Document

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	September 28, 2019



	☐	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

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)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value	INTC	Nasdaq Global Select Market

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 ☑ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☑ 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	Accelerated filer	Non-accelerated filer	Smaller reporting company	Emerging growth 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 ☑

As of September 28, 2019, the registrant had outstanding 4,350 million shares of common stock.

TABLE OF CONTENTS

THE ORGANIZATION OF OUR QUARTERLY REPORT ON FORM 10-Q

The order and presentation of content in our Quarterly Report on Form 10-Q (Form 10-Q) differs from the traditional U.S. Securities and Exchange Commission (SEC) Form 10-Q format. We believe that our format improves readability and better presents how we organize and manage our business. See "Form 10-Q Cross-Reference Index" within Other Key Information for a cross-reference index to the traditional SEC Form 10-Q format.

The preparation of our consolidated condensed financial statements is in conformity with U.S. generally accepted accounting principles (GAAP). We have included key metrics that we use to measure our business, some of which are non-GAAP measures. See these "Non-GAAP Financial Measures" within Other Key Information.



		Page
FORWARD-LOOKING STATEMENTS		1
A QUARTER IN REVIEW		2
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS AND SUPPLEMENTAL DETAILS
	Consolidated Condensed Statements of Income	3
	Consolidated Condensed Statements of Comprehensive Income	4
	Consolidated Condensed Balance Sheets	5
	Consolidated Condensed Statements of Cash Flows	6
	Consolidated Condensed Statements of Stockholders' Equity	7
	Notes to Consolidated Condensed Financial Statements	8

MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)
	Overview	22
	Revenue, Gross Margin, and Operating Expenses	23
	Business Unit Trends and Results	26
	Other Consolidated Results of Operations	32
	Liquidity and Capital Resources	33
	Quantitative and Qualitative Disclosures about Market Risk	34

OTHER KEY INFORMATION
	Risk Factors	35
	Controls and Procedures	35
	Non-GAAP Financial Measures	35
	Issuer Purchases of Equity Securities	37
	Exhibits	38
	Form 10-Q Cross-Reference Index	39

Table of Contents

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, projected growth of markets relevant to our businesses, future products and technology and the expected availability and benefits of such products and technology, expected timing and impact of acquisitions, divestitures, and other significant transactions, expected completion of restructuring activities, 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 29, 2018, 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 SEC that disclose risks and uncertainties that may affect our business. Unless specifically indicated otherwise, 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 the date of this filing. In addition, the forward-looking statements in this Form 10-Q are made as of the date of this filing, including expectations based on third-party information and projections that management believes to be reputable, 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.

INTEL UNIQUE TERMS

We use specific terms throughout this document to describe our business and results. Below are key terms and how we define them:



PLATFORM PRODUCTS		A microprocessor (processor or central processing unit (CPU)) and chipset, a stand-alone System-on-Chip (SoC), or a multichip package, based on Intel^® architecture. Platform products, or platforms, are primarily used in solutions sold through the Client Computing Group (CCG), Data Center Group (DCG), and Internet of Things Group (IOTG) segments.

ADJACENT PRODUCTS		All of our non-platform products for CCG, DCG, and IOTG, such as modem, Ethernet and silicon photonics, as well as Mobileye, Non-Volatile Memory Solutions Group (NSG), and Programmable Solutions Group (PSG) products. Combined with our platform products, adjacent products form comprehensive platform solutions to meet customer needs.

PC-CENTRIC BUSINESS		Our CCG business, including both platform and adjacent products.

DATA-CENTRIC BUSINESSES		Our DCG, Internet of Things (IOTG and Mobileye), NSG, PSG, and all other businesses.

Intel, the Intel logo, Intel Agilex, Intel Core, Intel Optane, Thunderbolt, Xeon, 3D NAND, and 3D XPoint are trademarks of Intel Corporation or its subsidiaries in the U.S. and/or other countries.

* Other names and brands may be claimed as the property of others.



		1

Table of Contents

A QUARTER IN REVIEW

Third quarter revenue was $19.2 billion as our data-centric businesses grew 6% year over year, offset by the PC-centric business decline of 5%. Data-centric revenue was up compared to a year ago, driven by a strong mix of high-performance Intel® Xeon® processors in our DCG business and growth across all businesses. Our PC-centric business was down on lower year over year platform volume, partially offset by a strong mix of higher performance products as the commercial segment of the PC market remained strong. Lower platform unit sales and margin compression on memory products resulted in lower gross margins and operating income, which was partially offset by platform ASP strength and lower investments in modem. In the first nine months we generated $23.3 billion of cash flow from operations and returned $14.3 billion to stockholders, including $4.2 billion in dividends and $10.1 billion in buybacks.



