10-Q 1 a10qdocument04012017.htm 10-Q Document


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
 
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the quarterly period ended April 1, 2017.
Or
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from                  to                 
Commission File Number 000-06217
intca01a03a01a04a23.jpg
INTEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
 
94-1672743
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
2200 Mission College Boulevard, Santa Clara, California
 
95054-1549
(Address of principal executive offices)
 
(Zip Code)
(408) 765-8080
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ
Accelerated filer  ¨
Non-accelerated filer   ¨
Smaller reporting company  ¨
Emerging growth company  ¨
 
 
(Do not check if a smaller reporting company)
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ
Shares outstanding of the Registrant’s common stock:
Class
 
Outstanding as of April 1, 2017
Common stock, $0.001 par value
 
4,709 million




INTEL CORPORATION
 
FORM 10-Q
FOR THE FISCAL QUARTER ENDED APRIL 1, 2017
INDEX

Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. Words such as "anticipates," "expects," "intends," "goals," "plans," "believes," "seeks," "estimates," "continues," "may," "will," “would,” "should," “could,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, uncertain events or assumptions, and other characterizations of future events or circumstances are forward-looking statements. Such statements are based on management's expectations as of the date of this filing and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include those described throughout this report and our Annual Report on Form 10-K for the year ended December 31, 2016, particularly the "Risk Factors" sections of such reports. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this Form 10-Q and in other documents we file from time to time with the Securities and Exchange Commission that disclose risks and uncertainties that may affect our business. The forward-looking statements in this Form 10-Q do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that had not been completed as of April 27, 2017. In addition, the forward-looking statements in this Form 10-Q are made as of the date of this filing, and Intel does not undertake, and expressly disclaims any duty, to update such statements, whether as a result of new information, new developments or otherwise, except to the extent that disclosure may be required by law.




PART I – FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
INTEL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
 
 
Three Months Ended
(In Millions, Except Per Share Amounts)
 
Apr 1,
2017
 
Apr 2,
2016
Net revenue
 
$
14,796

 
$
13,702

Cost of sales
 
5,649

 
5,572

Gross margin
 
9,147

 
8,130

Research and development
 
3,326

 
3,246

Marketing, general and administrative
 
2,104

 
2,226

Restructuring and other charges
 
80

 

Amortization of acquisition-related intangibles
 
38

 
90

Operating expenses
 
5,548

 
5,562

Operating income
 
3,599

 
2,568

Gains (losses) on equity investments, net
 
252

 
22

Interest and other, net
 
(36
)
 
(82
)
Income before taxes
 
3,815

 
2,508

Provision for taxes
 
851

 
462

Net income
 
$
2,964

 
$
2,046

Basic earnings per share of common stock
 
$
0.63

 
$
0.43

Diluted earnings per share of common stock
 
$
0.61

 
$
0.42

Cash dividends declared per share of common stock
 
$
0.5325

 
$
0.5200

Weighted average shares of common stock outstanding:
 
 
 
 
Basic
 
4,723

 
4,722

Diluted
 
4,881

 
4,875

See accompanying notes.

3



INTEL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
 
 
Three Months Ended
(In Millions)
 
Apr 1,
2017
 
Apr 2,
2016
Net income
 
$
2,964

 
$
2,046

Changes in other comprehensive income, net of tax:
 
 
 
 
Net unrealized holding gains (losses) on available-for-sale investments
 
543

 
291

Deferred tax asset valuation allowance
 

 
(1
)
Net unrealized holding gains (losses) on derivatives
 
195

 
187

Net prior service (costs) credits
 
2

 
2

Actuarial valuation
 
16

 
19

Net foreign currency translation adjustment
 
1

 
2

Other comprehensive income (loss)
 
757

 
500

Total comprehensive income
 
$
3,721

 
$
2,546

See accompanying notes.

4



INTEL CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(In Millions)
 
Apr 1,
2017
 
Dec 31,
2016
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
4,934

 
$
5,560

Short-term investments
 
3,058

 
3,225

Trading assets
 
9,303

 
8,314

Accounts receivable, net
 
4,921

 
4,690

Inventories
 
5,801

 
5,553

Assets held for sale
 
5,138

 
5,210

Other current assets
 
2,903

 
2,956

Total current assets
 
36,058

 
35,508

Property, plant and equipment, net of accumulated depreciation of $55,173 ($53,934 as of December 31, 2016)
 
36,911

 
36,171

Marketable equity securities
 
6,831

 
6,180

Other long-term investments
 
5,149

 
4,716

Goodwill
 
14,099

 
14,099

Identified intangible assets, net
 
9,157

 
9,494

Other long-term assets
 
7,443

 
7,159

Total assets
 
$
115,648

 
$
113,327

Liabilities, temporary equity, and stockholders’ equity
 
 
 
 
Current liabilities:
 
 
 
 
Short-term debt
 
$
5,073

 
$
4,634

Accounts payable
 
3,221

 
2,475

Accrued compensation and benefits
 
2,145

 
3,465

Accrued advertising
 
772

 
810

Deferred income
 
1,698

 
1,718

Liabilities held for sale
 
1,746

 
1,920

Other accrued liabilities
 
6,650

 
5,280

Total current liabilities

21,305

 
20,302

Long-term debt
 
20,678

 
20,649

Long-term deferred tax liabilities
 
2,285

 
1,730

Other long-term liabilities
 
3,658

 
3,538

Contingencies (Note 15)
 

 

Temporary equity
 
878

 
882

Stockholders’ equity:
 
 
 
 
Preferred stock
 

 

Common stock and capital in excess of par value, 4,709 issued and outstanding (4,730 issued and outstanding as of December 31, 2016)
 
25,890

 
25,373

Accumulated other comprehensive income (loss)
 
863

 
106

Retained earnings
 
40,091

 
40,747

Total stockholders’ equity
 
66,844

 
66,226

Total liabilities, temporary equity, and stockholders’ equity
 
$
115,648

 
$
113,327

See accompanying notes.

