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

Quarterly report pursuant to Section 13 or 15(d)

Fair Value

Fair Value

3 Months Ended

Apr. 01, 2017

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

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
(In Millions)	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
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
(In Millions)	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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