REVENUE	OPERATING INCOME	DILUTED EPS
■ PC-CENTRIC $B ■ DATA-CENTRIC $B	■ GAAP $B ■ NON-GAAP $B	■ GAAP ■ NON-GAAP




$19.2B	$6.4B	$6.9B	$1.35	$1.42
GAAP	GAAP	non-GAAP¹	GAAP	non-GAAP¹
flat in comparison to Q3 2018	down $902M or 12% from Q3 2018	down $714M or 9% from Q3 2018	down $0.03 or 2% from Q3 2018	up $0.02 or 1% from Q3 2018

Growth in data-centric businesses with record revenue from DCG, NSG, IOTG and Mobileye, offset by decline in PC-centric business	Lower gross margin from decrease in platform unit sales and lower NAND market pricing, partially offset by platform ASP strength		Impact from lower platform volume and lower NAND market pricing, partially offset by lower shares outstanding and ASP strength

BUSINESS SUMMARY


•	We launched the first wave of 10th generation Intel^® Core™ processors, with 11 new 10 nanometer (nm)-based Ice Lake processors that integrate artificial intelligence, graphics, Wi-Fi 6 and Thunderbolt™ 3 all on the SoC. We began shipping our 10nm Intel^®Agilex^®field programmable gate arrays (FPGAs) to early access program customers.


•	We experienced growth across all data-centric businesses. DCG grew across all segments, with the cloud and enterprise and government market segments returning to growth. NSG grew with NAND and Intel^®Optane™ bit growth, partially offset by lower NAND market pricing. Demand for edge compute drove double digit revenue growth for Mobileye and high single digit growth for IOTG.

•

PC-centric decline was driven by lower product shipments compared to Q3 2018, when internal inventory was drawn on to meet demand, partially offset by adjacencies growth and ASP strength. We continued to be supply constrained in Q3, particularly at the value-end of the market, as higher than expected PC demand strength continues to outpace our supply despite capacity additions we have made this year.


•	In July, we signed an agreement to divest the majority of our smartphone modem business, including certain employees, intellectual property, equipment and leases. The transaction enables us to increase the focus of our 5G efforts on the broader opportunity to modernize network and edge infrastructure, and is expected to close in the fourth quarter of 2019.

¹See "Non-GAAP Financial Measures" within Other Key Information.



A QUARTER IN REVIEW		2

Table of Contents

CONSOLIDATED CONDENSED STATEMENTS OF INCOME



	Three Months Ended						Nine Months Ended
(In Millions, Except Per Share Amounts; Unaudited)	Sep 28, 2019			Sep 29, 2018			Sep 28, 2019			Sep 29, 2018
Net revenue	$	19,190		$	19,163		$	51,756		$	52,191
Cost of sales	7,895			6,803			21,494			19,681
Gross margin	11,295			12,360			30,262			32,510
Research and development	3,208			3,428			9,978			10,110
Marketing, general and administrative	1,486			1,605			4,608			5,230
Restructuring and other charges	104			(72		)	288			(72		)
Amortization of acquisition-related intangibles	50			50			150			150
Operating expenses	4,848			5,011			15,024			15,418
Operating income	6,447			7,349			15,238			17,092
Gains (losses) on equity investments, net	318			(75		)	922			365
Interest and other, net	(46		)	(132		)	(170		)	225
Income before taxes	6,719			7,142			15,990			17,682
Provision for taxes	729			744			1,847			1,824
Net income	$	5,990		$	6,398		$	14,143		$	15,858
Earnings per share – basic	$	1.36		$	1.40		$	3.18		$	3.42
Earnings per share – diluted	$	1.35		$	1.38		$	3.14		$	3.35
Weighted average shares of common stock outstanding:
Basic	4,391			4,574			4,450			4,632
Diluted	4,433			4,648			4,507			4,728

See accompanying notes.



FINANCIAL STATEMENTS	Consolidated Condensed Statements of Income	3

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CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME



	Three Months Ended						Nine Months Ended
(In Millions; Unaudited)	Sep 28, 2019			Sep 29, 2018			Sep 28, 2019		Sep 29, 2018
Net income	$	5,990		$	6,398		$	14,143	$	15,858
Changes in other comprehensive income, net of tax:
Net unrealized holding gains (losses) on derivatives	(115		)	(25		)	138		(199		)
Actuarial valuation and other pension benefits (expenses), net	9			13			26		39
Translation adjustments and other	6			(2		)	88		(15		)
Other comprehensive income (loss)	(100		)	(14		)	252		(175		)
Total comprehensive income	$	5,890		$	6,384		$	14,395	$	15,683

See accompanying notes.



