ||||||||||||
Platform | $ | 31,226 | $ | 30,751 | $ | 30,680 | ||||||
Adjacent | 2,777 | 2,157 | 1,539 | |||||||||
34,003 | 32,908 | 32,219 | ||||||||||
Data Center Group | ||||||||||||
Platform | 17,439 | 15,895 | 14,856 | |||||||||
Adjacent | 1,625 | 1,341 | 1,125 | |||||||||
19,064 | 17,236 | 15,981 | ||||||||||
Internet of Things Group | ||||||||||||
Platform | 2,645 | 2,290 | 1,976 | |||||||||
Adjacent | 524 | 348 | 322 | |||||||||
3,169 | 2,638 | 2,298 | ||||||||||
Non-Volatile Memory Solutions Group | 3,520 | 2,576 | 2,597 | |||||||||
Programmable Solutions Group | 1,902 | 1,669 | — | |||||||||
All other | 1,103 | 2,360 | 2,260 | |||||||||
Total net revenue | $ | 62,761 | $ | 59,387 | $ | 55,355 | ||||||
Operating income (loss): | ||||||||||||
Client Computing Group | $ | 12,919 | $ | 10,646 | $ | 8,166 | ||||||
Data Center Group | 8,395 | 7,520 | 7,847 | |||||||||
Internet of Things Group | 650 | 585 | 515 | |||||||||
Non-Volatile Memory Solutions Group | (260 | ) | (544 | ) | 239 | |||||||
Programmable Solutions Group | 458 | (104 | ) | — | ||||||||
All other | (4,226 | ) | (5,229 | ) | (2,765 | ) | ||||||
Total operating income | $ | 17,936 | $ | 12,874 | $ | 14,002 | ||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Platform revenue | ||||||||||||
Desktop platform | $ | 11,647 | $ | 12,371 | $ | 12,754 | ||||||
Notebook platform | 19,414 | 18,203 | 17,945 | |||||||||
DCG platform | 17,439 | 15,895 | 14,856 | |||||||||
Other platform1 | 2,810 | 2,467 | 1,957 | |||||||||
51,310 | 48,936 | 47,512 | ||||||||||
Adjacent revenue2 | 10,917 | 8,290 | 5,858 | |||||||||
ISecG divested business | 534 | 2,161 | 1,985 | |||||||||
Total revenue | $ | 62,761 | $ | 59,387 | $ | 55,355 | ||||||
1 | Includes our tablet, phone, service provider, and IOTG platform revenue. |
2 | Includes all of our non-platform products for CCG, DCG, and IOTG like modem, ethernet, and silicon photonic, as well as NSG, PSG, and Mobileye products. |
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
China (including Hong Kong) | $ | 14,796 | $ | 13,977 | $ | 11,679 | ||||||
Singapore | 14,285 | 12,780 | 11,544 | |||||||||
United States | 12,543 | 12,957 | 11,121 | |||||||||
Taiwan | 10,518 | 9,953 | 10,661 | |||||||||
Other countries | 10,619 | 9,720 | 10,350 | |||||||||
Total net revenue | $ | 62,761 | $ | 59,387 | $ | 55,355 | ||||||
|
|||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Raw materials | $ | 1,098 | $ | 695 | ||||
Work in process | 3,893 | 3,190 | ||||||
Finished goods | 1,992 | 1,668 | ||||||
Total inventories | $ | 6,983 | $ | 5,553 | ||||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Land and buildings | $ | 27,391 | $ | 26,627 | ||||
Machinery and equipment | 57,192 | 52,608 | ||||||
Construction in progress | 15,812 | 10,870 | ||||||
Total property, plant and equipment, gross | 100,395 | 90,105 | ||||||
Less: accumulated depreciation | 59,286 | 53,934 | ||||||
Total property, plant and equipment, net | $ | 41,109 | $ | 36,171 | ||||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
United States | $ | 24,459 | $ | 23,598 | $ | 22,611 | ||||||
Israel | 6,501 | 3,923 | 1,661 | |||||||||
China | 4,275 | 2,306 | 537 | |||||||||
Ireland | 3,938 | 4,865 | 5,789 | |||||||||
Other countries | 1,936 | 1,479 | 1,260 | |||||||||
Total property, plant and equipment, net | $ | 41,109 | $ | 36,171 | $ | 31,858 | ||||||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Deferred income on shipments of components to distributors | $ | 1,320 | $ | 1,475 | ||||
Deferred income from software, services, and other | 336 | 243 | ||||||
Current deferred income | $ | 1,656 | $ | 1,718 | ||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Share of equity method investee losses, net | $ | (232 | ) | $ | (38 | ) | $ | (95 | ) | |||
Impairments | (833 | ) | (187 | ) | (185 | ) | ||||||
Gains on sales, net | 3,499 | 562 | 145 | |||||||||
Dividends | 68 | 74 | 52 | |||||||||
Other, net | 149 | 95 | 398 | |||||||||
Total gains (losses) on equity investments, net | $ | 2,651 | $ | 506 | $ | 315 | ||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Interest income | $ | 441 | $ | 222 | $ | 124 | ||||||
Interest expense | (646 | ) | (733 | ) | (337 | ) | ||||||
Other, net | (30 | ) | 67 | 108 | ||||||||
Total interest and other, net | $ | (235 | ) | $ | (444 | ) | $ | (105 | ) | |||
|
|||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
2016 Restructuring Program | $ | 135 | $ | 1,823 | $ | — | ||||||