5



INTEL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
 
 
 
Three Months Ended
(In Millions)
 
Apr 1,
2017
 
Apr 2,
2016
Cash and cash equivalents, beginning of period
 
$
5,560

 
$
15,308

Cash flows provided by (used for) operating activities:
 
 
 
 
Net income
 
2,964

 
2,046

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation
 
1,625

 
1,619

Share-based compensation
 
397

 
448

Restructuring and other charges
 
80

 

Amortization of intangibles
 
321

 
396

(Gains) losses on equity investments, net
 
(250
)
 
(22
)
Deferred taxes
 
212

 
(43
)
Changes in assets and liabilities:1
 
 
 
 
Accounts receivable
 
(105
)
 
942

Inventories
 
(232
)
 
(57
)
Accounts payable
 
188

 
434

Accrued compensation and benefits
 
(1,277
)
 
(1,307
)
Income taxes payable and receivable
 
427

 
497

Other assets and liabilities
 
(452
)
 
(898
)
Total adjustments
 
934

 
2,009

Net cash provided by operating activities
 
3,898

 
4,055

Cash flows provided by (used for) investing activities:
 
 
 
 
Additions to property, plant and equipment
 
(1,952
)
 
(1,346
)
Acquisitions, net of cash acquired
 

 
(14,569
)
Purchases of available-for-sale investments
 
(1,746
)
 
(2,847
)
Sales of available-for-sale investments
 
431

 
2,810

Maturities of available-for-sale investments
 
1,508

 
1,359

Purchases of trading assets
 
(3,075
)
 
(4,533
)
Maturities and sales of trading assets
 
2,433

 
3,138

Investments in loans receivable and reverse repurchase agreements
 

 
(223
)
Collection of loans receivable and reverse repurchase agreements
 

 
650

Investments in non-marketable equity investments
 
(422
)
 
(182
)
Purchases of licensed technology and patents
 
(115
)
 

Other investing
 
160

 
223

Net cash used for investing activities
 
(2,778
)
 
(15,520
)
Cash flows provided by (used for) financing activities:
 
 
 
 
Increase (decrease) in short-term debt, net
 
435

 
956

Proceeds from sales of common stock through employee equity incentive plans
 
329

 
343

Repurchase of common stock
 
(1,242
)
 
(793
)
Restricted stock unit withholdings
 
(70
)
 
(63
)
Payment of dividends to stockholders
 
(1,229
)
 
(1,228
)
Other financing
 
31

 
3

Net cash provided by (used for) financing activities
 
(1,746
)
 
(782
)
Net increase (decrease) in cash and cash equivalents
 
(626
)
 
(12,247
)
Cash and cash equivalents, end of period
 
$
4,934

 
$
3,061

 
 
 
 
 
Supplemental disclosures of noncash investing activities and cash flow information:
 
 
 
 
Acquisition of property, plant, and equipment included in accounts payable and accrued liabilities
 
$
1,448

 
$
1,083

Cash paid during the period for:
 
 
 
 
Interest, net of capitalized interest and interest rate swap payments/receipts
 
$
97

 
$
254

Income taxes, net of refunds
 
$
171

 
$
(72
)
1 
The impact of assets and liabilities reclassified as held for sale was not considered in the changes in assets and liabilities within cash flows from operating activities. See "Note 8: Acquisitions and Divestitures" for additional information.
See accompanying notes.

6



INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited
Note 1: Basis of Presentation
We prepared our interim consolidated condensed financial statements that accompany these notes in conformity with U.S. generally accepted accounting principles, consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (2016 Form 10-K).
We have a 52- or 53-week fiscal year that ends on the last Saturday in December. Our fiscal year 2017 is a 52-week year ending on December 30, 2017, while our fiscal year 2016 was a 53-week fiscal year that ended on December 31, 2016. The first quarter of fiscal year 2016 was a 14-week quarter compared to the standard 13-week quarters.
We have made estimates and judgments affecting the amounts reported in our consolidated condensed financial statements and the accompanying notes. The actual results that we experience may differ materially from our estimates. The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This report should be read in conjunction with the consolidated financial statements in our 2016 Form 10-K.
Note 2: Recent Accounting Standards
We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board on our financial statements. The table below describes impacts from newly issued standards as well as material updates to our previous assessments, if any, from our 2016 Form 10-K.
Standard/Description
Effective Date and Adoption Considerations
Effect on Financial Statements or Other Significant Matters
Compensation - Retirement Benefits - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This amended standard was issued to provide additional guidance on the presentation of net benefit cost in the income statement and on the components eligible for capitalization in assets. The service cost component of the net periodic benefit cost will continue to be reported within operating income on the consolidated income statement. All other non-service components are required to be presented separately outside operating income and only service costs will be eligible for inventory capitalization.