FINANCIAL STATEMENTS	Consolidated Condensed Statements of Comprehensive Income	4

Table of Contents

CONSOLIDATED CONDENSED BALANCE SHEETS



(In Millions)	Sep 28, 2019			Dec 29, 2018
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	3,935		$	3,019
Short-term investments	1,849			2,788
Trading assets	6,241			5,843
Accounts receivable	6,880			6,722
Inventories	8,638			7,253
Other current assets	2,414			3,162
Total current assets	29,957			28,787
Property, plant and equipment, net of accumulated depreciation of $71,183 ($65,342 as of December 29, 2018)	53,563			48,976
Equity investments	4,819			6,042
Other long-term investments	3,428			3,388
Goodwill	24,727			24,513
Identified intangible assets, net	11,019			11,836
Other long-term assets	6,255			4,421
Total assets	$	133,768		$	127,963

Liabilities, temporary equity, and stockholders’ equity
Current liabilities:
Short-term debt	$	5,200		$	1,261
Accounts payable	4,809			3,824
Accrued compensation and benefits	3,220			3,622
Other accrued liabilities	11,835			7,919
Total current liabilities	25,064			16,626
Debt	23,707			25,098
Contract liabilities	1,413			2,049
Income taxes payable, non-current	4,974			4,897
Deferred income taxes	1,696			1,665
Other long-term liabilities	2,506			2,646
Contingencies (Note 12)
Temporary equity	166			419
Stockholders’ equity:
Preferred stock	—			—
Common stock and capital in excess of par value, 4,350 issued and outstanding (4,516 issued and outstanding as of December 29, 2018)	25,290			25,365
Accumulated other comprehensive income (loss)	(722		)	(974		)
Retained earnings	49,674			50,172
Total stockholders’ equity	74,242			74,563
Total liabilities, temporary equity, and stockholders’ equity	$	133,768		$	127,963

See accompanying notes.



FINANCIAL STATEMENTS	Consolidated Condensed Balance Sheets	5

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS



	Nine Months Ended
(In Millions; Unaudited)	Sep 28, 2019			Sep 29, 2018

Cash and cash equivalents, beginning of period	$	3,019		$	3,433
Cash flows provided by (used for) operating activities:
Net income	14,143			15,858
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	6,647			5,420
Share-based compensation	1,290			1,203
Amortization of intangibles	1,211			1,172
(Gains) losses on equity investments, net	(395		)	(329		)
Changes in assets and liabilities:
Accounts receivable	(156		)	(449		)
Inventories	(1,376		)	(362		)
Accounts payable	728			430
Accrued compensation and benefits	(365		)	(801		)
Customer deposits and prepaid supply agreements	(674		)	1,472
Income taxes	435			(1,057		)
Other assets and liabilities	1,769			(25		)
Total adjustments	9,114			6,674
Net cash provided by operating activities	23,257			22,532
Cash flows provided by (used for) investing activities:
Additions to property, plant and equipment	(11,547		)	(11,291		)
Purchases of available-for-sale debt investments	(2,028		)	(3,090		)
Sales of available-for-sale debt investments	1,198			135
Maturities of available-for-sale debt investments	1,920			2,232
Purchases of trading assets	(5,769		)	(8,316		)
Maturities and sales of trading assets	5,467			9,705
Sales of equity investments	1,414			1,646
Other investing	(575		)	(440		)
Net cash used for investing activities	(9,920		)	(9,419		)
Cash flows provided by (used for) financing activities:
Increase (decrease) in short-term debt, net	835			1,707
Issuance of long-term debt, net of issuance costs	650			423
Repayment of debt and debt conversion	(1,478		)	(1,928		)
Proceeds from sales of common stock through employee equity incentive plans	797			545
Repurchase of common stock	(10,100		)	(8,464		)
Payment of dividends to stockholders	(4,214		)	(4,173		)
Other financing	1,089			(1,249		)
Net cash provided by (used for) financing activities	(12,421		)	(13,139		)
Net increase (decrease) in cash and cash equivalents	916			(26		)
Cash and cash equivalents, end of period	$	3,935		$	3,407

Supplemental disclosures of noncash investing activities and cash flow information:
Acquisition of property, plant, and equipment included in accounts payable and accrued liabilities	$	2,376		$	1,988
Cash paid during the period for:
Interest, net of capitalized interest	$	312		$	316
Income taxes, net of refunds	$	1,334		$	2,854

See accompanying notes.



