Intel Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Investments

Investments

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]


Note 8 :			Investments

Short-term Investments

Short-term investments include marketable debt investments in corporate debt, government debt, and financial institution instruments, and are recorded within cash and cash equivalents and short-term investments on the Consolidated Condensed Balance Sheets. Government debt includes instruments such as non-US government bills and bonds and US agency securities. Financial institution instruments include instruments issued or managed by financial institutions in various forms, such as commercial paper, fixed- and floating-rate bonds, money market fund deposits, and time deposits. As of September 30, 2023, and December 31, 2022, substantially all time deposits were issued by institutions outside the US.

For certain of our marketable debt investments, we economically hedge market risks at inception with a related derivative instrument or the marketable debt investment itself is used to economically hedge currency exchange rate risk from remeasurement. These hedged investments are reported at fair value with gains or losses from the investments and the related derivative instruments recorded in interest and other, net. The fair value of our hedged investments was $16.1 billion as of September 30, 2023 ($16.2 billion as of December 31, 2022). For hedged investments still held at the reporting date, we recorded net losses of $329 million in the third quarter of 2023 and net losses of $336 million in the first nine months of 2023 ($861 million of net losses in the third quarter of 2022 and $1.8 billion of net losses in the first nine months of 2022). We recorded net gains on the related derivatives of $320 million in the third quarter of 2023 and net gains of $354 million in the first nine months of 2023 ($916 million of net gains in the third quarter of 2022 and net gains of $1.8 billion in the first nine months of 2022).

Our remaining unhedged marketable debt investments are reported at fair value, with unrealized gains or losses, net of tax, recorded in accumulated other comprehensive income (loss). The adjusted cost of our unhedged investments was $6.1 billion as of September 30, 2023 ($10.2 billion as of December 31, 2022), which approximated the fair value for these periods.

The fair value of marketable debt investments, by contractual maturity, as of September 30, 2023, was as follows:


(In Millions)	Fair Value
Due in 1 year or less	$	11,487
Due in 1–2 years	2,249
Due in 2–5 years	6,220
Due after 5 years	417
Instruments not due at a single maturity date1	1,814
Total	$	22,187

1 Instruments not due at a single maturity date is comprised of money market fund deposits, which are classified as either short-term investments or cash and cash equivalents.

Equity Investments


(In Millions)	Sep 30, 2023		Dec 31, 2022
Marketable equity securities1	$	1,117	$	1,341
Non-marketable equity securities	4,578		4,561
Equity method investments	5		10
Total	$	5,700	$	5,912

1 Over 90% of our marketable equity securities are subject to trading-volume or market-based restrictions, which limit the number of shares we may sell in a specified period of time, impacting our ability to liquidate these investments. The trading volume restrictions generally apply for as long as we own more than 1% of the outstanding shares. Market-based restrictions result from the rules of the respective exchange.

The components of gains (losses) on equity investments, net for each period were as follows:


	Three Months Ended				Nine Months Ended
(In Millions)	Sep 30, 2023		Oct 1, 2022		Sep 30, 2023		Oct 1, 2022
Ongoing mark-to-market adjustments on marketable equity securities	$	(267)	$	(244)	$	(164)	$	(883)
Observable price adjustments on non-marketable equity securities	7		67		17		273
Impairment charges	(53)		(45)		(127)		(112)
Sale of equity investments and other1	122		71		228		4,804
Total gains (losses) on equity investments, net	$	(191)	$	(151)	$	(46)	$	4,082

1 Sale of equity investments and other includes initial fair value adjustments recorded upon a security becoming marketable, realized gains (losses) on sales of non-marketable equity investments and equity method investments, and our share of equity method investee gains (losses) and distributions.

Net unrealized gains and losses for our marketable and non-marketable equity securities for each period were as follows:


	Three Months Ended				Nine Months Ended
(In Millions)	Sep 30, 2023		Oct 1, 2022		Sep 30, 2023		Oct 1, 2022
Net unrealized gains (losses) recognized during the period on equity securities	$	(205)	$	(154)	$	(64)	$	(490)
Less: Net (gains) losses recognized during the period on equity securities sold during the period	12		1		(15)		15
Net unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	(193)	$	(153)	$	(79)	$	(475)

McAfee Corp.

During the first quarter of 2022, the sale of the McAfee consumer business was completed and we received $4.6 billion in cash for the sale of our remaining share of McAfee, recognizing a $4.6 billion gain in sale of equity investments and other.