Effective in the first quarter of 2018.
Changes to the presentation of benefit costs are required to be adopted retrospectively while changes to the capitalization of service costs into inventories are required to be adopted prospectively. The standard permits, as a practical expedient, to use the amounts disclosed in the Retirement Benefit Plans footnote for the prior comparative periods as the estimation basis for applying the retrospective presentation requirement.

We expect the adoption of the amended standard to result in the reclassification of approximately $260 million from non-service components above the subtotal of operating income to interest and other, net, for the year ended December 31, 2016. We are continuing to assess the impacts of adoption to our 2017 financial statements.




7

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


Note 3: Operating Segments Information
We manage our business through the following operating segments:
Client Computing Group (CCG)
 
Includes platforms designed for notebooks, 2 in 1 systems, desktops (including all-in-ones and high-end enthusiast PCs), tablets, phones, wireless and wired connectivity products, and mobile communication components.
 
Data Center Group (DCG)
 
Includes workload-optimized platforms and related products designed for enterprise, cloud, and communication infrastructure market segments.
 
Internet of Things Group (IOTG)
 
Includes platforms designed for Internet of Things market segments, including retail, transportation, industrial, video, buildings and smart cities, along with a broad range of other market segments.
 
Non-Volatile Memory Solutions Group (NSG)
 
Includes Intel® Optane™ SSD products and NAND flash memory products primarily used in solid-state drives.
 
Intel Security Group (ISecG)
 
Includes security software products designed to deliver innovative solutions that secure computers, mobile devices, and networks around the world.
 
Programmable Solutions Group (PSG)
 
Includes programmable semiconductors primarily field-programmable gate array (FPGAs) and related products for a broad range of market segments, including communications, data center, industrial, military, and automotive.
 
All other
 
Includes results from our other non-reportable segments and corporate-related charges.
We offer platforms that incorporate various components and technologies, including a microprocessor and chipset, a stand-alone System-on-Chip, or a multichip package. A platform may be enhanced by additional hardware, software, and services offered by Intel. Platforms are used in various form factors across our CCG, DCG, and IOTG operating segments. We derive a substantial majority of our revenue from platforms, which is our principal product.
In the third quarter of 2016, we announced our planned divestiture of ISecG, which closed on April 3, 2017, subsequent to the first quarter of 2017. We intend to recast our operating segment results to reflect the divestiture of ISecG to "all other" in the second quarter of 2017. For further information, see "Note 8: Acquisitions and Divestitures."
The “all other” category includes revenue, expenses, and charges such as:
results of operations from non-reportable segments;
amounts included within restructuring and other charges;
a portion of profit-dependent compensation and other expenses not allocated to the operating segments;
divested businesses for which discrete operating results are not regularly reviewed by our Chief Operating Decision Maker (CODM), who is our Chief Executive Officer;
results of operations of start-up businesses that support our initiatives, including our foundry business; and
acquisition-related costs, including amortization and any impairment of acquisition-related intangibles and goodwill.
The CODM does not evaluate operating segments using discrete asset information. Operating segments do not record inter-segment revenue. We do not allocate gains and losses from equity investments, interest and other income, or taxes to operating segments. Although the CODM uses operating income to evaluate the segments, operating costs included in one segment may benefit other segments. Except for these differences, the accounting policies for segment reporting are the same as for Intel as a whole.

8

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


We have allocated the remaining unallocated goodwill in "all other" from acquisitions completed in 2016 to our non-reportable operating segments.
Net revenue and operating income (loss) for each period were as follows:
 
 
Three Months Ended
(In Millions)
 
Apr 1,
2017
 
Apr 2,
2016
Net revenue:
 
 
 
 
Client Computing Group
 
 
 
 
Platform
 
$
7,397

 
$
7,199

Other
 
579

 
350

 
 
7,976

 
7,549

Data Center Group
 
 
 
 
Platform
 
3,879

 
3,707

Other
 
353

 
292

 
 
4,232

 
3,999

Internet of Things Group
 
 
 
 
Platform
 
632

 
571

Other
 
89

 
80

 
 
721

 
651

Non-Volatile Memory Solutions Group
 
866

 
557

Intel Security Group
 
534

 
537

Programmable Solutions Group
 
425

 
359

All other
 
42

 
50

Total net revenue
 
$
14,796

 
$
13,702

Operating income (loss):
 
 
 
 
Client Computing Group
 
$
3,031

 
$
1,885

Data Center Group
 
1,487

 
1,764

Internet of Things Group
 
105

 
123

Non-Volatile Memory Solutions Group
 
(129
)
 
(95
)
Intel Security Group
 
95

 
85

Programmable Solutions Group
 
92

 
(200
)
All other
 
(1,082
)
 
(994
)
Total operating income
 
$
3,599

 
$
2,568


9

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


Note 4: Earnings Per Share
We computed basic earnings per share of common stock based on the weighted average number of shares of common stock outstanding during the period. We computed diluted earnings per share of common stock based on the weighted average number of shares of common stock outstanding plus potentially dilutive shares of common stock outstanding during the period.
 