FINANCIAL STATEMENTS	Consolidated Condensed Statements of Cash Flows	6

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CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY



	Common Stock and Capital in Excess of Par Value					Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total
(In Millions, Except Per Share Amounts)	Shares		Amount			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total
Three Months Ended

Balance as of June 29, 2019	4,430		$	25,140		$	(622	)	$	50,429		$	74,947
Net income	—		—			—			5,990			5,990
Other comprehensive income (loss)	—		—			(100		)	—			(100		)
Employee equity incentive plans and other	13		466			—			—			466
Share-based compensation	—		427			—			—			427
Temporary equity reduction	—		80			—			—			80
Convertible debt	—		(278		)	—			—			(278		)
Repurchase of common stock	(92	)	(523		)	—			(3,966		)	(4,489		)
Restricted stock unit withholdings	(1	)	(22		)	—			(6		)	(28		)
Cash dividends declared ($0.63 per share)	—		—			—			(2,773		)	(2,773		)
Balance as of September 28, 2019	4,350		$	25,290		$	(722	)	$	49,674		$	74,242

Balance as of June 30, 2018	4,607		$	25,470		$	(1,089	)	$	45,666		$	70,047
Net income	—		—			—			6,398			6,398
Other comprehensive income (loss)	—		—			(14		)	—			(14		)
Employee equity incentive plans and other	8		300			—			—			300
Share-based compensation	—		377			—			—			377
Temporary equity reduction	—		139			—			—			139
Convertible debt	—		(497		)	—			—			(497		)
Repurchase of common stock	(50	)	(275		)	—			(2,219		)	(2,494		)
Restricted stock unit withholdings	(1	)	(22		)	—			(6		)	(28		)
Cash dividends declared ($0.60 per share)	—		—			—			(2,745		)	(2,745		)
Balance as of September 29, 2018	4,564		$	25,492		$	(1,103	)	$	47,094		$	71,483

Nine Months Ended

Balance as of December 29, 2018	4,516		$	25,365		$	(974	)	$	50,172		$	74,563
Net income	—		—			—			14,143			14,143
Other comprehensive income (loss)	—		—			252			—			252
Employee equity incentive plans and other	52		869			—			—			869
Share-based compensation	—		1,287			—			—			1,287
Temporary equity reduction	—		253			—			—			253
Convertible debt	—		(990		)	—			—			(990		)
Repurchase of common stock	(209	)	(1,182		)	—			(8,902		)	(10,084		)
Restricted stock unit withholdings	(9	)	(312		)	—			(137		)	(449		)
Cash dividends declared ($1.26 per share)	—		—			—			(5,602		)	(5,602		)
Balance as of September 28, 2019	4,350		$	25,290		$	(722	)	$	49,674		$	74,242

Balance as of December 30, 2017	4,687		$	26,074		$	862		$	42,083		$	69,019
Adjustment for change in accounting principle	—		—			(1,790		)	2,424			634
Opening balance as of December 31, 2017	4,687		26,074			(928		)	44,507			69,653
Net income	—		—			—			15,858			15,858
Other comprehensive income (loss)	—		—			(175		)	—			(175		)
Employee equity incentive plans and other¹	54		358			—			—			358
Share-based compensation	—		1,202			—			—			1,202
Temporary equity reduction	—		351			—			—			351
Convertible debt	—		(1,267		)	—			—			(1,267		)
Repurchase of common stock	(167	)	(924		)	—			(7,538		)	(8,462		)
Restricted stock unit withholdings	(10	)	(302		)	—			(187		)	(489		)
Cash dividends declared ($1.20 per share)	—		—			—			(5,546		)	(5,546		)
Balance as of September 29, 2018	4,564		$	25,492		$	(1,103	)	$	47,094		$	71,483


¹	Includes approximately $375 million of non-controlling interest activity due to our acquisition of Mobileye in 2017, which was eliminated in 2018 due to the purchase of remaining shares.

See accompanying notes.



FINANCIAL STATEMENTS	Consolidated Condensed Statements of Stockholders' Equity	7

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



NOTE 1 :	BASIS OF PRESENTATION

We prepared our interim consolidated condensed financial statements that accompany these notes in conformity with GAAP, consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended December 29, 2018 (2018 Form 10-K), except for changes associated with leases as detailed in "Note 2: Recent Accounting Standards and Accounting Policies." We have reclassified certain prior period amounts to conform to current period presentation.

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, and 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 2018 Form 10-K.