2015 and 2013 Restructuring Programs | — | — | 354 | |||||||||
ISecG separation costs and other charges | 249 | 63 | — | |||||||||
Total restructuring and other charges | $ | 384 | $ | 1,886 | $ | 354 | ||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Employee severance and benefit arrangements | $ | 70 | $ | 1,737 | ||||
Pension settlement charges | 25 | 57 | ||||||
Asset impairment and other charges | 40 | 29 | ||||||
Total restructuring and other charges | $ | 135 | $ | 1,823 | ||||
(In Millions) | Employee Severance and Benefits | Asset Impairments and Other | Total | |||||||||
Accrued restructuring balance as of December 26, 2015 | $ | — | $ | — | $ | — | ||||||
Additional accruals | 1,556 | 29 | 1,585 | |||||||||
Adjustments | 92 | — | 92 | |||||||||
Cash payments | (1,063 | ) | — | (1,063 | ) | |||||||
Non-cash settlements | — | (19 | ) | (19 | ) | |||||||
Accrued restructuring balance as of December 31, 2016 | 585 | 10 | 595 | |||||||||
Additional accruals | — | 40 | 40 | |||||||||
Adjustments | 70 | — | 70 | |||||||||
Cash payments | (352 | ) | (25 | ) | (377 | ) | ||||||
Non-cash settlements | — | (3 | ) | (3 | ) | |||||||
Accrued restructuring balance as of December 30, 2017 | $ | 303 | $ | 22 | $ | 325 | ||||||
|
|||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Income before taxes: | ||||||||||||
U.S. | $ | 11,141 | $ | 6,957 | $ | 8,800 | ||||||
Non-U.S. | 9,211 | 5,979 | 5,412 | |||||||||
Total income before taxes | 20,352 | 12,936 | 14,212 | |||||||||
Provision for taxes: | ||||||||||||
Current: | ||||||||||||
Federal | 10,207 | 1,319 | 2,828 | |||||||||
State | 27 | 13 | 40 | |||||||||
Non-U.S. | 899 | 756 | 842 | |||||||||
Total current provision for taxes | 11,133 | 2,088 | 3,710 | |||||||||
Deferred: | ||||||||||||
Federal | (220 | ) | 658 | (862 | ) | |||||||
Other | (162 | ) | (126 | ) | (56 | ) | ||||||
Total deferred provision for taxes | (382 | ) | 532 | (918 | ) | |||||||
Total provision for taxes | $ | 10,751 | $ | 2,620 | $ | 2,792 | ||||||
Effective tax rate | 52.8 | % | 20.3 | % | 19.6 | % | ||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Income before taxes: | ||||||||||||
U.S. | $ | 11,141 | $ | 6,957 | $ | 8,800 | ||||||
Non-U.S. | 9,211 | 5,979 | 5,412 | |||||||||
Total income before taxes | 20,352 | 12,936 | 14,212 | |||||||||
Provision for taxes: | ||||||||||||
Current: | ||||||||||||
Federal | 10,207 | 1,319 | 2,828 | |||||||||
State | 27 | 13 | 40 | |||||||||
Non-U.S. | 899 | 756 | 842 | |||||||||
Total current provision for taxes | 11,133 | 2,088 | 3,710 | |||||||||
Deferred: | ||||||||||||
Federal | (220 | ) | 658 | (862 | ) | |||||||
Other | (162 | ) | (126 | ) | (56 | ) | ||||||
Total deferred provision for taxes | (382 | ) | 532 | (918 | ) | |||||||
Total provision for taxes | $ | 10,751 | $ | 2,620 | $ | 2,792 | ||||||
Effective tax rate | 52.8 | % | 20.3 | % | 19.6 | % | ||||||
Years Ended | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | ||||||
Statutory federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
Increase (reduction) in rate resulting from: | |||||||||
Non-U.S. income taxed at different rates | (7.6 | ) | (11.7 | ) | (7.9 | ) | |||
Research and development tax credits | (2.3 | ) | (2.3 | ) | (1.7 | ) | |||
Domestic manufacturing deduction benefit | (1.3 | ) | (1.4 | ) | (2.0 | ) | |||
Settlements, effective settlements, and related remeasurements | — | (0.1 | ) | (2.9 | ) | ||||
Tax Reform | 26.8 | — | — | ||||||
ISecG divestiture | 3.3 | — | — | ||||||
Other | (1.1 | ) | 0.8 | (0.9 | ) | ||||
Effective tax rate | 52.8 | % | 20.3 | % | 19.6 | % | |||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Deferred tax assets: | ||||||||
Accrued compensation and other benefits | $ | 711 | $ | 1,182 | ||||
Share-based compensation | 241 | 373 | ||||||
Deferred income | 211 | 596 | ||||||
Inventory | 675 | 1,044 | ||||||
State credits and net operating losses | 1,081 | 846 | ||||||
Other, net | 887 | 1,187 | ||||||
Gross deferred tax assets | 3,806 | 5,228 | ||||||
Valuation allowance | (1,171 | ) | (953 | ) | ||||
Total deferred tax assets | 2,635 | 4,275 | ||||||
Deferred tax liabilities: | ||||||||
Property, plant and equipment | (943 | ) | (1,574 | ) | ||||
Licenses and intangibles | (881 | ) | (1,036 | ) | ||||
Convertible debt | (374 | ) | (1,098 | ) | ||||
Unrealized gains on investments and derivatives | (421 | ) | (940 | ) | ||||
Transition tax | (1,850 | ) | — | |||||
Other, net | (373 | ) | (450 | ) | ||||
Total deferred tax liabilities | (4,842 | ) | (5,098 | ) | ||||