 
Three Months Ended
(In Millions, Except Per Share Amounts)
 
Apr 1,
2017
 
Apr 2,
2016
Net income available to common stockholders
 
$
2,964

 
$
2,046

Weighted average shares of common stock outstanding—basic
 
4,723

 
4,722

Dilutive effect of employee equity incentive plans
 
58

 
66

Dilutive effect of convertible debt
 
100

 
87

Weighted average shares of common stock outstanding—diluted
 
4,881

 
4,875

Basic earnings per share of common stock
 
$
0.63

 
$
0.43

Diluted earnings per share of common stock
 
$
0.61

 
$
0.42

Potentially dilutive shares of common stock from employee incentive plans are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, the assumed vesting of outstanding RSUs, and the assumed issuance of common stock under the stock purchase plan. Potentially dilutive shares of common stock for our 2005 debentures are determined by applying the if-converted method. However, as our 2009 debentures require settlement of the principal amount of the debt in cash upon conversion, with the conversion premium paid in cash or stock at our option, potentially dilutive shares of common stock are determined by applying the treasury stock method.
In all periods presented, potentially dilutive securities which would have been antidilutive are insignificant and are excluded from the computation of diluted earnings per share.
In all periods presented, we included our 2009 debentures in the calculation of diluted earnings per share of common stock because the average market price was above the conversion price. We could potentially exclude the 2009 debentures in the future if the average market price is below the conversion price.
Note 5: Other Financial Statement Details
Inventories
(In Millions)
 
Apr 1,
2017
 
Dec 31,
2016
Raw materials
 
$
786

 
$
695

Work in process
 
3,412

 
3,190

Finished goods
 
1,603

 
1,668

Total inventories
 
$
5,801

 
$
5,553

Deferred Income
(In Millions)
 
Apr 1,
2017
 
Dec 31,
2016
Deferred income on shipments of components to distributors
 
$
1,461

 
$
1,475

Deferred income from software, services and other
 
237

 
243

Current deferred income
 
$
1,698


$
1,718


10

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


Gains (Losses) on Equity Investments, Net
The components of gains (losses) on equity investments, net for each period were as follows:
 
 
Three Months Ended
(In Millions)
 
Apr 1,
2017
 
Apr 2,
2016
Share of equity method investee losses, net
 
$
(11
)
 
$
(8
)
Impairments
 
(48
)
 
(29
)
Gains on sales, net
 
274

 
96

Other, net
 
37

 
(37
)
Total gains (losses) on equity investments, net
 
$
252

 
$
22

Interest and Other, Net
The components of interest and other, net for each period were as follows:
 
 
Three Months Ended
(In Millions)
 
Apr 1,
2017
 
Apr 2,
2016
Interest income
 
$
76

 
$
52

Interest expense
 
(146
)
 
(208
)
Other, net
 
34

 
74

Total interest and other, net
 
$
(36
)
 
$
(82
)
Interest expense in the preceding table is net of $67 million of interest capitalized in the first three months of 2017 ($22 million in the first three months of 2016).
Note 6: Restructuring and Other Charges
 
 
Three Months Ended
(In Millions)
 
Apr 1,
2017
2016 Restructuring Program
 
$
(11
)
Other charges
 
91

Total restructuring and other charges
 
$
80

2016 Restructuring Program
In the second quarter of 2016, our management approved and commenced the 2016 Restructuring Program. We expect the program to be substantially complete by the second quarter of 2017.
For further information, see "Note 7: Restructuring and Other Charges" in Part II, Item 8 of our 2016 Form 10-K.
Restructuring and other charges by type for the 2016 Restructuring Program for the period were as follows:
 
 
Three Months Ended
(In Millions)
 
Apr 1,
2017
Employee severance and benefit arrangements
 
$
(21
)
Asset impairment and other charges
 
10

Total restructuring and other charges
 
$
(11
)

11

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


Restructuring and other activity for the 2016 Restructuring Program for the first three months of 2017 was as follows:
(In Millions)
 
Employee Severance and Benefits
 
Asset Impairments and Other
 
Total
Accrued restructuring balance as of December 31, 2016
 
$
585

 
$
10

 
$
595

Additional accruals
 

 
10

 
10

Adjustments
 
(21
)
 

 
(21
)
Cash payments
 
(108
)
 
(8
)
 
(116
)
Non-cash settlements
 

 
(1
)
 
(1
)
Accrued restructuring balance as of April 1, 2017
 
$
456

 
$
11

 
$
467

We recorded the additional accruals as restructuring and other charges in the consolidated condensed statement of income and within the "all other" operating segments category. Substantially all of the accrued restructuring balance as of April 1, 2017 is expected to be paid within the next 12 months and was recorded within accrued compensation and benefits on the consolidated condensed balance sheets. Restructuring actions related to this program that were approved in 2016 are expected to impact approximately 15,000 employees.
Other charges
Other charges primarily include costs associated with the Intel Security Group divestiture.
 
