Quarterly report pursuant to Section 13 or 15(d)

Investments

v3.19.3
Investments
 9 Months Ended
Sep. 28, 2019
Investments and Cash [Abstract]  
Investments [Text Block]
NOTE 8 :
INVESTMENTS

DEBT INVESTMENTS
Trading Assets
Net losses related to trading assets still held at the reporting date were $75 million in the third quarter of 2019 and net gains were $21 million in the first nine months of 2019 ($4 million of net losses in the third quarter of 2018 and $169 million of net losses in the first nine months of 2018). Net gains on the related derivatives were $81 million in the third quarter of 2019 and net losses were $7 million in the first nine months of 2019 (net losses of $11 million in the third quarter of 2018 and net gains of $159 million in the first nine months of 2018).
Available-for-Sale Debt Investments
 
 
September 28, 2019
 
December 29, 2018
(In Millions)
 
Adjusted Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
 
Adjusted Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
Corporate debt
 
$
3,012

 
$
46

 
$
(1
)
 
$
3,057

 
$
3,068

 
$
2

 
$
(28
)
 
$
3,042

Financial institution
instruments
 
$
3,347

 
$
16

 
$
(1
)
 
$
3,362

 
$
3,076

 
$
3

 
$
(11
)
 
$
3,068

Government debt
 
$
743

 
$
5

 
$
—

 
$
748

 
$
1,069

 
$
1

 
$
(9
)
 
$
1,061

Total available-for-sale debt investments
 
$
7,102

 
$
67

 
$
(2
)
 
$
7,167

 
$
7,213

 
$
6

 
$
(48
)
 
$
7,171


Government debt includes instruments such as non-U.S. government bonds and U.S. agency securities. Financial institution instruments include instruments issued or managed by financial institutions in various forms such as commercial paper, fixed and floating rate bonds, money market fund deposits, and time deposits. Substantially all time deposits were issued by institutions outside the U.S. as of September 28, 2019 and December 29, 2018.
The fair value of available-for-sale debt investments, by contractual maturity, as of September 28, 2019, was as follows:
(In Millions)
 
Fair Value
Due in 1 year or less
 
$
2,638

Due in 1–2 years
 
794

Due in 2–5 years
 
2,509

Due after 5 years
 
125

Instruments not due at a single maturity date
 
1,101

Total
 
$
7,167


EQUITY INVESTMENTS
(In Millions)
 
Sep 28,
2019
 
Dec 29,
2018
Marketable equity securities
 
$
352

 
$
1,440

Non-marketable equity securities
 
3,287

 
2,978

Equity method investments
 
1,180

 
1,624

Total
 
$
4,819


$
6,042


The components of gains (losses) on equity investments, net 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
Ongoing mark-to-market adjustments on marketable equity securities
 
$
114

 
$
8

 
$
188

 
$
379

Observable price adjustments on non-marketable equity securities
 
84

 
43

 
100

 
191

Impairments
 
(17
)
 
(328
)
 
(79
)
 
(372
)
Sale of equity investments and other¹
 
137

 
202

 
713

 
167

Total gains (losses) on equity investments, net
 
$
318

 
$
(75
)
 
$
922

 
$
365


1 Sale of equity investments and other includes realized gains (losses) on sales of non-marketable equity investments, our share of equity method investee gains (losses) and distributions, and initial fair value adjustments recorded upon a security becoming marketable.
Gains and losses for our marketable and non-marketable equity securities during the 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 gains (losses) recognized during the period on equity securities
 
$
281

 
$
215

 
$
366

 
$
808

Less: Net (gains) losses recognized during the period on equity securities sold during the period
 
(54
)
 
(225
)
 
(321
)
 
(463
)
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date
 
$
227

 
$
(10
)
 
$
45

 
$
345


IM Flash Technologies, LLC
IM Flash Technologies, LLC (IMFT) was formed in 2006 by Micron Technology, Inc. (Micron) and Intel to jointly develop NAND flash memory and 3D XPoint™ technology products. IMFT is an unconsolidated variable interest entity and all costs of IMFT are passed on to Micron and Intel through sale of products or services in proportional share of ownership. As of September 28, 2019, we own a 49% interest in IMFT. Our portion of IMFT costs was approximately $140 million in the third quarter of 2019 and approximately $496 million in the first nine months of 2019 (approximately $97 million in the third quarter of 2018 and $324 million in the first nine months of 2018).
IMFT depends on Micron and Intel for any additional cash needs to be provided in the form of cash calls or member debt financing (MDF). Extensions of MDF may be converted to a capital contribution at the lender's request, or may be repaid upon availability of funds. During the first nine months of 2019, IMFT repaid $432 million of MDF to Intel. The carrying balance of our equity method investment in IMFT as of September 28, 2019 is $1.1 billion.
In January 2019, Micron exercised its right to call our interest in IMFT. The sale of our non-controlling interest in IMFT to Micron is expected to close on October 31, 2019. We will continue to purchase product manufactured at the IMFT facility for a period of up to one year following the close date.
ASML Holding N.V.
As of December 29, 2018, Intel owned $1.1 billion in ASML Holding N.V. (ASML). We have fully sold our equity investment in ASML.