Net deferred tax assets (liabilities) | (2,207 | ) | (823 | ) | ||||
Reported as: | ||||||||
Deferred tax assets | 840 | 907 | ||||||
Deferred tax liabilities | (3,046 | ) | (1,730 | ) | ||||
Net deferred tax assets (liabilities) | $ | (2,207 | ) | $ | (823 | ) | ||
|
|||
December 30, 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 | $ | 2,294 | $ | 4 | $ | (13 | ) | $ | 2,285 | $ | 3,847 | $ | 4 | $ | (14 | ) | $ | 3,837 | ||||||||||||||
Financial institution instruments | 3,387 | 3 | (9 | ) | 3,381 | 6,098 | 5 | (11 | ) | 6,092 | ||||||||||||||||||||||
Government debt | 961 | — | (6 | ) | 955 | 1,581 | — | (8 | ) | 1,573 | ||||||||||||||||||||||
Marketable equity securities | 1,507 | 2,686 | (1 | ) | 4,192 | 2,818 | 3,363 | (1 | ) | 6,180 | ||||||||||||||||||||||
Total available-for-sale investments | $ | 8,149 | $ | 2,693 | $ | (29 | ) | $ | 10,813 | $ | 14,344 | $ | 3,372 | $ | (34 | ) | $ | 17,682 | ||||||||||||||
December 30, 2017 | December 31, 2016 | |||||||||||||
(Dollars In Millions) | Carrying Value | Ownership Percentage | Carrying Value | Ownership Percentage | ||||||||||
IM Flash Technologies, LLC | $ | 1,505 | 49 | % | $ | 849 | 49 | % | ||||||
McAfee | 153 | 49 | % | n/a | n/a | |||||||||
Cloudera, Inc. | n/a | n/a | 225 | 16 | % | |||||||||
Other equity method investments | 229 | 254 | ||||||||||||
Total | $ | 1,887 | $ | 1,328 | ||||||||||
(In Millions) | Fair Value | |||
Due in 1 year or less | $ | 2,573 | ||
Due in 1–2 years | 1,776 | |||
Due in 2–5 years | 1,866 | |||
Due after 5 years | 71 | |||
Instruments not due at a single maturity date | 335 | |||
Total | $ | 6,621 | ||
|
|||
(In Millions) | ||||
Short-term investments and marketable securities | $ | 370 | ||
Tangible assets | 227 | |||
Goodwill | 10,278 | |||
Identified intangible assets | 4,482 | |||
Current liabilities | (69 | ) | ||
Deferred tax liabilities and other | (418 | ) | ||
Noncontrolling interest | (375 | ) | ||
Total | $ | 14,495 | ||
Fair Value (In Millions) | Weighted Average Estimated Useful Life (In Years) | |||||
Developed technology | $ | 2,346 | 9 | |||
Customer relationships | 713 | 12 | ||||
Brands | 64 | 10 | ||||
Identified intangible assets subject to amortization | 3,123 | |||||
In-process research and development | 1,359 | |||||
Identified intangible assets not subject to amortization | 1,359 | |||||
Total identified intangible assets | $ | 4,482 | ||||
(In Millions) | ||||
Short-term investments | $ | 182 | ||
Receivables | 368 | |||
Inventory | 555 | |||
Other current assets | 123 | |||
Property, plant and equipment | 312 | |||
Goodwill | 5,448 | |||
Identified intangible assets | 7,566 | |||
Other long-term investments and assets | 2,515 | |||
Deferred income | (351 | ) | ||
Other liabilities | (283 | ) | ||
Long-term debt | (1,535 | ) | ||
Deferred tax liabilities | (449 | ) | ||
Total | $ | 14,451 | ||
Fair Value (In Millions) | Weighted Average Estimated Useful Life (In Years) | |||||
Developed technology | $ | 5,757 | 9 | |||
Customer relationships | 1,121 | 12 | ||||
Brands | 87 | 6 | ||||
Identified intangible assets subject to amortization | 6,965 | |||||
In-process research and development | 601 | |||||
Identified intangible assets not subject to amortization | 601 | |||||
Total identified intangible assets | $ | 7,566 | ||||
|
|||
(In Millions) | Dec 31, 2016 | Acquisitions | Transfers | Other | Dec 30, 2017 | |||||||||||||||
Client Computing Group | $ | 4,356 | $ | — | $ | — | $ | — | $ | 4,356 | ||||||||||
Data Center Group | 5,412 | 9 | — | — | 5,421 | |||||||||||||||
Internet of Things Group | 1,123 | 3 | — | — | 1,126 | |||||||||||||||
Programmable Solutions Group | 2,490 | — | — | — | 2,490 | |||||||||||||||
All other | 718 | 10,278 | — | — | 10,996 | |||||||||||||||
Total | $ | 14,099 | $ | 10,290 | $ | — | $ | — | $ | 24,389 | ||||||||||
(In Millions) | Dec 26, 2015 | Acquisitions | Transfers | Other | Dec 31, 2016 | |||||||||||||||
Client Computing Group | $ | 4,078 | $ | 65 | $ | 213 | $ | — | $ | 4,356 | ||||||||||
Data Center Group | 2,404 | 2,831 | 177 | — | 5,412 | |||||||||||||||
Internet of Things Group | 428 | 659 | 36 | — | 1,123 | |||||||||||||||
Intel Security Group | 3,599 | — | — | (3,599 | ) | — | ||||||||||||||
Software and Services Group | 441 | — | (441 | ) | — | — | ||||||||||||||
Programmable Solutions Group | — | 2,490 | — | — | 2,490 | |||||||||||||||
All other | 382 | 321 | 15 | — | 718 | |||||||||||||||
