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

Quarterly report pursuant to Section 13 or 15(d)

Derivative Financial Instruments

Derivative Financial Instruments

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]


Note 12 :			Derivative Financial Instruments

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)	Sep 30, 2023		Dec 31, 2022
Foreign currency contracts	$	31,291	$	31,603
Interest rate contracts	17,920		16,011
Other	2,103		2,094
Total	$	51,314	$	49,708

Fair Value of Derivative Instruments in the Consolidated Condensed Balance Sheets


	Sep 30, 2023				Dec 31, 2022
(In Millions)	Assets1		Liabilities2		Assets1		Liabilities2
Derivatives designated as hedging instruments:
Foreign currency contracts3	$	27	$	643	$	142	$	290
Interest rate contracts	—		966		—		777
Total derivatives designated as hedging instruments	$	27	$	1,609	$	142	$	1,067
Derivatives not designated as hedging instruments:
Foreign currency contracts3	$	601	$	102	$	866	$	194
Interest rate contracts	386		4		266		12
Equity contracts	131		17		—		111
Total derivatives not designated as hedging instruments	$	1,118	$	123	$	1,132	$	317
Total derivatives	$	1,145	$	1,732	$	1,274	$	1,384

1Derivative assets are recorded as other assets, current and long-term.

2Derivative liabilities are recorded as other liabilities, current and long-term.

3A majority of these instruments mature within 12 months.

Amounts Offset in the Consolidated Condensed Balance Sheets

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:


	Sep 30, 2023
							Gross Amounts Not Offset in the Balance Sheet
(In Millions)	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments		Cash and Non-Cash Collateral Received or Pledged		Net Amount
Assets:
Derivative assets subject to master netting arrangements	$	1,011	$	—	$	1,011	$	(538)	$	(473)	$	—
Reverse repurchase agreements	2,334		—		2,334		—		(2,334)		—
Total assets	$	3,345	$	—	$	3,345	$	(538)	$	(2,807)	$	—
Liabilities:
Derivative liabilities subject to master netting arrangements	$	1,724	$	—	$	1,724	$	(538)	$	(1,085)	$	101
Total liabilities	$	1,724	$	—	$	1,724	$	(538)	$	(1,085)	$	101


	Dec 31, 2022
							Gross Amounts Not Offset in the Balance Sheet
(In Millions)	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments		Cash and Non-Cash Collateral Received or Pledged		Net Amount
Assets:
Derivative assets subject to master netting arrangements	$	1,231	$	—	$	1,231	$	(546)	$	(682)	$	3
Reverse repurchase agreements	1,701		—		1,701		—		(1,701)		—
Total assets	$	2,932	$	—	$	2,932	$	(546)	$	(2,383)	$	3
Liabilities:
Derivative liabilities subject to master netting arrangements	$	1,337	$	—	$	1,337	$	(546)	$	(712)	$	79
Total liabilities	$	1,337	$	—	$	1,337	$	(546)	$	(712)	$	79

We obtain and secure available collateral from counterparties against obligations, including securities lending transactions and reverse repurchase agreements, when we deem it appropriate.

Derivatives in Cash Flow Hedging Relationships

The before-tax net gains or losses attributed to cash flow hedges recognized in other comprehensive income (loss) were $454 million net losses in the third quarter of 2023 and $646 million net losses in the first nine months of 2023 ($678 million net losses in the third quarter of 2022 and $1.6 billion net losses in the first nine months of 2022). Substantially all of our cash flow hedges were foreign currency contracts for all periods presented.

During the first nine months of 2023 and 2022, the amounts excluded from effectiveness testing were insignificant.

Derivatives in Fair Value Hedging Relationships

The effects of derivative instruments designated as fair value hedges, recognized in interest and other, net for each period were as follows:


	Gains (Losses) on Derivatives Recognized in Consolidated Condensed Statements of Income
	Three Months Ended				Nine Months Ended
(In Millions)	Sep 30, 2023		Oct 1, 2022		Sep 30, 2023		Oct 1, 2022
Interest rate contracts	$	(168)	$	(589)	$	(189)	$	(1,536)
Hedged items	168		589		189		1,536
Total	$	—	$	—	$	—	$	—

The amounts recorded on the Consolidated Condensed Balance Sheets related to cumulative basis adjustments for fair value hedges for each period were as follows:


Line Item in the Consolidated Condensed Balance Sheets in Which the Hedged Item is Included	Carrying Amount of the Hedged Item Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities)
(In Millions)	Sep 30, 2023		Dec 31, 2022		Sep 30, 2023		Dec 31, 2022
Long-term debt	$	(11,032)	$	(11,221)	$	965	$	776

The total notional amount of outstanding pay-variable, receive-fixed interest rate swaps was $12.0 billion as of September 30, 2023 and December 31, 2022.

Derivatives Not Designated as Hedging Instruments

The effects of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Income for each period were as follows:


		Three Months Ended				Nine Months Ended
(In Millions)	Location of Gains (Losses) Recognized in Income on Derivatives	Sep 30, 2023		Oct 1, 2022		Sep 30, 2023		Oct 1, 2022
Foreign currency contracts	Interest and other, net	$	255	$	771	$	467	$	1,952
Interest rate contracts	Interest and other, net	85		164		175		289
Other	Various	(112)		(97)		103		(562)
Total		$	228	$	838	$	745	$	1,679