Quarterly report pursuant to Section 13 or 15(d)

Operating Segments Information

v3.5.0.2
Operating Segments Information
9 Months Ended
Oct. 01, 2016
Segment Reporting [Abstract]  
Operating Segments Information [Text Block]
Note 23: Operating Segments Information
Our operating segments in effect as of October 1, 2016 include:
    Client Computing Group (CCG)
 
    Intel Security Group (ISecG)
    Data Center Group (DCG)
 
    Programmable Solutions Group (PSG)
    Internet of Things Group (IOTG)
 
    All other
    Non-Volatile Memory Solutions Group (NSG)
 
    New Technology Group (NTG)
During the first quarter of 2016, we formed PSG as a result of our acquisition of Altera. For further information, see "Note 8: Acquisitions and Divestitures." Additionally, we formed NTG, which includes products designed for wearables, cameras, drones, and other market segments, and determined that the Software and Services Group is no longer an operating segment. All prior-period amounts have been retrospectively adjusted to reflect the way we internally manage and monitor segment performance starting in fiscal year 2016 and include other minor reorganizations.
In the third quarter of 2016, we announced our planned divestiture of our Intel Security business and expect to close the transaction in the second quarter of 2017. For further information, see "Note 8: Acquisitions and Divestitures."
The Chief Operating Decision Maker (CODM) is our Chief Executive Officer. The CODM allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss).
We manage our business activities primarily based on a product segmentation basis. CCG and DCG are our reportable operating segments. IOTG, NSG, ISecG, and PSG as shown in the preceding operating segment list, do not meet the quantitative thresholds to qualify as reportable operating segments; however, we have elected to separately disclose the results of these non-reportable operating segments. Our NTG operating segment does not meet the quantitative thresholds to qualify as a reportable segment and its results are included within the “all other” category.
Revenue for our reportable and non-reportable operating segments is primarily related to the following product lines:
Client Computing Group. Includes platforms designed for notebooks (including Ultrabook™ devices), 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. Includes platforms designed for the enterprise, cloud, communications infrastructure, and technical computing segments.
Internet of Things Group. Includes platforms designed for Internet of Things market segments, including retail, transportation, industrial, and buildings and home use, along with a broad range of other market segments.
Non-Volatile Memory Solutions Group. Includes NAND flash memory products primarily used in solid-state drives.
Intel Security Group. Includes security software products designed to deliver innovative solutions that secure computers, mobile devices, and networks around the world from the latest malware and emerging online threats.
Programmable Solutions Group. Includes programmable semiconductors (primary field-programmable gate arrays) and related products for a broad range of market segments, including communications, networking and storage, industrial, military, and automotive.
We have sales and marketing, manufacturing, engineering, finance, and administration groups. Expenses for these groups are generally allocated to the operating segments, and the expenses are included in the following operating results.
The “all other” category includes revenue, expenses, and charges such as:
results of operations from NTG;
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 CODM;
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.
Net revenue and operating income (loss) for each period were as follows:
 
 
Three Months Ended
 
Nine Months Ended
(In Millions)
 
Oct 1,
2016
 
Sep 26,
2015
 
Oct 1,
2016
 
Sep 26,
2015
Net revenue:
 
 
 
 
 
 
 
 
Client Computing Group
 
 
 
 
 
 
 
 
Platform
 
$
8,258

 
$
8,094

 
$
22,395

 
$
22,280

Other
 
634

 
412

 
1,384

 
1,183

 
 
8,892

 
8,506

 
23,779

 
23,463

Data Center Group
 
 
 
 
 
 
 
 
Platform
 
4,164

 
3,857

 
11,589

 
10,842

Other
 
378

 
283

 
979

 
831

 
 
4,542

 
4,140

 
12,568

 
11,673

Internet of Things Group
 
 
 
 
 
 
 
 
Platform
 
605

 
501

 
1,673

 
1,450

Other
 
84

 
80

 
239

 
223

 
 
689

 
581

 
1,912

 
1,673

Non-Volatile Memory Solutions Group
 
649

 
655

 
1,760

 
1,943

Intel Security Group
 
537

 
506

 
1,611

 
1,473

Programmable Solutions Group
 
425

 

 
1,249

 

All other
 
44

 
77

 
134

 
216

Total net revenue
 
$
15,778

 
$
14,465

 
$
43,013

 
$
40,441

Operating income (loss):
 
 
 
 
 
 
 
 
Client Computing Group
 
$
3,327

 
$
2,433

 
$
7,123

 
$
5,447

Data Center Group
 
2,110

 
2,130

 
5,639

 
5,672

Internet of Things Group
 
191

 
150

 
403

 
382

Non-Volatile Memory Solutions Group
 
(134
)
 
51

 
(453
)
 
215

Intel Security Group
 
115

 
97

 
297

 
134

Programmable Solutions Group
 
78

 

 
(184
)
 

All other
 
(1,225
)
 
(669
)
 
(4,477
)
 
(2,147
)
Total operating income
 
$
4,462

 
$
4,192

 
$
8,348

 
$
9,703