Total | $ | 11,332 | $ | 6,366 | $ | — | $ | (3,599 | ) | $ | 14,099 | |||||||||
|
|||
December 30, 2017 | ||||||||||||
(In Millions) | Gross Assets | Accumulated Amortization | Net | |||||||||
Acquisition-related developed technology | $ | 8,912 | $ | (1,922 | ) | $ | 6,990 | |||||
Acquisition-related customer relationships | 2,052 | (313 | ) | 1,739 | ||||||||
Acquisition-related brands | 143 | (29 | ) | 114 | ||||||||
Licensed technology and patents | 3,104 | (1,370 | ) | 1,734 | ||||||||
Identified intangible assets subject to amortization | 14,211 | (3,634 | ) | 10,577 | ||||||||
In-process research and development | 2,168 | — | 2,168 | |||||||||
Identified intangible assets not subject to amortization | 2,168 | — | 2,168 | |||||||||
Total identified intangible assets | $ | 16,379 | $ | (3,634 | ) | $ | 12,745 | |||||
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 | |||||
December 30, 2017 | ||||||||||||
(In Millions) | Gross Assets | Accumulated Amortization | Net | |||||||||
Acquisition-related developed technology | $ | 8,912 | $ | (1,922 | ) | $ | 6,990 | |||||
Acquisition-related customer relationships | 2,052 | (313 | ) | 1,739 | ||||||||
Acquisition-related brands | 143 | (29 | ) | 114 | ||||||||
Licensed technology and patents | 3,104 | (1,370 | ) | 1,734 | ||||||||
Identified intangible assets subject to amortization | 14,211 | (3,634 | ) | 10,577 | ||||||||
In-process research and development | 2,168 | — | 2,168 | |||||||||
Identified intangible assets not subject to amortization | 2,168 | — | 2,168 | |||||||||
Total identified intangible assets | $ | 16,379 | $ | (3,634 | ) | $ | 12,745 | |||||
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 | |||||
December 30, 2017 | December 31, 2016 | |||||||||||
Gross Assets (In Millions) | Estimated Useful Life (In Years) | Gross Assets (In Millions) | Estimated Useful Life (In Years) | |||||||||
Acquisition-related developed technology | $ | 2,346 | 9 | $ | 5,842 | 9 | ||||||
Acquisition-related customer relationships | $ | 713 | 12 | $ | 1,148 | 12 | ||||||
Acquisition-related brands | $ | 64 | 10 | $ | 87 | 6 | ||||||
Licensed technology and patents | $ | 162 | 7 | $ | 342 | 12 | ||||||
(In Years) | Estimated Useful Life Range | |||
Acquisition-related developed technology | 5 | – | 9 | |
Acquisition-related customer relationships | 7 | – | 12 | |
Acquisition-related brands | 6 | – | 10 | |
Licensed technology and patents | 2 | – | 17 | |
Years Ended (In Millions) | Location | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | ||||||||||
Acquisition-related developed technology | Cost of sales | $ | 912 | $ | 937 | $ | 343 | |||||||
Acquisition-related customer relationships | Amortization of acquisition-related intangibles | 161 | 270 | 258 | ||||||||||
Acquisition-related brands | Amortization of acquisition-related intangibles | 16 | 24 | 7 | ||||||||||
Licensed technology and patents | Cost of sales | 288 | 293 | 282 | ||||||||||
Total amortization expenses | $ | 1,377 | $ | 1,524 | $ | 890 | ||||||||
(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | |||||||||||||||
Acquisition-related developed technology | $ | 1,045 | $ | 1,043 | $ | 1,011 | $ | 976 | $ | 937 | ||||||||||
Acquisition-related customer relationships | 181 | 180 | 179 | 179 | 171 | |||||||||||||||
Acquisition-related brands | 20 | 20 | 20 | 20 | 6 | |||||||||||||||
Licensed technology and patents | 256 | 243 | 211 | 195 | 190 | |||||||||||||||
Total future amortization expenses | $ | 1,502 | $ | 1,486 | $ | 1,421 | $ | 1,370 | $ | 1,304 | ||||||||||
|
|||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Equity method investments | $ | 1,887 | $ | 1,328 | ||||
Non-marketable cost method investments | 2,613 | 3,098 | ||||||
Non-current deferred tax assets | 840 | 907 | ||||||
Pre-payments for property, plant and equipment | 714 | 347 | ||||||
Loans receivable | 860 | 236 | ||||||
Other | 688 | 1,243 | ||||||
Total other long-term assets | $ | 7,602 | $ | 7,159 | ||||
|
|||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Drafts payable | $ | 37 | $ | 25 | ||||
Current portion of long-term debt | 1,739 | 4,609 | ||||||
Total short-term debt | $ | 1,776 | $ | 4,634 | ||||
December 30, 2017 | December 31, 2016 | |||||||||
(In Millions) | Effective Interest Rate | Amount | Amount | |||||||
Floating-rate senior notes: | ||||||||||
Three-month LIBOR plus 0.08%, due May 2020 | 1.40% | $ | 700 | $ | — | |||||
Three-month LIBOR plus 0.35%, due May 2022 | 1.66% | 800 | — | |||||||
Fixed-rate senior notes: | ||||||||||
