Annual report pursuant to Section 13 and 15(d)

Operating Segments

v3.8.0.1
Operating Segments
12 Months Ended
Dec. 30, 2017
Segment Reporting [Abstract]  
Operating Segments
Note 4: Operating Segments
We manage our business through the following operating segments:
•    Client Computing Group (CCG)
•    Data Center Group (DCG)
•    Internet of Things Group (IOTG)
•    Non-Volatile Memory Solutions Group (NSG)
•    Programmable Solutions Group (PSG)
•    All other
In the third quarter of 2017, we completed our tender offer for the outstanding ordinary shares of Mobileye B.V. (Mobileye), formerly known as Mobileye N.V. In the second quarter of 2017, we completed the planned divestiture of the Intel Security Group (ISecG). The results for both are reported within the "all other" category. For further information, see "Note 10: Acquisitions and Divestitures."
The Chief Operating Decision Maker (CODM) is our Chief Executive Officer (CEO). The CODM allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss).
We offer platform products that incorporate various components and technologies, including a microprocessor and chipset, a stand-alone System-on-Chip (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, 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. 
We have sales and marketing, manufacturing, engineering, finance, and administration groups. Expenses for these groups are generally allocated to the operating segments.
The "all other" category includes revenue and expenses 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 CODM does not evaluate operating segments using discrete asset information and we do not identify or allocate assets by operating segments. Based on the interchangeable nature of our manufacturing and assembly and test assets, most of the related depreciation expense is not directly identifiable within our operating segments, as it is included in overhead cost pools and subsequently absorbed into inventory as each product passes through our manufacturing process. As our products are then sold across multiple operating segments, it is impracticable to determine the total depreciation expense included as a component of each operating segment’s operating income (loss) results. 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:
Years Ended
(In Millions)
 
Dec 30,
2017
 
Dec 31,
2016
 
Dec 26,
2015
Net revenue:
 
 
 
 
 
 
Client Computing Group
 
 
 
 
 
 
Platform

$
31,226


$
30,751


$
30,680

Adjacent

2,777


2,157


1,539

 
 
34,003

 
32,908

 
32,219

Data Center Group
 
 
 
 
 
 
Platform
 
17,439

 
15,895

 
14,856

Adjacent
 
1,625

 
1,341

 
1,125

 
 
19,064

 
17,236

 
15,981

Internet of Things Group
 
 
 
 
 
 
Platform
 
2,645

 
2,290

 
1,976

Adjacent
 
524

 
348

 
322

 
 
3,169

 
2,638

 
2,298

Non-Volatile Memory Solutions Group
 
3,520

 
2,576

 
2,597

Programmable Solutions Group
 
1,902

 
1,669

 

All other
 
1,103

 
2,360

 
2,260

Total net revenue
 
$
62,761

 
$
59,387

 
$
55,355

 
 
 
 
 
 
 
Operating income (loss):
 
 
 
 
 
 
Client Computing Group
 
$
12,919

 
$
10,646

 
$
8,166

Data Center Group
 
8,395

 
7,520

 
7,847

Internet of Things Group
 
650

 
585

 
515

Non-Volatile Memory Solutions Group
 
(260
)
 
(544
)
 
239

Programmable Solutions Group
 
458

 
(104
)
 

All other
 
(4,226
)
 
(5,229
)
 
(2,765
)
Total operating income
 
$
17,936

 
$
12,874

 
$
14,002

Disaggregated net revenue for each period was as follows:
Years Ended
(In Millions)
 
Dec 30,
2017
 
Dec 31,
2016
 
Dec 26,
2015
Platform revenue
 
 
 
 
 
 
Desktop platform
 
$
11,647

 
$
12,371

 
$
12,754

Notebook platform
 
19,414

 
18,203

 
17,945

DCG platform
 
17,439

 
15,895

 
14,856

Other platform1
 
2,810

 
2,467

 
1,957

 
 
51,310

 
48,936

 
47,512

 
 
 
 
 
 
 
Adjacent revenue2
 
10,917

 
8,290

 
5,858

ISecG divested business
 
534

 
2,161

 
1,985

Total revenue
 
$
62,761

 
$
59,387

 
$
55,355

1 
Includes our tablet, phone, service provider, and IOTG platform revenue.
2 
Includes all of our non-platform products for CCG, DCG, and IOTG like modem, ethernet, and silicon photonic, as well as NSG, PSG, and Mobileye products.
Net revenue by country as presented below is based on the billing location of the customer. Revenue from unaffiliated customers for each period was as follows:
Years Ended
(In Millions)
 
Dec 30,
2017
 
Dec 31,
2016
 
Dec 26,
2015
China (including Hong Kong)
 
$
14,796

 
$
13,977

 
$
11,679

Singapore
 
14,285

 
12,780

 
11,544

United States
 
12,543

 
12,957

 
11,121

Taiwan
 
10,518

 
9,953

 
10,661

Other countries
 
10,619

 
9,720

 
10,350

Total net revenue
 
$
62,761

 
$
59,387

 
$
55,355