NOTE 2 :	RECENT ACCOUNTING STANDARDS AND ACCOUNTING POLICIES

We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board on our financial statements and below describe impacts from newly adopted standards, as well as material updates to our previous assessments, if any, from our 2018 Form 10-K.

ACCOUNTING STANDARDS ADOPTED

Leases

Standard/Description: 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 Date and Adoption Considerations: Effective in the first quarter of 2019. The standard was adopted applying the modified retrospective approach at the beginning of the period of adoption. Our leased assets and corresponding liabilities exclude non-lease components.

Effect on Financial Statements or Other Significant Matters: Within the opening balances for the fiscal year beginning December 30, 2018, we recognized leased assets and corresponding liabilities in other long-term assets of $706 million, which includes $81 million of previously recognized prepaid land use rights, as well as corresponding accrued liabilities of $180 million and other long-term liabilities of $445 million.

Accounting Policy Updates and Disclosures: We determine if an arrangement is a lease at inception and classify it as finance or operating. Leased assets and corresponding liabilities are recognized based on the present value of the lease payments over the lease term. Our lease terms may include options to extend when it is reasonably certain that we will exercise that option. We have lease agreements with lease and non-lease components, and the non-lease components are accounted for separately and not included in our leased assets and corresponding liabilities. Leases primarily consist of real property, and, to a lesser extent, certain machinery and equipment.

We recognized leased assets in other long-term assets of $652 million and corresponding accrued liabilities of $174 million, and other long-term liabilities of $399 million as of September 28, 2019. Our leases have remaining lease terms of 1 to 9 years, some of which may include options to extend the leases for up to 39 years. The weighted average remaining lease term was 4.8 years, and the weighted average discount rate was 3.4% as of September 28, 2019.

For the nine months ended September 28, 2019, lease expense was $141 million. In accordance with the new leases standard, discounted and undiscounted lease payments under non-cancelable leases as of September 28, 2019, excluding non-lease components, are as follows:



(In Millions)	Remainder of 2019		2020		2021		2022		2023		2024 and Thereafter		Total
Lease payments	$	44	$	178	$	125	$	96	$	71	$	108	$	622
Present value of lease payments													$	573



FINANCIAL STATEMENTS	Notes to Financial Statements	8

Table of Contents

Lease expense was $231 million in 2018 ($264 million in 2017). Prior to our adoption of the new leases standard, future minimum lease payments as of December 29, 2018, which were undiscounted and included lease and non-lease components, were as follows:



(In Millions)	2019		2020		2021		2022		2023		2024 and Thereafter		Total
Minimum rental commitments under all non-cancelable leases	$	229	$	181	$	133	$	101	$	70	$	121	$	835



NOTE 3 :	OPERATING SEGMENTS

We manage our business through the following operating segments:


•	Client Computing Group (CCG)


•	Data Center Group (DCG)


•	Internet of Things Group (IOTG)


•	Mobileye


•	Non-Volatile Memory Solutions Group (NSG)


•	Programmable Solutions Group (PSG)


•	All Other

We offer platform products that incorporate various components and technologies, including a microprocessor and chipset, a stand-alone SoC, or a multichip package. A platform product may be enhanced by additional hardware, software, and services offered by Intel. Platform products are used in various form factors across our CCG, DCG, and IOTG operating segments. We derive a substantial majority of our revenue from platform products, which are our principal products and considered as one class of product.

CCG and DCG are our reportable operating segments. IOTG, Mobileye, NSG, and PSG do not meet the quantitative thresholds to qualify as reportable operating segments; however, we have elected to disclose the results of these non-reportable operating segments. Our Internet of Things portfolio, presented as Internet of Things, is comprised of IOTG and Mobileye operating segments.

The “all other” category includes revenue, expenses, and charges such as:


•	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.

The Chief Operating Decision Maker (CODM), which is our Chief Executive Officer (CEO), 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.



FINANCIAL STATEMENTS	Notes to Financial Statements	9

Table of Contents

Net revenue and operating income (loss) for each period were as follows:



	Three Months Ended				Nine Months Ended
(In Millions)	Sep 28, 2019		Sep 29, 2018		Sep 28, 2019		Sep 29, 2018
Net revenue:
Client Computing Group
Platform	$	8,379	$	9,023	$	24,128	$	24,703
Adjacent	1,330		1,211		3,008		2,479
	9,709		10,234		27,136		27,182
Data Center Group
Platform	5,819		5,637		14,854		15,561
Adjacent	564		502		1,414		1,361
	6,383		6,139		16,268		16,922
Internet of Things
IOTG	1,005		919		2,901		2,639
Mobileye	229		191		639		515
	1,234		1,110		3,540		3,154