1.75%, due May 2017 | n/a | — | 500 | |||||||
1.35%, due December 2017 | n/a | — | 3,000 | |||||||
2.50%, due November 2018 | 2.14% | 600 | 600 | |||||||
3.25%, due December 20191 | 2.19% | 194 | 180 | |||||||
1.85%, due May 2020 | 1.90% | 1,000 | — | |||||||
2.45%, due July 2020 | 2.50% | 1,750 | 1,750 | |||||||
1.70%, due May 2021 | 1.78% | 500 | 500 | |||||||
3.30%, due October 2021 | 2.69% | 2,000 | 2,000 | |||||||
2.35%, due May 2022 | 1.86% | 750 | — | |||||||
3.10%, due July 2022 | 2.50% | 1,000 | 1,000 | |||||||
4.00%, due December 20221 | 2.98% | 428 | 396 | |||||||
2.70%, due December 2022 | 2.08% | 1,500 | 1,500 | |||||||
4.10%, due November 2023 | 3.23% | 400 | 400 | |||||||
2.88%, due May 2024 | 2.36% | 1,250 | — | |||||||
2.70%, due June 2024 | 2.12% | 600 | — | |||||||
3.70%, due July 2025 | 3.20% | 2,250 | 2,250 | |||||||
2.60%, due May 2026 | 1.66% | 1,000 | 1,000 | |||||||
3.15%, due May 2027 | 2.82% | 1,000 | — | |||||||
4.00%, due December 2032 | 4.10% | 750 | 750 | |||||||
4.80%, due October 2041 | 4.86% | 802 | 1,500 | |||||||
4.25%, due December 2042 | 4.39% | 567 | 925 | |||||||
4.90%, due July 2045 | 4.92% | 772 | 2,000 | |||||||
4.90%, due August 2045 | n/a | — | 1,007 | |||||||
4.70%, due December 2045 | 2.49% | 915 | 915 | |||||||
4.10%, due May 2046 | 4.12% | 1,250 | 1,250 | |||||||
4.10%, due May 2047 | 4.13% | 1,000 | — | |||||||
4.10%, due August 2047 | 2.15% | 640 | — | |||||||
3.73%, due December 2047 | 3.74% | 1,967 | — | |||||||
Junior subordinated convertible debentures: | ||||||||||
2.95%, due December 2035 | n/a | — | 1,600 | |||||||
3.25%, due August 20392 | 4.03% | 2,000 | 2,000 | |||||||
Total senior notes and other borrowings | 28,385 | 27,023 | ||||||||
Unamortized premium/discount and issuance costs | (1,357 | ) | (1,581 | ) | ||||||
Hedge accounting fair value adjustments | (252 | ) | (184 | ) | ||||||
Long-term debt | 26,776 | 25,258 | ||||||||
Current portion of long-term debt | (1,739 | ) | (4,609 | ) | ||||||
Total long-term debt | $ | 25,037 | $ | 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 17: Derivative Financial Instruments." Principal and unamortized discount/issuance costs for the Australian-dollar-denominated notes in the table above were calculated using foreign currency exchange rates as of December 30, 2017 and December 31, 2016. |
2 | Effective interest rate for the year ended December 31, 2016 was 4.01%. |
2009 Debentures | ||||||||
(In Millions, Except Per Share Amounts) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Outstanding principal | $ | 2,000 | $ | 2,000 | ||||
Equity component (including temporary equity) carrying amount | $ | 613 | $ | 613 | ||||
Unamortized discount1 | $ | 866 | $ | 882 | ||||
Net debt carrying amount | $ | 1,134 | $ | 1,118 | ||||
Conversion rate (shares of common stock per $1,000 principal amount of debentures) | 48.37 | 47.72 | ||||||
Effective conversion price (per share of common stock) | $ | 20.68 | $ | 20.95 | ||||
(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 and thereafter | Total | |||||||||||||||||||||
$ | 600 | $ | 194 | $ | 3,450 | $ | 2,500 | $ | 4,478 | $ | 17,163 | $ | 28,385 | |||||||||||||||
|
|||
December 30, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||
Fair Value Measured and Recorded at Reporting Date Using | Total | Fair Value Measured and Recorded at Reporting Date Using | Total | |||||||||||||||||||||||||||||
(In Millions) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||||||||
Corporate debt | $ | — | $ | 30 | $ | — | $ | 30 | $ | — | $ | 498 | $ | — | $ | 498 | ||||||||||||||||
Financial institution instruments 1 | 335 | 640 | — | 975 | 1,920 | 811 | — | 2,731 | ||||||||||||||||||||||||
Government debt 2 | — | 90 | — | 90 | — | 332 | — | 332 | ||||||||||||||||||||||||
Reverse repurchase agreements | — | 1,399 | — | 1,399 | — | 768 | — | 768 | ||||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||||||||
Corporate debt | — | 672 | 3 | 675 | — | 1,332 | 6 | 1,338 | ||||||||||||||||||||||||
Financial institution instruments 1 | — | 1,009 | — | 1,009 | — | 1,603 | — | 1,603 | ||||||||||||||||||||||||
Government debt 2 | — | 130 | — | 130 | — | 284 | — | 284 | ||||||||||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||||||||
Asset-backed securities | — | 2 | — | 2 | — | 87 | — | 87 | ||||||||||||||||||||||||
Corporate debt | — | 2,842 | — | 2,842 | — | 2,847 | — | 2,847 | ||||||||||||||||||||||||