 
Three Months Ended
(In Millions)
 
Apr 1,
2017
ISecG separation costs
 
$
73

Other
 
18

Total other charges
 
$
91

Note 7: Investments
Available-for-Sale Investments
 
 
April 1, 2017
 
December 31, 2016
(In Millions)
 
Adjusted Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
 
Adjusted Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
Corporate debt
 
$
4,396

 
$
7

 
$
(10
)
 
$
4,393

 
$
3,847

 
$
4

 
$
(14
)
 
$
3,837

Financial institution instruments
 
4,708

 
8

 
(10
)
 
4,706

 
6,098

 
5

 
(11
)
 
6,092

Government debt
 
1,417

 
1

 
(7
)
 
1,411

 
1,581

 

 
(8
)
 
1,573

Marketable equity securities
 
2,649

 
4,182

 

 
6,831

 
2,818

 
3,363

 
(1
)
 
6,180

Total available-for-sale investments
 
$
13,170

 
$
4,198

 
$
(27
)
 
$
17,341

 
$
14,344

 
$
3,372

 
$
(34
)
 
$
17,682

Government debt includes instruments such as non-U.S. government bonds and U.S. agency securities. Financial institution instruments include instruments issued or managed by financial institutions in various forms such as commercial paper, fixed and floating rate bonds, money market fund deposits, and time deposits. A substantial majority of time deposits were issued by institutions outside the U.S. as of April 1, 2017 (most time deposits were issued by institutions outside the U.S. as of December 31, 2016).
During the first three months of 2017, we sold available-for-sale investments for proceeds of $499 million ($2.9 billion in the first three months of 2016). The gross realized gains on sales of available-for-sale investments were $266 million in the first three months of 2017 ($86 million in the first three months of 2016).

12

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


The fair value of available-for-sale debt investments, by contractual maturity, as of April 1, 2017, were as follows:
(In Millions)
 
Fair Value
Due in 1 year or less
 
$
4,287

Due in 1–2 years
 
1,647

Due in 2–5 years
 
3,357

Due after 5 years
 
145

Instruments not due at a single maturity date
 
1,074

Total
 
$
10,510

Equity Method Investments
IM Flash Technologies, LLC
Since the inception of IM Flash Technologies, LLC (IMFT) in 2006, Micron Technology, Inc. (Micron) and Intel have jointly developed NAND flash memory and, most recently, 3D XPoint™ technology products. Intel also purchases jointly developed products directly from Micron under certain supply agreements.
As of April 1, 2017, we own a 49% interest in IMFT. The carrying value of our investment was $849 million as of April 1, 2017 ($849 million as of December 31, 2016) and is classified within other long-term assets.
IMFT is a variable interest entity and all costs of IMFT are passed on to Micron and Intel through sale of products or services in proportional share of ownership. Our portion of IMFT costs, primarily related to product purchases and production-related services, was approximately $130 million in the first three months of 2017 (approximately $100 million in the first three months of 2016). The amount due to IMFT for product purchases and services provided was approximately $117 million as of April 1, 2017 (approximately $95 million as of December 31, 2016).
IMFT depends on Micron and Intel for any additional cash needs. Our known maximum exposure to loss approximated the carrying value of our investment balance in IMFT. Except for the amount due to IMFT for product purchases and production-related services, we did not have any additional liabilities recognized on our consolidated condensed balance sheets in connection with our interests in this joint venture as of April 1, 2017. Our potential future losses could be higher than the carrying amount of our investment, as Intel and Micron are liable for other future operating costs or obligations of IMFT. Future cash calls could also increase our investment balance and the related exposure to loss. In addition, because we are currently committed to purchasing 49% of IMFT’s production output and production-related services, we may be required to purchase products at a cost in excess of realizable value.
Cloudera, Inc.
Our investment in Cloudera, Inc. (Cloudera) is accounted for under the equity and cost methods of accounting based on the rights associated with different instruments we own, and is classified within other long-term assets. Our fully diluted ownership interest in Cloudera is 16% as of April 1, 2017. The carrying value of our equity method investment was $215 million and of our cost method investment was $454 million as of April 1, 2017 ($225 million for our equity method investment and $454 million for our cost method investment as of December 31, 2016).
Non-marketable Cost Method Investments
Beijing UniSpreadtrum Technology Ltd.
During 2014, we entered into a series of agreements with Tsinghua Unigroup Ltd. (Tsinghua Unigroup), an operating subsidiary of Tsinghua Holdings Co. Ltd., to, among other things, jointly develop Intel® architecture- and communications-based solutions for phones. We agreed to invest up to 9.0 billion Chinese yuan (approximately $1.5 billion as of the date of the agreement) for a minority stake of approximately 20% of Beijing UniSpreadtrum Technology Ltd., a holding company under Tsinghua Unigroup. During 2015, we invested $966 million to complete the first phase of the equity investment and accounted for our interest using the cost method of accounting.
Trading Assets
Net gains related to trading assets still held at the reporting date were $217 million in the first three months of 2017 (net gains of $243 million in the first three months of 2016). Net losses on the related derivatives were $186 million in the first three months of 2017 (net losses of $234 million in the first three months of 2016).