Financial institution instruments 1 | 59 | 1,064 | — | 1,123 | 36 | 1,608 | — | 1,644 | ||||||||||||||||||||||||
Government debt 2 | 30 | 4,758 | — | 4,788 | 32 | 3,704 | — | 3,736 | ||||||||||||||||||||||||
Other current assets: | ||||||||||||||||||||||||||||||||
Derivative assets | 2 | 277 | — | 279 | — | 382 | — | 382 | ||||||||||||||||||||||||
Loans receivable | — | 30 | — | 30 | — | 326 | — | 326 | ||||||||||||||||||||||||
Marketable equity securities | 4,148 | 44 | — | 4,192 | 6,180 | — | — | 6,180 | ||||||||||||||||||||||||
Other long-term investments: | ||||||||||||||||||||||||||||||||
Corporate debt | — | 1,576 | 4 | 1,580 | — | 1,995 | 6 | 2,001 | ||||||||||||||||||||||||
Financial institution instruments 1 | — | 1,397 | — | 1,397 | — | 1,758 | — | 1,758 | ||||||||||||||||||||||||
Government debt 2 | — | 735 | — | 735 | — | 957 | — | 957 | ||||||||||||||||||||||||
Other long-term assets: | ||||||||||||||||||||||||||||||||
Derivative assets | — | 77 | 7 | 84 | — | 31 | 9 | 40 | ||||||||||||||||||||||||
Loans receivable | — | 610 | — | 610 | — | 236 | — | 236 | ||||||||||||||||||||||||
Total assets measured and recorded at fair value | 4,574 | 17,382 | 14 | 21,970 | 8,168 | 19,559 | 21 | 27,748 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Other accrued liabilities: | ||||||||||||||||||||||||||||||||
Derivative liabilities | — | 454 | — | 454 | — | 371 | — | 371 | ||||||||||||||||||||||||
Other long-term liabilities: | ||||||||||||||||||||||||||||||||
Derivative liabilities | — | 297 | 6 | 303 | — | 179 | 33 | 212 | ||||||||||||||||||||||||
Total liabilities measured and recorded at fair value | $ | — | $ | 751 | $ | 6 | $ | 757 | $ | — | $ | 550 | $ | 33 | $ | 583 | ||||||||||||||||
|
|||
(In Millions) | Unrealized Holding Gains (Losses) on Available-for-Sale Investments | Deferred Tax Asset Valuation Allowance | Unrealized Holding Gains (Losses) on Derivatives | Actuarial Valuation and Other Pension Expenses | Foreign Currency Translation Adjustment | Total | ||||||||||||||||||
December 26, 2015 | $ | 1,749 | $ | 8 | $ | (266 | ) | $ | (916 | ) | $ | (515 | ) | $ | 60 | |||||||||
Other comprehensive income (loss) before reclassifications | 1,170 | — | (26 | ) | (680 | ) | (4 | ) | 460 | |||||||||||||||
Amounts reclassified out of accumulated other comprehensive income (loss) | (530 | ) | — | 38 | 170 | — | (322 | ) | ||||||||||||||||
Tax effects | (225 | ) | (8 | ) | (5 | ) | 146 | — | (92 | ) | ||||||||||||||
Other comprehensive income (loss) | 415 | (8 | ) | 7 | (364 | ) | (4 | ) | 46 | |||||||||||||||
December 31, 2016 | 2,164 | — | (259 | ) | (1,280 | ) | (519 | ) | 106 | |||||||||||||||
Other comprehensive income (loss) before reclassifications | 2,760 | — | 605 | 275 | 3 | 3,643 | ||||||||||||||||||
Amounts reclassified out of accumulated other comprehensive income (loss) | (3,431 | ) | — | (69 | ) | 103 | 507 | (2,890 | ) | |||||||||||||||
Tax effects | 235 | — | (171 | ) | (61 | ) | — | 3 | ||||||||||||||||
Other comprehensive income (loss) | (436 | ) | — | 365 | 317 | 510 | 756 | |||||||||||||||||
December 30, 2017 | $ | 1,728 | $ | — | $ | 106 | $ | (963 | ) | $ | (9 | ) | $ | 862 | ||||||||||
Income Before Taxes Impact for Years Ended (In Millions) | ||||||||||||||
Comprehensive Income Components | Location | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | ||||||||||
Unrealized holding gains (losses)1 on available-for-sale investments: | ||||||||||||||
Gains (losses) on equity investments, net | $ | 3,431 | $ | 530 | $ | 93 | ||||||||
3,431 | 530 | 93 | ||||||||||||
Unrealized holding gains (losses) on derivatives: | ||||||||||||||
Foreign currency contracts | Cost of sales | (65 | ) | (65 | ) | (290 | ) | |||||||
Research and development | 45 | 7 | (177 | ) | ||||||||||
Marketing, general and administrative | 7 | 5 | (46 | ) | ||||||||||
Gains (losses) on equity investments, net | 57 | 11 | — | |||||||||||
Interest and other, net | 25 | 4 | (9 | ) | ||||||||||
69 | (38 | ) | (522 | ) | ||||||||||
Amortization of pension and postretirement benefit components: | ||||||||||||||
Actuarial valuation and other pension expenses | (103 | ) | (170 | ) | (77 | ) | ||||||||
(103 | ) | (170 | ) | (77 | ) | |||||||||
Currency translation adjustment | Interest and other, net | (507 | ) | — | — | |||||||||
Total amounts reclassified out of accumulated other comprehensive income (loss) | $ | 2,890 | $ | 322 | $ | (506 | ) | |||||||
|
|||
(In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Foreign currency contracts | $ | 19,958 | $ | 17,960 | $ | 16,721 | ||||||