13

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


Note 8: Acquisitions and Divestitures
Pending Acquisition of Mobileye
During the first quarter of 2017, we entered into a definitive agreement to acquire Mobileye N.V. (Mobileye). Pursuant to the terms of the agreement, a wholly-owned subsidiary of Intel commenced a tender offer on April 5, 2017 to acquire all of the issued and outstanding ordinary shares of Mobileye for $63.54 per share in cash, representing a fully-diluted equity value of approximately $15.3 billion. The transaction is expected to close within nine months of the date of the definitive agreement and is subject to certain regulatory approvals and customary closing conditions. Mobileye is a global leader in the development of computer vision and machine learning, data analysis, localization and mapping for advanced driver assistance systems and autonomous driving. This acquisition will combine Mobileye’s leading computer vision expertise with Intel’s high-performance computing and connectivity expertise to create automated driving solutions from cloud to car.
Divestiture of Intel Security Group
On September 7, 2016, we announced a definitive agreement with TPG VII Manta Holdings, L.P., now known as Manta Holdings, L.P. (TPG) to transfer certain assets and liabilities relating to ISecG to a newly formed, jointly-owned, separate cybersecurity company, called McAfee. The transaction closed on April 3, 2017, subsequent to the first quarter of 2017.
The transaction is valued at $4.2 billion, for consideration of $3.1 billion and a 49% ownership interest in McAfee. Intel financed $2.2 billion of the consideration and the debt can be refinanced and repaid by McAfee and TPG. TPG owns a 51% ownership interest in McAfee. We will reflect the divestiture in our consolidated condensed financial statements in the second quarter of 2017.
The carrying amounts of the major classes of ISecG assets and liabilities held for sale included the following:
(In Millions)
 
Apr 1,
2017
Accounts receivable
 
$
280

Goodwill
 
3,600

Identified intangible assets
 
966

Other assets
 
269

Total assets held for sale
 
$
5,115

 
 
 
Deferred income
 
$
1,552

Other liabilities
 
194

Total liabilities held for sale
 
$
1,746

In addition to total assets and liabilities held for sale are currency translation adjustments totaling $507 million. This amount, classified as other comprehensive income, is associated with currency charges on the carrying values of ISecG goodwill and identified intangible assets. We expect to recognize a pre-tax gain of approximately $375 million as well as a provision for taxes charge of approximately $850 million in the second quarter of 2017.
We ceased recording depreciation and amortization on property, plant, and equipment and identified intangible assets, respectively, as of the date the assets triggered held for sale accounting.

14

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


Note 9: Identified Intangible Assets
 
 
April 1, 2017
(In Millions)
 
Gross Assets
 
Accumulated
Amortization
 
Net
Acquisition-related developed technology
 
$
7,340

 
$
(1,992
)
 
$
5,348

Acquisition-related customer relationships
 
1,340

 
(190
)
 
1,150

Acquisition-related brands
 
79

 
(16
)
 
63

Licensed technology and patents
 
3,178

 
(1,390
)
 
1,788

Identified intangible assets subject to amortization
 
11,937

 
(3,588
)
 
8,349

In-process research and development
 
808

 

 
808

Identified intangible assets not subject to amortization
 
808

 

 
808

Total identified intangible assets
 
$
12,745

 
$
(3,588
)
 
$
9,157

 
 
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

Amortization expenses recorded in the consolidated condensed statements of income for each period were as follows:
 
 
 
 
Three Months Ended
(In Millions)
 
Location
 
Apr 1,
2017
 
Apr 2,
2016
Acquisition-related developed technology
 
Cost of sales
 
$
209

 
$
235

Acquisition-related customer relationships
 
Amortization of acquisition-related intangibles
 
35

 
83

Acquisition-related brands
 
Amortization of acquisition-related intangibles
 
3

 
7

Licensed technology and patents
 
Cost of sales
 
74

 
71

Total amortization expenses
 
 
 
$
321

 
$
396

We expect future amortization expense for the next five years to be as follows:
(In Millions)
 
Remainder of 2017
 
2018
 
2019
 
2020
 
2021
Acquisition-related developed technology
 
$
592

 
$
784

 
$
782

 
$
750

 
$
715

Acquisition-related customer relationships
 
101

 
122

 
121

 
119

 
119

Acquisition-related brands
 
10

 
13

 
13

 
13

 
14

Licensed technology and patents
 
205

 
230

 
218

 
193

 
177

Total future amortization expenses
 
$
908

 
$
1,149

 
$
1,134

 
$
1,075

 
$
1,025


15

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


Note 10: Other Long-Term Assets
(In Millions)
 
Apr 1,
2017
 
Dec 31,
2016
Equity method investments
 
$
1,315

 
$
1,328

Non-marketable cost method investments
 
3,418

 
3,098

Non-current deferred tax assets
 
915

 
907

Pre-payments for property, plant and equipment
 
419

 
347

Loans receivable
 
360

 
236

Reverse repurchase agreements
 

 
250

Other
 
1,016

 
993

Total other long-term assets
 
$
7,443

 
$
7,159



16

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


Note 11: Fair Value
For information about our fair value policies, and methods and assumptions used in estimating the fair value of our financial assets and liabilities, see “Accounting Policies" note and "Fair Value" note in Part II, Item 8 of our 2016 Form 10-K.
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
 
 
April 1, 2017
 
December 31, 2016
 
 
Fair Value Measured and Recorded at Reporting Date Using
 
 
 
Fair Value Measured and Recorded at Reporting Date Using
 
 
(In Millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
 
$

 
$
650

 
$

 
$
650

 
$

 
$
498

 
$

 
$
498

Financial institution instruments
 
1,075

 
528

 

 
1,603

 
1,920

 
811

 

 
2,731

Government debt
 

 
50

 

 
50

 

 
332

 

 
332

Reverse repurchase agreements
 

 
1,398

 

 
1,398

 

 
768

 

 
768

Short-term investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
 
320

 
1,103

 
6

 
1,429

 
391

 
941

 
6

 
1,338

Financial institution instruments
 
253

 
1,140

 