Interest rate contracts | 16,823 | 14,228 | 8,812 | |||||||||
Other | 1,636 | 1,340 | 1,122 | |||||||||
Total | $ | 38,417 | $ | 33,528 | $ | 26,655 | ||||||
December 30, 2017 | December 31, 2016 | |||||||||||||||
(In Millions) | Assets1 | Liabilities2 | Assets1 | Liabilities2 | ||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Foreign currency contracts3 | $ | 283 | $ | 32 | $ | 21 | $ | 252 | ||||||||
Interest rate contracts | 1 | 254 | 3 | 187 | ||||||||||||
Total derivatives designated as hedging instruments | 284 | 286 | 24 | 439 | ||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Foreign currency contracts3 | 52 | 447 | 374 | 114 | ||||||||||||
Interest rate contracts | 18 | 24 | 15 | 30 | ||||||||||||
Other | 9 | — | 9 | — | ||||||||||||
Total derivatives not designated as hedging instruments | 79 | 471 | 398 | 144 | ||||||||||||
Total derivatives | $ | 363 | $ | 757 | $ | 422 | $ | 583 | ||||||||
Line Item in the Consolidated Balance Sheet in Which the Hedged Item Is Included | Carrying Amount of the Hedged Item Asset/(Liabilities) | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities) | ||||||||||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 30, 2017 | Dec 31, 2016 | ||||||||||||
Long-Term Debt | $ | (12,653 | ) | $ | (8,879 | ) | $ | 252 | $ | 184 | ||||||
December 30, 2017 | ||||||||||||||||||||||||
Gross Amounts Not Offset in the Balance Sheet | ||||||||||||||||||||||||
(In Millions) | Gross Amounts Recognized | Gross Amounts Offset in the Balance Sheet | Net Amounts Presented in the Balance Sheet | Financial Instruments | Cash and Non-Cash Collateral Received or Pledged | Net Amount | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Derivative assets subject to master netting arrangements | $ | 350 | $ | — | $ | 350 | $ | (206 | ) | $ | (130 | ) | $ | 14 | ||||||||||
Reverse repurchase agreements | 1,649 | — | 1,649 | — | (1,649 | ) | — | |||||||||||||||||
Total assets | 1,999 | — | 1,999 | (206 | ) | (1,779 | ) | 14 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative liabilities subject to master netting arrangements | 745 | — | 745 | (206 | ) | (504 | ) | 35 | ||||||||||||||||
Total liabilities | $ | 745 | $ | — | $ | 745 | $ | (206 | ) | $ | (504 | ) | $ | 35 | ||||||||||
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 | ||||||||||
December 30, 2017 | ||||||||||||||||||||||||
Gross Amounts Not Offset in the Balance Sheet | ||||||||||||||||||||||||
(In Millions) | Gross Amounts Recognized | Gross Amounts Offset in the Balance Sheet | Net Amounts Presented in the Balance Sheet | Financial Instruments | Cash and Non-Cash Collateral Received or Pledged | Net Amount | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Derivative assets subject to master netting arrangements | $ | 350 | $ | — | $ | 350 | $ | (206 | ) | $ | (130 | ) | $ | 14 | ||||||||||
Reverse repurchase agreements | 1,649 | — | 1,649 | — | (1,649 | ) | — | |||||||||||||||||
Total assets | 1,999 | — | 1,999 | (206 | ) | (1,779 | ) | 14 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative liabilities subject to master netting arrangements | 745 | — | 745 | (206 | ) | (504 | ) | 35 | ||||||||||||||||
Total liabilities | $ | 745 | $ | — | $ | 745 | $ | (206 | ) | $ | (504 | ) | $ | 35 | ||||||||||
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 | ||||||||||
Gains (Losses) Recognized in Statement of Income on Derivatives | ||||||||||||
Years Ended (In Millions) | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||
Interest rate contracts | $ | (68 | ) | $ | (171 | ) | $ | (13 | ) | |||
Hedged items | 68 | 171 | 13 | |||||||||
Total | $ | — | $ | — | $ | — | ||||||
Years Ended (In Millions) | Location of Gains (Losses) Recognized in Income on Derivatives | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | ||||||||||
Foreign currency contracts | Interest and other, net | $ | (547 | ) | $ | 388 | $ | 296 | ||||||
Interest rate contracts | Interest and other, net | 9 | 8 | (8 | ) | |||||||||
Other | Various | 203 | 113 | (38 | ) | |||||||||
Total | $ | (335 | ) | $ | 509 | $ | 250 | |||||||
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(In Millions) | Dec 30, 2017 | Dec 31, 2016 | ||||||
Changes in projected benefit obligation: | ||||||||
Beginning projected benefit obligation | $ | 3,640 | $ | 3,130 | ||||
Service cost | 84 | 130 | ||||||
Interest cost | 117 | 106 | ||||||
Actuarial (gain) loss | 24 | 575 | ||||||
Currency exchange rate changes | 281 | (80 | ) | |||||