 
1,393

 
119

 
1,484

 

 
1,603

Government debt
 
100

 
136

 

 
236

 
71

 
213

 

 
284

Trading assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset-backed securities
 

 
57

 
6

 
63

 

 
80

 
7

 
87

Corporate debt
 
2,307

 
598

 

 
2,905

 
2,237

 
610

 

 
2,847

Financial institution instruments
 
873

 
561

 

 
1,434

 
973

 
671

 

 
1,644

Government debt
 
2,313

 
2,588

 

 
4,901

 
2,063

 
1,673

 

 
3,736

Other current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets
 

 
285

 

 
285

 

 
382

 

 
382

Loans receivable
 

 
215

 

 
215

 

 
326

 

 
326

Marketable equity securities
 
6,831

 

 

 
6,831

 
6,180

 

 

 
6,180

Other long-term investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
 
1,644

 
664

 
6

 
2,314

 
1,126

 
869

 
6

 
2,001

Financial institution instruments
 
1,021

 
689

 

 
1,710

 
663

 
1,095

 

 
1,758

Government debt
 
888

 
237

 

 
1,125

 
681

 
276

 

 
957

Other long-term assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets
 

 
74

 
9

 
83

 

 
31

 
9

 
40

Loans receivable
 

 
360

 

 
360

 

 
236

 

 
236

Total assets measured and recorded at fair value
 
17,625

 
11,333

 
27

 
28,985

 
16,424

 
11,296

 
28

 
27,748

Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other accrued liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities
 

 
304

 

 
304

 

 
371

 

 
371

Other long-term liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities
 

 
193

 
30

 
223

 

 
179

 
33

 
212

Total liabilities measured and recorded at fair value
 
$

 
$
497

 
$
30

 
$
527

 
$

 
$
550

 
$
33

 
$
583


17

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


During the first three months of 2017, we transferred approximately $736 million of assets from Level 1 to Level 2 of the fair value hierarchy and approximately $762 million of assets from Level 2 to Level 1 ($622 million of assets from Level 1 to Level 2 and $233 million from Level 2 to Level 1 during the first three months of 2016). These transfers were based on changes in market activity for the underlying instruments.
Fair Value Option for Loans Receivable
As of April 1, 2017 and December 31, 2016, the fair value of our loans receivable for which we elected the fair value option did not significantly differ from the contractual principal balance based on the contractual currency.
Assets Measured and Recorded at Fair Value on a Non-Recurring Basis
Our non-marketable equity investments, marketable equity method investments, and non-financial assets, such as intangible assets and property, plant and equipment, are recorded at fair value only if an impairment is recognized.
We classified non-marketable equity investments as Level 3. Impairments recognized on non-marketable equity investments held as of April 1, 2017 were $48 million during the first three months of 2017 (impairments recognized during the first three months of 2016 on non-marketable equity investments held as of April 2, 2016 were insignificant.)
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
The carrying amounts and fair values of financial instruments not recorded at fair value on a recurring basis at the end of each period were as follows:
 
 
April 1, 2017
(In Millions)
 
Carrying
Amount
 
Fair Value Measured Using
 
Fair Value
Level 1
 
Level 2
 
Level 3
 
Grants receivable
 
$
359

 
$

 
$
360

 
$

 
$
360

Loans receivable
 
$
265

 
$

 
$
265

 
$

 
$
265

Non-marketable cost method investments
 
$
3,418

 
$

 
$

 
$
4,287

 
$
4,287

Reverse repurchase agreements
 
$
250

 
$

 
$
250

 
$

 
$
250

Short-term debt
 
$
5,043

 
$
3,003

 
$
2,567

 
$

 
$
5,570

Long-term debt
 
$
20,678

 
$
8,618

 
$
13,425

 
$

 
$
22,043

 
 
December 31, 2016
(In Millions)
 
Carrying
Amount
 
Fair Value Measured Using
 
Fair Value
Level 1
 
Level 2
 
Level 3
 
Grants receivable
 
$
361

 
$

 
$
362

 
$

 
$
362

Loans receivable
 
$
265

 
$

 
$
265

 
$

 
$
265

Non-marketable cost method investments
 
$
3,098

 
$

 
$

 
$
3,890

 
$
3,890

Reverse repurchase agreements
 
$
250

 
$

 
$
250

 
$

 
$
250

Short-term debt
 
$
4,609

 
$
3,006

 
$
2,114

 
$

 
$
5,120

Long-term debt
 
$
20,649

 
$
12,171

 
$
9,786

 
$

 
$
21,957

The carrying amount and fair value of short-term debt exclude drafts payable.

18

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


Note 12: Other Comprehensive Income (Loss)
The changes in accumulated other comprehensive income (loss) by component and related tax effects in the first three months of 2017 were as follows:
(In Millions)
 
Unrealized Holding Gains (Losses) on Available-for-Sale Investments
 
Unrealized Holding Gains (Losses) on Derivatives
 
Prior Service Credits (Costs)
 
Actuarial Gains (Losses)
 
Foreign Currency Translation Adjustment
 
Total
December 31, 2016
 
$
2,164

 
$
(259
)
 
$
(40
)
 
$
(1,240
)
 
$
(519
)
 
$
106

Other comprehensive income (loss) before reclassifications
 
1,098

 
266

 

 
(6
)
 
1

 
1,359

Amounts reclassified out of accumulated other comprehensive income (loss)
 
(263
)
 
(1
)
 
2

 
22

 

 
(240
)
Tax effects
 
(292
)
 
(70
)
 

 

 

 
(362
)
Other comprehensive income (loss)
 
543

 
195

 
2

 
16

 
1

 
757

April 1, 2017
 
$
2,707

 
$
(64
)
 
$
(38
)
 
$
(1,224
)
 
$
(518
)
 
$
863

The amounts reclassified out of accumulated other comprehensive income (loss) into the consolidated condensed statements of income for each period were as follows:
 
 
 
 
 
 
 
Three Months Ended
 
 
Comprehensive Income Components
 
Apr 1,
2017
 
Apr 2,
2016
 
Location
Unrealized holding gains (losses)1 on available-for-sale investments:
 
 
 
 
 
 
 
 
$
263

 
$
86

 
Gains (losses) on equity investments, net
 
 

 
(1
)
 
Interest and other, net
 
 
263

 
85

 
 
Unrealized holding gains (losses) on derivatives:
 
 
 
 
 
 
Foreign currency contracts
 
(20
)
 
(42
)
 
Cost of sales
 
 
(16
)
 
(10
)
 
Research and development
 
 
(5
)
 
(4
)
 
Marketing, general and administrative
 
 
4

 

 
Gains (losses) on equity investments, net
 
 
38

 
34

 
Interest and other, net
 
 
1

 
(22
)
 
 
Amortization of pension and postretirement benefit components:
 
 
 
 
 
 
Prior service credits (costs)
 
(2
)
 
(2
)
 
 
Actuarial gains (losses)
 
(22
)
 
(12
)
 
 
 
 
(24
)
 
(14
)
 
 
Total amounts reclassified out of accumulated other comprehensive income (loss)
 
$
240

 
$
49

 
 
1 
We determine the cost of the investment sold based on an average cost basis at the individual security level.
The amortization of pension and postretirement benefit components are included in the computation of net periodic benefit cost. For further information, see the "Retirement Benefit Plans" note in Part II, Item 8 of our 2016 Form 10-K.

19

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


We estimate that we will reclassify approximately $60 million (before taxes) of net derivative losses included in accumulated other comprehensive income (loss) into earnings within the next 12 months.
Note 13: Derivative Financial Instruments
For information about our derivative policies, see “Accounting Policies" note in Part II, Item 8 of our 2016 Form 10-K.
Volume of Derivative Activity
Total gross notional amounts for outstanding derivatives (recorded at fair value) at the end of each period were as follows: 
(In Millions)
 
Apr 1,
2017
 
Dec 31,
2016
 
Apr 2,
2016
Foreign currency contracts
 
$
18,575

 
$
17,960

 
$
17,520

Interest rate contracts
 
14,815

 
14,228

 
11,540

Other
 
1,357

 
1,340

 
1,210

Total
 
$
34,747

 
$
33,528

 
$
30,270

Fair Value of Derivative Instruments in the Consolidated Condensed Balance Sheets
 
 
April 1, 2017
 
December 31, 2016
(In Millions)
 
Assets 1
 
Liabilities 2
 
Assets 1
 
Liabilities 2
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
Foreign currency contracts 3
 
$
173

 
$
94

 
$
21

 
$
252

Interest rate contracts
 
2

 
200

 
3

 
187

Total derivatives designated as hedging instruments
 
175

 
294

 
24

 
439

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Foreign currency contracts 4
 
167

 
200

 
374

 
114

Interest rate contracts
 
16

 
33

 
15

 
30

Other
 
10

 

 
9

 

Total derivatives not designated as hedging instruments
 
193

 
233

 
398

 
144

Total derivatives
 
$
368

 
$
527

 
$
422

 
$
583

1 
Derivative assets are recorded as other assets, current and non-current in the consolidated condensed balance sheets.
2 
Derivative liabilities are recorded as other liabilities, current and non-current in the consolidated condensed balance sheets.
3 
The substantial majority of these instruments mature within 12 months.
4 
The majority of these instruments mature within 12 months.


20

INTEL CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS — Unaudited (Continued)


Amounts Offset in the Consolidated Condensed Balance Sheets
The gross amounts of our derivative instruments and reverse repurchase agreements subject to master netting arrangements with various counterparties, and cash and non-cash collateral posted under such agreements at the end of each period were as follows:
 
 
April 1, 2017
 
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Balance Sheet
 
 
(In Millions)
 
Gross Amounts Recognized
 
Gross Amounts Offset in the Balance Sheet
 
Net Amounts Presented in the Balance Sheet
 
Financial Instruments
 
Cash and Non-Cash Collateral Received or Pledged
 
Net Amount
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets subject to master netting arrangements
 
$
357

 
$

 
$
357

 
$
(243
)
 
$
(82
)
 
$
32

Reverse repurchase agreements
 
1,648

 

 
1,648

 

 
(1,648
)
 

Total assets
 
2,005

 

 
2,005

 
(243
)
 
(1,730
)
 
32

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities subject to master netting arrangements
 
499

 

 
499

 
(243
)
 
(240
)
 
16

Total liabilities
 
$
499

 
$

 
$
499

 
$
(243
)
 
$
(240
)
 
$
16

 
 
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