Plan curtailments | (162 | ) | 17 | |||||
Plan settlements | (101 | ) | (202 | ) | ||||
Other | (41 | ) | (36 | ) | ||||
Ending projected benefit obligation1 | 3,842 | 3,640 | ||||||
Changes in fair value of plan assets: | ||||||||
Beginning fair value of plan assets | 1,696 | 1,638 | ||||||
Actual return on plan assets | 136 | 81 | ||||||
Employer contributions | 471 | 416 | ||||||
Currency exchange rate changes | 124 | (26 | ) | |||||
Plan settlements | (101 | ) | (202 | ) | ||||
Benefits paid to plan participants | (42 | ) | (84 | ) | ||||
Other | 3 | (127 | ) | |||||
Ending fair value of plan assets2 | 2,287 | 1,696 | ||||||
Amounts recognized in the consolidated balance sheet3 | $ | 1,555 | $ | 1,944 | ||||
Accumulated other comprehensive loss (income), before tax4 | $ | 1,257 | $ | 1,603 | ||||
Accumulated benefit obligation5 | $ | 3,423 | $ | 2,976 | ||||
Dec 30, 2017 | Dec 31, 2016 | |||||
Weighted average actuarial assumptions used to determine benefit obligations | ||||||
Discount rate | 3.0 | % | 3.2 | % | ||
Rate of compensation increase | 3.3 | % | 3.6 | % | ||
2017 | 2016 | 2015 | |||||||
Weighted average actuarial assumptions used to determine costs | |||||||||
Discount rate | 3.2 | % | 3.3 | % | 3.1 | % | |||
Expected long-term rate of return on plan assets | 4.6 | % | 5.5 | % | 5.9 | % | |||
Rate of compensation increase | 3.6 | % | 3.8 | % | 3.9 | % | |||
December 30, 2017 | Dec 31, 2016 | |||||||||||||||||||
Fair Value Measured at Reporting Date Using | ||||||||||||||||||||
(In Millions) | Level 1 | Level 2 | Level 3 | Total | Total | |||||||||||||||
Equity securities | $ | 451 | $ | — | $ | 22 | $ | 473 | $ | 328 | ||||||||||
Fixed income | 45 | 326 | 94 | 465 | 304 | |||||||||||||||
Other investments | 19 | — | — | 19 | — | |||||||||||||||
Assets measured by fair value hierarchy | $ | 515 | $ | 326 | $ | 116 | $ | 957 | $ | 632 | ||||||||||
Assets measured at net asset value | 1,208 | 1,044 | ||||||||||||||||||
Cash and cash equivalents | 122 | 20 | ||||||||||||||||||
Total pension plan assets at fair value | $ | 2,287 | $ | 1,696 | ||||||||||||||||
(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023-2027 | ||||||||||||||||||
Postretirement Medical Benefits | $ | 28 | $ | 29 | $ | 30 | $ | 31 | $ | 32 | $ | 179 | ||||||||||||
(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023-2027 | ||||||||||||||||||
Pension benefits | $ | 125 | $ | 117 | $ | 115 | $ | 121 | $ | 124 | $ | 673 | ||||||||||||
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RSUs and OSUs | Stock Purchase Plan | |||||||||||||||||||||||
Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||||||||||||
Estimated values | $ | 35.30 | $ | 29.76 | $ | 31.63 | $ | 7.20 | $ | 6.70 | $ | 6.56 | ||||||||||||
Risk-free interest rate | 1.4 | % | 0.9 | % | 0.6 | % | 1.0 | % | 0.5 | % | 0.1 | % | ||||||||||||
Dividend yield | 2.9 | % | 3.3 | % | 2.9 | % | 2.9 | % | 3.2 | % | 3.1 | % | ||||||||||||
Volatility | 23 | % | 23 | % | 27 | % | 19 | % | 22 | % | 25 | % | ||||||||||||
Expected life (in years) | n/a | n/a | n/a | 0.5 | 0.5 | 0.5 | ||||||||||||||||||
RSUs and OSUs | Stock Purchase Plan | |||||||||||||||||||||||
Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | Dec 30, 2017 | Dec 31, 2016 | Dec 26, 2015 | |||||||||||||||||||
Estimated values | $ | 35.30 | $ | 29.76 | $ | 31.63 | $ | 7.20 | $ | 6.70 | $ | 6.56 | ||||||||||||
Risk-free interest rate | 1.4 | % | 0.9 | % | 0.6 | % | 1.0 | % | 0.5 | % | 0.1 | % | ||||||||||||
Dividend yield | 2.9 | % | 3.3 | % | 2.9 | % | 2.9 | % | 3.2 | % | 3.1 | % | ||||||||||||
Volatility | 23 | % | 23 | % | 27 | % | 19 | % | 22 | % | 25 | % | ||||||||||||
Expected life (in years) | n/a | n/a | n/a | 0.5 | 0.5 | 0.5 | ||||||||||||||||||
Number of RSUs (In Millions) | Weighted Average Grant-Date Fair Value | ||||||
December 31, 2016 | 106.8 | $ | 28.99 | ||||
Granted | 45.2 | $ | 35.30 | ||||
Assumed in acquisition | 1.1 | $ | 34.90 | ||||
Vested | (40.5 | ) | $ | 27.52 | |||
Forfeited | (12.2 | ) | $ | 30.08 | |||
December 30, 2017 | 100.4 | $ | 32.36 | ||||
Expected to vest as of December 30, 2017 | 96.5 | $ | 32.36 | ||||
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(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 and thereafter | Total | |||||||||||||||||||||
Minimum rental commitments under all non-cancelable leases1 | $ | 215 | $ | 186 | $ | 162 | $ | 136 | $ | 105 | $ | 441 | $ | 1,245 | ||||||||||||||
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